1
00:00:00,160 --> 00:00:02,440
Speaker 1: Let's get to Nancy Tangler, our guest or the half hour.

2
00:00:02,640 --> 00:00:06,920
Speaker 1: Nancy is the CEO on ce IO at Laffer Tangler Investments.

3
00:00:07,080 --> 00:00:10,239
Speaker 1: She joins from Lake Tahoe, California. Maybe you'll get some

4
00:00:10,280 --> 00:00:12,600
Speaker 1: snow here over the holiday weekend. We'll have to wait

5
00:00:12,640 --> 00:00:14,680
Speaker 1: and see about that. Nancy. Thanks for being with us.

6
00:00:15,280 --> 00:00:18,119
Speaker 1: I'm curious to whether you think that we've seen the

7
00:00:18,200 --> 00:00:22,200
Speaker 1: high in yield terms for the foreseeable future. We're starting

8
00:00:22,200 --> 00:00:24,680
Speaker 1: to drift lower right across the curve as the Fed

9
00:00:24,760 --> 00:00:27,880
Speaker 1: begins to to moderate or at least suggest that it's

10
00:00:27,880 --> 00:00:32,000
Speaker 1: going to moderate the pace of infest rate increases. Yeah,

11
00:00:32,000 --> 00:00:35,239
Speaker 1: thanks for having me, Doug. You know we we did

12
00:00:35,320 --> 00:00:39,160
Speaker 1: see the yield curve steepend on an diversion basis, uh,

13
00:00:39,440 --> 00:00:42,440
Speaker 1: this last week pretty materially. So the two year went

14
00:00:42,560 --> 00:00:44,360
Speaker 1: up and the tenure went down, or the two years

15
00:00:44,400 --> 00:00:48,080
Speaker 1: stayed fairly constant, the tenure went down the yield and

16
00:00:48,120 --> 00:00:51,120
Speaker 1: I think that is telling us that that, you know,

17
00:00:51,159 --> 00:00:52,800
Speaker 1: the bond market has been ahead of the Fed the

18
00:00:52,800 --> 00:00:56,160
Speaker 1: whole time. Uh, and so you know that they began

19
00:00:56,280 --> 00:01:00,600
Speaker 1: tightening and raising yields before the Fed actually even lifted

20
00:01:00,640 --> 00:01:02,800
Speaker 1: the Fed funds rate and now we're seeing it on

21
00:01:02,840 --> 00:01:05,800
Speaker 1: the other on the way down. So I think you know,

22
00:01:05,920 --> 00:01:09,600
Speaker 1: the soft, dubblish rhetoric we started to hear before the

23
00:01:09,680 --> 00:01:12,320
Speaker 1: last meeting and then we've continued to hear from a

24
00:01:12,400 --> 00:01:16,000
Speaker 1: number of the FED governors is important, and the market

25
00:01:16,000 --> 00:01:20,040
Speaker 1: has been paying attention, as has the stock market. So Nancy,

26
00:01:20,120 --> 00:01:22,120
Speaker 1: I mean, this is it. Okay, you're looking at the

27
00:01:22,160 --> 00:01:25,000
Speaker 1: bond market. You of course you know at some stages

28
00:01:25,160 --> 00:01:27,479
Speaker 1: it's it's even now it looks like it's a it's

29
00:01:27,520 --> 00:01:29,919
Speaker 1: a buying opportunity in various parts of the curve, especially

30
00:01:29,959 --> 00:01:32,880
Speaker 1: if you're after income as well. Now, if you're after income,

31
00:01:32,880 --> 00:01:36,320
Speaker 1: the do you also, of course look in the equity market,

32
00:01:36,319 --> 00:01:38,600
Speaker 1: and I know that you have been looking for some

33
00:01:38,680 --> 00:01:41,319
Speaker 1: of these growth versus value plays, some of the more

34
00:01:41,400 --> 00:01:44,399
Speaker 1: value plays here as well. Give us your take, Okay,

35
00:01:44,400 --> 00:01:48,120
Speaker 1: great question, shod So in August, when the ten year

36
00:01:48,160 --> 00:01:50,760
Speaker 1: yield hit fifty basis points, we moved our clients out

37
00:01:50,760 --> 00:01:54,200
Speaker 1: of bonds and put them in in commodities. We have

38
00:01:54,240 --> 00:01:57,280
Speaker 1: a dynamic inflation strategy. We moved some of them into

39
00:01:57,360 --> 00:02:00,640
Speaker 1: that and then also convertible securities. Uh, about three or

40
00:02:00,640 --> 00:02:03,640
Speaker 1: four months ago we were back in buying and building

41
00:02:03,760 --> 00:02:09,919
Speaker 1: short duration ladders of corporates, treasuries and munis for clients.

42
00:02:10,440 --> 00:02:13,800
Speaker 1: We also run dividend growth strategies, which we have done

43
00:02:13,880 --> 00:02:16,720
Speaker 1: since the mid nineteen eighties, and so we have been

44
00:02:16,760 --> 00:02:20,320
Speaker 1: able to generate really strong dividend growth. It's usually around

45
00:02:20,400 --> 00:02:24,400
Speaker 1: nine to ten UM, but but this year, trailing one years,

46
00:02:24,680 --> 00:02:28,080
Speaker 1: we're up about in dividend growth due to a number

47
00:02:28,080 --> 00:02:30,640
Speaker 1: of the companies paying special dividends, and so this is

48
00:02:30,680 --> 00:02:33,720
Speaker 1: a great way to get paid um while you wait

49
00:02:33,760 --> 00:02:37,880
Speaker 1: for stocks to return to bulmarket status and also as

50
00:02:37,919 --> 00:02:41,639
Speaker 1: a hedge against inflation. So names that we like right now,

51
00:02:41,680 --> 00:02:44,639
Speaker 1: it's it's really a theme old economy companies that are

52
00:02:44,639 --> 00:02:49,760
Speaker 1: embracing digitization and then the suppliers of the technology that

53
00:02:49,840 --> 00:02:54,359
Speaker 1: supports digitization. Almost every name I have for you today

54
00:02:54,400 --> 00:02:58,560
Speaker 1: it pays a dividend except for one. Let's get your take, Nancy,

55
00:02:58,639 --> 00:03:00,960
Speaker 1: on what your five stocks that you need to own

56
00:03:01,200 --> 00:03:03,760
Speaker 1: in a slowing growth environment, and of course we don't

57
00:03:03,800 --> 00:03:09,160
Speaker 1: get a majorly slowing environment. Does this all change? Uh, well,

58
00:03:09,400 --> 00:03:12,760
Speaker 1: it might modify a little bit shod um. Yeah, So

59
00:03:12,800 --> 00:03:15,799
Speaker 1: we are theme is investing in old economy companies that

60
00:03:15,840 --> 00:03:19,160
Speaker 1: are embracing digitization. And then, as I mentioned earlier, the

61
00:03:19,200 --> 00:03:22,440
Speaker 1: companies that are supplying the technology. So the three old

62
00:03:22,480 --> 00:03:25,880
Speaker 1: economy companies are Goldman Sachs. H It's company is paying

63
00:03:25,919 --> 00:03:28,120
Speaker 1: you a two point six percent yield. They've grown at

64
00:03:29,560 --> 00:03:32,080
Speaker 1: a year over the last five years, training at one

65
00:03:32,120 --> 00:03:34,600
Speaker 1: point two times book which is well below were Jpmore,

66
00:03:34,680 --> 00:03:39,400
Speaker 1: Guinness Trading, and they've reorganized, created division called Platform Services,

67
00:03:39,800 --> 00:03:43,880
Speaker 1: consolidating fintech across all their business lines. We think this company,

68
00:03:43,880 --> 00:03:46,240
Speaker 1: you're gonna be pretty happy you owned U two to

69
00:03:46,280 --> 00:03:51,360
Speaker 1: three years from now, regardless of economic slowdown your growth.

70
00:03:51,760 --> 00:03:54,320
Speaker 1: And then Honeywell is kind of a hybrid. It's a

71
00:03:54,320 --> 00:03:59,839
Speaker 1: beneficiary of digitization but also considers itself an industrial technology

72
00:04:00,000 --> 00:04:02,760
Speaker 1: many because they provide a lot of digital solutions. They

73
00:04:02,840 --> 00:04:07,080
Speaker 1: just beat beat and raised in this last earnings call UH.

74
00:04:07,120 --> 00:04:09,360
Speaker 1: They have free cash flow of six billion a year

75
00:04:09,400 --> 00:04:13,360
Speaker 1: at two percent yield UH and nine million dollars on

76
00:04:13,360 --> 00:04:17,440
Speaker 1: the balance sheet. They are planning to do acquisitions in

77
00:04:18,200 --> 00:04:20,920
Speaker 1: three which goes to our Golden Sex story. And then

78
00:04:21,360 --> 00:04:24,479
Speaker 1: the final one is Public Storage, which has a two

79
00:04:24,520 --> 00:04:27,680
Speaker 1: percent two point seven percent yield, just paid a thirteen

80
00:04:27,720 --> 00:04:30,600
Speaker 1: dollar special dividends so they the annualize dividend growth is

81
00:04:30,640 --> 00:04:33,680
Speaker 1: twenty one and a half percent, and they have been

82
00:04:33,720 --> 00:04:37,000
Speaker 1: able to keep clients for a lot longer and open

83
00:04:37,120 --> 00:04:40,960
Speaker 1: up more than fifty percent of new clients don't ever

84
00:04:41,000 --> 00:04:44,120
Speaker 1: talk to a human being. They sign up, they pay,

85
00:04:44,200 --> 00:04:47,480
Speaker 1: and they access their storage locker without or storage unit

86
00:04:47,480 --> 00:04:52,200
Speaker 1: without ever speaking to anyone. Two suppliers are Palato Networks

87
00:04:52,240 --> 00:04:56,000
Speaker 1: where Cloud meat cyber company just beat beat and raised,

88
00:04:56,080 --> 00:04:59,680
Speaker 1: and they are increasing the stickiness of their clients with

89
00:05:00,160 --> 00:05:03,320
Speaker 1: greater than one million dollar deals up. And then you

90
00:05:03,360 --> 00:05:06,200
Speaker 1: know the old, tried and trude Microsoft that's trading at

91
00:05:06,200 --> 00:05:10,360
Speaker 1: a reasonable multiple and is still growing. Cloud despite despite

92
00:05:10,400 --> 00:05:14,360
Speaker 1: the naysayers, is still growing about So, I'm gonna throw

93
00:05:14,360 --> 00:05:16,400
Speaker 1: you another tech story here. I don't know if you

94
00:05:16,440 --> 00:05:19,280
Speaker 1: saw the Deer and Company earnings today, but much better

95
00:05:19,279 --> 00:05:23,680
Speaker 1: than expected to EPs adjusted at seven the street was

96
00:05:23,720 --> 00:05:27,719
Speaker 1: looking for seven dollars nine cents. Very interesting. The Deer

97
00:05:27,800 --> 00:05:30,719
Speaker 1: is forecasting record profit for next year. And the other

98
00:05:30,800 --> 00:05:33,640
Speaker 1: thing that Deer said today, which I thought was very interesting,

99
00:05:34,240 --> 00:05:37,400
Speaker 1: that the US, in terms of corn and soy mean

100
00:05:37,560 --> 00:05:42,479
Speaker 1: production could be fully autonomous by twenty thirty. How do

101
00:05:42,520 --> 00:05:45,840
Speaker 1: you play that? Yeah, so you're making my point, Doug.

102
00:05:45,920 --> 00:05:47,800
Speaker 1: I think you know the people that say the tech

103
00:05:47,800 --> 00:05:51,880
Speaker 1: trade in automation and AI is over, Um, we all

104
00:05:51,920 --> 00:05:54,600
Speaker 1: better hope not, because we have a labor force participation

105
00:05:54,880 --> 00:05:57,599
Speaker 1: problem that doesn't look like it's going to improve anytime soon.

106
00:05:58,080 --> 00:06:00,240
Speaker 1: So I think you know, as an employer myself, we

107
00:06:00,320 --> 00:06:04,640
Speaker 1: try to find solutions that that that can automate or

108
00:06:04,760 --> 00:06:08,560
Speaker 1: digitize many aspects of our business. And that's really what

109
00:06:08,600 --> 00:06:11,520
Speaker 1: they are doing. What you heard from the farmers is

110
00:06:11,560 --> 00:06:16,239
Speaker 1: that they're having a hard time firing, hiring, sorry, good health,

111
00:06:16,400 --> 00:06:19,400
Speaker 1: and so the the automation on many of these machines

112
00:06:19,800 --> 00:06:22,880
Speaker 1: is really going to help productivity, and I think that's

113
00:06:22,920 --> 00:06:25,280
Speaker 1: really what you want to be looking for as we

114
00:06:25,320 --> 00:06:28,839
Speaker 1: move into this next phase of this secular narrative. In

115
00:06:28,880 --> 00:06:32,480
Speaker 1: my view, um, we're a long way away from fully

116
00:06:32,520 --> 00:06:37,040
Speaker 1: employing the benefits of technology, and with productivity numbers so

117
00:06:37,120 --> 00:06:40,719
Speaker 1: poor right now and a really tight labor market. Uh,

118
00:06:40,720 --> 00:06:45,000
Speaker 1: this this is where employers and chief and information officers

119
00:06:45,000 --> 00:06:47,719
Speaker 1: are going to be looking in corporate America and now

120
00:06:47,760 --> 00:06:51,960
Speaker 1: we see also in the wearying partners economy. It's interesting.

121
00:06:52,240 --> 00:06:54,800
Speaker 1: I mean, a coming like Microsoft, you know, do is

122
00:06:54,800 --> 00:06:57,720
Speaker 1: it a tech company. Is it a value company? Is

123
00:06:57,760 --> 00:07:00,160
Speaker 1: it a growth company? I mean it doesn't. It's all

124
00:07:00,200 --> 00:07:03,400
Speaker 1: those boxes, does it not? It does ri shod. We

125
00:07:03,400 --> 00:07:06,840
Speaker 1: we look at relative dividend yield, so what is the

126
00:07:06,839 --> 00:07:09,679
Speaker 1: stock yielding relative to its past and relative to the SMP.

127
00:07:10,240 --> 00:07:13,240
Speaker 1: In that regard, it is not terribly cheap as it

128
00:07:13,320 --> 00:07:15,480
Speaker 1: was when we first purchased it. But then we also

129
00:07:15,560 --> 00:07:18,400
Speaker 1: look at relative price to sales ratio because sales are,

130
00:07:18,960 --> 00:07:22,600
Speaker 1: in our view, the second most reliable financial metric behind

131
00:07:22,600 --> 00:07:26,000
Speaker 1: the dividend. And see thank you so much for joining

132
00:07:26,080 --> 00:07:28,720
Speaker 1: us as Nancy Tegler, the CEO and c i O

133
00:07:28,840 --> 00:07:30,680
Speaker 1: at Laffa Tangler Investments