By Tom Bradley

In postings on March 31st and May 14th, I mused that the financial crisis and market meltdown had turned everybody into an economist. We all have a view on how deep the recession will be, where the dollar is headed and when the recovery will come.

In last Friday’s Report on Business, Robert Buckland, chief global equity strategist at Citigroup, shed some light on how this trend has played out in the ranks of professional investors (see Is Good Stock Picking About to Make a Comeback?).

He said, “We still meet too many fund managers who, two years ago, were diehard stock pickers and would never see a strategist. Now they are all over the latest moves in the Shanghai market or the ISM (Institute for Supply Management) index. The bear market has bullied them into becoming much more top down, and their view on the market/economy is often the reason why they are reluctant to get on board the rally in riskier or more cyclical stocks.”

As investors, we all have to be mindful of moving away from what we do best. A top-down approach to investing has always been a tough way to go, but when untrained investors or died-in-the-wool stock-pickers are attempting it, the degree of difficulty goes up.

Clearly, we need to be aware, and wary of, the business environment around us, but our focus must be firmly on buying undervalued businesses.

Again, Mr. Buckland: “Just when the bear market (and subsequent rebound) has bullied us all into being very macro is the time when a good contrarian should be moving micro. At the very least, equity managers should get out of the office and see some companies...and come up with some interesting bottom-up themes instead. It’s time to move on.”