Interview of Bill Roller with Rich Burk on the Jeff Kropf Show, March 7, 2012
7:35 to 7:45 am.
Rich was substituting for Jeff Kropf.
Click to listen->KUIK 1360 AM, March 7, 2012, On-Air Interview
[Music playing]
Rich Burk: Well, you know, I don’t feel bad about that, because the subject of the interview is none other than Bill Roller of BR Capital, and they’re located at 4400 NE 77th Avenue in Vancouver, and BR Capital – or what is it, brcapitalinc.com is the website, and they’re a registered investment advisory firm. And good morning, Bill.
Bill Roller: Morning, Rich. Rock on.
Rich Burk: All right, yeah, you bet. Gosh, you know, sometimes I just wish it was the ‘70s and this was a rock and roll station, but I’d get bored with that over time. I like talk, so…
Bill Roller: So do I, and we appreciate you guys doing it.
Rich Burk: Well, hey, what happened yesterday? There was a big drop in the market. What happened?
Bill Roller: Well, it was definitely kind of a down day. There were concerns about Greece and some – kind of some selloff. They dropped about 203 points.
Rich Burk: Yeah, yeah. Well, I didn’t follow the news onGreece. It was Super Tuesday. What are they doing now?
Bill Roller: Well, they’re kind of in a holding pattern right now for – they’re doing a debt swap. Basically, they’re – people that own their debt or more institutions that own their debt are gonna be forced to take a haircut on it, so there is just – everybody’s kinda waiting on that thing to conclude, but kind of the question everybody’s asking is, okay, is it – is Greece gonna default today or in a month or in six months?
Rich Burk: You know, they keep throwing money at Greece, and it keeps not getting better, and there’s another crisis, another crisis. It seems like this is just a black hole. Shouldn’t they just go back on the drachma and just get out of the eurozone?
Bill Roller: Well, it probably would, but remember, inEurope you’ve got the story of the dutch boy holding his finger in the dike. And they’re afraid that if one of the pigs goes, then the rest are gonna go as well, and the pigs being Portugal, Italy ,Greece, Spain, Ireland.
Rich Burk: Yeah, sure. And, well, is the euro doomed? Are we gonna see the end of the euro?
Bill Roller: Probably not right away, but, yeah, I think so, and certainly we’re benefiting from it as the dollar sort of reasserts itself as a reserve currency, and at the same time, the dollar’s got its problems, so gold is coming to the fore, also, as a form of reserve currency as well.
Rich Burk: You know, I never bought the euro. I never bought in to the euro or even the European Union. These are countries that are culturally, temperamentally, financially, historically, they’re all very different. They’re – and I always thought that when push came to shove and a real tough time came that they were all gonna fend for themselves and they wouldn’t be able to hold it together. It sounds like that’s what’s happening now.
Bill Roller: Well, the best historical parallel I see, certainly from American military history is the south, the confederacy during the Civil War. They were a very loose confederation. Everybody still had their separately charted state banks. They weren’t really able to integrate, because that was contrary to their – kind of to their reason for becoming the Confederate States of America. So, really, the euro –Europe is the Confederate south without the military ability.
Rich Burk: Yeah, well, it’s gonna be a wild ride, but in the meantime, that’s gonna be bad for theUnited States, ‘cause while they’re going through all this upheaval, their economies are gonna be down, so we’re not gonna have the export markets.
Bill Roller: Well, that’s certainly correct, and every time we see a hiccup in the news about Greece or any one of the others, certainly the U.S. market takes the hit, but really, the primary beneficiary of the euro’s demise long term is gonna be Germany. Another thing from military history, I mean, we’re seeing sort of the endgame of the process that started with World War I and World War II. Germany wasn’t able to conquerEurope long term that way, but they’re going to have to do it economically and politically now and managerially.
Rich Burk: Well, I would imagine that right now these other countries are like a millstone around their neck. I think they’d be happy to remove that millstone and be able to go on unencumbered.
Bill Roller: Well, as I said before,Germany tends to feel put upon by its neighbors, and when they feel put upon, they tend to take it on the road.
Rich Burk: Yeah, yeah. Well, I hope they don’t do it the way they did it the last time, but it doesn’t sound like they’re going to.
Bill Roller: Probably not militarily in this case, but certainly there’s a revolution going on in terms of German productivity, which they’re trying to export. But, in some ways, it’s character of companies, so characters of peoples, and, unfortunately, how hard are the Greek people willing to work, particularly when their safety net is really going away?
Rich Burk: Well, they hate it. They don’t want to. I mean, they don’t see that this is a debt they need to repay. They don’t see any obligation to deal with it. They’re resentful for the hole they dug themselves. I don’t have a lot of sympathy for their country. I mean, the people that don’t understand the macroeconomics I have sympathy for, but they dug this hole for themselves.
Bill Roller: Well, certainly that’s correct, but you could argue that it was the Greek political class, not necessarily the Greek people, that got them into this mess, and that’s really one of the trends you see is that you have sort of – remember, the one percent in Europe is the – sort of the bureaucratic governing class as – it’s not the entrepreneurial class, and it’s not, certainly, the average worker. It’s these kind of people – they don’t get MBAs in Europe. They go to the government schools like in France, and the best job isn’t becoming the next Bill Gates, unfortunately. It’s becoming the secretary or minister of huge amounts of regulation.
Rich Burk: well, that’s where they get their advanced degrees in surrender.
Bill Roller: Correct.
Rich Burk: Yes, okay.
Bill Roller: And, yes, cheese-eating surrender, we would say.
Rich Burk: So, what’s going on at BR Capital?
Bill Roller: Well, certainly enjoying an up day today after the big drop yesterday.
Rich Burk: Haven’t seen the market. Where is it at now?
Bill Roller: The Dow’s up about 20 right now, and the S&P is up about a quarter percent. NASDAQ’s up about a half, so that’s kinda nice. Of course, it’s got a little bit of ways to go to recover from yesterday’s drop, but as we know and certainly we’ve seen, that markets drop a lot faster than they go up, so…
Rich Burk: Well, if someone comes to you today and says, “I’d like 5£ of financial services, please,” what would you sell them?
Bill Roller: Well, a diversified portfolio, and, in fact, the U.S. is seeing money flowing back to the U.S. market, which is why the Dow has been doing well, but also kind of a mix of everything – I’m not real hot on Europe, but some Asia, some corporate bonds, some high yield –
Rich Burk: Yeah, the Vanuatu Exchange.
Bill Roller: I’m sorry, say that again?
Rich Burk: The Vanuatu Exchange.
Bill Roller: That’s right.
Rich Burk: Well, something else I’m really looking at here, and I’m sure many people are, is what’s going on with Iran. I think Israel’s gonna hitIran. I think thatUnited States is gonna provide support. Iran’s not just gonna sit there and take it. Gas is gonna go sky high. What are you telling your investors now about the prospect for the next six months to a year?
Bill Roller: Well, if we can kinda keep Iran under control, it’s actually pretty good. The market has been taking such a big hit, and a lot of the analysts are saying it’s gonna be a fairly strong year for the market, but, of course ,Iran is throwing huge amounts of uncertainty into that scenario. If we do hit them – or, I’m sorry, if Israel attacksIran, I think all bets are going to be off. But, I was reading an article recently that was talking about Israel’s attack on Iraq and kinda looked at it from a long-term strategic perspective, and this article said that it was actually kind of a major loss for Israel long term to do that, because really all it did was kind of set off a hornet’s nest. And maybe what we’ll – hopefully, we’ll see more of the Stuxnet virus kind of attacks onIran.
Rich Burk: Sure, sure. I know that apparently we launched a computer virus againstIran, and it caused their – a number of their centrifuges to overheat and destroy themselves. Have you heard about that one?
Bill Roller: Yeah, that’s the Stuxnet virus.
Rich Burk: Yeah, mm-hmm.
Bill Roller: Supposedly, they – they claim they’ve cleaned that all out, but I’m sure that that’s the one you hear about, there are probably ten more that you don’t.
Rich Burk: Yeah.
Bill Roller: If it’s anything like Norton Internet security, maybe that’s the one that they need.
Rich Burk: Well, I just wonder why they would put their centrifuges on the Internet to begin with.
Bill Roller: Well, from what I understand, they weren’t on the Internet. It was actually a sealed system, but what they – the way they did it is they infected the personal home computers of some of the scientists who work there, and, of course, people do work in both places, so they put it onto an infected USB drive and took it to work.
Rich Burk: Kinda reminds me of that virus that they planted on the movie Office Space. I don’t know if you saw that one.
Bill Roller: No, I didn’t.
Rich Burk: Yeah, the – some guys found out they were gonna get fired from a computer software company, and so this is before Y2K, and they planted a virus that took off fractions of cents and put it into an account that wouldn’t be traced after the Y2K software update, but only they forgot to carry the zero a couple of places, and comedy ensued.
Bill Roller: Oh, yes.
Rich Burk: So, it reminded me of something like that, but that’s – I think that’s coming. I think that people need to start planning for that. I think you’re right,Israel there – when you go to war, there are a lot of long-term costs, but they’re not just gonna sit there whileIran builds a bomb.
Bill Roller: Oh, that’s absolutely correct.
Rich Burk: And they don’t have any faith in obama to do it. I think this meeting between Obama and Netanyahu, despite what was publicly seen, I think inside Netanyahu said, “Look, we’re gonna attack. This is when it’s gonna happen,” and the Americans are providing them, I think – I bet they’re providing them with like satellite and other intelligence. I think it’s a done deal. If I’m an investor, how do I protect myself against that contingency?
Bill Roller: Well, gold is certainly gonna go up pretty strongly if that happens, and certainly anything oil related, so the whole energy complex you’ll see move up in order to replace that oil, so any U.S. oil company, the oil service companies, even natural gas will all take a big jump.
Rich Burk: Sure. And this –
Bill Roller: But, other stuff certainly might be down, so it’s important that you use stocks that you have an out point for your investments and don’t just necessarily sit around and take the pain because you don’t wanna – you don’t necessarily wanna be the last person out.
Rich Burk: Right. And not to be callous about it, but there could be political implications beyond the presidential election cycle. If there were a war in the Middle East, it would certainly bolster the arguments of those who say, “Let’s drill in theUnited States. Let’s do theAlberta pipeline, the keystone pipeline, theNew Mexico lands, develop the Brazilian oilfields – ”
Bill Roller: Or –
Rich Burk: – just to get independent of this stuff.
Bill Roller: Sure, more nuclear power, not so much of the renewable energy, no – less unicorn power, more nuclear power.
Rich Burk: So, it sounds like it might be a win-win situation to invest in oil stocks?
Bill Roller: Well, yeah. We’ve certainly been putting some money in there.
Rich Burk: Yeah. Interesting, interesting. Now, people get a hold of you, what’s the best way to do that?
Bill Roller: Well, we’re at 360-735-1900 over here inVancouver, or we’re also at 1-800-562-7096, and we’re online at brcapitalinc.com.
Rich Burk: Brcapitalinc.com, and you’ve got a website there. They can contact you through that website.
Bill Roller: That’d be great, yeah. We’re always willing to talk, no obligation.
[Music playing]
Rich Burk: Sure, brcapitalinc.com. Well, listen, Bill, this is the second time I’ve had a chance to talk to you. I really enjoy it, and thank you for coming on today.
Bill Roller: Well, thank you, Rich. I’ve enjoyed it very much.
Rich Burk: Okay, take care. Bye-bye now. That’s Bill Roller, president, BR Capital, very interesting guy. That’s brcapitalinc.com. Check them out. They seem to know what they’re doing. It’s Rich Burk filling in for Jeff Kropf –
[End of Audio]