0:00

So we've been talking about

0:02

the fiscal reckoning for a

0:04

year. And I think that's still

0:06

what's happening is we're in the

0:08

middle of it. So the reckoning

0:10

is here. And the bottom line

0:13

is I think that the government

0:15

will cut spending and or raise

0:17

taxes by about 3% of

0:19

GDP. And that's a big

0:21

move. And that's causing austerity

0:24

and it's causing downward pressure

0:26

on equity markets. Welcome

0:34

to Thawful Money. I'm its founder and

0:36

your host, Adam Taggart. When markets are

0:39

in turmoil as they are now, I

0:41

often emphasize that the most useful people

0:43

to interview are asset managers. Because they

0:45

don't have the luxury of merely having

0:47

an opinion on the road ahead, they

0:50

have to commit capital to their convictions

0:52

and be judged upon the results. Today

0:54

we've got the great fortune of having

0:56

the return appearance of one of the

0:59

most respected capital allocators in the business.

1:01

Jan Vanek. Jan is CEO of Vanek,

1:03

an asset management firm with over

1:05

$100 billion in assets under management

1:07

invested across a wide family of

1:09

ETFs and funds, spending equity. bonds,

1:12

commodity, digital and regional asset classes.

1:14

As we've done the past several

1:16

quarters now, Jan and I will

1:18

spend the next hour discussing his

1:21

latest macro and market outlooks as

1:23

well as where he sees the

1:25

biggest opportunities for investors right now.

1:27

Jan, thanks so much for joining us

1:30

today. I can't wait to dive into it, Adam.

1:32

Yeah, it's not like as much to talk about,

1:34

Jan, is it? No, a lot has happened and

1:36

right off the gate, right off the gate here.

1:39

When you run last time, I think I

1:41

sort of asked you, you know, to assess

1:43

the mood of the markets and you

1:45

had said cloudy. And I think

1:47

that for all the reasons why

1:50

you said that they've certainly been

1:52

validated since then. So congratulations on

1:54

making a good call. No, thank you.

1:56

I got some of it right. Some of

1:58

it wrong, but I got the. conclusion,

2:00

right, at least. Exactly. Well, hey,

2:03

look, that's all that really matters

2:05

at the end of the day.

2:07

So we're talking not even quite

2:09

yet a week after liberation day,

2:11

where President Trump really surprised everybody,

2:14

not by putting tariffs on, as

2:16

he said he was going to,

2:18

but the calculations that he came

2:20

up with and the severity of

2:22

the quote unquote reciprocal tariffs that

2:25

he slapped on. pretty much every

2:27

country out there. We're much higher

2:29

than many people expected and the

2:31

world is still reeling from that

2:33

right now. So, you know, I

2:36

guess I'd love some just any

2:38

opening words you have on how

2:40

that may have changed the game

2:42

here. And I know you've as

2:44

you have the past couple times

2:47

we've talked you prepared a slide

2:49

deck when you're ready. Let's just

2:51

get straight into those. Yeah, sure.

2:53

I mean, look, I think the

2:55

summary is that what we've been

2:58

saying is that It's the first

3:00

year after a presidential election and

3:02

every four years that's when serious

3:04

policy happens. Fiscal policy primarily and

3:07

then the Fed reacts to that.

3:09

And indeed that's been happening. So

3:11

we've been talking about the fiscal

3:13

reckoning for a year and I

3:15

think that's still what's happening is

3:18

we're in the middle of it.

3:20

So the reckoning is here and

3:22

the bottom line is is I

3:24

think that the government will cut

3:26

spending. and or raise taxes by

3:29

about 3% of GDP. And that's

3:31

a big move. And that's causing

3:33

austerity and it's causing downward pressure

3:35

on equity markets. So that's the

3:37

kind of summary of the presentation.

3:40

But what I would love to

3:42

do in the short time that

3:44

we have is go through the

3:46

details, because there's not a lot

3:48

of information in the press, I

3:51

think, about. how we get to

3:53

that number. And there are a

3:55

lot of comments that I think

3:57

need to be discounted. So I

3:59

look forward to kind of sharing

4:02

my analysis and getting your input

4:04

and the input from listeners. All

4:06

right, we'll look. Let's not beat

4:08

her on the bush. Let's just

4:10

roll her up her sleeves and

4:13

dive right in. Okay, so title

4:15

in the middle of the reckoning.

4:17

And I guess that's very resonant.

4:19

So let's just talk about my

4:21

conclusions. Again, taking a big picture

4:24

perspective on the market, it's the

4:26

most important thing that's been happening

4:28

is the profitate spending by the

4:30

federal government. Last year, it was

4:32

about six and a half percent.

4:35

of GDP were the government deficits.

4:37

And you know, people were talking

4:39

about the great America and America

4:41

exceptionalism. And to me, that was

4:43

just sort of a fake economy.

4:46

And I mean that because it

4:48

was because the government was stimulating

4:50

so much. Of course, our growth

4:52

was great. Of course, we didn't

4:54

have a recession. Of course, interest

4:57

rates stayed high. But we're switching

4:59

paradigms. And that's really what I

5:01

want to talk about. and I

5:03

think we're switching paradigms in a

5:06

major way. So that 3% of

5:08

GDP cut means austerity, means recession.

5:10

We also talk, of course we

5:12

have to talk about tariffs and

5:14

how that reinforces my conclusion of

5:17

my primary base outlook. And then,

5:19

you know, Vanak believes that there

5:21

are multi-year trends that investors can

5:23

take advantage of, and the ones

5:25

that we've talked about before. Gold

5:28

continues to be good and we'll

5:30

talk about Bitcoin. But we were

5:32

a little cautious on India in

5:34

the fourth quarter and I think

5:36

now that's more attractive. I'll explain

5:39

why. And last summer we were

5:41

bearish on semis and I think

5:43

that now prices have fallen to

5:45

attractive levels there. So I'll give

5:47

you some data to chew on.

5:50

So I hate repeating slides and

5:52

the colleagues said I wouldn't shouldn't

5:54

do this, but I just think

5:56

that when you have a multi-decade

5:58

slide, this is the type of

6:01

macro perspective that we advantage. love

6:03

and again this just shows in

6:05

the green line low unemployment yet

6:07

in the blue line high government

6:09

budget deficit and what we used

6:12

to call that Adam is two

6:14

feet on the gas right and

6:16

I think we're now taking both

6:18

feet off but let's get into

6:21

the meat of that so

6:23

last fiscal year we spent

6:25

six point seven five trillion

6:27

dollars We took in 4.92

6:29

trillion in taxes, which is

6:31

a deficit of 1.8 trillion.

6:33

That's 6.4% of GDP. What

6:35

I'm saying in my headline

6:37

here is my base case

6:39

is that that will shrink

6:41

by a trillion dollars, which

6:43

is about 3% of GDP.

6:45

I will explain how I

6:47

get to that trillion dollars.

6:49

I will also say what

6:51

I said when I was

6:53

traveling overseas to... India and

6:55

Latin America over the last

6:57

two weeks Every time I

6:59

say this no one in

7:01

Washington believes that we can

7:03

cut a trillion dollars like

7:05

if there are eight people

7:07

at the table Seven of

7:09

the eight are disagreeing with

7:11

me And and also I

7:13

would say it's very hard

7:15

to for people to kind

7:17

of articulate how we get

7:19

there. So let's let's do

7:21

that I'm just curious, are

7:23

you talking to anybody in

7:25

your travels there in the

7:27

Trump administration? Because obviously they're

7:29

saying they're trying to cut

7:31

the deficit by that or

7:33

even more if they can.

7:35

Well, that is the disconnect,

7:37

right? That is the cacaphone.

7:39

You have Elon Musk and

7:41

administrative spokespeople and cabinet officials

7:43

saying what I'm saying, but

7:45

it's sort of like what

7:47

Trump was saying with tariffs.

7:49

But people are putting such

7:51

a heavy discount on it,

7:53

right? They just can't believe

7:55

he wouldn't really do that,

7:57

right? It's just a negotiation

7:59

or he's pretending. And I

8:01

will say this is almost

8:03

a week after terrorists were

8:05

announced. He hasn't announced any

8:07

changes to those terrorists, but

8:09

I will apply a discount

8:11

to what the headline number

8:13

was last week. So I

8:15

guess all of us are

8:17

applying discounts is just how

8:19

reasonable they are. But you're

8:21

right, at face value, it's

8:23

a lot of money. So,

8:25

fog, and confusion. So my

8:27

base case is right here.

8:29

I guess I call it

8:31

the high case, but it

8:33

is my base case in

8:35

the middle of the deck.

8:37

where two million jobs are

8:39

lost and that is about

8:41

valued at $125,000 per employee

8:43

which is about $250 billion.

8:45

The 125 per person includes

8:47

benefits so it's fully loaded.

8:49

Now how do I get

8:51

to two million? If I

8:53

go to the first bullet

8:55

people, people say well there's

8:58

no way they can fire

9:00

two million people because there's

9:02

only three million federal employees.

9:04

Well that's true. But if

9:06

they have terminated 200,000 so

9:08

far and 75,000 have accepted

9:10

voluntary terminations. So we're almost

9:12

75, sorry, let me clarify,

9:14

400,000 of my 2 million

9:16

is directly from federal employees.

9:18

Okay, so we're almost, we're

9:20

275 on the way to

9:22

400,000 government employees. A little

9:24

more than a 10% layoff.

9:26

of the workforce. What no

9:28

one has any data on,

9:30

Adam, I mean, maybe one

9:32

of your guests does, I

9:34

just can't find anything anytime

9:36

I Google it, is how

9:38

many contractors are effectively paid

9:40

for a full-time basis by

9:42

the federal government? And you've

9:44

heard, you know, a range

9:46

from 5 million to 20

9:48

million. So some radical multiple

9:50

of the number of direct

9:52

employees. So of my two

9:54

million dollar two million employees

9:56

I'm saying 400,000 directly from

9:58

the government and 1.6. million

10:00

from that contractor base.

10:02

But again, it's an educated guess.

10:05

I have no, you know, other than,

10:07

you know, podcast interviews,

10:09

I really don't have a lot

10:11

of support for this. So that's why

10:13

I'm cutting that by half. So

10:15

I'm just assuming, I really think

10:18

that's what's going to happen,

10:20

but I'll apply some kind of

10:22

discount and call it out

10:24

125 billion. And let me

10:27

just explain where that fits in.

10:29

So here's kind of, I call

10:31

it 875, but let's call it

10:34

close to a trillion. So

10:36

125 billion is from the

10:38

layoffs, the two million layoffs

10:41

that I just mentioned. Then

10:43

I'll call 100 billion waste

10:45

fraud and abuse. Now, Doge

10:47

already says that they've saved

10:50

140 billion, right? But that

10:52

includes both employees and waste

10:54

fraud and abuse. So if

10:56

you want to call it

10:58

that way, they're halfway to my

11:00

total number. Now, of course, they're

11:02

saying it's a trillion dollars, Adam,

11:05

right? To your point, Yana's discounting

11:07

these. But and they're only what,

11:09

not even 90 days in yet. So

11:12

presumably, they're going to make a fair

11:14

amount more progress too. They say what

11:16

four billion a day, but and what

11:18

I really encourage. everyone to do is

11:21

write your own numbers, I left the

11:23

right side blank, right in your own

11:25

numbers, right? Because I just think

11:28

not enough people are kind of

11:30

flushing out their assumptions here. So

11:32

my tariff increase is a quarter

11:35

of a trillion. Now in 2024,

11:37

right, the base year that it

11:39

gave before, I think there's something

11:41

like 78 billion in revenue

11:43

from terrorists. So this is

11:46

250 on top of that 78

11:48

billion. The numbers that

11:50

came out last week

11:52

were estimates vary, but

11:54

somewhere between 600 and

11:57

800 billion dollars. So

11:59

this is. again, a big discount

12:01

to the numbers that came out

12:03

last week. I'll pause there and

12:06

see if you have any questions.

12:08

Yep. Nope. Nope. Keep going. I'm

12:10

following. Okay. So then, um, you

12:12

know, there are a couple of

12:15

Biden programs. The inflation reduction act

12:17

65 billion. That's gone. Biden increased

12:19

Medicaid. Medicaid spending by 200 billion.

12:21

That's gone. I mean, the House

12:24

has already indicated that they're going

12:26

to eliminate that. There are they're

12:28

talking about different corporate tax increases

12:30

tax on stock buybacks. It's here

12:33

in the kind of large font

12:35

footnote here, but business salt. I

12:37

don't know the IRAs mentioned twice,

12:39

but anyway, so there's they're going

12:42

to raise some corporate taxes. They

12:44

say they're going to cut 10%

12:46

of Pentagon spending, which is 80

12:48

billion. So that's how I get

12:51

there. And I don't think this

12:53

is a heroic assumption. No, and

12:55

actually, you don't have health and

12:57

human services or Social Security there,

13:00

which, you know, Trump has said,

13:02

we're not going to, we're not

13:04

going to cut new ones payments,

13:06

but there's still a lot of

13:09

potential waste fraud and abuse there.

13:11

Maybe you're catching that already in

13:13

the waste and fraud above, but

13:15

you talk to Elon and his

13:18

team, it sounds like they think

13:20

that there's a. There's a target

13:22

rich environment there. So I would

13:24

call your numbers definitely saying maybe

13:27

even kind of conservative. Compared to

13:29

what they say, absolutely. And I

13:31

did have a slide here just

13:33

for amusement. If you want to

13:36

see where hiring has happened in

13:38

the last five years, you can

13:40

see a lot in health care.

13:42

Some of that is through state

13:45

governments and Medicaid kind of programs.

13:47

And then you see consultants. And

13:49

then you see consultants. and then

13:51

leisure construction and manufacturing. So I

13:54

would imagine the contractor. numbers are

13:56

in health care and consulting. Well,

13:58

I know they're in some of

14:00

the consulting numbers. Yeah. And as

14:03

I've talked about other folks in

14:05

this channel, you know, if you

14:07

looked at job growth over the

14:09

past several years, it's basically all

14:12

the heavy lifting's been done by

14:14

government hiring. The actual private sector

14:16

job count has actually decreased over

14:18

years. So to your point, you

14:21

know, the main point you're making

14:23

here, Jan, what happens when you

14:25

turn off that's big it, right?

14:27

Right. Yeah, I mean, people say,

14:30

look, we're just resetting to 2019,

14:32

you know, when I'm feisty, I

14:34

call it fake recent growth, right?

14:36

But anyway, there's different ways to

14:39

look at it. So we've got

14:41

that. Can I ask you one

14:43

question about your list? So one

14:45

thing that's not in your list,

14:48

sorry, your numbers on getting to

14:50

your, your one trillion. So working

14:52

against this potentially would be tax

14:54

cuts, right? How much of an

14:57

offset could that be? Okay, so

14:59

the big tax cuts, right, the

15:01

cuts that Trump did in his

15:03

first administration were in effect in

15:06

the last fiscal year in fiscal

15:08

2024. So I'm assuming those are

15:10

just continued. We just roll them

15:12

over, right. So that's why they're

15:15

not in this number. But you're

15:17

right, that's a huge number, right?

15:19

I think it's like four trillion

15:21

or something over a decade or

15:24

some large number. Yeah, but now

15:26

they're trying to get some additional

15:28

tax cuts on top of that,

15:30

right? You know, we have like

15:33

weighed tips, right, the tax on

15:35

tips. And Social Security and overtime

15:37

and he wants to try to

15:39

hopefully nobody over making under 150,000

15:42

ultimately would have to pay tax.

15:44

I mean, we'll see what comes

15:46

out there, but it's yeah, I

15:48

mean, if they want to do

15:51

this through reconciliation, they can't play

15:53

around too much. But And like

15:55

the tax on tips like that

15:57

was sort of estimated to be

16:00

less than 20 billion and I

16:02

know that sounds like a huge

16:04

number but anything kind of less

16:06

than that. left off of this

16:09

list. Okay, kind of rounding us

16:11

here. There's so many, you know,

16:13

different things that can be added

16:15

in. Okay. And you're being so

16:18

conservative here that I'm with you.

16:20

A trillion is totally doable. Okay,

16:22

awesome. Now, just to talk about

16:24

tariffs, again, my tariff number is

16:27

probably a third of what was

16:29

announced last week. Of course, that's

16:31

short-term inflationary. But it itself is

16:33

contractionary, right? That's the headline. And

16:36

the whole point of cutting fiscal

16:38

spending is it's contractionary. And listen,

16:40

the politics around this are shove

16:42

it all into the first year.

16:45

If it's going to be detox,

16:47

according to Bessent, or even a

16:49

recession, as Trump himself said, should

16:51

happen in 25, so that when

16:54

you get to the midterms, you

16:56

know, the economy has moved beyond

16:58

it. Right, we're hopefully digging out

17:00

by then showing some upward momentum.

17:03

And the economy is coming into

17:05

this very strong. So that's another,

17:07

we'll talk about that. I just

17:09

I just like to make, you

17:12

know, to show how people don't

17:14

believe me at all. So here,

17:16

you just see, this is a

17:18

Deutsche Bank estimate not to pick

17:21

on them, but you know, they're

17:23

only estimate cut from six and

17:25

a half percent of GDP to

17:27

five and a half percent of

17:30

GDP as their best case. Okay.

17:32

Right. And I think part of.

17:34

discussing future investment scenarios is you

17:36

really want the broadest set of

17:39

potential outcomes like even if you

17:41

put a very small percentage shot

17:43

at it so anyway I you

17:45

know obviously so I think it

17:48

goes up here did the three

17:50

and a half percent level is

17:52

my my best case. And I'm

17:54

sure you get I'm sure you

17:57

get here but if that happens

17:59

I mean Wall Street's going to

18:01

have to do a massive repricing

18:03

right. Like this is the very

18:06

difficult thing and and in a

18:08

way like I said last quarter

18:10

our base case people if they

18:12

should just stay invested in a

18:15

diversified portfolio it's really hard to

18:17

time these things and especially with

18:19

tariffs I think it just reminds

18:21

us like you don't know what

18:24

day necessarily it's going to hit

18:26

and when the market is going

18:28

to price this in so I'm

18:30

going to say we're in the

18:33

middle of the reckoning it's not

18:35

over I don't think you can

18:37

If you're going to buy on

18:39

quote unquote dips, I wouldn't buy

18:42

all now, right? That's the really

18:44

bottom line. Stay invested, but it's

18:46

going to, this is not an

18:48

overnight thing. I think it's a

18:51

process thing where the market starts

18:53

to absorb all the details around

18:55

this. So anyway, that's my, I'd

18:57

love to get your perspective if

19:00

it's different, but that's kind of

19:02

my thoughts, Adam. No, no, no.

19:04

And again, this I keep interjecting

19:06

here. Let me let me let

19:09

you run because I want to

19:11

make sure we get your full

19:13

thinking here on the screen for

19:15

folks. No, I mean, look, so

19:18

just as I said, the headline,

19:20

3% of GDP in the contraction

19:22

of fiscal spending would not even

19:24

get us to normal. Right. So

19:27

if you look here, this is

19:29

the federal government percentage of revenue,

19:31

again, a multi decade chart, which

19:33

you know I'm a sucker for

19:36

18 percent. of our economy's GDP

19:38

has been collected by the federal

19:40

government, kind of regardless of what

19:42

happens to taxes, over the last

19:45

40 years. Spending is what has

19:47

changed, right? And we had several

19:49

spikes, but cutting 3% from 24.9

19:51

brings us to 21.9, which is

19:54

just kind of the average of

19:56

the last several decades. So you

19:58

could say that the Trump administration

20:00

would be normalizing federal government spending.

20:03

Wow. So which kind of gives

20:05

you a sense of how how.

20:07

deviated we are right now or

20:09

have been. Absolutely. And that's why

20:12

I've been talking about so much

20:14

of my atlikes, because I think

20:16

it's the overwhelming fact. And, you

20:18

know, hopefully in six months, we'll

20:21

be talking about something more interesting.

20:23

Right. But it's really important, though,

20:25

because it's, you know, the baseline

20:27

effect, right, where when you keep

20:30

two feet on the gas for

20:32

long enough, everybody begins to assume

20:34

that's normal. point of history. And

20:36

so the mean reversion is not

20:39

going to feel good because you've

20:41

gotten so accustomed to the old

20:43

way of doing it. Yeah. So

20:45

let's talk about sort of just

20:48

the bottom line here. So two

20:50

million in job losses, three percent

20:52

of GDP, that is flat out

20:54

recession and recessionary. You ask a

20:57

college freshman taking macro economics. Three

20:59

percent of GDP is a huge

21:01

hit. I mean, I don't. No,

21:03

if it's ever been done before

21:06

in the US, to be honest,

21:08

except for after wartime and things

21:10

like that. But now, let's talk

21:12

about how much this will affect

21:15

the economy. So some of the

21:17

government spending, so the theory is

21:19

government spending can be good for

21:21

growth because it has a quote

21:24

unquote multiplier effect, right? So it's

21:26

not just the government spending, but

21:28

those people then spend money and

21:31

sort of like you're boosting the

21:33

economy or economic growth, like 1%

21:35

of government spending will result in

21:37

like 2% of GDP growth. Right,

21:40

because they hire contractors and then

21:42

contractors go out and buy coffee

21:44

on the way to work. Yeah.

21:46

Excuse me. I don't think that

21:49

a lot of this spending. really

21:51

has much of a multiplier effect

21:53

at all. So let's take the

21:55

extreme example, you know, kind of

21:58

some of the USAID spending in...

22:00

Africa or the Middle East clearly

22:02

had no impact on the U.S.

22:04

economy. Yes, absolutely. To

22:06

take the extreme. Now, I

22:09

don't mean to be an overly

22:11

cynical New Yorker, but I know

22:13

from personal experience that if

22:15

people are not going to

22:18

the office, right, which federal

22:20

employees weren't, some of those

22:22

people were having second jobs.

22:25

So that, so I'm not sure. Two

22:27

million in job losses technically

22:29

translates into two million people

22:31

added to the unemployment rules

22:34

Yeah, that's a good guy. I don't want

22:36

to be overly cynical, but I'll let

22:38

people come up with their own numbers

22:40

But it's not one for one Yeah Now

22:42

let's talk about what will happen over

22:45

the next several months. We're gonna

22:47

have corporate earnings coming out,

22:49

you know, kind of over the next

22:51

several weeks and people gonna say

22:53

well Q1 was great. We made X amount

22:55

of money But I have no

22:57

idea what's happening for, you

23:00

know, going forward. And some

23:02

companies, consulting companies or software

23:05

companies that have lost government

23:07

contracts are going to

23:09

basically be announcing bad news.

23:12

We also haven't seen any

23:14

kind of cadence of bad

23:16

unemployment numbers. I can't imagine

23:18

that we cut 3% of GDP

23:20

without unemployment ticking up. Now

23:22

it may only tick up

23:24

to 4.5% or 5% But those

23:26

are like headlines to come in

23:28

my if this scenario is right.

23:31

And people will be wringing

23:33

their hands. And I just

23:35

think Adam that will lead to

23:37

again hard to time but

23:39

downward pressure on equities.

23:41

The good news is and we've

23:43

talked about this before is

23:45

that lower growth will lower

23:47

inflation and will allow the

23:49

Fed to cut rates. So

23:51

I'm going to put a number

23:53

on it. 200 basis

23:56

points this year.

23:58

This year. Okay, and you

24:00

know who would love that the most

24:03

is President Trump. Well, that helps homeowners

24:05

and it helps a lot of people.

24:07

So do we, what do we see

24:09

in the financial markets and a lot's

24:12

happened in the last couple of days?

24:14

So I want to include that data,

24:16

Adam. High yield spread. So this is

24:18

companies, money borrowed by companies that are

24:20

call it less on the riskier side

24:23

of the spectrum. And how much did

24:25

they have to pay to borrow money?

24:27

And you can see here, it's gone

24:29

up in the last couple of weeks.

24:32

This is updated as of April 4th.

24:34

But really, it's just a normalization from

24:36

extreme levels. So nothing to really worry

24:38

about. And then I like to look

24:40

at the cost of ensuring the payment

24:43

of US debt. You can see that's

24:45

ticked up interestingly, but nothing crazy so

24:47

far. So I do like to point

24:49

out, like I did say, the inflation

24:51

would come down. So a lot of

24:54

the inflation is in services, not in

24:56

goods. So it can't just be lower

24:58

gas prices with greater Saudi production. We

25:00

do have to see some of this

25:03

trickling down into the real economy. So

25:05

anyway, so this is basically the last

25:07

inflation chart. So hopefully this will fall.

25:09

So that's the story, if you will.

25:11

around, you know, how I think the

25:14

markets, the primary narrative around the markets,

25:16

equity markets facing downward pressure, and of

25:18

course I haven't showed a chart of

25:20

the 10-year, but the 10-year is 100%

25:23

reflecting a cut in spending. and the

25:25

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26:45

it so a couple quick questions

26:47

here one You

26:49

say inflation risk still a concern obviously

26:51

The whole tariff Palooza from last

26:54

week has a lot of people screaming.

26:56

Oh my gosh inflation is going

26:58

to scream because Prices of everything are

27:00

going to be higher going forward How

27:03

much of a factor if any do you think that's going

27:05

to be? so again,

27:07

my my number budget number

27:09

was 250 billion right which

27:12

is about a third of

27:14

what was announced last week.

27:16

I Definitely think I don't

27:18

have we don't have like

27:20

an official inflation forecast I

27:22

think it will be a

27:24

one -time thing anyway and

27:26

so I'm not I'm not

27:28

Overly worried about that overwhelming

27:30

of the whole thing, but

27:32

you're right That's definitely a

27:34

risk to this scenario Which

27:36

is that the the slowdown

27:38

in the economy or a

27:41

recession if it becomes a

27:43

recession Stays longer because the

27:45

Fed doesn't have the ability

27:47

to cut rates But I

27:49

think there's no question. We

27:51

arrive at the station Adam

27:53

It's just there's traffic on

27:55

the way there or there's

27:57

So it's not a kind

27:59

of permanent stagflation crisis

28:01

cycle that we had in

28:04

the 1970s. This would be my

28:06

estimate. It's more of a one-time shock

28:08

that takes a while to work its

28:10

way through the system, and then we

28:12

can't really adjust at the as fast

28:14

maybe as we would like. Okay, got

28:16

it. And that's where I was going

28:19

with the question. All right. I

28:21

think sorry, you didn't say it

28:23

explicitly, but I think you're a

28:25

thousand percent right. the Fed needs

28:28

the political cover of

28:30

lower inflation to cut

28:32

rates. Yeah, 100%. Yeah, and I'm

28:35

wondering, you know, we're seeing,

28:37

you know, we're seeing some

28:39

signals of potential coming

28:42

deflation. You talked about

28:44

the tenure, but oil,

28:46

its price has gotten lacked,

28:49

copper has been getting beat

28:51

up. So, you know, are

28:53

these things that start to

28:55

provide some some initial air cover,

28:57

do you think? I think they

28:59

help. And obviously it depends

29:01

on the inflation statistic that

29:03

you're looking at. But again, goods

29:05

inflation hasn't really it did it

29:08

did it did take up at the

29:10

end of last year. And we definitely

29:12

is not it wasn't helpful that those

29:15

those those things were rallying. But,

29:17

you know, I think they'll go sideways

29:19

from here. Okay, and last question

29:21

sort of on and I'm asking

29:23

you to totally guess here, but

29:25

how how if a recession does

29:28

manifest on the timeline that you

29:30

think it will how prolonged one

29:32

do you think it's going to

29:34

be? You know, I think people,

29:36

you know, recent memory COVID. Oh,

29:38

it was a blink and you

29:40

miss it recession, right? And it's

29:42

been so long since we've had

29:44

a prolonged one. Is this one

29:46

going to be more protracted

29:49

or protracted? hour of

29:51

discussion. So what I would

29:53

say is that prior

29:55

recessions typically happened

29:58

in a manufacture We

30:00

had an agricultural economy and then

30:02

we had a manufacturing economy. And

30:04

it was much easier to have

30:07

recessions in both of those than

30:09

in this sort of tech enabled

30:11

services economy. Because in agriculture there

30:13

was oversupply ag prices fell and

30:15

that would be devastating for the

30:17

farm economy. And then in a

30:19

manufacturing setting without computerization there was

30:21

overbuilding of inventories and blah blah

30:23

blah blah blah. I don't think

30:25

we're in a kind of recession-free

30:27

services economy, because the one risk

30:29

that I would say is how

30:31

much activity is tied to the

30:33

stock market itself. It's kind of

30:35

like a reflexive thing. So, you

30:37

know, if you want to say

30:39

the wealthier consumers, how much do

30:41

they cut back on their spending

30:43

because they're poor one K's and

30:45

their private bank accounts? are contracting

30:47

significantly. So it's a little bit

30:49

of a cyclical thing, and I

30:51

don't think we've ever lived through

30:54

it, Adam. So I think it's

30:56

something we don't even know, but

30:58

it's a great risk to put

31:00

out there. Okay, and I guess

31:02

in that world, then what happens

31:04

to the stock market is actually

31:06

quite important, because the negative wealth

31:08

effect, if it were a big

31:10

drop, would then reflexively make the

31:12

recession worse. Exactly. Exactly. And longer,

31:14

right, to your point. So don't

31:16

don't know the answer. Okay, really.

31:18

But it's interesting, you know, there

31:20

are a bunch of different commentators

31:22

with different views on this, but

31:24

because we haven't been through it,

31:26

it's hard to, you know, it's

31:28

hard to know. Okay, so enough

31:30

of that. So, you know, I

31:32

mentioned at the top, there are

31:34

a bunch of tactical views that

31:36

we have. So I just want

31:38

to kind of share that. So

31:41

I said listen we're bullish on

31:43

gold and Bitcoin big picture Gold

31:45

is part of demonitization tran

31:47

And I started

31:49

to quote the

31:51

numbers when we

31:53

started to get

31:55

bullish. Gold was

31:57

$2 ,000, now it's

31:59

$3 ,000, Bitcoin

32:01

was $28 ,000, now

32:03

it's around $80

32:05

,000. So we

32:07

still think the

32:09

directionality is good,

32:11

but I do

32:13

think short -term gold

32:15

is a little

32:17

stretched. It's way

32:19

above its 200

32:21

-day moving average. It's

32:25

starting to make headlines all over the

32:27

place. Again, bullish. That's why I included

32:29

the picture, but

32:31

I'm not sure I'd be adding

32:33

to it right now if

32:35

I had a good gold

32:38

physician. It's the highest weight in

32:40

our own portfolios that are

32:42

allowed for risk purposes. So

32:44

we're not selling, but

32:46

anyway, I'm just pointing out that's

32:48

due for a little bit of a

32:50

correction. You're basically saying you really

32:52

like it, but it's had a great

32:54

ride in recent terms and wouldn't

32:56

surprise you if there's some cooling -off

32:58

period, a bit of a pullback. But

33:00

you're still long. You're not changing

33:03

your allocation. It's

33:05

the best -performing asset this year

33:07

so far. And

33:10

this is over a one -year

33:12

period, gold and gold stocks just

33:14

to put it in perspective. So

33:17

let's just, if I could, just

33:19

talk about Bitcoin a little bit

33:21

because more advisors and investors actually

33:23

this year have actually engaged us

33:26

to talk about it than before.

33:29

And so this is sort of

33:31

my general view is that

33:33

if you're not an expert on

33:35

digital assets, then don't start

33:37

picking your own tokens and things

33:39

like that. Please give your

33:41

money to someone who really studies

33:43

this full -time. Like

33:46

I said, when we launched our Ethereum

33:48

ETF last summer, if you don't know

33:50

Ethereum's market share, then do not buy

33:52

this ETF. Anyway, so

33:54

I think there's some interesting stats

33:56

that I just want to share. Well,

34:00

if you go over every

34:02

time period ending April, so

34:04

I want to say that

34:06

Bitcoin's down this year, something

34:08

like 10 to 15%. So

34:10

despite that, Bitcoin against the

34:13

NASDAQ outperforms for every time

34:15

period. But despite the recent

34:17

underperformance and Bitcoin hit all

34:19

time highs in Q1. It

34:21

still beats it by, you

34:23

know, all you can, you

34:25

can read the chart, massively

34:27

over 10 years, but even,

34:29

even year to date. So

34:31

anyway, again, we're long term

34:33

bullish. Let me give you

34:36

some. Sorry, can I ask

34:38

your question on that? Sure.

34:40

Some people make the argument

34:42

that. You know gold is

34:44

a safety asset, right? It's

34:46

it's it's it's the anti

34:48

fiat trade It's it's you

34:50

know you want to be

34:52

there when the world wants

34:54

to run the safety And

34:57

obviously Bitcoin has many Bitcoin

34:59

proponents have said hey, it's

35:01

even better gold, right? It's

35:03

it's gold 2.0 whatever right?

35:05

But a number of people

35:07

especially in recent months before

35:09

the market really started to

35:11

sell off, but even during

35:13

have said I don't know.

35:15

Bitcoin seems like the most

35:18

risk on of assets, right?

35:20

And when speculative fever is

35:22

running, Bitcoin runs the most.

35:24

And so looking at this,

35:26

it does seem to make

35:28

a case that it's, it's,

35:30

it's very positively correlated with

35:32

the NASDAQ or, um, I'm

35:34

glad, I'm glad, I'm glad

35:36

we rehearsed these slides, Adam.

35:38

Oh, good. Okay, yes, go

35:41

ahead. Oh, that's what this

35:43

is. Yeah, that's what this

35:45

is. So this is a

35:47

green is what I was

35:49

just talking about, right? This

35:51

is an anti-bit coin slide,

35:53

right? So what this basically

35:55

shows, and I don't really

35:57

like correlation as a statistic,

35:59

but anyway, here it is.

36:02

So I believe this is

36:04

the 30-day correlation of Bitcoin

36:06

against the NASDAQ. And it's

36:08

to your point, if Bitcoin

36:10

is only. Let's say 1%

36:12

is perfect correlation. If Bitcoin

36:14

is high on this chart,

36:16

if it's highly correlated to

36:18

NASDAQ, who needs Bitcoin? You

36:20

can just own the NASDAQ.

36:22

And so the point of

36:25

this chart is only to

36:27

show that is a concern

36:29

for Bitcoin investors because post-covids,

36:31

suddenly the correlation, I mean,

36:33

it's not overwhelming. Okay, so

36:35

overwhelming is like stocks correlate

36:37

up here off the chart

36:39

like point eight point nine

36:41

to each other. But it's

36:43

it's much more positive in

36:46

orientation post COVID than it

36:48

was throughout its history. So

36:50

it's an it's an interesting

36:52

I don't know it's more

36:54

more traditional investors are involved

36:56

or exactly what this it's

36:58

happening, but My takeaway is

37:00

that we do use Bitcoin

37:02

in our portfolios, but you

37:04

have to be active about

37:07

it. Okay. That's one chart.

37:09

Let me show you my

37:11

other chart. Because another statistic

37:13

is volatility. So Bitcoin is

37:15

the white line, and that's

37:17

its volatility. It's still volatile.

37:19

Obviously, the red line is

37:21

the S&P. It's obviously become

37:23

more volatile. Did something happen

37:25

last week? Yes. Right? And

37:27

the blue line, I'm pretty

37:30

sure, is the NASDAQ. I'm

37:32

sorry, is gold. Gold. So,

37:34

you know, this is to

37:36

your point, like, yes, Ian,

37:38

that's very nice. I'd like

37:40

to just keep owning my

37:42

gold. Thank you. Well, if

37:44

you're owning it as ballist,

37:46

yes. Yeah. Bitcoin's

37:49

volatility against the NASDAQ, it's become

37:51

better behaved. It's become less volatile

37:53

on a relative basis. against NASDAQ.

37:55

Yeah. So- But as long as

37:57

those positive correlations maintain, the less

37:59

volatile it becomes, does the argument

38:02

of, well, why own Bitcoin and

38:04

just on the NASDAQ get stronger?

38:06

Because- Yeah, it's sort of like

38:08

another dimension to the same argument,

38:10

which is who needs it. Or

38:12

more importantly, I mean, I used

38:15

to have this narrative that Bitcoin.

38:17

as an asset that's growing up

38:19

or putting in other words, it's

38:21

like it's increasingly becoming mainstream as

38:23

more and more investor types adopt

38:25

it. And the question that we

38:28

need to ask ourselves is its

38:30

behavior changing now that there are

38:32

ETFs available right now that a

38:34

lot of people have downloaded the

38:36

coin base app and look at

38:38

it amongst their other investments. I

38:41

don't know. But I always like

38:43

to put the positive side of

38:45

an investment and a negative side.

38:47

I would say this is this

38:49

is the negative side. And maybe

38:51

it's too wonky. But it's really

38:54

if you're talking to investors, it's

38:56

a whole argument. Do you need

38:58

or do you want Bitcoin in

39:00

your portfolio? And this is what

39:02

I pointed out like last year

39:04

that with with the correlations higher.

39:07

It's a worthwhile question. And the

39:09

question that allocators are going to

39:11

be asking themselves. Okay, now I

39:13

might be I might be front

39:15

running some of your other slides

39:17

here, but so you said you

39:20

guys are long gold and you're

39:22

continuing to hold that your your

39:24

highest possible allocation right now, even

39:26

though you expect some sort of

39:28

short-term cooling off for pullback. You

39:30

said Bitcoin, you still are long.

39:33

I don't think I asked yet

39:35

the why on both of those.

39:37

So what's the why that got

39:39

you that has you long-term optimistic

39:41

about these two guys? Yeah, I

39:43

mean. These are both store value

39:46

assets, meaning their supply is relatively

39:48

fixed in an uncertain world and

39:50

as contrasting to governments with like

39:52

print and print more money. The

39:54

negative of the that is that

39:56

they don't generate income, right? Gold

39:59

sitting there basically generates no income

40:01

and neither this Bitcoin. Let's hear

40:03

it for argument's sake. So some

40:05

investors just say, well, you never

40:07

need to own anything like that.

40:10

I'd way rather own equities. The

40:12

argument is simply that investors have

40:14

demand for these assets in an

40:16

uncertain world. They want to hedge

40:18

themselves. And gold in particular has

40:20

gotten a bid, I think because

40:23

the. And we're going to talk

40:25

about the growth of India, but

40:27

the world is simply becoming less

40:29

US-centric. And the question then is,

40:31

okay, if you want to own

40:33

another currency besides the US dollar,

40:36

what are you going to own?

40:38

It's going to be gold. And

40:40

central banks are showing that they've

40:42

been showing the way on that,

40:44

right? Yeah, we've shown, I don't

40:46

have the charts in here, but

40:49

we've shown central bank buying, but

40:51

also individual buying. And so Central

40:53

Bank buying has been super high

40:55

the last three years. Individual buying

40:57

has been high. So it's just

40:59

a world that gets wealthier over

41:02

time, especially Asian countries, China, India,

41:04

Southeast Asia, their natural buyers of

41:06

gold, just as a part of

41:08

their normal portfolio diversification. So that

41:10

is, you know, and then when

41:12

the US has seized like Russian

41:15

assets, that in particular. made a

41:17

certain set of countries say, well,

41:19

I want to own gold in

41:21

my vault. I do not want

41:23

to own dollars held by a

41:25

US bank when they can take

41:28

that away from me at any

41:30

point in time. Yeah, yeah. So

41:32

it sounds like you think that

41:34

obviously that move was a really

41:36

important one, kind of a seminal

41:38

moment for national reserve strategy. Oh

41:41

gosh, you know, we don't want

41:43

to be that vulnerable. We got

41:45

to buy something else. Okay, gold,

41:47

gold lets us do that. Do

41:49

you also think that liberation day

41:51

is sort of added fuel to

41:54

the fire of just the U.S.

41:56

is just We don't know where

41:58

they're going to do next. And

42:00

so we got to find some

42:02

way to be a little less

42:04

dependent on them. Absolutely. Absolutely. And

42:07

what I was going to say

42:09

as well is that gold has

42:11

performed in a variety of US

42:13

oriented economic situations. So when the

42:15

dollar was strong, gold was actually

42:17

doing well, when the dollar weakened,

42:20

it's continued to make new highs,

42:22

all-time highs. So interest rates were.

42:24

you know rising and then they

42:26

were falling and gold still basically

42:28

rallied you know as we've been

42:30

talking about for two straight years

42:33

so it's it's less US-centric than

42:35

it used than it used to

42:37

be which is really the point

42:39

of the asset. Okay and in

42:41

given that you know if if

42:43

the world is I mean they're

42:46

not going to give up on

42:48

the US Treasury in total for

42:50

a long long time and hopefully

42:52

never but you know they're There's

42:54

greater appetite for something besides treasuries

42:56

to fulfill that same function, right?

42:59

If we go into this recession,

43:01

you think we will. If the

43:03

markets do have a tougher time

43:05

later on this year, and there

43:07

is a safety trade, do you

43:09

see gold is, A, do you

43:12

think capital will move to gold

43:14

as part of a safety trade,

43:16

or do you think gold might

43:18

get dragged down for some reason?

43:20

And maybe might the effect on

43:22

the safety trade be a little

43:25

bit more pronounced this time. because

43:27

people are a little bit less

43:29

likely to run to treasuries for

43:31

safety that like to look for

43:33

something else. That's a great question.

43:36

You know, I let's come up

43:38

for a name for this recession

43:40

and I'm going to call it

43:42

a shallow recession. Okay. You know,

43:44

and so I think if it's

43:46

an orderly market which basically so

43:49

far it's been except for last

43:51

Friday, and a shallow recession, I'm

43:53

not sure that ends up being

43:55

a big marginal. Adder or subtractor

43:57

from gold demand. So I kind

43:59

of think that these regular trends

44:02

again may not be so affected

44:04

by you, it may not be

44:06

dominated by the US and

44:08

what's happening. So that would

44:10

be my base case that

44:12

gold could probably just

44:14

rally right through that. But

44:16

it's a point that really

44:18

depends on how it plays out.

44:21

Let me ask you the

44:23

similar question for Bitcoin. recession,

44:26

whatever severity of recession, do

44:28

you expect Bitcoin to act

44:30

as more of a safety

44:33

trade, you know, flight to safety,

44:35

or do you see it maintaining

44:37

more of its speculation

44:39

on steroids and therefore it would

44:41

get more hurt along with the

44:44

other speculative assets? You

44:46

know, I'm a. still a core Bitcoiner

44:48

so I don't think it's just a

44:50

substitute for the NASDAQ. I'm you know

44:53

pointing out the negatives on this slide

44:55

but I'm not that's not my my kind

44:57

of base case. My base case is it's

44:59

an asset that will continue to

45:01

be adopted and and we haven't even

45:04

really seen institutions getting that

45:06

involved in Bitcoin or government.

45:08

What you've seen actually interesting

45:11

over last year is a lot

45:13

more corporates. buying some Bitcoin for

45:15

their balance sheets. Yeah, this is

45:17

the Michael Saylor strategy, right? Yeah,

45:19

but not even, but even Michael

45:22

Saylor, and I never would have

45:24

predicted that like game stop and

45:26

maybe game stop, but right, some

45:28

other companies is very, very

45:30

interesting. So, no, I think it's

45:32

just a general, you know, general

45:34

wealth demand for a store value

45:37

asset and diversification. Okay.

45:39

All right. Sorry, I'm sorry to

45:41

have interjected with so many questions

45:43

here, but the problem is you

45:45

keep throwing up these fascinating charts. Well,

45:47

anyway, so that's where we're on

45:50

Bitcoin, the cautionary tell you just

45:52

want to interject, right, is if you

45:54

believe in the happening cycle, you, you, 2026

45:57

will be a bad year for Bitcoin.

45:59

So anyway. we'll see we can

46:01

talk about that when we

46:03

get there but okay but

46:05

if it does prove to

46:07

be I'm assuming you would

46:09

say that that's pretty good

46:11

opens a pretty good entry

46:13

point or accumulation point for

46:15

the long-term Bitcoin investor correct

46:18

and it'll probably be a

46:20

little bit less volatile than

46:22

fire prior corrections okay but

46:24

let's anyway well so so

46:26

tactical play or tactical play

46:28

or tactical was is

46:30

golden Bitcoin. Okay. Next, let's

46:32

talk about semiconductors and technology.

46:34

So just to really quickly

46:36

recap last summer, we saw

46:38

this multi-decade chart that showed

46:40

that growth was as overvalued

46:42

or valued against value stocks

46:45

as the internet bubble, right?

46:47

And last July, wherever that

46:49

slide is, but anyway, last

46:51

July. We basically said, tried

46:53

to be cautious on growth.

46:55

And that was also reflected

46:57

in the fact that the

46:59

ratio of the S&P equal

47:01

weight bottomed here around the

47:03

internet bubble, and it also

47:05

bottomed in 2024. It says

47:07

23, but it's a big

47:09

chart. OK. So we said

47:11

lighten up on technology. Just

47:13

to. interject since then we've

47:15

been going to what VINI

47:17

calls the phase two of

47:20

AI which means the first

47:22

phase was sort of like

47:24

just by invidia blindly and

47:26

now other things are happening

47:28

the rest in the S&P

47:30

is starting to adapt AI

47:32

technology so it will spread

47:34

throughout the stock market invidia

47:36

has competitors even competes against

47:38

its older chips as Deep

47:40

Seek pointed out. But it

47:42

will be driving energy demand

47:44

for nuclear and natural gas.

47:46

Okay, so that's what's happening

47:48

in the cycle fundamentally. And

47:50

since we said... sell tech,

47:53

the NASDAQ, just keeping score,

47:55

has, you know, dramatically underperform

47:57

the Dow over that time

47:59

period. All right. Congrats on

48:01

your call. Well, you know,

48:03

whatever. Anyway, so, but now

48:05

you look at invidia forward

48:07

earnings and they're down to

48:09

20 times. Right, so invidious

48:11

earnings have kept growing, its

48:13

prices contracted 30, about a

48:15

third. Now I hate to

48:17

say this is a not

48:19

a bad stock Not a

48:21

bad stock and I think

48:23

I don't know what the

48:26

forward PE the average for

48:28

EPA average forward PE of

48:30

the S&P is but I

48:32

think it might be higher.

48:34

Oh, yeah of the S&P

48:36

No, the S&P I think

48:38

has fallen but but same

48:40

ballpark, right same ballpark. Yeah.

48:42

So wow You know, quote

48:44

unquote best value it's been

48:46

and at least years And

48:48

so basically that happened right

48:50

Adam that happened in what

48:52

eight months nine months yeah

48:54

nine months and and the

48:56

market as we said it

48:59

was very distorted and so

49:01

now the overall market is

49:03

normalizing right the mag seven

49:05

have come down and it's

49:07

sort of it's it's it's

49:09

sort of that's what happens

49:11

when you have multi-decade charts

49:13

and they say wow it's

49:15

never been like this it's

49:17

unlikely to persist. Right. That's

49:19

why I love those multi-decade

49:21

charts. And speaking of a

49:23

lot of time, let's change

49:25

topics. Are we allowed to

49:27

discuss uncomfortable things like international

49:29

investing on this on this

49:31

podcast? Absolutely. And you know,

49:34

last time you were on

49:36

there were a couple of

49:38

markets you were real big

49:40

fans of I think Brazil

49:42

was one, but India was

49:44

definitely at the top of

49:46

your list. So very curious

49:48

to hear what you think

49:50

about them, but also. What

49:52

impact, if any, liberation day

49:54

in this whole new tariff

49:56

regime, you know, might have

49:58

on the international stage? Yep.

50:00

So. So first, let's just

50:02

set the, you know, people

50:04

care about performance. So year

50:07

to date, Europe in the

50:09

dark blue has way outperformed

50:11

the S&P, right? And people

50:13

thought, oh, we didn't know

50:15

international stocks could actually go

50:17

up. Now, everything came down

50:19

recently, but basically, that's the

50:21

news of the year. That

50:23

now the S&P is not

50:25

the princess at the ball

50:27

anymore. Right. And you know,

50:29

I'm sorry to interrupt, but

50:31

I want to tie it

50:33

back to your first trend.

50:35

Is that largely because Europe

50:37

finally decided that, you know,

50:40

we're going to, we're going

50:42

to start, you know, picking

50:44

up the baton from the

50:46

spending the America was doing?

50:48

And so they've announced all

50:50

this new increased deficit spending

50:52

and as you said, deficit

50:54

spending puts the two feet

50:56

on the gas and we're

50:58

beginning to see that happen

51:00

in their equity markets? Yeah,

51:02

I mean, great point. I

51:04

wish I had made this

51:06

earlier. The reason I kind

51:08

of think US shallow recession

51:10

is the good news is

51:13

even though the US economy

51:15

is slowing down Europe is

51:17

stimulating and growing and I

51:19

hate it or it sounds

51:21

odd but it's true and

51:23

China is stimulating in a

51:25

significant way right I mean

51:27

tariffs will change the conversation

51:29

a little bit but tariffs

51:31

aside that's nice for the

51:33

world right that's nice for

51:35

the world right that since

51:37

the US is slowing the

51:39

other major regions are Interestingly,

51:41

equal weight is more consistent

51:43

performer during different economic regimes,

51:46

which kind of makes sense.

51:48

But the point here and

51:50

these numbers have actually changed

51:52

a little bit but if

51:54

you look at the emerging

51:56

markets again you can see

51:58

given different regimes you can

52:00

have dramatically different performance and

52:02

it's a little bit less

52:04

true for develop it's a

52:06

lot less true I should

52:08

say for developed markets as

52:10

you can see in these

52:12

different regimes but it's still

52:14

true and so I think

52:16

our base case is that

52:18

we are in a new

52:21

regime where international will outperform

52:23

the S&P. So like let's

52:25

call it like the 2000s.

52:27

And in any case, as

52:29

you look at your portfolio,

52:31

if you were underweight as

52:33

a lot of investors have

52:35

been over the last decade,

52:37

this is the time to

52:39

reconsider it. That's our that's

52:41

our view. Now, let's let's

52:43

look at international again in

52:45

a slightly different context. So

52:47

we have the S&P, which

52:49

is the blue line. in

52:51

the purple line we have

52:54

non-U.S. stocks and then we

52:56

have emerging markets. And so

52:58

this is sort of the

53:00

same background that we went

53:02

into the year, which is

53:04

don't bother me with international,

53:06

don't bother me with EM,

53:08

the U.S. is perfect or

53:10

good enough, right? And then

53:12

you brought up my favorite

53:14

country, and we're going to

53:16

be talking about this country

53:18

for many years to come

53:20

at them, which is India.

53:22

And in December, I mentioned

53:24

that India was a little

53:27

frothy. India has corrected beautifully.

53:29

And I think that, you

53:31

know, for long-term investors, even

53:33

though valuations are high, and

53:35

I'll share that in a

53:37

second, great time to look

53:39

at India. And now you

53:41

can see that India has

53:43

actually outperformed the US, which,

53:45

you know, doesn't mean anything

53:47

on a forward-looking basis. But

53:49

I will just say, as

53:51

I mentioned here, I was

53:53

there for a solid week.

53:55

recently and you know the

53:57

macro story is a strong

54:00

as it looks from afar. Great. And

54:02

hey, I've actually asked us earlier, Venek,

54:05

you know, is famous for its ETFs

54:07

for all sorts of different essay classes,

54:09

and you've certainly got them for gold

54:12

and Bitcoin. Does Venek have an India

54:14

specific ETF as well? We have two,

54:16

we have a growth oriented one, and

54:19

then we have kind of tech leaders.

54:21

It's it's called DJ and digital, digital

54:23

India, DGIN. So there are definitely ways

54:26

to get access. And I can go

54:28

through the details on those maybe at

54:30

some other point, but okay. Sorry. I

54:33

just want to make sure folks who

54:35

are inspired by what you're saying know

54:37

that there are actionable instruments out there

54:39

that they can look into. Yeah, there

54:42

are a number of good ETFs. I

54:44

would say. I mean, and there are

54:46

a number of competitors. So I'm not.

54:49

This is not a dig at anything,

54:51

but. I do believe it should look

54:53

beyond the index, look beyond the MSCI.

54:56

So Wisdom Tree has a good India

54:58

ETF. There are a number of good

55:00

India-oriented ETS. But it's a huge equity

55:03

market, Adam, and we could do a

55:05

drill-down just on India. There have been

55:07

between two and four hundred companies going

55:10

public every year. It's a really strong

55:12

equity culture. So it's a whole topic

55:14

in and of itself. You know on

55:17

that if you don't mind young folks

55:19

watching if if you'd be interested in

55:21

say like a special webinar on investing

55:24

in India. Yahn if demand is high

55:26

enough is that something you'd ever be

55:28

interested in doing sometime? Oh yeah I

55:30

mean I would certainly want to bring

55:33

in some experts but like that's would

55:35

love to do that. All right well

55:37

that would be excellent I don't want

55:40

to bother you unless there's enough demand

55:42

here from the audience but folks let

55:44

us know in the comment section below.

55:47

whether you're interested in something like that

55:49

or not. And if there's enough, then

55:51

I'll reach back at you on and

55:54

see if we can set something up

55:56

for later this year. Right. This is

55:58

just a simpler chart of the same

56:01

thing. India outperforming the S&P. Valuations, again,

56:03

cautionary tail. These are not cheap stocks.

56:05

Some of the frothes come up, but

56:08

not as much as you'd expect. But

56:10

again, earnings in the economy are growing.

56:12

What happened last year, basically, was that

56:14

there was a sort of slowdown after

56:17

the big election, you know, when Modi

56:19

didn't get the full majority and the

56:21

Idaho share. There's just a, and the

56:24

markets were overheated, so we have that.

56:26

I've got some charts on international. So

56:28

just in a big picture, by international,

56:31

I would say, you know, I certainly

56:33

like India long term, and I think

56:35

there's a reasonable time to add. I

56:38

just like to look at by comparison,

56:40

you know, where other countries stand because

56:42

I'm starting to think more of the

56:45

world by country rather than. you know

56:47

just some you know some big index

56:49

yeah and you know my the two

56:52

extremes I would say are the most

56:54

hated investment so people always ask you

56:56

what's your absolutely most hated investment and

56:59

that's definitely Brazil effectively it was really

57:01

you're getting four ten to eleven percent

57:03

yield Adam on the bond with only

57:05

four percent inflation and the stocks are

57:08

just dirt cheap I mean well under

57:10

ten times That's an amazing real yield.

57:12

And people like that last year and

57:15

the currency just went down and like

57:17

now it's so hated people won't even

57:19

talk about it. So anyway, no one

57:22

else is talking about it. I would

57:24

say that obviously Brazil and Peru and

57:26

Chile and a number of Latin countries

57:29

have a lot of beta to commodities

57:31

since since those commodities have corrected recently.

57:33

that risk is out of those positions.

57:36

So something to look at. The reason

57:38

I mention. as sometimes charts like this

57:40

actually excite me so it meaning like

57:43

Brazil going totally sideways because I feel

57:45

like my downside is relatively limited it's

57:47

sort of what China did if you

57:50

look at last summer that's when you

57:52

want to buy China it's sort of

57:54

at these multi-decade levels and it's like

57:56

okay they're hated but what's the downside

57:59

right what's you're on the floor not

58:01

much slower you can go I've got

58:03

a little bucket in my portfolio for

58:06

you know hated things where I feel

58:08

like there's no downside and I can't

58:10

articulate the upside but sometimes sometimes good

58:13

news just comes along. Okay so yeah

58:15

let me ask you this to people

58:17

who are saying wait a minute yon

58:20

I mean Trump basically just declared you

58:22

know trade war on everybody going forward

58:24

from here from that gonna really put

58:27

the squeeze on a lot of international

58:29

countries and India, China, these are some

58:31

of the bigger countries and maybe they'll

58:34

be able to withstand or outgrow some

58:36

of these tariff challenges. But you said

58:38

you're now thinking of the rest of

58:41

specific countries and not just in the

58:43

ex-U.S. basket. Do you have to be

58:45

much more... judicious and discerning kind of

58:47

post liberation day going forward or do

58:50

you not think it's that big of

58:52

a deal? You know I can't get

58:54

away from my true love which is

58:57

so the Indian economy it just really

58:59

has nothing to do with the United

59:01

States economy. It's the huge so backdrop

59:04

right in 10 years India is as

59:06

big as continental Europe. There's four mega

59:08

consumer markets in the world. US, Europe,

59:11

China, and India is emerging. It's still

59:13

extremely... Someone on my trip that it's

59:15

gone... from being extremely poor, just a

59:18

very poor, it's a very poor country,

59:20

right? But their middle class is growing

59:22

and beyond that, they have a great

59:25

equity culture and a great technology base.

59:27

I mean, so many global companies have

59:29

their tech operations in India, right? And

59:32

their population is now bigger than China,

59:34

right? They did surpass China? Yes. Yes.

59:36

But again, a lot is extremely poor.

59:38

But still, so. My point to answer

59:41

your question is what's the risk of

59:43

tariffs? Like Indian economy is just going

59:45

to judge along. It's not dependent. It's

59:48

not an export-driven economy. In fact, it

59:50

imports more, you know, raw materials and

59:52

stuff. So I just think if that's

59:55

why I said like despite the fact

59:57

these charts sort of have moved together,

59:59

it's really fundamentally a different story. And

1:00:02

so I'm not worried about my India

1:00:04

in the age of terrorists. And frankly,

1:00:06

I actually like the fact that the

1:00:09

terrorists are going to be renegotiated because

1:00:11

I think that will give kind of

1:00:13

a better base for the next 10

1:00:16

years of growth vis a vis the

1:00:18

United States. Okay. All right. All fantastic.

1:00:20

All right. Any any more slides left

1:00:22

here or who reached? No, just I

1:00:25

mean, I think that was basically it.

1:00:27

Right. So big picture. shallow recession, coined

1:00:29

by Adam right here, later in 2025,

1:00:32

tariffs fit into that, maybe not as

1:00:34

in big a way, but they're part

1:00:36

of getting to the 3% GDP cut

1:00:39

in spending. There are obviously a tax

1:00:41

increase, so deficit reduction, I should say

1:00:43

technically. And then we revisited golden Bitcoin

1:00:46

bull markets. Just saying listen, there's some

1:00:48

things going on there that you should

1:00:50

know about Bitcoin's higher correlation to the

1:00:53

NASDAQ. you know, gold's quite extended. And

1:00:55

then growth and semiconductors have retraced enough

1:00:57

so now that their evaluations are much

1:01:00

more attractive, which makes sense. And then

1:01:02

India and international had a great first

1:01:04

quarter and probably Indian particular is attractive

1:01:07

after its correction. I was never really

1:01:09

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All right, fantastic. I should ask you

1:02:04

this beforehand. Sorry to ask you this

1:02:07

on air. But can you send me

1:02:09

these slides? Oh, yeah, as always, we

1:02:11

have the Adam version of the slides,

1:02:14

which we make available to you, and

1:02:16

I guess your subscribers or however that

1:02:18

goes. Yeah, exactly. What I'll do, folks,

1:02:21

is I will. I'll put it in

1:02:23

the summary to this write-up that goes

1:02:25

out to all the free sub stack

1:02:28

subscribers. So folks, if you want to

1:02:30

get these slides, just go sign up

1:02:32

for my sub stack and go look

1:02:35

for the most recent. which will be

1:02:37

my summary of this interview, and you'll

1:02:39

see a link there to get the

1:02:42

slides, and you can get the full

1:02:44

chart deck. All right, well, look, Jan,

1:02:46

these are wonderful. Folks, if you want

1:02:49

to see, Jan, continue to come on

1:02:51

quarterly and share his quarterly outlook with

1:02:53

him the way that he's been doing

1:02:55

the past, I think three quarters now,

1:02:58

Jan. Please let us know in the

1:03:00

comment section below. I'm going to assume

1:03:02

you on that as in previous times

1:03:05

I've asked that. The response is the

1:03:07

thundering yes. So unless people have a

1:03:09

very different opinion, which I don't think

1:03:12

they will, I really look forward to

1:03:14

seeing you do in this next quarter

1:03:16

and I very much appreciate you doing

1:03:19

this. For folks that would like to

1:03:21

follow you in your work and Ben

1:03:23

X work between now and your next

1:03:26

appearance here, where should they go? Well,

1:03:28

this deck is also on our website,

1:03:30

vanack.com, under insights, and then I'm on

1:03:33

LinkedIn and X. So I do share

1:03:35

different kinds of content that I like.

1:03:37

But these quarterly updates are really helpful,

1:03:40

Adam. Thank you for inspiring me to

1:03:42

kind of get organized to do these.

1:03:44

And hopefully we'll move from the middle

1:03:46

of the reckoning where we are now

1:03:49

to kind of near the end of

1:03:51

the reckoning, three months from from here.

1:03:53

All right, well, it's such a great

1:03:56

pleasure. And yeah, when I edit this,

1:03:58

I will put up the links to

1:04:00

your website and your X handle and

1:04:03

stuff on the screen, so folks know

1:04:05

where to go. But can't take you

1:04:07

enough, my friend, and I'll see you

1:04:10

in a quarter. Well, as usual, Jan,

1:04:12

this has just been fantastic. Thank you

1:04:14

so much for all the effort that

1:04:17

you put into these slides and for

1:04:19

your willingness to come quarter after quarter

1:04:21

and share your outlook with this audience.

1:04:24

Folks, please share your appreciation with Jan

1:04:26

by hitting the like button and then

1:04:28

clicking on the subscribe button below as

1:04:31

well as that little bell icon right

1:04:33

next to it. And if you would

1:04:35

like some help in navigating your financial

1:04:37

wealth. through the road that lies ahead,

1:04:40

which looks like it's got a recession

1:04:42

of some short, shallow or other, in

1:04:44

its future or likely in its future.

1:04:47

I recommend that most

1:04:49

folks watching this

1:04:51

video seek the help

1:04:54

of a good help

1:04:56

financial professional financial trying

1:04:58

to figure out how

1:05:01

to make it

1:05:03

through all it If

1:05:05

you've got a good

1:05:08

financial advisor who's

1:05:10

doing that for you,

1:05:12

great. doing that important

1:05:15

thing is, is that

1:05:17

they must take

1:05:19

into account take into consider

1:05:21

all the macro

1:05:24

issues that Jan laid out

1:05:26

out for us here.

1:05:28

But if you've

1:05:31

got a good advisor

1:05:33

who's doing that

1:05:35

for that stick with

1:05:38

them. If you don't,

1:05:40

or you or like

1:05:42

a second opinion

1:05:45

from when it does

1:05:47

meet that criteria, does

1:05:49

then consider scheduling

1:05:52

a free consultation with

1:05:54

one of the

1:05:56

financial consultation with one of the financial

1:05:59

do that, just

1:06:01

fill out the short

1:06:03

form thoughtful by thoughtful.com. will be

1:06:06

in touch with you very will

1:06:08

be in touch

1:06:10

with you very quickly

1:06:12

after that. free. These

1:06:15

consultations are totally

1:06:17

free. There's no commitment

1:06:19

to work with

1:06:22

these firms. It's just

1:06:24

a free public

1:06:26

service they offer to

1:06:29

help as many

1:06:31

people as possible, as

1:06:33

as prudently as possible

1:06:36

may what may lie

1:06:38

ahead. just been this

1:06:40

has just been fantastic.

1:06:43

so Thank you so

1:06:45

much, my friend. look

1:06:47

look forward to

1:06:50

seeing you back on

1:06:52

here again next

1:06:54

quarter. Great. Thank you.

1:06:57

Thank you. you.