WEBVTT - Where to Invest $1 Million Right Now

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, Radio News. Welcome to Merin Talks

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<v Speaker 1>Your Money, the personal finance edition of Merin Talks Money.

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<v Speaker 2>In these bonus.

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<v Speaker 1>Podcasts, we talk about the best strategies for making the

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<v Speaker 1>most of your money. I'm meren Zumset Web and this

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<v Speaker 1>week we're back with another installment of Bloomberg Welt's Where

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<v Speaker 1>to Invest series. This time we're asking the real question,

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<v Speaker 1>where to invest one million dollars? Last time it was

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<v Speaker 1>a mere one hundred thousand, So this time we are

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<v Speaker 1>going big up with us again Bloomberg Personal Finance and

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<v Speaker 1>Wealth reporter Susanne Willie, who joins us from New York.

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<v Speaker 2>Hesusan, Hey, Maren, how are you. I'm good? Thank you.

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<v Speaker 1>Now listen, You've been all over the place recently. You've

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<v Speaker 1>written this great story about how to invest a million dollars,

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<v Speaker 1>but you've also been at a big conference for the

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<v Speaker 1>financial advisors and wealth managers in Miami Beach.

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<v Speaker 2>You love Miami Beach.

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<v Speaker 1>You know I spent all the entire year when I

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<v Speaker 1>was eighteen on Miami Beach. Wow, I know those are

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<v Speaker 1>the days. Tell you about that another time. That's not

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<v Speaker 1>for this podcast. Different different subject, different subjects. Anyway, they

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<v Speaker 1>were in Miami Beach.

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<v Speaker 2>What did you hear that?

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<v Speaker 3>You know, I heard a lot of I didn't hear

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<v Speaker 3>a lot of raw raw us, I guess unsurprisingly. I

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<v Speaker 3>heard a lot about international and you will not be

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<v Speaker 3>shocked to hear that a lot of people were talking

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<v Speaker 3>about private markets, private capital, private equity, had a vet

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<v Speaker 3>how to do your due diligence of private market investments,

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<v Speaker 3>how to do your vetting of investment managers, and also

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<v Speaker 3>you know a lot of bonds, which was sort of refreshing.

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<v Speaker 3>The one area I would say did get a lot

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<v Speaker 3>of attention was that Michael Saylor of Strategy showed up

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<v Speaker 3>all just in black, looking like some sort of you know,

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<v Speaker 3>rock star.

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<v Speaker 1>That's a danger signal, just before we say anything else

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<v Speaker 1>when people turn up all dressed in black like they

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<v Speaker 1>are a rock star and they kind of not actually

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<v Speaker 1>rock star.

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<v Speaker 2>For me, that's a that's a red flag.

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<v Speaker 3>It is to me too, you know. And then there

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<v Speaker 3>was another sort of famous tech analyst for Webrish Securities

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<v Speaker 3>who was all in like I don't know, neon colors

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<v Speaker 3>and colorful sneakers.

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<v Speaker 1>And yes, what did they say?

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<v Speaker 3>Well, you know, they were preaching you know, the gospel

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<v Speaker 3>of bitcoin in in crypto. There was nothing downbeat about

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<v Speaker 3>it at all. And actually the Michael Saylor panel got

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<v Speaker 3>the biggest, you know, standing on the room audience, a

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<v Speaker 3>lot of young guys in there on the beach in

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<v Speaker 3>their you know, polos and shorts and flip flops, and

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<v Speaker 3>he was just saying that he called bitcoin the most

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<v Speaker 3>successful commodity and like the history of you know, mankind,

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<v Speaker 3>and you know, a lot of superlatives like that, as

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<v Speaker 3>you would expect when I privately talked with people at

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<v Speaker 3>the conference, just in a bunch of little sit downs,

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<v Speaker 3>I would ask them this sort of silly question but

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<v Speaker 3>like bitcoin or gold, and no one said, I know,

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<v Speaker 3>I'm sorry, I'm sorry, Mary give a question. It was

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<v Speaker 3>a flawed question because bitcoin is not a hedge, you know,

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<v Speaker 3>as we know in down times in twenty twenty two.

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<v Speaker 2>Et cetera.

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<v Speaker 3>Center, So it was a flawed question. But everyone was

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<v Speaker 3>gold and everyone was saying, you know, bitcoin maybe is

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<v Speaker 3>a hedge in terms of like a fomo hedge, and

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<v Speaker 3>maybe it's what they used to judge excess liquidity in

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<v Speaker 3>the system, whereas consumer sentiment. But you know, one man,

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<v Speaker 3>Brian Belski at a BML Capital Markets said, you know,

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<v Speaker 3>he wouldn't even call it an asset. So there were

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<v Speaker 3>a lot of true believers mixed in there and then

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<v Speaker 3>a lot of more skeptical people that I spoke with.

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<v Speaker 1>Okay, and you mentioned that one of the people you

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<v Speaker 1>spoke to, Emily Rowland, was a bit not that into things.

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<v Speaker 1>Is all about it you've done, and that maybe should

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<v Speaker 1>just hang out in high quality in the US.

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<v Speaker 2>Instaid she was.

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<v Speaker 3>I mean, she's not raw raw US large caps for sure.

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<v Speaker 3>She's saying they seem price to perfection and that you know,

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<v Speaker 3>when you're looking at like twenty times forward earnings, that's

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<v Speaker 3>not exactly a screaming value. But she was also saying that,

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<v Speaker 3>you know, she didn't feel like Europe was really Europe

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<v Speaker 3>is a trade on sort of banks and industrials, and

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<v Speaker 3>she was saying it's a very cyclical trade, whereas you know,

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<v Speaker 3>the US may be sort of price for perfection, but

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<v Speaker 3>it has higher quality earnings. So if people are worried

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<v Speaker 3>about like a got growth slowdown, she was saying, don't

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<v Speaker 3>you want to be in the place with the highest

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<v Speaker 3>quality earnings. So she was sort of the rare person

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<v Speaker 3>to not be positive on Europe. Gabriella Santos that I

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<v Speaker 3>talked to, who's the chief market strategist at JP Morgan

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<v Speaker 3>Investment Management. She was very pro Europe and pro Japan

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<v Speaker 3>based on, you know, starting valuations based on fundamental changes.

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<v Speaker 3>She had a really fun fact which was that since

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<v Speaker 3>twenty twenty two, the MSCAI Europe and MSCAI Japan had

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<v Speaker 3>outperformed the S and P five hundred if you took

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<v Speaker 3>out Nvidia, which I thought was an interesting little factoid.

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<v Speaker 3>And so she was just she's very positive on the

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<v Speaker 3>fundamentals for Europe and Japan going forward.

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<v Speaker 2>It's interesting.

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<v Speaker 1>I mean, I'm thinking, just thinking, is you're speaking about

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<v Speaker 1>what Emily Rowland said about how you should be in

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<v Speaker 1>the highest quality companies that you can find if you're

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<v Speaker 1>concerned about a slowdown or if you're concerned about any global.

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<v Speaker 2>Difficulties on certainty, et cetera.

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<v Speaker 1>And all I can think of when someone says something

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<v Speaker 1>like that is Microsoft two thousand, when I think.

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<v Speaker 2>It fell over sixty percent in a year.

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<v Speaker 3>Yeah, I don't know what.

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<v Speaker 1>And you would have said at the beginning of two thousand, God,

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<v Speaker 1>things are little ropy, everything's too expensive terrible stuff might happen,

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<v Speaker 1>So I'm going to go as high quality as I

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<v Speaker 1>can go, and you still would have lost fifty sixty.

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<v Speaker 2>Percent of your money in a years.

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<v Speaker 1>When people say that, When people give this high quality argument,

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<v Speaker 1>I slightly think to myself, do you know what I

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<v Speaker 1>would get out of right now?

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<v Speaker 2>Is that high quality stuff?

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<v Speaker 3>Interesting? Because too much money has raised into it already.

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<v Speaker 1>Yeah, that's in the price, but it's more than in

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<v Speaker 1>the price, and that makes it not safe anymore.

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<v Speaker 3>I think that's a great argument. I mean, she did

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<v Speaker 3>say that she was in the US markets more interested

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<v Speaker 3>in mid cap stocks, saying that they're about you know,

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<v Speaker 3>thirty percent a discount to you know, the large cap universe,

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<v Speaker 3>and that of course they have you know, stronger balance sheets,

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<v Speaker 3>less debt load, et cetera, et cetera than small caps,

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<v Speaker 3>So she at least wasn't really pounding the table for

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<v Speaker 3>large caps. She was going a little down the capital spectrum.

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<v Speaker 2>Still interesting, isn't it?

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<v Speaker 1>We better get onto the million dollars because you know,

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<v Speaker 1>I know everyone out there is thinking, well, they have

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<v Speaker 1>bitcoming Microsoft, But what do I do with my spare

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<v Speaker 1>million dollars? Because that's the kind of listeners. We have Fatisan,

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<v Speaker 1>that's the people. What do I do with my spare million?

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<v Speaker 3>I asked myself that all the time, all the time.

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<v Speaker 1>Now, what was the best What was the best answer

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<v Speaker 1>you got this time?

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<v Speaker 2>Okay?

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<v Speaker 3>I thought the best answer is this probably one that

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<v Speaker 3>you will like. Was Andrea Desceenso DiCenso, who is a

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<v Speaker 3>portfolio manager and strategist at Loomis Sales, said that she

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<v Speaker 3>would go with a sixty forty portfolio, but not as

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<v Speaker 3>you would traditionally think of it. She would put forty

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<v Speaker 3>percent in europe European equities if I stay forty, Yeah,

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<v Speaker 3>the forty percent would go there, and then the sixty

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<v Speaker 3>percent would go in a basket of global fixed income.

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<v Speaker 3>And the only reason she wasn't higher in European equities

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<v Speaker 3>was because she sees such an advantage in bonds right

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<v Speaker 3>now sort of globally. So that was interesting to me

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<v Speaker 3>because I don't think I've talked to anyone who has

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<v Speaker 3>put that much into European equities and a sixty forty portfolio.

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<v Speaker 2>Yeah, actually slipper exactly exactly.

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<v Speaker 1>So it's really interesting to see someone out there in

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<v Speaker 1>the US who would like to remove not just home bias,

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<v Speaker 1>but all home and go abroad. Although I'm interested that

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<v Speaker 1>she thinks that fixed income is that safe in what

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<v Speaker 1>looks to me like a inflation rising interest rate environment,

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<v Speaker 1>I'm not sure that I would have gone sixty percent

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<v Speaker 1>fixed income.

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<v Speaker 2>That is feisty too.

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<v Speaker 3>Yeah, she does have it in a wide it's pretty

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<v Speaker 3>well diversified. You know some asset back yea ten percent

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<v Speaker 3>in US and European investing, great corporate bonds, twenty in

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<v Speaker 3>high yields, and the last twenty percent she put an

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<v Speaker 3>emerging market corporates and sovereigns. So she's placing a pretty

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<v Speaker 3>broad broad bed there.

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<v Speaker 1>Interesting And do you know what she is my favorite,

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<v Speaker 1>by the way, you're right, And she's particularly my favorite

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<v Speaker 1>for her alternative idea because you know, you was last.

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<v Speaker 1>If it was a non financial thing or something a

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<v Speaker 1>little alternative, what would you do? And she said, you know,

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<v Speaker 1>I'd spend that money going somewhere amazing every weekend with

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<v Speaker 1>a different friend. I just constantly cycle my friends and places.

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<v Speaker 1>And it went to her sister. And for trip number one,

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<v Speaker 1>it's gonna take more than a weekend. They've got to

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<v Speaker 1>Argentina and Chilean and hike around Patagonia, and that's something

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<v Speaker 1>that my husband and daughter just did and I forget

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<v Speaker 1>that is worth a lot. So this is a woman

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<v Speaker 1>after my own heart.

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<v Speaker 3>Although I didn't on that trip me too, that was

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<v Speaker 3>my favorite as well. I mean one person mentioned buying

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<v Speaker 3>a Picasso drawing, which apparently you might be able to

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<v Speaker 3>get for about a million bucks.

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<v Speaker 2>Oh goody. Yeah, I don't know. I'm a bit nervous

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<v Speaker 2>about the art market actually.

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<v Speaker 1>But.

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<v Speaker 3>Interesting another segment.

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<v Speaker 1>Another it did another segment, but you know, it's another

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<v Speaker 1>it's another thing that with high interest rates a piece

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<v Speaker 1>of art is worth less than it is with low

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<v Speaker 1>interest rates. And you begin there are a few cracks

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<v Speaker 1>developing in the art market that I can see. So

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<v Speaker 1>maybe we'll come back that another time. What else did

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<v Speaker 1>we get? I was interested in Anne Barry who talked

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<v Speaker 1>about public markets being expensive and therefore maybe go into

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<v Speaker 1>into private markets. And she talks about private credit.

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<v Speaker 3>Yes, Anne Barry, who's the founder of thread natal Ventures.

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<v Speaker 3>She was sort of along with another woman in the package.

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<v Speaker 3>She was talking about areas where there have been dislocations

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<v Speaker 3>and it's sort of interesting in this time of excess

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<v Speaker 3>that we may be in in the US that they

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<v Speaker 3>were talking about areas when so much money flowed into

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<v Speaker 3>the commercial real estate markets and venture markets and due

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<v Speaker 3>to low interest rates back in like twenty twenty one,

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<v Speaker 3>twenty one is between twenty two. So she was looking

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<v Speaker 3>back and saying, you know, there are opportunities when there's

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<v Speaker 3>a lot of pressure on PE funds to you know,

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<v Speaker 3>exit these investments that they've had that usually hold them

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<v Speaker 3>for five to seven years. It's getting on sort of

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<v Speaker 3>six to eight. So she was saying there's a lot

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<v Speaker 3>of pressure and getting these these exits happening, and that

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<v Speaker 3>that can lead and that that can lead to some

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<v Speaker 3>very good opportunities for private capital because all of these

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<v Speaker 3>deals require private capital. So you know, as the industry

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<v Speaker 3>exits these deals, you know, there's a ton of dry

0:11:03.120 --> 0:11:05.360
<v Speaker 3>powder sitting out there in global PE funds, so they

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<v Speaker 3>have to go out and spend it, and when they do,

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<v Speaker 3>they'll be using private credit to some degree.

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<v Speaker 1>Yeah, it's interesting, isn't I Mean it feels like we're

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<v Speaker 1>in the whole industry is in a little bit of

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<v Speaker 1>a paralysis. You know, the deal that they want to

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<v Speaker 1>exit from the reason they can't exit from them in

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<v Speaker 1>the main is because the price is wrong, So they

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<v Speaker 1>need to see something of a price reset, and private

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<v Speaker 1>credit don't have a role in that.

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<v Speaker 3>Yes, that's true, and I don't know with the volatility

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<v Speaker 3>that we're seeing now. You know, people thought that this

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<v Speaker 3>window might open.

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<v Speaker 1>Well, this was supposed to be the year of IPOs,

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<v Speaker 1>wasn't it again? Yes, yet another year of IPOs. It

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<v Speaker 1>hasn't worked out. And I remember reading at the beginning

0:11:43.640 --> 0:11:45.040
<v Speaker 1>of the year that this would be the year of

0:11:45.360 --> 0:11:48.439
<v Speaker 1>private equity IPOs and the great exit year, and that

0:11:48.559 --> 0:11:50.400
<v Speaker 1>was all going to work out really well because what

0:11:50.480 --> 0:11:53.440
<v Speaker 1>with valuations being so high in the listed market, that

0:11:53.480 --> 0:11:55.959
<v Speaker 1>translated through into peer companies in the private market and

0:11:56.040 --> 0:11:57.559
<v Speaker 1>may be able to get out of these great prices

0:11:57.840 --> 0:12:00.000
<v Speaker 1>twich the answer today is a works.

0:12:00.559 --> 0:12:04.079
<v Speaker 3>Yes, And I mean maybe there's some opportunities in that

0:12:04.120 --> 0:12:08.000
<v Speaker 3>sort of situation and all the dislocation people are saying,

0:12:08.040 --> 0:12:11.240
<v Speaker 3>you know, in times of distress, there's always opportunity, right,

0:12:11.840 --> 0:12:12.600
<v Speaker 3>So you know.

0:12:13.000 --> 0:12:18.080
<v Speaker 1>Speaking of which, you had more of pape from Burnsteinn

0:12:18.120 --> 0:12:20.839
<v Speaker 1>Private Wealth Management talking about as something very similar in

0:12:20.920 --> 0:12:23.760
<v Speaker 1>terms of interest rates commercial commercial real estate, which obviously

0:12:23.800 --> 0:12:26.440
<v Speaker 1>has had a nightmare time with rising interest rates as well.

0:12:26.559 --> 0:12:29.640
<v Speaker 3>Yes, yes, very much so. And I mean her argument

0:12:29.679 --> 0:12:32.200
<v Speaker 3>was sort of similar that she thinks though that commercial

0:12:32.200 --> 0:12:35.280
<v Speaker 3>real estate prices have reset with a new reality, and so,

0:12:35.720 --> 0:12:37.520
<v Speaker 3>you know, with a lot of debt coming do and

0:12:37.600 --> 0:12:39.480
<v Speaker 3>lenders right now are going to be less likely to

0:12:39.520 --> 0:12:42.160
<v Speaker 3>offer the attractive terms that they did when they originally

0:12:42.240 --> 0:12:44.640
<v Speaker 3>made the loans. There are going to be solid properties

0:12:44.640 --> 0:12:49.040
<v Speaker 3>that have issues with their capital structure, and you know,

0:12:49.559 --> 0:12:53.079
<v Speaker 3>that may make them available at a discount. And she

0:12:53.080 --> 0:12:59.199
<v Speaker 3>was appointed to multifamily housing in particular where multifamily areas

0:12:59.200 --> 0:13:02.320
<v Speaker 3>where multifamily housing starts expected to drop, like some you

0:13:02.320 --> 0:13:05.000
<v Speaker 3>know in the South, that could be an interesting place

0:13:05.040 --> 0:13:07.640
<v Speaker 3>to put capital. And I mean she also made the

0:13:07.640 --> 0:13:10.599
<v Speaker 3>point that of course, the ability to raise rents, you know,

0:13:10.720 --> 0:13:13.120
<v Speaker 3>means that you have something of a hedge against inflation.

0:13:14.200 --> 0:13:17.640
<v Speaker 1>Yeah, yeah, and she was was she was she the

0:13:17.640 --> 0:13:19.920
<v Speaker 1>other one who was also interested in buying art? Was

0:13:19.920 --> 0:13:21.960
<v Speaker 1>that her alternates as well?

0:13:22.360 --> 0:13:24.680
<v Speaker 3>Yes, Marin, she was the one who was interested in

0:13:24.720 --> 0:13:25.480
<v Speaker 3>buying art.

0:13:25.679 --> 0:13:27.760
<v Speaker 1>Because there was one there was one who specifically went

0:13:27.800 --> 0:13:29.760
<v Speaker 1>for a Pocanso, and then there was someone else who

0:13:29.800 --> 0:13:33.400
<v Speaker 1>said they can they collected contemporary art, yes.

0:13:33.200 --> 0:13:38.040
<v Speaker 3>Yes, yeah, right, as Anne Berry collects contemporary art, and

0:13:38.120 --> 0:13:40.760
<v Speaker 3>an artist she said she loves and hasn't bought yet

0:13:40.800 --> 0:13:47.079
<v Speaker 3>is Rebecca Manson, who creates these sort of wall sculptures

0:13:48.280 --> 0:13:53.760
<v Speaker 3>and ceramic wall sculptures. They're very fascinating. They're like butterfly wings,

0:13:53.800 --> 0:13:57.960
<v Speaker 3>and I'm very hard to describe. But yes, she's not buying,

0:13:58.200 --> 0:14:01.040
<v Speaker 3>particularly with appreciation in mind, which is always what they

0:14:01.040 --> 0:14:02.800
<v Speaker 3>say you should do about it. Oh, buy what you love,

0:14:02.880 --> 0:14:04.640
<v Speaker 3>don't buy it thinking it's going to appreciate.

0:14:05.040 --> 0:14:11.000
<v Speaker 1>So susan trip to Patagonia or ceramic wool sculpture with butterfly.

0:14:10.600 --> 0:14:19.840
<v Speaker 3>Wings, I don't know, Okay. I loved Andrea Decenzo's idea

0:14:19.960 --> 0:14:24.240
<v Speaker 3>about traveling every weekend with family and friends to different areas,

0:14:24.280 --> 0:14:26.560
<v Speaker 3>so I have a few I would travel too. I

0:14:26.560 --> 0:14:29.680
<v Speaker 3>would have a sister's weekend by two sisters in Newport's,

0:14:30.240 --> 0:14:32.760
<v Speaker 3>New York, which isn't very exotic, but there's a beautiful

0:14:32.760 --> 0:14:34.960
<v Speaker 3>place up there called Mohawk Mountain House where you can

0:14:35.040 --> 0:14:35.480
<v Speaker 3>go hiking.

0:14:35.520 --> 0:14:36.080
<v Speaker 2>I go there.

0:14:36.720 --> 0:14:39.800
<v Speaker 3>Internationally, I've never been to Amsterdam, dying to go there.

0:14:39.960 --> 0:14:42.200
<v Speaker 3>I'd grab some friends and go there. There's no I mean,

0:14:42.240 --> 0:14:44.280
<v Speaker 3>I want to go to Santa Fe, New Mexico. What

0:14:44.360 --> 0:14:45.440
<v Speaker 3>about you, where would you go?

0:14:45.760 --> 0:14:47.640
<v Speaker 1>Well, pretty much anyway, you know in the UK at

0:14:47.680 --> 0:14:50.120
<v Speaker 1>the moment with so heavily taxed and you know, and

0:14:50.240 --> 0:14:52.960
<v Speaker 1>let's talk about wealth taxes and taxia pension and taxing

0:14:52.960 --> 0:14:55.040
<v Speaker 1>theirs and taxing that. Then everyone I talked to us

0:14:55.080 --> 0:14:56.640
<v Speaker 1>just like, yeah, whatever, I'm gonna spend the lot.

0:14:57.240 --> 0:15:00.920
<v Speaker 2>Die Broke is on the move.

0:15:00.960 --> 0:15:02.760
<v Speaker 1>But I tell you, I do really want to go

0:15:02.800 --> 0:15:05.520
<v Speaker 1>to Chili and Patagonia. Everything my my husband and my

0:15:05.600 --> 0:15:08.760
<v Speaker 1>daughter told me about it. It sounds absolutely amazing. Left me

0:15:08.800 --> 0:15:10.520
<v Speaker 1>behind this time, but I think I can try and

0:15:10.720 --> 0:15:12.040
<v Speaker 1>you know, get another trip out of them.

0:15:12.600 --> 0:15:14.880
<v Speaker 2>That's great. So there we go.

0:15:15.000 --> 0:15:17.760
<v Speaker 1>Everybody, if you have a million dollars, just spend it.

0:15:18.160 --> 0:15:20.600
<v Speaker 1>Just spend it. That extra million dollars that is, just

0:15:20.640 --> 0:15:23.560
<v Speaker 1>spend it. Spend it on mainly travel. Thanks Susan.

0:15:24.240 --> 0:15:26.120
<v Speaker 3>Pick up a little art on while you're traveling.

0:15:26.760 --> 0:15:29.440
<v Speaker 1>Yeah, maybe travel first and art if there's anything left

0:15:29.440 --> 0:15:35.640
<v Speaker 1>over from you a million bird, I like that. Thanks

0:15:35.680 --> 0:15:37.720
<v Speaker 1>for listening to this week's Maren Talk to Your Money.

0:15:37.800 --> 0:15:39.960
<v Speaker 1>If you like our share, rate, review and subscribe wherever

0:15:39.960 --> 0:15:41.720
<v Speaker 1>you listen to podcasts. Also, if you sure to follow

0:15:41.760 --> 0:15:43.960
<v Speaker 1>me and John on exor Twitter at Maren at w

0:15:44.080 --> 0:15:46.720
<v Speaker 1>and John underscore Stappack and also Suzanne who is a

0:15:46.840 --> 0:15:50.440
<v Speaker 1>wealth Watch. This episode is produced by Sumersati, Production support

0:15:50.480 --> 0:15:53.080
<v Speaker 1>and sound design by Moses and Questions and comments on

0:15:53.120 --> 0:15:54.000
<v Speaker 1>this show and all.

0:15:53.880 --> 0:15:55.160
<v Speaker 2>Our shows always welcome.

0:15:55.320 --> 0:16:03.240
<v Speaker 1>Our show email is merin Money at Bloomberg dot net