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Speaker 1: This is Bloomberg Surveillance. One of the reasons for wanting

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Speaker 1: to adjust policy rates higher is that if we do

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Speaker 1: and into trouble, there's room to ease. I think it's

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Speaker 1: clear that we should be effecting further eating for the

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Speaker 1: European Peco Bank, and we should probably be expected further

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Speaker 1: eating for the Bank of Japan. One of the concerns

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Speaker 1: expressed for markets is a lack of global growth, and

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Speaker 1: it really is showing up now and now. Put Bloomberg

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Speaker 1: Surveillance your link to the world of economics, finance, and

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Speaker 1: investment on Bloomberg Radio. Good morning everyone, Michael McKee and

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Speaker 1: Tom Keane Bloomberg Surveillance. Who welcome all of you worldwide,

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Speaker 1: Bloomberg Radio Plus, what a great Crystal Clear of the show,

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Speaker 1: all the shows on Bloomberg Radio, Crystal Clear, Bloomberg twelve

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Speaker 1: D Boston, Good Morning sixty the Bay Area in San Francisco.

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Speaker 1: Corey Johnson telling me the weather out there has been

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Speaker 1: just extraordinary recently. Good Morning Bloomberg FM, Washington. Of course

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Speaker 1: here in New York and nationwide. Years next Time Channel

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Speaker 1: one nineteen, Howard Marks coming up in a moment that's

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Speaker 1: always very important. Where we try to get uncommon sense

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Speaker 1: from a thoughtful investor. That's the goal, at least. First

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Speaker 1: foreign exchange. The Forex Brief brought you by Interactive Brokers,

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Speaker 1: winner of FX Weeks two thousand fifteen award for the

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Speaker 1: Best Retail Forex trading platform. Visit ib AT, I b

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Speaker 1: k R dot com slash four x. I'm watching Paso

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Speaker 1: is a proxy stronger Mexican peso UH in the last

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Speaker 1: number of days as emerging markets calm in the churn

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Speaker 1: that we have. Mid February eighteen point one five Yen stronger,

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Speaker 1: one eight eight euro weaker, Sterling weaker as well. Well.

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Speaker 1: I'd stand corrected. Sterling shows a little bit of gain

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Speaker 1: one eight here as a prime minister migrates to Brussels

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Speaker 1: on a Brexit. We will exit right now to the

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Speaker 1: equity markets. Walmart ten year track record four point five

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Speaker 1: percent per year. David that doesn't get it done doesn't know.

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Speaker 1: It's certainly the latest outlook for Walmart didn't get it

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Speaker 1: done either. Before we get to that, though, should point

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Speaker 1: out there's some breaking news, IBM agreeing to buy Trouven

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Speaker 1: Health Analytics for two point six billion dollars. It's the

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Speaker 1: fourth health data related acquisition at IBM and less than

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Speaker 1: a year and the biggest deal since Jenny Reatty took

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Speaker 1: over as IBM's chief executive three years ago. And IBM

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Speaker 1: shares are up two and a half percent in early trading.

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Speaker 1: Now we'll turn to Walmart, down four percent. The world's

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Speaker 1: largest retailer said this year's sales will be relatively flat Warmart.

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Speaker 1: Walmart had expected sales to rise as much as four

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Speaker 1: percent UH this year. Company attributed the cut to a

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Speaker 1: stronger dollar and a push to close under performing locations.

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Speaker 1: And then Parago down seven and a half percent. The

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Speaker 1: generic drugmaker's fourth quarter revenue and adjusted earnings failed to

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Speaker 1: meet analyst average estimates in the Bloomberg survey. Parago said

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Speaker 1: it plans to exit some brand new consumer healthcare products,

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Speaker 1: an area that it only recently entered. And video, though

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Speaker 1: up eight percent, the biggest maker of graphics ships made

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Speaker 1: a fiscal first quarter revenue forecast to beat estimates. Sustained

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Speaker 1: demand for gaming computers allowed in video to weather a

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Speaker 1: slump in personal computer sales, and speaking of computers and

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Speaker 1: software and networking equipment, Ingram Micro distributes all those products.

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Speaker 1: It shares are up twenty two percent, ingram Micro accepting

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Speaker 1: a six billion dollar takeover offer from China's jan Jin

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Speaker 1: Jan High Investment Marathon Oil of four percent. The energy

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Speaker 1: producers said a cut investment this year by more than

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Speaker 1: fifty percent and also reducing production uh Marath Marathon's fourth

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Speaker 1: quarter revenue be estimates and its loss was in line

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Speaker 1: with projections. Demon Energy, on the other hand, down six percent.

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Speaker 1: The oil gaest producer raised as much at one point

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Speaker 1: three billion dollars by selling the equivalent of a thirteen

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Speaker 1: and a hand percent stake at David. There's a lot

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Speaker 1: of dynamics going on in oil right now, right Oh absolutely,

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Speaker 1: I mean the other day, well you've got a few

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Speaker 1: of those, and you've got Warren Buffett. This stepping up

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Speaker 1: an investment Philip sixties six courtesy at Barkshire Hathaway and

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Speaker 1: also moving into Kinder Morgan is sort of a related business.

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Speaker 1: Kinder Morgan caught my attention yesterday. Right now, Howard Marks

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Speaker 1: of oak Strey, let's get right to it hard. We

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Speaker 1: don't have enough time today in distress bonds is the

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Speaker 1: moment we're in an opportunity for Mr Marks? Or is

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Speaker 1: it your under the desk which is No, I think

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Speaker 1: that for the long term investor, I think it's a

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Speaker 1: very good opportunity. Things are a lot cheaper than they

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Speaker 1: were nine months ago, six months ago. UH. Negativity, Jimmy

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Speaker 1: and has made its way into the market, and we

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Speaker 1: want to buy when mark when investors are worried and cautious.

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Speaker 1: We don't want to buy when they're optimistic in euphoric

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Speaker 1: and this that makes this a much better time. Well,

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Speaker 1: is there something that has fundamentally changed in the underlying

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Speaker 1: dynamic of the markets that have people panicking or is

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Speaker 1: this irrational? No? I think it's irrational. You know. I

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Speaker 1: put out a memo UH in January called on the

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Speaker 1: Couch reference the fact that the market needs a trip

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Speaker 1: to the shrink once in a while, And I said

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Speaker 1: in there that what happens in the market is it

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Speaker 1: only looks at the positives, and it interprets everything positively

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Speaker 1: as long as it can, and then it gives up

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Speaker 1: the ghost and it flips one eighty and it starts

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Speaker 1: looking at everything negatively. And I think I date that

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Speaker 1: to late China. There was a big spike in the

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Speaker 1: VIX and China reported bad economic news, declining market, UH

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Speaker 1: surprising devaluation and people freaked out and they and you know,

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Speaker 1: in the in the memo there was a cartoon and

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Speaker 1: a newscaster saying that everything that was good for the

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Speaker 1: market yesterday was bad for it today. And that's the

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Speaker 1: way these things go. No, no, But but the thing

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Speaker 1: is that you know, people are in the market. People

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Speaker 1: are rarely objective, clinical and rational, and they go to

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Speaker 1: extremes and on my opinion, they went from optimistic to pessimistic.

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Speaker 1: Now I'm not saying that I've got to become more

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Speaker 1: pessimistic Michael uh, but I'd rather buy him today than

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Speaker 1: than six months ago. Now, you Bloomberg News notes accurately

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Speaker 1: that you you made a lot of money off an

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Speaker 1: investment with Jeffrey gun Luck when he started a double line.

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Speaker 1: But is the bond market is still going to pay

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Speaker 1: even with Mr Goodluck's wonderful track record. Is a bond

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Speaker 1: market is still gonna pay like it has the last

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Speaker 1: few years? Or now? Is it squeezing out the pennies

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Speaker 1: because we've come so far. I think that a highly

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Speaker 1: skilled manager, which is what I think jeff is, will

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Speaker 1: always be in demand. People have money, they want to

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Speaker 1: turn that money into more money. Hopefully they want to

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Speaker 1: do it safely. The people who can do that will

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Speaker 1: be in demand and their companies will be profitable. By

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Speaker 1: the way, we haven't cashed that investment yet, so you know,

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Speaker 1: this is the This is the this is the appreciation.

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Speaker 1: Some people say we're looking at but we're not. I

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Speaker 1: don't claim to have pocketed that kind of money within

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Speaker 1: within the work and and I know Jeff quite well

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Speaker 1: within his mathiness and the phrase you just use highly skilled.

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Speaker 1: Does the institutional by side in the hedge fund world

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Speaker 1: have the intellectual chops given the competition for yield and

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Speaker 1: spread analysis? There are there a few people like Howard

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Speaker 1: Marks and Jeff Glenn walk out there? Or are you

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Speaker 1: pretty impressed by the intellectual contentency? Um? You know, Tom

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Speaker 1: on average people are average, um and uh. Historically, the

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Speaker 1: average institutional investor, I'm not talking about the bond world.

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Speaker 1: I'm talking about the investment world. The average institutional investor

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Speaker 1: has done about average. Uh. So my comments are with

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Speaker 1: regard to the rare exceptional person, and and I think

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Speaker 1: Jeff is person, and I think that the exceptional person

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Speaker 1: will always uh be successful. What makes an exceptional investor?

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Speaker 1: In my book, the most important thing. Chapter one plug

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Speaker 1: music right, but chapter one says the most important thing

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Speaker 1: is second level thinking, and the exceptional person see thing

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Speaker 1: that the average person doesn't see and sees them differently.

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Speaker 1: And if you want to perform exceptionally, you have to

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Speaker 1: think and see exceptionally. So the first level thinker says

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Speaker 1: it's a great company, you should buy the stock. The

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Speaker 1: second level thinker says, it's a great company, but it's

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Speaker 1: not as great as everybody thinks. You should sell the stock.

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Speaker 1: You see, it's it's like the second derivative been calculus.

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Speaker 1: You have to take your stock is gonna go up

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Speaker 1: because everybody thinks it's great, but I can see the weaknesses.

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Speaker 1: So I'm gonna get on the other side of Howard. Howard,

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Speaker 1: we're a hockey show. What that means is Gretzky went

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Speaker 1: to where the puck was gonna be right. Well, see

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Speaker 1: the basic idea, but within the model that you've god,

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Speaker 1: I would suggest the winners recently have been people with

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Speaker 1: really acute dynamics, taking multi asset and cross asset analysis

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Speaker 1: and being able to look at that and then as

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Speaker 1: you say, filter forward to where we're gonna be. Yeah, Well,

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Speaker 1: Sid Coddle who was a professor at Columbia fifty years ago,

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Speaker 1: said the investment is the discipline of relative selection. In

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Speaker 1: other words, what that's what you're a cross market term.

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Speaker 1: Should everybody read security analysis? Graham dog Coddle, Well, I

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Speaker 1: think they should. Yeah. To me, it's a right of past.

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Speaker 1: You have to read it to understand a more static

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Speaker 1: railroad time. By the way, in oh five or six

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Speaker 1: we reissued the n edition. It's I think the new

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Speaker 1: one is more readable. So I'd recommend that shameless plug

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Speaker 1: while we're paying. Should they read the yield books Sydney

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Speaker 1: and Homer? I think if they want to know how

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Speaker 1: bonds work. If you want it all buds, you got

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Speaker 1: to go back to the seminal literature. Do you know

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Speaker 1: you have to have By the way, you know, my belief,

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Speaker 1: Tom is that most people who participate in the markets

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Speaker 1: don't really understand how profits are made. Uh. They just think, well,

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Speaker 1: you buy something that's gonna go up tomorrow, but you

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Speaker 1: have to know what's gonna make it go up tomorrow

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Speaker 1: in the relative nature. How can we go on like

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Speaker 1: for three hours with Howard and I think we could

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Speaker 1: do Howard Marks, thank you for stopping by today with

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Speaker 1: oak Tree Um, and we didn't even get to the

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Speaker 1: basic idea of coupon or total return within where we

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Speaker 1: are within bonds of features of five, there's just a

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Speaker 1: churn to the screen. Howard Marks taking the rest of

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Speaker 1: the day off thirty six four per barrel and West

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Speaker 1: Texas up cents, Brent crewed up a dollar thirty five

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Speaker 1: six and just again a churn within this, uh the

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Speaker 1: stronger Yeah, and one thirteen eighty nine in the year

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Speaker 1: O one ten eighty three. Now let's check in with

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Speaker 1: Michael bar and get the latest world in national headlines. Michael,

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Speaker 1: my time, Thank you very much. President Barack Obama will

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Speaker 1: announce today they he will be traveling to Cuba in

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Speaker 1: mid March. It will be the first time in almost

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Speaker 1: nine decades that a US president has visited the island.

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Speaker 1: Stomp would be part of a broader trip to Latin America.

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Speaker 1: Vice President Joe Biden says President Obama is looking to

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Speaker 1: nominate someone who's had passed support from Republicans to replace

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Speaker 1: late Supreme Court Justice Anton and Scalia. Biden told Minnesota

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Speaker 1: Public Radio today the president is not going to be

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Speaker 1: able to pick the most liberal jurist in the nation

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Speaker 1: and put them on the court. Republican presidential candidate Donald

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Speaker 1: Trump has a nineteen point lead over Ted Cruz and

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Speaker 1: the latest Bloomberg Politics poll ahead of Saturday South Carolina primary. Meanwhile,

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Speaker 1: Cruz is leading all candidates in the scramble for oil

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Speaker 1: industry campaign cash, surpassing Jeff Bush. Global News twenty four

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Speaker 1: hours a day, powered by our two hundred journalists and

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Speaker 1: more than a hundred fifty news bureaus from around the world.

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Speaker 1: I'm Michael Barr, Mike, Tom and Michael. Thanks so much.

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Speaker 1: Good morning, Bloomber two hundred, Boston nine sixty to bear at,

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Speaker 1: Corey Johnson and Carol Masser come on in an hour.

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Speaker 1: Bloomberg's Surveillance Market Drivers brought you by your Mercedes Benz

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Speaker 1: for a test drive today,