Rob Arnott: Recession ahead, but worst of bear market is behind us

Rob Arnott, chairman and chief executive officer at Research Affiliates, says that the Federal Reserve has made 'a series of mistakes' that he expects to continue with a pivot away from rate hikes that occurs too late to stop a recession. Still, Arnott believes that slowdown is already priced into the market, meaning that the worst of the bear market -- except for any last capitulation meltdown -- is behind us. Still, Arnott is not ready to invest much in domestic equities now, noting that he'd favor international and emerging markets stocks because they're better values and those markets seem to have already passed the 'peak fear' point that makes them more attractive than a U.S. market that's not quite there yet. Arnott also notes that value stocks are 'in their cheapest quintile in history,' making them a place for investors to turn once the market reaches the full-on buying stage again later this year. Also on the show, in the Market Call, Mark Travis, manager of the Intrepid Capital Funds, discusses the benefits of investing in companies that make beer, shoes and underwear.