WEBVTT - Better Days Ahead? 0:00:00.520 --> 0:00:18.280 Hi, I'MBLDNA Higher Across Acid Reporter with Bloomberg and Armed 0:00:18.320 --> 0:00:22.279 Romaine Bostic, and this week on the show, well, investors 0:00:22.320 --> 0:00:25.000 have a lot of worries to deal with inflation, COVID, 0:00:25.120 --> 0:00:28.240 the war in Ukraine, China's lockdowns, and the fresh supply 0:00:28.360 --> 0:00:31.200 chain was all of that's igniting. The list goes on. 0:00:31.640 --> 0:00:34.400 Many Monday managers have by now reduced their expectations for 0:00:34.479 --> 0:00:37.599 soccer returns this year. But what affears over recession are 0:00:37.640 --> 0:00:39.720 overblown and the second half of the year turns out 0:00:39.760 --> 0:00:42.280 better than expected. We're going to get into all of 0:00:42.280 --> 0:00:45.640 that with a well known investment advisor. But first, Romaine, 0:00:45.760 --> 0:00:48.879 welcome to the show. Thanks so much for joining us 0:00:48.920 --> 0:00:51.800 this week. You're filling in from Mike, who's galvanting in 0:00:52.040 --> 0:00:55.640 California right now. I believe California. He's on vacation. He is, 0:00:55.680 --> 0:00:58.680 he's on vacation. Hopefully he's having having a lot of fun. 0:00:59.000 --> 0:01:01.200 But I'm wondering if I tell the listeners a secret 0:01:01.240 --> 0:01:04.920 about you. Wow, Okay, you're starting off strong. Yeah, yeah, 0:01:05.040 --> 0:01:09.080 just kicking kicking, kicking things off really really strongly. You 0:01:09.080 --> 0:01:12.399 You've been a Bloomberg for something like two decades, right 0:01:12.520 --> 0:01:15.800 not to aid you. Well, you've just aged me. Yes, 0:01:15.800 --> 0:01:19.399 and I have been here one years to be exact, 0:01:20.480 --> 0:01:23.520 last January. Yeah, it's a long time, but you know, 0:01:23.600 --> 0:01:25.640 I've had a great time here, and you know, you 0:01:25.640 --> 0:01:27.880 think about all those different market cycles that you cover, 0:01:27.959 --> 0:01:30.479 the economic cycles, not only in the twenty one years 0:01:30.480 --> 0:01:32.560 i've been here, but of course, uh in my career 0:01:32.680 --> 0:01:35.720 before I haven't got here. Yeah, you're a Bloomberg TV veteran. 0:01:35.840 --> 0:01:38.959 So we're really lucky to have you this week. Um, 0:01:38.959 --> 0:01:41.559 but I do I do want to introduce our our guest. 0:01:42.200 --> 0:01:45.760 We're joined by Sylvia Jablonski this week. She's the CEO, 0:01:46.120 --> 0:01:48.800 c I O and co founder of Defiance E t 0:01:49.040 --> 0:01:52.240 F S. Welcome to the show, Sylvia, I thank you 0:01:52.280 --> 0:01:54.040 so much for having me. Happy to be here today. 0:01:54.280 --> 0:01:56.280 It's great to have you. Maybe just to start out, 0:01:56.320 --> 0:01:59.160 you can sort of give us an overview of Defiance 0:01:59.160 --> 0:02:00.840 and what you guys are forcused on. I know you're 0:02:01.040 --> 0:02:03.640 heavily focused on thematics, but just give us a little 0:02:03.640 --> 0:02:06.960 bit back on on you and the company. Yeah, sure, 0:02:07.000 --> 0:02:11.400 i'd be happy to um. So, Defiance is a company 0:02:11.440 --> 0:02:15.760 that is focused on thematic ETF investing so we'd like 0:02:15.800 --> 0:02:18.200 to think of ourselves as an E t F firm 0:02:18.400 --> 0:02:21.960 and an investment company that provides access to some of 0:02:21.960 --> 0:02:27.399 the most disruptive and and you know, futuristic themes out there. UM. 0:02:27.800 --> 0:02:31.480 We have E t F s that that cover different 0:02:31.560 --> 0:02:37.200 topics like five G quantum computing, hydrogen psychedelics, UM, the 0:02:37.240 --> 0:02:40.280 reopen trade and f t s for example. So we're 0:02:40.320 --> 0:02:43.480 really focused on that next generation trader UM. You know, 0:02:43.520 --> 0:02:45.679 the trailings involve coming down fromt the baby boomers to 0:02:46.040 --> 0:02:49.600 sort of younger people who are interested in what is technology, 0:02:49.880 --> 0:02:54.160 se semiconductors, communication and and the things things like UM 0:02:54.280 --> 0:02:58.359 that for tomorrow will look like UM. So are our 0:02:58.880 --> 0:03:00.560 main goals to come out with part of their cost 0:03:00.639 --> 0:03:05.280 efficient and giving access to these different sectors. We're also 0:03:05.280 --> 0:03:08.560 heavily invested in digital assets and and very interested in 0:03:08.600 --> 0:03:11.400 building out in that space. My role at the company 0:03:11.639 --> 0:03:15.080 is CEO and c i O, so I do a 0:03:15.120 --> 0:03:18.960 lot of work in terms of providing research, investment ideas, 0:03:19.000 --> 0:03:23.320 investment strategies just generally on you know, the market different 0:03:23.360 --> 0:03:27.960 market insight, and then also UM working on the E 0:03:28.040 --> 0:03:30.360 t F side itself, still helping with things like product 0:03:30.400 --> 0:03:34.680 development and you know, managing, uh, the overall direction of 0:03:34.720 --> 0:03:37.560 the firm. Well, Sylvia, let's start off here and really 0:03:37.640 --> 0:03:39.120 kind of talk a little bit. I think about just 0:03:39.200 --> 0:03:41.440 kind of how the investment landscape has changed. I mean 0:03:41.720 --> 0:03:44.080 down of course, starts off by aging me out real quick. 0:03:44.120 --> 0:03:46.080 So I'll just kind of pick up where she left off. 0:03:46.200 --> 0:03:48.000 You know, when I, you know, first got out of 0:03:48.000 --> 0:03:51.040 college and I started investing, I literally walked into a 0:03:51.120 --> 0:03:53.920 t row Price office of physical office, and you know, 0:03:54.080 --> 0:03:55.840 got a mutual fund and I had you know, a 0:03:55.880 --> 0:03:59.840 certain percentage of my paycheck taken out every month that 0:04:00.080 --> 0:04:02.040 then I'll go into that fund. And it was a 0:04:02.080 --> 0:04:05.400 slow slog, but that was investing for the individual investor 0:04:05.520 --> 0:04:08.440 that was investing. And what we look at today is 0:04:08.520 --> 0:04:11.680 so much different now just the options that individual investors have, 0:04:12.280 --> 0:04:14.360 both in terms of the asset classes, but also the 0:04:14.360 --> 0:04:18.040 sophistication that you get now that you have access to 0:04:18.120 --> 0:04:20.760 now that you didn't necessarily get back then, and obviously 0:04:20.800 --> 0:04:22.760 that gives you the potential for a greater return. And 0:04:23.240 --> 0:04:25.720 I guess to build a nest egg in a more 0:04:25.800 --> 0:04:28.039 layered way and into a certain extent of faster way 0:04:28.200 --> 0:04:30.240 than you could in the past when people come to 0:04:30.279 --> 0:04:32.760 you and talk to you, and not just the individual investors, 0:04:32.760 --> 0:04:35.240 but even some of the institutions here. Are they cognizant 0:04:35.240 --> 0:04:38.680 of that? Are they cognizant of just how much has changed? Yeah? 0:04:38.720 --> 0:04:40.839 And and that's a great, great thought and a great question. 0:04:40.880 --> 0:04:42.880 And you know, I can probably age myself along with you, 0:04:42.880 --> 0:04:45.200 because that's about when I started in this industry too. 0:04:45.440 --> 0:04:48.359 And you know when I started UM. I started my 0:04:48.400 --> 0:04:51.640 career Deutsche Bank, working in baqued derivatives, and and you know, 0:04:51.720 --> 0:04:54.520 we're sort of um the younger folks, and the investment 0:04:54.560 --> 0:04:57.240 banking training program revised by the older folks to take 0:04:57.279 --> 0:05:00.200 a percentage of our UM income and put it into 0:05:00.200 --> 0:05:02.760 the SMP five hundred and the bank would match, which 0:05:02.920 --> 0:05:04.440 that never I don't know if that happens at Bloomberg, 0:05:04.440 --> 0:05:07.559 but that never happens anymore anywhere else. The bank would 0:05:07.560 --> 0:05:09.520 match it, and you just kind of leave it there. 0:05:09.560 --> 0:05:12.240 And and twenty years later, lo and behold, got a 0:05:12.240 --> 0:05:14.760 lot of money in there. Right. But UM, which is 0:05:14.800 --> 0:05:17.560 great and actually historically has worked really well. Right, we 0:05:17.600 --> 0:05:22.160 know that the SMP five hundred analyzed return is UM 0:05:22.279 --> 0:05:24.640 is about you know, twelve percenter, So so that's great. 0:05:24.680 --> 0:05:27.160 But in the last couple of years there have been 0:05:27.200 --> 0:05:30.440 all these awesome themes and and different you know sorts 0:05:30.440 --> 0:05:34.520 of movements and progressions in the market, particularly around UH 0:05:34.600 --> 0:05:39.680 technology and particularly around cryptocurrency in the blockchain, and you 0:05:39.680 --> 0:05:43.080 know a lot of these investments have really been high flyers. 0:05:43.080 --> 0:05:46.760 So for for young people, young traders that you know, 0:05:46.839 --> 0:05:50.120 have risk appetite, have sort of the income to let's say, 0:05:50.160 --> 0:05:52.640 take a chance because there's a lot of risk. You know, 0:05:52.680 --> 0:05:54.920 they have these great options in terms of what they 0:05:54.920 --> 0:05:58.039 can invest in, and and that varies from you know, 0:05:58.520 --> 0:06:01.560 bitcoin to the future of the metaverse to you web 0:06:01.600 --> 0:06:03.479 three point out to some of these concepts that don't 0:06:03.520 --> 0:06:07.080 exist yet. And you know, usually what happens with with 0:06:07.160 --> 0:06:09.839 that is it's really interesting because this is actually how 0:06:09.920 --> 0:06:12.240 how it went at at Defiance, right, we came out 0:06:12.279 --> 0:06:15.279 with the first five g e t F, and and 0:06:15.360 --> 0:06:17.960 this was you know, just just gobbled up by young 0:06:18.040 --> 0:06:21.920 retail investors, so that credit crowd, that um, that Robin 0:06:21.960 --> 0:06:23.960 Hood trader. You know, we could just tell by the 0:06:24.040 --> 0:06:26.560 size of the trades that these were not institutional players. 0:06:27.000 --> 0:06:28.960 And then you know, the e t F gets past 0:06:29.040 --> 0:06:31.040 that half a billion dollar mark and now all of 0:06:31.080 --> 0:06:33.240 a sudden, if you look at you know, you look 0:06:33.240 --> 0:06:35.479 on Bloomberg and you look at the top holders, they're 0:06:35.560 --> 0:06:38.640 they're now institutions, right, So I think what you know 0:06:38.680 --> 0:06:42.000 to your point, I think, you know, retail traders, um, 0:06:42.160 --> 0:06:45.400 young investors sort of figure out the trends before, before 0:06:45.440 --> 0:06:47.400 their trends, and then you know, when some of them 0:06:47.440 --> 0:06:50.200 really snowball and become bigger and see a lot of it, 0:06:50.279 --> 0:06:52.039 you I'm going into them. I think it piques the 0:06:52.080 --> 0:06:54.520 interest of advisors. You know, they then do their due 0:06:54.520 --> 0:06:57.120 diligence and they've got that five to tem percent sleeve 0:06:57.160 --> 0:07:01.440 of you know, sort of speculative raids or um, you know, 0:07:01.480 --> 0:07:04.119 disruptive technologies that they're willing to put money into and 0:07:04.120 --> 0:07:08.360 and and they allocate and sylvy just to keep it keep. 0:07:08.520 --> 0:07:10.800 Get get some more of your your thoughts on what's 0:07:10.800 --> 0:07:13.000 been going on with markets. I was reading this note 0:07:13.040 --> 0:07:15.320 earlier this week that said the SMP five hundred has 0:07:15.360 --> 0:07:18.920 cross above it's two hundred day moving average more than 0:07:18.960 --> 0:07:22.360 five times so far this year, a cross below it's 0:07:22.400 --> 0:07:25.280 six times so far this year. So, just how are 0:07:25.280 --> 0:07:28.120 you making sense of what's been going on with the 0:07:28.120 --> 0:07:31.040 market and how does it actually feel to be a 0:07:31.080 --> 0:07:34.559 part of this or to be invested right now? Uh? 0:07:34.640 --> 0:07:36.480 You know, I think if you ask the average investor, 0:07:36.560 --> 0:07:38.080 my my guess is that they would say it doesn't 0:07:38.120 --> 0:07:40.600 feel super good to be an investment in the market 0:07:40.680 --> 0:07:42.320 this year. It's not it's not as fun as it 0:07:42.360 --> 0:07:45.240 has been for the last decade, let's say, or you know, 0:07:45.360 --> 0:07:47.640 even even sort of like those those few months post 0:07:47.720 --> 0:07:50.800 COVID where everything you started going straight up and you know, 0:07:50.920 --> 0:07:52.920 are are all of our trading accounts look great? We 0:07:52.960 --> 0:07:55.720 all look like geniuses. And you know, now, I think 0:07:56.120 --> 0:07:59.560 the market just just has a lot of headwinds. There's 0:07:59.560 --> 0:08:02.200 a lot of uncertainty in the market right now. You have, 0:08:02.760 --> 0:08:05.240 you know, a FED that wants to raise rates for 0:08:05.320 --> 0:08:09.160 lower inflation, um and not creative recession. You know, hear 0:08:09.160 --> 0:08:12.720 about this like soft length landing. You know, inflation has 0:08:12.760 --> 0:08:17.000 been higher than ever. Um. You have issues with geopolitics. 0:08:17.040 --> 0:08:20.240 You you essentially have have all war Russia Ukraine situation. 0:08:20.720 --> 0:08:24.680 You have a strain on perhaps um you know, major commodities, 0:08:24.680 --> 0:08:28.040 oil gas, you know, and then sort of circling down 0:08:28.080 --> 0:08:30.680 depending on how how long this goes into we and 0:08:31.040 --> 0:08:35.720 different things, UM. And you know you have you have 0:08:36.280 --> 0:08:40.280 a lot of essentially fear that the combination of FED 0:08:40.360 --> 0:08:45.840 hikes and inflation will will create a situation where, um, 0:08:45.920 --> 0:08:48.280 you know, we're we're sort of in in stagculation or 0:08:48.320 --> 0:08:51.520 perhaps just don't have don't have great growth in the future. 0:08:51.600 --> 0:08:53.960 But you know, my take on this is, you know, 0:08:54.000 --> 0:08:58.280 so here we are, it makes sense. Um there there 0:08:58.320 --> 0:09:00.360 as we said, a lot of these headwinds to them market. 0:09:00.440 --> 0:09:02.800 But UM, what that means is that you're going to 0:09:02.800 --> 0:09:05.320 have this rangebound volatility. The market is going to trade, 0:09:05.480 --> 0:09:07.800 as you said, you know, in these levels, whether it's 0:09:07.800 --> 0:09:11.320 a sp other industries like NAZAC or sort of in 0:09:11.320 --> 0:09:13.800 a bear market. But what I think is that inflation, 0:09:13.920 --> 0:09:18.200 but geopolitics are likely at this point priced into the market. UM. 0:09:18.320 --> 0:09:21.680 And I think that consumer remains strong. I think that 0:09:22.120 --> 0:09:25.160 you know, historically, tightening monetary policy is followed by solid 0:09:25.280 --> 0:09:28.600 gains SMP rising at about nine percent or so. You know, 0:09:28.640 --> 0:09:33.080 companies have money, consumers are spending. Um, inflation is likely. 0:09:33.400 --> 0:09:35.600 So I actually think that we're going to have a 0:09:35.600 --> 0:09:38.520 pretty decent year. I just think that in the short 0:09:38.600 --> 0:09:48.320 term it's going to be um, not so fun. Everything 0:09:48.320 --> 0:09:51.400 you mentioned there, they seem like economic problems, and in 0:09:51.480 --> 0:09:54.840 the past, when we talk about market downturns, at least 0:09:54.960 --> 0:09:57.240 some of the bigger shocks to that market turned out 0:09:57.280 --> 0:10:00.800 to be more centered around the financial system. And I'm wondering, 0:10:00.840 --> 0:10:03.240 if you see any of the sort of economic weaknesses 0:10:03.280 --> 0:10:06.960 that everyone's pointing to today, whether that has any real 0:10:07.080 --> 0:10:10.480 material carry over into financial markets in the sense that 0:10:10.559 --> 0:10:13.840 it could cause some sort of destabilization in capital markets. 0:10:14.800 --> 0:10:16.920 You know, I think I think that if if a 0:10:16.920 --> 0:10:21.680 lot of the topics I just discussed were to go 0:10:21.720 --> 0:10:24.559 in a different place, For example, if the FED hikes 0:10:24.600 --> 0:10:27.800 you know, more aggressively, um and and sort of doesn't 0:10:28.400 --> 0:10:31.920 doesn't feel satisfied with with inflation falling, and you know, 0:10:32.320 --> 0:10:35.720 you start to see um kind of a harder landing 0:10:35.960 --> 0:10:38.360 than you know, I do think that some of that 0:10:38.360 --> 0:10:41.199 will start feeding into the market. Um. You know, banks 0:10:41.200 --> 0:10:43.000 are in good shape, so this isn't two thousand eight, 0:10:43.040 --> 0:10:46.080 right cutting some pretty good shape. The consumers in good shape. 0:10:46.120 --> 0:10:49.559 The depth servicing ratios are stronger than than they've been 0:10:49.559 --> 0:10:52.520 in decades, So you know, consumers essentially have these two 0:10:52.520 --> 0:10:55.280 shillion in savings. They have lower amounts of death than 0:10:55.280 --> 0:10:58.320 they've ever had before. Um, so I think that I 0:10:58.360 --> 0:11:01.640 think that the market can be more resilient this time. 0:11:02.160 --> 0:11:04.240 And I know famous last words, right, it's it's it's 0:11:04.320 --> 0:11:07.480 different this time. But well, it is different to a 0:11:07.520 --> 0:11:10.240 certain extent because when you look at the past cycles, 0:11:10.240 --> 0:11:13.040 say go back past a decade or two ago, you're 0:11:13.040 --> 0:11:16.600 talking about rates that were coming from a much different baseline. Here. 0:11:16.640 --> 0:11:20.520 I mean, to go from near zero to three. Let's 0:11:20.520 --> 0:11:23.959 assume that's the neutral rate here. I mean an economy 0:11:24.080 --> 0:11:27.240 or a capital market that can't withstand but three federal 0:11:27.280 --> 0:11:30.920 funds rate. Yeah, right, and then real rates are still 0:11:31.200 --> 0:11:36.160 you know, hovering, hovering, um, you know, negative levels. Right. 0:11:36.240 --> 0:11:38.960 So so that's another factor, like I just don't I 0:11:38.960 --> 0:11:41.400 think some of this is you know, some of this 0:11:41.480 --> 0:11:43.880 is an actual shaine on the market, right. But in 0:11:43.920 --> 0:11:45.959 the near term where we are today, I mean, this 0:11:46.040 --> 0:11:49.680 is very unlikely to highly impact some of the quality 0:11:49.760 --> 0:11:53.120 you know, megacap companies out there, like the Amazons, the Apples, 0:11:53.160 --> 0:11:56.120 like these companies that have pricing power, um, you know, 0:11:56.200 --> 0:11:59.280 against strong consumer, strong balance sheets, are doing buybacks and 0:11:59.320 --> 0:12:00.960 all that kind of thing. Like, I don't think it's 0:12:01.000 --> 0:12:03.200 going to impact those companies. A lot of the high 0:12:03.240 --> 0:12:07.440 growth names are you know, with high doubt levels will 0:12:07.480 --> 0:12:09.760 be impacted, but you know they're they're just always sort 0:12:09.800 --> 0:12:13.400 of in that position, right UM, where where they're volatile, 0:12:13.440 --> 0:12:15.640 and rate hikes kind of throw off the performance that 0:12:15.760 --> 0:12:19.160 But I think the broad based economy can withstand um, 0:12:19.800 --> 0:12:22.959 you know, what we're expecting anyway in terms of rate hikes. 0:12:23.840 --> 0:12:26.520 So then if if things are a little bit brighter 0:12:26.600 --> 0:12:28.199 in the second half of the year, or if we 0:12:28.720 --> 0:12:30.480 do have a sort of trade I think you call 0:12:30.520 --> 0:12:33.719 it a tradeable bottom. At this point, what are you recommending? What? 0:12:33.840 --> 0:12:35.480 What are you telling people when they ask you what 0:12:35.559 --> 0:12:38.600 they should be investing in? Yeah, so you know, it's 0:12:38.679 --> 0:12:41.720 it's important to sort of classify what type of trader 0:12:42.080 --> 0:12:44.880 you are too, right, So I think if you're looking for, 0:12:45.760 --> 0:12:49.760 you know, short term returns UM, I think that's trickier. 0:12:49.840 --> 0:12:51.920 You know, I think the machines and high frequency guys 0:12:51.920 --> 0:12:53.679 do a great job with that, but I think you know, 0:12:53.760 --> 0:12:57.640 the average investor that was doing well with UM, you know, 0:12:57.760 --> 0:12:59.679 kind of day trading over the past year, it becomes 0:12:59.720 --> 0:13:01.679 little are dangerous just because you do have so much 0:13:01.760 --> 0:13:04.240 range round volatility. You know, just look at the difference 0:13:04.280 --> 0:13:07.560 in in the NAZAC for example, UM, over the last 0:13:07.600 --> 0:13:11.160 couple of days and the performance there. But I think 0:13:11.320 --> 0:13:13.640 if you have, you know, an appetite to be a 0:13:13.679 --> 0:13:16.400 long term investor and to get really the deal of 0:13:17.040 --> 0:13:19.920 a century, I think, UM, you know, take a step 0:13:19.920 --> 0:13:23.319 back and look at names like Apple, Google, Microsoft Again, 0:13:23.360 --> 0:13:26.199 you've got negative real rates, companies with strong balance sheets, 0:13:26.240 --> 0:13:29.839 pricing power UM, consumers willing to spend money we tell, 0:13:30.200 --> 0:13:32.400 you know, we tell sales rising, and then just the 0:13:32.600 --> 0:13:37.880 theme of cyber security, cloud um, you know, metaverse, web 0:13:37.960 --> 0:13:41.439 three point oh, the future of all technology kind of 0:13:41.600 --> 0:13:43.839 hangs in the balance of these companies. So I just 0:13:44.160 --> 0:13:46.160 you know, and I think even the semi conductors like 0:13:46.240 --> 0:13:49.520 Niviti and m D they're just been absolutely crushed. UM. 0:13:49.800 --> 0:13:52.160 I just think that, you know, the longer term outlook 0:13:52.200 --> 0:13:55.320 for those names, it's going to be what buying Apple 0:13:55.480 --> 0:13:57.600 was ten years ago. You know, that's you're you're going 0:13:57.640 --> 0:14:01.640 to see those compounded returns. I also love the reopen trade. 0:14:01.720 --> 0:14:03.560 You know, we know that spending is going from goods 0:14:03.600 --> 0:14:06.839 to services UM, and it is increasing, but you know, 0:14:06.960 --> 0:14:10.240 lifting the mask mandates UM. You know this this post 0:14:10.320 --> 0:14:13.320 COVID getting out of the house. There I mean, there's 0:14:13.360 --> 0:14:16.000 just so much pent up demand to travel. You know, 0:14:16.160 --> 0:14:19.080 Delta earnings UM call was pretty awesome, Like March is 0:14:19.080 --> 0:14:21.440 the best year that they had ever in terms of 0:14:21.560 --> 0:14:28.000 like business bookings. That's a good trade. Hotels, cruises, you know, caristinos, airlines. 0:14:28.040 --> 0:14:29.400 I mean, that's a good place to look in the 0:14:29.480 --> 0:14:32.560 near term. Yeah, I think Mike Reagan would agree, considering 0:14:32.600 --> 0:14:34.880 that he just got on a flight out to California 0:14:34.920 --> 0:14:37.920 and Sylvia. I've done a lot of booking travel myself 0:14:38.000 --> 0:14:40.960 here for personal reasons over the last few months, though, 0:14:41.040 --> 0:14:43.760 But I do wonder are we in a situation, at 0:14:43.840 --> 0:14:46.040 least in the short term, where all of that pent 0:14:46.200 --> 0:14:48.880 up demand sort of overwhelmed supply. I mean, anyone who's 0:14:48.880 --> 0:14:51.960 tried to book a flight knows that prices are considerably 0:14:52.000 --> 0:14:53.720 higher than what you would have paid a couple of 0:14:53.800 --> 0:14:57.120 years ago. Even finding a ticket at all can be 0:14:57.240 --> 0:14:59.560 kind of difficult given some of the capacity constraints that 0:15:00.040 --> 0:15:01.960 some of these airlines that put themselves in. And you're 0:15:01.960 --> 0:15:05.280 seeing that with other services businesses as well, including a cruise, 0:15:05.320 --> 0:15:09.440 ships and some hotels and resorts. Yeah, and that's a 0:15:09.480 --> 0:15:11.000 great you know, that's a great point, and I think 0:15:11.080 --> 0:15:13.840 that that is actually one of the one of the 0:15:14.200 --> 0:15:17.360 major contributing factors to inflation. It's you know, sort of 0:15:18.320 --> 0:15:20.920 similar but also different to the supply chain issues with 0:15:21.000 --> 0:15:24.200 semiconductors and trying to buy a car and things like that. 0:15:24.400 --> 0:15:26.680 But you know, all of that is going to take 0:15:26.760 --> 0:15:29.040 time to to shake out, and it feels like we're 0:15:29.040 --> 0:15:30.600 in the peak of it. I mean, I agree with you. 0:15:30.760 --> 0:15:34.320 I I just booked myself some tickets to Greece and 0:15:34.720 --> 0:15:36.880 um to to go see some family there after a 0:15:36.920 --> 0:15:39.400 couple of years of not going because of COVID, and 0:15:40.000 --> 0:15:42.920 you know, the tickets just looking at them a week 0:15:43.000 --> 0:15:46.760 before you know, the sort of announcement of RuSHA versus Ukraine, 0:15:47.080 --> 0:15:49.680 to to looking at them two weeks after that started happening. 0:15:49.720 --> 0:15:52.560 I mean, the tickets just absolutely skyrocketed. So I felt 0:15:52.600 --> 0:15:55.560 that pain too. But I think that I think that 0:15:55.680 --> 0:15:59.320 airlines understand that they're going to have to go back 0:15:59.440 --> 0:16:03.680 to UM efficiency, and you know, the news we're getting 0:16:03.680 --> 0:16:05.200 from a lot of them is that it's been better 0:16:05.280 --> 0:16:08.000 in terms of hiring. You know, they're paying more UM, 0:16:08.200 --> 0:16:09.960 They're they're finally sort of like getting a lot of 0:16:10.000 --> 0:16:12.120 the positions filled and whatnot. So it takes some time 0:16:12.200 --> 0:16:14.400 to to you know, settle in with all of this. 0:16:14.560 --> 0:16:16.000 But again, I think we're sort of like at the 0:16:16.120 --> 0:16:19.840 peak of the worst of that romane. If if Mike 0:16:19.960 --> 0:16:23.400 has a hard time booking his return flight back from California, 0:16:23.960 --> 0:16:25.960 you are more than welcome to be the new co host. 0:16:28.320 --> 0:16:31.080 He can just stay there. Yeah, he can just stay there. 0:16:31.680 --> 0:16:36.360 But Sylvia, um, you mentioned the shift uh in spending 0:16:36.440 --> 0:16:38.680 from goods to services, which a lot of people have 0:16:38.800 --> 0:16:41.360 been anticipating for a while now, And actually I was 0:16:41.400 --> 0:16:45.320 reading another note earlier this week that said SMP companies 0:16:45.360 --> 0:16:48.840 are just much more geared towards goods than they are services. 0:16:49.200 --> 0:16:52.000 So as this shift unfolds, we can actually start to 0:16:52.040 --> 0:16:56.280 see small cap companies start to benefit more as people 0:16:56.360 --> 0:16:59.000 start spending more on services, just because there's many more 0:16:59.360 --> 0:17:02.920 restaurants and leisure hotel those types of stocks within the 0:17:03.000 --> 0:17:05.119 rust of two thousands. So I'm wondering if you've been 0:17:05.119 --> 0:17:07.880 thinking about that and whether or not that also makes 0:17:07.880 --> 0:17:11.160 sense to you. Yeah, I mean I think that that's 0:17:11.520 --> 0:17:15.320 you know, it's a very broad based indexed and you know, 0:17:15.520 --> 0:17:18.080 while some of these names are represented there, I would 0:17:18.160 --> 0:17:20.080 rather just go to the source with this one. You know, 0:17:20.119 --> 0:17:23.200 I'd rather just kind of trade the sector itself, like 0:17:23.240 --> 0:17:26.040 I'd look at airlines, I look at hotels. I'd look 0:17:26.040 --> 0:17:29.159 at you know, cruise ships, and and maybe even some 0:17:29.280 --> 0:17:33.160 single stock names like the entertainment types of names. Um, 0:17:33.840 --> 0:17:36.159 just because I think that you know, a lot of 0:17:36.520 --> 0:17:38.399 a lot of a lot of the names in the 0:17:38.440 --> 0:17:41.800 small cap index will will definitely have some growth struggles 0:17:41.800 --> 0:17:45.200 in terms of you know, increased wraith and and whatnot. 0:17:45.280 --> 0:17:47.359 I do think that they'll you know, have more of 0:17:47.400 --> 0:17:49.199 an issue and say some of the mega cap stocks 0:17:49.480 --> 0:17:53.159 I'm still in the mega stock camp versus small caps. Well, 0:17:53.240 --> 0:17:55.440 I am curious so too. I mean to Danna's point 0:17:55.480 --> 0:17:58.720 too about the idea of of how the market is structure, 0:17:58.800 --> 0:18:00.520 or at least how we think it's xt you're here, 0:18:00.680 --> 0:18:03.320 There's been a lot of talk here about I guess, 0:18:03.359 --> 0:18:06.280 how you do more fundamental analysis in a world where 0:18:06.320 --> 0:18:09.360 companies are more wedded to not just services, but even 0:18:09.400 --> 0:18:12.399 sort of intangible items. Here, you don't really value a 0:18:12.480 --> 0:18:15.640 company like an alphabet or even an Apple for that matter, 0:18:15.720 --> 0:18:18.600 which sells physical goods, but they don't necessarily have that 0:18:18.760 --> 0:18:21.879 physical footprint that you know, the old school companies that 0:18:22.280 --> 0:18:25.200 you know, we would know like a ge or a 0:18:25.320 --> 0:18:27.600 Boeing or something like that would have And I wonder 0:18:27.640 --> 0:18:29.560 how you have to shift your mindset when you're trying 0:18:29.640 --> 0:18:32.679 to create, uh some sort of model for what value 0:18:32.840 --> 0:18:36.159 really is these days. Yeah, that's a great point. And 0:18:36.200 --> 0:18:39.359 if you think about you know, sort of the the 0:18:39.680 --> 0:18:42.760 number one thing that you know, you learn finance in 0:18:42.840 --> 0:18:45.440 terms of like fundamental analysis, right, you have to understand 0:18:45.480 --> 0:18:47.840 the company, You have to understand what they're intending to 0:18:47.960 --> 0:18:50.919 invest in. Um, you know, what they're doing exactly, who 0:18:50.960 --> 0:18:53.200 their competitors are. And there are definitely some things in 0:18:53.280 --> 0:18:56.760 our world, like metaverse for example, that that most people 0:18:56.880 --> 0:19:01.200 just don't really understand, but replacing super high valuations on right. Um, 0:19:01.520 --> 0:19:04.440 So I think though that you know, the way I 0:19:04.520 --> 0:19:07.720 look at things is in terms of actual analysis, Like 0:19:07.880 --> 0:19:10.359 you continue to study the financial reports of the company, 0:19:10.440 --> 0:19:12.720 You check the debt, you check the cash on hand. 0:19:13.240 --> 0:19:17.240 You know, you sort of take a look and compare, 0:19:17.520 --> 0:19:20.639 you know, what each company is doing to his or 0:19:20.640 --> 0:19:24.399 her competitor. But my big focus is is and you know, 0:19:24.520 --> 0:19:27.159 this is sort of a uh maybe a symptom or 0:19:27.200 --> 0:19:30.760 a benefit of working for thematic um investment firm is 0:19:31.359 --> 0:19:33.399 where is the it's where is the puck going? What 0:19:33.480 --> 0:19:37.800 are the secular um technological trends of the future. You know, 0:19:37.920 --> 0:19:39.680 what are we trying to do while we're trying to 0:19:40.200 --> 0:19:43.320 you know, fight climate change. So then you know that 0:19:43.560 --> 0:19:45.440 that's gonna take a really long time. But if you 0:19:45.520 --> 0:19:48.840 think about what that opens up for, it could be hydrogen, 0:19:48.960 --> 0:19:51.119 it could be green metals, and then you know you 0:19:51.200 --> 0:19:53.840 can kind of do your your fundamental analysis on a 0:19:53.920 --> 0:19:55.639 lot of the companies in that space. You know, if 0:19:55.640 --> 0:20:00.080 I think about again, communication, UM, semiconductors, things like AD 0:20:00.200 --> 0:20:03.480 I mean with Navidia and and D. You know, are 0:20:03.720 --> 0:20:05.520 a lot of people argue that there are very high 0:20:05.560 --> 0:20:07.760 valuations and this is kind of you know, where they 0:20:07.760 --> 0:20:10.520 should be. And you know, I disagree. I think they're 0:20:10.600 --> 0:20:14.600 they're grossly undervalued because they're they're part of every single 0:20:15.119 --> 0:20:19.400 you know, future secular trend, whether it's electric vehicles, whether 0:20:19.480 --> 0:20:22.680 it's UM you know, powering your your your coffee maker, 0:20:23.000 --> 0:20:26.359 or or you know, missile targeting during a war or 0:20:27.160 --> 0:20:30.359 UM you know everything basically AI A, A g R, 0:20:30.680 --> 0:20:47.760 you know all that stuff. So you mentioned the metaverse. 0:20:47.960 --> 0:20:51.200 You take something like metaverse or augmented reality, and there's 0:20:51.240 --> 0:20:54.960 still a lot of questions as to what's the tangible 0:20:55.119 --> 0:20:57.159 use case for some of that stuff. Yeah, it may 0:20:57.200 --> 0:20:59.119 be fun to play, but is there sort of a 0:20:59.160 --> 0:21:02.119