WEBVTT - Single Best Idea with Tom Keene: Andrew Slimmon

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, single.

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<v Speaker 2>Best idea, and thank you so much for our Thanksgiving,

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<v Speaker 2>which is an incredible year for what we're doing in

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<v Speaker 2>the digital space, not only with this little thing yette,

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<v Speaker 2>but all of Bloomberg podcasts, what Joe Wisenthal and Tracy

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<v Speaker 2>Laway are doing. Go out to YouTube, subscribe to Bloomberg podcast.

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<v Speaker 2>It's a compendium of what we're doing. In live. We

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<v Speaker 2>try to do it every morning. Today Live, we did

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<v Speaker 2>it with Andrew Slimon. He's wonderful out of Chicago with

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<v Speaker 2>Morgan Stanley, writes a brilliant note. Get that note through

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<v Speaker 2>Morgan Stanley, and here's my Thanksgiving gift to you. Bottle

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<v Speaker 2>this answer. Andrew Slimmon on the markets.

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<v Speaker 3>If I go with my Bloomberg terminal and I look

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<v Speaker 3>at what has worked from a style standpoint the last

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<v Speaker 3>ten years, value, you know, dividends, what's worked according to

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<v Speaker 3>you're bloom work, it is momentum number one and revisions

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<v Speaker 3>number two. Long down the list is things like dividends, quality, value, growth.

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<v Speaker 3>It is momentum and revisions. And the reality of the

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<v Speaker 3>market is that earnings i e. Revisions are very strong

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<v Speaker 3>right now because the economy. For all the talk, earnings

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<v Speaker 3>have come in better than what really Wall Street thought,

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<v Speaker 3>certainly since April, but even since the beginning of the year.

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<v Speaker 2>Slim In physics from the gentleman from Princeton. Let me

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<v Speaker 2>walk through why what he said is so important in

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<v Speaker 2>the Newtonian model of this, which is based around the calculus.

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<v Speaker 2>And take physics where you're like on the road standing still,

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<v Speaker 2>and then you have velocity. You put your foot in

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<v Speaker 2>the pedal and then you press down or pit the brake.

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<v Speaker 2>That's acceleration. The acceleration that's a second derivative. So you

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<v Speaker 2>have an earnings belief out there, and then you have revisions,

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<v Speaker 2>which is the change of the belief. And what he's

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<v Speaker 2>saying is what's moving the market. And I think of

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<v Speaker 2>Gena Martin Adams now on Margins on this as well.

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<v Speaker 2>What's so so important here is this quarter after quarter

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<v Speaker 2>after quarter of constructive revisions, the second derivative of the

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<v Speaker 2>earnings belief, the profit belief in corporations doing better than

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<v Speaker 2>good again Andrew Slimming here on the view forward.

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<v Speaker 3>My argument, Tom is the stock market is following a

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<v Speaker 3>classic behavioral path, which is unfortunately you know that The

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<v Speaker 3>only consistency of this business, and you know this bomb

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<v Speaker 3>as well as I do, is people SELLO and they

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<v Speaker 3>buy high. It's the only all market I know were

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<v Speaker 3>when prices go down, people want to sell wells.

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<v Speaker 2>Just described by the investment strategy.

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<v Speaker 3>Well, it's triple triple log cast whatever you're have. But

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<v Speaker 3>look in twenty twenty three, we had just come off

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<v Speaker 3>a twenty five percent declining. It was a wonderful opportunity

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<v Speaker 3>buy stocks. But the reason why we had twenty five percent,

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<v Speaker 3>the client was had was raising rates. So suddenly now

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<v Speaker 3>short term rates look attractive.

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<v Speaker 2>Andrew slam in there and just a little vignette what

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<v Speaker 2>a privilege I had in my ute. A gentleman named

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<v Speaker 2>John Galbray's up in Toronto with Templeton Global Investors. Said

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<v Speaker 2>please come up and meet John Templeton and John Templeton.

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<v Speaker 2>When I could shave maybe twice a week, I'm lying

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<v Speaker 2>once a week. Said just what you heard there from

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<v Speaker 2>the Great Andrew Slimmon of Morgan Stanley. What do we do?

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<v Speaker 2>We sell at the bottom, then we buy at the top.

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<v Speaker 2>We're in a podcasts Apple and Spotify or and YouTube podcasts.

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<v Speaker 2>It's single best idea