OUR NEXT GUEST NOW TO TALK MORE
ABOUT THESE MARKETS
KEVIN CARON A MARKET STRATEGIST
AT THE WASHINGTON CROSSING IT
PFIZER'S I KEVIN IT'S GOOD TO
HAVE YOU WITH ME THIS MORNING
SAYS SOTS ATTEMPTING TO
REBOUND TODAY TO END WHAT HAS
BEEN A BUMPY WEEK. WHAT DO YOU
THINK IS IN STORE AS THERE ARE
STILL UNKNOWNS IN THIS MARKET.
>> WHAT WE'RE GOING THROUGH A
PERIOD OF LEADERSHIP CHANGE
YOU'VE GOT TO A NARRATIVE THAT
SEEMS TO BE SHIFTING RECENTLY
SO WE'VE HAD 3 STAGES ARE IN
THE I GUESS THE 3RD STAGE OF
THIS YEAR'S MARKET DRAMA.
THE FIRST STAGE
WAS THE THE COMING ON OF THE
VIRUS AND THE SHUTDOWN'S
FOLLOWED BY
EXTRAORDINARY ACTS OF STIMULUS
TO THE ECONOMY AND THE
REOPENING PROCESS AND THE RICS
CELEBRATION BE GONE FROM AN
ECONOMY THAT IS CONTRACTING AT
A RATE OF 30% IN THE
2ND QUARTER TO NOW EXPANDING AT
A RATE OF 30% IN THE 3RD, SO
HUGE SHIFT BUT MAYBE THAT
CHAPTERS NOW COMING TO AN END
IN THE MARKET'S GOING TO BE
LOOKING FOR LEADERSHIP NOW THAT
VERY
HIGH QUALITY GROWTH STOCKS ARE
LOOKING SOMEWHAT EXPENSIVE
WE'RE TRYING TO FIGURE OUT
WHERE WE GO NEXT.
SO THINGS LIKE WHAT HAPPENS
WITH THE STIMULUS PACKAGE IS
VERY IMPORTANT WHAT HAPPENS
ULTIMATELY WITH THE FEDERAL
RESERVE. AND THEY'RE
BACKSTOP EFFORTS IS VERY
IMPORTANT BUT MAYBE WE JUST
TURN HERE FOR A LITTLE WHILE AS
WE LOOK SO CHECK SO LET'S TALK.
>> ATTACK I THINK THIS IS THE
BIG CONUNDRUM, ESPECIALLY FROM
A LEVY ON INVESTORS WASN'T JUST
A DIP WAS IT A BUYING
OPPORTUNITY OR DO YOU THINK
SPECIFICALLY WITH TECH IN
THE NASDAQ THAT WE WILL SEE
MORE OF A RETRACEMENT TRYING TO
GET BACK TO UP I GUESS MORE
SUBTLE VALUATION LEVELS.
>> YEAH, WELL IF YOU'RE YOUNGER
INVESTOR ATTACK. I I THINK
WE THINK WE THINK OF WATCHING
CROSSING THAT TECH
IS FANTASTIC. AND IT'S NOT SO
MUCH ABOUT GROWTH IN THE 19 9
THE IT 1990'S
IT WAS REALLY VERY MUCH ABOUT
VERY HIGH GROWTH RATES FOR EVER
AND AND WE ARE GOING TO SEE
SOME STRONGER GROWTH THAT
TECHNOLOGY BUT I THINK WHAT
WITH DISTINGUISHING ABOUT TECH
THIS YEAR WAS THAT THE
MARKET REALLY DECIDED BETWEEN 2
GROUPS OF COMPANIES FINANCIALLY
WEAK COMPANIES WITH LOTS OF
DEBT ON THEIR BALANCE SHEET,
NONE, CERTAIN BUSINESSES
AND FINANCIALLY STRONG
COMPANIES WITH VERY LITTLE
DEBT, LOTS OF CASH FLOW, LOTS
OF PROFITABILITY AND
CONSISTENCY AND THAT'S
REALLY WHAT TECHNOLOGY HAD SO
IF YOU'RE YOUNGER INVESTOR WITH
A LONG TIME AND TECHNOLOGY
SHOULD BE A CORE HOLDING IN
YOUR PORTFOLIO.
>> SO LET'S TALK ABOUT THE
DIFFERENCES AT TECH BUBBLE IS
ANOTHER TERM THAT WE'VE BEEN
HEARING ABOUT LATELY WHAT ARE
THE DIFFERENCES BETWEEN THE
EARLY 2 THOUSANDS WHEN WE HAD
THE DOT COM CRASH AND OF
COURSE TODAY I MEAN TODAY OR
INVEST IN NAMES LIKE APPLE AND
GOOGLE AND FACEBOOK AND OF
COURSE WAY BACK TO YOU THE DOT
COM BUBBLE. IT WAS PETS
DOT COM. 2 DIFFERENT 2
DIFFERENT SCENARIOS.
>> OKAY SO OVER OVER LONG
PERIODS OF VALUE COMES FROM
SOMEWHERE AND TECHNOLOGY IS NOT
IMMUNE
FROM THAT. SO ULTIMATELY
INVESTORS NEED TO SEE EARNINGS
AND CASH
FLOW IN THE EARLY 2 THOUSANDS,
THERE WERE LOTS OF START-UP
COMPANIES ARE VERY VERY YOUNG
COMPANIES AT THE BEGINNING OF
THEIR LIFE CYCLE THAT WE'RE
BURNING THROUGH A LOT OF CASH
AND NOT REALLY GENERATING MUCH
IN TERMS OF PROFITABILITY
REMEMBER OF COMPANIES LIKE
AMAZON FOR EXAMPLE THAT DIDN'T
GENERATE PROFITS FOR A VERY
VERY
LONG TIME REINVESTED BACK AND
WAS ULTIMATELY SUCCESSFUL WITH
THAT STRATEGY, BUT EARLY 2000
NOT A LOT OF PROFITABILITY IF
ANY AND
VERY VERY VERY VERY HIGH
EXPECTATIONS AND VALUATIONS
TODAY, NOT SO MUCH
YOU LOOK AT LARGE CAP
TECHNOLOGY COMPANIES AND EVEN
SOME COMPANIES THAT ARE OUR
YOUNGER TOO YOU'RE NOW SEEING
COMPANIES COME TO PROFITABILITY
FASTER AND THAT PROFITABILITY
AS
IT GROWS WELL ULTIMATELY DRIVE
WHAT THE VALUATIONS LOOK LIKE
FIRE FOR 10 YEARS FROM NOW
THAT'S WHAT INVESTORS SHOULD BE
FOCUSED ON.
>> OKAY SO IF YOU'RE ON THE
SIDELINES YOU'RE A MILLENNIAL
YOU'VE GOT MONEY IN YOUR
BROKERAGE ACCOUNT. DO YOU WAIT
TO SEE IF WE GET A LITTLE BIT
MORE OF A DIP OR SHOULD YOU BE
BUYING NOW.
>> WELL I THINK IF IF YOU IF
YOU'RE YOUNG THE BEST THING YOU
CAN DO THE BEST THING YOU CAN
DO IS LEARN AS MUCH AS YOU CAN
ABOUT THE COMPANIES THAT YOU'RE
INTERESTED IN THAT IN INVESTING
IT THAT'S REALLY THE MOST
IMPORTANT THING AND THEN
WHETHER YOU BUY TODAY OR BY A
WEEK FROM NOW OR YOU KNOW
MONTH NOW IS NOT AS IMPORTANT
REALLY THE STRATEGY THAT'S
REALLY PAID OFF THE BEST
ESPECIALLY FOR TECH INVESTORS
HAS BEEN TO
CONTINUALLY INVEST ON PULLBACKS
ESPECIALLY GIVE A LONG-TERM
TIME RIGHT SO WE WOULD
RECOMMEND THAT RIGHT NOW WE
WOULD POINT OUT THAT VALUATIONS
ARE A LITTLE STRETCHED,
WE'VE PULLED BACK AT WASHINGTON
CROSSING OUR EXPOSURE TO
TECHNOLOGY JUST KIND OF ON A
SHORT TERM TACTICAL BASES.
BUT IF YOU'RE LOOKING AT A
LONGER TIME HORIZON, ABSOLUTELY
STUDY UP ON THOSE COMPANIES
MAKE THOSE INVESTMENTS WHEN
YOU'RE WHEN YOU'RE WHEN YOU'RE
COMPANIES COME BACK TO YOU IN
PRICE.
>> THIS IS THEIR OPPORTUNITY IN
THE MARKET KEVIN.
>> INTERESTINGLY WE'RE LOOKING
NOW AT AT FIRMS OUTSIDE THE
UNITED STATES WE SEE THAT THE
THAT THE UNITED STATES WHICH
HAS LED TO TREMENDOUSLY FOR A
LONG
MAYBE GETTING TO BE A LITTLE
EXPENSIVE RELATIVE TO SOME
OTHER PLACES AROUND THE WORLD.
IF YOU LOOK IF YOU'RE IF YOU'VE
GOT THE. FORTITUDE TO GO
IN THERE YOU CAN LOOK AT PLACES
LIKE.
>> FINANCIALS AND ENERGY BUT
YOU HAVE TO BE MINDFUL THAT
THOSE ARE AREAS THAT DO HAVE
MORE DEBT. FINANCIALS WILL
ULTIMATELY HOLD THE BAG
SOMETHING GOES WRONG WITH THE
ECONOMY. WE HAVE A SECOND WAVE
OF
CORONAVIRUS OR THERE IS ANOTHER
DOWNTURN, SO THERE IS MORE RISK
IN FINANCIALS ENERGY IS CHEAP
PLACE
TO GO.
>> BUT AGAIN A LOT OF
VOLATILITY IN THE UNDERLYING
COMMODITY JUST HAVE TO BE WARY
OF THAT. AND
THEN REALLY IN TERMS OF YOU
KNOW IF YOU'RE GOING TO BE
THINKING ABOUT A BALANCED
PORTFOLIO.
>> LOOK FOR A LOOK AT CASH FLOW
DON'T LOOK SO MUCH OF THE STOCK
PRICE MOVEMENT LOOK AT THE CASH
THAT THE COMPANIES ARE ARE
PAYING YOU AS YOU CAN FINE
COMPANIES THAT ARE INCREASING
THEIR DIVIDENDS REGULARLY
THAT'S ALSO A REALLY NICE WAY
TO BUILD IN COMMONWEALTH WELL