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Far behind but our first guest says he is still bullish because quote.
Fundamentals look so good Hank Smith is chief investment officer.
And vice president and portfolio manager at however for atrocities with this right now -- I got to tell -- it.
Everyone's been nervous about the situation in Europe and it seems like the dominoes.
You know we -- from Greece Italy and now today the big worry is this -- yet.
You're sort of excited -- you whistling by it past the graveyard errors are real legitimate business that this enthusiasm.
Well I think you have to be cognizant of all what's going on in Europe and the risk of contagion.
But if they can prevent that contagion and -- financial meltdown.
All of them the focus comes back to the US and the fundamentals and -- -- to decidedly positive picture.
You have an economy that's expanding corporate profits are rising balance sheets are exceptionally strong and valuations are as attractive as they've been -- thirty years.
Normally those are good conditions to be a buyer.
I can agree done a lot of those points with respect to balance sheets valuations.
But there's still all whole set of other circumstances in this country.
Concerns about the super committee Washington.
And also what's going to be the catalyst because there were growing but nowhere near the kind of growth that we might need to unlock the value in the stock market.
-- you're you're right about that it's hard to put your finger army catalyst that's going to get us out of this stubbornly slow economic.
And and get some accelerated growth -- Corporate America has figured out how to make money in this quote new normal environment.
And they're doing it consistently.
Quarter after quarter.
And with decent top line growth as well so that is the hidden secret here if we're stuck in a slow growth environment.
Has figured out and not doing pretty well but heck are you saying there a lot of people saying that they figured out -- fired a whole bunch of people there working with robots computers and -- -- people work for no wage increases of that indeed is the case.
That how does main street ever get behind this rally and it really gives it to the next level.
Well you -- you -- -- that's partly right they're doing it with love razor like focus on the expense side of the leisure.
But they're also doing it we it.
Exposure to developing and emerging markets.
Where growth rates are two and a half times that of all developed economies so that's the other all part of the story.
But we are going to need with the respect to employment in the US it's still gonna feel like a recession until we get.
-- improvements in employment we agree with that.
Hank let me ask you in your note you called this time in investing a generational opportunity that if we don't capitalize on now you won't see it for another generation.
What does that mean and how does that.
Or how should -- drive our investment decisions.
Right because of the continued fear and anxiety that's evidenced in the marketplace.
With so much money on the sideline and in bond funds which are earning nothing.
You have -- situation today in which many blue chip high quality companies have dividend yields greater than that of their own tenure debt.
And it's generational because you have to go back to the mid fifties and that was the last time where you saw so many stocks yield more than bombs.
And of that is the opportunity to date.
And investors are willing to assume some volatility.
They can capture these terrific high -- -- good quality stocks and get dividend growth which you do not get obvious -- with.
-- -- -- some of those names we got some good deet tails good economic report with the US retail sales a lot their names are consumer Staples consumer -- -- -- what you're really liking right now.
Sure -- in the consumer staple area McDonald's.
All Pepsi look very good.
In consumer cyclical today Home Depot reported very good earnings win a second dividend increase within the past.
Year that looks a very good and technology.
Of Microsoft and Intel fit that bill -- yields greater than their own ten year debt.
In basic industry you have you have to pot all the same similar story energy ConocoPhillips.
-- health care Johnson and Johnson and Merck.
Again all of these companies very high quality companies -- dividend yields greater than that of their own ten year debt.
Thank before we let you go you talk about this generational opportunity and most of the ideas that you present -- or sort of defensive in nature.
Do you see yet with this explosive growth potential front of us do you like -- -- or would you be willing to go outside of these dividend place.
For something that can have serious appreciation with respect to principal.
Well -- -- -- write about all of them.
Only defensive companies but we also -- all the more cyclically oriented companies that -- some of the same.
-- as an example United Technologies.
Of that have all exposure to these.
A faster growing emerging market economies so we do believe that a balanced approach.
In terms of these defensive steady -- is.
And the more cyclical.
Economically sensitive companies is warranted today thanks a lie to cover a lot of ground we really appreciate it have a -- trust appreciate it thanks.
Good to be with the -- We're breaking news now from the sports world the Tory Detroit Tigers pitcher Justin Timberland.
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