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b'With Vitaliy Katsenelson, Chief Investment Officer at Investment Management Associates and contributor to Institutional Investor Magazine

As Chief Investment Officer at Investment Management Associates in Denver, Colorado, Vitaliy Katsenelson knows we can\\u2019t look to the history books for answers in today\\u2019s uncertain and rapidly changing economic climate. One takes a lot of risks making large bets on any one particular investment theme.
In an article written for contrarianedge.com, \\u201cManifesto \\u2013 The Values of Value Investing\\u201d, Vitaliy explains the difficulties of betting on inflation versus deflation.\\xa0 A good investor knows what to invest in to make money in an inflationary world, just as he or she knows what to own for a successful outcome in a deflationary world. The problem is that today\\u2019s economic environment is unprecedented in its unpredictability and, therefore, betting large amounts of money on any particular outcome carries unacceptable risks. The best approach is a diversified portfolio which covers all possible outcomes.
Vitaliy discusses the challenges of being a value manager due to the fact that the value style can be out of favor for long periods of time. The market often acts irrationally, rewarding companies that have little economic value but sparking the investing public\\u2019s imagination and desire to get on the bandwagon. Value investing, by definition, involves paying a fair price for a solid and sensible business without regard to how popular or \\u201csexy\\u201d a venture it may be. A good example is Apple. For a while, everyone wanted a bite of that Apple, making it the hottest stock on the market. Apple has since cooled and is now a favorite pick of value managers. How long will it take for the market to once again recognize its true future value? \\xa0It\'s anybody\'s guess, but therein lies the value manager\'s greatest challenge\\u2014convincing investors to hold on while "fresher apples" hit the marketplace.
The role of media in shaping public opinion cannot be discounted or underestimated. We live in a media-driven culture and few of us are immune to its influence. When it comes to looking for investing tips, the news media may try to explain what\\u2019s going on (ratings do count) but financial professionals understand it\\u2019s just noise and that no one really knows.
Great minds of the past and today have cautioned against being too confident.\\xa0 Albert Einstein once said, "A true genius admits that he or she knows nothing.\\xa0 Smarter and humbler people than me were willing to say \\u2018I don\'t know\' and it\'s okay for us mortals to say it, too."\\xa0 More recently, Warren Buffett\\u2019s partner Charlie Munger said, "If you\'re not confused about a global economy today, you don\'t understand it."
As an investor, what you should know is what\\u2019s inside your portfolio and, as Vitaliy explains, it\\u2019s the job of a good financial advisor to communicate clearly and transparently what and why you own what you own. As the market does its up and down dance, the client, instead of panicking, can then move confidently into their investment future with full understanding of the logic behind their investment choices.
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Steve Pomeranz: Vitaliy Katsenelson is Chief Investment Officer at Investment Management Associates in Denver, which is a value-oriented investment firm specializing, as I said, in value investments, and he writes extensively for Institutional Investor Magazine and other important publications.\\xa0 He\'s been with me on the show a number of times and is a great source and a great investor himself.\\xa0 Welcome back to the show, Vitaliy.
Vitaliy Katsenelson: It\'s my pleasure, Steve.'