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Relative Value Partners CIO Maury Fertig and DLS Capital’s David Steinberg on the outlook for the markets and how investors should adjust their port...
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-- -- -- Investment officer of relative value partners and David Steinberg managing partner.
Of DL as capital management but these gentlemen a lot of experience in the markets and a lot of money that they work with and David you're bit more optimistic right now and as we look at the S&P 500 which is is certainly up over the past year.
Pretty strongly I was looking at the number sorry excuse my turn there S&P up 28%.
-- -- year I you know our our investors are wondering do we.
Do we do with the journal have the article about in the money and investing section today which in essence said.
Take the rest of the year off from -- people have done very very well for the year so would you just keep your powder dry at this point or do you dive continuously in to stop.
Well I was here last time in December when had a discussion I was bullish has to look the -- -- lining -- for great capital markets everybody's got a position most investors do fear.
Anxiety Wall Street's recommendations and so forth.
Ignored them -- mathematics and valuation not necessarily what's going on.
On the ground at the moment -- -- basic valuation businesses piled into bonds over the last year.
And end and very simply got all the central banks in the world.
The Federal Reserve the Bank of Japan the Europeans.
As well as the Chinese stimulating.
They want -- asset prices higher than -- home prices higher.
And when you print money assets go higher and currency the -- value of currency.
-- that's why gold is an example is one of the most highly inverse correlated assets to the pretty of money it always has been.
Through the millennium no matter who's run the country.
What king what queen went.
That is like why David -- largest exposure Marty we're gonna get more we're gonna get tutors is -- -- which is why David your largest exposure is in gold mining stocks but does today's -- concern you would all of the pricing goal.
F -- let things aren't -- an ongoing mystery direction and as long as you see these major government entities continue print money.
They're gonna go higher gold gonna go Clarence cannon you know bring gold miners higher gold miners you -- to look at you can look at them as the printing presses for gold.
Maureen you're Arab bit more cautious what can you need to see before you'd be ready to at least dip -- -- back and stocks.
What we are I'd Wear long stocks have a 55% winner balanced accounts I'm longer term short bullish -- -- -- -- -- near term.
Concerns.
Primarily they revolve around the rebalancing potentially -- that's a 4% this month 7%.
For the quarter she could see some rebalancing selling stocks buying of bonds to.
Put -- -- is in line in addition earning season starts in two weeks.
And I'm not so concerned about the third quarter results as I am about the fourth quarter guidance.
There could be some caution expressed some lack of clarity -- uncertain -- tax policy in the election and then finally.
I I think the most important thing that I look at is sentiment sentiment has gotten quite bullish the -- around thirteen fourteen historically is not a good short term entry point.
There's been more inflows in new equity mutual funds the last two weeks and have been in a year.
So those are things just making a little cautious on putting new catch in the market today but -- would be a -- I don't think we're gonna have a I think we're talking more of a tactical move.
And something less than -- 5% correction.
David we whetted the appetite of the folks out there in terms of what gold stocks you're richer stated -- particularly you brought a couple witnessed.
Bardot called and EU is that your -- gold American in my heart couple large why us why those in particular well.
They're they're they're big -- a household name at least gold Centrino -- to gold universe.
-- trade at discounts to what they've gotten a ground.
There really well -- in my -- that I I think -- hit a new high the other day Barrick frankly is just come off of of its back.
After a change management and do you know some short term performance issues.
And these companies -- New York Stock Exchange that are -- -- on the ETFs.
There's probably a -- about 68 you know major players -- New York Stock Exchange listed.
That have ample model he got a -- -- oil stocks to marathon and -- again betting against everybody's concerned about.
Economic growth.
I'm not looking -- to on -- -- short term T -- from variables I am not that's a lot of noise and and it's it's always all around us.
But I think you need to look out beyond the noise and say what's gonna happen over the next three to five years what's gonna happen with the per capita.
Demand from emerging markets allies around the world what's gonna happen to money printing.
And these things are going to affect the price of oil as well as the the price of gold and if you got good reserves -- -- itself a big discount to market prices you're gonna get your money out.
And -- you know you're not entirely opposed to getting into gold and a certain way tell investors how you're doing.
We're doing it through the ETF by GD axes one and all right -- -- ring is another.
IShares -- ETF that basically owns a lot of the companies that David just talked about.
But -- a basket of these stocks and we think that up if you look at the miners vs the underlying metal it is underperformed.
Gold by 30% this year did GTX is flat on the year vs a 16% rise yes -- And I think these companies have -- of underperformed and -- potentially.
The able to raise dividends you may see some mergers in the space that would basically.
-- help the overall profitability so I think that's another.
A good way to play to play the sector.
Our thanks to -- verdict and David Steinberg -- sharing their thoughts thanks guys think.
