Traders Josh Brown, Jim Lebenthal, Stephanie Link and Jon Najarian are joined by Mario Gabelli, chairman and CEO of Gamco Investors, to discuss the Gabelli’s four Ts: tariffs, taxes, ten-year Treasuries and technology.
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Mario Gabelli’s Four T’s: Tariffs, Taxes, Ten-Year Treasuries And Technology
Q2 hedge fund letters, conference, scoops etc
Year pre-tax that's the territorial versus global is a major changer with regards to which companies will locate the United States has now have a competitive advantage and obviously those that live in Connecticut New Jersey in the state New York.
Are paying higher taxes whereas most of the commentators may say we're paying lower taxes which is not the case. That is an element and then you look at the notion of receipts in the United States how much are we taking in and where's it coming from and wages are 85 or 80 percent of it the corporate taxes are about 300 billion. And you look at that and say OK so taxes are a plus. But incrementally the companies that I'm talking to are either spending a little more doing a lot of things and that will neutralize the benefit of the incremental absence of the higher growth rate from taxes next year. And then the other one is technology and you find companies out of service companies the United States that have a technology bias and can do productivity gains by setting up Routley better those that have been very helpful. Give me a name. How do you establish a name that I have and own forever's. Cole Rolland zinc they get rid of bugs the like termites like right now you have a little bug on the counter. You've got to eliminate them. Companies like eco labs and so on and then you know simple things like the healthcare Teladoc the stock is now 77 dollars. Unfortunately I blinked and it's gone from February. ToD.O.C. 42 to 77. And like that I'm going to test your ticker accum today ticker got a ticker. It's working. The 10 year Treasury is on the other day watching Major ahead with major charts. Got to have a compression on a present value. The future stream of earnings down to present value. Can you sustain a business that has a 12 14 Multiple and that everyone wants the buy can get that five years from now and an exit strategy. And I'm in that camp that says. Unlikely. Yeah I mean the 10 years a bit above 3 is what's the level that it gets to where you say it becomes well it's punitive to the market. Well you've got to go stock specifics I'm looking at each company and saying how RICO is that a business that is transaction driven or recurring revenue and if it's recurring revenue what multiple does a company selling today relative to what I think is a logical explanation of where it should sell or economic value. I don't want to get into it and if the 50 were these stocks are continue to be narrowly bought continuing to grow and the chasing the same names so I can't answer whether it's 3 3 3 or 3 4 0 4 0. But we know that the massive withdrawal massive withdrawal by draggy Jay and the guy in Corona. Yeah. POWELL Yeah but the guy Japan Kuroda taking that money back. That's got to have a. Headwind on top of what rising rates look like.
What if what if the way to look at that though. Mean historically this would be accurate would be to say it's better to offer zero aid because conditions no longer warrant that. And B if something negative does happen whether it's an exaggerated shock or a military thing or whatever. Now there are some ammunition back and you know we listen we listen we heard people say the Fed is pushing on a string it's not going to work. So for now it did work. And if you need to do it again now you're able to because you're not on zero by the time I'm just saying normalizing is good right.
Well two point one two point two on the on the t bill six thirty three months six months. It's very interesting typically in Seoul three states where you buy 100 percent Treasury you don't pay any tax.
Cash is now an investment again. There's a yield on cash. Not a good investment but you've now that you have a situation where there are options beyond the stock market. So maybe that's a healthy thing.
I hope I look at the next 10 years. When they're buying the dip I'm going to make 60 percent higher earnings but hot and multiple and hopefully we are.