On the stock side, he's invested in companies going through restructuring, like Virgin Media. The company provides television, broadband, fixed-line and mobile telephone services in the United Kingdom. The company plans to cut 2,200 jobs, or 15% of its workforce, over the next three years.
Other mutual fund managers, like David Winters, portfolio manager of Wintergreen Fund, are buying and holding stocks that are selling at distressed prices. But the companies have solid business that generates cash flow, and they also benefit from pricing power and from management that creates shareholder value.
He recently increased his positions in Wynn Resorts after the stock dropped nearly 30%. The company owns Macau, the only gambling casino in China, as well as upscale properties in Las Vegas.
He also bought Chesapeake Energy, an oil and natural gas exploration and production company with properties in 25 states. The stock is selling at just over one times book value.
"Although no one knows precisely when, it is inevitable that these wild bargain prices will at some point in time come to a close," Winters says. "When that happens, many investors will wish they had accumulated a bigger stake in these bargain companies."