WEBVTT - Day Two, Part Two from Future Proof Festival 0:00:02.520 --> 0:00:08.719 Bloomberg Audio Studios, Podcasts, radio news. You're listening to Bloomberg 0:00:08.800 --> 0:00:13.080 BusinessWeek with Carol Messer and Tim Stenebek on Bloomberg Radio. 0:00:13.360 --> 0:00:15.920 Carol Masser, along with Barry Ridholtz, were live from future 0:00:16.000 --> 0:00:19.760 Proof in Huntington Beach, California. Bloomberg's live broadcast from future 0:00:19.800 --> 0:00:21.320 Proof is sponsored by JP. 0:00:21.239 --> 0:00:22.520 Morgan Asset Management. 0:00:22.800 --> 0:00:28.479 Our next guest is a lawyer, recognized successful financial planner 0:00:28.520 --> 0:00:29.920 who's been given various accolades. 0:00:29.920 --> 0:00:31.720 And you're going to say sex symbol for a secon. 0:00:34.280 --> 0:00:38.280 Wow, I don't know. Maybe, well, that's Bloomberg in. 0:00:38.320 --> 0:00:40.680 Front of his wife. How come on? 0:00:41.440 --> 0:00:44.280 Been named as Toppington in a bit of financial advisor. 0:00:44.320 --> 0:00:46.520 You've thrown me in America by barons for several years 0:00:46.520 --> 0:00:48.400 in a row. Co hosts The Down the Middle podcast 0:00:48.520 --> 0:00:52.479 New York Times bestselling author Fresh Afios in Ocean. 0:00:52.159 --> 0:00:53.280 Stage here at future Proof. 0:00:53.280 --> 0:00:56.360 See I can't even get it out talking about what 0:00:56.520 --> 0:00:58.800 he has done, how he has achieved success. 0:00:58.840 --> 0:01:00.240 Let's get to Peter Maluke. 0:01:00.600 --> 0:01:05.000 President CEO THEA Creative Planning They've been recognized, as I said, 0:01:05.000 --> 0:01:08.240 among the top are firms by barons and the financial firms. 0:01:08.280 --> 0:01:11.120 You've got what three hundred billion in assets under management 0:01:11.160 --> 0:01:11.840 end of last year? 0:01:11.880 --> 0:01:12.280 That's right? 0:01:12.840 --> 0:01:13.399 How's it going? 0:01:14.080 --> 0:01:16.440 Things couldn't be better? Nothing to complain about. 0:01:16.959 --> 0:01:17.520 Is it really? 0:01:17.680 --> 0:01:17.760 No? 0:01:17.880 --> 0:01:20.120 Seriously, Yeah, things are fantastic. 0:01:20.160 --> 0:01:22.480 I think a lot of running a firm or just 0:01:22.520 --> 0:01:24.280 money coming in well, I think both. 0:01:24.440 --> 0:01:26.560 You can't be running a firm and having it going 0:01:26.560 --> 0:01:28.959 well if money's not coming in. That's ultimately the sign 0:01:29.000 --> 0:01:31.320 that the market likes what you're doing. So we're the 0:01:31.560 --> 0:01:33.920 One thing I look at every day is are people 0:01:34.040 --> 0:01:38.040 coming to creative planning? And that net inflow tells us 0:01:38.040 --> 0:01:39.880 that we're doing the right things. And so we're really 0:01:39.920 --> 0:01:41.680 looking and saying, for that ultra fluent client or that 0:01:41.720 --> 0:01:45.320 highitworth client, are they hiring creative planning many many more 0:01:45.720 --> 0:01:48.520 times than they might have money leave? And if that's 0:01:48.560 --> 0:01:49.720 the case, things are going well. 0:01:50.200 --> 0:01:52.600 And you know, when I first met Peter back in 0:01:52.720 --> 0:01:57.560 twenty eighteen, twenty nineteen, you were still a reasonable sized firm, 0:01:57.600 --> 0:02:01.400 but you were like forty or so billion dollars. Five 0:02:01.480 --> 0:02:05.720 years later nearly a ten x. That's a giant gain. 0:02:06.560 --> 0:02:09.320 How have you been growing the business so successfully? What 0:02:09.400 --> 0:02:12.519 has made creative planning such a force in the industry. 0:02:12.800 --> 0:02:14.359 Well, I think we're for the end client. 0:02:14.360 --> 0:02:16.320 We're known for working with that high net worth investor 0:02:16.320 --> 0:02:18.720 that has the million dollars or two million dollars, But 0:02:18.760 --> 0:02:21.000 we also have sixteen hundred clients that have twenty five 0:02:21.040 --> 0:02:23.320 million on average with us, and that group is the 0:02:23.320 --> 0:02:26.080 group growing the fastest. But both of these are growing 0:02:26.080 --> 0:02:27.600 at a rapid clip. But I think that they like 0:02:27.880 --> 0:02:29.959 Number one. You see people moving from brokerage firms to 0:02:30.000 --> 0:02:32.600 independent firms. They're also moving to larger independent firms where 0:02:32.600 --> 0:02:34.800 they know there's more services, there might be more due diligence, 0:02:34.840 --> 0:02:38.160 better cybersecurity, all of those things that give those high 0:02:38.160 --> 0:02:39.960 networth clients comfort. 0:02:40.200 --> 0:02:42.400 And they also like the specialization of services we have. 0:02:42.480 --> 0:02:44.840 We look at the investment portfolio through a tax lens 0:02:44.840 --> 0:02:47.640 and an estate planning lens, and the world has gotten 0:02:47.639 --> 0:02:50.520 so complicated that you know, whether someone's got five hundred 0:02:50.560 --> 0:02:52.800 thousand or fifty million, they tend to value that more 0:02:52.880 --> 0:02:54.040 than they did in a decade ago. 0:02:54.160 --> 0:02:56.600 So talk about that. You use the phrase that that 0:02:56.639 --> 0:03:00.280 I'm very much enamored with of being the quarterback their 0:03:00.440 --> 0:03:04.120 entire financial life. What does that mean to the average creating, 0:03:04.240 --> 0:03:05.480 creative planning client. 0:03:05.600 --> 0:03:07.800 It's like a creative planning client knows, Okay, they're not 0:03:07.840 --> 0:03:09.680 just going to take my money and say this is 0:03:09.680 --> 0:03:11.600 my age or this is my risk tolerance, and I'm 0:03:11.639 --> 0:03:12.680 just going to go invest. 0:03:12.480 --> 0:03:14.240 In ABC, plug and play. Right that. 0:03:14.320 --> 0:03:16.640 They know that's not happening. So they're coming to us saying, Okay, 0:03:16.639 --> 0:03:18.560 this is a firm that's going to have a certified 0:03:18.560 --> 0:03:20.640 financial planner. Figure out where am I? What am I 0:03:20.639 --> 0:03:22.720 trying to accomplish? What state do I live in, what's 0:03:22.760 --> 0:03:25.320 my tax bracket, what's my legal situation? 0:03:25.400 --> 0:03:26.440 What am I try to accomplish? 0:03:26.440 --> 0:03:28.720 Am I charitably applied to or onably the biggest inheritance possible 0:03:28.760 --> 0:03:30.800 for my kids and my short of retirement. We go 0:03:30.880 --> 0:03:34.120 through this pretty long multi meeting exercise to figure out, well, 0:03:34.120 --> 0:03:35.520 where are they, what they want to do, and then 0:03:35.560 --> 0:03:37.520 we construct a portfolio that we think has the highest 0:03:37.560 --> 0:03:41.040 probability of creating the outcome they want, taking into account 0:03:41.120 --> 0:03:42.600 what's already going on in their life. If they own 0:03:42.600 --> 0:03:44.320 a bunch of real estate, they're not going to get 0:03:44.320 --> 0:03:47.480 real estate in the portfolio. I think that customization, then 0:03:47.560 --> 0:03:50.240 adding the tax sensitivity to it really being able to 0:03:50.240 --> 0:03:52.080 help them have a much better return on an. 0:03:52.040 --> 0:03:53.000 After tax basis. 0:03:53.480 --> 0:03:56.200 I think higher network people appreciate that approach, and I 0:03:56.200 --> 0:03:57.560 think we're sitting at the center of that. 0:03:57.720 --> 0:04:00.520 You mentioned sexy earlier, But how much of you investors 0:04:00.520 --> 0:04:03.200 are looking for, especially the higher net worth individuals are 0:04:03.200 --> 0:04:06.000 looking for sexier investments, and especially I think about the 0:04:06.040 --> 0:04:09.120 private world private credit, right, private equity, private equity, but 0:04:09.280 --> 0:04:10.360 especially private credit. 0:04:10.440 --> 0:04:12.760 Are they pushing for something with something more? 0:04:12.920 --> 0:04:14.360 Yes, So we do at creative planning. 0:04:14.360 --> 0:04:16.240 We're a very big believer in private investment, so we 0:04:16.279 --> 0:04:19.440 do use private equity, private credit, private real estate. Private 0:04:19.760 --> 0:04:22.120 credit is obviously kind of taken the world by storm, 0:04:22.200 --> 0:04:24.080 and I don't know that people fully appreciate the risk 0:04:24.160 --> 0:04:24.640 reward there. 0:04:24.680 --> 0:04:27.040 I have a big believer in private credit. Talked about 0:04:27.200 --> 0:04:27.760 we have a lot of. 0:04:27.760 --> 0:04:31.880 Explanation to people to really understand, you know, and private credits. 0:04:32.080 --> 0:04:33.039 It's like saying bonds. 0:04:33.160 --> 0:04:34.880 You know, there's all kinds of bonds, all kinds of 0:04:34.920 --> 0:04:37.760 different profiles, and so really understanding what you're getting into 0:04:37.800 --> 0:04:39.840 is a very big deal. But you know, a lot 0:04:39.839 --> 0:04:42.120 of them want those types of investments or hedge funds. 0:04:42.120 --> 0:04:43.520 We were not a big believer in hedge funds, so 0:04:43.520 --> 0:04:45.760 we don't use them. But I would say, is the 0:04:45.839 --> 0:04:47.960 higher net worth you go, the more demand there is 0:04:48.440 --> 0:04:49.719 for private credit, private equity. 0:04:49.800 --> 0:04:51.280 I want to ask you, do you think private credit 0:04:51.320 --> 0:04:53.880 should be available to the mouses, whether it's even fractional 0:04:53.920 --> 0:04:55.039 ownership of some sort. 0:04:55.800 --> 0:04:59.080 I think if if you have semi liquid I don't 0:04:59.120 --> 0:05:00.960 like that word very much. Yeah, things that people can 0:05:01.000 --> 0:05:03.560 get out of every six months or every year, then 0:05:03.600 --> 0:05:06.240 I think these sorts of investments should be available to 0:05:06.320 --> 0:05:08.520 people that have less money. 0:05:08.560 --> 0:05:09.960 I mean this idea. They have to be a qualified 0:05:09.960 --> 0:05:11.159 purchaser and a credit investor. 0:05:11.560 --> 0:05:13.640 I think it made sense five or ten, maybe say 0:05:13.640 --> 0:05:16.440 ten years ago when these were tied up for seven 0:05:16.520 --> 0:05:19.040 years and you had a very very sophisticated to understand it. 0:05:19.400 --> 0:05:22.880 What happened in O eight oh nine is the government 0:05:22.960 --> 0:05:25.880 really pushed credit out of the banks and into the 0:05:25.920 --> 0:05:26.640 private markets. 0:05:26.640 --> 0:05:29.000 They didn't want the destabilization of the banking system. Banks 0:05:29.000 --> 0:05:31.159 that we don't can't do the due diligence to do this. 0:05:31.880 --> 0:05:33.760 Now, if you look at firms with revenues of twenty 0:05:33.760 --> 0:05:37.159 five million to over a billion, eighty three percent of 0:05:37.200 --> 0:05:40.520 their borrowing is coming from private credit. Basically, the eight 0:05:40.560 --> 0:05:43.000 thousand public companies are now only forty five hundred or 0:05:43.040 --> 0:05:46.120 so private companies can stay private longer because of all 0:05:46.120 --> 0:05:49.040 the private credit available, So it's become a very mainstream 0:05:49.120 --> 0:05:51.880 asset clash. You can't freeze out the average American from that. 0:05:52.279 --> 0:05:56.960 And growing really fast. This is probably the fastest attracting cash. 0:05:57.279 --> 0:06:00.200 Maybe Crypto at various times in its cycle is a 0:06:00.200 --> 0:06:03.799 little faster. We've seen it certainly explode and then pull back, 0:06:04.080 --> 0:06:07.800 but private credit seems to be growing so rapidly. What 0:06:08.040 --> 0:06:11.560 percentage of someone's portfolio should they be thinking about for 0:06:11.680 --> 0:06:15.880 private credit, especially in the mid both the mid level 0:06:15.920 --> 0:06:17.120 and the high net worth level. 0:06:17.200 --> 0:06:19.320 So I always start by telling clients like, there's only 0:06:19.360 --> 0:06:21.080 really only two investments. You're an owner or you're a 0:06:21.160 --> 0:06:24.080 lender with everything right, and so when you're a lender, 0:06:24.160 --> 0:06:26.919 that the next question becomes, well, how much of my 0:06:26.960 --> 0:06:30.760 portfolio should I be a lender? Because you really accumulate 0:06:30.880 --> 0:06:33.200 wealth being an owner, whether it's private equity or stocks 0:06:33.240 --> 0:06:35.159 or a business or real estate, and a lender is 0:06:35.240 --> 0:06:37.240 more preservation or you know what your income is going 0:06:37.279 --> 0:06:39.200 to be, but you can't compete with being an Owner's 0:06:39.240 --> 0:06:42.120 why the Forbes list is full of owners not lenders, right, So, 0:06:42.160 --> 0:06:43.760 but if you look at that private side, then you 0:06:43.760 --> 0:06:46.080 could say, well, what part of the private of the 0:06:46.160 --> 0:06:47.919 lending side, what part of the lending side of my 0:06:47.960 --> 0:06:50.800 portfolio do I not need access to for the next 0:06:50.800 --> 0:06:53.520 couple months or couple of years. If you've got money 0:06:53.520 --> 0:06:55.960 that's years out, that's the part of the lending part 0:06:55.960 --> 0:06:57.800 of the portfolio that can be private credit, And that's 0:06:57.800 --> 0:06:59.040 how I back get into the allocation. 0:06:59.120 --> 0:07:01.200 Do you think it becomes much more accessible? I don't 0:07:01.200 --> 0:07:02.640 know in a few years, Like what does it take? 0:07:02.720 --> 0:07:04.520 Oh, I think it's happening at lightning speed. I think 0:07:04.560 --> 0:07:08.440 we're at creative planning. We're starting to added private equity 0:07:08.480 --> 0:07:10.040 into four when Kate Plans will be one of the 0:07:10.080 --> 0:07:11.640 first firms in the country, if not the first to 0:07:11.640 --> 0:07:13.760 do that. Really, I think private credit is going to 0:07:13.840 --> 0:07:15.320 come very very quickly thereafter. 0:07:15.800 --> 0:07:16.400 Fascinating. 0:07:16.680 --> 0:07:20.240 What about the crypto area, what do you think is 0:07:20.280 --> 0:07:23.360 the next chapter? Are your investors are they really still? 0:07:23.640 --> 0:07:24.400 Are they interested? 0:07:24.600 --> 0:07:26.520 So people are interested? Of course? 0:07:26.520 --> 0:07:29.120 I think crypto is it a toy? Yeah? 0:07:29.240 --> 0:07:29.880 Is it a toy? 0:07:30.000 --> 0:07:33.160 Or is it I think that I think ninety nine 0:07:33.200 --> 0:07:35.080 point nine to nine percent of crypto is going to 0:07:35.120 --> 0:07:37.840 go to zero, you'll wind up with you know, somewhere between. 0:07:37.840 --> 0:07:40.960 You don't think doin has some viability forgive me? 0:07:42.240 --> 0:07:43.960 Some people say not my opinion. 0:07:44.080 --> 0:07:47.040 I think there'll be like one to three winners. Yeah, 0:07:47.400 --> 0:07:50.080 if at all? Right, And so I think it's a 0:07:50.200 --> 0:07:53.000 it's a it's a bet, it's it's speculation. You can't 0:07:53.000 --> 0:07:57.040 buy any cryptocurrency and say I believe that ten years 0:07:57.080 --> 0:07:59.720 from now with certainty that my wealth is still going 0:07:59.760 --> 0:08:02.160 to be there. But I do understand it's an asymmetrical 0:08:02.240 --> 0:08:04.400 risk because the winner is going to get is going 0:08:04.480 --> 0:08:07.360 to have to go up one hundred fold, the losers 0:08:07.400 --> 0:08:10.520 go to zero. There is no in between. So I 0:08:10.560 --> 0:08:14.120 consider that speculation. Speculation is different than investing. And there's 0:08:14.160 --> 0:08:17.240 nothing wrong with speculating if you know you're speculating. Right, So, 0:08:17.280 --> 0:08:19.640 if you're putting that in the specuative part of your bucket, great, 0:08:19.680 --> 0:08:21.960 If you're putting it as like ten percent of your allocation, 0:08:22.040 --> 0:08:22.880 that's not investing. 0:08:23.840 --> 0:08:27.800 Really really interesting. What we've heard a lot about AI here, 0:08:27.920 --> 0:08:32.200 it's been a constant theme. How is a shot your 0:08:32.280 --> 0:08:35.559 size looking at that type of technology to make yourself 0:08:35.720 --> 0:08:37.480 more productive, more efficient for your. 0:08:37.360 --> 0:08:40.080 Clients well so so far, it's really it's summarizing meetings 0:08:40.080 --> 0:08:44.160 for us, it's size summarizing video conferencing for US, summarating 0:08:44.480 --> 0:08:47.240 summarizing internal documents for US. But we've tried to get 0:08:47.240 --> 0:08:50.199 it to read you know, insurance policies is not working yet. 0:08:50.240 --> 0:08:51.840 We've tried to get it to read a state plans. 0:08:51.880 --> 0:08:53.960 It's not working it. So I mean, look, it's it 0:08:54.040 --> 0:08:56.240 is beginning to change the world, and I think in 0:08:56.280 --> 0:08:58.200 the next ten years our jaws will drop with what 0:08:58.240 --> 0:09:01.559 it's capable of doing. But it has limitations today. What 0:09:01.600 --> 0:09:05.640 it does is is it's clearly making everyone more efficient, right, 0:09:06.120 --> 0:09:08.079 but it's not where it needs to be to really 0:09:08.120 --> 0:09:10.000 substantially change things the way the Internet did. 0:09:10.040 --> 0:09:11.440 It's inevitable, but it's not there now. 0:09:11.559 --> 0:09:13.640 So when somebody comes to you and they're like, look 0:09:13.679 --> 0:09:16.240 at all the changes, You're like, not yet, it's not really, 0:09:16.320 --> 0:09:17.440 they're not totally happening. 0:09:17.559 --> 0:09:20.440 It's not totally happening. It's happening, and it will happen 0:09:20.480 --> 0:09:22.360 in the next few years. But it's not like we 0:09:22.400 --> 0:09:23.920 wave a wand and everything got better. 0:09:23.960 --> 0:09:24.240 Today. 0:09:24.320 --> 0:09:26.480 You did a panel on the Blueprint for success, Yes, 0:09:26.640 --> 0:09:28.400 and listen, we on Bloomberg. We talked to a lot 0:09:28.440 --> 0:09:31.120 of folks who write books and here's the things. How 0:09:31.160 --> 0:09:34.400 do you kind of lay out how you got. 0:09:34.200 --> 0:09:34.920 To where you are? 0:09:35.480 --> 0:09:37.720 So I think to be successful, like in a capitalist society, 0:09:37.720 --> 0:09:39.440 you got to be one of a couple of things. 0:09:39.440 --> 0:09:41.480 You've got to be high value. Your people have to 0:09:41.520 --> 0:09:42.160 feel like they're. 0:09:42.000 --> 0:09:44.520 Getting more for you from someone else. You've got to 0:09:44.559 --> 0:09:47.120 be low cost relative to others, or you've got to 0:09:47.120 --> 0:09:49.680 be the fastest. Like if you think about Amazon, ninety 0:09:49.679 --> 0:09:51.720 percent of time you buy something on Amazon, it's cost 0:09:51.840 --> 0:09:53.800 more than going somewhere else. You're buying it because it's 0:09:53.800 --> 0:09:55.360 just so damn easy. It just shows up at your 0:09:55.360 --> 0:09:57.839 door really fast. And what I tell my team is 0:09:57.880 --> 0:10:01.560 that we want to be all three. Want to lower cost, 0:10:01.640 --> 0:10:03.680 not rock bottom, but a little lower than our peers. 0:10:03.720 --> 0:10:05.719 We want to deliver a massive value for what the 0:10:05.760 --> 0:10:08.280 clients are paying us. And we ought to be incredibly fast. 0:10:08.360 --> 0:10:10.480 We want our clients heads to spin with the speed 0:10:10.559 --> 0:10:12.520 with which we solve their problems. And I think that's 0:10:12.559 --> 0:10:15.240 why today we're the leading independent firm. I think it's 0:10:15.240 --> 0:10:17.440 a competitive landscape and you know, who knows how this 0:10:17.800 --> 0:10:18.640 game plays out. 0:10:18.679 --> 0:10:20.240 But if we're in the second or third ending of 0:10:20.280 --> 0:10:21.880 the game. You know we're up by a little bit. 0:10:22.040 --> 0:10:24.560 And let me blow a little smoke Peter's way. When 0:10:24.600 --> 0:10:27.160 we set up our firm, when I set up our WM, 0:10:27.640 --> 0:10:29.400 we looked around and like, who do you want to 0:10:29.440 --> 0:10:32.920 be like? And creative planning? And I'm not just saying 0:10:32.960 --> 0:10:35.280 you don't hear me say this. Creative Planning was a 0:10:35.360 --> 0:10:38.400 shop that we said, these guys have figured out how 0:10:38.440 --> 0:10:41.360 to do the right service and add value to clients 0:10:41.679 --> 0:10:44.960 in a way that made sense, and we very much 0:10:45.360 --> 0:10:47.640 em it. Do you and I have had this conversation before. 0:10:47.840 --> 0:10:51.240 It's a little bit of a log rolling, but we 0:10:51.360 --> 0:10:54.880 love the idea of being the financial quarterback and these 0:10:54.920 --> 0:10:57.280 are the people that established. 0:10:56.800 --> 0:10:59.319 That for investors that are out there here at Bloomberg. 0:10:59.559 --> 0:11:01.920 Really cool stuff to hear you saying. To hear the 0:11:01.960 --> 0:11:02.920 accolades from this. 0:11:02.880 --> 0:11:05.040 One hiphrais verry high high praise. 0:11:05.800 --> 0:11:06.160 It's true. 0:11:06.280 --> 0:11:08.040 Is there is there a book that you think everybody 0:11:08.080 --> 0:11:10.559 should read? Is there something someone should monitor if they're in, 0:11:10.760 --> 0:11:12.240 you know, an investor out there and we've just got 0:11:12.280 --> 0:11:13.880 about thirty seconds, thirty five seconds, is. 0:11:13.920 --> 0:11:16.560 It like, what do you help not counting your book. 0:11:17.400 --> 0:11:18.640 Yeah, yeah, no, shameless planning. 0:11:18.720 --> 0:11:21.199 I don't think there's a I'm not aware personally. Maybe 0:11:21.280 --> 0:11:24.160 Barry has one of like a firm of a book 0:11:24.200 --> 0:11:26.040 that would walk you through, you know, how to do it. 0:11:26.080 --> 0:11:26.440 I'm buried. 0:11:26.440 --> 0:11:29.240 Do you have just stay well read? Or in general 0:11:29.320 --> 0:11:31.920 for investors, you know game? 0:11:32.760 --> 0:11:34.640 Yeah, yeah, for winning investors. I thought, I'm sorry, I 0:11:34.640 --> 0:11:37.199 thought you meant about, you know, building as system business. No, 0:11:37.440 --> 0:11:39.560 I love one of the Loser's Game is a great example. 0:11:39.679 --> 0:11:40.480 Yeah, of course, all. 0:11:40.440 --> 0:11:41.800 Right, fun, thank you, thank you. 0:11:41.880 --> 0:11:43.360 Thanks for so appreciated. 0:11:43.559 --> 0:11:46.400 Petermilook, President CEO of Creative Planning Where to come from 0:11:46.480 --> 0:11:47.079 future Proof. 0:11:47.520 --> 0:11:48.880 This is Bloomberg. 0:11:52.440 --> 0:11:54.800 This is future Proof, and I'm Carol Master along with 0:11:54.880 --> 0:11:58.040 Barry Ridholt's hard to believe. We're almost like wrapping up here. 0:11:58.080 --> 0:12:00.680 I know, it's crazy, right, It's like it's like planning 0:12:00.720 --> 0:12:02.880 for a wedding and it's here and suddenly it's over, and. 0:12:02.880 --> 0:12:04.839 Then you start planning maybe for another wedding. 0:12:05.440 --> 0:12:08.200 All right, we are at Futureproof Bloomberg Radios live broadcast 0:12:08.240 --> 0:12:11.240 for future Proof. It is sponsored by JP Morgan Asset Management. 0:12:11.559 --> 0:12:13.599 Now throughout the day at future Proof. You know this, 0:12:13.760 --> 0:12:17.120 you've done some discussions panels. We had Jeff Gunlock of 0:12:17.200 --> 0:12:20.880 Double Line. You had your conversation with Joe Lonsdale. There's 0:12:20.880 --> 0:12:22.439 a lot going on, but we wanted to get to 0:12:22.480 --> 0:12:25.040 another panel, which looked into strategies for a five percent 0:12:25.120 --> 0:12:27.559 interest rate world, which is we know we talk a 0:12:27.600 --> 0:12:28.200 lot about. 0:12:27.960 --> 0:12:28.920 This, right, like, what do you do? 0:12:29.280 --> 0:12:31.640 So let's get to Kellie Cox because she did a panel. 0:12:31.760 --> 0:12:34.960 She did that discussion Chief market Strategies at Riodholt's Wealth Management. 0:12:35.040 --> 0:12:37.319 I know, I feel like I like this is kind 0:12:37.360 --> 0:12:39.280 of like interesting. Is this funny to do this? 0:12:39.520 --> 0:12:39.679 Yeah? 0:12:39.760 --> 0:12:42.640 Me and my boss, it's gonna be fun. As you said, 0:12:42.640 --> 0:12:43.839 it felt like a performance reviewer. 0:12:44.240 --> 0:12:45.480 Yeah yeah, So be easy on me. 0:12:45.520 --> 0:12:45.760 Berry. 0:12:45.840 --> 0:12:48.959 So CALLI. Let's talk a little bit about how you 0:12:49.080 --> 0:12:52.800 look at the world. You're relatively young compared to old 0:12:52.840 --> 0:12:55.400 timers like me. How do you what is the lens 0:12:55.480 --> 0:13:00.440 that optimistic Cali the name of your regular publication, How 0:13:00.440 --> 0:13:01.200 do you see the world? 0:13:01.600 --> 0:13:03.920 Yeah, well it's in the name Barry I like to 0:13:03.960 --> 0:13:06.640 call myself. I would say I'm an optimist, of course. 0:13:06.720 --> 0:13:09.280 I I have those risks that I see around me, 0:13:09.360 --> 0:13:11.199 and I think it's I think it's naive to be 0:13:11.280 --> 0:13:13.640 blind to risk. But in my newsletter that you mentioned 0:13:13.679 --> 0:13:16.840 Berry Optimistic Cali, I try to focus on the context 0:13:16.920 --> 0:13:20.439 that investors need to understand this rapid fire of information 0:13:20.559 --> 0:13:23.319 that they're reading every day, looking back to how markets work, 0:13:23.400 --> 0:13:26.000 have they worked in the past, what really matters for 0:13:26.080 --> 0:13:28.600 the economy, And I bring the data along with me too. 0:13:28.960 --> 0:13:31.599 I've been an analyst for over a decade now, and 0:13:31.880 --> 0:13:35.280 I like to have numbers for former Bloomberger. 0:13:34.760 --> 0:13:38.800 As well a reporter in the options market, right yeah. 0:13:39.160 --> 0:13:42.120 Which is big on data applied volatilities, So you know, 0:13:42.240 --> 0:13:44.160 I like to hone in on that background, but also 0:13:44.760 --> 0:13:47.720 bring it down to an average investor level, so anybody 0:13:47.800 --> 0:13:50.600 can understand how you know their money works and markets work. 0:13:50.679 --> 0:13:51.960 How do you read through the information? 0:13:52.080 --> 0:13:54.120 Then, I mean, there is so much information out there, 0:13:54.200 --> 0:13:56.000 but then you've got to weed through and kind of 0:13:56.000 --> 0:13:57.200 figure out what really matters. 0:13:57.600 --> 0:13:59.600 Well, I'm going to go back to my Bloomberg days. 0:14:00.320 --> 0:14:02.440 Bloomberg taught me how to do size and scope, which 0:14:02.600 --> 0:14:05.240 was if there's a number or if there's a move 0:14:05.280 --> 0:14:08.040 in markets that hasn't happened in a while, it's probably important. 0:14:08.080 --> 0:14:10.640 It's probably news and there's a story behind it. So 0:14:11.000 --> 0:14:14.120 that was the nugget that got me started, and I've 0:14:14.240 --> 0:14:16.280 essentially built my analysis off of that. Of course, I've 0:14:16.320 --> 0:14:19.400 learned the fundamentals of the stock market, I've learned the 0:14:19.440 --> 0:14:22.200 fundamentals of you know, the time value of money and 0:14:22.280 --> 0:14:25.120 compounding over time. But it all kind of goes back 0:14:25.160 --> 0:14:28.000 to that. If I see a weird jump in prices, 0:14:28.080 --> 0:14:30.640 if I see a weird move in data, then I 0:14:30.760 --> 0:14:32.760 dig into the story behind it, and I really hone 0:14:32.800 --> 0:14:34.560 into that journalist attitude. 0:14:35.160 --> 0:14:37.880 So let's talk about size and scope. You recently had 0:14:37.880 --> 0:14:41.600 a piece that I really liked talking about one percent days, 0:14:42.080 --> 0:14:44.080 and you dug into the data of how often we 0:14:44.240 --> 0:14:47.360 get these half a percent, one percent, three percent days. 0:14:47.640 --> 0:14:49.040 Tell us what your research found. 0:14:49.480 --> 0:14:51.800 Well, first of all, most days in the stock market 0:14:51.800 --> 0:14:53.920 are pretty boring, which is kind of crazy to think 0:14:53.960 --> 0:14:55.800 about because the news is screaming at you every day 0:14:55.800 --> 0:14:59.280 about how important it is. I believe I think it 0:14:59.360 --> 0:15:02.280 was more than half of days were twenty five basis 0:15:02.320 --> 0:15:04.160 points or excuse me, fifty bases point. 0:15:04.240 --> 0:15:07.960 Fu. Your data is fifty three percent of the days 0:15:08.240 --> 0:15:13.240 is fifty half of fifty BIPs of half a percent. 0:15:13.120 --> 0:15:15.720 Or less correct, which is kind of crazy, So more 0:15:15.800 --> 0:15:17.840 than half the day is like nothing's really going. 0:15:17.760 --> 0:15:21.040 On exactly, and stock market math is a little weird, right. 0:15:21.200 --> 0:15:23.440 I Mean when I think about percents, I think about sales, 0:15:23.480 --> 0:15:25.320 like going to a clothing store and seeing a sale, 0:15:25.480 --> 0:15:27.920 and if I saw one percent off, a one percent 0:15:28.000 --> 0:15:31.040 drop in prices, I'd be like, Okay, see you tomorrow. 0:15:31.360 --> 0:15:33.000 Give me something a little bit better. But in the 0:15:33.000 --> 0:15:34.960 stock market, that's actually quite a big day. I mean 0:15:35.040 --> 0:15:37.960 about twenty percent, less than twenty percent of days context 0:15:38.120 --> 0:15:40.800 or whenever see a one percent move, So one percent 0:15:40.920 --> 0:15:43.360 is important, and being able to provide that kind of 0:15:43.440 --> 0:15:47.680 information can really help an average investor understand those headlines 0:15:47.720 --> 0:15:49.680 that say, oh my god, the S and P fell 0:15:49.880 --> 0:15:52.520 one percent. It's important to our clients too, write Barry, 0:15:52.600 --> 0:15:56.520 because we get more questions, more contact with our advisors 0:15:56.600 --> 0:15:59.440 when they see those headlines and those big moves. 0:15:59.240 --> 0:16:03.080 In markets, and it's our job to anticipate that and 0:16:03.200 --> 0:16:06.560 tell people in advance, hey, this is normal. So let's 0:16:06.680 --> 0:16:09.200 let's stay with this line. How often do we see 0:16:09.320 --> 0:16:11.320 two or three percent moves in the market. 0:16:11.520 --> 0:16:14.240 So that's less often. I know we've seen a couple 0:16:14.360 --> 0:16:17.440 of those in the past month or so you know, Barry, 0:16:17.440 --> 0:16:19.360 you're putting me on the spot. But it doesn't happen 0:16:19.480 --> 0:16:22.880 a lot. Remember twenty percent of days you see a 0:16:22.920 --> 0:16:25.040 one percent move higher or lower, and you also have 0:16:25.080 --> 0:16:26.520 to remember a two percent move higher. 0:16:26.600 --> 0:16:27.160 People care a. 0:16:27.160 --> 0:16:29.760 Little bit less about that because we're all happy we're 0:16:29.840 --> 0:16:33.600 making money. So you know, two percent days, three percent days, 0:16:33.720 --> 0:16:35.680 they're a lot more rare. I know one point five 0:16:35.760 --> 0:16:38.200 percent days happened about ten percent of the time, And 0:16:38.320 --> 0:16:40.720