Miller Tabak's Maley: Plan For Post-Election Market Move(Audio)

are up the most in eight weeks. The SMP five Founders is on the verge of erasing a second straight monthly loss, helped by today's gains. We check the markets every fifteen minutes throughout the trading day. Del Industrial Average is up two hundred eight points, a gain of one point one percent, trading at eighteen thousand, three hundred fifty one. SMP five Foundered up twenty two points to gain of

one percent, trading at seventy three. NASTAC higher by fifty three points or one percent at fifty three twenty two. West Texas intermediate crude oil of twenty cents a barrel, four tens of a percent to forty eight oh three spot gold down five dollars fifty cents announced for thirty and the tenure treasury down twelve thirty seconds with the yield of one point six zero percent. And that's a

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for our Exchange Traded Funds report. OPEC's decision to cut production is reverberating throughout the energy industry and will affect a t s that focus on master limited partnerships or m LPs. That's the word from Jeremy Goff, director of Strategic Ventures for Tortoise Capital Advisors. It will reduce global oil supplies by about a million barrels a day. That'll somebody is going to have to fill that void. I think North American assets are going to have to produce

oil in order to fill that void. And so that's going to have a benefit across the energy value chain, so these assets will definitely be positively impacted. Goff's firm offers a Tortoise North American Pipeline Fund tak her t P y P, which contains some MLPs. There are currently more than thirty e t s in that category, and Goff anticipates for their interest and growth. I would say it's always primarily a focus for e t s because

it is such a big yield provider. Goff says these MLP e t s can fit into a portfolio in a number of ways, as an allocation to a real asset or as yield producers. He emphasizes the importance of understanding the underlying index and the funds tax implications. That's your Bloomberg ETF report. I'm Katherine Cowlery. This is taking stock with pim Box and Kathleen Hays on Bloomberg Radio. The stock market and the presidential election cycle. Here to

tell us more, Matt Maine. He is managing director and equity strategist at Miller Tabak and Company. Joining us from Boston home to Bloomberg twelve hundred. Are right, Matt Maylie, tell us about your history work well, it's funny. I initially wanted to look at what happens after a two term presidency comes to an end, because the last two times had happened there was a dramatic move in the market.

But as I went back all I went back all back to World War Two, almost seventy years and a show that it didn't matter how many terms right there any time there was a change in the person, uh it rose to the to the presidency through an election. I did not count those times when uh there was a death or or a resignation because those policies kind of remain the same. But when a new person stepped in, there's been a dramatic move in the stock market that

began right after the election. Every single time, about two thirds of the time it's been down, but a third of the time it's been up. So it's it's hard to say exactly which way we'll go, but people have to be prepared, I believe, uh, and start thinking about in advance, uh the odds that we will break out

of this range and be prepared for either eventuality. So how could you profit from having this information that you know that there's going to be a surge or a move in one direction or the other, but you don't know which direction. Well, I think number one is really is going to be key in your planning. Now, there are some things you can you know, you know, buy you try to invest in a pick up of volatility,

whether it be you know, the VIX and things like that. However, I think more importantly it's just a situation where you want to sit back and decide, you know, have a plan in advance. Now, don't you know most people go to their financial advisor in December or January to talk about,

you know, the upcoming year. I say do it now, because if we do, once you see the market moving, if you have a plan for each eventuality, you're not going to panic and sell everything if the market starts to go down, and you're also not going to even if the market goes up. People tend to just, you know, well let's buy the you know, the hottest thing, and that's not always the best move. So if you have a base plan in advance, you can kind of sit back and decide you want what you want to do

once you see the market making making its move. Now again I will say this, I'm not doing this for self serving purposes. Motorita back that really we really talked to institutional investors, not individuals. So, uh, my advice is to go see a financial advisor. And I mean that

in a in a non a self promoting way. I guess at my point, no, we I I think I think we take that, Matt and and I just want you, if you can, to step after just a moment, because you know, if you take a look at the money that is made in any asset class and you chart it, if you put it together and you draw a nice line, and you ask people where should you have purchased this asset, it's usually at the very bottom. It's at the very

valley of the line. And as a result, you look at what the news was around those events that brought it to that conclusion, and you finds a lot of negativity that maybe you should buy into exactly. I think it's funny because the last why I say that people when things turn around, Uh, people tend to chase the winners, but they're usually coming to an end of their of their cycle. The one thing to know too is, of course,

what we saw. We had a big sell off that began right literally on election day when Obama was elected president and it sold off over. However, that March provided one of the best flying opportunities of all time. UH. So again investors need to be nimble and have their plans set up in advance. But I totally agree. You know, right now and with the market valuations high and the markets near its all time high, uh, the odds that this move will be to the downside, but you want

to be prepared to uh, you know, scoop up. And I guess another important point to make is it unlike the big moves we've had recently in the last year too, when we've had ten to fifteen percent moves, these post election moves usually last at least nine ten months or even a year year and a half. So I think whatever we get, it's going to be a long a longer process than we've seen in the past, So we

want to be prepared for into advance. So with the VIX, the volatility index right now down eight and a half percent, two days down one point one seven, trading at twelve point eight five, would you concur that it is uh at a level that indicates complacency. Yes, I definitely think so. I mean, you look at what's going on with with with Deutsche Bank. And I'm sure you guys have been talking about all day long, and and I've been hearing you talk about it when I can be when I've

been able to listen in. And the thing is is that I don't think Deutsche Bank has got to go under Stocker go the way of leaving brothers. However, um, look at what's happened the markets. That stock is down over and the stock markets done nothing that that we are way too complacent because people kind of think that, well, it's not going to go out of business, so therefore

everything's fine. Deutsche Bank still has issues. I mean the whole banking I don't want to say the whole banking system, but banks in general, with these you know, low ultra low registrates, negative interest rates, zero indust rates, it's gonna

be hard for them to make money. And so therefore, I think the markets, the complacency in the marketplace is higher than most people realize because and even in our own stocks in the US, they have badly lie the S and P. And I think it shows that maybe people are a little too complacent with the way the banking system. We've gotten too much into this situation where, oh my gosh, if it's gonna be negative, it's going to be a disaster. Well, that doesn't always happen. It's

just it has. It has happened the last two times for us, but usually it doesn't. And my point is that that the chances of the of this next move being a down tent or is not out of the question. It's not the end of the world, and let's take advantage of it. But just because it's not going to be two thousand eight all over again, doesn't mean it still can't be a painful one. This idea of taking

advantage of a market move. When someone sells there's another buyer that may step in, you've got to have that ready cash in order to make that kind of trade exactly. You know, it's just the people get too too much caught up in what's going on at the moment. You know, everybody kind of says, don't panic, don't panic on the way down, but people can panic on the way up too. So when you've got that plan in advantage, you sit down and talk to your financial advisor. Have you know,

you've you've got your your your your plan. You've always had a plan set up, Do you want to tweak it? How do you want to take advantage of it? But when you have the plan at least some sort of a base plan and based in both, there you know two plans for both eventuality and so that when it comes to it, you can sit back and make an intelligent one and not one where you're where you're panicked

in either direction. Do you believe that institutional investors panic or are they just so powerful that they're able to battle against each other and whip saw the market in a way that we perhaps have not seen before. Well, that's certainly the case. And when the one thing is that for for panic for them, um is they tend to be because because they're in the markets every single day and looking at them, looking individual companies, looking at

trends for individual industries. So so the panic isn't not the so of situation. But what they do have to deal with sometimes is on the downside is forced selling, where it doesn't matter what they think, you know that even though they know things are are are are overdone to the downside, that there are assets that have value exactly, but they have to sell because they're getting the mutual from redeptions or a margin call because they've got too

much leverage. But the other thing happens to the in the other direction, where sometimes they get what I call performance fear or the markets going up. And I got, you know, especially at the end of the year, when the market's going up. At the end of the year, you might think the world's gonna end next year, but you still got to be in there in December, because you all your measure two is the end two towards

the end of the year. So now the institutions are definitely a different animal, but they can still have these fear greed situations crop prop up for them. Matt, just really briefly, because we're going to the clothes here. For the quarter, for the month, s and P five hundred is up more than twenty two points, the Dow is up more than a hundred and seventy eight points. Give me about ten seconds. What do you think of this? I think it's a short squeeze on shadow that Deutsche

Bank is going to be fine. I think it will take a little bit longer for it to play out, so I would not be chasing this market right here. I want to thank you very much as always Matt Mainlee, equity strategist mill Our take Back, joining us from Boston home to Bloomberg Dred. This is taking Stock. I'm pim Fox. We're gonna take you through to the close on Wall Street. Next, this is Bloomberg. Yeah,