WEBVTT - Single Best Idea with Tom Keene: Jim Caron & Kona Haque

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, single bust idea starting

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<v Speaker 1>the second quarter. What a great day. We had a

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<v Speaker 1>lot of equity talk, stock market for the first time.

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<v Speaker 1>I'm on Dow forty thousand, watcher at Dow thirty nine

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<v Speaker 1>thousand something whatever, But it's there, and it's the equity market,

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<v Speaker 1>not only the Q one lift, but lifting from October

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<v Speaker 1>and far more lifting from a year ago October. It's

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<v Speaker 1>been a heck of a move. Many of you in

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<v Speaker 1>the market and those that have missed the market are

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<v Speaker 1>acutely aware of these valuations. What we're gonna do is

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<v Speaker 1>we're gonna talk about one of the moonshots out there,

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<v Speaker 1>not Bitdog. We'll do that. I promise we'll do bitcog

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<v Speaker 1>Dog on single best idea Bitcoin, I should say it's

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<v Speaker 1>single best idea. But we're gonna look at Coco here

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<v Speaker 1>in a moment with a great kna haek of ed

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<v Speaker 1>and f But first of all, I've been dying to

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<v Speaker 1>do this. There are people that have pedigrees in academics

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<v Speaker 1>that give pause. Jim Karen at Morgan Stanley did physics

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<v Speaker 1>at Boden, which is a really well known school for

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<v Speaker 1>that small liberal arts but with a huge science integrity,

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<v Speaker 1>and then he wandered out to a small school called

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<v Speaker 1>California Institute of Technology Caltech, did the same thing onto

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<v Speaker 1>a sterling academic career at Morgan Stanley and Bonds. I

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<v Speaker 1>have been dying to talk to Jim Caron about the vogue.

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<v Speaker 1>The rage right now of momentum is a factor ROW

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<v Speaker 1>equals MV. I'm not going to go into the physics here.

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<v Speaker 1>It's a Monday. My brain's not working, But needless to say,

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<v Speaker 1>I have real trouble with the physics envy the physics

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<v Speaker 1>mathematics bringing it over to the stock market. Jim Karen said, no,

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<v Speaker 1>there's something too momentum.

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<v Speaker 2>The way that we think about this in the markets.

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<v Speaker 2>I mean, obviously we look at different facts, and momentum

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<v Speaker 2>is one of the factors that's in the markets, and

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<v Speaker 2>there's many ways to calculate this. I mean, obviously it's

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<v Speaker 2>just the it's the consistency and of price change, and

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<v Speaker 2>not just a consistency of price change, but it's inability

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<v Speaker 2>to deviate meaningfully from a direction. So if there's positive

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<v Speaker 2>momentum in the place, there could be a dip, but

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<v Speaker 2>that dip is very short lived and it just continues

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<v Speaker 2>on the path that it was on before. So that's

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<v Speaker 2>the momentum that we're facing. And that's really one of

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<v Speaker 2>the key factors across most of the equity sectors right now,

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<v Speaker 2>particularly in technology, and it's one of the things that

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<v Speaker 2>is a driving factor. It's a risk because if momentum turns,

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<v Speaker 2>then it's going to hurt a lot of things all

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<v Speaker 2>at once. And I think we need to be a

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<v Speaker 2>little bit worried about that. But that's but so far,

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<v Speaker 2>momentum is your friend.

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<v Speaker 1>Jim Karrn of Morgan Stale. A momentum is a vector.

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<v Speaker 1>It's like an arrow in space, and it's the price

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<v Speaker 1>in this case series traveling upon the vector. And with

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<v Speaker 1>the word that I really focus on here is the

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<v Speaker 1>magnitude the oomph of that vector through space. And right

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<v Speaker 1>now the oomph of the equity market is noted. And

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<v Speaker 1>mister Karen has said, I think what he said to

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<v Speaker 1>honor the late Marty's wag, the trend is your friend

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<v Speaker 1>until it's not. I don't think there's a trend to Coco.

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<v Speaker 1>I don't know what to do with this. Long ago

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<v Speaker 1>and far away in my ute, I had an injury

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<v Speaker 1>in hockey, and I was flat on my back for

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<v Speaker 1>a good ten weeks, twelve weeks, crutches and all that,

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<v Speaker 1>but basically I was horizontal, and I put around the

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<v Speaker 1>bed in the family TV room twenty or thirty books

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<v Speaker 1>that my mother dutifully went and got from the library,

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<v Speaker 1>and one of them was on commodities. It was called

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<v Speaker 1>Cohen and the first commodity I ever studied was Coco.

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<v Speaker 1>Coco is two or three countries in West Africa. It

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<v Speaker 1>is a huge oddity, and when the oddity goes up

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<v Speaker 1>or down, it trends. We've now had an explosive moonshot

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<v Speaker 1>a trend in Coco, and for days I've said to

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<v Speaker 1>the team, Eric Will and the team get ConA haik.

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<v Speaker 1>She is outstanding on the softs and brings an old

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<v Speaker 1>world view to it. She is with edy enough and

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<v Speaker 1>the moonshot of cocoa corna hach.

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<v Speaker 3>Oh my god, it really is a moonshot. It's skyrocketing.

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<v Speaker 3>I've never seen anything like this. It's supplied demands, it's

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<v Speaker 3>incredibly volatile, and you're right, it doesn't trend with anything else.

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<v Speaker 3>Cocoa production is so concentrated in a handful of countries

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<v Speaker 3>which are which are very much influenced by their own

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<v Speaker 3>set of microclimatic factors. It's it's very particular. It is

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<v Speaker 3>fairly elastic. It's not a staple like grains or vegetable oils,

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<v Speaker 3>which you know you have to you cannot do without.

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<v Speaker 3>There are some people who say that chocolate is very addictive,

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<v Speaker 3>But at the end of the day, if it was

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<v Speaker 3>up to feeding and having cereal and rites and something

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<v Speaker 3>to sustain you with versus that indulgent, lovely pitt you

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<v Speaker 3>know what you're going to go for.

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<v Speaker 1>The elastic word is microeconomics. I'm gonna call it Marshallian economics.

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<v Speaker 1>For responsiveness, there is elastic and inelastic. Your need for water,

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<v Speaker 1>your need for milk, your need for your cheerios is

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<v Speaker 1>pretty inelastic. You have to have you have to have

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<v Speaker 1>your weedies every morning. But chocolate is supposed to be inelastic,

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<v Speaker 1>where if the price goes up, we say no, or

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<v Speaker 1>we substitute something else. I did, Eric, did you observe

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<v Speaker 1>that this weekend at the house. I did not observe

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<v Speaker 1>an elastic chocolate function. It was very inelastic and all consuming,

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<v Speaker 1>and I couldn't believe what some of these upscale Boutiki

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<v Speaker 1>chocolates are run right now. It's like refinance the house anyways,

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<v Speaker 1>Kona haik there of v dn F on Cocoa. Single

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<v Speaker 1>Best Idea is simply two of the many, many conversations

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<v Speaker 1>do is make six or seven minutes of single Best

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<v Speaker 1>to longer podcasts, including many from Bloomberg, Odd Lots on Fire,

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<v Speaker 1>hoping a quick six or seven minutes can be part

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