for by sky bridge media. gary: under a kaminsky, welcome to "wall street week." it' s been a crazy, unpredictable summer for the global markets. our guest today has weathered similar storms for the past way five years with great success. anthony: i' m anthony scaramucci. today he shares insights and output on what to expect from the fed in coming months, and how you can profit from it all. lou: this show has never been solely about investments. we' ve talked about anything that affected people and their money.

>> from times square in new york city, the new "wall street week." anthony: we are pleased to welcome stephen tananbaum, managing partner and chief investment officer. steve, great to have you on the show. steve: i' m from new york city, my parents still live in the same apartment was born in. upper east side, i went -- i i graduated high school there. >> were did you go to college? steve: vassar. >> when did you study? >> economics. >> you think you were going to end up on wall street?

i were to the law firm, didn' really enjoy it. i ordered the forbes stock market course over the mail, -- >> $450. steve: i had to trade stocks with bar mitzvah money. that was my spending money. >> and bar mitzvah envy. [laughter] steve: that' got enough money trading. >> how are you managing your bar mitzvah money? steve: the first talk i lost money in was robotics vision. a friend of my brother suggested it. the story didn' t make a lot of sense. and then i membered thinking i could lose money on my own, i don' t need someone else' s advice. anthony: now you go from kidder.

acquisition and high-yield finances. from there, i the by; it was hard. i was with pension and i sent a 100 letters to the top 100 firms. high-yield. joined. it was a two-person group. after two years, the manager leaves and they gave me the opportunity to take over the fund. i wanted to be an owner. that wasn' t available where i was. between having a business plan and a piece of paper that i carried around why was recruiting people that said it' s one piece of paper, here' s what i think i can do. i was able to recruit people. gary: how do you describe the culture at golden tree? steve: we are a forum where

unusual -- we have 29 partners, and the majority of our partners are actually promoted from within. it' s a meritocracy. it' s very much collegial. there are no special deals. in some places you are paid off of your increased revenue. every partner is paid or is compensated on how the firm does. anthony: why is that beneficial? steve: there are a lot of models that will work. we want to create a model where everyone is focused on helping each other. gary: let' s shift what has been a quiet summer. i think in july energy -- early august. august 17 has changed dramatically. give us your take on what you think happens, and what you think is happening now in both the credit markets as well as the equity markets around the world? steve: right now, there is a lot of

dissension on what' s important to prioritize to be concerned about. is it the fed tightening? is it issues with china? is a potential instability from greece? that' s what the market struggles with on how to prioritize. i think that the idea of a d valuation -- d valuation was surprising to some. if you look at the u.s. and 1% of her gdp is trading with china , it' s hard to believe that that is going to drive how we do. there are a lot of crosscurrents, that creates opportunities. i think focusing on near-term fundamentals, which seem fair to good -- and labor market that continues to add a couple hundred thousand jobs every month.

anthony: is a recession on the table for 2016? if so, that will have significant impact on the credit markets. steve: historically, the credit markets have led the equity markets out of recessions and into recessions. right now, the credit markets are genuinely very strong. gary: a bond investors, the saying on wall street is bond investors are smarter than stock investors. is that true? steve: not at all. my guess is that' s from bond investors. anthony: we have to get equity investors on the show too. gary: what is the bond market saying that different from the equity market? steve: i think what the bond market is not as concerned about the direction of earnings. i think with the equity

is trying to grapple with some of the currency issues and some of the velocity of earnings issues. i think the credit market really tends to focus on growing earnings, given that there' s a lot of fruiting -- floating-rate debt, how much that rise might hurt the ability for interest coverage and payback. >> we' re down to percent for the year. i know it feels a this guy is falling, but it' s 2%. >> sign-up for the free "wall street week," newsletter, where we week wrap the markets and dive deeper into the most recent episode of feature articles on investor primers. sign up today. "wall street week," in part by hightower, and

anthony: we are back with stephen tananbaum.

and mary and robert. we' ve got about $46 billion of industrial assets that are payable. we' re going to get some answers as to what' s been happening. robert, want to stop with you. what do you tell people it' s been happening? rob: we want to focus on what happened and why it happened and the opportunity it created as a result of it happening. in terms of what happened, it' s a bull market correction. it' s caused by growth and policy scares we' ve seen in the market. there' s been since 194011 bull markets. 2210% corrections since then. -- 22 10% corrections since then. we' re trying to tell clients use this as an opportunity to upgrade the quality of her portfolio. gary: mary, do you agree? what do you tell the people? mary: when panic strikes, you

have to have an approach. we talk about how much risk you are comfortable with and the quality that you own and has that changed? we may feel insane today, but in an insane world, we have to keep our sanity. the risk we talked about before, and the asset allocation we talked about before is what drove it. gary: how do we know if we are in a bull market correction, or something is changing? steve: you don' t know until you have perspective. we look for how broad-based the correction is. i agree with rob, it' s most likely bull market correction. it seems to me as if the stress in the system seems relatively light. we' ve had a long time without a correction. we were due. looking at the credit markets overall, we are still very healthy. looking at where the correction

part, the commodities in industrial -- particularly when you are exporting, where those markets are weaker in asia in particular. it seems like it makes sense. anthony: is this a buying opportunity a lot of categories? steve: in credit, it certainly went from not good value and high-yield to mediocre value to better value. i wouldn' t call it a volume opportunity. but certainly a better opportunity. if you look at bank loans , you have something like almost 50% of bank loans were trading a couple of months ago above car. now it' s only about 15%. that market is materially corrected. high-yield bonds are wider by 50 to 75. this another not meaningful correction, but better value. anthony: wake up on a monday

1000 points, and you have a list of things that you like the one would like to buy, what are those things? mary: there was a look of the quality we have already. it' s interesting because it' s pretty easy to get analytics quickly, like what' s the high lower the average pe and where are we with yield? these names we wanted for a while anyways and we look to pop into the middle lower prices. the difference in the august volatility is it unraveled where he quickly like a bungee cord. it was all over the map. how could anybody feel confident that you actually were -- anthony: given where we are today? mary: we like international a lot. before august, things were looking pretty sanguine. if you keep the quality high, we also like a lot of nontraditional space. it' s a way to control the volatility. something like golden tree is an example.

rob: look at the meteor sector -- the media sector. they sold off espn which had disappointing growth. the full sector basically sold off, and to us, when we look at the trend , and some of the secular changes, we don' t feel the selloff is justified and see some great opportunities. broadly speaking, whether it' s time warner or even something like purdue' s stock, which is something that we know from the bankruptcy, they basically split their publishing and their tv operations, and tv is the operations we are focused on. we think it' s a great value today relative to what it was a month or six weeks ago. gary: steve, you are talking about the traditional media companies that were hurt in the summertime because of cord cutting and advertising revenues. using traditional media still

steve: at today' s price, yes. gary: i want to us back to something you said at the mcnary said. i know there are people watching the show that wish they had taken the opportunity to upgrade the quality. they hear this, they listen to it, but they said there with unrealized losses and they don' t know what to do. what do you tell a client , hypothetically, client comes to you with a portfolio and a whole bunch of unrealized losses. how do you mentally get over that to make the move to upgrade a portfolio wally wise? -- quality wise? rob: we' ve come off of large gains. it' s an opportunity you can make s a lower incline burden to making that transition. stocks. especially large cap multinationals face twin headwinds of stronger dollar and depending on your view. one of the things we have

feel there is more based drivers for performance. in the eurozone, for example. we think there' , low oil prices, a weaker euro. those are all' stimulative. we have an ecb units as we are going to stand up and support greek exit. s it' very similar things. those are two stories were the earnings are fundamentally well policy. from a sector perspective, if you want to get cute and start to think about where is their opportunity that didn' before? there was a huge growth story and energy five years back. story. a devalue story. when you look at it on an adjusted pe basis, or are seeing levels you haven' t seen in a very long time.

mary and i work with, there' s one sector the johnston the forefront recently, the mlp space. you' ve had people talking about that space. as value we haven' t seen there since 2009. that' s almost like the baby with the bathwater. anthony: let' s ask mary about how her asset allocation would be? mary: it' s important to keep maturity short so we don' t worry about duration. if interest rates go up, your meal -- your yield may not be enough. if you were earning 7% on short-term paper, you have a lot of wiggle room. we don' t have that today. we have been doing more nontraditional space in terms of whether we talked about high-yield converts, global, etc. more currency play with the yield. as well as looking at the traditional space satellite

anthony: "wall street week," will be right back. >> i think the world' economic from attic stress. i think the average individual third of the value of their portfolio. facebook, follow us on twitter and instagram. "wall street week," is sponsored

anthony: we' re back with steve tannenbaum, mary deatherage, and rob sebring. when clients call you up and they are worried, what are they worried about? rob: they' re worried they are missing something obvious. it' s human nature. when you check your portfolio regularly, there' s been a lot of analysis done on this. as a concept in behavioral finance called myopic risk aversion. it' s the idea that you take long-term holdings a look at them frequently. and what it does is it causes you to experience more volatility than you probably should. and you hold a lower portion of risk assets. >> one of my old colleague said all of their long-term investors have short-term losses. steve: it' s because they are looking at it too frequently. i think if you use times like this -- louis

i heard this third party, that sometimes, something comes along that knocks you into a different investing atmosphere. that' ll think there' s anything coming along like that. i think we' re -- the central tenets that existed. anthony: you agree. mary: 2008 was pretty clear with coming in the terminal. i don' t see a bus we don' t see coming right now. gary: it' s difficult for individual investors not to pay attention, because they watch the media and they want stuff, and they see the fear. in a perfect world, you look for three to five years, and you look every day. how do you advise viewers to be interested, but not be assessed? -- obsessed. mary: as advisors we have to communicate and do a temperature check. but the expression you can' t eat

our messaging was consistently how bad it' s not. because we are down 2% for the year. i know it feels like this guy is falling, but it is 2%. relative to what the markets are doing, and looking at the environment and the quality that it has at the risk we are taking, it made sense. in the absence of communication, people get obsessed. anthony: is this the right time to be in the hedge fund space? what would you might recommend? steve: it depends with a strategy is. and also the record. i think if you have strategies that you feel can do well in a three to five-year period, assuming you are not in a recovery mode, you may go in a recession in three to five years. and you have a manager who you can look back and feel comfortable with what they are doing, then absolutely. anthony: if you think that in the world of stocks and bonds in

etf indexes, where do see the role of alternatives being? steve: if an alternative manager can demonstrate the value they are creating , they don' t deserve to exist. gary: your thoughts alternative assets is a position in a portfolio? rob: i think they should always be a position in a portfolio. i think they are particularly attractive right now. you have divergence and policy, avery johnson growth globally. you are starting to see dispersion of cross, and -- across and within sector. for the first time in a long time, the opportunity set for good alternative investors can take on that liquidity premium when everyone is clamoring for liquidy and -- liquidity in etf space, that' s when you want to do that. you mary that with the fact that bonds are expensive but essential in a client portfolio for the role they play. and equities are not expensive.

they are certainly not cheap. i think all that comes together a nice portfolio. anthony: mary, you have a lot of alternatives? mary: about 20%. a lot of people don' t understand the k-1. it is relate performance. there' s disconnect in confusion. wealthier clients understand the dynamic better. but regardless, we will do a lot of nontraditional space, whether it' s nontraditional growth orientation or otherwise. gary: we worked at lehman. i didn' t say you, i said we. it says gary was there too. the systemic risk today, is that different from the crisis? or we still headed for another car crash? wreck. not a car crash.

i think it' s still all about liquidity and financial health. some of those have improved. i would say right now, the thing i look at the different is the system is due leverage to there' s not as much risk. anthony: how do you think lehman derailed? do you think the bankruptcy was what throw us into oblivion? steve: i do not. i think bear stearns happened. it created a general market assumption that every bank out there was too big to fail. and then when lehman was left under, all hell broke loose and expectations got wildly secure. the fed, the government is going to back everything, and then they let lehman go. anthony: they were doing bank equity raises. think there was one point in the summer of 2008 where something like 50 out of 50 bank offerings for 2008 were underwater.

it was to do the next one -- who is going to do the next one? no one is going to do the next one. there' s a lot of that happening in the energy space. as a lot of secondaries trading relatively poorly. i think there' s a different systemic on situation in energy than in financials. on financials, when you do have a systemic issue, the love that they' re undercapitalized and anyone who' s put in additional capital has done poorly, that' s a very tough cycle to break. gary: -- steve: one other thing that' s different is world savers are demanding a huge amount of safe assets. i think the world is in polk -- post economic stress. the average individual cannot believe they lost one third of their portfolio. they see that one third and plus return to their vote for, they are still wary about it.

anthony: "wall street week," will be right back. >> wall street week is sponsored

gary: start with rob, talk about your end. what do you see the markets -- in a bull bear cycle? rob: i think we' re going to be higher than we are today. statistics show us that, just looking back through history. we are in an environment of accelerating growth, low policy. that is not changing. anthony: what are you thinking? mary: the fact this all unraveled so quickly, and we may still have volatility ahead encapsulated. more realistic. is still strong. steve: overall positive, we and change her mind.

finger. m position for a to be more positive. anthony: we want to thank our guests for being with us today. you can check with us all week on wallstreetweek.com. until next sunday, have a prosperous week. >> the preceding program was

. (applause) well god bless you. it's always a joy to come into your homes and if you're ever in our area, please stop by and be a part of one of our services. i promise you we will make you feel right at home. the finest people in all of houston, tx right here at lakewood. so come out whenever you can. but thank you guys for being here today. i like to start with something funny. please note, this is just a joke. don't be offended. i heard about this blonde lady. she was driving down the freeway when she got pulled over by a female police officer who also happened to be blonde.

the officer asked for