Because as we go higher and higher, the dow closing at record highs again today. The risk grows, and you need to foe not just the rewards but possibly what could go wrong after this historic run. Dow putting on another up day. Let he give you three familiar examples, amazon, facebook and microsoft. To demonstrate this risk reward, aum three ha all three have that. And they offer a window on ways you can value the stocks. Well go from cheapest to most expensive, first we have the 44 billion that is microsoft. Much better than the previous of that disappointed so many investors. Microsoft is transforming itself from a Software Company to one of the Worlds Largest cloud providers. Now, if you look at it statically, growing at about 7 . Sales at 19 times earnings. Thats right. Even after todays epic 5. 3 move, its nowhere near the Balance Sheet that microsoft has with 100 billion in cash, unbelievable. They pay a 6 quarterly dividend. Thats better than the 2. 1 average yield you get from t
Consumer related stocks. Check out shares of ford and gm, both sinking. Plus check ott the retailers like nordstrom and macys getting crushed today. Is the stock market telling us the consumer may be tapped out . I dont think so. I think first of all, retailers have all bounced since may, so maybe the sell off, its often oversold condition. We had a nice bounce, but the auto stocks have been lousy for three years. Think about it. You have in my opinion, the best vir environment in the last maybe 50 years. The stock market is basically tripped. If these stocks have gone sideways to lower over that period of time, you have to ask yourself when is the right time the own these stocks. Weve had this conerer sags for a while, so i think the autos tell one story. The reteailers tell a story, bu i dont think you can say the consumer is dead. Well, ill tell you, the auto sector is the most concerning. I look at auto nation. Mike jackson was on cnbc back in january. Said 2016s not going to be a
[inaudible] great question. The idea is six days. People in japan, is a perceptual change and i are again the book that the tool is language that having a word for something is what allows you to experience because you can conceptualize it and you can say i recognize that thing. I have a memory of that thing i can convey my experience to other people. One of the big debates is going on in the case world is well because we dont have a word for what that sixth taste is maybe we just missed it. Its there but we dont notice it. The pay comparison that they use and finding another color. This happens all the time with visual researchers. One of the big comparisons people say its in some languages there are separate words for blue and for grain. As a mean to people who were raised with one of those languages cant see blue and green. It means they perceive him as a singer experience in people who grew up with the language that distinguishes between them see them as two different things. Maybe
That is true on the personal side, does not always carry over to decisionmaking. Singing, Justice Scalia was also known for his singing. P next, we have brian calling caller my question is whether or not i would like to hear your thoughts on whether what the isublicans are doing constitutional. My reading of the constitution is that the constitution shall the supremees to court. It seems unequivocal. To follow that the advice of the senate cannot be to not nominate someone. The defense therefore cannot be never. I would like to hear your thoughts. Guest that is one reading, but one. He generally accepted if you need the sentenc senates consent, they can withhold the consent or withhold it wholesale. It not be pretty, but probably what the constitution envisions is political accountability. If people are not happy, they office. Them out of host what are the chances that there be a hearing or any other action on judge garlands nomination . Guest im not an expert and legislative congressi
Are banks back . Scott, look at it this way. The fourth time weve had this conversation only to have our hearts broken 60 days late whir the fed doesnt raise rates. A great trade. Investment . No. Banks arent ready for primetime. A sector that will lag against next year if the fed doesnt give 50 bips at least of rate hikes. Think dont make money. Roi, absolutely terrible. Anybody on the other side of that . No one likes the banks here and thinks theyre back . Two things. Kevin is absolutely right. Where rates are right now and where pretty much everyone predicts theyll be for the foreseeable future, not good investments. Not great businesses. Kevin probably wouldnt invest in a Community Bank that walked up to him and said this is what we have in front of us to make money, but how much of that is already in these names, and how much of what were seeing is the condition now has the opportunity to change beyond six months. I dont think anyone here knows the answer. Because your guy krinsk