CONSUELO MACK: And when you're saying reinvesting in the business, you're specifically talking about stock buybacks?
DAVID WINTERS: Well, not only stock buybacks, but let's say you have a business which is growing and has needs for the cash, so you can build another factory. That factory will end up giving you even more cash flow. Then you can build another factory. And so you know, you try to, you really look for businesses that I call them “the gift that keeps giving.”
CONSUELO MACK: Do you have any need to be more defensive than you have in the past? I mean certainly 2008 was not a good year for Wintergreen either. Do you feel that you need to manage risk better or--
DAVID WINTERS: I think 2008 there was nowhere to hide. The only ...
CONSUELO MACK: Except for cash.
DAVID WINTERS: -- was to have liquidated everything. And the only people who really made money were massively short. And you know, we were short some. But you know, that's a whole other game. You know, we've really done the opposite of the crowd. We think the thing to do is to-- that businesses' equities in the future are not what people should be scared of. Having all your money in ten basis points, you know, earning, with no inflation protection, nothing- that's I think the risk today. I think investors are, they're just opening themselves up to get crushed. And the people who are buying bonds, it's the same risk. At some point, rates are going to go up.
CONSUELO MACK: So Wintergreen is betting on growth in the future, in stocks?
DAVID WINTERS: We like companies that can grow, you know, that are undervalued, that can grow, especially organically. They're going to generate more free cash flow. They're going to pay us a dividend. They're going to buy back the stock. And they're going to make us rich. That's what we want.
CONSUELO MACK: From your lips to heaven's ears at any rate. David Winters, the Wintergreen Fund, thanks so much for being with us.
DAVID WINTERS: Thank you, Consuelo.
CONSUELO MACK: Winters will have more stocks to choose from with at least two of those qualities. Standard & Poor’s recently reported that more companies are increasing their dividends, and stock buybacks are soaring from the record lows they hit a year ago.
We hope you can join us next week. We are going to begin a two part series on Retirement Planning with two pros on the topic. Kiplinger’s retirement guru Mary Beth Franklin and top-rated financial planner Mark Cortazzo of Macro Consulting Group will be here to discuss the new vision for retirement. The good news is we are living longer and healthier; the challenge is how to pay for it. They will have some sound and innovative answers. Until then, to view this program again, just go to our website, wealthtrack.com, where you can see it as a podcast or streaming video. Thank you for watching and make the week ahead a profitable and a productive one.
Copyright (c) Consuelo Mack WealthTrack.com
