The idea behind our awards is simple. We appreciate experts who come on Financial Television and provide actionable investment recommendations to individual investors. While individual stock ideas are fine, our preference is to look for advice that is broad and easily followed. And we love it when the advice makes investors money, ideally lots of it.
This is the Fifth year of Macro Viewpoints Awards. Prior winners of our Most Useful Financial Guest Award are:
- 2012 – Tom McClellan & David Rosenberg
- 2011 – Jeffrey Gundlach
- 2010 – David Tepper
- 2009 – Meredith Whitney
Our second category is the Most Useful Financial TV Show – a show that consistently either made money for viewers or helped them to avoid losing money. Our prior winners are:
- 2012 – Bloomberg Surveillance
- 2011 – CNBC Strategy Session
- 2010 – CNBC Fast Money
- 2009 – CNBC Squawk Box
Who will this years’ winners be?
1. Macro Viewpoints Most Useful Financial Guest Award for 2013
This has been a difficult year for experts. Almost every guest on FinTV told viewers that it was all about the Federal Reserve & its actions. Almost everyone including us devoted a great deal of attention to whether, when, & how much the Fed would taper. Many terrific investors with great track records made wrong recommendations & predictions.
The year began with the Fiscal Cliff & the Sequester process. Then came Cyprus, Boston Marathon bombing, and Taper talk from Bernanke. Several experts got confused and confused investors. We also saw
bullish investors get cautious at several times this year. This year has
proved to be a bad performance year for equity & macro hedge funds.
But through out this confusing year we heard straight, simple, and extremely profitable advice from one expert guest. Advice that was very easy to follow & implement. That man is David Tepper, the winner of our 2010 award. Just look at the few excerpts below:
- Tepper on CNBC Squawk Box – December 17, 2012 – “Decline in the market would be limited to 5% if the Fiscal Cliff became a reality on December 31 and if didn’t, the upside would be a lot. He added he was buying calls because he would not be able to get very long on January 2 if fiscal cliff didn’t happen and if his risk would only be the call premium paid if the market fell apart because of the fiscal cliff.”
Imagine the year you would have had if you just bought December 2013 year-end calls on the S&P (& sold short puts to finance the calls) a year ago.
- Tepper on BTV Market Makers – January 22 – “… markets, they are trading at a really low multiple. 13 handle this year, 11 handle next year on the S&P… If you look at the multiple on that compared to the alternatives to anything in credit, there’s nothing close. There’s never been this big of a gap in the history of my life at least. There is no major negative. You have these earnings, this money growth. You have the Japanese coming on top. You really have not had this money supply push on a relatively good economy. Not even close. main thing right now is to be long equities”
- Conversation with Tepper reported by CNBC’s Kate Kelly on March 9 – “David Tepper was still bullish. … According to a source, David Tepper predicts that the U.S. stock market could rise 20% or more this year based on a strong U.S. economy unless “there’s an unexpected downturn in Europe”
- Tepper on the taper on CNBC Squawk Box – May 14 – “economy is getting better, autos are better, housing is better, it continues to improve. They can’t find enough people in housing, that’s the only thing holding it back right now… when the premium is high, historically you get better returns after that. One of the all time highest equity risk premiums in history. … it’s one of those times where the indexes are really cheap. … The market is going up. The question is how fast it goes up.”
- Steven Weiss reporting on Tepper’s views on CNBC Fast Money – August 3-8 – “stocks are still reasonable, in his words, probably still the only place to be. “if I was super bullish before, I’m just bullish now.””
- Tepper on CNBC Squawk Box – October 15 – “I think your interest rates will be more like 4% … and maybe your growth instead of being historically 3.5% or 3.25% might be 2.75% going forward. Both sides will be different and I think you’re going to end up with a higher multiple in the future. … I think you’re going to get more toward a normal multiple of 18 to 20 times.”
- Tepper at Dow 16,000 on BTV Market Makers – November 18 – “earnings growth next year is 10% & that’s without gdp growth being a little higher than people have it … market is going to be 10% higher … stay long – rates won’t go that high..just not that big a concern with growth & higher multiples; not worried about inflation at all; … biggest risk is that you will have multiple expansion, higher growth, another year of 20-30%; very low interest rates for awhile…very stimulative Fed for a long time… 10-yr rates just cannot go that high; it is not gonna go above 3.5% or 3.75%;”
You got a steady stream of sensible money-making advice from David Tepper on 7 occasions this year. How often did you get strategy talk from your stock mutual fund manager or your money manager? Seven times? No way. And you got it for free. This is why we think watching Financial TV is one of the best options individual investors have.
So we present the Macro Viewpoints Most Useful Financial Guest of 2013 Award to David Tepper, our first repeat winner. This is the easiest decision in the 5-year history of Macro Viewpoints Awards.
2. Macro Viewpoints Most Useful Financial Show Award for 2013
David Tepper showed that the right course for 2013 was steady as she goes. With Fed providing liquidity at $85 billion a month, with Draghi making it clear that he would do what it takes in Europe, the year was straight forward, at least in retrospect. As a result, there wasn’t much room for the serious macro debate that 2012 provided.
Consequently what mattered this year were tactical moves. And there is one only show that has structured itself to focus on daily, weekly tactical moves. That show, of course, is CNBC Fast Money. And on the whole they did a good job.
Actually, CNBC added a twist this year by making the Half Time edition of CNBC Fast Money almost independent of the Evening edition. Scott Wapner was made the main anchor of the Half Time edition while Melissa Lee captained the Evening edition. The traders were split up into regulars of the Half Time & those of the Evening. That worked and the Half Time edition found itself.
And it made itself into a show with its own identity. They seemed to work harder perhaps because they were the younger untried cousin. They kept getting bringing more interesting guests. Their ideas were immediately usable because the markets were open during the show. And the veteran Wapner did become a presence with his own stamp. All this worked to make the Half Time edition more interesting, more provocative and ultimately more useful than the evening edition.
So we present the the Macro Viewpoints Most Useful Financial Show of 2013 Award to CNBC Fast Money Half Time or as we write CNBC FM & 1/2.
3. A Special Shout out to Larry Fink
Who doesn’t know Lawrence (“Larry”) Fink? Mr. Fink is the Chairman & CEO of BlackRock, the largest asset management firm in the world. Mr. Fink is not just a CEO like so many of his colleagues on Wall Street. He is a co-founder of BlackRock and he has been almost prophetic at times.
And he was certainly was that in 2007 when he openly and candidly spoke about the credit bubble. Just check out his interview on CNBC with Maria Bartiromo on October 4, 2007 in which he warned that “the credit problem is just beginning” and that “rally in equity and credit is based on the mistaken belief that the worst problems in credit w
ere behind us”. Those who listened and acted on his warning saved themselves a lot of money & grief during the 2008 meltdown. That doesn’t mean Mr. Fink is always right. Nobody is. But we always took his predictions & analysis seriously and tried to listened to him whenever we could.
We may be fans but we are never sycophants. We became skeptical of him when Mr. Fink changed from being an analytical observer to a zealous advocate of stocks. Individual investors have been burned by zealous stock advocates since 1998. American investors who believed zealous advocates and got too heavy in stocks were gored very badly both in 2000-2002 and in 2008. We felt Mr. Fink’s zealous advocacy could lead to another debacle for them.
Mr. Fink added to our skepticism when he did not seem to care about the double-digit declines stocks suffered in 2011 & 2012. We felt he simply did not understand how these declines (draw-downs in street lingo) affect the sleep of most individual investors. So we became critics of his manner in our weekly Interesing Videoclips articles. We dare say we have been more consistently critical of Mr. Fink’s public statements than most.
Today, we admit we were wrong in our judgement. Why? Because, in their 2014 Outlook, Mr. Fink and BlackRock have publicly stated that much of the juice has been squeezed out of the markets. They have advised investors to be careful and cautious. They write in their 2014 Outlook, “It is better to buy an umbrella before the rain. Volatility is cheap and most assets are expensive”.
Mr. Fink began expressing his concern two months ago. On 29th October 2013, he said in a public forum,
- “It’s imperative that the Fed begins to taper,… We’ve seen real bubble-like markets again. We’ve had a huge increase in the equity market. We’ve seen corporate-debt spreads narrow dramatically….We have issues of an overzealous market again“
We don’t know whether Mr. Fink and his firm, BlackRock, will be proven right or wrong going forward. What we do now know and what he has proven is that Mr. Fink is not one of the carefree zealous permabulls that have done so much damage to the confidence & savings of American individual investors. And all of us can see that Mr. Fink was absolutely correct in asking investors to be as overweight in stocks as their comfort allowed them to be.
We were wrong in our judgement, Mr. Fink and we sincerely regret our error.
4. 2012 vs. 2013; Bloomberg Television vs. CNBC
What happened to Bloomberg Surveillance, the winner of our Most Useful Financial Show of 2012? As we wrote last year, the show allows the host Tom Keene to have “detailed discussions, real conversations with expert guests, conversations that add real investment value”.
That precisely was the show’s problem in 2013. Unlike 2012, this year was an year for getting long and remaining long in US stocks. The simplest strategy, in retrospect of course, would have been to buy December 2013 year-end calls on S&P 500 and go to sleep. Detailed discussions, the forte of Bloomberg TV & of Tom Keene in particular, were neither useful nor interesting.
This points to a key difference between Bloomberg TV & CNBC. Bloomberg TV is not agile enough to change the focus or style of its shows. This could simply be because Bloomberg Television is neither independent nor strong enough to reject the culture of Bloomberg News & its Editors. So BTV remains wedded to long detailed discussions even in a year which calls for tactical trading advice.
CNBC seems much more flexible. Take their Friday 5 pm “Money in Motion” show that was both relevant and lively in 2012 when currencies were in active play. Not so this year. So CNBC dropped Money in Motion and replaced it with a half-hour Fast Money show.
Of course, both networks showed a fall in their ratings. But that is too be expected in a year like 2013. As CNBC’s Joe Kernen admitted in frustration, what drives viewers to financial television is volatility. He is right. When you can sleep through an entire year and be up 25% in an index fund, why would you watch financial television?
Cheer up, FinTV anchors. If BlackRock is right, next year could be rocky.
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