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Hodges Small-Cap Fund Co-Manager Eric Marshall on how investors can boost their portfolios despite the negative economic headlines.
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Into these numbers in overall -- out what this means for your money air Marshal is co manages the Hodges small cap -- he's joining me the last hour of trading.
Yeah I I know that you're very much obviously into small caps.
I'm curious if if -- -- think that small caps are doing better because they don't quite have that global a risk that some of the large caps.
Well I think that's something to take into consideration.
I think right now everybody has become overly focused on all the macro headlines out there.
And at the Hodges small cap fund were really.
Focusing on what's going on in the individual businesses that we're investing in.
And even in a slow turbulent macro environments we have right now you can still find pockets of growth.
-- gonna slow -- I would.
I would normally -- excuse not to say the Russell is as the -- the benchmark the Euro -- -- measure yourself against but if you look at the Russell vs the other major averages that are showing our viewers settlement onscreen.
You know we're actually lacking the Dow the NASDAQ and yes and -- so I'm curious why why that is if your argument is true that small caps to avoid.
Global -- -- I think part of that in the short run is really just risk adverse and everybody is afraid of stocks.
And they're really gravitating to the more larger more defensive areas of the market.
OK that's fair enough your small -- fund is outperforming the Dell and the Russell.
At this point -- today I mean what types of stocks are you picking any kind of going for certain sub sectors.
Underneath the fund right now.
Well we're like -- said we're really focusing on companies that are able to.
Grow earnings in cash flow through organic means we look for companies with high barriers to entry that are exhibiting.
Pricing power have good management teams and we think of ourselves -- almost like private equity investors in the public market we're not worried about what the stock price is gonna do.
And the next point four to 48 hours were really thinking about things.
Longer term I was looking at the three year our return for the funded in over 20% obviously which is a positive -- 2000 your benchmark.
-- than 30% on the return I mean do you do get nervous about that we see kind of those numbers that obviously that you want people coming to your funding and stay in -- -- -- say what you.
-- right.
Well you know we focus on investing our money where we can find the highest rate of return relative to the downside risk -- we're we're looking for things.
Well we see more upside than downside and we think right now.
Stocks really represented a more attractive.
Opportunity than bonds or other asset class.
-- what I was noticing you're the show back in March.
On the showing you ahead that you didn't really have that much of it was -- 2% global.
Stuck in non US stock -- come -- 5% now -- -- reason that you economy that it.
Did not particularly good at what I would mention is that there are opportunities to find.
International.
All the within the small cap it just.
It -- it.
Would love or work a lot more labor intensive I'm -- as well and through that aren't.
Larry you're gonna be with me ever gonna see you back here -- -- -- and the -- great to have -- here for the -- air -- all right.
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