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Larry Fink On Long Termism: ‘Markets Will Be Higher In Ten Years’

BlackRock CEO Larry Fink spoke to Andy Serwer of Yahoo Finance in September of 2018 about long termism, geopolitical factors affecting the market and companies taking risks.

Long Termism

Larry Fink On Long Termism: ‘Markets Will Be Higher In Ten Years’

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Transcript

Moving back to the conversation what about the stock market the stock market has been on that historic run and I just wonder where things go from here because a lot of people think that the end is near in terms of equity prices.

Well I don't. Markets are going to be higher in ten years. So I'm I'm not really concerned about whether we are going to see a setback. As you said the markets have rallied since 2009. If you look at the markets today and I'm speaking specifically to U.S. markets we've seen a huge increase in corporate earnings on the back of big tax cuts on the back of a rising economy and so actually. is lower today. Than it was. A year ago. So the marketplace is now. Discounting. Some of the worries now some people may think they're not discounting enough but with ease down you could safely say the market is less expensive or more or more cheap. But. And so that's part one part two. There is a decoupling though between our markets and the rest of the world and to if you strip out some of the real high flying technology stocks many companies stocks are down in the black box down them after a big run last year. And so.

The marketplace is pretty even. It's not as strong as it feels. PCs are down. But the fundamental part of your question can this continue. I would say in the short run yes in the short run it will continue. I don't think that's a good answer for a long termism but I do believe over a long horizon markets are going to be higher. I just want to remind everybody if you bought equities two days before the failure of Lehman Brothers. Portfolios up. To all those people who panicked. Around that period of time that was a bad move. If you have a long term view. So even before then declines you Bogra two days before Lehman Brothers failure write you out. You did better than you and I think it's up a 130 percent.

Right. Right. Larry you just got back from Europe. We're talking to some leaders there. What is your take on what's going on there with her take away or to.

Europe is less strong this year than it was last year. I think the big surprise from 2008 17 was how strong Europe was. People felt confidence Politically Europe was in a better place with McCrone election. I'm.

In 2018 you have had changes of government in Spain and Italy more extreme governments more populous governments. You have. A destabilizing government in Germany. Chancellor Merkel has been undergoing real shifts in the power struggle there. There's an important election there in October and you know it appears that her party is probably going to lose a major important state of Germany. And so you have more political uncertainty in Europe you have still unresolved Brexit. You have a weakening economy from the highs of 2017. And so Europe and they're facing threats of trade wars with the United States so. But overall I think.

Europe is OK. It's not. It's much stronger than it was five years ago.

The fundamental problem of Europe is looking back. Europe did not aggressively address the financial crisis as firmly as the United States did. Their banking crisis lasted six seven years longer than the US. And so the banking system they in most cases is pretty strong. There's parts of Europe where we could. We still could attack some parts of their banking system. But overall Europe's OK is a Euro gun and hold together the European Union I heard from two. Political leaders and it was in Germany and France. That they believe the threat of a trade war with Europe. The differences between the United States and Europe related to NATO the issues around Russia. The threats of migrants from the south is actually creating I would say a greater resolve with France and Germany. So I would say today there's probably a greater. There's greater.