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Milton Ezrati, Lord Abbett & Co. senior economist, market strategist and partner, on why he is still encouraging investors to get in on the market...
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Coming out of Washington we've seen it -- -- not by the minute but even with the wild moves -- next guest says.
Now is a good time to get into the market because going over the cliff.
-- -- price did joining us now is Milton has robbing people haven't senior economist and market strategists -- -- thank you for joining us look if it's already priced in why we seeing these gyrations with every different statement -- comes -- -- Washington.
Well I I.
It's not entirely priced into the market I mean they've built the market obviously would like -- -- good news it would like to see.
Some kind of compromise him when he gets that it moves up and -- it's disappointed it moves down.
I think from a fundamental point of view is post to a trading strategy the market looks very cheap it is effectively discounting some pretty ugly news.
And that puts it in position to be pleasantly surprised even with mediocrity.
-- Talk about where you think we should be buying but.
You agree will go into recession if we go over the cliff wolf what we get a deal that's just didn't really crappy deal -- we still going to recession.
Well if we get a crappy deal that that.
-- what we where we are is back to where we war.
B avoid the spending cuts we avoid the bulk of the tax increases.
And the economy creeps along.
That's hardly good and crappy is a good is a good way to describe it -- it doesn't mean that we get the worst.
Well putting that technical term aside until -- summed -- If there's opportunity where is the best opportunity right now in this market.
Well we actually think that the areas where that show the best value would be financials and cyclical stocks that is where they have taken the biggest hit.
As people shown their fear and that's where the greatest opportunity is should we not even get good news just relieves some of these worst fears.
It's all about timing -- right.
At the end of the day we are gonna get through this we're gonna get added -- the market will eventually turn itself around but I think.
You have somewhat of a long term horizon -- Are you do I mean between now and the ended the year maybe even early January.
We're gonna have a lot of volatility here because we're gonna get good news bad news good news bad news on this debate.
And no one's gonna know how it's gonna come out until the last minute.
Well listen if it doesn't get done.
Milton -- you could argue that it it's just a matter of days -- weeks of the damage will not be irreparable but once we get into a month and beyond is that when the real damage could be done.
Well the damage is cumulative in a month we could probably rectify.
Situation and avoid a recession continue with this very slow disappointing recovery.
But if it drags on into the spring and then that damaged as a say it's cumulative and it could get worse and the odds of recession grow with each passing day week.
That we will we up failed to make some kind of a compromise.
It's an insult to injury we have Obama -- coming into play 2013 and year I love your notes I'm confident it's going to be a shambles.
What happens then.
With that coupled with everything else going on in the market we're talking about a whole year of basically stagnation army.
Washington is going to be in our face all year they the implementation of Obama -- was clearly not very well for about the legislation.
At least half the states who said they're not building their exchanges that falls on health and human services to build it.
They have only a billion dollars allocated -- the implementation they doing for 25 states they'd burn through that in a month maybe six weeks at the most.
So they're gonna have to go back to congress and asked for money.
And non house speaker Boehner has already said that albeit debating point in the debt ceiling and in the fiscal -- it comes to that -- -- -- Certainly will.
Well all right Milton as -- thank you so much -- for being with us feel perspective on this market as we wait to see what happens in Washington thanks so much.
