WEBVTT - Nvidia Hit With Subpoena in DOJ Antitrust Probe 0:00:02.480 --> 0:00:10.480 Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 0:00:10.520 --> 0:00:13.720 Daybreak Asia podcast. I'm Doug Prisner. You can join Brian 0:00:13.800 --> 0:00:16.640 Curtis and myself for the stories, making news and moving 0:00:16.680 --> 0:00:19.560 markets in the APAC region. You can subscribe to the 0:00:19.600 --> 0:00:23.080 show anywhere you get your podcast and always on Bloomberg Radio, 0:00:23.320 --> 0:00:27.440 the Bloomberg Terminal, and the Bloomberg Business app. Let's take 0:00:27.440 --> 0:00:30.480 a closer look at this Nvidia story and the selloff 0:00:30.520 --> 0:00:32.879 in the chip sector. Dan Ives is with us. He's 0:00:32.960 --> 0:00:38.000 managing director also senior equity analyst at Webbush Securities. So 0:00:38.040 --> 0:00:40.680 it looks as though we've got concern on the part 0:00:40.720 --> 0:00:45.960 of anti trust regulators. Dan that in video maybe I 0:00:45.960 --> 0:00:49.800 don't want to say an abusive monopolist, but certainly of 0:00:50.240 --> 0:00:55.640 infringing on perhaps anti competitive practices. What do you think, Yeah, Look. 0:00:55.520 --> 0:00:59.560 I mean this is the theme that we've seen across 0:00:59.600 --> 0:01:03.200 big time, right, I mean, from Google to Apple to 0:01:03.240 --> 0:01:06.360 Amazon of course now in video, Look, they're the only 0:01:06.440 --> 0:01:10.600 game in town, but it's really because of the innovation while 0:01:10.600 --> 0:01:12.560 they're the only game in town. So I think this 0:01:12.640 --> 0:01:17.000 is one probably you know, the headlines scarier than probably 0:01:17.040 --> 0:01:20.000 the reality in the near term, but no doubt this 0:01:20.120 --> 0:01:22.040 is not the right day for this to come out, 0:01:22.120 --> 0:01:25.560 given the white knuckles we saw across chips. 0:01:25.720 --> 0:01:28.160 Yeah, you're in Soul today, which is kind of curious. 0:01:28.200 --> 0:01:31.440 And some of those high bandwidth memory chip manufacturers are 0:01:31.480 --> 0:01:34.039 in South Korea, and I'm thinking sk Heinis, I'm thinking 0:01:34.120 --> 0:01:38.400 Samsung from your perspective being there, what is the degree 0:01:38.440 --> 0:01:40.560 of the knock on effect? Is it great? Is there 0:01:40.600 --> 0:01:44.319 a pretty strong correlation between what happens in Nvidia stock 0:01:44.360 --> 0:01:47.320 and what happens with a company like say sk Heinix. 0:01:48.360 --> 0:01:52.360 Look, I think a huge correlation. And look, and that's 0:01:52.400 --> 0:01:57.040 why what we're seeing here for Semis is a once 0:01:57.120 --> 0:02:01.440 in a thirty forty year type of psychle But that's 0:02:01.560 --> 0:02:04.040 not stopping. And there was like we're going to have 0:02:04.240 --> 0:02:08.160 these periods of self just like we saw Tokyo Black Monday, 0:02:08.560 --> 0:02:11.720 like we saw today. But if you look at the 0:02:11.760 --> 0:02:16.440 demands outstrip and supply fifteen to one, so that continues 0:02:16.480 --> 0:02:18.440 to be a huge tow And for all of these 0:02:18.520 --> 0:02:20.600 chip players, what are you. 0:02:20.639 --> 0:02:23.359 Hearing on the ground there in South Korea. I'm curious 0:02:23.440 --> 0:02:26.160 just about what's going on in the US, and particularly 0:02:26.320 --> 0:02:27.440 in regard to AI. 0:02:28.680 --> 0:02:32.400 Look, I think there's a big focus not just from investors, 0:02:32.440 --> 0:02:35.560 but from the actual you know, from the tech players 0:02:35.639 --> 0:02:39.560 in terms of seeing where this demand curve. 0:02:39.360 --> 0:02:39.840 Is going to go. 0:02:39.960 --> 0:02:42.880 I think there's a lot of optimism that we are 0:02:42.919 --> 0:02:45.160 still in the early innings of where this is going. 0:02:45.240 --> 0:02:49.080 I think the big question is, Okay in Nvidia, everyone 0:02:49.160 --> 0:02:53.280 understands now, who are the next players to benefit? And 0:02:53.320 --> 0:02:55.920 I think that's really going to be the focus, not 0:02:56.120 --> 0:03:00.120 just here in Korea, what we see across Asia and 0:03:00.120 --> 0:03:02.400 really what we see across the goal because look in 0:03:02.560 --> 0:03:06.120 Vidio is the start, but it's a huge multiplier. If 0:03:06.160 --> 0:03:08.800 every dollar spend on video chip, we think there's an 0:03:08.800 --> 0:03:12.080 eight to ten dollars multiplier, that would be a clear benefit, 0:03:12.160 --> 0:03:14.320 especially some of the players here in South Korea. 0:03:14.360 --> 0:03:17.320 But when you consider a company like Advanced micro Devices, 0:03:17.360 --> 0:03:21.080 which is trying to do what in Vidia does with 0:03:21.280 --> 0:03:26.440 these graphics processors, what is the runway that AMD needs 0:03:26.480 --> 0:03:28.680 to even become competitive within video? 0:03:29.440 --> 0:03:32.280 Yeah, Look Betton against Lisa soon a AMDD and that's 0:03:32.320 --> 0:03:36.520 wrong that I think they will be major players in 0:03:36.560 --> 0:03:40.040 this race. They look in videos years ahead. But if 0:03:40.040 --> 0:03:42.600 you look, this is gonna be a trillion dollars of 0:03:42.640 --> 0:03:46.440 incremental AI capbacks. So if AMD gets five to ten 0:03:46.480 --> 0:03:48.680 percent a share, I don't believe that that's baked into 0:03:48.720 --> 0:03:51.400 the stock. And I think that's really the focus now. 0:03:51.440 --> 0:03:55.400 It's who are the other beneficiaries? Second, third, fourth derivative 0:03:56.080 --> 0:03:59.120 because it's clearly something that's playing out, and I think 0:03:59.160 --> 0:04:02.600 we saw with the Vidia earnings last week. It's undeniable 0:04:03.320 --> 0:04:06.520 in terms of what this trend is. But you'll see 0:04:06.640 --> 0:04:09.680 sell offsite today, You'll see selfs like we did a 0:04:09.720 --> 0:04:12.920 few weeks ago. I still believe tech goes to all 0:04:13.000 --> 0:04:15.480 time highs, you know, over the next three six months. 0:04:15.680 --> 0:04:17.400 You know, Dan, When I think of Nvidio, I think 0:04:17.440 --> 0:04:21.320 of TSMC, the big foundry in TYPEI is there a 0:04:21.360 --> 0:04:24.880 conversation where you are now in South Korea around diversifying 0:04:24.960 --> 0:04:28.200 the chip supply chain maybe and allocating a little bit 0:04:28.200 --> 0:04:29.960 more on the foundry side in South Korea. 0:04:30.880 --> 0:04:31.040 Yeah. 0:04:31.120 --> 0:04:34.400 Look, I think theoretical, but for right now, I mean 0:04:34.480 --> 0:04:38.359 TSMC has hearts and lungs, and I think this is 0:04:38.480 --> 0:04:41.920 something that's really going to be playing out over the 0:04:41.960 --> 0:04:45.240 next twelve, eighteen twenty four months in terms of the 0:04:45.279 --> 0:04:48.120 supply chance. It's just going to continue to expand. Part 0:04:48.120 --> 0:04:51.280 of it is not just about TSMC, it's just demand 0:04:51.560 --> 0:04:55.080 is so strong relative to supply. There's gonna be a 0:04:55.120 --> 0:04:58.120 lot of players that benefit that today I don't believe 0:04:58.120 --> 0:05:01.520 are on the radar from a global perspective. 0:05:01.640 --> 0:05:04.760 Investors, Dan, it's always a pleasure. Thanks for making time 0:05:04.800 --> 0:05:07.000 to chat with us. Dan Ives is the managing director. 0:05:07.040 --> 0:05:17.679 He's also senior equity analyst ad web Bush Securities. Adam 0:05:17.760 --> 0:05:21.680 Koon's the co CIO at Winthrop Capital Management. Joining us 0:05:21.960 --> 0:05:25.960 from the heartland of Indianapolis, Indiana. Thanks for making time 0:05:26.160 --> 0:05:28.880 for us, Adam. Let's talk about this ISM date. I 0:05:28.920 --> 0:05:31.599 think that really in large parts helped to put the 0:05:31.640 --> 0:05:35.360 market on the back foot, wouldn't you agree today, fir. 0:05:35.240 --> 0:05:37.760 So, thanks for having me and yeah, I do totally agree. 0:05:38.360 --> 0:05:41.800 IM is one of those indicators that does have a 0:05:41.839 --> 0:05:45.880 lot of correlation to, you know, where the economy is heading. 0:05:47.680 --> 0:05:49.480 You know, you look at employment and things like that. 0:05:49.480 --> 0:05:54.080 There's tend to be quite lagging indicators. But this continued 0:05:54.279 --> 0:06:00.760 deterioration in ISM does give me more caution about, you know, 0:06:00.880 --> 0:06:02.239 kind of where the economy is heading. 0:06:02.760 --> 0:06:05.080 One of the things I think the market seems to 0:06:05.120 --> 0:06:07.200 be indicating here is that the rate cut that we're 0:06:07.200 --> 0:06:10.240 expecting in a couple of weeks less than two weeks time, 0:06:10.640 --> 0:06:12.719 will be twenty five basis points. But we do have 0:06:12.760 --> 0:06:14.920 a lot of data to consider on the labor market 0:06:14.920 --> 0:06:18.800 this week. It culminates, obviously with the employment report on Friday. 0:06:19.080 --> 0:06:24.400 If in aggregate these data really come in much below expectations, 0:06:24.520 --> 0:06:26.880 is there a risk do you think of a fifty 0:06:26.920 --> 0:06:28.680 basis point rate cut this month? 0:06:30.080 --> 0:06:34.080 I think it's possible, I've said kind of along from 0:06:34.120 --> 0:06:37.000 our perspective. You got to look at the entire cycle 0:06:37.040 --> 0:06:40.760 of this fit of reserve, and at the front end 0:06:41.000 --> 0:06:43.040 they were very slow to act. They wanted to make 0:06:43.080 --> 0:06:47.080 sure that the data was really pointing towards inflation, and 0:06:47.160 --> 0:06:50.760 really obviously probably waited too long to act and then 0:06:51.320 --> 0:06:54.279 took quite a bit of action to increase interest rates. 0:06:54.839 --> 0:06:57.520 It's hard to see how they're going to have different 0:06:57.560 --> 0:07:02.000 behavior at the back end of the cycle, because there's 0:07:02.000 --> 0:07:05.680 still just enough data to show that the economy is 0:07:05.800 --> 0:07:09.720 still somewhat okay. Like you said, the employment number is 0:07:09.800 --> 0:07:12.480 a big factor in that, But I think the bigger 0:07:12.520 --> 0:07:13.440 scare is. 0:07:13.400 --> 0:07:16.480 Really reigniting inflation. 0:07:16.560 --> 0:07:18.760 I think that's what the Fed's really focused on They're 0:07:18.760 --> 0:07:22.320 going to let employment start to slip a bit before 0:07:22.400 --> 0:07:27.480 they act, because there's still is room in the employment market. 0:07:27.480 --> 0:07:35.000 You know, yes, obviously, you know mid foors is higher 0:07:35.880 --> 0:07:36.600 than where we were. 0:07:36.680 --> 0:07:37.800 But I think the. 0:07:37.760 --> 0:07:39.840 FED is going to need to really see the fact 0:07:39.880 --> 0:07:43.040 that inflation has come quite a bit closer to their 0:07:43.040 --> 0:07:45.240 two percent target before they move beyond a twenty five 0:07:45.280 --> 0:07:46.120 basis point cut. 0:07:46.360 --> 0:07:47.480 I do think if you. 0:07:47.440 --> 0:07:51.559 Know, the chances of not cutting are pretty much zero. 0:07:51.840 --> 0:07:53.760 I think it'd be a disaster if they, you know, 0:07:53.800 --> 0:07:57.720 didn't cut at all a fifty basis point cut. What 0:07:57.760 --> 0:08:00.240 that would tell me is that the FED sees more 0:08:00.640 --> 0:08:06.120 underlying data pointing to a prsure economic slow down, you know, 0:08:06.240 --> 0:08:08.880 to use a soft landing hard landing term, that they're 0:08:08.920 --> 0:08:12.160 starting to see a hard landing scenario. But I'm just 0:08:12.200 --> 0:08:13.800 not seeing that right now, so it's hard for me 0:08:13.840 --> 0:08:15.720 to believe that the Fed's gonna to take that kind 0:08:15.720 --> 0:08:16.040 of action. 0:08:16.280 --> 0:08:17.960 I want to get your reaction to what we had 0:08:17.960 --> 0:08:20.760 in the equity sell off today where tech led the decline, 0:08:20.880 --> 0:08:23.640 especially the chip makers we were talking about in video 0:08:23.680 --> 0:08:25.840 a moment ago. In the regular session, this stock was 0:08:25.840 --> 0:08:28.240 down nine and a half percent. Yeah, it's part of 0:08:28.240 --> 0:08:31.040 the AI story. We know of that. But does this 0:08:31.280 --> 0:08:33.880 come as a surprise to you or is it logical 0:08:34.679 --> 0:08:37.679 given the tremendous run up that we have seen in 0:08:37.760 --> 0:08:41.040 many of these names connected to artificial intelligence. 0:08:42.679 --> 0:08:45.680 No, it doesn't give me that much of a surprise. 0:08:46.400 --> 0:08:46.719 I don't know. 0:08:46.720 --> 0:08:48.280 I feel like I saw its coming because I didn't 0:08:48.480 --> 0:08:52.840 see that, you know, had that crystal wall. But you know, 0:08:52.920 --> 0:08:54.640 when you start to see that, that's the point when 0:08:54.679 --> 0:08:57.960 you start to see valuations get stretched and a more 0:08:58.080 --> 0:09:01.679 narrative based in investing in environment. What that does is 0:09:01.840 --> 0:09:05.840 it creates the opportunity for bigger sell offs. So it's difficult. 0:09:05.880 --> 0:09:08.400 You don't want to time it. But that's why we've 0:09:08.400 --> 0:09:12.079 been moving more defensively because we didn't we don't know 0:09:12.640 --> 0:09:15.200 if the equity markets are going to completely roll over. 0:09:15.480 --> 0:09:18.839 But when valuations get this stretched and they're not by 0:09:18.880 --> 0:09:23.640 any means, you know, bubble territory, but we do all 0:09:23.679 --> 0:09:25.719 we can all see that that valuations are on the 0:09:25.760 --> 0:09:27.920 high side. So that's the time to start playing a 0:09:27.960 --> 0:09:30.720 little bit more defense. That doesn't mean move to cash, 0:09:30.800 --> 0:09:33.120 but you're just kind of moving into higher quality, lower 0:09:33.160 --> 0:09:33.800 beta names. 0:09:34.360 --> 0:09:36.280 So that you avoid scenarios like today. 0:09:36.360 --> 0:09:38.480 And it's it's not a surprise that tech would lead 0:09:38.600 --> 0:09:40.800 a sell off like this because it's obviously led to 0:09:40.840 --> 0:09:43.200 the upside and that's where the valuations are the most 0:09:43.200 --> 0:09:47.400 stretched and so and they're obviously semiconductors are one of 0:09:47.440 --> 0:09:51.640 the most cyclical sectors within the SMP. So as we 0:09:51.679 --> 0:09:56.400 start to see a shift towards a potential faster slowdown, 0:09:56.679 --> 0:09:59.839 that obviously will affect the sale. And we heard it 0:09:59.880 --> 0:10:03.120 in earnings, you know previously a couple of weeks ago 0:10:03.360 --> 0:10:05.440 from some of the big tech where they were saying that, hey, 0:10:05.480 --> 0:10:10.600 we're decelerating our spend on chips because you know, demand 0:10:10.640 --> 0:10:14.200 is starting to slow overall, whether it's cloud, AI or like. 0:10:14.280 --> 0:10:17.360 So it's not a surprise that, you know, a small 0:10:17.360 --> 0:10:19.400 piece of what can seem like a small piece. 0:10:19.200 --> 0:10:24.000 Of news can make very big moves in stocks because 0:10:24.040 --> 0:10:25.120 of that valuation piece. 0:10:25.240 --> 0:10:28.199 So I hear what you're saying, higher quality, low beta names, 0:10:28.240 --> 0:10:31.000 but that's the equity space, are you inclined? And I 0:10:31.040 --> 0:10:33.280 also hear when you say, you know, we don't really 0:10:33.320 --> 0:10:36.120 want to park in cash or cash equivalent at the moment, 0:10:36.160 --> 0:10:39.400 but are there opportunities in the fixed income space that 0:10:39.480 --> 0:10:42.400 you like the corporate bond market. Do things look attractive there? 0:10:43.480 --> 0:10:43.840 I do. 0:10:44.120 --> 0:10:48.160 Corporate spreads are historically, you know, on the tight side. 0:10:48.559 --> 0:10:50.280 But with that said, you know, when you look at 0:10:50.320 --> 0:10:53.679 higher quality corporates, you could even look at treasuries or 0:10:53.960 --> 0:10:58.800 mortgage backed securities. It's one of the most asymmetric restory 0:10:58.880 --> 0:11:01.480 ward profiles I've seen in a long time, meaning that 0:11:02.200 --> 0:11:05.040 you know, the risk of interest rates going much higher 0:11:05.080 --> 0:11:07.000 from here is very very low. 0:11:07.200 --> 0:11:09.640 And so your other two scenarios where the interest rates day. 0:11:09.520 --> 0:11:12.840 Where they are, and I'm very happy to clip you know, 0:11:13.000 --> 0:11:18.280 five to six percent coupons while I wait, or you know, 0:11:18.360 --> 0:11:21.760 on the upside scenarios, we see interest rates collapse because 0:11:21.800 --> 0:11:24.959 the economy is slowing down, and then you're going to 0:11:25.000 --> 0:11:27.960 see that price appreciation of those bonds. So yeah, within 0:11:28.000 --> 0:11:33.040 our asset allocation, going longer duration fixed income is that 0:11:33.160 --> 0:11:36.160 is our you know, highest conviction trade ab of what 0:11:36.160 --> 0:11:37.880 else we're doing in the equity side. 0:11:37.960 --> 0:11:40.840 So I'm curious about the house view at Winthrom Capital, 0:11:40.920 --> 0:11:44.920 given the fact that September is historically a tough month 0:11:45.320 --> 0:11:47.840 for the stock market, are you expecting more in the 0:11:47.840 --> 0:11:48.760 way of downside. 0:11:50.880 --> 0:11:51.480 Yes we are. 0:11:51.640 --> 0:11:54.240 And and the way I'll say it is, what we're 0:11:54.280 --> 0:11:57.480 really seeing or what we are expecting, is heightened volatility. 0:11:57.960 --> 0:11:59.800 There are a lot of things happening right now. Right 0:12:00.200 --> 0:12:04.800 there's a there's a big election coming up. 0:12:05.040 --> 0:12:06.480 Yeah, it is obvious. 0:12:06.800 --> 0:12:08.839 And then on top of that, you've got the fact 0:12:08.840 --> 0:12:11.559 that that you know, what the Fed may or may 0:12:11.600 --> 0:12:15.280 not do has been what's driving markets for the past year, 0:12:15.440 --> 0:12:19.760 and that's just going to accelerate the further we get 0:12:19.800 --> 0:12:23.679 into you know, twenty twenty four, and there's these expectations 0:12:23.760 --> 0:12:26.520 kind of come to a head and whether the FED cuts, 0:12:27.720 --> 0:12:30.079 whether the reason and it comes down to the reason 0:12:30.120 --> 0:12:33.160 of that they're cutting, and how uh, you know, how 0:12:33.360 --> 0:12:37.000 dramatically they cut, because large cuts mean that the economy 0:12:37.120 --> 0:12:39.760 is really in tough shape. And so that in and 0:12:39.840 --> 0:12:42.320 of itself could lead to equity markets selling off just from 0:12:42.320 --> 0:12:46.120 that trying to understand why the Fed is saying or 0:12:46.160 --> 0:12:48.360 doing what they're doing. So, yeah, at the end of 0:12:48.360 --> 0:12:52.360 the day, heightened volatility is almost a guarantee at this point, 0:12:52.640 --> 0:12:55.120 and and that comes with some bigger down moves. It could, 0:12:55.160 --> 0:12:57.320 It could at the end of the day right through it, 0:12:57.360 --> 0:13:01.520 and in the year up. That's that's probably the higher likelihood. 0:13:01.920 --> 0:13:03.959 But in the short term, yeah, we're going to see 0:13:03.960 --> 0:13:04.560 a lot of chop. 0:13:04.960 --> 0:13:07.320 All right, we'll leave it there on the chop. Adam, 0:13:07.400 --> 0:13:09.080 good stuff. Thank you so much for being with us. 0:13:09.080 --> 0:13:12.640 Adam Koons, the co CIO at Winthrom Capital Management, joining 0:13:12.679 --> 0:13:23.959 from Indianapolis. John Davey, founder CEO CIO at A Story 0:13:24.000 --> 0:13:27.720 of Portfolio Advisors, joining us from here in New York. John, 0:13:27.800 --> 0:13:30.880 thanks for joining us. A lot to take apart. Let's 0:13:30.920 --> 0:13:33.959 begin with that is m pm I kind of a 0:13:34.040 --> 0:13:38.920 disappointment to many with continued weakness in the manufacturing economy. 0:13:38.920 --> 0:13:43.480 Are you concerned about what's been happening on the manufacturing side. 0:13:43.760 --> 0:13:46.080 Well, it's been in contraction, as you said, you know, 0:13:46.080 --> 0:13:48.959 for five straight months, but it was a small improvement 0:13:49.040 --> 0:13:51.760 from July. I think, you know, the idea from our 0:13:51.880 --> 0:13:53.960 side of story is that you've got to barbell your 0:13:54.000 --> 0:13:57.280 portfolio because as much as you know, on one hand, 0:13:57.280 --> 0:13:59.719 you've got bad growth data like today, I mean, there 0:13:59.720 --> 0:14:03.640 has been some recent data, whether it's retail sales, non 0:14:04.440 --> 0:14:08.280 manufacturing survey. We had upward revisions in GDP, we have 0:14:08.360 --> 0:14:10.640 better job less claim, so there is some good data, 0:14:10.960 --> 0:14:13.679 So it's just mixed overall growth to slow and that's 0:14:13.720 --> 0:14:15.040 why the Fed is going to cut rates. 0:14:15.440 --> 0:14:18.280 It's a key week for a lot of data on 0:14:18.320 --> 0:14:20.840 the labor market. It'll culminate, I think on Friday with 0:14:20.880 --> 0:14:25.120 the employment report. How are you reading the labor market 0:14:25.160 --> 0:14:28.480 these days? Have things been deteriorating to the point where 0:14:28.640 --> 0:14:31.280 maybe the Fed is going to consider something that is 0:14:31.760 --> 0:14:34.160 greater than twenty five basis points in terms of a 0:14:34.240 --> 0:14:34.800 rate cut. 0:14:36.240 --> 0:14:36.680 I think the. 0:14:36.640 --> 0:14:40.520 Odds right now are about forty forty rate cut, So 0:14:40.560 --> 0:14:43.120 I wouldn't say that that's high. I think the market 0:14:43.880 --> 0:14:47.080 in reality probably would get freaked out if they sore 0:14:47.160 --> 0:14:49.640 fifty BIPs because that would imply that, you know, the 0:14:49.680 --> 0:14:53.000 growth is really significantly slow. And so I think the 0:14:53.080 --> 0:14:55.080 idea is, you know, we want a series of twenty 0:14:55.080 --> 0:15:01.280 five bit rate cuts while growth still remains good. And 0:15:01.600 --> 0:15:04.040 I think that will sustain multiples, It'll keep a lit 0:15:04.040 --> 0:15:05.560 in the market and we won't have the kind of 0:15:05.600 --> 0:15:06.880 price action we saw it today. 0:15:07.040 --> 0:15:08.680 Yeah, some of that had to do with what we 0:15:08.760 --> 0:15:11.640 had in tech. The chips were hammered, I mean in 0:15:11.800 --> 0:15:14.480 Vidio down nine and a half percent today, and then 0:15:14.560 --> 0:15:17.640 more weakness with the news of the subpoenas and this 0:15:17.840 --> 0:15:22.640 anti trust investigation, how are you viewing big cap tech now? 0:15:24.000 --> 0:15:26.240 Well, I mean our big call for the last year 0:15:26.480 --> 0:15:29.400 was kind of tilt away from big cap megacap growth. 0:15:29.400 --> 0:15:30.960 I mean, I would just say that, you know, for 0:15:31.160 --> 0:15:33.280 it's been a tremendous run in the last ten years 0:15:33.280 --> 0:15:37.120 for tech in general. You know, seven stocks dominated most 0:15:37.160 --> 0:15:39.800 of returns. You know, seven stocks make up you know, 0:15:39.920 --> 0:15:41.440 north to thirty five percent of the s and P 0:15:41.480 --> 0:15:44.840 five hundred here in the US. I mean that's obviously dangerous. 0:15:44.880 --> 0:15:45.920 It cuts both ways. 0:15:45.960 --> 0:15:48.280 So we've been suggesting people to kind of tilt away 0:15:48.280 --> 0:15:51.120 from that for quite some time. So we like equally 0:15:51.160 --> 0:15:54.760 weighted strategies. We like barbelling our portfolio where we still 0:15:55.560 --> 0:15:58.160 like owning tech. We just don't want like seven stocks 0:15:58.160 --> 0:16:01.000 to make up most of those tech es. On one hand, 0:16:01.520 --> 0:16:04.040 you know, we use equally weighted strategies, and the other hand, 0:16:04.200 --> 0:16:06.520 I do think it's time to kind of get things 0:16:06.600 --> 0:16:09.440 like you know, USMV, the min voality tf xl V, 0:16:09.680 --> 0:16:13.080 the healthcare etf XL you to utility staples. 0:16:13.560 --> 0:16:16.080 You know, we like DJRW, which is a quality tiff 0:16:16.160 --> 0:16:16.520 that has. 0:16:16.440 --> 0:16:19.200 A value tilt. The bottom line is we're saying barbell 0:16:19.280 --> 0:16:22.960 it right. So most advisors that I oversee, I oversee 0:16:23.000 --> 0:16:27.120 it close to billion dollars, you know, thousands and thousands 0:16:27.120 --> 0:16:31.080 of accounts. Most of them are still long queues, quall spy, 0:16:32.400 --> 0:16:34.320 and we're just saying tilt away, take a third of 0:16:34.360 --> 0:16:37.280 it and rotate into something that's more defensive. 0:16:37.400 --> 0:16:40.800 How are you thinking about the sixty forty portfolio? I 0:16:40.840 --> 0:16:42.840 mean a little bit of fixed income in there or 0:16:42.880 --> 0:16:45.640 do you think that trade is already or trained? I 0:16:45.640 --> 0:16:46.760 should say left the station. 0:16:49.240 --> 0:16:49.880 Good question. 0:16:50.040 --> 0:16:52.840 I think you know bonds have a place for sure, 0:16:52.960 --> 0:16:53.840 I mean rate cuts. 0:16:53.880 --> 0:16:55.560 You know, we are longer duration, so. 0:16:55.520 --> 0:16:58.880 We're playing like that roll down you know, convexity move 0:16:58.960 --> 0:17:01.680 on rates. I think that you know the bond market, 0:17:02.080 --> 0:17:03.760 if it were up to them, we'd get two hundred 0:17:03.800 --> 0:17:05.040 BIPs of rat cuts. 0:17:05.280 --> 0:17:08.199 I don't think. I think there's more down moves to 0:17:08.240 --> 0:17:08.800 go and yield. 0:17:08.880 --> 0:17:11.919 But I do think that you want to own you know, 0:17:12.000 --> 0:17:14.800 some alternatives, I mean alternatives. It was a product that 0:17:14.880 --> 0:17:17.800 really couldn't be sold in an etif rapper. Most people 0:17:18.000 --> 0:17:21.040 just still looking at private credit, private private equity, but 0:17:21.080 --> 0:17:24.280 an etiff rapper you know, we've seen some you know, 0:17:24.480 --> 0:17:28.119 interesting like BUFFERYTF downside protection. I think that makes a 0:17:28.160 --> 0:17:29.720 lot of sense kind of giving where we are in 0:17:29.760 --> 0:17:32.440 the cycle, and you know, the growth looks very very 0:17:33.359 --> 0:17:35.760 you know, mixed and asymmetric in general. 0:17:35.800 --> 0:17:38.800 From a risk standpoint, Are you focused solely on what 0:17:38.840 --> 0:17:40.880 you're seeing here in the States or are you attempted 0:17:40.880 --> 0:17:42.639 to look off short at this point? 0:17:43.720 --> 0:17:46.480 Well, I mean the textbooks would say, you know, FED 0:17:46.640 --> 0:17:50.560 cuts rates, dollar weekends, emerging markets you know would do better. 0:17:52.440 --> 0:17:53.600 It's been a tough call. 0:17:53.760 --> 0:17:55.000 We prefer India. 0:17:55.200 --> 0:17:58.840 We think that there's demographic issues, there's a good growth story. 0:17:59.359 --> 0:18:03.640 China is very very challenging for most US based investors. 0:18:04.840 --> 0:18:07.399 You know, growth to slow there, there's you know, just 0:18:07.520 --> 0:18:10.960 issues in general from like a macro policy standpoint. But 0:18:11.119 --> 0:18:13.440 you know this pockets of emergent markets that we think 0:18:13.720 --> 0:18:16.240 are attractive and we would definitely start to nibble, especially 0:18:16.240 --> 0:18:19.280 if you get these rate cuts again, it's been ten years. 0:18:19.080 --> 0:18:21.040 Of just dramatic US AT performance. 0:18:21.080 --> 0:18:24.159 So in our global portfolios we do have allocations to 0:18:24.359 --> 0:18:28.520 rige of markets and Developed Europe Japan as well. I 0:18:28.560 --> 0:18:31.200 would just say that that's contrarian because you know, most 0:18:32.040 --> 0:18:33.520 people here in the States. All they want to do 0:18:33.560 --> 0:18:35.200 is talk about US, and we are trying to inch 0:18:35.240 --> 0:18:37.080 our advisors to look abroad. 0:18:37.680 --> 0:18:39.920 Well, one of the things that may be relevant here. 0:18:40.320 --> 0:18:43.560 If you believe that the boj is going to raise 0:18:43.640 --> 0:18:47.120 interest rates and we see a flight of capital leaving 0:18:47.520 --> 0:18:51.680 places in the developed world ex Japan, and being repatriated 0:18:51.760 --> 0:18:55.600 back into the Japanese market, maybe we're looking at a 0:18:55.600 --> 0:18:57.879 little bit more downside. And I know that you know 0:18:57.960 --> 0:19:01.720 this well that historically September can be a challenging month 0:19:02.000 --> 0:19:04.639 for stocks. Are we at risk right now in terms 0:19:04.640 --> 0:19:08.400 of Japanese players that they begin to repatride and bring 0:19:08.800 --> 0:19:09.359 money home. 0:19:11.240 --> 0:19:13.520 Yeah, I would say, you know, we we want to 0:19:13.560 --> 0:19:15.680 be overweight more in the US for some of the 0:19:15.800 --> 0:19:19.520 risks that you're outlining to begin with them. Usually when 0:19:19.560 --> 0:19:22.920 you go into the recession, you know, US usually kind 0:19:22.920 --> 0:19:24.840 of leads the way in and leads the way out. 0:19:24.920 --> 0:19:25.600 So we're we. 0:19:25.640 --> 0:19:28.919 Tend to be more over with US. Just you know, 0:19:29.040 --> 0:19:31.359 once you get past those seven stocks, the rest of 0:19:31.359 --> 0:19:35.480 the US equity market isn't that expensive. And it's certainly 0:19:36.240 --> 0:19:39.040 you know, while EM is cheaper and DM is cheaper, 0:19:39.119 --> 0:19:41.000 it's not like it's egregious at this point. 0:19:41.080 --> 0:19:43.439 So we're a little bit of a vulnerable period for 0:19:43.480 --> 0:19:44.360 equity markets. 0:19:44.800 --> 0:19:48.600 You know, the valuations are generally extended, So I think 0:19:48.640 --> 0:19:50.840 it's good to like own some of these alternatives, some 0:19:50.880 --> 0:19:55.200 of these buffer ETFs downside protection. We've used bt A L, 0:19:55.280 --> 0:19:58.159 which is like a long short marct neutrale ETF. You know, 0:19:58.200 --> 0:20:00.679 I think the idea is like September is expected to 0:20:00.680 --> 0:20:03.400 be volatile, and you know, it all starts with obviously 0:20:03.440 --> 0:20:05.320 Friday's non front payroll. 0:20:05.640 --> 0:20:08.600 Most definitely quick. In the time that we have left, 0:20:08.640 --> 0:20:10.159 which is about a minute, I want to get your 0:20:10.200 --> 0:20:14.200 take on the election. Economist over at Goldman Sachs published 0:20:14.200 --> 0:20:17.800 a note saying that if Trump were to win, that 0:20:18.240 --> 0:20:22.080 US GDP could face a hit. Different story of Vice 0:20:22.080 --> 0:20:25.080 President Kamala Harris were to win and then also have 0:20:25.200 --> 0:20:30.000 it her back Democrat control of both chambers in Congress, 0:20:30.160 --> 0:20:33.439 maybe there's a positive outcome for GDP. How are you 0:20:33.520 --> 0:20:34.600 viewing the election. 0:20:36.040 --> 0:20:38.919 Well, it's definitely, you know, it's a lot more uncertained. 0:20:38.920 --> 0:20:42.600 Obviously with you know, Kamala being nominated. I think with Biden, 0:20:42.680 --> 0:20:45.800 you know, the probability was you know, Trump victory for sure. 0:20:46.320 --> 0:20:49.360 So again more of a reason for these asymmetric risks. 0:20:49.760 --> 0:20:52.760 I think longer term, you know, where the opinion that 0:20:52.840 --> 0:20:56.600