NEW YORK (TheStreet) -- Dr. Robert Shiller's acceptance speech for the Nobel Prize in economics focused on "speculative asset prices." From the podium in Stockholm, Shiller's remarks touched on how the market is influenced more by investor psychology than economic fundamentals. For investors, that means stocks can be beaten down for reasons having nothing to do with the long-term business outlook for the company.
Toyota is the world's biggest automaker by sales and production. General Motors is the number-one car seller in China, which lifted its sales by 2% in the first quarter. But due to scandals that it no way threaten the overall viability of either company, both are down for the last month, quarter, and six months of market action. Since the first of the year, General Motors has fallen by more than 16% with Toyota dropping over 11%.
For long-term investors, that is a buying opportunity for both stocks.
Back in late December 2013, TheStreet ran a series on "Least Favored in 2013." I wrote about Caterpillar (CAT), the largest heavy equipment maker in the world. Caterpillar was battered by the traders last year due to writing off the $580 million cost of a Chinese company that proved to be a fraud. About Caterpillar, then trading under $87 a share, I recommended that, "Investors with a long-term horizon should consider buying on the dips to accumulate a position at a discount."