1 00:00:00,000 --> 00:00:02,320 Speaker 1: All right, let's bring in a very Riddles Spoomberg opinion, 2 00:00:02,440 --> 00:00:04,520 Speaker 1: host of Masters in Business and of course founder of 3 00:00:04,600 --> 00:00:08,240 Speaker 1: Riddle's Wealth Management. Very great to have you on the 4 00:00:08,280 --> 00:00:11,959 Speaker 1: first time since we got an election results, and really 5 00:00:12,000 --> 00:00:14,920 Speaker 1: the first time since that long long count, and we've 6 00:00:14,960 --> 00:00:18,240 Speaker 1: seen markets churn both on that and of course fiser news. 7 00:00:18,239 --> 00:00:20,440 Speaker 1: How are you supposed to read these markets? What are 8 00:00:20,440 --> 00:00:24,360 Speaker 1: they pricing in? That's a really good Welcome to the 9 00:00:24,400 --> 00:00:26,960 Speaker 1: Bloomer Markets Podcast. I'm All Sweeney, along with my co 10 00:00:27,040 --> 00:00:29,560 Speaker 1: host of Quiz. Every business day we bring you interviews 11 00:00:29,600 --> 00:00:33,760 Speaker 1: from CEOs, market rows, and Bloomberg experts, along with essential 12 00:00:33,840 --> 00:00:37,680 Speaker 1: marketing news. Kind the Bloomberg Markets Podcast on Apple podcast 13 00:00:37,880 --> 00:00:41,160 Speaker 1: or wherever you on the podcast and on Bloomer dot com. 14 00:00:41,159 --> 00:00:45,479 Speaker 1: The Democrats ruining both well. The tradeoff is we're likely 15 00:00:45,560 --> 00:00:49,240 Speaker 1: to see much more fiscal stimulus, but we're also likely 16 00:00:49,280 --> 00:00:52,040 Speaker 1: to see somewhat higher taxes and and that's quite a 17 00:00:53,080 --> 00:00:57,760 Speaker 1: that's quite a challenge. Um right now, the assumption seems 18 00:00:57,800 --> 00:00:59,680 Speaker 1: to be that we're going to have some form of 19 00:00:59,720 --> 00:01:04,080 Speaker 1: DIVI I did government and arguably that's not the worst 20 00:01:04,080 --> 00:01:07,880 Speaker 1: situation under normal times for the markets. I will say 21 00:01:08,560 --> 00:01:11,560 Speaker 1: in the midst of an emergency or a crisis like 22 00:01:11,600 --> 00:01:16,080 Speaker 1: a pandemic. You do want to see cooperation across the all. 23 00:01:16,200 --> 00:01:19,480 Speaker 1: You do want to see both parties try and working together. 24 00:01:20,000 --> 00:01:23,440 Speaker 1: I have said on the show before, I am shocked 25 00:01:23,520 --> 00:01:25,920 Speaker 1: that we have not gotten a follow through to the 26 00:01:25,959 --> 00:01:31,360 Speaker 1: stimulus from the first quarter heading into the election, and 27 00:01:31,440 --> 00:01:34,840 Speaker 1: now we've been hearing noise that the Trump administration has 28 00:01:34,880 --> 00:01:38,880 Speaker 1: no interest in pursuing it between now and and the 29 00:01:40,040 --> 00:01:44,760 Speaker 1: formal inauguration on January, So the economy could get a 30 00:01:44,760 --> 00:01:48,280 Speaker 1: little dicey over the next two months. Right. In fact, 31 00:01:48,360 --> 00:01:51,160 Speaker 1: the latest just out for Marcella Wilson saying that the 32 00:01:51,160 --> 00:01:54,360 Speaker 1: Trump administration is actually stepping back, according to people familiar 33 00:01:54,400 --> 00:01:56,840 Speaker 1: with the situation, and that's leaving it up to you know, 34 00:01:56,840 --> 00:02:00,120 Speaker 1: Mitch McConnell and Nancy Pelosi, which really is not are 35 00:02:00,120 --> 00:02:03,800 Speaker 1: you consoling at all? Nancy Pelosi wanting you know, something 36 00:02:03,840 --> 00:02:07,360 Speaker 1: like two point four trillion dollars and Ms McConnell doesn't 37 00:02:07,360 --> 00:02:12,679 Speaker 1: even want a trillion. Really, that's a huge, huge difference. Barry, Yes, yeah, 38 00:02:12,680 --> 00:02:15,760 Speaker 1: well a trillion dollars, go figure, it's a lot of money. 39 00:02:15,880 --> 00:02:20,320 Speaker 1: And so it makes those two races in Georgia really 40 00:02:20,360 --> 00:02:24,880 Speaker 1: really significant. I think while everybody is looking in the 41 00:02:24,880 --> 00:02:28,679 Speaker 1: wrong direction, we're all looking at this this all the 42 00:02:28,880 --> 00:02:33,360 Speaker 1: silly litigation trying to fight the uh the results. I 43 00:02:33,400 --> 00:02:36,520 Speaker 1: think the legal team of the Trump administration is now 44 00:02:37,040 --> 00:02:41,360 Speaker 1: over twelve um or arguably one for thirteen if you 45 00:02:41,480 --> 00:02:44,800 Speaker 1: count moving ten feet away to six ft away as 46 00:02:44,840 --> 00:02:49,239 Speaker 1: a victory. But other than that, you know, courts don't 47 00:02:49,280 --> 00:02:51,840 Speaker 1: fool around you when you're there as an officer of 48 00:02:51,880 --> 00:02:54,919 Speaker 1: the court, as an attorney on either side, and there 49 00:02:54,960 --> 00:02:57,280 Speaker 1: are all sorts of rules. You can't what you could 50 00:02:57,280 --> 00:03:00,600 Speaker 1: get away with on Fox News, you can't get away 51 00:03:00,639 --> 00:03:02,800 Speaker 1: with in front of a judge and say there was fraud, 52 00:03:02,919 --> 00:03:06,119 Speaker 1: and they ask you for evidence, and if you don't 53 00:03:06,200 --> 00:03:09,679 Speaker 1: have any, you're putting your license in your career at risk. 54 00:03:10,240 --> 00:03:16,079 Speaker 1: And so the track record has been pretty weak for 55 00:03:16,080 --> 00:03:20,000 Speaker 1: for all these broad claims of nationwide fraud. So far 56 00:03:20,080 --> 00:03:23,720 Speaker 1: there's no evidence, and the companies involved, some of the 57 00:03:23,800 --> 00:03:27,280 Speaker 1: law firms involved, to putting themselves at risk. Yeah, I 58 00:03:27,320 --> 00:03:30,040 Speaker 1: mean I guess, um, I guess they're taking the business 59 00:03:30,040 --> 00:03:32,320 Speaker 1: for now. Barry. When you talk to you know, your 60 00:03:32,360 --> 00:03:36,480 Speaker 1: clients and also some of your wealthy investor friends, What 61 00:03:36,520 --> 00:03:38,360 Speaker 1: are they saying to you about the situation. I presume 62 00:03:38,440 --> 00:03:41,720 Speaker 1: that they're pretty happy with everything, and except obviously for 63 00:03:41,800 --> 00:03:44,840 Speaker 1: the coronavirus still raging around the world. Well, those who 64 00:03:45,400 --> 00:03:47,760 Speaker 1: have sort of stepped away from the markets are are 65 00:03:47,840 --> 00:03:50,440 Speaker 1: not exactly happy. And we've seen a number of hedge 66 00:03:50,440 --> 00:03:53,640 Speaker 1: funds and others sort of take the let's wait until 67 00:03:53,680 --> 00:03:57,360 Speaker 1: the dust clears, which is turns out not to be 68 00:03:58,120 --> 00:04:02,360 Speaker 1: a great decision at least this time around. Generally speaking, 69 00:04:02,480 --> 00:04:06,720 Speaker 1: the expectation is that markets are going to continue doing 70 00:04:06,760 --> 00:04:10,520 Speaker 1: what they're doing regardless of what happens with the election. 71 00:04:10,840 --> 00:04:14,560 Speaker 1: We we've noticed this, you know, throughout history, whether it 72 00:04:14,640 --> 00:04:19,039 Speaker 1: was Pearl Harbor or JFK assassination or you know, go 73 00:04:19,040 --> 00:04:22,760 Speaker 1: go down the list of of earth shaking events, markets 74 00:04:22,760 --> 00:04:25,120 Speaker 1: have a tendency to wobble for a little bit and 75 00:04:25,160 --> 00:04:27,200 Speaker 1: then just go right back to what they were doing. 76 00:04:27,760 --> 00:04:33,440 Speaker 1: So personally, I'm looking forward to the noise levels coming down. 77 00:04:33,600 --> 00:04:38,680 Speaker 1: I was kind of rooting in after that election for Okay, 78 00:04:38,720 --> 00:04:40,719 Speaker 1: now we're done with politics, can we get back to 79 00:04:40,720 --> 00:04:44,279 Speaker 1: our normal life. The I think people are somewhat shocked 80 00:04:44,400 --> 00:04:49,480 Speaker 1: that post we really never returned to normal. It it 81 00:04:49,480 --> 00:04:52,480 Speaker 1: it was like a continuous campaign for twenty four years. 82 00:04:53,120 --> 00:04:57,640 Speaker 1: For four years, right, I would love to just put 83 00:04:57,720 --> 00:05:00,120 Speaker 1: politics on the back burner and focus a little it 84 00:05:00,320 --> 00:05:03,640 Speaker 1: on other things in life. It would be nice to 85 00:05:03,680 --> 00:05:07,560 Speaker 1: see my Twitter feed just sort of calm down a bit. Yeah, 86 00:05:07,560 --> 00:05:10,960 Speaker 1: those notifications were very definitely, very grueling, and we won't 87 00:05:11,000 --> 00:05:13,440 Speaker 1: have that from the Biden team, that's for sure. So 88 00:05:13,640 --> 00:05:16,160 Speaker 1: very you know, now that the dust is settling a 89 00:05:16,200 --> 00:05:19,600 Speaker 1: little bit, we still have everything else out there, right, 90 00:05:19,680 --> 00:05:23,919 Speaker 1: lack of stimulus, coronavirus just going exponential in the United 91 00:05:23,960 --> 00:05:28,479 Speaker 1: States and across the world, and markets still keep, you know, 92 00:05:29,400 --> 00:05:32,920 Speaker 1: pumping away. I mean, what's going to burst the bubble 93 00:05:32,960 --> 00:05:34,760 Speaker 1: in this market? I'm not suggesting it's it's a bubble 94 00:05:34,760 --> 00:05:37,159 Speaker 1: in the traditional sense, but there's very definitely some exuberance 95 00:05:37,160 --> 00:05:40,200 Speaker 1: in there, isn't there. You know, things that are unsustainable 96 00:05:40,200 --> 00:05:45,520 Speaker 1: eventually run out of steam, eventually stopped running. It's arguable 97 00:05:45,760 --> 00:05:51,320 Speaker 1: that this market is uh is getting tired. There. There 98 00:05:51,360 --> 00:05:56,160 Speaker 1: are some signs that the stock market has been pricey, 99 00:05:56,400 --> 00:05:59,320 Speaker 1: but just look around at some of the earnings that 100 00:05:59,600 --> 00:06:02,600 Speaker 1: have had to come out. We we may end up 101 00:06:02,640 --> 00:06:07,719 Speaker 1: being surprised by how quickly the profit side of this recovers, 102 00:06:07,760 --> 00:06:10,160 Speaker 1: and to me, that's what that's what is going to 103 00:06:10,320 --> 00:06:13,360 Speaker 1: drive this That there are two factors that we look at. 104 00:06:13,360 --> 00:06:17,200 Speaker 1: One is multiple expansion, and that's certainly responsible for a 105 00:06:17,320 --> 00:06:19,760 Speaker 1: big part of the games people wanting to pay more 106 00:06:19,760 --> 00:06:23,560 Speaker 1: and more to own the same stock. But increasing profits 107 00:06:23,560 --> 00:06:27,240 Speaker 1: is something we should not underestimate. And let me just 108 00:06:27,360 --> 00:06:31,000 Speaker 1: remind everybody, over the course of the next year, all 109 00:06:31,040 --> 00:06:34,839 Speaker 1: these companies are going to have really really easy comparables. 110 00:06:36,000 --> 00:06:39,800 Speaker 1: Profits were way low and the market was looking past them. 111 00:06:39,839 --> 00:06:44,560 Speaker 1: And so when we're in Q two of of or 112 00:06:44,640 --> 00:06:48,799 Speaker 1: Q three, we're looking back at an environment where profits 113 00:06:48,839 --> 00:06:53,120 Speaker 1: were either tiny or non existent. And so maybe that's 114 00:06:53,160 --> 00:06:55,479 Speaker 1: part of what the market is looking at and seeing 115 00:06:55,600 --> 00:06:58,920 Speaker 1: over the next four quarters. But comps can doors, can 116 00:06:58,960 --> 00:07:01,800 Speaker 1: they barry? I mean sure, there's a baseline of economic 117 00:07:01,839 --> 00:07:04,760 Speaker 1: activity that the market needs in order to be you know, 118 00:07:04,920 --> 00:07:09,120 Speaker 1: happy with particular stalks. Yeah, um, no doubt about it. 119 00:07:09,240 --> 00:07:12,400 Speaker 1: And the I would you know, we all tend to 120 00:07:12,440 --> 00:07:16,080 Speaker 1: create these narratives after the fact. I'm wondering if some 121 00:07:16,200 --> 00:07:20,400 Speaker 1: of the market enthusiasm is the thought that, hey, the 122 00:07:20,480 --> 00:07:23,560 Speaker 1: new White House is gonna you know, nobody wants to 123 00:07:23,640 --> 00:07:27,280 Speaker 1: do the difficult decisions up front, the painful decisions, so 124 00:07:27,400 --> 00:07:30,880 Speaker 1: that you can thrive in the future. I think the 125 00:07:30,920 --> 00:07:33,760 Speaker 1: Biden administration is going to do all of the difficult 126 00:07:34,520 --> 00:07:39,840 Speaker 1: COVID nineteen related things, a national mask mandate, a temporary 127 00:07:39,920 --> 00:07:43,560 Speaker 1: lockdown um, some form of a CARES Act, to some 128 00:07:43,680 --> 00:07:48,360 Speaker 1: form of a stimulus, maybe even invoking the Defense Authorization 129 00:07:48,400 --> 00:07:52,040 Speaker 1: Act to get more PPE where it has to go. 130 00:07:52,960 --> 00:07:56,040 Speaker 1: And so that had we done that a year ago, 131 00:07:56,280 --> 00:07:58,360 Speaker 1: the economy would be much better off. Had we done 132 00:07:58,360 --> 00:08:01,640 Speaker 1: that in the beginning of we would probably not be 133 00:08:01,760 --> 00:08:04,280 Speaker 1: dealing with as much of a spike as we're seeing. 134 00:08:04,960 --> 00:08:06,760 Speaker 1: We're going to have to get through the next three 135 00:08:06,840 --> 00:08:08,960 Speaker 1: or four months. It's not going to be easy, but 136 00:08:09,080 --> 00:08:11,640 Speaker 1: the expectation is on the other side, will all be 137 00:08:12,640 --> 00:08:17,320 Speaker 1: closer to getting back to normal under this administration, then 138 00:08:17,440 --> 00:08:19,680 Speaker 1: the sort of lais ay fair, don't worry about the 139 00:08:19,720 --> 00:08:23,880 Speaker 1: coronavirus will take care of itself. Approach of the current administration. 140 00:08:24,720 --> 00:08:28,320 Speaker 1: We're waiting FED Chair J Powell, ECB President Christine Lagarde, 141 00:08:28,360 --> 00:08:31,640 Speaker 1: and BOE Governor Andrew Bailey to address the CBS Annual 142 00:08:31,760 --> 00:08:34,480 Speaker 1: Forum that they'll be discussing central banks in a shifting world. 143 00:08:34,920 --> 00:08:37,120 Speaker 1: While we wait for the start of that, we can 144 00:08:37,160 --> 00:08:39,840 Speaker 1: ask Barry Riddles about central banks in a shifting world. 145 00:08:40,160 --> 00:08:43,800 Speaker 1: Barry Riddles, of course, Master's in Business podcast host, among 146 00:08:43,840 --> 00:08:47,440 Speaker 1: other things. Barry, you know, the world shifted twelve years 147 00:08:47,440 --> 00:08:49,880 Speaker 1: ago when we have the financial crisis and central banks 148 00:08:49,880 --> 00:08:52,040 Speaker 1: got on board, and they sort of feel like they 149 00:08:52,040 --> 00:08:55,280 Speaker 1: stretched that elastic band, right. Where can they go to 150 00:08:55,440 --> 00:08:59,199 Speaker 1: from here? Well, I think if we learned anything from 151 00:08:59,240 --> 00:09:04,679 Speaker 1: the first core or of it's it's time to pass 152 00:09:04,720 --> 00:09:07,520 Speaker 1: the baton to the fiscal side of things, not the 153 00:09:07,559 --> 00:09:10,200 Speaker 1: monetary side of things. When when you're at the zero 154 00:09:10,280 --> 00:09:15,200 Speaker 1: bound um, what do we somewhere something like in of 155 00:09:15,960 --> 00:09:20,080 Speaker 1: um of sovereign bonds are now yielding negative rates. I 156 00:09:20,080 --> 00:09:23,920 Speaker 1: mean that is a quite quite a statistic, and there 157 00:09:23,920 --> 00:09:27,800 Speaker 1: are all sorts of problems with negative rates or potential problems. 158 00:09:29,200 --> 00:09:31,840 Speaker 1: I don't know how much more we can ask of 159 00:09:31,880 --> 00:09:34,800 Speaker 1: our central banks. Um. I don't want to say they're 160 00:09:34,840 --> 00:09:38,680 Speaker 1: out of AMMO, but you're at a certain point you're 161 00:09:38,800 --> 00:09:43,199 Speaker 1: you're just asking. You're using the wrong tool for the job. 162 00:09:43,240 --> 00:09:45,720 Speaker 1: And I think we've been asking too much of our 163 00:09:45,760 --> 00:09:48,400 Speaker 1: of our central bankers around the world. Yeah, I mean 164 00:09:48,400 --> 00:09:51,280 Speaker 1: I was speaking with distress to investor Whoose Richards yesterday, 165 00:09:51,280 --> 00:09:53,280 Speaker 1: and you know, he talked about after month of the 166 00:09:53,320 --> 00:09:55,679 Speaker 1: financial crisis and how it took a couple of years 167 00:09:55,720 --> 00:09:58,440 Speaker 1: to get four trillion dollars you know, through the federals 168 00:09:58,440 --> 00:10:00,800 Speaker 1: are system and into the economy. It happened in five 169 00:10:00,920 --> 00:10:03,920 Speaker 1: weeks after the pandemic, after the FED went to action 170 00:10:04,360 --> 00:10:09,400 Speaker 1: this time around. I mean, that's some crazy acceleration right there. Berry, Well, 171 00:10:09,520 --> 00:10:12,280 Speaker 1: keep in mind, it was it was the one to 172 00:10:12,520 --> 00:10:17,959 Speaker 1: punch the combination of monetary policy and a three trillion 173 00:10:18,000 --> 00:10:22,480 Speaker 1: dollar fiscal stimulus. You know, what the FED does has 174 00:10:22,559 --> 00:10:26,880 Speaker 1: to work its way through a series of mechanisms typically 175 00:10:26,920 --> 00:10:32,199 Speaker 1: associated with credit and borrowing, and that doesn't happen instantly, 176 00:10:32,600 --> 00:10:36,360 Speaker 1: especially in the midst of a pandemic. If you recall, 177 00:10:36,800 --> 00:10:41,880 Speaker 1: lots and lots of small businesses and and households were 178 00:10:41,880 --> 00:10:45,400 Speaker 1: complaining that in the middle of the pandemic, the credit 179 00:10:45,440 --> 00:10:48,160 Speaker 1: market had tightened up so much and banks really weren't 180 00:10:48,240 --> 00:10:53,600 Speaker 1: lending so so that really hamstrings the Fed's ability to 181 00:10:53,760 --> 00:10:58,280 Speaker 1: affect a lot of the local economies. On the other hand, 182 00:10:58,800 --> 00:11:03,080 Speaker 1: the fiscal stimulus, the direct lending to small business companies, 183 00:11:03,120 --> 00:11:08,600 Speaker 1: that promised not to uh layoff staff. Um uh, that 184 00:11:08,600 --> 00:11:12,080 Speaker 1: that has an immediate impact, so too, uh, it does 185 00:11:12,120 --> 00:11:16,800 Speaker 1: the proposal to use federal funds to steer money to 186 00:11:17,000 --> 00:11:22,240 Speaker 1: states and municipalities that, unlike the federal government, are unable 187 00:11:22,320 --> 00:11:26,239 Speaker 1: to deficit spend and so were there in a genuine 188 00:11:26,920 --> 00:11:31,040 Speaker 1: danger of running out of money before the year ends. 189 00:11:31,040 --> 00:11:33,720 Speaker 1: And that includes things like police and fire and and 190 00:11:33,920 --> 00:11:37,920 Speaker 1: ambulance and teachers and hospitals. They're in a bad way. 191 00:11:38,160 --> 00:11:42,400 Speaker 1: And the hope was that the new fiscal stimulus would 192 00:11:42,400 --> 00:11:46,480 Speaker 1: steer a trillion dollars or so to local states and cities. 193 00:11:47,320 --> 00:11:51,360 Speaker 1: Um Uh. There was some back and forth that this 194 00:11:51,559 --> 00:11:56,439 Speaker 1: was a blue state phenomena, and therefore the Trump administration 195 00:11:56,880 --> 00:11:59,920 Speaker 1: was very much against it. But when you look at 196 00:12:00,040 --> 00:12:03,800 Speaker 1: where the pandemic is now running amuck, it's as many 197 00:12:03,920 --> 00:12:08,160 Speaker 1: red states, if not more, than blue states. And I 198 00:12:08,200 --> 00:12:11,439 Speaker 1: wouldn't be surprised if as this gets worse and worse, 199 00:12:12,200 --> 00:12:16,680 Speaker 1: the tone amongst whoever is running the Senate starts to 200 00:12:16,760 --> 00:12:20,400 Speaker 1: soften because some of the projections are pretty horrific. Over 201 00:12:20,400 --> 00:12:22,840 Speaker 1: the next three or four months, Yeah, for sure, Barry, 202 00:12:22,840 --> 00:12:24,199 Speaker 1: you're about to go to the panel. But who is 203 00:12:24,240 --> 00:12:27,040 Speaker 1: your guest for Master's in Business next Oh, this week 204 00:12:27,200 --> 00:12:30,240 Speaker 1: Penny Pennington one of the highest ranking women in finance. 205 00:12:30,600 --> 00:12:33,800 Speaker 1: She's they call it managing partner, but she's really the 206 00:12:33,840 --> 00:12:37,319 Speaker 1: CEO of ed Jones. With Edward Jones, they manage one 207 00:12:37,320 --> 00:12:40,040 Speaker 1: point three trillion dollars. Yes, indeed, Barry, how do you 208 00:12:40,040 --> 00:12:42,920 Speaker 1: always get to my guests before I do? I'll be 209 00:12:42,960 --> 00:12:47,880 Speaker 1: tuning in. Thanks for that, Barry. You at alls time 210 00:12:47,920 --> 00:12:50,560 Speaker 1: to bring in Ty Lopez now executive chairman of retail 211 00:12:50,640 --> 00:12:57,040 Speaker 1: e commerce Ventures and Tight deals with basically distressed retailed brands. 212 00:12:57,040 --> 00:12:59,600 Speaker 1: So Ty, what what exactly do you do and and 213 00:12:59,640 --> 00:13:04,800 Speaker 1: sort of how much choice do you have these days? Hey, 214 00:13:04,840 --> 00:13:06,920 Speaker 1: thanks for having me on. Yeah, there's a lot of 215 00:13:07,000 --> 00:13:12,199 Speaker 1: choice choices growing here. You know, we've got to interesting 216 00:13:12,320 --> 00:13:15,760 Speaker 1: environment with COVID. We started buying before covid. We bought 217 00:13:15,880 --> 00:13:21,280 Speaker 1: Dress Barn last year in November nineteen, so the opportunity 218 00:13:21,320 --> 00:13:24,920 Speaker 1: has been there, but it's certainly there's more choice and 219 00:13:25,720 --> 00:13:29,040 Speaker 1: more attractive valuations that we can purchase at. You now 220 00:13:29,120 --> 00:13:31,800 Speaker 1: tell us exactly what you're buying, because so some of 221 00:13:31,800 --> 00:13:34,800 Speaker 1: the brands that you bought our Dress Barn as you said, 222 00:13:34,880 --> 00:13:38,400 Speaker 1: also U Pure One Models, also Linens and things. So 223 00:13:38,440 --> 00:13:41,160 Speaker 1: these were bankruptcies that we sort of watched happen in 224 00:13:41,200 --> 00:13:43,600 Speaker 1: front of our very eyes. Did you just buy the names, 225 00:13:43,640 --> 00:13:46,640 Speaker 1: did you buy the assets, did you buy the intellectual property? 226 00:13:46,720 --> 00:13:51,560 Speaker 1: And how much for? Yeah? So each deal has been different. 227 00:13:51,640 --> 00:13:54,440 Speaker 1: Some of the brands were off market, like Franklin Men 228 00:13:54,440 --> 00:13:57,319 Speaker 1: and Linens and things. Those weren't bankruptcies when we bought them. 229 00:13:57,760 --> 00:14:00,559 Speaker 1: They have been, you know, in the past. Franklin Mint 230 00:14:00,679 --> 00:14:03,320 Speaker 1: was never bankrupt, so everyone was different. Pure One we 231 00:14:03,400 --> 00:14:06,520 Speaker 1: bought it an auction in July for thirty one million. 232 00:14:06,640 --> 00:14:10,040 Speaker 1: We bought the I P, the intellectual property. I mean 233 00:14:10,080 --> 00:14:13,760 Speaker 1: pretty much, you get the whole brand and you get 234 00:14:13,760 --> 00:14:17,760 Speaker 1: the all that that includes. But we've chosen, because we're 235 00:14:17,760 --> 00:14:22,360 Speaker 1: e commerce specialists, to let the stores for the most 236 00:14:22,360 --> 00:14:25,560 Speaker 1: part closed. The stores are already closing. We still have 237 00:14:25,640 --> 00:14:29,040 Speaker 1: the option to open back brick and mortar, but obviously 238 00:14:29,160 --> 00:14:31,800 Speaker 1: we want to see how COVID shakes out before we start, 239 00:14:32,560 --> 00:14:35,000 Speaker 1: you know, opening a whole bunch of stores. These stores 240 00:14:35,440 --> 00:14:37,880 Speaker 1: are kind of worked out. These brands in trouble not 241 00:14:37,960 --> 00:14:42,200 Speaker 1: just because of COVID, but because they signed leases assuming 242 00:14:42,240 --> 00:14:45,560 Speaker 1: a certain amount of people were would visit brick and mortar, 243 00:14:45,800 --> 00:14:48,800 Speaker 1: but every day Amazon and e cooms take a stronger 244 00:14:48,840 --> 00:14:52,840 Speaker 1: place exactly, So what is your plan? Why even but 245 00:14:52,960 --> 00:14:54,960 Speaker 1: I mean thirty one million dollars doesn't sound like a 246 00:14:54,960 --> 00:14:56,520 Speaker 1: lot for pure one, let's put it that way. But 247 00:14:56,600 --> 00:15:00,080 Speaker 1: why even spend that if you know the business? It 248 00:15:00,200 --> 00:15:05,120 Speaker 1: just doesn't work anymore. Yeah, So it takes Pier one 249 00:15:05,200 --> 00:15:08,960 Speaker 1: or dress Bar, and these brands are beloved. Um if 250 00:15:08,960 --> 00:15:11,560 Speaker 1: you watch the social media, you know, and when Pierre 251 00:15:11,640 --> 00:15:14,320 Speaker 1: one was going out, people were sad and people have 252 00:15:14,360 --> 00:15:16,880 Speaker 1: been shopping there. It's a sixty year old brand. So 253 00:15:16,960 --> 00:15:20,440 Speaker 1: we don't actually think that the brands are broken. We 254 00:15:20,600 --> 00:15:24,920 Speaker 1: think that the trust uh is there as strong as 255 00:15:24,960 --> 00:15:27,240 Speaker 1: ever with the brand. People have a white pier One 256 00:15:27,400 --> 00:15:29,280 Speaker 1: and it's hard if you try to you know, a 257 00:15:29,280 --> 00:15:32,360 Speaker 1: lot of entrepreneurs try to build businesses from scratch. I've 258 00:15:32,360 --> 00:15:34,800 Speaker 1: done that before. My business partner and I have done 259 00:15:34,840 --> 00:15:37,200 Speaker 1: that before. But it takes a long time to build 260 00:15:38,080 --> 00:15:40,720 Speaker 1: um what we call branded awareness. So if you look 261 00:15:40,760 --> 00:15:45,359 Speaker 1: at Pier one has over branded awareness out of ten Americans. 262 00:15:45,360 --> 00:15:48,280 Speaker 1: If you say do you know pier One, nine say yes. 263 00:15:48,400 --> 00:15:51,600 Speaker 1: And it's really hard to do that. If you start 264 00:15:51,600 --> 00:15:55,120 Speaker 1: a brand from scratch, it's almost impossible. I mean Google 265 00:15:55,200 --> 00:15:58,120 Speaker 1: did it obviously, But for the most part, I think 266 00:15:58,200 --> 00:16:02,320 Speaker 1: that piggybacking off the trust that's already there and bringing 267 00:16:02,320 --> 00:16:04,600 Speaker 1: the brands into the new e commerce world is a 268 00:16:04,840 --> 00:16:07,680 Speaker 1: very viable and it's going very well with dress More 269 00:16:07,760 --> 00:16:10,640 Speaker 1: and in the brands we've been doing so far. Are 270 00:16:10,720 --> 00:16:13,640 Speaker 1: you trying to put everything you buy in in one 271 00:16:13,960 --> 00:16:17,920 Speaker 1: retail marketplace or what will be the future for for 272 00:16:17,960 --> 00:16:22,840 Speaker 1: these brands? Me my business part, we're just talking about that. Certainly, 273 00:16:22,880 --> 00:16:27,240 Speaker 1: there's an option to create, you know, and you have 274 00:16:27,360 --> 00:16:30,360 Speaker 1: all the brands there right now. Each brand has its 275 00:16:30,360 --> 00:16:34,200 Speaker 1: own website, but we are switching more to a marketplace model, 276 00:16:34,440 --> 00:16:38,400 Speaker 1: which was Amazon Jeff Bezos kind of thesis. So, for example, 277 00:16:38,640 --> 00:16:44,080 Speaker 1: on Pier one, we're not only selling Pier one branded products. 278 00:16:44,400 --> 00:16:46,600 Speaker 1: If you look at Wayfair, which has gone from a 279 00:16:46,680 --> 00:16:52,760 Speaker 1: nine billion valuation earlier this year to they allow other people, 280 00:16:53,000 --> 00:16:56,880 Speaker 1: any vendor to sell. So we're kind of hybridizing the 281 00:16:56,960 --> 00:17:00,680 Speaker 1: old Pier One with the newer business model like Amazon 282 00:17:00,760 --> 00:17:04,879 Speaker 1: and Wayfair. Yeah, that's fascinating. Now, will you continue to 283 00:17:04,920 --> 00:17:10,600 Speaker 1: sort of buy willy nilly sort of? So you know, clothes, furniture, sports, 284 00:17:11,119 --> 00:17:16,199 Speaker 1: Linen's or will you try to specialize in one area. 285 00:17:17,080 --> 00:17:20,480 Speaker 1: I don't mean that, no, No, it's there's a little 286 00:17:20,520 --> 00:17:24,439 Speaker 1: method to our madness. But I think we like the 287 00:17:24,520 --> 00:17:28,360 Speaker 1: thought of going into different verticals, different industries. So we've 288 00:17:28,359 --> 00:17:31,840 Speaker 1: done that on purpose. So for example, instead of buying 289 00:17:31,960 --> 00:17:35,560 Speaker 1: five clothing brands, we'd like to buy one strong one 290 00:17:36,119 --> 00:17:38,640 Speaker 1: and then buy one home goods, and then we bought 291 00:17:38,840 --> 00:17:42,800 Speaker 1: models as Sportings and Franklin men Is collectibles, and so 292 00:17:42,840 --> 00:17:46,800 Speaker 1: we like, we like branching out. You know, there's last 293 00:17:46,840 --> 00:17:51,560 Speaker 1: I counted, there's about thirteen trilli thirteen industries that do that. 294 00:17:51,560 --> 00:17:54,199 Speaker 1: I have over a trillion of revenue. We'd like to 295 00:17:54,240 --> 00:17:57,760 Speaker 1: be an all thirteen of those. My kind of mentor 296 00:17:58,200 --> 00:18:00,560 Speaker 1: that I've never met is Warren Buffett In. I like 297 00:18:00,760 --> 00:18:04,520 Speaker 1: his approach to building a real diversified holding company. We're 298 00:18:04,600 --> 00:18:07,560 Speaker 1: holding company, We're not a fund, so we actually own 299 00:18:07,640 --> 00:18:09,639 Speaker 1: the majority of the assets, you know, so we like 300 00:18:09,720 --> 00:18:13,119 Speaker 1: the diversity. So ty we're out of time, But what 301 00:18:13,119 --> 00:18:14,520 Speaker 1: what will be next? I mean, where do you go 302 00:18:14,640 --> 00:18:16,919 Speaker 1: to look for these auctions? How do they pop up 303 00:18:16,960 --> 00:18:20,600 Speaker 1: for you? We're looking more at off market deals. The 304 00:18:20,600 --> 00:18:24,520 Speaker 1: auction space is getting more crowded and more competitive. We 305 00:18:24,600 --> 00:18:28,800 Speaker 1: have a new acquisition that I'll be able to announce 306 00:18:28,800 --> 00:18:33,240 Speaker 1: in a week. So it's a bigger it's the biggest 307 00:18:33,280 --> 00:18:35,359 Speaker 1: brand we've ever bought. And oh my gosh, we have 308 00:18:35,440 --> 00:18:37,560 Speaker 1: to do a competition for our listeners to write in 309 00:18:37,680 --> 00:18:43,200 Speaker 1: and whoever gets it right gets chanced to Alright, well 310 00:18:43,200 --> 00:18:44,920 Speaker 1: it's out there now you know how to reach us. Ty, 311 00:18:45,040 --> 00:18:48,680 Speaker 1: thanks for joining Ti Lopez, Executive Chairman of Retail e 312 00:18:48,840 --> 00:18:54,400 Speaker 1: Commerce Venture. Is a fascinating conversation and it is time 313 00:18:54,440 --> 00:18:56,480 Speaker 1: to bring in Sarah Pons, like now class a reporter 314 00:18:56,600 --> 00:18:59,119 Speaker 1: here at Bloomberg. So we were looking at equities with 315 00:18:59,200 --> 00:19:02,080 Speaker 1: Dave Wilson earlier, Sarah. What we didn't really talk about 316 00:19:02,320 --> 00:19:05,080 Speaker 1: is the Domar Index, for example, which is been very, 317 00:19:05,160 --> 00:19:08,159 Speaker 1: very volatile. We're down below again. Some of this of 318 00:19:08,200 --> 00:19:12,400 Speaker 1: course on euro and Sterling, because that's they're the two 319 00:19:12,760 --> 00:19:15,200 Speaker 1: biggest components for the d X Y. But what else 320 00:19:15,280 --> 00:19:17,440 Speaker 1: is going on? There was some discussion that we would 321 00:19:17,440 --> 00:19:19,280 Speaker 1: see the safe haven trade of the dollar return, but 322 00:19:19,320 --> 00:19:22,639 Speaker 1: like you said, we have seen fluctuations lately, volatility. If 323 00:19:22,640 --> 00:19:24,760 Speaker 1: I look at the Bloomberg Dollar Spot Index for example, 324 00:19:25,119 --> 00:19:28,800 Speaker 1: higher on Monday, lower on Tuesday, higher yesterday, and today 325 00:19:29,119 --> 00:19:32,520 Speaker 1: we are just about flat. It's really difficult to disseminate 326 00:19:32,600 --> 00:19:36,359 Speaker 1: any direct trend here. It is notable, though, to point 327 00:19:36,400 --> 00:19:38,040 Speaker 1: out the fact that if you zoom out and you 328 00:19:38,080 --> 00:19:41,240 Speaker 1: look at a more historical perspective, we're still hovering just 329 00:19:41,440 --> 00:19:45,080 Speaker 1: around this lowest level since eighteen so still dealing with 330 00:19:45,080 --> 00:19:49,639 Speaker 1: a depressed dollar, not seeing too much reaction or change 331 00:19:49,680 --> 00:19:52,560 Speaker 1: that would change the trend any which way. But also 332 00:19:52,680 --> 00:19:55,680 Speaker 1: very notable today is just the bond market. Yes, tenure 333 00:19:55,720 --> 00:19:57,800 Speaker 1: treasury yield still above ninety basis points. I look at 334 00:19:57,800 --> 00:20:02,040 Speaker 1: my screen right now point three percent. However, that is 335 00:20:02,080 --> 00:20:05,679 Speaker 1: down from above ninety seven basis points just yesterday and 336 00:20:05,760 --> 00:20:09,280 Speaker 1: this morning as well earlier overnight. So we are seeing 337 00:20:09,320 --> 00:20:13,000 Speaker 1: this change take hold, albeit a relatively small one, but 338 00:20:13,080 --> 00:20:15,960 Speaker 1: still down six basis points or so on the day 339 00:20:15,960 --> 00:20:19,639 Speaker 1: this after that cp I print came in lighter than expected. 340 00:20:19,880 --> 00:20:23,680 Speaker 1: Some economists are now starting to wonder if it's true that, yes, 341 00:20:23,720 --> 00:20:26,640 Speaker 1: we had seen inflation start to pick up after those 342 00:20:26,640 --> 00:20:29,439 Speaker 1: immediate initial lockdowns. Well, are we going to get to 343 00:20:29,480 --> 00:20:31,800 Speaker 1: a point now where it's going to start fading? We 344 00:20:31,880 --> 00:20:34,520 Speaker 1: might see the trend even trend downwards if we start 345 00:20:34,560 --> 00:20:38,520 Speaker 1: to see worries restrictions over rising COVID nineteen case take 346 00:20:38,560 --> 00:20:41,280 Speaker 1: hold as well, and at that point we have restrictions 347 00:20:41,320 --> 00:20:43,560 Speaker 1: coming through from governments. Being here in New York City, 348 00:20:43,840 --> 00:20:46,080 Speaker 1: we know what we are about to phase starting tomorrow 349 00:20:46,280 --> 00:20:49,400 Speaker 1: with relatively light restrictions, but we don't know what's going 350 00:20:49,440 --> 00:20:51,520 Speaker 1: to be coming down the pipeline. At the same time, 351 00:20:51,760 --> 00:20:53,480 Speaker 1: you have to wonder if people are going to self 352 00:20:53,520 --> 00:20:56,440 Speaker 1: govern and self restricts, self police, get worried themselves and 353 00:20:56,440 --> 00:20:59,200 Speaker 1: start pulling back on economic activity, and then the impact 354 00:20:59,320 --> 00:21:02,680 Speaker 1: that has inflation and the expectations for the reflation trade 355 00:21:02,680 --> 00:21:04,600 Speaker 1: going forwards. I mean, that's what the FED would say, 356 00:21:04,680 --> 00:21:07,919 Speaker 1: right The FED doesn't see any inflation anywhere in the future, 357 00:21:08,240 --> 00:21:10,800 Speaker 1: absolutely not. We know the FED would like to be 358 00:21:10,840 --> 00:21:12,520 Speaker 1: on hold for the next couple of years. They have 359 00:21:12,560 --> 00:21:14,840 Speaker 1: baked it into their forecast. They don't expect inflation to 360 00:21:14,840 --> 00:21:17,120 Speaker 1: get above two percent. Even if inflation does get above 361 00:21:17,160 --> 00:21:19,920 Speaker 1: two percent, we know that they have now changed their 362 00:21:19,960 --> 00:21:23,399 Speaker 1: outlook their ways of governing to fate the flexible average 363 00:21:23,400 --> 00:21:26,879 Speaker 1: inflation targeting methods, so they're likely not to increase interest 364 00:21:27,040 --> 00:21:29,640 Speaker 1: rates even if we are just above two percent for 365 00:21:29,720 --> 00:21:32,560 Speaker 1: some time now, we have not seen how this is 366 00:21:32,600 --> 00:21:37,280 Speaker 1: going to work. Actually, in practice, we're not entirely sure, 367 00:21:37,320 --> 00:21:38,760 Speaker 1: and we're going to have to pay attention to the 368 00:21:38,760 --> 00:21:42,040 Speaker 1: Fed's words going forwards. But the feds promise and wall 369 00:21:42,080 --> 00:21:45,160 Speaker 1: Streets take of the Fed's promise is that we are 370 00:21:45,200 --> 00:21:47,560 Speaker 1: not going to see interest rates rise for some time. 371 00:21:47,680 --> 00:21:49,600 Speaker 1: So that begs the question, even if we are seeing 372 00:21:49,680 --> 00:21:53,560 Speaker 1: nominal rates rise, how high can nominal rates go if 373 00:21:53,600 --> 00:21:55,640 Speaker 1: we know that the FED is not going to step 374 00:21:55,680 --> 00:21:59,439 Speaker 1: off the old curve. Oil today is a big story. 375 00:21:59,480 --> 00:22:02,520 Speaker 1: We're seeing the barrel of w t iBOT two dollars 376 00:22:02,560 --> 00:22:03,879 Speaker 1: of borrow, which you know, in the face of it 377 00:22:03,880 --> 00:22:05,760 Speaker 1: doesn't sound like much, but it's been a long time 378 00:22:05,760 --> 00:22:08,439 Speaker 1: since we've seen forty two dollars plus this because OPEC 379 00:22:08,560 --> 00:22:11,320 Speaker 1: is sort of trying to face reality as opposed to 380 00:22:11,359 --> 00:22:13,360 Speaker 1: what it would like the world look like. Right, it's 381 00:22:13,359 --> 00:22:16,120 Speaker 1: all reality, all relative when you when you talk about 382 00:22:16,119 --> 00:22:18,560 Speaker 1: oil prices, we were stuck around forty dollars for so 383 00:22:18,600 --> 00:22:20,840 Speaker 1: long when it comes to W t I crude oil. 384 00:22:20,880 --> 00:22:22,640 Speaker 1: The fact that we are now nearing it on forty 385 00:22:22,680 --> 00:22:24,840 Speaker 1: two dollars a barrel. Well, it seems like maybe you're 386 00:22:24,880 --> 00:22:26,320 Speaker 1: getting a little bit of a breakout. This is the 387 00:22:26,359 --> 00:22:29,639 Speaker 1: highest in September. Back then prices were forty two seventy 388 00:22:29,680 --> 00:22:32,399 Speaker 1: six a barrel, So we do see prices trending higher. 389 00:22:32,400 --> 00:22:34,320 Speaker 1: It does help with OPEC on the supply side of 390 00:22:34,359 --> 00:22:36,679 Speaker 1: the equation. You also just have to factor in the 391 00:22:36,720 --> 00:22:39,320 Speaker 1: positive news that we got from Fiser on the vaccine front. 392 00:22:39,520 --> 00:22:42,199 Speaker 1: That certainly helps oil prices as well, because if you 393 00:22:42,200 --> 00:22:44,560 Speaker 1: think about if we do get a vaccine sooner rather 394 00:22:44,600 --> 00:22:47,119 Speaker 1: than later, what is that going to help. What is 395 00:22:47,119 --> 00:22:50,800 Speaker 1: that going to inspire. Well, maybe it will reintroduce airline travel, 396 00:22:50,920 --> 00:22:53,640 Speaker 1: will reintroduce cruise line travel. People maybe getting in their 397 00:22:53,640 --> 00:22:56,240 Speaker 1: cars more often. Well, that means we need more gasoline, 398 00:22:56,240 --> 00:22:58,200 Speaker 1: we need more oil. So therefore we could see oil 399 00:22:58,280 --> 00:23:00,919 Speaker 1: prices rise off of the ack of not just supply 400 00:23:01,000 --> 00:23:04,880 Speaker 1: but also the demand picture too. That also just filtering 401 00:23:04,880 --> 00:23:07,240 Speaker 1: into energy prices pretty unbelievable. If you look through the 402 00:23:07,240 --> 00:23:10,160 Speaker 1: closes yesterday, the SMP five hundred energy sector the best 403 00:23:10,160 --> 00:23:13,560 Speaker 1: performing sector up. That's on track for the best week 404 00:23:13,600 --> 00:23:17,520 Speaker 1: on record ever for the energy sector. Interestingly, gold which 405 00:23:17,600 --> 00:23:20,240 Speaker 1: did gain when we were waiting for the five years old, 406 00:23:20,520 --> 00:23:26,320 Speaker 1: is way down now at below an eighteen hundred and 407 00:23:26,720 --> 00:23:29,320 Speaker 1: eighty dollars and ounce right there. Right. So I was 408 00:23:29,359 --> 00:23:33,240 Speaker 1: speaking with a strategist over at Manned Solutions yesterday who 409 00:23:33,240 --> 00:23:35,840 Speaker 1: works in their multi asset solutions group, and I was 410 00:23:35,880 --> 00:23:38,639 Speaker 1: asking him about gold because it has been a little 411 00:23:38,640 --> 00:23:42,040 Speaker 1: bit wonky lately, considering the fact that earlier in the 412 00:23:42,119 --> 00:23:45,639 Speaker 1: year the story was that gold was acting as a 413 00:23:45,680 --> 00:23:48,919 Speaker 1: hedge against inflation. Well, what happened earlier this week? It 414 00:23:49,000 --> 00:23:52,000 Speaker 1: was that we got the positive vaccine news, the reflation 415 00:23:52,080 --> 00:23:54,880 Speaker 1: trade took hold, We saw yields rise, we saw inflation 416 00:23:54,920 --> 00:23:59,320 Speaker 1: expectations rise, yet gold moved lower, So it wasn't necessarily 417 00:23:59,359 --> 00:24:03,359 Speaker 1: acting as that inflation hedge. It was acting as the opposite. 418 00:24:03,359 --> 00:24:05,600 Speaker 1: And he said, gold has an interesting one, and it's 419 00:24:05,600 --> 00:24:09,000 Speaker 1: been really difficult when you look at cross asset correlations 420 00:24:09,040 --> 00:24:11,960 Speaker 1: this year, gold has been correlated to both bonds and 421 00:24:12,000 --> 00:24:15,399 Speaker 1: stocks in different ways and at different times. So really 422 00:24:15,520 --> 00:24:19,000 Speaker 1: nailing down the gold trade, uh is a hard one 423 00:24:19,040 --> 00:24:21,720 Speaker 1: over the short term because it still acts as a 424 00:24:21,760 --> 00:24:25,160 Speaker 1: short term hedge against inflation, but also it's a safe 425 00:24:25,200 --> 00:24:28,360 Speaker 1: haven asset, so those are two different stories. The inflation 426 00:24:28,400 --> 00:24:31,639 Speaker 1: bed is a positive one, one of growth, one of reflation, 427 00:24:32,040 --> 00:24:34,800 Speaker 1: Whereas if you are looking for a safe haven and gold, 428 00:24:34,960 --> 00:24:38,639 Speaker 1: that's not necessarily the same story. So interesting takes on 429 00:24:38,720 --> 00:24:41,679 Speaker 1: gold there and investors are saying it's it's kind of 430 00:24:41,680 --> 00:24:44,840 Speaker 1: been a difficult one to play as of light real quick. 431 00:24:44,880 --> 00:24:47,880 Speaker 1: What will you be working on today? Sarah working on today? 432 00:24:48,080 --> 00:24:50,240 Speaker 1: So I'm actually working on a story about retail investors. 433 00:24:50,240 --> 00:24:52,440 Speaker 1: It will be for the weekend, so keep an eye 434 00:24:52,480 --> 00:24:55,119 Speaker 1: on it. Basically, the moral of the story is have 435 00:24:55,160 --> 00:24:59,040 Speaker 1: retail investor has been lucky this year? Or are they skillful? Wow? 436 00:25:00,000 --> 00:25:02,679 Speaker 1: Are a great story account? Wait to read your conclusions 437 00:25:02,680 --> 00:25:04,159 Speaker 1: and the conclusions of those who speak to that is 438 00:25:04,240 --> 00:25:08,719 Speaker 1: Sarah Ponza, chief costs asset reporter here at Bloomberg, and 439 00:25:09,119 --> 00:25:11,640 Speaker 1: she's chief cause as a reporter in the studio anyway, 440 00:25:11,880 --> 00:25:16,439 Speaker 1: and she'll be acted us later on what are you 441 00:25:16,440 --> 00:25:18,560 Speaker 1: supposed to do with these markets? One day of one 442 00:25:18,600 --> 00:25:22,399 Speaker 1: day down, vaccine news sending markets higher, and then market 443 00:25:22,440 --> 00:25:24,200 Speaker 1: sort of getting a dose of reality the next day. 444 00:25:24,200 --> 00:25:27,320 Speaker 1: Hans Olsen is chief investment officer for Fiduciary Trust in 445 00:25:27,440 --> 00:25:30,760 Speaker 1: Boston and joins US now with hopefully some advice. Hans 446 00:25:30,800 --> 00:25:33,439 Speaker 1: thanks for joining. What are we supposed to make of 447 00:25:33,520 --> 00:25:37,200 Speaker 1: these markets and whether they're correctly priced and what exactly 448 00:25:37,240 --> 00:25:40,520 Speaker 1: is priced in Yeah, yeah, good morning, Vanni. I think 449 00:25:40,520 --> 00:25:43,520 Speaker 1: we're what we're seeing is sort of the the inevitable 450 00:25:43,600 --> 00:25:47,040 Speaker 1: churn after a very nice move over the last month, 451 00:25:47,119 --> 00:25:49,199 Speaker 1: and I think you have to step back in and 452 00:25:49,280 --> 00:25:52,000 Speaker 1: first look at the path of the economy, and then 453 00:25:52,119 --> 00:25:57,520 Speaker 1: from there then you can adjust your portfolio accordingly. From 454 00:25:57,560 --> 00:26:00,440 Speaker 1: that perspective, our base case continue used to be that 455 00:26:00,480 --> 00:26:03,280 Speaker 1: we're going to see a W shaped type of recovery. 456 00:26:03,359 --> 00:26:06,600 Speaker 1: So we've seen the first V and that was pretty pronounced, 457 00:26:07,040 --> 00:26:09,960 Speaker 1: and we are in the beginning stages of I think 458 00:26:09,960 --> 00:26:12,960 Speaker 1: what the second V. And the question is whether it 459 00:26:13,000 --> 00:26:15,760 Speaker 1: will be severe or not. I don't tend to think so, 460 00:26:16,080 --> 00:26:18,080 Speaker 1: but it was certainly is going to be impacted by 461 00:26:18,119 --> 00:26:20,920 Speaker 1: the winter wave of COVID infections and then of course 462 00:26:21,400 --> 00:26:24,679 Speaker 1: that next round of stimulus that we've all been waiting for. 463 00:26:24,960 --> 00:26:27,800 Speaker 1: Uh and and once we start to see that, I 464 00:26:27,880 --> 00:26:32,480 Speaker 1: think markets can stage a more convincing rally. From here, 465 00:26:32,760 --> 00:26:36,040 Speaker 1: without a doubt, markets appear to be pricing a recovery. 466 00:26:36,119 --> 00:26:39,360 Speaker 1: You're seeing it in the broadening and the deepening of stocks. 467 00:26:39,640 --> 00:26:41,520 Speaker 1: You're seeing it in the shape of the yield curve 468 00:26:41,880 --> 00:26:44,760 Speaker 1: and indeed even in the in the price action or 469 00:26:44,760 --> 00:26:47,800 Speaker 1: the yield of the yield on the ten year treasury. UM. 470 00:26:47,880 --> 00:26:50,800 Speaker 1: All are very encouraging signs, UM. But it's still a 471 00:26:50,800 --> 00:26:53,399 Speaker 1: bit early. How can you have a recovery with the 472 00:26:53,440 --> 00:26:57,639 Speaker 1: six point unemployment rate? Well, you know, that's that's the thing, right, 473 00:26:57,640 --> 00:27:00,520 Speaker 1: I mean, it's where it's coming down from, and we 474 00:27:00,560 --> 00:27:04,119 Speaker 1: would hopefully continue to see unemployment fall. The numbers that 475 00:27:04,160 --> 00:27:07,160 Speaker 1: we had this morning are encouraging, UM. But we're not 476 00:27:07,200 --> 00:27:10,720 Speaker 1: there yet, and you know, by all accounts, we're probably 477 00:27:10,840 --> 00:27:14,160 Speaker 1: another year away from um, you know, getting to where 478 00:27:14,200 --> 00:27:15,840 Speaker 1: we would really like to be in all of this. 479 00:27:15,960 --> 00:27:18,119 Speaker 1: And again it's all going to be depended upon do 480 00:27:18,160 --> 00:27:21,560 Speaker 1: we get a vaccine, is it distributed at scale and 481 00:27:21,680 --> 00:27:25,480 Speaker 1: its effectiveness? Um so. And of course the companion to 482 00:27:25,560 --> 00:27:27,920 Speaker 1: that is, do we get another round of stimulus to 483 00:27:27,960 --> 00:27:32,080 Speaker 1: help the economy along until we get to resolution of 484 00:27:32,480 --> 00:27:36,119 Speaker 1: the pandemic? Does that come up payback time haunts for 485 00:27:36,200 --> 00:27:40,440 Speaker 1: all the stimulus? Well, that's the problem, right. So we 486 00:27:40,480 --> 00:27:43,040 Speaker 1: have spent in an enormous amount of money in the 487 00:27:43,080 --> 00:27:46,879 Speaker 1: service of supporting the economy during the pandemic. The budget 488 00:27:46,880 --> 00:27:50,480 Speaker 1: deficits has exploded. We're going to have to finance uh, 489 00:27:50,600 --> 00:27:55,240 Speaker 1: somewhere between another what two to three trillion dollars this year, 490 00:27:55,280 --> 00:27:59,520 Speaker 1: depending upon what the stimulus looks like supporting. Remember, even 491 00:27:59,560 --> 00:28:03,280 Speaker 1: before this happened, Vonnie, the pandemic broke out, we were 492 00:28:03,359 --> 00:28:07,640 Speaker 1: running a trillion dollar deficit, which is pretty unusual at 493 00:28:07,680 --> 00:28:09,440 Speaker 1: that point in the at the point that we were 494 00:28:09,440 --> 00:28:13,040 Speaker 1: in the economic cycle, when things were really quite good. Um. 495 00:28:13,119 --> 00:28:15,680 Speaker 1: So that does have to get financed, and the price 496 00:28:15,760 --> 00:28:18,399 Speaker 1: at which that gets financed remains an open question. How 497 00:28:18,480 --> 00:28:20,520 Speaker 1: much the Fed is going to have to buy versus 498 00:28:20,840 --> 00:28:23,280 Speaker 1: the price at which um, you know, the private investor 499 00:28:23,320 --> 00:28:25,760 Speaker 1: will buy treasury debt will will have to be seen 500 00:28:25,800 --> 00:28:28,359 Speaker 1: at this point. So, Hans, you know, if you have 501 00:28:28,400 --> 00:28:30,280 Speaker 1: been a retail investor and you decided you didn't know 502 00:28:30,320 --> 00:28:31,720 Speaker 1: what was going on, so we're just going to sort 503 00:28:31,760 --> 00:28:33,960 Speaker 1: of leave everything where it was, you probably wouldn't have 504 00:28:34,000 --> 00:28:37,440 Speaker 1: done too badly, right, But is that continuing to be 505 00:28:37,480 --> 00:28:40,560 Speaker 1: the advice from from somebody like you? Well, I think 506 00:28:40,640 --> 00:28:43,080 Speaker 1: I think the notion of not trying to trade an 507 00:28:43,080 --> 00:28:46,640 Speaker 1: election is a very good notion. Indeed, and we saw 508 00:28:46,720 --> 00:28:50,680 Speaker 1: that the exactly the case in this election, given all 509 00:28:50,720 --> 00:28:53,640 Speaker 1: the sturm and drawing around uh, the election and the 510 00:28:53,720 --> 00:28:56,880 Speaker 1: run up to it. Um, you know, from some clients 511 00:28:56,920 --> 00:28:59,000 Speaker 1: I've heard I heard from you know, one would have 512 00:28:59,040 --> 00:29:00,480 Speaker 1: thought that it was the end of the world, and 513 00:29:01,000 --> 00:29:03,960 Speaker 1: clearly it wasn't. Right. Everything is going to work out fine. 514 00:29:04,480 --> 00:29:07,080 Speaker 1: I think the larger question is is the market ready 515 00:29:07,080 --> 00:29:10,760 Speaker 1: to rotate um from the covid led stocks of the 516 00:29:10,840 --> 00:29:14,360 Speaker 1: last nine months or so into a broader market participation. 517 00:29:14,400 --> 00:29:16,479 Speaker 1: And I think the answer there is yes, We're starting 518 00:29:16,480 --> 00:29:19,680 Speaker 1: to see efforts at that. It's never linear, right, It 519 00:29:20,120 --> 00:29:23,880 Speaker 1: never happens overnight. It takes time for that that that 520 00:29:23,880 --> 00:29:27,600 Speaker 1: that sort of rotation wave to form. But I think 521 00:29:27,640 --> 00:29:30,080 Speaker 1: that's going to play out over the next four to 522 00:29:30,920 --> 00:29:33,280 Speaker 1: six months that we should start to see some of 523 00:29:33,320 --> 00:29:36,280 Speaker 1: the out of favorite names start to participate, and indeed 524 00:29:36,320 --> 00:29:38,960 Speaker 1: we might even see some of the you know, the 525 00:29:39,200 --> 00:29:44,040 Speaker 1: terrible laggards in the international markets finally begin to perk up. 526 00:29:44,120 --> 00:29:49,360 Speaker 1: So I'm cautiously optimistic on that is still the way 527 00:29:49,400 --> 00:29:54,959 Speaker 1: to go. Yeah, that's that's going to be the sixty 528 00:29:55,040 --> 00:29:59,680 Speaker 1: four million dollar question, right, Um, I think it is 529 00:29:59,760 --> 00:30:03,320 Speaker 1: of evolving. Yes for for the most part, but I 530 00:30:03,360 --> 00:30:07,960 Speaker 1: think in order to maintain um uh, you're spending power, 531 00:30:08,000 --> 00:30:09,920 Speaker 1: you're going to have to spend total return, which is 532 00:30:09,920 --> 00:30:14,000 Speaker 1: going to force fawnie, I think higher portfolio turnover than 533 00:30:14,040 --> 00:30:16,440 Speaker 1: it has in the past, which is which is going 534 00:30:16,480 --> 00:30:18,600 Speaker 1: to be a bit of a mindset on the part 535 00:30:18,600 --> 00:30:23,320 Speaker 1: of some investors. So yes for now, but um with 536 00:30:23,440 --> 00:30:26,080 Speaker 1: the qualifications that you're going to have to realize some 537 00:30:26,120 --> 00:30:29,080 Speaker 1: of your capital appreciation in order to maintain your spending power. 538 00:30:29,720 --> 00:30:31,560 Speaker 1: So if you are going to stay sixty forty, be 539 00:30:31,680 --> 00:30:34,800 Speaker 1: a little bit more active than you might normally be exactly, 540 00:30:34,920 --> 00:30:36,760 Speaker 1: and with the way you get that forty and how 541 00:30:36,800 --> 00:30:38,600 Speaker 1: you invest that forty is going to be very different 542 00:30:38,600 --> 00:30:40,160 Speaker 1: than the way you've done in the past. So you know, 543 00:30:40,160 --> 00:30:43,400 Speaker 1: whether it's mortgages, credit, different types of credit and the like. 544 00:30:44,440 --> 00:30:48,920 Speaker 1: It can no longer be simply sovereign debt or munies. Finally, Hans, 545 00:30:48,960 --> 00:30:51,520 Speaker 1: and briefly, are you invested or would you? I mean 546 00:30:51,880 --> 00:30:53,920 Speaker 1: your finishing we trust, So you're invested everywhere, I guess, 547 00:30:53,920 --> 00:30:57,080 Speaker 1: But how much outside the US would you be looking? Yeah, well, 548 00:30:57,120 --> 00:31:00,480 Speaker 1: we've been underweight the US of our equity expos're we're 549 00:31:00,480 --> 00:31:05,000 Speaker 1: probably about thirty of that right now outside the US. 550 00:31:05,360 --> 00:31:07,800 Speaker 1: I would love an opportunity to to bring some of 551 00:31:07,800 --> 00:31:12,960 Speaker 1: that money abroad again, um, but not quite yet. That 552 00:31:13,080 --> 00:31:15,920 Speaker 1: is fascinating. That is a good chunk of the portfolio. Hans. 553 00:31:15,960 --> 00:31:17,440 Speaker 1: We'll have to get you back soon to talk about 554 00:31:17,480 --> 00:31:21,280 Speaker 1: what exactly is in their Hans Olsen is chief investment 555 00:31:21,320 --> 00:31:24,640 Speaker 1: officer for Fiduciary Trust in Boston, and we appreciate his 556 00:31:24,720 --> 00:31:28,200 Speaker 1: time today. Some sage advice there, and of course everybody 557 00:31:28,240 --> 00:31:30,120 Speaker 1: doing their best to try to figure out what is 558 00:31:30,160 --> 00:31:32,040 Speaker 1: exactly going on in the world and how long it's 559 00:31:32,080 --> 00:31:36,440 Speaker 1: going to continue on for Thanks for listening to Bloomberg 560 00:31:36,520 --> 00:31:39,920 Speaker 1: Markets podcast. You can subscribe and listen to interviews at 561 00:31:39,920 --> 00:31:44,320 Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Bonnie Quinn. 562 00:31:44,440 --> 00:31:47,120 Speaker 1: I'm on Twitter at Bonnie Quinn, and I'm Paul Sweeney. 563 00:31:47,160 --> 00:31:49,800 Speaker 1: I'm on Twitter at pt Sweeney. Before the podcast, you 564 00:31:49,800 --> 00:31:52,240 Speaker 1: can always catch us worldwide at Bloomberg Radio.