1 00:00:13,680 --> 00:00:17,440 Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast. 2 00:00:17,640 --> 00:00:20,400 Speaker 1: I'm Mike Reagan, a senior editor at Bloomberg, and I'm 3 00:00:20,440 --> 00:00:24,360 Speaker 1: Baldana Hick, Across Acid, reporter at Bloomberg. This week on 4 00:00:24,400 --> 00:00:26,759 Speaker 1: the show, well, when I was a kid, we didn't 5 00:00:26,760 --> 00:00:29,720 Speaker 1: have the internet, we didn't have video games. There are 6 00:00:29,720 --> 00:00:32,880 Speaker 1: only three channels on the TV, but we did have 7 00:00:32,960 --> 00:00:36,080 Speaker 1: aluminum cans. So most nights in the warmer weather, all 8 00:00:36,080 --> 00:00:38,800 Speaker 1: the neighborhood kids would gather in someone's yard and play 9 00:00:38,800 --> 00:00:41,920 Speaker 1: a game called kick the can. And guess what. That's 10 00:00:41,960 --> 00:00:44,760 Speaker 1: exactly what Congress did this week. They kicked the can 11 00:00:44,880 --> 00:00:47,520 Speaker 1: down the road on the topic of raising the US 12 00:00:47,600 --> 00:00:50,280 Speaker 1: debt ceiling, and that has obviously been one of the 13 00:00:50,280 --> 00:00:53,199 Speaker 1: issues that was causing investor sentiment to deteriorate in the 14 00:00:53,280 --> 00:00:58,080 Speaker 1: last month. The markets have reacted euphorically. What was that really? 15 00:00:58,120 --> 00:01:01,360 Speaker 1: It was that all that was keeping benchmark indexes from 16 00:01:01,360 --> 00:01:04,240 Speaker 1: returning to record highs. We'll get into it with the 17 00:01:04,319 --> 00:01:08,280 Speaker 1: chief US echoity strategist at a big bank, and as always, 18 00:01:08,360 --> 00:01:10,520 Speaker 1: we'll close out the episode with the craziest thing we 19 00:01:10,560 --> 00:01:13,040 Speaker 1: saw in markets this week. So if you saw anything, 20 00:01:13,440 --> 00:01:16,360 Speaker 1: call us on the Craziest Things hotline at six or 21 00:01:16,440 --> 00:01:20,360 Speaker 1: six three two four three four nine zero. Leave us 22 00:01:20,400 --> 00:01:22,320 Speaker 1: a voicemail and maybe we'll play it on the show 23 00:01:23,440 --> 00:01:25,319 Speaker 1: Phil Dona. Did you play Kick the Can when you're 24 00:01:25,360 --> 00:01:28,520 Speaker 1: a kid? I didn't, And I cannot even believe that 25 00:01:28,560 --> 00:01:31,320 Speaker 1: this was a real game. Why it's it's totally a 26 00:01:31,360 --> 00:01:34,680 Speaker 1: real game because you could use the ball like a 27 00:01:34,760 --> 00:01:37,639 Speaker 1: soccer ball. The can was I don't know why, maybe, 28 00:01:37,680 --> 00:01:39,480 Speaker 1: but the can was much better for some reason. It 29 00:01:39,560 --> 00:01:41,240 Speaker 1: made the noise you got. You would fill it with 30 00:01:41,360 --> 00:01:44,160 Speaker 1: rocks and then you'd get that noise anyway, How would 31 00:01:44,160 --> 00:01:45,880 Speaker 1: you close the can if you fill it with rocks? 32 00:01:47,280 --> 00:01:50,160 Speaker 1: You just strapped the little pebbles inside and then make 33 00:01:50,240 --> 00:01:54,760 Speaker 1: them anyway. Okay, well it just sounds so fun. That 34 00:01:54,840 --> 00:01:58,800 Speaker 1: have sounded really genuine. Anyway, maybe there's like a video 35 00:01:58,920 --> 00:02:00,840 Speaker 1: version of Kick the Can can play. But this is 36 00:02:00,960 --> 00:02:03,880 Speaker 1: this is what they refer to, uh problem, this sort 37 00:02:03,880 --> 00:02:07,440 Speaker 1: of problem solving like we saw in the European debt crisis, 38 00:02:07,480 --> 00:02:10,000 Speaker 1: when every week they'd kick the can further down the 39 00:02:10,080 --> 00:02:12,280 Speaker 1: road and the markets would go nuts, and then the 40 00:02:12,320 --> 00:02:14,680 Speaker 1: problem would return in a week and they'd kick it again. 41 00:02:14,760 --> 00:02:17,639 Speaker 1: But let's get into it with our guests. Shall we 42 00:02:17,680 --> 00:02:19,680 Speaker 1: Evil do La? Do you know our guest also has 43 00:02:19,680 --> 00:02:22,760 Speaker 1: a podcast, and not only that, her podcast has slides 44 00:02:22,840 --> 00:02:25,920 Speaker 1: attached to it. I think we need slides with podcasts. Yeah, 45 00:02:25,919 --> 00:02:28,600 Speaker 1: she's a she's an inspiration and I listened to her podcast. 46 00:02:28,760 --> 00:02:32,040 Speaker 1: She comes out with reports beforehand, then the podcast to 47 00:02:32,120 --> 00:02:34,400 Speaker 1: tell you what the report was all about in a 48 00:02:34,440 --> 00:02:37,720 Speaker 1: sort of quick snippet, which I think is great, a 49 00:02:37,760 --> 00:02:41,400 Speaker 1: better way, more organized than our podcast, which I'm amazed 50 00:02:41,400 --> 00:02:44,839 Speaker 1: it even happened some weeks with me too technical difficulties. 51 00:02:45,120 --> 00:02:47,320 Speaker 1: Let's bring our guests in. Her name is Lori Calvacina. 52 00:02:47,440 --> 00:02:51,240 Speaker 1: She's the head of US equity strategy at RBC Capital Markets. Laurie, 53 00:02:51,280 --> 00:02:54,480 Speaker 1: welcome back to the show. Thanks so much for having me. 54 00:02:54,600 --> 00:02:56,560 Speaker 1: I mean, I'll say, you know, you guys know I've 55 00:02:56,560 --> 00:02:58,720 Speaker 1: been a fan of this podcast in the past, and 56 00:02:58,800 --> 00:03:01,160 Speaker 1: when you guys started putting out, I think I did mind. 57 00:03:01,200 --> 00:03:02,880 Speaker 1: You know, maybe like a year or so later, but 58 00:03:03,560 --> 00:03:05,960 Speaker 1: you guys definitely help get my creative juice is flowing. 59 00:03:06,040 --> 00:03:07,560 Speaker 1: So it's an honor to be here, you know, in 60 00:03:07,840 --> 00:03:10,200 Speaker 1: many ways as a listener and um, you know, as 61 00:03:10,200 --> 00:03:13,080 Speaker 1: someone who's taken some inspiration for you guys. Oh that's 62 00:03:13,600 --> 00:03:15,120 Speaker 1: nice to you to say you're showing us up with 63 00:03:15,160 --> 00:03:16,679 Speaker 1: the slides, though, Laurie, I want to I want to 64 00:03:16,680 --> 00:03:18,560 Speaker 1: see how we can get some slides to attach it 65 00:03:18,720 --> 00:03:21,520 Speaker 1: to ours. I have enough problems with the basic podcast 66 00:03:21,840 --> 00:03:25,560 Speaker 1: cast technology. I'm not sure I want to add Laurie's. 67 00:03:25,639 --> 00:03:27,160 Speaker 1: It's been a while since you've been on the show. 68 00:03:27,280 --> 00:03:30,080 Speaker 1: I know you had a new baby. Congratulations. I'm jealous. 69 00:03:30,200 --> 00:03:33,519 Speaker 1: I love babies. Thank you. He's he's not a baby anymore. 70 00:03:33,600 --> 00:03:38,080 Speaker 1: My pandemic baby is thirteen months old. Now. Yeah, he's awesome. 71 00:03:38,120 --> 00:03:41,360 Speaker 1: Hopefully he will you know he will. He will continue 72 00:03:41,400 --> 00:03:43,120 Speaker 1: to do his cute little things for a while. But yeah, 73 00:03:43,160 --> 00:03:45,720 Speaker 1: he's not a baby anymore. I had that realization that's 74 00:03:46,000 --> 00:03:48,880 Speaker 1: not too fast. That's an adorable age. And enjoy them 75 00:03:48,880 --> 00:03:51,920 Speaker 1: before they get old enough where they're roasting you on TikTok, 76 00:03:52,040 --> 00:03:56,160 Speaker 1: like my kids are very, very unfortunate. But lord, let's 77 00:03:56,160 --> 00:03:57,880 Speaker 1: get into this whole idea. I know you spent a 78 00:03:57,920 --> 00:04:02,720 Speaker 1: lot of time looking at and measuring investors sentiment and 79 00:04:02,760 --> 00:04:05,760 Speaker 1: it had really, you know, turned south there in September. 80 00:04:05,800 --> 00:04:10,400 Speaker 1: It it really gotten pretty poor, um, you know, and 81 00:04:10,400 --> 00:04:13,280 Speaker 1: it's always hard to tell exactly to sort of quantify 82 00:04:13,320 --> 00:04:16,840 Speaker 1: and dissect what's causing it. But we have seen this, 83 00:04:17,160 --> 00:04:19,760 Speaker 1: you know, strong reaction to the market by the fact 84 00:04:19,800 --> 00:04:22,880 Speaker 1: that Congress was able to at least postpone the day 85 00:04:22,920 --> 00:04:27,159 Speaker 1: of reckoning for the debt ceiling issue. Um, did that 86 00:04:27,200 --> 00:04:29,880 Speaker 1: surprise you that that was that much of sort of 87 00:04:29,880 --> 00:04:32,240 Speaker 1: a weight around the market's neck? I mean, is this 88 00:04:32,600 --> 00:04:34,080 Speaker 1: clearing this out of the way, Is that enough to 89 00:04:34,120 --> 00:04:37,480 Speaker 1: sort of say, blue guys ahead or what? Well, Mike, 90 00:04:37,520 --> 00:04:39,159 Speaker 1: I think you know, you you've kind of stolen my 91 00:04:39,200 --> 00:04:41,400 Speaker 1: craziest thing, which was you know, the reaction to the 92 00:04:41,839 --> 00:04:44,040 Speaker 1: de ceiling deal was you know, sort of the crazy 93 00:04:44,080 --> 00:04:46,440 Speaker 1: thing to me because I had the same thought you did. 94 00:04:46,480 --> 00:04:48,560 Speaker 1: That we knew that this was something that was weighing 95 00:04:48,600 --> 00:04:51,040 Speaker 1: on investor sentiment one of many things, right, but you know, 96 00:04:51,080 --> 00:04:53,560 Speaker 1: there's a pretty long list right now. But you know, 97 00:04:53,680 --> 00:04:56,600 Speaker 1: I think that the conventional wisdom, right is they always, 98 00:04:56,760 --> 00:04:58,839 Speaker 1: you know, this this issue comes up every few years. 99 00:04:58,839 --> 00:05:01,640 Speaker 1: They always figure out way to avoid financial arm again 100 00:05:01,640 --> 00:05:03,560 Speaker 1: and get it done. And a lot of people I 101 00:05:03,600 --> 00:05:05,920 Speaker 1: was even out talking to clients this week about this issue, 102 00:05:06,440 --> 00:05:10,200 Speaker 1: UM in person actually, and you know, the responses while 103 00:05:10,200 --> 00:05:12,080 Speaker 1: they always get it done. You know, I've learned to 104 00:05:12,080 --> 00:05:14,279 Speaker 1: sort of ignore this issue. There's a lot of noise 105 00:05:14,360 --> 00:05:16,479 Speaker 1: and then lo and behold. You know, we see this 106 00:05:16,600 --> 00:05:20,000 Speaker 1: enormous reaction in markets today. So look, I think it 107 00:05:20,080 --> 00:05:23,240 Speaker 1: probably was a little bit different this time just because 108 00:05:23,480 --> 00:05:26,480 Speaker 1: it did seem it just wasn't clear how they were 109 00:05:26,520 --> 00:05:29,039 Speaker 1: going to get to resolution. It did seem like, um, 110 00:05:29,120 --> 00:05:31,600 Speaker 1: there was a little bit more than theater this time around, 111 00:05:31,640 --> 00:05:33,440 Speaker 1: So maybe that worry was a little bit deeper than 112 00:05:33,480 --> 00:05:36,919 Speaker 1: a lot of us were letting on and lur the 113 00:05:37,040 --> 00:05:39,200 Speaker 1: dead ceiling was one of the things that was sort 114 00:05:39,200 --> 00:05:42,599 Speaker 1: of weighing on markets up until now. And I'm hoping 115 00:05:42,640 --> 00:05:45,200 Speaker 1: you can sort of talk about what else is behind 116 00:05:45,200 --> 00:05:47,920 Speaker 1: the two way volatility that we've seen from markets where 117 00:05:47,960 --> 00:05:50,760 Speaker 1: we're seeing these you know, one percent updates followed by 118 00:05:50,760 --> 00:05:53,760 Speaker 1: one percent down days followed by one percent updates, and 119 00:05:54,240 --> 00:05:57,680 Speaker 1: what does it all mean for investors? So look, you know, 120 00:05:57,720 --> 00:05:59,800 Speaker 1: I think if we're just thinking about the past, maybe 121 00:05:59,800 --> 00:06:02,200 Speaker 1: like two weeks, because I think that question might have 122 00:06:02,279 --> 00:06:03,960 Speaker 1: a different answer if we went back to you know, 123 00:06:04,000 --> 00:06:05,599 Speaker 1: to kind of a month ago. But I think over 124 00:06:05,640 --> 00:06:07,800 Speaker 1: the past couple of weeks. I think the sort of 125 00:06:07,960 --> 00:06:10,560 Speaker 1: jarring move that we had in the treasury yield, the 126 00:06:10,600 --> 00:06:14,400 Speaker 1: tenure yield, was something we certainly heard about from a 127 00:06:14,400 --> 00:06:17,279 Speaker 1: lot of investors. UM. And you know, when it's always, 128 00:06:17,279 --> 00:06:19,000 Speaker 1: you know, when you kind of get into these discussions 129 00:06:19,000 --> 00:06:21,719 Speaker 1: with people, it's never the direction or the magnitude of 130 00:06:21,720 --> 00:06:23,679 Speaker 1: the move, it's the speed of the move that tends 131 00:06:23,720 --> 00:06:25,680 Speaker 1: to to sort of freak people out. I think we 132 00:06:25,720 --> 00:06:28,480 Speaker 1: did have a very quick move here, UM. And you know, 133 00:06:28,560 --> 00:06:30,839 Speaker 1: we we did an investor survey at the end of 134 00:06:30,880 --> 00:06:33,520 Speaker 1: September and we actually give people a write in question 135 00:06:33,600 --> 00:06:35,120 Speaker 1: and we say, you know, what keeps you up at night, 136 00:06:35,160 --> 00:06:38,160 Speaker 1: what's on your mind? And we had one person right 137 00:06:38,200 --> 00:06:41,680 Speaker 1: into that survey as their free response, UM, sort of 138 00:06:41,680 --> 00:06:45,360 Speaker 1: the rapid rotation from growth back to value, which we're 139 00:06:45,360 --> 00:06:48,760 Speaker 1: not positioned for. And so I think it's also it's 140 00:06:48,800 --> 00:06:51,440 Speaker 1: not just what's happening on the macro variable. It's the 141 00:06:51,440 --> 00:06:53,760 Speaker 1: fact that it happened quickly and people weren't set up 142 00:06:53,760 --> 00:06:55,680 Speaker 1: for it. And you saw a fierce rotation out of 143 00:06:55,680 --> 00:06:57,920 Speaker 1: technology stocks, which have been the you know, the long 144 00:06:58,040 --> 00:07:00,960 Speaker 1: term favorites of a lot of investors. And I think 145 00:07:00,960 --> 00:07:02,640 Speaker 1: people sort of new in the back of their heads. 146 00:07:02,680 --> 00:07:04,200 Speaker 1: You know, we think rates might go up, We think 147 00:07:04,240 --> 00:07:06,120 Speaker 1: financials are going to catch a bit. But the fact 148 00:07:06,160 --> 00:07:08,760 Speaker 1: that it happens so quickly that everybody's favorites talks in 149 00:07:08,760 --> 00:07:11,480 Speaker 1: the stocks in the tech sector flips so quickly, I 150 00:07:11,480 --> 00:07:13,480 Speaker 1: think it was just a combination of all of that 151 00:07:13,880 --> 00:07:16,200 Speaker 1: on that really jarred markets over the last week or so. 152 00:07:17,240 --> 00:07:19,960 Speaker 1: We'll talk to us about that notion of growth and value. 153 00:07:20,000 --> 00:07:23,400 Speaker 1: I mean, it's it's obviously been the lemma all year. 154 00:07:23,680 --> 00:07:26,320 Speaker 1: You know, how long we'll we'll value out perform, and 155 00:07:26,360 --> 00:07:29,080 Speaker 1: then it stopped out performing. And now you know, it 156 00:07:29,080 --> 00:07:32,480 Speaker 1: looks like the conditions are in place for for that, 157 00:07:32,760 --> 00:07:34,640 Speaker 1: you know, to that trade to come back. I mean, 158 00:07:34,800 --> 00:07:38,520 Speaker 1: are we poised for some more value out performance going forward? 159 00:07:38,560 --> 00:07:41,480 Speaker 1: Do you think? I think so? And we've we've tried 160 00:07:41,520 --> 00:07:43,840 Speaker 1: to not be too cute in our recommendations, you know, 161 00:07:43,880 --> 00:07:46,960 Speaker 1: we're sort of stopping the conversation in terms of you know, 162 00:07:47,080 --> 00:07:49,560 Speaker 1: we like value, we like growth. We're trying to say, 163 00:07:49,600 --> 00:07:51,560 Speaker 1: just have exposure to both. We think it's going to 164 00:07:51,600 --> 00:07:54,320 Speaker 1: be a very choppery leadership environment oversay the next year 165 00:07:54,400 --> 00:07:56,520 Speaker 1: year and a half. So that's how we've positioned everything. 166 00:07:56,880 --> 00:07:59,040 Speaker 1: But I think the really interesting conversation is, you know, 167 00:07:59,080 --> 00:08:02,040 Speaker 1: sort of why and different time frames we see. So 168 00:08:02,280 --> 00:08:04,480 Speaker 1: really since I think kind of early August, we changed 169 00:08:04,520 --> 00:08:06,920 Speaker 1: all those positioning calls, and the framework we tried to 170 00:08:07,000 --> 00:08:09,000 Speaker 1: lay out was at the time at least we said, look, 171 00:08:09,000 --> 00:08:11,840 Speaker 1: there have been some very clear pressures on the value 172 00:08:11,880 --> 00:08:14,280 Speaker 1: trade that have caused people to shift back into growth. 173 00:08:14,280 --> 00:08:16,560 Speaker 1: And at the time it was the delta variant UM, 174 00:08:16,600 --> 00:08:18,640 Speaker 1: it was some of the supply chain pressures which we're 175 00:08:18,680 --> 00:08:22,160 Speaker 1: having an impact on value earnings revisions UM, and a 176 00:08:22,160 --> 00:08:24,080 Speaker 1: lot of it was COVID to be honest, UM, that 177 00:08:24,200 --> 00:08:25,920 Speaker 1: was there was still a lot of uncertainty there and 178 00:08:25,960 --> 00:08:28,800 Speaker 1: no influencing things like the Michigan sentiment data UM. But 179 00:08:28,880 --> 00:08:30,320 Speaker 1: we said, look, you know, we're going to come out 180 00:08:30,320 --> 00:08:33,000 Speaker 1: of this. We think Wall Street has not really you know, 181 00:08:33,080 --> 00:08:35,320 Speaker 1: sort of properly baked in a lot of the things 182 00:08:35,360 --> 00:08:36,720 Speaker 1: we went through at the end of the summer, but 183 00:08:36,720 --> 00:08:38,080 Speaker 1: we're going to come out of that. And when we 184 00:08:38,120 --> 00:08:40,600 Speaker 1: come out of that, we think you'll see another big 185 00:08:40,720 --> 00:08:44,000 Speaker 1: kind of intermediate term pop in the value trade UM. 186 00:08:44,080 --> 00:08:45,959 Speaker 1: And we said, you know, it's we think it in 187 00:08:46,240 --> 00:08:48,400 Speaker 1: some time in a sort of mid till late next year, 188 00:08:48,480 --> 00:08:51,320 Speaker 1: so there's an expiration date on that trade um and 189 00:08:51,360 --> 00:08:54,040 Speaker 1: we think growth leadership will eventually take over again late 190 00:08:54,080 --> 00:08:56,480 Speaker 1: next year. But that was really the framework we tried 191 00:08:56,520 --> 00:08:59,120 Speaker 1: to put out there was, Yes, we're gonna get another 192 00:08:59,160 --> 00:09:01,960 Speaker 1: big move in the value you trade, don't get too comfortable, 193 00:09:01,960 --> 00:09:03,880 Speaker 1: and it don't expect it's going to be the beginning 194 00:09:03,880 --> 00:09:06,000 Speaker 1: of kind of a five year type cycle because growth 195 00:09:06,040 --> 00:09:07,520 Speaker 1: is going to take back over, but we're going to 196 00:09:07,600 --> 00:09:09,640 Speaker 1: have this sort of nice, you know, kind of move 197 00:09:09,679 --> 00:09:12,319 Speaker 1: in financials and energy and things like that for a while. 198 00:09:12,800 --> 00:09:15,040 Speaker 1: The interesting, you know, sort of set up for me 199 00:09:15,960 --> 00:09:17,240 Speaker 1: was if you if you kind of look at the 200 00:09:17,320 --> 00:09:20,760 Speaker 1: valuation data, there's a lot of room for value to 201 00:09:20,880 --> 00:09:23,240 Speaker 1: beat growth. There's a lot of room for cyclicals to 202 00:09:23,320 --> 00:09:25,840 Speaker 1: do well versus secular growth. I look at small cash right, 203 00:09:25,880 --> 00:09:28,120 Speaker 1: small cats are still very cheap versus large caps. So 204 00:09:28,120 --> 00:09:29,959 Speaker 1: we said, you know, the room is there from the 205 00:09:30,040 --> 00:09:33,960 Speaker 1: valuation perspective. We knew that COVID trends had been driving 206 00:09:33,960 --> 00:09:36,480 Speaker 1: a lot of those trades, and our biotech analysts was 207 00:09:36,480 --> 00:09:39,000 Speaker 1: making a call that COVID cases would peak shortly after 208 00:09:39,080 --> 00:09:41,400 Speaker 1: labor after Labor Day, so we said that would give 209 00:09:41,400 --> 00:09:44,920 Speaker 1: you a catalyst to let that value trade move higher UM. 210 00:09:44,960 --> 00:09:46,760 Speaker 1: And then the last thing we really talked about was 211 00:09:46,840 --> 00:09:49,200 Speaker 1: just what do you expect from the economy next year. 212 00:09:49,240 --> 00:09:51,199 Speaker 1: And when you're in a hot economy, which is one 213 00:09:51,240 --> 00:09:53,760 Speaker 1: that tends to run above average the average is about 214 00:09:53,760 --> 00:09:56,280 Speaker 1: two and a half percent UM, you tend to see 215 00:09:56,360 --> 00:10:00,000 Speaker 1: value outperform, small cap outperform, cyclicals outperform. And and even 216 00:10:00,040 --> 00:10:03,040 Speaker 1: though some of the economic numbers have been knocked down, 217 00:10:03,640 --> 00:10:06,320 Speaker 1: consensus for next year still sitting comfortably above four percent, 218 00:10:06,480 --> 00:10:09,520 Speaker 1: so you know, kind of a valuation room, a catalyst 219 00:10:09,520 --> 00:10:12,800 Speaker 1: from COVID trends improving, and hot economy that will allow 220 00:10:12,800 --> 00:10:14,920 Speaker 1: those ciglical you know, parts of the market to to 221 00:10:15,000 --> 00:10:17,200 Speaker 1: really have some good fundamental support for next year. That 222 00:10:17,280 --> 00:10:19,320 Speaker 1: was really kind of three ingredients we saw for that 223 00:10:19,360 --> 00:10:31,120 Speaker 1: intermediate term value. Pope. Let's let's unpack that a little 224 00:10:31,120 --> 00:10:33,600 Speaker 1: bit on small caps. I know you you started out 225 00:10:33,640 --> 00:10:36,880 Speaker 1: as a small cap analysts in a previous life, right, 226 00:10:36,880 --> 00:10:39,800 Speaker 1: so I know it's probably dear to your heart, uh, 227 00:10:39,880 --> 00:10:42,400 Speaker 1: the smaller companies you know. To me, I don't always 228 00:10:42,440 --> 00:10:45,400 Speaker 1: think of small caps in the same breath as as 229 00:10:45,520 --> 00:10:47,400 Speaker 1: value stocks. But I guess you know, if you look 230 00:10:47,400 --> 00:10:49,200 Speaker 1: at the waiting of the Russell two thousand, I mean, 231 00:10:49,240 --> 00:10:52,719 Speaker 1: have you on on financials, have you on energy? So 232 00:10:53,000 --> 00:10:56,880 Speaker 1: from a sector's perspective, you know, they certainly seemed to 233 00:10:57,800 --> 00:11:00,920 Speaker 1: potentially benefit from the same type of tell wines that 234 00:11:00,920 --> 00:11:04,520 Speaker 1: that would boost the value stocks in the large cap induexes. 235 00:11:04,960 --> 00:11:07,040 Speaker 1: How are you thinking about small caps going forward? I 236 00:11:07,080 --> 00:11:13,199 Speaker 1: mean it also feels like, um, the revitalization, the rebound 237 00:11:13,200 --> 00:11:16,240 Speaker 1: and earnings for small caps has been sort of deferred 238 00:11:16,240 --> 00:11:18,959 Speaker 1: a little bit into the future compared to large caps. 239 00:11:19,000 --> 00:11:21,200 Speaker 1: I mean, is it kind of, uh the time for 240 00:11:21,240 --> 00:11:23,880 Speaker 1: the for small caps to shine? But given all these factors, 241 00:11:24,200 --> 00:11:26,800 Speaker 1: and to make a twelve part question, I know, the 242 00:11:27,840 --> 00:11:31,200 Speaker 1: you know, earning earnings estimates for small caps can be 243 00:11:31,240 --> 00:11:35,679 Speaker 1: a little bit more violatile than, uh than large caps, 244 00:11:35,760 --> 00:11:37,439 Speaker 1: and so I don't know if that plays into your 245 00:11:37,480 --> 00:11:39,880 Speaker 1: thinking at all. But you know, how are you sort 246 00:11:39,880 --> 00:11:42,600 Speaker 1: of thinking about small caps going forward, given given all 247 00:11:42,640 --> 00:11:46,600 Speaker 1: these sort of catalysts that potentially could help them out. Yeah, 248 00:11:46,600 --> 00:11:49,040 Speaker 1: it's it's a great question. And you know, I sort 249 00:11:49,080 --> 00:11:52,480 Speaker 1: of described small cap as my first professional child. Um, 250 00:11:52,600 --> 00:11:54,600 Speaker 1: you know, I spent seven years as a small cap 251 00:11:54,679 --> 00:11:56,679 Speaker 1: strategist at a couple of different shops. I mean, now 252 00:11:56,720 --> 00:11:58,520 Speaker 1: I kind of do I do everything the broad market, 253 00:11:58,520 --> 00:12:00,480 Speaker 1: and I still do small caps, but there's a certain 254 00:12:00,520 --> 00:12:02,360 Speaker 1: fondness for me there, and I often feel like it's 255 00:12:02,360 --> 00:12:05,160 Speaker 1: the lens through which I can really understand what's going 256 00:12:05,200 --> 00:12:06,880 Speaker 1: on the market. I do think that a lot of 257 00:12:06,880 --> 00:12:10,920 Speaker 1: things are clearer there than they are an SMPD. UM. 258 00:12:10,960 --> 00:12:13,680 Speaker 1: And look, I think with small cap and people hate 259 00:12:13,679 --> 00:12:16,080 Speaker 1: it when I say this, UM, but I really don't 260 00:12:16,080 --> 00:12:19,200 Speaker 1: think earnings matter that much. Um. You know. I think 261 00:12:19,200 --> 00:12:22,200 Speaker 1: the reality is that small caps have so many companies 262 00:12:22,200 --> 00:12:24,480 Speaker 1: with losses and now it's obviously more now than in 263 00:12:24,520 --> 00:12:27,200 Speaker 1: the past. UM. But the reality is there's really no 264 00:12:27,240 --> 00:12:29,480 Speaker 1: good way to calculate the EPs growth of the Russell 265 00:12:29,520 --> 00:12:31,600 Speaker 1: two thousand. I come up with ways to do it 266 00:12:31,640 --> 00:12:34,720 Speaker 1: to satisfy client requests. Frankly, UM, and to try to 267 00:12:34,760 --> 00:12:37,280 Speaker 1: help my clients, you know, put some numbers around something 268 00:12:37,320 --> 00:12:40,040 Speaker 1: that's very difficult to put numbers around. But I've just 269 00:12:40,520 --> 00:12:43,360 Speaker 1: realized over time that's just not what the stocks trade on. 270 00:12:43,440 --> 00:12:47,280 Speaker 1: The stocks tend to trade on higher level macro variables, 271 00:12:47,600 --> 00:12:49,480 Speaker 1: and the only way the earnings I feel like really 272 00:12:49,520 --> 00:12:51,600 Speaker 1: sort of seeps in is when you sort of look 273 00:12:51,640 --> 00:12:54,120 Speaker 1: at it from a quality perspective, and people want higher 274 00:12:54,160 --> 00:12:57,240 Speaker 1: quality so than the sheer number of companies with losses 275 00:12:57,280 --> 00:13:00,600 Speaker 1: will push people out of that space into bigger caps um. 276 00:13:00,679 --> 00:13:02,880 Speaker 1: But and I think that's certainly something that hurts small 277 00:13:02,880 --> 00:13:05,800 Speaker 1: cap over the summer. The nervousness around the COVID outlook, 278 00:13:05,840 --> 00:13:08,320 Speaker 1: the FED a lot of other things pushed investors back 279 00:13:08,360 --> 00:13:10,520 Speaker 1: towards higher quality stories, and that pulled some of the 280 00:13:10,559 --> 00:13:13,160 Speaker 1: multi asset investors out of small cap. But that's really 281 00:13:13,160 --> 00:13:14,520 Speaker 1: the only time I think you really want to pay 282 00:13:14,559 --> 00:13:16,720 Speaker 1: too much attentions to earnings. I think earnings is more 283 00:13:16,720 --> 00:13:19,400 Speaker 1: of a stock selection issue within small cap for active 284 00:13:19,400 --> 00:13:21,079 Speaker 1: managers as opposed to a reason to get in or 285 00:13:21,120 --> 00:13:23,760 Speaker 1: out of the asset class um. But you know, to 286 00:13:23,840 --> 00:13:25,839 Speaker 1: kind of go back to your original question, I think 287 00:13:26,600 --> 00:13:29,000 Speaker 1: small caps and value are not always the same trade. 288 00:13:29,200 --> 00:13:31,720 Speaker 1: I think they are the trade the same trade right now. 289 00:13:31,760 --> 00:13:35,480 Speaker 1: If you look at how large has performed versus small, 290 00:13:35,640 --> 00:13:39,040 Speaker 1: and growth has performed versus large within the Russell one thousand, 291 00:13:39,080 --> 00:13:42,160 Speaker 1: so the large cap lands both of those trades have 292 00:13:42,280 --> 00:13:44,520 Speaker 1: been moving in tandem with the rate of change in 293 00:13:44,600 --> 00:13:47,640 Speaker 1: COVID cases in the US. That's been true for small 294 00:13:47,679 --> 00:13:50,360 Speaker 1: cap since last November. It's been true for value growth 295 00:13:50,400 --> 00:13:53,079 Speaker 1: since March UM but the last like six nine months 296 00:13:53,160 --> 00:13:55,280 Speaker 1: or so. They are both trading on one of the 297 00:13:55,360 --> 00:13:59,000 Speaker 1: same economic variables. They are also both very sensitive to 298 00:13:59,160 --> 00:14:01,440 Speaker 1: interest rate direct ship. And this is something we've seen 299 00:14:01,480 --> 00:14:03,400 Speaker 1: over time that when the tenure yield is going up, 300 00:14:03,400 --> 00:14:05,839 Speaker 1: it doesn't really matter why it's going up. Small caps 301 00:14:05,840 --> 00:14:09,120 Speaker 1: tend to outperform and value tends to outperform. And if 302 00:14:09,160 --> 00:14:12,640 Speaker 1: you sort of think about why those relationships are there, UM, 303 00:14:12,679 --> 00:14:16,360 Speaker 1: I think right now, financials is a huge influence on 304 00:14:16,400 --> 00:14:18,800 Speaker 1: both the small cap space as an asset class and 305 00:14:19,120 --> 00:14:22,480 Speaker 1: the value trade. And so interest rates go up, financials 306 00:14:22,520 --> 00:14:24,760 Speaker 1: tend out perform. It's pulling both of those parts of 307 00:14:24,840 --> 00:14:27,560 Speaker 1: the market up right now. UM. And I just sort of, 308 00:14:27,600 --> 00:14:29,240 Speaker 1: you know, put in a slightly different way when we 309 00:14:29,360 --> 00:14:32,480 Speaker 1: talk about small cap looking cheap versus large cap UM. 310 00:14:32,520 --> 00:14:35,160 Speaker 1: It's a really really compelling chart that we put together 311 00:14:35,240 --> 00:14:38,160 Speaker 1: on that you're really at historic valuation opportunities and small 312 00:14:38,240 --> 00:14:40,640 Speaker 1: versus large when you go and look at it sector 313 00:14:40,680 --> 00:14:44,040 Speaker 1: by sector to figure out what's driving that valuation differential. 314 00:14:44,400 --> 00:14:48,120 Speaker 1: It's not things like healthcare, UM. It's it's the financial sector, 315 00:14:48,240 --> 00:14:51,160 Speaker 1: it's the energy sector. UM. It's these kind of you know, 316 00:14:51,360 --> 00:14:53,880 Speaker 1: value oriented parts of the market that are have a 317 00:14:53,960 --> 00:14:56,160 Speaker 1: very heavy presence in small cap now that are really 318 00:14:56,240 --> 00:14:59,360 Speaker 1: driving that valuation differential. So there's a lot of overlap 319 00:14:59,400 --> 00:15:01,080 Speaker 1: in those trade right now that we might not no, 320 00:15:01,520 --> 00:15:05,680 Speaker 1: not not ordinarily. See. I'm glad you brought up financials 321 00:15:05,720 --> 00:15:08,640 Speaker 1: because I had noticed in one of your notes recently 322 00:15:08,680 --> 00:15:11,680 Speaker 1: where you said ahead of FED hikes, you tend to 323 00:15:11,720 --> 00:15:14,920 Speaker 1: see some value in some small caps out performing. So 324 00:15:15,080 --> 00:15:17,520 Speaker 1: I'm hoping you can walk us through what can work 325 00:15:17,640 --> 00:15:21,080 Speaker 1: well in in the environment now where people are anticipating 326 00:15:21,120 --> 00:15:24,680 Speaker 1: a FED taper and then eventually FED hikes. So I 327 00:15:25,000 --> 00:15:27,880 Speaker 1: do think the taper was largely priced in in the 328 00:15:27,920 --> 00:15:30,080 Speaker 1: second quarter of the year. UM. And if you kind 329 00:15:30,080 --> 00:15:33,520 Speaker 1: of go back and you think about the sort of 330 00:15:33,520 --> 00:15:38,320 Speaker 1: conversation that was happening among economic economists and rage strategists, 331 00:15:38,360 --> 00:15:40,080 Speaker 1: and there was you know, sort of this this kind 332 00:15:40,080 --> 00:15:42,040 Speaker 1: of pounding the table up. The FED is behind the 333 00:15:42,040 --> 00:15:44,040 Speaker 1: curve and they need to taper because inflation is getting 334 00:15:44,040 --> 00:15:45,960 Speaker 1: out of control and they're going to eventually wake up 335 00:15:45,960 --> 00:15:48,640 Speaker 1: to this risk and pull their time table forward. But 336 00:15:48,680 --> 00:15:50,840 Speaker 1: that was a big conversation happening in kind of March 337 00:15:50,880 --> 00:15:53,880 Speaker 1: and April, and that's actually when we saw the value trade, 338 00:15:53,960 --> 00:15:57,520 Speaker 1: you know, kind of start to underperform. And we after 339 00:15:57,560 --> 00:16:00,120 Speaker 1: having had a big run and also small caps mysteriously 340 00:16:00,160 --> 00:16:03,200 Speaker 1: at the time, seemingly peaked versus large cap and we 341 00:16:03,280 --> 00:16:05,520 Speaker 1: sort of put some of those trades that had been 342 00:16:05,520 --> 00:16:08,440 Speaker 1: doing very well and that normally do well going into 343 00:16:08,440 --> 00:16:12,440 Speaker 1: a hiking environment, they suddenly, you know, just stopped working um. 344 00:16:12,480 --> 00:16:13,880 Speaker 1: And I think as we go back and look at 345 00:16:13,880 --> 00:16:15,880 Speaker 1: the data, we think sort of the deterioration you were 346 00:16:15,880 --> 00:16:18,240 Speaker 1: starting to seeing some of the COVID stats contributed to that. 347 00:16:18,280 --> 00:16:20,680 Speaker 1: But I also think it was just Wall Street figuring 348 00:16:20,680 --> 00:16:23,000 Speaker 1: out that the taper was coming sooner rather than later, 349 00:16:23,080 --> 00:16:25,640 Speaker 1: despite what the Fed was saying. And you know, if 350 00:16:25,680 --> 00:16:27,400 Speaker 1: you go do back and look at the taper, we 351 00:16:27,480 --> 00:16:31,480 Speaker 1: had you know, time frame and that announcement, and then 352 00:16:31,560 --> 00:16:34,240 Speaker 1: when we actually did the taper, um we saw those 353 00:16:34,240 --> 00:16:37,720 Speaker 1: traditional you know, kind of rate hike trades flip um. 354 00:16:37,800 --> 00:16:40,720 Speaker 1: So normally you get into a rate hiking cycle, small 355 00:16:40,720 --> 00:16:43,200 Speaker 1: peaks versus large value does very well going into the 356 00:16:43,240 --> 00:16:46,200 Speaker 1: hiking cycle and then growth leadership takes over once hikes begin. 357 00:16:46,480 --> 00:16:49,200 Speaker 1: And that's exactly what happened back in the taper during 358 00:16:50,160 --> 00:16:52,800 Speaker 1: and we really essentially saw those trades take root again 359 00:16:52,880 --> 00:16:55,720 Speaker 1: in second quarter of this year. UM. But you know 360 00:16:55,800 --> 00:16:58,080 Speaker 1: what we had before, right, was the sort of interesting 361 00:16:58,120 --> 00:17:01,480 Speaker 1: intervening period between the AP and the hikes, um, where 362 00:17:01,520 --> 00:17:04,320 Speaker 1: a lot of these risk trades started to work again. UM. 363 00:17:04,359 --> 00:17:06,679 Speaker 1: And now you know, essentially I think we're sort of 364 00:17:06,720 --> 00:17:09,240 Speaker 1: in this holding period, right. I think the market is 365 00:17:09,280 --> 00:17:13,240 Speaker 1: going to enjoy the cyclical spirits that make the FED 366 00:17:13,320 --> 00:17:16,480 Speaker 1: confident enough to hike rates. UM. So we've got above 367 00:17:16,520 --> 00:17:19,959 Speaker 1: average GDP in place. That's something you normally see before 368 00:17:20,119 --> 00:17:22,600 Speaker 1: and early on in a FED hiking cycle. Um, we've 369 00:17:22,640 --> 00:17:24,800 Speaker 1: got very lofty levels of I s M. That's something 370 00:17:24,800 --> 00:17:27,280 Speaker 1: you also tend to see before the hikes actually, you know, 371 00:17:27,320 --> 00:17:31,439 Speaker 1: start to happen. Um. And you know what, unfortunately, we 372 00:17:31,440 --> 00:17:33,320 Speaker 1: tend to see is when the hikes themselves start. I 373 00:17:33,520 --> 00:17:35,919 Speaker 1: s M usually ends up peaking during the hikes are 374 00:17:35,960 --> 00:17:38,680 Speaker 1: shortly thereafter in GDP grows from being above average to 375 00:17:38,720 --> 00:17:41,359 Speaker 1: below average shortly after the hiking cycle. So the markets 376 00:17:41,400 --> 00:17:44,000 Speaker 1: start to say, you know, the FED always cools off 377 00:17:44,000 --> 00:17:46,280 Speaker 1: the economy and pull some of that that froth out, 378 00:17:46,920 --> 00:17:49,600 Speaker 1: and markets start to anticipate it, and so these parts 379 00:17:49,600 --> 00:17:52,320 Speaker 1: of the market that benefit from that really hot economy, 380 00:17:52,440 --> 00:17:55,200 Speaker 1: they start to discount in advance even though it's happening. So, 381 00:17:55,680 --> 00:17:58,200 Speaker 1: you know, I think that the Fed, unfortunately, I think 382 00:17:58,280 --> 00:18:01,040 Speaker 1: is what puts the expiration daid on the siblical tradits, 383 00:18:02,400 --> 00:18:05,800 Speaker 1: you know, Laurie, I, I think the one interesting sort 384 00:18:05,840 --> 00:18:09,080 Speaker 1: of difference in this latest episode over the last year 385 00:18:09,200 --> 00:18:13,560 Speaker 1: two has been the the enormous fiscal response. Uh. You know, 386 00:18:13,800 --> 00:18:18,040 Speaker 1: in addition to such a huge uh monetary response from 387 00:18:18,080 --> 00:18:21,560 Speaker 1: the Fed, we for once we saw a really huge 388 00:18:21,560 --> 00:18:26,280 Speaker 1: fiscal response from from the Congress and the President's UM. 389 00:18:26,359 --> 00:18:30,960 Speaker 1: That's how one's obviously wearing off. UM. I wonder how 390 00:18:31,040 --> 00:18:35,560 Speaker 1: much optimism was priced into the market about whether it 391 00:18:35,560 --> 00:18:39,800 Speaker 1: be an infrastructure deal the Biden three and a half 392 00:18:39,800 --> 00:18:43,560 Speaker 1: trillion spending package. You know, at this point, it doesn't 393 00:18:43,560 --> 00:18:46,000 Speaker 1: look like we will necessarily get either one. I mean, 394 00:18:46,320 --> 00:18:48,320 Speaker 1: at least I wouldn't bet on it. Possibly will get 395 00:18:48,359 --> 00:18:52,040 Speaker 1: some kind of of narrowed down UH package that would 396 00:18:52,080 --> 00:18:55,240 Speaker 1: be sort of above trend government spending. But you know 397 00:18:55,960 --> 00:18:58,800 Speaker 1: what's priced into the market as the market, in your opinion, 398 00:18:58,840 --> 00:19:02,119 Speaker 1: just written off the sort of an above average fiscal 399 00:19:02,200 --> 00:19:05,360 Speaker 1: spend going forward at this point, I think it's such 400 00:19:05,400 --> 00:19:07,400 Speaker 1: a great question, Mike. And when we sort of think 401 00:19:07,440 --> 00:19:09,920 Speaker 1: about the risks to our view and something that could 402 00:19:09,960 --> 00:19:12,040 Speaker 1: cause the value and small cat trade to have an 403 00:19:12,040 --> 00:19:15,680 Speaker 1: extended cycle. I always point people to fiscal policy, and 404 00:19:15,680 --> 00:19:18,040 Speaker 1: and the reason I point people to it is just 405 00:19:18,119 --> 00:19:23,080 Speaker 1: my conversations with investors this year. They're absolutely focused on tax. 406 00:19:23,400 --> 00:19:25,439 Speaker 1: They don't like corporate tax hikes. A lot of the 407 00:19:25,440 --> 00:19:27,600 Speaker 1: BYE side is already baking this into their numbers, not 408 00:19:27,640 --> 00:19:30,480 Speaker 1: the sell side, but the BY side. But nobody on 409 00:19:30,520 --> 00:19:32,639 Speaker 1: the BYE side or even the Cell side, frankly my 410 00:19:32,720 --> 00:19:36,720 Speaker 1: conversations at least, wants to give the economic forecast or 411 00:19:36,720 --> 00:19:40,440 Speaker 1: the fundamental forecast any kind of credit for anything coming 412 00:19:40,440 --> 00:19:43,439 Speaker 1: out of Washington on the fiscal side. And you know, 413 00:19:43,560 --> 00:19:46,800 Speaker 1: I the things I tend to hear are, well, it's 414 00:19:46,840 --> 00:19:49,120 Speaker 1: too spread out, it's going to happen over a ten 415 00:19:49,160 --> 00:19:51,239 Speaker 1: year period, so it's not going to have, you know, 416 00:19:51,480 --> 00:19:54,360 Speaker 1: too much of an impact. Or while the dollar value 417 00:19:54,560 --> 00:19:56,679 Speaker 1: in the context of the size of our economy just 418 00:19:56,760 --> 00:19:59,359 Speaker 1: really isn't big enough to move the needle um, you know, 419 00:19:59,400 --> 00:20:01,760 Speaker 1: so we'll hear that a lot um. And then you know, 420 00:20:01,800 --> 00:20:04,240 Speaker 1: people will also say, well, that the negative impacts of 421 00:20:04,280 --> 00:20:07,120 Speaker 1: tax hikes are going to offset anything that you would get, 422 00:20:07,520 --> 00:20:09,879 Speaker 1: and I just hear that time and time again. And 423 00:20:10,080 --> 00:20:11,639 Speaker 1: you know, I used to joke back in you know, 424 00:20:11,640 --> 00:20:13,960 Speaker 1: sort of April and May like I I felt like 425 00:20:14,000 --> 00:20:16,240 Speaker 1: I was a policy analyst because when I was discussing 426 00:20:16,240 --> 00:20:18,399 Speaker 1: that your head your head outlook at an hour meeting, 427 00:20:18,440 --> 00:20:20,680 Speaker 1: we'd spend forty minutes on corporate tax perform and that's 428 00:20:20,680 --> 00:20:23,960 Speaker 1: not even an exaggeration. Um. But then I would try 429 00:20:23,960 --> 00:20:27,360 Speaker 1: to talk to people. When Biden's Jobs Fan and Family's 430 00:20:27,359 --> 00:20:29,080 Speaker 1: plan came out and he put the white papers out, 431 00:20:29,119 --> 00:20:31,000 Speaker 1: we did a whole analysis and nobody wanted to talk 432 00:20:31,000 --> 00:20:34,359 Speaker 1: about them. And you know, I I've told people, you know, 433 00:20:34,400 --> 00:20:37,280 Speaker 1: you may be right on infrastructure, you know, with industrials 434 00:20:37,280 --> 00:20:40,160 Speaker 1: and materials. People also say it crowds out private investment. Fine, 435 00:20:40,280 --> 00:20:42,359 Speaker 1: you know, I get that, but I think that the 436 00:20:42,440 --> 00:20:44,800 Speaker 1: sort of some of the details and the Budget Reconciliation 437 00:20:44,800 --> 00:20:47,760 Speaker 1: Bill are so interesting from a consumer perspective. And you know, 438 00:20:47,800 --> 00:20:50,160 Speaker 1: you mentioned I have a thirteen month OLDO. I also 439 00:20:50,200 --> 00:20:52,480 Speaker 1: have a five year old UM, and so you know, 440 00:20:52,600 --> 00:20:56,200 Speaker 1: I see sort of the provisions about paying for daycare 441 00:20:56,600 --> 00:20:59,400 Speaker 1: or pre k um, and you know, just the sort 442 00:20:59,400 --> 00:21:01,560 Speaker 1: of idea of putting some you know, money back in 443 00:21:01,640 --> 00:21:05,159 Speaker 1: consumers pockets. And we just went through an episode, you know, 444 00:21:05,200 --> 00:21:08,080 Speaker 1: with with a pandemic where the stimulus payments, we saw 445 00:21:08,160 --> 00:21:11,040 Speaker 1: impacts on credit card spending. Um. You know, the companies 446 00:21:11,040 --> 00:21:15,000 Speaker 1: were talking about discrete impacts that they've seen from stimulus. Um. 447 00:21:15,040 --> 00:21:16,960 Speaker 1: You know, it just sort of is interesting to me 448 00:21:17,000 --> 00:21:19,159 Speaker 1: that we just lived through that and saw you know, 449 00:21:19,280 --> 00:21:22,919 Speaker 1: giving consumers some extra cash having a direct impact on 450 00:21:22,960 --> 00:21:25,840 Speaker 1: their spend um. And and people are just not thinking 451 00:21:25,880 --> 00:21:27,600 Speaker 1: about this at all when it comes to that budget 452 00:21:27,640 --> 00:21:31,679 Speaker 1: reconciliation bill. So I've described it as a show me story. Um. 453 00:21:31,720 --> 00:21:34,560 Speaker 1: You know, I'm not the one to make the economic projections, 454 00:21:34,640 --> 00:21:36,240 Speaker 1: but I do think, you know, if we think about 455 00:21:36,240 --> 00:21:38,720 Speaker 1: what could make my call wrong and extend that cyclical 456 00:21:38,760 --> 00:21:41,919 Speaker 1: trade longer, the upside risk I do think lies in 457 00:21:41,960 --> 00:21:45,520 Speaker 1: fiscal policy. If we get those bills passed, Um, could 458 00:21:45,560 --> 00:21:49,600 Speaker 1: they caused some surprises to the upside on the economic side, 459 00:21:49,680 --> 00:21:53,160 Speaker 1: or could from a corporate perspective. They change consumer spending patterns, 460 00:21:53,160 --> 00:21:55,919 Speaker 1: give certain consumers more money to spend. That has an 461 00:21:55,960 --> 00:22:00,240 Speaker 1: impact on bottom lines. Markets not prepared for that. Well, Lurie, 462 00:22:00,280 --> 00:22:02,200 Speaker 1: all I have to say is a thirteen month old 463 00:22:02,280 --> 00:22:05,240 Speaker 1: and a five year old is good spacing. I can tell. 464 00:22:05,800 --> 00:22:08,040 Speaker 1: I can tell why you're a strategist now, because you 465 00:22:08,160 --> 00:22:10,120 Speaker 1: never want to have two in diapers at one time, 466 00:22:10,160 --> 00:22:13,440 Speaker 1: and I think you spaced them out appropriately. I thought 467 00:22:13,480 --> 00:22:16,000 Speaker 1: I did. I made the opposite mistake. I had to 468 00:22:16,000 --> 00:22:18,320 Speaker 1: too many babies and diapers at once, and it's it's 469 00:22:18,359 --> 00:22:21,560 Speaker 1: gonna be overwhelming. I know you're worried about college costs. 470 00:22:21,680 --> 00:22:26,480 Speaker 1: My Oh, yes, absolutely, let's try. I'll never bring it 471 00:22:26,560 --> 00:22:28,720 Speaker 1: up again. I'm sorry trying to give me, trying to 472 00:22:28,720 --> 00:22:52,240 Speaker 1: give you a heart at Speaking of Lorie's research, Laura, 473 00:22:52,320 --> 00:22:54,760 Speaker 1: your research reports are just some of the best. I 474 00:22:55,160 --> 00:22:57,240 Speaker 1: always read them all the way through. I flipped through 475 00:22:57,280 --> 00:22:59,280 Speaker 1: all your slides, and I know you have a new 476 00:22:59,320 --> 00:23:01,840 Speaker 1: survey out, which you do from from time to time, 477 00:23:02,160 --> 00:23:04,720 Speaker 1: but the most recent one, I think it was titled 478 00:23:04,760 --> 00:23:07,000 Speaker 1: the mood of the market has gotten more pessimistic, but 479 00:23:07,080 --> 00:23:09,760 Speaker 1: investors are still buying value. And you had found the 480 00:23:09,840 --> 00:23:13,760 Speaker 1: pessimism overall has sort of continued to rise, although it's 481 00:23:14,040 --> 00:23:16,920 Speaker 1: done from past peaks. But I'm hoping you can walk 482 00:23:17,000 --> 00:23:19,399 Speaker 1: us through some of the things that you found and 483 00:23:19,680 --> 00:23:21,680 Speaker 1: what else has stood out to you from what you're 484 00:23:21,680 --> 00:23:25,000 Speaker 1: hearing from people. Yeah, you know, I thought it was 485 00:23:25,080 --> 00:23:28,040 Speaker 1: I thought it was really fascinating, UM that the the 486 00:23:28,160 --> 00:23:30,480 Speaker 1: overall mood of the market was you know, just just 487 00:23:30,600 --> 00:23:32,639 Speaker 1: not as not as chipper as it was, you know, 488 00:23:32,720 --> 00:23:34,320 Speaker 1: sort of earlier in the year. We've sort of seen 489 00:23:34,359 --> 00:23:37,320 Speaker 1: that progressing over the last couple of surveys. UM, But 490 00:23:37,440 --> 00:23:39,840 Speaker 1: investors still seem to be on board with this value 491 00:23:39,840 --> 00:23:42,439 Speaker 1: trade UM and specifically the financials and energy, which I 492 00:23:42,440 --> 00:23:44,760 Speaker 1: think makes sense those areas are not at the epicenter 493 00:23:45,240 --> 00:23:48,440 Speaker 1: of you know, sort of supply chain concerns. UM. I'll 494 00:23:48,440 --> 00:23:50,280 Speaker 1: take you know, just kind of going back to the 495 00:23:50,320 --> 00:23:53,520 Speaker 1: topic of taxes, because I do think you know, when 496 00:23:53,560 --> 00:23:55,600 Speaker 1: you talk to people about the case for a pullback 497 00:23:55,600 --> 00:23:57,080 Speaker 1: in markets late in the year, and we've been in 498 00:23:57,119 --> 00:23:59,240 Speaker 1: that camp as well, but I find a lot of 499 00:23:59,240 --> 00:24:01,439 Speaker 1: people are pointing to this idea of corporate taxes and 500 00:24:01,480 --> 00:24:03,320 Speaker 1: that it's not been baked in and it's going to 501 00:24:03,400 --> 00:24:05,359 Speaker 1: be this big, huge, you know, sort of disaster for 502 00:24:05,400 --> 00:24:09,080 Speaker 1: corporate America longer term. And we just asked the investors 503 00:24:09,080 --> 00:24:10,679 Speaker 1: in the survey, we said, you know, what do you 504 00:24:10,680 --> 00:24:12,760 Speaker 1: think this does to earnings? What do you think this 505 00:24:12,840 --> 00:24:14,880 Speaker 1: does to performance? And we always give people, we try 506 00:24:14,880 --> 00:24:17,679 Speaker 1: to give people five choices on you know, sort of 507 00:24:17,720 --> 00:24:19,600 Speaker 1: most of these questions, and there will be sort of 508 00:24:19,600 --> 00:24:21,439 Speaker 1: an extreme bowl and an extreme bear, and the kind 509 00:24:21,440 --> 00:24:23,000 Speaker 1: of a moderate bowl and a moderate bear, and then 510 00:24:23,040 --> 00:24:24,680 Speaker 1: kind of a neutral. That's how we always try to 511 00:24:24,760 --> 00:24:27,440 Speaker 1: lay everything out. And we found that on the question 512 00:24:27,440 --> 00:24:30,639 Speaker 1: of corporate taxes, most people, um, I think it was 513 00:24:30,640 --> 00:24:33,399 Speaker 1: about two thirds maybe on each of the questions we 514 00:24:33,440 --> 00:24:36,679 Speaker 1: asked about earnings independent from performance, and we found that 515 00:24:36,720 --> 00:24:38,920 Speaker 1: most people were in that camp saying, and it's gonna 516 00:24:38,960 --> 00:24:41,040 Speaker 1: be a wonderful you know, one to five percent hit 517 00:24:41,400 --> 00:24:43,320 Speaker 1: to performance. It's gonna be a one to five percent 518 00:24:43,520 --> 00:24:46,080 Speaker 1: to earn hit two earnings. UM. And I thought that 519 00:24:46,119 --> 00:24:48,840 Speaker 1: was so interesting because it's not sort of the disaster 520 00:24:49,000 --> 00:24:51,720 Speaker 1: scenario um that a lot of people have laid it 521 00:24:51,720 --> 00:24:54,200 Speaker 1: out to be market. If it happens, markets will price 522 00:24:54,240 --> 00:24:56,879 Speaker 1: it in and readjust and then move on. Um. The 523 00:24:56,920 --> 00:24:58,880 Speaker 1: other thing, you know, that I thought was so interesting. 524 00:24:58,960 --> 00:25:02,159 Speaker 1: We asked some questions on supply chains, which of course 525 00:25:02,400 --> 00:25:04,720 Speaker 1: has been the kind of big freak out point post 526 00:25:04,800 --> 00:25:06,800 Speaker 1: labor date for a lot of investors, especially in the 527 00:25:06,800 --> 00:25:09,040 Speaker 1: industrial and material space, and we've just been hearing a 528 00:25:09,040 --> 00:25:11,800 Speaker 1: lot of negative commentary around that. But we found sort 529 00:25:11,840 --> 00:25:14,280 Speaker 1: of a general vibe. You know, most people are you know, 530 00:25:14,280 --> 00:25:17,119 Speaker 1: I would say, are more worried about second half numbers 531 00:25:17,119 --> 00:25:20,520 Speaker 1: as opposed to two numbers. But when we ask people, 532 00:25:20,640 --> 00:25:22,359 Speaker 1: you know, kind of how worried are you about this? 533 00:25:22,480 --> 00:25:24,920 Speaker 1: Most people picked the you know, I'm worried, but I'm 534 00:25:24,920 --> 00:25:27,960 Speaker 1: not panicked. Um, I think we'll get some some downward 535 00:25:28,000 --> 00:25:30,240 Speaker 1: revisions and mrs. But it's not the end of the world. 536 00:25:30,760 --> 00:25:33,000 Speaker 1: And you know, it just goes to show me that 537 00:25:33,240 --> 00:25:36,720 Speaker 1: people are taking some of these concerns and stride. Yeah, 538 00:25:36,760 --> 00:25:40,639 Speaker 1: I'm I'm not sure how everyone's too worried about Biden 539 00:25:40,640 --> 00:25:43,159 Speaker 1: being able to get a tax hike through Congress. I 540 00:25:43,160 --> 00:25:45,320 Speaker 1: don't see him him getting that through Congress. But maybe 541 00:25:45,359 --> 00:25:48,360 Speaker 1: I'm just being too cynical with all the moderates and Congress. 542 00:25:48,400 --> 00:25:50,880 Speaker 1: If they're if they're stopping everything else, I don't see 543 00:25:50,920 --> 00:25:53,280 Speaker 1: how that gets through but I mean it's certainly they're 544 00:25:53,280 --> 00:25:56,679 Speaker 1: a risky you have to to think about. Um. Well, 545 00:25:56,760 --> 00:25:59,320 Speaker 1: Laurie before we get to the crazy things. They passed 546 00:25:59,359 --> 00:26:03,399 Speaker 1: the law where all financial podcasts have to get the 547 00:26:03,480 --> 00:26:08,080 Speaker 1: guests take on inflation this year, um quickly in just 548 00:26:08,119 --> 00:26:10,480 Speaker 1: a few seconds. I mean, you know, we saw the 549 00:26:10,560 --> 00:26:13,400 Speaker 1: natural gas prices in Europe. Just go through the roof. 550 00:26:13,520 --> 00:26:18,080 Speaker 1: We're you know, commodity indexes are high. Transitory is looking 551 00:26:18,119 --> 00:26:21,640 Speaker 1: a little less transitory than than maybe everyone thought. How 552 00:26:21,640 --> 00:26:24,119 Speaker 1: big of a race of a risk is inflation or 553 00:26:24,200 --> 00:26:27,600 Speaker 1: stiflation really in your mind? Um? Or is it just 554 00:26:27,640 --> 00:26:30,359 Speaker 1: a matter of picking the beneficiaries of of a rising 555 00:26:30,400 --> 00:26:33,760 Speaker 1: price environment? Yeah, I'll say, you know, maybe I'll put 556 00:26:33,760 --> 00:26:36,480 Speaker 1: my small cap hat back on again. Um. You know, 557 00:26:36,520 --> 00:26:40,600 Speaker 1: I sort of, you know, took took one very important 558 00:26:40,640 --> 00:26:42,800 Speaker 1: lesson when I first launched as a small cap strategist. 559 00:26:42,840 --> 00:26:46,679 Speaker 1: Remember one long time investor told me, Um, portfolio manager 560 00:26:46,720 --> 00:26:49,200 Speaker 1: in the space have been around for years, Um said, 561 00:26:49,240 --> 00:26:52,159 Speaker 1: small caps are inflationary, and small caps do well at 562 00:26:52,160 --> 00:26:54,680 Speaker 1: inflationary environments. And you know, if you sort of think 563 00:26:54,680 --> 00:26:57,720 Speaker 1: about the birth of Russell right and then the Russell indexes, 564 00:26:57,760 --> 00:26:59,800 Speaker 1: it came at the those indexes start at the end 565 00:26:59,800 --> 00:27:02,119 Speaker 1: of the seventies, right, so they were they were created 566 00:27:02,160 --> 00:27:04,159 Speaker 1: for a reason. And if you go and you look 567 00:27:04,200 --> 00:27:07,600 Speaker 1: at the data, small caps tend to outperform when inflation 568 00:27:07,640 --> 00:27:10,040 Speaker 1: expectations are high and rising, or if you look at 569 00:27:10,080 --> 00:27:13,400 Speaker 1: the CPI data and it is it is a testament 570 00:27:13,440 --> 00:27:15,439 Speaker 1: to the fact that they are more responsive to the 571 00:27:15,520 --> 00:27:18,119 Speaker 1: underlined cycle and health of the economy that's enabling that 572 00:27:18,200 --> 00:27:20,879 Speaker 1: strong inflation than they are to the pricing pressures and 573 00:27:20,920 --> 00:27:22,960 Speaker 1: the mark in the margin pressures and small caps do 574 00:27:23,080 --> 00:27:25,600 Speaker 1: I think have more pricing pressures, are pricing power rather 575 00:27:25,680 --> 00:27:28,159 Speaker 1: than people give them credit for. But to me, I 576 00:27:28,160 --> 00:27:29,960 Speaker 1: feel like I know what to do in that environment, 577 00:27:29,960 --> 00:27:32,399 Speaker 1: and it's it's by the small caps, it's by the financials, 578 00:27:32,400 --> 00:27:35,159 Speaker 1: it's by the energy stocks, and they deserve to be 579 00:27:35,200 --> 00:27:37,560 Speaker 1: bought based on where the valuations are. So I'm not 580 00:27:37,720 --> 00:27:40,800 Speaker 1: overly worried right now. My my, Again, I'm not the economist, 581 00:27:40,800 --> 00:27:43,280 Speaker 1: so we don't do a forecast on inflation, but my 582 00:27:43,359 --> 00:27:45,359 Speaker 1: hunch is that it will be, you know, sort of 583 00:27:45,400 --> 00:27:48,040 Speaker 1: more elevated than it was previous to the pandemic, not 584 00:27:48,119 --> 00:27:50,320 Speaker 1: as bad as it is now. And you'll see you'll 585 00:27:50,359 --> 00:27:53,480 Speaker 1: see things come down as as demand starts to normalize. 586 00:27:54,080 --> 00:27:55,520 Speaker 1: And I also, you know, I read a lot of 587 00:27:55,520 --> 00:27:57,560 Speaker 1: earnings called transcripts. I know we've talked about on this 588 00:27:57,680 --> 00:28:00,560 Speaker 1: that on this podcast before. We're still reading those transcrip its. 589 00:28:00,720 --> 00:28:02,240 Speaker 1: And you know, if you think about it from a 590 00:28:02,280 --> 00:28:05,680 Speaker 1: margin perspective and the corporate profitability perspective, the company since 591 00:28:06,480 --> 00:28:09,520 Speaker 1: have just been hemming and high about all the margin 592 00:28:09,560 --> 00:28:13,119 Speaker 1: pressures and inflationary pressures and supply chain pressures and tariffs, 593 00:28:13,640 --> 00:28:17,280 Speaker 1: and they do a marvelous job of managing through UM 594 00:28:17,320 --> 00:28:20,200 Speaker 1: given hedging the tools at their disposal, they are constantly 595 00:28:20,240 --> 00:28:22,199 Speaker 1: sucking costs out of the system and the margins have 596 00:28:22,240 --> 00:28:25,920 Speaker 1: been fantastic. So I I try not to overly react. 597 00:28:26,119 --> 00:28:27,800 Speaker 1: I feel like I just want to focus on I 598 00:28:27,840 --> 00:28:29,360 Speaker 1: know what to do, and then you know, I kind 599 00:28:29,359 --> 00:28:31,320 Speaker 1: of I don't love the term stackfulation, but you know, 600 00:28:31,400 --> 00:28:34,280 Speaker 1: when I sort of look at the growth backdrop separately 601 00:28:34,359 --> 00:28:38,240 Speaker 1: from the inflation question, the high frequency indicators that sort 602 00:28:38,240 --> 00:28:40,440 Speaker 1: of softened at the end of the summer are stabilizing, 603 00:28:40,640 --> 00:28:43,360 Speaker 1: and even back to work is starting to poke up. UM. 604 00:28:43,440 --> 00:28:47,600 Speaker 1: We've got kid vaccines coming UM soon hopefully. UM We've 605 00:28:47,640 --> 00:28:49,880 Speaker 1: got some good news on that this week. UM. I 606 00:28:49,920 --> 00:28:52,240 Speaker 1: think that will help restore some of the confidence that's 607 00:28:52,280 --> 00:28:55,080 Speaker 1: taken a hidden markets late over the summer. UM And 608 00:28:55,160 --> 00:28:56,880 Speaker 1: so I think that we are really not at risk 609 00:28:56,880 --> 00:28:59,080 Speaker 1: of a recession. UM. I think that we are just 610 00:28:59,160 --> 00:29:03,720 Speaker 1: working through some challenges from a supply chain perspective. UM. 611 00:29:03,720 --> 00:29:06,000 Speaker 1: But I do think companies tend to get through these. 612 00:29:06,040 --> 00:29:08,320 Speaker 1: So I I try not to worry about all this 613 00:29:08,440 --> 00:29:14,040 Speaker 1: too much. Stand clear of the craziest things we saw 614 00:29:14,080 --> 00:29:20,040 Speaker 1: in markets this week, well, l Donna, one supply chain 615 00:29:20,480 --> 00:29:24,680 Speaker 1: that has continued to be very robust is the supply 616 00:29:24,760 --> 00:29:29,080 Speaker 1: of crazy things in markets. How about that? How about 617 00:29:29,080 --> 00:29:32,000 Speaker 1: that segue that that was That was really good. I'll 618 00:29:32,000 --> 00:29:35,200 Speaker 1: give you that. And this week in particular had so 619 00:29:35,360 --> 00:29:38,479 Speaker 1: many crazy stories it was really hard to pick. All right, 620 00:29:38,520 --> 00:29:42,000 Speaker 1: Well did you start then? Oh? Sure, Well I saw 621 00:29:42,040 --> 00:29:46,520 Speaker 1: that Burger King has chicken less chicken wings or chicken 622 00:29:46,600 --> 00:29:49,800 Speaker 1: nuggets coming. I saw that Best Buy has some sort 623 00:29:49,800 --> 00:29:54,520 Speaker 1: of uh program you can pay for that sort of 624 00:29:54,560 --> 00:29:56,880 Speaker 1: helps you get around supply chain issues. I don't know 625 00:29:56,920 --> 00:29:59,800 Speaker 1: if you saw any of those stories. I have not. 626 00:30:00,200 --> 00:30:02,280 Speaker 1: Oh my gosh, there was just so many really interesting 627 00:30:02,320 --> 00:30:04,760 Speaker 1: things happening. So with best Buy, you can buy like 628 00:30:05,000 --> 00:30:07,920 Speaker 1: you pay a hundred dollars a year, and you can 629 00:30:08,080 --> 00:30:11,080 Speaker 1: jump the line to to get certain products, but they 630 00:30:11,120 --> 00:30:16,320 Speaker 1: don't exactly tell you which products. But anyway, the craziest 631 00:30:16,360 --> 00:30:18,640 Speaker 1: thing that I chose was actually from a Matt Levine 632 00:30:18,720 --> 00:30:21,320 Speaker 1: column and the title of the article was is the 633 00:30:21,320 --> 00:30:24,400 Speaker 1: stock market open at three am? This startup says it 634 00:30:24,440 --> 00:30:27,600 Speaker 1: should be. So there's a company called twenty four Exchange, 635 00:30:27,640 --> 00:30:30,520 Speaker 1: and it's looking for SEC approval to offer ron the 636 00:30:30,520 --> 00:30:34,240 Speaker 1: clock stock trading sixty five days a year, on all 637 00:30:34,240 --> 00:30:38,120 Speaker 1: the holidays, overnight, all the time, just like the krypto markets. 638 00:30:38,160 --> 00:30:40,880 Speaker 1: And to me, that was one of the most interesting 639 00:30:41,080 --> 00:30:43,600 Speaker 1: things I've seen in a really long time. Because I 640 00:30:43,600 --> 00:30:46,240 Speaker 1: know we've talked about it on the podcast before. That 641 00:30:46,280 --> 00:30:49,800 Speaker 1: means you'll have to cover the stock market twenty four hours, right, 642 00:30:49,840 --> 00:30:57,400 Speaker 1: So I'm not this I'm having anxiety just thinking about it. Yeah, 643 00:30:57,400 --> 00:31:01,320 Speaker 1: it was. It was really interesting. Yeah, let's all right 644 00:31:01,400 --> 00:31:03,480 Speaker 1: to our congressman or something to make sure make sure 645 00:31:03,520 --> 00:31:06,200 Speaker 1: that doesn't happen. How about you, Laurie, what's the craziest 646 00:31:06,200 --> 00:31:09,440 Speaker 1: thing you've seen? Oh? Gosh, I mean to be honest, 647 00:31:09,440 --> 00:31:12,360 Speaker 1: but I haven't sort of noticed, frankly, any sort of 648 00:31:12,400 --> 00:31:14,560 Speaker 1: like weird quirky thing this week in terms of like 649 00:31:14,640 --> 00:31:17,600 Speaker 1: trading or story. UM, and we already talked about you 650 00:31:17,600 --> 00:31:21,800 Speaker 1: know what I was. Yeah, but the market reaction just like, yeah, 651 00:31:21,920 --> 00:31:24,960 Speaker 1: maybe this was all about the debt ceiling. Um. But look, 652 00:31:24,960 --> 00:31:28,600 Speaker 1: I'll tell you sort of the sort of most unusual, 653 00:31:28,840 --> 00:31:32,120 Speaker 1: sad and heartwarming thing all in one UM that I 654 00:31:32,120 --> 00:31:35,760 Speaker 1: saw earlier this week, my former boss, Tobias Love Combitu, 655 00:31:35,840 --> 00:31:37,800 Speaker 1: I guess has technically been a competitor in the past 656 00:31:37,880 --> 00:31:41,240 Speaker 1: few years for me. UM passed away on Friday after 657 00:31:41,440 --> 00:31:43,479 Speaker 1: you know, a car accident about a month ago or so, 658 00:31:44,360 --> 00:31:47,480 Speaker 1: and UM, for those of you who know him, UM, 659 00:31:47,520 --> 00:31:50,840 Speaker 1: it was just an incredibly emotional time. This man touched 660 00:31:51,240 --> 00:31:53,600 Speaker 1: so many people in so many different ways and was 661 00:31:53,640 --> 00:31:55,960 Speaker 1: so beloved. And you know, I'm not the biggest fan 662 00:31:56,000 --> 00:31:58,520 Speaker 1: of social media. UM, I deleted some of my accounts 663 00:31:58,520 --> 00:32:00,680 Speaker 1: a few years ago. UM, I've spend a lot of 664 00:32:00,720 --> 00:32:03,640 Speaker 1: time there. But the outpouring that I've seen on Twitter 665 00:32:04,040 --> 00:32:07,120 Speaker 1: and LinkedIn, UM, you know there if you just go 666 00:32:07,160 --> 00:32:09,640 Speaker 1: in and search for Tobias Love commnch on there, especially 667 00:32:09,640 --> 00:32:12,320 Speaker 1: on LinkedIn, there are some amazing tributes that have been 668 00:32:12,360 --> 00:32:15,600 Speaker 1: posted and comments, and the reach that this man had 669 00:32:16,160 --> 00:32:18,640 Speaker 1: and how beloved he was by so many different people 670 00:32:18,680 --> 00:32:21,440 Speaker 1: in different corners of the investment community. I mean, it 671 00:32:21,720 --> 00:32:24,400 Speaker 1: just does go to remind you this is truly a 672 00:32:24,440 --> 00:32:27,680 Speaker 1: community and is truly a small world. Um And I 673 00:32:28,000 --> 00:32:30,960 Speaker 1: thought it was, you know, an unbelievably heartbreaking thing that happened, 674 00:32:31,000 --> 00:32:34,080 Speaker 1: but just the outpouring and how he impacted so many 675 00:32:34,080 --> 00:32:39,680 Speaker 1: people was just so touching. Absolutely a man whose reputation 676 00:32:39,840 --> 00:32:43,680 Speaker 1: really uh is triple A rated uh as far as 677 00:32:43,720 --> 00:32:46,560 Speaker 1: I can sell, and not only had Laurie, but it's 678 00:32:46,600 --> 00:32:48,560 Speaker 1: not easy to keep a job as a strategist for 679 00:32:48,600 --> 00:32:50,920 Speaker 1: twenty two years or however money, you know, so you know, 680 00:32:51,240 --> 00:32:53,000 Speaker 1: you know he's doing something right to keep a job 681 00:32:53,040 --> 00:32:55,440 Speaker 1: that long. So we'll certainly miss him in the well. 682 00:32:56,360 --> 00:33:00,120 Speaker 1: The panic euphoria model at at City that he he 683 00:33:00,160 --> 00:33:02,080 Speaker 1: was sort of in charge of has been renamed the 684 00:33:02,200 --> 00:33:05,120 Speaker 1: Levkovich model. I think I saw a note this week 685 00:33:05,200 --> 00:33:09,560 Speaker 1: saying that that's that's good. That's amazing. You know, if 686 00:33:09,560 --> 00:33:12,200 Speaker 1: there's one thing about him, he was always willing to 687 00:33:12,480 --> 00:33:16,200 Speaker 1: take on a consensus argument and challenge the consensus and 688 00:33:16,240 --> 00:33:18,040 Speaker 1: say what he believed. He used to says, my job 689 00:33:18,080 --> 00:33:19,640 Speaker 1: to tell people what they need to know, not what 690 00:33:19,720 --> 00:33:23,120 Speaker 1: they want to hear, And that model absolutely embodied his spirit. 691 00:33:23,360 --> 00:33:28,640 Speaker 1: That's that's incredibly fitting. Certainly an influencer since long before 692 00:33:28,680 --> 00:33:32,800 Speaker 1: that became a term. I think, so, Uh, our condolences 693 00:33:32,840 --> 00:33:37,440 Speaker 1: to his loved ones. Um, and I'll try to cheer 694 00:33:37,520 --> 00:33:40,720 Speaker 1: us up a little bit here with my crazy thing. Uh, 695 00:33:40,880 --> 00:33:44,120 Speaker 1: I thought, I know you're a Jersey native, so surely 696 00:33:44,160 --> 00:33:48,160 Speaker 1: you you must have some familiarity with one Mr Bruce Springsteen. 697 00:33:48,880 --> 00:33:51,240 Speaker 1: So my my crazy things. Via my friend John Miller 698 00:33:51,320 --> 00:33:54,640 Speaker 1: pointed out a story in Rolling Stone. There's a bunch 699 00:33:54,680 --> 00:33:59,080 Speaker 1: of Springsteen memorabilia going up for sale at one of 700 00:33:59,120 --> 00:34:01,040 Speaker 1: the auction houses. I forgot to write down which one, 701 00:34:02,000 --> 00:34:05,040 Speaker 1: So it's time to play prices, right, Fildonna and Lorie. 702 00:34:07,320 --> 00:34:11,040 Speaker 1: The handwritten manuscript for the song The thunder Road, one 703 00:34:11,040 --> 00:34:14,560 Speaker 1: of the bosses most classic songs. Ever, it was written 704 00:34:14,560 --> 00:34:19,120 Speaker 1: in pen across four notebook pages. Uh. The final page 705 00:34:19,160 --> 00:34:21,839 Speaker 1: actually has two different versions of the opening verse, which 706 00:34:21,880 --> 00:34:26,000 Speaker 1: is kind of interesting. It's going up for sale. Uh. 707 00:34:26,440 --> 00:34:28,080 Speaker 1: We don't know what it will solve for, but they've 708 00:34:28,120 --> 00:34:30,840 Speaker 1: given us an estimated range. So lord, you go first, 709 00:34:30,880 --> 00:34:36,319 Speaker 1: what's your bid for the handwritten manuscript of thunder Road Lyrics? Oh? 710 00:34:36,440 --> 00:34:39,240 Speaker 1: I have no idea. I mean like pre pandemic inflation 711 00:34:39,320 --> 00:34:42,920 Speaker 1: or post pandemic inflation. I don't know. I don't know. 712 00:34:43,040 --> 00:34:45,839 Speaker 1: Fifty dollars. Was it for a charity? I don't know. 713 00:34:46,120 --> 00:34:49,160 Speaker 1: But that's a good question. I don't know. I'm gonna 714 00:34:49,200 --> 00:34:52,480 Speaker 1: keep a poker face, fildonna. What what's your bid for 715 00:34:53,280 --> 00:34:56,040 Speaker 1: the thunder Road manuscript? So you get the whole notebook 716 00:34:56,200 --> 00:35:00,719 Speaker 1: or you just go you get four pages, You're like, 717 00:35:00,800 --> 00:35:03,359 Speaker 1: I want, I want the whole notebook. You would, right, 718 00:35:03,560 --> 00:35:06,520 Speaker 1: because you never know what else is in the notebook. 719 00:35:06,719 --> 00:35:08,760 Speaker 1: It would be like taking interview notes in the empty 720 00:35:08,800 --> 00:35:12,400 Speaker 1: pages of it. Probably, yeah, for sure. Yeah, from the podcast. 721 00:35:12,600 --> 00:35:15,279 Speaker 1: I always take notes from the podcast. Um. I was 722 00:35:15,320 --> 00:35:19,839 Speaker 1: going to say twenty Yeah, you're frugal when it comes 723 00:35:19,880 --> 00:35:24,360 Speaker 1: to stuff like this. All right, Well, Laurie, um no, 724 00:35:24,480 --> 00:35:27,120 Speaker 1: Well it's the it's the handwritten lyrics the thunder Road. 725 00:35:27,239 --> 00:35:30,160 Speaker 1: Come on, Laurie, I gotta set my cap to you. 726 00:35:30,280 --> 00:35:34,520 Speaker 1: They're estimating between fifty thousand and seventy thousand. I personally 727 00:35:34,560 --> 00:35:36,200 Speaker 1: think it's going to go for a lot more, but 728 00:35:36,239 --> 00:35:37,960 Speaker 1: we'll have to check back on that the auctions at 729 00:35:37,960 --> 00:35:40,319 Speaker 1: the end of October. So I don't know a lot 730 00:35:40,320 --> 00:35:43,520 Speaker 1: of Boss fans out there, uh a lot. I know 731 00:35:43,560 --> 00:35:45,720 Speaker 1: a lot of Wall Streeters who are big Bruce fans. 732 00:35:46,080 --> 00:35:47,839 Speaker 1: I could see it going for more than that book, 733 00:35:47,880 --> 00:35:50,520 Speaker 1: but as far as the estimated price, Laurie, you'll be 734 00:35:50,640 --> 00:35:53,560 Speaker 1: pretty much doubted on the head there. That's impressive, excellent. 735 00:35:53,920 --> 00:36:01,000 Speaker 1: Hopefully my SMP target will be on with that. I 736 00:36:01,040 --> 00:36:03,200 Speaker 1: think that is all the time we have, uh, Laurie, 737 00:36:03,320 --> 00:36:06,319 Speaker 1: so great to catch up with the Uh. Always been 738 00:36:06,360 --> 00:36:08,719 Speaker 1: a good such an interesting guest on the show and 739 00:36:09,000 --> 00:36:11,480 Speaker 1: I can't wait to have you back someday. Well, thanks 740 00:36:11,520 --> 00:36:13,279 Speaker 1: for having me on which lard to it? Thank you, 741 00:36:13,360 --> 00:36:25,239 Speaker 1: LOI what goes up? We'll be back next week and 742 00:36:25,320 --> 00:36:27,280 Speaker 1: so then you can find us on the Bloomberg Terminal 743 00:36:27,400 --> 00:36:31,160 Speaker 1: website and app or wherever you get your podcasts. We'd 744 00:36:31,160 --> 00:36:32,640 Speaker 1: love it if you took the time to rate and 745 00:36:32,680 --> 00:36:35,319 Speaker 1: review the show on Apple podcast so more listeners can 746 00:36:35,400 --> 00:36:38,000 Speaker 1: find us. And you can find us on Twitter. Follow 747 00:36:38,080 --> 00:36:42,240 Speaker 1: me at Rea Anonymous. Bildada hi Rich is at Bildonta Hirich. 748 00:36:42,800 --> 00:36:46,319 Speaker 1: You can also follow Bloomberg Podcasts at podcasts I thank 749 00:36:46,360 --> 00:36:49,080 Speaker 1: you to Charlie Pell to Bloomberg Radio. What Goes Up 750 00:36:49,160 --> 00:36:52,320 Speaker 1: is produced by topur Foreheads. The head of Bloomberg podcast 751 00:36:52,480 --> 00:36:55,640 Speaker 1: is Francesco Levie. Thanks for listening, See you next time.