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We love the -- -- to me that much stocks continue traded lower despite the upbeat data out this week's sales of new and existing homes did rise in April that came out over the past couple of days and then we -- today's durable goods report.
A much better than expected month over month increase.
Still the Dow Jones industrials is on track for its first three day losing streak of the entire year.
Is this the beginning of that much discussed long awaited correction or does this rally have more room to run after what appears to be a little bit of a stumble.
Have a street fight our ball today that Riley Riley asset management founder and CEO he joins me from Naples Florida and -- -- is David Tice.
David W -- associates president joining us from Dallas.
Since I started with the -- in the last segment for Netflix let me start with the -- that is mr.
David -- good to see you tell me.
What worries you most about this market that has you saying I'm not interested in stocks mostly right now.
Well as I'm just worried just like -- whereas in 99 and 2007.
Essentially they're fed and our policy makers have kicked the can down the road they've taken short term measures.
That we'll have longer term negative results.
Greatest quantitative easy -- where.
The -- -- -- five billion dollars of securities a month.
That will not last forever -- discussion now is that they -- tapering.
Right now it's happened that's a -- is affect a positive effect on the market so if you're looking into whether stocks are going to rise or fall why wouldn't you simply say.
Let me stay and at least for the moment.
Well if money -- was accused of prosperity -- Latin America would be the world's leader and what -- this does is it artificially keeps interest rates down and it.
It's the rate by which future earnings -- discount and yes that has helped stock prices go up coverage so.
One time factor -- still have to look at economics.
Earnings are starting -- slowdown.
You still have significant effects.
Significant chance to be JGB.
Bust you still have huge problems in Europe.
And we're not in BO extractor -- -- from this money -- news QB.
The net it is -- point that worries anybody who has watched these markets and and what worries people is that there's been not at the eating of dessert every single day and at some point we've got to have the meat and potatoes punishment.
What does happen out and does did have a point -- you still gung ho bullish on stocks.
I apologize -- David I'm still gung -- bullish I'm meg abolish.
As a Japanese might say but.
No I ambush but did it does raise points about you know -- -- it is provided by the Fed.
But Dave I will point out that -- 1999.
And I know you -- right believe me I I felt lonely back in that period -- But in 1999 -- price earnings ratio of the market is twice -- was today.
You looking at.
The psychological environment than -- 1999.
Everybody and their brother -- stock everybody that brother was throwing money in the market.
That she had that liquidity was huge but inflation was also created the problem the economy was on the precipice.
You had a lot of different factors in the 1999.
Now I'm not saying that this could not develop.
But the fact is everybody today is worry about Q the kill and the fact that the Fed has been accommodative.
So the Fed is concerned about that so the market -- so -- the -- make us allies and virtually everybody else.
That's the one issue that's always raised.
And I have found in the past that went bear markets develop it isn't because of an issue you know.
It's normally the issue that you don't know and I think everybody knows 85 billion dollars and gonna get cut to fifty.
But the liquidity in the system today and that's still the apprehension of the people is out there.
But David -- what do you do because no matter what you can still get in on something you happen to -- a certain sector of the market regardless.
Yes because there is competitive currency devaluation really gone on around the world and you look at the money -- that's going on Japan and the US and China etc.
Gold has essentially been in a significant.
Double digit year bull market now it's been down since 2011.
Down point 7% off its peak back.
And that gold miners have just been -- that's -- -- writer I've.
I frankly love gold miners and I feel as if the gold bullion prices going to go up again.
Gold is one currency that is does not have a competitive.
Have a constituency.
You and you have two -- here Franco Nevada and Alamo sub both are down for the year are actually Franco Nevada looks to me about flap of the book a little bit of the dividend one point 9% for Franco and what would 5% for Alamos.
-- and and -- listen I.
You're supposed to go for the on -- things so I I would David I think that they the miners have been beaten down you love a lot out there what is your favorite area right now.
-- it's been the same for three years now I still like the lodge cap.
Technology stocks that.
The ones that -- forgiven the Microsoft said it finally status to move apple which is obviously where it is today because -- disappointed short term.
I like the big capitalization stocks I liked accused the three key is.
They have doubled in price actually -- tripled from the bottom but the fact remains.
That the index overall is still cheap these companies are selling at less in the S&P 500.
They have growth rates -- -- -- the S&P 500.
And I do believe the world growth and I do believe that the eurozone will recover and that China will stop to pick up and it Japan's economy actual -- to do better so that the multinational.
-- -- that people are gonna pursue what's been static to do about the last two months.
We want to thank both of you and we want to -- issue of good Memorial Day weekend thanks to Ned Riley Riley asset management founder and CEO and David -- David W -- -- associates president have a great weekend guys thank you so much.
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