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Global Risk's Won Cautions Against Brexit Overreaction (Audio) · Bloomberg Intelligence

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  Speaker 1: Broadcasting live to New York, Bloomberg eleven Rio to Washington,
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  Speaker 1: d C. Bloomberg to Boston, Bloomberg twelve hundreds to San Francisco,
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  Speaker 1: Bloomberg nine to the countries sees Exam General one nine team,
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  Speaker 1: and around the globe the Bloomberg Radio Plus Athen Bloomberg
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  Speaker 1: dot Gone. This is taking Stock, coming up on taking stock,
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  Speaker 1: a look at the European Union and the risks for
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  Speaker 1: your portfolio. Are their models for other countries leaving the
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  Speaker 1: European Union and what that would do to your money?
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  Speaker 1: We'll find out more. We're gonna We're gonna be speaking
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  Speaker 1: with Sam Juan. He's founder and managing director of Global
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  Speaker 1: Risk Management Advisors PAM. I wonder what he'll have to
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  Speaker 1: say about Bill Gross of Jane's Capital Management, saying that
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  Speaker 1: he is sniffing out some rather bear Stearns kind of
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  Speaker 1: uh vibe from what's happening UK property market. That could
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  Speaker 1: be a risk. Let's go to Katherine Cadry. Now, no
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  Speaker 1: risk there, she's in the Bloomberg news room with the
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  Speaker 1: Bloomberg Business Flash. Thank you. Kathleen was stock selled down
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  Speaker 1: to their games after a minute of last month's federal
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  Speaker 1: Reserve Policy meeting, so almost all officials present indicated May's
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  Speaker 1: weak employment report added to economic uncertainty. Bloomberg has been
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  Speaker 1: adel Judas has the details of those f o MC minutes.
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  Speaker 1: Central bankers aired on the side of portion and holding
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  Speaker 1: their benchmark interest rate steady. The labor market slowdown was
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  Speaker 1: chief among their concerns make job growth with the weakest
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  Speaker 1: in almost six years. FED officials also sought prudent to
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  Speaker 1: wait for the results of Britain's EU referendum, which at
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  Speaker 1: the time was too close to call. The Fence Policy
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  Speaker 1: Panel next meets July twenty seven. At the Bloomberg First
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  Speaker 1: Woraddest Company Dell shoot Ice, Bloomberg Radio, Bloomberg Radio and TV.
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  Speaker 1: Bill Grows Fund, manager of Jannis Capital Management, was asked
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  Speaker 1: if anything surprised him in those FED minutes. Will not
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  Speaker 1: much pipe. Yes, they reach an employment uncertainties and we
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  Speaker 1: know that's probably because of the lower job totals. Will
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  Speaker 1: no more on farther loon't wait, and that's when the
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  Speaker 1: Labor Department will release its June jobs report. We talk
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  Speaker 1: the markets every fifteen minutes throughout the rating day. Del
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  Speaker 1: Industrial LeVert is up forty six points a quarter percent,
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  Speaker 1: trading at seventeen thousand, eight hundred eighty six. SMP five
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  Speaker 1: funded up seven points a third of a percent at
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  Speaker 1: two thousand ninety five and as dat is up twenty
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  Speaker 1: six points. That's a gain of half a percent. It's
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  Speaker 1: rating at forty eight forty nine less. Texas Intermedia crude
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  Speaker 1: oil up sixty five cents a barrel one point four
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  Speaker 1: percent to forty seven twenty five s about gold up
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  Speaker 1: eight dollar seventy cents. Announced of thirteen sixty seven fifty
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  Speaker 1: ten year treasury holding study with the yield of one
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  Speaker 1: point three seven percent. Among today's How Business stories, two
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  Speaker 1: more UK property funds have halted withdrawals in the wake
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  Speaker 1: of Britain's decision to leave the European Union. That brings
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  Speaker 1: a total number to five. And now let's get enough
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  Speaker 1: date of some of the other stories were following today
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  Speaker 1: on Bloomberg Radio. Thank you, Catherine from the Bloomberg Newsroom.
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  Speaker 1: I'm Jill Schneider. HOW speaker Paul Ryan says a lot
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  Speaker 1: of questions still need to be answered about Hillary Clinton's
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  Speaker 1: use of a private email server while she was Secretary
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  Speaker 1: of State and the FBI investigation into it. FBI Director
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  Speaker 1: James Comey has been summoned to testify before the House
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  Speaker 1: Oversight Committee tomorrow, and the House Judiciary Panel has scheduled
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  Speaker 1: hearing for next week with Attorney General Lauretta Lynch. Ryan
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  Speaker 1: says Clinton has offered quote, nothing but stonewalling and dishonesty
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  Speaker 1: on the issue and appears to have received preferential treatment
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  Speaker 1: from the FBI. Tennessee Republican Senator Bob Corker withdrew himself
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  Speaker 1: today from consideration as a possible running mate for Donald Trump.
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  Speaker 1: I know what I'm good at, and I feel like
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  Speaker 1: I'm better suited for other kinds of things, and I
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  Speaker 1: think they're probably better suiting people for this for them.
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  Speaker 1: When asked for his opinion on who Trump should pick,
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  Speaker 1: Corker said, although he knows it would not be a
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  Speaker 1: popular opinion, he believes Trump's ex wife, Ivanka would be
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  Speaker 1: the right person for the job. President Obama will slow
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  Speaker 1: down the U. S. Troop withdrawal from Afghanistan. Instead of
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  Speaker 1: going down to troops by the end of this year,
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  Speaker 1: the United States will make saying approximately eight four hundred
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  Speaker 1: troops in Afghanistan into next year. Through the end of
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  Speaker 1: my administration. The President also says the Taliban is still
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  Speaker 1: a threat. If you've been outside today, you probably don't
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  Speaker 1: need us to tell you, but it's a scorcher here
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  Speaker 1: in the city. Temperatures have topped the ninety degree mark.
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  Speaker 1: The intense heat is expected to last three days. Global
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  Speaker 1: News twenty four hours a day, powered by more than
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  Speaker 1: twenty six hundred journalists and analysts in more than one
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  Speaker 1: hundred twenty countries. From the Bloomberg News Room. I'm Jill Schneider. Katherine,
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  Speaker 1: thank you. Now, let's get an update of those equity
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  Speaker 1: benchmarks down. Industrial leverage up forty eight points to seventeen thousand,
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  Speaker 1: eight hundred eighty nine. SMP five founded up seven points
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  Speaker 1: in two thousand ninety five, nastack higher by twenty eight
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  Speaker 1: points at eight fifty. And that's a Bloomberg business flash
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  Speaker 1: you're listening to taking start with Kathleen Hays and Pim
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  Speaker 1: Fox on Bloomberg Radio. The pounds sterling plunges further, trading
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  Speaker 1: at one nine thirty six versus the US dollar, Japan's
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  Speaker 1: twenty year bond deal turns negative, and more UK property
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  Speaker 1: funds suspend trading. These are all risks that you need
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  Speaker 1: to take into consideration when managing money. Samuel Juan is
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  Speaker 1: the founder and the managing director of Global Risk Management Advisors.
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  Speaker 1: He joins us now. Sam Juan, thanks very much for
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  Speaker 1: coming in and what if you could tell people what
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  Speaker 1: is Global Risk Management Advisors and what do you actually
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  Speaker 1: do who some of your customers? UM? Well, I started
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  Speaker 1: the firm UM right on the heels of the financial
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  Speaker 1: crisis to help both asset managers and institutional investors with
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  Speaker 1: investment risk management. And about a third of our work
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  Speaker 1: is what some people who think of risk management. It
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  Speaker 1: is very quantitative, it is very geeky, and we try
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  Speaker 1: to use very sophisticated modeling and math to figure out
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  Speaker 1: what the risks are in your portfolio and what the
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  Speaker 1: potential losses are. But two thirds of the majority of
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  Speaker 1: the work that we do is really around good government,
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  Speaker 1: good processes, good controls, good strategy, because that's really at
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  Speaker 1: the end of the day. But what Trump's and one
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  Speaker 1: is the most important thing in terms of UH descending
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  Speaker 1: order of what institutions do. And as I mentioned, we
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  Speaker 1: work with UH institutional investors such as endowments and pensions foundations,
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  Speaker 1: and we work with asset managers heavy concentration of alternative
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  Speaker 1: managers and imagine the phone ringing off the hook because
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  Speaker 1: people are wondering, Okay, bregsit, what do I stay away from?
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  Speaker 1: Where is there something I should be getting rid of
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  Speaker 1: quickly that I didn't already get rid of before the vote,
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  Speaker 1: and or is there something I should be getting ready
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  Speaker 1: to leap in and buy? Where do you start with
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  Speaker 1: that analysis? Uh? We think it's important. So if we
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  Speaker 1: take an institutional industrial like a pension or a foundation
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  Speaker 1: or endowment, UM, those institutions are fortunate that they can
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  Speaker 1: take a relatively longer term view, and so we think
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  Speaker 1: it's very important that they stick to a plan and
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  Speaker 1: that plan and starts with their investment policy statement and
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  Speaker 1: the risk policy guidelines. We think it does make sense
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  Speaker 1: to assess what impact the portfolio has had near term
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  Speaker 1: from Brexit as well as what it may look medium
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  Speaker 1: term and long term to to, you know, figure out
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  Speaker 1: whether there should be any strategical, strategic or tactical changes
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  Speaker 1: they need to make. One thing we've been advising investors,
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  Speaker 1: and this applies to just retailer John Q Public as
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  Speaker 1: well is UM We caution that people should not overreact,
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  Speaker 1: especially given the fact that two thousand eight is still
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  Speaker 1: fresh on many people's minds, and that is we think
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  Speaker 1: a very important lesson learned. SAM. If there is a
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  Speaker 1: money manager who blames poor performance on Brexit, should you
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  Speaker 1: go looking for another money manager? Are there ways to
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  Speaker 1: have mitigated the risk? UM. If you look at the
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  Speaker 1: first few days following Brittain Britain's decision to exit the EU, UH,
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  Speaker 1: and you look at the proverbial winners and losers, the
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  Speaker 1: majority of the people were, whether the professional or amateur
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  Speaker 1: investor losers, meaning that when all the markets are down,
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  Speaker 1: most people are long the market and so there's no
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  Speaker 1: place for cover. The exception to that where people, of
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  Speaker 1: course who UH might have been UM long some of
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  Speaker 1: the flight to safety kind of things such as US
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  Speaker 1: or Japanese bonds or speculative investments such as gold UM,
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  Speaker 1: but there are very very few winners who anticipated UM Brexit.
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  Speaker 1: We think in terms of assessing UM, you know your investments,
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  Speaker 1: it would be foolish to look at it just through
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  Speaker 1: the filter of Brexit. Certainly, if your investments are eurocentric UM,
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  Speaker 1: that should give you pause to UH look for opportunities
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  Speaker 1: to diminish that concentration risk and diversify. But other than that,
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  Speaker 1: we think that people should um uh, you know, be
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  Speaker 1: vigilant about assessing their portfolio, watching it and looking at
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  Speaker 1: the and trying to understand the broader economic and political implications.
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  Speaker 1: And I think that's something that is the forest from
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  Speaker 1: the trees that gets lost because there's so people, so
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  Speaker 1: many people get focused on what's going up and what's
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  Speaker 1: going down? Okay, so what are what is? What is
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  Speaker 1: the broader global implication and what does it mean for portfolios?
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  Speaker 1: As you've in the time you've spent last couple of
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  Speaker 1: weeks looking at the Briggs that vote, what are what
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  Speaker 1: a couple of the key themes that emerge with people
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  Speaker 1: to be aware of the key themes to look at.
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  Speaker 1: As an example, is um is um um the UK's
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  Speaker 1: separation with the EU? What ramifications is that going to
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  Speaker 1: have trade within the eurozone? Um? What is that going
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  Speaker 1: to do for to the extent that investors are invested
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  Speaker 1: in companies that are within the foot see one hundred,
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  Speaker 1: what are the implications? So as an example, one of
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  Speaker 1: the questions I've imposed in the last couple of days is,
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  Speaker 1: given brexit, how can you explain the foots on being
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  Speaker 1: up so that's a you know, a paradox, and in
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  Speaker 1: the near term our answer to that is as follows.
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  Speaker 1: Number one, UM, you know, some of it is just
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  Speaker 1: relief from the fact that UM, the UK has not
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  Speaker 1: exercised Article fifty yet. Secondly, if you look at the
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  Speaker 1: composition of the companies within the foots you one hundred
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  Speaker 1: more than seventy seven percent of them are multinationals who
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  Speaker 1: garner majority of the revenue outside the UK and as such,
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  Speaker 1: UM they're making money that's worth more UH in local
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  Speaker 1: currency terms the pound. All right, saman want thank you
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  Speaker 1: so much for joining us. His founder and managing director,
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  Speaker 1: Global Risk Management Advisors right here in New York City.
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  Speaker 1: Don't overreact to brexit, step back. Are your investment zero centric?
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  Speaker 1: Maybe you need a broader view. This is Bloomberg coming
• 11:01
  Speaker 1: upon taking stock. We'll be speaking with a global macro
• 11:05
  Speaker 1: trader and an in house analyst for Vine Street Trading.
• 11:09
  Speaker 1: They focus on electronic futures markets who've got details ahead