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Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane

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Speaker 1: Jay Ley. We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg. The

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Speaker 1: US is Priced perfection. I've got to go someplace else.

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Speaker 1: One of the coveted decks of two thousand and eighteen

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Speaker 1: is Sharon Bell, Kee Ching Wang, John Quen, Kim Jason

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Speaker 1: and Peter Oppenheimer at Goldben Sachs, John, you know, John Farroll.

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Speaker 1: This is a coveted power point a story for two

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Speaker 1: thousand eighteen by their acclaim student of European stocks, and

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Speaker 1: I placed the side of Peter Roupenhanaga Sachs, chief of

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Speaker 1: Global Strategist and partner joined us round a table here

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Speaker 1: in New York City. It's going to have you with us.

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Speaker 1: Peter and the story of twenty seven scenes so far

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Speaker 1: for me was just by Europe, by Europe, by Europe.

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Speaker 1: I got sick of hearing it. I'm sure so many

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Speaker 1: people got sick of saying it. It's the perennial discount

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Speaker 1: in European equities. Is it a value trap. Well, it's

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Speaker 1: a very good question, and for a long time. Of

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Speaker 1: course it has been partly because of years of stagnant growth,

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Speaker 1: and until this year we had six years in a

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Speaker 1: row of no profit growth. But things have got a

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Speaker 1: lot better economically. Profits of increase this year, we guess

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Speaker 1: by about I think one of the main reasons why

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Speaker 1: it's underperformed is because it just has a lack of

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Speaker 1: technology companies. You think about it, the SMP is about

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Speaker 1: a quarter of it is made up of technology. Look

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Speaker 1: across Asia seven If you look at the European markets

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Speaker 1: in aggregate, just five percent in technology sector and that's

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Speaker 1: one of the sectors that's driven markets higher this this year.

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Speaker 1: One of the reasons why Europe is like behind. So

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Speaker 1: looking forward, if I look at Europe, your big overweight

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Speaker 1: is banks on the European Index. That's the highest waning

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Speaker 1: on the SMP five hundred, it is technology. So as

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Speaker 1: I think about Europe next year, do I need to

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Speaker 1: be constructive on the banks to be long Europe? You do?

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Speaker 1: I think one of the advantages that Europe has is

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Speaker 1: that while it lacks a lot of growth, it does

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Speaker 1: have some deep value. Now to your point of course,

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Speaker 1: Europe has been a value trap for a long time.

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Speaker 1: Even the value sectors have been a value trap because

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Speaker 1: they've seen persistent falls and dividends banks in particular. It's

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Speaker 1: true also of the our sector and utilities. But these

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Speaker 1: sectors are finally starting to see a recovery in their

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Speaker 1: dividend growth prospects for various different reasons, and that generates

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Speaker 1: a genuine value opportunity. I think Peter, pretty much everyone

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Speaker 1: I talked to, has a really optimistic, positive view of

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Speaker 1: the continent at the moment. But as I look through

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Speaker 1: cross as said, I find it difficult to decide how

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Speaker 1: to plug in that optimistic view of Europe. If you

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Speaker 1: try and push it through effects, at this point, you're

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Speaker 1: still up against the negative forty basis point deepayer rad

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Speaker 1: of the e c B. If you try and push

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Speaker 1: it through buns, try and push it through buns and

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Speaker 1: see what happens. You'll just stuffenly, stubbornly low sat the

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Speaker 1: thirty basis points yesterday. Why is the long equity trade

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Speaker 1: gonna work when it isn't working in the bond market

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Speaker 1: right now? Well, I think we want to put it

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Speaker 1: in a global context. We think the equity trade is

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Speaker 1: working in general, and it's still right we think to

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Speaker 1: be long of equities. We expect another year and next

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Speaker 1: year of global growth around four percent. European equities are

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Speaker 1: very levied into that global growth. Half half of the

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Speaker 1: ectual market at least is exposed to non European economic activity.

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Speaker 1: So I think Europe will do well. It may not

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Speaker 1: be much better than the other regions, but certainly is

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Speaker 1: a part of our diverse, fied portfolio. I think with

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Speaker 1: the recovery we're seeing now domestically and the fading of

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Speaker 1: some of the political concerns, it's a good place to

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Speaker 1: put some money with your decades of work and Gorman Sex.

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Speaker 1: Is there a change in true European corporations? The simple

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Speaker 1: statement is that they becoming more Anglo American, but they's

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Speaker 1: just everybody gets upset when they say that. Is there

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Speaker 1: a change in financial culture at these companies. It's a

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Speaker 1: great question, and it's been the long term hope of

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Speaker 1: equity investors that that's the case. And certainly there has

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Speaker 1: been a lot of restructuring and finally we've seen in

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Speaker 1: some of the economies and liberalization of things like labor

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Speaker 1: reform laws or reforms which have helped as well. But

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Speaker 1: if you look at the proportion of companies where you

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Speaker 1: have shareholder value driving the compensation packages, for example of CEOs,

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Speaker 1: whereas it's around eighty per cent or so in the

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Speaker 1: UK and the US, you know, averages around or so

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Speaker 1: on the continent, So there's a kind of a gap there,

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Speaker 1: but it is changing um and I think there's lots

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Speaker 1: of companies that are really focused on self help now spinoffs,

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Speaker 1: improving efficiencies, and they are getting a lot better. And

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Speaker 1: of course many of them are globally very competitive, if

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Speaker 1: not global leaders. Where's the Battle and Excellence dividend of

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Speaker 1: three point eight percent in hotels dividend of five point

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Speaker 1: two Should I grab the European dividend? Yes? I think

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Speaker 1: the oil sector in general is an interesting one. It's

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Speaker 1: one of those again that's been in a value I

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Speaker 1: would describe as a value trap in Europe in recent years.

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Speaker 1: You've seen, of course, the fall in our prices. You've

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Speaker 1: seen a significant increasing in costs for these companies and

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Speaker 1: declining returns and declining dividends. I think the opportunity for

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Speaker 1: next year is that the sector as a whole is

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Speaker 1: really transforming from script dividends to cash dividends, and with

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Speaker 1: those yields that you mentioned, that really becomes an interesting opportunity.

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Speaker 1: We saw that with shout full cash dividends right just

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Speaker 1: a couple of weeks ago. Peter Oppenheimer, Common Sex chief

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Speaker 1: global strategist and partner greing to have you with us

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Speaker 1: on a program. Appreciate your time, Tom, Tom. This story

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Speaker 1: for me is that it's by Europe, by Europe throughout

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Speaker 1: the whole of this year, and a lot of people

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Speaker 1: were cautious about the United States in many ways compared

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Speaker 1: to Europe, and the US is still outperformed. And Jeffreys

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Speaker 1: coming out in the last couple of days and saying

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Speaker 1: stick with the United States, don't fall for the buy

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Speaker 1: Europe story. Oh it'll be interesting to say. As Peter

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Speaker 1: Off I remember, thank you, thank you so much for

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Speaker 1: joining us today. He is with Golden Sax. The French

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Speaker 1: take pride in their math, and they take pride in

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Speaker 1: their convertible and derivative bond math. No one has done

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Speaker 1: this better than Society General. And they have John Farrell

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Speaker 1: a fabulous chart and it is a chart of humility

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Speaker 1: about extrapolating out into the future. They say well, this

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Speaker 1: is the glide path of FED funds, and this is

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Speaker 1: maybe what's going to happen. But this is also maybe

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Speaker 1: there's lots of maybe, there's not a lot of certitude,

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Speaker 1: and that is a good and beautiful thing there is.

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Speaker 1: Should we bring him in, we should please A. MESHERI

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Speaker 1: General's chief US economist, the most great to have you

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Speaker 1: with us. Let's look ahead to next year. My big

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Speaker 1: question for next year in the world of economics in

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Speaker 1: the United States is whether the Goldilocks growth scenario breaks down,

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Speaker 1: whether we get in a return of inflation, and this

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Speaker 1: Goldilocks story for financial markets, the growth remains stable, inflation

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Speaker 1: remains low, changes, Does it change? I don't think it changes,

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Speaker 1: But I think there's a bit of optimism being built

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Speaker 1: up around the reflation story for next year. Uh, you know,

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Speaker 1: partly due to the stronger growth scenario. We really don't

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Speaker 1: seek growth changing very much so about two and a

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Speaker 1: quarter next year, but I think there's a bit of

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Speaker 1: anticipation that, you know, inflation is really going to come

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Speaker 1: roaring back. You share the FED talking about cetickle goal

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Speaker 1: pressures pushing up on inflation. I think they'll get their

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Speaker 1: story for about the first half of the year. But

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Speaker 1: our suspicion is that in the second half next year

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Speaker 1: that inflation figure will probably come back down to roughly

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Speaker 1: about where it is now in cor inflation, and that

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Speaker 1: may lead the fetch just to sort of pull back

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Speaker 1: on rate hikes. So really, if you know, we're looking

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Speaker 1: for three but if I had a lean, I would

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Speaker 1: go to two hikes as opposed to four hikes, like

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Speaker 1: you see a lot of folks doing. Now, Oh, Matt,

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Speaker 1: explain to our listeners how this is possible when we

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Speaker 1: just printed two thirty six towns and on initial jobless claims,

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Speaker 1: and unemployment tomorrow in the United States is set to

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Speaker 1: come in at four point one per Why are we

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Speaker 1: not talking about reflation, reforces reasserting themselves, especially when you

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Speaker 1: push through a fiscal stimulus through the economy as well. Yeah,

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Speaker 1: well we're we're talking about it. But you know, I

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Speaker 1: read this Scraave phrase the other day. You know, you

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Speaker 1: don't get inflation by incantation. Just because we're talking about

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Speaker 1: it doesn't mean it's going to happen. And the reason

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Speaker 1: really for it is that, you know, in my mind,

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Speaker 1: two forces really pushing down on it, and they really

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Speaker 1: don't have anything to do with the cycle or cyclical pressures.

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Speaker 1: It's about shelter costs, which have been cooling off this year,

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Speaker 1: and I suspect we'll continue to cool off next year

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Speaker 1: as more supply hits the market. And the other healthcare,

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Speaker 1: and you've seen healthcare prices slow down quite dramatically this year.

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Speaker 1: There really doesn't seem to be a ton of upside

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Speaker 1: next year for for healthcare. These two things make up

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Speaker 1: around fifty percent of inflation and how we measure it,

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Speaker 1: and if those they're not moving up, it's really hard

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Speaker 1: to get the inflation data much higher. Right now. There

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Speaker 1: is an argument in the Minneapolis Fed, headed by Nil Kascari,

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Speaker 1: that the Federal Reserve is the problem here. They're getting

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Speaker 1: in the way of inflation reforces reasserting themselves. What do

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Speaker 1: you say back to that argument, Yeah, I think you know.

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Speaker 1: Their point is that the more the set hikes, even

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Speaker 1: though they're not seeing inflation, the more they could be

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Speaker 1: pushing expectations down. And I think there's something to be

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Speaker 1: set for that. I mean, if you look at, for example,

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Speaker 1: the consumer surveys University of Michigan run five to ten years,

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Speaker 1: what do people think for a long time. It was

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Speaker 1: basically just between two two and a half. It's now

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Speaker 1: drifted lower over the last year and a half, so

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Speaker 1: you know, the public may fee two percent as a

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Speaker 1: feeling and not at heart. And that's that's even of

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Speaker 1: several people, including cash Gary Evans. I believe it's sort

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Speaker 1: of on that same page as well. So you know,

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Speaker 1: there's something to be said for for the FED allowing

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Speaker 1: inflation to actually try to hire. The question is can

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Speaker 1: they do it? Okay? I mean, you know I mentioned

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Speaker 1: earlier the derivative work of society general over a hundred years.

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Speaker 1: That's all great. Oh mare, what's your nominal g d P? Call?

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Speaker 1: I mean, it doesn't take much fancy math to take

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Speaker 1: real growth plus inflation. Can you get out over four

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Speaker 1: percent nominal GDP? I think it would be a bit

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Speaker 1: of a stretch to you know, I understand people are

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Speaker 1: pushing it much higher because expectations of discal stimulus UM.

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Speaker 1: I'm struggling to see it really moving significantly beyond for

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Speaker 1: maybe four and a half percent UM at best. Right now,

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Speaker 1: that's not That's not morning in America for President Trump

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Speaker 1: is It's it's not And you know he's pushing it

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Speaker 1: up to four or five six percent real GDP, as

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Speaker 1: he noted yesterday, that's certainly a stretch, but I think,

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Speaker 1: you know, consistently getting three it's possible, but we just

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Speaker 1: think it's going to be a bit of a struggle

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Speaker 1: next year. So stay General's chief US Economists, Bloomberg Surveillance.

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Speaker 1: There are many people that put this together. You may

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Speaker 1: think it's just about Pim Fox, Pim jump in here

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Speaker 1: is you what as you get ready for the hour?

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Speaker 1: And with John Ferroll as well, there's like people behind

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Speaker 1: us at least twenty five. If not at least then

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Speaker 1: I'm on speaking terms with all alright. Yes, indeed, Jim

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Speaker 1: Morris saves me each and every day. He is legendary

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Speaker 1: about three AM. He for years was with ABC and

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Speaker 1: we've been honored to have him here for years with

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Speaker 1: us at Bloomberg. And he's the one that writes the

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Speaker 1: language we speak in news. What's the hardest part about

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Speaker 1: writing the news? To Morris, um, you actually learned for

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Speaker 1: for TV what you have to leave out because you

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Speaker 1: can't put too much in there because the air can't

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Speaker 1: comprehend everything you see. And you're the one that makes

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Speaker 1: Taylor Riggs look brilliant every morning, right, Taylor makes herself

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Speaker 1: look really Okay, well we'll go with that. Jim, you're

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Speaker 1: on with us today because your home is four five

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Speaker 1: minutes away from these horrific bell Air fires. You're focused

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Speaker 1: on the winds, as is every Twitter feed. I see,

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Speaker 1: why is the wind now different the wind of one

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Speaker 1: or five or ten years ago. Well, there's a there's

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Speaker 1: a number of things have combined to make this. This

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Speaker 1: is definitely the worst fire season we've had in southern

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Speaker 1: California years and and there's several reasons for that. First

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Speaker 1: of all, you go back to last winter when we

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Speaker 1: had an exceptionally wet winter, which normally is a great

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Speaker 1: thing there because California, California's dry, So what happens is

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Speaker 1: vegetation grows. Then this summer we had a record it

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Speaker 1: was a record heatwave. So what happens of vegetation all

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Speaker 1: drives out, So now all that greenery has become tender.

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Speaker 1: So then we have, uh, we're waiting were coming the season.

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Speaker 1: We have the Santa Annas. These the winds that come

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Speaker 1: from the northeast. They go through the camp the mountain

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Speaker 1: passes where they speed up, you know, so a twenty

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Speaker 1: mile wind becomes so all it takes is that one spark,

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Speaker 1: whether it's a down power line or something like that,

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Speaker 1: and all of a sudden you've got these fires, the

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Speaker 1: tension around your desk. Yesterday you were showing people with

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Speaker 1: the ash on the cars in your driveway, and that

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Speaker 1: is well, what did you and the Morris family do

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Speaker 1: to adjust or amend for something you can't control? Uh,

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Speaker 1: there's not a whole lot you can do there, you know,

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Speaker 1: once you made your choice. It's like the earthquakes. It's

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Speaker 1: we're not we're a couple of miles outside the fire zone.

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Speaker 1: But what happens is, in fact, the ash well I

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Speaker 1: was showing pictures of yesterday wasn't from the bell Air fire,

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Speaker 1: which hadn't started yet. It was interesting, it was from

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Speaker 1: the Silmar fire, which is about twelve fifteen miles away.

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Speaker 1: People don't realize the impact. You can smell these things.

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Speaker 1: When I first got out there the years ago, is

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Speaker 1: that it reminded me of being in boy Scouts. It

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Speaker 1: smelled like a big campfire. And um. But the winds

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Speaker 1: this year, for whatever reason, it has to do with

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Speaker 1: changing weather systems. Um, the weather system rates them on

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Speaker 1: a color scale, orange is generally the high for the UH.

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Speaker 1: For the first time ever, the color scale went to

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Speaker 1: purple this morning, which means extreme. So they've already this

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Speaker 1: morning they've reported winds of up the fifty gusts of

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Speaker 1: fifty miles an hour. They say it could be eighty

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Speaker 1: and and one of the things that happens, it's not

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Speaker 1: just the fire, which it obviously can make it spread faster.

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Speaker 1: It keeps the planes from coming in and dropping water,

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Speaker 1: and the fire retarded on there. They were grounded yesterday

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Speaker 1: for a good while. Interesting. Well, I just want to

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Speaker 1: mention I know the area pretty well, only from Ventura

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Speaker 1: and Carpenteria and going you know what, I would say west.

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Speaker 1: And that's the one thing I just asked people to

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Speaker 1: pay attention to is you know, you tend to think

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Speaker 1: of California as a north south south north experience, particularly

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Speaker 1: with the four oh five. Right, Well, you know just

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Speaker 1: about ventur An Oxnard is where California actually is east west,

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Speaker 1: not north south. And as a result of that, you

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Speaker 1: have the mountains behind all of these coastal towns, and

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Speaker 1: that can in a sense trapp all of the wind

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Speaker 1: onto the coastal area and right now. You've got fires

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Speaker 1: in Santa Maria. You've got fires in uh I believe

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Speaker 1: just near Santa Barbara, a little bit west of Santa Barbara,

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Speaker 1: up near Solvang. Plus you've got the fire that's moving

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Speaker 1: in Ohi, and that o Hi fire is dangerous. Oh,

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Speaker 1: that's dangerous because once it, once it skips there, it

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Speaker 1: can skip right along the coast, go right up to Carbonaria,

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Speaker 1: go right up to Santa Barbara, Montecito, and that becomes

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Speaker 1: a very business. Which fire matters to you as a

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Speaker 1: news guy, not the one next to your home, the

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Speaker 1: one Pin was just talking about that one. Give you

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Speaker 1: an example, the fire in bell Airs fo Acres. This

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Speaker 1: one uh up, the one right now is Uhcres seven,

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Speaker 1: five verses. And I would also mention that you know

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Speaker 1: what at the fire up in Santa Maria, if you

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Speaker 1: look at Vandenburg Air Force Base, which is you know

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Speaker 1: where they do a lot of the launches for the

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Speaker 1: tests out in the Pacific, that is right up there,

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Speaker 1: and that could be hampered by the smoke gym. And

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Speaker 1: the time we got left. How do you respond to

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Speaker 1: people across the nation who say, wait, why did Jim

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Speaker 1: Morris build a house there. There's that whole thing. I mean,

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Speaker 1: I know bel Air's like l A. You're right next

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Speaker 1: to U. C. L A. But how do you respond

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Speaker 1: to people in America say, wait, Santa Anna Dry, there's

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Speaker 1: fires every ten years. Why are we building? You know,

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Speaker 1: you've got eight bedrooms, six bass of four car garage.

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Speaker 1: You're looking out on the Hollywood moguls and he has

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Speaker 1: property taxes. Yes, why did you build there? Um? You

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Speaker 1: go there because honestly, Southern California's paradise because you're too

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Speaker 1: cool for school. That's true. And I the people would

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Speaker 1: say that, I'd said, well, why do you move to

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Speaker 1: Florida and the outer banks in South Carolina where you

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Speaker 1: have all the hurricanes coming in all the time? Did

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Speaker 1: you go to the Mason Bogy guitar store and Sunset

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Speaker 1: Boulevard is at the coolest store in the world. Um? No,

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Speaker 1: but I have been, I have been by, There've been. Okay,

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Speaker 1: we keep you on for another minute a half. But

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Speaker 1: Rich Truman says, you got to write a fifteen second

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Speaker 1: reader for Taylor. I absolutely do, or Taylor is gonna

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Speaker 1: be really mad. Jim Morris, thank you so much, and

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Speaker 1: really one of the foundations of what we do here

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Speaker 1: at Bloomberg News in in carving the news out for

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Speaker 1: you in the King's English. It's true him. If it's

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Speaker 1: got to be forty seven words, it's a lot harder

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Speaker 1: to write than to write four thousand, seven hundred words.

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Speaker 1: Just get rid of the adjectives yeah, and just anything

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Speaker 1: with an L y just remove. And he does it effortless.

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Speaker 1: I mean, I mean we don't well, well I'll go

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Speaker 1: the tour. Yeah. I got no sympathy for that, but

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Speaker 1: you know, it's it's it's great Jim Morris with some

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Speaker 1: bloom Worg surveillance and of course our thoughts to the people,

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Speaker 1: particularly fighting these fires across all of California. And Jim

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Speaker 1: was talking about that yesterday. To repeat, Mr Morris lives

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Speaker 1: in the vicinity of the bel Air fires and he's

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Speaker 1: much more concerned him about Oh j Ai O Hi

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Speaker 1: with this right now, Fred Lane, who is with Lane Generation,

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Speaker 1: and this is a part of Raymond James. I want

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Speaker 1: to point out, you know, with all the usual rules,

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Speaker 1: you can't talk about individual stocks, even though I assaulted

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Speaker 1: him and talked about g earlier. But but what you

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Speaker 1: do do is somebody's got a pot of money, they

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Speaker 1: walk in the door and they say, this has got

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Speaker 1: to be every single account. I really feel bad I

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Speaker 1: didn't load the boat in March of two thousand nine. Fred,

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Speaker 1: How do I catch up? But I don't want to

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Speaker 1: take risk. You get that right? Yeah, although my client

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Speaker 1: base is a little different because we have family offices,

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Speaker 1: we have we have an endowment, we have an insurance company. Um,

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Speaker 1: we have some charitable organizations. So it's becoming. I would

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Speaker 1: even argue that many, not all, but many of our

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Speaker 1: individual investors are almost like institutions where we manage a

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Speaker 1: piece of what they do. However, I want to answer

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Speaker 1: your question, Um, we do have people who come in

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Speaker 1: and they have a you know, they have a potful

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Speaker 1: of money, and it's a year and they're watching you know,

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Speaker 1: Bloomberg TV or radio, listening to the radio and they're saying,

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Speaker 1: I'm not part of this. Well, that's the thing you have.

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Speaker 1: You have to be in the game. And so what

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Speaker 1: what's important for me is to show them. And this

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Speaker 1: is true almost across the board. If you look at

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Speaker 1: the SMP five D and you look at a ten

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Speaker 1: year chart, it looks like a pretty smooth It looks

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Speaker 1: pretty smooth. If you look at a five year chart,

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Speaker 1: it looks again pretty smooth. But if you look at

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Speaker 1: a three month charter or a six month chart, it

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Speaker 1: looks pretty ragged. So it's a question of of what

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Speaker 1: is your time frame, you know, if if you can't

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Speaker 1: be scared by volatility, you have to accept that volatility

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Speaker 1: is part of the game, and when stocks are down, okay,

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Speaker 1: is the time to buy them. Give an example, we

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Speaker 1: are heavily, not heavily, but we're probably three in technology

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Speaker 1: related stocks. Whase technology is are very it's it's pervasive

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Speaker 1: and everything you do. There's been a pullback in technology, right,

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Speaker 1: there's been a sector rotation away from technology. We think

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Speaker 1: this is a dandy time to buy technology for that

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Speaker 1: reason because these are persistent growth companies. These are going

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Speaker 1: to be the companies you want to have owned in

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Speaker 1: two thousand and fifteen, sixteen, seventeen and eighteen, going forward, five, six,

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Speaker 1: seven years from now, Fred, you know, one of the

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Speaker 1: things that I look at when I you mentioned going back,

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Speaker 1: you know, let's say the two thousand eight is I

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Speaker 1: look at that big decline, that big drop where we

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Speaker 1: hit the triple six. I guess that would then you know,

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Speaker 1: March never happen again. Yeah, um, what what did you

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Speaker 1: think at that time? Did you go out and buy? No,

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Speaker 1: because I was fully invested. But I wrote it all

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Speaker 1: the way down, even though I was on UM on

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Speaker 1: air in various locales telling everybody how over the market was.

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Speaker 1: But I thought the market would get down fifteen or

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Speaker 1: I didn't think it would get down. So when it

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Speaker 1: was down for you know, I had my wife telling

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Speaker 1: me that I should sell the stocks, and I said, look,

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Speaker 1: I may have may be stupid that I didn't follow

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Speaker 1: my own advice, but I'm not dumb. I'm not going

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Speaker 1: to sell at the bottom. Well, guess what you know?

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Speaker 1: Now the market is up. You know how many times

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Speaker 1: is it multiplied sincent? Four times? All right? But the

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Speaker 1: point I said, you're a professional, you have years of

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Speaker 1: experience doing this, that feeling that you had, that feeling,

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Speaker 1: that emotional reaction that you have when it didn't go

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Speaker 1: down ten twenty, when it went down fifty, What did

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Speaker 1: you do? How do you steal yourself from making a

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Speaker 1: dumb decision as you just describe. Well, you know, so

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Speaker 1: you get out of the office, I mean literally do

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Speaker 1: what what do you physically do to walk away from

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Speaker 1: the pain. Well, I work out a lot that something.

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Speaker 1: I read a lot, and I read and I and

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Speaker 1: I read a lot about history, and I read a

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Speaker 1: lot about investment strategy and so on, and and it's

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Speaker 1: very enforcing to the long term view. The other thing

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Speaker 1: I'd say that's very important here is to is to

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Speaker 1: recognize that, you know, when when your emotions do not

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Speaker 1: act in haste, you know, as I say, act in haste,

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Speaker 1: repent and leisure. You know, you do not want to

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Speaker 1: overreact to things. You know. But let me just say

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Speaker 1: one thing. That was the worst market reversal we've had

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Speaker 1: in in versus anybody alive today can remember it could

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Speaker 1: be a generational event. Absolutely it is. I think we

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Speaker 1: can say that with some degree of confidence if you

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Speaker 1: bought all of your stock at the very top of

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Speaker 1: the market before that reversal and held it to today,

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Speaker 1: you would still have a seven half eight percent return.

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Speaker 1: So it isn't that I understand that. The conversation at

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Speaker 1: that I remind myself of that during times like that.

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Speaker 1: That's my That's the whole point is I can mind myself,

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Speaker 1: and I'd like to think that in today's that I'm

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Speaker 1: doing this now, I remember I spent thirty eight years

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Speaker 1: as an investment banker and as a private equity investor,

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Speaker 1: you know, founding Staples and buying seven Up from Philip

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Speaker 1: Morris and things like that, and so you know, I

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Speaker 1: bring to that, to this activity, that experience. So as

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Speaker 1: a result of that, you know, I have I think

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Speaker 1: I have a longer term perspective and I think and

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Speaker 1: I'm really trying to buy these great companies that I

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Speaker 1: think are gonna end up being great research d l J.

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Speaker 1: Did you read Elliott Platt? Do you know what a

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Speaker 1: bond is? Do I know what the b I remember Elliott?

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Speaker 1: Remember they're going to write a book on Tuesday. The

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Speaker 1: whole world would stop for the Maroon book. Tell people

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Speaker 1: about them. Okay, here, let me date myself with Phil Kray,

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Speaker 1: a pioneer. This is before PDFs, folks. Okay, you would

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Speaker 1: push your run on a Dolly card, all of fancy

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Speaker 1: pants research. It's seventy across the street or sixty stage whatever,

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Speaker 1: and you get it about ten am. You get no

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Speaker 1: literature before ten am. Before that, you were just having

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Speaker 1: coffee and talking about the Red Sox and on Tuesdays,

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Speaker 1: it didn't matter. The feet of off You've got Elliott

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Speaker 1: Platts Maroon book from d l J which said there

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Speaker 1: might be a bond bear market coming. Fred, is there

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Speaker 1: going to be a bond bear market coming? Oh, I

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Speaker 1: think inevitably. Inevitably, But but it's not. I don't. I

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Speaker 1: don't believe it's going to be that deep. And the

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Speaker 1: reason I don't think it's going to be that deep is, first,

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Speaker 1: I don't think we're gonna have four GDP growth, And

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Speaker 1: anybody who thinks that, I think is dreaming. I think

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Speaker 1: structurally we're just that's just not available to us. When

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Speaker 1: you look at population growth and you look at the

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Speaker 1: age of the population and so on, um, and you

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Speaker 1: look at our increasing debts. And the thing I'd say

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Speaker 1: is that there's such a strong demand for interest income

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Speaker 1: that I think it's going to keep a lid on

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Speaker 1: on interest rates, right Because structurally we have this aging

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Speaker 1: baby boomer group of which I'm a part, who theoretically

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Speaker 1: want one to buy bonds. Now, I don't happen to

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Speaker 1: one of buy bonds because I think the returns will

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Speaker 1: continue to be insufficient given you know, frankly other other

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Speaker 1: other uses of your money. We're gonna run out of

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Speaker 1: time used to cash continues and well, used to cash

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Speaker 1: still mean dividend growth and share by that absolutely party

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Speaker 1: that he answered it. He answered the short question, does

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Speaker 1: he know this is radio? He can go a little longer.

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Speaker 1: Want people to pay attention. You gotta just think for

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Speaker 1: a second there, Fred Lane, thank you so much. With

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Speaker 1: Lene generation of Raymond James. Thanks for listening to the

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Speaker 1: Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud,

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Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at

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Speaker 1: Tom Keane before the podcast. You can always catch us worldwide.

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Speaker 1: I'm Bloomberg Radio. You know what