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Charles Biderman, Trim Tabs Investment Research chairman, and Ralph Acampora, Altaira Wealth Management partner, wraps up what’s moving the market t...
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Let's bring in our market -- we got Ralph Acampora and Charles Bittermann good to see you both guys Ralph I wanna start with you you -- extremely.
Bullish we talked a lot of bulls around here but you seem to be on the high end of the bullish side you think 2013 is gonna break records why.
This is doing -- they're ready David.
You just mentioned the Dow Jones transportation average is at an all time new high.
The Russell 2000 is is at an all time new high.
I do you have leadership.
I agree with Todd maybe the market stalls here a little bit maybe even pulls back a little bit but I.
As a long term investor which is what I am.
I think any pullback or any consolidation of correction.
Is definitely a buying opportunity would go a lot -- I think we make all time new highs across the bullet.
OK all time highs across the board -- I -- I look at that -- say well you know with that's something Charles.
Where you roll your eyes or does he have up point here.
We do have a tiny bit more clarity and you know that companies are itching to spend a little more money.
Well things are good right now.
How -- I mean things are good the government hiked taxes to -- the year so what did people do.
They sold stock in December they rolled forward bonus -- about a hundred billion of income was taken in December.
And and that money is being reinvested a lot of that money has been going into the market.
We've seen a 22 billion go into US equity mutual funds NE TFs.
The most -- -- while there's even a positive inflow into US equity mutual funds if it lasts of the month that'll be the first inflow.
Since February of eleven that's like guests and there are some positive things the extra money going into the economy has helped.
People feel good about it but there's a problem lying in the way -- in the woods of weeds would -- And that is that if the money if the income was taken last year that means and come this quarter's gonna be down year over year -- before you even get to.
The higher tax rates that are kicking in now so we're gonna have a problem.
Terms and comparisons both year over year and sequentially going forward here.
And income growth take home pay for people who have -- -- something phenomenal picked up somewhere in the economy.
And it's certainly not real estate of -- mortgage rates go below 3%.
You know this no real growth.
Here all right what Ralph there's -- fly in the -- if it concerns once sector particularly -- sector this reporting this week financials we had great earnings from Goldman Sachs.
JPMorgan we -- news today at Citi yeah increasing its dividend and of course we have Bank of America goodness but let's look at Bank of America for example Ralph.
They still have a lot of those countryside those bad countryside loans in airport for their lot of other.
Companies including Citibank by the Citigroup by the way that still has some bad loans and airport for does that concern you would all.
K can I ask you questions shore if if if things so bad Bank of America -- in making new highs faults it's because.
A lot of people -- because it's fallen so tremendously.
Over the past hundred years now we've just for a little bit of the Harry but I -- -- it's -- it has it come up to not want to.
-- it's been stuck in a trading range for the last two years.
And the last couple of weeks what we're looking broadly cellular Alfredo and -- -- we're looking at a three year chart but look for your chart back up because you could say you don't get any work out of the -- throughout the past a year or so.
It's been -- not not -- zoom upwards but kind of a steady chart upwards.
That's right exactly right in what you're seeing from a technical point of view that when they broke above ten dollars I have targets of twenty and thirty if you willing to wait.
Yet -- still buy the dips buy the -- OK so so let's get back to Charles than a look would you be doing.
If somebody is -- that the proverbial cocktail party walks up and says Charles.
We've got inflows into mutual funds.
Some of that trillion plus money that's sitting on the sidelines at least at the retail investor have been close to that what more like the 2.5 trillion on company balance sheets.
Starting to slowly come off the sidelines where would you put money.
Well I've belonged as a long term investor I would by that trim tabs lonetree key to -- expect rate -- you -- -- that -- companies.
Shrinking the number of shares of by the way there was before the market close united just talking about dividends well.
-- trait is the most cost effective way for companies to return cash to shareholders -- And companies who use free cash flow to shrink the float or use the -- the flow from money for free cash flow outperform.
And that's the basis of our fund.
Ralph Acampora and Charles -- gentlemen thank you very much appreciate it.
If banks thanks Ralph thanks Charles press.
