Bought bank of america for 12 Straight Days. You own it, what do you think . The stock is still down we like it, we like it for its diversified businesses ive been wrong for the last, you know, year owning this stock, but as we get forward to i think closer to a normal market, whenever thats going to be, bank of of me and j. P. Morgue aren in a good place. They have a lot of businesses and are trading when you look at the market at a very cheap value. Yeah, the catalysts are not there yes. He as got a good position in it. Jo he, 12 Straight Days, right . Stocks up 8 in that time frame, maybe giving it a bit of a jump start, 337 million they know own almost 12 of the outstand, should investors following the oracle into bac and maybe the banks more broadly . Well, i mean, colt he could buy it for another 12 days he cant fix the headwinds you know im in pmorgan. Thats the one bank in the best in breed the reasoning behind why i am not in that is just the significant consumer exposure that it has and the absence of trading revenue that you will find in some of the other financials like a Morgan Stanley or goldman sachs, even jpmorgan which reported a strong quarter. No, i wouldnt suggest if youre going to be picking one of the Money Center Banks, or if youre buying bank of america right here, you might as well go buy wells fargo. Youll probably have more upside return if there is an environment where the banks all boats seem to rise so i think you have to stay best in breed, which takes me to jpmorgan if were goods to the thesis a all banks are going to rise, you go wells fargo. Steve weiss, what do you say . I dont think steve can hear me. Brevina, you know, if you look at the financials, joe painted a picture of why they havent worked its no mystery, but is i think it depends on the time Warren Buffett is known for being very patient if thats how youre feeling, it might not be a bad time to start nibbling i dont think were goinging to traction in this group until we start to see more of an economic Recovery Scenario playing out that involves Interest Rates moving higher. We have a bit of a reality check with ked saw how many of they banks started building their reserve. So they definitely are exposed in many ways we own jpmorgan. Thats also our only holden. We havent completely abandoned the group. We just think we are not yet prepared to start adding more exposure here given what before we see a recovery. Joe, youre going to get a vaccine, youre optimistic about that i think youll get multiple vaccines, yes. So Economic Data today decent, you think were going to get a decent snap back into the economy as you get into 2021 i heard the conversation yesterday request josh and jon i know jon used the word rage. Josh seemed to feel as though it will be the moment well see this euphoria in the capital markets. I still believe, scott, the areas of stress and strain as it relates to airlines, travel, entertainment, brickandmortar retail, youre better served as ma marc lasry has discussed, youre better in the credit market, so youre telling me theres a euphoric lifting in the equities market that im not okay holding apple, nike, docusign. Im not willing to step out and buy the components of the covid19 stressandstrain industries that have been so challenged. Weiss, i think we have you back what do you make of this buffett move 12 Straight Days theyve been adding shares of bank of american america. Well, you know, its interesting. I would probably buy it all in one day, but away from that if i were to buy a bank, it will be bank of america. I do they they are best in breed. I dont think moynihan gets enough credit for the job hes done hes not as visible. He doesnt do all the conferences that jamie dimon does, but look at the execution. Its been nearly flawless, despite being tagged, if you do back to the issues that the government put it into in the housing crisis i would buy that however, i agree with joe. The headwinds are much too great. The fed is saying were going to adjust or inflation targets, so you could see low rates for a long time. Thats a headwind i dont think you overcome i think youre at a it right now, so im not there. Cant get anybody excited about this at all. Sarat, i chose you that buffett endorsed your ownership. Hes been buying it for 12 Straight Days, you know, i guess so no one seems to be excited about it no, look scott, i like it when they dont like the financials, okay let them not like the financials i think theres value here when the value comes back, i think youll see money rotate. I i dont like wells fargo. The Management Teams are the ones you want to buy these are the Big Money Center banks you want to do theyre diversified businesses, theyre about m a, asset management, about trading, a lot of other things and youre getting paid to own these stocks they might be debt money for a while, but youre getting a different along the way. When money does move into these stocks, you want to be there, and then you i think youve seen most of the down side joe, im not naive to the issue facing the banks were talking about a tenyear with some 50 someodd basis points some data is good, some data is horrible lets see what happens on friday you said bac is a consumerfacing name i get it, but buffetts play seems to be i had would rather by too early than too late for somebody to take advantage of opportunities, not saying there is now, but maybe its the same sort of thing. Hes willing to take a bigger bet in the longer picture that may have some significant up side and already the largest shareholder in apple has the biggest slice of that. If hes looking for his own barbell approach, why not this move so if i was sitting with Warren Buffett and he was to identify the reasons behind his purchase, i could say to warren, you could find the same reasons to buy wells fargo i truly believe that if bank of america is going to begin to see some significant appreciation, youre going to get even more out of wells fargo its a mirror image of bank of america wells has had fleas, though how are they the same . Has wells has had fleas, correct bank of america, there is already a premium thats built in because of the Brian Moynihan and the Management Team, clearly. I think Charlie Scharff in his Management Team is an excellent Management Team. I dont think that investors have properly priced in a premium for that Management Team so if i compare the two, bank of america and wells fargo, clearly you are correct. Wells fargo has had way more fleas and every other type of insect that can bother you, but looking forward it if we are going to get the appreciation from Money Center Banks which are not as i best in breed, jpmorgan like, i will get more up side than wells far aro and would tell Warren Buffett he would be youre trying on outoracle the oracle good look with that. Steve, go ahead. Then brenda. I want to throw in one thing there. Yesterday the fed came out with their loan officer survey. It showed that credit qualit standards are tightening at the bank, and loan demand is down. So forgetting about Interest Rates for now, youve giving money away for free, yesterday the banks are worried about the credit they have raised their reserves, and people arent borrowing enough because consumer appetites, and demand is down. Hold your thought, weiss. Forgive me for interrupting. Rackspace has opened best i can tell its down there it is. Its down 20 , is what well call it for rxt as it begins trading. That ipo is open steve, forgive me. Go ahead. So the fundamentals wait for the yield curve are negative as well as the pandemic, as businesses shut, banks will have a tough time making money and not adding their reserves you want to be at the other end of it. Thats going to be the big boost to their earnings, but i dont want to be there just now. There are other places to make money. I think buffett bought it as a bank proxy well, hes bought a lot of it i can seed a different time, i mean, people like to throw stones these days. There are plenty of people who have been doing that, just because, you know, the airline bet went bad, all of a sudden its like the guy lost his touch. Clearly he sees something in the banks. Joe . Were talking about financials to add to that steve has been saying, why now . Why trade down in quality now when on the other side of the election we could be facing a Regulatory Environment that would be much tighter, much more stringent for Financial Institutions i would rather face that reality and position accordingly after the election you mentioned his position in apple. Its a big one lets talk about that. It gets a rare Downgrade Bank of america downgrades, saying the risk reward is more balanced the whole world owns it, club everybody on the desk today. Steve, in fact you bought more. I did this is just an idiotic trade for the very reason im going to tell you economically whether you own one share of a 500 stock or ten shares of 50 stock, it means the samele thing however, as i talked to people who arent in the business, and i say do you own apple amazon they cease i cant, its too expensive. You go through the math. They still dont get it. When apple splits, its my belief, when they split at the end of the month i think youll see a whole new wave of buying for people who havent been in the stock. Why . Because it will be 100 ticket, which is still high versus a 450 ticket. Its a trading position. I got into it early. Theres no reason to sell the stock whatsoever in my view. The downgrade from b of a, yeah theyre all solid points, but theyre points you can make, but right now its a free pass until they launch the 5g phone, which i still say will be the biggest Product Launch in their history. Apple is a trading position for you . No, no, no. I have my core position, which ive had for a long time i boo the some more as a trading position. I got you i thought you were calling the whole thing now a trading position i just wanted to make sure you wont get me there, scott. Youve already been run over by this thing, i dont need to make you more road kill. Ive been run over by a passenger. How do you get run over when youre you keep trying to jump out when the thing is moving one of these times youre going to fall on the floor yeah, well, well, theres the good me and the bad me got me is staying for the ride again, by the way the nasdaq got within a whisker of 11,000 earlier. That just underscores this march that tech has made what do you with tech more broadly here . Weve actually been reducing some exposure here weve had good timing in terms of adding spoke yurt, b ining ee recognizing that 40 of xlk is apple and microsoft, so re concentrated in those two positions. We sold that position last week, recognizing weve had a nice move here. Were growing increasingly concerned about the expectations going forward. So its actually encouraging to see in downgrades of apple that will temper expectations somewhat, but following these amazing quarters we have seen, we saw an environment where expectations will be ratcheted up going forward, and were concerned that some of good fundamentals are stealing from subsequent years, especially in the case of apple, we cant forget this is a consumer company. Theres been a lot of buying out of the necessity, i think, for many families, especially buying an ipad for every kid in the family so they can do remote learning, maybe buying a mac, but the question is how much is left in the budget for a new phone, even if its 5g and something new. Were doubtful whether or not it will be quite as big as everybody is expecting we still continue to like apple. We still have a position in apple but just growing concern the expectations have gotten a little ahead of themselves here. I hear you. Joe, in terms of the bank of america note where they talk about risk and reward, obviously theres positives, everybody gets it, Everybody Knows that story. Are we ignoring the risks that may be out there brenda mentions its still a consumer name. Are we ignoring too many when they talk about the fangs collectively, the market cap is 7 trillion, thats nearly 26 of the s p weve been talking over the last 24 hours has apple that is had record weighting in the s p for the last 40 years. The on. As a portfolio manager, trader, investor, any steward of capital, how can you not be in apple with a 6. 5 share of the overall s p, as we continue to march higher and higher for the s p . I still think the story is about a world that is absent of growth thats why bonds are acting as this significant hedge youre seeing treasuries priced where they are in that environment, in the very isolated places that you can find growth, you have to pay a premium for that thats exactly what apple is giving you in addition to the snoiskt market share so foolish on me that i liquidated amazon when i did really foolish if i would liquidity amazon and apple i just cant do i cant deal with the selfloathing again. One day was enough. No, no, no. Whoa, whoa theres no selfloathing on that this is the practical mannerism of managing a portfolio and understanding, well, i had amazon, apple and microsoft. I got out of one of the three. Im out of moves as long as the world is challenged by the absence of growth, as long as a tenyear treasury is pricing at 55 basis points, i need Growth Equities which are bond proxies in this environment. So i have to stay with those microsoft and apple positions. If i dont, scott and the s p keeps moving higher, you know what i am . Im actually short. Sarat, you have a small position in apple. You have a balanced portfolio. What do you do with big tech its a portfolio approach again, you know, taking what brenda said, taking some of the profits for some of these that have run i disagree with joe. If youre looking out a couple years and want to be in places where theres going to be value, you take off some of the money its okay to trim the amazons and microsofts we have trimmed paypal and nvidia along the way, to you sein the moment its euphor and its great, but its not going to be stagnant were going to be moving forward. Thats where were looking for the opportunities. Its going to be wrong for a while, but im okay with that, becauseivity some of the winders on the balanced approach tony dwyer is here with us welcome. I hope youre well welcome back. Hey, judge, doing well. Thanks. Glad to hear it where do we go from here were about to push 11,000 on the nasdaq every day thats where the money is, thats where the money has been good. The question is will there be a rotation away from some of that . Is it time to rebalance and rotate or not . I think there is, judge im much more focused on the rotation than the absolute target level for the s p 500 i think were in an extraordinary situation, where if you with look out into 2021, they was flivver supposed to been a capital recovery. I kind of butchered it on fast money, but it was supposed to be the reverse of a square root symbol, you get a rapid declines and you grind it out until you figure out a vaccine or a another antibody solution. I thought today was important. Make on may 24th, powell came on to 60 minutes and talked about how we were just printing money and when asked, he said dont worry about that for the foreseeable future today clarita came on with an interview with steve that i thought was extraordinary, almost as big a deal he talked about the structural changes since the last time they did this benchmark tool review, from 2012. It is a massive important thing for macro. He said that theres powerful Deflationary Forces at work, and theres powerful the term was powerful forces holding down global rates theyre coming up with ambitious review and looking at important evolution of the fed strategy and pursuing their goals but they keep telling us the game plan that theyre going to make it work so my bet is theyre going to follow through with it they are coming up with tools that are going to get to full employment or 2 core inflay average come hell or high water and theyll come out with it soon youre not suggesting the powell i think theyre going to get more agreggive its not necessarily just presenting money and sending it out. I dont know what it is. Thats the beauty of this thing. How many times, scott, have we had people who say theyre out of bullets every time something happens theres a bigger bullet that nobody saw coming. They keep telling us theyre coming up with an ambitious strategy we history liquidity, a fed thats doing many infin aye qe globally with fiscal plays globally, and based on the oec indic indices, we have a Global Economy thats just beginning to pivot from historic weakness i dont know what happens in the next month or two. I could tell you in 2021, if all of this doesnt equal growth, we have a much bigger problem in credit than what why would i rotate now away from big tech . Its worked. All of these steps forward in value have been two steps forward, three steps back or two steps forward and then they sit down. Our game plan foot megacap stocks, scott, is you dont bet against them, but what sarat said, as they keep going to the point where theyre becoming an inappropriate part of your portfolio, you can scale it back you dont have to underweight or bet against them personally, if youve been in those seven stock that is one of my mentors early in my career talked about, thats really the only strategy you had to be in Everything Else is kind of punk. Ultimately thats a pinlt where that will transition if you see remember that 60 minutes interview you have a twoweek run of the banks as soon as you get this perception that the or acknowledgement you know me, im a data guy i dont want to bet against that but that could be a ways away whats aways . Six months maybe. It could be, back in 2001, the commodities were and then you had the recession associated with it, nobody warranted to buy commodities then, and then you went into a tenyear run when the dollar is weaker, its an economic especially coming off a seriously defensive move, its an economic statement. Ive got to leave it there. Are you