You're watching...
Gunderson Capital Management founder Bill Gunderson on whether investors should sell gun stocks in the wake of the Connecticut school shooting.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Of the tragedy at the elementary school in Newtown Connecticut shares of gun makers are talks completely major selling pressure right now nobody wants to touch these names.
Until the mass murders of twenty children on Friday in six adults Smith & Wesson was up more than 170%.
Right now -- you see it.
It's falling by a full -- percentage points heaviest day of trading ever for Smith & Wesson.
And then you see shares of Sturm Ruger down about seven and a half percent that's off the lows of the session so.
We decided to puts and calls out to some of the top funds who have.
The two major gun companies in their holdings.
But they're not talking however -- short time ago vanguard who has Smith & Wesson is one of its holdings put out a statement saying quote.
Social concerns will not affect -- gunmaker holdings.
That's from vanguard.
So should you have -- stops in your portfolio bill Gunderson Gunderson capital management founder and president was here with us back.
In January almost a year ago -- and and -- -- really liking these names where -- now on that.
You know I had entire theme of investing in hard times us stocks.
And I did real well I'm not actually in those hard time stocks anymore.
I sold -- and October for -- 41%.
Gain I sold dollar tree in August for a 138%.
Gain.
I sold Ross Stores in September for a 149%.
Gain.
And I've moved on into other sectors.
I think knowing when to sell a stock is about as important as what to buy -- when to buy it.
When the sentiment turns on a sector like it has on these gun stocks are reminds me of the tobacco industry about ten or fifteen years ago I remember when Philip Morris went down to 910 dollars per share.
Sentiment as a big part of investing in the market you don't wanna be on the wrong end of that sentiment.
Rule will absolutely would you say right now how it's very much the wrong Hamdan and do.
Names ever recover from something as horrific as this.
You know I think it will be a long time.
Nobody knows where this will lead.
I think a lot of the sporting -- stores will step away from the gun stocks.
Who knows maybe they go after the gun makers for liability.
Maybe the restrictions get a lot tighter on buying guns.
I don't think you can stop the kind of violence that we saw.
By limiting guns I mean what's to prophetic guidance strap a bomb onto himself -- walk into that something very similar.
But in the meantime you know investing in an area of like this makes absolutely no sense whatsoever.
-- we should also mentioned that the gun he used was a semiautomatic bushmaster not a part of Smith & Wesson are Sturm Ruger but -- but looking at your newest trade so you say you're out of those names.
Good for you but what are you live now what do you like at this moment.
You know the markets are cyclical and I watch the markets very closely the cycles.
I have my own ranking system that I rank sectors and stocks work.
And the leading sectors right now we're seeing a healing right now in the building industry.
There's a clamor for raw lots across America to I don't -- -- our problem -- you're talking in Britain.
Actual materials themselves and what names you well actually.
Yet like that -- lot that's ready to build on them I'm heavily weighted in companies like Louisiana-Pacific.
Howard Hughes communities.
The home builders.
Costar Group -- -- may.
Pier one don't forget it's not just the new homes but it's also everything that needs to go into the home whether it's a roof.
Whether it's flooring whether it's sprinklers whether it's paint.
These are -- grade areas -- Pittsburgh glass and paid as breaking loose right.
Now Pittsburgh glass and paint now US Home Depot on your list -- wealth concentrating very close at a around 52 we -- consistently smacking up against that -- looking -- a very strong name.
I guess my question is.
You know some people are concerned about valuations we've had frank Blake on here he tunes about perhaps rightly so he's got a great strategy this is a gorgeous chart.
But have we pretty much.
Hit saturation point heard the next couple months.
Well there's three parts to investing I require performance out of the industries and stocks I'm investing in.
I require -- strong stock chart but they also require valuation.
And actually these stocks are just starting to grow into their valuations and if you think about it.
Were in the early innings of a rebound in the housing market and maybe the second or third -- we have a long ways to go yet.
Bill can understand not one year ago he was right here on the show saying he let that the gun names and he's out of that -- now will put all of your picks.
Including Pittsburgh tighten back.
But now I'm not heard about what up our FaceBook dot com slash cap of -- claimant FaceBook thank you so much we appreciate it.
Thanks for having me you know we.
