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Ariel Investments Vice Chairman Charles Bobrinskoy gives his outlook for today's market.
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-- Nico gold though are first guest here of the shows says it's not 2000 date even with the heavy selling we had earlier in the week.
Plenty of opportunity.
Especially in the financial -- we're seeing that today Charles Prince was -- vice chairman an area that.
Portfolio manager of the aerial -- but he's CME today in Chicago so.
The people -- looking -- Europe and our back in rally mode so it depends on what -- catch the market people look at in Europe and saying they're gonna have a Lehman moment and 08.
Moment but you don't see it that way.
That's right there's a tendency -- investors to put too much emphasis on what happened recently.
And not look at longer periods of time so in 2008.
There was no way to be too negative on financials the worst things anybody said about Lehman turned out to be true about countrywide about Citibank.
They were all true.
This time people where extrapolating things saying things gonna happen and we don't think the situation is anywhere near as bad -- -- the differences as you see them for us and why this won't be a repeat.
Of that.
Because back then the mortgage market in particular the sub prime mortgage market really -- the securities really were worth only pennies on the dollar.
Today the French government debt is not worth pennies on the dollar there may be slight haircuts.
There may be people that are gonna take big losses in Greece.
But Italy is not going under France is not going under night and French banks are not going -- You know people watching us are -- what should I do about all this they say.
-- the market is down futures was the last couple days so -- I don't know I don't wanna sell what everybody else is selling.
Then they see -- your point rally today from don't wanna buy when everybody else is finding it's it's one way or the other with no in between here lately how should they handle it.
Well financials have been one way they've been down big issue you're right they've rallied up the bottoms.
But we're still at extremely low levels so something like Morgan Stanley is still only about point seven times tangible book.
Tangible book is in the mid twenty's in the stock is roughly around seventeen or so so.
We are way below where the stock should be -- there's still a lot of upside from here and the worst case for them is watch because it'd you know some people c'mon tell us a worst case is very very bad because in Europe.
But you say you just made the argument that it won't be as bad as some people think so what's the worst case that these financial -- to -- Careful about investing it yet.
Share -- -- I'm not saying it's not risk here that clearly is risk if if the situation in Greece got ugly if instead of the fifty cent defaults.
Fifty cent haircuts the -- decide not to pay anybody back a penny.
If there was contagious in to Portugal and Spain.
Yes then Morgan Stanley stock is gonna trade down but frankly even under that scenario.
We think it's gonna end up being worth more than point seven times tangible book.
It could be -- here that's the worst case scenario -- very bumpy for a couple of months that's the case if you think about buying financial says investments that's the case is heard from Charles -- -- out Chicago from aerial.
Charles again thanks very much for coming -- always appreciate it.
