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Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast.

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Speaker 1: My name is Mike Reagan. I'm a senior editor at

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Speaker 1: Bloomberg and I'm Aldana Higher across Asset reporter with Bloomberg.

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Speaker 1: And this week on the show, Well, as we record

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Speaker 1: this episode, the SMP five hundred is down from its

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Speaker 1: last record, since you closer to that threshold that marks

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Speaker 1: what most people considered to be a bear market. But

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Speaker 1: what's interesting is that what we're once considered the most

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Speaker 1: innovative companies and really the most profitable stocks to own,

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Speaker 1: are faring much worse. The NASDAC one hundred, for example,

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Speaker 1: is down almost So what exactly is it about our

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Speaker 1: current environment with red hot inflation and a sprint higher

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Speaker 1: in interest rate that is kryptonite for innovative niece and

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Speaker 1: what will take to make those types of stocks market leaders? Again,

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Speaker 1: we're going to get into it with the chief investment

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Speaker 1: officer for public equities at a major Wall Street acid

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Speaker 1: management firm. But first, Beltano, I have to say, I

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Speaker 1: hope you did not go around last week telling everyone

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Speaker 1: your high school nickname. Did you know? I haven't? Okay? Good?

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Speaker 1: Because as you know, that is a hot commodity and

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Speaker 1: podcast land. I think we've already gotten a few more

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Speaker 1: reviews on Apple podcast by holding out the promise of

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Speaker 1: your high school nickname. So I think if we get

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Speaker 1: to three and fifty ratings, we'll reveal it. Does that

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Speaker 1: sound good? So you're holding out one, You're you're letting

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Speaker 1: this drag out a little bit longer. Absolutely, yeah, Okay,

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Speaker 1: Well just let the record show and let the listeners

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Speaker 1: show that this was your idea to hold them hostage.

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Speaker 1: They know that, not mine. Yes, no, that I think

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Speaker 1: it's well known that any crazy scheme, any gimmick on

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Speaker 1: this show is usually my terrible idea, but it works,

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Speaker 1: and I will say it works. And uh so, go

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Speaker 1: on your Apple podcast app and give us a rating.

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Speaker 1: I'm not saying it has to be five stars, but

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Speaker 1: you know, hey, that's the highest rating. And give micro

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Speaker 1: rating and write us a review, right, maybe even suggest

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Speaker 1: new nicknames for us. Whatever it takes, well, we'll take it.

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Speaker 1: But that's the way that we sort of spread the

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Speaker 1: word about the podcast. Uh and and give listeners who

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Speaker 1: are just finding it on Apple a little hint at

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Speaker 1: what kind of show it is and how well received.

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Speaker 1: We're not well received it is. I don't know. I

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Speaker 1: don't know. We'll find out. Well, we'll see how well

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Speaker 1: this idea of yours to hold listeners hostage work. In

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Speaker 1: the meantime, I'm hoping we can hear from our guest

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Speaker 1: this week, Katie Koch. She's the chief investment Officer of

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Speaker 1: public equity at Goldman Sachs Asset Management, is joining us

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Speaker 1: this week. Katie, thank you so much for coming back

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Speaker 1: on the show. Oh, it's my pleasure to be here.

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Speaker 1: Thanks for having us. She came back and we didn't

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Speaker 1: even make her reveal any nicknames. Who's did you? Just

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Speaker 1: to start, we have this stat your team had sent

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Speaker 1: us over. They said that you manage something like twenty

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Speaker 1: billion dollars of tech slash innovation assets and yet at

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Speaker 1: the same time, we know that growth has been underforming

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Speaker 1: year today. So I was hoping you could talk to

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Speaker 1: us about this and tell us how you're thinking about it. Sure. Absolutely, um,

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Speaker 1: I will say. When I knew I needed to do

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Speaker 1: this podcast today, I wanted to start with some advice

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Speaker 1: to you guys. I think the podcast is called what

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Speaker 1: Goes Up, and it's it's a short less you might

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Speaker 1: want to you might want to rename it for for

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Speaker 1: the dear term, but at a very serious note, um

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Speaker 1: it Uh. We are big believers on investing client capital

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Speaker 1: into the innovation space. I did just want to impress

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Speaker 1: upon something that we've been saying for the last several years,

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Speaker 1: which is that we think when people step into these

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Speaker 1: innovation themes and we can unpack them in more detail,

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Speaker 1: they really needed to really need to be committed for

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Speaker 1: the long term. I don't I don't think any of

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Speaker 1: these things are tactical traits generally. I think it's really

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Speaker 1: tough the time to markets, but I think it's particularly

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Speaker 1: true and a lot of these high innovation areas. So

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Speaker 1: I do want to say that at the outset that

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Speaker 1: we think it's strategic, not tactical. Um. The second thing

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Speaker 1: that I would say is that I do think that

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Speaker 1: the dislocation has been very severe, particularly in public markets. UM.

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Speaker 1: Just you had asked earlier why that is. I mean,

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Speaker 1: the very basic explanation for that is that growth assets,

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Speaker 1: the cash flows or the furthest out, so they're kind

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Speaker 1: of the longest duration assets, if you will, and they're

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Speaker 1: the most hurt when it looks like rates are going

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Speaker 1: to rise, which is obviously the environment we're in UM

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Speaker 1: and so that was that's a big leg down of

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Speaker 1: most of the pain that's been experienced in in tech

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Speaker 1: UM and they're everything is correlated effectively to one UM

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Speaker 1: and so that's been a painful absolute return experience. But

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Speaker 1: we think people who are already in these assets should

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Speaker 1: have patients around it because eventually growth it will will

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Speaker 1: be in a world where growth is scarce UM and

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Speaker 1: and these assets should rerate on the back of that.

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Speaker 1: And if you don't think you have enough exposure to

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Speaker 1: this part of the market, I think the recent correction

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Speaker 1: actually provides some really compelling entry points to get exposure

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Speaker 1: to technology as a as a secular theme. So that's

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Speaker 1: kind of how I would think about it. Tech is

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Speaker 1: down at the moment, but it's not out. Don't give

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Speaker 1: up on it. And I'm very happy to go into

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Speaker 1: more detail in terms of why we think it's going

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Speaker 1: to work from here and what we like. That would

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Speaker 1: be great, Katie. I'd love to unpack that some more.

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Speaker 1: But I will say one thing that is going up

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Speaker 1: is interest rates, so we can talk about and that's

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Speaker 1: true and inflation of course too. There are some things

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Speaker 1: going up, just just not a lot in the innovation

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Speaker 1: space today, but there in lies the opportunity. I guess

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Speaker 1: I think I think blood pressure among portfolio management. But

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Speaker 1: I wanted to sort of get your ache on what

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Speaker 1: is so toxic about inflation and rising interest rates, specifically

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Speaker 1: for those long duration tech companies that that you mentioned.

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Speaker 1: I mean, we'll often here, sort of from the macro level,

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Speaker 1: a couple of reasons why rising rates are so bad. Obviously,

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Speaker 1: you know, if a company is heavy, heavily levered up

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Speaker 1: and has you know, to take on new debt, you know,

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Speaker 1: rolling over debt into higher interest rates, that that's an

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Speaker 1: obvious one. Also, you know, just the risk free rate

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Speaker 1: of the market and treasuries going higher sort of as

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Speaker 1: you point out, you know, is is really kind of

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Speaker 1: dangerous for those long duration assets. But yeah, I look

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Speaker 1: at the SMP five hundred at least as a whole,

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Speaker 1: and it seems like, you know, the leverage, the balance

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Speaker 1: sheets are are healthy, healthier than past years based on

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Speaker 1: most metrics. Now, your your debt to prize value or

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Speaker 1: your your debt to earnings ratios at any sort of

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Speaker 1: debt to fill in the blank ratio seems to be

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Speaker 1: fairly healthy. So is this all about that risk free rate.

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Speaker 1: You know, we can finally get three percent in treasuries,

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Speaker 1: and the assumption being that you know inflations, one day,

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Speaker 1: knock on what, we'll go back to two percent and

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Speaker 1: we'll get a positive reralio. Is that the main catalyst?

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Speaker 1: Do you think? I think that certainly plays a part

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Speaker 1: in what's happening here. Again, as rates go up, these

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Speaker 1: cash flows are further out. It puts pressure downward pressure

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Speaker 1: on these stocks. But it's not that in isolation. UM.

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Speaker 1: I'd say a second issue is just where evaluations were.

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Speaker 1: So valuations for broad equity markets UM were in their

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Speaker 1: high ninety percentile most expensive relative to history. You you

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Speaker 1: mentioned that the outset that equity markets have correct its

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Speaker 1: seventeen percent from the highs. Roughly it moves around a

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Speaker 1: little bit, but that's about true. And valuations are still

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Speaker 1: in their ninety most expensive percentile. So there's only two

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Speaker 1: things that can really drive equity markets, which is multiples

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Speaker 1: and learnings. And the multiples were already quite I demanding

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Speaker 1: mostly good news, and actually what we've gotten this mostly

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Speaker 1: bad news. So I think the valuations are certainly part

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Speaker 1: of it. So you have this this long duration issue

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Speaker 1: of cash flows working against you. You have the multiple

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Speaker 1: was too high, arguably broadly and intech specifically. And then

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Speaker 1: I think, you know, related to a lot of this

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Speaker 1: is the inflationary pressures and this dawning realization that the

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Speaker 1: central bank put is gone. Um. In other words, the

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Speaker 1: market kind of got used to the reality that when

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Speaker 1: things were difficult, the central bank would come in and

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Speaker 1: cut rates. But if they're actually forming another performing another

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Speaker 1: important test, which is trying to control and inflation, they're

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Speaker 1: less likely to do that in the absence of a

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Speaker 1: major recession. And so it's a combination of all of

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Speaker 1: those issues that are really weighing down on this part

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Speaker 1: of the market. But if you want to step in here,

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Speaker 1: because I think actually, ultimately this is a deeply secular opportunity. UM.

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Speaker 1: I had mentioned this to you guys, but the CEO

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Speaker 1: of Microsoft u uh Statta Dallas that on his call

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Speaker 1: he was being pushed on this very issue, the macro

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Speaker 1: environment stuff. How are you going to operate through this?

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Speaker 1: And he kind of gave an answer that was I

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Speaker 1: don't focus so much on that day to day because

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Speaker 1: over the next decade, tech is a percentage of GDP.

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Speaker 1: GDP spend rather is going to double. So there's an

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Speaker 1: incredible opportunity. And we know that company managements all over

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Speaker 1: the world are kind of continue to invest in innovation

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Speaker 1: just to survive and also to take market share, and

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Speaker 1: so this these things will work and they're gonna work really,

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Speaker 1: really well. Um, it's just at the moment we have

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Speaker 1: that has been dislocated. And as I said earlier, I

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Speaker 1: would think about that as an opportunity if you have,

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Speaker 1: if you have patient capital to come in and step

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Speaker 1: in here, um and and buy some of these assets.

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Speaker 1: I just think you have to be balanced. It's not

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Speaker 1: I have very little conviction on that on a twenty

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Speaker 1: four hour, one week, even a couple of months view.

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Speaker 1: I think it will work out over the long term,

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Speaker 1: but you have to be patient and you have to

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Speaker 1: be balanced about it. We are not, in my view,

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Speaker 1: going to have v shaped recovery like people might be

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Speaker 1: a recent data point in people's mind given the pandemic,

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Speaker 1: but that's not what we're set up for here. We're

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Speaker 1: kind of set up for the hard work of hopefully

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Speaker 1: stabilizing the multiple and these companies delivering earnings, and so

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Speaker 1: in my view, there will be strong recoveries and return

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Speaker 1: opportunities from here. UM, but it's going to take longer

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Speaker 1: for for that to be realized. Can you, Katie, maybe

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Speaker 1: narrow down that list for us? So what specifically are

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Speaker 1: you looking at, what are you finding attractive and maybe

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Speaker 1: what are you guys buying right now? So areas themes

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Speaker 1: that we've focused on, just because we're talking about innovation now.

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Speaker 1: I mean the way we do will do this is

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Speaker 1: we think about how is the world's going to change

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Speaker 1: over the next decade, what are the big themes and

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Speaker 1: then obviously trying to pick the right companies within those themes.

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Speaker 1: So the themes that we're focused on here is the

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Speaker 1: energy transition. UM. We also so this is you know

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Speaker 1: climate for example. UM. We also are interested in the

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Speaker 1: future of tex so the technology companies be on the

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Speaker 1: banks down the market cap around the world. UM. We

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Speaker 1: like the future disruptive future of of healthcare UM and

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Speaker 1: how that's going to change the world. Uh, the consumer,

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Speaker 1: particularly the millennial and Gen Z consumer. And then we're

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Speaker 1: invested in the real estate and infrastructure that will underpin

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Speaker 1: all of that. So those are some of the major themes. UM.

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Speaker 1: I wanted to come back to this point on on balance,

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Speaker 1: and then we can dig into any of those in

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Speaker 1: more detail. But I do think it is prudent. We

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Speaker 1: always believe this to be prudent. This is the reason

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Speaker 1: some of our thermatic strategies have have done better than

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Speaker 1: the peer group. It's always prudent to have some balance

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Speaker 1: in these strategies. So, yes, we like these themes, but

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Speaker 1: we don't have to just be in companies that are

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Speaker 1: growth at any price. We can own more expensive innovative companies,

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Speaker 1: for example, software a snowflake which still trades at twenty

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Speaker 1: times on e V two sales. These are bills despite

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Speaker 1: the correction rich multiples, but they're high growth companies. We

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Speaker 1: can own that in the future of tech alongside, for example,

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Speaker 1: something in the semi space which trades that much more

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Speaker 1: reasonable valuations discount to where it's been relative to the

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Speaker 1: last ten years in certain instances, and get that balance

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Speaker 1: in the portfolio between the high growth names um and

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Speaker 1: and some of those more value or cyclical oriented names.

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Speaker 1: And we do that really across every theme. In healthcare,

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Speaker 1: we own some of the medical device companies which are

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Speaker 1: more valuation grounded, and then we own stuff in the

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Speaker 1: genomic space, which is obviously very high growth oriented. So

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Speaker 1: we focus on the themes picked the companies and try

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Speaker 1: and have a balance within those themes of those high

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Speaker 1: growth companies along with some of the more cyclically exposed

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Speaker 1: value oriented names as well. You Know what I find

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Speaker 1: interesting when we talk about innovation, uh and what stocks

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Speaker 1: will benefit from that is we've almost had sort of

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Speaker 1: the opposite problem with those you know, you mentioned the

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Speaker 1: big fang companies you know. To me, you know, and

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Speaker 1: these companies just got so huge, you know, Apple at

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Speaker 1: what two and two and a half trillion whatever it

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Speaker 1: is at the moment. To me, Apple is kind of

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Speaker 1: uh struggling with innovation these days. You know, you've got

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Speaker 1: you've got the iPhone, you wait for that sort of

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Speaker 1: iPhone replacement cycle. You've got the mac uh, You've got

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Speaker 1: the services revenue is strong, um, but the promise of

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Speaker 1: sort of more innovation from from saying Apple, you know,

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Speaker 1: there was talk of them getting in the TVs or

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Speaker 1: automo electric vehicles. Um. And not just to pick on Apple,

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Speaker 1: but I feel like Amazon might be struggling with the

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Speaker 1: same thing. You know. Here, Amazon started by disrupting the

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Speaker 1: book industry, went on to disrupt every sort of retail

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Speaker 1: industry there is then I found a lot of growth

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Speaker 1: in the cloud business, but I feel like for you know,

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Speaker 1: a lot of these big companies, Facebook included, um, they've

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Speaker 1: sort of reached saturation. So you know, the question is,

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Speaker 1: when you're looking for innovation, does it really necessarily require

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Speaker 1: going down the ladder as far as market size and

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Speaker 1: finding you know, undiscovered sort of small cap stocks were

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Speaker 1: you know, is there a case to be made of

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Speaker 1: any of these companies sort of being leaders in innovation? Again,

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Speaker 1: I guess the one, you know, the one alluring thing

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Speaker 1: everyone likes to talk about is the metaverse, you know, withcebook.

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Speaker 1: I'm not sure anyone's buying that though you know the

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Speaker 1: the growth potential there, But how do you think about that?

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Speaker 1: I know this is a very long winned winted question,

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Speaker 1: which is my specialty, but how do you how do

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Speaker 1: you think about that notion of you know, the size

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Speaker 1: factor of a stock as it relates to their potential

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Speaker 1: to innovate and disrupt? Well, I mean, it's a it's

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Speaker 1: a hugely It may have been a long question, but

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Speaker 1: it's an important one too because these companies dominate a

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Speaker 1: lot of a lot of the market, right so we

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Speaker 1: have one percent of the number of companies taking up

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Speaker 1: still despite all of the movement out there, more than

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Speaker 1: the market cap, I will say, in a sign of

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Speaker 1: the times, UM, Apple is actually no longer the world's

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Speaker 1: most viable company. That changed if we exactly UM. But

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Speaker 1: big picture here's I want to make a couple of

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Speaker 1: big picture comments briefly about those top dominant companies and

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Speaker 1: kind of where we see them going from here, and

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Speaker 1: then I'm going to end with an argument that like, yeah,

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Speaker 1: I do think you need to own stuff well beyond

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Speaker 1: them and around the world, but in those in those

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Speaker 1: companies themselves, they you made up. You made the comment

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Speaker 1: around UM saturation. I mean, it's one way of looking

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Speaker 1: at They're also facing some regulatory challenges to UM. But

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Speaker 1: just looking at the long arc of history, if we

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Speaker 1: look at the ten largest companies twenty years ago UM

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Speaker 1: and then compare them to the ten today, there's actually

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Speaker 1: only two companies that are still on that list, Microsoft

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Speaker 1: one of them. UM. The other eight went on to

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Speaker 1: destroy close to four hundred billion dollars of market cap

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Speaker 1: during a great bull market for equities. So I kind

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Speaker 1: of look at it and think a lot about and

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Speaker 1: our team does the creative destruction. How difficult it is

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Speaker 1: for those companies to stay persistently amongst the largest companies

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Speaker 1: in the world for some of the reasons that you

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Speaker 1: just outlined in terms of the challenges that they are facing.

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Speaker 1: So that is a reason we think people need to

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Speaker 1: diversify away from those companies to find the future winners

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Speaker 1: that will be able, that that are going to show

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Speaker 1: up on that list, because obviously that's one of the

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Speaker 1: great ways to create wealth. I would just balance those comments. Um,

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Speaker 1: we do own some of those large incumbents, not all

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Speaker 1: of them, but we take positions in some of them

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Speaker 1: because you can't forget, particularly an environment like this, how

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Speaker 1: incredibly strong the balance sheets of these companies are. And

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Speaker 1: when you're sitting in thirty fifty hundred in some cases

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Speaker 1: more billion dollars of cash on the balance sheet, that

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Speaker 1: gives you clearly the ability to navigate an uncertain environment,

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Speaker 1: but also the ability to buy or invest in the

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Speaker 1: next big thing you talked about metaverse wolves. Facebook can

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Speaker 1: do that because they're highly free cash flow generative, and

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Speaker 1: they have thirty billion dollars of cash on the balance sheet,

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Speaker 1: and they were able to get into the next property

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Speaker 1: which was UM you know, for example, Instagram, because they

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Speaker 1: were able to buy that. So I just think you've

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Speaker 1: got to take into account that they have a lot

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Speaker 1: of firepower UM to navigate a difficult environment and also

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Speaker 1: to get on the right side of innovation and disruption.

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Speaker 1: The question is whether or not they have the management

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Speaker 1: team UM and the execution capability to continue to do that.

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Speaker 1: And it's true vent true over time that not all

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Speaker 1: of them do it. So you've got to be selective

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Speaker 1: about that. Pick your spots and those big companies, but

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Speaker 1: definitely diversify U into the future leaders UM. And then

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Speaker 1: in addition to that, looking around the world because UM,

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Speaker 1: because of the ubiquity of cloud and five G, a

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Speaker 1: lot of these companies are going to be actually found

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Speaker 1: outside of Silicon Valley and outside the US. It's the

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Speaker 1: markets not showing us that right now because some of

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Speaker 1: those companies are are facing a lot of pressure on

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Speaker 1: a day to day basis, but they are going to

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Speaker 1: be disruptive and they may be the future winners. And

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Speaker 1: that growth, by the way, is actually very much on sale.

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Speaker 1: The growth rates are higher clearly outside of the big incumbents.

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Speaker 1: And right now, if you took the highest quintile growth

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Speaker 1: and the lowest quintile growth. It has the tightest valuation

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Speaker 1: compression that we've had in a very very long time.

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Speaker 1: In other words, you don't right now have to pay

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Speaker 1: a big premium to get into the growthier parts of tech.

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Speaker 1: And I'll end by saying there's lots of stuff we

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Speaker 1: like and are excited about outside of the things, including stemmies,

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Speaker 1: which we talked about briefly, software, and then also cyber

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Speaker 1: which we haven't mentioned, but we think is an incredible

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Speaker 1: space with actually a big tail one because of the

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Speaker 1: current geopolitical tension. Katie, I remember when COVID first broke

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Speaker 1: out a couple of years ago, you and I ended

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Speaker 1: up talking and you told me all about the names

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Speaker 1: that you were looking at. You know, you mentioned, you know,

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Speaker 1: the future of things, and you were talking about this

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Speaker 1: post COVID world, and back then you said you had

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Speaker 1: been looking at companies that were heavily discounted, and you

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Speaker 1: were looking also at back to workplace leading childcare names

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Speaker 1: focused on services, spending and stuff that's fun. I think

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Speaker 1: you had said, so what do you what do you

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Speaker 1: make of of those types of companies at this point? Yeah,

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Speaker 1: So people like to have fun. That's a pretty pretty

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Speaker 1: persistent theme through different economic cycles, and that we like

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Speaker 1: things in the real economy. Um, And having fun is

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Speaker 1: related to the consumer the right now. Data on the

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Speaker 1: consumer is very strong. We ingest credit card data all

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Speaker 1: day every day like many of our peers. In addition

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Speaker 1: to running a fundamental business, if we're talking about a

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Speaker 1: lot here, I have the privilege of also running a

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Speaker 1: quant business where we ingest a lot of that data

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Speaker 1: and I can tell you across all metrics, the consumer,

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Speaker 1: particularly the US consumer, looks very strong. Um. We are

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Speaker 1: preparing portfolios for a world in which that consumer may

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Speaker 1: weaken because of some of the macro stresses that we've

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Speaker 1: already talked about here, inflation being at the top of

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Speaker 1: the top of that list. Um. And so what does

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Speaker 1: that mean as it relates to some of the ideas

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Speaker 1: that you just brought up, and also this concept of

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Speaker 1: having fun. If you're in the right part of having fun,

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Speaker 1: it can actually be recession resistant. So there's parts of

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Speaker 1: the consumer basket the come under pressure during a recession,

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Speaker 1: and and and travel for example, might be one of those.

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Speaker 1: But we like affordable experiences because we do think that

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Speaker 1: this millennial preference for experience over things is incredibly persistent UM,

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Speaker 1: and so we lean into those experiences, but more affordable

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Speaker 1: experiences in the event that the macro environment deteriorates. And so,

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Speaker 1: for example, we have exposure to concert companies both here

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Speaker 1: in the US as well as in Europe. UM. So

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Speaker 1: in the US we own Live Nation, for example, because

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Speaker 1: Beyonce is the ultimately recession resistant UM and and maybe

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Speaker 1: that's so many things, but that too. But then in

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Speaker 1: addition to that would be a category like beauty UM,

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Speaker 1: which can do well when times are good and also

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Speaker 1: shows a lot of resilience UM even if you get

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Speaker 1: into an economic correction. So we do own parts of

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Speaker 1: the real economy for sure. That comes back to having

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Speaker 1: balance in the portfolio. On the consumer rights say, we

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Speaker 1: do have exposure, but we're trying to make sure that

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Speaker 1: we are eyes wide open about some of the downward

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Speaker 1: pressure they may face down the road. Beyonce is recession resistant.

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Speaker 1: I think we found our headline there for the specific

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Speaker 1: on that is that like just to to give data,

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Speaker 1: So it sounds like a flipping comment, but this company

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Speaker 1: Live Nation, if you looked at ticket sales back and

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Speaker 1: oh eight UM they actually never went went negative. Uh

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Speaker 1: So the consumer will will spend in a recession, you

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Speaker 1: just have to be they'll be quite selective in terms

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Speaker 1: of what they spend on. And then the other thing

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Speaker 1: I would the other thing I would say, just from

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Speaker 1: being an importance of being global, is that another place

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Speaker 1: where you can find some interesting consumer names or or

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Speaker 1: even consumer names around the world with exposure to this

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Speaker 1: um would be China, which is obviously in a very

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Speaker 1: tough situation at the moment, which has been reflected into

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Speaker 1: equity prices, with effectively a third of the productive capacity.

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Speaker 1: How there's different ways of looking at it. But of

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Speaker 1: China being closed that is putting pressure on supply chains,

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Speaker 1: which is obviously coming through in the CPI print. But

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Speaker 1: it also the consumer has then quite weak clearly since

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Speaker 1: many of them are under zero COVID policy lockdowns. I

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Speaker 1: don't I'm not a macro person, and I don't think

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Speaker 1: we have a big edge on calling near term macro um.

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Speaker 1: I am highly convicted that China will once again reopen.

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Speaker 1: That's one thing I can say with great degree of certainty,

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Speaker 1: because it's not possible to run an economy that way

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Speaker 1: long term, and it would create instability, and we're hoping

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Speaker 1: to see more movement towards that as we reach the

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Speaker 1: twentieth Party Congress in the fall. And I think you

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Speaker 1: can buy assets here in the US as well as

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Speaker 1: assets in China that are overly discounted for something that

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Speaker 1: we know is eventually going to work out, which is

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Speaker 1: that the economy will reopen. So, for example, luxury Goods

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Speaker 1: sector and LVM Major or a Montclair are names that

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Speaker 1: we own that we think are being overly discounted UM

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Speaker 1: and that because we know that the Chinese consumer will

433
00:23:00,200 --> 00:23:02,320
Speaker 1: come back, we actually had the pattern recognition on that

434
00:23:02,480 --> 00:23:06,280
Speaker 1: established because we've seen the consumer globally come back and

435
00:23:06,320 --> 00:23:10,199
Speaker 1: buy in the luxury space UM after previous lockdowns. And

436
00:23:10,240 --> 00:23:15,199
Speaker 1: actually luxury is also somewhat counterintuitively has some protection and

437
00:23:15,240 --> 00:23:18,600
Speaker 1: recessions too, because that segment of the consumer um gets

438
00:23:18,960 --> 00:23:22,640
Speaker 1: gets gets let's hit. So all the sort of delisting

439
00:23:23,440 --> 00:23:27,320
Speaker 1: concerns and the sort of trade tensions, the lingering trade tis,

440
00:23:27,359 --> 00:23:29,440
Speaker 1: they don't they don't scare you away from China at all.

441
00:23:30,119 --> 00:23:33,680
Speaker 1: I think those are real concerns. There's there's the lockdown,

442
00:23:34,240 --> 00:23:38,679
Speaker 1: there's the potential for d listings, there's the regulation, the

443
00:23:38,720 --> 00:23:42,520
Speaker 1: tech regulation, and then there's the broader US sign no

444
00:23:42,640 --> 00:23:46,040
Speaker 1: tensions UM, but was kind of talked about the lockdown.

445
00:23:46,560 --> 00:23:49,600
Speaker 1: I'm hoping that we don't go to de listings, but

446
00:23:49,640 --> 00:23:51,480
Speaker 1: if we do, we have the ability to buy these

447
00:23:51,520 --> 00:23:54,080
Speaker 1: companies on the Hong Kong Exchange, as do most investors.

448
00:23:54,119 --> 00:23:55,960
Speaker 1: So I think there'll be a tough transition period, but

449
00:23:56,000 --> 00:23:59,840
Speaker 1: it will work itself out. UM. I think the tech regulation,

450
00:24:00,000 --> 00:24:01,639
Speaker 1: we we actually have a lot of clarity on what

451
00:24:01,720 --> 00:24:05,159
Speaker 1: that's gonna look like. And the U s Sino or

452
00:24:05,240 --> 00:24:07,800
Speaker 1: Western Sino tensions, they're going to be there for a while,

453
00:24:08,000 --> 00:24:10,400
Speaker 1: but the question is whether or not that that's imputed

454
00:24:10,440 --> 00:24:13,240
Speaker 1: in valuations. And at the moment this is in some

455
00:24:13,400 --> 00:24:15,960
Speaker 1: areas a fifty discount to the US, so there's a

456
00:24:15,960 --> 00:24:18,439
Speaker 1: lot of margin of safety there. And then I just

457
00:24:18,440 --> 00:24:23,240
Speaker 1: say one more thing UM about investing in in China, UM,

458
00:24:23,359 --> 00:24:26,359
Speaker 1: which is that the government is actually quite clear about

459
00:24:26,560 --> 00:24:30,399
Speaker 1: what their priorities are UM and the reality is that

460
00:24:30,440 --> 00:24:33,280
Speaker 1: once they announced those it gets discounted into markets immediately

461
00:24:33,280 --> 00:24:35,439
Speaker 1: because they have the ability, unlike in the US, to

462
00:24:35,480 --> 00:24:38,920
Speaker 1: actually implement those policies immediately. So if you pay attention

463
00:24:38,960 --> 00:24:40,639
Speaker 1: to what they're saying you can actually get on the

464
00:24:40,720 --> 00:24:42,719
Speaker 1: right side of this regulation. So I'll just end with

465
00:24:43,040 --> 00:24:45,600
Speaker 1: you know, another example of something in China, and we own.

466
00:24:45,800 --> 00:24:48,879
Speaker 1: We've told you why we like software already. Uh, we

467
00:24:48,920 --> 00:24:51,600
Speaker 1: do like it as a space very famous Robert Smith

468
00:24:51,680 --> 00:24:54,360
Speaker 1: quote software is better than first lean debt because they're

469
00:24:54,400 --> 00:24:56,560
Speaker 1: so essential to the running of companies. That's true in

470
00:24:56,560 --> 00:24:58,879
Speaker 1: the US, it's true in China. We own a company

471
00:24:58,880 --> 00:25:01,520
Speaker 1: called king D Software are an essential software for many

472
00:25:01,600 --> 00:25:05,040
Speaker 1: small medium enterprises in in China. We know the government

473
00:25:05,119 --> 00:25:08,479
Speaker 1: is going to support small medium enterprises, particularly coming out

474
00:25:08,520 --> 00:25:11,080
Speaker 1: of this lockdown. Uh. And we know that the government

475
00:25:11,160 --> 00:25:15,240
Speaker 1: is very supportive of digitalization again, particularly of small businesses.

476
00:25:15,520 --> 00:25:17,240
Speaker 1: So this is a tech company that's not going to

477
00:25:17,320 --> 00:25:19,480
Speaker 1: get most likely not going to get caught in the

478
00:25:19,520 --> 00:25:23,520
Speaker 1: crossfairs um of regulation, compounding at a very high rate

479
00:25:23,960 --> 00:25:27,159
Speaker 1: and looking extremely attractive to its own history and the

480
00:25:27,200 --> 00:25:31,600
Speaker 1: software sector broadly. So again challenges a lot of it

481
00:25:31,680 --> 00:25:36,119
Speaker 1: discounted in selectively, one can can find opportunities. Yeah. I

482
00:25:36,240 --> 00:25:39,200
Speaker 1: also have some interesting news this week where China basically

483
00:25:39,240 --> 00:25:43,080
Speaker 1: came out and said that all state enterprises need to

484
00:25:43,119 --> 00:25:47,520
Speaker 1: start buying domestic computers and software that that's certainly uh,

485
00:25:47,680 --> 00:25:51,080
Speaker 1: certainly gonnapen up some opportunities I would imagine, yeah, that

486
00:25:51,200 --> 00:25:53,159
Speaker 1: I would pick up on that and saying that's a

487
00:25:53,280 --> 00:25:57,840
Speaker 1: very important point. This is obviously a sign of deglobalization UM.

488
00:25:58,320 --> 00:26:01,400
Speaker 1: And we are believers that the tech ecosystem is going

489
00:26:01,400 --> 00:26:03,640
Speaker 1: to build out. We already have the Splinternet, but other

490
00:26:03,680 --> 00:26:06,600
Speaker 1: parts of the tech ecosystem, including the semi supply chain

491
00:26:06,640 --> 00:26:09,400
Speaker 1: and hardware, are going to build out separately and shine

492
00:26:09,480 --> 00:26:11,680
Speaker 1: than they are in the US. And so the US

493
00:26:11,800 --> 00:26:15,000
Speaker 1: is also going to invest more in supply chain security

494
00:26:15,040 --> 00:26:18,520
Speaker 1: of chips. It's a it's a national security issue. We

495
00:26:18,680 --> 00:26:22,280
Speaker 1: at the moment cannot manufacture at the leading edge UM

496
00:26:22,400 --> 00:26:25,439
Speaker 1: for chips in the US. That is that's unacceptable really

497
00:26:25,520 --> 00:26:28,600
Speaker 1: from a from a national security perspective. And so this

498
00:26:28,640 --> 00:26:31,080
Speaker 1: country is going to invest a lot in in building

499
00:26:31,080 --> 00:26:34,600
Speaker 1: out that supply chain. That's by the way, ultimately inflationary UM,

500
00:26:34,600 --> 00:26:36,880
Speaker 1: but it does create some opportunities. And so one thing

501
00:26:36,880 --> 00:26:39,920
Speaker 1: that we are invested in across many of our portfolios

502
00:26:40,080 --> 00:26:42,720
Speaker 1: is that local is a rebuilding now to the semi

503
00:26:42,760 --> 00:26:45,840
Speaker 1: supply chain, and we own for example, the semi equipment manufacturers.

504
00:26:45,840 --> 00:26:48,600
Speaker 1: It's a way to benefit from that um and I'd

505
00:26:48,640 --> 00:26:50,480
Speaker 1: end up by saying you can, you can be, you

506
00:26:50,520 --> 00:26:52,199
Speaker 1: can do two things. You can say, wow, this is

507
00:26:52,200 --> 00:26:55,159
Speaker 1: really scary China is building out this totally separate ecosystem.

508
00:26:55,320 --> 00:26:58,360
Speaker 1: Or you can say, well, it's the world's second largest economy.

509
00:26:58,400 --> 00:27:00,680
Speaker 1: It's a very big equity market, and I want to

510
00:27:00,720 --> 00:27:02,840
Speaker 1: own a piece of that for my clients too, because

511
00:27:02,840 --> 00:27:04,800
Speaker 1: there's going to be a lot of investment happening there.

512
00:27:05,560 --> 00:27:08,639
Speaker 1: We obviously choose to believe the ladder, but try and

513
00:27:08,680 --> 00:27:11,119
Speaker 1: be very selective about what to own and what prices

514
00:27:11,160 --> 00:27:14,640
Speaker 1: to buy it At Katie, just to bring things back

515
00:27:15,040 --> 00:27:17,959
Speaker 1: to the US, there was something that really struck me

516
00:27:18,080 --> 00:27:19,800
Speaker 1: in one of the notes you had sent us over

517
00:27:20,280 --> 00:27:23,159
Speaker 1: before the podcast, and I actually ended up writing wow

518
00:27:23,359 --> 00:27:26,640
Speaker 1: in my notes on your note, and it said, while

519
00:27:26,640 --> 00:27:28,919
Speaker 1: we have a very difficult set up, returns will be

520
00:27:29,000 --> 00:27:32,280
Speaker 1: lower the next ten years. And you said, I'm not

521
00:27:32,359 --> 00:27:34,720
Speaker 1: entering the nineteen seventies, but we need to be aggressive

522
00:27:34,760 --> 00:27:38,840
Speaker 1: in finding opportunities. So can you talk about that and

523
00:27:39,000 --> 00:27:42,040
Speaker 1: this idea that things will not be so great in

524
00:27:42,080 --> 00:27:45,639
Speaker 1: the next decade. Yeah, I guess that is kind of

525
00:27:45,680 --> 00:27:47,520
Speaker 1: a wow comment. What do you what do you say

526
00:27:47,520 --> 00:27:49,879
Speaker 1: it that way, but but it is. It is what

527
00:27:50,000 --> 00:27:52,400
Speaker 1: I believe to be true and something I really want

528
00:27:52,480 --> 00:27:56,320
Speaker 1: people to reflect on as they manage their own personal wealth.

529
00:27:56,880 --> 00:27:59,840
Speaker 1: When you look at we I kind of think about

530
00:28:00,160 --> 00:28:03,000
Speaker 1: through the lens of the sixty forty portfolio to sixty

531
00:28:03,119 --> 00:28:06,280
Speaker 1: stocks UM forty bonds. And I say that because that's

532
00:28:06,400 --> 00:28:09,280
Speaker 1: generally how most people around the world are are kind

533
00:28:09,320 --> 00:28:13,760
Speaker 1: of allocated. And that's been a phenomenal asset to own

534
00:28:14,040 --> 00:28:18,560
Speaker 1: through the last cycle that has returned eight percent real return.

535
00:28:18,640 --> 00:28:22,080
Speaker 1: So after inflation returns, you compound that eight percent annually.

536
00:28:22,080 --> 00:28:25,080
Speaker 1: I mean, you guys know, that's incredibly powerful and and

537
00:28:25,080 --> 00:28:27,719
Speaker 1: and great news, particularly for people on a fixed income.

538
00:28:28,400 --> 00:28:31,920
Speaker 1: That return was more like five percent over the last

539
00:28:32,160 --> 00:28:36,680
Speaker 1: hundred years and about negative nine percent year to date UM.

540
00:28:36,880 --> 00:28:40,200
Speaker 1: And so my point is that a lot of returns

541
00:28:40,320 --> 00:28:44,440
Speaker 1: were pulled forward into the previous ten years, which suggests

542
00:28:44,440 --> 00:28:47,280
Speaker 1: the next ten years returns are going to be harder

543
00:28:47,320 --> 00:28:50,040
Speaker 1: to come by. And I think people need to be

544
00:28:50,080 --> 00:28:53,200
Speaker 1: prepared for that environment as they plan for their retirement,

545
00:28:53,240 --> 00:28:55,760
Speaker 1: as they think about what they're going to spend UM

546
00:28:55,880 --> 00:28:57,600
Speaker 1: and I think they need to prepare for it by

547
00:28:57,640 --> 00:29:00,760
Speaker 1: being more active in their portfolio and seeking out those

548
00:29:00,760 --> 00:29:04,080
Speaker 1: returns UM. And that leads us back to you know,

549
00:29:04,120 --> 00:29:06,840
Speaker 1: so what do you do you should be In our view,

550
00:29:07,000 --> 00:29:09,800
Speaker 1: if we are going to have inflation, we would recommend

551
00:29:09,880 --> 00:29:13,320
Speaker 1: people be overweight equities relative to fixed income and then

552
00:29:13,400 --> 00:29:16,560
Speaker 1: the equities bucket. Um. Again, I want to acknowledge my

553
00:29:16,640 --> 00:29:19,520
Speaker 1: biases here as an active manager, but clearly these like

554
00:29:19,640 --> 00:29:24,120
Speaker 1: tremendous dislocation and market creates really interesting entry points and

555
00:29:24,200 --> 00:29:27,040
Speaker 1: opportunities for active managers to hopefully do a lot better

556
00:29:27,520 --> 00:29:31,479
Speaker 1: than that passive portfolio UM. And I don't think that

557
00:29:31,520 --> 00:29:35,120
Speaker 1: we're set up for the lost decade of the nineteen seventies.

558
00:29:35,160 --> 00:29:37,880
Speaker 1: There's a lot of reasons it is actually different this time,

559
00:29:37,920 --> 00:29:40,640
Speaker 1: including I won't go through the whole list, but for example,

560
00:29:40,680 --> 00:29:44,760
Speaker 1: employments and in a much stronger place U where inflations

561
00:29:44,760 --> 00:29:47,280
Speaker 1: nowhere near um as high as it was then, and

562
00:29:47,320 --> 00:29:49,920
Speaker 1: we have more of the tools to tackle it, more

563
00:29:49,960 --> 00:29:54,320
Speaker 1: central and more independent central banks globally, etcetera. But it

564
00:29:54,400 --> 00:29:55,880
Speaker 1: is going to be a return It is going to

565
00:29:55,960 --> 00:29:59,240
Speaker 1: be rather a decade of lower returns, and you're not

566
00:29:59,240 --> 00:30:01,480
Speaker 1: just gonna be able to sit and own passive assets

567
00:30:01,480 --> 00:30:03,080
Speaker 1: and hope it all works out, you're going to have

568
00:30:03,120 --> 00:30:05,880
Speaker 1: to take more control of of of your destiny, and

569
00:30:06,200 --> 00:30:08,040
Speaker 1: we're working with a lot of people to do that,

570
00:30:08,080 --> 00:30:12,080
Speaker 1: particularly in their equity portfolios. Okaty. I know at Goldman

571
00:30:12,120 --> 00:30:15,280
Speaker 1: Sachs Asset Management, you spend a lot of time sort

572
00:30:15,320 --> 00:30:17,400
Speaker 1: of listening to what c c e O s and

573
00:30:17,480 --> 00:30:22,360
Speaker 1: CFOs have to say. Uh, you know what their plans are. Um.

574
00:30:22,840 --> 00:30:26,200
Speaker 1: You know, unlike myself, they probably return your calls when

575
00:30:26,240 --> 00:30:30,320
Speaker 1: when you when you call them. Quite a quite a

576
00:30:30,360 --> 00:30:34,040
Speaker 1: luxury you have there. But I'm curious, is there sort

577
00:30:34,040 --> 00:30:40,440
Speaker 1: of UM quantify CEO CFO sentiment right now? Are they scared?

578
00:30:40,760 --> 00:30:43,520
Speaker 1: Are they looking for opportunities? What's kind of the vibe

579
00:30:43,520 --> 00:30:45,600
Speaker 1: out there from the C suite? As far as you

580
00:30:45,640 --> 00:30:51,440
Speaker 1: can sell UM, I would say it's cautious. So they

581
00:30:51,440 --> 00:30:55,120
Speaker 1: do return our calls. That's one of the benefits of

582
00:30:53,960 --> 00:30:57,640
Speaker 1: of of being at Goldman SAX and having to pay

583
00:31:00,280 --> 00:31:02,160
Speaker 1: I think my phone might be broken. I'm not sure

584
00:31:03,040 --> 00:31:06,360
Speaker 1: because so I appreciate you asking that. And we are

585
00:31:06,520 --> 00:31:09,880
Speaker 1: really delighted that we get great access to management teams

586
00:31:09,880 --> 00:31:11,840
Speaker 1: on behalf of our clients, and I think we do

587
00:31:11,920 --> 00:31:14,479
Speaker 1: get good data points and I go back to what

588
00:31:14,520 --> 00:31:17,680
Speaker 1: I was just saying that I think they're cautious. And

589
00:31:17,760 --> 00:31:20,600
Speaker 1: you see that because again the market as we started

590
00:31:20,600 --> 00:31:23,040
Speaker 1: down seventeen percent since the highest, did we have a

591
00:31:23,080 --> 00:31:27,520
Speaker 1: bad earning season? No, it was actually very good earnings.

592
00:31:27,840 --> 00:31:30,680
Speaker 1: So again the right now data is suggesting the fundamentals

593
00:31:30,680 --> 00:31:33,480
Speaker 1: are quite strong and healthy. But you asked a very

594
00:31:33,520 --> 00:31:36,720
Speaker 1: important question, which is what is sentiment look like? And

595
00:31:36,720 --> 00:31:41,080
Speaker 1: and sentiment is is is more challenge than that, And

596
00:31:41,120 --> 00:31:44,800
Speaker 1: that's also reflected in guidance being lower because these cycle

597
00:31:44,840 --> 00:31:47,200
Speaker 1: tested management teams, which are obviously the ones who try

598
00:31:47,240 --> 00:31:49,840
Speaker 1: and commit capital to you know, they've seen this movie

599
00:31:49,880 --> 00:31:52,280
Speaker 1: before and they know that we're entering a more difficult

600
00:31:52,320 --> 00:31:55,400
Speaker 1: operating environment. And I think the best if people want

601
00:31:55,440 --> 00:31:58,960
Speaker 1: to really get insight into what a great management team

602
00:31:59,040 --> 00:32:01,080
Speaker 1: is kind of thinking and saying, and how they're trying

603
00:32:01,120 --> 00:32:04,640
Speaker 1: to prepare themselves um for this operating environment, they should

604
00:32:04,680 --> 00:32:07,680
Speaker 1: read Dara, the CEO of um Uber's letter to his

605
00:32:07,880 --> 00:32:11,400
Speaker 1: employees about what this environment will look like, how they're

606
00:32:11,440 --> 00:32:13,360
Speaker 1: going to have to operate differently, that they can't just

607
00:32:13,400 --> 00:32:15,680
Speaker 1: go out and talk about how big the market opportunity

608
00:32:15,720 --> 00:32:18,320
Speaker 1: if there's not profitable excuse me if they're not profitable

609
00:32:18,520 --> 00:32:21,760
Speaker 1: because investors don't care, and you just like imputing some

610
00:32:21,840 --> 00:32:25,400
Speaker 1: of that realism into the way that you're running a business. Um,

611
00:32:25,440 --> 00:32:27,440
Speaker 1: that's what we see a lot of management teams doing.

612
00:32:27,520 --> 00:32:29,280
Speaker 1: And the ones who want to commit capital to that

613
00:32:29,320 --> 00:32:31,880
Speaker 1: have been through this before, that know how to work

614
00:32:31,920 --> 00:32:35,160
Speaker 1: through this grind, that have that have raised capital when

615
00:32:35,160 --> 00:32:37,920
Speaker 1: it was available, not when they needed to. Um, that

616
00:32:37,960 --> 00:32:39,760
Speaker 1: know how to motivate, people, that know how to leave,

617
00:32:39,840 --> 00:32:41,600
Speaker 1: people that know how to run the company in a

618
00:32:41,640 --> 00:32:45,240
Speaker 1: way that will be received well by investors, which will

619
00:32:45,440 --> 00:32:49,560
Speaker 1: obviously help stock prices. That that's that's that's what we're

620
00:32:49,560 --> 00:32:51,480
Speaker 1: hearing and what we want to see from from great

621
00:32:51,520 --> 00:32:55,400
Speaker 1: management teams. And I just want to end by saying, UM,

622
00:32:55,440 --> 00:33:00,000
Speaker 1: we never you know it's that when returns are absolute negative. UM,

623
00:33:00,080 --> 00:33:02,800
Speaker 1: for sure, we that is not what we're trying to

624
00:33:02,840 --> 00:33:05,000
Speaker 1: do here. We're trying to help our clients retire with

625
00:33:05,040 --> 00:33:07,760
Speaker 1: dignity and security. And as I said earlier, it moves

626
00:33:07,760 --> 00:33:10,680
Speaker 1: in cycles and feels very confident will come back. But

627
00:33:10,840 --> 00:33:14,400
Speaker 1: moments like this where stock prices are dislocated on top

628
00:33:14,440 --> 00:33:18,280
Speaker 1: of the operating environment being very challenging, this is very

629
00:33:18,400 --> 00:33:22,240
Speaker 1: very rich for differentiation. There are some companies that are

630
00:33:22,240 --> 00:33:25,640
Speaker 1: publicly listed that may not survive what's happening right now,

631
00:33:25,640 --> 00:33:29,040
Speaker 1: and obviously we want to avoid those uh and and

632
00:33:29,080 --> 00:33:32,440
Speaker 1: we will uh And then you want to find um

633
00:33:32,560 --> 00:33:35,560
Speaker 1: allocate to to the ones that will differentiate, you know,

634
00:33:35,600 --> 00:33:38,600
Speaker 1: try and store through the pretenders versus the contenders, if

635
00:33:38,600 --> 00:33:40,320
Speaker 1: you will. And that's what we're spending a lot of

636
00:33:40,320 --> 00:33:43,239
Speaker 1: time doing on behalf of our clients. I actually had

637
00:33:43,280 --> 00:33:45,800
Speaker 1: wanted to ask you what you make of this idea

638
00:33:45,880 --> 00:33:49,480
Speaker 1: that the market is sniffing out. These sort of worrisome

639
00:33:49,520 --> 00:33:52,960
Speaker 1: developments are worrisome signals in the micro data. So we

640
00:33:53,240 --> 00:33:55,440
Speaker 1: talked about you know, FED and inflation, some of the

641
00:33:55,480 --> 00:33:59,280
Speaker 1: bigger concerns. But I know I wrote about this interview

642
00:33:59,360 --> 00:34:03,000
Speaker 1: a non stick coding CEO had given Humblemark TV where

643
00:34:03,000 --> 00:34:05,120
Speaker 1: he was saying, the way his orders are coming in,

644
00:34:05,200 --> 00:34:07,920
Speaker 1: it just looks like recessionary behavior. So what do you

645
00:34:07,960 --> 00:34:11,480
Speaker 1: make of these sort of micro signals that are flashing

646
00:34:11,480 --> 00:34:15,719
Speaker 1: morning signs for micro signals very very important, and that

647
00:34:15,840 --> 00:34:17,920
Speaker 1: is what we spent a lot of time with management

648
00:34:17,960 --> 00:34:21,120
Speaker 1: teams doing. And I think they can be quite predictive

649
00:34:21,239 --> 00:34:24,800
Speaker 1: about where the economic cycles going, and there are ways

650
00:34:24,840 --> 00:34:28,120
Speaker 1: to consume that, uh now through big data, and we

651
00:34:28,200 --> 00:34:30,879
Speaker 1: do get access to a lot of that so near

652
00:34:31,000 --> 00:34:33,680
Speaker 1: term orders, etcetera. Um, but some of it you do

653
00:34:33,719 --> 00:34:37,080
Speaker 1: get just from speaking to management teams and you generally

654
00:34:37,080 --> 00:34:41,040
Speaker 1: will start to see, um, the pain show up there first.

655
00:34:41,200 --> 00:34:43,040
Speaker 1: I would just say it's a little bit conflated right

656
00:34:43,080 --> 00:34:45,160
Speaker 1: now because of all the supply chain issues we've had,

657
00:34:45,200 --> 00:34:47,800
Speaker 1: so you can't you have to be very careful about

658
00:34:47,840 --> 00:34:50,400
Speaker 1: looking at the data because it's quite lumpy. But I

659
00:34:50,719 --> 00:34:55,920
Speaker 1: do think the micro signals are important. Um, absolutely, Katie.

660
00:34:55,960 --> 00:34:58,200
Speaker 1: I know you also like private markets, and I want

661
00:34:58,200 --> 00:34:59,880
Speaker 1: to ask you what's attractive to you in the private

662
00:35:01,400 --> 00:35:04,720
Speaker 1: Sure we we are believers at Goldman's access that management

663
00:35:04,719 --> 00:35:07,280
Speaker 1: that clients should have if they are able to get

664
00:35:07,320 --> 00:35:10,879
Speaker 1: invested to both public as well as private markets. That

665
00:35:10,880 --> 00:35:15,040
Speaker 1: that that is absolutely true. UM. I would say at

666
00:35:15,080 --> 00:35:18,719
Speaker 1: the moment, great news for people that are interested in

667
00:35:18,800 --> 00:35:24,560
Speaker 1: public markets. The challenges have have been imputed into stock prices,

668
00:35:24,600 --> 00:35:31,759
Speaker 1: so market down, seventeen, tech down, MidCap software down. It

669
00:35:31,920 --> 00:35:34,799
Speaker 1: has a lot of the worries have been reflected in

670
00:35:34,840 --> 00:35:40,440
Speaker 1: stock prices. In contrast, a lot of these private assets

671
00:35:40,440 --> 00:35:42,920
Speaker 1: only took down a mark in the first quarter of

672
00:35:43,320 --> 00:35:46,800
Speaker 1: down ten percent, And if you look at what you

673
00:35:46,840 --> 00:35:49,400
Speaker 1: can buy in public markets right now, it's effectively a

674
00:35:49,440 --> 00:35:54,319
Speaker 1: fifty discount to what UH private companies were raising last year.

675
00:35:54,760 --> 00:35:57,920
Speaker 1: So I just make the point that the valuations are

676
00:35:58,040 --> 00:36:02,120
Speaker 1: arguably more attractive now and like versus private markets. Um.

677
00:36:02,239 --> 00:36:04,560
Speaker 1: The second point I would make is that I think

678
00:36:04,600 --> 00:36:07,920
Speaker 1: there's really interesting assets that are really only available in

679
00:36:07,960 --> 00:36:11,520
Speaker 1: public markets. Things that are capital and intensive, for example,

680
00:36:11,560 --> 00:36:13,680
Speaker 1: and that would include semis, which we've already talked about.

681
00:36:13,680 --> 00:36:15,719
Speaker 1: But if you want to own best in class semis,

682
00:36:15,760 --> 00:36:17,879
Speaker 1: you do need to look in public markets for those,

683
00:36:17,960 --> 00:36:21,040
Speaker 1: and that semis are, of course the based infrastructure for

684
00:36:21,080 --> 00:36:23,080
Speaker 1: all of the innovation we talked about today, are going

685
00:36:23,120 --> 00:36:25,600
Speaker 1: to grow up multiples of GDP and are mostly available

686
00:36:25,640 --> 00:36:28,759
Speaker 1: in public markets. I would say there's companies that are

687
00:36:28,840 --> 00:36:32,520
Speaker 1: highly regulated in the utility space that look interesting. Those

688
00:36:32,520 --> 00:36:34,759
Speaker 1: are interesting assets to own if we do have a

689
00:36:34,800 --> 00:36:37,360
Speaker 1: more inflationary environment, and they're also if you pick the

690
00:36:37,440 --> 00:36:40,560
Speaker 1: right ones. Then the leaders in climate transition, which we've

691
00:36:40,600 --> 00:36:43,320
Speaker 1: identified as a very important theme over the next decade,

692
00:36:43,440 --> 00:36:47,520
Speaker 1: mostly available in public markets. And then finally, UM, you know,

693
00:36:47,640 --> 00:36:51,040
Speaker 1: you can avoid binary outcomes in public markets by owning

694
00:36:51,640 --> 00:36:55,120
Speaker 1: um different parts of the supply chain and owning more

695
00:36:55,160 --> 00:36:59,200
Speaker 1: diversified baskets UH and putting those together on the supply

696
00:36:59,320 --> 00:37:01,799
Speaker 1: chain point, I just say, we really let we talked

697
00:37:01,800 --> 00:37:05,239
Speaker 1: about the future of healthcare being interesting, and then specifically

698
00:37:05,239 --> 00:37:09,080
Speaker 1: we love the development's happening in genomics and UM huge

699
00:37:09,480 --> 00:37:12,759
Speaker 1: amount of opportunity in the biologic space. We do own

700
00:37:12,800 --> 00:37:14,839
Speaker 1: those drug companies, I'm happy to come back to that.

701
00:37:15,040 --> 00:37:17,960
Speaker 1: But we also own a company called West Pharmaceuticals that

702
00:37:18,040 --> 00:37:21,440
Speaker 1: makes the rubber stoppers for biologic drugs UH in the

703
00:37:21,520 --> 00:37:24,320
Speaker 1: small and MidCap space. So there's just such a in

704
00:37:24,360 --> 00:37:26,600
Speaker 1: the public markets. You just get such a strong array

705
00:37:26,600 --> 00:37:29,799
Speaker 1: of companies all across the supply chain that enables you

706
00:37:29,920 --> 00:37:32,840
Speaker 1: to have more latitude in the way you can implement

707
00:37:33,120 --> 00:37:36,400
Speaker 1: UM implement some of these themes. So own both but

708
00:37:36,520 --> 00:37:39,040
Speaker 1: public markets on sale now and also a lot of

709
00:37:39,080 --> 00:37:41,440
Speaker 1: reasons to to make sure that you have capital invested.

710
00:37:41,480 --> 00:37:43,600
Speaker 1: There are things that exist in public markets that that

711
00:37:43,680 --> 00:37:47,799
Speaker 1: don't necessarily exist in private markets. The rubber stoppers for

712
00:37:47,840 --> 00:37:50,160
Speaker 1: test tube, so that's got to be recession proof too.

713
00:37:50,200 --> 00:37:52,960
Speaker 1: I like I like that one. UH, I'm gonna look

714
00:37:52,960 --> 00:37:56,480
Speaker 1: into them. Yeah, they have a seventy percent market share

715
00:37:56,960 --> 00:37:59,399
Speaker 1: globally in that space. And as you can imagine, there's

716
00:37:59,480 --> 00:38:03,360
Speaker 1: they have the barriers to entry because it's there's regulatory

717
00:38:03,400 --> 00:38:07,000
Speaker 1: issues because they interact with the drug. Um, they have

718
00:38:07,160 --> 00:38:09,560
Speaker 1: to be the packaging actually has to be f d

719
00:38:09,680 --> 00:38:13,640
Speaker 1: A approved, and yes it should be resistant somewhat in

720
00:38:14,000 --> 00:38:16,960
Speaker 1: a recession, I would agree with you. And also a

721
00:38:16,960 --> 00:38:23,719
Speaker 1: beneficiary of our continued booster right right, That's that's pretty fascinated.

722
00:38:23,760 --> 00:38:26,239
Speaker 1: I know, I think we're gonna be getting boosters every

723
00:38:26,280 --> 00:38:29,400
Speaker 1: six months. It seems like, Katie, it's been refreshing to

724
00:38:29,480 --> 00:38:31,439
Speaker 1: talk to you. I think we've gone almost a half

725
00:38:31,480 --> 00:38:34,040
Speaker 1: an hour here and no one has even said the

726
00:38:34,080 --> 00:38:39,480
Speaker 1: word crypto, which is is very refreshing. But you know,

727
00:38:39,800 --> 00:38:43,000
Speaker 1: obviously is the other big story going on is just

728
00:38:43,040 --> 00:38:46,600
Speaker 1: this you know, blood bath and crypto markets Bitcoin down,

729
00:38:47,800 --> 00:38:52,880
Speaker 1: and obviously crypto has become pretty influential to the stock market,

730
00:38:52,920 --> 00:38:56,640
Speaker 1: whether it be you know, Tesla and micro Strategy adding

731
00:38:56,640 --> 00:39:00,359
Speaker 1: it to their balance sheets and their treasuries. Were you know,

732
00:39:00,640 --> 00:39:04,080
Speaker 1: years ago, a company could add blockchain to its name

733
00:39:04,120 --> 00:39:08,040
Speaker 1: and see it's stockpop um. You know, the chip makers,

734
00:39:08,080 --> 00:39:10,759
Speaker 1: which I know you followed pretty closely. Uh, you know

735
00:39:11,160 --> 00:39:14,680
Speaker 1: certain chipmakers got a big boost from all the minding

736
00:39:14,719 --> 00:39:18,160
Speaker 1: going on. How are you thinking about or are you

737
00:39:18,200 --> 00:39:21,480
Speaker 1: thinking about it at all? Now? Given this you know,

738
00:39:22,120 --> 00:39:26,680
Speaker 1: big retransmant in crypto prices. Is it sort of the

739
00:39:26,719 --> 00:39:30,640
Speaker 1: type of sector you just avoid and let the dust

740
00:39:30,680 --> 00:39:33,080
Speaker 1: fall where may? Or is it you know, is there

741
00:39:33,120 --> 00:39:35,480
Speaker 1: opportunities there? How do you how are you sort of

742
00:39:35,719 --> 00:39:39,319
Speaker 1: thinking the way crypto complain into equity markets? Uh? If

743
00:39:39,360 --> 00:39:42,719
Speaker 1: at all? Well, as you guys know, there's actually not

744
00:39:42,880 --> 00:39:46,120
Speaker 1: a lot of pure play publicly listed ways to get

745
00:39:46,160 --> 00:39:49,680
Speaker 1: exposure to crypto, so it's actually not a space we

746
00:39:49,760 --> 00:39:53,160
Speaker 1: spent a lot of time on um, particularly with regards

747
00:39:53,200 --> 00:39:55,480
Speaker 1: to the coins themselves, because they're just they're not part

748
00:39:55,520 --> 00:40:00,040
Speaker 1: of our investable universe. UM. I will say, um, and

749
00:40:00,040 --> 00:40:01,960
Speaker 1: I know you've heard people say this before, so it's

750
00:40:01,960 --> 00:40:03,840
Speaker 1: not going to sound particularly brave, but I do believe

751
00:40:03,840 --> 00:40:07,120
Speaker 1: it to be quite true, UM that the blockchain technology

752
00:40:07,120 --> 00:40:11,160
Speaker 1: and opinion that is highly disruptive, and it's something that

753
00:40:11,200 --> 00:40:13,080
Speaker 1: we spend a lot of time thinking about, and we

754
00:40:13,120 --> 00:40:16,239
Speaker 1: expressed it through our positioning in the payment space. So

755
00:40:16,280 --> 00:40:19,960
Speaker 1: if you look at financials broadly as a category. UM.

756
00:40:20,160 --> 00:40:22,359
Speaker 1: The way we're positioned there is that we still like

757
00:40:22,560 --> 00:40:26,399
Speaker 1: the big banks UM. It turns out it's a good

758
00:40:26,400 --> 00:40:31,439
Speaker 1: business model to loan money UM and and hopefully uh

759
00:40:31,600 --> 00:40:34,960
Speaker 1: get the loans paid back UM and have high net

760
00:40:34,960 --> 00:40:37,520
Speaker 1: interest margins when rates are going up. These are actually

761
00:40:37,600 --> 00:40:40,080
Speaker 1: good assets to own, and again they offer some diversity

762
00:40:40,120 --> 00:40:42,960
Speaker 1: to portfolios and an environment where growth not performing. So

763
00:40:43,000 --> 00:40:45,919
Speaker 1: we continue to like the best in class banks UM.

764
00:40:46,120 --> 00:40:48,920
Speaker 1: And then on the other side and the more growth

765
00:40:48,920 --> 00:40:52,720
Speaker 1: oriented space. We're actually avoiding a lot of the lot

766
00:40:52,840 --> 00:40:58,279
Speaker 1: of the fintech space UM because writ large, because it's

767
00:40:58,320 --> 00:41:02,319
Speaker 1: obviously clearly highly competitive is and also these companies and

768
00:41:02,360 --> 00:41:05,400
Speaker 1: management teams many of them haven't worked through a credit

769
00:41:05,440 --> 00:41:09,960
Speaker 1: cycle before, which gives us pause. UM. But we do like, however,

770
00:41:10,520 --> 00:41:14,160
Speaker 1: some of the payment companies UM and so and some

771
00:41:14,280 --> 00:41:18,080
Speaker 1: of them actually are you going to be leaders in

772
00:41:18,160 --> 00:41:20,880
Speaker 1: blockchain disruption? And so that's really where we expressed that

773
00:41:20,960 --> 00:41:41,359
Speaker 1: thesis in our portfolios. Katie, you talk about having fun, UM.

774
00:41:41,760 --> 00:41:44,279
Speaker 1: I don't know if you realize this. Valdonna's idea of

775
00:41:44,320 --> 00:41:50,920
Speaker 1: fun is watching grammar videos, videos about Grammar and her

776
00:41:50,960 --> 00:41:53,319
Speaker 1: other her other fun thing to do is to read

777
00:41:53,360 --> 00:41:56,319
Speaker 1: a story I've already edited and look for typos. That's

778
00:41:56,360 --> 00:41:59,399
Speaker 1: kind of her, So you can figure out a way

779
00:41:59,400 --> 00:42:03,279
Speaker 1: to monitor is those two things of all ears. But

780
00:42:04,360 --> 00:42:07,640
Speaker 1: for the podcast, the way we have fun is uh

781
00:42:08,040 --> 00:42:11,240
Speaker 1: talking at the craziest things we've seen in markets this week.

782
00:42:12,000 --> 00:42:16,000
Speaker 1: Uh proud tradition. So I think it's time to pivot,

783
00:42:16,320 --> 00:42:21,400
Speaker 1: pivot to the crazy. There's been no shortage of crazy things, uh, Katie,

784
00:42:21,400 --> 00:42:24,040
Speaker 1: So hope hopefully you you found something to uh the

785
00:42:24,120 --> 00:42:28,239
Speaker 1: dazzle with us. I think your clients this is this.

786
00:42:28,360 --> 00:42:30,560
Speaker 1: The pressure is on Katie. Your clients really want to

787
00:42:30,560 --> 00:42:33,120
Speaker 1: know the craziest thing you saw. But we'll start with

788
00:42:33,160 --> 00:42:35,560
Speaker 1: Uldonna Vildana. What's the craziest thing you saw this week?

789
00:42:36,840 --> 00:42:39,400
Speaker 1: I think I'm gonna go with the obvious. And I

790
00:42:39,440 --> 00:42:42,000
Speaker 1: actually had a couple of listeners reach out and and

791
00:42:42,040 --> 00:42:44,799
Speaker 1: flag it to me as well. And I know you

792
00:42:44,920 --> 00:42:46,719
Speaker 1: had been looking at it, Mike and I had been

793
00:42:46,760 --> 00:42:48,880
Speaker 1: looking at it, and you and I ended up writing

794
00:42:48,880 --> 00:42:51,879
Speaker 1: about it together. But I want to give a shout

795
00:42:51,880 --> 00:42:57,040
Speaker 1: out to Brian reich Half and at Dr Einstein, who

796
00:42:57,120 --> 00:43:01,480
Speaker 1: both sent over that the Horde whole. Tara Luna the

797
00:43:01,560 --> 00:43:04,360
Speaker 1: buckle to me, Brian Ha's, I mean a super interesting

798
00:43:04,400 --> 00:43:08,400
Speaker 1: threat about how it actually how that stable coin became

799
00:43:08,520 --> 00:43:12,400
Speaker 1: unpegged and everything that had happened there, and then also

800
00:43:12,920 --> 00:43:16,920
Speaker 1: Dr Einstein and apologies. But I don't know his actual name,

801
00:43:17,000 --> 00:43:20,000
Speaker 1: so we're just going with with his Twitter handle. But

802
00:43:20,480 --> 00:43:23,360
Speaker 1: he he was mentioning how it felt, you know, I

803
00:43:23,360 --> 00:43:25,760
Speaker 1: think it was worth something like he said, thirty billion

804
00:43:25,800 --> 00:43:30,000
Speaker 1: dollars and then it felt to just a tremendous, tremendous

805
00:43:30,000 --> 00:43:32,960
Speaker 1: amount over just a couple of days. So that's that,

806
00:43:33,080 --> 00:43:36,040
Speaker 1: by far, is the craziest thing. Yeah, it really is, Luna.

807
00:43:36,160 --> 00:43:38,960
Speaker 1: I think the Queen was worth a hundred and sixteen

808
00:43:39,640 --> 00:43:42,920
Speaker 1: in early April. It's now worth a hundred and sixteen

809
00:43:42,920 --> 00:43:45,720
Speaker 1: dollars now it's worth I don't know, eighty five cents

810
00:43:45,880 --> 00:43:49,520
Speaker 1: the last time I checked. And loyal listeners may remember

811
00:43:49,560 --> 00:43:52,400
Speaker 1: we actually did an interview with do Quan, who was

812
00:43:52,440 --> 00:43:54,879
Speaker 1: the guy behind all of this, about I think about

813
00:43:54,880 --> 00:43:56,880
Speaker 1: a year and a half ago. So if you scroll

814
00:43:57,000 --> 00:44:00,040
Speaker 1: through your podcasts you might be able to find that

815
00:44:00,120 --> 00:44:03,560
Speaker 1: one um and he talks about stable coins and synthetic

816
00:44:03,640 --> 00:44:08,440
Speaker 1: equities and everything else they're working on. Absolutely yeah, absolutely. Uh,

817
00:44:08,960 --> 00:44:12,560
Speaker 1: fascinating story and really kind of kind of scary when

818
00:44:12,560 --> 00:44:16,120
Speaker 1: you think of um how big that project had gotten.

819
00:44:16,120 --> 00:44:19,720
Speaker 1: I think Tera after Ethereum was like the second biggest

820
00:44:19,719 --> 00:44:23,840
Speaker 1: blockchain for a while there. So um, a lot to

821
00:44:23,880 --> 00:44:27,160
Speaker 1: play out in that story. Uh, Katie, how about you,

822
00:44:27,400 --> 00:44:32,360
Speaker 1: did you see anything crazy in markets this week? I mean, yeah,

823
00:44:32,840 --> 00:44:35,440
Speaker 1: that that that question. I have a lot of answers

824
00:44:35,480 --> 00:44:39,000
Speaker 1: to a lot of a lot of crazy things. I

825
00:44:39,000 --> 00:44:42,480
Speaker 1: mean I think the thing that we one interesting thing

826
00:44:42,680 --> 00:44:45,520
Speaker 1: and that we're that I want to highlight is that, um,

827
00:44:46,640 --> 00:44:48,759
Speaker 1: I would be weary of people at say look at

828
00:44:48,800 --> 00:44:50,600
Speaker 1: things and say to you, oh, this is a great

829
00:44:50,600 --> 00:44:52,759
Speaker 1: opportunity to buy this because it's as cheap as it's

830
00:44:52,840 --> 00:44:55,040
Speaker 1: been in five years, or it's as cheap as it's

831
00:44:55,040 --> 00:44:57,280
Speaker 1: been in ten years. Because if we've entered an environment

832
00:44:57,320 --> 00:44:59,920
Speaker 1: where capital is not free again, and that there's inflation

833
00:45:00,000 --> 00:45:01,840
Speaker 1: shin and the central thanks going to be fighting it,

834
00:45:02,160 --> 00:45:05,880
Speaker 1: it may actually not matter to compare evaluations now versus

835
00:45:05,920 --> 00:45:10,040
Speaker 1: five years ago, but there are putting that context out there.

836
00:45:10,080 --> 00:45:13,879
Speaker 1: There are still things that look really interesting from evaluation

837
00:45:13,960 --> 00:45:16,839
Speaker 1: perspective through different types of metrics, and so one that

838
00:45:16,880 --> 00:45:20,000
Speaker 1: stands out to me is what's happening right now in

839
00:45:20,160 --> 00:45:23,680
Speaker 1: the biotech space. UM. So something that interests me is

840
00:45:23,719 --> 00:45:27,320
Speaker 1: that if you look at XBI as an example, UM,

841
00:45:27,360 --> 00:45:31,040
Speaker 1: this is the small and mid cap biotech e t

842
00:45:31,280 --> 00:45:34,520
Speaker 1: f UM. It's market cap is now the whole et

843
00:45:34,719 --> 00:45:38,120
Speaker 1: f UM a little bit less than five billion dollars.

844
00:45:39,040 --> 00:45:42,759
Speaker 1: If you take that, compare it to cash on the

845
00:45:42,760 --> 00:45:46,520
Speaker 1: balance sheet of large pharma companies. So just take the

846
00:45:46,560 --> 00:45:50,560
Speaker 1: top twelve largest pharma companies globally. They have six hundred

847
00:45:50,600 --> 00:45:53,880
Speaker 1: billion dollars of cash on their balance sheet. So cash

848
00:45:53,920 --> 00:45:57,040
Speaker 1: on balance sheet of big pharma companies is actually larger

849
00:45:57,080 --> 00:46:00,640
Speaker 1: than the market cap of small MidCap biotech UM. And

850
00:46:00,680 --> 00:46:03,600
Speaker 1: the last time we got anywhere near those types of

851
00:46:03,640 --> 00:46:07,080
Speaker 1: extremes was actually in two thousands fifteen, which was the

852
00:46:07,160 --> 00:46:11,520
Speaker 1: last bottom for biotech. So again, not very skills at

853
00:46:11,560 --> 00:46:14,279
Speaker 1: calling things over days or weeks or even months, but

854
00:46:14,360 --> 00:46:16,080
Speaker 1: it would suggest to me, if the part of the

855
00:46:16,120 --> 00:46:19,239
Speaker 1: market that you're looking to get involved in, those valuations

856
00:46:19,280 --> 00:46:22,759
Speaker 1: are very meaningful and I think quite supportive. Does that

857
00:46:22,840 --> 00:46:25,600
Speaker 1: suggest at all that some of those big, bigger biotech

858
00:46:25,680 --> 00:46:28,000
Speaker 1: firms might go on a little bit of a shopping spree.

859
00:46:28,320 --> 00:46:30,640
Speaker 1: You know and and snatch up some of those smaller firms.

860
00:46:32,480 --> 00:46:37,600
Speaker 1: Being acquisitive has been quite helpful to some large form

861
00:46:37,600 --> 00:46:40,200
Speaker 1: of companies because they need to stay on the leading

862
00:46:40,280 --> 00:46:42,799
Speaker 1: edge of innovation, and obviously some of that innovation is

863
00:46:42,840 --> 00:46:46,279
Speaker 1: happening in this small space. So it is possible, um,

864
00:46:46,480 --> 00:46:49,480
Speaker 1: that you will actually see some takeouts, and in fact

865
00:46:49,520 --> 00:46:53,160
Speaker 1: we we seen a couple um or and also intentions

866
00:46:53,160 --> 00:46:55,040
Speaker 1: to do that in the last few weeks. So the

867
00:46:55,080 --> 00:46:58,600
Speaker 1: answers yes, and I think that that level of firepower

868
00:46:58,960 --> 00:47:01,799
Speaker 1: suggests that there's some floor to these companies. Now, the

869
00:47:01,840 --> 00:47:04,239
Speaker 1: reality is some of these biotech companies, when you know,

870
00:47:04,320 --> 00:47:06,040
Speaker 1: I can keep going on and on and saying how

871
00:47:06,080 --> 00:47:07,920
Speaker 1: some of them are trading for less than cash and

872
00:47:07,960 --> 00:47:12,440
Speaker 1: the balance sheet are less than cash. Let's their enterprise value, um, etcetera.

873
00:47:12,719 --> 00:47:15,000
Speaker 1: They are burning cash. I mean, that's what they do.

874
00:47:15,040 --> 00:47:17,080
Speaker 1: They spend a lot of cash trying to get these

875
00:47:17,120 --> 00:47:19,600
Speaker 1: drugs to the market. But they're not all they're not

876
00:47:19,640 --> 00:47:21,680
Speaker 1: all going under, They're not all worth less than the

877
00:47:21,719 --> 00:47:24,919
Speaker 1: cash on their balance sheet. So I think, um, there

878
00:47:24,960 --> 00:47:28,760
Speaker 1: there is opportunity there, and it does suggest a floor. Anyway,

879
00:47:28,840 --> 00:47:32,120
Speaker 1: I will pivot now to my craziest thing. As Vildona

880
00:47:32,120 --> 00:47:33,759
Speaker 1: will tell you, Katie, I'm a I'm a big fan

881
00:47:33,800 --> 00:47:38,279
Speaker 1: of the art market, especially the crazy art market, if

882
00:47:38,280 --> 00:47:42,279
Speaker 1: you will. And uh, I like art when it has

883
00:47:42,320 --> 00:47:45,080
Speaker 1: a message. So this brings us to a story from

884
00:47:45,120 --> 00:47:49,640
Speaker 1: the Irish time. There are times there's a young Irish

885
00:47:49,800 --> 00:47:54,400
Speaker 1: artist named Shane Berkery, thirty years old. He decided to

886
00:47:54,560 --> 00:47:59,919
Speaker 1: paint a picture of a nude Vladimir Putin. Um and why,

887
00:48:00,040 --> 00:48:02,760
Speaker 1: you may ask, would he paint a nude Vladimir Putin?

888
00:48:02,880 --> 00:48:06,280
Speaker 1: And he said, Uh, wanted it to be a reminder

889
00:48:06,320 --> 00:48:08,719
Speaker 1: that this person is also just a man. And I

890
00:48:08,719 --> 00:48:11,040
Speaker 1: guess it's just to highlight how absurd it is that

891
00:48:11,080 --> 00:48:14,000
Speaker 1: so many people are dying and lives are being destroyed

892
00:48:14,440 --> 00:48:17,759
Speaker 1: because of decisions he makes. So his solution was to

893
00:48:18,440 --> 00:48:21,400
Speaker 1: paint Putin in the buff and then they auctioned it

894
00:48:21,440 --> 00:48:27,160
Speaker 1: off in an auction to benefit the Red Crosses efforts

895
00:48:27,400 --> 00:48:32,880
Speaker 1: in Ukraine. So that obviously gives us Fildonna an opportunity

896
00:48:33,160 --> 00:48:36,799
Speaker 1: here to play the prices, right, what do you suppose

897
00:48:37,239 --> 00:48:41,280
Speaker 1: the winning bid for a nude painting of Vladimir Putin

898
00:48:41,480 --> 00:48:47,319
Speaker 1: went for and in auction in Ireland. Listeners can see me,

899
00:48:47,360 --> 00:48:51,120
Speaker 1: but I'm totally rolling my eyes as as you do,

900
00:48:51,360 --> 00:48:55,719
Speaker 1: as I should be. I'll go with it's got to

901
00:48:55,760 --> 00:49:00,960
Speaker 1: be low, right unless you can never count the oligarch bit.

902
00:49:01,080 --> 00:49:03,919
Speaker 1: But I'm not. I'm keeping a poker face not saying either.

903
00:49:04,120 --> 00:49:08,480
Speaker 1: I'm gonna go with dollars and that's that's like, I

904
00:49:08,520 --> 00:49:11,680
Speaker 1: think that's okay, Well it's it's in British pounds, so

905
00:49:11,719 --> 00:49:13,759
Speaker 1: i'd have to I'd have to look up the exchange rate.

906
00:49:13,800 --> 00:49:18,920
Speaker 1: But thousand, thirty five thousands of British pounds, Katie, this

907
00:49:19,000 --> 00:49:25,439
Speaker 1: is the time to impress your clients here with your skills.

908
00:49:25,480 --> 00:49:29,280
Speaker 1: I think a half hour you guys talking about markets

909
00:49:29,280 --> 00:49:31,640
Speaker 1: and someone will be impressed by manswer to this. I'm

910
00:49:31,640 --> 00:49:35,920
Speaker 1: in the wrong business, but you get you get the

911
00:49:36,000 --> 00:49:40,360
Speaker 1: luxury of price's right rules. So I felt that is

912
00:49:40,400 --> 00:49:44,520
Speaker 1: saying thirty five thousand. You know it's if she goes over,

913
00:49:44,600 --> 00:49:48,840
Speaker 1: she she's wrong. So you could you know, okay, you

914
00:49:48,840 --> 00:49:50,680
Speaker 1: could be gonna say, oh, I can do that, I

915
00:49:50,719 --> 00:49:55,160
Speaker 1: can do the one dollar. You could Okay, you never

916
00:49:55,200 --> 00:49:57,839
Speaker 1: know what some oligarch might might did. I don't know.

917
00:49:58,040 --> 00:50:01,560
Speaker 1: I'm not I'm not I'm not sure. I'm gonna. I'm

918
00:50:01,600 --> 00:50:04,760
Speaker 1: not gonna editorialize at all, but all of my thoughts

919
00:50:04,760 --> 00:50:10,960
Speaker 1: are captured in one dollar. That is why jealous of that.

920
00:50:11,200 --> 00:50:13,480
Speaker 1: I went with that. I wish I went with that.

921
00:50:13,480 --> 00:50:19,120
Speaker 1: That is why she's the c I O. Your clients

922
00:50:19,160 --> 00:50:24,080
Speaker 1: will be impressed, katounds which still seems high, but uh,

923
00:50:24,520 --> 00:50:26,799
Speaker 1: nothing like the spender of vill Donna was ready to

924
00:50:26,840 --> 00:50:29,640
Speaker 1: bid on on that. I was thinking of the oligon.

925
00:50:29,840 --> 00:50:33,000
Speaker 1: Yeah it's true, but they their money is all tied up.

926
00:50:33,040 --> 00:50:38,120
Speaker 1: They can't they can't access and spend it. So um,

927
00:50:38,160 --> 00:50:41,320
Speaker 1: that was a weird one as it was. Yes, yeah,

928
00:50:41,480 --> 00:50:45,400
Speaker 1: that wasn't I take I take that as a compliment, right, No,

929
00:50:45,840 --> 00:50:51,880
Speaker 1: not super weird. Alright, Katie, I promise you that's the

930
00:50:51,920 --> 00:50:54,440
Speaker 1: most awkward segment of the podcast. So no, but I

931
00:50:54,480 --> 00:50:56,440
Speaker 1: also feel like you kind of cheated because you were

932
00:50:56,440 --> 00:50:58,680
Speaker 1: supposed to like give your fun fact, but you made

933
00:50:58,680 --> 00:51:01,200
Speaker 1: it a test for us. I don't know that. I

934
00:51:01,640 --> 00:51:08,839
Speaker 1: always cheat, always cheat. Okay, that's how long super long

935
00:51:08,960 --> 00:51:12,120
Speaker 1: questions that take like twenty minutes to ask and cheating

936
00:51:12,120 --> 00:51:15,920
Speaker 1: on crazy? Well, I you know, I think I was

937
00:51:15,960 --> 00:51:17,960
Speaker 1: born to be a game show host. So I'm just

938
00:51:18,040 --> 00:51:20,439
Speaker 1: as me, just kind of you know, throw that out there,

939
00:51:20,600 --> 00:51:25,120
Speaker 1: trying prices right ever needs Bob Barker retires, he must

940
00:51:25,160 --> 00:51:28,799
Speaker 1: have retired already, but anyway, just throw that out there.

941
00:51:29,200 --> 00:51:32,520
Speaker 1: I'm um, no, but is there? Most importantly, what's like

942
00:51:32,760 --> 00:51:34,680
Speaker 1: if you said this is the price is right? You

943
00:51:34,719 --> 00:51:36,880
Speaker 1: took your fact, you made it into a contest. I

944
00:51:37,719 --> 00:51:40,879
Speaker 1: want it sounds like, so, what's the prize like? Right right?

945
00:51:42,120 --> 00:51:45,759
Speaker 1: The respected admiration of all of the what shows up

946
00:51:46,000 --> 00:51:50,880
Speaker 1: listeners and an invitation an invitation employee please join us

947
00:51:50,920 --> 00:51:54,120
Speaker 1: again because it's always, uh, such a treat to get

948
00:51:54,120 --> 00:51:56,480
Speaker 1: your insights Katie and hear what you guys are up

949
00:51:56,520 --> 00:52:00,600
Speaker 1: to at Goldman Sachs Asset Management, a small Wall Street

950
00:52:00,640 --> 00:52:03,800
Speaker 1: firm that maybe maybe one or two listeners have heard of.

951
00:52:04,400 --> 00:52:07,279
Speaker 1: I don't know. I want to. I really appreciate you

952
00:52:07,280 --> 00:52:08,879
Speaker 1: guys having me here, and I just want to leave

953
00:52:08,920 --> 00:52:10,840
Speaker 1: people with the message that I know this is a

954
00:52:10,960 --> 00:52:15,440
Speaker 1: very difficult market environment. We're working very hard for our clients.

955
00:52:15,520 --> 00:52:20,560
Speaker 1: Don't panic, it doesn't pay. It's very difficult to time markets,

956
00:52:20,640 --> 00:52:23,320
Speaker 1: you know, stay invested, and um, we'll get to the

957
00:52:23,400 --> 00:52:26,279
Speaker 1: other side of this, just like every other correction that

958
00:52:26,320 --> 00:52:29,719
Speaker 1: we've had and been able to manage through, so appreciate

959
00:52:29,760 --> 00:52:31,560
Speaker 1: the chance to be on here and share that message

960
00:52:31,560 --> 00:52:34,640
Speaker 1: with people. Thank you so much for your time, Katie,

961
00:52:34,640 --> 00:52:44,960
Speaker 1: really appreciate it. Thank you, Katie. Bye, guys, What Goes Up.

962
00:52:44,960 --> 00:52:46,840
Speaker 1: We'll be back next week and so then you can

963
00:52:46,880 --> 00:52:49,799
Speaker 1: find us on the Bloomberg Terminal, website and app or

964
00:52:49,800 --> 00:52:52,560
Speaker 1: wherever you get your podcast. We love it if you

965
00:52:52,600 --> 00:52:54,640
Speaker 1: took the time to rate and review the show on

966
00:52:54,719 --> 00:52:57,960
Speaker 1: Apple Podcasts, so more listeners can find us. And you

967
00:52:57,960 --> 00:53:00,719
Speaker 1: can find us on Twitter, follow me at reag Anonymous,

968
00:53:01,400 --> 00:53:05,120
Speaker 1: Bildanna hierarch is at Bildonna Hirich. You can also follow

969
00:53:05,120 --> 00:53:09,719
Speaker 1: Bloomberg Podcasts at Podcasts. What Goes Up is produced by

970
00:53:09,760 --> 00:53:13,120
Speaker 1: Stacy Wang. The head of Bloomberg podcast is Francesco Levie.

971
00:53:13,280 --> 00:53:14,799
Speaker 1: Thanks for listening. To see you next time.