WEBVTT - Single Best Idea with Tom Keene: Jim Caron & Libby Cantrill

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Single best idea is

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<v Speaker 1>that every day we try to have an eclectic set

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<v Speaker 1>of conversations. I'm not going to mince words. Sometimes we fail.

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<v Speaker 1>We do that, we take risks, we take challenges, and

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<v Speaker 1>sometimes it doesn't work out. Today was one of those

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<v Speaker 1>days where everything was clicking top to about him lebby Kentroll.

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<v Speaker 1>Let me get to that in a moment. Jim Caaren

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<v Speaker 1>first from Morgan Stanley, and he was absolutely brilliant on

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<v Speaker 1>the partial differentials of equities to bonds, really sophisticated conversation

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<v Speaker 1>with a physicist from Morgan Stanley.

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<v Speaker 2>So it really becomes a question of how you diversify

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<v Speaker 2>across the equity market. So clearly you want to have

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<v Speaker 2>some growth, you want to have some value. You also

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<v Speaker 2>want to have some high quality and defensives mixed in

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<v Speaker 2>there too. The reality though, is that you can still

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<v Speaker 2>use bonds as a hedge, but you should have less

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<v Speaker 2>than index duration in your bond portfolio. So I think

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<v Speaker 2>that most people are making is that they say that

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<v Speaker 2>their neutral allocation of fixed income is just to be

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<v Speaker 2>neutral the index and just to have the same duration

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<v Speaker 2>as the index. I would argue that having about a

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<v Speaker 2>year's less one year less of duration in your fixing

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<v Speaker 2>car portfolio would do a better job at hedging gear

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<v Speaker 2>overall your overall equity exposure.

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<v Speaker 1>Jim Careen there with an institutional chat. But to make clear,

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<v Speaker 1>the idea of bringing in your duration is the amount

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<v Speaker 1>of time of your average bond and your average portfolio,

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<v Speaker 1>and that timeline issue of how you set up your

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<v Speaker 1>bond portfolio is a big, big deal. Letty Cantrell with

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<v Speaker 1>this with pimcoh on the government. Her note was completely

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<v Speaker 1>inside baseball about Senate races getting out to the first

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<v Speaker 1>Tuesday of November after techs. The question is where is

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<v Speaker 1>a new kind of Democrat Libby Cantrell of PIMCO.

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<v Speaker 3>There there, Tom, I just feel like they're keeping their

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<v Speaker 3>their heads sort of in the sand right now, but there.

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<v Speaker 3>I mean, look, the new Democrats, the coalition on Capitol

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<v Speaker 3>Hill are sort of the this generation of blue Dogs,

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<v Speaker 3>and you know, admittedly they are more liberal than the

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<v Speaker 3>blue dogs that we used to know, but they're still there.

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<v Speaker 3>And I think that there is this sort of division

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<v Speaker 3>within the Democratic Party right now, sort of a statement

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<v Speaker 3>of the obvious that you know, what wins elections. Is

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<v Speaker 3>it going to be this more sort of centrist Democrat,

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<v Speaker 3>this kind of center left Democrat, or a progressive left

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<v Speaker 3>and I think that is playing at But like the Republicans,

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<v Speaker 3>I think the Democrats have had mixed success in terms

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<v Speaker 3>of who they're running this cycle. You could say that

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<v Speaker 3>Graham Platner and Maine is actually a candidate that does

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<v Speaker 3>seem like he could. He kind of understands the zeitgeist

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<v Speaker 3>of the voters in Maine I want to talk to.

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<v Speaker 3>I want characterized him as a blue dog Democrat, but

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<v Speaker 3>he is a more you know, it's more connected to

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<v Speaker 3>the sort of working class value, traditional working class values

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<v Speaker 3>of the Democratic Party. You know, James tell Rico. He

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<v Speaker 3>sounds good, right. He's a very articulate guy. Love him

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<v Speaker 3>or not like him, or what have you. But he's

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<v Speaker 3>quite progressive. And so I think to your point, is

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<v Speaker 3>he too progressive to win Texas? I would argue probably yes.

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<v Speaker 1>Libby Cantrell of PIMCO on podcasts, We're on Spotify, We're

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<v Speaker 1>on Apple, on YouTube podcasts. It's single best idea