WEBVTT - Less Volatility Ahead, Moore Says 0:00:05.720 --> 0:00:13.040 Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 0:00:13.480 --> 0:00:17.560 Jay Leye. We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:33.600 Bloomberg dot Com, and of course on the Bloomberg. You 0:00:33.680 --> 0:00:36.839 might recall just over a month ago Ray Daio of 0:00:36.920 --> 0:00:39.640 Bridgewater was it a month ago around about that he 0:00:39.720 --> 0:00:42.680 came out and he talked to Bloomberg from Davos, Switzerland 0:00:42.760 --> 0:00:46.040 and mentioned that maybe investors might be feeling stupid about 0:00:46.080 --> 0:00:48.640 owning cash. Well, I can tell you they feel less 0:00:48.640 --> 0:00:51.640 stupid now because investors are piling in to an all 0:00:51.720 --> 0:00:54.880 cash e t F. The Bloomberg Barclays one to three 0:00:54.920 --> 0:00:58.400 month T bill exchange traded fund taking in five hundred 0:00:58.440 --> 0:01:02.280 and eighty million dollars just last week among some of 0:01:02.320 --> 0:01:05.119 the top US fixed income products. So it's the dash 0:01:05.160 --> 0:01:07.680 for cash back on and it's the yield going to 0:01:07.760 --> 0:01:10.800 compete for capital elsewhere. I'm ready pleased we can have 0:01:10.920 --> 0:01:15.000 this conversation with Kate more blank Rocks, chief Equity Strategistics. 0:01:15.040 --> 0:01:16.800 She joins us in our studio here in New York 0:01:16.840 --> 0:01:19.160 and morning Kate good morning, So help me out. Does 0:01:19.200 --> 0:01:21.759 it compete for capital out swear? I don't think so. Look, 0:01:21.840 --> 0:01:24.280 maybe some of those flows are relatively impressive, but I'm 0:01:24.480 --> 0:01:27.120 also thinking back to the e p f R data 0:01:27.200 --> 0:01:28.880 that I look at in terms of fund flows a 0:01:28.920 --> 0:01:31.360 year to date. In January, there was over a hundred 0:01:31.360 --> 0:01:33.839 billion dollars of net new money put into global equity funds. 0:01:34.120 --> 0:01:36.080 That's come down a little bit as there were some redemptions, 0:01:36.120 --> 0:01:38.080 but it's about you know, almost close to eighty billion 0:01:38.080 --> 0:01:40.399 dollars of net new money into global equity funds this year. 0:01:40.880 --> 0:01:43.000 That's phenomenal when you consider in all of two thousand 0:01:43.040 --> 0:01:45.960 and sixteen, a record breaking year, there were three billion 0:01:46.000 --> 0:01:48.240 dollars of money put in. You know, we went from 0:01:48.600 --> 0:01:51.640 a year last year where people were worried about the 0:01:51.720 --> 0:01:55.000 length of the bullmarket, about valuations, about you know, a 0:01:55.040 --> 0:01:58.720 myriad of different you know, political and geopolitical risks, to 0:01:59.360 --> 0:02:02.280 putting money back to work in equities this year, and 0:02:02.320 --> 0:02:03.760 then now I think we're in a bit of a 0:02:03.800 --> 0:02:06.360 pause as they assess the new volatility and rate environment. 0:02:06.680 --> 0:02:09.040 Are you surprised that there's still this narrative out there, 0:02:09.040 --> 0:02:11.680 a narrative which basically says the following. When the yields 0:02:11.680 --> 0:02:14.840 go higher, equities will be challenged when some of the 0:02:14.919 --> 0:02:17.560 data doesn't really back up that narrative, but it's still 0:02:17.600 --> 0:02:19.720 out there, it still exists. You're surprised by that. Yeah, 0:02:19.720 --> 0:02:21.440 there are a lot of narratives out there that don't 0:02:21.560 --> 0:02:24.880 are not frankly, really based in fundamentals. Um. What I 0:02:24.880 --> 0:02:27.160 would also say is, you know, everyone is looking for 0:02:27.320 --> 0:02:30.600 historical comparisons or periods as their guide to the future, 0:02:30.919 --> 0:02:32.760 and we think that needs to inform perhaps the way 0:02:32.760 --> 0:02:35.760 you look at things, but can't be your soul dictate. Um, 0:02:36.880 --> 0:02:39.600 we are still in a very low rate environment, even 0:02:39.600 --> 0:02:42.520 if rates are moving higher, and we think that companies 0:02:42.560 --> 0:02:46.120 are very well insulated against a significant uh, you know, 0:02:46.200 --> 0:02:48.400 higher rates because they've done such a good job as 0:02:48.400 --> 0:02:51.880 we were just talking about about refinancing themselves. But we'll 0:02:51.880 --> 0:02:54.280 have to watch very closely as as companies talk about 0:02:54.320 --> 0:02:56.760 their spending in investment plans. How are they going to 0:02:56.840 --> 0:02:59.280 be financing that, Will they do it with equity? Will 0:02:59.280 --> 0:03:01.160 they do it with and does that end up having 0:03:01.240 --> 0:03:04.359 an impact? Um. On two thousand nineteen and onwards, Good 0:03:04.360 --> 0:03:08.000 morning everyone, Bloomberg Surveillance, Jenferrow and Tom Keene to John's 0:03:08.040 --> 0:03:13.359 good question, it is about investment. Do you see tangible 0:03:13.520 --> 0:03:19.040 increases in corporate enthusiasm to invest in America? There seems 0:03:19.080 --> 0:03:21.160 to be a little bit of a disconnect, Tom, between 0:03:21.560 --> 0:03:23.480 what companies tell us they would like to do in 0:03:23.560 --> 0:03:26.000 terms of investments and what they're doing in terms of 0:03:26.000 --> 0:03:27.959 putting their money to work. And I think this is 0:03:27.960 --> 0:03:30.040 going to be a real tell me and show us 0:03:30.160 --> 0:03:34.079 kind of moment over the next two quarters. Do companies 0:03:34.160 --> 0:03:38.560 use tax windfall to actually invest? And is that investment 0:03:38.600 --> 0:03:40.680 new investment or was it stuff that just got delayed 0:03:40.720 --> 0:03:42.960 from last year because they thought there was gonna be 0:03:42.960 --> 0:03:45.080 a tax cut coming they were just waiting for it, 0:03:45.280 --> 0:03:50.080 delayed maintenance and sustainable sustainability cap facts. This will be 0:03:50.120 --> 0:03:53.160 on a case by case basis. K I don't expect 0:03:53.240 --> 0:03:56.040 you to make really sweeping generalizations, but I might ask 0:03:56.080 --> 0:03:59.120 you to make just one exception right now. Do you 0:03:59.200 --> 0:04:01.560 want them to invest the money or would you like 0:04:01.640 --> 0:04:05.600 to just see big capital return plans throughout? I want 0:04:05.640 --> 0:04:09.520 companies to make growth generative investments, not investments just to 0:04:09.560 --> 0:04:13.480 appease outsiders. And I think this is what we've we've 0:04:13.520 --> 0:04:17.320 come really used to a corporate management sort of. You know, 0:04:17.320 --> 0:04:19.560 our set of behaviors over the last ten years, where 0:04:19.560 --> 0:04:23.040 companies have been conservative, they were really cautious about spending, 0:04:23.040 --> 0:04:25.120 they were cautious about hiring. They did a lot of jobs, 0:04:25.200 --> 0:04:27.360 the great job of controlling their costs for a long time. 0:04:27.680 --> 0:04:29.279 If they all of a sudden throw that out the 0:04:29.320 --> 0:04:31.800 window in two thousand eight, that would make me anxious 0:04:31.920 --> 0:04:34.360 as an equity investor. So yes, I want them to spend. 0:04:34.480 --> 0:04:35.880 I want them to do stuff that's going to lead 0:04:35.880 --> 0:04:39.080 to better growth longer term. But I don't want it 0:04:39.120 --> 0:04:41.360 to be spending for the sake of spending. Well, let's 0:04:41.360 --> 0:04:44.440 just think about it. They are continually rewarded to introduce 0:04:44.480 --> 0:04:46.520 a buy back plan or increase the dividend. And I'm 0:04:46.520 --> 0:04:48.200 not taking a position on this and saying it's right 0:04:48.279 --> 0:04:50.799 or wrong. I'm just saying, look at Barclays as an example, 0:04:50.880 --> 0:04:54.159 this morning, the stock searching not because anything terrific is 0:04:54.160 --> 0:04:56.760 in the numbers this morning. It's because just Stady, the CEO, 0:04:56.880 --> 0:04:59.480 is increased the dividend one and two. He's talked about 0:04:59.480 --> 0:05:01.640 the prospect of buybacks at some point in the future. 0:05:02.080 --> 0:05:04.960 Maybe that's the stuff that the investment community wants to 0:05:05.000 --> 0:05:07.640 hear is the CEO you know that? How difficult is 0:05:07.640 --> 0:05:09.560 it to put that to one side and say we're 0:05:09.560 --> 0:05:12.280 all about the future, We're all about multi decade strategies. 0:05:12.520 --> 0:05:14.760 I think we also have to remember companies haven't had 0:05:14.800 --> 0:05:16.920 that heart of a time access in capital the last 0:05:16.960 --> 0:05:20.040 couple of years. I mean rates have been low. You know, 0:05:20.080 --> 0:05:22.800 if you're a high quality company with a strong plan, 0:05:22.880 --> 0:05:25.520 it should have no trouble access in the market. So 0:05:25.680 --> 0:05:27.840 if there's this meaningful shift this year, that would make 0:05:27.839 --> 0:05:29.680 me a little bit of gy What a big picture 0:05:29.960 --> 0:05:32.640 to you know, not only your institutional clients, but mostly 0:05:32.640 --> 0:05:35.479 to our listeners who are just worried about keeping the 0:05:35.520 --> 0:05:38.240 four oh one kid going. The great mistake of this 0:05:38.279 --> 0:05:41.880 bull market has been the rationalization of an actual aerial 0:05:41.960 --> 0:05:45.240 assumption is seven percent. You get into that mindset, you 0:05:45.279 --> 0:05:47.920 do certain things. The people that have one day, what 0:05:48.200 --> 0:05:51.520 happened yesterday with David Einhorn, John Ferrell, do we have 0:05:51.560 --> 0:05:54.360 those numbers? And just maybe I don't think green Light 0:05:54.400 --> 0:05:56.760 had yet. Yeah, they don't have a great year. And 0:05:56.960 --> 0:06:01.800 and my answer is is the actual aerial assumption has 0:06:01.880 --> 0:06:07.960 not proven correct? Do you invest now believing with more optimism, inequities, 0:06:08.320 --> 0:06:10.600 or do you hunker down in the land of Kate 0:06:10.720 --> 0:06:14.040 Moore towards an actual real assumption. You know, I think 0:06:14.040 --> 0:06:15.839 this is a great question. We spend a lot of 0:06:15.839 --> 0:06:18.480 times thinking thinking about our near term expectations as well 0:06:18.520 --> 0:06:21.400 as our medium term and longer term capital markets assumptions 0:06:21.400 --> 0:06:24.600 and looking at the gaps between them. It's really hard, 0:06:24.640 --> 0:06:26.880 as you know, tom to time the market. It's really 0:06:26.920 --> 0:06:29.440 really difficult to say, I know the perfect entry or 0:06:29.480 --> 0:06:32.320 exit point. But we feel in general that investors have 0:06:32.400 --> 0:06:35.599 been sitting on too much cash given the strength of 0:06:35.600 --> 0:06:38.120 this cycle. And this is a message we've given to you, 0:06:38.240 --> 0:06:42.880 our institutional and individual clients, and said, look, you can't 0:06:42.880 --> 0:06:45.400 time the market. All you can do is focus on 0:06:45.440 --> 0:06:47.920 the longer term trend. And we think we're gonna have 0:06:48.000 --> 0:06:51.640 less volatility, both in terms of the macro and continued 0:06:51.680 --> 0:06:53.880 corporate health. So as in not a lot of math 0:06:54.160 --> 0:06:56.440 mix of fifty, you're willing to say we're still going 0:06:56.480 --> 0:06:58.640 to have less volatility, we don't expect we're going to 0:06:58.680 --> 0:07:01.159 be at a sustained fixed big fifty. I mean, as 0:07:01.200 --> 0:07:04.640 we were talking about two thousand seventeen was a really 0:07:04.720 --> 0:07:07.280 weird year in terms of low ball, which should be 0:07:07.279 --> 0:07:08.840 a little bit higher than that. It would be an 0:07:08.839 --> 0:07:17.480 even Can you image the ratings with the sustained average 0:07:17.800 --> 0:07:20.320 fifty vis Yeah, I can. I think things have got 0:07:20.360 --> 0:07:23.200 a little bit berserk. Your point about David Ironhorne of 0:07:23.720 --> 0:07:26.360 green Light the under performance the worst since the year 0:07:26.400 --> 0:07:28.960 two thousand and One of the things that comes up 0:07:29.080 --> 0:07:31.840 is this expectation that at some point value stocks are 0:07:31.840 --> 0:07:34.240 going to start out performing growth stocks. Yeah, we're going 0:07:34.280 --> 0:07:36.480 to see that this year, Kate. We need to think 0:07:36.480 --> 0:07:38.680 about what is value. So we think we talked about 0:07:38.720 --> 0:07:41.040 value to different ways, value the investment style, and then 0:07:41.120 --> 0:07:43.560 value the factor. And you remember, value the factors often 0:07:43.600 --> 0:07:46.040 sector neutralized, so you're just looking at the cheapest companies 0:07:46.080 --> 0:07:50.080 within each sector as opposed to taking big sector concentrations, 0:07:50.120 --> 0:07:53.680 oftentimes with a value value the style. And so there 0:07:53.720 --> 0:07:57.240 are certainly companies that are cheaper than they have been historically. 0:07:57.600 --> 0:08:00.880 Some of them are more structurally impaired, and some of 0:08:00.880 --> 0:08:03.240 the stuff, like let's say we're looking in Europe that 0:08:03.400 --> 0:08:06.640 is cheaper, is more domestically oriented, doesn't have the strong 0:08:06.680 --> 0:08:10.920 global growth um you know, tilt, and perhaps deserves a 0:08:10.960 --> 0:08:13.760 lower valuation than some of the multinationals that have multiple 0:08:13.760 --> 0:08:17.360 earning streams. Were you guys long ice cream? Yesterday? The 0:08:17.400 --> 0:08:20.400 weather in Manhattan was so good that anybody within forty 0:08:20.440 --> 0:08:23.560 two ft of me demanded ice cream. You need a 0:08:23.600 --> 0:08:26.320 time arizon of about five minutes if you were, because 0:08:26.560 --> 0:08:31.240 it's freezing again. Went back down into the fourties. There's 0:08:31.280 --> 0:08:33.560 the most position and open up the trading book on 0:08:33.640 --> 0:08:36.280 ice cream. Do you want to understand the cost of 0:08:36.360 --> 0:08:40.360 ice cream? That's not Howard Johnson's Columbus Circle. There's an 0:08:40.400 --> 0:08:44.120 ice cream place it dance the wallet. I don't have 0:08:44.200 --> 0:08:47.000 kids like you, and I'm actually it's really expensive. Tompkin. 0:08:47.120 --> 0:08:49.200 It was gorgeous yesterday. What do we get up to? 0:08:49.320 --> 0:08:54.200 Seventies and seventy seventies? Ate? Thank you with black Rocket. 0:08:54.280 --> 0:09:08.760 This is Bloomberg. We're talking with Hans Hume before about 0:09:08.800 --> 0:09:12.640 his interest in Venezuela. We think all in Venezuela for watching, 0:09:12.679 --> 0:09:16.280 as we've heard from a number of voices today. Speak 0:09:16.320 --> 0:09:19.920 to the Venezuela people and Hans Hume, as you mentioned earlier, 0:09:20.280 --> 0:09:25.640 the Venezuela elite about almost as nostalgia to get back 0:09:25.640 --> 0:09:31.000 to a Venezuela of another time. Is that possible. You know, 0:09:30.440 --> 0:09:33.840 I don't think anybody wants to go back to the 0:09:33.920 --> 0:09:36.480 Venezuela another time. I mean, certainly in the nineteen seventies, 0:09:36.520 --> 0:09:39.240 I mean that was probably the dream scenario. Oil prices high, 0:09:39.760 --> 0:09:43.920 um education funded for any anybody in Venezuela, that a 0:09:44.000 --> 0:09:48.400 lot of people stuttering studying internationally, and I mean Venezuela 0:09:48.440 --> 0:09:52.440 was the strongest economy in Latin America. All prices go down, 0:09:53.160 --> 0:09:56.480 you start getting social divisions. The elite was very entrenched, 0:09:56.480 --> 0:09:59.160 and Chaves took a message that really resonated with the 0:09:59.160 --> 0:10:02.120 majority of the popula Asian. The problem is that Javis 0:10:02.240 --> 0:10:03.800 was hardly an economist. I mean, if you take a 0:10:03.800 --> 0:10:07.280 look of Venezuela and compared to Equador, for example, Raphael 0:10:07.360 --> 0:10:09.320 Correa came in with the same kind of message, but 0:10:09.360 --> 0:10:13.040 he actually implemented some economic policies that were was able 0:10:13.080 --> 0:10:17.120 to broaden the economy and opportunities for the majority of 0:10:17.160 --> 0:10:19.880 the population. Um. So there's been a real change in 0:10:19.920 --> 0:10:23.600 the infrastructure Equador, Venezuela. It's all been ripped apart, and 0:10:23.640 --> 0:10:25.480 I think that the recovery is going to have to 0:10:25.520 --> 0:10:29.320 be something along those lines. Eventually, were more people of 0:10:29.360 --> 0:10:33.120 access to you know, the economic power than you saw 0:10:33.160 --> 0:10:37.719 prior to the Javis Revolution. This is a total economic tragedy. 0:10:38.040 --> 0:10:42.319 There is a seriously powerful story on the Bloomberg Today 0:10:42.320 --> 0:10:46.959 written by our colleague Fabiol Zerpa who's basically rights that 0:10:47.080 --> 0:10:50.800 PETERSA Cruz the National Old Company a skipping work to 0:10:50.920 --> 0:10:53.880 hunt for food. Just think about that, skipping work to 0:10:54.000 --> 0:10:55.960 hunt for food. And the individual in the story says, 0:10:55.960 --> 0:10:57.920 I haven't eaten meat for two months. The last time 0:10:57.960 --> 0:11:00.640 I did, I spent my whole week's salary on chicken meal. 0:11:01.080 --> 0:11:03.920 That's how tragic things are right now, Hans. And as 0:11:03.920 --> 0:11:06.120 you look at other situations you've been involved in the past, 0:11:06.120 --> 0:11:09.959 and we can talk about your experience with Grace Venezuela, 0:11:10.240 --> 0:11:14.319 is that a really really unique situation right now versus 0:11:14.360 --> 0:11:17.360 everything else you've ever experienced. You know, it's kind of 0:11:17.360 --> 0:11:21.200 interesting because I remember in another interview Um making the 0:11:21.280 --> 0:11:24.920 point that if you're looking long term returns, you know, 0:11:25.400 --> 0:11:27.240 investing in men as well, you're not expecting it to 0:11:27.240 --> 0:11:31.800 become Switzerland. You just don't want it to become Zimbabwe. Absolutely. 0:11:31.880 --> 0:11:35.280 The next day you had the coup and Zimbabwe and 0:11:35.600 --> 0:11:39.080 Gabe got kicked out. And now Zimbabwe is like sort 0:11:39.080 --> 0:11:42.920 of the darling at Davos um Venezuel. It is a tragedy, 0:11:43.440 --> 0:11:46.400 uh the um you know, if you look at the 0:11:46.400 --> 0:11:49.760 amount of hunger, not just among the you know, the 0:11:49.880 --> 0:11:52.800 oil industry workers, but across you know, you look at 0:11:52.880 --> 0:11:56.520 deaths of you know, babies in hospitals. I mean, the 0:11:56.679 --> 0:12:01.360 entire support network for the society has been ripped apart um. 0:12:01.400 --> 0:12:03.040 And I think the real tragedy is I mean, there 0:12:03.080 --> 0:12:06.480 was the initial elite that consolidated a lot of the 0:12:06.520 --> 0:12:08.360 wealth and we're taking quite a bit of off shore. 0:12:08.559 --> 0:12:13.680 But in the last ten fifteen years, the people in 0:12:13.720 --> 0:12:17.400 the current administration that had people in the oil companies 0:12:17.760 --> 0:12:20.600 in you know, the senior people in the government have 0:12:20.840 --> 0:12:26.160 probably swept you know, between billion and trillion dollars offshore. 0:12:26.640 --> 0:12:29.439 So you know what the tragedy really isn't I mean, 0:12:29.480 --> 0:12:32.200 people has been discussion about hunger bonds, but it's really 0:12:32.920 --> 0:12:36.319 that there's it's a kleptocracy at this point and so 0:12:36.440 --> 0:12:40.800 much money has been swept off shore that there's nothing there, 0:12:41.320 --> 0:12:43.720 you know, two left in the country. So I worked 0:12:43.760 --> 0:12:45.959 this question carefully because I think it's the best way 0:12:46.000 --> 0:12:48.679 of wording this as an investor. You want to finance 0:12:48.720 --> 0:12:52.160 the economic recovery of what is right now an absolute tragedy. 0:12:52.400 --> 0:12:53.800 But as you look at the situation, what are the 0:12:53.800 --> 0:12:57.680 opportunities to do that? I mean, clearly, anything you know 0:12:57.760 --> 0:13:00.240 that you look at to invest on the ground is 0:13:00.600 --> 0:13:02.880 that the people are giving it away. Um. On the 0:13:02.920 --> 0:13:06.240 fixed income side, both Petavesa and Venezuelan sovereign bonds are 0:13:06.240 --> 0:13:10.400 trading very cheap. But I think the first step, uh 0:13:10.679 --> 0:13:14.480 is to get you know, assuming there'll be a transition 0:13:14.960 --> 0:13:18.080 of the government at some point, um. I mean, I 0:13:18.120 --> 0:13:22.240 think that the idea that Caracas will become Havana and 0:13:22.440 --> 0:13:26.080 will stay off in outside the international community for more 0:13:26.120 --> 0:13:29.439 than five years is is far fetched, but it is. 0:13:29.679 --> 0:13:32.320 You know, when the recovery happens, you're going to have 0:13:32.520 --> 0:13:36.440 to cooperate with the international community to bring the stolen 0:13:36.480 --> 0:13:39.600 money back into the domestic economy, and then you'll have 0:13:39.640 --> 0:13:42.719 to start rebuilding the rule of law, um, you know, 0:13:43.280 --> 0:13:45.560 and try to bring the country back to where it was. 0:13:45.880 --> 0:13:48.679 Thank you for the briefing. Hans Hume, who looks at 0:13:48.720 --> 0:13:52.720 distressed things like Greece at a certain point, like maybe 0:13:52.760 --> 0:13:56.280 Portugal at a certain point. In this case, Venezuela. He 0:13:56.440 --> 0:14:10.000 is with Gray Lucky. Should we now speak with Dennis Gartman, 0:14:10.080 --> 0:14:12.240 which is always a good and beautiful thing. We talked 0:14:12.240 --> 0:14:16.120 to him about rising rates, about equities, about the joy 0:14:16.200 --> 0:14:18.319 that in his newsletter he writes in the back end 0:14:18.360 --> 0:14:22.520 of it, the winning and often the losing in trades. 0:14:23.040 --> 0:14:27.240 Capital risk management always from the center from Mr Gartman. 0:14:27.760 --> 0:14:31.160 But first a modest uproar. Let me brief you on this, folks. Uh. 0:14:31.520 --> 0:14:36.359 Mr Gartman went all bitcoin, he went down in flames, 0:14:37.320 --> 0:14:39.520 and there was a course within the volatility. The last 0:14:39.520 --> 0:14:42.920 couple of weeks, different reports, and we at Bloomberg wrote 0:14:42.960 --> 0:14:45.400 up the story. And you know, I must admit, Dennis, 0:14:45.400 --> 0:14:47.760 the headline was a little of cerbics, saying, you blew 0:14:47.880 --> 0:14:51.960 up your retirement account? Did you jump into the James River? What? What? 0:14:51.960 --> 0:14:57.680 What happened with your retirement? I lost a little over um, 0:14:57.960 --> 0:15:00.520 which to me is really quite disturbing. Yeah, um, I 0:15:01.200 --> 0:15:03.320 suspected a loss of one percent or one and a 0:15:03.360 --> 0:15:06.400 half percent or so. It's probably not going to cause 0:15:06.440 --> 0:15:08.800 me to lose a great good deal of sleep, nor 0:15:08.880 --> 0:15:11.440 has it blown up my retirement funds, nor shall I 0:15:11.480 --> 0:15:14.960 have to go into work longer day longer weeks and 0:15:15.160 --> 0:15:19.520 years to recover. I had a excuse me. I had 0:15:19.560 --> 0:15:23.200 a bad trade. Yeah, I got out, but the headlines 0:15:23.240 --> 0:15:26.280 that Bloomberg had written made it look like I had 0:15:26.520 --> 0:15:29.560 and had been debilitated, and that's simply not to come. 0:15:29.680 --> 0:15:31.760 I talked to our David Litkar, editor on this, and 0:15:31.840 --> 0:15:33.680 he made clear we made some tweaks to that. But 0:15:33.760 --> 0:15:36.720 the idea of Dennis, whether you were done one percent 0:15:36.840 --> 0:15:39.200 or five percent, or you've got closet in a bitcoin 0:15:39.280 --> 0:15:43.680 trade in the heat of down a thousand points in 0:15:43.760 --> 0:15:47.200 the heat yesterday of a swing of five hundred points, 0:15:47.240 --> 0:15:51.280 in two cups of gartment cup of coffee, what should 0:15:51.360 --> 0:15:55.400 people do? You're in a dog trade, you said in 0:15:55.400 --> 0:15:58.040 your newsletter, you were in some bitcoin riot coin thing, 0:15:58.080 --> 0:16:01.240 whatever it was, you were in this a thing. What 0:16:01.480 --> 0:16:05.480 should people do when they're going down in flames on 0:16:05.560 --> 0:16:09.120 an individual trade. Get to the sidelines as fast as 0:16:09.120 --> 0:16:12.160 you possibly can, take your loss and miss admit that 0:16:12.200 --> 0:16:16.920 you had made a mistake for whatever reason, and and 0:16:17.000 --> 0:16:18.440 do the best that you can. But going to the 0:16:18.480 --> 0:16:21.920 sidelines is always the best course of action. And as 0:16:21.960 --> 0:16:25.280 I've always said, there's never just one cockroach. Usually when 0:16:25.280 --> 0:16:28.480 a problem occurs, is followed by others, and the stock 0:16:28.520 --> 0:16:31.040 has continued to fall since then. With with within this, 0:16:31.160 --> 0:16:37.360 Dennis is risk management? Do stop losses work when you're 0:16:37.440 --> 0:16:40.080 going down in riot coin or whatever? It was that quick? 0:16:40.120 --> 0:16:43.680 I mean, I'm sorry, John Ferrell. Technical analysis doesn't work 0:16:44.080 --> 0:16:46.960 when the line is we keep referring to this is 0:16:47.080 --> 0:16:49.720 riot chain? What is this riot blockchain? It was a 0:16:49.800 --> 0:16:52.400 block check company that went all crypto. And I want 0:16:52.400 --> 0:16:55.400 to try and understand why someone like you, Dennis exactly 0:16:55.520 --> 0:16:58.320 was anywhere near this company. Why did you hold this stock? 0:16:59.800 --> 0:17:02.080 I was looking at the chart. I saw something that 0:17:02.080 --> 0:17:04.280 that was pleasing. It had an out of what I 0:17:04.359 --> 0:17:07.040 call an outside reversal two weeks per or. Prior to that, 0:17:07.680 --> 0:17:10.560 uh and UH, I understand that a couple of friends 0:17:10.560 --> 0:17:13.440 of mine from years past were becoming involved. That changed 0:17:13.480 --> 0:17:16.400 my opinion. I thought I could see a decent reward 0:17:16.440 --> 0:17:19.560 and a reasonable risk, and for a while the trade 0:17:19.600 --> 0:17:21.440 was doing really quite well. I think I bought it 0:17:21.520 --> 0:17:24.080 at fifteen and a half. Sixteen sixteen and a half 0:17:24.600 --> 0:17:27.160 added to a winning trade. I think it was up 0:17:27.160 --> 0:17:29.680 to seventeen twenty the night before, and then out came 0:17:30.280 --> 0:17:33.280 that expose a tennis. We talked about technicles here, would 0:17:33.320 --> 0:17:36.720 you seriously exclusively a d put a position on by 0:17:36.760 --> 0:17:39.880 a equity by a stock on technacles alone, without doing 0:17:39.880 --> 0:17:42.720 any fundamental analysis of what this company's up to. It's 0:17:42.760 --> 0:17:44.240 not the first time I've done that. It won't be 0:17:44.280 --> 0:17:45.800 the last time I've done that. There there are a 0:17:45.880 --> 0:17:48.159 number of reasons why I did it, and it was 0:17:48.200 --> 0:17:50.680 a very small amount of money compared to the size 0:17:50.680 --> 0:17:54.600 of my my retirement funds, So yeah, clearly I there 0:17:54.640 --> 0:17:56.320 There have been times in the past when a when 0:17:56.320 --> 0:18:00.680 a simple technical circumstance has has a list has has 0:18:01.040 --> 0:18:03.040 caught my attention, and I have acted. I'm not the 0:18:03.080 --> 0:18:05.159 only things that's ever done that. I won't be the last. 0:18:05.520 --> 0:18:08.720 This is very honest discussion, folks, Dennis Garment, what's so 0:18:08.920 --> 0:18:15.320 poor important? Here is a struggle of partitioning investment from speculation? 0:18:15.920 --> 0:18:20.240 How do you partition gold hedged in euro or a 0:18:20.359 --> 0:18:23.760 long term long bet on the United States of America 0:18:24.400 --> 0:18:27.720 from what's it called? John on his speculation on Riot? 0:18:27.800 --> 0:18:31.560 What riot block chain? How do you can we change 0:18:31.600 --> 0:18:33.800 is the Bloomberg block chain? That would be good for 0:18:33.800 --> 0:18:37.760 the show? Dennis? How do you partition? We would wait, 0:18:37.800 --> 0:18:40.439 we only got forty two listeners. Now, Dennis, how do 0:18:40.520 --> 0:18:45.520 you partition investment from speculation? That's the heart of this discussion. 0:18:45.960 --> 0:18:49.080 I don't think there is a different differentiation between investment 0:18:49.080 --> 0:18:52.200 and speculation. I I learned long ago when I worked 0:18:52.240 --> 0:18:53.880 at the bank as a as a fort ex change 0:18:53.880 --> 0:18:56.000 trader and watched one of the major one of the 0:18:56.040 --> 0:18:58.679 major traders in the bank put positions on for the 0:18:58.680 --> 0:19:01.880 bank's portfolio. When they win against him, they became part 0:19:01.920 --> 0:19:04.600 of the portfolio and became an investment. When he made 0:19:04.600 --> 0:19:09.120 a quick profit, they became a speculation. All trading, all investment, 0:19:09.200 --> 0:19:12.120 begins as a speculation. And usually what I have seen 0:19:12.160 --> 0:19:14.560 over the course of years is that people who allow 0:19:14.600 --> 0:19:17.240 a trade to go against them say that the fundamentals 0:19:17.240 --> 0:19:21.000 have not changed. Something else has changed. You're losing money. 0:19:21.320 --> 0:19:23.760 And that's what separates I think pros from amateurs in 0:19:23.800 --> 0:19:27.080 the business. His pros will lose money more often than 0:19:27.119 --> 0:19:30.240 amateurs will. But pros will lose will make so much 0:19:30.240 --> 0:19:31.880 more on the one or two or three or four 0:19:31.920 --> 0:19:34.320 trades out of the fifteen that they have. And that's 0:19:34.359 --> 0:19:49.880 what's important, and that's what differentiates Dennis Gallman to really 0:19:50.000 --> 0:19:54.960 link in UH science and technology in a way that 0:19:55.920 --> 0:19:59.040 the great response we got yesterday from those older that 0:19:59.160 --> 0:20:03.600 remember where you stopped for space launches, and a lot 0:20:03.640 --> 0:20:05.879 of younger people are saying, well, that's odd, and I'm like, no, 0:20:06.000 --> 0:20:08.159 it's not odd. It's what we used to do and 0:20:08.280 --> 0:20:11.159 through the sixties and even well into the seventies and 0:20:11.160 --> 0:20:13.160 of course up to a grim day with a Challenger 0:20:13.880 --> 0:20:17.280 accident of years ago. But um, we're gonna do that. 0:20:17.359 --> 0:20:23.200 SpaceX scrubbed yesterday the reports our official surveillance aerospace engineer, 0:20:23.560 --> 0:20:27.440 our worst span, David worst Span doesn't when you get 0:20:27.480 --> 0:20:30.600 that much engineering, you don't use your first name. It's 0:20:30.640 --> 0:20:35.159 just surveillance aerospace expert. Our worst span tells us that 0:20:35.359 --> 0:20:38.880 down wind, it looks good today for SpaceX. How does 0:20:38.880 --> 0:20:43.360 it look for Rubber Made. I have discovered that offspring 0:20:43.720 --> 0:20:48.720 like rubber made airtight cartons to keep their slim in. 0:20:49.640 --> 0:20:53.560 So is this the slime report with Newell rubber Made. Well, 0:20:53.640 --> 0:20:57.439 that's just the focus on Newell Brands, which owns rubber 0:20:57.480 --> 0:21:02.800 Made all along with a lot of other UH consumer products. 0:21:02.800 --> 0:21:05.440 It's up two and a half percent in early trading. 0:21:06.040 --> 0:21:09.520 The household product maker appointed too independent directors to its 0:21:09.520 --> 0:21:12.480 board instead of would nominate a third for election this year. 0:21:12.880 --> 0:21:18.120 All this change coming as activist investors Starboard Value wages 0:21:18.200 --> 0:21:21.520 a proxy fight to take over a newle's board. So 0:21:22.080 --> 0:21:24.480 change is coming. It's just a question of how it 0:21:24.520 --> 0:21:26.440 gets there and what it looks like when it's all over. 0:21:27.280 --> 0:21:29.800 You've got a couple of earnings reports out of the 0:21:30.200 --> 0:21:32.920 energy business which are being well received, one of them 0:21:32.920 --> 0:21:35.679 from Apache. It's up one and a half percent. The 0:21:35.720 --> 0:21:38.640 oil and gas producer's fourth quarter earnings and sales beat 0:21:38.680 --> 0:21:43.359 analysts average estimates in Bloomberg Survey and Technic f m C. 0:21:43.640 --> 0:21:47.520 The All Services company up six percent. Earnings before interest, taxes, 0:21:47.520 --> 0:21:51.479 depreciation and amortization for the fourth quarter beat estimates. Ut 0:21:51.520 --> 0:21:54.679 of the technique. FMC also raised this year's forecast for 0:21:54.760 --> 0:21:59.320 EBA don margin a profitability gauge. Hormel Foods, though down 0:21:59.359 --> 0:22:02.400 three percent, anty maker of spam, canned meat and other 0:22:02.440 --> 0:22:05.240 food items, posted earnings and sales for the fiscal first 0:22:05.320 --> 0:22:08.359 quarter that were lower than projections. Hormouse side at higher 0:22:08.400 --> 0:22:13.440 freight costs along with weakness and its Genio turkey business. Uh, 0:22:13.560 --> 0:22:18.160 you've got wayfair lower by fourteen percent, but I don't 0:22:18.280 --> 0:22:23.640