Arnett Lanse Waters is a bit of a news junkie. His best investment ideas, he admits, come from paying constant attention to world events. During the week Black Enterprise caught up with him this spring, workers in the Gulf of Mexico were scrambling to clean up a massive oil spill, the U.S. economy was showing further signs of turnaround, and the European Union was preparing a financial bailout package for Greece. Waters was naturally brimming with thoughts about how investors might make long-term bets related to these occurrences.
Like his investment strategy, Waters’ career has been multifaceted. The native Bostonian, who attended Harvard, began working in public service in 1971, running several state and local employment training programs. Later, he honed his economic chops as an aide to the former chief economist of the Bank of Boston. Waters then shifted his focus to finance, cutting his teeth as a stockbroker at Merrill Lynch, and then working in various executive positions at Merrill; Donaldson, Lufkin and Jenrette; and Shearson Lehman. Waters founded A.L. Waters Capital L.L.C., an investment banking and corporate finance firm, in 2004. Whenever he can, he urges his clients to think globally. “Technical analysis and economic indicators are great tools,” says Waters. “But to be ahead of the curve you have to look at the big picture.” We talked to Waters about his view of the world and of financial markets, and asked him to share a few investment ideas.
How do you see the U.S. economy and the financial markets performing in the second half of this year?
We see the U.S. economy slowly getting back into shape—the gradual effect of President Obama stabilizing the banking system. The Dow should trade in the range of 9,000 to 13,000 with a lot of volatility. But I’m optimistic about the U.S. economy. There’s no better place in the world to trade.
What are some of the global themes you’re acting on now as an investor?
There’s what I call the European problem. It’s naive to think that the sovereign debt crisis will remain a Greek problem. Portugal, Italy, Ireland, Greece, and Spain all face overwhelming deficits. Ireland’s deficit is already larger than Greece’s. The European
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