UBS Earnings, Boeing Latest, Trump Denied Immunity

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There's some things that are happening.

A UBS, for example, is down almost five percent. So we want to get you some analysis here with Alison Williams, Boomberg Intelligence, Senior Analyst, Global Banks and Asset Managers. So basically, the there was a fourth quarter earnings miss. It did announce a buy back of up to one billion dollars and shares this year, So you can make an argument, Allison, there's something for the bulls or something for the bears.

What was there for you?

So I think you know, investor has got as much as they could today. You know, the issue is this is a long It's going to be a long time frame for this deal to execute, which I think investors should have been prepared for.

They may have wanted a bit more.

The one negative thing for the outlook is that twenty twenty four estimates are likely going to come down a little bit because you know the returns are going to be lower. But that's because I think UBS is trying to be aggressive in you.

Know, pulling forward those costs.

So they did upsize the costs on a growth basis, but they're going to invest those so not falling to the bottom line, so perhaps some disappointment there. They did reiterate their sort of three year target. They gave a longer term target that was in line with the high end before Credit sweet so I think those were all positive.

Allison, what is the new UBS here post Credit Swiss and full disclosure, I'm a client of UBS used to work at Credit Swiss, so I'm all over the Swiss stuff here. But what's where does UBS want to be now that they've acquired Credits Swiss? What are their ambitions VISAVI a global financial institution?

So I don't think that the big picture strategy has changed much for them, right, So they their focuses on wealth.

You know, they're the premier global wealth manager.

They added some assets, they added some relationships with Credit Suite in the investment bank.

Again, they're still focused on equities.

So even though profit disappointed, revenue came in about in line. So that's that's a positive thing. On the equities trading side of things. They did add you know, some incremental ads. There were some numbers around the traders. The Bloomberg News reported. We obviously look at the top line revenue, you know, there they kept the M and A and the research areas were the areas that they added to and those areas did pretty well.

On the quarter.

So what else do you need to hear to get more confidence in all of this. Wean just like a kind of hold and wait for two more years.

Basically, I think it is like a show me right, So I think it's going to be a step by step So Armandi, as you know, said this morning that you know, they might sacrifice a little bit of revenue because they are focused on profitability.

They're focused on doing things right.

So again, like those are the types of things that you have to have confidence.

He has done a big turnaround at the UBS before.

But I think that it is the kind of thing where it's like quartered by quarter, investors have to start to see, you know, some of the.

You know, some support for these estimates.

Another target they put out there this morning was one hundred billion per year for the next two years a net new wealth asset. So I think that's a pretty good target. But again we saw some slowing in the fourth quarter. Some of that was mandates leaving with credit sue relationship managers still pretty stable, but I think investors will want to see, you know more so you know, over the next few quarters, UBS delivering on its plans.

So Elison, just, I mean you cover everything all the global big investment banks, commercial banks. Here is the global bank is that just left to the Morgan, Stanley's, the Goldman, sachs Is or whatever. It doesn't seem like anybody in Asia, anybody in Europe can compete against the JP Morgans of the world.

So Paul, it's I mean, it's really been over the last decade, you know, ever since you left the business, but it was it was.

Last decade, you know.

The US Bank just fought, you know, really making those market share games. You know, Credit Suite was is sort of the latest to who you know, provide some provide some gains to those US players if you will keep in mind that, uh you know, that sale from UBS follows them exiting prime brokerage. Before Current Suite, we had Deutsche Bank who also exited Prime berg Bridge.

You know, they shed parts of their fixed income business.

If we went back to several years prior, there was a lot of the European players getting out of fix and you know, keep in mind, it.

Is a scale business.

And I think where banks like JP Morgan have been winning and in fact Goldman Sachs has gained the most market share over the last several years, or that they are investing in technology that helps them get better revenue, that helps them have more money to invest. And so it's really that virtuous cycle that some of those big US banks have been enjoying.

And before we let you go, let's talk about you cover everything. A KKR doing particularly well. Also, what's driving some of these private equity guys to outperform at this point?

I think, you know, if you look at the asset management industry, right like the two areas of growth are private markets and passive.

The big difference is that private markets has very significant fees, and since you've seen these big companies go public, I mean, the fundraising is just impressive.

Great stuff. Alison is the best.

She is absolutely wonder who hired her, Alison Williams.

To do it yourself.

Exactly, patting myself on the back there, No, but she's the best. Allison Williams, Senior Analyst, Global Banks, Bloomberg Intelligence. Before she came to Bloomberg Intelligence to cover bank she was at Morgan Stanley Investment Management on the buy side as a senior analyst covering banks there for all their big funds.

I just don't like all these banks have different business models, and I do not understand you keep them all straight, like at least oil companies, like they dig for stuff and they get it out of the ground, Like they may dig in different places, but it's it's pretty straightforward.

I mean, you know, back in college, I wrote a paper on who are the five biggest investment banks in twenty five years?

Who they're going to be?

One of them was Deutsche Bank, And for a while I was looking really good there until not so.

Much although I mean, we thought they weren't going to survive twenty sixteen. So we thought we were all like beating the drum to total bankruptcy or someone buying it.

Like you know, UBS or UniCredit, and that shouldn't happen.

So and you just look at the European banks and they just haven't evolved with the times. The governments haven't allowed cross border consolidation, and so the net result is in this global world they're nowhere, I mean nowhere, Deutsche Bank, you BS, they're regional banks now. And it's a shame because you know, there was a time when you really

So good stuff.

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The FAA Administrator Mike Whittaker is on Capitol Hill today and he'll be talking about the latest Boeing news and how the FA is going to have a little bit more oversight. And just to add some color to this spirit, Aerospace is on their earnings call right now. They weren't able to give guidance because of what's going on with Boeing, and they say that their goal, yay, is to have zero production deficits. That's good goal, thank you. They say

So what does this all mean, Like, do we want.

FAA regulators like getting involved more more boring planes?

That is it better? Is it worse? They were already involved. It's confusing.

I don't know. I don't know. But George Ferguson he knows, he might know.

He covers all this aerospace and airline stuff for Bloomberg Intelligence.

George, what's the latest here?

What changes do you think may come to the FAA, may come to Boeing?

So you know, what we heard from Whitaker in some of his initial comments was that rather than auditing Boeing safety, they're going to have a you know, physical presence on the line, and that they would push some of that presence down into Spirit Aero systems. I suppose that means they'd push it also into other suppliers. I mean, I frankly think it's a good thing, right I think that clearly right now, the way the system is is set up, it's not working well. You know, we've talked about it.

I think it's you.

Know, largely due to turnover, you know, as we went through the pandemic. I think we've lost a lot of talent at these companies. But so clearly we're having a breakdown in the manufacturing process. And I think, you know, the FAA is here to regulate, and you know, I think this something that puts the long term health of the US aerospace business at risk, and they're here to help protect that right and so putting them down on

Why weren't FAA regulars already there and have a physical presence.

Well, so, I mean, I think they were largely handling things from an audit standpoint, right, reviewing processes and certification. I think that they're you know, they've been stressed thin through the pandemic as well. They haven't had enough you know, workers as well a lot of turnover.

And I think also, I.

Think this business was a simpler business if you go back twenty or thirty years ago. I know that's a long way to go, especially I'm talking to people off it's financial markets.

Yeah, but if you go back.

Twenty thirty years ago, this just this apply chains didn't stretch as far. They were a lot more domestically focused, a lot more vertically integrated. And that's been changed dramatically

So I think the world's a little bit different and.

That's one of the reasons why it's changing.

What's that mean for, you know, the economics of Boeing.

I mean there's a school thought out there that you know, maybe ten twenty years ago they kind of maybe made the choice to focus a little bit more on shareholders than maybe on the engineering of the company engineering pedigree, and that's arguably worked out well for shareholders. Is there a sense that they maybe went too far and might have to kind of retrench a little bit.

I think there is a sense that they went too far, right, if you know, member going to meetings with the old CEO McNerney and even Muhlenberg, a couple of CEOs ago, and you know, they've get into the you know, the meeting with the analysts and talk about how they had a cash generating machine, and I think that's really great, you know, but at the end of the day, these are engineering businesses and manufacturing businesses, and I think they've got to, you know, look again at investing in the

And in that process, I have a really dumb question, So excuse the dumb question.

Why is it so hard?

Like I understand that building big things that carry people is difficult, but doing it well shouldn't be hard.

For a Boeing and an Airbus the only.

Two guys who do it, so like, where have they gone so wrong? They have to sort of drill down this much?

Well, I guess I would say it's so hard because the tolerances are so tight, right, meaning you can't make a mistake in this business. Right you and I go to work, I can make a problem in a spreadsheet, it's okay, I'll probably figure it out in a couple hours or something like that. You can make a bad car and when it breaks down, you pull to the side of the road and you get the tow truck. It's not the end of the day. This is a zero tolerance for defects business, and that means every little

Fair Enough, is Boeing taking new orders?

Now?

How was it day to day for them? Are they still their backlogs still here?

So stuff?

Yeah, I mean they're absolutely open for business taking orders. I haven't seen many orders flow through lately. I have heard some customers like Ryanair that are always looking for a good deal say that if anybody doesn't want their airplanes, they're willing to take them. But I mean on the sales side, absolutely, I think they're open for business. And on the manufacturing side, that's the challenge here too, is they're not going to shut it down. They're building at

Because I mean for an airliner, for example, like you put in orders and it's like years in advance, right, so like they kind of have to stay in the queue. But if the deliveries are pushed out, what airlines have enough of like old play that they.

Can still do the stuff?

You know, So the global airflying fleet, like I could take the next couple hours to talk you through it, but you got like ninety Yeah, I mean there's a there's a lot of them that have older fleet that can that can rely on it. Right now, there's been no change to Boeing's build strategy. They're building it the thirty eight that they broke to at the end of last year.

And if this FAA you know.

Analysis takes longer than six months, maybe we get into a situation where Boeing can't go to the next build rate that they had they had projected as they you know, told customers they could have airplanes. I could tell you that there's a lot of folks, a lot of airlines in the world that expected airplanes, even from air Bus at certain dates that are having to push some of those out and and make, you know, make provisions with either less sores or using older fleet so that they

All right, George, thanks so much for joining us again.

George Ferguson, Senior Aerospace, Defense and Airlines Annols Bloomberg Intelligence on the Zoom Camp from a Bloomberg's headquarters down to Princeton, New Jersey.

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A bad day for President Trump and his legal team. Can you put this in context for us?

Sure? Yes, it's a speed bump in his legal journey. I guess you could call it.

He the a three judge panel of the d C Circuit Court of Appeals, which is actually the US Circuit Court of Appeals based in DC, has ruled the Trump's argument that he is immune from criminal prosecution because he was president when he was allegedly committing these crimes related to the insurrection at the Capitol on January six, that his argument is wrong, that he has no immunity and

Wendy, do you think that it will get to the Supreme Court? We were debating whether or not they would take it.

Up if it got there. It's always hard to tell what the Supreme Court will do. I have no doubt that.

If the nine judge panel agrees with the three judge panel, that Trump will appeal it all the way to the Supreme Court. And it's one of those basic fundamental constitutional questions that frankly, the Supreme Court would probably be interested in taking up because it will determine once and for all whether a president has immunity now a president, we've never faced this before, first of all, but also Trump is arguing based on a nineteen eighty two Supreme Court

So lots of questions here. One of them is just timing, Wendy.

Do we have any framework for how the one, possibly two appeals would take.

We don't. He has a former president.

Trump has until Monday to file an appeal, or to say he's going to appeal.

I think so he has till Monday to do that.

Then we don't know how long it would take the full court to decide, and then the Supreme Court may or may not take its time, depending on how complicated the issue is. I like to think that these courts would not act based on politics, and there's no reason to think they would. So they may just see the case as easy and decide quickly, or they may decide to take more time. But either way, the clock is ticking toward the November election.

Wendy. Let's just play it out for a second.

So let's just say that this sticks in whatever way and he's not granted criminal immunity.

With them, what like, does what does that do to the November election?

Well, what it does do is allow Jack Smith, the Justice Department Special prosecutor, to move forward with his case charging Trump with responsibility for the January sixth attack on the US Capitol in twenty twenty one. And Jack Smith says he's ready to go and would like to do this case quickly. So presumably if the courts act in time and the question of immunity is settled so that a trial can go forward, then we could be looking at a trial on that case before the election.

So is there any consensus in Washington about how this will play out here because it doesn't seem very good for the former president just from my read, which is totally uninformed.

Well, it's not. It doesn't look like it's going to be good for the president.

The laws are pretty clear, and the argument that Trump is basing his appeal on that he's immune from civil lawsuits has no application to the criminal statutes. So, you know, it doesn't look like it's going to get any better the higher up he goes in the judicial system.

But we never knows. Different judges see different things.

Wendy, how does this playin with voters? Because clearly his base is going to assume that he's being unfairly prosecuted anyway, So that in some ways helps the base. We see every time there's a new indictment, he gets a load of fundraising money.

So who does this actually sway in terms of voters?

This doesn't sway well, it doesn't sway voters either way. People who don't like Donald Trump think he should be prosecuted, people who who a lot of Trump's supporters do believe that this is politically motivated. They buy his line and campaign rallies that this is a quote unquote witch hunt, and so this is just another step in that road

All right, Wendy, thanks so much. We really appreciate it. Thank you for jumping on with us, Wendy. Benjamison, a Bloomberg Washington senior editor, on that story, I don't know, I think anything's going to get so political. It's going to be so hard to see the forest in the trees.

Yeah, I just don't know how the timing's going to work, and just a lot of hurdles there. But moving forward, I guess is kind of the story.

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David Bonson joined a series the Chief Investment Option for the Bonson Group. David again, John Tucker was looking for some theme to talk about here in this market.

I don't see a lot here.

We got a ton of earnings going on out there, but it seems to be everybody's kind of waiting on the fed. You know, I don't know what do you guys, What are you guys looking for in terms of direction in this marketplace?

I always am looking for company earnings and actual activities from the businesses we invest in. In other words, a day today is the way it's supposed to be. You know, the market's trading around the size of the briefcase. J Powell carries to a press conference. It strikes me as very unhealthy markets trading around sign and property having a blockbuster earnings result last night. Now that makes a lot of sense. So you see the largest mall operator in

Okay, So then what do you like, like what's working bottom up?

I think bottom up you have to look at the spaces that are not overvalued. Even though some of those overvalued names have done well, it's not been the quarter everyone seems to think it has for mag seven, but Tesla's gotten crushed, and Microsoft had, you know, good results, but not a great stock result. Facebook had a huge up swing on a dividen announcement.

It's been very mixed.

We're looking at things like consumer staples that we think are showing their pricing power, growing dividends, and if it is going to be a boring year, that will be a good thing for such.

Does that mean that you sell tech or you did don't want to buy them here, Well.

For us, we don't have to worry about selling it because we didn't buy it to begin with.

And so so you don't own any of the big mag seven or six, not a single one.

And so that's why are evaluation called.

It's totally evaluation called.

These are seven of the best run companies in history that have done extremely well, and they have a blended negative return over the last two years. And I don't think people realize that because twenty twenty three was so good, but it was mostly just offsetting what was so bad in twenty two, and we think that's what it's going to do.

That's what companies that trade at thirty thirty five, forty times.

You know, Facebook right now.

Has a higher forward multiple than it does backward after last week.

That's just crazy.

So what do you how do you screen for stocks? What's important to you, guys at the Bondson dividend growth. So it starts with companies that have a dividend higher than the SMP. Generally we want one hundred basis points or so higher in the SMP, but then a track record of growing the dividend from there.

That's the screen, as you asked. Then we start doing our work. Then we have to research. We want management that's committed to the dividend, committed.

To growing it year over year.

They can only do so if they have a company that has recurring free cash flow. So if the free cash flow or the business model itself lends itself to lumpy earnings, it may not be a good diviting payer has to have a strong balance sheet. It's a little bit more boring. You get a lot in healthcare. You know why we did so well last year.

Was financials asset managers.

Blackstone was up over eighty percent, Apollo and blew out what up fifty percent. Even though consumer staples and healthcare were laggards last year, but again on a two year basis, they're beating everything else because twenty twenty two mattered. So that's our approach, and we don't try to time in and out of it. I don't know if Nvideo's going up another fifty percent or not. I do know if it does, it's multiple expansion, and we do not invest on multiple expansion.

We invest on free cash flow growth.

Do you like big oil?

Well, I love oil, small, little, medium, and big, but all.

You kind of front here.

Yeah, I think that.

I think that that's where you get the great dividend growths.

I was asking, and I think that the.

Biden administry policies are very favorable to big oil and very unfavorable to small oil. They're not allowing a lot of new projects, which makes the projects that Exon and Chevron already have in the ground much more valuable. Make enables them to go buy Hess and Pioneer respectively, and their permium market share is just exploding. So both Chevron and Exon we think are great plays, but they're not our biggest energy exposure. It's midstream. So we on ETF.

Last year, energy was.

Down a couple percent, Exon was down a little, Chevron was down nine midstream was up sixteen percent. The MLPs were up twenty five percent for the third year in a row. So we do like the midstream energy story.

What gets you to sell a name is it they cut the dividend or they just say they start doing stuff that might put the dividend cash flowers.

Yeah, those are all good answers. It could be opportunity costs. There was a company, Cardinal Health, we bought for about fifty bucks. It's in a fantastic dividend grower. It got to one hundred and ten. They continued going the divd then they're executing, but at that point we got five years of return in one year, and we just exited simply to be able to pursue better opportunities. We're selling MetLife today as a matter of fact, and that's the

Back so much stock.

When they're buying back three times as much stock as they are paying dividend, we don't like that. But your question about if they cut the dividend, do we sell it. It's our job to not let that happen. We need to be in front of companies that will cut the dividend, and some of the sort of career making moments for me, were deciding against the grain to sell companies we believed were at risk of cutting the dividend ended up being right.

How do you identify those companies? You just see their free cash flows?

Maybe or yeah, my favorite story while time is two thousand and seven City Group. When they continue to pay the dividend and then we're borrowing twelve billion dollars from Saudi Arabia. This doesn't look right to me, and I think, yeah, when free cash flow goes negative and the dividend keeps going, then they're basically taking advance on the credit card to pay the dividend.

So do you get heat from investors though, in terms of not buying, not being in big tech, and being in big oil, because that's like the reverse of what the cool trendy thing ESG thing is.

That's a really good question, but we actually don't take heat for it. But a lot of that has to do with self selection of the client base. The types of people that like working with us might be more predisposed to that.

But also we're.

Incredibly communicative, we explain why isn't there's a certain ideological bend in this.

Obviously there is in the ESG side for us.

We really believe we have a fiduciary duty to find the right investment opportunities for clients. I'm out against big tech ideologically. I'm against big tech not returning cash to shareholders. I think that it is absolutely inexcusable that Apple is paying tip money out to investors when when they're making more cash in a year than most of the S and P makes in a lifetime. It's just to me, it's an unfair treatment of shareholders. But I understand the argument.

I saw what happened with.

Cisco today is sitting on fifty dollars.

It was eighty dollars in nineteen ninety nine and it's one and it's grown earnings and profits and revenues every year.

It's executed perfectly.

It was just plain overpriced, and when you buy something that overpriced, you risk decades of lost return.

We're just unwilling to take it that risk.

So what's what do you think is a what's a dividend yield that screens well for you? Do you is it by industry, by company or do you say I need at least a two and adre percent yield or something like that.

Yeah, I mean universally we tend to want about two and a half just to start, but there's some sectors with that wouldn't be nearly enough.

The portfolio blends.

To about a four handle yield, and that's more than double the S and P. And so you're going to end up with some higher yielding names. Simon Property, Lamar, Advertising, the public. It's a wonderful, wonderful company. Wonderful company, you talk about shareholder alignment. Family owns so much of it. They're going the dividend every year. Our midstream energy stuff is over five percent yield. So you get some higher

It's just priced in.

You know McDonald's I think we talked about last time. That's a lower yield now only because we're up six hundred percent since we bought the stock. Same for Walmart Walmart went public.

The same year I was born.

They've grown the dividend every single year, so you end up with a lower yield right now. But our yield on Walmart McDonald's is like forty percent on purchase, We're getting forty percent year over year from what we bought the stock at.

That's what the whole point of dividend growth is.

I just have like, there's up thirty seconds, right. Are you competing with money mark at funds in terms of getting money in clients?

No, you're always competing with the risk free rate in the fact that people have to bench it against something, But they're not people saying I'm considering either money market or a divid in portfolio.

It's a totally different risk profile.

It's true in a macroeconomic sense, but it's never true in a micro economic sense.

How's the weather out in here we go?

Here's the thing. I'm sitting here in Manhattan. The sun's out, it's beautiful.

It's a little chilly.

California having the worst rainstorm that they've seen, which, of course there people wouldn't even you know, around the country wouldn't consider it a storm. But in Newport they'll probably end up canceling school for a month.

I saw some of the video coming.

Looks really fatty. It's pretty bad. They've gotten a lot of rain.

It's a little worse inland, but yeah they you know, we get this like once every hundred years.

Yeah, all right, it's hopefully good. Snow up and tell hoo for the skiers.

David Bonson, thanks so much for joining us at David Bonson, Chief Investment Officer, Boson Group.

Dividend yields. That's one of the many regions we like to talk to day because it's a strategy we don't hear enough.

It's true.

And also just hallar risk profile is factored and when you take a look at the S and P divid and NEI old and sort of how to manage that.

Yep, I think that's interesting.

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Thirty Bloomberg Intelligence, where we're going to tap all our analysts that cover about two thousand companies and one hundred and thirty industries that we cover worldwide. But we're going to tap someone else right now in the ETF world for her take on the market, and that's Sylvia Dablonski, chief executive officer and chief investment officer at Defiance ETFs. A great perspective on sort of what the trends are

We appreciate it.

What are you seeing most right now as we're sort of in the second month of the year after a very bizarre four.

Weeks, Hi, Alex's great to see you. Yeah, I mean, has been a very bizarre four weeks. What's really interesting, and I think what's what's pretty good is that some of the positive momentum that we had towards the end of the year has continued into this year, and that blip on the radar that we saw those first couple of days and you know, have kind of just faded to the wayside. So what we're seeing on our side is just this continued, you know, exuberance and excitement about

Learning kind of an expansion of that ecosystem.

So before it was just NA video and a MD and now people are sort of looking at companies like Polenteer who you just mentioned, had uh, you know, a great earnings report, and Taiwan Sid my conductor, you know, I on q IBM, some of these other players in the AI space, and it's just been, you know, off to the races.

There, all right.

One of my favorite ETFs out there is a Defiance ETF c r u Z. I'm fascinated with the cruise business, the economics of the cruise business.

I actually even may go on a cruise coming up.

Versus it's Pete cruise. Now I feel like being.

Pitched yeah cr when I go on. So what do you see in that industry these days? What are the drivers?

Yeah?

So I think it's been really interesting to watch the cruise business and what happened during COVID is everybody you know vividly remembers the cruise business just came to an absolute halt and just took on so much debt and it was just a complete disaster. Right, And I think we're at the point now just listening to these last earnings calls where you know, you had the CEO.

Of Carnival, of Royal Caribbean, you know, even the outlooks from Norwegian.

You know, the spending is back, and what they're saying is that they have more cruises booked for twenty twenty four than they did pre pandemic. Finally, the average consumers spending a lot more, you know, sort of finally, and they're able to kind of like reduce their debt and have stronger profit margins and.

And things like this.

So I think the reason that that's holding up the whole travel trade in general is holding up because the economy is holding up, right, The consumer remains strong, that wage go to you know, four percent on or it

So have we seen at the same time, pivoting off of that theme, the money kind of coming out of money market funds and into stocks in that like, yeah, things are getting better, rates will go down. I'll be at the last couple of days, we've seen a nice move up higher and yields, but I'm going to go put money to work and economically sensitive stocks. They are actually going to benefit because things are going to get better, Rates will come down. Are we seeing this flow happen yet?

No?

And you make you make a really great point there, right, You'd think with the performance that we saw in the S and P five hundred and in Nasdaq last year in particular, that that money would be just really piling off of the sidelines. And I think it's going to

But I also think that you know, once you see a year like.

Twenty twenty two and like probably every investor or many of the investors that went to cash held all the time, you know, all the tech stocks and just got hammered down thirty forty percent. They didn't catch it. This year it's just kind of you know, behavioral finance a little bit there. But I do think that that money will

I mean, that's that's wealth building, right.

So I do think it'll eventually kind of pile back in and then it'll matter for markets.

Then you'll start to see a little bit of a tailwind there too.

I asked this, Paul, because like I'm totally talking my own book.

Like, sure, four months ago put some money in three month tea bills, that was an easy call.

Those three months are up.

I don't know, now what do we do, right, But like I'm the kind of person that wants to like put gold bars and soup cans under my bed, right, So so it's a I asked to talk my book. But also I really am curious as to like people like me, of which I'm sure there are many who how they make those decisions fall.

I don't know.

I mean, I would hire a professional or go buy s and pif.

Let's just be let's let's just be honest for a while.

So, so one of the names on your list that you recently were adding was I b M. Old School Tech. What's the thought there?

Yeah, So, interestingly enough, the old school tech company that everybody kind of forgets about is one of the you know, the best kind of leaders with.

The most experienced in AI.

You know, Watson X has been around before, probably before AI was a word, right, so they were kind of the first ones doing it.

They spent tons of money in R and D.

They it's just they've been hiding under a rock and they don't kind of get the fanfare of the other companies. But they have one of the most powerful hybrid AI models out there. They partner with on the video with a lot of stuff. So if you just kind of like, you know, look at their website and see what they're doing. For example, now they're working with Korea Quantum to use supercomputing and AI to better target potential attacks.

For defense purposes.

Now, think about what's going on in the world right just just every day, what we have going on in the Middle East, Russia and Ukraine, you know, the Iran strikes the other day. I mean, this information is so highly valuable that you can't imagine that there won't be a lot of government spending going into this.

And then not to mention you know, smart cities.

Electric cars, healthcare, all the just tech in general, right, all the stuff we usually talk about, but there's a huge need for this and IBM is really a leader.

There, Sylvia. What what is 'boten? What do you not like?

What do I not like?

So?

I you know, I think that I think that, like it'll take a while for the small caps to really start to rally. It's not like it's not that I don't like them, it's just it I think I'm allocating more towards the names that are moving, which which right now we're going to be, you know, kind of tech, semiconductor, like some of the consumer stuff I like, healthcare, you know, all these weight lossgs and things like that. I mean,

Will expand, but I just think there's a little bit more of ROI and and you know kind of the tech sector for now in semi conductors.

So in your ETF business, Sylvie, where you seeing the flows these days?

So we have seen you know, two places really.

One is again that quantum AI trade right we for one of our ETFs or is at the highest level it's ever been quantum, just because people are interested in that theme.

And then there has been so much flow for for defiance and for.

Our competitors in income ETF products, So ETF products that use different types of options shadowgies to generate income for investors. So we have like put right strategies where you know, we have S and P exposure and we sell puts to generate income. Other companies are doing it on single name stocks and things like that. So there have just been billions of dollars pouring into that enhanced income space. And the idea there is like you get a little

Right?

So you get a little bit of that index exposure, but you're still just getting your You're still just getting income, so you kind of have this like guaranteed income and then you know some portion of equity returns, so you have a smoother ride than if you just invested in the index, for example. So it's kind of like tapping back in from from treasuries trade.

So not what Paul said, don't do the next fund, but you can yeah, well you know what what Paul said.

Plus and maybe a little less downside if there's a black swan event, but you know, it's it can go either way, right if the market's just completely rally, I mean S and P and NASDAC, they don't usually serve you wrong.

So good stuff. Hey Sylvia, thanks so much for joining us there.

So we had Jablonski, chief executive Officer, Chief investment officer does it all for defind TTFS joining us at via zoom from New York City.

Here.

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