WEBVTT - At The Money: Deregulation Will Free Your Portfolio

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. I'm a bad book

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<v Speaker 1>for breaking her hull. Exactly one year ago, the Free

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<v Speaker 1>Market's ETF launched ticker symbol FMKT, designed to invest in

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<v Speaker 1>companies expected to benefit from deregulation and free market dynamics

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<v Speaker 1>in the second term of the Trump presidency. I was

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<v Speaker 1>intrigued by the concept and wondered what it might look

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<v Speaker 1>like in the second half of this term. To help

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<v Speaker 1>us unpack all of this, let's bring in Michael gay Ed.

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<v Speaker 1>He is the portfolio manager for Tactical Rotation Management, one

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<v Speaker 1>of the subadvisors to the Free Market ETF. So, Michael,

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<v Speaker 1>I was intrigued by this concept. What was the original

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<v Speaker 1>insight behind FMKT? How was deregulation becoming an investible theme

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<v Speaker 1>that perhaps markets were underpricing?

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<v Speaker 2>Yeah, and in interesting So when when Trump got like

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<v Speaker 2>that with this large network of advisors that I talked to,

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<v Speaker 2>with three hundred fifty advisors that I regularly talk to,

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<v Speaker 2>which is why my calendar is always so jammed, And

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<v Speaker 2>one of the advisers said to me, you know what,

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<v Speaker 2>it would be a good investment ideas, you know, something

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<v Speaker 2>that focuses on deregulation, and he was kind of saying

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<v Speaker 2>it kind off the cops. So yeah, and I get

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<v Speaker 2>the guy credit for coming up with the idea, and

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<v Speaker 2>it's like, you know, that's actually an interesting idea. I mean,

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<v Speaker 2>deregulation arguably makes up the time to market faster, it

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<v Speaker 2>increases margins, it should benefit earning from a fundamental perspective,

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<v Speaker 2>it should increase competition.

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<v Speaker 3>So all that sounds like an interesting thesis.

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<v Speaker 2>So I called up three other firms, one which is

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<v Speaker 2>the advisor Title Financial Group, and then two other rias

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<v Speaker 2>as subadvisors, people that I've known. I wanted to approach

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<v Speaker 2>this more from the a VC standpoint. My other funds

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<v Speaker 2>I launched on my own. This I wanted to actually

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<v Speaker 2>have partners on because it's a very different way of

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<v Speaker 2>my style of investing, which is more risk on, risk

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<v Speaker 2>off historically.

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<v Speaker 3>And came up with the idea and said, okay, well

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<v Speaker 3>let's go after Now.

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<v Speaker 2>When I had the when I kind of really was

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<v Speaker 2>thinking through the idea, it's like, all right, Trump is

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<v Speaker 2>making it very clear that he's going to go from this.

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<v Speaker 3>You know, for.

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<v Speaker 2>Every new regulation you want, I wanted to cut the

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<v Speaker 2>goals goes from that to for every new regulation I

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<v Speaker 2>want ten cut and he's actually gone more aggressive on

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<v Speaker 2>that since since.

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<v Speaker 3>He was elected. So come up with a fund idea

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<v Speaker 3>of figure out what sectors, what industries benefit the most

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<v Speaker 3>from deregulation, and it had that and has to be.

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<v Speaker 2>Active because these executive orders come out and you don't

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<v Speaker 2>know what's going to be deregulated next, so you've got

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<v Speaker 2>to kind of focus and on that as quickly as possible.

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<v Speaker 3>Now, deregulation is a very interesting buzzword.

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<v Speaker 2>You hear a lot of people on the media talking

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<v Speaker 2>about deregulation as a big tail in for the broader markets.

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<v Speaker 2>And I do believe that if you look at you

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<v Speaker 2>know why has the US outperformed Europe so much, It's

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<v Speaker 2>not just because of tech.

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<v Speaker 3>It's because we don't have as much regulation as Europe does.

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<v Speaker 2>Regulation is a stopping point, is a friction that hurts

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<v Speaker 2>earnings and time to market. So came up with the

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<v Speaker 2>idea for free markets. It's an active fun stock picking.

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<v Speaker 2>A lot of the focuses around sectors like industrials, financials, cannabis, nuclear,

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<v Speaker 2>anything in the aerospace part of the marketplace, not so

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<v Speaker 2>much tech.

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<v Speaker 3>Maybe we can touch on that.

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<v Speaker 2>We believe that tech is probably going to be regulated,

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<v Speaker 2>and maybe AI in particular be regulated, especially from a

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<v Speaker 2>regulatory perspective. In our business, the investment advisory business. But

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<v Speaker 2>you know, out of the game, we had some pretty

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<v Speaker 2>strong performances. About a year ago we launched. We had

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<v Speaker 2>four and a one thousand traded shares on day one,

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<v Speaker 2>a lot of interest in that. We had really strong performance.

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<v Speaker 2>We were a thousand basis points over the SMP at

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<v Speaker 2>some point. That ended up being a blessing and a curse,

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<v Speaker 2>because obviously nothing closes a sale like a chart.

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<v Speaker 3>People started chasing the performance.

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<v Speaker 2>Of FMKAT and then we to draw down as we

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<v Speaker 2>got back to AIS the only play in town.

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<v Speaker 3>And right now we're kind of meandering.

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<v Speaker 2>But I do believe that the deregulation theme is here

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<v Speaker 2>to stay, even if you get a Democrat as president

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<v Speaker 2>next go around. The reality is industries that have less

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<v Speaker 2>regulation shoot, at least theoretically outperform.

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<v Speaker 1>So let's stay with that concept of deregulation. How do

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<v Speaker 1>you define what sectors benefit from deregulation, and then how

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<v Speaker 1>do you hone in on what companies within those sectors

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<v Speaker 1>are going to be the biggest beneficiaries.

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<v Speaker 2>So arguably, it would be very hard to do either

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<v Speaker 2>of those outside of using AI, which we actually build

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<v Speaker 2>out a whole workflow and AI screening process to figure

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<v Speaker 2>out exactly that which sectors, which industries benefit, which individual

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<v Speaker 2>companies are mentioning deregulation the most in earning transcripts.

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<v Speaker 3>So we've got multiple kind of filters.

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<v Speaker 2>That are looking at valuation, that are looking at where

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<v Speaker 2>SGNA is impacted by regulatory costs. And it's in some

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<v Speaker 2>ways that you can argue it's obvious, right, It's like

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<v Speaker 2>think about industry wise, sector wise, what has the most regulation?

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<v Speaker 3>Banks?

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<v Speaker 1>Sure, financials, no doubt, no doubt, right, especially with Dodd Frank.

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<v Speaker 3>And then you've got to roll back a basle and

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<v Speaker 3>all that, which is.

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<v Speaker 2>The dereglation side, you know, cannabis, right, So we saw

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<v Speaker 2>Trump obviously trying to get ahead of the Democrats. You

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<v Speaker 2>can argue with some of this reclassification on the cannabis sides.

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<v Speaker 3>Right. So like we've got Tillray in the portfolio.

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<v Speaker 2>Nuclear right, Obviously with all this AI build out, you're

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<v Speaker 2>gonna need energy. So you've got to make the time

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<v Speaker 2>to market for getting nuclear plants up shorter to meet

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<v Speaker 2>the growing demand, of speed of importation of the AI

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<v Speaker 2>data censors. So it's all the stuff that our bottlenecks, right,

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<v Speaker 2>is kind of the area the way to think about it.

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<v Speaker 2>So we do a lot of screening, We do a

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<v Speaker 2>lot of AI, We look at executive words when they

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<v Speaker 2>come out, we determined from the AI output does this

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<v Speaker 2>make sense, and then we're just going granzlar which companies

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<v Speaker 2>in theory.

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<v Speaker 3>Benefit the most, right. So a good example of that

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<v Speaker 3>is Robin Hood.

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<v Speaker 2>Robinhood is kind of the forefront of financial deregulation, very

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<v Speaker 2>forward thinking company. But then on top of that, on

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<v Speaker 2>the crypto side, they're big players, right, So you hit

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<v Speaker 2>on all areas of the of the of the sort

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<v Speaker 2>of derailatory.

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<v Speaker 3>Focus from the Trump administration, which again is not going

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<v Speaker 3>to go away.

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<v Speaker 2>It's hard to once you deregulate something to reregulate it,

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<v Speaker 2>at least that quickly.

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<v Speaker 1>Unless there's a crisis. It's almost impossible. Fmkt's mandate says

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<v Speaker 1>at least eighty percent of assets go into companies expected

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<v Speaker 1>to benefit from regulatory shifts. What's the remaining twenty percent?

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<v Speaker 2>Yeah, So, and arguably it's it goes to sort of

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<v Speaker 2>like how do you define it? Right, what benefits from derailation.

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<v Speaker 2>But five percent of the portfolio can go into bitcoin

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<v Speaker 2>and ethereum.

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<v Speaker 3>That's listed in the perspectives.

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<v Speaker 1>Now that was done any crypto or just those two,

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<v Speaker 1>just those two.

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<v Speaker 3>And also we can go into gold as well.

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<v Speaker 2>And the over there is that those if you don't

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<v Speaker 2>about what a free market is, which is unencumbered by regulation,

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<v Speaker 2>those are those almost by definition free market plays right

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<v Speaker 2>when you come to the crypto space and gold in particular,

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<v Speaker 2>So we can do a little bit and we've gone

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<v Speaker 2>into that in the past. It's obviously momentum has been weak,

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<v Speaker 2>so we've gotten out of it. Part of the act

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<v Speaker 2>of nature of it trying to avoid these big clients

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<v Speaker 2>in those positions.

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<v Speaker 3>But that's for almost any perspectives.

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<v Speaker 2>In order to be considered a theme, you have to

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<v Speaker 2>have that eighty percent threshold, right, So part of it's

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<v Speaker 2>kind of a regular an it's kind of a regulatory

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<v Speaker 2>requirement to say that if you're going to be focused

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<v Speaker 2>on a particular theme, you've got to have at least

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<v Speaker 2>eighty pariliar portfolio.

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<v Speaker 1>That.

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<v Speaker 2>The reality is the every single holding to some extent,

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<v Speaker 2>has some kind of deregulation tie into it. Some of

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<v Speaker 2>it's direct, some of it's more indirect, but there's always

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<v Speaker 2>a justification for why we're positioning in particular.

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<v Speaker 1>Holy, So the fun kind of sits at the intersection

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<v Speaker 1>of markets and politics, and I've long cautioned against allowing

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<v Speaker 1>partisan politics to influence investing. You're really trying to walk

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<v Speaker 1>a line where it's not a political expression etf but

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<v Speaker 1>rather a policy driven theme. How do you balance that?

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<v Speaker 1>How do you keep this from becoming a darling of

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<v Speaker 1>one side or the other.

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<v Speaker 2>Yeah, it's like politics goes into the policy, policy goes

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<v Speaker 2>into profits, right, So it's it's really more of the

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<v Speaker 2>profit side, the fundamental aspect of it.

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<v Speaker 3>So we've got that question before it's all right.

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<v Speaker 2>So you know, I'm having a Democrat come in place,

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<v Speaker 2>and it seems like it's a republican fund. I'd argue

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<v Speaker 2>it's not because even under a democratic regime, there will

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<v Speaker 2>be some sectors that will be deregulated the Democrats, like

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<v Speaker 2>like alternative energy, in which case then the holding's change

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<v Speaker 2>because now that's where the focus on the regulation might be.

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<v Speaker 1>My solar wind we more democrat issue than republics issue exactly.

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<v Speaker 2>And I go back to OSAs and Yeah, you're gonna

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<v Speaker 2>have deregulation there. And then the holding shift energy is

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<v Speaker 2>a big part of the theme behind f MKT, which

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<v Speaker 2>obviously makes sense because Trump is so focused on releasing

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<v Speaker 2>as much domestic oil as possible and removing frictions there,

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<v Speaker 2>so it.

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<v Speaker 3>Benefits from that. But then it's just a shift, right.

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<v Speaker 4>You want to follow the policy because the following the

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<v Speaker 4>policy follows is where profits end up coming from, and

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<v Speaker 4>policy as winners and losers, and often the winners are

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<v Speaker 4>things with are favored, which can to be things which

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<v Speaker 4>we'll get to market faster, which exactly what deregulation is.

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<v Speaker 3>So I don't view it as a political play.

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<v Speaker 2>I think it's just sort of the nature of the

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<v Speaker 2>beast is you will have certain parties that will favor

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<v Speaker 2>certain sectors, certain industries. How do they do it by

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<v Speaker 2>either providing funding directly or by making resulting less friction

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<v Speaker 2>for those companies.

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<v Speaker 1>That makes a lot of sense. It also means that

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<v Speaker 1>trying to come up with some rational benchmark almost impossible.

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<v Speaker 1>How do you figure out what your frame of reference is?

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<v Speaker 1>The S and P five hundred doesn't seem right? What

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<v Speaker 1>do you use for a benchmark? Yeah?

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<v Speaker 3>And it's interesting.

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<v Speaker 2>So I mean by we have to have a benchmark

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<v Speaker 2>from from a regulatory perspective, because everyone, you know, that's

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<v Speaker 2>how the regulators think about these things. For us, it's

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<v Speaker 2>more about, you know, the the entire landscape of the

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<v Speaker 2>equity universe. Is the fund outperforming or not. Now again,

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<v Speaker 2>we outperform the S and P strongly. The S and P,

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<v Speaker 2>to your point, is not really a proper benchmark for

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<v Speaker 2>a free markets type of fun because the S and P, now,

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<v Speaker 2>i'd argue, is an AI index. I mean, I'm sorry,

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<v Speaker 2>but it's like, yesb BI quinary is no longer as

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<v Speaker 2>diversified as.

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<v Speaker 3>People think it is. It is a thematic fund.

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<v Speaker 2>Right under large cab growth, large large cat growth is

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<v Speaker 2>what it's basic AI.

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<v Speaker 3>I mean, that's that's.

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<v Speaker 1>It's AI, it's semiconductors, it's software, it's go down the

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<v Speaker 1>whole less.

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<v Speaker 3>Right, exactly right.

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<v Speaker 2>So, so I think anybody that's looking at FMKT is

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<v Speaker 2>looking at from the standpoint that they.

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<v Speaker 3>Believe in the thesis.

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<v Speaker 2>And a lot of small business owners believe that derelation

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<v Speaker 2>is more important than taxes because that impacts their day

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<v Speaker 2>to day activity and working. Right, And and I go

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<v Speaker 2>back to finding a benchmark is more function of sort

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<v Speaker 2>of your own personal you know, financial requirements.

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<v Speaker 3>It's not about are you beating the SMP is it is?

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<v Speaker 2>It's is this does it fit your your objectives from

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<v Speaker 2>a risk return perspective? Does it make the journey from

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<v Speaker 2>the investment perspective better? And a lot of the free

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<v Speaker 2>market positions are parts of the marketplace that the market

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<v Speaker 2>have not rewarded.

0:10:55.960 --> 0:10:57.360
<v Speaker 3>There is a value tilt.

0:10:57.400 --> 0:10:59.439
<v Speaker 2>Interestingly enough, when you look at the holdings of f

0:10:59.520 --> 0:11:01.400
<v Speaker 2>M K T sure there are some of these more

0:11:01.480 --> 0:11:03.840
<v Speaker 2>spective positions that we have that you almost have to

0:11:03.880 --> 0:11:06.480
<v Speaker 2>have a position in, like Archer and Joby. I know,

0:11:06.600 --> 0:11:09.320
<v Speaker 2>I know, you know, your your colleague Josh Brown talks

0:11:09.320 --> 0:11:10.520
<v Speaker 2>about I think Joby quite a.

0:11:10.480 --> 0:11:11.480
<v Speaker 3>Bit and Archer as well.

0:11:11.679 --> 0:11:14.640
<v Speaker 2>Those are classic deregulation plays because of the focus around

0:11:15.080 --> 0:11:19.120
<v Speaker 2>flying U taxis basically and derelation as far as the

0:11:19.200 --> 0:11:23.160
<v Speaker 2>FAA side goes. But there's a value tilt, so there's

0:11:23.160 --> 0:11:24.400
<v Speaker 2>an environment that favors the value.

0:11:24.440 --> 0:11:25.760
<v Speaker 3>It's gonna favor free markets anyway.

0:11:26.240 --> 0:11:28.200
<v Speaker 1>So let's let's talk a little bit about some of

0:11:28.240 --> 0:11:31.240
<v Speaker 1>the most recent holdings I was able to look up.

0:11:31.840 --> 0:11:36.640
<v Speaker 1>Some are pretty obvious. You mentioned Robin Hood, Key Corp,

0:11:36.760 --> 0:11:42.120
<v Speaker 1>Citizens Financial, even Blackstone, some of them are a little

0:11:42.360 --> 0:11:45.719
<v Speaker 1>I had to scratch my head. Palo Alto Networks a

0:11:45.960 --> 0:11:52.079
<v Speaker 1>d M oracle. The financials are obvious, be goes to deregulation.

0:11:52.640 --> 0:11:57.079
<v Speaker 1>Oracle seems more like a political Hey, you know, Larry

0:11:57.080 --> 0:12:01.000
<v Speaker 1>Ellison is a big buddy of Trump. His son is

0:12:01.120 --> 0:12:06.360
<v Speaker 1>in the midst of the whole mayhem with VIACOM and

0:12:06.679 --> 0:12:11.200
<v Speaker 1>and all of that. How do you distinguish what's the

0:12:11.240 --> 0:12:15.080
<v Speaker 1>beneficiary of a deregulation and what's politically favored.

0:12:15.080 --> 0:12:16.160
<v Speaker 3>How do you separate those?

0:12:17.120 --> 0:12:19.400
<v Speaker 2>Well, to some extent, if you're politically favored, you're going

0:12:19.480 --> 0:12:21.960
<v Speaker 2>to you're going to try to put deregulation in place.

0:12:22.000 --> 0:12:23.800
<v Speaker 2>And the way that looks is in the speed with

0:12:23.840 --> 0:12:25.240
<v Speaker 2>which government contracts take place.

0:12:25.880 --> 0:12:28.160
<v Speaker 1>So I was thinking more along the lines of M

0:12:28.240 --> 0:12:31.000
<v Speaker 1>and A and anti trust rules as well.

0:12:31.040 --> 0:12:31.360
<v Speaker 3>For sure.

0:12:31.440 --> 0:12:33.480
<v Speaker 2>Right in the case of an oracle, there's there's a

0:12:34.280 --> 0:12:38.440
<v Speaker 2>something called FED Federal Risk, an authorization management program, which

0:12:38.440 --> 0:12:41.040
<v Speaker 2>basically is, without getting too deep to it, it's a

0:12:41.040 --> 0:12:45.160
<v Speaker 2>way of getting approvals right to get a government contract.

0:12:44.760 --> 0:12:46.560
<v Speaker 3>To sort of be a pipeline for like an RP.

0:12:48.200 --> 0:12:51.160
<v Speaker 2>Last year, the Trumpet administration did something that basically removed

0:12:51.200 --> 0:12:52.800
<v Speaker 2>a lot of that friction, so it wouldn't take as

0:12:52.840 --> 0:12:55.360
<v Speaker 2>long to try to apply for a government contract which

0:12:55.360 --> 0:12:56.360
<v Speaker 2>directly impacts Oracle.

0:12:56.679 --> 0:12:56.800
<v Speaker 1>Right.

0:12:57.000 --> 0:13:00.640
<v Speaker 2>It's it's that's the kind of deregulation which is important

0:13:00.720 --> 0:13:02.920
<v Speaker 2>because it's all about speed to market.

0:13:02.960 --> 0:13:07.280
<v Speaker 1>So let's talk about Palenteer and Archie Daniel, similar situation.

0:13:07.840 --> 0:13:09.040
<v Speaker 3>There's an element of that as well.

0:13:09.120 --> 0:13:09.439
<v Speaker 1>On that.

0:13:10.640 --> 0:13:15.280
<v Speaker 2>Again, AI companies tend to not be true the strongest

0:13:15.280 --> 0:13:17.720
<v Speaker 2>deregulation plays, but Palenteer does have an aspect of that

0:13:17.760 --> 0:13:20.640
<v Speaker 2>because against speed to market for them is around government

0:13:20.640 --> 0:13:23.800
<v Speaker 2>contracts for fence, right. So I think there's you know,

0:13:24.000 --> 0:13:26.480
<v Speaker 2>it was never sort of a major major holding the fund,

0:13:26.520 --> 0:13:28.120
<v Speaker 2>but it made sense to us to have some kind

0:13:28.120 --> 0:13:31.400
<v Speaker 2>of exposure to it. And then on the energy front

0:13:31.440 --> 0:13:34.280
<v Speaker 2>and Palo Alto, it's like anything that's tied to AI

0:13:35.120 --> 0:13:37.840
<v Speaker 2>has to be deregulated from a bottom night perspective, which

0:13:37.840 --> 0:13:42.280
<v Speaker 2>is energy, electricity utilities. So there is a reasoning behind

0:13:42.360 --> 0:13:46.400
<v Speaker 2>data center permitting and utility usage, right, and the derelation

0:13:46.440 --> 0:13:49.719
<v Speaker 2>that comes from that. I keep going back to this

0:13:49.760 --> 0:13:51.560
<v Speaker 2>idea that what you own matters a lot less than

0:13:51.559 --> 0:13:54.440
<v Speaker 2>how much you own of it. So a large part

0:13:54.480 --> 0:13:57.439
<v Speaker 2>of the active nature of FMKT is, yes, we're being

0:13:57.480 --> 0:13:59.960
<v Speaker 2>thematic on deregulation, but we're also actively trying to see

0:14:00.640 --> 0:14:03.120
<v Speaker 2>is there momentum in this or that deregulation plate with

0:14:03.320 --> 0:14:05.280
<v Speaker 2>that heavier. So a lot of the holdings in the

0:14:05.280 --> 0:14:08.360
<v Speaker 2>top ten are not based on how strong.

0:14:08.040 --> 0:14:09.240
<v Speaker 3>The deregulation fit may be.

0:14:09.360 --> 0:14:11.480
<v Speaker 2>It could be just this deregulation fit and this strong

0:14:11.480 --> 0:14:12.640
<v Speaker 2>momentum we want to be there.

0:14:12.840 --> 0:14:13.240
<v Speaker 3>Gotcha.

0:14:13.280 --> 0:14:17.800
<v Speaker 1>That makes a lot of sense. So we talked about financials, technology.

0:14:18.840 --> 0:14:22.240
<v Speaker 1>Healthcare is another deregulation issue, but I want to ask

0:14:22.320 --> 0:14:26.240
<v Speaker 1>you about the defense sector and energy. When the war

0:14:26.320 --> 0:14:29.400
<v Speaker 1>and Iran began, how does that affect how you look

0:14:29.480 --> 0:14:33.640
<v Speaker 1>at the portfolio and what is a potential beneficiary of

0:14:33.680 --> 0:14:38.680
<v Speaker 1>this quicker, more frictionless deregulatory environment.

0:14:39.280 --> 0:14:41.200
<v Speaker 2>Yeah, and when the war took place here we meet

0:14:41.960 --> 0:14:44.680
<v Speaker 2>once a week, me and the other portfolio managers. When

0:14:44.680 --> 0:14:45.960
<v Speaker 2>the war took place, they said, all right, we gotta

0:14:45.960 --> 0:14:47.680
<v Speaker 2>get some defense companies in here and then figure ou

0:14:47.680 --> 0:14:50.840
<v Speaker 2>which defense companies benefit the most from deregulation. And they're

0:14:50.880 --> 0:14:53.160
<v Speaker 2>kind of in bed with each other government defense obviously,

0:14:53.200 --> 0:14:54.640
<v Speaker 2>so it's all about speed. If you're going to grow

0:14:54.640 --> 0:14:57.480
<v Speaker 2>to war, it has a faster speed of bringing things

0:14:57.520 --> 0:14:57.920
<v Speaker 2>to market.

0:14:58.240 --> 0:15:02.120
<v Speaker 3>So it hasn't been a main your major thematic play.

0:15:02.240 --> 0:15:04.960
<v Speaker 2>But arguably it goes back to if it's about government

0:15:04.960 --> 0:15:08.080
<v Speaker 2>contracts and it's about speed, then deregulation is about removing

0:15:08.120 --> 0:15:12.080
<v Speaker 2>the friction to get something to the government's agency's.

0:15:11.520 --> 0:15:13.160
<v Speaker 3>Relative hands to get approved.

0:15:15.200 --> 0:15:18.200
<v Speaker 2>It's interesting, don't I don't view free markets as a

0:15:18.400 --> 0:15:25.280
<v Speaker 2>geopolitical play. I view it more as if you believe

0:15:25.360 --> 0:15:29.360
<v Speaker 2>that deregulation is how you have more profits, then you're

0:15:29.400 --> 0:15:31.560
<v Speaker 2>simply trying to figure out which companies benefit from that

0:15:31.680 --> 0:15:34.560
<v Speaker 2>the most. And arguably there's there's more art and science

0:15:34.600 --> 0:15:37.800
<v Speaker 2>to that, right, but it's it's not as catalyst driven

0:15:37.800 --> 0:15:38.400
<v Speaker 2>as much as.

0:15:38.320 --> 0:15:40.520
<v Speaker 3>It's more about executive orders that are taking place.

0:15:41.680 --> 0:15:46.560
<v Speaker 1>All right, final question, how do you separate genuine deregulation

0:15:46.960 --> 0:15:53.760
<v Speaker 1>tailwinds from talking points and narrative? For more specifically, how

0:15:53.760 --> 0:15:57.680
<v Speaker 1>do you distinguish a company that's talking about receiving regulatory

0:15:57.760 --> 0:16:01.760
<v Speaker 1>relief from one who's marr gens or growth rates are

0:16:01.840 --> 0:16:02.760
<v Speaker 1>actually improving?

0:16:03.200 --> 0:16:06.480
<v Speaker 2>Yeah, and that goes back to its art versus science.

0:16:06.480 --> 0:16:08.520
<v Speaker 2>I mean to some extent, there are some very clear,

0:16:09.480 --> 0:16:13.120
<v Speaker 2>you know, cause effects on the deregulation side impacting certain companies, right,

0:16:14.320 --> 0:16:16.280
<v Speaker 2>But to your point, a lot of it is going

0:16:16.320 --> 0:16:20.400
<v Speaker 2>to be analyzing SG and a fundamental line items, looking

0:16:20.440 --> 0:16:23.920
<v Speaker 2>at and seeing what CEOs and executives are saying on

0:16:24.000 --> 0:16:24.920
<v Speaker 2>earning transcripts.

0:16:25.200 --> 0:16:26.400
<v Speaker 3>You know, one of the filters is.

0:16:26.280 --> 0:16:29.200
<v Speaker 2>How many times this deregulation mentioned, you know, by various

0:16:29.520 --> 0:16:32.240
<v Speaker 2>people at companies as a driving factor, because they're not

0:16:32.280 --> 0:16:34.920
<v Speaker 2>going to say it unless it's somewhat true, you would think, right, So.

0:16:36.600 --> 0:16:36.960
<v Speaker 3>It is.

0:16:37.040 --> 0:16:39.520
<v Speaker 2>It is not as clear cut, which is why again

0:16:39.520 --> 0:16:40.920
<v Speaker 2>it needs to be active. It's not something you can

0:16:40.960 --> 0:16:43.440
<v Speaker 2>quantitatively say, this is the ID regulation score.

0:16:43.880 --> 0:16:45.760
<v Speaker 3>So a lot of this comes with judgment.

0:16:45.960 --> 0:16:47.440
<v Speaker 2>A lot of this comes with which why it's good

0:16:47.480 --> 0:16:49.320
<v Speaker 2>that I have a team not just me that's coming

0:16:49.400 --> 0:16:52.120
<v Speaker 2>up with these these allocations and just trying.

0:16:51.880 --> 0:16:53.880
<v Speaker 3>To be fast in terms of figuring out where to position.

0:16:54.120 --> 0:16:57.560
<v Speaker 3>This has been a very it's been an odd environment.

0:16:57.240 --> 0:17:01.240
<v Speaker 2>Right because Trump's been talking about a lot of people

0:17:01.240 --> 0:17:04.439
<v Speaker 2>were excited about derelation. Derelation has a lag, right, So

0:17:04.560 --> 0:17:06.600
<v Speaker 2>any executive words from last year you'll start to maybe

0:17:06.600 --> 0:17:09.840
<v Speaker 2>see this year showing up in the actual earnings. The

0:17:09.920 --> 0:17:13.960
<v Speaker 2>market I think is still largely undervaluing the impact of deregulation.

0:17:14.680 --> 0:17:16.280
<v Speaker 2>And if that's the case, then towards the end of

0:17:16.280 --> 0:17:18.760
<v Speaker 2>the year you have a rerating and then you start

0:17:18.760 --> 0:17:21.639
<v Speaker 2>seeing it filter through in the ball market. Just as

0:17:21.680 --> 0:17:24.760
<v Speaker 2>a rotation away from this AI focus, passive.

0:17:24.400 --> 0:17:28.480
<v Speaker 1>Bid really really interesting. So to wrap up, if you're

0:17:28.520 --> 0:17:33.359
<v Speaker 1>intrigued by the concept of deregulation, of reduction of frictions,

0:17:33.920 --> 0:17:38.520
<v Speaker 1>of more opportunity for companies to throw walk off the

0:17:38.600 --> 0:17:42.359
<v Speaker 1>yoke of big government, I say, as a New York

0:17:43.160 --> 0:17:49.200
<v Speaker 1>left coaster, you can actually get exposure to that through

0:17:49.280 --> 0:17:54.600
<v Speaker 1>active ETFs like free markets. I'm Barry Ridults. You're listening

0:17:54.680 --> 0:17:57.240
<v Speaker 1>to Bloomberg's at the Money