of respect and love and care and a lot of people within this government and he's doing what he can but is not as compelling certainly as boris johnson pretty not to be part minister again but i think he'll be invited back into the fold. gerry: britain went from having a female monic in a female prime minister to now having a male monic in a male part minister. diversity is everything in the uk. >> at least they had it for a few minutes. gerry: my great thanks in this weekend this year to kim strassel and jessica, thinking much for being here, happy new year will be back next week for >> "barron's roundtable" sponsored by global x etfs. ♪

jack otter: welcome to a special year end introduction of "barron's roundtable". we look past today's headlines and focus on the year ahead. the outlook for the war in ukraine and ongoing tensions between the us and china, we ask vice chairman john emerson what it could mean for the economy and your investments. later, energy, tech stocks were the talk of 2022. what can we expect in 2023? we are looking at the best and worst investment suggestions of the past year, those we are glad we did in those we wish we hadn't among them. an online sports betting platform, longtime home goods retailer and fitness superstar of the pandemic era. on "barron's roundtable," ben levisohn, carleton english and jack hough. we hold ourselves accountable by publishing a look at the performance of our am investment picks. let's look at the highs and lows of this show over the past 12 months.

if you could take one back, what would it be? ben: my call to purchase draft kings. i made other lie out lousy calls, those will come back. draft king trafficking was me trying to pick the bottom, a beaten up growth name that used to be popular, everyone is gambling but it has a lot of competition, spending too much money, not the kind of company you want right now. jack otter: you made a lot of great calls. give us one. jack hough: another highflying growth stock where i did get close to the bottom, with reported earnings, it turned a surprise profit that had the stock move up 50% or so and the company looks like it is still doing well in the online business. selling stuff to people who have pets. jack otter: what is the investment listings? one is a falling knife and the other is a bargain.

jack hough: you have to go to the fundamentals. if it doesn't have earnings there will be a problem and if it has earnings those earnings have to be growing, not shrinking. jack otter: you have a new button, when would you push it? carleton: when i called for bed, bath, and beyond. this is a retailer that has been under pressure for some time. we have a new management team, just as we were getting some momentum on that plan, the pandemic hit. the company was given a path but it is more clear the problems aren't just pandemic related, and maybe it can't be the turnaround story everyone wants. jack otter: earlier this year you were on the energy train. carleton: look at all the things happening, the return to work, the pent up demand, all the people buying cars that

were not taking public transportation, that will drive energy prices up and in turn, drive stocks of oil and gas companies. xle was one in the early part of the year. and up by 50% for 2022, apa was later in the year. jack otter: you called out i bonds twice, january and later in the year. not exciting but a good investment. carleton: not exciting at not the one that gained the most but first time in a decade we can talk about bonds as an exciting place to invest. one that the average investor can get involved in nbp institutional money because of limit on the bonds. jack otter: risk-free return instead of return free risk. we are fans of peloton. jack hough: a year ago in this segment i was looking good for telling people to stay away

from peloton stock. the valuation looked like bike shorts on my backside, stretched. the stock had collapsed. i thought now i am going to be the hero. we are going to ride it but i will be a hero again this year and i got chafed by that call, the stock continued tanking and there is no way i will double down here. the company is losing money. never bet on fitness and against sloth. look at weight watchers. 20 years that stock has lost 90% of its value. it is headquartered in the fattest, richest market on planet earth, one of the biggest bull markets for stocks. mcdonald's over that time is up 28%. my success story, i told people in march to stay away from electric vehicle stocks, tesla, lucid, they have all lost half to 2 thirds of their value.

tesla is actually, the valuation is no longer crazy. i don't want to get peloton there yet. it is not so crazy at these prices. jack otter: smart investors monitoring geopolitics and the

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[male narrator] the ducks unlimited dream came to life because of conservationists just like you. your support has enabled ducks unlimited to conserve 15 million acres throughout north america. but our mission is far from over. wherever wetland habitats are threatened, we'll be there. because we understand that long after we're all gone our dream - remains in the best of hands. jack otter: the us ends to years of part one party control. the worn ukraine is continuing to expand its military. what does it mean for the economy and your money? vice chairman and former us

ambassador to germany john emerson. thanks for coming on the show. >> thanks a lot and happy new year. jack otter: it is not a happy new year in ukraine. it will be a long, cold, dark winter over there. what does this mean for international relations and the international economy? >> i give you three frames to think about this with. number one, it is fair to say february 24th, the day the invasion started, was the last day of the post cold war era. what marked that era, the fall of the wall and the dissolution of the ussr particularly for europe there was a huge peace dividend and what we saw during this era was an embracing of globalization and integration, an effort to integrate russia and china into the global economy. those days are over. we are now in a completely new time and that will not be on

wrong. the second thing to keep in mind is this is a war that will go on for a long time. it is not a war that zelenskyy or putin can afford to lose. it's not a war either of them can win. vladimir putin already lost the war he wanted to fight which was a war to overwhelm kyiv, decapitate the zelenskyy government, dominate, subjugate ukraine. the question is are he can win the war he is fighting which is to hang on to what he already has. it is not a war that zelenskyy can win because he defined winning as pushing russia out of every square inch of ukrainian territory including crimea and that is unrealistic. because it is a war neither of them can afford to lose and neither can win it is a war neither of them concurrently stop. in terms of china, what is interesting is in my recent trips to germany i heard from government leaders and leaders of some of the major companies are starting to ask do we really want to be as dependent

on china for our economic and commercial prosperity as we have been on russia for our energy needs? jack otter: the same question is being asked in the us. do we have to diversify the supply chain, nearshore, onshore, but let's pivot to the u.s. congress where we see a new congress this year. then you have some experience in the halls of washington, unpack that for us. >> several things come of the biden legislative agenda is not going very far in the new congress, that is for sure with the possible exception of tough on china legislation, seems to be one of the few things we can get everybody together running congress. it was interesting, the omnibus package had a couple things in it that were quite positive for the investment world, the fact that people would not have to

take the required minimum distribution on their iras until they were 75 instead of 72 and some of the funds people allowed to build up in 529 accounts can be rolled over to roth iras and other things including a huge package of relief aid and weapons aid to ukraine but the one thing i worry most about is with the tight, with the close control in the house of representatives and the reality that what i call the marjorie taylor green caucus will almost have veto power over almost anything the incoming speaker will want to do in the house of representatives, i worry about not only your basic housekeeping legislation but something like the debt ceiling. there are a number of members who served notice they have no intention of negotiating with the white house over the debt ceiling and this debt ceiling dance which, as we know, is not

about new spending, it is about congress funding checks it is already written but this debt ceiling dance goes down to the wire and there is a deal that is agreed upon as we move on but this time there could be some real concerns about the fair faith and credit of the united states being honored as we move into the february and march time frame when this comes up and that could royal markets. jack otter: we have an election coming up in 2,024 that is going to add all the more weight to the issues you talked about. who will be running in that election? >> you want to win a bar bet? bet on a rematch. regardless of the challenges donald trump has experienced, he has got such a hold over that 30, 35% of the republican primary electorate in a multicandidate field, he can run the table again and win most of the delegates with that

and joe biden has made clear if trump runs he is running. a lot of democrats are starting to say he deserves to run, he has had a pretty good run certainly in the last 6 to 12 months of his presidency was with the midterm elections. i would bet on a rematch. jack otter: who wins? >> that will depend on 45 to 65,000 people, fewer people than you can fit in any major nfl stadium on a sunday afternoon, in 5 or 6 states, are going to answer that question. no matter what the popular vote is, the electoral college is going to come down to a few tens of thousands of voters. honestly, tough question to answer two years out. jack otter: not a great way to run an election but that is the way it is going to be.

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ibly252,022 was a big year for energy. what is next for those industries in the new year? earlier we talked about energy. barron is cautiously optimistic. 14 we don't expect a repeat of 2022 because there are too many competing factors, you have the risk of a recession that would normally cause energy prices to go down. that is always a tricky one. if you look at 2,008 the price of oil did tank but it shot back up. recession would not be good for

energy companies but you also have the prospect of china reopening, that will put pressure on demand. we have continued geopolitical tensions in russia and ukraine which could put prices up. it will be a bumpy ride. jack otter: they have been exhibiting capital discipline which was missing big time in the previous decade but that tends to slip. they get excited, let's drill more and prices will go down. what stocks stand out now? carleton: you want to look at shell, very cheaply, cheaper than exxon. exxon is trading relatively cheaply but got ahead of itself. i would take shell over that but to your point, a lot of these companies have exhibited some discipline and learned some tough lessons in 2015-16, so even if they get too excited, after what they experienced six or 7 years ago we will not have a repeat of that.

jack otter: healthcare had a tough 2,022 but demographic trends behind healthcare, we are getting older and in a tough market healthcare support in the storm. jack hough: it was kind of split in 2022. in terms of pharma, the big study free cash did well. eli lilly and merck. biotech names did not. spider etf, that underperformed, the market holds a more speculative market. not all of them generate free cash. you know it is a bad year for biotech when you have this many companies changing their names. a company called citrix is now latter x. adagio is now called invid. i'm thinking of changing my last name to why?

gsk is now gsk. speaking of slowing down, the biggest growth story of the year had to be the obesity drug, the diabetes drug accused -- approved for obesity now. eli lilly is expected to get a similar drug approved in 2023 and amgen announced promising clinical results. jack otter: do you expect a rebound in the biotech sector? jack hough: investors say there's going to be a rebound, time to be selective. when do you say don't be selective? throw money at the sector willy-nilly. i would say don't be selective. put money in the etf if you are going to do it. jack otter: all eyes are on tech for 10 years, the only place to be as long as you had tech in your portfolio. now not so much, 2,022 was the year of reckoning. there is a danger when

something did well for so long, to think i will buy it cheap. it doesn't work that way. ibly17 ben: all eyes on the tech sector, it is a case of where everything that had been going right for them stopped going right. big tech and a lot of the monopolies, they own their markets and now you have government regulators looking at them saying you shouldn't be doing this deal, competing with each other, you have microsoft and amazon with cloud services and google too, competing in other areas as well and they see that there earnings and revenue are not the way they were before and that's never a good thing for a tech company when it has a high valuation. jack otter: where are the opportunities? ben: you have to look at the companies that benefit from tech rather than tech companies themselves. we are looking at industrial company that really does tech stuff.

those companies, dear is another one, is taking the tech making tractors to help farmers. those companies benefit on the users rather than producers of the tech. jack otter: do you think chipmakers will benefit? ben: it is a huge cost for them. they are going to at some point. all this has to build up these factories. that will take money and time and it will take a wild to generate profits again. a lot of it will come down to valuations. at what point do you know ahead and do that? it is too early. jack otter: you had some great advice for 2,023. they're looking for you. who? who's looking? there is no time. they will kill you....but my daughter.

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jack otter: in our conversation before the break, we forgot one important sector, big pizza. jack hough: it hasn't been a good year for domino's or papa john's shares. if you are worried this is a sign of the pizza apocalypse, be of a security says no. investors are concerned about the pandemic affect, not just a pulling forward of demand for saucedo and cheese stuffed into our mouths at home, but also unlock new delivery options. fancy places near you sells woodfired truffle focaccia, they didn't deliver. that is old-school. during the pandemic he had no choice, had to be flex will, did a lot of take away orders. now there is this new competition for big chains and the worry that will cut into growth. b of a says customers on these

aggravate her platforms, once we get these new restaurants, there is a difference from and incremental to the existing customer bases at these big chains. they say we will return to normal growth patterns for big pizza, and a rising share of carry out is this which is bigger and less penetrated than delivery suggesting to us a long growth runway ahead. jack otter: i want you to. to your macro crystal ball. inflation in 2,023, what do you see? ben: i was wrong on inflation in 2022. i didn't think it would be as big a problem as it is. people expect it to go away fairly quickly. we are not going back to the way it was. he will come down but it will still be a problem, it will be stickier. there are components that don't want to go down. that means we will have some investing changes we have to make but the good news is these bond yields give us some actual returns.

jack otter: savings accounts don't pay 0. 0, you could get 4% or more on a cd and that is a lot of pizza with 10 grand in next year. carleton, what are you looking at? carleton: looking at carbs but the beginning of the years a great time to think about your retirement plans, 2022 saw conversations about changes to 401(k) plans and things like that. always a time to get your financial self in order and make sure you can retire and eat all the pizza you want. jack otter: good advice, thanks as always. to read more check out this week's addition of barron.com and follow us on twitter, dr. michael youssef: hello, my dear friends. blessed new year. welcome to 2023. what a joy and delight to know that in this coming year,