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Speaker 1: BusinessWeek with Carol Messer and Tim Stenebek on Bloomberg Radio.
Speaker 2: Carol Masser, along with Barry Ridholtz, were live from future
Speaker 2: Proof in Huntington Beach, California. Bloomberg's live broadcast from future
Speaker 2: Proof is sponsored by JP.
Speaker 3: Morgan Asset Management.
Speaker 2: Our next guest is a lawyer, recognized successful financial planner
Speaker 2: who's been given various accolades.
Speaker 4: And you're going to say sex symbol for a secon.
Speaker 3: Wow, I don't know. Maybe, well, that's Bloomberg in.
Speaker 5: Front of his wife. How come on?
Speaker 2: Been named as Toppington in a bit of financial advisor.
Speaker 2: You've thrown me in America by barons for several years
Speaker 2: in a row. Co hosts The Down the Middle podcast
Speaker 2: New York Times bestselling author Fresh Afios in Ocean.
Speaker 3: Stage here at future Proof.
Speaker 2: See I can't even get it out talking about what
Speaker 2: he has done, how he has achieved success.
Speaker 4: Let's get to Peter Maluke.
Speaker 2: President CEO THEA Creative Planning They've been recognized, as I said,
Speaker 2: among the top are firms by barons and the financial firms.
Speaker 2: You've got what three hundred billion in assets under management
Speaker 2: end of last year?
Speaker 4: That's right?
Speaker 3: How's it going?
Speaker 4: Things couldn't be better? Nothing to complain about.
Speaker 3: Is it really?
Speaker 5: No?
Speaker 4: Seriously, Yeah, things are fantastic.
Speaker 3: I think a lot of running a firm or just
Speaker 3: money coming in well, I think both.
Speaker 6: You can't be running a firm and having it going
Speaker 6: well if money's not coming in. That's ultimately the sign
Speaker 6: that the market likes what you're doing. So we're the
Speaker 6: One thing I look at every day is are people
Speaker 6: coming to creative planning? And that net inflow tells us
Speaker 6: that we're doing the right things. And so we're really
Speaker 6: looking and saying, for that ultra fluent client or that
Speaker 6: highitworth client, are they hiring creative planning many many more
Speaker 6: times than they might have money leave? And if that's
Speaker 6: the case, things are going well.
Speaker 5: And you know, when I first met Peter back in
Speaker 5: twenty eighteen, twenty nineteen, you were still a reasonable sized firm,
Speaker 5: but you were like forty or so billion dollars. Five
Speaker 5: years later nearly a ten x. That's a giant gain.
Speaker 5: How have you been growing the business so successfully? What
Speaker 5: has made creative planning such a force in the industry.
Speaker 4: Well, I think we're for the end client.
Speaker 6: We're known for working with that high net worth investor
Speaker 6: that has the million dollars or two million dollars, But
Speaker 6: we also have sixteen hundred clients that have twenty five
Speaker 6: million on average with us, and that group is the
Speaker 6: group growing the fastest. But both of these are growing
Speaker 6: at a rapid clip. But I think that they like
Speaker 6: Number one. You see people moving from brokerage firms to
Speaker 6: independent firms. They're also moving to larger independent firms where
Speaker 6: they know there's more services, there might be more due diligence,
Speaker 6: better cybersecurity, all of those things that give those high
Speaker 6: networth clients comfort.
Speaker 4: And they also like the specialization of services we have.
Speaker 6: We look at the investment portfolio through a tax lens
Speaker 6: and an estate planning lens, and the world has gotten
Speaker 6: so complicated that you know, whether someone's got five hundred
Speaker 6: thousand or fifty million, they tend to value that more
Speaker 6: than they did in a decade ago.
Speaker 5: So talk about that. You use the phrase that that
Speaker 5: I'm very much enamored with of being the quarterback their
Speaker 5: entire financial life. What does that mean to the average creating,
Speaker 5: creative planning client.
Speaker 6: It's like a creative planning client knows, Okay, they're not
Speaker 6: just going to take my money and say this is
Speaker 6: my age or this is my risk tolerance, and I'm
Speaker 6: just going to go invest.
Speaker 4: In ABC, plug and play. Right that.
Speaker 6: They know that's not happening. So they're coming to us saying, Okay,
Speaker 6: this is a firm that's going to have a certified
Speaker 6: financial planner. Figure out where am I? What am I
Speaker 6: trying to accomplish? What state do I live in, what's
Speaker 6: my tax bracket, what's my legal situation?
Speaker 4: What am I try to accomplish?
Speaker 6: Am I charitably applied to or onably the biggest inheritance possible
Speaker 6: for my kids and my short of retirement. We go
Speaker 6: through this pretty long multi meeting exercise to figure out, well,
Speaker 6: where are they, what they want to do, and then
Speaker 6: we construct a portfolio that we think has the highest
Speaker 6: probability of creating the outcome they want, taking into account
Speaker 6: what's already going on in their life. If they own
Speaker 6: a bunch of real estate, they're not going to get
Speaker 6: real estate in the portfolio. I think that customization, then
Speaker 6: adding the tax sensitivity to it really being able to
Speaker 6: help them have a much better return on an.
Speaker 4: After tax basis.
Speaker 6: I think higher network people appreciate that approach, and I
Speaker 6: think we're sitting at the center of that.
Speaker 2: You mentioned sexy earlier, But how much of you investors
Speaker 2: are looking for, especially the higher net worth individuals are
Speaker 2: looking for sexier investments, and especially I think about the
Speaker 2: private world private credit, right, private equity, private equity, but
Speaker 2: especially private credit.
Speaker 3: Are they pushing for something with something more?
Speaker 4: Yes, So we do at creative planning.
Speaker 6: We're a very big believer in private investment, so we
Speaker 6: do use private equity, private credit, private real estate. Private
Speaker 6: credit is obviously kind of taken the world by storm,
Speaker 6: and I don't know that people fully appreciate the risk
Speaker 6: reward there.
Speaker 4: I have a big believer in private credit. Talked about
Speaker 4: we have a lot of.
Speaker 6: Explanation to people to really understand, you know, and private credits.
Speaker 4: It's like saying bonds.
Speaker 6: You know, there's all kinds of bonds, all kinds of
Speaker 6: different profiles, and so really understanding what you're getting into
Speaker 6: is a very big deal. But you know, a lot
Speaker 6: of them want those types of investments or hedge funds.
Speaker 6: We were not a big believer in hedge funds, so
Speaker 6: we don't use them. But I would say, is the
Speaker 6: higher net worth you go, the more demand there is
Speaker 6: for private credit, private equity.
Speaker 2: I want to ask you, do you think private credit
Speaker 2: should be available to the mouses, whether it's even fractional
Speaker 2: ownership of some sort.
Speaker 6: I think if if you have semi liquid I don't
Speaker 6: like that word very much. Yeah, things that people can
Speaker 6: get out of every six months or every year, then
Speaker 6: I think these sorts of investments should be available to
Speaker 6: people that have less money.
Speaker 4: I mean this idea. They have to be a qualified
Speaker 4: purchaser and a credit investor.
Speaker 6: I think it made sense five or ten, maybe say
Speaker 6: ten years ago when these were tied up for seven
Speaker 6: years and you had a very very sophisticated to understand it.
Speaker 6: What happened in O eight oh nine is the government
Speaker 6: really pushed credit out of the banks and into the
Speaker 6: private markets.
Speaker 4: They didn't want the destabilization of the banking system. Banks
Speaker 4: that we don't can't do the due diligence to do this.
Speaker 6: Now, if you look at firms with revenues of twenty
Speaker 6: five million to over a billion, eighty three percent of
Speaker 6: their borrowing is coming from private credit. Basically, the eight
Speaker 6: thousand public companies are now only forty five hundred or
Speaker 6: so private companies can stay private longer because of all
Speaker 6: the private credit available, So it's become a very mainstream
Speaker 6: asset clash. You can't freeze out the average American from that.
Speaker 5: And growing really fast. This is probably the fastest attracting cash.
Speaker 5: Maybe Crypto at various times in its cycle is a
Speaker 5: little faster. We've seen it certainly explode and then pull back,
Speaker 5: but private credit seems to be growing so rapidly. What
Speaker 5: percentage of someone's portfolio should they be thinking about for
Speaker 5: private credit, especially in the mid both the mid level
Speaker 5: and the high net worth level.
Speaker 6: So I always start by telling clients like, there's only
Speaker 6: really only two investments. You're an owner or you're a
Speaker 6: lender with everything right, and so when you're a lender,
Speaker 6: that the next question becomes, well, how much of my
Speaker 6: portfolio should I be a lender? Because you really accumulate
Speaker 6: wealth being an owner, whether it's private equity or stocks
Speaker 6: or a business or real estate, and a lender is
Speaker 6: more preservation or you know what your income is going
Speaker 6: to be, but you can't compete with being an Owner's
Speaker 6: why the Forbes list is full of owners not lenders, right, So,
Speaker 6: but if you look at that private side, then you
Speaker 6: could say, well, what part of the private of the
Speaker 6: lending side, what part of the lending side of my
Speaker 6: portfolio do I not need access to for the next
Speaker 6: couple months or couple of years. If you've got money
Speaker 6: that's years out, that's the part of the lending part
Speaker 6: of the portfolio that can be private credit, And that's
Speaker 6: how I back get into the allocation.
Speaker 2: Do you think it becomes much more accessible? I don't
Speaker 2: know in a few years, Like what does it take?
Speaker 6: Oh, I think it's happening at lightning speed. I think
Speaker 6: we're at creative planning. We're starting to added private equity
Speaker 6: into four when Kate Plans will be one of the
Speaker 6: first firms in the country, if not the first to
Speaker 6: do that. Really, I think private credit is going to
Speaker 6: come very very quickly thereafter.
Speaker 3: Fascinating.
Speaker 2: What about the crypto area, what do you think is
Speaker 2: the next chapter? Are your investors are they really still?
Speaker 3: Are they interested?
Speaker 4: So people are interested? Of course?
Speaker 5: I think crypto is it a toy? Yeah?
Speaker 3: Is it a toy?
Speaker 6: Or is it I think that I think ninety nine
Speaker 6: point nine to nine percent of crypto is going to
Speaker 6: go to zero, you'll wind up with you know, somewhere between.
Speaker 2: You don't think doin has some viability forgive me?
Speaker 3: Some people say not my opinion.
Speaker 6: I think there'll be like one to three winners. Yeah,
Speaker 6: if at all? Right, And so I think it's a
Speaker 6: it's a it's a bet, it's it's speculation. You can't
Speaker 6: buy any cryptocurrency and say I believe that ten years
Speaker 6: from now with certainty that my wealth is still going
Speaker 6: to be there. But I do understand it's an asymmetrical
Speaker 6: risk because the winner is going to get is going
Speaker 6: to have to go up one hundred fold, the losers
Speaker 6: go to zero. There is no in between. So I
Speaker 6: consider that speculation. Speculation is different than investing. And there's
Speaker 6: nothing wrong with speculating if you know you're speculating. Right, So,
Speaker 6: if you're putting that in the specuative part of your bucket, great,
Speaker 6: If you're putting it as like ten percent of your allocation,
Speaker 6: that's not investing.
Speaker 5: Really really interesting. What we've heard a lot about AI here,
Speaker 5: it's been a constant theme. How is a shot your
Speaker 5: size looking at that type of technology to make yourself
Speaker 5: more productive, more efficient for your.
Speaker 6: Clients well so so far, it's really it's summarizing meetings
Speaker 6: for us, it's size summarizing video conferencing for US, summarating
Speaker 6: summarizing internal documents for US. But we've tried to get
Speaker 6: it to read you know, insurance policies is not working yet.
Speaker 6: We've tried to get it to read a state plans.
Speaker 6: It's not working it. So I mean, look, it's it
Speaker 6: is beginning to change the world, and I think in
Speaker 6: the next ten years our jaws will drop with what
Speaker 6: it's capable of doing. But it has limitations today. What
Speaker 6: it does is is it's clearly making everyone more efficient, right,
Speaker 6: but it's not where it needs to be to really
Speaker 6: substantially change things the way the Internet did.
Speaker 4: It's inevitable, but it's not there now.
Speaker 2: So when somebody comes to you and they're like, look
Speaker 2: at all the changes, You're like, not yet, it's not really,
Speaker 2: they're not totally happening.
Speaker 6: It's not totally happening. It's happening, and it will happen
Speaker 6: in the next few years. But it's not like we
Speaker 6: wave a wand and everything got better.
Speaker 1: Today.
Speaker 2: You did a panel on the Blueprint for success, Yes,
Speaker 2: and listen, we on Bloomberg. We talked to a lot
Speaker 2: of folks who write books and here's the things. How
Speaker 2: do you kind of lay out how you got.
Speaker 3: To where you are?
Speaker 6: So I think to be successful, like in a capitalist society,
Speaker 6: you got to be one of a couple of things.
Speaker 4: You've got to be high value. Your people have to
Speaker 4: feel like they're.
Speaker 6: Getting more for you from someone else. You've got to
Speaker 6: be low cost relative to others, or you've got to
Speaker 6: be the fastest. Like if you think about Amazon, ninety
Speaker 6: percent of time you buy something on Amazon, it's cost
Speaker 6: more than going somewhere else. You're buying it because it's
Speaker 6: just so damn easy. It just shows up at your
Speaker 6: door really fast. And what I tell my team is
Speaker 6: that we want to be all three. Want to lower cost,
Speaker 6: not rock bottom, but a little lower than our peers.
Speaker 6: We want to deliver a massive value for what the
Speaker 6: clients are paying us. And we ought to be incredibly fast.
Speaker 6: We want our clients heads to spin with the speed
Speaker 6: with which we solve their problems. And I think that's
Speaker 6: why today we're the leading independent firm. I think it's
Speaker 6: a competitive landscape and you know, who knows how this
Speaker 6: game plays out.
Speaker 4: But if we're in the second or third ending of
Speaker 4: the game. You know we're up by a little bit.
Speaker 5: And let me blow a little smoke Peter's way. When
Speaker 5: we set up our firm, when I set up our WM,
Speaker 5: we looked around and like, who do you want to
Speaker 5: be like? And creative planning? And I'm not just saying
Speaker 5: you don't hear me say this. Creative Planning was a
Speaker 5: shop that we said, these guys have figured out how
Speaker 5: to do the right service and add value to clients
Speaker 5: in a way that made sense, and we very much
Speaker 5: em it. Do you and I have had this conversation before.
Speaker 5: It's a little bit of a log rolling, but we
Speaker 5: love the idea of being the financial quarterback and these
Speaker 5: are the people that established.
Speaker 2: That for investors that are out there here at Bloomberg.
Speaker 2: Really cool stuff to hear you saying. To hear the
Speaker 2: accolades from this.
Speaker 4: One hiphrais verry high high praise.
Speaker 7: It's true.
Speaker 2: Is there is there a book that you think everybody
Speaker 2: should read? Is there something someone should monitor if they're in,
Speaker 2: you know, an investor out there and we've just got
Speaker 2: about thirty seconds, thirty five seconds, is.
Speaker 5: It like, what do you help not counting your book.
Speaker 3: Yeah, yeah, no, shameless planning.
Speaker 6: I don't think there's a I'm not aware personally. Maybe
Speaker 6: Barry has one of like a firm of a book
Speaker 6: that would walk you through, you know, how to do it.
Speaker 7: I'm buried.
Speaker 3: Do you have just stay well read? Or in general
Speaker 3: for investors, you know game?
Speaker 6: Yeah, yeah, for winning investors. I thought, I'm sorry, I
Speaker 6: thought you meant about, you know, building as system business. No,
Speaker 6: I love one of the Loser's Game is a great example.
Speaker 4: Yeah, of course, all.
Speaker 3: Right, fun, thank you, thank you.
Speaker 4: Thanks for so appreciated.
Speaker 2: Petermilook, President CEO of Creative Planning Where to come from
Speaker 2: future Proof.
Speaker 3: This is Bloomberg.
Speaker 2: This is future Proof, and I'm Carol Master along with
Speaker 2: Barry Ridholt's hard to believe. We're almost like wrapping up here.
Speaker 5: I know, it's crazy, right, It's like it's like planning
Speaker 5: for a wedding and it's here and suddenly it's over, and.
Speaker 3: Then you start planning maybe for another wedding.
Speaker 2: All right, we are at Futureproof Bloomberg Radios live broadcast
Speaker 2: for future Proof. It is sponsored by JP Morgan Asset Management.
Speaker 2: Now throughout the day at future Proof. You know this,
Speaker 2: you've done some discussions panels. We had Jeff Gunlock of
Speaker 2: Double Line. You had your conversation with Joe Lonsdale. There's
Speaker 2: a lot going on, but we wanted to get to
Speaker 2: another panel, which looked into strategies for a five percent
Speaker 2: interest rate world, which is we know we talk a
Speaker 2: lot about.
Speaker 7: This, right, like, what do you do?
Speaker 2: So let's get to Kellie Cox because she did a panel.
Speaker 2: She did that discussion Chief market Strategies at Riodholt's Wealth Management.
Speaker 3: I know, I feel like I like this is kind
Speaker 3: of like interesting. Is this funny to do this?
Speaker 5: Yeah?
Speaker 3: Me and my boss, it's gonna be fun. As you said,
Speaker 3: it felt like a performance reviewer.
Speaker 7: Yeah yeah, So be easy on me.
Speaker 8: Berry.
Speaker 5: So CALLI. Let's talk a little bit about how you
Speaker 5: look at the world. You're relatively young compared to old
Speaker 5: timers like me. How do you what is the lens
Speaker 5: that optimistic Cali the name of your regular publication, How
Speaker 5: do you see the world?
Speaker 8: Yeah, well it's in the name Barry I like to
Speaker 8: call myself. I would say I'm an optimist, of course.
Speaker 8: I I have those risks that I see around me,
Speaker 8: and I think it's I think it's naive to be
Speaker 8: blind to risk. But in my newsletter that you mentioned
Speaker 8: Berry Optimistic Cali, I try to focus on the context
Speaker 8: that investors need to understand this rapid fire of information
Speaker 8: that they're reading every day, looking back to how markets work,
Speaker 8: have they worked in the past, what really matters for
Speaker 8: the economy, And I bring the data along with me too.
Speaker 8: I've been an analyst for over a decade now, and
Speaker 8: I like to have numbers for former Bloomberger.
Speaker 3: As well a reporter in the options market, right yeah.
Speaker 8: Which is big on data applied volatilities, So you know,
Speaker 8: I like to hone in on that background, but also
Speaker 8: bring it down to an average investor level, so anybody
Speaker 8: can understand how you know their money works and markets work.
Speaker 3: How do you read through the information?
Speaker 2: Then, I mean, there is so much information out there,
Speaker 2: but then you've got to weed through and kind of
Speaker 2: figure out what really matters.
Speaker 8: Well, I'm going to go back to my Bloomberg days.
Speaker 8: Bloomberg taught me how to do size and scope, which
Speaker 8: was if there's a number or if there's a move
Speaker 8: in markets that hasn't happened in a while, it's probably important.
Speaker 8: It's probably news and there's a story behind it. So
Speaker 8: that was the nugget that got me started, and I've
Speaker 8: essentially built my analysis off of that. Of course, I've
Speaker 8: learned the fundamentals of the stock market, I've learned the
Speaker 8: fundamentals of you know, the time value of money and
Speaker 8: compounding over time. But it all kind of goes back
Speaker 8: to that. If I see a weird jump in prices,
Speaker 8: if I see a weird move in data, then I
Speaker 8: dig into the story behind it, and I really hone
Speaker 8: into that journalist attitude.
Speaker 5: So let's talk about size and scope. You recently had
Speaker 5: a piece that I really liked talking about one percent days,
Speaker 5: and you dug into the data of how often we
Speaker 5: get these half a percent, one percent, three percent days.
Speaker 5: Tell us what your research found.
Speaker 8: Well, first of all, most days in the stock market
Speaker 8: are pretty boring, which is kind of crazy to think
Speaker 8: about because the news is screaming at you every day
Speaker 8: about how important it is. I believe I think it
Speaker 8: was more than half of days were twenty five basis
Speaker 8: points or excuse me, fifty bases point.
Speaker 5: Fu. Your data is fifty three percent of the days
Speaker 5: is fifty half of fifty BIPs of half a percent.
Speaker 2: Or less correct, which is kind of crazy, So more
Speaker 2: than half the day is like nothing's really going.
Speaker 3: On exactly, and stock market math is a little weird, right.
Speaker 8: I Mean when I think about percents, I think about sales,
Speaker 8: like going to a clothing store and seeing a sale,
Speaker 8: and if I saw one percent off, a one percent
Speaker 8: drop in prices, I'd be like, Okay, see you tomorrow.
Speaker 8: Give me something a little bit better. But in the
Speaker 8: stock market, that's actually quite a big day. I mean
Speaker 8: about twenty percent, less than twenty percent of days context
Speaker 8: or whenever see a one percent move, So one percent
Speaker 8: is important, and being able to provide that kind of
Speaker 8: information can really help an average investor understand those headlines
Speaker 8: that say, oh my god, the S and P fell
Speaker 8: one percent. It's important to our clients too, write Barry,
Speaker 8: because we get more questions, more contact with our advisors
Speaker 8: when they see those headlines and those big moves.
Speaker 5: In markets, and it's our job to anticipate that and
Speaker 5: tell people in advance, hey, this is normal. So let's
Speaker 5: let's stay with this line. How often do we see
Speaker 5: two or three percent moves in the market.
Speaker 8: So that's less often. I know we've seen a couple
Speaker 8: of those in the past month or so you know, Barry,
Speaker 8: you're putting me on the spot. But it doesn't happen
Speaker 8: a lot. Remember twenty percent of days you see a
Speaker 8: one percent move higher or lower, and you also have
Speaker 8: to remember a two percent move higher.
Speaker 4: People care a.
Speaker 8: Little bit less about that because we're all happy we're
Speaker 8: making money. So you know, two percent days, three percent days,
Speaker 8: they're a lot more rare. I know one point five
Speaker 8: percent days happened about ten percent of the time, And
Speaker 8: that's the point in my mind where I say this
Speaker 8: is serious, especially if there's a headline behind it. So
Speaker 8: you know, if we see sea days like August fifth,
Speaker 8: you know where the market melted down because of the
Speaker 8: young carry trade imploding.
Speaker 2: August is just a bad month for stocks. Definitely vacation If.
Speaker 5: They say that about September, Yeah, September is supposed to
Speaker 5: be a.
Speaker 3: Bit it's supposed to be.
Speaker 2: But I have to tell you, I mean I often
Speaker 2: go on vacation in August and there's always something going
Speaker 2: on or something bad happening.
Speaker 8: Well, there's not as much volume, so it makes sense
Speaker 8: there's a big gap.
Speaker 5: I always used to hear the expression rookies manning the
Speaker 5: terminals because everybody who was senior would be away for
Speaker 5: the month of August and they left the kids on
Speaker 5: the trading desk.
Speaker 8: Yeah, you're not wrong.
Speaker 3: I mean I go to the beach in August too.
Speaker 2: I am curious how you think about the markets as
Speaker 2: kind of a more efficient clearing house, only because there
Speaker 2: is so much information and then if there are worries
Speaker 2: out there, they kind of get it gets out there
Speaker 2: and we will often see kind of a big move
Speaker 2: in I feel like from peak to trough in an
Speaker 2: individual name or even in the markets, and we kind
Speaker 2: of clear out some noise and then we see investors
Speaker 2: come back in.
Speaker 8: Yeah, well, I think you're absolutely right, Carol. I think
Speaker 8: a lot about that since the drop we saw in
Speaker 8: twenty twenty and one of the fastest bear markets ever
Speaker 8: that special situation. It was a special situation. I mean,
Speaker 8: that was a once in a hundred years pandemic. But
Speaker 8: the flow of information is just so fast these days
Speaker 8: that you do see it manifested markets, and what that
Speaker 8: leads to is more emotions, you know, more contexts that
Speaker 8: we need to manage on the advisor side, and that's
Speaker 8: where roles like mine, rolls like Berry's are quite important,
Speaker 8: but also get.
Speaker 3: A lot more calls when there's like volatility or big way.
Speaker 5: We used to early on we got the phones would
Speaker 5: light up, And now it kind of feels like people
Speaker 5: know our stick. They've heard us talk about, Hey, volatility
Speaker 5: is normal. There's no upside without downside, right, So we
Speaker 5: really try and educate clients the time to read the
Speaker 5: emergency instructions in the seatback on your plane is on
Speaker 5: the ground, not after the wing comes off in the air.
Speaker 5: But I want to ask Kelly a quick question. In
Speaker 5: our last minute, everybody's been talking about the FED, if
Speaker 5: it's gonna cut tom our fest. I can't help but
Speaker 5: feel like that's already in the market. What are you
Speaker 5: looking at beyond tomorrow's FED announcement? What should people be
Speaker 5: thinking about for the rest.
Speaker 7: Of the year.
Speaker 8: Well, look, Berry, I mean I think the I think
Speaker 8: the bomb market has already priced in quite a few
Speaker 8: rate cuts, So yes, it's already baked into the market.
Speaker 8: You could hear people argue about twenty five versus fifty
Speaker 8: for the average investor. It doesn't really matter minimal economic
Speaker 8: impact in the first cut. The important thing that markets
Speaker 8: are going to be looking at is where the feed
Speaker 8: will go over the next twelve months or so, so
Speaker 8: correct how quickly will they get back to that neutral
Speaker 8: rate of three to three and a half percent.
Speaker 7: That's what I'm watching.
Speaker 8: I'm looking at the dot plot when we see projections
Speaker 8: come out on Wednesday. I'm of course listening to Powell
Speaker 8: and his evaluation of the economy. But this twenty five
Speaker 8: versus fifty debate, I mean, got into my head probably
Speaker 8: twenty five BIPs. But does it matter in the long
Speaker 8: run for most people?
Speaker 3: Know it makes for a good drinking game. That's about.
Speaker 5: She's tremendousness and she's good stuff.
Speaker 3: Kelly, Thank you, thank you for having me. She was
Speaker 3: a former Bloomberger.
Speaker 2: Of course, she's great, fantastic Kelly Cox, Chief Marcus strategist
Speaker 2: at Ridhelt's Wealth Management.
Speaker 3: Coming up next, Yon Van k excellent, looking forward to that.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 1: Stenebeck on Bloomberg Radio and Television.
Speaker 2: All right, everybody, this is future Proof. What a way
Speaker 2: to wrap up two days of coverage A treat I
Speaker 2: want to get right to it. This is, of course,
Speaker 2: Bloomberg Radios live coverage of future Proof, sponsored by JP
Speaker 2: Morgan Asset Management, Carol Master along with Barry Ridholts.
Speaker 3: Get off your phone. I'm just we have a special guest.
Speaker 5: I'm just looking at my notes.
Speaker 2: Well known, longtime name and firm of the investment world,
Speaker 2: and it was one of the first asset managers to
Speaker 2: provide investors with access to international markets. It does a
Speaker 2: lot more today. Fresh off a panel about what comes next?
Speaker 2: Is the CEO of van x Jan van Ck firm
Speaker 2: has about one hundred and eight billion in assets under management,
Speaker 2: nearly sixty billion in the US and international equities.
Speaker 7: Welcome, welcome, that it's great to be here.
Speaker 5: This is a treat.
Speaker 3: This is a treat.
Speaker 2: You are off a panel and I want to talk
Speaker 2: about what comes next. But you guys can invest around
Speaker 2: the world, lots of places the US.
Speaker 3: What's interesting right now?
Speaker 7: A couple of different things. One to start at home.
Speaker 7: Very concerned about the fiscal situation in the United States
Speaker 7: right everyone knows how definicits. It record historical highs, especially
Speaker 7: with low unemployment.
Speaker 2: And it's different this time around when we were worried
Speaker 2: many I feel like in the beginning of my career,
Speaker 2: we constantly talked about the deficit and then it went away.
Speaker 7: Exactly well, because there's an escape hatch, right, which is
Speaker 7: called the central bank or the treasury buys all our debt,
Speaker 7: which Japan has done and delayed its reckoning if it's
Speaker 7: even had a reckoning for twenty years. So it is
Speaker 7: that's exactly the dichotomy that investors have to face, right.
Speaker 7: There is this big fiscal deficit, but the bod vigilantes,
Speaker 7: I don't know if they're on another planet, but they're
Speaker 7: definitely asleep right, and treasuries are a rallying into this.
Speaker 7: So I would say, listen, what it means is we're
Speaker 7: going to be spending less money regardless. I think we'll
Speaker 7: have a split government one way or the other. I
Speaker 7: have no idea how we're just have to. We can't
Speaker 7: be spending trillion dollars at a clip because we just
Speaker 7: saw that it resulted in inflation.
Speaker 5: So let me push back on that a little bit
Speaker 5: because you and I have discussed this in the past,
Speaker 5: but I want you to defend that. So my whole
Speaker 5: professional career, I've been hearing warnings about the deficit is
Speaker 5: going to make it too expensive to service the debt.
Speaker 5: No one's gonna lend to Uncle Sam. The dollar won't
Speaker 5: be the reserve currency, it'll crowd out private capital. None
Speaker 5: of these things have happened, and Japan has kind of shown, hey,
Speaker 5: you could run a debt pretty high level. Their economy
Speaker 5: still has been doing pretty well. Why is the Why
Speaker 5: is the fiscal situation so dire here? Given that we
Speaker 5: haven't seen any problems.
Speaker 7: I'm just look, it's a political you know, approximation. I
Speaker 7: just think spending is going to go down, Barry. So
Speaker 7: what I say is, if you look at twenty twenty two,
Speaker 7: twenty twenty three, twenty twenty four, everyone's like waiting for
Speaker 7: the recession. Recession didn't happen. Why And that's why, I say,
Speaker 7: because government spending was so hot, right, So that's really
Speaker 7: my point that government spending unless you get another trillion
Speaker 7: dollars spending package, which isn't going to happen unless Kamala
Speaker 7: Harris gets elected and sweet's sweet, right, if that happens,
Speaker 7: we'll get more than trillion dollars spending bills. But even
Speaker 7: her party with Larry Summers, I think is reluctant because
Speaker 7: of the vision. That's sure, he's on it another planet too.
Speaker 5: He shunt it aside because he was wrong about inflation,
Speaker 5: wrong about the fiscal spend.
Speaker 7: Well, we did get inflation, yeah, but he said it
Speaker 7: was going to.
Speaker 5: Be persistent and you need ten percent unemployment to bring
Speaker 5: it down. It was transitory and maybe transtory took a
Speaker 5: little longer than expected. But I want to stay with
Speaker 5: the idea we've had. Uh, we didn't have single party rule.
Speaker 5: We had a major infrastructure bill go through week Miney's
Speaker 5: still working at We had this semiconductive bill go through.
Speaker 5: We had the inflation reduction that goes. We've had four
Speaker 5: major pieces of legislation that are all ten year spending plans. Yeah,
Speaker 5: why can't that happen if we have a split government
Speaker 5: going forward? It can?
Speaker 7: All right, I can't look, we don't know the future.
Speaker 7: But I'm just saying there's a lot of bills, like
Speaker 7: Trump's taxes are going to expire. There's another debt ceiling fight,
Speaker 7: so there's just a lot of turbulence. You're right, Maybe
Speaker 7: it comes out and we just keep on spending like
Speaker 7: it's twenty twenty two. So let me give you, Let
Speaker 7: me give you. That's one scenario. Then the markets continue
Speaker 7: to rep Okay scenario the air a tip to less
Speaker 7: primary case. Young's primary case, less government spending.
Speaker 5: Huh.
Speaker 7: So just like things get a little bit more subdued,
Speaker 7: and I think the tenure is reflecting that weird outside scenario.
Speaker 7: The bond vigilantes fly back with an Elon Musk vehicle
Speaker 7: back to Earth and they go crazy and the ten
Speaker 7: year freaks out. I agree, low probability investors just need
Speaker 7: to keep that mind. Long story short, Okay, if you
Speaker 7: needment that monetary stimulus, what do you want to own
Speaker 7: assets that are still unpopular? I would say future proof.
Speaker 7: Gold and bitcoin both have hit all time highs. But
Speaker 7: I'm surprised being at this conference there are not I
Speaker 7: would not run into a lot of bitcoin or gold.
Speaker 5: Bad a couple of crypto places. Gray scale is over there,
Speaker 5: but now.
Speaker 3: It's a different tone, right than we've seen over the
Speaker 3: last few years.
Speaker 5: So what metrics. So let's assume you're right and I'm wrong.
Speaker 5: What metrics are you watching to give you some insight that, hey,
Speaker 5: this scenario is playing out.
Speaker 7: Look at the technicals right again, Golden Bitcoin all time highs.
Speaker 7: Nice bull market? Yeah, but what boy?
Speaker 2: Uh?
Speaker 7: Bitcoin and golden rallying because of what I talked about, right,
Speaker 7: the equity markets rallying because we have an AI technology
Speaker 7: trend in Nvidia and a couple of companies.
Speaker 3: Is hitting all time. But that's great, But that's not
Speaker 3: just the megacaps.
Speaker 7: That's true. Yeah, No, I mean, I'm not bariss us equities.
Speaker 7: I'm just saying the way to construct your portfolio is
Speaker 7: to deal with opportunities, which of course are primarily US equities.
Speaker 7: But one of the risks on the horizon, which was
Speaker 7: the original question, right was what I see is fiscal turbulence.
Speaker 7: And I told you had to hedg up so for that,
Speaker 7: right that is? And then and then I think Barry
Speaker 7: knows when I look forward for the next ten years,
Speaker 7: India's economy is going to overtake that of continental Europe.
Speaker 7: And yeah, you can say the country companies are expensive,
Speaker 7: but there are two phone companies that effectively have an
Speaker 7: oligopoly over the access to the internet, and India is
Speaker 7: digitizing really interesting.
Speaker 3: I agree. I feel like the ship from China to
Speaker 3: India is happening in a big way right.
Speaker 7: In terms of people are very open to that story.
Speaker 7: Now come back soon, all right.
Speaker 3: Yeah, eck, what a great way to wrap up.
Speaker 5: We're done so much fun. Anytime I get to talk
Speaker 5: I'm thrilled.
Speaker 2: Anytime I get to talk to people like Yan and
Speaker 2: we like you, it's kind of fun. That's gonna do
Speaker 2: it for us. I'm Carol Master Long with Barry Ridholds.
Speaker 2: I'm going to be in New York for a post
Speaker 2: FED decision that's going to do it from future group.
Speaker 3: This is Bloomberg