1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day, we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,560 --> 00:00:15,600 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,640 --> 00:00:18,479 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:22,320 Speaker 1: at Bloomberg dot com slash podcast. Well, as we've been 7 00:00:22,320 --> 00:00:24,319 Speaker 1: discussing really over the last several months, one of the 8 00:00:24,360 --> 00:00:28,080 Speaker 1: one of the driving narratives of these markets is inflation. 9 00:00:28,760 --> 00:00:31,000 Speaker 1: We are seeing it. The question is a transitory is 10 00:00:31,040 --> 00:00:33,800 Speaker 1: it's something more permanent that could really put up some 11 00:00:33,880 --> 00:00:36,199 Speaker 1: roadblocks for this economy. You know, I'm looking at the 12 00:00:36,280 --> 00:00:38,800 Speaker 1: ten years. We're talking with Ira Jersey just earlier again, 13 00:00:38,920 --> 00:00:40,879 Speaker 1: one point five three percent on the ten years, So 14 00:00:40,880 --> 00:00:43,440 Speaker 1: the bond market is not seeing Michael Hans he's the 15 00:00:43,520 --> 00:00:47,159 Speaker 1: chief investment officer for Clarfeld Financial Advisors. They about seventeen 16 00:00:47,320 --> 00:00:50,920 Speaker 1: billion dollars in assets under management. Michael joints this. Michael. 17 00:00:50,920 --> 00:00:53,280 Speaker 1: We appreciate you taking the time here as you look 18 00:00:53,280 --> 00:00:56,040 Speaker 1: at markets here, we I know you've been constructive on 19 00:00:56,120 --> 00:00:59,880 Speaker 1: these markets. How do you think about the inflation risk 20 00:01:00,160 --> 00:01:04,440 Speaker 1: to these markets, Good morning, Thanks for having me. So 21 00:01:04,480 --> 00:01:07,240 Speaker 1: I think the biggest risk that we discuss is we 22 00:01:07,319 --> 00:01:10,320 Speaker 1: sit down and try to think about setting investment policy 23 00:01:10,319 --> 00:01:15,320 Speaker 1: and direction for our clients is not necessarily the individual 24 00:01:15,319 --> 00:01:18,360 Speaker 1: asset class performance that you're going to see directly resulting 25 00:01:18,440 --> 00:01:21,640 Speaker 1: from moves into the inflation data. Is more so the 26 00:01:21,720 --> 00:01:25,840 Speaker 1: challenges that it puts on the FED, who's really guessing 27 00:01:26,120 --> 00:01:30,040 Speaker 1: at this point in time, with two potential outcomes. One 28 00:01:30,120 --> 00:01:34,720 Speaker 1: is that they're right and guiding towards transitory levels of inflation, 29 00:01:35,200 --> 00:01:38,160 Speaker 1: in which case they will have the ability of reasonable 30 00:01:38,200 --> 00:01:43,119 Speaker 1: growth coming in these inflation dynamics moderating with what we're 31 00:01:43,160 --> 00:01:45,840 Speaker 1: seeing right now is a complience of issues but making 32 00:01:45,840 --> 00:01:48,640 Speaker 1: it really challenging and the base effects, and then they 33 00:01:48,680 --> 00:01:51,960 Speaker 1: have the ability to set policy and be somewhat restrictive 34 00:01:51,960 --> 00:01:55,120 Speaker 1: at the margin in a more gradual pace. The flip 35 00:01:55,200 --> 00:01:58,040 Speaker 1: side is what I think many market participants are afraid of, 36 00:01:58,480 --> 00:02:02,120 Speaker 1: is that they are somewhat complaced because of their desire 37 00:02:02,200 --> 00:02:06,320 Speaker 1: to maintain policy focusing on the labor side of their mandate, 38 00:02:06,680 --> 00:02:10,800 Speaker 1: and then forced to more aggressively restrict policy down the line. 39 00:02:11,280 --> 00:02:16,320 Speaker 1: So from our vantage point, not an issue likely, right 40 00:02:16,360 --> 00:02:20,400 Speaker 1: we're still talking about first thinking about some form of paper, 41 00:02:20,680 --> 00:02:22,400 Speaker 1: and there's a lot that's going to happen before they 42 00:02:22,480 --> 00:02:26,040 Speaker 1: raise rates, and so the market right now. Frankly, I 43 00:02:26,040 --> 00:02:28,280 Speaker 1: think some of your your guests point about you as well. 44 00:02:28,919 --> 00:02:30,840 Speaker 1: It's a little bit of back and forth here in 45 00:02:30,919 --> 00:02:34,040 Speaker 1: a in a relatively tight range both on equities and 46 00:02:34,440 --> 00:02:38,959 Speaker 1: on fixed income, waiting for some directional movement that will 47 00:02:38,960 --> 00:02:41,440 Speaker 1: then set the tone for the pounds of the year. Yeah, 48 00:02:41,440 --> 00:02:44,760 Speaker 1: it's interesting. Bill Dudley wrote a piece for Bloomberg yesterday 49 00:02:44,919 --> 00:02:48,760 Speaker 1: and said just that, Um, well two things, one the 50 00:02:48,800 --> 00:02:53,280 Speaker 1: focus on UM the labor markets, and to the insistence 51 00:02:53,320 --> 00:02:57,640 Speaker 1: that UH inflation be allowed to run hot, therefore overheating 52 00:02:57,680 --> 00:03:00,800 Speaker 1: the economy. He then said, you know they raise rates 53 00:03:00,880 --> 00:03:03,359 Speaker 1: after that, Um, they'll be forced to do it at 54 00:03:03,360 --> 00:03:06,440 Speaker 1: a faster pace than they previously had. And if they 55 00:03:06,440 --> 00:03:10,120 Speaker 1: push up unemployment by just half a percent, this is 56 00:03:10,120 --> 00:03:13,400 Speaker 1: what I found surprising over the past seventy five years. 57 00:03:13,400 --> 00:03:17,120 Speaker 1: Every time the unemployment right rate rises just half a percent, 58 00:03:18,040 --> 00:03:23,720 Speaker 1: a full blown recession occurs thereafter. UM. And this is 59 00:03:23,760 --> 00:03:25,600 Speaker 1: the this is the problem, right, This is the concern 60 00:03:25,680 --> 00:03:28,960 Speaker 1: that the Fed is going to have to tighten harder 61 00:03:29,000 --> 00:03:32,520 Speaker 1: than it previously would have had to because it's allowing 62 00:03:32,560 --> 00:03:36,440 Speaker 1: the economy to overheat. If you buy into his his narrative, 63 00:03:37,280 --> 00:03:39,680 Speaker 1: it's a very valid question, and they think what's interesting, 64 00:03:40,120 --> 00:03:42,160 Speaker 1: And it was a question in one of the prior 65 00:03:42,400 --> 00:03:45,240 Speaker 1: you know, FED press conferences that like McKay brought up, 66 00:03:45,320 --> 00:03:48,200 Speaker 1: was you know, we're not hearing that narrative that we 67 00:03:48,240 --> 00:03:51,040 Speaker 1: did in the prior rate hiking cycle of we'd like 68 00:03:51,200 --> 00:03:55,160 Speaker 1: to reset some level of ammunition for that next downturn. 69 00:03:55,280 --> 00:03:57,480 Speaker 1: I think it's very it is somewhat premature, but the 70 00:03:57,600 --> 00:04:01,240 Speaker 1: question really beg do you need to be buying billion 71 00:04:01,240 --> 00:04:04,280 Speaker 1: dollars of securities on a monthly basis? And I think 72 00:04:04,280 --> 00:04:06,560 Speaker 1: we're in a different position today than we were on 73 00:04:06,600 --> 00:04:09,800 Speaker 1: the prior cycle because we've blown out the balance sheet 74 00:04:10,000 --> 00:04:12,840 Speaker 1: substantially more than what we did during the financial crisis. 75 00:04:13,040 --> 00:04:15,520 Speaker 1: So there are little pockets of areas where you know, 76 00:04:15,560 --> 00:04:18,919 Speaker 1: the Fed last week it was wasn't heavily paid attention to, 77 00:04:19,360 --> 00:04:22,160 Speaker 1: but they're starting at the margins to nibble down at 78 00:04:22,200 --> 00:04:24,320 Speaker 1: that balance sheet. They made comments related to the corporate 79 00:04:24,360 --> 00:04:27,440 Speaker 1: credit facility and their ets purchases. So this is going 80 00:04:27,520 --> 00:04:30,160 Speaker 1: to be something that I think of volumes and from 81 00:04:30,200 --> 00:04:33,920 Speaker 1: their perspective in a methodical fashion over a prolonged period 82 00:04:33,920 --> 00:04:36,840 Speaker 1: of time. But we are likely sitting in that in 83 00:04:37,440 --> 00:04:40,280 Speaker 1: the environment right now over the course of the next 84 00:04:40,320 --> 00:04:43,360 Speaker 1: couple of months, where there may not be a major 85 00:04:43,440 --> 00:04:47,119 Speaker 1: direction the news and the data flows might not matter 86 00:04:47,160 --> 00:04:49,760 Speaker 1: all that much because we all have this heightened level 87 00:04:49,760 --> 00:04:53,080 Speaker 1: of expectations for a high cp I print, right And 88 00:04:53,120 --> 00:04:55,800 Speaker 1: so at this point, I think it's really when does 89 00:04:55,800 --> 00:04:59,839 Speaker 1: the FED start detailing their plans, because they really do 90 00:05:00,120 --> 00:05:03,960 Speaker 1: want to, you know, calm the market. Hey, Michael, just 91 00:05:04,000 --> 00:05:08,240 Speaker 1: real quickly thirty seconds. Given that FED backdrop, where what 92 00:05:08,240 --> 00:05:10,000 Speaker 1: are you telling clients right now in terms of risk? 93 00:05:11,480 --> 00:05:13,839 Speaker 1: In terms of risk, and I think an important dynamic 94 00:05:13,920 --> 00:05:16,840 Speaker 1: is that the equity market still has you know, and 95 00:05:16,960 --> 00:05:20,560 Speaker 1: as you mentioned the onset, we are fairly constructive because 96 00:05:20,600 --> 00:05:24,400 Speaker 1: of the relatively low yield dynamic. What we're looking at 97 00:05:24,520 --> 00:05:27,320 Speaker 1: is just a lower duration position across our fixed income 98 00:05:27,360 --> 00:05:31,000 Speaker 1: portfolios because you will not get the same benefit even 99 00:05:31,000 --> 00:05:33,919 Speaker 1: if rates start coming back in, So be more mindful 100 00:05:33,960 --> 00:05:37,280 Speaker 1: about what you own across fixed income, but also being 101 00:05:37,440 --> 00:05:40,240 Speaker 1: you know, cognizant of the potential for lower rates of 102 00:05:40,279 --> 00:05:43,160 Speaker 1: return in in the balance of this cycle because we 103 00:05:43,240 --> 00:05:46,040 Speaker 1: pulled a lot of that forward. Michael, thanks so much 104 00:05:46,480 --> 00:05:49,080 Speaker 1: for your insight. Always great to get your view on 105 00:05:49,080 --> 00:05:52,040 Speaker 1: this market. Michael Hans is the chief investment officer at 106 00:05:52,080 --> 00:05:57,520 Speaker 1: Clarfeld Financial Advisors, talking to us about UM, the market's 107 00:05:57,600 --> 00:06:00,880 Speaker 1: view on inflation, which really has been UM going through 108 00:06:01,160 --> 00:06:03,919 Speaker 1: a bit of a back and forth over the past days, 109 00:06:03,960 --> 00:06:11,359 Speaker 1: sometimes hours. This is crazy but fastly I think would 110 00:06:11,360 --> 00:06:14,600 Speaker 1: count as a small cap stock. UM. It's only it's 111 00:06:14,640 --> 00:06:18,279 Speaker 1: only worth six and a quarter billion dollars in market cap. 112 00:06:18,880 --> 00:06:20,840 Speaker 1: And this is a company that before today I didn't 113 00:06:20,839 --> 00:06:24,120 Speaker 1: realize has the power to shut down the Internet, even 114 00:06:24,160 --> 00:06:27,560 Speaker 1: if just momentarily. Nate Langston joins us Bloomberg Europe Tech 115 00:06:27,640 --> 00:06:31,080 Speaker 1: editor and consumer tech reporter UM and Nate, I get 116 00:06:31,160 --> 00:06:33,320 Speaker 1: why these shares were up, because the first thing I 117 00:06:33,360 --> 00:06:36,719 Speaker 1: thought when I when I heard this is, Man, this 118 00:06:36,800 --> 00:06:40,440 Speaker 1: is a powerful and important company. I kind of want 119 00:06:40,440 --> 00:06:44,880 Speaker 1: to buy shares in that. You're absolutely right, and that 120 00:06:44,960 --> 00:06:49,400 Speaker 1: was exactly my reaction, UM when I first saw this, 121 00:06:49,640 --> 00:06:53,040 Speaker 1: is that this is not a company that many people, UM, 122 00:06:53,279 --> 00:06:55,839 Speaker 1: you know, myself included. And I've been covering technology for 123 00:06:56,000 --> 00:06:58,760 Speaker 1: over fifty years and I hadn't really ever paid any 124 00:06:58,760 --> 00:07:01,400 Speaker 1: attention to this company, and when you see some of 125 00:07:01,400 --> 00:07:04,640 Speaker 1: the sites that it is possible for it to have, 126 00:07:04,720 --> 00:07:09,120 Speaker 1: you know, have a hand in taking offline, ilbeit obviously 127 00:07:09,160 --> 00:07:12,760 Speaker 1: accidentally you have to sort of it turned heads a 128 00:07:12,800 --> 00:07:14,760 Speaker 1: little bit and you think, well, maybe we should be 129 00:07:14,800 --> 00:07:17,080 Speaker 1: paying more attention to this company, and certainly I will 130 00:07:17,120 --> 00:07:20,360 Speaker 1: be doing in terms of how we cover it. Um, 131 00:07:20,400 --> 00:07:23,520 Speaker 1: it's it's and as you say, the the investor response 132 00:07:23,560 --> 00:07:27,080 Speaker 1: and that the stock price since since the opens has 133 00:07:27,080 --> 00:07:30,600 Speaker 1: been really quite fascinating. All right, Nate, tell us what 134 00:07:30,920 --> 00:07:35,600 Speaker 1: happened this morning and how did it happen? Well, as 135 00:07:35,640 --> 00:07:40,120 Speaker 1: far as we know, this all originated as essentially user 136 00:07:40,320 --> 00:07:44,480 Speaker 1: error within the company itself. There's no suggestion here that 137 00:07:44,960 --> 00:07:47,800 Speaker 1: that it was a a hack or or the subject 138 00:07:47,960 --> 00:07:52,960 Speaker 1: of any kind of UM cyber attack. This is essentially 139 00:07:52,960 --> 00:07:55,760 Speaker 1: the equivalent to somebody pressing the wrong button on a 140 00:07:55,840 --> 00:08:00,560 Speaker 1: computer and then having to quickly roll it back. Certainly, 141 00:08:00,600 --> 00:08:04,120 Speaker 1: the speed with which this both happened and was fixed, 142 00:08:04,160 --> 00:08:07,040 Speaker 1: all of which took place within about an hour, UM 143 00:08:07,280 --> 00:08:10,120 Speaker 1: makes me very confident that that that is the case. 144 00:08:10,200 --> 00:08:13,200 Speaker 1: But the short version of what happened is people started 145 00:08:13,240 --> 00:08:17,000 Speaker 1: noticing that they weren't able to access websites. UM for 146 00:08:17,080 --> 00:08:20,120 Speaker 1: a little while, Bloomberg dot com included in in that 147 00:08:20,560 --> 00:08:26,360 Speaker 1: and um the Amazon and read it exactly and read it, 148 00:08:26,440 --> 00:08:32,480 Speaker 1: and there was Spotify was reporting outages Shopify as well. Yeah, 149 00:08:32,480 --> 00:08:34,600 Speaker 1: and it's just a lot of a lot of averages. 150 00:08:34,880 --> 00:08:38,840 Speaker 1: And people started reporting this. The company within about I 151 00:08:38,880 --> 00:08:41,960 Speaker 1: think twenty five thirty minutes have posted a status update 152 00:08:42,080 --> 00:08:44,720 Speaker 1: on its service datas page, which ironically for a little while, 153 00:08:44,840 --> 00:08:48,480 Speaker 1: was also taken offline to say that an issue had 154 00:08:48,520 --> 00:08:51,000 Speaker 1: been identified and a fix is being deployed. And in 155 00:08:51,160 --> 00:08:53,960 Speaker 1: just under an hour total, from the first outage to 156 00:08:54,760 --> 00:08:59,040 Speaker 1: a resolution, things started taking back online. UM, and the 157 00:08:59,080 --> 00:09:01,920 Speaker 1: company said, it's you know, it's further investigating. And generally 158 00:09:01,920 --> 00:09:04,240 Speaker 1: when something like this happens, it takes a day or 159 00:09:04,280 --> 00:09:07,480 Speaker 1: two for sort of full disclosure on the you know, 160 00:09:07,520 --> 00:09:11,200 Speaker 1: the cause for that to be. Yeah. They were like, 161 00:09:11,200 --> 00:09:17,280 Speaker 1: our intern accidentally pressed the red button. He's been fired, Nate. Um. 162 00:09:17,320 --> 00:09:19,640 Speaker 1: You gotta wonder whether or not this makes companies want 163 00:09:19,640 --> 00:09:22,480 Speaker 1: to diversify. I mean, if if I was running a 164 00:09:22,520 --> 00:09:25,240 Speaker 1: website and this took me down, I would think, man, 165 00:09:25,360 --> 00:09:27,439 Speaker 1: is there can I get two people that offer the 166 00:09:27,480 --> 00:09:32,320 Speaker 1: same service. Yeah, I mean, that's definitely the first reaction. 167 00:09:32,960 --> 00:09:37,400 Speaker 1: But realistically, for the kind of systems administrators that are 168 00:09:37,400 --> 00:09:40,640 Speaker 1: in charge of these websites, this is something that it's 169 00:09:40,720 --> 00:09:43,960 Speaker 1: just understood to happen from time to time. You know, 170 00:09:44,040 --> 00:09:47,280 Speaker 1: if if the the entirety of a year, your website 171 00:09:47,280 --> 00:09:49,040 Speaker 1: goes down for a few minutes here or a few 172 00:09:49,040 --> 00:09:51,680 Speaker 1: minutes there over the course of that year, you know, 173 00:09:51,760 --> 00:09:55,000 Speaker 1: you're still talking way above up time, which is what 174 00:09:55,040 --> 00:09:58,079 Speaker 1: a lot of these companies promise and guarantee, and there 175 00:09:58,160 --> 00:10:00,400 Speaker 1: is often a you know, small amount of edit and 176 00:10:00,440 --> 00:10:04,160 Speaker 1: compensation that are applied based on the percentage of total 177 00:10:04,200 --> 00:10:07,000 Speaker 1: autage with course of say a month. Um. So, I 178 00:10:07,040 --> 00:10:11,560 Speaker 1: can't imagine they will see a fallout in people moving uh, 179 00:10:11,920 --> 00:10:14,600 Speaker 1: purely because of this one incident. But if this turns 180 00:10:14,600 --> 00:10:17,800 Speaker 1: out to be one of many over the coming weeks, months, 181 00:10:17,880 --> 00:10:19,640 Speaker 1: or whatever, that's when things start to get a lot 182 00:10:19,679 --> 00:10:22,040 Speaker 1: more serious. Sure. All right, Nate, thanks so much for 183 00:10:22,120 --> 00:10:25,080 Speaker 1: joining us. Really appreciate your time and getting your thoughts 184 00:10:25,160 --> 00:10:27,719 Speaker 1: on this fascinating story. To start this uh this day, 185 00:10:27,800 --> 00:10:31,120 Speaker 1: Nate Lengths and Bloomberg grob Tech editor and consumer tech 186 00:10:31,240 --> 00:10:36,880 Speaker 1: reporter Matt, You're gonna like this. Our next guests participated 187 00:10:36,920 --> 00:10:40,040 Speaker 1: on a panel at the largest bitcoin conference in the world, 188 00:10:40,559 --> 00:10:44,760 Speaker 1: entitled Bitcoin One, which took place in Miami, Florida. What 189 00:10:44,800 --> 00:10:48,480 Speaker 1: I found interesting is, Uh, this conference was held two 190 00:10:48,520 --> 00:10:52,800 Speaker 1: years ago, attracted about two thousand people, but in one 191 00:10:52,800 --> 00:10:56,880 Speaker 1: they're an estimated twelve thousand people in attendance, so assign 192 00:10:56,960 --> 00:11:00,559 Speaker 1: that bitcoin and cryptos really are getting into the mainstream. 193 00:11:01,000 --> 00:11:03,920 Speaker 1: Frank Holmes he joins US today. Frank's the CEO and 194 00:11:04,000 --> 00:11:07,600 Speaker 1: chief investment officers US Global Investors. Frank, I love to 195 00:11:07,640 --> 00:11:09,600 Speaker 1: start there. There's lots to chat with you about, but 196 00:11:09,840 --> 00:11:11,640 Speaker 1: just give us a sense of what was the vibe 197 00:11:11,840 --> 00:11:18,480 Speaker 1: down a bitcoin in Miami. It was electrifying. I've spoken 198 00:11:18,480 --> 00:11:22,560 Speaker 1: as so many investment conferences over the past thirty years, 199 00:11:22,880 --> 00:11:26,400 Speaker 1: attended so many of them, uh, and never has been 200 00:11:26,400 --> 00:11:30,800 Speaker 1: to an event where we're twelve thousand people spent six 201 00:11:30,920 --> 00:11:33,720 Speaker 1: hundred dollars to get in the door and on on 202 00:11:33,920 --> 00:11:39,480 Speaker 1: game day. Basically the tickets were twelve hundred dollars. Uh. 203 00:11:39,679 --> 00:11:43,600 Speaker 1: The big retail conference for investors and ETFs and mutual funds. 204 00:11:43,600 --> 00:11:46,920 Speaker 1: The money shown Orlando, you know they'll get six thousand people, 205 00:11:46,960 --> 00:11:51,200 Speaker 1: but it's free. So I was really impressed with this. 206 00:11:52,200 --> 00:11:55,320 Speaker 1: That just the level and it wasn't close to anything 207 00:11:55,360 --> 00:11:57,880 Speaker 1: like you had to have a fifteen minute Uber drive 208 00:11:57,960 --> 00:12:01,040 Speaker 1: to get there. UH. Usually as a big convention right 209 00:12:01,080 --> 00:12:03,760 Speaker 1: beside the hotel, these other events, if you get lots 210 00:12:03,800 --> 00:12:06,960 Speaker 1: of people, but people who were really committed. People flew 211 00:12:06,960 --> 00:12:10,120 Speaker 1: in from all over the world to an end. Uh. 212 00:12:10,160 --> 00:12:13,280 Speaker 1: And so I thought that was fascinating and the caliber 213 00:12:13,360 --> 00:12:18,560 Speaker 1: of speakers was outstanding. Great event. I know Mike mcglowan 214 00:12:18,679 --> 00:12:22,160 Speaker 1: are Bloomer Commodities analysts, was down there as well. What 215 00:12:22,240 --> 00:12:25,839 Speaker 1: did you what did you take away from the event? Um? 216 00:12:25,880 --> 00:12:30,280 Speaker 1: What did you learn? Um? Down in Miami? Well, you know, 217 00:12:30,320 --> 00:12:33,080 Speaker 1: on on stage I spoke regarding the cryptal mining companies. 218 00:12:33,120 --> 00:12:36,120 Speaker 1: I launched the first UH cryptal mining company in the 219 00:12:36,160 --> 00:12:41,200 Speaker 1: world in two thousand seventeen, called High Blockchain Technology. And uh, 220 00:12:41,240 --> 00:12:44,160 Speaker 1: it's interesting because on that panel it was all about 221 00:12:44,200 --> 00:12:48,120 Speaker 1: being green and clean your coins, and uh, I got 222 00:12:48,160 --> 00:12:51,720 Speaker 1: booed and then I got hurrah. So you have some 223 00:12:51,800 --> 00:12:56,839 Speaker 1: real devotees there, bitcoin enthusiasts that are like religious fanatics, 224 00:12:57,120 --> 00:12:59,080 Speaker 1: and then the other hand you have lots of scientists 225 00:12:59,080 --> 00:13:02,800 Speaker 1: and people are for sort of the non centralized or 226 00:13:02,800 --> 00:13:07,600 Speaker 1: decentralized financial network. Uh. And that spectrum was was huge. 227 00:13:07,640 --> 00:13:10,400 Speaker 1: There was four thousand people in standing room only in 228 00:13:10,480 --> 00:13:12,640 Speaker 1: file marshals had to come in and tell people they 229 00:13:12,640 --> 00:13:17,040 Speaker 1: couldn't stand at the back. Amazing. Yes, Frankie, what's the 230 00:13:17,200 --> 00:13:20,120 Speaker 1: What do you think was the overriding key issue for 231 00:13:20,280 --> 00:13:23,520 Speaker 1: participants in this conference? Here? Is it? Is it regulation? 232 00:13:23,880 --> 00:13:28,160 Speaker 1: Is it a greater adoption? Um, greater you know, just 233 00:13:28,280 --> 00:13:31,840 Speaker 1: more technology? What are some of the key takeaways? All 234 00:13:31,880 --> 00:13:34,120 Speaker 1: of them? It was interesting, It was all of them. 235 00:13:34,480 --> 00:13:36,560 Speaker 1: Ron Paul, I hope when I'm in my eighties I 236 00:13:36,559 --> 00:13:40,040 Speaker 1: can uh moonwalk like he was. I mean, he was 237 00:13:40,160 --> 00:13:44,240 Speaker 1: unbelievable his energy up there on that on that stage. 238 00:13:44,440 --> 00:13:47,040 Speaker 1: So he had the sort of the the political positioning 239 00:13:47,240 --> 00:13:50,840 Speaker 1: of uh, financial independence, etcetera. And and then you had 240 00:13:51,040 --> 00:13:55,199 Speaker 1: the Michael Sailor did a phenomenal job. He had the 241 00:13:55,280 --> 00:13:59,800 Speaker 1: standing room ovation. Uh. So I think it was very broad, 242 00:14:00,080 --> 00:14:03,839 Speaker 1: uh doors he was there for Twitter, uh and he 243 00:14:03,880 --> 00:14:07,120 Speaker 1: was sort of a philosophical approach. We had a Heckler 244 00:14:07,200 --> 00:14:10,120 Speaker 1: for him. But you know, it was it was just 245 00:14:10,200 --> 00:14:13,800 Speaker 1: fascinating to observe what I you know, I did see 246 00:14:13,880 --> 00:14:17,200 Speaker 1: is is that there is a push for crypto mining 247 00:14:17,200 --> 00:14:19,400 Speaker 1: to be done in North America and Europe and away 248 00:14:19,440 --> 00:14:23,960 Speaker 1: from China. The pools for more transparency is better to 249 00:14:24,000 --> 00:14:27,280 Speaker 1: have than coming from China. That there was a The 250 00:14:27,320 --> 00:14:31,400 Speaker 1: mayor spoke very well and how he's trying to create 251 00:14:31,440 --> 00:14:34,280 Speaker 1: the Silicon Valley of the East Coast is going to 252 00:14:34,400 --> 00:14:38,080 Speaker 1: be in Miami. So you know, that was very interesting 253 00:14:38,120 --> 00:14:41,600 Speaker 1: to see that shift. So there's many dynamic things happening 254 00:14:41,640 --> 00:14:45,200 Speaker 1: at the same time in all ages. You had the 255 00:14:45,360 --> 00:14:49,760 Speaker 1: venture capital funds, the bigonaire players flying in from San Francisco, 256 00:14:50,360 --> 00:14:53,080 Speaker 1: uh to the kid and his flip flops on walking 257 00:14:53,080 --> 00:14:55,720 Speaker 1: around with his knapstack. That's up three million dollars on 258 00:14:55,800 --> 00:14:58,200 Speaker 1: his bitcoin holdings. Is that Mat Miller? Matt, were you 259 00:14:58,240 --> 00:15:02,160 Speaker 1: in Miami? I is not, but I would definitely be 260 00:15:02,240 --> 00:15:06,240 Speaker 1: wearing flip flops because I hate shoes. Everyone who knows 261 00:15:06,280 --> 00:15:09,800 Speaker 1: me knows how I feel about shoes. Frank I promised 262 00:15:09,840 --> 00:15:11,800 Speaker 1: our listeners that would get you to talk a little 263 00:15:11,800 --> 00:15:14,240 Speaker 1: bit about airlines, and I know that on the day 264 00:15:14,240 --> 00:15:18,600 Speaker 1: you left there were one point six million passengers screened. Um, 265 00:15:18,640 --> 00:15:21,240 Speaker 1: that's up from a year ago. We gotta get you 266 00:15:21,280 --> 00:15:22,960 Speaker 1: back because we've run out of time, but I do 267 00:15:23,040 --> 00:15:24,600 Speaker 1: want to hear from you in the future, so well, 268 00:15:24,920 --> 00:15:27,160 Speaker 1: hopefully you have time we can rebook you talk a 269 00:15:27,160 --> 00:15:29,000 Speaker 1: little bit about airlines and about the jets E T 270 00:15:29,160 --> 00:15:31,920 Speaker 1: F as well. Frank Holmes, c i O, Chief Investment 271 00:15:31,920 --> 00:15:34,480 Speaker 1: Officer US Global Investors. He was a speaker at the 272 00:15:34,480 --> 00:15:38,080 Speaker 1: Big Bitcoin Conference in Miami and founder of one of 273 00:15:38,120 --> 00:15:48,080 Speaker 1: the first big bitcoin minds. This is Bloomberg. Let's bring 274 00:15:48,080 --> 00:15:51,560 Speaker 1: in Dan Gantner now, he's president, chief executive officer, and 275 00:15:51,680 --> 00:15:55,920 Speaker 1: chief investment officer at r NC Gender Capital Management and 276 00:15:56,360 --> 00:15:59,480 Speaker 1: Dan Um. It's great to get somebody who has skin 277 00:15:59,560 --> 00:16:01,680 Speaker 1: in the game game. You've got five billion and asked 278 00:16:01,760 --> 00:16:05,960 Speaker 1: under management and has some stock picks for us UM. 279 00:16:06,040 --> 00:16:09,120 Speaker 1: Let's talk about what you want right now. Well, first 280 00:16:09,160 --> 00:16:10,960 Speaker 1: of all, let's talk about your inflation outlook, because I 281 00:16:10,960 --> 00:16:15,160 Speaker 1: guess that drives your decisions to some degree. Yeah, man, 282 00:16:15,160 --> 00:16:17,560 Speaker 1: I think that you know right now, certainly inflation is 283 00:16:17,600 --> 00:16:19,680 Speaker 1: the is the hot button, and it's the watchword and 284 00:16:19,680 --> 00:16:22,600 Speaker 1: the overall market and uh, it's you know, we're we're 285 00:16:22,600 --> 00:16:24,440 Speaker 1: waiting to see what these numbers come out with with 286 00:16:24,520 --> 00:16:27,440 Speaker 1: cp I and obviously for PC which is really what 287 00:16:27,480 --> 00:16:29,720 Speaker 1: the FED is looking at. But you know, the numbers 288 00:16:29,720 --> 00:16:32,200 Speaker 1: are very very hot right now, and there there's certainly 289 00:16:32,480 --> 00:16:35,360 Speaker 1: I think a little above the Fed's expectations. The market 290 00:16:35,400 --> 00:16:37,640 Speaker 1: is little concerned about it. You know, we're seeing PC 291 00:16:37,920 --> 00:16:40,640 Speaker 1: that just came out at three point six per uh, 292 00:16:40,760 --> 00:16:44,120 Speaker 1: FED once a long term target of about two uh. 293 00:16:44,160 --> 00:16:48,280 Speaker 1: You know, the watchword right now is transitory, though I 294 00:16:48,320 --> 00:16:50,960 Speaker 1: think what you're going to see is that the definition 295 00:16:50,960 --> 00:16:53,520 Speaker 1: of transitory is going to change over time, and I 296 00:16:53,560 --> 00:16:55,680 Speaker 1: think the market is really looking to see, is this 297 00:16:55,800 --> 00:16:57,680 Speaker 1: something that really is going to be a few months 298 00:16:58,520 --> 00:17:01,720 Speaker 1: that's going to open up as you have supply chain. 299 00:17:02,280 --> 00:17:05,240 Speaker 1: Basically reopening of supply chain is what we're dealing with, 300 00:17:05,720 --> 00:17:07,800 Speaker 1: and so is that going to be truly a few 301 00:17:07,800 --> 00:17:10,920 Speaker 1: months of transitory nature? We get back on the feds 302 00:17:10,960 --> 00:17:14,920 Speaker 1: more or less two percent guideline for inflation, and therefore 303 00:17:15,040 --> 00:17:17,679 Speaker 1: any unwinding that they're going to do is going to 304 00:17:17,720 --> 00:17:21,840 Speaker 1: be either insignificant or non existent. If it stays longer 305 00:17:21,880 --> 00:17:26,320 Speaker 1: than that and really becomes more cyclical, then the market's 306 00:17:26,320 --> 00:17:28,159 Speaker 1: going to adjust to that. You know. We uh we 307 00:17:28,240 --> 00:17:30,760 Speaker 1: think employment's a huge part of this right now, and 308 00:17:30,800 --> 00:17:33,640 Speaker 1: that that's the main thing we're watching. Yeah, we got 309 00:17:33,760 --> 00:17:37,680 Speaker 1: some very interesting jolts data out this morning about the 310 00:17:37,720 --> 00:17:40,879 Speaker 1: record job openings. Uh so that was very interesting for 311 00:17:40,920 --> 00:17:45,520 Speaker 1: this market. Then you know that that cyclical trade, if 312 00:17:45,520 --> 00:17:48,200 Speaker 1: you will, that started it's called it last September has 313 00:17:48,280 --> 00:17:51,280 Speaker 1: really worked out well for investors that have played, you know, 314 00:17:51,320 --> 00:17:53,960 Speaker 1: some of the more cyclical parts of the marketingbe even 315 00:17:54,000 --> 00:17:56,959 Speaker 1: the small caps um A, are you in on that 316 00:17:57,000 --> 00:18:00,680 Speaker 1: trade and be you know kind of what's your outlook. Well, 317 00:18:00,760 --> 00:18:02,600 Speaker 1: we're very heavy on that trade as a matter of fact, 318 00:18:02,640 --> 00:18:06,080 Speaker 1: and really started in the end of the third quarter 319 00:18:06,160 --> 00:18:08,560 Speaker 1: and pretty heavily into the fourth quarter of last year. 320 00:18:08,960 --> 00:18:11,640 Speaker 1: I mean the look the energy sector, you know, which 321 00:18:11,760 --> 00:18:15,080 Speaker 1: was beat up so badly last year, has led the 322 00:18:15,119 --> 00:18:17,159 Speaker 1: market this year. I mean, the energy sector is upt 323 00:18:18,760 --> 00:18:21,280 Speaker 1: hot on its heels, as financials at up almost tht 324 00:18:22,000 --> 00:18:25,400 Speaker 1: and even materials are up over so it's it's been 325 00:18:25,400 --> 00:18:27,919 Speaker 1: a big part of our portfolios and and even in 326 00:18:27,960 --> 00:18:31,040 Speaker 1: our growth and value portfolios. As we reached the second 327 00:18:31,040 --> 00:18:33,040 Speaker 1: half of last year, we went much heavier towards the 328 00:18:33,119 --> 00:18:35,840 Speaker 1: value side, and I think that that's going to continue. 329 00:18:36,200 --> 00:18:38,560 Speaker 1: I think what you're what you're seeing in this market, 330 00:18:38,640 --> 00:18:42,320 Speaker 1: despite some of the side shows that are taking headlines, uh, 331 00:18:42,600 --> 00:18:45,440 Speaker 1: is that this market is moving back to being very 332 00:18:45,520 --> 00:18:49,719 Speaker 1: earnings oriented. And whether that's reopening trade or whether or not, 333 00:18:49,760 --> 00:18:53,520 Speaker 1: it's just fundamentals of ongoing companies. I mean, that's where 334 00:18:53,520 --> 00:18:57,760 Speaker 1: we're going. And and so valuations have become very very 335 00:18:57,760 --> 00:19:00,960 Speaker 1: critical and and so the market is fully moving that way. 336 00:19:01,040 --> 00:19:04,439 Speaker 1: We think franktically, what we're early in that rotation of 337 00:19:04,560 --> 00:19:07,359 Speaker 1: rotation back the value. So it's it's something we definitely 338 00:19:07,400 --> 00:19:10,639 Speaker 1: intend to participate with. And and uh, and something that 339 00:19:10,680 --> 00:19:12,320 Speaker 1: you know, we think is going to pull more and 340 00:19:12,320 --> 00:19:15,159 Speaker 1: more investors into it as they see confirmation and you 341 00:19:15,200 --> 00:19:19,560 Speaker 1: like Philip sixty six here with a four percent yield. Yeah, 342 00:19:19,600 --> 00:19:20,840 Speaker 1: I think it's you know, I think it's one of 343 00:19:20,880 --> 00:19:25,560 Speaker 1: the create the very key um underlyings with regards to 344 00:19:25,640 --> 00:19:28,840 Speaker 1: investor sentiment right now is that people are looking for, 345 00:19:28,920 --> 00:19:31,480 Speaker 1: you know, not just again things that are going to 346 00:19:31,520 --> 00:19:34,240 Speaker 1: be extraordinarily volatile. They may play in those areas, but 347 00:19:34,560 --> 00:19:37,400 Speaker 1: for core portfolio assets. You know, they want to see 348 00:19:37,400 --> 00:19:39,280 Speaker 1: not only some stability of earnings growth, but they want 349 00:19:39,280 --> 00:19:41,560 Speaker 1: to see some income and some yield. And what we're 350 00:19:41,600 --> 00:19:45,119 Speaker 1: seeing now is also a very significant transformation and transition 351 00:19:45,560 --> 00:19:48,240 Speaker 1: of bond holders that are realizing if they're going to 352 00:19:48,320 --> 00:19:51,239 Speaker 1: have some income out there, looking at where pen your 353 00:19:51,280 --> 00:19:54,320 Speaker 1: treasury rates are and rates overall, they're gonna have to 354 00:19:54,359 --> 00:19:57,280 Speaker 1: have more risk, and they're going to start to gravitate 355 00:19:57,359 --> 00:20:01,640 Speaker 1: towards high dividend stocks that are in many cases three 356 00:20:01,720 --> 00:20:03,960 Speaker 1: or four times what they're going to get in fixed 357 00:20:03,960 --> 00:20:06,160 Speaker 1: income assets because they need to have some cash flow, 358 00:20:06,359 --> 00:20:08,080 Speaker 1: they need to have something to live on. And so 359 00:20:08,119 --> 00:20:10,199 Speaker 1: when you look at a Philip sixty six, which is 360 00:20:10,840 --> 00:20:15,240 Speaker 1: still trading at ten percent below its pre COVID values, uh, 361 00:20:15,320 --> 00:20:17,720 Speaker 1: then it's a it's a we think it's a very 362 00:20:17,720 --> 00:20:21,840 Speaker 1: strong play, especially you get four that's tax preferred. While 363 00:20:21,880 --> 00:20:25,200 Speaker 1: you wait, how about Christol Myers squib that's a obviously 364 00:20:25,320 --> 00:20:28,760 Speaker 1: the we've seen the healthcare stocks with Biogen kind of 365 00:20:28,800 --> 00:20:30,840 Speaker 1: in the news over the last couple of days. Is 366 00:20:30,960 --> 00:20:33,439 Speaker 1: Bristol Myers? Is that another one like a Philip sixties 367 00:20:33,440 --> 00:20:36,320 Speaker 1: six where it's just a steady eddy kind of a 368 00:20:36,359 --> 00:20:39,800 Speaker 1: good long term performer. Well, I think it's a combination. 369 00:20:39,880 --> 00:20:42,840 Speaker 1: You know, first of all, it clearly it's the cheapest 370 00:20:42,880 --> 00:20:46,040 Speaker 1: of the large farmer stocks right now trading at about 371 00:20:46,080 --> 00:20:48,960 Speaker 1: p of eight and it's got a good strong yield 372 00:20:49,000 --> 00:20:51,960 Speaker 1: once again three in cash flow while you wait. And 373 00:20:52,320 --> 00:20:55,439 Speaker 1: one of the real values we see in Bristol Myers 374 00:20:55,520 --> 00:20:58,840 Speaker 1: is we think that the market is just severely handicapping, 375 00:20:59,359 --> 00:21:00,840 Speaker 1: you know, some of the need drugs that are going 376 00:21:00,880 --> 00:21:03,119 Speaker 1: to come off of patent and at the at the 377 00:21:03,160 --> 00:21:05,240 Speaker 1: tail end of the pipeline, and what they're not taking 378 00:21:05,240 --> 00:21:08,320 Speaker 1: into consideration. They had four new drugs last year, They've 379 00:21:08,320 --> 00:21:12,120 Speaker 1: got four new launches that are coming out. They're modeling 380 00:21:12,200 --> 00:21:15,040 Speaker 1: about ten billion from those new releases, and we think 381 00:21:15,040 --> 00:21:18,760 Speaker 1: that that's uh, just significantly lower than the five billion 382 00:21:18,800 --> 00:21:21,879 Speaker 1: dollars that we're modeling. So when you look at you know, 383 00:21:21,920 --> 00:21:24,280 Speaker 1: based upon that, we think overall earnings are going to 384 00:21:24,320 --> 00:21:26,600 Speaker 1: be about eighties six dollars even on a multiple of 385 00:21:26,680 --> 00:21:29,720 Speaker 1: ten half of the overall market. You know, we're you know, 386 00:21:29,800 --> 00:21:32,400 Speaker 1: we think it's eighty six dollar stock right from where 387 00:21:32,400 --> 00:21:35,360 Speaker 1: it is now sixty that would be a good return there, 388 00:21:35,440 --> 00:21:38,399 Speaker 1: Dan getting their president, CEO and c i O of 389 00:21:38,560 --> 00:21:41,400 Speaker 1: r n C Genter Capital Management, they have about five 390 00:21:41,400 --> 00:21:44,200 Speaker 1: billion dollars in assets under management. Looking at some of 391 00:21:44,240 --> 00:21:46,280 Speaker 1: those big cap names and I guess, you know, for 392 00:21:46,960 --> 00:21:48,919 Speaker 1: the market. A lot of investors in the market, you know, 393 00:21:48,960 --> 00:21:53,359 Speaker 1: those cyclical names have really worked well in this reopening trade, 394 00:21:53,359 --> 00:21:54,960 Speaker 1: if you will. And the question I hear from a 395 00:21:54,960 --> 00:21:57,240 Speaker 1: lot of investors is, you know, what's the duration? How 396 00:21:57,320 --> 00:22:00,400 Speaker 1: much legs does that trade have? Can I still ride 397 00:22:00,440 --> 00:22:02,959 Speaker 1: the energy stocks? Can I still ride the financial stocks, 398 00:22:03,400 --> 00:22:05,520 Speaker 1: uh for example? Or do I need to pivot back 399 00:22:05,560 --> 00:22:07,720 Speaker 1: to the tried and true top line growth stories? That 400 00:22:07,840 --> 00:22:11,280 Speaker 1: is what markets are looking at. This is Bloomberg. Thanks 401 00:22:11,280 --> 00:22:14,760 Speaker 1: for listening to the Bloomberg Markets podcast. You can subscribe 402 00:22:14,800 --> 00:22:18,480 Speaker 1: and listen to interviews with Apple Podcasts or whatever podcast 403 00:22:18,560 --> 00:22:22,080 Speaker 1: platform you prefer. I'm Matt Miller. I'm on Twitter at 404 00:22:22,119 --> 00:22:25,760 Speaker 1: Matt Miller three pt on Ball Sweeney I'm on Twitter 405 00:22:25,800 --> 00:22:28,680 Speaker 1: at pt Sweeney. Before the podcast, you can always catch 406 00:22:28,720 --> 00:22:30,520 Speaker 1: us worldwide at Bloomberg Radio.