00:00Mike, we haven't talked about these gigantic IPOs. What do you make of the, I guess, animal spirits, right, or
00:07else they wouldn't be here.
00:08And the mechanical effects on the market. Surely some people are selling winners to get in to whatever IPO they
00:16want.
00:17Yeah, I mean, look, the market's been very receptive not only to equity offerings, but debt offerings.
00:21I mean, it's been another kind of bonanza year. Not as strong yet as 2021.
00:25But, I mean, that's a sign of a healthy market, quite frankly, when you're absorbing this kind of supply.
00:29So it doesn't bother me. I think the collection of stuff, maybe all at once, can create some digestion problems.
00:35But there's plenty of liquidity out there. I mean, I'll give you one statistic which I think will help maybe
00:39understand this.
00:42Companies distribute income, whether it's through buybacks or dividends, and they do about $1.7 trillion a year.
00:47That's just income back to shareholders. Now, some of that's reinvested like dividends, but that's a lot of money, right?
00:52And then you have inflows from retail all the time and pensioners and asset owners. So there is capital out
00:58there.
00:58And so the fact that the market's absorbing these deals doesn't bother me. The collection in one quarter can create
01:04some, you know, disruption.
01:05But I think there's capital to absorb this.
01:08By the way, that goes to the heart of my main question.
01:11Watching this throughout the last months and years, right, because spreads have been so tight and equity indexes keep running
01:19up.
01:20Investors have enough money to pile it into gold and things like Bitcoin.
01:24Where is all this cash coming from?
01:27Well, don't forget, the bond market's been in a bear market for four years, okay?
01:30So what we're seeing is people are not reinvesting their bond proceeds, right?
01:34They mature and they're putting into things that can actually protect them against inflation, something we haven't talked about yet.
01:38Like the average asset owner is pretty smart.
01:42They figured out that, hey, the biggest risk going forward is inflation, which is kind of my thought.
01:46Then I want to own assets that will protect me against inflation.
01:49That's not bonds, okay?
01:50That's equities, it's gold, it's silver, it's other real assets, and that's what they're doing.
01:55So there's just a, there's a tectonic shift, okay, from the 60-40 to something that looks more like 60
02:00-20-20
02:00or even 70-30 depending on your, you know, your preference.
Comments