WEBVTT - Where to Invest $1 Million Right Now 0:00:02.720 --> 0:00:07.200 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:17.079 --> 0:00:19.720 Welcome to Marin Talks Your Money, the Personal finance edition 0:00:19.760 --> 0:00:21.640 of Marin Talks Money, where we talk about the best 0:00:21.640 --> 0:00:24.520 strategies for making the most of your money. I'm Maren 0:00:24.560 --> 0:00:26.760 Zum said Webb, and this week I am welcoming back 0:00:26.800 --> 0:00:31.680 to the show Bloomberg Personal Finance and investing reporter Suzanne Willie. Welcome, Suzann. 0:00:32.240 --> 0:00:33.040 Great to be here. 0:00:37.760 --> 0:00:39.960 Wow, it's a difficult time to think about what to 0:00:40.040 --> 0:00:42.199 invest in, isn't it. So it's lucky that we have 0:00:42.320 --> 0:00:44.440 your go tos. I mean, we're sitting here on we 0:00:44.479 --> 0:00:46.479 and there's been a wonderful run in markets, and now 0:00:46.479 --> 0:00:48.360 this seems like a little bit of an AI wabble 0:00:48.400 --> 0:00:50.600 going on, and there's more and more talk about is 0:00:50.600 --> 0:00:52.720 it a bubble? Will there be a crash? What will happen? 0:00:52.760 --> 0:00:54.520 What do I invest in if I can't invest in AI? 0:00:54.600 --> 0:00:56.120 Because AI is the only thing in the world to 0:00:56.160 --> 0:00:57.480 invest in, et cetera. 0:00:58.080 --> 0:01:04.600 Exactly exactly. And goal yeah, gorblingbling. 0:01:02.760 --> 0:01:07.280 But hanging in there, hanging in there around four thousand gold. Yeah, 0:01:07.360 --> 0:01:12.360 everything's going to be fine with gold surely. Anyway, you 0:01:12.440 --> 0:01:16.280 have been out there interviewing again, asking people who really 0:01:16.360 --> 0:01:20.480 work every day in the markets what they are investing 0:01:20.520 --> 0:01:23.360 in or what they would invest in, and also crucially, 0:01:23.400 --> 0:01:25.040 what they do if we just gave him a million 0:01:25.080 --> 0:01:26.880 bugs and told them they could do whatever they wanted 0:01:26.920 --> 0:01:28.960 with it. That's the most interesting bit of all this, 0:01:29.080 --> 0:01:30.720 I think. I mean, you know, we're instead of on't 0:01:30.720 --> 0:01:32.480 we and what they think about metals and all that 0:01:32.560 --> 0:01:34.640 kind of thing, But what we're really interested in is 0:01:34.720 --> 0:01:36.160 what they do with a million bugs. 0:01:36.200 --> 0:01:38.399 Exactly right. 0:01:38.480 --> 0:01:43.399 Let's talk about your first interviewe alexandri So Tavatsi, who 0:01:43.680 --> 0:01:47.440 is from pict A Wealth Management, and he is a 0:01:47.560 --> 0:01:51.240 man after my own heart because for him, the future 0:01:51.400 --> 0:01:52.600 is metaled. 0:01:52.240 --> 0:01:56.440 Right, Yes, yeah, he is really focused on a structural 0:01:56.480 --> 0:01:59.880 ball market in raw materials. I mean, his his line. 0:02:00.120 --> 0:02:01.880 You know, the infrastructure of the future is being built 0:02:01.880 --> 0:02:05.800 today and it's metal intensive, so you know, we're seeing 0:02:05.880 --> 0:02:10.400 record demand for materials like copper and lithium materials. They 0:02:10.520 --> 0:02:12.799 sort of give you access to the physical backbone of 0:02:12.840 --> 0:02:16.600 tomorrow's economy. He likes asset heavy companies in the space, 0:02:16.639 --> 0:02:21.000 so companies that have like significant physical assets like smelters, refineries, 0:02:21.120 --> 0:02:23.640 land in real estate. You know, in part this is 0:02:23.639 --> 0:02:27.080 because they provide an inflation hedge as commodity prices rise. 0:02:27.720 --> 0:02:30.600 So he would deploy the one million into three buckets. 0:02:31.160 --> 0:02:33.680 He'd put about half in a diversified group of global 0:02:33.680 --> 0:02:38.919 mining companies with exposure to copper, aluminum, nickel, and rare earths. 0:02:39.080 --> 0:02:42.440 And that's because he calls them the building blocks for 0:02:42.480 --> 0:02:46.520 grid upgrades, for electric vehicles and battery storage. And then 0:02:46.520 --> 0:02:49.919 he'd put about thirty percent to direct commodity ETFs, again 0:02:50.240 --> 0:02:55.360 copper aluminum and an array of battery components. Further, he 0:02:55.480 --> 0:02:59.680 likes their inflationary status and they provide a good sort 0:02:59.720 --> 0:03:02.919 of or direct play on metal prices. For the final 0:03:02.960 --> 0:03:05.280 twenty percent, he went just target public companies that are 0:03:05.280 --> 0:03:08.519 sort of the picks and shovels needed to build energy infrastructure. 0:03:08.760 --> 0:03:12.480 Grid connections, power inverters, storage systems, all of these sort 0:03:12.520 --> 0:03:15.839 of basic building blocks of the infrastructure that we're going 0:03:15.919 --> 0:03:18.880 to you know, no doubt be needing well out into 0:03:18.880 --> 0:03:19.360 the future. 0:03:19.600 --> 0:03:21.520 Yeah, I mean, this is so interesting. It's something that 0:03:21.560 --> 0:03:23.760 we talk about on the podcast a lot. We talk 0:03:23.760 --> 0:03:26.680 about will there be a commodity supercycle? We talk about 0:03:26.680 --> 0:03:29.840 inflation and how you had you against inflation, and in particular, 0:03:30.160 --> 0:03:32.560 over the last year or so, we've been talking about 0:03:32.720 --> 0:03:35.560 the price of AI companies. So if you buy a 0:03:35.600 --> 0:03:38.240 company that are directly involved in the AI revolution, it's 0:03:38.240 --> 0:03:42.160 going to be extremely expensive on every single valuation measure. 0:03:42.360 --> 0:03:46.480 So true, the companies that allow the AI company to 0:03:46.640 --> 0:03:51.720 even begin to exist, the companies that produce the metals 0:03:51.760 --> 0:03:55.640 and the products that allow the grid to be upgraded 0:03:55.680 --> 0:03:58.600 and data system data centers to exist, etc. You can 0:03:58.640 --> 0:04:03.000 buy those for all there's nothing, So it makes so 0:04:03.240 --> 0:04:09.640 little sense. So this strategy, to me, it seems incredibly sensible. 0:04:09.760 --> 0:04:11.840 You want to be invested in the future, but you 0:04:11.840 --> 0:04:14.000 don't want to pay a pee of seventy times to 0:04:14.000 --> 0:04:16.880 be invested in the future. You'd rather pay a pe 0:04:16.960 --> 0:04:19.080 of ten to fifteen times even less than some of 0:04:19.080 --> 0:04:22.880 these cases, to be exposed to the building blocks behind 0:04:23.040 --> 0:04:24.360 that technological revolution. 0:04:24.760 --> 0:04:27.960 Absolutely, I think it's a really sort of solid argument. 0:04:28.200 --> 0:04:32.320 And with AI today getting in where the prices are, 0:04:32.440 --> 0:04:34.880 it just seems kind of insane to me. 0:04:35.240 --> 0:04:38.400 Yeah. Now, Alexandra, he also as as I Alexandra, he 0:04:38.480 --> 0:04:41.640 has in his mind AI across the board, I'd say, 0:04:41.680 --> 0:04:44.200 because when you asked him what he'd do with a 0:04:44.240 --> 0:04:49.800 million dollars outside this more conventional investment approach. He immediately 0:04:49.839 --> 0:04:53.800 shifted to worrying about the disruption to any work or 0:04:53.839 --> 0:04:56.839 careers that his children might have in future, and the 0:04:57.000 --> 0:04:59.279 need to give them some kind of cushion. 0:04:59.360 --> 0:04:59.560 Right. 0:05:00.279 --> 0:05:02.919 Yeah, that's a great point he did, you know. He 0:05:02.960 --> 0:05:04.880 talked about how young men and women today entry the 0:05:04.960 --> 0:05:08.680 labor for us, are confronting these massive challenges of technological change, 0:05:08.920 --> 0:05:11.960 you know, geopolitical order being reshaped. So he would give 0:05:12.000 --> 0:05:15.119 the one million to his kids and sort of free 0:05:15.120 --> 0:05:18.080 them up to focus, he said, on the opportunities of today, 0:05:18.600 --> 0:05:21.599 rather than the uncertainties of tomorrow, to sort of free 0:05:21.640 --> 0:05:24.920 them from worries related to potential work disruptions. So it 0:05:25.040 --> 0:05:27.919 was it was a really interesting way to spend the money, 0:05:27.920 --> 0:05:29.840 given what his main entry was about. 0:05:30.200 --> 0:05:32.400 Yeah, it's interesting, isn't it, giving your kids a gift 0:05:32.400 --> 0:05:32.919 of freedom. 0:05:33.040 --> 0:05:33.680 I would take that. 0:05:33.960 --> 0:05:36.960 Yeah, although for another podcast, of course, giving your children 0:05:37.040 --> 0:05:39.279 too much money can hamper them horribly. You have to 0:05:39.279 --> 0:05:43.400 find this sweet spot, don't you, between taking away a 0:05:43.520 --> 0:05:47.080 good bit of the pain, but also leaving them in 0:05:47.120 --> 0:05:50.919 need enough to drive them to self fulfillment. We all know, 0:05:50.960 --> 0:05:52.240 the miserable trust fund kid. 0:05:52.520 --> 0:05:54.400 Yeah, and if they have the sort of money all 0:05:54.440 --> 0:05:58.120 their lives and they don't encounter sort of any sort 0:05:58.160 --> 0:06:00.760 of difficulties, you know, how did they develop resilience? 0:06:01.440 --> 0:06:05.240 Well, resilience and self fulfillment. That's what we all need anyway, 0:06:05.720 --> 0:06:07.480 Not for this podcast is that. That's a different one. 0:06:07.520 --> 0:06:09.440 In fact, we should do a different one. We should 0:06:09.440 --> 0:06:11.320 do a podcast on inheriting wealth. 0:06:11.400 --> 0:06:12.159 That would be great. 0:06:12.360 --> 0:06:14.480 Not just on how much is been going to be inherited? 0:06:14.520 --> 0:06:16.760 Can we talk about that all the time, but the 0:06:17.360 --> 0:06:23.400 emotional and productivity sound of inheriting wealth. Okay, stand by 0:06:23.440 --> 0:06:26.440 for that one, listeners. But let's move on to fat. 0:06:26.520 --> 0:06:30.000 Let's stick with luxury. Then you spoke to Chloe Duanchi, 0:06:30.240 --> 0:06:34.080 head of macro and investment strategy at the Rockefeller Global 0:06:34.120 --> 0:06:35.800 Family off as well about they know what they're doing, 0:06:36.040 --> 0:06:38.520 and she was all about luxury real estate. 0:06:39.320 --> 0:06:43.040 Yes, she was saying that there's a lot of interesting 0:06:43.160 --> 0:06:47.000 opportunities unfolding in some of the more niche thematic corners 0:06:47.000 --> 0:06:50.640 of luxury real estate development, such as premium student housing 0:06:51.279 --> 0:06:55.800 at state universities in the US and in really high resorts. 0:06:55.800 --> 0:06:59.120 Because as we know, while the average US consumer, the 0:06:59.120 --> 0:07:01.440 low income consumers under pressure, and we're starting of seeing 0:07:01.440 --> 0:07:05.160 cracks show up and the financial pictures there the market 0:07:05.240 --> 0:07:08.000 looks very different at the top of the income spectrum. 0:07:08.040 --> 0:07:12.640 We had that statistic out of Moodies about how much 0:07:12.640 --> 0:07:15.320 of consumer spending. I think it was about fifty percent 0:07:15.800 --> 0:07:18.640 of all consumer spending in the second quarter was done 0:07:18.640 --> 0:07:22.160 by the top ten percent of US earners, and that 0:07:22.280 --> 0:07:26.040 is huge. So that is an area where spending by 0:07:26.040 --> 0:07:29.960 affluent households, it's far more stable against across cycles, she 0:07:30.040 --> 0:07:32.360 was saying, and that resilience is what people will pay 0:07:32.360 --> 0:07:34.840 a premium on, which makes a lot of sense to me. 0:07:35.200 --> 0:07:39.280 She thinks that part of the story to her real 0:07:39.360 --> 0:07:42.600 estate development idea is the supply vacuum that we saw 0:07:42.680 --> 0:07:45.320 created by a number of years of limited new construction, 0:07:46.040 --> 0:07:48.760 when new builds virtually froze during twenty twenty two and 0:07:48.800 --> 0:07:53.120 twenty twenty four. So she's playing this sort of collision 0:07:53.160 --> 0:07:58.120 between scarce new supply coupled with sort of steady if 0:07:58.120 --> 0:08:02.960 not improving demand and student housing. You know, she says 0:08:03.000 --> 0:08:05.320 that at first, I thought she was going to say, oh, 0:08:05.480 --> 0:08:07.200 premium student housing. I thought she was going to say 0:08:07.200 --> 0:08:09.280 like I don't know Harvard or Yeah or some of 0:08:09.280 --> 0:08:12.120 the really elite opportunities. But she was still saying, like, 0:08:12.240 --> 0:08:15.960 very good flagship state schools with big sports teams have 0:08:16.120 --> 0:08:18.800 seen risily enrollment and a lot of growth, but the 0:08:18.880 --> 0:08:23.800 supply of student housing hasn't kept pace, even as rents 0:08:23.800 --> 0:08:27.880 have popped up quite nicely. And it's not an imbalance. 0:08:27.920 --> 0:08:30.440 It's likely to go away soon because to be a 0:08:30.480 --> 0:08:33.520 player in this space in student housing, you have to 0:08:33.520 --> 0:08:36.160 have a lot of history with that area. You have 0:08:36.240 --> 0:08:38.560 to sort of know the local politics, you have to 0:08:38.600 --> 0:08:42.200 know what the local entitlements are. You really have to 0:08:42.240 --> 0:08:45.880 sort of it's a very specialized niche. So you can't 0:08:45.920 --> 0:08:47.280 sort of easily parachute in. 0:08:48.160 --> 0:08:50.600 It's interesting them and it's not for everyone. I mean, 0:08:50.679 --> 0:08:54.120 how do you invest in that? In student housing in 0:08:54.200 --> 0:08:55.600 the US. You don't want to go out and buy 0:08:55.640 --> 0:08:58.320 a student student house if you haven't got a student 0:08:58.360 --> 0:09:01.360 at that universities, So you need to find some kind 0:09:01.400 --> 0:09:03.640 of fund or a collective vical for that. 0:09:04.280 --> 0:09:06.240 You need to find a private fund or basically you 0:09:06.280 --> 0:09:08.960 need to work with somebody like you know, like Rockefeller, 0:09:09.320 --> 0:09:11.840 you know, a high end you know, private wealth office 0:09:11.880 --> 0:09:15.040 that will have access to some of these players. 0:09:15.640 --> 0:09:18.000 And the other thing that she talked about was experience 0:09:18.120 --> 0:09:20.720 is as the new STATA symbol. We don't want stuff anymore. 0:09:20.720 --> 0:09:22.880 We want experiences that we can put all over our 0:09:22.880 --> 0:09:27.480 social media and effectively get a longer term return from right. 0:09:27.640 --> 0:09:30.280 And therefore the idea is that you should maybe have 0:09:30.320 --> 0:09:32.760 a look at some way of investing in luxury resorts 0:09:32.800 --> 0:09:35.760 and the developers that create those luxury results. Again, that's 0:09:35.800 --> 0:09:37.400 not for everyone, is the no. 0:09:37.760 --> 0:09:40.120 But I mean it is an area where as you'd imagine, 0:09:40.200 --> 0:09:44.160 you know, the imboulnce between supply and demand is very big, 0:09:44.400 --> 0:09:46.559 and you know, it's very difficult to create one of 0:09:46.600 --> 0:09:49.360 these new luxury resorts. They want to be in amazing 0:09:49.400 --> 0:09:54.440 locations that often have sort of you know, environmental concerns, 0:09:54.480 --> 0:09:58.040 and so it's an area where there's going to be 0:09:58.120 --> 0:10:03.200 no supply lot for sure. And you know, like she said, 0:10:04.000 --> 0:10:07.040 you have to partner with an uber specialized operator. And 0:10:07.160 --> 0:10:12.680 some asset managers will take external capital into private credit 0:10:12.760 --> 0:10:17.200 or private equity, but you know, specialized players that have 0:10:17.240 --> 0:10:20.400 for prietary capital will sometimes take outside money. But it's 0:10:20.440 --> 0:10:21.920 not really something that you and I are going to 0:10:21.920 --> 0:10:23.360 go racing into I don't think. 0:10:37.720 --> 0:10:39.559 Your third one. You go through a lot of these 0:10:39.559 --> 0:10:41.320 people's who said, this must be an awful lot of 0:10:41.320 --> 0:10:45.360 telephone calls. That's so interesting. This is Ron Sanchez. He's 0:10:45.440 --> 0:10:49.560 with Vaduciary Trust Co. Internationally. He's the chief investment officer 0:10:50.000 --> 0:10:53.280 and he he starts out in your conversation saying exactly 0:10:53.320 --> 0:10:55.679 the right thing, which is there isn't actually know he's wrong. 0:10:55.720 --> 0:10:58.440 He says there aren't quick chief investment ideas or opportunities 0:10:58.440 --> 0:11:00.600 today give her. In the third year of the double 0:11:00.800 --> 0:11:03.120 digit pricing increases to the S and B five hundred, 0:11:03.400 --> 0:11:07.200 Ron Ron look abroad. It's not compulsory to covers in 0:11:07.240 --> 0:11:10.320 the US. Other options are available. You could look at 0:11:10.360 --> 0:11:14.400 the UK, where you know we're pretty key. Try emerging markets. 0:11:14.600 --> 0:11:19.960 There's all kinds of opportunities out there. Other alternatives are available. 0:11:20.160 --> 0:11:21.800 I think there was a little home bias there. 0:11:23.080 --> 0:11:27.720 Looking inside, Ron does find something that opportunities are narrow, 0:11:28.040 --> 0:11:32.199 that's leg but they exist in healthcare. 0:11:32.720 --> 0:11:36.960 He focuses on healthcare. He you know, like like you 0:11:37.000 --> 0:11:40.760 and like many people, is you know, concerned about the 0:11:40.880 --> 0:11:43.880 S and P and the level at which it's trading. 0:11:44.240 --> 0:11:47.640 And so he's you know, looking for more looking sort 0:11:47.640 --> 0:11:52.200 of digging deeper to find more active opportunities in the 0:11:52.240 --> 0:11:56.800 investment space. And I mean his point is that for 0:11:56.840 --> 0:12:00.000 a lot of reasons, you know, regulatory issues, drug person concerns, 0:12:00.360 --> 0:12:05.440 healthcare has struggled. And so he thinks it's trading at 0:12:05.480 --> 0:12:09.120 an attractive it's trading at an attractive multiple, it's trading 0:12:09.200 --> 0:12:14.600 at a discount to the broad market that is much 0:12:14.640 --> 0:12:17.679 more than it has been in recent history. And he 0:12:17.720 --> 0:12:21.080 also thinks, so from a risk management standpoint, maybe being 0:12:21.120 --> 0:12:24.080 in healthcare isn't a bad idea compared to you know, 0:12:24.120 --> 0:12:27.680 being in say Nvidia and Microsoft and such a concentrated 0:12:28.320 --> 0:12:31.280 bed on tech in the SMP. He notes, you know, 0:12:31.360 --> 0:12:34.640 Navidia and Microsoft combined to make up nearly fifty percent 0:12:34.640 --> 0:12:38.320 of the index, but the entire healthcare sector is nine 0:12:38.360 --> 0:12:39.240 percent of the index. 0:12:39.320 --> 0:12:41.480 That is a really interesting stat isn't it. 0:12:42.160 --> 0:12:44.480 Yes, and so, and he also notes that it's one 0:12:44.520 --> 0:12:47.640 of the most diversified sectors in the SMP, with everything 0:12:47.640 --> 0:12:50.640 from drug companies to biotech to equipment makers and so on. 0:12:51.080 --> 0:12:52.640 And I thought, you know, the really good point was, yes, 0:12:52.640 --> 0:12:55.920 they're in near term challenges for sure, but the demand 0:12:55.960 --> 0:13:00.400 for healthcare services and drugs is not going away. Well, 0:13:00.400 --> 0:13:02.079 in the long run, it's not going to go away. 0:13:02.120 --> 0:13:04.280 You know, I have aging populations here and many of 0:13:04.280 --> 0:13:07.840 the major countries around the world, so demand is only 0:13:07.880 --> 0:13:11.679 going to become greater. So he feels like there's some 0:13:11.720 --> 0:13:14.800 growth opportunities in healthcare. But also it's a bit of 0:13:14.840 --> 0:13:15.720 a defensive play. 0:13:16.280 --> 0:13:19.480 Fair enough, fair enough, and quite interesting. You know, if 0:13:19.480 --> 0:13:21.920 you're looking for looking for any kind of value inside 0:13:22.080 --> 0:13:25.720 the US, that's probably an interesting place to look. But interestingly, 0:13:25.800 --> 0:13:28.360 when it comes to us saying to him, what would 0:13:28.360 --> 0:13:31.520 you do with a million dollars outside conventional investment? Again, 0:13:31.640 --> 0:13:33.040 he's giving it the kid too. 0:13:34.200 --> 0:13:37.959 I know, I know he he thinks. You know, he 0:13:38.000 --> 0:13:40.840 said home ownership is the first step towards financial security, 0:13:40.840 --> 0:13:43.200 and so he would you know, he's talked about it 0:13:43.200 --> 0:13:47.199 with his kids, and starter homes are increasingly out of reach, 0:13:47.320 --> 0:13:50.559 so he would try to help close family members. 0:13:50.840 --> 0:13:53.040 I mean, it's so interesting, Suzanne. I'm sure that we're 0:13:53.040 --> 0:13:55.560 not allowed to talk about your nice contact like this, 0:13:55.679 --> 0:13:58.679 but pretty I'm guessing this man has already had an 0:13:58.720 --> 0:14:00.440 opportunity to give money to his children. 0:14:00.800 --> 0:14:03.160 Yeah, I don't I don't know so, I mean, I'm 0:14:03.160 --> 0:14:05.480 always surprised when people, when people who you think it 0:14:05.559 --> 0:14:08.640 probably already made these plans, probably already have something in 0:14:08.679 --> 0:14:10.920 place for their children, exactly, give them a million bucks 0:14:10.960 --> 0:14:11.960 and they give the kids more. 0:14:12.400 --> 0:14:15.040 What about the holidays. I know, last time we spoke, 0:14:15.080 --> 0:14:17.240 everyone was going on holiday with a million dollars. 0:14:17.360 --> 0:14:19.440 I know, I have to say it was it was. 0:14:19.520 --> 0:14:21.560 It was more fun last time, you know, we were 0:14:21.560 --> 0:14:23.800 talking about we were fantasizing about where we would go 0:14:23.840 --> 0:14:25.760 in the Greek riviera. 0:14:25.960 --> 0:14:30.240 Yeah, I mean, I wonder if this, if all these 0:14:30.240 --> 0:14:32.880 people saying that they give them money to their children, 0:14:33.160 --> 0:14:36.640 it suggests you know, when previously, even a few months ago, 0:14:36.640 --> 0:14:38.280 and we were talking, we say to people, you want 0:14:38.320 --> 0:14:39.480 a million bucks, what do you can't do it? 0:14:39.480 --> 0:14:41.280 They'll be like, well, who, I'm going on holiday. And 0:14:41.320 --> 0:14:42.920 now you're saying the same thing to them, and thinking 0:14:43.040 --> 0:14:45.200 like then they're saying, oh, things are difficult, things are tight. 0:14:45.280 --> 0:14:47.240 It's a gary out there and giving it the kids. 0:14:47.720 --> 0:14:50.520 Is this giving us some kind of anecdotal sense of 0:14:50.560 --> 0:14:53.440 a shift in the way people are feeling in the US. 0:14:53.840 --> 0:14:56.720 It's interesting. I think it probably is. I mean, there's 0:14:56.760 --> 0:14:59.520 this sentiment shift and there's just you know, so much 0:14:59.600 --> 0:15:03.240 uncertain tea, and we've got the shutdown, you know, the 0:15:03.280 --> 0:15:07.560 government shutdown grinding on. I think it's sort of a 0:15:07.600 --> 0:15:11.600 lot is very unsettled, and I think it's just as 0:15:11.680 --> 0:15:15.360 time goes on. It's been people have felt deeply unsettled 0:15:15.360 --> 0:15:17.880 for a long period of time. And I think it's 0:15:17.920 --> 0:15:20.400 even you know, seeping into the minds of people who 0:15:20.640 --> 0:15:24.080 probably would not be particularly concerned about their own financial picture, 0:15:24.560 --> 0:15:28.960 but it just makes everyone feel sort of vulnerable to change, 0:15:29.080 --> 0:15:30.800 to some sort of like worrying about some sort of 0:15:30.840 --> 0:15:34.040 like negative change. And so I think sort of that 0:15:34.080 --> 0:15:36.360 the maybe it's the lens at which people are viewing 0:15:36.440 --> 0:15:39.480 the world is just a bit darker now, and they're 0:15:39.480 --> 0:15:40.680 feeling more you. 0:15:40.600 --> 0:15:43.480 Know, protective and about the kids. 0:15:44.000 --> 0:15:47.640 Yes, worried about the opportunities. I mean, you know, you 0:15:47.720 --> 0:15:51.200 see AI taking a lot of taking a fair amount 0:15:51.280 --> 0:15:55.280 of you know, entry level jobs, and I think that 0:15:55.440 --> 0:15:59.280 is sort of a very leads to a very fundamental 0:15:59.440 --> 0:16:02.880 uneasy about what your kids' opportunities are going to be 0:16:03.040 --> 0:16:03.960 like going forward. 0:16:04.360 --> 0:16:08.320 Definitely right, But we do have we have one participant 0:16:08.360 --> 0:16:10.360 here who had a slightly different view on how to 0:16:10.400 --> 0:16:12.800 spend his million dollars. I think, you know, we'll be 0:16:12.840 --> 0:16:14.560 keener on him. We'll come to a million dollars in 0:16:14.600 --> 0:16:17.520 a minute. But this one is Nick Frillinghausen, co Chief 0:16:17.680 --> 0:16:21.320 Investment Officer of Equities at the Chiltern Trust, and he 0:16:21.360 --> 0:16:23.880 has a slightly different idea a game we're own property here, 0:16:24.160 --> 0:16:26.240 but kind of the opposite to luxury property. 0:16:26.320 --> 0:16:30.040 Right, yes, I mean his you're right, it's another real 0:16:30.120 --> 0:16:33.760 estate idea. And he says it's a patient idea. It's 0:16:33.800 --> 0:16:36.880 not an idea expects to take off immediately, but over 0:16:36.920 --> 0:16:39.520 the next three years. He thinks home repair and the 0:16:39.800 --> 0:16:44.720 home repair and remodeling space will be interesting. He has 0:16:45.200 --> 0:16:48.600 exposure to the leading companies in this area, the sort 0:16:48.640 --> 0:16:51.440 of what we call in the US the big category 0:16:51.480 --> 0:16:55.280 category killer companies, as well as in the paintent codings industry. 0:16:55.800 --> 0:16:59.240 And his feeling is that we've been in a housing 0:16:59.280 --> 0:17:02.440 of session for years with affordability at all time lows, 0:17:02.760 --> 0:17:05.000 and we probably have a shortage right now, like three 0:17:05.040 --> 0:17:08.400 to five to four million homes in this country. Existing 0:17:08.440 --> 0:17:11.800 home turnover is only about four million homes a year, 0:17:12.080 --> 0:17:14.439 which is a thirty year low. Typically it would be 0:17:14.480 --> 0:17:16.640 more like five million or six million, or a peak 0:17:16.680 --> 0:17:18.960 I think it was even seven million. You know, a 0:17:19.000 --> 0:17:21.080 lot of people are, as we know, locked into their 0:17:21.119 --> 0:17:23.760 homes because they have these low mortgage rates. But he 0:17:23.920 --> 0:17:27.399 thinks that if mortgage rates go about one hundred or 0:17:27.400 --> 0:17:30.159 one hundred and fifty basis points lower, that we're likely to 0:17:30.200 --> 0:17:32.960 see a big unlock in terms of pent up demand. 0:17:33.040 --> 0:17:35.440 Because every time, he says, you see the tenure treasury 0:17:35.760 --> 0:17:38.320 flirt with around four percent, you see an uptick in 0:17:38.400 --> 0:17:42.280 mortgage refinancings and first time home buyer applications. So he 0:17:42.359 --> 0:17:45.240 thinks these businesses are really good values and that when 0:17:45.240 --> 0:17:47.399 we've kind of cycles like this and we've seen mortgage 0:17:47.480 --> 0:17:51.360 rates fall, these companies have sort of a coiled spring 0:17:51.760 --> 0:17:54.120 kind of dynamic going on in terms of the margins 0:17:54.160 --> 0:17:56.960 they can earn. So these are you know, these are 0:17:57.000 --> 0:18:01.800 not like sexy companies, but they're companies that are embedded 0:18:01.800 --> 0:18:04.800 in our daily lives. You know, you paint your house, 0:18:05.119 --> 0:18:07.640 you know, you fix up your deck, you do all 0:18:07.640 --> 0:18:09.680 of these things. And he feels like a lot of 0:18:09.680 --> 0:18:12.600 people aren't focused on this area. He blames it mainly 0:18:12.640 --> 0:18:14.679 on because so many money is so much money is 0:18:14.680 --> 0:18:17.320 flowing into the same ten to twelve names, you know, 0:18:17.359 --> 0:18:19.520 tech names in the S and P. Five hundred. He 0:18:19.600 --> 0:18:23.560 thinks that if interest rates go lower, these stocks will 0:18:23.560 --> 0:18:26.120 do well, and also it'll lead to, as many people think, 0:18:26.280 --> 0:18:28.679 a broadening out of what actually works in the stock market. 0:18:29.119 --> 0:18:31.879 Did you mention any stock name produces on when he 0:18:31.920 --> 0:18:32.399 talked about this. 0:18:32.760 --> 0:18:35.920 He doesn't mention stock names just as a matter of policy. 0:18:35.960 --> 0:18:39.520 But I can speculate about what I would imagine they are. 0:18:40.160 --> 0:18:42.320 I mean, my guess would be when he talks about 0:18:42.480 --> 0:18:45.840 dominant companies and paints and coding, it makes me think 0:18:45.880 --> 0:18:48.800 of Sherwin Williams. That's a very big name here. And 0:18:48.800 --> 0:18:50.560 then when I think of the sort of what we 0:18:50.640 --> 0:18:54.480 call sort of category killer big home remodel of repair companies, 0:18:54.520 --> 0:18:57.360 I think of the likes of Home Depot and Lows. 0:18:57.960 --> 0:19:01.159 So those would be my essens, but they are not 0:19:01.520 --> 0:19:02.399 names that he gave me. 0:19:02.480 --> 0:19:05.520 Okay, interesting, right onwards. I don't know why you and 0:19:05.600 --> 0:19:08.680 I are going on holiday with Nick and his million dollars. 0:19:09.000 --> 0:19:12.560 Well, I really loved his idea. Well, I love the 0:19:12.600 --> 0:19:15.960 idea of giving money to kids. His idea again, he's 0:19:15.960 --> 0:19:20.280 really into experiences and he would take his family ten 0:19:20.320 --> 0:19:23.280 to twelve members of his family, particularly his parents who 0:19:23.280 --> 0:19:26.320 are in their mid eighties, on one of those around 0:19:26.320 --> 0:19:30.359 the world high end private jet journeys where you just 0:19:30.680 --> 0:19:33.560 jet around in your own private jet, and he would 0:19:33.600 --> 0:19:36.920 go to all these bucket list destinations that you would 0:19:37.000 --> 0:19:40.080 like to go to, but the tiquol a lifetime to achieve, 0:19:40.160 --> 0:19:42.800 you know. So he'd go to anchor Wat and Machu 0:19:42.880 --> 0:19:45.880 Pichu and Nepal and India, and he'd go to Uganda 0:19:45.920 --> 0:19:52.320 to see the mountain gorillas and to Japan, which anyway, 0:19:51.600 --> 0:19:54.160 I love this idea. 0:19:54.280 --> 0:19:59.280 Thirty to thirty five days, Nick, come on, yes, I mean, Matt, 0:19:59.320 --> 0:20:01.760 you Pitchiba. The time you finished queuing for tickets, you're 0:20:01.800 --> 0:20:02.560 two days. 0:20:02.280 --> 0:20:05.840 In Well, Marrion, you know, we only gave him a 0:20:05.920 --> 0:20:09.720 million bucks. So he actually priced this out and he 0:20:09.800 --> 0:20:12.720 figured it would take him about thirty to thirty five days, 0:20:13.440 --> 0:20:15.520 and he factored the number of people, so you know, 0:20:16.240 --> 0:20:18.679 he could only take thirty or thirty five days for 0:20:18.880 --> 0:20:21.000 only allowing him to splurt with a million bucks. 0:20:21.040 --> 0:20:22.640 I tell you what, thirty five days on a private 0:20:22.760 --> 0:20:24.840 jet with your family, maybe maybe it's enough. 0:20:25.440 --> 0:20:27.159 Oh that's a really good point, Maren. 0:20:27.240 --> 0:20:27.840 That's enough. 0:20:27.920 --> 0:20:29.960 I think I might pay to break up that. 0:20:31.640 --> 0:20:34.080 We will go for five days each. I think it 0:20:34.119 --> 0:20:37.080 would be absolutely wonderful. 0:20:37.680 --> 0:20:38.960 Oh, I love this idea. 0:20:39.240 --> 0:20:42.639 I entered in the jet a falcon. I go the 0:20:42.760 --> 0:20:49.520 do detail, detail, details, details, wonderful. Okay, so there you go, metals, healthcare, 0:20:49.960 --> 0:20:52.520 lots of property, give the money to your kids, and 0:20:52.680 --> 0:20:56.159 I gay self a private jet. And that's what you 0:20:56.200 --> 0:21:00.000 do with a million dollars these days. Then, thank you 0:21:00.200 --> 0:21:07.879 very much. Indeed, thanks Miren, thanks for listening to this 0:21:07.920 --> 0:21:10.600 week's Maren Talk to Your Money. If you like us show, rate, review, 0:21:10.640 --> 0:21:13.640