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Mainstay Capital Management CEO David Kudla and Advisors Asset Management Senior V.P. Gene Peroni on where to invest in this market.
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All right let's bring it all -- -- panel David -- -- gene peroni gentlemen thanks for being here Jeanne you've been very positive thought from what I can tell.
View of the markets in 2013 why the optimism we've -- other analysts.
In the last week -- -- been predicting a recession at the back end of 2013.
Well it's not evident and stocks at this point and I would say that this is a market of stocks held.
And it's much as we want to look at the Dow Jones in the S&P and so on.
Really what's going on what's really relevant as how individual stocks are behaving.
And equally if not more importantly how their respective sectors are behaving and very have a pretty bullish tone.
That is the price architecture is very bullish it's a kind of -- so we've seen historically there are present sustainable.
Upside.
The accumulation trends especially on a non institutional basis are attractive.
-- -- seeing very good depth of leadership in such key areas as manufacturing.
Health care technology.
Consumer Staples and so on so there's a very broad based -- very well balanced leadership.
It is not a micro thematic markets it's not vulnerable to these micro events.
-- any much as we're concerned about the fiscal -- that certainly is a real worry.
I think the real important factor here is that the Fed remains very transparent.
They remain committed to a transparent monetary policy and that it's very bullish alone for the market level on the fact we have historically low interest rates.
All sounds good -- -- glass half full outlook -- -- but to generic point.
Earnings growth is expected to decline significantly this quarter from the same quarter last year that's got to be a -- in your view.
I don't think it's gonna happen I think it's going to be they're going to be surprises to the upside.
But the surprises will be that great in other words if you look at where the great step performances -- in stocks in sectors.
In the fourth quarter the -- going to be the stocks and sectors to report the best -- earnings Villa to street expectations.
I still think that we're gonna see a majority of S&P 500 companies.
Beating street expectations so I don't think I wouldn't be as pessimistic and I think as that occurs are probably gonna see more movement of cash from the sidelines into the market.
Bring in David now David debt to that point you're actually pretty positive for.
The outlook on the market this year but you say investors should be focused on high growth high yielding investments -- that particular area.
Well with this wall -- worry that the market has been climbing and there's -- there's lot of pessimism out there is concern about Europe concern about the fiscal cliff concern about China.
The economy now earnings.
But that that stock market has to climb a wall of worry.
With.
The approach of looking at both high growth.
For really the good market that we've had over the past several months.
And high yield for defense and diversification.
High yield through reits mortgage backed securities.
Emerging market bonds high yield bonds.
Preferred is those areas helped steady the portfolio and that balances worked very well this environment continues to.
Just to follow up very quickly David DA UIC on that -- that we put up you like housing any particular area of housing.
Well we like how housing broadly.
One of our recommendations ITV.
New 52 week high today that's -- that broadly.
Probably diversified across the housing sector and now the supply chain a bit as well.
But anything -- it it with housing we see no homebuilders have com.
Incredibly far off their lows but we think we're in the early -- housing making -- meaningful term last year.
And we think further gains ahead in 2013.
Yet homebuilders saw had market day today that's for sure how the auto industry David because I know about a year ago you recommended.
GM and Ford to our viewers now up 42 in 22 percents respectively.
Yeah out just about a year ago on your show.
I had recommended human for coming -- -- port 2011 for stock performance.
And had a had great year.
But we see that with the continued strength in sales in North America growth in emerging markets specifically -- -- and controlling.
A mitigating those losses in Europe that we've got another fifteen to 20% upside in both of those stocks this year.
Is that right.
Well we are -- an equity managers so we either go between that cash wore equities are right now we have a relatively low cash position and pretty significant debt equity.
Position.
-- right now probably our favorite sector.
Is manufacturing.
And I think that really post possibly for the market going forward.
No one of the things I think it's also compelling here for the bullish case is that since -- late September of last year you seeing gold in a pretty steady downtrend.
At the same time oil is actually been moving up so -- of about 1%.
In that timeframe gold is down more than 6% -- -- the fall even further.
So it seems like investors are releasing a little bit that -- movement to safety -- the hedge toward gold.
And are looking more towards oil as an indication or perhaps.
Perceiving that global economic expansion is going to develop.
And it will be more demand for oil so I like the materials like the manufacturers here very much.
And -- close things out here already see the Dow closing out the year won't be the primary driver to bring it up or down to that level.
Well we see a range in the Dow on the upside.
During the course of the year between 14100750.
To 151001 -- so.
We do look for the doubt to make new highs and again driven mainly by the manufacturers.
Driven also by the media companies and by -- health care components.
Gentlemen thank you so much David Cook and gene -- appreciate your.
Market -- -- for us this afternoon --
