Why I’m buying Italian stocks

The euro may not exist ten years from now - but Italy will, says John Stepek. And according to this key ratio, it'll be a good bit more expensive than it is today.

Politics matters. If the eurozone crisis has taught us anything, it's that. As we go to press, investors are holding their breath, waiting to see if European Central Bank (ECB) boss Mario Draghi can deliver on his promise to do "whatever it takes to save the euro", or if it'll be yet another case of European leaders over-promising and under-delivering.

However, there's something else that matters more than politics. And that's price. As Russell Napier told Merryn Somerset Webb in last week's issue (we've posted the full, unedited transcript here it's well worth reading, even if you caught the original), things may look bleak now, but eventually you reach a point where equity markets are discounting virtually every scenario bar the very gloomiest.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.