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Speaker 2: So two thousand and nine, I think we got to
Speaker 2: six thousand, six hundred and you know a couple of
Speaker 2: Vikings wins. After that, Ryan Belski went long at the market.
Speaker 2: He writes these beautiful short paragraph by paragraph ed Heyman
Speaker 2: notes on having the courage to be in the market.
Speaker 2: There's five or six people that can do his act
Speaker 2: of just shut up and stay in the market. Update
Speaker 2: the after two thousand and nine view at Dow seven thousand,
Speaker 2: like it's an eight banger. You've done to fifty thousand,
Speaker 2: Give me the enthusias this morning.
Speaker 3: Well, it was hard to be bullish in two thousand
Speaker 3: and nine.
Speaker 4: It really was, with lots of fear.
Speaker 3: But we've seen the secular bowl market that we've been
Speaker 3: in print on since the two nine twenty ten period.
Speaker 3: See several different fits and starts with respect to cyclical
Speaker 3: bulls and cyclical bears. Right now in the fourth year
Speaker 3: of the most recent cyclical bull market, which the majority
Speaker 3: of the bull tom has been about momentum this year
Speaker 3: when we wrote a year ahead piece, which we had
Speaker 3: a great opportunity to talk about in January here on air.
Speaker 3: We've transitioned to an earnings driven market, and you talked
Speaker 3: about Dell coming into before this hit, and you talk
Speaker 3: about micround, and you talk about all these companies being
Speaker 3: rewarded for earnings.
Speaker 4: That's actually quite good.
Speaker 3: But what is not so good relative to momentum markets
Speaker 3: is that even though the market performance canwill and should
Speaker 3: be still positive, it's usually about half the rate of
Speaker 3: a momentum market on an annual basis, and there's more volatility.
Speaker 3: What we haven't seen is the correction or pullback that
Speaker 3: we typically do see in earnings driven markets. So we
Speaker 3: still think we're going to see some sort of a pullback.
Speaker 3: We don't like the time the market. It's very difficult
Speaker 3: to time the market. That's why we remain invested, but
Speaker 3: we would put our extra powder to work if when
Speaker 3: we see that pullback.
Speaker 5: So what do you put it to our keep put?
Speaker 6: I mean, I know you know what you've been calling for,
Speaker 6: is you know, a broadening sort of speak to us
Speaker 6: equity performance, right and to maybe value or small caps,
Speaker 6: but you know those sectors tend to be concentrated. What
Speaker 6: in financial healthcare? You know some of the underperformers of
Speaker 6: the S and P so to speak this year, talk
Speaker 6: to us a little bit about what you're buying when
Speaker 6: you sort of broaden out your allocation to value to
Speaker 6: small caps.
Speaker 4: It's a great question.
Speaker 3: So as as Tommy knows, I learned the business from
Speaker 3: a great gentleman by the name of William O'Neill, and
Speaker 3: he taught me how to be contrarian. And sometimes you
Speaker 3: have to think, uh from a contrarian perspective and be
Speaker 3: where the be where everybody else is not number one
Speaker 3: number two. From a value perspective, there are inherent fundamental
Speaker 3: value properties in the market, especially within finance. But you
Speaker 3: can also buy damian turnaround companies that are let's say,
Speaker 3: broken growth stocks that operationally have been broken due to
Speaker 3: management changes or missteps, that actually have a great platform
Speaker 3: or product. But we really think small cap small MidCap
Speaker 3: is going to be a very exciting place the next
Speaker 3: ten years. If you add up all the small MidCap
Speaker 3: companies in the S and P, one thousand by their
Speaker 3: market cap. They all add up to being less than
Speaker 3: the market cap of Apple, which to me is quite
Speaker 3: amazing and exciting because if you're a portfolio manager and
Speaker 3: a stock picker, you can have tracking here and beat
Speaker 3: the market. So we think ultimately that we're going to
Speaker 3: see a little bit of an earnings revision downgrade to
Speaker 3: the really big stocks that's going to fade into the
Speaker 3: other five hundred and ninety I'm sorry, four hundred and
Speaker 3: ninety three stocks in the S and P five hundred,
Speaker 3: which will ultimately drive more of a broadening out. Yes,
Speaker 3: that means yields will probably fall second half of the
Speaker 3: year and we're going to have some sort of retrieve
Speaker 3: from the conflict in the Middle East.
Speaker 6: Brian, we think of international stocks when you think of
Speaker 6: emerging market equity is up twenty three percent this year.
Speaker 3: God bless you that, I say, God bless you. I
Speaker 3: think it's an amazing run. You got to think back
Speaker 3: about this Nameian UH. After Liberation Day and the hatred
Speaker 3: for the US, everybody, a lot of people left the
Speaker 3: US and then they went to Canada, they went to Europe,
Speaker 3: they went to emerging markets, and they went on a
Speaker 3: big run. But currency isn't the only reason why you
Speaker 3: should buy a particular asset like that number one, number two.
Speaker 3: From a fundamental perspective, what are you buying?
Speaker 4: What are you buying?
Speaker 3: What do they make? What are their goods and services?
Speaker 3: And you got to be a little bit worried in
Speaker 3: terms of the quality of the service relative of the US.
Speaker 2: Bryan Beilski with this, Fumail is here, CEO Cio. He
Speaker 2: answers the phone, He does it.
Speaker 5: All question Tommy answers the questions shuffling around.
Speaker 2: Here, vikings did you take the big I'm I'm going no, no,
Speaker 2: I can't afford to watch JJ McCarthy sit on the
Speaker 2: bench and I can't.
Speaker 5: I can't afford that.
Speaker 2: Okay, it's our oligatory football. Let's get back to the market.
Speaker 2: And you are legend for going to like these money conferences.
Speaker 2: And what I see is a blending now of speculation
Speaker 2: into investment. You know you're gonna tell me keep these
Speaker 2: two separate accounts.
Speaker 4: Yea.
Speaker 2: Too many people aren't discuss the speculators thinking they're investing,
Speaker 2: but they're not.
Speaker 3: They're not investing, Tom I mean, listen, I think investing
Speaker 3: is like life and life is like investing. You have
Speaker 3: to tell stories, you have to live with the product,
Speaker 3: you have to understand the product, and that those are
Speaker 3: the stocks. So you're investing portfolio should be the ones
Speaker 3: that you're going to own, the names that you know,
Speaker 3: the one names you want to be in. And let's
Speaker 3: say your other side of things. Let's say you put
Speaker 3: a thousand dollars into an account, Tommy, and that's a
Speaker 3: thousand dollars that you don't need to live off of.
Speaker 3: Maybe that one thousand dollars turns into ten, maybe it
Speaker 3: turns into zero. That's your speculative, mom.
Speaker 6: Brian, you're one of the most successful financial advisors out there.
Speaker 6: I mean, I look, I can't even afford a financial advisor,
Speaker 6: tom But I have to ask this. Everybody who does
Speaker 6: afford can't afford when they're invested in SpaceX whatever shares
Speaker 6: somehow like they got in early whatever that stuff is.
Speaker 6: And you know, I'm looking at you, you know your
Speaker 6: recent note, and you're saying everyone is SpaceX frenzied. And
Speaker 6: then I see this headline saying they're lowering their IPO valuation.
Speaker 2: Talk George, and yeah, interesting, okay. Brian Belski Pily Gonx
Speaker 2: seventy seven pages.
Speaker 7: I read the pictures, go I actually.
Speaker 3: Think this is a good thing that we're seeing this,
Speaker 3: And then you heard about anthropic in the opening. I
Speaker 3: think it's actually good that we're kind of peeling us back.
Speaker 3: You ever, you noticed that that the conversation and what
Speaker 3: opening eyes talking about is much more conservative relatively was
Speaker 3: six months ago.
Speaker 4: That means they're performed.
Speaker 3: That's I mean, they're preparing to become a public company
Speaker 3: where we actually have to tell the truth.
Speaker 4: About what's going on.
Speaker 3: But we think the play on SpaceX is Tesla okay interesting?
Speaker 5: So it's not starlink. No, I think it's Tesla interesting.
Speaker 5: I mean, I don't know, is that really where the
Speaker 5: market is on it?
Speaker 3: I know, I don't think so. I mean I think
Speaker 3: I think people want to believe that. They want to
Speaker 3: get it for what it is, the SpaceX, and then
Speaker 3: see what happens our play longer term, because I try
Speaker 3: to look out a couple three years.
Speaker 4: I think they're going to combine the company.
Speaker 6: What do you think about the wealth creation we've seen
Speaker 6: here in the US and how basically what it seems
Speaker 6: like in order to keep the consumption train going, we
Speaker 6: see investors dipping into their savings, right. We just saw
Speaker 6: the data that came out on this because they aren't
Speaker 6: not making any more labor income. I mean, do you
Speaker 6: see that trend continuing? How far can we go for
Speaker 6: consumption to keep up the pace?
Speaker 3: I think we can continue to go for a while,
Speaker 3: especially because the wealth creation that has been created.
Speaker 4: You have to take profits to have those profits in
Speaker 4: your account too.
Speaker 3: And we've seen a lot of longer term investors stay
Speaker 3: in the market. So the best thing that we've seen
Speaker 3: with respect to the market has been that these high
Speaker 3: networth private wealth people have really been keeping this thing going.
Speaker 2: Nerd Patrol and Brian's so good he can do the
Speaker 2: NERD stuff and also talk basic as well. So let's
Speaker 2: go nerd right now. Are not and Cam Harvey of
Speaker 2: Duke and Rob are Nott have a spectacular effort out
Speaker 2: in the Financial Analyst Journal that takes fun of French
Speaker 2: value and growth and blows it up. And their research,
Speaker 2: really hyper detailed research, is you need fewer things in
Speaker 2: your portfolio, not one thousand stocks, right, one hundred stocks,
Speaker 2: et cetera. And the other thing they say to really
Speaker 2: add on is either by growth cheap and the next
Speaker 2: best thing is growth expensive, and instead of a two
Speaker 2: part solution growth and value, they come up with four
Speaker 2: box solution and the answers you want to buy growth
Speaker 2: at whatever price you could do it. How growthingness is
Speaker 2: Brian Belski right now.
Speaker 3: It's a great question. We're actually underweight the mag seven.
Speaker 3: But our US focused product is really more technology driven,
Speaker 3: communication services driven, more consistent growth. We like the lower
Speaker 3: standardyviation of earnings growth, meaning it's not as volatile. Number one,
Speaker 3: Number two, you're really talking about GARP too. If you
Speaker 3: look at the majority of the portfolio that you just explain,
Speaker 3: it's growth at a reasonable price, and then you have
Speaker 3: to play and respect these consistent growers that actually are
Speaker 3: high quality growers that.
Speaker 4: Have the momentum growth in that.
Speaker 3: The other thing, too, is that I think the growth
Speaker 3: indices and the value indices tom Or and Damien are
Speaker 3: actually a fallacy because you can have the reason why
Speaker 3: value has been doing so well is because Micron's in
Speaker 3: the value index, so is Micron value stock, and some
Speaker 3: of these stocks have a percentage and growth and percentage
Speaker 3: and value. So again the way that we look at
Speaker 3: it is let's just buy good values audible Korea.
Speaker 2: Is it the same thing in the Pacific RIM in
Speaker 2: Korea that all the movements in TSM. Well, yeah, basically
Speaker 2: they're the micron of the Pacific RIM.
Speaker 5: Right yeah.
Speaker 6: No, I mean, I don't want to get away from
Speaker 6: Brian Delski and talk about how equity flows impact effects
Speaker 6: and emerging markets, but.
Speaker 5: I'm happy to do it. We'd do that in a minute.
Speaker 6: But Brian, I have to ask you, because we have
Speaker 6: you here, all my friends on the golf course who
Speaker 6: have financial advasures talking about these tax advantaged funds, this
Speaker 6: tax efficient structure that allows them to take losses against their.
Speaker 2: Gains tax harvest.
Speaker 5: That's harvesting. That's the word I've been with.
Speaker 2: Thank you testing.
Speaker 6: I mean, what is I don't understand it. I mean,
Speaker 6: I'm you know, I'm just a high schooler here. I mean,
Speaker 6: talk to me a little bit about the attraction to that.
Speaker 6: I mean, how does it work?
Speaker 3: You know, I'm not technically a financial I'm just a
Speaker 3: I'm just a simple CEO and chief investment officer, sometimes strategist,
Speaker 3: and sometimes the chief bottle washer.
Speaker 4: So I actually that.
Speaker 3: That just blew me right, that Saint claud State Education,
Speaker 3: you just blew me right. I have no idea what
Speaker 3: that means.
Speaker 5: You know, I gotta get read on this time. There's
Speaker 5: a whole thing to manage losses.
Speaker 2: You and I've heard about age.
Speaker 4: I've heard about it, but I don't think exactly how.
Speaker 2: Okay, Well, the way it works is it's a way
Speaker 2: to develop out seventy five to one hundred and twenty
Speaker 2: five basis points of fees.
Speaker 8: This is really, this is really, you know, it's always
Speaker 8: everyone in short Hill, New Jersey, to just hear that.
Speaker 2: The first order, the first order recurrens function of this
Speaker 2: is real simple. You sell sell the first loss, I
Speaker 2: feel great. So the second loss you get out in
Speaker 2: the seventh, eighth and nine, ten loss and the fortune
Speaker 2: isn't working, is it?
Speaker 7: Now?
Speaker 3: You're talking Minnesota Twins baseball.
Speaker 5: Or are you talking New York to that's football fifty
Speaker 5: seven years to to be fifty eight. I mean, let's
Speaker 5: knock on wood. I mean it's almost.
Speaker 4: Fifty three for the for the next so let's go.
Speaker 5: Yeah, let's go house.
Speaker 2: Running a business. Let's finish up with us. You're sitting
Speaker 2: there yet, you know you were very comfortable with a
Speaker 2: fabulous bank and you know major shot that they've moved
Speaker 2: on from here. They survived bell ski walking up. Of
Speaker 2: course it is the door and that's great and you've
Speaker 2: been total class act about it. I know some Canadian
Speaker 2: firms have picked you up. For everybody out there that
Speaker 2: just dreams about doing a bell ska, what's the biggest headache?
Speaker 3: Well, you know, when you think about working for the
Speaker 3: man quote unquote for thirty six years, you think about
Speaker 3: all the bad stuff. There's actually some really good things
Speaker 3: working for the man. That includes compliance and legal and
Speaker 3: all that kind of stuff. You wake up at two
Speaker 3: o'clock in the morning sometimes and you're thinking, oh my gosh,
Speaker 3: am I going to be able to make payroll? And
Speaker 3: so it's equal parts excruciating, but it's exciting. We've we
Speaker 3: really wanted to execute on Canada first time because nine
Speaker 3: and a half of our twelve and a half billion
Speaker 3: we're in Canada. So we have great platform partners in
Speaker 3: RBC and National and now Ia Wealth in Canada, and
Speaker 3: we've executed on three ETFs and a mutual finding Canadas.
Speaker 3: We feel like the businesses is good there now. We
Speaker 3: last week we executed here on a brand new ETF
Speaker 3: and we've got some ore registered investment advisor partners here
Speaker 3: that we can be on the on the platform. What
Speaker 3: we do is provide a model for our value portfolio,
Speaker 3: our smid portfolio.
Speaker 4: We don't have clients. We just try to make people money.
Speaker 2: Well, TUNEA is just emailed in. He says, what's the ETF,
Speaker 2: what's the flavor of UTF you're doing with a four
Speaker 2: hundred others that were created.
Speaker 3: Here's the flavor you brought up the other part about
Speaker 3: owning all these stocks. Now, as you know, I was
Speaker 3: an institutional strategist and the majority of my career. So
Speaker 3: you walk into all the smart people at JP Morgan,
Speaker 3: they own three hundred and fifty stocks too many. What
Speaker 3: we have learned in our extensive back testing is that
Speaker 3: fifty stocks is.
Speaker 4: Kind of the magic number.
Speaker 2: You are correct, fifty stocks is I never give my
Speaker 2: opinion for Fidelity fifty And for the Sequoia people, what
Speaker 2: they invented was a miracle.
Speaker 4: Go yeah.
Speaker 3: So we run a focused portfolio that's forty five stocks,
Speaker 3: or we run a value portfolio that's fifty stocks. We
Speaker 3: run a smid portfolio that's seventy five stocks around diviting growth.
Speaker 3: That is about dividing growth companies that grow the divid
Speaker 3: in overtime. They have castfolios about the divinil to fifty
Speaker 3: stocks against the aristocrats, and then we run an all
Speaker 3: cap that we put everything all together in that.
Speaker 2: Okay, you want to squeeze one more in here.
Speaker 6: I mean, look, I'm just listening. I'm just learning here,
Speaker 6: you know. I mean this is really well to run
Speaker 6: small and MidCap.
Speaker 5: I mean this is fun.
Speaker 4: I think research about to have a fair child. Right,
Speaker 4: I have two children that I know of, and we
Speaker 4: run five. That was a joke. We have five portfolios.
Speaker 3: The smith is exciting because you can play longer term
Speaker 3: themes like we bought a company called Celsius a few
Speaker 3: years ago. On tennis shoes, shake shack, these names that
Speaker 3: you want to be in longer term that kind of
Speaker 3: people have forgotten. They talk about but they don't really
Speaker 3: own brands retail.
Speaker 2: I can emphasis the bottle that you just heard their folks. So,
Speaker 2: mister Belski on fifty stocks, I don't know if it's
Speaker 2: fifty to thirty, it's not my opinion. It matters. But
Speaker 2: this is the revolution of half a century, and I
Speaker 2: say this is we just had the death of mister
Speaker 2: market wits to go from three hundred stocks down somewhere
Speaker 2: in the vicinity south of one hundred stocks is the
Speaker 2: absolute foundational structure of modern management. How seriously, how do
Speaker 2: the Twins look? They beat the Red Sox.
Speaker 3: And now they go to Chicago and they get crushed.
Speaker 3: I mean they're there and listen. I like their uniforms,
Speaker 3: love their unis. I'll be there next week. It's an
Speaker 3: eight minute walk for my place in Minneapolis. That's probably
Speaker 3: the best part of my life in terms of being
Speaker 3: in Minneapolis, to be able to go the Twins, and.
Speaker 2: Then there's the Vikings. Brian Belski, thank you so much.
Speaker 2: With humilists, can't say enough. He spends more time with
Speaker 2: than with us.
Speaker 4: It's the afternoon when.
Speaker 9: Scott the answer is yes, okay.
Speaker 2: Brian Belski, thank you so much.
Speaker 7: Appreciated.
Speaker 2: Stay with us. More from Bloomberg Surveillance coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live
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Speaker 2: Just start strong and now. Lindsay Rosser joins us Golden
Speaker 2: Success Management.
Speaker 9: So how has.
Speaker 2: Life changed with a Mando line them darkening the door?
Speaker 2: I mean, she's a terror.
Speaker 10: It's wonderful. It's you know, it's it's another blonde talking credit.
Speaker 2: Better. That was such a good album time, Petty Blonde's
Speaker 2: talking credit. Actually, seriously, what do you learn from Amanda
Speaker 2: Lignum when you reader works? How does it help you allocate?
Speaker 11: Yeah?
Speaker 10: No, she's she's really helpful andsightful. One of the pieces
Speaker 10: she had recently was talking about private credit and not
Speaker 10: being concerned about it being a systematic risk that we
Speaker 10: feel if you look at non accruls i e. Is
Speaker 10: anything going bad in the pockets of private credit, those
Speaker 10: numbers are actually low on average. Obviously their pockets like
Speaker 10: software where there are some concerns, for example, or retail.
Speaker 10: But she really just gives you the numbers and gives
Speaker 10: you the facts, and that's what you need to be
Speaker 10: able to manage portfolios in this market. And it's all so,
Speaker 10: by the way, good to have a buddy.
Speaker 6: Well, well, lindsay, I mean, you know, private credit notwithstanding,
Speaker 6: I mean we know about all the landmines that are
Speaker 6: kind of lurking there.
Speaker 5: Let's talk about public credit. I'd love to call it.
Speaker 6: You know, our audience's attention to the fact that investment
Speaker 6: grade corporate credit spreads here in the US are at
Speaker 6: the lowest since ninety eight. I think if you look
Speaker 6: at em sovereign and US high yield credit spreads, you're
Speaker 6: talking lowest in so seven. I mean, this is almost
Speaker 6: twenty years here, So you know, what are we missing?
Speaker 6: I mean I would have thought that the demand for
Speaker 6: private credit would have crowded out the public market.
Speaker 5: That doesn't appear to be happening.
Speaker 10: Well, I think there are two things. One to start
Speaker 10: with your ladder point, there isn't a crowding out because
Speaker 10: there's just a ton of money out. Look at all
Speaker 10: these deals getting done. There's no pushback, there's no hesitancy
Speaker 10: back to where spreads are all time tights looking a
Speaker 10: twenty year window, There's been a big change in the
Speaker 10: constituents of the index.
Speaker 4: It's actually moved.
Speaker 10: In a way that we if you kind of adjust
Speaker 10: for the better credit quality, the shorter duration, we actually
Speaker 10: aren't at all time tights.
Speaker 7: There's a little bit more you can go.
Speaker 10: Now, now, let's be real that there's not a ton
Speaker 10: of a way We're not going to tighten another twenty
Speaker 10: basis points, but that perspective's helpful. What is really the
Speaker 10: most important thing are spreads justified? And when you look
Speaker 10: at earnings, you look at balance sheet, you look at
Speaker 10: again those technicals of cash answers.
Speaker 2: Yes, I was in Toronto a long time ago, back
Speaker 2: when the least were good, and I had the privilege
Speaker 2: of Sir John Templeton and room with myself. He was very,
Speaker 2: very kind, and he had that famous phrase, there will
Speaker 2: be a shortage of bonds here we are. Why Why
Speaker 2: is there a shortage of bonds where everybody's nuts to
Speaker 2: issue and everything gets gobbled up?
Speaker 10: Sure, I think it's the demographic story, right.
Speaker 2: So we're getting older and all that.
Speaker 9: You got it.
Speaker 10: You need more fixed income and look, it's fun to
Speaker 10: have stocks that are up, you know, twenty percent and
Speaker 10: twenty percent of ten percent excuse me completely in bonds.
Speaker 10: Come on, Tom, you're younger than that.
Speaker 7: Give me a break.
Speaker 6: Well, here's the thing, lindsay, I mean you call this
Speaker 6: here to my attention in your last note, and I
Speaker 6: heard you know, Kasmi and the guys at Cheaping Morgan
Speaker 6: talking about savings. You know, Joe Lupin talking about savings
Speaker 6: here in the US, the recent numbers that are out,
Speaker 6: I mean the fact that households are dipping into their
Speaker 6: savings yet again to offset you know, the reduction and
Speaker 6: labor income. How does that manifest itself in credit markets
Speaker 6: and demand for credit?
Speaker 5: I mean, will it eventually do that?
Speaker 10: So it's something that you have to watch on the dashboard,
Speaker 10: right So when you have to your point, spreadsnow tight?
Speaker 10: Remember all in yields very high, but yes, spreads tight.
Speaker 10: You need to have a dashboard of data that you
Speaker 10: watch like a hawk. One of them is how the
Speaker 10: consumer is doing. Why you care about that. Consumption is
Speaker 10: the biggest piece of GDP. It's also what fuels these companies,
Speaker 10: fuels these earnings. So right now the consumer is saying,
Speaker 10: got to keep consuming. I'm going to dip a little
Speaker 10: bit into my savings. And I think the bigger thing
Speaker 10: is is that the expectation on the consumer part. Sentiment, yes,
Speaker 10: is lower, but I don't think the expectation is that
Speaker 10: things are going to be this challenging for an extremely
Speaker 10: long period of time. I think there's this idea I'm
Speaker 10: dipping into my savings today. I'm not going to have
Speaker 10: to in six months time or a year.
Speaker 2: Where are you in sixty forty if you take the mix,
Speaker 2: where we are this equity, what's dell up like one
Speaker 2: hundred and twelve percent?
Speaker 5: Having a good night?
Speaker 2: This nut's time we're living in. What do you do
Speaker 2: with a classic sixty forty model?
Speaker 10: Yeah, So our views on the equity side is that
Speaker 10: we think we can hit eight thousand by the end
Speaker 10: of the year. We actually just upgraded that that would
Speaker 10: be EPs up twenty four percent. We think that that
Speaker 10: number is going to be up again next year, just less.
Speaker 10: So the view is that equity still have some room
Speaker 10: to run. On the fixed income side, like I said,
Speaker 10: yields are attractive, So I think it goes back to
Speaker 10: what are your needs? What are your liabilities? Sixty forty
Speaker 10: it doesn't work for everyone. So we don't think there's
Speaker 10: a one size fits all solution. And Goldman we're in
Speaker 10: the business of CUSTOMI solutions.
Speaker 2: Okay, we don't care the reason you're in here. Can
Speaker 2: you have you ever been at Madison Square Garden in
Speaker 2: the Goldman Sex Suite?
Speaker 7: No, not Sulman Sax Suite. Do you have the number?
Speaker 2: No?
Speaker 6: I can imagine what a ticket for Lindsay Man and
Speaker 6: the gold in the Golden sweite.
Speaker 5: That's going to go for it. That's a huge I.
Speaker 7: Mean I don't think like a month's trading room.
Speaker 5: I mean that is my would be my dream.
Speaker 2: I mean I could call me up last night and
Speaker 2: you know, like we got to get Lindsay here. I mean,
Speaker 2: this is exciting.
Speaker 5: This whole next thing very exciting.
Speaker 10: Yeah, you you probably don't want to go down this
Speaker 10: road with me because I am a Philadelphia person.
Speaker 5: And that's true.
Speaker 10: You could find me in tears on this program if
Speaker 10: we continue to were were.
Speaker 5: Talking about you?
Speaker 4: Where were you?
Speaker 5: You had the teethtach right, we were talking about.
Speaker 10: Yes, I uh it was my twentieth college reunion. To
Speaker 10: date myself so you can figure out my fixed income
Speaker 10: equity allocation. Uh so is this past weekend and go
Speaker 10: to our favorite place, Hogy Haven Ogi Hates which I
Speaker 10: went outside the comfort zone. I tried a new sandwich,
Speaker 10: which one just a typical like turkey, lettuce, tomato or
Speaker 10: mayo little mustard.
Speaker 2: See this is a difference. We go from Lindsay and
Speaker 2: Hoy Heaven. Tina Fordham hangs at the door Chester on
Speaker 2: Thursdays with an umbrella in her beverage. Lindsey, I gotta.
Speaker 7: Go, Lindsay, Robin, Lindsay so much with Goldman Satz.
Speaker 2: Working with a man what you call it blonds.
Speaker 7: And credit blonds and bonds blondes.
Speaker 5: And yes, that's great the podcast, right, thank you so much.
Speaker 2: Stay with us. More from Bloomberg Surveillance coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live
Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on
Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or
Speaker 1: watch us live on YouTube.
Speaker 2: Across this nation with the sun coming up on the
Speaker 2: West coast. Without question, this is the most important interview
Speaker 2: of the day. Josh Seagen is with Madison Reality Capital,
Speaker 2: and he does all sorts of stuff in real estate
Speaker 2: or that.
Speaker 9: But Josh, all that.
Speaker 2: Matters in this non rebound of office buildings empty in
Speaker 2: all of our cities is two nineteen and two twenty
Speaker 2: East forty second Street, which is Pfizer has a deadbeat
Speaker 2: building and they're turning it into condos. Is this condo
Speaker 2: conversion thing gonna work in real estate?
Speaker 9: It's actually it's rentals, so it's.
Speaker 2: Okay, real convert. How many amateur it is to me?
Speaker 2: Condos are rental, it's rentals.
Speaker 9: Is it going to work? We believe it will.
Speaker 11: There's been a huge lack of supply of housing in
Speaker 11: New York City, partially because of his owning constraints. It's
Speaker 11: been the tight market, and there was an over abundance
Speaker 11: of office post COVID. What really happened was in the
Speaker 11: fourth quarter of twenty four, New York City created a
Speaker 11: four to sixty seven New York State created a four
Speaker 11: to sixty seven M tax abatement which really aligned developers
Speaker 11: or incentivized developers to convert to multifamily with a pretty
Speaker 11: large taxibatement, a thirty five year tax abatement. So for
Speaker 11: providing a conversion at seventy five percent market rate twenty
Speaker 11: five percent affordable, you can get a long taxibabi.
Speaker 2: The buzzes demand is good. What about Cincinnati? What about
Speaker 2: what about who's completely empty? Los Angeles? I mean, are
Speaker 2: they going to do the same?
Speaker 9: So it's interesting.
Speaker 11: I think that New York kind of created a roadmap
Speaker 11: for other cities to follow suit, and we're starting to
Speaker 11: see that in DC in other markets where you're starting
Speaker 11: to see conversions happen in a Boston, so we believe
Speaker 11: it is the blueprint. And you know, the interesting thing
Speaker 11: in New York, as compared to some other places, office
Speaker 11: has really come back in New York in a big way.
Speaker 11: So a year ago I would have told you only
Speaker 11: the class A office is back, but now it's the A,
Speaker 11: A minus B plus interesting and.
Speaker 5: The ancillary way to play that is through hotels.
Speaker 6: And what I mean, right, aren't you working on the
Speaker 6: conversion the dominic into the new Soho with with Keane?
Speaker 6: I mean you're representing them on that redevelopment. And then
Speaker 6: there's a ton of other hotel deals by the way,
Speaker 6: that Madison's been involved with, like the addition in Nashville
Speaker 6: and the Gulch and then what was the other one
Speaker 6: you guys did I'm trying to remember anyway, whatever talk
Speaker 6: to us about you know these luxury kind of hotel
Speaker 6: slash mixed use residential the Ritz Carlton residences in West Palm,
Speaker 6: And I mean, is that really the path forward here
Speaker 6: when you're taking that approach?
Speaker 11: Well, what we're seeing in a number of cities right
Speaker 11: now is really great demand for condo with hotel right
Speaker 11: branded residences, and what really happens is you're seeing in
Speaker 11: some cases branded residence just a brand only going residence.
Speaker 11: And then another case is mixed use with a hotel
Speaker 11: and residences. And what I think buyers like is you're
Speaker 11: getting the amenities in service of a hotel with this
Speaker 11: sort of luxury, sort of convenience factor, and in many
Speaker 11: cases is a twenty percent premium to what a regular
Speaker 11: apartment would sell for in that market.
Speaker 9: With the brand appeal. We've been involved in four.
Speaker 11: Seasons hotel and residences Rich Carlton, We've been involved in
Speaker 11: Raffles hotel and residences.
Speaker 9: So it's been a theme in a number of markets
Speaker 9: throughout the US.
Speaker 6: So Josh, see, I get that business plan and that
Speaker 6: makes perfect sense to me. But then I look at
Speaker 6: the Bentley Residences in Sunny Aisles right with a elevator
Speaker 6: that takes your Bentley up to the whatever forty fifth
Speaker 6: floor I mean. And yet you know you're involved in
Speaker 6: dels like Matt talk to us about you know what
Speaker 6: you know, what is the fundamental you know view you
Speaker 6: take on that type of investment.
Speaker 11: Well, so there, you know, it did appeal to car enthusiasts.
Speaker 11: But what's interesting about Florida is in Florida, buyers put
Speaker 11: down a deposit and that deposit can be used for
Speaker 11: the capitalization of the deal.
Speaker 9: So it's a huge thing.
Speaker 11: So when we went into that deal, it was just
Speaker 11: a six hundred and thirty million dollars construction loan with
Speaker 11: an esteem developer in Miami.
Speaker 9: The building was basically fifty.
Speaker 11: Percent pre sold, very very unique, and typically what that
Speaker 11: means is you have twenty to fifty percent hard deposits
Speaker 11: that can go into the project before we even fund.
Speaker 9: Before you even did a hole exactly.
Speaker 11: So we just did another deal structurings the engineering before
Speaker 11: Carlton Residences in West Palm, and by the time we closed,
Speaker 11: it was seventy percent sold.
Speaker 2: You guys are too fancy, I mean, Alexis and I
Speaker 2: are just saying, how close are we to the Ambassador
Speaker 2: Liquor store on Second Avenue And what's the rent in
Speaker 2: the Pfiser building going to be?
Speaker 11: Roughly So we believed, you know, when we honestly, yeah,
Speaker 11: that one hundred dollars of foot So now come on, talk.
Speaker 2: More per month a two bedroom, three bedroom thing ten
Speaker 2: thousand bucks seven seven eight thousand, Okay, great? The bottom
Speaker 2: line across this nation is we have a housing crisis.
Speaker 2: We look out and they're these skyscrapers at the back
Speaker 2: end of Central Park South. Are those people paying their
Speaker 2: fair share of property taxes?
Speaker 9: Those people in terms of like owners, just owners.
Speaker 2: Yeah, the people that don't live in those properties because
Speaker 2: it's just sunk money from Asia. That's the stereotype, right, Well,
Speaker 2: are they or do they have an abatement like real
Speaker 2: people living in the Pfiser building where the only way
Speaker 2: it gets done as an abatement.
Speaker 11: Well, condos don't have abatements anymore really in New York City.
Speaker 11: So so that's important to note they're paying real taxes, right.
Speaker 9: So years ago, you know, twenty years ago, there was.
Speaker 11: A tax abatement and that applied to condos and there
Speaker 11: are some big projects on fifty seven and obviously rentals,
Speaker 11: you know, still have the abatement.
Speaker 2: Damien wants to get in it.
Speaker 5: I got left.
Speaker 6: I mean, like we're getting so deep into the weeds.
Speaker 6: But you know, what are really wants to know is
Speaker 6: we just saw US treasury yields rise fifty basis points,
Speaker 6: you know, like I mean in the drop of the hat,
Speaker 6: and that can't be good for New investment right. I mean,
Speaker 6: so talk to us a little bit about, you know,
Speaker 6: rate volatility in the current environment. Does it need to
Speaker 6: come down in order for deals to get done? What
Speaker 6: are you seeing, you know, on the ground.
Speaker 11: So over the last twelve months, we've seen spreads compress,
Speaker 11: which was a huge thing for real estate. So while
Speaker 11: base rates kind of stayed relatively high, spreads came down
Speaker 11: and what we started to see was the wheels getting
Speaker 11: sort of greased in terms of the investment sale market. Now,
Speaker 11: some of that came into the new year with a
Speaker 11: lot of optimism there's gonna be a lot more sales,
Speaker 11: and it's petered out a little bit because of this
Speaker 11: volatility and rates. So I think that you're starting to
Speaker 11: see more green shoots in terms of like investment sale activity.
Speaker 11: But it kind of like ebbs and flow is based
Speaker 11: on the rate environment.
Speaker 2: Good time for one more question. What's your advice to
Speaker 2: the mayor? He's in like one hundred days. I guess
Speaker 2: there was a honeymoon. Honeymoon's over. Don't we have a pet?
Speaker 2: We have a your second place in Manhattan? Now you
Speaker 2: have to pay a tax on that, Damien.
Speaker 6: Well, I mean I live in Westchester, I know, I
Speaker 6: know my second place in Manhattan. I was thinking about that.
Speaker 6: What happens is when you're when you when your children
Speaker 6: get older. I think the move that a lot of
Speaker 6: parents are doing is they're trying to buy a place
Speaker 6: in Manhattan and then they're going to lease it out
Speaker 6: to their kids because they can't afford the right to devisor.
Speaker 2: But what's your advice to the men.
Speaker 9: Don't bite the hand that feeds you exactly. Advice.
Speaker 11: You know, at the end of the day, there's there's
Speaker 11: real business that wants to be here. Actually from a
Speaker 11: business standpoint, you're seeing tenants want to expand, some AI
Speaker 11: tenants financial services.
Speaker 9: Right at the end of the day, they can go
Speaker 9: anywhere they want to go.
Speaker 2: What's the symbolism of the related property Right behind the
Speaker 2: General Motors building on Madison Avenue, it's a hole in
Speaker 2: the ground and boy is it going up fast.
Speaker 11: Well, it's one of a handful of brand new offices.
Speaker 11: And it sort of goes to the trend that I said,
Speaker 11: which is top office rents. Rents at the top I
Speaker 11: mean some are three hundred dollars a foot right now. Wow,
Speaker 11: So you know it makes a lot of sense and that.
Speaker 6: Is that the Diamond District was that? That is that the
Speaker 6: building to run. There's another one right there, that's right there. Unbelievable, Josh,
Speaker 6: this is Judge going stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live
Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on
Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or
Speaker 1: watch us live on YouTube.
Speaker 2: So two thousand and nine, I think we got to
Speaker 2: six thousand, six hundred and you know, a couple of
Speaker 2: Vikings wins. After that, Ryan Belski went long at the market.
Speaker 2: He writes these beautiful short paragraph by paragraph ed Heiman
Speaker 2: notes on having the courage to be in the market.
Speaker 2: There's five or six people that can do his act
Speaker 2: of just shut up and stay in the market. Update
Speaker 2: the after two thousand and nine view at Dow seven thousand,
Speaker 2: like it's an eight bang. You've done to fifty thousand.
Speaker 2: Give me the enthusiasm this morning.
Speaker 3: Well, it was hard to be bullish in two thousand
Speaker 3: and nine.
Speaker 4: It really was, with lots of fear.
Speaker 3: But we've seen the secular bull market that we've been
Speaker 3: in print on since the two nine twenty ten periods
Speaker 3: see several different fits and starts with respect to cyclical
Speaker 3: bowls and cyclical bears. Right now in the fourth year
Speaker 3: of the most recent cyclical bull market, which the majority
Speaker 3: of the bull tom has been about momentum.
Speaker 4: This year when we wrote a year ahead piece, which
Speaker 4: we had a.
Speaker 3: Great opportunity to talk about in January here on air,
Speaker 3: we've transitioned to an earnings driven market. And you talked
Speaker 3: about Dell coming into before this hit, and you talk
Speaker 3: about micround, and you talk about all these companies being
Speaker 3: rewarded for earnings.
Speaker 4: That's actually quite good.
Speaker 3: But what is not so good relative to momentum markets
Speaker 3: is that even though the market performance canwill and should
Speaker 3: be still positive, it's usually about half the rate of
Speaker 3: a momentum market on an annual basis, and there's more volatility.
Speaker 3: What we haven't seen is the correction or pullback that
Speaker 3: we typically do see in earnings driven markets. So we
Speaker 3: still think we're going to see some sort of a pullback.
Speaker 3: We don't like the time the market. It's very difficult
Speaker 3: to time the market. That's why we remain invested. But
Speaker 3: we would put our extra powder to work if when
Speaker 3: we see that pullback.
Speaker 5: So what do you put it to our teput?
Speaker 6: I mean, I know you know what you've been calling for,
Speaker 6: is you know, a broadening sort of speak the US
Speaker 6: equity performance right and to maybe value or small caps.
Speaker 6: But you know those sectors tend to be concentrated. What
Speaker 6: in financial healthcare? You know some of the underperformers of
Speaker 6: the S and P so to speak this year, talk
Speaker 6: to us a little bit about what you're buying when
Speaker 6: you sort of broaden out your allocation to value to
Speaker 6: small caps.
Speaker 4: It's a great question.
Speaker 3: So as as Tommy knows, I learned the business from
Speaker 3: a great gentleman by the name of William O'Neill, and
Speaker 3: he taught me how to be contrarian. And sometimes you
Speaker 3: have to think, uh, from a contrarian perspective and be
Speaker 3: where the be where everybody else is not number one
Speaker 3: number two. From a value perspective, there are inherent funnel
Speaker 3: value properties in the market, especially within financials. But you
Speaker 3: can also buy damian turnaround companies that are let's say
Speaker 3: broken growth stocks that operationally have been broken due to
Speaker 3: management changes or missteps, that actually have a great platform
Speaker 3: or product. But we really think small cap small MidCap
Speaker 3: is going to be a very exciting place the next
Speaker 3: ten years. If you add up all the small MidCap
Speaker 3: companies in the S and P one thousand by their
Speaker 3: market cap, they all add up to being less than
Speaker 3: the market cap of Apple, which to me is quite
Speaker 3: amazing and exciting because if you're a portfolio manager and
Speaker 3: a stock picker, you can have tracking here and beat
Speaker 3: the market. So we think ultimately that we're going to
Speaker 3: see a little bit of an earnings revision downgrade to
Speaker 3: the really big stocks that's going to fade into the
Speaker 3: other five hundred and ninety I'm sorry, four hundred and
Speaker 3: ninety three stocks in the S and P five hundred,
Speaker 3: which will ultimately drive more of a broadening out. Yes,
Speaker 3: that means yields will probably fall second half of the
Speaker 3: year and we're going to have some sort of retrieve
Speaker 3: from the conflict in the Middle East.
Speaker 6: Brian, we think of international stocks, we think of emerging
Speaker 6: market equity is up twenty three percent this year.
Speaker 3: God bless you, that's I say, God bless you. I
Speaker 3: think it's been an amazing run. You got to think
Speaker 3: back about this Nameian Uh after Liberation Day and the
Speaker 3: hatred for the US, everybody, a lot of people left
Speaker 3: the US, and then they went to Canada, they went
Speaker 3: to Europe, they went to emerging markets, and they went
Speaker 3: on a big run. But currency isn't the only reason
Speaker 3: why you should buy a particular asset like that number one,
Speaker 3: number two. From a fundamental perspective, what are you buying?
Speaker 3: What are you buying? What do they make? What are
Speaker 3: their goods and services? And you got to be a
Speaker 3: little bit worried in terms of the quality of the
Speaker 3: service relative of the US.
Speaker 2: Bryan Beilski with US Humil is here, CEO Cio. He
Speaker 2: answers the phone, he does.
Speaker 9: It all question.
Speaker 5: Tommy answers the question.
Speaker 2: Shuffling around your vikings, did you take the big I'm
Speaker 2: going no, no, I can't afford to watch JJ McCarthy
Speaker 2: sit on the bench and I can't.
Speaker 5: I can't afford that.
Speaker 2: Okay, it's our bligatory flipball. Let's get back to the market.
Speaker 2: And you are legend for going to like these money conferences.
Speaker 2: And what I see is a blending now speculation into investment.
Speaker 2: I know you're gonna tell me keep these two separate
Speaker 2: accounts Yeah. Too many people aren't discuss the speculators thinking
Speaker 2: they're investing, but they're not.
Speaker 3: They're not investing, Tom. I mean, listen, I think investing
Speaker 3: is like life, and life is like investing. You have
Speaker 3: to tell stories, you have to live with the product,
Speaker 3: you have to understand the product, and that those are
Speaker 3: the stocks.
Speaker 4: So you're investing portfolio.
Speaker 3: Should be the ones that you're going to own, the
Speaker 3: names that you know, the one names you want to
Speaker 3: be in.
Speaker 4: And let's say your other side of things. Let's say
Speaker 4: you put a thousand dollars.
Speaker 3: Into an account, Tommy, and that's a thousand dollars that
Speaker 3: you don't need to live off of. Maybe that one
Speaker 3: thousand dollars turns into ten, maybe it turns into zero.
Speaker 3: That's your speculative.
Speaker 2: Mom.
Speaker 6: Brian, you're one of the most successful financial advisors out there.
Speaker 6: I mean, I look, I can't even afford a financial advisor, Tom,
Speaker 6: But I have to ask this. Everybody who does afford
Speaker 6: can't afford when they're invested in SpaceX whatever shares somehow
Speaker 6: like they got in early whatever that stuff is. And
Speaker 6: you know, I'm looking at you, you know your recent note,
Speaker 6: and you're saying everyone is SpaceX frenzied, and then I
Speaker 6: see this headline saying they're lowering their IPO valuation talking
Speaker 6: George and.
Speaker 12: This yeah, interesting, okay Brian Belski, Pily God SpaceX seventy
Speaker 12: seven pages.
Speaker 7: I read the pictures, go I actually.
Speaker 3: Think this is a good thing that we're seeing this.
Speaker 3: And then you heard about anthropic in the opening. I
Speaker 3: think it's actually good that we're kind of peeling us back.
Speaker 3: You ever, you noticed that that the conversation and what
Speaker 3: Opening Eye is talking about is much more conservative relatively
Speaker 3: was six months ago.
Speaker 4: That means they're performed.
Speaker 3: That's mean they're preparing to become a public company where
Speaker 3: we actually have to tell the truth about what's going on.
Speaker 3: But we think the play on SpaceX is Tesla okay interesting.
Speaker 5: So it's not starlink.
Speaker 4: No, I think it's Tesla interesting.
Speaker 5: I mean, I I don't know, is that really where
Speaker 5: the market is on it?
Speaker 4: I know, I don't think so.
Speaker 3: I mean, I think I think people want to believe
Speaker 3: that they want to get it for what it is,
Speaker 3: the SpaceX, and then see what happens our play longer term.
Speaker 3: Because I try to look out a couple three years.
Speaker 4: I think they're going to combine the company.
Speaker 6: What do you think about the wealth creation we've seen
Speaker 6: here in the u US and how basically what it
Speaker 6: seems like in order to keep the consumption train going.
Speaker 6: We see investors dipping into their savings, right, we just
Speaker 6: saw the data that came out on this because they
Speaker 6: aren't not making any more labor income. I mean, do
Speaker 6: you see that trend continuing? How far can we go
Speaker 6: for consumption to keep up the pace?
Speaker 3: I think we can continue to go for a while,
Speaker 3: especially because the wealth creation that has been created, you
Speaker 3: have to take profits to have those profits.
Speaker 4: In your account too.
Speaker 3: And we've seen a lot of longer term investors stay
Speaker 3: in the market. So the best thing that we've seen
Speaker 3: with respect to the market, it has been that these
Speaker 3: high networth private wealth people have really been keeping this
Speaker 3: thing going.
Speaker 2: Nerd patrol and Brian's so good. He can do the
Speaker 2: NERD stuff and also talk basic as well. So let's
Speaker 2: go nerd right now. Are Not and Cam Harvey of
Speaker 2: Duke and Rob are Not have a spectacular effort out
Speaker 2: in the Financial Analyst Journal that takes fun of French
Speaker 2: value and growth and blows it up, and their research
Speaker 2: really hyper detailed research is you need fewer things in
Speaker 2: your portfolio, not a thousand stocks, one hundred stocks, et cetera.
Speaker 2: And the other thing they say to really add on
Speaker 2: is either by growth cheap and the next best thing
Speaker 2: is growth expensive. And instead of a two part solution
Speaker 2: growth and value, they come up with four box solution.
Speaker 2: And the answers you want to buy growth at whatever
Speaker 2: price you can do it. How growthingness is Brian Belski Right.
Speaker 3: Now, it's a great question. We're actually underweight the Meg seven.
Speaker 3: But our US focused product is really more technology driven,
Speaker 3: communication services driven.
Speaker 4: More consistent growth.
Speaker 3: We like the lower standard deviation of earnings growth, meaning
Speaker 3: it's not as volatile Number one.
Speaker 4: Number two, you're really talking about GARP too.
Speaker 3: If you look at the majority of the portfolio that
Speaker 3: you just explain, it's growth at a reasonable price, and
Speaker 3: then you have to play and respect these consistent growers
Speaker 3: that actually are high quality growers that.
Speaker 4: Have the momentum growth in that.
Speaker 3: The other thing too, is that I think the growth
Speaker 3: indices and the value indices or and damien are actually
Speaker 3: a fallacy because you can have the reason why value
Speaker 3: has been doing so well is because Micron's in the
Speaker 3: value index, so is Micron value stock. And some of
Speaker 3: these stocks have a percentage and growth and percentage and value.
Speaker 3: So again the way that we look at it is,
Speaker 3: let's just buy good values audible Korea.
Speaker 2: Is it the same thing in the Pacific RIM in
Speaker 2: Korea that all the movements in TSM s. Well, yeah,
Speaker 2: basically they're the Micron of the Pacific RIM.
Speaker 5: Right yeah.
Speaker 6: No, I mean I don't want to get away from
Speaker 6: Brian Belsky and talk about how equity flows impact effects
Speaker 6: and emerging markets, but I'm happy to do it. We'd
Speaker 6: do that in a minute. But Brian, I have to
Speaker 6: ask you, because we have you here, all my friends
Speaker 6: on the golf course who have financial advisures talking about
Speaker 6: these tax advantaged funds, this tax efficient structure that allows
Speaker 6: them to take losses against their gains.
Speaker 2: Tax harvest.
Speaker 5: That's harvestly. That's the word I've been with. Thank you, tabs.
Speaker 6: I mean, what is I don't understand it. I mean,
Speaker 6: I'm you know, I'm just a high schooler here. I mean,
Speaker 6: talk to me a little bit about the attraction to that.
Speaker 6: I mean, how does it work?
Speaker 3: You know, I'm not technically a financial advisor. I'm just
Speaker 3: a I'm just a simple CEO and chief investment officer,
Speaker 3: sometimes strategist and sometimes.
Speaker 4: The chief bottle washer. So I actually that that just
Speaker 4: blew me right.
Speaker 7: That Saint claued State Education, you just blew me right.
Speaker 4: I have no idea what that means.
Speaker 5: You know, I gotta get I'm gonna get to read
Speaker 5: on this time.
Speaker 2: There's a whole thing to manage losses. You and I
Speaker 2: heard about age.
Speaker 4: I've heard about it, but I don't think exactly how.
Speaker 2: Okay, Well, the way it works is it's a way
Speaker 2: to develop out seventy five to one hundred and twenty
Speaker 2: five basis points of fees.
Speaker 8: This is really, this is really you know, it's always
Speaker 8: everyone in nice Short Hills, New Jersey to just hear that.
Speaker 2: The first order, the first order recurrens function of this
Speaker 2: is real simple. You sell sell the first loss, I
Speaker 2: feel great. So the second loss you get out itarly,
Speaker 2: the seventh, eighth, and ninety the ten loss, and the
Speaker 2: fortune isn't working, is it?
Speaker 12: Now?
Speaker 3: You're talking Minnesota Twins baseball or are.
Speaker 5: You talking New York to that's football fifty seven years
Speaker 5: to to be fifty eight. I mean, let'sknock on wood.
Speaker 5: I mean it's almost stake.
Speaker 3: It's fifty three for the for the next so let's
Speaker 3: go Yeah, let's go house.
Speaker 2: Running a business. Let's finish up with Yes, you're sitting there.
Speaker 2: You know, you were very comfortable with a fabulous bank
Speaker 2: and you know, major shot that they've moved on from here,
Speaker 2: they survived bell ski walking up. Of course it is
Speaker 2: the door and that's great, and you've been total class
Speaker 2: act about it. I know some Canadian firms have picked
Speaker 2: you up. For everybody out there that just dreams about
Speaker 2: doing a bell ski, what's the biggest headache?
Speaker 3: Well, you know, when you think about working for the
Speaker 3: man quote unquote for thirty six years, you think about
Speaker 3: all the bad stuff. There's actually some really good things
Speaker 3: working for the man. That includes compliance and legal and
Speaker 3: all that kind of stuff. You wake up at two
Speaker 3: o'clock in the morning sometimes and you're thinking, oh my gosh,
Speaker 3: am I going to be able to make payroll? And
Speaker 3: so it's equal parts excruciating, but it's exciting. We've we
Speaker 3: really wanted to execute on Canada first time because nine
Speaker 3: and a half of our twelve and a half billion
Speaker 3: we're in Canada, so we have great platform partners in
Speaker 3: RBC and National and now Ia Wealth in Canada, and
Speaker 3: we've executed on three et in a mutual finding canvas.
Speaker 4: We feel like the business is good there. Now.
Speaker 3: We last week we executed here on a brand new
Speaker 3: ETF and we've got some ore registered investment advisor partners
Speaker 3: here that we can be on the on the platform.
Speaker 3: What we do is provide a model for our value portfolio,
Speaker 3: our smid portfolio.
Speaker 4: We don't have clients. We just try to make people money.
Speaker 2: No TUNEA is just emailed in. He'says, what's the ETF.
Speaker 2: What's the flavor of UTF you're doing with a four
Speaker 2: hundred others that were created?
Speaker 3: Here's the flavor you brought up the other part about
Speaker 3: owning all these stocks. Now, as you know, I was
Speaker 3: an instiutional strategist and the majority of my career. So
Speaker 3: you walk into all the smart people at JP Morgan,
Speaker 3: they own three hundred and fifty stocks too many. What
Speaker 3: we have learned in our extensive back testing is that
Speaker 3: fifty stocks is.
Speaker 4: Kind of a magic number.
Speaker 2: You are correct, fifty stocks is I never give my
Speaker 2: opinion for Fidelity fifty And for the Sequoia people, what
Speaker 2: they invented was a miracle.
Speaker 12: Go.
Speaker 4: Yeah.
Speaker 3: So we run a focused portfolio that's forty five stocks,
Speaker 3: or we run a value portfolio that's fifty stocks. We
Speaker 3: run a smid portfolio that's seventy five stocks. Dividend growth
Speaker 3: that is about dividing growth companies that grow.
Speaker 4: The dividend overtime.
Speaker 3: They have cashfolios about diviningield to fifty stocks against the aristocrats.
Speaker 3: And then we run an all cap that we put
Speaker 3: everything all together in that.
Speaker 2: Okay, you want to squeeze one more in here.
Speaker 6: I mean, look, I'm just listening. I'm just learning here,
Speaker 6: you know. I mean this is really well in order
Speaker 6: to run small and MidCap.
Speaker 3: I mean this is fund I think research have a
Speaker 3: fair child, right, I have two children that I know of,
Speaker 3: and we run five.
Speaker 4: That was a joke. We have five portfolios.
Speaker 3: The Smith is exciting because you can play longer term themes,
Speaker 3: like we bought a company called Celsius a few years
Speaker 3: ago on tennis shoes, shake shack, these names that you
Speaker 3: want to be in longer term that kind of people
Speaker 3: have forgotten. They talk about, but they don't really own brands.
Speaker 5: Retail.
Speaker 2: I can emphasis the bottle that you just heard their folks. So,
Speaker 2: mister Belski on fifty stocks, I don't know if it's
Speaker 2: fifty to thirty. It's not my opinion. It matters. But
Speaker 2: this is the revolution of half a century, and I
Speaker 2: say this is we just had the death of mister
Speaker 2: Marco Wits to go from three hundred stocks down somewhere
Speaker 2: in the vicinity south of one hundred stocks is the
Speaker 2: absolute foundational structure of modern management. How seriously, how do
Speaker 2: the Twins look? They beat the Red Sox.
Speaker 4: Yeah, and now they go to Chicago and they get crushed.
Speaker 4: I mean they're there and listen.
Speaker 3: I like their uniforms, love their unis. I'll be there
Speaker 3: next week. It's an eight minute walk for my place
Speaker 3: in Minneapolis. That's probably the best part of my life
Speaker 3: in terms of being in Minneapolis, to be able to
Speaker 3: go the Twins.
Speaker 2: And then there's the Vikings. Brian Belski, thank you so much.
Speaker 2: With humilists, can't say enough. He spends more time with
Speaker 2: the wa than with us.
Speaker 7: It's the afternoon when Scott the answer is yes, okay.
Speaker 2: Brian Belski, thank you so much.
Speaker 7: Appreciate it.
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