Bank expert and financial adviser Christopher Whalen tells Newsmax TV that savvy investors can still find worthwhile investments despite being bombarded with obstacles all over the market.
“We have bubbles all over the place — commercial real estate, the auto sector,” he told Sunday’s “The Income Generation Show.”
“I always tell people to invest in what they know, invest in their own businesses No. 1 but I think in terms of securities markets, there’s still a lot of value there,” the chairman of Whalen Global Advisors said.
“It’s just a question of doing your homework and finding stocks and bonds that represent a disruption, if you will, in the norm. I love FinTech,” he said in reference to financial technology, an industry composed of companies that use new technology and innovation with available resources in order to compete in the marketplace of traditional financial institutions and intermediaries in the delivery of financial services.
Welcome to the ‘Havoc’ Phase of Fintech Disruption https://t.co/1UYQsEzrjp Does #Fintech actually exist? Or is it nonsensical hype?
— Christopher Whalen (@rcwhalen) April 6, 2016
“That’s the sector I’m spending a lot of time as an analyst. There’s a lot of companies in that space that are basically just doing what banks and other financial institutions do better,” said Whalen, the author of “Ford Men: From Inspiration to Enterprise.”
“Banks are big and they don’t move very quickly so when you see a company that can get in there and provide service that’s meaningful for the customers they can create a lot of value,” he said.
“I like to focus people on things that are relatively new and have a disruptive component to them,” he said.
Meanwhile, he said the economy does face some other storm clouds.
“Janet Yellen’s low interest rate policy is what drove the growth in auto sales up to 18 million units last year. We’re not going to do 18 this year. In fact, we’ll be lucky to do 16 based on my assessment of the recent earnings,” he said.
“Ford and GM just put out their report on sales. It was dismal. Passenger car sales were down by 27 percent and this is all because of Janet Yellen and the social engineering of the Federal Open Market Committee,” he explained.
“They don’t want to accept the fact that they really don’t have a way to goose income, goose consumption so they manipulate asset prices and the aftermath is always bad,” he predicted.
However, he doesn’t expect a total market collapse, at least not just yet.
“I don’t expect equity markets to sell off very much because there’s a lack of supply,” he said.
“If you look at share repurchases by large cap and medium cap companies, the lack of IPO activity, again because companies can issue debt at very low rates. It’s kind of the same situation we see in residential real estate. There’s no supply,” he explained.
“My friends in that business have 20 qualified applicants for every house they can show them. There’s a constrain on supply and stocks and housing and other asset classes and I think for that reason you’re probably going to see it stay more or less where it is but that doesn’t mean you won’t see some volatility,” he predicted.
“It’s just there’s not enough new companies coming to the market to satisfy the demand.”
“The Income Generation” airs on Newsmax TV every Sunday at 10 am ET.