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Glenmede Director of Investment Strategy Jason Pride and RNC Genter Capital Management CEO Dan Genter on the market’s outlook and what stocks invest...
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We want to bring in let me director of investment strategy Jason pride and Dan get there he is the CEO of RNC.
-- capital management -- good to see -- thank you for both.
Jason first do you have don't you think that the economic backdrop in America right now is getting better -- So we we see some improvements need leading economic indicators which are primary modes of of watching economic activity but.
That improvement is is rather weak at this point in time you know.
This rally that we've seen is really on the back of hopes and aspirations currents concerning what the central banks.
Are doing.
And it is -- -- little bit premature relative to what we've done the past couple cycles.
So perhaps we'll take a little bit of a breather here and a long term -- and so will be more robust and economic cycle.
Down -- your perspective here and and I know that you have felt in the past.
It's important to buy the weakness do you still feel that way and would you consider today a moment in time that would fit into that perhaps other.
Yeah I do I think you -- still wind to the weakness your -- I think that overall I think the probably the most compelling reasons that is there's probably very limited downside.
There's a lot of support at 14100 there's also a significant additional support at at about thirteen 78.
-- about 5% downside I think that that's a good news the bad news is.
There's really a lot riding on the election and we're not gonna have any clarity on earnings for the next several weeks so we're gonna be a little bit of a state of limbo there after being up 15% for the year and almost 6% to last ninety days.
So I interrupt your analogy you had to do -- on a day like today where you out there buying.
Yeah we -- mine and I think you're gonna see more buying you gonna see more support.
Largely because a lot of professional investment advisors have missed this market that had a high cash positions.
And now they need to get back into the game frankly you're probably gonna see a little support tomorrow and the next negative coming -- -- the quarter.
And they're gonna have to get some cash to work they want in debt of one which sent -- report to clients with 1015% -- All right Jason.
I've got a lot of cash I think a lot of people out there have I know a lot of people out there aren't a lot of cash because they're supposed to be about yes they -- trillion dollars on the sideline.
What do you do do you do you hold we have had this tremendous run up over the past few months since June.
Do you hold -- cash you wait for further draw down of the market as we saw today before you use that cash.
We think you take time positioning your cash into riskier assets -- by saying that.
We think there's -- significant difference between the different type of a brisk assets that sit out there.
The full -- -- traditional equities are considerably higher risk.
And are likely going to produce only -- meager results to the longer term timeframe of slower economic growth.
Meanwhile cash in fixed income is likely gonna underperform inflation so we've been focusing investors into the middle that means.
Taking more risk and fixed income high yield sort of Barnes.
Taking less risk and equities higher quality dividend growth equity strategies have basically doing anything that you can to pull out a little bit extra return without taking.
Undue risks well then let's just expound upon that Jason their two names that you really like right now that fit in to aside from the fact that your top sectors are here you like Philip Morris.
Not a health -- stuff that I've been pat -- yeah.
Not a health -- stuck but -- okay I'll call followed definitely a consumer oriented name that is because they pay decent way to build a strong.
So -- this -- but these situations is we're trying to position conservatively in equities take less risk and equities while we're taking more risk and fixed income.
Less risk and equities means you go from able.
Earnings and dividend growth companies ones that had an underlying ability did it to generate internal returns on capital and both of those names exemplified that.
They are global growth stories and they have fantastic margins on the business.
-- well -- you've got a variety -- including some real health care stocks like met life for example also ResMed which is a Biotech stock tell us about the eggs.
Well I think for resident what you're looking at a time -- or certainly in a position to where health -- is gonna expand whether we want it or not we're gonna have some form of obamacare.
It's gonna continue to -- span.
You've got a company now is selling at a very attractive CEO about thirteen what about probably 12% of ongoing growth.
And I think the real key -- you're seeing all of their unit basis whether B respirators or generators are -- Are growing quite well in its gonna be something that's going to continue to be on the leading edge of that cycle.
If you look at the financials out clearly the banks have done very well getting a little war in about a few of the banks just to they're getting a little top B.
In contrast to that if you look at met life they've been somewhat held back -- -- mailing insurance company obviously.
But they're also tied up with the banks and what part because they have a small banking operation are now about to sell that ought to GE.
And that's going to be a metamorphosis warm it's gonna get -- that umbrella they're gonna going to stock buyback program probably increased their dividend by 50% from two to three.
And trading at a five point six PE we think there's a tremendous amount -- upside and it's gonna ride you know some of that way forward.
Okay folks that's an important tip that he just gave you that possibly once they sell off their banking part they made then up their dividends thank you for that both of you good stuff -- -- and Jason pride.
Thanks gentlemen appreciate it that when.
