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Speaker 2: to get an audible questionnaires. Do this, as Ivan finds
Speaker 2: it perfectly timed. Senior partner grizzled veteran, first heard of
Speaker 2: at bear Sterns years ago, Tigers Financial Partners. Then I
Speaker 2: got to go to SMCAI Hindenberg puts out a short
Speaker 2: report of to stock. Twenty four hours later, the company
Speaker 2: comes out with OOPS to ten K doesn't look good.
Speaker 2: What does the fine seth radars say about SMCI going
Speaker 2: from Hindenburg tank to oops? The ten K doesn't work well?
Speaker 3: Not good, But they recently switched in twenty three, they
Speaker 3: switched to de luyteen too, so I guess they're going
Speaker 3: through the filings again to make sure that there are
Speaker 3: no issues. I mean Hiddenberg does have a short position
Speaker 3: in the stock, and then they do publish research that
Speaker 3: recommends that shortening the stock based on accounting irregularities. So
Speaker 3: I mean it is Hiddenenberg's work has been questionable. However,
Speaker 3: I do like super Micro. It is part of the
Speaker 3: AI play, So I right now feel this weakness is
Speaker 3: a buying opportunity and they are a tremendous partner with
Speaker 3: Nvidia so to manage outsourced data centers. So hopefully there
Speaker 3: are no regularities and we look back and this will
Speaker 3: have a buying opportunity.
Speaker 2: You've been doing this forever and you've got a wonderful
Speaker 2: skepticism built into your securities analysis. I got sixty six
Speaker 2: buys eight holds no cells on the juggernaut known as Nvidia.
Speaker 2: What does the ivan radars say when you see everybody
Speaker 2: on board?
Speaker 3: Well, I think back in the olden days, I used
Speaker 3: to view a lot of buy ratings as being a
Speaker 3: contrarian indicator. Yet it has not been the case with Nvidia.
Speaker 3: You can see on Bloomberg that my split adjusted initial
Speaker 3: buy rating going back, I think the twenty fifteen is
Speaker 3: now like fifty cents. But Invidia is at the core
Speaker 3: of this products of being able. Originally they were able
Speaker 3: to take digital information and turn it into visual information
Speaker 3: at a faster level through their graphics processors. And now
Speaker 3: they are taking visual information and turning it into digital information,
Speaker 3: which is really the driver of this oll AI large
Speaker 3: language or machine learning process. I mean that our brains
Speaker 3: are analog computers that see things and process visually based
Speaker 3: on an analog basis, and they give you an example,
Speaker 3: a computer learning the difference between a cat and a
Speaker 3: dog is a visual process and that's what Nvidia is
Speaker 3: enabling these computers to do as we adopt AI to
Speaker 3: handle data processing.
Speaker 4: So in terms of what Nvidia needs to do today
Speaker 4: after the closed Ivan, I guess that is it has
Speaker 4: to be another beaten raise or the stocks are.
Speaker 5: Well absolutely well.
Speaker 3: First of all, there's expectations that the revenue will be
Speaker 3: up seventy to eighty percent year over year and the
Speaker 3: earnings will be up almost one hundred percent, and that
Speaker 3: they will guide higher again for the next quarter. And
Speaker 3: more importantly, there's been this controversy around whether the next
Speaker 3: generation processor, the Blackwell, will be delayed or not, which
Speaker 3: is kind of funny because they haven't. They said it's coming,
Speaker 3: and they never gave a specific date. So I don't
Speaker 3: know if it's delayed if you don't really have a
Speaker 3: specific date, but it will be. There'll be a focus
Speaker 3: on a discussion of when the Blackwell processor will start
Speaker 3: to ship. And they already have the next generation Ruben
Speaker 3: processor that they announced in March of this year that
Speaker 3: will come out next year. So they continue to make
Speaker 3: faster and more powerful processor and combining now GPU and CPUs,
Speaker 3: so the Ruben processor is a major leap forward and
Speaker 3: they continue to drive this this whole process.
Speaker 2: Ivan, do you believe, as others have said to us,
Speaker 2: that basically Nvidia says you're not going to get the
Speaker 2: Rubin or the Blackwell unless you buy the present ship
Speaker 2: in that they're basically almost creating a luxury stock scarcity
Speaker 2: by saying you don't get the twenty twenty six chip
Speaker 2: unless you load the boat with the twenty twenty four chip.
Speaker 2: Is there veracity to that?
Speaker 5: Well, they can.
Speaker 3: They control the market, and you know there is a
Speaker 3: huge demand for processors even the CEO of super Micro,
Speaker 3: who's friends with Jason, I mean Jensen Wong, continues to
Speaker 3: ask him for more and more chips. You have Mark
Speaker 3: Zuckerberg at Meta asking for more and more processors. There's
Speaker 3: huge demand, and the data centers are being built based
Speaker 3: on each level of the processor, while you're building out
Speaker 3: the current processor based on the hopper, which is the
Speaker 3: current processor then will be followed by the blackwell the
Speaker 3: end in Nvidia has to, like any company, take care
Speaker 3: of their best customers first.
Speaker 4: Hey, i'van a very intelligent investor asked me earlier this morning,
Speaker 4: why aren't some of these other chip companies more competitive
Speaker 4: with in vidio? Why does the Nvidia have such a
Speaker 4: strong position in this part of the market.
Speaker 3: Because they're multiple steps ahead of everybody else. And you
Speaker 3: know the quote the while everybody's playing checkers, Jensen Wong
Speaker 3: is playing three D chess. So they pioneered the graphics
Speaker 3: processor and invented I'm sorry from the beginning, have pioneered
Speaker 3: it and continue to leapfrog and be just way ahead
Speaker 3: of anybody else. So and if your business is dependent
Speaker 3: on this, like the hyperscalers and the cloud service providers,
Speaker 3: businesses are you want to go with the best, the
Speaker 3: most reliable, of fastest, and even Jensen Wong has said
Speaker 3: the more you spend, the more you save, so it
Speaker 3: also has the cost in processing does present a saving,
Speaker 3: so that is a factor.
Speaker 2: There too, Ivan, thank you so much. I really appreciate
Speaker 2: the comments and smcis the news breaks of questions over
Speaker 2: their ten K filing and mister Finesith mentioning Deloyte Touche
Speaker 2: involved there as well. Evan, don't be a stranger. Thank you.
Speaker 2: With Tigris just incredibly well time. Marilyn Watson is it Blackrock?
Speaker 2: She got a fancy title. She demanded this title when
Speaker 2: she came over from JP Morgan Global Fundamental Fixed Income Strategy.
Speaker 2: Here's what you need to know, tour duty at her
Speaker 2: Bank of England and also a parchment from the University
Speaker 2: of Cambridge. Marylynd been dying to talk to you about.
Speaker 2: What I leave is a reset after the Powell speech.
Speaker 2: When I look at full faith and credit yields today,
Speaker 2: it just looks like a massive Dare I say, permanent
Speaker 2: reset to lower yields? Do you buy that idea?
Speaker 6: Well?
Speaker 1: I certainly agree that we have seen a big research
Speaker 1: in terms of the pricing obviously for you know, treasuries,
Speaker 1: but the fix income as well. When you look at
Speaker 1: the roller coaster that you know, fixed income yields have
Speaker 1: been on, prices have been on this year from pricing
Speaker 1: at the beginning of the year to then a lot
Speaker 1: of cuts, then at one point even pricing a further hike.
Speaker 1: And now I do think, you know, finally after Powell
Speaker 1: speech at Jackson Hole, then the scene is definitely you know,
Speaker 1: set for the Fed to.
Speaker 7: Start cutting rates in September.
Speaker 1: I think when you look at yields, when you look
Speaker 1: at also all in rates, you know, I do still
Speaker 1: think in this environment while we do think obviously the
Speaker 1: Federal cut in September and they will continue to cut
Speaker 1: perhaps for the next few meetings. And you know, Powell
Speaker 1: made it very clear he said that the direction of
Speaker 1: travel is that you know, rates will be going down.
Speaker 1: When you look at the all in yiels that you
Speaker 1: can also get in credit and elsewhere, then they're still
Speaker 1: very very attractive, I think, particularly when you look at
Speaker 1: an economy that is still pretty robust, when you look
Speaker 1: at obviously the labor market is softening, and the said
Speaker 1: has sort of pivoted now from focusing on prices to
Speaker 1: focusing on the labor market, and you know, the overall
Speaker 1: growth of the economy, it is softening, but the US
Speaker 1: economy is still at this point in time, still doing
Speaker 1: pretty well.
Speaker 7: So I think we have seen a big shift.
Speaker 1: We've seen a shift towards seeing lower rates, you know,
Speaker 1: commencing next month. But I do still think that now
Speaker 1: we can see some continue to see very attractive yels
Speaker 1: in fixed income.
Speaker 4: Marilyn, what do you expect from our European friends? The
Speaker 4: ECB in a Bank of England have already begun cutting rates,
Speaker 4: and will they take a little bit more confidence to
Speaker 4: continue that trend given that we've heard Chairman Jpal say
Speaker 4: that the US FED is ready to start cutting rates.
Speaker 7: Yeah, that's right. So they both already began to cut rates.
Speaker 1: Obviously, the Bank of we're going to cut them at
Speaker 1: the beginning of this month, the ECB a little bit
Speaker 1: before that, and we think that they're going to continue
Speaker 1: to cut rates, but probably in a little bit more
Speaker 1: of a gradual fashion, probably about once a quarter. So
Speaker 1: we do think in September that the ECB will cut
Speaker 1: rates again. Obviously at the end of this week, we
Speaker 1: do get the flash HICP, the inflation data coming out
Speaker 1: of the Eurozone, we think it's going to keep them
Speaker 1: on track to cut rates again in September. In terms
Speaker 1: of the Bank of England, we heard from Governor Andrew
Speaker 1: Bailey also at Jackson Hall, and he was also very
Speaker 1: clear that you know, the direction of travel is that
Speaker 1: rates will probably go lower, but again he's in no
Speaker 1: hurry and we do think that he will probably also
Speaker 1: around once a quarter. So we expect that the Bank
Speaker 1: of England may cut rates again in November. I think
Speaker 1: when you look at the starting point, as you say,
Speaker 1: both the ECB and the Bank of England already started there,
Speaker 1: you know, easing cycle. The FED I think has a
Speaker 1: little bit of catshup to do. It's a little obviously
Speaker 1: a bit later than them, and so we do think
Speaker 1: the FED maybe a little bit more aggressive aggressive in
Speaker 1: terms of the next few cuts, whereas the Bank of
Speaker 1: England the ECB will be more gradual. And also their
Speaker 1: economies are in a different place to the US as well.
Speaker 4: All right, Maryland, so you're a black rock. You guys
Speaker 4: are everywhere given that backdrop of global rate declines, where
Speaker 4: do you guys see value these days?
Speaker 7: Yeah?
Speaker 1: So we're in when you look at government once first
Speaker 1: of all, then we still like some Spanish duration. We're
Speaker 1: also long UK duration, a bit a little bit in
Speaker 1: the US, and then we're short duration in Japan because
Speaker 1: you know, we do think that the Bank of Japan
Speaker 1: is actually going to continue to hyh rate this year.
Speaker 1: But we do, like you know, at the front end
Speaker 1: of the curve, we do like attractive names in investment
Speaker 1: grade credit in Europe. In the Eurozone, for example, we
Speaker 1: still think that you can find some very attractive all
Speaker 1: in yields and some very attractive valuations, particularly when you
Speaker 1: then hedge that back into the dollar.
Speaker 7: We think that's pretty attractive. In many cases.
Speaker 1: We continue to like some securitized assets, some very liquid,
Speaker 1: very cashionative names as well, where we think, you know,
Speaker 1: you get decent yields, you know, a decent all in carry,
Speaker 1: but you also do have I think a lot of flexibility,
Speaker 1: and where we are now, we want to make sure
Speaker 1: that we really understand on a risk adjusted level, right.
Speaker 1: We also do like areas of measure markets. For example,
Speaker 1: we're long still.
Speaker 2: Too Maryland, and we've got to be quick here, but
Speaker 2: this is too important. I just put on Twitter my
Speaker 2: Marylyn Watson chart of the day. I'm going to discuss it. Marylyn.
Speaker 2: This is an adult chart. It's global Wall Street talk.
Speaker 1: Folks.
Speaker 2: Stay with me, Marylyn. I went back to Paul Voker,
Speaker 2: and I looked at the Bloomberg Corporate Total returns series
Speaker 2: not full faith in credit, and I took the regression
Speaker 2: from nineteen ninety out to the present day. The bond
Speaker 2: tobacle that you and Blackrock have lived was a three
Speaker 2: standard deviation move, really elegant. The fact is, with a
Speaker 2: power speech, I'm back to a negative two standard deviations.
Speaker 2: Can you envision price up, yield down, where we could
Speaker 2: get back to twenty and thirty year log trend on
Speaker 2: the price of bonds.
Speaker 1: So I think when you look at the corporate market,
Speaker 1: I mean, we certainly could expect to see yields come
Speaker 1: a little bit down from here.
Speaker 7: I certainly think that's possible.
Speaker 1: I think also when you look at the overall economy,
Speaker 1: when you look at what is being priced in in
Speaker 1: terms of then shear number of cuts first of all
Speaker 1: by the FED, the market is actually pricing in a
Speaker 1: lot of pretty negative news that we don't necessarily see
Speaker 1: coming through next year. We do think the lead market
Speaker 1: will continue to soften, or do you think activity will
Speaker 1: continue to soften? But we don't see a strong catalyst
Speaker 1: for certainly for any sort of like you know, sharp
Speaker 1: procession or anything like that. So when you look at
Speaker 1: the overall backdrop in terms of corporates, when you look
Speaker 1: at particularly in the US as well, we do continue
Speaker 1: to see a pretty strong backdrop in terms of economic
Speaker 1: activity when it is slowing.
Speaker 7: But again we do think you know, yields will come down.
Speaker 1: We do think that prices, however, will remain pretty pretty attractive.
Speaker 2: So is the clinic. Marilyn Watson, thank you so much,
Speaker 2: greatly appreciate it. With Black Rocket Emily Rowland Joints from
Speaker 2: the Johina Hancock Company with the clarity of her belief, Emily,
Speaker 2: you have nailed by American by MidCap. Do you still
Speaker 2: believe that?
Speaker 8: Yeah, we do, Tom, And the way we think about
Speaker 8: this is you want to identify where are the best
Speaker 8: earnings trends and where are the best economic trends, as
Speaker 8: simple as that, a lot of people will tell you
Speaker 8: the valuations are the key in but for us, we
Speaker 8: want to look at the denominator of the PE ratio.
Speaker 8: Is the key here, and the US has simply been
Speaker 8: able to generate better earnings results. Just this year. We're
Speaker 8: looking at about eleven percent in the US versus about
Speaker 8: half that in international markets. High quality stocks, guess where
Speaker 8: you find those in the United States. Those are ones
Speaker 8: with great balance sheet, They've got tons of cash. They're
Speaker 8: going to do a better job defending their margins in
Speaker 8: an environment where the late cycle dynamics continue to play
Speaker 8: out very quickly.
Speaker 2: Our SMCI opening here at nine point thirty two, Paul,
Speaker 2: I'm going to go back four days before the Hindenburg news,
Speaker 2: down twenty one percent from where it was August twenty
Speaker 2: three into a Friday of last week right now, four
Speaker 2: seventy one worse than it was pricing before the market opened.
Speaker 4: Absolutely, tom right, thank you for that, Emily. We're just
Speaker 4: finishing up earnings period here. What did you take away
Speaker 4: from the earning cycle and maybe the guidance that we
Speaker 4: saw from some of these companies.
Speaker 8: Yeah, earnings this quarter, of course, much better than expected.
Speaker 8: Of course, we have a behemoth after the close today
Speaker 8: which is going to be highly influential. Hard to forget
Speaker 8: that that's coming later on today. But better than expected.
Speaker 8: Technology in particular saw that double the earnings growth as
Speaker 8: the broad market. So I think, you know, there's so
Speaker 8: many smoking guns out there that investors are pointing to.
Speaker 8: Is as you know, negatives. You look at some of
Speaker 8: the economic data that's coming in worse than expected. You
Speaker 8: look at especially the labor market data, which is showing
Speaker 8: some cracks. Earnings is not one of them. The earnings
Speaker 8: backdrop has been robust, and again that's a key reason
Speaker 8: that we've continued to emphasize US equities given those positive
Speaker 8: earnings trends.
Speaker 4: So we heard from the Fed chairman on Friday pretty
Speaker 4: clearly looking to cut rates. They're assuming that actually takes
Speaker 4: place here, maybe beginning in September. What sector's screen well,
Speaker 4: few in a market where you know, earnings, I mean,
Speaker 4: the rates seem to be coming down.
Speaker 8: Yeah, I think you know, the Jackson role speech, by
Speaker 8: the way, was pretty interesting. You know, we saw exactly
Speaker 8: what was expected. You know, Powell obviously confirmed that cuts
Speaker 8: are coming, but I always watched the market reaction, and
Speaker 8: you know, we saw bonds move a little bit. Market
Speaker 8: expectations of a rate cut didn't change really one hundred
Speaker 8: basis points penciled in for this year, but we saw
Speaker 8: huge moves and equities and in currencies, with the dollar
Speaker 8: plunging to near two year low, So I think it
Speaker 8: was a big sort of sentiment driven mood there moved.
Speaker 8: There is nothing to me really seemed to change in
Speaker 8: terms of the expectation, So I think that was notable
Speaker 8: in terms of sectors and parts of the market that
Speaker 8: we think should do well. It's sort of the opposite
Speaker 8: of the market reaction that we've seen with areas like
Speaker 8: small cap value stocks doing the best since that day,
Speaker 8: areas like international value stocks which have benefited from that
Speaker 8: week or dollar. We actually think that the FED is
Speaker 8: probably going to be cutting because something's wrong. Maybe it's
Speaker 8: as simple as margins are getting compressed and the unemployment
Speaker 8: rates going up. You know, growth is slowly slowing, so
Speaker 8: in that case, byclical assets wouldn't be rewarded. This is
Speaker 8: like the secret life of acid allocators and the way
Speaker 8: that we think about these process that moves it doesn't
Speaker 8: really make sense. You have this odd kind of partnership
Speaker 8: right now of long dated treasuries and gold in international
Speaker 8: value and small cap stocks being the best performing things
Speaker 8: out there. It actually doesn't really make a ton of sense.
Speaker 8: When you open up your textbooks.
Speaker 2: Emily Roland, stay with us, don't go away. We've got
Speaker 2: to follow SMCI where they're having ten K issues. Thank
Speaker 2: you Ivan find such perspective her moments ago opening can't
Speaker 2: find a bid. It was a five point fifty and
Speaker 2: it's now four five nine, four fifty nine off of
Speaker 2: where it was six fourteen a couple of days ago
Speaker 2: before the Hindenburg short report. It is down twenty five
Speaker 2: up percent. Still can't find a bid four fifty six
Speaker 2: right now, Emily Rowland, when we look at the market,
Speaker 2: and this is something you can do from old John
Speaker 2: Hancock or new John Hancock in Boston, you can say,
Speaker 2: when does the money move? Are we getting near a
Speaker 2: yield as we see thirty year mortgage down? Are we
Speaker 2: getting near a cash equivalent out three months or two
Speaker 2: years where we see money supporting equities?
Speaker 8: Yeah, you know, I think we're there right now. One
Speaker 8: of the you know, we think about these sort of
Speaker 8: timely indicators in the markets that we watch, and right
Speaker 8: now to us, it's really about initial jobleslans and high
Speaker 8: yield bond spreads, initial claims. You know, they picked up
Speaker 8: a little bit last week, they're still in this range
Speaker 8: of two hundred to two hundred and sixty thousand. High
Speaker 8: yield bond spreads extremely tame at about three hundred and
Speaker 8: ten basis points over treasury. That's well below the average
Speaker 8: over the last twenty years of five hundred basis points.
Speaker 8: So I think until you see movement on that front,
Speaker 8: I think markets are going to continue to reward equities.
Speaker 8: We want to think about again leaning into higher quality stocks,
Speaker 8: maybe sprinkling in some more defensive equities. But now is
Speaker 8: the time to think about leaning into high quality bonds
Speaker 8: because once those two things happen, breads blowout and initial
Speaker 8: claims rise, it's often too late to capture the income
Speaker 8: that's available in bonds. So you probably remember, you know,
Speaker 8: down the street from John Hancock, John F. Kennedy once
Speaker 8: said that the time to repair the roof is when
Speaker 8: the sun is shining. And we think this is the
Speaker 8: time to think about emphasizing bonds, you know, before it's
Speaker 8: too late to get these great yields.
Speaker 6: She's going to.
Speaker 2: Quote Ted Williams next time.
Speaker 4: She's exactly so Emily, I mean, again, we're in a
Speaker 4: fixed income space. You can sit there in the treasury
Speaker 4: two years, get three point eight seven percent. It's not
Speaker 4: where we were just a little while ago, north of
Speaker 4: four percent, but still decent. Or do I take credit risk?
Speaker 4: How much creditrisk should I be taking here?
Speaker 8: Yeah? So our favorite areas in terms of you know,
Speaker 8: the risk return trade off right now, or investment grade
Speaker 8: corporate bonds, which you're yielding you know, four to five percent,
Speaker 8: and I'm talking about like a single a investment grade
Speaker 8: corporate bond that's very elevated versus history. We like areas
Speaker 8: like agency mortgage backed securities, which are also you know,
Speaker 8: showing solid fundamentals and good valuations there. Even treasuries, hihold's tricky.
Speaker 8: You know, when you go down the credit spectrum right
Speaker 8: now with spreads is contained as tight as they are
Speaker 8: historically when spreads have been at this level of around
Speaker 8: three hundred basis points, your twelve month forward looking return
Speaker 8: is around zero to one percent, with a range of
Speaker 8: positive ten percent to negative ten percent. To us, the
Speaker 8: risks aren't worth it there. And by the way, you
Speaker 8: don't even need to go down the credit spectrum in
Speaker 8: order to generate an elevated road right now, which we
Speaker 8: think is pretty exciting.
Speaker 2: Emily, Thank you so much, Emily Rolling with Portant up
Speaker 2: to co chief investment strategist John Hancock. People go, how
Speaker 2: do I do it? They're asking me how did to
Speaker 2: sign autographs? And that's all because of John Tucker. Because
Speaker 2: John Tucker taught me everything he knows.
Speaker 5: You know.
Speaker 2: It was great And with wind Thin it's the same
Speaker 2: way Audrey Child Freeman was in tears Yep and London.
Speaker 2: She goes, Win's on after me. We're going from Audrey
Speaker 2: Child Freeman to win Thinn. That's very cool.
Speaker 1: She was.
Speaker 2: He was a great mentor to Audrey years ago. Doctor Finn.
Speaker 2: Thank you so much for joining from Brown Brothers Harriman.
Speaker 2: When I don't want to reducts like what's the euro
Speaker 2: call it Brown Brothers harman I want to take your
Speaker 2: just a high ownership of Pacific rim Dynamics. What does
Speaker 2: a China slow down mean for Burma? What does it
Speaker 2: mean for Singapore? What does it mean for Vietnam and
Speaker 2: up to Japan?
Speaker 6: Well, first of all, Tom Paul, thanks for having me.
Speaker 6: It's always a pleasure. And Audrey is a tough fact
Speaker 6: to follow. Im misworking with her. She has a pleasure
Speaker 6: to work with and you guys are locked out and
Speaker 6: laying her So to me, the China story is just
Speaker 6: bubbling in the background, and we have some headlines here
Speaker 6: and there, but we look through all the noise the
Speaker 6: fact of the matters. They really haven't done much to
Speaker 6: address the the underlying problem, which is a huge dead
Speaker 6: overhand that GDP is almost three hundred percent. You know,
Speaker 6: they've tweaked policy. They're pushing on a string right now
Speaker 6: and trying to support the housing market. But to me,
Speaker 6: it's a net negative in sense for a lot of
Speaker 6: the export oriented countries that just Singapore, Taiwan. But at
Speaker 6: the same time it's a slow in China and sort
Speaker 6: of a rotation out of China is a net benefit
Speaker 6: for some of its rivals such as India, Vietnam and
Speaker 6: other countries that are that are sort of picking up
Speaker 6: the near shoring the French shore.
Speaker 5: So it's it's a mixed bag.
Speaker 6: But I think in general the world has to come
Speaker 6: to grips for the fact that China is growing two
Speaker 6: three percent.
Speaker 5: You know, I think it's going to continue to struggle.
Speaker 2: Can you be long Pacific rim Can you be long
Speaker 2: as a talking point Vietnam.
Speaker 5: Absolutely? For instance, you mentioned Vietnam.
Speaker 6: It's it's it's you know, one of the beneficiaries of
Speaker 6: the of the of the French shoring.
Speaker 5: India is another one of them.
Speaker 6: But even the countries such as Korea, Taiwan, Singapore, look,
Speaker 6: they have great fundamentals.
Speaker 5: They just have a solid uh manufacturing.
Speaker 6: Base and there are a source of a lot of
Speaker 6: the world's chips, So there is still great stories there.
Speaker 6: It's just that much of the growth in em over
Speaker 6: the last ten twenty years really was really driven by
Speaker 6: China growing ten percent and that sort of turbo charged it.
Speaker 6: But again, we're sort of a new normal. But that
Speaker 6: doesn't mean these countries can't, you know, can't continue to prosper.
Speaker 6: You know, again, fundamental fundamentally story in the Pacific RIM
Speaker 6: has remains very strong ex China.
Speaker 5: But it's again it's it's it's a new normal.
Speaker 4: So so when I mean, I guess most of our
Speaker 4: audience just knows, as you mentioned earlier, that much of
Speaker 4: the growth coming out of Asia has been China. How
Speaker 4: about the next five to ten years. I can't imagine
Speaker 4: that they're going to be comfortable with low single digit
Speaker 4: kind of growth in their economy. Is there any way
Speaker 4: they can turbo charge that or is there there are
Speaker 4: issues just too fundamental.
Speaker 6: No, No, I think you know, many of the countries
Speaker 6: in that region, I've been very much expert driven, right
Speaker 6: they China's growing, the US was growing, everyone's consuming. But
Speaker 6: you know we're seeing sort of cooling of global growth,
Speaker 6: you know, post Great Financial Crisis and now post pandemic.
Speaker 6: I would say many of these countries are going to
Speaker 6: try and sort of rotate out of being so export
Speaker 6: oriented and trying to be more domestically oriented so to
Speaker 6: encourage domestic consumption, domestic prosperity, and China's trying to mix
Speaker 6: mixed bag.
Speaker 5: You know. Given this again, is.
Speaker 6: Heap that opening, I think other countries will start to
Speaker 6: look a little bit more inward and in a sense
Speaker 6: that they have to. Again, we're at this old world
Speaker 6: where where China's going ten percent and they could just
Speaker 6: chug and export growth and export the way to prosperity,
Speaker 6: and it's again it's just a new normal.
Speaker 3: Uh.
Speaker 6: I think they can containe to prosper but we have
Speaker 6: to see this rotation away from export orientation, you know totally.
Speaker 5: Of course they're still export but more towards domestic consumption.
Speaker 4: How consistent do you believe the Bank of Japan will
Speaker 4: be and kind of trying to raise rates in that country,
Speaker 4: support the currency. How consistent can they be?
Speaker 6: Do you believed?
Speaker 5: Yeah?
Speaker 6: So, I mean I know you spend I cut the
Speaker 6: tail end of your conversation with Augia.
Speaker 5: I know you spend all the time on so I
Speaker 5: won't sort of regurg to it.
Speaker 6: But I do agree that with Audrey that you know
Speaker 6: they so far they've they've been able to prevent a
Speaker 6: huge major market milth down.
Speaker 5: Yeah, we had that scared a couple of weeks ago,
Speaker 5: but here.
Speaker 6: We are back at the highs with equities, currency are stabilizing,
Speaker 6: so they're managing. I think the bone I would have
Speaker 6: to pick with the Bank of Japan has actually admitted, hey,
Speaker 6: we're on hole because of the market. And you know
Speaker 6: they've been some editorials on your page as well. I
Speaker 6: think it was through l our Air and others, is
Speaker 6: that you know that the central banks, you know, can't
Speaker 6: always be led by the market. It's so the tail
Speaker 6: it's wagged dog, right, the central banks Bank Japans fed,
Speaker 6: they have to lead the markets. Uh, and so far
Speaker 6: fort if you look at the US, if i'd has
Speaker 6: done a fantastic job. The market's been wrong about the
Speaker 6: easing cycle. I don't know, I've lost count I use
Speaker 6: up on my fingers, but you know, I think that's
Speaker 6: the story that the central banks have to be the
Speaker 6: one that set the theme. And so I was a
Speaker 6: little disappointed at the bank Japans sort of blinked. But
Speaker 6: they will continue to be very, very cautious. Remember the
Speaker 6: last two times they've hyped, they've gone into recessions. So
Speaker 6: I don't blame them for being cautious, but I'm a
Speaker 6: little you know, sort of, I think they should have
Speaker 6: stood a little bit.
Speaker 2: Stronger when there are tentative meetings an orchestrated ballet between
Speaker 2: the United States of America and China involving Jake Sullivan.
Speaker 2: This has been in the news in the last couple
Speaker 2: of days, folks. In one of the themes there, obviously,
Speaker 2: Taiwan is front and center. One of the themes is
Speaker 2: the South China. See. I think maybe more than anyone
Speaker 2: we talked to doctor Thinn, you've lived it. How do
Speaker 2: we how do we have confidence in investment in the
Speaker 2: Pacific Rim. Well, we've got ships bumping into each other, uh,
Speaker 2: bumping into each other in the South China Sea.
Speaker 6: Yeah, Tom that means like one of the sort of
Speaker 6: age old dilemmas as any kind of market strategies, how
Speaker 6: do you really position for some of these black swan events,
Speaker 6: you know, tail risk events on a political sphere, It's difficult.
Speaker 6: I would sort of say, point out the fact that
Speaker 6: we are basically running two ground wars in Europe and
Speaker 6: Middle East with risk of maybe three and four, and
Speaker 6: yet the markets are sort of overlooking it.
Speaker 9: So yeah, I think a political noise, it's it's always there.
Speaker 9: It's it's I don't mean the Diminish ship Tom. I
Speaker 9: mean it's it's a serious risk. But you know, if
Speaker 9: you're an investor, if you're a multinational and portfolio manager,
Speaker 9: you sort of have to look through.
Speaker 6: It and and really just kind of cross anders hold
Speaker 6: for the best. So to me, China is provoking, is
Speaker 6: no doubt about it. I we've had some ship as
Speaker 6: you point up ships pumping in the Philippines, then unprecedented
Speaker 6: encouraging into japan airspace A is the first time it's
Speaker 6: been confirmed. I think they're provoking. What I worry about,
Speaker 6: and I always write, is something accidental happen? You know
Speaker 6: something I don't think China's looking to to really cause
Speaker 6: any kind of major converagation in the area they are provoking.
Speaker 6: But what if something accidentally happens where playing ghost pimps?
Speaker 6: And that's what I worry about, and so to me,
Speaker 6: I wish everyone would sort of dial back.
Speaker 5: I think we're unfortunately far from that.
Speaker 2: Winton, Thank you so much, greatly appreciated. This is the
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