Speaker 1: Global business news twenty four hours a day at Bloomberg
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Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.
Speaker 1: I'm Katherine Calorie. Wall Street is joining the global rally
Speaker 1: for a second day, and the dollar is weakening their
Speaker 1: speculation that policymakers will move to prevent the UK's European
Speaker 1: secession from hampering global growth. The SMP five hundred has
Speaker 1: erased its loss for the year, a Goldman Sachs index
Speaker 1: of the most shortage shares is up the most since
Speaker 1: and Britain's foot SEE one hundred erased its post brexit
Speaker 1: losses with the six point three percent gain over two days.
Speaker 1: We talk the markets every fifteen minutes throughout the trading
Speaker 1: day on Bloomberg Radio. Dow Industrial Average is currently have
Speaker 1: two hundred seventy seven points one point six percent trading
Speaker 1: at seventeen thousand, six hundred eighty seven. SMP five funded
Speaker 1: up thirty four points one point seven percent to two
Speaker 1: thousand seventy NASTACK up eighty eight points one point nine
Speaker 1: percent to forty seven eighty West Texas Intermedia crude oil
Speaker 1: but dollar fifty eight to barrel three point three spout
Speaker 1: gold up five dollars ounce did seventy ten year treasury
Speaker 1: down twelve thirty seconds with the yield of one point
Speaker 1: five zero percent. And that's a bloomberg business flash. Catherine Cownderie,
Speaker 1: thank you so very much. A sharp sell off on Friday,
Speaker 1: three days of gains. Now this week, as markets bounce
Speaker 1: back from the breggsit concerns, is it time to put
Speaker 1: some money into e t s and if so, which kind?
Speaker 1: Let's go back to Katherine County for today's e t
Speaker 1: F report, brought to you by National Realty Providers of
Speaker 1: Satisfaction Guaranteed New York City Realty Investments see them at
Speaker 1: n r i A dot net. Here's Catherine Cowndry now,
Speaker 1: market turmoil can create some opportunities. It did for David Kotak,
Speaker 1: the chairman of Camerland Advisers, in the wake of the
Speaker 1: UK vote to withdraw from the European Union. What do
Speaker 1: we know that will now happen for a long time.
Speaker 1: We're gonna have low, low interest rates longer, longer, longer
Speaker 1: than going to be zero in Japan, zero in Europe.
Speaker 1: After the Brexit vote, investors pushed back. That's on federal
Speaker 1: reserve interest rate increases, pricing in just a ten percent
Speaker 1: chance for higher borrowing costs by February. What does that
Speaker 1: say for housing in the US that's not impacted by Brexit.
Speaker 1: I we took up our weight in the cell off
Speaker 1: in sectors like consumer discretionary in housing. You can be
Speaker 1: opportunistical one side. On the other side, k Talk says
Speaker 1: it's time to reassess other holdings in light of the
Speaker 1: volatility caused by Brexit. Co tox for am uses et
Speaker 1: s to invest in equities. That's your Bloomberg ETF report.
Speaker 1: I'm Catherine Cowdery. You're listening to Taking Stock with Kathleen
Speaker 1: Hayes and Pim Fox on Bloomberg Radio. Brexit took a
Speaker 1: big toll on the stock market on Friday and actually
Speaker 1: also on Monday, two days down now two days up
Speaker 1: for the U S stock market sn P five hundreds
Speaker 1: still though, however, stuck between two thousand, one hundred. It
Speaker 1: seems too many people. So where do we go next?
Speaker 1: Is the Brexit impact going to fade? And what about
Speaker 1: those polls? If you like to watch numbers and stocks
Speaker 1: and think about statistics, why did they go so wrong.
Speaker 1: Scott Rothbort is here to answer all of these questions
Speaker 1: and more, President and founder like you ask that management
Speaker 1: also teaching at Satan University. Niversity, that's right university. So
Speaker 1: we're really glad to have your bas Scott. Let's start
Speaker 1: with Brexit. First of all, you had raised some cash
Speaker 1: prior to the Brexit vote. Why a little bit? Um,
Speaker 1: We just felt that some of our stocks were just
Speaker 1: over extended, and um, we paired back a little bit,
Speaker 1: not a tremendous amount. Do you have any concern about Brexit?
Speaker 1: You know, I really didn't and I still don't have
Speaker 1: any concern about Brexit. And and the reason is because, frankly,
Speaker 1: I've been in this business long enough, and I've seen dislocations,
Speaker 1: and I've gone through things like the Russian coup and
Speaker 1: the invasion of Afghanistan and flash crashes, and we know
Speaker 1: what happens in the long run is that the market,
Speaker 1: while it may correct, it's also self correct in the
Speaker 1: other the other direction, and it'll return to normal. And
Speaker 1: so we expected that once the Brexit vote took place,
Speaker 1: whether it was to remain or to leave, that markets
Speaker 1: would have a reaction and then that reaction would then
Speaker 1: be reversed. So, uh, you teach at Seton Hall University.
Speaker 1: Uh in over there in South Orange, New Jersey, just
Speaker 1: part of the tri state area, the Greater New York
Speaker 1: City metro area. I like to think of it as
Speaker 1: statist statistics. And you're in the world of business and finance.
Speaker 1: What what do you what have you made of the
Speaker 1: wrongness of the polls? Okay? Um? Well, first of all,
Speaker 1: Seaton Hall has a fabulous polling center, sports polling center,
Speaker 1: which I've had the opportunity to participate in from this
Speaker 1: point of view of being able to pull people, and
Speaker 1: of course they we do it based upon some sort
Speaker 1: of you know, sports themed um question. For instance, we
Speaker 1: did a sports poll I think a few months back
Speaker 1: talking about all of these online gambling sites. Um. And
Speaker 1: so I I understand what it is like to put
Speaker 1: together a pole and be on the phone and trying
Speaker 1: to ask people questions and and how you get the
Speaker 1: sampled data. But I don't think that people quite understand
Speaker 1: when they look at political polls these days, that these
Speaker 1: political polls can be crafted in such a way that
Speaker 1: they are pre biased. And there's something else in which
Speaker 1: we have we call observer bias, where actually the person
Speaker 1: who was taking the poll, who's making the observations, can
Speaker 1: actually skew the data and information by the way which
Speaker 1: they ask questions other people they select to answer. I'll
Speaker 1: give you an example. My son UH, and we live
Speaker 1: in Nevada, was phoned up and asked about Uh was
Speaker 1: asked to participate in the poll. He said who he
Speaker 1: would vote for president as being the first question, and
Speaker 1: then he hung up on him didn't complete the poll.
Speaker 1: Now this wasn't a bad line disconnection. Clearly. What happened
Speaker 1: was they didn't like the answer and they were looking
Speaker 1: to get some sort of predetermined response. Another way that
Speaker 1: you can kind of fix the polls, so to speak,
Speaker 1: is you can limit the population of telephone numbers you
Speaker 1: get to certain area codes. So and the other problem
Speaker 1: is that people don't understand that. You know, if you
Speaker 1: do a sample of people and you get them to respond,
Speaker 1: you have a margin of era of three for that. Um. Well, um,
Speaker 1: that may seem like very little, but when you're doing
Speaker 1: a poll for the entire United Kingdom in which thirty
Speaker 1: some odd million people we're going to vote on a
Speaker 1: very important issue, trying to set up a series of
Speaker 1: poles just for a thousand people or or so. It's
Speaker 1: very hard. So the vote is in though, regardless of
Speaker 1: the polls. And you say in a recent piece there's
Speaker 1: a new normal the world will have to face. People
Speaker 1: need to change their premise as investors. What does that mean? Well,
Speaker 1: as investors means that if you have a bias going
Speaker 1: in if you think that, for instance, if your if
Speaker 1: your bias was that the world is going to fall
Speaker 1: apart because of brexit um, and it's not going to
Speaker 1: fall apart, well, then maybe able to take a step
Speaker 1: back and say, well, perhaps I was biased going into that,
Speaker 1: and I didn't do my research, and I've got to
Speaker 1: look at the world a little bit differently. Now. I
Speaker 1: have the advantage of I grew up on the East Coast.
Speaker 1: I grew up in Brooklyn, live in Manhattan, I lived
Speaker 1: in Tokyo, I lived in London. We now live most
Speaker 1: of the time in Henderson, Nevada. UM. So I get
Speaker 1: to speak to people from all around the world. And
Speaker 1: if you speak to people, just for instance, on the coasts,
Speaker 1: they think differently than people who maybe in the Midwest. UM.
Speaker 1: And unfortunately what happens is that people who live on
Speaker 1: the coasts. All right, Well, um, project their opinions about
Speaker 1: the rest of the country and the rest of the
Speaker 1: world based upon how they think. Well that that may
Speaker 1: not necessarily the same. And we're seeing this take place,
Speaker 1: whether it's in terms of the elections or gun control
Speaker 1: or when' that we should have a sugar at tax
Speaker 1: and and so I think what people need to do
Speaker 1: when I say change your premise is understand both sides
Speaker 1: of the argument. Well, that makes sense because this presidential
Speaker 1: election to the United States is going to be potentially
Speaker 1: a very big deal. I want to ask about a
Speaker 1: couple of individual stocks though, Um, you also said this
Speaker 1: note that you took advantage of the panic to buy
Speaker 1: some shares of Glaxo smith Klin. Of course that's a
Speaker 1: big British pharmaceuticals company. Is that something other people should
Speaker 1: be looking at or is it more just a post
Speaker 1: Brexit vote trade. Well, we had a wonderful opportunity to bide,
Speaker 1: especially in the pre market on on the Brexit panic day, um,
Speaker 1: which was Friday. Uh and uh. We saw that the
Speaker 1: price of the A d r s went down because
Speaker 1: the price of Glaxo stock in the UK went down,
Speaker 1: but also because the strength and dollars, so you've got
Speaker 1: a will benefit, so to speak, if you're out there
Speaker 1: buying stock. Um. But we thought the stock was cheap enough.
Speaker 1: We liked the dividend, so we bought it both for
Speaker 1: our growth portfolios but also for our dividend value portfolios.
Speaker 1: And if anything, UM, when I look at a stock
Speaker 1: like glack Cell, which makes pharmaceuticals, I think that that
Speaker 1: is somewhat more protected than from the potential Breggxit problem
Speaker 1: because everybody needs pharmaceuticals around the world, and they also
Speaker 1: have patents. If we're talking about an industrial company, UM
Speaker 1: that's maybe making widgets, let's say, as we say in academia,
Speaker 1: then maybe I wouldn't want to buy a British widget company.
Speaker 1: Buy amongst the briggs it rubble. You wrote about this
Speaker 1: yesterday Whole Foods. Why and if there's no the brigsit
Speaker 1: rubble clears up a bit, is a whole food still
Speaker 1: a buy? Well, Well, we saw a break and with
Speaker 1: whole foods and few things and and and as you
Speaker 1: know I follow food and restaurant stocks. We talked about
Speaker 1: this quite often on Bloomberg and by you talked about
Speaker 1: my commentary of people can get my commentary for free
Speaker 1: on www dot Lakeview Asset dot com and we call
Speaker 1: it my gut feeling, uh, and I published it a
Speaker 1: few times a week. But I've had my eyron Whole Foods.
Speaker 1: I've been out of the stock over the years, and
Speaker 1: it's got clawbered recently, really clobert um. They've had some problems, uh,
Speaker 1: some operational problems. Their margins have contracted, Uh, growth slowed
Speaker 1: down a little bit, and the stock has come down
Speaker 1: tremendously this year. Uh. The stock went x dividend this week.
Speaker 1: We start an opportunity by it before it went ex dividend.
Speaker 1: And also what we noticed was that when all this
Speaker 1: fallout from the brigit was taking place, that actually Whole
Speaker 1: Foods was going up, was doing much better. So I
Speaker 1: was being a little contrayed and said, well, people need
Speaker 1: still need to buy food. We heard about the sugar
Speaker 1: tacks in Philadelphia. Let's step up and buy some cheap
Speaker 1: Whole foods. Well, congratulations Mr Rockport, the finance professor, and
Speaker 1: he just told you how you can follow his very
Speaker 1: interesting commentary. He's present Founder lake Usset Management professor at
Speaker 1: Seton Hall University in New Jersey. I'm Kathleen Hayes, this
Speaker 1: is taking stock on Bloomberg Radio. Yeah,