BOSTON (TheStreet) -- Oliver Pursche, manager of the GMG Defensive Beta Fund (MPDAX), says the Federal Reserve's "Operation Twist" plan should instead be called "The Kardashian."

"The idea came from seeing my wife read a magazine article about Kim Kardashian," Pursche says, referring to the reality-TV star of "Keeping Up With the Kardashians." "She's inexplicably popular, fairly useless and all about the back end. And that sums up Operation Twist pretty well."

Operation Twist is what investors and economists call the Fed's planned sale of short-term holdings and purchases of longer-term U.S. debt, which "twists" the yield curves of each and drops yields on longer-dated bonds, or what's referred to as the back end.

When it comes to uselessness, it's easy to make a case against Kardashian, the socialite with the prodigious derriere who's essentially famous for being famous. In terms of the Fed's actions, Pursche says the ineffectiveness of Operation Twist -- a term now firmly in the lexicon of buzzwords on Wall Street -- will emerge as time progresses and investors don't see yields plunging from current levels.

"When you have a 10-year Treasury yield below 2%, you're not going to drive it much lower," Pursche says. "Given the overall geopolitical and economic climate around the globe, there's little reason to believe you're going to see a significant rise in interest rates over the next year or two. The idea of going out and buying 7- to 10-year bonds is likely to be completely useless. It's all about the rear end of the curve."

Investors around the world have come to the same conclusion. After falling 3% in the wake of the Federal Open Market Committee's announcement Wednesday, the S&P 500 plummeted another 3% today. Around the globe, China's Hang Seng plunged nearly 5%, and equity indices across Europe, from Paris to Germany, were down more than 4%.

If Operation Twist proves to be largely ineffective, does that mean Fed Chairman Ben Bernanke is out of magic bullets? Not necessarily, Pursche says.

"I don't think it's fair to say there aren't more moves they can make," he says. "Should things get worse, they can widen the discount window again. They can guarantee certain levels of debts. They also talked about going out and actually buying mortgage bonds and collateralized mortgage debt. I think that could help take pressure off banks and loosen some of the tight lending standards impacting people on the fringe."

That does little to quell the nerves of investors, who appear to be rushing for the exits. Pursche says this overreaction is wrong, and smart investors should consider buying.

"If you're a long-term investor, you maintain your current stance. That is, you stick with the stronger names and investment vehicles that should do well over the next three to five years," Pursche says. "If you're generally comfortable with the stocks and securities that you own, I certainly wouldn't sell. I don't know that I'd rush to buy in, either. It takes a pretty strong risk appetite."

Breaking it down, Pursche says investors with a 20% cash position should stand pat, while an investor with half his portfolio in cash could add stronger companies. In the case of Pursche and the GMG Defensive Beta Fund, those are high-quality, dividend-paying stocks with strong balance sheets.

Pursche says he's looking at French oil company Total SA ( TOT). While Pursche likes the energy sector, Total is a well-run company in Pursche's view. A 7.5% dividend yield doesn't hurt either. "That to me is a company, if you like the energy sector, that is a great way to go," he says.

Pursche says beaten-down consumer-goods maker Unilever Plc ( UL) is a "terrific" company, with a yield over 4%. In technology, Intel ( INTC) has an attractive 4% yield, Pursche says.

Meanwhile, he's avoiding financials. Through Friday, the financial sector was the worst performer of the S&P 500 index, down 20% for the year. However, one financial stock Pursche does own is JPMorgan Chase ( JPM), which he argues looks attractive on a long-term basis at a price below $30.

Still, the bank's lending may get squeezed as the Fed seeks to lower yields on the back end of Treasuries.

-- Written by Robert Holmes in Boston.

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