As for Monday's rally, Gerber believes it was a combination of positive market reaction to signs President Trump is finally understanding the depth of the problem caused by the coronavirus pandemic, the market trying to find its equilibrium and end-of-the-quarter buying.
CONWAY G GITTENS: The stock market is up significantly on this beginning of a new week. Let's find out why with Ross Gerber. He's the president and CEO of Gerber Kawasaki.
So let's take a look back. We are 18% up from the low hit last week. My question to you, Ross, is that too much too fast? And how convinced are you that that was the bottom?
ROSS GERBER: Ha. Well, I think what we saw in March was a massive liquidation at the same time from institutions [INAUDIBLE] every asset. So seeing such a large decline so quickly, it never has happened in history.
So I think the market's kind of just finding back where that equilibrium is, or kind of where it should be with, you know, more normal trading of having both buyers and sellers in the market, not just sellers.
So I think this has been a big plus, and I think there's a lot of working out the market has to do, I guess you can say.
So I don't know if the bottom's been put in. But I feel like, if you look at valuations, I think the market is about where it should be right now for our what we're dealing with.
CONWAY G GITTENS: So I'm curious. When I heard President Trump announcing that the restrictions on movement was going to go to the end of April, I was like, oh, the stock market's going to fall on this. They're not going to like. This caught them by surprise.
But that's not what we're seeing today. We're seeing stocks up, what, 2%, 3%. What do you think is behind that rally?
ROSS GERBER: It's exactly opposite of what you would have thought, which is-- because Trump has been so late to the game understanding the severity of the crisis, being prepared for the crisis, his constant comments minimizing the crisis has only made it worse in America.
So I think he's finally come to terms with the fact that the solution that actually solves the problem is keeping people home now, versus longer later. Or having to shut down the whole country later because everybody is sick is a much worse outcome.
So I think the market's happy, because this is working. If you look at cases across the world where there's strict quarantine, we're seeing a leveling off and dropping of cases now. Even in the United States, it seems to have leveled off. We're having more testing.
So we know that social distancing and quarantines work. So by being disciplined this month, I think we can get beyond this. So the market's happy with that, with Trump doing what's necessary to beyond this and to open up the economy for real eventually soon.
CONWAY G GITTENS: So you say the market is kind of happy with the latest developments. I'm wondering, though, when you look at volume today, when you look at the volatility index, the so-called Wall Street Fear Gauge, those are still kind of sending-- I mean, what signals are those sending you in terms of the market sentiment?
ROSS GERBER: Actually, those are bullish signals. So we saw the VIX spike to a level that we hadn't seen, even since the financial crisis. It was even higher.
So you know, with volatility now coming down, that's bullish, because it basically means that the market's calming down, that level where the market is still needs to be found.
But as far as just the-- I mean, we were literally getting calls, people just scared out of their mind, wanting to sell all their stocks. You know, it's like, when you have that kind of emotion running through the markets, as shown in the VIX, it's usually a good buy signal.
And that would have been the case, because if you would have bought when the VIX was at the highest, you would be up probably 20% right now. So the VIX leveling off, trading looking more normal, assets working how they're supposed to work.
Very bullish longer term, even though we're still in a bear market.
CONWAY G GITTENS: And how much of today's rally has to do with the fact-- the calendar? I mean, tomorrow's the end of March. It's the end of the month. It's the end of the first quarter. How much of what we're seeing today has to do with that?
ROSS GERBER: I think it's about half that and about half people just wanting to put capital to work and looking for opportunities. But let's be real. It's the end of the quarter.
All of us, you know, we look at these arbitrary statements each quarter that say, here's your values. So there is a lot of incentive for investment firms also to push up values before the end of the quarter so that it just isn't the worst quarter ever for their clients.
So part of it is definitely that. But I also think there's tremendous value in the market for long-term investors. On the short term, we're still in a bear market, and we're not suggesting that the low's in and you should just go all in.
But for a disciplined investor who's willing to buy a little over time, this is a great time to get started with your buy program with a three to six-month time horizon for buying.
But when you look at a year from now, I find it hard to imagine that we'll still be sitting at home here, right, a year from now, hiding in a quarantine. So I think things will be back to business next year, and 2021 will be an amazing year. And if you're a long-term investor, then this would be a great time to start getting invested.
CONWAY G GITTENS: So before I let you go, I can see from the poster behind you, you are working from home. And--
ROSS GERBER: Yeah.
CONWAY G GITTENS: --so I'm wondering, do you have any stock trades based on the amount of people that are now working from home?
ROSS GERBER: Yeah, absolutely. You know, we've looked at a lot of these companies over the last year, let's say. And now they've just come of age.
So the three that we really like are-- number one, Zoom is just dominating in every area. It's an expensive stock. We bought a little bit of it, because we think Zoom is going to change the way schools, people entertain themselves, workplaces work. There's so much revenue growth possible on Zoom.
We like Slack. We liked them before. It's workplace efficiency with remote locations and project management tools. We think this is crucial for businesses to operate.
And then lastly, DocuSign, which is a company we like. And it's just-- we use it all the time at my firm, and it makes doing documents very, very easy-- and digital signatures and such.
So if you combine all three of those together for a workplace efficiency, I think that that is not going away. We're going to see tremendous improvements in workplace efficiency as we continue to move forward, and those three companies will be in a great position for that.
CONWAY G GITTENS: All right, great. Thank you for your time and that insight there. That is Ross Gerber. He's the president and CEO of Gerber Kawasaki. I'm Conway G Gittens, and this is Reuters.