1 00:00:13,480 --> 00:00:17,000 Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast. 2 00:00:17,079 --> 00:00:19,640 Speaker 1: My name is Mike Reagan. I'm a senior editor at Bloomberg. 3 00:00:20,040 --> 00:00:23,959 Speaker 1: No'm Aldanna hied Across Acid, reporter with Bloomberg. Add this 4 00:00:24,000 --> 00:00:27,200 Speaker 1: week on the show, Well, both the stock and bond 5 00:00:27,280 --> 00:00:31,280 Speaker 1: markets have recovered somewhat this summer, amid some hopeful signs 6 00:00:31,320 --> 00:00:35,680 Speaker 1: that inflation has maybe peaked across your fingers, knock knock 7 00:00:35,760 --> 00:00:39,040 Speaker 1: on wood all that. So, is this awful period for 8 00:00:39,080 --> 00:00:42,920 Speaker 1: investors finally over? Or was this just a summer head fake. 9 00:00:43,479 --> 00:00:45,680 Speaker 1: We'll get into it with that one but two expert 10 00:00:45,720 --> 00:00:49,560 Speaker 1: guests this week. But first, Lbanna, I have to warn 11 00:00:49,600 --> 00:00:53,440 Speaker 1: you I'm a bit of an emotional train wreck today. 12 00:00:53,600 --> 00:00:56,600 Speaker 1: How is How is that different from usual? That's not 13 00:00:56,840 --> 00:01:00,000 Speaker 1: very different, not very different, even more of an emotional 14 00:01:00,040 --> 00:01:02,480 Speaker 1: full train wreck. This week, my daughter in less than 15 00:01:02,560 --> 00:01:05,959 Speaker 1: twenty four hours goes off to college. I'll be dropping 16 00:01:05,959 --> 00:01:10,039 Speaker 1: her off at university. And I'm not so much worried 17 00:01:10,080 --> 00:01:13,080 Speaker 1: about her. I'm worried that I somehow mess up the paperworker, 18 00:01:13,120 --> 00:01:15,440 Speaker 1: I sent the oneing to the wrong place and that 19 00:01:15,520 --> 00:01:17,760 Speaker 1: sort of thing. So yeah, I worry about that for 20 00:01:17,800 --> 00:01:20,680 Speaker 1: you also, Yeah, but I'm sure she's she's gonna be 21 00:01:20,760 --> 00:01:22,960 Speaker 1: she's got to have so much fun. For you, it 22 00:01:22,959 --> 00:01:24,880 Speaker 1: will be tough, but for her it will be really fun. 23 00:01:25,480 --> 00:01:27,480 Speaker 1: We'll see, we'll see. I hope, So, I hope. So 24 00:01:27,520 --> 00:01:30,120 Speaker 1: it's it's it's very tough for me. But luckily, you know, 25 00:01:30,200 --> 00:01:32,600 Speaker 1: we do have on the show this week a very 26 00:01:32,680 --> 00:01:37,080 Speaker 1: famous university professor. So maybe when he's done giving us 27 00:01:37,120 --> 00:01:40,200 Speaker 1: his market insights, he can give me some some insights 28 00:01:40,280 --> 00:01:42,760 Speaker 1: on how not to go crazy as the father of 29 00:01:42,760 --> 00:01:44,640 Speaker 1: a university student. I don't know if it's possible. I 30 00:01:44,640 --> 00:01:47,280 Speaker 1: think i's just my destiny to be to go nuts 31 00:01:47,480 --> 00:01:49,440 Speaker 1: at this point in life. No, I think you should 32 00:01:49,480 --> 00:01:52,360 Speaker 1: let your feelings be felt. But you're right. We do 33 00:01:52,400 --> 00:01:54,560 Speaker 1: have a professor on the show this week. I'm so 34 00:01:54,560 --> 00:01:57,200 Speaker 1: happy you can join us. It's Jeremy Siegel. He's Professor 35 00:01:57,440 --> 00:02:00,800 Speaker 1: Emeritus of Finance at the Wharton School of the University 36 00:02:00,800 --> 00:02:05,040 Speaker 1: of Pennsylvania, and he's wisdom Tree Senior Investment Strategy advisor. 37 00:02:05,360 --> 00:02:06,920 Speaker 1: And then we have a second Jeremy on the show, 38 00:02:06,960 --> 00:02:10,600 Speaker 1: Jeremy Schwartz. He's Global Chief Investment Officer at wisdom Tree. 39 00:02:10,680 --> 00:02:13,400 Speaker 1: So thank you both for joining us. Thanks for having 40 00:02:13,480 --> 00:02:16,239 Speaker 1: us a Philly guy. You know, I'm always happy to 41 00:02:16,320 --> 00:02:18,519 Speaker 1: have a Philly connection on the show. I'm a I'm 42 00:02:18,520 --> 00:02:22,079 Speaker 1: an old Philly guy myself, Professor. So he'll ask you 43 00:02:22,200 --> 00:02:27,120 Speaker 1: she's she's che's state questions later. Yeah, well, I I've 44 00:02:27,200 --> 00:02:30,280 Speaker 1: been here for forty six years. I was actually born 45 00:02:30,360 --> 00:02:35,840 Speaker 1: in Chicago, so I'm a Midwesterner. Yeah, you haven't converted 46 00:02:35,840 --> 00:02:39,920 Speaker 1: to full Philly yet. Yeah, I have. I have, My 47 00:02:40,080 --> 00:02:42,840 Speaker 1: sons grew up here, and then you become a Philly 48 00:02:43,000 --> 00:02:48,880 Speaker 1: of sports fan and then you're Philly Go Birds, Go Birds. Yeah, 49 00:02:49,040 --> 00:02:51,440 Speaker 1: Professor Siegel, maybe maybe we start with you. I wanted 50 00:02:51,480 --> 00:02:54,120 Speaker 1: to ask you what you're expecting from the FED for 51 00:02:54,160 --> 00:02:56,200 Speaker 1: the rest of this year, and I wanted to ask 52 00:02:56,240 --> 00:02:57,760 Speaker 1: you if you can walk us through how you're thinking 53 00:02:57,840 --> 00:03:00,600 Speaker 1: about what the FED should be doing and how you're 54 00:03:00,639 --> 00:03:06,000 Speaker 1: thinking about that has changed in recent weeks or months. Yeah, exactly. Well, 55 00:03:06,880 --> 00:03:08,960 Speaker 1: you know what they do do and what they should do. 56 00:03:09,000 --> 00:03:13,799 Speaker 1: Who are not necessarily the same thing at this particular point. 57 00:03:14,560 --> 00:03:17,359 Speaker 1: I think what they should do is on a slightly 58 00:03:17,480 --> 00:03:21,200 Speaker 1: less aggressive side. I think given the data we have 59 00:03:21,360 --> 00:03:24,600 Speaker 1: so far. Now again, as data rolls in, you know, 60 00:03:25,280 --> 00:03:27,400 Speaker 1: things can change. Given the data we have so far, 61 00:03:27,520 --> 00:03:30,400 Speaker 1: I don't think they should go more than an extra 62 00:03:30,560 --> 00:03:35,440 Speaker 1: hundred basis points through at the end of the year. Uh. 63 00:03:35,920 --> 00:03:38,240 Speaker 1: The funds market, if I take a look at the 64 00:03:38,680 --> 00:03:41,640 Speaker 1: January funds, which basically you know takes care of what's 65 00:03:41,640 --> 00:03:43,920 Speaker 1: gonna happen at year end, is three sixty two now, 66 00:03:44,320 --> 00:03:47,920 Speaker 1: so they think it's going to be an extra basis 67 00:03:47,960 --> 00:03:51,840 Speaker 1: points or or even a little bit more. Now. A 68 00:03:51,840 --> 00:03:54,640 Speaker 1: lot of people are surprising my recommendation, since I was 69 00:03:54,720 --> 00:03:59,360 Speaker 1: certainly a super hawk and warned about inflation probably earlier 70 00:04:00,040 --> 00:04:06,040 Speaker 1: and any other forecaster or economists. The reason that I 71 00:04:06,040 --> 00:04:10,960 Speaker 1: am recommending on the light side here is because when 72 00:04:10,960 --> 00:04:14,840 Speaker 1: I look at inflation on the ground, not in the 73 00:04:14,920 --> 00:04:20,159 Speaker 1: formal statistics published by the Bureau of Labor Statistics, but 74 00:04:20,320 --> 00:04:24,760 Speaker 1: actually what is happening in the active markets, in the 75 00:04:24,800 --> 00:04:30,720 Speaker 1: markets that prices are determined every day, commodity markets, energy markets, 76 00:04:31,120 --> 00:04:36,520 Speaker 1: and particularly even the housing market, I see declining prices. 77 00:04:36,560 --> 00:04:40,279 Speaker 1: I do not really see rising prices. Does not mean 78 00:04:41,000 --> 00:04:43,400 Speaker 1: that we will not see rising prices in the consumer 79 00:04:43,440 --> 00:04:46,560 Speaker 1: Price Index because of the way it's constructed is very 80 00:04:46,680 --> 00:04:52,040 Speaker 1: lagged to what is actually going on out there. Uh. Nevertheless, 81 00:04:52,520 --> 00:04:55,599 Speaker 1: I think the increases taken place so far and what 82 00:04:55,680 --> 00:05:00,240 Speaker 1: the market anticipates and that's built in has dramatically load 83 00:05:00,400 --> 00:05:03,440 Speaker 1: the money supply. In fact, my supply is shrunk since March, 84 00:05:03,800 --> 00:05:08,080 Speaker 1: which is almost an unprecedented occurrence. And as a result, 85 00:05:08,920 --> 00:05:13,880 Speaker 1: although there is inflation in the pipeline, particularly the statistical pipeline, 86 00:05:14,800 --> 00:05:18,240 Speaker 1: my feeling is we should not get overly aggressive at 87 00:05:18,279 --> 00:05:23,160 Speaker 1: this point. I see inflation as peaking in the real world, 88 00:05:23,200 --> 00:05:28,360 Speaker 1: although will remain high in the statistics. Professor, I wonder 89 00:05:28,839 --> 00:05:31,599 Speaker 1: how you're thinking about the market in that scenario. Then. 90 00:05:31,839 --> 00:05:35,200 Speaker 1: Is the idea of the Fed uh continuing to tighten 91 00:05:35,360 --> 00:05:38,919 Speaker 1: but at a sort of less aggressive pace. Is that 92 00:05:38,960 --> 00:05:41,200 Speaker 1: a reason to be bullish on the stock market? It 93 00:05:41,240 --> 00:05:45,080 Speaker 1: does seem, you know, valuations are are a little high, 94 00:05:45,120 --> 00:05:50,799 Speaker 1: Earnings growth estimates are not, you know, really that robust, 95 00:05:50,880 --> 00:05:54,360 Speaker 1: and you know, there's this worrant, you know, overall concern 96 00:05:54,440 --> 00:05:57,320 Speaker 1: about whether we really be able to achieve that soft 97 00:05:57,400 --> 00:06:01,440 Speaker 1: landing that that the FED hopes to achieve. Is less 98 00:06:01,440 --> 00:06:05,000 Speaker 1: aggressive fat enough to sort of be very bolsh about 99 00:06:05,040 --> 00:06:07,400 Speaker 1: the stock market ready. I mean, I think we're we're 100 00:06:07,480 --> 00:06:11,520 Speaker 1: we're very really you know, I think we're very reasonly priced. Uh. 101 00:06:11,600 --> 00:06:13,560 Speaker 1: You know. I I've maintained for a long time that 102 00:06:13,640 --> 00:06:17,520 Speaker 1: I think, under normal circumstances, the market should be selling 103 00:06:17,560 --> 00:06:22,279 Speaker 1: for about twenty times UH forward twelve months earnings were 104 00:06:22,320 --> 00:06:24,760 Speaker 1: below that at the present time about eighteen or so, 105 00:06:24,880 --> 00:06:28,359 Speaker 1: now right, Yeah, So I think that. And it doesn't 106 00:06:28,360 --> 00:06:30,760 Speaker 1: mean I mean it's gonna fluctuate between like twelve and 107 00:06:30,800 --> 00:06:34,159 Speaker 1: twenty eight or I mean, you know, we all know that, 108 00:06:34,279 --> 00:06:38,280 Speaker 1: but I think twenty. I know the historical is slightly 109 00:06:38,360 --> 00:06:42,719 Speaker 1: less like seventeen or so, but we live in in 110 00:06:42,720 --> 00:06:45,520 Speaker 1: a different world with a lower general level of interest 111 00:06:45,600 --> 00:06:48,200 Speaker 1: rates and a higher level of liquidity, and I think 112 00:06:48,200 --> 00:06:52,800 Speaker 1: that that really does call for uh slightly higher than 113 00:06:52,880 --> 00:06:56,479 Speaker 1: historical level. So as a result, I do not think 114 00:06:56,720 --> 00:06:59,000 Speaker 1: the market is overvalued at the present time. It's not 115 00:06:59,040 --> 00:07:01,880 Speaker 1: grossly undervalue by any means, but I do not think 116 00:07:01,880 --> 00:07:05,120 Speaker 1: it is over value. And Jeremy, I want to bring 117 00:07:05,120 --> 00:07:06,920 Speaker 1: you in here as well, um, and before we talk 118 00:07:06,960 --> 00:07:10,280 Speaker 1: about how you would maybe recommend investors be positioned in 119 00:07:10,320 --> 00:07:12,160 Speaker 1: the current environment, I want to ask you about how 120 00:07:12,240 --> 00:07:15,040 Speaker 1: hi you think the hurdle is for the so called 121 00:07:15,800 --> 00:07:18,600 Speaker 1: fed pivots to even happen which is something we've we've 122 00:07:18,600 --> 00:07:21,360 Speaker 1: been hearing so much about over the last couple of weeks. 123 00:07:21,680 --> 00:07:24,760 Speaker 1: Basically this entire summer where investors have been sort of 124 00:07:24,760 --> 00:07:27,400 Speaker 1: fighting the FED is the phrase that we keep hearing, 125 00:07:28,800 --> 00:07:31,160 Speaker 1: you know. And I'll give Professor Siegel so much credit. 126 00:07:31,200 --> 00:07:32,760 Speaker 1: I mean, he was the one calling for them to 127 00:07:32,800 --> 00:07:35,040 Speaker 1: be hawkies, and now he's calling them to be debbish. Um, 128 00:07:35,080 --> 00:07:37,239 Speaker 1: all you hear from the FED is that inflation sign 129 00:07:37,360 --> 00:07:39,440 Speaker 1: is going to be a problem. You don't hear them 130 00:07:39,480 --> 00:07:42,480 Speaker 1: backing off in any of their communications. We've got people 131 00:07:42,480 --> 00:07:45,520 Speaker 1: like cash car Out saying with these eight percent numbers, 132 00:07:45,560 --> 00:07:47,800 Speaker 1: we've got to keep raising rates. So this sort of 133 00:07:47,880 --> 00:07:50,840 Speaker 1: raisin hold seems to be a lot of the taglines, 134 00:07:50,920 --> 00:07:53,280 Speaker 1: and I think Professor Siegel's got to keep pushing them 135 00:07:53,320 --> 00:07:56,760 Speaker 1: too to rethink that. Uh So, I think that it 136 00:07:56,800 --> 00:07:59,800 Speaker 1: will be very interesting to see how quickly they can 137 00:08:00,040 --> 00:08:02,520 Speaker 1: come down, uh and and how much they're gonna actually 138 00:08:02,560 --> 00:08:05,480 Speaker 1: see that that inflation the pipeline versus looking at those 139 00:08:05,480 --> 00:08:08,360 Speaker 1: backward of looking statistics that the professor keeps talking about. 140 00:08:08,800 --> 00:08:11,080 Speaker 1: You know, Jeremy, I'm I'm fascinated with some of the 141 00:08:11,080 --> 00:08:13,760 Speaker 1: E T F s A at Wisdom Tree because it's 142 00:08:13,800 --> 00:08:17,000 Speaker 1: you know, some very sophisticated sort of strategies. I'm looking 143 00:08:17,040 --> 00:08:20,200 Speaker 1: at some of the best uh sort of best performing 144 00:08:20,240 --> 00:08:23,800 Speaker 1: this year over the past year, uh, the Enhanced Commodity 145 00:08:23,920 --> 00:08:28,320 Speaker 1: Strategy Fund, the US Dollar Bullish Fund. Walk us through, 146 00:08:28,480 --> 00:08:30,120 Speaker 1: you know, and and feel free to use your own 147 00:08:30,120 --> 00:08:33,840 Speaker 1: ETFs as an example of how you do think you know, 148 00:08:34,640 --> 00:08:37,560 Speaker 1: so the best way to be positioned is in this environment. 149 00:08:37,600 --> 00:08:39,400 Speaker 1: I mean, but if I could go back in time 150 00:08:39,440 --> 00:08:42,080 Speaker 1: and buy the Commodity Strategy Fund and the US Dollar 151 00:08:42,160 --> 00:08:45,920 Speaker 1: Bullish Fund, UH be actually having a good year. So 152 00:08:46,040 --> 00:08:48,400 Speaker 1: it's uh, it's interesting that you have such a wide 153 00:08:48,480 --> 00:08:51,280 Speaker 1: variety of different options to choose from. What what do 154 00:08:51,280 --> 00:08:53,640 Speaker 1: you think is the best place to go right now? 155 00:08:54,200 --> 00:08:56,920 Speaker 1: You know? So very interestingly, you know, for the FED, 156 00:08:57,000 --> 00:08:58,800 Speaker 1: you know, the one of the things that we're seeing 157 00:08:58,840 --> 00:09:01,439 Speaker 1: a lot of interest in is sort of floating rate treasuries. 158 00:09:01,520 --> 00:09:05,959 Speaker 1: And for the idea of I'd still be cautious on duration. Um, 159 00:09:06,080 --> 00:09:07,840 Speaker 1: you know, we might think rates don't have a lot 160 00:09:07,960 --> 00:09:10,760 Speaker 1: further to go, but with the inverted curve you can 161 00:09:10,800 --> 00:09:13,040 Speaker 1: get very good short term rates and not taking any 162 00:09:13,040 --> 00:09:15,880 Speaker 1: of that duration risks. So our us far floating rate 163 00:09:15,880 --> 00:09:18,840 Speaker 1: Treasury Fund is now our largest ETF over seven billion 164 00:09:19,400 --> 00:09:21,320 Speaker 1: uh and and that i'd say is for the best 165 00:09:21,360 --> 00:09:23,840 Speaker 1: play for the FED in the bond market. Uh And 166 00:09:23,880 --> 00:09:25,959 Speaker 1: so that could used to be a very focused fund, 167 00:09:26,480 --> 00:09:29,760 Speaker 1: just core staple reflecting the short term interest rates with 168 00:09:29,840 --> 00:09:33,200 Speaker 1: a one week duration. UM. Within equities, you know, certainly 169 00:09:33,280 --> 00:09:36,040 Speaker 1: there's been a huge factor rotation from the expensive growth 170 00:09:36,120 --> 00:09:38,880 Speaker 1: docks towards value and the no better than one of 171 00:09:38,920 --> 00:09:42,040 Speaker 1: the original ets with some Tree Laune sixteen years ago, 172 00:09:42,160 --> 00:09:46,360 Speaker 1: THHS high dividends has been significantly positive on the year. 173 00:09:46,480 --> 00:09:48,640 Speaker 1: And and and that is you know, compared to even value 174 00:09:48,640 --> 00:09:51,880 Speaker 1: stock values out before growth growth is lag the most 175 00:09:51,880 --> 00:09:55,200 Speaker 1: expensive growth is lagged the most but high difference being positive. 176 00:09:55,559 --> 00:09:57,920 Speaker 1: You know, obviously energy is a part of that, but 177 00:09:57,960 --> 00:10:00,320 Speaker 1: it's not only energy. I mean it's it's less than 178 00:10:00,320 --> 00:10:03,040 Speaker 1: twenty percent energy. And so the high difference stocks in 179 00:10:03,160 --> 00:10:07,480 Speaker 1: every sector are outperforming the lower difference stocks in every sector. 180 00:10:07,520 --> 00:10:11,240 Speaker 1: So it really diversified way to get high divn stocks UM. 181 00:10:11,280 --> 00:10:13,240 Speaker 1: You know. The commodities and the dollar I think are 182 00:10:13,320 --> 00:10:15,440 Speaker 1: very interesting because often you would there was a negative 183 00:10:15,440 --> 00:10:17,600 Speaker 1: correlation and you thought you needed a down dollar for 184 00:10:17,679 --> 00:10:20,120 Speaker 1: commodities to do well. You say that maybe one of 185 00:10:20,160 --> 00:10:23,000 Speaker 1: the things suppressing gold is the very strong dollar and 186 00:10:23,120 --> 00:10:26,360 Speaker 1: higher higher interest rates that you've gotten this year. You know, 187 00:10:26,360 --> 00:10:29,280 Speaker 1: gold did well, would get negative interest rates. But you know, 188 00:10:29,320 --> 00:10:32,360 Speaker 1: the dollar continues to go on momentum. It's partly been 189 00:10:32,440 --> 00:10:35,120 Speaker 1: a rates trade. When you look at say the pound 190 00:10:35,160 --> 00:10:37,680 Speaker 1: in the euro, you know, it's it's actually trading more 191 00:10:37,679 --> 00:10:40,680 Speaker 1: with the energy crisis, you know, because if you put 192 00:10:40,679 --> 00:10:43,440 Speaker 1: the pound in particular, their their rates were rising and 193 00:10:43,480 --> 00:10:46,280 Speaker 1: the pound has been falling um and and so there's 194 00:10:46,280 --> 00:10:48,079 Speaker 1: a lot of interesting stuff in the dollar. You know, 195 00:10:48,120 --> 00:10:51,400 Speaker 1: we were one of the first people who courtey head gts. 196 00:10:51,760 --> 00:10:54,800 Speaker 1: It's it's very interesting. You still haven't seen meaningful flows 197 00:10:54,880 --> 00:10:57,079 Speaker 1: to those you've seen flows to the dollar. Even just 198 00:10:57,240 --> 00:11:00,240 Speaker 1: this week we saw flows come to the dollar coming 199 00:11:00,280 --> 00:11:04,040 Speaker 1: back towards highs. The currency hedging people are still betting 200 00:11:04,120 --> 00:11:06,160 Speaker 1: on the ear at the end and all their traditional 201 00:11:06,160 --> 00:11:09,400 Speaker 1: international funds, which is surprising to be but the dollar 202 00:11:09,480 --> 00:11:13,320 Speaker 1: has been very, very strong on the higher fed UH grates. Yeah, 203 00:11:13,320 --> 00:11:15,400 Speaker 1: I was looking into that. You know, it was amazing 204 00:11:15,400 --> 00:11:19,600 Speaker 1: a few years ago, your your hedge European Equities et 205 00:11:19,720 --> 00:11:23,439 Speaker 1: F that was just attracting assets like crazy. I think 206 00:11:23,440 --> 00:11:26,000 Speaker 1: it went over twenty billion at one point. I guess 207 00:11:26,120 --> 00:11:29,719 Speaker 1: is it just all these anomalies in the market sort 208 00:11:29,720 --> 00:11:33,559 Speaker 1: of that you know, dollar rising with commodities and people 209 00:11:33,600 --> 00:11:36,920 Speaker 1: sort of shine away from the hedge dequities. Is it all? 210 00:11:37,280 --> 00:11:40,080 Speaker 1: I guess it all just relates back to the Ukraine 211 00:11:40,080 --> 00:11:44,600 Speaker 1: War and just you know, the energy crisis has just 212 00:11:44,640 --> 00:11:49,920 Speaker 1: created and almost you know, unique situation historically. Uh that 213 00:11:49,920 --> 00:11:52,760 Speaker 1: that is very tricky to position for. Is that does 214 00:11:52,760 --> 00:11:55,160 Speaker 1: that seem to be sort of the driving, you know, 215 00:11:55,320 --> 00:11:59,679 Speaker 1: forced behind all the trends you've seen in Europe? I'd 216 00:11:59,679 --> 00:12:02,480 Speaker 1: say the sentiment towards Europe generally has been not people 217 00:12:02,520 --> 00:12:05,319 Speaker 1: increasing flows. I mean I'm surprised in Japan too, and 218 00:12:05,440 --> 00:12:08,240 Speaker 1: the end sort of skyrocket, I mean just a few 219 00:12:09,280 --> 00:12:11,360 Speaker 1: if you go back not so long, it's like one 220 00:12:11,440 --> 00:12:14,320 Speaker 1: or three N to the dollars now one seven N 221 00:12:14,360 --> 00:12:16,560 Speaker 1: to the dollar. Huge move and and a lot of 222 00:12:16,559 --> 00:12:18,719 Speaker 1: it happened very very quickly again on this sort of 223 00:12:18,840 --> 00:12:21,960 Speaker 1: rising rate differential between the US and sort of Bank 224 00:12:22,000 --> 00:12:24,120 Speaker 1: of Japan. So I think it caught a lot of 225 00:12:24,120 --> 00:12:27,480 Speaker 1: people off guard, and it surprised people how quickly it moved, 226 00:12:27,720 --> 00:12:29,360 Speaker 1: and so I and and a lot of people just 227 00:12:29,600 --> 00:12:31,840 Speaker 1: haven't felt like they knew what to do with currencies, 228 00:12:31,880 --> 00:12:34,560 Speaker 1: and they defaulted to what they used to do versus 229 00:12:34,559 --> 00:12:37,040 Speaker 1: to like the you know, the position in those funds 230 00:12:37,080 --> 00:12:39,640 Speaker 1: doesn't have a currency play, their neutral to currency, so 231 00:12:39,679 --> 00:12:41,760 Speaker 1: they don't benefit when currencies go up and can hurt 232 00:12:41,760 --> 00:12:43,880 Speaker 1: when they go down. Uh. So that's something I've been 233 00:12:43,920 --> 00:12:45,920 Speaker 1: talking a lot about of. You don't have to bet 234 00:12:45,960 --> 00:12:47,880 Speaker 1: on these foreign currencies. You could just buy the cheap 235 00:12:47,920 --> 00:12:51,439 Speaker 1: stocks Japanese stocks nine times earnings, eleven percent earnings fields, 236 00:12:51,520 --> 00:12:54,680 Speaker 1: one of the cheapest value plays around relative to where 237 00:12:54,679 --> 00:12:57,160 Speaker 1: their bond yields are. Uh, you know, and you don't 238 00:12:57,160 --> 00:12:58,920 Speaker 1: have to take the currency rest, which is my you know, 239 00:12:58,960 --> 00:13:08,080 Speaker 1: I think a good thing people can do. And Professor, 240 00:13:08,120 --> 00:13:10,960 Speaker 1: just to come back to you, and and an interview 241 00:13:11,000 --> 00:13:13,720 Speaker 1: I heard of yours, a recent interview of years that 242 00:13:13,760 --> 00:13:16,320 Speaker 1: I've heard you said that you think that we're already 243 00:13:16,360 --> 00:13:18,240 Speaker 1: in a mild recession, and I was hoping you can 244 00:13:18,280 --> 00:13:23,080 Speaker 1: tell us more about that. Well, you know, technically, uh. 245 00:13:23,120 --> 00:13:25,079 Speaker 1: And the sort of rule of thumb, a recession is 246 00:13:25,160 --> 00:13:29,040 Speaker 1: to declining quarters of real g D P H and 247 00:13:29,880 --> 00:13:32,800 Speaker 1: according to the official statistics. We've had them first and 248 00:13:32,880 --> 00:13:36,200 Speaker 1: second quarter, and that's what I meant. Uh. Now, I 249 00:13:36,200 --> 00:13:38,560 Speaker 1: don't think it's going to be called a recession. The 250 00:13:38,679 --> 00:13:41,040 Speaker 1: National Bureau of Economic Research, as you know, which is 251 00:13:41,040 --> 00:13:44,240 Speaker 1: a private research organization, not the government, does make the 252 00:13:44,280 --> 00:13:47,800 Speaker 1: official determination months later, and they look at much more 253 00:13:47,840 --> 00:13:50,320 Speaker 1: than just the g d P. But I was saying 254 00:13:50,320 --> 00:13:52,280 Speaker 1: that it, you know, it looked like we were in 255 00:13:52,480 --> 00:13:57,080 Speaker 1: a real, if not a hour right recession, a growth recession, which, 256 00:13:57,120 --> 00:13:59,760 Speaker 1: by the way, it looks like it's continuing in this border. 257 00:14:01,120 --> 00:14:04,360 Speaker 1: Estimates that I get are between zero and one. You know, 258 00:14:04,440 --> 00:14:07,199 Speaker 1: we're not uh, just over halfway through the quarter. We 259 00:14:07,520 --> 00:14:11,560 Speaker 1: have really data for Joe I. But nonetheless, um, we've 260 00:14:11,600 --> 00:14:18,360 Speaker 1: had an unprecedented drop in g d P WOW at 261 00:14:18,400 --> 00:14:23,640 Speaker 1: the same time having robust labor market growth, which is 262 00:14:23,840 --> 00:14:29,000 Speaker 1: absolutely unheard of in history. Uh. If if we've added 263 00:14:29,040 --> 00:14:32,560 Speaker 1: three point two million jobs on payroll and g d 264 00:14:32,680 --> 00:14:36,080 Speaker 1: P has gone down, how is that possible? What are 265 00:14:36,120 --> 00:14:40,920 Speaker 1: these people doing? M Are they twiddling their thumbs or 266 00:14:41,360 --> 00:14:44,560 Speaker 1: are they claiming they're working at home eight hours when 267 00:14:44,600 --> 00:14:47,800 Speaker 1: they're working at home for four hours? I don't know, 268 00:14:48,600 --> 00:14:52,280 Speaker 1: but um, we have something that we have never had before. 269 00:14:52,400 --> 00:14:57,080 Speaker 1: And I mean, uh, seventy five years of statistics. We've 270 00:14:57,160 --> 00:15:00,680 Speaker 1: never had growth of the labor fourth and declining g 271 00:15:00,800 --> 00:15:05,440 Speaker 1: d P before. And the magnitudes are are absolutely stunning. 272 00:15:05,760 --> 00:15:08,680 Speaker 1: And I certainly hope I think the Fed and the 273 00:15:08,720 --> 00:15:11,520 Speaker 1: Guy and the Guiden administration should be working on this 274 00:15:11,600 --> 00:15:14,720 Speaker 1: problem of how how how do we have all these 275 00:15:14,760 --> 00:15:18,320 Speaker 1: people new hires and and and and yet following g 276 00:15:18,480 --> 00:15:22,800 Speaker 1: d P. UH. It is a collapse of productivity in 277 00:15:22,920 --> 00:15:28,320 Speaker 1: the data that is again unprecedented. I mean by almost 278 00:15:28,400 --> 00:15:30,960 Speaker 1: orders of magnitude. We have not seen anything like this. 279 00:15:31,520 --> 00:15:34,680 Speaker 1: You know, Professor I, you wrote a very very famous, 280 00:15:34,840 --> 00:15:37,800 Speaker 1: well regarded book, Stocks for the Long Run UH in 281 00:15:37,920 --> 00:15:40,600 Speaker 1: the middle of the nineteen nineties, and I think in 282 00:15:40,680 --> 00:15:42,680 Speaker 1: that and and since then, you've sort of been an 283 00:15:42,720 --> 00:15:45,240 Speaker 1: advocate more of a fan of stocks than bonds, but 284 00:15:45,280 --> 00:15:50,240 Speaker 1: also very much an advocate for UH international U diversifying internationally. 285 00:15:51,000 --> 00:15:53,760 Speaker 1: I'm just curious, you know, the world has changed so 286 00:15:53,840 --> 00:15:56,120 Speaker 1: much over the last few years, and you're starting with 287 00:15:56,280 --> 00:15:59,760 Speaker 1: the trade war with China, now the Ukraine Russia's situation. 288 00:16:00,040 --> 00:16:04,160 Speaker 1: It almost seems like the the trend towards globalization been 289 00:16:04,240 --> 00:16:07,720 Speaker 1: damaged perhaps irreparably, at least at least in our lifetimes. 290 00:16:07,960 --> 00:16:10,440 Speaker 1: Has that made you change your thinking at all about 291 00:16:10,680 --> 00:16:15,320 Speaker 1: about being diversified into international equities? Uh, at this point 292 00:16:15,320 --> 00:16:19,320 Speaker 1: in the game. Well, Mike, you're certainly correct, and in fact, 293 00:16:19,400 --> 00:16:23,960 Speaker 1: I would say my biggest disappointment is the performance of 294 00:16:24,000 --> 00:16:30,320 Speaker 1: international stocks and even emerging market stocks UM. The way 295 00:16:30,320 --> 00:16:33,560 Speaker 1: where the world was going twenty years ago, growth outside 296 00:16:33,560 --> 00:16:35,280 Speaker 1: of the United stags and three or four times the 297 00:16:35,320 --> 00:16:39,480 Speaker 1: growth in the US UM, half the world's equities were here. 298 00:16:39,560 --> 00:16:42,440 Speaker 1: I thought by this time only about a quarter or 299 00:16:42,520 --> 00:16:44,560 Speaker 1: a third of the world's equities are here, But and 300 00:16:44,680 --> 00:16:47,520 Speaker 1: it turns out that's still half of the world's equity 301 00:16:47,640 --> 00:16:52,200 Speaker 1: values are here in the US. Yes, it has been. 302 00:16:52,280 --> 00:16:56,400 Speaker 1: It has been my greatest disappointment. And yes there are 303 00:16:56,440 --> 00:16:58,840 Speaker 1: I'm worre about China. There's a lot of negatives there. 304 00:16:59,400 --> 00:17:02,680 Speaker 1: You know. We can talk about Europe the only saving 305 00:17:02,920 --> 00:17:07,760 Speaker 1: grace for international investors at this point. I mean, Jeremy 306 00:17:07,880 --> 00:17:11,920 Speaker 1: just referred to it. Is there incrediblely low valuation, so 307 00:17:12,040 --> 00:17:15,639 Speaker 1: you're getting paid for slower growth. I mean, what is 308 00:17:15,680 --> 00:17:19,080 Speaker 1: Europe allowed on eleven times earnings? And as you said, 309 00:17:19,160 --> 00:17:24,120 Speaker 1: Japan is is no, no different emerging markets. Also, very 310 00:17:24,160 --> 00:17:26,960 Speaker 1: low teams would divid in yields of four or five 311 00:17:27,040 --> 00:17:31,960 Speaker 1: six percent. So even if they don't go up in price, Uh, 312 00:17:32,160 --> 00:17:38,639 Speaker 1: you're you're getting a darn good return. So, yes, they've disappointed. Yes, 313 00:17:39,400 --> 00:17:42,800 Speaker 1: they may not grow as fast as the US going forward, 314 00:17:43,320 --> 00:17:48,919 Speaker 1: but they're very low valuations to me, Uh, suggests that 315 00:17:49,000 --> 00:17:53,400 Speaker 1: you should not abandoned them at the low in your portfolio. 316 00:17:54,119 --> 00:17:55,480 Speaker 1: And well, if I if I could add to that 317 00:17:55,520 --> 00:17:58,639 Speaker 1: real quickly, you know, because the sixth edition, Professor is 318 00:17:58,680 --> 00:18:01,480 Speaker 1: coming out to give make sure people know in September, 319 00:18:01,640 --> 00:18:04,479 Speaker 1: the new edition is coming out a lot of updates 320 00:18:04,480 --> 00:18:09,280 Speaker 1: for a long run. Sixth edition the biggest, interrupting, Jeremy. Um, 321 00:18:09,520 --> 00:18:12,880 Speaker 1: but it's the biggest change by far of any There's 322 00:18:12,920 --> 00:18:18,880 Speaker 1: five new chapters, big expansions on there's there's four chapters 323 00:18:18,880 --> 00:18:23,440 Speaker 1: on value investing just by itself, Um, when there used 324 00:18:23,440 --> 00:18:27,720 Speaker 1: to be just one chapter before. Yes, Jeremy, I want 325 00:18:27,720 --> 00:18:30,920 Speaker 1: to continue on that talk about talking to your book, Professor, boy, 326 00:18:30,960 --> 00:18:35,199 Speaker 1: that's what though for yourself. Yeah, I just want to 327 00:18:35,240 --> 00:18:37,440 Speaker 1: say that a lot of a lot of these topics 328 00:18:37,440 --> 00:18:41,040 Speaker 1: are are discussed there. Good good look forward to it. Well, 329 00:18:41,119 --> 00:18:43,359 Speaker 1: The point I was gonna make is is in the 330 00:18:43,400 --> 00:18:46,920 Speaker 1: book we talked about the like growth is not returned 331 00:18:47,000 --> 00:18:49,960 Speaker 1: is one of the key equations. And you know why 332 00:18:50,000 --> 00:18:52,720 Speaker 1: did value do well? Some of the best performing countries 333 00:18:52,760 --> 00:18:55,080 Speaker 1: didn't have the fastest growth. You know, there was a 334 00:18:55,119 --> 00:18:58,160 Speaker 1: negative correlation between growth and return and some of those 335 00:18:58,160 --> 00:19:01,960 Speaker 1: international markets. Uh And and that's you know reflected in 336 00:19:02,000 --> 00:19:06,080 Speaker 1: those little valuations is that often people become too pessimistic 337 00:19:06,080 --> 00:19:08,280 Speaker 1: about growth and they little value those and then over 338 00:19:08,320 --> 00:19:10,960 Speaker 1: time that's become the long term winners. I think that's yeah, 339 00:19:11,119 --> 00:19:13,640 Speaker 1: I mean, just give you. I mean people are shocked 340 00:19:14,000 --> 00:19:16,720 Speaker 1: go over the last hundred years, asked what it's the 341 00:19:16,760 --> 00:19:21,080 Speaker 1: best stock market performance in dour terms, and you tell 342 00:19:21,119 --> 00:19:23,760 Speaker 1: them it's South Africa and they look at you like 343 00:19:23,760 --> 00:19:27,359 Speaker 1: you're crazy. And South Africa has had one of the 344 00:19:27,359 --> 00:19:31,399 Speaker 1: slowest GDP growths of all the countries, but it's valuation 345 00:19:31,440 --> 00:19:33,520 Speaker 1: has always been so low that you've made it up 346 00:19:33,760 --> 00:19:36,840 Speaker 1: on valuation which you didn't get in in in growth. 347 00:19:37,160 --> 00:19:40,240 Speaker 1: We also tell the story about IBM and Standard Oil 348 00:19:40,400 --> 00:19:43,840 Speaker 1: of New Jersey now x on Mobile, IBM has had 349 00:19:43,920 --> 00:19:47,640 Speaker 1: much faster growth and dividends, earnings and and and all 350 00:19:47,680 --> 00:19:52,080 Speaker 1: the components, but it's total return has not matched that 351 00:19:52,720 --> 00:19:56,600 Speaker 1: of of X on mobile over the last fifty or 352 00:19:56,680 --> 00:20:01,520 Speaker 1: sixty years. So again, growth does not necessarily mean return. 353 00:20:01,560 --> 00:20:05,439 Speaker 1: In the short run. It does power superior return, but 354 00:20:05,520 --> 00:20:10,080 Speaker 1: a long runner often leads to two high valuations and 355 00:20:10,160 --> 00:20:13,399 Speaker 1: the slow and steady get it done for you in 356 00:20:13,440 --> 00:20:16,320 Speaker 1: the long run. And Jeremy, maybe you can talk a 357 00:20:16,359 --> 00:20:19,080 Speaker 1: little bit more about valuations because the other big thing 358 00:20:19,119 --> 00:20:21,440 Speaker 1: that we had been hearing all summer is that earnings 359 00:20:21,720 --> 00:20:24,840 Speaker 1: earnings expectations were way too high, that they were needing 360 00:20:24,840 --> 00:20:28,040 Speaker 1: to be coming down. And I'm wondering what you make 361 00:20:28,080 --> 00:20:30,600 Speaker 1: of that talk and how you guys are thinking about it. 362 00:20:32,320 --> 00:20:35,080 Speaker 1: You know, it's interesting, and I think this has been 363 00:20:35,080 --> 00:20:37,720 Speaker 1: one of the surprises even all the professors said on 364 00:20:37,720 --> 00:20:39,880 Speaker 1: on the pressure on the economy at earnings have come 365 00:20:39,880 --> 00:20:42,400 Speaker 1: been strong, like where is the recession in the earnings data? 366 00:20:42,520 --> 00:20:44,440 Speaker 1: And even more so, you know what we when Mike 367 00:20:44,480 --> 00:20:46,800 Speaker 1: brought up, hey, your strong dollar fund has been with 368 00:20:46,880 --> 00:20:50,320 Speaker 1: the best performing funds this year if you go back, um, 369 00:20:50,359 --> 00:20:52,320 Speaker 1: you know, there's been a few different estimates that Mike 370 00:20:52,320 --> 00:20:54,600 Speaker 1: Wilson and Morgan Stanley put out an estimate that a 371 00:20:54,680 --> 00:20:58,160 Speaker 1: sixteen point moving the dollar recently translates to an eight 372 00:20:58,160 --> 00:21:01,359 Speaker 1: percent earnings headwind. That He's a lot of the multinationals 373 00:21:01,359 --> 00:21:05,600 Speaker 1: protect companies in particular have earnings overseas. Strong dollar makes 374 00:21:06,119 --> 00:21:09,680 Speaker 1: translation worse. You saw that in IBM, you saw that Netflix, 375 00:21:09,680 --> 00:21:13,280 Speaker 1: you saw that Pepsi, all the consumer staple stocks. Uh. 376 00:21:13,280 --> 00:21:15,480 Speaker 1: And yet earnings are still stronger. And so I think 377 00:21:15,560 --> 00:21:19,480 Speaker 1: that is one of the interesting points on on how 378 00:21:19,880 --> 00:21:22,199 Speaker 1: you know, obviously the rest of the year will be important. 379 00:21:22,200 --> 00:21:24,680 Speaker 1: Can earnings continue to come in well, but they have 380 00:21:24,800 --> 00:21:26,760 Speaker 1: held up remarkably well in the face of the dollar, 381 00:21:26,880 --> 00:21:29,680 Speaker 1: in face of the slowing GDP UM and so that'll 382 00:21:29,720 --> 00:21:32,000 Speaker 1: be one thing to see play out. And I think 383 00:21:32,000 --> 00:21:34,880 Speaker 1: that also goes to the benefit we just talked about international. 384 00:21:34,920 --> 00:21:37,360 Speaker 1: I think that over the next few years you could 385 00:21:37,359 --> 00:21:41,720 Speaker 1: actually see Europe in Japan become more competitive um as 386 00:21:41,720 --> 00:21:45,560 Speaker 1: global exporters. Certainly they're facing this huge both of them 387 00:21:45,640 --> 00:21:50,720 Speaker 1: importing energy is a very big labor, very big import costs, 388 00:21:50,720 --> 00:21:53,800 Speaker 1: but their labor is becoming way more competitive. Uh. And 389 00:21:53,800 --> 00:21:56,639 Speaker 1: and I was just earn Actote yesterday that uh, you 390 00:21:56,680 --> 00:22:01,480 Speaker 1: could get a Japanese employee for seven or fifty ye 391 00:22:01,520 --> 00:22:04,600 Speaker 1: and four times college, you know, for four years of 392 00:22:04,640 --> 00:22:09,280 Speaker 1: college education, very different rates, you know, and becoming way 393 00:22:09,280 --> 00:22:11,159 Speaker 1: more competitive. So I think that's also the case for 394 00:22:11,320 --> 00:22:13,440 Speaker 1: some of the internationals that they're there, the labor hars 395 00:22:13,480 --> 00:22:15,960 Speaker 1: being way more competitive than they were even historically with 396 00:22:16,000 --> 00:22:19,879 Speaker 1: the weak currencies. Let me supplement that also by saying, 397 00:22:20,200 --> 00:22:23,040 Speaker 1: you know, everyone says, oh, the fire out estimates are 398 00:22:23,040 --> 00:22:26,600 Speaker 1: too high. The fire out estimates are always too high. 399 00:22:26,720 --> 00:22:30,159 Speaker 1: If you go a year into the future, and then 400 00:22:30,200 --> 00:22:31,960 Speaker 1: you know, I think we have twenty five years of 401 00:22:32,240 --> 00:22:35,280 Speaker 1: s S and P estimates going out, and in nine 402 00:22:35,840 --> 00:22:39,320 Speaker 1: of the years the year out estimate is too high 403 00:22:39,320 --> 00:22:42,439 Speaker 1: and is brought down. Uh, it's just the individual annual. 404 00:22:42,440 --> 00:22:44,640 Speaker 1: It is just like you know, they put in ten, twelve, four, 405 00:22:45,440 --> 00:22:47,880 Speaker 1: and then every month it just goes down and down 406 00:22:47,920 --> 00:22:50,159 Speaker 1: and down. The only few times when it goes up, 407 00:22:50,200 --> 00:22:52,720 Speaker 1: as you're at the turning point of a severe recession, 408 00:22:52,960 --> 00:22:55,320 Speaker 1: it surprises you on the upside, and you'll get it. 409 00:22:55,359 --> 00:22:58,000 Speaker 1: You'll get an upside surprise. So, you know, people telling 410 00:22:58,080 --> 00:23:02,359 Speaker 1: me those estimates. Two, why, I'll say, what else is new? 411 00:23:02,840 --> 00:23:05,560 Speaker 1: You know? Do I see a collapse? No? And Jeremy 412 00:23:05,600 --> 00:23:07,879 Speaker 1: mentioned the fact that you know, the first half, the 413 00:23:07,920 --> 00:23:10,720 Speaker 1: first half of this year negative GDP growth and yet 414 00:23:11,000 --> 00:23:14,879 Speaker 1: earnings and when you know that that that really beat 415 00:23:14,960 --> 00:23:17,399 Speaker 1: the second half of last year. I don't know. Well, 416 00:23:17,440 --> 00:23:21,080 Speaker 1: I'm not gonna say never, but you know, two thousand 417 00:23:21,200 --> 00:23:24,200 Speaker 1: twenty one was just unbelievable blockbusters. I mean, you know, 418 00:23:24,320 --> 00:23:28,480 Speaker 1: we were we were over. You're not going to match 419 00:23:29,160 --> 00:23:34,000 Speaker 1: that performance in three I think we'll be happy with 420 00:23:34,080 --> 00:23:39,080 Speaker 1: five six, you know, real growth of earnings UH going forward, 421 00:23:39,520 --> 00:23:42,280 Speaker 1: and that will still produce a return on stocks that 422 00:23:42,320 --> 00:23:46,080 Speaker 1: will far beat fixed income assets, you know, professor. The 423 00:23:46,119 --> 00:23:47,760 Speaker 1: other thing I wanted to ask you about is is 424 00:23:47,840 --> 00:23:52,640 Speaker 1: in recent years, we've seen uh, the growth of retail 425 00:23:52,720 --> 00:23:57,480 Speaker 1: traders as really a a pretty important force in markets. 426 00:23:57,520 --> 00:24:00,359 Speaker 1: You know, the what we call the meme stocks, the 427 00:24:00,359 --> 00:24:02,280 Speaker 1: game stops and the A m c s and the 428 00:24:02,320 --> 00:24:05,280 Speaker 1: bed beth and beyond. Uh. You know, I suppose, at 429 00:24:05,359 --> 00:24:07,840 Speaker 1: least in part to the you know, the elimination of 430 00:24:07,920 --> 00:24:11,080 Speaker 1: commissions on trading UH as as created a more of 431 00:24:11,119 --> 00:24:14,560 Speaker 1: a gambling environment. I'm curious how you're thinking about that. 432 00:24:14,760 --> 00:24:17,000 Speaker 1: If the markets changed forever, do you think is this 433 00:24:17,080 --> 00:24:21,760 Speaker 1: a fad? You know, Well, first of all, you know, 434 00:24:21,840 --> 00:24:24,800 Speaker 1: let's take a mc bead Beth and beyond game stock. 435 00:24:25,560 --> 00:24:28,640 Speaker 1: Their total market value is what one half of one 436 00:24:28,680 --> 00:24:33,240 Speaker 1: percent of stocks or less. Uh, even at a few 437 00:24:33,240 --> 00:24:37,600 Speaker 1: more memes, you're still getting an absolutely infinitesimal part of 438 00:24:37,600 --> 00:24:39,280 Speaker 1: the market. Now, they may look like there's a lot 439 00:24:39,280 --> 00:24:41,640 Speaker 1: of fireworks there, there's a lot of movement. If you're 440 00:24:41,640 --> 00:24:45,359 Speaker 1: into gambling and and you know like like that, fine, 441 00:24:45,520 --> 00:24:47,560 Speaker 1: go to it. And I was asked to meets I 442 00:24:47,600 --> 00:24:50,880 Speaker 1: was a year ago, and I said, uh, somewhat conservatively, 443 00:24:51,080 --> 00:24:54,160 Speaker 1: I do not think they will be rewarding to long 444 00:24:54,320 --> 00:25:00,400 Speaker 1: term investors. Um, I'm going to make the same statement. Uh, 445 00:25:00,440 --> 00:25:05,480 Speaker 1: they're they're gambling vehicles, you know, as more more than 446 00:25:05,960 --> 00:25:09,840 Speaker 1: than anything else. Have they changed? I mean the groups 447 00:25:09,880 --> 00:25:12,920 Speaker 1: that are attracted to that sort of gambling. Of course, 448 00:25:12,960 --> 00:25:15,760 Speaker 1: part of gambling. You can make things more exciting with 449 00:25:15,840 --> 00:25:20,639 Speaker 1: options as as people do. Um. Fine, but you know 450 00:25:20,720 --> 00:25:24,480 Speaker 1: I always recommend to to young people if you want 451 00:25:24,480 --> 00:25:26,760 Speaker 1: to pay with ten or fifteen percent of your portfolio 452 00:25:26,800 --> 00:25:30,240 Speaker 1: in those games, fine, but you know, put the other 453 00:25:30,320 --> 00:25:33,640 Speaker 1: eighty five into uh some sort of an index long 454 00:25:33,760 --> 00:25:37,560 Speaker 1: term fund that will have meaning for you when you 455 00:25:37,840 --> 00:25:45,520 Speaker 1: finally become an adult. If I don't want to diminish 456 00:25:45,560 --> 00:25:48,040 Speaker 1: that when I say finally become an adult, because some 457 00:25:48,080 --> 00:25:50,080 Speaker 1: of these are adults, and by the way, some people 458 00:25:50,119 --> 00:25:52,160 Speaker 1: know how to play these markets. So I don't want 459 00:25:52,160 --> 00:25:54,960 Speaker 1: to have a negative I say, when you become retired 460 00:25:55,560 --> 00:25:59,920 Speaker 1: like I am, Uh, you are an adult in most case. 461 00:26:00,080 --> 00:26:02,320 Speaker 1: Is that I don't know what the minimum age for 462 00:26:02,320 --> 00:26:06,000 Speaker 1: for for actually making a broker joke cowny is. But 463 00:26:07,359 --> 00:26:09,480 Speaker 1: you know, as I said, it's fun to play with 464 00:26:09,520 --> 00:26:12,080 Speaker 1: a portion. Uh, I tell my son to play with 465 00:26:12,119 --> 00:26:14,879 Speaker 1: a portion, but do not make that a big portion 466 00:26:14,920 --> 00:26:18,040 Speaker 1: of new portfolio. And that's you have you know, uh, 467 00:26:18,119 --> 00:26:21,639 Speaker 1: you know, unbelievably access money and uh you can afford 468 00:26:21,640 --> 00:26:24,560 Speaker 1: to lose eight percent of it. So Jeremy, I, I 469 00:26:24,600 --> 00:26:27,359 Speaker 1: guess we should not expect a wisdom Tree meme stock. 470 00:26:30,240 --> 00:26:33,399 Speaker 1: We started with dividends. You know, we did dividen awaiting 471 00:26:33,440 --> 00:26:35,919 Speaker 1: the world sixteen years ago. Um, and it's you know, 472 00:26:35,960 --> 00:26:38,760 Speaker 1: coming back to those original ideas is all. You know, 473 00:26:39,240 --> 00:26:42,600 Speaker 1: those funds are back in focus, high dividends, core dividends 474 00:26:42,680 --> 00:26:45,800 Speaker 1: all around the world, doing very very well across the board. 475 00:26:45,840 --> 00:26:48,840 Speaker 1: I think some of our relative performance numbers is the 476 00:26:48,840 --> 00:26:51,520 Speaker 1: best it's been since we launched the firm is where 477 00:26:51,520 --> 00:26:53,879 Speaker 1: you see those original ideas and very much tied to 478 00:26:53,920 --> 00:26:56,280 Speaker 1: the Professor teal second book, The Future for Investors, which 479 00:26:56,320 --> 00:27:00,080 Speaker 1: all was about high dividend value investing. And we are 480 00:27:00,080 --> 00:27:03,360 Speaker 1: certainly doing more things in thematics UM and there are 481 00:27:03,400 --> 00:27:06,960 Speaker 1: sort of thematics like cybersecurity or or cloud computing, other 482 00:27:06,960 --> 00:27:09,840 Speaker 1: things that we think are good secular growth stories and 483 00:27:09,880 --> 00:27:12,000 Speaker 1: a sort of way to go in after sectors in 484 00:27:12,040 --> 00:27:14,160 Speaker 1: a very different way. But you know, I think what's 485 00:27:14,560 --> 00:27:16,399 Speaker 1: the true has been what's out of fever this year? 486 00:27:16,400 --> 00:27:19,360 Speaker 1: It's all about dividends coming back. And by the way, 487 00:27:19,400 --> 00:27:23,200 Speaker 1: we should mention uh. You know, the new Biden buy 488 00:27:23,240 --> 00:27:27,679 Speaker 1: back tax may do a little bit of a shift 489 00:27:28,119 --> 00:27:31,520 Speaker 1: now towards dividends and away from buy backs. It's not 490 00:27:31,560 --> 00:27:35,080 Speaker 1: a lot, it's a one percent tax, but at the margin, 491 00:27:35,760 --> 00:27:39,280 Speaker 1: we we expect a few firms to now make a 492 00:27:39,280 --> 00:27:42,000 Speaker 1: decision to raise their dividend rather than to buy back 493 00:27:42,080 --> 00:27:45,800 Speaker 1: their shares or to alter the proportion of UH of 494 00:27:45,880 --> 00:28:04,520 Speaker 1: each of those UM returns. Well, Jeremy, maybe you can 495 00:28:04,640 --> 00:28:06,480 Speaker 1: speak a little bit more about this, because I think 496 00:28:06,520 --> 00:28:09,280 Speaker 1: you guys like dividend stocks in this environment, and I 497 00:28:09,280 --> 00:28:11,280 Speaker 1: wanted to ask you what it is that makes them 498 00:28:11,280 --> 00:28:15,879 Speaker 1: so appealing right now, it's we've been talking valuations a 499 00:28:15,880 --> 00:28:18,120 Speaker 1: lot um and I'll just take with dhs that high 500 00:28:18,119 --> 00:28:21,240 Speaker 1: dividend which has been leading performance. It's still on eleven 501 00:28:21,280 --> 00:28:23,600 Speaker 1: times earnings, eleven and twelve times earnings. You're getting eight 502 00:28:23,640 --> 00:28:26,320 Speaker 1: to nine percent earning shields um and you know, the 503 00:28:26,320 --> 00:28:30,119 Speaker 1: professor often says, that's a five percent earnings zield. That's 504 00:28:30,119 --> 00:28:33,880 Speaker 1: your long term real return. Dividends grow with inflation over time. 505 00:28:33,880 --> 00:28:36,120 Speaker 1: You go back seventy years, you know the SNP FIP 506 00:28:36,119 --> 00:28:38,800 Speaker 1: when or dividing growth was two percent on top of inflation. 507 00:28:39,200 --> 00:28:42,040 Speaker 1: And so stocks have been this good long term hedge 508 00:28:42,200 --> 00:28:45,080 Speaker 1: versus inflation. Uh. And you know, so if you can 509 00:28:45,120 --> 00:28:48,560 Speaker 1: get eight to nine percent earning yields and the earnings 510 00:28:48,600 --> 00:28:50,600 Speaker 1: growth on these high didderent stocks, you know usually think 511 00:28:50,640 --> 00:28:53,320 Speaker 1: of growth stocks for for the earning growth. The high 512 00:28:53,320 --> 00:28:56,280 Speaker 1: dividence stocks are actually having higher earnings growth because you know, 513 00:28:56,320 --> 00:28:59,560 Speaker 1: their energy heavy that's the leading sector for earnings growth. 514 00:29:00,040 --> 00:29:01,640 Speaker 1: So I think one of the things that's powering value 515 00:29:01,640 --> 00:29:03,760 Speaker 1: and how duds in particular is that ernie's are going 516 00:29:03,800 --> 00:29:07,880 Speaker 1: faster than the market and faster than growth stocks right now, Professor, 517 00:29:08,640 --> 00:29:11,640 Speaker 1: I was reading, uh an interview you did with our 518 00:29:11,680 --> 00:29:14,880 Speaker 1: colleague Barry Ridholtz a couple of years ago. Um. And 519 00:29:14,920 --> 00:29:17,480 Speaker 1: I know you've always been more of a stocks guy 520 00:29:17,520 --> 00:29:20,040 Speaker 1: than a than a bonds guy. Uh. And back then 521 00:29:20,080 --> 00:29:23,760 Speaker 1: you had said, you know, maybe sixty forty should be seventy. 522 00:29:24,920 --> 00:29:28,000 Speaker 1: These days, I'm curious what you're thinking about that allocation 523 00:29:28,120 --> 00:29:31,000 Speaker 1: mix at this point. You know, Yeah, tender yields of 524 00:29:31,040 --> 00:29:33,640 Speaker 1: all the three percent? Is it? You know, is it 525 00:29:33,720 --> 00:29:38,480 Speaker 1: time to go back to six? Yeah? No, um and 526 00:29:38,480 --> 00:29:40,440 Speaker 1: and yeah, I'm glad you mentioned that. And it's not 527 00:29:40,520 --> 00:29:43,360 Speaker 1: just me, And this is something that actually Wisdom Tree 528 00:29:43,520 --> 00:29:46,080 Speaker 1: and I have been working on even way before the 529 00:29:46,120 --> 00:29:50,960 Speaker 1: pandemic hit. Uh, that yields have dropped so low, and 530 00:29:51,000 --> 00:29:54,360 Speaker 1: we'll talk about what they are right now, that you 531 00:29:54,480 --> 00:29:58,560 Speaker 1: cannot get the type of draws at a retirement portfolio 532 00:29:59,120 --> 00:30:03,320 Speaker 1: a retire ree needs from his or her retirement portfolio 533 00:30:04,040 --> 00:30:07,680 Speaker 1: with a sixty. The yields on bonds and real terms 534 00:30:07,680 --> 00:30:11,800 Speaker 1: are just very are just too small. Maybe the yields 535 00:30:11,800 --> 00:30:14,320 Speaker 1: on stocks and forward looking are going to be a 536 00:30:14,360 --> 00:30:18,920 Speaker 1: little less than historical, but they still way overwhelm what 537 00:30:18,920 --> 00:30:21,520 Speaker 1: what we uh, what we get on bond. Something else 538 00:30:21,560 --> 00:30:26,080 Speaker 1: we discovered is that UM and this was surprising, but 539 00:30:26,280 --> 00:30:29,680 Speaker 1: that for many the drawers of a retirement portfolio, a 540 00:30:29,840 --> 00:30:36,720 Speaker 1: higher percentage in stocks actually minimizes the probability UH lessons 541 00:30:36,760 --> 00:30:39,520 Speaker 1: of probability you're going to run out of money if 542 00:30:39,520 --> 00:30:41,440 Speaker 1: you have a number of bad draws. A lot of 543 00:30:41,440 --> 00:30:44,000 Speaker 1: people don't want to go to seventy say, well, what happens, 544 00:30:44,000 --> 00:30:46,960 Speaker 1: I get a few bad stock market declines? But turns 545 00:30:47,040 --> 00:30:51,080 Speaker 1: out that actually going more towards stocks um and the 546 00:30:51,120 --> 00:30:55,920 Speaker 1: actual income that you earn more than compensate you for 547 00:30:55,960 --> 00:31:01,480 Speaker 1: the increased volatility of stocks during the time of the portfolio. 548 00:31:02,120 --> 00:31:05,960 Speaker 1: So um uh. You know, I strongly believe in moving 549 00:31:06,000 --> 00:31:11,320 Speaker 1: from sixty or eighty twenty. And by the way, I'm 550 00:31:11,320 --> 00:31:13,840 Speaker 1: not impressed. I mean, you know, you know, so the 551 00:31:13,880 --> 00:31:16,680 Speaker 1: ten year is at three ten. Well, if we get 552 00:31:16,680 --> 00:31:20,920 Speaker 1: inflation down to three, that gives you a zero percent return. 553 00:31:21,640 --> 00:31:26,160 Speaker 1: That's not attractive. Right now, returns our negative bond yields 554 00:31:26,280 --> 00:31:31,000 Speaker 1: on all UH maturities are well below ongoing inflation rates. 555 00:31:31,360 --> 00:31:35,640 Speaker 1: So um, yeah, they've moved up. But we we we 556 00:31:35,640 --> 00:31:40,880 Speaker 1: we we We're far off from the world where tips 557 00:31:40,920 --> 00:31:44,560 Speaker 1: were introduced. I don't I remember that because I was 558 00:31:44,640 --> 00:31:49,400 Speaker 1: often interviewed at that time. Um, they were uh introduced, 559 00:31:49,480 --> 00:31:53,720 Speaker 1: I believe in in January of of n at a 560 00:31:53,840 --> 00:31:56,800 Speaker 1: three and a half percent real return that's the ten 561 00:31:56,880 --> 00:32:00,920 Speaker 1: year tips. And they subsequently almost hit four and a 562 00:32:01,000 --> 00:32:06,160 Speaker 1: half percent real return in twenty in two thousand at 563 00:32:05,840 --> 00:32:09,600 Speaker 1: the peak of the technology bubble. So, uh, you know 564 00:32:09,760 --> 00:32:13,680 Speaker 1: right now, and and they're uh, they're point force zero 565 00:32:13,720 --> 00:32:17,640 Speaker 1: point four seven so and uh, you know, at the 566 00:32:17,720 --> 00:32:20,240 Speaker 1: beginning of the year there were minus one. So we 567 00:32:20,320 --> 00:32:23,360 Speaker 1: live in a very different world. Real returns on fixed 568 00:32:23,360 --> 00:32:27,480 Speaker 1: income assets have dropped precipitously, and I do not believe 569 00:32:28,040 --> 00:32:30,680 Speaker 1: they are anywhere going back to the old levels that 570 00:32:30,720 --> 00:32:33,760 Speaker 1: they had achieved. You don't you don't see any scenario 571 00:32:33,880 --> 00:32:38,720 Speaker 1: with sort of positive real returns in the near future. Well, 572 00:32:39,040 --> 00:32:44,440 Speaker 1: our our minimal positive, minimal, zero, No, nothing that I 573 00:32:44,440 --> 00:32:47,600 Speaker 1: I see, I mean, I you know, I mean obviously 574 00:32:48,000 --> 00:32:50,520 Speaker 1: the long bottle fluctuate you if you have if bonos 575 00:32:50,560 --> 00:32:53,120 Speaker 1: go down, you get a nice capital gain, But as 576 00:32:53,160 --> 00:32:57,320 Speaker 1: a buy and hold instrument, it's basically a zero or 577 00:32:57,440 --> 00:33:03,520 Speaker 1: less real return investment. And Professor, the podcast is coming 578 00:33:03,520 --> 00:33:07,160 Speaker 1: out just a few hours before we hear from the 579 00:33:07,160 --> 00:33:09,720 Speaker 1: FED from pow at Jackson Hole. So I don't want 580 00:33:09,720 --> 00:33:12,400 Speaker 1: to ask you about what specifically you're expecting from that, 581 00:33:12,480 --> 00:33:14,760 Speaker 1: but maybe I can ask you just well, and I 582 00:33:14,840 --> 00:33:17,840 Speaker 1: heard this question on on from John Farrell and Bloomberg TV. 583 00:33:17,920 --> 00:33:20,520 Speaker 1: Just to give credit, but he's been asking people, what 584 00:33:20,520 --> 00:33:23,960 Speaker 1: are your worries and your hopes and your wishes for 585 00:33:24,800 --> 00:33:28,560 Speaker 1: from the Fed? Well, this is what that's a very 586 00:33:28,560 --> 00:33:31,920 Speaker 1: good question. Well, Donald, this is this is what I 587 00:33:32,000 --> 00:33:37,240 Speaker 1: hope for. I would hope. I don't think, um that 588 00:33:37,320 --> 00:33:39,840 Speaker 1: pau is gonna say fifty or seventy five. First of all, 589 00:33:39,840 --> 00:33:41,720 Speaker 1: we've got a lot of data coming before now in 590 00:33:41,800 --> 00:33:44,640 Speaker 1: the end and meet at the meeting. Uh, you know, uh, 591 00:33:44,680 --> 00:33:48,680 Speaker 1: in late September, we got another several price reports, another 592 00:33:48,680 --> 00:33:56,120 Speaker 1: employment report, etcetera. What what my hope is that he says, uh, 593 00:33:56,560 --> 00:33:58,160 Speaker 1: many of the things I said at the beginning of 594 00:33:58,160 --> 00:34:03,200 Speaker 1: this podcast, and that is, although we we will continue 595 00:34:03,200 --> 00:34:08,319 Speaker 1: to see higher inflation in the official statistics, we are 596 00:34:08,400 --> 00:34:13,880 Speaker 1: seeing lower inflation on the ground in the sensitive commanding markets, 597 00:34:14,480 --> 00:34:17,160 Speaker 1: in the housing market, in the in the even in 598 00:34:17,200 --> 00:34:20,960 Speaker 1: the freight market. Uh, in the cargo markets, uh, and 599 00:34:21,080 --> 00:34:26,400 Speaker 1: that is giving us uh hope that we could be uh, 600 00:34:26,719 --> 00:34:29,120 Speaker 1: you know, much nearer to the end of this tightening 601 00:34:29,160 --> 00:34:32,520 Speaker 1: cycle than the beginning of this tightening cycle. To me, 602 00:34:33,280 --> 00:34:37,200 Speaker 1: such a statement would spark a huge rally in the 603 00:34:37,200 --> 00:34:41,080 Speaker 1: equity markets. I don't expect him to make exactly that statement, 604 00:34:41,120 --> 00:34:44,080 Speaker 1: but if he gives iNTS in that direction. Uh. If 605 00:34:44,280 --> 00:34:47,320 Speaker 1: on the other hand, he says, the situation is getting 606 00:34:47,360 --> 00:34:51,400 Speaker 1: worse and we won't uh you know, stopped right raising 607 00:34:51,480 --> 00:34:54,000 Speaker 1: rates until we see the you know, the c euro 608 00:34:54,000 --> 00:34:55,840 Speaker 1: over year cb I go down to two or to 609 00:34:55,960 --> 00:35:00,880 Speaker 1: an app percent, So that's a way overweight. Howckey, that'll 610 00:35:00,920 --> 00:35:05,240 Speaker 1: be a big negative for the market. Professor Jeremy Siegal 611 00:35:05,360 --> 00:35:08,719 Speaker 1: and Jeremy Schwartz of Wisdom Trees really appreciate your time. 612 00:35:08,880 --> 00:35:10,799 Speaker 1: Is great to get your insights. We're not gonna let 613 00:35:10,840 --> 00:35:13,040 Speaker 1: you go so we hear the craziest things you've seen 614 00:35:13,040 --> 00:35:15,719 Speaker 1: in markets, uh this past week. But Professor I have 615 00:35:15,760 --> 00:35:19,400 Speaker 1: to ask you hypothetically, if you're walking around Penn's campus 616 00:35:19,640 --> 00:35:22,080 Speaker 1: and you come upon the father of a brand new 617 00:35:22,160 --> 00:35:25,080 Speaker 1: freshman and he looks like he's pretty stressed out, and 618 00:35:25,360 --> 00:35:33,640 Speaker 1: what advice would you have for him? Uh? Calm down. Yeah, 619 00:35:33,840 --> 00:35:38,360 Speaker 1: you know, the freshman year is a little stressful for everybody. However, 620 00:35:39,120 --> 00:35:40,840 Speaker 1: you know, you know, I think they're gonna get through it. 621 00:35:40,840 --> 00:35:43,680 Speaker 1: And certainly on the Penn's campus, they're treated really well 622 00:35:44,080 --> 00:35:46,279 Speaker 1: and they're gonna love it, and there's gonna be a 623 00:35:46,280 --> 00:35:48,080 Speaker 1: good four years for them and a good four years 624 00:35:48,120 --> 00:35:50,360 Speaker 1: for you. And uh and now you're gonna have some 625 00:35:50,480 --> 00:35:53,200 Speaker 1: vacation from your your children, maybe more free time for you. 626 00:35:53,920 --> 00:35:55,880 Speaker 1: We'll be down the road in Maryland. But I assume 627 00:35:55,960 --> 00:35:58,120 Speaker 1: it's okay as a dad to call if your kid 628 00:35:58,160 --> 00:36:00,960 Speaker 1: gets a bid, to call the professor and and complain. Right, 629 00:36:01,040 --> 00:36:04,640 Speaker 1: is that is that? Is that okay? Well? I would 630 00:36:04,800 --> 00:36:06,839 Speaker 1: the progressions say, well, you take this example and see 631 00:36:06,840 --> 00:36:12,480 Speaker 1: how you do. Forget that if you get an I'll 632 00:36:12,480 --> 00:36:18,359 Speaker 1: give her a name. That chance of that, I don't know. 633 00:36:19,640 --> 00:36:23,200 Speaker 1: She has an economics major, though, so we'll see the 634 00:36:23,280 --> 00:36:26,400 Speaker 1: dismal science. But with that, I think it's time for 635 00:36:26,400 --> 00:36:29,120 Speaker 1: our crazy things, Bill Donna, what do you think? Can 636 00:36:29,160 --> 00:36:31,640 Speaker 1: I say the summer has been a little bit, you know, 637 00:36:31,880 --> 00:36:33,440 Speaker 1: there's been like a little bit of a lull with 638 00:36:33,480 --> 00:36:37,320 Speaker 1: crazy things or no, I had trouble finding one hasn't 639 00:36:37,360 --> 00:36:40,000 Speaker 1: been as crazy, I agree, which is maybe a good thing. 640 00:36:40,080 --> 00:36:42,600 Speaker 1: Maybe we should count our blessing blessings about that. I 641 00:36:42,920 --> 00:36:45,799 Speaker 1: did get a few, uh, but it sounds like you're 642 00:36:45,800 --> 00:36:48,319 Speaker 1: lowering expectations a little bit. I am a little bit. 643 00:36:48,440 --> 00:36:51,120 Speaker 1: I am. I did get a few. You know, a 644 00:36:51,160 --> 00:36:53,759 Speaker 1: few listeners had sent some things in via Twitter, which 645 00:36:53,760 --> 00:36:58,239 Speaker 1: I always want to encourage. But mine is about a 646 00:36:58,280 --> 00:37:01,360 Speaker 1: Warren Buffet auction. He's auction a signed portrait of himself. 647 00:37:01,440 --> 00:37:04,680 Speaker 1: It's of course going to charity, and the bidding has 648 00:37:04,719 --> 00:37:07,960 Speaker 1: already topped thirty dollars, so I was thinking, Okay, I 649 00:37:08,000 --> 00:37:11,799 Speaker 1: mean that's pretty good. However, it pales in comparison to 650 00:37:12,280 --> 00:37:15,319 Speaker 1: I think somebody paying nineteen million dollars earlier this year 651 00:37:15,440 --> 00:37:18,000 Speaker 1: just to have a private lunch with him. Yeah, it 652 00:37:18,120 --> 00:37:20,919 Speaker 1: was his last private lunch. I mean, he's been doing 653 00:37:20,960 --> 00:37:23,680 Speaker 1: this for like thirty years, and he announced that was 654 00:37:23,719 --> 00:37:26,960 Speaker 1: the last one, and then the price skyrocketed, you know, 655 00:37:27,160 --> 00:37:35,400 Speaker 1: scarce resource all the way he's turning. So there's a 656 00:37:35,480 --> 00:37:39,800 Speaker 1: theme there. It's the experience economy versus the hard asset economy. 657 00:37:39,840 --> 00:37:41,640 Speaker 1: I guess a lunch with Buffett is worth a lot 658 00:37:41,680 --> 00:37:44,880 Speaker 1: more than a painting of them. Yeah, well it's something 659 00:37:44,920 --> 00:37:48,000 Speaker 1: that you could, you know, tell your friends and children 660 00:37:48,080 --> 00:37:53,320 Speaker 1: about for years, uh into the future. I mean Buffett 661 00:37:53,520 --> 00:37:57,080 Speaker 1: is Buffett is in his nineties. Am I correct? He's 662 00:37:57,120 --> 00:38:01,520 Speaker 1: turning nine two on August thirty one, ninety two. Wow. 663 00:38:01,719 --> 00:38:04,800 Speaker 1: Let me say if i'm I will be very thankful 664 00:38:04,840 --> 00:38:08,759 Speaker 1: if I'm as sharp as Warren he has had ninety two, 665 00:38:09,000 --> 00:38:11,719 Speaker 1: I have a feeling you will be, and I thank you. 666 00:38:11,760 --> 00:38:13,759 Speaker 1: I hope picks up the tab on that launch, at 667 00:38:13,800 --> 00:38:20,239 Speaker 1: least for that price they went to McDonald's. How about 668 00:38:20,239 --> 00:38:24,640 Speaker 1: you two? Have you seen anything crazy uh in markets recently? Professor? 669 00:38:26,040 --> 00:38:28,120 Speaker 1: I mean, you know, the meme is always fun, as 670 00:38:28,120 --> 00:38:32,000 Speaker 1: you say, those meme stops are always fun to watch. 671 00:38:32,960 --> 00:38:37,359 Speaker 1: Ellen Musk is always fun to watch, isn't he? I mean, 672 00:38:37,520 --> 00:38:40,120 Speaker 1: and what's going on with Twitter? It's a side show 673 00:38:40,160 --> 00:38:43,440 Speaker 1: in many ways, you know. But I mean, uh, I 674 00:38:43,520 --> 00:38:45,719 Speaker 1: kind of I'll kind of watch that. You know, my 675 00:38:45,760 --> 00:38:48,319 Speaker 1: son owns a Tesla and so you know, I kind 676 00:38:48,320 --> 00:38:51,360 Speaker 1: of see what's happening to that stock. You know, what 677 00:38:51,480 --> 00:38:56,239 Speaker 1: is he gonna step into next? Um? I'll tell you though, 678 00:38:56,239 --> 00:38:59,200 Speaker 1: I wouldn't mind taking some of the steps he's made 679 00:38:59,600 --> 00:39:05,759 Speaker 1: I'm not diminishing he's quite an entrepreneur. Yeah, absolutely, absolutely, 680 00:39:05,840 --> 00:39:07,959 Speaker 1: How about you, Jeremy, you say anything crazy this week? 681 00:39:09,000 --> 00:39:11,480 Speaker 1: If I took one on a more serious note, you know, 682 00:39:11,520 --> 00:39:14,480 Speaker 1: the the European natural gas prices, the g t F 683 00:39:14,600 --> 00:39:18,799 Speaker 1: DUSH prices hitting over three hundred per megawatt hour, and 684 00:39:18,960 --> 00:39:23,040 Speaker 1: I was in Main last week and talking with a 685 00:39:23,040 --> 00:39:26,120 Speaker 1: bunch of economists and macro people, and some of the 686 00:39:26,160 --> 00:39:30,160 Speaker 1: discussion from the Texans and crew. The people are energy economists. 687 00:39:30,360 --> 00:39:34,400 Speaker 1: We're talking about how they could see a convergence between 688 00:39:34,520 --> 00:39:37,440 Speaker 1: US natural gas prices and European natural gas prices as 689 00:39:37,520 --> 00:39:40,880 Speaker 1: as US becomes sort of marginal supplier and the pricings 690 00:39:41,000 --> 00:39:44,160 Speaker 1: come together. So that's sort of a scary thought of 691 00:39:44,320 --> 00:39:46,760 Speaker 1: like what's going on with what's going on in Europe 692 00:39:46,800 --> 00:39:49,960 Speaker 1: feeding into the to US. Absolutely, What do you guys 693 00:39:50,040 --> 00:39:52,960 Speaker 1: think is uh, it seems like a recession is inevitable 694 00:39:52,960 --> 00:39:56,560 Speaker 1: in Europe with that type of energy problem. Professor, you think, yeah, 695 00:39:56,680 --> 00:40:00,040 Speaker 1: it's and and it's a supply side, severe supply I 696 00:40:00,840 --> 00:40:05,200 Speaker 1: induced one that seems even more severe, uh than what 697 00:40:05,480 --> 00:40:08,480 Speaker 1: you know OPEC imposed on the world back in the 698 00:40:08,560 --> 00:40:12,319 Speaker 1: nine seventies, not for US but for Europe. Yeah, and 699 00:40:12,400 --> 00:40:14,399 Speaker 1: it hasn't even gotten cold yet. In the fall and winter, 700 00:40:14,440 --> 00:40:17,560 Speaker 1: it's gonna be now, you know, potentially worst center recession, 701 00:40:17,680 --> 00:40:22,319 Speaker 1: a humanitarian crisis perhaps, which is a scary thought. All right, 702 00:40:22,360 --> 00:40:25,200 Speaker 1: we'll get us back onto the lighthearted stuff filledatta did 703 00:40:25,280 --> 00:40:28,080 Speaker 1: you you might not be the appropriate age to have 704 00:40:28,160 --> 00:40:31,760 Speaker 1: seen the Disney movie Cars? Did you see? I've seen Cars? 705 00:40:32,080 --> 00:40:35,879 Speaker 1: Isn't Lindsay Lohan one of the voices? I think that's true. 706 00:40:36,000 --> 00:40:38,279 Speaker 1: I think that's true. And as a matter of fact, 707 00:40:38,360 --> 00:40:41,280 Speaker 1: a good movie does she play? I think she plays 708 00:40:41,320 --> 00:40:45,920 Speaker 1: the character Sally Carrera in that movie, which is a 709 00:40:45,960 --> 00:40:50,960 Speaker 1: cartoon Porsche Porsche nine oleven. So get this, So someone 710 00:40:51,120 --> 00:40:57,000 Speaker 1: built a roadworthy replica of that car? Uh and Sol 711 00:40:57,000 --> 00:40:59,640 Speaker 1: did at auction, of course, because because that's what you do. 712 00:41:00,440 --> 00:41:05,120 Speaker 1: So an actual, real life version of Sally Carrera from 713 00:41:05,200 --> 00:41:10,319 Speaker 1: the Cars movie sold at auction, and it's time to 714 00:41:10,360 --> 00:41:13,480 Speaker 1: play the prices precise I regret some form. You guys, 715 00:41:14,080 --> 00:41:17,279 Speaker 1: you're now contestants on a game show and you need 716 00:41:17,320 --> 00:41:21,960 Speaker 1: to guess what the real life version of the cartoon 717 00:41:22,520 --> 00:41:26,600 Speaker 1: cars Porsche sold for. And Valdada has to go first. 718 00:41:26,640 --> 00:41:30,200 Speaker 1: What do you think fildada. So we're we're playing prices 719 00:41:30,320 --> 00:41:34,279 Speaker 1: correct right, prices precise. I think I'm gonna stick with 720 00:41:34,360 --> 00:41:44,000 Speaker 1: correct all. I'll go with toft. How about you, Jeremy, 721 00:41:44,600 --> 00:41:46,200 Speaker 1: I was going to multiply that by at least ten 722 00:41:46,320 --> 00:41:53,319 Speaker 1: to like probably like three million. I'm I'm I'm going 723 00:41:53,360 --> 00:41:56,360 Speaker 1: to be between the two. I'm gonna say one five 724 00:41:57,040 --> 00:42:00,320 Speaker 1: all right, And this is why he's chief investment officer. 725 00:42:00,400 --> 00:42:05,120 Speaker 1: Jeremy three points what do six? Three point six? Can 726 00:42:05,160 --> 00:42:09,279 Speaker 1: you believe that? Wow, Jeremy, there's no way three point 727 00:42:09,320 --> 00:42:13,320 Speaker 1: six that's that's that's a current car. It's to fifty. 728 00:42:13,360 --> 00:42:17,160 Speaker 1: I mean that's yea, I know, but how many fans 729 00:42:17,200 --> 00:42:19,760 Speaker 1: are there? It's not it's not one of Disney's most popular, 730 00:42:20,320 --> 00:42:23,520 Speaker 1: but it doesn't matter. Someone saw it and yeah, yeah, 731 00:42:23,760 --> 00:42:30,080 Speaker 1: that's inflation. And with that, I think that is all 732 00:42:30,080 --> 00:42:33,759 Speaker 1: our time. Jeremy Siegel, Jeremy Schwartz, really appreciate your time, 733 00:42:33,800 --> 00:42:35,319 Speaker 1: and I hope, I hope we can do it again 734 00:42:35,360 --> 00:42:40,719 Speaker 1: some day. Absolutely, Thanks Mike, Thanks thanks for coming on. 735 00:42:48,840 --> 00:42:50,920 Speaker 1: What Goes Up will be back next week and so 736 00:42:51,000 --> 00:42:53,280 Speaker 1: then you can find us on the Bloomberg Terminal website 737 00:42:53,320 --> 00:42:56,719 Speaker 1: and app or wherever you get your podcast. We love 738 00:42:56,760 --> 00:42:58,520 Speaker 1: it if you took the time to rate and review 739 00:42:58,560 --> 00:43:01,600 Speaker 1: the show on Apple podcast so more listeners can find us. 740 00:43:02,200 --> 00:43:04,399 Speaker 1: And you can find us on Twitter, follow me at 741 00:43:04,440 --> 00:43:09,000 Speaker 1: break Anonymous. Goldonna Hierarch is at Bldonna Hierarch. You can 742 00:43:09,000 --> 00:43:13,640 Speaker 1: also follow Bloomberg Podcasts at podcasts. What Goes Up is 743 00:43:13,680 --> 00:43:16,400 Speaker 1: produced by Stacy Won. Thanks for listening. To see you 744 00:43:16,440 --> 00:43:16,839 Speaker 1: next time.