WEBVTT - How Bob Inglis Went From Climate Change Denier to Activist 0:00:05.800 --> 0:00:08.360 Welcome to the Bloomberg p m L Podcast. I'm Pim 0:00:08.400 --> 0:00:11.440 Fox along with my co host Lisa Bramowitz. Each day 0:00:11.480 --> 0:00:15.000 we bring you the most important, noteworthy, and useful interviews 0:00:15.040 --> 0:00:17.520 for you and your money, whether you're at the grocery 0:00:17.560 --> 0:00:20.560 store or the trading floor. Find the Bloomberg p m 0:00:20.680 --> 0:00:32.360 L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. 0:00:32.400 --> 0:00:34.839 I'm excited to bring in Bob English. He's an executive 0:00:34.840 --> 0:00:38.880 director at republic e n dot Org. It's a nonprofit 0:00:38.960 --> 0:00:41.919 climate change group that he founded. He is also a 0:00:41.960 --> 0:00:45.960 former South Carolina Republican congressman both in the nineties and 0:00:46.040 --> 0:00:48.720 the two thousands, and a former climate change denier who 0:00:48.720 --> 0:00:51.880 has turned into an environmental activist. Bob, thank you so 0:00:51.960 --> 0:00:54.120 much for joining us on this day when we are 0:00:54.120 --> 0:00:57.440 going to receive, ostensibly at three pm today New York time, 0:00:57.920 --> 0:01:00.400 a decision from President Trump and whether or not the 0:01:00.480 --> 0:01:04.360 US will remain part of the Paris Accord. Bob, I 0:01:04.400 --> 0:01:07.520 want to get started with the reaction that you faced 0:01:07.920 --> 0:01:10.720 when you changed your mind and went from being a 0:01:10.760 --> 0:01:15.000 climate change denier UH to somebody who is actively advocating 0:01:15.040 --> 0:01:18.120 the need to change practices in order to preserve the environment. 0:01:18.400 --> 0:01:21.160 Why do you think you got so much pushback from 0:01:21.319 --> 0:01:25.399 fellow conservatives. Well, unfortunately, Lisa, that was during the midst 0:01:25.440 --> 0:01:28.639 of the Great Recession, and so probably not good timing 0:01:28.680 --> 0:01:32.040 on la part. But but you know, when I came 0:01:32.080 --> 0:01:34.680 to that conviction that really this is real and something 0:01:34.720 --> 0:01:38.440 we need to attend to, UM, I had to had 0:01:38.440 --> 0:01:40.639 to do that. But UM, I think it's a different 0:01:40.680 --> 0:01:45.280 situation now and numbers of Congress who are conservative, truly conservative, 0:01:46.120 --> 0:01:48.520 UM can do this more safely than I did it 0:01:49.080 --> 0:01:53.000 back in the days of the Great Recession, because when 0:01:53.000 --> 0:01:56.280 you did it, it costs you your seat, no right 0:01:56.360 --> 0:01:58.720 at that, plus some other heresies that I had committed 0:01:58.720 --> 0:02:02.680 but against became Republican orthodox at the time. You know, 0:02:02.680 --> 0:02:06.360 when it tribes under pressure, orthodox he becomes very important. 0:02:06.360 --> 0:02:10.120 And so because you're circling the wagons to protect this 0:02:10.200 --> 0:02:13.239 food supply the tribe. Right. But now that the economy 0:02:13.320 --> 0:02:18.120 is doing better and people are seeing, um, the results 0:02:18.160 --> 0:02:23.040 of how how how renewables can really feed into the grid, well, 0:02:23.240 --> 0:02:26.760 how we can repower our lives, how this is really 0:02:26.800 --> 0:02:32.440 pretty exciting free enterprise opportunity, then then they can they 0:02:32.440 --> 0:02:35.320 can state it differently and it would be a different 0:02:35.360 --> 0:02:37.919 reaction than what I got, Like I said in the 0:02:38.000 --> 0:02:40.440 dark days of the Great Recession. Well, you know, I 0:02:40.480 --> 0:02:42.200 just want to follow up with that because I'm wondering 0:02:42.240 --> 0:02:44.520 maybe you can offer some insight. I mean if you 0:02:45.160 --> 0:02:48.280 not you personally, but if one is describing himself as 0:02:48.360 --> 0:02:52.680 a conservative, why not air on the side of caution 0:02:53.000 --> 0:02:56.520 and whether climate change is man made or not, why 0:02:56.600 --> 0:03:01.320 not take action in order to mitigate it's deleterious effects. 0:03:01.360 --> 0:03:04.120 I mean, wouldn't you want to side on the you know, 0:03:04.240 --> 0:03:08.080 with caution and protect the environment even if it wasn't 0:03:08.360 --> 0:03:11.960 man made. Oh? Absolutely. In fact, I like to tell 0:03:12.000 --> 0:03:16.799 audiences sometime here's a fresh twenty bill for anybody who 0:03:16.800 --> 0:03:21.720 will call their insurance company and cancel your homeowners insurance 0:03:21.800 --> 0:03:25.680 just for tonight, because I'm pretty sure your housing gonna 0:03:25.680 --> 0:03:30.120 burn down tonight, and the this twenty dollars it's worth 0:03:30.200 --> 0:03:34.720 more than the probability of your house burning tonight. Anybody 0:03:34.760 --> 0:03:36.880 take the offer. You know, nobody can take the offer 0:03:36.960 --> 0:03:41.800 right because you buy insurance like sexuaries. The George Schultz 0:03:41.880 --> 0:03:45.440 likes to say against things that you that could be 0:03:45.480 --> 0:03:49.400 really catastrophic, And the key to it is whether it's 0:03:49.440 --> 0:03:52.440 affordable insurance. And the reality is, there is a way 0:03:52.480 --> 0:03:57.360 to make this affordable, to make essentially affordable climate insurance 0:03:57.960 --> 0:04:02.360 by doing a tax swap, taxing income, putting a tax 0:04:02.400 --> 0:04:06.200 on carbon dioxide, making it an apply to imports. So 0:04:06.360 --> 0:04:10.480 the whole world follows American leadership and essentially you buy 0:04:10.520 --> 0:04:15.640 this insurance policy that that protects us against the downside 0:04:15.720 --> 0:04:20.040 risk and it is significant of the effects of climate change. Well, Bob, 0:04:20.120 --> 0:04:23.160 I imagine that you still are in communication with a 0:04:23.240 --> 0:04:27.320 number of Republican leaders in Congress currently. Are there many 0:04:27.400 --> 0:04:31.000 others who feel similarly to you at this point, Yeah, 0:04:31.080 --> 0:04:33.240 and a lot of them are in the process of 0:04:33.279 --> 0:04:36.359 figuring out can they come out on this, you know, 0:04:36.440 --> 0:04:38.360 and really it is a little bit like coming out 0:04:39.040 --> 0:04:42.120 to come out on climates, um and so. But that's 0:04:42.200 --> 0:04:44.719 that's going to change. Just is this is that other 0:04:44.760 --> 0:04:47.839 matter change. This is changing. People are realizing that, of 0:04:47.839 --> 0:04:51.480 course you've got a problem here, and up until now, 0:04:51.520 --> 0:04:54.320 what conservatives have heard is that's a big government is 0:04:54.360 --> 0:04:56.599 going to solve it. Once they hear that there's a 0:04:56.640 --> 0:04:59.760 small government way to do this, then they can they 0:04:59.760 --> 0:05:02.200 can open to it. Right. Well, but Bob, I think 0:05:02.200 --> 0:05:05.440 that one of the main criticisms on behalf of conservatives 0:05:05.480 --> 0:05:08.400 against some of these agreements is that they impede free 0:05:08.400 --> 0:05:11.880 market activities and that they basically put a thumb on 0:05:11.920 --> 0:05:15.760 a weight on a scale. Uh, simply on a belief, 0:05:15.800 --> 0:05:18.840 but not necessarily Uh. With the knowledge of this will 0:05:18.880 --> 0:05:23.360 definitely make everything better. Yeah. Well actually yeah, if you 0:05:23.440 --> 0:05:26.480 really believe in free markets, as I do and as 0:05:26.520 --> 0:05:29.400 we do it republic Ean dot Org, then you want 0:05:29.480 --> 0:05:33.360 all the cost in on all the fuels and all 0:05:33.400 --> 0:05:38.040 the subsidies removed, and on that level playing field. We 0:05:38.120 --> 0:05:42.360 believe that free enterprise can deliver innovation faster than government 0:05:42.400 --> 0:05:46.040 mandates or fickle tax in centers could ever imagine. And 0:05:46.080 --> 0:05:51.000 so a true belief in free markets says, okay, all 0:05:51.080 --> 0:05:55.359 costs in, all subsidies out, and then compete, right, And 0:05:55.400 --> 0:05:57.680 so the government's only role is to be the honest 0:05:57.720 --> 0:06:01.599 cop on the beat that says that enforces that that 0:06:01.800 --> 0:06:05.280 level playing field. Indeed, all right, well, thanks very much, 0:06:05.440 --> 0:06:07.880 Bob English. We look forward to hearing you hearing from 0:06:07.880 --> 0:06:11.000 you in the future. Bob English is the executive director 0:06:11.080 --> 0:06:14.200 of republic E n dot Org. It is a nonprofit 0:06:14.279 --> 0:06:18.479 climate change advocacy group. He's also a former GOP and 0:06:18.560 --> 0:06:35.919 congressman from South Carolina's fourth congressional district. Well, the Miami Marlins, 0:06:35.960 --> 0:06:39.560 they didn't necessarily take on the Philadelphia Phillies yesterday in 0:06:39.640 --> 0:06:43.320 an empty stadium, but it was pretty close. About fIF 0:06:43.800 --> 0:06:48.000 hundred and ninety fans one thousand, five nine fans were 0:06:48.080 --> 0:06:51.480 in the stadium at Marlins Park for the afternoon game. 0:06:51.520 --> 0:06:54.160 So why would anyone want to buy a major League 0:06:54.200 --> 0:06:56.800 baseball team? Well, here to tell us is Chris Russo. 0:06:56.920 --> 0:07:00.000 He is the head of the sports practice at Hulhand Loki. Chris, 0:07:00.000 --> 0:07:02.280 thanks for coming into the studio, Thanks for having me. 0:07:02.360 --> 0:07:04.320 So tell me about the Marlins, because I mean this, 0:07:04.480 --> 0:07:07.760 there's been a bidding war for the Marlins. But why 0:07:07.800 --> 0:07:10.680 a bidding war for team that can can't even draw 0:07:10.760 --> 0:07:13.840 two thou spectators. Well, there's certainly have been a lot 0:07:13.880 --> 0:07:17.480 of reports over the past months about potential bids from 0:07:17.640 --> 0:07:21.640 Derek Jeter and Jeb Bush from Mitt Bromney's son, And 0:07:21.680 --> 0:07:24.320 part of the appeal is for these professional sports teams, 0:07:24.320 --> 0:07:27.080 they become pretty good businesses. The rights fees that are 0:07:27.080 --> 0:07:31.440 being paid by television have grown dramatically, Sponsorship has grown, 0:07:31.520 --> 0:07:33.960 licensing has grown, and the reality of it is there's 0:07:34.000 --> 0:07:37.040 a real scarcity of teams available. The Marlins is practically 0:07:37.040 --> 0:07:39.600 the only team that appears to be available, and there's 0:07:39.600 --> 0:07:41.240 really only been a couple of deals in the last 0:07:41.240 --> 0:07:43.800 two years among the four major leagues, So there's really 0:07:43.840 --> 0:07:46.600 a scarcity factor that drives the interest in some of 0:07:46.640 --> 0:07:51.280 these clubs. Let's say a team does want to examine 0:07:51.320 --> 0:07:54.600 the field for a buyer. Do you have a set 0:07:54.680 --> 0:07:58.240 field of potential buyers out there or is that sort 0:07:58.280 --> 0:08:01.600 of approaching anyone who has a certain amount of net 0:08:01.640 --> 0:08:03.960 income or a certain amount of wealth above a certain 0:08:04.000 --> 0:08:07.160 amount and then they've become a candidate. In recent years, 0:08:07.200 --> 0:08:11.480 the buyers have tended to be hedge fund owners, UH, 0:08:11.600 --> 0:08:15.920 technology owners and business people, high net worth individuals, and 0:08:15.920 --> 0:08:18.160 there's a universe of folks that have either tried to 0:08:18.200 --> 0:08:21.760 buy previous teams or have expressed public interest that are 0:08:21.800 --> 0:08:24.000 typically the first ones at bat when a team like 0:08:24.040 --> 0:08:26.520 this comes up. You need a lot of wealth and 0:08:26.520 --> 0:08:28.400 and you need a lot of wealth in a relatively 0:08:28.440 --> 0:08:30.400 few amount of people. So it does kind of limit 0:08:30.440 --> 0:08:33.440 the field, all right, limiting the field, but there's certainly 0:08:33.480 --> 0:08:35.200 a lot of people who want to get in on this, 0:08:35.280 --> 0:08:37.360 at least in terms of being able to stream or 0:08:37.400 --> 0:08:42.800 broadcast sports. Amazon dot Com, Hulu, Netflix, Twitter, Facebook, Are 0:08:42.840 --> 0:08:44.960 they going to drive up the prices for everybody else? 0:08:45.280 --> 0:08:50.360 I believe that those companies again Hulu, as you mentioned Netflix, 0:08:50.360 --> 0:08:53.679 that aren't currently aggressively in sports may ultimately play a 0:08:53.760 --> 0:08:58.120 role there. Uh. Amazon recently acquired NFL rights, Twitter had 0:08:58.200 --> 0:09:01.200 NFL rights last year. Facebook is now streaming baseball games. 0:09:01.400 --> 0:09:03.480 This is really good news for the sports leagues and 0:09:03.559 --> 0:09:06.400 organizations because they now have new bidders in the mix 0:09:06.520 --> 0:09:08.440 who can drive up the prices. You'll still have some 0:09:08.480 --> 0:09:11.120 of the traditional media companies involved in wanting to have 0:09:11.200 --> 0:09:13.640 those game rights, but I think that competition is good 0:09:13.640 --> 0:09:16.520 for the owners. So how much of your job is 0:09:16.880 --> 0:09:20.520 facilitating deals with people purchasing major league teams or minor 0:09:20.600 --> 0:09:23.360 league teams and how much is talking with people in 0:09:23.400 --> 0:09:26.880 the sports universe about investing their wealth, because you also 0:09:26.880 --> 0:09:29.280 you do both, right. We we focus on being an 0:09:29.280 --> 0:09:32.640 advisor on mergers and acquisitions, deals and capital raising, and 0:09:32.640 --> 0:09:35.600 in my particular case, in the sports space, that includes 0:09:35.640 --> 0:09:39.240 not only teams, though that includes sports businesses. Last year 0:09:39.280 --> 0:09:42.880 there were transactions involving companies like Formula one in UFC 0:09:43.440 --> 0:09:45.400 and liar Field Sports, and we were involved in a 0:09:45.440 --> 0:09:48.080 deal involving a company called World Golf Tour that was 0:09:48.120 --> 0:09:52.119 sold to Top Golf. So we advise businesses and potentially 0:09:52.160 --> 0:09:55.679 teams around sports transactions, really around M and A and 0:09:55.760 --> 0:09:59.240 capital raising. So you'd probably have a fantastic view into 0:09:59.360 --> 0:10:01.120 e SP and in some of the woes that we've 0:10:01.160 --> 0:10:04.520 seen there with the viewership going down, do you see 0:10:04.679 --> 0:10:08.160 a similar kind of decrease in interest across the various 0:10:08.200 --> 0:10:11.120 sports businesses that rely on consumers to pay for the 0:10:11.160 --> 0:10:14.480 consumption of sports. I don't think there's a decrease uh 0:10:14.480 --> 0:10:17.040 in interest in sports or even paying for sports. I 0:10:17.040 --> 0:10:19.040 think it's going to be done differently over time. I 0:10:19.040 --> 0:10:21.720 think consumers are going to pay more directly for the 0:10:21.760 --> 0:10:25.280 sports they consume through digital outlets, as opposed to necessarily 0:10:25.320 --> 0:10:28.680 buying big cable bundles that include sports among everything else. 0:10:28.679 --> 0:10:31.240 So I think the interest in sports is continuing to grow. 0:10:31.320 --> 0:10:33.840 I think the way sports is being delivered is changing, 0:10:33.840 --> 0:10:36.240 and it's starting to change pretty rapidly. Is there a 0:10:36.320 --> 0:10:40.880 particular sport or league that is new that would allow 0:10:41.240 --> 0:10:44.560 new entrants at lower price points. I'm thinking For example, 0:10:44.640 --> 0:10:47.640 there's drone racing league. I mean, if you want to 0:10:47.720 --> 0:10:50.560 race your drone, there's a team I guess, and you 0:10:50.559 --> 0:10:54.640 can participate. Or even watching other people play video games 0:10:54.679 --> 0:10:58.199 and get it well, it's hot, right absolutely. I let 0:10:58.200 --> 0:11:01.400 me think about the the video. Watching people play video 0:11:01.520 --> 0:11:05.840 games in an arena draws more fans then the Marlins. 0:11:05.920 --> 0:11:09.280 Drew Less sports, which is what you're referring to, has 0:11:09.320 --> 0:11:12.400 become a huge phenomenon in terms of the fandom. In 0:11:12.480 --> 0:11:15.120 terms of streaming, there's a platform called Twitch that Amazon 0:11:15.200 --> 0:11:18.920 owns enormous usage, and so I think what digital platforms 0:11:18.920 --> 0:11:21.400 do is they allow the emergence of new sports and properties, 0:11:21.400 --> 0:11:24.240 whether it is drowne racing, whether it's e sports. There's 0:11:24.280 --> 0:11:27.120 a company called flow Sports that provides coverage of of 0:11:27.200 --> 0:11:29.560 some of the you know, lesser of covered sports on 0:11:29.559 --> 0:11:32.520 TV like wrestling, and and and track and field, and 0:11:32.559 --> 0:11:35.080 so that offers new opportunities for these sports to reach 0:11:35.080 --> 0:11:38.280 an audience. So how about the traditional sports do you 0:11:38.960 --> 0:11:41.240 has your experience shown that the value of some of 0:11:41.280 --> 0:11:45.239 these Major League Baseball teams or football teams has deteriorated 0:11:45.240 --> 0:11:48.720 as these other sports come up. I think the value 0:11:48.760 --> 0:11:52.040 of these teams. The Major League teams continues to rise, 0:11:52.160 --> 0:11:55.080 in part because they're still benefiting from the large rights 0:11:55.120 --> 0:11:57.560 fees deals that are still in place from television, and 0:11:57.640 --> 0:12:00.400 also because of the scarcity value. The question will be 0:12:00.440 --> 0:12:03.720 over time, do those media whites fees continue to be large, 0:12:03.760 --> 0:12:06.280 even if they're from different sources, or does that start 0:12:06.320 --> 0:12:08.120 to level off? But right now, again, there are so 0:12:08.200 --> 0:12:10.840 few teams available in such demand for them that the 0:12:10.880 --> 0:12:13.920 pricing continues to rise. Thank you so much for joining us. 0:12:13.920 --> 0:12:16.040 A truly fascinating area and one that I know that 0:12:16.080 --> 0:12:18.480 my husband will be asking me a lot about tonight. 0:12:18.600 --> 0:12:21.480 As I can see you're getting into drone racing. Drone racing, 0:12:21.600 --> 0:12:24.960 and so what would be the like technical you can 0:12:25.000 --> 0:12:27.560 sit and use you know, you can you can watch, 0:12:27.640 --> 0:12:29.720 you can sit all right, Chris Russo, thank you so 0:12:29.800 --> 0:12:31.800 much for joining us. Chris Russo as head of sports 0:12:31.800 --> 0:12:34.920 practice at Julihan Loki, which is based in New York, 0:12:34.960 --> 0:12:38.480 talking to us about mergers and acquisition opportunities within both 0:12:38.520 --> 0:12:42.680 sports teams and sports businesses. Know him. No, I don't 0:12:42.679 --> 0:12:48.040 think drone racing. You maybe like shuffle board. What's the board? 0:12:49.400 --> 0:12:59.400 We get you a ship to play that on anyway, 0:13:00.440 --> 0:13:01.920 we want to take a moment to let you know 0:13:01.960 --> 0:13:04.920 about something new from Bloomberg. Starting right now, you can 0:13:05.000 --> 0:13:07.880 use our io s app or our new Google Chrome 0:13:07.920 --> 0:13:11.520 extension to scan any news story on any website, instantly 0:13:11.559 --> 0:13:14.400 revealing relevant news and market data from Bloomberg and other 0:13:14.400 --> 0:13:17.040 sources related to the companies and people you're reading about. 0:13:17.280 --> 0:13:19.240 So no matter where you're reading the news, you can 0:13:19.280 --> 0:13:21.800 bring the power of Bloomberg's news and data with you. 0:13:22.000 --> 0:13:25.080 It's pretty amazing. Download our Io s app or search 0:13:25.120 --> 0:13:27.320 for the Bloomberg extension on the Chrome Store to try 0:13:27.320 --> 0:13:30.440 it out. Learn more at Bloomberg dot com slash lens. 0:13:40.000 --> 0:13:43.240 It has been a painful year for anybody looking to 0:13:43.320 --> 0:13:48.640 invest really conservatively, given the fact that gold and silver 0:13:48.800 --> 0:13:52.679 and some of the safe haven trades have not delivered 0:13:52.720 --> 0:13:55.840 the results that many were hoping. Michael Cogo is President 0:13:55.920 --> 0:13:59.800 portfolio manager of the Permanent Portfolio family of funds, which 0:13:59.800 --> 0:14:03.560 over sees about three billion dollars, and he joins us now. Michael, 0:14:04.040 --> 0:14:07.280 I was looking at your Permanent portfolio. It's a two 0:14:07.280 --> 0:14:10.200 point eight billion dollar fund, uh and I was looking 0:14:10.200 --> 0:14:14.600 at some of the top investments with gold, silver treasuries. 0:14:15.120 --> 0:14:17.679 These have not been assets that have been as reliable 0:14:17.720 --> 0:14:20.640 this year. Do you still think that they are a 0:14:20.640 --> 0:14:22.960 worthwhile Betton? Do you think that we are going to 0:14:23.040 --> 0:14:27.120 move to a more risk off environment anytime soon? Good morning, Lisa, 0:14:27.160 --> 0:14:29.520 Thanks for having me. Um. You know, yeah, I think 0:14:29.520 --> 0:14:32.480 there's always room for diversified investing, and that's what we 0:14:32.600 --> 0:14:35.920 do in our permanent portfolio. So I wouldn't say gold 0:14:35.960 --> 0:14:38.840 and silver have had awful years. They you know, they're 0:14:38.880 --> 0:14:43.160 doing okay there. But but realistically, right now, given the 0:14:43.720 --> 0:14:47.400 interest rate curve, given corporate earnings, given the likelihood of 0:14:47.440 --> 0:14:52.280 additional growth, UM kind of a bent towards policy, tax regulation, 0:14:52.520 --> 0:14:54.640 at least that's what we're all expecting at some point 0:14:54.640 --> 0:14:58.560 in time. Um, there is a little resistance two stocks 0:14:58.600 --> 0:15:01.360 continuing to drift up and and so that's what happened. 0:15:01.360 --> 0:15:05.240 And so while we would advocate a healthy UH investment 0:15:05.240 --> 0:15:08.760 in stocks as well because that is a growth asset class, 0:15:09.000 --> 0:15:12.200 we also diversify ourselves among a bunch of other asset 0:15:12.240 --> 0:15:14.960 classes just in the event that the economy turns to 0:15:15.000 --> 0:15:18.720 account for multiple scenarios to profit but also protect against 0:15:18.800 --> 0:15:21.360 downside risk. So I think there's always a good time 0:15:21.400 --> 0:15:24.520 to be diversified and to hedge your bets even in 0:15:25.120 --> 0:15:28.000 a positive stock market environment. All right, Michael, I wonder 0:15:28.000 --> 0:15:30.040 if you could tell us what is the most unloved 0:15:30.080 --> 0:15:33.640 investment category that you've been presented with over the last quarter. 0:15:35.400 --> 0:15:40.480 I would say probably energy, UM, materials, and UH and 0:15:40.960 --> 0:15:45.080 maybe financials from an equity market standpoint. Um, you know, 0:15:45.160 --> 0:15:48.680 because some of those trades had had a good bump 0:15:48.760 --> 0:15:54.280 post election on expectations UM of those types of industries outperforming. 0:15:54.720 --> 0:15:57.560 Yet while the economy is still growing, the economy so 0:15:57.640 --> 0:15:59.800 far this year sort of continues to look a lot 0:15:59.840 --> 0:16:02.120 like the last couple of years. And so we don't 0:16:02.160 --> 0:16:03.680 know where we're gonna end up in Q two. But 0:16:03.840 --> 0:16:06.880 Q one wasn't great, um, and so you're still looking 0:16:06.920 --> 0:16:09.760 at this sort of one to two percent kind of 0:16:09.800 --> 0:16:14.280 annualized GDP growth. I think everybody expects this catalyst through 0:16:14.320 --> 0:16:18.080 policy and tax and less regulation, and but but to 0:16:18.200 --> 0:16:21.080 date nothing has been passed, and so you've had incremental 0:16:21.160 --> 0:16:23.480 gains in that area, and as a result, you haven't 0:16:23.520 --> 0:16:27.120 had the the economic momentum to get us to high 0:16:27.160 --> 0:16:29.960 two to three percent GDP. So, as a result, the 0:16:29.960 --> 0:16:33.720 stocks that would benefit in that environment, the energies, the 0:16:33.720 --> 0:16:37.120 the you know, the transports, the financials, the industrials. It's 0:16:37.120 --> 0:16:39.200 been a lot more of a mixed picture in those 0:16:39.240 --> 0:16:42.560 types of industries, and people have reverted to the you know, 0:16:42.600 --> 0:16:45.720 the high profile you know, Fang plus five type stocks 0:16:45.800 --> 0:16:49.600 and and other types of growth names, and that's where 0:16:49.600 --> 0:16:51.840 a lot of liquidity has gone as well. Michael, I'd 0:16:51.840 --> 0:16:53.720 love to get your take on some comments that we 0:16:53.840 --> 0:16:56.520 heard earlier in the show from Leo Groshowski. He's the 0:16:56.560 --> 0:16:59.640 chief investment officer B and Y Melon Wealth Management, and 0:16:59.680 --> 0:17:02.760 he was saying that he does think that that the 0:17:02.800 --> 0:17:06.000 market is still has value the stock market US stock 0:17:06.000 --> 0:17:09.600 market in particular, he's going into emerging markets. He's basically 0:17:10.240 --> 0:17:14.720 going for the risk on trade, including technology shares as 0:17:14.720 --> 0:17:17.480 well as others. I'm wondering, do you agree with that assessment. 0:17:17.520 --> 0:17:19.720 Do you think that that is the correct bet for 0:17:19.800 --> 0:17:23.600 somebody generally sort of use that as a guiding principle 0:17:24.080 --> 0:17:27.840 while making allocations right now? I sure do, and I think, 0:17:27.880 --> 0:17:30.920 you know, we talked about our permanent portfolio being somewhat 0:17:31.119 --> 0:17:34.480 conservative and and sort of you know, a downside risk protector, 0:17:34.560 --> 0:17:37.159 but we also invested to make up for that to 0:17:37.240 --> 0:17:40.520 provide growth in our portfolio. We tend to invest in growth, 0:17:40.600 --> 0:17:43.840 high beta, high volatility type stocks to give us give 0:17:43.840 --> 0:17:47.280 our portfolios some some growth movement. And so I think 0:17:47.320 --> 0:17:50.320 in the stock market, I believe there's always value UM. 0:17:50.400 --> 0:17:52.960 And I think where you you look right now, you 0:17:53.000 --> 0:17:55.280 would look to the areas that have not kept up 0:17:55.280 --> 0:17:57.840 with the broad market UM. And I think some of 0:17:57.840 --> 0:18:00.560 the sectors that I mentioned would would probably get you there, 0:18:00.880 --> 0:18:04.600 and those are the sort of risk on growth oriented names. 0:18:04.600 --> 0:18:06.720 So I would totally be in line with that way 0:18:06.760 --> 0:18:10.760 of thinking, and probably our own equity based investments and 0:18:10.800 --> 0:18:13.760 where we're looking for value would would mirror that type 0:18:13.760 --> 0:18:15.960 of thinking. Now, you've got to have a strong stomach. 0:18:16.000 --> 0:18:18.280 That's not where the market has been so far this year, 0:18:18.560 --> 0:18:23.680 but looking forward, UM, where the values might be going forward, UM, 0:18:23.760 --> 0:18:26.200 I think that is the way to go. I mean, 0:18:26.440 --> 0:18:28.920 keep in mind, the last several years, you've had very 0:18:28.960 --> 0:18:32.000 low cost capital that's been buying stocks and bonds, and 0:18:32.040 --> 0:18:34.840 as a result, there's definitely some sectors. And keeping mind 0:18:34.840 --> 0:18:37.320 with low interest rates, you know, people have been searching 0:18:37.320 --> 0:18:40.040 for yields, So there's definitely some sectors that have gotten 0:18:40.359 --> 0:18:43.919 richly valued. The the yield equivalence in the stock market, 0:18:43.960 --> 0:18:47.040 the consumers, UM, you know, those sorts of things that 0:18:47.280 --> 0:18:51.680 people are still investing in, and UH, from a value standpoint, 0:18:51.680 --> 0:18:53.560 you probably want to move away from those and into 0:18:53.600 --> 0:18:56.720 some other things that haven't kept up that the prices 0:18:56.760 --> 0:18:59.639 are less and have more growth potential going forward the 0:18:59.680 --> 0:19:02.160 next for years. Well, Michael, let's say that you don't 0:19:02.200 --> 0:19:05.359 have a strong stomach for any of this, and that 0:19:06.040 --> 0:19:09.120 you know you perhaps think of actually taking some profits. 0:19:09.119 --> 0:19:12.679 How can we never hear anybody say, gee, sell a 0:19:12.720 --> 0:19:15.320 little bit. There's nothing wrong with taking a profit. You're 0:19:15.359 --> 0:19:20.040 never gonna go broke taking profits. I I agree. I mean, 0:19:20.440 --> 0:19:24.440 I think in this environment, after an eight plus year 0:19:24.560 --> 0:19:28.200 bull market in stocks and bonds, that you know, that's 0:19:28.200 --> 0:19:31.240 not to say that they will correct in and of themselves. 0:19:31.240 --> 0:19:33.320 I mean, usually it takes more than just somebody saying 0:19:33.359 --> 0:19:36.800 it's time for correction, UM. And the economic data isn't 0:19:36.840 --> 0:19:40.080 supporting a recession or anything like that right now, and 0:19:40.119 --> 0:19:42.879 so you've had UH stocks continue to go up for 0:19:42.920 --> 0:19:44.840 the reasons I mentioned. Corporate earnings have been good in 0:19:44.840 --> 0:19:48.400 the last three quarters. UM. But there's never a bad 0:19:48.440 --> 0:19:50.400 time to take some money off the table. And I mean, 0:19:50.520 --> 0:19:52.760 I think what we're hearing from our investor base a 0:19:52.800 --> 0:19:55.720 lot lately has been okay, I still want to make 0:19:55.720 --> 0:19:57.439 some money in the pocket. I think it has more 0:19:57.520 --> 0:19:59.920 room to run, or maybe it's getting close to the 0:20:00.080 --> 0:20:02.320 time that I pull back, But we're starting to hear 0:20:02.400 --> 0:20:05.640 more people talk about what's coming next, taking some money 0:20:05.640 --> 0:20:08.600 off the table, putting some some investments in even in 0:20:08.680 --> 0:20:12.200 something like our fund that that is in stocks only, 0:20:12.520 --> 0:20:15.719 you know, as a hedge against maybe the fact that 0:20:15.760 --> 0:20:18.080 the stock market won't go on at this rate forever. 0:20:18.200 --> 0:20:20.400 So I think it's never a bad time to take 0:20:20.440 --> 0:20:23.760 money to take profits. UM. Keeping what you earned along 0:20:23.800 --> 0:20:26.080 the way is as important as making it, and I 0:20:26.119 --> 0:20:30.040 do think sometimes people forget that. So i'd agree with you, Michael. 0:20:30.040 --> 0:20:35.720 What's the most contrarian bet. The most contrarian bet right now, 0:20:35.760 --> 0:20:40.439 I would say would be probably equity investments in energy 0:20:40.480 --> 0:20:43.440 and materials UM for a lot of the reasons I've 0:20:43.480 --> 0:20:47.560 given UM, and probably the financials as well. Uh. I 0:20:48.000 --> 0:20:51.000 think that in the longer term that's where a lot 0:20:51.000 --> 0:20:53.840 of value is in the stock market. And uh, you know, 0:20:53.880 --> 0:20:57.880 we certainly have strong investments there UM. But it's it's 0:20:57.920 --> 0:21:02.600 been tough riding them at the moment um. But again, 0:21:02.760 --> 0:21:05.320 we we think we tend to think out, you know, two, 0:21:05.520 --> 0:21:07.719 three or five years out with a lot of our 0:21:07.760 --> 0:21:10.280 investments and uh and so you know, we do have 0:21:10.320 --> 0:21:12.400 the strong stomach to wait, to wait the story out 0:21:12.440 --> 0:21:14.600 and hopefully it it plays out the way we think 0:21:14.640 --> 0:21:18.120 it will. But yeah, that's the Conturian move right now. 0:21:18.160 --> 0:21:20.159 You know, we're we're not in a lot of the 0:21:20.840 --> 0:21:24.640 high profile um fang type of stocks. I think they're 0:21:24.680 --> 0:21:28.840 all great businesses from a consumer standpoint um, but a 0:21:28.840 --> 0:21:30.359 lot of them are very pricey. I mean, we do 0:21:30.440 --> 0:21:34.199 own Facebook, but uh yeah, we gotta I got we 0:21:34.200 --> 0:21:35.560 gotta leave it there. But I want to thank you 0:21:35.640 --> 0:21:38.639 very much. Michael Cogino. He is the president and portfolio 0:21:38.680 --> 0:21:41.720 manager of the Permanent Portfolio family of funds, helping to 0:21:41.760 --> 0:21:58.119 manage approximately three billion dollars, based in San Francisco. This 0:21:58.200 --> 0:22:01.400 is Bloomberg Markets on him Fox along with Lisa abrama Witz, 0:22:01.440 --> 0:22:04.600 and we've been speaking about low stock market volatility. A 0:22:04.600 --> 0:22:06.399 lot of people are looking for any action in the 0:22:06.440 --> 0:22:09.560 months of April or may probably didn't get it. Here 0:22:09.600 --> 0:22:12.280 to tell us more about it is Laura Keller Financial 0:22:12.320 --> 0:22:16.120 reporter for Bloomberg. Laura, maybe you could just describe has 0:22:16.200 --> 0:22:19.440 been has this period of time, this May and April 0:22:19.440 --> 0:22:23.200 time frame, has this been unduly low when it comes 0:22:23.200 --> 0:22:26.560 to volatility? Oh? Yes, Phim, that very much has been. 0:22:26.640 --> 0:22:28.680 When we were looking back at the VIX index, which 0:22:29.080 --> 0:22:31.480 is really the best measure, um what most people use, 0:22:31.840 --> 0:22:34.560 I mean, it's really near a record low, and it's 0:22:34.600 --> 0:22:38.280 been that way close to ten points on that VIX index, 0:22:38.800 --> 0:22:41.120 uh for the last month. So it's really just been 0:22:41.359 --> 0:22:44.240