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Speaker 1: And joining us now is Barbara and Bernard, chief investment

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Speaker 1: officer at Windcrest Capital, getting her markets Outlook, I do

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Speaker 1: like the way you start your talking points that you

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Speaker 1: centers here, Barbara, and it is Tina versus Tara. Tell

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Speaker 1: us what that means exactly. Thanks for sad, always happy

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Speaker 1: to be on. So yeah, I think for the first

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Speaker 1: time in a long time, there is an alternative to equities,

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Speaker 1: and people called that the Tina trade. There is no alternative.

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Speaker 1: So what we think is happening is investors are dumping

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Speaker 1: Tina to date Tara, and even as a predominantly equity investor, increasingly,

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Speaker 1: when we look at a stock, we look at the

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Speaker 1: bonds and we're like, hang on double digit guaranteed safe company. Um.

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Speaker 1: So this is the equity markets have competition for the

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Speaker 1: first time in a long time. I like this line

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Speaker 1: as well. Sell hubris by humiliation. Well, I'm a contrarian

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Speaker 1: value investor, so that comes naturally. But um you know,

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Speaker 1: one of the things that we're seeing right now is

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Speaker 1: that everyone is hiding in US equities and I'm not

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Speaker 1: sure if that's a function of so much money being

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Speaker 1: passively invested um or people thinking it's safe. But in

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Speaker 1: my experience, things can be safe or they can be cheap,

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Speaker 1: but they're not. They're they're they're not both, right, So

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Speaker 1: we think the US is expensive, And just to put

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Speaker 1: some numbers around that, right now, the US is sixty

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Speaker 1: nine point seven percent waiting in the m s c

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Speaker 1: I All Country World Index. If you were to rerate

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Speaker 1: rewait the m c ILL Country World Index by GDP contribution,

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Speaker 1: which they do, the U S would be twenty point

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Speaker 1: six percent, not sixty nine point seven. So by definitely

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Speaker 1: it's not very fair though, because for years we had China.

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Speaker 1: You know, China economy was soaring, but but the stock

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Speaker 1: market was you know, kind of in the toilet. So

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Speaker 1: it's a little bit of a tricky comparison, I think. So,

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Speaker 1: but what what what excites me is that ratio is

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Speaker 1: at an all time high and it can't go on

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Speaker 1: forever because that would mean a percent of the investments

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Speaker 1: were in the US. And because money is finite, if

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Speaker 1: so many dollars in the U S, it means other

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Speaker 1: places are overlooked. So, you know, we talked about bubbles

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Speaker 1: and anti bubbles, and anti bubbles are you know, companies

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Speaker 1: and countries that have great growth prospects that are just

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Speaker 1: being overlooked, and that's where we look for value. And

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Speaker 1: you know, this concept of a country being very popular

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Speaker 1: is not without precedent. In the eighties, Japan accounted for

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Speaker 1: fiftcent of global GDP but attracted fifty percent of all

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Speaker 1: the money. So, um, we've seen this before, and we

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Speaker 1: are far more constructive on emerging markets in the places

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Speaker 1: that capital is afraid to go. So, Barbara, can we

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Speaker 1: draw parallels between China and Japan in the nine eighties? Um,

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Speaker 1: of course it's different. It always is. And you know,

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Speaker 1: but China has sold off in my indiscriminately, Like why

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Speaker 1: is it sold off so significantly last week? Because people say, oh,

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Speaker 1: you will be empoweredain. But to me, I'm like, we

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Speaker 1: know what that is. It's more of the same. That

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Speaker 1: that doesn't change my restolerance for China, right, So that

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Speaker 1: I think it's fine. I don't think it's more of

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Speaker 1: the same, And I think a lot of people don't

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Speaker 1: think it's more of the same. In fact, they think

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Speaker 1: a big change has been made and that the economy

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Speaker 1: and markets will take a distinct back seat to the

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Speaker 1: politics and to gaining power. Yes, but what is priced

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Speaker 1: in right. And so when I'm not buying China as

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Speaker 1: a market, we're trying to find gems within a market

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Speaker 1: that's been oversold um And so when I think about opportunities,

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Speaker 1: like one of the companies that were quite constructive on

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Speaker 1: is E d u UM, the largest provider of after

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Speaker 1: school tutoring. And to put into perspective the margin of

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Speaker 1: safety we have on that, the net cash on the

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Speaker 1: balance sheet is four point three billion, which is over

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Speaker 1: fifty higher than the market cap, which means you're getting

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Speaker 1: the business for free and being paid to wait. And

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Speaker 1: they have now announced that they will be profitable at

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Speaker 1: the operating level next year. They've just announced a four

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Speaker 1: million buy back, which is ten of the market cap.

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Speaker 1: So where I get excited is when I find mispriced

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Speaker 1: but not mismanaged companies. And what I think is some

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Speaker 1: macro volatility can create micro opportunity. So I'm not saying

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Speaker 1: you just go by the index. What I'm advocating is

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Speaker 1: finding the baby that's been thrown out with the bathwater. Yeah,

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Speaker 1: and it's always good. There are a lot of babies

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Speaker 1: been thrown out with the birth wort, and that you know,

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Speaker 1: that's your challenge. One other one that I want to

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Speaker 1: get to is that you've had some great notes. You've

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Speaker 1: got your favorite Peter Drucker quote. Tell us what it

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Speaker 1: is and why you like it. Oh so yeah, so um.

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Speaker 1: You know, the heroes of the boom, of the villains

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Speaker 1: of bus are the villains of the bust. And that's

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Speaker 1: what we're seeing time and time again. If you look

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Speaker 1: at magazine covers, they sort of show consensus, right and

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Speaker 1: and it's fun to go through barons of the last

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Speaker 1: twelve months and to see how many fallen angels there

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Speaker 1: are from there. But I mean everyone from Powell to

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Speaker 1: must to Cathy Woods to Tiger Global to Zuckerberg to Business.

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Speaker 1: There's so many villains. And what we're seeing is that

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Speaker 1: when you have a rising rate environment, it's an absolute

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Speaker 1: regime change. And so I think what we're witnessing right

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Speaker 1: now is a rotation out of all the tech companies

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Speaker 1: that did so well in an easy money environment, and

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Speaker 1: a rotation into the depressed stocks, the value stocks, the

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Speaker 1: commodity stocks, into I think the greatest anti double's active management.

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Speaker 1: I mean, if you just think about people thought it

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Speaker 1: was so clever to passively invest because they were saving

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Speaker 1: a one percent management fee. But on active management, you know,

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Speaker 1: our funds flat on you. You You could have saved of

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Speaker 1: your whole investment. Yeah, okay, Barbara, we gotta go. Unfortunately,

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Speaker 1: Barbara and Bernard's chief investment officer at Wincrest Capital