WEBVTT - Practical AND Beautiful Investing Advice w/ Callie Cox #983 0:00:00.080 --> 0:00:02.840 Welcome to How to Money. I'm Joel, I'm Matt and 0:00:02.880 --> 0:00:06.840 today we're talking practical and beautiful investing advice with Callie Cox. 0:00:26.000 --> 0:00:28.720 Yeah, so it is time to dive in deep on 0:00:28.960 --> 0:00:32.400 investing during turbulent times. Joel, and we are fortunate to 0:00:32.440 --> 0:00:35.040 be speaking with Callie Cox, who is a part of 0:00:35.080 --> 0:00:38.960 the Ritholtz Wealth management team. Before that, we met her 0:00:38.960 --> 0:00:40.960 back in the day when she was with Ally invest 0:00:41.479 --> 0:00:44.760 E Toro. After that, and now she's also the author 0:00:44.840 --> 0:00:48.440 of Optimistic Cali, her newsletter where she seeks to deliver 0:00:48.720 --> 0:00:52.600 sane and rational advice to every day investors just like us, 0:00:52.920 --> 0:00:53.400 just like you and me. 0:00:53.479 --> 0:00:53.639 Man. 0:00:54.280 --> 0:00:57.120 She works tirelessly day and day out to make investors 0:00:57.120 --> 0:01:00.639 feel confident and informed about their money. And we've got 0:01:00.640 --> 0:01:02.560 a lot to talk about when it comes to investing. 0:01:02.840 --> 0:01:05.600 Folks don't realize that investing like it seems like all 0:01:05.640 --> 0:01:07.920 we talk about, but not to the level at which 0:01:07.920 --> 0:01:09.600 we're going to talk about it today. We're gonna, I 0:01:09.600 --> 0:01:11.040 don't know, We're really gonna get into it with you. 0:01:11.120 --> 0:01:12.520 And I'm excited for this conversation. 0:01:12.800 --> 0:01:14.600 Yeah, I'm psyched too. Thanks for having me. 0:01:14.600 --> 0:01:16.840 Of course. Yeah, you you eat breathe and sleep it. 0:01:16.920 --> 0:01:18.760 We I don't know, we think about a lot more 0:01:18.800 --> 0:01:21.200 than just investing, but so were you're curious to pick 0:01:21.240 --> 0:01:24.080 your brain because we're in interesting times right now. First though, 0:01:24.120 --> 0:01:26.760 we have to ask you what your craft beer equivalent is. 0:01:26.800 --> 0:01:29.400 What do you explore John, even though obviously you're investing 0:01:30.080 --> 0:01:31.160 solidly for your future. 0:01:31.400 --> 0:01:34.119 Well, I told y'all, and so the audience knows. I've 0:01:34.120 --> 0:01:37.039 thought a lot about this, But I my husband and 0:01:37.080 --> 0:01:38.800 I spent a lot of money on food and wine, 0:01:39.080 --> 0:01:41.399 which is a pretty typical answer. I feel like you 0:01:41.400 --> 0:01:44.199 get a lot of foodies. But you know, with us, 0:01:44.440 --> 0:01:46.759 we became obsessed with wine after we went to NAPA 0:01:46.760 --> 0:01:49.880 in twenty twenty one. Of course, during the pandemic, a 0:01:49.920 --> 0:01:52.000 lot of us had nothing better to do than drink 0:01:52.360 --> 0:01:57.320 us So as y'all probably leaned more into bore that out. Yeah, yeah, yeah, 0:01:57.360 --> 0:02:00.600 it's true. It's true. As you guys lean more into beer, 0:02:00.640 --> 0:02:03.280 we leaned more into wine, and after NAPA we were hooked. 0:02:03.360 --> 0:02:06.360 So we're not we're not serious wine collectors, but we 0:02:06.400 --> 0:02:11.400 do like exploring different wines and we love just you know, 0:02:11.480 --> 0:02:13.960 eating out and you know, exploring all the different restaurants 0:02:14.000 --> 0:02:17.160 in Charlotte, and I love to cook. I really like 0:02:17.200 --> 0:02:19.959 getting quality product and you know, cooking at home too, 0:02:20.040 --> 0:02:23.040 So I feel like that's our niche. You know, where 0:02:23.080 --> 0:02:26.040 we lean in when we're leaning out on other things 0:02:26.120 --> 0:02:29.280 like cars. I drive a nine year old camera. It's 0:02:29.320 --> 0:02:32.440 not there are areas that we lean into, areas we 0:02:32.520 --> 0:02:33.280 lean out music. 0:02:34.040 --> 0:02:36.160 I love it. I will say the wine habit too. 0:02:36.320 --> 0:02:39.200 While it can be very expensive similar to graft beer, 0:02:39.560 --> 0:02:42.160 it's not as bad if you're drinking it at home 0:02:42.200 --> 0:02:44.320 and you're making your own food, right, I mean, if 0:02:44.320 --> 0:02:48.200 you're going out, the markup on bottles when you visit 0:02:48.240 --> 0:02:51.680 a nice restaurant is significant. So yeah, drinking that bottle 0:02:51.639 --> 0:02:52.720 at home is going to save you money. 0:02:52.880 --> 0:02:55.320 Yeah, that's absolutely true. There even and I know this 0:02:55.360 --> 0:02:57.840 differs from state to state, but they're even bring your 0:02:57.880 --> 0:03:01.400 own beverage restaurants, bring your own wine restaurants. And we 0:03:01.440 --> 0:03:03.560 have a few good shops in Charlotte where you can 0:03:03.600 --> 0:03:05.920 go and buy wine at retail and they'll serve it 0:03:05.960 --> 0:03:07.960 with you, serve it to you with your dinner. 0:03:08.040 --> 0:03:10.280 But then but then you charge that corkage fee, and 0:03:10.320 --> 0:03:12.200 that just to me feels like a total slap in 0:03:12.200 --> 0:03:14.560 the face. They're like, sure, you can bring your fancy 0:03:14.600 --> 0:03:16.800 stuff from home, but we're going to charge you to 0:03:16.840 --> 0:03:17.200 open it. 0:03:17.280 --> 0:03:19.320 You gotta find a place that doesn't have a corkage fee. 0:03:19.360 --> 0:03:23.080 I know those exist. This is why Calli brings her 0:03:23.120 --> 0:03:25.520 own corkscrew keeps and just pulls it out as neat. 0:03:26.960 --> 0:03:27.880 She's got a little spout. 0:03:27.919 --> 0:03:30.000 They're like, ma'am, what that spout coming out of the 0:03:30.000 --> 0:03:32.520 bottom of your of your bag there, crickler, she's filling 0:03:32.520 --> 0:03:36.400 her glass up under the table. Callie, what is one 0:03:36.600 --> 0:03:40.440 winery next time I happen to go to Napa or 0:03:40.440 --> 0:03:41.640 Sonoma that we got to check out. 0:03:42.440 --> 0:03:43.120 You're a fan of. 0:03:44.200 --> 0:03:48.440 Okay, so Chapole very good. They are a national distributors, 0:03:48.520 --> 0:03:51.320 so I can find a few of Chapoli's bottles in Charlotte. 0:03:51.320 --> 0:03:54.400 So that's that's an accessible one that also has a 0:03:54.440 --> 0:03:57.520 really good tour, really good wine. We also went to 0:03:57.560 --> 0:04:01.400 one called Barnett. It's in the mountains of Napa, and 0:04:01.640 --> 0:04:06.840 Mountain wine has a more like smoky, almost like I 0:04:06.840 --> 0:04:10.200 don't even know how scotchy, kind of scotchy like earthyy 0:04:10.240 --> 0:04:12.240 taste to it because the soil is a little different. 0:04:12.280 --> 0:04:14.720 I think the grapes have to struggle more. But Barnett 0:04:14.720 --> 0:04:17.440 has an incredible wine called the Rattlesnake, and it's a 0:04:17.440 --> 0:04:19.960 little more expensive. It's definitely a splurge for us. But 0:04:20.360 --> 0:04:24.960 the gosh, the mouth feel, I hate saying that. The 0:04:24.960 --> 0:04:27.800 mouth feel and the experience of it is just really 0:04:28.600 --> 0:04:29.440 really complex. 0:04:29.480 --> 0:04:32.440 Okay, I'm speaking about language a winery up in the mountains. 0:04:32.480 --> 0:04:33.760 That sounds incredible. 0:04:33.880 --> 0:04:34.760 So struggling great. 0:04:34.880 --> 0:04:38.359 Yeah, and the views literally wrote that down for some 0:04:38.440 --> 0:04:40.400 time or the future when we might head out there. 0:04:40.440 --> 0:04:43.760 But you know, I didn't mention your title there at 0:04:43.800 --> 0:04:47.200 Red Holts. You are the chief market strategist. What is like, 0:04:47.200 --> 0:04:50.400 what do you actually do? And uh, I've also got 0:04:50.440 --> 0:04:53.320 to think that regardless of what you do, that your 0:04:53.400 --> 0:04:55.400 job might be a little more difficult in times like these. 0:04:55.640 --> 0:04:58.720 Yeah. So I get a lot of questions about that, 0:04:58.800 --> 0:05:01.720 and I totally understand them because they are strategists in 0:05:01.760 --> 0:05:05.560 every industry, and you know, a strategists, we do strategy. 0:05:05.600 --> 0:05:08.360 What does that even mean? I try to describe my 0:05:08.480 --> 0:05:11.320 role as a resident market NERD type role, and of course, 0:05:11.360 --> 0:05:13.520 you know I think about markets a lot, I eat, sleep, 0:05:13.600 --> 0:05:17.080 breathe investing. I know our portfolio is inside and out. 0:05:17.200 --> 0:05:19.520 I talk to clients all the time about how their 0:05:19.560 --> 0:05:23.920 money is invested and how how market moves are affecting 0:05:24.000 --> 0:05:27.159 their money. But in a way, it's also a strategic 0:05:27.200 --> 0:05:30.039 comms role. I'm telling a story, for lack of a 0:05:30.080 --> 0:05:33.280 better phrase, about what's happening in markets, and you know 0:05:33.360 --> 0:05:35.919 why that matters to everyday investors like you and me, 0:05:36.160 --> 0:05:37.919 and thinking about how to tell that story to a 0:05:37.920 --> 0:05:39.039 wide range of audiences. 0:05:40.480 --> 0:05:43.080 At one point recently, so you write a blog, which 0:05:43.080 --> 0:05:44.600 is part of where you do some of the storytelling, 0:05:44.600 --> 0:05:47.360 and you wrote practical advice is a good foundation, but 0:05:47.440 --> 0:05:51.200 everybody needs a bit of beauty. And that's just interesting 0:05:51.480 --> 0:05:53.080 to think that, Oh I need beauty inside of my 0:05:53.080 --> 0:05:56.080 investment portfolio. So I'm curious, why what do you mean 0:05:56.080 --> 0:05:58.600 by that? And what does beautiful investing look like? 0:05:58.880 --> 0:06:01.120 Well I got thinking of this because I read a 0:06:01.120 --> 0:06:03.720 blog from Morgan Housel. So I can't take credit for this. 0:06:04.360 --> 0:06:07.240 I can't take credit for all of this, but Morgan 0:06:07.279 --> 0:06:10.800 wrote a really great blog about magazine architects or architects 0:06:11.200 --> 0:06:15.240 that create these beautiful buildings, ones that you see in 0:06:15.560 --> 0:06:19.360 magazines and architects digest, you know, ones that we all 0:06:19.520 --> 0:06:21.680 drool over because we don't have to live in them, 0:06:21.720 --> 0:06:25.000 but they're really not functional. You know, they don't have 0:06:25.480 --> 0:06:27.440 they don't have the size of the garage that you 0:06:27.480 --> 0:06:29.840 need to like actually you know, keep your car there, 0:06:30.040 --> 0:06:32.960 or you don't. You don't have the right functionality to 0:06:33.040 --> 0:06:36.839 actually live there. And I think the concept of that 0:06:36.960 --> 0:06:39.120 is true for a lot of different areas of our lives. 0:06:39.200 --> 0:06:42.359 And one area that people never talk about that for 0:06:42.640 --> 0:06:46.320 is investing, because all we get is stay invested, stay 0:06:46.320 --> 0:06:48.520 the course, put your money in an index fund, and 0:06:48.960 --> 0:06:52.200 hold it, hold it until you die type advice. And 0:06:52.960 --> 0:06:55.360 you know, I agree with that. I think it's hard 0:06:55.360 --> 0:06:57.520 to make the argument against it. But I also think 0:06:57.520 --> 0:07:01.400 that there's just an ocean of nuancewe queen staying invested 0:07:01.600 --> 0:07:05.159 and you know, you know, kind of being haphazard with 0:07:05.240 --> 0:07:08.240 your money, and that's really important. That's something we talk 0:07:08.279 --> 0:07:10.840 about a lot with our clients here, the fact that 0:07:11.360 --> 0:07:14.240 you know, you have to stay invested. You're investing for decades, 0:07:14.280 --> 0:07:16.360 but we want to make sure that you stay invested, 0:07:16.360 --> 0:07:18.160 and there are things like you can do that kind 0:07:18.160 --> 0:07:21.360 of go against that traditional logic. But I also think 0:07:21.360 --> 0:07:24.200 about it in my own world because like, yes, I 0:07:24.360 --> 0:07:26.600 talk about the benefits of index funds, but even I 0:07:26.680 --> 0:07:30.800 have targets in my portfolio. I sell according to those targets, 0:07:30.840 --> 0:07:33.720 and you know, I am a little bit more active active, 0:07:33.760 --> 0:07:37.080 even though I'd consider myself a long term investor looking 0:07:37.080 --> 0:07:37.760 at retirement. 0:07:38.280 --> 0:07:41.560 What that does it just allows room for humanity and 0:07:41.800 --> 0:07:45.440 like kind of going back to the Morgan househole analogy, like, yeah, 0:07:45.480 --> 0:07:48.880 the reason those look spaces look cool is because they don't. 0:07:48.920 --> 0:07:52.440 Actually they couldn't actually house somebody in real life, or 0:07:52.480 --> 0:07:54.559 the practical needs of a family with a toddler running 0:07:54.600 --> 0:07:58.280 around with sharp edges everywhere, whatever it might be. And 0:07:58.720 --> 0:08:00.320 I think what you're speaking to is the abilit to 0:08:00.360 --> 0:08:03.040 maybe be a bit flexible when it comes to our portfolios, 0:08:02.880 --> 0:08:07.240 as opposed to completely grinning it, bearing it, never checking it, 0:08:07.280 --> 0:08:10.360 because it's really hard to ignore all the news that's 0:08:10.720 --> 0:08:12.800 popping up on our phones that we hear people talk about. 0:08:13.000 --> 0:08:15.600 On that note, can you speak to the current state 0:08:15.640 --> 0:08:18.360 of things? I guess all the volatility that we've felt. 0:08:18.360 --> 0:08:20.840 It feels like we lived a couple of years just 0:08:20.880 --> 0:08:23.000 in the past few months. Can you catch us up 0:08:23.000 --> 0:08:26.120 to speed on let's say, the Trump the initial Trump bump, 0:08:26.200 --> 0:08:30.160 but then the subsequent deflation. Why all this has happened? 0:08:30.320 --> 0:08:33.520 Yeah, well, how much time do we have here? Where 0:08:33.520 --> 0:08:34.000 do I start? 0:08:34.040 --> 0:08:36.040 Seriously, this is a podcast, so many hours? 0:08:36.160 --> 0:08:39.000 Yeah, yeah, we can go as long as it takes, right, So, 0:08:39.600 --> 0:08:41.680 I guess where we'd have to start is in the 0:08:41.679 --> 0:08:43.839 middle of last year. And I think it's important to 0:08:43.920 --> 0:08:47.080 understand where the economy was before we headed into this 0:08:47.200 --> 0:08:49.360 year and had to digest all these policy changes. But 0:08:51.040 --> 0:08:53.600 actually you'd probably have to back up to COVID, but 0:08:53.640 --> 0:08:56.199 I'm not going to do that. Interest rates are actually 0:08:56.240 --> 0:08:58.240 quite high right now. They've come down a little bit 0:08:58.280 --> 0:09:00.679 since the middle of last year, and we've been in 0:09:01.000 --> 0:09:03.280 before this year, we were in this spot with the 0:09:03.320 --> 0:09:06.920 economy where you know, the job market was incredibly resilient. 0:09:07.360 --> 0:09:09.439 We had a year or two where, you know, if 0:09:09.440 --> 0:09:12.599 you're an employee, you had employers begging for you to 0:09:12.679 --> 0:09:16.000 join their companies because demand was way too high. You know, 0:09:16.000 --> 0:09:18.280 if you weren't switching your jobs, then you probably had 0:09:18.600 --> 0:09:22.160 a lot of negotiation leverage at the table. And you 0:09:22.200 --> 0:09:27.160 know that that leverage, that employee power fell more and 0:09:27.200 --> 0:09:30.000 more and more, but at a gradual pace because the 0:09:30.000 --> 0:09:32.160 FED put the brakes on the economy. Interest rates were 0:09:32.240 --> 0:09:34.480 super high, mortgage rates were super high. We were all 0:09:34.520 --> 0:09:38.920 thinking about saving instead of investing and borrowing. And that 0:09:38.960 --> 0:09:40.640 really put us in a place in the middle of 0:09:40.720 --> 0:09:43.320 last year where the FED and when I say the FED, 0:09:43.320 --> 0:09:45.400 I'm talking about the interest rate nerds up in DC 0:09:45.600 --> 0:09:48.199 that you know, basically pull the levers on interest rates. 0:09:48.720 --> 0:09:51.839 The FED looked at the economy and they said, Okay, 0:09:52.000 --> 0:09:54.720 we think there's a risk to going too far here. 0:09:55.520 --> 0:09:58.520 Interest rates are putting a lot of pressure on the economy, 0:09:58.600 --> 0:10:01.360 and we're seeing that pressure bleed into the job market. 0:10:01.800 --> 0:10:05.480 So the FED started bringing rates down. The job market 0:10:05.480 --> 0:10:07.480 got a little bit better at the end of the year, 0:10:07.880 --> 0:10:10.320 but the economy was in a bit of a fragile state. 0:10:10.360 --> 0:10:13.199 And then we moved into this year, and you know, 0:10:13.280 --> 0:10:15.560 we've all seen the headline since then, right. A lot 0:10:15.600 --> 0:10:19.200 of tariff policy that's been put out there, speculated, put 0:10:19.240 --> 0:10:23.040 into place, walked back, put back into place, a lot 0:10:23.120 --> 0:10:27.200 of snip snap decision making. And businesses, both businesses and 0:10:27.200 --> 0:10:30.000 Americans are watching this happen and they're like, I have 0:10:30.160 --> 0:10:34.520 no idea what the future holds. So instead of investing, 0:10:34.600 --> 0:10:37.760 instead of spending my money on big ticket items like 0:10:38.000 --> 0:10:41.120 cars and houses, which by the way, still costs a 0:10:41.160 --> 0:10:44.040 lot of money because interest rates are still high. They've 0:10:44.080 --> 0:10:47.400 decided to stop, and I think that I think the 0:10:47.440 --> 0:10:51.160 pivot point, the big pivot point was April second Liberation Day, 0:10:51.679 --> 0:10:56.040 where we got the list of pretty wide ranging tariffs 0:10:56.080 --> 0:10:58.680 for a lot of different countries and there was a 0:10:58.679 --> 0:11:01.920 lot of back and forth there, but that's really when 0:11:01.960 --> 0:11:04.560 the stock market started dropping like a stone. It was 0:11:04.600 --> 0:11:08.160 down about ten percent up to that point, but in 0:11:08.200 --> 0:11:12.120 the week after that, we saw historical swings, like biggest 0:11:12.120 --> 0:11:14.720 swings that we've seen since the COVID crisis in the 0:11:14.760 --> 0:11:18.800 financial crisis, as people really tried to process what huge 0:11:18.880 --> 0:11:23.840 reciprocal tariffs could mean for their lives, their portfolios, their businesses. 0:11:24.360 --> 0:11:27.440 And that's kind of where we are. We're still processing it. 0:11:27.920 --> 0:11:32.120 Yeah, the reciprocal tariffs that weren't really reciprocal and that 0:11:32.200 --> 0:11:35.800 have been pulled back but not fully rolled back. I 0:11:35.840 --> 0:11:39.760 guess I'm curious too, do you think this new political 0:11:39.800 --> 0:11:43.280 approach and new policy priorities do you think that is 0:11:43.960 --> 0:11:46.640 mostly what we're seeing or it feels like there was 0:11:46.679 --> 0:11:50.360 a lot of talk about an overinflated stock market even 0:11:50.559 --> 0:11:53.439 before Trump took office. Do you think part of what's 0:11:53.480 --> 0:11:56.480 happening to the stock market is a natural pullback that 0:11:56.760 --> 0:11:58.920 occurs when stocks are overvalued. 0:11:59.200 --> 0:12:00.800 I think it's a little bit of both. And I 0:12:00.880 --> 0:12:03.280 hesitate to say that stocks are overvalue because I think 0:12:03.280 --> 0:12:05.440 it's really hard to judge that. So when you're talking 0:12:05.480 --> 0:12:07.600 about valuation, I'm going to make an assumption, but you're 0:12:07.600 --> 0:12:10.959 probably talking about the price to earnings ratio, or where 0:12:11.080 --> 0:12:14.160 earnings are expected to be over the next year and 0:12:14.720 --> 0:12:18.160 where a stock or an index is trading relative to 0:12:18.160 --> 0:12:22.360 those earnings. Right, Yeah, Okay, so pe price to earnings 0:12:22.440 --> 0:12:24.920 ratio is a really it's a good way to judge 0:12:24.920 --> 0:12:28.520 how stocks are valued, but it's hard to say. I'm 0:12:28.559 --> 0:12:29.960 trying to think of the right way to say this. 0:12:30.000 --> 0:12:32.240 It's hard to it's hard to say where they should 0:12:32.280 --> 0:12:36.080 be valued because that price to earnings ratio can price 0:12:36.120 --> 0:12:38.440 in a lot of hope, you know, a lot of 0:12:38.520 --> 0:12:41.280 dreams about AI, a lot of optimism about. 0:12:41.000 --> 0:12:44.120 The future, and values in the eye of the beholder. 0:12:44.120 --> 0:12:46.280 A little bit value is in the eye of the beholder. 0:12:46.320 --> 0:12:48.320 You know, there are designer shirts, there are shirts that 0:12:48.320 --> 0:12:50.000 you get off the rack at Walmart. They're made with 0:12:50.040 --> 0:12:53.000 the same fabrics, but you're paying different prices, right, same 0:12:53.040 --> 0:12:57.040 thing with the price to earnings ratio, And in most environments, 0:12:57.040 --> 0:13:00.520 a higher PE is actually okay. It's okay, tod, it's 0:13:00.559 --> 0:13:03.320 okay to think about where tech stocks could be going 0:13:03.360 --> 0:13:05.880 in the future. Just because the PE is high doesn't 0:13:05.880 --> 0:13:08.439 mean the market's about to crash. The problem is when 0:13:09.040 --> 0:13:13.000 you start to see economic cracks, right, and that's when 0:13:13.240 --> 0:13:16.200 the optimism starts to fade. That's when you should probably 0:13:16.280 --> 0:13:20.920 expect the PE to start falling because because again, you know, 0:13:21.000 --> 0:13:24.199 expectations for the future start to fall, and then actual earnings, 0:13:24.240 --> 0:13:26.760 if it gets bad enough, will start to fall as well. 0:13:27.240 --> 0:13:30.200 And that's the moment that we're in right now, where yeah, 0:13:30.240 --> 0:13:32.640 you're probably looking back and saying, Okay, the stock market 0:13:32.679 --> 0:13:36.839 is probably richly valued or too high for what could 0:13:36.880 --> 0:13:40.680 be coming. But yeah, what you brought up is actually 0:13:40.840 --> 0:13:44.480 really important too. You know, the stock market sells off 0:13:44.520 --> 0:13:47.720 in healthy economies. This in a way is kind of 0:13:47.760 --> 0:13:50.080 part of the process. And we're coming off two incredible 0:13:50.160 --> 0:13:52.559 years in the stock market. I mean twenty percent back 0:13:52.600 --> 0:13:54.320 to back gains in the S and P five hundred. 0:13:55.040 --> 0:13:57.280 That's true, we're not going to talk about teriffs the 0:13:57.400 --> 0:13:58.520 entire time. 0:13:58.800 --> 0:13:59.760 But ken if you want. 0:14:00.160 --> 0:14:01.760 I feel like our listeners have had enough. I feel 0:14:01.760 --> 0:14:04.080 like I've had enough, to be honest, because I feel 0:14:04.080 --> 0:14:05.840 like so much if they haven't had enough with us, 0:14:06.679 --> 0:14:09.200 I feel like a lot of it is overblown, And 0:14:09.600 --> 0:14:11.920 at least at the time of this recording, we haven't 0:14:12.040 --> 0:14:14.640 yet feel like businesses are looking ahead because they're looking 0:14:14.679 --> 0:14:17.199 at quarters at a time, and especially small businesses and 0:14:17.240 --> 0:14:20.360 how they're impacted by terras and the foreign availability of 0:14:20.400 --> 0:14:23.320 goods that they need as inputs to run their businesses right. 0:14:23.360 --> 0:14:27.080 But as consumers, a lot of folks haven't seen significant 0:14:27.120 --> 0:14:29.800 increases when it comes to when it comes to prices, 0:14:29.840 --> 0:14:31.880 and that was one of the biggest things that the 0:14:31.880 --> 0:14:34.560 market was reacting to. Do you feel that the whole 0:14:34.640 --> 0:14:38.600 terrorist thing is overblown or is it just it's more 0:14:38.600 --> 0:14:40.280 complex and it's just going to take longer for it 0:14:40.360 --> 0:14:42.960 to trickle through the system before we start seeing the headlines, 0:14:43.000 --> 0:14:45.200 before we start seeing the lines of folks lining up 0:14:45.240 --> 0:14:46.200 at stores, that kind of thing. 0:14:46.520 --> 0:14:49.960 I think it's happening. So Liberation Day was April second, 0:14:50.120 --> 0:14:53.760 so there's been about four weeks between that initial announcement 0:14:53.800 --> 0:14:57.680 Trump with the poster and know us recording today. That's 0:14:57.680 --> 0:14:59.920 about the time it takes from a ship to move 0:15:00.320 --> 0:15:02.520 to go from China to the port of Los Angeles, 0:15:02.560 --> 0:15:05.000 for those goods to be unloaded and finally make it 0:15:05.040 --> 0:15:07.600 to their final destination. That stuff takes time. That's a 0:15:07.640 --> 0:15:10.760 long journey. So what we're seeing right now is that 0:15:11.160 --> 0:15:14.400 port volumes are coming down, which is concerning. That means 0:15:14.480 --> 0:15:19.240 that there actually is some There are inventory changes that 0:15:19.280 --> 0:15:22.720 are happening on the back of these dramatic tariffs, especially 0:15:22.720 --> 0:15:26.680 coming from China. And look, once that's happening, it's gonna 0:15:26.760 --> 0:15:28.560 roll through the system and you're gonna see it in 0:15:28.600 --> 0:15:31.960 some way or another, empty shelves, higher prices, mix of 0:15:32.000 --> 0:15:36.520 the two. That is anybody's guess. What worries me is 0:15:36.520 --> 0:15:40.680 that we're starting to see indications through company earnings reports 0:15:40.720 --> 0:15:44.280 and through more bird's eye view. Macro reports that a 0:15:44.320 --> 0:15:47.960 lot of companies feel comfortable passing along those prices, which 0:15:47.960 --> 0:15:49.920 means you and I when we go to the store, 0:15:50.120 --> 0:15:53.040 we're going to pay higher prices for those goods. The 0:15:53.080 --> 0:15:55.960 companies aren't just going to eat that cost. 0:15:56.480 --> 0:16:01.440 Yeah, yeah, I'm curious too, how much of an impact 0:16:01.640 --> 0:16:06.800 like foreign backlash against tariffs, Like what could the ramifications 0:16:06.840 --> 0:16:10.320 be there? We've already seen Canadians saying I'm not vacationing 0:16:10.560 --> 0:16:13.600 in the United States anymore, and just far fewer people 0:16:14.280 --> 0:16:18.040 from just north are are coming down, and it's you know, 0:16:18.240 --> 0:16:21.240 hurting our tourism industry. And you wrote something about I 0:16:21.240 --> 0:16:24.320 think foreign consumers can essentially cause a lot of pain 0:16:24.400 --> 0:16:27.440 for Corporate America. Do you think those boycotts from other 0:16:27.480 --> 0:16:31.840 countries because of the way we're acting could have other 0:16:31.920 --> 0:16:32.800 ramifications too. 0:16:33.040 --> 0:16:34.800 You know, I worry a lot about this because I 0:16:34.840 --> 0:16:37.240 think it's hard to quantify the eventual impact, but we 0:16:37.320 --> 0:16:39.480 know the impact could be big. And that's actually why 0:16:39.520 --> 0:16:43.000 I wrote the Boycott American newsletter. I wasn't saying boycott America, 0:16:43.040 --> 0:16:44.480 but what I was trying to do is put some 0:16:44.600 --> 0:16:51.760 numbers behind how interwoven foreign consumers, foreign tourists, foreign investors 0:16:51.880 --> 0:16:55.560 are in our markets and the travel. The travel part 0:16:55.600 --> 0:16:58.040 is interesting because we've already started to see data and 0:16:58.640 --> 0:17:02.200 really interesting color from travel companies on how foreign bookings 0:17:02.240 --> 0:17:05.119 are down. So we heard it from Delta, I believe 0:17:05.160 --> 0:17:07.879 we heard it from American in the past few weeks 0:17:08.240 --> 0:17:12.760 they've seen bookings come down, especially international bookings foreign tourists 0:17:12.800 --> 0:17:16.520 coming into the US. And I saw a report from 0:17:16.720 --> 0:17:20.879 a Canadian travel consulting company and like, look, this is 0:17:21.000 --> 0:17:23.960 this is one report, but it's backed up by a 0:17:23.960 --> 0:17:26.359 lot of color that we're seeing or that we're hearing. 0:17:26.800 --> 0:17:30.240 But this one report from the Canadian travel consulting company 0:17:30.359 --> 0:17:33.800 said that Canadian bookings of travel into the US are 0:17:33.840 --> 0:17:37.639 down seventy percent year every year, which is a huge number. 0:17:38.119 --> 0:17:41.399 It's a scary number. And I don't take one piece 0:17:41.400 --> 0:17:44.399 of data and you know, un run down a rabbit 0:17:44.400 --> 0:17:46.520 hole with that. I don't think that's smart for anybody 0:17:46.560 --> 0:17:49.360 to do, but it should, at the very least make 0:17:49.400 --> 0:17:51.800 you think a little bit about, you know, the second 0:17:51.920 --> 0:17:54.440 order consequences or the second order effects of what could 0:17:54.440 --> 0:17:57.199 be going on here and in markets. I don't know 0:17:57.240 --> 0:17:59.760 if a lot of people know this. I certainly wouldn't 0:17:59.760 --> 0:18:02.880 know if I didn't work in finance, but foreign investors 0:18:02.880 --> 0:18:05.080 have been major buyers of stocks and bonds over the 0:18:05.119 --> 0:18:09.160 past several years, primarily because we have the biggest and best, 0:18:09.400 --> 0:18:12.359 most innovative companies in the world. I mean, everybody wants 0:18:12.359 --> 0:18:16.040 to invest in Apple, right, but on the bond side, 0:18:16.040 --> 0:18:20.560 we also have an incredibly deep and incredibly rich and 0:18:20.880 --> 0:18:24.719 volume heavy marketing government det it's called the treasury market, 0:18:24.800 --> 0:18:28.240 and foreign investors have been turning more and more to 0:18:29.000 --> 0:18:32.600 treasuries to hedge their portfolios and to get a nice 0:18:32.640 --> 0:18:35.360 stable source of yield. So we have to step back 0:18:35.359 --> 0:18:38.159 and consider that some of that, maybe all of that 0:18:38.200 --> 0:18:39.160 could be at risk here. 0:18:39.680 --> 0:18:40.760 Yeah, and so much of that. 0:18:41.119 --> 0:18:43.440 It's a slow burn. I think that's what I'm coming 0:18:43.440 --> 0:18:46.520 to terms with. When it's between the news the headlines 0:18:46.560 --> 0:18:49.600 Trump making changes to tear us or to following through 0:18:49.680 --> 0:18:53.440 or pulling back in the stock market, it's incredibly reactionary. 0:18:53.640 --> 0:18:55.600 And we see day and now I mean not even 0:18:55.680 --> 0:18:57.720 day to day changes like minutes a minute, hour by 0:18:57.760 --> 0:19:00.119 hour sort of changes. But when it comes to some 0:19:00.119 --> 0:19:02.320 of these higher prices, and what you said is totally true, right, 0:19:02.600 --> 0:19:05.440 We've seen the reports of the empty cargo ships showing 0:19:05.520 --> 0:19:07.359 up at port because they're like, all right, we got 0:19:07.400 --> 0:19:09.840 to keep moving. And at some point, if there are 0:19:09.880 --> 0:19:13.800 no goods, we might be bound to see higher prices 0:19:14.160 --> 0:19:17.800 less availability of goods on the shelves. But from an 0:19:17.800 --> 0:19:21.560 investing standpoint, what should we do, Like how should folks 0:19:21.680 --> 0:19:24.840 respond to the different pieces of news that they come across, 0:19:24.880 --> 0:19:27.760 because kind of going back to the beginning of our conversation, 0:19:27.840 --> 0:19:31.480 you're talking about having beauty, you're investing being beautiful. 0:19:31.840 --> 0:19:33.119 I feel like a part of what you're. 0:19:32.960 --> 0:19:35.800 Saying there is to take into account the fact that 0:19:35.840 --> 0:19:37.240 there are going to be things that you're going to 0:19:37.280 --> 0:19:40.159 want to want to react to and to allow for 0:19:40.240 --> 0:19:43.120 some of that humanity to play out in our investing. 0:19:43.119 --> 0:19:44.080 Would you recommend that? 0:19:44.520 --> 0:19:46.600 Yeah, I think that's a good place to start, and 0:19:46.680 --> 0:19:49.200 I just want to add something else on that practicality 0:19:49.280 --> 0:19:53.240 versus beauty comment. You know, a lot of client conversations 0:19:53.240 --> 0:19:55.199 we have, and a lot of conversations I'm having with 0:19:55.240 --> 0:19:58.040 friends and family right now are what to do. And 0:19:58.160 --> 0:19:59.800 usually the options that they see in front of them 0:19:59.840 --> 0:20:02.040 are to sell everything and run for the hills, or 0:20:02.560 --> 0:20:05.160