1 00:00:12,560 --> 00:00:15,760 Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast. 2 00:00:15,880 --> 00:00:17,880 Speaker 1: My name is Mike Reagan. I'm a senior editor at 3 00:00:17,880 --> 00:00:21,599 Speaker 1: Bloomberg and umbled on a higher across asset reported Bloomberg 4 00:00:22,200 --> 00:00:25,360 Speaker 1: this week on the show. Well, as Yogi Barrow once said, 5 00:00:25,640 --> 00:00:29,639 Speaker 1: it's tough to make predictions, especially about the future. That's 6 00:00:29,640 --> 00:00:31,920 Speaker 1: the quote that leads a research report from this week's 7 00:00:31,920 --> 00:00:34,360 Speaker 1: guest on what he and his team expected the markets 8 00:00:34,400 --> 00:00:37,560 Speaker 1: in two And you know what, We're actually gonna listen 9 00:00:37,560 --> 00:00:39,560 Speaker 1: to him and maybe even let him gloat a little 10 00:00:39,600 --> 00:00:43,680 Speaker 1: bit since his predictions for last year were pretty good. Well, Bill, 11 00:00:43,720 --> 00:00:46,440 Speaker 1: do I have to define pretty good in the world 12 00:00:46,520 --> 00:00:49,440 Speaker 1: of predictions? And you know it's gonna sound a little 13 00:00:49,440 --> 00:00:52,440 Speaker 1: bit like I sounded, you know, explaining my report card 14 00:00:52,440 --> 00:00:54,880 Speaker 1: to my dad in college, that that it's it's better 15 00:00:54,920 --> 00:00:57,480 Speaker 1: than it sounds. You know this this was a semester 16 00:00:57,520 --> 00:01:00,880 Speaker 1: where the Grateful Dead had six tour stop within driving 17 00:01:00,880 --> 00:01:03,240 Speaker 1: distance of campus. You gotta you gotta grade me on 18 00:01:03,280 --> 00:01:07,800 Speaker 1: the curve here, But on his predictions, uh, is really 19 00:01:07,840 --> 00:01:10,560 Speaker 1: pretty good. I mean, I'll compare that to our own 20 00:01:10,560 --> 00:01:13,720 Speaker 1: Cameron Chris, I think, one of our most respected columnists 21 00:01:13,720 --> 00:01:17,000 Speaker 1: who grades his predictions every year as well. He was 22 00:01:17,040 --> 00:01:20,480 Speaker 1: seventy as well. Um, he said, that's the best he's 23 00:01:20,520 --> 00:01:23,360 Speaker 1: ever been in making predictions. And that's a guy who 24 00:01:23,440 --> 00:01:26,640 Speaker 1: had like a perfect s a T math score. Um, 25 00:01:26,680 --> 00:01:29,960 Speaker 1: I think anything about fifty is in a in the 26 00:01:29,959 --> 00:01:32,080 Speaker 1: predictions game, Buil Dona, what do you think in the 27 00:01:32,160 --> 00:01:35,400 Speaker 1: predictions game? Probably not for when you're in high school. 28 00:01:35,440 --> 00:01:38,840 Speaker 1: That's like not that good, I would say, But sevent 29 00:01:39,800 --> 00:01:42,480 Speaker 1: when I read that, I also was impressed because last 30 00:01:42,520 --> 00:01:45,280 Speaker 1: year was, as you know, so hard to predict given 31 00:01:45,360 --> 00:01:48,320 Speaker 1: everything that was going on. But so, speaking of our guest, 32 00:01:48,680 --> 00:01:51,080 Speaker 1: I want to introduce Chris Harvey. He's the head of 33 00:01:51,120 --> 00:01:53,760 Speaker 1: equity strategy at Wells Fargo, and Chris, I want to 34 00:01:53,800 --> 00:01:56,240 Speaker 1: welcome you back to the show. Then thank you and 35 00:01:56,520 --> 00:01:59,360 Speaker 1: happy New Year and Chris, before we get to the 36 00:01:59,360 --> 00:02:02,440 Speaker 1: predictions and the way, everyone, I'm I'm I'm recording this 37 00:02:02,480 --> 00:02:05,080 Speaker 1: podcast in my bathroom with a blanket over my head 38 00:02:05,320 --> 00:02:09,800 Speaker 1: for very complicated reasons involving a gas Maine replacement on 39 00:02:09,840 --> 00:02:12,160 Speaker 1: my streets. So if you hear Vildana and Chris just 40 00:02:12,240 --> 00:02:15,280 Speaker 1: first out laughing that that's that's the reason why most 41 00:02:15,320 --> 00:02:20,040 Speaker 1: likely it's quite a spectacle to see something. This is 42 00:02:20,080 --> 00:02:23,440 Speaker 1: a new I've I've you know, I'm no stranger to humiliation, 43 00:02:23,480 --> 00:02:25,679 Speaker 1: but I gotta say this, this is uh, this is 44 00:02:25,720 --> 00:02:28,119 Speaker 1: a high high water mark for me, or maybe low 45 00:02:28,120 --> 00:02:30,760 Speaker 1: water mark. I don't know. But but Chris, I want 46 00:02:30,800 --> 00:02:33,919 Speaker 1: to unpack some of your predictions for two. But I 47 00:02:33,960 --> 00:02:37,720 Speaker 1: want to talk first about the f OMC minutes that 48 00:02:37,800 --> 00:02:40,120 Speaker 1: came out this week. Uh. You know, we're recording this 49 00:02:40,160 --> 00:02:43,880 Speaker 1: podcast on Wednesday, about an hour after the minutes at 50 00:02:43,880 --> 00:02:47,040 Speaker 1: the tape, and we kind of a nasty reaction, you know. 51 00:02:47,080 --> 00:02:50,520 Speaker 1: The tone of it seems to be that not only 52 00:02:50,960 --> 00:02:54,400 Speaker 1: will the rate hikes come a little earlier than people 53 00:02:54,440 --> 00:02:57,520 Speaker 1: were expecting, but also I think the bigger surprise that 54 00:02:57,639 --> 00:03:00,440 Speaker 1: the Fed sounds like they're they're gonna want to wind 55 00:03:00,480 --> 00:03:03,560 Speaker 1: down their balance sheet, let their balance sheet reduce a 56 00:03:03,560 --> 00:03:06,679 Speaker 1: little bit, uh, you know, rather than reinvesting proceeds of 57 00:03:06,960 --> 00:03:09,480 Speaker 1: their holdings like they have in the past. What's your 58 00:03:09,520 --> 00:03:11,920 Speaker 1: takeaway from the minutes? Is this um? Is this a 59 00:03:11,919 --> 00:03:14,000 Speaker 1: reasonable reaction to the market. You know, last time I 60 00:03:14,000 --> 00:03:17,040 Speaker 1: looked SMP down more than one percent in the minutes 61 00:03:17,080 --> 00:03:20,680 Speaker 1: after after the moments after the minutes, and you know, 62 00:03:21,000 --> 00:03:23,920 Speaker 1: NAVSTAC was already getting hurt there down composite down a 63 00:03:24,000 --> 00:03:26,040 Speaker 1: two and a half percent. I think is this a 64 00:03:26,160 --> 00:03:29,359 Speaker 1: rational reaction or what do you think? Like? I think 65 00:03:29,400 --> 00:03:32,239 Speaker 1: it's a reasonable reaction. So there's a couple of things 66 00:03:32,240 --> 00:03:35,400 Speaker 1: that take away. For a while, people have been questioning 67 00:03:35,400 --> 00:03:38,840 Speaker 1: whether the FED had had to wherewithal the will to 68 00:03:38,840 --> 00:03:42,520 Speaker 1: to fight inflation. There's talk about transitory for for some 69 00:03:42,560 --> 00:03:44,960 Speaker 1: period of time, actually too long a period of time. 70 00:03:45,480 --> 00:03:48,240 Speaker 1: Powell recently retired that phrase or said he was going 71 00:03:48,280 --> 00:03:50,200 Speaker 1: to retire that phrase. And then when you listen to 72 00:03:50,200 --> 00:03:53,440 Speaker 1: the minutes, they mean business. And I think people are 73 00:03:53,480 --> 00:03:56,640 Speaker 1: finally realizing that the FED will need will do what 74 00:03:56,680 --> 00:03:59,800 Speaker 1: they need to do to fight inflation. And that's troubling. 75 00:03:59,840 --> 00:04:03,280 Speaker 1: But more importantly, what's really happening underneath the surface and 76 00:04:03,320 --> 00:04:06,360 Speaker 1: behind the scenes real rates. You have to keep a 77 00:04:06,520 --> 00:04:09,480 Speaker 1: very very sharp eye on real rates. If you look 78 00:04:09,520 --> 00:04:11,800 Speaker 1: at ten year real rates, they're up almost twenty five 79 00:04:11,840 --> 00:04:14,400 Speaker 1: basis points from the start of the year. What we've 80 00:04:14,400 --> 00:04:16,440 Speaker 1: been saying to clients and what we've noticed all of 81 00:04:16,520 --> 00:04:20,080 Speaker 1: last year is as real rates go, much of the 82 00:04:20,120 --> 00:04:22,960 Speaker 1: relative price in the achary market goes, so real rates 83 00:04:23,000 --> 00:04:25,839 Speaker 1: go up, that cyclical trade works, real rates go down, 84 00:04:26,200 --> 00:04:29,040 Speaker 1: and that long duration or that tech growth trade works. 85 00:04:29,240 --> 00:04:31,640 Speaker 1: And what's happening right now is real rates are going higher. 86 00:04:32,040 --> 00:04:34,400 Speaker 1: Tech in high growth of rolling over. That's a big 87 00:04:34,440 --> 00:04:37,120 Speaker 1: part of the market. And so we were down earlier 88 00:04:37,160 --> 00:04:40,839 Speaker 1: today this is just an acceleration. Is it the right magnitude? 89 00:04:41,200 --> 00:04:44,120 Speaker 1: I think it's reasonable. Yeah. You know what's such truing 90 00:04:44,240 --> 00:04:46,120 Speaker 1: to me is you know, we got this today on Wednesday. 91 00:04:46,120 --> 00:04:48,960 Speaker 1: On on Tuesday, we got that blog post from Neil 92 00:04:49,000 --> 00:04:51,919 Speaker 1: Cash carry uh long considered sort of the biggest of 93 00:04:52,560 --> 00:04:55,640 Speaker 1: in the FED, not a voter this year, but even 94 00:04:55,760 --> 00:05:00,479 Speaker 1: him expecting two hikes in two I guess that's got 95 00:05:00,480 --> 00:05:02,920 Speaker 1: to be kind of the floor of of expectations. Now. 96 00:05:02,920 --> 00:05:05,080 Speaker 1: You know, the market was pricing into maybe three. But 97 00:05:05,440 --> 00:05:08,160 Speaker 1: I think when even the dovish, most dovish member of 98 00:05:08,200 --> 00:05:11,640 Speaker 1: the FED is expecting to that boy that it's a 99 00:05:11,640 --> 00:05:14,480 Speaker 1: bit of a cold water in the face to some degree. Yeah, 100 00:05:15,000 --> 00:05:17,440 Speaker 1: I think that's right. And what I also think is 101 00:05:17,760 --> 00:05:19,360 Speaker 1: I was a little dump fout last year, was a 102 00:05:19,360 --> 00:05:22,280 Speaker 1: little dunk bounded because we were looking and we're listening 103 00:05:22,279 --> 00:05:25,080 Speaker 1: to transcripts, we're looking at pricing. I had never seen 104 00:05:25,480 --> 00:05:28,400 Speaker 1: in in my two decades and more than two decades 105 00:05:28,440 --> 00:05:31,920 Speaker 1: on Wall Street this kind of pricing environment. At one 106 00:05:31,960 --> 00:05:34,080 Speaker 1: time I had asked one of my associates, Hey, give 107 00:05:34,120 --> 00:05:36,120 Speaker 1: me a handful of stocks that are raising price. He said, 108 00:05:36,279 --> 00:05:38,520 Speaker 1: just pick any three, And at the end of the 109 00:05:38,640 --> 00:05:41,359 Speaker 1: day I was surprised that it's taken this long for 110 00:05:41,400 --> 00:05:43,880 Speaker 1: the FED to react. But now the FED is reacting 111 00:05:44,080 --> 00:05:47,080 Speaker 1: and you're seeing break evens and you're seeing inflation expectations 112 00:05:47,080 --> 00:05:49,280 Speaker 1: come down. The other thing that I think is also 113 00:05:49,320 --> 00:05:52,160 Speaker 1: happening is there was a lot of talk about stack 114 00:05:52,160 --> 00:05:55,800 Speaker 1: inflation two three, four months ago. Well you have to 115 00:05:55,839 --> 00:05:59,479 Speaker 1: take stackflation off the table because the FED is fighting inflation. 116 00:05:59,600 --> 00:06:02,880 Speaker 1: The other thing that's happening is we have February first 117 00:06:02,960 --> 00:06:06,119 Speaker 1: coming up. February first is Chinese kicks off Chinese New Years. 118 00:06:06,279 --> 00:06:08,800 Speaker 1: That's when goods start to slow into the US. Not 119 00:06:08,839 --> 00:06:11,240 Speaker 1: saying that supply chain is going to be fixed, but 120 00:06:11,400 --> 00:06:13,560 Speaker 1: really what the market is latching onto, or what we 121 00:06:13,560 --> 00:06:16,920 Speaker 1: think it will last onto, is have we seen peak 122 00:06:16,960 --> 00:06:20,120 Speaker 1: pressure or peak congestion? Are we going to be able 123 00:06:20,160 --> 00:06:22,360 Speaker 1: to get rid of some of those logger heads? Will 124 00:06:22,400 --> 00:06:24,560 Speaker 1: we be able to make some improvements and if so, 125 00:06:25,279 --> 00:06:28,640 Speaker 1: that's really important because that has significant ramifications for pricing, 126 00:06:29,040 --> 00:06:33,520 Speaker 1: multiples and margins. So, Chris, speaking of all of these 127 00:06:33,560 --> 00:06:36,680 Speaker 1: expectations and everything that's coming up, you and your team 128 00:06:36,800 --> 00:06:40,760 Speaker 1: come out with price targets for the SMP five Mike 129 00:06:40,839 --> 00:06:43,920 Speaker 1: mentioned in your intro years was spot on for last year. 130 00:06:44,040 --> 00:06:46,680 Speaker 1: So I'm hoping you can sort of walk us through 131 00:06:46,880 --> 00:06:51,040 Speaker 1: your calls for and all of the factors behind it 132 00:06:51,080 --> 00:06:53,680 Speaker 1: and what you're thinking is behind your price target and 133 00:06:53,760 --> 00:06:57,080 Speaker 1: anything else you see coming up. Sure, sir, certainly. Maybe 134 00:06:57,120 --> 00:07:00,480 Speaker 1: I'll just give you the big picture overview. One of 135 00:07:00,520 --> 00:07:02,680 Speaker 1: the things we've been saying is this year, as you 136 00:07:02,800 --> 00:07:07,120 Speaker 1: roll into it's really about risk first and return second. 137 00:07:07,520 --> 00:07:11,000 Speaker 1: When you're looking at a peakish multiples on top of 138 00:07:11,000 --> 00:07:15,040 Speaker 1: peakish growth, that's not a really bullish scenario. In addition 139 00:07:15,080 --> 00:07:18,480 Speaker 1: to that, growth is decelerating, whether you're looking at us 140 00:07:18,560 --> 00:07:21,560 Speaker 1: GDP or whether you're looking at earning. His growth fed 141 00:07:21,920 --> 00:07:24,720 Speaker 1: as we now are are very aware of, is going 142 00:07:24,760 --> 00:07:27,560 Speaker 1: to become more aggressive and accommodations coming off the table. 143 00:07:27,920 --> 00:07:31,240 Speaker 1: We're lapping some very difficult comps and we may be 144 00:07:31,440 --> 00:07:35,040 Speaker 1: hitting peak pricing and again peak margins, which which would 145 00:07:35,080 --> 00:07:37,760 Speaker 1: put pressure downward on multiples. So we've talked about a 146 00:07:37,800 --> 00:07:40,280 Speaker 1: temperacent sell off. We've talked about up and quality, down 147 00:07:40,280 --> 00:07:43,880 Speaker 1: and risk. We've talked about margins multiples. Where would you 148 00:07:43,920 --> 00:07:46,440 Speaker 1: like to start? Well, well, Chris Love, I'll start here. 149 00:07:46,440 --> 00:07:48,760 Speaker 1: You know, I'm I'm just a guy sitting in his 150 00:07:48,760 --> 00:07:51,240 Speaker 1: bathroom with a blanket over said, so, you know, far 151 00:07:51,320 --> 00:07:53,680 Speaker 1: be it for me to say. But I would also 152 00:07:53,720 --> 00:07:57,040 Speaker 1: great predictions on sort of the boldness of predictions. And 153 00:07:57,040 --> 00:08:00,520 Speaker 1: I want to start with your prediction temper cent correction 154 00:08:00,800 --> 00:08:04,200 Speaker 1: by summertime. Now, in most years, I think if you 155 00:08:04,240 --> 00:08:06,320 Speaker 1: took any average years and made that prediction at the 156 00:08:06,360 --> 00:08:08,840 Speaker 1: beginning of it, it's perhaps not that bold, you know. 157 00:08:08,920 --> 00:08:11,280 Speaker 1: It's something that tends to happen I think more than 158 00:08:11,320 --> 00:08:13,960 Speaker 1: half the time in most years, if if I'm correct, 159 00:08:14,000 --> 00:08:17,120 Speaker 1: But it certainly feels like a very bold predict prediction 160 00:08:17,400 --> 00:08:20,440 Speaker 1: these days, given the fact that boy, it's been so 161 00:08:20,480 --> 00:08:23,800 Speaker 1: long since we've had a real teen percent prediction correction 162 00:08:24,160 --> 00:08:27,080 Speaker 1: in the market. They seem to have gone extinct, you know, 163 00:08:27,160 --> 00:08:31,280 Speaker 1: But it is walks through You're thinking about why, uh, 164 00:08:31,840 --> 00:08:34,439 Speaker 1: we're likely to see one by summertime, And I'm assuming 165 00:08:34,440 --> 00:08:37,079 Speaker 1: the FED plays a role to some degree, but uh, 166 00:08:37,360 --> 00:08:39,800 Speaker 1: you know what makes you confident enough to make that 167 00:08:39,840 --> 00:08:43,240 Speaker 1: you're sort of your first prediction for yea. So a 168 00:08:43,280 --> 00:08:45,520 Speaker 1: couple of things. First, let me say, you're really pulling 169 00:08:45,559 --> 00:08:48,920 Speaker 1: this blanket thing off very very well. It's it's people. 170 00:08:50,520 --> 00:08:53,480 Speaker 1: It's impressive, it's really impressive. A lot of guys would 171 00:08:53,480 --> 00:08:57,800 Speaker 1: have turned their video off. But but now back to 172 00:08:57,840 --> 00:09:01,040 Speaker 1: our show ten percent pullback. Uh, there's a couple of 173 00:09:01,040 --> 00:09:04,600 Speaker 1: things there, and I'm gonna be scattered, I'll be all 174 00:09:04,600 --> 00:09:06,280 Speaker 1: over the place. But I want to bring you back 175 00:09:06,280 --> 00:09:09,280 Speaker 1: to the late nineties, early two thousand's, late nineties, early 176 00:09:09,320 --> 00:09:11,600 Speaker 1: two thousand's, Mike, you probably remember this. There's a company 177 00:09:11,600 --> 00:09:14,320 Speaker 1: called c mg I. C mg I had the naming 178 00:09:14,440 --> 00:09:16,880 Speaker 1: rights to Fox Burger Stadium in two thousand. Stock was 179 00:09:16,920 --> 00:09:19,480 Speaker 1: one sixty at that point in time. I believe in 180 00:09:19,480 --> 00:09:22,360 Speaker 1: two thousand and two the stock was sixty sixty cents 181 00:09:22,520 --> 00:09:25,080 Speaker 1: and they gave back the naming rights. What just happened 182 00:09:25,120 --> 00:09:28,360 Speaker 1: at the Staples Center Crypto dot com no longer the 183 00:09:28,360 --> 00:09:31,760 Speaker 1: Staples Center Crypto dot com. Gosh, that's really familiar. Right. 184 00:09:32,040 --> 00:09:34,080 Speaker 1: There is a whether it's the Matt and curse or 185 00:09:34,080 --> 00:09:37,360 Speaker 1: whether it's the stadium curse, it's telling you we're getting 186 00:09:37,400 --> 00:09:40,120 Speaker 1: close to the top in times of fraud. Those are 187 00:09:40,200 --> 00:09:42,720 Speaker 1: those are signs that we use and we look at right. 188 00:09:43,120 --> 00:09:45,360 Speaker 1: The the other thing that we say, we talked about 189 00:09:45,360 --> 00:09:48,040 Speaker 1: a lot, and you're also absolutely repositively right. This ten 190 00:09:48,080 --> 00:09:50,600 Speaker 1: percent correction in normal times not a big boat call, 191 00:09:50,960 --> 00:09:53,760 Speaker 1: but here, since we haven't had a correction a long time, 192 00:09:54,400 --> 00:09:57,120 Speaker 1: it is a much bigger boulder call. And that gets 193 00:09:57,160 --> 00:10:00,760 Speaker 1: to the second point. The second point is there's pervasive 194 00:10:00,760 --> 00:10:03,760 Speaker 1: belief that the market can bend but not break right. 195 00:10:03,840 --> 00:10:06,720 Speaker 1: Market can go down five percent, we can break through 196 00:10:06,720 --> 00:10:08,679 Speaker 1: the fifty day, we can break through, we can hit 197 00:10:08,720 --> 00:10:12,520 Speaker 1: the hundred day, but we really can't collapse. Well, again, 198 00:10:12,640 --> 00:10:15,040 Speaker 1: we're in the second year recovery. Typically in a second 199 00:10:15,120 --> 00:10:17,679 Speaker 1: year recovery you have multiple compression and you have a 200 00:10:17,720 --> 00:10:21,240 Speaker 1: lot of other interesting things happening. What you have is 201 00:10:21,320 --> 00:10:24,120 Speaker 1: growth decelerating, you have a more aggressive bed. You you 202 00:10:24,200 --> 00:10:26,920 Speaker 1: have your laughing very difficult comps, and you have the 203 00:10:26,960 --> 00:10:30,520 Speaker 1: speculation and when people turn down right. So one of 204 00:10:30,559 --> 00:10:32,760 Speaker 1: the things that that's helped a lot of these names 205 00:10:32,920 --> 00:10:37,080 Speaker 1: is you've had money chasing performance when the performance isn't there, 206 00:10:37,480 --> 00:10:41,600 Speaker 1: then the money goes away. And we think that people 207 00:10:41,679 --> 00:10:43,640 Speaker 1: are going to sell weakness for the first time in 208 00:10:43,679 --> 00:10:47,680 Speaker 1: a while for fundamental reasons, for technical reasons. And I 209 00:10:47,720 --> 00:10:52,200 Speaker 1: think the operative another operative word for two is normalization. 210 00:10:52,559 --> 00:10:55,080 Speaker 1: We're going to use this this word time and time again. 211 00:10:55,400 --> 00:10:58,160 Speaker 1: We're going to get back to more normal times, whether 212 00:10:58,200 --> 00:11:02,400 Speaker 1: it's consumers spending, whether it's latility, or whether it's valuation. 213 00:11:04,080 --> 00:11:06,280 Speaker 1: I love the point about the stadium naming right and 214 00:11:06,920 --> 00:11:09,079 Speaker 1: even before the subprime crisis. I'm trying to remember that. 215 00:11:09,160 --> 00:11:11,559 Speaker 1: I think there were a few players in that who 216 00:11:11,640 --> 00:11:14,320 Speaker 1: got some naming rights right before. I want to say 217 00:11:14,360 --> 00:11:18,480 Speaker 1: it was three Com Stadium with play. And we also 218 00:11:18,520 --> 00:11:21,800 Speaker 1: have the f t X Arena, which is uh which 219 00:11:21,840 --> 00:11:24,400 Speaker 1: has been renamed It's the Miami Heat Arena down in 220 00:11:24,400 --> 00:11:28,800 Speaker 1: in Miami. That was another recent rename. Yeah, yeah, great, 221 00:11:28,840 --> 00:11:31,120 Speaker 1: great indicator. Who knows if it's really true? Is someone's 222 00:11:31,160 --> 00:11:32,559 Speaker 1: got to do a deep dive on that foot. I 223 00:11:32,679 --> 00:11:36,360 Speaker 1: I nominate you to. I'll take care of them. So 224 00:11:36,520 --> 00:11:40,080 Speaker 1: all the stadium names throughout history, yeah, I'll take care 225 00:11:40,120 --> 00:11:50,120 Speaker 1: of it. So, Chris, so you have this call for 226 00:11:50,400 --> 00:11:53,760 Speaker 1: a ten correction. That's in the first half of the 227 00:11:53,840 --> 00:11:55,679 Speaker 1: year and then for the second half of the year. 228 00:11:55,720 --> 00:11:58,120 Speaker 1: I know I was reading one of your recent notes 229 00:11:58,240 --> 00:12:01,920 Speaker 1: and you talked about how how important the midterm elections are, 230 00:12:02,000 --> 00:12:05,240 Speaker 1: and so I actually really haven't been hearing very much 231 00:12:05,280 --> 00:12:08,200 Speaker 1: about this from people I I talked to. So maybe 232 00:12:08,200 --> 00:12:10,640 Speaker 1: you can walk us through your thinking there as well, 233 00:12:10,679 --> 00:12:14,040 Speaker 1: and in relation to the market. So so another thing 234 00:12:14,120 --> 00:12:16,200 Speaker 1: before before we get into that and we get into 235 00:12:16,200 --> 00:12:18,760 Speaker 1: politics a little bit, we're going to talk about religion. No, 236 00:12:18,960 --> 00:12:23,320 Speaker 1: um no, what or what we're gonna do is I 237 00:12:23,360 --> 00:12:25,640 Speaker 1: want to lay the groundwork and I want to level 238 00:12:25,640 --> 00:12:28,320 Speaker 1: set things. What what we're saying and what we think 239 00:12:28,360 --> 00:12:30,760 Speaker 1: we need is we need a repricing of risk, the 240 00:12:30,840 --> 00:12:34,200 Speaker 1: systematic risk. This is not O seven a way where 241 00:12:34,240 --> 00:12:37,000 Speaker 1: systematic root risk was through the roof. What this is 242 00:12:37,000 --> 00:12:39,920 Speaker 1: is we think that we need a repricing of risk 243 00:12:40,000 --> 00:12:42,360 Speaker 1: to bring in new investors. Things have got a little 244 00:12:42,400 --> 00:12:46,400 Speaker 1: bit too frothy. Once that occurs, the consumer still has money. 245 00:12:47,000 --> 00:12:50,040 Speaker 1: What we argue is that spending is going to normalize, 246 00:12:50,080 --> 00:12:52,640 Speaker 1: but balance sheets are still strong. There's some some risk there, 247 00:12:53,000 --> 00:12:56,079 Speaker 1: but overall we just need a more attractive level to 248 00:12:56,120 --> 00:12:59,280 Speaker 1: get aggressive. If and when we get that, we'll want 249 00:12:59,320 --> 00:13:00,920 Speaker 1: to buy the more could or will want to add 250 00:13:01,000 --> 00:13:04,400 Speaker 1: risk into the portfolio. How However, your possess um one 251 00:13:04,440 --> 00:13:06,080 Speaker 1: of the things that we've noticed, and we were looking 252 00:13:06,080 --> 00:13:07,680 Speaker 1: for a catalysts in the second half of the year. 253 00:13:07,960 --> 00:13:11,040 Speaker 1: We're going to have midterm elections. One of things. One 254 00:13:11,040 --> 00:13:13,079 Speaker 1: of my associates does a very nice job on the 255 00:13:13,080 --> 00:13:15,440 Speaker 1: political front, and and it's done a good job over 256 00:13:15,440 --> 00:13:17,960 Speaker 1: the last couple of years. Now it's kind of obvious, 257 00:13:18,000 --> 00:13:21,160 Speaker 1: but not that long ago, we were talking about a 258 00:13:21,360 --> 00:13:25,000 Speaker 1: shift right, a shift from from blue to red. And 259 00:13:25,800 --> 00:13:29,080 Speaker 1: we've seen what happened in Virginia. I can't believe how 260 00:13:29,120 --> 00:13:32,680 Speaker 1: close the race was in in New Jersey for the governorship, 261 00:13:33,160 --> 00:13:36,360 Speaker 1: and it's really telling you something. And so I think 262 00:13:36,400 --> 00:13:38,480 Speaker 1: it's pretty consensus at this point in time, and I 263 00:13:38,520 --> 00:13:41,560 Speaker 1: think most people believe there's going to be a red 264 00:13:41,600 --> 00:13:44,400 Speaker 1: wave and with that, you're going to have a split government. 265 00:13:44,440 --> 00:13:47,240 Speaker 1: And typically when you have a split government, not a 266 00:13:47,240 --> 00:13:49,880 Speaker 1: lot of things get done. And the lack of government 267 00:13:49,920 --> 00:13:51,920 Speaker 1: is good government as far as the markets are concerned. 268 00:13:52,320 --> 00:13:56,800 Speaker 1: UM Traditionally, Republicans controlling that government, controlling the Senate is 269 00:13:56,800 --> 00:13:59,240 Speaker 1: a good thing as well. We can argue about why 270 00:13:59,280 --> 00:14:02,280 Speaker 1: that is, why that might be, but but just say 271 00:14:02,480 --> 00:14:04,679 Speaker 1: we think this is going to be midterm elections will 272 00:14:04,720 --> 00:14:06,959 Speaker 1: be the catalyst that we need to pull us out 273 00:14:07,000 --> 00:14:09,280 Speaker 1: of the slump or the malaise that that we expect 274 00:14:09,360 --> 00:14:13,720 Speaker 1: to see over the summertime. So that call, it's based 275 00:14:13,720 --> 00:14:17,000 Speaker 1: on history basically in the way the market performs with 276 00:14:17,040 --> 00:14:20,000 Speaker 1: the Republican control. Because I look at this particular setup 277 00:14:20,040 --> 00:14:24,120 Speaker 1: and I'm thinking, well, okay, and I you're right, you know, 278 00:14:24,160 --> 00:14:25,960 Speaker 1: all the pundits seem to think there's gonna be a 279 00:14:25,960 --> 00:14:30,000 Speaker 1: red sweep and and Republicans will control most likely the 280 00:14:30,040 --> 00:14:33,200 Speaker 1: House and and quite possibly the Senate. Yeah, but I wonder, 281 00:14:33,320 --> 00:14:37,920 Speaker 1: you know, fundamentally, uh, that seems to take stimulus completely 282 00:14:37,920 --> 00:14:41,440 Speaker 1: off the off the table. I also would think, you know, 283 00:14:41,520 --> 00:14:46,040 Speaker 1: any further tax reductions would be pretty unlikely, uh you know, 284 00:14:46,080 --> 00:14:48,480 Speaker 1: given the Democrats still in the White House with with 285 00:14:48,640 --> 00:14:52,960 Speaker 1: veto power. So that sense of history, she was enough 286 00:14:53,120 --> 00:14:56,040 Speaker 1: to to overcome sort of the fundamentals that are a 287 00:14:56,120 --> 00:15:00,240 Speaker 1: little bit cloudier with with the Republican controlled Congress, you know, 288 00:15:00,280 --> 00:15:04,120 Speaker 1: given you know what a tail when stimulus was leading 289 00:15:04,160 --> 00:15:06,280 Speaker 1: up to this year. So so what one thing I 290 00:15:06,320 --> 00:15:08,520 Speaker 1: would just add to that is, and the Finn talks 291 00:15:08,520 --> 00:15:11,520 Speaker 1: about this a lot. It's planning. Right. If you go 292 00:15:11,600 --> 00:15:14,120 Speaker 1: back to when we had the tax cuts, If I 293 00:15:14,160 --> 00:15:16,960 Speaker 1: remember correctly, M and A slowed down because people didn't 294 00:15:17,000 --> 00:15:19,760 Speaker 1: know what the tax situation was going to be. When 295 00:15:19,760 --> 00:15:22,680 Speaker 1: you have a situation where it's pretty placid and people 296 00:15:22,920 --> 00:15:25,600 Speaker 1: people really know what the tax situation is going to be, 297 00:15:26,000 --> 00:15:29,440 Speaker 1: fiscal stimulus, monetary stimulus, they can plan better and they 298 00:15:29,440 --> 00:15:33,200 Speaker 1: can move back. Then well, once I wants to pay more, 299 00:15:33,240 --> 00:15:36,200 Speaker 1: once I wants to pay less. But when you have 300 00:15:36,320 --> 00:15:40,680 Speaker 1: a more stable type situation, the bit aspread narrows and 301 00:15:40,720 --> 00:15:43,040 Speaker 1: things can get done. So I don't you know, I 302 00:15:43,080 --> 00:15:45,040 Speaker 1: think about it a couple of different ways. But one 303 00:15:45,080 --> 00:15:48,000 Speaker 1: way it could be positive is you just know that 304 00:15:48,040 --> 00:15:50,400 Speaker 1: the tax situation is not going to change very much. 305 00:15:50,920 --> 00:15:52,880 Speaker 1: And now one of the things that we keep saying 306 00:15:52,960 --> 00:15:55,520 Speaker 1: is you've got a lot of cash on hand. Rates 307 00:15:55,520 --> 00:15:59,360 Speaker 1: are still incredibly low. Credit markets for now are wide open, 308 00:16:00,120 --> 00:16:04,800 Speaker 1: and as growth slow, as an opportunity is more selective, 309 00:16:05,240 --> 00:16:08,320 Speaker 1: that pushes people into that M and A. And again, 310 00:16:08,360 --> 00:16:11,200 Speaker 1: if there's not much coming out of the government regulation wise, 311 00:16:11,240 --> 00:16:13,480 Speaker 1: tax wise, we can see a lot more m and 312 00:16:13,560 --> 00:16:17,480 Speaker 1: A activity, and eventually that's usually a pretty good positive 313 00:16:17,480 --> 00:16:20,560 Speaker 1: for the market. And then, Chris, I think for a 314 00:16:20,560 --> 00:16:23,360 Speaker 1: while now you had been saying that investors have been 315 00:16:23,360 --> 00:16:28,720 Speaker 1: gaining confidence in the feds um willingness to an ability 316 00:16:28,800 --> 00:16:30,840 Speaker 1: to find inflation. I think that was in one of 317 00:16:30,880 --> 00:16:33,040 Speaker 1: your notes a couple of weeks ago, and then earlier 318 00:16:33,080 --> 00:16:36,520 Speaker 1: this week you read reiterated that you think the Fed 319 00:16:36,560 --> 00:16:39,760 Speaker 1: will avoid a policy error. So I'm wondering what makes 320 00:16:39,800 --> 00:16:43,920 Speaker 1: you confident in that and how you're thinking about it. Right, So, 321 00:16:44,600 --> 00:16:46,800 Speaker 1: when we first started talking about it, it was a 322 00:16:46,840 --> 00:16:49,960 Speaker 1: non consensus thought and one of the things that we 323 00:16:50,040 --> 00:16:52,920 Speaker 1: began to seeze we began to see the curve flatten, 324 00:16:53,400 --> 00:16:56,480 Speaker 1: and we also saw break evens or inflation expectations come 325 00:16:56,520 --> 00:17:00,440 Speaker 1: down before the Fed even talked about retiring. You know, 326 00:17:00,520 --> 00:17:03,160 Speaker 1: what we were saying back then is either the markets 327 00:17:03,200 --> 00:17:06,800 Speaker 1: going to push the Fed or the Fed will eventually 328 00:17:06,840 --> 00:17:09,400 Speaker 1: do what they need to do. Now, what we think 329 00:17:09,560 --> 00:17:11,760 Speaker 1: is the Fed is very open to doing what they 330 00:17:11,760 --> 00:17:15,159 Speaker 1: need to do, the markets believing it. The curve has flattened, 331 00:17:15,280 --> 00:17:18,680 Speaker 1: break evens are coming down, our inflation expectations are coming down, 332 00:17:18,800 --> 00:17:21,560 Speaker 1: and you see from the minutes that they mean business. 333 00:17:22,080 --> 00:17:24,919 Speaker 1: And you know, a lot of people have brought this up. 334 00:17:25,000 --> 00:17:27,040 Speaker 1: I don't know how to handicap this. I don't know 335 00:17:27,080 --> 00:17:30,840 Speaker 1: what this means. But it's funny that Chairman Powell, right 336 00:17:30,920 --> 00:17:33,760 Speaker 1: after it was announced who was going to be reappointed, 337 00:17:34,160 --> 00:17:36,240 Speaker 1: got a lot more aggressive and a lot of people 338 00:17:36,320 --> 00:17:39,240 Speaker 1: point that out and say that's really interesting, and maybe 339 00:17:39,280 --> 00:17:41,320 Speaker 1: that has something to do with it. But at the 340 00:17:41,440 --> 00:17:43,120 Speaker 1: end of the day, they're saying all the right things, 341 00:17:43,160 --> 00:17:44,919 Speaker 1: they're doing all the right things, they're doing what they 342 00:17:44,960 --> 00:17:47,919 Speaker 1: would you would expect them to do. Labor markets in 343 00:17:47,960 --> 00:17:51,000 Speaker 1: a decent spot, and they really do have to fight inflation. 344 00:17:51,200 --> 00:17:54,719 Speaker 1: The funny thing now for us is we're beginning to 345 00:17:54,720 --> 00:17:58,680 Speaker 1: see things that we think are transitory. We think that 346 00:17:58,760 --> 00:18:02,520 Speaker 1: we're either at keep pricing, were possibly very close to 347 00:18:02,560 --> 00:18:06,040 Speaker 1: peak pricing. We think at the beginning of February you've 348 00:18:06,080 --> 00:18:09,240 Speaker 1: got a shot at improving the supply chain, which puts 349 00:18:09,240 --> 00:18:12,679 Speaker 1: downward pressure on pricing. And so as they get more aggressive, 350 00:18:13,160 --> 00:18:15,920 Speaker 1: and as the market and some of the market dynamics 351 00:18:15,920 --> 00:18:18,960 Speaker 1: play out, they may not have to be as aggressive 352 00:18:19,359 --> 00:18:21,399 Speaker 1: as a lot of people think. Well, we will see. 353 00:18:21,880 --> 00:18:23,840 Speaker 1: And the last thing I would point to and this 354 00:18:23,840 --> 00:18:25,720 Speaker 1: this comes from our economics team. They did a really 355 00:18:25,800 --> 00:18:29,920 Speaker 1: nice job on this. It's not all supply. One of 356 00:18:30,000 --> 00:18:32,760 Speaker 1: the things they pointed out if you look at retail sales, 357 00:18:32,920 --> 00:18:36,760 Speaker 1: retail sales is up from the pre pandemic peak in 358 00:18:36,840 --> 00:18:40,560 Speaker 1: twenty months post grade financial crisis. It took years for 359 00:18:40,600 --> 00:18:43,280 Speaker 1: that to occur. So the demand side has been off 360 00:18:43,320 --> 00:18:45,680 Speaker 1: the charts. And we used to joke around with people 361 00:18:45,720 --> 00:18:49,239 Speaker 1: that last year what the consumer would say is if 362 00:18:49,280 --> 00:18:51,919 Speaker 1: you raise prices teen percent, we'll take two. Now they 363 00:18:51,920 --> 00:18:54,359 Speaker 1: didn't actually say that, but it gives you an indication 364 00:18:54,440 --> 00:18:57,960 Speaker 1: of how price. They didn't care about price at that 365 00:18:58,000 --> 00:19:00,119 Speaker 1: point in time, and now we think they will be 366 00:19:00,160 --> 00:19:02,880 Speaker 1: a lot more price conscious and many of these factors 367 00:19:02,920 --> 00:19:07,640 Speaker 1: will lead to lower inflation. And I think again, many 368 00:19:07,680 --> 00:19:10,400 Speaker 1: more people now that they see the curve flattening, break 369 00:19:10,480 --> 00:19:14,160 Speaker 1: evens coming down, and things beginning to slow, more confidence 370 00:19:14,200 --> 00:19:16,240 Speaker 1: in the FED and the fetacing all the things you 371 00:19:16,240 --> 00:19:19,239 Speaker 1: would expect them to say as you start to a 372 00:19:19,280 --> 00:19:24,040 Speaker 1: tightening cycle. Chris one prediction. I've really found interesting. Uh 373 00:19:24,240 --> 00:19:26,240 Speaker 1: number eight on the list. I think we're jumping around 374 00:19:26,280 --> 00:19:30,800 Speaker 1: here counting down like David Letterman style, but let me 375 00:19:30,840 --> 00:19:33,399 Speaker 1: just read it to you and uh talk about this 376 00:19:33,440 --> 00:19:36,359 Speaker 1: a little bit. With about one quarter of US household 377 00:19:36,400 --> 00:19:40,600 Speaker 1: assets invested in equities and the FED retiring the transitory phase, 378 00:19:41,119 --> 00:19:44,520 Speaker 1: the Fed's implied put is lower, while the equity markets 379 00:19:44,600 --> 00:19:49,560 Speaker 1: economic real impact is higher. This that's a good one 380 00:19:49,600 --> 00:19:52,119 Speaker 1: to me. I think it's you know, to some degree, 381 00:19:52,200 --> 00:19:54,399 Speaker 1: you know, question one I guess would be, you know, 382 00:19:55,280 --> 00:19:57,720 Speaker 1: is that time part of that time percent correction trying 383 00:19:57,720 --> 00:19:59,760 Speaker 1: to sort of price figure out where the price of 384 00:19:59,800 --> 00:20:02,960 Speaker 1: that put is and walk us through what you you know, 385 00:20:03,000 --> 00:20:06,760 Speaker 1: what you mean about their economic real impact is higher? Um, 386 00:20:07,000 --> 00:20:09,600 Speaker 1: you know what it would a really weak stock market, 387 00:20:09,720 --> 00:20:14,199 Speaker 1: sort of depressed consumer spending, consumer confidence, and eventually you know, 388 00:20:14,359 --> 00:20:17,040 Speaker 1: put that FED put into play, walk us through how 389 00:20:17,080 --> 00:20:19,800 Speaker 1: that you see all that playing out this year. So 390 00:20:19,800 --> 00:20:21,840 Speaker 1: so the first thing I'll say is that that's a 391 00:20:21,920 --> 00:20:25,600 Speaker 1: savory veteran market call out, that that that is really 392 00:20:25,640 --> 00:20:27,719 Speaker 1: one of the things that we've been harping on, and 393 00:20:27,760 --> 00:20:30,600 Speaker 1: it's kind of you know, people aren't quite grasping it 394 00:20:30,760 --> 00:20:34,040 Speaker 1: just yet, because what we're saying is, hey, balance sheets 395 00:20:34,040 --> 00:20:37,000 Speaker 1: are a lot stronger, no doubt about it. Right. House 396 00:20:37,040 --> 00:20:40,200 Speaker 1: prices are up, Equity prices are up, people have more cash. 397 00:20:40,600 --> 00:20:43,879 Speaker 1: Balance sheets are fantastic. But what they're missing is there's 398 00:20:43,880 --> 00:20:46,679 Speaker 1: a lot more equity risk on the balance sheet today 399 00:20:46,760 --> 00:20:49,159 Speaker 1: than there's ever been. If you look back to the 400 00:20:49,200 --> 00:20:52,880 Speaker 1: percentage of the balance sheet a decade ago is about 401 00:20:53,560 --> 00:20:57,320 Speaker 1: it's now about um depending on the day, but let's 402 00:20:57,359 --> 00:21:00,720 Speaker 1: just say close to a quarter. As the equity market 403 00:21:00,760 --> 00:21:04,440 Speaker 1: waxes and waynes, that's going to influence sentiment a lot 404 00:21:04,480 --> 00:21:07,600 Speaker 1: more today than it did a decade ago. So in 405 00:21:07,640 --> 00:21:11,000 Speaker 1: any sort of equity market sell off, sentiment should get 406 00:21:11,040 --> 00:21:14,639 Speaker 1: a lot heavier or not be all that attractive, and 407 00:21:14,720 --> 00:21:17,520 Speaker 1: that should spill over into discretion ory spending. People don't 408 00:21:17,560 --> 00:21:19,840 Speaker 1: feel as rich, and so now all of a sudden, 409 00:21:19,840 --> 00:21:23,400 Speaker 1: the stock market plays a much bigger component into spending 410 00:21:23,760 --> 00:21:26,800 Speaker 1: and economic growth than it did before. And there's this 411 00:21:26,880 --> 00:21:30,080 Speaker 1: kind of vicious cycle. Now as far as the put, 412 00:21:30,720 --> 00:21:33,560 Speaker 1: if the market falls apart, and we're not expecting the 413 00:21:33,600 --> 00:21:36,800 Speaker 1: market to fall apart, we're expecting a market correction, but 414 00:21:36,960 --> 00:21:39,600 Speaker 1: you wouldn't expect a lot of people always believe that 415 00:21:39,640 --> 00:21:42,800 Speaker 1: the Fed will step in and save the market. We're 416 00:21:42,880 --> 00:21:45,440 Speaker 1: not in that opinion. You know what, the FED tries 417 00:21:45,480 --> 00:21:49,240 Speaker 1: to do. It tries to keep the liquidity flowing. It 418 00:21:49,400 --> 00:21:52,119 Speaker 1: tries to keep the machine greased. But a lot of 419 00:21:52,119 --> 00:21:53,840 Speaker 1: people will say, wow, the FEN is always trying to 420 00:21:53,840 --> 00:21:56,040 Speaker 1: save the equity market. That's not our opinion, that's not 421 00:21:56,080 --> 00:21:57,800 Speaker 1: our belief. But at the end of the day, the 422 00:21:57,840 --> 00:22:01,280 Speaker 1: more conventional wisdom is the FED will not react to 423 00:22:01,400 --> 00:22:04,600 Speaker 1: the equity market, or the FED will react to the 424 00:22:04,640 --> 00:22:08,040 Speaker 1: more equity market later rather than sooner. And that's basically 425 00:22:08,040 --> 00:22:11,000 Speaker 1: because they're heading into a tightening cycle. If the market 426 00:22:11,000 --> 00:22:13,960 Speaker 1: falls apart. The market falls apart, they have a dual mandate. 427 00:22:14,040 --> 00:22:18,119 Speaker 1: That dual mate is price stability and maximum employment. And 428 00:22:18,600 --> 00:22:22,840 Speaker 1: we pretty much satisfied both equations. Because the equity market 429 00:22:22,880 --> 00:22:26,439 Speaker 1: goes down, that's really not their problem. It becomes a 430 00:22:26,440 --> 00:22:30,560 Speaker 1: bit more than problem because of this relationship and because 431 00:22:30,600 --> 00:22:34,040 Speaker 1: the allocation to equities. But we really just don't think 432 00:22:34,119 --> 00:22:36,480 Speaker 1: that the Fed's going to tighten raise. The Feds are 433 00:22:36,480 --> 00:22:41,159 Speaker 1: going to take accommodation off. And you know, buyers beware, 434 00:22:41,640 --> 00:22:44,639 Speaker 1: and everyone's a big boy or big girl. Figure out 435 00:22:44,720 --> 00:22:47,040 Speaker 1: what kind of risk you're willing to sleep with or 436 00:22:47,240 --> 00:22:49,320 Speaker 1: or what kind of risk you're comfortable within the portfolio. 437 00:22:49,640 --> 00:22:51,760 Speaker 1: Because we're going to have a lot more volatility or 438 00:22:51,840 --> 00:22:54,520 Speaker 1: to go forward in time. This is not again, this 439 00:22:54,560 --> 00:22:57,160 Speaker 1: is no longer the market can bend but not break. 440 00:22:57,440 --> 00:22:59,320 Speaker 1: The market will break at some point in time. We 441 00:22:59,359 --> 00:23:02,000 Speaker 1: will have bigger pullbacks and it will feel a lot 442 00:23:02,040 --> 00:23:04,320 Speaker 1: worse than actually is because we haven't had that in 443 00:23:04,359 --> 00:23:23,240 Speaker 1: a long time. So then what do you recommend for 444 00:23:23,320 --> 00:23:25,399 Speaker 1: clients or you know, when people are asking you what 445 00:23:25,440 --> 00:23:28,800 Speaker 1: they should be favoring in this environment and for the 446 00:23:28,800 --> 00:23:31,400 Speaker 1: remainder of this year, what do you recommend to them? 447 00:23:31,440 --> 00:23:34,000 Speaker 1: Because I feel like one big question that popped up 448 00:23:34,040 --> 00:23:37,800 Speaker 1: this week was like, Ken, what happens with tech if 449 00:23:37,840 --> 00:23:41,800 Speaker 1: we do continue to see higher yields? And so, so 450 00:23:41,840 --> 00:23:44,200 Speaker 1: what do you tell them? So what we tell them 451 00:23:44,240 --> 00:23:47,520 Speaker 1: so from the five thousand foot level is what you 452 00:23:47,560 --> 00:23:49,359 Speaker 1: want to do is you want to go up in quality, 453 00:23:49,359 --> 00:23:51,679 Speaker 1: you want to go down and risk. And when we 454 00:23:51,720 --> 00:23:54,640 Speaker 1: talk about qualities, companies with better balance sheets, you want 455 00:23:54,680 --> 00:23:56,760 Speaker 1: cash on the balance sheet. You can want less leverage, 456 00:23:57,160 --> 00:24:00,760 Speaker 1: you want better management teams, good stewart of capital, so 457 00:24:01,320 --> 00:24:04,720 Speaker 1: companies that have higher r o I C or r 458 00:24:04,760 --> 00:24:06,160 Speaker 1: o E s And then you want to stay away 459 00:24:06,160 --> 00:24:08,680 Speaker 1: from the poor secular stories. So you want to focus 460 00:24:08,720 --> 00:24:12,120 Speaker 1: on more attractive profit margins as far as risk, we 461 00:24:12,119 --> 00:24:14,360 Speaker 1: we just want to stay away from the more risky 462 00:24:14,560 --> 00:24:17,159 Speaker 1: um type type stories because we just don't think you're 463 00:24:17,160 --> 00:24:19,320 Speaker 1: getting paid a year and a half ago, that was 464 00:24:19,359 --> 00:24:21,440 Speaker 1: a different story. Right now, you're not getting paid for that. 465 00:24:22,000 --> 00:24:25,320 Speaker 1: You can exploit this or you can institute this philosophy 466 00:24:25,560 --> 00:24:28,520 Speaker 1: with this belief and I think almost any portfolio, and 467 00:24:29,160 --> 00:24:31,639 Speaker 1: it really just depends on your risk tolerance and and 468 00:24:32,000 --> 00:24:35,080 Speaker 1: your tax situation how you do that. We're much more 469 00:24:35,160 --> 00:24:39,040 Speaker 1: focused on factors in style. And one of the things 470 00:24:39,040 --> 00:24:41,520 Speaker 1: that we like about quality is one you're not paying 471 00:24:41,640 --> 00:24:43,520 Speaker 1: up right, You're not paying through the nose for higher 472 00:24:43,560 --> 00:24:47,240 Speaker 1: quality to your late in the cycle, and usually late 473 00:24:47,280 --> 00:24:50,479 Speaker 1: in the cycle is the right time for quality. Quality 474 00:24:50,520 --> 00:24:53,760 Speaker 1: does better when growth is slowing down as opposed to 475 00:24:53,840 --> 00:24:56,359 Speaker 1: early in the cycle where growth is really accelerating. You 476 00:24:56,400 --> 00:24:58,760 Speaker 1: hear the phrase dash for trash and and so and 477 00:24:58,800 --> 00:25:02,040 Speaker 1: so forth lateness cycle, it's it's it's great, we're much 478 00:25:02,080 --> 00:25:04,720 Speaker 1: better the last thing. And this is something that's that's 479 00:25:04,720 --> 00:25:07,959 Speaker 1: near and to our heart. We find the return distribution. 480 00:25:08,280 --> 00:25:11,399 Speaker 1: In other words, quality does much better to the downside. 481 00:25:12,000 --> 00:25:15,320 Speaker 1: You can participate to the upside, but really our focus 482 00:25:15,359 --> 00:25:18,040 Speaker 1: is on the downside, and quality should help you in 483 00:25:18,119 --> 00:25:22,000 Speaker 1: that downtape and should help you protect that portfolio game. So, 484 00:25:22,400 --> 00:25:24,760 Speaker 1: you know, however you do it, however you institute it. 485 00:25:25,080 --> 00:25:27,879 Speaker 1: You know, we can talk about different ways, but really 486 00:25:27,920 --> 00:25:30,399 Speaker 1: you want to take on more quality. You want to 487 00:25:30,400 --> 00:25:33,080 Speaker 1: reduce the risk in the portfolio. It's time to start 488 00:25:33,080 --> 00:25:35,640 Speaker 1: building up some dry powder for a rainy day. Yeah, 489 00:25:35,680 --> 00:25:38,199 Speaker 1: that reminds me of Uh. One of the things we 490 00:25:38,200 --> 00:25:39,680 Speaker 1: talked about the last time you were on the show 491 00:25:39,680 --> 00:25:42,280 Speaker 1: about a year ago was uh, and you sort of 492 00:25:42,359 --> 00:25:45,000 Speaker 1: nailed this one on the head. I think we're one 493 00:25:45,119 --> 00:25:47,320 Speaker 1: is you know, you really talked about how the growth 494 00:25:47,320 --> 00:25:50,080 Speaker 1: at any price type of trade is it was just 495 00:25:50,160 --> 00:25:52,760 Speaker 1: done last year, and that that came true in kind 496 00:25:52,760 --> 00:25:56,679 Speaker 1: of a dramatic fashion. Uh later in the year. I wonder, 497 00:25:57,200 --> 00:25:58,960 Speaker 1: is that dead for good? Do you think? I mean, 498 00:25:59,000 --> 00:26:02,119 Speaker 1: what would the condition we would need to see to 499 00:26:02,160 --> 00:26:05,440 Speaker 1: get people talking about the high flying uh you know, 500 00:26:05,560 --> 00:26:08,720 Speaker 1: longer ration sort of growthy names again? Is it is 501 00:26:08,760 --> 00:26:11,959 Speaker 1: it as simple as a tighten versus loosening monetary policy? 502 00:26:12,000 --> 00:26:14,080 Speaker 1: Do you think? Yeah, Yeah, there's there's a couple of 503 00:26:14,080 --> 00:26:16,919 Speaker 1: things and and I'll try and PISA sinc. But it 504 00:26:16,920 --> 00:26:21,679 Speaker 1: probably won't be because it's not so much about a level, 505 00:26:21,680 --> 00:26:24,119 Speaker 1: but it's more about I think an event. Well, what 506 00:26:24,240 --> 00:26:25,760 Speaker 1: you need to see is a couple of things, just 507 00:26:25,800 --> 00:26:29,240 Speaker 1: on the monetary policy side. Again, what I think is 508 00:26:29,280 --> 00:26:33,480 Speaker 1: going on is as real rates go higher, inflation expectations 509 00:26:33,480 --> 00:26:36,719 Speaker 1: come down, the probability of stack flation comes off the table. Right. 510 00:26:37,160 --> 00:26:40,000 Speaker 1: These high flyers do much better in a stack flationary 511 00:26:40,080 --> 00:26:44,560 Speaker 1: environment than in a more benign economic compartment. The other 512 00:26:44,680 --> 00:26:47,960 Speaker 1: thing is, as we pointed out, is real rates are 513 00:26:48,080 --> 00:26:51,159 Speaker 1: tied to relative pricing, or have been tied to relative pricing. 514 00:26:51,160 --> 00:26:54,000 Speaker 1: In the gray market, real rates were negative hundred on 515 00:26:54,080 --> 00:26:56,960 Speaker 1: the tenure, negative a hundred and twenty basis points, which 516 00:26:57,080 --> 00:27:00,679 Speaker 1: was historically low. Um, they're up to a five basis 517 00:27:00,680 --> 00:27:02,520 Speaker 1: points from the start of the year, so I think 518 00:27:02,600 --> 00:27:04,720 Speaker 1: they're in the mid eighties at this point in time. 519 00:27:05,400 --> 00:27:08,359 Speaker 1: If you see real rates continue to ratch and higher, 520 00:27:08,880 --> 00:27:10,119 Speaker 1: you know at some point we've got to make a 521 00:27:10,160 --> 00:27:13,119 Speaker 1: call where rates are going to level out. But I 522 00:27:13,160 --> 00:27:16,119 Speaker 1: don't think they get too flat this year. They could, 523 00:27:16,720 --> 00:27:19,760 Speaker 1: but definitely if they get the flat, it's another conversation 524 00:27:20,560 --> 00:27:23,159 Speaker 1: because if they get the flat. What that means is 525 00:27:23,160 --> 00:27:25,399 Speaker 1: a fed and all life. They got very aggressive and 526 00:27:25,440 --> 00:27:28,320 Speaker 1: the economy is going to slow down. And what's happened 527 00:27:28,359 --> 00:27:30,720 Speaker 1: is you've probably had a bigger sell off in these 528 00:27:30,840 --> 00:27:33,280 Speaker 1: names and more important and last thing that we're looking 529 00:27:33,280 --> 00:27:35,960 Speaker 1: at is and I'll throw another blast from the past 530 00:27:36,000 --> 00:27:38,920 Speaker 1: out there, there was a cop There was a fund 531 00:27:38,920 --> 00:27:41,879 Speaker 1: called them under net Net fund. So in the late nineties, 532 00:27:41,920 --> 00:27:45,840 Speaker 1: it was a high flying internet um stock portfolio. And 533 00:27:45,880 --> 00:27:48,920 Speaker 1: a friend of mine and for our associate was was 534 00:27:48,960 --> 00:27:53,000 Speaker 1: a trader there. And every day in the sell off, 535 00:27:53,359 --> 00:27:55,159 Speaker 1: the PM would come in and give him more to 536 00:27:55,200 --> 00:27:57,120 Speaker 1: Cell and more to Cell, and he would just knock 537 00:27:57,160 --> 00:27:59,719 Speaker 1: things down and knock things down. And it wasn't until 538 00:28:00,480 --> 00:28:03,439 Speaker 1: those Cell orders until basically that capital is rehallocated. So 539 00:28:03,560 --> 00:28:06,240 Speaker 1: what happens in the equity market, whether you like it 540 00:28:06,320 --> 00:28:10,000 Speaker 1: or not, money chases performance and then when performance isn't, 541 00:28:10,040 --> 00:28:13,120 Speaker 1: their money leaves. So you need to see that wash out. 542 00:28:13,600 --> 00:28:15,439 Speaker 1: So what we'd like to see is we'd like to 543 00:28:15,480 --> 00:28:18,560 Speaker 1: see a repricing of real rates. We'd like to see 544 00:28:18,640 --> 00:28:21,160 Speaker 1: us move further in time. We'd like to see another 545 00:28:21,359 --> 00:28:24,840 Speaker 1: push down in valuation. Is not so much valuations, but 546 00:28:24,920 --> 00:28:28,639 Speaker 1: just performance, and then we'd like to see that I'll 547 00:28:28,680 --> 00:28:32,000 Speaker 1: use a very nice graphic phrase, that cathartic puke, where 548 00:28:32,080 --> 00:28:36,560 Speaker 1: finally we see that the seller's exhausted and the final liquidations, 549 00:28:36,960 --> 00:28:39,440 Speaker 1: you know, and it's just hard to it's hard to get. 550 00:28:39,560 --> 00:28:41,400 Speaker 1: Is it's it's going to happen on this date at 551 00:28:41,440 --> 00:28:43,920 Speaker 1: this time. No, we don't know, but these are the 552 00:28:43,960 --> 00:28:47,040 Speaker 1: signposts that we're using. So you kind of you kind 553 00:28:47,040 --> 00:28:49,640 Speaker 1: of know when you see it. You know that that 554 00:28:49,640 --> 00:28:52,000 Speaker 1: that one real ugly day at the end of our correction, 555 00:28:52,040 --> 00:28:54,640 Speaker 1: I guess is uh, you know, the capitulation day that 556 00:28:54,640 --> 00:28:58,120 Speaker 1: that everyone waits for. That That's exactly it. And what 557 00:28:58,160 --> 00:29:00,640 Speaker 1: we said this year is we think the growth at 558 00:29:00,640 --> 00:29:03,400 Speaker 1: any price type UM stocks are going to have a 559 00:29:03,440 --> 00:29:06,280 Speaker 1: heavy first half because real rates are gonna go higher 560 00:29:06,240 --> 00:29:08,840 Speaker 1: and because of what you're seeing today. But we left 561 00:29:08,840 --> 00:29:11,080 Speaker 1: the door open to the second half because you could 562 00:29:11,080 --> 00:29:14,239 Speaker 1: see the slowing economy, you could see that repricing, and 563 00:29:14,280 --> 00:29:17,160 Speaker 1: you could see that that cathartic up chuck, or you 564 00:29:17,200 --> 00:29:21,680 Speaker 1: could see the seller's exhausted. Chris, one of the big 565 00:29:22,040 --> 00:29:23,480 Speaker 1: things that we were just talking about in one of 566 00:29:23,560 --> 00:29:25,920 Speaker 1: the big stories from this week is this yield spike, 567 00:29:26,040 --> 00:29:28,840 Speaker 1: and I'm wondering if if the what we're seeing this 568 00:29:28,880 --> 00:29:31,760 Speaker 1: week is any different from what we've seen in the past, Like, 569 00:29:32,120 --> 00:29:35,600 Speaker 1: is there any reason to believe that this won't be 570 00:29:35,680 --> 00:29:40,120 Speaker 1: over by next week? For instance, thought or two there um, 571 00:29:40,200 --> 00:29:42,480 Speaker 1: some people were asking asking me, hey, is it is 572 00:29:42,520 --> 00:29:44,280 Speaker 1: it a good time to buy growth in tech and 573 00:29:44,320 --> 00:29:47,120 Speaker 1: so and so forth. Let's just talk short term, let's 574 00:29:47,200 --> 00:29:51,040 Speaker 1: talk long term. The move down has been very aggressive. 575 00:29:51,280 --> 00:29:53,560 Speaker 1: It wouldn't have This is not a prediction, but it 576 00:29:53,600 --> 00:29:56,160 Speaker 1: wouldn't be surprising too someday or the next couple of 577 00:29:56,240 --> 00:29:58,440 Speaker 1: days to see a snap back all of a sudden, 578 00:29:58,520 --> 00:30:01,600 Speaker 1: raids start to fall because you know, pick a reason 579 00:30:02,080 --> 00:30:03,880 Speaker 1: and we see a snap back. But at the end 580 00:30:03,920 --> 00:30:06,840 Speaker 1: of the day, the FED is going to be more aggressive. 581 00:30:07,080 --> 00:30:08,760 Speaker 1: I think we have a fair amount of confidence in 582 00:30:08,840 --> 00:30:11,400 Speaker 1: that if the FED. Our belief is, if the FED 583 00:30:11,480 --> 00:30:14,720 Speaker 1: is going to be more aggressive, then we should continue 584 00:30:14,720 --> 00:30:17,640 Speaker 1: to see that lift in real rates. Now, as we 585 00:30:17,720 --> 00:30:20,840 Speaker 1: look longer term, a lot of our clients are saying, well, 586 00:30:20,960 --> 00:30:22,600 Speaker 1: interest rates are going to go through the roof, and this, 587 00:30:22,760 --> 00:30:25,280 Speaker 1: that and the other thing. If you let look at 588 00:30:25,320 --> 00:30:29,280 Speaker 1: the last two tightening cycles, the tenure actually went lower. 589 00:30:29,320 --> 00:30:32,440 Speaker 1: Wants the FED or tenure yields actually went lower for 590 00:30:32,520 --> 00:30:35,840 Speaker 1: at least a year once the Feds started raising rates. 591 00:30:35,960 --> 00:30:38,560 Speaker 1: And so it's not clear to me that as a 592 00:30:38,640 --> 00:30:42,680 Speaker 1: FED starts raising rates that that tenure nominals are going 593 00:30:42,720 --> 00:30:45,400 Speaker 1: to go higher, right, they may begin to stall out, 594 00:30:46,160 --> 00:30:48,920 Speaker 1: And I think that that's important to note. And then 595 00:30:48,920 --> 00:30:53,160 Speaker 1: the last thing is what we think is the FED 596 00:30:53,240 --> 00:30:55,920 Speaker 1: will push the front end to wherever they need to go. 597 00:30:56,520 --> 00:30:58,960 Speaker 1: But eventually what's going to happen where late in the 598 00:30:59,040 --> 00:31:02,120 Speaker 1: cycle the economy is already slowing down as you take 599 00:31:02,160 --> 00:31:05,120 Speaker 1: stimulus off, that's going to slow things down more. I'm 600 00:31:05,160 --> 00:31:07,680 Speaker 1: not sure how aggressive they can be at this point 601 00:31:07,680 --> 00:31:11,840 Speaker 1: in time. And so when we get a more stable environment, 602 00:31:11,880 --> 00:31:14,400 Speaker 1: when we get a slower environment, then we can start 603 00:31:14,440 --> 00:31:17,760 Speaker 1: talking about moving back into those secular growth stories. But 604 00:31:17,840 --> 00:31:20,959 Speaker 1: for now we think it's especially as you go out 605 00:31:21,040 --> 00:31:23,240 Speaker 1: on the risk curve, it's still a little bit too risky. 606 00:31:23,280 --> 00:31:25,840 Speaker 1: And we still haven't seen, you know, the events of 607 00:31:25,880 --> 00:31:28,120 Speaker 1: the situations that we need to see playoffs to ship 608 00:31:29,000 --> 00:31:32,760 Speaker 1: tiden up your straight jackets. It's time for the craziest 609 00:31:32,800 --> 00:31:36,760 Speaker 1: things we saw in markets this week. Well that I 610 00:31:36,760 --> 00:31:39,560 Speaker 1: agree with Chris. I'm not sure how aggressive the FED 611 00:31:39,640 --> 00:31:41,600 Speaker 1: can get. I'm gonna tell you, Aldana, though, I'm going 612 00:31:41,640 --> 00:31:44,560 Speaker 1: to get very aggressive with my craziest thing of the week, 613 00:31:45,080 --> 00:31:47,840 Speaker 1: possibly a little too aggressive. I'm actually a little worried 614 00:31:48,480 --> 00:31:51,240 Speaker 1: about this one. Um. So if this is the last 615 00:31:51,240 --> 00:31:54,080 Speaker 1: time we talk because of the reaction to my crazy things, 616 00:31:54,320 --> 00:31:56,720 Speaker 1: it's been nice knowing you guys, I will say, though, 617 00:31:57,120 --> 00:31:59,520 Speaker 1: to be true to the craziest thing I saw in weeks, 618 00:31:59,840 --> 00:32:01,920 Speaker 1: I gonna have to stick with it and follow through 619 00:32:01,920 --> 00:32:03,720 Speaker 1: and tell you what it is. But I want to 620 00:32:03,720 --> 00:32:05,600 Speaker 1: hear yours first. What do you got first? Fell down? 621 00:32:05,680 --> 00:32:08,840 Speaker 1: It minus courtesy of Matt Levine, who wrote about this 622 00:32:08,920 --> 00:32:12,200 Speaker 1: in one of his columns this week, and he pointed 623 00:32:12,200 --> 00:32:17,560 Speaker 1: out that the UK branch of Santander Bank is trying 624 00:32:17,560 --> 00:32:20,520 Speaker 1: to recover a hundred seventy five million dollars that they 625 00:32:20,880 --> 00:32:25,800 Speaker 1: accidentally sent to tens of thousands of people on Christmas Day. 626 00:32:26,080 --> 00:32:29,680 Speaker 1: And so Matt matt Levin's suggestion is just put out 627 00:32:29,680 --> 00:32:32,560 Speaker 1: a press release and say sent in their UK just 628 00:32:32,600 --> 00:32:35,480 Speaker 1: gave out a hundred seventy five million in Christmas presents 629 00:32:35,520 --> 00:32:39,120 Speaker 1: to thousands of people. You know, Wow? What what? Have 630 00:32:39,240 --> 00:32:41,480 Speaker 1: people say, Wow, what a good good bank this is, 631 00:32:41,520 --> 00:32:44,360 Speaker 1: and I really like that. I doubt that they'll follow 632 00:32:44,960 --> 00:32:48,200 Speaker 1: follow through with the suggestion, but it's a really good one. 633 00:32:48,320 --> 00:32:51,320 Speaker 1: I think the assumption being that the marketing value of 634 00:32:51,880 --> 00:32:55,560 Speaker 1: hundreds they earned media as they say, from exactly, that's 635 00:32:55,640 --> 00:32:57,560 Speaker 1: it's in thing and he might be onto something there 636 00:32:57,720 --> 00:32:59,680 Speaker 1: that's a big spend, though I don't know, we'll see 637 00:33:00,000 --> 00:33:02,160 Speaker 1: regardless or not. I think I might open an account 638 00:33:02,160 --> 00:33:07,600 Speaker 1: with sintender just just in case, in case it happens again. Yeah, 639 00:33:07,920 --> 00:33:09,880 Speaker 1: how about you, Chris, what's the craziest thing you saw 640 00:33:09,920 --> 00:33:12,720 Speaker 1: this week? You know, I've been racking my brain over 641 00:33:12,720 --> 00:33:15,560 Speaker 1: this and I've come up with a whole lot of nothing. 642 00:33:15,920 --> 00:33:19,040 Speaker 1: But the coolest craziest thing I have seen in recent 643 00:33:19,120 --> 00:33:22,120 Speaker 1: I will say recent weeks, they've girl did a cover 644 00:33:22,320 --> 00:33:25,560 Speaker 1: a Barry Manilow's Copa Cabana. So if you haven't seen it, 645 00:33:25,760 --> 00:33:28,960 Speaker 1: you gotta check it out. It is fantastic. I will 646 00:33:29,040 --> 00:33:31,120 Speaker 1: check that out. You can pull it up on YouTube. 647 00:33:31,600 --> 00:33:35,680 Speaker 1: It's super cool, and it's something as equity markets melt 648 00:33:35,800 --> 00:33:38,760 Speaker 1: or or you know, rollover. It's something that could brent 649 00:33:38,800 --> 00:33:40,680 Speaker 1: you up or cheer you up. So it's pretty good. 650 00:33:40,800 --> 00:33:43,920 Speaker 1: We'll leave it on that one. That's pretty good. Anything else, Chris, 651 00:33:43,960 --> 00:33:46,600 Speaker 1: that that's a pretty good one. I'll let you live 652 00:33:46,640 --> 00:33:48,800 Speaker 1: with that. Unless you got something better. That's that's a 653 00:33:48,800 --> 00:33:51,320 Speaker 1: good one, all right, I'll give you mine. And again, 654 00:33:51,480 --> 00:33:54,040 Speaker 1: you know, if this sends up getting me canceled, it 655 00:33:54,120 --> 00:33:56,080 Speaker 1: was nice knowing you guys. Best of luck to the 656 00:33:56,080 --> 00:33:58,600 Speaker 1: new co host of of What Goes Up. But I 657 00:33:58,640 --> 00:34:01,600 Speaker 1: have to be true to revealing the craziest thing I 658 00:34:01,640 --> 00:34:04,840 Speaker 1: saw in markets in the weekend. This is courtesy of 659 00:34:04,880 --> 00:34:09,040 Speaker 1: The New York Post, which right there, you know, brace yourself, 660 00:34:09,520 --> 00:34:12,520 Speaker 1: adjust your chin strap as they say. Um, it's about 661 00:34:12,600 --> 00:34:16,759 Speaker 1: a reality TV star named Stephanie Mato or Matto, I'm 662 00:34:16,760 --> 00:34:19,000 Speaker 1: not sure how you pronounced it. She was the star 663 00:34:19,239 --> 00:34:22,840 Speaker 1: of a show called ninety Day Fiancee on t l C. 664 00:34:23,160 --> 00:34:25,680 Speaker 1: I've never seen Have you seen the show, Bilda? I 665 00:34:25,760 --> 00:34:29,640 Speaker 1: have you have seen this? Unluckily I've seen it as well. 666 00:34:30,120 --> 00:34:32,560 Speaker 1: My wife has watched a few times and I've been 667 00:34:32,560 --> 00:34:35,160 Speaker 1: stuck watching it. It draws you in. Okay, all right, 668 00:34:35,840 --> 00:34:39,080 Speaker 1: so you guys are are familiar. So this woman, apparently 669 00:34:39,080 --> 00:34:42,320 Speaker 1: after the show, gained a very strong following of fans 670 00:34:42,640 --> 00:34:47,439 Speaker 1: on social media. Uh, and she started, I can't even 671 00:34:47,480 --> 00:34:50,279 Speaker 1: I'm so in trouble for this, but I need to 672 00:34:50,320 --> 00:34:53,839 Speaker 1: get it up. I read this story was tw Yeah. 673 00:34:54,080 --> 00:34:57,560 Speaker 1: Some some fans suggested, uh that if she were to 674 00:34:57,560 --> 00:35:01,040 Speaker 1: pass gas into a jar, they would just that jar 675 00:35:01,200 --> 00:35:05,120 Speaker 1: of flatulence. Uh. As The York Post put it, she 676 00:35:05,239 --> 00:35:09,600 Speaker 1: launched launched a guest adventure, peddling her fancy flash lence 677 00:35:09,640 --> 00:35:13,120 Speaker 1: to strangers and blew awaye people on social media. When 678 00:35:13,160 --> 00:35:16,840 Speaker 1: she recently announced that she makes more than blank a 679 00:35:16,920 --> 00:35:20,640 Speaker 1: week doing this. So it's time to play prices, right, guys, 680 00:35:20,680 --> 00:35:24,200 Speaker 1: how much do you think this woman makes per week 681 00:35:24,800 --> 00:35:27,960 Speaker 1: with this business endeavor I came in by. This is 682 00:35:27,960 --> 00:35:30,080 Speaker 1: a pretty high margin product. When you think about it, 683 00:35:30,120 --> 00:35:32,960 Speaker 1: you know, it's it's the Uh, it's just the jar. Really, 684 00:35:33,120 --> 00:35:39,520 Speaker 1: just potentially, what's your guest per per week weekly income? Yeah, 685 00:35:39,600 --> 00:35:43,160 Speaker 1: not a not a per a jar basis, but but 686 00:35:43,640 --> 00:35:46,240 Speaker 1: per week. They don't think they gave the per jar cost. 687 00:35:47,520 --> 00:35:52,319 Speaker 1: I'll see dollars. That's that's that's not bad, fifty grand 688 00:35:52,360 --> 00:35:58,319 Speaker 1: a week. But here's the problem. She did it too much. 689 00:35:59,360 --> 00:36:05,440 Speaker 1: She did she the debate. The demand was so high 690 00:36:05,840 --> 00:36:08,880 Speaker 1: that she had to adjust her her diet to accommodate 691 00:36:08,960 --> 00:36:12,640 Speaker 1: both demands, so so she started eating it. Said her 692 00:36:12,760 --> 00:36:16,400 Speaker 1: her diet included black bean salad, I mean in ham 693 00:36:16,400 --> 00:36:18,600 Speaker 1: and pepper omelets. I gotta say, not that far different 694 00:36:18,640 --> 00:36:21,480 Speaker 1: from my normal diet, as which tells you something. And 695 00:36:21,840 --> 00:36:25,600 Speaker 1: what happened is she suddenly was overcome with chest pains 696 00:36:25,880 --> 00:36:28,600 Speaker 1: and she thought she was having a heart attack. Got 697 00:36:28,640 --> 00:36:31,799 Speaker 1: rushed to the hospital and the doctor said, no, it's 698 00:36:31,880 --> 00:36:34,520 Speaker 1: not a heart attack. You've just been eating too many 699 00:36:34,520 --> 00:36:37,560 Speaker 1: guessy foods and we recommend you you stop this and 700 00:36:38,440 --> 00:36:43,239 Speaker 1: take some some gas alleviating medicine. So her it only 701 00:36:43,320 --> 00:36:45,439 Speaker 1: lasted a few weeks. I think she netted two thousand 702 00:36:45,440 --> 00:36:48,400 Speaker 1: dollars doing this. But here's my favorite part and what 703 00:36:49,160 --> 00:36:52,400 Speaker 1: really qualifies it for the craziest thing I've seen in 704 00:36:52,480 --> 00:36:55,560 Speaker 1: markets this week, she said, final quote of the story. 705 00:36:56,080 --> 00:36:58,920 Speaker 1: I think everything happens for a reason. And although my 706 00:36:58,960 --> 00:37:01,359 Speaker 1: fart selling days are over, I am going to save 707 00:37:01,400 --> 00:37:03,239 Speaker 1: the money I made and I'll put something in the 708 00:37:03,320 --> 00:37:11,560 Speaker 1: crypto perfect two story and and ending to a story Yes, yes, 709 00:37:11,640 --> 00:37:13,479 Speaker 1: but I think I don't know it was a false 710 00:37:13,520 --> 00:37:15,520 Speaker 1: form on that heart attack. I worry that if she 711 00:37:15,600 --> 00:37:18,759 Speaker 1: puts all this money into crypto, that you may in 712 00:37:18,760 --> 00:37:21,040 Speaker 1: do some actual heart attack given the volatility. I don't know. 713 00:37:21,200 --> 00:37:24,120 Speaker 1: I died. Not a financial advisor here, just a guy 714 00:37:24,120 --> 00:37:26,440 Speaker 1: with a blanket over his head, sipped in the bathroom. 715 00:37:26,480 --> 00:37:29,480 Speaker 1: But if she's listening, I would I would advise maybe, 716 00:37:30,160 --> 00:37:33,719 Speaker 1: I don't know, some quality, some quality stocks like Chris suggests, 717 00:37:34,040 --> 00:37:36,800 Speaker 1: and not putting that up, that very hard earned money 718 00:37:37,000 --> 00:37:40,600 Speaker 1: into crypto. Just me, Mike, this is your this is 719 00:37:40,640 --> 00:37:44,040 Speaker 1: your weirdest week. You're hiding under a blanket, and your 720 00:37:44,080 --> 00:37:48,680 Speaker 1: weirdest thing is the weirdest thing that you've potentially ever flagged. 721 00:37:48,960 --> 00:37:51,760 Speaker 1: Something's gone wrong, very wrong in my life. Blah dada. 722 00:37:51,800 --> 00:37:54,160 Speaker 1: I don't know what it is, but it can only 723 00:37:54,160 --> 00:37:59,360 Speaker 1: go off from here. Let's hope we'll see anyway. Chris, 724 00:37:59,400 --> 00:38:01,560 Speaker 1: great to talk, Kia. I can understand if you never 725 00:38:01,600 --> 00:38:03,719 Speaker 1: want to associate with with me again after that one. 726 00:38:05,080 --> 00:38:08,120 Speaker 1: So sorry. I asked you to come on. If you 727 00:38:08,160 --> 00:38:10,879 Speaker 1: can look past it, we we love to be back 728 00:38:10,920 --> 00:38:14,480 Speaker 1: on against it. Thanks guys, and as always, very informative 729 00:38:14,520 --> 00:38:18,480 Speaker 1: and very entertaining. Much appreciated. Thank you for coming back 730 00:38:18,520 --> 00:38:28,839 Speaker 1: on what goes up. We'll be back next week. Until then, 731 00:38:28,840 --> 00:38:31,720 Speaker 1: you can find us on the Bloomberg Terminal website and app, 732 00:38:31,880 --> 00:38:34,600 Speaker 1: or wherever you get your podcasts. We'd love it if 733 00:38:34,600 --> 00:38:36,520 Speaker 1: you took the time to rate and review the show 734 00:38:36,560 --> 00:38:39,759 Speaker 1: on Apple Podcasts so more listeners can find us. And 735 00:38:39,840 --> 00:38:42,880 Speaker 1: you can find us on Twitter, follow me at Reaganonymous. 736 00:38:43,160 --> 00:38:46,319 Speaker 1: The Dotta Hirich is at the Fildtta Hirich. You can 737 00:38:46,360 --> 00:38:50,000 Speaker 1: also follow Bloomberg Podcasts at Podcasts and thank you to 738 00:38:50,040 --> 00:38:53,319 Speaker 1: Charlie Paulla Bloomberg Radio. What Goes Up is produced by 739 00:38:53,360 --> 00:38:56,680 Speaker 1: Laura Carlson. The head of Bloomberg Podcast is Francesco Leavy. 740 00:38:57,280 --> 00:39:07,680 Speaker 1: Thanks for listening, See you next time. That n