00:00Perfect timing, but I know that this isn't a matter of trying to time the market.
00:04Why do you see a trade in small caps and mid caps as sustainable?
00:08Why would this ETF be attractive now?
00:10And it's not just valuation, although they're relatively cheap.
00:13I've noticed small caps seem to be behaving a little bit differently than they have in the past.
00:16It used to be you kind of needed a strong pro-cyclical economy for small caps to rally.
00:21They've been behaving pretty well on days where we've seen some economic weakness.
00:25So I think they're behaving in a little more rate-sensitive fashion than they have in the past.
00:29And with a couple, probably two more Fed rate cuts this year, I think that could benefit small caps.
00:33I want to ask just quickly about the conversion.
00:36I used to sit in a lot on the ETF IQ show, and we did see a lot of mutual fund conversions.
00:43Is that just because it makes them easier for people to access, or is it a more tax-efficient wrapper?
00:49Why do you like the ETF?
00:50It's certainly more tax-efficient.
00:51What we never want to do, we're a fundamental bottom-up equity shop.
00:54And what we never want to do is have an advisor who wants the alpha we can deliver, and we don't offer it in the right package.
00:59So for a managed account portfolio, the ETF has certainly tax advantage.
01:03You also have intraday liquidity, too.
01:07So on this idea of continuing the small-cap trade, how important is it that we get those rate cuts?
01:12Because earlier in the week, Matt and I were talking about a new, I believe it was JP Morgan, Michael Froehly, and the team there,
01:17a new call from them that we're not going to get rate cuts this year.
01:19And in fact, the next move will be a rate hike in 2027.
01:23What does that do to this sector, if that's how it puts out?
01:25And that's certainly not the consensus view, but I think small-caps would struggle if we don't get a couple rate cuts.
01:30You know, we're going to have a new Fed chair for the June meeting appointed in May.
01:34And so I think small-caps probably do need a couple rate cuts to rally, but I think we're going to get them.
01:39Shark?
01:39We've seen some pretty significant weakness on the employment front.
01:42I think that's what's going to keep rate cuts in play.
01:45By the way, I don't just randomly yell out the word shark.
01:47Although, that would be an interesting tick.
01:50That would be cool if you did.
01:51Interesting tick.
01:51No, Shark Ninja.
01:52I want to get to some of the stocks that you like specifically, because you always bring a few names to us.
01:57And I have an analyst friend who's obsessed with this stock.
02:01And he says they spend more than twice as much on R&D as any other competitor.
02:06So it's not just that he likes, you know, the margins and the fact that they're getting consumers to buy their stuff,
02:12but also that he thinks they have good products.
02:14Yeah, I try to bring you some interesting names.
02:16We're overweight at NVIDIA, too.
02:18A lot of people will come and talk to you about NVIDIA.
02:20So the theme for these stocks is the upper-end consumer is doing better than the lower-end consumer.
02:25So upscale brands, but still the upper-end consumer is trading down looking for value.
02:30We also want brands that compete on product innovation or product niche as opposed to relying on macro tailwinds,
02:36because we have seen some weakness in employment.
02:38So Shark Ninja would be an example.
02:40You know, they compete with Dyson's of the world at a little lower price point.
02:42I remember dropping my kids off at college, and there was a Dyson cooling fan and a Shark Ninja cooling fan right next to each other.
02:48I saw six straight parents go and buy the Shark Ninja fan.
02:51It was about 50 bucks cheaper.
02:52Yeah, I've done that with, like, a hair blow dryer that is much cheaper, and it's, like, exactly the same as a Shark Ninja.
02:57You probably never noticed, but you have a Shark Ninja cooling fan in the makeup room here.
03:01Really? Wow. Okay, we are fully supporting Shark Ninja, apparently.
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