Speaker 1: So, John, sometimes you're right. Occasionally it does help. Yeah,
Speaker 1: and house press numbers just out from nation wide prices
Speaker 1: down over three percent in March. That's a proper drop.
Speaker 1: Add that to inflation, and you can pretty much call
Speaker 1: it a house price crash. Yeah. I mean I think
Speaker 1: I always. I don't think the bod crash is actually
Speaker 1: all that helpful. Accept the scale people, I fair to
Speaker 1: think of it as a healthy and necessary connection. John,
Speaker 1: This is how we sell the podcast. This is how
Speaker 1: we sell the podcast. We talk about house price crash.
Speaker 1: It brings the listeners in, it's true, and then we
Speaker 1: surprise them with brilliant busy of information and fun conversation
Speaker 1: and great guess But it's hashtag house price crash that
Speaker 1: gets them in. So that's why we call it that
Speaker 1: you've changed. There's so many more models. No, I still
Speaker 1: have the morals. We'll call it whatever you want. What
Speaker 1: do you want to call it? I think I just
Speaker 1: think it's interest because what you tricked me in is
Speaker 1: saying that pieces would follow thirty percent. About three months,
Speaker 1: we're already now like fourteen percent if you look inflation
Speaker 1: as well, So halfway there, what's the next fifteen percent?
Speaker 1: Where does that come from. Is that nominal or is
Speaker 1: it inflation or is it a bit of both? And
Speaker 1: even if prices fell away fifteen percent and nominal terms
Speaker 1: from here, you'd still only be looking at where the
Speaker 1: well at the start of twenty twenty, so before the
Speaker 1: whole COVID freeze and then you know the Bank England
Speaker 1: cutting interest race and throwing loads of money at the market. Again, yeah,
Speaker 1: I think that that's more just for perspective low, because
Speaker 1: I think the other key point why this isn't like
Speaker 1: the nineties, for example, is because even if prices felt
Speaker 1: that much, you're then only talking about that there's still
Speaker 1: only be a tiny proportion of people and things like
Speaker 1: negative equity. The number of homeowners with a mortgage in
Speaker 1: the country als right in England and Wales is now
Speaker 1: but low third, So again it doesn't have the same
Speaker 1: wider impact on the economy as it did perhaps in
Speaker 1: two thousand and eight. Um. The very fact that there's
Speaker 1: that few mortgage womenos is partly the result of the
Speaker 1: house places being too down high in the fast place,
Speaker 1: but in a weird kind of way that's also providing
Speaker 1: a very ventilation for the wider economy and the banking
Speaker 1: sector because there are just fewer people with mortgages, and
Speaker 1: the people who have been able to get mortgages are
Speaker 1: buying large and a better financial position than the average person.
Speaker 1: Still comes with a wealth effect, though, doesn't it. I
Speaker 1: mean this is part of the transmission mechanism of of
Speaker 1: monetary policy anyway, the idea that you can make people
Speaker 1: feel poorer and therefore they spend less, and therefore you
Speaker 1: have some control over inflation, although I would we have
Speaker 1: a conversation another day about the extent with spank England
Speaker 1: have any control over inflation at all Eyes who did
Speaker 1: a podcast earlier with that with Little King with Moving
Speaker 1: King on this matter, and I'll put the link to
Speaker 1: that when it comes up, because we have quite an
Speaker 1: interesting conversation about the extent to which central banks actually
Speaker 1: control inflation, and I suggested it you and I have
Speaker 1: talked about over the last couple of months that they
Speaker 1: have rather less power to do so than they believe,
Speaker 1: and I think he kind of agreed with me, So
Speaker 1: that was kind of I agreed with were certain times fans,
Speaker 1: and we also some interesting conversations about what it is
Speaker 1: that central banks should and shouldn't do in the extent
Speaker 1: to which possibly their briefs has been overexpanded, to the
Speaker 1: extent that it's not very hard for them to focus
Speaker 1: on their their core task of two percent? Two percent?
Speaker 1: Why two percent? Who percent? Were doing? All? I know,
Speaker 1: I know we've talked about it before. I did actually
Speaker 1: look it up. You know, we talked about this the
Speaker 1: other day. Where was that article that I wrote, I
Speaker 1: don't know, two three years ago or something about about it,
Speaker 1: And I looked it up again just to make absolutely
Speaker 1: sure that I wasn't imagining the whole thing. But yes,
Speaker 1: the whole thing came from an article written in a
Speaker 1: version of the IMF staff papers, not even public um,
Speaker 1: by a pleasant sounding academic who suggested that two percent
Speaker 1: kind of intuitively made sense for most of other economies.
Speaker 1: And that's it. And then there we go New Zealand
Speaker 1: full of bay. Every other central bank in the world,
Speaker 1: the FED, not until twenty twelve. I don't think that
Speaker 1: they formerly adoptive percent. Anyway, I've gone off on an aside.
Speaker 1: I'm sorry, house prices, Yes, we told yeah, well nice
Speaker 1: And I think maybe the thing that central banks should
Speaker 1: be focusing on, rather than something like inflation, is more
Speaker 1: localized credit conditions such that you try and avoid bubbles,
Speaker 1: because that that is the thing I've always found irritating
Speaker 1: about central banks. And Alan Greenspan probably was the main
Speaker 1: proponent of this, but everyone else did to this idea
Speaker 1: that you can't spot bubbles, but it's okay because you
Speaker 1: can more pop afterwards, and it's just not that complicated
Speaker 1: spot or bubble. It's very hard spot when it's going
Speaker 1: to bost a tree days. I mean, you just do
Speaker 1: I mean, do you even gorby Jeremy and Einsom's thing
Speaker 1: of x two standard deviations for the long run halverage?
Speaker 1: You can you know? Or the fact that no one
Speaker 1: under the age you're like thought five can flucted by
Speaker 1: a host away claims at things I think should be
Speaker 1: if there were some who may be a bit I
Speaker 1: think the folks are, Yeah, I kind of. I agree
Speaker 1: with you in theory. I agree with you in theory.
Speaker 1: But nonetheless, the subjective targets. When do you decide when
Speaker 1: something has gone over from bullmarket into bubble? When do
Speaker 1: you decide when that bubble is dangerous? You know? These
Speaker 1: is so subjective? And central banks, I mean, are they
Speaker 1: not good at well? They do anyway? I mean, how
Speaker 1: are we doing here? So do we want to give
Speaker 1: them complicated subjective targets or are we good with just
Speaker 1: one clear, straightforward target. Even if that target is it
Speaker 1: is not the correct target, you know, a clear target
Speaker 1: that everybody understands, everyone sees what they're aiming at. This
Speaker 1: is maybe better than than the wooly stuff. I mean,
Speaker 1: that's true. He's playing with fire train. Yeah, I mean
Speaker 1: you are late from that point I view. Can't trust
Speaker 1: them do it that we are wanting them to it. Basically,
Speaker 1: vacancy has come up regularly at the Bank of England, John,
Speaker 1: you should apply. I could be the talking contradian and
Speaker 1: one of our old friends does keep applying every time
Speaker 1: a vacancy comes up to the MPC, but he's never
Speaker 1: been accepted, and he says that he believes that's because
Speaker 1: he understands the effect of money on inflation and nobody
Speaker 1: else does. I want to go back briefly, John, to
Speaker 1: what you were saying about mopping up after bubbles, because
Speaker 1: I was thinking this morning about MMT in modern monetary policy,
Speaker 1: and you know we both read all those books about MMT,
Speaker 1: didn't we a couple of years back about how if
Speaker 1: you had a currency such as the pound or the dollar,
Speaker 1: you could just print all the money you liked and
Speaker 1: it didn't make any difference, and budget deficits don't really exist.
Speaker 1: This is just a technicality. You can print, print, print, print, print,
Speaker 1: do whatever you want, and if inflation starts to get
Speaker 1: out of control, you to just mop it up, mop
Speaker 1: it up, mop it up, and here we are, here
Speaker 1: we are. We effectively had MMT way sooner than any
Speaker 1: any of us would possibly have thought. We had that
Speaker 1: in twenty twenty early twenty twenty. You print a powl
Speaker 1: of money, you stick it in people's pockets, Inflation goes berserk,
Speaker 1: has that mopping up saying going, yeah, it's not terribly well.
Speaker 1: We can so people own lane tilness that we do
Speaker 1: wan't understand MMT. You do realize that I know, and
Speaker 1: people are telling me I don't understand cryptocurrency, so I
Speaker 1: haven't used I understand cryptocurrency, I understand boitcoin, and I
Speaker 1: also understand it M empty, and I think they're all
Speaker 1: absolute nonsense. Hate mail to the usually address thank you.
Speaker 1: In fact, no later in the podcast that I've done
Speaker 1: with Duncan, I think I suggested all the hate mail
Speaker 1: goes to his address because his views on crypto are
Speaker 1: similar to us. So I think that on this occasion,
Speaker 1: please contact Duncan McGinnis on Twitter. All your crypto hatemail
Speaker 1: to him, just for a week and then I'll take
Speaker 1: it back. Thanks very much. John, should get some hate
Speaker 1: mail to you two. Oh yeah, I always like a
Speaker 1: better hate mail. Keeps me humble, excellent, and you are humble, John,
Speaker 1: And so welcome to Merrin Talks Money, the podcast in
Speaker 1: which people who know the markets explain the markets. I'm
Speaker 1: merin Somerset Web and today the person who knows the
Speaker 1: markets inside out right Duncan is Duncan McGinnis, who is
Speaker 1: the manager of one of Rougherst fact flightship funds and
Speaker 1: co manager of another. And I think an awful lot
Speaker 1: of listeners will be invested one way or another in
Speaker 1: Rolph Rown. If they aren't at this point this year,
Speaker 1: they're probably slightly wishing that they were. Duncan. Thank you
Speaker 1: for joining us today. Thank you, thanks for having me. Now.
Speaker 1: We've got a lot to talk about, but I think
Speaker 1: that we might start with banking crisis. We've seen a
Speaker 1: lot of term on in the financial sector over the
Speaker 1: last couple of weeks. Is this going to develop into
Speaker 1: a genuine financial crisis of the like that we've seen before.
Speaker 1: Is everyone's slightly over reacting? Well, I think it would
Speaker 1: not be a conversation with someone from Rougher if we
Speaker 1: weren't concerned about something we have. I'd say, we have
Speaker 1: structural concerns which we can maybe come back to, and
Speaker 1: we have tactical concerns around this potential banking crisis. So
Speaker 1: I think, first of all, that's sort of recap where
Speaker 1: we are. If you went back to the thirty first
Speaker 1: of December, three months ago, recording on the last day
Speaker 1: of the quarter, and someone had said to you in
Speaker 1: the coming three months, credit Suite is going to disappear,
Speaker 1: and three of the top thirty banks, So three of
Speaker 1: the top thirty banks in the US are also going
Speaker 1: to disappear. Do you think the stock market is going
Speaker 1: to be up? Your answer would probably be no, And
Speaker 1: yet and yet they are. I think it's not a
Speaker 1: full blown financial crisis. It's not like two thousand and eight.
Speaker 1: It's not even a run on the banks. Someone wittterally
Speaker 1: described it as a jog on the banks. But it's
Speaker 1: a really difficult situation. So I think it is both
Speaker 1: from a sort of listener's perspective, it's a simultaneously totally
Speaker 1: irrational but also fully irrational to worry about moving your
Speaker 1: money and consider moving your money right now. So it's
Speaker 1: rational to worry about moving your money because we have
Speaker 1: the odd situation where you can earn more money by
Speaker 1: giving it to the government in a money market fund
Speaker 1: or shortly to t bills and you can get less risk.
Speaker 1: So more yield, less risk sounds pretty good. But the
Speaker 1: irrationality is that I think it's highly likely that governments
Speaker 1: will stand behind deposits. Your unsecured retail depositors are not
Speaker 1: going to lose money in this crisis. I would be amazed.
Speaker 1: It would be a huge mistake. I think if they
Speaker 1: let that happen. Yeah, can I interrupt you then to say,
Speaker 1: you know, this is one of the interesting things that
Speaker 1: I would say, it's changed over the last couple of decades,
Speaker 1: and that you know, I'd say even twenty thirty years ago,
Speaker 1: there would have been an assumption that if a bank
Speaker 1: went bust, then you know, you're only protected up to
Speaker 1: the extent that your local regulary system protected you up to.
Speaker 1: But that ship has definitely sailed, hasn't it. There is
Speaker 1: absolutely no appetite from any government anywhere in the developed
Speaker 1: world which to let a depositor lose money on a
Speaker 1: bank failure. So we might as well say that all
Speaker 1: depositors are now protected to infinity and that's that. Yeah,
Speaker 1: legally they are still vulnerable, but I think you're absolutely right.
Speaker 1: The political reality is that it is not acceptable for
Speaker 1: retail depositors to lose money in mainstream banks. So however,
Speaker 1: that doesn't mean they're not There's not lots of problems.
Speaker 1: So there was a well publicized clip of Janet Yellen
Speaker 1: testifying where I think she effectively signed the death warrants
Speaker 1: for smaller regional banks, where where she did not guarantee.
Speaker 1: They're very reluctant to make that explicit guarantee for depositors,
Speaker 1: and she said that they wouldn't guarantee deposits unless it
Speaker 1: was a systemic issue. So the incentive very clearly is
Speaker 1: for is for money to move to the globally important
Speaker 1: systemic banks. You're the very the very largest institutions. So
Speaker 1: how does how does this all play out? I sort
Speaker 1: of imagine the financial system and moving out from a
Speaker 1: core in concentric circles, and at the very center of
Speaker 1: the system you have the RRP, the FED te T
Speaker 1: bills at lending money to the government, and the largest
Speaker 1: financial institutions for your city, groups, your JP, Morgan's, etc.
Speaker 1: And the money is sucking towards the center, from the
Speaker 1: smaller peripheral banks to the center. And as the money
Speaker 1: moves to the center, without getting too technical about things,
Speaker 1: the sort of monetary energy or the monetary velocity DP decreases,
Speaker 1: so the risk taking capacity of the overall financial system decreases.
Speaker 1: And the scene that I have in mind when I
Speaker 1: think about the incentives of corporate treasurers and individuals with
Speaker 1: cash savings at banks is from the film Casino. So
Speaker 1: if you remember the film Casino with Robert de Niro,
Speaker 1: the old mobsters eventually get sort of caught by the
Speaker 1: law and they're sitting around a table deciding whether or
Speaker 1: not they're going to turn on each other or whether
Speaker 1: their foot soldiers are going to turn informants on them,
Speaker 1: and one of the old guys, who's clearly been around
Speaker 1: a while, just says, why take a chance, and everyone
Speaker 1: ends up dead. So everyone that knows anything ends up
Speaker 1: shots and I think that's what depositors are doing currently.
Speaker 1: They are They're shooting first and asking questions later. And
Speaker 1: we're saying we're seeing it in the data, hundreds of
Speaker 1: billions of dollars moving to money market funds and to
Speaker 1: JP Morgan and the like, and this is catastrophic for
Speaker 1: the smaller financial institutions the other Can I interrupt again? Sorry?
Speaker 1: Follow up a question? What does that mean for the
Speaker 1: smaller banks in the UK, for the startup deposit takers,
Speaker 1: for our you know, disrupted banks. I think I think
Speaker 1: it's existential. I think I think they will they will die.
Speaker 1: They will, they will bleed to death unless something arrests
Speaker 1: this situation. And the only two things that can arrest
Speaker 1: it are at the government backstop guaranteeing those deposits, or
Speaker 1: the banks. The banks have the option to raise the
Speaker 1: interest rate that they pay on deposits. I mean, I'm
Speaker 1: sure you'd be as much of a supporter of that
Speaker 1: as I am. But because at the moment, of course,
Speaker 1: they don't pay you base rate, but if they do,
Speaker 1: it will evisceerate their profitability or whatever profitability they have.
Speaker 1: So if they have to pay more to retain the deposits.
Speaker 1: Then then they're they're going to they're going to kill
Speaker 1: their net interest margin, and that too must die the
Speaker 1: way bust if they don't raise their deposit rate, bust
Speaker 1: if they maybe not maybe not bust, but certainly in
Speaker 1: a vastly reduced circumstance. Now, now the other the more important.
Speaker 1: Now this is not as awful as it sounds, because
Speaker 1: it's not great for the sort of health of the
Speaker 1: banking industry, but it's people will still have banking facilities
Speaker 1: to the big banks. I'm more worried about the second
Speaker 1: order consequences. So that's this is becoming pretty pretty well
Speaker 1: known and widely discussed. But it's smaller banks that specialize
Speaker 1: in commercial property lending and small and medium enterprise lending.
Speaker 1: If you've got a small family business, you tend to
Speaker 1: go to a smaller bank to get that loan. So
Speaker 1: it's actually going to be the knock on consequences that
Speaker 1: this will choke off credit to the to the real economy.
Speaker 1: And that's that that's how how you get to bigger
Speaker 1: problems like like a tightening lending standards and an enforced recession.
Speaker 1: But at another angle of this, which is which is
Speaker 1: new A new feature of this bank run is the
Speaker 1: speed at which it's happened. So this is not your
Speaker 1: grandfather's bank run. It's not even an eight because there's
Speaker 1: no cues. There's no standing outside a brank of bank
Speaker 1: or a branch of Northern Rock. There's an app you
Speaker 1: can move your money almost instantly and frictionless. There's a
Speaker 1: great story of how GP Morgan, the man not the institution,
Speaker 1: slowed down the bank runs in nineteen oh seven. He
Speaker 1: asked the bank tellers to double count the money, and
Speaker 1: that really slowed the pace. There's just none of that now, people.
Speaker 1: I mean that the modern equivalent is the closing our
Speaker 1: website for service updates. Yeah, yeah, yeah, indeed there might be.
Speaker 1: I think crypto does a bit of that as well,
Speaker 1: doesn't it. Yeah. So there's there's a bunch of new
Speaker 1: things going on here, and there's a bunch of things
Speaker 1: that are sort of as old as as old as time. Okay,
Speaker 1: so what are the consequences for investors from that? Now?
Speaker 1: Obviously I suppose one of the things you could say
Speaker 1: is that that that dynamic is fairly disinflation ry. Yeah.
Speaker 1: So I think there's two elements. There is the sucking
Speaker 1: of liquidity out the system, something that you know that
Speaker 1: we've been worried about for a while. So there were
Speaker 1: interest rates going up through all of twenty twenty two,
Speaker 1: quantitative easing being reversed into quantitative tightening also through all
Speaker 1: of twenty twenty two and potentially ongoing, and now the
Speaker 1: slow motion run on the banks. So liquidity has been
Speaker 1: drained from the system. That monetary energy that I mentioned
Speaker 1: earlier is disappearing. So that's the first problem. The second
Speaker 1: problem is how investors are positioned. I mean they're on
Speaker 1: a sort of longer term basis. So everyone spent the
Speaker 1: last decade or so iterating towards risk ear and risk
Speaker 1: ear portfolios in a zero interest rate world in pursuit
Speaker 1: of their return target. It's whether that's a retiree wanting
Speaker 1: five to seven percent on their pension pot, or whether
Speaker 1: that's an institution or endowment chasing a seven or eight
Speaker 1: percent long term return target. And one American investor phrased
Speaker 1: it so beautifully I thought when he said, my public
Speaker 1: market investors are doing privates, my private market investors are
Speaker 1: doing venture, and my venture investors are doing crypto. Everyone
Speaker 1: everyone moved to the riskiest end of their mandate to
Speaker 1: try and change returns in zerp world and now because
Speaker 1: we've jumped from zero rates to five percent rates or
Speaker 1: four and a half percent rates in a year or so,
Speaker 1: every investment committee in the land is looking at the
Speaker 1: same challenging picture, all of these cross currents from war
Speaker 1: to inflation, to deglobalization to recession risks to a banking crisis,
Speaker 1: as covered by my Colleaguallex Charters in a podcast of
Speaker 1: you a few months ago, or in our Rougher Review
Speaker 1: recently published. And by the way, everyone I have a
Speaker 1: copy of that Rougher Review. It's excellent. If you're not
Speaker 1: a Rougher client, I think you can still read all
Speaker 1: the stuff on the website right and there is and
Speaker 1: we did do that great podcast with Alex Charter's as
Speaker 1: all the US is going to be even better Duncan,
Speaker 1: so please don't feel for a second prefer him over.
Speaker 1: But it has written a brilliant article in the beginning
Speaker 1: of the Rougher Review twenty twenty three that everyone should
Speaker 1: read to give them a sense of how the land lies. Yes, so,
Speaker 1: so these investment committees are all sitting facing this incredibly opaque,
Speaker 1: uncertain outlook, and all of a sudden they're realizing, wait
Speaker 1: a minute, I can build a portfolio achieving my say,
Speaker 1: seven percent return target, where a big, big chunk of
Speaker 1: that is in cash and T bills earning four or five.
Speaker 1: And to quote the president of black Rock from a
Speaker 1: quarter or so ago, he thinks you can build a
Speaker 1: seven percent expected return portfolio that only has twenty percent
Speaker 1: in equities. So all these investment committees are sitting thinking,
Speaker 1: I don't need to take anywhere near as much risk
Speaker 1: as I used to to achieve my expected return. Yea,
Speaker 1: because that's easier given they've all lost fortunes on those
Speaker 1: higher risk portfolios. Well, yes, yeah, it would have been
Speaker 1: better to start this process a year or so. Yeah,
Speaker 1: a year and a half ago, I would have been
Speaker 1: a better time to look at it. You know what
Speaker 1: seven percent a year next to the thirty percent you're
Speaker 1: already lost. Yeah, And that this the slide that I
Speaker 1: sort of talked to in our pack on this I
Speaker 1: have been using for two years. I would like to emphasize.
Speaker 1: But the risk here is I think a globally synchronized
Speaker 1: de risking of portfolios. So everyone moves from seventy percent equity,
Speaker 1: sixty percent equity, whatever, down the curve de risking by
Speaker 1: twenty or thirty percent towards lower risk assets. And if
Speaker 1: everyone is doing that simultaneously, it is not obvious to
Speaker 1: me who the buyer is, because who's the person that's
Speaker 1: that's up wanting to up their risk in this world.
Speaker 1: If someone said to me the other day, what about
Speaker 1: China and the Middle East, these sovereign wealth funds, They've
Speaker 1: got trillions of dollars that they might like to take
Speaker 1: on that risk from the forced sellers. And I think
Speaker 1: that it was a very interesting point. But because of
Speaker 1: many of the sort of global techtonic things going on,
Speaker 1: I think it's highly unlikely that the West will now
Speaker 1: tolerate trillions of dollars of Chinese money, for example, coming
Speaker 1: in and buying buying up stakes in US businesses. So
Speaker 1: when China puts his hand up and says we're happy
Speaker 1: to take twenty percent of Boeing or twenty percent of
Speaker 1: Lockheed Martin, I think Congress at the Senate might have
Speaker 1: a problem with that. So it's just not at all
Speaker 1: obvious to me who the buyer is for this forced
Speaker 1: not not forced selling, but rational selling that we think
Speaker 1: will happen. Yeah, okay, well, let's go back a bit
Speaker 1: and talk about this portfolio that can make you U
Speaker 1: six or seven percent, well, only being twenty percent in equities,
Speaker 1: what else is in it? We'll come back to equities
Speaker 1: and the type of equities that might make up that
Speaker 1: small apart. But what else is in a portfolio? I
Speaker 1: mean most of us that used to thinking, well, you know,
Speaker 1: the vast majority of our portfolio is an equity is seventy.
Speaker 1: Maybe we have a little cash and a small world exposure,
Speaker 1: but most people moved away, while individuals anyway moved away
Speaker 1: from sixty forty a long time ago and aren't massively
Speaker 1: overexposed in the upream market. So if we would genuinely
Speaker 1: go down to twenty thirty percent in equities, what would
Speaker 1: make up the rest? Yeah? So finally we're getting paid
Speaker 1: a decent return on cash. So I think cash has
Speaker 1: become a useful asset because because it pays a return
Speaker 1: and because it gives you optionality to take advantage of
Speaker 1: opportunities in the future. That's a new thing. Cash was
Speaker 1: incredibly painful for the last decade, and beyond cash, I
Speaker 1: find myself looking at risk premiums a lot this year
Speaker 1: because there's a big diversion. Some are wide and some
Speaker 1: are anomalously tight, and that dispersion should be pretty good
Speaker 1: for active managers who are sort of worth their salt
Speaker 1: and willing to have a differentiate in portfolio. So, where
Speaker 1: our risk premiums tight and therefore it's not attractive to
Speaker 1: take risk US equities would be would be the first
Speaker 1: one I would I would cite investment grade credit, and ironically,
Speaker 1: these are the things that investors have been moving into
Speaker 1: this year. If you look at the earnings yield of
Speaker 1: the SMP, it's five percent because it's on a pe
Speaker 1: of twenty. Well, cash is five percent, So that very
Speaker 1: crude metric, yeah, very crude metric of the equity or
Speaker 1: as premium is basically zero. A more sophisticated measuring of
Speaker 1: the equity risk premium has it in about two I think,
Speaker 1: which is as low as it has been since two
Speaker 1: thousand and seven. So benchmarked investors, because the US is
Speaker 1: so big, have sixty percent of their money in that
Speaker 1: particularly unattractive asset. I would say another sort of anomally
Speaker 1: is investment grade credit yields. Check this morning the investment
Speaker 1: Grade Index yields four and a half. Well, that's that's
Speaker 1: less than cash. So that I mean that that is
Speaker 1: something like hasn't happened in the forty or fifty years.
Speaker 1: That people will say that's because the yield curve is
Speaker 1: inverted on the investment grade index is eight years duration.
Speaker 1: Blah blah blah. It looks to me like you're not
Speaker 1: getting paid to take that risk. And that's why in
Speaker 1: our portfolio or offer, we're still short investment grade credit
Speaker 1: and high yield. That was very useful for us in
Speaker 1: twenty twenty and last year. Then it was about a mispricing.
Speaker 1: Now I think it's about deterioration and economic conditions. So
Speaker 1: where are risk premiums wide? Where are assets attractively priced?
Speaker 1: I think we're getting there. Things are getting better than
Speaker 1: they were in twenty twenty one. That's the That's the
Speaker 1: silver lining to this undoubtedly gloomy overview, is that expected
Speaker 1: returns are better in places. But I think it's in
Speaker 1: the nooks and the crannies that are less popular. So
Speaker 1: I don't want to plug a competitor podcast Marin No,
Speaker 1: and I don't want you to do that either, But
Speaker 1: there's a very good interview out there with David Einhorn
Speaker 1: of a very long standing successful house fund manager, and
Speaker 1: his words chime with my own recent experience that nobody's
Speaker 1: looking at active stock selection anymore. Nobody's looking at smaller
Speaker 1: areas like like the UK. I which just given my
Speaker 1: own experience I did to UK smaller companies meetings in
Speaker 1: the last week and group calls. In fact, I dialed
Speaker 1: into the group call and on the first meeting there
Speaker 1: was only two other people on the line from family offices,
Speaker 1: so no professional investors beyond myself on the call. And
Speaker 1: then another call was similar, you know, less than half
Speaker 1: a dozen people on the call, So nobody is paying
Speaker 1: attention to the UK. And you've you've said a lot
Speaker 1: about this, done podcasts with other people. I totally agree
Speaker 1: with that, and I think something like this news flow
Speaker 1: you're seeing about companies fleeing the UK to list in
Speaker 1: the US is actually a contrarian, but I signal it
Speaker 1: reminds me of In twenty sixteen, Vanguard had a gold
Speaker 1: equities fund and they didn't close it, but they renamed it,
Speaker 1: so it went from being a gold equities fund to
Speaker 1: something like the Capital Cycle Fund, and that marked almost
Speaker 1: exactly to the day the bottom and gold equities which
Speaker 1: then doubled in the proceeding twelve in the next twelve months,
Speaker 1: so I think UK equities have a very wide equity
Speaker 1: risk premium. And Japan is notable because its rates are
Speaker 1: still zero and it's equity market trades are a p
Speaker 1: of twelve, So that's very very wide equity rist premium. Two.
Speaker 1: The last thing I'd say, we can come on to
Speaker 1: talk about commodities, but gold commodities in general very attractive,
Speaker 1: we think. And inflation link bonds, so tips US inflation
Speaker 1: link bonds will pay you inflation plus one point five
Speaker 1: percent for the next twenty years lending to the global
Speaker 1: hedgeman in dollars. It's pretty at track to I think
Speaker 1: as a law risk asset. So whatever inflation is, you'll
Speaker 1: get that plus one point five. Let's go back to
Speaker 1: UK companies supposedly fleeing the UK and we get told
Speaker 1: that that's about you know, regulation, days, regulation, that, etcetera.
Speaker 1: But it's really about money, isn't it. CEOs get paid
Speaker 1: a lot more in the US company. You can wear
Speaker 1: your company to the US. You can double its valuation
Speaker 1: pretty much overnight and then you can triple your pay
Speaker 1: and get a bonus based on a different share price.
Speaker 1: So there's a lot that the incentive here is very
Speaker 1: much monetary. Yeah, yeah, absolutely, So the UK equity markets
Speaker 1: had something like twenty one months of consecutive outflows. Before that,
Speaker 1: we had a couple of months of optimism before coronavirus
Speaker 1: crushed it, and then before that we had we had
Speaker 1: Brexit and Scottish independence. So it's been a decade of
Speaker 1: pretty relentlessly bad news for the UK equity markets, and
Speaker 1: it's been the wrong sort of type of companies, factor
Speaker 1: exposers and so on. And you're absolutely right. What is
Speaker 1: it called jurisdictional arbitrage when you when you pick up
Speaker 1: your company and move it to a different playground. It's
Speaker 1: not a new thing, So Prada, I think, as an
Speaker 1: Italian company listed in Hong Kong because Asian markets like
Speaker 1: Luxury Goods Manchester United listed in the US rather than
Speaker 1: the UK because they want to hire multiple Like you say, what,
Speaker 1: I think it's rational for those companies to do that,
Speaker 1: to seek a higher higher evaluation, which is a lower
Speaker 1: cost of equity. I'm sure the CEOP is a factor,
Speaker 1: like you say, but I think as a as an investor.
Speaker 1: If you already hold those shares, then that's great because
Speaker 1: you might get the rerating. But I think it shows
Speaker 1: I want to be looking in the areas that are
Speaker 1: unfavored with lower evaluations rather than looking at the multiple
Speaker 1: the markets with the higher multiples. Okay, so when you
Speaker 1: invest in that, let's just talk about the UK and Japan.
Speaker 1: You're investing in individual companies, the very active burnt right,
Speaker 1: there's nothing passive going on in the rough of portfolios. No,
Speaker 1: that's right, Yeah, so we pick individual companies. We do. Also,
Speaker 1: we're a house that leads with our top down macroeconomic
Speaker 1: acid allocation thinking, but beneath that when we do invest
Speaker 1: in stocks, we do invest in individual companies and sometimes
Speaker 1: we consider things like like factors or themes. Okay, So
Speaker 1: it give us a couple of favorite companies in the UK. Well,
Speaker 1: I think the biggest holdings, the biggest risk in general
Speaker 1: in our portfolio is commodities at the moment, and the
Speaker 1: two biggest holdings are BP and Shell. So BP is
Speaker 1: a is a very interesting example. I've been talking of
Speaker 1: jurisdictional arbitrage. It trades on half the multiple of exon
Speaker 1: now these are basically basically the same company, but because
Speaker 1: one trades in the UK, it trades on sort of
Speaker 1: eight times now and trades on fifteen times. But it's
Speaker 1: the free cash flow yields that make energy equities very exciting.
Speaker 1: I think. So current oil prices of its seventy five
Speaker 1: you probably get a high single digit free cash flow yield,
Speaker 1: which is which is great, pays an attractive four percent
Speaker 1: dividend yield, it's paying down debt, it's buying back shares,
Speaker 1: it's doing all the all the good things that you'd
Speaker 1: like a company to do. But it's the sort of
Speaker 1: optionality or convexity to use a fancy word, to higher
Speaker 1: oil prices that makes them really attractive. So if oil
Speaker 1: goes back to one hundred dollars, then all of a sudden,
Speaker 1: these are on sort of twenty percent plus free cash
Speaker 1: flow yields, so really generating a huge amount of a
Speaker 1: huge amount of cash for shareholders. But another evolution in
Speaker 1: our commodity strategy. So commodities has been a very important
Speaker 1: part of the portfolio, particularly energy since since well since coronavirus.
Speaker 1: We have sort of evolved the way that we're playing it.
Speaker 1: So we now have almost twenty percent of the portfolio
Speaker 1: and commodities, but half of it is in the exchange
Speaker 1: traded commodities for the physical commodities rather than the equities
Speaker 1: like BP, Shell, Glencore, ur, Slur, Mettall, etc. What why
Speaker 1: are we doing that? I'd say it's because we want
Speaker 1: to If we're right about our big picture view of
Speaker 1: the world, which is more more inflation, more economic growth, volatility,
Speaker 1: more geopolitical friction, then you want to own the Hamburger,
Speaker 1: not McDonald's. So you want to own the thing that
Speaker 1: is inflating, but that doesn't come with the price to
Speaker 1: earnings multiple that a stock comes with. Because in general
Speaker 1: we think these will be compressing, even though the commodity
Speaker 1: ones are cheap to begin with. But also the company
Speaker 1: is beset by regulator sorry pressures, it's beset by wages,
Speaker 1: input costs, supply chain disruptions. All of this stuff that
Speaker 1: we think will be a feature of the coming decade
Speaker 1: affects the company, but is probably bullish for the commodity itself. Okay,
Speaker 1: are there any favored commodities? Is this part of an
Speaker 1: energy transition play? Is it part of the coming CAPEX boom?
Speaker 1: Is it about reassuring, friend shoring, all those things a
Speaker 1: bear and all of it. Yeah, so we're most excited
Speaker 1: by by energy and oil in particular. So that's about
Speaker 1: a ten percent of the portfolio, six percent in oil itself,
Speaker 1: another another five percent roughly in energy equities. But we
Speaker 1: have three percent of the portfolio in copper and another
Speaker 1: one or two percent in um metals stocks, so so
Speaker 1: Glencore or ar solar metalal CoA and so on, and
Speaker 1: that that that the copper is more of a long
Speaker 1: term energy transition play. There's the old Doctor Copper as
Speaker 1: a was a PhD in economics. But there is a
Speaker 1: there is a strong story there supply demand mismatch where
Speaker 1: if we're going to transition the economy away from fossil
Speaker 1: fuels towards electric, we need an enormous amount of copper,
Speaker 1: and supply is constrained because it's very very difficult to
Speaker 1: get the permitting and the capital to build a mine
Speaker 1: and it takes a very long time. So we think
Speaker 1: that governments are committed to the transition and therefore the
Speaker 1: fiscal stimulus will come and the copper price probably has
Speaker 1: to go up to incentivize the supply to be there.
Speaker 1: And tell us just briefly for readers who want that, listeners,
Speaker 1: listeners who want app on all this. Why do we
Speaker 1: need so much copper? It's about the batteries, It's about
Speaker 1: is it also about the energy infrastructure? About the grid?
Speaker 1: Do we use copper and the gride as well? Yeah? Yeah,
Speaker 1: you use copper and everything. So you can't have a
Speaker 1: winter turbine, you can't have a solar panel. You certainly
Speaker 1: can't have an electric car without copper, without lithium, without
Speaker 1: without aluminium. All these, all these metals are incredibly important
Speaker 1: to the energy transition, and the thing is that we
Speaker 1: need to We need an awful lot of them up
Speaker 1: front to build the infrastructure so that we can transition
Speaker 1: onto that infrastructure. I was talking to someone the other
Speaker 1: day about the UK electricity grid and such a disaster
Speaker 1: in general, and he pointed out something that I kind
Speaker 1: of knew but I hadn't quite taken on board, which
Speaker 1: is that before we started using renewable energy at all,
Speaker 1: there were only maybe six or seven points across the
Speaker 1: entire country where electricity came into the grid, and now
Speaker 1: there are eighteen ninety thousand. Well, and how can we
Speaker 1: possibly expect to cope with that. What if you think
Speaker 1: about it? Of course, you know, suddenly everyone used to
Speaker 1: just take take energy out right, and the big power
Speaker 1: stations put it in. That was it. And now everyone
Speaker 1: with a solar panel, every one with the wind turbine,
Speaker 1: all the big wind farms, et cetera, are putting energy in.
Speaker 1: It's a totally different dynamic for an infrastructure. No wonder
Speaker 1: it's creaking away. Right. Let's talk then about about gold.
Speaker 1: One of our favorite topics are as John likes to
Speaker 1: call it a physical bitcoin. You used to old some
Speaker 1: bitcoin in the fun, but I'm guessing you don't want
Speaker 1: to go back to that. It's always fun to talk about,
Speaker 1: but we don't currently have any exposure. Interesting. But let's
Speaker 1: before we go on to gold's bitcoin, then let's talk
Speaker 1: about actual bitcoin. What would make you buy some back?
Speaker 1: I think the hurdle is pretty high, so I have
Speaker 1: never been more bullish on anything in my life. As
Speaker 1: you might remember mearin as, I wasn't bitcoin in twenty twenty,
Speaker 1: but I think the context was so perfect for a
Speaker 1: four bitcoin. Back then, we had a zero interest rates,
Speaker 1: massive quee, the market was obsessed with technology, We had
Speaker 1: investors worrying about increasing cross asset correlations and desperately looked
Speaker 1: for a diversifier, and perhaps cynically, we saw that there
Speaker 1: was a lot of institutional interest building up. And one
Speaker 1: of the great advantages of ruffers that we have the
Speaker 1: ability to move very quickly. So we got in front
Speaker 1: of that wave of institutional money that was coming into
Speaker 1: the space. So we bought in November twenty twenty at
Speaker 1: fifteen thousand, and we exted in April twenty twenty one
Speaker 1: at sort of sixty odd thousand on the day that
Speaker 1: coinbas iPod actually so it was a very very successful
Speaker 1: investment for us. We only held it for five months
Speaker 1: and we sort of more than tripled our money, and
Speaker 1: you got the mist stunning amount of publicity from it.
Speaker 1: It was so clever. Some some of that publicity was
Speaker 1: positive and some was not, but so it was very
Speaker 1: successful for us. It was never a huge part of
Speaker 1: the portfolio, it was only two percent entry, but it
Speaker 1: was It was useful contributor to performance in twenty twenty
Speaker 1: and twenty twenty one. But today the context is completely different.
Speaker 1: So five percent interest rates quantitative tightening rather than quantit
Speaker 1: of easing. The market subsession with technology has gone away,
Speaker 1: and now it's sort of show me your cash flow.
Speaker 1: The inflation hedge narrative, the digital gold narrative have sort
Speaker 1: of blown up. If we're we're honest, forty year realized
Speaker 1: highs and inflation last year and bitcoin was down. Pretty
Speaker 1: hard to argue that that was an inflation hedge. And
Speaker 1: we had a very clever theory in house that called
Speaker 1: Gresham's law and reverse. So Gresham's lass goes back to
Speaker 1: the seventeenth or eighteenth century and it was the bad
Speaker 1: money forces out good So if counterfeit notes are in
Speaker 1: the system, those who are holding legitimate banknotes will hold
Speaker 1: them and money monitory be lossity will collapse. Our view
Speaker 1: was that in crypto, the good money, the institutional money,
Speaker 1: was going to come in and clean out the bad money.
Speaker 1: So it's why as Greshams Law and reverse and some
Speaker 1: light would be the best disinfectant and all that sort
Speaker 1: of stuff, we would drag bitcoin and crypto into the
Speaker 1: and clean it up. And the reality over the last
Speaker 1: couple of years is that the good money, the institutional money,
Speaker 1: came into the space and it backed FTX. That was
Speaker 1: that was the horrible irony, is that the crucially not rougher.
Speaker 1: I would emphasize we've never had anything to do with them,
Speaker 1: although I did ones meet SPF a story for the
Speaker 1: pub perhaps, and the it just it just hasn't worked.
Speaker 1: You know that it has not been cleaned up. And
Speaker 1: now you have this operation choke point in the US
Speaker 1: where the US regulator, in combination with various policymakers, is
Speaker 1: really cracking down on crypto. Senator Elizabeth Warren doing a
Speaker 1: victory dance that Silicon Valley Bank and Signature Bank were
Speaker 1: both sort of crypto focused. The SEC suing coin Base
Speaker 1: and ripple the CFTC coming after binands that there's a
Speaker 1: tightening regulatory noose around crypto and that makes me very nervous. Now,
Speaker 1: the truth is it's up thirty or forty percent year
Speaker 1: to date, so perhaps we're wrong, but I think that
Speaker 1: it's seriously challenged in the current economic environment and in
Speaker 1: the current regulatory environment. The flap state to all this,
Speaker 1: of course, the ultimate bill case is that Jim Kramer
Speaker 1: is very beerish. That is interesting. We should definitely take
Speaker 1: that into account. But I suppose the key thing there
Speaker 1: on the regulation is it as much as the advocates
Speaker 1: of crypto and of bitcoin in particular, are convinced that
Speaker 1: you know, being decentralized, being independent, etc. Is the answer
Speaker 1: to all the currency was they still need the banking
Speaker 1: system to get it through, and if if they remain
Speaker 1: unbanked and the banks are refused to deal with crypto, etcetera,
Speaker 1: then the whole thing collapses in on itself. Anyway, Well, yeah, indeed,
Speaker 1: I mean it was always our view that it would
Speaker 1: be regulated via the FIAT on ramps and off ramps
Speaker 1: ultimate und your coin based account from somewhere, and that
Speaker 1: the banks of course would fully cooperate with the regulator
Speaker 1: and in sort of giving full visibility of that. So
Speaker 1: that was how it was going to going to come.
Speaker 1: So yeah, I think fascinating topic, but absolutely no plans
Speaker 1: to revisit revisit bitcoin in the future. Excellent. So all
Speaker 1: those of you who like to send me hate mail
Speaker 1: on Twitter and that kind of thing about how I'm
Speaker 1: not keen on crypto and bitcoin can now send them
Speaker 1: to Duncan. Duncan was your Twitter handle, So you can
Speaker 1: accept my hate mail for a couple of weeks. Yeah, pass,
Speaker 1: all right, Well I'm putting your Twitter handle in the
Speaker 1: writ up for this podcast, so that it all goes
Speaker 1: directly to you. Okay, although just everyone is. I do
Speaker 1: still hold some bitcoin in my coin based account. No
Speaker 1: idea how to get it out, but it's in the
Speaker 1: worth lesson it was well more than it was, depends
Speaker 1: how you look at it, right, So onto the real
Speaker 1: thing gold. And by the way, one of the things
Speaker 1: that John and I always love about bitcoin is the
Speaker 1: way that every time someone tries to make a picture
Speaker 1: of bitcoin, they do it with a gold coin with
Speaker 1: a B on it. I love that. One of the
Speaker 1: great ironies. Yeah, one of the gies. So gold gold
Speaker 1: is just fascinating. I've always been a sort of gold
Speaker 1: gold bug by nature. But it's very unreliable, isn't it.
Speaker 1: So it's hard to know if it had a good
Speaker 1: year last year because on the one hand, you could say, well,
Speaker 1: we had a war in Ukraine, still of a war
Speaker 1: in Ukraine, we had realized inflation at fourty year highs.
Speaker 1: Why was gold not incredibly strong because it was flat
Speaker 1: in dollars, modern pounds and pounds exactly. So it did
Speaker 1: work in other currencies, definitely worked if you measured gold
Speaker 1: and bitcoin the but then the other the other way.
Speaker 1: Of looking at it as well, interest rates went up
Speaker 1: five percent or four percent and gold was flat. So
Speaker 1: that's actually a great performance because you would expect the
Speaker 1: rising opportunity cost to be very negative for gold. But
Speaker 1: I think zooming out a little bit just knowing that
Speaker 1: if you hold gold in your portfolio it will be unreliable.
Speaker 1: It has become a part of many multi asset portfolios,
Speaker 1: including the Rougher portfolio, which means I think it's correlation
Speaker 1: to risk assets has become higher than the fundamentals deserve.
Speaker 1: And what I mean by that is, as we saw
Speaker 1: in twenty twenty in the COVID crash, when markets get liquidated,
Speaker 1: gold often gets caught up in that because things like
Speaker 1: risk parity portfolios that are or vall targeting portfolios become
Speaker 1: forced sellers of everything in their book, regardless of the fundamentals.
Speaker 1: So but I think zooming out a little bit from
Speaker 1: all that sort of market technical noise. We have seen
Speaker 1: a potentially game changing event in the war in Russia.
Speaker 1: If you are now not just a Russian, but anyone
Speaker 1: who might be perceived to be a bad actor by
Speaker 1: the West. The confiscation of Russian sets that we saw
Speaker 1: all across the West, you know, bank deposits in London,
Speaker 1: Geneva or New York. We're just taken. Then there's a
Speaker 1: huge incentive now for you to hold your wealth in
Speaker 1: physical gold in either close to you or in a
Speaker 1: non Western location. Also, I suppose that a similar angle.
Speaker 1: There's a lot of news this week about the rewiring
Speaker 1: of the global monetary system. So that's a fancy phrase.
Speaker 1: What does that mean. It means the Middle East and
Speaker 1: China trying to denominate their trade in currency other than
Speaker 1: dollars or maybe euros. So why are China buying oil
Speaker 1: from the Ue priced in dollars when they could do
Speaker 1: it in yuan or they could do it in gold.
Speaker 1: And I think that sort of pivot in the currency
Speaker 1: of trade towards gold or maybe partly gold is an
Speaker 1: additional positive. Also, very simply, the cost of extracting gold
Speaker 1: just gets ever higher, So wages are going up, Permitting
Speaker 1: is more impossible than ever, capital equipment is more expensive.
Speaker 1: Oil is a big input cost, so the cost of
Speaker 1: extraction goes up, So the cost of gold probably has
Speaker 1: to go up in the long term too. So behind
Speaker 1: all the monetary conversation about well, whether the gold is money,
Speaker 1: whether the gold is of money, the extent which it sold,
Speaker 1: its value long term, etcetera. There is also the same
Speaker 1: supply dynamic. Absolutely, this isn't all just theory. I should
Speaker 1: say we have seen a huge increase in global central bank,
Speaker 1: particularly non western central banks since the war in Ukraine started.
Speaker 1: We have the data on this that there are big
Speaker 1: institutional buyers of gold in the market. And there's the
Speaker 1: old sort of famous trope that one ounce of gold
Speaker 1: has over the last five hundred years always been able
Speaker 1: to buy a saval row suit on average, And of
Speaker 1: course the type the style of the saval row suit
Speaker 1: has changed over the last five hundred years. But that
Speaker 1: that's the that's the saying. And now what two thousand dollars?
Speaker 1: You wouldn't get a salvo row suits for two thousand dollars,
Speaker 1: So that was that. You know what a saval row
Speaker 1: suit costs? What does it cost last time you went
Speaker 1: to get a suit made on several row? What is that? Duncan?
Speaker 1: I'm afraid I don't. I don't have the budget for
Speaker 1: that or the desire for that. There is a funny
Speaker 1: story about that, actually that Jonathan Ruffer, our founder UM,
Speaker 1: was was once interviewed in the Ft and I think
Speaker 1: it was Lunch with the Ft or something like that,
Speaker 1: and the article with the sort of usual fluff around
Speaker 1: it said Jonathan sat resplendent in his empire wearing a
Speaker 1: fine Salvo row suit. The reality was it was a
Speaker 1: sort of Mark and Spencers. You can stick it in
Speaker 1: the watching machine. So it's all about it's all about
Speaker 1: all about perception. Yeah, once one answer, Gold, We'll thank
Speaker 1: you a long way in the Mark and Spencers closed department.
Speaker 1: Even now, okay, let me ask you one last guard
Speaker 1: and then if I was going to make you invest
Speaker 1: in one thing right now, um and nothing else, and
Speaker 1: I wasn't going to let you touch that one thing
Speaker 1: for you're quite young, Let's make it twenty years, Thank you, Mary.
Speaker 1: What would it be my pleasure for twenty years? Twenty?
Speaker 1: I can make it ten if it's easier for you.
Speaker 1: But as I say, you know you're you're young. Yeah,
Speaker 1: so I think when you when you start talking about
Speaker 1: time horizons as long as twenty years, then that the
Speaker 1: power of the base rate, sort of the base effect
Speaker 1: takes takes over. So I would probably say something like
Speaker 1: um uk uk small caps or Japanese equities. If you
Speaker 1: made it ten years, I would I would take I
Speaker 1: would take energy, energy or commodity equities. And as you
Speaker 1: and if I made it five years, gold, um, I'll
Speaker 1: still I'll still take energy or commodity equities over it
Speaker 1: over five years. Okay, that sort of issued emphasized. That
Speaker 1: is a that is a return maximizing answer. And actually
Speaker 1: at rougher what we what we prefer to do. Rather
Speaker 1: your most investors go about return maximizing. How can I
Speaker 1: find all my best ideas and then maybe I'll sprinkle
Speaker 1: some hedges over the top and the hope that I
Speaker 1: don't lose my shirt. Our approaches minimax regret, which is
Speaker 1: borrowing a phrase from from Ben Hunt. So we're minimizing
Speaker 1: the probability of our maximum regret. We're trying first and
Speaker 1: foremost to not lose money, and then once we've comforted
Speaker 1: ourselves that we've arranged that, then we decide how much
Speaker 1: risk to take. So if I did it with my
Speaker 1: minimax regret hat on, I think it's very hard to
Speaker 1: beat either US tips or UK inflation on link bonds.
Speaker 1: If you're a UK taxpayer, Okay, that's great. So we've
Speaker 1: got the no Regret portfolio, and we've got the Duncan
Speaker 1: wants to make some money. Yeah fees to pay for Yeah,
Speaker 1: excellent two A clip portfolios. Dunk it so much for
Speaker 1: joining us today. We really appreciate it, and we'll be
Speaker 1: back and back in twenty years to see how it's going. Yeah,
Speaker 1: thank you, Aaron please for having me. Thanks for listening
Speaker 1: for this week's Marion Jok's Money. We will be back
Speaker 1: next week in the meantime. If you like our new show,
Speaker 1: rate review and subscribe wherever you listen to your podcasts.
Speaker 1: This episode was hosted by me Marion Sumset Web. It
Speaker 1: was produced by Samasati. Additional editing by Blake Maple's special
Speaker 1: thanks to Duncan mckinness and to John steppec hate mail
Speaker 1: for them as suggested earlier, and finally, our weekly reminded
Speaker 1: to sign up to John's daily newsletter Money distilled the
Speaker 1: linkage in the show notes and I know you will
Speaker 1: enjoy it, particularly if you were interested in house prices,
Speaker 1: because John is very interested in house prices