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You guys we may get some new nuggets on the future of fed policy tomorrow when chairman Ben Bernanke testifies before a house committee will be -- Following that very closely markets have been on a wild ride since his June press conference but.
An exclusive a panic about the Fed tapering it stimulus say come joining us now Troy guy escape partner and portfolio manager of sky bridge.
Capital -- -- thank you for being here.
What we have driving the market right now obviously right now the volume is way off -- in the doldrums of Osama.
But we do have mr.
Bernanke speaking again tomorrow yet.
Looking in the big picture or you're seeing is gradually strengthening private sector economy it's -- -- -- held back to some extent by the fiscal -- back from federal government -- -- sequester as well as the tax increases that went through.
-- furthermore we have driving it.
Is the fact that the US is in the best position globally by far -- it has a lot of problems emerging markets are struggling -- people are fearful of China.
And in addition we've seen bit -- -- value in a way that they're not terribly expensive compared to other asset classes Sony investors look at cash for treasuries -- extremely expensive assets yeah.
It's tough to know what to make of commodities right now.
And a squeeze at least are fairly -- that's us explains why you have this very strong equity market in a relatively soft economy.
All so with that in mind of equities a reasonably priced where you putting your money.
For so focused on equity based strategy such as a venture equity as we talked to a lot out here on the show.
You know you have a lot of corporate transactions you've seen recently like -- This transaction upbeat wireless so in certain sectors health care wireless spectrum there's beating.
Wars going on for those assets.
-- you -- team to see opportunities and an activist and -- -- -- that have you what's the best well look I -- Pitch for measures in the space is a look at that -- the current situation where how the sectors are composed and they try to anticipate where consolidation should take place -- -- -- look at companies that they anticipate could be acquired.
They're cheap if they get acquired great if they don't you still -- the upside of the stock improving.
That's one of the ways the other ways he talked the last time is a few more active and -- actually engage with management.
And lay out a plan says hey we take these five steps you could unlock shareholder value rate increase the share price.
Spoke about the -- you know you say don't fear a shift my theory is let -- the Fed has your back yet until the economy is such that they can take away the support slipping -- you win right if you're theoretically exactly that's that's the key -- it this is where we think that.
Markets actually got -- right -- equity sold off a little bit five or 6% inning quickly rallied back to his.
If the reason the Fed is taking -- the stimulus is he's because the US economy's doing better well guess what it's good for equities and guess what's good for housing.
Works problematic is for assets like bonds that hold.
Where inevitably when the Fed tightens policy you're gonna take more of a pounding so.
You had a little foreshadowing that but if you're in assets that are that are sensitive to economic strength and should do better economy expands and you wanna see the Fed gradually take with punch -- that means -- fundamentals of the economy improved.
Any other headwinds out there could be a bit of a while -- mean there's always Euro but yet the Greeks are back on the streets -- -- ranking for years the European crisis is certainly not gone away the only thing that can make it go always growth.
And the European powers that be have woefully under delivered on.
You know structural reforms help drive growth so they're somewhat prisoners their own political system -- -- I think the biggest wild -- -- China.
And if you if you have all the while cards out there that because the most pain.
-- markets have priced in some -- from China but if you really get 45% growth it's -- the seven half seven point eight.
That could cause a mild correction we think I'm not to know exactly what's going on emphasizing no one knows it's going to China it's funny to watch people talk like they're experts right because all the BS manipulate it.
So the best -- can do is try to avoid anything it's over the exposed to China right in if if it does turn out to be a problem you gonna take some mark to market pain.
As eventually markets normalize after that great stuff is always -- I think NCA -- -- -- -- thank you.
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