WEBVTT

1
00:00:00.560 --> 00:00:18.000
<v Speaker 1>As This is the seventy seven WABC Mini cast.

2
00:00:19.399 --> 00:00:24.640
<v Speaker 2>It's the Larrycudlow Show. Free Market Prosperity starts here now

3
00:00:24.800 --> 00:00:27.920
<v Speaker 2>Here's Larrycudlow our three.

4
00:00:28.280 --> 00:00:31.760
<v Speaker 3>Welcome back everybody. By the way, if it works for you,

5
00:00:31.839 --> 00:00:34.799
<v Speaker 3>if you need it, you can live stream this over

6
00:00:34.840 --> 00:00:41.520
<v Speaker 3>the internet Larrycudlowshow dot Com, Larrycudlowshow dot com and let

7
00:00:41.560 --> 00:00:46.840
<v Speaker 3>me pitch Fox Fabulous Fox Business Network FBN. The name

8
00:00:46.840 --> 00:00:50.359
<v Speaker 3>of the show's Cuddlow four to five pm every day,

9
00:00:50.920 --> 00:00:54.640
<v Speaker 3>Monday through Friday. And if you can't make it, just

10
00:00:54.679 --> 00:00:57.000
<v Speaker 3>text your favorite nine year old and she'll show you

11
00:00:57.039 --> 00:01:00.799
<v Speaker 3>had a DVR the show. No problems anyway. We're going

12
00:01:00.840 --> 00:01:06.400
<v Speaker 3>to talk stocks and we've got some headlines. Your active

13
00:01:06.560 --> 00:01:12.159
<v Speaker 3>ETF manager lost again and eighty seven percent of them

14
00:01:12.159 --> 00:01:16.760
<v Speaker 3>have been losing for a decade. Passive versus active. Okay,

15
00:01:16.840 --> 00:01:21.319
<v Speaker 3>it's a very interesting debate. We've got my pal David Bonson,

16
00:01:22.040 --> 00:01:25.799
<v Speaker 3>head of the Bonson Group, founder, managing partner, the author

17
00:01:25.840 --> 00:01:31.200
<v Speaker 3>of the Dividendcafe dot com, his new book Profit from

18
00:01:31.280 --> 00:01:35.719
<v Speaker 3>the Profit, The Past, Present and Future of dividend growth Investing. Yes,

19
00:01:35.799 --> 00:01:40.760
<v Speaker 3>Sir okay, and Jim Lecant Morgan Stanley, executive director and

20
00:01:40.920 --> 00:01:47.040
<v Speaker 3>Senior Portfolio management Director. Well, some heavy duty stuff, all right, fellas,

21
00:01:47.920 --> 00:01:51.840
<v Speaker 3>let me put this out. The spiders Spy delivered two

22
00:01:51.959 --> 00:01:57.280
<v Speaker 3>hundred and fifty two percent over ten years with a

23
00:01:57.439 --> 00:02:04.840
<v Speaker 3>charge of nine bases points GUARD charges just three basis points.

24
00:02:05.760 --> 00:02:09.680
<v Speaker 3>Only twenty seven percent of actively managed US large cap

25
00:02:09.719 --> 00:02:13.560
<v Speaker 3>equity funds beat their benchmark over the past twelve months,

26
00:02:13.599 --> 00:02:17.520
<v Speaker 3>and over the decade through June. The decade of June,

27
00:02:18.080 --> 00:02:23.840
<v Speaker 3>just thirteen percent of active managers beat their benchmark. All right,

28
00:02:24.280 --> 00:02:26.680
<v Speaker 3>we've talked about it on the TV show briefly, we

29
00:02:26.719 --> 00:02:29.240
<v Speaker 3>want to raise it again with you guys. Let me

30
00:02:29.280 --> 00:02:33.479
<v Speaker 3>start with David Bohnson, David, active versus passive? What do

31
00:02:33.520 --> 00:02:34.120
<v Speaker 3>you make of it?

32
00:02:35.479 --> 00:02:38.560
<v Speaker 4>Well, you know, Larry, you mentioned my book and the

33
00:02:38.639 --> 00:02:41.560
<v Speaker 4>profit from the profit book coming out Tuesday deals with

34
00:02:41.599 --> 00:02:44.520
<v Speaker 4>what I've devoted my adult life to, which is dividend

35
00:02:44.560 --> 00:02:48.840
<v Speaker 4>growth investing. And I'll love this conversation about active versus

36
00:02:48.840 --> 00:02:52.560
<v Speaker 4>passive because, on one hand, I really believe if the

37
00:02:52.639 --> 00:02:56.879
<v Speaker 4>whole market is going higher, if beta is rallying, if

38
00:02:57.479 --> 00:03:01.639
<v Speaker 4>all you're getting is multiple expansion and rowing earnings, and

39
00:03:01.800 --> 00:03:05.039
<v Speaker 4>basically from two thousand and nine to twenty twenty six,

40
00:03:05.719 --> 00:03:11.479
<v Speaker 4>seventeen years, the SMP compounds at fifteen percent and has

41
00:03:11.639 --> 00:03:15.599
<v Speaker 4>lower than historical standard deviation, with a grand total of

42
00:03:15.719 --> 00:03:19.879
<v Speaker 4>two negative years out of seventeen, only one of them

43
00:03:19.879 --> 00:03:23.039
<v Speaker 4>at twenty twenty two, where the SMP was down eighteen

44
00:03:23.080 --> 00:03:27.479
<v Speaker 4>point nine, being really substantial. If you are going to

45
00:03:27.520 --> 00:03:30.639
<v Speaker 4>get a market like that, passive sounds like a very

46
00:03:30.680 --> 00:03:31.360
<v Speaker 4>good deal.

47
00:03:31.840 --> 00:03:34.719
<v Speaker 5>And yet somehow divid in.

48
00:03:34.719 --> 00:03:41.240
<v Speaker 4>Growth actively managed has outperformed the market. How is that possible? Well,

49
00:03:41.240 --> 00:03:43.199
<v Speaker 4>over the twenty five years I've been doing it, we

50
00:03:43.280 --> 00:03:45.879
<v Speaker 4>got a really nice head start because guess what that

51
00:03:46.039 --> 00:03:48.840
<v Speaker 4>SMP did in the ten years before that period, very

52
00:03:49.319 --> 00:03:53.240
<v Speaker 4>zero percent because of the bookends of the dot com

53
00:03:53.280 --> 00:03:56.639
<v Speaker 4>crash and the financial crisis. The SMP was up zero

54
00:03:56.719 --> 00:04:00.120
<v Speaker 4>percent for ten years, where given in growth compound and

55
00:04:00.159 --> 00:04:01.840
<v Speaker 4>did it seven percent per year.

56
00:04:02.479 --> 00:04:04.000
<v Speaker 5>So it just depends.

57
00:04:04.000 --> 00:04:07.840
<v Speaker 4>If you're in a screaming bowl market, passive is pretty

58
00:04:07.879 --> 00:04:09.439
<v Speaker 4>hard to not do.

59
00:04:09.520 --> 00:04:12.800
<v Speaker 5>Well, and the only way to outperform.

60
00:04:12.439 --> 00:04:16.040
<v Speaker 4>Is to lever that thing going up higher. But I

61
00:04:16.079 --> 00:04:19.399
<v Speaker 4>think that our argument is not about what the market

62
00:04:19.439 --> 00:04:23.480
<v Speaker 4>will do or has done. It's in generating the cash flow.

63
00:04:23.480 --> 00:04:24.800
<v Speaker 4>A lot of investors need.

64
00:04:25.079 --> 00:04:26.519
<v Speaker 5>The SMP's yield.

65
00:04:26.319 --> 00:04:28.720
<v Speaker 4>Right now is the lowest it's ever been in history,

66
00:04:28.879 --> 00:04:33.439
<v Speaker 4>one percent, and yet with a multiple of twenty three

67
00:04:33.519 --> 00:04:37.120
<v Speaker 4>times price return has been pretty good. So my long

68
00:04:37.160 --> 00:04:40.079
<v Speaker 4>answer to your short question is that I think passive

69
00:04:40.120 --> 00:04:43.040
<v Speaker 4>can do very well for bull markets, but we do.

70
00:04:43.040 --> 00:04:44.959
<v Speaker 5>Not live in a bull market all the time.

71
00:04:45.439 --> 00:04:49.040
<v Speaker 4>And our twenty five years shows us beating the SMP

72
00:04:49.240 --> 00:04:52.120
<v Speaker 4>by four percent per year over that period, but we

73
00:04:52.199 --> 00:04:53.879
<v Speaker 4>got a pretty nice head start.

74
00:04:54.120 --> 00:04:54.439
<v Speaker 2>All right.

75
00:04:54.480 --> 00:04:57.879
<v Speaker 3>Well, I love divid investing too. I agree with that,

76
00:04:57.920 --> 00:05:02.040
<v Speaker 3>but Jen Lecamp, really if you go back one hundred years,

77
00:05:02.639 --> 00:05:05.399
<v Speaker 3>you look at the Jeremy Siegel argument. I've always been

78
00:05:06.240 --> 00:05:12.920
<v Speaker 3>a disciple of Jeremy Siegel. The stock market outperforms all

79
00:05:13.040 --> 00:05:18.040
<v Speaker 3>other asset classes. Okay, and he goes you can go

80
00:05:18.160 --> 00:05:21.439
<v Speaker 3>back two hundred years. Actually he's even done that work.

81
00:05:21.759 --> 00:05:25.839
<v Speaker 3>But it beats everything else, beats bonds, beats gold, I

82
00:05:25.879 --> 00:05:30.199
<v Speaker 3>don't know whatever else is out there, commodities too. So

83
00:05:30.800 --> 00:05:34.240
<v Speaker 3>if you just own the spiders, you're going to do

84
00:05:34.480 --> 00:05:37.079
<v Speaker 3>very well. I mean, David is right, you can, you know,

85
00:05:37.120 --> 00:05:43.240
<v Speaker 3>look at different time horizons, but you know, people want

86
00:05:43.279 --> 00:05:47.519
<v Speaker 3>to fifty. I always say, buy the index and hold

87
00:05:47.519 --> 00:05:51.360
<v Speaker 3>it for fifty years. Okay, long long, but that's the

88
00:05:51.399 --> 00:05:55.439
<v Speaker 3>horizon for individuals. And I think these numbers really show

89
00:05:56.079 --> 00:06:01.040
<v Speaker 3>the expenses of active management is very difficult, the tax

90
00:06:01.120 --> 00:06:05.600
<v Speaker 3>situation is very difficult. You're better off with the owning

91
00:06:05.639 --> 00:06:09.120
<v Speaker 3>this index. So how do you come out. I'm going

92
00:06:09.199 --> 00:06:13.160
<v Speaker 3>to guess you're an active manager, but I think the

93
00:06:13.240 --> 00:06:14.240
<v Speaker 3>numbers are against you.

94
00:06:15.439 --> 00:06:21.720
<v Speaker 6>Okay, this is an absolutely fantastic topic, and David, I'm

95
00:06:21.759 --> 00:06:24.920
<v Speaker 6>going to agree with both of you. For most people,

96
00:06:25.639 --> 00:06:29.199
<v Speaker 6>particularly if they're doing yourselfers, you're going to be better

97
00:06:29.279 --> 00:06:32.720
<v Speaker 6>off in an index and maybe adding a sub index

98
00:06:32.800 --> 00:06:36.279
<v Speaker 6>onto it, seventy five percent s and B twenty five

99
00:06:36.319 --> 00:06:42.480
<v Speaker 6>percent queues, something like that. But there's a recency bias

100
00:06:42.680 --> 00:06:47.319
<v Speaker 6>that always throws these numbers off. For instance, we had

101
00:06:48.360 --> 00:06:52.920
<v Speaker 6>almost complete correlation in the markets starting with the late

102
00:06:53.279 --> 00:06:55.600
<v Speaker 6>tail end of the green Span years and going all

103
00:06:55.639 --> 00:06:58.360
<v Speaker 6>the way through the Bernanki years, where it was really

104
00:06:58.439 --> 00:07:01.879
<v Speaker 6>just an asset allocation to sit FED was cutting rates.

105
00:07:02.160 --> 00:07:04.800
<v Speaker 6>People would put money in the market just by the

106
00:07:04.839 --> 00:07:08.240
<v Speaker 6>indicies and that absolutely made sense, and it almost wiped

107
00:07:08.279 --> 00:07:10.879
<v Speaker 6>out a whole industry. It almost wiped out the hedge

108
00:07:10.920 --> 00:07:14.959
<v Speaker 6>fund industry because those that were long and short that

109
00:07:15.000 --> 00:07:18.680
<v Speaker 6>were trying to provide differentiation that we're trying to say

110
00:07:18.720 --> 00:07:21.399
<v Speaker 6>this stock is better than that stock. They got killed

111
00:07:21.639 --> 00:07:24.959
<v Speaker 6>because it was really just about whether you're in stocks

112
00:07:25.079 --> 00:07:28.639
<v Speaker 6>or not. That started to change a couple of years

113
00:07:28.680 --> 00:07:33.680
<v Speaker 6>ago when the market started becoming less correlated and we

114
00:07:33.759 --> 00:07:38.360
<v Speaker 6>started to see real outperformance. And when I say recency bias,

115
00:07:39.000 --> 00:07:42.560
<v Speaker 6>last year, technology killed, It's slayed. In the last few years.

116
00:07:42.639 --> 00:07:46.959
<v Speaker 6>It has slayed the magnificent seven, et cetera. So differentiation

117
00:07:47.120 --> 00:07:51.480
<v Speaker 6>mattered again, and the one year numbers were so much

118
00:07:51.519 --> 00:07:55.240
<v Speaker 6>better than the index that it dragged up the three

119
00:07:55.360 --> 00:07:58.839
<v Speaker 6>year numbers, and it dragged up the five for year numbers.

120
00:08:00.000 --> 00:08:03.199
<v Speaker 6>And the active managers were pumping their tests and see

121
00:08:03.879 --> 00:08:07.519
<v Speaker 6>see the active management is better. And the reality is

122
00:08:07.600 --> 00:08:10.399
<v Speaker 6>David is right. The market goes in and out of

123
00:08:10.439 --> 00:08:16.040
<v Speaker 6>these styles, but generally, for the most part, people would

124
00:08:16.199 --> 00:08:19.759
<v Speaker 6>be most people would be better off in the indices

125
00:08:19.800 --> 00:08:24.560
<v Speaker 6>because most people cannot get past human emotions, and human

126
00:08:24.600 --> 00:08:30.160
<v Speaker 6>emotions will destroy returns. I will say this, though I've

127
00:08:30.160 --> 00:08:33.440
<v Speaker 6>been doing this for forty one years. I've been dealing

128
00:08:33.440 --> 00:08:36.720
<v Speaker 6>with clients for forty one years. The people that made

129
00:08:36.759 --> 00:08:40.320
<v Speaker 6>the most money in the stock market were concentrated in

130
00:08:40.360 --> 00:08:43.399
<v Speaker 6>a smaller amount of names, and they held onto their

131
00:08:43.440 --> 00:08:45.879
<v Speaker 6>winners and they got rid of their losers.

132
00:08:46.559 --> 00:08:53.320
<v Speaker 3>And interesting, David, your dividend play, though, how active are you?

133
00:08:56.399 --> 00:08:58.519
<v Speaker 4>Well, when we see a name that we think has

134
00:08:58.559 --> 00:09:01.799
<v Speaker 4>an opportunity cost to keep polding because the stock has

135
00:09:01.799 --> 00:09:04.480
<v Speaker 4>gone up so much and the yield has dropped, and

136
00:09:04.519 --> 00:09:05.919
<v Speaker 4>we think there's a better thing to.

137
00:09:05.879 --> 00:09:07.840
<v Speaker 5>Buy, then we'll sell a name.

138
00:09:07.919 --> 00:09:10.120
<v Speaker 4>But Larry, you're talking about out of a thirty five

139
00:09:10.240 --> 00:09:13.919
<v Speaker 4>stock portfolio, which is high conviction. It's exactly what Jim

140
00:09:13.960 --> 00:09:21.240
<v Speaker 4>just said about high concentration. To me, the activity comes

141
00:09:21.240 --> 00:09:24.279
<v Speaker 4>when you make the decision that you can do better

142
00:09:24.320 --> 00:09:26.960
<v Speaker 4>in something else, and it's one to two names a year.

143
00:09:27.399 --> 00:09:31.960
<v Speaker 4>But I've devoted this effort to never having a diviting cut.

144
00:09:32.440 --> 00:09:34.600
<v Speaker 4>And we went through financial crisis, who went through nine

145
00:09:34.600 --> 00:09:37.080
<v Speaker 4>to eleven, went through COVID, We've gone through a lot

146
00:09:37.080 --> 00:09:39.840
<v Speaker 4>of periods and never had a dibting cut. That can't

147
00:09:39.879 --> 00:09:45.120
<v Speaker 4>be done passively. Every passive index has to deal with

148
00:09:45.200 --> 00:09:47.720
<v Speaker 4>the general electrics and the at and ts and the

149
00:09:47.720 --> 00:09:50.519
<v Speaker 4>intels and the three m's that shock you by cutting

150
00:09:50.559 --> 00:09:54.559
<v Speaker 4>the dividend. Where I think active management can help avoid that,

151
00:09:55.240 --> 00:09:57.000
<v Speaker 4>but I agree with you that it needs to be

152
00:09:57.080 --> 00:09:59.279
<v Speaker 4>tax efficient. And I just want to point out how

153
00:09:59.320 --> 00:10:02.399
<v Speaker 4>can somebody, it's great Larry to buy the SMP for

154
00:10:02.399 --> 00:10:06.840
<v Speaker 4>fifty years and accumulate a massive compounded return. But most

155
00:10:06.960 --> 00:10:11.279
<v Speaker 4>people are saving and investing for some objective. They need cash,

156
00:10:11.679 --> 00:10:14.840
<v Speaker 4>a periodic stream of cash flow into something.

157
00:10:14.559 --> 00:10:17.159
<v Speaker 5>Like a retirement, and so then they.

158
00:10:16.960 --> 00:10:18.919
<v Speaker 4>Have to sell off some of the S and P

159
00:10:19.080 --> 00:10:21.440
<v Speaker 4>and they're going to be paying the same taxes anyways.

160
00:10:21.480 --> 00:10:24.279
<v Speaker 4>In terms of long term capital gains, the thanks to

161
00:10:24.360 --> 00:10:27.879
<v Speaker 4>the wonderful supply side tax cut of bush W two

162
00:10:27.960 --> 00:10:30.440
<v Speaker 4>thousand and three, gave us the same rate on dividends

163
00:10:30.480 --> 00:10:32.600
<v Speaker 4>as it does capital gains, and you and I believe

164
00:10:33.039 --> 00:10:35.960
<v Speaker 4>both of those rates should be lower, not higher. They're

165
00:10:36.000 --> 00:10:40.000
<v Speaker 4>double taxes. They're taxing capital that's already been tax But

166
00:10:40.279 --> 00:10:42.960
<v Speaker 4>I think that what given and growth does is take

167
00:10:43.000 --> 00:10:46.440
<v Speaker 4>the focus off of what other people are doing and

168
00:10:46.559 --> 00:10:50.159
<v Speaker 4>onto what the company is doing, which is generate profits,

169
00:10:50.240 --> 00:10:51.639
<v Speaker 4>profits of the mother's milk.

170
00:10:52.639 --> 00:10:56.360
<v Speaker 3>Yes they are. Okay, let's take a break. We're going

171
00:10:56.399 --> 00:10:59.000
<v Speaker 3>to come back on and talk about bonds and interest

172
00:10:59.080 --> 00:11:03.240
<v Speaker 3>rates as well as David Bonson Jim mcamp Cudlow will

173
00:11:03.279 --> 00:11:04.440
<v Speaker 3>be right back, folks.

174
00:11:05.559 --> 00:11:20.320
<v Speaker 2>This is the Larry Cudlow Show. Now back to the

175
00:11:20.440 --> 00:11:22.559
<v Speaker 2>Larry Cudlow Show, and.

176
00:11:22.600 --> 00:11:25.679
<v Speaker 3>We're talking stocks. David Bonson and the Boston Group his

177
00:11:25.840 --> 00:11:28.840
<v Speaker 3>book new book, Profit from the Prophet, The Past Present

178
00:11:28.960 --> 00:11:32.799
<v Speaker 3>Future of Dividend Growth Investing, and Jim mccamp Morgan Stanley

179
00:11:32.840 --> 00:11:37.039
<v Speaker 3>Executive Director and Senior Portfolio Managing Director. Jim mcamp My

180
00:11:37.120 --> 00:11:41.279
<v Speaker 3>love forty one years. I love that. So during the

181
00:11:41.320 --> 00:11:44.720
<v Speaker 3>break I did some arithmetic. I went from the New

182
00:11:44.799 --> 00:11:49.480
<v Speaker 3>York Fed to Payne Weffer, Jackson and Curtis, which doesn't

183
00:11:49.519 --> 00:11:54.679
<v Speaker 3>exist anymore. That was in nineteen seventy six. Nineteen seventy six.

184
00:11:56.039 --> 00:11:58.440
<v Speaker 3>Now you could say I've been out of the market

185
00:11:58.480 --> 00:12:00.200
<v Speaker 3>for I've been out of Wall Street for a long time.

186
00:12:00.200 --> 00:12:03.399
<v Speaker 3>But that's fifty that's fifty years. And you were on

187
00:12:03.440 --> 00:12:07.000
<v Speaker 3>the CNBC show many times, weren't you with you?

188
00:12:07.799 --> 00:12:12.960
<v Speaker 6>Yes, many times? Still. I was just on Friday as well.

189
00:12:12.960 --> 00:12:15.440
<v Speaker 6>I was on yesterday, David Bunson.

190
00:12:15.799 --> 00:12:20.240
<v Speaker 3>You weren't on my CNBC show, were you?

191
00:12:20.240 --> 00:12:20.480
<v Speaker 5>No?

192
00:12:20.639 --> 00:12:22.879
<v Speaker 4>I was on it a couple a couple of times

193
00:12:22.879 --> 00:12:26.600
<v Speaker 4>at the very end, but you know the timing you,

194
00:12:26.679 --> 00:12:28.519
<v Speaker 4>of course got the return to the White House, so.

195
00:12:30.559 --> 00:12:33.840
<v Speaker 3>I know I have to take that out anyway, profits

196
00:12:33.840 --> 00:12:37.720
<v Speaker 3>of the mother's milk of stocks, David, this is a

197
00:12:37.840 --> 00:12:40.200
<v Speaker 3>very high profit environment, is it not.

198
00:12:42.159 --> 00:12:44.600
<v Speaker 4>Well, it is so of course we also look at

199
00:12:44.639 --> 00:12:47.120
<v Speaker 4>free cash flow and what's interesting is it's a high

200
00:12:47.159 --> 00:12:51.200
<v Speaker 4>profit environment, and yet it is becoming a declining free

201
00:12:51.200 --> 00:12:54.399
<v Speaker 4>cash flow environment because a lot of the profits are

202
00:12:54.440 --> 00:12:57.919
<v Speaker 4>coming with a lot of cap X and that gets

203
00:12:57.960 --> 00:13:02.519
<v Speaker 4>capitalized over time. Are simple in that censilary They're like

204
00:13:02.559 --> 00:13:05.919
<v Speaker 4>a lemonade stand investment. You cash in, cash out. What's

205
00:13:05.960 --> 00:13:09.200
<v Speaker 4>available to give to investors, what isn't. When you start

206
00:13:09.200 --> 00:13:13.919
<v Speaker 4>talking about the complexity of amortization and capital expenditures, it

207
00:13:13.919 --> 00:13:17.600
<v Speaker 4>gets more complicated. Now, look, these NVIDIAs and Google's are

208
00:13:17.639 --> 00:13:20.759
<v Speaker 4>some of the most profitable companies in human history. But

209
00:13:21.080 --> 00:13:23.919
<v Speaker 4>they even when they had huge cash flow, they weren't

210
00:13:23.960 --> 00:13:26.919
<v Speaker 4>returning into shareholders much. They were reinvesting in the company.

211
00:13:26.960 --> 00:13:29.799
<v Speaker 4>That worked out real well for them. But now the

212
00:13:29.840 --> 00:13:34.000
<v Speaker 4>Googles and Metas and Amazons and even Microsoft's these don't

213
00:13:34.000 --> 00:13:36.320
<v Speaker 4>have the cash flow they had. And that's where a

214
00:13:36.360 --> 00:13:38.879
<v Speaker 4>lot of this AI stuff is becoming a very interesting

215
00:13:39.000 --> 00:13:41.039
<v Speaker 4>story from a risk reward standpoint.

216
00:13:42.080 --> 00:13:45.320
<v Speaker 3>Jim mcamp we were talking about the Magnificent seven and

217
00:13:45.399 --> 00:13:50.639
<v Speaker 3>their performance. Edy Ardenni calls it the impressive what was it,

218
00:13:50.720 --> 00:13:55.039
<v Speaker 3>the impressive four hundred and ninety three? So is there

219
00:13:55.120 --> 00:14:00.879
<v Speaker 3>anything out there that really looks bad for stocks? Performance

220
00:14:00.919 --> 00:14:03.440
<v Speaker 3>has been awfully good. Is there anything out there that

221
00:14:03.639 --> 00:14:05.600
<v Speaker 3>threatens this bull market?

222
00:14:06.080 --> 00:14:09.720
<v Speaker 6>Two things. First of all, I think the market has

223
00:14:09.799 --> 00:14:14.200
<v Speaker 6>completely underestimated what's going on in the energy markets. The

224
00:14:14.600 --> 00:14:18.360
<v Speaker 6>energy stocks are doing well, by the way, but they're

225
00:14:18.399 --> 00:14:21.960
<v Speaker 6>counting on the US to be the marginal producer and

226
00:14:22.440 --> 00:14:24.960
<v Speaker 6>the low hanging fruit has really been picked. If you

227
00:14:24.960 --> 00:14:28.559
<v Speaker 6>look at where they're drilling right now, it's not as

228
00:14:28.720 --> 00:14:31.799
<v Speaker 6>robust in terms of what they're getting. The recounts up,

229
00:14:32.200 --> 00:14:35.279
<v Speaker 6>but the barrel count is not. And it's going to

230
00:14:35.360 --> 00:14:38.519
<v Speaker 6>take two years in the Middle East to whenever they

231
00:14:38.559 --> 00:14:42.879
<v Speaker 6>stop whenever that is, to rebuild and get production flowing

232
00:14:42.919 --> 00:14:45.519
<v Speaker 6>the way it was. And there's a lot of militias

233
00:14:45.600 --> 00:14:50.159
<v Speaker 6>still controlling areas in Venezuela, so that's something to watch.

234
00:14:50.240 --> 00:14:52.000
<v Speaker 6>I think the market still looks fine, by the way,

235
00:14:52.320 --> 00:14:55.000
<v Speaker 6>that's something to watch. But the other thing is interest rates.

236
00:14:55.279 --> 00:14:59.200
<v Speaker 6>I mean, we've got this new operation Chubby Checker. Twist,

237
00:14:59.440 --> 00:15:03.799
<v Speaker 6>Let's twist again, going But the reality is if we

238
00:15:03.799 --> 00:15:06.320
<v Speaker 6>didn't have forty one trillion dollars of debt, then that

239
00:15:06.360 --> 00:15:09.240
<v Speaker 6>wouldn't be as big of an issue. And it's not

240
00:15:09.279 --> 00:15:13.360
<v Speaker 6>just the government that has debt. Now. All these AI

241
00:15:14.440 --> 00:15:19.200
<v Speaker 6>CAPEX bonds that are being issued are coming at really widespreads,

242
00:15:19.639 --> 00:15:22.639
<v Speaker 6>so that that could change that narrative as well. And

243
00:15:22.919 --> 00:15:26.200
<v Speaker 6>if the spread stay high, that could affect everything from

244
00:15:26.240 --> 00:15:29.840
<v Speaker 6>the housing market to private equity funding to commercial real estate.

245
00:15:30.039 --> 00:15:32.639
<v Speaker 6>I'm still bullish, but these are the things that These

246
00:15:32.639 --> 00:15:36.039
<v Speaker 6>are the dark clouds that may or may not metastasize

247
00:15:36.080 --> 00:15:37.679
<v Speaker 6>into a storm, but they're out there.

248
00:15:38.360 --> 00:15:41.200
<v Speaker 3>David Benson, our interest rates going up or down.

249
00:15:43.120 --> 00:15:45.720
<v Speaker 4>Well, the main thing is that they've been that the

250
00:15:45.840 --> 00:15:49.080
<v Speaker 4>yield curve itself has steepened, and so you saw the

251
00:15:49.159 --> 00:15:52.720
<v Speaker 4>longer end go up more than the shorter end. I

252
00:15:52.759 --> 00:15:54.519
<v Speaker 4>don't know what the Fed is going to do on

253
00:15:54.559 --> 00:15:56.679
<v Speaker 4>the short end, and I have a lot of thoughts

254
00:15:56.720 --> 00:15:59.000
<v Speaker 4>on the pros and cons the different things they could do,

255
00:15:59.080 --> 00:16:03.200
<v Speaker 4>should do do. I'm a huge Kevin Warsh fan and supporter,

256
00:16:03.360 --> 00:16:05.000
<v Speaker 4>but they have a tough job, Larry.

257
00:16:05.360 --> 00:16:06.320
<v Speaker 6>But the long end.

258
00:16:06.440 --> 00:16:09.159
<v Speaker 4>I think markets have to control. I don't think two

259
00:16:09.240 --> 00:16:12.519
<v Speaker 4>billion or four billion of a twist here and a

260
00:16:12.600 --> 00:16:14.240
<v Speaker 4>chubby chetter there. I don't think.

261
00:16:15.039 --> 00:16:16.799
<v Speaker 5>I think that when we were talking about thirty two

262
00:16:16.840 --> 00:16:17.519
<v Speaker 5>and a half.

263
00:16:17.320 --> 00:16:21.440
<v Speaker 4>Trillion dollars of treasury debt, I'm not sure that that

264
00:16:21.519 --> 00:16:24.000
<v Speaker 4>intervention is really all that great of an idea. But

265
00:16:24.200 --> 00:16:27.039
<v Speaker 4>but well, you know, they're trying to get mortgage rates lower.

266
00:16:27.240 --> 00:16:29.600
<v Speaker 4>I understand, but you know, I'm a market skuy I'd

267
00:16:29.679 --> 00:16:31.200
<v Speaker 4>rather not market sort this stuff out.

268
00:16:31.639 --> 00:16:35.480
<v Speaker 3>Well, you can that the President is on the horn

269
00:16:36.159 --> 00:16:41.039
<v Speaker 3>to Scott Pssant constantly, get race down, get raced down.

270
00:16:41.559 --> 00:16:46.399
<v Speaker 3>I don't know that Besson loves this operation twist repurchasing.

271
00:16:47.759 --> 00:16:50.080
<v Speaker 3>It's kind of like off the run, on the run.

272
00:16:50.159 --> 00:16:52.440
<v Speaker 3>I was talking to John Carney about that. So they're

273
00:16:52.759 --> 00:16:56.679
<v Speaker 3>trying to retire the off the run stuff so they

274
00:16:56.679 --> 00:16:58.639
<v Speaker 3>can get back to the on the run stuff. There's

275
00:16:58.679 --> 00:17:01.200
<v Speaker 3>not gonna be any interest rate impact of that, I

276
00:17:01.240 --> 00:17:04.079
<v Speaker 3>don't think anyway, Jim mccamp, it's not going to affect

277
00:17:04.160 --> 00:17:04.839
<v Speaker 3>rates anyway.

278
00:17:05.680 --> 00:17:08.440
<v Speaker 6>Well, at the end of the day, the US rates

279
00:17:08.480 --> 00:17:12.480
<v Speaker 6>are still going to be mostly impacted by what's going

280
00:17:12.519 --> 00:17:14.680
<v Speaker 6>on in the economy. And there can be a growth,

281
00:17:15.480 --> 00:17:18.960
<v Speaker 6>a story out there to be made that part of

282
00:17:18.759 --> 00:17:22.640
<v Speaker 6>the fact that the economy is still growing and doing

283
00:17:22.680 --> 00:17:26.920
<v Speaker 6>well has an impact on interest rates. But I got

284
00:17:26.960 --> 00:17:30.759
<v Speaker 6>to tell you, with the central banks, you're looking at gold,

285
00:17:30.880 --> 00:17:33.680
<v Speaker 6>you're looking at bitcoin, you're looking at commodities. All of

286
00:17:33.680 --> 00:17:36.720
<v Speaker 6>them are doing well because there are concerns about the

287
00:17:36.759 --> 00:17:38.720
<v Speaker 6>dollar and what the FED is doing there.

288
00:17:39.279 --> 00:17:42.440
<v Speaker 3>All right, gentlemen, we'll close it down. David Bunsen, thank you.

289
00:17:42.599 --> 00:17:45.920
<v Speaker 3>Jim Mcamp, thank you very much. Folks, We'll take a

290
00:17:46.000 --> 00:17:49.160
<v Speaker 3>quick break and do some money and politics with Steve

291
00:17:49.240 --> 00:17:51.960
<v Speaker 3>Moore and Liz Peak. I'm cudlo. Please stick around.