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maria: welcome to behringer and terrible where we get behind that like to prepare you for the weekend i am jack otter, canadian investment compete with s&p 500, investment cio med favor on a few other places to put your money, potential trump white house return is boosting sectors and we will discuss how you complete the trump trade and what you should avoid, we begin with the expert panel and three things investors ought to be thinking about right now. on the "barron's roundtable" ben levisohn, megan leonhardt and al root, last week liz ann sonders was on the show and she said volatility has nowhere to go but up, right on cue, curvy week on wall street. >> this was brought to the r for rotation, this is an idea they had to get out of tech and by other things and take on life this week. all seven of the big seven fell

this week and particularly nvidia got hit the hardest, that brought down the nasdaq and s&p 500, the dow in the russell 2000, did pretty well, that is partially because small-cap did well, banks did well and energy stocks did well until the end of the week but that was the story. jack: all 493 did better than nvidia read i'm sure there were a few words but out of the back seven into the few others the equally weighted return, those were much better than the broader index. >> rsp, the etf that finished fine on the week, given the losses and s&p 500 that was not bad. jack: what you want to determine whether a blip, funny week for the start of a real long-term secular change. >> in looking at the small-cap incredible run from over a five day. they gained 11% in the outpaced the s&p 500 by the most, i think 1986. an amazing run another thing 80%

finished at 20 day highs, that is good news for the s&p 500, it usually means that there's enough animals periods that is going to roll tape in the s&p which could gain another 10% over the next six months. >> another one is financials, meghan why are investors bullish. >> if that was a lesson to be learned this is it using a lot of interest in investment banking and many ways because of the economy, were optimistic that the fed will cut rates and receive economy be solid and this is a new situation, m&a and good experiences, wall street may be good, consumers a little bit more shaky slowdown in spending and that may hit a little bit more on the consumer side of the balance sheet and a rain cloud to look at on the horizon. jack: if they can borrow money for less taken by things like m&a, charles schwab was a bit of a rain on the horizon, what was going on that was way down let

me check 60%. >> it did not have a good week but what are the situations where charles schwab has been reach willing to look like a bank and unfortunately some of that has not panned out for charles schwab we see lingering issues with cash and cash deposits being down in the ceo said we might revisit some of this. i think what they're trying to do is keep a little bit of head and they do have a decent evaluations and a little bit in the bar higher than the traditional bank stock there's an idea that they need to pull back on the bank and refocus to make sure the evaluation stays solid. jack: a tough week for chip stocks in taiwan semiconductor interesting thing were president trump gave an interview and he suggested the u.s. does not have an obligation to defend taiwan, the stock got hammered. >> you talk about the rotation, there's always a catalyst, the sounding week on taiwan was the

bomb that went off, the taiwan semi is a tree and of a company. it makes all the chips for everyone. the expert reporter tate kim, 90% of all the advanced chips are made in taiwan by taiwan semi. nvidia, amd, taiwan makes their chips is a critical company and if you read the interview and the comments from president trump there was notes that sounded like nato and we need to be compensated for the services that we provide. he may want to walk that back eventually. jack: he said global depression would be possible if they were out of control. we were talking phones, washing machines, everything has advanced chips. >> the one bright spot was intel which is interesting because it's building this in all bidding ohio and we have other

opportunities. >> back to his comment, the goal of the u.s. is to produce 20% of the chips by 2030. this is the kind of situation the world finds itself in that's unbelievably important company on the small island. >> it makes the machines that got hit. >> they had a recorder, bookings were up the stock was down double digits for the week, 30% of the revenue is generated by selling things to taiwan semi. jack: we need to build more chip production. over the past ten years, diversification has gotten a bad name, on the best investment strategy for the next ten years right afte

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jack: in the tech driven market investors who built globally diversified portfolio got steamrolled by the s&p 500 should investors rethink or safeguard. here are some answers as cio med favor is coming on the show. >> for more than ten years diversification has been really, really painful michael says diversification always says you're sorry, why has this been so rough. appearing american investor and you put most your money in u.s. stocks and bonds which most americans do, congratulations pat yourself on the back is not a great tenure since an amazing 15 years one of four times in history where the s&p has compounded for over a decade of 15%, the other three have names the roaring 20s a century ago

in the nifty 50s and the internet.com bubble. it's not like this never happens it goes to show was pretty rare in the good times often lead to bad times vice versa but those who have been there and done it is been a great run, those who diversified is been challenging one of the most challenging periods for a global diversified in the last 20 years only comparable. his post-world war ii in terms of magnitude in years in a row losing out to the s&p. jack: do we have a name are you ready to name it. >> name stock era sounds about right for little a.i. echo if you come up with a better name let me know. jack: historically not going all in on whatever the winners are hasn't eventually paid off we are seeing some suggestions that is starting to work, is this

recent rotation for the start of a bigger trend? >> the late great peter burstein said it's great because it's defensive but also it's often said, you never know where the next big gain is going to come from, that could be from foreign stocks and real assets like commodities or tips and could even come from bonds we have yelled again for the first time, you never know if you look at coco that's gone crazy, gold at an all-time high, building this diversified portfolio which by the way has been totally fine in the last 15 years and 7% a year the problem seven verses 15 and if your neighbors doing a 15 that the worst possible set up. what happens when stocks do great for so long they eventually get expensive and is where they are now and they eventually get concentrated which is where they are now one of the most concentrated periods in history very similar to 2000

or late '90s as well as a 1920s and historically not a warm fuzzy place to be in the ensuing decade. >> even if you were properly diversified 15 years ago you're pretty overweight in the u.s. especially big tech, where you like to be what looks cheap and has the potential to defend us against attack slide. >> good news when you go to the grocery store you don't have to pick branded flakes and s&p in the u.s., the world and thousands of stocks, we were particularly strong opinion right now on smaller caps, mid-cap stocks particularly high quality value stocks with lots of cash flow we call the shareholder yield companies trading at much lower valuations and much better position in higher quality than traditional market cap weighted it is very expensive also if you look across the pond, u.s. stocks even after the run are only two thirds of the world market cap

there only a quarter of the world gdp these are long forgotten, most investors will have any but foreign stocks emerging market and how to participate the same way that u.s. toxins the bottom of 2009 they are much cheaper, foreign development is cheaper emerging is cheaper and underneath the surface, the high quality value companies and some of the biggest threats we've ever seen relative to the expensive top-heavy u.s. market we think it's a huge opportunity and not just this year but for the next 3 - 10 - 5 years as well. jack: we have to leave it there, thank you for coming on the show. investors scrambling to position for a possible donald trump white house how to

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jack: investors placing bets on donald trump winning the white house with some sectors higher with other south were taking a look which industries are getting an interest behrens senior markets analysis writer paul thank you for bringing you in your long title on the show, we recommend that investors keep their politics and investment portfolio very separate. at the margin politician policy can affect a few sectors, let's talk about those, sometimes counterintuitive, energy is a great example. >> energy is where there are expectation for stock should benefit under a trump second presidency but if you remember energy stocks got hit hard during his first tenure in the white house partly because there was so much drilling that went on, the increase supply and then

you have the pandemic which reduced demands, that was a problem. we hopefully will have another pandemic, if you factor that out and oil stocks go up as potentially if oil prices go up that is good news for exxon and chevron in the services companies. it's a funny dynamic, what is good for drivers is bad for investors as prices go down, not all cars use gasoline you love your electric vehicles that's been a fascinating dynamic because they have been hit and helped in elon musk, the journal reporting that elon musk is putting $45 million a month into a pack and helped his fortunes. >> it's been a wild week at the beginning of the week elon musk endorsed president trump over the weekend and president trump said elon musk is fantastic in various interviews so you thought maybe the tide was turning and that set tesla ford in general up early in the week and ended up taking shares like rivian and lucid, the thinking

being a president trump rolls back the ev tax credits and things like that that is good for tesla it has the skill and profitability to weather the storm, the smaller startups not so much good for ford and general motors as the things slow down then came the rnc speech on thursday he took a lot of shots the ev's and basically everything got hit at the end of the week following the speech. even tesla it ended up the week down about 3% but the rivian and lucid doug 16 you see how it was impacting the different stocks. >> we know that trump loves oil drill baby drill is not good news for alternative energy, what are the utilities who got an a.i. bump this year has fallen more than 10% in july because of concerns about exposure to wind power what you see with review regards to alternative energy. >> alternatives taking it on the

chin that is for sure and when president trump rolls back we talked investors and basically to sum it up, if you take away the incentive the production tax credit it makes renewable power a lot more expensive to build and finance ended effectively slows with subsidies that tends to be bad for utilities that do a little better with a build a wind plant versus a coal plant effectively data have operating cost of coal pass through the customers they earn money on the entire capital base the entire trend that people should remember, the demand for electricity is growing faster than it ever has before it's not all ev its data centers, manufacturing coming back to the u.s. that benefits utilities. i think this is an opportunity to buy the dip in the renewable centric maybe not so much but take a look at utilities like vanguard or investors. >> obviously bank stocks we've been talking about about this

week but what do you think it means for the financial sector generally an updated trump presidency. >> i think there is hope in the second trump term you have a further relaxation of the more stringent regulations on banks but let's be honest the banks are going to rise and fall with jerome powell and what the fed does if we get rate cuts potentially in september and several more this year in 2025, you could wind up having lending activity and also a rebound in m&a that is good news for j.p. morgan chase, citigroup, goldman sachs. jack: assuming there is a fed. >> tech stocks have been carrying the market. >> is an interesting dynamic because jd vance has come out with an anti-big tech in a rare show of bipartisanship in washington and likes what lina khan has been doing at the ftc you might have more concerns about enforcement of the likes of amazon and also but but at

the same token, a.i. is not going away, nvidia and chip stocks have already had their day you might start to see cavities like microsoft and apple in software and services side get some of the a.i. boost. jack: crypto, jd vance is a fan and trump is a revelation on the. >> crypto's and the gop party platform, forget about drill baby drill it is mine baby mine you might have right platforms a marathon digital with big mining companies get a benefit in companies litecoin base and don't forget blackrock as they run the largest pot bitcoin ptf they've actually held up pretty well in the recent market volatility to. >> blackrock non- geraldo with the rnc will see what happens there. >> bitcoin itself could run up. a great story there, meghan and al have a pair of investment ideas and looking at crazy action and small-cap stocks, were you worried the wedding would be too much? nahhhh...

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>> for sports fans, stock fans crazy action and small caps, what was going on. >> this is what everyone talks about how great it is the market is broadening out in the small stocks are doing well, that is great if you're a stock pick, it's never good to have a few stocks be the market, the problem is the magnificent seven i know exactly who they are, what they do, i know their ticker symbol in the narrative behind them, it's very easy to follow the problem when you get a rally like this was small caps you get stocks like more thick holdings, test systems, calm scope, i cannot pronounce the names let alone what they did up until a few hours ago this is

what the russell 2000 news, small caps are lots of stocks that nobody's ever heard of it we don't know what they do and it makes it very hard to pick the stock. jack: if you want to be a speculator throw the dart at morse but what would be another approach. >> and think the best approach to small-cap is using an exchange fund or a mutual fund that i shares russell 2000 it f iw m, the i shares, core s&p 600 etf s&p 600 is a little higher quality than the russell 2000, if you want active management you could do something like the boston trust small-cap, beos os and active fund that is going to pay 70 to pick the stocks for you, any of those might be a good option. time for actionable ideas. >> i'm going to throw another name out there, this is a really interesting company is the bottler of coca-cola but that's not what you want to do what

they are or what they do unfortunately the stock took islam and now is the time to buy, my colleague teresa ramirez, this is interesting, not only is a company good with coke but they have a really fantastic convenience store chain that is expanding rapidly throughout south america, it is by. jack: americans love mexican coke. >> i love mexican coke. >> what is your idea. >> expectation coming with thursday trade one stock that did absolutely nothing all week, newmont the goldmine or it was a reminder that sometimes it is good to have things that don't do what everything else is doing and gold prices are up 20% over the last year, this is only up five leaves for trading 13 times, 25 estimated times earnings 2.1%, gold. jack: people betting on a trump win in november, gold looks interesting because trump and vance have moved away from the strong dollar policy that has

been doctrine in washington for decades, gold would do well under the administration. >> you could catch a bit with falling interest rates. before we go and update on the wall street journal colleague evan koester which he was convicted of a fictitious charge of spying on a sham russian court, he was journalist doing his job but he was sentenced to 16 years in a maximum security colony is sickening and unjust verdict, the dow jones continues to work for his release and that is all for us. to read more checkit this edition of barron's.com, we will see you next week on "barron's roundtable". ♪ ♪ ♪ larry: welcome to kudlow. i am larry kudlow.