Small caps having a pretty good day as well. The commentary seems to be the market feels a little tired. Is that how you see it yes i do suspect that the market is fatigu fatigued certainly on monday mornings consecutively weve been greeted with excellent news for society as it relates to the vaccine but markets dont seem to be responding as positively as they did two weeks ago. Scott, you began the show by suggesting that we have a potential end of year run. For there to be an end of year run, we are going to need a catalyst and i suspect its not the vaccine, its not earnings, and it really falls back to washington, d. C. And the ability to try and offer some form of fiscal bridge to get us to the other side in the absence of that, i would just highlight december 15 the and 16th, you have a Federal Reserve meeting. Theres a wild card scenario there where the Federal Reserve steps in and enhances some of the landing programs and provides the bridge in the absence of fiscal policy makers doing that i feel like joes right its a what now market, right . Whats the catalyst to get stocks moving again with so much positive news about the vaccine now already in the market . Well, scott, i would argue that they are already moving and i think the stayathome trade is fatigued but a garden variety recovery trade is not fatigued the market is trying to find a new equilibrium, a new pattern of behavior, now that we have three vaccine candidates and two therapeutics, thats a big deal but were probably going to have to bump along through that for a couple of months before we get to thor sie eother side the market trades on expectations more than events. It set the expectation that we were going to be able to remove this shock from the market all the other stuff piled on in a positive way has helped but not a new catalyst i dont know that we necessarily need a new big catalyst to make it through the end of the year i think the next big move will be post inauguration. You got 60 days to get to that point essentially im wondering what the markets going to do over the next couple of months. We view things in different prisms on this program some people trade within days or weeks, others look out months if not years. Lets just take it in an incremental way to start, the 60 the days a lot of vaccine news is already in the market, the economy is not going to be doing that much that i can see over the next 60 days to be all that positive youve got a president who hasnt conceded. What does that leave us . Scott, as liz was saying earlier, that were going to have some bumpiness over the next two months. But when we look out six to 12 months, we as longterm investors, thats what woor lookiloo were looking at as you break down this market, you want to start investing now in those themes that will be long term. So we will say less fo lets focus on the long term, you can expect choppy markets. If you go out six months to a year, were forecasting the market will be up in that longterm view so, weiss, how do you play that do you just look beyond the 60 days im trying to figure out what investors should reasonably expect over the next couple of months, what our viewers should expect the market to do if they think, well, it looks a little tired. We got the nasdaq now negative, the dows not doing all that much some people are suggesting you should sell the vaccine news, which maybe plays a little bit in part of this whole deal i dont know jpmorgans looking for a negative print in q1 ahead that leaves me wondering sort of what my best move is here. So the best move is always the longterm move you mention different time horizons im involved in all of them. I go where the opportunity is but predominantly 80 of my portfolio is long term, multiyear but in the short term, let me tell what you the catalyst can be theres special speculation that janet yellen will be the next treasury secretary. She would be supportive of the fed. I think that would be positive for the market and helped the market move higher today youll get more stability. Right now while we have a vaccine, you heard on squawk on the street today theres no plan to distribute the vaccine that doesnt matter. By the time were in a runrate with doses, i guarantee you biden will have a very definitive plan to distribute. And mckes een, who has signed u to do it has done thousands of vaccines and just as weve got in unsh d unsuredness, this lack of stability in washington, thats been a hall mark of the administration when you get to something more routine, more stable, the door will open for the treasury on ceos and theyll start on a capex cycle youve never seen before because money is so cheap. Get positioned now, get positioned across the market spectrum and i think youll do swr well and dont worry so much about next month or two. You can have a 5 or 10 correction at any time the market is going to go higher Morgan Stanleys mike wilson says thele market is exhausted at the moment, says another correction has likely begun, with classic sell on the news, reaction to the vaccine. He says hes a steadfast bull on a 12month view and there goes our discussion on whatever your time horizon is is going to dictate the way you perhaps want to play this market. So do i just look through the next couple of months and focus on the bullish part of where mike wilson is thinking . Or am i worried about this correction taking hold over the next couple of months that could drag down my portfolio so heres the thing im not seeing that correction im not parsing things too finely here. There has been a rotation going on we know that, okay if you look at the equal weight s p over the last two and a half months, the outperformance on equal weighted basis is 7 full percent and points that tells you theres a broadening of the rally going on outside of those sectors, this rally has broadened quite a bit and, yes, we can look through it and should, you know im a longterm investors, but the shortterm outlook is positive as well. Im surprised we havent mentioned the strong seasonal component of december. Were going into december with positive indices at least for the headlines and this rally going on, you know, you think about where the tax loss selling would be going on, it would be financials and energy, right, but those stocks have a bid to them i think energy was up Something Like 20 last week that may not get the same tax loss selling when it has such a bid to it. Pay attention to the broadening of this rally, which is 2. 5 months long. I hear you. But this time may be different i hear you on seasonality. People expect a santa claus rally, jim, every year we have the same conferring at abo conversation at about the same time every single year. However, people are thinking about these runoffs in the early part of january that are hanging over what is still an unconceded election about the current president. You could still have a pretty messy scenario over the next couple of months that im wondering whether that plays into disrupting these feelings of a santa claus rally well, listen, we cant forget the degree to which monetary support is in here and thats a reason why every swoon that weve had since march has been very quickly bid up we did get two 9 drops in the last three months but they bounced right off of that and thats because we know theres a lot of cash on the sidelines cash is cheap. Weve seen the outflows cumulative during the years from equities people want to buy these dips. You can go down 5, 6, 7 i dont think its apt to be much more than that. Liz, he says the opportunity is in small caps if youre looking over the next 12 months in which he expects 10 up side for earnings, is that the place to be right now all this top about mega cap tech versus the reopen trade, what about small caps i do think its the place to be ive been a small cap bull from a couple months now. You have to think about it from a different perspective. First and foremost, small cap usually leads out of a recession and market lows. Weve had a little unique situation in this particular crisis because of the stayathome trade benefiting largecap tech, but now that we have the end in sight, expect a garden variety recovery to take place in the markets you also have obviously much less of a probability of a tax hike, another tail wind for small caps or least the removal of a possible head wind and if you just think about the exposure of the average investor right now, i think most people are overly concentrated in largecap tech and are looking to diversify that out. If you just move down the spec spectr spectrum, you end up with more Health Care Exposure when i say he remains what he call as steadfast bull on a 12month view, he says new bull markets coincide with new Economic Cycles and they lost for years. Thats going to spur a new Economic Cycle of some power dont we think all this pentup demand leading up to that its going to be a new bull market for stocks. It seems to me the only question is the timing of whether you want to buy into it now or not yes scott, what were seeing is that were looking at this as more of a macro shock. Covid19 has changed the way the markets work because what was happening, now we have the changes to innovation that it would have occurred over several years occurring in a matter of months so were seeing, as you just pointed out, the vaccine when it comes on board is going to change what stocks and what sectors will do well if you look at the knowledge sectors, health care, technology, theyve been doing quite well as you look at what we call the physical Service Sector stocks, they have not been doing well, as the vaccine comes on, youre going to see those service those physical Service Sector stocks do better, airlines, hotels, restaurants. Theyre going to come back and so you want to start looking at your portfolio with that in mind then we have the infrastructure. As we bring in the new administration, theres going to be a big push for infrastructure so construction manufacturing. And we talked about how vin tech has changed the way we interact with our consumers and also with the stores out there so vin tech is coming on strong and then other services. So i think this changes the way you look at the market and changes the wave yy you look atr portfolio. I thought the best thing to do was to get some ideas out of all of you for our viewers on exactly where within the small cap universe would you recommend, if you agree with wilson, that these are the stocks to play right now do you agree with him . And if so where do you want to be so ive been encouraging investors throughout 2020 to increase exposure towards small caps liz mentioned in each of the eight recessions since 1980 its been small caps that have been the leading equity size class coming out of that in addition to that small cap, scott, in 2020 theyve undergone this change where now health care is the leading sector versus where it was last year where it was financial so a lot of exposure i initially had was in small Cap Health Care guess what now those names like seattle genetics, theyre now midcap names. Looking back at small it cap and mining for opportunities, there are three names. Carry firestone talks a lot about scotts miracle gro, theres a tremendous tail wind, alis bargain outlets, olli, thats another name i would offer for the viewers. And then then fds, fact set, a Financial Sector small cap, theyre geared toward distributing Research Toward the Investment Community theres your third name where i look for im using factset as we speak, to look up details about factset stock. Good stuff, joe. Thank you for that steve weiss, what about your small cap picks . The one that stands out up another 10 today is jumia thats the amazon of africa. They had a good third quarter, as it turns out. The strength is undeniable so i love that stock its now one of my top positions because its grown so much its doubled in weeks. I also like Brookfield Renewable partners let me stop you for one second ill let you get into brookfield why do you think jumia has doubled in a week . Its a stock thats done so well youre in it, you bought it back why did it double in a week . What does that say about the speculative environment that investors might be getting themselves into if they invest in shares of jmia . I dont think its speculative, thats the first thing. The reason why its doubled in a week is because they appeared at two conferences, maybe its three actually, and theyve had backtoback investors meetings. So the world is getting to know about this its underfollowed on the street nobody really knows it that well the stock came down because in nigeria where they have a principal location, people are coming to it not for speculation because bu because they see that the fundamentals are there if there are 1. 2 billion people they serve, online is relatively new there. Unlike walking out of your house or apartment in the u. S. , you got to travel some distances to get to retail. So online is natural there so thats why the fundamentals are supportive of what the stock price has done could it be a little ahead of itself sure do i like to see a stock go up 10 a day . I do and i do. Long term i dont care short term i dont want the Robin Hooders coming into this it says it all really where sentiment is it wasnt that long ago that sit tron and andrew left and the street has totally gone in favor, it seems now of a name like this. And as you say, 100 and theres abouts in a week is astounding andrew pointed out in your short report some changes that had to occur at the company. And the company responded to it and made those changes so thats why it recovered and andrew said, you know what, heres what was wrong with it and heres now whats right with it so that makes total sense if you get behind the headlines and the sensationalism of the short report and sensationalism of it going long the thing is moving i stopped you in the middle of Brookfield Renewables because i wanted you to expand a little built here you can get back to that, if you dont mind sure, sure. I i i am a believer in science of Climate Change i get excellent Asset Managers in brookfield, one of the largest Asset Management firms in the world, i get wind mills, hydroelectric power and a 3 yield. Ive got, le Excellent Assets a management and were going to have clean energy no matter what happens in the Biden Administration so this is where the moneys going. Its going to esg and its going to clean energy. Thats brookfield. Tell me what sqm is thats i believe a Ticker Symbol of another smallcap stock that you like yes its about 12 billion. Its chilean miner theyre in lithium, which is also clear energy, going to evs, going to cars. Its also fertilizer its also health care. They make the iodine that goes to x rays. I get all that playing out in a miner and i get to capitalize some of the trends liz spoke about and some of the others have spoke about, which is an industrial play, health care play and clean energy play good stuff. Thank you for those. Farmer jim leventhal, what do you have for us . I think you know the small caps are something i routinely participate in three of the names that ive been pretty often talking about, winnebago, Cleveland Cliffs and greenbriar if you look at these stocks, theyre up over 100 in Cleveland Cliffs case, 200 since the march lows but that may make you say why would i buy them now theyre actually below where they were a year ago and what the difference is here versus a year ago, a year ago we were at the tail end of an incredibly long expansion. Now were at the beginning of a new expansion. That is where small caps and sick cyclicals tend to climb, winnebago, greenbriar, those are the sort of things in an infrastructure play coming in 2021 theyre going to thrive is cliffs the one where the ceo called out the analyst at one time or am i getting that confused with Something Else no, youre right. Lorenzo is the ceo of Cleveland Cliffs he of brought this company back from the dead. About five years ago, the company was about to go bankrupt he did incredible things, renegotiating contracts. Hes made two acquisitions recently, u. S. Operations and a. K. Steel this is a company that is really poised to thrive over the next couple of years. He is not for the faint of heart, brother, he is not for the faint of hareart i rather that day he brought it big day. Deegus, we go through a few for you as well. We lick gentex. Given the back log, this firm i doing well as we look at the Corporate Social Responsibility, we find out a lot about these companies and what theyre doing to be innovative another company we like is chemed what a combination in this environment. You have the care of patients and also you take care of plumbing a Small Cap Company about 7 billion. And lastly, we really like west rock we talked about this before. They focused on sustainability products around food delivery boxes. Once again, solid. They actually restructured their paper mill in South Carolina to be more efficient and so we like the changes they made in this environment and theyre doing quite well and all of these companies are great profitability and good prices a the these levels were off to a good start i want to expand on what were doing with small caps and just make it a sort of Bigger Picture view of some of. Thin some of the things you guys are doing in your portfolio. Were off the small cap topic now because were talking about deere, shares of de, which you sold and you bought Tractor Supply i want you to tell our viewers why. I had about a 42 gain in deere. My good friend steven weiss and i had a conversation surround being the appreciation in deere, i agreed and thought it was a little richly valued i took down my exposure and wanted to reallocate the funds back in something agricultural Tractor Supply is a retail name with 2,000 store that has 35 return on equity weve seen the sales growth in the last 12 month