THE GATE ON THE DOW INDUSTRIALS,
NASDAQ UP 40 POINTS, WE ARE
WATCHING THE TRADE STORY WITH
CHINA CLOSELY THIS MORNING, THE
U.S. AND CHINA APPARENTLY HAVE
AGREED TO ROLL BACK TARIFFS AS
PART OF PHASE 1 TRADE DEAL, THIS
IS COMING FROM CHINA FOREIGN
MINISTRY, THE TWO SIDES SET TO
BE EYEING DECEMBER ON SIGNING
PHASE 1 DEAL.
WHERE ARE YOU SEEING THE FLOWS
IN TERMS OF MOVING INTO STOCKS?
>> WELL, OBVIOUSLY INVESTORS
AREN'T REALLY THAT AFFECTED BY
THE TRADE WARS BECAUSE MARKETS
HIT NEW HIGHS BUT THE MARKET
WE'VE HAD OVER THE LAST 10
YEARS, BIG SHIFT ON, RECENTLY WE
HAVE SEEN MORE MONEY GOING INTO
VALUE THAN GROWTH AND ACTUALLY
MORE MONEY GOING INTO
INTERNATIONAL STOCKS WHEN YOU
CHECK FUN FLOWS AND ETF'S VERSUS
DOMESTIC, SOUNDS RIGHT,
INVESTORS ARE LOOKING FOR VALUE,
AND WHEN YOU LOOK AT VALUE, A
LOT OF STOCKS HAVE BEEN BEATEN
UP, THERE'S A LOT OF
OPPORTUNITIES THERE.
WELL, YOU'RE SEEING, EUROPE, FOR
EXAMPLE, BREXIT IS THE CLUED
HANGING OVER EVERYONE'S HEAD,
INVESTORS HAVE TO CONTINUE AND
INVEST, COMPANIES ARE DOING A
GREAT JOB FROM A PROFITABILITY
STANDPOINT AND COMPARE TODAY
HIGHER PRICES IN THE U.S., THEY
ARE MUCH CHEAPER.
>> WHAT ABOUT SMALL CAP STOCKS?
>> ABSOLUTELY, STEVE THEY HAVE
UNDERPERFORMED AND WE ARE
STARTING TO SEE NIBBLING GOING
ON, I THINK THAT'S PROBABLY
GOING TO PICK UP, AS YOU KNOW
THINGS ALWAYS REVERT BACK TO
MEANS AND SMALL STOCKS TEND TO
OUTPERFORM LARGE STOCKS BUT THAT
HASN'T BEEN THE CASE IN IN THE L
HASN'T BEEN THE CASE IN IN THE S
HASN'T BEEN THE CASE IN IN THE T
10 YEARS.
>> LET'S SAY TARIFFS ASIDE, WE
KEEP REACHING NEW HIGHS, TALK
ABOUT THE FED, THEY'VE BEEN
ACCOMMODATING THIS YEAR AFTER
MAKING SOME MISTAKES LAST YEAR
SO WE'VE HAD, YOU KNOW, WE'VE
HAD 3 MOVES SO FAR, NOW WE HAVE
A NEUTRAL STANCE, WHAT DO YOU
THINK HAPPENS WITH THE PEOPLE
COMING IN, NEW MONEY INTO THE
MARKET?
>> WELL, THEY HAVEN'T GOT HURT
BY GOING INTO EQUITIES, YOU'RE
NOT PAYING TO GO INTO BONDS
RIGHT NOW BECAUSE YIELD ARE
HORRENDOUS, REALLY, WHEN YOU
LOOK AT IT, IF PEOPLE ARE
SHOPPING AROUND, GETTING BACK TO
THE ORIGINAL POINT, IF YOU'RE
LOOKING FOR VALUE, VALUE STOCKS
IN THE U.S. ARE REALLY
ATTRACTIVE BECAUSE THE DISPARITY
BETWEEN GROWTH STOCKS AND VALUE
STOCKS, IT'S BEEN THE WORSE THAN
WE HAVE SEEN IN 30 YEARS, THAT
GAP WILL CLOSE AND WHEN YOU LOOK
AT OPPORTUNITIES OVERSEAS, MOST
INVESTORS HAVE HAD THIS HUGE
HOME COUNTRY BIAS IN THEIR
PORTFOLIOS ARE SO MUCH
CORRELATED TO S&P 500 AS WE KNOW
FROM DIVERSIFICATION STANDPOINT,
THAT'S NOT ALWAYS GOING TO HOLD,
EMERGING MARKETS, FOR EXAMPLE,
THERE'S A LOT OF OPPORTUNITY ON
SALE.
MARIA: WHAT HAS BEEN THE IMPACT
OF ZERO COMMISSION?
>> THAT'S GREAT, MARIA.
MAKES IT EASIER WHEN YOU LOOK AT
BROKERAGE PLATFORM, I JUST GOT
BACK FROM SAN FRANCISCO, I'M
SORRY, SAN DIEGO YESTERDAY, THE
INTERNATIONAL CONFERENCE, IT WAS
GREAT BECAUSE ADVISERS CAN
INVEST THEIR CLIENTS' MONEY FOR
ZERO TRADE, ZERO COMMISSIONS,
STOCKS ETF'S, WHEN CLIENTS SEE
LITTLE TRADE COMMISSIONS IN
THEIR PORTFOLIO, THAT DOESN'T
MAKE THEM FEEL GOOD, NOW IT'S
DOWN TO NOT ONLY LOW COST ETF'S
THAT ARE A FRACTION BUT ALSO NOT
TRADING, IT GIVES THEM THAT
ADDED CONFIDENCE.
>> DON'T THEY USUALLY END UP
DOING BETTER DESPITE THE ROLLER
COST E ASPECT OF IT?
>> THEY DO, STEVE, ABSOLUTELY,
IT'S ONE OF THOSE THINGS WHERE A
LOT OF FOLKS, SMART PEOPLE ON
WALL STREET HAVE BEEN BETTING ON
EMERGING MARKETING BUT IT'S BEEN
TOUGH TO BEAT, S&P 500, THAT'S
THE THING, EVENTUALLY THAT WILL
COME AROUND, ONE EXAMPLE IS YOU
LOOK AT GREECE AND IT'S NOT
REALLY AN EMERGING MARKET BUT
SHOULD BE CONSIDERED AN EMERGING
MARKET, IT'S UP 45% YEAR TO
DATE.
MARIA: COMING FROM SUCH A LOW
LEVEL --
>> SOME PEOPLE HAVE LOST THEIR
SHIRTS, I REMEMBER VIETNAM WAS
HOT TRADE AND SO MANY PEOPLE GOT
BLOWN OUT, WHERE SPECIFICALLY
YOU LIKE FOR EMF'S?
>> THEY'LL BE GREAT
OPPORTUNITIES WITH SHARES IN
CHINA, INDIA HAS BEEN REALLY,
REALLY STRONG AND GREAT
OPPORTUNITIES.
MARIA: THEY JUST CUT TAXERS
THERE IN INDIA.
I WANT TO TAKE YOU BACK TO THE
U.S., WE'VE HAD A VERY STRONG
EARNING SEASON, ALTHOUGH, I
DON'T WANT TO SAY REALLY STRONG,
TODAY WE ARE WAITING ON DISNEY
EXPECTED TO REPORT AFTER THE
BELL TONIGHT, YOUR REACTION TO
EARNING SEASON SO FAR?
>> WELL, 70% HAVE OUTPERFORMED
EXPECTATIONS AND I THINK THAT'S
BEEN CONSISTENT, I THINK WE ARE
VERY COMFORTABLE WITH COMPANIES
THESE DAYS, THEY ARE BEING MORE