00:00So I guess we should start on SpaceX. You know, I know that you don't own Tesla specifically in
00:05your ETF. That is TGLR as the ticker there. But when you think about the style investing that you
00:12do, you know, high conviction, I know you take a lot of looks at these old economy companies that
00:18are sort of incorporating the new economy. Where does a Tesla fit in or rather a SpaceX fit into
00:24your calculus, especially when you think about the ripple effects that it's having around the
00:28public markets right now? Yeah, Katie, good to see you. Good to be with you. We own SpaceX in our
00:34growth strategy and in our thematic strategy, which is space, robotics, quantum and nuclear.
00:41And we have been accumulating it on weakness. We were in the first day, got a decent average cost,
00:49and then we've been adding to it. What we're looking for, particularly in the thematic portfolio,
00:55our narratives more than and fundamentals, but much more focused on that than valuation that are
01:03going to change. These are companies that are going to change the way we live in the next three to
01:07five
01:07to 10 years. So that that's important to us in TGLR. We do the same thing. We just require a
01:13growing
01:14dividend. And that tells us management's conviction about the future. So two years ago, we added Google,
01:21not a high absolute yield, but convicted dividend growth. And then recently we added NVIDIA and we've
01:28continued to add to it. If you're looking for a company with a growing dividend, I mean, doesn't
01:33that knock out a lot of tech companies that want to plow that cash back into their investments,
01:38especially now as they build out their AI capabilities? It could be a long time if ever
01:43a company like SpaceX issues a dividend and grows it. Yeah, no, you're absolutely right, Scarlett,
01:51that this is a core holding strategy. And then we decorate around it in our client portfolios. But
01:58this is a strategy that where we focus on dividend growth as an indication of what management sees
02:04in the future. But if you look at our top 10 holdings, and I'm just going to look at them
02:09because
02:10sometimes I can't remember. If you look, it's LAM Research. That's the top holding Broadcom.
02:16We own Google in the top 10. So there are Microsoft's in there, which has been better in
02:23the past, not so great lately. But that is what we try to focus on. They're fallen angel growth stocks
02:29where the dividend is important, but we're not buying these names for the absolute yield. So we also
02:36on Apple. We own Cisco in the portfolio and technology. And we're almost at a market weight
02:42in technology. I mentioned we added NVIDIA recently. We want companies that are growing
02:48the dividend because they're confident about the future. Nancy, let's talk about your AI theme.
02:54And you're not alone. A lot of people are into this. There's an ETF called Chat. Roundhill has it.
02:58It's up 100% in the past year. Now, in contrast, the software ETF, IGV, is down 18%. This is
03:06an
03:06interesting dispersion here because they're really mostly part of the same sector. You rarely see that.
03:12What's the case to go more into AI? It seems like, well, okay, this has had its run.
03:18But IGV is full of these really dynamic companies, Microsoft being one of them,
03:23that actually owns a lot of open AI. Why wouldn't we want to play a rebound in IGV versus buying
03:30more
03:30AI? I mean, I think you probably should. Now, not all software is created equal or equally. So we got
03:40out of CRM a number of years ago, Adobe a number of years ago. Most of the names that we've
03:47stuck with,
03:47some of the cyber software, some consumer software like Spotify, some of those names have,
03:55or many of those names have outperformed the market. But then there are names like ServiceNow,
04:00which has not. And so the question we keep asking ourselves is, are we wrong? And I think Microsoft
04:06will recover. Google is a software company to a great extent. So is Amazon. But there are different
04:15nuances. And so I think you want, if you're comfortable being in the ETF and sort of passively
04:21investing in the group, I think the good names will carry you. But if you want to be stock specific,
04:26and that is what we do, we do the research, we talk to management, we listen to the earnings calls,
04:31and we constantly reassess our thesis. Well, you're touching on what I was wondering about,
04:36and that is, you know, what your sort of average turnover or holding period looks like,
04:42when it relates to your different portfolios, including your ETF, TGLR. I mean, how long do
04:49you tend to hold a name versus, you know, maybe it's time to cut our losses and rotate out of
04:54this?
04:55Yeah, that's a great question too, Katie. We are long-term investors, obviously. Our average
05:01holding period in TGLR is between 20 and 25. I'm sorry, the average turnover between 20 and 25 percent,
05:08average holding period, kind of three to five to seven years. We've owned Apple in TGLR. And in our
05:14value portfolios, we've owned it since 2014. So yeah, we've trimmed around the edges, but we were
05:20early in and we're still in. So in our growth strategy, it's similar, 30 to max 35 percent.
05:27And our thematic portfolio is, and our 12th best idea is obviously lower turnover because we're
05:33high conviction in those portfolios. You know, Nancy, one of the big questions for this market
05:40is how much longer it's going to continue, right? It's up the S&P about 8.4 percent so far
05:46this year,
05:47and it's already had three straight years of double-digit returns. I know AI keeps giving it new
05:52life, but some people wonder whether we're kind of late in the tooth here for equities overall.
05:59How do you look at the longevity of this bull market? Yeah, I mean, that is the question,
06:05Scarlett. I think we're not late innings, actually. In the 90s, when I was managing money,
06:12we saw earnings growth of about 60 percent from 95 to 99, but stocks were up 220. Over the previous
06:20five years today, we've seen earnings growth 70 to 80 percent, 75 to 80 percent,
06:27and returns of about 80 to 85 percent. So markets, multiples are not expanding dramatically as they
06:34were in the 90s. You had John Chambers come out and say, you know, this technology is much more
06:41powerful than the internet and cloud computing combined. John Doerr of Kline Perkins said,
06:47you know, this technology is under-hyped, AI that is. So I'm not hanging my hat on that,
06:55but I am also not building portfolios only around AI. Even though robotics is physical AI,
07:02we do think that space and quantum are going to play a role, and we think energy sources are
07:07changing, and that's why we're focused on nuclear as well as SpaceX as a possible solution. So I think
07:14what is different this time is it's not just eyeballs on a screen like it was in the 90s. That's
07:20how we
07:20measured companies' eyeballs on a web page. Now it's a much more robust collection of technologies,
07:28and that's where we're focused as a firm.
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