Cautiously Optimistic About Commodities

Includes: DBC, GCC
by: Hard Assets Investor

Mike Norman, anchor, (Norman): Hi, everybody. And welcome back to I’m Mike Norman, your host as always. And here for the second part of my interview, I have Thomas Belesis, who is the CEO of John Thomas Financial right here on Wall Street. Great to have you back.

Thomas Belesis, chairman, John Thomas Financial (Belesis): Great to be here, Mike.

Norman: You talked a little bit in our last interview … we sort of concluded with the policy outlook. You touched upon that. What do you think? Has it been positive so far, the efforts by Washington, to sustain the economy? Do you think it has been negative? And what do you see going forward?

Belesis: Well, Mike, it’s a very good question. And the way I can comment is as follows: I think that Washington has been toning down its rhetoric against Wall Street. We have a president in office now that is trying very hard to fix the economy. And all I could say is as follows is: It is my view that the only way you can fix an economy is to help businesses, incentivize businesses to start hiring. Everyone knows that small businesses are the No. 1 creators of jobs.

And there’s been no incentive to hire right now. There’s no visibility, Mike, on consumer demand, health care, and on the tax hikes that this administration is talking about. So people are going to be reluctant to hire people if they don’t know what’s going to happen with these three areas which are important areas for them to decide to spend money to hire.

Norman: Right. Now you’re talking about the mainstream America, small businesses, people who will ultimately make a decision in the vast amount of hiring. Let me ask you something as a Wall Street guy. And, by the way, I want to mention, you are in the upcoming new movie, the sequel to “Wall Street.” You have a pretty good part in there, right?

Belesis: Yes, I do.

Norman: Which is fantastic. You’re going to have to go see this guy, believe me. But you’re a Wall Street guy. What is your attitude about … a lot has been said about all the money that the big institutions received. Do you think that was a good thing or do you think that was a bad thing?

Belesis: There was definite need for stimulus. Because we were on the verge of a collapse that was unprecedented. So there was definitely a need to relieve people of that. But, again, it all comes down to this: wealth creation and job creation, not the opposite. And, again, Wall Street has always been a great engine for capitalism. I mean, let’s call it how it is. People forget all the innovation, Mike, that took place on Wall Street over the last two decades: the proliferation of the cell phone, the birth of the Internet, personal computers in every household across the world. I mean, you had a few banks – again, to go back to what had happened – that put together these crazy products. Wall Street was never …

Norman: Do you think they should have let those guys fail? And somebody like you, your firm, wouldn’t it have benefited, because it would have been taking out some big competition. And the investors are still there. They’re going to have to go someplace. Wouldn’t it have been better if those guys did make those bad moves – and you’re talking about free market capitalism – isn’t it right to let them go down?

Belesis: You know what, what they did was absolutely wrong. I mean, they let Bear Stearns go under, Lehman go under. To have let Goldman Sachs or any of these other big financial institutions go down, it would just have caused chaos. They could not have that happen. You had these two go out and people were just panicking. Hundreds of billions of dollars were being evaporated.

Norman: Right.

Belesis: And people have worked so hard for that money. So they could not let that happen. Would it have benefited us? Has it benefited us? It has, because now John Thomas Financial is where it is because of what’s happened in terms of a downfall. We have grown in this time while other people have not. But, again, at the end of the day, no one wants to see anyone get hurt. No one wants to see … I don’t want to see anyone go out of business.

Norman: And you’re actually working ... you have a Web site or an organization, What I have to say, is before … And he’s bringing it back. I mean, he’s bringing it back to where it was in the 1980s. Because I went up there, and everyone’s decked out like you in three-piece suits and ties. You just don’t see that. I happen to like it; I have a whole closet full of suits. That’s great. So anyway, you’re working to bring that business back.

Belesis: Yeah. I had set up an organization called And I thought about it when the administration was just repeatedly attacking Wall Street: “Wall Street Fat Cat Bankers,” “Wall Street is the Devil.” We’re looking to bring the pride and confidence back to Wall Street. We need to help Wall Street get the economy back on track. Because that’s what, Mike, is on everyone’s mind.

So it was my feeling to start an organization like this, and we’ve been having so many people supporting the organization. Because it gets to a point where enough’s enough. We know there’s been problems. These banks that put these products together were our fault. They’ve gotten penalized. But now let’s put that in the past and let’s focus on the future, on moving forward in providing solutions for the people to get back to work.

Norman: Right. Now I just want to ask you, we’ve got just about a minute to go. But we like to talk about hard assets here and commodities. That’s what we do at this site. I know your firm is very diversified in the sort of services and businesses and investments that you do. What is your outlook on, let’s say, a golden commodity? Are you telling your investors to have some of these things in their portfolio?

Belesis: Our research department has been very cautiously optimistic on commodities. I mean, you can see the commodities have been hitting highs; oil is back above $82-plus per barrel. And it is my belief that as the economy strengthens, this is a good area that people should look at. Because it’s been evident out there that it is progressing forward.

Norman: Right. And you are optimistic.

Belesis: We are.

Norman: And if he’s right and the economy does rebound – and certainly things are pointing in that direction – then hard assets, that’s at least a place to have some of your money. Well, I want to thank you.

Belesis: Thank you, Mike.

Norman: Thomas Belesis, CEO of John Thomas Financial. This is Mike Norman. That’s it for now. But I'll be back next time. So see you; take care. Bye-bye.

Click Here to see Part I of the Hard Assets Investor interview with Thomas Belesis.