1 00:00:00,080 --> 00:00:05,960 Speaker 1: M. This is mesters in Business with very Results on 2 00:00:06,200 --> 00:00:11,040 Speaker 1: Bloomberg Radio this week on the podcast Oh how much 3 00:00:11,080 --> 00:00:13,399 Speaker 1: fun was this? I I can't begin to tell you 4 00:00:13,440 --> 00:00:16,000 Speaker 1: what it's like to sit in a room with the 5 00:00:16,120 --> 00:00:20,200 Speaker 1: Jeremy's Professor Jeremy Siegel, And I keep calling him Professor 6 00:00:20,280 --> 00:00:25,520 Speaker 1: Jeremy Schwartz, but he's just Jeremy Schwartz, chief investment officer 7 00:00:25,680 --> 00:00:28,840 Speaker 1: of the seventy billion dollar e t F and mutual 8 00:00:28,880 --> 00:00:33,000 Speaker 1: fund company Wisdom Tree. I am just a fan of 9 00:00:33,080 --> 00:00:37,919 Speaker 1: both of these guys. I have interviewed Professor Siegel several times. 10 00:00:37,960 --> 00:00:42,480 Speaker 1: He's always fascinating. You'll hear um him sort of zip 11 00:00:42,479 --> 00:00:45,520 Speaker 1: in and out of focus like this because he's sitting 12 00:00:45,560 --> 00:00:49,159 Speaker 1: on the chair, spinning around, just having fun telling stories. 13 00:00:49,200 --> 00:00:51,800 Speaker 1: So if you hear's audio cut in and out, he's 14 00:00:51,880 --> 00:00:55,760 Speaker 1: he's all but spinning in circles. He's just charming as is. 15 00:00:56,280 --> 00:00:59,200 Speaker 1: Jeremy Schwartz is one of the smartest people you'll meet 16 00:00:59,520 --> 00:01:04,080 Speaker 1: in five and ance. Just a thoughtful, intelligent person who 17 00:01:04,160 --> 00:01:09,240 Speaker 1: really understands what value is about, how to find investments 18 00:01:09,280 --> 00:01:13,960 Speaker 1: that will outperform the broader markets with less risk, less volatility. 19 00:01:14,480 --> 00:01:18,200 Speaker 1: He's been a big advocate along with Professor Siegel, of 20 00:01:18,520 --> 00:01:22,679 Speaker 1: fundamental indexing, where you're focusing on things like earnings and 21 00:01:22,760 --> 00:01:27,120 Speaker 1: diving and value, and they have some fascinating things to say. 22 00:01:27,440 --> 00:01:29,560 Speaker 1: The latest version of Stocks for the Long Run has 23 00:01:29,600 --> 00:01:32,840 Speaker 1: just come out. It's It's sold ungodly numbers of copies 24 00:01:33,120 --> 00:01:36,679 Speaker 1: and is on everybody's Best Finance Books of All Time list. 25 00:01:37,240 --> 00:01:40,080 Speaker 1: I found this conversation to be so much fun. We 26 00:01:40,120 --> 00:01:42,039 Speaker 1: could have gone for another couple of hours, but I 27 00:01:42,080 --> 00:01:44,160 Speaker 1: had to stop and send them off to the New 28 00:01:44,240 --> 00:01:47,280 Speaker 1: York Stock Exchange, uh to do whatever they're gonna do there. 29 00:01:48,200 --> 00:01:51,120 Speaker 1: I think you'll enjoy this conversation. I know I did 30 00:01:51,160 --> 00:01:54,680 Speaker 1: with no further ado my sit down with the Jeremy's 31 00:01:54,720 --> 00:01:59,920 Speaker 1: Professor Jeremy Siegel and Jeremy Schwartz. Professor Siegel, you be 32 00:02:00,040 --> 00:02:04,040 Speaker 1: again at Wharton back in seventy six. Did you ever 33 00:02:04,080 --> 00:02:07,360 Speaker 1: imagine a half a century later you're still teaching in 34 00:02:07,400 --> 00:02:10,880 Speaker 1: the same place. That's well, I'm still associated. I'm meritus 35 00:02:11,240 --> 00:02:17,799 Speaker 1: Professor Barry. I actually left active professor in July one 36 00:02:17,840 --> 00:02:23,239 Speaker 1: after forty uh five years of teaching at Ward, and 37 00:02:23,360 --> 00:02:25,960 Speaker 1: I had taught four years University of Chicago before that, 38 00:02:26,080 --> 00:02:30,000 Speaker 1: so forty nine years of university teaching, I've been as 39 00:02:30,040 --> 00:02:33,560 Speaker 1: busy as because finishing as we're going to talk about 40 00:02:33,600 --> 00:02:36,520 Speaker 1: sixth edition of the book, and and conferences more than 41 00:02:36,560 --> 00:02:39,000 Speaker 1: ever because now you can do him on zoom. So 42 00:02:39,040 --> 00:02:41,800 Speaker 1: I can do San Diego at the nine am and 43 00:02:41,840 --> 00:02:44,079 Speaker 1: at ten thirty, I can do New York, which of 44 00:02:44,120 --> 00:02:48,480 Speaker 1: course never used to be possible modern technology and shorts. 45 00:02:48,520 --> 00:02:52,519 Speaker 1: You went to Wharton, you had Professor Siegal as an instructor. 46 00:02:52,680 --> 00:02:55,760 Speaker 1: Tell us what that experience was like, how was he 47 00:02:55,880 --> 00:02:58,000 Speaker 1: as a professor? So I got to work in in 48 00:02:58,120 --> 00:03:01,799 Speaker 1: ninety nine, which was the peak of the tech bubble. 49 00:03:01,840 --> 00:03:03,880 Speaker 1: I was coming into my own seeing the tech bubble, 50 00:03:03,919 --> 00:03:06,560 Speaker 1: living through it had been some experience investing into those 51 00:03:06,560 --> 00:03:08,800 Speaker 1: tech stocks and watching them crash. And he was on 52 00:03:08,960 --> 00:03:11,880 Speaker 1: I got to meet him through who's now the Philly 53 00:03:11,880 --> 00:03:14,280 Speaker 1: Fed President, Patrick Harker. I was on the thing called 54 00:03:14,280 --> 00:03:16,920 Speaker 1: the Dean's Advisory Board. We organized sessions with the professor 55 00:03:16,960 --> 00:03:18,680 Speaker 1: and I got to meet him through that. And then 56 00:03:18,720 --> 00:03:20,360 Speaker 1: he got me into his class. Didn'tven know he had 57 00:03:20,360 --> 00:03:22,720 Speaker 1: to applied with his class. He got me into his class. 58 00:03:23,360 --> 00:03:25,840 Speaker 1: And what do you think you just walking off the street, 59 00:03:26,760 --> 00:03:30,000 Speaker 1: Professor see I'm here. It doesn't work. I didn't know that, 60 00:03:31,120 --> 00:03:33,920 Speaker 1: but I was lucky to meet him. And then so 61 00:03:34,240 --> 00:03:35,840 Speaker 1: oh one was when I was sitting in his class. 62 00:03:35,840 --> 00:03:38,040 Speaker 1: So this is after, you know, March up two thousand, 63 00:03:38,120 --> 00:03:40,760 Speaker 1: his famous outbed big cap tech socks are suckers. Bet 64 00:03:40,800 --> 00:03:43,480 Speaker 1: I remember that vividly. So he's on CNBC all the 65 00:03:43,520 --> 00:03:45,840 Speaker 1: time talk about this, and I needed something to do 66 00:03:45,920 --> 00:03:49,480 Speaker 1: for the summer, and that was the third edition back 67 00:03:49,520 --> 00:03:51,440 Speaker 1: in oh two, we helped. That was my first product 68 00:03:51,440 --> 00:03:53,400 Speaker 1: with him, was the third edition of Stocks Long Run. Really, 69 00:03:53,560 --> 00:03:56,760 Speaker 1: so you have a twenty year relationship with Stocks for 70 00:03:56,800 --> 00:04:00,640 Speaker 1: the Long Run as well as with Professor Siegel. It's great. 71 00:04:00,880 --> 00:04:04,080 Speaker 1: So the question for you is you come out of Wharton, 72 00:04:04,120 --> 00:04:07,440 Speaker 1: how do you end up at Wisdom Trade? Well, Wisdom 73 00:04:07,440 --> 00:04:10,880 Speaker 1: Tree now I've been there seventeen years. The professor we 74 00:04:11,000 --> 00:04:14,360 Speaker 1: knew the founder, Johnathan Steinberg. He had a magazine. The 75 00:04:14,400 --> 00:04:17,520 Speaker 1: professor was publishing for the magazine, and the Ceinberg family 76 00:04:17,560 --> 00:04:20,000 Speaker 1: very involved in Wharton, so we're looking at their indexes. 77 00:04:20,160 --> 00:04:23,000 Speaker 1: The second book, The Future for Investors, which we did, 78 00:04:23,360 --> 00:04:25,680 Speaker 1: came out of five had a lot of work on 79 00:04:25,800 --> 00:04:30,800 Speaker 1: dividend investing, value investing, and we helped validate their initial research, 80 00:04:30,920 --> 00:04:34,040 Speaker 1: which got the company funded to know four. The professor 81 00:04:34,080 --> 00:04:36,320 Speaker 1: invested and joined as an advisor, and they saw I 82 00:04:36,320 --> 00:04:39,320 Speaker 1: did all his research and now the second longest employee 83 00:04:39,440 --> 00:04:42,680 Speaker 1: and have been there from the very early days. Just 84 00:04:42,760 --> 00:04:46,080 Speaker 1: you're right behind Jonah, who remains elusive and is a 85 00:04:46,080 --> 00:04:48,960 Speaker 1: fantom figure who I can't get to the studio, but 86 00:04:49,000 --> 00:04:52,640 Speaker 1: we'll talk about that later. So, so wisdom Tree goes 87 00:04:52,680 --> 00:04:55,839 Speaker 1: public the two you affiliated with it. But I recall 88 00:04:55,960 --> 00:05:01,960 Speaker 1: vividly Professor Siegel as a traditional market cap weighted index 89 00:05:02,080 --> 00:05:06,680 Speaker 1: sort of guy. How did you find dividend waiting or 90 00:05:06,760 --> 00:05:10,360 Speaker 1: valuating or other ways of looking at what some people 91 00:05:10,839 --> 00:05:14,040 Speaker 1: terribly call smart data? But how did you find your 92 00:05:14,080 --> 00:05:17,839 Speaker 1: way to those sort of indexing which is what wisdom 93 00:05:17,880 --> 00:05:21,360 Speaker 1: True has become known for. And as Jeremy mentioned, the 94 00:05:21,360 --> 00:05:29,000 Speaker 1: tech bubble itself was quite instrumental in saying just a minute, 95 00:05:29,200 --> 00:05:34,919 Speaker 1: it's cap waiting the very best and what jonnod Steinberg 96 00:05:34,920 --> 00:05:37,400 Speaker 1: had called me up and said, you know, we were 97 00:05:37,400 --> 00:05:41,520 Speaker 1: thinking of fundamentally waiting instead of by a just market cap, 98 00:05:41,839 --> 00:05:45,800 Speaker 1: which is the assumption of efficient market hypothesis, by either 99 00:05:45,920 --> 00:05:52,360 Speaker 1: earnings or dividends would you do historical research on stocks 100 00:05:52,880 --> 00:05:55,320 Speaker 1: to see whether it gives you a better risk return 101 00:05:55,360 --> 00:05:58,400 Speaker 1: trade off? And that's where Jeremy came in, because he 102 00:05:58,560 --> 00:06:01,640 Speaker 1: was my right hand man, to say the least in 103 00:06:01,680 --> 00:06:03,720 Speaker 1: doing all this. We did it not only for the US, 104 00:06:03,760 --> 00:06:06,520 Speaker 1: we did it internaturally. We wrote a white paper that 105 00:06:06,640 --> 00:06:10,000 Speaker 1: was associated with it. And when we did it, I said, 106 00:06:10,040 --> 00:06:14,080 Speaker 1: you know what, it is, significantly better risk return trade offs. 107 00:06:14,680 --> 00:06:18,040 Speaker 1: It makes sense for me. I was formulating a theory 108 00:06:18,080 --> 00:06:22,719 Speaker 1: called the noisy market hypothesis instead of the efficient market hypothesis, 109 00:06:23,040 --> 00:06:26,920 Speaker 1: where this sort of fundamental indexing would do better. And 110 00:06:27,200 --> 00:06:28,960 Speaker 1: John Oh asked me, and I said, you know, I've 111 00:06:29,000 --> 00:06:32,599 Speaker 1: I've spoken for dozens of companies. I've never really taken 112 00:06:32,640 --> 00:06:37,200 Speaker 1: any official position, but I said I would be willing 113 00:06:37,720 --> 00:06:42,360 Speaker 1: to certainly consider being an advisor on wisdom Tree. And 114 00:06:42,400 --> 00:06:45,880 Speaker 1: I am a senior investment strategy advisor to wisdom Tree 115 00:06:46,000 --> 00:06:49,159 Speaker 1: since that beginning. So let's not bury the lead. If 116 00:06:49,279 --> 00:06:53,560 Speaker 1: market cap isn't the most efficient way to organize an index, 117 00:06:54,320 --> 00:06:58,120 Speaker 1: what is what is? Well? Fundamentals more specific more what 118 00:06:58,320 --> 00:07:04,040 Speaker 1: we like dive it in and or earnings as the 119 00:07:04,080 --> 00:07:09,400 Speaker 1: waiting procedure. So value with a dividend. Yes, and what 120 00:07:09,440 --> 00:07:11,880 Speaker 1: it does give you is a is a value tilt. 121 00:07:11,880 --> 00:07:17,239 Speaker 1: There's no question about that. And I remember telling dono Um, 122 00:07:17,560 --> 00:07:19,520 Speaker 1: I'll go with you on this, but we have to 123 00:07:19,560 --> 00:07:22,080 Speaker 1: be inexpensive. I don't want to to de charge a 124 00:07:22,120 --> 00:07:24,680 Speaker 1: hunter basis points, and he said, I want as many 125 00:07:24,680 --> 00:07:26,920 Speaker 1: people to use it. I want it to be and expanding. 126 00:07:26,960 --> 00:07:30,160 Speaker 1: We came out with the lowest cost. Now became more 127 00:07:30,200 --> 00:07:33,600 Speaker 1: competitive since then. But when we came out with really lowest, 128 00:07:33,600 --> 00:07:36,960 Speaker 1: definitely lowest cost of all, I think the fundamental we 129 00:07:37,080 --> 00:07:40,600 Speaker 1: waited indexes and you guys prefer the name fundamental as 130 00:07:40,600 --> 00:07:43,280 Speaker 1: opposed to smart beta. I think kind of smart beta 131 00:07:43,320 --> 00:07:46,200 Speaker 1: has fallen out of semantics and branding. We actually use 132 00:07:46,280 --> 00:07:50,040 Speaker 1: the term modern alfa now modern alfa, so it's you know, 133 00:07:50,240 --> 00:07:52,280 Speaker 1: more in mine with what you're trying to achieve. You're 134 00:07:52,280 --> 00:07:54,320 Speaker 1: not just trying to be beta. You'r You can say 135 00:07:54,320 --> 00:07:57,480 Speaker 1: you're being dumb beta, but that's just me, that's my preference. 136 00:07:57,800 --> 00:08:00,640 Speaker 1: I don't it's so weird how these names sort of 137 00:08:00,720 --> 00:08:03,720 Speaker 1: catch fire for a while and they go viral. We'll 138 00:08:03,720 --> 00:08:08,360 Speaker 1: talk a little bit about your recent viral uh TV appearance, 139 00:08:09,200 --> 00:08:11,840 Speaker 1: but before I get to that, I have to ask, so, 140 00:08:11,960 --> 00:08:15,000 Speaker 1: how do you two guys meet. You're an undergraduate or 141 00:08:15,000 --> 00:08:21,720 Speaker 1: a graduate student, undergraduate undergrad, so you're just pennsylvani walking around. Well, 142 00:08:22,120 --> 00:08:25,320 Speaker 1: you know, I have to tell you. Actually he invited 143 00:08:25,360 --> 00:08:29,080 Speaker 1: me to be a talk to an some student group, 144 00:08:29,440 --> 00:08:33,160 Speaker 1: and I was so busy it slipped my mind. Um 145 00:08:33,800 --> 00:08:36,840 Speaker 1: and I felt so embarrassed. And he came up with 146 00:08:36,880 --> 00:08:39,400 Speaker 1: a smile and said, oh, professor, to say a weekend 147 00:08:39,440 --> 00:08:43,000 Speaker 1: we schedule And I said, this is a truly wonderful 148 00:08:43,640 --> 00:08:47,000 Speaker 1: I was worried. Okay, yeah he was. I was okay, 149 00:08:47,000 --> 00:08:49,600 Speaker 1: but I would say, and I repeat this in the 150 00:08:49,600 --> 00:08:54,160 Speaker 1: preface of this new edition. When he offered to work 151 00:08:54,240 --> 00:08:57,160 Speaker 1: for me, we were working through some risk return type 152 00:08:57,160 --> 00:09:01,160 Speaker 1: of analysis, and I said, listen, this is gonna take 153 00:09:01,160 --> 00:09:02,839 Speaker 1: a little bit of time, but I want to get 154 00:09:02,920 --> 00:09:05,840 Speaker 1: you familiar with the data. I know was a Friday, 155 00:09:05,880 --> 00:09:08,480 Speaker 1: coming Monday, and you know, familiar stars with the data 156 00:09:08,679 --> 00:09:10,720 Speaker 1: coming Monday, and we'll discuss how to do it to 157 00:09:10,720 --> 00:09:13,559 Speaker 1: get the results. I know the answers to this keep going. 158 00:09:13,640 --> 00:09:16,880 Speaker 1: I love the story, I mean. And so he came 159 00:09:16,880 --> 00:09:20,000 Speaker 1: in on Monday and I said, probably Saturday, Yeah, Saturday, 160 00:09:20,080 --> 00:09:23,520 Speaker 1: probably you know, you know, I was in on Saturdays. 161 00:09:24,760 --> 00:09:28,800 Speaker 1: It was a Saturday, all right, Jeremy remembers better than I. Um, 162 00:09:28,880 --> 00:09:31,400 Speaker 1: and you know, I said, okay, let's talk about it. 163 00:09:31,440 --> 00:09:33,080 Speaker 1: And he said, well, professor to go, I do have 164 00:09:33,160 --> 00:09:35,880 Speaker 1: I think all the answers that you want. I've done 165 00:09:35,880 --> 00:09:39,440 Speaker 1: this and you do. And we looked. I looked him 166 00:09:39,440 --> 00:09:42,319 Speaker 1: over and said this looks right. And I said, okay, 167 00:09:42,640 --> 00:09:46,679 Speaker 1: I've got someone special here. Um. And I did you know, 168 00:09:47,160 --> 00:09:49,640 Speaker 1: I know, I have a lot of business professors who 169 00:09:49,679 --> 00:09:54,840 Speaker 1: listened to this podcast and assigned specific ones to their students. 170 00:09:54,880 --> 00:09:57,679 Speaker 1: But that should be a lesson to somebody who says, hey, 171 00:09:57,720 --> 00:10:00,040 Speaker 1: how do I stand out for the crowd? When the 172 00:10:00,120 --> 00:10:02,320 Speaker 1: professor says, come in, we'll talk about the assignment, and 173 00:10:02,360 --> 00:10:04,839 Speaker 1: you come in and say, I've already crunched the number, 174 00:10:05,000 --> 00:10:08,440 Speaker 1: here's the data. Most of what you've written previously is right. 175 00:10:09,120 --> 00:10:12,120 Speaker 1: Here's a couple of little mistakes I caught that has 176 00:10:12,160 --> 00:10:16,520 Speaker 1: to impress you, right, Uh, definitely, it definitely impressed me. 177 00:10:16,600 --> 00:10:18,760 Speaker 1: I mean all through our relationship, you know, you know, 178 00:10:18,840 --> 00:10:21,240 Speaker 1: I mean it's amazing because he you know, travels back 179 00:10:21,240 --> 00:10:24,360 Speaker 1: and forth, you know, living in Philadelphia and and working 180 00:10:24,360 --> 00:10:26,360 Speaker 1: in New York, although he doesn't sertily have to do 181 00:10:26,400 --> 00:10:28,640 Speaker 1: it as much now because of you know, how much 182 00:10:28,640 --> 00:10:31,040 Speaker 1: are you splitting your time? So we with some treaty 183 00:10:31,040 --> 00:10:33,800 Speaker 1: went to be a fully remote first organization. And you 184 00:10:33,840 --> 00:10:36,559 Speaker 1: talked about John, he was the most New york In person. 185 00:10:36,600 --> 00:10:38,640 Speaker 1: I mean I tried to move to Miami called twelve 186 00:10:38,760 --> 00:10:40,800 Speaker 1: thirteen years ago. He said, no, you can't move to Miami. 187 00:10:41,520 --> 00:10:44,800 Speaker 1: That's where I grew up. And we're now completely remote first. 188 00:10:44,840 --> 00:10:47,600 Speaker 1: We find it to be very productive. We are you know, 189 00:10:47,600 --> 00:10:49,480 Speaker 1: we have a global team of a team in Europe. 190 00:10:50,000 --> 00:10:52,720 Speaker 1: My research is almost thirty people and almost half you know, 191 00:10:52,880 --> 00:10:55,480 Speaker 1: half them in Europe, and we can be more interconnected 192 00:10:55,559 --> 00:10:59,080 Speaker 1: doing talking to them weekly in a different format resoom 193 00:11:00,320 --> 00:11:02,200 Speaker 1: or teams that were on you know, it's it's a 194 00:11:03,160 --> 00:11:05,120 Speaker 1: so I don't come up as much, but you do 195 00:11:05,200 --> 00:11:07,120 Speaker 1: find the benefits that I was in the office yesterday 196 00:11:07,120 --> 00:11:09,520 Speaker 1: we had six our team members in the opposite You 197 00:11:09,559 --> 00:11:11,680 Speaker 1: do find little things. There is the benefit of the 198 00:11:11,679 --> 00:11:14,800 Speaker 1: collaboration that you find things you wouldn't have found on 199 00:11:14,840 --> 00:11:19,000 Speaker 1: a zoom call because you're bantering. That's the keyword those collaboration. 200 00:11:19,120 --> 00:11:22,440 Speaker 1: To have everybody slep into the office to sit and 201 00:11:22,480 --> 00:11:25,880 Speaker 1: stare at a computer or worse, do zoom calls from 202 00:11:25,920 --> 00:11:28,240 Speaker 1: the office is kind of pointless. But when you could 203 00:11:28,240 --> 00:11:31,280 Speaker 1: get together face to face and have conversations, that's a 204 00:11:31,400 --> 00:11:34,840 Speaker 1: very different experience. So let's talk a little bit about 205 00:11:34,920 --> 00:11:39,560 Speaker 1: this book, which is really become a classic. The really 206 00:11:39,600 --> 00:11:42,320 Speaker 1: the first question I gotta ask is how do you 207 00:11:42,400 --> 00:11:46,880 Speaker 1: go about updating and editing a book that really has 208 00:11:47,000 --> 00:11:51,480 Speaker 1: stood the test of time. For jeez, it's it's almost 209 00:11:51,480 --> 00:11:55,400 Speaker 1: thirty years. It's on everybody's must have list, top ten 210 00:11:55,480 --> 00:11:59,560 Speaker 1: finance book, best investment books of all time. Do you 211 00:12:00,120 --> 00:12:03,680 Speaker 1: roach updating this with a little bit of trepidation? What's 212 00:12:03,720 --> 00:12:06,880 Speaker 1: the experience? Well, you're right, the first edition came out 213 00:12:06,920 --> 00:12:13,240 Speaker 1: in May of using data up through two, so we 214 00:12:13,320 --> 00:12:16,719 Speaker 1: have thirty years more so now it's really stucks for them. 215 00:12:16,720 --> 00:12:20,079 Speaker 1: And now, of course it is the sixth edition, but 216 00:12:20,400 --> 00:12:23,680 Speaker 1: it's also the fifth edition was written just after the 217 00:12:23,760 --> 00:12:26,960 Speaker 1: Financial christ a couple of years after the financial crisis, 218 00:12:27,360 --> 00:12:29,160 Speaker 1: and a lot of things have gone. I'm in a 219 00:12:29,240 --> 00:12:33,360 Speaker 1: huge bull market. UM the COVID, which is a whole 220 00:12:33,440 --> 00:12:35,960 Speaker 1: chapter on UM. It's very up to date. I mean, 221 00:12:36,480 --> 00:12:39,120 Speaker 1: it even includes some data on the recent bear market, 222 00:12:39,160 --> 00:12:42,959 Speaker 1: which most general books can get as far as as 223 00:12:43,040 --> 00:12:47,360 Speaker 1: we got bear marks. A little bit is in there, Yeah, 224 00:12:47,400 --> 00:12:49,640 Speaker 1: a little bit is in there. Um, you know, we 225 00:12:49,679 --> 00:12:52,160 Speaker 1: don't know if it's exactly over yet. We'll certainly talk 226 00:12:52,200 --> 00:12:57,199 Speaker 1: about that later, but um, Jeremy, yeah, we'll nail We'll 227 00:12:57,200 --> 00:13:01,080 Speaker 1: try to nail that. But there was so much more. 228 00:13:01,440 --> 00:13:04,560 Speaker 1: I had to say. This is the biggest revision and 229 00:13:04,600 --> 00:13:09,000 Speaker 1: the most new material of any of them. There's there's 230 00:13:09,040 --> 00:13:12,199 Speaker 1: been almost five new chapters that have been added, and 231 00:13:12,240 --> 00:13:14,960 Speaker 1: there's been parts that have been added of others. I mean, 232 00:13:15,080 --> 00:13:17,840 Speaker 1: obviously I deal with cryptocurrencies and bitcoin, which was not 233 00:13:18,000 --> 00:13:20,600 Speaker 1: an issue ten years ago. You can feel how heavy 234 00:13:20,640 --> 00:13:23,200 Speaker 1: it is. I know, this is this is vaccinated and 235 00:13:23,200 --> 00:13:27,280 Speaker 1: boost days. This is really uh not that the other 236 00:13:27,320 --> 00:13:30,360 Speaker 1: books were skimpy, but you could tell this has a 237 00:13:30,400 --> 00:13:32,800 Speaker 1: little bit of a he to it. So we have 238 00:13:32,880 --> 00:13:35,959 Speaker 1: we were for instance, um, in the past, I had 239 00:13:36,040 --> 00:13:39,839 Speaker 1: one chapter basically on value and growth. There's four chapters 240 00:13:39,920 --> 00:13:42,920 Speaker 1: that are directly related to value and growth really, I 241 00:13:42,920 --> 00:13:47,160 Speaker 1: mean and other factors investing, which became very popular in 242 00:13:47,200 --> 00:13:50,080 Speaker 1: the last ten years. Uh. One section I added to 243 00:13:50,120 --> 00:13:52,960 Speaker 1: another one was on real estate I've never had anything 244 00:13:52,960 --> 00:13:55,319 Speaker 1: on real estate returns before. I mean, and these are 245 00:13:55,360 --> 00:13:57,640 Speaker 1: just some of the changes that I wanted to put 246 00:13:57,679 --> 00:13:59,959 Speaker 1: in to make it more complete. So let's talk about 247 00:14:00,040 --> 00:14:02,480 Speaker 1: some of these additions that you added. We'll start with 248 00:14:02,600 --> 00:14:07,040 Speaker 1: real estate. Yeah, your friend, professor Bob Schiller over Yale 249 00:14:07,200 --> 00:14:12,160 Speaker 1: puts out the case Shiller Housing Index, and I believe 250 00:14:12,320 --> 00:14:15,720 Speaker 1: if you look at housing for the long run, doesn't 251 00:14:15,800 --> 00:14:18,600 Speaker 1: do much better than inflation, does it. So this is 252 00:14:18,600 --> 00:14:22,400 Speaker 1: the interesting thing. The price doesn't do much better than inflation, 253 00:14:22,560 --> 00:14:26,280 Speaker 1: but there's a return. Well, you gotta live somewhere. Start. 254 00:14:26,680 --> 00:14:28,480 Speaker 1: First of all, there's two types. First of all, your 255 00:14:28,600 --> 00:14:32,080 Speaker 1: it's your own house residential. And then we now have 256 00:14:32,160 --> 00:14:35,840 Speaker 1: and this is the research we have. We have fifty 257 00:14:35,920 --> 00:14:40,160 Speaker 1: years of reat data that we never had before. So 258 00:14:40,200 --> 00:14:42,120 Speaker 1: I felt it was long enough. I mean, it's not 259 00:14:42,160 --> 00:14:45,960 Speaker 1: the two twenty years of stock market data, but fifty 260 00:14:46,040 --> 00:14:49,320 Speaker 1: years is still a good time. So I did a 261 00:14:49,480 --> 00:14:53,480 Speaker 1: very complete analysis on that, and let me just summarize. 262 00:14:53,560 --> 00:14:57,000 Speaker 1: I think the most interesting part. The return on the 263 00:14:57,080 --> 00:15:02,680 Speaker 1: read index is virtually exact. Wait, the same as the 264 00:15:02,880 --> 00:15:06,040 Speaker 1: S and P five. Most people, Oh my god, it's 265 00:15:06,080 --> 00:15:09,680 Speaker 1: the same. And it's so much more stable. No, this 266 00:15:09,760 --> 00:15:11,760 Speaker 1: is the interesting thing people think were the state is 267 00:15:11,800 --> 00:15:16,560 Speaker 1: more stable than the stock market in every recession except one, 268 00:15:16,720 --> 00:15:19,480 Speaker 1: and that was the tech bust of two thousands. The 269 00:15:19,640 --> 00:15:23,160 Speaker 1: draw down of reeds was greater than the SNP. That's 270 00:15:23,160 --> 00:15:26,480 Speaker 1: really interesting. You know, people don't get a print on 271 00:15:26,520 --> 00:15:31,320 Speaker 1: their house everything every second, so it feels stable because 272 00:15:31,360 --> 00:15:35,320 Speaker 1: you're not seeing prices. But in reality, any day you 273 00:15:35,320 --> 00:15:37,080 Speaker 1: want to put your house up for sale, you might 274 00:15:37,120 --> 00:15:38,920 Speaker 1: get a different if you I mean, you know, if 275 00:15:39,080 --> 00:15:40,760 Speaker 1: if the times are bad and then you say I 276 00:15:40,760 --> 00:15:43,120 Speaker 1: got to sell it in the next five minutes, you 277 00:15:43,120 --> 00:15:46,360 Speaker 1: don't want to look at that Price's so you mentioned 278 00:15:46,360 --> 00:15:49,280 Speaker 1: you have a couple of new chapters on value and growth. 279 00:15:49,960 --> 00:15:53,119 Speaker 1: Up until this year, values seem to have been struggling 280 00:15:53,560 --> 00:15:58,440 Speaker 1: against growth, certainly in growth wildly up page. That's euphemism, 281 00:15:58,640 --> 00:16:04,040 Speaker 1: very struggling. I'm being played. Well you know, okay, so 282 00:16:05,600 --> 00:16:09,600 Speaker 1: I could say that, right, yeah, it is my it 283 00:16:09,720 --> 00:16:12,520 Speaker 1: is mightily struggled. Why do you think that is given 284 00:16:12,560 --> 00:16:16,240 Speaker 1: the historical advantage of value over everything and and and 285 00:16:16,240 --> 00:16:18,760 Speaker 1: and you know, I mean, I mean everyone has has 286 00:16:18,800 --> 00:16:20,560 Speaker 1: said this way before me, and it was the worst 287 00:16:20,640 --> 00:16:24,920 Speaker 1: ten years. Um. Actually, the worst fifteen years in history, 288 00:16:24,920 --> 00:16:26,480 Speaker 1: and when we we have value and growth back to 289 00:16:28,720 --> 00:16:34,080 Speaker 1: there's never been anything that has has approached the underperformance. 290 00:16:34,440 --> 00:16:39,600 Speaker 1: And I would say the major reason for that was 291 00:16:40,280 --> 00:16:45,400 Speaker 1: the boom of the giant tech firms. So it's Apple, 292 00:16:45,480 --> 00:16:48,400 Speaker 1: it's Amazon, mean, it used to be called fangs. Some 293 00:16:48,520 --> 00:16:51,600 Speaker 1: have gone out of favor obviously with the bear market, 294 00:16:51,720 --> 00:16:55,680 Speaker 1: or or have shifted, and arguably they went from an 295 00:16:55,760 --> 00:17:01,880 Speaker 1: under priced position in two thousand and UM four I'd 296 00:17:01,920 --> 00:17:06,880 Speaker 1: say UM or two thousand six seven eight, they were 297 00:17:07,000 --> 00:17:10,479 Speaker 1: under priced probably at that time given their tremendous further growth, 298 00:17:10,680 --> 00:17:14,200 Speaker 1: and as as usual, they got overpriced at the top. 299 00:17:14,480 --> 00:17:17,119 Speaker 1: But that I'm not gonna say the word hijack the 300 00:17:17,160 --> 00:17:20,120 Speaker 1: market because that sounds like they did something illegal. They 301 00:17:20,119 --> 00:17:22,000 Speaker 1: had they had a lot of a lot more minds, 302 00:17:23,280 --> 00:17:26,159 Speaker 1: you know, the percent that was wrapped up in that, 303 00:17:26,280 --> 00:17:28,840 Speaker 1: and then of course we were recapuated index you were 304 00:17:28,920 --> 00:17:34,680 Speaker 1: there in that, and UM it's been virtually impossible for 305 00:17:34,720 --> 00:17:40,199 Speaker 1: any value strategy to have overcome the great bull market 306 00:17:40,280 --> 00:17:43,720 Speaker 1: of the big tech companies of the last fifteen years, 307 00:17:43,760 --> 00:17:50,760 Speaker 1: which probably ended when you know, early twenty late. So 308 00:17:50,760 --> 00:17:53,679 Speaker 1: so the obvious question for both of you is what 309 00:17:53,800 --> 00:17:58,239 Speaker 1: does this suggest about near term future performance? And by 310 00:17:58,320 --> 00:18:01,480 Speaker 1: near time I mean the next decade because I'm talking 311 00:18:01,480 --> 00:18:04,840 Speaker 1: to you guys, which normally we're talking about centuries. But 312 00:18:05,000 --> 00:18:07,680 Speaker 1: for the rest of the ties, what does this say 313 00:18:07,720 --> 00:18:12,159 Speaker 1: about value versus growth? Interestingly, this year you've had a 314 00:18:12,200 --> 00:18:15,000 Speaker 1: big correction and a lot of the mega growth stocks, 315 00:18:15,000 --> 00:18:19,560 Speaker 1: the unprofitable tech stocks collapse the hardest. It's interesting, unprofitable text, 316 00:18:19,640 --> 00:18:24,240 Speaker 1: unprofitable tech. What's interesting. Even within value there's been a 317 00:18:24,280 --> 00:18:26,480 Speaker 1: big dispersion, so values being growth by like in the 318 00:18:26,520 --> 00:18:29,480 Speaker 1: Russell value versus growth they call it almost two thousand 319 00:18:29,880 --> 00:18:34,120 Speaker 1: basis points, but that's giant. But there's even still high 320 00:18:34,240 --> 00:18:37,439 Speaker 1: dividend stocks versus the traditional price to book value has 321 00:18:37,440 --> 00:18:40,359 Speaker 1: got like another thousand basis points. It's it's so high 322 00:18:40,359 --> 00:18:43,679 Speaker 1: diving stocks are definitely doing well relatives, so some of 323 00:18:43,720 --> 00:18:45,480 Speaker 1: that is, well, what is the high divent stock that's 324 00:18:45,520 --> 00:18:48,679 Speaker 1: not in the price to book indexes? Overweight energy stocks 325 00:18:48,680 --> 00:18:51,320 Speaker 1: which have been the past year, and then S and 326 00:18:51,359 --> 00:18:54,119 Speaker 1: PA got down to three percent, right, it was double 327 00:18:54,200 --> 00:18:57,199 Speaker 1: digits fifty. This is the challenges of cap waiting. It 328 00:18:57,280 --> 00:18:59,679 Speaker 1: rides things down, will never add to the weight. But 329 00:18:59,760 --> 00:19:02,800 Speaker 1: high divn stocks. You know, in one of our baskets 330 00:19:02,800 --> 00:19:05,960 Speaker 1: of high divns DHS is eighteen to twenty percent energy 331 00:19:06,400 --> 00:19:09,920 Speaker 1: and that restorts rebalances every December. It's going to stay 332 00:19:09,920 --> 00:19:13,680 Speaker 1: that way. So a high dividend index, how has it 333 00:19:13,800 --> 00:19:17,679 Speaker 1: something like that done in It's up about two thousand 334 00:19:17,720 --> 00:19:20,440 Speaker 1: bases points ahead of the SMP. I mean, it's basically large, 335 00:19:20,440 --> 00:19:28,840 Speaker 1: meaning if it down depending on and still where you say, 336 00:19:29,080 --> 00:19:31,440 Speaker 1: well have you have you had all your performance? And 337 00:19:31,600 --> 00:19:35,119 Speaker 1: so what it's at eleven times earnings and nine percent earnings, 338 00:19:35,240 --> 00:19:38,560 Speaker 1: so it's still cheap nine percent earnings before rebalancing and 339 00:19:38,600 --> 00:19:40,800 Speaker 1: a few you know, and nine that's a that's a 340 00:19:40,800 --> 00:19:43,560 Speaker 1: pretty substantial earnings shield, isn't versus the one pe and 341 00:19:43,600 --> 00:19:46,080 Speaker 1: a half percent tips rate with a real yield bond 342 00:19:46,160 --> 00:19:49,280 Speaker 1: yield almost an eight percent equity probably eight percent equity 343 00:19:49,280 --> 00:19:53,159 Speaker 1: premium on this basket. And so for the volatility of 344 00:19:53,200 --> 00:19:55,840 Speaker 1: the markets, I do think it is still you know, 345 00:19:55,880 --> 00:19:58,680 Speaker 1: you can say decade ahead, all right, but the next 346 00:19:58,680 --> 00:20:00,439 Speaker 1: three to five years I think it is a very 347 00:20:00,520 --> 00:20:04,280 Speaker 1: attractive place to So the product that focuses on high 348 00:20:04,359 --> 00:20:08,840 Speaker 1: dividend yielding value stocks at Wisdom Tree, which funds would 349 00:20:08,880 --> 00:20:12,280 Speaker 1: be covered by that. DHS is the US version, there's 350 00:20:12,280 --> 00:20:14,800 Speaker 1: a whole family. DHS is the U S, d t 351 00:20:15,040 --> 00:20:17,920 Speaker 1: H is the international, d e M is the emerging 352 00:20:18,600 --> 00:20:20,480 Speaker 1: you know, you go to the emerging markets, which has 353 00:20:20,520 --> 00:20:23,159 Speaker 1: been way out of favor for years and years and year. 354 00:20:23,280 --> 00:20:26,760 Speaker 1: This is like a five five pe type stocks. Now 355 00:20:26,800 --> 00:20:29,760 Speaker 1: this is now you're going to China, China banks, You're 356 00:20:29,760 --> 00:20:34,439 Speaker 1: going to energy, materials, commodities, cyclical stocks. But you're getting 357 00:20:35,080 --> 00:20:38,199 Speaker 1: close to double digit yields and what is the dividendal 358 00:20:38,280 --> 00:20:42,480 Speaker 1: now on something like the average yields of the stocks. 359 00:20:42,520 --> 00:20:44,560 Speaker 1: I mean, you wanted stock to look at Petro brass 360 00:20:44,600 --> 00:20:50,159 Speaker 1: in Brazil almost at dividend. The problem is it's in 361 00:20:50,200 --> 00:20:53,080 Speaker 1: Brazil and people are nervous. But energy is you know, 362 00:20:53,119 --> 00:20:55,560 Speaker 1: they're paying out a big percentage of their earnings is dividends. 363 00:20:55,560 --> 00:20:57,760 Speaker 1: This is a well covered it is. You know, it's 364 00:20:57,800 --> 00:21:00,439 Speaker 1: a very interesting dynamic. Yeah, I think what is the 365 00:21:00,480 --> 00:21:03,800 Speaker 1: pe of Brazil like six or seven? And whose curritty 366 00:21:03,880 --> 00:21:07,439 Speaker 1: is up on the year. It's it's, it's it's and 367 00:21:07,480 --> 00:21:09,960 Speaker 1: it looks like I think Ja Silva is gonna win. 368 00:21:10,160 --> 00:21:12,879 Speaker 1: Who's uh? I mean, you know we could have opinion 369 00:21:13,000 --> 00:21:16,959 Speaker 1: Bossonaro versus da Silva. I mean they both have deficiencies, obviously, 370 00:21:17,400 --> 00:21:23,600 Speaker 1: but I mean, you know, DeSilva was UH president for 371 00:21:23,680 --> 00:21:27,920 Speaker 1: quite a long time, and although he was considered a 372 00:21:28,000 --> 00:21:31,959 Speaker 1: socialist at one point, let the markets work and evaluations 373 00:21:31,960 --> 00:21:33,879 Speaker 1: were much higher under da Silva than they were in 374 00:21:33,920 --> 00:21:37,600 Speaker 1: their Bolson Arrow um on On. I mean, I'm not 375 00:21:37,640 --> 00:21:40,919 Speaker 1: advocating Brazil. I'm just kind of commenting on what, you know, 376 00:21:41,000 --> 00:21:42,920 Speaker 1: commenting on Brazil. But I mean we could talk about 377 00:21:42,920 --> 00:21:46,800 Speaker 1: other countries. The countries I mean, I mean what we 378 00:21:46,960 --> 00:21:50,200 Speaker 1: were forced to mark wall Russia down to zero is yeah, correct. 379 00:21:51,080 --> 00:21:53,359 Speaker 1: But we're with a few index providers and actually your 380 00:21:53,560 --> 00:21:56,120 Speaker 1: Bloomberg colleagues like love me talking about this, but we're 381 00:21:56,119 --> 00:21:58,640 Speaker 1: the only index ruder hasn't kicked Russia out of the index, 382 00:21:59,080 --> 00:22:01,639 Speaker 1: and we're going through the index rebounds this week. Actually, 383 00:22:01,640 --> 00:22:03,720 Speaker 1: and I'm still not kicking out the index. I'm marking 384 00:22:03,720 --> 00:22:08,800 Speaker 1: it at zero. What's the downside, It's already marked at zero, 385 00:22:09,320 --> 00:22:13,680 Speaker 1: so the investment downside, it's the political fallout. But my 386 00:22:13,680 --> 00:22:15,600 Speaker 1: my point, I'm trying to run these funds in the 387 00:22:15,640 --> 00:22:17,840 Speaker 1: best interests of shareholders. I mean, not that you could 388 00:22:17,880 --> 00:22:20,600 Speaker 1: sell your Russian holdings anyway, there's no more. But so 389 00:22:20,640 --> 00:22:22,679 Speaker 1: the day that you're allowed to sell it, should I 390 00:22:22,680 --> 00:22:26,080 Speaker 1: sell it to day? The government requirement? Was that an 391 00:22:26,119 --> 00:22:30,240 Speaker 1: sec requirement? It's all a political statement, right, So there's 392 00:22:30,440 --> 00:22:33,280 Speaker 1: now it's a very There is no place to sell that, 393 00:22:33,480 --> 00:22:35,880 Speaker 1: so you market it to zero market zero. We keep 394 00:22:35,920 --> 00:22:37,800 Speaker 1: it in the index, and if it ever has value, 395 00:22:37,840 --> 00:22:40,680 Speaker 1: we can recoup the value for shareholders. But you know, 396 00:22:40,720 --> 00:22:43,440 Speaker 1: we're not forcing it out right today because there's no 397 00:22:43,600 --> 00:22:46,639 Speaker 1: real point to doing that. Why why, I mean, we 398 00:22:46,680 --> 00:22:52,480 Speaker 1: don't love Russia or Putin's it's horrendous, no one does. 399 00:22:52,600 --> 00:22:56,760 Speaker 1: But at that particular point, the Russian stocks will probably 400 00:22:56,760 --> 00:22:59,760 Speaker 1: be re allowed into the index. Once Putin has gone, 401 00:23:00,040 --> 00:23:03,680 Speaker 1: Russian stocks become attractive. Is that a fair state? Well, 402 00:23:03,880 --> 00:23:06,760 Speaker 1: smart money would maybe be snatching them up before that. 403 00:23:06,920 --> 00:23:09,600 Speaker 1: I don't know if they could. You can't get executed, 404 00:23:09,600 --> 00:23:11,399 Speaker 1: and you can't trade in anything, you know what. I 405 00:23:11,640 --> 00:23:13,520 Speaker 1: don't know if you can trade and derivatives to get 406 00:23:13,560 --> 00:23:19,240 Speaker 1: there and do private transactions. But but throughout the entire 407 00:23:19,280 --> 00:23:22,320 Speaker 1: emerging markets, not with the dollars so high, with interest 408 00:23:22,400 --> 00:23:25,760 Speaker 1: rates going up, fear the the debt, I mean you're 409 00:23:25,840 --> 00:23:29,080 Speaker 1: getting what is the average P ten of the emerging 410 00:23:29,119 --> 00:23:32,280 Speaker 1: markets so well, in this high divn is five, but 411 00:23:32,440 --> 00:23:37,560 Speaker 1: in the in the broad in the broad end, so 412 00:23:37,640 --> 00:23:41,480 Speaker 1: pretty reasonable. Don't forget. I mean, up until very recently 413 00:23:41,520 --> 00:23:44,240 Speaker 1: and even today, the GDP growth of those countries is 414 00:23:44,320 --> 00:23:46,480 Speaker 1: higher than the United States in the developed world, I 415 00:23:46,520 --> 00:23:49,960 Speaker 1: mean still several points higher, even with all the problems 416 00:23:50,000 --> 00:23:53,240 Speaker 1: that they have. Not that that always, you know, means 417 00:23:53,240 --> 00:23:55,480 Speaker 1: the difference. We talk a little bit about not not 418 00:23:55,640 --> 00:23:59,280 Speaker 1: paying that much attention to GDP growth, you know, in 419 00:23:59,280 --> 00:24:02,480 Speaker 1: in the book. But um, I also want to say, 420 00:24:02,520 --> 00:24:05,280 Speaker 1: because you you started out on value and growth, and 421 00:24:05,359 --> 00:24:07,560 Speaker 1: we point this out in one of the chapters. But 422 00:24:07,800 --> 00:24:09,640 Speaker 1: a couple of things that come to mind right now. 423 00:24:10,680 --> 00:24:16,480 Speaker 1: We have had these growth spurts of over evaluation through history, 424 00:24:16,720 --> 00:24:19,400 Speaker 1: and it appears, at least in the post World War 425 00:24:19,400 --> 00:24:22,399 Speaker 1: two period had come about every twenty five years. Uh, 426 00:24:22,440 --> 00:24:27,040 Speaker 1: the nifty fifties, which was a period where institutions a 427 00:24:27,119 --> 00:24:31,560 Speaker 1: pension fund spot just growth stocks late sixties, yeah, late 428 00:24:31,600 --> 00:24:36,120 Speaker 1: sixty seventies, no matter what their pe ratio were. I mean, 429 00:24:36,119 --> 00:24:38,680 Speaker 1: they bought such beauties as poloid at ninety times or 430 00:24:38,680 --> 00:24:42,040 Speaker 1: any smith Kodacs, hears in robot and and they paid 431 00:24:42,240 --> 00:24:46,680 Speaker 1: astronomical price. They all collapse later. Some did better, IBM 432 00:24:46,800 --> 00:24:49,120 Speaker 1: was on thes and a few others, but many did not. 433 00:24:49,600 --> 00:24:52,160 Speaker 1: Then twenty five years after that, in two thousand, well 434 00:24:52,200 --> 00:24:55,359 Speaker 1: we all know the dot com burst and then bust. 435 00:24:55,640 --> 00:25:00,760 Speaker 1: Then we had one another, not quite twenty five years, 436 00:25:00,800 --> 00:25:04,720 Speaker 1: but two years. I mean, it seems like I'm not 437 00:25:04,760 --> 00:25:08,920 Speaker 1: gonna say in five or fifty we'll get another one. 438 00:25:09,160 --> 00:25:13,959 Speaker 1: But it seems like there's a cycle where people investors 439 00:25:13,960 --> 00:25:16,920 Speaker 1: get over enthusiastic about a group a group of stocks 440 00:25:16,920 --> 00:25:22,000 Speaker 1: that have been growing fast, and then inevitably overpriced them all. 441 00:25:22,119 --> 00:25:25,959 Speaker 1: I'm gonna take that bet with you. When they're their thirties, 442 00:25:26,000 --> 00:25:28,800 Speaker 1: they're gonna be getting their capital. Well, I'd be very 443 00:25:28,800 --> 00:25:32,240 Speaker 1: thankful to be around there that tell you what I got. 444 00:25:32,280 --> 00:25:34,160 Speaker 1: I got a hundred bucks, says you're wrong, and I'll 445 00:25:34,160 --> 00:25:37,800 Speaker 1: pay you in how about that? So one of the 446 00:25:37,840 --> 00:25:40,560 Speaker 1: things you bring up in this that is so interesting 447 00:25:40,920 --> 00:25:45,280 Speaker 1: is if we have these speculative excesses and they seem 448 00:25:45,359 --> 00:25:49,199 Speaker 1: to come along once a generation or so, is it 449 00:25:49,280 --> 00:25:52,520 Speaker 1: really just a question of the new folks coming through 450 00:25:52,560 --> 00:25:55,720 Speaker 1: the system just haven't read their history, and maybe it's 451 00:25:55,720 --> 00:25:58,920 Speaker 1: a generational thinking. You're right, once it is a generation 452 00:25:59,080 --> 00:26:02,040 Speaker 1: usually considered I need to twenty five years. I've been 453 00:26:02,040 --> 00:26:05,639 Speaker 1: through several so maybe I have more institutional memory or 454 00:26:05,680 --> 00:26:10,879 Speaker 1: whatever of going through what we went through. But in 455 00:26:10,960 --> 00:26:15,639 Speaker 1: the postwar period, we've added these cycles. Um. Now, what 456 00:26:15,920 --> 00:26:24,199 Speaker 1: interestingly enough is that oftentimes the bust brings them to undervaluation. Eventually, 457 00:26:25,160 --> 00:26:29,600 Speaker 1: when I look back at two thousand five, six seven, Yeah, 458 00:26:29,680 --> 00:26:33,320 Speaker 1: those growth stocks that collapse from way too high probably 459 00:26:33,320 --> 00:26:35,080 Speaker 1: were too low. I mean, the growth index and the 460 00:26:35,160 --> 00:26:37,560 Speaker 1: value index ten years ago were almost the same multiple 461 00:26:39,600 --> 00:26:41,920 Speaker 1: they made compressed, and the high dividend stocks had a 462 00:26:42,000 --> 00:26:44,119 Speaker 1: PRATIO higher than the market. There's a lot of people 463 00:26:44,320 --> 00:26:47,800 Speaker 1: writing about that back in that they started selling it 464 00:26:47,840 --> 00:26:50,199 Speaker 1: a premium multiple to the market, which is very obviously 465 00:26:50,240 --> 00:26:53,280 Speaker 1: not the case today. So here's the question about and 466 00:26:53,359 --> 00:26:56,200 Speaker 1: we could talk a little bit about the pandemic. When 467 00:26:56,240 --> 00:26:59,479 Speaker 1: you have an event from outside the market sort of 468 00:26:59,480 --> 00:27:04,359 Speaker 1: feels less like the dot coms and evaluation issue and 469 00:27:04,440 --> 00:27:07,320 Speaker 1: more like the meteor that killed the dinosaurs. It's totally 470 00:27:07,359 --> 00:27:10,000 Speaker 1: outside of the system, right, But a lot of these 471 00:27:10,000 --> 00:27:16,160 Speaker 1: things were building before the pandemic. The pandemic probably accelerated 472 00:27:16,160 --> 00:27:20,480 Speaker 1: because people said, okay, it's technology, you know um and 473 00:27:20,480 --> 00:27:22,440 Speaker 1: and then they fell in love even why not. Now 474 00:27:22,560 --> 00:27:25,280 Speaker 1: there was the Pelotons and the docu signs, I mean 475 00:27:25,359 --> 00:27:27,119 Speaker 1: all the work from home stuff. Yeah, that they were 476 00:27:27,119 --> 00:27:31,360 Speaker 1: the work from home stocks, many of them using technology, 477 00:27:31,520 --> 00:27:34,000 Speaker 1: some of them less than some of them more. That 478 00:27:34,160 --> 00:27:37,600 Speaker 1: really took the boost. But the surge I mean you 479 00:27:37,640 --> 00:27:43,000 Speaker 1: know a Netflix, Facebook, Meta, I mean they took root 480 00:27:43,119 --> 00:27:46,879 Speaker 1: and began soaring before the pandemic, but that seemed to 481 00:27:47,000 --> 00:27:50,320 Speaker 1: accelerated because people said, oh well no, no, no, face 482 00:27:50,359 --> 00:27:52,159 Speaker 1: to face technology is going to be the way of 483 00:27:52,200 --> 00:27:55,320 Speaker 1: the future. And with all the money that was created 484 00:27:55,359 --> 00:27:58,040 Speaker 1: by the Federal Reserve, it just could go right to 485 00:27:58,080 --> 00:28:01,720 Speaker 1: those stocks. And stocks are becoming value stock. I was 486 00:28:01,720 --> 00:28:03,800 Speaker 1: going to say, number them are getting added to value 487 00:28:03,800 --> 00:28:05,560 Speaker 1: indexes that number of them and are earning zick Tex 488 00:28:05,640 --> 00:28:09,240 Speaker 1: are being overweighted. Now Meta as an example, Well, Facebook 489 00:28:09,320 --> 00:28:11,359 Speaker 1: is cut in half. Netflix even though they had a 490 00:28:11,359 --> 00:28:15,040 Speaker 1: good quarter their way off their lows. Peloton got Shelac, 491 00:28:15,200 --> 00:28:20,160 Speaker 1: Docus signed Telehealth. You could go through all these Yeah, 492 00:28:20,200 --> 00:28:22,199 Speaker 1: that's many of them. Talked about them. I mean the 493 00:28:22,280 --> 00:28:27,240 Speaker 1: ones that are really significant like Apple and Microsoft that much. 494 00:28:27,320 --> 00:28:30,080 Speaker 1: They were too high, but they were not They were 495 00:28:30,119 --> 00:28:33,200 Speaker 1: not crazy, you know. And I mean some people consider 496 00:28:33,240 --> 00:28:36,320 Speaker 1: Apple to be the conservative one, um, although you know 497 00:28:36,400 --> 00:28:41,000 Speaker 1: years yeah, I mean, yeah, Warren Buffoot his first real 498 00:28:41,080 --> 00:28:43,720 Speaker 1: tech stock it was was Apple, and he still looks 499 00:28:43,760 --> 00:28:47,239 Speaker 1: at it as a more conservative and they're multiple has 500 00:28:47,320 --> 00:28:51,400 Speaker 1: been all the time, I mean, and it never got 501 00:28:51,520 --> 00:28:55,440 Speaker 1: up to be fifty six seventy. Ever, even at at 502 00:28:55,440 --> 00:28:59,280 Speaker 1: the height of enthusiasm for it, were not quite a 503 00:28:59,360 --> 00:29:03,280 Speaker 1: value played more reasonable Before we digress back to stocks 504 00:29:03,320 --> 00:29:06,600 Speaker 1: for the long run. You recently were on TV where 505 00:29:06,840 --> 00:29:11,520 Speaker 1: you had quite the rant about the FED. And not 506 00:29:11,680 --> 00:29:15,040 Speaker 1: only was it a bit of what is the FED doing? 507 00:29:15,120 --> 00:29:17,640 Speaker 1: They're late, they missed inflation and start, they missed the 508 00:29:17,640 --> 00:29:22,920 Speaker 1: peak of inflation, they're overtightening. It went totally viral, Um. 509 00:29:22,960 --> 00:29:26,760 Speaker 1: I think not just because people agreed with you, but 510 00:29:26,920 --> 00:29:29,959 Speaker 1: you were very passionate, you were very excited about it. 511 00:29:30,280 --> 00:29:32,880 Speaker 1: Tell us a little bit about what led to that 512 00:29:33,080 --> 00:29:35,360 Speaker 1: and what your thoughts are on where we are with 513 00:29:35,400 --> 00:29:38,800 Speaker 1: the federal result by it. You know you I interviewed 514 00:29:38,800 --> 00:29:42,320 Speaker 1: me how many months ago I forgot it was, Yeah, No, 515 00:29:42,400 --> 00:29:45,120 Speaker 1: that was right after the pen and I told you 516 00:29:45,160 --> 00:29:47,840 Speaker 1: that they're gonna be huge amount of inflation. You said, 517 00:29:48,000 --> 00:29:51,280 Speaker 1: you said, both fiscal and monetary. We're gonna cause this, sir. Yeah, 518 00:29:51,360 --> 00:29:54,920 Speaker 1: And um, and I was youlling about it through all 519 00:29:55,720 --> 00:29:57,600 Speaker 1: one And the fact that they didn't begin to pivot 520 00:29:57,680 --> 00:30:00,920 Speaker 1: until the November of one, and he didn't start doing 521 00:30:00,960 --> 00:30:05,880 Speaker 1: anything until I'm still getting excited about this until March 522 00:30:07,880 --> 00:30:13,760 Speaker 1: is unforgivable my opinion. Um, it's gross negligence as the 523 00:30:13,840 --> 00:30:17,800 Speaker 1: steward of our monetary system. And uh that it makes 524 00:30:17,800 --> 00:30:20,320 Speaker 1: me emotional because I've taught this subject for half a 525 00:30:20,360 --> 00:30:24,080 Speaker 1: century and UM, I'm not saying that anyone that's at 526 00:30:24,080 --> 00:30:27,000 Speaker 1: the FED now was a student of mine, but I talked, 527 00:30:27,240 --> 00:30:28,920 Speaker 1: but we would have been better off if they were 528 00:30:29,080 --> 00:30:32,240 Speaker 1: maybe well they I hate to say it, but the 529 00:30:32,280 --> 00:30:35,480 Speaker 1: answer is yes they were. So I had a chance 530 00:30:35,480 --> 00:30:37,719 Speaker 1: that put him as part of the FED, and they 531 00:30:37,720 --> 00:30:40,040 Speaker 1: didn't take them up on that. Well, it's a very 532 00:30:40,080 --> 00:30:44,240 Speaker 1: interesting I mean actually under Bush I was nominated as 533 00:30:44,280 --> 00:30:47,040 Speaker 1: the FED, and then I got we started the process 534 00:30:47,080 --> 00:30:49,280 Speaker 1: and then they got a call and say, um, Jeremy, 535 00:30:49,280 --> 00:30:50,960 Speaker 1: the Democrats gonna hold it up because it's gonna be 536 00:30:51,000 --> 00:30:53,600 Speaker 1: a presidential election. They think they're gonna take over, and 537 00:30:54,080 --> 00:30:56,840 Speaker 1: you know, so let's wait and see what happens. You've 538 00:30:56,880 --> 00:31:00,840 Speaker 1: done more good from your post at war, Yeah, six 539 00:31:00,920 --> 00:31:04,040 Speaker 1: year persons, And you know, it's just it's it often. 540 00:31:04,040 --> 00:31:06,440 Speaker 1: It's like Milton Friedman who refused to take a post 541 00:31:06,480 --> 00:31:09,320 Speaker 1: in Washington. He said, it just compromises you. I'd rather 542 00:31:09,400 --> 00:31:13,920 Speaker 1: be a critic from the outside. And he was from 543 00:31:13,960 --> 00:31:17,520 Speaker 1: the outside and an effective and an effective critic from 544 00:31:17,560 --> 00:31:20,880 Speaker 1: the outside to do that. But so I was yelling 545 00:31:20,880 --> 00:31:24,400 Speaker 1: and screaming. I said, is um J Pow behind the curve? 546 00:31:24,600 --> 00:31:27,680 Speaker 1: I said, he's so far behind the curve? Is he's 547 00:31:27,720 --> 00:31:32,160 Speaker 1: up in the bleachers the pictures throwing the catcher at 548 00:31:32,200 --> 00:31:35,040 Speaker 1: home plate? That's how far behind the Curby was. So. 549 00:31:35,080 --> 00:31:39,160 Speaker 1: The FED has a giant research departments. They have wonderful economists, 550 00:31:39,360 --> 00:31:42,120 Speaker 1: really smart. Well, I don't know how wonderful they are, Barry. 551 00:31:42,120 --> 00:31:46,320 Speaker 1: I'm they're not so wonderful. I don't know. I mean, 552 00:31:46,360 --> 00:31:48,160 Speaker 1: because they were the ones that kept on saying this 553 00:31:48,280 --> 00:31:51,720 Speaker 1: is temporary inflation. They fed that, I'm sure to power 554 00:31:51,800 --> 00:31:55,360 Speaker 1: and the others, and they bought it hook line and sinker. Uh. 555 00:31:55,400 --> 00:31:59,520 Speaker 1: And you know what also upsets me is the FED 556 00:31:59,720 --> 00:32:04,160 Speaker 1: was designed nineteen four. It only has eighteen members of 557 00:32:04,200 --> 00:32:07,239 Speaker 1: the Federal Open Market Committee, and it's supposed to be 558 00:32:07,280 --> 00:32:11,440 Speaker 1: diverse opinions. Uh, there is virtually no diversity opinion. You 559 00:32:11,480 --> 00:32:14,840 Speaker 1: would think that, you know, at least out of those eighteen, 560 00:32:15,360 --> 00:32:18,440 Speaker 1: three or four would say, hey, we're just way over 561 00:32:18,560 --> 00:32:21,240 Speaker 1: stimulating here. We're gonna have trouble if we don't stop. 562 00:32:21,440 --> 00:32:26,640 Speaker 1: Not a word that upsets me too. They're not being constituted. 563 00:32:27,040 --> 00:32:30,040 Speaker 1: It's group think. It's group think that's totally dominating the FED. 564 00:32:30,360 --> 00:32:32,800 Speaker 1: All these things are happening at once, and that's why 565 00:32:32,840 --> 00:32:36,240 Speaker 1: I gazed around. But let's go on. So before before 566 00:32:36,240 --> 00:32:39,200 Speaker 1: you move on from that, I just have to point 567 00:32:39,280 --> 00:32:43,760 Speaker 1: out that this isn't hindsight bias. You were saying this 568 00:32:43,840 --> 00:32:50,040 Speaker 1: in early a year before inflation really started to rear 569 00:32:50,040 --> 00:32:52,840 Speaker 1: its head. You were lots of fiscal stimulus, lots of 570 00:32:52,880 --> 00:32:56,440 Speaker 1: monetary stimulus. Guess what happens? Yeah, and I knew it 571 00:32:56,480 --> 00:32:59,640 Speaker 1: was going to be inflation. And as you know, I said, 572 00:33:00,080 --> 00:33:04,080 Speaker 1: the increase of the money supply in was the greatest 573 00:33:04,280 --> 00:33:07,719 Speaker 1: in history. Um. I mean, we have a chapter in 574 00:33:07,760 --> 00:33:11,880 Speaker 1: the book on COVID I point out the long history. 575 00:33:11,960 --> 00:33:14,720 Speaker 1: I talk a lot about what should have happened, but 576 00:33:14,800 --> 00:33:17,400 Speaker 1: the facts should have done what it did wrong? And 577 00:33:17,440 --> 00:33:22,160 Speaker 1: why what happened happened. Um And I was really in 578 00:33:22,200 --> 00:33:23,960 Speaker 1: a way when I started thinking about the book. This 579 00:33:24,120 --> 00:33:26,239 Speaker 1: was before COVID, so I there was no such thing 580 00:33:26,280 --> 00:33:29,680 Speaker 1: as a COVID chapter. But once COVID hit, I wanted 581 00:33:29,720 --> 00:33:31,880 Speaker 1: to put there's a chapter on the Great Financial Crisis 582 00:33:31,920 --> 00:33:34,000 Speaker 1: now that was put in on the last edition, and 583 00:33:34,040 --> 00:33:35,800 Speaker 1: there had to be a chapter on COVID and the 584 00:33:35,880 --> 00:33:40,680 Speaker 1: monetary response that came from that. So here we are. 585 00:33:40,920 --> 00:33:47,040 Speaker 1: The Federal Reserve is belatedly recognizing inflation. They've they've raised 586 00:33:47,120 --> 00:33:51,960 Speaker 1: rates several times bis at a time. We're now three 587 00:33:51,960 --> 00:33:54,560 Speaker 1: and a quarter on our way, if you believe consensus 588 00:33:54,920 --> 00:33:57,240 Speaker 1: to the November meeting taking us to four to four 589 00:33:57,240 --> 00:34:00,800 Speaker 1: and a quarter or whatever that ranges, and arguable another 590 00:34:00,840 --> 00:34:04,440 Speaker 1: seventy after that, so we'll be at five. So two 591 00:34:04,520 --> 00:34:08,480 Speaker 1: questions and funds So five percent funds rate? What does 592 00:34:08,520 --> 00:34:13,120 Speaker 1: that do to the economy? And are we already sufficiently 593 00:34:13,200 --> 00:34:15,600 Speaker 1: passed peak inflation? Like they say, that's that's the thing. 594 00:34:15,719 --> 00:34:17,920 Speaker 1: They're looking just at the interest rates. They say, well, 595 00:34:17,920 --> 00:34:21,240 Speaker 1: I gotta get interest rates way above inflation. They're failing 596 00:34:21,280 --> 00:34:25,040 Speaker 1: to look at a number of other indicators that show 597 00:34:25,080 --> 00:34:28,080 Speaker 1: how tight they are. Look at the dour starring to 598 00:34:28,200 --> 00:34:31,120 Speaker 1: all time highs. Look at the money supply, and that's 599 00:34:31,160 --> 00:34:34,000 Speaker 1: something that is you know, I've been looking at for 600 00:34:34,080 --> 00:34:39,200 Speaker 1: fifty years, and the money supply has shrunk since March. 601 00:34:39,320 --> 00:34:42,719 Speaker 1: Now that is unpressed, almost unprecedented, mean gone back. I 602 00:34:42,719 --> 00:34:46,520 Speaker 1: think there's only one other episode in the post war 603 00:34:46,600 --> 00:34:49,200 Speaker 1: period where over the next five months we've had the 604 00:34:49,200 --> 00:34:51,839 Speaker 1: money supply. Is that because of the end of quantitative 605 00:34:51,840 --> 00:34:54,440 Speaker 1: easing or there it's more I wanted to know, it's 606 00:34:54,480 --> 00:34:58,400 Speaker 1: actually because the rise of interest rates has slowed down 607 00:34:58,600 --> 00:35:02,439 Speaker 1: credit and it's moved funds out of banks so much 608 00:35:02,480 --> 00:35:06,759 Speaker 1: that the liquidity is actually declining in the system. And 609 00:35:06,800 --> 00:35:09,640 Speaker 1: that that was the first thing that said, whoa you 610 00:35:09,680 --> 00:35:12,480 Speaker 1: know I've written and in fact in the chapter I 611 00:35:12,520 --> 00:35:16,040 Speaker 1: talked about what is consistent with a two percent inflation 612 00:35:16,120 --> 00:35:18,600 Speaker 1: rate is five percent money growth. Now, they grew at 613 00:35:18,600 --> 00:35:22,600 Speaker 1: twenty five percent in twenty and about eighteen percent in 614 00:35:22,680 --> 00:35:25,520 Speaker 1: twenty one, but doesn't mean now you slam on the 615 00:35:25,560 --> 00:35:30,200 Speaker 1: brakes and go to zero, because that could really precipitate 616 00:35:30,239 --> 00:35:32,480 Speaker 1: a recession. I want them to go back to a 617 00:35:32,560 --> 00:35:36,399 Speaker 1: five percent growth. I think that interest ration. By the way, 618 00:35:36,400 --> 00:35:39,400 Speaker 1: there's a whole new chapter on interest rates and stock 619 00:35:39,480 --> 00:35:41,840 Speaker 1: prices and the downward trend of interest rates over the 620 00:35:41,880 --> 00:35:45,919 Speaker 1: last five years. Something we talk about forty years from 621 00:35:46,120 --> 00:35:50,920 Speaker 1: from Vulgar in nineteen forty years. Yes, and and and 622 00:35:51,080 --> 00:35:55,040 Speaker 1: real interest rates. I mean the early part was a 623 00:35:55,080 --> 00:35:59,440 Speaker 1: lot of reduction of inflation. Inflation has remained pretty good. 624 00:36:00,160 --> 00:36:02,799 Speaker 1: It's been a reduction of those real rates. I mean 625 00:36:02,960 --> 00:36:07,759 Speaker 1: tips in the ten year tip was nearly four and 626 00:36:07,800 --> 00:36:10,239 Speaker 1: a half percent. At the beginning of this year was 627 00:36:10,320 --> 00:36:13,279 Speaker 1: minus one. Now it's ratched up to one and a 628 00:36:13,280 --> 00:36:17,480 Speaker 1: half because of the FED tightening. But this long we 629 00:36:17,560 --> 00:36:20,080 Speaker 1: talked about this long decline, but it's caused by a 630 00:36:20,120 --> 00:36:22,160 Speaker 1: lot of people think it's caused only because the FED 631 00:36:22,239 --> 00:36:24,480 Speaker 1: has been easy. That's not true. There's a lot of 632 00:36:24,600 --> 00:36:29,640 Speaker 1: very fundamental reasons that I discussed in that chapter why 633 00:36:29,680 --> 00:36:32,560 Speaker 1: these real interest rates are declining. What that means there's stocks, 634 00:36:32,560 --> 00:36:34,560 Speaker 1: and what that means for the fat and what that 635 00:36:34,600 --> 00:36:37,200 Speaker 1: means for the markets. So let's talk about that, because 636 00:36:37,239 --> 00:36:41,440 Speaker 1: we've previously discussed things like how much more productive we 637 00:36:41,480 --> 00:36:46,080 Speaker 1: are in the impact of globalization and software and technology. 638 00:36:46,160 --> 00:36:48,600 Speaker 1: What does that mean for the long term interest rate? 639 00:36:49,120 --> 00:36:53,680 Speaker 1: Once we get through whatever's going on post COVID with 640 00:36:53,680 --> 00:36:57,320 Speaker 1: with this inflation spike, do you expect us to return 641 00:36:57,400 --> 00:37:02,000 Speaker 1: back to, if not zero, a historically low. This has 642 00:37:02,040 --> 00:37:04,920 Speaker 1: been the biggest surprise of all. I actually thought we 643 00:37:04,960 --> 00:37:07,640 Speaker 1: would have a spurt of technology. I mean, I think 644 00:37:07,800 --> 00:37:10,960 Speaker 1: zoom does replace a lot of things that don't need 645 00:37:11,000 --> 00:37:13,880 Speaker 1: to be face to face and other things, you know, 646 00:37:14,000 --> 00:37:16,040 Speaker 1: docu sign not. I mean, we can go on and on. 647 00:37:16,719 --> 00:37:20,920 Speaker 1: The biggest shock has been that productivity has collapsed. The 648 00:37:21,000 --> 00:37:25,480 Speaker 1: first two quarters of this year has been the slowest 649 00:37:25,600 --> 00:37:30,520 Speaker 1: productivity growth we've had since World War Two, and not 650 00:37:30,760 --> 00:37:35,280 Speaker 1: only by a small amount, by nearly twice as great 651 00:37:35,360 --> 00:37:39,520 Speaker 1: as any other collapse of productivity. And I'm rather upset 652 00:37:39,840 --> 00:37:44,520 Speaker 1: the FED has not addressed this. You know, what does 653 00:37:44,600 --> 00:37:48,240 Speaker 1: this mean for the markets? Are people saying they're working 654 00:37:48,280 --> 00:37:50,440 Speaker 1: at home and not working at home? Did you did 655 00:37:50,480 --> 00:37:55,160 Speaker 1: you see the Liberty Street Economics research paper. So previously 656 00:37:55,440 --> 00:37:58,600 Speaker 1: a lot of data was showing during the pandemic work 657 00:37:58,640 --> 00:38:02,120 Speaker 1: from home. People weren't commuting, they were working longer hours 658 00:38:02,160 --> 00:38:06,160 Speaker 1: they were they had substituted their commute for more work time. 659 00:38:06,840 --> 00:38:10,920 Speaker 1: This recent paper at Liberty Street Economics Blog, which is 660 00:38:10,960 --> 00:38:14,960 Speaker 1: the New York Fed research blog, said, Oh, it turns 661 00:38:14,960 --> 00:38:18,439 Speaker 1: out that people have adjusted to work from home, and 662 00:38:18,600 --> 00:38:21,200 Speaker 1: they're not only are they not working more hours, they're 663 00:38:21,239 --> 00:38:24,400 Speaker 1: working less hours. They're spending more time with the family, 664 00:38:24,480 --> 00:38:28,880 Speaker 1: and they're actually sleeping more, which is unprecedented. Fort But 665 00:38:28,960 --> 00:38:31,600 Speaker 1: are they putting out what they need to put out? 666 00:38:31,880 --> 00:38:35,239 Speaker 1: Profits are still doing well. So the profits are are 667 00:38:35,280 --> 00:38:39,439 Speaker 1: still doing well, but real wages aren't doing probably because 668 00:38:39,719 --> 00:38:42,080 Speaker 1: don't forget a lot of people have been locked into 669 00:38:42,080 --> 00:38:45,680 Speaker 1: a lower real wage situation. Don't forget a lot of 670 00:38:45,840 --> 00:38:48,680 Speaker 1: firms that locked in their dead two percent too and 671 00:38:48,680 --> 00:38:52,120 Speaker 1: a half and three. I mean, this is golden for them. 672 00:38:52,360 --> 00:38:54,880 Speaker 1: They've been raising prices, their debt prices are there saying 673 00:38:55,120 --> 00:38:57,800 Speaker 1: they're only now are they're beginning to get the pressure 674 00:38:57,840 --> 00:39:01,400 Speaker 1: on the employee prices. They've got a lot of left ridge. Uh. 675 00:39:01,440 --> 00:39:05,360 Speaker 1: So profits are are doing okay. Although profits in the 676 00:39:05,440 --> 00:39:08,040 Speaker 1: first half of this year we're pretty sluggish. But we 677 00:39:08,080 --> 00:39:11,040 Speaker 1: had negative GDP growth. Um, you know, I keep on 678 00:39:11,160 --> 00:39:14,800 Speaker 1: going on and asking, how did we have four million 679 00:39:14,880 --> 00:39:19,880 Speaker 1: new people hired in the payroll reports this year and 680 00:39:20,000 --> 00:39:23,640 Speaker 1: have negative GDP grow well, negative real GDP but in 681 00:39:23,640 --> 00:39:26,799 Speaker 1: in nominal terms. Yeah, but negative real right, I mean 682 00:39:26,800 --> 00:39:31,160 Speaker 1: you're more more, more hours. I mean, we've got four 683 00:39:31,239 --> 00:39:34,799 Speaker 1: million new workers that are producing less real goods. So 684 00:39:35,120 --> 00:39:39,240 Speaker 1: that's telling us the negative numbers the role inflation driven. Yeah, 685 00:39:39,280 --> 00:39:43,920 Speaker 1: but why are firms hiring? What are these people doing? 686 00:39:45,160 --> 00:39:49,320 Speaker 1: I mean, I'm arguably they're they're the real numbers strip 687 00:39:49,360 --> 00:39:53,680 Speaker 1: away inflation. It's so we're producing less goods now with 688 00:39:53,800 --> 00:39:59,000 Speaker 1: four million people than we did in December. Is that right? 689 00:39:59,080 --> 00:40:02,160 Speaker 1: Because when I we look at consumer spending, no, real 690 00:40:02,400 --> 00:40:05,680 Speaker 1: real GDP is lower. Not now, We're gonna get g 691 00:40:05,760 --> 00:40:07,600 Speaker 1: d P at the end of this quarter for which 692 00:40:07,680 --> 00:40:09,840 Speaker 1: is likely to be positive. Yes, so two percent, but 693 00:40:09,880 --> 00:40:14,319 Speaker 1: we were negative first two. So we're basically unchanged four million. Yeah, 694 00:40:14,360 --> 00:40:18,600 Speaker 1: I mean, man, maybe slightly digat four million new workers 695 00:40:18,640 --> 00:40:21,640 Speaker 1: the same number of goods. So Care's Act one was 696 00:40:21,680 --> 00:40:24,880 Speaker 1: two trillion dollars, the second Cares Act was another trillion, 697 00:40:25,280 --> 00:40:27,960 Speaker 1: The third one that one under Biden, the first two 698 00:40:27,960 --> 00:40:31,640 Speaker 1: one the Trump was another trillion. You give can give 699 00:40:31,680 --> 00:40:34,719 Speaker 1: Americans four to five trillion dollars. We're gonna go out 700 00:40:34,719 --> 00:40:37,560 Speaker 1: and spend it. Well, they did, and that produces the inflation. 701 00:40:37,880 --> 00:40:41,840 Speaker 1: And the game measures GDP measures the amount of goods 702 00:40:41,880 --> 00:40:46,000 Speaker 1: that are produced, so it has always been linked with 703 00:40:46,080 --> 00:40:49,800 Speaker 1: the amount of labor because labor is the three quarters 704 00:40:49,880 --> 00:40:53,640 Speaker 1: of the value of input. We hired four million more, 705 00:40:53,680 --> 00:40:56,759 Speaker 1: we have the same capital as before, four million more, 706 00:40:56,960 --> 00:40:59,279 Speaker 1: and the only thing that we then record is a 707 00:40:59,400 --> 00:41:02,359 Speaker 1: drop of activity. We've hired four million more, but they're 708 00:41:02,400 --> 00:41:05,440 Speaker 1: just not working. So how much of this is just 709 00:41:05,520 --> 00:41:07,759 Speaker 1: the velocity of the money moving through the system are 710 00:41:07,800 --> 00:41:12,080 Speaker 1: we seeing We're seeing faster money or slower money with 711 00:41:12,160 --> 00:41:16,640 Speaker 1: all this fiscal stimulus? You know, is the montage whom 712 00:41:16,719 --> 00:41:20,280 Speaker 1: is responsible for the inflation. GDP strips out the inflation 713 00:41:20,320 --> 00:41:23,359 Speaker 1: and says, how much goods are you producing? Why are 714 00:41:23,360 --> 00:41:26,279 Speaker 1: we producing less goods with four million more people only 715 00:41:26,320 --> 00:41:29,080 Speaker 1: because people are not working as hard. It is not 716 00:41:29,200 --> 00:41:32,880 Speaker 1: as productive. Now we could get a bounce back of productivity. 717 00:41:32,880 --> 00:41:35,520 Speaker 1: And if we get a bounce back, Wow, that will 718 00:41:35,560 --> 00:41:38,799 Speaker 1: put downward pressure on prices because what will replenish the 719 00:41:38,880 --> 00:41:42,640 Speaker 1: supply chain? Uh, And that will put downward pressure on prices. 720 00:41:42,719 --> 00:41:44,720 Speaker 1: If we get a bounce back. It's it's very interesting 721 00:41:44,719 --> 00:41:46,919 Speaker 1: to see like this question of what are these workers doing? 722 00:41:47,080 --> 00:41:50,080 Speaker 1: When we posted that question on our podcast to Don Cone, 723 00:41:50,160 --> 00:41:53,319 Speaker 1: the former FED vice chair, and Don that maybe we're 724 00:41:53,920 --> 00:41:59,359 Speaker 1: under counting GDP. Well, future revisions revised GDP higher. Isn't 725 00:41:59,400 --> 00:42:02,799 Speaker 1: it affair him to say our measurement of productivity has 726 00:42:02,840 --> 00:42:07,319 Speaker 1: always been terrible. We wildly undercount productivity. And what's the 727 00:42:07,320 --> 00:42:11,359 Speaker 1: old joke the computer advantages are everywhere but the productivity. Yeah, 728 00:42:11,400 --> 00:42:14,600 Speaker 1: well it was it was actually Robert Solo who who 729 00:42:14,640 --> 00:42:18,200 Speaker 1: said I might see computers everywhere except in the productivity statistic. 730 00:42:18,320 --> 00:42:20,200 Speaker 1: That was his quote. But I want to follow up 731 00:42:20,200 --> 00:42:23,560 Speaker 1: on what Jeremy was saying because we did interview Don Commune. 732 00:42:23,560 --> 00:42:25,680 Speaker 1: He said, oh, I expect him to the revision. Well, 733 00:42:25,719 --> 00:42:28,440 Speaker 1: believe it or not, we did get the revision and 734 00:42:28,480 --> 00:42:33,640 Speaker 1: it didn't change. So what does that We did get 735 00:42:33,680 --> 00:42:36,320 Speaker 1: that a revision, and believe it or not, it actually 736 00:42:36,360 --> 00:42:39,240 Speaker 1: moved one measure of GDP, which is called gross national 737 00:42:39,239 --> 00:42:41,960 Speaker 1: income right and going down to product another way of 738 00:42:41,960 --> 00:42:45,600 Speaker 1: measuring it down. So it did not at all eliminate 739 00:42:45,800 --> 00:42:50,400 Speaker 1: the puzzle of why was this productivity collapse in the 740 00:42:50,400 --> 00:42:53,560 Speaker 1: first half. So again we might get a bounce back. 741 00:42:53,640 --> 00:42:56,600 Speaker 1: Let's hope it is. Because the standard of living depends 742 00:42:56,640 --> 00:43:01,080 Speaker 1: on productivity. Productivity is the measure of standard of living. 743 00:43:01,080 --> 00:43:04,279 Speaker 1: It's output per unit our work. So it's like your 744 00:43:04,400 --> 00:43:08,799 Speaker 1: real wage drip away from inflation, and um, you know, 745 00:43:09,080 --> 00:43:13,720 Speaker 1: real wages are down, productivity is down. What is going on? 746 00:43:14,320 --> 00:43:19,920 Speaker 1: I've positive this question to a number of economists, fed researchers, 747 00:43:19,960 --> 00:43:25,880 Speaker 1: and others because I have consistently said, I feel like myself, 748 00:43:25,960 --> 00:43:29,400 Speaker 1: my firm has just gotten more and more productive. We 749 00:43:29,480 --> 00:43:33,160 Speaker 1: put out more and more output with the same we're 750 00:43:33,239 --> 00:43:38,319 Speaker 1: marginally more people. And the pushback was, you're in a 751 00:43:38,440 --> 00:43:42,880 Speaker 1: white collar content and creative business that you get to 752 00:43:42,920 --> 00:43:46,919 Speaker 1: take full advantage of every new tech innovation. Most of 753 00:43:47,120 --> 00:43:51,839 Speaker 1: the non white collar jobs don't have that same You've 754 00:43:51,840 --> 00:43:53,560 Speaker 1: got to go to the bus and drive. You can't 755 00:43:53,600 --> 00:43:56,680 Speaker 1: do that remotely not Yeah, and there's no productivity gains 756 00:43:56,680 --> 00:43:59,840 Speaker 1: taking place with that. What about industry our industry not 757 00:44:00,160 --> 00:44:02,480 Speaker 1: manufacturing that Well, they're both. I mean we you know, 758 00:44:02,560 --> 00:44:07,080 Speaker 1: we've always divided new machines that do things faster and better, 759 00:44:07,120 --> 00:44:09,680 Speaker 1: I mean, go through you know what it is, and 760 00:44:09,719 --> 00:44:13,040 Speaker 1: that has been productivity. In fact, productivity and the goods 761 00:44:13,080 --> 00:44:16,720 Speaker 1: producing sector historically has been much better than the service 762 00:44:17,000 --> 00:44:19,960 Speaker 1: because the services, are you ever going to be more productive? Really, 763 00:44:20,000 --> 00:44:23,120 Speaker 1: like you know, a haircut and the barbershop, I mean 764 00:44:23,239 --> 00:44:25,840 Speaker 1: it takes what it does, or that they say the orchestra. 765 00:44:26,800 --> 00:44:30,279 Speaker 1: There's no productivity in the orchestra. You know, back to 766 00:44:30,320 --> 00:44:35,680 Speaker 1: the barbershop once since the pandemic, although there's creaking up everywhere, 767 00:44:35,719 --> 00:44:41,960 Speaker 1: these fancy barbershops haircut So here's like you could use 768 00:44:41,960 --> 00:44:45,360 Speaker 1: a flow by, right. But but here's the real question 769 00:44:45,440 --> 00:44:50,759 Speaker 1: is have we been mismeasuring productivity or do we genuinely 770 00:44:50,800 --> 00:44:54,799 Speaker 1: have a problem with slackers and people working from high 771 00:44:55,400 --> 00:45:00,399 Speaker 1: Like yeah, I think economists, I mean, this is very 772 00:45:00,400 --> 00:45:02,440 Speaker 1: new data. Don't forget the first two quarters was a 773 00:45:02,560 --> 00:45:05,560 Speaker 1: shocking drop. We're gonna see the third quarter looks like 774 00:45:05,719 --> 00:45:10,720 Speaker 1: mediocre productivity at past two percent GDP growth, maybe zero protein. 775 00:45:10,800 --> 00:45:12,600 Speaker 1: It's not going to be as bad as it. But 776 00:45:12,719 --> 00:45:14,719 Speaker 1: I think as we collect more data, it's going to 777 00:45:14,840 --> 00:45:17,919 Speaker 1: be a major topic, and I think in three will 778 00:45:17,960 --> 00:45:20,839 Speaker 1: have a better handle on this situation. I've just been 779 00:45:20,880 --> 00:45:24,960 Speaker 1: a little bit surprised that the FED, etcetera. Has not 780 00:45:25,160 --> 00:45:28,640 Speaker 1: been trying to address this, because how has it become 781 00:45:28,719 --> 00:45:33,440 Speaker 1: so vigorous on pressing monetary policy when what is really 782 00:45:33,480 --> 00:45:36,800 Speaker 1: happening in the real economy. I want to just mention 783 00:45:37,080 --> 00:45:41,040 Speaker 1: and ask you about some of just the key points 784 00:45:41,239 --> 00:45:44,400 Speaker 1: within the book that through all these editions have not changed, 785 00:45:44,400 --> 00:45:48,480 Speaker 1: they have been consistent. Starting with what is the long 786 00:45:48,600 --> 00:45:52,600 Speaker 1: run return for stocks, both the nominal and real inflation 787 00:45:52,640 --> 00:45:55,960 Speaker 1: adjusted terms. Well, I mean that was the first edition 788 00:45:56,080 --> 00:46:00,720 Speaker 1: data through from de biding in nineteenth century six point 789 00:46:00,800 --> 00:46:06,160 Speaker 1: seven percent. That's real real dividend to return six point 790 00:46:06,200 --> 00:46:11,480 Speaker 1: seven percent stocks compound annual. You add thirty years, and 791 00:46:11,520 --> 00:46:14,319 Speaker 1: we went through to June of this year to make 792 00:46:14,360 --> 00:46:18,520 Speaker 1: sure we got the recession in six point seven percent 793 00:46:19,040 --> 00:46:23,719 Speaker 1: changed the same exchange. Given everything that's happened in thirty years, 794 00:46:23,719 --> 00:46:27,520 Speaker 1: the financial crisis, the COVID crisis, the dot com boom, 795 00:46:27,840 --> 00:46:31,479 Speaker 1: uh yeah, and bust, I mean, through all of that, 796 00:46:32,200 --> 00:46:35,520 Speaker 1: the real returns remain the same. And bonds were about 797 00:46:35,600 --> 00:46:38,640 Speaker 1: half the lawns were half, but are much less now. 798 00:46:38,800 --> 00:46:43,480 Speaker 1: I mean the real returns on well, when bonds interest 799 00:46:43,560 --> 00:46:46,400 Speaker 1: rates peaked in two thousand, it was a great twenty 800 00:46:46,440 --> 00:46:51,040 Speaker 1: thirty year period for bonds, and I remember saying on 801 00:46:51,360 --> 00:46:56,239 Speaker 1: all the networks that the forty year bowl market, because 802 00:46:56,280 --> 00:47:02,200 Speaker 1: it started the peak Throe was over and all that's 803 00:47:02,280 --> 00:47:04,319 Speaker 1: over with a vengeance, even more of a vengeance than 804 00:47:04,360 --> 00:47:07,000 Speaker 1: I thought it was gonna be over with with a vengeance. 805 00:47:07,520 --> 00:47:10,120 Speaker 1: And the real return on bond has been absolutely terrible, 806 00:47:10,160 --> 00:47:13,120 Speaker 1: as we know, on a comparative basis, even worse than 807 00:47:13,200 --> 00:47:18,439 Speaker 1: stocks since it actually um not since the bullmarket ended, 808 00:47:18,520 --> 00:47:21,279 Speaker 1: but at that point, but from the low point in 809 00:47:22,160 --> 00:47:25,000 Speaker 1: so I said something at an event where um I 810 00:47:25,080 --> 00:47:27,520 Speaker 1: had sent to a group of young people, Hey, if 811 00:47:27,560 --> 00:47:30,279 Speaker 1: you're in your twenties, thirties, forties, you really don't need 812 00:47:30,440 --> 00:47:33,880 Speaker 1: bonds in your portfolio. You have such a long horizon 813 00:47:34,000 --> 00:47:37,000 Speaker 1: you don't need that ballast. You go even further than 814 00:47:37,080 --> 00:47:41,040 Speaker 1: that and say most portfolios could be fine if they're 815 00:47:41,040 --> 00:47:44,359 Speaker 1: equity only. Yeah, I mean, you know what we show. 816 00:47:44,600 --> 00:47:47,160 Speaker 1: I mean, and that's hasn't changed over thirty year periods. 817 00:47:47,360 --> 00:47:52,120 Speaker 1: In real terms after inflation, stocks are less valuable than bonds. 818 00:47:52,680 --> 00:47:56,440 Speaker 1: That's wild. So now you have the tenuere four percent 819 00:47:56,600 --> 00:47:58,640 Speaker 1: or so depending on when this broke out, At what 820 00:47:58,880 --> 00:48:02,600 Speaker 1: points are we with Tina there is no alternative two stocks? 821 00:48:03,200 --> 00:48:05,880 Speaker 1: At what point do bonds get cheap enough where they 822 00:48:05,880 --> 00:48:09,200 Speaker 1: start to look attractive. Well, a lot of people, it's interesting, 823 00:48:09,239 --> 00:48:11,720 Speaker 1: are talking today and they say, look at four percent, 824 00:48:11,800 --> 00:48:14,040 Speaker 1: I can lock that in for well even two years 825 00:48:14,120 --> 00:48:17,319 Speaker 1: to a four half. I said, yes, you can lock 826 00:48:17,440 --> 00:48:19,200 Speaker 1: that in. But you know after two years, I mean 827 00:48:19,239 --> 00:48:22,239 Speaker 1: the stock park is gonna be higher than is Really 828 00:48:22,480 --> 00:48:26,080 Speaker 1: that's a bold move from me. Holding let me just 829 00:48:26,120 --> 00:48:27,720 Speaker 1: see if I could buy some out of the money 830 00:48:27,840 --> 00:48:33,200 Speaker 1: call off the street. It has to be two years. 831 00:48:33,320 --> 00:48:36,040 Speaker 1: You can get out years. And by the way, when 832 00:48:36,080 --> 00:48:37,839 Speaker 1: people tell me four and a half percent is good, 833 00:48:37,920 --> 00:48:42,440 Speaker 1: it certainly is good. Zero zero, But let me ask you. 834 00:48:43,120 --> 00:48:49,320 Speaker 1: That's before inflation, and when the long run on stocks 835 00:48:49,560 --> 00:48:54,600 Speaker 1: is six after inflation, tell me how you're gonna be 836 00:48:54,760 --> 00:48:58,279 Speaker 1: better off in the long run. It sounds like you're not. 837 00:48:58,360 --> 00:49:01,360 Speaker 1: You should write a book about that's right. So the 838 00:49:01,520 --> 00:49:04,120 Speaker 1: one question I always forget to ask, and I wrote 839 00:49:04,160 --> 00:49:06,640 Speaker 1: it down, so I'm not going to forget to ask. 840 00:49:07,440 --> 00:49:11,279 Speaker 1: Is gold? Yeah, tell me your thoughts on the long 841 00:49:11,400 --> 00:49:15,840 Speaker 1: run on gold is less than one percent above inflation, 842 00:49:16,040 --> 00:49:20,560 Speaker 1: so it's basically an inflation hedge long run. Now, what's 843 00:49:20,600 --> 00:49:24,640 Speaker 1: happened with gold? It hasn't as it is failed so 844 00:49:24,800 --> 00:49:26,960 Speaker 1: to speak, as an inflation hedge. I mean, does that 845 00:49:27,040 --> 00:49:30,040 Speaker 1: surprise you? You would have thought two should have been 846 00:49:30,040 --> 00:49:33,080 Speaker 1: the year gold exploded. But I think the big difference 847 00:49:34,160 --> 00:49:36,839 Speaker 1: is I mean, I think that in the early part 848 00:49:36,920 --> 00:49:41,320 Speaker 1: of this inflation, bitcoined usurped the role of gold, millennial 849 00:49:41,600 --> 00:49:45,800 Speaker 1: digital gold, digital millennial gold. They wanted to go to that, 850 00:49:46,080 --> 00:49:48,879 Speaker 1: and it was sold as an inflation hedge. And that's 851 00:49:48,880 --> 00:49:52,319 Speaker 1: another thing that made it go up too high. Um 852 00:49:52,760 --> 00:49:55,719 Speaker 1: you know what bitcoin, bitcoin, But bitcoin ran up when 853 00:49:55,760 --> 00:49:59,080 Speaker 1: inflation was under two, right, yeah, But that was the 854 00:49:59,160 --> 00:50:01,719 Speaker 1: innovation and all the rest, and then it was being 855 00:50:01,840 --> 00:50:04,960 Speaker 1: sold as the inflation hed because the truth is there 856 00:50:05,080 --> 00:50:06,759 Speaker 1: is going to be a limited number of bitcoins, is 857 00:50:06,840 --> 00:50:09,040 Speaker 1: not a limited number of dours. So there was some 858 00:50:09,280 --> 00:50:13,000 Speaker 1: logic to that. Now it shouldn't go up as much 859 00:50:13,040 --> 00:50:15,560 Speaker 1: as it did, But the logic was it is the 860 00:50:15,680 --> 00:50:20,240 Speaker 1: new inflation hedge, the bitcoin it serves as the gold. 861 00:50:20,760 --> 00:50:24,160 Speaker 1: Where in in nineteen seventy eight, seventy nine and eighty 862 00:50:24,239 --> 00:50:27,719 Speaker 1: people rushed to god there was no bitcoin. People, now 863 00:50:27,880 --> 00:50:31,080 Speaker 1: we're rushing to bitcoin and the younger people don't care 864 00:50:31,120 --> 00:50:34,719 Speaker 1: about gold. Um uh. And it wasn't driving them, and 865 00:50:34,960 --> 00:50:37,840 Speaker 1: we need to do a disclosure on this because my 866 00:50:38,080 --> 00:50:41,000 Speaker 1: firm and your firm, Wisdom Tree and Retals Wealth Management 867 00:50:41,360 --> 00:50:44,960 Speaker 1: worked together on the tell us Jeremy, give us the 868 00:50:45,040 --> 00:50:48,640 Speaker 1: full an r w M Wisdom Tree Crypto Index or 869 00:50:48,719 --> 00:50:54,520 Speaker 1: the basket of we bogalized crypto which he would size 870 00:50:54,760 --> 00:50:58,360 Speaker 1: anything more diverse fight exposure than just bitcoin or so 871 00:50:58,640 --> 00:51:01,759 Speaker 1: so full disclosure that's out there. But you're gonna say 872 00:51:01,800 --> 00:51:04,360 Speaker 1: something about bitcoin, I wouldn't say something about gold. Also, 873 00:51:04,719 --> 00:51:07,400 Speaker 1: I think golden dollar terms has been a big failure. 874 00:51:07,560 --> 00:51:10,080 Speaker 1: Golden end terms has been great. Golden euros are now. 875 00:51:10,360 --> 00:51:13,120 Speaker 1: I hate that argument. You know why because people always 876 00:51:13,160 --> 00:51:15,600 Speaker 1: tell me you should have gone back in time and 877 00:51:15,719 --> 00:51:18,719 Speaker 1: bought golden fill in the blank two years ago. Well, 878 00:51:18,920 --> 00:51:21,759 Speaker 1: nobody said that back then. It's easy to look after 879 00:51:21,840 --> 00:51:24,520 Speaker 1: the fact. Isn't that just a currency beat? Well, the 880 00:51:24,600 --> 00:51:26,320 Speaker 1: point is our team does a lot of work on 881 00:51:26,360 --> 00:51:28,800 Speaker 1: gold because we're big commodity players in Europe and we 882 00:51:28,920 --> 00:51:33,160 Speaker 1: have some modeling on what drives gold prices and certainly 883 00:51:33,360 --> 00:51:35,879 Speaker 1: negative interest rates. Like you know, gold had this cost 884 00:51:35,960 --> 00:51:38,560 Speaker 1: of carrier, had to compete with bonds. Then you had 885 00:51:38,560 --> 00:51:40,800 Speaker 1: all this negative interest rate debt in Europe, and that 886 00:51:40,960 --> 00:51:44,280 Speaker 1: was obviously a positive carry versus negative rate that went away. 887 00:51:44,520 --> 00:51:46,360 Speaker 1: That was one of the things drives. So real rates 888 00:51:46,760 --> 00:51:48,880 Speaker 1: was a big factor in gold. So the fact that 889 00:51:49,360 --> 00:51:51,520 Speaker 1: real rates went up two or fifty basis points, that's 890 00:51:51,560 --> 00:51:54,799 Speaker 1: a big headwind to gold. The dollar surging, big head 891 00:51:55,080 --> 00:51:59,000 Speaker 1: head So in other words, it's not just inflation, it's 892 00:51:59,040 --> 00:52:03,439 Speaker 1: inflation this rates, real rates being from negative point, moving 893 00:52:03,480 --> 00:52:06,480 Speaker 1: real rates, you could say, wow, gold is really doing 894 00:52:06,600 --> 00:52:11,279 Speaker 1: much better then then stocks and bonds. I mean it is, well, 895 00:52:11,320 --> 00:52:13,960 Speaker 1: it's only down nine percent this year, but not what 896 00:52:14,080 --> 00:52:17,080 Speaker 1: I would have expected given and the moving real rates. 897 00:52:17,200 --> 00:52:20,719 Speaker 1: It's actually it's surprisingly doing even better than that, giving 898 00:52:20,880 --> 00:52:23,440 Speaker 1: for the modeling. Yeah. Yeah, And we talk about inflation, 899 00:52:23,520 --> 00:52:27,200 Speaker 1: and I do want to get this in out inflation 900 00:52:27,239 --> 00:52:29,080 Speaker 1: because it's part of what we were talking about in 901 00:52:29,160 --> 00:52:33,000 Speaker 1: earlier about the rant on being too tight. I have 902 00:52:33,200 --> 00:52:36,320 Speaker 1: maintained and now there's finely papers and talk about this 903 00:52:37,160 --> 00:52:41,480 Speaker 1: that the inflation data that we're getting today, particularly core inflation, 904 00:52:41,800 --> 00:52:46,480 Speaker 1: is over overestimated and inflated. And so to speak, on 905 00:52:46,600 --> 00:52:50,360 Speaker 1: the services side versus the good side of owners and 906 00:52:50,520 --> 00:52:54,280 Speaker 1: equivalent rent is probably not owners equivalent rent and housing 907 00:52:54,360 --> 00:52:56,920 Speaker 1: costs and rental and even not owners equivalent, just the 908 00:52:57,000 --> 00:53:01,600 Speaker 1: rental part of that. We basically, because of the way 909 00:53:01,680 --> 00:53:05,200 Speaker 1: the Bureau Labor Statistics computes it, it's very lagged in 910 00:53:05,320 --> 00:53:10,239 Speaker 1: housing prices. So we didn't record enough inflation for the 911 00:53:10,400 --> 00:53:14,920 Speaker 1: last two years, and now we're overgoing to overrecord inflation 912 00:53:15,080 --> 00:53:18,600 Speaker 1: and are today in the next couple of years. Something 913 00:53:18,880 --> 00:53:22,960 Speaker 1: very similar had happened heading into the financial crisis, like 914 00:53:23,120 --> 00:53:26,640 Speaker 1: oh four, oh five, oh six BLS was behind on 915 00:53:26,760 --> 00:53:30,800 Speaker 1: the inflation reporting because it was embedded in housing, and 916 00:53:30,880 --> 00:53:34,839 Speaker 1: then once people flipped from buying to renting, suddenly they 917 00:53:34,960 --> 00:53:37,960 Speaker 1: overshone on the other way, which raises an interesting question. 918 00:53:38,360 --> 00:53:41,600 Speaker 1: If the FOMC is raising their rates, which is helping 919 00:53:41,680 --> 00:53:45,200 Speaker 1: to drive mortgage rates higher, which is sending all these 920 00:53:45,320 --> 00:53:50,760 Speaker 1: people to rent, is the Fed indirectly making inflation higher? 921 00:53:51,440 --> 00:53:54,799 Speaker 1: First of all, they are responsible for the inflation. They 922 00:53:55,200 --> 00:53:58,360 Speaker 1: are responsible for the fact that the case Shower housing 923 00:53:58,400 --> 00:54:03,040 Speaker 1: indicts from the month of the pandemic through the spring 924 00:54:03,200 --> 00:54:07,040 Speaker 1: of this year was up forty percent. That's a big number, 925 00:54:07,120 --> 00:54:10,800 Speaker 1: isn't it. Yes, for now that's off the pandemic lows, 926 00:54:10,880 --> 00:54:14,000 Speaker 1: or is that this is from March and then it 927 00:54:14,080 --> 00:54:17,040 Speaker 1: went down a bit during the pandemic. So but I'm 928 00:54:17,080 --> 00:54:20,480 Speaker 1: taking it from March before the pandemic brought it down. 929 00:54:22,560 --> 00:54:27,239 Speaker 1: National housing index, rental indexes, and this is before the 930 00:54:27,320 --> 00:54:32,759 Speaker 1: FED tightened. We're up thirty percent. What is the core 931 00:54:33,160 --> 00:54:40,359 Speaker 1: BLS never Yes, the government's inflation housing index is up 932 00:54:40,440 --> 00:54:45,120 Speaker 1: like eleven or twelve percent, So they're way behind. And 933 00:54:45,280 --> 00:54:49,439 Speaker 1: they're still showing an accelerating while the real housing press 934 00:54:49,480 --> 00:54:53,040 Speaker 1: are going down. Now even with the limited inventory, prices 935 00:54:53,080 --> 00:54:58,680 Speaker 1: are gown over, their discounts are are people are now 936 00:54:58,800 --> 00:55:01,840 Speaker 1: really worried if they have to sell? So the question 937 00:55:02,040 --> 00:55:04,720 Speaker 1: is is the FIT aware of the fact how behind 938 00:55:04,800 --> 00:55:10,160 Speaker 1: the curve their housing data is? I hope. So they're 939 00:55:10,200 --> 00:55:13,840 Speaker 1: writing some papers on it, but they reflect these department 940 00:55:13,880 --> 00:55:17,400 Speaker 1: in the FOMC don't seem to communicate. I mean, I hope, so, 941 00:55:17,640 --> 00:55:20,520 Speaker 1: I mean, you know, but and then second, if they 942 00:55:20,880 --> 00:55:24,360 Speaker 1: are aware of this, at what point do they should 943 00:55:24,400 --> 00:55:26,160 Speaker 1: be pivoting? And now we're at what point do they 944 00:55:26,200 --> 00:55:29,640 Speaker 1: declare victory and say should be saying I say, maybe 945 00:55:29,680 --> 00:55:33,920 Speaker 1: do another fifty but they won't November and then stop 946 00:55:34,320 --> 00:55:39,160 Speaker 1: and see what happens. Um now Boward is talking about 947 00:55:40,480 --> 00:55:44,160 Speaker 1: and waiting. I think that's too aggressive and we'll accelerate 948 00:55:44,239 --> 00:55:47,560 Speaker 1: the downside too much. That's my position. I think a 949 00:55:47,640 --> 00:55:49,439 Speaker 1: lot of people agree with you, and I think that's 950 00:55:49,520 --> 00:55:52,000 Speaker 1: part of the reason. If you live in the real 951 00:55:52,120 --> 00:55:54,960 Speaker 1: world and you look at copper, you look at lumber, 952 00:55:55,000 --> 00:55:57,879 Speaker 1: you look at gasoline prices, what do we have nine 953 00:55:58,440 --> 00:56:02,280 Speaker 1: consecutive days of falling gas prices and gases now below 954 00:56:02,320 --> 00:56:05,040 Speaker 1: where it was a decade ago. I think a lot 955 00:56:05,080 --> 00:56:07,600 Speaker 1: of people agree with you. The fetch of declare victory 956 00:56:07,600 --> 00:56:10,280 Speaker 1: and go home. Well, you know you're always on alert, 957 00:56:10,440 --> 00:56:14,320 Speaker 1: but pause. And you know what surprising me bury is 958 00:56:14,400 --> 00:56:17,600 Speaker 1: that you know they exploded the money supply in twenty 959 00:56:17,680 --> 00:56:24,279 Speaker 1: When did we start really seeing inflation? And now all 960 00:56:24,320 --> 00:56:27,600 Speaker 1: of a sudden, we're we only are six months into 961 00:56:27,680 --> 00:56:30,600 Speaker 1: this signing cycle. And there said, oh my god, I'm 962 00:56:30,640 --> 00:56:33,880 Speaker 1: not seeing the results. Iiwana what tighten time? Well, it 963 00:56:34,000 --> 00:56:36,680 Speaker 1: doesn't happen in six months, and in fact you are 964 00:56:36,800 --> 00:56:40,920 Speaker 1: seeing if you're goods, good prices are way down and 965 00:56:41,080 --> 00:56:44,200 Speaker 1: service prices take even longer. So this idea, oh my god, 966 00:56:44,239 --> 00:56:47,080 Speaker 1: it's not working, it's not working. We gotta keep on hiking, 967 00:56:47,480 --> 00:56:51,560 Speaker 1: is to me. I'm flabber gassed. I mean, it's it's 968 00:56:51,640 --> 00:56:53,960 Speaker 1: totally different from what they were just saying on the 969 00:56:54,040 --> 00:56:56,520 Speaker 1: other side when inflation was building, and they say, oh, 970 00:56:56,600 --> 00:56:59,920 Speaker 1: we don't see any inflation despite the fact of floating 971 00:57:00,120 --> 00:57:05,239 Speaker 1: credit and and uh easy money policies that we petitioning 972 00:57:05,320 --> 00:57:09,400 Speaker 1: Siegal for the FED or just j Pal have have 973 00:57:09,520 --> 00:57:12,440 Speaker 1: Professor Siegel show up, and I would be happy to 974 00:57:12,560 --> 00:57:16,120 Speaker 1: debate him. No, no, no, not. I want to send 975 00:57:16,240 --> 00:57:19,360 Speaker 1: you to the FED and you school them. Hey, here's 976 00:57:19,400 --> 00:57:21,840 Speaker 1: what you guys seem to have forgotten. Since I wish 977 00:57:21,960 --> 00:57:25,000 Speaker 1: there were another voice there, and I'm doing my best 978 00:57:25,320 --> 00:57:28,520 Speaker 1: to bring some voices there. If it isn't me, maybe 979 00:57:28,560 --> 00:57:31,160 Speaker 1: I can convince some of the FED governors or presidents 980 00:57:31,720 --> 00:57:35,400 Speaker 1: bring that argument to FED governors. I'm not a FED watcher. 981 00:57:35,480 --> 00:57:38,120 Speaker 1: I don't feel the need to hang on every speech 982 00:57:38,160 --> 00:57:41,720 Speaker 1: on everything. But the two FED governors that seemed to 983 00:57:41,920 --> 00:57:45,240 Speaker 1: be closest to making that pivot, the one you just 984 00:57:45,360 --> 00:57:50,160 Speaker 1: mentioned earlier, and then Lyle Brainerd also seems to be saying, well, 985 00:57:50,360 --> 00:57:54,680 Speaker 1: you know, we're beginning to make some noises, but most 986 00:57:54,760 --> 00:57:59,520 Speaker 1: of them are saying we're gonna be tough through car Yeah, 987 00:57:59,600 --> 00:58:03,840 Speaker 1: I mean crazy. Yeah, I mean to keep at these 988 00:58:04,080 --> 00:58:11,320 Speaker 1: rates three will cause the second worst collapse of the 989 00:58:11,440 --> 00:58:14,120 Speaker 1: housing market in the post war period. I actually think 990 00:58:14,160 --> 00:58:16,640 Speaker 1: housing prices from their peak are going to go down 991 00:58:16,720 --> 00:58:19,680 Speaker 1: ten to still leaves them up. Remember they were at 992 00:58:20,600 --> 00:58:24,600 Speaker 1: But if they continue this up higher, you know it, Uh, 993 00:58:25,000 --> 00:58:26,720 Speaker 1: it's going to get even worse. And it's not just 994 00:58:26,840 --> 00:58:29,560 Speaker 1: how far they fall, but it's how long If they're 995 00:58:29,600 --> 00:58:32,680 Speaker 1: down ten percent and there's no improvement over five or 996 00:58:32,720 --> 00:58:36,160 Speaker 1: ten years on on a real basis, to go down 997 00:58:36,440 --> 00:58:40,400 Speaker 1: and uh, you know, it'll crimp the housing industry, which 998 00:58:40,480 --> 00:58:43,840 Speaker 1: is one of the most important industries. And you can 999 00:58:43,880 --> 00:58:47,040 Speaker 1: see that in the auto industry, and the loan situations 1000 00:58:47,080 --> 00:58:49,200 Speaker 1: are going to get very hard to get alone on 1001 00:58:49,440 --> 00:58:52,800 Speaker 1: on that credit cards. In general, we haven't seen it 1002 00:58:52,840 --> 00:58:55,760 Speaker 1: in the real statistics, not yet, so are you how 1003 00:58:55,840 --> 00:58:58,640 Speaker 1: saying it in some of the statistics. The housing statistics 1004 00:58:58,680 --> 00:59:02,160 Speaker 1: are absolutely terror right. I just showed in the middle 1005 00:59:02,200 --> 00:59:06,520 Speaker 1: of October the prospective homebuyers traffic is almost as bad 1006 00:59:07,120 --> 00:59:11,040 Speaker 1: as the worstern Art Association of home Buyers and is 1007 00:59:11,080 --> 00:59:13,680 Speaker 1: one of the biggest collapses we've ever seen. Yeah, it's 1008 00:59:13,680 --> 00:59:15,440 Speaker 1: almost as bad as the middle of the pandemic, the 1009 00:59:15,520 --> 00:59:18,920 Speaker 1: early parts of the pandemic. So I I hate asking 1010 00:59:19,040 --> 00:59:21,720 Speaker 1: the recession question, but I feel I have to ask you. 1011 00:59:23,000 --> 00:59:26,840 Speaker 1: Do you feel that if the Fed continues on this path, 1012 00:59:27,440 --> 00:59:32,360 Speaker 1: we will find ourselves into recession? And how bad potentially 1013 00:59:32,480 --> 00:59:35,000 Speaker 1: could it get? Well, it could. The longer they continue 1014 00:59:35,000 --> 00:59:37,560 Speaker 1: on this payoff the way keep on hiking or stay 1015 00:59:37,600 --> 00:59:41,360 Speaker 1: We're gonna stay high for longer, I think the recession 1016 00:59:41,440 --> 00:59:44,040 Speaker 1: becomes a real possibility. I still think they have a 1017 00:59:44,160 --> 00:59:47,560 Speaker 1: chance to avoid one, but the right now and we 1018 00:59:47,640 --> 00:59:50,640 Speaker 1: avoid or or or or you know, if they just 1019 00:59:50,760 --> 00:59:53,480 Speaker 1: put a ceiling for the market and saying we're seeing 1020 00:59:53,640 --> 00:59:58,240 Speaker 1: progress and we can soon begin to pause, you know, 1021 00:59:58,800 --> 01:00:00,600 Speaker 1: that is what the market it is looking at. What 1022 01:00:00,640 --> 01:00:03,120 Speaker 1: the market is so scared about is there seems to 1023 01:00:03,200 --> 01:00:05,200 Speaker 1: be no limit to their talk. Hi kai kai kai, 1024 01:00:05,840 --> 01:00:07,880 Speaker 1: Because if they're gonna wait for that core rate to 1025 01:00:07,960 --> 01:00:10,920 Speaker 1: go down to two percent a year, given the distortion 1026 01:00:11,000 --> 01:00:13,600 Speaker 1: of statistics, we are in for big trush. So you 1027 01:00:13,720 --> 01:00:17,760 Speaker 1: raise a really interesting point there, which is some people 1028 01:00:17,960 --> 01:00:22,720 Speaker 1: believe that Jerome pal thinks markets are too high and 1029 01:00:22,840 --> 01:00:25,200 Speaker 1: he won't be happy until he sees markets TA can 1030 01:00:25,520 --> 01:00:27,600 Speaker 1: talk about that. I mean, what do you think about that. 1031 01:00:28,960 --> 01:00:31,520 Speaker 1: He's like the anti green span, and well, you know 1032 01:00:32,000 --> 01:00:34,760 Speaker 1: used talk about green Span. Put if there's disruption in 1033 01:00:34,840 --> 01:00:39,400 Speaker 1: the market, which I don't expect, um, then you know 1034 01:00:40,040 --> 01:00:42,640 Speaker 1: he will step in. I mean that's what the central 1035 01:00:42,680 --> 01:00:46,520 Speaker 1: bank really disruption of the market. Something really bad happens, 1036 01:00:46,560 --> 01:00:48,800 Speaker 1: and he wills having But if the market goes down 1037 01:00:48,840 --> 01:00:51,800 Speaker 1: another ten percent, because how you're not coming in, And 1038 01:00:51,880 --> 01:00:54,440 Speaker 1: if the market goes down another ten percent, I suspect 1039 01:00:54,760 --> 01:00:58,000 Speaker 1: you're a buyer. I'm definitely a buyer. Well, I'll tell you, 1040 01:00:58,280 --> 01:01:01,720 Speaker 1: when the Fed pivots look at you, you'll see a 1041 01:01:01,880 --> 01:01:06,160 Speaker 1: thousand point you're saying this because we were just talking 1042 01:01:06,200 --> 01:01:10,120 Speaker 1: about this. It feels like the risks are very asymmetric. 1043 01:01:10,520 --> 01:01:13,040 Speaker 1: That the Fed could overtighten, that we can miss earnings, 1044 01:01:13,080 --> 01:01:15,400 Speaker 1: that we could have a recession, and we could grind 1045 01:01:15,680 --> 01:01:19,720 Speaker 1: five tent lower. But heaven forbid the war in the 1046 01:01:19,880 --> 01:01:23,880 Speaker 1: Ukraine ends, we get some decent earnings, or the FED says, okay, 1047 01:01:23,960 --> 01:01:26,320 Speaker 1: we you know, we see a five hand weight, we 1048 01:01:26,400 --> 01:01:29,480 Speaker 1: can do one more and wait, um, look out, look 1049 01:01:29,520 --> 01:01:32,160 Speaker 1: out above, look out above. As I say, I think 1050 01:01:32,200 --> 01:01:35,080 Speaker 1: stocks are quite undervalued, not that they've been the most 1051 01:01:35,200 --> 01:01:39,160 Speaker 1: undervalued by history. Obviously we have had worse, but I 1052 01:01:39,240 --> 01:01:42,280 Speaker 1: would say in the if you buy stocks in a 1053 01:01:42,360 --> 01:01:44,680 Speaker 1: couple of years, you're going to be very happy. Today's 1054 01:01:44,680 --> 01:01:47,320 Speaker 1: special edition of Masters and Business is brought to you 1055 01:01:47,840 --> 01:01:52,960 Speaker 1: by confirmation bias Barries. Confirmation bias what this show is 1056 01:01:53,000 --> 01:01:57,160 Speaker 1: all about. You're you're just talking my game. Everything you're 1057 01:01:57,200 --> 01:02:00,240 Speaker 1: saying is what I want to hear. And oh, I 1058 01:02:00,360 --> 01:02:04,120 Speaker 1: feel like I have no objectivity and I'm just like 1059 01:02:04,240 --> 01:02:07,640 Speaker 1: ready to stand up and start waving a flag. Jeremy 1060 01:02:07,680 --> 01:02:11,240 Speaker 1: Schwartz tell tell us why the professor is wrong. Well, 1061 01:02:11,520 --> 01:02:14,920 Speaker 1: I mean it's interesting. Twent percent valued even with the 1062 01:02:15,080 --> 01:02:17,080 Speaker 1: fear that the fag keeps doing what they're doing. And 1063 01:02:17,560 --> 01:02:19,960 Speaker 1: we talk about the S and P at sixteen and 1064 01:02:19,960 --> 01:02:22,800 Speaker 1: a half times earnings items pretty reasonable. Yet some of 1065 01:02:22,840 --> 01:02:25,320 Speaker 1: these international marks we're talking about the emerging markets at 1066 01:02:25,400 --> 01:02:28,480 Speaker 1: single digit ps, but even broad developed markets get at 1067 01:02:28,560 --> 01:02:31,479 Speaker 1: half the valuation of the US too. Europe has looked 1068 01:02:31,560 --> 01:02:33,960 Speaker 1: terrible for a long time. Europe is telling a ten right, 1069 01:02:34,320 --> 01:02:36,560 Speaker 1: and and yes, with a fundamental screen, it's gonna have 1070 01:02:37,040 --> 01:02:39,720 Speaker 1: even lower number even I mean that's unbelievable. I mean, 1071 01:02:40,720 --> 01:02:42,880 Speaker 1: you know, aren't on a fundamental screen. If you do 1072 01:02:42,960 --> 01:02:46,200 Speaker 1: fundament we waited and we just tilting under value divator. Yeah, 1073 01:02:46,200 --> 01:02:48,800 Speaker 1: you can get very low. So the pushback to that is, well, 1074 01:02:48,920 --> 01:02:52,000 Speaker 1: Europe is a mess and the Russian gas and the 1075 01:02:52,080 --> 01:02:55,400 Speaker 1: threat of war. US small caps at nine to ten 1076 01:02:55,520 --> 01:02:58,760 Speaker 1: times earnings, and we have three different small cap btfs 1077 01:02:59,680 --> 01:03:02,560 Speaker 1: David and based earnings based all of them are nine 1078 01:03:02,600 --> 01:03:05,480 Speaker 1: to ten times earnings. That small cap discount. Well, cap 1079 01:03:05,880 --> 01:03:08,480 Speaker 1: value is as cheap as we've seen a long time. Right, 1080 01:03:08,600 --> 01:03:10,800 Speaker 1: small caps generally have been cheap relative to large caps. 1081 01:03:10,840 --> 01:03:13,680 Speaker 1: You're at sort of the bottom that you know, bottom 1082 01:03:13,760 --> 01:03:16,840 Speaker 1: few percent in the last thirty years. And and Fords 1083 01:03:16,880 --> 01:03:19,760 Speaker 1: have been very good from these levels because I mean, 1084 01:03:19,800 --> 01:03:21,560 Speaker 1: you can't get worse. But if you're looking out at 1085 01:03:21,680 --> 01:03:25,160 Speaker 1: five years or ten years, so when you when you 1086 01:03:25,240 --> 01:03:28,600 Speaker 1: get these prices and dividing yields and earnings deals so high, 1087 01:03:28,720 --> 01:03:31,800 Speaker 1: you don't even need much appreciation to get great returns 1088 01:03:31,920 --> 01:03:39,240 Speaker 1: because earnings real is a real yield prices and even 1089 01:03:39,280 --> 01:03:41,560 Speaker 1: if ten years from now they're ten you're getting ten 1090 01:03:41,640 --> 01:03:44,880 Speaker 1: percent after inflation in the meeting, it's amazing. So I mean, 1091 01:03:45,680 --> 01:03:47,520 Speaker 1: you know, you don't even need them to move up 1092 01:03:47,560 --> 01:03:52,360 Speaker 1: on evaluation if you hold on to stuff that. So 1093 01:03:53,040 --> 01:03:55,080 Speaker 1: before I get some of my favorite questions, I gotta 1094 01:03:55,120 --> 01:03:59,040 Speaker 1: ask one last question about the book. So you know, 1095 01:03:59,280 --> 01:04:01,960 Speaker 1: hundreds of thou and a half a million copies of 1096 01:04:02,040 --> 01:04:05,480 Speaker 1: this have sold. It's the sixth edition. We now have 1097 01:04:05,600 --> 01:04:10,160 Speaker 1: a with with Jeremy Schwartz. Are we gonna continue to 1098 01:04:10,240 --> 01:04:14,440 Speaker 1: see future updates every what? What has this been updated times? 1099 01:04:14,480 --> 01:04:17,400 Speaker 1: Over thirty years? Six times? So it's not every five 1100 01:04:17,520 --> 01:04:19,960 Speaker 1: years though, I mean this was the longest period I 1101 01:04:20,000 --> 01:04:22,600 Speaker 1: said eight or nine years. I think his wife thinks 1102 01:04:22,640 --> 01:04:25,960 Speaker 1: this is his last she is she looking for you 1103 01:04:26,080 --> 01:04:28,480 Speaker 1: to kick back and slow down a little bit, Slow 1104 01:04:28,560 --> 01:04:32,360 Speaker 1: down a little bit. Why do I sense going to happen? 1105 01:04:33,200 --> 01:04:36,760 Speaker 1: Are we passing the torches? The next edition going to 1106 01:04:36,800 --> 01:04:39,240 Speaker 1: be Jeremy Schwartz with Jeremy Season? Is that what's going 1107 01:04:39,280 --> 01:04:42,560 Speaker 1: to That's a possibility. We actually have not had any 1108 01:04:42,640 --> 01:04:47,080 Speaker 1: formal discussion. Um, we don't need one right now. But 1109 01:04:47,240 --> 01:04:49,400 Speaker 1: Stocks for the long run is gonna be here for 1110 01:04:49,560 --> 01:04:51,600 Speaker 1: the long run. This is going to continue. I think 1111 01:04:51,640 --> 01:04:54,680 Speaker 1: it's going to continue. Stocks for the long run for 1112 01:04:54,840 --> 01:04:57,400 Speaker 1: the long run. Is that is that? It? So? Let 1113 01:04:57,440 --> 01:05:00,920 Speaker 1: me just try and touch so some of my favorite 1114 01:05:01,040 --> 01:05:03,760 Speaker 1: questions that I ask all my guests, but I'm going 1115 01:05:03,800 --> 01:05:05,959 Speaker 1: to ask them to you both at the same time 1116 01:05:06,320 --> 01:05:09,520 Speaker 1: because I want to see how that works, having never 1117 01:05:09,640 --> 01:05:14,440 Speaker 1: done this before, out of curiosity. During the lockdown, when 1118 01:05:14,480 --> 01:05:18,000 Speaker 1: you weren't ranting about the FED, what were you guys doing? 1119 01:05:18,120 --> 01:05:21,080 Speaker 1: What were you watching? What was keeping you busy? What 1120 01:05:21,200 --> 01:05:25,240 Speaker 1: were you streaming on Netflix or Amazon? Wow? What were 1121 01:05:25,360 --> 01:05:30,000 Speaker 1: we doing? Yeah? I mean we began obviously watching a 1122 01:05:30,120 --> 01:05:34,120 Speaker 1: lot more than I did before. Right, you know, I 1123 01:05:34,280 --> 01:05:39,120 Speaker 1: love The Crown. I loved um Succession, but are not 1124 01:05:39,760 --> 01:05:42,320 Speaker 1: People say, do you really watched The yellow Stone? I said, yeah, 1125 01:05:42,520 --> 01:05:45,400 Speaker 1: I know people who love Yellows. I love it. It's 1126 01:05:45,520 --> 01:05:50,520 Speaker 1: it's like the Western version of Succession. What were you doing? 1127 01:05:50,640 --> 01:05:53,360 Speaker 1: I'm gonna say, like, I'm not that good with pop culture? 1128 01:05:53,680 --> 01:05:56,160 Speaker 1: You have girls? Three girls? Right? I have two girls, 1129 01:05:56,200 --> 01:05:59,360 Speaker 1: two girls. Um, I would say I'm one who took 1130 01:05:59,520 --> 01:06:02,880 Speaker 1: the work. I was working more from home. My podcast 1131 01:06:02,920 --> 01:06:06,120 Speaker 1: consumption went way down, actually, which is was That's one 1132 01:06:06,160 --> 01:06:08,640 Speaker 1: of the things I missed because I did it all 1133 01:06:08,760 --> 01:06:11,360 Speaker 1: on the plane in the commute. It's funny you say 1134 01:06:11,440 --> 01:06:14,240 Speaker 1: that because I watched our numbers go up and I 1135 01:06:14,480 --> 01:06:16,840 Speaker 1: was the opposite what I was expecting, because on the 1136 01:06:16,920 --> 01:06:19,000 Speaker 1: train is when I listen to podcasts, and so I 1137 01:06:19,200 --> 01:06:22,280 Speaker 1: my my personal went down a lot. But as we 1138 01:06:22,320 --> 01:06:24,400 Speaker 1: start geting back into it, I'm getting back. What did 1139 01:06:24,400 --> 01:06:27,960 Speaker 1: you watch with the girls? I honestly, they do their 1140 01:06:28,000 --> 01:06:30,120 Speaker 1: own thing. My my seven year olds on YouTube, like 1141 01:06:30,280 --> 01:06:32,600 Speaker 1: you can't get her off YouTube. My ten year old 1142 01:06:32,920 --> 01:06:35,000 Speaker 1: is less on all that. So they're on their own 1143 01:06:35,160 --> 01:06:38,720 Speaker 1: little devices. And when one thing we did, we kind 1144 01:06:38,760 --> 01:06:40,840 Speaker 1: of formed. You know, we stayed away from each other 1145 01:06:41,040 --> 01:06:44,520 Speaker 1: from March until a Memorial Day, and then we decided 1146 01:06:44,520 --> 01:06:48,320 Speaker 1: to listen. We formed a pod of the family and 1147 01:06:49,440 --> 01:06:53,120 Speaker 1: and we started spending a lot of time together, um, 1148 01:06:54,040 --> 01:06:57,440 Speaker 1: go outdoors and and we said, you know, believe it 1149 01:06:57,560 --> 01:07:01,720 Speaker 1: or not, I've been in four international trips then too 1150 01:07:02,080 --> 01:07:07,240 Speaker 1: to family trips abroad. Um since then, so uh, you 1151 01:07:07,360 --> 01:07:10,160 Speaker 1: know we've Yeah, I mean a lot of people are surprised, 1152 01:07:10,200 --> 01:07:13,800 Speaker 1: but we decided, hey, you know, we're all pretty healthy, 1153 01:07:14,120 --> 01:07:17,960 Speaker 1: and you know, you know, we all got vaccinated, and 1154 01:07:18,240 --> 01:07:20,360 Speaker 1: you know we're gonna get it. It's gonna be mild 1155 01:07:20,480 --> 01:07:23,200 Speaker 1: and hopeful. Who knows how many years you have left 1156 01:07:23,600 --> 01:07:27,320 Speaker 1: advantage of right, you can't you can't hide. You cannot 1157 01:07:27,400 --> 01:07:31,200 Speaker 1: forever because there's dangerous everywhere everywhere. And he does go 1158 01:07:31,320 --> 01:07:34,680 Speaker 1: out and travel even way more than I do. But 1159 01:07:34,840 --> 01:07:36,280 Speaker 1: the I mean the work from home. I guess the 1160 01:07:36,320 --> 01:07:37,560 Speaker 1: other thing that we did, I mean I got to 1161 01:07:37,960 --> 01:07:39,800 Speaker 1: be more involved with the girls, like I was able 1162 01:07:39,840 --> 01:07:43,240 Speaker 1: to coach my ten year olds basketball team. We did 1163 01:07:43,320 --> 01:07:46,120 Speaker 1: it in No Kid Hungry, or Michael uh and and 1164 01:07:46,480 --> 01:07:49,080 Speaker 1: and Ben did their n f T for No Kid Hungry. 1165 01:07:49,480 --> 01:07:51,959 Speaker 1: We've all come around. That organization raised a lot of money. 1166 01:07:52,000 --> 01:07:54,680 Speaker 1: That was our team raised the most of our basketball 1167 01:07:54,800 --> 01:07:56,320 Speaker 1: league as well. If we got to go play in 1168 01:07:56,360 --> 01:08:02,320 Speaker 1: the Sixers court because our team for in the Forum, well, 1169 01:08:02,880 --> 01:08:07,720 Speaker 1: well what is it called these days? To me, it's 1170 01:08:07,760 --> 01:08:13,400 Speaker 1: the Philadelphia Forum. But that's old spectrum spectrum, that's right. Um. 1171 01:08:13,880 --> 01:08:17,360 Speaker 1: So normally I asked this question right here, which is 1172 01:08:17,800 --> 01:08:20,559 Speaker 1: who were your mentors? But I this is the first 1173 01:08:20,640 --> 01:08:24,879 Speaker 1: time I've actually asked somebody that question with their mentor. 1174 01:08:25,520 --> 01:08:29,200 Speaker 1: So I'm gonna flip the question on Professor Siegal and say, 1175 01:08:29,720 --> 01:08:33,599 Speaker 1: tell us about some of your mentees and who helped 1176 01:08:33,680 --> 01:08:39,120 Speaker 1: shape your career. Well, clearly I would mention Professor Milton 1177 01:08:39,160 --> 01:08:44,280 Speaker 1: Freedman at the University's card, and I also mentioned Professor 1178 01:08:44,360 --> 01:08:46,919 Speaker 1: Paul Samuelson from m I T where I got my PhD. 1179 01:08:47,960 --> 01:08:50,719 Speaker 1: And I yeah, I mean I regarded those as probably 1180 01:08:50,760 --> 01:08:52,519 Speaker 1: the two. I mean, I was honored to be able 1181 01:08:52,560 --> 01:08:55,320 Speaker 1: to be able to be so close to them, and 1182 01:08:55,600 --> 01:08:59,120 Speaker 1: Protestor Samuelson was on my thesis committee. Professor Freedman was 1183 01:08:59,160 --> 01:09:01,439 Speaker 1: a colleague of mine My first four years of teaching, 1184 01:09:01,520 --> 01:09:04,840 Speaker 1: was his last four years before he retired. We became 1185 01:09:04,920 --> 01:09:07,960 Speaker 1: very close friends. I saw him a lot after he retired. 1186 01:09:08,000 --> 01:09:10,439 Speaker 1: He lived in San Francisco, whenever my wife and I 1187 01:09:10,560 --> 01:09:14,920 Speaker 1: went there. Uh, they've really made a tremendous difference. That's 1188 01:09:14,960 --> 01:09:17,960 Speaker 1: some combination. And then I always feel like I have 1189 01:09:18,080 --> 01:09:20,360 Speaker 1: to bring this up when I speak with you, is 1190 01:09:20,479 --> 01:09:23,920 Speaker 1: that you and Professor Schiller are buddies, and you guys 1191 01:09:24,000 --> 01:09:29,120 Speaker 1: socialized and out together. It's amazing. Is tomorrow I'm going 1192 01:09:29,560 --> 01:09:32,280 Speaker 1: to the Poconos and Bob Shiller and his wife Jenny 1193 01:09:32,360 --> 01:09:33,840 Speaker 1: are going to go down there. We used to do 1194 01:09:33,960 --> 01:09:37,679 Speaker 1: that every summer. This is the first time in probably 1195 01:09:38,760 --> 01:09:42,519 Speaker 1: thirty years that we're going to be spending the weekend together. 1196 01:09:42,640 --> 01:09:45,759 Speaker 1: We've we've been friends for fifty five years. It's fifty 1197 01:09:45,840 --> 01:09:49,120 Speaker 1: five years. Five years. I met him as a first 1198 01:09:49,200 --> 01:09:53,519 Speaker 1: year graduate student nineteen sixty seven at M I T 1199 01:09:54,120 --> 01:09:55,960 Speaker 1: I've got a story about their vacation. That's a pretty 1200 01:09:55,960 --> 01:09:58,080 Speaker 1: good one. Go ahead. Let's say the first year I'm 1201 01:09:58,120 --> 01:10:01,200 Speaker 1: working for the professors the summer of a and the 1202 01:10:01,280 --> 01:10:03,960 Speaker 1: New York Times was coming to do a profile of 1203 01:10:04,040 --> 01:10:08,559 Speaker 1: the two professors, and it was a great cover. David Leonheard, 1204 01:10:08,640 --> 01:10:11,320 Speaker 1: I think, was the author. And I just started dating 1205 01:10:11,360 --> 01:10:13,799 Speaker 1: my now wife, Bonnie, and she had in her class 1206 01:10:13,840 --> 01:10:17,160 Speaker 1: in economics, she had to write a contrast irrational exuberance 1207 01:10:17,200 --> 01:10:19,519 Speaker 1: with stocks for the long run. She had to take 1208 01:10:19,640 --> 01:10:22,479 Speaker 1: off to go to a barbecue with them, and we, 1209 01:10:22,720 --> 01:10:25,280 Speaker 1: uh the professor could come and uh so anyway, she 1210 01:10:25,520 --> 01:10:27,200 Speaker 1: she got to go to the barbecue with them in 1211 01:10:27,240 --> 01:10:29,560 Speaker 1: the Ocean City. They're doing it at Ocean City to 1212 01:10:29,720 --> 01:10:31,479 Speaker 1: rent a place all the time. We now own it 1213 01:10:31,560 --> 01:10:33,880 Speaker 1: to short but you know, near Ocean City, but at 1214 01:10:33,920 --> 01:10:36,280 Speaker 1: that time we rented and he came over to spend 1215 01:10:36,320 --> 01:10:39,800 Speaker 1: the weekend and and um, you mentioned my poker playing. 1216 01:10:39,880 --> 01:10:41,680 Speaker 1: But she actually in her paper she got an A 1217 01:10:41,720 --> 01:10:44,800 Speaker 1: plus on the paper. I would hope she I hope 1218 01:10:44,800 --> 01:10:48,040 Speaker 1: there's a photo everybody to get there's a contrast of 1219 01:10:48,800 --> 01:10:51,720 Speaker 1: We actually went to Atlantic City and Bob didn't want 1220 01:10:51,720 --> 01:10:55,439 Speaker 1: to play blackjack, and the professor was playing cards, and 1221 01:10:55,560 --> 01:11:01,120 Speaker 1: she used that as an analogy of the risk christ conversion. Oh, 1222 01:11:01,240 --> 01:11:05,679 Speaker 1: come on, Bob, you know, let's let's let's play. Yeah, 1223 01:11:05,720 --> 01:11:08,160 Speaker 1: he's very much It's just the difference in the psychology 1224 01:11:08,240 --> 01:11:10,960 Speaker 1: is very much more risk converse. So it's funny, love 1225 01:11:11,200 --> 01:11:13,799 Speaker 1: we we we have so much in common. We get together. 1226 01:11:14,040 --> 01:11:17,120 Speaker 1: We just talked about so many issues. So when I 1227 01:11:17,280 --> 01:11:20,080 Speaker 1: had Bob here for the show and he had his 1228 01:11:20,240 --> 01:11:24,760 Speaker 1: next appointment was a speaking event across town, it was 1229 01:11:24,880 --> 01:11:28,080 Speaker 1: the same direction I was heading. So I'm thinking, well, 1230 01:11:28,320 --> 01:11:30,240 Speaker 1: here's Bob Schiller. I'm not going to stick him in 1231 01:11:30,280 --> 01:11:33,080 Speaker 1: the subway to go downtown. Hey, listen, we'll get a 1232 01:11:33,160 --> 01:11:34,920 Speaker 1: car and I'll have a car take you to your 1233 01:11:34,960 --> 01:11:39,960 Speaker 1: next event. So we were getting this, you know, a cab, 1234 01:11:40,720 --> 01:11:42,960 Speaker 1: and he puts on his seat belt in the back seat, 1235 01:11:43,320 --> 01:11:47,080 Speaker 1: and I'm like, well, Bob Schiller, hang on a seat belt. 1236 01:11:47,800 --> 01:11:49,920 Speaker 1: Maybe he's done the math. Maybe I should be wearing 1237 01:11:49,920 --> 01:11:52,439 Speaker 1: a seat belt in the back of the car. And uh, 1238 01:11:52,720 --> 01:11:56,040 Speaker 1: he's very queeous. I remember when I love heights. And 1239 01:11:56,080 --> 01:11:57,720 Speaker 1: I remember once it was a bridge and it was 1240 01:11:57,760 --> 01:12:00,920 Speaker 1: alleged that you could walk on it was wide enough, 1241 01:12:01,400 --> 01:12:03,519 Speaker 1: and he said, Jeremy, don't go up there, and said, oh, 1242 01:12:03,640 --> 01:12:07,439 Speaker 1: top hob and I walked across. And now he's you know, 1243 01:12:07,640 --> 01:12:09,760 Speaker 1: he was. He was so scared of doing that. He said, oh, 1244 01:12:09,880 --> 01:12:13,160 Speaker 1: you might trip, you might fall, you might fall un 1245 01:12:13,920 --> 01:12:16,040 Speaker 1: And you guys still spend that much time with each 1246 01:12:16,040 --> 01:12:19,320 Speaker 1: other on a regular basis. We just love each other. Um. Alright, 1247 01:12:19,360 --> 01:12:22,760 Speaker 1: So down to my last couple of questions. Let's talk 1248 01:12:22,800 --> 01:12:25,160 Speaker 1: about books. What are you reading now and what are 1249 01:12:25,200 --> 01:12:31,439 Speaker 1: some of your favorites. This has really dominated so much 1250 01:12:31,800 --> 01:12:35,800 Speaker 1: of what I've done and recently. And there is one 1251 01:12:35,880 --> 01:12:38,040 Speaker 1: book that I have read recently, and I'm sorry that 1252 01:12:38,880 --> 01:12:41,720 Speaker 1: it's really quite interesting because it has nothing to do 1253 01:12:41,880 --> 01:12:46,599 Speaker 1: with finance. Russ stuff Out's book from the Times. From 1254 01:12:46,640 --> 01:12:50,840 Speaker 1: the Times, and he wrote about his journey into a 1255 01:12:51,280 --> 01:12:56,160 Speaker 1: severe lime disease situation. And you know, I've had some 1256 01:12:56,280 --> 01:13:00,720 Speaker 1: medical issues myself in the past, and I was fascinating 1257 01:13:00,800 --> 01:13:04,400 Speaker 1: how he dealt with it and how the medical establishment 1258 01:13:04,479 --> 01:13:07,679 Speaker 1: felt with it. And he had written several articles about 1259 01:13:07,760 --> 01:13:11,959 Speaker 1: how that affected his feelings about medicine and the government 1260 01:13:12,080 --> 01:13:15,559 Speaker 1: and all the rest the deep places, deep places, you've 1261 01:13:15,640 --> 01:13:18,400 Speaker 1: got it. That's very interesting, and so I it's a 1262 01:13:18,520 --> 01:13:22,439 Speaker 1: fast read. He moves to Connecticut because it's something he 1263 01:13:22,600 --> 01:13:25,479 Speaker 1: loved all the time, and within like two weeks he 1264 01:13:25,640 --> 01:13:28,000 Speaker 1: gets it and no one can cure it, and it 1265 01:13:28,080 --> 01:13:31,000 Speaker 1: gets worse, and he goes to all these extremes and 1266 01:13:31,120 --> 01:13:34,280 Speaker 1: what he learns and thinks about. I thought it was 1267 01:13:34,320 --> 01:13:37,400 Speaker 1: a fascinating book, and it was, you know, I tried 1268 01:13:37,439 --> 01:13:40,240 Speaker 1: to read a couple of things that aren't just economics, 1269 01:13:40,840 --> 01:13:43,160 Speaker 1: but that was that was. There was one other book, 1270 01:13:43,200 --> 01:13:45,320 Speaker 1: but I can't think of that one either, But I'll 1271 01:13:45,400 --> 01:13:47,120 Speaker 1: say like it's a sort of a similar story to 1272 01:13:47,240 --> 01:13:50,240 Speaker 1: my podcasting. I used to do more audible because I 1273 01:13:50,400 --> 01:13:53,040 Speaker 1: got into podcasting and that was how so I actually 1274 01:13:53,080 --> 01:13:55,559 Speaker 1: have twelve audible credits to my point on it. It's 1275 01:13:55,560 --> 01:13:56,960 Speaker 1: been a while since I've been doing a lot. But 1276 01:13:57,040 --> 01:14:00,960 Speaker 1: the last one I read was Hot Commodities from Jim Rogers, 1277 01:14:01,040 --> 01:14:04,320 Speaker 1: which people I remember he wrote investment Biker didn't and 1278 01:14:04,520 --> 01:14:09,559 Speaker 1: I remember reading that of many people, commodities were coming 1279 01:14:09,640 --> 01:14:12,439 Speaker 1: back for the first time in fifteen years. His book 1280 01:14:12,520 --> 01:14:15,400 Speaker 1: was about fifteen years early. But like everything he was 1281 01:14:15,439 --> 01:14:19,040 Speaker 1: talking about, it's coming together more today. There's another very 1282 01:14:19,120 --> 01:14:22,400 Speaker 1: interest I like history, in particular story about the war. 1283 01:14:23,000 --> 01:14:28,439 Speaker 1: And yes, the book was entitled The Newspaper X and 1284 01:14:28,520 --> 01:14:31,719 Speaker 1: it had to do with both in the United States 1285 01:14:32,040 --> 01:14:38,040 Speaker 1: and in Britain. Some of the most major newspapers were 1286 01:14:38,120 --> 01:14:42,040 Speaker 1: big supporters of Adolph Hitler and made excuses for him 1287 01:14:42,120 --> 01:14:45,280 Speaker 1: and all the rest. Um and and mentioned some of 1288 01:14:45,320 --> 01:14:48,639 Speaker 1: the biggest editors. Some of it might be people who 1289 01:14:48,720 --> 01:14:52,200 Speaker 1: supported Trump today, but it was. It wasn't just a 1290 01:14:52,360 --> 01:14:56,600 Speaker 1: right wing media. These were dominating media's that were very sympathetic. 1291 01:14:57,240 --> 01:14:59,760 Speaker 1: It was a pretty shocking book. What was this a 1292 01:15:00,040 --> 01:15:02,400 Speaker 1: unction of who owned those papers? Yeah, I mean it 1293 01:15:02,520 --> 01:15:06,000 Speaker 1: was the editors of the McCormick and the Chicago Tribune, 1294 01:15:06,920 --> 01:15:10,439 Speaker 1: beaver Brook. Was it the Guardian or the Telegraph in London? 1295 01:15:10,560 --> 01:15:13,559 Speaker 1: Who was an amer of Hitler although once the war 1296 01:15:13,720 --> 01:15:17,799 Speaker 1: started he really went to the side of the British. 1297 01:15:18,680 --> 01:15:23,320 Speaker 1: The newspaper access six press barons who enabled Hitler is 1298 01:15:23,439 --> 01:15:27,160 Speaker 1: the title. And that's another one. Um, what sort of 1299 01:15:27,240 --> 01:15:30,280 Speaker 1: advice would you give to a recent college grad who 1300 01:15:30,360 --> 01:15:34,800 Speaker 1: was interested in the career in investing in finance? Where 1301 01:15:34,840 --> 01:15:39,240 Speaker 1: the investment bigs. Go find something of your passion. Everybody 1302 01:15:39,280 --> 01:15:40,840 Speaker 1: thinks they got to go to the investment bank. So 1303 01:15:40,920 --> 01:15:43,800 Speaker 1: don't don't start a Goldman or Morgan Stanley because such 1304 01:15:43,800 --> 01:15:46,200 Speaker 1: a routine. And I obviously followed a different path. I 1305 01:15:46,240 --> 01:15:50,439 Speaker 1: found the professor. We found more interesting things. Um, I mean, 1306 01:15:50,560 --> 01:15:53,640 Speaker 1: certainly the world is getting quant So python as like 1307 01:15:53,760 --> 01:15:58,800 Speaker 1: the language program, get into data data sciences where the 1308 01:15:58,880 --> 01:16:02,559 Speaker 1: financial engineering program s are hys and demand people from 1309 01:16:02,640 --> 01:16:06,040 Speaker 1: from my son and I would say, you know, a 1310 01:16:06,160 --> 01:16:10,479 Speaker 1: more general thing, and everyone said to do what you love. Um, 1311 01:16:11,400 --> 01:16:13,880 Speaker 1: do what you're good at. You know what you're really good, 1312 01:16:13,920 --> 01:16:16,880 Speaker 1: you think better than others, you know a lot of 1313 01:16:17,280 --> 01:16:19,880 Speaker 1: Oh yeah, I think about that really well, pursue your 1314 01:16:19,920 --> 01:16:24,120 Speaker 1: comparative advantage, as an economist would say, and do what 1315 01:16:24,400 --> 01:16:27,240 Speaker 1: you feel good about, not what someone else, your parents 1316 01:16:27,360 --> 01:16:29,960 Speaker 1: or others are saying. You got to find your own thing. 1317 01:16:30,240 --> 01:16:34,840 Speaker 1: But also know what you're good at. You know, Hey, 1318 01:16:34,920 --> 01:16:38,040 Speaker 1: I'm pretty good at that, and that's where you should go. 1319 01:16:38,400 --> 01:16:41,120 Speaker 1: And our final question, what do each of you know 1320 01:16:41,280 --> 01:16:45,080 Speaker 1: about the world of investing that you wish you knew 1321 01:16:47,720 --> 01:16:52,160 Speaker 1: fifty years ago? Well, I probably would have not had 1322 01:16:52,200 --> 01:16:57,000 Speaker 1: any bonds in my t I a craft University account, 1323 01:16:57,479 --> 01:17:00,360 Speaker 1: no bonds at all, you know, I had I started, 1324 01:17:00,520 --> 01:17:03,920 Speaker 1: They always said, oh Jeremy, you gotta be fifty fifty okay, 1325 01:17:04,040 --> 01:17:07,320 Speaker 1: back then, you know I was even yeah, I mean, uh, 1326 01:17:07,680 --> 01:17:09,439 Speaker 1: you know I wasn't you know when I started. Don't 1327 01:17:09,439 --> 01:17:12,080 Speaker 1: forget I started an economist. I getting gone finance. Actually 1328 01:17:12,200 --> 01:17:15,479 Speaker 1: later so and until I studied myself and I said, 1329 01:17:15,520 --> 01:17:17,800 Speaker 1: what am I doing this for? Um? You know, I 1330 01:17:17,840 --> 01:17:20,720 Speaker 1: started shifting away. But uh, you know, if you got 1331 01:17:20,800 --> 01:17:23,679 Speaker 1: that long arizon and you're young, and you're young today, 1332 01:17:23,800 --> 01:17:26,360 Speaker 1: this is a golden time. I mean, you're not buying 1333 01:17:26,400 --> 01:17:29,439 Speaker 1: at the top, you're buying near the bottom. You are 1334 01:17:29,479 --> 01:17:32,720 Speaker 1: going to be guaranteed great returns when you retire, not 1335 01:17:32,880 --> 01:17:38,160 Speaker 1: a bunch just just to make self. Jeremy Schwartz, what 1336 01:17:38,400 --> 01:17:40,040 Speaker 1: what do you know today that would have been helpful 1337 01:17:40,640 --> 01:17:43,240 Speaker 1: years ago? The remote first world, if I would have 1338 01:17:43,360 --> 01:17:46,080 Speaker 1: known how remote it was going, might have moved into 1339 01:17:46,200 --> 01:17:49,120 Speaker 1: different places. There you go, that's really interesting. We have 1340 01:17:49,280 --> 01:17:53,040 Speaker 1: been speaking with Professor Jeremy Siegel of the Wharton School 1341 01:17:53,080 --> 01:17:57,639 Speaker 1: of Business and Jeremy Schwartz of Wisdom Triosset Management. Thank 1342 01:17:57,680 --> 01:18:00,559 Speaker 1: you guys, for being so generous with your time. If 1343 01:18:00,600 --> 01:18:02,920 Speaker 1: you enjoy this conversation, be sure and check out any 1344 01:18:02,960 --> 01:18:07,280 Speaker 1: of our previous four hundred and twenty five conversations we've 1345 01:18:07,360 --> 01:18:09,680 Speaker 1: done over the past eight and a half years. You 1346 01:18:09,760 --> 01:18:14,559 Speaker 1: can find those at Bloomberg dot com, iTunes, Spotify, YouTube, 1347 01:18:14,680 --> 01:18:18,280 Speaker 1: wherever you feed your podcast fix. We love your comments, 1348 01:18:18,320 --> 01:18:22,439 Speaker 1: feedback and suggestions right to us at m IB podcast 1349 01:18:22,520 --> 01:18:25,880 Speaker 1: at Bloomberg dot net. Follow me on Twitter at Rid Halts, 1350 01:18:26,120 --> 01:18:29,559 Speaker 1: sign up from my daily reading list that's at Rid 1351 01:18:29,600 --> 01:18:32,320 Speaker 1: Halts dot com. I would be remiss if I did 1352 01:18:32,400 --> 01:18:34,760 Speaker 1: not thank the crack team that helps with these conversations 1353 01:18:34,840 --> 01:18:38,880 Speaker 1: together each week. Robert Bragg is my audio engineer. Paris 1354 01:18:38,920 --> 01:18:43,160 Speaker 1: Wold is my producer. Atika val Broun is our project manager. 1355 01:18:43,280 --> 01:18:46,519 Speaker 1: Sean Russo is my head of research. I'm Barry Hults. 1356 01:18:46,880 --> 01:18:50,240 Speaker 1: You've been listening to Masters in Business on Bloomberg Radio.