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Street Talk Advisors CEO Lance Roberts on how energy prices impact Houston's economy and gives investment tips.
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Clinton but now we've got all country resale all where I'm from but all down and -- -- and a booming energy sector is what you.
Hi I'm.
Indeed very fun city of Houston is where you should be investing here Monday.
And we go to Melissa Francis she is on the ground there was a whole lot more hi Melissa.
That's right yet no matter how you say it -- knows what's making this city bailing do you decide there.
Mean it is another gorgeous day in Houston we -- downtown right now we are here yesterday and -- seeing what makes this city tick.
Employment is through the roof here it's a tremendous business climate -- what do you think makes -- in tech.
Well you just on the senate energy and do you know -- -- -- energy capitals of the world Quantum course you know that has its downside when you have a a bus and oil prices like we did back in the eighties.
It really drags on the city is a whole it just.
For the -- learned his lesson I mean I've seen -- -- of diversification easier over time and and we didn't see we saw oil drop a hundred bucks -- act in 2008 and it did not have the same devastating effect on the city.
-- well that's correct and we we have done a good job diversifying out of technology engineering and other areas.
But also to we didn't have the housing bust here we never had the ramp up in housing like other cities did.
And so when that bus came in housing -- didn't affect us nearly as badly.
Lance Roberts I'm not -- -- issued beginning there I was so interested in talking about the city -- the city CEO of street talk live right you have a radio show you due autonomy investing in investment advice would you like right now what are you telling me -- to -- Well when we talk about investing right now obviously we have kind of the -- there are back at the moment because of the latest round of QE3 so this is gonna push all asset prices higher.
So you know I still like the areas that benefit most from these type of program such as energy technology finance those will all -- well.
But the problem now is is that were much further into the cycle -- we were the first two times around.
So it's actually now more of an issue being careful of where you invest because people been chasing yields have been chasing junk bonds what -- term high yield.
Those are risky areas that if this ends badly in and there will be a recession at some point in the future.
Is those there is -- hurt so being Caucasian jumped ahead and ask you you what you want to avoid -- -- -- you don't -- junk -- -- don't -- but I don't like -- I think there's some great double B -- companies that have -- rated balance -- And of those are bonds that she can buy for your portfolio but chasing high yield bonds and of course -- seeing people buy triple C bonds double C rated bonds.
A lot of European credit.
Those are issues that is -- if we have an end result there's I think we will be unwinding of this of this leverage boom that we've had.
Those are the leaders he hit the most and they get hit the hardest so what do you like.
Well right now I'd still like companies that have good revenue growth over time such as your big blue chip dividend yielding companies should Johnson johnsons are Procter & Gamble -- Kellogg's.
Those -- the companies that regardless of what happens with the economy people are still gonna buy deodorant they're gonna brush their teeth and they're they're you know they're gonna eat food.
So those -- the areas that will be more stable.
In any type of economics from -- that you might have in the future.
Riskier I mean is there anything you would say about that -- I -- I mean if you look at that of fortune 500 list of the Forbes 400 as we were yesterday -- a lot of folks here with a lot of money.
Well exactly and so if you wanna see with the investing differently yes they invest differently because they -- energy centric.
Because these are the companies they know in most cases there's companies they work for a lot of people here have a -- -- preponderance of stock in their portfolios of the company they work for.
Particularly in energy sector so what you'll -- and he -- more than overweight in energy (%expletive) lesson of.
Areas they keep for that -- coming up at 1 PM on markets now what Lori -- we're gonna be targeted Jeff reader he's the managing partner -- -- what northwestern.
Mutual of Houston.
And we're -- to be talking about how much the economy here has been diversified -- -- about how they've gotten a week from oil and gas but what else they're doing that's a tremendous support here look at that beautiful city.
-- to see what other riches Houston -- -- back to you guys.
