Aug 9, 2016|
Jeff Cox (CNBC, Market Update) by The Financial Exchange
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
We're joined now by CNBC's. Jeff Cox he wrote a story. And I'll just read that headline why the sell everything crowd has been really wrong I Jeff Sharia. Oh good so. Why how did these guys Cesar respected guys in talking about. Jeff go online Bill Gross Carl Icahn rate. These guys that sell everything the world's coming to an end the stock market's gonna crash how could it be so wrong. Well content they're buying in to a familiar narrative that you know kind of it everybody's waiting for that's the roof to cave in on this relish and started back in 2000 not a barrier that you would I've had conversations are there are multiple occasions where I've been really skeptical the market you know told you they you know. Some is confident and I'd I would really be on the lookout for a moment. In. It's been a rupture for the markets certainly there's a lot of fear about you know what what defense going to do interest rates going up and all the geopolitical things. That have happened pretenses and this and that put it just cut it seems that the markets still keeps keeps trudging in to keep keeps moving forward in others to people who have questions about these guys motive was maybe there are. You know the bit that maybe they're talking they're booked into it in reverse and trying to get people that sell because they wanna buy cheap. That kind of thing but it is getting to be a really popular narrative around the street that in. Big name guys stand truck in Miller at all also backed group of just saying. Look we don't like the market but. But so far they've been pretty wrong this year. The DA in terms of political risk. The it looks now and and it's still early got ninety days ago but it would appear they gonna have a Clinton administration does that take us on the edge off the stocks. I think it's added some certainty yet and it you know it's a really great point that it be because I I've heard that from a number of people in fact I've heard it not only about the market but these last two jobs report that we've gotten have been really good and I'm actually heard that expressed that this theory. Tech companies are getting a little bit work. Coffin it's because you're getting more visibility about the elections that they feel that. Hillary Clinton for lack of better term the devil they know who so that there would they're preparing for the future and there are actually started to get a little bit coffin page that we all know that the Borneo one of those old market back some. Is that that that the market books six months into the future om and so it does look like they're pricing and more hospitable. The administration coming forward and and and kind of start to see coffins coming back Google. You know one guy we didn't hear from two months ago was Warren Buffett he never comes out and says stocks are too expensive for 22. Two cheap. But I didn't notice in his recent filing he's sitting on 72 point oh billion dollars in cash. He's never had that much cash before so that brings me back to you know stocks being priced for perfection when you've got. Arguably the best investor in the history of investing sitting on 72 billion. Yeah look there's there's no question about army if you can make any number of arguments for wore white and why this markets risky. At this point it you can and our of Britain and innumerable times about the debt issues that we're going to be facing in the future and yes what does happen when the Fed starts to normalize. And and it just the whole other issue with. We we do kindness seem boosted being exhausted as far as profits go companies which have a harder time building their their top line findings so that there's been bad skills gap in the job market summary I think it that you can look at it and put it really comes down to. Is that money will always go where it's treated best and right now what he's following that path. Of least resistance into the stock market now Warren Buffett in particular I would say war is probably hoarding cash because you're looking for opportunities. So maybe in the back of his mind maybe he is spic at the market's gonna get cheaper at some point in the future by its. Knowing. Bought in the way he he invest that actually he just treats those instances opportunities to go back and and at scoops things up at that bargain prices. I remember back in 2009. Goldman Sachs Bank of America wells far amused by this company for pennies on the dollar. Would you remember that op Ed that he wrote in New York Times I mean that delicate at at the height of the crisis and Buffett published two op Ed near times that by America because I have yet in the which is was going out buys stuff like crazy in and Eddie was right it was a great call it which meets a great investment particularly its. Investment Goldman that he that is also is that. He robbed them he robbed yet it really did he couldn't happen to a nicer bunch of guys either. You know. Yeah Jeff folic. I let you go like I know you had a yellow paint the edges carefully now. Jeff Cox Smith CNBC joining us today and the financial exchange in you know and that's. That's always the problem okay Diana. I I've got a friend and I would describe him is neurotic. Ease neurotic and in news freaking out about stocks up. It's only you know arsenal have published the bigger message you know would you worried about I think I think that go down so come 10% 20%. Well I don't know he could be 50% that you're about 50% personal it will. They could but what do you do with your money if you sell your stocks today right that's that's what it always comes to you sell your stocks today. Woody and return. Well and in the big thing that I always. Counsel people when we talk about stocks is look you are going to have volatility. There will be ups and downs and there are going to be times when you say why am I doing this it is no different for owning a whole it is no different from owning a business it is no different from owning anything else out there that occasionally a little bit of work right on the edge in order to make things work but. When you look at it in the long run. That volatility is the price that you pay for the returns that you get if you don't want volatility nonstick in the backe gets zero point 01% what do you think about Buffett's 72 I think he's owed by somebody did I think he's looking for something abide. Energy he's got to elephant gun out again loves energy. I don't know who wants to get heavier and energy of the bop its value as we invest in energy projects are pioneers seeking going to banks I mean Buffett likes business he got himself. A lot of trouble we bottled those bank rate they started borrowing money from them he's going to be a problem. This week that you look at the percent what does he only 20% of Wells Fargo he's got a big chunk got a huge position and Wells Fargo. But he's also big client be borrowing money from them that the you know I think that's a problem that a guy like Buffett at that if you're sitting on 72 he could by General Motors. The kinds of things like a whole damn thing he not his style and I know like gravity like that just put it perspective. Realist is this antique looking good by GM Ford and tests and stuff cash left over. You know obviously he's got our ass kicking around the question is what does he want to buy. Buffett likes things that are cash cows even if the economy is struggling he likes things the get his hands on the can wrap reminder number awarded by Jordan's Furniture. You know it's it's going to be something that maybe fifteen years ago and Ireland have been buried Elliott owned and they sold out to to Warren Buffett. It's good company to sell to your area think of that right when you walk into a Jordan's Furniture we do know that its own it's about the company you now with a look at that let their companies can do what they one idea they sold off in October 99 notes about seventeen years ago now. I think when that type the company that Buffett want to buy you look at the last one that he ball which was Precision Castparts which was. You know that deal is. Closed as of I think January of this year but just you know again you're talking a big company is 32 billion dollar acquisition. In stable industry that he knew how to values so I think. That type companies not going to be as early in mean line name that you and I are familiar with the one before that that was what Burlington northern railroad yeah yeah he he likes to buy those types of companies. It's going to be something in the thirty to fifty billion dollar range. In stable industry you can really get its hands it could even be private and does have to be publicly traded company says he's he's done that before he. As always by public companies.