00:00We've had a correction of almost nine percent on the S&P 500 from the highs. There's some multiple compression
00:04in there, which begs the question, is this an opportunity? At the same time, we haven't cut earnings expectations. So
00:10what's your advice this morning? So look, I think we kind of have to take it one day at a
00:14time. And I know that's not a satisfactory answer. But the reality is that, you know, at eight point seven
00:19percent from the January peak, we are still within what we would call a tier one drawdown. Now, if you
00:23go back to the financial crisis, we've actually seen that there are any kind of use that as your starting
00:28point. We haven't had any
00:29drawdowns if you take the post GFC high that have ended up between 10 and 14 percent. If you go
00:36past 10, you're going to the teens. Right. And there's a little bit of an air pocket between the two.
00:40And I think what we're confronting right now is if this is going to stay relatively contained. Right. If this
00:47is going to be relatively short duration, you've seen things like AAII net bulls are between minus one and minus
00:53two standard deviations. That's enough. But if we are going to have a more extended conflict and we're going to
00:58start sort of saying,
00:59OK, this isn't just an inflation shock, it's a growth shock. The U.S. is not as immune as we
01:03thought. That is something that could take you into tier two drawdown territory. Growth scares tend to involve periods in
01:10which something new happens. We don't understand it. It feels like things are out of control and people genuinely start
01:16to fear a recession. We are not there yet, but we have to keep a very close eye on the
01:21narrative to see if that's where it's headed.
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