Macro Trends and Market Risks: Marko Kolanovic’s Outlook
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welcome to the on the tap cast i'm dad and joined by Daniel is dani Harry.

I'm good day to be in the studio.

We got a lot to cover here today. Guy was just with me, but he's not going to be here with us for this portion. He and I just had a great conversation with marco colonic.

He is J. P. Morgan, former chief market strategist. We went all over macro. We did a bunch of geopolitical stuff.

He gave us a bit of his outlook and how he's thinking about the market right here. Great conversations to stick around for that. When I got a lot to do here IT is thursday into the clothes.

We got a big expiration friday tomorrow by the time you're listening to this, but just single stuck stuff going on here today. Some news that a amazon, some news about evi credits know bunch of other stuff you want to get to. But as we are recording future pal you have speaking in dallas, what do you say and what does that mean, Dennis?

So basis in dallas and saying economy is really strong doesn't see a real reason here to cut rates. And then he's not gonna change, just like he doesn't feel compelled to do IT. The one kind he made, which is into to me, is underrated as now as inflation is uniting much closer to a two percent longer on goal.

But it's not there yet. I think people had felt that as long as he was kind of training that way. So you take that with kind of the economic data we have seen recently when inflation has started to stop going down, right? It's up so kind of way and see, you know the fed fun futures I have been looked in the last few minutes, but Better than fifty percent, I believe.

still for next months. And the C M E. Fed watch tool has IT at fifty nine percent of got is down.

That was ninety percent yea, a week ago. And I think we're three cuts then in three, two thousand and twenty five. I think the five from futures are pricing in three point seven five percent, right? And we're sitting here roughly at range of four and hf to four point seven five.

So that's a big change less in the good side. The upside is the economy is strong. Earnings are reflecting some of the drunk, I mean, some of those names here. But again, it's a little bit of a wake up call. That's the first time pal kind of I would now call his cut last week.

have go back to the questions that he got the press or on november seventh about whether his job was safe or not. And we just talked about this with marko a little bit.

I think one of the underappreciated risk going forward, at least in twenty twenty five, is that let's just say trump just decides to fire um okay like for intensive purposes he puts somebody in there like I don't know that gates ask you really mean the son he started pushing around interest strates at the exact wrong time, you know so fetch pals kind of being smart about this. If he doesn't see inflation where he wanted to be, if he sees an economy that still have, he sees the rates where they are, where the dollar, where IT is. I mean, that's like an ingredient for igniting inflation. If you start pushing down fed funds.

for sure, I think what he may have said IT, again, haven't seen alive, but we're about credit spreads in journal. We've been talking about this thing for weeks has been the big driver easing financial condition, so to speak. He must see them to himself that saying IT, there's the easier that they have kind of been.

So he's sending that there's a little bit maybe too much you for in the marketplace. And so this week alone, credit sites downgraded. Kind of the us hide market credit reads haven't been this tight for you twenty something years like you are basically seeing IT abNormally high number.

So when we talk about credit press for people that are out there, everything is a based on treasury yield and just use the ten yield in general. So everything is kind of measured off of that. So in order to take the appropriate risk, you should be paid a higher rate than government securities, right, to take on risk of an investment grade, and therefore even more on high yield.

Triple sea should be rated. And you're not getting that in in credit sites. J. P. Morgan also put out a very somewhere notice well, on IT, so some may pay attention to anything.

Last night, this would be wednesday on cbc. S fast money. IT was Carter.

IT was guy. IT was myself. Melt kind of went around the horn. We talked a little bit about what was going on in the market and he said, oh, well, you guess all sound a bit, baron, to be Frank, i'm not that barrier really neutral because again, there's so much uncertainty to hear, there's very little that seems is going to take the stock market down. seasonality.

What we have six weeks or so until the end of the year and might take danny was like until we get into the new year. I don't see any reason why people start sunning stacks. Maybe there is some sort of event that we're not thinking about, but thoughts on that near term because again, let's just say the anticipation IT keeps going lower and lower the future for a rate cut.

Is that the sort of thing that could get some traders to say or some investors to say, listen, IT makes sense of trims of profits up twenty five percent a year last year. We're up twenty five percent of the year. I mean, how good is gonna be going forward?

And twenty twenty five, I think, trade office, can earnings grow enough, justify valuations, markets that simple, so you can get the fed pulling back a little bit as long as you get earnings coming up. But let me just from a cinema perspective, we've seen these bulbar indicators now they're pretty extreme right now. On the bullet ge side, you are always feel like a little bit of correction to your point.

This is bank of amErica survey. okay? The number of fund managers overweg U. S. Stocks nearly tripled to a net twenty nine percent, and city group said investors push their exposure on the S, M, P. Five hundred to highest and three years.

We always talk about how the chase we gets, the chase you get to this time from managers at a benchmark to certain induced, they have to start chasing. That's what you see to your point, what could happen that would cause something a dollar just running like we're seeing united to the quarterback, so to speak, as we're seeing right now. The irony is that trumps you kind of plan long germs to weak in the dollar.

So you're sing a lot of these mixed messages. And so I think people are still digesting not to see election. We're adJusting three quarter earnings. And the good news and is there are certain sectors and certain companies that are doing very well.

You can ignore the noise of the bigger markets, but you need to pay attention to IT and bigger onest with yourself on investors getting swept up in buying these indications. What is that? Is that moving up your and are you being atostor to self that evaluation as a problem?

So you just mention S P earnings and we think about what a disproportion amount S M P earnings come from those top ten mega cap text stacks and you think about how much of their sales come from sees. But let's drill into the dollar here. So we have a dixi that's up from about hundred, very near one o seven right now.

So danny, as we get towards the end of the year, as we start getting you know companies reporting mid january, late january for q four and you have a dollar that stuck here, it's at the high end of a multi year range here. Do you think that has the way on some forward guidance a little bit here for some of those mega cap multi national? Yeah.

I really is important to break that down even further. Dollar, euro and these people now they think the euro might go to parody, might go to one. I think it's down like to one five level.

And then the end to harp on that here, I don't have my partner guy here to talk about the end here, but we're back kind of one fifty five or one fifty six. So you really need to look on versus other currencies. Your point, some counties sell more europe.

Some country sell more to asia. But in general, but the dollars is having an impact on oil, the dollars having an impact on gold and the oil impact is really interesting because that is a real impact act on the consumer. So I think the way to kind of read IT in what is other things .

is that having an impact times for the consumer because you have could oil down at right sixty eight box, its low, I think over the last year has been about sixty six or so. And again, there's what's the news that .

a OPEC is really interesting. So I A, which is one of the agencies, right? And then you have OPEC. I A has always been more optimistic about the transition to alternative uses, the energy, right? And so they've always played down kind of the oil demand because they thought other users.

So when you see the I A raise, their forecast is more because the market share is shifting between an alternative part OPEC is kind of you to want to go with. They have been revising kind of lower the demand forecast again, a lot of its china IT goes back to china. China.

a lot of but so that's really important. So china's week, we know that and that's not likely to change anytime soon. Theyve had a few belts of stimulus right over the last few months or so, and IT hasn't really kind of got anyone particularly energized about what their contribution is going to be torch global growth going into next year.

But you also have hope, I guess, that trump comes in and is able to kind of calm things down in the middle. ast. And again, I don't know if there is any sort of premium that's been put on the potential for that to get worse. And I think about to your point about the dollar move here. So crude oil with what OPEC is telling you, I just don't see where there's a bid for at ending.

Well, again, I think lot of about the factors that go into tear point, geopolitics and soft. So I don't know. I feel like we're kind of no mans land here to level kind of you've had a nice call to pull back.

I don't see IT going much lower than here given geopolitics and given the fact that I think it's order Price in the china's week and I think the U. S. Economy continues show strength.

If the U. S. Economy were the weekend right, I think that would change the landscape. But all things equal, I think it's very value here. And I think it's interesting the energy stocks themselves to actually, I think out performed oil itself recently, the quarters were okay in decent. And if you do get a move out of some of these high growth names, they want an excuse to go in energy. So my argument of flip that would be, I feel pretty comfortable owning some these energy stocks if you were to tell me that oil is not going .

to break kind of sixty five here then, right? So this used to be an argument as as we think about electric vehicles, right? The lower oil goes, the less interesting IT is to old hick.

If you just think about the cost that's just up. So you know trumpet been saying on the campaign trail in day one, he was getting to get rid of the seventy five hundred R E V. Tax credit.

And you know, one of the things they think you have talked about, you elan mosque is new. Bro IT should be very much in favor of those tax credits because his cars relative to a bunch of others, you know, are very expensive. And then you think about the Price war that they've been in for less about two and a half years.

His cars are very uncompetitive in china, but that's not where you get the credit here. I think we're kind of full up in those first users of those first movers who want evs. Detroit pull back tesla is the option, but if you're going to be that much more expensive than other cars when you have oil trading like this and gas the pump going down. So talk to me a little bit about this because all the sudden tesla is for the thing.

Yeah, I know I know, you know this, but don't over think that we know why I ve said this few times in last few weeks. So what I must cause you up to trump s to make all these investigations, all the stuff go away. And as you've point IT out, and Kathy would have point IT out, if you can start to dream the dream on being approved for every regulation thing beyond getting out of all of his investigations, that kind of what it's been trading on.

But he's not thinking about what he is. The fundamental, by the way, fundamentals of his company, when was the last time he was even at one of the factories that guys flying around and you know yeah I think is on borrowed time with us. I'm sure you still have a massive impact, but I think they are getting a little tired of him right now in washington. But again, I I don't want to trade IT on that a matter of the name right now because IT doesn't treat on fundamentals. When IT does start treating on well.

it's interest, right? So for the last year and a half, it's traded on the Price, other cars and the competitiveness and you know the margins and stuff like that. In a lot of the anas who were very bullish on or a lot of investors were very bullish on IT, we're saying it's about full self driving and about autonomy.

And and so we think about that margin improvement, which I think you myself in a whole house of other people thought in that q three that they just yeah, there were something kind of funky going on there. But now to your point, people are not going care about evy tax credits and lower deliveries if they believe that full sell driving is going to come that much sooner because of the regulatory going to be pulled away. And then you can start pulling for IT when autonomy comes. And that's how their values that's .

why that to show you out.

you let's move on to other.

I do, I think this is really, and I want to get really sports too. So I, to those names.

course you are a good no. Well, when I have .

actually using .

drive, I find the user commodified, not particularly great. And you would think IT wouldn't be hard to figure out how to .

make when you make a deposit. And its congratulations on your deposit. I don't know what that even even mean.

Never coin be used. I know coin base actually when you use to make a trade, these to have confetti ing down.

right sucker.

Everything I say about coin is, is they took something that a lot of folks did not understand, and they made IT very easy for you to transact and and to do IT. And they had a lot education, but I thought was a very good APP. So my point is when I go to draft kings, and that's what I use and i'm not like a crazy Better anything like that. It's not yeah it's tude well, IT is if you know what to find IT.

you're right and they're are getting Better using A I to make an to to .

almost sense stuff .

out in A I play, I play think coming up current do do you think it's a human being that's .

figuring this in the greek? So talk to me about this new know this thing. They reported the stock was at one and ten percent.

So here we are again. It's about twenty five minutes into the clothes on thursday. It's only up about six and hf percent or so.

What went on there and what's so exciting finally for disney? Because this has been a story, a bit of a train rack over last two years. yeah.

So the streaming business obviously is now starting to make money. That has been IT was such a drain for so long. The sports content business, this is now evolving not just because of gaming, because it's gonna more kind of a all the card offering on something streaming networks.

And I will see disney knows what you're doing in that regard. So that's what to starting trade off of. That should warn a higher multiple than wear ring about who's attending kind of the theme park and their movie catalogue, so to speak.

So looking the stock today, and i'm not involved in the name, if he was one hundred and twenty five dollar target were morning sun and currently I that's twenty times two thousand and twenty five of higher margin businesses that are growing. So all the money, listen, still have a large customer acquisition costs. You're still going to be buying content.

I don't know. You just made a reference at e sp in bed, which is horrendous, by the way. In the irony that is does not a Better sports content company in the sp.

You're going to get that right at some point. So I don't know, man, like this is the forty nine largest company in the S P. Five hundred is in the downer that IT matters.

So it's why they held across. I think this is going to have a legs to IT. I think it's going to start to get revalued a little bit of netflix. So it's going to move from this traditional kind of company that it's been.

And I think it's gonna ter a new a new wave of sure. yeah. The thing is I think is tough here is that netflix is a very simple story. IT was about content creation. IT was about marketing costs to actually gain subscribers, not just here, but globally.

IT was basically one of the the streaming services that you had to have, right? And one of the things that become very apparent is that all these competing string service that really complicated, right? And when we know what's going on, it's been an arms race and it's been a race to the bottom for many the others, it's been a good place to be if your netflix and it's been an increasingly Better place to be if you're disney because they did just turn a profit for the first time on that, then you can start valuing IT that one piece of the business.

So IT becomes a Better some of the part stories that yeah what you want to listen.

they brought egger back in. He's doing a great job flow. Some names as successors knew .

when he took IT IT was gonna. Maybe three years, maybe what I was going to be, so gorman's coming and obviously a chair chairman and so whatever. But I want to make this move over from so we just talk about sports content and media companies, traf king spend, which is flutter.

I have put out numbers in the kind of over the last week and was really interesting as those are media companies also. And what's happening is there are starting your broadcast to be a genius sports and I, which had a great quarter as well. Bad vision and all these things, it's all kind of coming together right now.

So how you watch your sports a, you watch T, V, how you watch everything has been evolving and these companies. So I visey very, very different, different kind of coming at IT. And what's really funny is flutter fan, dual drafting ings, whenever you get a chance to buy these stocks on good sports matters, lock. So a lot of the favorites have come in the beginning of the city in the nfl. We laughed how whatever I said do you have for through the season or maybe three ago, i'm just going to stop betting and just buy the stocks of these companies .

because I want to be the house, whatever you buy the ah fact. So they have cut back .

their marketing. Well, they they're still spending a lot, but they find all it's a Better run company, much more diverse. And there still the biggest ogpa gratify.

yes. So think forty business is U S. Flutter, but there are the biggest in U S. My far and so in its much people in drafting ings. But again, these companies, I think are still not fully owned in genius sports.

Just to finish out on this, obviously that the sports data, sport rate or gene sports, both at great quarters. And I think they started get on people's maps here to take a look at these things. So again, still very positive.

We know we ve talked about those names. So yes, let's talk a little tear. You can have flag. S.

M, so this is a company, equipment company, that about a month ago, they had one of the worst bookings forecasts that i've ever seen. IT was down fifty percent from what what they had previously guided to a stock at absolutely destroyed. So now they come in, they report the results to stocks trading up.

And I know three percent I think I was up about six percent on the opening a little bit, which is basically feel at the charge it's like a rounding air yeah paired to where it's been in the last fifty two weeks. And so I think about this, and I say, okay, they came in, they talked up a big game as a released to AI last month. They said, what's the non AI stuff? The markets not appreciate in that.

And then I want to throw in a couple other things here. So A M, D, obviously a far second player as IT related in video and G P S, they're cutting some workforce here. This is a stack.

It's totally round trip. The whole move IT was like a great A I play is springing to the summer and now it's all the way back. And given both of those gains back, and if I think about this empty is down on the heard, you think about video that still up two hundred percent.

And then lastly, aimed after the close, by the time you are listening to this, where to know what their guidance is, what their bookings are. And I think this really important is that another stock that's well below is fifty two years, and it's performing the mazda, the S A piece. So give me your four one. Yeah.

let me give you all these kind of tech names. So starting with A M to your point, a month ago, they gave out disappointing guidance. They're giving two thousand thirty numbers.

Now to give people obviously excited, the stock is a good what ten fifty percent of its recent highs. And I do think that they're trying to make the business just like AMD. No, we're going to move more in the AI from all other legacy businesses. So they want people.

Cisco is really interesting today, right? They mentioned A I was mentioned eighty seven times from the call today that can go, right? So they beat numbers a little bit, they raise a little bit was fine, but they're not onna get more than one twenty two, twenty multiple because there are just.

by the way, IT has a fine multiple.

right? But but what i'm saying is all these companies in general, so again, you have this by vacation, kind of with tech in general, I want to play A I and I want to go here. Let me just round out by saying this super micro computer, we have been pounding the table about people to just be very careful for the last several months, ever since a hindenburg article game out again, there is no reason to use S M C, I must think shorted as a way to express your A I view that can't file their earnings as A D O J investigation.

Forget about they're na be dealers, just forget about IT right? But my point is this people have made their bets on how they want to play A I it's not necessarily through asml is not necessarily through A M D. It's certainly not through cisco.

Those are ancillary ways to play. They try with intel, but now to risk play. So again, we have a big number coming up next week with a video, right? So am and I have no thing, but then you and i've been around his memory chips and then there's PC and then there's stuff.

The legacy companies will always have to deal with the cyclical nature of those. The A I has been a play. And these companies as much as they want to start shifting and they have two degree until you see that, till you see that kind of a place.

I think these things, they're fine. Everything to talk about, video for second. So there four largest customers are google, microsoft, amazon, meta and actually a thrown in super micro S M C I. So if I look at what's gone to C I, so if that's the fourth largest customer, you have to think that if this company is going away, but that's going to be a drag on twenty. I I mean, yes, because if dell is going to take to share that S M C, I loss, it's not like they're just going to automatically scale up.

right or no you yes. But like we said last year, investors buying what in video is saying, which is there's little limitless demand, right? Then you shift that S, M, C, I, you replay that's where the balls will still say, okay, yes, you're right. But so I don't think people are don't want to put the two together.

right? Maybe shouldn't put that ah i'll just a microsoft one of the bigger customers. Microsoft has actually had not ticula ly easy time convincing their existing customers to upgrade a new from the copilot in the likes yeah if they're not getting the return on the investment as they build out their cloud businesses, they've invested heavily in OpenAI.

Last I just says, lina on is opening up an anti competitive suit against microsoft and how they're using asia, their cloud. okay. So that's the sort of story.

Maybe that's why the stock is massively under performing. It's up bason the year half as much as the S M P. And then as that is google not trading particularly well well off its fifty two years.

So IT seems like some of the enthusiasm about this genera I trade is winning a little bit. And then when you throw in a super micro and you have an absolute like like duster fire there, that's one of the names that was very widely is a filter associated with this thread. You know, you have to start getting your own tellers update.

I think when you look at the election, the change, administration, cabinet positions, lan icon pride won't be there. But more importantly, I don't think incremental the tech sector benefit from what has happened in the other sectors may have. So I think you're also seeing dangers relocation.

And these are two three trillion dollars, anis is just the math is just harder and harder. People are overweight them already. So to your point, I think that you're making is their Price to perfection. And again, when there's missteps, you're going to see huge cellos.

And that's why I say in general, no matter what sector, no matter what stock and you buy a stock for a reason, whether you haven't implied Price target, whatever might be if the stock doubles, your position is now twice size. That was in the risk of word has changed unless the growth can keep compounding. So it's a lot of large numbers.

I know guys on here, we talked about the yann a little bit. I just have to touch on gold because IT has had a pretty conseil off and you were dead on with your kind of twenty six hundred level that can potentially go to IT feels like a sling shot here though. IT feels like the bans going to be pulled back to point and what IT does make its move back up.

I think it's whatever reason that might be whether to dolokhov ling off. IT feels like it's a little bit more than that. IT feels like you had proba little bit more of the .

real percent drop from that recent hires that we have.

yeah. But what i'm saying is I think there was A A late retail came in and lisa talked about that, but Rachel really not there. But there was enough fraught that probably had come in gold to go to buy go.

They kind of said, i'm not i'm to go by crypto, whatever, do the same instead. And then the dollar obviously is a mechanism when it's stronger. That goal obviously off.

I don't know. I don't see the dollar moving much higher from here. I could be if IT does move much hier from here. We have other problems .

that dollar wouldn't go higher if like power, just signal that they're not a huge rush to lower rates in january. And then you start getting these rate cuts pushed out in twenty twenty five. Don't you think the dollars they put here.

I think it'll happen to be the rehearing around terrorists and the rehearsed. I think you'll see things being said, they'll be turned down a little bit only because when you want to change administration, you can be I going to be more just speak in general, move IT. I know they going to be anything that's actually occurring.

So i'm missing when you have a move like this. So hi, something has an impact that starts you you start to hear a little bit of noise, that's all. Yeah, yeah. I could be wrong on that. But my point is this end, if the dollar proceeds to keep going higher, because other issues you need to worry about that gold, and if things do break down, think gold will will go up its own merit. Forget about relationship to the dog.

So let's talk about again that dollar move and you get the gold lower, but you've seen the exact opposite. And bitcoin. So really the move in bitcoin from seven two thousand, I think he was trained like seven thousand on the eve of the election and then it's gone from seven thousand.

I think I got as high as like ninety two, ninety three thousand earlier today. This is all about regulating headwinds being pushed aside. And when you think about IT, IT never really proved to be a great store of value, you know, was actually outperforming IT for a good part of this year as bitcoin was going sideways between sixty and seventy thousand goldman new highs like almost every day this summer.

So again, does the euphoria in around bitcoin over one thing over the action, does that give you some pause? Because, you know, we talk to a marko about this. When you think about the wealth effect, well, he just mentioned this all the sun, you've trillion dollars and it's not just all here in the us. That's just of wealth that's just been created out of nowhere. And so i'm just curious like what is bitcoins move over the last week about risk .

taking right now? So I agree with the wealth of that is very important.

I think so lambard dealers .

are going to crazy market encrypt general. And I what people said that credit proves he tightened on that as well. Just, you know, the amount of money flowing in.

And so yes, think about this run in bitcoin. In crypto in general, the access during this ball run was never higher. Meaning all these etf, which you can all these things reason coin basis going up because they custody a lot of stuck.

So there was more ways to express IT rather than the traditional way, which really had issues in terms of. Your while whereas being stored at this is an easier way to do. And I think that's what IT is.

So I think that was IT. So you touch the retail community, they had Better access points to go by, and that's what's driving IT. Now saying that they can easily sell those things as if they had bought them.

So there is a level just like in a gold bigger, I think, in bitcoin crypt o in general that you could see a pullback in bitcoin for that reason. So I think you're bring up a good point. I think it's just access to be able to express the trade institutions can do IT safely.

but not to worry about your head. Gm, C, M.

exactly. I just think it's got to the point where it's matured enough to express IT. But the and IT is IT is incredible that the hands that is have been very strong. And I mean, we joke about hold all in all this stuff and whatever, but they is going to take a lot to shake the purest tear at this point.

the ones that actually owin that you can through the wallet activity that there's whales at, only the float is really small.

So yes, so again, I just think it's interesting .

thing to keep an iron as IT relate to sentiment. Cordia tion worth was unfast money with those. Last night was talking about the correlation to the aztec.

We've been bringing that up for years. Look what, in twenty twenty two, when the asai was down like thirty five percent. So this got hit a lot harder. Are we covered a .

lot of ground here. So then i'm going to see very soon we're been heading down to the C. M. A group tour championship.

Amazing couple days. Amazing an interview terrier. He is a CEO and chairman of cmi group.

You and I have a couple of things going on. They also have the gl fc is a global leadership financial conference. A lot of really interesting people.

By the way, vince von is one of the speaker. No way. Yes, I know he's one.

The guys should have played me. Yes, not believe you. And also I to be done. Really, really. Yes, we're going to down there monday and tuesday.

We're going to drop IT on the tape podcast on monday afternoon going going behind with that's going to set up for the week of checking out also. Marco collen that he's back, baby. He's GTA beyond with guy and me right after the break.

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welcome back to .

the on the tape podcast. Now we've had some incredible guest over. We all a fair, an institutional investor, right? I I hall of fame some years here every year yeah and you get you I think you get sort of put in if you make IT for such a well, I an colonic. Thank you for joining a former chief global market strategist and coherence of global research jp.

Morgan joining us here on the tape and order to have you you join us on fast money numerous times. Here you are with us on the tape. more.

Thanks so much going .

on in the world as we're sitting here. S M, P, basically six thousand, which I never in my wild dreams, thought we'd get to. A ash x, making all time high, seemingly enthusiasm on the back of this election.

A lot to die. Sec, but let's just talk about IT through the lens of the market. What are your thoughts and hears? We said, pretty skiving N S P. At six thousand.

So six thousand. And I look at IT through the lens of multiple, right? So if you want to look at the backwards trAiling twenty five, you know, forward looking, clearly, we all have a, you know, nobody has a Crystal to no earnings.

But you know even the optimistic folks will tell is twenty two uni happen to think it's it's even a higher multiple and that, you know so multiple is high. And you put that in the historical context, look, for instance, even the first trm president to write multiple, sort of seventeen. You you went from sixteen to eighteen, right? There was a big rally, right? Twenty three, lets say, right? Mutio is high, right?

So what would justify such a multiple, you know? And and you would really need to have almost, I think, everything going perfect, right? You will need to have all of smooth, peaceful transition.

You would need to have a sort of some global geopolitical ability, and you would need to have this like a perfect soft landing, andre acceleration. So and pick ups, the earning can grow from these levels at at the risk base, you know. So that's in isolation in U S.

You know now if you look at the sort of U. S versus the rest of the world, you know one sort of fact or interesting effect, U S. Market cap is now half of the world, world market cap, right?

Like so concentration is there as well. So we have like a high multiple in U. S. You have this relative crowding also from from other assets and other equity markets. So I think everything needs to go really well for that to be justified.

You know, through the lens of history. Twenty five, trAiling. Put that in context for people. I mean, they hear that without context is hard for them to understand if it's rich, if it's not rich.

Again, trAiling is always a bit a weird measure because you really don't know you know what happens. But let's look sort of what people expect as as as as a forward you know historic along term averages is below sixteen.

So like I think fifteen depends how you more recently, last decade was kind of between fifteen and and then we had this like a call with massive monitoring was then he shut up to twenty two, right? Like so basically we are not at the highs that we had that peak of that coffee rally post coffee rally, right? So it's it's unusual, right?

Because even back then, you could say interests with a zero or negative. We just went from very big sort of disruption, market disruption from cos. You could expect earning will grow.

We also had a tech kind of excitement back then with art, if you remember, and all these zoos and song is pallets and so forth. So right now we write that peak right at the top. And and I just don't see as much what can go now Better than so far, if you know.

So again, historical multiple code six to eighteen. So that would be so let's say now we take twenty two, twenty forward looking. So that's like twenty percent expensive to some historical average where a it's actually in lowered and not right. But if you look at the bad times when when you have sort of slowdowns, recession, you know, drops onto twelve. So i'm not saying we are going to recession, but let's say you .

all look some probability of that, you know yeah saw that, I guess toy two. So we have earnings recession. You do not have an economic recession.

And I think x those top fifteen or twenty names in the S M P five hundred, the other lets call IT four eighty, they traffic thirteen times. You know if you took the aggregate of all their earnings. So you just mention the concentration that kind of bugging little bit.

It's kind of bug dust a little bit. You just gave the percentage of us equity to the the global equity total. I think the max seven is like eleven or twelve percent of that. So as you think about like, let's say, you know that concentration here in the U. S.

Does IT start to bother you more as you're starting to see some of those names kind of cool out a little bit that microsoft, that would be google, apple never confirm the new hides in the S. M. P.

Five hundred and videos is driving a lot of the train IT. Tesla just joined the party. There was a couple of there and then there's some that are not trading particularly well under performing the S P.

Right now. no. So so the concentration was sort of something that, that we were frustrated for the last order to the three years and and and is still there, right? Also evaluations of their expectation, uh, expectations are there, and hence one could make a case.

So IT save this discord. Trams, presidency. Two point all becomes like that rotation of deregulation process, maybe some cutting taxes or what not, right? Which would have help sort of the of max seven, right? So everything else related to max seven.

And then one can also envision potentially some scrutiny with some of these mega cap tech names you like to think of facebook, think think even you know the A I stuff, right? One could see some headwinds, you know position in regulatory headwinds, you know. So we had a lot of headlines there.

So I think there is a case to be made for rotation. There is from the case to be made that some of these and and this is not a little bit more substance that you know some of the A I hype of sort of ordering, double ordering, triple ordering expectation. You know, I love IT from being a in that industry.

You know how people get excited about all things. They immediately, hey, look at that spend lot of money we can be behind. We can be perceived to be behind, know there was a lot of sort of high people wanted to show and talk about an any school, so they didn't have a problem. Spend a lot of money.

Now we need to see what that return. What things interesting about that guy. He's going to be one of the very few strategy who is actually talked about that.

That's really interesting because the so kind value mantra was like ask for forgiving this rather than permission. And that's something that really was prevailed in the sort of startup culture. But now it's worked its way into some of the largest market companies in the world.

And so they were benefiting from multiple extension based on capex, based on the promise of, you know, what will come in the future. And that's what's a little dangerous to me because it's again and again, we keep hearing about what are the use cases, what is the return investment for microsoft coal pilot deploying IT throughout you know this? We don't know yet. We're not going to know for a couple years probably.

I I agree. And and as again I I have been on that cynical, I have been wrong. I'm not i'm not of hiding.

But to give you a little bit background, in two thousand sixteen, I wrote a book on A I in asset management and finance, right? So machine learning in A I. So I was really sort of someone who saw that is a great opportunity again.

So it's not that i'm not educated about IT. I'm just a little bit sceptical how much can deliver and to make some of this product guy kind test to all of these products. And I got to the point to say, hey, okay, this is nice to have IT has its present coins.

IT can actually misleading something. You IT can give you some very confident result, which are being wrong. So so sort of sure it's going to evolve.

It's gonna grow IT. IT was growing in last decade already. I mean, we already all of us U Z.

I in our phones cameras. I does improve his iphone.

yes. So so I didn't happen all sort of last a last march, right with know. So so so I was just A I am still a bit more elastic that is gonna a be a bit of a period where things will cool down, maybe this order will have a hike up and then some of the sort of multiple camp hit an air pocket, right?

And and for that matter, than the whole market can hit an air pocket. So I see that as a risk. I I lot of that was sort of driving obvious last year, the more past year the market. So I don't see IT as a future website. I see as as a bit of a risk.

So i'm going to try to sort of synthesize some of the things that said, no, you talked about the us total equity. So the will share five, which by the way, I don't think they're five thousand stocks in IT. But there so wilsher five thousand and warn buffet something and he looks at IT.

It's that investable market which is now north of fifty five trillion dollars, I think divided by U. S. GDP, which gets us at north of now two hundred and two percent, his warning sign comes in about one hundred and thirty percent, which is one of the reasons, marko, I think he's now has three hundred and twenty five billion dollars of cash sitting on their baLance sheet.

You mentioned something no in the magnitude of the U. S. Versus the rest of the world.

IT is now more more in half of the investable markets globally with china being second. And U. S.

Is about almost five times the side of china for perspective. So my question you is some people look at that and say that's a good thing because U. S.

Should be in sort of the cap bird seat. Other people say that the magnitude of the, you know, the lead of the U. S. V of the rest of the world, and those are five thousand divided by GDP, those are all warning signs of a magnitude de, we've never seen before. So what is right and what is wrong?

You know, I happen to be, uh, it's hard to say no was gonna en, but I happen to be in the camp to say the warning sign, the warning sign. Now if you want to be other compassing, it's an opportunity. Then there is a case to be made for rest of the world investing right for the R O W, right through the never s are being sort of black or White, usually somewhere in between.

So probably one could risk manage and maybe slightly turn more cautious, take some chips of table from U. S. And if you still are bullish in the global cycle and if you don't think that we are going to have some sort confrontation with china is going to do that, then maybe the rest of the world is the place to be, you know, to sort of over way.

You know, as I said, I see there's a slightly more negative. You know, clearly, market was more or less strike line up twenty five percent this year. So, so far has been wrong. So hard to hard to find the table but maybe that making the till out of the max seventh and maybe even Frankly, out of the us. And equate bit and I would always wait ones are still yelling yields have wide recently.

Um so maybe it's not a bad place to be just perhaps even to whether this transition in the next few months to see how the sort of new government settles in because we will have that headline with those taribo are coming, right? You know and we saw that does an eighteen right market market doesn't like that. So I think that moment will come at some point, right?

Great point by two thousand and eighteen. We've discuss that a lot, especially because you know IT was jeromio. He was appointed by then president trump.

We have a similar sort of situation. I think it's a little bit more ten years is this time around. But when you think about the U. S, let's to say, versus of china, you know, we've been waiting for that chinese inserted growth, you know to be turned on since the pandemic. IT is really never sort of hit. And when you think about just the situation that they're in domestically and then you think about a heighten trade war, what would that mean if china were too weakened from here? What does that mean for global growth in general?

Obviously, uh, would be would be a hevin. It's not out of the question. I think there there there is going to be some first confrontation or some first a bit of um know the a erasing of ashes only to have some sort of deal at the later stage right in and what trm sort of did thousand and eighteen.

You know he started introducing this uncertain to the market, thinking that uncertainty is gonna strengthen in his so he's putting other party off of the baLance and he's gona get a Better deal. unfortunately. You know vx reprise higher and market multiple reply floor because of that uncertainty to i'm not sure that uncertainty might be good for negotiation, not good for, I think, market multiple.

And also, I think that, that is gonna. So maybe we have a little bit of now some sort of honeymoon period market really a lot and you know looks at the positives and we will get the negative as well. Like so the first president see back in those of six to twenty twenty, you had those first two years was was a honeymoon period and then the trade was started eighteen to twenty. And IT was just a constant volatility, constant downs, not a good day for .

equity vest. Let's pay little geopolitical and i'll go down the list of three different things. Will start with russia, ukraine. One would think that the likelihood of forcing both russian ukraine to the in table has been accelerated in a meaningful way.

What does that look like through the length of the market if ukraine would have to concede certain things? And what does that mean going forward, in your opinion? Because that seems to me the most likely outcome.

I agree that a sort of a more likely outcome in the sort of destination, you know the sort of process to get there might be bow domestic here and also would respect to sort of european allies um you know and perhaps you even within within ukraine internally. So i'm not sure it's gonna perfectly smooth and m to make a deal and you're gone to lose some of the territory and and that's IT and european and just has OK fine.

You know this is new policy and and let's get get over, right, right? I'm not sure. I think there is my first internal in within U S. Opposition of sort of a seeing very quickly the grounds to russia after so much investment from europe, from obviously uka number one and from european U S. H.

So I know people who just say, hey, okay, we kind of loss, right? Let's let's give them uh, h what they have now, or perhaps even more, could also be from russia. I in keeping mind, russia has been in this war, uh, invest a lot of human capital. Uh, no, they suffered a lot as well. Ukrainians and they may not also say, hey, we want now and also we wanted .

out that interesting that they might not want say.

hey, look on we we now have like a cortile upper hand or or perception of upper hand. So we gona go a little bit more further. I don't think they're go further much further outside of ukraine. And but they within this world first so they may not also immediately jump on this thing, right. Um and I do put some risk that there is gonna be domestic a bit of a sort of term as well.

That's not gonna be that easy for from just to say, hey, I write off crimea or I write off these four districts, right, the regions, so eventually might go there, but that could be some sort of internal searching. So searching of europe, beans, right? Keep see what's happening. Europe now, germany, you know, eastern europe, western europe, there are a lot of divisions there. So i'm not sure that trump will suddenly unify all of these forces and they will say, okay, know, you got us in russia, you know, whatever a little thing they want, right?

Or or a lot. Part two, geopolitics looks like microcode is can be the ambassador or to israel, if you've listen to more over the years. He doesn't even acknowledge a palestine exists.

He doesn't talk about occupied zones. He seemingly as hawkers, ious one could be in terms of that. That plays to israel's benefit. I think.

How does this play out here? Is to give israeli open, basically an open door to do something with the ran like that. Does this play out the middle?

Ast now certainly plays a bit more in that direction, right, you know, and they can take a more harder stance. Now it's remains to be seen what the response of iran is. Good shares response of iran is gonna be kind of to pull back to sort of but you know, a few weeks back, like you know, they are foreign minister said, hey, we have a bomb.

We have all the technical capabilities to do this to make a bomb, right? We just need religious leader to kind of sign IT off from religious, which is kind of little bit of B S, right when they have a heals signed off, right? So that's not not right.

So they can pull back now. But we could still be surprised on there and say, hey, we do have this bomb, right? And then decision will need to be made.

Does U. S. And israel go there? Military and and how that up? How he imports global oil markets, right? Like initially gives you know israel upper hand.

I do think you around will probably pull back, but I don't think they will sort of stop with their nuclear program, right? You like. So one where another, it's just time when these things will escalate. Rather, that is sometimes recals to go to be a result right now.

You know, speaking of this political, and I am sure you can ask about china, but if you look at the sort of this trump presidency and his visionary foreign policy and the sort of the previous government, uh, over current government, right, a visionary foreign, icy, different in so much that I believe trump wants to sort of cold, cold, shorten the front of the U. S. Global presence.

No, so he thinks that U. S. Is unstable internally and needs to fix that. Whether IT comes to the border and border where IT comes to these internal divisions, these cultural wars and and what not.

So he feels that that the priory plus globally shorting the front, so he would sort of short front in ukraine, right? So kind of see that part. But he's not having on israel in the middle east, right, that part of the front he will keep you know and then taiwan.

you know, okay. So let's talk about that because obviously, china has add aspirations for taiwan for quite some. They are very vocal about that. If you look at in the reti c seemingly gets ratched IT up. Some of the movements military have been ratched up as well. If you, if you follow, which you do, president elect trump is recently said in taiwan is going have to pay for themselves in terms of their protection, which I think is part of the plan of getting taiwan to buy like bombers and and arsenals and those types things sort to make sense. How much more likely, though, given this new administration, seemingly less a fair attitude about taiwan, do you think a china, taiwan an situation is, you know.

so so he gave his timeline right here. While he is a present, he will integrate IT you? I think he'll do.

I think he'll do IT probably quite a bit before and of his presidency to be able to sort of get a fame for IT. And and so I think I think he'll do IT the the time wine of that is sort of anyone's guess. You know, like a logic would be that while the U.

S. Is stretched, uh uh the Alice is a stretch in uh eastern europe and in the middle east. Now that sort of towards the end of that M A jump in, right? If there is no solution, you know, I do think that trump probably try to code and code broker some deal, which might be simply some sort transaction. Will he will get something from china for some timing of integration?

Because keeping mind like, you know, a few years back in the first time trump was on record one point, I, hey, look, this is sort of thrown of stone away from china and you know ten thousand miles or kilometers from U. S. We are losing this right.

Is the laws bottle. Philosophically ally for him is OK. Why do we need put the sites of political, look at the sort of geological, or even we need the semicon on doctors to, hey, bring them here.

It's more jobs for U. S. Nationals, and we don't have the exposure. I think trump was very much sort of willing to call IT again corner to sell and put IT as a part of some deal.

So is possible that might become part of his whatever great bargain with china will be. But that's going, I think, come after a lot of back and forth punching and and negotiations and and headlines moving the market. So so I do think eventually trump could sort of broke some deal effected long term. See that grab.

So it's interesting. So in in essence, or reliance upon taiwan would, if theoretically, go away if they were to bring basically chip manufacturing in the united states when the plan along the problem, of course, IT doesn't happen overnight. I mean, these things typically take seven to ten years to build up. So then my final question you is, what is the likelihood of all three of the things we just talked about sort of working out in a good gold oc scenario?

So first needs to be establish his governance here in the U. S. You know, which might not be perfectly smooth. Well, I think he does that fully, right.

His instinct will probably be to, you know, they were going after him like and I think he'll probably go after some people as right. So so first, that process needs to kind of go without any major said for the U. S.

right? So if that happens, you, I think trump will first love IT twist the hand ARM of sort of the sky to broke some peel. I think he's gonna play tough on iran, you know, an addictive line there.

And I think he's going to be working on this sort of china deal. You know, like so and I get this is this is my god feelings, this my guess, you know, I think trap would probably give up on on parts of ukraine. I give up on taiwan, put put this new shorter front in .

the middle .

east and could be fixed IT internally until U. S. Is stronger again, to start regaining the ground again.

right? So I think his because they say all like this country is falling apart, all immigration, we are invaded mentality. His mental is that we can't afford this level globe.

that the chips for where they may, russia, ukraine to a certainly tent china, taiwan, things in the middle east, fix things at home. yes. What are the growing pains in the market defending on the back of that?

Did you just talk about so IT could be volatile, right? You IT could be volatile. You the whole A I and calling max seven is is a and I think some related in the video and somebody things are related with also global exports, but that probably multiple sort of uh, would have to in the process dea little bit.

I think there will be up and downs like thousand eight and nineteen. He's going to with a big sort of a headline grabbing news that market is going to freak out, right? Like so IT could be really period of time like two thousand eighteen to twenty twenty.

I mean, forget about but when you have more volatility and and sort of the the honeymoon is over, right? Almost like honeymoon is going to last like a one or two months. And we had this like A I honeymoon and public honeymoon from the really he did really signal to markets i'm gonna ase and market kind of took IT right and ran with a dry like so almost like everything was probably front load in this multiple right.

So now I think is going to be some E P S growing pain to grow into that multiple with some uh uh geopolitical uh on settlement and introduce somebody to this. So I saw some of these strategies are putting these long time returns pretty low, right? So IT could be the type of environ that sort of equities go back into their historical trends or slightly below historical, keep in mind, S M P return on average six, seven percent, not five.

So yeah, maybe we can have like one or two years until this plays out a return like four, five percent. And then your bones are early four, five percent. Now in equities, you get some more volatility overall.

I'm not as excited. Well, I think the base case just to get about that political stuff is that a year from now, it's probably all in a president AR sort of situation if you think about IT, right, because your point is it's going na take trump and say, six months domestically to get things in order. You, you gotta get a lot of these camel people approved in the life here.

The republicans are gonna jacking around on a whole host of things. I think he was interesting that they did this blind ballot and they chose someone to be the speaker of the senate that wasn't somebody that was on the top of trumps list, right? So and then if you think about some of the folks that he's nominating to be secretary of state, rubio is a huge china hawk, right?

You think of the guy that he is suggesting that's gonna run defense, what he wants to pull out of ukraine. You know, it's interesting that the speaker of the house, my Johnson, is the one who pushed through that last ukraine 的 aid bill。 So I think a lot of that if is going to take a while to play itself.

So the idea of kind of investing or trading the market on those sorts of things, I know that would just be one input IT doesn't seem like that something is going to change all to soup, but let's go back to power for second. So he's supposed to be into the end of next year, right, is or into the beginning of six to a lot Better. Maybe it's just he realizes there is not a whole heck of a lot.

He can say inflation stays, pat. Let's say growth doesn't really accelerate here. Let's say rates stay where they are or go a bit higher because the fear is that you see a reacclimatise inflation and let's say the dollar stays here or goes a bit higher. And then obviously, tax cuts fine and they get extended, but they are already here. You don't mean so deficit spending, all that was of, isn't that really bad for growth in general?

I think that is right. As you said, do you know dollar you I was one of five, right, you know, give or take from the bottom ten percent rally, right? That does impact E P S, you know. And then and then as you said, despite the fact how much they cut rates are still restricted, right? And i'm surprised that sort of the more things in break coming, we had a little bit of break age.

The commercial real state the uh a while ago, right, we had a little bit of japan hick up this summer, but overall, you know we did not see yet the impact of the of those restrictions. Or you see IT the real estate in your city you can sell you know everything is frosting, right? So you see IT like in in little places, but no major a slowdown of consumer yet and that may as well come, you know and and uh, so to your point, still power will I will have a lot .

of saying that have we hit, in your opinion, that soft landing though? So we have, you know, unemployment four point one percent. We have growth about two point eight percent, right? We have inflation, I know, but three percent or soap. Does that feel like a soft landing?

I was not A A huge believer s in soft landing. So for me hard to sort of say IT is a soft landing, right? So I would love IT also point that you had this asset.

You know people look at there four one and suddenly there you know there's record number millions res, right? Look at a bit coin ninety thousand. And I mean, that's like a trillion dollars of uh, a paper will allocated in a on a short note. So asset Prices and asset valuations, I think, have contributed a lot to this what we kind of cause of landing. I'm not sure if that's like a proper soft landing or still little bit of a sugar high from the sort of twenty five percent markets, you know and some of these other assets, which could still turn out to go towards slow down or worse if there is a conference of factors. But certainly there was a recession, right?

That's that's a fact. So then mentioned the unemployment rate and over the sum of the sum rule kicked in the asm since back off that a little bit. I don't think she's a device and her belief that IT actually was trigger doesn't matter.

We've gone from about three point four percent. I think that is low. And the unemployment rate take to four three were now four one.

So her role was triggered. My question you is regardless of whether or not that is. Leading indication indicator at all is the unemployment rates s something you are watching. I I can speak for myself and say i'm one of these people who believe the unemployment ate surprised people to the upside in the markets, not prepared for that. What is your thoughts on the job market?

I was watching closely and state by state, secondary of adults, all all these things right? And IT was also of trending in this are the wrong direction, the wrong direction, right? And IT was also, uh, a sort of has scratching.

why? See, we care a less. No market was very much focused on the sort of power spilled on the max seven. There always explanation why the multiple should be higher because of the new technology, new fifth industrial, whatever you want, all right.

So people in look at IT, right, like we were or either know if you you are in the same camp, but we were a little bit problem wrong that they hey, short time doesn't at IT seems like he does. He doesn't at now that's not the only one. You you look at the consumer, the default credit, all of those things as well, right? So I don't think sort of soft landing is now a verdict and no risk of recession, whatever.

I think risk is still there, but not not at this level of asset Prices. You will need to have a bit of a sort of a feedback loop. You get markets down, you get crypto down, you know, then people would worry about IT again.

And also now there is still excitement of crypt. So there is excitement about markets is not gonna happen in the next few weeks, are probably on this year, is gonna fine online and eventual people um you know close their trading activity. So IT could be something sort of maybe passed q for earning season, right? Could be the dos here resurface, right? But I I don't think we are sort of out of the woods with the direction of of some of these indicators.

Let's talk quickly about that. Fund rate for last, I guess, year in three quarters has been on the average about five percent, let's say, okay, so we've tait IT down seven, five basis points from the upper bound. Let's just say they don't come down. You just call IT a little restrictive. I don't know you said a little, but it's right here.

The stock market in that time periods up fifty five percent or something like that, right? So how does the stock market continue to go higher if rates are not going to go much lower, right? Because they lowered the fed funds by what certify basis points since september and we saw what the time you did, right? yeah. So what's the bulcke from here, assuming that not whole heck of a lot changes, right, with with monetary policy in the lake. Er what's the bulcke .

for staffer's? My bulcke is that at best because of average annual return of six percent, I think it's actually lowered in that, right? I think we front loaded that especially these last like them as a eight hundred to six thousand.

If you look at this election, a pretty good at people into election. Now I was actually the resin. What's ever IT was just up and and more up, right? So I think that far was front, front loaded by at least like few percent, like two, three percent, and hands like a few average returns.

This is seven percent out. Like, okay, no, four to five percent right will be my case. Your point where yells are.

that's not a great rish reward.

That's not a great reward, right? And if something goes for and yells will go down, you know, I think you there is some a global c well theyll.

Be a flight to quality in the form of U. S. Bump, without question.

The flip side of the coin is what microsoft's, the U. S. Pod market. So that to me is what I don't think the market is, pricing. And I think the optimistic saying you to go in high because the economy going to get Better. I think other people saying you're missing the boat on this, you know it's all about debts and the need to basically issue more debt going photo over the next three years, I think fifteen trillion dollars or something that needs to be issued. That's why people like potuit Jones and stand trucking doll short to bond market.

Yeah no, there is. There is other as as he said, school of thought, sort of that. No, trump will be inflationary. The fact that he was twisting pales ARM in december two thousand and eighteen to cut, not to hide right now.

Now they are like little IT unhappy that a power cut, because going intellection IT, I kind of you stop the market, which in theory should have help democrat more. So i'm not sure that trump become disciples, say, hey, mister pology, why do you keep IT restricted? Because I want to stamp out inflation.

There is a chance that that inflation actually gets and trench, and nobody really cares to fix IT. And then also is geopolitical developments keep a running where bond heels could go up more right? Equity would, at some point crack.

People always say, what is that member force? Five, five, five, twenty five. But it's somewhere there.

We even spent what you kind of this really quickly. I think this is what we talk about, all the potential risks. I mean, let's just say trump because he doesn't really seem to have any guard rails on him.

They have the house. They have the senate. He's got the supreme court. Let's just say he walks in on january twenty first and set pal you out what they going to do. I mean, he's out.

And then what if they make the first reserve political right and they basically start lower interest strates? That could be an absolute disaster if you think about how far you are debt. And that is actually one of the more likely sort of hicky ups.

And here's a guy who has no shame. He doesn't care about repercussions and that's not opinion. That's just true, right? So is that a worry? Like you have that up on the list?

IT is IT is everything sort of geopolitics? It's it's under less right? And we saw a bit of a preview there again in the winter of thousand and eighteen to nineteen. There was a headline kind of, hey, i'm going to fire a while and then I think notion came back was just right because any market dropped a lot.

So he did that already, right? So he could do IT as well, right? So so uncertainty and fed and some sort of interfere, and there could produce volatility, right? Simply tram could make his policy, if you know, keeping the deficit eye and not caring about to where the interest and not care about stock market, right? See, appeared to he cared a lot about stock market in his first term .

because he had to run again.

He had to run again, correct? know. And he was little bit also on a thin ice with with levers of power he didn't have, and now he has.

And so he could, in a sort of popular faction, hey, you know what? Most of people sort of actually don't have a lot in stock, right? My base. So no, they slightly.

I mean, I think elon said something like, look, if we cut the government spending, might you know might not be sure to here, right? So so that could be another surprise. Any kind of beef power could be a surprise for the market.

And we had a lot of crazy to us like, who knows what could happen? You have something really out of the left fill happening. They are right.

That reminds me, you know, if you remember twenty two, what type of protests we had and you know it's not a question that doesn't repeat, right? So some of right. So these are all domestic ah domestic risks. You know then you have these international risks and then you have a sc risk employment and something like that. Then you look at the multiple I call twenty five backwards to twenty three forward and just say it's there now I do feel bad, right? Because you know, this last ten percent run up since always, what sort of I, I, I, I didn't see that coming.

Many people, I listen up, but I can only speak for myself. I clearly then in as well. You know, again, IT doesn't mean the things you're concerned about haven't gone away.

And at the point of and making a words be one thing, the market willing because all our concerns have been a swag somehow and things change things. The only thing that change, maro, is the S M. P. Five hundred. What hasn't changed though, is my admiration for you, and I want to thank you for joining us.

You are on the tape. Thank you so much, guys. I really appreciate.

And looking forward to IT again, I hope so.