00:00There is this idea that you can diversify away from AI, you can diversify away from the United States.
00:06Why is this a mirage?
00:08Well, I mean, it's tempting, and diversification sounds like a good thing to do, prudent and everything.
00:13But like in an environment that is driven by only a few megaforces, we think there are five AI, I won't name them, demographics and so on.
00:22I'm bored of mentioning them.
00:24But AI certainly being the mega of the megaforces right now, you cannot really have a neutral position.
00:31You cannot, you know, be in a halfway house.
00:35So either you are with the AI and you buy the market or you go equally weighted, but you can see an equally weighted performance of the S&P over the last 18 months and you have massively underperformed.
00:46So there's not really like a halfway house and neutral positions.
00:50Same thing with U.S. market versus Europe.
00:52Earlier this year, it was, you know, appealing to say, well, a lot of uncertainty in the U.S.
00:58I'm going to try to be prudent and diversify away.
01:01That's an active bet against the U.S.
01:03It might be the right bet, but you have to do it with conviction.
01:06Well, just to take a step back and to push back a little bit, you could say, just to be extreme about this, that even equal weight is equally leveraged to the AI trade.
01:15Because right now, a lot of people are benefiting the productivity gains in the rest of the 493 will actually be driven by AI adoption.
01:22And that will lead if you do have conviction about this AI trade.
01:26So at what point is that actually the diversification away from this big AI mega theme?
01:31I don't think you're pushing, but I think you're amplifying my point, which is exactly right.
01:35I think this is, there's no real place to hide.
01:38This is the mega force driving everything.
01:42If it were to, you know, not pan out to the expectation, there would be, you know, you need a total plan B.
01:50It's a different portfolio you need in this environment.
01:52So it's not really about hoping you can have passive diversification.
01:56I think this is an active management of the environment.
01:58I think this is an active management of the environment.
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