1
00:00:00,080 --> 00:00:02,680
Speaker 1: The first print here off Lisa's great data check is

2
00:00:02,759 --> 00:00:06,240
Speaker 1: up five ninety five on the dough. What a perfect

3
00:00:06,280 --> 00:00:10,280
Speaker 1: moment to speak to mister Eisman with the newbury. Berman claimed

4
00:00:10,280 --> 00:00:12,119
Speaker 1: in a movie of a few years ago, look for

5
00:00:12,200 --> 00:00:17,639
Speaker 1: the new Heisman Hollywood property. I think it's a Memorial Day, Paul.

6
00:00:18,040 --> 00:00:19,000
Speaker 1: Memorial Day's a good.

7
00:00:18,840 --> 00:00:21,040
Speaker 2: Opening, sure, you know, I guess it's very good. Look

8
00:00:21,079 --> 00:00:21,960
Speaker 2: for Bear Squeeze.

9
00:00:22,000 --> 00:00:26,160
Speaker 1: You're going to see that Memorial Day twenty twenty five, Steve,

10
00:00:26,480 --> 00:00:28,600
Speaker 1: is this just one big short cover? We got the

11
00:00:28,640 --> 00:00:31,160
Speaker 1: wall of money out there? Lawrence McDonald, who has been

12
00:00:31,200 --> 00:00:34,279
Speaker 1: brilliant on this with the action yesterday, is it an

13
00:00:34,320 --> 00:00:36,400
Speaker 1: indirect short cover going on?

14
00:00:38,159 --> 00:00:41,640
Speaker 2: That's too sophisticated for me. I mean, I find the

15
00:00:41,720 --> 00:00:46,680
Speaker 2: whole incredible amount of energy that people spend on the

16
00:00:46,720 --> 00:00:51,960
Speaker 2: Fed day more amusing than informative. You know, think about

17
00:00:52,000 --> 00:00:54,000
Speaker 2: it for a second, and how much ink was spilt

18
00:00:54,040 --> 00:00:56,680
Speaker 2: about whether the Fed with lower twenty five or fifty.

19
00:00:56,720 --> 00:00:58,720
Speaker 2: All right, so they lowered fifty, and then what happened?

20
00:00:58,760 --> 00:01:02,400
Speaker 2: The market had no reaction, just went up and down.

21
00:01:02,440 --> 00:01:07,520
Speaker 2: Nobody knew what to do. And today the market's up huge,

22
00:01:08,319 --> 00:01:12,440
Speaker 2: but rates are higher. So you know you put it

23
00:01:12,520 --> 00:01:15,920
Speaker 2: all together. I tried not to spend too much time

24
00:01:15,959 --> 00:01:18,120
Speaker 2: trying to figure it out. All I care about is

25
00:01:19,120 --> 00:01:22,840
Speaker 2: the general direction of the FED is lower. How much lower?

26
00:01:23,160 --> 00:01:26,160
Speaker 2: I don't particularly care. I don't think that's particularly important.

27
00:01:26,200 --> 00:01:29,880
Speaker 2: The more important question is how's the economy. Economy is slowed,

28
00:01:29,880 --> 00:01:32,319
Speaker 2: but the data seems to indicate that the economy is fine,

29
00:01:32,360 --> 00:01:34,280
Speaker 2: and that's all that really matters.

30
00:01:34,480 --> 00:01:37,360
Speaker 3: So what other than you, I guess, in the context

31
00:01:37,360 --> 00:01:39,720
Speaker 3: of the economy, what are the drivers for kind of

32
00:01:40,000 --> 00:01:42,560
Speaker 3: whether you're bullish or bearish. What's some of the big

33
00:01:42,680 --> 00:01:43,399
Speaker 3: variables that you've find.

34
00:01:43,760 --> 00:01:48,800
Speaker 2: I've gotten thematic more thematic in the last bunch of years,

35
00:01:48,880 --> 00:01:53,760
Speaker 2: and I think that there are two great equity themes

36
00:01:53,800 --> 00:01:58,040
Speaker 2: of our time, and we try and focus our portfolios

37
00:01:58,080 --> 00:02:02,000
Speaker 2: as much as reasonable on those themes are AI slash

38
00:02:02,080 --> 00:02:09,480
Speaker 2: tech and infrastructure. And I think those themes will last

39
00:02:09,480 --> 00:02:12,239
Speaker 2: for years. They'll be variations, you know, on the infrastructure

40
00:02:12,280 --> 00:02:15,360
Speaker 2: side there you know, politics do matter, but the overall

41
00:02:15,400 --> 00:02:16,800
Speaker 2: theme will continue. Paul, let me.

42
00:02:16,800 --> 00:02:19,120
Speaker 1: Interrupt with the data check here as a market surge,

43
00:02:19,200 --> 00:02:21,680
Speaker 1: Dow up five hundred and sixty six points on a

44
00:02:21,720 --> 00:02:24,960
Speaker 1: percentage basis, The market lifts here at nine thirty three,

45
00:02:25,400 --> 00:02:29,040
Speaker 1: greater than the futures nastacup two point three percent. As

46
00:02:29,040 --> 00:02:32,840
Speaker 1: Paul predicted, the vis comes in sixteen point four zero on.

47
00:02:32,840 --> 00:02:36,240
Speaker 3: The AI trade, Steve, how do you suggest people play it?

48
00:02:36,280 --> 00:02:38,000
Speaker 3: I think the first name people kind of jumped on

49
00:02:38,120 --> 00:02:40,080
Speaker 3: was in Nvidia for good reason, because they put up

50
00:02:39,880 --> 00:02:41,920
Speaker 3: that big revenue prints a couple.

51
00:02:41,760 --> 00:02:42,280
Speaker 2: Of years ago.

52
00:02:42,560 --> 00:02:44,120
Speaker 3: How else are you trying to play this?

53
00:02:44,960 --> 00:02:47,880
Speaker 2: So, I mean the way we play it is where

54
00:02:47,919 --> 00:02:50,840
Speaker 2: most people are playing it, in Vidia, some other chip companies,

55
00:02:52,639 --> 00:02:57,840
Speaker 2: the very large companies with massive databases. You know, then

56
00:02:57,880 --> 00:03:01,160
Speaker 2: the question becomes, you know what apps and who's going

57
00:03:01,200 --> 00:03:02,959
Speaker 2: to create them are going to work? And I think

58
00:03:02,960 --> 00:03:05,679
Speaker 2: that is so early right now that it's really not

59
00:03:05,800 --> 00:03:09,320
Speaker 2: worth talking about. You know, just as an example, the

60
00:03:09,400 --> 00:03:12,600
Speaker 2: part of the business of accenture that is doing extremely

61
00:03:12,680 --> 00:03:15,880
Speaker 2: well is not the consulting side, which would do when

62
00:03:16,080 --> 00:03:18,760
Speaker 2: companies are spending a lot of money on AI. It's

63
00:03:18,840 --> 00:03:22,040
Speaker 2: the outsourcing side. And the reason why the outsourcing side

64
00:03:22,080 --> 00:03:25,920
Speaker 2: is doing well is that most S and P companies

65
00:03:26,720 --> 00:03:30,679
Speaker 2: do not have their data sufficiently in one place, structured

66
00:03:30,680 --> 00:03:33,680
Speaker 2: appropriately to even do anything with respect to AI. So

67
00:03:34,040 --> 00:03:38,119
Speaker 2: it's very very early in the AI story. The one

68
00:03:39,840 --> 00:03:42,839
Speaker 2: longer term theme that we've been thinking about, although it's

69
00:03:42,840 --> 00:03:45,840
Speaker 2: so long time I don't know quite what to do

70
00:03:45,880 --> 00:03:48,120
Speaker 2: with it yet, is I think there's a good argument

71
00:03:48,200 --> 00:03:53,800
Speaker 2: to be made that we have seen hardware rerate up

72
00:03:54,080 --> 00:03:58,000
Speaker 2: and software somewhat de rate, and I think it's possible

73
00:03:58,040 --> 00:04:01,320
Speaker 2: that AI could cause that to continue, because it's possible

74
00:04:01,920 --> 00:04:05,200
Speaker 2: that the cost of creating software because of AI is

75
00:04:05,240 --> 00:04:08,280
Speaker 2: going to plummet. And if that's the case, some of

76
00:04:08,320 --> 00:04:12,640
Speaker 2: the iconic software companies out there may not have motes

77
00:04:12,680 --> 00:04:14,280
Speaker 2: around their businesses that are quite as.

78
00:04:14,240 --> 00:04:16,479
Speaker 1: High as they used to be, within the skill set

79
00:04:16,560 --> 00:04:19,760
Speaker 1: that you've earned. And at Newburg or Berman, do you

80
00:04:19,880 --> 00:04:25,360
Speaker 1: people believe the capex expenditure of technology is being done

81
00:04:25,480 --> 00:04:30,880
Speaker 1: intelligently and efficiently or is there wasted money being squandered

82
00:04:30,920 --> 00:04:31,880
Speaker 1: away on AI?

83
00:04:33,480 --> 00:04:36,200
Speaker 2: I mean, I'm sure both. It's you know, we won't know.

84
00:04:36,360 --> 00:04:38,359
Speaker 2: We won't know the answer to that question for years,

85
00:04:38,360 --> 00:04:40,520
Speaker 2: so I don't think it's worth trying to figure that

86
00:04:40,520 --> 00:04:41,239
Speaker 2: out at this point.

87
00:04:41,960 --> 00:04:43,200
Speaker 3: So how else do you think?

88
00:04:43,240 --> 00:04:43,919
Speaker 2: I mean, it's.

89
00:04:45,440 --> 00:04:47,440
Speaker 3: Are you A lot of folks are concerned about this.

90
00:04:47,480 --> 00:04:50,400
Speaker 3: Mag seven is concentration risk, just as a market concern.

91
00:04:50,640 --> 00:04:52,880
Speaker 3: Do you have this market structure concern that so much

92
00:04:52,920 --> 00:04:55,400
Speaker 3: of this market is weighted towards these MAG seven ors

93
00:04:55,400 --> 00:04:56,840
Speaker 3: that beyond kind.

94
00:04:56,760 --> 00:04:59,360
Speaker 2: Of Hey, well, I think one interesting aspect of that,

95
00:05:00,279 --> 00:05:05,960
Speaker 2: and I'll come to that is that many active managers,

96
00:05:05,960 --> 00:05:11,680
Speaker 2: probably more on the institutional side, underperform because their risk

97
00:05:11,720 --> 00:05:15,040
Speaker 2: parameters don't allow them to overweight the MAG seven because

98
00:05:15,040 --> 00:05:21,839
Speaker 2: the MEGS is so big and it's probably going to continue.

99
00:05:22,480 --> 00:05:25,000
Speaker 2: I don't think we will really see a broadening out

100
00:05:25,080 --> 00:05:29,040
Speaker 2: until we see apps come out so that some of

101
00:05:29,080 --> 00:05:31,080
Speaker 2: the middle more middle companies can do that. But that's

102
00:05:31,120 --> 00:05:32,120
Speaker 2: we're ways away from that.

103
00:05:32,200 --> 00:05:34,840
Speaker 1: Do you have a favorite MAG seven? Is there one

104
00:05:34,839 --> 00:05:35,120
Speaker 1: where you.

105
00:05:35,279 --> 00:05:38,160
Speaker 2: I don't want to talk about individual stocks. I'm just

106
00:05:38,160 --> 00:05:39,680
Speaker 2: not going to do that, all right. I get into

107
00:05:39,800 --> 00:05:40,960
Speaker 2: my firm gets me into trouble.

108
00:05:41,839 --> 00:05:43,760
Speaker 3: The firm gets you into trouble. You don't get yourself

109
00:05:43,760 --> 00:05:48,400
Speaker 3: into trouble. Okay, I got it on there. Just on

110
00:05:48,440 --> 00:05:51,279
Speaker 3: the infrastructure theme, yes, do I go out there and

111
00:05:51,320 --> 00:05:54,760
Speaker 3: just buy like Cummings and Engines and well.

112
00:05:55,000 --> 00:05:57,520
Speaker 2: Let let me talk about that because politics are important, Okay.

113
00:05:58,360 --> 00:06:01,880
Speaker 2: So I think that there are four mega infrastructure themes

114
00:06:02,000 --> 00:06:07,360
Speaker 2: and then there's a fifth. The four are on shoring.

115
00:06:08,320 --> 00:06:13,159
Speaker 2: The second is you know, improvement of the grid yep.

116
00:06:13,360 --> 00:06:16,280
Speaker 2: The third is everything having to do with actually building

117
00:06:16,320 --> 00:06:18,919
Speaker 2: the data centers and that there is overlap there with

118
00:06:19,000 --> 00:06:22,000
Speaker 2: the grid. And then there's then there's gratification, and then

119
00:06:22,040 --> 00:06:24,799
Speaker 2: there's all the bills that guid in pass to shove

120
00:06:24,839 --> 00:06:28,560
Speaker 2: money into all four boxes. You know where the politics

121
00:06:28,680 --> 00:06:33,040
Speaker 2: can become important is you know, I'll do to extreme cases.

122
00:06:33,040 --> 00:06:37,240
Speaker 2: If Trump sweeps, gratifications are going to get de emphasized,

123
00:06:37,640 --> 00:06:42,680
Speaker 2: and if Harris sweeps, you know, gratification will get re emphasized.

124
00:06:42,720 --> 00:06:45,440
Speaker 2: So that's important. So the politics here are important.

125
00:06:45,720 --> 00:06:47,960
Speaker 1: Steve Weisman with us, and we will continue here. Let

126
00:06:48,000 --> 00:06:49,640
Speaker 1: me do a data check here with the markets and

127
00:06:49,680 --> 00:06:54,600
Speaker 1: the move SPX Dow records, Dow up five and forty

128
00:06:54,640 --> 00:06:57,760
Speaker 1: points to the solid forty two thousand print on the

129
00:06:57,800 --> 00:07:02,440
Speaker 1: Dow fifty seven hundred, sp up eighty six points, Nasdaq

130
00:07:02,600 --> 00:07:03,760
Speaker 1: one two point.

131
00:07:04,800 --> 00:07:08,680
Speaker 3: Steve Isison, Steve, how how concerned are you if at all?

132
00:07:08,920 --> 00:07:11,480
Speaker 2: We're not on right now? What's on? We're we're on,

133
00:07:11,480 --> 00:07:13,280
Speaker 2: We're on all. It's far radio. It's hard to tell you.

134
00:07:13,360 --> 00:07:16,080
Speaker 3: Yeah, the red light you make it easy the red

135
00:07:16,160 --> 00:07:19,240
Speaker 3: light when why, yes, that's that's for me.

136
00:07:19,440 --> 00:07:22,360
Speaker 2: I just learned something exactly all right, valuation.

137
00:07:22,480 --> 00:07:25,760
Speaker 3: How concerned are you, if at all, about this market broadly?

138
00:07:26,400 --> 00:07:30,720
Speaker 2: You know, I think I learned this lesson in the

139
00:07:30,760 --> 00:07:33,840
Speaker 2: dot com bust. So you know, when when dot com

140
00:07:33,920 --> 00:07:36,800
Speaker 2: was rocking and rolling, everybody was yelling and screaming about evaluation.

141
00:07:37,480 --> 00:07:43,040
Speaker 2: But that didn't matter until there was a recession and

142
00:07:43,120 --> 00:07:45,040
Speaker 2: it turned out that a lot of these companies had

143
00:07:45,040 --> 00:07:50,360
Speaker 2: actually fundamental problems. So I don't spend I mean, generally speaking,

144
00:07:50,440 --> 00:07:52,200
Speaker 2: I'm not going to invest in a company that sells

145
00:07:52,200 --> 00:07:54,400
Speaker 2: at one thousand PE. That's just not what I do.

146
00:07:54,920 --> 00:07:59,440
Speaker 2: But we'll invest in some high PE stocks. I just

147
00:07:59,480 --> 00:08:02,680
Speaker 2: don't feel feel like it's as long as the economy

148
00:08:02,720 --> 00:08:06,040
Speaker 2: is fine. It's not. It's more of an academic exercise

149
00:08:06,080 --> 00:08:06,840
Speaker 2: than anything else.

150
00:08:07,200 --> 00:08:09,160
Speaker 3: So the economy, I mean, from what we're hearing from you,

151
00:08:09,320 --> 00:08:13,720
Speaker 3: the economy really is underpinning almost everything. You have the foundation,

152
00:08:13,800 --> 00:08:16,960
Speaker 3: I guess how you view investments correct. Okay, how about

153
00:08:16,960 --> 00:08:18,840
Speaker 3: on the fixed income side, what do we do there?

154
00:08:19,000 --> 00:08:20,560
Speaker 3: I mean, I can sit in it to your treasury.

155
00:08:20,600 --> 00:08:23,000
Speaker 3: I used to get five percent. I'm still getting three

156
00:08:23,000 --> 00:08:26,280
Speaker 3: point six percent. That's not for you know, like no risk.

157
00:08:26,640 --> 00:08:28,160
Speaker 3: What do I got there? It takes my credit risk,

158
00:08:28,200 --> 00:08:28,600
Speaker 3: do you think.

159
00:08:30,320 --> 00:08:34,520
Speaker 2: Look, we do some corporate bond investing, but mostly what

160
00:08:34,600 --> 00:08:38,000
Speaker 2: we do is equities. Okay, I'm I don't have a

161
00:08:38,080 --> 00:08:41,040
Speaker 2: strong view on fixed income right now, one way or

162
00:08:41,040 --> 00:08:43,480
Speaker 2: the other. I really don't. Do you have alternatives in

163
00:08:43,520 --> 00:08:46,760
Speaker 2: your portfolio? I don't have alternatives either. I'm just a

164
00:08:46,800 --> 00:08:50,200
Speaker 2: stock jockey, stock jobs, stock and I always have been.

165
00:08:50,280 --> 00:08:52,520
Speaker 1: Okay, we got to talk banks here in financial with

166
00:08:52,600 --> 00:08:56,320
Speaker 1: Steve Iceman. Here's a quote. So, yeah, I met with

167
00:08:56,360 --> 00:08:59,160
Speaker 1: this retail banker yesterday and I'm supposed to be getting

168
00:08:59,200 --> 00:09:02,320
Speaker 1: him to invest in fun but instead I start grilling

169
00:09:02,400 --> 00:09:05,520
Speaker 1: him about our overdrawt penalties. And now his bank let's

170
00:09:05,520 --> 00:09:08,640
Speaker 1: a customer write ten twelve checks before they tell them

171
00:09:08,640 --> 00:09:11,720
Speaker 1: they're overdrawn, and this creep is making billions off of

172
00:09:11,760 --> 00:09:14,920
Speaker 1: screwing over people. This way scripted.

173
00:09:15,000 --> 00:09:18,360
Speaker 2: That sounds like a much younger version of me. It's

174
00:09:18,480 --> 00:09:21,400
Speaker 2: from the script A very angry young man, A very.

175
00:09:21,240 --> 00:09:25,240
Speaker 1: Angry young man from twenty fifteen. Can you buy New

176
00:09:25,320 --> 00:09:28,880
Speaker 1: York Big Bank? Can you buy the future of Bank

177
00:09:28,920 --> 00:09:31,440
Speaker 1: of America? You know, not individual stocks, But can you

178
00:09:31,480 --> 00:09:33,920
Speaker 1: buy the big bank success of the future.

179
00:09:35,480 --> 00:09:38,359
Speaker 2: So let's talk about what the positives are. The positives

180
00:09:38,400 --> 00:09:42,439
Speaker 2: are that the regulators did a very very good job

181
00:09:42,679 --> 00:09:48,120
Speaker 2: post dot frank led by vice chair Daniel Trullo, truly

182
00:09:48,160 --> 00:09:53,120
Speaker 2: one of the unsung heroes of the financial system. The

183
00:09:53,280 --> 00:09:56,280
Speaker 2: leverage in the banks is cut by more than half.

184
00:09:56,640 --> 00:10:00,800
Speaker 2: Even within that leverage, they have been de risked. So

185
00:10:01,080 --> 00:10:03,960
Speaker 2: the financial system of the United States, as far as

186
00:10:04,040 --> 00:10:06,600
Speaker 2: I'm concerned, is very very safe, and I don't lose

187
00:10:06,640 --> 00:10:08,280
Speaker 2: any sleep about it, and by the way, I sleep

188
00:10:08,400 --> 00:10:13,960
Speaker 2: very well. But do I think there's a great story

189
00:10:14,040 --> 00:10:17,560
Speaker 2: to invest in some of the very large banks. Not really.

190
00:10:17,960 --> 00:10:20,360
Speaker 2: I just don't think there's a story there. One way

191
00:10:20,440 --> 00:10:21,320
Speaker 2: or the other's too important.

192
00:10:21,320 --> 00:10:23,880
Speaker 1: I got to get this in lex in the Ft today,

193
00:10:24,040 --> 00:10:28,120
Speaker 1: blistering about private equity and the ability not to cash out.

194
00:10:28,280 --> 00:10:34,520
Speaker 1: Do you see potential problems within the illiquidity of private equity?

195
00:10:35,559 --> 00:10:37,400
Speaker 2: You know you could spend any bad tail you want.

196
00:10:37,440 --> 00:10:40,040
Speaker 2: I don't. There's just not enough data on what's in

197
00:10:40,120 --> 00:10:42,720
Speaker 2: private expert to really know one way or the other.

198
00:10:43,280 --> 00:10:43,920
Speaker 1: You can't make that.

199
00:10:44,120 --> 00:10:45,199
Speaker 2: I can't make that judgment.

200
00:10:45,360 --> 00:10:47,839
Speaker 1: See that you know, you know his lawyers love him,

201
00:10:48,080 --> 00:10:51,079
Speaker 1: can't you know, won't do individuals.

202
00:10:51,200 --> 00:10:53,880
Speaker 2: My lawyers love me. You know. One time, in this

203
00:10:54,000 --> 00:10:57,079
Speaker 2: quick story in the nineties, Oppenheimer got I was at Oppenheimer,

204
00:10:57,080 --> 00:10:59,320
Speaker 2: and Oppenheimer got sued over something that I had written,

205
00:10:59,720 --> 00:11:03,040
Speaker 2: and and there was you know, was discovery. And the

206
00:11:03,240 --> 00:11:05,120
Speaker 2: lawyers called me and said, send us everything you have

207
00:11:05,240 --> 00:11:08,120
Speaker 2: on this company that you wrote about. And I sent

208
00:11:08,240 --> 00:11:10,440
Speaker 2: it to them, which was only the reports that I

209
00:11:10,480 --> 00:11:12,800
Speaker 2: had written. And the lawyer called me and said, what

210
00:11:12,880 --> 00:11:15,920
Speaker 2: about your notes? And I said, I don't have notes.

211
00:11:16,000 --> 00:11:20,920
Speaker 2: I don't take notes. He goes, I love you.

212
00:11:19,920 --> 00:11:22,160
Speaker 1: Guys, thank you so much. We love you too. I

213
00:11:22,280 --> 00:11:26,360
Speaker 1: greatly appreciate it. Streisman, he's with Newburger Berman. Some perspectives

214
00:11:26,360 --> 00:11:29,600
Speaker 1: there given most interesting times