1 00:00:13,600 --> 00:00:17,320 Speaker 1: Hello, and welcome to What Goes Up, a Bloomberg Weekly 2 00:00:17,400 --> 00:00:21,400 Speaker 1: Markets podcast. I'm Sarah Ponzac, a reporter on the Cross 3 00:00:21,400 --> 00:00:24,560 Speaker 1: Asset team, and I'm Mike Reagan, a senior editor on 4 00:00:24,600 --> 00:00:27,120 Speaker 1: the Market team. This week on the show, the bond 5 00:00:27,160 --> 00:00:30,920 Speaker 1: market is toying with the stock market. A rotation swept 6 00:00:31,000 --> 00:00:34,599 Speaker 1: equities this week as yields moved higher, turning recent winners 7 00:00:34,640 --> 00:00:38,800 Speaker 1: to losers and losers to winners, and trade and Brexit 8 00:00:38,880 --> 00:00:41,760 Speaker 1: continue to dominate headlines. We get the take of an 9 00:00:41,800 --> 00:00:45,280 Speaker 1: investor who was also a New York Times best seller, 10 00:00:45,800 --> 00:00:48,080 Speaker 1: and as always, will close out the episode with our 11 00:00:48,120 --> 00:00:51,200 Speaker 1: tradition the craziest thing I saw in markets this week? 12 00:00:51,680 --> 00:00:54,360 Speaker 1: And Sarah, as you mentioned, uh, one of our guests 13 00:00:54,480 --> 00:00:56,960 Speaker 1: is a New York Times best selling author. He's written 14 00:00:57,000 --> 00:01:00,280 Speaker 1: actually eleven books. I'm assuming you read all eleven apration. 15 00:01:00,440 --> 00:01:02,600 Speaker 1: Oh yeah, I read them within the past week. Really 16 00:01:02,920 --> 00:01:06,560 Speaker 1: really drilled down. I had to cramp at night. But 17 00:01:06,640 --> 00:01:09,200 Speaker 1: he's far from just an author. He's the executive chairman 18 00:01:09,280 --> 00:01:14,720 Speaker 1: and founder of Fisher Investments UM and he's really one 19 00:01:14,720 --> 00:01:18,920 Speaker 1: of the I think one of the most well respected authors, investors, 20 00:01:19,319 --> 00:01:22,440 Speaker 1: investment company founders around His name is Ken Fisher. Ken, 21 00:01:22,440 --> 00:01:24,560 Speaker 1: welcome to the show. Thanks for having me. It's great 22 00:01:24,600 --> 00:01:26,240 Speaker 1: to be with you. Yeah, and Ken, I've read a 23 00:01:26,280 --> 00:01:28,199 Speaker 1: lot of your writing. I gotta say, if this whole 24 00:01:28,240 --> 00:01:31,280 Speaker 1: billionaire investor thing falls through, I think we could get 25 00:01:31,319 --> 00:01:34,080 Speaker 1: your job as a stock market reporter on on Bloomberg 26 00:01:34,160 --> 00:01:39,440 Speaker 1: if I may need that. I'm always worried about the 27 00:01:39,480 --> 00:01:43,160 Speaker 1: future and don't get nervous. But if you do take 28 00:01:43,200 --> 00:01:46,240 Speaker 1: that job, your boss will be our other guests, Chris nag, 29 00:01:46,440 --> 00:01:49,320 Speaker 1: the executive editor of the SUX team here at Bloomberg. Yes, 30 00:01:49,400 --> 00:01:51,840 Speaker 1: I would. I would be bearing down on your copy 31 00:01:51,880 --> 00:01:54,280 Speaker 1: as I do and everyone else at this table. Maybe 32 00:01:54,520 --> 00:01:57,240 Speaker 1: we can get Ken started on like the Benelux. I 33 00:01:57,240 --> 00:01:59,360 Speaker 1: don't think that will work because my copy is unbearable. 34 00:02:00,920 --> 00:02:04,080 Speaker 1: You can fix anything. But before we get started, I 35 00:02:04,120 --> 00:02:05,960 Speaker 1: just want to remind you that we do have our 36 00:02:06,120 --> 00:02:09,600 Speaker 1: very own Bloomberg Podcast hotline. If you have any questions, 37 00:02:09,680 --> 00:02:12,239 Speaker 1: you have your own crazy things that you may want 38 00:02:12,240 --> 00:02:14,120 Speaker 1: to hear said on the show. You can give us 39 00:02:14,120 --> 00:02:16,280 Speaker 1: a call, leave us a message. That number is six 40 00:02:16,440 --> 00:02:20,520 Speaker 1: or six three two four three for nine zero, and 41 00:02:20,560 --> 00:02:23,160 Speaker 1: if you're lucky enough, we may even play your message 42 00:02:23,160 --> 00:02:25,920 Speaker 1: on the show. How lucky you would be. Imagine the 43 00:02:25,919 --> 00:02:28,480 Speaker 1: fame that would follow up. But Ken, I wanted to 44 00:02:28,520 --> 00:02:31,720 Speaker 1: start with a really interesting column you had recently in 45 00:02:32,120 --> 00:02:37,359 Speaker 1: USA today. The headline was watch out Investors, Statistics can 46 00:02:37,440 --> 00:02:41,000 Speaker 1: lie UM. And one of the things you talk about, 47 00:02:41,200 --> 00:02:43,280 Speaker 1: UM A lot of this comes from a book, Darryl 48 00:02:43,320 --> 00:02:47,639 Speaker 1: Huff's nineteen classic Out to Lie with Statistics. And one 49 00:02:47,639 --> 00:02:50,560 Speaker 1: thing you say is beware of stats from surveys. And 50 00:02:50,560 --> 00:02:53,000 Speaker 1: I just wanted to uh read off a quote from 51 00:02:53,040 --> 00:02:55,840 Speaker 1: the book that you quote in the calm no conclusion 52 00:02:55,919 --> 00:02:59,200 Speaker 1: that six percent of the American people are against something 53 00:02:59,240 --> 00:03:04,120 Speaker 1: should be read without the lingering question of which American people. 54 00:03:04,600 --> 00:03:07,040 Speaker 1: And I find this to be a real fascinating topic 55 00:03:07,200 --> 00:03:10,000 Speaker 1: at the moment because much of the market has been 56 00:03:10,040 --> 00:03:15,120 Speaker 1: focused on the I s M surveys of purchasing managers UM, 57 00:03:15,160 --> 00:03:18,520 Speaker 1: and I'm curious, you know, how do you sort of 58 00:03:19,320 --> 00:03:21,600 Speaker 1: go through the surveys and decide which one is worth 59 00:03:21,639 --> 00:03:25,440 Speaker 1: paying attention to and which one is uh you can 60 00:03:25,480 --> 00:03:27,200 Speaker 1: sort of ignore. I mean that the p M I 61 00:03:27,320 --> 00:03:30,280 Speaker 1: is clearly or something that moved markets that a lot 62 00:03:30,280 --> 00:03:32,360 Speaker 1: of people look at. Would they be an example of 63 00:03:32,480 --> 00:03:36,840 Speaker 1: a good one? To follow, yes, because if you look 64 00:03:36,880 --> 00:03:38,920 Speaker 1: at different p m I s on the same topic, 65 00:03:39,000 --> 00:03:43,280 Speaker 1: they don't show the same thing always. And secondarily, the 66 00:03:43,360 --> 00:03:47,120 Speaker 1: whole trend is aimed to be sort of misleading in 67 00:03:47,160 --> 00:03:51,840 Speaker 1: the first place, if you think about it. Um most 68 00:03:51,960 --> 00:03:54,920 Speaker 1: of the focus on those headlines for quite some time, 69 00:03:54,920 --> 00:03:57,480 Speaker 1: whether in America overseas, has been on the manufacturing p 70 00:03:57,640 --> 00:04:01,680 Speaker 1: m I s uh. In fact there it's in those 71 00:04:01,760 --> 00:04:04,880 Speaker 1: European countries where we've seen particular weakness, or in the 72 00:04:04,920 --> 00:04:07,280 Speaker 1: Land of the Free and the Home of the Brave. Uh. 73 00:04:07,560 --> 00:04:10,080 Speaker 1: Services are three times bigger, and people don't focus on 74 00:04:10,120 --> 00:04:12,160 Speaker 1: the services p m I so much. You've got to 75 00:04:12,160 --> 00:04:14,240 Speaker 1: be more of a serious student to pay attention to that. 76 00:04:14,280 --> 00:04:17,039 Speaker 1: It's the headline issues that grab all the YAK, and 77 00:04:17,920 --> 00:04:21,200 Speaker 1: services p m i's are fine. The bigger pulls the smaller. 78 00:04:21,240 --> 00:04:24,040 Speaker 1: The smaller doesn't pull the bigger, and yet the focus 79 00:04:24,120 --> 00:04:27,039 Speaker 1: is typically on the smaller and the dog that's biting 80 00:04:27,040 --> 00:04:29,159 Speaker 1: the man, rather than the man that's mastering the dog. 81 00:04:29,520 --> 00:04:33,880 Speaker 1: So in my mind, that is that. But you can 82 00:04:34,000 --> 00:04:39,800 Speaker 1: find so much more of that because surveys have to 83 00:04:40,000 --> 00:04:44,719 Speaker 1: presume from the beginning that they can determine representativeness. And 84 00:04:44,760 --> 00:04:47,839 Speaker 1: there's no actual evidence that the people that put surveys 85 00:04:47,880 --> 00:04:50,640 Speaker 1: together I've ever been able to do that. It's it's 86 00:04:50,680 --> 00:04:55,320 Speaker 1: it's the reason for example, that's surveys aren't used successfully 87 00:04:55,920 --> 00:04:59,600 Speaker 1: by consumer products companies to determine products to make. They 88 00:04:59,680 --> 00:05:03,679 Speaker 1: used to do that, nowadays they really don't. So these 89 00:05:03,920 --> 00:05:07,839 Speaker 1: recession concerns based on the manufacturing pmilies, I mean, I 90 00:05:07,839 --> 00:05:09,160 Speaker 1: get the sense a lot of people look at the 91 00:05:09,240 --> 00:05:11,839 Speaker 1: manufacturing p m I just because it has a longer 92 00:05:11,920 --> 00:05:15,640 Speaker 1: history of data. Right, Um, it doesn't sound like they 93 00:05:15,760 --> 00:05:19,680 Speaker 1: that alone is really causing you much concern, so to 94 00:05:19,680 --> 00:05:23,599 Speaker 1: speak about a recessionary signal. So I got a line 95 00:05:23,600 --> 00:05:27,880 Speaker 1: that I like, which is ABC meaning anybody can do it, 96 00:05:28,680 --> 00:05:32,680 Speaker 1: and anybody can and whenever there's something that anybody can, 97 00:05:33,440 --> 00:05:36,000 Speaker 1: markets have pre priced it. The fact of the matter is, 98 00:05:36,040 --> 00:05:40,680 Speaker 1: if you're relying on what anybody can, there's some companies 99 00:05:41,240 --> 00:05:43,920 Speaker 1: I don't Bloomberg or something I don't know, and they 100 00:05:43,960 --> 00:05:47,000 Speaker 1: got like terminals and and and people using to see 101 00:05:47,000 --> 00:05:50,320 Speaker 1: all all this stuff. And when you look at all 102 00:05:50,320 --> 00:05:55,680 Speaker 1: that stuff that anybody can do, markets pre priced that. Really. Now, 103 00:05:55,800 --> 00:05:58,720 Speaker 1: mind you, markets wiggle around in the short term and 104 00:05:58,800 --> 00:06:03,919 Speaker 1: volatility is normal, but it's easy to get the signal 105 00:06:03,960 --> 00:06:08,040 Speaker 1: from that volatility confused with what underlying trends are, and 106 00:06:08,120 --> 00:06:11,919 Speaker 1: people tend as I'm prone to want to say, uh 107 00:06:12,160 --> 00:06:14,080 Speaker 1: like the snake term or and the snake to be 108 00:06:14,160 --> 00:06:16,880 Speaker 1: focused on the snake wiggling around, when really what you 109 00:06:16,880 --> 00:06:18,520 Speaker 1: want to be doing is focusing on the crowd that's 110 00:06:18,520 --> 00:06:20,760 Speaker 1: watching the snake. I want to go back to something 111 00:06:20,800 --> 00:06:22,960 Speaker 1: you said earlier. You said it's typically the bigger that 112 00:06:23,000 --> 00:06:25,520 Speaker 1: pulls the small, and the small that pulls the larger. 113 00:06:25,600 --> 00:06:28,720 Speaker 1: And yes, manufacturing makes up about ten percent of the economy, 114 00:06:28,760 --> 00:06:31,200 Speaker 1: but there's been a lot of concerns lately that that 115 00:06:31,320 --> 00:06:35,039 Speaker 1: could seep over into the services sector and we could 116 00:06:35,040 --> 00:06:37,280 Speaker 1: potentially see a demise, which we have not seen yet. 117 00:06:37,440 --> 00:06:41,040 Speaker 1: Would you say that those concerns then are almost unfounded, Yes, 118 00:06:42,160 --> 00:06:45,520 Speaker 1: easy enough, they are in founded. So from here, I 119 00:06:45,520 --> 00:06:48,400 Speaker 1: mean bringing it back to everything going on with US 120 00:06:48,480 --> 00:06:52,120 Speaker 1: China trade, then that really becomes the issue that the 121 00:06:52,120 --> 00:06:55,159 Speaker 1: weakness you're seeing in the manufacturing sector will seep over. 122 00:06:55,560 --> 00:06:59,360 Speaker 1: Are you not concerned about second order effects? Then? As 123 00:06:59,400 --> 00:07:04,080 Speaker 1: it relates to herriffs, whether that be cut backs, business spending, investments, 124 00:07:04,160 --> 00:07:07,280 Speaker 1: or confidence. I kind of think of that a little differently. 125 00:07:07,320 --> 00:07:13,720 Speaker 1: First off, if you actually aggregate all announced tariffs from 126 00:07:13,760 --> 00:07:16,480 Speaker 1: the beginning of two thousand eighteen to present, and you 127 00:07:16,520 --> 00:07:20,520 Speaker 1: apply the maximum ter afright that anyone has talked about, 128 00:07:20,400 --> 00:07:27,200 Speaker 1: the kind of number, and you assume that there's no substitution, uh, 129 00:07:27,240 --> 00:07:33,640 Speaker 1: there's no reshipping, there's no ability to get around the tariffs, 130 00:07:33,720 --> 00:07:38,000 Speaker 1: and everybody's got to pay it. The totality of that 131 00:07:38,120 --> 00:07:40,920 Speaker 1: tax comes to four tenths of one percent of global GDP, 132 00:07:41,080 --> 00:07:43,520 Speaker 1: which is enough to slow down growth in the economy, 133 00:07:43,560 --> 00:07:45,960 Speaker 1: but not enough to turn a normal expansion or the 134 00:07:45,960 --> 00:07:50,120 Speaker 1: expansion that we have globally into recession. And so this 135 00:07:50,240 --> 00:07:54,720 Speaker 1: is a negative that again anybody can see, but the 136 00:07:54,760 --> 00:07:57,600 Speaker 1: fear of it's huge, in the reality of it actually 137 00:07:58,200 --> 00:08:00,120 Speaker 1: is not so much. Fear of a false factor is 138 00:08:00,160 --> 00:08:04,320 Speaker 1: always bullish, big fear of a little negative is also bullish. 139 00:08:04,400 --> 00:08:06,720 Speaker 1: And you know, but and of course the reverse of 140 00:08:06,760 --> 00:08:10,400 Speaker 1: both of those is also true. But in this instance, no, 141 00:08:10,840 --> 00:08:16,880 Speaker 1: I don't worry about that. It does impact manufacturing, but 142 00:08:17,000 --> 00:08:20,120 Speaker 1: it doesn't ripple beyond that much. One of the features 143 00:08:20,160 --> 00:08:27,080 Speaker 1: of the consumer, uh that's always misread is that the 144 00:08:27,120 --> 00:08:32,760 Speaker 1: consumer is just rigidly opposed to doing things like diet. 145 00:08:33,720 --> 00:08:35,440 Speaker 1: You know, if you think about it, everybody knows how 146 00:08:35,440 --> 00:08:38,800 Speaker 1: to lose weight and almost nobody can do it. That's legendary, 147 00:08:38,920 --> 00:08:42,480 Speaker 1: it's true. People know it's true. And and the consumer 148 00:08:42,559 --> 00:08:47,560 Speaker 1: keeps spending and personal consumption is a percentage of GDP 149 00:08:48,080 --> 00:08:50,560 Speaker 1: stays within a rigid four percent bandwidth no matter what 150 00:08:50,600 --> 00:08:55,199 Speaker 1: happens to GDP, and the consumer, which is predominantly on 151 00:08:55,240 --> 00:08:58,720 Speaker 1: the other side of the balance sheet, the services side, 152 00:08:59,040 --> 00:09:01,079 Speaker 1: it just really does not want to cut what they 153 00:09:01,080 --> 00:09:04,120 Speaker 1: buy and and and and there really is substitution, and 154 00:09:04,120 --> 00:09:07,160 Speaker 1: there really is reshipping. And the terrorists will never be 155 00:09:07,240 --> 00:09:11,360 Speaker 1: that big. But what's really big is a concern about uncertainty. 156 00:09:11,559 --> 00:09:16,320 Speaker 1: I mean, the reality that impacts all of us in 157 00:09:16,400 --> 00:09:19,600 Speaker 1: our daily lives is, well, if they change this rule, 158 00:09:19,720 --> 00:09:22,760 Speaker 1: what do I do about that? And that does impact CAPEX, 159 00:09:23,000 --> 00:09:26,000 Speaker 1: and that does impact corporations in their planning, and they're thinking. 160 00:09:26,040 --> 00:09:28,160 Speaker 1: And that's what you could see in Brixit, which is, 161 00:09:28,160 --> 00:09:29,880 Speaker 1: oh my gosh, what do we do about the changes 162 00:09:29,920 --> 00:09:32,480 Speaker 1: that might occur in in Britain? And do I do this? 163 00:09:32,559 --> 00:09:34,480 Speaker 1: Do I do that? What do I do? What don't 164 00:09:34,520 --> 00:09:38,600 Speaker 1: I do? Oh? My gosh. The fact is that uncertainty 165 00:09:38,760 --> 00:09:42,160 Speaker 1: does slow things down. You mentioned BREGSIT. I know that 166 00:09:42,360 --> 00:09:44,760 Speaker 1: the way that you assess the situation and you think 167 00:09:44,800 --> 00:09:47,520 Speaker 1: about the outcome is that this is really an uncertainty 168 00:09:47,600 --> 00:09:50,720 Speaker 1: hanging over the market, and no matter what happens, we 169 00:09:50,760 --> 00:09:52,800 Speaker 1: could potentially see a relief rally once we know what's 170 00:09:52,840 --> 00:09:55,160 Speaker 1: going to happen. Now, I know for a lot of people, 171 00:09:55,200 --> 00:09:57,360 Speaker 1: they think about it very simplistically and they just think 172 00:09:57,520 --> 00:10:00,480 Speaker 1: no deal bregsit equals bad for markets. So how can 173 00:10:00,480 --> 00:10:03,480 Speaker 1: it be that, no matter the outcome, this could be 174 00:10:04,360 --> 00:10:06,440 Speaker 1: just an overhang that is lifted and then you see 175 00:10:06,440 --> 00:10:09,360 Speaker 1: markets go on from here and get over it. Well, 176 00:10:09,480 --> 00:10:12,480 Speaker 1: I just give you an analogy, and of course, as 177 00:10:12,480 --> 00:10:16,640 Speaker 1: Milton Friedman always said, all analogies are flawed. But do 178 00:10:16,720 --> 00:10:18,840 Speaker 1: you remember when everybody thought that the market would go 179 00:10:18,880 --> 00:10:22,720 Speaker 1: down to Donald J. Trump was elected president and literally 180 00:10:22,800 --> 00:10:26,480 Speaker 1: within twenty four hours. Uh. The fact is that fear 181 00:10:26,520 --> 00:10:30,920 Speaker 1: is pre priced, and markets pre price really, really, really well, 182 00:10:31,600 --> 00:10:36,600 Speaker 1: and not perfectly. Market life isn't perfect, but markets pre 183 00:10:36,720 --> 00:10:42,240 Speaker 1: priced pretty well. There's We've done some surveys that showed 184 00:10:42,240 --> 00:10:44,880 Speaker 1: that the only people that aren't pretty aware of what's 185 00:10:44,880 --> 00:10:47,480 Speaker 1: going on with brixitter in the Upper Amazon basin rapidly 186 00:10:47,520 --> 00:10:52,080 Speaker 1: fleeing humanity and otherwise. People have been focused on Dodd 187 00:10:52,400 --> 00:10:56,400 Speaker 1: no deal brexit issue for a long time. You know, 188 00:10:56,440 --> 00:10:58,640 Speaker 1: if you think of big companies that do lots of 189 00:10:58,679 --> 00:11:01,600 Speaker 1: global trade, had plenty time to put on belts and suspenders. 190 00:11:02,080 --> 00:11:03,959 Speaker 1: They may look funny with the belts and suspenders, but 191 00:11:04,080 --> 00:11:06,360 Speaker 1: have plenty of time to put them on. I haven't 192 00:11:06,360 --> 00:11:08,319 Speaker 1: seen suspenders in a while. I go off to what 193 00:11:08,480 --> 00:11:11,480 Speaker 1: they bring them back. You know, the people always wear 194 00:11:11,480 --> 00:11:14,120 Speaker 1: the suspenders like it's a style statement. I never really 195 00:11:14,160 --> 00:11:16,120 Speaker 1: got that because I'm not a stylish guy. You know. 196 00:11:16,120 --> 00:11:17,640 Speaker 1: I got a lot of class, and all of it's 197 00:11:17,679 --> 00:11:20,920 Speaker 1: low and and and and and you know, I got 198 00:11:20,960 --> 00:11:23,640 Speaker 1: a lot of taste, and all of it's bad. I 199 00:11:23,720 --> 00:11:26,240 Speaker 1: really got how you wear those suspenders and them look good? 200 00:11:26,280 --> 00:11:28,520 Speaker 1: Have you? Have you ever worn them? I have not. 201 00:11:28,640 --> 00:11:31,480 Speaker 1: My dad were them towards the end of his life, 202 00:11:31,600 --> 00:11:34,480 Speaker 1: but that's because he had a giant Irish beer belly, 203 00:11:34,520 --> 00:11:36,079 Speaker 1: and I think he just had a hard time to 204 00:11:36,160 --> 00:11:39,320 Speaker 1: keep his spants up. It wasn't wasn't a stylish so 205 00:11:39,679 --> 00:11:42,640 Speaker 1: I wore him once in a rental tuxedo, and it 206 00:11:42,679 --> 00:11:45,840 Speaker 1: was a little bit annoying because they weren't that easy 207 00:11:45,880 --> 00:11:48,280 Speaker 1: to put on. I guess if you're used to it, 208 00:11:48,320 --> 00:11:49,959 Speaker 1: maybe it's okay, like a lot of other things, but 209 00:11:50,040 --> 00:11:52,760 Speaker 1: general often, you know, I live in rural southwest Washington, 210 00:11:52,840 --> 00:11:54,560 Speaker 1: and you know, I'm still trying to learn how to 211 00:11:54,559 --> 00:11:57,760 Speaker 1: wear shoes. And I mean, I can do it, but 212 00:11:57,840 --> 00:12:00,760 Speaker 1: it's it's rugged and and so you know, that's the 213 00:12:00,920 --> 00:12:03,200 Speaker 1: the suspenders thing. That's pretty true. It's confusing to me. 214 00:12:03,280 --> 00:12:06,240 Speaker 1: I'd like to say this for the fashion podcast we're 215 00:12:06,240 --> 00:12:08,560 Speaker 1: doing separately, Chris, Let's let's bring you into this. You know, 216 00:12:08,679 --> 00:12:12,240 Speaker 1: as Ken said, markets are very good at pricing new 217 00:12:12,280 --> 00:12:16,439 Speaker 1: information very quickly. Boy did they do that this week, right, 218 00:12:16,559 --> 00:12:21,360 Speaker 1: This rotation out of growth and momentum stocks sort of 219 00:12:21,360 --> 00:12:24,200 Speaker 1: the the high flying, you know, sexy stocks that have 220 00:12:24,280 --> 00:12:26,960 Speaker 1: left the market back into bore and old value that 221 00:12:27,000 --> 00:12:29,080 Speaker 1: had sort of been left left to dead. What what's 222 00:12:29,080 --> 00:12:31,800 Speaker 1: your perspective on what happened this week? Well, first of all, 223 00:12:31,800 --> 00:12:34,000 Speaker 1: they're not they're high flying, but they're not sexy. We 224 00:12:34,000 --> 00:12:35,840 Speaker 1: should make that that clear. That one of the things 225 00:12:35,880 --> 00:12:38,280 Speaker 1: going on is that the momentum getting killed, right, now 226 00:12:38,280 --> 00:12:42,000 Speaker 1: are things like reats and um utilities, and that's sort 227 00:12:42,040 --> 00:12:44,120 Speaker 1: of one of the funny ripples of the market. It's 228 00:12:44,200 --> 00:12:47,240 Speaker 1: that these defensive hedge funds loved and they got a 229 00:12:47,440 --> 00:12:51,000 Speaker 1: bit up because of their their ties to the bond market. 230 00:12:51,080 --> 00:12:53,960 Speaker 1: Rally just got crushed. And I mean, as far as 231 00:12:53,960 --> 00:12:57,320 Speaker 1: your question goes, this is an instance. I mean, these 232 00:12:57,320 --> 00:13:00,120 Speaker 1: are historical moves. Started to the story this week showing 233 00:13:00,400 --> 00:13:04,600 Speaker 1: that UM, the moves in things like in the factors 234 00:13:04,679 --> 00:13:07,560 Speaker 1: is what they're called the themes that you're mentioning the 235 00:13:07,600 --> 00:13:11,120 Speaker 1: fastest in a decade or two decades. So one thing 236 00:13:11,160 --> 00:13:14,400 Speaker 1: you have to say, the market did price this stuff 237 00:13:14,480 --> 00:13:17,439 Speaker 1: very quickly. I would argue that generally the market prices 238 00:13:17,480 --> 00:13:20,080 Speaker 1: stuff in before it happens most of the time. And 239 00:13:20,080 --> 00:13:24,000 Speaker 1: this is an instance of I think large population of 240 00:13:24,000 --> 00:13:27,480 Speaker 1: investors being taken by surprise by the fact that bond 241 00:13:27,559 --> 00:13:30,160 Speaker 1: yields could go up again. That's really what happened. They 242 00:13:30,200 --> 00:13:32,240 Speaker 1: saw that. And if you can really trace pretty much 243 00:13:32,240 --> 00:13:35,840 Speaker 1: every move that's happened in some way to its relationship 244 00:13:35,920 --> 00:13:38,400 Speaker 1: to the signal from the bond market, and that in 245 00:13:38,440 --> 00:13:40,760 Speaker 1: some ways goes back to that strong service h I 246 00:13:40,920 --> 00:13:42,760 Speaker 1: s M that we saw last week, I imagine to 247 00:13:42,840 --> 00:13:46,400 Speaker 1: some degree, uh you know, this rethinking of the globe 248 00:13:46,440 --> 00:13:49,240 Speaker 1: of the recession risk going forward. So let me take 249 00:13:49,280 --> 00:13:52,120 Speaker 1: that different direction. You just go back year after year 250 00:13:52,160 --> 00:13:58,120 Speaker 1: after year, and you look at surveys of people's views 251 00:13:58,200 --> 00:14:01,480 Speaker 1: on bonds. Every or people have expected long rates to 252 00:14:01,520 --> 00:14:03,800 Speaker 1: go up. Every year, people expect to long rates go up, 253 00:14:03,800 --> 00:14:08,160 Speaker 1: and they've always been wrong. And this time, for the 254 00:14:08,200 --> 00:14:10,679 Speaker 1: first time I've seen in a long time, people started 255 00:14:10,720 --> 00:14:14,160 Speaker 1: expecting long rates to go down after they've gone down, 256 00:14:14,760 --> 00:14:20,160 Speaker 1: and they're changing that bondable market right as you get 257 00:14:20,200 --> 00:14:24,000 Speaker 1: the long rate backing up and and that reality. I mean, 258 00:14:24,080 --> 00:14:28,560 Speaker 1: I am unused to seeing a consensus for falling long rates, 259 00:14:28,800 --> 00:14:33,560 Speaker 1: especially when they are one and a half exactly, so 260 00:14:33,600 --> 00:14:36,200 Speaker 1: I'm not used to seeing that consensus. And then and then, 261 00:14:36,240 --> 00:14:38,440 Speaker 1: of course, what what does the consensus do? It smacked 262 00:14:38,480 --> 00:14:41,360 Speaker 1: in the phase, so you know, they got smacked, the 263 00:14:41,360 --> 00:14:43,840 Speaker 1: the the The other parallel to what you said, however, 264 00:14:44,600 --> 00:14:47,040 Speaker 1: that I don't think people think about, but it's perfectly 265 00:14:47,080 --> 00:14:51,240 Speaker 1: obvious through a Bloomberg terminal, is that in that same 266 00:14:51,320 --> 00:14:57,440 Speaker 1: period you can see this process that's the non US 267 00:14:57,520 --> 00:15:00,960 Speaker 1: stock market leading the U S stock market that in 268 00:15:01,080 --> 00:15:05,320 Speaker 1: parallel to that shift that you discussed a value, you've 269 00:15:05,360 --> 00:15:09,320 Speaker 1: also got this shift to where the not everyone, but 270 00:15:09,480 --> 00:15:12,600 Speaker 1: most of the continental European markets as well as the 271 00:15:12,640 --> 00:15:16,640 Speaker 1: emerging markets have been leading the US market upwards. I know, 272 00:15:16,720 --> 00:15:20,840 Speaker 1: one of the valuation metrics that you sort of are 273 00:15:20,880 --> 00:15:25,160 Speaker 1: considered a pioneer in his price to sales right um. 274 00:15:25,200 --> 00:15:27,280 Speaker 1: And you know you look at the SMP right now, 275 00:15:27,320 --> 00:15:29,680 Speaker 1: I mean you look at the beginning of two thousand 276 00:15:29,680 --> 00:15:31,600 Speaker 1: and eighteen. It's interesting how we had that sort of 277 00:15:31,640 --> 00:15:35,960 Speaker 1: melt up higher January of last year and it almost 278 00:15:35,960 --> 00:15:40,640 Speaker 1: turned around right on the dime, where uh, the price 279 00:15:40,640 --> 00:15:43,760 Speaker 1: to sales exceeded that of even the dot com era 280 00:15:43,920 --> 00:15:45,760 Speaker 1: at about I think it's like two point four or 281 00:15:45,760 --> 00:15:48,520 Speaker 1: something like that. We're still at about two point to 282 00:15:48,720 --> 00:15:53,240 Speaker 1: two point three price to sales. Um. I'm curious how 283 00:15:53,440 --> 00:15:55,720 Speaker 1: you look at that metric now because I know you've 284 00:15:55,760 --> 00:15:57,880 Speaker 1: sort of had a rethink on it on on the 285 00:15:57,960 --> 00:16:00,960 Speaker 1: on the sort of importance of price to sale. Um, 286 00:16:01,280 --> 00:16:04,040 Speaker 1: is it looking frothy right now in the US at 287 00:16:04,080 --> 00:16:06,960 Speaker 1: this sort of ratio. So when I was first doing 288 00:16:07,000 --> 00:16:11,280 Speaker 1: price sales ratio in the nineteen seventies, just a little 289 00:16:11,280 --> 00:16:14,680 Speaker 1: short time ago. Sometimes it feels that way actually, and 290 00:16:14,720 --> 00:16:17,800 Speaker 1: sometimes it feels like forever, but it was a very 291 00:16:17,960 --> 00:16:22,480 Speaker 1: different world. So, for example, I remember paying Goldman Sacks 292 00:16:22,640 --> 00:16:25,720 Speaker 1: dollars to run a computer screen of price sales ratios 293 00:16:25,760 --> 00:16:27,600 Speaker 1: on the New York Stock extames for me. I just 294 00:16:27,640 --> 00:16:31,360 Speaker 1: want you to get that because in those days data 295 00:16:31,520 --> 00:16:37,400 Speaker 1: was scarce. Today data is plentiful. And where data is plentiful, 296 00:16:37,760 --> 00:16:40,280 Speaker 1: the only way you actually can take advantage of it 297 00:16:40,320 --> 00:16:43,120 Speaker 1: in the marketplace is if you've got an ability to 298 00:16:43,200 --> 00:16:46,880 Speaker 1: perceive something that no one else perceives, which is very rare. 299 00:16:47,040 --> 00:16:51,120 Speaker 1: It's tricky, it's hard to do. So you have to 300 00:16:51,160 --> 00:16:56,520 Speaker 1: get some sort of causal relationship that isn't obvious to people, 301 00:16:56,560 --> 00:16:59,840 Speaker 1: and when you say it to people, they laugh at you, uh, 302 00:17:00,080 --> 00:17:04,239 Speaker 1: won't even consider it. Uh. That's again not easy to do. 303 00:17:04,440 --> 00:17:08,040 Speaker 1: So I don't think price sales helps you with timing 304 00:17:08,080 --> 00:17:11,480 Speaker 1: these days. But what it does is that when value 305 00:17:11,480 --> 00:17:14,719 Speaker 1: does better than growth, price sales tends to be a 306 00:17:14,720 --> 00:17:19,200 Speaker 1: more extreme measure of value. Also, when value does worst 307 00:17:19,240 --> 00:17:21,480 Speaker 1: in growth, it tends to be a more extreme measure 308 00:17:21,480 --> 00:17:24,879 Speaker 1: of value. But the January bounce back I think was 309 00:17:24,920 --> 00:17:29,119 Speaker 1: based off of other things, and uh, you know you 310 00:17:29,119 --> 00:17:31,400 Speaker 1: could look at price sales and see it that way, 311 00:17:31,520 --> 00:17:33,119 Speaker 1: but you could look at the SNP and you can 312 00:17:33,160 --> 00:17:36,679 Speaker 1: see the dividendio being above the tenure bond rate, and 313 00:17:36,760 --> 00:17:39,320 Speaker 1: you know, see it a different way. All that stuff 314 00:17:39,320 --> 00:17:56,960 Speaker 1: that anybody can see. Because I want to come to you. 315 00:17:57,000 --> 00:18:00,760 Speaker 1: I mean we mentioned the valuation case as we stand here. Yes, 316 00:18:01,160 --> 00:18:03,800 Speaker 1: your time frame of what you look at for stocks 317 00:18:03,920 --> 00:18:06,560 Speaker 1: very much depends on the return to get your to 318 00:18:06,640 --> 00:18:09,560 Speaker 1: date really strong returns one year not so much. I 319 00:18:09,560 --> 00:18:12,600 Speaker 1: mean where we stand now, what would you say are 320 00:18:12,960 --> 00:18:16,040 Speaker 1: the bowl cases and the bear case for stocks at 321 00:18:16,040 --> 00:18:18,800 Speaker 1: the current moment? Yeah, I mean the bowl cases is 322 00:18:18,920 --> 00:18:21,960 Speaker 1: probably something like a revival of earnings next year. That's 323 00:18:21,960 --> 00:18:24,760 Speaker 1: not impossible. There's some charge that can make the case 324 00:18:24,840 --> 00:18:27,480 Speaker 1: that earnings growth over the last ten years is a 325 00:18:27,480 --> 00:18:30,800 Speaker 1: little is a little blow par And as much as 326 00:18:30,960 --> 00:18:33,920 Speaker 1: people love to throw mud at next year's earnings estimates, 327 00:18:33,960 --> 00:18:36,960 Speaker 1: that's definitely the big bear case to throwing mud at them. 328 00:18:37,000 --> 00:18:39,199 Speaker 1: It's not something possible. You get you get back to 329 00:18:39,240 --> 00:18:43,040 Speaker 1: the ten percent growth that generally bespeaks a healthy stock market. 330 00:18:43,800 --> 00:18:46,320 Speaker 1: It obviously helps it. The FED appears to now be 331 00:18:47,320 --> 00:18:50,280 Speaker 1: more or less the stock markets plaything or the stock 332 00:18:50,320 --> 00:18:52,920 Speaker 1: and bond markets play thing, which increasingly is the same thing. 333 00:18:53,440 --> 00:18:56,920 Speaker 1: So that's a fair way a fairly sturdy bowl case. 334 00:18:57,000 --> 00:19:02,439 Speaker 1: Once have stocks usually go up to um bearcase, I 335 00:19:02,480 --> 00:19:06,080 Speaker 1: think you have to say. I mean, it's no surprise. 336 00:19:06,119 --> 00:19:07,880 Speaker 1: There are a lot of people walking around saying that 337 00:19:08,119 --> 00:19:13,280 Speaker 1: Trump is gonna trade wars into a recession. Um, there's 338 00:19:13,280 --> 00:19:15,840 Speaker 1: just the fact of the length of the recovery, I 339 00:19:16,119 --> 00:19:19,000 Speaker 1: hate to say, just has to start striking you as 340 00:19:19,000 --> 00:19:23,439 Speaker 1: a little bit improbable around now you have a presidential 341 00:19:23,440 --> 00:19:25,640 Speaker 1: election coming up, when god knows what, we'll go out 342 00:19:25,640 --> 00:19:30,240 Speaker 1: over Twitter there's there's take your pick it can So 343 00:19:30,600 --> 00:19:35,040 Speaker 1: Fisher Investments is primarily a fee based advisory firm, correct. 344 00:19:36,520 --> 00:19:41,960 Speaker 1: I think primarily is a necessarily right. But I'm just 345 00:19:42,040 --> 00:19:45,320 Speaker 1: curious after a week like this, after a year like this, 346 00:19:45,480 --> 00:19:47,439 Speaker 1: I feel like the phones must be ringing off the 347 00:19:47,480 --> 00:19:51,720 Speaker 1: hook at your firm. Is that true? And if you 348 00:19:51,760 --> 00:19:54,160 Speaker 1: were the one answering the call, I'm just curious what 349 00:19:54,160 --> 00:19:56,920 Speaker 1: what you would be telling your clients these days. When 350 00:19:56,920 --> 00:20:02,240 Speaker 1: you're in the advice business, the best advice is the 351 00:20:02,280 --> 00:20:06,359 Speaker 1: pre advice so that they don't get too agitated. That's 352 00:20:06,400 --> 00:20:10,200 Speaker 1: the best advice. The best advice is education and preparation. 353 00:20:10,880 --> 00:20:14,280 Speaker 1: And so this year people are pretty calm. This is 354 00:20:14,280 --> 00:20:16,560 Speaker 1: not a bad year. Why, Mike, Why the hell would 355 00:20:16,560 --> 00:20:18,480 Speaker 1: the phone be running off the hook this week? I mean, 356 00:20:18,520 --> 00:20:21,840 Speaker 1: we're so, we're so yeah, we're so deep in the 357 00:20:21,880 --> 00:20:24,720 Speaker 1: market and realizing that there's this big quantine storm going 358 00:20:24,760 --> 00:20:27,640 Speaker 1: on right now. Markets aren't that voltable right there, right now. 359 00:20:27,760 --> 00:20:30,600 Speaker 1: The last three days have been sarcastically calm at the 360 00:20:30,680 --> 00:20:34,199 Speaker 1: at the surface. Well, if you're if you're loaded up 361 00:20:34,240 --> 00:20:37,520 Speaker 1: on momentum and gross stocks, I'd be calling Ken. I'd 362 00:20:37,560 --> 00:20:41,119 Speaker 1: be calling Ken's. I don't think phone, I don't. So First, 363 00:20:42,000 --> 00:20:45,800 Speaker 1: just my bias, which I've had in my whole life, 364 00:20:46,480 --> 00:20:51,120 Speaker 1: is that I've always known that I'm in a realm 365 00:20:51,240 --> 00:20:53,960 Speaker 1: where if you could be right seventy percent of the time, 366 00:20:54,119 --> 00:20:56,800 Speaker 1: in the long term, you'd become a living legend. So 367 00:20:56,880 --> 00:20:58,320 Speaker 1: that means you're better be used to be in wrong 368 00:20:58,480 --> 00:21:01,040 Speaker 1: at least thirty percent of the time because you're gonna be, 369 00:21:01,560 --> 00:21:03,960 Speaker 1: and you better plan your life so you can do 370 00:21:04,000 --> 00:21:05,760 Speaker 1: that and be comfortable. It's kind of like being a 371 00:21:05,840 --> 00:21:08,360 Speaker 1: boxer at one level. If you if you're a boxer 372 00:21:08,680 --> 00:21:10,280 Speaker 1: and you plan to never get hit, you're in the 373 00:21:10,320 --> 00:21:12,520 Speaker 1: wrong game because you've got to be able to take 374 00:21:12,560 --> 00:21:16,640 Speaker 1: a punch. And so you never want to have portfolios 375 00:21:16,720 --> 00:21:20,720 Speaker 1: extreme enough that when a little wiggle happens, people pull 376 00:21:20,800 --> 00:21:23,840 Speaker 1: their hair out. Everything that I ever do, I'm trying 377 00:21:23,880 --> 00:21:26,480 Speaker 1: to do so that I've got to counterbet and a 378 00:21:26,560 --> 00:21:29,800 Speaker 1: classic Marko with sense. You know, in terms of mean 379 00:21:29,880 --> 00:21:32,960 Speaker 1: variance optimization, you're supposed to build a portfolio that way 380 00:21:32,960 --> 00:21:35,679 Speaker 1: in the first place. That's what you're supposed to do. 381 00:21:35,920 --> 00:21:38,560 Speaker 1: One more thing before we get to the crazy craziest 382 00:21:38,560 --> 00:21:41,119 Speaker 1: thing in the week, And you could argue that maybe 383 00:21:41,200 --> 00:21:44,320 Speaker 1: President Trump calling the FED a bunch of bone heads, 384 00:21:44,119 --> 00:21:48,760 Speaker 1: that the understates he is kind and gentle and understated. 385 00:21:49,760 --> 00:21:51,600 Speaker 1: If you were to ask me about the FED, I 386 00:21:51,640 --> 00:21:55,960 Speaker 1: just get I mean that just that's ridiculous. They're terrible. 387 00:21:56,160 --> 00:21:58,680 Speaker 1: So let's say you're the receptionist at the FED. Uh, 388 00:21:59,480 --> 00:22:01,600 Speaker 1: I would do a John Taylor on him if we 389 00:22:01,600 --> 00:22:02,840 Speaker 1: were up to me, I had to pull a John 390 00:22:02,840 --> 00:22:05,240 Speaker 1: Taylor on him and explain that to where listeners. So 391 00:22:05,440 --> 00:22:07,200 Speaker 1: you know, John Taylor's always had the view that the 392 00:22:07,200 --> 00:22:09,399 Speaker 1: FED ought to be just simply turned into a black 393 00:22:09,480 --> 00:22:12,119 Speaker 1: box that creates a quantity of money at a relatively 394 00:22:12,160 --> 00:22:15,040 Speaker 1: steady rate. Uh, and an effect that's an extension of 395 00:22:15,080 --> 00:22:17,600 Speaker 1: what Milton Friedman taught when I was a kid. It's different, 396 00:22:17,600 --> 00:22:21,560 Speaker 1: but it's sort of parallel. Uh. You know, William and 397 00:22:21,600 --> 00:22:24,159 Speaker 1: Chesney Martin was the longest running uh head of the 398 00:22:24,160 --> 00:22:26,000 Speaker 1: Fed in the history of the Fed. And you know, 399 00:22:26,080 --> 00:22:29,080 Speaker 1: he made all kinds of blunders and afterwards, you know, 400 00:22:29,119 --> 00:22:32,000 Speaker 1: he was asked why and and you know he always 401 00:22:32,040 --> 00:22:34,040 Speaker 1: had great lines, and one of his lines was, well, 402 00:22:34,080 --> 00:22:35,280 Speaker 1: when you come ahead of the Fed, you take a 403 00:22:35,280 --> 00:22:36,800 Speaker 1: little pill and it makes you forget everything you ever 404 00:22:36,880 --> 00:22:38,359 Speaker 1: knew and at last, as long as you head of 405 00:22:38,359 --> 00:22:41,520 Speaker 1: the Fed. And and then he was succeeded by Arthur Burns, 406 00:22:41,520 --> 00:22:43,120 Speaker 1: who was the best prepared person up to that point 407 00:22:43,160 --> 00:22:44,520 Speaker 1: in time in history to be head of the Fed. 408 00:22:44,680 --> 00:22:47,679 Speaker 1: And he's a bloody disaster. And afterwards, Uh, you know, 409 00:22:47,680 --> 00:22:49,440 Speaker 1: in those days that used to be Carter's little liver 410 00:22:49,520 --> 00:22:52,280 Speaker 1: pills that were you know, widely advertised, didn't do anything 411 00:22:52,280 --> 00:22:54,959 Speaker 1: that Finally the government forced him to change their name 412 00:22:55,000 --> 00:22:57,840 Speaker 1: to Carter's Pills and and and they asked Burns, why 413 00:22:57,840 --> 00:22:59,359 Speaker 1: did you make all these stupid mistakes. He said, you 414 00:22:59,440 --> 00:23:02,240 Speaker 1: never make an said, well, I took Martin's pill. And 415 00:23:02,240 --> 00:23:07,080 Speaker 1: and the fact is, Milton Friedman said when I was 416 00:23:07,119 --> 00:23:11,400 Speaker 1: a kid that the FED would always get fixated on 417 00:23:11,640 --> 00:23:15,479 Speaker 1: wiggling and jiggling interest rates, and they wouldn't focus on 418 00:23:15,600 --> 00:23:17,679 Speaker 1: what they should be doing, which is growing the quantity 419 00:23:17,720 --> 00:23:19,920 Speaker 1: of broad quantity of money at a relatively steady state, 420 00:23:19,960 --> 00:23:22,960 Speaker 1: consistent with the growth rate of the economy and a 421 00:23:23,040 --> 00:23:27,119 Speaker 1: desired inflation rate. Instead, they get sidetracked, focused on the 422 00:23:27,160 --> 00:23:30,800 Speaker 1: snake that's wiggling around, and that they do and they 423 00:23:30,960 --> 00:23:34,359 Speaker 1: can't quite get themselves. They were up to me because again, 424 00:23:34,400 --> 00:23:37,160 Speaker 1: nobody at the FEDS ever actually engaged in banking, isn't 425 00:23:37,160 --> 00:23:41,080 Speaker 1: that ironic? Nobody at at the eurobanks actually ever engaged 426 00:23:41,119 --> 00:23:44,639 Speaker 1: in banking, isn't that weird? And that they're all regulators 427 00:23:44,640 --> 00:23:47,920 Speaker 1: and politicians and economists and they've actually never gotten their 428 00:23:47,920 --> 00:23:53,359 Speaker 1: hands dirty. If they were, in my opinion, smarter, which 429 00:23:53,520 --> 00:23:55,080 Speaker 1: I don't expect them to ever be. I mean, they're 430 00:23:55,160 --> 00:23:59,000 Speaker 1: very smart. If if they would purge themselves of all 431 00:23:59,040 --> 00:24:01,040 Speaker 1: those idiotic bomb they never should have bought in the 432 00:24:01,040 --> 00:24:03,879 Speaker 1: first place, which would push long rates up a little 433 00:24:04,400 --> 00:24:07,600 Speaker 1: steep in the yield curve, incentivized banks lens stop paying 434 00:24:07,640 --> 00:24:10,520 Speaker 1: interest on online reserves. And what quantitative easing was always about, 435 00:24:10,560 --> 00:24:13,760 Speaker 1: which was dishonest, was always about forcing banks to build 436 00:24:13,800 --> 00:24:17,120 Speaker 1: their balance sheets. Because what really drives the central bankers 437 00:24:17,119 --> 00:24:18,879 Speaker 1: of the of the modern world is their fear of 438 00:24:18,920 --> 00:24:22,159 Speaker 1: too big to fail. But I don't think Trump calling 439 00:24:22,240 --> 00:24:26,600 Speaker 1: the FED bone head is anything other than a mild understate. Well, 440 00:24:26,640 --> 00:24:28,359 Speaker 1: it is certain that we might see some wiggling and 441 00:24:28,400 --> 00:24:31,879 Speaker 1: jiggling of interest rates come next week. I do believe 442 00:24:31,920 --> 00:24:35,120 Speaker 1: they wiggle and jiggle and tiggle insider um. But the 443 00:24:35,160 --> 00:24:37,000 Speaker 1: fact of the matter, do you know that there once 444 00:24:37,040 --> 00:24:40,080 Speaker 1: was a spider? Yeah, I think that's kind of where 445 00:24:40,080 --> 00:24:41,760 Speaker 1: the feed is. They get that wiggle and jiggle and 446 00:24:41,760 --> 00:24:44,919 Speaker 1: tiggle insider thing. But I don't see that's very crazy, 447 00:24:45,000 --> 00:24:47,119 Speaker 1: that Trump thing. I mean, if in the scale at 448 00:24:47,119 --> 00:24:50,639 Speaker 1: Trump is ums, that's pretty Uh, that's pretty mild. Although 449 00:24:50,680 --> 00:24:53,119 Speaker 1: he's calling them bone headed for opposite reasons that you are. 450 00:24:53,160 --> 00:24:57,400 Speaker 1: He wants more quantitative using, he wants lower negative rates, uh, 451 00:24:57,800 --> 00:25:00,959 Speaker 1: something that I would assume would put the banking industry 452 00:25:01,000 --> 00:25:03,480 Speaker 1: at great risks. So far, up to this point in time, 453 00:25:03,520 --> 00:25:05,959 Speaker 1: President Trump has allowed me to have whatever opinion I 454 00:25:06,000 --> 00:25:10,520 Speaker 1: want to have, and I hope he allows you to to. Alright, well, 455 00:25:10,520 --> 00:25:12,720 Speaker 1: if boneheads isn't a crazy enough, Mike, why don't you 456 00:25:12,720 --> 00:25:15,639 Speaker 1: give us something even crazier? Al Right. The craziest thing 457 00:25:15,680 --> 00:25:20,600 Speaker 1: I saw this week a Bloomberg story by Austin Weinstein. Um, 458 00:25:20,800 --> 00:25:23,320 Speaker 1: so there, this goes all the way back to nine. 459 00:25:24,800 --> 00:25:29,480 Speaker 1: There was an attorney from Canada named David Fasken. He 460 00:25:29,560 --> 00:25:33,520 Speaker 1: paid a dollar fifty an acre for something like a 461 00:25:33,600 --> 00:25:37,520 Speaker 1: hundred and sixty five acres where outside of Midland, Texas 462 00:25:38,280 --> 00:25:42,800 Speaker 1: Permian Basin. It's now worth about seven billion dollars. His 463 00:25:42,960 --> 00:25:46,919 Speaker 1: heirs have inherited it all. Um, they're not selling and 464 00:25:46,960 --> 00:25:48,720 Speaker 1: they're not really drilling on it, talk about buy and 465 00:25:48,760 --> 00:25:51,600 Speaker 1: hold ken that's uh, let's taken it to the extreme. 466 00:25:51,960 --> 00:25:54,560 Speaker 1: So can I offer you a crazy of the week. Yeah, 467 00:25:54,720 --> 00:25:57,199 Speaker 1: of course, that's why you're here. So the crazy of 468 00:25:57,200 --> 00:25:59,879 Speaker 1: the week that if I knew that was why I 469 00:26:00,040 --> 00:26:04,159 Speaker 1: was here, I would have thought of something crazy. So 470 00:26:04,200 --> 00:26:08,200 Speaker 1: we think about this week after week after week. We 471 00:26:08,320 --> 00:26:11,399 Speaker 1: got these protests in Hong Kong, and we got this 472 00:26:11,520 --> 00:26:14,080 Speaker 1: concern that the Chinese are coming. The Chinese are coming, 473 00:26:14,080 --> 00:26:16,320 Speaker 1: the Chinese are coming, Oh my god. And so what 474 00:26:16,359 --> 00:26:21,240 Speaker 1: does Hong Kong do bids by the London stock? If 475 00:26:21,240 --> 00:26:25,080 Speaker 1: that isn't crazy, A pretty good, nice stable ordership, big 476 00:26:25,080 --> 00:26:27,760 Speaker 1: bid too? We want we want China on the London stock. 477 00:26:27,760 --> 00:26:30,000 Speaker 1: I'm saying. I'd say that's a pretty good one, very 478 00:26:30,000 --> 00:26:32,640 Speaker 1: good one. As a matter of fact, that's pretty good. Chris. 479 00:26:32,640 --> 00:26:34,200 Speaker 1: How about you? What do you get well? Just the 480 00:26:34,520 --> 00:26:38,439 Speaker 1: I can't not say the quanta the quant quake going on. Particularly. 481 00:26:38,560 --> 00:26:41,920 Speaker 1: We've had a lot of arguments on the desk about 482 00:26:42,200 --> 00:26:44,240 Speaker 1: what's really going on, and there is an aspect that 483 00:26:44,280 --> 00:26:48,520 Speaker 1: if you, if you invent enough names for things momentum, quality, growth, whatever, 484 00:26:48,760 --> 00:26:51,520 Speaker 1: eventually you'll be able to apply them to whatever set 485 00:26:51,560 --> 00:26:53,960 Speaker 1: of facts you're faced with. And I think a little 486 00:26:53,960 --> 00:26:55,879 Speaker 1: bit of that's going on. But I'm also sort of 487 00:26:55,880 --> 00:26:59,200 Speaker 1: fascinated by something Sarah raised this week, where, in trying 488 00:26:59,200 --> 00:27:02,800 Speaker 1: to parry me from this argument, Um brought up the 489 00:27:02,840 --> 00:27:08,159 Speaker 1: sort of weird col movement of stocks that almost are 490 00:27:08,200 --> 00:27:11,400 Speaker 1: acting like they know their momentum stocks and know their 491 00:27:11,480 --> 00:27:14,640 Speaker 1: value stocks. One thing I would say, not individual names, 492 00:27:14,640 --> 00:27:17,840 Speaker 1: but the fact that oil shares broadly have risen for 493 00:27:17,960 --> 00:27:20,440 Speaker 1: ten of the last eleven days during a period of 494 00:27:20,800 --> 00:27:23,760 Speaker 1: pretty deep, you know, typical volatility in the price of oil. 495 00:27:24,359 --> 00:27:26,560 Speaker 1: When when I think about that, I start to wonder 496 00:27:26,600 --> 00:27:29,120 Speaker 1: if there isn't something to this kind of top down 497 00:27:29,160 --> 00:27:32,320 Speaker 1: overweight thing going on with the quants and maybe maybe 498 00:27:32,600 --> 00:27:35,639 Speaker 1: oil stocks do know that their their value stocks at 499 00:27:35,680 --> 00:27:38,600 Speaker 1: some level. Yeah, I wonder the t LT, the Treasury 500 00:27:38,640 --> 00:27:42,800 Speaker 1: et F, is that a momentum stock. At the interview interview, 501 00:27:44,119 --> 00:27:46,680 Speaker 1: it was recently the most overbought in its history if 502 00:27:46,680 --> 00:27:50,160 Speaker 1: you look at relative strength indexes. But my craziest thing 503 00:27:50,600 --> 00:27:52,439 Speaker 1: kind of goes off of what Chris was just saying, 504 00:27:52,560 --> 00:27:55,159 Speaker 1: just because it's pretty crazy. If you look at the 505 00:27:55,200 --> 00:27:57,520 Speaker 1: best performing stocks that you've seen this year in the 506 00:27:57,680 --> 00:27:59,879 Speaker 1: Russell one thousand or in the SMP. I mean you 507 00:28:00,000 --> 00:28:03,000 Speaker 1: think of names like Chipotle or is this one called 508 00:28:03,040 --> 00:28:08,320 Speaker 1: avalara Um and they provide sales, tax management all up 509 00:28:08,359 --> 00:28:11,480 Speaker 1: a crazy amount like or more this year and for 510 00:28:11,520 --> 00:28:14,440 Speaker 1: no reason whatsoever. I mean, earlier this week you would 511 00:28:14,480 --> 00:28:19,280 Speaker 1: saw them getting counted. Chipotle hasn't hit anybody die from 512 00:28:19,280 --> 00:28:24,679 Speaker 1: its fluid Well shocked people saying I'm not saying on 513 00:28:24,720 --> 00:28:27,080 Speaker 1: the way up, I'm sprising on the way up, I 514 00:28:27,119 --> 00:28:32,720 Speaker 1: mean myself too, but no, on the way down, there 515 00:28:32,800 --> 00:28:35,720 Speaker 1: was nothing that happened. I mean, no one died eating Chipotle, 516 00:28:35,880 --> 00:28:40,360 Speaker 1: and to anyone staring at someone will be able. But 517 00:28:40,480 --> 00:28:46,400 Speaker 1: someone went in there, it was scary. What are you thinking? No, 518 00:28:46,480 --> 00:28:49,720 Speaker 1: I just feel like that anyone who's been glued to 519 00:28:49,760 --> 00:28:53,040 Speaker 1: their their terminals from the stock side has been bowled 520 00:28:53,080 --> 00:28:56,800 Speaker 1: over by some just the sort of ghostly corrolations that 521 00:28:56,880 --> 00:28:59,960 Speaker 1: have suddenly sprung up. Well, let's hope they continue to 522 00:29:00,320 --> 00:29:03,160 Speaker 1: remain glued to their terminals and complete glue to this podcast. 523 00:29:03,240 --> 00:29:04,960 Speaker 1: But I think that's uh, that's all the time. A 524 00:29:04,960 --> 00:29:07,680 Speaker 1: way for this week. Chris Nagy, Ken Fisher, thank you 525 00:29:07,760 --> 00:29:09,760 Speaker 1: so much for joining us today. Thanks for having me 526 00:29:15,560 --> 00:29:18,560 Speaker 1: what goes up. We'll be back next week. Until then, 527 00:29:18,760 --> 00:29:21,280 Speaker 1: you can find us on the Bloomberg Terminal website and 528 00:29:21,320 --> 00:29:24,800 Speaker 1: app or wherever you get your podcasts. We love it 529 00:29:24,840 --> 00:29:26,960 Speaker 1: if you took the time to rate interview the show 530 00:29:27,000 --> 00:29:30,600 Speaker 1: on Apple Podcasts so more listeners can find us. And 531 00:29:30,680 --> 00:29:33,480 Speaker 1: you can find us on Twitter. Follow me at at 532 00:29:33,520 --> 00:29:37,320 Speaker 1: Sarah Pontzack Mike is at Reagan Anonymous. Our guest, Ken 533 00:29:37,360 --> 00:29:41,120 Speaker 1: Fisher is at Kenneth L. Fisher and Chris nag Is 534 00:29:41,200 --> 00:29:44,920 Speaker 1: at Chris nag One. You can also follow Bloomberg podcasts 535 00:29:45,040 --> 00:29:48,800 Speaker 1: at podcasts. What Goes Up is produced by topor Foreheads. 536 00:29:48,840 --> 00:29:52,160 Speaker 1: The head of Bloomberg podcast is Francesca leav Thanks for listening, 537 00:29:52,240 --> 00:30:03,000 Speaker 1: See you next time. The FO