Lakeview's Scott Rothbort Likes Glaxo and Whole Foods (Audio)

secession from hampering global growth. The SMP five hundred has erased its loss for the year, a Goldman Sachs index of the most shortage shares is up the most since and Britain's foot SEE one hundred erased its post brexit losses with the six point three percent gain over two days. We talk the markets every fifteen minutes throughout the trading day on Bloomberg Radio. Dow Industrial Average is currently have two hundred seventy seven points one point six percent trading

at seventeen thousand, six hundred eighty seven. SMP five funded up thirty four points one point seven percent to two thousand seventy NASTACK up eighty eight points one point nine percent to forty seven eighty West Texas Intermedia crude oil but dollar fifty eight to barrel three point three spout gold up five dollars ounce did seventy ten year treasury down twelve thirty seconds with the yield of one point five zero percent. And that's a bloomberg business flash. Catherine Cownderie,

thank you so very much. A sharp sell off on Friday, three days of gains. Now this week, as markets bounce back from the breggsit concerns, is it time to put some money into e t s and if so, which kind? Let's go back to Katherine County for today's e t F report, brought to you by National Realty Providers of Satisfaction Guaranteed New York City Realty Investments see them at n r i A dot net. Here's Catherine Cowndry now,

market turmoil can create some opportunities. It did for David Kotak, the chairman of Camerland Advisers, in the wake of the UK vote to withdraw from the European Union. What do we know that will now happen for a long time. We're gonna have low, low interest rates longer, longer, longer than going to be zero in Japan, zero in Europe. After the Brexit vote, investors pushed back. That's on federal reserve interest rate increases, pricing in just a ten percent

chance for higher borrowing costs by February. What does that say for housing in the US that's not impacted by Brexit. I we took up our weight in the cell off in sectors like consumer discretionary in housing. You can be opportunistical one side. On the other side, k Talk says it's time to reassess other holdings in light of the volatility caused by Brexit. Co tox for am uses et s to invest in equities. That's your Bloomberg ETF report.

I'm Catherine Cowdery. You're listening to Taking Stock with Kathleen Hayes and Pim Fox on Bloomberg Radio. Brexit took a big toll on the stock market on Friday and actually also on Monday, two days down now two days up for the U S stock market sn P five hundreds still though, however, stuck between two thousand, one hundred. It seems too many people. So where do we go next? Is the Brexit impact going to fade? And what about

those polls? If you like to watch numbers and stocks and think about statistics, why did they go so wrong. Scott Rothbort is here to answer all of these questions and more, President and founder like you ask that management also teaching at Satan University. Niversity, that's right university. So we're really glad to have your bas Scott. Let's start with Brexit. First of all, you had raised some cash

prior to the Brexit vote. Why a little bit? Um, We just felt that some of our stocks were just over extended, and um, we paired back a little bit, not a tremendous amount. Do you have any concern about Brexit? You know, I really didn't and I still don't have

any concern about Brexit. And and the reason is because, frankly, I've been in this business long enough, and I've seen dislocations, and I've gone through things like the Russian coup and the invasion of Afghanistan and flash crashes, and we know what happens in the long run is that the market, while it may correct, it's also self correct in the

other the other direction, and it'll return to normal. And so we expected that once the Brexit vote took place, whether it was to remain or to leave, that markets would have a reaction and then that reaction would then be reversed. So, uh, you teach at Seton Hall University. Uh in over there in South Orange, New Jersey, just part of the tri state area, the Greater New York City metro area. I like to think of it as statist statistics. And you're in the world of business and finance.

What what do you what have you made of the wrongness of the polls? Okay? Um? Well, first of all, Seaton Hall has a fabulous polling center, sports polling center, which I've had the opportunity to participate in from this point of view of being able to pull people, and of course they we do it based upon some sort of you know, sports themed um question. For instance, we did a sports poll I think a few months back

talking about all of these online gambling sites. Um. And so I I understand what it is like to put together a pole and be on the phone and trying to ask people questions and and how you get the sampled data. But I don't think that people quite understand when they look at political polls these days, that these political polls can be crafted in such a way that

they are pre biased. And there's something else in which we have we call observer bias, where actually the person who was taking the poll, who's making the observations, can actually skew the data and information by the way which they ask questions other people they select to answer. I'll give you an example. My son UH, and we live in Nevada, was phoned up and asked about Uh was

asked to participate in the poll. He said who he would vote for president as being the first question, and then he hung up on him didn't complete the poll. Now this wasn't a bad line disconnection. Clearly. What happened was they didn't like the answer and they were looking to get some sort of predetermined response. Another way that you can kind of fix the polls, so to speak, is you can limit the population of telephone numbers you get to certain area codes. So and the other problem

is that people don't understand that. You know, if you do a sample of people and you get them to respond, you have a margin of era of three for that. Um. Well, um, that may seem like very little, but when you're doing a poll for the entire United Kingdom in which thirty some odd million people we're going to vote on a very important issue, trying to set up a series of poles just for a thousand people or or so. It's very hard. So the vote is in though, regardless of

the polls. And you say in a recent piece there's a new normal the world will have to face. People

need to change their premise as investors. What does that mean? Well, as investors means that if you have a bias going in if you think that, for instance, if your if your bias was that the world is going to fall apart because of brexit um, and it's not going to fall apart, well, then maybe able to take a step back and say, well, perhaps I was biased going into that, and I didn't do my research, and I've got to

look at the world a little bit differently. Now. I have the advantage of I grew up on the East Coast. I grew up in Brooklyn, live in Manhattan, I lived in Tokyo, I lived in London. We now live most of the time in Henderson, Nevada. UM. So I get to speak to people from all around the world. And if you speak to people, just for instance, on the coasts, they think differently than people who maybe in the Midwest. UM. And unfortunately what happens is that people who live on

the coasts. All right, Well, um, project their opinions about the rest of the country and the rest of the world based upon how they think. Well that that may not necessarily the same. And we're seeing this take place, whether it's in terms of the elections or gun control or when' that we should have a sugar at tax and and so I think what people need to do when I say change your premise is understand both sides

of the argument. Well, that makes sense because this presidential election to the United States is going to be potentially a very big deal. I want to ask about a couple of individual stocks though, Um, you also said this note that you took advantage of the panic to buy some shares of Glaxo smith Klin. Of course that's a big British pharmaceuticals company. Is that something other people should be looking at or is it more just a post

Brexit vote trade. Well, we had a wonderful opportunity to bide, especially in the pre market on on the Brexit panic day, um, which was Friday. Uh and uh. We saw that the price of the A d r s went down because the price of Glaxo stock in the UK went down, but also because the strength and dollars, so you've got a will benefit, so to speak, if you're out there buying stock. Um. But we thought the stock was cheap enough.

We liked the dividend, so we bought it both for our growth portfolios but also for our dividend value portfolios. And if anything, UM, when I look at a stock like glack Cell, which makes pharmaceuticals, I think that that is somewhat more protected than from the potential Breggxit problem because everybody needs pharmaceuticals around the world, and they also

have patents. If we're talking about an industrial company, UM that's maybe making widgets, let's say, as we say in academia, then maybe I wouldn't want to buy a British widget company. Buy amongst the briggs it rubble. You wrote about this yesterday Whole Foods. Why and if there's no the brigsit rubble clears up a bit, is a whole food still a buy? Well, Well, we saw a break and with whole foods and few things and and and as you

know I follow food and restaurant stocks. We talked about this quite often on Bloomberg and by you talked about my commentary of people can get my commentary for free on www dot Lakeview Asset dot com and we call it my gut feeling, uh, and I published it a few times a week. But I've had my eyron Whole Foods. I've been out of the stock over the years, and it's got clawbered recently, really clobert um. They've had some problems, uh,

some operational problems. Their margins have contracted, Uh, growth slowed down a little bit, and the stock has come down tremendously this year. Uh. The stock went x dividend this week. We start an opportunity by it before it went ex dividend. And also what we noticed was that when all this fallout from the brigit was taking place, that actually Whole Foods was going up, was doing much better. So I was being a little contrayed and said, well, people need

still need to buy food. We heard about the sugar tacks in Philadelphia. Let's step up and buy some cheap Whole foods. Well, congratulations Mr Rockport, the finance professor, and he just told you how you can follow his very interesting commentary. He's present Founder lake Usset Management professor at Seton Hall University in New Jersey. I'm Kathleen Hayes, this is taking stock on Bloomberg Radio. Yeah,