Market bears point to the high valuations in the tech and biotech industries, unprofitable IPOs and other signs of frothy sentiment as evidence that we’re approaching a market top, but many investment managers say they can still find good deals among the overvalued stocks. According to Grandmaster Capital Management LLC founder Patrick Wolff, what we’re looking at is a calm market that’s roiling underneath.Wolff who is a world chess champion, credits Warren Buffett as his inspiration to enter the asset management field.

Patrick Wolff Grandmaster Capital

“You have a landscape with good quality mid- to large-cap companies that are reasonably priced,” says Wolff, in an interview with Bloomberg Briefs. “At the same time, you have what we like to call tiny bubbles: Small caps are historically rich, you have more dodgy IPOs or extremely expensive companies.”

Wolff likes American Express, Microsoft

One of Wolff’s major themes right now is that he expects US large caps to outperform small caps in the near future. One example he gives is American Express Company (NYSE:AXP), which he says was very cheap just a couple years ago but is still fairly valued. Obviously returns will be lower for people buying in now than it will be for Grandmaster Capital, which continues to own American Express, but he still likes the stock’s prospects.

He also says that Microsoft Corporation (NASDAQ:MSFT) is undervalued by investors who are looking at the company the wrong way. Instead of getting caught up in Microsoft’s efforts to steal smartphone market share or capitalize on consumer software, he says that people should view it as “the world’s best enterprise software company combined with a somewhat dysfunctional consumer software company.” He likes that the Satya Nadella, who succeeded Steve Ballmer earlier this year, hails from the enterprise side of the company and hopes to see more emphasis there in the future.

Wolff betting against China with dollar call options

While he says that Grandmaster Capital doesn’t base many of its trades on its view of China, Wolff does argue that the market is far too complacent about the possibility of “not just a hard landing in China, but something a lot worse.” He isn’t busy shorting companies with a lot of exposure to the Chinese economy, but he is avoiding them whenever possible so that he won’t get burnt if thing turn sour. Wolff has also invested in dollar call options that he says is a cheap way to cash in on a falling renminbi.