00:00I do want to start there with the idea of this buy the dip moment. And, you know, we've seen
00:04in
00:04the past when you've had these big geopolitical shocks, you get a knee jerk reaction. Sometimes
00:09you get some lingering effects and things like oil or the commodities that are more directly
00:12affected. But specifically when it comes to equities, what is it that's drawing people back?
00:18Well, look, I think everybody seems to know by now that geopolitical crises
00:24present buying opportunities. And because everybody knows that, there's a lot of buying
00:30that occurs just on the news before the market even goes down very much. So there's a lot of
00:36that going on. I think also the market tends to look where this is all going. And I think
00:41the message from the market is this is not going to be the 70s all over again. This is not
00:46like
00:471973 and 1979, where we had energy shocks causing inflation, causing interest rates to go up
00:55and being very bearish for the stock market. Quite the opposite. It seems to me that if this turns
01:01out to be a short war and I think it I think the war is already over. It's just the
01:04Iranians don't
01:05know it. So there's still apparently a lot of soldiers firing at their neighbors in Iran that just
01:15are basically out of control. There is no command and control in Iran. But this war is for all
01:21practical purposes almost over. And I think if that's the case, if it turns out to be several
01:27days or a few weeks, then the markets looking beyond that is saying, well, this may actually
01:32increase stability in the Middle East. Finally, we may have more Arab countries joining the Abraham
01:38Accords with with Israel and just less terrorism in that neighborhood.
01:44And I do just want to point out the secretary of state, Marco Rubio, is speaking right now to
01:48reporters in Washington ahead of a briefing that he's going to give lawmakers. And he talks about
01:52this idea of trying to remove the Iranian Navy threat there and a big a lot of talk about that,
01:58not even necessarily about regime change, but the idea of removing that Navy threat, getting the
02:02Straits of Hormuz back and up and running in a somehow normal functioning way, which obviously would
02:08bring energy prices back down in theory. Well, from what I hear, from what the president said,
02:14it seems like their Navy has already been sunk. It doesn't look like they've got any naval presence.
02:18The only thing they can do is maybe from the land, because the Strait of Hormuz is relatively narrow,
02:24is shoot some drones and missiles at ships. And that's just going to take a few more days to figure
02:31out where they're coming from and to devastate those launchers. So the Strait of Hormuz, practically
02:38speaking, is open. The problem is insurance. The ships don't have insurance to be in a war zone,
02:46which they suddenly find themselves to be in. And if this thing gets resolved fairly rapidly,
02:52as I expect, the Straits will be open and the price of oil will come down rather rapidly.
02:58Given that that is your expectation, I mean, again, you take a little cross asset right now,
03:03would you fade some of these moves that you're seeing in the bond market, in the energy markets?
03:08It feels like when we take a look at the stock market, that dip was already bought. But would
03:12you buy the dip in treasuries, for example? Well, I think treasuries have been in a trading range,
03:20really, for about three years now, somewhere between 4% and 4.5%, maybe a little bit higher
03:27occasionally, maybe a little lower occasionally. But I think with treasuries, you're basically going
03:33to earn the coupon. As an investor, I don't think you're going to get much in the way of capital
03:38gains
03:39or capital losses over the next several years. Treasuries, in other words, are where they should
03:44be. I'm not even sure that the Fed is going to have to lower interest rates, given that the economy
03:48is doing well. And meanwhile, inflation is still a little bit on the hot side, as we saw
03:53in the PPI. So no, I would focus on just not doing anything, just stay invested in the stock
04:00market, stay invested in the bond market, have some gold in your portfolio. Nothing really changes
04:07from my perspective that the economy is resilient. It's dealt with shocks like this before and done
04:13rather well.
04:13real well.
04:13Let's get first.
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