In a wide ranging discussion this morning on CNBC, Whitney Tilson provides his views regarding the overall valuation of large capitalization stocks compared to bonds and comments on several specific companies including Johnson & Johnson, Microsoft, and Berkshire Hathaway. We highlighted some of Mr. Tilson’s views on Microsoft in a bullish article on the company posted on August 31.
Mr. Tilson believes that investors have a major opportunity to own blue chip stocks at valuations that offer excellent prospects for long term returns that will easily beat the yields available on high quality bonds. He mentions Johnson & Johnson as an example of a stock investors can purchase at a yield that far exceeds the interest offered on Johnson & Johnson ten year bonds. We presented a bullish case for Johnson & Johnson in May when the shares traded at higher levels. In addition, he revisits the bullish Microsoft thesis and comments on Berkshire Hathaway’s valuation.
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Disclosure: The author of this article owns shares of Berkshire Hathaway and Microsoft. No position in Johnson & Johnson.