David Tepper Talks Bonds, Buffett, Gross, Charity, More [VIDEO, TRANSCRIPT]VW Staff
from over. Come on, Stephanie. We’re blessed. We have tens of thousands of donors, including 162 who give more than $100,000 a year to Robin Hood. We want more people to join our community of caring. Each year we raise money and we give 100 percent of it out to save lives here in New York City. None of it goes to pay for our salaries, our overhead, our administrative costs because David Tepper and the other members of our board cover all of our fundraising and administrative expenses. It’s a good investment.
SCHATZKER: David, is there a constituency in the financial community that isn’t playing enough of a role in Robin Hood yet that you would like to see there?
SALTZMAN: We’d like to see every single person watching Bloomberg, every single person in the financial community help us save lives. We need to do it.
RUHLE: David –
SCHATZKER: You’re smiling.
TEPPER: David’s very nice.
RUHLE: Then what do you think of the Giving Pledge?
TEPPER: What do I think of it? I think it’s very nice for those people who want to do it.
SALTZMAN: Bill Gates came to our office yesterday.
SALTZMAN: That man is brilliant. That man –
SCHATZKER: A lot of people would agree with you.
SALTZMAN: That man is wiping diseases off the face of the Earth. That man will go down in history along with his wife and Warren Buffett as having saved more lives than anybody in history.
SCHATZKER: I’m going to be seeing him in Boston tomorrow. You say the Giving Pledge, great for people who want to do it. Does that suggest that —
David Tepper: That means that – listen. I – I’ve been giving money away for a long time publicly, okay? Before there was a Giving Pledge, I named a university, okay? So listen, I can talk about the Giving Pledge. I could do the Giving Pledge. Do I really need to do the Giving Pledge? I was there before the Giving Pledge. I’ll be there after the Giving Pledge. Give money away every year. It’s not –
SCHATZKER: Is it a good idea to persuade people who are less philanthropic than you?
David Tepper: Yes. That’s why I – that’s why I said that. That’s what I basically meant. That was kind of Pittsburgh-ease, which is a little bit different.
RUHLE: All right. Another big name besides you in the market, Bill Gross. Does the Bill Gross exit – could we see a broader tail risk effect for the markets here? What has it done?
David Tepper: Bill Gross – there was a guy that was up the street from me when I lived in Pittsburgh. His name was Neal Gross. We used to play basketball. I think it’s – you’re talking about his dad was Bill Gross, or that was not – a different Bill Gross?
RUHLE: Stop being funny, David. What does this Bill Gross exit mean for the market?
David Tepper: Nothing. Who cares?
David Tepper: You saw it the other day. The – the little bit that was done with the corporate markets. He’s there. He’s here. It’s not going to mean that much. Really what means things are fundamentals. So you talk about a day, two days, three days. But long term, it doesn’t mean anything. The market is the market. It’s bigger than anybody.
SCHATZKER: So the high-yield market in the mid-point of fair value. The bond bubble if Draghi undertakes QE is going to blow up. Equities okay with next year’s earnings.
TEPPER: What’s amazing about bonds right now is that you really have negative rates in a lot of Europe in the short end of the curve.
SCHATZKER: Germany sold for negative yield.
David Tepper: Ireland. Ireland. You know that country? That’s where the Irish people come from. Ireland. So it’s negative there too. That was a place that was almost 10 percent – 10, 15 percent two-year yields. That was one of the countries people were worried about. There’s negative yields in Ireland. So a lot of these things have been driven down. That’s – it’s very tricky. One – one big employment – you’re – you will go down to – these yields here will come down in the US, okay?
However, you’re so close to go the other way. That’s what makes this a very tricky market. So if you have – listen, if you have big employment numbers that take you into the 5s, it’s going to start worrying the Fed about labor push (ph) inflation at some point. And if you do get inflation in Europe to start – stop going down, inflation to stop going down or deflation looks like it’ll start taking over, at the same time you’ll have the market’s yields turn up here. So it’s tricky. And until that happens, you could have pressure on yields down. So the question is is there enough – are you getting paid enough for the risks in any kind of place in the yields? Because there’s a lot of chances to lose money.
SCHATZKER: Where – where – where are you getting paid enough?
David Tepper: Listen, I think – that’s a great segue. Where are you getting paid enough? You’re really getting paid enough – if you look at the curves of how things are trading in the world, you go from bonds which are probably too rich on any kind of economic growth to the United States which looks kind of cheap based on – on a 4 percent yield it looks kind of right, but maybe cheap on where yields are trading. Then you go down to Japan and Europe which are pretty cheap on the yields they’re trading. You’re trading 12 multiples. I don’t want to show you again. I don’t have to stand up, do I? Don’t make me get up again.
David Tepper: Okay. We won’t do that. Anyway, they’re trading at those low multiples again. So you have – if you look at euro stocks – yeah, one second. If you look at a euro stock 50 right now or something, you have a 3.6 percent dividend yield, okay? You have higher dividend yields in – in – in – in all through Europe and Japan than the bond market. So at some point that has to turn. When does it turn? When it looks like they finally start doing something.
RUHLE: But what does all of this say about corporate earnings, either European corporate earnings, US corporate earnings? There’s been big moves when you look at dollar versus euro, dollar versus yen.
David Tepper: There’s been big moves so far?
RUHLE: I’m saying when you look at US corporate earnings –
David Tepper: See, if you talk to my good friend Stan Druckenmiller, he would say these moves have been nothing thus far. They really haven’t been. If you look where the euro’s at 126, it’s been in the low 130s, 135 for the last few years. These aren’t big moves. These are moves. Big moves is down at the 110 when it really affects it. And maybe it will go to 110. Stan is really good on this stuff, and I can tell you what Stan would say but you’ll have to pay $7,500 for a ticket.
RUHLE: There you go. You have to pay $7,500 for a ticket at the Robin Hood investor conference. We have to take a break, but when we come back, these two men – we’re staying here. We’re not taking a break. Sorry.
SALTZMAN: Why would you want to stop this?
SCHATZKER: Why would we want to take a break? Excellent question.
RUHLE: All right. That’s what Stan is going to say at the Robin Hood investor conference. What else are you going to talk about there? How about equities?
David Tepper: Listen – listen, Stephanie. I am totally not going to lift my skirt up to my head.
RUHLE: I don’t ever want you –
RUHLE: – we didn’t know you wore a skirt, and B, we definitely don’t want you lifting it here.
David Tepper: You haven’t seen me on Sundays. Sundays come over. You’ll see me in a skirt. I can be Scottish that guy.
RUHLE: Scottish. All right. Well tell us today. What do you think about the US equity market?
David Tepper: Well I kind of told you. Listen, it’s – it’s interesting on a multiple basis and – but you have to have certain things happening. You’ve got to have Europe stop – stop the nonsense, so to speak, Draghi stop the nonsense. So that’s kind of it.
SCHATZKER: Hey, I have a question for you. It is not related to investing.
David Tepper: Okay, good.
SCHATZKER: Roger Goodell. You’re a part owner of the Steelers. What do you say?
David Tepper: I – I actually like my job better than his right now, I have to tell you. That’s what I say about that. Look, he has a tough job. I don’t know. I don’t have enough information of what really happened.
SCHATZKER: Based on what you know, should he remain commissioner?
David Tepper: Listen, based on what I know, it’s – it’s a little bit disappointing. I think you have to say that. And I think personally if I was Roger Goodell I’d be speaking about donations. I’d be making donations out of my own money for some of the causes that we’re talking about – what we would be talking about as far as abusing –
SCHATZKER: But does that make the problem go away?
David Tepper: Doesn’t make the – it doesn’t make the problem go away. The problem is not his to make go away. You asked me about Roger Goodell and what do I think he should be doing, okay? He can’t make the problem go away, nor can any one person make this problem go away. This is –
SCHATZKER: Well there are two – there’s two problems. There’s a domestic violence problem and then there’s what did Roger Goodell know and when and what did he – and was he honest with the public.
David Tepper: So – but I’m saying for his – for himself, he should be more sensitive and potentially be making some donations in – in this way. That’s one thing he should be doing and it hasn’t been done yet. So you asked me what about – what do I think about Roger Goodell. That’s what I think. I think he should be reaching into his pocket and just doing that, like any player in the NFL would be doing if they committed something. That’s – that makes sense to me, okay?
Beyond that, listen, obviously the problem of domestic violence is not a problem only to the NFL. This is a problem across not only the United States but across the world, unfortunately. So he’s not – he can’t do anything about that. As far as what’s going on in the NFL, listen, it’s a question – this is a very difficult question because I don’t know what was said when and how, and the person that was really hurt in this thing is – and I – is Ray Rice’s wife, okay? Because he said she was in there and he was doing things for her as a – and I don’t know enough to know what he knew and how he didn’t know. So for me to say anything would be ridiculous, okay? But to – but on the other hand, what I did say is easy to say. And that should have been done I think.
RUHLE: All right. You two – David, I want to bring you back into this conversation. The two Davids work in different worlds, but you have a common goal. We’re going to play a round of word association. We’re going to give you some words. You tell us what comes to mind. One percent.
SALTZMAN: What a wonderfully generous group of people.
RUHLE: One percent.
David Tepper: I hope I’m doing better in performance than that.
RUHLE: Chris Christie?
David Tepper: Lap-band.
RUHLE: Excuse me?
David Tepper: Lap-band. He uses a Lap-band. You know we did this company? We actually own 38 percent of this company called —
RUHLE: I thought he said lap dance.
David Tepper: Lap-band. It’s a surgery –
David Tepper: No, lap dance. I never would do a lap dance with Governor Christie. But no, Lap-band is the surgery he had. We actually used to own 30 percent of this company called Inamed and we actually funded the Lap-brand. We actually brought that product to market. So that’s why I’m – that’s why I’m thinking Lap-band.
SCHATZKER: Lap dance with Chris Christie.
RUHLE: Warren Buffett?
RUHLE: Warren Buffett?
David Tepper: Warren Buffett? He’s an interesting guy.
RUHLE: That’s all you’re giving us?
David Tepper: Yeah. He’s an interesting guy. I’ll say that.
SCHATZKER: Let’s get serious here for a moment. Ebola.
David Tepper: Obama. Are we still playing the game or not?
SCHATZKER: Not a game.
David Tepper: Listen, it’s – I’m surprised you mentioned Ebola. To me – to me it’s – it’s – I don’t – I think the United States, if any country can contain the risk, the United States can contain the risk. And you could – there’s a lot of questions you can ask. Should we have brought cases here? How did it happen? Again, I don’t have enough information to know what happened down in Dallas.
SALTZMAN: Tom Frieden, who’s the director of the CDC, was the health commissioner here in New York and we got to work closely with him. He’s absolutely brilliant. If there’s one person I would trust –
SCHATZKER: You have full, utter confidence in him?
SALTZMAN: I do.
RUHLE: All right. Last one. Because Robin Hood loves rock stars and you love Jersey, Bon Jovi or Bruce Springsteen?
David Tepper: Do I have to make a choice?
SCHATZKER: You do.
David Tepper: Bob Seger.
SALTZMAN: They performed together at a benefit concert for Robin Hood and that was the best.
RUHLE: Because only Robin Hood – Robin Hood does the best events there are.
David Tepper: I’m from Pittsburgh.
RUHLE: I do know you’re from Pittsburgh.
David Tepper: And Bob Seger’s a Midwest guy.
RUHLE: I do know you’re – is Pittsburgh considered the Midwest?
David Tepper: It’s a gateway. We gave St. Louis the arch.
RUHLE: I should – when I think Pittsburgh, the gateway. Both of you, David Saltzman, David Tepper, thank you so much.