Speaker 1: Let's get to our guests. Robert Shin c i O
Speaker 1: at Blankie Shine Wealth Management. Robert, So, a natural tail
Speaker 1: wind is the seasonal time of year, it's usually good
Speaker 1: for stocks. A natural headwind is the big and muscular
Speaker 1: FED with its QT and with its higher interest rates.
Speaker 1: Does one win in the short term and the other
Speaker 1: win in the longer term. Yeah, we believe. So we're
Speaker 1: seeing as we come to a close for a lot
Speaker 1: of still uncertainty, a lot of um guessing as to
Speaker 1: what the FED is going to do, and data dependent
Speaker 1: as the Fed's going to be. But we're still we
Speaker 1: still believe that the FED is going to continue. It's
Speaker 1: has to win at all cost strategy meaning hawkish going
Speaker 1: into well. San Francisco FED suggested that the jobless rate
Speaker 1: doesn't necessarily signal an impending recession. Do you agree? And
Speaker 1: canna resilient labor market and consumption support equities in the
Speaker 1: coming up months. If we look at the invert of
Speaker 1: yield curve, it's forecasting a recession. For the question is
Speaker 1: how deep and the timing of which is is really
Speaker 1: on the minds of everybody. But going back to the
Speaker 1: strong labor market and the accelerating rate. Wage growth basically
Speaker 1: poses the biggest threat for the FED, and ultimately they're
Speaker 1: going to have to work on that. Next week we
Speaker 1: have the wage inflation number, whether it's being uh, you know,
Speaker 1: embedded entrenched in the economy, and that's what the FED
Speaker 1: has really said. They're gonna they're gonna focus on that,
Speaker 1: and they're going to push rates at all costs. But
Speaker 1: the yield curve is telling us something completely different. That
Speaker 1: fore we have to set up and be um cautiously optimistic. Essentially,
Speaker 1: as we navigate through the new year. Let's say the
Speaker 1: yield curve is wrong, and and the and the reason
Speaker 1: I want to postulate that is that, um, the yield
Speaker 1: curve probably didn't know that China was going to flip
Speaker 1: on a dime and open up the economy like it did.
Speaker 1: And we don't know exactly the trajectory of that. But
Speaker 1: let's say that you know, they start cooking, um, consumers
Speaker 1: start spending, they start traveling, and the economy grows. Doesn't
Speaker 1: that bring the long end of the yield curve, the
Speaker 1: tenures say, up around maybe four and a half percent,
Speaker 1: And once it gets up near where the two year is,
Speaker 1: then maybe people won't keep talking about the inversion of
Speaker 1: the yield curve and recession. Yeah, you also have to
Speaker 1: keep in mind that the globally, Europe's in recession right now,
Speaker 1: and a lot of other outside the US we're seeing
Speaker 1: signs of recession. And obviously the pivot in terms of
Speaker 1: um sort of the support within China to support their
Speaker 1: economy from real estate and so in other aspects um,
Speaker 1: the global economy and the weight of global economy is
Speaker 1: actually growth is coming down. And so that's a momentum
Speaker 1: that really is unpredictable. So we have to be cautious
Speaker 1: as we calculate that and as we navigate that, and
Speaker 1: as much as central bank want to, you know, be
Speaker 1: proactive and sort of have a soft landing. Um, we're seeing,
Speaker 1: you know, the global markets tell us something different. How
Speaker 1: about the dollar, the once mighty dollars now I guess,
Speaker 1: for a lack of better word, languishing at a six
Speaker 1: month low. Might the weak a dollar bit tailwin for
Speaker 1: US earnings next year? The dollars a function right now
Speaker 1: of predicting what would happen excuse me for the US
Speaker 1: as are fed gets closer to maybe a not a
Speaker 1: not a pivot but a pause in the US, which
Speaker 1: is supporting the interest rates or the dollar if you will,
Speaker 1: in the US. Uh, you're seeing the central banks around
Speaker 1: the world stronger. So that's where you're seeing the dollar,
Speaker 1: you know, below the twenty the two outer day moving average,
Speaker 1: and even the fifty day moving average, which is a
Speaker 1: technical basis. Yes, it's coming down, and it's actually a
Speaker 1: welcome sign, uh for for for the globe. But at
Speaker 1: the same time, we still think that the US is
Speaker 1: going to continue on the interstrate policy that could strengthen
Speaker 1: the dollar a little further from where it is. So
Speaker 1: I'm interested in your strategy and how you play this. Uh,
Speaker 1: you're sounding a little on the various side obviously going
Speaker 1: into at least the first part of next year. UM,
Speaker 1: what are some of your best ideas at the moment. Yeah,
Speaker 1: we're we're definitely we've definitely been you know, risk management
Speaker 1: philosophy for our clients for two and we're going to
Speaker 1: continue the theme for and that's really the major theme essentially. Um.
Speaker 1: You know, healthcare is going to be a good place
Speaker 1: because the cash flow, the dividends, uh, consumer stables, especially
Speaker 1: as you enter into a recession not only here but
Speaker 1: around the world. Um, you know, those those household products
Speaker 1: are are important. UM. We also believe that you know,
Speaker 1: positive dividend growth, cash flow is king. And finally, it's
Speaker 1: all about strategic rebalancing. What we did for our clients
Speaker 1: and Blank Sealth Management back in March and April of
Speaker 1: twenty twenty is when the equity markets provided a tremendous opportunity.
Speaker 1: We rebalance client portfolios to take advantage that. We believe
Speaker 1: that could happen again in going forward and we're positioned
Speaker 1: for that. So in the short term, we're positioning treasuries
Speaker 1: because treasury yield on the short term yield curve is
Speaker 1: you know, well over four percent. Uh. And then the
Speaker 1: large caps Robert, I want to I want to talk
Speaker 1: about TAG. Tag having its worst year since two thousand eight,
Speaker 1: is trying to claw back some of those games before
Speaker 1: the year ends. Big winners today where too for Tag? Yeah,
Speaker 1: we like large cap tech and that's the future if
Speaker 1: you look at you know, three or five, ten years. UM. Yes,
Speaker 1: this last year hasn't been the you know for large
Speaker 1: cap tech. UH. What we own for our clients are
Speaker 1: the large established companies you know, UM, have cash, strong
Speaker 1: balance sheet and they can within a storm and out
Speaker 1: on the other side of the recession they get stronger.
Speaker 1: So we like that. Even though yes, year to date
Speaker 1: they're down twenty respec actively, but they're the biggest, largest
Speaker 1: companies and they will prevail long term. So we're strong
Speaker 1: believers in large cap tech. The companies that don't have
Speaker 1: strong balance sheets, don't have cash flow or sort of
Speaker 1: the I p O of the spect world. For for
Speaker 1: this year, we didn't invest in our clients for that UM,
Speaker 1: and we don't believe in that. So yeah, there's two
Speaker 1: different sort of markets in tech, but large cap tech
Speaker 1: is an opportunity moving forward. Okay, in the large cap
Speaker 1: tech space, UM, let's talk about some of the different industries.
Speaker 1: So you've got semiconductors, you've got cloud, and you've got software. Uh,
Speaker 1: and then you've got obviously the the sort of internet
Speaker 1: companies and the e commerce companies. So which ones you
Speaker 1: like the most? You like software, cloud will continue, UM.
Speaker 1: And then again even the chips, even though we've seen
Speaker 1: a chip glut, you have to look at these valuations
Speaker 1: on these these companies because they'll work through the inventories. UM.
Speaker 1: And you know, keep in mind the equity markets, price
Speaker 1: in well before the recession. So you want to sort
Speaker 1: of dollar cost average and take advantage of some of
Speaker 1: these categories within technology because by the time you say
Speaker 1: okay it's all clear to invest, that opportunity has passed.
Speaker 1: So we're dollar costs averaging. We like the software is,
Speaker 1: we like you know, some of the cloud computing, We
Speaker 1: like some of the even the cyber securities which got
Speaker 1: beat up this year. Um, but that's you know, there's
Speaker 1: some good opportunities out there. So we're picking and choosing
Speaker 1: our opportunities. But we have confidence long term on the
Speaker 1: companies that we're picking up. Will you be picking and choosing?
Speaker 1: Tesla has been caught up in a horrible route. Have
Speaker 1: we seen bottom? You know, Tesla has been in a
Speaker 1: you know, a tornado of headlines. Um. Long term evy
Speaker 1: number one, they're going to continue. In fact, if you
Speaker 1: look at the scalability, Uh, they're just hitting their numbers now.
Speaker 1: Obviously China and in terms of COVID and potentially production
Speaker 1: and ability to meet the production numbers is what we're
Speaker 1: all waiting on. But yeah, we're taking advantage of Tesla,
Speaker 1: you know, at these levels because we believe that even
Speaker 1: a year to two years from now, even five years
Speaker 1: from now, they're going to still maintain their leadership position.
Speaker 1: And we believe that the growth is still there in
Speaker 1: the e V space. And keep in mind that the
Speaker 1: US has passed the bill that is going to even
Speaker 1: add an incentive for all e VS for U S
Speaker 1: consumers starting January one, so that's sort of a tail
Speaker 1: win as well. We're seeing economic activity rebound in Chinese
Speaker 1: cities where COVID infections have peaked, and so if you
Speaker 1: look at the particularly in the north and the central
Speaker 1: parts of the country, Beijing, chong Ching, chung Do, and
Speaker 1: and Wuhan have seen their subways jump forty in the
Speaker 1: week through Wednesday. So this is just the idea that
Speaker 1: once you give freedom to Chinese people who have been
Speaker 1: locked down for a couple of years, that they're going
Speaker 1: to run. Can I get you excite died about China
Speaker 1: at all? You can, um, But that's also going to
Speaker 1: add to the inflation fears around the world right because
Speaker 1: of the pent up demand. And so this is just
Speaker 1: gonna be the knock on effect of economies around the
Speaker 1: world going through COVID or COVID going around through the
Speaker 1: world and adding into the demand. The goodness is the
Speaker 1: supply chain around the world seems like it's it's opening up.
Speaker 1: So that's going to help on the demand pressures to
Speaker 1: ease some of the inflation and pressures. But I think
Speaker 1: that's the number one key here is inflation around the world. Um.
Speaker 1: For if we can get that under control and not
Speaker 1: hit a global depression or a recession if you will. Um.
Speaker 1: You know, China looks interesting, it really does. Um. So
Speaker 1: it does a lot of opportunities. So we see the
Speaker 1: first half around the globe, um, you know, be cautious,
Speaker 1: be patient, and then start taking opportunities um as they come,
Speaker 1: because I think we could see a turnaround, but we
Speaker 1: could see some headline risks, some valuation, you know, concerns
Speaker 1: in the market, bring the market down a little bit further.
Speaker 1: But then it could be you know, sort of the
Speaker 1: story of finally we have growth again and we have
Speaker 1: you know, some opportunity in all right, Robert, thanks very
Speaker 1: much for joining us. Really enjoyed it. Robert shin Ce
Speaker 1: io it Blankie Shine Wealth Management