WEBVTT - Single Best Idea with Tom Keene: Geoffrey Yu & David Doyle

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio, news.

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<v Speaker 2>Single best idea and when the news changes, we change.

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<v Speaker 2>Yesterday we wrote David Gera in Rio and it was

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<v Speaker 2>a G twenty meeting and the muckety MUCKs get together

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<v Speaker 2>and all that, and it's a time for you know,

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<v Speaker 2>we played Barry Manilow Lola and copa cabana and all that,

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<v Speaker 2>and there's some lightness a caparina and where's David going

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<v Speaker 2>to dinner? And then just like that it changes into

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<v Speaker 2>deadly serious news. A link Tempco vote, Lockheed Martin missil

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<v Speaker 2>that goes at mock three. That's the headline. This thing

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<v Speaker 2>moves as fast as anything out there, one hundred or

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<v Speaker 2>whatever miles into Russian territory and the facts changes. We're

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<v Speaker 2>live on air headline and some mister Lavrov of Russia

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<v Speaker 2>move the markets. We try to get conversation previously scheduled.

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<v Speaker 2>Jeffrey you from B and Y and Jeffery you of

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<v Speaker 2>course talking about finance and investment. We asked jeff for

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<v Speaker 2>you do you have to look at geopolitics.

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<v Speaker 3>You can never ignore a geopolitics. So it's your fiduciary

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<v Speaker 3>responsibility to have those fundamental allocations. You know that premiure

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<v Speaker 3>within your asset allocation full stop. So that that I

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<v Speaker 3>think is the case in terms of why despite the

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<v Speaker 3>lack of a fiscal argument in the US, we still

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<v Speaker 3>see international investors being overweight US treasuries or at least

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<v Speaker 3>if I look at duration the tenure plus based on

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<v Speaker 3>our CUS Studio data, that hasn't been that much selling

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<v Speaker 3>over the last few weeks or so. And this is

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<v Speaker 3>another reason why you want to hold onto those treasuries

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<v Speaker 3>for now, it helps with the US sustain its fiscal spending.

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<v Speaker 3>But over the medium to longer term there's a story there.

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<v Speaker 3>But you want to overweight, to be weighting at these

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<v Speaker 3>assets even though it doesn't give you a strong yield,

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<v Speaker 3>or you worry about other forms of premium as well.

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<v Speaker 3>But then we fall back to diversification again. You want

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<v Speaker 3>to be diversified. You look at your portfolio, your overweight dollars,

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<v Speaker 3>overweight treasuries. Where are markets that you can afford to

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<v Speaker 3>add to your weightings decorrelated India is a very good example,

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<v Speaker 3>and that those are the other correlations we're looking.

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<v Speaker 2>At too, Jeff. For you bing why very typically and

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<v Speaker 2>I'm guilty of this, we really fight against it every day.

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<v Speaker 2>But the bottom line, folks, is gloom cells. Somebody worried

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<v Speaker 2>and their angst and they're wringing their hands. It's always better.

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<v Speaker 2>It just it works. So we really focus people that say,

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<v Speaker 2>you know what, we're optimistic. David Doyle has led the

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<v Speaker 2>charger on this at Macquarie. His notes very very constructive,

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<v Speaker 2>even if maybe it's getting along in the toothier three

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<v Speaker 2>percent real GDP five percent nomenal GDP. Here is David

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<v Speaker 2>Doyle or Macquarie, his optimism and the American consumer.

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<v Speaker 4>From what we've looked at when it comes to wage gains,

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<v Speaker 4>it's been broad based. So when you look at wages

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<v Speaker 4>as being the driver of consumption, that broad based wage

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<v Speaker 4>gains we think is propelling things across the spectrum of

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<v Speaker 4>income earners. Now you may see some disproportionate gains from

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<v Speaker 4>higher income earners due to the wealth effect from the

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<v Speaker 4>strength and equity markets, but overall we think it's almost

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<v Speaker 4>all income groups that are participating.

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<v Speaker 2>David Doyle at Macquarie really thanks to our team. We

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<v Speaker 2>had to blow up the show today. The interns got

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<v Speaker 2>together with Eric and really put together a terrific effort.

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<v Speaker 2>David Gerr of course in Rio on short notice. Tina

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<v Speaker 2>Fordam was with his Ford and Global Insight look for

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<v Speaker 2>that out on Bloomberg Digital. She was absolutely lights out

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<v Speaker 2>on the optionality that mister putin faces in a special

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<v Speaker 2>thanks to Bloomberg's Mark Champion. Mark Champion was the editor

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<v Speaker 2>of the Moscow Times in the early middle nineteen nineties.

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<v Speaker 2>He has encyclopedic knowledge east of the Eastern Front, and

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<v Speaker 2>we really thank Mark Champion for joining as well on

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<v Speaker 2>your commute Look first ninety nine to one FM in Washington,

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<v Speaker 2>Up the Corridor, Bloomberg eleven three to zero in New York,

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