Latest / Bloomberg Intelligence / Lakeview's Scott Rothbort Likes Glaxo and Whole Foods (Audio)

Transcript

Lakeview's Scott Rothbort Likes Glaxo and Whole Foods (Audio) · Bloomberg Intelligence

• 0:03
  Speaker 1: Global business news twenty four hours a day at Bloomberg
• 0:06
  Speaker 1: dot Com, the radio, plus Globolat and on your radio.
• 0:09
  Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.
• 0:14
  Speaker 1: I'm Katherine Calorie. Wall Street is joining the global rally
• 0:17
  Speaker 1: for a second day, and the dollar is weakening their
• 0:19
  Speaker 1: speculation that policymakers will move to prevent the UK's European
• 0:23
  Speaker 1: secession from hampering global growth. The SMP five hundred has
• 0:27
  Speaker 1: erased its loss for the year, a Goldman Sachs index
• 0:29
  Speaker 1: of the most shortage shares is up the most since
• 0:32
  Speaker 1: and Britain's foot SEE one hundred erased its post brexit
• 0:35
  Speaker 1: losses with the six point three percent gain over two days.
• 0:39
  Speaker 1: We talk the markets every fifteen minutes throughout the trading
• 0:41
  Speaker 1: day on Bloomberg Radio. Dow Industrial Average is currently have
• 0:44
  Speaker 1: two hundred seventy seven points one point six percent trading
• 0:47
  Speaker 1: at seventeen thousand, six hundred eighty seven. SMP five funded
• 0:51
  Speaker 1: up thirty four points one point seven percent to two
• 0:53
  Speaker 1: thousand seventy NASTACK up eighty eight points one point nine
• 0:56
  Speaker 1: percent to forty seven eighty West Texas Intermedia crude oil
• 1:00
  Speaker 1: but dollar fifty eight to barrel three point three spout
• 1:04
  Speaker 1: gold up five dollars ounce did seventy ten year treasury
• 1:08
  Speaker 1: down twelve thirty seconds with the yield of one point
• 1:10
  Speaker 1: five zero percent. And that's a bloomberg business flash. Catherine Cownderie,
• 1:14
  Speaker 1: thank you so very much. A sharp sell off on Friday,
• 1:17
  Speaker 1: three days of gains. Now this week, as markets bounce
• 1:21
  Speaker 1: back from the breggsit concerns, is it time to put
• 1:24
  Speaker 1: some money into e t s and if so, which kind?
• 1:27
  Speaker 1: Let's go back to Katherine County for today's e t
• 1:30
  Speaker 1: F report, brought to you by National Realty Providers of
• 1:33
  Speaker 1: Satisfaction Guaranteed New York City Realty Investments see them at
• 1:37
  Speaker 1: n r i A dot net. Here's Catherine Cowndry now,
• 1:40
  Speaker 1: market turmoil can create some opportunities. It did for David Kotak,
• 1:44
  Speaker 1: the chairman of Camerland Advisers, in the wake of the
• 1:47
  Speaker 1: UK vote to withdraw from the European Union. What do
• 1:50
  Speaker 1: we know that will now happen for a long time.
• 1:54
  Speaker 1: We're gonna have low, low interest rates longer, longer, longer
• 1:57
  Speaker 1: than going to be zero in Japan, zero in Europe.
• 2:01
  Speaker 1: After the Brexit vote, investors pushed back. That's on federal
• 2:04
  Speaker 1: reserve interest rate increases, pricing in just a ten percent
• 2:07
  Speaker 1: chance for higher borrowing costs by February. What does that
• 2:11
  Speaker 1: say for housing in the US that's not impacted by Brexit.
• 2:17
  Speaker 1: I we took up our weight in the cell off
• 2:20
  Speaker 1: in sectors like consumer discretionary in housing. You can be
• 2:24
  Speaker 1: opportunistical one side. On the other side, k Talk says
• 2:27
  Speaker 1: it's time to reassess other holdings in light of the
• 2:30
  Speaker 1: volatility caused by Brexit. Co tox for am uses et
• 2:33
  Speaker 1: s to invest in equities. That's your Bloomberg ETF report.
• 2:37
  Speaker 1: I'm Catherine Cowdery. You're listening to Taking Stock with Kathleen
• 2:42
  Speaker 1: Hayes and Pim Fox on Bloomberg Radio. Brexit took a
• 2:45
  Speaker 1: big toll on the stock market on Friday and actually
• 2:49
  Speaker 1: also on Monday, two days down now two days up
• 2:52
  Speaker 1: for the U S stock market sn P five hundreds
• 2:55
  Speaker 1: still though, however, stuck between two thousand, one hundred. It
• 2:59
  Speaker 1: seems too many people. So where do we go next?
• 3:01
  Speaker 1: Is the Brexit impact going to fade? And what about
• 3:04
  Speaker 1: those polls? If you like to watch numbers and stocks
• 3:06
  Speaker 1: and think about statistics, why did they go so wrong.
• 3:09
  Speaker 1: Scott Rothbort is here to answer all of these questions
• 3:12
  Speaker 1: and more, President and founder like you ask that management
• 3:15
  Speaker 1: also teaching at Satan University. Niversity, that's right university. So
• 3:19
  Speaker 1: we're really glad to have your bas Scott. Let's start
• 3:21
  Speaker 1: with Brexit. First of all, you had raised some cash
• 3:25
  Speaker 1: prior to the Brexit vote. Why a little bit? Um,
• 3:28
  Speaker 1: We just felt that some of our stocks were just
• 3:30
  Speaker 1: over extended, and um, we paired back a little bit,
• 3:33
  Speaker 1: not a tremendous amount. Do you have any concern about Brexit?
• 3:35
  Speaker 1: You know, I really didn't and I still don't have
• 3:39
  Speaker 1: any concern about Brexit. And and the reason is because, frankly,
• 3:43
  Speaker 1: I've been in this business long enough, and I've seen dislocations,
• 3:46
  Speaker 1: and I've gone through things like the Russian coup and
• 3:50
  Speaker 1: the invasion of Afghanistan and flash crashes, and we know
• 3:54
  Speaker 1: what happens in the long run is that the market,
• 3:57
  Speaker 1: while it may correct, it's also self correct in the
• 4:00
  Speaker 1: other the other direction, and it'll return to normal. And
• 4:04
  Speaker 1: so we expected that once the Brexit vote took place,
• 4:07
  Speaker 1: whether it was to remain or to leave, that markets
• 4:11
  Speaker 1: would have a reaction and then that reaction would then
• 4:13
  Speaker 1: be reversed. So, uh, you teach at Seton Hall University.
• 4:17
  Speaker 1: Uh in over there in South Orange, New Jersey, just
• 4:20
  Speaker 1: part of the tri state area, the Greater New York
• 4:22
  Speaker 1: City metro area. I like to think of it as
• 4:25
  Speaker 1: statist statistics. And you're in the world of business and finance.
• 4:29
  Speaker 1: What what do you what have you made of the
• 4:32
  Speaker 1: wrongness of the polls? Okay? Um? Well, first of all,
• 4:35
  Speaker 1: Seaton Hall has a fabulous polling center, sports polling center,
• 4:39
  Speaker 1: which I've had the opportunity to participate in from this
• 4:43
  Speaker 1: point of view of being able to pull people, and
• 4:46
  Speaker 1: of course they we do it based upon some sort
• 4:49
  Speaker 1: of you know, sports themed um question. For instance, we
• 4:54
  Speaker 1: did a sports poll I think a few months back
• 4:57
  Speaker 1: talking about all of these online gambling sites. Um. And
• 5:02
  Speaker 1: so I I understand what it is like to put
• 5:04
  Speaker 1: together a pole and be on the phone and trying
• 5:07
  Speaker 1: to ask people questions and and how you get the
• 5:09
  Speaker 1: sampled data. But I don't think that people quite understand
• 5:13
  Speaker 1: when they look at political polls these days, that these
• 5:16
  Speaker 1: political polls can be crafted in such a way that
• 5:19
  Speaker 1: they are pre biased. And there's something else in which
• 5:22
  Speaker 1: we have we call observer bias, where actually the person
• 5:25
  Speaker 1: who was taking the poll, who's making the observations, can
• 5:29
  Speaker 1: actually skew the data and information by the way which
• 5:34
  Speaker 1: they ask questions other people they select to answer. I'll
• 5:37
  Speaker 1: give you an example. My son UH, and we live
• 5:40
  Speaker 1: in Nevada, was phoned up and asked about Uh was
• 5:45
  Speaker 1: asked to participate in the poll. He said who he
• 5:48
  Speaker 1: would vote for president as being the first question, and
• 5:50
  Speaker 1: then he hung up on him didn't complete the poll.
• 5:54
  Speaker 1: Now this wasn't a bad line disconnection. Clearly. What happened
• 5:59
  Speaker 1: was they didn't like the answer and they were looking
• 6:01
  Speaker 1: to get some sort of predetermined response. Another way that
• 6:06
  Speaker 1: you can kind of fix the polls, so to speak,
• 6:09
  Speaker 1: is you can limit the population of telephone numbers you
• 6:14
  Speaker 1: get to certain area codes. So and the other problem
• 6:19
  Speaker 1: is that people don't understand that. You know, if you
• 6:21
  Speaker 1: do a sample of people and you get them to respond,
• 6:26
  Speaker 1: you have a margin of era of three for that. Um. Well, um,
• 6:32
  Speaker 1: that may seem like very little, but when you're doing
• 6:36
  Speaker 1: a poll for the entire United Kingdom in which thirty
• 6:39
  Speaker 1: some odd million people we're going to vote on a
• 6:43
  Speaker 1: very important issue, trying to set up a series of
• 6:48
  Speaker 1: poles just for a thousand people or or so. It's
• 6:51
  Speaker 1: very hard. So the vote is in though, regardless of
• 6:54
  Speaker 1: the polls. And you say in a recent piece there's
• 6:56
  Speaker 1: a new normal the world will have to face. People
• 6:59
  Speaker 1: need to change their premise as investors. What does that mean? Well,
• 7:04
  Speaker 1: as investors means that if you have a bias going
• 7:07
  Speaker 1: in if you think that, for instance, if your if
• 7:09
  Speaker 1: your bias was that the world is going to fall
• 7:12
  Speaker 1: apart because of brexit um, and it's not going to
• 7:15
  Speaker 1: fall apart, well, then maybe able to take a step
• 7:17
  Speaker 1: back and say, well, perhaps I was biased going into that,
• 7:22
  Speaker 1: and I didn't do my research, and I've got to
• 7:25
  Speaker 1: look at the world a little bit differently. Now. I
• 7:28
  Speaker 1: have the advantage of I grew up on the East Coast.
• 7:31
  Speaker 1: I grew up in Brooklyn, live in Manhattan, I lived
• 7:34
  Speaker 1: in Tokyo, I lived in London. We now live most
• 7:37
  Speaker 1: of the time in Henderson, Nevada. UM. So I get
• 7:41
  Speaker 1: to speak to people from all around the world. And
• 7:43
  Speaker 1: if you speak to people, just for instance, on the coasts,
• 7:47
  Speaker 1: they think differently than people who maybe in the Midwest. UM.
• 7:52
  Speaker 1: And unfortunately what happens is that people who live on
• 7:54
  Speaker 1: the coasts. All right, Well, um, project their opinions about
• 7:59
  Speaker 1: the rest of the country and the rest of the
• 8:00
  Speaker 1: world based upon how they think. Well that that may
• 8:03
  Speaker 1: not necessarily the same. And we're seeing this take place,
• 8:05
  Speaker 1: whether it's in terms of the elections or gun control
• 8:09
  Speaker 1: or when' that we should have a sugar at tax
• 8:12
  Speaker 1: and and so I think what people need to do
• 8:16
  Speaker 1: when I say change your premise is understand both sides
• 8:19
  Speaker 1: of the argument. Well, that makes sense because this presidential
• 8:21
  Speaker 1: election to the United States is going to be potentially
• 8:24
  Speaker 1: a very big deal. I want to ask about a
• 8:26
  Speaker 1: couple of individual stocks though, Um, you also said this
• 8:30
  Speaker 1: note that you took advantage of the panic to buy
• 8:32
  Speaker 1: some shares of Glaxo smith Klin. Of course that's a
• 8:36
  Speaker 1: big British pharmaceuticals company. Is that something other people should
• 8:39
  Speaker 1: be looking at or is it more just a post
• 8:40
  Speaker 1: Brexit vote trade. Well, we had a wonderful opportunity to bide,
• 8:43
  Speaker 1: especially in the pre market on on the Brexit panic day, um,
• 8:47
  Speaker 1: which was Friday. Uh and uh. We saw that the
• 8:51
  Speaker 1: price of the A d r s went down because
• 8:54
  Speaker 1: the price of Glaxo stock in the UK went down,
• 8:57
  Speaker 1: but also because the strength and dollars, so you've got
• 8:59
  Speaker 1: a will benefit, so to speak, if you're out there
• 9:02
  Speaker 1: buying stock. Um. But we thought the stock was cheap enough.
• 9:06
  Speaker 1: We liked the dividend, so we bought it both for
• 9:09
  Speaker 1: our growth portfolios but also for our dividend value portfolios.
• 9:13
  Speaker 1: And if anything, UM, when I look at a stock
• 9:17
  Speaker 1: like glack Cell, which makes pharmaceuticals, I think that that
• 9:21
  Speaker 1: is somewhat more protected than from the potential Breggxit problem
• 9:27
  Speaker 1: because everybody needs pharmaceuticals around the world, and they also
• 9:31
  Speaker 1: have patents. If we're talking about an industrial company, UM
• 9:35
  Speaker 1: that's maybe making widgets, let's say, as we say in academia,
• 9:38
  Speaker 1: then maybe I wouldn't want to buy a British widget company.
• 9:42
  Speaker 1: Buy amongst the briggs it rubble. You wrote about this
• 9:44
  Speaker 1: yesterday Whole Foods. Why and if there's no the brigsit
• 9:48
  Speaker 1: rubble clears up a bit, is a whole food still
• 9:50
  Speaker 1: a buy? Well, Well, we saw a break and with
• 9:53
  Speaker 1: whole foods and few things and and and as you
• 9:55
  Speaker 1: know I follow food and restaurant stocks. We talked about
• 9:58
  Speaker 1: this quite often on Bloomberg and by you talked about
• 10:01
  Speaker 1: my commentary of people can get my commentary for free
• 10:04
  Speaker 1: on www dot Lakeview Asset dot com and we call
• 10:07
  Speaker 1: it my gut feeling, uh, and I published it a
• 10:10
  Speaker 1: few times a week. But I've had my eyron Whole Foods.
• 10:13
  Speaker 1: I've been out of the stock over the years, and
• 10:15
  Speaker 1: it's got clawbered recently, really clobert um. They've had some problems, uh,
• 10:20
  Speaker 1: some operational problems. Their margins have contracted, Uh, growth slowed
• 10:25
  Speaker 1: down a little bit, and the stock has come down
• 10:27
  Speaker 1: tremendously this year. Uh. The stock went x dividend this week.
• 10:31
  Speaker 1: We start an opportunity by it before it went ex dividend.
• 10:33
  Speaker 1: And also what we noticed was that when all this
• 10:36
  Speaker 1: fallout from the brigit was taking place, that actually Whole
• 10:40
  Speaker 1: Foods was going up, was doing much better. So I
• 10:44
  Speaker 1: was being a little contrayed and said, well, people need
• 10:46
  Speaker 1: still need to buy food. We heard about the sugar
• 10:48
  Speaker 1: tacks in Philadelphia. Let's step up and buy some cheap
• 10:51
  Speaker 1: Whole foods. Well, congratulations Mr Rockport, the finance professor, and
• 10:56
  Speaker 1: he just told you how you can follow his very
• 10:58
  Speaker 1: interesting commentary. He's present Founder lake Usset Management professor at
• 11:02
  Speaker 1: Seton Hall University in New Jersey. I'm Kathleen Hayes, this
• 11:06
  Speaker 1: is taking stock on Bloomberg Radio. Yeah,