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What's Up On Wall Street - Debra Borchardt, The Street

Feb 27, 2013|

What's Up On Wall Street - Debra Borchardt, The Street

Transcript - will not be 100% accurate

Drank a lot of folks listen to this radio program to try to determine whether stocks are expensive weather stocks are cheap. And now you know market has run up a lot already this year had a terrific year in 2012. A it was good reason I think a lot of investors into the -- should -- be taking some of my profits off of the table and that's that's the question. And I don't know the answer that I do know somebody who does know the answer heard her name is -- or shark from thestreet.com. -- no pressure you don't. Nigeria the post I'm data in the pocket change all the time unpopular kind -- time and we're really seen. Didn't buy an area approach to the market because as you've got half of them to name the market going to continue going up and the other half expecting to use these incredible -- off. Right right well what's Italy let's go back to fundamentals blocking and tackling as I call it. What is the price to earnings ratio for the S&P 500 today vs what it normally would. It that's seventeen. Three which has. Normal average number at around fifteen. So. You have people saying you know what -- started to get a little right here. Whereas. You have other people that are looking at a chart on the can't import wet but because all the way to act eighteen avenue and inserted into Albania numbers -- You know what. It's actually down from where it was a couple years ago though. That looking -- -- is it looking for ordered the historical number that you're referencing their dead at that. OK so forward looking I think -- -- looking at 1415 to one. Now would day I guess one of the the bear arguments for stocks is that consumers. Are -- strap rightly view yet tax increases and that's spending cuts. You know everything's on the wrongly gas prices are going up. Do you think corporate America and -- traders telling -- they going to be able to. You are companies revealed continue to grow their earnings. Yeah you know that we've generally been hearing is that they're making cuts in different areas one. From what -- her promote the people is that a lot of payroll tax holiday roll back. What the real concern that consumers wouldn't keep spending we have certainly seen that in the January numbers. -- I've also -- a lot of companies -- it net debt. That wasn't their big concern for them their big concern that maybe comment. Getting Alder uninsured employees insured because now they have to do that and that they're trying to cut back within their companies. Expenses. Without raising prices again. Because the cut out. We expect that payroll tax holiday -- -- removed. That maybe people -- -- with these value menu choices and with discount at clothing stores now it. It -- like earnings were actually going to probably be okay. And that's that that's actually. -- up a pretty good perspective because they -- you -- that's that's the real rub the earnings are the you know -- that's the oil or the gas for the stock market you don't have strong earnings stocks are eventually in this aloft and price. -- wouldn't short term investor is say somebody's got to stock into. Mother yesterday and she says that pay for my daughter's wedding. In a few months should they be going to cash now should they sell their stocks to make sure they have the cash -- You know that's a really good question I can begin and it paid like that we yet you have to have that money -- and I -- the market in now. If you Wellington today look at it -- a little bit more of located and then -- And yet he's got a big expenditure coming up like a wedding. And the -- a pretty good level today and it went up again today you know -- -- -- pat barely a daily that the independent now. You know it's interesting because what we've seen as part participant in the market. -- mean a lot of weak demand and what we call we can handle it and people that are -- in the market because they have. And excited that they know that much performance. -- and jump out at first minute something you know bit negative comes now but. We we certainly have seen a very strong market a lot of people that started performance because they were so worried edit that out -- hands. And it meant a 100 move and market president about the -- behind the market's gone and 94% that's the big big move. Well what do you tell the personality. I can't tell you how many times -- meet somebody -- -- look at their portfolio their signal and bonds are short term bonds and cash yeah. And they didn't they did in 2008. In -- in there and they're still sitting on the sidelines with who it. He you know with what's the perspective at the street as a relates to unity they counseling that person. I you know like you have to look at doesn't long term -- if you try to get caught Japanese. Moved -- and try to time the market you're in you're always going to be hurt you know the opening answers. You know there's a lot of argument could be in a dividend -- -- the dividend dot that beat up because of the unit talking about tax increases in the accident did go up on dividends. I'm not really all that much. And I think you're right fourth this year the apparent. Yeah and I and I think that you don't that are deployed to -- a lot of keep. People pulled out of dividend stocks because they were so worried about the that taxes on the dividends are gonna go -- you know much. You know that's definitely a place to be because then not only are you going to get the performance. To underline the topic and you get. You know opening comes to do we need to put that and come back to work and reinvest the dividends back into the box I you know I I think that most of -- and how long term on the rise and you know maybe ten years. Fifteen years and and know when -- into the -- kind of horizon. You definitely don't want -- bonds because you're just missing now. Naivete that's the challenge that is the challenge and -- -- -- to your point -- in here's -- If you have a long term time horizon I think stocks make a lot of sense if you're short term if you have a wedding to pay for in the summer that you better be in cash so. Deb thank you very much. That's dead or shark from thestreet.com. Giving us her perspective on stocks definitely not -- You know that that that's what I learned from that they stocks that he can't say that there bargain basement prices on stocks anymore. I'd date -- we do when were most are in the next segment -- that that we at the door last finish up with I think it's going to be award. -- -- the question I have for him the news. Ben Bernanke is nearing the term the end of his term in office yeah that's right and so I'm my first question. -- is who is a better Federal Reserve president Ben Bernanke or his predecessor do you -- the predecessor Greenspan Alan Greenspan aggregate. That's that's going to be one of them. Topics that we talk about with -- you wanna mention another topic though in it has to do with treasury bonds. And you know nobody seen money lost in treasury bonds in a long long time as a matter of fact. One of the last times you saw big treasury bond losses was back in 1980. And the annual return on T bonds in 1980 was minus two point 99%. And after inflation. T bonds lost treasury bonds lost sixteen point 4%. Nobody understands that you can lose money at least the vast majority of our listeners do not understand you can lose money. While being invested in bonds as a matter fact from 1973. Until 1980 the average loss after inflation on treasury bonds per year was five point 95%. I have some fears and I think there's some genuine concerns that we could be entering a period of time similar to the late 1970s. If you share that concern and you would like to learn more. About bonds. And what would an interest rate rise mean for bonds this is what you should do we should call this phone numbers 781534. 9555. By dialing that number you will be entitled to a free report. It's called what would an interest rate rise mean for bonds there's a phone number called -- only have to do 781534. 9555. Is your number to dial to get that report 7815349555.