1 00:00:13,800 --> 00:00:17,360 Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast. 2 00:00:17,560 --> 00:00:19,520 Speaker 1: My name is Mike Creagan. I'm a senior editor at 3 00:00:19,560 --> 00:00:22,480 Speaker 1: Bloomberg and then well down to Park across Acid reporter 4 00:00:22,520 --> 00:00:25,400 Speaker 1: with Bloomberg. And this week on the show, well, it 5 00:00:25,480 --> 00:00:28,240 Speaker 1: was sort of a monumental week with two main items 6 00:00:28,280 --> 00:00:32,320 Speaker 1: dominating headlines. On Wednesday, the Federal Reserve boosted interest rates 7 00:00:32,360 --> 00:00:35,000 Speaker 1: by three quarters of a percentage point. But then on 8 00:00:35,040 --> 00:00:37,680 Speaker 1: Thursday we learned that the economy actually shrank for a 9 00:00:37,760 --> 00:00:41,000 Speaker 1: second consecutive quarter. We're not going to get into the 10 00:00:41,000 --> 00:00:44,680 Speaker 1: big debate about whether this is or isn't technically a recession, 11 00:00:44,960 --> 00:00:47,479 Speaker 1: or whether it's wise for the Fed to keep jacking 12 00:00:47,560 --> 00:00:50,000 Speaker 1: up rates at a time like this, But what we 13 00:00:50,040 --> 00:00:52,400 Speaker 1: do want to talk about is, well, what exactly should 14 00:00:52,440 --> 00:00:56,440 Speaker 1: investors do in this strange environment we're in. Our guests 15 00:00:56,440 --> 00:00:59,320 Speaker 1: are an investment advisor with a strong Wall Street pedigree, 16 00:00:59,520 --> 00:01:01,600 Speaker 1: as well as one of our own reporters at Bloomberg 17 00:01:01,720 --> 00:01:04,160 Speaker 1: who will help us get the temperature of the sentiment 18 00:01:04,360 --> 00:01:08,880 Speaker 1: among investors out there. But Phil dona Uh. First off, 19 00:01:09,240 --> 00:01:12,480 Speaker 1: speaking of temperature, you know, I like to tease you 20 00:01:12,600 --> 00:01:15,760 Speaker 1: city slickers who live in Manhattan for your lack of 21 00:01:15,920 --> 00:01:19,680 Speaker 1: major appliances. You know, you have to do your own dishes. 22 00:01:20,120 --> 00:01:22,559 Speaker 1: We have to wash our clothes in our bathtubs. Yeah, 23 00:01:22,920 --> 00:01:25,640 Speaker 1: no washer dryer. That's what I do. You just like 24 00:01:25,760 --> 00:01:29,640 Speaker 1: get in the shower fully dressed. Basically you've got like 25 00:01:29,720 --> 00:01:32,440 Speaker 1: your your shampoo, your conditioner, and some tide in there 26 00:01:32,480 --> 00:01:34,679 Speaker 1: and said, and then you hang it up outside so 27 00:01:34,760 --> 00:01:38,240 Speaker 1: you can dry, you know, outside your window. Fascinating. Fascinating. 28 00:01:38,680 --> 00:01:42,000 Speaker 1: Although the other night it occurred to me that in 29 00:01:42,040 --> 00:01:44,240 Speaker 1: the city you are missing out on one of the biggest, 30 00:01:44,600 --> 00:01:50,200 Speaker 1: most annoying headaches of suburban life, especially this summer, is 31 00:01:50,240 --> 00:01:53,480 Speaker 1: it's been so hot and dry. My lawn is just toast. 32 00:01:53,760 --> 00:01:56,960 Speaker 1: It's just completely burnt out. And I'm not a big 33 00:01:57,040 --> 00:02:00,080 Speaker 1: lawn guy. I don't have sprinklers like it used to me. 34 00:02:00,120 --> 00:02:02,200 Speaker 1: I could just go out with the hose and you know, 35 00:02:02,520 --> 00:02:04,720 Speaker 1: wet it down every couple of nights and be fine. 36 00:02:05,240 --> 00:02:07,160 Speaker 1: Most of my neighbors have sprinklers, and I think they 37 00:02:07,240 --> 00:02:11,119 Speaker 1: programmed them to turn on as I'm walking the train. Yeah, 38 00:02:11,200 --> 00:02:12,760 Speaker 1: and then they get get me on the zoom camera. 39 00:02:12,760 --> 00:02:16,280 Speaker 1: I'm pretty sure sure that's what's going on. But it's 40 00:02:16,320 --> 00:02:19,680 Speaker 1: like it's like the dust bowl out there. And I 41 00:02:19,680 --> 00:02:22,040 Speaker 1: gotta say, if you're a suburban dad, this is a 42 00:02:22,040 --> 00:02:24,520 Speaker 1: big deal. This is like, I'm worried the other dads 43 00:02:24,560 --> 00:02:27,640 Speaker 1: are gonna have an intervention with me soon about my lawn. 44 00:02:28,120 --> 00:02:31,959 Speaker 1: I'm it's it's getting traumatic, so looking ugly. In other words, 45 00:02:32,160 --> 00:02:35,240 Speaker 1: it is it is. It's so you you, Um, you've 46 00:02:35,240 --> 00:02:37,120 Speaker 1: got one up on me with that. You can always 47 00:02:37,160 --> 00:02:39,800 Speaker 1: if next time I teach you about um doing your 48 00:02:39,880 --> 00:02:43,560 Speaker 1: laundry in the in the shower, you can get about 49 00:02:43,600 --> 00:02:46,480 Speaker 1: the lawn. I will. But it also made me realize, 50 00:02:46,520 --> 00:02:49,960 Speaker 1: I do think agriculture and this drought and this heat 51 00:02:50,240 --> 00:02:52,840 Speaker 1: um is a big story. And I think we need 52 00:02:52,880 --> 00:02:56,880 Speaker 1: to get a agg trader on the show. Um, maybe 53 00:02:56,919 --> 00:03:02,359 Speaker 1: someone who trades. We were swayed beans lean hog lear 54 00:03:02,520 --> 00:03:05,160 Speaker 1: Hoggs trader on because lean Hoggs are killing it this year. 55 00:03:05,160 --> 00:03:09,320 Speaker 1: They're they're up. Yeah. So if any listeners have ideas, 56 00:03:09,680 --> 00:03:13,080 Speaker 1: uh for some good hog traders for us, by all means, 57 00:03:13,520 --> 00:03:16,760 Speaker 1: tweeted us in the normal places and we'll try to 58 00:03:16,800 --> 00:03:20,799 Speaker 1: get one on. Yes, all recommendations welcome. That's a great idea, Mike, 59 00:03:21,120 --> 00:03:29,600 Speaker 1: all right, My first I think finally ever your first yes, finally, 60 00:03:30,960 --> 00:03:33,560 Speaker 1: but I do want to introduce our guests for this week. 61 00:03:33,720 --> 00:03:36,440 Speaker 1: We have Emily Grafo, she's a Cross Acid reporter with 62 00:03:36,560 --> 00:03:39,920 Speaker 1: us joining us this week. And we also have Mimi Duff. 63 00:03:40,760 --> 00:03:45,120 Speaker 1: She's the managing director and Senior Client Advisor at gen Trust. 64 00:03:45,400 --> 00:03:48,520 Speaker 1: So welcome to both of you. Thank you, thank you, 65 00:03:48,880 --> 00:03:50,840 Speaker 1: And maybe I want to start with you. Maybe you 66 00:03:50,840 --> 00:03:52,640 Speaker 1: can just tell us a little bit about you know, 67 00:03:52,760 --> 00:03:55,480 Speaker 1: Mike mentioned your your Wall Street pedige, tell us a 68 00:03:55,520 --> 00:03:58,080 Speaker 1: little bit about your background, and tell us a little 69 00:03:58,080 --> 00:04:01,360 Speaker 1: bit about what gen Trust is. But but me me first, 70 00:04:01,400 --> 00:04:05,400 Speaker 1: most importantly, how's your law on doing right? Mike? I'm 71 00:04:05,440 --> 00:04:07,840 Speaker 1: now going to be on the lookout for you because 72 00:04:07,840 --> 00:04:10,840 Speaker 1: I don't know where your your property is, but I've 73 00:04:10,880 --> 00:04:14,640 Speaker 1: seen some folks that are in in dire need. Um. 74 00:04:14,680 --> 00:04:17,479 Speaker 1: I'm just glad that my lawn people left about ten 75 00:04:17,520 --> 00:04:21,320 Speaker 1: minutes before this podcast. That's the truth, because it was 76 00:04:21,320 --> 00:04:26,160 Speaker 1: a little loud no law intervention for you. I'm worried. 77 00:04:26,360 --> 00:04:28,360 Speaker 1: I know all the dads in my town are gonna 78 00:04:28,680 --> 00:04:31,760 Speaker 1: show up at my house one night, you know, in 79 00:04:31,839 --> 00:04:34,040 Speaker 1: crisis mode, like what are we going to do about this? Guys? 80 00:04:34,320 --> 00:04:38,360 Speaker 1: But carry on lines point tell us about your background 81 00:04:38,480 --> 00:04:42,960 Speaker 1: and about interruest. Yeah, so your listeners can't see me today, 82 00:04:43,040 --> 00:04:46,640 Speaker 1: but I'm I look a lot younger than I am. 83 00:04:46,760 --> 00:04:50,599 Speaker 1: I have my start on Wall Street in ninety three UM, 84 00:04:50,640 --> 00:04:54,440 Speaker 1: after studying engineering. At that time, they were hiring a 85 00:04:54,440 --> 00:04:56,760 Speaker 1: lot of math and quanti people to go to Wall Street. 86 00:04:57,160 --> 00:04:59,840 Speaker 1: So I was lucky enough to land at Goldman and 87 00:05:00,000 --> 00:05:03,400 Speaker 1: I spent my first eleven years their, first in research 88 00:05:03,440 --> 00:05:07,279 Speaker 1: and then in bond trading, where I traded most types 89 00:05:07,320 --> 00:05:11,599 Speaker 1: of interest rate fixed income products. I spent four years 90 00:05:11,640 --> 00:05:14,520 Speaker 1: in London there and then I joined Barclays to run 91 00:05:14,560 --> 00:05:18,560 Speaker 1: their interest rate swap trading desk. I was there for 92 00:05:18,560 --> 00:05:21,120 Speaker 1: for many years, and then I was at Tutor, which 93 00:05:21,160 --> 00:05:23,720 Speaker 1: is a global macro shop. Then I did a bit 94 00:05:23,760 --> 00:05:28,360 Speaker 1: of consulting and then rejoined some former colleagues at gen Trust. 95 00:05:28,560 --> 00:05:31,440 Speaker 1: So what is gen Trust. It was founded by my 96 00:05:31,600 --> 00:05:36,720 Speaker 1: former colleague about ten years ago UM from Barclays and 97 00:05:37,320 --> 00:05:40,040 Speaker 1: gen Trust is a multi family office r I A 98 00:05:40,800 --> 00:05:46,599 Speaker 1: with the goal of providing sophisticated and importantly independent financial 99 00:05:46,640 --> 00:05:52,200 Speaker 1: management for for wealthy families and small institutions. So the 100 00:05:52,240 --> 00:05:55,960 Speaker 1: difference that we can provide our clients is that we 101 00:05:56,080 --> 00:05:58,679 Speaker 1: bring an institutional approach. We have more than a hundred 102 00:05:58,680 --> 00:06:03,640 Speaker 1: and fifty years of instant tutional trading experience at both 103 00:06:03,680 --> 00:06:07,719 Speaker 1: the major Wall Street firms and hedge funds. And we 104 00:06:07,839 --> 00:06:12,080 Speaker 1: also are transparent and accountable. So that's kind of ore 105 00:06:12,360 --> 00:06:15,160 Speaker 1: the key point. And we managed three billion under management 106 00:06:15,279 --> 00:06:19,560 Speaker 1: right now. Okay, Mimi. Obviously the big news this week 107 00:06:19,720 --> 00:06:21,680 Speaker 1: was the FED. I'm hoping you can just lay out 108 00:06:21,720 --> 00:06:24,880 Speaker 1: for our listeners what exactly we saw from Powell and 109 00:06:24,920 --> 00:06:29,080 Speaker 1: then what you are expecting we see going forward. Yeah, 110 00:06:29,160 --> 00:06:31,720 Speaker 1: so the FED is on the most aggressive rate path 111 00:06:31,800 --> 00:06:37,200 Speaker 1: that we've seen in since easily. UM. Coming into the year, 112 00:06:37,760 --> 00:06:41,359 Speaker 1: people were expecting three rate hikes or seventy five basis 113 00:06:41,400 --> 00:06:45,479 Speaker 1: points for the whole year UM FED funds. We've already 114 00:06:45,520 --> 00:06:50,000 Speaker 1: seen three significant rate heights, the last two seventy five clips. 115 00:06:50,120 --> 00:06:54,360 Speaker 1: Those are that's three quarters of a percentage point each UM. 116 00:06:54,800 --> 00:06:58,960 Speaker 1: And what we're dealing with is a very strong inflationary environment. 117 00:06:59,000 --> 00:07:02,160 Speaker 1: I think most most listeners know that the groceries cost 118 00:07:02,200 --> 00:07:04,159 Speaker 1: a lot more and the gas costs a lot more. 119 00:07:04,800 --> 00:07:06,760 Speaker 1: And at the end of the day, the Federal Reserve, 120 00:07:06,960 --> 00:07:10,640 Speaker 1: the US Federal Reserve has a dual mandate of maintaining 121 00:07:10,720 --> 00:07:16,200 Speaker 1: maximum employment but also maintaining price stability, and their inflation 122 00:07:16,240 --> 00:07:20,680 Speaker 1: goal is two percent. So cp I all items is 123 00:07:20,760 --> 00:07:25,560 Speaker 1: running at nine point one percent UM for PC which 124 00:07:25,600 --> 00:07:29,480 Speaker 1: is another key metric that they watch. And we we 125 00:07:29,600 --> 00:07:33,040 Speaker 1: have that data print tomorrow. That's way you know. I 126 00:07:33,040 --> 00:07:35,440 Speaker 1: think it was four point seven percent last month, but 127 00:07:35,520 --> 00:07:39,400 Speaker 1: we'll we'll wait for tomorrow's data points. So inflation is 128 00:07:39,400 --> 00:07:43,000 Speaker 1: is missing on the top side, so demonstrably that the 129 00:07:43,000 --> 00:07:45,960 Speaker 1: FED is putting that front and foremost. And I would 130 00:07:46,000 --> 00:07:48,680 Speaker 1: add also that it's not a US problem, right the 131 00:07:48,720 --> 00:07:52,760 Speaker 1: Europeans are also dealing with very high inflation. European central 132 00:07:52,760 --> 00:07:58,200 Speaker 1: Bank is a single mandate central bank inflation for instance. So, um, 133 00:07:58,400 --> 00:08:01,840 Speaker 1: we're going through a lot out of supply constraints. Are 134 00:08:02,480 --> 00:08:05,160 Speaker 1: are contributing to the problem. I don't think it's the 135 00:08:05,240 --> 00:08:09,640 Speaker 1: single contribution there, But the FET is really putting this 136 00:08:09,800 --> 00:08:15,080 Speaker 1: for first and foremost, and um, they're putting it first rightly. 137 00:08:15,160 --> 00:08:18,240 Speaker 1: So and I think, you know, somebody asked Powell a 138 00:08:18,360 --> 00:08:21,360 Speaker 1: question yesterday basically do you think it started too late? 139 00:08:22,000 --> 00:08:26,000 Speaker 1: And he said he probably would have done things differently 140 00:08:26,080 --> 00:08:30,480 Speaker 1: knowing what he knows. Now, Um, the you know, at 141 00:08:30,520 --> 00:08:32,120 Speaker 1: the start of the year, we weren't looking at the 142 00:08:32,160 --> 00:08:37,480 Speaker 1: Russia Ukraine situation. But he you know, he also added, 143 00:08:37,520 --> 00:08:40,600 Speaker 1: would it have helped if he started three months earlier? 144 00:08:40,920 --> 00:08:43,440 Speaker 1: Not clear. They're on the job right now. I think 145 00:08:43,480 --> 00:08:47,080 Speaker 1: that markets recognize that. Yeah, maybe I wanted to lean 146 00:08:47,160 --> 00:08:51,480 Speaker 1: into your background in the fixed income markets a little bit, um, 147 00:08:51,559 --> 00:08:54,160 Speaker 1: because one thing that's called my attention is these break 148 00:08:54,240 --> 00:08:57,800 Speaker 1: even rates UM, which for you know, the unfamiliar basically 149 00:08:58,160 --> 00:09:01,360 Speaker 1: the bond market's best guests out where inflation will be 150 00:09:01,600 --> 00:09:04,200 Speaker 1: over the next five or ten or or however many years. 151 00:09:04,720 --> 00:09:06,920 Speaker 1: And if looking at them at least looking at five 152 00:09:07,000 --> 00:09:11,040 Speaker 1: years especially UM, they've come down quite a bit um. 153 00:09:11,120 --> 00:09:13,719 Speaker 1: And when you combine it with stuff like the University 154 00:09:13,720 --> 00:09:17,959 Speaker 1: of Michigan uh sentiment and their question about inflation, and 155 00:09:18,080 --> 00:09:22,360 Speaker 1: just you know, the price action we've seen in commodities 156 00:09:22,640 --> 00:09:26,160 Speaker 1: in the last month or two UM, it does sort 157 00:09:26,200 --> 00:09:28,440 Speaker 1: of all add up to the idea that maybe the 158 00:09:28,520 --> 00:09:32,480 Speaker 1: fever has broken with inflation figures crossed, knock on wood, 159 00:09:32,800 --> 00:09:36,400 Speaker 1: you know, and everything else. How are you thinking about that, especially, 160 00:09:36,520 --> 00:09:38,599 Speaker 1: you know, viewing it through the lens of of a 161 00:09:38,800 --> 00:09:42,319 Speaker 1: sort of a bond market expert, yeah, So I think 162 00:09:42,360 --> 00:09:44,200 Speaker 1: your point is a good one, that the market at 163 00:09:44,280 --> 00:09:48,360 Speaker 1: least is perceiving that longer term inflation is more under 164 00:09:48,360 --> 00:09:53,920 Speaker 1: control and UM, just to put it in perspective, we 165 00:09:53,920 --> 00:09:57,240 Speaker 1: were long something called TIPS, which is, you know, an 166 00:09:57,240 --> 00:10:03,320 Speaker 1: inflationary bond UM early last year, throughout most of last year, 167 00:10:03,520 --> 00:10:08,120 Speaker 1: ten year break evens got to three and we felt like, wow, 168 00:10:08,200 --> 00:10:12,240 Speaker 1: that means the market is implying that the average inflation 169 00:10:12,440 --> 00:10:15,120 Speaker 1: over the next ten years is going to be three percent, 170 00:10:15,360 --> 00:10:18,400 Speaker 1: knowing that the Fed's mandate is two percent. So we 171 00:10:18,480 --> 00:10:21,200 Speaker 1: felt like at that point the market had really woken 172 00:10:21,320 --> 00:10:24,760 Speaker 1: up to the inflationary pressures. Since then, we've come way 173 00:10:24,800 --> 00:10:29,960 Speaker 1: down UM to you know, lower two handles really and 174 00:10:30,200 --> 00:10:35,120 Speaker 1: to your point, even the one year inflation break events 175 00:10:35,440 --> 00:10:42,840 Speaker 1: show market decreases in expectations at least for UH for 176 00:10:43,240 --> 00:10:48,240 Speaker 1: overall inflation. Now, these break evens, they're based off of 177 00:10:48,400 --> 00:10:52,480 Speaker 1: TIPS pricing, which is an all items cp I. It 178 00:10:52,600 --> 00:10:58,320 Speaker 1: does include all the volatile components of of UM, food 179 00:10:58,400 --> 00:11:02,680 Speaker 1: and energy. And to your point that we are off 180 00:11:02,720 --> 00:11:05,839 Speaker 1: the boil on some of the energy sectors, but food 181 00:11:05,840 --> 00:11:09,320 Speaker 1: and inflation is still carrying on. So I guess on 182 00:11:09,400 --> 00:11:13,040 Speaker 1: the margin, I would say that maybe even the market 183 00:11:13,080 --> 00:11:16,520 Speaker 1: has almost too much confidence that everything's gonna come right 184 00:11:16,520 --> 00:11:20,560 Speaker 1: back down into control in the next year. Having said that, 185 00:11:21,320 --> 00:11:24,080 Speaker 1: we know that their recession risks are a little higher 186 00:11:24,120 --> 00:11:27,720 Speaker 1: than any other day of the of your lifetime, let's say. 187 00:11:27,760 --> 00:11:30,120 Speaker 1: And the truth is, tips don't trade so well in 188 00:11:30,200 --> 00:11:35,560 Speaker 1: recessionary environments, so we don't have a strong opinion they're 189 00:11:35,600 --> 00:11:38,199 Speaker 1: out of our benchmark. We had them in the portfolios 190 00:11:38,240 --> 00:11:40,960 Speaker 1: for a long time, and we took them off when 191 00:11:41,000 --> 00:11:43,920 Speaker 1: those tenure break events got to three percent. We felt 192 00:11:43,960 --> 00:11:47,040 Speaker 1: like okay. But on the margin, I would say maybe 193 00:11:47,720 --> 00:11:52,000 Speaker 1: the market perception of the Fed's ability to control inflation 194 00:11:52,080 --> 00:11:54,400 Speaker 1: over the very near term one or two years is 195 00:11:55,240 --> 00:11:59,160 Speaker 1: could be a little over optimistic, but there is this 196 00:11:59,280 --> 00:12:02,360 Speaker 1: risk of RECESSI then out there and Emily, I want 197 00:12:02,400 --> 00:12:04,720 Speaker 1: to bring you in. You and I obviously spent a 198 00:12:04,760 --> 00:12:07,640 Speaker 1: lot of time talking to people like Mimi, talking to 199 00:12:07,720 --> 00:12:10,120 Speaker 1: strategies and money managers, and I want to get a 200 00:12:10,160 --> 00:12:12,839 Speaker 1: sense from you of the sense you're getting from them, 201 00:12:12,880 --> 00:12:15,440 Speaker 1: of how how you know what they're seeing in in 202 00:12:15,760 --> 00:12:20,959 Speaker 1: markets generally speaking, I mean certainly generally speaking, this has 203 00:12:21,080 --> 00:12:24,480 Speaker 1: absolutely been a very tough year to navigate. But some 204 00:12:24,600 --> 00:12:27,920 Speaker 1: of the portfolio managers that I speak with are now saying, 205 00:12:28,559 --> 00:12:31,320 Speaker 1: you know, while we don't, we haven't hit a stock 206 00:12:31,440 --> 00:12:34,400 Speaker 1: bottom yet. This is maybe a good time for investors 207 00:12:34,400 --> 00:12:38,280 Speaker 1: with a longer term time horizon to start adding to 208 00:12:38,440 --> 00:12:41,640 Speaker 1: some positions in names that have been beaten down so much, 209 00:12:41,960 --> 00:12:45,920 Speaker 1: particularly in mega cat tech. And there's some other strategists 210 00:12:45,920 --> 00:12:48,520 Speaker 1: who say maybe fixed income, now that yields are rising, 211 00:12:48,559 --> 00:12:51,240 Speaker 1: there warming up to that sector just a little bit. 212 00:12:51,640 --> 00:12:55,360 Speaker 1: But by and large, there's still uncertainty regarding what in 213 00:12:55,520 --> 00:12:59,040 Speaker 1: economic recession would mean for risk assets. And if we 214 00:12:59,160 --> 00:13:01,560 Speaker 1: get that recess shin, is it going to be a 215 00:13:01,600 --> 00:13:04,160 Speaker 1: short lived one or is it going to be something 216 00:13:04,200 --> 00:13:07,640 Speaker 1: more painful and longer. How about you, Mimi, what are 217 00:13:07,679 --> 00:13:09,560 Speaker 1: what are you warming up to? I mean, it's been 218 00:13:09,600 --> 00:13:12,960 Speaker 1: a year where everything's been down, stocks, bonds, credit, everything 219 00:13:13,000 --> 00:13:19,000 Speaker 1: but oil obviously. Uh, when everything's down, it seems to 220 00:13:19,000 --> 00:13:22,400 Speaker 1: me a trick environment to pick a bottom and anything 221 00:13:22,480 --> 00:13:24,720 Speaker 1: is Is there any asset class or any sectors that 222 00:13:24,760 --> 00:13:26,960 Speaker 1: are standing out to you as as the place to 223 00:13:26,960 --> 00:13:29,560 Speaker 1: overweight these days? Maybe maybe you and I need to 224 00:13:29,679 --> 00:13:34,320 Speaker 1: rename the podcast Mike to What Goes Down? That will 225 00:13:34,360 --> 00:13:41,120 Speaker 1: be too confusing. Well, when everything's down, we see opportunity 226 00:13:41,160 --> 00:13:45,080 Speaker 1: because we really, at our heart a bunch of you know, 227 00:13:45,720 --> 00:13:50,080 Speaker 1: risk takers from Wall Street, although we're managing long term, 228 00:13:50,200 --> 00:13:54,520 Speaker 1: long only money. So these entry points are so much 229 00:13:54,559 --> 00:13:59,160 Speaker 1: better than less falls entry points for somebody with a 230 00:13:59,160 --> 00:14:03,120 Speaker 1: tenure horizon, and um baskets of bonds can be bought 231 00:14:03,240 --> 00:14:06,280 Speaker 1: for yields. You know, with the ten year yield just 232 00:14:06,440 --> 00:14:09,560 Speaker 1: south of to seventy. Now, you know, you could probably 233 00:14:09,600 --> 00:14:14,080 Speaker 1: buy a basket of diversified bonds closer to three seventy yield. 234 00:14:14,240 --> 00:14:16,200 Speaker 1: That's a heck of a lot better than it was 235 00:14:16,280 --> 00:14:20,640 Speaker 1: when spreads were so much tighter outright, Treasury base yields 236 00:14:20,680 --> 00:14:24,120 Speaker 1: were so much lower last summer. On the equity side, 237 00:14:24,480 --> 00:14:28,600 Speaker 1: these draw downs that we've seen, like we saw earlier 238 00:14:28,640 --> 00:14:32,560 Speaker 1: this year, they're fairly common every three or four years, right, 239 00:14:32,640 --> 00:14:35,760 Speaker 1: The bigger draw downs in the zip code of thirty 240 00:14:35,880 --> 00:14:39,320 Speaker 1: or more percent, those typically come with the recession or 241 00:14:39,400 --> 00:14:44,080 Speaker 1: something a bit more existential. Right, So we've squared up. 242 00:14:44,160 --> 00:14:50,640 Speaker 1: We came into the year very um convicted towards higher rates. 243 00:14:51,160 --> 00:14:55,120 Speaker 1: We didn't like equity valuations. We hated tech valuations because 244 00:14:55,120 --> 00:14:58,840 Speaker 1: we felt like the higher both crowded positioning and higher 245 00:14:58,920 --> 00:15:02,440 Speaker 1: rates really could a number on them. So uh, and 246 00:15:02,640 --> 00:15:07,080 Speaker 1: long real assets overweight real assets, which we typically have 247 00:15:07,360 --> 00:15:12,000 Speaker 1: some baseline percentage of real assets and everybody's portfolios, and 248 00:15:12,040 --> 00:15:16,160 Speaker 1: we've really squared up to neutral across the board now. Um, 249 00:15:16,200 --> 00:15:20,680 Speaker 1: in terms of pockets of really interesting stuff. Biotech got 250 00:15:20,920 --> 00:15:25,120 Speaker 1: so cheap that more than of the names in the 251 00:15:25,200 --> 00:15:29,320 Speaker 1: index were training they had more cash on their balance 252 00:15:29,360 --> 00:15:32,960 Speaker 1: sheets than their market cap. So in terms of like 253 00:15:33,120 --> 00:15:37,280 Speaker 1: cheap sectors, we really think that the biotech definitely fulfilled 254 00:15:37,440 --> 00:15:42,080 Speaker 1: that that UM goal. Um, we've you know, we like 255 00:15:42,200 --> 00:15:46,680 Speaker 1: some other thematic trades over a longer term, uh, like 256 00:15:47,000 --> 00:15:51,480 Speaker 1: a clean energy theme. We really feel like, um, there 257 00:15:51,520 --> 00:15:56,240 Speaker 1: was an energy transition going on, albeit slowly before the 258 00:15:56,320 --> 00:16:00,520 Speaker 1: Russia Ukraine UM conflict, But of any thing, it's just 259 00:16:00,600 --> 00:16:05,680 Speaker 1: accelerated the need for further clean energy and energy diversification. 260 00:16:06,280 --> 00:16:09,960 Speaker 1: But overall, we love Entry now for putting money to 261 00:16:10,040 --> 00:16:12,720 Speaker 1: work over a longer term horizon. Our job is so 262 00:16:12,800 --> 00:16:17,960 Speaker 1: much easier to navigate these longer term themes. And speaking 263 00:16:18,000 --> 00:16:22,360 Speaker 1: to your question about recessionary fears, yes, risk of recession 264 00:16:22,480 --> 00:16:26,400 Speaker 1: is absolutely higher given that the FED is going through 265 00:16:26,480 --> 00:16:30,600 Speaker 1: one of the most aggressive rate hike campaigns that we've 266 00:16:30,640 --> 00:16:34,960 Speaker 1: seen in our lifetime. Having said that, you know, the 267 00:16:35,680 --> 00:16:39,960 Speaker 1: labor markets coming from a super strong place, the balance 268 00:16:40,000 --> 00:16:43,560 Speaker 1: sheets from households and corporates are are really short up, 269 00:16:43,920 --> 00:16:47,680 Speaker 1: and so we do feel like if we get a recession, 270 00:16:47,720 --> 00:16:57,880 Speaker 1: it doesn't have to necessarily be a deep one. Yeah. 271 00:16:58,000 --> 00:17:00,440 Speaker 1: I'd love to unpack that idea about by O tech 272 00:17:00,560 --> 00:17:03,600 Speaker 1: a little bit because it's kind of a fascinating sector, 273 00:17:03,720 --> 00:17:07,240 Speaker 1: especially when you drill down to the smaller, sort of 274 00:17:07,320 --> 00:17:11,040 Speaker 1: unproven experimental companies in this space. You know, I feel 275 00:17:11,080 --> 00:17:13,680 Speaker 1: like you can wake up one day and and one 276 00:17:13,680 --> 00:17:18,359 Speaker 1: of these random biotechs has a release out on on 277 00:17:18,400 --> 00:17:22,120 Speaker 1: the phase whatever trial, and you know, the stock either 278 00:17:22,119 --> 00:17:25,520 Speaker 1: goes up. So how you know is it a matter 279 00:17:25,640 --> 00:17:28,800 Speaker 1: of just sort of buying them all or buying a 280 00:17:28,800 --> 00:17:31,880 Speaker 1: big basket of them or there are certain names, um 281 00:17:32,359 --> 00:17:34,200 Speaker 1: they stick out. You do you stick with this sort 282 00:17:34,240 --> 00:17:36,760 Speaker 1: of tried and true leaders of the industry or just 283 00:17:37,400 --> 00:17:40,600 Speaker 1: kind of play the lottery and buy them all at once. Yeah, 284 00:17:40,680 --> 00:17:42,920 Speaker 1: So I'm glad you asked that question because I want 285 00:17:42,920 --> 00:17:46,000 Speaker 1: to clear something up that we're not stock pickers um 286 00:17:46,640 --> 00:17:51,240 Speaker 1: and most stock pickers don't outperform their indsease. So uh 287 00:17:51,400 --> 00:17:53,560 Speaker 1: Steva has a great report on that if you want 288 00:17:53,560 --> 00:17:56,240 Speaker 1: to see some interesting pie charts of like the narrow 289 00:17:56,280 --> 00:17:59,200 Speaker 1: sliver of the folks that actually can outperform their in disease. 290 00:17:59,760 --> 00:18:04,760 Speaker 1: So we really do believe in assets selection UM at 291 00:18:04,760 --> 00:18:10,040 Speaker 1: a broad level, diversification UM, and and primarily we invest 292 00:18:10,119 --> 00:18:13,159 Speaker 1: in e t s which for individual investors are so 293 00:18:13,240 --> 00:18:17,040 Speaker 1: much more tax advantaged. So UM. Now I do want 294 00:18:17,040 --> 00:18:20,320 Speaker 1: to add another feature to what's going on in the 295 00:18:20,400 --> 00:18:25,920 Speaker 1: overall technology sector. Rates are so far off their highs, right, 296 00:18:26,040 --> 00:18:28,800 Speaker 1: So ten year rates were up a three fifty. Now 297 00:18:28,800 --> 00:18:31,479 Speaker 1: we're south to seventy and that's really been a global 298 00:18:31,520 --> 00:18:33,920 Speaker 1: phenomenon to I want to I want to make that 299 00:18:34,040 --> 00:18:37,719 Speaker 1: point as well. But more stable rates can help these 300 00:18:37,920 --> 00:18:42,879 Speaker 1: kind of higher growth names stabilize as well. Right, like 301 00:18:43,000 --> 00:18:45,159 Speaker 1: some of the stuff that we saw earlier in the 302 00:18:45,240 --> 00:18:48,639 Speaker 1: year with some of the single name tex stocks down 303 00:18:49,160 --> 00:18:54,040 Speaker 1: you know, ten to really from their peaks accelerating to 304 00:18:54,080 --> 00:18:56,880 Speaker 1: the downside with the rate moves. I think that that 305 00:18:56,960 --> 00:19:00,399 Speaker 1: chapter's kind of behind us right now, at least in 306 00:19:00,440 --> 00:19:03,639 Speaker 1: the very near term. And then we me in the 307 00:19:03,720 --> 00:19:06,960 Speaker 1: notes you had sent over before we started the podcast. 308 00:19:07,000 --> 00:19:09,840 Speaker 1: I think you also said you like commodities, and I'm 309 00:19:09,840 --> 00:19:12,840 Speaker 1: hoping you can tell us a little bit more about that. Yeah, 310 00:19:12,880 --> 00:19:15,959 Speaker 1: so we like real assets and commodities in general and 311 00:19:16,000 --> 00:19:20,160 Speaker 1: portfolios just because we think it provides a longer term 312 00:19:20,160 --> 00:19:23,600 Speaker 1: inflation hedge. Again back to the thematic, were long term 313 00:19:23,800 --> 00:19:28,240 Speaker 1: long only investors. UM. We did take off. We had 314 00:19:28,359 --> 00:19:31,760 Speaker 1: overweights on coming into the year because we think that 315 00:19:31,840 --> 00:19:36,080 Speaker 1: in addition to this Russia Ukraine crisis and addition to 316 00:19:36,400 --> 00:19:42,159 Speaker 1: the some of the supply constraints that are going on, 317 00:19:42,320 --> 00:19:46,840 Speaker 1: there's some other factors under the surface, UM shifts in 318 00:19:46,960 --> 00:19:51,760 Speaker 1: labor supply, UM, that sort of thing that really are 319 00:19:51,840 --> 00:19:57,320 Speaker 1: driving kind of a more longer term inflationary backdrop. So 320 00:19:57,400 --> 00:20:01,119 Speaker 1: we had those on. Prices got to pretty crazy levels. 321 00:20:01,160 --> 00:20:04,800 Speaker 1: We've taken overweights off. We're not prepared to go underweight 322 00:20:04,840 --> 00:20:08,040 Speaker 1: here because some of these structural factors, like is the 323 00:20:08,080 --> 00:20:11,280 Speaker 1: workforce going all the folks that left the workforce, are 324 00:20:11,320 --> 00:20:14,760 Speaker 1: they coming back? I don't know. Like the market, the 325 00:20:14,880 --> 00:20:18,480 Speaker 1: labor market is super super tight right now, and you'd 326 00:20:18,480 --> 00:20:23,960 Speaker 1: think with payrolls with with UM employment cost index also 327 00:20:24,000 --> 00:20:27,520 Speaker 1: has been continuing to rise. We'll see that data point tomorrow. 328 00:20:28,400 --> 00:20:31,120 Speaker 1: But are these folks coming back? We have we need 329 00:20:31,240 --> 00:20:34,680 Speaker 1: time defend needs time to I'll add right like the chair, 330 00:20:34,680 --> 00:20:38,159 Speaker 1: Powell made it really clear that he's got eight weeks 331 00:20:38,200 --> 00:20:40,399 Speaker 1: of data in between this meeting and the next meeting 332 00:20:40,400 --> 00:20:43,600 Speaker 1: and he doesn't want to commit to anything. So that's 333 00:20:44,000 --> 00:20:46,600 Speaker 1: on back to your actual question that you asked. We 334 00:20:46,680 --> 00:20:50,520 Speaker 1: do think that real assets are an important part of 335 00:20:50,880 --> 00:20:55,359 Speaker 1: long term portfolios. Having said that, we don't UM. We 336 00:20:55,440 --> 00:20:57,600 Speaker 1: don't go and buy a bunch of front month oil 337 00:20:57,760 --> 00:21:00,399 Speaker 1: for our clients. It's just not the business that in 338 00:21:01,560 --> 00:21:09,320 Speaker 1: We're choosing some investments in agrabusiness, in precious metals, in UM, 339 00:21:09,359 --> 00:21:13,960 Speaker 1: in the producers of energy. Uh, just a broader set 340 00:21:14,240 --> 00:21:20,960 Speaker 1: of um of assets that frankly don't exhibit the volatility 341 00:21:21,000 --> 00:21:23,960 Speaker 1: of say the G s c I, which is the 342 00:21:24,000 --> 00:21:27,720 Speaker 1: primary index in the commodities, but is heavily driven to 343 00:21:27,840 --> 00:21:32,440 Speaker 1: front month oil contracts and massive swings. So it's more 344 00:21:32,680 --> 00:21:39,520 Speaker 1: of an appropriateness to hedge against longer term inflation MENI. 345 00:21:39,880 --> 00:21:42,440 Speaker 1: On the commodities front, I know one of the commodities 346 00:21:42,440 --> 00:21:45,000 Speaker 1: you like is uranium, and I'd love for you to 347 00:21:45,040 --> 00:21:47,520 Speaker 1: talk a little bit more about why you like uranium 348 00:21:47,600 --> 00:21:50,760 Speaker 1: and then how you're allocating to it. Is it through 349 00:21:51,400 --> 00:21:54,680 Speaker 1: uranium linked equities or some of these vehicles out there 350 00:21:54,720 --> 00:21:57,320 Speaker 1: that are a little bit more directly tied to the 351 00:21:57,359 --> 00:22:00,960 Speaker 1: price of the commodity itself. Yea. So we're in a 352 00:22:01,119 --> 00:22:05,800 Speaker 1: uranium E TA and UM and the idea behind that 353 00:22:05,960 --> 00:22:10,200 Speaker 1: is it goes along the lines of the energy independence theme. 354 00:22:10,760 --> 00:22:15,959 Speaker 1: Uranium is UM is an important in uh instrument in 355 00:22:16,520 --> 00:22:21,879 Speaker 1: nuclear energy and UM. We also we sort of picked 356 00:22:21,880 --> 00:22:24,040 Speaker 1: it up on the cheap, I'll tell you that, Like 357 00:22:24,080 --> 00:22:26,480 Speaker 1: we've it's been in our portfolios for some time. But 358 00:22:26,600 --> 00:22:29,919 Speaker 1: we like the clean energy and energy independence themes and 359 00:22:30,000 --> 00:22:32,520 Speaker 1: that really ties in there. And in terms of how 360 00:22:32,560 --> 00:22:35,440 Speaker 1: we're allocating, like we're just again going back to the 361 00:22:35,800 --> 00:22:38,760 Speaker 1: idea of diversification. We don't really bet the farm on 362 00:22:38,800 --> 00:22:41,159 Speaker 1: any one thing. It's just not the business we're in. 363 00:22:41,720 --> 00:22:44,320 Speaker 1: So what we will try to do is express a 364 00:22:44,400 --> 00:22:48,879 Speaker 1: theme through several different ways. And like for instance, in 365 00:22:48,960 --> 00:22:53,720 Speaker 1: the higher rates theme, we were long regional banks as 366 00:22:53,800 --> 00:22:56,200 Speaker 1: one of the as one of the ways to express 367 00:22:56,280 --> 00:22:59,760 Speaker 1: that theme. And while if you look at a chart 368 00:22:59,800 --> 00:23:03,840 Speaker 1: of reasonal banks doesn't look also grand, it actually has 369 00:23:03,920 --> 00:23:08,600 Speaker 1: been outperforming some of the broader in disease. So it's 370 00:23:08,640 --> 00:23:12,480 Speaker 1: done less poorly, if you will. So what we try 371 00:23:12,560 --> 00:23:16,240 Speaker 1: to try to pick up a theme in several ways. 372 00:23:17,240 --> 00:23:19,600 Speaker 1: Yeah wait, So so you're telling me you're not willing 373 00:23:19,640 --> 00:23:23,080 Speaker 1: to take except physical delivery of uranium, that that would 374 00:23:23,080 --> 00:23:25,359 Speaker 1: really be bad for your law And I think I 375 00:23:25,840 --> 00:23:28,520 Speaker 1: was going to suggest we dropped some off for you, Mike, Well, 376 00:23:28,600 --> 00:23:33,000 Speaker 1: thank you, a little thank you. Note. Well, I, you know, 377 00:23:33,119 --> 00:23:38,320 Speaker 1: energy is such an important theme this year, and energy independence. Um, 378 00:23:38,359 --> 00:23:41,400 Speaker 1: I guess part of the thesis there's that maybe countries 379 00:23:41,440 --> 00:23:45,399 Speaker 1: like Germany will will restart those those power plants that 380 00:23:45,440 --> 00:23:48,840 Speaker 1: they shut down years ago, and maybe other countries as 381 00:23:48,880 --> 00:23:51,800 Speaker 1: will too. But I can't help thinking there's sort of 382 00:23:51,800 --> 00:23:55,119 Speaker 1: this race against the clock right now in Europe. Um 383 00:23:55,160 --> 00:24:00,840 Speaker 1: as far as uh you know, winner is approaching, uh, 384 00:24:00,880 --> 00:24:05,560 Speaker 1: you know, very quickly. Vladimir Putin basically can turn the 385 00:24:05,640 --> 00:24:08,760 Speaker 1: spec ITTs on and off with the natural gas. How 386 00:24:08,800 --> 00:24:14,040 Speaker 1: big of a risk, um is an intensifying energy crunch 387 00:24:14,160 --> 00:24:16,520 Speaker 1: in Europe? Do you think to to not just Europe, 388 00:24:16,640 --> 00:24:18,800 Speaker 1: to our own economy, in the US and really the 389 00:24:18,920 --> 00:24:23,200 Speaker 1: entire world. It's a big risk. It's a big risk. 390 00:24:23,440 --> 00:24:25,560 Speaker 1: I mean, we've just seen what a hot summer looks like. 391 00:24:25,600 --> 00:24:29,360 Speaker 1: What if we see what a really cold winter looks like? Um? 392 00:24:29,960 --> 00:24:35,080 Speaker 1: And uh, the Europeans reliance on natural gas is massive 393 00:24:35,800 --> 00:24:42,200 Speaker 1: and putin is unpredictable, so UM, I know, I think 394 00:24:42,280 --> 00:24:44,920 Speaker 1: that's a it is a bit of a race against time. 395 00:24:44,960 --> 00:24:49,520 Speaker 1: But there's the short term, near term pressures, and then 396 00:24:49,560 --> 00:24:54,760 Speaker 1: I think that there's the longer term um thesis as well, 397 00:24:54,840 --> 00:24:59,239 Speaker 1: with summers continuing to get hotter and natural disasters, you know, 398 00:24:59,320 --> 00:25:03,760 Speaker 1: popping up more and more often forest fires. So I 399 00:25:04,200 --> 00:25:07,320 Speaker 1: think I think we have both a short term and 400 00:25:07,680 --> 00:25:10,040 Speaker 1: a longer term dynamic at play here, and I think 401 00:25:10,040 --> 00:25:12,800 Speaker 1: the risk is real that we're not So that's what 402 00:25:12,840 --> 00:25:15,840 Speaker 1: I'm saying, We're not ready to call call it done. 403 00:25:16,200 --> 00:25:19,280 Speaker 1: On the inflation theme, I do think that at some 404 00:25:19,320 --> 00:25:21,320 Speaker 1: point we're gonna look, I mean, at some point we're 405 00:25:21,320 --> 00:25:23,760 Speaker 1: going to come off these peak levels because base effects 406 00:25:23,800 --> 00:25:26,840 Speaker 1: come in. Right. If we're just holding these very high 407 00:25:26,920 --> 00:25:29,760 Speaker 1: prices or just going up a little bit and not 408 00:25:29,920 --> 00:25:33,520 Speaker 1: nine percent a year, it's gonna look like we're coming down. 409 00:25:33,640 --> 00:25:36,560 Speaker 1: But under the surface, I think that we've had a 410 00:25:36,560 --> 00:25:41,040 Speaker 1: lot of inflationary pressures uncovered here, both on the energy 411 00:25:41,080 --> 00:25:45,800 Speaker 1: side the labor side. Um oh, kind of aggrab business. 412 00:25:45,840 --> 00:25:50,199 Speaker 1: I mean, the food prices is really hitting everybody in 413 00:25:50,200 --> 00:25:53,359 Speaker 1: the wallet. I mean, we just to take us back 414 00:25:53,440 --> 00:25:56,080 Speaker 1: to what we heard from Powell this week. One of 415 00:25:56,080 --> 00:25:58,479 Speaker 1: the big things was that he reiterated that they were 416 00:25:58,520 --> 00:26:01,520 Speaker 1: going to be data depends endant. And I want to 417 00:26:01,560 --> 00:26:06,200 Speaker 1: ask you if data dependence means that they back away 418 00:26:06,280 --> 00:26:09,480 Speaker 1: once the data actually starts to get ugly, and how 419 00:26:09,560 --> 00:26:12,000 Speaker 1: much weakness in the economy you think that the FED 420 00:26:12,119 --> 00:26:20,119 Speaker 1: is willing to tolerate. Yeah, those are great questions. I mean, uh, 421 00:26:20,280 --> 00:26:23,000 Speaker 1: they will be data dependent. I think the mistake of 422 00:26:23,040 --> 00:26:27,840 Speaker 1: the seventies is that the FED kept backing off two 423 00:26:27,880 --> 00:26:31,320 Speaker 1: aggressively backing off, and then had to restart the hike cycle, 424 00:26:31,440 --> 00:26:34,159 Speaker 1: back off, restart the hike cycle, and then finally they 425 00:26:34,280 --> 00:26:37,520 Speaker 1: hiked and really through the economy into a recession. I 426 00:26:37,520 --> 00:26:39,880 Speaker 1: don't think that's going to happen this time. I think 427 00:26:39,880 --> 00:26:42,879 Speaker 1: that they've learned from that cycle. I think they're happy 428 00:26:42,920 --> 00:26:48,320 Speaker 1: to do more earlier and then wait, Uh, FED policy 429 00:26:48,520 --> 00:26:52,119 Speaker 1: takes about six months to filter through, so they think 430 00:26:52,160 --> 00:26:54,720 Speaker 1: at least and I think too, I'll share that opinion 431 00:26:55,480 --> 00:27:00,000 Speaker 1: that they've got three tools at their disposal. They've got communications, 432 00:27:00,080 --> 00:27:02,840 Speaker 1: which they were heavy communicators very early on in the year. 433 00:27:03,200 --> 00:27:06,560 Speaker 1: They've got the interest rate, the front end interest rate tool, 434 00:27:06,600 --> 00:27:10,600 Speaker 1: which they've been using handily. And they've got the balance 435 00:27:10,600 --> 00:27:13,520 Speaker 1: sheet which is now you know, north of eight trillion 436 00:27:13,560 --> 00:27:16,480 Speaker 1: dollars and they're starting to roll that balance sheet off 437 00:27:16,720 --> 00:27:20,399 Speaker 1: and that pace will go up to a pretty significant 438 00:27:20,440 --> 00:27:23,800 Speaker 1: pace of ninety billion securities a month starting in September. 439 00:27:24,440 --> 00:27:26,480 Speaker 1: So those are their three tools, and we have to 440 00:27:27,000 --> 00:27:29,560 Speaker 1: just if you just believe in the thesis that it 441 00:27:29,600 --> 00:27:32,720 Speaker 1: takes about six months to filter through, some of these 442 00:27:32,760 --> 00:27:35,880 Speaker 1: things can go through straight away. If you raise rates 443 00:27:35,880 --> 00:27:39,359 Speaker 1: immediately there go to mortgage rates up, they go um. 444 00:27:39,600 --> 00:27:42,520 Speaker 1: But I do think that coming from such a tight 445 00:27:42,640 --> 00:27:45,520 Speaker 1: labor market, they're gonna they're gonna be willing to tolerate 446 00:27:45,600 --> 00:27:49,520 Speaker 1: some pain on the recessionary type, you know, slower growth. 447 00:27:50,800 --> 00:27:53,600 Speaker 1: Another point that I want to add for those listeners 448 00:27:53,640 --> 00:27:57,360 Speaker 1: that aren't looking at GDP every day of their life. 449 00:27:58,640 --> 00:28:03,280 Speaker 1: Howell made the point it's very very heavily revised. It's 450 00:28:03,560 --> 00:28:08,240 Speaker 1: really heavily revised, and so by the time you get 451 00:28:08,280 --> 00:28:11,320 Speaker 1: a clear picture on what the economy was six months ago. 452 00:28:11,680 --> 00:28:15,880 Speaker 1: It's backward looking, so you know, he wants to take 453 00:28:15,880 --> 00:28:17,600 Speaker 1: that with a grain of salt. I would take it 454 00:28:17,600 --> 00:28:20,639 Speaker 1: with a grain of salt as well. And in the 455 00:28:20,680 --> 00:28:26,040 Speaker 1: past when we've had some serious revisions, UM, the FED 456 00:28:26,080 --> 00:28:28,520 Speaker 1: has acted because they realized, oh wait a second, the 457 00:28:28,560 --> 00:28:31,640 Speaker 1: economy actually wasn't coming from that level, it was coming 458 00:28:31,680 --> 00:28:36,160 Speaker 1: from this other level. Um. So there's there's that too, 459 00:28:36,200 --> 00:28:38,680 Speaker 1: But I think they're going to be willing to tolerate 460 00:28:38,800 --> 00:28:43,400 Speaker 1: some pain on the on the low growth side. Another thing, sorry, 461 00:28:43,440 --> 00:28:48,440 Speaker 1: just to keep adding, but GDP is reported in real 462 00:28:48,560 --> 00:28:54,680 Speaker 1: terms net of inflation, so not that many economic data 463 00:28:54,720 --> 00:28:57,760 Speaker 1: points are expressed in real terms, like when you go 464 00:28:57,840 --> 00:28:59,440 Speaker 1: to work and you get a raise because he did 465 00:28:59,440 --> 00:29:02,680 Speaker 1: a great job nobody sent you. But in real terms 466 00:29:02,760 --> 00:29:07,640 Speaker 1: you're actually down. But GDP is in fact, uh measured 467 00:29:07,640 --> 00:29:12,040 Speaker 1: and reported after inflation. So keep in mind minus one 468 00:29:13,240 --> 00:29:19,320 Speaker 1: UM GDP uh print is you know, pretty steamy in 469 00:29:19,440 --> 00:29:24,040 Speaker 1: nominal terms right now with inflation where it's at. Mimi, 470 00:29:24,120 --> 00:29:27,680 Speaker 1: I wanted to ask you about how you've been managing 471 00:29:27,880 --> 00:29:33,040 Speaker 1: just the change in FED the FEDS tightening cycle. You 472 00:29:33,080 --> 00:29:35,840 Speaker 1: had mentioned it a little bit earlier, Um, in the 473 00:29:35,880 --> 00:29:38,880 Speaker 1: podcast that when we started the year, we were looking 474 00:29:38,920 --> 00:29:43,640 Speaker 1: at maybe three rate hikes of twenty five basis points 475 00:29:43,760 --> 00:29:47,479 Speaker 1: and now we're well north of that. So what has 476 00:29:47,560 --> 00:29:51,240 Speaker 1: it been like? Um at jan Trust just managing how 477 00:29:51,360 --> 00:29:57,120 Speaker 1: quickly everything has changed. Yeah, So we were, uh, we 478 00:29:57,120 --> 00:29:59,680 Speaker 1: were in the camp that this market has it all 479 00:29:59,760 --> 00:30:03,160 Speaker 1: wrong back in December. And I was actually on Bloomberg 480 00:30:03,160 --> 00:30:06,640 Speaker 1: News being interviewed by your colleagues in December and they're like, 481 00:30:06,680 --> 00:30:08,520 Speaker 1: how many rate hikes do you think? And I thought 482 00:30:08,520 --> 00:30:11,440 Speaker 1: to myself, you know, I kind of think seven, but 483 00:30:11,520 --> 00:30:13,360 Speaker 1: I don't know if I should say that. So I 484 00:30:13,440 --> 00:30:16,040 Speaker 1: was like five, I don't know five, and they're like 485 00:30:16,160 --> 00:30:21,720 Speaker 1: five and I was like, well not three. My colleagues 486 00:30:21,800 --> 00:30:25,800 Speaker 1: afterwards like, well, okay. Now this was before all the 487 00:30:25,880 --> 00:30:30,200 Speaker 1: Russia um Ukraine crisis had come out, So I mean 488 00:30:30,360 --> 00:30:36,000 Speaker 1: the way that the economy has evolved and the inflationary 489 00:30:36,000 --> 00:30:41,320 Speaker 1: pressures have like basically Russia Ukraine just pushed back. It 490 00:30:41,800 --> 00:30:45,360 Speaker 1: made worse anything that was going to get back to 491 00:30:45,400 --> 00:30:49,960 Speaker 1: normal on on its own. So um And at the 492 00:30:50,280 --> 00:30:52,880 Speaker 1: at the time also I was thinking that, and then 493 00:30:52,920 --> 00:30:55,400 Speaker 1: I was staying at too. But the podcast to stop 494 00:30:55,480 --> 00:30:59,160 Speaker 1: easing first Remember they were buying a lot of securities 495 00:30:59,200 --> 00:31:02,680 Speaker 1: every month fall, and I'm like, why are they still easing. 496 00:31:03,240 --> 00:31:06,920 Speaker 1: That's their view of easing the same way that their 497 00:31:07,040 --> 00:31:10,600 Speaker 1: view of letting these securities roll off, the portfolio will 498 00:31:10,640 --> 00:31:15,600 Speaker 1: be tightening. So they've started that in baby steps this summer, 499 00:31:15,640 --> 00:31:17,880 Speaker 1: this fall, starting in September, it's going to be a 500 00:31:17,920 --> 00:31:22,320 Speaker 1: more forceful letting those securities roll off. The actual impact 501 00:31:22,440 --> 00:31:26,040 Speaker 1: is then natural buyers like you and me, or economic 502 00:31:26,080 --> 00:31:28,959 Speaker 1: buyers will say, oh do I think that's a decent 503 00:31:29,040 --> 00:31:32,240 Speaker 1: yield to buy a new tenure? Because before the fet 504 00:31:32,480 --> 00:31:34,800 Speaker 1: was like oh it's it's eleven am, time to buy 505 00:31:34,840 --> 00:31:38,960 Speaker 1: another five billion. There was no economic thought behind it. 506 00:31:39,080 --> 00:31:41,320 Speaker 1: So how we were navigating it. We came into the 507 00:31:41,400 --> 00:31:46,479 Speaker 1: year underweight fixed income, underweight equities, no tech long rates, 508 00:31:46,640 --> 00:31:51,320 Speaker 1: uh sorry, long real assets. We saw the big rate 509 00:31:51,560 --> 00:31:55,600 Speaker 1: backup at two and a half percent ten years. We thought, 510 00:31:55,640 --> 00:31:59,640 Speaker 1: you know, um, at this point we can start buying 511 00:31:59,720 --> 00:32:04,360 Speaker 1: some some more fixed income and the front end of 512 00:32:04,400 --> 00:32:09,000 Speaker 1: the curve really repriced very heavily, two year notes and 513 00:32:09,120 --> 00:32:11,480 Speaker 1: around there. I mean, at one point the peak Fed 514 00:32:11,520 --> 00:32:14,720 Speaker 1: funds rate was closer to four percent. We're not there now, 515 00:32:15,200 --> 00:32:17,640 Speaker 1: but there was quite a lot christ in so we 516 00:32:17,760 --> 00:32:20,640 Speaker 1: sort of took some baby steps and covered the underweight 517 00:32:20,680 --> 00:32:24,400 Speaker 1: and bought very front end securities around the one year 518 00:32:24,440 --> 00:32:28,040 Speaker 1: and two year parts of the curve. And since then 519 00:32:28,160 --> 00:32:31,200 Speaker 1: we've actually closed out the underweight, and so we were 520 00:32:31,280 --> 00:32:35,480 Speaker 1: both short duration, meaning we were owning less risky or 521 00:32:35,640 --> 00:32:40,840 Speaker 1: or less yield sensitive bonds, but also had cash on 522 00:32:40,880 --> 00:32:44,200 Speaker 1: the books. So we've closed all that out. And you know, 523 00:32:44,280 --> 00:32:46,840 Speaker 1: it's hard to say that there's so much value at 524 00:32:46,880 --> 00:32:50,040 Speaker 1: these yield levels, especially in ten years. I think it's 525 00:32:50,160 --> 00:32:53,800 Speaker 1: uh it becomes a real conundrum for people don't know 526 00:32:53,840 --> 00:32:56,440 Speaker 1: what to do with ten years at to seventy when 527 00:32:56,480 --> 00:32:58,760 Speaker 1: the Fed's supposed to hike so much higher than that. 528 00:32:59,720 --> 00:33:05,040 Speaker 1: Um My own take is one treasuries are owned by 529 00:33:05,160 --> 00:33:08,440 Speaker 1: overseas buyers and they're looking at what's on the menu, 530 00:33:08,760 --> 00:33:12,280 Speaker 1: and on the menu on their menu is German buns 531 00:33:12,600 --> 00:33:16,400 Speaker 1: and Japanese tenures and uh so in that regard, there's 532 00:33:16,440 --> 00:33:19,760 Speaker 1: this a big international component too, and if you look 533 00:33:19,800 --> 00:33:22,440 Speaker 1: at German yields for instance, they've rallied a whole lot 534 00:33:22,480 --> 00:33:25,880 Speaker 1: off the highs as well. Um So that's how we've 535 00:33:25,960 --> 00:33:29,320 Speaker 1: navigated that, and we're like I said, neutral, if we 536 00:33:29,320 --> 00:33:34,200 Speaker 1: were to um, if we were to back up, if 537 00:33:34,240 --> 00:33:37,960 Speaker 1: the FED has a more persistent campaign, because right now, 538 00:33:38,120 --> 00:33:41,120 Speaker 1: I think people perceive that the FED will slow their 539 00:33:41,200 --> 00:33:45,000 Speaker 1: hiking and then you know, stop their hiking by say 540 00:33:45,000 --> 00:33:48,080 Speaker 1: early next year. But if they have a more persistent 541 00:33:48,120 --> 00:33:51,520 Speaker 1: campaign and we think that over the longer term they 542 00:33:51,560 --> 00:33:55,280 Speaker 1: will be more successful in controlling inflation, then I think 543 00:33:55,320 --> 00:34:00,240 Speaker 1: bonds will be a great buye UM back in I'm 544 00:34:00,280 --> 00:34:02,600 Speaker 1: aging myself a little, but not too much. But back 545 00:34:02,600 --> 00:34:05,680 Speaker 1: in two thousand and six, I think there was a point, 546 00:34:05,800 --> 00:34:08,479 Speaker 1: there was a day in the markets where the entire 547 00:34:08,520 --> 00:34:11,080 Speaker 1: curve was flat as a pancake, and I think that 548 00:34:11,120 --> 00:34:14,680 Speaker 1: all the yields were at five seventeen five point one 549 00:34:15,680 --> 00:34:19,920 Speaker 1: in two spives, tens and bonds, and I think, you know, 550 00:34:20,600 --> 00:34:22,759 Speaker 1: if we were to see I don't think we'll see 551 00:34:22,760 --> 00:34:26,520 Speaker 1: those type yields again because there are so many buyers, 552 00:34:26,920 --> 00:34:31,920 Speaker 1: pension funds and long dated UH liability type companies like 553 00:34:32,000 --> 00:34:35,160 Speaker 1: insurers and the like that would have so much interest 554 00:34:36,280 --> 00:34:39,879 Speaker 1: way below those levels right now, And those actors were 555 00:34:40,040 --> 00:34:44,080 Speaker 1: just getting started in terms of UM, in terms of 556 00:34:44,120 --> 00:34:46,759 Speaker 1: immunizing some of their risks at that time, and the 557 00:34:47,120 --> 00:34:49,160 Speaker 1: cats out of the bag right now. So I don't 558 00:34:49,160 --> 00:34:52,239 Speaker 1: think we'll get that high. But as as rates back up, 559 00:34:52,280 --> 00:34:56,800 Speaker 1: I think it presents an opportunity for longer term UM 560 00:34:56,840 --> 00:35:02,000 Speaker 1: buyers to to really have I don't know better feelings 561 00:35:02,040 --> 00:35:05,720 Speaker 1: about buying bonds, because nobody had good feelings about buying tenure. 562 00:35:05,840 --> 00:35:08,080 Speaker 1: Not it's at that one percent or anything near that, 563 00:35:08,600 --> 00:35:13,640 Speaker 1: it sounds like a bad idea, maybe. I that was 564 00:35:13,640 --> 00:35:17,600 Speaker 1: an excellent point you made about how GDP is reported 565 00:35:17,680 --> 00:35:20,719 Speaker 1: in real terms rather than nominal terms. I think a 566 00:35:20,760 --> 00:35:22,600 Speaker 1: lot of people don't realize that it doesn't get as 567 00:35:22,680 --> 00:35:24,960 Speaker 1: much focus as it should. If I was Joe Biden, 568 00:35:25,000 --> 00:35:27,600 Speaker 1: I think I'd be tweeting out GDP and in purely 569 00:35:27,640 --> 00:35:30,239 Speaker 1: nominal terms, and and you know, get a lot of 570 00:35:30,239 --> 00:35:32,560 Speaker 1: the heat off of his fact. But one thing we 571 00:35:32,600 --> 00:35:36,200 Speaker 1: talked about incessantly here almost every day is the earnings 572 00:35:36,200 --> 00:35:40,000 Speaker 1: growth of companies in the SMP five, which obviously is 573 00:35:40,000 --> 00:35:43,960 Speaker 1: reported in nominal terms. And you know, say we get 574 00:35:44,040 --> 00:35:49,160 Speaker 1: eight nine earnings growth this year, well that's almost nothing 575 00:35:49,239 --> 00:35:52,840 Speaker 1: and maybe negative depending on whatever the latest inflation figure 576 00:35:53,000 --> 00:35:56,239 Speaker 1: is when you look at it in real terms. Do 577 00:35:56,280 --> 00:36:00,720 Speaker 1: you think that explains the valuation compression that we've seen 578 00:36:01,000 --> 00:36:03,040 Speaker 1: this year, and does it set us up for sort 579 00:36:03,080 --> 00:36:06,160 Speaker 1: of if we do get a sort of reversion back 580 00:36:06,200 --> 00:36:10,279 Speaker 1: to normal inflation levels? Um, does it set us up 581 00:36:10,320 --> 00:36:14,000 Speaker 1: to go right back to those valuations we saw before 582 00:36:14,520 --> 00:36:18,000 Speaker 1: everything went haywire? Or do you think that is? Those 583 00:36:18,080 --> 00:36:21,520 Speaker 1: days are gone? Those days of you know and the 584 00:36:21,600 --> 00:36:26,160 Speaker 1: SMP are are are for the history books. I never 585 00:36:26,200 --> 00:36:31,360 Speaker 1: want to say never, but I do think that after 586 00:36:31,520 --> 00:36:35,640 Speaker 1: these things happen, people learn and they behave differently over 587 00:36:35,680 --> 00:36:39,960 Speaker 1: some period of time. And if we were, for instance, 588 00:36:40,080 --> 00:36:43,920 Speaker 1: to uh, if we had the FED in a situation 589 00:36:43,960 --> 00:36:47,960 Speaker 1: where inflation is controlled, where's the base rate? Right? Like 590 00:36:48,160 --> 00:36:51,120 Speaker 1: Powell yesterday said, he thinks now the base rates at 591 00:36:51,200 --> 00:36:55,200 Speaker 1: normal or sorry neutral? To you know that that's neutral? 592 00:36:55,280 --> 00:36:58,200 Speaker 1: People think for the most part that's between two and 593 00:36:58,719 --> 00:37:00,960 Speaker 1: two and a half percent, although I heard one fair 594 00:37:01,120 --> 00:37:03,960 Speaker 1: Fed person say it was closer to three I think 595 00:37:04,040 --> 00:37:06,120 Speaker 1: last week or the week before, and I thought, oh, geez, 596 00:37:06,160 --> 00:37:11,240 Speaker 1: are they're going to redefine neutral? Okay? Um? So taking 597 00:37:11,280 --> 00:37:14,360 Speaker 1: to your point though, like okay, FED hikes a bunch 598 00:37:14,400 --> 00:37:17,440 Speaker 1: they get the inflation under control, it's still not going 599 00:37:17,480 --> 00:37:20,520 Speaker 1: to give the boost to those um, those kind of 600 00:37:20,640 --> 00:37:25,960 Speaker 1: crazy tech companies that they had when rates were so low, 601 00:37:26,760 --> 00:37:31,920 Speaker 1: So the valuations were really benefiting from that. Um. So, 602 00:37:32,200 --> 00:37:34,120 Speaker 1: I don't know. I'm not in the camp that we're 603 00:37:34,120 --> 00:37:36,560 Speaker 1: going to go straight right back to those valuations. I 604 00:37:36,600 --> 00:37:38,359 Speaker 1: don't think so. I think the cats out of the bag. 605 00:37:53,520 --> 00:37:56,440 Speaker 1: Speaking of cats out of the bag, did you keep 606 00:37:56,480 --> 00:38:00,000 Speaker 1: your cat in the bag? Never? Oh my gosh, wouldn't 607 00:38:00,040 --> 00:38:04,680 Speaker 1: up torture? I don't know you. No, my cat can. 608 00:38:04,920 --> 00:38:08,799 Speaker 1: She can roam around anywhere. She treat her like a princess. 609 00:38:09,600 --> 00:38:12,000 Speaker 1: So you constantly let the cat out of the bag 610 00:38:12,320 --> 00:38:15,360 Speaker 1: all the time. Yes, Yeah, Well I'm gonna let some 611 00:38:15,400 --> 00:38:17,160 Speaker 1: crazy things out of the bag. I think it's that 612 00:38:17,239 --> 00:38:19,920 Speaker 1: time to let the crazy things out of the bag. 613 00:38:20,640 --> 00:38:24,960 Speaker 1: I hope our guests came prepared with some crazy things. Uh, 614 00:38:25,200 --> 00:38:27,200 Speaker 1: but we do. You go first, what's your crazy thing 615 00:38:27,200 --> 00:38:30,080 Speaker 1: of the week. I initially was going to go with 616 00:38:30,320 --> 00:38:34,360 Speaker 1: some story about how mushroom leather is supposed to upend 617 00:38:34,520 --> 00:38:38,120 Speaker 1: the leather industry, which apparently is a seventy eight billion 618 00:38:38,160 --> 00:38:41,560 Speaker 1: dollars I thought you might like that story. So us 619 00:38:42,000 --> 00:38:47,479 Speaker 1: mushroom leather. Yes, yes, it's made out of mushrooms. Mushrooms. Yeah, 620 00:38:47,560 --> 00:38:50,279 Speaker 1: apparently it's it's a pretty good fake, but I'm going 621 00:38:50,320 --> 00:38:56,120 Speaker 1: with something else instead. There's a skeleton of a Gorgasaurus. 622 00:38:57,000 --> 00:38:59,480 Speaker 1: I hope I'm saying that right. It's a relative of 623 00:38:59,480 --> 00:39:02,919 Speaker 1: the t X, and it's going up for auction. It's 624 00:39:03,040 --> 00:39:06,960 Speaker 1: smaller than a t REX would be, but it's much faster, 625 00:39:07,800 --> 00:39:11,120 Speaker 1: and this skeleton is ten ft tall and twenty two 626 00:39:11,160 --> 00:39:15,280 Speaker 1: ft long. So maybe it's perfect for your dry yard. 627 00:39:15,480 --> 00:39:20,200 Speaker 1: I'm not sure, but I'm wondering how much you think 628 00:39:20,239 --> 00:39:24,560 Speaker 1: it's supposed to fetch at auction. Eighteen million US dollars. 629 00:39:26,160 --> 00:39:29,760 Speaker 1: Maybe Emily can correct you a little bit, three million 630 00:39:30,320 --> 00:39:35,720 Speaker 1: US dollars, Mimi, Oh, I think eight million or something 631 00:39:36,360 --> 00:39:40,959 Speaker 1: five to eight million. I'm gonna I'm going to acknowledge 632 00:39:41,040 --> 00:39:48,200 Speaker 1: that I was cheating. No, no, I heard it. I'm 633 00:39:48,320 --> 00:39:52,680 Speaker 1: eating about that at five in the morning, So I 634 00:39:52,760 --> 00:39:57,240 Speaker 1: earned that's not cheating. That's preparation. Then, yeah, luck favors 635 00:39:57,280 --> 00:40:02,640 Speaker 1: the prepared. Okay, that's not what Matt David says. But 636 00:40:03,440 --> 00:40:07,560 Speaker 1: I couldn't believe that that thing was found at a 637 00:40:07,600 --> 00:40:13,360 Speaker 1: private person's home in Montana in two thousand eight. It 638 00:40:13,440 --> 00:40:17,560 Speaker 1: was excavated in two in there, Okay, in there, I 639 00:40:17,560 --> 00:40:19,600 Speaker 1: thought you met in their home. Like talking about a 640 00:40:19,640 --> 00:40:23,480 Speaker 1: skeleton in the ground. I did a little bit more 641 00:40:23,520 --> 00:40:26,359 Speaker 1: research because I thought I had no idea you could 642 00:40:26,400 --> 00:40:30,840 Speaker 1: buy a dinosaur skeleton. There's a lot of that stuff 643 00:40:30,920 --> 00:40:34,600 Speaker 1: actually that they're going to be auctioning off. I think 644 00:40:34,640 --> 00:40:39,040 Speaker 1: it's Southby's auction house. But um, it's wild and a 645 00:40:39,040 --> 00:40:44,360 Speaker 1: lot of it has been excavated in Montana, Wyoming and um, Colorado. 646 00:40:44,480 --> 00:40:47,919 Speaker 1: So if you have a spare five to eight mil, 647 00:40:48,239 --> 00:40:50,080 Speaker 1: there's a lot to look at in a nice dry 648 00:40:50,160 --> 00:40:54,480 Speaker 1: yard to display it. Maybe it's not kidding when she 649 00:40:54,520 --> 00:40:58,840 Speaker 1: talks about real assets, she's really uh on the curve 650 00:40:58,880 --> 00:41:02,720 Speaker 1: there on that I'm putting my money, but we can't 651 00:41:02,760 --> 00:41:05,880 Speaker 1: recommend that and actual portfolios. But I did find it 652 00:41:06,000 --> 00:41:09,839 Speaker 1: fascinating and and and that is crazy, all right. I'd 653 00:41:09,840 --> 00:41:11,719 Speaker 1: still like the mushroom leather. That's a good one, but 654 00:41:12,280 --> 00:41:15,080 Speaker 1: maybe tough tough competition this week, What's what's your craziest 655 00:41:15,080 --> 00:41:19,360 Speaker 1: thing that is like so crazy? I'm now at a 656 00:41:19,400 --> 00:41:23,120 Speaker 1: loss for words. Um did come a little prepared, but 657 00:41:23,200 --> 00:41:26,160 Speaker 1: I thought it was a longer term horizon at the 658 00:41:26,239 --> 00:41:29,120 Speaker 1: crazy things that were And I came up with like 659 00:41:29,160 --> 00:41:34,080 Speaker 1: twenty and so easily. All right, we'll have to bring 660 00:41:34,120 --> 00:41:36,879 Speaker 1: you back then maybe we'll do it all special crazy things. 661 00:41:37,080 --> 00:41:39,960 Speaker 1: I mean, they were all finance features because I feel 662 00:41:39,960 --> 00:41:45,720 Speaker 1: like the timeline for crazy is like accelerated massively over 663 00:41:46,080 --> 00:41:50,520 Speaker 1: over the past year. Yeah, so I'll just I'll be 664 00:41:50,640 --> 00:41:54,279 Speaker 1: quick because I want to hear your crazies. But um one, 665 00:41:54,360 --> 00:41:56,560 Speaker 1: I think it's a little crazy that the current FED 666 00:41:56,600 --> 00:41:58,600 Speaker 1: path is like a hurry up and hike and then 667 00:41:58,680 --> 00:42:01,120 Speaker 1: hurry up and ease, Like I just don't think that's 668 00:42:01,120 --> 00:42:03,720 Speaker 1: not consistent with what I've seen out of these guys 669 00:42:03,800 --> 00:42:07,080 Speaker 1: for my lifetime. Uh, nor do I think it would 670 00:42:07,120 --> 00:42:10,160 Speaker 1: be the right thing to do. The crypto landscape, I 671 00:42:10,200 --> 00:42:14,479 Speaker 1: think is crazy, just like the fact that everybody came 672 00:42:14,520 --> 00:42:16,920 Speaker 1: in with this long held narrative that this stuff was 673 00:42:16,960 --> 00:42:21,399 Speaker 1: going to be inflation protection and it's gone the opposite way. 674 00:42:21,680 --> 00:42:25,280 Speaker 1: And I think that, um, the you know, so many 675 00:42:25,360 --> 00:42:30,920 Speaker 1: bankruptcies and how quickly things could go to zero definitely 676 00:42:31,080 --> 00:42:35,000 Speaker 1: has highlighted the need for regulation in the space. And 677 00:42:35,040 --> 00:42:38,480 Speaker 1: the mother of all crazy for me was when the 678 00:42:38,560 --> 00:42:42,720 Speaker 1: Nickel was going haywire that the Elmy actually broke those trades. 679 00:42:43,320 --> 00:42:46,400 Speaker 1: I was like floored as a as a vond trader 680 00:42:46,520 --> 00:42:50,319 Speaker 1: at heart, and I've seen other crazy situations where the 681 00:42:50,360 --> 00:42:54,200 Speaker 1: trades were held, so that was crazy for me. But 682 00:42:54,400 --> 00:42:58,560 Speaker 1: I can't beat the dinosaur. I'm happy to the billion 683 00:42:58,600 --> 00:43:04,200 Speaker 1: dollar lottery. That's pretty that's pretty crazy, meem it's good 684 00:43:04,200 --> 00:43:06,759 Speaker 1: at this. We'll have to she's gotta we gotta bring 685 00:43:06,760 --> 00:43:09,759 Speaker 1: her back for more crazy things. But now, Emily, the 686 00:43:09,800 --> 00:43:14,320 Speaker 1: pressure is on you to top any of this. Okay, well, 687 00:43:15,560 --> 00:43:19,160 Speaker 1: I have so you guys like sitting pool side of course, 688 00:43:19,680 --> 00:43:22,239 Speaker 1: right of course. So I still an article in the 689 00:43:22,280 --> 00:43:26,760 Speaker 1: Wall Street Journal that at the Bellaggio Resort in Las Vegas, 690 00:43:26,840 --> 00:43:30,600 Speaker 1: if you want to sit in a pool side lounge chair, 691 00:43:30,880 --> 00:43:34,200 Speaker 1: you now have to pay for it. So I'm wondering, 692 00:43:34,600 --> 00:43:37,239 Speaker 1: Bill Donna, how much do you think you have to 693 00:43:37,320 --> 00:43:39,719 Speaker 1: pay as a hotel guest to sit in a chair 694 00:43:39,800 --> 00:43:44,120 Speaker 1: and it includes a side table and umbrella and towels 695 00:43:44,680 --> 00:43:51,120 Speaker 1: in this fee fifty dollars a day? Okay, Mike, I'll 696 00:43:51,160 --> 00:43:56,719 Speaker 1: go on a day. Mami, what do you think? I 697 00:43:56,760 --> 00:44:01,560 Speaker 1: don't know, because I think like nine inflation, I'm going 698 00:44:01,640 --> 00:44:05,760 Speaker 1: higher because it's the Bellagio. I'll say one a day. 699 00:44:06,400 --> 00:44:09,719 Speaker 1: You guys were all too low. It's two hundred dollars, 700 00:44:09,719 --> 00:44:14,399 Speaker 1: so MENI was closest. But and this is on This 701 00:44:14,440 --> 00:44:17,600 Speaker 1: is for the Friday of Labor Day weekend, so I'm 702 00:44:17,640 --> 00:44:19,840 Speaker 1: not sure if it's every single day, but definitely do 703 00:44:19,920 --> 00:44:21,959 Speaker 1: not go to that pool on the Friday of Labor 704 00:44:22,000 --> 00:44:24,479 Speaker 1: Day weekend. All right, maybe you're you're two for two 705 00:44:24,480 --> 00:44:27,200 Speaker 1: on the price is right here. I gotta say you, guys, 706 00:44:27,200 --> 00:44:29,120 Speaker 1: I'm the game show host here. Okay. I don't know 707 00:44:29,120 --> 00:44:31,440 Speaker 1: why everyone thinks they get to be the prices right 708 00:44:31,520 --> 00:44:34,040 Speaker 1: game show host? That's my role, but I'll allow it. 709 00:44:34,719 --> 00:44:37,040 Speaker 1: And I got a good one for you, uh vill 710 00:44:37,080 --> 00:44:42,840 Speaker 1: Donna as a proud native of New Jersey. When I 711 00:44:42,880 --> 00:44:46,840 Speaker 1: say the boss, who who do you think I'm talking about? Bruce? Okay, 712 00:44:46,840 --> 00:44:48,800 Speaker 1: good good. I thought you were gonna say, like and 713 00:44:48,960 --> 00:44:52,960 Speaker 1: crown and your boss or something setting you up to 714 00:44:53,000 --> 00:44:55,520 Speaker 1: fail there. But to me, it's crazy and I'm a 715 00:44:55,640 --> 00:44:58,880 Speaker 1: I'm a Bruce fan. Back from MENI I think you 716 00:44:58,920 --> 00:45:01,120 Speaker 1: and I did you cred Way College and ninety three? 717 00:45:01,280 --> 00:45:05,080 Speaker 1: Is that the class ninety three? What's up? Me too? 718 00:45:06,400 --> 00:45:09,560 Speaker 1: Just just not not too long ago. We're recent grads, 719 00:45:11,560 --> 00:45:15,000 Speaker 1: so I go back to Bruce yesterday. I go back Bruce. 720 00:45:15,200 --> 00:45:17,839 Speaker 1: Bruce stantson in the dark days. My my first Bruce 721 00:45:17,880 --> 00:45:21,160 Speaker 1: show was in like eight seven, and I remember people 722 00:45:21,239 --> 00:45:23,279 Speaker 1: back then talking about, Oh, it's so hard to get 723 00:45:23,320 --> 00:45:26,239 Speaker 1: a ticket, how outrageous the ticket costs are. But it's 724 00:45:26,280 --> 00:45:29,880 Speaker 1: really gone off the rails this year with ticket masters 725 00:45:30,400 --> 00:45:34,880 Speaker 1: dynamic pricing UH strategy. It's basically ticket Master has turned. 726 00:45:35,400 --> 00:45:37,319 Speaker 1: It's kind of like the stock market, you know. There 727 00:45:37,320 --> 00:45:40,600 Speaker 1: there they are upping the face value of the tickets 728 00:45:41,080 --> 00:45:45,360 Speaker 1: depending on demand for the tickets, and the Bruce fans 729 00:45:45,360 --> 00:45:49,360 Speaker 1: are outraged. I've never seen such loyal, die hard, passionate 730 00:45:49,400 --> 00:45:53,279 Speaker 1: fans turn on Bruce like this. It's it's really it's 731 00:45:53,360 --> 00:45:57,560 Speaker 1: it's quite something. Everyone's outraged about how high these ticket 732 00:45:57,600 --> 00:46:01,160 Speaker 1: prices are because of this new ticket Master's system. So 733 00:46:01,200 --> 00:46:03,800 Speaker 1: I looked up the ticket prices for the Tampa show. 734 00:46:04,440 --> 00:46:06,640 Speaker 1: That's the first show of the tour in the US 735 00:46:06,760 --> 00:46:11,879 Speaker 1: at least February one. And I know Valdonna has read 736 00:46:11,920 --> 00:46:14,399 Speaker 1: every news story published in the last week. So I'm 737 00:46:14,440 --> 00:46:18,000 Speaker 1: not gonna ask you what the highest price ticket is, 738 00:46:18,560 --> 00:46:21,239 Speaker 1: but what do you think the lowest price ticket is 739 00:46:21,800 --> 00:46:27,160 Speaker 1: for Bruce and Tampa, February one, first tour stop. Lowest 740 00:46:27,200 --> 00:46:34,360 Speaker 1: price ticket for fifty for fifty Mimi wow, um three 741 00:46:35,160 --> 00:46:39,760 Speaker 1: three family, how about you? I'm gonna go higher seven hundred. 742 00:46:41,200 --> 00:46:43,279 Speaker 1: I if I hadn't looked, I would have gone on 743 00:46:43,320 --> 00:46:46,640 Speaker 1: the high end to I do. The lowest price ticket 744 00:46:46,800 --> 00:46:48,880 Speaker 1: in an arena like this is like you get a 745 00:46:48,880 --> 00:46:51,879 Speaker 1: good you know, I view a Bruce's back of Bruce's head, 746 00:46:51,920 --> 00:46:54,439 Speaker 1: and you know probably probably don't even get to see 747 00:46:54,440 --> 00:46:56,520 Speaker 1: the drums or anything. To one in fourteen bucks for 748 00:46:56,560 --> 00:46:59,359 Speaker 1: the lowest price Tampa ticket. So I'm like, what are 749 00:46:59,360 --> 00:47:01,960 Speaker 1: you all these complaining about Bucks? Is not bad to 750 00:47:01,960 --> 00:47:08,680 Speaker 1: see the Boss. I'm sorry, but guess who's three for three? 751 00:47:09,440 --> 00:47:11,080 Speaker 1: We got to get you. We got to get you 752 00:47:11,160 --> 00:47:16,359 Speaker 1: on prices right. Sometimes me stump the chump. I think 753 00:47:16,400 --> 00:47:19,680 Speaker 1: that three D bucks. I'd rather just like sit in 754 00:47:19,800 --> 00:47:23,960 Speaker 1: my house and listen to the Come on, have you 755 00:47:24,000 --> 00:47:26,480 Speaker 1: ever been to Have you ever seen the Boss? Yeah? 756 00:47:26,520 --> 00:47:29,359 Speaker 1: I like, I like, but I don't want to like sit. 757 00:47:29,719 --> 00:47:32,000 Speaker 1: You know where those tickets are there behind the state 758 00:47:32,080 --> 00:47:35,920 Speaker 1: They are terrible. Behind the stage. You can't see the Boss. 759 00:47:37,480 --> 00:47:41,000 Speaker 1: They're pretty bad. Back of a screen. That's true, you 760 00:47:41,120 --> 00:47:43,920 Speaker 1: with all your peeps. There you go, Mike, you're with 761 00:47:43,960 --> 00:47:46,520 Speaker 1: your peeks for that, you get the tailgate and everything. 762 00:47:46,640 --> 00:47:48,560 Speaker 1: I would pay two hundred bucks to look at the 763 00:47:48,560 --> 00:47:52,000 Speaker 1: back of Bruce's head for sure. I'm up paying that. 764 00:47:52,600 --> 00:47:55,160 Speaker 1: Did you look at how much like the highest ones 765 00:47:55,239 --> 00:47:57,520 Speaker 1: were or the median? Because this was news to me. 766 00:47:57,760 --> 00:48:00,520 Speaker 1: I didn't read that five am that ticket Master is 767 00:48:00,560 --> 00:48:02,480 Speaker 1: doing all that jazz, and I'm kind of with the 768 00:48:02,520 --> 00:48:05,640 Speaker 1: Bruce fans, I'm kind of saddened by it. It's it's yeah, 769 00:48:05,719 --> 00:48:08,640 Speaker 1: dynamic pricing they call it, where you know, they have 770 00:48:08,760 --> 00:48:11,680 Speaker 1: some algorithm and the algorithms rule our our life now 771 00:48:11,760 --> 00:48:14,360 Speaker 1: apparently even when it comes to trying to see the boss. 772 00:48:14,760 --> 00:48:17,040 Speaker 1: But depending on how many people are logging in and 773 00:48:17,080 --> 00:48:19,120 Speaker 1: signed up for the pre sale, and yeah, all their 774 00:48:19,200 --> 00:48:23,960 Speaker 1: data employees inputs, they they jack up the prices or 775 00:48:24,000 --> 00:48:26,680 Speaker 1: lower than to try to sell it out. And uh yeah, 776 00:48:26,719 --> 00:48:31,239 Speaker 1: the goal is that the artist and ticketmaster makes the 777 00:48:31,280 --> 00:48:34,680 Speaker 1: money rather than a bunch of scalpers um because the 778 00:48:34,680 --> 00:48:37,719 Speaker 1: guy hasn't towards in like seven six seven years, so 779 00:48:38,280 --> 00:48:40,160 Speaker 1: of course the tickets are gonna be hard to get. 780 00:48:40,200 --> 00:48:42,480 Speaker 1: They're gonna be you know, you're gonna have to pay 781 00:48:42,520 --> 00:48:44,799 Speaker 1: through the nose them the highest ones. I think they're 782 00:48:44,840 --> 00:48:48,120 Speaker 1: like five six thousand for for floor seats right in 783 00:48:48,160 --> 00:48:52,600 Speaker 1: front of the of the stage. So I would not 784 00:48:52,680 --> 00:48:55,680 Speaker 1: be I would not be paying that, uh, but to 785 00:48:56,360 --> 00:48:59,640 Speaker 1: tight to go see the pot. See that makes the 786 00:48:59,640 --> 00:49:02,319 Speaker 1: two high? Do? It looks so cheap? That's right, right, 787 00:49:02,400 --> 00:49:05,279 Speaker 1: exactly exactly. But the other thing is, you know he's 788 00:49:05,280 --> 00:49:11,560 Speaker 1: gonna add like ten twenty dates in the summer at stadiums, 789 00:49:12,200 --> 00:49:15,680 Speaker 1: big hundred thousand seeds stadiums. So there, you know, I 790 00:49:15,719 --> 00:49:19,400 Speaker 1: don't know. I think it's a much to do about nothing. 791 00:49:19,680 --> 00:49:22,160 Speaker 1: Everyone should get off. The Boss is back, That's what 792 00:49:22,200 --> 00:49:26,800 Speaker 1: I'm saying right now, you mami, I think Memi's outraged 793 00:49:26,840 --> 00:49:31,680 Speaker 1: though True Value Investors is not going to pay two 794 00:49:32,400 --> 00:49:35,800 Speaker 1: to see the Boss. But with that said, good stuff. 795 00:49:35,840 --> 00:49:39,440 Speaker 1: I think maybe it's time for you to uh take 796 00:49:39,480 --> 00:49:42,120 Speaker 1: a sabbatical from work and go on the prices right 797 00:49:42,520 --> 00:49:45,919 Speaker 1: uh and win a new car that was really good. Well, 798 00:49:46,760 --> 00:49:50,120 Speaker 1: I'm running down to get some lottery tickets. Yeah, that's so. 799 00:49:50,520 --> 00:50:00,560 Speaker 1: I know you don't like one billion uh for the 800 00:50:00,600 --> 00:50:02,359 Speaker 1: pay out of it? What is it the mega millions? One? 801 00:50:02,400 --> 00:50:06,960 Speaker 1: That's that high. We thought me, someone should start a 802 00:50:07,080 --> 00:50:09,680 Speaker 1: mutual fund that just buys lottery tickets, like in every state, 803 00:50:09,880 --> 00:50:11,800 Speaker 1: every everyone. What do you think do you think we 804 00:50:11,800 --> 00:50:14,359 Speaker 1: could get that off the ground. Yeah, maybe like an 805 00:50:14,360 --> 00:50:16,480 Speaker 1: e t F to make it a bit more tax efficient. 806 00:50:16,560 --> 00:50:21,480 Speaker 1: I'm gonna work on that, like like only it should 807 00:50:21,480 --> 00:50:23,920 Speaker 1: be only the big ones right where you actually have 808 00:50:24,000 --> 00:50:27,920 Speaker 1: an increased odd Yeah. I like this idea, you know. 809 00:50:28,800 --> 00:50:31,839 Speaker 1: Or you can tell a micro cap scratch off strategy too. 810 00:50:31,920 --> 00:50:35,480 Speaker 1: You can have a few of them, you know, work 811 00:50:35,560 --> 00:50:39,239 Speaker 1: on that. That's a free idea. Yeah, free idea for 812 00:50:39,280 --> 00:50:45,360 Speaker 1: you there, new business line, free idea with that, said 813 00:50:45,520 --> 00:50:49,600 Speaker 1: me me, very impressive. I don't think I've ever seen prices, right, 814 00:50:49,800 --> 00:50:53,600 Speaker 1: contestant on the show do this well? Uh, you know, 815 00:50:53,680 --> 00:50:56,200 Speaker 1: we'll try to stop calling it prices writer, we'll get sued, 816 00:50:56,200 --> 00:50:58,960 Speaker 1: but we'll take to something else. But very impressive. Your 817 00:50:59,000 --> 00:51:02,080 Speaker 1: clients are gonna be very rest I think you went 818 00:51:02,120 --> 00:51:06,440 Speaker 1: three for three on the Crazy Things this week. We 819 00:51:06,520 --> 00:51:14,200 Speaker 1: can call it prices correct prices, Yes, totally different, totally different. 820 00:51:14,360 --> 00:51:17,279 Speaker 1: The lawsuit there, good, all right, but I think that 821 00:51:17,360 --> 00:51:20,359 Speaker 1: is all our time. Maybe great stuff. Really appreciate your 822 00:51:20,360 --> 00:51:23,760 Speaker 1: insights Emily. Great to catch up with you as well, 823 00:51:23,800 --> 00:51:25,720 Speaker 1: and I hope we can have you guys back sometime. 824 00:51:26,360 --> 00:51:36,840 Speaker 1: Thank you so much, Thank you both. What Goes Up. 825 00:51:36,880 --> 00:51:38,719 Speaker 1: We'll be back next week and so then you can 826 00:51:38,760 --> 00:51:41,680 Speaker 1: find us on the Bloomberg Terminal website and app or 827 00:51:41,719 --> 00:51:44,480 Speaker 1: wherever you get your podcasts. We love it if you 828 00:51:44,520 --> 00:51:46,560 Speaker 1: took the time to rate and review the show on 829 00:51:46,600 --> 00:51:49,880 Speaker 1: Apple Podcasts, so more listeners can find us. And you 830 00:51:49,880 --> 00:51:53,480 Speaker 1: can find us on Twitter follow me at Rea Anonymous. Well, 831 00:51:53,520 --> 00:51:56,720 Speaker 1: Donna Hirich is at bil Donna Hirach. You can also 832 00:51:56,760 --> 00:52:01,480 Speaker 1: follow Bloomberg Podcasts at podcasts. What Goes Up is produced 833 00:52:01,520 --> 00:52:04,279 Speaker 1: by Stacy Wang. Thanks for listening, See you next time.