Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business
Speaker 1: Week with Carol Masser and Tim Stenovek on Bloomberg Radio.
Speaker 2: Can I just say I'm exhausted. I want to see
Speaker 2: what Louis Navalier has to say. He has seen his
Speaker 2: share of crises, volatility, market cycles. He's chairman, founder and CEO,
Speaker 2: ce io excuse me of Navalier and associates. And he
Speaker 2: joins us.
Speaker 1: From Rancho, Santa Fe, California.
Speaker 3: Nice. Nice?
Speaker 1: Are you just north of San Diego. I don't even
Speaker 1: know why he's inside right now. He should be outside,
Speaker 1: I know, but it's a beautiful.
Speaker 2: Play and go really, so then you're not worried about
Speaker 2: the market.
Speaker 3: No, no, because I have good earnings and the real
Speaker 3: good earnings kick off next week with Taiwan Semi Conductor,
Speaker 3: although I don't own that stock, but it's a bell weather.
Speaker 3: I think Netflix will probably okay, and then we'll start
Speaker 3: to focus on earnings and I live core or so
Speaker 3: I think there's four months of efficient markets, which is
Speaker 3: earning season, and eight months of mean reversion, and the
Speaker 3: mean reversion season will end soon.
Speaker 2: Wait, okay, so we wait.
Speaker 1: I'm just like this jumb found you. You know what,
Speaker 1: you should have gone and played at golf of a
Speaker 1: game of golf to Carrol because it relaxes you, apparently,
Speaker 1: and everything is fine.
Speaker 2: How do you so, what's your read on Washington? What's
Speaker 2: you read on the president?
Speaker 1: And what you read on tariffs?
Speaker 3: The bond vigilantes are in charge. Obviously they had a
Speaker 3: Scott Best that had meeting with President Trump, and how
Speaker 3: Howard was there our Commerce secretary. Those are both experts
Speaker 3: in treasuries and the bond vigilanities took over, so they
Speaker 3: had to they had to put the ninety day suspension on.
Speaker 2: But so then, what do you think was going on
Speaker 2: in the White House today as we saw a bunch
Speaker 2: of selling.
Speaker 3: I think the bond vigilantes are still in charge. We
Speaker 3: had a thirty year bond auction and we got away
Speaker 3: with it, but the dollars a week Apparently a lot
Speaker 3: of people own our treasuries are net sellers, and they're
Speaker 3: just not as friendly as they used to be. I
Speaker 3: personally think that rates will collapse in Europe and then
Speaker 3: the dollar will get its mojo back. But for the
Speaker 3: short term, these big and soutional bond players are in charge,
Speaker 3: and they allowed our treasure yields to spike, and they
Speaker 3: had to do something, so they put the ninety days
Speaker 3: suspension on.
Speaker 1: Hey, Rich we spoke, I mean, excuse me, Louis, we
Speaker 1: spoke to Rich Weise at American Century Investments. I'm looking
Speaker 1: at my notes here to go back to what he
Speaker 1: told us. He called this uncertainty on steroids. He said
Speaker 1: he's not buying the dips. He said, this downturn is
Speaker 1: more serious than other ones. He called it man made
Speaker 1: in a catastrophe. He was pretty dour. He had warnings,
Speaker 1: it doesn't seem like you have the same sentiment.
Speaker 3: Well, I mean, I'm a quant, I'm a fundamental quant,
Speaker 3: and I will confirm that our models toightened up, and
Speaker 3: the models would like us to be in the top
Speaker 3: five percent. The krem lakrem. The way those models work
Speaker 3: is when the mark goes down five percent, we can
Speaker 3: withstand that. When it goes down twenty, we can't withstand it.
Speaker 3: They throw the baby out with the bath water. But
Speaker 3: fortunately the baby's bounced yesterday. And I mean, you know,
Speaker 3: I Portfolo is up over nineteen percent yesterday, and it
Speaker 3: was a big bounce. I mean, obviously we got spanked today,
Speaker 3: So I feel very confident that when earnings come out,
Speaker 3: things will right itself.
Speaker 2: I mean, you just don't care about do you care
Speaker 2: about backward earnings or you're saying that you are confident
Speaker 2: that the outlooks are going to be good too.
Speaker 3: No, I'm on the outlooks. I don't have analyst cuts.
Speaker 3: I have eighties bocks I own. I do not have
Speaker 3: analyst cuts. I'm not talking about the top down strategists
Speaker 3: of low where they're targets the SMP, and I'm talking
Speaker 3: about the actual analysts that cover the companies. So I'm
Speaker 3: pretty insulated right now, and I'm very comfortable. You know,
Speaker 3: my largest holdings are Navidian super Micro. You saw how
Speaker 3: they bounced. I have a big holding in Lily. Obviously
Speaker 3: it's struggling here with the fear of you know, the
Speaker 3: tariffs on the pharmaceutical ingredients and all. But yeah, this
Speaker 3: could have been rolled out a lot better. Obviously Peter
Speaker 3: Navarro was fighting with Elon and all that stuff, and
Speaker 3: that didn't help. You know. Also, I did notice a
Speaker 3: lot of the negative press was coming from outside America,
Speaker 3: and you know, those markets would gap down and it
Speaker 3: would put us in a pispour mood, and this is
Speaker 3: the previous days. But you know, the good news is
Speaker 3: they they're responding to the market. Who knew that Trump's
Speaker 3: social was one of the best ways to call the market?
Speaker 3: And that's controversial itself.
Speaker 1: Go on with that, What do you mean, well, he.
Speaker 3: Told everybody to buy yesterday morning before the market opened.
Speaker 2: You believe that?
Speaker 3: Yeah, No, he'd be put in print. It was all
Speaker 3: in cap with three x on. No.
Speaker 2: No, I mean I saw that, but I mean, yeah.
Speaker 3: Well, we didn't tell us what to buy. I didn't
Speaker 3: tell us why we should buy cars or houses or stocks.
Speaker 3: You know. So he's not going to get persecuted for
Speaker 3: I know Adam Shiff wants to persecute.
Speaker 1: Him, but.
Speaker 3: You know, it's it's uh. I found that to be
Speaker 3: very interesting, you know.
Speaker 1: Louis, given what we learned in the last twenty seven hours,
Speaker 1: this ninety day pause, does is that just kicking the
Speaker 1: can down the road here? Did he? Why not?
Speaker 3: No? Well, there's two things. First, we're going to have
Speaker 3: a ten percent tariff. Okay, those those are non negotiable.
Speaker 3: And the reason they're doing that is we have a
Speaker 3: big underground economy. So I'm in California where twenty percent
Speaker 3: of people don't have bank accounts, and guess what, you
Speaker 3: either have to put a vat tax on him or tariffs.
Speaker 3: So that's what they're going to do to get more
Speaker 3: tax revenue. As far as the reciprocal tariffs, it looks
Speaker 3: like most countries will you know, Israel's at the standard,
Speaker 3: and but even when they cave, Trump's still trying to
Speaker 3: extract business from them, you know, like, what are you
Speaker 3: gonna buy. You're gonna buy energy, you're gonna buy food.
Speaker 3: What are you gonna buy? And so I think that's
Speaker 3: what's complicating the tariff negotiations is they have to guilt
Speaker 3: you to buy stuff. And so in the end, we
Speaker 3: are going to get a lot of on shoring and
Speaker 3: we are going to have a boom, but we've created
Speaker 3: a tremendous amount of uncertainty. So any company that warns
Speaker 3: okay or a guide's lower is obviously going to get shot.
Speaker 3: And yeah, you said we're going to get a boom.
Speaker 2: So you believe that this trade policy is a good thing.
Speaker 3: Because in the end we're gonna have free or trade
Speaker 3: in the end, except for the ten percent, and obviously
Speaker 3: we're having a fight with China. We're having an economic
Speaker 3: war with China right now.
Speaker 1: That's a that's a pretty big trading partner to have
Speaker 1: a war with. Given that these are one hundred and
Speaker 1: forty five percent tariffs, When do those get resolved?
Speaker 3: I don't think they get resolved. I think you know,
Speaker 3: she's got his own problems in China, you know, and
Speaker 3: he's got a deflation problem, and the Financial Times talked
Speaker 3: about they might have to devalue the currency. Their rates
Speaker 3: are lower than than Japan. The fact they are the
Speaker 3: new Japan. They're losing millions of people a year, they're
Speaker 3: losing households. They got problem after problem after problem. So
Speaker 3: we'll see if cooler heads prevail. But she got rid
Speaker 3: of all the reformers, the ones that were running the
Speaker 3: economy a few years ago. So you know, it's just
Speaker 3: two egos going at it, and they might respect each other,
Speaker 3: but I don't know if they can get it done.
Speaker 2: Hey, Louis, have you been moving any money into like
Speaker 2: Europe and money outside the United States?
Speaker 3: No? No, because I'm expecting the dollar to get its
Speaker 3: mojo back. You know that. In fact, if the dollar
Speaker 3: does get its mojo back, it's going to help squell
Speaker 3: those temper tariffs. You know, you know, but we already
Speaker 3: had a great CPI and we don't see the inflation yet.
Speaker 3: But you know, if I'm a if I'm ordering things,
Speaker 3: I think there's it's chaos right now. And in meantime,
Speaker 3: we've had all these goods dumped on America. I assume
Speaker 3: they're going to discount them and sell them. I mean,
Speaker 3: you know, so I think that the you know, I
Speaker 3: think we'll be okay, but we need some leadership and
Speaker 3: I think we'll get it from our semiconductors and some
Speaker 3: other places. And meantime, we do have an energy problem
Speaker 3: because oil prices are so low, the permium is not
Speaker 3: going to be profitable. So that's going to be interesting development.
Speaker 3: So if I was Trump, I'd start putting oil in
Speaker 3: the strategic patrol and reserve to put a floor under this.
Speaker 3: Because he doesn't he doesn't need a boom bust in
Speaker 3: the oil patch.
Speaker 1: What happens if we do get a boom bust.
Speaker 3: Well, we're already having a bus now. We don't have
Speaker 3: a natural gas problem, we have an oil problem.
Speaker 1: You call this, you call it this a bust right now?
Speaker 3: Yes, because the permium will stop, will stop drilling.
Speaker 2: Yeah, because it's just not profitable, right, like you can't.
Speaker 2: You got to have a certain price in order for
Speaker 2: it to make business.
Speaker 3: H Alberta is hurting. You know, this hurts Alberta. You
Speaker 3: know they have to you know, they have to use
Speaker 3: natural gas to steam the tar sands. So this and
Speaker 3: then now we put we will obviously want to a
Speaker 3: tariff on the Alberta oil. I think it's ten percent.
Speaker 3: So I was actually at our largo when the Alberta
Speaker 3: premieer was there and she was not happy. Okay, this
Speaker 3: is before things escalated. Okay, tell us more. She wasn't happy.
Speaker 3: She's they're sucking up to Trump. She has to because
Speaker 3: that's where the pipelines are. You know, Canada used to
Speaker 3: put oil on trains, but in twenty thirteen one of
Speaker 3: them overturned and wiped out a nice Quebec town and
Speaker 3: killed forty some people. So basically there are there's no
Speaker 3: place for Alberta to ship the oil except America, and
Speaker 3: we have and and now we're putting a little terror
Speaker 3: at least two percent tariff on that.
Speaker 2: Yeah, so Louis, I have to ask we just got
Speaker 2: about I don't know thirty forty seconds here. Wait, you
Speaker 2: said you were at mar A Lago, So were you
Speaker 2: talking with the president?
Speaker 3: No? No, he's president now. When he before he was president,
Speaker 3: he would run around kind of like he's the mater
Speaker 3: d and he was very friendly. But when he is president,
Speaker 3: his area is roped off, and you know, he waves
Speaker 3: to everybody knows who some of us are.
Speaker 1: Were you talking with him before he was president.
Speaker 3: Yes, he'd come in and say hi, but he pretends
Speaker 3: he knows me. I don't think he knows who I am.
Speaker 3: I'm not a member. I guess can invite it a lot.
Speaker 3: I do live in Florida.
Speaker 2: All right, listen, appreciate getting some time with you, and
Speaker 2: I'm sure we'll come back to you in the near future.
Speaker 2: Louis b While Louis Navalier, Chairman, founder and CIO of
Speaker 2: Navalier and Associates.