But again, I want that growth to be reasonably valued.
Now stocks are more reasonably valued, they said, and ready to follow the economy upward.
"With equity markets, the good news is that they're reasonably valued in the U.S. and cheap overseas," he said.
But perhaps the market is reasonably valued on the basis that future returns will be permanently lower.
"WE'VE come off a very strong rally that has left credits reasonably valued, absolutely and relatively," he said.
By this measure, the most reasonably valued stocks are AOL, IAC/InterActive, and Monster, each of which trade at cash-flow multiples in the single figures.
"Pier 1 and La-Z-Boy are perfect examples of companies that are growing revenue faster than the economy," he said, adding that both were still reasonably valued.
As recently as last October, when other measures suggested the market was reasonably valued, the Graham-Dodd version of the ratio was a disturbing 27.
In that area we like NTT DoCoMo, which is down about 13percentt so far this year and is very reasonably valued.
Mr. Baxter says he aims to minimize risk by investing in stocks, particularly dividend payers, that he believes are reasonably valued.
"The clear winner in this is Asia, a region with long-term, above-average growth prospects where equities are reasonably valued".
