Speaker 1: Strap on your parachute. It's time for What Goes Up
Speaker 1: with Sarah Ponzick and Mike Reagan. Hello and welcome to
Speaker 1: What goes Up, a Boomberg Weekly markets podcast. I'm Sarah Pons,
Speaker 1: reporter on the Cross Asset team, and I'm Mike Reagan,
Speaker 1: a senior editor at Bloomberg. This week on the show,
Speaker 1: it was a rotation for the record books, positive vaccine
Speaker 1: news sparks, some historic moves in stocks this week. Finally,
Speaker 1: small caps value the reopening trade powered higher at the
Speaker 1: expense of big tech, just after a week after election
Speaker 1: results had investors thinking that the status quo leadership was
Speaker 1: here to stay. Another head fake or is this time
Speaker 1: actually different? Sara, One thing that will not be different
Speaker 1: about this podcast is that we're all the fans of
Speaker 1: crazy things out there. We will conclude with our crazy
Speaker 1: Things segment, And Sarah, I've got a feeling that this
Speaker 1: week's guest came in strong with the crazy things. If
Speaker 1: history is any guide, if past performances indicative of future results,
Speaker 1: I think this week's guest is going to give us
Speaker 1: some stiff competition. Do you a great I'd have to
Speaker 1: agree with you. I have I have a feeling that
Speaker 1: we both might go down this week. Mike, all right, Well,
Speaker 1: no pressure on you, guest, mystery guests whose name is
Speaker 1: Lauren Goodwin, economist and multi asset portfolio strategists at New
Speaker 1: York Life Investments. But Lauren, you even pressed me with
Speaker 1: your crazy things in the past. That's a compliment. By
Speaker 1: the way, the bar has been set high. The pressure
Speaker 1: is on. No pressure here, no pressure here, but there's
Speaker 1: actually pressure every week. We know, go Laard. I guess
Speaker 1: let's start with that rotation we saw early in the
Speaker 1: week in the markets this week that was by all definitions,
Speaker 1: pretty crazy in itself. I'm gonna give you my take
Speaker 1: on things with the caveat that. As you know, I'm
Speaker 1: I'm kind of a cranky old man, and I this
Speaker 1: could be way off base. So I'm gonna give you
Speaker 1: my rent, and then I want you to tell me
Speaker 1: if I'm right or wrong. But to me, I think
Speaker 1: what happened and I started muchtion in the instruction. This
Speaker 1: very well could be a head fake. You know, we
Speaker 1: saw later in the weeks sort of a reversion back
Speaker 1: to to what it looked like before the vaccine news.
Speaker 1: But I feel like investors are rotating out of growth
Speaker 1: and into growth, just the growth that they expect should
Speaker 1: the vaccine come, should the economy reopen. And to me,
Speaker 1: it's it's kind of you know, it sounds like semantics,
Speaker 1: but it's kind of an important distinction I think to
Speaker 1: make because I don't think it's necessarily about a confidence
Speaker 1: in the value factor or the size factor with small caps.
Speaker 1: I think it's just investors love growth. They see these
Speaker 1: beaten down cyclical sectors perhaps rebounding very strongly next year.
Speaker 1: They want to get in on that growth that's coming.
Speaker 1: You know, I think that that alone sort of makes
Speaker 1: it sort of a temporary rotation, you know, a rented position,
Speaker 1: rather than a sort of convicted owned position. Would you
Speaker 1: agree with that sort of thing, And feel free to
Speaker 1: tell me I'm crazy, I've I've heard it before. No,
Speaker 1: I agree. I mean what you're describing as investors rotating
Speaker 1: out of growth stocks and into economic growth these securities
Speaker 1: that tend to do well when economic tides are raising
Speaker 1: all ships, so to speak. And you know, I think
Speaker 1: investors are faced with you know what feels like and
Speaker 1: really is a once in a decade potential actual rotation
Speaker 1: into value. You know, we've discussed time and time again.
Speaker 1: How you know it's a head fake this time. It's
Speaker 1: a head fake this time. Unless we see durable economic growth,
Speaker 1: we might get that. That'd be great news, that'd be
Speaker 1: super exciting. But the way we're positioning is thinking about
Speaker 1: it kind of like a barbell, you know, if you
Speaker 1: think about the companies and the sectors that outperform over time,
Speaker 1: so over you know, years and decades rather than weeks
Speaker 1: and months, it's going to be those that are adding
Speaker 1: new innovations to the economy, and then secondarily the ones
Speaker 1: that provide resources to those innovators. You've got to be
Speaker 1: positioned to capture that, you know, equity growth or um
Speaker 1: you know, long term growth. But you know, next year,
Speaker 1: I think that we we get some boost from the
Speaker 1: economic growth, and so we're we're dipping into that as
Speaker 1: well for the first time, frankly in a long time.
Speaker 1: It feels good. It does. But something I think a
Speaker 1: lot about, Lauren is the fact that before COVID nineteen hit,
Speaker 1: before we were all discussing this earlier in the year,
Speaker 1: the narrative back then was not that we were going
Speaker 1: to see this unbelievable pickup in growth. Rather, people were
Speaker 1: worried that we were at the end of an economic cycle,
Speaker 1: that the bull market was long in the tooth. Then
Speaker 1: we had this exogenous factor just come in and take
Speaker 1: over the entire year. We still don't know how long
Speaker 1: it's going to last. We do have positive news on
Speaker 1: the vaccine front, which we are all very, very very
Speaker 1: excited about. But what has truly changed in the backdrop
Speaker 1: beneath COVID nineteen to make people believe that even after
Speaker 1: a pandemic, even after this exogenous caused recess shin that
Speaker 1: we're dealing with that even though we were not expecting
Speaker 1: growth prior to this, we should expect growth now. You know,
Speaker 1: I think a couple of things. The first is that
Speaker 1: the markets aren't necessarily reflecting the real economy um in
Speaker 1: terms of what works and what doesn't work. And I
Speaker 1: know it just said that we're excited about economic growth
Speaker 1: raising tides for markets, but you know, there's certain aspects
Speaker 1: of the economy that are reflected in financial markets and
Speaker 1: other aspects that are not. So you know, that's part
Speaker 1: of it. That the sectors and styles and securities that
Speaker 1: have had access to capital are the ones in financial markets,
Speaker 1: and so there's a winners and losers aspect there that
Speaker 1: I think is playing out in this dynamic. But the
Speaker 1: other is that the economy has just been a lot
Speaker 1: more resilient in part um in large part fixed to
Speaker 1: government support over the course of the year than really
Speaker 1: anybody expected. I mean, when unemployment benefits UM started to
Speaker 1: taper off in July, we expected that August and then
Speaker 1: September and then October would reflect just the true nature
Speaker 1: of economic pain that some of these service sector parts
Speaker 1: of the economy are feeling, and it just hasn't been
Speaker 1: the case. UM. You know, we see it in UM,
Speaker 1: in consumers that have been saving, we see it in
Speaker 1: the corporate sector companies that have been raising debt in
Speaker 1: order to have cash on hand, dry powder to capture
Speaker 1: really to bridge the gap created by COVID. But they
Speaker 1: can now be used to capture the economic upswing if
Speaker 1: that's what they choose to do. And so there is
Speaker 1: an underlying strength there that again the financial markets side
Speaker 1: of the economy can leverage. There are of course vulnerabilities
Speaker 1: involved in that, and as investors we have to be
Speaker 1: frankly very humble in the face of those vulnerabilities, whether
Speaker 1: it includes rising debt levels, vulnerabilities to the labor market,
Speaker 1: which I'm particularly worried about. But it's it's just that
Speaker 1: the economic environment has been a bit more resilient than
Speaker 1: we anyone would have expected in March or April. I
Speaker 1: was reading your notes before this conversation, Lauren, and I
Speaker 1: know you're you're pretty optimistic, constructive antiquities. I'm a worry word,
Speaker 1: So of course I I skipped right to those vulnerabilities
Speaker 1: you're talking about. And one that's sort of caught my
Speaker 1: eye is you you talk about stranded assets. What exactly
Speaker 1: do you mean that that? I mean, I'm kind of
Speaker 1: picturing maybe the energy sector spended assets if this move
Speaker 1: to renewables picks up steam. Is is that part of it?
Speaker 1: Is there anything else that that you would consider a
Speaker 1: stranded asset that we should be on the look fo. Yeah,
Speaker 1: that that's a really really good way to think about it. Um,
Speaker 1: whether it's the energy sector, you know, I think suburban malls.
Speaker 1: We should be careful to point out that these aren't
Speaker 1: really surprises. You know that the energy sector has struggled
Speaker 1: for quite a while. Um, some of the some of
Speaker 1: these aspects of real estate have struggled for a while,
Speaker 1: and COVID has only accelerated those developments rather than creating
Speaker 1: them out of nowhere. There could be some partially strained
Speaker 1: assets if we think about um you know, focus on business, travel,
Speaker 1: office space, these types of things. One of the things
Speaker 1: I try to point out though, when it comes to
Speaker 1: these vulnerabilities is that as investors we have the enormous
Speaker 1: challenge and and also privileged to think about the other
Speaker 1: side of them, the opportunities that come from them. And so,
Speaker 1: you know, you mentioned energy. Potentially there's oil and gas
Speaker 1: assets that end up being stranded, you know, wells and
Speaker 1: rigs that end up shut down. But of course there's
Speaker 1: alternative energy infrastructure, battery power, solar wind that you know,
Speaker 1: charging stations that become an opportunity. The same is true
Speaker 1: in in other strained assets like real estate. You know,
Speaker 1: suburban malls can become virus testing centers or you know,
Speaker 1: call centers, which has very much been the case. UM
Speaker 1: you can have you know, maybe folks use um less
Speaker 1: office space in the future, but it's used more creatively.
Speaker 1: There's more spending done on virtual technology that integrates those
Speaker 1: of us who prefer to be in office versus those
Speaker 1: that don't. UM So we try to think all the
Speaker 1: way around a problem when it comes to investment opportunities,
Speaker 1: rather than only focus on the stranded assets. You just
Speaker 1: gotta be careful to make sure you're not overly invested
Speaker 1: in in the ones that end up being actually stranded.
Speaker 1: Entire malls as virus testing centers. I mean, I hope
Speaker 1: we don't need that in a couple of years. It's
Speaker 1: a little bit of a different um. I don't know
Speaker 1: if you played, um, what was that board game like
Speaker 1: malls game where you had to set up your stores
Speaker 1: in the right place. It looks a little bit different
Speaker 1: if it's virus testing, not as glamorous. So I want
Speaker 1: to bring energy into the picture. Something I heard a
Speaker 1: lot this week as of Wednesday, coming into the day
Speaker 1: or by the end the day Wednesday, energy stocks in
Speaker 1: the SMP on track for the best week on record.
Speaker 1: All of a sudden, I hear people bubbling up with
Speaker 1: enthusiasms saying, you know, this is the time for energy,
Speaker 1: this is the time for banks. Do you truly believe
Speaker 1: that we are going to see growth enough to lift
Speaker 1: those areas of the market as well, or do you
Speaker 1: have to think about individual micro strategic the environment basically
Speaker 1: for each sector individually. Like energy, Yes, maybe you're going
Speaker 1: to get economic growth, but isn't the energy industry facing
Speaker 1: a lot of indiscriminate challenges itself. The idiosyncratic nature of
Speaker 1: some of these value sectors is really important. So in
Speaker 1: in energy, of course, it's the you know, secular move
Speaker 1: lower in oil prices that's made it very difficult for
Speaker 1: energy capex. A lot of consolidation in energy as we
Speaker 1: went through a manufacturing recession just a couple of years ago. Similarly,
Speaker 1: if you think about banks interest rates, the path of
Speaker 1: interest rates is a real challenge, you know, you have
Speaker 1: if you expect economic growth to move up. If you
Speaker 1: don't expect a major curve steepening or or maybe not
Speaker 1: a durable one, then you're probably not going to be
Speaker 1: uh super jazzed about financials for the next several years. Um.
Speaker 1: And so you know, as we've discussed, I think these
Speaker 1: are tactical moves. UM. I certainly have colleagues who I
Speaker 1: very much respect to who who disagree, who say that,
Speaker 1: you know, some of these sectors have been so beaten
Speaker 1: down that there can only be an upward move from here.
Speaker 1: But I gotta tell you, sometimes I mean, we just
Speaker 1: we're talking about stranded assets. Sometimes securities are cheap for
Speaker 1: a reason. Um, and so as we as we look
Speaker 1: through these value sectors and and and try to capture
Speaker 1: the part of the rising tide that raises some of
Speaker 1: the ships, it's really important not to fall into value traps.
Speaker 1: And I wouldn't say necessarily that energy or financials are
Speaker 1: you know, value traps across the board, But that's where
Speaker 1: investors work is really cut out for them, is determining,
Speaker 1: you know, where are there, you know, potential long term
Speaker 1: opportunities versus really just a few months worth of rotation
Speaker 1: that we haven't seen in value for for quite some time.
Speaker 1: I'm glad you brought up sort of the idea of
Speaker 1: a tactical trade versus a more fundamental long term trade,
Speaker 1: because I feel like so much of this year and
Speaker 1: the current market positioning and and anything you hear people
Speaker 1: talk about is kind of seeing through just trying to
Speaker 1: ignore this year completely, trying to focus on life getting
Speaker 1: back to normal with the vaccine. We've got something resembling
Speaker 1: clarity on the election, maybe uh, not quite crystal clear clarity,
Speaker 1: maybe possibly a little more clear than it was. Maybe
Speaker 1: I don't know, but I do wonder about the rest
Speaker 1: of the year and early. I mean, this virus is raging.
Speaker 1: Every hour there's another state announcing a new restriction, sort
Speaker 1: of going back in the semi lockdown mode. Does that
Speaker 1: have the potential in your opinion, to cause a deterioration
Speaker 1: and sentiment in the very near term, say between now
Speaker 1: and and when the vaccine is really available at your
Speaker 1: your local CDs. I mean, this kind of brings back
Speaker 1: the idea that stimulus and the idea we're not It
Speaker 1: doesn't look like we're getting another one at least until
Speaker 1: say the middle of the first quarter of A lot
Speaker 1: of those unemployment benefits that the federal government gave to
Speaker 1: gig workers and and some sort of that other stimulus
Speaker 1: is all rolling off at the end of the year.
Speaker 1: Those programs are expiring. I'm just worried about the next
Speaker 1: few months. I mean, is is the market you know?
Speaker 1: Is everyone just gonna position for the other side of
Speaker 1: of the tunnel and not worry about what the next
Speaker 1: few months are gonna look like, or do you see
Speaker 1: the potential for a little bit of volatility as the
Speaker 1: case counts grow, the restrictions come, come on, people lose
Speaker 1: those extended benefits and maybe after the time up in
Speaker 1: the savings that that high statements rate you're talking about,
Speaker 1: or is it foolish even bother thinking about the next
Speaker 1: three months if you're a long term investor, I mean,
Speaker 1: how do you how do you think about this sort
Speaker 1: of near term compared to the Rosey outlook for say
Speaker 1: that the back half of yes to all of the
Speaker 1: things you just said, that's right to answered. By the way,
Speaker 1: just Mike is right, You're you're now officially a cranky
Speaker 1: old man. He's going to be inviting you on the
Speaker 1: podcast every week from that one with but with the
Speaker 1: mandatory discretion that you say that every time this podcast
Speaker 1: has been brought to you by Mike Lauren to say
Speaker 1: that he's right. Affirmation bias is, you know, I think
Speaker 1: the cyclical trade, the value rotation, is the tactical trade.
Speaker 1: So I do think that investors are, as we are, frankly,
Speaker 1: starting to move in that direction on the expectation that
Speaker 1: you just can't time the vaccine announcement. Um, you know
Speaker 1: it's coming soon, you don't know exactly when, So you
Speaker 1: move into some of these value and cyclical sectors. That
Speaker 1: is to a certain extent the tactical trade, because what
Speaker 1: has worked during COVID is also to a certain extent
Speaker 1: what worked over the last five ten years, which is
Speaker 1: that when you have a low interest rate environment, a
Speaker 1: global search for yield. None of these, by the way,
Speaker 1: are changing anytime soon. If you think, you know, in
Speaker 1: terms of years and decades, UM, that's that's a story
Speaker 1: for US growth, tech equity. UM. You know, there's no alternative,
Speaker 1: and and that if you're seeking that yield, you have
Speaker 1: to look for it in these securities. I don't think
Speaker 1: that as a secular story that's likely to really change,
Speaker 1: and so the value rotation is local move or the
Speaker 1: i'm sorry, the tactical move, but I do think that
Speaker 1: there's going to be near term volatility. The little elf
Speaker 1: in the room, elephant Elf, the elephant of the room
Speaker 1: that we haven't discussed here of course. Elf, it's almost
Speaker 1: the holidays. I'm so scared of our elf on the shelf.
Speaker 1: I I don't know if you've seen the the memes
Speaker 1: of elves on the shelf inside quarantine chambers, but I'm
Speaker 1: absolutely doing that in my home. So the oh my gosh,
Speaker 1: the elf on the shelf in the in the room,
Speaker 1: of course is um. The is policy support, you know, UM,
Speaker 1: I do expect that we're going to have several fits
Speaker 1: and starts. Well we learn more about this vaccine, whatever
Speaker 1: it looks like, it's gonna be hard to distribute. It's
Speaker 1: going to take, you know, a year and a half
Speaker 1: before we get to anybody who isn't a health care
Speaker 1: worker or vulnerable segment of the population. You know, any
Speaker 1: number of things that could be challenging about the vaccine
Speaker 1: are going to cause fits and starts in this rotation.
Speaker 1: I think we should just expect it. But I also
Speaker 1: think that those moments of weakness in the face of
Speaker 1: policy support, not only from the FED but also potentially
Speaker 1: on the fiscal side, those moments of weakness are going
Speaker 1: to be buying opportunities for investors who expect the second
Speaker 1: half of one to have that real economic resurgence, and
Speaker 1: so volatility is my base case scenario. But I don't
Speaker 1: think it will stop the rotation. And I do think
Speaker 1: that rotation is a tactical trade. That's your that's your
Speaker 1: you know, six to twelve month idea, it's not your
Speaker 1: three to five year idea. So it's my turn to
Speaker 1: be the cranky one now, and maybe maybe it's maybe
Speaker 1: it's possible. Uh, maybe it's due to proximity or timing
Speaker 1: of headlines that have been coming out. But just before
Speaker 1: we began recording the podcast, we got headlines from Chicago
Speaker 1: about them starting to impose lockdowns. We have sharper restrictions
Speaker 1: that are going to begin over the weekend in New
Speaker 1: York City. I mean, part of this does feel eerily
Speaker 1: similar to back in March. Granted we know much more now,
Speaker 1: interest rates are at zero, but this sense that because
Speaker 1: you have a vaccine coming one day, there is plenty
Speaker 1: of enthusiasm from investors in markets. Oh, COVID nineteen, We're
Speaker 1: not going to have a lockdown to the extent that
Speaker 1: we saw it back then. Do you get the sense
Speaker 1: at all, though, that people are being a little bit
Speaker 1: too enthusiastic about the possibilities here? Uh? I mean, like,
Speaker 1: I'm not completely convinced that no, we won't see lockdowns
Speaker 1: like we saw back then, but that we could see
Speaker 1: some pretty strict economic restrictions if these cases continue to rise.
Speaker 1: You know, if I put on my economist heet, which
Speaker 1: I'll also call my real person hat, although I don't
Speaker 1: know if economists real people. UM, and you guys, I
Speaker 1: hate being the optimistic one. I'm so used to being
Speaker 1: the doom and gloom in the room. Uh usually I am.
Speaker 1: But Mike's Mike's getting in my head. Um well, he
Speaker 1: when he paid me off to say he's right, he
Speaker 1: also paid me off to be optimistic in your stead.
Speaker 1: But if I put on my my real person, had
Speaker 1: my economist set, this virus is completely out of control.
Speaker 1: I mean, a hundred and thirty thousand cases in a day,
Speaker 1: sixty thousand hospitalizations. I mean, this is this is an
Speaker 1: enormous risk to human health. And you know, I think
Speaker 1: that we who were in New York or in other
Speaker 1: cities that experienced um, really bad first waves. You just
Speaker 1: you know what those ambulances feel like. Um. And the
Speaker 1: impact to just real people and real families is happening,
Speaker 1: and it does frustrate me to a certain extent that
Speaker 1: this doesn't appear to be what market story or economic
Speaker 1: story reflects. You know this, this virus is out of
Speaker 1: role and it will have an impact. Um I And
Speaker 1: I agree with you, Sarah. I think that we will
Speaker 1: see restrictions to activity, but the expectation that it's not
Speaker 1: gonna last forever is really important, you know it. It
Speaker 1: helps companies to start making plans um, you know, saying Okay,
Speaker 1: if we only need to make it six or nine
Speaker 1: more months, then yeah, we you know, maybe we shutter
Speaker 1: our doors, but we don't have to close down entirely.
Speaker 1: Those expectations are really important. It might mean that you
Speaker 1: can invest a little more in you know that you know,
Speaker 1: factory or warehouse because you're going to be shipping more.
Speaker 1: It might mean as a household that you can plan
Speaker 1: your trip. Um. You know, you stay inside for the
Speaker 1: next six months and don't leave your house in Chicago
Speaker 1: because it's freezing, but you plan that trip to Hawaii
Speaker 1: for July. I mean, expectations are really really important. And UM,
Speaker 1: so I do think that there's you know, despite this
Speaker 1: um you know, dark winter, there's you know, the dawn
Speaker 1: is coming, there's a light at the end of the tunnel, etcetera.
Speaker 1: And and and that those expectations are what matter for markets.
Speaker 1: UM And so real real person Lauren does get does
Speaker 1: get a little bit frustrated by that. UM, But I
Speaker 1: think we do have a case to be optimistic. Stand
Speaker 1: clear of the craziest things we saw in markets this
Speaker 1: week alright, Mike, I trust that you have something a
Speaker 1: bit more creative though this week, and I wonder if
Speaker 1: we have a price is right? Maybe? Oh? Shoot, no
Speaker 1: prices Okay, I can turn the cinema prices right, you
Speaker 1: always can. I can turn the cinema prices right. All right.
Speaker 1: It's been a while since algorithms and high frequency trading
Speaker 1: has made the news, which much to my sugrined because
Speaker 1: I love that stuff, I love all the controversy surrounding it.
Speaker 1: But we had a good story this week out of London.
Speaker 1: UM Citadel Securities, the big hedgephone and market making firm
Speaker 1: out of Chicago, is suing this former employee in London
Speaker 1: because they allege he left to go to another hedge
Speaker 1: fund and brought with him basically the secrets of one
Speaker 1: of their their main algorithms for trading stocks. Um, alright,
Speaker 1: let me figure out how to make this as a
Speaker 1: prices right. There's several there's several really interesting numbers. They're
Speaker 1: gonna ask us how much he's suing them for or
Speaker 1: is this going somewhere else before I we make that
Speaker 1: the prices right number. For one thing, they say, this algorithm,
Speaker 1: this one algorithm and I guess maybe just calling it
Speaker 1: an algorithm is a little too uh simplified. It's a
Speaker 1: a trading automated trading strategy. It's called the ABC strategy.
Speaker 1: They put a lot of time into this strategy, not
Speaker 1: a lot of time in the name of it though,
Speaker 1: So the ABC strategy is what it's called. They say
Speaker 1: this one strategy alone makes hundreds of millions of dollars
Speaker 1: a year for Citadel. It costs a hundred million to develop. Um.
Speaker 1: And what's really fascinating is the for that the guy
Speaker 1: was being recruited by g S, a uh London based
Speaker 1: head firm, is uh basically saying it's not that valuable
Speaker 1: to us. In fact, the guy who recruited him printed
Speaker 1: out the document that it's based on, and his argument
Speaker 1: for why it's not that valuable is he said, um,
Speaker 1: you know, after I got this, I used to to
Speaker 1: jot down some personal notes, including quote, the measurement of
Speaker 1: a towel rail he was planning to fit at his house.
Speaker 1: So I don't know, it's funny to me to picture
Speaker 1: these hedge fun mesters of the universe, uh being like
Speaker 1: the rest of us. And you know, after a long
Speaker 1: day of making millions of dollars. They go off, and
Speaker 1: now I gotta hang a towel a towel rack in
Speaker 1: my bathroom, and I'm gonna take the I'm gonna take
Speaker 1: the measurements on this this uh printed out algorithm worth?
Speaker 1: Uh how much is it worth? Sarah? That's the prices rate?
Speaker 1: How much would you sort sue if you were Citadel?
Speaker 1: Al Right, so you said a hundred million went into
Speaker 1: making it. If it makes them a hundreds of mill
Speaker 1: million dollars a year, I mean I'm I'm going to
Speaker 1: go that they suit a couple billion. Keep my poker
Speaker 1: face on, Lauren. What would you sue for if that
Speaker 1: was your algorithm plus lawyer's fees based on standard prices? Right? Roules.
Speaker 1: I got to give it to Lauren because I think
Speaker 1: if you go over, if you go over your only
Speaker 1: forty million there, I would go for a lot more. Really,
Speaker 1: I guess maybe it isn't actually that valuable. I mean,
Speaker 1: forty million is obviously very valuable. All right, Lauren, Now
Speaker 1: the pressure really is on. What is the craziest thing
Speaker 1: you have for us this week? Alright, guys, I have
Speaker 1: three things to say, because if you know, the market
Speaker 1: gives you this many gifts, you have to take advantage.
Speaker 1: So the first thing is that in my first attempt
Speaker 1: to shock and awe I I failed miserably, which is
Speaker 1: that when I listened to this podcast and I hear
Speaker 1: Mike's voice say hold on to your parachutes, it's what
Speaker 1: goes up. I was like, I gotta find one of parachutes,
Speaker 1: and I just couldn't. There is nothing good about that's truly,
Speaker 1: by the way, that's not me. That's our very best impression.
Speaker 1: Stand clear the closings. That's the Charlie has the most
Speaker 1: soothing voice. Yeah, he's the voice of the New York
Speaker 1: City Subway system and he also works at bloom Big Radio.
Speaker 1: So the second thing is we got to get to
Speaker 1: the sigmas UM six standard deviation rotation and value on Monday,
Speaker 1: Like that's crazy UM and fifth screen standard deviation move
Speaker 1: out of momentum and UM as the Twitter's fear would say,
Speaker 1: um over the course of the week. When you see UM,
Speaker 1: you know a couple of six sigma moves in a
Speaker 1: single career or a single decade um either you've lived
Speaker 1: a bazillion years or UM or the models are wrong. Yeah,
Speaker 1: Twitter was blowing up a bit on Monday over over
Speaker 1: these Yeah, you know, you could you could, um, you
Speaker 1: could have argued on Monday that maybe it was a
Speaker 1: little bit overblown. UM. But we'll see, right, we'll see
Speaker 1: if that rotation story ends up being true. And then
Speaker 1: the one more thing I'll add, because the stigmas are
Speaker 1: a little too easy. Um. It's just kind of an interesting,
Speaker 1: UM note about seasonality because I think a lot of
Speaker 1: folks are going to focus on you know, usually the
Speaker 1: couple of months after an election are really positive, um.
Speaker 1: And historically that that does tend to be true. Um,
Speaker 1: and even not in election years, the November December months
Speaker 1: team tend to be pretty positive for seasonality. UM. But
Speaker 1: we're already up um, you know, eight percent months to date,
Speaker 1: so in the last couple of weeks, and that seasonality, UM,
Speaker 1: when we think over the last thirty years, is has
Speaker 1: been much you know, two to five um, over the
Speaker 1: course of those couple of months. And so I'll we
Speaker 1: we do look at seasonality. We think it's interesting we've
Speaker 1: already gotten a lot um. And so with all the
Speaker 1: risks both political and economic, over the next couple of weeks,
Speaker 1: we expect a little bit of bumping nous headed into
Speaker 1: the end of the year. Has anything this year? Yeah,
Speaker 1: but has anything this year aligned with historical normality? Yeah?
Speaker 1: I love that six What was it? A fifteen sigma
Speaker 1: move out of momentum. So we're going to read about
Speaker 1: some hedge fund that had like the most out of
Speaker 1: the money puts on some momentum ETF or something that
Speaker 1: is up for the year. It will be the one
Speaker 1: hedge fund that's done well in the last ten years.
Speaker 1: We'll be looking for it. That'll be Mike's crazy thing.
Speaker 1: Uh what in a couple of months. Probably probably keep
Speaker 1: an eye out for that. He'll be on the lookout.
Speaker 1: That was good. I give it to Lauren. I think
Speaker 1: she came through. She lived, She lived up to the hype. No,
Speaker 1: no parachute though, next time. Maybe a golden parachute next time.
Speaker 1: If you can find a parachute related crazy thing, we
Speaker 1: will cancel whatever. Guess I'll call in. Oh please do,
Speaker 1: please do. And that's a reminder for everyone else. We
Speaker 1: already told you the number twice. But calling to you
Speaker 1: if you have any ideas, if you let us say
Speaker 1: you're crazy things, you have any questions for Mike and
Speaker 1: I or our guests, we will happily play it on
Speaker 1: the show. But with that said, Lauren Goodwin, thank you
Speaker 1: so much for joining us this week. Thanks for having me, guys,
Speaker 1: always a pleasure to catch us What Goes Up. We'll
Speaker 1: be back next week. Until then, you can find us
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Speaker 1: get your podcasts. We'd love it if you took the
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Speaker 1: us on Twitter, follow me at Sarah plant Sec, Mike
Speaker 1: is that Reaganonymous, and you can also follow Bloomberg Podcast
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Speaker 1: What Goes Up is produced by Jordan Gospore. The head
Speaker 1: of Bloomberg Podcast is Francesco Levie. Thanks for listening. See
Speaker 1: you next time.