Buy Coca-Cola and sell Google, says Columbia Business School professor Bruce Greenwald. A renowned value-investing expert and award-winning teacher, Greenwald's classes are consistently filled beyond capacity--especially when Warren Buffett visits to guest lecture. Greenwald is co-author of several acclaimed books, including 2001's Value-Investing: From Graham to Buffett and Beyond, and revered by Ph.D.s and portfolio managers alike for his expertise.
Greenwald sat down with StreetTalk in an exclusive, three-part interview to discuss why value-investing works and where to find bargain opportunities in today's markets.
Part 1: Loving Low Multiples
Greenwald says value-investing produces the best long-term returns, and the proof lies in the results. The value approach has consistently outperformed other investment styles and the broader market in almost all extended periods since the 1920s. Greenwald says today's best value buys are U.S. large-caps trading at low multiples and holdings in small Asian markets.
Part 2: Unpopular Is Your Friend
Ugly and boring stocks are a value investor's best friend, says Greenwald. Though these companies are unpopular on Wall Street, Greenwald says Wal-Mart (nyse: WMT - news - people ) and newspaper giant Gannett (nyse: GCI - news - people ) are positioned for good long-term returns because of their enormous economies of scale. Greenwald's bullish on dividend-paying large-caps such as soft-drink maker Coca-Cola (nyse: KO - news - people ), which he says is a better long-term buy than U.S. Treasury bonds.
Part 3: Don't Can Coca-Cola
Greenwald eschews the more glamorous technology sector, which he says presents lottery-ticket odds of long-term success. He says search engines, e-retailers such as Amazon.com (nasdaq: AMZN - news - people ) and even market darling Apple Computer (nasdaq: AAPL - news - people ) are not well-protected from future competition.