1 00:00:00,040 --> 00:00:03,120 Speaker 1: Let's get to our guest, George Ball, CEO at Sanders 2 00:00:03,200 --> 00:00:06,840 Speaker 1: Morris Harris, George, I know you're a bottom up investor, 3 00:00:07,080 --> 00:00:08,480 Speaker 1: but I got to talk to you a little bit 4 00:00:08,520 --> 00:00:12,040 Speaker 1: about sort of the general signals coming from earnings. The 5 00:00:12,080 --> 00:00:16,440 Speaker 1: snapping Seagate earnings last week and then Walmart today seem 6 00:00:16,520 --> 00:00:18,919 Speaker 1: to have cast a little bit of a paul on 7 00:00:18,920 --> 00:00:22,880 Speaker 1: on sentiment too many. The six percent bounce that we've 8 00:00:22,920 --> 00:00:25,759 Speaker 1: seen in the SNP five here over the past couple 9 00:00:25,800 --> 00:00:28,640 Speaker 1: of weeks feels a little bit shaky your thoughts on 10 00:00:28,680 --> 00:00:35,400 Speaker 1: what to expect going forward. It's always uh long odds 11 00:00:35,440 --> 00:00:38,520 Speaker 1: to bet against Ed Yardenny and I heard just a 12 00:00:38,520 --> 00:00:41,720 Speaker 1: prior segment that Ed thinks we may have reached reached 13 00:00:41,720 --> 00:00:45,319 Speaker 1: the bottom. I will, for this one time say that 14 00:00:45,479 --> 00:00:50,680 Speaker 1: I don't think that the market is in a bull 15 00:00:50,760 --> 00:00:55,880 Speaker 1: phase yet. Uh. You get relief rallies which become belief rallies, 16 00:00:56,240 --> 00:00:59,720 Speaker 1: but this one I don't think is anything more than 17 00:00:59,760 --> 00:01:04,640 Speaker 1: our leaf, which becomes a bit of a belief rally 18 00:01:04,720 --> 00:01:09,120 Speaker 1: and suckers people into making bigger equity commitments than they 19 00:01:09,120 --> 00:01:13,240 Speaker 1: would otherwise. Uh. There's an old country song called I 20 00:01:13,319 --> 00:01:16,520 Speaker 1: was looking for Love in all the wrong places. I 21 00:01:16,560 --> 00:01:20,639 Speaker 1: think many investors right now are looking at the wrong things. 22 00:01:20,959 --> 00:01:24,360 Speaker 1: They're looking at the FED on on Wednesday seventy five 23 00:01:24,440 --> 00:01:27,240 Speaker 1: basis points. If it's not that it would be a shock, 24 00:01:27,480 --> 00:01:32,480 Speaker 1: it will be seventy basis points. Inflation is still running hot, 25 00:01:32,800 --> 00:01:37,400 Speaker 1: even though gas prices are down some what. But the 26 00:01:37,640 --> 00:01:41,880 Speaker 1: big indicator going forward is not going to be the 27 00:01:41,920 --> 00:01:46,399 Speaker 1: earnings for the second quarter, for the quarter past, but 28 00:01:46,600 --> 00:01:50,640 Speaker 1: rather what companies are saying about the next couple of quarters, 29 00:01:50,720 --> 00:01:55,200 Speaker 1: and by and large that's very negative. And I'll underscore 30 00:01:55,280 --> 00:02:00,520 Speaker 1: today what Walmart said. Things don't look good going going ahead. 31 00:02:00,600 --> 00:02:05,040 Speaker 1: So right now, the economy is all right in the 32 00:02:05,080 --> 00:02:09,359 Speaker 1: first and second quarter, the companies realistically looking into the 33 00:02:09,360 --> 00:02:13,480 Speaker 1: third fourth quarter to the start of see a fairly 34 00:02:13,560 --> 00:02:16,760 Speaker 1: bleak future. And that's not good for stock prices, particularly 35 00:02:16,760 --> 00:02:21,399 Speaker 1: when we've got a pall of fairly negative psychology. Well, 36 00:02:21,440 --> 00:02:23,520 Speaker 1: that's right, George, Steve Angle here. Would you go as 37 00:02:23,560 --> 00:02:25,160 Speaker 1: far as to say that this is a make or 38 00:02:25,200 --> 00:02:27,800 Speaker 1: break period this week because of the FED, because of 39 00:02:27,800 --> 00:02:32,840 Speaker 1: the tech earnings that are out for investor confidence, Uh, 40 00:02:33,400 --> 00:02:41,160 Speaker 1: it's certainly a make or been been very very violently. Uh. Again, 41 00:02:41,760 --> 00:02:44,560 Speaker 1: I would focus on what companies believe is going to 42 00:02:44,639 --> 00:02:48,360 Speaker 1: happen going forward as opposed to what's been the case 43 00:02:48,639 --> 00:02:51,280 Speaker 1: in the past. And I think many of the tech companies, 44 00:02:51,639 --> 00:02:54,800 Speaker 1: many of the retailers, many of the core of America, 45 00:02:54,960 --> 00:02:57,480 Speaker 1: I think things are going to be worse. So George, 46 00:02:57,560 --> 00:02:59,640 Speaker 1: just before the break, we were of course talking about 47 00:02:59,639 --> 00:03:06,200 Speaker 1: their season, and Doug just rehighlighted the warning coming from Walmart. 48 00:03:06,800 --> 00:03:09,120 Speaker 1: You know, it is an interesting week obviously with a 49 00:03:09,160 --> 00:03:11,720 Speaker 1: feed on Wednesday, but also we're getting inventories and durable 50 00:03:11,760 --> 00:03:15,400 Speaker 1: goods data on Wednesday. Should that help clarify, you know, 51 00:03:15,680 --> 00:03:20,239 Speaker 1: across corporate America, like what Walmart reported with their bloated inventories, 52 00:03:20,600 --> 00:03:25,519 Speaker 1: whether a recession is indeed at hand, it should probably 53 00:03:26,160 --> 00:03:30,920 Speaker 1: help to clarify it. But there are some indicators coming 54 00:03:30,919 --> 00:03:34,840 Speaker 1: out from other parts of the world that I think 55 00:03:35,480 --> 00:03:41,920 Speaker 1: maybe more indicative. Uh. In Germany, scent of the companies 56 00:03:42,280 --> 00:03:49,160 Speaker 1: said they've cut back on neither their production or their 57 00:03:49,320 --> 00:03:54,560 Speaker 1: service outputs as a result of energy prices and the 58 00:03:54,600 --> 00:04:00,720 Speaker 1: inability to hire workers and or higher wages. So our 59 00:04:00,760 --> 00:04:04,360 Speaker 1: economy on the business side very similar to Germany's, and 60 00:04:04,680 --> 00:04:08,120 Speaker 1: I think you're going to see more and more of 61 00:04:08,560 --> 00:04:12,840 Speaker 1: corporate Bedrock America saying we have to we can't produce 62 00:04:12,880 --> 00:04:16,320 Speaker 1: as much, We can't handle as many customers. Prices are 63 00:04:17,040 --> 00:04:20,159 Speaker 1: too high, the cost of labor, the availability of labor 64 00:04:20,480 --> 00:04:25,479 Speaker 1: is too scarce. Uh. And that that's going to start 65 00:04:25,520 --> 00:04:28,800 Speaker 1: showing up more and more in our numbers, some of 66 00:04:28,839 --> 00:04:31,960 Speaker 1: them in the inventory numbers that are coming up, and 67 00:04:32,000 --> 00:04:34,000 Speaker 1: then some of them I think in the hiring and 68 00:04:34,080 --> 00:04:37,040 Speaker 1: job figures that will be seen later this week and 69 00:04:37,160 --> 00:04:41,359 Speaker 1: next week. George, you're a stock picker. I highlighted that 70 00:04:41,400 --> 00:04:43,240 Speaker 1: because I thought this might be an environment that you 71 00:04:43,240 --> 00:04:46,400 Speaker 1: actually like quite a lot. The macro feels and looks 72 00:04:46,480 --> 00:04:49,160 Speaker 1: kind of bad, but some companies I mentioned an XP 73 00:04:49,279 --> 00:04:53,880 Speaker 1: Semiconductor they raised their forecast, and Whirlpool not as bad 74 00:04:53,920 --> 00:04:56,200 Speaker 1: as fear. There are some companies that seem to be 75 00:04:56,560 --> 00:04:59,480 Speaker 1: doing okay in this um. Are you chasing a few 76 00:04:59,480 --> 00:05:04,839 Speaker 1: of them? Uh? I would hate to use the word chasing? 77 00:05:05,400 --> 00:05:11,040 Speaker 1: Uh I Uh? Are are they alluring? And I'm hoping 78 00:05:11,040 --> 00:05:13,760 Speaker 1: that they'll come back to me? Yes? In the here 79 00:05:13,800 --> 00:05:19,360 Speaker 1: and now. The master limited partner sector is very attractive 80 00:05:19,400 --> 00:05:22,920 Speaker 1: because it represents energy which is apt to be strong, 81 00:05:24,080 --> 00:05:29,480 Speaker 1: both relative and absolute. Second, the yields seven percent and higher. 82 00:05:29,520 --> 00:05:35,359 Speaker 1: For for example, enterprise products have an inflation offset in 83 00:05:35,440 --> 00:05:39,360 Speaker 1: most of their contracts, so if inflation continues, the prices 84 00:05:39,720 --> 00:05:44,040 Speaker 1: UH contractually being charged by the master limited partnerships go up, 85 00:05:44,279 --> 00:05:47,240 Speaker 1: and they're therefore at least economically UH and off the 86 00:05:47,320 --> 00:05:50,880 Speaker 1: good hedge. Third, I do think that there are some 87 00:05:51,040 --> 00:05:55,400 Speaker 1: smaller tech companies, not the fangs, that are going to 88 00:05:55,520 --> 00:05:59,760 Speaker 1: continue to grow very rapidly. They're down by a lot 89 00:05:59,760 --> 00:06:03,600 Speaker 1: that Eistically, they're not nearly as expensive as they were before. 90 00:06:04,240 --> 00:06:07,599 Speaker 1: Go Daddy would be one, uh T Mobile would be another. 91 00:06:07,920 --> 00:06:10,359 Speaker 1: And those are things that I would again rather have 92 00:06:10,480 --> 00:06:15,320 Speaker 1: the prices come back to me rather than to chase them. Well, George, 93 00:06:15,360 --> 00:06:19,880 Speaker 1: a lot of speculators definitely chased crypto assets during its heyday. 94 00:06:19,920 --> 00:06:23,360 Speaker 1: Are you do you think investors should start looking at 95 00:06:23,360 --> 00:06:27,440 Speaker 1: it at these levels? Again? Yes, I do it in 96 00:06:27,480 --> 00:06:30,880 Speaker 1: a different way. I was a crypto bull at a 97 00:06:31,240 --> 00:06:34,960 Speaker 1: a immodestly at a very good time. UH. I don't 98 00:06:34,960 --> 00:06:37,960 Speaker 1: think one would be smart to try to pick the 99 00:06:38,040 --> 00:06:40,640 Speaker 1: bottom for crypto, but rather look at it the other 100 00:06:40,640 --> 00:06:44,360 Speaker 1: way around. As crypto goes up, as it started to now, 101 00:06:44,640 --> 00:06:46,960 Speaker 1: and as it goes up more I think for the 102 00:06:47,080 --> 00:06:51,479 Speaker 1: speculator and for the investor, it's a place where uh 103 00:06:51,520 --> 00:06:54,880 Speaker 1: AS prices get higher than some of the washout and 104 00:06:55,000 --> 00:07:00,400 Speaker 1: some of the irregularities that that that marred the unders 105 00:07:00,520 --> 00:07:05,720 Speaker 1: and the stable coins are in the past. That cryptocurrencies 106 00:07:05,920 --> 00:07:09,600 Speaker 1: will do very well compared to equities or compared to 107 00:07:09,720 --> 00:07:12,720 Speaker 1: just cash. So crypto on the way up, I think, 108 00:07:12,800 --> 00:07:15,800 Speaker 1: is a place where one could take a small speculative 109 00:07:15,800 --> 00:07:20,280 Speaker 1: position expect to be rewarded. All right, Thanks so much, George. 110 00:07:20,440 --> 00:07:23,760 Speaker 1: Always a pleasure to have you on. George Ball, CEO 111 00:07:23,840 --> 00:07:27,440 Speaker 1: at Sanders Morris Harris with us here live on the program.