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Speaker 1: Let's get to Shane Assistle, our guest for the half hour.

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Speaker 1: Shana is founder and president at ben Ryon Capital Management,

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Speaker 1: on the line from Chicago. So, Shana, do you do

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Speaker 1: you buy into this rally today? Is this an important

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Speaker 1: inflection point or do you think it's a kind of

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Speaker 1: a bear market trap interest It's interesting. I don't know

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Speaker 1: if I have an opinion on this rally. I think

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Speaker 1: that there's a number of issues I personally see UM. Specifically,

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Speaker 1: I think earnings being as resilient as they have been

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Speaker 1: is actually not a good thing UM. So I'm concerned

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Speaker 1: that this type of rally kind of emboldens the Federal

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Speaker 1: Reserve to be more aggressive or continue this aggressive stance

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Speaker 1: on interest rates. We have midterms coming up, which can

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Speaker 1: be positive for UM markets, and markets do tend to

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Speaker 1: bottom in October, so you know, there's there's kind of

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Speaker 1: things on both sides that I see, But I'm not

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Speaker 1: sure we're through the worst of it. I actually think

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Speaker 1: the market is going to be volatile for extended period

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Speaker 1: of time. Would weaker earnings that have really changed the

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Speaker 1: move the needle at all? For the Fed? They seem

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Speaker 1: very committed to getting inflation under control. And we've heard

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Speaker 1: from Marc Mobius today saying rates might need to hit

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Speaker 1: nine percent to achieve that goal. What are your thoughts.

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Speaker 1: I saw that. I think there is no chance the

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Speaker 1: Fed goes to nine percent. They seem very uh fixated

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Speaker 1: on sort of four and a half to five UM.

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Speaker 1: But that said, he does have a point if if

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Speaker 1: inflation doesn't start coming down, they do have to be

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Speaker 1: above the inflation rate. UM. I just think that the

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Speaker 1: Fed sees is following the economic conditions and as long

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Speaker 1: as employment stays where it is and earnings remain stable,

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Speaker 1: they feel like they can continue to be aggressive because

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Speaker 1: it's not pushing the economy into recession, and they have

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Speaker 1: said that they're willing to do that. I think if

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Speaker 1: they start to see signs that there's real economic casualty here,

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Speaker 1: that that might give them reason to pause. Bloombrick economist

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Speaker 1: or forecasting a recession hitting the American economy in October,

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Speaker 1: so a year from now with one percent probability, that's

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Speaker 1: a lot for the market to kind of digest very quickly.

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Speaker 1: Is that feasible in your view? I actually agree with that.

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Speaker 1: But here's an interesting fact. Since there has never been

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Speaker 1: a recession that started in the third year of a

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Speaker 1: presidential cycle in the US. So history says that that's

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Speaker 1: not going to happen. But I think the probability is high.

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Speaker 1: It's just it's never happened before. And Shana, we've got

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Speaker 1: to say, report today from Bloomberg Economics predicting a knee

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Speaker 1: one percent chance of recession now in the US. SO

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Speaker 1: in this environment, I understand you're getting defensive. Where are

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Speaker 1: you putting money to work? Well, you know, I've been

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Speaker 1: on a few times. I would say that my my

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Speaker 1: usp and how I'm positioning portfolios hasn't changed at all. UH.

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Speaker 1: Continue to focus on quality UH factors UH specifically low

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Speaker 1: ball and the actual quality factor, looking at being defensive

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Speaker 1: through the use of liquid alternatives to help heads the

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Speaker 1: downside potential and portfolios sticking with large cap names. If

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Speaker 1: I am outside of the large cap space, I tend

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Speaker 1: to focus on defensive types of of names. And when

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Speaker 1: I say defensive, I mean like in the devent defense space. UH.

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Speaker 1: And so you know that hasn't really changed at all.

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Speaker 1: The names I like remain the same as they have

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Speaker 1: been for quite some time. Looking for some good entry

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Speaker 1: points into a couple of my more controversial sort of

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Speaker 1: tech names. There's some names in the reeds space that

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Speaker 1: I'm interested in, haven't found the right entry point. Uh.

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Speaker 1: That's that's how I'm generally looking at portfolios. Nothing's really

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Speaker 1: changed in the way I'm positioning them now. I don't

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Speaker 1: um want to get more bullish at this point, because

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Speaker 1: to your point, I think that there's more downside than

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Speaker 1: the economy to come, and I do think the markets

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Speaker 1: are going to remain volatile for some time, especially while

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Speaker 1: the FED continues to be aggressive. So what about being

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Speaker 1: diversified in such a way that would take you offshore?

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Speaker 1: I mean, maybe e M Asia. Are there markets there

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Speaker 1: that that look appealing. I know we've had the Party

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Speaker 1: Congress underway and there's been a little bit of disappointment.

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Speaker 1: We know that the mainland Chinese economy is struggling, but

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Speaker 1: there are other markets to consider, wouldn't you agree? I

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Speaker 1: would agree. My My biggest problem with some of the

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Speaker 1: emerging market offerings out there is they do tend to

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Speaker 1: be China heavy um and the zero COVID policy really

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Speaker 1: is concerning to me. I just don't know how you

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Speaker 1: improve your economy if you have that policy. So there's

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Speaker 1: like there's an e t F called f r d M,

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Speaker 1: which is an emerging market um uh e t F

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Speaker 1: that focuses on emerging market economy, but more on the

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Speaker 1: the openness of their their economy, which has actually done

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Speaker 1: quite well. That's something I would take a look at

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Speaker 1: UM in terms of taking advantage of of opportunities and

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Speaker 1: emerging markets. I'd like to see the dollar weekend a

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Speaker 1: bit before I'm ready to jump in to UM international names.

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Speaker 1: You need a bit of a weaker dollar for for

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Speaker 1: that to really pay off unless you're doing some sort

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Speaker 1: of hedging UM in in in the investment strategy UM.

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Speaker 1: And so this dollar has been a little strong, too

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Speaker 1: strong for me to to take the risk of some

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Speaker 1: of these economies that have larger gy of political issues

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Speaker 1: that I think are going to continue to affect them. Yeah,

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Speaker 1: a little strong might might be an understatement. Where one

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Speaker 1: forty nine against the end. Now, when do you see

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Speaker 1: this story ending? And I suppose this brings us full

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Speaker 1: circle back to the fit it does. And and quite frankly,

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Speaker 1: you look at something like the UK which can't get

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Speaker 1: out of its own way. It's not helping itself. And

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Speaker 1: as long as it keeps having issues, the dollar is

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Speaker 1: going to be strong against say the pound, and the

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Speaker 1: Euro has its own issues, and so it's hard for

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Speaker 1: me to see a scenario where even with what the

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Speaker 1: Feds doing, the dollar weakens in a significant way because

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Speaker 1: you have to look at it relative to the other options,

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Speaker 1: which don't look like they're going to get their act

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Speaker 1: together anytime soon. In terms of some of these beaten

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Speaker 1: up markets. You'd mentioned China a moment ago. If you've

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Speaker 1: got a really long time horizon, let's say three to

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Speaker 1: five years, can you take the attitude that this two

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Speaker 1: may pass. Do you look at opportunities with the intention

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Speaker 1: of getting long again. I'd like to see China those policies.

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Speaker 1: I don't know how long they're going to keep a

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Speaker 1: zero COVID policy. They're one of the only countries still

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Speaker 1: doing that. They could hypothetically continue this process for five years.

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Speaker 1: And there's some you know, geopolitical aspects to it, with

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Speaker 1: sanctions and these weird policies that for example, the US

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Speaker 1: have that are going to hurt the Chinese economy. So

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Speaker 1: it's really hard for me to look at that risk

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Speaker 1: and think, yeah, now it's the time to get in there.

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Speaker 1: I just I need to see some more progress there,

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Speaker 1: all right, thanks so much. Shane Assisile, Founder and president

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Speaker 1: at Boundary and Capital Management,