WEBVTT - Bloomberg Surveillance: Inflation Data Moving Markets 0:00:05.040 --> 0:00:08.639 This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 0:00:08.680 --> 0:00:12.040 with Paul Sweeney. Join us each day for insight from 0:00:12.039 --> 0:00:16.240 the best in economics, finance, investment, and international relations. You 0:00:16.239 --> 0:00:19.599 can also watch the show live on YouTube. Visit the 0:00:19.600 --> 0:00:24.360 Bloomberg Podcast channel on YouTube to see the show weekday 0:00:24.360 --> 0:00:27.400 mornings from seven to ten am Eastern from our global 0:00:27.440 --> 0:00:32.080 headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 0:00:32.440 --> 0:00:36.000 or anywhere else you listen, and always I Bloomberg Radio, 0:00:36.200 --> 0:00:39.720 the Bloomberg Terminal, and the Bloomberg Business App. I'm going 0:00:39.800 --> 0:00:40.120 to sell? 0:00:40.200 --> 0:00:41.360 Can I sell a newsletter? 0:00:41.600 --> 0:00:41.920 Sure? 0:00:42.640 --> 0:00:47.680 Your Denny Quick Takes, folks, and we protect the copyright religiously. 0:00:47.040 --> 0:00:47.880 Of our guests. 0:00:47.680 --> 0:00:52.320 That's rule number one at Bloomberg Surveillance. Your Denny Quick 0:00:52.360 --> 0:00:56.680 Takes It comes in your feed in its blindingly CJ. 0:00:56.880 --> 0:01:01.080 Lawrence short and to the point. And whether you agree 0:01:01.160 --> 0:01:05.520 or disagree with doctor Yardanny, it frames an assists. 0:01:05.120 --> 0:01:07.480 You in your equity belief. 0:01:07.680 --> 0:01:09.959 Why don't you bring in Paul the guy who tells 0:01:10.000 --> 0:01:12.559 me I'm living the Roaring twenties. 0:01:12.240 --> 0:01:15.039 Exactly right, Ed Yard Denny. He is a president founder 0:01:15.080 --> 0:01:19.080 of a Yard Denny Research thanks so much for taking 0:01:19.080 --> 0:01:19.840 the time to join us. 0:01:19.880 --> 0:01:20.000 Year. 0:01:20.040 --> 0:01:22.080 I think a lot of people are looking at the 0:01:22.200 --> 0:01:25.600 economic data we've been getting over the last several weeks, 0:01:25.600 --> 0:01:28.600 looking at the earnings we're now parsing through here over 0:01:28.640 --> 0:01:30.440 the last couple weeks, and trying to get a sense 0:01:30.440 --> 0:01:35.320 of where we go with this market here, How are 0:01:35.319 --> 0:01:37.360 you framing all that data? How are you putting it 0:01:37.760 --> 0:01:39.480 in your model and coming out with kind of a 0:01:39.600 --> 0:01:40.000 view here. 0:01:40.840 --> 0:01:42.920 Well, it's been a go go market. I mean, it 0:01:43.040 --> 0:01:48.160 just keeps going. Certainly hasn't paused this year. It's been 0:01:48.200 --> 0:01:52.680 straight up actually since October of last year. We had 0:01:52.680 --> 0:01:56.160 a bit of a correction from August October last year, 0:01:56.520 --> 0:01:59.240 but it's also been more or less straight up with 0:01:59.320 --> 0:02:03.720 a brief ten percent correction since October of twenty twenty two. 0:02:03.800 --> 0:02:06.320 So it's been a phenomenal bull market. 0:02:06.520 --> 0:02:09.520 And Tom, for those are viewers on YouTube, that is 0:02:09.560 --> 0:02:12.160 a bookshelf. I have like three books on my body. 0:02:12.680 --> 0:02:14.400 Doctor Denny has a bookshelf. 0:02:15.960 --> 0:02:17.799 Excuse me. The blue button. The blue button is a 0:02:17.840 --> 0:02:20.960 Detroit Lions button. Thank you your Dennis got up there. 0:02:21.080 --> 0:02:24.320 Every book Robert Schiller's ever written, that's what it is. 0:02:24.720 --> 0:02:26.280 So Ed I mean, one of the things that I 0:02:26.320 --> 0:02:28.639 think concerns that you know some people have now is 0:02:28.720 --> 0:02:30.880 just boy, is if we've gone a little bit too far, 0:02:31.160 --> 0:02:33.720 too fast over the last three to four months, because 0:02:34.120 --> 0:02:37.120 I haven't seen earnings necessarily follow the performance of some 0:02:37.120 --> 0:02:38.200 of these risk assets. 0:02:38.760 --> 0:02:43.040 Well, we've seen earnings turning out to be surprisingly good 0:02:43.120 --> 0:02:46.600 for the megacap eight. Those stocks have done quite well, 0:02:46.639 --> 0:02:49.399 and we've seen as a result of that, we've seen 0:02:50.280 --> 0:02:51.880 these stocks do. 0:02:51.600 --> 0:02:52.440 Very very well. 0:02:53.160 --> 0:02:56.799 But overall, the economy is doing very well, and earning 0:02:56.880 --> 0:02:59.040 is I think are going to be something like two 0:02:59.120 --> 0:03:01.920 hundred and fifty dollars per share for the S and 0:03:01.960 --> 0:03:04.920 P five hundred this year, and that would be up 0:03:04.960 --> 0:03:07.239 from two twenty last year. 0:03:07.480 --> 0:03:09.240 And then beyond that, I. 0:03:09.200 --> 0:03:13.840 Think we'll see earnings continue to grow into twenty five 0:03:13.880 --> 0:03:16.480 and twenty twenty six. You don't see your recession. I 0:03:16.480 --> 0:03:17.280 think it keeps going. 0:03:17.480 --> 0:03:19.440 Edgar Denny with us here for the entire half hour. 0:03:19.440 --> 0:03:20.880 We're going to take a break in the middle of 0:03:20.880 --> 0:03:25.160 it to pay for Lisa Mitato's Super Bowl gluten free 0:03:25.240 --> 0:03:28.640 veggie chips. But other than that, Edgiar Denny with us 0:03:28.639 --> 0:03:32.000 for this half hour. Ed I want to frame out 0:03:32.240 --> 0:03:35.440 the shock sixty days ago where you said we're going 0:03:35.480 --> 0:03:39.000 to fifty four hundred SPX, I did the fancy math 0:03:39.040 --> 0:03:41.320 and got the Dow Jones Industrial average out to forty 0:03:41.320 --> 0:03:45.240 three thousand. On that number, do you get any sense 0:03:45.240 --> 0:03:48.680 that there's Schillarian exuberance out there? Are we getting a 0:03:48.800 --> 0:03:52.839 Robert Shiller Alan Greenspan irrational exuberance? 0:03:52.920 --> 0:03:53.720 I don't feel it. 0:03:55.280 --> 0:03:59.120 I think we've got exuberance for sure, and then it's 0:03:59.200 --> 0:04:01.920 debatable whether it's irrational. Yet right now it looks like 0:04:02.040 --> 0:04:05.400 rational exuberance. We still have a lot of money just 0:04:05.440 --> 0:04:09.240 parked on the side earning money market funds. We got 0:04:09.240 --> 0:04:12.440 something like six trillion dollars just in money market funds, 0:04:12.440 --> 0:04:16.680 So money isn't exactly pouring out of short term assets. 0:04:16.880 --> 0:04:20.919 Yes, I don't see the market well quickly or is 0:04:20.920 --> 0:04:21.440 it going to go? 0:04:21.680 --> 0:04:24.680 Is the money market fund going to support the yard 0:04:24.720 --> 0:04:26.560 Denny fifty four hundred SPX? 0:04:27.360 --> 0:04:31.479 Well, fifty four hundred, it doesn't look so amazing anymore. Yeah, 0:04:31.760 --> 0:04:34.360 that's why I'm talking about six thousand by the end 0:04:34.400 --> 0:04:38.240 of next year. There, fifty four hundred isn't as impressive 0:04:38.240 --> 0:04:40.159 as six thousand by the In the next year. Given 0:04:40.480 --> 0:04:42.279 how much territory we've covered. 0:04:42.440 --> 0:04:45.120 Ed your Denny with us, I can't say enough about 0:04:45.160 --> 0:04:47.320 his researcher comes in different platforms. 0:04:47.800 --> 0:04:50.440 Your Denny Quick Takes is worth its weight in gold. 0:04:50.480 --> 0:04:54.400 It's short, short, short, focused, and it synthesizes in his 0:04:54.520 --> 0:04:57.040 Yell economics all of his work on Wall Street over 0:04:57.080 --> 0:05:03.000 the decades into a call optimism in the American economic 0:05:03.200 --> 0:05:06.479 experiment to wit and I go back to what I 0:05:06.560 --> 0:05:10.480 call the yard Denny and campoora low two giants ed 0:05:10.560 --> 0:05:15.280 Yard Denny and the technical analyst Ralph and Campora lonely 0:05:15.560 --> 0:05:19.480 in October of twenty twenty two. And to get up 0:05:19.720 --> 0:05:23.480 to the Dow equivalent forty six thousand, which is ed 0:05:23.560 --> 0:05:27.800 Yard Denny's SPX six thousand, is a lift of sixty 0:05:27.880 --> 0:05:32.240 one percent, Doctor yardnny. Is that a normal lift out 0:05:32.240 --> 0:05:36.039 of an angst time when everybody's gloomy is up sixty percent? 0:05:36.560 --> 0:05:36.960 Normal? 0:05:37.839 --> 0:05:40.960 Well, it doesn't come with a money back guarantee. I mean, 0:05:41.160 --> 0:05:43.919 we always have risk in our forecasts, and we have 0:05:43.960 --> 0:05:47.680 to acknowledge that there are risks or geopolitical risks. There's 0:05:47.720 --> 0:05:50.560 always the risk that the price of oil spikes up again. 0:05:50.640 --> 0:05:54.040 But my base case is what I call a Roaring 0:05:54.120 --> 0:05:57.800 twenty twenties. It does rhyme with the Roaring nineteen twenties. 0:05:57.880 --> 0:06:01.240 And in this case, I think the technology innovations that 0:06:01.279 --> 0:06:05.720 are out there to boost productivity are already working. There's 0:06:05.760 --> 0:06:09.960 a significant shortage of vibor in our country's skill labor 0:06:10.320 --> 0:06:13.919 and technology is going to solve that problem on productivity. 0:06:14.320 --> 0:06:18.200 And again, the Mobson Callahan Morgan Stanley essay is brilliant, 0:06:18.000 --> 0:06:20.720 and it's February and it's already my essay here. 0:06:20.839 --> 0:06:21.520 What's that about? 0:06:21.560 --> 0:06:25.240 Maybe subject change, but on productivity at JR. Danny, it's 0:06:25.240 --> 0:06:30.640 about corporations adapting right, there's layoffs, there's right sizing, and 0:06:30.720 --> 0:06:33.120 that it's not about cost cutting. 0:06:33.120 --> 0:06:35.040 What's it about a new efficiency? 0:06:36.000 --> 0:06:39.040 I think it's exactly about a new efficiency. It's technology led. 0:06:39.120 --> 0:06:41.839 It doesn't mean that people are going to lose their jobs. 0:06:41.880 --> 0:06:44.279 I mean there is always churn in our labor market. 0:06:44.600 --> 0:06:47.640 We are saying in some of these technology companies cutting 0:06:47.680 --> 0:06:51.599 back in areas where they just don't see much upside anymore. 0:06:52.040 --> 0:06:54.200 But I think most of those people are going to 0:06:54.240 --> 0:06:57.400 find jobs very very quickly. They're very skilled, and there's 0:06:57.440 --> 0:06:59.880 a real shortage of skilled workers. I think what the 0:07:00.040 --> 0:07:05.080 chnology does is it augments the productivity of workers and 0:07:05.120 --> 0:07:08.520 therefore allows for the economy to grow more quickly. The 0:07:08.560 --> 0:07:11.680 labor force has only been growing around one percent or 0:07:11.800 --> 0:07:14.720 less over the past few years. And that's all we 0:07:14.800 --> 0:07:17.120 have to look forward to with real GDP if there's 0:07:17.120 --> 0:07:21.880 no productivity growth. But companies and businesses and entrepreneurs are 0:07:21.920 --> 0:07:25.600 aspirational and they are going to use technology to increase productivity. 0:07:25.600 --> 0:07:28.840 And it's already happening. We had an amazing three quarters 0:07:28.920 --> 0:07:32.280 last year. Last three quarters, productivity was extremely strong. 0:07:32.600 --> 0:07:32.840 Yeah. 0:07:32.840 --> 0:07:34.840 For the years aholl it was two point seven percent 0:07:34.960 --> 0:07:36.520 and Paul, the world was coming to an end. 0:07:36.760 --> 0:07:40.440 Yeah, absolutely, And that's amazing how productive folks were, even 0:07:40.480 --> 0:07:42.840 from the comforts of their own home. So ed one 0:07:42.880 --> 0:07:44.680 of the big drivers or one of the big investment 0:07:44.680 --> 0:07:46.840 themes in twenty twenty three, which looks like it's continuing 0:07:46.840 --> 0:07:49.640 into twenty twenty four, is this whole concept of artificial 0:07:49.640 --> 0:07:53.360 intelligence AI. It's not just the Magnificent seven. It seems 0:07:53.360 --> 0:07:55.000 like every company in the S and P five hundred 0:07:55.400 --> 0:07:59.400 mentions AI multiple times during their quarterly earnings calls, what 0:07:59.480 --> 0:08:01.480 do you make this? You've seen technologies come and go. 0:08:01.560 --> 0:08:03.680 You've seen waves come and go. What do you think 0:08:03.680 --> 0:08:04.360 of this AI thing? 0:08:05.200 --> 0:08:08.720 Well, I should really be embracing it as a confirmation 0:08:08.840 --> 0:08:13.280 of my roaring twenty twenties outlook, But I don't know. 0:08:13.920 --> 0:08:16.520 I'm agnostic on it. I want to see more evidence 0:08:16.560 --> 0:08:19.600 that it actually is making a huge difference. I'm still 0:08:19.640 --> 0:08:23.080 trying to have a conversation with Siri, and Siri you 0:08:23.080 --> 0:08:25.000 can only ask her one question at a time. You 0:08:25.040 --> 0:08:28.720 can't ask you to book you theater tickets or order 0:08:29.680 --> 0:08:33.680 dinner for you. So I'm wondering if Apple and Google 0:08:33.720 --> 0:08:38.199 couldn't get their personal assistance to really be interactive. I'm 0:08:38.240 --> 0:08:40.960 kind of wondering whether a lot of this may be 0:08:41.360 --> 0:08:45.240 artificial but not really intelligent, just quite yet. Look, it 0:08:45.320 --> 0:08:48.320 is a statistical model. It's kind of like when you 0:08:48.360 --> 0:08:53.040 sit down to write on word and the thing anticipates if. 0:08:52.920 --> 0:08:54.400 You write prod. 0:08:54.559 --> 0:08:57.040 It says, oh, you want productivity, and then you say, yes, 0:08:58.440 --> 0:08:59.080 I will get it. 0:08:59.200 --> 0:09:05.240 Partly in Twitter, it is a spectacular Bloomberg BusinessWeek effort 0:09:06.200 --> 0:09:10.320 by Ashley Vance on artificial intelligence. And they have taken 0:09:10.480 --> 0:09:13.080 scrolls in the old world. 0:09:13.360 --> 0:09:14.160 They're all clay. 0:09:14.200 --> 0:09:18.040 They're looking firewood logs, and they're using computers to read 0:09:18.120 --> 0:09:22.880 the scrolls, which they believe have never before seen. Classics 0:09:23.200 --> 0:09:26.080 like from Aristotle, really like Plato. 0:09:25.800 --> 0:09:28.480 Sounds like from Dr Denny. It's a good story. 0:09:28.600 --> 0:09:31.240 We hope to have mister Vance on next week if 0:09:31.280 --> 0:09:33.400 his people will agree with our people continue. 0:09:33.520 --> 0:09:35.160 Hey, Ed, you know one of the things we've I 0:09:35.160 --> 0:09:37.800 think a lot of investors have become I guess used 0:09:37.800 --> 0:09:41.320 to or expect, and they expect the tech sector to 0:09:41.480 --> 0:09:45.160 drive this market, to pull this market higher. Is that 0:09:45.320 --> 0:09:47.920 still the case? It seems like it with these magnificent 0:09:48.000 --> 0:09:51.080 seven And if so, that is that okay for this market? 0:09:51.679 --> 0:09:54.640 Well, there's this perception that that's not a legitimate little 0:09:54.720 --> 0:09:57.480 market because it's been very concentrated. It's been led by 0:09:57.800 --> 0:10:00.199 only seven or eight stocks, whether you know. I like 0:10:00.320 --> 0:10:03.240 to talk about the megacap eight because I watch a 0:10:03.280 --> 0:10:05.080 lot of Netflix, so I throw that in there with 0:10:05.160 --> 0:10:09.160 a magnificent seven. But yeah, I think technology continues to 0:10:09.880 --> 0:10:13.240 lead the way. Semiconductors have been on fire, and I 0:10:13.240 --> 0:10:16.599 think they continue to do extremely well. But as you 0:10:16.760 --> 0:10:20.240 sort of mentioned, every company is mentioning AI these days. 0:10:20.280 --> 0:10:23.320 I think every company is a technology company. You either 0:10:23.360 --> 0:10:25.280 make it or you use it. If you don't use it, 0:10:25.360 --> 0:10:27.600 you lose it, you go out of business. You have 0:10:27.679 --> 0:10:31.600 to use technology. What's really amazing about technology today is 0:10:31.640 --> 0:10:35.240 it's really focuses on augmenting the brain. It used to 0:10:35.240 --> 0:10:38.600 be all about productivity, used to be all about augmenting 0:10:38.640 --> 0:10:41.760 the brawn of humans. Now we're talking about the brain 0:10:41.800 --> 0:10:45.120 of humans, and we've a potential of. 0:10:45.080 --> 0:10:49.439 That is awesome. How did bull markets end badly? 0:10:51.320 --> 0:10:53.800 I mean, you know there is a potential here for 0:10:53.880 --> 0:10:56.280 something as we as you mentioned before of the nineteen 0:10:56.400 --> 0:11:01.320 ninety nineteen nineties. If there's a stock today that reminds 0:11:01.360 --> 0:11:04.000 me of Cisco, it's in video, and video made a 0:11:04.040 --> 0:11:06.400 lot of money on gaming chips. Then it became a 0:11:07.200 --> 0:11:10.839 bitcoin mining and now it's it's AI, and these are 0:11:10.880 --> 0:11:13.760 all legitimate sources of income. The stock has been on 0:11:13.840 --> 0:11:17.920 fire for good reasons. Earnings have been very strong. But 0:11:18.280 --> 0:11:23.839 Cisco went to the moon and then back, even though 0:11:24.040 --> 0:11:26.120 it made a lot of equipment for the Internet, and 0:11:26.200 --> 0:11:30.240 the Internet certainly survived and thrived, and I think AI 0:11:30.400 --> 0:11:33.640 will survive and thrive. But I think it is a 0:11:33.679 --> 0:11:37.520 little bit more hype than that then is justified for 0:11:37.640 --> 0:11:39.520 what it can deliver just yet, Paul, what. 0:11:39.480 --> 0:11:41.080 Do you make of that? I mean, well, here's I 0:11:41.120 --> 0:11:42.680 love the Cisco warning. 0:11:42.440 --> 0:11:46.839 But here's another alum from CJ. Lawrence. I mean, pound 0:11:46.880 --> 0:11:48.600 for pound. If people don't know, go back and google 0:11:48.640 --> 0:11:50.440 that pound for pound. That was some of the best 0:11:50.480 --> 0:11:52.439 research coming out of Wall Street for a long period 0:11:52.480 --> 0:11:52.760 of time. 0:11:53.240 --> 0:11:53.439 C J. 0:11:53.559 --> 0:11:53.880 Lawrence. 0:11:53.880 --> 0:11:56.040 Back, it was printed back in the day, Back in 0:11:56.040 --> 0:11:58.800 the day, folks, that weren't PDFs, and it was tactile, 0:11:59.000 --> 0:12:02.679 and it was visceral. There was paper and you had 0:12:02.720 --> 0:12:06.479 a pencil. And I'm sorry, Paul, I thought that oftentimes. 0:12:06.480 --> 0:12:07.960 I think that's way more valuable. 0:12:17.960 --> 0:12:20.320 You're in Timer joins us in the studio today. 0:12:21.240 --> 0:12:25.360 What did the charts say about the Magnificent seven? Will 0:12:25.520 --> 0:12:31.240 Danoff as twelve thirteen percent of his portfolio in meta Facebook? 0:12:31.679 --> 0:12:34.000 What do your charts say to Countrafund? 0:12:35.160 --> 0:12:38.640 Good morning? And by the way, the charvelroom really used 0:12:38.679 --> 0:12:40.880 to be like a war room back in the day, 0:12:42.000 --> 0:12:46.440 preceding even Ned Johnson, but his father, mister Johnson, and 0:12:46.520 --> 0:12:50.080 that's where they would just you know, strategize because that 0:12:50.200 --> 0:12:53.440 was pre computer experience, and they would sit in that 0:12:53.559 --> 0:12:55.920 room and just you know, try to solve the world's 0:12:55.920 --> 0:12:56.280 from them. 0:12:56.600 --> 0:12:58.360 Well, they're doing that at the Echos building now, and 0:12:58.440 --> 0:12:59.480 you see how that's going. 0:12:59.679 --> 0:13:01.679 Yes, what do you say to Will Danoff about the 0:13:01.760 --> 0:13:04.440 Magnificent seven from your technical. 0:13:04.320 --> 0:13:08.360 So so our analysts, you know, they and portfolio managers, 0:13:08.360 --> 0:13:11.600 they look for the winners over the long term, right 0:13:11.640 --> 0:13:15.600 the next five ten years. The way I look at it, 0:13:15.640 --> 0:13:18.640 and I've studied this extensively, you know, I've looked at 0:13:18.679 --> 0:13:22.440 the nifty to fifty phenomenon, which started back in the 0:13:22.480 --> 0:13:26.760 early seventies. So back then, you know, if you remember 0:13:26.800 --> 0:13:29.360 I was, I wasn't quite around there then yet. But 0:13:29.880 --> 0:13:33.640 you know, after the sixty eight speculative glamour stock bubble, 0:13:33.720 --> 0:13:36.960 the market, you know, fell thirty six percent. It wiped 0:13:36.960 --> 0:13:40.480 out retail, and the market was in the hands of 0:13:40.520 --> 0:13:44.400 institutional investors, and everyone got so burned by the glamour stocks. 0:13:44.400 --> 0:13:48.280 They just wanted to buy tried and true earning scrollers 0:13:48.280 --> 0:13:52.640 you know, IBM, Xerox, you know, et cetera, Coalgate, and 0:13:52.720 --> 0:13:56.640 those stocks delivered, but they ended up trading at really 0:13:56.679 --> 0:13:59.200 an extreme like they ended up trading at twice the 0:13:59.280 --> 0:14:04.320 markets valuation, so there was a two x premium and 0:14:04.400 --> 0:14:08.000 then you know, inflation happened. It wiped out valuations everywhere, 0:14:08.760 --> 0:14:10.880 and they went from twenty x to seven x by 0:14:10.920 --> 0:14:13.120 the late seventies. And then in the late nineties we 0:14:13.200 --> 0:14:16.080 had the same thing, different companies, of course, different players, 0:14:16.120 --> 0:14:19.280 but that was the dot com bubble again a two 0:14:19.520 --> 0:14:23.120 x valuation premium. The market stayed at twenty x and 0:14:23.240 --> 0:14:25.880 those nifty to fifty went from twenty to forty x. 0:14:25.920 --> 0:14:30.160 That bubble imploded on itself. Now we have again dominance 0:14:30.240 --> 0:14:33.440 by you know, mag seven. I tend to kind of 0:14:33.480 --> 0:14:35.880 still look at it as nifty to fifty, even though 0:14:35.880 --> 0:14:38.000 they were a future than fifty. But just to be consistent, 0:14:38.560 --> 0:14:41.600 the premium on the valuation size is only about thirty percent. 0:14:41.680 --> 0:14:44.120 It's not the one hundred percent that it was the 0:14:44.200 --> 0:14:47.760 last two times. So these stocks have now dominated for 0:14:47.800 --> 0:14:51.440 almost a decade, but it's been mostly justified by earnings. Yes, 0:14:51.760 --> 0:14:53.920 and that's a different take on it. 0:14:54.320 --> 0:14:56.680 So I mean the way I kind of phrase it 0:14:56.720 --> 0:15:00.400 is just tech has led this market for such a 0:15:00.440 --> 0:15:03.520 long time, and I kind of feel conditioned that if 0:15:03.520 --> 0:15:05.520 Tech's not going to lead this market, this market's not 0:15:05.520 --> 0:15:07.720 going higher. I'm not sure if that's the case, but 0:15:07.920 --> 0:15:09.600 do you still feel like tech and some of these 0:15:09.600 --> 0:15:11.880 things have to work for this market to work. 0:15:13.040 --> 0:15:18.240 So it's a nuance of overall participation in the market 0:15:18.400 --> 0:15:22.400 versus who is outperforming. Right, So last year we had 0:15:22.440 --> 0:15:26.520 the record narrowest market. Only twenty six percent of the 0:15:26.560 --> 0:15:28.960 socks and the S and P outperformed the S and P. 0:15:29.440 --> 0:15:31.600 So that's the lowest we've ever seen, but and on 0:15:31.720 --> 0:15:35.720 par with early seventies, late nineties. So the market does 0:15:35.800 --> 0:15:38.760 eventually broaden. I mean, that's just the mean reversion nature 0:15:38.760 --> 0:15:41.680 of the market. And I am in the bullish broadening 0:15:41.720 --> 0:15:43.640 camp for this year. I mean when you look at 0:15:43.680 --> 0:15:46.600 obviously S and P five cap weighted is making new 0:15:46.680 --> 0:15:49.680 highs it's at five thousand. But I look at SPW 0:15:50.640 --> 0:15:54.280 five hundred equal weighted indext to me, that's the most 0:15:54.280 --> 0:15:58.360 important chart, and that's been sitting below its all time 0:15:58.440 --> 0:16:01.400 highs now for like one hundred and seven weeks, but 0:16:01.520 --> 0:16:04.200 it's like two percent below, right, it's on the cusp. 0:16:04.600 --> 0:16:07.280 And I do think that history will tell you, right, 0:16:07.400 --> 0:16:10.480 market goes up seventy percent of the time, by about 0:16:10.560 --> 0:16:14.520 ten to eleven percent. It's the market's inherent nature to 0:16:14.560 --> 0:16:17.400 go up, So you know you want to be a 0:16:17.400 --> 0:16:20.440 bear at like with some caution because you're really fighting 0:16:20.520 --> 0:16:23.800 the odds. So to me, it's a question of the 0:16:23.880 --> 0:16:27.320 generals are leading the soldiers. Obviously, the market made a 0:16:27.360 --> 0:16:30.160 new all time high in January. January is an up months, 0:16:30.160 --> 0:16:33.800 so these things are momentum builders. So in my sense, 0:16:33.840 --> 0:16:38.240 the SPW will follow suit. The market will broaden. But 0:16:38.360 --> 0:16:43.840 that doesn't mean that other stuff will outperform the megacap growers, right, 0:16:43.840 --> 0:16:46.040 that doesn't mean the banks are going to outperform. So 0:16:46.160 --> 0:16:48.520 I don't have a good handle on who's outperforming, but 0:16:48.560 --> 0:16:50.840 I do have a sense that the market's going to 0:16:51.000 --> 0:16:54.240 broaden out. And for an investor who might have missed 0:16:54.280 --> 0:16:57.320 out the rally last year, that's kind of a second 0:16:57.440 --> 0:16:58.960 chance to still participate. 0:16:59.880 --> 0:17:03.400 You guys did sector funds. It was like resolution funds. 0:17:03.680 --> 0:17:07.120 Select excuse me, select funds. It was revolutionary. People though 0:17:07.160 --> 0:17:10.359 you're authors, can't do this. It breaks prudent maneral people 0:17:10.440 --> 0:17:11.879 over putting on their heads are spinning. 0:17:11.880 --> 0:17:12.720 They can't do that. 0:17:13.240 --> 0:17:16.800 And now it's one big sector E t F. You're 0:17:16.840 --> 0:17:20.960 in timor on how we're handling passive and active E 0:17:21.080 --> 0:17:24.040 t f's forget about bitcoin, and you know, thats just 0:17:24.080 --> 0:17:27.960 for mere mortals like me. We've become one big select fund, 0:17:28.000 --> 0:17:28.399 haven't we. 0:17:29.920 --> 0:17:31.000 It depends. 0:17:31.040 --> 0:17:34.240 I mean, there there's a fund for for everyone, right, 0:17:34.280 --> 0:17:36.800 I mean there's many of them. And you know now 0:17:37.280 --> 0:17:39.920 now even in digital assets, there are options, and I'm 0:17:40.040 --> 0:17:42.399 very proud of our our team and how well we've 0:17:42.480 --> 0:17:43.760 done in terms of launching. 0:17:43.800 --> 0:17:49.800 You think bet Dog's a legit asset. 0:17:47.640 --> 0:17:51.120 But you know, but it's it's a question of portfolio 0:17:51.160 --> 0:17:57.720 allocation and having blunt instruments versus you know, surgical tools, 0:17:57.720 --> 0:18:00.359 and it's good to have the options, and they're not 0:18:00.400 --> 0:18:03.919 for everyone. I mean, for many investors it's fine just 0:18:03.960 --> 0:18:07.720 to buy some SMP or some MSCI EPHA or world 0:18:07.880 --> 0:18:11.520 x US. But others want to get more specific, and 0:18:11.600 --> 0:18:14.520 so we can go value growth, small, large, US, non 0:18:14.600 --> 0:18:18.560 US developed, emerging, and there are areas where you want 0:18:18.560 --> 0:18:20.680 to be nuanced, like in emerging markets. You know, they're 0:18:20.720 --> 0:18:23.439 not all created equally, and so you want to be 0:18:23.520 --> 0:18:24.359 discerning there. 0:18:24.480 --> 0:18:28.000 What's the biggest mistake thirty seconds, what's the biggest mistake 0:18:28.119 --> 0:18:30.159 people make in technical analysis? 0:18:31.640 --> 0:18:36.080 They don't back test the indicators and they lose the 0:18:36.160 --> 0:18:39.960 context because without context, they're all a coin toss and 0:18:40.040 --> 0:18:41.800 so you need to have a you need to have 0:18:41.840 --> 0:18:44.960 a thesis saying okay, this is a consolidation and an 0:18:45.040 --> 0:18:47.720 up trend. If you don't make that assumption. You can 0:18:47.720 --> 0:18:50.600 never get around assumptions in our world, even though they 0:18:50.600 --> 0:18:53.640 make asses out of you and me. But you need 0:18:53.680 --> 0:18:56.880 to have some context around the indicators. Otherwise it's noise. 0:18:57.160 --> 0:19:00.919 You can could you see Belichick running money? Yeah? I 0:19:00.920 --> 0:19:02.440 mean you can't get a job coaching. 0:19:02.160 --> 0:19:04.480 Football now you can, but he can get an office. 0:19:04.800 --> 0:19:06.600 The Belichick Fund. Sure, it's fideling. 0:19:06.720 --> 0:19:07.159 It works. 0:19:07.520 --> 0:19:10.840 Urin Timmer from Boston, thank you so much, just at 0:19:11.440 --> 0:19:14.240 I can't say enough over the place about his technical work. 0:19:14.320 --> 0:19:18.320 Look out on linked in. It is the best technical 0:19:18.320 --> 0:19:21.359 work on LinkedIn. Urion Timmer t I, M M E. 0:19:21.560 --> 0:19:27.440 ER can't say enough about it. There's something that we 0:19:27.480 --> 0:19:29.800 haven't done recently. It's just been off the news radar, 0:19:30.320 --> 0:19:32.439 and that's a shock when you see what's going on 0:19:32.480 --> 0:19:35.919 in the Eastern Mediterranean. As President Biden mentioned as he 0:19:35.960 --> 0:19:38.240 walked back to the podium yesterday after the end of 0:19:38.280 --> 0:19:42.679 the press conference, there's some geopolitical risks out there and 0:19:42.720 --> 0:19:44.880 it gets you. As as Lisa was mentioning the oil 0:19:44.920 --> 0:19:48.880 prices elevated imics seventy six a barrel bread crude eighty 0:19:48.920 --> 0:19:53.280 two dollars a barrel exquisite on this is Emrita Sen. 0:19:53.440 --> 0:19:54.920 We're thrilled that she joins us. 0:19:55.880 --> 0:19:56.399 Right now. 0:19:56.880 --> 0:20:00.600 Emrita, you're just wonderful On the supply and demanding, which 0:20:00.640 --> 0:20:02.359 is most interesting right now? 0:20:04.080 --> 0:20:08.200 I'd say supply for two reasons all or we've had 0:20:08.200 --> 0:20:12.960 supply surprise to the upside last year, particularly US supplies, 0:20:13.840 --> 0:20:17.800 and that's what caused the correction in prices. Now what 0:20:17.840 --> 0:20:20.560 we're seeing is actually the market having tightened up more 0:20:20.600 --> 0:20:24.800 than people had expected. We've had inventory draws, unexpected inventory 0:20:24.880 --> 0:20:28.680 draws in January, probably looking like small draws in fab 0:20:28.720 --> 0:20:29.120 as well. 0:20:29.840 --> 0:20:31.760 Not that the Red Sea has caused supply. 0:20:31.560 --> 0:20:34.639 Outages, but it is creating a lot of stresses and 0:20:34.680 --> 0:20:36.720 strains on the supply chain. 0:20:36.960 --> 0:20:39.920 From where you said, I understand it's a global basis, 0:20:40.520 --> 0:20:43.400 But as a leader of petrol or a gallon of gas, 0:20:43.600 --> 0:20:44.120 is it going to. 0:20:44.040 --> 0:20:46.399 Be elevated over twenty twenty. 0:20:46.160 --> 0:20:49.119 Four, Yes, it will be much more than crude will be. 0:20:49.160 --> 0:20:52.200 It will very much be petrol prices and gas prices 0:20:52.960 --> 0:20:55.959 because of what we're seeing when the red sea shipping 0:20:55.960 --> 0:20:59.000 costs are very, very elevated, and what happens is therefore 0:20:59.200 --> 0:21:02.399 delivery of all these products that we consume is just 0:21:02.400 --> 0:21:05.080 going to get more expensive, and therefore we're going to 0:21:05.119 --> 0:21:06.200