WEBVTT - Lakeview's Scott Rothbort Likes Glaxo and Whole Foods (Audio)

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<v Speaker 1>Global business news twenty four hours a day at Bloomberg

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<v Speaker 1>dot Com, the radio, plus Globolat and on your radio.

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<v Speaker 1>This is a Bloomberg Business Flash from Bloomberg World Headquarters.

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<v Speaker 1>I'm Katherine Calorie. Wall Street is joining the global rally

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<v Speaker 1>for a second day, and the dollar is weakening their

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<v Speaker 1>speculation that policymakers will move to prevent the UK's European

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<v Speaker 1>secession from hampering global growth. The SMP five hundred has

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<v Speaker 1>erased its loss for the year, a Goldman Sachs index

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<v Speaker 1>of the most shortage shares is up the most since

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<v Speaker 1>and Britain's foot SEE one hundred erased its post brexit

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<v Speaker 1>losses with the six point three percent gain over two days.

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<v Speaker 1>We talk the markets every fifteen minutes throughout the trading

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<v Speaker 1>day on Bloomberg Radio. Dow Industrial Average is currently have

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<v Speaker 1>two hundred seventy seven points one point six percent trading

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<v Speaker 1>at seventeen thousand, six hundred eighty seven. SMP five funded

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<v Speaker 1>up thirty four points one point seven percent to two

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<v Speaker 1>thousand seventy NASTACK up eighty eight points one point nine

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<v Speaker 1>percent to forty seven eighty West Texas Intermedia crude oil

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<v Speaker 1>but dollar fifty eight to barrel three point three spout

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<v Speaker 1>gold up five dollars ounce did seventy ten year treasury

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<v Speaker 1>down twelve thirty seconds with the yield of one point

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<v Speaker 1>five zero percent. And that's a bloomberg business flash. Catherine Cownderie,

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<v Speaker 1>thank you so very much. A sharp sell off on Friday,

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<v Speaker 1>three days of gains. Now this week, as markets bounce

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<v Speaker 1>back from the breggsit concerns, is it time to put

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<v Speaker 1>some money into e t s and if so, which kind?

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<v Speaker 1>Let's go back to Katherine County for today's e t

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<v Speaker 1>F report, brought to you by National Realty Providers of

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<v Speaker 1>Satisfaction Guaranteed New York City Realty Investments see them at

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<v Speaker 1>n r i A dot net. Here's Catherine Cowndry now,

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<v Speaker 1>market turmoil can create some opportunities. It did for David Kotak,

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<v Speaker 1>the chairman of Camerland Advisers, in the wake of the

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<v Speaker 1>UK vote to withdraw from the European Union. What do

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<v Speaker 1>we know that will now happen for a long time.

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<v Speaker 1>We're gonna have low, low interest rates longer, longer, longer

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<v Speaker 1>than going to be zero in Japan, zero in Europe.

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<v Speaker 1>After the Brexit vote, investors pushed back. That's on federal

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<v Speaker 1>reserve interest rate increases, pricing in just a ten percent

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<v Speaker 1>chance for higher borrowing costs by February. What does that

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<v Speaker 1>say for housing in the US that's not impacted by Brexit.

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<v Speaker 1>I we took up our weight in the cell off

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<v Speaker 1>in sectors like consumer discretionary in housing. You can be

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<v Speaker 1>opportunistical one side. On the other side, k Talk says

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<v Speaker 1>it's time to reassess other holdings in light of the

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<v Speaker 1>volatility caused by Brexit. Co tox for am uses et

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<v Speaker 1>s to invest in equities. That's your Bloomberg ETF report.

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<v Speaker 1>I'm Catherine Cowdery. You're listening to Taking Stock with Kathleen

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<v Speaker 1>Hayes and Pim Fox on Bloomberg Radio. Brexit took a

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<v Speaker 1>big toll on the stock market on Friday and actually

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<v Speaker 1>also on Monday, two days down now two days up

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<v Speaker 1>for the U S stock market sn P five hundreds

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<v Speaker 1>still though, however, stuck between two thousand, one hundred. It

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<v Speaker 1>seems too many people. So where do we go next?

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<v Speaker 1>Is the Brexit impact going to fade? And what about

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<v Speaker 1>those polls? If you like to watch numbers and stocks

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<v Speaker 1>and think about statistics, why did they go so wrong.

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<v Speaker 1>Scott Rothbort is here to answer all of these questions

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<v Speaker 1>and more, President and founder like you ask that management

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<v Speaker 1>also teaching at Satan University. Niversity, that's right university. So

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<v Speaker 1>we're really glad to have your bas Scott. Let's start

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<v Speaker 1>with Brexit. First of all, you had raised some cash

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<v Speaker 1>prior to the Brexit vote. Why a little bit? Um,

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<v Speaker 1>We just felt that some of our stocks were just

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<v Speaker 1>over extended, and um, we paired back a little bit,

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<v Speaker 1>not a tremendous amount. Do you have any concern about Brexit?

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<v Speaker 1>You know, I really didn't and I still don't have

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<v Speaker 1>any concern about Brexit. And and the reason is because, frankly,

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<v Speaker 1>I've been in this business long enough, and I've seen dislocations,

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<v Speaker 1>and I've gone through things like the Russian coup and

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<v Speaker 1>the invasion of Afghanistan and flash crashes, and we know

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<v Speaker 1>what happens in the long run is that the market,

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<v Speaker 1>while it may correct, it's also self correct in the

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<v Speaker 1>other the other direction, and it'll return to normal. And

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<v Speaker 1>so we expected that once the Brexit vote took place,

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<v Speaker 1>whether it was to remain or to leave, that markets

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<v Speaker 1>would have a reaction and then that reaction would then

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<v Speaker 1>be reversed. So, uh, you teach at Seton Hall University.

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<v Speaker 1>Uh in over there in South Orange, New Jersey, just

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<v Speaker 1>part of the tri state area, the Greater New York

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<v Speaker 1>City metro area. I like to think of it as

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<v Speaker 1>statist statistics. And you're in the world of business and finance.

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<v Speaker 1>What what do you what have you made of the

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<v Speaker 1>wrongness of the polls? Okay? Um? Well, first of all,

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<v Speaker 1>Seaton Hall has a fabulous polling center, sports polling center,

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<v Speaker 1>which I've had the opportunity to participate in from this

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<v Speaker 1>point of view of being able to pull people, and

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<v Speaker 1>of course they we do it based upon some sort

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<v Speaker 1>of you know, sports themed um question. For instance, we

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<v Speaker 1>did a sports poll I think a few months back

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<v Speaker 1>talking about all of these online gambling sites. Um. And

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<v Speaker 1>so I I understand what it is like to put

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<v Speaker 1>together a pole and be on the phone and trying

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<v Speaker 1>to ask people questions and and how you get the

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<v Speaker 1>sampled data. But I don't think that people quite understand

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<v Speaker 1>when they look at political polls these days, that these

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<v Speaker 1>political polls can be crafted in such a way that

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<v Speaker 1>they are pre biased. And there's something else in which

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<v Speaker 1>we have we call observer bias, where actually the person

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<v Speaker 1>who was taking the poll, who's making the observations, can

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<v Speaker 1>actually skew the data and information by the way which

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<v Speaker 1>they ask questions other people they select to answer. I'll

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<v Speaker 1>give you an example. My son UH, and we live

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<v Speaker 1>in Nevada, was phoned up and asked about Uh was

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<v Speaker 1>asked to participate in the poll. He said who he

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<v Speaker 1>would vote for president as being the first question, and

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<v Speaker 1>then he hung up on him didn't complete the poll.

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<v Speaker 1>Now this wasn't a bad line disconnection. Clearly. What happened

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<v Speaker 1>was they didn't like the answer and they were looking

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<v Speaker 1>to get some sort of predetermined response. Another way that

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<v Speaker 1>you can kind of fix the polls, so to speak,

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<v Speaker 1>is you can limit the population of telephone numbers you

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<v Speaker 1>get to certain area codes. So and the other problem

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<v Speaker 1>is that people don't understand that. You know, if you

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<v Speaker 1>do a sample of people and you get them to respond,

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<v Speaker 1>you have a margin of era of three for that. Um. Well, um,

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<v Speaker 1>that may seem like very little, but when you're doing

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<v Speaker 1>a poll for the entire United Kingdom in which thirty

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<v Speaker 1>some odd million people we're going to vote on a

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<v Speaker 1>very important issue, trying to set up a series of

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<v Speaker 1>poles just for a thousand people or or so. It's

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<v Speaker 1>very hard. So the vote is in though, regardless of

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<v Speaker 1>the polls. And you say in a recent piece there's

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<v Speaker 1>a new normal the world will have to face. People

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<v Speaker 1>need to change their premise as investors. What does that mean? Well,

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<v Speaker 1>as investors means that if you have a bias going

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<v Speaker 1>in if you think that, for instance, if your if

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<v Speaker 1>your bias was that the world is going to fall

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<v Speaker 1>apart because of brexit um, and it's not going to

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<v Speaker 1>fall apart, well, then maybe able to take a step

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<v Speaker 1>back and say, well, perhaps I was biased going into that,

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<v Speaker 1>and I didn't do my research, and I've got to

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<v Speaker 1>look at the world a little bit differently. Now. I

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<v Speaker 1>have the advantage of I grew up on the East Coast.

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<v Speaker 1>I grew up in Brooklyn, live in Manhattan, I lived

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<v Speaker 1>in Tokyo, I lived in London. We now live most

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<v Speaker 1>of the time in Henderson, Nevada. UM. So I get

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<v Speaker 1>to speak to people from all around the world. And

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<v Speaker 1>if you speak to people, just for instance, on the coasts,

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<v Speaker 1>they think differently than people who maybe in the Midwest. UM.

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<v Speaker 1>And unfortunately what happens is that people who live on

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<v Speaker 1>the coasts. All right, Well, um, project their opinions about

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<v Speaker 1>the rest of the country and the rest of the

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<v Speaker 1>world based upon how they think. Well that that may

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<v Speaker 1>not necessarily the same. And we're seeing this take place,

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<v Speaker 1>whether it's in terms of the elections or gun control

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<v Speaker 1>or when' that we should have a sugar at tax

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<v Speaker 1>and and so I think what people need to do

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<v Speaker 1>when I say change your premise is understand both sides

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<v Speaker 1>of the argument. Well, that makes sense because this presidential

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<v Speaker 1>election to the United States is going to be potentially

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<v Speaker 1>a very big deal. I want to ask about a

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<v Speaker 1>couple of individual stocks though, Um, you also said this

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<v Speaker 1>note that you took advantage of the panic to buy

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<v Speaker 1>some shares of Glaxo smith Klin. Of course that's a

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<v Speaker 1>big British pharmaceuticals company. Is that something other people should

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<v Speaker 1>be looking at or is it more just a post

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<v Speaker 1>Brexit vote trade. Well, we had a wonderful opportunity to bide,

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<v Speaker 1>especially in the pre market on on the Brexit panic day, um,

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<v Speaker 1>which was Friday. Uh and uh. We saw that the

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<v Speaker 1>price of the A d r s went down because

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<v Speaker 1>the price of Glaxo stock in the UK went down,

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<v Speaker 1>but also because the strength and dollars, so you've got

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<v Speaker 1>a will benefit, so to speak, if you're out there

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<v Speaker 1>buying stock. Um. But we thought the stock was cheap enough.

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<v Speaker 1>We liked the dividend, so we bought it both for

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<v Speaker 1>our growth portfolios but also for our dividend value portfolios.

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<v Speaker 1>And if anything, UM, when I look at a stock

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<v Speaker 1>like glack Cell, which makes pharmaceuticals, I think that that

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<v Speaker 1>is somewhat more protected than from the potential Breggxit problem

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<v Speaker 1>because everybody needs pharmaceuticals around the world, and they also

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<v Speaker 1>have patents. If we're talking about an industrial company, UM

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<v Speaker 1>that's maybe making widgets, let's say, as we say in academia,

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<v Speaker 1>then maybe I wouldn't want to buy a British widget company.

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<v Speaker 1>Buy amongst the briggs it rubble. You wrote about this

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<v Speaker 1>yesterday Whole Foods. Why and if there's no the brigsit

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<v Speaker 1>rubble clears up a bit, is a whole food still

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<v Speaker 1>a buy? Well, Well, we saw a break and with

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<v Speaker 1>whole foods and few things and and and as you

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<v Speaker 1>know I follow food and restaurant stocks. We talked about

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<v Speaker 1>this quite often on Bloomberg and by you talked about

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<v Speaker 1>my commentary of people can get my commentary for free

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<v Speaker 1>on www dot Lakeview Asset dot com and we call

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<v Speaker 1>it my gut feeling, uh, and I published it a

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<v Speaker 1>few times a week. But I've had my eyron Whole Foods.

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<v Speaker 1>I've been out of the stock over the years, and

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<v Speaker 1>it's got clawbered recently, really clobert um. They've had some problems, uh,

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<v Speaker 1>some operational problems. Their margins have contracted, Uh, growth slowed

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<v Speaker 1>down a little bit, and the stock has come down

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<v Speaker 1>tremendously this year. Uh. The stock went x dividend this week.

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<v Speaker 1>We start an opportunity by it before it went ex dividend.

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<v Speaker 1>And also what we noticed was that when all this

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<v Speaker 1>fallout from the brigit was taking place, that actually Whole

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<v Speaker 1>Foods was going up, was doing much better. So I

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<v Speaker 1>was being a little contrayed and said, well, people need

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<v Speaker 1>still need to buy food. We heard about the sugar

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<v Speaker 1>tacks in Philadelphia. Let's step up and buy some cheap

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<v Speaker 1>Whole foods. Well, congratulations Mr Rockport, the finance professor, and

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<v Speaker 1>he just told you how you can follow his very

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<v Speaker 1>interesting commentary. He's present Founder lake Usset Management professor at

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<v Speaker 1>Seton Hall University in New Jersey. I'm Kathleen Hayes, this

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<v Speaker 1>is taking stock on Bloomberg Radio. Yeah,