Speaker 1: It was another wicked week full of twist and turns
Speaker 1: of the financial markets, a bite of flow bank headlines,
Speaker 1: and of course, as you know, more today. So let's
Speaker 1: get a look at the week that was, thoughts as
Speaker 1: we head into the weekend with us right now, as
Speaker 1: Nancy Tangler, CEO and chief investment officer at Laffert Tangler Investments,
Speaker 1: and she joins us via zoom from Scottsdale, Arizona. Nancy
Speaker 1: Jess was like, we gotta talk to her, We gotta
Speaker 1: talk to you, We gotta talk to Nancy. So we're
Speaker 1: glad to have you wrap up the week that was.
Speaker 1: As we are sitting here on this Friday, an hour
Speaker 1: after the market closed, or an hour and a half
Speaker 1: after the market close, what is top of mind for you? Well,
Speaker 1: thanks so much, Carol and Jess, thanks for suggesting me.
Speaker 1: I think that what I'm concerned about is not the
Speaker 1: banking system, but the lack of regulatory supervision and continuity
Speaker 1: of messaging. I think Janet Yellen really sort of stepped
Speaker 1: in it yesterday when she sort of walked back that
Speaker 1: all deposits are guaranteed and we're not considering that while
Speaker 1: Powell is saying exactly the opposite that kind of confusion.
Speaker 1: The market did seem to finally shake off end of day,
Speaker 1: but it's a little bit troubling, and I think something
Speaker 1: that we're really watching. I also thought the presser was
Speaker 1: not Powell's best I know there's a lot of people
Speaker 1: that disagree with me, but there was a lot of
Speaker 1: I don't knows, and a real lack of willingness to
Speaker 1: sort of engage on the question of fiscal policy, which
Speaker 1: we think has clearly driven inflation or at least fanned
Speaker 1: the flames. So we're watching all of those things. But generally,
Speaker 1: we've been pretty optimistic since the fourth quarter when we
Speaker 1: began adding to our technology holdings and really adding risk
Speaker 1: back in, and that has really been a good decision
Speaker 1: in the near term and we hope a good decision
Speaker 1: for the long term. So if you feel that way,
Speaker 1: how did you feel about the Financial Stability Oversight Council
Speaker 1: coming out and after a meeting the Treasury Secretary Janet Yellen. J.
Speaker 1: Powell was there as well as some other regulators, financial
Speaker 1: banking regulators here in the US, and they came out
Speaker 1: and said US banking system remains dound and resilient, and
Speaker 1: that the Council discussed efforts to monitor financial developments. Our
Speaker 1: Craig Touris says it felt kind of flat. How do
Speaker 1: you feel for them to have an unscheduled meeting today
Speaker 1: and that's what they come out. Well, I think what
Speaker 1: we've learned from this regime of regulators is that and
Speaker 1: FED participants is that what they say is not necessarily
Speaker 1: what they mean. And by that I mean Chair Powell.
Speaker 1: I mean, I hope I'm wrong, but I think he
Speaker 1: goes down as one of the worst Federal Reserve chairman
Speaker 1: in our history. And the reason I say, yeah, he's
Speaker 1: been ethically wrong at every turning point and then doesn't
Speaker 1: seem to acknowledge those mistakes and just kind of continues
Speaker 1: along making statements. So that's why I'm troubled, because I
Speaker 1: don't know you can believe from what they say. I mean,
Speaker 1: if you look at the two year yield, the two
Speaker 1: year yield has led on the way up the FED,
Speaker 1: as it always does, by the way, and it's leading
Speaker 1: on the way down while the Feds still repeating rhetoric
Speaker 1: that I don't think they're going to be able to
Speaker 1: deliver on. And that's been the case all the way through. Remember,
Speaker 1: we're not even thinking about thinking about raising rates, and
Speaker 1: the rate hike came almost on the heels of that
Speaker 1: we won't go seventy five, and a week later we
Speaker 1: went seventy five. Two weeks ago, he said, you know,
Speaker 1: we're at fifty basis points. We think, you know, higher
Speaker 1: for longer, And that turned out to really be the
Speaker 1: final straw on the camel's back. I mean, not taking
Speaker 1: away the fact that SPB was, you know, notoriously wrong
Speaker 1: about their asset liability match, but I just think he
Speaker 1: has a credibility problem, and the market is if you
Speaker 1: look at risk assets, the market seems to not be
Speaker 1: listening anymore. And because you brought up PAL, I have
Speaker 1: to ask, what about Janet Yellen? How are you feeling
Speaker 1: about her so far this week? Yeah, I think I
Speaker 1: think she's made an you know, she stepped in it basically, Yes,
Speaker 1: I mean she she contradicted herself within two days, and
Speaker 1: that that isn't and and seems to be very political,
Speaker 1: as I would argue, so does Pale to some extent.
Speaker 1: And so that's a worry too, because you know, we
Speaker 1: really want I mean, Yellen isn't a political and appointee,
Speaker 1: So I don't fault her for that, but she just
Speaker 1: doesn't come across as leading. She comes across as as
Speaker 1: reading from a page, and that that I think the
Speaker 1: really troubled to market yesterday and we saw that in
Speaker 1: in the mid day. I do feel like this mirror
Speaker 1: is what we talked about with Chris Whalen earlier in
Speaker 1: terms of I mean, he's his feeling is the FED
Speaker 1: needs to be cutting rates at this point, that the
Speaker 1: exposure potentially of banks when it comes to the move
Speaker 1: up that we've seen in just one year, and potentially
Speaker 1: the impact it could have on more banks. What what what
Speaker 1: would you say we need to all be as investors
Speaker 1: focusing on right now, Nancy, Well, we know the economy.
Speaker 1: By the way, I agree with that. I think they
Speaker 1: should have paused at the last meeting they you know,
Speaker 1: he has also said that there is not a lagged
Speaker 1: effect on monetary policy and that monetary supply and the
Speaker 1: growth of the monetary supply has no impact on inflation.
Speaker 1: So there's a lot I disagree with him on. But
Speaker 1: I think we know that the economy is slowing, and
Speaker 1: in that environment, you really want to be focused on
Speaker 1: companies that can deliver earnings growth, and I think that
Speaker 1: is why investors have I mean, that was why we
Speaker 1: returned to technology in the fourth quarter. I mean, we
Speaker 1: had holdings, but we added to them because that's that's
Speaker 1: where I want to be positioned in a slowing economic environment.
Speaker 1: And then it really matters which companies you own. And
Speaker 1: as an illustration of that, just just consider the performance
Speaker 1: of Nvidia versus Intel. You know, on the surface, both
Speaker 1: semiconductor companies, very different baseline business, very different management teams,
Speaker 1: and so we're looking for the kind of companies that
Speaker 1: can have proven they can navigate through a slowing economy.
Speaker 1: And we're not adding to banks. In here. We were
Speaker 1: underweight the industry within the financial sector, and we remained
Speaker 1: so and have been adding to other names like American
Speaker 1: Express and Chubb Insurance. Have you been buying technology again still,
Speaker 1: because we've certainly seen some of the fang names. I
Speaker 1: don't know if you can call them fang names anymore
Speaker 1: because they've changed their names, but I mean, have you
Speaker 1: been buying because that's one of the things that I
Speaker 1: highlighted that we've really seen a kick up in a
Speaker 1: couple of these names in the last few weeks. Yeah,
Speaker 1: well so, Carol, we were buying in the fourth quarter,
Speaker 1: and I actually sold some right before the FED, before
Speaker 1: the press press conference, and just trimmed back because we
Speaker 1: were we were overweight of what our target was for
Speaker 1: the individual stocks. But we still hold them enthusiastically. And
Speaker 1: that by thang, I mean we don't own Meta, but
Speaker 1: you know that consumer I'm sorry, communication services, but we
Speaker 1: do own. Our theme is really around old economy companies
Speaker 1: that are embracing the digital revolution, and the digital economy
Speaker 1: is now ten and a half percent of GDP and growing,
Speaker 1: and the companies that supply the digital solutions. So we
Speaker 1: like names like Service Now that's one of our largest holdings,
Speaker 1: Palo out A network, Broadcom which is an AI, and
Speaker 1: enterprise cloud Play, and I can't even remember that other names.
Speaker 1: It's kind of it's okay, it's been that kind of
Speaker 1: a day, a week, two weeks. Yeah, I really want
Speaker 1: to know, Nancy, because obviously this is a million dollar
Speaker 1: question when it comes to capitulation, whether or not we
Speaker 1: bottom so far. But when you're looking at the SMP
Speaker 1: five hundred up one more than one percent this week,
Speaker 1: the NASAC one hundred up about two percent, but yet
Speaker 1: there's still a lot of negative sentiment out up with that.
Speaker 1: What is going on? Break this down for us? And
Speaker 1: do we need to see more of an inflection point
Speaker 1: happen here in the equity markets. Yeah, so we really
Speaker 1: haven't seen what would be classically defined as capitulation Jess,
Speaker 1: But we but we are at record barishness kind of metrics.
Speaker 1: If you look at the AAII or the fear Greed
Speaker 1: Index UM, individual investors are very negative and institutional investors
Speaker 1: are also very negative. That is usually a great time
Speaker 1: to be buying stocks because they you know that it's
Speaker 1: the contrary indicator, uh, that that really is very consistently
Speaker 1: pointing you in the right direction by having the wrong view.
Speaker 1: And so when when sentiment gets this bad, that that
Speaker 1: is a time when when brave investors should step in
Speaker 1: because it's usually followed by periods about performance. So I
Speaker 1: think what you're seeing is just, you know, the same
Speaker 1: thing that we've been talking about, inconsistent policies. UM. You know,
Speaker 1: the the U of MISS survey was was pretty negative.
Speaker 1: But then of course you know inflation um expectations are
Speaker 1: still grounded. People are seeing improvements in their real purchasing
Speaker 1: power because wages have gone up and inflation is coming down,
Speaker 1: but there are still a lot of variables that have
Speaker 1: people disturbed and uncomfortable, and I think that always affects
Speaker 1: the investing. You desire to get in and buy stocks.
Speaker 1: It's the best time to do it, however, Well, Warren
Speaker 1: Buffett would agree with you, probably as well. Nancy Tangler,
Speaker 1: thank you so much, Chief investment officer at Laffard Tangler Investments,
Speaker 1: joining us via zoom from Scottsdale, Arizona. Really appreciate you
Speaker 1: weighing in there.