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Altegris' Rivkin: Robo Investors Outpacing Fundamentals (Audio) · Bloomberg Intelligence

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  Speaker 1: Global business news twenty four hours a day. If Bloomberg
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  Speaker 1: This is a Bloomberg business flag from Bloomberg World Handquarters.
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  Speaker 1: I'm Charlie. Held at thirteen minutes to go ahead of
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  Speaker 1: the close on a Thursday. Stocks refluctuating investors looking past
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  Speaker 1: increased stimulus by the Bank of England to tomorrow morning's
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  Speaker 1: jobs report for clues on the strength of the economy
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  Speaker 1: and the Feds. Next move right now. The SMP five
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  Speaker 1: indecks up a point at sixty four, a gain of
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  Speaker 1: less than point one percent. Down industrials down two points
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  Speaker 1: to eighteen thousand, three hundred fifty three. Nestack is up
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  Speaker 1: nine to fifty one sixty eight, a gain of two
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  Speaker 1: tenths of one percent. Ten you up ten thirty seconds
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  Speaker 1: that yield one point five percent. Gold up to sixty
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  Speaker 1: ounce the thirteen sixty two a gain of two tenths
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  Speaker 1: of one percent, and crude oil now up two point
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  Speaker 1: three percent. West Texas intermediate cents forty one seventy eight
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  Speaker 1: a barrel on w T I, I'm Charlie Pellett. That's
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  Speaker 1: a Bloombird business Flash's taking Stoff with Kathleen Hayes and
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  Speaker 1: Pim Box on Bloombird Radio. Rising equity values, declines in
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  Speaker 1: commodity prices, declines in bond yields. What is an investor
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  Speaker 1: to do well? The first thing they should probably do
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  Speaker 1: is called Jack Rifkin. He is the chief investment officer
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  Speaker 1: for Altegra's Advisors, helping to manage more than two point
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  Speaker 1: three five billion dollars. They're based in La Joya, California.
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  Speaker 1: But Jack joins us in the studio today. Jack, thanks
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  Speaker 1: for being here, always glad to be here, all right,
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  Speaker 1: So now we don't even have to call you on
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  Speaker 1: the phone to to find out what people should be
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  Speaker 1: doing with their money. You can tell us presented with
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  Speaker 1: uncertainty which is always present, and gloom and doom will
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  Speaker 1: always be with us. Tell us about your sort of
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  Speaker 1: conversations that you're having with your investor base and what
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  Speaker 1: what are they asking and what are you telling them? Well,
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  Speaker 1: they're they're asking what to do to move away from
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  Speaker 1: classic stocks and bonds. A lot of investors are looking
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  Speaker 1: at the mix in their portfolio. They're seriously looking at
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  Speaker 1: how much liquidity they really need in their portfolio because
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  Speaker 1: they don't see the liquid sides of the market likely
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  Speaker 1: to provide them with much, likely to provide their clients
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  Speaker 1: with much over the next several years. So they're trying
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  Speaker 1: to figure out how much they really need to put
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  Speaker 1: in the liquid side of the market versus some of
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  Speaker 1: those strategies that are coming to market that allow people
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  Speaker 1: to take advantage of what institutions have taken advantage of
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  Speaker 1: for the last twenty five or thirty years. I want
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  Speaker 1: to channel a little Pim Fox here because he's been
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  Speaker 1: asking everybody about at a time like this, when you
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  Speaker 1: have commodity prices down, when you have falling bond yields,
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  Speaker 1: when you have a lot of people still think looks
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  Speaker 1: like disinflation, why not favor the things that seemed a
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  Speaker 1: lot of people favor right now. A hard asset, something
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  Speaker 1: that holds value of money loses its value, like real
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  Speaker 1: estate like gold. Well I'm not so sure about gold,
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  Speaker 1: but other real assets I think are something that a
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  Speaker 1: lot of investors are looking at moving away from again
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  Speaker 1: that gets you into an liquid side of the market,
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  Speaker 1: but moving away from what you're going to see out
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  Speaker 1: of stocks and bonds over the next several years. Here,
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  Speaker 1: we all know that when the FED does what it did,
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  Speaker 1: which is ease, it basically is pulling growth forward. We
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  Speaker 1: know that growth is really a product of demographics and technology,
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  Speaker 1: and all the FED does in these instances is dampen
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  Speaker 1: the fluctuations. And they've dampened what could have been a
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  Speaker 1: very big fluctuation. But there's going to be a payback
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  Speaker 1: for that over the next several years, and I think
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  Speaker 1: investors are actually beginning to realize that and looking for
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  Speaker 1: what can make up for that. And I think real
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  Speaker 1: assets are an area. Um I just I don't know
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  Speaker 1: that much about gold and never have not since what's
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  Speaker 1: his name, France whatever, way back in the sixties. And
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  Speaker 1: but in terms of real assets that actually have some
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  Speaker 1: earning power around them, I think that's becoming a much
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  Speaker 1: bigger part, as well as any uncorrelated investment opportunities that
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  Speaker 1: get you back into managed futures, uh, something that is
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  Speaker 1: just not correlated to the market and can take advantage
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  Speaker 1: when you have falling commodity prices or falling interest rates,
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  Speaker 1: or rising interest rates or rising stock markets. How do
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  Speaker 1: you describe managed futures to investors that have never utilized them?
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  Speaker 1: And what are some of the risks well, the risk
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  Speaker 1: are that it is it is a hard area to understand.
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  Speaker 1: It's easy to understand stocks and bonds. Managed futures are
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  Speaker 1: just that their futures. You're actually making a bet on
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  Speaker 1: an asset class that is going to move one direction
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  Speaker 1: or another. Now, this is not an area that I
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  Speaker 1: grew up on. I grew up as a fundamental analysts.
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  Speaker 1: But what has happened over the last thirty plus years
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  Speaker 1: is the technology has allowed people to actually do a
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  Speaker 1: better job than fundamental analysts on trying to figure out
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  Speaker 1: what's going on with the markets, and and the guys
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  Speaker 1: doing managed futures, the ones doing it well, are looking
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  Speaker 1: across a lot of asset classes. So you're not just
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  Speaker 1: dealing with stocks and bonds. You're you may be dealing
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  Speaker 1: with stocks and bonds and a variety of markets, but
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  Speaker 1: you're also looking at commodities. You're also looking at interest
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  Speaker 1: rate futures, and you're using technology to help you get
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  Speaker 1: a lead on what's going on in the marketplace. This
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  Speaker 1: something I never thought I would say in my career,
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  Speaker 1: but in fact, I think that the folks that are
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  Speaker 1: making use of technology may be doing a better a
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  Speaker 1: better effort than in the fundamental analysts these days. So
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  Speaker 1: can I take it right way down to earth again?
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  Speaker 1: Where do you think we are? Jack? Are we at
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  Speaker 1: the top of a bull market in stocks that is
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  Speaker 1: just going to be on indefinite pause now, no reason
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  Speaker 1: to sell off, no reason to go ahead. Um. You know,
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  Speaker 1: bond yields have fallen a lot. I guess they get
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  Speaker 1: more negative, and in fact, some people think that, keep
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  Speaker 1: arguing that with more bond purchases around the world, you're
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  Speaker 1: not going to have you know, you'll be lucky to
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  Speaker 1: have uh any yield. And in fact Namura two days
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  Speaker 1: ago Narmura in Tokyo said the third year bonds going
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  Speaker 1: to zero over the next two years because Japanese people,
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  Speaker 1: for example, they'll see low yields and they'll just increasingly
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  Speaker 1: buy US treasuries because at least there's little yield left there. Yeah. Yeah, well,
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  Speaker 1: I think I think that's going to be true. Money
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  Speaker 1: is going to run to where there is yield. The
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  Speaker 1: yield is actually in the emerging markets and emerging markets
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  Speaker 1: or where the growth is. I I look at what
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  Speaker 1: India just did. It's going to take a lot of
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  Speaker 1: work in India. But I think over the next ten years,
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  Speaker 1: India is going to be the fastest growing economy in
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  Speaker 1: the world, significantly faster than old fashioned place. Just to
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  Speaker 1: buy some stocks, uh, it could be. Um, I don't
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  Speaker 1: know that you can sort of buy individual stocks. I
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  Speaker 1: think you're going to have to go with someone who
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  Speaker 1: actually understands the markets over there. But I think we're
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  Speaker 1: setting ourselves up for having one of the major markets
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  Speaker 1: in the world being on a growth path. Jack the
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  Speaker 1: the US dollar, you know, is what most people in
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  Speaker 1: the United States use. What about holding cash and the
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  Speaker 1: value of the US dollar increasing against all these emerging
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  Speaker 1: market economy currencies, and you get a double whammy because
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  Speaker 1: maybe make a little bit more in dollar terms if
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  Speaker 1: you hold it here. But also with holding uh, the
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  Speaker 1: US dollar, you can take advantage of any big downturns
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  Speaker 1: in a market that you might understand, like stocks or bombs. Yeah.
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  Speaker 1: I think that's true, and I think that's the easy
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  Speaker 1: path to take and probably a safe path to take
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  Speaker 1: for a lot of investors. You need someone really professional
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  Speaker 1: who understands what goes on in these individual emerging markets.
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  Speaker 1: And if you're just not prepared to either have an
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  Speaker 1: advisor tell you what to do there or do the
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  Speaker 1: work on your own, which I would not necessarily recommend.
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  Speaker 1: I think you're better off and probably with the future
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  Speaker 1: that we see before us is is the dollar is
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  Speaker 1: actually going to do reasonably well here. That doesn't initially
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  Speaker 1: mean it's good for the US, but it's good for
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  Speaker 1: dollar holders as well. Recognize though, that the Americas in
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  Speaker 1: general have been the markets to be in over the
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  Speaker 1: first six months of this year. You could have been
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  Speaker 1: in any American market. I also always dislike it when
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  Speaker 1: anybody talks about America as if it's the United States.
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  Speaker 1: America runs from Cape Columbia to Tierra del Fuego, and boy,
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  Speaker 1: anytime you're down there and you sideway say well in America,
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  Speaker 1: we do this and say you're in America. And those
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  Speaker 1: have been great markets and I think will continue to
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  Speaker 1: be as well and as close to home. Jack, we
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  Speaker 1: were in Boston yesterday doing our show at Smith and
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  Speaker 1: Mlisky restaurant, and a long time contact friend of PIMS
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  Speaker 1: was there, John Spooner, who's a routbroker clients all over
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  Speaker 1: the world, has written many books, and John was taking
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  Speaker 1: this longer term view of you know, eventually we'll have inflation. Eventually,
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  Speaker 1: you know in one of the areas he likes are
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  Speaker 1: some of the big blue chip banks. Well, that's sort
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  Speaker 1: of stepping in I think a little early here. I
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  Speaker 1: in the long run, those could work out, But um,
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  Speaker 1: I think rates are going to stay low for a
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  Speaker 1: long time. Here. We could see inflation at some point here.
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  Speaker 1: It could be triggered by what happens in our employment situation,
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  Speaker 1: certainly in the US. I'm not so sure about the
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  Speaker 1: rest of the world. But um, I think it's a
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  Speaker 1: little early to step into that. But I do agree
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  Speaker 1: with him. You were asking me where are we in
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  Speaker 1: the cycle. I'd say we're more at the end of
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  Speaker 1: the beginning than at the beginning of the end here
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  Speaker 1: that we're setting things up to be actually pretty interesting here.
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  Speaker 1: You've got a lot of variation going on across the world.
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  Speaker 1: The EU is going to have to make some accommodation
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  Speaker 1: to Great Britain. They simply cannot say we're going to
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  Speaker 1: punish these guys. This is their opportunity to really actually
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  Speaker 1: take a look at themselves, look in the mirror, and
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  Speaker 1: let's get this right. Okay, Well, there's a lot of
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  Speaker 1: people around the world hoping they and cheering the mom
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  Speaker 1: we'll see what happens next, and we know that you'll
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  Speaker 1: be back to help us always figure it out. Jack
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  Speaker 1: Rivken is CEO and chief investment Strategist for Oltegriss Advisers.
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  Speaker 1: I'm Kathleen Hayes. Along with pim Fox, this is Bloomberg