Bloomberg Audio Studios, Podcasts, Radio News. Welcome to Merin Talks Your Money, the personal finance edition of Merin Talks Money.
In these bonus.
Podcasts, we talk about the best strategies for making the most of your money. I'm meren Zumset Web and this week we're back with another installment of Bloomberg Welt's Where to Invest series. This time we're asking the real question, where to invest one million dollars? Last time it was a mere one hundred thousand, So this time we are going big up with us again Bloomberg Personal Finance and Wealth reporter Susanne Willie, who joins us from New York.
Hesusan, Hey, Maren, how are you. I'm good? Thank you.
Now listen, You've been all over the place recently. You've written this great story about how to invest a million dollars, but you've also been at a big conference for the financial advisors and wealth managers in Miami Beach.
You love Miami Beach.
You know I spent all the entire year when I was eighteen on Miami Beach. Wow, I know those are the days. Tell you about that another time. That's not for this podcast. Different different subject, different subjects. Anyway, they were in Miami Beach.
What did you hear that?
You know, I heard a lot of I didn't hear a lot of raw raw us, I guess unsurprisingly. I heard a lot about international and you will not be shocked to hear that a lot of people were talking about private markets, private capital, private equity, had a vet how to do your due diligence of private market investments, how to do your vetting of investment managers, and also you know a lot of bonds, which was sort of refreshing.
The one area I would say did get a lot of attention was that Michael Saylor of Strategy showed up all just in black, looking like some sort of you know, rock star.
That's a danger signal, just before we say anything else when people turn up all dressed in black like they are a rock star and they kind of not actually rock star.
For me, that's a that's a red flag.
It is to me too, you know. And then there was another sort of famous tech analyst for Webrish Securities who was all in like I don't know, neon colors and colorful sneakers.
And yes, what did they say?
Well, you know, they were preaching you know, the gospel of bitcoin in in crypto. There was nothing downbeat about
it at all. And actually the Michael Saylor panel got the biggest, you know, standing on the room audience, a lot of young guys in there on the beach in their you know, polos and shorts and flip flops, and he was just saying that he called bitcoin the most successful commodity and like the history of you know, mankind, and you know, a lot of superlatives like that, as you would expect when I privately talked with people at the conference, just in a bunch of little sit downs,
I would ask them this sort of silly question but like bitcoin or gold, and no one said, I know, I'm sorry, I'm sorry, Mary give a question. It was a flawed question because bitcoin is not a hedge, you know, as we know in down times in twenty twenty two.
Et cetera.
Center, So it was a flawed question. But everyone was gold and everyone was saying, you know, bitcoin maybe is a hedge in terms of like a fomo hedge, and maybe it's what they used to judge excess liquidity in the system, whereas consumer sentiment. But you know, one man, Brian Belski at a BML Capital Markets said, you know, he wouldn't even call it an asset. So there were a lot of true believers mixed in there and then a lot of more skeptical people that I spoke with.
Okay, and you mentioned that one of the people you spoke to, Emily Rowland, was a bit not that into things. Is all about it you've done, and that maybe should just hang out in high quality in the US.
Instaid she was.
I mean, she's not raw raw US large caps for sure. She's saying they seem price to perfection and that you know, when you're looking at like twenty times forward earnings, that's not exactly a screaming value. But she was also saying that, you know, she didn't feel like Europe was really Europe is a trade on sort of banks and industrials, and she was saying it's a very cyclical trade, whereas you know, the US may be sort of price for perfection, but
it has higher quality earnings. So if people are worried about like a got growth slowdown, she was saying, don't you want to be in the place with the highest quality earnings. So she was sort of the rare person to not be positive on Europe. Gabriella Santos that I talked to, who's the chief market strategist at JP Morgan Investment Management. She was very pro Europe and pro Japan based on, you know, starting valuations based on fundamental changes.
She had a really fun fact which was that since twenty twenty two, the MSCAI Europe and MSCAI Japan had outperformed the S and P five hundred if you took out Nvidia, which I thought was an interesting little factoid. And so she was just she's very positive on the fundamentals for Europe and Japan going forward.
It's interesting.
I mean, I'm thinking, just thinking, is you're speaking about what Emily Rowland said about how you should be in the highest quality companies that you can find if you're concerned about a slowdown or if you're concerned about any global.
Difficulties on certainty, et cetera.
And all I can think of when someone says something like that is Microsoft two thousand, when I think.
It fell over sixty percent in a year.
Yeah, I don't know what.
And you would have said at the beginning of two thousand, God, things are little ropy, everything's too expensive terrible stuff might happen, So I'm going to go as high quality as I can go, and you still would have lost fifty sixty.
Percent of your money in a years.
When people say that, When people give this high quality argument, I slightly think to myself, do you know what I would get out of right now?
Is that high quality stuff?
Interesting? Because too much money has raised into it already.
Yeah, that's in the price, but it's more than in the price, and that makes it not safe anymore.
I think that's a great argument. I mean, she did say that she was in the US markets more interested in mid cap stocks, saying that they're about you know, thirty percent a discount to you know, the large cap universe, and that of course they have you know, stronger balance sheets, less debt load, et cetera, et cetera than small caps, So she at least wasn't really pounding the table for large caps. She was going a little down the capital spectrum.
Still interesting, isn't it?
We better get onto the million dollars because you know, I know everyone out there is thinking, well, they have bitcoming Microsoft, But what do I do with my spare million dollars? Because that's the kind of listeners. We have Fatisan, that's the people. What do I do with my spare million?
I asked myself that all the time, all the time.
Now, what was the best What was the best answer you got this time?
Okay?
I thought the best answer is this probably one that you will like. Was Andrea Desceenso DiCenso, who is a portfolio manager and strategist at Loomis Sales, said that she would go with a sixty forty portfolio, but not as you would traditionally think of it. She would put forty percent in europe European equities if I stay forty, Yeah, the forty percent would go there, and then the sixty percent would go in a basket of global fixed income.
And the only reason she wasn't higher in European equities was because she sees such an advantage in bonds right now sort of globally. So that was interesting to me because I don't think I've talked to anyone who has put that much into European equities and a sixty forty portfolio.
Yeah, actually slipper exactly exactly.
So it's really interesting to see someone out there in the US who would like to remove not just home bias, but all home and go abroad. Although I'm interested that she thinks that fixed income is that safe in what looks to me like a inflation rising interest rate environment, I'm not sure that I would have gone sixty percent fixed income.
That is feisty too.
Yeah, she does have it in a wide it's pretty well diversified. You know some asset back yea ten percent in US and European investing, great corporate bonds, twenty in high yields, and the last twenty percent she put an emerging market corporates and sovereigns. So she's placing a pretty broad broad bed there.
Interesting And do you know what she is my favorite, by the way, you're right, And she's particularly my favorite for her alternative idea because you know, you was last. If it was a non financial thing or something a little alternative, what would you do? And she said, you know, I'd spend that money going somewhere amazing every weekend with a different friend. I just constantly cycle my friends and places. And it went to her sister. And for trip number one,
it's gonna take more than a weekend. They've got to Argentina and Chilean and hike around Patagonia, and that's something that my husband and daughter just did and I forget that is worth a lot. So this is a woman after my own heart.
Although I didn't on that trip me too, that was my favorite as well. I mean one person mentioned buying a Picasso drawing, which apparently you might be able to get for about a million bucks.
Oh goody. Yeah, I don't know. I'm a bit nervous about the art market actually.
But.
Interesting another segment.
Another it did another segment, but you know, it's another it's another thing that with high interest rates a piece of art is worth less than it is with low interest rates. And you begin there are a few cracks developing in the art market that I can see. So maybe we'll come back that another time. What else did we get? I was interested in Anne Barry who talked about public markets being expensive and therefore maybe go into into private markets. And she talks about private credit.
Yes, Anne Barry, who's the founder of thread natal Ventures. She was sort of along with another woman in the package. She was talking about areas where there have been dislocations and it's sort of interesting in this time of excess that we may be in in the US that they were talking about areas when so much money flowed into the commercial real estate markets and venture markets and due to low interest rates back in like twenty twenty one,
twenty one is between twenty two. So she was looking back and saying, you know, there are opportunities when there's a lot of pressure on PE funds to you know, exit these investments that they've had that usually hold them for five to seven years. It's getting on sort of six to eight. So she was saying there's a lot of pressure and getting these these exits happening, and that that can lead and that that can lead to some very good opportunities for private capital because all of these
deals require private capital. So you know, as the industry exits these deals, you know, there's a ton of dry powder sitting out there in global PE funds, so they have to go out and spend it, and when they do, they'll be using private credit to some degree.
Yeah, it's interesting, isn't I Mean it feels like we're in the whole industry is in a little bit of a paralysis. You know, the deal that they want to exit from the reason they can't exit from them in the main is because the price is wrong, So they need to see something of a price reset, and private credit don't have a role in that.
Yes, that's true, and I don't know with the volatility that we're seeing now. You know, people thought that this window might open.
Well, this was supposed to be the year of IPOs, wasn't it again? Yes, yet another year of IPOs. It
hasn't worked out. And I remember reading at the beginning of the year that this would be the year of private equity IPOs and the great exit year, and that was all going to work out really well because what with valuations being so high in the listed market, that translated through into peer companies in the private market and may be able to get out of these great prices twich the answer today is a works.
Yes, And I mean maybe there's some opportunities in that sort of situation and all the dislocation people are saying, you know, in times of distress, there's always opportunity, right, So you know.
Speaking of which, you had more of pape from Burnsteinn Private Wealth Management talking about as something very similar in terms of interest rates commercial commercial real estate, which obviously has had a nightmare time with rising interest rates as well.
Yes, yes, very much so. And I mean her argument was sort of similar that she thinks though that commercial real estate prices have reset with a new reality, and so, you know, with a lot of debt coming do and lenders right now are going to be less likely to offer the attractive terms that they did when they originally made the loans. There are going to be solid properties that have issues with their capital structure, and you know,
that may make them available at a discount. And she was appointed to multifamily housing in particular where multifamily areas where multifamily housing starts expected to drop, like some you know in the South, that could be an interesting place to put capital. And I mean she also made the point that of course, the ability to raise rents, you know, means that you have something of a hedge against inflation.
Yeah, yeah, and she was was she was she the other one who was also interested in buying art? Was that her alternates as well?
Yes, Marin, she was the one who was interested in buying art.
Because there was one there was one who specifically went for a Pocanso, and then there was someone else who said they can they collected contemporary art, yes.
Yes, yeah, right, as Anne Berry collects contemporary art, and an artist she said she loves and hasn't bought yet is Rebecca Manson, who creates these sort of wall sculptures and ceramic wall sculptures. They're very fascinating. They're like butterfly wings, and I'm very hard to describe. But yes, she's not buying, particularly with appreciation in mind, which is always what they say you should do about it. Oh, buy what you love, don't buy it thinking it's going to appreciate.
So susan trip to Patagonia or ceramic wool sculpture with butterfly.
Wings, I don't know, Okay. I loved Andrea Decenzo's idea about traveling every weekend with family and friends to different areas, so I have a few I would travel too. I would have a sister's weekend by two sisters in Newport's, New York, which isn't very exotic, but there's a beautiful place up there called Mohawk Mountain House where you can go hiking.
I go there.
Internationally, I've never been to Amsterdam, dying to go there. I'd grab some friends and go there. There's no I mean, I want to go to Santa Fe, New Mexico. What about you, where would you go?
Well, pretty much anyway, you know in the UK at the moment with so heavily taxed and you know, and let's talk about wealth taxes and taxia pension and taxing theirs and taxing that. Then everyone I talked to us just like, yeah, whatever, I'm gonna spend the lot.
Die Broke is on the move.
But I tell you, I do really want to go to Chili and Patagonia. Everything my my husband and my daughter told me about it. It sounds absolutely amazing. Left me behind this time, but I think I can try and you know, get another trip out of them.
That's great. So there we go.
Everybody, if you have a million dollars, just spend it. Just spend it. That extra million dollars that is, just spend it. Spend it on mainly travel. Thanks Susan.
Pick up a little art on while you're traveling.
Yeah, maybe travel first and art if there's anything left over from you a million bird, I like that. Thanks for listening to this week's Maren Talk to Your Money. If you like our share, rate, review and subscribe wherever you listen to podcasts. Also, if you sure to follow me and John on exor Twitter at Maren at w and John underscore Stappack and also Suzanne who is a
wealth Watch. This episode is produced by Sumersati, Production support and sound design by Moses and Questions and comments on this show and all.
Our shows always welcome.
Our show email is merin Money at Bloomberg dot net