gary: welcome to wall street week. it has been a brutal third-quarter as global uncertainty impacts all asset classes. our job is to point you in the right direction. anthony: today, we sit down with two of the best in the business who disrupt the status quo. >> this show has never been solely about investments. we talk about anything that

>> from times square in new york city, the new wall street week. anthony: we are pleased to welcome elliott weissbluth, founder of hightower. thrilled to have you. elliot: good to see you. anthony: we want to talk about your background. where did you grow up? elliot: suburbs of chicago. anthony: went to public school? elliot: big public school in the north shore, then rice university. came back to chicago for law school. of all places? elliot: the college counselors said to me, it is warm and the girls are attractive. gary: was the analysis correct? elliot: yeah. [laughter] you have a better i growing up.

you studied what? elliot: computer science, switched to english. graduated with a degree in english. anthony: what was your first job? how did you make the transition? elliot: first job was a litigator. went from an english major to a litigator in chicago. when to law school at john marshall and realized as i was practicing law, there was a big problem facing the financial services industry. being a guy that could not leave well enough alone, i decided it was time to focus energy on solving that problem. gary: what was it about the upbringing in your college years that made you say, i want to take on what is clearly an industry that has run things for a certain way for a long time?

elliot: what we decided to do 15 years ago was begin educating people there are manufacturers and service providers. hightower has basically said, there is a way to solve the problem and have the best of both worlds. you can have wall street sophistication built into a service business. because we do not manufacture anything, we have to buy it from wall street firms, which are quite proficient at building in genius financial products. anthony: the mayo clinic for wealth management, basically. people come in for a diagnostic check from you. then you are upgraded to the best of class in financial services. elliot: great analogy. anthony: what role do you see technology happening in the future of asset management? elliot: i think technology today -- look at your business in the terms of the way technology in on wednesday to.

it has the potential to really a lot of value. anthony: the robo puts what you need into a computer, which spits out an allocation strategy, that is a threat. elliot: when i talk to financial advisors, and i spend time with their clients, the litmus test i had in terms of assessing if i have a financial advisor i want as a partner, who i view as a great day -- grade a financial advisor, the litmus test is how embedded they are in their life. are they there for the wedding, the funeral? how are they involved in the person' s life? you do not talk about the performance of the portfolio. is based on a numeric reputation

, and will be disrupted. gary: if you had to define five characteristics of a good financial advisor, whether an independent firm, a large financial supermarket, whatever it is -- what are the five characteristics? elliot: there are two that stand out. one is they have in their dna a genuine passion for their client. take care. it is sort of like a good doctor, lawyer. you said down and you talk to somebody. if a financial advisor is someone who has passion for the people they support, it exudes out of who they are. what manifests in their profession is passion about the markets, investments, passion for doing a good job. that is number one. number two, they have a keen

understanding their working with someone with strong emotional reactions in a rapidly changing world. so they know, take the past couple weeks for example -- we are fueling calls about what is going on. what you are doing is not deploying an investment skill. in some ways, it is a counselor skill. anthony: financial coach or therapist. gary: i will throw a couple out. should you want your investment advisor, wealth manager, to their own cooking, meaning they invest in the same things? elliot: absolutely. many of the best advisors will say to their clients, as part m doing, i am also doing for myself. generation is rising income.

elliot: if you think about the way millennials treat the consumer activity, investment activity, even though people are dismisses of them, saying they do not have any money, the boomers have assets, i think it is shortsighted. looking at how millennials impact their parents, it is having an impact on boomers. think about travel. if you were to look at the data today, 10 years ago, boomers would not have purchased travel online. fast, 50% by their travel online. just because the buying community is not actually doing it, the millennials are encouraging mom and dad. anthony: gary is still using a carrier pigeon. [laughter] gary: one thing about

millennials in the investment space is they watch their parents. they watch the massive correction in 2000. the financial crisis in 2008. major corrections in 2011. the industry as a whole has to convince the generation -- we grew up understanding what long-term investing is. this is the record of long-term investing. but what i have found in the last several weeks is we have to convince the generation the long-term investing philosophy is still relevant. they have watched their parents for the last 15 years go through a paradigm that has not worked. elliot: that is the crooks -- crux of it that boomers relate

the brand, the alert -- allure of wall street. the millennial experience with wall street has been different. it started with dotcom, enron. so are we surprised this demographic is skeptical or distrustful or asking questions of whether the business is in their interest? gary: do you see this as a worry or opportunity? elliot: a catalyst. a good questioner will say, mom and dad, i have read about this online. hopefully that starts at a conversation about travel and all sorts of other things. maybe we should explore how this works. anthony: we will have more when wall street week returns. >> are we in a bear market warble market? elliot: bull market.

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gary: we are back with elliott weissbluth and amy butte, and shelley bergman. shelley, this has been an incredibly volatile third-quarter. first of all, what is happening? what do you tell your clients? shelley: after doing this for 30 years, i can tell you the last three months, what i have seen

shelley: you have the fed, people are very focused on it. growth in china. a lot of people are not trusting the numbers out of china. you have uncertainty with oil prices. uncertainty with commodity prices. gary: there are always uncertainties. shelley: no question about it, ok? but you have a convolution of events right now during a low liquidity environment. you have not heard from companies yet on third-quarter conference calls. gary: will we have a rebalanced market? shelley: a lot of the pessimism in the marketplace and a lot of big names -- of course, not only

fixed income, it has discounted some of the potential bad news. anthony: what you think about what has been happening this summer? amy: we have become accustomed to peaks and volatility. we have had crisis after crisis and we get calm again. we have had extended volatility. shelley: you are my financial advisor. i gave you my money. the market is rocked. as if you 500 down 8%. what do you say? amy: thank you for being my client. but i also give them warning. a lot of clients, a lot of people, are going to be surprised when they see the september statement. it is going to be very different. what we have to start talking to clients about, continue talking

long-term. are people still recovering from the 2008 economic trauma? elliot: if we were your advisors, one of the first things we would say is let us do our job. our job is to provide analytics and evaluating the market and your family' s needs. anthony: would you advise me to buy in a market like this? elliot: you do not want to give a quick answer to that. i do not know the 360 view of your family and business. gary: you are in an environment when they get their statements. shelley: the s&p 500 and dow

yet, certain asset classes outside of the s&p 500 have really been clobbered. you can put together a diversified portfolio today and have blue-chip names in a bunch of different industries down 20% with yields of 3.5%. you could be buying clothing and mutual fund on the stock exchange at 20% discount. historic lows. space, down 30%. very attractive. during these times, you can put together a portfolio with 5% cash flow while you wait out and invest heavier. amy: i am not sure what your strategists are saying, but earnings growth is over 7%

anthony, if you have places of it is time to look at options. elliot: it is also being able to that is emotionally satisfying, like selling. gary: i believe you have to be trained in this business. in quantico, said if you hear gunshots, run from the gunshots. we are training them to run towards gunshots. shelley: as an advisor, you have to teach clients to stay calm. amy: the average person cannot run a marathon. you have to train. gary: if i said, give me three what are they? markets.

anthony: any specific ones? china? latin america? shelley: i do not think now is the time to pick and choose some individual names , individual companies, given the bloodbath, let' s call it, in emerging markets. anthony: talk about sectors you like. do you like biotech? shelley: biotech, to us, have been off the charts as far as how he wishes. -- valuations. we like big pharma. anthony: what about energy? shelley: we just started looking

prices down 30%, 40%, yields a 12%. we just started taking a look at that and some of the larger energy names too. gary: how much of the activity since august 17 has been due to the fed uncertainty and not raising rates? shelley: 100%. >> like us on facebook and follow us on twitter. wall street week is sponsored by hightower, and unobstructed

shelley: over the next one or two months, hopefully we will get some clarity as to where the fed is going in terms of raising rates, whether it is a quarter

they have to get it out of the way. i do not think it is important, whether it is a quarter or a half. it is their message after they raise rates. that will get some uncertainty out of the market. when investors realize that long-term interest rates are not going higher -- i am talking about 10- years, 30-years, where viewers have connection to mortgages. gary: how much of the decline since august 17, in your opinion, has been due to the fed uncertainty? elliot: 90% to 100%. shelley: some out there have

the fed to raise rates. i think whether it is raising rates then or in december, it was the uncertainty of the message. amy: i think it would be bad to not raise rates. i think it is time, assuming there are no more shocks. shelley: right now, you put a little more uncertainty on the plate from when the fed made their announcement, to a future date. gary: something else that has created anxiety since august 17 is etf. carl icahn has been on the show, a number of warnings about this asset class. many viewers have moved into this product over the last decade. amy, august 17, the market opens

down. august 24 the following week. many etf' s did not open at a price that resembled the underlying assets. is this the beginning of this asset class not been able to price in underlying security? amy: it is understanding how this asset class performs in difficult markets. we are learning about that right now. usually, we learn about it and then there is more regulation. it is fascinating that the pendulum is swinging from regulators, who have really been giving exemptions or favoritism, to traders. they are now swinging back to individuals. to fit in the middle. gary: the premise of the etf

you with securities at a very low cost. but if you can get something at a low cost, and you can get liquidity but you are not getting fair market value liquidity, are you getting what you think you' re getting? amy: you cannot have your cake and eat it too. elliot: there is a disconnect between securities and the price of the etf. as a separate, it will create anxiety. when of the indicators we look at is the velocity of new products being delivered to the sec, and the pressure the industry is putting on the sec to ask that approval. if you have a mass herd mentality to sell product, and you see that they may not be

gary: shelley, you utilize etf in your portfolios. read going crazy on the 24th? shelley: we were not because etf ' s or individual stocks, when there was lack of liquidity , anybody going into the market when it is volatile can suffer from lack of liquidity. anthony: wall street week will be right back. >> wall street week is sponsored

gary: let' s take it back to long-term investing. u.s. economy -- fundamentally ok?

elliot: bull market. i do not bet against the country, the spirit. i look around the globe and i see other economies in a recessionary environment. amy: i agree with elliot. i think we are in a correction. the u.s. economy is strong. we have to be conscious and stronger dollar may impact how much our companies can earn overseas. but there is a lot of growth. people are paying down debt. energy prices are not high. elliot: confidence is high. shelley: people also have to better than people thought. japan is better. china. world gdp.

down, that is good for the u.s. economy. i think the u.s. economy will ch ug along. long-term interest rates will stay lower for longer, which is a good environment, whether it be equities or high-yield bonds. ok? even commodities. anthony: more volatility in the next 12 months? amy: yes. shelley: higher. amy: higher. elliot: i agree. anthony: gary? last several shows. what is your outlook? higher. i think there' capital investment from the s&p 500 and smaller companies. presidential cycle, my

want to thank elliott weissbluth , amy butte, and shelley bergman for spending time with wall street week. you can check in with us all week on wallstreetweek.com. have a prosperous week. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy.

. (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. these are the finest people in all of houston, texas right here at lakewood. (cheering) we'll make you feel right at home. but thank you for tuning in. thank you again for coming out today. i like to start with something funny. i heard about this minister. he bought a new horse. he trained it to respond to "praise the lord", meaning "giddy up" and "hallelujah", meaning "whoa". every time he said "praise the lord", the horse took off running.

when he said "whoa" it