The market anticipates good things from Trump.

0:00 Speaker 1 Sunday Morning with us this morning is Andrew Barry, and he’s an associated editor at Barons and one good friend, one smart guy. And uh, well, uh, Andrew, what the heck is going on in the financial community. I’m worried about. Uh, the Fed is reducing rates meanwhile the treasuries are going up.

0:24 What does it mean to you?

0:27 Speaker 2 Well, I think there’s concern in the bond market about the potential inflationary effects of a Trump presidency and that there may be less further interest rate cuts and people have been expecting just a few months ago. So you’ve seen, you know, an increase in longer term interest rates, even ash and mortgage rates, even has the feedest cut raids.

0:51 Speaker 1 And well, you know what I look under a Trump and I’ve been a Trump presidency when I’ve been talking about for the less six months, is that he’s going to reduce the price of oil. And if he reduces the price of oil, what happens. The price of food goes down, if inflation goes down, then interest rates have

1:12 to go down. But there’s a little bit of a turmoil now. Our friend Warren Buffett, who you wrote about a great deal, he has sold a lot of stocks see anywhere from I think he’s sitting on anywhere from three hundred and twenty five to almost four hundred million.

1:30 What do you feel Why did he begin his selling spree.

1:37 Speaker 2 Well, you know, he’s been out of step with the booming stock market. You know, the stock markets have about twenty five percent this year based on the S and P five hundred, following the similar game last year, and Berkshire has been raising a lot of cash selling a lot of stocks. Buffett appears to be very cautious on

1:53 the stock market right now. I mean Buffett reduced the Berkshire steak in a full his largest equity holding by two thirds this year to about three hundred million years, and also sold the chunk of Bank America, second largest holding.

2:08 You know. All told, Berkshire sold well over one hundred billion of stocks this year and raise cash, which, if you point out, is over three hundred billion dollars right now.

2:17 Speaker 1 I understand, and he was very cautious, and I’ll give you my opinion he used extra cautions because if Harris won. My opinion is you could have seen a disaster in the markets.

2:32 Speaker 2 You know, I don’t think that’s the reason. I don’t think he tends to trade or position Berkshire’s portfolio based on this, based on the president and who the president’s going to be. He’s famously said, you know, the markets have done pretty well under both democratic and Republican administrations, and so I don’t think I don’t think that’s that’s

2:52 been the major factor. I think he may be more concerned about what he may view with elevated valuations in the stock market and how much stocks to run in the last couple of years.

3:03 Speaker 1 If President Trump drills baby drills, like he says, and then you’re going to have the price of oil going down. And there’s a second factor about the price of oil going down is the SEUs Canal and the Red Sea.

3:20 Once Trump is president, the hooties are going to be non existent. I mean, he’s gonna open up that, sus And that’s my opinion. Who work ten dollars a barrel? What’s your opinion on it.

3:32 Speaker 2 I don’t think oil prices fall much more from here. They’re already down from their highs. Oil peaked around ninety dollars a barrel in the spring. They’re now under seventy dollars a barrel. There’s actually been an increase in US oil production even without Trump being in power. So and then you’ve talked to oil executives and they say they’re

3:51 unlikely to increase production all that much, even if Trump does make it easier to drill. I mean, I think they’re interested in returns and profitability and they don’t want to see oil go much lower. So I think you may see restraint from oil producers even if Trump is more friendly toward oil drilling.

4:09 Speaker 1 So your opinion, which way is the market code going in the next six months higher?

4:19 Speaker 2 I mean, the market tends to drift higher, and I would think six months from now, you mean you could see it five percent higher, maybe ten percent higher.

4:28 Speaker 1 What is in your opinion, again, what is over well at a price that it should is too high? Up bitcoin, for instance, artificial intelligence. What’s your opinion in that?

4:44 Speaker 2 Well, know, bitcoins had had a huge run this year. That’s more than double this year. It’s around ninety thousand as we speak right now. You know, bitcoin can trade anywhere, and so it’s an interesting asset right now. Fans fake could be heading toward a million dollar They like the fact that Trump is bitcoin friendly, but there really is

5:04 I mean, there’s no kind of correct price for bitcoin. As you may know, there ultimately will be about twenty one million bitcoin out there. They are about twenty million are in circulation now, so very few will be created under the rules about how bitcoin is created. And that’s part of the bookcase is that essentially there’s almost gonna

5:22 be no more bitcoin created, unlike the gold and other commodities which they’re mining every year.

5:29 Speaker 1 Understand And what else will make a difference in the markets when as of January twentieth, We mean, I think.

5:40 Speaker 2 The direction of interest rates is going to be important, and I think it’s going to be I think what the kind of policies that Trump pursues as far as regulation, cutting the federal deficit taxes. I mean, I think that’s all going to be a factor, and just the direction of the economy. The economy has been in pretty good

5:59 shape and we’ll see if it maintains that page while Trump is president, I mean, he’s certainly making it a high priority to maintain economic growth the way it’s been and also to see a strong stock market. Trump views the stock market as being almost a referendum on his presidency, and he was proud of the way stocks did for

6:17 much of his presidency the first time, and I think he’ll want to see stocks do well under his second presidency.

6:24 Speaker 1 Well. Andrew Barry, Associate Editor Barons, thank you for coming you on this Sunday morning and giving your opinion and your views which are important to us on the autonomy of our country in the world.

6:37 Speaker 2 Thank you so much, Thanks for being my pleasure.