Gerber Kawasaki CEO Ross Gerber, a Tesla bull who's otherwise very cautious on U.S. stocks, tells Reuters' Fred Katayama why he's investing heavily in Chinese battery stocks.
FRED KATAYAMA: Stocks on Wall Street surrendering their morning gains at a choppy session Wednesday. Let's get a market outlook from Ross Gerber of Gerber Kawasaki in Santa Monica, California. Welcome back, Ross.
ROSS GERBER: Thank you.
FRED KATAYAMA: Well, Wall Street trading lower now for a second straight day, what do you see is behind this downdraft?
ROSS GERBER: Well, you don't think there's enough uncertainty out there, right? We've got, you know, the election. We have extremely high valuations. We've got, you know, a stimulus bill that's kicked in and out of Congress every week. And really, the coronavirus is coming back, and this, you know, irresponsible approach the administration has taken and really leading by such a poor example is really causing the virus to surge and is ultimately going to hurt the economy even worse. And so it's really a frustrating time right now, because I think we're almost working against ourselves, and therefore, I think the economy has kind of plateaued here, and I don't see how we can get any more growth until we solve coronavirus.
FRED KATAYAMA: Well, Ross, when I talked to you last, it was the beginning of August, and the Biden/Harris ticket had just been announced. At that time, you were a market bear, but you were optimistic over Biden/Harris saying this could turn the markets higher. In October all of a sudden, the market seemed to really warmed to a Biden/Harris possibility or even a Democratic sweep. Where are you on the markets right now?
ROSS GERBER: Well, yes, I mean, that's what we're seeing now is the markets now anticipating, you know, a Biden landslide, and with that, a huge stimulus bill, and that's why the markets are up, because that's kind of what we need to do. And if we do one more solid stimulus bill, as much as I hate it, the debt and the deficits, it's what we need to keep people, you know, going right now and get through ultimately solving coronavirus. So you know, so that's the optimism. I think the second part is having stable leadership. I think Trump's display at the debates really proves that honestly, I don't even think he's all there right now because of all the medications he's on and everything, and we need stable leadership in this country, and I think people have realized how important that is.
FRED KATAYAMA: So are you what, now cautious?
ROSS GERBER: No, I'm bear.
FRED KATAYAMA: So you're still bearish?
ROSS GERBER: I'm a bear.
FRED KATAYAMA: We had that correction in the market.
ROSS GERBER: Yeah, we had the correction as I expected. Now, the market's come back on hope. But the problem is I think when if Biden wins, then we get the sell the news thing, because the reality of solving coronavirus is going to be a real challenge for this nation, and we have not started the fight. So, you know, I know how to solve coronavirus, the doctors know how to solve coronavirus, and its rapid testing, and its very strict compliance to these kind of rules that we need to get our society back in order. But rapid testing of our entire population needs to be done just like China. China is back, so I see those solutions coming in in Q1, and so I'll be more of a bull, I think, after the inauguration.
FRED KATAYAMA: All right, you mentioned China. Let's talk about that in a second. But since you're in Los Angeles, you know entertainment stocks. So AMC, the shares are plunging today, almost losing a fifth of its value atop the 13% that it lost yesterday. The CEO saying that the company may need to raise more capital through equity. What are your thoughts on AMC stock?
ROSS GERBER: Well, it's the sad reality that we're facing, which is what I now call in the end is end of bricks and mortar. So with coronavirus, the digital transformation has been sped up by most people say a decade. And in that, we have big winners and big losers-- big winners being the Zooms of the world, and the big losers being bricks and mortar things like theaters or live music venues or restaurants, which I like to say is really the entertainment industry. So the entertainment part of our life in the bricks and mortar sense isn't coming back anytime soon.
And with that, there's going to be a huge amount of pain in that sector. So we're seeing the moves with Disney now to accept reality, become a digital business. And when the theme parks are open again and people are back in mass, Disney will be there, but that's going to be at sometime next year or so. So this is going to be a real tough time for a lot of businesses, unfortunately, and it's a wonderful time for other businesses.
FRED KATAYAMA: Hmm, like perhaps Netflix competing against AMC.
ROSS GERBER: Netflix is up again today as well, right?
FRED KATAYAMA: And lastly, since you mentioned China, I always follow your tweets every day, and you seem to be bullish on China. Why, and how should investors play? You're saying diversify into it.
ROSS GERBER: I'm not bullish on China as a whole. I'm bullish on China's tech sector, especially in gaming and EVs. So what we're doing right now is we're investing heavily into the Chinese technology sectors and gaming, but especially around battery technology, and this is also in Korea. So we're moving money into Korean and Chinese stocks that are focused around EV, battery technology, lithium, you know, anything to do with the rise of EVs, which China is now leading. So we are very bullish on the tech sector of China, and China's, you know, pretty much healed from coronavirus now, and the economy is starting to grow.
FRED KATAYAMA: You've been bullish on Tesla as well.
ROSS GERBER: Yeah.
FRED KATAYAMA: Well, thanks a lot, Ross for sharing your thoughts with us today. Appreciate it.
ROSS GERBER: Thank you.
FRED KATAYAMA: Our Thanks to Ross Gerber of Gerber Kawasaki. I'm Fred Katayama in New York. This is Reuters.