If I had a hundred dollars for every time I heard yesterday that the markets around the world were dangerous, I would be a very rich man. I am talking about the discussions among big hedge fund managers at CNBC's Delivering Alpha conference, and how the managers were almost uniformly concerned about the role of central banks -- and how they prop up stocks or distort the economy to create artificial opportunities that will all be taken away one day -- causing tremendous heartache and stress for any investor.
I am of a very different mindset. First, I believe lower rates were and are necessary evils -- although not as necessary now -- because I think the severity of the Great Recession seems to elude the wealthy. I just don't' think they know what's out there. They can't see the populist rebellion that, if taken too far, really would be dangerous for the world's economy.
And, perhaps more important, they can't see that it is a market of stocks, not a market of markets, as most at the conference implied -- and therefore they are either hopelessly removed from the stock process or just don't give a darned about what companies are doing to improve their situations.
Every day I interview CEOs, every day. I know that some periodically admit that their stocks are benefitting from the Fed's moves, but their own moves are far more important.
Yesterday, for example, after Delivering Alpha concluded I interviewed Mike Mahoney from Boston Scientific (BSX) . I remember 10 years ago when Boston Scientific paid $27 billion for Guidant, a heart device company, in a bid that almost wrecked BSX.
Since then, Boston Scientific has struggled back mightily under the leadership of Mike Mahoney, who has been at the helm for five years, having come from Johnson & Johnson (JNJ) . And it has now developed a suite of products that is dazzling the rest of a very competitive industry. His cardio devices, along with the endoscopy businesses, are on fire to the point where Mahoney's company has 10% organic growth, with very strong profit margins.
Not only that, but the company is beating its own projections -- growing much faster than it indicated it could do just a year ago. Why? Steroidal, Fed-induced inflation? The intervention of central banks worldwide? Artificially low interest rates?
How about invention? How about ingenuity? How about a competitive spirit coupled with leadership and sound financial management?
But here's the issue. Boston Scientific is "only" a $30 billion company. That's too small for most of the hedge fund managers I listened to yesterday. They have defaulted to the macro, so to speak, because a macro view is about trying to game whole markets. Some of these fund managers would have to own all of BSX and even then it might not move the needle. All the work that Mahoney has done, all the innovation is meaningless to them.
But not to you. Not to homegamers. Not to the dying breed of stock pickers who would love to have a 30% gain from one of their stocks.
So when you hear dangerous and inflated, I want you to think of diligence and innovation. Those aren't manipulated. Those aren't supported by the EU or the Fed or any other government.
They are supported by themselves and, frankly, I don't care what they say at the panel, BSX is at $23 because it deserves to be, because of what the company has done to save itself from that disastrous Guidant acquisition. It doesn't matter to the big dogs. It should matter to you.