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WBI Investments CEO Don Schreiber on why J.P. Morgan’s bad news was temporary and makes its shares a great value for investors.
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Well here's a guy -- right after that announcement of the real losses at JPMorgan said.
Just as the stock was falling on buying he's the CEO and co portfolio manager of WBI funds he's don't -- one of our faith guests here.
And you looked at that bad news coming out of JPMorgan and said that's not bad news that's good news for me why.
Well I really think that the news is overdone I think that it's not really about two billion dollars.
It's really about the fact that they were surprised that this could happen.
They don't have the controls in place to make sure that they don't have big capital losses have proposed 20000000200 billion.
That's what the problem us so and that's it.
Simple profit it is a fixable problem liked -- I definitely think so it's a wake up call.
The bank need to get tighter internal controls the regulators need to make sure that banks are held to task.
Because they have been -- that recently.
The reason why we bought the stock is because all of this bad news was in the price of the stock the earnings are rising the revenue is rising and.
Price started rising its third if that's what change -- you buy that we boarded at 33 okay.
So -- already in the money yes OK again another lesson for our viewers that just as the bad news is piling on a good company.
That maybe your chance that that your opportunities at your philosophies -- what we like to buy stocks when they're cheap we don't.
We we try to ascertain what the -- story here's what's driving this stock to get cheap.
And make sure that that's really abated in our opinion.
And that the trains are strong OK there is one thing that is very strong as well that is the dark clouds over the news flow.
A lot of it coming out of Europe what you just heard that Teddy Weisberg on the floor of the New York Stock Exchange was saying.
Europe as yesterday's story now we look forward and -- -- you spread does clouds like yahweh.
Look at it on my great -- to say that gets -- -- -- forum.
What you look at you know that you look to the north don't -- this at least one Canadian banks that it like right.
Well you know we think the financial services sector you know JPMorgan we are a couple of domestic US banks we think they're really undervalued.
They're selling -- 78 times earnings but there are Canadian banks that have been also.
-- dragged down because of the financial crisis and yet they didn't suffer these are strong franchises.
So right now we -- TD Toronto Dominion Bank.
And and that is -- again a company that has very strong balance sheet.
Good earnings could revenue and it's selling.
Below what we think the true value is right.
Again the price earnings ratio of nine point 7% for this company that's cheap by the way everybody up if the stock is down about 7% over the past year.
They see you appear three point 6% again better than the thirty year yield of -- US treasury -- and I think you made a great point.
Three point 6%.
You can find a lot of 34% stocks that are fantastic there -- miss price.
That are going to move if some of the storm clouds clear okay.
But you're waiting for that are you afraid -- capital comes to all European investing -- -- -- you can pull out for us -- No yes we're not a pretty kick Freddie kept for -- -- when the investing.
You know the we think that the storm in Europe.
Is -- the tone is starting to change we see a resolution coming.
When the market starts to see that you will not be able to catch prices from your book -- international what do you buy right now Willer.
What do the things that we like are the most defensive stocks today we -- Novartis.
-- -- is a drug company again good trends the the pharmaceutical industry is doing well both domestically internationally.
This the company you can afford to own -- -- dominant franchise again dominant business.
In the world.
