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Argument for Small-Cap Stocks

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  • Description

    Emerald Asset Management CEO Joe Besecker on why you should put your money in small-cap stocks.

  • Duration 4:30
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I think interest today in the market stocks here are down as you've been talking about a we've talked about has been tough going in the bond market we've also talked this hour about investors concerned -- they've missed the run.

In equity -- you want to make some money we have an argument right now to be made for small.

Cap stocks -- massacre is the chairman and CEO of emerald asset management -- good to see you but small cats.

Are up more then your other market gauges they -- the Russell 2000 closed at a record.

On Friday why would you bet on all an already hot group.

A stock I guess we should quit than -- For me it's -- games over.

-- is that there's Betty options and fears that thing I don't believe.

In buying markets we don't -- -- we believe -- buying companies we think there's even when things were terrible and -- guy came on here there's just there's always opportunities we see many many opportunities.

I loved.

Banks regionals the smaller the better.

Look we saw what happens super will yesterday nobody has told me one way or the other -- was CIBER CIBER problem we're not.

It isn't surprising you look at the New York Times you look at everything were under attack both our government and darker NRA -- companies.

So I like companies that play in this basis cyber security I think there are opportunities.

Across the board and they fear in this low interest rate environment where my goodness if somebody farmer hedge from manager today and somebody's -- just plop them didn't you billion dollars.

It's very difficult what you can go anywhere you want you can go.

It's it's is difficult time.

For new money that I have seen in.

Twenty years.

And so because of that you have to drill down into the individual names you have to drill down into the individual sectors and businesses and when you do that I think -- here ended up.

SAL have an option doing that some investors get funds or one -- plan I'll have a chance I don't have that option.

Why if if it's only 41 K but then you have to find the option in there that the work -- as a bold.

And I am a bull for long term for the marketplace.

I don't think I still think in this move were in the second or third and it.

I do think however that there we're gonna have some starts than in fits and starts so I do think that it but the problem is -- The problem is is that is.

If you're not in I think you have to start stepping in now and that's one of the big pro.

Why able by the way on that second or third -- comment they're did you -- talk about some of the individual and the cyber security -- -- number stories on that.

Lately and by the -- is no reason we've -- no indication on what happened at the Super Bowl reasonably today you do with that but you're right about New York Times last week Wall Street Journal but why.

Do you think the common about the second or third it because -- -- Bob -- and earlier us testing the same thing is people see the headlines all markets near an all time highs and I missed it how do you mean.

-- I don't think so and and you also why not -- -- was on earlier talking about money flows yes mutual funds.

That's it's it's a relative basis -- one of the things is that the money is not coming out of the bond funds.

It's coming out of the cash portion -- people of stored up right then and if you take a look money's not coming those bond funds I think what's gonna happen.

Is that we continue in this type of marketplace people we're gonna take money out of box offices are not make any money and -- abide by the way I think bond funds are extremely dangerous place for that individual investor and you're talking about I think there's more risk in those individuals in those bond funds.

Then there are in any equity funds that are out there because I don't think people understand the risks they're taking.

When they have this money in the bond funds where they can lose principal we'll take his look of surprise surprise interest rates -- will go.

-- if you hold to maturity there's that Obama heard he arrived if you hold to maturity in every bond fund -- also has an average maturity.

So if you're willing to own -- that they want to find.

It doesn't matter -- unless they're forced to sell at a loss on those bonds -- you hold that bond fund.

To the average maturity you will get your principal back in theory if its management -- like -- -- -- bond.

In theory I think in theory but that new money comes -- money continues to roll and they continue to make those maturities -- I have no problem with people buying individual bonds.

Listen here's the here's the risk.

The ten year treasury for every 100 basis point move in the debt up in interest rates a hundred basis points 1%.

You can lose 8% in principle.

In that ten year treasury now you're correct you can holder for the -- the -- period of time to get your money back but that's not a great proposition and given that backdrop.

The names that we like and that things that I like.

I think are much better situations in a basket those stocks than being in a bond funds are too good to see again nice seeing you thank you -- -- -- analyst.

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