Beware an 'Inflation Head Fake'

about those growth stocks? They're up even more after being left for dead for value stocks earlier in the year. We're gonna get into it with the chief investment officer for the wealth management unit of a major Wall Street bank, who is quite a bit more cautious about this market than the people chasing this ferocious rebound. But first they'll on I think as many listeners of the show, no being a podcast co host such as it's a very

fulfilling job. But I think thanks for having listen. I think listeners have probably picked up on though that my real ambition is to be a game show host. Yeah, I've noticed you're making the transition. I know, I know, I'm trying. I'm working it on it every week. I think I need better hair, I need more hairspray and stuff like that. But we'll get there. We'll get there.

I can help you with that, and regular listeners will know at the end of the show we do the craziest things we saw in the market that week, and I like to sort of make it like prices right, although I'm definitely afraid of Bob Barker after seeing happy Gilmore and seeing him punch out Happy Gilmore, so we can't call it prices right. We can't not anymore. But we got away with it for a long time. We did.

I haven't gotten punched, no angry letters from lawyers, but a listener from London, Chris Whitman of Convergence Value Partners in London, wrote in to suggest what I think is the perfect title that Bob Barker cannot complain at all about, which is what it is. The price is precise, Price is precise. Can you say it's a tongue twister? It's it's hard. Let me hear you say, Well, we know I prefer prices, correct prices, correct prices, so we can so we have prices correct and now prices precise I

think I like prices precise. I just know I'm going to mess it up. Precise, precise price. Yeah, I know I'll mess it up. Anyway. Well let's go with it for this week. Anyway. If anybody else has any suggestions, you can just tweet at us. Absolutely. But anyway, I do want to bring in our guests. We're really lucky to have her. It's Lisa Shallett, chief investment officer at Morgan Stanley Wealth Management. Thanks so much for joining us, Lisa,

Thanks for having me at Leasta. I wanted to sort of set the stage a little bit here because UM, Morgan Stanley has gotten a lot of attention UH this year rightly, so, you know, for being correct about being cautious about this market. Your colleague Mike Wilson has a year end target for the SMP at thirty nine D not the lowest on the street, but you know, well below average, about five points below average of the strategists we survey. And you know it would mean an eighteen

percent drop on the year for for the index. UM. And I was reading your weekly note from the Global Investment Committee, UH, which you are the chair of I believe the head of Let me just read the beginning of it. Um, the Global Investment Committees base case is a profits recession, not an economic recession. Earnings are vulnerable to rise and costs a strong dollar, bulging inventories and

waning pricing pricing power. Um. And then you go on to to point out about the hotness in the labor market being sort of, you know, a risk to everything. Today though, on Wednesday we got this CPI report. Uh that surpris eyes a lot of people. Uh it does you know, fingers cross, knuck on wood, everything else? Uh, it signals perhaps inflation has peaked month over month. It was flat. Um the headline number I think was but down the eight point five a very low eight point

five percent from from nine point one. So I'm just curious, is does the Wednesday CPI report and the market reaction to it change at all your thinking? You know, does it create any sort of silver linings in the clouds that you see for the economy in the markets? Um? No, not at all. I mean, uh, you know, look in fact, um that the idea that inflation may have peaked in our humble opinion may be correct directionally, but may also

be a little bit of a head fake. Uh, you know, with regard to this idea that hey, game over problem solved. The you know, the FED has conquered the day and

you know, FED credibility is back and all of that. Um, you know, our gas is a lot of things have gone right here visa V. Energy prices, visa V global demand in Europe and China in particular, really being much slower uh than global economists were calling for in the month of July, which has helped ease a lot of supply chain issues, has helped UH ease UH and take some of the heat off some of the food parts of inflation. Um. So our gas is that Yeah, directly,

this is right. But for the market to be, you know, kind of celebrating as they have been since the middle of June, again, our gases were way premature for that. So Lisa, can you maybe talk a little bit more about that. I want to ask you how much the CPI print does to what extent does it relieve pressure on the FED, And maybe you can talk a bit about what you're expecting from their September meeting and through

the rest of the year. Yeah. Absolutely, so, uh, look, good news for the FED is like I said, direction is correct, right, We're not making new highs. And year over year inflation compares, UH, it looks like nine point one percent at least for now, is going to be UH cycle peak on headline CPI inflation UM, so that you know is directionally good. And if I'm Jerome Powell, I probably do have a smile on my face and and I'm glad that energy prices went my way. But

let's you know, get real here, people. I mean eight point five percent on your headline and a core that was really hunched at close to six percent UH is nowhere near a sustainable level. It's three times your target

of two percent. And look, we know throughout history, if Jerome Powell is really the student of history that he claims to be, if he really thinks he's you know, Paul Bulker, then he knows that it's gonna be very hard for him to take his foot off the accelerator on the Fed Funds rate until the Fed Funds rate is approaching core cp I UH. And if a look throughout history, UH, most beds that are trying to fight

inflation have to get to that point. So inflation coming down towards something closer having core inflation come down to something below four means you know, he still has about another hundred and fifty hundred seventy five basis points to go and Fed funds uh. And he's probably gonna have to get there sooner rather than later. So to answer your question, you know, September UH, you know was looking

like fifty. We had a brief moment last week on the labor data which was super hot, where you know, some exuberant folks said, oh, it's got to be seventy five, and now we're back to fifty. UM, so we've kind of round tripped. I don't think this is there's a lot of new news in this other than the direction is correct, but the levels are wrong. So do you think the market pricing is right to think fifty in September? I mean, is it is there any scenario where we

could go back to the old world basis points by September? Uh? It would be hard to get to twenty five, I think uh. And and that's just again the distance and speed here between that core where core inflation is UH and where our current Fed funds rate is. I just I think they need to keep their their foot on the accelerator. Obviously, if labor markets completely crap out. Uh, you know, maybe they would, they would down shift to five.

But I think it would really take too bad labor reports, meaning the one for August and the one for September, which they won't have at the next meeting. I should I should be clear for them to really downshift that much. Well, speaking of the labor market, we also have that super super good jobs number on Friday, and I'm wondering if that also at all has changed your you on what the FED might be doing or your outlook. It doesn't

change her outlook. To the contrary, it kind of reaffirms the thesis that we've had out there for a while, which is um that you know, we're gonna all look back on the COVID pandemic as this massive generational shock to the labor market. Um where we fundamentally restructured as a society globally, how we think about work, about where we work, how we work, how many days a week we work, whether we work in essential jobs that are

deemed by our society as essential workers or not essential workers. Uh. And this is really pretty profound. And so you know what we've been articulating a thesis that says, Look, we think that they're structural change to this labor market, whether we're talking about more folks retiring, fewer immigrants, uh, entering more folks and detaching from the labor market and and

going the entrepreneurial route or going the gig route. Uh. And and this is a labor market that is much more fluid, where people are much more willing to geographically relocate, embrace the ideas of remote opportunities and live wherever they want. And that's causing big demands client balances in the labor market. And we think they're going to persist for a couple of years now, keeping inflation uh somewhat above that two

percent target for the FED. That's interesting you bring that up, because when I think about that, that flexibility of labor um this year is one thing. Obviously this is super tight labor market, but looking further out, is that potentially sort of deflationary towards wages. Uh. You know, if I can work in uh, you know, the middle of the country instead of having to live in New York, because that's sort of suppress wages in the longer run. You

do you think, Uh? No, actually not? And and The reason is that, uh, companies, you know have jobs in specific locations, the vast majority of companies, right, I mean, Amazon maybe located and have its headquarters in one place, but it needs workers to deliver packages. All fifty states are all you know, uh whatever three countries around the world, and so, um, you know, they need workers. So people

are you know, relocating and in transit. That's going to drive up wages in the places that are quote unquote maybe less desirable for you know, new employees to live or or or to be um and you still have to attract those employees to get the jobs done. At least it Just to bring us back to the markets, Mike mentioned at the top that stocks are up something like fifteen percent since mid June, and I wanted to ask you what, in your view is behind the recent

market resilience. Yeah, so, look, I think I think really from January to June, you know, our analysis has been that this has been a very very textbook bear market. And what I mean by that is that, you know, we saw a very clear, very well telegraphed pivot in federal reserve policy that was on equivocally driven by a FED that was massively behind the inflation curve. As a result, the market had to discount a hike and Fed funds rates. So real interest rates moved up and price earnings ratios

moved down. And it was in a very clear kind of linear mathematical formula. And so the first you know, draw down on the SMP five from jan to middle of June, you know, it was very textbook. Uh. Really, from there, I think we're getting a very typical reflexive bear market rally, meaning you get a pause. It looks like the Fed says we're going to now be dated dependent. You know, folks think the data is going to get

more constructive. Uh. And you know, we we get folks thinking that they're, you know, going to find some bargains, and they go in and they find the bargains where things have sold off the most uh. And some of the biggest damage, as we know, was in the unprofitable tech space, some of the meme stock space, uh, and some of the more you know, core pieces of the NASDAC and FANG uh. And so that's driven this hope that the worst is over, has driven the bottom fishing

back in. But folks who are true students of the market know that in every bearer market, we have these retracement rallies. They are head fake rallies. And the reason is is that we have to understand that it's not enough for price earnings ratios to come in. Policy operates with a lag, and it has an impact. It slows the economy. And if the economy slows, corporate profits go down. It's just a fact, it's math. And so we have not seen those earnings estimates come down yet. Uh, and

that's really what we're waiting for. And you know what what we have found, you know, perhaps you know most um curious, is what we have said is that the draw down on corporate profits is going to be relatively modest. It's only gonna be ten to fifteen percent. And we have people calling us parish. Um. You know, I remind people, you know, in the last three were recessions, right ninety one oh one, and and you know the great, the great financial crisis. Um, you know, you're looking at drawdowns

and profitability anywhere from thirty five to six. Right, So if SMP profits are down, you know, ten to fifteen percent over the next twelve months, that that's not too bad. Can I actually ask you to say more about the idea that we are in a bear market rally, because historically they tend to be very frequent, right, And I think in one of your recent you said there there may be more headwinds ahead and the market just isn't pricing them in yet. And I want to ask you

what those are. Yeah, sure, I mean, you know, if we think about, you know, some of the things that could you know, suddenly become additional headwinds, not only economic slowing, but one of the other things is, um, you know,

the US dollar. If in fact, the Fed starts easing up on their rate hiking cycle, it's entirely possible that the the US dollar, which has been extraordinarily strong, um you know, moves in a different direction, and that, believe it or not, for the average consumer, is inflationary, so that you know, suddenly, you know, throws a wrench into the works. Another you know, factor that that you know, we remind people of is be careful what you wish for.

You know, Inflation is actually a really good thing for companies in the long run, particularly companies that have brand franchise, because they take pricing power and they pass it through. And so if we look at the last couple of quarters of uh SP earnings, you have a lot of companies talking about their pricing power. Well, guess what guys have. Inflation goes down, you lose your ability to pass on price, and immediately you're taking a hit um to the bottom line.

So you can't have it both ways. And so things like the change in the US dollar, things like a recession. Uh, you know, things like a loss of pricing power are all additional headwinds that we just don't think we're not hearing. Uh, some of the clients who are buying into this bull market rally or bear market rally, I should say, talk about So if if I were an investor, I wanted to screen for sort of stocks that have the best type of pricing power, how how would you go about that?

I mean, is it as simple as looking for, you know, whose sales growth is keeping up with inflation? Or do you go, you know, go announcement by announcement to which companies have actually raised prices. What's the best way to to kind of you know, grasp that pricing power in the market. Yeah, So, you know, the way we usually think about pricing power is, you know, who are the guys who are growing their sales more quickly than they're growing their volumes than their unit volumes. And does it

intuitively make sense? Uh? You know, visa be the strength of their brand franchise. Meaning if you are a consumer product, if you're Nike sneakers for example, and suddenly you know you've got you know, two new models, you're able to to hold or increase prices at a rate faster than your unit volume is selling through. UM, that would be a suggestion to us that maybe you have uh, pricing power. Uh. Some companies have already said, you know, they're starting to

see their their margins compress. UM, they're already feeling uh, the lack of that pricing power where their costs are growing faster than than their revenue. Is it as simple as sort of the higher end? Uh? You know, companies selling to the higher end consumers are going to be able to do that better than the Walmart's and the lower end. Uh. And no, not at all. I mean we we have, you know, a bunch of franchises that serve lower end consumers who you know seem to be

quote unquote getting it done. Look at McDonald's. McDonald's has had UM some very good pricing power during during you know, this this most recent part of the business cycle, so you know it, really you've got to look at it company by company. I feel like my inbox has never been more divided in terms of some of the research notes I'm getting. I have half of the thing of the notes saying it's a bear market rally, in the

other half saying this this thing is for real. And so I'm just wondering, how difficult is it to come up with a thesis right now? And what are you telling clients who are potentially looking to get invested. Yeah, so look it it legitimately. Um, this is a complex environment. Um. None of us who are in the business today, even folks who have been doing it twenty thirty forty years, have ever dealt with the aftermath of, you know, a

global public health pandemic. Uh, none of us have ever you know, uh, you know, dealt with the amount of stimulus that we got in a twelve month period, which was close to nine trillion dollars, four from the Fed and five from Washington. That equates to forty five percent of annual GDP. I mean, just think about that for a minute. How much liquidity is in this economy, and so we've never really been in this situation where, um,

we're raising rates this fast from those heights. Uh. And while a lot of people want to make the analogy to to other times the economy has soft landed. Uh and you know other times um, like you know when Greenspan was able to soft land the economy, Um, he wasn't facing kind of the geopolitical instability um that the world is facing today, whether you're talking about relations between

you know, US and Russia and the Russia Ukraine War. Uh. And the pressure that's putting on Europe, which is extraordinary. I mean, think about if I told you that Europe was going to be rationing energy. Okay, that's what's happening. Um, So extraordinary pressures in the global economy. And then of course there's US China, not to mention the dysfunction in the US itself. So uh, you know, this is a

really really, really tough environment. UM to call that. Having been said, right, as much as we all want to talk about this time is different, we also know that very rarely is it completely different. And usually quote unquote rhymes. And so when we think about where could we be rhyming with history. Right. The places we know we rhyme with history is that typically, right, bear markets don't end

until certain things happen. Right, So bear markets tend not to end right unless uh, you know, unemployment has has uh, you know peaked. Uh. You know, bear markets that are related to inflation and policy scares don't tend to end until you know leading economic indicators trough. Uh. These kind of bear markets don't tend to end until you know

the orders to inventory ratio you know, uh turns positive. Um. So there's a bunch of things that we could say if we're if we're looking for rhymes with history, we think that we're still in this bear market and we've got a ways to go. I was really hoping you were going to rhyme that at the end there such a such a lost opportunity. You're right, absolutely, but there's a reason that reason. I work on wall. I have a picture of jay Z on my wall. But do

you really I really do? Okay, Well, if you started writing some wraps, by all means now you can debut them on the podcast anytime, we would be happy to. Yeah, But at least I I want to get back to that notion of how growth seems to be back from the dead, and I get the impression, Um, you're more of, at least at the moment, you're more of a bottoms up stock picker type than somebody wants to chase factors

back and forth. Um. But to me, what's fascinating about growth is we you know, we had this period between uh you know, the aftermath of the financial crisis and COVID where it seemed like a simple equation, you know, low growth, uh economy, low inflation, growth, stocks just take off in that type of environment. Now we've had the pandemic, the recovery. Obviously, value had its moment in the sun there. The last month and a half, though, growth is out

performing again. UM. I know your skeptical on that growth rebound, but I want to ask you basically two things. If you could unpack for us why you're skeptical on on the growth rebound. But also, is that sort of new normal that we saw in that period between the GFC and COVID where growth just was the perennial outperformer. Are we ever going to get back to that? I mean, to me, it seems like if the economy ever gets back to normal, we'll go we'll revert back to that

sort of equation where growth is sort of the perennial favorite. Um, is that notion just gone forever? You know, on the other side of covid Um, No, I don't. Look, I

don't think it's gone forever. Here here's what i'd say. Look, I'm in the camp that says that the period after the Great Financial Crisis, where you know, the United States economic growth was suppressed, where interest rates were suppressed, where inflation was suppressed, where capital spending was slow, where you know, productivity growth was full, uh, and you know wage growth was mediocre. UM. That that's actually the outlier in history.

And while we can completely understand why in an environment where long run real interest rates are consistently falling for almost you know, a decade going on thirteen years, where growth would structurally outperformed value. UM, we do think that, you know, we have not killed the business cycle. And because we haven't killed the business cycle, UM, we believe that you want to, you know, very oftentimes own more

cyclical or more value oriented uh stocks. And we're not sure that you don't want to this time, especially if you're in the camp that we are that says, we're pretty confident that we could actually pull off a soft landing this time. It isn't a slam dunk that we're going into this deep, deep recession where you have to get ultra defensive and you have to only own uh secular growers. Uh. And you know, our our bullishness on

the labor market is one component of that thesis. The second component is we believe that capital spending is going to remain pretty resilient and that one of the things that's really different in this business cycle is that, you know, COVID was a shock to business models and almost every single business had to re engineer themselves and think about how can I run this business with fewer people with less human contact? Right? Uh? And that has unleashed a

level of innovation and capital spending an automation across every industry. Uh. You know that we think is pretty profound and has some legs. So that's a very long winded way of us saying, Look, we don't think the business cycle is dead, and therefore we don't think value uh investing is dead. Uh. And you know, while there are a lot of growth oriented stocks that I want to own, right, I don't want to just own the nasdact blindly. I'm gonna pull

a mic and ask you a multi part question. Okay's I don't like to do it typically, but so can you talk about what you like within value and then on all the way On the other end of the spectrum, we've also had this resurgence in meme stocks and crypto, and I'm wondering how you would go about characterizing what is happening in terms of like the speculative stuff that's seeing a resurgence. Yeah. So you know, look, I think the speculative stuff is just as as defined it is speculative.

Uh It in our humble opinion was always premised on you know, market momentum and liquidity and the greater full theory. Uh. I think that that may be operating again here today. Absolutely nothing has changed to make the value proposition of of some of those um investing strategies any better. Uh. You know, uh, now that we're six months into a

FED tightening cycle, I just I don't get it. I understand that, you know, some inexperienced investors may look at their charts and say, oh goodness, look here was the high and now here's where it is. I'm getting a bargain. Um, I just I don't see that there was fundamental value there to begin with, so so we wouldn't be going there. But where is there value in the market. I think

it's there's a lot of places, a lot of pockets, right. So, Uh, you know, we're buying some of the more traditional value, which is in financials and energy and industrials and materials and mining, but we're also finding value throughout the healthcare uh sector, We're finding some across uh consumer services. Uh, there's some interesting things we think in home building. You know, our view is, yes, have we seen you know, a meteoric rise in mortgage rates and has that slowed the

housing market? Yes? Absolutely, But do we think the housing market is going to go into a multi year recession. No, we don't because we think that there's fundamentals supply demanding balances, UM, and so we think that there's some interesting to buy thanks to buy even among home builders. UM. Semiconductors we know have you know had a very uh typical textbook cyclical sell off most recently. Uh that there's going to be a time probably in the next three to six

months where I want to own semi's again. So you know, we're looking at all these these areas. Someday they're going to get semiconductor supplying demand in equilibrium. Someday. I don't know if it will be in our lifetime, but some someday it's gonna it's gonna happen, Lisa, you know they always warned guys like me at Thanksgiving, don't talk about religion, don't talk about politics. Uh, the bad news for you,

as though this isn't Thanksgiving dinner. So I do want to ask about politics a little bit, uh, because you know, the one thing you hear over and over again, and you read the researches that look mid term years, there's like a seasonality to the election cycle. In mid term years can be kind of uh historically a week time for the equity market. Obviously, there's so much going else going on in the economy this year that that who

knows if that's really playing any role at all. But I want to ask a how are you thinking about these mid terms? If if there is any risk or opportunities in the market, uh from what's expected. And also all this this flurry of legislation that we've just seen. The chips Act. You know, you're talking about semi conductors, uh and the Inflation Reduction Act, which is very heavily on green energy and that sort of thing. Has the market sort of priced out all the positives and negatives

from from all this? Or are you know, are there any opportunities that are popping out that you think the market might have missed? YEA so fantastic question, because again I think right now, UM, the market is maybe not fully focusing enough on Washington. So, UM, you know, just to answer a second part of your question first, UM, you know, I think that some of the legislative dynamics coming out of Washington are extraordinarily positive, uh for some

key sectors. To your point, Uh, the amount of money that's going to be invested in domestic semiconductor uh capacity unprecedented. Uh. The amount of money that's going to uh, you know, clean energy with this uh what's left of the build back batter bill? Um. I can't call it the Inflation Reduction Act. I just can't bring myself to do that.

But you know, and also just flying under the radar, you guys may have may have seen the Department of Energy is doing a two point five billion dollar interest free loan to general motors to help them uh invest in electric vehicle battery battery capacity. So there's all of these kind of initiatives which are also very good for economic growth. They're very good for capital spending, as we

know from history. As much as people don't like it from a political perspective or from a debt and deficit perspective, they do tend to create jobs and they do tend um, you know, to deepen capital and productivity in the long run. And I don't think that I'm seeing the market recognize you know, all of that yet, nor are they necessarily recognizing that they're are going to be a handful of companies uh, by the way, who have to pay taxes

who have not historically paid taxes. Uh. And that number is going to be about three hundred, you know, billion dollars off of SMP five hundred earnings in three And again I don't see earnings estimates coming down uh to reflect that yet. Uh. And so you know, I'm not exactly sure why analysts are being um, you know, so

uh so reticent about what. Maybe it's it's it's faith in the perennial ability for companies that dodge taxes perhaps of course, of course, of course, of course, but but you know, there's a little bit of that that I feel like it is right in front of their face. But to the bigger part of your question, which is the mid terms, Um, you know, without getting to the substance of the mid terms, because I don't know that

there is going to be any substance to the mid terms. Um. Uh. What I think is the bigger risk that no one has talking about. And I know that it's you know, great fodder for network news, and it's great fodder you know, for you know, the Internet and you know politically oriented uh media outlets. Um. You know, to to ramp up the rhetoric here. Um, but I think it's getting increasingly dangerous. And I'm not just talking about you know, as an American.

You know, the the issue about is our democracy under assault. It's really quite more pedestrian than that. And that is uh, you know, the United States capital markets, um, are the destination for global capital. We are the world's reserve currency. The US dollar is strong because of that. That gives Americans extraordinary purchasing power. It also allows us to finance what are increasingly humongous debts uh at below market rates

that we don't necessarily acknowledge every day. And so I think, and if we get into a scenario where, you know, people think that it is normal to litigate the outcome of elections and not seed com if we get to a place where we're not seeding congressmen in three, four or five states because we're litigating outcomes, I think that we've got to really start thinking about that. You know that that maybe this you know, politics, political war has

gone too far. Because our credibility in the world matters. It matters if you're if you're an investor in American capital markets, you're a capitalist. This matters, and and people need to start behaving as if it matters. And I'm in the camp that says, if we keep going down this path, there are going to be implications for the financial markets with regard to people's willingness uh and non

US citizens willingness um to engage. I think that's a super super important point that really hasn't resonated with a lot of people, especially if litigating those outcomes involves billy clubs and you know, fighting with each other with flags and breaking windows. Lisa really really appreciate Uh, your your thoughts today. I think we only have a limited amount of time left, so uh, we can't let you go

without getting to our crazy things of the week. So I hope you came prepared, Uh, vill Donald, let's start with you, okay, minus courtesy of my friend Julia Morpurgo. She's in the London office, so you remember I took a trip there and hung out with her a couple of weeks ago. But she had this story on Domino's

Pizza leaving Italy. So the last of Domino's twenty nine branches has closed in Italy after having just started in the country seven years ago, and the company had borrowed very heavily and had planned to open eight hundred and eight stores. I'd love to meet the strategic genius who decided, you know, what Italy needs is some Domino's pizzas and that that is a great one. That's pretty good. How about you, Lisa, have you seen anything crazy this week?

H crazy? I'd probably not for publication on this. Go ahead and spill. That's fair, all right, I'll give you mine then before we leave. Um, Vildonna, have you ever seen the movie Greece? Of course? Of course, okay, good. I don't know. I never know with your generation, if you've seen the classics, I know Lisa's seen it. I don't even have to ask if Lisa, yes, thank you. I even know that you know Olivia Newton John passed this week and you know her co star John Travolta.

You know couple, uh that they will You know that he sent his very warm condolence. Yeah, so r I p rest in peace to Olivia Newton John and in her honor. I have a uh Grease related crazy thing. It's an auction coming up um. And this information is courtesy the Robb Report website. By the way, remember the drag race scene in Greece where John Travolta races the

bad guy who's known as Creator Face. By the way, it was on back then, if you won the drag race, you not only won the car, you also won the girl. I don't know. I don't know if that's still valid these days. Hopefully we've we've progressed past that. But that used to be the case. So he won not only the hot rod but Olivia Newton John. So a very successful race for John, but the bad guy's car, uh, it was the black Mercury hot rod had the flames on the side and everything that is up for auction.

It comes complete with an autograph on the dashboard. Uh from Olivia Newton John Sandy herself, which who I gotta say. I think every guy my age had a crush on back in the day. Uh, but only once she went bad, when she went bad with the leather pants and and the that's that's that's that's what you want. A lot of hearts with that look. But so it's time to play the prices precise. Say let me hear you say,

it's time to play the prices precise. Now it's had a lot up for sale yet, so all we know is what the auction house believes will be the range. So let's go at the high end of the range. Uh do you start? What do you think the high end of the range. And I'm shielding my my notes here, so sitting next to you, Okay, I'm going to go

with two million, two million dollars, two million dollars. No, No, I want to advise one point to one point two million, one point three million, one point three million, is Lisa, is that price precise or you know prices precise? Rules might you say, is that price correct? You could say that one you could say that, but I am I that is an honor of what was the guy's name, Chris Whitman in London who gave us that precise at Lesa. Remember the you know you can go over or under.

You don't have to. You don't have to give an exact dollar figure. I think you're over. I think this is why she's a chief investment office and your every auction house's dream. You're always like a ten billion dollars for that baseball card of the guy who never played high and seven d for the Mercury hot rod. Hell's Chariot was the name of the car. But here's the ques,

here's the question. What did the n f T of it? Right? Yes, first we have to blow it up, and I guess you videotape that and make it an n f T. So we'll see. We'll check back on that and see if that's what happened. But at least I know you've got a busy day ahead and needs to get on with it. We can't thank you enough if your your insights and your time today, and I hope we can have you back again in the future. Thank you guys, a lot of fun. Thank you Lisa, take care, Bye bye,

What Goes Up. We'll be back next week and something. You can find us on the Bloomberg Terminal website and app, or wherever you get your podcasts. We love it if you took the time to rate and review the show on Apple Podcasts so more listeners can find us. And you can find us on Twitter, follow me at Reaganonymous well Donna hierarch is at Bildonna hierarch. You can also follow Bloomberg Podcasts at podcasts. What Goes Up is produced by Stacy Wang. Thanks for listening, See you next time.