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Again as -- question keeps coming up where are we we are we going.
How are we setting ourselves up during this quote unquote recovery still let's apply assembled what we've seen over the last week -- -- today in the G-20 and talk -- you.
Carlo parent to parents you -- and if I had that right Carlo I hope by tire out your last name cracked he's the founder and president.
And the navigation group but Carlos great to see him.
Good morning Howard great to talk a little bit about how you and -- taking a step a way -- really looking at this week on Wall Street.
You know the market is is obviously had a a great run since the bottom.
We have to take a look at the fact we've only had a minor correction since we've been on this run.
We've had obviously every -- I have -- 2% correction people start screaming we're gonna have another major meltdown.
In June and we expected -- everybody pretty much almost want it to happen and we got a 9% pullback.
So right now you know we're driving one foot on the gas from one foot on the -- If we can if we can maintain.
You know above a thousand I think you know we get a little pullback and then they believe we finish up.
We are strong.
Well it's interesting you mention it that way the one foot on the gas and one of the -- -- You know the this -- right now is that 11045.
Or thereabouts it's it it is it's this issue where.
If there was an excuse to really sell off and pull back it would be easier right at the economic data started come into the negative side but it's really mixed -- -- yesterday we had.
Disappointing housing report this morning durable goods you could argue was but that's mother -- like the consumer number today is not bad and and the jobs numbers -- be getting better if it's not great so how do you judge all of that and and carry trade offer to say.
-- the economy's turning or you're worried about what a lot -- -- -- -- -- double -- possibility.
I think there is a possibility of a double dip but for right now.
You have to look at the fact that it's whenever I get a full green light -- -- everybody says the markets perfect you should be running for the hills.
You know when everybody says the end of the world is coming bet against -- what do you have to lose.
Not -- have a -- -- you have your area or lose I mean that's.
And the question is how much -- risk is really out there how much she really risking little jumping into the market so what do you think.
Right well I think that as far as it -- far well I think I would have to lose the bottom.
-- frankly you know if you're putting all your money into the most conservative investments but the entire economy disappears I think that's about how everybody felt on March ninth of this year meant was people -- as you know invest.
Investors who want to sleep just praying that the next day there's still it would be capitalism but -- I think at this point.
Philippine big prayers ransom but go ahead what is that way at this point apparently.
I think this point this -- we have to be a little more tactical we have to look at you know what categories have gotten you know a little too far ahead of themselves.
What areas and there are still offering some opportunities.
And we see these pullbacks for right now until we really see confirm correction I think that you know you still can -- -- by the pullbacks.
OKC get elevated debt in the market that today is -- -- -- thirty points on the Dow right now but if you get a little bit of -- you know a pullback as you say 456%.
Notes what do you buy what do you -- -- and there.
But with the dollar strengthen right now we've been adding to.
Emerging markets debt sovereign debt.
Looking at the fact is that there it's underpriced and the dollar being strong -- -- -- option to buy a little bit more right now they'll probably get weaker again over the long term.
You know a lot of people are still pretty happy with technology you know technology out in Silicon Valley.
When the when the recession even start and I -- the recession.
Company start cutting back very quickly very deeply.
They were concerned that they would have this you know get -- -- -- -- -- as we didn't 2000.
So I think -- that they -- they definitely.
Adjusted more quickly.
And I think they're running meaning you know very lean and mean and even looking at what consumers are buying you're still buying electronics and are still -- those tech -- -- -- question that nagging feeling of whether or not the recovery that we're seeing quote unquote.
Is actually a -- all.
Recovery or this is just suckers rally say you ECB and say you don't think this is suckers rally or or what are your thoughts on that.
Well it you know 60% -- know how much of a suckers rally could be I do think that we.
We are going to be a more.
Volatile market you know over the longer term maybe something more some more to we -- in the late seventies early eighties.
Right now I think that you've got you make money where you can and when you can.
There maybe -- time you know I think for the next probably six to twelve months it's probably still looking quite good that doesn't mean we'll have some pullbacks so some profit taking one of our.
It's hard era an -- but I was gonna say just as it's related to what you're talking about one of our viewers once knows they're riding in on our comment board right now how the value of the dollar which -- just talked about.
His or her 41 K plan and other investments -- -- when they're investing in other words when they're investing in equities and the dollars fluctuating how much should they be thinking about that.
Well typically must go through it and -- -- buying into mutual funds and those mutual funds are doing international investing -- hedging the dollar and playing different.
Strategies to protect from from getting hurt by -- or taking advantage of it.
So I think it's more when you look at a 401K right now.
You're looking -- you know most people are are ten to fifteen years out before they're gonna spend that money and they've got up to average into the market.
So what about the other top -- -- was saying it is this sector's rally say 60% movie tonight and dipping into a little bit of a later conversation but some say listen this is exactly what -- shot 19291930s.
Can be sectors rally we go is that 60% -- whatever it is.
And and fall back down another 80%.
Away what do you think is gonna keep it going he would even if reducing the volatility like you mentioned that he could see kind of Iraqi marketing for a couple years.
What do you think is gonna keep it going so that the bottom is -- -- again.
Well I hit that we -- that we may get another you know fallout I don't know.
You know hopefully we'll have much lying and cheating as we have I think that's what really made it hard was there was no way to analyze what was happening.
It's it's it -- like -- and you know -- a football they've got to two extra players in the team you can't win against key against cheating that was going on Wall Street.
Hopefully between the government but even just as important as the actual investors out there and investment firms.
They're going to keep it -- on on what's going on Wall Street.
Going -- long term I think that.
You've got to be prepared to be willing to take your profits often go more conservative especially with the boys sleep at night at the same time.
Over the launcher if you want to make money you're -- you're gonna need to be involved in things -- have a little bit arrest.
With the consumer the investor definitely went back to bonds' first because I show the least amount of risk and -- got brutally killed last year.
And that began you know.
That that began kind of the healing process.
It did no one of the biggest things out there is and and you started to -- to this is how that policy makers.
-- -- particulars gonna handle things on the other side Kevin warship fed governor has an op Ed in the Wall Street Journal today talking about.
How the Fed essentially has to be as aggressive on the other side of the equation as they were.
You -- on this side and vigilant against inflation and what have you when it went again are they going to be able to do that.
You know it's one thing for Bernanke tells he has the tools -- they implement and and put those tools to work at the right time -- confidence.
I'm I think they're probably gonna play you know they're they're probably -- use every tool including the media took it to get their message out there.
You know do like they did today -- they hadn't.
New York fed cannot kind of make -- comments.
A little bit that they might be little more aggressive and we'll probably do a lot of testing the waters I think as far as.
-- until we start seeing actual job recovery and it's until we start seeing you know major.
Consumer expenses going up I think it's it's hard to think -- -- a lot of inflation in the short term and right now what we've seen is.
Homeowners have got the lowest rate mortgages they're probably ever gonna see in -- lifetime so we have just help the consumer long term the person just refinance their house of -- -- 5%.
Now as discretionary money and right now they're putting on the savings.
-- average a lot of Americans will will will start to say put that also could be some deferred -- as well.
And I think the very.
I great to talk to again Carlo and a tee donations snatched from cal very good at -- application thanks -- hundred I think Italian and you can very well done at.
Special coverage over the next the -- for the next hour on investing we have mark -- coming up next the start -- -- Bob doll.
Deflected Stein play more still to come foxbusiness.com line -- not going.
Hi everybody welcome to fox -- dot com live I'm generally along with -- changed.
And over the next hour we have a big hour ahead we're gonna look -- where to put your money right now what to do with it hopefully will have a few answers for you.
We have great gesture really do we -- investing with among others Bob doll black rock bill fleck and stunts like inside capital we started off.
From Hong Kong today mark -- -- joins is the editor.
Of the gloom gloom and doom report market is terrific honor to have you on the program thanks for joining us -- -- get.
It is so they think he could talk about that.
It's accurate this simplest way I guess -- started to say you know where are we now movements -- -- go over development.
Well here it's midnight so that's one thing that -- -- And that basically what has happened the global economy -- off quickly between -- September.
And the march of this year and then fiscal stimulus package he's everywhere.
And the money printing or -- called on that that the easy kick in and stop the -- the global economy.
But I mean there hasn't been really our recovery yet which has -- -- anymore.
And I think the big problem going forward will be how to -- used -- fiscal deficits.
And how what they're fed and other central banks.
Will essentially reversed their policies that as a -- got the last ten years.
Off the 2001.
The Fed slashed interest rates.
And then they'd never increase interest rates sufficiently.
-- slow down credit growth.
So my interviewees about the Fed will continue to monetize.
Still -- asking a question and -- be having your assessment there you know where to put our money now.
We really thought I ask yourself this president Fox Business hi I find the -- the fair price of something in the marketplace so how the value of anything given year it kind of diagnosis -- -- tell -- the value of assets in this market.
-- that's a very good question because -- interest rates that's.
Our -- year old it's very difficult to value -- states.
Now I believe that.
They will continue to print money around the world not just -- do you race and that the fiscal deficits especially the -- Will not be crying but actually more likely increase burger.
-- based goal and monetary policies being very expansionary.
I think it will come out the cost of a lower US dollar.
Now pending US dollar rallied for three months yes and but in the -- on it will go down.
And then the question arises go down -- -- walked.
-- probably will not fumble against the Euro because the Europeans all of a very good -- -- the money men that have their own sexual problems.
But I think -- -- fumble against precious metals.
-- -- like money but.
Where Dequan that the penalties being increased at that -- moreover.
I believe -- -- -- -- compared to.
Cash that it -- you know worried parent are relatively attractive especially to Asia.
OK so it wouldn't -- wasn't gonna erupt there when I was gonna say is that you're saying this you're describing this environment -- the dollar is.
Is it weakening significantly right and some of our viewers have written in either by email on our comment board and they say -- -- I'm just as worried as mark is about things.
I better keep some money cash and I've seen you comment recently boy that's the worst place she should keep your money is cash but tell people why.
Well I think about the policy off the UA it's.
Off to -- error by keeping interest rates that bureau and off the 2001.
That's actually down 21%.
And they can't be that 1% until 2004.
That's basically he read Ulysses the purchasing power all money.
And walk off the functions of monies to be a store of value but the Federer -- that are totally ignores not I -- the batteries -- Ignores a lot of things that are very important like Freddie grows they totally -- -- -- How can you have a country where credit growth like the US was running at 18% for -- and the fact that sleeps over -- Now I believe that actually not that -- Arab League basement because the policy is to make cash -- If you're worried that statements by the -- and also leading economies in the US -- will happen.
But they -- may be -- that -- like gold suit or platinum palladium that are more desirable.
Then sit you know you -- the point that central banks around the world is not just the -- -- mean there's a lot of folks pretty money all over the place and -- you've talked about -- the opportunities in Asia.
Well we talk about the break.
The country's only talk about Brazil Russia India and China do we need to add some acronyms -- -- where it is -- specifically do investors need to look at that that's where they should be right now.
Well a lot of markets have doubled actually from them though it's written -- -- In Singapore Malaysia Thailand Indonesia.
-- through carting companies that are good value.
And in particular.
I find companies that have -- David and view.
That is twice the bond yields and local -- view so at least you hate to wait.
I'm not saying that all the markets will go straight out wouldn't but I think -- their race over the next ten years to hold acts that actual -- And on these Arab League basement as well as the US government bonds I -- that face because if you -- -- batteries that are.
Run by you have money for and they're like -- the Bernanke.
Then obviously bonds and cash are undesirable.
Acts that costs -- -- You talk about the Fed Chairman being a money printer nobody -- -- doubt you there because the facts are what they are.
What about what's next however because that the chairman I'm sure would say well I listen I have the tools to fight this on the other side.
This is that I have on the way down and I'm gonna start to unwind these policies at some point.
And begin for example raising interest rates and you know taking away some of these come accommodative policies you're chuckling because you don't think he can do it do you.
Yet I think you are a great up -- Because I really don't have got the platform all the right over the last played the earth underneath the Greenspan and -- the Bernanke.
They never talk to punch -- away right in the country they fueled one outfit -- opera another.
And we now know what the result is that both of these golfers at least a Bernanke with -- ill conceived.
He'll be on the series you will that brings a whole world down eventually oh my goodness that's the worst thing for what -- -- -- -- -- the right well let's get the OK again America.
We have already a big bubble and that's in government that absolutely increased dramatically over the next five years.
And that's far as the eye can see.
I cannot see how the US will ever balancing sponsored.
And how they will retreat from a two trillion dollar deficit.
Okay what they had before -- stood outside pressure on that point is real quick kid that so that's the got the next bubble is government debt.
And it's blowing up now what happens when it first what's -- got to look like lower living -- to -- what it how does that actually -- and play itself out once that bubble -- compared to the other ones.
Yes you're talking on a very important void the standards of living.
If you don't got that off ten years we have an economic expansion in November 2001.
Due November 2007.
But for the average family in America for -- it'll cost -- stand of -- -- didn't go up.
And today we have relates.
And -- deepening the US.
Been ten years ago when the population increase in the meantime by thirteen million.
So there hasn't been anywhere else creation at all -- -- -- it paid.
And it's -- engineer our batteries arm and they are responsible for -- But they don't want to acknowledge their mistake because -- -- read all the statements by the -- he never comes out.
I think it was excessive leverage and that's I think that growth that caused the crisis.
Live -- -- -- relatively little curious that they know a lot of shots.
I know a lot of people who don't admit there mistakes is about the size of Federal Reserve -- -- -- the economy will only have about -- about thirty seconds here before we're gonna.
Just go for a quick break that -- some people that say.
Not just -- that not to -- if they -- actually I'm a little hard yet.
And Bob not gonna join us in just a moment he says were in the -- market cyclical bull market right now than thirty seconds or so -- mr.
-- what would you say that.
-- -- -- -- I agree that.
Stocks can go up in fact in my viewing is the -- the global economy the worse the US economy the more stocks will go up.
Because -- more.
Money they will -- that is my view.
-- 8000 go up necessarily because of healthy economic fundamentals.
In hyper inflation signs stocks go up and the economy worsens.
-- marquis can I hang with us for just one minute Rick fitted a quick break is Jemison Bob -- coming up and still bill -- and sign a lot -- a great conversation about the idea.
About the world in the investing world and we'll continue it Bob -- Black rock coming up -- -- -- -- still ahead.
Stay with us as our special on investing in where to put your money right now contends.
This has been great so far Bob -- joins the conversation vice chairman global chief investment officer of equities at black rock and mark -- -- still with us.
From Hong Kong let -- -- -- a moment but on the -- Bob if you had a chance to hear.
What -- is talking about there's market that the end.
You know about how minute that the next bubble this this being blown up and all this type of stuff government debt.
Let me get a quick thought on how you view the world we'll get mark to respond and let him go and get your thoughts on investing but -- again thanks for joining us Bob and give -- seven your thoughts -- where we are right now.
Perfect I would I would agree that we do have problems with government borrowing and government -- there is no question about that.
How to deal with that I think he is it really difficult question over there in -- media a longer term.
I would focus for now on the shorter term.
That says that stimulus.
Movement away from the big black hole in the depression to ward economic recovery -- of recession.
Modest growth improvement in earnings that's what's making equity market go higher and that's likely to continue.
Mark your response.
What about that I think if you print money you can make everything go up.
But the fact they say see this Christmas.
All from off year Christmas 20081.
Number -- commodities have gone up more than equities.
And if -- broke -- the performance between march.
-- shouldn't be -- -- doubt remarks except 666.
And it's now over a thousand.
-- got -- at a time the US dollar was sold the week.
Right -- you can make US stocks go up by printing money -- -- will come at the expense of a weaker dollar.
And -- -- straight days you still very clearly the market.
Came off a little bit not much but he needed eight dollars appetite militaries -- equation.
Weak US dollar strong stocks and strong the US.
-- -- -- -- That's what we've seen a correlation or -- one between the two.
Mark Robert thank you so much for your time aren't gonna talk to Bob -- now about his investment strategy but it was great of you -- especially.
In the middle of the night over there in Asia right.
Thank you very much for having me.
Hopefully -- the punch -- out there.
I have had a Ben Bernanke apparently does on the table is much easier to stay up -- with that -- -- -- there they can hit the plentiful amount you know.
All the -- to have a -- -- -- talking investment at midnight that's right.
I was -- from the join us.
Mark -- -- from Hong Kong all right Bob thanks again.
And now that we had mark his -- obviously a little different than yours and it -- strategies -- little different.
Which is fine but let me take -- that issued that he just brought up which is essentially this inverse relationship between the US dollar.
And US stocks is he right will that continue and how much does that matter to somebody watching at home who watches the nominal value of their equity portfolio go off.
And isn't thinking about the fact that hey how much is it really worth.
I think there's no question there has been -- likely to continue to be that correlation -- -- commodities into the mix.
People say why is oil or gold on a particular day going up and it's often because the dollar is gone down.
So those three things -- hang together that is the equity market.
Commodities and -- and and the currency.
I think that the average guy sit in this chair in the short run you're actually right doesn't make a whole lot of difference but in the longer run.
We have to recognize that what we import from outside.
The United States if the dollar's going -- gonna cost more.
And the way you see that most directly of course if you if you get on a plane and pick your favorite city -- -- for somewhere else than each time you go it's more expensive so.
We are lowering our standard of living in the world if we perpetuate that move in the weaker dollar and that's why it's an unwise policy over the long term.
Here is interesting because you bring up quality of life -- really in that conversation about you know quality of assets that are really out there and that's one of the things that we talked to mark a little bit about as well about how you actually go out and have quality control -- -- -- investors -- right now with the market shifting the way that it is.
How do you do that what's your strategy how do you look at these -- in the market and say hey this -- they're worth this much -- next week they may not be how do you go down that.
Well first of all -- we can't look at it week to week otherwise you know we we would never have a stable portfolio but.
I think we have to look at over time Missouri where -- the trends likely to be.
Going forward and how do you invest for that and right now for an example.
Our view is that quality is getting more interest -- we've had a huge run from junk.
And low quality names with the inequities and we think.
Within each sector you want to -- drift to the higher quality names.
Because they're not they're not expensive in fact they're cheap relative low quality they're likely deliver in the slow growth world.
And therefore -- -- movement to make a lot of sense from our point of view.
All right to give us an idea about how that actually plays itself out.
In terms of specifics because you you you make appointed in the first part of the cycle it does kind of make sense for -- lower quality -- to really shoot out.
Because there -- often more volatile and what have you but now you you think we're in another part of the cycle and there was interest he said that the names are not overpriced.
To give us an idea little bit more about that.
Realistic energy sector is an example -- like the energy sector but we want to -- only.
Aggressive leverage E&P companies and oil service the names -- done so well off the market low.
We would also have in the portfolios some of the can I say stodgy or more conservative therefore higher quality.
Integrated oil companies so we would have -- more of a mix there that's I think in general like the energy illustration.
Moving away from the more leveraged higher beta names in this sector toward the lower Bader more quality and generally up cap names it's probably a good thing.
It -- during this period of -- consolidation perhaps correction but also when we emerged of the upside again which we think we will.
-- you've called this year almost exactly you you've laid out the way that it was gonna go down.
If you're looking looking ahead.
Field besides -- that had been a general rally we've seen in the market six to seven month rally that we've seen in the broader market what's the biggest surprise for you despite the fact he called the way that it is.
-- -- -- -- -- I think two surprises one that we went down as far as we did we expected weakness early in the year but not that much.
And I and secondly the degree to which the market and in particular those low quality names -- come back.
-- have a -- off every market bottom the low quality does well we've never seen a buy this -- magnitude the kind of back from the -- dead phenomenon is actually phenomenal to watch it and how do you apply that those surprises -- what what we all learn from that to investing going into the next year.
Well I think -- basically I've described as the volatility -- -- -- that we fought in both directions so.
I think what we've learned from these episodes as you've got to pay attention to what happens in the -- -- the positive tale of the negative -- they can happen more often than you think.
Man that has been tremendously volatile of who you think that will continue I mean.
If you had a best guess now what -- next year look like just in terms of the up and down -- -- are we gonna get into a little bit of the steady year.
Investing environment or is going to be is -- the last couple.
I think it'll be less volatile than we saw in the twelve month period kind of from June -- of last year to June 30 of this year.
But not as stable as what many of us grew up with so I think you have to be.
Ready to to see movements.
He's short periods of times in both directions but not by the unbelievable magnitude of that earlier period.
-- shifted away that you're viewing I mean you talked again about.
The quality of life here in the united -- -- heavy shifted your views on how you're looking at some of these emerging markets and what made you brought into the portfolio and what you've.
You pushed out.
What long term our -- still is even for US portfolios you wanna -- companies.
That are exposed to the fastest growing parts of the world so.
That means you want some multinationals.
That can grow because they're -- -- increase their business -- and hopefully increase their market share in some of those emerging markets.
So we think that's an important ingredient even for US based portfolios but -- -- -- I change from that maybe -- accelerated.
As we believe the developed part of the world is going to have slow recovery in the emerging.
It's more interest and okay did that this might be about it done question for equities got to some extent but did so that -- you probably agree with the mark -- that.
Hate stocks -- hard them or just hard assets in general are -- better place to be and then capture or bonds which he says are terrible place to be right now is that fair enough.
Yes it's I think a fair comment the way we express that in our year ahead outlook at the beginning this year is this is gonna be here when transitioning.
From safe to risk assets makes sense in particular reduce your cash and treasury holdings increase your.
Corporate bond high yield an equity holdings and you connect commodities to that list.
Bob dollar of real pleasure thank you so much for -- congress usually we'll talk again soon thanks Bob thank you -- all right guys next up talk about.
Where to put your money for the short term got Alan -- coming up which worth the investment style of Vernon net.
Biltmore capital advisors good round table there another one later on and bill -- it's not as well from -- and Stein.
Capital so much more still to come -- are -- special.
Back everybody we've actually traveled up around the world I know I -- and then you have to write in Hong Kong remarked -- allegedly talked to Bob doll of course.
As well east coaster and move out west to really find out -- where we should be put our money now.
Yeah our next guest is a coming up you're right from the West Coast describing the trading environment -- a game of psychological.
Warfare actually as we have a little bit later we talked Hillary Kremer.
Though later on in the show but -- -- and Stein joins us from out in Seattle I believe the -- -- -- Capital billionaire it's always great to have you on the show if you are even if you're not going to.
We don't unknown don't have bill now so we are gonna go to Hillary now OK I just want to believe because psychological warfare Hillary kind of puts you in to consider might -- that -- -- -- looking to invest really.
So why is it like that and what do we do OK well the recent technological warfare today.
Is that the individual investor -- in it for the long term to write my -- appreciation.
But they're going up against Wall Street which is at war which is trading which is bringing up stocks which is inflating stocks that's -- we have.
AIG Fannie Mae Freddie Mac which typically worthless accompanied.
-- some felt he could have could triple so when investors look at pat look at the market they need to understand.
That in many ways they're being sat out this is a psychological aspect -- -- right need to be very very careful understand you may have to take your money off the table.
And not think of it as a five to ten -- -- -- in all the time unless you're willing to take the ups and downs and not become fearful and kind of bring that money out.
-- interestingly it was we're gonna talk gotten a little bit of a short terminal about long term investing and he's had these two actually conversations.
-- too well known investors that have different points of view.
But your point is hate.
Just know when puzzles like no -- all the -- to -- them to some degree.
Actually -- -- buy and hold completely dead -- Not necessarily not necessarily it's just that there is a lot of impatient out there and many of us need to access our money in an F five -- -- -- time horizon.
-- and really the situation is that our market has gone up over 50% since the march lows when the S&P hit that 666 number.
And so many investors they're jumping into the market they're thinking that this is -- opportunity to -- back on those closest yeah but that is that it's really been height.
The market's going up on expectations and these wonderful words we've heard out of Washington and not just green shoots but -- the recession likely being over.
But the consumer -- 70%.
Of GDP in this country and the consumer.
Doesn't have access to credit but the consumer used to -- credit lines are being pulled.
There's -- to fees being hidden in credit card and then you have this other double whammy which is that.
No real unemployment from when we do the numbers we're talking over 20% of course -- including.
Groups that aren't even included in the government official real unemployment number match -- I'm going to say maybe it's I was gonna say six -- six.
Eckstein Griffin and remember that -- manner matter what you write but that's not including I think those that retired at 55 or sixty what would absolutely be back.
You're in the market.
So the investor is hearing all of this hype out of Washington they're seeing stocks go up they've experienced all these losses and then you combine that with the fact that.
Real true profits aren't really there we so profit.
But that's because we had cost cutting.
Revenue revenue is still down or at least it was sales last quarter and we need expansion -- -- market continue writing upward -- given that what is than what I'm curious about your stock picks and also include Goldman Sachs and Morgan Stanley you'd think some of the names.
That felt the most exposed during the time that.
Most anxiety in this marketplace so talk us through a few of the stock.
OK well I'll start with Goldman Sachs and now -- facts there that.
Pick a target of -- -- anger good reason I understand why but if you get even by Goldman Sachs.
Think it this way you want in this market find companies that are really making money could be making money the banks.
Obama's tax converted themselves into a bank holding company.
Now Goldman Sachs gets to borrow money at 0%.
And they can lend it out at 678%.
To whomever they want they can borrow money they can lend money back to the US government and by a ten year treasury at let's say 3.4 percent.
What's better than that it's a money machine it's a well managed it's amazing talent they have a they have -- -- they know how to keep happy.
They where they -- part of the underwriters have an IPO yesterday a 123.
-- we saw a rise 50%.
They never go wrong with Goldman Sachs you don't go wrong and by this stocks of companies that are going to grow and -- -- And also -- tax.
He can -- England pickup distressed assets.
That others don't have the ability to do.
You know even know we hear that the recession is over it really isn't and -- still companies going to Chapter Eleven chapter seven and -- going to be eager to put down five cents on the dollar pick up that asset.
And they have the ability to wait 1020 year time horizon and make the -- At times on their money -- your point about the recession is is well taken the extent that the technical economic you know economists definition of a recession.
You we may be out of that but the real life how people feel is it is a lot different -- -- it not only Goldman Sachs if you look at companies generally speaking that.
Whether it's competitively or because they're in position like that did take -- to take part distressed investing take.
Look at those companies that can can thrive in that environment other others.
So yes absolutely -- Morgan Stanley would be another example of course they're not as strong as Goldman Sachs yeah I think have a liquidity they have a very healthy balance sheet.
They haven't -- themselves up so -- like Morgan Stanley and also and they have a new CEO coming in so I really think we're gonna suit in new CE OMR -- yes replacing John Mack.
We're gonna see some really fine leadership also.
This -- in his expertise is in wealth management.
And remember Morgan Stanley has hasn't done this merger with Smith Barney so they had to their -- after teed up for this perfect wealth management financial advisor.
Global business and they could be the 800 pound gorilla.
Now other companies that I look at.
I'd like dividend yield because what I've noticed is if you go out there get a CD to certificate of deposit the most you can get for a year to two years has.
One and a half to two and a half percent on your money.
But that's why we see some new investors going into the dividend yielding stocks one company -- like at HCP.
HDP as a REIT.
And this real estate investment trust gives -- -- six point 3% dividend yield.
And on top of that what HCP does -- that the real sweet spot which is taking care of the elderly with nursing homes they have medical facilities.
They have testing labs.
And -- senior housing might also get a very clean Balanchine have a one point four billion dollar credit facilities they don't need money and that's what you wanna look for.
Our company that are healthy that don't depend on the banks for financing -- they have something in place.
One of the tough things of his markets has been where you actually jumping -- whether -- not want to be involved at all especially foreign investment let's say if we look at commodities.
You can you know looking need to yes you can actually go out and -- Gold for example you can automatically -- you can go ahead and buy stock relevant to that is about besides me to death is that a company.
So how do you play how do you decide if you're looking at those different options you all of them from -- for a commodity like gold.
Or is one better than another.
Janet it's a great question because I'm hearing all the time Hillary what should I do Ted I -- -- -- this travelers should I buy gold ET app or joy -- and -- is good I mean I think.
Hopefully we're and in the juries are -- up.
And and gold coins in and gold bars which in this all over the world we're having but it net buyers into the net sellers.
My eight choice would be to buy company like gold -- GG to Canadian diversified gold company.
Now my reasoning is.
I'm a stock analyst -- -- is always looking at companies are so well managed in there in other areas and other commodities such as the lead is seeing.
Iron or platinum so what you're getting with gold -- -- well managed company into the half that diversification.
Of course that doesn't mean that I don't go and played GOD which is a gold ETF.
I'll go in and out of that I didn't date trader.
Because I trade stocks nice and I and I trade commodities.
But I think the company like GG you can't go wrong and and especially back kind of management.
All right we're gonna run here in a -- Hillary did before we do that I know you like and ideas that you see is well.
The NASDAQ the market OK for the -- Max tells us.
Such an obvious stock to invest in right now and NASDAQ ticker symbols and DH QB and that leadership there to CEO which I'm sure you know him well as Bob right now yes initially times.
They have electronic trading platform that's really superior to much of their competition -- in -- low cost providers tried to cut in there.
And the way -- that makes money is on volume.
-- -- -- trading the more NASDAQ we'll make money so NB AQ.
Right really primed to print money he's coming quarters including squatter because the trading volumes -- Even August trading volumes were over 12% across the market usually down it was actually a positive and it was a plot so -- they're expanding so I think that's -- you wanna go fair -- who have failed who has money coming in and they have IPOs and has since I've had and that Henry -- she probably has surroundings you're about nine months pregnant -- yeah -- couldn't get any moment -- have a portfolio for a further you -- coming.
I'm thinking about that especially with the way the economy is now.
Yeah I can just a spreadsheet and take it out a few years and discount it back in -- -- you can though it's different you know -- -- Just to let -- how well it out it -- -- -- it I think it thank you would have loved to have.
Of disclosures by the -- a mission a whole heck of a lot of -- you'll know pretty.
None of those stock I own it just that GOP sometimes I will I and I will sell any given day but knowing -- -- -- -- and right now yeah.
And I get good luck and it is so -- -- -- I think.
Really appreciate it we ought to still get bill fleck at Stein and yet Teddy Weisberg coming up a lot more still to come -- they are investing.
Especially as we continue a -- -- capital advisors next day with this much more.
On Fox Business.
-- -- with you just joining us.
First of all thanks for joining us and we've had in the number of just really lifting conversations -- father was with this Bob doll.
From black rock kind of a mixed view those two didn't see necessarily I die you wouldn't think but then when you listen to the more closely I thought a lot of their ideas for similar.
-- much more.
You know not enough extreme is the right word but he's he's much -- to one side of it but then when you we -- all about it but I could see some of that way of thinking -- It's a little unsettling isn't it because -- we're doing the show from New York -- more Americans yes we -- little negative on the American -- -- -- he has more -- that's the way he's been for a -- -- -- saw a little bit as far as -- in the the debt that's out -- a good -- yeah a lot of people -- looking for more investing opportunities overseas and -- a larger and and to point.
Still -- and that kind of leave it right into our next big question besides the fact celebration actually put your money if you are putting your money somewhere what's she doing the short term.
If you're looking -- play this -- entire Vernon principal at Biltmore capital advisors is joining us talk a little bit about.
If you're short term what you should do.
How short term short turn them -- listen to find that influencing what.
Good idea -- execs sponsors it -- what's the -- -- six months a year or six months than anything it's different for anybody.
I don't like Hillary might be like a day trade that seems more short term bank guide with the market volatility we've seen it from church -- noticed timeline.
Yeah I really is.
I think again I think this market is getting him if we look at the broad market it's been sideways for ten years really -- -- had some true guys Samir just for talking about -- cyclical bull I mean to me this is a cyclical bear we've we've we've been through this before.
-- I think a lot of strategies what does well in sideways market -- in for us right now there's going to be a bottom on the mark with a liquidity right you're getting point 1% in the money market it's gonna cause some -- the bottom on the top.
We've run so quick in our -- have fundamentals.
How much further can -- really go here.
So what we're going to be stuck in -- and our view in -- trading range and I think certain death strategies like covered calls in and out things that aren't as mainstream aren't able stop you there and talk about that for -- and talk to some of the tragedy -- covered calls to find it and then talk about why it's gonna -- sure.
-- -- when you're selling a call you're selling the upside say you own.
You know Procter & Gamble and I don't know where it's trading day but but today you know you don't think it's do you think you gullible little bit but not too -- -- you can -- a covered call essentially.
The risk is that your yours your your capping your upside on the -- No that's that the risk and a covered call strategy is you're capping the upside in it's change for an income somebody's gonna pay you -- income stream.
For the right to own the upside on on your stock so.
You know this is really great strategy one can bring in.
Not -- the dividend they can bring in nine to 12% income so this -- stocks don't go anywhere again you consult covered calls on these stocks bring in 910% -- come to -- not including you are and -- dividend.
So again the wrist is that that you don't get the 40% return if the stock goes up 40% you're only getting ten to fifteen but again in -- sideways market.
I think these make a lot of sense.
How do you -- get that in short term as far as whether treasuries -- there -- bonds.
Whether it's just the overwhelming mandate in general of this country had a might figure into the to the market cap how are you viewing your strategy and how you can take advantage of it.
Rather than be paralyzed by.
As far as that specifically debt instruments are actually -- of alluded -- that there is their debt instrument that you might have been short yeah I.
And I think -- investors have to be wary about dead at this point treasury again argue there's a bubble.
You know get out while you can and and put a helmet only with opera one yeah I mean that's again that -- the Fed is gonna stop other purchase program on on now on treasuries and there's just.
It is a lot of things to be concerned about corporate bonds meaning but yeah I think there's a lot of great corporates out there I think if you still look the spreads are still historically a little little larger over treasuries than we've seen in the past so.
Specifically bank issues that the you know there's a risk premium there because people are scared about these banks but -- Goldman.
Bond for example is still paying -- 06 to six and a half percent Morgan Stanley -- six to 7% going out.
You know four years five years that that's pretty good especially when the government -- sort of shown us that they're not gonna let these big institutions fail.
So I think -- that makes a lot of sense.
Foreign bonds I think make a lot of sense them in Brazilian.
Bonds and -- I don't think it's too out there you know pay.
Going out you know not too far and if if you're bearish on the dollar.
That makes a lot of sense right if you're collecting all this money in foreign currencies once we get it over the dollar.
But just about everybody is -- -- in New York yeah we're we're we've been bearish on the dollar so again I think this international is it makes sense to have a lot of international bonds investors can do that through regular old mutual funds.
And again I think again as far as -- the corporates there's some Munis that makes sense as well.
You know one of the things we have not we've been in this investing special -- talked a lot of these big macro issues we haven't really.
Well Hillary did a nice job -- individual stocks dug into some of the sectors that.
That might work especially in more time -- -- short term -- Technology -- you like I believe now for one -- -- that you still like tech who some of them run up a little bit but tells the rationale for the for the tech -- sure -- one of the reasons why we're bearish on the overall economy is is that the the consumer and -- back there and so.
We're trying to find areas that aren't as reliant on the consumer so tech gets fifty to 60% of its earnings from overseas -- which we like we're seeing the recovery is there things are robust.
There's a huge middle class that's growing in China and -- India and and this is to really just the beginning so.
-- and a lot of these stimulus programs from overseas are hard are putting a lot of money it intact so again I think.
There's there's some real opportunity there.
They again -- it's a lot more defensive and I know people don't think tech is generally depends of name but the fact that it's not as reliant on the US consumer.
Right makes a lot of sense plus tech is giving good dividends now people don't think about in 99 you know protect the -- -- that makes sense.
But tech has grown its dividend.
By 10% a year over the last you know six years so it.
If it isn't here dented the dividend over time he met short term investments and I think people think of Yemeni jump into the stock dividend -- -- for a couple years get eight.
And that's how I'm gonna deal with this that you're saying -- there's not a -- -- -- -- you -- a look at a dividend is one on the other looks like.
I mean it -- its flat if the stocks like you're gonna get paid something which in any kind of get get paid to wait but again in a it -- been a great leader and up and down markets thus far Psycho not only just utility's renewable technology -- -- yeah yeah suits our hang on with this Ramona wanna bring in Alan Gayle as well as with us.
-- from Richmond and he's with us from rig worth.
I investments sociedad on -- private listening to -- -- -- -- short term investing I mean.
And he's brought up a number of his ideas what would you add to that terms what you guys are thinking about -- in the short term.
Well from my front from an application standpoint I guess we've we started to increase our exposure to equities back in March so we do you have a pro cyclical tilt and I think that that's probably the overriding theme for the market in the way investors ought to be structuring their portfolio.
I do think there's some risk over the near term.
Because now there's been a lot of optimism that the economy is stabilizing and starting to turn.
But we're gonna need to see that translate into higher corporate profits so we may see a little bit of a slip between the cup and the lip.
Over the over the next few weeks as we go through third quarter earnings but we still have a pro cyclical -- -- that in mind.
We have been increasing our exposure overseas I do agree that the that the emerging markets for those folks who are willing to take on a little bit more volatility risk.
That that's that's an area that we think is going to perform well in in the upcoming cycle.
So we we do like that for the fixed income investors with treasury yields to slow we are favoring corporate bonds and high quality high yield.
We do think it's going to be a a somewhat slower recovery so there's still some credit risks out there.
So we want we want to get paid but we don't want to.
Go way out on -- on the volatility spectrum for.
And Canada never just say good point just about where we are -- In this credit crisis we seems not use those terms anymore you know referred to the the economy is being in the credit crisis that we do know that Clinton -- -- -- -- -- -- -- Again in the short term what's your view in the credit markets and how that might intersected from your strategy as well.
-- well again that this stuff in the consumer army where we we continue to go back to the consumer and and and in a driving it is I think one -- just talked about the ability not for the consumer not getting credit their people are deleveraging I think there's still deleveraging going on.
-- throughout the throughout the world and is in many different areas and are still -- I think there's a lot of of work to go so.
I think it's gonna limit spending and and really limit growth.
In -- by the -- limit -- two to capital and.
You know thus affecting consumers throughout the world okay we stuck there for one minute Tyler -- with this and we'll stay here for a moment.
And Allan Gillis also -- this bridge worth investment so we're gonna talk to Alan.
And to Tyler a little bit more about short term investing.
Teddy Weisberg and others still to come as are investing special continues here.
On fox this is don't go what.
As we go along here with them.
-- with Tyler furnish you with us in studio -- -- capital advisors Alan Gayle is with us from Richmond now what kind of join the conversation a little later than Tyler -- -- -- you Allan give you chance to pick up.
On what some people should be thinking about in the short term -- you know Tyler brought up technologies -- that's pretty good place today.
-- -- also likes infrastructure -- talked about as much consumer staples so.
Tell us you know from your point of view if you're going in a different direction -- that are you pretty much thinking on the same lines.
Well I think we're.
To a certain extent what are we agree with the emphasis on technology and on but we also like the global play that you get from both energy and and materials so.
To just pursue that for just a minute one of the things I think that Tyler brought -- -- really good point about why we like technology.
Lot of people look at technology in the 19992000.
Type of timeframe with the dot com bubble.
Right now that technology space is.
Has good cash flow good margins.
They have low debt so there are not -- exposed to to credit as some of the other sectors trying to shown themselves to be very resilient and they are participating in the global fame.
Now the global -- I think is well I captured in -- energy which we think it's going to do well.
Is we as we finish out the year and into 2010.
And and materials.
That's a little bit more specifically say technology -- in -- group all of those companies together.
Guess specifically they are looking at technology deal like infrastructure and technology July consumer names in technology -- -- -- there.
Well that's that that's a really good point in our -- worth large cap funds we.
Are overweight technology across the spectrum whether it be the growth fund the core fund -- the value fund.
You can get a growth the type of name like Angela.
Is is it is a name that has performed well.
If you want to look one more of the service side.
Which would be more of a value type -- -- centuries seasoning that we don't so I would say that from a technology perspective.
We like technology pretty much across the board.
Good enough we're gonna wrap up this -- composition of the short -- you wanna get some longer term views and here is.
As well as we continue Allan thank you and and it was good to talk to Tyler thank you to to use -- do something -- Good conversation here just continuing what has been all hour long really pretty good talk about all angles of investing.
You wanna talk ourselves up too much and of necessity that there gets down to us.
I have yeah.
You're right it got -- -- right that's a great guest and -- rise through it and say about a stadium great yes I think he's joining us from the floor.
The New York in New York Stock Exchange is part and -- have a way a look at some of the long term investing in Teddy we just want to be clear.
You know just because you've been on the floor for about forty years is now I'm talking long term investing with nearly this big thing you know I talked to better than anybody out south -- note.
And the -- I can I can talk about it gets hard to practice.
Well that's not gonna look Clinton where you begin if we're looking at awaits him to say hey we're gonna start doing a long term investing from now from today.
-- how to how do you condition yourself.
Well I think.
You -- -- actually need to go back and dad had it at and listen to it very carefully to what -- -- -- -- though I -- mean that that they yet.
At the tail end -- -- -- that conversations.
I would number one -- -- number two I was shaking my head in acknowledgment because.
I think they're both I pretty much right on the money.
But from my perspective.
Having made -- more mistakes I think -- they get anything right over the last forty years.
The fact that I'm still standing here sort of defies gravity but.
I have you know off my approach to this stock market has always been -- a conservative approach and basically one dimensional.
And it it sort of works for me it worked for our clients.
Certainly not a professional money manager portfolio manager.
No I'm not suggesting what what what I would say.
What you know one size fits all I I really wouldn't want to -- other people latch onto it but.
But my perspective and in and long term investing and in the in the current environment.
If I try to use that dividend model -- I have when we buy stock for ourselves -- for our clients.
Right -- because basically.
I want to get paid while I wait and and and today's environment for our aim is to be much more difficult than any environment that I've seen right in my forty years in the business and in the market timing is almost impossible because -- so many -- parents.
So basically if my what I think you're good stocks that are hopefully out of favor to make him a little -- But that there is that there is a parent and and the prospect of that dividends being paid -- -- -- dividends.
Overtime -- -- the business model is sound right management is good.
Make a few bucks while you wait seems to make sense women -- also with us along with Teddy wins here in studio might nations global asset.
Allocation group conceived by the way when thank you very much for coming in now would you agree with -- that looking at.
Stocks that pay a dividend -- when you're thinking longer term as many investors do is a good is a good strategy and what we get to.
By mean I think is -- is a valid strategy I would add a little bit to it that.
You know when you when you think about investing you can think about there's two main things that kind of drive.
You know whether -- decide investment one is valuation the other one is well.
-- -- And momentum is really you know.
A function of risk appetite is sort of money sort of flooding in I think -- -- it's a very surprised manic.
I hope I will save.
You know there are times.
When you know you do see.
Momentum in the market and and a flood back of risk appetite how important is the momentum.
And and where the risk appetite is at a certain and at a time.
For somebody who does a very long term.
Plus I think I think you need to balance enough credit I think what what you see is.
You know in the and that and when when we hit the lows the market lows of some 666667.
-- had very negative momentum but tremendous valuation there's just uncertainty there.
As a as a longer term investor I think that you you tend to skew more towards valuation because in the end you know -- -- Warren Buffett quote where.
In the long term the the stock market is a is awaiting humans -- -- a voting machine and it's.
I I agree say that the long term valuations endorsement two win out.
-- -- a lot of us don't get to talk to people on the floor of the New York Stock Exchange every day a lot of us have our managers that are looking at a forum in case that we never talked to assume we're gonna check and let's say I'm on and you know 41 K oh well that's have been -- -- -- what do you think the one question we should be asking.
The person that managing our money.
Oh boy well I think he really got to understand there at their philosophy and and their approach to -- that a conversation that we're having now.
Having that right so many different strategies there are so many different ways to skin the cat.
That it it's almost mind boggling and impossible to figure out I think -- basically need to gravitate.
Dramatic series that over over a long period of time have given people.
Good decent returns it's not about to -- it's not a personality contest and it's not about picking the flavor of the month that guided it eventually escorted the guided.
That's way here right there with me that is that -- -- that was on top play -- going to be on the bottom.
In the pilot we -- for -- -- -- no fault of his -- that -- that he didn't try.
But you know I would like to get back to this momentum back ache coming -- sure you'll actually go ahead and add to -- -- was talking about.
But that's the one thing that I would look at -- pilot you know that matters to see what a style was.
I would -- I wouldn't.
Go anywhere near a -- that basically.
What the momentum player but that's to me momentum investing is.
-- that is almost like cocktail party investing.
It's the greater fool theory in the -- was tormented and that it is that you're the last one to come to the party.
And when everybody else decides to leave and you're there you know holding the bag when everybody did or is that tonight advantage -- -- anybody off -- you're doing thing.
So that -- that's -- funny Teddy brings up a point does admit as we always say that.
I agree a mythic I think that is something what.
That that needs to be balanced off against valuation right clearly right so.
When you have great momentum and valuations -- just ridiculous the state did the tech bubble right.
That probably was not a great time -- to do momentum.
But you know when when valuations look fair to -- it's somewhat cheap and the momentum -- turning around.
And you're sort of -- the the trough of an economic cycle and you know you you feel that your recovery the economic fundamentals are sort of behind that.
I think what you've seen them in the markets today is is momentum reacting from.
Better -- -- first -- -- -- understand we're beyond that beyond the the trough of the of the economy and that things are starting to pick up a little bit.
And and so.
I agree with -- that that in and of itself momentum.
Investing if you just relying solely on momentum is not you know is probably not a good idea okay well but.
Get -- we have to actually run in the minarets diluted said he quick out last word on this you know I had I had it is not it is the top you can talk about Crowley tonight out -- few minutes.
I think momentum is his style there is that period in time when it works but I think for the fundamental long term investor it's a -- it's -- psychological trap.
And I think he resists that temptation.
Aren't we will do that can we do not want to be -- back cocktail party at all the best ones left Clinton headed right straight thank you very nicely thank you -- -- he appreciated thanks everybody.
For joining us in this -- last hour we appreciate -- Jeremy can always catch foxbusiness.com.
Every weekday noon eastern time on the Internet and died during the rescue weekend to care but I.
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