A Contrarian Manager Bets on Growth

Green succeeds by doing what so few fund managers do these days. He bucks trends, ignores fads and shuns traditional sector weightings and allocations. Instead he calls himself a "deep-value contrarian." He looks for shares that are out of favor with investors but where he sees a catalyst that can bring them back into demand.

It's the equivalent of a savvy fashionista who shuns the ludicrous prices on Fifth Avenue and instead picks through the bargain bins looking to grab next year's hot item on the cheap.

So what's he buying now? In a word: growth. Green, in his latest missive to his investors, says he's raising his stakes on selected technology, media and telecoms stocks. He also sees "interesting opportunities" in certain retail and drug companies.

The reason: So-called growth stocks have been out of favor for so long that today he thinks they offer the best "value" in the market. So much for all the institutional handcuffs that stop the managers of your "value" fund from investing in "growth" companies, even if they make exactly the same calculation.

The old stock market division between cheap, low-growth "value" stocks and more expensive, high-growth stocks was only valid as long as shares in low-growth companies stayed cheap and their counterparts stayed expensive. Like most artificial investing rules, it started to become invalid almost as soon as it became orthodoxy. This is why great investing is an art as well as a science.