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Sanibel Captiva Vice Chairman Pat Dorsey on how investors can profit despite concerns out of Europe.
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Headlines out of Europe continue to rock investor -- -- a pat Dorsey.
Says investors shouldn't lose sleep over Europe and should instead look for cheap buys around the world pat -- is the vice chairman of sample kept Tina.
He has spent the last hour trading it's gonna say -- it is here as long time pet actually it's -- -- -- -- -- Let's talk about this you're not so concerned about Europe I mean why -- -- US investors should.
February but there's there's a couple things to remember -- and so there's an economic issue -- -- financial issues Europe's in a recession there's no question about that.
We've seen recessions have for growth slows down a little bit -- not the end of the world but people fear of course is Lehman redux right this global credit crunch.
But so far there is no evidence that the issues in Europe have gone global credit is flowing pretty nicely around the world China just ease their rates intact.
So there's really no evidence that -- that fit that credit crunch that you know limited access to capital that brought down the markets in late 08 it's -- -- -- President where would you put your money I mean that you mentioned China and what are our options here as far as emerging markets and -- and my children.
-- so your options are anything but bonds certainly.
But -- eight -- well my gotten up guy you know.
But it ulcers is right now you wanna be an owner of business is not a lender to businesses he and I he paid very well anybody around the world you're so well and -- are so tight right now but you've got you know the emerging markets ten and a half times earnings -- -- you know with knows very little sovereign risk.
Much better growth rates -- you have here in the US -- if you're a little bit more you know.
Risky you can even look at Europe and Europe's trading at ten times earnings at three and a half percent yield and you know what I don't think Nestle's gone bankrupt if Greece leaves the Euro.
Nobody can can fight against -- the beauty of a chocolate bar so that's just want your multinational plays but it's a European -- well.
-- exactly because just think about it I mean.
If you are not let you know accessing the European capital markets European banks -- wouldn't go anywhere near but just doesn't happen any domicile that Europe could happen to be you know.
-- headquarters in Switzerland and Germany and Sweden -- it might be.
That doesn't mean that you sell all of your -- to agree consumers who are.
Have a lot less money -- -- -- I think I just recently cut desolate from a from a -- a whole you know worried about not really.
Any -- one example of many and I you know in fact -- actually be looking more the cyclicals more of the Siemens dvds of the world because many of the safety stocks just like our treasury here in the US is -- to -- People are paying a high price for safety.
And so these global consumer product companies like nicely like PNG they're pretty richly valued relative to say global tech or cyclical business.
Siemens a candidate just imply mean that's more about global play exactly take apart the fact that they're based and -- on exactly or an ABB you know which is AM -- -- Swiss Swedish company.
That sells autumn -- autumn and -- -- -- equipment around the world who kind of look -- -- of -- and again.
They haven't -- based there.
But most of their sales happened outside of here you know when you say buying -- I think a lot of viewers it'll all concern immediately say don't binding European banks but I don't know -- -- forcing this year energetic.
But it just seems like percent this huge movement by the -- investor to get into safety that could be.
To be Munis I mean I don't I'm gonna giving -- less -- Exactly and that's what's so worrisome right now is I think what investors are -- perceived safety as.
Doesn't -- -- move a lot from month to month right -- stability like it to move in it will exactly.
-- and they're forgetting that safety is really do you have the money to do in five years in ten years what you want to do.
Okay and at you know one and a half percent ten year treasury won't point 6% in the -- and that's not gonna even beat inflation corporate bonds are -- -- -- be able.
Let me ask you this -- -- just had a discussion with someone else about about China and you -- -- -- two schools of thinking it's well things are slowing down and then it -- also the other side.
Linda -- -- 8% growth.
But things are you reporting yet exact.
I -- they are there are slowing down but the inflation levels come down to such a low level of -- -- running -- 3%.
That China has a lot of room to ease.
That is transition from a very investment led story you know infrastructure and buildings and machinery to -- more consumer driven.
It's going to take time OK that's not -- transition it will be easy.
But there's a lot of growth left in China 7% growth is not chopped liver but -- -- -- what do we get it exactly right now.
And interestingly your data release of the weekend Chinese exports were up 15% year over year in right.
Obviously they're selling -- somebody which means perhaps some of these fears of a global recession are little overblown -- Think that that they're next and that it exports are vulnerable because what we're seeing in the United States which some would say is continuing to what's happening in Europe.
It certainly -- they -- -- if we go into recession ourselves but you know our economy as was pretty weak and they and they and 15% as the most recent data coming out of China.
Somebody's -- stuff.
Let me ask you this if you work to advise a client would you say to do an emerging -- -- -- -- MSCI we -- -- lot.
I mean united global -- because a lot of viewers think to themselves.
I don't know I can't stop picketing you're exactly.
Exactly and so what I would say is that down.
So for European that you I think you mutual funds were fine.
Dodge & Cox is a great -- with very low costs that it has -- -- -- -- mark doesn't work as well.
Report but that's very interesting question about it right the emerging markets index big issue with the index the VW -- that you may look at a lot yeah is that it's very weighted towards.
Companies like Petrobras and Samsung which aren't really -- to -- Korea or tied to Brazil so that you ought to look for our smaller cap.
May emerging market companies there's -- wisdom -- ETF there's a mutual funds.
But look for the smaller companies in emerging markets.
That are really time to those fast growing local economies and on global export ship but they economies that are growing and looked exactly like items that I am a lucky they'll make like a defunct for climate -- Pat Dorsey is here from America -- -- -- see -- just a little bit.
Well.
