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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside

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Speaker 1: my co host Matt Miller. Every business day we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast

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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast Tech leading the Way today,

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Speaker 1: kind of bringing that discussion point up about you know,

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Speaker 1: as with these markets at our near all time highs,

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Speaker 1: how do you play it from here? Do you stick

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Speaker 1: with some of those tech names that have been the

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Speaker 1: drivers really since into the financial crisis, or are you

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Speaker 1: in that rotation trade. George Young, partner and portfolio manager

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Speaker 1: at Hillary and Company, he joins us. George, give us

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Speaker 1: your thoughts there at the rotation trade into cyclicals into

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Speaker 1: smaller caps that has been a great trade for a

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Speaker 1: lot of investors. Kind Of where do you stand on

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Speaker 1: that portion of the market visa via some of the

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Speaker 1: big growth stocks, but we think the small cap stocks

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Speaker 1: here villery coming still have a good way to run. Um,

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Speaker 1: there's been a huge rotation, as you pointed out in

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Speaker 1: the beginning of the fourth quarter of last year, and

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Speaker 1: it's extended here into the second quarter of this year.

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Speaker 1: We see that people don't have that many options. You've

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Speaker 1: got ten year government bonds at one point six percent,

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Speaker 1: that's not overly attractive in the face of inflation. You've

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Speaker 1: got cash and yields about zero, and you've got real

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Speaker 1: estate that's pretty expensive. You can see that in the

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Speaker 1: news left and right. So we think the stock market,

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Speaker 1: and especially small and MidCap stocks and the way to go.

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Speaker 1: You know, anytime you mentioned bonds, my ears will perk up.

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Speaker 1: You mentioned a one point six doesn't really look attractive,

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Speaker 1: especially in the face face of inflation. We've comments from

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Speaker 1: Ray Dalio coming out as well, saying he'd rather own

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Speaker 1: bitcoin than a bond. Do you agree, Well, that's get

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Speaker 1: a little far afield. I think that coin owners are

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Speaker 1: going to have their day at some point. Um. It's

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Speaker 1: amazing because a lot of questions that we feel are

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Speaker 1: from i'll call them novice investors, and this is very,

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Speaker 1: very reminiscent of the Internet bubble back in two thousand,

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Speaker 1: two thousand one. A lot of people have not been

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Speaker 1: in the market for some time. They say, I want

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Speaker 1: to get invested. How about that dogie coin? How about

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Speaker 1: that bitcoin and that's what everybody wants, and um, you know,

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Speaker 1: you've got to be very careful when you start hearing

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Speaker 1: newly minute investors getting into something they're not really sure.

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Speaker 1: It's sort of like the old adage about poker games.

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Speaker 1: If you don't know who the pats he is at

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Speaker 1: the table, Patsy maybe you George, I was in the

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Speaker 1: market during that UF when the bubble burst, the tech

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Speaker 1: bubble burst in two thousand and it was not fun

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Speaker 1: and that it took a long time for nas nastactor

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Speaker 1: retrace retrace that. But boy, you step back and you

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Speaker 1: take a look at some of the meme stocks. You

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Speaker 1: take a look at spacks and had what a run

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Speaker 1: they had late last year into early this year. And

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Speaker 1: you look at the valuations of the SMP at twenty

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Speaker 1: three times. I mean you could draw some, you know,

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Speaker 1: some very close analogies between now and then. Are you

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Speaker 1: concerned that this market is is frothy? Just to use

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Speaker 1: a technical term, Yeah, that's a good technical term. I

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Speaker 1: like that one. We've got about cash right now for

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Speaker 1: our lines and our two mutual funds of Will Balance

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Speaker 1: Fund and Bill Reequient. It is it is and we're

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Speaker 1: long term investors, so again, measure our long term attitude

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Speaker 1: and the fact that we have discretion to invest wherever

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Speaker 1: we want with the fact that we've got cash. That

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Speaker 1: means that we're not finding that many things we want

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Speaker 1: to buy, and we've got the liberty of not having

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Speaker 1: to invest if we shouldn't invest. We've got loyal clients

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Speaker 1: who's been with us for some time. We were found

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Speaker 1: in nineteen eleven, so the clients we have trust us,

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Speaker 1: and if we don't want to buy something, we don't

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Speaker 1: buy it. So this is more cash and normal. So yes,

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Speaker 1: froth he is entirely appropriate term to use at this moment.

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Speaker 1: I think what would it take for you to put

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Speaker 1: that cash to work? Um, we need to see some

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Speaker 1: cheaper valuations at the end of the day. All stocks

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Speaker 1: should and usually do, but not always on objective metrics,

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Speaker 1: which would be pe ratio. Pe ratios need to come

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Speaker 1: down and often enough their aberrations in the stock market

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Speaker 1: where individual stocks or individual sectors do become cheap, and

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Speaker 1: that's when we're prepared to go ahead and buy. So

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Speaker 1: we have the cash, We've got to be ready. Um.

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Speaker 1: Another I hate to dwell on old adages but when

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Speaker 1: the ducks are quack and you've got to feed them,

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Speaker 1: So buyers want to buy, go ahead and sell. What

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Speaker 1: are some names right now that you guys do like,

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Speaker 1: or you you are doing some work on sure sure, sure, Well,

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Speaker 1: there's something that we own and we buy some more

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Speaker 1: of if they become a little bit cheaper. One of

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Speaker 1: those is e Health. E Health offers Medicare supplement insurance.

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Speaker 1: You may have heard their ten thousand plus Americans turning

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Speaker 1: each day. Each of these will be entitled to Medicare,

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Speaker 1: but they need to get Medicare suppits, which aren't that expensive,

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Speaker 1: but they are fairly complicated. So e health is good

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Speaker 1: at navigating the waters of explaining complicated terms and complicated

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Speaker 1: needs and to make sure that the right package is

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Speaker 1: put together for a resonative Texas versus Idaho, and to

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Speaker 1: make sure that the doctors that you're comfortable with are

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Speaker 1: part of your package. So a little bit complicated, but

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Speaker 1: we think it's a relative really cheap stock. And then

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Speaker 1: as an added interesting point, there are a couple of

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Speaker 1: activist investors who have gotten involved in the company recently,

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Speaker 1: so let should make for an interesting a few months ahead.

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Speaker 1: What about this payments processor. I see here Pie really

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Speaker 1: looking at credit card to Dad and checks right, Pie

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Speaker 1: is probably unknown. And again we buy small MidCap stocks,

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Speaker 1: we buy relatively unknown companies. UH their top twenty processor

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Speaker 1: in the United States, the number six in e commerce.

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Speaker 1: They've got a hundred thousand customers, two thousand different partners,

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Speaker 1: and they process thirty three billion last year. Now, they

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Speaker 1: just make a minimal amount of money on that amount

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Speaker 1: that they process last year. But the fact that they're unknown,

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Speaker 1: we like the fact that they're very well organized, well managed.

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Speaker 1: We'd like we think they can goward something like per year.

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Speaker 1: It remains a cheap stock, but it is, you know,

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Speaker 1: one of the small cap stocks, so it's not for

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Speaker 1: the fearless. There will be some volatility. Hey, George, thanks

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Speaker 1: so much for joining us. We really appreciate getting your

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Speaker 1: thoughts on the mark markets. End on some names here

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Speaker 1: that might be of interest for folks in the small

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Speaker 1: to mid capital world. George Young, partner and portfolio manager

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Speaker 1: at A Villary and Company and UH interesting fifteen percent cash.

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Speaker 1: That's the highest percentage I've heard any you know, money

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Speaker 1: manager come on here and talk about But I've increasingly

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Speaker 1: heard that that there's been a lot of profit taking

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Speaker 1: in the last few weeks, Paul, and you need a

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Speaker 1: better entry point. And he mentioned it's hard with valuations

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Speaker 1: with stocks and bonds one sixty two, how do you

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Speaker 1: buy that after exactly so I'll have to see. But

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Speaker 1: fift cash, that's a big allocation. This is Bloomberg. Well,

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Speaker 1: several weeks ago President Joe Biden pitched the first major

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Speaker 1: set of tax increases since another signs that maybe some

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Speaker 1: anxiety is forming within congressional Democrats, not just on the

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Speaker 1: Republican side. Let's get the latest on that with Laura Davison.

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Speaker 1: She's a congressional tax reporter. Laura, give us a sense

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Speaker 1: here of how this is going. I mean, and it's

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Speaker 1: kind of tied in with infrastructure, but boy, the discussion

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Speaker 1: is really focusing on the tax plan. Where are we

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Speaker 1: right now? So what at the point where Biden has

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Speaker 1: put out basically his plans and then has kicked them

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Speaker 1: over to Congress for them to actually sort of put

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Speaker 1: meat on the bones and and write them out in

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Speaker 1: legislative language. And this is what's starting to cause the

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Speaker 1: angst in Congress because they're looking at sort of the

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Speaker 1: outline that the President put out and are then trying

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Speaker 1: to figure out how do we make this work. So

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Speaker 1: they're going and they're talking with with different members of

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Speaker 1: the committee, they're talking with stakeholders, they're holding public hearings,

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Speaker 1: and they're asking, you know, what if we did this,

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Speaker 1: what if we did that? And some of the ideas

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Speaker 1: they're throwing out there would weaken a little bit what

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Speaker 1: Biden has proposed. So they're kind of looking at what

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Speaker 1: is politically possible, what can get done, and specifically with

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Speaker 1: an eye and members like Joe Manson and Kirsten Cinema

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Speaker 1: knowing that those are going to be critical votes in

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Speaker 1: the Senate. So even in the House where there's a

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Speaker 1: broader majority, they still have to to know that that

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Speaker 1: there's bigger political realities out there. Yeah, Laura, what do

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Speaker 1: you hear about the Republican side. I've heard a few

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Speaker 1: different proposals six hundred billion and nine billion or at

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Speaker 1: one point seven trillion, and where are we on the

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Speaker 1: counter proposals and the realism of that. So infrastructure talks

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Speaker 1: really hit a speed bump late last week where Biden

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Speaker 1: put out a ac counter proposal at one point seven

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Speaker 1: five trillion, down from his original two point to five trillion,

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Speaker 1: and Republicans felt like he that he didn't concede enough,

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Speaker 1: that there wasn't enough of a back and forth negotiation

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Speaker 1: going on. Uh. You know, we're in a kind of

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Speaker 1: the last week before Memorial Day, which is kind of

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Speaker 1: considered the initial informal deadline to reach some sort of

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Speaker 1: uh in you know, high level, top level bipartisan deal.

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Speaker 1: It looks like that could slip and we could still

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Speaker 1: be be kind of where we are in a couple

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Speaker 1: of weeks from now. Biden wants to get a deal,

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Speaker 1: but the two sides are really still far apart. So

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Speaker 1: or is fiscal stimulus and the tax plan? Are they linked?

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Speaker 1: Can one go proceed without the other? Explain to us

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Speaker 1: how that's developing. Well, there's many different permutations of what

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Speaker 1: could happen here. But the thing to know is if

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Speaker 1: there's a bipartisan infrastructure deal, it will not be funded

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Speaker 1: by these tax increases that Biden has laid out. Republicans

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Speaker 1: have said, look, that's a red line for us. So

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Speaker 1: they're looking at other funding mechanisms, whether it's user fees,

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Speaker 1: whether it's looking at bonds, whether it's public private partnerships,

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Speaker 1: you know, other ways to get money that aren't tax increases.

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Speaker 1: But Democrats are either cognizant that one of two things

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Speaker 1: will happen if one these bipartisan talks fall apart, and

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Speaker 1: then they can move forward with the Democrats only bill,

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Speaker 1: which will include bipartisan tax increases, or two they do

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Speaker 1: get some sort of smaller, you know, a couple of

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Speaker 1: hundred billion dollar infrastructure deal with Republicans, and then they

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Speaker 1: go back, uh, and they can do the rest of

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Speaker 1: the Biden four trillion dollar agenda, which also would include

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Speaker 1: um tax increases. So really kind of no matter what happens,

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Speaker 1: tax increases are still on the table. It just depends

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Speaker 1: kind of how quickly they move, how much they they'll need,

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Speaker 1: and what it will be paying for. Interesting, what is

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Speaker 1: the pressure to get it done this year and not

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Speaker 1: next year in a midterm election incredibly high. You know,

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Speaker 1: basically everyone uh, you know is wanting to get a

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Speaker 1: deal done this year. This is sort of informally seen

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Speaker 1: as as a deadline, but you know, you could flip

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Speaker 1: till you know, January, said the wary. But once you

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Speaker 1: start getting to the summer, everyone's in campaign mo and

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Speaker 1: passioning attacks increase would be seen that a political big,

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Speaker 1: big mistake, Laura. I think about President Biden forty years

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Speaker 1: in the Senate branded they were many many years ago,

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Speaker 1: and I think Kamala Harris just coming out of the Senate,

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Speaker 1: are they gonna have any ability to kind of work

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Speaker 1: their magic and trying to get some something through here

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Speaker 1: or is it just too much opposition? Um? You know,

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Speaker 1: they really hope that they can. This is one of

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Speaker 1: the reasons that you know, the Biden you know quote

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Speaker 1: campaigned on one of the reasons he picked you know,

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Speaker 1: Harris as his VP. But you know, there are really

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Speaker 1: you know, just a handful of senators. So it's really

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Speaker 1: not looking at you know, how do we get some

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Speaker 1: you know, a broad coalition together. It's you know, how

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Speaker 1: do we get two or three or four senators who

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Speaker 1: are inclined, who have tough reelections ahead of them, who

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Speaker 1: have states that you know favored Trump or lean red.

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Speaker 1: You know, how do we get them personally on board?

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Speaker 1: So that's looking at for you know, mansion, how do

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Speaker 1: we get coal miners trained into new jobs? How for cinema?

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Speaker 1: You know, how do we sort of moderate some of

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Speaker 1: these these tax increases. It's really specific versus a broad

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Speaker 1: uh cell on these, Laura, what do you season next steps?

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Speaker 1: What can we look forward to? You mention, we're coming

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Speaker 1: up on Memorial Day, when could we start to see

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Speaker 1: a re uh invigoration perhaps of some of these discussions.

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Speaker 1: I expect we'll see some back and forth between Republicans

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Speaker 1: and Democrats this week, uh, you know, on if there's

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Speaker 1: a still momentum behind a deal or if these talks

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Speaker 1: just fall apart. That is also a possibility this year.

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Speaker 1: We're also waiting to see um from the Senate parliamentarian

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Speaker 1: who will basically rule about you know, how Democrats could

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Speaker 1: proceed with it with a partisan bill on their end.

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Speaker 1: Those will be kind of a key point to watch for,

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Speaker 1: if not this week, next week, and then that will

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Speaker 1: really set the course for what the summer rentfall looks like.

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Speaker 1: What else is Congress working on? Me? It's kind of

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Speaker 1: all we hear about is the infrastructure and taxes, not

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Speaker 1: that they're not huge issues, but your Congressional report, are

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Speaker 1: there other little things going on that we should be

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Speaker 1: paying attention to. There are other little things going there,

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Speaker 1: and there's a lot of talk right now, and this

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Speaker 1: is really playing the part of intentions in Congress. Is

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Speaker 1: this um doing a commission to investigate the January six

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Speaker 1: attack on the Capitol. That's narrowly passed the House last week.

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Speaker 1: The Senate is set to pick this up, but Republicans,

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Speaker 1: even who initially said they were on board for supporting US,

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Speaker 1: have have since backed away. Um. This is really setting

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Speaker 1: up a lot of ill will between the two parties

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Speaker 1: and does bode well for doing something on a bipartisan

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Speaker 1: basis when it comes to economic policy. All right, Lauren,

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Speaker 1: thank you so much. We appreciate that getting the update

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Speaker 1: on all things happening in Washington. And we can do

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Speaker 1: that because we have a reporter who focuses on congressional

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Speaker 1: tax issues. I mean, nobody else has that. I can

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Speaker 1: imagine Laura Davison, congressional tax reporter for Bloomberg News. And

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Speaker 1: again it seems like, UM, it's going to be very

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Speaker 1: difficult for President um Biden from what we're hearing from

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Speaker 1: the reporting, UH, to get what he wants here. I'm

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Speaker 1: just gonna have to be a significant compromise. And you

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Speaker 1: think about it, you know, it's the first major set

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Speaker 1: of tax increases since three That tells you something about

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Speaker 1: how difficult, UH, it is to raise taxes for administration.

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Speaker 1: I want to bring in Shannan the Basket. She's a

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Speaker 1: Wall Street reporter for Bloomberg News. She joins US Live,

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Speaker 1: I Live and the Bloomberg Interactive Brokers Studio. Great to

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Speaker 1: have everybody back together again, Sonalie, let's talk spacks here again.

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Speaker 1: You know, I mentioned earlier that Dave Wilson would come

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Speaker 1: in every day for stock reports and have to talk

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Speaker 1: about three or four spacks coming public and things like that.

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Speaker 1: It's kind of petered out a little bit. But they're

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Speaker 1: still out there, aren't they. And they're still doing deals.

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Speaker 1: They're certainly still out there, and there is still a

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Speaker 1: hope that once the rules get clarified, that they'll come

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Speaker 1: back yet again and they'll be a great way for

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Speaker 1: people to go public. But right now there are a

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Speaker 1: lot of questions around how investors are paid in SPACs, uh,

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Speaker 1: the performance of them, and then also all of the

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Speaker 1: disclosures that come around spacks. For new people to really

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Speaker 1: start investing in these companies that are really that are

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Speaker 1: really young, right that they're really not mature companies that

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Speaker 1: are surefire things to succeed in public markets. Is there

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Speaker 1: a sense that the performance will turn around? Was the

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Speaker 1: shakeout of some of the big high flyers that seemed

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Speaker 1: to break down was that, as Paul had said earlier,

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Speaker 1: healthy correction or indicative of something more sinister that we

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Speaker 1: haven't been understanding the way these works. What I can

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Speaker 1: give you, Taylor, is the view from investment bankers. Right.

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Speaker 1: So from investmentkers point of view, it is good that

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Speaker 1: the market has cooled down. Why because it was probably overheated.

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Speaker 1: Companies that shouldn't have gone public have been going public.

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Speaker 1: That brings down the average overall when it comes to performance,

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Speaker 1: and so it cooling down is not a bad thing.

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Speaker 1: So what's happening in Congress today there's actually something kind

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Speaker 1: of tangible here. They're really looking to rewrite the rules

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Speaker 1: regarding to the Securities Act of Exchange Act to add

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Speaker 1: SPACs when it comes to forwardlooking statements in terms of

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Speaker 1: their financial performance. So what they're really trying to do

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Speaker 1: is rewrite the rules here to make it easier for

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Speaker 1: the investor to know how well that company will do

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Speaker 1: when it goes public. All right, But the spects that

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Speaker 1: are still out there, they're out there and they're still

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Speaker 1: able to do deals. Right, Yes, But the sec which

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Speaker 1: is another kind of aspect of this today's Congress, we're

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Speaker 1: looking at the security is an exchange commission is looking

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Speaker 1: at all those backs and saying, okay, wait a minute,

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Speaker 1: maybe we really need to treat you differently in terms

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Speaker 1: of how you've already been doing your accounting. So that

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Speaker 1: is also spooking some people, Right, what does that mean

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Speaker 1: for the supply side? As I think Paul was alluding to,

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Speaker 1: of you create this regulatory overhang. Now, not anyone can

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Speaker 1: come as off the wild West anymore. So if you

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Speaker 1: have skeletons in your closet, you're not going to want

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Speaker 1: to do us back that. If that is the that

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Speaker 1: is the bottom line. If you have financial performance that's iffy,

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Speaker 1: or if you think you're making statements that are probably

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Speaker 1: a little too rosy, Uh, everybody's got an eye on you,

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Speaker 1: from lawmakers to the SEC. So you're probably gonna want

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Speaker 1: to not go public that way. Yeah. But but we

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Speaker 1: still have a whole bunch of these SPACs out there,

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Speaker 1: and they're all sitting there with dry powder, and uh,

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Speaker 1: you know, I guess it was when I guess we

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Speaker 1: saw some of these celebrities and athletes started and it

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Speaker 1: seemed like they were just lending their name to these

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Speaker 1: SPACs maybe create some interest. Maybe on the first day

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Speaker 1: of trading get a pop, and I suspect that might

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Speaker 1: have been one of the things I got regulators attention. Well, yes,

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Speaker 1: and and that's certainly true. But let me give you

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Speaker 1: the flip side of this too, And this is why

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Speaker 1: I think there will be a tone down, but not

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Speaker 1: a complete clampdown. All these famous people are investing in

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Speaker 1: pre i p O stocks anyways, These folks are all

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Speaker 1: already investing in high flying unicorns or starting their own.

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Speaker 1: Think Jessica Albert. Today we wrote a story about Leonardo

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Speaker 1: DiCaprio and Orlando Bloom. What's going on there? Oh, they're

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Speaker 1: they're backing this financial technology company and Neil Bank called

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Speaker 1: Aspiration that is looking to go public either through an

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Speaker 1: I p O R is that's a long story. Short

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Speaker 1: is they're already in the venture market. SPACs are another

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Speaker 1: form of venture capital. Yeah, what is the new cool way? Now?

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Speaker 1: Do we go back to direct listings, we go back

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Speaker 1: to traditional IPO s? Did totally last week? Do an

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Speaker 1: I p O That was one that we've been following exactly,

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Speaker 1: And so to your point, I p O s are

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Speaker 1: still the hottest game in town. There's still tons of

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Speaker 1: I p o s even though we were talking about SPACs. Uh,

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Speaker 1: there were you know, more than twice the average of

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Speaker 1: the last ten years going public and last year all alone.

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Speaker 1: So this is good. Why is this good? Because before

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Speaker 1: we saw so many companies like Uber for example, wait

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Speaker 1: forever to go public, and then by the time a

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Speaker 1: retail investor gets involved, it's very late in the game.

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Speaker 1: So shouldn't they have the opportunity to invest in more

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Speaker 1: young companies? The question is how young? And the question

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Speaker 1: is what kind of information doesn't investor need to have

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Speaker 1: to make an informed decision about that company? Yeah, you can.

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Speaker 1: You compare the disclosure from a SPACK to the disclosure

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Speaker 1: for an I p O. And when I was writing

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Speaker 1: up I peer perspectives is they were about you know,

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Speaker 1: half an inch thick, you know, because I just said

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Speaker 1: to the printers all night and make sure you know

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Speaker 1: everything was perfect. Now they're you know, three or four inches.

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Speaker 1: You get all the disclosures for a company to go

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Speaker 1: public VI an I p O. It makes SPACs and

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Speaker 1: direct listings maybe at from at least from that perspective,

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Speaker 1: a little bit more attractive let's just do a one

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Speaker 1: on one here. You everyone should be picking up. If

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Speaker 1: you're going to invest, if you're a retail investor, you

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Speaker 1: want to invest in I p O. They're hot right now,

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Speaker 1: go to the risk back, go to the risk factors,

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Speaker 1: and go to the financial analysis and see if that

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Speaker 1: company is actually doing any well. I think that one

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Speaker 1: of the earliest piece of advices I got from a

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Speaker 1: really good investor back in the day was when you

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Speaker 1: get a prospectus, the first place you go to is

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Speaker 1: related transactions. That's a good one. Risk factors have gotten

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Speaker 1: so boiler plate the related transactions and and now they're

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Speaker 1: fifty pages long. You know, we may have a pandemic,

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Speaker 1: you know that kind of stuff. But you go to

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Speaker 1: the related transactions, and that where you get to see

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Speaker 1: some if there's anything funky in terms of, oh, we're

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Speaker 1: paying this person, this company, this company that, and there's

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Speaker 1: these off the balance sheet uh or kind of transactions.

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Speaker 1: That's where they pop up. So anyway, that's just a

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Speaker 1: little uh lesson learned. I guess Shanali Bastk thank you

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Speaker 1: so much. We appreciated getting all things Wall Street. We're

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Speaker 1: talking about SPACs today. Congress is holding a hearing on spacks.

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Speaker 1: Things might be changing in that market. Looking on my

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Speaker 1: g LC go that's the Global Commodities page. It brings

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Speaker 1: up everything you need to know about commodities pricing. I

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Speaker 1: look at the metals here, I see double digit gains

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Speaker 1: and most of the metals, with one notable exception spot gold,

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Speaker 1: kind of flat on the year. Let's break it all

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Speaker 1: down as we talk precious metals. We do that with

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Speaker 1: Everett Millman. He's precious metal specialist at Gainesville Coins. Every

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Speaker 1: Thanks so much for joining us here. Love to get

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Speaker 1: your thoughts again. We see a lot of positive momentum

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Speaker 1: in the metal space here. Again the exception is gold.

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Speaker 1: Give us your thoughts on that precious metal. So it

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Speaker 1: does appear that gold has been in this consolidation pattern

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Speaker 1: for a while, but I think it is poised to

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Speaker 1: break out of that and resume a more gradual grind.

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Speaker 1: Higher prices really just climbed too far, too fast in

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Speaker 1: the early part of the pandemic, and so I think

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Speaker 1: we're seeing that kind of shake out and normalize. This

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Speaker 1: is the first time that gold is traded above it's

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Speaker 1: two in day moving average since early January, and the

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Speaker 1: fact that the US dollar is a bit softer today,

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Speaker 1: also helps, but I think much will depend on what

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Speaker 1: we're hearing out of the FED. The rhetoric has certainly

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Speaker 1: turned toward a tapering of asset purchases and the potential

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Speaker 1: that will see interest interest rates rise sooner than anticipated.

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Speaker 1: But I still think it's a reasonable assumption that, given

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Speaker 1: the unprecedented nature of the post pandemic recovery, the FED

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Speaker 1: and other central banks are going to remain accommodative, and

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Speaker 1: so long as rates stay suppressed and inflation continues to rise,

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Speaker 1: ultimately that will be good for gold. Is gold still

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Speaker 1: a negatively correlated asset to bitcoin when it comes to

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Speaker 1: price and flows, It certainly seems that way. Over the

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Speaker 1: past month or so, the two markets have gone opposite directions,

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Speaker 1: and anecdot anecdotally, I have heard quite a bit of

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Speaker 1: um confirmation of that those those flow trends from crypto

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Speaker 1: traders that um, when there is a sell off in

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Speaker 1: the crypto market, that money flows into gold and vice versa.

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00:21:02,320 --> 00:21:05,080
Speaker 1: And I think the reasoning behind it is pretty straightforward

431
00:21:05,119 --> 00:21:09,000
Speaker 1: that these are seen as alternative markets to equities and

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00:21:09,240 --> 00:21:12,239
Speaker 1: uh other more traditional assets. So I think that that

433
00:21:12,280 --> 00:21:16,840
Speaker 1: trend will probably continue until we see greater maturation in

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00:21:16,880 --> 00:21:20,159
Speaker 1: the crypto market where there is less of this panic selling.

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00:21:20,680 --> 00:21:22,760
Speaker 1: All right, So in terms of the crypto market, and

436
00:21:23,240 --> 00:21:24,800
Speaker 1: you know, as it relates to the gold here, we've

437
00:21:24,800 --> 00:21:28,480
Speaker 1: seen to some extraordinary volatility in bitcoin. I mean, you know,

438
00:21:28,520 --> 00:21:31,840
Speaker 1: an eight decline yesterday, a rebound today. We've seen these

439
00:21:32,119 --> 00:21:35,120
Speaker 1: double digit moves, you know, almost on a daily basis

440
00:21:35,200 --> 00:21:37,960
Speaker 1: from this currency. What are your thoughts on bitcoin here?

441
00:21:38,000 --> 00:21:43,119
Speaker 1: Is is the volatility preventing it from becoming perceived as

442
00:21:43,160 --> 00:21:48,040
Speaker 1: a real store value? Absolutely? I do think that's the case. Um.

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00:21:48,119 --> 00:21:53,320
Speaker 1: Not only of the volatility discouraging to more mainstream investors,

444
00:21:53,320 --> 00:21:57,440
Speaker 1: but these big price wings create network congestion, they create

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00:21:57,520 --> 00:22:01,080
Speaker 1: higher transaction fees when trading crypto, and the fact that

446
00:22:01,240 --> 00:22:04,320
Speaker 1: so many of these coins, their prices are highly correlated

447
00:22:04,359 --> 00:22:09,000
Speaker 1: to one another, all of that makes it less attractive

448
00:22:09,080 --> 00:22:13,679
Speaker 1: to regular investors. There's just a different risk assessment that

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00:22:13,760 --> 00:22:15,840
Speaker 1: goes on there. And one of the thing I think

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00:22:15,880 --> 00:22:19,200
Speaker 1: that's reveals is that despite all the talk we hear

451
00:22:19,240 --> 00:22:23,720
Speaker 1: in the crypto space about diamond hands and hoddling um,

452
00:22:23,760 --> 00:22:27,359
Speaker 1: the behavior of crypto traders does speak to some inexperience

453
00:22:27,720 --> 00:22:30,560
Speaker 1: that they haven't seen these big up and downs and markets,

454
00:22:30,600 --> 00:22:33,840
Speaker 1: and the panic selling does remain a feature. I do

455
00:22:33,920 --> 00:22:36,359
Speaker 1: think that that is one of the major obstacles to

456
00:22:36,480 --> 00:22:41,080
Speaker 1: more mainstream adoption. Go on over with us to some

457
00:22:41,160 --> 00:22:45,440
Speaker 1: of the other medals that we've been watching, iron, ore, steel, copper,

458
00:22:45,680 --> 00:22:47,960
Speaker 1: China coming out with some big comments overnight, seeing that

459
00:22:48,040 --> 00:22:52,200
Speaker 1: it's trying to target speculators and hoarders. Do you get

460
00:22:52,240 --> 00:22:54,480
Speaker 1: this sense that within the commodity space, a lot of

461
00:22:54,520 --> 00:22:58,199
Speaker 1: this has been based on fundamentals and future growth or

462
00:22:58,280 --> 00:23:02,840
Speaker 1: some of these crackdowns that we see overseas. I think

463
00:23:02,880 --> 00:23:06,280
Speaker 1: the crackdowns are mainly to blame in this case. UM.

464
00:23:06,359 --> 00:23:11,320
Speaker 1: We have seen some lack of infrastructure growth and some

465
00:23:11,840 --> 00:23:16,320
Speaker 1: uneven manufacturing numbers that could speak to the fundamentals starting

466
00:23:16,359 --> 00:23:19,600
Speaker 1: to shift more to the negative for commodities. But I

467
00:23:19,640 --> 00:23:23,560
Speaker 1: think it is very telling that Beijing has stepped in UM.

468
00:23:24,200 --> 00:23:28,520
Speaker 1: Commodity inflation is a big negative for a lot of

469
00:23:28,560 --> 00:23:31,600
Speaker 1: the consumers. A lot of the countries are importing these things,

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00:23:31,840 --> 00:23:35,160
Speaker 1: So I think that the from the policy standpoint, UM

471
00:23:35,200 --> 00:23:38,479
Speaker 1: that is one of the major factors that's driving this,

472
00:23:38,560 --> 00:23:42,800
Speaker 1: because as we've seen, inflation has been mostly occurring across

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00:23:42,840 --> 00:23:46,360
Speaker 1: the board, but especially in the commodity space. Hey, every

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00:23:46,400 --> 00:23:48,440
Speaker 1: let's just talk quickly about gold here. I know there's

475
00:23:48,440 --> 00:23:51,840
Speaker 1: a scarcity of physical silver buoy on it golds up

476
00:23:51,880 --> 00:23:54,200
Speaker 1: slightly the year today. What are your thoughts on I'm sorry,

477
00:23:54,200 --> 00:23:58,840
Speaker 1: on silver all right? Yes, um, what's interesting is that

478
00:23:59,320 --> 00:24:01,800
Speaker 1: I think silver it's the greatest upside among all the

479
00:24:01,840 --> 00:24:05,639
Speaker 1: medals because not only does it combine some robust demand

480
00:24:05,680 --> 00:24:09,160
Speaker 1: from various industries, but it is rising as an alternative

481
00:24:09,160 --> 00:24:12,520
Speaker 1: to gold in terms of physical bullyon um. The Royal

482
00:24:12,560 --> 00:24:15,960
Speaker 1: Mint in the UK saw a five increase year on

483
00:24:16,119 --> 00:24:19,560
Speaker 1: year in its silver bar sales. And it doesn't help

484
00:24:19,600 --> 00:24:23,520
Speaker 1: that the Loeon Bullion Market Association overstated it's silver inventory

485
00:24:23,600 --> 00:24:27,399
Speaker 1: recently by over a hundred million ounces. So the idea,

486
00:24:27,600 --> 00:24:32,080
Speaker 1: the idea isn't that silver itself. The royal resource is scarce.

487
00:24:32,119 --> 00:24:35,480
Speaker 1: But yes, the refined finished product of silver bullion is

488
00:24:35,600 --> 00:24:38,480
Speaker 1: rather scarce and it's just difficult to find on the

489
00:24:38,520 --> 00:24:41,720
Speaker 1: market right now, so that is driving prices higher. Ever,

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00:24:41,800 --> 00:24:43,720
Speaker 1: thanks so much for joining us. We lays appreciate getting

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00:24:43,760 --> 00:24:46,760
Speaker 1: your thoughts on these precious medals every moment. Precious Medals

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00:24:46,800 --> 00:24:50,680
Speaker 1: Specialist for Gainsville Points. Thanks for listening to the Bloomberg

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00:24:50,800 --> 00:24:54,200
Speaker 1: Markets podcast. You can subscribe and listen to interviews with

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00:24:54,240 --> 00:24:59,040
Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller.

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00:24:59,320 --> 00:25:03,000
Speaker 1: I'm on Twitter at Matt Miller nineteen seventy three. I'm

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00:25:03,040 --> 00:25:06,119
Speaker 1: Fall Sweeney. I'm on Twitter at pt Sweeney. Before the podcast,

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00:25:06,160 --> 00:25:08,640
Speaker 1: you can always catch us worldwide at Bloomberg Radio