1 00:00:00,360 --> 00:00:03,000 Speaker 1: Heller duper see Allen Sam Dicky from Fisher Funds is 2 00:00:03,000 --> 00:00:04,120 Speaker 1: with us O Sam. 3 00:00:04,519 --> 00:00:05,200 Speaker 2: Good evening here the. 4 00:00:05,400 --> 00:00:08,039 Speaker 1: Righting now, Oh thank you so much. Geez, I've come 5 00:00:08,080 --> 00:00:10,280 Speaker 1: back straight into the old trade war and what's going 6 00:00:10,280 --> 00:00:12,480 Speaker 1: on with the tariff headlines? How long is this going 7 00:00:12,560 --> 00:00:13,040 Speaker 1: to go on for? 8 00:00:13,160 --> 00:00:13,640 Speaker 3: Do you think? 9 00:00:15,080 --> 00:00:18,720 Speaker 2: Well? There are sort of really three types of beer markets. 10 00:00:18,760 --> 00:00:21,560 Speaker 3: And remember a beer market is one where the market 11 00:00:21,560 --> 00:00:22,720 Speaker 3: falls by twenty percent of more. 12 00:00:22,760 --> 00:00:24,959 Speaker 2: And we were there last Tuesday. So three types. 13 00:00:25,000 --> 00:00:27,920 Speaker 3: An event driven beer market, a cyclical beer market, and 14 00:00:27,920 --> 00:00:29,120 Speaker 3: a structural beer market. 15 00:00:29,440 --> 00:00:31,440 Speaker 2: So structural is where there. 16 00:00:31,320 --> 00:00:35,000 Speaker 3: Are structural imbalances or financial bubbles like the nineteen thirties 17 00:00:35,000 --> 00:00:37,920 Speaker 3: Great depression. Cyclical beer market is a function of the 18 00:00:37,960 --> 00:00:42,199 Speaker 3: economic cycle turning down like the nineteen ninety recession. And 19 00:00:42,280 --> 00:00:44,680 Speaker 3: an event driven beer market it's the most benign of all. 20 00:00:45,080 --> 00:00:48,320 Speaker 3: The market falls because of a specific event like COVID. 21 00:00:49,080 --> 00:00:51,440 Speaker 3: And to be clear, this current situation is event driven, 22 00:00:51,479 --> 00:00:53,800 Speaker 3: which is the most benign, and the event was the 23 00:00:53,880 --> 00:00:57,360 Speaker 3: Liberation Day tariffs. Now that's not to say that everything 24 00:00:57,400 --> 00:01:00,000 Speaker 3: that comes out of Trump's mouth as a virus like COVID. 25 00:01:00,080 --> 00:01:03,080 Speaker 3: But Goldman sacks that an exercise looking back almost two 26 00:01:03,200 --> 00:01:07,080 Speaker 3: hundred years, and event driven beer markets last only six 27 00:01:07,160 --> 00:01:07,959 Speaker 3: to eight months. 28 00:01:09,200 --> 00:01:11,720 Speaker 1: Is there a possibility that an event driven beer market 29 00:01:12,040 --> 00:01:13,520 Speaker 1: becomes a structural beer market. 30 00:01:15,120 --> 00:01:19,080 Speaker 3: Well, there's a possibility it can become a cyclical beer market. 31 00:01:19,240 --> 00:01:22,280 Speaker 3: So you think about you know, if you're sitting in 32 00:01:22,319 --> 00:01:27,560 Speaker 3: a boardroom in Hanoi or Mumbai, or Manchester or Milwaukee, 33 00:01:27,720 --> 00:01:29,840 Speaker 3: and you've been asked to sign off on a billion 34 00:01:29,920 --> 00:01:35,039 Speaker 3: dollar CAPEX project, for example, you'd probably sit on your hands, right, 35 00:01:35,080 --> 00:01:37,560 Speaker 3: And if consumers in businesses sit on their hands for 36 00:01:37,600 --> 00:01:39,800 Speaker 3: too long, we slip into recession and the beer market 37 00:01:39,800 --> 00:01:42,600 Speaker 3: could last for longer. And a cyclical beer market can 38 00:01:42,720 --> 00:01:45,399 Speaker 3: last obviously longer than six to eight months. 39 00:01:45,480 --> 00:01:47,640 Speaker 1: Yeah, and then obviously the worst case scenarios, it then 40 00:01:47,640 --> 00:01:50,560 Speaker 1: becomes a structural one. And so, but the best case scenario, 41 00:01:50,760 --> 00:01:53,000 Speaker 1: what you're telling us is that we're talking about a 42 00:01:53,000 --> 00:01:53,880 Speaker 1: matter of months here. 43 00:01:53,960 --> 00:01:55,880 Speaker 2: Yeah, that's right. 44 00:01:56,000 --> 00:01:58,440 Speaker 1: Okay, are there any parallels in history here? 45 00:02:00,360 --> 00:02:04,840 Speaker 3: Yeah, I think COVID is a reasonable parallel for event 46 00:02:04,920 --> 00:02:05,840 Speaker 3: driven beer market. 47 00:02:07,800 --> 00:02:09,839 Speaker 2: Yeah, I mean those are other parallels. I've been looking 48 00:02:09,840 --> 00:02:10,680 Speaker 2: back two hundred years. 49 00:02:10,680 --> 00:02:14,440 Speaker 3: There's been many event driven beer markets, and the average 50 00:02:15,360 --> 00:02:18,239 Speaker 3: time these last is six to eight months. The average 51 00:02:18,240 --> 00:02:21,760 Speaker 3: time of cyclical beer market lasts about twenty seven months, 52 00:02:21,840 --> 00:02:24,400 Speaker 3: so that's sort of gold Sex looking back over two 53 00:02:24,520 --> 00:02:25,680 Speaker 3: hundred odd years. 54 00:02:26,080 --> 00:02:29,079 Speaker 1: So what are you looking for to kind of tell you, 55 00:02:29,120 --> 00:02:31,760 Speaker 1: to inform you as to where we're going with this 56 00:02:31,880 --> 00:02:33,520 Speaker 1: and whether it's improving or getting worse. 57 00:02:34,960 --> 00:02:38,320 Speaker 3: I'd love to say we're able to ignore the haphazard 58 00:02:39,040 --> 00:02:41,600 Speaker 3: headline bombs coming out of the US, but really looking 59 00:02:41,600 --> 00:02:44,120 Speaker 3: for any signs of walking back some of the tariffs 60 00:02:44,120 --> 00:02:46,440 Speaker 3: and posts on China, any signs that the ninety day 61 00:02:46,520 --> 00:02:49,079 Speaker 3: pause on the rest of the world will result in 62 00:02:49,120 --> 00:02:52,120 Speaker 3: a permanent pause, but more so, any signs that there 63 00:02:52,160 --> 00:02:55,480 Speaker 3: is movement towards his endgame of on shore and US manufacturing. 64 00:02:55,560 --> 00:02:58,520 Speaker 3: So you probably saw in video in the press yesterday 65 00:02:58,520 --> 00:03:01,000 Speaker 3: talking up spinning half a true dollars over the next 66 00:03:01,000 --> 00:03:05,880 Speaker 3: four years to manufacture AI chips in the US. But Apple, Honda, Hyundai, 67 00:03:05,960 --> 00:03:09,320 Speaker 3: Volkswagen all making noises about ramping up US manufacturing and 68 00:03:09,360 --> 00:03:12,320 Speaker 3: then just the US dollar itself. Think of that as 69 00:03:12,560 --> 00:03:15,160 Speaker 3: a popularity barometer for Trump and the US is an 70 00:03:15,200 --> 00:03:16,120 Speaker 3: investment destination. 71 00:03:17,320 --> 00:03:19,800 Speaker 4: Do you when you see these I mean a lot 72 00:03:19,840 --> 00:03:21,200 Speaker 4: of US are looking at some of the stuff that 73 00:03:21,240 --> 00:03:23,400 Speaker 4: he's backtracking on and he's sort of flip flopping, and 74 00:03:23,440 --> 00:03:25,400 Speaker 4: we're seeing it as signs that he's coming under pressure 75 00:03:25,400 --> 00:03:27,799 Speaker 4: and blinking, and we're taking that as positive signs. Are you. 76 00:03:29,400 --> 00:03:29,640 Speaker 2: Yeah? 77 00:03:29,680 --> 00:03:33,119 Speaker 3: I think that's reasonable. We did discover as his pain 78 00:03:33,240 --> 00:03:36,800 Speaker 3: threshold last Wednesday. And the market always talks about finding 79 00:03:36,840 --> 00:03:40,000 Speaker 3: the pain point tour looking for the where's the insurance 80 00:03:40,040 --> 00:03:40,720 Speaker 3: policy at? 81 00:03:40,760 --> 00:03:43,880 Speaker 2: And originally the most benign. 82 00:03:43,680 --> 00:03:45,760 Speaker 3: View was he won't want to see the equity market 83 00:03:45,760 --> 00:03:49,240 Speaker 3: falling because that's a you know, it's a popularity barometer. 84 00:03:49,640 --> 00:03:51,880 Speaker 3: But he was clearly prepared to let the equity market fall. 85 00:03:51,920 --> 00:03:55,120 Speaker 3: But when thirty year bond yields spike higher as foreign 86 00:03:55,200 --> 00:03:57,600 Speaker 3: investors put a higher risk premium on US government debt 87 00:03:57,960 --> 00:04:00,240 Speaker 3: and remember ninety percent of mortgages than the we have 88 00:04:00,240 --> 00:04:04,360 Speaker 3: to set off those rates. And then credit spreads spiked higher, 89 00:04:04,720 --> 00:04:07,240 Speaker 3: So credit spreads you slap on top of government bonds 90 00:04:07,280 --> 00:04:12,840 Speaker 3: to lend to you know, individuals or governments, individuals or businesses. 91 00:04:13,120 --> 00:04:14,440 Speaker 2: That was his pain point. 92 00:04:14,840 --> 00:04:17,760 Speaker 3: So equity market weakness hurts Wall Street at a rise, 93 00:04:17,760 --> 00:04:19,360 Speaker 3: and borrowing costs hurts everyone. 94 00:04:20,120 --> 00:04:23,760 Speaker 1: Right, Sam, what's your advice to investors, Well. 95 00:04:23,600 --> 00:04:25,880 Speaker 3: I can't give advice but that the market is watching 96 00:04:25,960 --> 00:04:28,440 Speaker 3: those three assets, the US dollars, the year bond, and 97 00:04:28,520 --> 00:04:31,760 Speaker 3: US credit spreads. They're all at slightly uncomfortable levels but 98 00:04:31,800 --> 00:04:34,480 Speaker 3: holding there for now. But more broadly, we've got to 99 00:04:34,520 --> 00:04:37,760 Speaker 3: remember at times like this, as equity investors, you learn 100 00:04:37,800 --> 00:04:40,039 Speaker 3: to stomach the sort of volatility every few years. So 101 00:04:40,240 --> 00:04:43,799 Speaker 3: two thousand and one and eight, twenty eleven, twenty eighteen, 102 00:04:44,200 --> 00:04:46,960 Speaker 3: twenty twenty, twenty twenty two, and now twenty twenty five 103 00:04:48,120 --> 00:04:50,920 Speaker 3: we saw these types of volatility as to be expected. 104 00:04:51,400 --> 00:04:54,040 Speaker 2: The situation is fluid, but at the very least hither. 105 00:04:54,000 --> 00:04:55,520 Speaker 3: I think it's a good chance to speak to your 106 00:04:55,520 --> 00:04:57,520 Speaker 3: financial advisor and check and make sure you're in the 107 00:04:57,560 --> 00:04:59,400 Speaker 3: right strategy for your risk tolerance. 108 00:05:00,080 --> 00:05:02,680 Speaker 1: Ad Hey, thank you very much, Sam, appreciated. Happy Easter 109 00:05:02,640 --> 00:05:04,120 Speaker 1: to you that Sam ta Ki Fisher. 110 00:05:03,960 --> 00:05:07,920 Speaker 2: Funds For more from hither Duplessy Allen Drive. 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