Equity and Bond Signals

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So two thousand and nine, I think we got to six thousand, six hundred and you know a couple of Vikings wins. After that, Ryan Belski went long at the market. He writes these beautiful short paragraph by paragraph ed Heyman notes on having the courage to be in the market. There's five or six people that can do his act of just shut up and stay in the market. Update the after two thousand and nine view at Dow seven thousand,

Well, it was hard to be bullish in two thousand and nine.

It really was, with lots of fear.

But we've seen the secular bowl market that we've been in print on since the two nine twenty ten period. See several different fits and starts with respect to cyclical bulls and cyclical bears. Right now in the fourth year of the most recent cyclical bull market, which the majority of the bull tom has been about momentum this year when we wrote a year ahead piece, which we had a great opportunity to talk about in January here on air.

That's actually quite good.

But what is not so good relative to momentum markets is that even though the market performance canwill and should be still positive, it's usually about half the rate of a momentum market on an annual basis, and there's more volatility. What we haven't seen is the correction or pullback that we typically do see in earnings driven markets. So we still think we're going to see some sort of a pullback. We don't like the time the market. It's very difficult

So what do you put it to our keep put?

I mean, I know you know what you've been calling for, is you know, a broadening sort of speak to us equity performance, right and to maybe value or small caps, but you know those sectors tend to be concentrated. What in financial healthcare? You know some of the underperformers of the S and P so to speak this year, talk to us a little bit about what you're buying when you sort of broaden out your allocation to value to small caps.

It's a great question.

So as as Tommy knows, I learned the business from a great gentleman by the name of William O'Neill, and he taught me how to be contrarian. And sometimes you have to think, uh from a contrarian perspective and be where the be where everybody else is not number one number two. From a value perspective, there are inherent fundamental

Brian, we think of international stocks when you think of emerging market equity is up twenty three percent this year.

God bless you that, I say, God bless you. I think it's an amazing run. You got to think back about this Nameian UH. After Liberation Day and the hatred for the US, everybody, a lot of people left the US and then they went to Canada, they went to Europe, they went to emerging markets, and they went on a big run. But currency isn't the only reason why you should buy a particular asset like that number one, number two. From a fundamental perspective, what are you buying?

What are you buying?

What do they make? What are their goods and services? And you got to be a little bit worried in terms of the quality of the service relative of the US.

Bryan Beilski with this, Fumail is here, CEO Cio. He answers the phone, He does it.

All question Tommy answers the questions shuffling around.

Here, vikings did you take the big I'm I'm going no, no, I can't afford to watch JJ McCarthy sit on the bench and I can't.

I can't afford that.

Okay, it's our oligatory football. Let's get back to the market. And you are legend for going to like these money conferences. And what I see is a blending now of speculation into investment. You know you're gonna tell me keep these two separate accounts.

Yea.

Too many people aren't discuss the speculators thinking they're investing, but they're not.

They're not investing, Tom I mean, listen, I think investing is like life and life is like investing. You have to tell stories, you have to live with the product, you have to understand the product, and that those are the stocks. So you're investing portfolio should be the ones that you're going to own, the names that you know, the one names you want to be in. And let's

Brian, you're one of the most successful financial advisors out there. I mean, I look, I can't even afford a financial advisor, tom But I have to ask this. Everybody who does afford can't afford when they're invested in SpaceX whatever shares somehow like they got in early whatever that stuff is. And you know, I'm looking at you, you know your recent note, and you're saying everyone is SpaceX frenzied. And then I see this headline saying they're lowering their IPO valuation.

Talk George, and yeah, interesting, okay. Brian Belski Pily Gonx seventy seven pages.

I read the pictures, go I actually.

Think this is a good thing that we're seeing this, And then you heard about anthropic in the opening. I think it's actually good that we're kind of peeling us back. You ever, you noticed that that the conversation and what opening eyes talking about is much more conservative relatively was six months ago.

That means they're performed.

That's I mean, they're preparing to become a public company where we actually have to tell the truth.

About what's going on.

But we think the play on SpaceX is Tesla okay interesting?

So it's not starlink. No, I think it's Tesla interesting. I mean, I don't know, is that really where the market is on it?

I know, I don't think so. I mean I think I think people want to believe that. They want to get it for what it is, the SpaceX, and then see what happens our play longer term, because I try to look out a couple three years.

I think they're going to combine the company.

What do you think about the wealth creation we've seen here in the US and how basically what it seems like in order to keep the consumption train going, we see investors dipping into their savings, right. We just saw the data that came out on this because they aren't not making any more labor income. I mean, do you see that trend continuing? How far can we go for consumption to keep up the pace?

I think we can continue to go for a while, especially because the wealth creation that has been created.

You have to take profits to have those profits in your account too.

And we've seen a lot of longer term investors stay in the market. So the best thing that we've seen with respect to the market has been that these high networth private wealth people have really been keeping this thing going.

Nerd Patrol and Brian's so good he can do the NERD stuff and also talk basic as well. So let's go nerd right now. Are not and Cam Harvey of Duke and Rob are Nott have a spectacular effort out in the Financial Analyst Journal that takes fun of French value and growth and blows it up. And their research, really hyper detailed research, is you need fewer things in your portfolio, not one thousand stocks, right, one hundred stocks,

It's a great question. We're actually underweight the mag seven. But our US focused product is really more technology driven, communication services driven, more consistent growth. We like the lower standardyviation of earnings growth, meaning it's not as volatile. Number one,

Have the momentum growth in that.

The other thing, too, is that I think the growth indices and the value indices tom Or and Damien are actually a fallacy because you can have the reason why value has been doing so well is because Micron's in the value index, so is Micron value stock, and some of these stocks have a percentage and growth and percentage and value. So again the way that we look at it is let's just buy good values audible Korea.

Is it the same thing in the Pacific RIM in Korea that all the movements in TSM. Well, yeah, basically they're the micron of the Pacific RIM.

Right yeah.

No, I mean, I don't want to get away from Brian Delski and talk about how equity flows impact effects and emerging markets, but.

I'm happy to do it. We'd do that in a minute.

But Brian, I have to ask you, because we have you here, all my friends on the golf course who have financial advasures talking about these tax advantaged funds, this tax efficient structure that allows them to take losses against their.

Gains tax harvest.

That's harvesting. That's the word I've been with.

Thank you testing.

I mean, what is I don't understand it. I mean, I'm you know, I'm just a high schooler here. I mean, talk to me a little bit about the attraction to that. I mean, how does it work?

You know, I'm not technically a financial I'm just a I'm just a simple CEO and chief investment officer, sometimes strategist, and sometimes the chief bottle washer.

So I actually that.

That just blew me right, that Saint claud State Education, you just blew me right. I have no idea what that means.

You know, I gotta get read on this time. There's a whole thing to manage losses.

You and I've heard about age.

I've heard about it, but I don't think exactly how.

Okay, Well, the way it works is it's a way to develop out seventy five to one hundred and twenty five basis points of fees.

This is really, this is really, you know, it's always everyone in short Hill, New Jersey, to just hear that.

The first order, the first order recurrens function of this is real simple. You sell sell the first loss, I feel great. So the second loss you get out in the seventh, eighth and nine, ten loss and the fortune isn't working, is it?

Now?

You're talking Minnesota Twins baseball.

Or are you talking New York to that's football fifty seven years to to be fifty eight. I mean, let's knock on wood. I mean it's almost.

Fifty three for the for the next so let's go.

Yeah, let's go house.

Running a business. Let's finish up with us. You're sitting there yet, you know you were very comfortable with a fabulous bank and you know major shot that they've moved on from here. They survived bell ski walking up. Of course it is the door and that's great and you've been total class act about it. I know some Canadian firms have picked you up. For everybody out there that just dreams about doing a bell ska, what's the biggest headache?

Well, you know, when you think about working for the man quote unquote for thirty six years, you think about all the bad stuff. There's actually some really good things working for the man. That includes compliance and legal and all that kind of stuff. You wake up at two o'clock in the morning sometimes and you're thinking, oh my gosh, am I going to be able to make payroll? And

We don't have clients. We just try to make people money.

Well, TUNEA is just emailed in. He says, what's the ETF, what's the flavor of UTF you're doing with a four hundred others that were created.

Here's the flavor you brought up the other part about owning all these stocks. Now, as you know, I was an institutional strategist and the majority of my career. So you walk into all the smart people at JP Morgan, they own three hundred and fifty stocks too many. What we have learned in our extensive back testing is that fifty stocks is.

Kind of the magic number.

You are correct, fifty stocks is I never give my opinion for Fidelity fifty And for the Sequoia people, what they invented was a miracle.

Go yeah.

So we run a focused portfolio that's forty five stocks, or we run a value portfolio that's fifty stocks. We run a smid portfolio that's seventy five stocks around diviting growth. That is about dividing growth companies that grow the divid in overtime. They have castfolios about the divinil to fifty stocks against the aristocrats, and then we run an all cap that we put everything all together in that.

Okay, you want to squeeze one more in here.

I mean, look, I'm just listening. I'm just learning here, you know. I mean this is really well to run small and MidCap.

I mean this is fun.

I think research about to have a fair child. Right, I have two children that I know of, and we run five. That was a joke. We have five portfolios.

The smith is exciting because you can play longer term themes like we bought a company called Celsius a few years ago. On tennis shoes, shake shack, these names that you want to be in longer term that kind of people have forgotten. They talk about but they don't really own brands retail.

I can emphasis the bottle that you just heard their folks. So, mister Belski on fifty stocks, I don't know if it's fifty to thirty, it's not my opinion. It matters. But this is the revolution of half a century, and I say this is we just had the death of mister market wits to go from three hundred stocks down somewhere in the vicinity south of one hundred stocks is the absolute foundational structure of modern management. How seriously, how do the Twins look? They beat the Red Sox.

And now they go to Chicago and they get crushed. I mean they're there and listen. I like their uniforms, love their unis. I'll be there next week. It's an eight minute walk for my place in Minneapolis. That's probably the best part of my life in terms of being in Minneapolis, to be able to go the Twins, and.

Then there's the Vikings. Brian Belski, thank you so much. With humilists, can't say enough. He spends more time with than with us.

It's the afternoon when.

Scott the answer is yes, okay.

Brian Belski, thank you so much.

Appreciated.

Stay with us. More from Bloomberg Surveillance coming up after this.

You're listening to the Bloomberg Surveillance podcast. Catch us live weekday afternoons from seven to ten am Eastern Listen on Apple Karplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.

Just start strong and now. Lindsay Rosser joins us Golden Success Management.

So how has.

Life changed with a Mando line them darkening the door? I mean, she's a terror.

It's wonderful. It's you know, it's it's another blonde talking credit.

Better. That was such a good album time, Petty Blonde's talking credit. Actually, seriously, what do you learn from Amanda Lignum when you reader works? How does it help you allocate?

Yeah?

No, she's she's really helpful andsightful. One of the pieces she had recently was talking about private credit and not being concerned about it being a systematic risk that we feel if you look at non accruls i e. Is anything going bad in the pockets of private credit, those numbers are actually low on average. Obviously their pockets like software where there are some concerns, for example, or retail.

Well, well, lindsay, I mean, you know, private credit notwithstanding, I mean we know about all the landmines that are kind of lurking there.

Let's talk about public credit. I'd love to call it.

You know, our audience's attention to the fact that investment grade corporate credit spreads here in the US are at the lowest since ninety eight. I think if you look at em sovereign and US high yield credit spreads, you're talking lowest in so seven. I mean, this is almost twenty years here, So you know, what are we missing? I mean I would have thought that the demand for private credit would have crowded out the public market.

That doesn't appear to be happening.

Well, I think there are two things. One to start with your ladder point, there isn't a crowding out because there's just a ton of money out. Look at all these deals getting done. There's no pushback, there's no hesitancy back to where spreads are all time tights looking a twenty year window, There's been a big change in the constituents of the index.

It's actually moved.

In a way that we if you kind of adjust for the better credit quality, the shorter duration, we actually aren't at all time tights.

There's a little bit more you can go.

Now, now, let's be real that there's not a ton of a way We're not going to tighten another twenty basis points, but that perspective's helpful. What is really the most important thing are spreads justified? And when you look at earnings, you look at balance sheet, you look at again those technicals of cash answers.

Yes, I was in Toronto a long time ago, back when the least were good, and I had the privilege of Sir John Templeton and room with myself. He was very, very kind, and he had that famous phrase, there will be a shortage of bonds here we are. Why Why is there a shortage of bonds where everybody's nuts to issue and everything gets gobbled up?

Sure, I think it's the demographic story, right.

So we're getting older and all that.

You got it.

You need more fixed income and look, it's fun to have stocks that are up, you know, twenty percent and twenty percent of ten percent excuse me completely in bonds. Come on, Tom, you're younger than that.

Give me a break.

Well, here's the thing, lindsay, I mean you call this here to my attention in your last note, and I heard you know, Kasmi and the guys at Cheaping Morgan talking about savings. You know, Joe Lupin talking about savings here in the US, the recent numbers that are out, I mean the fact that households are dipping into their savings yet again to offset you know, the reduction and labor income. How does that manifest itself in credit markets and demand for credit?

I mean, will it eventually do that?

So it's something that you have to watch on the dashboard, right So when you have to your point, spreadsnow tight? Remember all in yields very high, but yes, spreads tight. You need to have a dashboard of data that you watch like a hawk. One of them is how the consumer is doing. Why you care about that. Consumption is the biggest piece of GDP. It's also what fuels these companies, fuels these earnings. So right now the consumer is saying, got to keep consuming. I'm going to dip a little

Where are you in sixty forty if you take the mix, where we are this equity, what's dell up like one hundred and twelve percent?

Having a good night?

This nut's time we're living in. What do you do with a classic sixty forty model?

Yeah, So our views on the equity side is that we think we can hit eight thousand by the end of the year. We actually just upgraded that that would be EPs up twenty four percent. We think that that number is going to be up again next year, just less. So the view is that equity still have some room to run. On the fixed income side, like I said, yields are attractive, So I think it goes back to what are your needs? What are your liabilities? Sixty forty

Okay, we don't care the reason you're in here. Can you have you ever been at Madison Square Garden in the Goldman Sex Suite?

No, not Sulman Sax Suite. Do you have the number?

No?

I can imagine what a ticket for Lindsay Man and the gold in the Golden sweite.

That's going to go for it. That's a huge I.

Mean I don't think like a month's trading room.

I mean that is my would be my dream.

I mean I could call me up last night and you know, like we got to get Lindsay here. I mean, this is exciting.

This whole next thing very exciting.

Yeah, you you probably don't want to go down this road with me because I am a Philadelphia person.

And that's true.

You could find me in tears on this program if we continue to were were.

Talking about you?

Where were you?

You had the teethtach right, we were talking about.

Yes, I uh it was my twentieth college reunion. To date myself so you can figure out my fixed income equity allocation. Uh so is this past weekend and go to our favorite place, Hogy Haven Ogi Hates which I went outside the comfort zone. I tried a new sandwich, which one just a typical like turkey, lettuce, tomato or mayo little mustard.

See this is a difference. We go from Lindsay and Hoy Heaven. Tina Fordham hangs at the door Chester on Thursdays with an umbrella in her beverage. Lindsey, I gotta.

Go, Lindsay, Robin, Lindsay so much with Goldman Satz.

Working with a man what you call it blonds.

And credit blonds and bonds blondes.

And yes, that's great the podcast, right, thank you so much.

Stay with us. More from Bloomberg Surveillance coming up after this.

You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from seven to ten am Eastern. Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.

Across this nation with the sun coming up on the West coast. Without question, this is the most important interview of the day. Josh Seagen is with Madison Reality Capital, and he does all sorts of stuff in real estate or that.

But Josh, all that.

Matters in this non rebound of office buildings empty in all of our cities is two nineteen and two twenty East forty second Street, which is Pfizer has a deadbeat building and they're turning it into condos. Is this condo conversion thing gonna work in real estate?

It's actually it's rentals, so it's.

Okay, real convert. How many amateur it is to me? Condos are rental, it's rentals.

Is it going to work? We believe it will.

There's been a huge lack of supply of housing in New York City, partially because of his owning constraints. It's been the tight market, and there was an over abundance of office post COVID. What really happened was in the fourth quarter of twenty four, New York City created a four to sixty seven New York State created a four to sixty seven M tax abatement which really aligned developers or incentivized developers to convert to multifamily with a pretty

The buzzes demand is good. What about Cincinnati? What about what about who's completely empty? Los Angeles? I mean, are they going to do the same?

So it's interesting.

I think that New York kind of created a roadmap for other cities to follow suit, and we're starting to see that in DC in other markets where you're starting to see conversions happen in a Boston, so we believe it is the blueprint. And you know, the interesting thing in New York, as compared to some other places, office has really come back in New York in a big way. So a year ago I would have told you only the class A office is back, but now it's the A, A minus B plus interesting and.

The ancillary way to play that is through hotels.

And what I mean, right, aren't you working on the conversion the dominic into the new Soho with with Keane?

Well, what we're seeing in a number of cities right now is really great demand for condo with hotel right branded residences, and what really happens is you're seeing in some cases branded residence just a brand only going residence. And then another case is mixed use with a hotel

With the brand appeal. We've been involved in four.

Seasons hotel and residences Rich Carlton, We've been involved in Raffles hotel and residences.

So it's been a theme in a number of markets throughout the US.

So Josh, see, I get that business plan and that makes perfect sense to me. But then I look at the Bentley Residences in Sunny Aisles right with a elevator that takes your Bentley up to the whatever forty fifth floor I mean. And yet you know you're involved in dels like Matt talk to us about you know what you know, what is the fundamental you know view you take on that type of investment.

Well, so there, you know, it did appeal to car enthusiasts. But what's interesting about Florida is in Florida, buyers put down a deposit and that deposit can be used for the capitalization of the deal.

So it's a huge thing.

So when we went into that deal, it was just a six hundred and thirty million dollars construction loan with an esteem developer in Miami.

The building was basically fifty.

Percent pre sold, very very unique, and typically what that means is you have twenty to fifty percent hard deposits that can go into the project before we even fund.

Before you even did a hole exactly.

So we just did another deal structurings the engineering before Carlton Residences in West Palm, and by the time we closed, it was seventy percent sold.

You guys are too fancy, I mean, Alexis and I are just saying, how close are we to the Ambassador Liquor store on Second Avenue And what's the rent in the Pfiser building going to be?

Roughly So we believed, you know, when we honestly, yeah, that one hundred dollars of foot So now come on, talk.

More per month a two bedroom, three bedroom thing ten thousand bucks seven seven eight thousand, Okay, great? The bottom line across this nation is we have a housing crisis. We look out and they're these skyscrapers at the back end of Central Park South. Are those people paying their fair share of property taxes?

Those people in terms of like owners, just owners.

Yeah, the people that don't live in those properties because it's just sunk money from Asia. That's the stereotype, right, Well, are they or do they have an abatement like real people living in the Pfiser building where the only way it gets done as an abatement.

Well, condos don't have abatements anymore really in New York City. So so that's important to note they're paying real taxes, right.

So years ago, you know, twenty years ago, there was.

A tax abatement and that applied to condos and there are some big projects on fifty seven and obviously rentals, you know, still have the abatement.

Damien wants to get in it.

I got left.

I mean, like we're getting so deep into the weeds. But you know, what are really wants to know is we just saw US treasury yields rise fifty basis points, you know, like I mean in the drop of the hat, and that can't be good for New investment right. I mean, so talk to us a little bit about, you know, rate volatility in the current environment. Does it need to come down in order for deals to get done? What are you seeing, you know, on the ground.

So over the last twelve months, we've seen spreads compress, which was a huge thing for real estate. So while base rates kind of stayed relatively high, spreads came down and what we started to see was the wheels getting sort of greased in terms of the investment sale market. Now, some of that came into the new year with a lot of optimism there's gonna be a lot more sales, and it's petered out a little bit because of this

Good time for one more question. What's your advice to the mayor? He's in like one hundred days. I guess there was a honeymoon. Honeymoon's over. Don't we have a pet? We have a your second place in Manhattan? Now you have to pay a tax on that, Damien.

Well, I mean I live in Westchester, I know, I know my second place in Manhattan. I was thinking about that. What happens is when you're when you when your children get older. I think the move that a lot of parents are doing is they're trying to buy a place in Manhattan and then they're going to lease it out to their kids because they can't afford the right to devisor.

But what's your advice to the men.

Don't bite the hand that feeds you exactly. Advice.

You know, at the end of the day, there's there's real business that wants to be here. Actually from a business standpoint, you're seeing tenants want to expand, some AI tenants financial services.

Right at the end of the day, they can go anywhere they want to go.

What's the symbolism of the related property Right behind the General Motors building on Madison Avenue, it's a hole in the ground and boy is it going up fast.

Well, it's one of a handful of brand new offices. And it sort of goes to the trend that I said, which is top office rents. Rents at the top I mean some are three hundred dollars a foot right now. Wow, So you know it makes a lot of sense and that.

Is that the Diamond District was that? That is that the building to run. There's another one right there, that's right there. Unbelievable, Josh, this is Judge going stay with us.

More from Bloomberg Surveillance coming up after this.

You're listening to the Bloomberg Surveillance podcast. Catch us live weekday afternoons from seven to ten am Eastern. Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.

So two thousand and nine, I think we got to six thousand, six hundred and you know, a couple of Vikings wins. After that, Ryan Belski went long at the market. He writes these beautiful short paragraph by paragraph ed Heiman notes on having the courage to be in the market. There's five or six people that can do his act of just shut up and stay in the market. Update the after two thousand and nine view at Dow seven thousand, like it's an eight bang. You've done to fifty thousand.

Well, it was hard to be bullish in two thousand and nine.

It really was, with lots of fear.

But we've seen the secular bull market that we've been in print on since the two nine twenty ten periods see several different fits and starts with respect to cyclical bowls and cyclical bears. Right now in the fourth year of the most recent cyclical bull market, which the majority of the bull tom has been about momentum.

This year when we wrote a year ahead piece, which we had a.

Great opportunity to talk about in January here on air, we've transitioned to an earnings driven market. And you talked about Dell coming into before this hit, and you talk about micround, and you talk about all these companies being rewarded for earnings.

That's actually quite good.

But what is not so good relative to momentum markets is that even though the market performance canwill and should be still positive, it's usually about half the rate of a momentum market on an annual basis, and there's more volatility. What we haven't seen is the correction or pullback that we typically do see in earnings driven markets. So we still think we're going to see some sort of a pullback. We don't like the time the market. It's very difficult

So what do you put it to our teput?

I mean, I know you know what you've been calling for, is you know, a broadening sort of speak the US equity performance right and to maybe value or small caps. But you know those sectors tend to be concentrated. What in financial healthcare? You know some of the underperformers of the S and P so to speak this year, talk to us a little bit about what you're buying when you sort of broaden out your allocation to value to small caps.

It's a great question.

So as as Tommy knows, I learned the business from a great gentleman by the name of William O'Neill, and he taught me how to be contrarian. And sometimes you have to think, uh, from a contrarian perspective and be where the be where everybody else is not number one number two. From a value perspective, there are inherent funnel

Brian, we think of international stocks, we think of emerging market equity is up twenty three percent this year.

God bless you, that's I say, God bless you. I think it's been an amazing run. You got to think back about this Nameian Uh after Liberation Day and the hatred for the US, everybody, a lot of people left the US, and then they went to Canada, they went to Europe, they went to emerging markets, and they went on a big run. But currency isn't the only reason why you should buy a particular asset like that number one, number two. From a fundamental perspective, what are you buying?

Bryan Beilski with US Humil is here, CEO Cio. He answers the phone, he does.

It all question.

Tommy answers the question.

Shuffling around your vikings, did you take the big I'm going no, no, I can't afford to watch JJ McCarthy sit on the bench and I can't.

I can't afford that.

Okay, it's our bligatory flipball. Let's get back to the market. And you are legend for going to like these money conferences. And what I see is a blending now speculation into investment. I know you're gonna tell me keep these two separate accounts Yeah. Too many people aren't discuss the speculators thinking they're investing, but they're not.

They're not investing, Tom. I mean, listen, I think investing is like life, and life is like investing. You have to tell stories, you have to live with the product, you have to understand the product, and that those are the stocks.

So you're investing portfolio.

Should be the ones that you're going to own, the names that you know, the one names you want to be in.

And let's say your other side of things. Let's say you put a thousand dollars.

Into an account, Tommy, and that's a thousand dollars that you don't need to live off of. Maybe that one thousand dollars turns into ten, maybe it turns into zero. That's your speculative.

Mom.

Brian, you're one of the most successful financial advisors out there. I mean, I look, I can't even afford a financial advisor, Tom, But I have to ask this. Everybody who does afford can't afford when they're invested in SpaceX whatever shares somehow like they got in early whatever that stuff is. And you know, I'm looking at you, you know your recent note, and you're saying everyone is SpaceX frenzied, and then I see this headline saying they're lowering their IPO valuation talking George and.

This yeah, interesting, okay Brian Belski, Pily God SpaceX seventy seven pages.

I read the pictures, go I actually.

Think this is a good thing that we're seeing this. And then you heard about anthropic in the opening. I think it's actually good that we're kind of peeling us back. You ever, you noticed that that the conversation and what Opening Eye is talking about is much more conservative relatively was six months ago.

That means they're performed.

That's mean they're preparing to become a public company where we actually have to tell the truth about what's going on. But we think the play on SpaceX is Tesla okay interesting.

So it's not starlink.

No, I think it's Tesla interesting.

I mean, I I don't know, is that really where the market is on it?

I know, I don't think so.

I mean, I think I think people want to believe that they want to get it for what it is, the SpaceX, and then see what happens our play longer term. Because I try to look out a couple three years.

I think they're going to combine the company.

What do you think about the wealth creation we've seen here in the u US and how basically what it seems like in order to keep the consumption train going. We see investors dipping into their savings, right, we just saw the data that came out on this because they aren't not making any more labor income. I mean, do you see that trend continuing? How far can we go for consumption to keep up the pace?

I think we can continue to go for a while, especially because the wealth creation that has been created, you have to take profits to have those profits.

In your account too.

And we've seen a lot of longer term investors stay in the market. So the best thing that we've seen with respect to the market, it has been that these high networth private wealth people have really been keeping this thing going.

Nerd patrol and Brian's so good. He can do the NERD stuff and also talk basic as well. So let's go nerd right now. Are Not and Cam Harvey of Duke and Rob are Not have a spectacular effort out in the Financial Analyst Journal that takes fun of French value and growth and blows it up, and their research really hyper detailed research is you need fewer things in your portfolio, not a thousand stocks, one hundred stocks, et cetera.

Now, it's a great question. We're actually underweight the Meg seven. But our US focused product is really more technology driven, communication services driven.

More consistent growth.

We like the lower standard deviation of earnings growth, meaning it's not as volatile Number one.

Number two, you're really talking about GARP too.

If you look at the majority of the portfolio that you just explain, it's growth at a reasonable price, and then you have to play and respect these consistent growers that actually are high quality growers that.

Have the momentum growth in that.

The other thing too, is that I think the growth indices and the value indices or and damien are actually a fallacy because you can have the reason why value has been doing so well is because Micron's in the value index, so is Micron value stock. And some of these stocks have a percentage and growth and percentage and value. So again the way that we look at it is, let's just buy good values audible Korea.

Is it the same thing in the Pacific RIM in Korea that all the movements in TSM s. Well, yeah, basically they're the Micron of the Pacific RIM.

Right yeah.

No, I mean I don't want to get away from Brian Belsky and talk about how equity flows impact effects and emerging markets, but I'm happy to do it. We'd do that in a minute. But Brian, I have to ask you, because we have you here, all my friends on the golf course who have financial advisures talking about these tax advantaged funds, this tax efficient structure that allows them to take losses against their gains.

Tax harvest.

That's harvestly. That's the word I've been with. Thank you, tabs.

I mean, what is I don't understand it. I mean, I'm you know, I'm just a high schooler here. I mean, talk to me a little bit about the attraction to that. I mean, how does it work?

You know, I'm not technically a financial advisor. I'm just a I'm just a simple CEO and chief investment officer, sometimes strategist and sometimes.

The chief bottle washer. So I actually that that just blew me right.

That Saint claued State Education, you just blew me right.

I have no idea what that means.

You know, I gotta get I'm gonna get to read on this time.

There's a whole thing to manage losses. You and I heard about age.

I've heard about it, but I don't think exactly how.

Okay, Well, the way it works is it's a way to develop out seventy five to one hundred and twenty five basis points of fees.

This is really, this is really you know, it's always everyone in nice Short Hills, New Jersey to just hear that.

The first order, the first order recurrens function of this is real simple. You sell sell the first loss, I feel great. So the second loss you get out itarly, the seventh, eighth, and ninety the ten loss, and the fortune isn't working, is it?

Now?

You're talking Minnesota Twins baseball or are.

You talking New York to that's football fifty seven years to to be fifty eight. I mean, let'sknock on wood. I mean it's almost stake.

It's fifty three for the for the next so let's go Yeah, let's go house.

Running a business. Let's finish up with Yes, you're sitting there. You know, you were very comfortable with a fabulous bank and you know, major shot that they've moved on from here, they survived bell ski walking up. Of course it is the door and that's great, and you've been total class act about it. I know some Canadian firms have picked you up. For everybody out there that just dreams about doing a bell ski, what's the biggest headache?

Well, you know, when you think about working for the man quote unquote for thirty six years, you think about all the bad stuff. There's actually some really good things working for the man. That includes compliance and legal and all that kind of stuff. You wake up at two o'clock in the morning sometimes and you're thinking, oh my gosh, am I going to be able to make payroll? And

We feel like the business is good there. Now.

We last week we executed here on a brand new ETF and we've got some ore registered investment advisor partners here that we can be on the on the platform. What we do is provide a model for our value portfolio, our smid portfolio.

We don't have clients. We just try to make people money.

No TUNEA is just emailed in. He'says, what's the ETF. What's the flavor of UTF you're doing with a four hundred others that were created?

Here's the flavor you brought up the other part about owning all these stocks. Now, as you know, I was an instiutional strategist and the majority of my career. So you walk into all the smart people at JP Morgan, they own three hundred and fifty stocks too many. What we have learned in our extensive back testing is that fifty stocks is.

Kind of a magic number.

You are correct, fifty stocks is I never give my opinion for Fidelity fifty And for the Sequoia people, what they invented was a miracle.

Go.

Yeah.

So we run a focused portfolio that's forty five stocks, or we run a value portfolio that's fifty stocks. We run a smid portfolio that's seventy five stocks. Dividend growth that is about dividing growth companies that grow.

The dividend overtime.

They have cashfolios about diviningield to fifty stocks against the aristocrats. And then we run an all cap that we put everything all together in that.

Okay, you want to squeeze one more in here.

I mean, look, I'm just listening. I'm just learning here, you know. I mean this is really well in order to run small and MidCap.

I mean this is fund I think research have a fair child, right, I have two children that I know of, and we run five.

That was a joke. We have five portfolios.

The Smith is exciting because you can play longer term themes, like we bought a company called Celsius a few years ago on tennis shoes, shake shack, these names that you want to be in longer term that kind of people have forgotten. They talk about, but they don't really own brands.

Retail.

I can emphasis the bottle that you just heard their folks. So, mister Belski on fifty stocks, I don't know if it's fifty to thirty. It's not my opinion. It matters. But this is the revolution of half a century, and I say this is we just had the death of mister Marco Wits to go from three hundred stocks down somewhere in the vicinity south of one hundred stocks is the absolute foundational structure of modern management. How seriously, how do the Twins look? They beat the Red Sox.

Yeah, and now they go to Chicago and they get crushed. I mean they're there and listen.

I like their uniforms, love their unis. I'll be there next week. It's an eight minute walk for my place in Minneapolis. That's probably the best part of my life in terms of being in Minneapolis, to be able to go the Twins.

And then there's the Vikings. Brian Belski, thank you so much. With humilists, can't say enough. He spends more time with the wa than with us.

It's the afternoon when Scott the answer is yes, okay.

Brian Belski, thank you so much.

Appreciate it.

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