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'We're living on borrowed time': Oxbow Advisors Managing Partner on the state of the market

Ted Oakley, Oxbow Advisors Managing Partner, joined The Final Round to discuss his outlook for the market as stimulus talks in D.C. remain uncertain.

Video Transcript

JEN ROGERS: I want to bring in Ted Oakley, Oxbow Advisors managing partner. And Ted, I want to start just big market here, and what you're seeing as we are waiting to see what happens with stimulus, we are waiting on this pandemic, we have the election. Short-term, how do you think this market is positioned right now?

TED OAKLEY: Well, you know, Jen, I think it's fully priced right now. If you look at it, we're back up actually above a little bit where we were in February. But yet if you look at the underlying fundamentals, they're worse than they were then, by quite a bit actually. So I think we're living on borrowed time to a degree. And I think everybody is trying to build something in that, hey, we need another stimulus and that'll take care of everything, but we don't really see it that way.

JEN ROGERS: So borrowed time, I mean, the stimulus will not be a shot in the arm that can keep this patient alive here at record highs?

TED OAKLEY: Well, I don't think you'll get a stimulus anytime soon, because we're too close to the election. And then after the election, you have to think about it, then you'll be within a month or so when they are doing things. So it would be hard to see that happening. But the other side of it is that they thought that the stimulus that they brought would make this a V bounce really work right. But what's happening is, it's not getting us to the finish line. It bounced, yes, but it's well below where it was before. And I think that's got people really starting to think about it right now.

JEN ROGERS: I want to ask you a little bit about the energy sector. Right now, looking at the top movers on the day, we've got this news and this report out of Bloomberg that ConocoPhillips is in talks to buy Concho Resources. That would, of course, be a big shale deal. We're starting to see some M&A pickup different places around. We had a chip, the Xilinx AMD possibilities. What do you think we're going to have in the energy sector here? Is that inevitable, given where we're seeing prices?

TED OAKLEY: Well, if you look, sort of goes back a few months ago to Chevron and Noble, and those are, they really find some really good buys that they can buy cheaply now. And if you think about it like this, it's cheaper to buy when prices are like this, it's cheaper to buy them than it is to go drill it up. And so that's what happens in the energy field. Always happens this way. When things get really, really low, they'll go buy up resources as opposed to try to find them, because the lifting cost right now is more than just buying the crude outright.

JEN ROGERS: And real quick, just before we let you go, because you don't seem super optimistic about the market overall. What are your cash positions like?

TED OAKLEY: We're, it depends on the strategy. We have four strategies, but if you look at the two stock strategies, they're both about 30% liquid. And the two income strategies are actually about 35%, 38% roughly.

JEN ROGERS: All right, well, putting your money where your mouth is then. Ted Oakley with Oxbow Advisors, managing partner there. Thanks so much for talking to us. We are heading to the closing bell in just about seven minutes. We will be back in two minutes.