Where Managers Put Money to Work

Tom Forester (Portfolio Manager, Forester Value Fund): We've added some names in tech that haven't run with the rest of the tech guys. We've added Microsoft--or we've added to Microsoft, I should say. We like the stock. It was beaten down quite a bit this year. But it's in almost a monopoly position, and it does have some economic--it goes down with the economy like anything else. People buy less computers. They've had trouble with Vista and it really hasn't been adopted as much. But they've got a great product on the horizon that'll ship later this year in Windows 7.0. And we think that that will start a new adoption by corporations and there'll be a new spend as people start updating their computers again. We think longer term that's just a great stock.

We also like some of the oil names. We currently own Conoco, which is one of the cheaper integrated oils, if you will. It's a lot cheaper than Exxon or Chevron. Chevron's another name that we own. We think that Conoco's got some pretty good upside to it.<transcript>

Charles de Vaulx (Partner and Portfolio Manager, International Value Advisers): Last fall we did buy a few stocks in the emerging markets. We wish over the past few months that we had done more of that--our mistake. We had owned no banks for many, many years before at IVA and First Eagle. So it was interesting last October to buy our first bank in a long time, Bangkok Bank. Even though, as you said, there are some politcal issues in Thailand, the bank today is squeaky clean, very well-capitalized, tangible equity to assets, 10%. Well-funded: loan to deposit ratio of 90%. Plain-vanilla kind of banking, what I call the 3-6-3: Borrow at 3% (the bank), you lend at 6%, hit the golf course by 3 in the afternoon.

Eric Fischman (Portfolio Manager, MFS Growth Fund): I think within financials, there is always interesting places to be. So whether or not you are bullish on the credit cycle and where we are in credit, there are other areas within financials that are interesting places to look at where there is secular growth and secular earnings growth and great business models. For instance, in some of the credit card processors, Visa and MasterCard. Those are great business models. They don't take credit risk. They have pricing power and there is strong earnings growth, so people are focused on the consumer spending environment and worry about credit cards and credit losses.

But if you look at Visa and MasterCard for instances, they don't take credit risk. They have pricing power. They have been able to take pricing power throughout this downturn and they are going to be able to show earnings growth, significantly above the market for the next three to five years. And that's really what we look for with ideas.

In a similar vein within the investment banks and brokers, Goldman Sachs is going to be a huge share-taker over the next several years as other companies lose share, some of the big banks that have been in this and no more Bear Stearns, and no more Lehman Brothers.

So they are all going to be share winners and share losers, and there is going to be a lot of share to pick up by the survivors within that.

And so we are looking for the survivors and who are the share takers and who has pricing power and who doesn't have pricing power, where is the credit risk, where isn't the credit risk, to find great ideas within the financial sector.