barack obama belt chuck schumer nancy pelosi of not been on hold that better she shows she was once a very effective speaker this last term shows she no longer has that power democrats realize it. gerry: thank you both very much, king stressful might culligan chris bedford, thank you so much for joining us. that's it for us this week will be back next week for interviews on wall street journal at large. thank you so muc ♪. jack: welcome to baron's roundtable where we get behind the headlines and prepare you for the week ahead. i'm jack otter. why daniel yergin is not concerned about 100-dollar a barrel oil. one of wall street's stop investment strategists reveals his stock picks for 2022. we begin what we always think are the three most important things investors ought to be thinking about right now.

the market recovered from a week of wild swings but investors are still focused on how the economy will fare as the fed tightens. apple and microsoft reported strong earnings, industrial companies not so of what to expect from tech companies reporting next week. meme stock mania may be dying on rate hike fierce. we'll toll you what is the next big thing. on the "barron's" roundtable, jack levinson and jack hough. nasdaq was flat, there was a lot of motion sickness on the road to nowhere? >> that's right. you look at the nasdaq, it was up .01%. it did nothing this week, right? it was down 4.5% before coming all the way back. this hasn't happened in a very long time. last time was 2015 in august that was when china was devaluing its currency. we had a freakout there. the market didn't bottom until

february of 2016. for the s&p seen it do the same kind of things. saw at the bottom in 2020 and saw it in 2016. wish i could say this sends and all clear. you know what? i have no idea. jack: last week you said you weren't worried. you're on the fence. what has changed? >> i think the fed has changed, i'm fairly worried about the market not necessarily short term but longer term. the fed is hiking rates and that means that the short term is, short term treasury yields will go up. we're not sure what happens to the long-term yield. you might get asking called a yield curve inversion when that happens, when short-term rates are higher than long-term rates that usually signals a recession is coming. powell said he may hike rates six times this year, maybe more than that i worry that we will get that inversion. that inversion will signal recession. that is going to be top, not

just on the markets but the economy obviously. jack: recession? ben, we just had gdp print of something like 6.9%. how can you be worried about recession? >> first of all that print was really helped out by inventory build up in december. people bout everything that they needed back in october and november. didn't buy anything in december. so you get this big boost to gdp from the inventories. without it would be around 2%. now we're going into the first quarter of 2022. i think as morgan stanley put their estimate at 1.5% for this quarter annualized. it is not a great economy right now. it may be because of omicron but there may be something else going on. jack: you're real grumpy. real quick before we go, what are you looking at next week? >> looking at payrolls. i don't think there will be enormous surprises. they should be very strong. they should convince the fed they're going the right course with a rate hike in march. it will be after that we should

start worrying. jack: sir jack, talk about that growth versus value thing going on, value after a decade of underperformance surged back. this past week, what is it tech darling links, apple, microsoft and industrial stalwarts report and market is not happy with what they say. >> big neck bounce is back. blowout earnings from apple, stock jumps. same thing from microsoft. investors discerning between quality growth companies and some of the trash out there. big tech is the new consumer staple. we used to buy tobacco stocks when we were worried about the economy. no one smokes. we just check our iphone 7500 times a day. we'll see next week when alphabet, meta, amazon report whether that trend holds up. another thing going on out there seeing supply chains still a problem. you mentioned industrials. ge, some weakness there. caterpillar.

they both mentioned supply chains more so than soft demand. so you know, investors are losing patience for that basically. laugh last thing i point out, this shift toward value stocks. some of the value stocks are also cyclicals. you heard grumpy bren talking about the possibility of a recession. talking about six rate hikes. i heard seven from one bank this past week. if you start getting numbers like that you worry about the economy slowing down. that could hurt cyclicals which are value stocks. the fed needs to find a way to stick the landing without sticking it to cyclicals. jack: gotcha. by the way you were exaggerating on 7500 times a day except for my son. apple sold 71 billion worth of these phones in three months which is mind bog felling. carlton, we're out of time. i apologize, almost out of time. tell us why the meme stock trade is dead and what might replace it? >> yeah. certainly dead for gamestop, amc

down from the huge highs they had in january last year. more important though the short sellers that retail traders were taken advantage of, they got a little bit smarter. then you also have to look at the apps like robinhood. robinhood was only able to gain 200,000 customers in the back half of 2021 where schwab added 900,000. even worse robinhood was paying more that get the customers than had has miss toreally. momentum for trade something not quite where it was this past year. that doesn't mean speculation is totally gone. seeing it in people talking about things like crypto again even though they come down sharply, a key word i heard at the a huge fund conference this week, metaverse. we have fidelity launching a metaverse. jack: before the memers bite my head off, gamestop went from 90 bucks to 307. i don't think it goes much

higher from here. wall street analysts predict a price of $100 a barrel this year. why energy expert daniel yergin says don't count on it. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq i have moderate to severe ulcerative colitis. so i'm taking zeposia, a once-daily pill. because i won't let uc stop me from being me. zeposia can help people with uc achieve and maintain remission. and it's the first and only s1p receptor modulator approved for uc.

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jack: oil prices are up this year. inventory and production have declined and the russia ukraine crisis could cause prices to spike. some analysts are now predicting $100 a barrel this year but my next guest says u.s. production is poised to bounce back. joining me ihs market vice-chairman, author of the new math, energy, the climate and clash of nations daniel yergin. dan, thanks for coming on the show. we appreciate it. >> thank you. jack: we heard all the predictions of 100-dollar oil is this likely but will drillers ramp up supply before we get there. >> i've always been reluctant to

get into the 100-dollar a barrel camp, this crisis now, this is crisis with russia, not ukraine, you have a crisis between two of the world's biggest oil producers, u.s. and russia. it is possible if russia invades you will see prices spike. there will be panic in the market and disruption. jack: geopolitics is never good for oil prices. let's pull back a little bit. if you think about 2008, 2014, prices were actually higher than they were now. could we get back up to even those levels in a gee owe political crisis and if so would it tamp down demand in order to bring prices down or just send inflation even higher? >> russia exports 5 million barrels a day. if a couple million barrels get taken out of the market that would have a severe impact. it is already a really tight oil market. even if you didn't have this crisis going on we would have higher prices than many had anticipated. you made the point of course which is very important, one positive is the growth, really

return of u.s. shale production which despite all of the benedict shuns that were said over it is showing growth. it is one of the few stablizers in the current oil market. jack: let's pivot to natural gas because you've been talking about russia. if the u.s. is trying to get suppliers to liquify natural gas, supply it to europe so russia has less leverage. is there really enough liquified natural gas to actually do that? >> there is not much. if you're a u.s. producer you already probably gone up to your maximum in terms of producing because of the prices. you're going to get some gas released from asia now because it's a more mild winter there. we saw in january and in december a high volumes of lng, including u.s. lng going to europe but russia at the same time has already been cutting back its exports to europe are down 50% from what they were a few months ago. so it is very tight.

europeans are right to be very concerned. and the u.s. is scrambling and what's happened the u.s. government suddenly discovered that shale production in the united states is not only an economic value but it is actually pretty important geopolitically. jack: that certainly is true. let's look farther out on the energy landscape. can you see at this point a time which alternative fuels become a large enough share the demand of fossil fuels actually starts to come down? how many share or what share of electric vehicles we need so oil prices suddenly start to shrink because there is less demand? >> we certainly see new sales of evs strong in europe and of course in china very strong government support and of course strong government support here but i think you have to look, we have a 1.4 billion car auto fleet around the world. so i think at least numbers i came to in the new math it is

around 2030 you start to see world oil demand begin to slope down. even while you have evs in the developed world, you have growth coming from the developing world where most of the world's people actually live. jack: yeah. at least they produce some oil there. >> yes. jack: one more question for you on a different topic, ihs market put out a big report on supply chain disruption and to be honest it wasn't terribly optimistic. give us a one-minute run down on that and will that be inflationary? >> we certainly see the supply chain disruptions one kind or another continue into 2022. it is not just one supply chain disruption. it is a number of them. it involves everything. look at shelves in stores. eventually it will get solved. it will continue. there is no question this is a major source of inflation just as you see these prices going up of food and everything else. so this is not going to be a

some said but a marathon to get it solved and it's a problem that is across the whole economy. jack: yeah. if we have more demand than we have containers coming into the ports prices are going to go nowhere but up. daniel yergin. thanks so much for coming on. >> sure, thank you. jack: one of wall street's most respected investing pros has surprising stock picks for 2022, including one with more than 7% payout. what scott black is buying. that is next. welcome to allstate. where auto insurance now costs less. ♪ and savings like that follow you everywhere. now, save more with allstate. ♪

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develop or worsen. serious allergic reactions may occur. it's good to be moving on. watch me. move, look, and feel better. ask your rheumatologist about cosentyx. ♪. jack: earlier this month "barron's" surveyed a group of leading wall street investors on the outlook for 2022 and where they're putting money this year. a veteran member of that prestigious panel, delphi scott black joins us now. so good to see you again.

>> thank you for inviting me, jack. jack: before we get to your stock picks give us your big picture view. what are the most powerful forces moving the market that invest really need to understand right now. >> for the short term, it is fed policy. 7% is disgraceful. it is highest since june of 1982 and they're way behind the curve. obviously interest rates go up, p-e multiples contract. that is really what's been happening. there are a lot of good things on the horizon. relate gdp grew at 6.9. it should still grow 3 1/2%. operating earnings in the s&p should be up nine or 10%, headline unemployment will stay below 4%. the other problem that is critical, the supply chain disruption and we don't know what the duration of this omicron variant is. the real issue is whether the federal reserve will raise four

or five times f they're little pollyannishness, they think the inflation will be low twos. nobody can prognosticate that far ahead. indeed corporate profits will do well at 9%. they really do shake out the inflation it is possible the stock market in the second half will rally. it could be up mid-single digits for the year plus 1.7% dividend yield. but it will not be a run away bull market like last year. jack: before we get your names, what stocks tend to do well in that environment, with high growth, inflation, rising rates? >> we're value plays as you know. we try to buy good companies with high return on equity, free cash flow and absolutely low multiple but i would say this to your viewership, 1:00, the s&p 500 is highly concentrated. the five top stocks are 22% weighting, nasdaq they're 41 1/2% weighting. 11 of the stop 25 stocks in the

s&p sell for over 25 pes. don't expect multiple expansion. i would tell the people stay away from the vanguard 500 and the qqqs. i don't think that is a smart place to put money. the other thing is, it makes for great reading in "barron's" and on tv but all the fly-by-night companies, air bn. about, spotify, they have absolutely no earnings. 50, 100 billion market caps. as interest rates go up you're discounting way into the future on net present value which is zero. this is the grater fool theory of investing i would tell people to avoid this nonsense. >> scott, this is ben levinson. i grew up in denver i saw sivitas what do you like about the stock? >> it is feminine in latin but know up, roll up, original bonanza creek which was a small independent producer out in the d.j. basin. they rolled up high point.

extraction of oil and gas and crest to peak it is a nice little company. they have almost no debt on the balance sheet. net debt equity is .08 at this point. they have a strong reserve, 10 1/2 year life with 800 odd million barrels of proven reserves. the stock is ridiculous. it went out at 52.86. my number, close to 960. which is five 1/2 pe. many times e&p are valued discretionary cash flow. they will do 16, 20, in discretion nary cash flow, it is.3. this is ridiculous. a company with zero financial risk. >> scott, this is carlton english. net star, media group is one on the radar. what opportunity to you see over the next year? >> this is the best run of all the independent companies. down in irvine, texas. they basically have 199 stations and 116 markets.

they cover all the 50 top dmas. big beneficiary of political advertising. they will do over half a billion in revenue from political advertising alone up from a puny 40 million. their regular business and advertising flowing about 6%. they're free transmission revenues are about 10% revenue. when you president it all together the stock is $162 today. my number is little different than the street. a little lower 2525. >> jack how, we have 30 seconds, hercules capital business development company. the yield almost pornographic, i 7% s that right? is it safe and what do you like about the company? >> $1.32 dividend, 7.8% yield. they specialize in technology and life sciences. the bulk of the company is drug discovery, 32%, software 21%.

internet 18%. they have 91 investees 2.95 billion. 91% is senior secured debt. since they founded the company back in 2008 they have only had four basis points writeoff. they're really good lenders. they know what they are doing. they have 71 equity kickers with the bondholders that they have which actually adds about another 204 million. the other thing is they have excess cash on the balance sheet of a buck 57. they will have to dividend it out 70 cents or a dollar because of rule for bdc. whether it goes into annual dividend or special distribution it's fine but this is a very well-run company. it is a nice good play on technology in silicon valley. jack: scott, no one will accuse you of not doing homeworks on stocks in your portfolio. thanks for all the detail. question really appreciate. >> thanks for having me, jack, i appreciate that as well. jack: coming up next roundtable members give their investment ideas for the coming week.

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♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

♪. jack: so jack, my wife and i gave each other a peloton for christmas. i put the hardware on my credit card but she has the monthly charge on her credit card. that is what the bulls for this stock like? >> yeah the subscription, i allegedly own a peloton. i haven't been on it a little while being honest. the stock was over 150 bucks a share. down below 25. i spoke with one analyst who upgraded it to buy. most analysts have gotten more bearish on the stock. he says if you look at the subscriptions, the value of a subscriber over their life is about 4500 bucks a piece in gross profit. wall street is valuing peloton

at 3,000 bucks per subscriber. even without growth for the company he thinks the stock is a good deal. he thinks there will be growth. there is 3 million subscribers. 100 million people in the market with gym memberships. you hear more about peloton and other broken growth stocks in my "barron's" streetwise podcast. jack: recurring revenue from those memberships investors really love. let's move on to actionable ideas. ben, what do you have for us? >> jack mentioned caterpillar earlier. it had a tough time on friday after reporting earnings dropped 5%. people are worried about higher cost and dinged margins. caterpillar has been rising prices and should be able to keep doing that because commodity markets are so strong. this looks like an opportunity to maybe buy the dip. jack: carollton, what do do you have have? >> southwest, profitable quarter. first quarter will be tricky they warned but expects profitability on back part of the year.

new ceo coming in. analysts expect earnings grow in excess of 30%. jack: fuel prices behave always nice to be airline stocks under those conditions. ben, carelton jack, thank you very much. to read more, check out this week's edition ad at "barron's" dot-com. that is it for us. >> from fox studios in new york city. and happy weekend to all welcome to the program analyzes the week that was an helps position you for the week ahead. coming to you this weekend from the u.s. southern border just outside of mcallen texas. i will be surveying the border crisis firsthand bringing you the scene from the ground here in texas but here with me this weekend 13 states attorney general from around the country they are alarmed over the impact the surge of