WEBVTT - Bloomberg Surveillance TV: April 1, 2024 0:00:00.120 --> 0:00:06.800 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.920 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.920 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:38.080 Terminal and the Bloomberg Business App. Jake Peloski of TPW 0:00:38.120 --> 0:00:40.760 Advisory thinks the Raley can extend right in this We 0:00:40.800 --> 0:00:44.080 are optimistic not only about twenty four, but the out 0:00:44.159 --> 0:00:47.840 years as well, twenty five, twenty six. Our analog remains 0:00:47.880 --> 0:00:51.240 the US nineteen ninety five to nineteen ninety nine period. 0:00:51.280 --> 0:00:55.920 The differences this time it's global. Jay joins us right now, Jacob, 0:00:55.920 --> 0:00:56.400 morning to you. 0:00:56.480 --> 0:00:57.200 Good morning, John. 0:00:57.280 --> 0:00:59.040 Just the economy data in China back some of that 0:00:59.120 --> 0:00:59.680 up this morning. 0:01:00.040 --> 0:01:02.240 It sure does, John, I mean, I think it's clear 0:01:02.240 --> 0:01:04.960 to us at least that, and it's not only the data, right. 0:01:05.000 --> 0:01:07.240 We wrote a piece on Friday, our Friday musing is 0:01:07.319 --> 0:01:11.000 called listen to stocks, not vox, and we want to 0:01:11.040 --> 0:01:13.880 pay attention to what the markets are telling us. And 0:01:13.920 --> 0:01:18.360 it's not just stocks, it's also credit outperforming the AG 0:01:19.160 --> 0:01:22.039 in its commodities, and commodities I think right now are 0:01:22.040 --> 0:01:25.680 the big tell commodities. And it's not just energy, it's 0:01:25.720 --> 0:01:29.760 not just gold, it's not just copper, it's all of it. 0:01:29.760 --> 0:01:31.440 It's ag it's all. 0:01:31.240 --> 0:01:34.039 Breaking out, and that is telling us that there is 0:01:34.080 --> 0:01:37.319 an opportunity in that the global economy, as we've been 0:01:37.360 --> 0:01:40.640 saying since the fall, is early cycle. 0:01:40.680 --> 0:01:42.960 Soft commodities as well in cocob. But a lot of 0:01:43.000 --> 0:01:45.800 people might say that's a supply side story, not demand. 0:01:45.880 --> 0:01:46.800 How would you frame it. 0:01:46.880 --> 0:01:49.840 I would frame it as both, and that's perfect. It's 0:01:49.840 --> 0:01:54.120 bull supply side as well as demand side. And the 0:01:54.160 --> 0:01:56.760 fact is that most people have not been investing in 0:01:56.800 --> 0:02:01.160 commodities and the demand has been weak. They've been okay, 0:02:01.520 --> 0:02:03.680 and now we're coming into a point where that lack 0:02:03.720 --> 0:02:05.680 of investment, which can't be made. 0:02:05.520 --> 0:02:07.840 Up quickly, is going to bite. 0:02:08.160 --> 0:02:10.880 At the same time as a global economy, we think 0:02:10.960 --> 0:02:15.400 is setting up for a considerable period of good economic news, 0:02:15.840 --> 0:02:19.880 and that combination in the fact that very few people 0:02:19.919 --> 0:02:23.560 are invested there. Very few people understand that commodities are 0:02:23.600 --> 0:02:26.320 the best performing acid class in the world year to date. 0:02:26.480 --> 0:02:27.160 Everyone wants to. 0:02:27.120 --> 0:02:29.960 Talk to Mag seven, Mag seven, Mag six, Mag five 0:02:30.560 --> 0:02:34.240 commodities people. It's really basic. It's supply and demand. You 0:02:34.280 --> 0:02:37.720 don't have to figure out AI. It's just simply buying 0:02:37.720 --> 0:02:39.079 the stuff that people still use. 0:02:39.200 --> 0:02:40.760 How much this hinge on China. 0:02:40.480 --> 0:02:44.520 Though obviously not very much, because China has been been 0:02:44.560 --> 0:02:48.919 a weak story and commodities have done well. Markets move first, 0:02:49.080 --> 0:02:51.600 That's the thing that we have to remember. They're forward looking. 0:02:51.880 --> 0:02:56.280 Discounting mechanisms say no more than you me even you John, 0:02:56.160 --> 0:03:01.639 and therefore they move first. And so commodities are, you know, 0:03:01.720 --> 0:03:05.239 your world's best performing acid class when now people are 0:03:05.280 --> 0:03:08.239 just starting to think about China. Okay, PMI is better 0:03:08.280 --> 0:03:11.560 than expected. JP Morgan last week raised their Q one 0:03:12.000 --> 0:03:15.840 GDP estimate to six point six percent. Okay, so you're 0:03:15.880 --> 0:03:19.040 talking about the second biggest economy in the world looking 0:03:19.120 --> 0:03:21.639 like it's starting to pick up, and that is obviously 0:03:21.680 --> 0:03:24.640 bullish for lots of things, including commodities. 0:03:24.639 --> 0:03:26.680 A phrase we heard repeatedly I think over the last 0:03:26.760 --> 0:03:29.720 year regarding that region that part of the world was uninvestable, 0:03:30.080 --> 0:03:31.880 and I guess the cafe around that is it depends 0:03:31.880 --> 0:03:34.320 what you're investing in to get exposure to it. There's 0:03:34.360 --> 0:03:36.160 a great quote in your recent note and I'm going 0:03:36.160 --> 0:03:37.360 to share it with our road against some one of 0:03:37.360 --> 0:03:39.880 your thoughts on it. We note the discrepancy between the 0:03:39.960 --> 0:03:42.800 China tech stack one that will increasingly have all of 0:03:42.920 --> 0:03:46.200 China to dominate. That's a really important line. Can you 0:03:46.240 --> 0:03:47.600 just build that out a little bit more? 0:03:47.720 --> 0:03:52.160 Yeah, first off, on that uninvestable line, I also wrote 0:03:52.160 --> 0:03:55.360 a couple months ago, pro tip when you hear uninvestable, 0:03:55.880 --> 0:03:59.880 invest So that's point A because it can't get any worse. 0:04:00.280 --> 0:04:02.720 Can't get any worse th investable. But yeah, I think 0:04:02.760 --> 0:04:05.800 this point about the tech stack is really really interesting. 0:04:06.120 --> 0:04:08.440 There are a lot of things setting up to create 0:04:08.480 --> 0:04:12.240 a big opportunity. And what's remembered that markets have already 0:04:12.280 --> 0:04:15.520 moved in the US in tech, etc. So we want 0:04:15.560 --> 0:04:18.760 to be looking for the new areas of opportunity and 0:04:18.760 --> 0:04:21.840 that's why that multi year positive framework allows us to 0:04:21.880 --> 0:04:23.800 go from point A to point B to point C, 0:04:24.080 --> 0:04:26.200 et cetera. And that's what we've been doing in our 0:04:26.240 --> 0:04:30.200 model portfolios the tech stack story. Look, we've been trying 0:04:30.240 --> 0:04:33.360 to freeze China out of the advanced technology. We're doing 0:04:33.360 --> 0:04:35.480 a pretty good job. They've got the message they have 0:04:35.520 --> 0:04:38.599 to build their own. They're now turning around saying, okay, fine, 0:04:38.680 --> 0:04:42.320 you can't play in our tech space. And therefore the 0:04:42.440 --> 0:04:45.760 question is, right now, do you want to be invested 0:04:46.000 --> 0:04:49.560 in a market of one point four billion people growing 0:04:49.600 --> 0:04:52.720 at six percent per annum, with an e commerce market 0:04:52.760 --> 0:04:55.720 that's double the size of the US, ten times the 0:04:55.760 --> 0:04:59.440 size of Japan, and trades at a seventy percent discount. 0:05:00.000 --> 0:05:03.760 Allibaba trades at eight times earnings, Tencent trades at fourteen 0:05:03.800 --> 0:05:07.839 times earnings, China overall trades at nine times earnings. Okay, 0:05:07.920 --> 0:05:10.680 no one owns it. It's like, I think it's a 0:05:10.720 --> 0:05:13.800 really interesting story. In the segue, you know, flip your 0:05:13.839 --> 0:05:17.200 mag seven into k Web, which is the China tech 0:05:17.240 --> 0:05:22.479 etf k Web can double and double again and still 0:05:22.520 --> 0:05:24.359 not get to the level it was in in twenty 0:05:24.400 --> 0:05:27.839 twenty one, John twenty five to fifty. The twenty twenty 0:05:27.839 --> 0:05:30.800 one high was one hundred and one dollars. I mean 0:05:30.800 --> 0:05:33.359 that to me is a no brainer, and we you know, 0:05:33.680 --> 0:05:35.160 full disclosure we own it. 0:05:35.760 --> 0:05:37.960 Pet chiev Academy is going to join us later in 0:05:38.000 --> 0:05:40.440 the program. In the next hour. He's put the emphsis 0:05:40.440 --> 0:05:44.159 on made by China. How important is that phrase going 0:05:44.240 --> 0:05:45.720 to be in years to come? 0:05:46.040 --> 0:05:48.600 Yeah, I mean, I think we're big believers. Our name 0:05:48.680 --> 0:05:52.680 and our firm TPW stands for tripole the world. Our 0:05:52.720 --> 0:05:56.599 whole thesis, our framework is regional integration in the three 0:05:56.600 --> 0:05:59.880 main regions of Asia, Europe and the Americas. All of 0:06:00.040 --> 0:06:02.880 this stuff is happening kind of as one would expect. 0:06:03.240 --> 0:06:09.200 Supply chain, regionalization, tech stack independent development. Everyone needs AI, 0:06:09.839 --> 0:06:14.760 everyone needs the climate proof everyone needs a semi, everyone 0:06:14.800 --> 0:06:17.719 needs electric vehicles and batteries, and these are the things 0:06:17.720 --> 0:06:21.360 that are driving that regional integration. And look, I think 0:06:21.480 --> 0:06:24.360 China is in a much stronger position than people give 0:06:24.400 --> 0:06:27.320 it credit for because the region that they're in that 0:06:27.320 --> 0:06:31.120 they're going to dominate is asion Azion is the biggest, 0:06:31.480 --> 0:06:34.800 fastest growing region and will be for the next ten years. 0:06:34.960 --> 0:06:37.240 It's striking that you have such conviction in China when 0:06:37.279 --> 0:06:39.240 what we continue to hear from Washington is that they're 0:06:39.240 --> 0:06:41.400 just going to up the ante. Right now, they're wighing 0:06:41.400 --> 0:06:44.880 whether or not they're going to sanction the chip makers 0:06:45.120 --> 0:06:49.640 around wallways entire production. How much does that concern you? 0:06:49.800 --> 0:06:52.000 Yeah, No, there's a race, right, there's a race going on. 0:06:52.160 --> 0:06:56.719 China's racing to get itself kind of independent, and we're 0:06:56.800 --> 0:07:00.960 racing to freeze them out of this stuff. And I 0:07:00.960 --> 0:07:04.359 think the point that we see is that the US 0:07:04.440 --> 0:07:07.880 trying to freeze China is already in the price. Everybody 0:07:08.200 --> 0:07:10.800 who doesn't want to invest in China because they're worried 0:07:10.800 --> 0:07:14.320 about US sanctions is already gone, long gone, and they're 0:07:14.360 --> 0:07:16.680 not going to come in. Fine, we don't need them 0:07:16.720 --> 0:07:19.800 to come in again. K Web can double and double again. 0:07:19.840 --> 0:07:22.400 I'll just take the first double from twenty six to 0:07:23.280 --> 0:07:26.080 fifty and weave the second double to somebody else. 0:07:26.160 --> 0:07:29.160 So a sixty percent tariff wall for Chinese imports doesn't matter. 0:07:29.400 --> 0:07:32.320 Oh yeah, sure it will matter. Markets will sell off 0:07:32.360 --> 0:07:34.160 depending on where we go between now and then. 0:07:34.360 --> 0:07:36.360 But I mean, if China is going to build within 0:07:36.400 --> 0:07:38.520 their own achon. 0:07:38.360 --> 0:07:41.080 Yeah, I mean I would look at what China's done 0:07:41.160 --> 0:07:43.160 over the last thirty or forty years, and I don't 0:07:43.160 --> 0:07:45.320 think we'd want to bet against their ability to kind 0:07:45.320 --> 0:07:46.720 of construct what they need to construct. 0:07:46.800 --> 0:07:49.080 So when everyone else said an investable, you go bullish 0:07:49.120 --> 0:07:51.880 when you say no brainer. Does that make you uncomfortable? 0:07:51.920 --> 0:07:54.920 What are the risk factors you would acknowledge exists around 0:07:55.040 --> 0:07:56.720 this bullish thesis for China? 0:07:56.920 --> 0:07:58.200 Yeah, fairly. 0:07:58.320 --> 0:08:02.200 What Amory said is one, if we come out if 0:08:02.440 --> 0:08:05.720 the former president wins, which, as I've said on the show, 0:08:06.120 --> 0:08:08.520 I believe Biden will win on the landslide. But if 0:08:08.560 --> 0:08:11.240 the former president were to win and we're to implement 0:08:11.280 --> 0:08:14.280 the tariff structures that he's talked about, that's clearly going 0:08:14.360 --> 0:08:17.600 to set the Chinese market back. But by the same token, 0:08:18.320 --> 0:08:21.280 as we advance to that point in time, China's own 0:08:21.320 --> 0:08:25.080 internal dynamics theoretically should get better, right, The property market 0:08:25.160 --> 0:08:28.360 should be better dealt with the focus on domestic consumption, 0:08:28.480 --> 0:08:31.800 should be moving further down the road. So it's not 0:08:31.960 --> 0:08:35.400 a zero sum and how that all plays out, you know. 0:08:35.400 --> 0:08:37.280 I mean, we have the ability to change our mind 0:08:37.360 --> 0:08:40.080 and to adjust our positions, and so we'll look at 0:08:40.120 --> 0:08:42.480 that when the time comes. But I mean that to 0:08:42.520 --> 0:08:45.240 me is a big worry because I think everything else 0:08:45.320 --> 0:08:48.480 is in the price Ali Baba, And no, it doesn't 0:08:48.520 --> 0:08:50.560 grow as much as it as it did before but 0:08:50.600 --> 0:08:52.640 as the prior guest said, same is happening in the 0:08:52.760 --> 0:08:56.640 US tech space. Earnings acceleration is coming down, same as 0:08:56.640 --> 0:08:59.840 in Ali Baba. The other point is that these companies 0:09:00.080 --> 0:09:03.320 in China are just like the US companies. They're cash 0:09:03.360 --> 0:09:07.520 making machines, they are buying backstock, they are paying dividends, 0:09:07.920 --> 0:09:10.960 and so you know, eight nine times earnings. I think 0:09:10.960 --> 0:09:13.760 the risk reward is some of the best in the 0:09:13.760 --> 0:09:16.160 world because the risk is already in the price and 0:09:16.240 --> 0:09:19.080 the reward is starting to materialize. 0:09:19.080 --> 0:09:21.000 I'm sure this morning you've managed to convert a few 0:09:21.000 --> 0:09:24.760 non believers for a tactical trade. What's interesting about your call. 0:09:24.800 --> 0:09:27.120 It's not just tactical. It's not twenty twenty four, it's 0:09:27.160 --> 0:09:29.960 twenty twenty five, it's twenty twenty six. Why is this 0:09:30.000 --> 0:09:32.720 being extrapolated out. It doesn't sound like this late cycle 0:09:32.800 --> 0:09:36.520 story from your standpoint. It feels much much longer term. 0:09:36.600 --> 0:09:38.760 Yeah, exactly, John. And you know, we put out a 0:09:38.760 --> 0:09:41.680 piece our twenty twenty four outlook back in the beginning 0:09:41.679 --> 0:09:45.280 of November, so five months ago. The title was surprise Surprise. 0:09:45.760 --> 0:09:49.520 We had four macro surprises, lower inflation sooner than expected, 0:09:49.880 --> 0:09:54.800 better productivity, growth, return the stability in early cycle. All 0:09:54.840 --> 0:09:58.600 those are playing out, in particular the return to stability argument. 0:09:58.880 --> 0:10:01.960 Look at the vics, look at the move, look at 0:10:02.000 --> 0:10:04.800 the FED. With all respect to the lineup of FED speakers, 0:10:05.000 --> 0:10:07.400 I pay virtually no attention to that anymore. 0:10:07.600 --> 0:10:10.280 That is not the We've just had an eight minute 0:10:10.280 --> 0:10:12.840 conversation and that's how long it took to mention the 0:10:12.840 --> 0:10:14.760 FEDER reserve in your whole fasis. 0:10:14.800 --> 0:10:18.880 Ye, that's exactly right. Way is that because it doesn't matter. 0:10:19.120 --> 0:10:22.640 The important thing is that the FED and markets are 0:10:22.679 --> 0:10:25.760 in sync after being out of sync. Right six rate 0:10:25.800 --> 0:10:29.160 cuts in December now and FED at three. Now we're 0:10:29.200 --> 0:10:32.360 both at three and guess what that happened without a 0:10:32.480 --> 0:10:36.439 ripple of market on ease. And that tells me that 0:10:36.440 --> 0:10:38.240 that's one of the things that tells me that this 0:10:38.400 --> 0:10:42.200 market is a strong market. And so we have, in 0:10:42.280 --> 0:10:45.800 our view, were early cycle. We've made a return to stability. 0:10:46.000 --> 0:10:48.200 The FED is our friend now right can cut as 0:10:48.240 --> 0:10:51.520 you were talking about with labor worries. The FED is 0:10:51.559 --> 0:10:54.440 our friend. The rest of the world is picking up. 0:10:54.960 --> 0:10:57.720 And so we look at twenty twenty three to twenty 0:10:57.760 --> 0:11:02.480 twenty seven that that body of time as being very 0:11:02.559 --> 0:11:05.439 much akin to nineteen ninety five to nineteen ninety nine, 0:11:05.760 --> 0:11:10.520 where you had productivity inspired growth, you had lower inflation, 0:11:10.720 --> 0:11:13.520 you had good earnings growth. The difference, as you quoted, 0:11:14.040 --> 0:11:16.400 is that this time it's global, and it's global because 0:11:16.440 --> 0:11:19.800 of this tripole, the world materializing and the fact that 0:11:19.840 --> 0:11:25.720 everybody has to spend on AI, on climate, on semis, 0:11:25.960 --> 0:11:29.240 on electric vehicles, and so you're getting, in our view, 0:11:29.280 --> 0:11:32.840 a much more stable globe because you're not dependent on 0:11:32.920 --> 0:11:36.440 the Chinese consumer or on the US. You now have 0:11:36.600 --> 0:11:40.720 three centers that are going to be growing independently of 0:11:40.760 --> 0:11:44.480 each other. And so really the question is who balances 0:11:44.600 --> 0:11:48.360 best private and public sector because you need both because 0:11:48.400 --> 0:11:53.600 these are huge, huge investments, right, these are game changing investments, 0:11:53.600 --> 0:11:56.640 and so who manages that best. And that's one of 0:11:56.679 --> 0:11:58.560 the reasons why we like Europe and you and I've 0:11:58.559 --> 0:12:01.240 been talking about this for years, but Europe has more 0:12:01.280 --> 0:12:06.200 experience than any region and getting everybody around the same page. 0:12:06.200 --> 0:12:09.160 One can argue they do it well, it takes too long. 0:12:09.520 --> 0:12:12.120 But you know, look at the US and Congress, right, 0:12:13.080 --> 0:12:15.960 not really an example of great governance, and look at 0:12:16.040 --> 0:12:20.040 China stumbling after a really good run. So I look 0:12:20.040 --> 0:12:24.040 at Azion in China dominates Azion, the fastest growing region 0:12:24.040 --> 0:12:26.280 of the world. We want to play there. We look 0:12:26.320 --> 0:12:31.640 at Europe integrating, being and being forced by conflict to integrate, right, 0:12:33.480 --> 0:12:37.400 multiple countries spending together, raising debt together, so you're going 0:12:37.400 --> 0:12:40.240 to see that capital market integration. And then we look 0:12:40.280 --> 0:12:43.520 here in the Americas and we see Mexico, which again 0:12:43.800 --> 0:12:45.920 you know, we've been overweight and invested in for two 0:12:46.000 --> 0:12:48.680 years because it is the flagship for the tripol the 0:12:48.679 --> 0:12:52.040 World thesis, you know, the biggest beneficiary of what's going 0:12:52.080 --> 0:12:54.560 on in the Americas. We're invested in Poland you and 0:12:54.600 --> 0:12:57.760 I talked about that last time for the European thesis 0:12:57.760 --> 0:13:00.840 as well. Yeah, and we're invested in China for the 0:13:00.880 --> 0:13:04.280 Asian thesis and self to us, uh, it's an exciting 0:13:04.800 --> 0:13:07.880 blue sky period ahead and the fact that most people 0:13:07.920 --> 0:13:10.360 are not there. People have kind of gotten onto the 0:13:10.600 --> 0:13:14.400 tactical trade. I mean, you know, twenty one weeks, if 0:13:14.400 --> 0:13:17.319 you're not on the tactical trade, you're probably not working anymore. 0:13:18.200 --> 0:13:20.840 But you know, to us, the good news is that 0:13:21.160 --> 0:13:24.240 we are you know, we we we see the process 0:13:24.320 --> 0:13:27.240 moving for multiple years and we're still early in that 0:13:27.480 --> 0:13:29.560 and others are going to come behind us. We're already 0:13:29.559 --> 0:13:32.640 double weighted commodities and we have been for six months, 0:13:33.080 --> 0:13:36.240 and so we're you know, we're just moving from point 0:13:36.240 --> 0:13:37.400 A to point being onward. 0:13:37.600 --> 0:13:39.480 This is some super bolish stuff. Just remind me never 0:13:39.520 --> 0:13:42.920 to book you for FED. Decision done, okay, He Piloski 0:13:43.080 --> 0:13:56.880 TVW Pina chiev Academy Security, saying he's ready for a rotation. 0:13:57.280 --> 0:13:59.600 He writes this, I'm so sick of hearing about the 0:13:59.640 --> 0:14:03.800 maximum FAB four or whatever it's words, not mine, and 0:14:03.840 --> 0:14:06.080 that it is time at the time of the twenty 0:14:06.080 --> 0:14:08.520 second old time high for the S and P five hundred, 0:14:08.800 --> 0:14:11.240 I'm looking for anything to stand me away from that. 0:14:11.520 --> 0:14:15.800 The Russell two thousand Suddody outperforming is interesting. Patreons is 0:14:15.800 --> 0:14:17.800 around the table for more pink and mornings here. 0:14:18.120 --> 0:14:18.640 Good morning. 0:14:18.760 --> 0:14:21.360 Is it more than just interesting? Is it a real deal? 0:14:21.600 --> 0:14:21.800 You know? 0:14:21.800 --> 0:14:23.560 I'm not one hundred percent sure because I've been kind 0:14:23.560 --> 0:14:26.320 of thinking about this. Marketers as really AI, anything that's 0:14:26.400 --> 0:14:29.320 kind of been deputized into AI has been driving the market. 0:14:29.360 --> 0:14:30.600 But for the last week, all of a sudden, the 0:14:30.680 --> 0:14:32.440 Russell two thousands a little bit better. I've liked the 0:14:32.560 --> 0:14:35.400 energy sector in particular, and I'm wondering how people are 0:14:35.400 --> 0:14:38.920 starting to say, maybe banking's okay, commercial real estate, your 0:14:38.960 --> 0:14:41.400 biotech sad is ups and downs, So we could see 0:14:41.400 --> 0:14:44.240 a rotation. Unfortunately, I think this time, unlike November where 0:14:44.280 --> 0:14:46.600 we saw the rotation with strong gains for both, this 0:14:46.720 --> 0:14:48.240 time I think we might get tepic gains in the 0:14:48.280 --> 0:14:50.920 Rustle two thousand and a small pullback in the Nasdaq 0:14:50.960 --> 0:14:51.400 one hundred. 0:14:51.440 --> 0:14:53.520 Yeah, your words, and I think they're interesting, they're important 0:14:53.520 --> 0:14:55.920 power for words. It's the rotation more about losing less 0:14:56.000 --> 0:14:57.720 or making more, which one is it. 0:14:57.880 --> 0:14:59.840 I think it's going to be about losing less right now. 0:15:00.000 --> 0:15:02.360 I think where a lot of the froth is, where 0:15:02.440 --> 0:15:05.000 things are overextended, is really in that Nasdaq one hundred 0:15:05.000 --> 0:15:07.000 types stocks, and if you look at it, it's really 0:15:07.240 --> 0:15:09.440 unchanged in about a month month and a half, so 0:15:09.520 --> 0:15:11.320 it keeps coming up and maybe it's a new hire, 0:15:11.440 --> 0:15:14.880 but barely unlike maybe the S and P. So I 0:15:14.880 --> 0:15:16.640 think there's room for that to kind of top a 0:15:16.680 --> 0:15:20.080 little bit. As people question have we overextended on AI? 0:15:20.280 --> 0:15:20.560 Listen? 0:15:20.600 --> 0:15:21.800 AI is going to drive the future. 0:15:21.840 --> 0:15:24.440 The questions to me are are you getting enough value 0:15:24.480 --> 0:15:27.600 at today's technology level, at today's pricing, and I'm not 0:15:27.640 --> 0:15:30.400 sure everyone's getting that. So if you see a pullback there, 0:15:30.520 --> 0:15:32.600 it's going to be the Russell two thousand plus. People 0:15:32.600 --> 0:15:34.720 are looking where to put money that's not at all 0:15:34.760 --> 0:15:37.040 time highs or really high pe ratios. 0:15:37.080 --> 0:15:39.200 I'll ask a question too that I asked the Lord Calvacina, 0:15:39.240 --> 0:15:41.560 who is seeing potentially the signs as well of a rotation. 0:15:41.680 --> 0:15:45.480 We've had so many rotationary false starts. What makes you 0:15:45.520 --> 0:15:47.120 have the conviction that you think this could be it? 0:15:47.400 --> 0:15:49.200 Well again, I think we go back to the fall. 0:15:49.360 --> 0:15:51.800 We had a twenty two percent rise in the Russell 0:15:51.800 --> 0:15:54.400 two thousand versus eleven in Nasdaq one hundred, so that's 0:15:54.800 --> 0:15:56.600 ten percent out performance. That's the sort of thing I'm 0:15:56.600 --> 0:15:59.080 looking at. I think people are getting tired with the 0:15:59.080 --> 0:16:02.000 same story. Okay, I've already fully committed to AI. Where 0:16:02.000 --> 0:16:03.320 am I going to put my new money? And you 0:16:03.360 --> 0:16:06.600 start looking for value, you start putting money elsewhere. You've 0:16:06.640 --> 0:16:09.880 seen energy do very well, mining is doing well, so 0:16:09.920 --> 0:16:12.320 I think that starts leading the way. If banks can stabilize. 0:16:12.320 --> 0:16:14.720 When we get bank earnings next week, the regionals do well, 0:16:14.880 --> 0:16:17.040 that really pushes nicely there, and that's where I think 0:16:17.120 --> 0:16:17.480 drives it. 0:16:17.560 --> 0:16:20.680 Ja Plowski was also talking about energy, you like mining, 0:16:20.800 --> 0:16:23.440 He also liked soft commodities like agriculture. So you're just 0:16:23.480 --> 0:16:26.480 see the entire commodity landscape push higher, you know. 0:16:26.560 --> 0:16:28.760 I'm more in the hard commodities. I think me energy 0:16:28.760 --> 0:16:30.920 has been really the big focus because how I've been 0:16:30.960 --> 0:16:33.720 looking at it is it feels like we're finally understanding 0:16:33.760 --> 0:16:36.040 if we want sustainable energy, we have to build up 0:16:36.040 --> 0:16:38.800 sustainable energy more rapidly. So that's going to require a 0:16:38.800 --> 0:16:40.960 lot of commodities. But we also, for the first time, 0:16:41.000 --> 0:16:43.720 I think, understand we need real traditional energy for the 0:16:43.800 --> 0:16:46.920 next twenty thirty years, so that's going to be built out. 0:16:46.960 --> 0:16:49.800 So that's why I think that hard commodity energy is better. 0:16:50.080 --> 0:16:52.520 I'm not as sure about the egg stuff, though I 0:16:52.520 --> 0:16:54.040 would not touch Coco for example. 0:16:54.200 --> 0:16:56.640 Are you doing this through equity exposure or directly through 0:16:56.640 --> 0:16:58.000 the commodity market, which we want? 0:16:58.040 --> 0:16:58.960 I prefer the equities. 0:16:59.000 --> 0:17:01.360 I think again, our story for the last two to 0:17:01.400 --> 0:17:04.040 three years has really been that the energy companies of 0:17:04.080 --> 0:17:05.560 the future are the energy. 0:17:05.280 --> 0:17:06.080 Companies of today. 0:17:06.240 --> 0:17:07.719 People kind of toss them out the window A few 0:17:07.800 --> 0:17:09.440 years ago and saying, Oh, it's all going to be 0:17:09.440 --> 0:17:10.840 about wind farms. It's all going to be about this, 0:17:10.880 --> 0:17:13.480 And people are realizing the traditional energy companies have the 0:17:13.520 --> 0:17:16.600 resources to provide energy today, but the skills to figure 0:17:16.600 --> 0:17:18.200 out how to provide energy in the future. 0:17:18.400 --> 0:17:19.720 I think that's where the big bet is. 0:17:19.640 --> 0:17:21.440 Still starting to see that. In March, start to see 0:17:21.520 --> 0:17:23.680 energy pitcomp I think by about ten percent, really solid 0:17:23.680 --> 0:17:26.359 month against for energy stocks on the SMP. Likewise, on 0:17:26.359 --> 0:17:28.320 the banks as well, You've got an interesting take on 0:17:28.359 --> 0:17:30.399 a federal reserve. We've heard echoes of this over the 0:17:30.440 --> 0:17:33.320 last week following Shairman Powe. Well, they haven't officially changed 0:17:33.359 --> 0:17:35.360 their target. They seem to be willing to ease monetary 0:17:35.400 --> 0:17:39.520 policy even while inflation remains closer to three percent than two. 0:17:39.960 --> 0:17:42.359 What is one hundred banks is points between friends? What 0:17:42.400 --> 0:17:43.520 does it change in this market? 0:17:43.640 --> 0:17:45.600 So I don't think it changes that much. I think again, 0:17:45.680 --> 0:17:47.800 we saw the market priced out. I think we started 0:17:47.840 --> 0:17:49.440 the year at six rate cuts, we went down to 0:17:49.440 --> 0:17:51.480 as low as two and a half, and the market 0:17:51.480 --> 0:17:53.400 did fine because it's all about growth. So I think 0:17:53.400 --> 0:17:55.720 we can manage around that. But I think there is 0:17:55.760 --> 0:17:57.879 a little bit of froth, and maybe it's deserved. 0:17:58.000 --> 0:17:59.440 As you see, Powell kind of. 0:17:59.800 --> 0:18:03.080 Shift is narrative to things that allow him to cut. Right, 0:18:03.119 --> 0:18:05.439 No one's talking about the market doing the work for him, 0:18:05.520 --> 0:18:07.959 remember back in November when yields were high. Now the 0:18:07.960 --> 0:18:10.040 market's undone all the work for him, and no one 0:18:10.080 --> 0:18:11.000 wants to talk about that. 0:18:11.119 --> 0:18:12.000 So it feels to. 0:18:11.960 --> 0:18:14.320 Me they're constantly looking to pivot to some excuse to 0:18:14.320 --> 0:18:17.480 be easy, which I understand. If you're the person in 0:18:17.560 --> 0:18:18.920 charge of the FED, you probably don't want to be 0:18:18.960 --> 0:18:20.919 the one who drives us into recessions, so you're probably 0:18:20.960 --> 0:18:23.560 slightly biased easy. And now he's figured out a new 0:18:23.640 --> 0:18:24.359 rationale for that. 0:18:24.520 --> 0:18:26.600 Do you think the FED is actually working against the 0:18:26.640 --> 0:18:28.640 market or other The market's working against the Fed because 0:18:28.640 --> 0:18:31.080 the FED seems comfortable with stocks at all time highs 0:18:31.080 --> 0:18:32.920 and credit spreads that are super tight. 0:18:33.200 --> 0:18:35.360 You know, I think we're okayish right now. I think 0:18:35.640 --> 0:18:37.919 there's kind of a decent balance, right. No one's going crazy. 0:18:37.920 --> 0:18:40.040 We're not talking about four or five cuts this year. 0:18:40.359 --> 0:18:43.080 I think we are rightly saying it's probably the end of. 0:18:43.000 --> 0:18:43.919 The hiking cycle. 0:18:44.400 --> 0:18:46.400 Though having said that, right as some of this data 0:18:46.400 --> 0:18:48.240 comes through and if I'm right on some of the commodities, 0:18:48.440 --> 0:18:50.399 we might see a bit of a resurgence. And the 0:18:50.440 --> 0:18:53.320 other topic that's coming up a lot is as we're saying, oh, 0:18:53.359 --> 0:18:56.240 inflation's coming down, I think people are questioning, did we 0:18:56.280 --> 0:18:59.680 ever really managed to monitor rout inflation for the last 0:18:59.680 --> 0:19:02.320 three year? Are we heavily understating because you go into 0:19:02.359 --> 0:19:03.879 the stores and it doesn't look like things are up 0:19:03.920 --> 0:19:05.800 three or four percent parandum. It looks like they're up 0:19:05.800 --> 0:19:08.639 ten percent perandum. So I think people are questioning some 0:19:08.680 --> 0:19:12.280 of the actual starting level from this decline. 0:19:12.400 --> 0:19:14.320 If the feed is trying to find any excuse, to 0:19:14.359 --> 0:19:18.040 your point, potentially to cut, what could they use, say 0:19:18.080 --> 0:19:20.200