Olstein Capital Management says equity market selloff was overdue

The head of Olstein Capital Management, which has about $833 million under management, said Friday that this week’s equity selloff is no cause for alarm because the downturn was overdue.

The Dow Jones Industrial Average plunged nearly 700 points or about 2.5% on heavy volume -- its worst weekly decline in two years -- while the yield on the 10-year bond soared.

“The market selloff is fine. It’s going to give us an opportunity,” Bob Olstein, chairman of the Purchase, N.Y., financial firm, told FOX Business’ Maria Bartiromo.

“The market got ahead of itself. Some of our values we sold a lot of positions, when they get as they move up and down from our value we sell them. And now we’re sitting there with our hands folded waiting for this correction to finish.”

According to the January jobs report, U.S. employers added a robust 200,000 jobs, exceeding economists’ expectations of 180,000. Typically, a higher-than-expected jobs report can cause stocks to decline, because it can foreshadow an interest rate hike from the Federal Reserve. That, in turn, means a higher cost to businesses of borrowing, and higher costs mean lower profits.

“I would think that after the gain we’ve had in the first month of January, look stocks go up and down just like the sun comes out and the sun doesn’t come out,” he said.

Though his business only invests in U.S. stocks, Olstein said that most of the American companies are international.

“And it’s not the old days where you’re buying internationals here and U.S.s here. You get IBM with 60 percent of its business overseas. We’ve got – most companies have at least -- 30 to 40 percent of their profits overseas, so any U.S. company we have to understand their overseas earnings and whether or not we believe them or not,” he said.