1
00:00:02,520 --> 00:00:24,200
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:15,920 --> 00:00:21,640
Speaker 2: War, geopolitics, tariffs. How is an investor supposed to navigate

3
00:00:21,720 --> 00:00:26,600
Speaker 2: their way through an environment where the US bombs Iran's

4
00:00:26,680 --> 00:00:30,639
Speaker 2: nuclear sites, Israeli drone attacks have taken place in the

5
00:00:30,640 --> 00:00:34,920
Speaker 2: Middle East, as well as aircraft bombing raids. All of

6
00:00:34,960 --> 00:00:39,199
Speaker 2: this comes after months of noisy tariff announcements and walking

7
00:00:39,240 --> 00:00:45,080
Speaker 2: those back geopolitical wrangling. What are investors supposed to do

8
00:00:45,640 --> 00:00:49,440
Speaker 2: when a war breaks out? I'm Barry Dheltson on today's

9
00:00:49,520 --> 00:00:52,559
Speaker 2: edition of At the Money. We're going to discuss how

10
00:00:52,600 --> 00:00:57,000
Speaker 2: to manage your way through war, tariffs and all manner

11
00:00:57,160 --> 00:01:00,400
Speaker 2: of headline risks. To help us unpack all of this

12
00:01:00,440 --> 00:01:03,600
Speaker 2: and what it means for your portfolio, let's bring in

13
00:01:03,760 --> 00:01:08,840
Speaker 2: veteran markets journalist and CFA Sam Row. Sam's known for

14
00:01:08,959 --> 00:01:12,920
Speaker 2: his clear, data driven insights into markets and the economy.

15
00:01:13,600 --> 00:01:18,119
Speaker 2: He is a journalistic veteran who has worked at Forbes, Yahoo,

16
00:01:18,280 --> 00:01:23,520
Speaker 2: Business Insider, and Axios. His sub stack ticker was named

17
00:01:23,520 --> 00:01:27,080
Speaker 2: by the Society of Business Editors and Writers as the

18
00:01:27,120 --> 00:01:30,520
Speaker 2: best in Business for twenty twenty two. So Sam, let's

19
00:01:30,520 --> 00:01:34,360
Speaker 2: start with something you wrote recently. Quote the US stock

20
00:01:34,440 --> 00:01:39,680
Speaker 2: market has a long history of demonstrating resilience in the

21
00:01:39,720 --> 00:01:42,160
Speaker 2: face of major geopolitical risk events.

22
00:01:42,680 --> 00:01:47,840
Speaker 3: Explain that, Yeah, I mean it's every couple of years

23
00:01:47,880 --> 00:01:51,080
Speaker 3: or every couple of months. I think you and I,

24
00:01:51,440 --> 00:01:54,200
Speaker 3: or you and your clients and me and my readers

25
00:01:54,280 --> 00:01:57,640
Speaker 3: have the same kind of discussion. Some conflict breaks out

26
00:01:58,280 --> 00:02:00,840
Speaker 3: fallatilly it comes to the markets. What are we supposed

27
00:02:00,880 --> 00:02:04,000
Speaker 3: to do? And you know, of course, you know, as

28
00:02:04,000 --> 00:02:07,320
Speaker 3: a human being, this is very scary. As someone who

29
00:02:08,040 --> 00:02:14,119
Speaker 3: cares about or has friends and family connected to those events,

30
00:02:14,960 --> 00:02:18,240
Speaker 3: it's really distressing. And then you put your investor hat

31
00:02:18,280 --> 00:02:21,200
Speaker 3: on and think about, you know, what does history tell

32
00:02:21,280 --> 00:02:24,080
Speaker 3: us here? Now, obviously every event is going to be

33
00:02:24,160 --> 00:02:28,480
Speaker 3: slightly different, but history also tells us that the markets

34
00:02:28,639 --> 00:02:34,080
Speaker 3: seem to eventually look past this. Even with what's going

35
00:02:34,080 --> 00:02:36,440
Speaker 3: on in the Middle East right now. I think for

36
00:02:36,520 --> 00:02:39,839
Speaker 3: as long as we've been alive, there's been some permutation

37
00:02:40,040 --> 00:02:43,120
Speaker 3: of a Middle East conflict, and it's always been scary,

38
00:02:43,200 --> 00:02:47,960
Speaker 3: and there's always you know, secondary effects in the financial markets,

39
00:02:48,000 --> 00:02:51,120
Speaker 3: whether it's with oil prices or volatility and interest rates

40
00:02:51,120 --> 00:02:53,760
Speaker 3: and currencies and all these sort of things. And I

41
00:02:53,800 --> 00:02:55,840
Speaker 3: think for traders who are trying to weave in and

42
00:02:55,840 --> 00:02:57,920
Speaker 3: out of this. It's a big deal, and you really

43
00:02:57,919 --> 00:03:02,600
Speaker 3: should be paying close up a tension to every development here.

44
00:03:03,200 --> 00:03:05,880
Speaker 3: But you know, as someone who has to get somewhere

45
00:03:05,880 --> 00:03:08,560
Speaker 3: in terms of retirement and long term savings or if

46
00:03:08,600 --> 00:03:12,200
Speaker 3: you're saving for your college, your kid's college fund or something,

47
00:03:13,840 --> 00:03:17,480
Speaker 3: you have to wonder, you know, what does five years

48
00:03:17,480 --> 00:03:19,160
Speaker 3: out look like, what does ten years out look like?

49
00:03:19,200 --> 00:03:22,120
Speaker 3: What does even three years out look like? And you know,

50
00:03:22,160 --> 00:03:26,800
Speaker 3: when you see some of these reviews of various geopolitical

51
00:03:26,840 --> 00:03:30,080
Speaker 3: events in the past, there are some conflicts that go

52
00:03:30,120 --> 00:03:31,880
Speaker 3: on for a very long time and may or may

53
00:03:31,960 --> 00:03:35,000
Speaker 3: not have a sort of a longer term impact on

54
00:03:35,000 --> 00:03:37,760
Speaker 3: the financial market. But for the most part, the market

55
00:03:37,840 --> 00:03:40,560
Speaker 3: hits tend to be very brief. I think I saw

56
00:03:40,600 --> 00:03:44,440
Speaker 3: something from Deutsche Bank recently that reviewed something like thirty

57
00:03:44,880 --> 00:03:48,000
Speaker 3: geopolitical events of the last hundred years, and from the

58
00:03:48,000 --> 00:03:52,200
Speaker 3: beginning of the event that triggered, you know, the conflict

59
00:03:52,240 --> 00:03:54,200
Speaker 3: to the bottom of the S and B five hundred

60
00:03:54,640 --> 00:03:58,200
Speaker 3: on average, and the median stretches about fifteen days.

61
00:03:58,440 --> 00:04:03,240
Speaker 2: Fifteen trading days, essentially three weeks. So that's kind of interesting.

62
00:04:03,320 --> 00:04:05,760
Speaker 2: You you said something not too long ago that I

63
00:04:05,800 --> 00:04:09,520
Speaker 2: thought was intriguing, and I'm wondering if it was geared

64
00:04:09,560 --> 00:04:14,440
Speaker 2: to investors or traders. Stocks usually look past geopolitical events,

65
00:04:14,920 --> 00:04:18,159
Speaker 2: but these events shouldn't be ignored. How do you have

66
00:04:18,200 --> 00:04:18,919
Speaker 2: it both ways?

67
00:04:19,040 --> 00:04:22,400
Speaker 3: Absolutely? You know, I think I think one of the

68
00:04:22,520 --> 00:04:27,280
Speaker 3: mistakes that a long term investor can make is to

69
00:04:27,320 --> 00:04:30,279
Speaker 3: try to pretend like nothing else is happening in the world.

70
00:04:30,480 --> 00:04:32,560
Speaker 3: I mean, of course, you know this stuff matters, and

71
00:04:33,720 --> 00:04:35,520
Speaker 3: you know we're going to fall news in our personal

72
00:04:35,560 --> 00:04:38,920
Speaker 3: lives and all that kind of stuff. But you know,

73
00:04:39,160 --> 00:04:42,000
Speaker 3: sometimes we want to just ignore all this stuff, especially

74
00:04:42,000 --> 00:04:45,320
Speaker 3: if we have, you know, fifteen twenty thirty years until

75
00:04:45,320 --> 00:04:48,400
Speaker 3: we actually have to begin selling these stocks. But I

76
00:04:48,400 --> 00:04:53,640
Speaker 3: don't know if that's totally healthy, because maybe the study

77
00:04:53,720 --> 00:04:58,240
Speaker 3: says fifteen days till the market bottoms, but the study

78
00:04:58,279 --> 00:05:00,599
Speaker 3: might also have a range of out comes where it

79
00:05:00,680 --> 00:05:02,600
Speaker 3: might take three years till the market bottoms.

80
00:05:02,720 --> 00:05:06,120
Speaker 2: Fifteen days is the average, but that doesn't necessarily mean

81
00:05:06,560 --> 00:05:08,799
Speaker 2: each time it's going to be fifteen days exactly.

82
00:05:08,880 --> 00:05:10,760
Speaker 3: So I think, you know, you definitely want to be

83
00:05:10,800 --> 00:05:13,120
Speaker 3: mindful of the possibility that things can get worse, like

84
00:05:13,200 --> 00:05:15,880
Speaker 3: even with what's happening right now. The markets seem to

85
00:05:15,920 --> 00:05:19,760
Speaker 3: have bounced back pretty quickly all the time highs, all

86
00:05:19,760 --> 00:05:22,400
Speaker 3: time highs. We're within reach of all time highs. But

87
00:05:22,440 --> 00:05:24,400
Speaker 3: that doesn't mean, you know, there isn't going to be

88
00:05:24,400 --> 00:05:27,480
Speaker 3: another flare up, you know, tomorrow, or next week or

89
00:05:27,560 --> 00:05:30,120
Speaker 3: in a couple of months. So I think you have

90
00:05:30,160 --> 00:05:32,720
Speaker 3: to be mindful of the fact that this stuff is

91
00:05:32,760 --> 00:05:35,960
Speaker 3: going on in the world. And then you go back

92
00:05:35,960 --> 00:05:38,200
Speaker 3: to the history and say, hey, the odds actually say

93
00:05:38,279 --> 00:05:42,000
Speaker 3: people want de escalation. People would rather not have violence

94
00:05:42,040 --> 00:05:46,000
Speaker 3: out there, and that involves all parties. And so as

95
00:05:46,040 --> 00:05:47,920
Speaker 3: long as there are more people who would rather not

96
00:05:48,000 --> 00:05:51,279
Speaker 3: have violence than one violence, I think there's some gravity

97
00:05:51,640 --> 00:05:57,120
Speaker 3: toward the escalation and a pullback and violent activity.

98
00:05:57,240 --> 00:06:01,240
Speaker 2: So let's delve into the history of we'll deal with

99
00:06:01,320 --> 00:06:05,280
Speaker 2: tariffs in a little bit. Let's talk about war. There's

100
00:06:05,320 --> 00:06:10,160
Speaker 2: a history of the last century of small wars, large wars,

101
00:06:10,560 --> 00:06:14,520
Speaker 2: world wars. We have World War One and World War Two,

102
00:06:14,560 --> 00:06:17,480
Speaker 2: we have the Korean War of Vietnam, Iraq in nineteen

103
00:06:17,560 --> 00:06:20,880
Speaker 2: ninety one, and then Afghanistan and Iraq and three and

104
00:06:20,960 --> 00:06:24,880
Speaker 2: today it's Imran, which seems to have been building. I

105
00:06:24,920 --> 00:06:28,080
Speaker 2: don't know since nineteen seventy nine, when the hostages were

106
00:06:28,200 --> 00:06:35,600
Speaker 2: taken following the Iranian Revolution. How should investors, not in

107
00:06:35,640 --> 00:06:39,880
Speaker 2: their personal or family life, but as stewards of capital,

108
00:06:41,360 --> 00:06:47,919
Speaker 2: contextualize the dangers of war and the dangers of being

109
00:06:47,960 --> 00:06:50,200
Speaker 2: frightened out of the market because of war.

110
00:06:51,520 --> 00:06:53,560
Speaker 3: You know, it's I was just having a conversation about

111
00:06:53,560 --> 00:06:56,000
Speaker 3: this the other day about you know, this whole matter

112
00:06:56,080 --> 00:07:00,480
Speaker 3: of you turn on the TV and someone will tell you, well,

113
00:07:00,600 --> 00:07:04,680
Speaker 3: uncertainty is elevated today, uncertainty. It doesn't make sense that

114
00:07:04,760 --> 00:07:07,159
Speaker 3: the market's so high because of all this uncertainty that's

115
00:07:07,200 --> 00:07:12,080
Speaker 3: out there. Well, uncertainty just defines the nature of investing

116
00:07:12,120 --> 00:07:14,040
Speaker 3: in the stock market. Right, if there was no uncertainty,

117
00:07:14,080 --> 00:07:15,160
Speaker 3: you wouldn't get a great return.

118
00:07:15,240 --> 00:07:17,080
Speaker 2: Right if you want, if you want certain returns, you

119
00:07:17,120 --> 00:07:20,480
Speaker 2: can get four point something on the ten year treasury.

120
00:07:20,200 --> 00:07:23,160
Speaker 3: Right exactly. But I was just thinking about, you know,

121
00:07:24,280 --> 00:07:27,200
Speaker 3: the history of conflicts, especially you know, in the Middle East,

122
00:07:27,560 --> 00:07:31,840
Speaker 3: and I remember when the Gulf War started in nineteen

123
00:07:31,920 --> 00:07:35,880
Speaker 3: ninety and you know, I was eight years old and

124
00:07:36,520 --> 00:07:38,920
Speaker 3: I was looking at the data and apparently that was

125
00:07:38,960 --> 00:07:42,200
Speaker 3: a pretty rough time, both in the oil markets, and

126
00:07:42,040 --> 00:07:44,000
Speaker 3: in the financial markets, and it was a tough time

127
00:07:44,040 --> 00:07:47,440
Speaker 3: to to be an investor, you know, going through all

128
00:07:47,440 --> 00:07:49,600
Speaker 3: this volatility, because you know, maybe this is it, maybe

129
00:07:49,600 --> 00:07:53,960
Speaker 3: this is the end of of of all that. But

130
00:07:54,000 --> 00:07:55,760
Speaker 3: then you know it's it's not long after that you

131
00:07:55,840 --> 00:07:58,280
Speaker 3: realize that's actually an incredible time to start putting money

132
00:07:58,280 --> 00:08:01,280
Speaker 3: into sam Rose five pointy. I wish my parents put

133
00:08:01,320 --> 00:08:03,320
Speaker 3: money into a five twenty nine plant at that time,

134
00:08:03,800 --> 00:08:07,080
Speaker 3: but they didn't. But again, you just look backwards and

135
00:08:08,440 --> 00:08:11,760
Speaker 3: if there's any if there's a more powerful force than

136
00:08:12,120 --> 00:08:16,080
Speaker 3: geopolitical tensions, it's going to be everyone's desire to want

137
00:08:16,080 --> 00:08:19,840
Speaker 3: things to be better. And even from like a business perspective,

138
00:08:20,520 --> 00:08:22,840
Speaker 3: you know, they want better technologies, they want things to

139
00:08:22,880 --> 00:08:25,920
Speaker 3: be cheaper, they want things to be faster, and that

140
00:08:26,080 --> 00:08:29,760
Speaker 3: force that's driving earnings and profits and productivity and the

141
00:08:29,800 --> 00:08:34,360
Speaker 3: economy and employment and quality of life, standards of living

142
00:08:34,360 --> 00:08:37,199
Speaker 3: and all this stuff, you know, will continue to be

143
00:08:37,240 --> 00:08:39,520
Speaker 3: the dominant force in the markets. So I think that's

144
00:08:39,520 --> 00:08:41,439
Speaker 3: what people miss. Like if you were to be able

145
00:08:41,480 --> 00:08:43,760
Speaker 3: to if you could put all that into like a

146
00:08:43,800 --> 00:08:46,720
Speaker 3: pie chart. Sure you have these flare ups and you know,

147
00:08:46,800 --> 00:08:51,280
Speaker 3: geopolitical events, but the dominant forces, you know, remain.

148
00:08:52,320 --> 00:08:55,720
Speaker 2: That makes a lot of sense. You mentioned oil earlier

149
00:08:56,280 --> 00:08:59,679
Speaker 2: in the nineteen nineties, and especially in the nineteen seventies.

150
00:09:00,160 --> 00:09:04,239
Speaker 2: Anytime we saw a Mid East tension, that always translated

151
00:09:04,280 --> 00:09:08,640
Speaker 2: into higher oil prices, which then pushed into CPI inflation

152
00:09:09,200 --> 00:09:13,000
Speaker 2: driving it higher. Are we in the same set of

153
00:09:13,080 --> 00:09:18,320
Speaker 2: circumstances today? Ever since the new fracking technologies in the

154
00:09:18,360 --> 00:09:22,880
Speaker 2: two thousands and the United States just cranking out oil

155
00:09:22,920 --> 00:09:25,920
Speaker 2: for the past I don't know, ten twelve years at

156
00:09:26,360 --> 00:09:31,200
Speaker 2: old time record rates. Does the US lesser dependence on

157
00:09:31,280 --> 00:09:36,839
Speaker 2: Middle Eastern oil make it more or less likely that

158
00:09:36,960 --> 00:09:39,400
Speaker 2: Middle East flare ups are not going to be as

159
00:09:39,440 --> 00:09:41,240
Speaker 2: inflationary as they once were.

160
00:09:41,360 --> 00:09:44,160
Speaker 3: I think it's going to be not as inflationary as

161
00:09:44,160 --> 00:09:47,640
Speaker 3: they once were. One of my favorite metrics that's out

162
00:09:47,640 --> 00:09:52,679
Speaker 3: there is energy consumption spending as a percentage of personal

163
00:09:52,720 --> 00:09:56,080
Speaker 3: consumption expenditures, and that was somewhere that was floating around

164
00:09:56,080 --> 00:09:58,559
Speaker 3: at about ten percent. Energy spending as a percentage of

165
00:09:58,640 --> 00:10:02,360
Speaker 3: personal consumption household budgets, yeah, household budgets, Yeah, about ten

166
00:10:02,400 --> 00:10:06,440
Speaker 3: percent in the late seventies, early eighties, and that's that

167
00:10:06,559 --> 00:10:09,720
Speaker 3: steadily been declining and now it's closer to somewhere between

168
00:10:09,720 --> 00:10:10,520
Speaker 3: three and four percent.

169
00:10:10,600 --> 00:10:11,199
Speaker 2: That's amazing.

170
00:10:11,320 --> 00:10:15,360
Speaker 3: Yeah, so energy, the direct spending on energy has has

171
00:10:15,440 --> 00:10:19,160
Speaker 3: shrunk us significantly. And then past that, like you know,

172
00:10:20,360 --> 00:10:23,960
Speaker 3: you know, the car you drive today is far more

173
00:10:24,000 --> 00:10:26,640
Speaker 3: fuel efficient than the car you drove, you know, twenty

174
00:10:26,720 --> 00:10:30,280
Speaker 3: years ago. So fuel economy has improved for you know,

175
00:10:30,280 --> 00:10:32,640
Speaker 3: one of the biggest purchases of energy, which is gasoline

176
00:10:32,640 --> 00:10:33,120
Speaker 3: for cars.

177
00:10:33,160 --> 00:10:35,880
Speaker 2: To say nothing about hybrids and evs.

178
00:10:35,559 --> 00:10:40,480
Speaker 3: Hybrids, evs. Your refrigerator is more energy efficient, the ac

179
00:10:40,679 --> 00:10:44,080
Speaker 3: is more energy efficient. The the.

180
00:10:46,360 --> 00:10:48,560
Speaker 2: We switched the natural gas from oil, I don't know

181
00:10:48,640 --> 00:10:51,760
Speaker 2: ten years ago. It costs a fraction of what oil

182
00:10:51,840 --> 00:10:55,200
Speaker 2: costs and and pollutes less. And you know, as much

183
00:10:55,240 --> 00:10:59,160
Speaker 2: as people say natural gas is a problem, it's certainly

184
00:10:59,360 --> 00:11:02,920
Speaker 2: much better than coal, right, and better than oil.

185
00:11:02,840 --> 00:11:06,320
Speaker 3: Right right right. Having said that, it can certainly have

186
00:11:06,360 --> 00:11:11,320
Speaker 3: a psychological effect on consumers, especially, we can spend all

187
00:11:11,360 --> 00:11:13,640
Speaker 3: day talking about how I get, you know, twenty five

188
00:11:13,720 --> 00:11:16,000
Speaker 3: miles per gallon now as opposed to fifteen when I

189
00:11:16,040 --> 00:11:18,800
Speaker 3: first got my driver's license. But when you see gas

190
00:11:18,840 --> 00:11:21,959
Speaker 3: prices go from two fifty to three twenty five in

191
00:11:22,040 --> 00:11:24,640
Speaker 3: a very short period of time. That affects you because

192
00:11:24,679 --> 00:11:28,480
Speaker 3: that's immediately coming out of you know, whatever your Starbucks

193
00:11:28,520 --> 00:11:29,200
Speaker 3: budget might be.

194
00:11:29,640 --> 00:11:34,640
Speaker 2: Huh, really interesting. So we've seen an argument pushing for

195
00:11:35,280 --> 00:11:38,920
Speaker 2: home shoring. We'll bring these factories back to the US,

196
00:11:38,960 --> 00:11:42,480
Speaker 2: We'll create all these new jobs. Is that realistic in

197
00:11:42,520 --> 00:11:47,960
Speaker 2: the modern age of advanced automation, new technologies, artificial intelligence,

198
00:11:48,000 --> 00:11:51,400
Speaker 2: and robotics. Are we really going to fill factories with

199
00:11:51,559 --> 00:11:54,720
Speaker 2: workers or are we going to be filling new US

200
00:11:54,800 --> 00:11:57,280
Speaker 2: based factories with a whole bunch of robots.

201
00:11:57,440 --> 00:12:01,840
Speaker 3: Yeah? I think I think there's several ways to answer

202
00:12:01,840 --> 00:12:04,800
Speaker 3: that question, and in every way it's going to be No,

203
00:12:04,920 --> 00:12:06,840
Speaker 3: We're not going to have a ton of home shoring.

204
00:12:07,080 --> 00:12:09,040
Speaker 3: We might have some at the margin. Everything happens at

205
00:12:09,080 --> 00:12:11,880
Speaker 3: the margins, right, some people, some people who are saving

206
00:12:12,559 --> 00:12:15,680
Speaker 3: you know, point zero zero one percentage point. You know,

207
00:12:15,760 --> 00:12:19,640
Speaker 3: manufacturing China might figure out a way to move to

208
00:12:19,960 --> 00:12:23,440
Speaker 3: the US. But for the most part, it's not gonna

209
00:12:23,480 --> 00:12:26,440
Speaker 3: be that much cheaper to move your manufacturing to the

210
00:12:26,559 --> 00:12:28,800
Speaker 3: US just because it was so expensive in China. You're

211
00:12:28,800 --> 00:12:31,280
Speaker 3: gonna move to Vietnam, You're gonna move to Mexico, You're

212
00:12:31,280 --> 00:12:33,640
Speaker 3: gonna move to Indonesia and all these other places where

213
00:12:34,600 --> 00:12:37,840
Speaker 3: it might be more expensive than you know, China for instance,

214
00:12:37,880 --> 00:12:39,760
Speaker 3: but it's still going to be cheaper than the US.

215
00:12:40,160 --> 00:12:43,319
Speaker 3: So I think that's one of the unintended consequences of that.

216
00:12:43,600 --> 00:12:45,880
Speaker 3: But as far as like what you're saying about AI

217
00:12:45,960 --> 00:12:49,199
Speaker 3: and machinery and robotics and all this stuff, yeah, absolutely

218
00:12:49,280 --> 00:12:54,560
Speaker 3: that's already happening. And so it's a question uh that

219
00:12:55,240 --> 00:12:56,520
Speaker 3: like I don't know, I don't know if you can

220
00:12:56,520 --> 00:12:59,559
Speaker 3: fight that, right, like, unless unless you decide that unless

221
00:12:59,559 --> 00:13:02,079
Speaker 3: there's a po I'll see that decides that there's a

222
00:13:02,120 --> 00:13:04,120
Speaker 3: limitation on how many robots you can have in your

223
00:13:04,120 --> 00:13:06,480
Speaker 3: factories are or I mean it's this is not we're

224
00:13:06,480 --> 00:13:10,319
Speaker 3: not even talking about production manufacturing anymore, or goods production.

225
00:13:10,480 --> 00:13:13,640
Speaker 3: We're also talking about services, right everyone in the service.

226
00:13:13,760 --> 00:13:15,520
Speaker 3: It's like AI has gotten to the point where it's

227
00:13:15,559 --> 00:13:18,760
Speaker 3: not just affecting the assembly line. It's affecting people who

228
00:13:19,000 --> 00:13:22,080
Speaker 3: go into an office and you know, go to meetings

229
00:13:22,200 --> 00:13:25,839
Speaker 3: and strategize for their you know, their marketing departments or

230
00:13:26,040 --> 00:13:28,200
Speaker 3: you know, if they work in banking, you know, suddenly

231
00:13:28,360 --> 00:13:30,440
Speaker 3: you can cut a couple steps out of you know,

232
00:13:30,520 --> 00:13:33,000
Speaker 3: putting numbers into an Excel spreadsheet.

233
00:13:33,080 --> 00:13:38,199
Speaker 2: Really really interesting. So last question, how can investors balance

234
00:13:38,920 --> 00:13:44,760
Speaker 2: staying invested against all of these geopolitical risks, war risks,

235
00:13:44,920 --> 00:13:50,280
Speaker 2: trade war risks, tariffs, and just unexpected escalations. How do

236
00:13:50,360 --> 00:13:54,000
Speaker 2: they balance the need to stay invested through this against

237
00:13:54,080 --> 00:13:58,920
Speaker 2: the potential downside risks of all these headline.

238
00:13:58,559 --> 00:14:00,400
Speaker 3: You got to study the history, and you got to

239
00:14:00,400 --> 00:14:02,800
Speaker 3: look at the data, and you got to remember how

240
00:14:02,840 --> 00:14:06,240
Speaker 3: bad things were at various points in history. Me personally,

241
00:14:06,320 --> 00:14:08,640
Speaker 3: I like to keep a journal when bad things happen.

242
00:14:09,440 --> 00:14:12,720
Speaker 3: I wish I had done this more actively during the

243
00:14:12,720 --> 00:14:17,800
Speaker 3: financial crisis, but I didn't. I certainly did during COVID

244
00:14:18,360 --> 00:14:20,720
Speaker 3: and something that I mean, you know, you can sort

245
00:14:20,760 --> 00:14:23,720
Speaker 3: of get this by proxy through reading a really deep

246
00:14:23,800 --> 00:14:29,760
Speaker 3: account of various historical events. But reading my own memories

247
00:14:30,560 --> 00:14:34,000
Speaker 3: or my own real time accounts of something like COVID

248
00:14:34,040 --> 00:14:37,480
Speaker 3: reminded me that it always feels like the end of

249
00:14:37,560 --> 00:14:41,080
Speaker 3: the world, and it lasts so much longer than you expected. Like,

250
00:14:41,400 --> 00:14:43,840
Speaker 3: you know, I have you know, fifty pages here where

251
00:14:43,840 --> 00:14:46,080
Speaker 3: it's just like day after day after day. You know,

252
00:14:46,120 --> 00:14:48,480
Speaker 3: we live in a new era where we're never going

253
00:14:48,560 --> 00:14:50,240
Speaker 3: to be in the same office again, We're never going

254
00:14:50,320 --> 00:14:52,960
Speaker 3: to meet anybody ever again, and all these kinds of things,

255
00:14:53,360 --> 00:14:55,040
Speaker 3: And you know, it's something I like to do every

256
00:14:55,040 --> 00:14:56,960
Speaker 3: once in a while, especially when things are calm.

257
00:14:57,360 --> 00:14:57,560
Speaker 2: Right.

258
00:14:58,000 --> 00:14:59,880
Speaker 3: It's one thing to be in the middle of a

259
00:15:00,040 --> 00:15:02,240
Speaker 3: crisis and then study the history of crises and it's

260
00:15:02,240 --> 00:15:05,000
Speaker 3: like no, no, no, no, no, this time it's different. But when

261
00:15:05,000 --> 00:15:07,280
Speaker 3: things are calm, that's probably actually the best time to

262
00:15:07,360 --> 00:15:11,440
Speaker 3: go back and remember things like, well, here here's another

263
00:15:11,600 --> 00:15:14,080
Speaker 3: I'm sorry to sort of keeping. Oh no, I'm interested

264
00:15:14,240 --> 00:15:17,840
Speaker 3: digress a little bit. I got a notification on Facebook

265
00:15:17,880 --> 00:15:22,240
Speaker 3: saying that, uh, I think it was exactly fifteen years

266
00:15:22,280 --> 00:15:26,400
Speaker 3: ago I submitted an idea for fixing the deep Water

267
00:15:26,480 --> 00:15:30,640
Speaker 3: Horizon disaster. I don't know if you're if people remember this, but.

268
00:15:31,480 --> 00:15:35,680
Speaker 2: That was Bpmico and Feinberg oversaw this. Yeah, yeah, I

269
00:15:35,720 --> 00:15:36,280
Speaker 2: recall that.

270
00:15:36,360 --> 00:15:39,120
Speaker 3: Yeah yeah, Gulf of Mexico and oil wall blows up

271
00:15:39,440 --> 00:15:42,320
Speaker 3: and it's spewing oil into the Gulf of Mexico. Do

272
00:15:42,360 --> 00:15:45,040
Speaker 3: you remember how long it was spewing oil into the gulf?

273
00:15:45,200 --> 00:15:48,720
Speaker 3: Sixty days some crazy three months? Yeah, ninety days, wow,

274
00:15:48,800 --> 00:15:50,920
Speaker 3: three months that they were eventually able to put a

275
00:15:50,960 --> 00:15:52,720
Speaker 3: cap in it. And it took I think it took

276
00:15:52,720 --> 00:15:55,560
Speaker 3: another two or three months to officially say this thing

277
00:15:55,640 --> 00:15:59,880
Speaker 3: was sealed. Right, It's insane how long this went on.

278
00:16:00,120 --> 00:16:03,480
Speaker 3: Four But you know, everyone's memory is gonna be, oh, well,

279
00:16:03,680 --> 00:16:05,520
Speaker 3: it was something in the past. It's like I remember

280
00:16:05,520 --> 00:16:08,280
Speaker 3: it being three months. Oh, I remember being it could

281
00:16:08,320 --> 00:16:10,120
Speaker 3: have lasted longer than two weeks.

282
00:16:10,200 --> 00:16:12,440
Speaker 2: But when you're in the moment in the humans live

283
00:16:12,440 --> 00:16:16,640
Speaker 2: in the here and now, and when it's happening, especially

284
00:16:16,840 --> 00:16:21,760
Speaker 2: day after day after day. It's funny you mentioned journaling

285
00:16:22,000 --> 00:16:26,560
Speaker 2: during these things. I was essentially ended up writing Bail

286
00:16:26,600 --> 00:16:30,160
Speaker 2: Out Nation in real time in public on the blog.

287
00:16:31,200 --> 00:16:34,960
Speaker 2: I recall having a conversation with my trading desk back then,

288
00:16:35,680 --> 00:16:39,440
Speaker 2: who were just like exhausted from the volatility. Everybody was

289
00:16:39,440 --> 00:16:43,440
Speaker 2: making money, but it was exhausting. And there's this fantastic

290
00:16:43,560 --> 00:16:47,120
Speaker 2: line in Apocalypse Now. Do you remember the Charlie Don't

291
00:16:47,160 --> 00:16:53,960
Speaker 2: Surf scene where Dval goes up to Martin Sheen and

292
00:16:54,000 --> 00:16:58,480
Speaker 2: he says, with this wistfulness, you know, Sun, someday this

293
00:16:58,560 --> 00:17:02,360
Speaker 2: war's gonna end, like disappointed, and when you're in the

294
00:17:02,360 --> 00:17:04,440
Speaker 2: middle of it, it feels like it's never going to end.

295
00:17:04,960 --> 00:17:07,479
Speaker 2: Financial crisis is never going to end. Deep Water Horizon,

296
00:17:07,480 --> 00:17:09,520
Speaker 2: it's not going to end. The tariffs war are not

297
00:17:09,520 --> 00:17:12,360
Speaker 2: going to end. But we always seem to come out

298
00:17:12,359 --> 00:17:13,240
Speaker 2: the other side.

299
00:17:13,560 --> 00:17:18,400
Speaker 3: Yeah. And again, we just came out of COVID like we.

300
00:17:18,280 --> 00:17:20,800
Speaker 2: Were really felt like it was never going to end.

301
00:17:20,880 --> 00:17:25,320
Speaker 3: We were literally living a science fiction movie, like it's

302
00:17:25,400 --> 00:17:27,400
Speaker 3: there's no there's no amount of money you can throw

303
00:17:27,440 --> 00:17:29,520
Speaker 3: out this problem, like you just have to pray that

304
00:17:29,640 --> 00:17:31,639
Speaker 3: the science is going to be good enough that we

305
00:17:31,720 --> 00:17:33,399
Speaker 3: figure out how to come up with a vaccine and

306
00:17:33,440 --> 00:17:36,800
Speaker 3: contain this thing. But the amount, the scale of death

307
00:17:37,960 --> 00:17:38,800
Speaker 3: was unbelievable.

308
00:17:39,000 --> 00:17:41,960
Speaker 2: Yeah, millions, millions of people America and tens of millions

309
00:17:41,920 --> 00:17:42,840
Speaker 2: around the world.

310
00:17:43,080 --> 00:17:45,320
Speaker 3: Yeah, and yet this, you know, the economy has never

311
00:17:45,359 --> 00:17:47,719
Speaker 3: been stronger and the stock market has never been higher.

312
00:17:48,080 --> 00:17:51,560
Speaker 3: So I think, I think, listen, it's not to sort

313
00:17:51,560 --> 00:17:55,000
Speaker 3: of necessarily downplay what's going on in terms of you

314
00:17:55,280 --> 00:17:57,520
Speaker 3: and it's not just you know, uh, eron. We still

315
00:17:57,560 --> 00:17:59,800
Speaker 3: have a war going on between Russia and Ukraine. It's

316
00:17:59,840 --> 00:18:01,040
Speaker 3: not forget about that, right.

317
00:18:00,920 --> 00:18:03,159
Speaker 2: So it's the Middle East, it's Russian Ukraine. There are

318
00:18:03,160 --> 00:18:05,879
Speaker 2: other hotspots going on Africa as well.

319
00:18:05,680 --> 00:18:07,760
Speaker 3: Yep, and there's gonna be something else that's gonna flair up.

320
00:18:08,000 --> 00:18:11,520
Speaker 3: That's inevitable. But you know, again, I think not the

321
00:18:11,640 --> 00:18:15,520
Speaker 3: downplan of it. But to offer some perspective, it might

322
00:18:15,560 --> 00:18:18,400
Speaker 3: help to go back and just sort of remember those

323
00:18:18,400 --> 00:18:19,880
Speaker 3: times when things were really tough.

324
00:18:20,240 --> 00:18:26,119
Speaker 2: So to wrap up, we experience these geopolitical disruptions in

325
00:18:26,160 --> 00:18:30,399
Speaker 2: a form of duality. As human beings. We are aware

326
00:18:30,440 --> 00:18:35,119
Speaker 2: of the emotional turmoil of the toll in human suffering

327
00:18:35,720 --> 00:18:41,440
Speaker 2: and just how psychologically damaging all these horrific events are.

328
00:18:41,560 --> 00:18:43,520
Speaker 2: And yet at the same time we have to be

329
00:18:43,640 --> 00:18:48,520
Speaker 2: good stewards of our own capital and recognize that this

330
00:18:48,680 --> 00:18:52,080
Speaker 2: too shall pass. I'm Barry Riudt Halts, and this is

331
00:18:52,160 --> 00:19:02,399
Speaker 2: Bloomberg's at the Money. You know you talk about