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Ted Oakley – TD Ameritrade – June 18, 2020 – Video Transcript

Stocks continue to lead the markets higher or is it something else Ted Oakley’s with us founder of Oxbow Advisors. Ted I always love when you’re on with us. You give us some great macro perspective today. We really saw the market searching for direction a lot of back-and-forth hovering around the unchanged line. And of course, there’s always the outliers, you know, Tesla closing above a thousand Apple hitting a new high yesterday, you know, those kinds of names are a lot of fun, you know Peloton in the work from home stock.

But what’s your big picture when you look at what’s going on and take all the factors in?

Well, Nicole, I think what happens is for a little while longer as long as they keep turning the money out. You’ll continue to get the markets up. You know, I don’t know how long that lasts maybe another couple of months or so. I know the PPP will finish up here in the next number of months not completely. But but if you look at the other eight or nine pieces, they have out there the lot of money out there and then they’re buying the bonds this past week. So you’ve got a fed really that’s

completely blown up capitalism and so it’s just now about momentum and then, you know, a lot of people play that game and they’ll go that direction that’s not something we like to do but I think you’ll see more of it.

Well, there’s a lot of support right now from the fed the markets have moved higher and exponentially thirty percent, right? And so do you think markets are overpriced right now? We’re fairly priced.

Oh unquestionably for us very overpriced. Not only that markets over price the stock market but the bond market as well. And if you look at what a lot of these issues have done that are basically walking dead after the FED has come in now. They’re trading at 15 – 20 % premiums, you know, they’d blown up a lot of things but certainly the credit markets in the stock market are well over priced.

Well for someone who has a portfolio that they look at and can trade I guess your recommendation then would be to take a little off the table. If you think that the run-up has been pretty great. And you takes and you peel some off that being said for a long-term investor. What would be your advice?

Well for longer term investors, I mean I’ll give you an example someone comes in with new money today and they’re in the stock market for us. You know, we’re going to buy companies that we think over the next three to five years can do well and won’t get disrupted. That’s the problem with so many companies today. So we’re looking at companies that can still make the earnings still make the dividends if they pay one and they don’t have a lot of debt. All those things will make a lot of difference over the next three to five years.

That’s the problem so many companies out there if you take the bottom 400 companies in the S&P 500. I’m not certain they’re going to weather the storm as well. But you know, we’ll see but that’s what we look for and that’s what I would recommend for investors to look for.

I know you like growth names you’re mentioning them now dividend-paying stocks. What are some of the go choose for you when you’re setting up a new portfolio? You probably have your five favorites, you know, maybe it’s a sector, what do you look for?

Well, obviously we own technology because the you know, it’s a low debt area Microsoft is our biggest holding. Oh and it has been for the past three years really and that’s in the growth portfolio for us. You’ll see in there. We own other things as well though. We own Healthcare. We’ve got a we’ve got a quite a quite a large holding in a number of things but their largest would be would be would be obviously technology. On the dividend side, we have we run another strategy called dividend growth and it has a lot of different things in it. If you look at it, we have Unilever and Nestle a number of drugs Pfizer, Merck, Novartis things that pay a good dividend and we think they can continue to pay that dividend as you go forward. So it depends on whether we’re doing a growth or a dividend portfolio, but but but that’s what we’re looking for.

What do you think of some of these names that are a little newer a name like Spotify for example, which hit a new high, you know making deals with Kim Kardashian and boosting its podcasts and content or maybe a name like Zoom video or Peloton any of those names sort of grab you at all.

Well, it’s not the type of company we would buy into Nicole and not because I don’t think they’ll go higher. I think they have a lot of curb appeal right now and people will buy them it but for us we’re looking for fundamentals and the fundamentals are out are overpriced and a number of those even though I’m not I’m not surprised that they’re here and go higher. It’s just not the type of company, you know that we would buy and we certainly don’t buy any of those companies where they’re not making any money.

Right and I’ll tell you a Microsoft has been a great one. No doubt Microsoft over one year is up about 45% Ted so you doing pretty great. Ted Oakley founder Oxbow Advisors. Thank you so much.

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