CHARLES: ONE QUESTION I KEEP
GETTING ASKED ABOUT THE V-SHAPED
REBOUND AND NEED TO TEST THE
BOTTOM.
FOURTH QUARTER THERE WAS A LOT
OF BUY THE DIP BEING DEAD, SELL
THE RIP FOR THE STOCK MARKET.
THE LONGER TERM UPTREND AFTER
THE FIRST BIG DIP AFTER THE
MARCH 2009 LOW IS STILL INTACT.
SO MANY MAVENS SAID MAJOR
INDICES WOULD HAVE TO TEST THE
2009 LOWS.
THINK ABOUT THIS.
APRIL TO JULY 2010, MAY TO
SEPTEMBER, 2011, MARCH TO
AUGUST 2015, EACH TIME THE
MARKET REGAINED ITS FOOTING AND
SOON WAS TRADING AND
ESTABLISHING NEW ALL-TIME HIGHS.
NOW THIS IS IMPORTANT TO
CONSIDER AS VOLATILITY HAS
OBVIOUSLY PICKED UP AND THERE IS
SO MANY DIFFERENT FORCES DRIVING
THE MARKET EVERY SINGLE DAY.
LONG-TERM INVESTORS YOU SHOULD
MAKE ADJUSTMENTS OBVIOUSLY BUT
MORE THAN LIKELY THEY SHOULD BE
BASED ON FUNDAMENTALS.
THOSE THAT WANT TO BE NIMBLE YOU
SHOULD LOOK AT NUANCE.
YESTERDAY, FOR INSTANCE, THE
MARKET WAS HIT WITH ALL KINDS OF
NEGATIVE NEWS AND SPECULATION.
EVEN THOUGH THE DOW CLOSED DOWN
300 POINTS I THINK IT WAS A
POSITIVE SESSION BECAUSE THE 50
DAY MOVING AVERAGE HELD
THROUGHOUT THE DAY.
IN FACT THERE WAS A SMALL SPIKE
OF BUYING INTO THE CLOSE.
SOME BOUGHT AGGRESSIVELY.
BET THEY WERE SMART, CONNECTED
INVESTORS THAT UNDERSTAND SOON
THE PENDULUM OF FEAR COULD SWING
BACK TO BUYING DIPS AND CHASING
THE RIP.
JACK ABLIN IS HERE.
JACK, YOU'VE BEEN AROUND FOR A
WHILE.
YOU KNOW EXACTLY WHAT I'M
TALKING ABOUT.
HINDSIGHT IS 2020, BUT WE SHARE
IT THROUGH THE AUDIENCE HERE.
HOW DO YOU GRAPPLE WITH BOTH
THESE THINGS, NAMES YOU WANT TO
LOVE FOR A LONG TIME, BUT SHORT
TERM VOLATILITY GETS TO
EVERYONE?
>> IT DOES.
THAT IS ONE OF THE THINGS THAT
AS PROFESSIONAL MONEY MANAGERS
WE GRAPPLE WITH.
PEOPLE WANT STABILITY AND
PREDICTABILITY IN THEIR
LIFESTYLE BUT THEY'RE FUNDING IT
WITH SOMETHING INHERENTLY
VOLATILE.
HOW DO YOU RECONCILE THE TWO?
AND YOU'RE ABSOLUTELY RIGHT, YOU
HAVE GOT TO TAKE LONGER-TERM
CASH FLOW NEEDS AND PAIR THEM UP
WITH LONGER-TERM ASSETS.
YOU HAVE TO HAVE SHORTER TERM
ASSETS, FUNDING SHORTER TERM
CASH FLOW NEEDS.
THAT WAY WHENEVER YOU OWN A
PORTFOLIO OF EQUITIES YOU'RE IN
A POSITION TO HOLD THEM FOR AT
LEAST SEVEN YEARS.
CHARLES: THAT IS AMAZING.
I'M GLAD YOU SAID THAT.
MEANTIME THOUGH A STOCK LIKE
NETFLIX FOR INSTANCE, UP 50% IN
THREE WEEKS.
IT GETS SMACKED DOWN 10%.
WILL IT BE AROUND IN SEVEN
YEARS?
MAYBE IT WILL BE?
I THINK BETTING IS SURE BUT
DEFINITELY WILL HAVE A LOT MORE
COMPETITION.
CONVERSELY, WE SAW A COMPANY
LIKE MICROSOFT THAT LOOKED LIKE
IT WAS FLAT-OUT DEAD FOR A
NUMBER OF YEARS.
THEN ALL OF A SUDDEN IT WAS THE
MOST VALUABLE COMPANY IN
AMERICA?
>> YEAH IT'S REMARKABLE.
YOU'RE RIGHT, IT IS HARD TO
PREDICT WHAT INDIVIDUAL COMPANY
WILL BE AROUND FOR AS LONG AS
LONG AND LONG.
IT WASN'T LONG AGO WHERE, FOR
EXAMPLE, YOU KNOW, SEARS AND IBM
WERE KIND OF THE DARLINGS OF THE
MARKET.
AND SO, YOU KNOW, YOU DO HAVE TO
PAY ATTENTION.
YOU CAN'T JUST SIMPLY, YOU KNOW,
PUT YOUR STOCK POSITIONS IN THE
DRAWER, FORGET ABOUT IT.
ON OTHER HAND, IT DOES REQUIRE A
LONG-TERM FOCUS.
THAT IS WHY SOME OF THIS
NEAR-TERM VOLATILITY IS, IS AN
OPPORTUNITY TO GET IN FOR THE
LONGER TERM.
CHARLES: BUYING THE DIP.
OKAY, IT DOESN'T GO AWAY.
BY THE WAY ISN'T THE OLDEST
WALL STREET AXIOM, BUY LOW, SELL
HIGH?
A LOT EASIER SAID THAN DONE.
>> IT ABSOLUTELY IS BUT
CERTAINLY WHEN YOU HAVE GOT BIG
BEAR MARKETS OR AT LEAST BIG
DOWNTURNS MUCH EASIER TO BE
RIGHT OVER THE LONG TERM AND THE
OTHER THING IS TIME IS YOUR
FRIEND.
ONE OF THE THINGS, YOU KNOW, I
CAN'T TELL YOU WHAT, YOU KNOW,
APPLE'S STOCK OR NETFLIX WILL DO
OVER THE NEXT MONTH OR SO, BUT
IF YOU TAKE A PORTFOLIO OF SAY
S&P 100 OR NASDAQ 100, PUT THEM
TOGETHER, HOLD THEM FOR SEVEN
YEARS, STATISTICALLY SPEAKING
YOU HAVE 100% OF MAKING MONEY.
EVEN IF YOU BOUGHT THE DAY
BEFORE THE FINANCIAL CRISIS,
HELD FOR SEVERAL YEARS, YOU
WOULD BE IN DECENT SHAPE.
CHARLES: NEAR TERM SOME OF
HEADWINDS WE HAVE, FEELS LIKE
SOME COULD BE RESOLVED.
WE KNOW THEY ALL CAN'T BE.
HAVE YOU HANDICAPPED THEM IN ANY
WAY FROM THE CHINA TRADE
SITUATION TO THE SHUTDOWN, TO
SOME MORE INTERESTING QUESTIONS
ABOUT HOW FAST WE'RE SLOWING
DOWN?
>> I DO THINK THE SHUTDOWN IS
HAVING A DELETERIOUS EFFECT ON
THE ECONOMY, PROBABLY NOT AS
MUCH AS WE'LL READ IN THE
PAPERS.
BUT I WILL SAY, FOR EXAMPLE, WE
WANT TO LAUNCH A FUND ALREADY
BEEN APPROVED.
WE NEED THE LAST SIGNOFF TO GET
IT OUT THERE FOR OUR CLIENTS.
YOU KNOW, WITH THE GOVERNMENT
SHUT DOWN, WE'VE NOW, IT HAS
BEEN PUT ON ICE SINCE THE
BEGINNING OF THE YEAR.
THAT SAID THOUGH, I DO THINK
THAT IS PROBABLY OVERPLAYED TO
THE DOWNSIDE.
CHINA, HOWEVER, IS REAL.
I MEAN I DO WORRY THAT, WHAT I