1 00:00:00,200 --> 00:00:03,360 Speaker 1: Now Ever, du markets may not seem to have been 2 00:00:03,400 --> 00:00:06,600 Speaker 1: overly volatile in recent weeks. Most markets are at or 3 00:00:06,640 --> 00:00:09,640 Speaker 1: near all time highs, but apparently that's masking an unusual 4 00:00:09,680 --> 00:00:13,560 Speaker 1: amount of volatility below the surface. Sam Dickie from Fisher 5 00:00:13,600 --> 00:00:15,800 Speaker 1: Funds has been watching all of this carrying on and 6 00:00:15,800 --> 00:00:16,400 Speaker 1: he's with us now. 7 00:00:16,440 --> 00:00:19,119 Speaker 2: Ho Sam, good evening, So what is going on? 8 00:00:19,160 --> 00:00:21,239 Speaker 1: What are you seeing moving fast below the surface? 9 00:00:22,520 --> 00:00:25,800 Speaker 2: Yes, the duck analogy definitely springs to mind or calm 10 00:00:25,840 --> 00:00:29,600 Speaker 2: on the surface, but paddling like crazy underneath. So global 11 00:00:29,600 --> 00:00:31,960 Speaker 2: stock markets are up a couple percent this year, at 12 00:00:31,960 --> 00:00:34,480 Speaker 2: all time highs, as you said, But underneath the hood 13 00:00:34,479 --> 00:00:37,960 Speaker 2: you've got sectors like software companies down twenty percent, and 14 00:00:38,360 --> 00:00:40,159 Speaker 2: on the other hand, you've got energy companies and more 15 00:00:40,159 --> 00:00:44,320 Speaker 2: cycnical companies up up twenty percent. And that's a forty 16 00:00:44,479 --> 00:00:48,040 Speaker 2: percent spread between sectors and what six weeks of training 17 00:00:48,040 --> 00:00:50,559 Speaker 2: so far this year, So that is extraordinary, that sort 18 00:00:50,560 --> 00:00:51,240 Speaker 2: of dispersion. 19 00:00:52,080 --> 00:00:53,080 Speaker 1: Why is this happening? 20 00:00:54,720 --> 00:00:58,520 Speaker 2: There's some extreme greed and fear going on, and interestingly 21 00:00:58,560 --> 00:01:01,880 Speaker 2: it's mostly fear right now, which is ironic given markets 22 00:01:01,920 --> 00:01:04,480 Speaker 2: at all time highs. So you got two sides of 23 00:01:04,480 --> 00:01:07,679 Speaker 2: that fear trade. That the primary narrative driving this is 24 00:01:08,560 --> 00:01:11,520 Speaker 2: the ever expanding list of so called AI losers. So 25 00:01:11,600 --> 00:01:14,639 Speaker 2: it started well with kind of last year, some weakes 26 00:01:14,720 --> 00:01:18,040 Speaker 2: software companies been considered losers that AI could replicate or 27 00:01:18,040 --> 00:01:22,560 Speaker 2: at least do more cheaply, to what people now call 28 00:01:22,800 --> 00:01:27,039 Speaker 2: calling the soft apocalypse. Anything with software in its name 29 00:01:27,080 --> 00:01:30,319 Speaker 2: has been hammered, and that's now broadened out to any 30 00:01:30,440 --> 00:01:33,240 Speaker 2: company that really sells human time is now caught up 31 00:01:33,280 --> 00:01:36,880 Speaker 2: in this, in this mailstream, and the other side of 32 00:01:37,319 --> 00:01:40,400 Speaker 2: that trade has invested appiling it into anything it appears 33 00:01:40,440 --> 00:01:44,040 Speaker 2: to be AI immune that AI can't replicate or weaken 34 00:01:44,080 --> 00:01:47,880 Speaker 2: its moat so hard a set names like industrials, energy, 35 00:01:47,920 --> 00:01:51,800 Speaker 2: heavy equipment, commodities, and bricks and mortar retailers, and a 36 00:01:51,800 --> 00:01:55,040 Speaker 2: good example there is Walmart. It's your bog standard bricks 37 00:01:55,040 --> 00:01:58,480 Speaker 2: and mortar retailer that AI allegedly can't replace, and that's 38 00:01:58,560 --> 00:02:00,960 Speaker 2: up twenty percent this year the other side of the 39 00:02:01,000 --> 00:02:02,920 Speaker 2: fear trade. That's interesting stuff. 40 00:02:03,160 --> 00:02:04,680 Speaker 1: So what does it mean for investors. 41 00:02:04,520 --> 00:02:07,600 Speaker 2: Who are looking at all of this, Well, that's six weeks. 42 00:02:07,640 --> 00:02:10,519 Speaker 2: That's pretty extreme dispersion. And when we see moves this extreme, 43 00:02:10,560 --> 00:02:13,680 Speaker 2: it means there's some exciting opportunities out there. So swept 44 00:02:13,760 --> 00:02:16,560 Speaker 2: up in this AI loser trade are companies like Amazon 45 00:02:16,680 --> 00:02:19,400 Speaker 2: that have spent a bit too much on AI investments. 46 00:02:19,600 --> 00:02:21,880 Speaker 2: You and I spoke last year about the fact that 47 00:02:21,960 --> 00:02:24,160 Speaker 2: rubble would meet the road this year on those companies 48 00:02:24,200 --> 00:02:27,200 Speaker 2: having to show a return plus the market as worried 49 00:02:27,240 --> 00:02:31,360 Speaker 2: AI agents will replicate or at least significantly weaken Amazon's 50 00:02:31,360 --> 00:02:35,760 Speaker 2: e commerce business. For context, Amazon and Walmart are both retailers. 51 00:02:35,800 --> 00:02:38,720 Speaker 2: Walmart's growing less than half as fast as Amazon, but 52 00:02:38,760 --> 00:02:42,480 Speaker 2: it's trading on more than twice the evaluation multiple, and those 53 00:02:42,520 --> 00:02:47,280 Speaker 2: sort of extreme distications are littered throughout markets at the moment. Sam, 54 00:02:47,320 --> 00:02:48,480 Speaker 2: it's good to talk to you. Thanks man. 55 00:02:48,480 --> 00:02:49,840 Speaker 1: We'll talk to you in a week's time. That Sam 56 00:02:49,840 --> 00:02:51,519 Speaker 1: Dickey Official funds. 57 00:02:51,800 --> 00:02:54,040 Speaker 2: For more from Heather Duplessy Allen Drive. 58 00:02:54,200 --> 00:02:55,600 Speaker 1: Listen live to news talks. 59 00:02:55,600 --> 00:02:58,800 Speaker 2: It'd be from four pm weekdays, or follow the podcast 60 00:02:58,919 --> 00:02:59,840 Speaker 2: on iHeartRadio.