The fabled investor Mario Gabelli on tariffs, taxes, and other Ts driving the market.
Q2 hedge fund letters, conference, scoops etc
Mario Gabelli: What's Ahead for Stocks
Transcript
In terms of the way we're looking at the world I put it together before T's. Number one is tariffs and that is what is the impact on which business what sector we're conditioned to be concerned about a tariff war. From my point of view I think the positive is that Trump is trying to reduce the amount of dollars that the U.S. gives to the global economy 350 billion dollar trade deficit to China is an important element of how we're trying to neutralize that impact. The second is the 10 year bond and that is what is going to happen to that multiple on interest rates that we see. And I think that's a negative over the next five years. And that is today's a multiple companies are being bought and sold that will not be sustained. Third part is obviously taxes. The United States has a new tax regime and its territorial not Global which is very positive in the sense that it allows companies to say hey I want to be in the U.S. because there's no tax disadvantage. I as a buyer of equipment can take 100 percent depreciation. So whether I'm a dentist. Or whether I'm a farmer I benefit substantially. One is technology and the driver technology as US continues to evolve is a service based economy and the use of technology to drive productivity particularly when you have the Millennials and Gen Z using it. So those are the four elements that combined to create a very attractive environed for investments.
I'm kind of looking at the markets long term over the next 10 years I think you can make a return of 6 to 8 percent for the next 12 months I think the market just has a lot of old normal volatility Mr. market goes up and down as long as we don't have some dislocation from a geopolitical point of view. I think we'll be in the north of 3 percent.
