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Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast.

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Speaker 1: My name is Mike Reagan. I'm a senior editor at Bloomberg.

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Speaker 2: And Umbildana Hi Across Asset reported with Bloomberg and this

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Speaker 2: week on the show.

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Speaker 1: Well, we've heard it a million times this year from

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Speaker 1: strategists and fund managers and pretty much everyone else. Don't

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Speaker 1: trust this rally in stocks that has pushed the S

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Speaker 1: and P five hundred up more than eight percent year

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Speaker 1: to date at its highs. Well, finally, this week we

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Speaker 1: saw a bit of a dip following a really slow

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Speaker 1: grind higher for more than a month following March's regional

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Speaker 1: bank drama. So what should we make of that? Is

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Speaker 1: it time to once again buy the dip or is

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Speaker 1: this the start of a serious correction that so many

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Speaker 1: have warned us about? And if that's the case, what

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Speaker 1: are the best areas of the market to hide out

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Speaker 1: in until the coast is clear. We'll get into it

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Speaker 1: all with the chief investment officer of equity strategies at

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Speaker 1: a major investment firm. But first of Filbata, you know,

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Speaker 1: I think people that listen to this podcast assume we're

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Speaker 1: all sitting around a table together or something like that.

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Speaker 1: But you've actually fled, You've fled the state I did.

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Speaker 2: Yeah, I mean typically we are sitting around a table together.

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Speaker 1: Yeah.

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Speaker 2: True, which is which can be fun. It has its downsides, too, well,

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Speaker 2: tell tell us why you fled. It might have had

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Speaker 2: something to do with you. Now, I'm kidding. It's I'm

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Speaker 2: in Chicago for the annual morning Star Investment Conference. I'm

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Speaker 2: having so much fun.

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Speaker 1: Yeah, what's so? What's so fun about morning Star?

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Speaker 2: I'm at the well today, I'm at the Bloomberg office

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Speaker 2: because we have a wonderful office here and it's on

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Speaker 2: the forty nine floor and has really nice views. But

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Speaker 2: I get, I don't know, scared, I get some sort

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Speaker 2: of fright as soon as I approach one of the

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Speaker 2: windows to look out, because you look down and it's

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Speaker 2: so it's just so scary to me. But the views

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Speaker 2: from further away are nice.

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Speaker 1: That's too high for me.

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Speaker 2: Forty nine forty nine, Yeah, entirely wild, too high. But

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Speaker 2: the conference is really nice too. It faces the lake,

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Speaker 2: which is beautiful and the waters are green, and then

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Speaker 2: another side of the conference center faces the Chicago skyline.

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Speaker 1: It's very nice.

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Speaker 2: Yeah, my views this week are really nice.

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Speaker 1: You're You're never coming back, are you?

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Speaker 2: Nah? Actually our guests used to live here as well,

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Speaker 2: even though she's in New York City now, but I

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Speaker 2: do want to introduce her. It's Quay Win, CIO of

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Speaker 2: Equities at Research Affiliates. Quay, I'm so happy you could

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Speaker 2: join us. Welcome to the show.

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Speaker 3: Thank you very much, happy to be here.

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Speaker 2: Maybe we can start with a bit of your background

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Speaker 2: and how you ended up at Research Affiliates.

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Speaker 3: I really started out my career right out of college

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Speaker 3: in quantitative research at Barra, which is now part of MSCI,

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Speaker 3: and that was really my introduction to finance. I had

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Speaker 3: actually studied math in college, you know, like a lot

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Speaker 3: of college students, I didn't know what I could do

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Speaker 3: or wanted to do, and bar gave me the opportunity

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Speaker 3: to learn something new, apply math to an area that

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Speaker 3: I'd never really looked at before, and it really stuck.

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Speaker 3: And so from there I made my way into the

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Speaker 3: asset management world at stag Street Globe Advisors, then Morgan

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Speaker 3: Stanley Investment Management, and then finally at Numeric and Investors,

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Speaker 3: which is now part of Man Group. During that time,

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Speaker 3: I had my first child and one of the things

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Speaker 3: I realized was that being a new parent trading and

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Speaker 3: being active in the markets. Trading in the markets was

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Speaker 3: not exactly easy, and I really lucked out because a

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Speaker 3: former client of mine for my Morgan Stanley days had

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Speaker 3: become chief investment officer at University of Chicago's endowment and

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Speaker 3: he contacted me, said he was expanding his team, and

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Speaker 3: one thing led to another, went through a formal search,

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Speaker 3: but ultimately it gave me the opportunity to do investing

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Speaker 3: from the other side of the table as an asset owner,

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Speaker 3: not just as an asset manager, and gave me a

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Speaker 3: whole new perspective on what it is that investors need,

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Speaker 3: what they want, and what they're trying to achieve. With that,

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Speaker 3: I stayed on the asset owner side for about ten years,

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Speaker 3: and when I was finally ready to go back into

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Speaker 3: asset management, I contacted several people I knew, some of

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Speaker 3: whom were at research affiliates. Chris Brightman and Rob are

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Speaker 3: Not were people that I'd known in the industry for

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Speaker 3: a number of years, and it was a small firm.

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Speaker 3: It was the kind of thing that I really wanted

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Speaker 3: to join. It was quantitative investing, but with really a

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Speaker 3: fundamental twist to it. And also one of the things

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Speaker 3: that Research Affiliates really stands for is value investing. And

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Speaker 3: one of the things that I saw a few years

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Speaker 3: ago was the large gap between value and growth stocks,

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Speaker 3: something that had never really been seen before and something

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Speaker 3: that I felt could not be sustained and that there

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Speaker 3: would be a quick snap back towards value and that

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Speaker 3: value would likely see a renaissance over the next few years.

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Speaker 3: So with that opportunity in mind, I joined Research Affiliates.

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Speaker 1: Great Quai, I'd love to just get into sort of

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Speaker 1: how you're thinking about the market over call it the

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Speaker 1: last five or six weeks, you know, because early mid

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Speaker 1: March we started to see the problems with the Bank's

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Speaker 1: Silicon Valley Bank, collapsed, Signature Bank, Silver Core Capital, First Republic.

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Speaker 1: We started looking weak and has been hanging on. But

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Speaker 1: you know, at the time, it really felt like, well,

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Speaker 1: this is it. The Fed's tightening campaign. Finally quote unquote

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Speaker 1: broke something, you know, and here we'll get this sort

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Speaker 1: of cathartic final leg lower inequities that so many people

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Speaker 1: have been bracing for. But it didn't turn out that way. Obviously,

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Speaker 1: the FED reacted very quickly the FDIIC reacted, a lot

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Speaker 1: of liquidity added to this system. We saw the market

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Speaker 1: rebound at least from the index level. A lot of

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Speaker 1: the regional banks are still struggling, obviously their share prices,

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Speaker 1: but now again First republics back in focus this week,

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Speaker 1: it does feel like we're rolling over a little bit

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Speaker 1: in the s and P. Five hundred. So I'm just curious,

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Speaker 1: you know, how you've thought about this whole episode in

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Speaker 1: the last five or six weeks. Did it make sense

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Speaker 1: to you? You know, was it all about the liquidity

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Speaker 1: sort of? Let us just pick your brain about what

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Speaker 1: we just witnessed over the last six weeks.

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Speaker 3: Yeah, So when the banking crisis first emerged, the thing

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Speaker 3: that I really thought about was how bad is this

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Speaker 3: going to get? Is it going to be like the

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Speaker 3: Great Financial Crisis? How is it going to be? And

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Speaker 3: I think that we're in a much better place than

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Speaker 3: we were in two thousand and seven, two thousand and eight.

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Speaker 3: Banks in general, you know, with a few exceptions, are

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Speaker 3: in a much stronger place. That being said, you know,

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Speaker 3: when the FED raises rates and it breaks something that

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Speaker 3: something doesn't usually just it rarely happens that it's a

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Speaker 3: very small break. Usually it's a very big break. And

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Speaker 3: so while I'd never thought that we would get to

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Speaker 3: a great financial crisis level of a breakdown, I did

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Speaker 3: believe and I still believe that there would be more

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Speaker 3: things that break that came along, whether that continue to

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Speaker 3: be in the small regional banks or whether that bled

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Speaker 3: over to something else such as real estate lending, private credit. Definitely,

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Speaker 3: I think those dangers still remain out there.

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Speaker 2: And can you talk about what you actually foresee for

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Speaker 2: the economy, because for me being at the conference this

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Speaker 2: week and hearing the morning Star economists talk about what

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Speaker 2: they're projecting, they're actually foreseeing a soft landing, but in

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Speaker 2: your view, you're saying that that may be a bit

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Speaker 2: of an optimistic projection. So can you give us your

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Speaker 2: outlook and how you're seeing things evolving with the economy.

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Speaker 3: Sure, I mean, I guess I'm biased because I started

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Speaker 3: in this industry in the early nineties, and every single

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Speaker 3: cycle that comes through, everybody says we're going to have

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Speaker 3: a soft land They're going to have a soft land

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Speaker 3: We're going to have a soft landing. And I don't

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Speaker 3: really know what a soft landing is, because no landing

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Speaker 3: that I've ever experienced, has ever really felt soft, and

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Speaker 3: so I'm not really sure what that really means. There's

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Speaker 3: always going to be something that breaks a little bit

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Speaker 3: worse than you expect. It's very, very difficult to engineer

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Speaker 3: that soft landing, and so I don't see, you know,

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Speaker 3: why a soft landing is what people call for when

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Speaker 3: we hardly ever achieve it. Perhaps they have achieved it

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Speaker 3: before when I was a child, but certainly, you know,

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Speaker 3: not since I've been in this industry. And at the

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Speaker 3: same time, one of the things I would say is

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Speaker 3: that we are also not just seeing a withdrawal of

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Speaker 3: monetary support, but we're also seeing a withdrawal of fiscal support.

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Speaker 3: Things that we're seeing such as extra snap benefits coming

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Speaker 3: to an end, also the likelihood that student loan forgiveness

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Speaker 3: is not going to happen and that people will have

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Speaker 3: to start paying those loans again. All of these small,

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Speaker 3: piecemeal withdrawal of fiscal support will make everything a little

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Speaker 3: bit more tricky as well, because the consumer, it really

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Speaker 3: is seventy percent of the US economy, and we really

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Speaker 3: can't have a soft landing without having the consumer remain

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Speaker 3: somewhat comfortable. And then you know, we're now beginning to

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Speaker 3: see job losses spill over. At first it was just technology,

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Speaker 3: then small pieces of the financial services industry, and now

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Speaker 3: we're being to see other firms start laying off people Disney,

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Speaker 3: for example, and then also additional rounds of job losses

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Speaker 3: within technology continue to roll on. So, having said that,

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Speaker 3: though you know, the question is this happens in the economy,

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Speaker 3: We have economic cycles. It happens all the time. How

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Speaker 3: should we think about it in the equity markets? It's

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Speaker 3: really not unusual for equity markets to already bottomed by

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Speaker 3: the time we know that we're in a recession, or

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Speaker 3: by the time that the recession comes around. We already

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Speaker 3: had a big draw down last year twenty percent in

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Speaker 3: the SMP. I think Pete de trough last year. I

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Speaker 3: think it was down almost as much as twenty five percent.

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Speaker 3: That's a normal level of decline for equities preceding a recession.

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Speaker 3: And so this year, as equities meander around, it could

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Speaker 3: be that regardless of how soft or hard the landing is,

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Speaker 3: we've already seen the worst of what there is to come,

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Speaker 3: what there is to be in the equity markets overall.

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Speaker 2: And can you talk about when you're for seeing this

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Speaker 2: because another part of the discussion at the conference was

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Speaker 2: that potentially we could even be in a recession right now.

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Speaker 2: Is that what you're seeing or is it something down

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Speaker 2: the line.

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Speaker 3: Oh, I definitely think that we could already be in

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Speaker 3: the beginning stages of recession right now. You know, typically

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Speaker 3: we don't know that we're in a recession until six

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Speaker 3: months after started. By the time that we know that

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Speaker 3: we're in a recession, we may already be in recovery.

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Speaker 1: You know. I think if you look at the short

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Speaker 1: term interest rate market, people are basically pricing in as

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Speaker 1: many as two rate cuts by the end of the

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Speaker 1: year from the FED, which you know, leads me to

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Speaker 1: believe a lot of people are agree with you that

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Speaker 1: a soft landing is going to be pretty hard, if

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Speaker 1: not impossible, in this occasion, and that the FED is

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Speaker 1: going to have to react to prop up the economy

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Speaker 1: by the end of the year. But one thing I

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Speaker 1: wonder is if it's possible that we're looking at something

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Speaker 1: in between, like a stagflationary environment where growth does slow,

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Speaker 1: maybe it doesn't go deeply negative for a full blown recession,

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Speaker 1: but that we still regardless of that, don't tame this

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Speaker 1: inflation problem to the satisfaction of the FED, so that

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Speaker 1: that pricing for rate cuts later in the years is mispriced,

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Speaker 1: and that even if the Fed's done hiking, that they're

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Speaker 1: going to hold at those this higher level for a

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Speaker 1: longer period.

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Speaker 3: Is that a.

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Speaker 1: Possibility in your mind? You know, something between you know,

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Speaker 1: a heart and soft landing, more of a stagflation type

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Speaker 1: of environment, you.

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Speaker 3: Know, I wouldn't call a stack plation somewhere between a

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Speaker 3: hard and soft landing. I would say stagflation is sort of,

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Speaker 3: you know, a fork in the road where we fork

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Speaker 3: into something that weird, you know, that we just haven't

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Speaker 3: seen in a really, really long time. I definitely think

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Speaker 3: the stag plation is a possibility. I thought the stag

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Speaker 3: plation was a possibility for a while. Two rate cuts

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Speaker 3: by the end of the year. I wouldn't be surprised

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Speaker 3: if the FED started to accommodate. Depending on how hard

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Speaker 3: the landing is, how quickly the job losses mount, how

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Speaker 3: how quickly spending slows. You know, member of the FED

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Speaker 3: has a dual mandate both price stability and full employment,

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Speaker 3: and they are at odds with each other, and the

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Speaker 3: FED has to has to ride that balance. So depending

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Speaker 3: on how the numbers evolve through the end of the year,

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Speaker 3: two rate cuts are are still a possibility. But at

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Speaker 3: the same time, one of the things that we are

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Speaker 3: seeing is that inflations come down. It's come down significantly,

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Speaker 3: you know, I think it peeked out at over eight percent.

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Speaker 3: It's now running above four, right below five. If the

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Speaker 3: Fed does cut through the end of the year, we're

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Speaker 3: not going to get back to that two percent goal

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Speaker 3: that they have. If they do cut, it will be

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Speaker 3: because the underlying economic fundamentals aside from inflation, require that,

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Speaker 3: and so as they accommodate, it wouldn't be surprising to

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Speaker 3: see inflation go back up, and therefore the FED is

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Speaker 3: going to either have to hold at a higher level

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Speaker 3: or resume hiking, right which could send us into you know,

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Speaker 3: the classic double dip, which is what had to happen

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Speaker 3: before inflation was finally tamed in the early eighties.

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Speaker 2: And so where do you see inflation topping out? Is

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Speaker 2: it still above four percent?

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Speaker 3: Yes? I do think that if the FED has to

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Speaker 3: ease through the end of the year, I think inflation

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Speaker 3: is going to stay above four percent in this intermediate cycle.

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Speaker 3: I think ultimately, the FED will succeed in getting it

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Speaker 3: back down to two percent. It's just that what we're

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Speaker 3: going to have to do to get there could be

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Speaker 3: either very very arduous in the short term or less

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Speaker 3: arduous but spread out over a longer cycle.

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Speaker 1: So how would you break it down as far as

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Speaker 1: what are the areas of the stock market that are

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Speaker 1: most attractive right now given sort of all these uncertainties

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Speaker 1: and this very real chance of a hard landing. I

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Speaker 1: know you focus exclusively on equities, so I want to

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Speaker 1: ask you about actual portfolio allocation unless you want to

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Speaker 1: get into that. You know, it is an interesting time

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Speaker 1: for you know, cross asset allocations, with money market funds

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Speaker 1: finally offering a real yield, even bank savings accounts offering

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Speaker 1: in some cases above four percent. But you know, how

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Speaker 1: are you thinking about allocation within equities and within the

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Speaker 1: whole portfolio in this environment?

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Speaker 3: You know, let's talk about equities first. I think with inequities,

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Speaker 3: what I would focus are in the areas that really

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Speaker 3: got beaten up, because when you buy something cheap, you

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Speaker 3: buy yourself a lot of downside protection. And if you

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Speaker 3: take a look at what's got beaten up, there are

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Speaker 3: really two areas right now. The first is financials. The

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Speaker 3: banking crisis or the mini crisis in March really led

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Speaker 3: to that, and what you're getting in financials is a

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Speaker 3: lot of high quality banks that got beaten down because

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Speaker 3: the baby got thrown out with the bathwater. Right So,

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Speaker 3: I think interesting ideas might be, you know, certain banks

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Speaker 3: that are trading at eight times earnings, you know that

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Speaker 3: are very high quality. City bank Wells Fargo fit that

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Speaker 3: bill for example. Insurance companies were also some of the

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Speaker 3: companies that were collateral damage along the way. But it's

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Speaker 3: not as if people are going to go out there

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Speaker 3: and start canceling insurance. You know, Insurance is one of

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Speaker 3: these things that everybody needs, just like banks or things

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Speaker 3: that everybody needs. And again, if they're priced well, they

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Speaker 3: become reasonable investments, and you know in the short and

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Speaker 3: the medium term. So MetLife, for example, is trading at

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Speaker 3: seven times earnings and AIG's treating something like EAT. So

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Speaker 3: when you get single digit multiples like that in name brand,

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Speaker 3: high quality companies, they tend to offer some upside potential

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Speaker 3: as well as some stability in the event of a

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Speaker 3: downturn because they've already priced so much of that in

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Speaker 3: other cyclical areas have also got beaten down. So within technology,

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Speaker 3: for example, we're seeing some attractive names in semiconductors. A

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Speaker 3: lot of this has to do with the trade war

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Speaker 3: with China, but the reality is that nobody's giving up

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Speaker 3: their phones, nobody's giving up their computers. You know, even

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Speaker 3: speakers need to have cars, and so semiconductors there's a

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Speaker 3: structural growing demand there. And what you're seeing is you're

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Speaker 3: seeing a lot of high quality companies again getting up

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Speaker 3: and there could be opportunities to invest there for long

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Speaker 3: term growth. A company like Qualcom, for example, it's treating

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Speaker 3: it twelve times. And then within the consumer segment, the

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Speaker 3: home builders, right the ultimate cyclical play. The home builders

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Speaker 3: are priced very attractively right now. So both Pulti Group

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Speaker 3: and Toll Brothers are, you know, treating at seven times earnings,

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Speaker 3: and Lenar's a little more expensive there eleven times. You know,

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Speaker 3: you do have to be volatility tolerant every time you

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Speaker 3: go into equities, and this is going to have the

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Speaker 3: normal equity volatility, but to some extent, if you're afraid

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Speaker 3: of a recession, then go and buy the stocks that

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Speaker 3: are already priced for a recession, you know, don't necessarily

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Speaker 3: buy the stocks that are optimistic that there's not going

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Speaker 3: to be a recession. And then the other thing that

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Speaker 3: I would add to that is that given what happened

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Speaker 3: last year the megacap stars, the fang stocks, I think

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Speaker 3: there are opportunities to pick up some very high quality

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Speaker 3: stocks at reasonable multiples. So a good example of that

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Speaker 3: might be a Meta, Right. Meta used to be one

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Speaker 3: of those great glamour stocks that really beaten up, is

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Speaker 3: now trading at fifteen times. I wouldn't necessarily say that

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Speaker 3: it was outright cheap, but for a company that just

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Speaker 3: generates so much cash flow and then so profitable, you know,

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Speaker 3: it looks like it looks like an interesting play. Of course,

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Speaker 3: it would have been mettered by this thing in January, right,

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Speaker 3: because it's up seventy eighty percent this year already, But

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Speaker 3: still even so, it still represents I think an interesting

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Speaker 3: and interesting entree into a high quality name.

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Speaker 1: That's a fascinating point about the insurance companies that you

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Speaker 1: bring up, because we don't hear people talking about them

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Speaker 1: a lot, and you mentioned how cheap they got. What

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Speaker 1: do you think explains why that happened? Is it just

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Speaker 1: a matter of them being loaded up with low yielding

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Speaker 1: treasury similar to the way that the banks are. Is

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Speaker 1: that the main area of concern, do you think?

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Speaker 3: Yeah, so, I think there are really two areas of concern.

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Speaker 3: I think that is one area for concerns. Their investment

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Speaker 3: portfolio is how are they doing? And you definitely see

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Speaker 3: a separation between certain insurance companies and other insurance companies

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Speaker 3: depending on the mix. Add to that the fact that

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Speaker 3: many insurance companies over the last ten to fifteen years

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Speaker 3: have increased their allocation to private investments a lot, specifically

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Speaker 3: venture and the failure of SPB and the story of

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Speaker 3: venture are very interrelated, right. The slowdown adventure cause, you know,

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Speaker 3: led to some of the issues SVB. The unwining of

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Speaker 3: SVB is going to undermine the funding of venture. It

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Speaker 3: becomes a negative cycle. And so depending on what the

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Speaker 3: insurance portfolio is in there could be some ramifications from that.

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Speaker 3: But ultimately what we're seeing, you know, what I'm reading

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Speaker 3: about in the insurance industry is that they are are

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Speaker 3: all able to hold their premium rates. Their loss ratios

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Speaker 3: are not significantly worse than what has historically been. Yes,

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Speaker 3: last year was a really bad year for investment portfolios.

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Speaker 3: This year is a lot better. This is what happens

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Speaker 3: to investment portfolios. You know, it's not an unusual thing.

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Speaker 3: What you really do want to do, is you really

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Speaker 3: want to you know, as Warren Buffett says, by when

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Speaker 3: others are fearful and.

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Speaker 2: I'm curious about your methodology, Like what are you looking

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Speaker 2: for when you're looking at these different stocks. Is it

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Speaker 2: just the cheapness factor that you're singling out or what

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Speaker 2: are some of the other components.

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Speaker 3: So we definitely try to identify stocks that are fundamentally undervalued,

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Speaker 3: but some of the stocks that are cheap, as they say,

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Speaker 3: are stocks that deserve to be cheap because they're going

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Speaker 3: out of business. A classic example of that last year

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Speaker 3: was bed Back and Beyond. Right, we know that bed

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Speaker 3: Bath and Beyond recently five for chapter eleven, but it

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Speaker 3: was a long road to that, and during that time

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Speaker 3: time it would always show up on any sort of

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Speaker 3: value screen a very very cheap stock. And so what's

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Speaker 3: important to us is to pair that with two things,

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Speaker 3: is to pair that with a quality screen where we're

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Speaker 3: really trying to avoid the companies that are close to

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Speaker 3: distress as well as avoid companies that have what we

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Speaker 3: would consider less capital discipline. And then we also look

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Speaker 3: at the recent momentum because there could be news flow,

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Speaker 3: there could be something else that is not yet in

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Speaker 3: the financials that is causing the stock to move one

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Speaker 3: way or the other. What we like to see is

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Speaker 3: we like to see strong risk adjusted returns or moderate

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Speaker 3: risk adjusted returns. Right. We don't want something spiking up

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Speaker 3: or spiking down. If something is spiking down, what we

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Speaker 3: would probably do is just try to either avoid it

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Speaker 3: until the volatility settles down, or just own less of it.

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Speaker 3: And really, they're all we're trying to say is, you know,

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Speaker 3: the markets can be irrational for far longer than you

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Speaker 3: can remain solvent, so you know, take steps to protect yourselves.

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Speaker 3: Those are the things that we that we look at.

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Speaker 1: One area everyone's fearful about is commercial real estate these days,

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Speaker 1: you know, especially you look at the publicly traded office

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Speaker 1: ruts just been destroyed. There are, at least on paper,

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Speaker 1: some some pretty attractive yields on a lot of those stocks.

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Speaker 1: But I wonder if it's you know, sometimes it pays

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Speaker 1: to be fearful to what everyone else is fearful. So

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Speaker 1: I'm wondering how you're thinking about about commercial real estate specifically,

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Speaker 1: both you know, the public equities involved in the space,

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Speaker 1: but also sort of it's macro influence on the rest

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Speaker 1: of the economy and the banks and the credit credit situation.

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Speaker 3: Sure, I mean, one of the things that I think

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Speaker 3: is very interesting about commercial real estate is that these

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Speaker 3: things do show up on our value screens, but they

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Speaker 3: it's hard for them to make it past their quality screens,

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Speaker 3: and so so we haven't really been involved heavily in

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Speaker 3: commercial real estate in our portfolios. But having said that,

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Speaker 3: I think one of the things about value investing is

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Speaker 3: that it is a bet on mean reversion, or is

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Speaker 3: a bet on stability. Right then you generally have this

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Speaker 3: very stable situation and that things get really out of whack,

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Speaker 3: and then you buy when others are fearful because that

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Speaker 3: fear is out of whack, and then you just ride

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Speaker 3: the convergence back to stability or normalcy. The problem with

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Speaker 3: commercial real estate right now, as specifically office, is that

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Speaker 3: we could be in the midst of a secular change,

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Speaker 3: and that's not something that value investing adequately addresses. And

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Speaker 3: so that is something that is addressed through for example, momentum. Right,

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Speaker 3: you look at the momentum of these things, they look awful.

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Speaker 3: Having said that, you know, I don't know. I mean,

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Speaker 3: we're all sitting here around a virtual table, yeah, and

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Speaker 3: our conversation is extremely effective. It's not like video conferencing

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Speaker 3: was twenty years ago. And so is there really a

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Speaker 3: need to have an office? I think it's nice to

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Speaker 3: have an office. I like going to the office and

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Speaker 3: seeing other humans and interacting with them and chatting. But

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Speaker 3: it's not necessary like it was. It's not as much

434
00:24:26,359 --> 00:24:29,240
Speaker 3: of a necessity. And so the use of office I

435
00:24:29,240 --> 00:24:31,639
Speaker 3: think will still be there. I just think that people

436
00:24:31,640 --> 00:24:32,680
Speaker 3: will use less of it.

437
00:24:32,960 --> 00:24:35,880
Speaker 1: That's the secular change. What you mean by secular change,

438
00:24:35,920 --> 00:24:36,960
Speaker 1: I assume exactly.

439
00:24:37,400 --> 00:24:39,000
Speaker 3: And so I think that we all have to go

440
00:24:39,040 --> 00:24:41,560
Speaker 3: through an adjustment on that, and you know, both in

441
00:24:41,640 --> 00:24:45,480
Speaker 3: terms of professionals as well as in terms of how

442
00:24:45,480 --> 00:24:50,440
Speaker 3: we invest. I do worry about the lack of full

443
00:24:50,480 --> 00:24:55,159
Speaker 3: return to office, not necessarily for myself personally, but really,

444
00:24:55,240 --> 00:24:58,960
Speaker 3: how does it affect new entrance into the white collar workforce?

445
00:24:59,320 --> 00:25:02,159
Speaker 3: How do they get integrated into a firm culture, or

446
00:25:02,200 --> 00:25:04,520
Speaker 3: how do they get trained. I was speaking to a

447
00:25:04,520 --> 00:25:08,640
Speaker 3: friend of mine whose firm has basically gone mostly virtual,

448
00:25:09,080 --> 00:25:10,600
Speaker 3: and one of the things that he said is that

449
00:25:10,680 --> 00:25:15,199
Speaker 3: it's actually very difficult to hire the younger analysts because

450
00:25:15,240 --> 00:25:17,360
Speaker 3: they don't want to work in a virtual office. They

451
00:25:17,400 --> 00:25:21,400
Speaker 3: want to work with real people from whom they can learn.

452
00:25:21,800 --> 00:25:24,080
Speaker 1: I think it's all about sweatpants, Phil Dona. If they

453
00:25:24,080 --> 00:25:26,800
Speaker 1: could remove the stigma of wearing sweatpants in the office,

454
00:25:26,960 --> 00:25:27,399
Speaker 1: I think.

455
00:25:27,240 --> 00:25:29,640
Speaker 2: Everything, then you'd be more happy to come in back

456
00:25:29,720 --> 00:25:32,160
Speaker 2: five days a week. Honestly, I wouldn't mind it either.

457
00:25:32,760 --> 00:25:50,840
Speaker 2: Yoga pants, Lula Lemon pin Way, if we can just

458
00:25:50,880 --> 00:25:54,080
Speaker 2: go back to that point, because that the remote work point,

459
00:25:54,320 --> 00:25:56,359
Speaker 2: or you know, the lack of the return to office

460
00:25:56,440 --> 00:25:59,240
Speaker 2: is something that you're also is one of the factors

461
00:25:59,280 --> 00:26:03,920
Speaker 2: in your economic outlook, right, because your thought is it's

462
00:26:04,000 --> 00:26:07,920
Speaker 2: changing everything not just from you know, how offices are utilized,

463
00:26:07,920 --> 00:26:10,120
Speaker 2: but also transportation, et cetera, et cetera.

464
00:26:10,720 --> 00:26:14,040
Speaker 3: Yeah, so it is changing how how transportation is organized.

465
00:26:14,400 --> 00:26:17,920
Speaker 3: And so that's one of the secular headwinds against something

466
00:26:18,040 --> 00:26:22,199
Speaker 3: like oil right, gas right, People just aren't filling up

467
00:26:22,240 --> 00:26:25,560
Speaker 3: their cars as much as they used to. It also

468
00:26:25,600 --> 00:26:30,400
Speaker 3: puts pressure on a lot of metropolitan transportation situations. Such

469
00:26:30,480 --> 00:26:34,480
Speaker 3: as New York's ridership remains pretty low on the subway

470
00:26:34,520 --> 00:26:37,760
Speaker 3: compared to pre pandemic. But having said that, you know,

471
00:26:37,800 --> 00:26:39,760
Speaker 3: one of the things that it does do is it

472
00:26:39,800 --> 00:26:44,919
Speaker 3: does put more money back into the pockets of families.

473
00:26:45,680 --> 00:26:49,359
Speaker 3: And so this could be something that cushions the blow

474
00:26:49,640 --> 00:26:53,159
Speaker 3: in terms of when people have to start repaying student loans,

475
00:26:53,160 --> 00:26:55,880
Speaker 3: for example. And one of the things that somebody else

476
00:26:55,920 --> 00:26:58,600
Speaker 3: pointed out to me was that, you know, he used

477
00:26:58,600 --> 00:27:01,280
Speaker 3: to come to work in Midtown every day, and he

478
00:27:01,320 --> 00:27:05,520
Speaker 3: would have lunch in Midtown every day, and now he

479
00:27:05,560 --> 00:27:08,240
Speaker 3: works from home two to three days a week and

480
00:27:08,359 --> 00:27:10,800
Speaker 3: in Brooklyn, in his neighborhood. All of a sudden, there

481
00:27:10,840 --> 00:27:14,480
Speaker 3: are so many more options for lunch than there used

482
00:27:14,520 --> 00:27:15,960
Speaker 3: to be. And so one of the things that he's

483
00:27:15,960 --> 00:27:18,920
Speaker 3: saying is that it's not just about are the people

484
00:27:18,960 --> 00:27:22,480
Speaker 3: returning to offices, it's also about the migration of different

485
00:27:22,480 --> 00:27:25,520
Speaker 3: types of business to different neighborhoods. Right, So you may

486
00:27:25,600 --> 00:27:30,879
Speaker 3: actually see what looks like a depressed downtown area, but

487
00:27:30,960 --> 00:27:35,040
Speaker 3: then you actually have more vibrant residential areas from a

488
00:27:35,080 --> 00:27:38,119
Speaker 3: business point of view. So there gives and takes to

489
00:27:38,200 --> 00:27:43,680
Speaker 3: that I don't necessarily see the return to office as

490
00:27:43,800 --> 00:27:48,399
Speaker 3: being an economic negative for the economy as a whole. Definitely,

491
00:27:48,520 --> 00:27:52,600
Speaker 3: it will impact certain regions, certain cities more than others,

492
00:27:53,760 --> 00:27:56,119
Speaker 3: But as a whole, I don't necessarily think that it

493
00:27:56,160 --> 00:27:58,360
Speaker 3: is an overall negative.

494
00:27:59,520 --> 00:28:03,040
Speaker 1: You mentioned and your preference for value, and you know,

495
00:28:03,119 --> 00:28:06,720
Speaker 1: last year it really looked like value was finally having

496
00:28:06,800 --> 00:28:10,639
Speaker 1: that moment in the sun where it was outperforming growth again.

497
00:28:10,800 --> 00:28:13,120
Speaker 1: I mean, it's kind of a tricky subject, I think

498
00:28:13,160 --> 00:28:16,760
Speaker 1: because the composition of what's in the value indexes versus

499
00:28:16,840 --> 00:28:20,879
Speaker 1: the growth indexes has changed pretty dramatically. But if you

500
00:28:20,920 --> 00:28:23,680
Speaker 1: think of the old school growth, you know, if you

501
00:28:23,760 --> 00:28:25,960
Speaker 1: use the Nasdaq one hundred as a sort of a

502
00:28:25,960 --> 00:28:29,639
Speaker 1: proxy for it, it looks like growth is back in

503
00:28:29,680 --> 00:28:33,080
Speaker 1: the leadership again. What do you think explains that and

504
00:28:33,800 --> 00:28:36,000
Speaker 1: is not going to last? I mean, is the value

505
00:28:36,119 --> 00:28:39,240
Speaker 1: trade gonna return this year? Do you think it's a

506
00:28:39,280 --> 00:28:41,320
Speaker 1: favor and what would drive that? If so?

507
00:28:41,720 --> 00:28:44,400
Speaker 3: The NASTAK one hundred, remember I think has something over

508
00:28:44,440 --> 00:28:46,480
Speaker 3: twenty percent in its top two stocks.

509
00:28:46,800 --> 00:28:48,840
Speaker 1: It's kind of it's getting ridiculous.

510
00:28:49,240 --> 00:28:52,040
Speaker 3: All right, And so when you talk about Nasdaq one hundred,

511
00:28:52,240 --> 00:28:57,120
Speaker 3: you know you're really talking about some of your narrow sets, right,

512
00:28:57,840 --> 00:28:59,640
Speaker 3: those stocks happen to be what I consider to be

513
00:28:59,680 --> 00:29:02,760
Speaker 3: a very high quality stocks. Apples one of them, very

514
00:29:02,840 --> 00:29:06,760
Speaker 3: you know, very strong consumer based, very loyal consumer base,

515
00:29:07,520 --> 00:29:13,840
Speaker 3: lots of cash generation, high profit margins, strong capital discipline.

516
00:29:14,280 --> 00:29:16,400
Speaker 3: I know that everybody made fun of Tim Cook when

517
00:29:16,680 --> 00:29:19,280
Speaker 3: he started paying a dividend on the stock many years ago,

518
00:29:19,360 --> 00:29:21,440
Speaker 3: but you know, that's just an example of you know,

519
00:29:21,480 --> 00:29:24,160
Speaker 3: he's got good capital discipline. He knows he's not going

520
00:29:24,200 --> 00:29:26,360
Speaker 3: to invest in something silly, he's going to return it

521
00:29:26,400 --> 00:29:29,840
Speaker 3: to shareholders. What I saw was not necessarily a return

522
00:29:29,880 --> 00:29:34,400
Speaker 3: to growth, but really people going in and buying high

523
00:29:34,480 --> 00:29:39,480
Speaker 3: quality stocks at more reasonable valuations and having a preference

524
00:29:39,520 --> 00:29:42,320
Speaker 3: for these very high quality stocks in the face of

525
00:29:42,680 --> 00:29:45,440
Speaker 3: continued market and economic uncertainty.

526
00:29:45,640 --> 00:29:47,960
Speaker 1: They're the new new defensives almost.

527
00:29:47,640 --> 00:29:51,200
Speaker 3: You know, yes, yes, the new defensives almost right, And

528
00:29:51,960 --> 00:29:54,160
Speaker 3: then they were you know, it's just that before at

529
00:29:54,160 --> 00:29:57,320
Speaker 3: the beginning of twenty twenty two, they were trading at

530
00:29:57,360 --> 00:29:59,840
Speaker 3: ridiculous multiples, and all of a sudden, at the beginning

531
00:29:59,840 --> 00:30:02,560
Speaker 3: of twenty twenty three, it was a completely different story.

532
00:30:02,600 --> 00:30:06,440
Speaker 3: It was a much more reasonable place to start buying

533
00:30:06,440 --> 00:30:09,840
Speaker 3: these stocks. We metas just one example, but definitely Apple,

534
00:30:09,960 --> 00:30:13,320
Speaker 3: Google are other examples of that. I mean. One of

535
00:30:13,320 --> 00:30:17,959
Speaker 3: the things that value does though, is that it's not

536
00:30:18,120 --> 00:30:20,880
Speaker 3: meant to be static, right, It's not meant to say

537
00:30:21,880 --> 00:30:26,040
Speaker 3: value always buy this company, or value always buy that company.

538
00:30:26,560 --> 00:30:30,040
Speaker 3: Value will buy what is what is cheap in the market.

539
00:30:30,280 --> 00:30:32,680
Speaker 3: And then in addition to that, one of the things

540
00:30:32,720 --> 00:30:34,520
Speaker 3: that we try to do is not just take a

541
00:30:34,560 --> 00:30:38,720
Speaker 3: look at absolute cheapness. Absolute cheapness is great, we also

542
00:30:38,760 --> 00:30:41,560
Speaker 3: try to take a look at a more comprehensive, well

543
00:30:41,640 --> 00:30:45,000
Speaker 3: rounded valuation, right, which is one of the reasons where

544
00:30:45,000 --> 00:30:48,240
Speaker 3: we find stocks like Meta to be interesting.

545
00:30:48,880 --> 00:30:53,200
Speaker 1: Well, Qui Gwen of Research Affiliates quite a treat to

546
00:30:53,200 --> 00:30:55,479
Speaker 1: pick your brain here today on What Goes Up. We

547
00:30:55,520 --> 00:30:58,120
Speaker 1: really appreciate your time, can't let you go just yet.

548
00:30:58,160 --> 00:31:01,160
Speaker 1: We do have a tradition on this show where we

549
00:31:01,280 --> 00:31:05,200
Speaker 1: have to discuss the craziest things we saw in markets

550
00:31:05,240 --> 00:31:05,800
Speaker 1: this week.

551
00:31:06,440 --> 00:31:08,880
Speaker 2: So drum roll on my little laptop.

552
00:31:09,000 --> 00:31:12,800
Speaker 1: Yeah, well, why do you get us started?

553
00:31:13,120 --> 00:31:16,720
Speaker 2: Okay, this is another Marella special. Marale is my sister.

554
00:31:16,800 --> 00:31:20,160
Speaker 2: She's our new craziest thing. Corresponded, I would say, right,

555
00:31:20,880 --> 00:31:23,000
Speaker 2: she sends me a bunch of stuff, and I asked

556
00:31:23,040 --> 00:31:24,800
Speaker 2: her for something specific. I was like, what have you

557
00:31:24,840 --> 00:31:27,720
Speaker 2: seen that's weird? And she pointed out, and this is

558
00:31:27,760 --> 00:31:30,880
Speaker 2: from a couple of days ago, that there's this new

559
00:31:31,000 --> 00:31:35,280
Speaker 2: viral song from Drake and The Weekend. Yeah, you probably

560
00:31:35,280 --> 00:31:37,160
Speaker 2: don't know who those who those two are.

561
00:31:37,280 --> 00:31:41,000
Speaker 1: Yeah, I do. Come on, I've got I've got teenage daughters, females.

562
00:31:41,040 --> 00:31:44,720
Speaker 2: Oh right, okay, okay, you get a path. And it

563
00:31:44,760 --> 00:31:46,640
Speaker 2: was created entirely by AI.

564
00:31:47,160 --> 00:31:47,480
Speaker 3: Wow.

565
00:31:47,760 --> 00:31:50,080
Speaker 1: Yeah, that's that's a bizarre one.

566
00:31:50,720 --> 00:31:52,760
Speaker 2: Yeah, and I think it was like one of the

567
00:31:52,800 --> 00:31:56,080
Speaker 2: top streaming They even had to pull it from Apple

568
00:31:56,120 --> 00:31:59,880
Speaker 2: and Spotify because Drake obviously wasn't very happy. But it

569
00:31:59,920 --> 00:32:01,280
Speaker 2: was totally created by AI.

570
00:32:01,840 --> 00:32:04,000
Speaker 1: I feel like, if there's a way to go long

571
00:32:04,720 --> 00:32:07,960
Speaker 1: on copyright lawyers quite I think AI, Yeah this is it.

572
00:32:08,240 --> 00:32:10,640
Speaker 3: Yeah, I think that would be a private investment.

573
00:32:11,280 --> 00:32:15,760
Speaker 1: Yeah, out of your wheelhouse. But I feel like there's

574
00:32:15,840 --> 00:32:17,560
Speaker 1: we're going to be seeing a lot of cases over

575
00:32:17,600 --> 00:32:21,160
Speaker 1: this stuff. You know, really, what does chat GPT do

576
00:32:21,480 --> 00:32:24,640
Speaker 1: but go out to the internet and copy and paste

577
00:32:24,640 --> 00:32:27,640
Speaker 1: some information from other websites. Well that's pretty good. That

578
00:32:27,720 --> 00:32:30,200
Speaker 1: is a good one. Really not market related. Vildona but

579
00:32:30,240 --> 00:32:31,680
Speaker 1: I'll allow it.

580
00:32:31,680 --> 00:32:35,600
Speaker 3: It's the potential for vastly increased productivity from drake.

581
00:32:36,720 --> 00:32:37,320
Speaker 2: There you go.

582
00:32:37,520 --> 00:32:41,000
Speaker 1: Yeah, it was pretty productive to start with, So that's

583
00:32:41,040 --> 00:32:43,360
Speaker 1: pretty good. All right. QUI, how about you? Have you

584
00:32:43,360 --> 00:32:44,760
Speaker 1: seen anything crazy recently?

585
00:32:45,000 --> 00:32:48,600
Speaker 3: Yes? I saw a story earlier this week about a

586
00:32:49,040 --> 00:32:52,040
Speaker 3: crypto wallet that was dormant for something like eight or

587
00:32:52,120 --> 00:32:57,960
Speaker 3: nine years, and I guess back then it participated in

588
00:32:58,120 --> 00:33:02,600
Speaker 3: the initial coin offering of and so it was allocated

589
00:33:02,800 --> 00:33:06,360
Speaker 3: just a few thousand dollars of etherium at thirty one

590
00:33:06,400 --> 00:33:10,600
Speaker 3: cents per coin. And then for whatever reason, the owner

591
00:33:10,640 --> 00:33:14,200
Speaker 3: of this wallet just sort of went away and didn't

592
00:33:14,240 --> 00:33:18,840
Speaker 3: do anything, and Rip van Winkle wakes up wallets now

593
00:33:18,880 --> 00:33:22,760
Speaker 3: beginning to be active. It's had essentially a six hundred

594
00:33:22,760 --> 00:33:23,840
Speaker 3: thousand percent return.

595
00:33:24,360 --> 00:33:24,760
Speaker 1: Wow.

596
00:33:24,840 --> 00:33:28,080
Speaker 3: Right, of course they missed the giant run up also

597
00:33:28,160 --> 00:33:30,720
Speaker 3: the big massive draw down. But are you really that

598
00:33:30,880 --> 00:33:32,959
Speaker 3: unhappy that you missed the giant run up? I mean,

599
00:33:33,000 --> 00:33:35,920
Speaker 3: aren't you pretty happy with a six hundred thousand percent return?

600
00:33:36,280 --> 00:33:38,200
Speaker 2: It's it's me I'm not all own.

601
00:33:40,320 --> 00:33:43,000
Speaker 3: One of the things that really struck me about this

602
00:33:43,120 --> 00:33:45,720
Speaker 3: is that, you know, this is really an example of

603
00:33:45,760 --> 00:33:50,000
Speaker 3: the Rip van Winkle. You know philosophy of investing right,

604
00:33:50,400 --> 00:33:52,920
Speaker 3: you buy it for the long term. If you say

605
00:33:52,920 --> 00:33:54,440
Speaker 3: you're going to buy it for the long term, just

606
00:33:54,440 --> 00:33:56,720
Speaker 3: buy it for the long term, hold it and then

607
00:33:57,200 --> 00:34:00,360
Speaker 3: look at it many many years later and you'll do line.

608
00:34:01,000 --> 00:34:04,000
Speaker 3: But not many of us have that kind of patience.

609
00:34:04,280 --> 00:34:06,280
Speaker 3: But here's an example of a person who did.

610
00:34:06,360 --> 00:34:10,399
Speaker 1: And yeah, really interesting, what was it. Jack Bogol used

611
00:34:10,400 --> 00:34:13,360
Speaker 1: to joke about you should burn your password to to

612
00:34:13,520 --> 00:34:16,640
Speaker 1: Vanguard and just go have them reboot it when it's

613
00:34:16,640 --> 00:34:17,000
Speaker 1: time to.

614
00:34:16,920 --> 00:34:19,080
Speaker 2: Return, not burn your crypto passwords.

615
00:34:19,120 --> 00:34:24,920
Speaker 1: That's true, it doesn't work to that. Well, kway you

616
00:34:24,920 --> 00:34:27,080
Speaker 1: you brought it up. So we get to ask you

617
00:34:27,080 --> 00:34:29,040
Speaker 1: what do you think of crypto? Are you a believer?

618
00:34:29,239 --> 00:34:32,360
Speaker 1: You skeptic? How do you? How do you think about crypto?

619
00:34:32,840 --> 00:34:36,360
Speaker 3: To me, crypto is really an expression of sentiment, you know,

620
00:34:36,520 --> 00:34:39,560
Speaker 3: it's it's something that trades off of sentiment. There's no

621
00:34:39,920 --> 00:34:44,800
Speaker 3: intrinsic value necessarily related to crypto. Where crypto does derive

622
00:34:44,920 --> 00:34:48,719
Speaker 3: value is in the community that is enthusiastic about it.

623
00:34:48,920 --> 00:34:51,680
Speaker 3: And so if the community is really enthusiastic about it,

624
00:34:51,680 --> 00:34:54,520
Speaker 3: it's great. If the enthusi If the community loses interest

625
00:34:54,560 --> 00:34:59,160
Speaker 3: in it, it just goes away. So you know, that's

626
00:34:59,160 --> 00:35:03,839
Speaker 3: where it is today. Now, can we take crypto and

627
00:35:04,160 --> 00:35:06,560
Speaker 3: make something more out of it? Make something more out

628
00:35:06,560 --> 00:35:10,880
Speaker 3: of the technology the blockchain. Certainly people are trying, but

629
00:35:11,040 --> 00:35:15,600
Speaker 3: thus far, I haven't necessarily seen anything that you know,

630
00:35:15,680 --> 00:35:17,959
Speaker 3: makes that application real.

631
00:35:18,560 --> 00:35:21,120
Speaker 1: I think that's uh, that's a smart way to think

632
00:35:21,120 --> 00:35:25,640
Speaker 1: about it. I'm gonna delve into the non encrypted currency markets,

633
00:35:26,200 --> 00:35:31,080
Speaker 1: the good old fashioned currency markets Feldanna coins. And this

634
00:35:31,160 --> 00:35:34,239
Speaker 1: is courtesy I don't do you follow Stephen Dennis, the

635
00:35:34,280 --> 00:35:35,600
Speaker 1: Senate reporter at Bloomberg.

636
00:35:35,760 --> 00:35:38,239
Speaker 2: Oh, he had he posts like the houses.

637
00:35:37,840 --> 00:35:41,200
Speaker 1: In the He posts, yeah, Zillow, he does Sunday nights.

638
00:35:41,200 --> 00:35:45,600
Speaker 1: He posts like the nicest and weirdest houses on zillo.

639
00:35:45,680 --> 00:35:50,240
Speaker 1: But he posted what he calls an eye popping stat

640
00:35:50,440 --> 00:35:54,719
Speaker 1: from the US men mints, and it's regarding sitting in

641
00:35:54,800 --> 00:36:00,160
Speaker 1: jars somewhere two hundred billion pennies sitting in jars. But

642
00:36:00,960 --> 00:36:03,480
Speaker 1: probably because of that lost circulation, the mint has to

643
00:36:03,560 --> 00:36:07,640
Speaker 1: keep making new pennies, millions, billions of pennies every year. Okay,

644
00:36:07,840 --> 00:36:12,080
Speaker 1: And he brought up the cost for the US Mint

645
00:36:12,480 --> 00:36:15,879
Speaker 1: to actually mint a penny. So it's time to play

646
00:36:15,880 --> 00:36:18,799
Speaker 1: the prices precise. Quay, you're on a game show now.

647
00:36:18,840 --> 00:36:21,799
Speaker 1: I hate to inform you. I want you, guys to

648
00:36:21,840 --> 00:36:25,839
Speaker 1: guess the cost of the US mint to make a

649
00:36:25,880 --> 00:36:29,400
Speaker 1: penny and put it in circulation one one cent, one US.

650
00:36:29,360 --> 00:36:34,120
Speaker 2: Penny, Okay, I'm going to say it's slightly above one cent.

651
00:36:34,840 --> 00:36:36,240
Speaker 1: What should give me a number?

652
00:36:36,719 --> 00:36:38,719
Speaker 2: I don't know. How do you measure slightly above one

653
00:36:38,760 --> 00:36:41,239
Speaker 2: cent one point?

654
00:36:41,880 --> 00:36:46,920
Speaker 1: I don't know you need Satoshi's I think you do.

655
00:36:47,800 --> 00:36:50,760
Speaker 2: One point zero one zero, so it will be zero

656
00:36:50,840 --> 00:36:52,640
Speaker 2: points zers. I really don't know how to do this.

657
00:36:52,680 --> 00:36:55,480
Speaker 2: I'm just gonna go slightly above one cent, all right?

658
00:36:55,560 --> 00:36:57,040
Speaker 1: QUI, how about you? What do you think it costs

659
00:36:57,080 --> 00:36:57,880
Speaker 1: to mint a penny?

660
00:36:58,480 --> 00:36:59,920
Speaker 3: I think it's going to cost two cents.

661
00:37:00,320 --> 00:37:03,680
Speaker 1: That's pretty good. That's pretty close two point seven cents

662
00:37:03,760 --> 00:37:06,200
Speaker 1: to make a penny. Why are we bothering at this

663
00:37:06,280 --> 00:37:10,839
Speaker 1: point to bink? Oh my gosh, it's ridiculous. And when's

664
00:37:10,880 --> 00:37:12,800
Speaker 1: the last time either of you actually spent a penny?

665
00:37:12,840 --> 00:37:15,239
Speaker 1: Have you? I can't even think of the last time

666
00:37:15,280 --> 00:37:15,919
Speaker 1: I spent one.

667
00:37:16,400 --> 00:37:19,120
Speaker 2: Well, I don't keep cash in my wallet to begin with,

668
00:37:19,239 --> 00:37:20,040
Speaker 2: so it'd be very hard.

669
00:37:20,120 --> 00:37:23,080
Speaker 3: Yeah, aside from my day job. I'm also the treasurer

670
00:37:23,120 --> 00:37:25,799
Speaker 3: for my son's school, PTAH, and they had a bank.

671
00:37:25,920 --> 00:37:28,680
Speaker 3: They had a bake sale, and so then I had

672
00:37:28,719 --> 00:37:32,000
Speaker 3: to gather the cash and actually deposited at the bank.

673
00:37:32,480 --> 00:37:35,319
Speaker 3: And in that stack of cash was a whole bunch

674
00:37:35,320 --> 00:37:35,880
Speaker 3: of pennies.

675
00:37:38,840 --> 00:37:40,840
Speaker 1: You put it in the bank, not into a value,

676
00:37:41,239 --> 00:37:42,759
Speaker 1: not in some value stocks lay.

677
00:37:43,520 --> 00:37:46,120
Speaker 3: I don't think that our PTA is allowed to make investment.

678
00:37:46,560 --> 00:37:51,560
Speaker 1: Your mandates are strict mandates. And for a nickel, how

679
00:37:51,600 --> 00:37:55,400
Speaker 1: about this, a nickel ten point four cents to a nickel,

680
00:37:56,560 --> 00:37:58,040
Speaker 1: I say, get rid of get rid of all of them.

681
00:37:58,080 --> 00:38:03,560
Speaker 3: Well, we all have digital wallets now anyway, right Fenmosal Yeah,

682
00:38:03,640 --> 00:38:06,320
Speaker 3: apple pie, yep, yeah.

683
00:38:05,960 --> 00:38:09,319
Speaker 1: Although I guess they like to have those pennies. They

684
00:38:09,360 --> 00:38:12,120
Speaker 1: can they can make their pennies off of their transactions,

685
00:38:12,120 --> 00:38:14,839
Speaker 1: so digital pennies carry on.

686
00:38:15,480 --> 00:38:18,320
Speaker 3: You know, I think that the main thing about getting

687
00:38:18,360 --> 00:38:21,400
Speaker 3: rid of the penny is I think the state of

688
00:38:21,440 --> 00:38:29,160
Speaker 3: Illinois might get annoyed. Lincoln, now you're there, you're a little.

689
00:38:29,000 --> 00:38:33,960
Speaker 2: Land of Lincoln. A penny for your thoughts. That's a

690
00:38:34,000 --> 00:38:35,520
Speaker 2: penny for your thoughts.

691
00:38:35,320 --> 00:38:37,560
Speaker 3: Right, you still do the five dollar, but you're right,

692
00:38:37,640 --> 00:38:39,640
Speaker 3: like things like that like a penny for your thoughts.

693
00:38:39,760 --> 00:38:42,680
Speaker 3: Those sort of witticisms will sort of go away and

694
00:38:42,840 --> 00:38:45,759
Speaker 3: our grandchildren won't know what we mean. What are you

695
00:38:45,840 --> 00:38:47,160
Speaker 3: talking about? Kind of thing?

696
00:38:48,400 --> 00:38:50,880
Speaker 2: I literally didn't know what really what happened? Like, I

697
00:38:50,920 --> 00:38:53,120
Speaker 2: know people use that phrase, but I always.

698
00:38:52,840 --> 00:38:56,640
Speaker 1: Was like, who what penny for your thoughts? Good reason

699
00:38:56,640 --> 00:38:59,719
Speaker 1: to keep the penny around? I guess fair point. But

700
00:39:00,560 --> 00:39:02,520
Speaker 1: I think that is all our time for this week.

701
00:39:02,800 --> 00:39:05,920
Speaker 1: Gwig Gwen of Research Affiliates. I really appreciate your time

702
00:39:06,440 --> 00:39:09,160
Speaker 1: and your wisdom, and hopefully we can talk to you

703
00:39:09,200 --> 00:39:10,160
Speaker 1: again someday soon.

704
00:39:10,440 --> 00:39:21,319
Speaker 2: Yes, thank you for coming on What Goes Up. We'll

705
00:39:21,360 --> 00:39:24,239
Speaker 2: be back next week. Until then, you can find us

706
00:39:24,239 --> 00:39:28,040
Speaker 2: on the Bloomberg Terminal website and app, or wherever you

707
00:39:28,080 --> 00:39:30,600
Speaker 2: get your podcasts. We'd love it if you took the

708
00:39:30,640 --> 00:39:33,040
Speaker 2: time to rate and review the show so more listeners

709
00:39:33,040 --> 00:39:35,760
Speaker 2: can find us. And you can find us on Twitter,

710
00:39:36,520 --> 00:39:41,480
Speaker 2: follow me at bildana Hire. Mike Reagan is at Reaganonymous.

711
00:39:41,760 --> 00:39:46,080
Speaker 2: You can also follow Bloomer Podcasts at podcasts. What Goes

712
00:39:46,160 --> 00:39:48,719
Speaker 2: Up is produced by Stacy Long and our head of

713
00:39:48,760 --> 00:39:52,080
Speaker 2: podcasts is Stage Boutman. Thanks for listening, and we'll see

714
00:39:52,080 --> 00:40:09,920
Speaker 2: you next week,