Kristen Bitterly Michell on Wealth Management

organization generates. She really has an incredible background in everything from capital markets to derivatives to wealth management. And I found this to be an absolutely fascinating conversation covering everything from risk to inflation to how to manage markets and how to manage investments when market show a lot of

volatility and everybody starts to get a little nervous. I thought this was quite fascinating, and I think you will also with no further ado, my conversation with City Global Wealth. Kristen Bitterly Michelle, So, you have really very interesting background. You've been involved with capital markets for your entire career. What led you to this area. It's really interesting because I'm not someone that you would think would be the typical profile to end up in capital markets or or

sales and trading. I'm from a very small town in the middle of Pennsylvania. It's a town of about four thousand people. So exposure to markets or investment banking, or any of the careers in finance was not something that you really envisioned. And so coming out of school, I studied economics and Spanish literature, and I applied to a program that actually targeted liberal arts majors. It was at

Bank one at the time. It was called the First Scholars Program AM, and they targeted liberal arts majors, and the whole concept of it was, why don't we take liberal arts majors, give them on the job training, give them exposure to a variety of different areas of banking and finance. And so this gave me exposure to everything from investment banking to retail looking at like checking account campaigns like how do you get more assets in the door? To credit risk, and ultimately, to make a very long

story short, I fell in love with derivatives. So derivatives were a part where I was very intimidated. I wasn't that typical person that did a number of you know internships during the summer had that with no No, I was econ and kind of geeky. I love statistics, I loved math, but really I was going to go down that literature route more than anything else and and study

Spanish literature. And so when I arrived and got this exposure and on the job training, I really challenged myself to do the thing that I thought was going to be the scariest, and so derivatives at the time seemed like the scariest, the scariest area, and so I said, all right, it's six months, let's see, let's see how this goes. And so it was within the corporate equity Derivatives team. I was very lucky to have amazing mentors, amazing people around me who really taught me about the business,

taught me about markets. And once I started making that translation in my mind that it's just a different language, it's different vernacular. Like when you think of derivatives, it's like statistics, right, if you have a base foundation in statistics, it's just translating those different concepts to a new language. I very quickly fell in love with it. I I fell in love with equity derivatives. I thought they were

amazing building blocks and a really creative part. And it was this combination of being, like I said, kind of geeky kind of quantity, but then being client facing. And so that was really kind of the early formation where I'm like, this is the area where I want to be. I want to be client facing, I want to help client solve problems. But having this very creative, almost modular part in terms of designing solutions and structuring solutions I loved.

So let's talk exactly about that at City in two thousand and seven fantastic time, and you take over as head of structured solutions. Tell us a little bit about what that job entailed under normal circumstances, and then we'll talk about the couple of years that followed. Sure, so I'll tell you a little bit about how I came to City. So I spent a long time in markets, Like I said, big focus on derivatives, both on the

sales as well as structuring side. I covered corporate clients, institutional clients, as well as ultra high net worth and high net worth clients. At the time when I started really focusing in that part of the industry, a lot of those corporate equity derivative teams. They covered both, they covered individuals as well as as well as the corporations.

And so throughout that journey and covering different regions, different types of clients, I found that with the high net worth ultra highnetworth clients you developed a much stronger relationship. So this was a part of the market that it really challenged your own understanding of these strategies because these were clients that some of them were very sophisticated when it came to financial products. Some of them it was

their first experience. They had a big liquidity event, they sold their company to another company, their company just went public, and it's the first time that they're talking about options, right and strategies to exactly to be able to hedge,

maintain wealth, monetize wealth. And so this ability to either go super technical with someone who was an expert in that field, and also be able to roll it back and just explain at a very high level, you know, what is the purpose of the strategy, what is it helping you do? What could go wrong? And so ultimately, given the different types of client segments that I had covered, I made the decision that I really wanted to be in wealth management, and so two thousand seven, UM, I

came over to city. My husband, UM always teases me on this point that he says, you know, aren't you, in some aspects kind of a trader? And when you think about market timing, was two thousands even the best time to make a move, um, But it ended up being a perfect time actually long term for for my career. And so coming into the city a lot of changes

right on the brink of the Great Financial Crisis. And you know, the one challenge there, Berry was the fact that we were selling these these products and solutions that actually were extremely relevant given market conditions. But obviously, you know, protecting your wealth, hedging downside risk, providing liquidity, helping people

navigate margin calls. But obviously it was a really challenging environment, a lot of market volatility, and anything that had the counter party of a large bank was not something that was going to go over well. So there's always risk involve with which people tend to ignore when things are pretty well, Let's say in two thousand seven, a lot of people weren't thinking about counter party risk. Tell us

what it was like when everything hits the fan. In O eight oh nine, derivatives blow up, not that you were playing in the leverage, not at all. Risk management. That's a different sort of derivative than c d O CMOS, CDO squared, etcetera. You were basically doing more rational We're helping people customize their risk return profile across asset classes, is the way that I think about it. And so

there's definitely a pre in post. I mean, when you look at that pre it was you know, the thought counterparty risk of a bank was solid, right, Like that was something it wasn't even questioned. I'm sure you remember this as well in terms of the bond market, whether you were looking at structured products bonds, this idea that hey it's issued by this bank, that bank, well known,

diversified financial services institution. And then the interesting thing is before we really saw that the unwinding of risk, I mean, you saw credit spreads widen, right. You started to see credit spreads to sniff things out. Kind of I hate to anthropomorphous size markets, but there's a sense that some participants in the market are sniffing us out and it gets reflected in prices. You can see credit spreads widen, and it's something you people are like Wow, that's great, Right,

they're willing to pay me more. Now I'm getting a higher yield on this. And so I think for a reason,

looking back, you learn from every experience. But I think that's one of those one of those moments in time where you're like, if something is too good to be true, it probably is too good to be true, and questioning why something is yielding the amount that it's yielding, and so living through that experience, I mean, from a personal standpoint, it was tragic, right, Like lives were completely changed across obviously the United States, the global economy, and then you

saw a lot of people that you really respected, really cared about. There is a massive amounts of layoffs, and so I think it was a very very seismic shift in terms of just what we thought finance was, what we thought sales and trading was, the stability of that type of career. And so I think from that perspective,

you really realize that nothing is guaranteed. You have a lot of gratitude for being able to work in this industry, and then you also have to really make sure that people realize and again we carry this through to wealth management more broadly. If you don't understand what you're doing, you should not invest in it, to say the very least. So from there you rise to the position head of

Investments for North America for City Global Wealth. It sounds similar to a c i A role Chief Investment officer role. Tell us a little bit about your current role and what it involves. Sure, I love my current role. I love leading investments for North America for City Global Wealth. This is an area where if you hear Jane Fraser speak,

it's it's an area where we're heavily investing UM. As an institution, one of our key objectives is to be a global leader in wealth management, and so my mandate in leading North America is really to lead the investments organization. And so that's a combination bury to your point about the c i O role in terms of what strategy, How are we advising our clients, how are we breaking down markets? So there's a strategy component to that. They're

a client coverage component to that. Depending upon UM, your wealth, depending upon your objectives, who are you interacting with, whether it's an investment advisor, investment counselor, or whether it's product specialists who have deep expertise in a particular asset class or product. It's our product organization making sure that we're offering the right products and solutions, how we're analyzing what we offer to our clients, how we're differentiating that versus

the competition. And the last piece of it, which I've become really passionate about over the past really kind of five to ten years of my career, is the technology and platform. So if you think about some of the trends within wealth management, it's not just about the personalization bespoke solutions, although that is something that is certainly gained um a lot of popularity and grounded and is almost

becoming table stakes. But there's a big piece of it that's digitization, right and the platform and how easy is it to access your advice and put capital to work.

And you can see some of the trends just from the digital world, right it and that comparison, if someone's going to do an online transaction and online trade that is almost like I use the example, it's like seamless grubhub right where you call up and like this idea of ordering a pizza right and calling a pizza place if you go on like on an app, and if that pizza place isn't open, You're going to the next one.

No one's calling anymore. And so those trends within our industry as to some of those experiences that our clients want where it's contactless, right, this should be frictionless, it should be pretty easy for me to do versus where we're really adding value in terms of advice. So the platform, digital experience and technology is really really critical as well, really quite quite interesting. So you've been at City for over sixteen years. That's a long time at any one place.

Tell us about what's kept you there for this long? It will be seventeen come December. Yeah, so it's been a great experience. Look, I've been very fortunate at City. I've had a lot of support, a lot of eight people around me, a lot of great mentors, right, And I think that one of the things that citied as remarkably well is really allows you to transition throughout your career in terms of exploring different areas of the business.

And so while you can see that concentration and markets and sales and trading, once I started really working with our private bank in a meaningful way, I was then able to lead teams of investment counselors and investors. I ran investments for the East region. I then came back into capital markets and and got to really kind of see, Okay, how are we running this business and really setting the up this business for this client segment of family offices,

ultra highnetworth, highnetworth investors. And so while you could see this common vein, it really has given me the ability to flex different muscles. And that's not just me. I mean that's something that's really really common throughout our organization. And you'll see that with a lot of people. And it doesn't have to be all within wealth management. It

can be a cross lines of business. So I think city and our culture is one of let's keep our good people, Let's give them opportunities, whether it's in their immediate world or outside. And then the other thing that I will say is that I think culturally it's a very flat organization. There's access to everyone's accessible. And what I've seen that's really special about our culture is even when we've had those situations where we lose people, they

tend to come back. We call them boomerang um. They try something else for one to two years and then they say you know what this this place just in terms of the access, the culture, that drive to kind of grow together do stuff as a team. It feels entrepreneurial, even though we're such an old bank, right, So that's really what's kept me here. And I think now that we're embarking upon with Jane taking over at CEO, this massive focus and wealth, which is my passion as well.

I am so excited for the next several years. So let me make sure I understand the path that led you to City. You were at Bank one, yeah, right, and if I recall correct, they were required by JP Morgan, So that's how you ended up at JP Morgan. Then Credit Swiss, that's right, what led you to go from Credit Swiss to City. So each part of my career, I would say, is it's something I learned a lot. I experienced a lot um so it's like different building blocks.

But the Bank one JP Morgan days, that was out in Chicago, So I worked out in Chicago. That was when. It's a very fun town. I have a soft spot for Chicago. The food. We could talk about the food first. I'm in Chicago every year for Thanksgiving, so it's Turkey is just where we start. Then it's yeah, we gotta yeah, we definitely need to get into pizza. I'm a Luma Natis girl. I don't know how i could go Mill Natis or Eduardo's. I'm very I'm very New York, open

mind people, opportunity, there we go. But so in Chicago, it was a really interesting time because if you remember, that's when Jamie Diamond was running bank, right, so talk about a flat organization, someone who at that moment in time was truly a rising star, and he was very accessible, spent a lot of time. I always remember him being like very client centric, very very client centric. So if it was a client of the firm, um making himself accessible,

making himself available to close those transactions. And so obviously the rest is history. In terms of JPMorgan I'm a big fan. Though I'm a big fan, I know it's a compeating it's a competing bank. He's a phenomenal leader. How do you not appreciate a person who steps into that role through the takeover and just basically revitalizes the whole organization, who was a very impressive career And I admire him a lot and and everything that that he's done and so I think then like the transition in

my own career. Right, So when we were going through all of those transitions with JP Morgan acquiring Bank One, you know, one of the downsides to that talking about you know, our our fondness of the city of Chicago is a lot of jobs moved to New York, Right, So a lot of UM what was kind of that big bank that was like one of the last banks in Chicago and trading floors and things like that. I'm

talking about diversified financial services. Obviously we weren't going to have two of everything, and we we had to to move that to New York. And so with that experience moving to New York, I did move to to credit suite and really that was to flex a slightly different muscle in the job. There was building out the Latin American business UM selling derivatives, structured products UM to Latin American UM banks and broker dealer. So let me stop

you right there. You have a background undergraduate your economics degree from Notre Dame, but you were dual major Spanish language and literature degree. How useful was that in Latin America? Like, how did you end up in finance Spanish language and literature. It was incredibly useful and it's still useful to this day. So I am a fluent Spanish speaker. I lived in Spain,

I lived in Mexico, my husband's from Mexico. Um so I speak Spanish and my personal life, I've I've used it in my professional life, and so when I was covering Latin America, I will say it was a competitive advantage in which everybody speaks English, but you show up speaking the local language. I have to think that's well received.

It is well received, and I think Americans have have a reputation for not being multi lingual, for not speaking another language, and you know, working at a global bank like city where we're constantly interacting with people from around the globe, and you see how many other languages are our colleagues speak. But at that moment in time, really kind of focusing on Latin America and then going in region, going down to Miami, being able to have meetings in Spanish.

And one thing that I did have to learn though, is I so while I was fluent in Spanish, I wasn't fluent in let's call it financial language. And so you start to learn things like well, so, how do you say call option? How do you say so? As I was like chating with different people are communicating with different people on on Bloomberg, let's say I would, then you know what word are they saying? What does that

mean in terms of financial slang. So it was really fun because it developed that part of my language skills. But most importantly it was great because, like the client base was different, their risk appetite was different. And one of the things that I learned is, you know, the difference when you look at a US average let's say wealth client versus someone who grew up in Latin America.

Someone who grew up in Latin America has and I'm just saying on average, right, this isn't a generalization, but they have a higher risk tolerance, they've seen hyper inflationary environments, um, they understand currencies, and so when you think of the area that I was very passionate about in derivatives, there's a natural understanding just by growing up in an economy like that that interest rate risk matters, f X risk matters,

commodity risk matters, and so inflation really can impact, right, can severely impact you were net worth, and so it was almost like this client base grew up with a natural understanding of derivatives and markets, even though maybe they didn't recognize that it was derivatives. But there is such an easy and it was very facile because of what they lived through. So it was definitely an advantage. But then when I ran capital markets UM in North America

and Latin America. UM, you can ask many of my colleagues if the dominant language is Spanish, we have meetings in Spanish if it's a one on one meeting, and you find you know, people's personalities can be different in different languages. Their sense of humor, for sure, can be different. And so it's been a great experience. So let me flip that on its head. The concept of being more

risk embracing, more aware of inflation, currencies, etcetera. Here in the US, how complacent are we because the dollar is the reserve currency of the world. We don't think about currencies. We don't usually think about inflation, except since the pandemic. I haven't thought about it int years. It was a little spike pre financial crisis, but for the most part it's been a deflationary environment. How does working in North America with a client base that doesn't have those same

sort of sensitivities. How different is that than Latin America.

So I would say there's a couple of things that are really important from a and i'll say US perspective, right, So from a US perspective, um, how you hold your assets is just as important as what you hold, right, So the ship or meaning custodians of course, like in terms of of counterparty, but also thinking of like your wealth planning and the structure of your assets, um, the trusts that are available to you, how you want to think about trust and estate planning, and so within the

U s there's a big focus on how do we optimize for tax efficiency too? And so what you'll notice is, you know, I think there's almost this thought process that everyone wants to be an active trader, And what you realize is, yes, there are people who are sincerely interested in gets and they follow them and they're passionate about them, but they're also really concerned about the after tax impact of what they're doing and how they're investing. So I

think that's a piece of it. I think your average US investor aware of interest rates, right, So aware of interest rates in terms of what am I earning on my deposits, kind of what are the average yields an investment grade debt and understanding mortgage rates and and the impact in terms of liabilities f X is almost absent to a large degree, right for the the average investor.

That being said, like I mentioned earlier, we're a global bank, and so like one of the major advantages we have is bringing those international opportunities to our clients, to investors and making sure that we're not we don't suffer from that home bias in terms of how we're allocating capital. And so that's an area where you can then combine all of these things that I've that I've talked about. You know, what regional exposures do you want? Where do

you see opportunity? And do you want to take on that currency risk or do you not? And so it's a little bit of an educational process. But but it's different, right, It's different wealth regimes, it's different tax regimes, and so a lot of that will drive the decision making process as well. So let's stay in the US and stay with structures and how you hold assets. What sort of an appetite do you see amongst your clients for traditional

alternatives like hedge funds, venture capital, and private equity. It's interesting because that's something that has changed substantially over the past let's say, even twelve months. It feels like, Yeah, I think there's a little bit of a shift going on, and I think you have to separate out if we think of alternatives, maybe in three different buckets, private equity and I'll put private credit in there as well, private

equity credit, real estate, and then hedge funds. We've seen strong, strong demand pretty consistently for building out alternatives portfolios, particularly when it comes to opportunities with great financial sponsors on

the private equity side. Looking at these long term secular trends, right, and I think one of the interesting trends that we seen year to date is really while people have been conservatively positioned, really kind of shocked by the start of the year that we've had one of the worst ones on record when we look at both equities and fixed income being in tandem, down over ten percent exactly exactly,

so pretty intense start of the year. But we're clients were consistently allocating capital was in private markets, and I think, you know, part of that is this ability to take a long term view. Right, So short term we know some of these changes that we're going through, we're nervous about what the fed's trajectory is going to be. I think Friday may have cleared that up a little bit in Jackson Hole. However, you know what happens next year, right,

so what happens next year? But being able to take a view out five, seven, ten years much easier. So I think that those flows into private equity in particular have remained really strong. So let's talk about that. Because a year ago, the FED wizard zero. You couldn't get yield anywhere except for play is like private equity and structured credit and structured notes, etcetera, etcetera. Now was the tenure we're recording this, it's quarter or something like that,

and you can get yield. And if we want to look at Muni's on a on a tax adjusted basis digits depending upon your state, it's almost respectable. Right, So what do you think that's gonna do? And I don't like to ask people for predictions and forecasts, but you're looking at the flows and you get client questions all the time. Do you think that we've had this amazing run in structured products and private equity because yields were so low. Now that yields are higher, what might that

do to demand for those products. So what we've seen is that absolutely bonds are back. So thinking through what was not in vogue last year or the year before, and this was our advice to in terms of UM advising our clients is you know, have and overweight exposure to fix income just didn't make sense over the past couple of years. You're you're talking what you mean at the end of a forty year bowl marketing bonds? You don't want to be overweight. You don't want to be overweight.

And when you know of the world's government dead is negative yielding UM, you know, maybe not exactly the best, which actually created some really difficult, difficult situations for those who were retiring right and those that market was really tough because you're like, wait, I need to be overweight equities to get the returns that I'm looking for, but you know, traditional investment advice is telling me I should pull back on some of that risk. So that created

some interesting dynamics. But I think this year what we're seeing is on the private equity alternative side, it's really playing that long game. So that ability to kind of see longer term and what I think is going to really have some legs and separate the noise short term is are we going to have a recession? Are we

not going to have a recession. When it comes to fix income, though, we're seeing now all of a sudden, you went from a situation where your cash was yielding nothing right, and and now you're even looking at whether it's short duration, intermediate duration, you're now looking at yields that are mid single digits right on investment grade. And so what we've seen is it doesn't completely combat, right, it doesn't entirely combat that impact of inflation if we're

staying around eight and a half percent. But for someone who's been sitting overweight cash and getting to marginally better outcomes. You brought up Munis, which is an excellent example as well. You're getting marginally better outcomes on a you know, pre tax equivalent basis looking at high single digits depending upon what state you reside in. And so all of a sudden, that became an easier path versus looking at some of

the more traditional true risk assets. The one thing that I will mention since you brought up structured products as well, that's an interesting part of the market that if we think about the past ten years, right, So the past ten years, and this is someone who's worked in derivatives and structured products for quite some time. Um, yes, they've gained in popularity, but there was also a little bit of a concept. We're in, you know, uh long term

secular bull market. Everything's going up, right, So this idea of customizing my risk return profile, Well, when you think of the components of a traditional structured note, you have, you know, a bond and then some underlying options. Now that rates are higher, that bond is giving you more value. And when we see these spikes and volatility, a lot

of those strategies tend to be short volatility. And so now you've created this environment where the market environment is giving you the ability to use strategies where you can earn high single digit yields with some downside protection. And you're saying, look, if the market pulls back another ten I'll buy in at that level and in the meantime, I'm getting paid to wait. So I think even people who question those strategies historically looking at I can go

into an e t F. Everything's going up. I can kind of play some of the momentum now saying, you know, where where do I really want to allocate capital? And I understand that there's a lot of risks. There's a lot of data points that we're waiting on. There's a lot that we need to wait on for earnings. And the impact that this this tightening, right, this tightening that both in terms of rate hikes and quantitative tightening is

going to have on companies and consumers alike. I think it's actually opened up a really nice market and place in the portfolio for those strategies. Let's talk a little bit about inflation. You mentioned eight and a half percent inflation rate. It seems like when we look around the world, a lot of that inflation is peak and past us. We look at the Baltic dry Index and gas prices and oil prices, and go down the list of commodities that seemed to be coming down in price, home sales declining,

although rents remain high. Let's start talking about where we are in this rate tightening cycle. What was your takeaway from the Jackson Hole Festival of Speeches and and Jerome Pals. It's kind of surprising that anybody thinks, um, he didn't communicate what was happening. But it seems like the market

was taken a little by surprise. Don't you think there's a debate though, So I think there's this question around what we want the FED to do, what we think the Fed should do, versus what they're telling us they're going to do. Right, so I think that Chair Pal has been very clear in terms of what they're going

to do over the summer months. We got that rally off the June lows, and you know, some of it was kind of peak Barrish positioning, some of the abatement, like you mentioned in terms of commodity prices in particularly with gasoline, and then Q two earnings were pretty resilient, right. We thought inflation was going to impact a lot more

than it did. There are a lot of surprises in terms of top line revenue growth, and so then I think what happened was we started sneaking in these narratives the market did about you know, maybe there's a FED pivot, maybe the Fed will be devish. We didn't see that.

At City Global Wealth. We did not see any signs that the FED was going to change course, and so I think in Jackson Hole, that very short, very deliberate speech was one where it was make no mistake about the fact that we are going to continue to tighten that inflation expectations will not out of control yet, but at a level of you know, two and a quarter or two and a half looking far out, we need to bring them down to two. And our job is not yet done. We need to make sure that we're

taking that action. I think the other interesting thing too, that may have been one of the catalysts for the volatility that we saw on on Friday and Monday was really this lack of mentioning a soft landing. Chair Pal in his past couple of speeches and public comments always said that a soft landing was possible here that was absent. So it was much more about invoking Vulker and also just looking at this is going to create some pain,

and he admitted that. So I think their trajectory is very clear through the rest of this year in terms of the tightening path that they're on. I think fifty plus seventy five plus seventy five plus whatever happens September, that's the end. Of the soft landing. He's telling you we're gonna really throttle back in order to make sure we can get the toothpaste back in the tube. But

that leads to an interesting question. We're talking about narratives and what we hope there's a little bit of wishful thinking going on. But you know, my perspective has been the FED was late to start raising rates. At the very least, they should have gotten off their emergency footing sooner. It looks like now they're late to recognize the peak and inflation, and they probably don't have to do a whole lot more. Are they going to be causing unnecessary pain?

Have have they already won? Can they declare victory and go home? Or are they gonna just keep pounding away? Uh? And either cause a mild recession perhaps something worse. Yeah, And I think that's one of the challenges in terms of you know, this is where economics degrees really come in handy in terms of breaking down all of these these data points. But they were very specific that their

goal was, you know, headline inflation. We all talked about the demand side of the equation, the supply side, what's in their control, what's out of their control, and Chair Pal again was very very direct in terms of note, the whole thing is our mandate, right, so whether it's supply side, demand side, we need to make sure that we get this under control. So obviously we're seeing some relief in the commodity sector, but more broadly, it's you know, whether or not how quickly are we going to see

that number come down? And even if it's at let's say six and a half six percent by your end, that's nowhere close right to their ultimate target. And so continuing on this path, I think the challenge that the FEDS in is when you think of tightening financial conditions, we don't see the full impact of that until out probably twelve eighteen months, right, So there is this concept of what they're doing now is not really going to flow through to everyone, both the consumer as well as

corporations until several months out. And so what does that mean for consumer spending? What does that mean for all of the decisions that the consumer is making, which drives of the the U S economy? And what does it mean for corporations as they're making decisions? And so in Q two we heard a lot that recession wasn't the base case, but they're they're planning. I think it's going to be really fascinating. I think we're going to pivot from I shouldn't use that term pivot become a dirty word.

I think we're going to change the dialogue from what was obsessive about the FED and debate about what they're going to do and what is the terminal FED funds rate?

To now obsession about earnings. And I think we're really going to focus on where are we seeing that squeeze, where are we seeing that change in consumer spending patterns, how are companies preparing for this, and what companies are well prepared for what is going to be We say, don't fight the FED, and it's easy monetary conditions, maybe we shouldn't fight the FED when it's very clearly tighter financially. So you raise a whole bunch of really interesting points

I want to pin you down on. First. Do investors pay too much attention to the FED? Do they obsess when really they should be looking past it a year out? It's hard to say that definitively right. Because interest rates are important, liquidity is important. The concept of a FED put was really important in terms of the overall directions, so it absolutely impacts the economy and markets. I think paying too much attention to the day over day moves

is something and this is interesting Verry. I think this is something that we actually saw starting with COVID, once we've shifted to that work from home, stay at home and just massive spike and volatility, massive movements in the market. I think we've gotten into a little bit paying a lot of attention to day over day movements, what does this day mean? And even if we take you know, the summer months, liquidity is like people are on vacation, you know, credence to one day and really trying to

take that view. It doesn't need to be out five years, but trying to take that view out several months. And so I think we're seeing a lot of investors really hanging on the word of every speech, every day, daily report. And I think on average, yep, we're going to have jobs reports that are important, We're gonna have cp I

and prints that are important. But really it's the amalgamation of all of these things that's going to determine how severe the recession is and the ultimate trajectory of markets from here, going from zero percentage of strate to four percentage of st rate obviously important, but it feels like every CPI report it hits the tape and then people are already talking about the following month, where you know, in in July, it's like, is this going to be

the peak? It was barely crossing the tape, and then suddenly August and September, chef, and we're going to see the same thing happen in September as soon as we get that print, people and to stop talking about October. The next question that you alluded to, which is really interesting about revenue you and profits, how solid and inflation

hedge our equities. Revenues seem to be unaffected. Profits have been pretty strong, and companies have shown a pretty solid ability to pass along UH input costs to their to ultimately to the consumer. Do we should we be looking at stocks as an inflation hedge? Yeah, so I think this is to your earlier question about US investors thinking

through some of these risks. Inflation really hasn't been a risk that we've had to think about for quite some time, right, so obviously absent the seventies and eighties, thinking of this level of inflation is not someone someone's had to think about and the idea of what is the real real rate of return? What is the real interest rate on this?

And so if you were someone who was sitting in cash, let's say from like two thousand to two thousand ten, you were earning on a real basis about three percent per annum, not knocking it out of the park, but

not terrible. And the market when essentially didn't get above two thou us until exactly And so I think that now looking at this past decade, where you've seen that impact and now you're just seeing it front and center in terms of eight and a half percent, is extreme and in terms of what that means from a spending standpoint as well as what it means from an investment standpoint. And so this becomes the question around how do I create, depending upon how I'm currently positioned, how do I create

better outcomes? So if you're someone who has been hiding a little bit in cash, maybe overweight cash for not just the past two years, but the past ten years, that's that conversation. But how do we get to marginally better outcomes? How do we add things like COMMUNI bonds, how do we add things even like preferreds in terms of some of the yields that we're seeing in preferreds

for investors. Because I recognize that, Barry, if we're thinking of, like what are the best hedges against inflation, well, if we go through the highest beta, it's almost like you can break it down as commodities direct commodity exposure. A lot of individual investors are not going to take that on, so then you're looking at commodity stocks. Are there opportunities

within energy commodity stocks. We actually had positions within commodity stocks um for a period of time as a hedge as a portion of the portfolio, not as a directional that at all, but we we pulled back on those positions just given some of the turnover that we've seen, particularly with the giant spike from last year plus once the invasion in Ukraine started in February, hedging right like, you needed that hedging because it wasn't just impacting energy,

was impacting food, it was impacting natural resources. We saw that concentrated exposure right with the the stats that came out that of the world's wheat production, and you saw these were coming out of Russia and the Ukraine. Things we never never knew before. And so getting to your question about equities, were were positioned right now? Equities absolutely can conserve um um an important part in the portfolio.

But given the concerns that I have as to where the US is right now, US equities we're not pricing in a recession right now, We're not pricing in a meaningful earnings contraction or tightening financial conditions impacting companies, and so we're we're invested is in quality in um. If you look at like the Spend Aristocrats Index, you're talking about companies, not high dividend pairs, but companies that have been able to consistently grow to their dividends, consistently grow

their earnings. And so looking at the yields on that around three three and a half percent, and diversification across sectors like healthcare, even info tech is in there because you know, you have some infotech companies that are now durable demand. That's the part of the market we're from an equity standpoint, we're very comfortable maintaining that exposure. So

you said something there that I'm intrigued by. Do you believe markets are pricing in a recession or a market's just pricing in a slowdown of the growth, a little bit of the FED having some bite, but not necessarily causing a full blown traction. I don't think they're pricing in a recession or earnings contraction right now. I'm not saying that we're going to see substantial downside from here. There's a lot of debates right about what are we going to retest those lows? So so let's put put

a little framework on what we're talking about. If people are listening to this in the future. Um, it's late in the summer in markets sold off, recovered about half of those losses, then gave a little bit of that back after Jackson Hole, so down ten or so on

the SMP. Not really pricing in a hole. And when you look at those analyzes of recessionary bear markets versus non recessionary bear markets, it's a huge difference both in terms of the duration, right so you tend to see recessionary and it depends on what data points you use, but again on its duration, it's a big difference. Where you see, you know, the duration in non recessionary bear markets on average about a hundred eight days maybe max.

Some of those max observations around two right, so well under well under a year where recessionary bear markets are four hundred, So that that's a that's a big difference. And also the draw downs if we're using US equities, non recessionary bear markets down around so yea, we may have done that work, but recessionary bear markets can be an excess of thirty percent and even closer to depending

upon what data set you're using. So it is very different when companies are making tough decisions about where they're investing, right, and how they're investing, and how that impacts obviously wages, employment, et cetera. So what we've seen with the you know, the two negative quarters of GDP growth, a lot of people say, well, that's a technical recession, and then again all of our economic students are like, no, there's the National Buro of Economic Research and this is how it's calculated.

But we're looking at that in terms of you'd have to some significant increase in the unemployment rate and you're going to have to see that earnings contraction. And so do we anticipate here's here's I'm gonna I'm gonna share some positive news, right, So that was that was very cautionary. But I think one of the positive things is we haven't had a recession that has been this anticipated either, so whether the markets pricing it in or not, consumers

are planning for it, corporations are planning for it. This is not something that's coming out of left field. The FED is clear about their trajectory. So in terms of taking some of those decisions and mitigating the depth and duration of that. Recessions are painful, right, but the depth and duration of that economic pain, hopefully that can be mitigated. Let's stick with that, because that's really interesting. I'm gonna preface what I'm gonna ask you with with a caveat,

so heading into there's surely we're pockets of froth. Crypto had gone, ballistic technology had exploded. Anytime the smpup. Hey, there's probably a little bit of speculation going on. But given all that, the first half of this year, the data and just the general field wasn't like consumers and companies were leaning too far out over their skis. Everybody's balance sheets were pretty clean. They had refinanced at very low rates. It looked like both the household and the

business sector. Hey, if things slow down they're pretty well prepared for this, or am I oversimplified? I think you're right. I think you're absolutely right that on average, the average company, average consumer came into this year in pretty good shape. Right. Their balance sheets were very strong. I'm saying they're both across companies and consumers. They were able to take advantage of the low interest rate environment to really kind of

clean up liabilities. And so I think that we came into this year prepared, um from a balance sheet perspective, not prepared for what was then going to transpire. Yeah, in terms of not only that quick movement and interest rates. Remember in January that was the story, the kind of very quick movement and interest rates, and then obviously geopolitics and Russia's war in the Ukraine um really exacerbating some

of those supply shocks. And so I just think that those types of risks and the overall prospect of what that means from a recession standpoint, it's better to be in that position, right, is better to be in that position. We're coming into it from a place of strength, and you are starting to see some cracks, right, So let's talk about the cracks inventories building, right, That's that's probably from hey, we can't get anything, let's just get everything.

Now we're seeing a massive inventory build. We're seeing housing starts come down. We're seeing just the time right that homes are on the market and extending. You're starting to see that. But that's also good in terms of showing some of that froth being taken out of the the economy and and some of that that slowed down. I think some of the things that we need to keep an eye on just from a the impact of the

FEDS tightening is a couple of things. One, we also saw record number of credit card openings and Q one and Q two, and so some of the stats um that we've seen. Q one of this year was a record number two million new credit card issuances. And so on one hand, people like consumers are continuing to spend YEP, they're continuing to spend. We're reaching pre pandemic levels in terms of balances on credit cards. We're not going above that,

we're just pre pandemic level relative to income. It's you know that always people always show you the debt, but they sometimes fail to show you what does the debt look like relative to discretionary income? That's a really good levels and a very good levels. But when you see so it's interesting because then you see these trends. Okay,

we're opening more and more credit cards. Okay, interesting, how are people than spending Previously it was stimulus, right, there was stimulus fueling the economy, and now it's okay, now I'm buying on credit. That's not the end of the world, right, that is access to capital. But when we see those balances increase, and now they're increasing at higher interest rates, that's something that we want to watch and keep an

eye on. And obviously in Q two a lot of financials reported and they talked about lone loss reserves very well in check, very healthy, and so I think that's a trend that we need to keep on eye on. The same thing when it comes to corporations. Right, so when we think about credit spreads in the market, and we look at high yield spreads, we look at we

haven't really seen that widen out. And if that does widen out, right, it's widened a little bit buried, to be fair, but it hasn't really to this level of Okay, we're really going to see companies stretched. Those are some areas that could create some continued pain in the market. So you sit in a really unique perch, your reference to all of the new credit card openings. You at City also get, which is a giant credit card entity. You get to see delinquencies, delays, default, all all those

sorts of things. How do you manage to tap into that huge amount of data that you have? Can you crunch those numbers and use it for your own benefit? Because who better than someone at one of the nation's biggest credit card issuers to look at those numbers and say, hey, what are we seeing internally before it hits BLS or

commerce department. Yeah, so any data that we have obviously as a large financial yeah, large financial institution, there's obviously walls, there's data that can be shared, data that cannot be shared, and there's a lot of protection around that. However, when we look at things like like flows, right, and we can see average cash balances that our clients have, are they building cash balances? Are they taking more risk in

the market? So all of those trends and insights that we get from our clients are critically important in terms of the pulse of the economy as well as the markets, and so yes, we we pay a lot of attention not only to what we think right, what we think is going to happen in the economy and markets, but those signs that we're getting from our investors, what's actually occur on our clients at large exactly, And it's a

really important thing. We always think about that. On the institutional side in terms of flows, a lot of people are measuring every single day, right, But that's something that you can see within private wealth as well, and it's significant. It can move the market really interesting. So let's talk a little bit about the current environment in the past couple of years, starting with the pandemic. How did that affect clients? Did they react to the volatility? What what

sort of questions did you get? So I think we could break it down into two different parts. How did it impact us and how did it impact clients? Because at that moment in time, Barry I was running our capital markets division in the America as North America, in Latin America, and I remember March, there was no thought in our mind that we were going to work from home,

working on a trading floor, trading desk. This idea that you were going to somehow mobilize and be able to take an organization of dozens of people and somehow figure out how to work from home. Um. So I was one of those people that definitely left kicking and screaming, eyes like I can stay here, I can still work from here. I remember someone saying, don't worry, it'll be a week or two, you'll be back in the We all thought that, right, We we all thought that it

was maybe a month, maybe three months max. And so um, but we did it right. We had to. We were doing at that moment in time at City. We had the contingency plans, we had people working on different days and continuity of business sites. And then we got the phone call that no, we need to find a way to move everyone to work from home and that that

continuity that was all set up post nine eleven. I think a lot of people don't realize one of the few good things that had come out of our you know, closing of the stock markets for a week, and everybody realized, oh, we have to have a plan being in case something like this ever happens again. We have different sites exactly. So we have one in New Jersey where we can recreate and it's part of your job, right, you do the continuity of business testing, and so that was helpful.

But then it was you know what, we need to have everyone work from home, and so it was um a mad rush to be able to make that happen. And I think we all learned a lot about our technology.

We learned a lot about phone lines, phone lines, and and how to to make sure that every call was going to be answered because you couple not only that with one of the most volatile markets in history, and so you're like, the one thing that we can't fail to do is help our clients if they need to get out of risk, if they need to sell, we want to make sure that we're able to answer those

calls and help them out. And so we were very fortunate. Um, looking back on it, I think everyone has those surreal experiences, right that you don't even know how many hours you worked or what was happening, or your kids doing virtual school next to you while you're trying to manage this, And so I think we we really helped our clients through that that period of time because this wasn't like any other market correction, right, this was a once in

a hundred year pandemic down less than six weeks. You've never seen anything like that before. We never is the closest thing, and that was really more plumbing than anything. And so one of the things that we did um

was we started communicating more frequently with our clients. And so our chief investment officer and our chief investment strategist we all got together and decided that this was something we need to communicate to our clients every week as to what's going on, and so we continue to do this to this day. We we published once a week breaking down what's happened in the markets, what's happened in the economy, how people should be thinking about their portfolios.

And then we do a weekly webcast every Thursday say things. Some people they like to read it, some people liked the live interaction, but people were craving that information. How should I think about this? How should I think about what's next? And so that frequency of communication and having that access to information and how to think about how you should be positioned and staying the course right, because

that's the most difficult challenge. And when you see those severe drawdowns human psychology and all of our heuristic biases right that come into play. As you're seeing the market tank, it is very hard to stay invested. What about the flip side of that? Starting in April, the market begins to recover and takes off. Were you getting phone calls from clients saying, Hey, what's going on? This doesn't make any sense? Everything around me is closed? How can the

market be rallying? Absolutely? And then you know some of the calls that we had about adding to home builders, thinking about human behavior and how it was going to change, and I remember when we added some of those exposures to the portfolio. The knee jerk was that reaction was really you crazy, really like who's who's buying a house right now? Like we're in a pandemic, and it's like, well, actually everyone people want to get the hell out. Everyone

want to get out of apartments. Everyone wants to which is so intuitive now. But we became a lot more tactical with some of our allocations. Of course we have strategic asset allocations, strategic portfolios, but to really take advantage of some of these movements because it was it was intense, right and it continues to be intense in terms of

navigating these markets. And so we became a lot more nimble and a lot more opportunistic in some of our investments, and so it really increased I will say, I think one of the surprises to us was it only made our client relationship stronger. You would think that this very personal business of your constantly visiting clients, You're meeting in

their homes, you get to know their families. The pandemic created a need to understand markets better, the economy better, the global economy better, all of these different dynamics, and having like a go to advise and someone who was accessible pretty much because we're all we're all working from home and living, yeah, trying to stay healthy and taking care of our families and and and so I actually

think it's strengthened a lot of the relationships. Um. It was a way for us to actually when we see look at our new client acquisition statistics, when we look at our a U M growth, we actually brought in a lot of assets. And so you know, hopefully that's a testament to how we were advising our clients through that time, the frequency, the accessibility, and and their trusting us to continue to do that going forward. So you have this rally off of the lows in the pandemic.

Then the calendar flips and its one. Not only does it not slow down, it accelerates. What were you hearing from clients the following year, Yeah, so was dominated by this concept of COVID defensives, COVID cyclicals, Right, who are the winners and losers when it comes to being work from home state? Yeah, you saw that whole thing of like stay at home versus leave your home. Right, So that was what really dominated, and it continued to dominate.

And one of the questions that we were asking ourselves is you did see particularly within the hyper growth part of the market, right, hyper growth? And you know, I think it's unfair we tend to talk about technology very broadly as though it's you know, all one thing and all the same. It's very different and the subsectors are

very different. But I think one way to slice and dice it is looking at, Okay, you have some technology companies that have durable demand, right, you can put them in that bucket of dividend growers, durable demand um quality companies. And then you have hyper growth companies that, you know, the way that their stocks trade is almost like a call option on an unknown future. Right, So just like a coll option premium is going to have a lot more volatility than you would see in a stock price,

you see similar behavior. And I think the momentum that we saw in the pandemic and coming out of the pandemic, a lot of hyper growth benefited from that. And so one of the changes that we made to our portfolios probably in Q three Q four of last year, was this idea, Okay, there's going to be this shift. We're no longer going to have this dominance of COVID cyclicals,

COVID defensives, and where we should be invested. But this is going to be a question of what's going to do well in a rising rate environment, how are we how do we want to be positioned in a rising rate environment? What companies can withstand inflationary pressures? Which was really our shift in our portfolios away from some of those hyper growth technology companies and then into more quality. So let's stay with that because that's really an interesting

distinction heading into two. Sure, the broad market sold off and we were down twenty or so percent, but when you look at the hyper grows, when you look at the high flyers, some of these got shall lacked forty fifty six or worse. What do you do when clients call up who are sitting in those sorts of things? How do you manage that? I think finding so for for clients who are sitting in individual stocks and looking at okay, I am you know, part of that experience

where these positions are down fifty six. To be fair, they had a giant run the past, had a massive run exactly, and so you look at it net net obviously that that's an important part of that equation. But I think breaking it down into are we talking about a profitable company? Are we talking about that call option on an unknown future, or are we talking about there's a clear path to profitability. I think there's a misunderstanding sometimes in the market that you know, just because something

is sold off substantially, it has to go up. You know. There there's a number of analyzes out there where it talks about stocks that are trading, you know, eighty percent off their all time highs, and you really look back at it and people think that happened last year or the year before. It could have happened twenty years ago. There are still stocks that are trading significantly off. So not everything that goes down must go up, So I think it it is a function of understand ending that

we are in a tightening financial conditions environment. Don't fight the FED, right, don't fight that FED, and and try to determine is this something I'm willing to hold long term because I see that path to profitability or is this something where I don't see it and we could see continued volatility or continued So that's the question about

the other side of the recession. Are you buying things in two especially that you're comfortable riding up and down until we come out of whatever takes place in twenty three and twenty four precisely So at the like I, like I mentioned Q three, Q four of last year, we started to make some of these portfolio changes on the equity side. This year we came into the year UM underweight fix income like most people right anticipating UM

rising rates. We added fix income exposure again quality fixingcome exposure, looking at Muni's investment grade preferred really once that tenure the tenure crossover three for the first time, that was an area where we said, all right, are we going to see peak inflation? Are we going to see peak rates in this year probably, and so we became very

comfortable adding that exposure. And now when you think of what we were talking about earlier, this debate of are we going to see some resiliency here or we're going to tip over into a recession and preparing your portfolio for both of those things, I think patients is a virtue in this market, not chasing some of these rallies that we see, but being very comfortable with those exposures, both across equities, fixing come and as we were talking

about earlier private markets as well, so what you're really describing our portfolios that are robust, resilient and can ride out at downtown. And when you even go back to really difficult times like the nineteen seventies and you say, okay, well what happened to large cap quality shares during that period of time? They were able to double their share prices. Right, So even when you start analyzing companies about durable demand, are acknowledging that we're going to be it doesn't mean

I I view tightening financial conditions. It's very similar to a climbing a mountain. Right, if you have a heavier load, it's going to take you longer. Right, it doesn't mean you can't climb the mountain. That's what corporations are faced with, that's what consumers are faced with, and so putting your capital in those areas and then if we do tip over into that recessionary environment, that fixed income portion of

the portfolio is going to do well. Right, So the anticipation in terms of raids coming down, flight to quality is a balance and a diversifier in the portfolio that, as we were talking about, previously didn't make sense when we were dealing with negative yielding dead but now now

makes sense. Right, you get some ballast at three and a quarter three and a half that you don't really see it forgetting me negative when when yields are, you know, below one percent, how much room is there to that offset any sort of downs on and we saw that in the first half of this year. So you mentioned high net worth and ultra high net worth. I want to ask a question about family offices, which seemed to

be sort of their own specific category of investors. Do they approach markets like this similarly to high net worth investors? How is their approach different? Tell us a little bit about what your experiences are with that group. Sure, So with family offices, I think the interesting thing is we try to view them as one client segment. It's not

the case at all. So well, there's a big difference between a fifty million dollar office and a five million dollar absolutely, and and not every family office is a little bit different in terms of what they're dealing with, how the wealth was created, the existing assets. And so we're very fortunate we work with over a quarter of the world's billionaires, we have experience working with family offices.

We actually have a dedicated global family office team, and we do a lot of research in this area and we provide a lot of information both in terms of networking opportunities for family offices as well as family offices recognizing kind of their own benchmarking, right, so data around what are other family offices doing, how are they set up, what is they're staffing, what are the roles of the different people on on staff, and so um. We spend a lot of time with this client segment. With the

acknowledgment that family offices are markedly different. I think it all goes back to the size, as you mentioned, right, So the size and amount of capital can greatly change the way that the family office is structured. And then it's also how the wealth was generated. Sometimes it's within our industry. Sometimes it was within hedge funds, for example, whether there's an asset that's a non negotiable, we're not

selling this asset. So someone who started an amazing company right still is on the board, owns a big chunk of their wealth and a concentrated stock position, and then it's like, what are we doing around that? Right? Because we're not touching this, I still remain active in the company. And so I would say each family office is different. We work with institutional family offices that tend to, you know, trade more actively. They're looking for opportunities that are very

similar to our institution client base. We we partner with other family offices exactly what we're talking about, right, So, how should we think about liquidity, how should we think

about the markets? No asset classes off limits? And then you know, there's there's certain family offices that we're seeing nowadays especially that have very precise mandates right where you see where you see mandates that are heavily weighted towards private markets, mandates that are heavily weighted towards sustainable investing

or impact investing. So that's something that's really come out over the past several years where the mandate is not just about investments and asset classes, but actually thinking through the full journey of the principle and what they want to do, both from an investment standpoint as well as a philanthropic standpoint reflecting their values. So let's I'm glad you brought that up, because we haven't talked about that.

There's been a lot of political pushback to E s G and that's sort of investing, but it sounds like the investors themselves, at least a portion of them, are asking for that. How do you balance the two or

do you just ignore the political noise. When you look at the growth rates overall of sustainable investing versus just broad broad based wealth right and wealth growth and and assets coming into traditional let's say traditional investing, the anticipated growth rate is anywhere from three to five times higher and sustainable investing over the next five years. Huge, it's really significant. Um, we're talking about, you know, trillions of

dollars coming into this space. And so I think the important thing is really from an education standpoint, right, So this is partially about what's happened within the industry, and it's partially about what is the desire of the investor. What's happened in the industry is a massive proliferation of products, right, but there is a scale, right, how we've evolved over time.

You could say sustainable investing originally came, right, it came from exclusionary, I don't want to invest in certain things, and then it's become okay, maybe more broad based in terms of some of the criteria and then looking at really making an impact, right, so both a return financially and being able to measure the impact the trends that we're seeing in this space that are much more personalized.

So where you see that higher kind of five times growth rate is really more on the line of I want thematic, I want things that are personalized to what I want to do. And it's no longer. And this is where a lot of people get confused. It's not about philanthropy, right, So philanthropy is something entirely different. This is about where am I investing capital that is then aligned to my values and it's not concessionaire. It's not about taking inferior returns. It's about creating that mandate and

being very specific about it. So the ability to be able to customize that and personalize that is something that's going to be significant for wealth managers going forward. So last question on this topic and then we'll get to

our favorite questions. Some of the studies I've seen have mentioned that when it comes to sustainable investing or impact investing UM, the younger generation embraces it much more wholeheartedly than do the boomers or or younger than them, And the boomers are really on the verge of a multi trillion dollar generational wealth transfer. Is part of that, underlying that big change in growth of for sustainable investing. Absolutely, I think there's demographics, there's trends UM. You even see

that in gen Z Right. It's it's about passion and purpose, right, It's it's not just about where you're investing, but what is my career? Where am I working day to day? Right? And really finding that from a from a value perspective. But I think we're also a little bit too flippant in terms of of saying the the boomers are not interested in this. I think everyone's interested in it. I really really do. I think you know, when you think about who am I giving my money to write? Who

am I giving my money to? Investing is giving your money to someone right? It is betting on someone else's ingenuity.

And so having that type of thing, if I are going to lend money to someone you know personally or invest equity in someone, I would want them to be, you know, aligned in terms of values, make sure that there are you know, a good person treating their employees well, making you know, investments in the right in in the right areas, embracing things like diversity, not just from a diversity and inclusion standpoint, but also from diversity of thought

and background and ideas, and so you know, when you think of that on a micro level and then you expand it to a macro level in terms of how you're investing, it becomes intuitive that everyone wants to do that, but do they have the time? Right? Like, do they have the time? And so that's where I do think there is a huge responsibility for wealth managers to filter

through and make sure we're not labeling certain things. And then there's a huge opportunity for wealth managers because then if you're presented with that, you understand the risk mitigation factors, you can view this as a risk mitigant, right governance. Governance is a big piece of that. Right, so better governance is less of the sort of outcome. Absolutely, and so I think it's applicable to everyone. Um. I think there's a lot more education that has to happen within

the space. There's a lot more personalization, a lot more demand for thematic investing. But this is something where it's a great opportunity to bridge what the investors really want. And also the current offerings really quite interesting. Alright, I know I only have you for a limited amount of time, so I'm going to jump to my favorite questions. I know you have young ones at home that you had to deal with during during the pandemic. What did you

do to entertain them? What sort of things was the family watching on Netflix or whatever? What were we doing during the pandemic? I mean we did, uh. We we set up makeshifts like zip lines in our house. It's an engineering feat. Um. I have two boys, So two boys. Um, they're now six and eight. Okay, So at the pandemic, they were a little yeah, they were, they were all they're still young. Um, so we were trying to find ways to burn energy, right, Um, it was for them.

I think it was Hopefully they'll remember this way. I think it was delightful for them because I travel a lot, so they've got used to, you know, me being at home cooking pancakes in the morning. Um, but what have we been watching? So two boys obviously are dominating my Netflix and any type of streaming. Uh, there's a lot of wild crats going on. Not even sure if you know this program. I have nieces and nephews. Yes, I'm familiar, Yes, yes, Um, and then I would say I had no idea how

many Avenger movies there were endless, there's millions. They just don't stop. They don't stop. Um. Godzillas a whole franchise I didn't know existed. I missed this over the past two decades. I know it's a franchise. I haven't seen any of the recent ones. You can ask me anything about that. Um. And then any of the Star Wars Mandalorian. Are they too young for Star Wars? I tried, we're not there yet. We are into the Jurassic World. We

got to see that in the theater. Um. So I you know what, I I let them lead the way. Someday they'll they'll get into two star Wars, I hope, but personally so, here's my current recommendation, which I just discovered and I don't know how I didn't know about this earlier is yellow Stone. We haven't started it yet. It is remarkable. So Kevin Costner, I mean, who doesn't love Kevin Costner? Right? Like Field of Dreams The Bodyguard. Do you remember the famous Whitney It was Robin Hood,

I mean Dances with Wolves. But this is an incredible show. There's four seasons out there. It is like Succession meets I don't there's like a Succession meets the West meets It's worth it. Check it out. Next question, you mentioned some of your mentors. Tell us who helped to shape your career. I have been so lucky that I've had

so many amazing mentors and people around me. I may flip this question a little bit, just in the sense of, like some early pieces of advice that have stuck with me, I'll mention two uh one, Um, I played tennis growing up, and and I had a great tennis coach in high school. And one of the things that she said, and I still remember this, this is like so vivid, and I tell it to myself some sometimes, because we we all

need to to check ourselves. Is She would tell the story that basically went something like this, that you know, when you're in your twenties and thirties, you're always worrying about what everyone is saying about you, and then when you get into your forties, you realize you don't really care what they're saying about you. And then when you're in your fifties and sixties, you realize they weren't talking about you in the first place. And it is so true, Barry,

it is so true. And so sometimes when you're feeling, you know, a little anxious, or you're wondering how something went or whether it was bad good, I use that also. I don't know if you play golf. Do you play golf? I play tennis. I don't play golf all right, So golf. I'm a terrible golfer, but I love to do it. And so golf I used to get really nervous playing

with clients and playing with with other people. And then I realized that advice applies to golf as well, because everyone is so obsessed with their own game, they're not paying attention to your game. So there's there's numerous ways you can apply this. The other story that I'll tell really quickly, which has carried with me is um I went to Notre Dame undergrad. One of Notre Dames very long standing, very well known presidents is is a gentleman

who passed away various years ago named Father Hesburg. So he was president of the university for thirty five years, very present, very very present. Um. He had an office on the thirteenth floor of the library. So for anyone kind of geeky you could, you could hang out with him, go into his office. He would give you, give you advice. And he had this homily during Lent, which is when Catholics generally you give up something for for lunch, you

make some type of sacrifice. And so normally you people like to give up food. They like to they like to become a vegetarian for that that period of time. And so he would tell this story that, Um, you know when he thinks about Lent, you know there are periods of time where you know, at first he thought he would give up drinking. So let's give up drinking for Lent. That's what I'm going to do. And a couple of days into it, it becomes too hard. It's too hard. So then you know what, I'm going to

give up smoking. I like to smoke cigars, so I'm going to give up smoking. But then I have a drink in my hand, and that cigar kind of seems to make sense. So that was too hard. And so then I'm thinking, instead of giving something up, why don't I do something challenging yet healthy. I'm going to start running. But then with all the smoking and drinking, there's no

way I could be a runner. And so what he said is, you know, we spend all of this time thinking about like how we're making sacrifices, what we're gonna do, And he's like, just be kind, like be aware of how you're treating other people. That's probably the most important thing to do, not just during Lent, but during any time of the year. And I think that's really applicable to your personal life, your professional life. It's like, just you know, take a moment to check yourself and just

be kind. I like it. Let's talk about books. What are some of your favorites and what are you reading right now? So I'll give you one from Spanish literature. Um so one of my favorite books of all time was written by a Spanish philosopher named Una Muno, So, a very famous Spanish philosopher. Uh. He wrote this book called San Manuelitude, which is San Manuel Saint Manuel the Good Murder, and it is effectively it's a really short story, but it is about a priest who doesn't believe in

God and kind of the impact that he has. It's it's a beautiful book. It's like really challenges a lot of things. So that's one of my all time favorite parable or is it? How how it's like a parable? Yeah, it's like a parable. Um. And so you know, at face value, you think it's an entertaining story, but there's

a lot of you know, undercurrents in it. Um. So anyone who has studied Spanish literature from Spain probably knows the author certainly and and and this book pretty well, um in terms of some of the things that I'm reading right now. So another podcast that I'm a big fan of. Have you listened to Dak Shepherd's podcasts Armchair Expert? Have you ever know? But it sounds familiar. So Dak

Shepherd actor, comedic actor. Um, he also happened to study I believe anthropology at U c l A. He does an amazing podcast right interviews people from all different walks of life, um, politicians, authors, scientists, um, you name it. And so he had a recent guest on Anna lemke Um who was a psychiatrist, and she wrote this book, Dopamine Nation, which is I'm in the middle of that.

It's really fascinating ing. It's kind of like the science of addiction, and it's not addiction in your traditional sense. It's like addiction to digital devices and some of the things that are kind of plaguing modern times right now. So I haven't finished it. I'm like square in the middle of it, and it's been a really really good read. And then the next one that I'm reading, which is

great because it's short stories, is um. David Sedaris has a new collection it's called The Best of Me that is kind of vignettes from his life and some of his best stories that he's written in the past. So I like anything we can kind of get like a little snippet and you finish it, start to finish. He and I believe his sister are both hilarious, and they are hilarious hilarious, right, I think David Sedaris. You know

those books, the books where you laugh out loud. I think you're reading like it's easy to laugh out loud you're in person. But when you're reading a book, someone who's humor comes through on a page. Insanely talented writer in my book, absolutely Our final two questions, what sort of advice would you give to a recent college grad who was interested in a career in either capital markets, derivatives or wealth management. I would say it's an amazing career,

so I would highly recommend it. I would say, you know, one piece of advice if you go into it, don't don't exclude wealth management. I think a lot of times, you know the the sexier UM analyst programs and entry level programs, everyone historically has always focused so much on investment banking and sales and trading. Don't ignore wealth management. It's a high growth rate, and it's a It's a

really interesting and rewarding part of the market. The other thing that I would say is, I think there's this habit that when you graduate from school and you get your first job, you basically have this moment you're like, I did it right. I've been planning for so long. I you know, I was building up my resume and high school so I would get into the right college. And I did well in college, and I you know, applied to various jobs and now I have this job,

and like I've done it. And so we spend you know, the big chunk of our life planning for the next phase. So approaching everything as though you're always a student, never stop planning. Always think about that, right, Like you have to do a good job at what you're doing. That's table stakes. But having this constant it can change this constant plan, like what do I want to do right in five years. So it's a great career, it's a

great industry. It's a growing area of our industry. But I think if you bring that same innovation planning drive to it, you'll be just amazed at where it takes you. And our final question, what do you know about the world of markets and investing today you wish you knew years ago when you were first getting started. So I

mean so many things, probably so many things. I would say a couple of things as I've progressed in the industry, and some of the things that I've thought about is when you get very comfortable, is when you get a little lazy and complacent, right, So this idea that one something you're you're doing it and it almost becomes at first it's really challenging, but you find yourself in that

environment where it's on autopilot pivot, right. So so find a way to either expand your responsibilities, learn something new, reach out to colleagues. And so there's just it's such a vast industry. And I think it's going back to my comment about always a student. We're always learning things, right, So I think that's one component to it. And then another thing that I'll share is this is something Jamie Ferreese, who is the former he let our Institutional Clients group.

He as a former president of City. You know, one of the things that he shared with me is I was playing a terrible golf round with him. By the way, one of one of my embarrassing golf golf rounds is I asked him a question about, you know, just thinking about his success and how he really rose through the ranks at City, and he said, you know what, one of the challenges that I have is that, you know, you reach a certain seniority level and people don't challenge

you anymore. Every idea that you have, everyone says is brilliant, and it's it's not the case. It's certainly not the case. It can't be the case. And so what he said is he's like, you know, you have to really create those opportunities and environments where people can challenge you. Right. And the second part of that is that pivoting or changing your mind is not a sign of weakness. It's

actually a sign of strength. Right, So to be able to admit that you did something wrong or that you made the wrong decision, but you're going to change that and you have an action plan. I think we tend to value things like confidence and conviction, but humility is a virtue, and I think knowing and admitting when you're wrong is actually a superpower that's way underrated. I couldn't agree more. Um, thank you, Kristen for being so generous

with your time. We have been speaking with Kristin Biddely Michelle, head of North American Investments for City Global Wealth. If you enjoy this conversation, well, be sure and check out any of the previous four hundred plus we've done over the past eight years. You can find those at iTunes, Spotify, wherever you get your favorite podcast from. We love your comments, feedback, end suggestions right to us at m IB podcast at Bloomberg dot net. Sign up from my Daily reads at

rid Halts dot com. Follow me on Twitter at rid Halts. I would be remiss if I did not thank the crack team who helps us put these conversations together each week. My audio engineer is Justin Miller Atka Val Brond is my project director. Paris Wold is my producer. Sean Russo is my head of research. I'm Barry Hults. You've been listening to Masters in Business on Bloomberg radioa