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Neil Hennessy, Hennessy Mutual Funds CIO, on what he would ask Ben Bernanke if given the chance.
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-- thank you very much appreciate -- call I will let me up and finance chief investment officer for -- mutual funds in the funds at the fund has been doing awesome -- I'm glad you're with us.
Tell us so where do you see things right now.
No market stealing grain and main street not much.
Well -- -- thing is we spoke last week I you know my outlook hasn't changed I still believe that the markets in good shape a lot of people or just.
You know scared of march of 2009.
But if you step back you -- -- -- BS and if you look at it from a price to sales standpoint that we like the work that.
Look at I think really that you could see 5000 points on the upside and the Dow Jones from thirteen 10181000.
In the next 34 years simply because I think the price to sales ratio.
With a strong earnings economy picking up will get back that a -- of 2007.
What a price to sales ratio for the Dow Jones was about a dollar eighty for a dollar -- revenue.
Well our newest of about the federal gonna hear from mr.
Bernanke and about ten minutes now -- do you think it's appropriate for the Fed to keep interest rates low through.
The end of 2014 or do you think the economy showing better signs of a recovery.
You know actually -- -- a great question because I think not only be keeping low -- through 2014.
But probably 2015.
Because I was looking back in a piece that you did last week.
And you were talking about the speed of foreclosures and how were starting to pick up.
In the overhang of the real estate market if you start to move interest rates up you gonna -- real estate market we're not gonna get out from underneath.
This burden of of people not paying -- aired their mortgages and how to banks and get rid of -- But you museum start not picked up and or start a package jump and they're paying cash institution -- paying cash.
But if you go and you start to well I'll raise rates you're gonna see the housing that take another -- -- -- and employment NASA the fat actually seeing it come down to seven point 9% by the end of the year but.
We've talked before and I know your belief is that corporations are kinda -- the money in house they're buying infrastructure they're not hiring people.
Some -- as a little divergence there.
Well let's be realistic about this whole number of really there's fifteen to sixteen million people that are looking for jobs.
If that -- eight point 2% Eagles eight point two but that's not.
Eight point 2%.
So I think until Bob you know Washington gives clarity to corporations.
You're not gonna see any meaningful all -- hiring so let me put it in perspective here.
If work adding another 300000.
Or say 300000.
Jobs a month.
They get those people back to work you're talking anywhere between five to eight years.
If we're gonna do those numbers are right now or run and what about a 10020.
Mary maybe -- -- So I think you know I think gives a false.
What's the word I'm looking forward thanks easy to fall.
-- expect.
Yeah that's -- expectations -- kept their I'm glad to get Hollywood thing legal language.
The fact that and they I have.
They -- -- want to bring in Europe here I think perhaps the Fed is more worried about Europe behind closed doors and and it's actually landing on.
How much of a factor could that -- -- you put -- calculations in place.
May sort of reality you up for Europe -- -- have they gotten anything right.
Yeah so I mean you start to look at you start to look at -- from the standpoint at some point in time these austerity programs are just gonna have to go it and and -- there's no ifs ands and buts about it in the same with the United States we're gonna have to either get our act the other we're gonna follow right behind Europe.
But this -- day of the you know Spain gonna do their answers you're gonna do this.
And to me it doesn't have anything to do -- big amount of corporate earnings that are coming through that you guys are seeing on a daily basis amount of cash has been built up on corporate balance sheets.
The amount of business that will be transacted.
At once the economy really starts to pick up steam right now we're at all time highs in corporate profits pretax.
Last year is two trillion dollars this year it's going to be more right scary stuff -- I don't think they should be with us on this gotten fed -- --
