1 00:00:00,400 --> 00:00:03,960 Speaker 1: Strap on your parachute. It's time for What Goes Up 2 00:00:04,120 --> 00:00:13,800 Speaker 1: with Sarah Ponzick and Mike Reagan. Hello and welcome to 3 00:00:13,840 --> 00:00:17,680 Speaker 1: What goes Up, a Boomberg Weekly markets podcast. I'm Sarah Pons, 4 00:00:18,000 --> 00:00:20,840 Speaker 1: reporter on the Cross Asset team, and I'm Mike Reagan, 5 00:00:21,000 --> 00:00:23,760 Speaker 1: a senior editor at Bloomberg. This week on the show, 6 00:00:24,160 --> 00:00:27,560 Speaker 1: it was a rotation for the record books, positive vaccine 7 00:00:27,600 --> 00:00:30,200 Speaker 1: news sparks, some historic moves in stocks this week. Finally, 8 00:00:30,240 --> 00:00:33,400 Speaker 1: small caps value the reopening trade powered higher at the 9 00:00:33,440 --> 00:00:36,760 Speaker 1: expense of big tech, just after a week after election 10 00:00:36,760 --> 00:00:39,640 Speaker 1: results had investors thinking that the status quo leadership was 11 00:00:39,720 --> 00:00:42,600 Speaker 1: here to stay. Another head fake or is this time 12 00:00:42,640 --> 00:00:45,760 Speaker 1: actually different? Sara, One thing that will not be different 13 00:00:45,800 --> 00:00:48,839 Speaker 1: about this podcast is that we're all the fans of 14 00:00:48,840 --> 00:00:51,720 Speaker 1: crazy things out there. We will conclude with our crazy 15 00:00:51,800 --> 00:00:55,360 Speaker 1: Things segment, And Sarah, I've got a feeling that this 16 00:00:55,400 --> 00:00:59,400 Speaker 1: week's guest came in strong with the crazy things. If 17 00:00:59,480 --> 00:01:03,800 Speaker 1: history is any guide, if past performances indicative of future results, 18 00:01:03,840 --> 00:01:05,640 Speaker 1: I think this week's guest is going to give us 19 00:01:05,640 --> 00:01:08,000 Speaker 1: some stiff competition. Do you a great I'd have to 20 00:01:08,040 --> 00:01:10,000 Speaker 1: agree with you. I have I have a feeling that 21 00:01:10,360 --> 00:01:13,240 Speaker 1: we both might go down this week. Mike, all right, Well, 22 00:01:13,280 --> 00:01:17,080 Speaker 1: no pressure on you, guest, mystery guests whose name is 23 00:01:17,120 --> 00:01:22,000 Speaker 1: Lauren Goodwin, economist and multi asset portfolio strategists at New 24 00:01:22,080 --> 00:01:24,800 Speaker 1: York Life Investments. But Lauren, you even pressed me with 25 00:01:24,840 --> 00:01:27,000 Speaker 1: your crazy things in the past. That's a compliment. By 26 00:01:27,000 --> 00:01:30,040 Speaker 1: the way, the bar has been set high. The pressure 27 00:01:30,160 --> 00:01:33,840 Speaker 1: is on. No pressure here, no pressure here, but there's 28 00:01:33,840 --> 00:01:38,160 Speaker 1: actually pressure every week. We know, go Laard. I guess 29 00:01:38,240 --> 00:01:41,440 Speaker 1: let's start with that rotation we saw early in the 30 00:01:41,480 --> 00:01:44,399 Speaker 1: week in the markets this week that was by all definitions, 31 00:01:44,440 --> 00:01:47,960 Speaker 1: pretty crazy in itself. I'm gonna give you my take 32 00:01:48,040 --> 00:01:50,120 Speaker 1: on things with the caveat that. As you know, I'm 33 00:01:50,160 --> 00:01:52,560 Speaker 1: I'm kind of a cranky old man, and I this 34 00:01:52,600 --> 00:01:54,880 Speaker 1: could be way off base. So I'm gonna give you 35 00:01:54,920 --> 00:01:57,200 Speaker 1: my rent, and then I want you to tell me 36 00:01:57,240 --> 00:02:00,000 Speaker 1: if I'm right or wrong. But to me, I think 37 00:02:00,120 --> 00:02:02,280 Speaker 1: what happened and I started muchtion in the instruction. This 38 00:02:02,400 --> 00:02:03,760 Speaker 1: very well could be a head fake. You know, we 39 00:02:03,800 --> 00:02:06,320 Speaker 1: saw later in the weeks sort of a reversion back 40 00:02:06,480 --> 00:02:08,760 Speaker 1: to to what it looked like before the vaccine news. 41 00:02:09,400 --> 00:02:12,600 Speaker 1: But I feel like investors are rotating out of growth 42 00:02:12,919 --> 00:02:17,079 Speaker 1: and into growth, just the growth that they expect should 43 00:02:17,080 --> 00:02:20,400 Speaker 1: the vaccine come, should the economy reopen. And to me, 44 00:02:20,480 --> 00:02:22,799 Speaker 1: it's it's kind of you know, it sounds like semantics, 45 00:02:22,840 --> 00:02:25,480 Speaker 1: but it's kind of an important distinction I think to 46 00:02:25,560 --> 00:02:28,760 Speaker 1: make because I don't think it's necessarily about a confidence 47 00:02:28,760 --> 00:02:32,720 Speaker 1: in the value factor or the size factor with small caps. 48 00:02:32,760 --> 00:02:36,640 Speaker 1: I think it's just investors love growth. They see these 49 00:02:36,680 --> 00:02:42,160 Speaker 1: beaten down cyclical sectors perhaps rebounding very strongly next year. 50 00:02:42,919 --> 00:02:45,120 Speaker 1: They want to get in on that growth that's coming. 51 00:02:45,600 --> 00:02:47,280 Speaker 1: You know, I think that that alone sort of makes 52 00:02:47,280 --> 00:02:51,520 Speaker 1: it sort of a temporary rotation, you know, a rented position, 53 00:02:51,600 --> 00:02:54,840 Speaker 1: rather than a sort of convicted owned position. Would you 54 00:02:54,840 --> 00:02:56,840 Speaker 1: agree with that sort of thing, And feel free to 55 00:02:56,880 --> 00:03:00,200 Speaker 1: tell me I'm crazy, I've I've heard it before. No, 56 00:03:00,360 --> 00:03:04,000 Speaker 1: I agree. I mean what you're describing as investors rotating 57 00:03:04,080 --> 00:03:07,760 Speaker 1: out of growth stocks and into economic growth these securities 58 00:03:07,760 --> 00:03:11,480 Speaker 1: that tend to do well when economic tides are raising 59 00:03:11,560 --> 00:03:14,520 Speaker 1: all ships, so to speak. And you know, I think 60 00:03:14,520 --> 00:03:17,480 Speaker 1: investors are faced with you know what feels like and 61 00:03:17,560 --> 00:03:21,480 Speaker 1: really is a once in a decade potential actual rotation 62 00:03:21,520 --> 00:03:24,720 Speaker 1: into value. You know, we've discussed time and time again. 63 00:03:24,840 --> 00:03:26,920 Speaker 1: How you know it's a head fake this time. It's 64 00:03:26,960 --> 00:03:30,160 Speaker 1: a head fake this time. Unless we see durable economic growth, 65 00:03:30,480 --> 00:03:34,200 Speaker 1: we might get that. That'd be great news, that'd be 66 00:03:34,240 --> 00:03:37,800 Speaker 1: super exciting. But the way we're positioning is thinking about 67 00:03:37,800 --> 00:03:39,840 Speaker 1: it kind of like a barbell, you know, if you 68 00:03:39,840 --> 00:03:43,200 Speaker 1: think about the companies and the sectors that outperform over time, 69 00:03:43,280 --> 00:03:45,640 Speaker 1: so over you know, years and decades rather than weeks 70 00:03:45,640 --> 00:03:48,040 Speaker 1: and months, it's going to be those that are adding 71 00:03:48,360 --> 00:03:51,640 Speaker 1: new innovations to the economy, and then secondarily the ones 72 00:03:51,720 --> 00:03:54,800 Speaker 1: that provide resources to those innovators. You've got to be 73 00:03:54,840 --> 00:03:59,600 Speaker 1: positioned to capture that, you know, equity growth or um 74 00:03:59,680 --> 00:04:03,440 Speaker 1: you know, long term growth. But you know, next year, 75 00:04:03,480 --> 00:04:05,480 Speaker 1: I think that we we get some boost from the 76 00:04:05,480 --> 00:04:08,960 Speaker 1: economic growth, and so we're we're dipping into that as 77 00:04:08,960 --> 00:04:11,280 Speaker 1: well for the first time, frankly in a long time. 78 00:04:11,360 --> 00:04:14,960 Speaker 1: It feels good. It does. But something I think a 79 00:04:15,000 --> 00:04:18,680 Speaker 1: lot about, Lauren is the fact that before COVID nineteen hit, 80 00:04:18,839 --> 00:04:22,280 Speaker 1: before we were all discussing this earlier in the year, 81 00:04:22,880 --> 00:04:25,400 Speaker 1: the narrative back then was not that we were going 82 00:04:25,480 --> 00:04:28,920 Speaker 1: to see this unbelievable pickup in growth. Rather, people were 83 00:04:28,920 --> 00:04:31,200 Speaker 1: worried that we were at the end of an economic cycle, 84 00:04:31,560 --> 00:04:33,760 Speaker 1: that the bull market was long in the tooth. Then 85 00:04:33,800 --> 00:04:37,720 Speaker 1: we had this exogenous factor just come in and take 86 00:04:37,800 --> 00:04:39,960 Speaker 1: over the entire year. We still don't know how long 87 00:04:40,040 --> 00:04:42,000 Speaker 1: it's going to last. We do have positive news on 88 00:04:42,000 --> 00:04:44,800 Speaker 1: the vaccine front, which we are all very, very very 89 00:04:44,880 --> 00:04:49,080 Speaker 1: excited about. But what has truly changed in the backdrop 90 00:04:49,480 --> 00:04:54,720 Speaker 1: beneath COVID nineteen to make people believe that even after 91 00:04:55,240 --> 00:05:00,359 Speaker 1: a pandemic, even after this exogenous caused recess shin that 92 00:05:00,400 --> 00:05:03,839 Speaker 1: we're dealing with that even though we were not expecting 93 00:05:03,880 --> 00:05:07,159 Speaker 1: growth prior to this, we should expect growth now. You know, 94 00:05:07,200 --> 00:05:09,400 Speaker 1: I think a couple of things. The first is that 95 00:05:09,560 --> 00:05:14,200 Speaker 1: the markets aren't necessarily reflecting the real economy um in 96 00:05:14,279 --> 00:05:16,160 Speaker 1: terms of what works and what doesn't work. And I 97 00:05:16,480 --> 00:05:19,359 Speaker 1: know it just said that we're excited about economic growth 98 00:05:19,520 --> 00:05:24,080 Speaker 1: raising tides for markets, but you know, there's certain aspects 99 00:05:24,120 --> 00:05:27,200 Speaker 1: of the economy that are reflected in financial markets and 100 00:05:27,240 --> 00:05:30,640 Speaker 1: other aspects that are not. So you know, that's part 101 00:05:30,680 --> 00:05:35,160 Speaker 1: of it. That the sectors and styles and securities that 102 00:05:35,200 --> 00:05:40,360 Speaker 1: have had access to capital are the ones in financial markets, 103 00:05:40,360 --> 00:05:44,800 Speaker 1: and so there's a winners and losers aspect there that 104 00:05:45,000 --> 00:05:47,599 Speaker 1: I think is playing out in this dynamic. But the 105 00:05:47,640 --> 00:05:50,400 Speaker 1: other is that the economy has just been a lot 106 00:05:50,440 --> 00:05:53,200 Speaker 1: more resilient in part um in large part fixed to 107 00:05:53,279 --> 00:05:55,880 Speaker 1: government support over the course of the year than really 108 00:05:55,920 --> 00:06:00,719 Speaker 1: anybody expected. I mean, when unemployment benefits UM started to 109 00:06:00,960 --> 00:06:04,360 Speaker 1: taper off in July, we expected that August and then 110 00:06:04,400 --> 00:06:08,000 Speaker 1: September and then October would reflect just the true nature 111 00:06:08,040 --> 00:06:12,080 Speaker 1: of economic pain that some of these service sector parts 112 00:06:12,080 --> 00:06:15,560 Speaker 1: of the economy are feeling, and it just hasn't been 113 00:06:15,600 --> 00:06:18,480 Speaker 1: the case. UM. You know, we see it in UM, 114 00:06:18,520 --> 00:06:22,200 Speaker 1: in consumers that have been saving, we see it in 115 00:06:22,240 --> 00:06:25,800 Speaker 1: the corporate sector companies that have been raising debt in 116 00:06:25,920 --> 00:06:29,760 Speaker 1: order to have cash on hand, dry powder to capture 117 00:06:30,040 --> 00:06:32,080 Speaker 1: really to bridge the gap created by COVID. But they 118 00:06:32,120 --> 00:06:35,360 Speaker 1: can now be used to capture the economic upswing if 119 00:06:35,360 --> 00:06:38,000 Speaker 1: that's what they choose to do. And so there is 120 00:06:38,200 --> 00:06:42,760 Speaker 1: an underlying strength there that again the financial markets side 121 00:06:42,760 --> 00:06:47,760 Speaker 1: of the economy can leverage. There are of course vulnerabilities 122 00:06:48,120 --> 00:06:50,080 Speaker 1: involved in that, and as investors we have to be 123 00:06:50,680 --> 00:06:53,719 Speaker 1: frankly very humble in the face of those vulnerabilities, whether 124 00:06:53,760 --> 00:06:57,679 Speaker 1: it includes rising debt levels, vulnerabilities to the labor market, 125 00:06:57,680 --> 00:07:01,120 Speaker 1: which I'm particularly worried about. But it's it's just that 126 00:07:01,240 --> 00:07:03,960 Speaker 1: the economic environment has been a bit more resilient than 127 00:07:04,000 --> 00:07:21,440 Speaker 1: we anyone would have expected in March or April. I 128 00:07:21,520 --> 00:07:25,040 Speaker 1: was reading your notes before this conversation, Lauren, and I 129 00:07:25,120 --> 00:07:30,200 Speaker 1: know you're you're pretty optimistic, constructive antiquities. I'm a worry word, 130 00:07:30,240 --> 00:07:32,720 Speaker 1: So of course I I skipped right to those vulnerabilities 131 00:07:32,720 --> 00:07:35,400 Speaker 1: you're talking about. And one that's sort of caught my 132 00:07:35,600 --> 00:07:39,360 Speaker 1: eye is you you talk about stranded assets. What exactly 133 00:07:39,400 --> 00:07:40,920 Speaker 1: do you mean that that? I mean, I'm kind of 134 00:07:40,960 --> 00:07:44,520 Speaker 1: picturing maybe the energy sector spended assets if this move 135 00:07:44,600 --> 00:07:47,160 Speaker 1: to renewables picks up steam. Is is that part of it? 136 00:07:47,200 --> 00:07:49,400 Speaker 1: Is there anything else that that you would consider a 137 00:07:49,440 --> 00:07:52,239 Speaker 1: stranded asset that we should be on the look fo. Yeah, 138 00:07:52,360 --> 00:07:55,320 Speaker 1: that that's a really really good way to think about it. Um, 139 00:07:55,360 --> 00:07:58,520 Speaker 1: whether it's the energy sector, you know, I think suburban malls. 140 00:07:59,160 --> 00:08:02,560 Speaker 1: We should be careful to point out that these aren't 141 00:08:03,360 --> 00:08:07,200 Speaker 1: really surprises. You know that the energy sector has struggled 142 00:08:08,000 --> 00:08:10,560 Speaker 1: for quite a while. Um, some of the some of 143 00:08:10,600 --> 00:08:13,440 Speaker 1: these aspects of real estate have struggled for a while, 144 00:08:14,080 --> 00:08:18,600 Speaker 1: and COVID has only accelerated those developments rather than creating 145 00:08:18,640 --> 00:08:22,000 Speaker 1: them out of nowhere. There could be some partially strained 146 00:08:22,000 --> 00:08:25,360 Speaker 1: assets if we think about um you know, focus on business, travel, 147 00:08:25,440 --> 00:08:28,240 Speaker 1: office space, these types of things. One of the things 148 00:08:28,240 --> 00:08:30,080 Speaker 1: I try to point out though, when it comes to 149 00:08:30,120 --> 00:08:33,520 Speaker 1: these vulnerabilities is that as investors we have the enormous 150 00:08:33,640 --> 00:08:37,199 Speaker 1: challenge and and also privileged to think about the other 151 00:08:37,240 --> 00:08:40,800 Speaker 1: side of them, the opportunities that come from them. And so, 152 00:08:40,920 --> 00:08:44,360 Speaker 1: you know, you mentioned energy. Potentially there's oil and gas 153 00:08:44,400 --> 00:08:47,000 Speaker 1: assets that end up being stranded, you know, wells and 154 00:08:47,080 --> 00:08:49,360 Speaker 1: rigs that end up shut down. But of course there's 155 00:08:49,400 --> 00:08:53,920 Speaker 1: alternative energy infrastructure, battery power, solar wind that you know, 156 00:08:54,000 --> 00:08:57,400 Speaker 1: charging stations that become an opportunity. The same is true 157 00:08:57,400 --> 00:08:59,440 Speaker 1: in in other strained assets like real estate. You know, 158 00:08:59,480 --> 00:09:03,280 Speaker 1: suburban malls can become virus testing centers or you know, 159 00:09:03,360 --> 00:09:06,040 Speaker 1: call centers, which has very much been the case. UM 160 00:09:06,080 --> 00:09:09,480 Speaker 1: you can have you know, maybe folks use um less 161 00:09:09,600 --> 00:09:13,880 Speaker 1: office space in the future, but it's used more creatively. 162 00:09:13,960 --> 00:09:16,959 Speaker 1: There's more spending done on virtual technology that integrates those 163 00:09:16,960 --> 00:09:19,440 Speaker 1: of us who prefer to be in office versus those 164 00:09:19,480 --> 00:09:21,760 Speaker 1: that don't. UM So we try to think all the 165 00:09:21,800 --> 00:09:24,840 Speaker 1: way around a problem when it comes to investment opportunities, 166 00:09:24,920 --> 00:09:27,920 Speaker 1: rather than only focus on the stranded assets. You just 167 00:09:27,960 --> 00:09:30,040 Speaker 1: gotta be careful to make sure you're not overly invested 168 00:09:30,080 --> 00:09:32,720 Speaker 1: in in the ones that end up being actually stranded. 169 00:09:33,200 --> 00:09:35,559 Speaker 1: Entire malls as virus testing centers. I mean, I hope 170 00:09:35,559 --> 00:09:37,160 Speaker 1: we don't need that in a couple of years. It's 171 00:09:37,160 --> 00:09:38,680 Speaker 1: a little bit of a different um. I don't know 172 00:09:38,679 --> 00:09:42,200 Speaker 1: if you played, um, what was that board game like 173 00:09:42,320 --> 00:09:44,920 Speaker 1: malls game where you had to set up your stores 174 00:09:44,920 --> 00:09:46,480 Speaker 1: in the right place. It looks a little bit different 175 00:09:46,480 --> 00:09:53,199 Speaker 1: if it's virus testing, not as glamorous. So I want 176 00:09:53,200 --> 00:09:55,960 Speaker 1: to bring energy into the picture. Something I heard a 177 00:09:55,960 --> 00:09:59,240 Speaker 1: lot this week as of Wednesday, coming into the day 178 00:09:59,360 --> 00:10:01,599 Speaker 1: or by the end the day Wednesday, energy stocks in 179 00:10:01,640 --> 00:10:04,800 Speaker 1: the SMP on track for the best week on record. 180 00:10:05,200 --> 00:10:07,560 Speaker 1: All of a sudden, I hear people bubbling up with 181 00:10:07,640 --> 00:10:10,920 Speaker 1: enthusiasms saying, you know, this is the time for energy, 182 00:10:10,960 --> 00:10:13,520 Speaker 1: this is the time for banks. Do you truly believe 183 00:10:13,600 --> 00:10:17,040 Speaker 1: that we are going to see growth enough to lift 184 00:10:17,120 --> 00:10:19,280 Speaker 1: those areas of the market as well, or do you 185 00:10:19,320 --> 00:10:25,800 Speaker 1: have to think about individual micro strategic the environment basically 186 00:10:26,000 --> 00:10:30,040 Speaker 1: for each sector individually. Like energy, Yes, maybe you're going 187 00:10:30,080 --> 00:10:33,880 Speaker 1: to get economic growth, but isn't the energy industry facing 188 00:10:34,080 --> 00:10:38,319 Speaker 1: a lot of indiscriminate challenges itself. The idiosyncratic nature of 189 00:10:38,400 --> 00:10:41,280 Speaker 1: some of these value sectors is really important. So in 190 00:10:41,400 --> 00:10:44,880 Speaker 1: in energy, of course, it's the you know, secular move 191 00:10:44,960 --> 00:10:47,840 Speaker 1: lower in oil prices that's made it very difficult for 192 00:10:47,960 --> 00:10:52,040 Speaker 1: energy capex. A lot of consolidation in energy as we 193 00:10:52,080 --> 00:10:56,199 Speaker 1: went through a manufacturing recession just a couple of years ago. Similarly, 194 00:10:56,240 --> 00:10:58,839 Speaker 1: if you think about banks interest rates, the path of 195 00:10:58,880 --> 00:11:00,800 Speaker 1: interest rates is a real challenge, you know, you have 196 00:11:00,800 --> 00:11:03,440 Speaker 1: if you expect economic growth to move up. If you 197 00:11:03,480 --> 00:11:06,600 Speaker 1: don't expect a major curve steepening or or maybe not 198 00:11:06,640 --> 00:11:08,839 Speaker 1: a durable one, then you're probably not going to be 199 00:11:09,440 --> 00:11:13,440 Speaker 1: uh super jazzed about financials for the next several years. Um. 200 00:11:13,480 --> 00:11:15,679 Speaker 1: And so you know, as we've discussed, I think these 201 00:11:15,679 --> 00:11:19,120 Speaker 1: are tactical moves. UM. I certainly have colleagues who I 202 00:11:19,280 --> 00:11:23,160 Speaker 1: very much respect to who who disagree, who say that, 203 00:11:23,320 --> 00:11:25,960 Speaker 1: you know, some of these sectors have been so beaten 204 00:11:26,040 --> 00:11:29,040 Speaker 1: down that there can only be an upward move from here. 205 00:11:29,320 --> 00:11:31,560 Speaker 1: But I gotta tell you, sometimes I mean, we just 206 00:11:31,600 --> 00:11:34,400 Speaker 1: we're talking about stranded assets. Sometimes securities are cheap for 207 00:11:34,440 --> 00:11:36,880 Speaker 1: a reason. Um, and so as we as we look 208 00:11:36,920 --> 00:11:39,960 Speaker 1: through these value sectors and and and try to capture 209 00:11:40,040 --> 00:11:42,480 Speaker 1: the part of the rising tide that raises some of 210 00:11:42,520 --> 00:11:46,000 Speaker 1: the ships, it's really important not to fall into value traps. 211 00:11:46,040 --> 00:11:50,080 Speaker 1: And I wouldn't say necessarily that energy or financials are 212 00:11:50,240 --> 00:11:53,040 Speaker 1: you know, value traps across the board, But that's where 213 00:11:53,080 --> 00:11:55,760 Speaker 1: investors work is really cut out for them, is determining, 214 00:11:55,760 --> 00:11:58,480 Speaker 1: you know, where are there, you know, potential long term 215 00:11:58,480 --> 00:12:02,120 Speaker 1: opportunities versus really just a few months worth of rotation 216 00:12:02,920 --> 00:12:05,400 Speaker 1: that we haven't seen in value for for quite some time. 217 00:12:05,679 --> 00:12:07,720 Speaker 1: I'm glad you brought up sort of the idea of 218 00:12:07,720 --> 00:12:12,280 Speaker 1: a tactical trade versus a more fundamental long term trade, 219 00:12:12,720 --> 00:12:14,800 Speaker 1: because I feel like so much of this year and 220 00:12:15,080 --> 00:12:18,600 Speaker 1: the current market positioning and and anything you hear people 221 00:12:18,600 --> 00:12:22,199 Speaker 1: talk about is kind of seeing through just trying to 222 00:12:22,240 --> 00:12:26,280 Speaker 1: ignore this year completely, trying to focus on life getting 223 00:12:26,320 --> 00:12:31,520 Speaker 1: back to normal with the vaccine. We've got something resembling 224 00:12:31,760 --> 00:12:36,480 Speaker 1: clarity on the election, maybe uh, not quite crystal clear clarity, 225 00:12:37,520 --> 00:12:42,120 Speaker 1: maybe possibly a little more clear than it was. Maybe 226 00:12:42,160 --> 00:12:45,000 Speaker 1: I don't know, but I do wonder about the rest 227 00:12:45,080 --> 00:12:50,120 Speaker 1: of the year and early. I mean, this virus is raging. 228 00:12:50,920 --> 00:12:55,680 Speaker 1: Every hour there's another state announcing a new restriction, sort 229 00:12:55,679 --> 00:12:59,400 Speaker 1: of going back in the semi lockdown mode. Does that 230 00:12:59,480 --> 00:13:04,480 Speaker 1: have the potential in your opinion, to cause a deterioration 231 00:13:04,520 --> 00:13:07,000 Speaker 1: and sentiment in the very near term, say between now 232 00:13:07,040 --> 00:13:10,080 Speaker 1: and and when the vaccine is really available at your 233 00:13:10,120 --> 00:13:13,080 Speaker 1: your local CDs. I mean, this kind of brings back 234 00:13:13,120 --> 00:13:15,480 Speaker 1: the idea that stimulus and the idea we're not It 235 00:13:15,520 --> 00:13:19,000 Speaker 1: doesn't look like we're getting another one at least until 236 00:13:19,800 --> 00:13:24,480 Speaker 1: say the middle of the first quarter of A lot 237 00:13:24,520 --> 00:13:28,360 Speaker 1: of those unemployment benefits that the federal government gave to 238 00:13:28,480 --> 00:13:31,199 Speaker 1: gig workers and and some sort of that other stimulus 239 00:13:31,520 --> 00:13:33,160 Speaker 1: is all rolling off at the end of the year. 240 00:13:33,160 --> 00:13:36,640 Speaker 1: Those programs are expiring. I'm just worried about the next 241 00:13:36,679 --> 00:13:39,640 Speaker 1: few months. I mean, is is the market you know? 242 00:13:40,120 --> 00:13:43,160 Speaker 1: Is everyone just gonna position for the other side of 243 00:13:43,160 --> 00:13:46,160 Speaker 1: of the tunnel and not worry about what the next 244 00:13:46,200 --> 00:13:49,080 Speaker 1: few months are gonna look like, or do you see 245 00:13:49,080 --> 00:13:53,680 Speaker 1: the potential for a little bit of volatility as the 246 00:13:53,720 --> 00:13:57,439 Speaker 1: case counts grow, the restrictions come, come on, people lose 247 00:13:57,480 --> 00:14:00,200 Speaker 1: those extended benefits and maybe after the time up in 248 00:14:00,200 --> 00:14:02,839 Speaker 1: the savings that that high statements rate you're talking about, 249 00:14:03,720 --> 00:14:06,360 Speaker 1: or is it foolish even bother thinking about the next 250 00:14:06,360 --> 00:14:08,120 Speaker 1: three months if you're a long term investor, I mean, 251 00:14:08,120 --> 00:14:10,120 Speaker 1: how do you how do you think about this sort 252 00:14:10,160 --> 00:14:13,240 Speaker 1: of near term compared to the Rosey outlook for say 253 00:14:13,280 --> 00:14:16,920 Speaker 1: that the back half of yes to all of the 254 00:14:16,960 --> 00:14:21,040 Speaker 1: things you just said, that's right to answered. By the way, 255 00:14:22,440 --> 00:14:25,360 Speaker 1: just Mike is right, You're you're now officially a cranky 256 00:14:25,400 --> 00:14:27,240 Speaker 1: old man. He's going to be inviting you on the 257 00:14:27,240 --> 00:14:31,480 Speaker 1: podcast every week from that one with but with the 258 00:14:32,320 --> 00:14:37,880 Speaker 1: mandatory discretion that you say that every time this podcast 259 00:14:37,920 --> 00:14:40,440 Speaker 1: has been brought to you by Mike Lauren to say 260 00:14:40,440 --> 00:15:01,560 Speaker 1: that he's right. Affirmation bias is, you know, I think 261 00:15:01,600 --> 00:15:04,760 Speaker 1: the cyclical trade, the value rotation, is the tactical trade. 262 00:15:04,960 --> 00:15:08,360 Speaker 1: So I do think that investors are, as we are, frankly, 263 00:15:08,400 --> 00:15:11,160 Speaker 1: starting to move in that direction on the expectation that 264 00:15:11,520 --> 00:15:15,480 Speaker 1: you just can't time the vaccine announcement. Um, you know 265 00:15:15,520 --> 00:15:17,600 Speaker 1: it's coming soon, you don't know exactly when, So you 266 00:15:17,640 --> 00:15:21,720 Speaker 1: move into some of these value and cyclical sectors. That 267 00:15:22,280 --> 00:15:24,800 Speaker 1: is to a certain extent the tactical trade, because what 268 00:15:24,920 --> 00:15:28,640 Speaker 1: has worked during COVID is also to a certain extent 269 00:15:28,680 --> 00:15:31,480 Speaker 1: what worked over the last five ten years, which is 270 00:15:31,480 --> 00:15:33,880 Speaker 1: that when you have a low interest rate environment, a 271 00:15:33,920 --> 00:15:37,200 Speaker 1: global search for yield. None of these, by the way, 272 00:15:37,200 --> 00:15:39,440 Speaker 1: are changing anytime soon. If you think, you know, in 273 00:15:39,560 --> 00:15:42,720 Speaker 1: terms of years and decades, UM, that's that's a story 274 00:15:42,840 --> 00:15:48,160 Speaker 1: for US growth, tech equity. UM. You know, there's no alternative, 275 00:15:48,520 --> 00:15:51,160 Speaker 1: and and that if you're seeking that yield, you have 276 00:15:51,240 --> 00:15:54,000 Speaker 1: to look for it in these securities. I don't think 277 00:15:54,000 --> 00:15:56,720 Speaker 1: that as a secular story that's likely to really change, 278 00:15:56,760 --> 00:16:01,120 Speaker 1: and so the value rotation is local move or the 279 00:16:01,240 --> 00:16:04,480 Speaker 1: i'm sorry, the tactical move, but I do think that 280 00:16:04,520 --> 00:16:08,480 Speaker 1: there's going to be near term volatility. The little elf 281 00:16:08,600 --> 00:16:11,360 Speaker 1: in the room, elephant Elf, the elephant of the room 282 00:16:11,360 --> 00:16:14,160 Speaker 1: that we haven't discussed here of course. Elf, it's almost 283 00:16:14,200 --> 00:16:17,080 Speaker 1: the holidays. I'm so scared of our elf on the shelf. 284 00:16:17,120 --> 00:16:20,840 Speaker 1: I I don't know if you've seen the the memes 285 00:16:20,920 --> 00:16:24,000 Speaker 1: of elves on the shelf inside quarantine chambers, but I'm 286 00:16:24,000 --> 00:16:27,440 Speaker 1: absolutely doing that in my home. So the oh my gosh, 287 00:16:27,800 --> 00:16:30,240 Speaker 1: the elf on the shelf in the in the room, 288 00:16:30,280 --> 00:16:34,000 Speaker 1: of course is um. The is policy support, you know, UM, 289 00:16:34,440 --> 00:16:37,200 Speaker 1: I do expect that we're going to have several fits 290 00:16:37,200 --> 00:16:40,280 Speaker 1: and starts. Well we learn more about this vaccine, whatever 291 00:16:40,320 --> 00:16:42,880 Speaker 1: it looks like, it's gonna be hard to distribute. It's 292 00:16:42,920 --> 00:16:44,680 Speaker 1: going to take, you know, a year and a half 293 00:16:44,720 --> 00:16:47,800 Speaker 1: before we get to anybody who isn't a health care 294 00:16:47,840 --> 00:16:51,200 Speaker 1: worker or vulnerable segment of the population. You know, any 295 00:16:51,280 --> 00:16:53,960 Speaker 1: number of things that could be challenging about the vaccine 296 00:16:54,200 --> 00:16:56,600 Speaker 1: are going to cause fits and starts in this rotation. 297 00:16:56,800 --> 00:16:59,720 Speaker 1: I think we should just expect it. But I also 298 00:16:59,800 --> 00:17:04,960 Speaker 1: think that those moments of weakness in the face of 299 00:17:05,520 --> 00:17:09,800 Speaker 1: policy support, not only from the FED but also potentially 300 00:17:09,920 --> 00:17:13,320 Speaker 1: on the fiscal side, those moments of weakness are going 301 00:17:13,320 --> 00:17:17,200 Speaker 1: to be buying opportunities for investors who expect the second 302 00:17:17,200 --> 00:17:20,679 Speaker 1: half of one to have that real economic resurgence, and 303 00:17:20,760 --> 00:17:25,240 Speaker 1: so volatility is my base case scenario. But I don't 304 00:17:25,240 --> 00:17:27,360 Speaker 1: think it will stop the rotation. And I do think 305 00:17:27,359 --> 00:17:30,040 Speaker 1: that rotation is a tactical trade. That's your that's your 306 00:17:30,080 --> 00:17:32,400 Speaker 1: you know, six to twelve month idea, it's not your 307 00:17:32,440 --> 00:17:35,040 Speaker 1: three to five year idea. So it's my turn to 308 00:17:35,080 --> 00:17:39,280 Speaker 1: be the cranky one now, and maybe maybe it's maybe 309 00:17:39,320 --> 00:17:42,920 Speaker 1: it's possible. Uh, maybe it's due to proximity or timing 310 00:17:43,200 --> 00:17:47,040 Speaker 1: of headlines that have been coming out. But just before 311 00:17:47,160 --> 00:17:51,560 Speaker 1: we began recording the podcast, we got headlines from Chicago 312 00:17:52,119 --> 00:17:56,800 Speaker 1: about them starting to impose lockdowns. We have sharper restrictions 313 00:17:56,880 --> 00:17:59,280 Speaker 1: that are going to begin over the weekend in New 314 00:17:59,359 --> 00:18:03,920 Speaker 1: York City. I mean, part of this does feel eerily 315 00:18:04,119 --> 00:18:08,680 Speaker 1: similar to back in March. Granted we know much more now, 316 00:18:09,200 --> 00:18:13,480 Speaker 1: interest rates are at zero, but this sense that because 317 00:18:13,520 --> 00:18:16,840 Speaker 1: you have a vaccine coming one day, there is plenty 318 00:18:16,840 --> 00:18:21,920 Speaker 1: of enthusiasm from investors in markets. Oh, COVID nineteen, We're 319 00:18:21,960 --> 00:18:24,080 Speaker 1: not going to have a lockdown to the extent that 320 00:18:24,160 --> 00:18:26,600 Speaker 1: we saw it back then. Do you get the sense 321 00:18:26,640 --> 00:18:29,280 Speaker 1: at all, though, that people are being a little bit 322 00:18:29,840 --> 00:18:35,520 Speaker 1: too enthusiastic about the possibilities here? Uh? I mean, like, 323 00:18:35,840 --> 00:18:38,760 Speaker 1: I'm not completely convinced that no, we won't see lockdowns 324 00:18:38,760 --> 00:18:40,640 Speaker 1: like we saw back then, but that we could see 325 00:18:40,720 --> 00:18:44,760 Speaker 1: some pretty strict economic restrictions if these cases continue to rise. 326 00:18:45,600 --> 00:18:48,240 Speaker 1: You know, if I put on my economist heet, which 327 00:18:48,240 --> 00:18:50,560 Speaker 1: I'll also call my real person hat, although I don't 328 00:18:50,560 --> 00:18:54,119 Speaker 1: know if economists real people. UM, and you guys, I 329 00:18:54,200 --> 00:18:56,879 Speaker 1: hate being the optimistic one. I'm so used to being 330 00:18:57,240 --> 00:19:00,600 Speaker 1: the doom and gloom in the room. Uh usually I am. 331 00:19:00,640 --> 00:19:05,159 Speaker 1: But Mike's Mike's getting in my head. Um well, he 332 00:19:05,800 --> 00:19:07,520 Speaker 1: when he paid me off to say he's right, he 333 00:19:07,560 --> 00:19:10,040 Speaker 1: also paid me off to be optimistic in your stead. 334 00:19:10,119 --> 00:19:12,240 Speaker 1: But if I put on my my real person, had 335 00:19:12,359 --> 00:19:15,600 Speaker 1: my economist set, this virus is completely out of control. 336 00:19:15,920 --> 00:19:18,240 Speaker 1: I mean, a hundred and thirty thousand cases in a day, 337 00:19:18,400 --> 00:19:21,879 Speaker 1: sixty thousand hospitalizations. I mean, this is this is an 338 00:19:22,040 --> 00:19:24,760 Speaker 1: enormous risk to human health. And you know, I think 339 00:19:24,760 --> 00:19:28,040 Speaker 1: that we who were in New York or in other 340 00:19:28,080 --> 00:19:33,000 Speaker 1: cities that experienced um, really bad first waves. You just 341 00:19:33,160 --> 00:19:39,359 Speaker 1: you know what those ambulances feel like. Um. And the 342 00:19:39,440 --> 00:19:44,280 Speaker 1: impact to just real people and real families is happening, 343 00:19:44,480 --> 00:19:50,240 Speaker 1: and it does frustrate me to a certain extent that 344 00:19:50,680 --> 00:19:56,680 Speaker 1: this doesn't appear to be what market story or economic 345 00:19:56,800 --> 00:19:59,720 Speaker 1: story reflects. You know this, this virus is out of 346 00:20:00,119 --> 00:20:03,679 Speaker 1: role and it will have an impact. Um I And 347 00:20:03,720 --> 00:20:05,560 Speaker 1: I agree with you, Sarah. I think that we will 348 00:20:05,640 --> 00:20:12,360 Speaker 1: see restrictions to activity, but the expectation that it's not 349 00:20:12,400 --> 00:20:15,800 Speaker 1: gonna last forever is really important, you know it. It 350 00:20:15,960 --> 00:20:21,000 Speaker 1: helps companies to start making plans um, you know, saying Okay, 351 00:20:21,040 --> 00:20:22,800 Speaker 1: if we only need to make it six or nine 352 00:20:22,880 --> 00:20:25,320 Speaker 1: more months, then yeah, we you know, maybe we shutter 353 00:20:25,359 --> 00:20:27,600 Speaker 1: our doors, but we don't have to close down entirely. 354 00:20:27,880 --> 00:20:30,679 Speaker 1: Those expectations are really important. It might mean that you 355 00:20:30,720 --> 00:20:33,600 Speaker 1: can invest a little more in you know that you know, 356 00:20:33,800 --> 00:20:36,200 Speaker 1: factory or warehouse because you're going to be shipping more. 357 00:20:36,640 --> 00:20:38,840 Speaker 1: It might mean as a household that you can plan 358 00:20:38,960 --> 00:20:41,720 Speaker 1: your trip. Um. You know, you stay inside for the 359 00:20:41,760 --> 00:20:43,639 Speaker 1: next six months and don't leave your house in Chicago 360 00:20:43,680 --> 00:20:46,080 Speaker 1: because it's freezing, but you plan that trip to Hawaii 361 00:20:46,440 --> 00:20:51,560 Speaker 1: for July. I mean, expectations are really really important. And UM, 362 00:20:51,600 --> 00:20:54,480 Speaker 1: so I do think that there's you know, despite this 363 00:20:54,760 --> 00:20:58,359 Speaker 1: um you know, dark winter, there's you know, the dawn 364 00:20:58,480 --> 00:21:00,760 Speaker 1: is coming, there's a light at the end of the tunnel, etcetera. 365 00:21:00,840 --> 00:21:04,320 Speaker 1: And and and that those expectations are what matter for markets. 366 00:21:04,560 --> 00:21:09,280 Speaker 1: UM And so real real person Lauren does get does 367 00:21:09,320 --> 00:21:12,840 Speaker 1: get a little bit frustrated by that. UM, But I 368 00:21:13,160 --> 00:21:15,800 Speaker 1: think we do have a case to be optimistic. Stand 369 00:21:15,840 --> 00:21:19,320 Speaker 1: clear of the craziest things we saw in markets this 370 00:21:19,400 --> 00:21:21,760 Speaker 1: week alright, Mike, I trust that you have something a 371 00:21:21,760 --> 00:21:24,640 Speaker 1: bit more creative though this week, and I wonder if 372 00:21:24,680 --> 00:21:27,199 Speaker 1: we have a price is right? Maybe? Oh? Shoot, no 373 00:21:27,359 --> 00:21:30,399 Speaker 1: prices Okay, I can turn the cinema prices right, you 374 00:21:30,440 --> 00:21:34,000 Speaker 1: always can. I can turn the cinema prices right. All right. 375 00:21:34,760 --> 00:21:38,800 Speaker 1: It's been a while since algorithms and high frequency trading 376 00:21:39,000 --> 00:21:41,320 Speaker 1: has made the news, which much to my sugrined because 377 00:21:41,359 --> 00:21:44,439 Speaker 1: I love that stuff, I love all the controversy surrounding it. 378 00:21:44,480 --> 00:21:46,720 Speaker 1: But we had a good story this week out of London. 379 00:21:47,040 --> 00:21:51,400 Speaker 1: UM Citadel Securities, the big hedgephone and market making firm 380 00:21:51,480 --> 00:21:56,360 Speaker 1: out of Chicago, is suing this former employee in London 381 00:21:56,560 --> 00:22:01,600 Speaker 1: because they allege he left to go to another hedge 382 00:22:01,640 --> 00:22:05,840 Speaker 1: fund and brought with him basically the secrets of one 383 00:22:05,880 --> 00:22:10,560 Speaker 1: of their their main algorithms for trading stocks. Um, alright, 384 00:22:10,640 --> 00:22:12,080 Speaker 1: let me figure out how to make this as a 385 00:22:12,119 --> 00:22:16,200 Speaker 1: prices right. There's several there's several really interesting numbers. They're 386 00:22:16,240 --> 00:22:19,000 Speaker 1: gonna ask us how much he's suing them for or 387 00:22:19,320 --> 00:22:23,280 Speaker 1: is this going somewhere else before I we make that 388 00:22:23,440 --> 00:22:28,480 Speaker 1: the prices right number. For one thing, they say, this algorithm, 389 00:22:28,480 --> 00:22:30,679 Speaker 1: this one algorithm and I guess maybe just calling it 390 00:22:30,720 --> 00:22:34,200 Speaker 1: an algorithm is a little too uh simplified. It's a 391 00:22:34,200 --> 00:22:39,160 Speaker 1: a trading automated trading strategy. It's called the ABC strategy. 392 00:22:39,240 --> 00:22:41,119 Speaker 1: They put a lot of time into this strategy, not 393 00:22:41,200 --> 00:22:43,120 Speaker 1: a lot of time in the name of it though, 394 00:22:43,160 --> 00:22:47,080 Speaker 1: So the ABC strategy is what it's called. They say 395 00:22:47,119 --> 00:22:50,160 Speaker 1: this one strategy alone makes hundreds of millions of dollars 396 00:22:50,280 --> 00:22:57,159 Speaker 1: a year for Citadel. It costs a hundred million to develop. Um. 397 00:22:57,200 --> 00:23:00,920 Speaker 1: And what's really fascinating is the for that the guy 398 00:23:01,440 --> 00:23:05,720 Speaker 1: was being recruited by g S, a uh London based 399 00:23:05,760 --> 00:23:10,280 Speaker 1: head firm, is uh basically saying it's not that valuable 400 00:23:10,320 --> 00:23:13,479 Speaker 1: to us. In fact, the guy who recruited him printed 401 00:23:13,480 --> 00:23:17,639 Speaker 1: out the document that it's based on, and his argument 402 00:23:17,680 --> 00:23:21,560 Speaker 1: for why it's not that valuable is he said, um, 403 00:23:21,600 --> 00:23:23,119 Speaker 1: you know, after I got this, I used to to 404 00:23:23,200 --> 00:23:26,639 Speaker 1: jot down some personal notes, including quote, the measurement of 405 00:23:26,680 --> 00:23:29,119 Speaker 1: a towel rail he was planning to fit at his house. 406 00:23:29,760 --> 00:23:31,879 Speaker 1: So I don't know, it's funny to me to picture 407 00:23:31,920 --> 00:23:35,199 Speaker 1: these hedge fun mesters of the universe, uh being like 408 00:23:35,240 --> 00:23:37,320 Speaker 1: the rest of us. And you know, after a long 409 00:23:37,400 --> 00:23:40,680 Speaker 1: day of making millions of dollars. They go off, and 410 00:23:41,080 --> 00:23:43,000 Speaker 1: now I gotta hang a towel a towel rack in 411 00:23:43,040 --> 00:23:45,520 Speaker 1: my bathroom, and I'm gonna take the I'm gonna take 412 00:23:45,560 --> 00:23:49,200 Speaker 1: the measurements on this this uh printed out algorithm worth? 413 00:23:49,440 --> 00:23:52,640 Speaker 1: Uh how much is it worth? Sarah? That's the prices rate? 414 00:23:52,680 --> 00:23:55,000 Speaker 1: How much would you sort sue if you were Citadel? 415 00:23:55,440 --> 00:23:57,880 Speaker 1: Al Right, so you said a hundred million went into 416 00:23:57,920 --> 00:23:59,919 Speaker 1: making it. If it makes them a hundreds of mill 417 00:24:00,000 --> 00:24:03,000 Speaker 1: million dollars a year, I mean I'm I'm going to 418 00:24:03,440 --> 00:24:08,000 Speaker 1: go that they suit a couple billion. Keep my poker 419 00:24:08,040 --> 00:24:09,879 Speaker 1: face on, Lauren. What would you sue for if that 420 00:24:09,960 --> 00:24:18,240 Speaker 1: was your algorithm plus lawyer's fees based on standard prices? Right? Roules. 421 00:24:18,240 --> 00:24:19,760 Speaker 1: I got to give it to Lauren because I think 422 00:24:19,760 --> 00:24:23,000 Speaker 1: if you go over, if you go over your only 423 00:24:23,040 --> 00:24:26,679 Speaker 1: forty million there, I would go for a lot more. Really, 424 00:24:27,400 --> 00:24:29,359 Speaker 1: I guess maybe it isn't actually that valuable. I mean, 425 00:24:29,400 --> 00:24:33,920 Speaker 1: forty million is obviously very valuable. All right, Lauren, Now 426 00:24:33,960 --> 00:24:36,040 Speaker 1: the pressure really is on. What is the craziest thing 427 00:24:36,200 --> 00:24:38,639 Speaker 1: you have for us this week? Alright, guys, I have 428 00:24:38,760 --> 00:24:41,919 Speaker 1: three things to say, because if you know, the market 429 00:24:41,960 --> 00:24:45,200 Speaker 1: gives you this many gifts, you have to take advantage. 430 00:24:45,960 --> 00:24:48,920 Speaker 1: So the first thing is that in my first attempt 431 00:24:49,080 --> 00:24:51,879 Speaker 1: to shock and awe I I failed miserably, which is 432 00:24:51,920 --> 00:24:53,960 Speaker 1: that when I listened to this podcast and I hear 433 00:24:54,080 --> 00:24:57,720 Speaker 1: Mike's voice say hold on to your parachutes, it's what 434 00:24:57,960 --> 00:25:00,719 Speaker 1: goes up. I was like, I gotta find one of parachutes, 435 00:25:00,760 --> 00:25:03,040 Speaker 1: and I just couldn't. There is nothing good about that's truly, 436 00:25:03,400 --> 00:25:10,280 Speaker 1: by the way, that's not me. That's our very best impression. 437 00:25:11,760 --> 00:25:16,400 Speaker 1: Stand clear the closings. That's the Charlie has the most 438 00:25:16,400 --> 00:25:18,280 Speaker 1: soothing voice. Yeah, he's the voice of the New York 439 00:25:18,320 --> 00:25:20,840 Speaker 1: City Subway system and he also works at bloom Big Radio. 440 00:25:21,240 --> 00:25:23,960 Speaker 1: So the second thing is we got to get to 441 00:25:24,000 --> 00:25:29,520 Speaker 1: the sigmas UM six standard deviation rotation and value on Monday, 442 00:25:29,680 --> 00:25:35,480 Speaker 1: Like that's crazy UM and fifth screen standard deviation move 443 00:25:35,560 --> 00:25:40,520 Speaker 1: out of momentum and UM as the Twitter's fear would say, 444 00:25:41,000 --> 00:25:44,720 Speaker 1: um over the course of the week. When you see UM, 445 00:25:44,720 --> 00:25:47,560 Speaker 1: you know a couple of six sigma moves in a 446 00:25:47,600 --> 00:25:51,600 Speaker 1: single career or a single decade um either you've lived 447 00:25:51,600 --> 00:25:59,520 Speaker 1: a bazillion years or UM or the models are wrong. Yeah, 448 00:25:59,560 --> 00:26:02,640 Speaker 1: Twitter was blowing up a bit on Monday over over 449 00:26:02,680 --> 00:26:06,320 Speaker 1: these Yeah, you know, you could you could, um, you 450 00:26:06,359 --> 00:26:08,199 Speaker 1: could have argued on Monday that maybe it was a 451 00:26:08,240 --> 00:26:11,600 Speaker 1: little bit overblown. UM. But we'll see, right, we'll see 452 00:26:11,640 --> 00:26:14,160 Speaker 1: if that rotation story ends up being true. And then 453 00:26:14,160 --> 00:26:17,119 Speaker 1: the one more thing I'll add, because the stigmas are 454 00:26:17,119 --> 00:26:20,320 Speaker 1: a little too easy. Um. It's just kind of an interesting, 455 00:26:20,680 --> 00:26:24,920 Speaker 1: UM note about seasonality because I think a lot of 456 00:26:25,200 --> 00:26:27,240 Speaker 1: folks are going to focus on you know, usually the 457 00:26:27,280 --> 00:26:30,600 Speaker 1: couple of months after an election are really positive, um. 458 00:26:30,640 --> 00:26:34,360 Speaker 1: And historically that that does tend to be true. Um, 459 00:26:34,560 --> 00:26:38,880 Speaker 1: and even not in election years, the November December months 460 00:26:38,920 --> 00:26:42,240 Speaker 1: team tend to be pretty positive for seasonality. UM. But 461 00:26:42,320 --> 00:26:46,680 Speaker 1: we're already up um, you know, eight percent months to date, 462 00:26:46,840 --> 00:26:49,920 Speaker 1: so in the last couple of weeks, and that seasonality, UM, 463 00:26:50,160 --> 00:26:53,280 Speaker 1: when we think over the last thirty years, is has 464 00:26:53,320 --> 00:26:57,600 Speaker 1: been much you know, two to five um, over the 465 00:26:57,600 --> 00:27:01,840 Speaker 1: course of those couple of months. And so I'll we 466 00:27:01,840 --> 00:27:04,400 Speaker 1: we do look at seasonality. We think it's interesting we've 467 00:27:04,400 --> 00:27:07,080 Speaker 1: already gotten a lot um. And so with all the 468 00:27:07,160 --> 00:27:11,199 Speaker 1: risks both political and economic, over the next couple of weeks, 469 00:27:11,240 --> 00:27:13,560 Speaker 1: we expect a little bit of bumping nous headed into 470 00:27:13,600 --> 00:27:17,640 Speaker 1: the end of the year. Has anything this year? Yeah, 471 00:27:17,680 --> 00:27:25,440 Speaker 1: but has anything this year aligned with historical normality? Yeah? 472 00:27:25,600 --> 00:27:28,040 Speaker 1: I love that six What was it? A fifteen sigma 473 00:27:28,080 --> 00:27:30,399 Speaker 1: move out of momentum. So we're going to read about 474 00:27:30,400 --> 00:27:32,560 Speaker 1: some hedge fund that had like the most out of 475 00:27:32,560 --> 00:27:36,399 Speaker 1: the money puts on some momentum ETF or something that 476 00:27:36,560 --> 00:27:39,560 Speaker 1: is up for the year. It will be the one 477 00:27:39,640 --> 00:27:42,119 Speaker 1: hedge fund that's done well in the last ten years. 478 00:27:43,880 --> 00:27:45,960 Speaker 1: We'll be looking for it. That'll be Mike's crazy thing. 479 00:27:46,160 --> 00:27:49,280 Speaker 1: Uh what in a couple of months. Probably probably keep 480 00:27:49,320 --> 00:27:52,040 Speaker 1: an eye out for that. He'll be on the lookout. 481 00:27:52,200 --> 00:27:55,160 Speaker 1: That was good. I give it to Lauren. I think 482 00:27:55,200 --> 00:27:57,800 Speaker 1: she came through. She lived, She lived up to the hype. No, 483 00:27:57,800 --> 00:28:02,360 Speaker 1: no parachute though, next time. Maybe a golden parachute next time. 484 00:28:03,840 --> 00:28:06,520 Speaker 1: If you can find a parachute related crazy thing, we 485 00:28:06,560 --> 00:28:10,719 Speaker 1: will cancel whatever. Guess I'll call in. Oh please do, 486 00:28:10,920 --> 00:28:13,639 Speaker 1: please do. And that's a reminder for everyone else. We 487 00:28:13,680 --> 00:28:15,720 Speaker 1: already told you the number twice. But calling to you 488 00:28:15,760 --> 00:28:17,919 Speaker 1: if you have any ideas, if you let us say 489 00:28:17,920 --> 00:28:20,320 Speaker 1: you're crazy things, you have any questions for Mike and 490 00:28:20,359 --> 00:28:23,119 Speaker 1: I or our guests, we will happily play it on 491 00:28:23,160 --> 00:28:25,560 Speaker 1: the show. But with that said, Lauren Goodwin, thank you 492 00:28:25,640 --> 00:28:28,040 Speaker 1: so much for joining us this week. Thanks for having me, guys, 493 00:28:28,080 --> 00:28:38,800 Speaker 1: always a pleasure to catch us What Goes Up. We'll 494 00:28:38,840 --> 00:28:41,840 Speaker 1: be back next week. Until then, you can find us 495 00:28:41,880 --> 00:28:44,840 Speaker 1: on the Bloomberg Terminal, website and app, or wherever you 496 00:28:44,880 --> 00:28:47,600 Speaker 1: get your podcasts. We'd love it if you took the 497 00:28:47,680 --> 00:28:50,160 Speaker 1: time to rate and review the show on Apple Podcasts 498 00:28:50,320 --> 00:28:52,840 Speaker 1: so more listeners can find us, and you can find 499 00:28:52,880 --> 00:28:56,360 Speaker 1: us on Twitter, follow me at Sarah plant Sec, Mike 500 00:28:56,560 --> 00:28:59,880 Speaker 1: is that Reaganonymous, and you can also follow Bloomberg Podcast 501 00:29:00,360 --> 00:29:03,600 Speaker 1: at podcasts. Also thank you to Charlie Pellett of Bloomberg 502 00:29:03,680 --> 00:29:06,720 Speaker 1: Radio and the voice of the New York City Subway System. 503 00:29:06,720 --> 00:29:09,400 Speaker 1: What Goes Up is produced by Jordan Gospore. The head 504 00:29:09,400 --> 00:29:12,880 Speaker 1: of Bloomberg Podcast is Francesco Levie. Thanks for listening. See 505 00:29:12,880 --> 00:29:13,480 Speaker 1: you next time.