NBR Transcripts-October 8, 2009
Thursday, October 08, 2009

"Street Critique"-Hilary Kramer, Chief Market Strategist at A&G Capital Research

PAUL KANGAS: Tonight's "Street Critique" guest is still very conservative, even though the market is up. She's Hilary Kramer, chief market strategist at A&G Capital research and author of "Ahead of the Curve." And Hilary, welcome back to NBR.

HILARY KRAMER, CHIEF INVESTMENT OFFICER, A&G CAPITAL RESEARCH: Thank you, Paul. It's a pleasure to be here.

KANGAS: Unemployment as we know is hovering near 10 percent and expected to stay there through next year. What does that mean for the stock market?

KRAMER: It means, Paul, that there are certain sectors that are going to perform poorly, simply because 70 percent of GDP is the consumer or individuals. So you have to be very careful about retail stocks, even with some positive news out today, consumer discretionary, the restaurant stocks, travel and leisure.

KANGAS: What about all this stimulus money that is yet to hit the economy? Will it help the jobs picture?

KRAMER: I don't really see it making a substantial difference especially because so much of the money is really being funneled to other areas, other than creating jobs. Plus many of the jobs being created are really just jobs in Washington so it won't translate into higher stock prices.

KANGAS: With that jobless recovery scenario in mind Hilary, what sectors offer the best investment opportunities?

KRAMER: OK. I really see that the banks are the best place to be because they have the best deal. They have the best gig going around. They borrow at 0 percent from the U.S. government and then they can buy 10- year Treasuries at 3.2 percent. And they are not offering credit to consumers, to small businesses. They're printing money. They are making billions and billions of dollars. That's where you want to be.

KANGAS: All right, how about some specific stocks.

KRAMER: OK. Well, what I am seeing individuals looking for especially because CDs are now paying in the low 1 percent range are dividend yielding stocks. The first stock is HCP. HCP is a health care REIT that has over 6 percent dividend yield. This is a company that provides over 800 facilities, senior living, life sciences, medical offices, skilled nurses. It is an excellent company, well managed and a nice balance sheet. The next one is also a health care REIT. That is health care REIT is the name of the company. The ticker symbol is HCN. There you also have over a 6 percent dividend yield and health care REIT provides -- they have over 630 facilities, assisted living, independent living, medical offices. And again, you are going into the sweet spot in terms of the demographics. That is a growth area.