Today’s price action in the markets is a healthy pullback after a 40% rise off the bottom in late March, Lloyd Khaner, general partner and CIO at Khaner Capital Management, told Ed Harrison during today’s Real Vision Daily Briefing.

Khaner said that the falling prices may or may not be over in the immediate, but 5-10% pullbacks usually happen during a rising market and he thinks we’ll see continued upward movement through the end of the year.

Though we’re currently in a recession, Khaner thinks we’re pulling out of it and we should see real improvement in 6-12 months. His macro view and stock market view are both positive, though he did say he expects plenty of volatility and pullbacks along the way.

Because of the challenges of investing during a recession, Khaner focuses on fundamentals. From the bottom up, on a case by case basis, he looks for positives in operations and earnings before he makes a buying decision.

To help determine both value and the growth opportunity, he does a deep dive into management to see how they’ve handled challenges in the past, how healthy their balance sheet is, and how focused they are on operations. If an industry or sector is in cyclical decline or dying, or the balance sheet is too stressed, he’ll pass – no matter how good operations and management are.

“You have to be extra patient in this market, you have to step in slowly, but it pays,” he said.

Khaner also said that companies that were hurt badly will grow more easily off a lower base, and if they are very high quality with excellent management, they should do very well in the next one to three years.

“We’ll have a low-growth economy certainly this year, and into next year, so you’ve got to go to companies that are growing faster than the GDP. Growth will outperform but you have to find value in that growth.”