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tv   Barrons Roundtable  FOX Business  November 26, 2021 10:30pm-11:00pm EST

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the thanksgiving table and beyond. that is what is going to make us come together as a country and live up to those ideals. gerry: that's a great note to and don, coming together as a country, we need more of that. thank you for coming together. thank you very much for joining us. that is it for us, next w w w wk more in-depth interviews, thank you very much for joining us. >> "barron's roundtable" sponsored by invesco qqq ♪ ♪ >> welcome to the special edition of "barron's roundtable" it's a hot market buyers guide. i'm jack otter. both begin or in season investors want to know more about. first up crypto. digital assets belong in your portfolio? , how do you buy them and how can you reduce only them, electronically.
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rick will explain. later stocks are almost sensitive as they were at the height of bubble. how do you find value in this market. wrist downed shows his techniques. one of the biggest purchases as their car whether it's used or new will find a how to get the best deal from a man who has purchased and tested more than 150 vehicles. car expert mike. on the bearing roundtable ben livingston, carleton english and jack hough. joining the panel for the first time, personal finance expert in the founder of digital assets of financials rick element. great to see you again. >> you too, thanks. i want to get right into the hot market, digital assets they are in their infancy but they produce mine boggling returns and volatility. it's a debate whether there a fad or represent the future. to be honest the fact that the
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staple center will be renamed gets mike and senses tingling. skeptics say no value, you've heard this before, why do you think it should be part of the investment portfolio? >> it is here to stay, there are tremendous commercial applications that will impact in a good way global commerce and unprecedented way. this is a big deal of the invention of the internet itself. the internet was to connect people together. this connects money and there's nothing that moves the world more than money. this is a very big deal if you're very skeptical of naming this date will center they sell the first $700 million. jack: that sounds like an awful lot to pay for something. you know the old saying when a company gives naming rights that's not very good for the stock. >> and happy good for but it does demonstrate how we
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got into the mainstream with digital assets. it's not a fad for the simple reason when you deal with the fatted no commercial benefits. you look at beanie babies, their cuddling to hold, there's no commercial use. with bitcoin and other digital assets, there's tremendous benefits for commerce making transaction faster, safer, more transparent, lower cost that is not what you get with the beanie baby. >> jack hough, if investors put crypto in the portfolio, what kind of percentages are we talking about and should they be trying to find the blue chips of the bunch or should they do just the opposite, should they go for the ones that are the most volatile that they can process and put up a little bit of money to make a lot. >> let's not get carried away this is an emerging even though it's getting in the mainstream. there is a lot of uncertainty and a lot of developing. my attitude is 1% asset
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allocation is plenty. this shows a mere 1% allocation is enough to materially improve the return but if it blows up and goes south and bitcoin becomes worthless. the 1% loss will not interfere with your financial security ability to retire. 1% is plenty. should you buy bitcoin which has the majority of the market share, almost 3 trillion-dollar market, sure that's a great place to start. nobody got fired, remember the old saying in the 60s. bike bitcoin and call it a day. if you want to be more progressive play with other coins. i would suggest sticking with bitcoin, theory m and tell you no more. jack: another question that we got from the viewers, carlton brought that out.
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>> just curious there's plenty of people have not purchased crypto currency, bitcoin and others, what's the best way to do that, and you go through brokerages or are there other ways to do it and how should you think about the custody of those assets. >> is a little confusing it a good way because there's now so many options you can go to an exchange litecoin base or gemini, you can buy a proxy stock like micro strategy, added to your portfolio because that tracks the price of bitcoin, there bitcoin future ets available, otcs security that let you buy bitcoin, ethereum and other digital assets. you can also buy stocks and publicly traded bitcoin mining companies or in the exchange of coinbase. there are even ets that invest in infrastructure at the pick and shovel approach. my attitude i like diversification, do a little bit all, be directionally correct and that way you will be precisely wrong. >> if you do on bitcoin can you explain the cold wallet, how that happened and where is the right place to store?
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>> when you buy bitcoin directly from an exchange your account is online and that means you're connected to the internet. hackers are connected to the internet to, they could steal your money if they managed to get a hold of your account, your password and et cetera. one way to protect yourself is to tell your exchange to move your money from a hot wallet, on the internet to a cold wallet storage, they take your account and move it to a flash drive and store in a vault not connected to the internet. >> this is ben livingston, can i get the exposure to bitcoin and other crypto's that i want from going from the crypto index or even like micro strategy. >> yes disclosure on an investor lies in the crypto top ten crypto index list. how do you know which coins to buy, we talked about do you buy the blue-chip or the younger aggressive growing. that's with the ten crypto index
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fund does. there are always you complain the space. this way you can have directional exposure even if you aren't buying bitcoin exactly from exchange you're gonna find that the tracking movements are pretty darn accurate. >> this is a fascinating area we will be talking about in the coming yrs. er b tdeo ararontinuesnues. ikrs likar l ar aaravougharavou tfind tg sincktotto fai ar pcee
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jack: welcome back, number two on hot market buyers guide, stocks, interest-rate, height and valuation is leery of getting into the market.
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my next guest says you can find businesses who stocks will do well to the cycles. chief investment and renowned bill nygren drives me now. thank you for coming and. jack: by one measure the market is in territory that you've only seen once in your career the schiller price ratio isn't nearly 40, the only time it's been this high was bubble. i realize how do you think about owning equities, what did you take away from 1999 in 2000 that you're putting into play right now. >> one of the most important lessons from 1999 in 2000 is when some of the market gets irrational it does not mean the whole market is irrational. i think that's very similar to the situation were in today.
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you mentioned the schiller index which averages 20 years of earnings. if you think there's going to be a global pandemic every 20 years, if you think there's going to be housing led great recession every 20 years then stocks are pretty expensive. we don't have the opinion into us the forward multiple which is half of the schiller level 20 times earnings is more indicative for the market price. jack: you have an eclectic portfolio. you mentioned the financials and energy, you also have disruptors like netflix. one of the hallmarks of a company that makes it into your portfolio, your clearly not sector focused. >> we like a company that is compatibly advantage that allocates capital while and based on the stock price that they're selling out today, we think it's selling at a big discount to business value. a name like netflix that you mentioned may look expensive selling at 61. it's a number we don't think has much relevance. what we think is important when they add a subscriber we believe that as $1000 to business value either adding 25 million a year, that is 25 billion of value.
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the company sells a $300 billion market cap. in that way of thinking we would look at netflix at 12 times the amount of value is adding each year in a way like 12 times earnings. we think it is a cheap stock and globally dominant. jack: do you think the hub ads on netflix someday. we gotta move on to citibank. a very different company netflix is disrupting the incumbent. i see city as disrupted by a company like intuit which is paying customers one percentage point on the commercial checking account. cities pain five basis points. >> cities customers global business. that summer most important customer to them. they want to have one banking relationship with those around the world with them. sitting today book value is $80 a share. it sells at maybe 85% of that
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number. jane fraser who has just taken over as ceo believes within five years they can get return on equity up to 15%. we think five years from now the 80-dollar book will have grown to something like 110, if your 15% on that, that is $16 a share in the stock sells around 70 today. we think it's a cheap business in their business model is moving toward fee-based income as opposed to spread income. we think it's a great opportunity. jack: one more stock, energy, energy was a horrible place to be for ten years, it perked up recently. >> what we like about conocophillips is management mentality, if they can't do something with the capital that they are earning that they believe is competitively advantage and a high rate of return the given back to the shareholders. their recent analyst day they projected over the next decade value will return 90% of the current market capitalization to
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shareholders and at the same time reinvest enough in the business, a third larger than it is today. we think about the comparison there to a bond. if you own a ten year bond you get about 15% of your capital back over the next decade and at the end of the ten years it's only worth what you bought it for today. you can get that almost all of your capital back on 50-dollar oil, they do twice that much if oil stays 80 where it is now. the returns to the shareholders are so much higher today than what's presented then the bond market. it gives you a good hedge against inflation. jack: thank you for your insight and thank you for coming in. it's great to be with somebody in person again. coming up the special buyers guide to hot market continues. no one knows more about cars than how to get the best deal in consumer report
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jack: hot market number three, automobiles buying a car is one of the most expensive investments americans make thanks to supply chain is getting harder a limited supply of new cars dealers have the upper hand and used car prices have soared. here to help you get the best deal "consumer reports" car specialist mike quincy. thank you for joining us. >> my pleasure. jack: you purchased 156 cars and trucks over the past two decades or so. >> 154. jack: even that, subtracted to you not bad at negotiating with the car salesman. what tactics can buyers used to get the best possible price in this market. >> the best thing a car buyer can do when you're buying a new car is fine the dealers cost.
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not when they say will sell it to you around msrp which is what is going right now. you need to find out what the dealer paid for the car there's a lot of websites that have dealer cost information. you want to bargain up from the dealer cost not down from the srp. that has to be taken with a grain of salt right now because there isn't much negotiating at all when it comes to buying a new car because supply is low and demand is high. jack: often the advice is to buy a gently used car rather than a new car because the depreciation when you drive off the lot. has algebra change under the new scenario where used-car prices are skyrocketing? >> you're absolutely right it's almost as hard to buy used cars but generally speaking from an economic standpoint, if you can buy 2 - 3-year-old gently used
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car with a good reliability record, who else, "consumer reports", then you're gonna get the guest automotive value going. depreciation is the steepest in the first two years of a new car. you get around the third year and you bypass the depreciation, you want to find a car with good reliability, safety equipment and something you could see living with. >> more on that there's always been the art to buying a used car and with prices so high now has a strategy changed a little bit? >> i don't think so, the toughest part is finding the used car, just like with used cars, people going for suvs or pickup trucks. if you're in the market for a car in think maybe an suv, may be the better idea is to go for a sedan, smaller hatchback
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something that isn't quite as popular because those be easier to find. when it comes to inspecting a new car, you're better off than you think, you don't have to be an ace mechanic to know if the car has a moldy smell in the interior or if the carpet feels wet. all you need to do is use your nose to find out if a used car you're looking at my diversity been in a flood. >> in addition to getting a good price for the car i feel like you have to figure out how to pay for how do we get the best financing and avoid getting ripped off. >> one of the best advice for a car buyer is to arrange your financing before you go to any dealerships. by that you go to your local bank and find out what those rates are. one of the best ways to go about getting good financing was a good credit union, they usually have great rates, lined up before you go to the dealer so you subject to whatever dealer says, we can give you this car for a certain amount of money, getting a good price is when you
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do not tell the dealer how much money you can spend per month. you might walk into a dealership and see a bright red ford mustang convertible and say i've always wanted one of those and you made the worst when it comes to car buying and you fall in love and the dealer knows it and you say i spent 250 bucks a month on a car, they'll find a way to get you into that for 250 bucks a month. the problem you pay for the car for seven or eight years and that is a bad thing. >> is leasing something you never recommend for people or are there circumstances for which it makes sense. >> generally speaking from a dollar from dollar standpoint, leasing does not usually make a lot of sense, primarily when the lease is up you have nothing to show for the money you put out. you have to sign up for another lease or get a car loan. basically when you leasing your car payment never ends.
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i am a car guy, i know that i'm not really rational when it comes to these things but there's certain cars that i like, i like audi, bmw, porsche, that have a great appeal from a driving standpoint. the problem with a lot of these premium, especially german manufacturers, after the warranty is over the cost of ownership goes way up. jack: mike quincy, thank you so much, you sold your 65 mustang, maybe you will find a great porsche to drive away. porsche to drive away. up next were switching things
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jack: sometimes investors are
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best served by owning the assets everyone else hates. the goal is to buy low. a stock is cheap for good reason. tell us about the unloved investment that you recommend and where you think investors should fear to tread. >> take a look at the shares ms ci brazil etf, it is dropped 20% or more this year in the country's problems are extensive, bad handling of covid in the politics are met and a huge deficit but it's cheap and the commodity producers should benefit from the rising prices, is not a bet for the stain of heart but is looking very interesting. i would avoid peloton, roku, they have been getting crushed but they don't look like they're done getting crushed yet. jack: a strong stomach to invest in brazil, every little bit inattentive you could buy all of the emerging markets. what is your idea. >> i get a look at the alternate
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harvest, republicans recently introduced a bill to decriminalize marijuana. this is no longer a partisan issue is just an issue of settling the details. i think it is going to be going well for canada place. i'm going to tread carefully on the iq merger arbitrage etf. m&a has been hot in 2021 but were facing a tougher regulatory for deals going through and going in 2022. jacob bunch of cold goblets breaking up. i don't know the m&a will be as hot as it once was. jack: jack what you have. >> by verizon, 5% yield nobody wants to be part of it because they're worried about rising rates, bonds don't look like that, bonds don't look half that good. put the 5% in your pocket it is cheap i would stay away from brown-forman nothing against jack daniels and concerned about apple pie with whiskey going on with the flavors could be in a
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hard seltzer thing with the big sales boost and slower growth. in the stock is way too expensive for me. jack: flavored whiskey is something to avoid. thank you very much. all great ideas. to read more checkout don't forget to follow us on twitter at barron's follow us on twitter at barron's online [music] what comes to mind when you think of texas? cowboys? maybe the barbecue? how about a 72-ounce steak that is free if you eat the whole thing. but what if i said to you island living? no? well that just means you have never been to galveston. this island on the texas gulf coast is famous for its natural beauty and it is easy to see why. between galveston island state park and the moody gardens wildlife exhibits, living on this island


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