Speaker 1: The first print here off Lisa's great data check is
Speaker 1: up five ninety five on the dough. What a perfect
Speaker 1: moment to speak to mister Eisman with the newbury. Berman claimed
Speaker 1: in a movie of a few years ago, look for
Speaker 1: the new Heisman Hollywood property. I think it's a Memorial Day, Paul.
Speaker 1: Memorial Day's a good.
Speaker 2: Opening, sure, you know, I guess it's very good. Look
Speaker 2: for Bear Squeeze.
Speaker 1: You're going to see that Memorial Day twenty twenty five, Steve,
Speaker 1: is this just one big short cover? We got the
Speaker 1: wall of money out there? Lawrence McDonald, who has been
Speaker 1: brilliant on this with the action yesterday, is it an
Speaker 1: indirect short cover going on?
Speaker 2: That's too sophisticated for me. I mean, I find the
Speaker 2: whole incredible amount of energy that people spend on the
Speaker 2: Fed day more amusing than informative. You know, think about
Speaker 2: it for a second, and how much ink was spilt
Speaker 2: about whether the Fed with lower twenty five or fifty.
Speaker 2: All right, so they lowered fifty, and then what happened?
Speaker 2: The market had no reaction, just went up and down.
Speaker 2: Nobody knew what to do. And today the market's up huge,
Speaker 2: but rates are higher. So you know you put it
Speaker 2: all together. I tried not to spend too much time
Speaker 2: trying to figure it out. All I care about is
Speaker 2: the general direction of the FED is lower. How much lower?
Speaker 2: I don't particularly care. I don't think that's particularly important.
Speaker 2: The more important question is how's the economy. Economy is slowed,
Speaker 2: but the data seems to indicate that the economy is fine,
Speaker 2: and that's all that really matters.
Speaker 3: So what other than you, I guess, in the context
Speaker 3: of the economy, what are the drivers for kind of
Speaker 3: whether you're bullish or bearish. What's some of the big
Speaker 3: variables that you've find.
Speaker 2: I've gotten thematic more thematic in the last bunch of years,
Speaker 2: and I think that there are two great equity themes
Speaker 2: of our time, and we try and focus our portfolios
Speaker 2: as much as reasonable on those themes are AI slash
Speaker 2: tech and infrastructure. And I think those themes will last
Speaker 2: for years. They'll be variations, you know, on the infrastructure
Speaker 2: side there you know, politics do matter, but the overall
Speaker 2: theme will continue. Paul, let me.
Speaker 1: Interrupt with the data check here as a market surge,
Speaker 1: Dow up five hundred and sixty six points on a
Speaker 1: percentage basis, The market lifts here at nine thirty three,
Speaker 1: greater than the futures nastacup two point three percent. As
Speaker 1: Paul predicted, the vis comes in sixteen point four zero on.
Speaker 3: The AI trade, Steve, how do you suggest people play it?
Speaker 3: I think the first name people kind of jumped on
Speaker 3: was in Nvidia for good reason, because they put up
Speaker 3: that big revenue prints a couple.
Speaker 2: Of years ago.
Speaker 3: How else are you trying to play this?
Speaker 2: So, I mean the way we play it is where
Speaker 2: most people are playing it, in Vidia, some other chip companies,
Speaker 2: the very large companies with massive databases. You know, then
Speaker 2: the question becomes, you know what apps and who's going
Speaker 2: to create them are going to work? And I think
Speaker 2: that is so early right now that it's really not
Speaker 2: worth talking about. You know, just as an example, the
Speaker 2: part of the business of accenture that is doing extremely
Speaker 2: well is not the consulting side, which would do when
Speaker 2: companies are spending a lot of money on AI. It's
Speaker 2: the outsourcing side. And the reason why the outsourcing side
Speaker 2: is doing well is that most S and P companies
Speaker 2: do not have their data sufficiently in one place, structured
Speaker 2: appropriately to even do anything with respect to AI. So
Speaker 2: it's very very early in the AI story. The one
Speaker 2: longer term theme that we've been thinking about, although it's
Speaker 2: so long time I don't know quite what to do
Speaker 2: with it yet, is I think there's a good argument
Speaker 2: to be made that we have seen hardware rerate up
Speaker 2: and software somewhat de rate, and I think it's possible
Speaker 2: that AI could cause that to continue, because it's possible
Speaker 2: that the cost of creating software because of AI is
Speaker 2: going to plummet. And if that's the case, some of
Speaker 2: the iconic software companies out there may not have motes
Speaker 2: around their businesses that are quite as.
Speaker 1: High as they used to be, within the skill set
Speaker 1: that you've earned. And at Newburg or Berman, do you
Speaker 1: people believe the capex expenditure of technology is being done
Speaker 1: intelligently and efficiently or is there wasted money being squandered
Speaker 1: away on AI?
Speaker 2: I mean, I'm sure both. It's you know, we won't know.
Speaker 2: We won't know the answer to that question for years,
Speaker 2: so I don't think it's worth trying to figure that
Speaker 2: out at this point.
Speaker 3: So how else do you think?
Speaker 2: I mean, it's.
Speaker 3: Are you A lot of folks are concerned about this.
Speaker 3: Mag seven is concentration risk, just as a market concern.
Speaker 3: Do you have this market structure concern that so much
Speaker 3: of this market is weighted towards these MAG seven ors
Speaker 3: that beyond kind.
Speaker 2: Of Hey, well, I think one interesting aspect of that,
Speaker 2: and I'll come to that is that many active managers,
Speaker 2: probably more on the institutional side, underperform because their risk
Speaker 2: parameters don't allow them to overweight the MAG seven because
Speaker 2: the MEGS is so big and it's probably going to continue.
Speaker 2: I don't think we will really see a broadening out
Speaker 2: until we see apps come out so that some of
Speaker 2: the middle more middle companies can do that. But that's
Speaker 2: we're ways away from that.
Speaker 1: Do you have a favorite MAG seven? Is there one
Speaker 1: where you.
Speaker 2: I don't want to talk about individual stocks. I'm just
Speaker 2: not going to do that, all right. I get into
Speaker 2: my firm gets me into trouble.
Speaker 3: The firm gets you into trouble. You don't get yourself
Speaker 3: into trouble. Okay, I got it on there. Just on
Speaker 3: the infrastructure theme, yes, do I go out there and
Speaker 3: just buy like Cummings and Engines and well.
Speaker 2: Let let me talk about that because politics are important, Okay.
Speaker 2: So I think that there are four mega infrastructure themes
Speaker 2: and then there's a fifth. The four are on shoring.
Speaker 2: The second is you know, improvement of the grid yep.
Speaker 2: The third is everything having to do with actually building
Speaker 2: the data centers and that there is overlap there with
Speaker 2: the grid. And then there's then there's gratification, and then
Speaker 2: there's all the bills that guid in pass to shove
Speaker 2: money into all four boxes. You know where the politics
Speaker 2: can become important is you know, I'll do to extreme cases.
Speaker 2: If Trump sweeps, gratifications are going to get de emphasized,
Speaker 2: and if Harris sweeps, you know, gratification will get re emphasized.
Speaker 2: So that's important. So the politics here are important.
Speaker 1: Steve Weisman with us, and we will continue here. Let
Speaker 1: me do a data check here with the markets and
Speaker 1: the move SPX Dow records, Dow up five and forty
Speaker 1: points to the solid forty two thousand print on the
Speaker 1: Dow fifty seven hundred, sp up eighty six points, Nasdaq
Speaker 1: one two point.
Speaker 3: Steve Isison, Steve, how how concerned are you if at all?
Speaker 2: We're not on right now? What's on? We're we're on,
Speaker 2: We're on all. It's far radio. It's hard to tell you.
Speaker 3: Yeah, the red light you make it easy the red
Speaker 3: light when why, yes, that's that's for me.
Speaker 2: I just learned something exactly all right, valuation.
Speaker 3: How concerned are you, if at all, about this market broadly?
Speaker 2: You know, I think I learned this lesson in the
Speaker 2: dot com bust. So you know, when when dot com
Speaker 2: was rocking and rolling, everybody was yelling and screaming about evaluation.
Speaker 2: But that didn't matter until there was a recession and
Speaker 2: it turned out that a lot of these companies had
Speaker 2: actually fundamental problems. So I don't spend I mean, generally speaking,
Speaker 2: I'm not going to invest in a company that sells
Speaker 2: at one thousand PE. That's just not what I do.
Speaker 2: But we'll invest in some high PE stocks. I just
Speaker 2: don't feel feel like it's as long as the economy
Speaker 2: is fine. It's not. It's more of an academic exercise
Speaker 2: than anything else.
Speaker 3: So the economy, I mean, from what we're hearing from you,
Speaker 3: the economy really is underpinning almost everything. You have the foundation,
Speaker 3: I guess how you view investments correct. Okay, how about
Speaker 3: on the fixed income side, what do we do there?
Speaker 3: I mean, I can sit in it to your treasury.
Speaker 3: I used to get five percent. I'm still getting three
Speaker 3: point six percent. That's not for you know, like no risk.
Speaker 3: What do I got there? It takes my credit risk,
Speaker 3: do you think.
Speaker 2: Look, we do some corporate bond investing, but mostly what
Speaker 2: we do is equities. Okay, I'm I don't have a
Speaker 2: strong view on fixed income right now, one way or
Speaker 2: the other. I really don't. Do you have alternatives in
Speaker 2: your portfolio? I don't have alternatives either. I'm just a
Speaker 2: stock jockey, stock jobs, stock and I always have been.
Speaker 1: Okay, we got to talk banks here in financial with
Speaker 1: Steve Iceman. Here's a quote. So, yeah, I met with
Speaker 1: this retail banker yesterday and I'm supposed to be getting
Speaker 1: him to invest in fun but instead I start grilling
Speaker 1: him about our overdrawt penalties. And now his bank let's
Speaker 1: a customer write ten twelve checks before they tell them
Speaker 1: they're overdrawn, and this creep is making billions off of
Speaker 1: screwing over people. This way scripted.
Speaker 2: That sounds like a much younger version of me. It's
Speaker 2: from the script A very angry young man, A very.
Speaker 1: Angry young man from twenty fifteen. Can you buy New
Speaker 1: York Big Bank? Can you buy the future of Bank
Speaker 1: of America? You know, not individual stocks, But can you
Speaker 1: buy the big bank success of the future.
Speaker 2: So let's talk about what the positives are. The positives
Speaker 2: are that the regulators did a very very good job
Speaker 2: post dot frank led by vice chair Daniel Trullo, truly
Speaker 2: one of the unsung heroes of the financial system. The
Speaker 2: leverage in the banks is cut by more than half.
Speaker 2: Even within that leverage, they have been de risked. So
Speaker 2: the financial system of the United States, as far as
Speaker 2: I'm concerned, is very very safe, and I don't lose
Speaker 2: any sleep about it, and by the way, I sleep
Speaker 2: very well. But do I think there's a great story
Speaker 2: to invest in some of the very large banks. Not really.
Speaker 2: I just don't think there's a story there. One way
Speaker 2: or the other's too important.
Speaker 1: I got to get this in lex in the Ft today,
Speaker 1: blistering about private equity and the ability not to cash out.
Speaker 1: Do you see potential problems within the illiquidity of private equity?
Speaker 2: You know you could spend any bad tail you want.
Speaker 2: I don't. There's just not enough data on what's in
Speaker 2: private expert to really know one way or the other.
Speaker 1: You can't make that.
Speaker 2: I can't make that judgment.
Speaker 1: See that you know, you know his lawyers love him,
Speaker 1: can't you know, won't do individuals.
Speaker 2: My lawyers love me. You know. One time, in this
Speaker 2: quick story in the nineties, Oppenheimer got I was at Oppenheimer,
Speaker 2: and Oppenheimer got sued over something that I had written,
Speaker 2: and and there was you know, was discovery. And the
Speaker 2: lawyers called me and said, send us everything you have
Speaker 2: on this company that you wrote about. And I sent
Speaker 2: it to them, which was only the reports that I
Speaker 2: had written. And the lawyer called me and said, what
Speaker 2: about your notes? And I said, I don't have notes.
Speaker 2: I don't take notes. He goes, I love you.
Speaker 1: Guys, thank you so much. We love you too. I
Speaker 1: greatly appreciate it. Streisman, he's with Newburger Berman. Some perspectives
Speaker 1: there given most interesting times