Well find out what the economy is doing right now. Larry, we just heard gary talk about revenue growth. You said earnings are doing well. Revenue hasnt been so hot. Its been objection right . Do you think youll see a breakout in revenue and market demand . I think its too late in the cycle for that. I think its been driven by cost control. One little hiccup that could come soon, estimated a 0. 7 rise in the cpi because of the rise in gas prices. The broader picture is youve got to like equities. All right. In the meantime, we are heading towards the close, and we will set a new alltime high for what has been a rather unloved bull market that weve seen this time around. The Dow Jones Industrial average will be closing at an alltime high that we last saw in october 2007. What does it all mean . Where do we go from here . Thats what were going to get into coming up in the second hour of the closing bell. Ill see you tomorrow. Maria will see you tonight as well at 7 00 p. M. Eastern time. Have a good day. And historic day on wall street. The Dow Jones Industrial average closing at an alltime record high. Hi, everybody, welcome to the closing bell. Im Maria Bartiromo coming to you from the floor of the new york stock exchange, and a jampacked floor with the dow blew past its previous high before the financial crisis in october 2007 after several failed attempts over the past couple of weeks. The dow shot up right from the getgo closing at 4 00 at 126 points higher at 14,254. That, the highest close ever for the blue chip average. A good day for the nasdaq and the s p 500. Lets take a look. Doubledigit moves there with the nasdaq composite up 42 points and Technology One of the winning sessions at 3224 the last trade on the nasdaq. S p 500 up 14. 5 point, 1539. Nasdaq way above its alltime record high which, of course, is above 5000, but the Dow Jones Industrial average at an alltime high tonight. Weve got full Team Coverage today on this historic day. Bob pins on the floor of the nys and Mary Thompson and Kayla Tausche standing by at cnbc headquarters looking at stocks and sectors that led the way and lagged. After weeks of waiting, the dow finally does it. What a march its been. March 2009, maria, 6,547, the Dow Jones Industrial average, and from there its almost been straight up, 117 rise in the last four years. What a run. As for today, well, we started strong right off of the bat. Thats because we had good numbers out of china. We also had a strong european open and that helped us, look at that move right off of the open here. It was a day for buying growth. Not only did we hit an historic high on the dow, industrials, hit an historic high and transports as well. Energy stocks and material stocks strong as well. Finally we had building stocks all throughout the board, Building Material stocks and Home Building stocks all strong throughout the day. Maria, 31 advancing to declining stocks. The only thing missing was a little bit more volume, about average for today. Back to you. All right, bob. Mary thompson running through the best and worst performers on the dow since the previous record hit back in 2007. Pretty good list. Reporter starting with the best of the blue chips. Home depot has more than doubled since the last record. Back in 2007 it was actually the poster child for excessive executive pay, but having shed its Building Supplies unit and focused on its core Retail Business its benefitted from a rebound in housing. Ibm, up 74 since the last record by focusing on Servicing Software and emerging markets and mcdonalds, up 69 , thanks to the fast food giants push into new markets and its ability to remake its menu to drive sales. Now a look at the losers. Hewlettpackards inability to follow through on promised makeovers makes it the third worst performer in the dow since 2007 high. Down 62 , though its among the best performers this year. Up over 40 . Bank of america the best performing blue chip last year, but its a 78 decline over the last five years representing the persistent drag around the financial crisis like the mortgage giant, countrywide, and the worst performer on the dow since the last record high, alcoa, the Aluminum Company down 80 neither peak. Maria, back to you. Thanks very much. Every day theres individuals winners and losers but on this historymaking day we want to look at the sectors that have floored and others that have flo soared. Home depot and mcdonalds among the high flyers in the five years since the market was last at these levels, just two of the components helping the consumer sectors, staples and discretionary leading the pack, up just about 37 apiece since that last record. Health care and technology rounding out four sectors total that are in positive territory. Since that last real, for the rest of the sectors though, its been tough sledding. Rocky oil prices have been plummeting natural gas keeping Energy Companies in the red and similar commodity woes for industrials and al coa the single worst dow component in that time. Heavy cost burdens for utilities and telecoms in the last five years pushing those Companies Towards the bottom of the sector barrel here. Not one group is faring worse than financials losing half their value in the interim. Valued at most investors, maria. Dont expect to make up as much in this rally Going Forward. All right, kayla, thank you so much. Kayla tausche with the latest there. Will history repeat itself tomorrow. Will we see another new high . Joining us right now cnbc contributor michael yashikami and nathan back akand john and warren myers will be here with us from the floor of the nyc once hes closed out all of his trades for the day. John, to you first. Where does this market go next . Well, we think, again, steady as she goes. Still debating the fact that if this is a bull market or not four years into, it we like the fact that transports made a new high. We like the fact that transports are telling us something with gdp at 0. 1 . They are telling us that the oil and gas is a real story. We think that the transports are rallying so much because the oil and gas is is where the future growth of this country will be, whether its export or the fact that oil is going to give us a nice growth dividend Going Forward, you know. We see that a lot of the commodity stocks really havent moved that much, but yet transports are off the chart, so we think thats more of a u. S. Centric story, the fact that japan is obviously going to continue to ease their monetary policy. People are talking about china. Japans wages are 50 times that, the average employee in china, so people lose sight of the ball very quickly. Pikal, would you be telling clients at this point to take some profits, or do you want to keep risk on and keep looking for new opportunities to put new capital to work in stocks . Youve got to take profits, maria. Weve got stocks. For example, mcdonalds is a position weve owned for quite some time. Qualcomm is a position we own and chevron and Johns Johnson johnson. These are positions that are hitting alltime highs, and if youre looking at your allocation and making sure youre balanced, youve got to take profits. Things go up and things go down. Investors make the mistake of buying, but they dont sell, so i think you carve some of the profits off and you move into other assets that are undervalued that you think have opportunity Going Forward but youre absolutely right. When the market is at an alltime high you dont sit there and watch it you take profits. Pay a little tax and the last i heard when you make profits and pay tax, its not a bad thing. Nathan, what about you . You say we could see a pullback. What do you think . Absolutely a pullback, maria. Were playing a game called wheres waldo. In this case its where is the cash, right . If you look at the brokerage accounts by the new yorks own accounting, take cash long margin debt, guess what, theres not much money yet. Were in negative territory weve not seen in terms of cash levels shall i say since 2011 right before we got a 20 correction so the cash has got to come from somewhere, otherwise this isnt going to keep going. Corporations arent doing a lot of spending. Banks arent doing a lot of lending, and what im watching for, maria, the great rotation where people start buying stocks with their bonds. They sell their bonds. When Rick Santelli says to us, see whats happening. Getting killed over here on the bond side, thats when youll be able to say the rally might be sustainable on the stock side. Otherwise take profits. If youve got a kid thats got to go to college, a wedding, whatever it is, take some profits now because when the stock market gods push the chips out, they also pull them back. I dont understand that. Youre telling me that when the rotation begins where money is coming out of bonds and going into storks you think thats the beginning of the end . Well, thats the beginning of the end for the bond market, thats for darn sure. But thats all new money for the stock market. Not for the equity money. New money for the equity market. Great for equities but not the bond side of it. Thats what i thought. Good for the stock market. Absolutely. Great for the stock market, and i think the market will do great. But in terms of market capitalization it did not, so that means theres 1 billion less shares that were outstanding than they were prior, so the fact that home depot made a new high in terms of price but not market cap means when that rotation comes to the forefront theres going that much less stock for all that money to buy. Let me get to warren myers here. Warren, youre on the floor of the exchange. You just finished settling out your trades. Yes. From your standpoint, youre a i go on the floor watching the flow all day long. What happens tomorrow morning . Do you think the fact that we saw some selling at the end of the day today, that we had some sell imbalances at the end of the day, does that portend to a down open tomorrow . Not in the least. May actually happen that way, but one does not necessarily indicate the other, by any stretch of the imagination. You know what, weve been looking at and seeing is just strong underlying momentum, upward momentum in the equity markets for quite some time. You look at the transports have been very strong hitting new highs along with the dow, thats a very positive sign. Net cash flows into equities has been increasing over the last five, six months as opposed to deficits. Thats a very positive sign, and the other thing we look at a lot down here is the is the bullish and bearish ratios, and they are not signaling anything too extreme yet so i think theres a little bit more legs in this upward momentum, and i think this market can continue a little bit higher. Go ahead, john. This market is 13,7 from a forward pe, 16. 5 would be about where you would expect it to be, so weve got only at most 20 , 25 less if we are in fact getting to the end of a bull market. Certainly a time to be cautious if you havent been in this market, for sure. John, where do you see the conviction . Tell me what stocks and sectors investors really wanted to own the last month or so. I think we saw a lot of money starts moving to the medical stocks actually because of obama care, very strong interest in housingrelated stocks and financials continued to do well. Mortgagerelated stocks, the fact that fannie and freddie are moving out of market. Thats put obviously impetus into stocks into mbia as well as mtg, so those stocks are doing very well off of some very good levels as well. Were seeing good conviction as well in the energy stocks, right . Again, you know, back to the oil and gas story, transportation. Warren buffett was on your station the other day saying that his Railroad Carloading to terms of petroleum are off the charts, so even though the gdp is still just 0. 1 , theres different sectors and stock picks are real having their pick of the litter right now. In terms of Going Forward, we think that as long as rates stay low which we expect them to do and as long as the peak to trough in terms of s p earnings, the trough was 92 per s p earnings back in 2007, usually every ten years s p earnings probably almost doubled, so if we put a double on that and lets say 75 , a 160 handle and a 15 multiple on that, you know, still looking at 2,400 out to 2017, so the economic numbers are not going to be Straight Line better. The stock market is not going to go a Straight Line higher, but over time the trillions that the fed is doing and the amount of technology, new technology that we have, theres no place bert to be. Thats really the question, isnt it. Mikeal, you said you want to take profits right here. Where are you going to go . Where are you going to put that money . You go into cheaper stocks. Okay. Stocks with more of a discount. I still think you have to keep risk on. You just rotate out of the higher risk stocks that have gone up, and i also want to say watch financials. Weve talked about this a lot, but financials are still deleveraging. Huge layoffs were announced by jpmorgan the other day. Citigroup is certainly going through a layoff pattern right now, so i think youre going to see these companies, even though they are getting killed on net interest margin, i think youll see these Companies Get more and more profitable. The money has been going to health care, i could see it rotating somewhat out of health care into cheap discretionary items, in other words, stuff that really is cheaper than retail, maybe the cost cos of the world and actually see it move into financials. Thats where i think the rotation will happen. Leave it there. Gentlemen, nice conversation. Appreciate all your time tonight. Well be watching this market rock and roll. Much more ahead on this jam packed edition of the closing bell, a record setter. What do you do now that the dow has hit the best level . Talking to wall streets top money pros including James Paulsen who helped over see 370 billion in assets and bob dole as well as the head of Starwood Capital group. Wait until you hear how he is allocating capital or how high or low they see the dow going from here. Back in a moment with all of they will. And billionaire steve forbes gives us his two cents and more on the market action. Youre watching cnbc, first in business worldwide. [ female announcer ] its time for the annual shareholders meeting. Therell be the usual presentations on research. And development. Some new members of the team will be introduced. The chairman emeritus will distribute his usual wisdom. And you . Well, youre the chief life officer. You just need the right professional to help you take charge. Welcome back. Get this. It took more than five years to reach the alltime high today, but the last time we saw a record break, the blue chip average fell 54 within the following 17 months do you to in large part the financial crisis so whats next for the markets that seem to only want to go up on the bearish side of the story is harry dent of hs dent, and our own jeff cox is also on the bear side. Bullish side, cnbc contributor ron insana and investment strategist James Paulsen. Good to see everybody. Thanks for joining us. Jeff, you think this is the best it will get for the marks. Youre expecting a sizable drop coming. Why . Maria, history is on my side. Look, when you look at the market, where we were, where we got to now. Every time the last 11 bear markets that weve seen this happen, the market has always had a major pullback. I think its not a bad thing. I think we dont need to get crazy about it. I think it could set up a very nice opportunity, but history tells us this is the way it goes. History tells it, but can you really compare any other moment in history to this moment when the Federal Reserve, ben bernanke and company have been the most aggressive fed keeping an environment where there is no alternative to u. S. Stocks . Thats a great point, maria, but look at the dow has gone up 3 1,000 of a percentage point in the last five years and the fed Balance Sheet has increased 275 , National Debt increased 78 , but bottom line here, markets are moved on two things. Fear and greed. We can talk about all of the other things we want to talk about, but fear and greed are the two main market movers. Fear always takes over when a market gets this greedy. All right. What do you think, ron . You dont think jeff is right . It depends on the size of the correction that hes talking about. Talking about a bear market, i absolutely categorically disagree. Talking about 5 to 10 . That can happen at any time. Thats ordinary in the course of what i think is a secular bull market, something that has been described as quite some time. Maria, you make a good point. When you talk about comparing to other market periods, if you look at the dow from 1929 after it crashed, and that may be the closest analog that we have to the experience of 20072008, it took 25 years for the dow to go from 381 in september of 1929 to get back there in 1954 after having fallen, you know, 90 . In this crisis, you know, we went down as you said 54 and it only took five careers to recapture the high. Policy matters. This time to a certain extent is different, and one thing would i say, interesting to note, nobody is in washington this week and wall street is doing really well. Maybe the message of the market is that our elected representatives ought to stay home for the remainder of the year and let this thing go on. Harry, youre calling this historic level today the top before the top. What does that mean . Were topping her short term and will see a small correction, maybe 6 , 8 , 10 and on the last rally that well come into the summer that well see divergences. Yes, this is the most Aggressive Central Bank stimulus ever, ever, ever but the worst demographic trends downward around the world ever by far and the highest debt ratios in history so this is a war between the fed and the fundamentals, and i think in the end the fed is going to lose, and were going to see a series of crises until demographic trends bottom around 2020. I think the most important number is 1600 on the s p 500, not the new high in the dow today, been expecting that, but thats when you go through a trend line, through the past two bubble tops, and its going to be very hard technically to get over that. If we get over that ill change my mind but i dont think we get over 1500 substantially this year and if we dont this year, i dont think we see that for a long time. Doug cass came up with some statistics about todays record high environment versus the environment we saw when the market hit an alltime high the last time back in 2007. Heres some stats for you, guys. Gdp growth, then 2. 5 , now, 1. 6 . Americans unemployed, then, 6. 7 million, now 13. 2 million. Americans on food stamps, then, 26. 9 million. Now 47. 69 million. The the debt outstanding, then 9 trillion. Now 16. 5 trillion. What does this tell you, jim . Well, i guess i agree with jeff there could be a correction at some point, maria, but i think theres still a fair amount of upside. Ive got a couple of thoughts i guess where we are today. One is compared to where we were, we havent gone anywhere from ten years but look whats happened over that tenyear period of time. The multiple in the stock market has gone from 35 times earnings to 15, more than a halving of its value while the bond yield has fallen by almost threequarters, the competitive bond yield, while earnings have doubled from where they were. Thats a massive absolute and relative revaluation but were back to where we were in 2007 but far more cheaper than we were then. Thats because the economy is so bad. Maria. Whoa, one person at a time. Finish your thought, jim. Okay. One other point. I think the catalyst thats been driving this last four years has been that things have turned out better than feared. Weve been worried about armageddon and the world never ended. Whats going to happen now is things are going to start turning out better than expected, and thats subtle but big. In other words, what if the Unemployment Rate gets to the 6s this year. What if it gets to the 8s . Come on. 6 isnt even possible. Where are we right now, 7. 9 , where are we right now . When if it gets to 6. 9. Lets talk reality. 7. 9 to 6. 9 in the next seven months. I argued for the 7s and got to the same response. Maria, lets look at theres been a drop because of the drop in the participation rate. Labor force has been growing 130,000 a month. Participation rate is near 30year lows. Thats why the rate is going down. Lets recast this a little bit. Number one, all those data points that were cited by doug cass, during the crisis, the government took on the debt burden of the private sector to bail out system. This was something weve never seen. A wise policy move because the alternative was the 1930s. Were going through a secular change in the economy. Were going through a major energy change. Manufacturing is coming home. Technological innovation and in turn housing, and i agree with jim, are the big positive surprises that overshadow what anybody else might be talking about. All right. Well leave it there. Gentlemen, great conversation. Thank you so much. Very interesting and important insights from all of you. Appreciate it. The rally took many by surprise, but not viewers of the closing bell. Bob predicted that on this program that we would make a new high in the quarter. Hes up next. Later a person whose name and capitalism go together. Steve forbes weighs in on how long the party on wall street may last, and before the commercial breaks today, well give you mini history lessons. Dont worry. No quizzes here, but it was october 07 the last time the dow made an alltime high. What topped the music charts back then . It was crank that by soldier boy toppinging the top 100 chart. Neil and buzz for proving theres nowhere we cant go. But, at some point. Giant leaps gave way to baby steps. And with all due respect, youre history. If you taught us anything, its that you cant cling to the past. If you want to create the future. Thats why, instead of looking behind. Delta is looking beyond. Pushing u. S. Aviation to new heights. All 80 thousand of us. Busy investing billions in the industrys boldest moves. Its biggest advances in technology. Bringing our passengers the best, the most spacious fleet in the sky. And earning more awards than any other airline. To show for it. So rather than simply saluting history. Were out there making it. Your Financial Advisor should focus on your longterm goals, not their shortterm agenda. [ male announcer ] join the nearly 7 million investors who think like you do. Face time and think time make a difference. At edward jones, its how we make sense of investing. A talking car. But ill tell you what impresses me. A talking train. This ge locomotive can tell you exactly where it is, what its carrying, while using less fuel. Delivering whatever the world needs, when it needs it. After all, whats the point of talking if you dont have something important to say . Only hertz gives you a carfirmation. Hey, this is challenger. Ill be waiting for you in stall 5. It confirms your reservation and the location your car is in, the moment you land. Its just another way youll be traveling at the speed of hertz. Welcome back. Is there enough momentum to keep this market rally going . Joining me now to break is down, bob dolt and at our headquarters mandy drury and simon hobbs joining the conversation. Bob, let me kick this off with you. You said it. You made your 2013 prediction on this program. You said we would hit an alltime high by now. We did. Nice going. What now, do you think . I think the path of least resistance, maria, is still to the upside. We have an economy thats okay, not great. Inflation is low. The fed is giving us all we need and theres not a lot of alternatives and stocks are the place to be by default or aggressively, whichever you prefer. At some point somethings got to giving right . Do you expect a move in Interest Rates to sort of turn the party around . Well, i think Interest Rates out the curve, not at the feds level. Well continue to creep higher. We were 150 not that many months ago. Were 190 today. They will continue to creep higher, but i think its a signal, maria, the world is less bad, and less bad is good news. It means the deflationary threat causes rates to move up a little bit and stocks to continue to move higher. It feels like it has been, but it wont be a Straight Line. It does feel like it has been actually. Mandy, its interesting to note that there were other Asset Classes that participated in the euphoria today, not just stocks. Oil up and commodities up like gold also higher, even though that hasnt really participated in this real, but very much an acrosstheboard situation in a number of assets classes today. Why . Yeah, you know, its really interesting. Im glad you mentioned gold because while the equity marks have been basically blowing their whistles and putting on their party hats gold has been sulking for the past months saying i didnt get the party hat. Remember, they used to trade together for some time. Like early last year, gold was kind of trading like a risk asset, just like stocks, and gold now has really been falling behind. Why . Well, i guess, you know, there a number of headwinds for gold at the moment. Atfs which have been sold down at the moment, a lot of big money selling out of gold, and there also has been a bit of a rotation out of commodities and into stocks which i think is one of the reasons that people that ive been speaking to say that weve seen is momentum in equities. Simon hobbes, what about europe, seems to have taken a back seat to the euphoria in the u. S. But not a lot has changed in europe. Yeah. Let me say here in the United States, if i may. I think the most important thing that ive seen in the last 24 hours is an offtherecord briefing of the c. O. O. Of one of the components of the dow 30 in which he said so worried about the cost of fixing the defendant sit that he was not investing in america anymore, not creating extra jobs in growth and one of the components of this rally has obviously been the fed and the drive to get people to buy the stocks with the dividends, but other components has been c. O. O. S returning cash to shareholders and buying back the stock. I worry that weve underestimated the degree of pessimism amongst c. O. O. S when they do that about how they see the future. A lot of people suggested we need growth come back big time in the spring in order to sustain this rally. This c. O. Yesterday was indicating he thought the path over the next two to three years would be so bumpy he wasnt prepared to extend his own business, and i think that speaks volumes to those that might be bearish of this market. Im sure thats true, simon, but at the end of the day what are the alternatives . Where is this ceo going to go . Returning the cash to shareholders. Thats an admission he cant find a safe place to put it and in his case he doesnt feel america is a safe place in fixed assets. Bob, what about that . The whole return to shareholders that simon aptly put the conversation that hes had with one of the ceos of the dow tells you really a another positive for the market, because whats happening at the end of the day, because of activist investors or because of just, you know, no ideas of what else to do with the money, companies are returning money to shareholders. Isnt that a positive . Doesnt that propel this market even higher . Yes, all true, maria. Companies are raising their dividends. S p 500, doubledigit gains in dividends and payout ratios are still low. The percentage of profits being paid out is still at a low level and you now have half the companies in the u. S. Stock market with a yield higher than the tenyear treasury. Thats way above norm a. I think underscoring stocks expenses. Why are they not investing in the American Economy . Why are they returning cash to Share Holders . Because of tax policy, i think. That is part of it. The s p 500 is companies headquartered in the u. S. But its not a u. S. Average, but its a global average. Earning surprises in the Fourth Quarter came mostly from multinationals as u. S. Corporations are investing and growing overseas, gaining market share, and thats why the stock market is doing a lot better in the u. S. Economy. Usually a stock market discounts what is happening 18 months in advance. I dont hear a conversation now today on cnbc much about where we will be in 18 months. I hear a conversation about, well, you should buy stocks because the dividends are higher than you get in the treasury market. Yeah. Well, i think there is an indication that the economy, the landscape is getting better. Perhaps that portends to whats going to continue to happen in the next 18 months. I would argue its getting better, maria, but its also the big downside. The big black holes that people are worried about, the probability of those in their minds is shrinking. Thats part of why the market is rallying. Im going to be on later on with you guys. Later on tonight for the special talking about those black holes or black swans or walls of worry, all the things that, you know, essentially this market has blown past and able to shrug off, and its kind of interesting when you look at it that way so ill be joining you later on tonight. Look forward to it. See you a little later. Thanks, everybody. Coming up a special guest you dont want to miss, the man behind the Starwood Hotel empire. Hell offer his unique perspective on the market action. Then, ill speak with somebody whose name is virtually synonymous with capitalism, his name is forbes, steve forbes. The last time the dow closed at a record, the average price of a gallon of gas, was, get this, 2. 76, a dollar less han what we are paying right now. Back in a moment. Tdd 18003452550 seems like etfs are everywhere these days. Tdd 18003452550 but there is one source with a wealth of etf knowledge tdd 18003452550 all in one place. Tdd 18003452550 introducing schwab etf onesource™. Tdd 18003452550 its one source with the most commissionfree etfs. Tdd 18003452550 tdd 18003452550 one source with etfs from leading providers tdd 18003452550 and extensive coverage of major Asset Classes. Tdd 18003452550 all brought to you by one firm tdd 18003452550 with comprehensive education, tools and personal guidance tdd 18003452550 to help you find etfs that may be right for you. Tdd 18003452550 schwab etf onesource tdd 18003452550 for the most tdd 18003452550 commissionfree etfs, tdd 18003452550 you only need one source and one place. Tdd 18003452550 start trading commissionfree with schwab etf onesource. Tdd 18003452550 call, click or visit today. Tdd 18003452550 investors should carefully consider tdd 18003452550 information contained in the prospectus, tdd 18003452550 including investment objectives, risks, tdd 18003452550 charges, and expenses. Tdd 18003452550 you can request a prospectus by calling schwab tdd 18003452550 at 8004354000. Tdd 18003452550 please read the prospectus carefully before investing. Welcome back. The Mission Statement for the Starwood Capital group promises in part to be, quote, a world class Investment Firm that identifies values that others may overlook, end quote. Here now to tell us about those values that he sees in this historic stock market, heating up Real Estate Market and the leisure market is the chairman and ceo of Starwood Capital group. Barry, always nice to have you on the program. Welcome back. Thank you, maria. Good to see you. Where do you see value in this market . We closed at an alltime high, so happy to close where the dow is at the highest level its ever been. Do you still see value in this market . Well, you know, i focus on the real estate sector. The dividends are obviously extremely attractive of the reits. Discussing this at our monday morning meeting where the reits havent been more active in acquisitions. I think the conclusion, two conclusions i think we came to. One, private capital can leverage more than the public stocks. The shareholders do not want the Public Companies to lever, even these historically low Interest Rates. Right. So youre not seeing a lot of the reits do a lot of acquisitions which is kind of curious about this point of the cycle, especially since their stocks have gone up, so they havent issued a lot of stock and not really competing heavily to buy properties which is good for people like myself and firm and we bought the shopping center. Weve bought a lot of hand and tripoint recently on the new york stock exchange, our mortgage companies, Star Property trust, has hit an alltime high itself today, so were happy that we participated in this record rally. It is interesting. I think theres also been a turnover in the management of many of the reits, not necessarily the entrepreneurs that found those companies, and i think sometimes i think they are probably just there to more maintenance and watching and managing the company for steady growth as opposed to their real wealthcreating entrepreneurs that build the companies and often were the ones that took them public. It is interesting, because it is fascinating to see that they havent really participated in this maybe, you know, very attractive spread between cap rates or yield on property and Interest Rates which are quite low. Interest rates are really behind this story, right . I mean, one of the reasons that real estate has done well, you know, one day were going to look back and say, wow, can you believe i borrowed at 1 , that i bought that house at 3 . Whats ahead . Well, i think the debt could be more important than the asset for private investors. We just borrowed for five years at 2. 77 , 80 of the Purchase Price of an asset, so its kind of hard not to get positive leverage, meaning that you can earn in that case 12 , 13 on your cash, so, you know, i think its an interesting time for private investors and property, especially if you think the company just mopes along like its doing at 1 , 2 and you dont need fast growth. Would you argue that fast growth would induce new supply and that wouldnt be good for the Real Estate Markets. At the moment theres not a lot of new construction and almost all the property types, clearly the Housing Market is turning around, thats in the United States, across the whole United States and stronger in certain areas than others. I think the fed is getting exactly what they wanted. Higher asset prices and bankselling properties and bidding wars. Were selling 13 multifamily problems out of the bank portfolio. We had 400 signed agreements, so its 425 i think is the number. Its 1 billion of base chi new condos we converted to rentals that will be for sale. They are great assets so they will abrigate you know, im sure the pricing will be good, but the buyer is going to get good assets and lower replacement costs and i think a very good risk reward investment for the investors versus the stock market, versus highyield bonds which are record lows themselves. The bottom line. Fair to say youre a seller in this market. Do you worry when we talk about alltime highs, that perhaps its time to scale back . You want to be a seller rather than a buyer here, barry . Yeah. Im very im nervous. When it gets easy in the market i get very worried because everybody is i call them intellectually hedged. Sort of think the market. They know all is not right in the world but they still are buying stocks and chasing performance, and the hedge funds had a bad year last year relative to the s p, so i see my friends, many of them leaning the hedge funds and taking on more risk and more exposure to keep up with the indexes, so i think for me that scares me, when everybody is sort of saying im worry but they are all invested, you wonder how much more cash can go into the market. Theres a Great Movement of money out of the bond market into the equity market and, you know, in our business, in the real estate business, the impact of foreign capital flows into the United States is definitely being felt. Theres nowhere to put money anywhere, and these guys would rather not take the risks in nigeria or argentina, they have got burned and in debt so they aring looking at us as basically a safe haven for capital. They look as property as an alternative for bond and when the government is buying 75 of all the bonds that tissues. And that foreign money is coming from asia, bear . From asia, from asia, from the middle east, certainly china, korea. Youre seeing it from singapore and also the middle Eastern Countries which are generally underweighted to the u. S. Property sector. You know, they have for a while we were on the black list while we were fighting the gulf war. They really couldnt invest here and today, especially with the nervousness back home, youre seeing more and more capital feeling comfortable about moving some portion of their assets herance and some portion of those assets is a lot of money. Yeah. It really is on the margin does impact. You saw this recent deal that korean investors are going to buy half of the zeckendorf building. Pricing is buoyant but their alternative is to buy 5year ponds that yield less than 1 so pret pretty difficult to beat that as a benchmark. Thank you so much. See you soon. Now what . Steve forbes on why he says we have a long way to go until were really back. Steve forbes will join us next but first, check this out. Back on october 9th when the dow was at this level, ben stillers movie the heartbreak kid. Back in a moment. [ indistinct shouting ] [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. Sales event has begun. Featuring the powerful gs. Just when you thought you had experienced performance a new ride comes along and changes everything. Get great values on your favorite lexus models during the command performance sales event. This is the pursuit of perfection. Welcome back. The dows run to an alltime high has been impress fbut steve forbes says the overall markets have a long way to go to get us back to where we were in the late 90s. Steve forbes joins me right now to talk more about it. Good to see you. Thanks, maria. Thanks so much for doing us. Are you doing i inflation adjusted, we really have to look at this market based on inflation, and it should be at a different level here . Yes. Dont get too excited about this. Its nice, ill take it, especially in nominal terms, but we have to remember we reached this in real terms in the late 1990s and since then the economy, for all the woes, is much larger, much pitcher and much broaderbased and yet the stock market is stuck. This is like the between the mid60s and early 80s, powering ups and downs and we didnt make much progress. A lot of people basically said this is all about the rally. I named this rally ben because this is basically an environment where theres very few alternatives. What kind of an impact is the action from the Federal Reserve having on the market, do you think . Perversely its hurting the market long term. How can you say its hurting the market . . We know they have created no alternatives in return. Over the short term its helping the market. But long term you say this is hurting it, why . Like steroids for baseball. It ultimately wrecks the player. The government is making it easier to make it borrow money for mortgagebacked securities and the like and Small Businesses, unincorporated businesses, households, have a hard time getting credit which is why the growth of the economy, 2. 5 in 2010, 2 in 2011 and 1. 5 last year. Thats not good. Not creating the foundation of Small Businesses creating the jobs and the Big Companies are the future. What about the skeptics who will say, look, if you cant borrow now at 1 , at 3 , when are you going to borrow . This is the time to borrow . This is like the old soviet union. Somebody said health care is flow but you cant get it. For smaller businesses, riskier businesses and the regulators jump on banks when they do it so banks have excess reserve, lend to Big Companies and lend to the government but not to the Small Businesses. Have you this perverse environment. The job creators, the real ones who create future prosperity, are having a hard time, uncertain time in getting credit. Not what you want. Its like rent control for housing. But Federal Reserve vice chairman janet yellin says she sees no reason for the fed to reign in the stimulus, the risks of not being not aggressive enough outweigh the risks. When you hurt the patient, hurt it more. If the patient is sick, bleed it more. Rent control, very good for luxury housing and poor market for people of lower middle class people getting housing. The markets have not flinched given even the dysfunction in washington. Keeps going higher. Sequester deadline came and went and same thing with the fiscal cliff at the end of the year. What gives . What gives is the extraordinary vitality of the American Economy despite all the abuses in washington and compared to what you see in japan, compared to what you see in western most of western europe, were in relatively good shape, but even eventually this economy will buckle if they continue with the perverse policies, raising taxes, piling on regulations and the Federal Reserve starving Small Businesses for credit. You think well see a correction soon . May see a correction, but just remember, the market keeps going up and down. Were not having that great leap forward that we are in the 80s and 90s. Let me ask you about another issue, and this is prince alwalid. Hes severed ties with the forbes billion airs list. He put out a press release stating prince alwaleed has taken this step because he felt he could no longer participate in a process that involved incorrect data. He says you have short changed him on this list. Hes worth a lot more than you have him down on the list. Well, first of all, he is very successful, 20 billion is not chicken feed. Said it should be 29 billion. We raised him 2 billion and explain online and in the upcoming issue which comes out tomorrow how we arrived at this figure, and, you know, 107 times earnings, very hard to do, so its a matter of scorecard. The man is immensely successful, but he thinks it should be higher and we feel 20 billion versus 18 last year is a good valuation so he wants it at 30, we say 20 and well see who is right in the next few years. Did you change your methodology . No, thats always been the same. Looked behind the assets and tried to get the real value and try to make we went out of our way. Put the highest multiples we could on most of the holdings that we could, and weould get it above 20 billion, so 20 billion, hes crying. He should be happy. Id be happen we 20 billion. Wanted to be in the top ten and says he should be in the top ten. Well keep following it. Well follow him, too. Even though he wont talk to us, well follow him. Always nice to have you on the program. Look forward to the list tomorrow magazine comes out. Up next, history today, but what about tomorrow . Our panel of market proems weigh in on the dows potential charge even higher still. Back in a moment. Here we are, me and you on the road and we know that it goes on and on [ female announcer ] youre the boss of your life. In charge of making memories and keeping promises. Ask your financial professional how lincoln financial can help you take charge of your future. Oh, oh, all the way oh, oh oh, oh, all the way its not what you think. Its a phoenix with 4 wheels. Its a hawk with night vision goggles. Its marching to the beat of a different drum. And where beauty meets brains. Its big ideas with smaller footprints. And knowing theres always more in the world to see. Its the allnew lincoln mkz. But we can still help you see your big picture. With the fidelity guided portfolio summary, you choose which accounts to track and use fidelitys analytics to spot trends, gain insights, and figure out what you want to do next. All in one place. Im Meredith Stoddard and i helped create the fidelity guided portfolio summary. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Welcome back. 30 seconds on the clock. Our panel will tell us if tomorrow we see another record high and why. We have laif ps midell and chad morganlander. Gentlemen, thank you for joining us. Each of you have 30 seconds on the clock to tell us what you want to prepare for for tomorrows opening bell. Laif . Sure, hi, maria. This indicator fell below zero on february 20th. Since then, today was really the first time that the oscillator has made a significant move back above the zero line. Tomorrow, well be watching this indicator to see if it can remain positive. This is a critical time for a new rally, because a decline back to zero is a sign of failure. Were watching factory orders, as well. All right, thank you so much. Chad, youre up. 30 seconds on the clock. You think we hit a new high tomorrow and what do you want to be prepared for . Two things tomorrow to look for. Factory orders that are going to come out. Were expecting a better than expected number, consensus has it at negative 2 kind of clip. And the fed beige book is coming out tomorrow. Well expect that all 12 districts are going to show an improvement within economic activity. Thank you. All right, we will leave it there then, if youre done, thank you so much gentlemen. We appreciate it. Well recap this historic day on wall street next. Stay with us on the closing bell. Back in a moment. I love making money. I try to be smart with my investments. I also try to keep my costs down. Whats your plan . Ishares. Low cost and tax efficient. Find out why nine out of ten large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. announcer scottrade knows our clients trade and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Voted best Investment Services company. Welcome back. We have breaking news right now on hugo chavez. Michelle . A number of Wire Services reporting that hugo chavez is dead. The 58 leader of venezuela apparently dying after a long battle with cancer. He ruled the country of venezuela for more than a decade and remember, they are a very big supplier, venezuela, the country, of oil to the United States. Though, it has declined over the years, due to lack of investment into the oil facilities. Nbc has confirmed that chavez has died. Big supplier of oil to the United States. It has declined because he began giving away a lot of it to other caribbean nations and other countries within latin america
comparemela.com © 2020. All Rights Reserved.