Al Michaels is one of the best-known sports announcers in America, but he is also an avid and active investor. The day after he and John Madden called Super Bowl XLIII on NBC, Maria Bartiromo talked with Michaels.
What's your strategy for the recession?
I've always been a contrarian. When people oversell a stock—tell you you have to get in and it's already had, like, 1,000% appreciation—I'm the first guy to short it. And I have done that in years past with stocks like Krispy Kreme (KKD) and Crocs (CROX) shoes. Now it's a different time. There's value out there on the long side. Instead of looking at individual stocks, I'm trying to find industries that will begin to turn around, and I buy the ETFs [exchange-traded funds] in those industries. If I really feel strongly, I try to buy the leveraged ETFs, which are exchange-traded funds on steroids.
Which industries, specifically?
It wasn't that long ago that oil was trading at about $150 a barrel, and you had all of these analysts and experts—and I'm using the term experts in quotation marks—telling you: "Oh, my God, oil is going to go to $200." Now, oil has taken such a humongous hit that I don't think there's a lot of downside there.
Before the economy soured, what did your portfolio look like?
Before it began to sour, I was a little conservative. I had made some money in shorting, and I kind of ratcheted back a bit. I thought when the Dow got all the way up to 14,000, that was a little pricey. So I became more conservative. I have some of my staples that I've had through the years—IBM (IBM), GE (GE), Microsoft (MSFT). IBM has done fairly well through the storm, GE has not done well. Microsoft over a 10- or 12-year period has been a total bust. I've kind of given up on Microsoft. The biggest difference to me in investing now opposed to a number of years ago is that I don't know what a blue chip is anymore. I've told my kids through the years, try to construct a balanced portfolio. And now, I've got younger people asking: "What kind of blue-chip stocks can I get into?'" And I say: "When you find a blue chip, call me collect."
Do you know anybody who got burned in the Madoff scandal?
I know a number of people who did. To me, it's tragic, it's insidious. It just makes you wonder who in the world can you trust. The one bit of advice I've given my kids is: Don't give money to anybody who is just going to send you a statement. You want to see what the trades are.
What's your riskiest investment right now?
I don't have significant money at risk in anything. I dabble a little bit and do some day trading. You know, living on the West Coast, you get up and watch Squawk Box, and then the opening bell rings at 6:30 in the morning. It's like shooting craps in your pajamas. But at this particular point, I've worked too hard to take a lot of risk. It's good to take some risk, but you have to understand where you are in life.
Give me your take on the market. Buying opportunity?
It's a day-to-day deal. As we speak, the market is under 8000. To me, the upside is far greater than the downside at this point. Again, being the contrarian that I am, when everybody is saying, "Oh, my God, gloom and doom, look out below," I'm saying, "'Look out below' already happened. Where were you a year and a half ago?"
Say you're an investor who has fallen way behind, as so many of us have. What's the Hail Mary pass?
I don't think there is one. You can't chase money. You kind of lick your wounds. If you really want a Hail Mary pass, go down to your grocery store and buy a lottery ticket.