BlackRock Says Buy on Dips, Not Worried About a Pop

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00:00So I think a pop is certainly something which has a much more persistence to it and more

00:04something we're all looking at a huge amount this time versus previous times

00:08is the impact of the retail investor around it. Now that is going to be absolutely key.

00:14If you start to see the retail investor really losing that confidence,

00:18the nervousness is that you will start to see a bit of a vicious circle in terms of downplays.

00:22For fundamental investors, however, Kritty, that can be a real positive because you can

00:25buy things that have much, much lower valuation. If we think to Anna's point,

00:30talking about some of the luxury names that we've seen where you saw a real pullback earlier this

00:34year, a significant pullback. If you stuck by the fundamentals, those are the names that are

00:39actually starting to do well in Q4. So that will be actually key. I still wouldn't see that it be a

00:44pop. I still think this is something which has got a multi-year duration of which it's more a case of

00:49how bad might those pullbacks be at any point in time. If you'd have said on Liberation Day,

00:54we would be where we are now in terms of the market. I think we would have all been quite

00:58surprised at the outcome of the market. Let's not forget we've just had an earning season that has

01:04seen a real resilience. Fourth consecutive double digit in the US beats by two and a half percent in

01:10Europe. That is what is key for the market. So we're not nervous about a pop. It might just be

01:16that the pullbacks feel a little bit scary than they've done historically. But your sense is that

01:21you should still buy dips. Very much so. In the AI space in particular, which I think is obviously

01:26a key area that we're talking about now. The key thing about that AI story is the level of capex

01:31and the level of cash flow that these companies have. It is also about this circularity around

01:36the more chips that you need, the more the chips can do, the more chips that you need,

01:40and that circularity around it. And I think also the geopolitical political nature of this. AI is not

01:46just about making our work lives easier. There is much, much more to this. So very much so.

01:52Being selective within the names, that's also very, very important. This isn't just a kind of

01:56all in on everything. And I think the non-profit tech names is still an area that we would be

02:01particularly kind of nervous about really wanting to understand them.

02:03So you're still in capital appreciation mode rather than capital preservation mode?

02:06Yes. Yes.

02:07What would need to change for you to kind of think about altering that? Are your clients

02:12still as confident? Are they beginning to make decent gains? As you say, you've had double

02:15digit gains everywhere. Are they confident that that is going to continue? Or are they

02:19like looking at their portfolios going, that's been great. I want to protect that now.

02:23Yeah. So there's two things going on. It is the single biggest question I think anybody in our

02:27space is getting is, has this gone too far? Is this a bubble? And we're very much saying

02:33absolutely no, it is a building block of any portfolio at the moment. And in terms of what

02:38might we be looking at, I think one of the key things is if in terms of what the chips

02:43can actually do, that starts to fade. Because at the moment, what is very different to what

02:47we saw in, for example, the dot com rally is it needs this continual reinvestment of

02:51capex. It isn't just a one and done in the way that line pipeline is. So that I think would

02:56be key in terms of things that we're watching for. In terms of the portfolio, though, and

03:00I know this is such a kind of cliche thing, sense thing we talk about everywhere, the

03:05diversification of that portfolio remains absolutely critical.