One on One with Gary Motyl, CIO of Templeton Global Equity
Tuesday, February 10, 2009
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SUSIE GHARIB: Joining us now for more analysis of the Treasury's economic plan and market reaction, Gary Motyl, chief investment officer of the Templeton Global Equity, which manages $100 billion in assets. Hi, Gary.
GARY MOTYL, CHIEF INVESTMENT OFFICER, TEMPLETON GLOBAL EQUITY: Good evening, Susie.
GHARIB: What was your reaction to Secretary Geithner's plan today?
MOTYL: I think our reaction was much like that of other investors. We would have liked a little more substance, a little more detail, particularly on the private funding he described.
GHARIB: Tell us a little bit more. What did you want to hear from Timothy Geithner today? I know there were a lot of expectations of a major plan that was going to be laid out. What did you want to hear?
MOTYL: We'd like again more detail, precisely where these moneys are going to go, the timing, but again getting back to the public-private investment fund, you need some idea of how this is actually going to work. There is capital out there. There's capital in the United States. There's capital around the world available for a properly structured vehicle. But until investors really get some more detail on this, they're not going to be willing to change their sentiment and move into the markets.
GHARIB: Was there anything the Treasury secretary said that did encourage you, that gave you confidence?
MOTYL: I think overall the concepts are very good. Again the secretary is doing what many people around the world are doing, the Bank of China, the EU. These people are trying to stimulate the global economy, trying to get it stabilized, allow market forces to come to the fore and really get things moving again.
GHARIB: Are you seeing things moving again? Are you seeing credit flowing through the markets and through the economy?
MOTYL: We have seen I think some improvement in the last several months. If you look at some of the credit spreads, they have narrowed. They're not back to where they need to be, but there has been some progress made in the last several weeks that we are encouraged that again some of these new programs will have an immediate effect in the next say, three to four or five months.
GHARIB: With the markets off so sharply, are you buying or selling into this kind of market?
MOTYL: I think it's interesting,, when you look at what the markets have done globally in the last 12 months you now have valuations across industries and sectors, across countries, that you haven't seen in probably close to 20 years. We are encouraged by what we're finding, our analysts are really out there searching the globe for value. And we can now buy stocks today that we have either never owned or haven't owned in 12 or 15 years. Certain things like some of the technology stocks, some of the telecom stocks, really do appear to us to be very good value.
GHARIB: Is it better to invest in U.S. stocks or somewhere else?
MOTYL: We're global investors. That was John Templeton's original philosophy. We like to go where the values are. It's interesting to us that as opposed to in a normal market, you can find pockets of opportunity, either in industries or sectors or a few countries. Right now we're seeing that opportunity across the globe. It's interesting in our global funds where we do have the ability to invest in U.S. stocks, we're finding more U.S. names to buy. So we are again, in the long-term perspective we're very encouraged.
GHARIB: What about U.S. investors? I'm sure you hear this a lot that people are very nervous about where to put their money, some people are playing it safe and keeping their money in money markets or in plain cash. What do you tell them?
MOTYL: I think for the majority investors, you really do have to hang tough here. The valuations you're seeing today are not going to last forever. Again, we've been through many bear markets, many bull markets here at Templeton and we've noticed that it takes great fortitude, great courage to hang tough in a market such as this. But that will eventually be rewarded. Again if you're an investor in your 20s or your 30s or your 40s or even your early 50s, you should view this as an opportunity. You can start to construct a portfolio which by the time you retire is going to be worth a substantial sum in our view.
GHARIB: All right, interesting thoughts, thank you so much, Gary.
MOTYL: Thank you Susie.
GHARIB: My guest tonight, Gary Motyl, chief investment officer of the Templeton Global Equity Fund.
