WEBVTT - Small Caps Still Have Room To Run: George Young 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.520 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.960 at Bloomberg dot com slash podcast Tech leading the Way today, 0:00:23.040 --> 0:00:25.919 kind of bringing that discussion point up about you know, 0:00:26.120 --> 0:00:28.560 as with these markets at our near all time highs, 0:00:28.600 --> 0:00:31.200 how do you play it from here? Do you stick 0:00:31.200 --> 0:00:32.760 with some of those tech names that have been the 0:00:32.880 --> 0:00:35.479 drivers really since into the financial crisis, or are you 0:00:35.520 --> 0:00:39.800 in that rotation trade. George Young, partner and portfolio manager 0:00:39.920 --> 0:00:42.960 at Hillary and Company, he joins us. George, give us 0:00:43.000 --> 0:00:47.560 your thoughts there at the rotation trade into cyclicals into 0:00:47.600 --> 0:00:50.559 smaller caps that has been a great trade for a 0:00:50.600 --> 0:00:52.839 lot of investors. Kind Of where do you stand on 0:00:53.040 --> 0:00:56.160 that portion of the market visa via some of the 0:00:56.200 --> 0:00:59.320 big growth stocks, but we think the small cap stocks 0:00:59.360 --> 0:01:02.120 here villery coming still have a good way to run. Um, 0:01:02.200 --> 0:01:04.679 there's been a huge rotation, as you pointed out in 0:01:04.800 --> 0:01:06.600 the beginning of the fourth quarter of last year, and 0:01:06.600 --> 0:01:09.479 it's extended here into the second quarter of this year. 0:01:10.120 --> 0:01:12.679 We see that people don't have that many options. You've 0:01:12.720 --> 0:01:15.399 got ten year government bonds at one point six percent, 0:01:15.520 --> 0:01:18.440 that's not overly attractive in the face of inflation. You've 0:01:18.440 --> 0:01:20.600 got cash and yields about zero, and you've got real 0:01:20.720 --> 0:01:22.640 estate that's pretty expensive. You can see that in the 0:01:22.680 --> 0:01:24.800 news left and right. So we think the stock market, 0:01:24.880 --> 0:01:27.320 and especially small and MidCap stocks and the way to go. 0:01:28.000 --> 0:01:31.280 You know, anytime you mentioned bonds, my ears will perk up. 0:01:31.319 --> 0:01:33.759 You mentioned a one point six doesn't really look attractive, 0:01:33.840 --> 0:01:37.240 especially in the face face of inflation. We've comments from 0:01:37.319 --> 0:01:40.319 Ray Dalio coming out as well, saying he'd rather own 0:01:40.400 --> 0:01:45.040 bitcoin than a bond. Do you agree, Well, that's get 0:01:45.160 --> 0:01:48.160 a little far afield. I think that coin owners are 0:01:48.160 --> 0:01:50.400 going to have their day at some point. Um. It's 0:01:50.400 --> 0:01:53.120 amazing because a lot of questions that we feel are 0:01:53.160 --> 0:01:55.880 from i'll call them novice investors, and this is very, 0:01:56.040 --> 0:01:59.360 very reminiscent of the Internet bubble back in two thousand, 0:01:59.440 --> 0:02:01.800 two thousand one. A lot of people have not been 0:02:01.800 --> 0:02:03.520 in the market for some time. They say, I want 0:02:03.520 --> 0:02:06.600 to get invested. How about that dogie coin? How about 0:02:06.640 --> 0:02:10.720 that bitcoin and that's what everybody wants, and um, you know, 0:02:10.840 --> 0:02:12.960 you've got to be very careful when you start hearing 0:02:13.120 --> 0:02:15.840 newly minute investors getting into something they're not really sure. 0:02:15.840 --> 0:02:17.760 It's sort of like the old adage about poker games. 0:02:17.919 --> 0:02:19.360 If you don't know who the pats he is at 0:02:19.360 --> 0:02:23.240 the table, Patsy maybe you George, I was in the 0:02:23.280 --> 0:02:26.119 market during that UF when the bubble burst, the tech 0:02:26.120 --> 0:02:29.400 bubble burst in two thousand and it was not fun 0:02:29.480 --> 0:02:32.560 and that it took a long time for nas nastactor 0:02:32.600 --> 0:02:35.520 retrace retrace that. But boy, you step back and you 0:02:35.520 --> 0:02:37.120 take a look at some of the meme stocks. You 0:02:37.160 --> 0:02:39.560 take a look at spacks and had what a run 0:02:39.600 --> 0:02:42.320 they had late last year into early this year. And 0:02:42.360 --> 0:02:44.440 you look at the valuations of the SMP at twenty 0:02:44.520 --> 0:02:46.640 three times. I mean you could draw some, you know, 0:02:46.760 --> 0:02:50.200 some very close analogies between now and then. Are you 0:02:50.240 --> 0:02:53.320 concerned that this market is is frothy? Just to use 0:02:53.320 --> 0:02:56.560 a technical term, Yeah, that's a good technical term. I 0:02:56.639 --> 0:02:59.680 like that one. We've got about cash right now for 0:02:59.760 --> 0:03:02.600 our lines and our two mutual funds of Will Balance 0:03:02.680 --> 0:03:04.959 Fund and Bill Reequient. It is it is and we're 0:03:05.000 --> 0:03:09.320 long term investors, so again, measure our long term attitude 0:03:09.600 --> 0:03:11.959 and the fact that we have discretion to invest wherever 0:03:12.000 --> 0:03:14.760 we want with the fact that we've got cash. That 0:03:14.840 --> 0:03:16.919 means that we're not finding that many things we want 0:03:16.919 --> 0:03:18.800 to buy, and we've got the liberty of not having 0:03:18.840 --> 0:03:22.720 to invest if we shouldn't invest. We've got loyal clients 0:03:22.720 --> 0:03:25.280 who's been with us for some time. We were found 0:03:25.280 --> 0:03:29.560 in nineteen eleven, so the clients we have trust us, 0:03:29.639 --> 0:03:31.639 and if we don't want to buy something, we don't 0:03:31.680 --> 0:03:33.959 buy it. So this is more cash and normal. So yes, 0:03:34.080 --> 0:03:37.320 froth he is entirely appropriate term to use at this moment. 0:03:37.360 --> 0:03:39.880 I think what would it take for you to put 0:03:39.920 --> 0:03:43.480 that cash to work? Um, we need to see some 0:03:43.560 --> 0:03:46.600 cheaper valuations at the end of the day. All stocks 0:03:46.720 --> 0:03:50.760 should and usually do, but not always on objective metrics, 0:03:50.800 --> 0:03:54.320 which would be pe ratio. Pe ratios need to come 0:03:54.360 --> 0:03:57.320 down and often enough their aberrations in the stock market 0:03:57.320 --> 0:04:01.680 where individual stocks or individual sectors do become cheap, and 0:04:01.720 --> 0:04:04.160 that's when we're prepared to go ahead and buy. So 0:04:04.200 --> 0:04:06.480 we have the cash, We've got to be ready. Um. 0:04:06.920 --> 0:04:09.840 Another I hate to dwell on old adages but when 0:04:09.880 --> 0:04:11.680 the ducks are quack and you've got to feed them, 0:04:11.720 --> 0:04:14.960 So buyers want to buy, go ahead and sell. What 0:04:15.080 --> 0:04:18.000 are some names right now that you guys do like, 0:04:18.200 --> 0:04:21.840 or you you are doing some work on sure sure, sure, Well, 0:04:21.839 --> 0:04:23.920 there's something that we own and we buy some more 0:04:23.960 --> 0:04:26.440 of if they become a little bit cheaper. One of 0:04:26.480 --> 0:04:29.920 those is e Health. E Health offers Medicare supplement insurance. 0:04:30.560 --> 0:04:33.320 You may have heard their ten thousand plus Americans turning 0:04:34.120 --> 0:04:37.280 each day. Each of these will be entitled to Medicare, 0:04:37.480 --> 0:04:40.200 but they need to get Medicare suppits, which aren't that expensive, 0:04:40.240 --> 0:04:43.240 but they are fairly complicated. So e health is good 0:04:43.279 --> 0:04:47.760 at navigating the waters of explaining complicated terms and complicated 0:04:47.839 --> 0:04:50.359 needs and to make sure that the right package is 0:04:50.360 --> 0:04:54.560 put together for a resonative Texas versus Idaho, and to 0:04:54.600 --> 0:04:56.840 make sure that the doctors that you're comfortable with are 0:04:56.920 --> 0:04:59.160 part of your package. So a little bit complicated, but 0:04:59.200 --> 0:05:01.760 we think it's a relative really cheap stock. And then 0:05:01.839 --> 0:05:04.960 as an added interesting point, there are a couple of 0:05:04.960 --> 0:05:08.359 activist investors who have gotten involved in the company recently, 0:05:08.480 --> 0:05:11.560 so let should make for an interesting a few months ahead. 0:05:12.000 --> 0:05:15.640 What about this payments processor. I see here Pie really 0:05:15.680 --> 0:05:19.719 looking at credit card to Dad and checks right, Pie 0:05:19.800 --> 0:05:23.480 is probably unknown. And again we buy small MidCap stocks, 0:05:23.560 --> 0:05:27.839 we buy relatively unknown companies. UH their top twenty processor 0:05:27.880 --> 0:05:30.159 in the United States, the number six in e commerce. 0:05:30.160 --> 0:05:33.320 They've got a hundred thousand customers, two thousand different partners, 0:05:33.600 --> 0:05:36.800 and they process thirty three billion last year. Now, they 0:05:36.880 --> 0:05:39.080 just make a minimal amount of money on that amount 0:05:39.080 --> 0:05:42.240 that they process last year. But the fact that they're unknown, 0:05:42.400 --> 0:05:46.400 we like the fact that they're very well organized, well managed. 0:05:46.560 --> 0:05:49.320 We'd like we think they can goward something like per year. 0:05:49.560 --> 0:05:51.359 It remains a cheap stock, but it is, you know, 0:05:51.360 --> 0:05:53.000 one of the small cap stocks, so it's not for 0:05:53.080 --> 0:05:56.800 the fearless. There will be some volatility. Hey, George, thanks 0:05:56.839 --> 0:05:59.040 so much for joining us. We really appreciate getting your 0:05:59.080 --> 0:06:01.960 thoughts on the mark markets. End on some names here 0:06:01.960 --> 0:06:03.720 that might be of interest for folks in the small 0:06:03.720 --> 0:06:07.240 to mid capital world. George Young, partner and portfolio manager 0:06:07.360 --> 0:06:11.239 at A Villary and Company and UH interesting fifteen percent cash. 0:06:11.279 --> 0:06:13.480 That's the highest percentage I've heard any you know, money 0:06:13.480 --> 0:06:15.520 manager come on here and talk about But I've increasingly 0:06:15.520 --> 0:06:17.920 heard that that there's been a lot of profit taking 0:06:17.920 --> 0:06:20.000 in the last few weeks, Paul, and you need a 0:06:20.000 --> 0:06:23.520 better entry point. And he mentioned it's hard with valuations 0:06:23.520 --> 0:06:26.440 with stocks and bonds one sixty two, how do you 0:06:26.480 --> 0:06:29.280 buy that after exactly so I'll have to see. But 0:06:29.360 --> 0:06:36.440 fift cash, that's a big allocation. This is Bloomberg. Well, 0:06:36.480 --> 0:06:39.760 several weeks ago President Joe Biden pitched the first major 0:06:39.880 --> 0:06:44.560 set of tax increases since another signs that maybe some 0:06:44.600 --> 0:06:48.440 anxiety is forming within congressional Democrats, not just on the 0:06:48.440 --> 0:06:50.800 Republican side. Let's get the latest on that with Laura Davison. 0:06:50.800 --> 0:06:54.839 She's a congressional tax reporter. Laura, give us a sense 0:06:54.920 --> 0:06:57.960 here of how this is going. I mean, and it's 0:06:58.040 --> 0:07:01.200 kind of tied in with infrastructure, but boy, the discussion 0:07:01.279 --> 0:07:04.440 is really focusing on the tax plan. Where are we 0:07:04.560 --> 0:07:07.400 right now? So what at the point where Biden has 0:07:07.440 --> 0:07:09.800 put out basically his plans and then has kicked them 0:07:09.800 --> 0:07:12.000 over to Congress for them to actually sort of put 0:07:12.280 --> 0:07:14.280 meat on the bones and and write them out in 0:07:14.400 --> 0:07:16.720 legislative language. And this is what's starting to cause the 0:07:16.880 --> 0:07:19.120 angst in Congress because they're looking at sort of the 0:07:19.160 --> 0:07:21.440 outline that the President put out and are then trying 0:07:21.480 --> 0:07:23.040 to figure out how do we make this work. So 0:07:23.080 --> 0:07:25.560 they're going and they're talking with with different members of 0:07:25.560 --> 0:07:28.120 the committee, they're talking with stakeholders, they're holding public hearings, 0:07:28.120 --> 0:07:29.640 and they're asking, you know, what if we did this, 0:07:29.800 --> 0:07:32.120 what if we did that? And some of the ideas 0:07:32.120 --> 0:07:34.320 they're throwing out there would weaken a little bit what 0:07:34.400 --> 0:07:37.240 Biden has proposed. So they're kind of looking at what 0:07:37.440 --> 0:07:40.080 is politically possible, what can get done, and specifically with 0:07:40.160 --> 0:07:43.400 an eye and members like Joe Manson and Kirsten Cinema 0:07:43.720 --> 0:07:45.320 knowing that those are going to be critical votes in 0:07:45.360 --> 0:07:47.080 the Senate. So even in the House where there's a 0:07:47.080 --> 0:07:49.600 broader majority, they still have to to know that that 0:07:49.680 --> 0:07:52.360 there's bigger political realities out there. Yeah, Laura, what do 0:07:52.360 --> 0:07:55.320 you hear about the Republican side. I've heard a few 0:07:55.400 --> 0:07:58.880 different proposals six hundred billion and nine billion or at 0:07:58.880 --> 0:08:01.360 one point seven trillion, and where are we on the 0:08:01.440 --> 0:08:06.920 counter proposals and the realism of that. So infrastructure talks 0:08:07.000 --> 0:08:10.440 really hit a speed bump late last week where Biden 0:08:10.480 --> 0:08:12.560 put out a ac counter proposal at one point seven 0:08:12.600 --> 0:08:15.480 five trillion, down from his original two point to five trillion, 0:08:15.760 --> 0:08:18.440 and Republicans felt like he that he didn't concede enough, 0:08:18.520 --> 0:08:20.680 that there wasn't enough of a back and forth negotiation 0:08:20.760 --> 0:08:22.720 going on. Uh. You know, we're in a kind of 0:08:22.720 --> 0:08:24.720 the last week before Memorial Day, which is kind of 0:08:24.760 --> 0:08:28.200 considered the initial informal deadline to reach some sort of 0:08:28.560 --> 0:08:31.760 uh in you know, high level, top level bipartisan deal. 0:08:32.040 --> 0:08:33.760 It looks like that could slip and we could still 0:08:33.800 --> 0:08:35.400 be be kind of where we are in a couple 0:08:35.400 --> 0:08:37.440 of weeks from now. Biden wants to get a deal, 0:08:37.480 --> 0:08:40.240 but the two sides are really still far apart. So 0:08:40.800 --> 0:08:44.120 or is fiscal stimulus and the tax plan? Are they linked? 0:08:44.200 --> 0:08:47.880 Can one go proceed without the other? Explain to us 0:08:47.880 --> 0:08:51.960 how that's developing. Well, there's many different permutations of what 0:08:52.000 --> 0:08:54.240 could happen here. But the thing to know is if 0:08:54.240 --> 0:08:57.320 there's a bipartisan infrastructure deal, it will not be funded 0:08:57.320 --> 0:09:00.400 by these tax increases that Biden has laid out. Republicans 0:09:00.440 --> 0:09:02.200 have said, look, that's a red line for us. So 0:09:02.200 --> 0:09:05.079 they're looking at other funding mechanisms, whether it's user fees, 0:09:05.120 --> 0:09:08.079 whether it's looking at bonds, whether it's public private partnerships, 0:09:08.080 --> 0:09:10.559 you know, other ways to get money that aren't tax increases. 0:09:10.920 --> 0:09:13.520 But Democrats are either cognizant that one of two things 0:09:13.520 --> 0:09:15.839 will happen if one these bipartisan talks fall apart, and 0:09:15.880 --> 0:09:17.920 then they can move forward with the Democrats only bill, 0:09:17.960 --> 0:09:21.920 which will include bipartisan tax increases, or two they do 0:09:22.000 --> 0:09:23.839 get some sort of smaller, you know, a couple of 0:09:23.880 --> 0:09:27.200 hundred billion dollar infrastructure deal with Republicans, and then they 0:09:27.240 --> 0:09:29.400 go back, uh, and they can do the rest of 0:09:29.400 --> 0:09:32.600 the Biden four trillion dollar agenda, which also would include 0:09:32.679 --> 0:09:35.240 um tax increases. So really kind of no matter what happens, 0:09:35.400 --> 0:09:37.440 tax increases are still on the table. It just depends 0:09:37.480 --> 0:09:40.240 kind of how quickly they move, how much they they'll need, 0:09:40.280 --> 0:09:42.600 and what it will be paying for. Interesting, what is 0:09:42.640 --> 0:09:45.400 the pressure to get it done this year and not 0:09:45.600 --> 0:09:49.640 next year in a midterm election incredibly high. You know, 0:09:49.679 --> 0:09:52.040 basically everyone uh, you know is wanting to get a 0:09:52.080 --> 0:09:54.200 deal done this year. This is sort of informally seen 0:09:54.240 --> 0:09:56.200 as as a deadline, but you know, you could flip 0:09:56.280 --> 0:09:57.959 till you know, January, said the wary. But once you 0:09:58.000 --> 0:10:00.400 start getting to the summer, everyone's in campaign mo and 0:10:00.480 --> 0:10:03.960 passioning attacks increase would be seen that a political big, 0:10:04.080 --> 0:10:07.320 big mistake, Laura. I think about President Biden forty years 0:10:07.320 --> 0:10:09.439 in the Senate branded they were many many years ago, 0:10:09.520 --> 0:10:13.160 and I think Kamala Harris just coming out of the Senate, 0:10:13.840 --> 0:10:17.360 are they gonna have any ability to kind of work 0:10:17.480 --> 0:10:19.880 their magic and trying to get some something through here 0:10:20.000 --> 0:10:23.240 or is it just too much opposition? Um? You know, 0:10:23.280 --> 0:10:25.040 they really hope that they can. This is one of 0:10:25.080 --> 0:10:27.000 the reasons that you know, the Biden you know quote 0:10:27.120 --> 0:10:28.840 campaigned on one of the reasons he picked you know, 0:10:28.880 --> 0:10:31.839 Harris as his VP. But you know, there are really 0:10:32.200 --> 0:10:34.160 you know, just a handful of senators. So it's really 0:10:34.200 --> 0:10:35.480 not looking at you know, how do we get some 0:10:35.679 --> 0:10:37.560 you know, a broad coalition together. It's you know, how 0:10:37.600 --> 0:10:40.200 do we get two or three or four senators who 0:10:40.240 --> 0:10:43.199 are inclined, who have tough reelections ahead of them, who 0:10:43.240 --> 0:10:45.880 have states that you know favored Trump or lean red. 0:10:46.120 --> 0:10:48.000 You know, how do we get them personally on board? 0:10:48.000 --> 0:10:49.760 So that's looking at for you know, mansion, how do 0:10:49.800 --> 0:10:52.640 we get coal miners trained into new jobs? How for cinema? 0:10:52.840 --> 0:10:54.320 You know, how do we sort of moderate some of 0:10:54.360 --> 0:10:57.160 these these tax increases. It's really specific versus a broad 0:10:57.520 --> 0:11:00.360 uh cell on these, Laura, what do you season next steps? 0:11:00.400 --> 0:11:02.160 What can we look forward to? You mention, we're coming 0:11:02.240 --> 0:11:05.120 up on Memorial Day, when could we start to see 0:11:05.200 --> 0:11:10.720 a re uh invigoration perhaps of some of these discussions. 0:11:11.400 --> 0:11:13.720 I expect we'll see some back and forth between Republicans 0:11:13.720 --> 0:11:16.080 and Democrats this week, uh, you know, on if there's 0:11:16.120 --> 0:11:18.319 a still momentum behind a deal or if these talks 0:11:18.360 --> 0:11:20.640 just fall apart. That is also a possibility this year. 0:11:20.840 --> 0:11:23.280 We're also waiting to see um from the Senate parliamentarian 0:11:23.320 --> 0:11:26.320 who will basically rule about you know, how Democrats could 0:11:26.320 --> 0:11:28.400 proceed with it with a partisan bill on their end. 0:11:28.640 --> 0:11:30.520 Those will be kind of a key point to watch for, 0:11:30.880 --> 0:11:32.880 if not this week, next week, and then that will 0:11:32.880 --> 0:11:34.920 really set the course for what the summer rentfall looks like. 0:11:36.440 --> 0:11:39.040 What else is Congress working on? Me? It's kind of 0:11:39.080 --> 0:11:41.720 all we hear about is the infrastructure and taxes, not 0:11:41.760 --> 0:11:45.400 that they're not huge issues, but your Congressional report, are 0:11:45.400 --> 0:11:47.000 there other little things going on that we should be 0:11:47.000 --> 0:11:50.400 paying attention to. There are other little things going there, 0:11:50.200 --> 0:11:51.840 and there's a lot of talk right now, and this 0:11:51.960 --> 0:11:54.400 is really playing the part of intentions in Congress. Is 0:11:54.440 --> 0:11:57.520 this um doing a commission to investigate the January six 0:11:57.559 --> 0:12:00.840 attack on the Capitol. That's narrowly passed the House last week. 0:12:01.040 --> 0:12:03.720 The Senate is set to pick this up, but Republicans, 0:12:03.800 --> 0:12:06.240 even who initially said they were on board for supporting US, 0:12:06.320 --> 0:12:09.360 have have since backed away. Um. This is really setting 0:12:09.400 --> 0:12:11.160 up a lot of ill will between the two parties 0:12:11.160 --> 0:12:13.880 and does bode well for doing something on a bipartisan 0:12:13.880 --> 0:12:16.920 basis when it comes to economic policy. All right, Lauren, 0:12:16.960 --> 0:12:19.320 thank you so much. We appreciate that getting the update 0:12:19.440 --> 0:12:21.800 on all things happening in Washington. And we can do 0:12:21.840 --> 0:12:24.440 that because we have a reporter who focuses on congressional 0:12:24.480 --> 0:12:26.480 tax issues. I mean, nobody else has that. I can 0:12:26.559 --> 0:12:30.120 imagine Laura Davison, congressional tax reporter for Bloomberg News. And 0:12:30.440 --> 0:12:33.679 again it seems like, UM, it's going to be very 0:12:33.679 --> 0:12:36.640 difficult for President um Biden from what we're hearing from 0:12:36.679 --> 0:12:39.800 the reporting, UH, to get what he wants here. I'm 0:12:39.840 --> 0:12:42.280 just gonna have to be a significant compromise. And you 0:12:42.320 --> 0:12:44.760 think about it, you know, it's the first major set 0:12:44.800 --> 0:12:48.160 of tax increases since three That tells you something about 0:12:48.200 --> 0:12:52.719 how difficult, UH, it is to raise taxes for administration. 0:12:55.040 --> 0:12:56.559 I want to bring in Shannan the Basket. She's a 0:12:56.600 --> 0:12:59.520 Wall Street reporter for Bloomberg News. She joins US Live, 0:12:59.679 --> 0:13:03.640 I Live and the Bloomberg Interactive Brokers Studio. Great to 0:13:03.679 --> 0:13:07.600 have everybody back together again, Sonalie, let's talk spacks here again. 0:13:07.679 --> 0:13:09.840 You know, I mentioned earlier that Dave Wilson would come 0:13:09.840 --> 0:13:11.719 in every day for stock reports and have to talk 0:13:11.760 --> 0:13:14.520 about three or four spacks coming public and things like that. 0:13:14.720 --> 0:13:17.120 It's kind of petered out a little bit. But they're 0:13:17.160 --> 0:13:19.439 still out there, aren't they. And they're still doing deals. 0:13:19.480 --> 0:13:21.840 They're certainly still out there, and there is still a 0:13:21.920 --> 0:13:24.960 hope that once the rules get clarified, that they'll come 0:13:25.000 --> 0:13:27.000 back yet again and they'll be a great way for 0:13:27.040 --> 0:13:29.680 people to go public. But right now there are a 0:13:29.679 --> 0:13:33.600 lot of questions around how investors are paid in SPACs, uh, 0:13:33.800 --> 0:13:36.880 the performance of them, and then also all of the 0:13:36.920 --> 0:13:40.600 disclosures that come around spacks. For new people to really 0:13:40.640 --> 0:13:43.880 start investing in these companies that are really that are 0:13:43.880 --> 0:13:47.360 really young, right that they're really not mature companies that 0:13:47.520 --> 0:13:50.400 are surefire things to succeed in public markets. Is there 0:13:50.440 --> 0:13:53.600 a sense that the performance will turn around? Was the 0:13:53.640 --> 0:13:56.400 shakeout of some of the big high flyers that seemed 0:13:56.440 --> 0:13:59.760 to break down was that, as Paul had said earlier, 0:14:00.120 --> 0:14:05.240 healthy correction or indicative of something more sinister that we 0:14:05.320 --> 0:14:07.960 haven't been understanding the way these works. What I can 0:14:08.000 --> 0:14:10.640 give you, Taylor, is the view from investment bankers. Right. 0:14:10.679 --> 0:14:12.880 So from investmentkers point of view, it is good that 0:14:12.960 --> 0:14:16.560 the market has cooled down. Why because it was probably overheated. 0:14:16.760 --> 0:14:19.840 Companies that shouldn't have gone public have been going public. 0:14:20.400 --> 0:14:23.240 That brings down the average overall when it comes to performance, 0:14:23.520 --> 0:14:26.040 and so it cooling down is not a bad thing. 0:14:26.400 --> 0:14:29.160 So what's happening in Congress today there's actually something kind 0:14:29.160 --> 0:14:32.280 of tangible here. They're really looking to rewrite the rules 0:14:33.040 --> 0:14:39.000 regarding to the Securities Act of Exchange Act to add 0:14:39.240 --> 0:14:43.200 SPACs when it comes to forwardlooking statements in terms of 0:14:43.200 --> 0:14:46.080 their financial performance. So what they're really trying to do 0:14:46.200 --> 0:14:49.200 is rewrite the rules here to make it easier for 0:14:49.400 --> 0:14:52.360 the investor to know how well that company will do 0:14:52.640 --> 0:14:54.840 when it goes public. All right, But the spects that 0:14:54.880 --> 0:14:56.800 are still out there, they're out there and they're still 0:14:56.840 --> 0:15:00.160 able to do deals. Right, Yes, But the sec which 0:15:00.200 --> 0:15:02.720 is another kind of aspect of this today's Congress, we're 0:15:02.720 --> 0:15:05.200 looking at the security is an exchange commission is looking 0:15:05.200 --> 0:15:07.880 at all those backs and saying, okay, wait a minute, 0:15:07.960 --> 0:15:11.360 maybe we really need to treat you differently in terms 0:15:11.400 --> 0:15:14.560 of how you've already been doing your accounting. So that 0:15:14.720 --> 0:15:17.560 is also spooking some people, Right, what does that mean 0:15:17.680 --> 0:15:20.320 for the supply side? As I think Paul was alluding to, 0:15:20.680 --> 0:15:24.800 of you create this regulatory overhang. Now, not anyone can 0:15:24.840 --> 0:15:27.440 come as off the wild West anymore. So if you 0:15:27.440 --> 0:15:29.880 have skeletons in your closet, you're not going to want 0:15:29.880 --> 0:15:32.760 to do us back that. If that is the that 0:15:32.880 --> 0:15:35.920 is the bottom line. If you have financial performance that's iffy, 0:15:36.360 --> 0:15:38.520 or if you think you're making statements that are probably 0:15:38.560 --> 0:15:41.800 a little too rosy, Uh, everybody's got an eye on you, 0:15:41.880 --> 0:15:44.920 from lawmakers to the SEC. So you're probably gonna want 0:15:44.960 --> 0:15:47.640 to not go public that way. Yeah. But but we 0:15:47.680 --> 0:15:49.680 still have a whole bunch of these SPACs out there, 0:15:49.680 --> 0:15:52.200 and they're all sitting there with dry powder, and uh, 0:15:52.320 --> 0:15:53.680 you know, I guess it was when I guess we 0:15:53.720 --> 0:15:56.880 saw some of these celebrities and athletes started and it 0:15:56.880 --> 0:15:59.400 seemed like they were just lending their name to these 0:15:59.400 --> 0:16:01.720 SPACs maybe create some interest. Maybe on the first day 0:16:01.720 --> 0:16:04.400 of trading get a pop, and I suspect that might 0:16:04.400 --> 0:16:07.920 have been one of the things I got regulators attention. Well, yes, 0:16:07.960 --> 0:16:09.400 and and that's certainly true. But let me give you 0:16:09.400 --> 0:16:11.040 the flip side of this too, And this is why 0:16:11.080 --> 0:16:12.920 I think there will be a tone down, but not 0:16:13.000 --> 0:16:16.840 a complete clampdown. All these famous people are investing in 0:16:16.880 --> 0:16:19.120 pre i p O stocks anyways, These folks are all 0:16:19.200 --> 0:16:22.360 already investing in high flying unicorns or starting their own. 0:16:22.400 --> 0:16:24.920 Think Jessica Albert. Today we wrote a story about Leonardo 0:16:24.960 --> 0:16:27.920 DiCaprio and Orlando Bloom. What's going on there? Oh, they're 0:16:27.960 --> 0:16:31.040 they're backing this financial technology company and Neil Bank called 0:16:31.040 --> 0:16:34.000 Aspiration that is looking to go public either through an 0:16:34.000 --> 0:16:35.640 I p O R is that's a long story. Short 0:16:35.680 --> 0:16:38.000 is they're already in the venture market. SPACs are another 0:16:38.080 --> 0:16:40.800 form of venture capital. Yeah, what is the new cool way? Now? 0:16:41.000 --> 0:16:43.120 Do we go back to direct listings, we go back 0:16:43.120 --> 0:16:45.720 to traditional IPO s? Did totally last week? Do an 0:16:45.720 --> 0:16:48.600 I p O That was one that we've been following exactly, 0:16:48.640 --> 0:16:50.440 And so to your point, I p O s are 0:16:50.440 --> 0:16:52.640 still the hottest game in town. There's still tons of 0:16:52.680 --> 0:16:55.320 I p o s even though we were talking about SPACs. Uh, 0:16:55.360 --> 0:16:58.000 there were you know, more than twice the average of 0:16:58.040 --> 0:17:00.520 the last ten years going public and last year all alone. 0:17:00.960 --> 0:17:03.720 So this is good. Why is this good? Because before 0:17:04.160 --> 0:17:07.160 we saw so many companies like Uber for example, wait 0:17:07.200 --> 0:17:09.000 forever to go public, and then by the time a 0:17:09.040 --> 0:17:12.840 retail investor gets involved, it's very late in the game. 0:17:12.920 --> 0:17:15.320 So shouldn't they have the opportunity to invest in more 0:17:15.359 --> 0:17:18.760 young companies? The question is how young? And the question 0:17:19.000 --> 0:17:22.680 is what kind of information doesn't investor need to have 0:17:22.960 --> 0:17:25.040 to make an informed decision about that company? Yeah, you can. 0:17:25.119 --> 0:17:28.600 You compare the disclosure from a SPACK to the disclosure 0:17:28.640 --> 0:17:30.200 for an I p O. And when I was writing 0:17:30.240 --> 0:17:32.719 up I peer perspectives is they were about you know, 0:17:33.359 --> 0:17:36.000 half an inch thick, you know, because I just said 0:17:36.000 --> 0:17:37.679 to the printers all night and make sure you know 0:17:38.520 --> 0:17:41.159 everything was perfect. Now they're you know, three or four inches. 0:17:41.400 --> 0:17:43.919 You get all the disclosures for a company to go 0:17:44.000 --> 0:17:46.719 public VI an I p O. It makes SPACs and 0:17:47.119 --> 0:17:49.760 direct listings maybe at from at least from that perspective, 0:17:49.800 --> 0:17:52.240 a little bit more attractive let's just do a one 0:17:52.240 --> 0:17:54.320 on one here. You everyone should be picking up. If 0:17:54.359 --> 0:17:56.320 you're going to invest, if you're a retail investor, you 0:17:56.359 --> 0:17:58.600 want to invest in I p O. They're hot right now, 0:17:58.920 --> 0:18:02.440 go to the risk back, go to the risk factors, 0:18:02.760 --> 0:18:05.639 and go to the financial analysis and see if that 0:18:05.720 --> 0:18:08.359 company is actually doing any well. I think that one 0:18:08.400 --> 0:18:11.480 of the earliest piece of advices I got from a 0:18:11.520 --> 0:18:13.359 really good investor back in the day was when you 0:18:13.400 --> 0:18:16.119 get a prospectus, the first place you go to is 0:18:16.200 --> 0:18:20.120 related transactions. That's a good one. Risk factors have gotten 0:18:20.160 --> 0:18:23.680 so boiler plate the related transactions and and now they're 0:18:23.760 --> 0:18:26.160 fifty pages long. You know, we may have a pandemic, 0:18:26.240 --> 0:18:27.800 you know that kind of stuff. But you go to 0:18:27.800 --> 0:18:30.080 the related transactions, and that where you get to see 0:18:30.080 --> 0:18:33.240 some if there's anything funky in terms of, oh, we're 0:18:33.280 --> 0:18:35.960 paying this person, this company, this company that, and there's 0:18:36.359 --> 0:18:40.320 these off the balance sheet uh or kind of transactions. 0:18:40.320 --> 0:18:41.840 That's where they pop up. So anyway, that's just a 0:18:41.840 --> 0:18:46.080 little uh lesson learned. I guess Shanali Bastk thank you 0:18:46.160 --> 0:18:49.080 so much. We appreciated getting all things Wall Street. We're 0:18:49.080 --> 0:18:52.520 talking about SPACs today. Congress is holding a hearing on spacks. 0:18:52.560 --> 0:18:58.600 Things might be changing in that market. Looking on my 0:18:58.840 --> 0:19:02.400 g LC go that's the Global Commodities page. It brings 0:19:02.520 --> 0:19:04.840 up everything you need to know about commodities pricing. I 0:19:04.880 --> 0:19:07.520 look at the metals here, I see double digit gains 0:19:07.520 --> 0:19:11.240 and most of the metals, with one notable exception spot gold, 0:19:11.400 --> 0:19:13.280 kind of flat on the year. Let's break it all 0:19:13.320 --> 0:19:15.919 down as we talk precious metals. We do that with 0:19:15.960 --> 0:19:19.680 Everett Millman. He's precious metal specialist at Gainesville Coins. Every 0:19:19.720 --> 0:19:21.560