WEBVTT - Global Risk's Won Cautions Against Brexit Overreaction (Audio)

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<v Speaker 1>Broadcasting live to New York, Bloomberg eleven Rio to Washington,

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<v Speaker 1>d C. Bloomberg to Boston, Bloomberg twelve hundreds to San Francisco,

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<v Speaker 1>Bloomberg nine to the countries sees Exam General one nine team,

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<v Speaker 1>and around the globe the Bloomberg Radio Plus Athen Bloomberg

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<v Speaker 1>dot Gone. This is taking Stock, coming up on taking stock,

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<v Speaker 1>a look at the European Union and the risks for

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<v Speaker 1>your portfolio. Are their models for other countries leaving the

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<v Speaker 1>European Union and what that would do to your money?

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<v Speaker 1>We'll find out more. We're gonna We're gonna be speaking

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<v Speaker 1>with Sam Juan. He's founder and managing director of Global

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<v Speaker 1>Risk Management Advisors PAM. I wonder what he'll have to

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<v Speaker 1>say about Bill Gross of Jane's Capital Management, saying that

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<v Speaker 1>he is sniffing out some rather bear Stearns kind of

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<v Speaker 1>uh vibe from what's happening UK property market. That could

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<v Speaker 1>be a risk. Let's go to Katherine Cadry. Now, no

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<v Speaker 1>risk there, she's in the Bloomberg news room with the

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<v Speaker 1>Bloomberg Business Flash. Thank you. Kathleen was stock selled down

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<v Speaker 1>to their games after a minute of last month's federal

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<v Speaker 1>Reserve Policy meeting, so almost all officials present indicated May's

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<v Speaker 1>weak employment report added to economic uncertainty. Bloomberg has been

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<v Speaker 1>adel Judas has the details of those f o MC minutes.

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<v Speaker 1>Central bankers aired on the side of portion and holding

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<v Speaker 1>their benchmark interest rate steady. The labor market slowdown was

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<v Speaker 1>chief among their concerns make job growth with the weakest

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<v Speaker 1>in almost six years. FED officials also sought prudent to

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<v Speaker 1>wait for the results of Britain's EU referendum, which at

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<v Speaker 1>the time was too close to call. The Fence Policy

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<v Speaker 1>Panel next meets July twenty seven. At the Bloomberg First

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<v Speaker 1>Woraddest Company Dell shoot Ice, Bloomberg Radio, Bloomberg Radio and TV.

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<v Speaker 1>Bill Grows Fund, manager of Jannis Capital Management, was asked

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<v Speaker 1>if anything surprised him in those FED minutes. Will not

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<v Speaker 1>much pipe. Yes, they reach an employment uncertainties and we

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<v Speaker 1>know that's probably because of the lower job totals. Will

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<v Speaker 1>no more on farther loon't wait, and that's when the

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<v Speaker 1>Labor Department will release its June jobs report. We talk

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<v Speaker 1>the markets every fifteen minutes throughout the rating day. Del

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<v Speaker 1>Industrial LeVert is up forty six points a quarter percent,

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<v Speaker 1>trading at seventeen thousand, eight hundred eighty six. SMP five

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<v Speaker 1>funded up seven points a third of a percent at

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<v Speaker 1>two thousand ninety five and as dat is up twenty

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<v Speaker 1>six points. That's a gain of half a percent. It's

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<v Speaker 1>rating at forty eight forty nine less. Texas Intermedia crude

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<v Speaker 1>oil up sixty five cents a barrel one point four

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<v Speaker 1>percent to forty seven twenty five s about gold up

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<v Speaker 1>eight dollar seventy cents. Announced of thirteen sixty seven fifty

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<v Speaker 1>ten year treasury holding study with the yield of one

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<v Speaker 1>point three seven percent. Among today's How Business stories, two

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<v Speaker 1>more UK property funds have halted withdrawals in the wake

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<v Speaker 1>of Britain's decision to leave the European Union. That brings

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<v Speaker 1>a total number to five. And now let's get enough

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<v Speaker 1>date of some of the other stories were following today

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<v Speaker 1>on Bloomberg Radio. Thank you, Catherine from the Bloomberg Newsroom.

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<v Speaker 1>I'm Jill Schneider. HOW speaker Paul Ryan says a lot

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<v Speaker 1>of questions still need to be answered about Hillary Clinton's

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<v Speaker 1>use of a private email server while she was Secretary

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<v Speaker 1>of State and the FBI investigation into it. FBI Director

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<v Speaker 1>James Comey has been summoned to testify before the House

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<v Speaker 1>Oversight Committee tomorrow, and the House Judiciary Panel has scheduled

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<v Speaker 1>hearing for next week with Attorney General Lauretta Lynch. Ryan

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<v Speaker 1>says Clinton has offered quote, nothing but stonewalling and dishonesty

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<v Speaker 1>on the issue and appears to have received preferential treatment

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<v Speaker 1>from the FBI. Tennessee Republican Senator Bob Corker withdrew himself

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<v Speaker 1>today from consideration as a possible running mate for Donald Trump.

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<v Speaker 1>I know what I'm good at, and I feel like

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<v Speaker 1>I'm better suited for other kinds of things, and I

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<v Speaker 1>think they're probably better suiting people for this for them.

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<v Speaker 1>When asked for his opinion on who Trump should pick,

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<v Speaker 1>Corker said, although he knows it would not be a

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<v Speaker 1>popular opinion, he believes Trump's ex wife, Ivanka would be

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<v Speaker 1>the right person for the job. President Obama will slow

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<v Speaker 1>down the U. S. Troop withdrawal from Afghanistan. Instead of

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<v Speaker 1>going down to troops by the end of this year,

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<v Speaker 1>the United States will make saying approximately eight four hundred

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<v Speaker 1>troops in Afghanistan into next year. Through the end of

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<v Speaker 1>my administration. The President also says the Taliban is still

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<v Speaker 1>a threat. If you've been outside today, you probably don't

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<v Speaker 1>need us to tell you, but it's a scorcher here

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<v Speaker 1>in the city. Temperatures have topped the ninety degree mark.

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<v Speaker 1>The intense heat is expected to last three days. Global

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<v Speaker 1>News twenty four hours a day, powered by more than

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<v Speaker 1>twenty six hundred journalists and analysts in more than one

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<v Speaker 1>hundred twenty countries. From the Bloomberg News Room. I'm Jill Schneider. Katherine,

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<v Speaker 1>thank you. Now, let's get an update of those equity

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<v Speaker 1>benchmarks down. Industrial leverage up forty eight points to seventeen thousand,

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<v Speaker 1>eight hundred eighty nine. SMP five founded up seven points

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<v Speaker 1>in two thousand ninety five, nastack higher by twenty eight

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<v Speaker 1>points at eight fifty. And that's a Bloomberg business flash

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<v Speaker 1>you're listening to taking start with Kathleen Hays and Pim

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<v Speaker 1>Fox on Bloomberg Radio. The pounds sterling plunges further, trading

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<v Speaker 1>at one nine thirty six versus the US dollar, Japan's

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<v Speaker 1>twenty year bond deal turns negative, and more UK property

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<v Speaker 1>funds suspend trading. These are all risks that you need

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<v Speaker 1>to take into consideration when managing money. Samuel Juan is

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<v Speaker 1>the founder and the managing director of Global Risk Management Advisors.

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<v Speaker 1>He joins us now. Sam Juan, thanks very much for

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<v Speaker 1>coming in and what if you could tell people what

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<v Speaker 1>is Global Risk Management Advisors and what do you actually

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<v Speaker 1>do who some of your customers? UM? Well, I started

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<v Speaker 1>the firm UM right on the heels of the financial

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<v Speaker 1>crisis to help both asset managers and institutional investors with

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<v Speaker 1>investment risk management. And about a third of our work

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<v Speaker 1>is what some people who think of risk management. It

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<v Speaker 1>is very quantitative, it is very geeky, and we try

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<v Speaker 1>to use very sophisticated modeling and math to figure out

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<v Speaker 1>what the risks are in your portfolio and what the

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<v Speaker 1>potential losses are. But two thirds of the majority of

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<v Speaker 1>the work that we do is really around good government,

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<v Speaker 1>good processes, good controls, good strategy, because that's really at

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<v Speaker 1>the end of the day. But what Trump's and one

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<v Speaker 1>is the most important thing in terms of UH descending

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<v Speaker 1>order of what institutions do. And as I mentioned, we

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<v Speaker 1>work with UH institutional investors such as endowments and pensions foundations,

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<v Speaker 1>and we work with asset managers heavy concentration of alternative

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<v Speaker 1>managers and imagine the phone ringing off the hook because

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<v Speaker 1>people are wondering, Okay, bregsit, what do I stay away from?

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<v Speaker 1>Where is there something I should be getting rid of

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<v Speaker 1>quickly that I didn't already get rid of before the vote,

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<v Speaker 1>and or is there something I should be getting ready

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<v Speaker 1>to leap in and buy? Where do you start with

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<v Speaker 1>that analysis? Uh? We think it's important. So if we

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<v Speaker 1>take an institutional industrial like a pension or a foundation

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<v Speaker 1>or endowment, UM, those institutions are fortunate that they can

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<v Speaker 1>take a relatively longer term view, and so we think

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<v Speaker 1>it's very important that they stick to a plan and

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<v Speaker 1>that plan and starts with their investment policy statement and

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<v Speaker 1>the risk policy guidelines. We think it does make sense

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<v Speaker 1>to assess what impact the portfolio has had near term

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<v Speaker 1>from Brexit as well as what it may look medium

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<v Speaker 1>term and long term to to, you know, figure out

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<v Speaker 1>whether there should be any strategical, strategic or tactical changes

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<v Speaker 1>they need to make. One thing we've been advising investors,

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<v Speaker 1>and this applies to just retailer John Q Public as

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<v Speaker 1>well is UM We caution that people should not overreact,

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<v Speaker 1>especially given the fact that two thousand eight is still

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<v Speaker 1>fresh on many people's minds, and that is we think

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<v Speaker 1>a very important lesson learned. SAM. If there is a

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<v Speaker 1>money manager who blames poor performance on Brexit, should you

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<v Speaker 1>go looking for another money manager? Are there ways to

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<v Speaker 1>have mitigated the risk? UM. If you look at the

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<v Speaker 1>first few days following Brittain Britain's decision to exit the EU, UH,

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<v Speaker 1>and you look at the proverbial winners and losers, the

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<v Speaker 1>majority of the people were, whether the professional or amateur

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<v Speaker 1>investor losers, meaning that when all the markets are down,

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<v Speaker 1>most people are long the market and so there's no

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<v Speaker 1>place for cover. The exception to that where people, of

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<v Speaker 1>course who UH might have been UM long some of

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<v Speaker 1>the flight to safety kind of things such as US

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<v Speaker 1>or Japanese bonds or speculative investments such as gold UM,

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<v Speaker 1>but there are very very few winners who anticipated UM Brexit.

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<v Speaker 1>We think in terms of assessing UM, you know your investments,

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<v Speaker 1>it would be foolish to look at it just through

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<v Speaker 1>the filter of Brexit. Certainly, if your investments are eurocentric UM,

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<v Speaker 1>that should give you pause to UH look for opportunities

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<v Speaker 1>to diminish that concentration risk and diversify. But other than that,

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<v Speaker 1>we think that people should um uh, you know, be

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<v Speaker 1>vigilant about assessing their portfolio, watching it and looking at

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<v Speaker 1>the and trying to understand the broader economic and political implications.

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<v Speaker 1>And I think that's something that is the forest from

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<v Speaker 1>the trees that gets lost because there's so people, so

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<v Speaker 1>many people get focused on what's going up and what's

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<v Speaker 1>going down? Okay, so what are what is? What is

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<v Speaker 1>the broader global implication and what does it mean for portfolios?

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<v Speaker 1>As you've in the time you've spent last couple of

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<v Speaker 1>weeks looking at the Briggs that vote, what are what

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<v Speaker 1>a couple of the key themes that emerge with people

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<v Speaker 1>to be aware of the key themes to look at.

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<v Speaker 1>As an example, is um is um um the UK's

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<v Speaker 1>separation with the EU? What ramifications is that going to

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<v Speaker 1>have trade within the eurozone? Um? What is that going

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<v Speaker 1>to do for to the extent that investors are invested

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<v Speaker 1>in companies that are within the foot see one hundred,

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<v Speaker 1>what are the implications? So as an example, one of

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<v Speaker 1>the questions I've imposed in the last couple of days is,

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<v Speaker 1>given brexit, how can you explain the foots on being

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<v Speaker 1>up so that's a you know, a paradox, and in

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<v Speaker 1>the near term our answer to that is as follows.

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<v Speaker 1>Number one, UM, you know, some of it is just

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<v Speaker 1>relief from the fact that UM, the UK has not

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<v Speaker 1>exercised Article fifty yet. Secondly, if you look at the

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<v Speaker 1>composition of the companies within the foots you one hundred

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<v Speaker 1>more than seventy seven percent of them are multinationals who

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<v Speaker 1>garner majority of the revenue outside the UK and as such,

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<v Speaker 1>UM they're making money that's worth more UH in local

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<v Speaker 1>currency terms the pound. All right, saman want thank you

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<v Speaker 1>so much for joining us. His founder and managing director,

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<v Speaker 1>Global Risk Management Advisors right here in New York City.

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<v Speaker 1>Don't overreact to brexit, step back. Are your investment zero centric?

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<v Speaker 1>Maybe you need a broader view. This is Bloomberg coming

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<v Speaker 1>upon taking stock. We'll be speaking with a global macro

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<v Speaker 1>trader and an in house analyst for Vine Street Trading.

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<v Speaker 1>They focus on electronic futures markets who've got details ahead