WEBVTT - Advisors' Colyer: Tremendous Amount of Value in Nikkei (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>This is a Bloomberg Business Flash from Bloomberg World Headquarters.

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<v Speaker 1>I'm Charlie Pellett. Stocks are higher, little changed after the

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<v Speaker 1>SMP five hundred index captit's longest stretch of monthly advances

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<v Speaker 1>since two thousand fourteen. IF begins the new trading month

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<v Speaker 1>with an update. SMP five hundred index now at two

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<v Speaker 1>thousand ninety nine, advancing two points, up one tenth of

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<v Speaker 1>one percent down. Industrials up nine a gain of point

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<v Speaker 1>one percent. Naz stack up three points, a gain of

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<v Speaker 1>point one percent. Ten yere yield one point eight four percent.

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<v Speaker 1>Gold down to forty bence to twelve fifteen, a drop

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<v Speaker 1>of two tenths of one percent. Crude oil up eleven

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<v Speaker 1>cents one for a barrel of West Texas Intermediate crude.

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<v Speaker 1>Again there of two tenths of one percent. I'm Charlie Pellett.

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<v Speaker 1>That's a Bloomberg Business Flash, pelle It. Thank you so

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<v Speaker 1>very much. It's time now for the e t F Report,

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<v Speaker 1>access the opportunities. For our e t F report, we

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<v Speaker 1>turn to our own Catherine Cowtery. Crude oil has wrapped

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<v Speaker 1>up its longest run of monthly games in five years,

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<v Speaker 1>advancing for four straight months. Oil has surged more than

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<v Speaker 1>eighty five percent since touching a twelve year low in February.

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<v Speaker 1>Yet investors in oil ets haven't seen the same returns.

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<v Speaker 1>Here's Bloomberg Intelligence sandialist Eric beltunis, We've been talking for

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<v Speaker 1>the last two years about all the flows that have

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<v Speaker 1>gone into oil ETFs. For the past years, it added up.

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<v Speaker 1>It's about twenty six billion dollars of people trying to

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<v Speaker 1>call a bottom and oil well, obviously oil is rebounding

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<v Speaker 1>this year. You know, the lottery ticket has come in.

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<v Speaker 1>But unfortunately a lot of the e t f s

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<v Speaker 1>that were being used to try to play the rebound

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<v Speaker 1>in oil have lagged. Spot Boltunist uses the United States

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<v Speaker 1>Oil Fund e t F for USO as an example.

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<v Speaker 1>It's up nine percent so far this here less than

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<v Speaker 1>half they gain a spot oil. The reason is because

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<v Speaker 1>US it doesn't track spot oil or a barrel oil

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<v Speaker 1>tracts futures and you have to maintain a position, and

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<v Speaker 1>there's role costs. We get into the weeds here, but

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<v Speaker 1>it's a complicated situation and those roll costs corroded over time.

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<v Speaker 1>And that's your Bloomberg ETF report. I'm Katherine Cowdery. You're

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<v Speaker 1>listening to Taking Stock with Kathleen Hayes and Pim Fox

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<v Speaker 1>on Bloomberg Radio. Kind of mixed day if you look

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<v Speaker 1>at the economy and the big reports out today. Auto

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<v Speaker 1>sales looking not so hot if you're a big three

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<v Speaker 1>auto maker, but US manufacturing looking like maybe it's not

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<v Speaker 1>doing so badly in May after he got the I

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<v Speaker 1>s MS Manufacturing survey. So where are are the markets going?

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<v Speaker 1>And where should we all be putting our money? That's

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<v Speaker 1>we're gonna ask our next guests. Scott Colier. He is

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<v Speaker 1>chief Executive Officer, CEO, Chief Investment Officer and c i

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<v Speaker 1>O an advisor's asset management more than sixteen billion dollars

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<v Speaker 1>of assets under management, usually in Colorado Springs, Colorado, but

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<v Speaker 1>he is here in our New York studio today, home

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<v Speaker 1>of Bloomberg eleven. So welcome, Thank you. So what is

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<v Speaker 1>your sense right now, Scott of the stock market. A

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<v Speaker 1>lot of people are worried about valuations stretched, earnings have

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<v Speaker 1>been weak, and they don't look like they're gonna get

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<v Speaker 1>a lot stronger at time when sure you can buy stocks,

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<v Speaker 1>but you have to buy them individually and very carefully.

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<v Speaker 1>What's your view. I think my view would be more

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<v Speaker 1>traditionally that the more people worried, the better I probably

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<v Speaker 1>liked the market. I tend to be a little bit

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<v Speaker 1>on the value side of things. Maybe I think consensus

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<v Speaker 1>might be a bit uh a bit off here. If

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<v Speaker 1>you look, I think at thirty thousand foot view, the

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<v Speaker 1>environment is very good for earnings to grow in the future.

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<v Speaker 1>We had a bit of a dollar headwind last year.

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<v Speaker 1>We don't have that this year. Actually, I think that

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<v Speaker 1>becomes a little bit of a tailwind. I think the consumer,

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<v Speaker 1>if you look at them, they may have not bought

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<v Speaker 1>as many cars in April, but they're still buying cars

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<v Speaker 1>at close to a record rate. Housing market looks to

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<v Speaker 1>be picking up, consumer credit is growing. I think we

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<v Speaker 1>have a very healthy consumer. They're about us GDP. I'm

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<v Speaker 1>very comfortable, probably where the markets are. And I think

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<v Speaker 1>that that so many people are worried, it makes me

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<v Speaker 1>actually feel better about it. Is the FED on your

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<v Speaker 1>radar screen or would you just say, Hey, they can

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<v Speaker 1>even raise rates two more times this year, doesn't make

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<v Speaker 1>any difference. Well, I wish they the FED was more

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<v Speaker 1>on my my radar screen than they are. I think

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<v Speaker 1>if they were threatening to to raise rates for times

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<v Speaker 1>a year, that would be better for us. That would

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<v Speaker 1>mean that we would have actually upward pressure on earnings,

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<v Speaker 1>we would have upward pressure on wages, and it would

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<v Speaker 1>give them a reason to worry about slowing us down.

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<v Speaker 1>Right now, they're still worried about speeding us up. So

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<v Speaker 1>we're just kind of trudging along. And I think the

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<v Speaker 1>FED is going to I don't think they're gonna do

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<v Speaker 1>anything to upset the apple cart. Maybe one raise this year,

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<v Speaker 1>but quite frankly bases points. I don't think anybody cares. Now.

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<v Speaker 1>You said you look for value and one of the

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<v Speaker 1>sectors that you are in favor of right now is energy.

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<v Speaker 1>Is that because you say it's so beaten up and

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<v Speaker 1>the bottom is in now is it time to buy? Well,

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<v Speaker 1>it's not a timing call so much as what we've

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<v Speaker 1>done is we've destroyed all the investment to find more

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<v Speaker 1>of the stuff that we're depleting on a daily basis.

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<v Speaker 1>So what we're not doing is we've we've laid all

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<v Speaker 1>of our rigs down. We're not looking for anymore. So

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<v Speaker 1>quite frankly, if you have any growth in demand, which

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<v Speaker 1>we're actually seeing growth in global demand, we're not finding anymore.

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<v Speaker 1>We're actually sowing the seeds for the for the next

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<v Speaker 1>upward push in oil prices. Do I think the bottom

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<v Speaker 1>was put in? I tend to think it's put in,

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<v Speaker 1>not because we hit twenty six dollars. I'm not an

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<v Speaker 1>expert in the oil industry, but what I do see

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<v Speaker 1>or term structures that are going from a sharp contango

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<v Speaker 1>which you're you're bidding for storage, to more of a

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<v Speaker 1>well supplied market, but a more balanced market. So uh,

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<v Speaker 1>I think the concern even that OPEC meeting is going

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<v Speaker 1>to have tomorrow. They're not meeting because they don't know

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<v Speaker 1>each other and they want to get to know each other.

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<v Speaker 1>They're meeting because they're all concerned that they want to

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<v Speaker 1>support higher prices. You like industrials and manufacturing, Why I do,

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<v Speaker 1>because they do well when we have economic growth, and

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<v Speaker 1>I think the the environment in the United States as

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<v Speaker 1>well as Europe and in Asia is very friendly to

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<v Speaker 1>economic growth at this point in time. Financials banks, big banks,

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<v Speaker 1>medium sized banks, regionals what well. I think regionals are

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<v Speaker 1>better than big banks. Big banks are quite frankly, quite overregulated,

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<v Speaker 1>and they you know, they don't have really the earnings

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<v Speaker 1>power they used to their more of a financial utility.

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<v Speaker 1>So if you're talking about financials in the United States,

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<v Speaker 1>I would pick the regionals over over the large banks.

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<v Speaker 1>Precious metals gold different precious metal silver. Thus are they

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<v Speaker 1>They've actually done quite well after a very long bear market,

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<v Speaker 1>so maybe four or five years. They Commodities really have

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<v Speaker 1>been the worst performer if you look at the the

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<v Speaker 1>chart of best performing parts of the market, and worst

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<v Speaker 1>performing commodities have been on the absolute bottom for the

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<v Speaker 1>last four years. Commodities do well when we see growth,

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<v Speaker 1>When you see growth and demand, they tend to do well.

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<v Speaker 1>Gold and silver may have a different they may they're

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<v Speaker 1>almost treated as a different class than than commodities, even

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<v Speaker 1>though I would argue they've all pretty much bottomed together.

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<v Speaker 1>Gold is is also a currency, and it's a currency

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<v Speaker 1>that's universal and when we see central banks buying them

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<v Speaker 1>in huge amounts like we do now, everybody's trying to

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<v Speaker 1>weaken their own currency. What do you think I think

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<v Speaker 1>gold might not be a bad place to go alright,

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<v Speaker 1>Scott call, of course, as I said, you're CEO and

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<v Speaker 1>Advisor's asset management, You're based in Colorado Springs, and you

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<v Speaker 1>have a very global outlook. You have a global overallocation. China, Japan, Europe,

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<v Speaker 1>emerging markets. Let's start with Japan. I'm really focused on

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<v Speaker 1>them today. You know, the Prime Minister decided he you know,

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<v Speaker 1>he put up a lot of red flags. And yes,

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<v Speaker 1>they're not going to raise their consumption tax. They've done

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<v Speaker 1>that in the past a couple of times and pushed

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<v Speaker 1>their economy into recessions. But you like Japan. Why Japan

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<v Speaker 1>is is a great amount of value. But they've been

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<v Speaker 1>a great amount of value for quite some time, very

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<v Speaker 1>cash rich companies that trade in in Tokyo, and they

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<v Speaker 1>trade it at very low multiple. So to the extent

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<v Speaker 1>that abeonomics could produce any type of growth whatsoever, we

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<v Speaker 1>think there's a tremendous amount of value in the knee King.

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<v Speaker 1>And do you think that's gonna happen. Is it gonna

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<v Speaker 1>produce ground? Well, I do believe that they will keep

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<v Speaker 1>trying until they get it. One of the you know,

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<v Speaker 1>if you're talking about delaying the consumption tax by two years,

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<v Speaker 1>that is only one step that they've they've taken. Obviously

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<v Speaker 1>they are they were kind of the first to go

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<v Speaker 1>into the negative interest rate area after after the ECB

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<v Speaker 1>tried it. I'm not really sure that that's going to

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<v Speaker 1>produce growth. But once again, if you're a business person globally,

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<v Speaker 1>there has never been a more easy um environment for

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<v Speaker 1>you to try to grow business. Okay, let's hit on

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<v Speaker 1>a couple more of these real quick. Here. You like

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<v Speaker 1>China and how would you invest there? How do you

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<v Speaker 1>invest there? Well, I'm not I'm not quite uh brave

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<v Speaker 1>enough to to wade into the red chips, so we

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<v Speaker 1>would stay in the hangs saying that, you know, this

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<v Speaker 1>is the Hong Kong market. These are the shares that

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<v Speaker 1>are are legally tradeable outside of outside of China. They

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<v Speaker 1>tend to be the biggest of the blue chips, and

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<v Speaker 1>I think I would stay uh in that area if

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<v Speaker 1>I were going to try to trade China. Okay, let's

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<v Speaker 1>see your emerging market picks. You've got Latin America, Russia,

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<v Speaker 1>and India, Latin America broadly Mexico. Yeah, so well, Mexico

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<v Speaker 1>is a is a good example. But you always you

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<v Speaker 1>tend to buy Latin America and emerging markets when they

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<v Speaker 1>look the worst. But I would tell you that there

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<v Speaker 1>is something going on in in in Latin America where

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<v Speaker 1>we're having a change in governments. We've had a change

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<v Speaker 1>in the Argentine government. We're now having a change in

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<v Speaker 1>the Brazilian in government. The president has been impeached and

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<v Speaker 1>she is now out for six months trying to defend herself.

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<v Speaker 1>But also in Bolivia, they refuse to UH to rewrite

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<v Speaker 1>their constitution to allow for a third UH term of presidency.

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<v Speaker 1>And you're also seeing what you know, Venezuela follow apart

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<v Speaker 1>right in front of us. So I would suggest to

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<v Speaker 1>you that the new governments are more pro business. This

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<v Speaker 1>is the time you tend to want to buy those markets.

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<v Speaker 1>We expect an upturning global growth and I think they

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<v Speaker 1>benefit from that. Ten or fifteen seconds, do you like Russia, well,

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<v Speaker 1>liking Russia or not liking Russia. I think Russia, Russia's

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<v Speaker 1>economy is very much tied to commodity. So if I

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<v Speaker 1>like the commodity story, I tend to like the future

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<v Speaker 1>of Russia. There's more political risk there, but I would

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<v Speaker 1>suggest to you that you're probably being paid well to

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<v Speaker 1>take the risk you like investing in rusting. I thank

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<v Speaker 1>you so much. Scott called. Great to have you on

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<v Speaker 1>the show today. Thank you. CEO Advisor's Asset Management. Colorado

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<v Speaker 1>Springs is his bass season our New York studio today.

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<v Speaker 1>I'm Kathleen Hayes. This is taking Stock on Bloomberg Radio. Yeah,