WEBVTT - The End of a Volatile Week 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.960 --> 0:00:15.560 This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 0:00:15.600 --> 0:00:18.960 with Paul Sweeney. Join us each day for insight from 0:00:18.960 --> 0:00:23.160 the best in economics, finance, investment, and international relations. You 0:00:23.160 --> 0:00:26.520 can also watch the show live on YouTube. Visit the 0:00:26.520 --> 0:00:31.280 Bloomberg Podcast channel on YouTube to see the show weekday 0:00:31.280 --> 0:00:34.320 mornings from seven to ten am Eastern from our global 0:00:34.360 --> 0:00:39.000 headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 0:00:39.360 --> 0:00:42.920 or anywhere else you listen, and always I'm Bloomberg Radio, 0:00:43.080 --> 0:00:46.880 the Bloomberg Terminal and the Bloomberg Business App. Long ago 0:00:46.920 --> 0:00:50.600 and far away, there wasn't the Internet, there wasn't Adobe pdf. 0:00:51.159 --> 0:00:54.400 There was a guy pushing a trolley with paper research 0:00:54.480 --> 0:00:58.240 and it was literally half a hockey goal high. Buried 0:00:58.280 --> 0:01:01.360 in that on a given morning was twenty five or 0:01:01.400 --> 0:01:03.560 thirty pages from a firm called C. J. 0:01:03.760 --> 0:01:04.240 Lawrence. 0:01:04.760 --> 0:01:07.360 And my recollection is it was within a green ink. 0:01:07.440 --> 0:01:10.039 The titling was within a green ink. Yard. 0:01:10.080 --> 0:01:12.279 Denny Quick takes is in the same CJ. 0:01:12.440 --> 0:01:15.440 Lawrence Green and we are honored from the span of 0:01:15.480 --> 0:01:19.679 those multiple decades. Edyard Denny joins us this morning. I 0:01:19.720 --> 0:01:23.960 can't say enough about your Denny quick takes. It is 0:01:24.280 --> 0:01:28.319 the read to give you confidence and push away your 0:01:28.440 --> 0:01:31.800 fears of the stock market, ed Yard, Denny, what's there 0:01:31.840 --> 0:01:34.080 to be afraid of right now in the stock market? 0:01:36.040 --> 0:01:39.480 Well, I think evaluation is a bit of an issue. 0:01:40.160 --> 0:01:43.399 I've been forecasting fifty four hundred for the S and 0:01:43.440 --> 0:01:46.640 P five hundred by year end. My concern is we 0:01:46.720 --> 0:01:50.720 might get there by midyear or earlier. I'm forecasting six 0:01:50.800 --> 0:01:53.120 thousand for next year, and I'm concerned we might get 0:01:53.120 --> 0:01:55.800 there by your end. So I'd like to have a nice, 0:01:55.880 --> 0:01:58.600 leisurely bullen market here, not to something like we had 0:01:58.640 --> 0:02:00.800 in the late nineteen nineties. 0:02:01.280 --> 0:02:02.040 A guy at. 0:02:01.960 --> 0:02:04.400 Yale where you got your parchment, I think his name 0:02:04.440 --> 0:02:07.760 was Schiller, used to talk a lot about exuberance that 0:02:07.920 --> 0:02:12.040 was out there. What is the character of our exuberance 0:02:12.520 --> 0:02:15.760 within the Yardenni and Kampora bull market? 0:02:17.240 --> 0:02:20.520 Well, I think we can look back to the nineteen 0:02:20.600 --> 0:02:24.680 nineties as a possible model for the environment we're in. 0:02:25.360 --> 0:02:28.519 If that's the case, then the next question is are 0:02:28.560 --> 0:02:31.520 we in nineteen ninety nine or are we in. 0:02:31.440 --> 0:02:34.120 Something somewhat earlier. I think at this point. 0:02:34.040 --> 0:02:37.560 We're more like nineteen ninety six. Remember December fifth, nineteen 0:02:37.639 --> 0:02:41.480 ninety six when Alan Greenspan had that famous speech in 0:02:41.520 --> 0:02:43.600 which he did a hamlet on. 0:02:43.600 --> 0:02:46.240 Us and he said, you know, how do we know if. 0:02:46.040 --> 0:02:49.840 The market's irrationally exuberant? And I think we're at that 0:02:49.880 --> 0:02:52.840 point now where everybody seems to be asking is it 0:02:53.440 --> 0:02:55.880 rational exuberance or irrational exuberance? 0:02:56.440 --> 0:02:59.320 So ed, when you look at the elements within the market, 0:02:59.440 --> 0:03:03.239 what looks most rational, what looks most irrational? 0:03:05.080 --> 0:03:09.680 Well, the evaluation multiple on anything related to artificial intelligence 0:03:09.720 --> 0:03:14.560 certainly is very high. The so called Magnificent seven there 0:03:14.600 --> 0:03:17.000 are multiple has been very high, though they're becoming more 0:03:17.080 --> 0:03:21.320 rational actually because some of the Magnificent seven are so 0:03:21.440 --> 0:03:26.800 magnificent anymore. We've seen Apple underperform, We've seen Tesla underperformed. 0:03:26.840 --> 0:03:29.720 So it's it's a healthy thing to see that the. 0:03:29.639 --> 0:03:32.760 Market isn't just Willy Nearly going across the board and 0:03:32.800 --> 0:03:38.080 marking up these mega, these mega stocks, these magnificent seven. 0:03:39.400 --> 0:03:42.920 I think clearly outside of the stock market, Bitcoin has 0:03:42.920 --> 0:03:45.440 had a heck of a move I think it's having 0:03:45.480 --> 0:03:46.360 a heck of a move. 0:03:46.240 --> 0:03:47.360 Down this morning. 0:03:47.440 --> 0:03:52.680 But there's so many signs of speculative excesses, edge of Denny. 0:03:52.480 --> 0:03:53.520 Is it edge of fossil? 0:03:53.680 --> 0:03:57.200 Like me, do you believe that there's an underlying under bitcoin? 0:03:57.800 --> 0:04:00.280 Is it an actual tangible and vestment. 0:04:01.920 --> 0:04:04.320 Well, this will probably get a lot of people mad 0:04:04.360 --> 0:04:08.200 at me, but I mean well, and that is I 0:04:08.360 --> 0:04:09.760 view I. 0:04:09.800 --> 0:04:12.200 View bitcoin as digital tulips. 0:04:13.520 --> 0:04:15.480 In other words, it is kind of like what happened 0:04:15.520 --> 0:04:19.400 in Holland with the bubble in tulips. But there's a 0:04:19.480 --> 0:04:23.520 huge difference here which really presents the possibility of much 0:04:23.560 --> 0:04:27.280 higher upside which we've already seen. And that is the 0:04:27.320 --> 0:04:31.120 notion that it's a global market and it's open twenty 0:04:31.120 --> 0:04:35.040 four by seven, and we're talking about tens of thousands, 0:04:35.120 --> 0:04:38.960 hundreds of thousands, millions of people playing in the bitcoin marketplace. 0:04:39.000 --> 0:04:41.560 So I have no idea how high I could go. 0:04:41.720 --> 0:04:43.600 I have no idea how low it can go. 0:04:44.760 --> 0:04:48.680 I'm an old fashioned guy like you are. I need earnings. 0:04:48.680 --> 0:04:51.880 I need I need coupons. I need something I can value. 0:04:51.880 --> 0:04:53.880 I need rents, something I can value, and I don't 0:04:53.920 --> 0:04:54.800 have that with bitcoin. 0:04:55.360 --> 0:04:59.800 You know, digital tulips that have a structure of a 0:05:00.400 --> 0:05:03.200 investment tool underneath them, with all those ETFs, right and 0:05:03.240 --> 0:05:06.440 also a digital tool, a digital tool up that is 0:05:06.480 --> 0:05:11.120 going to also have what's the verb happening to? Have 0:05:11.800 --> 0:05:13.240 you went to the fall? 0:05:13.920 --> 0:05:17.760 H Charlotte Greifeld was on yesterday and we're talking polka 0:05:17.800 --> 0:05:20.479 dot and doge and we're trying I'm trying to have 0:05:20.480 --> 0:05:27.080 a serious conversation with miss Haverford about Polka dot and doge. 0:05:27.480 --> 0:05:28.320 This is nuts. 0:05:28.640 --> 0:05:31.240 This is nuts. Okay, So doctor ed, let me go 0:05:31.320 --> 0:05:33.239 back to bitcoin because there are a lot of things, 0:05:33.480 --> 0:05:36.720 a lot of market structures to support this digital coin 0:05:36.800 --> 0:05:40.600 right now, when we see the happening in April, are 0:05:40.600 --> 0:05:42.919 you going to do you anticipate any kind of correlation 0:05:43.080 --> 0:05:44.960 with what we see in equities because a lot of 0:05:45.000 --> 0:05:48.880 that bullish sentiment tied to bitcoin has spilled over into 0:05:48.880 --> 0:05:51.360 equities or vice versa. 0:05:51.440 --> 0:05:54.440 Well, I think you're right, and I think where Bitcoin's 0:05:54.480 --> 0:05:56.839 and enthusiasm is spilled over its cooling into gold. 0:05:56.880 --> 0:05:58.240 I mean, gold was. 0:05:58.279 --> 0:06:00.120 Kind of sitting there doing nothing, and then all of 0:06:00.120 --> 0:06:03.640 a sudden, maybe some of the bitcoin enthusiasts concluded that 0:06:03.680 --> 0:06:06.720 they haven't own enough of it and it's too expensive 0:06:06.800 --> 0:06:09.920 and they want to look for other areas to diversify. 0:06:10.360 --> 0:06:11.559 So gold has been a winner. 0:06:11.600 --> 0:06:16.360 The gold mining showers haven't done as well. But look, 0:06:16.600 --> 0:06:18.680 I have to admit I've got some fomo every now 0:06:18.720 --> 0:06:21.320 and then when I see this bitcoin going up to 0:06:21.360 --> 0:06:24.160 seventy thousand, I knew about. 0:06:24.040 --> 0:06:26.320 A dollar at ten dollars. I knew it about it 0:06:26.400 --> 0:06:28.839 one hundred at one thousand. Why did I just buy 0:06:28.880 --> 0:06:29.279 a couple? 0:06:29.520 --> 0:06:32.719 And you have a huge response on YouTube this morning worldwide. 0:06:32.720 --> 0:06:35.279 People are listening to Edward Yard Denny. I want to 0:06:35.279 --> 0:06:37.560 go to the X axis, to thetter, whether it's just 0:06:37.560 --> 0:06:40.000 a normal X axis or dare I say we. 0:06:39.920 --> 0:06:40.760 Go log rhythmic. 0:06:41.040 --> 0:06:43.960 You've had the courage to go out to SPX six thousand, 0:06:44.480 --> 0:06:47.000 and I think you've put a twenty five handle on it. 0:06:47.400 --> 0:06:51.359 Why can't add your Denny model out to twenty twenty six? 0:06:52.800 --> 0:06:54.640 Oh, actually I have already. 0:06:55.200 --> 0:06:58.680 I'm glad you asked me because just recently we were 0:06:58.880 --> 0:07:02.800 talking about sixty five hundred in terms of earnings, the 0:07:02.880 --> 0:07:07.719 underlying earnings last year we said two twenty five, and 0:07:07.960 --> 0:07:09.320 there were a lot of people who are using one 0:07:09.279 --> 0:07:11.280 to eighty for earnings per share for the S and 0:07:11.320 --> 0:07:14.920 P five hundred, and we came awfully close two hundred 0:07:14.920 --> 0:07:16.520 and twenty two dollars is what the S and P 0:07:16.600 --> 0:07:19.640 five hundred earned last year. This year we also had 0:07:19.680 --> 0:07:22.520 bullish outlook for earnings two fifty and then the year 0:07:22.560 --> 0:07:26.480 after that. In other words, two two thousand and twenty five, 0:07:27.160 --> 0:07:30.360 we're talking about two seventy and then three hundred dollars 0:07:30.360 --> 0:07:33.760 a share for two twenty six, and we think that well, 0:07:33.760 --> 0:07:36.560 accommoday sixty five hundred on the S and P five 0:07:36.640 --> 0:07:38.440 hundred by twenty twenty six. 0:07:39.040 --> 0:07:41.240 You asking thank you for this kind of well, you know, 0:07:41.240 --> 0:07:43.200 I'm trying ed your Denny. Thank you so much for 0:07:43.240 --> 0:07:56.920 this conversation, folks. Sarah Hunt with US chief market strategist 0:07:56.960 --> 0:08:00.720 at Alpine Wood's Capital Investors. How how did we get 0:08:00.920 --> 0:08:05.720 from Dow eight thousand or Dow six thousand for the 0:08:05.720 --> 0:08:08.200 gloom crew to Dow forty thousand. 0:08:08.440 --> 0:08:11.240 It's just the growth of the nation, right, It's the 0:08:11.280 --> 0:08:11.960 growth of the nation. 0:08:12.080 --> 0:08:13.880 It's the growth of the money supply. You had a 0:08:13.960 --> 0:08:16.160 huge amount of money come into the system over the 0:08:16.240 --> 0:08:18.720 last decade that started the financial crisis, and it just 0:08:18.760 --> 0:08:20.760 went right up until COVID when it was supposed to 0:08:20.800 --> 0:08:23.440 pull back, and then we flooded the system with more 0:08:23.480 --> 0:08:26.160 liquidity post COVID. So a lot of this is money 0:08:26.160 --> 0:08:27.960 looking for a home right so that you had no 0:08:28.080 --> 0:08:28.960 fixed income for a. 0:08:28.960 --> 0:08:30.640 While, So where were you going to put your money? 0:08:30.640 --> 0:08:31.640 You're going to put in equities. 0:08:31.720 --> 0:08:32.080 I'm going to. 0:08:32.080 --> 0:08:34.920 Speak for Roger Ferguson, which is always hazardous because he's 0:08:34.960 --> 0:08:37.679 a giant, he was a TIA, he's our number one 0:08:37.720 --> 0:08:38.760 person in retirement. 0:08:39.160 --> 0:08:42.120 I take immense umbrage. 0:08:42.160 --> 0:08:46.520 With people criticizing the ute of America, like Scarlett Foo 0:08:47.320 --> 0:08:50.960 saving for retirement, who said I'm going to buy stocks 0:08:51.440 --> 0:08:53.079 and that's supposed to be a bad idea. 0:08:53.200 --> 0:08:55.920 I just I don't agree with that. Stocks is how 0:08:55.960 --> 0:08:56.840 you do this right. 0:08:57.240 --> 0:08:59.120 Well, Stocks is where the liquidity went. A lot of 0:08:59.160 --> 0:09:00.920 that liquidity went into stocks. A lot of it went 0:09:00.960 --> 0:09:02.880 into real estate, and it went into real estate and 0:09:03.040 --> 0:09:05.360 pushed real estate prices high enough to the point where 0:09:05.480 --> 0:09:07.640 you couldn't necessarily afford to buy a house. Like people 0:09:07.679 --> 0:09:10.200 talk about the affordability question all the time, it's not 0:09:10.280 --> 0:09:12.360 just mortgage rates. It's the level of pricing and the 0:09:12.400 --> 0:09:14.160 house and the level of pricing, and the housing market 0:09:14.240 --> 0:09:16.560 right now is very high. It has not come down 0:09:16.559 --> 0:09:18.600 commensurate with interest rates. 0:09:18.360 --> 0:09:19.400 Going You just talked about that. 0:09:19.600 --> 0:09:22.319 Yeah, so absolutely, then why wouldn't I want to put 0:09:22.360 --> 0:09:24.520 my money in an asset class that has done very 0:09:24.520 --> 0:09:26.960 well historically speaking, and is also one of the few 0:09:26.960 --> 0:09:28.280 places I can do it incrementally. 0:09:28.400 --> 0:09:28.840 It's great. 0:09:28.880 --> 0:09:30.960 Is if you take the twenty five foot Christmas tree 0:09:31.000 --> 0:09:33.240 out of the den, the price of your house scir 0:09:33.360 --> 0:09:34.960 that'll go up one hundred thousand dollars. 0:09:35.000 --> 0:09:37.320 Well, I have to get that thing out first. So 0:09:37.480 --> 0:09:40.559 we talk about moving into equities that's driven by liquidy 0:09:40.840 --> 0:09:43.160 in twenty twenty four, how much of that liquidity is 0:09:43.200 --> 0:09:46.359 now going too bitcoin? And is that competition for equities? 0:09:46.920 --> 0:09:48.960 I think it's just one more place where people can 0:09:49.000 --> 0:09:51.800 one put their opinion on, you know, the global monetary 0:09:51.840 --> 0:09:52.760 system and fiat money. 0:09:52.800 --> 0:09:52.920 Right. 0:09:52.960 --> 0:09:55.640 People look at golden bitcoin in a similar way for 0:09:55.720 --> 0:09:58.000 that reason, even though whether or not they actually act 0:09:58.080 --> 0:10:00.599 that way is a different question, and some periods of 0:10:00.640 --> 0:10:02.640 time they will and in some periods of time they won't. 0:10:02.800 --> 0:10:04.560 But I think that you still don't have I mean, 0:10:04.600 --> 0:10:07.400 fixed income is now a bigger competition for equity money 0:10:07.480 --> 0:10:09.800 just because you have an interest rate where for nearly 0:10:09.800 --> 0:10:11.880 a decade you did not. So I think that there 0:10:12.000 --> 0:10:16.120 is that change is also is also there. But you've 0:10:16.160 --> 0:10:19.440 got companies with enormous cash hoards that are looking to 0:10:19.440 --> 0:10:22.120 put money to work in a variety of ways, and 0:10:22.160 --> 0:10:23.760 some of the fixed income is going to get absorbed 0:10:23.760 --> 0:10:25.400 by that. I mean, think about Apple's bounce sheet and 0:10:25.520 --> 0:10:28.080 Vedia's bounce sheet, and we've talked about how enormous they 0:10:28.120 --> 0:10:31.960 are relative to small economies of other nations. So there's 0:10:32.000 --> 0:10:34.440 a lot of there is competition, but there's still a 0:10:34.480 --> 0:10:36.200 lot of money in the system, and this is where 0:10:36.200 --> 0:10:38.600 you're starting to see that wage hike situation going on, 0:10:38.640 --> 0:10:39.480 like you just saw in Japan. 0:10:39.600 --> 0:10:42.040 Okay, So money in the system. We're seeing that, certainly 0:10:42.120 --> 0:10:45.360 with this past earning season, when the buzzword or the 0:10:45.360 --> 0:10:47.960 theme really was free cash flow. Everyone was trumpeting their 0:10:48.000 --> 0:10:51.319 free cash flow. Managers are getting paid based on free 0:10:51.360 --> 0:10:53.679 cash flow. If you think about David Zaslov at Warner 0:10:53.679 --> 0:10:57.280 Brothers Discovery, the use of cash, whether it's to plow 0:10:57.320 --> 0:11:00.440 it into buyback programs or in some cases starting a 0:11:00.480 --> 0:11:03.680 dividend for some of these growthy tech companies, how comfortable 0:11:03.720 --> 0:11:05.720 are you with the use of cash and would you 0:11:05.760 --> 0:11:09.720 want to see more of it diverted to dividends? Versus buybacks. 0:11:10.480 --> 0:11:13.160 So we like capital allocation. That's giving back to shareholders 0:11:13.200 --> 0:11:15.080 if you can afford it, right, So that's the big question. 0:11:15.080 --> 0:11:17.280 They're trumpeting cash flow because if I can afford to 0:11:17.360 --> 0:11:19.240 raise my dividend and or I can afford to buy 0:11:19.280 --> 0:11:22.079 my stock back, that tells me something about the underlying business, 0:11:22.200 --> 0:11:24.400 as opposed to I can only afford to pay a dividend, 0:11:24.440 --> 0:11:26.480 and it's lucky I can pay that dividend. In some cases, 0:11:26.480 --> 0:11:28.160 I have to borrow to pay that dividend. You don't 0:11:28.160 --> 0:11:30.240 want to see that as an investor. It happens, but 0:11:30.280 --> 0:11:32.600 that's not what we're looking for in general. But I 0:11:32.600 --> 0:11:34.840 think that there is a trade off between those two things. 0:11:34.920 --> 0:11:37.679 I would argue I like dividends more than I like buybacks, 0:11:37.679 --> 0:11:41.000 but it does the same idea is that it's giving 0:11:41.040 --> 0:11:43.560 capital back and or to the extent that it's shrinking 0:11:43.600 --> 0:11:45.480 the share account making your metrics look better too. 0:11:45.679 --> 0:11:47.600 How do you like dividends if I'm paying a tax 0:11:47.679 --> 0:11:47.920 on it. 0:11:49.400 --> 0:11:51.360 I don't like paying taxes on anything, but I still 0:11:51.400 --> 0:11:55.200 have to pay. That's part of the zeitgeist. If it's 0:11:55.240 --> 0:11:57.760 a buyback and my capital gains go up, then I've 0:11:57.760 --> 0:11:59.920 got taxes on that side too. Taxes are going to 0:11:59.920 --> 0:12:01.160 be part of Taxes are going to be part of 0:12:01.200 --> 0:12:02.560 the equation about SPA slice it. 0:12:02.640 --> 0:12:05.600 Yeah, okay, I want to talk about April twenty fifth, 0:12:05.679 --> 0:12:07.680 and I just randomly picked it. I picked a big, 0:12:07.760 --> 0:12:12.239 ugly company that's doing better than good. Microsoft announces earnings 0:12:12.679 --> 0:12:14.080 basically a month from now. 0:12:14.880 --> 0:12:16.200 Isn't the heart of the matter. 0:12:17.200 --> 0:12:20.360 The stocks we've chosen to be in, we believe the 0:12:20.400 --> 0:12:21.800 cash flows will be there. 0:12:22.000 --> 0:12:22.880 Do you see. 0:12:22.640 --> 0:12:27.800 Any risk of cash flows diminishing in the second in 0:12:27.840 --> 0:12:30.640 the first quarter report or the second quarter report? 0:12:30.760 --> 0:12:33.960 This is one of those areas that we keep talking about, 0:12:34.000 --> 0:12:37.280 which is that the largest companies now are those companies 0:12:37.320 --> 0:12:39.800 that have some very good base cash flows, and so 0:12:40.080 --> 0:12:42.599 do I see it? Could there be volatility within a 0:12:42.679 --> 0:12:43.360 quarter to quarter? 0:12:43.640 --> 0:12:43.880 Yes? 0:12:43.960 --> 0:12:45.880 Is there a long term issue with the cash flow 0:12:45.920 --> 0:12:48.360 of something like Microsoft right now? I don't think so. 0:12:48.440 --> 0:12:50.160 And I think that's one of the reasons that these 0:12:50.240 --> 0:12:53.560 large dominant tech stocks are remaining large and dominant because 0:12:53.559 --> 0:12:55.839 the cash is there. In the last run up that 0:12:55.880 --> 0:12:58.280 we had major technology run up in the early two 0:12:58.320 --> 0:13:00.480 thousand like that, the cash wasn't They're in a lot 0:13:00.520 --> 0:13:02.640 of those companies the stock rises move, but they weren't 0:13:02.640 --> 0:13:04.840 making any money. A lot of these companies are making 0:13:04.880 --> 0:13:06.520 a lot of money right now, and I think that 0:13:06.520 --> 0:13:09.599 that's one of the reasons that they end up remaining dominant. 0:13:09.880 --> 0:13:13.400 Does a lot of recash low repel activist investors or 0:13:13.440 --> 0:13:15.960 does it give them? Does it attract them in a 0:13:15.960 --> 0:13:19.320 way where they're thinking, Oh, there's something there's something more here. 0:13:19.440 --> 0:13:21.560 I think that it depends on what management's doing with 0:13:21.600 --> 0:13:22.920 that cash, lil and whether or not they think they 0:13:22.920 --> 0:13:24.240 can do a whole lot of a better job. 0:13:24.360 --> 0:13:24.520 Right. 0:13:24.520 --> 0:13:26.880 So that's a question of what you're doing, and somebody 0:13:26.880 --> 0:13:28.480 looking at that going I could take that cash and 0:13:28.520 --> 0:13:29.680 do a whole bunch of other things with me. 0:13:30.559 --> 0:13:35.320 A really interesting discussion here, inequities. What's your portfolio turnover rate? 0:13:35.400 --> 0:13:37.360 How much are you moving in and out of stuff? 0:13:37.960 --> 0:13:40.080 It is not that high. We tend to buy and 0:13:40.120 --> 0:13:42.559 hold things for longer periods of time, right, So, I mean, 0:13:42.600 --> 0:13:44.559 I probably could give you a number off the top 0:13:44.600 --> 0:13:46.320 of my head, but it's going to be somewhere in 0:13:46.360 --> 0:13:48.760 the thirty to fifty percent releases ofso hire Right. 0:13:49.000 --> 0:13:49.959 Do you rebalance? 0:13:50.640 --> 0:13:53.240 Yes, we rebalance, but we also don't want to cut 0:13:53.240 --> 0:13:55.400 our winners off too early. So it's really a question 0:13:55.440 --> 0:13:57.200 of if I'm looking to rebalance, why am I looking 0:13:57.200 --> 0:13:59.240 to rebalance? Is it because everything else has gone down? 0:13:59.400 --> 0:14:01.560 Because something's gone up so much that now I'm afraid 0:14:01.559 --> 0:14:04.080 that it's too big in the portfolio, and I don't 0:14:04.120 --> 0:14:05.719 want to take a single stock or a handful of 0:14:05.760 --> 0:14:08.360 stock risk that's too big. But that's the problem with 0:14:08.559 --> 0:14:11.439 underperforming the SMP last year, right because the sixth biggest, 0:14:11.480 --> 0:14:13.800 seven biggest stocks were all of the performance. So if 0:14:13.840 --> 0:14:17.720 you rebounce too much, you're you're trailing those indices. 0:14:18.960 --> 0:14:21.920 Talk about overseas markets, is there anything attractive about them? 0:14:21.960 --> 0:14:22.320 Right now? 0:14:23.040 --> 0:14:25.960 You know, we tend to be American US centric in 0:14:26.320 --> 0:14:28.320 terms of our investments. There are a lot of ways 0:14:28.360 --> 0:14:31.560 to play overseas markets with US companies. I think that 0:14:31.680 --> 0:14:35.320 for US, the difficult thing is seeing why another economy 0:14:35.360 --> 0:14:37.960 is going to either outstrip the US or do something 0:14:38.000 --> 0:14:40.120 more than just have a giant move. Now that Japan 0:14:40.240 --> 0:14:42.200 had a big move, but the currency had a big move, 0:14:42.240 --> 0:14:44.440 So if you're not in Japanese, yeah, that big move 0:14:44.520 --> 0:14:47.520 doesn't necessarily feel as good unless you completely hedge that 0:14:47.560 --> 0:14:49.880 move out. So for us. We like to look at 0:14:49.880 --> 0:14:52.840 things that we like to look at ways of playing 0:14:52.920 --> 0:14:55.120 overseas markets with US centric stock. 0:14:55.400 --> 0:14:57.920 Sir, thank you, Sarah Hunt. We'll have her in off 0:14:57.920 --> 0:14:59.080 in here. Just a great guest. 0:14:59.200 --> 0:15:04.800 Unlike the reality of a portfolio. 0:15:05.960 --> 0:15:09.160 This is a joy. Paper Soldiers. Don't look for the 0:15:09.200 --> 0:15:10.040 movie there it is. 0:15:10.080 --> 0:15:12.120 I'm sure she hasn't sold the movie rights, but it's 0:15:12.200 --> 0:15:14.200 under consideration. 0:15:14.200 --> 0:15:15.120 Salaiah Mosen. 0:15:15.200 --> 0:15:17.160 And the reason we're talking to her is because she's 0:15:17.160 --> 0:15:20.440 a real journalist. There's this rumor I'm a journalist. Guess 0:15:20.440 --> 0:15:23.680 what I'm not. Only Marty Schenker thinks I'm a journalist. 0:15:23.760 --> 0:15:27.000 My great advisor here at Bloomberg. Selaiah is the real deal. 0:15:27.600 --> 0:15:30.560 And she's gone out and put together the soap opera 0:15:30.960 --> 0:15:35.840 of your United States Dollar under Risk at Treasury. Given 0:15:35.880 --> 0:15:38.960 the crises that are out there, she runs our Treasury 0:15:38.960 --> 0:15:41.880 covers in Washington. The book is a piercing two hundred 0:15:41.920 --> 0:15:47.240 pages how the weaponization of the dollar changed the world order. Seleiah, 0:15:47.280 --> 0:15:51.680 congratulations and the courage on writing this. When Tim Geidner 0:15:51.760 --> 0:15:55.560 reads this book, when he reads Paper Soldiers, how upset 0:15:55.600 --> 0:15:55.840 is he. 0:15:55.840 --> 0:15:56.200 Going to be? 0:15:57.760 --> 0:16:00.200 I'm so excited this book is coming out on Tuesday Day. 0:16:01.040 --> 0:16:03.600 Tim Geidner is actually going to be excited, and not 0:16:03.840 --> 0:16:05.920 because of how he may or may not look at it. 0:16:06.040 --> 0:16:09.960 My conversation for the book with him came right before, 0:16:10.000 --> 0:16:13.720 about a month before the Russia invasion Ukraine, a month 0:16:13.800 --> 0:16:18.080 before those historic almost earth shattering sanctions that the US 0:16:18.200 --> 0:16:21.680 led the world on applying on Russia. And somehow he 0:16:21.760 --> 0:16:23.920 was so pressy in our interview. I asked him all 0:16:23.920 --> 0:16:26.440 of my questions. He answered everything patiently, and then he 0:16:26.440 --> 0:16:28.960 held me back at the end and he said, Seleia, 0:16:29.000 --> 0:16:31.000 when you're writing this book, I want you to think 0:16:31.040 --> 0:16:36.200 about how the next generation of policymakers at Treasury are 0:16:36.280 --> 0:16:39.000 going to have a different America that they're facing. And 0:16:39.040 --> 0:16:41.760 that shifted the lens through which I was looking at. 0:16:42.440 --> 0:16:45.280 So I sat across from Parliament with John Taylor, who 0:16:45.320 --> 0:16:47.320 was at a G seven meeting for a very ill 0:16:47.400 --> 0:16:49.960 John Snow and they were at the time with the 0:16:50.000 --> 0:16:54.960 fear of terrorism, foreign exchange transfers, and will as well. 0:16:55.400 --> 0:16:56.880 I want you to sell to our. 0:16:56.800 --> 0:17:01.480 Audience on Apple car playing YouTube, the why of this book. 0:17:01.880 --> 0:17:04.359 They're interested in the Fed, the Fed, the Fed, the Fed. 0:17:04.800 --> 0:17:10.040 Why does Albert Gallatin's Treasury matter in our nation's security. 0:17:11.400 --> 0:17:14.240 The US the world runs on US dollars. The Treasure 0:17:14.280 --> 0:17:17.879 Department is the steward of the dollar. The dollar touches 0:17:17.960 --> 0:17:22.760 everyone's life. You could be a cocoa bean picker in Ghana, 0:17:22.920 --> 0:17:25.880 you could be an oligarch or a business tycoon somewhere, 0:17:26.119 --> 0:17:29.439 and you need the dollar, the global financial system to 0:17:29.960 --> 0:17:33.600 make any kind of transactions to keep up your livelihood. 0:17:33.920 --> 0:17:37.680 The US has used that dollar to protect itself after 0:17:37.760 --> 0:17:41.160 nine to eleven. The global the war on terror did 0:17:41.160 --> 0:17:44.960 not start with military tanks rolling toward a country. It 0:17:45.040 --> 0:17:47.000 started with the stroke of the pen when George W. 0:17:47.119 --> 0:17:51.159 Bush gave the Treasure Department fresh authorities to track money 0:17:51.280 --> 0:17:54.639 that the money flow of terrorists, and to use economic sanctions. 0:17:54.920 --> 0:17:57.960 So the dollar gets us health, it gives us the 0:17:58.000 --> 0:18:00.840 pursuit of happiness, It gives us connection to the world. 0:18:00.880 --> 0:18:03.480 And an alshy protext in the Scarlet is Valerie, you 0:18:03.560 --> 0:18:05.719 started just staying said in the Great Barrier, I con 0:18:05.760 --> 0:18:09.119 greeted Berkeley. It is our exorbitant privilege. 0:18:09.200 --> 0:18:10.879 It is our exorbitant privilege, and it's one that we 0:18:10.920 --> 0:18:12.679 don't have to think about a whole lot when it 0:18:12.680 --> 0:18:15.000 comes down to it, because day in and day out, sleiha. 0:18:15.240 --> 0:18:18.720 Most Americans aren't really concerned with the relative strength or 0:18:18.720 --> 0:18:21.639 weakness of the US currency unless they're traveling abroad. You 0:18:21.760 --> 0:18:25.080 mentioned an oligarch overseas, you mentioned a foreign business owner, 0:18:25.400 --> 0:18:28.160 But for ordinary Americans, day in and day out, it's 0:18:28.200 --> 0:18:31.600 not something we have to trouble ourselves with. In your reporting, 0:18:31.720 --> 0:18:36.159 what do you think will most distress ordinary Americans about 0:18:36.160 --> 0:18:38.480 the dollar and how the government has weaponized the dollar. 0:18:39.560 --> 0:18:42.160 I think the most distressing thing is what's playing out 0:18:42.240 --> 0:18:45.879 every day across the country and in Washington. It's the 0:18:47.000 --> 0:18:51.080 self inflicted wounds that we are giving our country, and 0:18:51.119 --> 0:18:56.359 that is actually damaging the US's dominance in the world 0:18:56.440 --> 0:18:59.440 and the dollar's dominance in the world. If Washington can't 0:18:59.480 --> 0:19:01.760 get if the US can't get its fiscal house in 0:19:01.920 --> 0:19:07.280 order make sure it's electorate feels heard, feels happy, becomes united, 0:19:07.720 --> 0:19:11.520 then dollar dominance and American hedge money around the world 0:19:11.960 --> 0:19:13.000 is not going to last. 0:19:13.440 --> 0:19:17.320 Okay. The US Treasury, as you know, has always pledged 0:19:17.400 --> 0:19:20.239 allegiance to a strong dollar. They all answered that they 0:19:20.280 --> 0:19:23.560 want a strong dollar. Obviously, we know it's much more 0:19:23.640 --> 0:19:26.480 nuanced than that. What are they really saying, sal how 0:19:26.640 --> 0:19:28.720