Welcome you, trilliance. I'm Joel Webber and I'm Eric Baltis. Eric is great to be back in the booth with you. I was away for a second. Things didn't go so well. Yeah, I had to take over your role, and uh it was harder than it looks. I gotta I gotta give you credit. I don't think I'm gonna mock you anymore after you go on what I call the downward spiral, especially in the closeouts. First of all, those are incredibly rare and you make a bigger deal than they are.
But you know, it's great to be back. I missed I missed my Tony Romo. How was China? Uh? You know, there's the conference. This Bloomberg New Economy Forum that we do is really interesting huge, Uh turn out, some really significant people and a lot of interesting topics that came up. So it was an interesting place to go, especially right now and in the midst of all the things that are happening in the world. I thought it was really interesting. And coming back though, I really wanted to have a
holiday party. So this episode of the podcast we said, why don't We Talk to Our Friends? Is over at What Goes Up? Podcast? Also here at Bloomberg, which is co hosted by Sarah Ponzic and Mike Reagan. So we decided let's bring them on and then let's actually like talk about what's gone up this year. Yeah, the past couple of our podcast episodes have been a little wonky,
non transparent active direct indexing platforms. So we thought this December, let's wrap up what happened in the market where people are investing, and that's their specialty. So um, we thought we'd look at what went up and what might go up next year. What kind of beverages do you serve at holiday parties? I don't really have some two young kids, so I parties are like nothing too crazy. I picture
Eric serving ETF That is holiday party. Like, here's some t VIX for you, Uncle Joe, or metaphorically, t vix would be like grain alcohol, different alcohols, each with a sign spy. Pretty easy, it goes down. Well, yeah, yeah, here's some o'duel's little voo for you. You You can't handle anything, you know, I want some three X leveraged ets. My question for you, I'm gonna turn the tables already. Sure, I'm used to asking Eric the questions like ten times
a day over the incident messenger. But why aren't triple X levered e t s the biggest thing in the world. If you're gonna be a bowl on the market, go bigger, go home, Right, I'm looking at the triple Q. How do you how do the cool et f guys called the triple Q or the t Q cu cu um, the triple Q the q q Q yeah, yeah qq. They must have called the cubes back in the day when it was four. But I like the t q
q Q. Yeah. So that's the triple leveraged version of it, which I think is up like four thousand percent since it came out for the decade. Yeah. The problem with leverage, um well, first of all, they do have a good audience, but there's um the way they rebalance every day because when new people come in, they didn't make sure their leverage is reset for that day, and that resetting can
cause some corrosion and so your your triple leveraged. It doesn't exactly in the long term, and that's why the three X and negative three can be both down over a year. But if something goes up in a nice direction, you get compounding effect and actually you can get four or five times. But it's a very um weird market that has really got some wacky math. But other than that,
I agree with you. I think, um, you know, I think if you talk to those companies, half their investors are hardcore traders, small hedge fund types, and half our retail day traders, like I think the new day trader uses those kind of things, but you can tell from the volume they're probably trading a short term with the day this time on trillions. What went up? What else
went up? I want to start with the SMP five because it's relentless, and you know, I call the utopia year, but I think that year the market was up with something like that. It's up more this year, So are we like beyond utopia? Like isn't crazy, but it doesn't quite feel like it, does it. I'm gonna let me read you a little bit from this this uh column I edited by our colleague. Ye. She literally everything went up in two in this year two tho, I'm still check so right right given away my age. So he
basically looked at every major asset class. Literally not only did everything go up, but everything went up way more than the average gains over the last year, and I mean I'm talking everything from your haven's treasuries up more than average e M debt, high yield, gold, everything. So I don't know, to be honest, I don't know what the takeaway is from that, other than there's just a whole lot of money chasing returns this year. So I have one theory on it, which is, and Sarah, you
correct me if I'm wrong. For the most part of the year. The last month is an exception because I think people just went all in bullish recently. But for the first up through Halloween, I felt that there was a Trump trade developing, which is, I'm gonna just hang onto equities. I'm not gonna sell them, but I'm gonna buy gold, treasuries or low ball because Trump's Twitter feed bothers me a little bit. I'm a little nervous and eighteen just happened, and I'm still a little spook from that.
So I think that's why you might have had everything go up because people I didn't want to sell equities because the FED was there, but they also felt nervous, so they bought these other things. For the most part, I would agree. I mean, you think about the first half of the year, there were still a lot of nervousness out there. There are a lot of concerns out there, and that's why even within the equity market for months
you saw that defensive trade really take off. They see people piling into consumer staples, you saw people piling into utilities, real estate. Also because of the bond proxy side of those trades. I mean yields coming down to one and a half percent this year. US people last December, in the beginning, what they would have thought yields were going to do. I highly doubt anyone really would have told you that yields were going to drop from uh till one and a half on the ten years. So that
really drove the trade for a while. But now in the back half of the year, the last couple of months or so, now people are starting to question if a lot of that was way overdone. So you have started to see uh some faults in the bond trades. You've seen it in gold as well. However, because they had such a strong run up in the beginning of the year, there's still up an extreme amount, and all year long, you've just had risk assets inequities rebounding as well.
But you think about the return for the SMP. A lot of people, when you say year today, the smps up, they're gonna say, wait, wait, wait. But if you look back towards the beginning of December, uh, it's not quite that high. You have to really take into account the drop, the meltdown that we did see at the end of last year. Yeah, it's a it was a really weird phenomenon, this roaring bowl market being led by defensives. I don't
I can't remember a time when I've seen that. You saw what looked like out of textbook what they would call crowded trades and these staples and utilities. I mean, some the valuation is just going through the roof for these really defensive sectors. So a strange year for sure. And lately I've started to see some research to looking at the latest rally that we have seen, talking about the proverbial or really scary blow off top that you get before a bear market, or that you get before
a recession. Uh. Some shops pointing out that as of the end of November, if you had looked at stocks on a one to four all the way through fifty two week basis, the return was positive on all of them saying that, Okay, maybe this is it, but you continue to have investors in the majority I speak with, say you think about the caution that is out there, that being the makeup of what's driven returns for a
decent amount of the year, but also flows too. If you look at so far this year, fixed income ets have taken in more than equity ts for the first time since two thousand nine, And a lot of people keep talking about this cash on the sideline, which I find interesting. Yes, you can look at mutual phone outflows. Uh,
there certainly is a lot of caution out there. But ned Davis has another way of looking at it which I've kind of taken to, and they look at cash actually as a percentage of total market cap, because if you look at the absolute level of cash right now on the sidelines or cash in money markets, then sure
it's high. But if you actually look at it relative to market cap, because obviously there's a lot more value in the markets right now as a whole since two thousand and nine, it's actually pretty low, which makes you think, sure, on an absolute level, there's a lot of cash on the sidelines, but not actually relative to the actual market cap out there, and you know one headline that I picked some headlines out that you guys wrote that you're talking about that I think captured. The year is here.
It is sick with recession fever. Investors make power their drug, and to me, UM, I felt like the FED has been the drug for ten years. Was a year we saw the patient off the drug and it spassed out. Everything went down like that was the year everything went down. But then beginning of this year, Powell came out reassured markets. Trump's pressure on him I think is part of the deal. Um,
But it seems like recession impeachment. I track the mentions of these words and they spike up, and they're scary words, especially recession. But spy volume never really gets shaken, which is a fear gauge. I use, nobody's really doing much. I think there's headlines and sentiment gets crazy for a week here and there, but people just I guess the all comes back to the FED being their drug. As long as they get that hit, Um, everything else will be short lived. And is that really the case? And
how does this end? I think something that people are going to be studying for years is what happened in the repo market this year, and how the FED kind of came in to rescue save the day by holding these auctions repo auctions. Now everyone's saying it's not quantitative easing, it's not quantity of easing, okay, But the Fed expan of their bounce sheet by more than a quarter trillion
dollars within a few months. And a big reason why I think you have to assume they did that is because here we are running a growing economy and yet we're blowing out the federal budget deficit to a trillion dollars a year. Everyone got a tax cut, corporations got a tax cut. So there is all this money chasing all sorts of assets around right now. Extra money. So yes, the FED did reverse course on rates and uh, you know,
started lowering rates. That's one part of it. But I would not discount the effect of their moves in the repo market because they kept by keeping those uh treasury bill rates low. Um, you uninvert the yield curve, so people stop worrying about that. All this would qualify under the FED. Has the markets back, Yeah, absolutely, And I would say even Trump wants to Fed to have the
markets back right. This is all speculation, but there are a lot of people throwing around the idea that a few weeks ago when Powell met with manution in Trump, that maybe that was something they discussed. If they decided to pull the plug on the trade war, do something unexpected, will the FED have the markets back? And I've spoken to a couple of people, including the head of asset Allocation UH this week over for Pacific Life Investments, who said that's part of the reason that we are seeing
this end of year rally continue. I spoke with another investor at another point this week who said that he sees the possibility that the FED could actually cut rates
on the first quarter of next year. Also part of the reason that the market is continuing to gain, not because they think we're going to fall into a recession, but because if something unexpected does happen on the trade front, or if you do continue to see some deterioration and growth but that's not horrible, well, the FED has your back, and the FED put is still there, the power put is still there, and that's part of the reason we
continue to see this risk on attitude. There's people on Twitter and they are very funny they'll see something like I heard today, like somebody taped a banana to a wall and it sold in an art exhibit for like a d and the person will just say, FED definitely has to cut rates or s andp hits all time five, FED has to cut rates. They're making fun of like it's the best market all time highs all the time. Yet Trump's on the FED to cut rates, and I
kind of get it. I mean, it's almost become a joke. Sir. You mentioned something about growth and value a second ago. Can we dwell on that for a little bit, because this has been actually been a kind of a remarkable
year for value of all things. So I'd say over the last couple of months, if you still look over the year, growth not so much in e t F flows because we started have started to see a lot of et F flows going into not so much just value funds like low volatility funds, dividend funds, also those bond proxy areas of the market. But if you look at performance, I mean, gross had a pretty stilar year
from the beginning of the year as well. But what happened and my colleague Lucawa wrote about it very very early on after the steps that happened with Whee Work, and he called it the we Work flu the idea that all of a sudden, people are going to start actually caring about profits again and stop throwing money at companies that just have have very high growth prospects. And we did see that play out for quite a while. We saw it happen with certain companies after earnings. Twitter
comes to mind, for example. UM. But then we saw if I focus on software companies one portion of growth, we saw software start to perform pretty well. Again. One thing in there is like we work being classified as a tech company. Right, everybody came back to reality, Well, everything is a tech company. But can I just go over this one headline that is totally on this topic. I think who wrote it? I think Sarah did. This is UM after latest IPO setbacks, there's unicorn blood on
the streets. That was That was an early, early story. That was a business week. Yes it was business people get started. That was no problems. But the problem is I I wasn't even aware because I've probably written something like, yeah,
that one was. That was the story. You know, when we um a business week, we're thinking about the year we did a cover story back in like March, I think right as Uber basically listed in I p O that we kind of wanted to mark that moment and we did cover that had that was by both of these guys, both Mike and Sarah about um, the moment of private companies leaving Matt what Matt Levien calls the enchanted forest of the private markets for the public markets.
And we marked that moment with a cover story that had a Instead of a deer crossing a road, it was a unicorn um, which I thought was fitting because you know, deer get hit by cars all the time, and like, some of these companies are not going to make it to the other side of the road. Uh, and they and they actually you know, for a long time, a lot of them have struggled and I think will continue to of them struggle, with Uber being one of
one of those examples. But later on in the year we came back to it with another story which was how bloody this this has been for all these companies, right, and that really that headline relates exactly to that theme, because man, we saw blood bath for a while and um, just I want to go back to growth and value because I feel like, and Michae will get this because
he's a sixers fan. Value is like when Ben Ben Simmons hitting a jump shot because he's so bad, so he hit a three pointer and the place why crazy, Like they won the championship. Value was up this year. Growth was up thirty like, just because value didn't lose by more. It's like a big year for value. I know what you mean. It seems like value had its big year, but it's still trailed the market and it's
still lost to growth again. So it's just it's relative to its it's relative because the past performance has been I think value it's called a little bit because people like it's so bad. I thought you were going to go with the Marquel false example of Orlando getting stepping up the biggest value stock in the NBA history. Um, yeah, I was. Actually Joel has this list for Business Week called the Jealousy List. Uh, And I was, you know,
scrambling around lookier than me. It's the Business Week Business Week guest and and forthcoming. Still, Joel informed me he was looking for submissions to this after the deadline already. So I'm go scrambling around looking looking for examples, and Josh Brown. You know, the Reformed Broker blog had a really what I thought. I didn't submit it because and I'll explain why. But it's definitely an honorable mention because he it's before the value rotation started, and he's talking.
He basically tries to explain why growth is it, why it has been for the last decade, and he does this great job of it. You know, I actually have in front of me. Is like an analysis of book value captures things like plant and equipment and facilities and hard money, real assets that corporations have managed to accumulate over their lifetimes. We're saying, in an era of cheap, free money, you don't value of those things anymore because
they're depreciating assets obviously, So what do you value? You value this recurring revenue stream that you get from from the dot com you know, your your Google's and your facebooks and that's that sort of thing. But he makes the point I might be calling the top here of growth, you know, very self aware. But the reason I didn't submit it is because he does give we Work as an example of why growth. Everyone everyone loves growth. But I will go out on a limb and say, uh,
the story is still true. I think growth is perennially perennially, perennially perennially. Yeah, this is why, Sarah, we're halfway through the party. I'm gonna just predict I don't think the value rotation is gonna last forever. I mean, I think growth is is what investors want going forward. Can you
pull his duels bies? You know. I think it's an interesting take because after we did see those couple of teks of immense value at performance, all of a sudden, value managers or even people who aren't value managers but aren't growth managers, are saying, Okay, this is values time. They've been under performing for way too long. Uh, they've got to come back on top at that point, right, But they've said it so many times, but actually came
out right. So Cliff as News, he is known he does not like to time the markets, and he actually did put out an entire research paper talking about quote unquote sinning a little and maybe timing the market a bit and saying this could be the time for value. But I find it interesting because in the beginning of the year or the past couple of years, when you
talk to investors about the growth out performance. They say, the fact of the matter is we are in a glow growth environment, and that is when growth that performance because people need to go look for growth. Well, if you think about the economic environment for next year, how is it any different with us GDP expected to be one cent sub two percent or around two percent at least.
I mean, you're not saying that we have a very high growth environment that value should outperforming technically, Yeah, And I you know, I don't like to look at growth and value as sort of these separate asset classes. I think it's a matter of what stocks are considered value at any given time. And this year it was those very cyclical you know, banks, financial companies, UH, material commodity producers.
And again it's that that sense that everyone had sort of recession fever earlier in the year, and those stocks were just you know, unloved to the point where they got ridiculously cheap in a lot of cases on a relative basis, you know, cheap in a in a an expensive market otherwise expensive market. So they're gonna kind of mean revert back to a reasonable valuation. I don't know if it necessarily signals this total regime shift where we're
gonna see a decade of value outperformance. We did you know two thousand nine was a good year for value, So I think if there's some kind of a sell off, the rebound will be very good. By the way, interesting factoid on how growth and value can be a blurry apple isn't exactly fourteen value et f s and fourteen growth each. I love about that. UM. So there's a lot of stocks that you you know, well, you just can't miss out on a stock that's up this year,
so you just gotta put them in everything. It looks back again, and at this time of year, there are a lot of different UH investment firms that start having their outlook events and I was that one recently, and I've also been reading a lot of outlooks, and it's unbelievable how many firms right now for their expectations for if you're just talking about equities US equities, you asked some of stocks are likely going to go up? They say yes, because stocks typically go up. You say how
much every single time? Load of mid single digits. No one has high conviction about this rally that we saw this year really continuing on with the force UH that we've seen it. And part of that is because this year you had such multiple expansion on the back of the Fed cut rates, expectations for a trade deal, and now at this point you really do need to get growth in profits. And JP Morgan Asset Management really dived into this and their outlook to help the market move higher.
And even if we don't get those ten EPs growth in the SMP five hundred stocks next year, that's fine, but you need to have some growth and right now that's the expectation. And can you talk about these calls? Um? You know, people out there, I don't know how many regular people read these calls, but they're in the financial
media a lot. Goldman says this, and to me, it just seems like they packaged the last three or four months and and put the future tents on it, like it's kind of a cop out, Like nobody ever makes any really legitimate calls. Um. You know, the biggest one that I remind was reminded of is in right late Jamie Diamond of JP Morgan, who would know more than just about anybody, right, basically, didn't he make a rate call that they could go up to like four point
five percent? And they didn't exact opposite. Um, how much to these calls just to feel content versus people trade off of them? You know, I think when you look at those year end targets that that bank strategists put out, Um, the intended audience for those things is us. It's the media, you know, and you bite every time. It's like a juicy worm. Think about it. Who who really invests based on a December thirty one? Yeah, you gotta you gotta be done by that. And off the record, I think
a lot of them will confess that to us. But if you really dig into the notes further and you get their their sort of sector calls and and there, you know different stuff like that, there is value there, and there's value I think into knowing what Goldman is
expecting right, um. And you know, if you can bring yourself to disagree with them, if your analysis says differently, then you know, to to know that you're betting against Golden I think gives you, uh, you know, to go against the consensus is kind of what everyone wants to do in Wall Street. You want to be that contrarian. Uh So, I don't know, I none of us have done sort of the back test of all their calls and and tested them to see who's the most accurate
year every year? We probably should start start. I can feel it. I can feel like I feel like they're like active managers, tend to beat the s and p a third of them do. I feel like about a third of the calls are right. I feel like more are you know, wrong than not? UM, But they provide context, they give you something to talk about that a lot
of the data is very interesting. UM. They don't have to be right every time, but it would be cool to have their batting average like a baseball player like this this this person who made this call is batting one. D Okay, well listen to that guy. You can get the ticker and then track it. I always feel bad for them with the the year end call. You know, it's like imagine you're a weatherman and they're like, what's the forecast for next few year's day? You know, it's
like how cold? I think where you get value? And I think even you'll read these outlooks and a lot of them will be focused on the year ahead, so we'll be focused on But if you speak with the strategists actually behind the forecast, I'm writing the forecast. They'll say to you, yes, this is our view on what's likely to happen in but many of them have much
higher conviction further out. A lot of their investors are not just positioned for the year, so they want to have a sense on where things are going next year, but also in the future. And if you get the logistics of wrong, but you're still on the right trajectory for the next five ten years, then nods are I mean, you're in a good place, Sarah. Can you give me a call on US equities next year? My own call? Why would you want that? But just again, just want
I want to hear. Yeah, let's just get it on paper right now. I predict the year will end with thirty stocks in the Dow Jones. Oh, there we go. You know what, by the end of the year, something's gonna happen. It's funny. So we're doing a big et F event next week and I'm giving my predictions and they're all like this. I say, inflows will happen, and then I'm like, and then if the last one is something will happen. It's very it's very vague, but I
do go into some things that are somewhat college. But um, I I it's very tough to know the future. You've seen it happen, what you think is going to happen. The opposite, does um mid to low single digits digits. I fit right in the general count. That's the safe the safe space because there's a lot of people. They wouldn't call you all at at once. You know, it's the person who says markets going or down that is
taking the real risk. Well, i'll tell you one. Cameron christ Are Macroman columnist, is one of the smartest guys I know, and he's written a few times about now valuations are high. It's very almost impossible to time on market. Based on valuations, they can keep going higher and surprise everyone you know, you can approach dot com valuations for all we know. Again, but what he said is the longer you look into the future, the higher valuations are,
that the weaker the long term returns are. And he's had a couple of columns saying that both bonds and equities that ten year horizon is pitiful right now out because of the high valuations in both. So I hate to be the downer at the holiday party, but give him I will add in a recent research note, Nicolas, we had him as a guest on our podcast once what's the name of that podcast? What goes up for all of you who are not aware? But Nichols data track. He sent out a recent note and the title was
how to make smart predictions. I'll read you what he writes. He says, for example, ninety years of spurn data shows the index gains in average of eleven point four percent a year, and the odds of a twenty plus percent gain are three times the chances of a ten percent decline. So it's really difficult for someone to make a bearish bed on the SMP or just US equities at large when history just tells you the odds are much higher
for you to have a significant gain. Right, Well, I mean the market generally will give you about eight nine, right, that's what you'd expect. But it's been double and even more over the years. So I think that's what people like, we're like kind of over our due date for something
that you know. But then again, in the market was down I think four or five percent if you include dividends, and it felt like we had gotten like kill, Like everybody was so miserable and it almost seemed like, um, it made me feel like a child that was spoiled, like, oh, you were down four percent, You've been up two d and fifty. So in these days when the market goes down two or three percent, it just seems like people freak out, like it's okay, Like you're up three hundred
since the financial crisis. You're getting way more than you should. How much? Are just investors just too coddled? I think advisors try to do the best that they can for their own clients to tell them this is normal, it's actually okay if we get a bit of a draw down,
if we get some consolidation. Um. But I will say that some advisors that I speak with, they tell me how their clients outwardly say to them, why shouldn't I just go buy the SMP five t F. It's cheaper and it always goes up, And it's something that's very difficult for them to try to explain because they try to show that they can add value, especially in volatile times. But for years, really this entire bowl market, you would have been fine if you just bought a passive product.
Well that's um buffets. We called the buffet ets special In his one of his letters, somebody said, what can I do as an individual investor? Is like, do what I'm doing in my will. My will is to go into a Vanguard index fund and then ten percent in short term treasury bonds UM. And you know, if if that's what he says, and if you do it, that's, um, you know, a five basis point trade and that's how much it wuld. I was going to say, going to that triple leverage t q Q that's yeah, I'm not
messing around with un leverage. And that's actually a modest transition to another thing that we wanted to hit on, which is fixed income. It's like what I did there. I took treasuries and turned into we're going for triple leverage tech to fix. Then come, I mean talk about a down. Yeah, but it's on your list of things you wanted to talk about. Yeah, I mean, well this gets is into rates. I mean obviously fixed income flows. You talked about a lot of that function of rates falling. Um.
You know, look, you wrote an article. I have a headline here that I think was from Mike, which is, uh, this is how yields could go negative in the near future. Now we've heard about negative yields overseas. Could that happen? Could we like turn into like a future Japan where I mean, what's going on here with this? Before Mike is of take I've got to say that was the
title of our podcast. That wasn't Yeah, I just want to I just want to your bio page and picked out headlines that kind of like just you know, stood out. I love the crossover. By the way, it's this is like it's like when Fonzi shows up on the Verne, the Globetrotter's Land on Gilligan's Island. You have to define those shows now, by the way. You can't just say that beyond that. Have you ever seen one episode of Gilligan's Island? No? Yeah, see it's we're getting old man.
It wasn't like it was when I stayed home on a day and that no longer. Okay, what was the question for again, um, negative yields? Could we go there? Most people don't think that in the US we're going to get negative rates. It's possible, and we had Lauren Goodwin on our podcast. She talked about how we could get there, and a large part of us getting there would be that the US has to go into a recession and that the FED would be cutting rates lower.
But many members of the Federal Reserve have come out and said that they have no interest at the moment a negative interest rates, and they don't see that happening in the US. They don't want it to happen after seeing some of the repercussions that have happened another geography cases of the world. Right, it's it's very very difficult.
And President Trump might say over and over and over again that he would love negative interest rates, but I would say, at the current standpoint, negative rates next year very very very rare. Call well, and I think it's important to define what you mean by negative rates. We have seen T bill rates go negative in the US. Many bank depositors out there. Guess what you're You're getting a negative rate on your savings, especially if you use the eight tem a lot you're paying those a t
M feast. They're easily gonna overwhelm your zero point zero zero one percent interest you're getting. So you know, if you're talking about the FED funds rate or the tenure Treasury, I don't I don't see it either. But again, if the President wants it sometimes. Uh. You know, the bully pulpit is a is a big thing. But I do think there's a bit of confusion over where. I say you just focus on the tenure. Where the tenure goes
from here. We've been in this range between one and a half to like one point nine percent for much of a year. Uh, and a lot of calls I've seen either put it a tiny bit above that range, maybe a little bit above two percent, or say for most of the year. The fact is we're going to be range bound because at this point in time, the FED has said that they are on hold. Who knows what will happen next year. Things can be very different.
We know how things changed from last year. But if the FED is truly on hold, what's the driver that takes the tenure out of that one point five to Well, I'll go over that, which is the bully pulpit. I think Trump is gonna run on the SMP at all time. Has that's one of his like four pillar campaign, So he has what eleven twelve months to run on that, and I think if you need low rates for that
to happen. Um, which brings me to the election, right, you wrote a story which resonated with me, Obama will kill stock market, No Trump will, no Warren will, and this solves the politics and the presidency. We had um our two dad's on one time, and my dad he actually bought t vix because he asked me what will go up the most when the stock market crashes? Because he thought Hillary would win and the market would crash.
So he got both wrong and then he forgot to sell t vix, which is another adding insult to injury, which I won't go into that, but um, I think a lot of people kind of think that politics are connected to the market. It does feel like Trump has a lot of sway over the market. Can you talk about what if Trump loses in Warren wins that scenario. What are people saying. Do you think that's gonna be something that could shock the market into a massive sell off if Trump wins, loses, if Trump loses in war
like a Warren or Bernie. Okay, So I'll tell you right away that that story we got a lot of praise on it. We also got a lot of backlash on it, depending on what many readers political beliefs are or where they stand. There's multiple people who viewed, that story is pretty accurate. The idea that in the past, UH pundits strategists always make forecasts on what the market
is going to do if a certain candidate wins. Uh. The reality being that typically the president actually doesn't have as much control over the entire economy or the stock market as some might think. Um. Now, if you think about President Trump versus and Elizabeth Warren or Bernie Sanders, for example, there are a lot of people out there who have said that if Warrnt wins, the market will crash. Uh. She's a socialist, she doesn't care about the stock market.
But it really depends on which policies actually will make it through uh and actually get imposed. Because I mean, in the lead up to the election, you can talk all you want about healthcare or breaking up big tech, and recently she did propose this new bill that's going to try to roll back some mega mergers. Yeah, that will absolutely affect certain stocks if they are imposed. If
it actually happens. Uh. But the problem is a lot of these really extremist policies, I wouldn't say it's a problem they don't actually get through as advertised during the election, especially if you have a Senate and it and right right, right, yeah, yeah, anyone who bought shares of wall building stocks, for example, might be uh, talk about that. One thing under Obama would was fascinating to me is that I read an article was in like Yahoo or something or in two
thousand and when did he win two thousand eight? So two thousand seven it said, um, how to play the Obama presidency And it was basically like buy a bunch of clean energy. Clean energy stocks were flat, defense and banks double the market. I mean, it makes no sense sometimes. Well that's also what I find interesting in a lot of people talking about Warren. People were pointing to healthcare obviously,
which was under performing for part of the year. No one was really bringing up energy, which is pretty big part of her platform. So it was interesting. Yeah, it's a very ambitious platform that I agree. I don't think the real drastic stuff we'll ever see the light of day. We'll make it through Congress. That said, I I look, I could see some turbulence, Yeah, it come the primaries. If she starts taking the lead. I you know, I do think we'll see some volatility in the markets for sure.
So we've spent a lot of time being US centric, let's like talk about something other than the US, maybe emerging markets, So China, Brazil, I'll stick with China. How about that. I'd say, if if you think about emerging markets and even China, it's almost part of the value trade, the idea that what's underperformed the last decade is going to eventually have to turn and it's going to have its moment in the sun. But a big part of the China trade is everything going on with US China
trade negotiations. Well, just give me a second, give me a second. What I'm gonna say is, yes, the U s comes into it, but the idea of being that if this really does get resolved, that China should perform better than the US likely that that's a very popular take for emerging markets. What you're going to need to see largely is you're eventually going to see weakness in
the dollar. And there are a good amount of people who do believe that we will see weakness in the dollar, bringing it back to the US once again, but the dollar is a really big factor when it comes to emerging market returns. Yeah, and since you mentioned Brazil, I did notice a lot of banks are very bullish on Brazil going into um, I don't know that they finally had pension reform a couple of years. Yeah. Well that's the thing though, is the politics in ladd m Is
is pretty dicey right now. Extremely well, it seems like these single countries as long as the person because I've seen it in ETFs. If the person that's looking like they're gonna win is a very right leaning pro business like it happened with Moti in India, the brazil guy. Um, you'll see that's things starts to go up. So I always say that, but then there's often a LT town after these Absolutely, yeah, there's a build up. It's I saw the news type of Argentina. Yeah. Yeah, I'm not
saying but you definitely tend to see that. Or the opposite can happen. If somebody's coming in, it's going to really just go the other direction. You'll see it sell off. Okay, So this is the favorite question that we like to ask people. I haven't asked them for a while. We're a little scared, Uh Sarah, what is your favorite et F ticker? Uh? Mill, That's it's a popular one, Like there's a gold ETF that's like nugs Nugget and you gt it's a triple leverage back to your triple leverage. Yeah,
triple leverage. Gold miner on marijuana didn't bring it, should it? Golden marijuana? There's a weed e t F Right, Yes, I'm want to switch to the Tokas instant mount rushmore level in my opinion, um UFOs up there. By the way, Nugget, the standard deviation on Nugget is just for perspective, I
can tell you what spy is. I think it's probably like yes, seventeen, so Nugget Nugget should come with his xan X. I love how triple levered products are so ingrained in Mike that he picked triple lever ticker without even knowing here that's right, I know. I want to make all the e t F list's just like that streaming man. You all like kind of like pretend that these triple levered products don't exist. That it's it's like like we've we've done this on the show before. No,
I like he's going because it's a great top. There's a lot of virtues signaling on triple leverage. People are like, how are these things? Twit You finding you're going the other direction. You're saying, how are these things not put more popular? I love them. I think you're just being more honest threshing Mike, Sarah, thanks for joining us, centralizing, thanks for having us, Thank you. Thanks for listening to
Trillions until next time. You can find us on the Bloomberg terminal, Bloomberg dot com, Apple podcast, Spotify, or wherever else you'd like to listen. We'd love to hear from you. We're on Twitter, I'm at Joel Webber Show. He's at Eric Call Tunes. You can find Sarah and Mike at Sarah Plantec and at Reaganonymous. Trillions is produced by Magnus Henrickson. Francessica Leaving is the head of Bloomberg Podcast