00:00Yeah, I think it still can because the driver of equities this year have been earnings,
00:04and we've seen that far in excess of what's happening with just real GDP alone.
00:09And the earning strength really continues.
00:11I mean, we're seeing it not just in AI names, the tech names,
00:14but when you look across sectors over the last few weeks,
00:17we've seen positive earnings revisions,
00:19the bulk of which are concentrating in that 0% to 15% range,
00:23which is pretty healthy.
00:25You're a multi-asset portfolio manager.
00:28What assets do you guys like these days?
00:30So we continue to like equities, but our preferences are beginning to shift at the margin.
00:34So a couple months ago when I was here, I was talking about Korea.
00:37That's obviously been a market that's done exceptionally well.
00:39I think if you're a long-term investor, you know,
00:42it's still an attractive place to be when you look at valuations.
00:45But tactically, it is looking a bit stretched.
00:47You know, you just look at the performance versus its 200-day moving average.
00:51We're trading 70% above.
00:53Think about during the tech bubble.
00:54NASDAQ was like 60% above.
00:57In 1989, Japan was 10% above.
01:00So it does look tactically stretched.
01:01So we're beginning to rotate our preferences within the tech space,
01:04moving away from that North Asia into China tech.
01:07China tech?
01:08Yes.
01:08Really?
01:09So talk to us about China, because some people walk in here,
01:11well, not so recently, but, you know, a year or so ago, two years ago, it's uninvestable.
01:17You know, I can't trust this government.
01:19I don't know what they're going to do.
01:20And how do you think about China now?
01:21Yeah, I mean, that's created an opportunity where positioning is very low now,
01:25because investors have shied away from this market over the last several years.
01:29So when you think about positioning, it's at the 13th percentile right now.
01:33And as a multi-asset investor, we're also thinking about the role in the portfolio.
01:37It's quite diversifying to U.S. tech.
01:39Think about Korea.
01:40Korean exports are highly correlated with U.S. earnings.
01:43U.S. and China have a much lower correlation, which makes it additive to the overall portfolio.
01:47Can I nerd up?
01:48Yeah.
01:49OK, Mina, the Arnaud Harvey essay in Financial Analyst Journal takes Fama French from years ago,
01:55the simplistic growth in value, and they end up with a four-box solution.
02:01And their solution is just buy growth.
02:04Doesn't matter if it's cheap growth.
02:05Obviously, that's better.
02:06Or expensive growth.
02:08Talk about growthiness at Schroeder's and its enduring ability.
02:13Yeah, in terms of growth, you know, we continue to like that segment of the market, but increasingly with both
02:19equities and when you look at credit.
02:21Now, credit now dominated by AI names, these growth-year hyperscalers.
02:25We think it is diversifying to add pockets of value into the portfolio.
02:29You know, earlier this year, we liked Europe.
02:31We liked Japan.
02:32And I do think the war has changed some of those dynamics in terms of international diversification.
02:38Europe, tactically, perhaps still looks attractive.
02:40But from a more strategic positioning, we think other parts of the market, international.
02:44Such as?
02:45Such as U.K., Canada, continue to like Japan.
02:49So other markets, but shine away from the more value-heavy, like, Europe.
02:55You got in your notes gold here.
02:57I'm going gold here.
02:58We were at $5,000 an ounce.
03:00We're now at $4,500.
03:01Is that an entry point for gold?
03:03Yeah, we think this is a good entry for gold.
03:05So, you know, trading between $4,400, $4,500, that was the recent lows, and that's where we're back at
03:11right now.
03:11You know, the reason why I think gold has really struggled is because you did see this liquidity-induced selling
03:17in March and April.
03:19But the fundamental story is still intact when you think about central bank buying and the need for strategic reserve
03:25diversification.
03:26And if anything, I think the recent strength in the dollar and yields, which historically have been bad for gold,
03:32gold has been actually pretty stable over the last couple of weeks,
03:35which I think speaks to the fact that that strategic story is still in place.
03:39You mentioned the dollar here.
03:41You know, I think coming into the year, maybe the consensus was weaker dollar in 2026, but then the war
03:49in Iran happens, and we had that, I guess, rush back into quality here, safety of the U.S. dollar
03:54here.
03:55What do you think from here?
03:56Yeah, in terms of the dollar, we have upgraded our views.
03:59So we were in the bearish dollar camp in the first quarter of this year.
04:03We still see opportunities, actually, to be bearish, the dollar versus select EM currencies.
04:08But versus the G10, we think that rate differential and growth differential story is in favor of the dollar.
04:14And our key pick right now is to go long the dollar versus the Japanese yen, where that rate differential
04:19is still in place.
04:19Do you give me a level on that?
04:20Do you go through 160?
04:22I think we do go through 160 when we think about the intervention that happened a couple weeks ago.
04:28You know, that was at that 160 level.
04:30But the BOJ, we think, is targeting the level of depreciation as opposed to an absolute number.
04:36So as long as it's a managed depreciation, we think it can break 160.
04:39My book of the summer is Barry Eichen Green.
04:41His new book, Money Beyond Borders, is just absolutely fabulous.
04:45And the foolishness of intervention, actually, working in almost all cases.
04:51Let me channel the giant Mark Rubinstein of Berkeley and the basic idea of all those derivatives.
04:58And all the derivative study is the search for the hidden leverage.
05:03Every time around, there's a hidden leverage.
05:05Where's the hidden leverage in the system right now?
05:09That's a great question.
05:10And that's something that we're also asking ourselves.
05:12Where are those pockets of vulnerability?
05:14You know, in terms of leverage itself, that is another reason why we're starting to take profit on our Korea
05:19view,
05:19because you're seeing this explosion of levered single-stock ETFs.
05:24But other areas of potential weakness that we're thinking about for the second half of this year is the growth
05:30in IPOs that's going to be coming.
05:32We're looking at almost $300 billion over the next six months.
05:35Last time we had that much issuance.
05:37Are you going to buy Musk, Inc.?
05:39Well, the question will be, what does that all mean for the equity market and for animal spirits?
05:44And is this a potential sign of the late cycle?
05:47So, you know, is it enough to derail the rally?
05:49I can't keep a straight face.
05:50Probably not, but it will likely slow.
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