For the past two years, amid a raging bull market, it’s been a smooth ride for stock pickers like Jim Osman. “You just throw a dart at the wall when something goes up and you go, ‘look at me. I’m the greatest’,” said Osman, the founder of The Edge Group, a firm that provides investing recommendations to top money managers and individual investors. It’s a trickier environment this year with the S&P 500 down around 13% year-to-date and some individual names taking an even bigger hit. Popular stocks from the last two years like Netflix (NFLX) and Zoom (ZM) are down 66% and 37% respectively.
Osman admits he’s “one of the losers” who likes this type of environment. “In a falling market, you’re going to see real stock pickers and real people who are going to be smart about making returns on the way down,” Osman said. “There’s a real opportunity to make substantial gains,” he added. “If people can disconnect from the market and macro views and look towards individual stocks, and also refrain from using leverage and keep a bit of cash on the side for these really ugly days then I think you’ve got a great opportunity for the next few years in really get some good companies at some cheap prices,” Osman said.
Here he shares some of the stocks he sees as opportunities in the spinoffs sector.