1 00:00:00,080 --> 00:00:02,480 Speaker 1: Mister ed Yard Denny, and he joins us this morning, 2 00:00:02,640 --> 00:00:05,000 Speaker 1: and I gotta go to you on bitcoin at ninety 3 00:00:05,040 --> 00:00:09,720 Speaker 1: three thousand. How do you invest or speculate in something 4 00:00:10,240 --> 00:00:14,480 Speaker 1: where there's no underlying there's no profit, there's no free 5 00:00:14,600 --> 00:00:18,959 Speaker 1: cash flow, there's no history of gold. How do you 6 00:00:19,000 --> 00:00:20,080 Speaker 1: do that? Ed Yard Denny? 7 00:00:21,040 --> 00:00:24,880 Speaker 2: I guess you just have to be a believer. It's 8 00:00:24,960 --> 00:00:29,479 Speaker 2: kind of a faith asset. The view that there'll be 9 00:00:29,560 --> 00:00:33,440 Speaker 2: more and more buyers of this particular asset just keeps 10 00:00:33,520 --> 00:00:36,720 Speaker 2: driving it up. And I guess in terms of trading it, 11 00:00:36,760 --> 00:00:39,440 Speaker 2: all you can really do is be a technical analyst. 12 00:00:40,440 --> 00:00:43,080 Speaker 2: You know, there's a little consolidation pattern there. Then Trump 13 00:00:43,400 --> 00:00:46,080 Speaker 2: wins and it goes straight up. So you know, I 14 00:00:46,120 --> 00:00:48,040 Speaker 2: think a lot of it's a news dependent and if 15 00:00:48,080 --> 00:00:52,440 Speaker 2: the news is favorable, it goes up. That's kind of 16 00:00:51,560 --> 00:00:54,000 Speaker 2: the story, ed jar Denny. 17 00:00:54,040 --> 00:00:58,760 Speaker 1: America has turned upside down. Republicans, Democrats, Independence, We're going 18 00:00:58,760 --> 00:01:01,920 Speaker 1: from press release to US release, some thrilled, some not, 19 00:01:02,720 --> 00:01:06,679 Speaker 1: Etcjer Denny, how do you invest in this if you 20 00:01:06,720 --> 00:01:10,120 Speaker 1: have a minimum time hold of three years? How do 21 00:01:10,160 --> 00:01:14,039 Speaker 1: we emotionally get through the political Maelstrom? 22 00:01:15,840 --> 00:01:20,199 Speaker 2: Well, I think first and foremost, it's pretty well known 23 00:01:20,240 --> 00:01:23,199 Speaker 2: that the best way to invest is to ignore politics, 24 00:01:24,160 --> 00:01:28,200 Speaker 2: or at least not let your personal political views influence 25 00:01:28,560 --> 00:01:32,360 Speaker 2: your stock portfolio. Market tends to go up whether it's 26 00:01:32,400 --> 00:01:37,200 Speaker 2: Democrats or Republicans in the White House. I guess sometimes 27 00:01:37,200 --> 00:01:38,959 Speaker 2: we have to be a little bit more specific about 28 00:01:39,000 --> 00:01:42,199 Speaker 2: the extent to which they're Also the same party that's 29 00:01:42,240 --> 00:01:46,000 Speaker 2: in the White House is also in Congress. But all 30 00:01:46,040 --> 00:01:49,840 Speaker 2: in all, the market it's pe time z. And as 31 00:01:49,840 --> 00:01:54,000 Speaker 2: long as the earnings outlook is for more growth, and 32 00:01:54,040 --> 00:01:57,080 Speaker 2: the longer is that outlook for growth, the higher the pe. 33 00:01:57,160 --> 00:01:59,040 Speaker 2: And that's kind of the environment we're in right now. 34 00:02:00,080 --> 00:02:02,800 Speaker 3: So, Ed, how did your outlook on this market change, 35 00:02:02,840 --> 00:02:06,320 Speaker 3: if at all with the election last year? 36 00:02:06,480 --> 00:02:11,919 Speaker 2: Yeah, more bullish, not for political reasons, but simply because 37 00:02:11,960 --> 00:02:16,760 Speaker 2: I think animal spirits have been unleashed. Trump is definitely 38 00:02:16,840 --> 00:02:21,880 Speaker 2: viewed as being a more pro business president than Harris 39 00:02:21,919 --> 00:02:25,120 Speaker 2: would have been. He wants to cut taxes again and 40 00:02:25,240 --> 00:02:30,440 Speaker 2: corporations as well as cut some taxes on lower income workers. 41 00:02:30,680 --> 00:02:33,840 Speaker 2: He wants to deregulate, and then I think the market 42 00:02:33,919 --> 00:02:37,000 Speaker 2: is also excited about the possibility that some of these 43 00:02:37,240 --> 00:02:41,840 Speaker 2: intractable geopolitical crises might have a chance of getting resolved 44 00:02:41,880 --> 00:02:46,120 Speaker 2: as kind of Trump does his deal deal making magic, 45 00:02:46,680 --> 00:02:49,960 Speaker 2: perhaps between Ukraine and Russia. And I don't think it's 46 00:02:49,960 --> 00:02:51,800 Speaker 2: going to be deal making in the Middle East. I 47 00:02:51,840 --> 00:02:54,920 Speaker 2: think it's going to be sort of a free ticket 48 00:02:55,240 --> 00:02:58,880 Speaker 2: for the Israelis to take out Iran ed. 49 00:02:58,919 --> 00:03:01,799 Speaker 3: What are there any sectors that kind of jump out 50 00:03:01,840 --> 00:03:05,480 Speaker 3: at you that might be particular beneficiaries of this new 51 00:03:05,480 --> 00:03:06,960 Speaker 3: Republican led government. 52 00:03:08,200 --> 00:03:11,840 Speaker 2: Well, I'm not too creative here. I'm still recommending that. 53 00:03:11,880 --> 00:03:15,880 Speaker 2: I'm still recommending the same sectors that we've been recommending 54 00:03:15,960 --> 00:03:19,280 Speaker 2: for a while here. Three out of four of work 55 00:03:19,360 --> 00:03:23,160 Speaker 2: one hasn't. And the recommendation is to overweight the technology, 56 00:03:23,280 --> 00:03:27,080 Speaker 2: including communications services, kind of counting that as one sector 57 00:03:27,840 --> 00:03:30,400 Speaker 2: that's worked extremely well and I think should continue to 58 00:03:30,440 --> 00:03:33,720 Speaker 2: do well. So we overweight that. Industrials has done very well, 59 00:03:34,240 --> 00:03:37,640 Speaker 2: Financials and the only clunker has been energy and jo. 60 00:03:37,600 --> 00:03:40,000 Speaker 1: Danny, give me a MAG seven update. Dan Ives is 61 00:03:40,000 --> 00:03:44,240 Speaker 1: in the house. He's been the acolyte of Apple Forever, 62 00:03:44,440 --> 00:03:48,400 Speaker 1: Planet here, forever take a sector view on MAG seven? 63 00:03:48,680 --> 00:03:52,000 Speaker 1: Can you add shares here? Do you hold to you? 64 00:03:52,120 --> 00:03:52,760 Speaker 1: Lighten up? 65 00:03:54,640 --> 00:03:58,160 Speaker 2: Well? I think lightening up hasn't been a wise thing to. 66 00:03:58,080 --> 00:04:00,240 Speaker 1: Do, though, thank you everybody for jointing that out. 67 00:04:02,000 --> 00:04:05,520 Speaker 2: Though everybody's scratching their head about why Warren Buffett's getting 68 00:04:05,520 --> 00:04:08,600 Speaker 2: out of Apple? Why is he getting out of Apple 69 00:04:09,120 --> 00:04:13,080 Speaker 2: dr That's one of the great mysteries of life these days, 70 00:04:13,160 --> 00:04:16,760 Speaker 2: is why he's scrambling to raise so much cash. And 71 00:04:17,560 --> 00:04:20,880 Speaker 2: one of the interpretations is he knows something, or he 72 00:04:21,279 --> 00:04:26,039 Speaker 2: thinks he knows something about things turning sour pretty quickly here, 73 00:04:26,080 --> 00:04:29,960 Speaker 2: and he likes to buy things cheap, and may simply 74 00:04:29,960 --> 00:04:32,400 Speaker 2: be that is that he just views it not only 75 00:04:32,440 --> 00:04:35,440 Speaker 2: doesn't have anything to buy with the cash he had, 76 00:04:36,320 --> 00:04:39,520 Speaker 2: but some of these assets that he have of appreciated 77 00:04:39,560 --> 00:04:42,280 Speaker 2: to such an extent that he just wants to roll 78 00:04:42,320 --> 00:04:44,920 Speaker 2: it into cash. And the cash, by the way, is 79 00:04:44,960 --> 00:04:47,880 Speaker 2: looking pretty good. It's still yielding three and a half 80 00:04:47,920 --> 00:04:51,680 Speaker 2: to four and a half percent. So I think, I 81 00:04:51,720 --> 00:04:55,440 Speaker 2: think it's an inscrewable situation, and I can't but the 82 00:04:55,480 --> 00:04:57,520 Speaker 2: life we figure it out. I guess after the fact, 83 00:04:57,560 --> 00:05:00,600 Speaker 2: if everything blows apart, will say that and Buffalo was 84 00:05:00,600 --> 00:05:01,679 Speaker 2: the only one coming. 85 00:05:02,160 --> 00:05:05,200 Speaker 1: There was a wonder child out of the Midwest pre 86 00:05:05,320 --> 00:05:09,000 Speaker 1: World War two, and he took some exams of Paul 87 00:05:09,120 --> 00:05:12,120 Speaker 1: out of the blue to get into Harvard without applying 88 00:05:12,120 --> 00:05:15,400 Speaker 1: to Harvard. Harvard took him full scholarship, the whole thing 89 00:05:15,480 --> 00:05:18,720 Speaker 1: Stirling career, and he ended up at a small school 90 00:05:18,760 --> 00:05:23,080 Speaker 1: in New Haven. And James Tobin, even if you disagreed 91 00:05:23,120 --> 00:05:26,240 Speaker 1: with him, was always this light, this light of intellect 92 00:05:26,400 --> 00:05:29,600 Speaker 1: and size. And he is the one in nineteen seventy 93 00:05:29,640 --> 00:05:34,560 Speaker 1: seven with James Mead who said nominal GDP matters. This 94 00:05:34,760 --> 00:05:39,520 Speaker 1: was revolutionary at the time to this day hugely controversial. 95 00:05:40,120 --> 00:05:44,040 Speaker 1: Ed Yard Denny carries his spirit forward by looking at 96 00:05:44,200 --> 00:05:48,440 Speaker 1: animal spirit, which in the definition of Bloomberg's surveillance is 97 00:05:48,760 --> 00:05:52,799 Speaker 1: real GDP plus inflation. Ed Yard Denny, what would James 98 00:05:52,880 --> 00:05:57,640 Speaker 1: Tobin say about the new animal spirit of a Trump administration? 99 00:05:59,120 --> 00:06:04,880 Speaker 2: Well, I think he would approve of the concept, though 100 00:06:04,920 --> 00:06:08,200 Speaker 2: not necessarily the context in which it occurs. I mean, 101 00:06:08,240 --> 00:06:14,000 Speaker 2: animal spirits was a phrase that was concocted by this 102 00:06:14,080 --> 00:06:17,080 Speaker 2: is a hero, which is John Maynard Keynes, and John 103 00:06:17,160 --> 00:06:21,880 Speaker 2: Maynard Keynes described it as spontaneous optimism. And I think 104 00:06:22,200 --> 00:06:24,599 Speaker 2: Tobin was very much of a liberal and a Democrat, 105 00:06:24,640 --> 00:06:28,840 Speaker 2: so I think he would prefer to describe animal spirits 106 00:06:28,839 --> 00:06:33,000 Speaker 2: as occurring under a democratic rather than a republican administration. 107 00:06:33,680 --> 00:06:36,320 Speaker 2: But he was objective and it is what it is. 108 00:06:36,440 --> 00:06:40,359 Speaker 2: I mean, we have seen so far spontaneous optimism, animal 109 00:06:40,400 --> 00:06:44,400 Speaker 2: spirits with the election of President Trump. Some of that 110 00:06:44,880 --> 00:06:48,839 Speaker 2: maybe that the election turned out to be not even close. 111 00:06:48,920 --> 00:06:51,880 Speaker 2: It wasn't contested, so it was over with and done. 112 00:06:52,440 --> 00:06:55,800 Speaker 2: But on the other hand, Trump's policies are good for 113 00:06:56,400 --> 00:06:59,479 Speaker 2: a nominal GDP for the most part, though there clearly 114 00:06:59,560 --> 00:07:01,039 Speaker 2: are some potential negatives. 115 00:07:01,839 --> 00:07:04,240 Speaker 1: When you work with Eric Wallerstein on this and you 116 00:07:04,360 --> 00:07:07,080 Speaker 1: get to the roaring twenties of Edyard Denny, Is it 117 00:07:07,120 --> 00:07:12,720 Speaker 1: as simple as high we underestimate revenue growth in American corporations. 118 00:07:14,040 --> 00:07:16,840 Speaker 2: Well, I'm not sure that the revenues is the issue. 119 00:07:17,720 --> 00:07:21,360 Speaker 2: Revenues I think are going to be okay. But revenues 120 00:07:21,400 --> 00:07:23,840 Speaker 2: are generated on a global basis, and while the US 121 00:07:23,920 --> 00:07:28,160 Speaker 2: economy looks pretty good good actually stands out compared to 122 00:07:28,160 --> 00:07:31,480 Speaker 2: the rest of the world China, Europe, some of these 123 00:07:31,520 --> 00:07:35,440 Speaker 2: other areas look pretty weak. It's really all about earnings. 124 00:07:35,640 --> 00:07:39,880 Speaker 2: The profit margin is going to automatically go up when Trump. 125 00:07:40,640 --> 00:07:42,320 Speaker 2: I think one of the first things they'll do is 126 00:07:42,640 --> 00:07:45,880 Speaker 2: get through Congress, it cut of the corporate tax rate 127 00:07:45,920 --> 00:07:49,720 Speaker 2: from twenty one percent to fifteen percent, and then deregulation 128 00:07:49,920 --> 00:07:52,520 Speaker 2: is unknown. We don't know how much of it will 129 00:07:52,520 --> 00:07:56,200 Speaker 2: occur and how much will be reflected in profit margins. 130 00:07:56,240 --> 00:07:59,240 Speaker 2: But oh, by the way, before the election, we were 131 00:07:59,280 --> 00:08:02,760 Speaker 2: still talking about out the roaring twenty twenties, figuring that 132 00:08:02,840 --> 00:08:05,120 Speaker 2: productivity is going to make a comeback no matter who's 133 00:08:05,160 --> 00:08:05,840 Speaker 2: in the White House. 134 00:08:06,760 --> 00:08:10,040 Speaker 3: And is inflation a concern here? I think some folks 135 00:08:10,120 --> 00:08:16,440 Speaker 3: are concerned that tariffs number two, you know, cuts in 136 00:08:17,080 --> 00:08:21,160 Speaker 3: tax rates could fuel inflation. Is that a concern of yours? 137 00:08:21,720 --> 00:08:25,400 Speaker 2: Well? I think on balance, when you include the potential 138 00:08:25,480 --> 00:08:30,720 Speaker 2: for deregulation and tax cuts, that may be sort of 139 00:08:30,720 --> 00:08:33,240 Speaker 2: a wash. But yeah, I have to be concerned about it. 140 00:08:33,280 --> 00:08:35,400 Speaker 2: We all have to be concerned about it. The bond 141 00:08:35,400 --> 00:08:39,360 Speaker 2: market's certainly concerned about it, my friends. The bond vigilanties 142 00:08:39,400 --> 00:08:43,160 Speaker 2: have taken the bond deal up by about seventy seventy 143 00:08:43,160 --> 00:08:46,839 Speaker 2: five basis points since the Fed cut the Fed funds 144 00:08:46,880 --> 00:08:50,880 Speaker 2: rate by seventy five basis points. So somebody's wrong here, 145 00:08:51,240 --> 00:08:54,160 Speaker 2: and the bond market's basically saying, no Moss, We don't 146 00:08:54,200 --> 00:08:57,040 Speaker 2: need any rate cuts because the economy is doing well 147 00:08:57,040 --> 00:08:59,920 Speaker 2: and the so called neutral rate is higher than FED 148 00:09:00,040 --> 00:09:03,439 Speaker 2: officials believe as evidenced by the strength of the economy. 149 00:09:04,240 --> 00:09:06,760 Speaker 3: So, Ed, what do you think the FED will do? 150 00:09:06,960 --> 00:09:08,640 Speaker 3: And what do you think the Fed maybe should do? 151 00:09:10,120 --> 00:09:12,520 Speaker 2: The Fed should do nothing, which is what they should 152 00:09:12,520 --> 00:09:16,160 Speaker 2: have done last week, But they just won't listen to me. 153 00:09:16,440 --> 00:09:21,080 Speaker 2: I don't know why. What is that They've got their 154 00:09:21,080 --> 00:09:25,360 Speaker 2: own agenda. And look, ever since Jackson holes the speech 155 00:09:25,400 --> 00:09:30,520 Speaker 2: that Powell gave was extraordinarily dubbish. It was almost wokesh 156 00:09:31,000 --> 00:09:35,479 Speaker 2: reminiscent of the kind of focus on just on unemployment 157 00:09:35,559 --> 00:09:38,360 Speaker 2: that we had before the inflation surge of twenty twenty 158 00:09:38,440 --> 00:09:41,640 Speaker 2: two and twenty twenty three. So I think we are 159 00:09:41,679 --> 00:09:45,480 Speaker 2: seeing some stickiness in the inflation rate, the so called 160 00:09:45,520 --> 00:09:49,760 Speaker 2: supercore inflation rate that not too long ago Pouel said 161 00:09:49,840 --> 00:09:52,600 Speaker 2: was a key number. Suddenly he is ignoring that. 162 00:09:53,320 --> 00:09:55,560 Speaker 1: And Yar, Danny, we got to get it on the record. 163 00:09:55,559 --> 00:09:57,800 Speaker 1: You've just been you know, with our question. He equity 164 00:09:57,840 --> 00:10:01,479 Speaker 1: strategist of the last twenty four months. I got futures 165 00:10:01,480 --> 00:10:05,560 Speaker 1: at six thousand and twenty two. Remind us Ed, your Denny. 166 00:10:05,640 --> 00:10:09,240 Speaker 1: Where we are with your seven percent growth rate in 167 00:10:09,400 --> 00:10:13,320 Speaker 1: one three dare I say in ten years? 168 00:10:13,920 --> 00:10:17,880 Speaker 2: Well, when Trump was elected, we thought about it. We 169 00:10:17,920 --> 00:10:20,520 Speaker 2: thought about the animal spirits and what could happen to 170 00:10:21,120 --> 00:10:25,040 Speaker 2: earnings as a result of the profit margin, and we 171 00:10:25,320 --> 00:10:28,600 Speaker 2: turn more bullish. The reality is we haven't been bullish enough, 172 00:10:29,400 --> 00:10:31,400 Speaker 2: and we've been among the most bullish. But so now 173 00:10:31,400 --> 00:10:33,760 Speaker 2: we're looking for sixty one hundred by the end of 174 00:10:33,760 --> 00:10:36,440 Speaker 2: the year on the S and P five hundred's that's 175 00:10:36,480 --> 00:10:40,640 Speaker 2: almost a layup. And then I think we're then we're 176 00:10:40,640 --> 00:10:43,840 Speaker 2: looking for seven thousand by the end of next year, 177 00:10:43,920 --> 00:10:46,880 Speaker 2: and eight thousand by the end of twenty twenty six, 178 00:10:46,920 --> 00:10:50,840 Speaker 2: and eight to ten thousand by the end of the decade, 179 00:10:50,880 --> 00:10:52,640 Speaker 2: probably closer to ten than to eight. 180 00:10:53,679 --> 00:10:56,160 Speaker 1: I want you to fold this, folks of doctor Yar 181 00:10:56,240 --> 00:11:00,400 Speaker 1: Denny with doctor Manil yesterday, to have Alishaman l on 182 00:11:00,800 --> 00:11:05,400 Speaker 1: yesterday on the failure of our retirement plan. And yeah, 183 00:11:05,440 --> 00:11:07,480 Speaker 1: we got to put more money aside. But mostly what 184 00:11:07,520 --> 00:11:09,360 Speaker 1: we have to do is listen to ed yard Denny. 185 00:11:09,920 --> 00:11:13,880 Speaker 1: If you're scared stiff, you're in cash, you're in bonds. 186 00:11:15,080 --> 00:11:18,000 Speaker 1: Maybe you can get the confidence of Yard Denny by 187 00:11:18,040 --> 00:11:21,320 Speaker 1: looking on three years and five years carefully to the 188 00:11:21,400 --> 00:11:23,480 Speaker 1: kind of vector, the kind of glide path he sees. 189 00:11:23,600 --> 00:11:24,720 Speaker 1: Ed Yard Denny, thank you.