What stocks or sector would your sell or avoid right now?
Frank: We are avoiding the over-valued dividend payers as investors are searching for yield without regards to valuation. Wal-Mart (WMT), Verizon (VZ), and most utilities look quite dangerous at these valuations.
What is your outlook for 2013?
Frank: We expect more turmoil out of Europe and a continued bumpy ride in the U.S. However, we think the yield and momentum markets could break down and a return to fundamentals will result. Furthermore, QE3 is spurring significant M&A. We have already seen three events in the Frank Value portfolio, and if inflation expectations continue to rise you could see a rush out of cash and into low-valuation equities.
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