Transcript
Automated transcript · uncorrectedWith us today is Mario Gabelli, one of the world famous entrepreneurs and investors and barons. Has done many a story about him. And he’s from New York and he’s from the South Frogs. I’m from Harlem, so we both came from the same place. Mario. Good to hear hear from you and talk to you again.
My privilege and my pleasure to talk about the stock market and the capital markets around the world and particularly in the US.
This is an election year, Mario, and what the Democrats want. They want to make sure that bidonomics works. Whether it does or not, Bidenomics works. They’re trying to get the price of oil down so people don’t have to pay more than three dollars a gallon for gasoline. They want to get the stock market over forty thousand. They want
to get interest rates down so people can afford to buy homes again. And I want to get the price of foods going down. And other than the stock market, nobody else is cooperating with them. Give us your vision of what do you think.
That’s a great starting point. Let’s do it very quick. It is no question that political dynamics have an influence. For example, today the local newspapers carry a story about how we are trying to preclude Chinese cars coming from the United States. And you know, I’ve been following the auto industry for fifty five years. You know, when you
buy a car, you want it efficient, you want it to work, but you also want to know what you’re if you would decide to sell in three to five years. But it’s worth Meanwhile, no Chinese cars are coming to the US at the moment, but the UAW loves to hear that. In event, uh, the world is one hundred
and ten trillion dollars john and the United States is a quarter of that, So we’re doing quite well. The United States consumer has a very good approach. There’s some minor income inequality that has to be addressed in a sense that individual rules that are working at for twenty five thousand dollars in Iowa or any part of the
Midwest or Okay, but in New York you got problems. And from that point of view, we want to look at that there’s this pent up demand for certain consumer goods. The industrial sector is betting benefiting from programs that were put in place the Inflation Reduction Act, like Giant shrimp as misworded, but basically the notion that we ran into
problems four years ago when we had the COVID getting stuff from China. We’re reshoring and near shuring and that’s helping the midwestern part of the United States. The second part is that we couse interest rates went up because of what Powell did with regards to high rates lasting longer.
There’s a fairly significant pent up demand for housing, all of which is pretty positive. In addition to that, we have some other crises in the United States that need to be addressed and we’re working on that. One of those, for example, is water. When you develop artificial intelligence known in the trade now as AI, they need data centers.
The data centers consume water to cool the location. So the absorption of water, the ability to contain that, the ability to get energy, and its use is an important dynamic. So there’s a lot of pluses and minuses. From a stock market’s point of view, you’ve got to have two things, earnings, the outlook for earnings, and the multiple. The multiple is
a function of interest rates, and that’s what the market is saying, is that the rates are not likely to go higher. The question is how high, and how how high will they stay, what’s the normal rate when things turn down, and what do I pay for the earnings outlooks for the next several years. The challenge that you’re
pointing out is that if I shop at Costco, you know, I have my food costs contained. I mean, you know there’s John, there are bargains there. And on the other side, the consumer going out to the store says, wow, I haven’t seen a reduction in price. So what the regulators are doing and the politicians are tempting to do is
to throw bones to get elected. That’s why they would say, like Albertson’s merger, which is a you know an I shop at Albertson’s in the West Coast, that they do it a very good job. They say, well, they’re going to raise price. I can always go shop somewhere else if they try to raise price too much. But they’re
doing it because food costs are an element. Second part, John, is that when you and I are paying our electric bills, that cost is high, and so they try to for example, in Illinois and Connecticut, they’re trying to reduce the amount of money the energy companies can earn on the embedded capital that they put in place for years, and that’s
going to be a real long term problem. So you got to live with all of this. From the stock markets point of view, clearly, every so often you get into different phases. Today it’s with GOVI and it’s artificial intelligence and those that headlines and the Magnificent seven now become who knows what so and so we look for
ways to make money for clients on an ongoing basis, not only over the next twelve months, over the next ten years. Then the final part of the way, you look at how much money is the company going to earn and then how do they keep it? So what is the tax structure going to be in twenty twenty five,
what happens to corporate taxes? What’s happened to the ability to do research and development? What can you do for write offs in terms of depreciations, can you take one hundred percent which is a great incentive to put new productivity in place. Then from the student’s point of view, you know, why not allow students to take a tax
deduction for their tuition bills. So there’s a lot of things that can be done.
Well, I mean, me and you could talk forever on that, because I have a lot of opinions too. What let’s look at the long term. Is there a future in electric cause or is it going to die? Is going to is it going to be the DeLorean of the twenty second you know, twenty twenty four, twenty twenty five.
Well, John, when you go back to go forward, look through the rear view miRNA. First of all, First of all, when there was a shortage of electronics and other componency of car companies focused on high price cars, and because they did that, the average price of a car roche sharply. Secondly, the dealer was so much in demand he didn’t give
you a discount, and there wasn’t that much promotion. And then interesst rates, costs for carrying a car. All of that is coming back into shape. The consumer out there needs a car that he can buy for thirty five thousand, not forty eight thousand dollars. The fleets and the government agencies need lower price cars, so there is a pent
up demand, but not necessarily for cars at seventy five thousand. The notion that the you’re giving a credit for an electric car where only rich people can get is you know, challenging to me if I lived in a in Harlem of the South Bronx, where am I going to get a charging? The electric car continues to have the challenge
of saying, cold weather, I got to get used to it. How far can I drive without? Where can I refill? And how quickly can I fill? Those are minor issues. The big issue is what does it cost me when the batteries run out? How much is that going to cost?
What is the value of the car in case I have to sell it? What happens if there’s an accident? Why is this so high cost the repair work? And then why can some guy attack me by disconnecting my car when I’m driving with all the electronics. So there’s a lot of things that are work in progress. So
in the future, I think we’ll continue to do well with regards to various forms of internal combustion engine and also various forms of hybrids and various forms of hydrogen and various forms of.
Electric Exactly what the CEO of Toyota said, I’m going to make them all and let the consumer decide.
Well, that’s the way it should be. Not the same to California, Absolutely, I agree with you.
One hundred and ten percent. The future of energy. It’s not going to be it’s not going to be windmills, it’s not going to be solar cells. And anybody believes it, I’ll sell them the Brooklyn Bridge at a good price.
Give us your I You know, we’re in the oil business and we’re slowly going to transition over the next ten twenty years into small nuclear reactors.
Any opinion, Yeah, my own reaction is fairly uncomplicated. Look, you know how quickly we forget three Mile Island challenges with regards to nukes. Independent of that, clearly we would like to have a cleaner environment. We’d like to have less plastics that are in the water. We’d like to have less pifoss, the chemical that lasts forever. From the
point of view of energy, we also have to be practical. You cannot count on an unstable Mid East. You cannot count a Maduo not attacking Guiana, you cannot count on Iran, Iran and Iran. And so as a result of that, having flexibility by rebuilding a storage of energy through our strategic reserve, which has been downplayed, and having that gas
and having it distributed to those poor individuals in New England through better piping systems. You got to be practical and during that process come up with what you’re talking about. Have the guys at MIT, the guys that technology centers figure out some other ways. And just like in nineteen eighteen fifty nine in Titusville they found oil and saved
the whales, you know somebody’s going to come up with new ideas along as you allow entrepreneurialism in the United States to foster, do not condemn people with new ideas. Encourage them to make money. And when they make money because they can solve problems, praise.
Well. Mario Gabelli. We’re up on time, but I want to thank you. You have a last thing to something to tell the American people on a Sunday morning.
Yeah, I think so love sports and all of you should buy a share of an Atlanta Braves baseball team for forty dollars. You can own a baseball team and you can participate in the opening season in about three weeks.
And then on top of that, you can buy a basketball team by not buying Madison Square Garden Sports, the Knicks are available for one hundred and eighty dollars. Then, on top of that you can buy a soccer team, So play sports, invest in sports, and enjoy the march madness that’s coming up.
Mariogobelly, thank you for your wisdom and thank you for telling the American people. And we’ll catch up again sooner than later.
Thank you, take care, I have a great day. Goodbye bye,
Sunday, March 3, 2024
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