Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Single best idea and a theme that just came to me.
Speaker 2: Trust me. We wanted to go out to McKinsey or
Speaker 2: Bain to consult on what the theme should be to
Speaker 2: the end of the year. We didn't do that. I
Speaker 2: just came into my little puny head here somewhere between
Speaker 2: from the food court. Should I have the almonds or
Speaker 2: the dried apricots and the answers I went with both
Speaker 2: this morning, and with that I came up with a theme,
Speaker 2: this great bullmarket. Now I'm not predicting a continued bullmarket,
Speaker 2: but the humbling sense from December of twenty eighteen with
Speaker 2: Ben Ladler's great call at HSBC get on board, buy equities,
Speaker 2: and I'll bring it out to another crystal clear moment.
Speaker 2: Autumn of two thousand twenty two were separately and for
Speaker 2: different reasons, ed Yard Denny and ralph An Kompora the
Speaker 2: legend of technical analysis. Denny and ankorpor are said, for
Speaker 2: different reasons, get on board. Remember that after the pandemic
Speaker 2: that in October twenty twenty two. So here we are.
Speaker 2: I don't want to appine in the market, but the
Speaker 2: basic idea is talk to people informed. Waylee, is it
Speaker 2: Blackrock Global strategists there with prodigious mathematics skills look for
Speaker 2: her on LinkedIn. It's a reason just you know, get
Speaker 2: organized on LinkedIn to look for way Lee w E
Speaker 2: I l I waylea of black Rock on the View Forward.
Speaker 2: I asked her about David Conston's report at Golden Sachs
Speaker 2: modeling out a regression to the mean bringing single digit
Speaker 2: returns forward from this great bull market down to an
Speaker 2: annualized three ish low single digit percentage point. Waylee disagrees.
Speaker 1: We actually took an inspiration from that analysis to try
Speaker 1: to understand if the measure of concentration, which is to
Speaker 1: look at the market cup of the biggest company versus
Speaker 1: the seventy fifth personel and look at that racial right
Speaker 1: by that measure, us a credit market is close to
Speaker 1: the most concentrated in almost one hundred years, and we
Speaker 1: try to understand, okay, that concentration does it have significant
Speaker 1: varying on subsequent market return over twelve months, over ten years.
Speaker 1: The verdict of that analysis, inspired by the research, a
Speaker 1: piece of research that you're referring to, is that over
Speaker 1: the very near term horizon, let's say, investing for twenty
Speaker 1: twenty five, concentration doesn't have significant bearing and over the
Speaker 1: longer term in a mean revert environment then it has
Speaker 1: significant varying. But we're not in the mean revert environment.
Speaker 1: So we continue to think that erniest can come through.
Speaker 1: For next year, we're looking at high single digit return expectation,
Speaker 1: and there is reason in the context of US exceptionalism
Speaker 1: for US to lean more into US equities, which is
Speaker 1: what we're doing for this outlook.
Speaker 2: I can't say enough, folks, that idea of not mean
Speaker 2: reversion sets up the arch debate forward for those of
Speaker 2: you in the bull market or those of you seeing
Speaker 2: this great bull market from a distance, the idea that
Speaker 2: we're not going to mean revert to some lower frame
Speaker 2: and that we're going to come in higher and then
Speaker 2: you know what the pro say is high single digits,
Speaker 2: low single digits, but those are huge percentage changes to
Speaker 2: participate over two years, three years, five years, and ten years.
Speaker 2: Way Lee of black Rock, and we continue where they're
Speaker 2: here very quickly, wayly on what you don't own enough
Speaker 2: of mag seven.
Speaker 1: Meg seven multiple is thirty times and at the beginning
Speaker 1: of twenty twenty two it was thirty five times. At
Speaker 1: the inception of chat GBT late twenty twenty three two
Speaker 1: it was twenty five times. So it is expensive, but
Speaker 1: it's not extremely expensive. There are good reasons earn is
Speaker 1: momentum that supports those valuations, you know, like MI revert.
Speaker 1: If we're talking about an index that has become more
Speaker 1: growthy in nature over time, then the meme needs to
Speaker 1: reflect the more growthy nature of the benchmark. So we
Speaker 1: continue to like MAXI seven, but we have broughten out
Speaker 1: how we play the AI theme.
Speaker 2: Wayly of black Rock and again a greater dandem to this.
Speaker 2: The one I think of that's equally engaged in LinkedIn
Speaker 2: is Urine timor over at fidelity. The value of reading
Speaker 2: not glancing at but reading Urine timor t I M
Speaker 2: M E r Urine timor Fidelity and wayly of black
Speaker 2: Rock out on LinkedIn. Folks, you'd have to pay a
Speaker 2: ten thousand dollars fee just to have a cup of
Speaker 2: senca with either of them. Within the reality of Global
Speaker 2: Wall Street. I can't say enough about Whaley's value add
Speaker 2: on black Rock out on LinkedIn. All I can say
Speaker 2: is this podcast is building. Frankly, it's been off my radar,
Speaker 2: but we're going to promote it very much so in
Speaker 2: the new year, we say thank you to all of
Speaker 2: you on your commute across the nation on Applecarplay, Android
Speaker 2: Auto Serious XM Channel one twenty one. Had no idea
Speaker 2: how big that audience was. Good morning in the quarter
Speaker 2: of ninety ninety one Washington, Bloomberg eleven three to zero
Speaker 2: in New York at ninety two nine in Boston. Please
Speaker 2: subscribe to Bloomberg podcasts on YouTube. This is single best
Speaker 2: idea