Facebook stock sports high valuations, but Gerber Kawasaki's Ross Gerber says election year advertising will further drive shares higher.
Stocks bouncing back Wednesday with his rallies sort of tepid. Joining us from Los Angeles for closer look at the markets Ross Gerber he see only Gerber Cossack you while an investment management nor us. We had a pretty sharp rally since effect February 11. Can this rally last without that big 20% correction at some of MarketWatch user calling. The market coming back is directly related oil. This is all about how bad the decline in oil. Hurts the economy. And causing corporate bankruptcies and other potential risk so now that we've seen what we've closer back to forty it takes a lot of pressure off of not only that oil companies in the area but the banks in the people who lent money to these companies there's a lot less risk that we see in the market bounced back to I think a more reasonable level right now. Because it seems like a horrible scenarios were off the table right now but we still not out of the it all Ross you feel that's a good time to slowly and I think slowly. And capital what signs are you looking for indicate that it's time to release happened think big my positions. But you it's a little assessor. It's just about oil. This is the big strain on the global economy. From the oil producing nations and on parts of our economy. And so if we can get loyal to a price and I think it's about 45 bucks that it it's that perfect equilibrium where people can still make money not go out of business but prices don't affect the economy in negative way I think that's going to be that sign that things are going to be okay and and and once we get through the election. We'll have a lot more certainty. I think that the real thing that we watch every game right now the price of oil. Roth I you're buying text boxes that FaceBook in that lets look at all of the FaceBook and has trailing price of 82 times earnings. And the stock is just 10% shy of the all time peak are buying these levels. Yes you know unfortunately. Meaning good stocks to have really high valuations and that causes of risk. You don't have to taken lower valuations stocks so as much as we like FaceBook of course there's risk. Involve it buying these high multiples but this is the best in breed company. Doing phenomenally well and we expect in the half of very good year this year so it works you know obviously conservatively adding to positions in that area and the same holds true with Netflix. Wonderful company executing on all fronts but you're paying a full valuation report but with these investments worth thinking long term and we also understand the risks. Because of the higher and what do you see driving FaceBook for. Well especially Aspen in the political campaign will be incredibly beneficial for FaceBook over the next six months. We there's. No question that we're gonna see a billion dollars spent on ads and it's Smart candidates spend that money on social FaceBook and Google being the main winners here but also in mr. Graham is monetizing very well and populist is beginning to sell their. And I think Ross two going back Netflix aren't the barriers to entry low in the streaming. Not when it comes to original contact and what Netflix has done is they've. Basically doubled down on regional content this year they've got so many good shows already coming out now and coming up throughout the year and moving forward as well and so Netflix realized that they were gonna become a commodity I just buying you know shows from other producers and now it's become the biggest producer Hollywood so. Netflix is in. Good shape moving forward because the hunt at making it's such high quality really. Think they're doing a great job I don't get did you get your thoughts from a Hollywood and I think flop Ross. My pleasure thank you for our gratitude ros Gerber or Gerber Kawasaki I'm Fred Katayama this is.