00:00Aaron, the message earlier this week when it came to the effect of this war on markets was sit on
00:05your hands, don't do anything.
00:07One, is that message still, is that still the message right now?
00:12Well, I think it's difficult to take new cash and to allocate it for the first time in this market.
00:18But certainly there's been a significant amount of churning within a market in the United States that doesn't appear to
00:26have done much since missiles started landing in Tehran.
00:30I mean, the S&P is only down about a percent since last Friday.
00:34But if you take a look at sort of like the average S&P stock, Tim, year to date, the
00:40peak to trough has been closer to 13, 14 percent.
00:43So there's been a lot of movement, even technology.
00:46We've seen this huge software correction over the last year, and the fear is AI disintermediation.
00:52But if you look at, again, since Friday, which segment of the market has actually performed extraordinarily well, the software
01:00segment within technology.
01:01So even though software is down 19 percent, that segment's up 6 percent.
01:05So there's still lots of opportunities here.
01:07And ultimately, it comes back to, you know, widening the aperture as an investor.
01:12How much time do you have in the market?
01:15What are your objectives and where are their opportunities?
01:18Hey, Aaron, is it kind of hard, though, right now to figure out what the floor is that's fundamentally based
01:24for the investment environment as we try to wait and see how long this war goes on, as we just
01:30kind of wait for other policies from the administration tariff or otherwise?
01:34And then you've got the policies that are stimulative as a result of the president's big, beautiful bill.
01:41So I'm just do we really kind of know what the investment or investing floor is at this point or
01:46not yet?
01:47Yeah, I think, Carol, geopolitical events.
01:50And I don't want to, you know, take this particular war lightly.
01:55I think it could be more prolonged than not.
01:57And I think there could be some negative risks to it.
02:00And certainly there are actually some significant positive outcomes that I'm hopeful of here.
02:04But if you look at at the end of the day, valuation and you think about the long term or
02:11even medium term, like three, four years, we think that there are plenty of opportunities here.
02:15I mean, there was just a huge technology conference this week.
02:19And it was essentially open to the public by by one of the large banks and CEOs of major technology
02:26firms were talking about their business models.
02:29And it didn't have to do with defense spending.
02:31It didn't have to do with deficit spending.
02:33It had to do with consumer consumption and sort of the evolving patterns of artificial intelligence.
02:39And and that that wheel continues to roll despite this very unfortunate occurrence in the Middle East.
02:45It does. But I mean, I go back to oil prices and the inflationary effect of of of of that.
02:50I mean, with Brent up 40 percent, WTI up 41 percent just this year, barely into the third month.
02:57Gas prices up more than 20 percent on average across the country.
03:01That that eats into the way consumers spend and think about their their own savings.
03:06Absolutely, Tim. And that's something we have a keen eye on for sure.
03:10You know, to what extent will this 20, 30 cent move in gasoline prices just this week potentially move higher?
03:18And what to what extent will that weigh on consumer spending, consumer confidence, overall inflationary patterns?
03:25To what extent could that weigh on the cost of key economies like in Europe, particularly Germany, where they're focused
03:33very much on industrial and manufacturing?
03:35You know, we have an 80 percent rise year to date, not just over the last couple of years in
03:39natural gas prices.
03:41And I know that spot price, not contracted price, but eventually it does sort of weigh into the sort of
03:47cost of of manufacturing.
03:49But if we widen the aperture, we think there's still a pro cyclical trade that that is going on both
03:56home and abroad across materials, energy, which is received.
04:00Unfortunately, the tailwind's been war, but received a little bit of a tailwind since Friday.
04:06But frankly, the vast majority of the rally in energy that we've seen, meaning energy stocks, that is, came well
04:13before any missile started flying in Iran.
04:15And and that was probably due to price valuation and the expectation that we're going to continue to have energy
04:22demand and in different opportunities, not just an oil and natural gas, but across LNG exports.
04:28Sports. Yeah.
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