NEW YORK, April 5, 2013 /PRNewswire-USNewswire/ -- Joe Terranova, chief investment strategist at Virtus Investment Partners and a contributor to "Fast Money" on CNBC, told an international audience of students and faculty in New York to have confidence in their instincts, but also to back them up with a sound risk-management strategy. "The first question you want to ask," he said, "is 'How much can I lose?' You need to define your risk first and foremost."
Terranova, speaking on the second day of Quinnipiac University's Global Asset Management Education (G.A.M.E.) III Forum at the Hilton Hotel Midtown, offered the students some investment advice based on where the world - and the markets - are going. He focused on opportunities created by the lower value of the Japanese yen, and by what he called "the blessing of shale"-an abundance of inexpensive natural gas in the United States.
A devalued yen, aided by government planning, helps Japanese companies sell their products abroad, and that adds the value of large mega-cap companies such as Toyota, Mazda and Bridgestone, he said. Terranova said that Japan's actions will also lead highly competitive South Korea to try and push its own currency lower. "We're seeing that already," he said.
Terranova also pointed to the granting of a federal license to export liquefied natural gas (LNG) globally to a subsidiary of Cheniere Energy, Inc., which has already secured long-term purchase agreements for its gas. He noted major imbalances in natural gas prices around the world that could make export very lucrative. "The expectation is that over the next two years there will be a recognition that we're not going to see big price spikes in U.S.-produced natural gas," he said. "And that will clear the way for the investment needed to safely turn our import terminals into export terminals."
Terranova said that some of the biggest opportunities for investment occur at times of crises, which have to be read correctly. He said that much of the analysis he hears is not backed by solid research and understanding of market fundamentals. For instance, he noted that tensions between the two Koreas are likely to push oil prices lower, not higher. That's because South Korea is an oil consumer, not an oil producer, and conflict reduces demand. "Oil prices went down after 9/11 for the same reason," he said. "Conflict in producing nations is bullish, but in consuming nations it's bearish."
The second day of the forum included a mix of keynote presentations and panel discussions on such topics as real estate investment, corporate lending and portfolio management.
The forum, founded by David Sauer, professor of finance in the Quinnipiac School of Business, attracted 1,000 student participants from 44 states and 33 countries, representing 118 universities to hear 120 speakers over two and a half days. Quinnipiac students helped organize the event, and take part in extensive Q&A sessions with the speakers.