Latest / The Chuck ToddCast / Interview Only w/ Paul Auslander - A Financial Planner's Brutally Honest Take on Trump's Economy

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Interview Only w/ Paul Auslander - A Financial Planner's Brutally Honest Take on Trump's Economy · The Chuck ToddCast

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  Speaker 1: slash podcast, or simply use the promo code podcast at
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  Speaker 1: check out. This is a sponsor I absolutely embrace, so
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  Speaker 1: use that code well. Sometimes I like to have a
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  Speaker 1: guest that you know. Both will inform all of us,
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  Speaker 1: not just you the audience, But it also gives me
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  Speaker 1: a chance to find out how are people thinking about
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  Speaker 1: this current era of economic uncertainty, whether it's inflation, market volatility,
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  Speaker 1: questions about the future of social security, the national debt.
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  Speaker 1: So what does financial stability look like? You know, people
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  Speaker 1: my age and above, we're sitting here in between retirement,
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  Speaker 1: in our peak earning years we're constantly worried about this. Well,
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  Speaker 1: my guest today runs a firm that advises individuals navigating
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  Speaker 1: that uncertainty, Paul Auslander. So in many ways, he is
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  Speaker 1: a front row seat to at least to the conversation
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  Speaker 1: that he's hearing from every day investors that are reacting
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  Speaker 1: to this moment. This is not, by the way, I
• 2:43
  Speaker 1: don't want you to think he's not a sponsor. I'm
• 2:46
  Speaker 1: not pitching him to be a sponsor. He's literally this
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  Speaker 1: is a conversation to try to hear what are investors
• 2:54
  Speaker 1: hearing out there from every day. We constantly know what
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  Speaker 1: the big private equity people want to hear here, what
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  Speaker 1: about the rest of us, because in many ways that
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  Speaker 1: will tell us what this economy looks like over the
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  Speaker 1: next couple of years. What are the behaviors happening? What
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  Speaker 1: are the questions every day investors are asking of experts
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  Speaker 1: like Paul. And he's been doing this quite a long
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  Speaker 1: time and he has seen ups and down. So Paul,
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  Speaker 1: welcome to the podcast.
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  Speaker 2: Thanks Chuck, I appreciate it. Thanks for having me.
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  Speaker 1: Well, look, let's do a little Like I said, this
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  Speaker 1: is not a meant to be a sales pitch or sponsorship.
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  Speaker 1: This is not anything like that. But give me, give
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  Speaker 1: me a little bit of your origin story. How did
• 3:39
  Speaker 1: you end up in this position and why do you
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  Speaker 1: do this? And say not run some other business or
• 3:45
  Speaker 1: something like that.
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  Speaker 2: Well, it was a securitut route, you know. I didn't
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  Speaker 2: know what I wanted to do in school. I was,
• 3:52
  Speaker 2: besides trying to stay in school, I was a struggling musician,
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  Speaker 2: so I kept dropping out and going to play with
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  Speaker 2: bands and then go back and do a semester. I
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  Speaker 2: finally lit into something that I like, keyboards, piano mainly. Yeah. Yeah,
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  Speaker 2: So I played a little bit of everything, but the
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  Speaker 2: piano I probably spent more time on. That same mother
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  Speaker 2: was cracking the which she played as well. But I
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  Speaker 2: found I had a bit of a feeling for numbers
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  Speaker 2: and still didn't know what I was going to do
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  Speaker 2: when I got out of school and just stumbled, literally
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  Speaker 2: stumbled into this profession that was very nascent at the time,
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  Speaker 2: financial planning, and I got my certification as a financial planner,
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  Speaker 2: which was at that time a relatively new designation. Financial
• 4:37
  Speaker 2: planning at that point was really being done by insurance agents.
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  Speaker 1: It's sort of late seventies early eighties, not to exactly.
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  Speaker 2: Yeah, got the CFP in eighty seven, but yeah, I
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  Speaker 2: started in nineteen eighty so built up a practice and
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  Speaker 2: a business, and I do it to this day. I
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  Speaker 2: mean I could have retired a few years ago. I
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  Speaker 2: love it. I enjoy it. It's now become mainstream. Got
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  Speaker 2: involved here in the state of Florida, with the help
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  Speaker 2: of our CFO Alex Singing, to push the concept of
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  Speaker 2: financial literacy for students, because I think it's amazing how
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  Speaker 2: many kids don't know anything about finance when they come out.
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  Speaker 2: So yeah, it's it's just going to labor a love.
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  Speaker 2: Over the years, I've kind of migrated into what they
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  Speaker 2: call the family office face, where I'm dealing with wealthier
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  Speaker 2: and wealthier people who aren't sure exactly what they're going
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  Speaker 2: to do. And a lot of them happened to come
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  Speaker 2: down here from Florida from my native New York, so
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  Speaker 2: I had.
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  Speaker 1: A nice they moved to my home state of Florida
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  Speaker 1: for all these things. Yeah, what is it about? Is
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  Speaker 1: there something in the tax code? I don't know, I've
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  Speaker 1: never heard of it.
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  Speaker 2: Now, it's taxes and weather. Frankly though, it's getting a
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  Speaker 2: little different. Now. You know, it's legal to carry a
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  Speaker 2: gun into publics now, open carry, So some of us
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  Speaker 2: are going, you know, let's let's not ruin a good thing.
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  Speaker 1: So, you know, it's funny you say that. I often
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  Speaker 1: wonder when is when is sort of this when is
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  Speaker 1: it gone too far? The sort of you know, one
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  Speaker 1: person's argument for freedom it actually impedes upon the freedom
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  Speaker 1: of others right, freedom of security and things like that.
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  Speaker 1: And I think I'm waiting for that moment in Florida.
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  Speaker 1: I think we right now, it's a we've been doing
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  Speaker 1: big swings. We haven't had the big swings. Probably do
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  Speaker 1: sometime soon. It's probably going to have to do with
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  Speaker 1: property insurance ultimately, but we'll see. I think, yeah, Look,
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  Speaker 1: my father was a tried to get into this space,
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  Speaker 1: spent a decade in this space, and passed away before
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  Speaker 1: ever found a chance whether this was going to succeed
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  Speaker 1: or fail. But you're right, it was a it was
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  Speaker 1: sort of a new thing in the eight and so I,
• 6:39
  Speaker 1: you know, I learned little things like Option Friday, which
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  Speaker 1: was always a crazy day in my dad's life. And
• 6:46
  Speaker 1: I got to know option Friday as a teenager in
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  Speaker 1: a negative light. But that's a whole nother story.
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  Speaker 2: But what I what I to your point, they were
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  Speaker 2: a lot of stockbrokers, there, a lot of insurance folks
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  Speaker 2: that wanted to give a higher level of service to
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  Speaker 2: try to help their clients, you know, not just sell
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  Speaker 2: them a product. That was really the genesis.
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  Speaker 1: No, there was, and you saw and it was it
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  Speaker 1: was funny how the you know. I remember my father
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  Speaker 1: used ag Edwards at the time as sort of his
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  Speaker 1: home base for this. And eventually, I think AG Edwards
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  Speaker 1: and your merrilllynches said, wait a minute, we got all
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  Speaker 1: these independent operators using you know, we're missing out on
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  Speaker 1: something here, you know. And it seems like that push
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  Speaker 1: and pull exists to this day. Right, You've got your
• 7:31
  Speaker 1: big institutions, you know, they want your money and they
• 7:34
  Speaker 1: say they can help you plan for retirement. And then
• 7:39
  Speaker 1: you still have the individuals out there going no, no, no, no, no,
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  Speaker 1: I can give you more personalized service.
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  Speaker 2: There is that, and then the line of demarcation really
• 7:48
  Speaker 2: is fiduciary service versus non fiduciary service. And I think
• 7:52
  Speaker 2: that's the big buzzword going forward. I think that's the
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  Speaker 2: differentiator in the profession. Now, Folks that are offering it
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  Speaker 2: a service where they they have to be accountable for
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  Speaker 2: their advice as opposed to folks that don't, because it
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  Speaker 2: is it's a massive responsibility. Folks have worked all their life,
• 8:08
  Speaker 2: and then if they get with the wrong person or
• 8:09
  Speaker 2: the wrong firm and that money gets taken away from
• 8:13
  Speaker 2: them in some way, shape or form, that it's non recoverable.
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  Speaker 1: You know, part of your job is to under You've
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  Speaker 1: got to understand politics at least enough to know, you know,
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  Speaker 1: what you should be investing in, what you shouldn't be
• 8:26
  Speaker 1: investing in, or what you should be hedging and what
• 8:28
  Speaker 1: you shouldn't be hedging. I mean, in fact, my financial
• 8:30
  Speaker 1: advisor and I get together as much for him to
• 8:33
  Speaker 1: pick my brain as I do to pick his. When
• 8:36
  Speaker 1: we have this we have almost you know, about twice
• 8:39
  Speaker 1: a month, we try to have breakfast where we're trying
• 8:42
  Speaker 1: you know, he's trying to like, well, how long do
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  Speaker 1: you think this shutdown is going to last? Or if
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  Speaker 1: we do this? What you know? And so I do
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  Speaker 1: think people in your space can tell us something about
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  Speaker 1: the public's behavior, because ultimately it's the public's behavior here
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  Speaker 1: that's going to dictate the health of this economy and
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  Speaker 1: the health of our democracy.
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  Speaker 2: Yeah, yeah, yeah, it's never been so stark. By the way,
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  Speaker 2: in the old days, there were you know, three things
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  Speaker 2: you wouldn't talk about, and one of them were politics.
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  Speaker 2: Right today ansects. But today it's the first thing that
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  Speaker 2: comes up, and I see it particularly where I am.
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  Speaker 2: I'm in a little town halfway between Clearwater and Saint
• 9:24
  Speaker 2: Petersburg called bel Air, which is which is a pretty
• 9:27
  Speaker 2: conservative area. And if you don't answer those initial questions right,
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  Speaker 2: you're not getting them. As a client, I've worked really
• 9:33
  Speaker 2: hard to try to keep a middle of the road approach,
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  Speaker 2: not only in my interviews and my panels, but with
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  Speaker 2: the clients because there's certain certain facts in the economy
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  Speaker 2: that don't change with the politics.
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  Speaker 1: Right. Well, that's always you know, look, this is the
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  Speaker 1: world that I always say, I'm looking at this dispassionately
• 9:50
  Speaker 1: as best I can. And I understand if I'm not
• 9:52
  Speaker 1: a cheerleader, you think I'm an opponent, and it's like, no,
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  Speaker 1: I'm just trying. I'm just being realistic. I'm just covering
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  Speaker 1: politics as it is, not as I wish or were.
• 10:02
  Speaker 2: Right, right, Yeah, So you know, I try to counsel
• 10:05
  Speaker 2: clients into spending less time on one of the networks
• 10:09
  Speaker 2: that either infuriates them or makes them cheer, and more
• 10:12
  Speaker 2: about understanding why the companies are doing well and what
• 10:15
  Speaker 2: their risk tolerance is and how much they should diversify.
• 10:18
  Speaker 2: As an example, for ten years, nobody in our profession
• 10:22
  Speaker 2: put any money overseas. Last year the European index has doubled,
• 10:25
  Speaker 2: the S and P five hundred, giving President Trumps some
• 10:29
  Speaker 2: credit for this. He's forced the European companies countries to
• 10:32
  Speaker 2: start investing in their defense, which in turns become very profitable.
• 10:36
  Speaker 2: So you're seeing changes, and there's an example of the
• 10:39
  Speaker 2: politics impacting it, but overall, general economic principles still apply.
• 10:44
  Speaker 2: You know, the whole notion is to spend less than
• 10:47
  Speaker 2: your earn and save something.
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  Speaker 1: Right, So let's talk. I am curious, what are the
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  Speaker 1: political concerned? What are the politically charged questions you get
• 11:03
  Speaker 1: when it comes to investment strategy? What would you say
• 11:07
  Speaker 1: the threat? You know, I certainly have three or four
• 11:09
  Speaker 1: in my head, but before I get to mine, what
• 11:12
  Speaker 1: are some of the questions you have clients asking you
• 11:15
  Speaker 1: in order to potentially find a hedge against a current
• 11:21
  Speaker 1: situation or not.
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  Speaker 2: What are some of the I mean, the first primary
• 11:25
  Speaker 2: thing that comes up is tax policy, and we hear
• 11:27
  Speaker 2: that regularly, and that of course impacts a lot of
• 11:30
  Speaker 2: the way in which a client receives their money, and
• 11:33
  Speaker 2: so we talk about that a lot. And tax policy
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  Speaker 2: has been fairly favorable under this administration for investors. You
• 11:41
  Speaker 2: could argue that perhaps for other people not so much.
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  Speaker 2: But and secondly, and to your point earlier, it's really
• 11:46
  Speaker 2: a K shaped economy in many ways. The haves are
• 11:49
  Speaker 2: getting wealthier and the haves not Many are on the edge,
• 11:53
  Speaker 2: and so that's a bigger, longer discussion and a question.
• 11:56
  Speaker 2: But for the folks that are on the top side
• 11:58
  Speaker 2: of that K, tax policy is a big deal, both
• 12:01
  Speaker 2: income tax and a state taxes that comes up later
• 12:04
  Speaker 2: in the conversation. You have conversations about should we be
• 12:08
  Speaker 2: spending money helping other countries spend for themselves? Where is
• 12:12
  Speaker 2: our money spent here? Even immigration. I have a number
• 12:16
  Speaker 2: of restaurant owners who are die hard conservative Republicans who
• 12:21
  Speaker 2: have lost seventy eighty percent of their stats. That's an
• 12:23
  Speaker 2: interesting conversation. So they because of immigration policy, right, So
• 12:29
  Speaker 2: I mean, it comes up, but you try to guide
• 12:31
  Speaker 2: them back to the middle, and I think I've done
• 12:34
  Speaker 2: it right, but you never know. I mean, I admire
• 12:37
  Speaker 2: you and your financial advisor for sitting a couple of
• 12:39
  Speaker 2: times a month and going over things, because besides talking
• 12:42
  Speaker 2: the politics, it's good to have that contact. Right. One
• 12:46
  Speaker 2: of the things I try to do is go see
• 12:47
  Speaker 2: the clients, or know today in the age of zoom,
• 12:50
  Speaker 2: do this with clients so that we can talk about
• 12:52
  Speaker 2: the things that they might be worrying about. You know,
• 12:54
  Speaker 2: it impacts people's retirement ages too. You know, a lot
• 12:57
  Speaker 2: of folks were aiming pre COVID to retire already, right,
• 13:01
  Speaker 2: A lot of them have decided to stay on a
• 13:03
  Speaker 2: little longer for a few reasons, including a couple of
• 13:05
  Speaker 2: market downturns where their four A one K was really
• 13:08
  Speaker 2: their tool one K for a couple of years.
• 13:10
  Speaker 1: It's a good line. I see what you did there.
• 13:14
  Speaker 1: Let me start with financial is a little financial humor.
• 13:17
  Speaker 1: Let me start with the the issue that that I
• 13:22
  Speaker 1: am planning for. But I'm curious how much it comes up.
• 13:26
  Speaker 1: And you know, I've always you know, I will gen
• 13:31
  Speaker 1: x is you know has to pay the bills of
• 13:32
  Speaker 1: the boomers. We've had to pay the bills of the
• 13:34
  Speaker 1: boomers for some time now, and the biggest bill is
• 13:38
  Speaker 1: yet to come, and that bill is going to be
• 13:41
  Speaker 1: Social Security, and there is a built in cut coming.
• 13:44
  Speaker 1: You can just feel it. It's going to be. They'll
• 13:46
  Speaker 1: always pay benefits, but there'll be a cut in how big,
• 13:50
  Speaker 1: you know, in what you're you know, we'll probably get
• 13:53
  Speaker 1: seventy five percent of what we do, not one hundred
• 13:56
  Speaker 1: percent of what we're doing. We'll be the first generation
• 13:58
  Speaker 1: because we're the smallest MILLENNI and you know it's all
• 14:01
  Speaker 1: about millennials and Gen Z and ever. That's always been
• 14:05
  Speaker 1: the problem for Gen X. But I am planning and
• 14:07
  Speaker 1: assuming not nothing on Social Security, but a less than
• 14:13
  Speaker 1: what people have been counting on currently. A. Do you
• 14:17
  Speaker 1: advise clients that way that are in my age bracket?
• 14:20
  Speaker 1: In that gen X age bracket, So we're essentially fifty
• 14:23
  Speaker 1: to sixty four right now? Right you know, we're born
• 14:27
  Speaker 1: in sixty five, So we're just that that that's our
• 14:30
  Speaker 1: that's our age range. Are you telling people to plan
• 14:34
  Speaker 1: for that or not?
• 14:37
  Speaker 2: So there's a couple of answers to that. Number One,
• 14:40
  Speaker 2: I don't subscribe to the theory that we're in as
• 14:43
  Speaker 2: disastrous shape, as many people believe we are if we
• 14:46
  Speaker 2: keep it currently the way it is. It's amazing what
• 14:49
  Speaker 2: the math does if you push retirement out a couple
• 14:51
  Speaker 2: of years. So if you take it off of sixty
• 14:53
  Speaker 2: seven and take it to sixty nine, suddenly that trust
• 14:56
  Speaker 2: fund lasts a heck of a lot longer. That's number one.
• 14:58
  Speaker 2: Number two. There's me testing, right, So forget about you
• 15:02
  Speaker 2: and I and all the mortals in the world. Talk
• 15:04
  Speaker 2: about all the people that are now populating Miami, right,
• 15:06
  Speaker 2: they wouldn't be And I'm talking about Indian You know,
• 15:10
  Speaker 2: the areas of Miami which are attracting the Mark Zuckerberg's
• 15:13
  Speaker 2: and other people of the world.
• 15:14
  Speaker 1: Right, they again, literally the profet islands that the general
• 15:17
  Speaker 1: public of Miami aren't allowed on.
• 15:19
  Speaker 2: But you get too right, right, But so they say
• 15:22
  Speaker 2: they wouldn't be eligible, or they wouldn't get it, or
• 15:24
  Speaker 2: they'd have to pay a higher tax. But I do
• 15:27
  Speaker 2: caution people your age that you have to be aware
• 15:31
  Speaker 2: that something might change. I don't not to disagree too much,
• 15:36
  Speaker 2: but I don't think a seventy five percent of the
• 15:39
  Speaker 2: one hundred percent that you would get is realistic. I
• 15:41
  Speaker 2: think that's political suicide in this country. I think whether
• 15:44
  Speaker 2: it's Republican or Democrats, I don't.
• 15:45
  Speaker 1: Know the reason. I take your point, and it has
• 15:48
  Speaker 1: been if there was ever a generation you could probably
• 15:52
  Speaker 1: punish without as much blowback, it's the smallest one alive,
• 15:56
  Speaker 1: which is.
• 15:57
  Speaker 2: What they're going what I see happen. And I think
• 16:00
  Speaker 2: it's the generation behind you. It's your children, it's it's
• 16:05
  Speaker 2: my children be a little bit older than yours.
• 16:07
  Speaker 1: It's millennial, miliennium. My kids are gen z. I guess
• 16:09
  Speaker 1: it's your kids are millennial, right.
• 16:11
  Speaker 2: Yeah, exactly. And I see them having this, them having
• 16:15
  Speaker 2: the biggest impact, right, But they're already not planning for it.
• 16:18
  Speaker 2: They're thinking to themselves, it's not going to be there.
• 16:20
  Speaker 2: They don't trust this system anyway.
• 16:22
  Speaker 1: And they by the way, that was how it's funny
• 16:24
  Speaker 1: you say that. My wife and I discussed this all
• 16:26
  Speaker 1: the time when the thirty year old versions of us
• 16:31
  Speaker 1: were constantly message that, and so that was the message
• 16:35
  Speaker 1: of the eighties and nineties. So yeah, we actually we
• 16:39
  Speaker 1: actually planned that way.
• 16:41
  Speaker 2: I also think what's going to happen is the same
• 16:43
  Speaker 2: evolution that it cared, or you might call it a
• 16:46
  Speaker 2: revolution that occurred and defined benefit pension plans where a
• 16:50
  Speaker 2: GM before had a pension plan that you had for
• 16:52
  Speaker 2: many years and then you got an income that got
• 16:54
  Speaker 2: converted to a four to oh one k where you
• 16:56
  Speaker 2: ended up doing your own investing and it was up
• 16:58
  Speaker 2: to you as to how you're atalronment plan? Did. I
• 17:00
  Speaker 2: think that's going to happen to Social Security. Many administrations
• 17:04
  Speaker 2: have tried to privatize it. It hasn't happened. I think
• 17:07
  Speaker 2: that's more likely for a generation back, in other words,
• 17:11
  Speaker 2: younger people for it.
• 17:12
  Speaker 1: That's probably for you know, the only way you pull
• 17:14
  Speaker 1: that off, it's got to start almost like you know,
• 17:17
  Speaker 1: only those under thirty five or something like that, right.
• 17:19
  Speaker 2: Yeah, Yeah, And I think we have the beginnings of
• 17:21
  Speaker 2: that with Brad Gersner and others who have come up
• 17:24
  Speaker 2: with these from America concepts that President Trump has put
• 17:27
  Speaker 2: his name on, which again I think that's that's going
• 17:30
  Speaker 2: to be a start that he.
• 17:31
  Speaker 1: Put his name on it because he polarizes something that
• 17:34
  Speaker 1: might might.
• 17:35
  Speaker 2: Actually be a good idea for people. Yeah, that's right.
• 17:41
  Speaker 1: So you're you're it's look, we could you know, do
• 17:44
  Speaker 1: you remember the notch babies? I know, I can't say
• 17:49
  Speaker 1: that I do so there was a small period of
• 17:51
  Speaker 1: time where we had this small group of Americans born
• 17:54
  Speaker 1: we like made this decision to like cut their social
• 17:57
  Speaker 1: Security and it was for this like group of people.
• 18:00
  Speaker 1: Every year Congress had to like do the notch baby
• 18:03
  Speaker 1: fix to make sure they got their whole The point
• 18:06
  Speaker 1: is it was it was one of the early attempts
• 18:09
  Speaker 1: to try to reign in the growth of social Security
• 18:12
  Speaker 1: so that it didn't overwhelm the federal budget. And of
• 18:14
  Speaker 1: course you're not wrong. It was politically just so even
• 18:18
  Speaker 1: it was a small group of people, the experiment was
• 18:20
  Speaker 1: so unpopular. So in some ways to support your pushback
• 18:25
  Speaker 1: on me, I give you notch babies and and.
• 18:28
  Speaker 2: And thank you for telling me that I'm a political
• 18:30
  Speaker 2: junkie and I'm in the financial business, and I had
• 18:32
  Speaker 2: not heard of it, so I figured i'd know.
• 18:34
  Speaker 1: I think all the notch babies are dead. I think
• 18:36
  Speaker 1: that's why, all right, so that a lot of I
• 18:39
  Speaker 1: doubt you have a client left that that was would
• 18:42
  Speaker 1: be a quote unquote nottch baby. But if every serves,
• 18:46
  Speaker 1: there was this this small so that's certainly one thing
• 18:51
  Speaker 1: I think about. Now let me let me go with
• 18:53
  Speaker 1: another direction here. There is money to be made off
• 18:57
  Speaker 1: of bad Trump policies that you know is going to
• 19:02
  Speaker 1: go away when Trump goes away. But it feels icky.
• 19:07
  Speaker 1: How do you How do you deal with that?
• 19:11
  Speaker 2: I love how you express it. You try to stay
• 19:16
  Speaker 2: agnostic about those things. Right in the end of the day,
• 19:18
  Speaker 2: my job is to try to make sure that the
• 19:20
  Speaker 2: client has what they need and what they've goed for,
• 19:24
  Speaker 2: and in the case of larger family offices, to protect
• 19:27
  Speaker 2: the family wealth that the founder or the matriarch or
• 19:30
  Speaker 2: patriarch created. If I sense that it's it's become a
• 19:35
  Speaker 2: political discussion and that they're really in favor of something,
• 19:38
  Speaker 2: or in the case of a lot of my liberal
• 19:42
  Speaker 2: clients who have a lot of money and will absolutely
• 19:45
  Speaker 2: not go near anything that smells of this administration, we'll
• 19:51
  Speaker 2: work with it, you know. I mean that's part of
• 19:53
  Speaker 2: the discovery process.
• 19:54
  Speaker 1: And look at I look at it as crypto in general,
• 19:57
  Speaker 1: like I feel like, you know, what we saw right
• 20:01
  Speaker 1: is is there's a in some ways crypto has become
• 20:06
  Speaker 1: a special interest and they spent a lot of money
• 20:10
  Speaker 1: to when they decided that that one party wasn't going
• 20:14
  Speaker 1: to give them what they wanted, they said, all right, well,
• 20:16
  Speaker 1: we're going to invest all this and they have you know,
• 20:18
  Speaker 1: they're they're doing this the old fashioned way in Washington,
• 20:21
  Speaker 1: which is they're buying supporters. You know, they're throwing money
• 20:25
  Speaker 1: at and they're trying to buy bipartisan support. I mean,
• 20:28
  Speaker 1: they're using a blueprint that has that has been used
• 20:31
  Speaker 1: in the modern era for basically one hundred years. So
• 20:35
  Speaker 1: I bring that up because crypto feels like something you
• 20:37
  Speaker 1: can make money on now. But there's another administration and
• 20:41
  Speaker 1: probably when the pitchforks come and the electorate changes a
• 20:45
  Speaker 1: little bit, or the elected official makeup changes a little bit,
• 20:48
  Speaker 1: some serious regulation is coming. If I were in your shoes,
• 20:53
  Speaker 1: I'd be trying to figure out how do you both
• 20:56
  Speaker 1: help a client make money in that moment and hedge
• 20:58
  Speaker 1: against it down the road. Again, as you said, take
• 21:01
  Speaker 1: your own morals and ethics aside a minute. This is
• 21:05
  Speaker 1: the reality. You know that crypto is going to get
• 21:07
  Speaker 1: some value short term, and you know more regulation is
• 21:11
  Speaker 1: coming in the medium term. How are you how do
• 21:16
  Speaker 1: you manage that? How do you advise You know, obviously
• 21:19
  Speaker 1: you're being very careful. Look, you sort of the client's
• 21:22
  Speaker 1: got a passionate position on it. You deal with it
• 21:25
  Speaker 1: one way. But if they're sort of neutral, I've come
• 21:27
  Speaker 1: to you like, look, you know, is there a would
• 21:32
  Speaker 1: you say, is there money to be made short term
• 21:34
  Speaker 1: in here that's worth the risk? And b I do
• 21:38
  Speaker 1: know more financial regulation is coming. How do we prepare
• 21:40
  Speaker 1: for it?
• 21:41
  Speaker 2: So I'm not sure about the second one, but the
• 21:44
  Speaker 2: first one is a pretty easy answer. You know, crypto
• 21:46
  Speaker 2: was around before Trump hit the scene, and Crypto in
• 21:49
  Speaker 2: this whole blockchain is a revolution that's occurring and will
• 21:53
  Speaker 2: continue to occur way past Donald Trump and whoever his
• 21:56
  Speaker 2: successor is. Also, we have a history of not putting
• 21:59
  Speaker 2: in regulations after we've decided not to put in the
• 22:02
  Speaker 2: regulations or change regulations later on. We had a very
• 22:06
  Speaker 2: conservative SEC chair prior to the one that's in now.
• 22:10
  Speaker 2: This SEC chair that's in now is much more allowing
• 22:15
  Speaker 2: for these types of things. I think crypto the train
• 22:18
  Speaker 2: has already lost left the station right. There are many,
• 22:21
  Speaker 2: many large organizations that have considerable exposure to crypto. I
• 22:26
  Speaker 2: think crypto goes down before it goes up again. But
• 22:29
  Speaker 2: this is a trade. This is not a store of
• 22:32
  Speaker 2: value like gold has taken that position. It's a trade
• 22:35
  Speaker 2: and people are trading it like any asset class, it
• 22:38
  Speaker 2: happens to be a newer asset class. I think the
• 22:40
  Speaker 2: great part about our markets is time will tell if
• 22:43
  Speaker 2: it's a good asset class or not. And it's going
• 22:45
  Speaker 2: to be one of those things where buyer beware.
• 22:50
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• 26:01
  Speaker 1: slash the Chuck Podcast. Is there an example in the
• 26:07
  Speaker 1: past that you could come up with that was seen
• 26:09
  Speaker 1: as a good asset, good commodity that turned out to
• 26:13
  Speaker 1: be wrong and eventually the market told you it was wrong?
• 26:20
  Speaker 2: You know, I really can't. I think I would. I
• 26:25
  Speaker 2: would think about that, and if I've come up with it,
• 26:28
  Speaker 2: send you an email after this show.
• 26:29
  Speaker 1: Me let me throw one out you because the closest
• 26:32
  Speaker 1: And I'm curious if you think this works because I
• 26:35
  Speaker 1: was young when it happened when the Hunt Brothers tried
• 26:38
  Speaker 1: to corner the silver mark silver Yeah, yeah, And they
• 26:41
  Speaker 1: were basically trying to raise the floor of value on
• 26:44
  Speaker 1: silver because they they were long on silver, right, I
• 26:47
  Speaker 1: mean I, I may I have my specifics wrong here,
• 26:51
  Speaker 1: and it came crashing down on them. And there was
• 26:54
  Speaker 1: a part of that that I wondered if there was
• 26:55
  Speaker 1: a lesson to be learned.
• 26:57
  Speaker 2: Well, if the family went seventy five, the family lost
• 27:01
  Speaker 2: seventy five percent of its net worth in that example.
• 27:04
  Speaker 2: So that was that was the number one punishment, right,
• 27:06
  Speaker 2: I mean, that's a good example. But silver wasn't the
• 27:09
  Speaker 2: evil person there. Silver wasn't wasn't the issue. The issue
• 27:13
  Speaker 2: was the way in which the traders were trying to
• 27:16
  Speaker 2: corner the market and do it. And if you look
• 27:18
  Speaker 2: at silver now, right, silver and gold have had the
• 27:21
  Speaker 2: best run they've had in years in the last in
• 27:23
  Speaker 2: the last year, it's coming out.
• 27:24
  Speaker 1: I'll tell you that silver and gold are moving up
• 27:26
  Speaker 1: like this and as they are behaving like the sort
• 27:30
  Speaker 1: of safe haven that people want to treat them as.
• 27:34
  Speaker 1: But there is not a single crypto asset that is
• 27:37
  Speaker 1: behaving in that way.
• 27:38
  Speaker 2: I think. I think, well, they're two different assets, right,
• 27:41
  Speaker 2: I think silver and gold. You have central banks buying
• 27:44
  Speaker 2: silver and gold, right, you don't have central banks necessarily
• 27:47
  Speaker 2: buying crypto. You have central banks buying to.
• 27:50
  Speaker 1: Be shocked when don't be shocked when arms get twisted
• 27:54
  Speaker 1: to force that in order to prop up the price
• 27:57
  Speaker 1: of bitcoin.
• 27:57
  Speaker 2: But yeah, but I think no, But I think I
• 28:01
  Speaker 2: think there's a general fear out there that you know,
• 28:04
  Speaker 2: uncertainty causes a lot of concern, right, and there's a
• 28:07
  Speaker 2: lot of uncertainty in the economy. Part of that has
• 28:10
  Speaker 2: been President Trump and the Trump's, the terrorists being going
• 28:13
  Speaker 2: one way, one one direction, and then another direction. So
• 28:17
  Speaker 2: I think that's part of it. And I think when
• 28:19
  Speaker 2: people are really nervous, plus you add an all time
• 28:22
  Speaker 2: high to the stock market, I think you have people
• 28:24
  Speaker 2: buying these assets as a safe haven. I don't think
• 28:28
  Speaker 2: it's any more complicated than that. It's also been a
• 28:30
  Speaker 2: trade frankly, particularly silver and gold, not so much where
• 28:35
  Speaker 2: people the traders are just having a good time with
• 28:37
  Speaker 2: something that's always been kind of stale and now suddenly
• 28:40
  Speaker 2: came to life.
• 28:42
  Speaker 1: So it's sort of one of those is it's getting
• 28:45
  Speaker 1: a little action, then it gets marketed or it almost
• 28:47
  Speaker 1: goes viral.
• 28:48
  Speaker 2: I think that's exactly right, I think, and I think
• 28:50
  Speaker 2: social media helps set along. I think that's the whole
• 28:52
  Speaker 2: memes stock idea. And I don't necessarily see that that's
• 28:56
  Speaker 2: not investing in that wealth management we talked about earlier
• 28:58
  Speaker 2: in this discussion. That's really just trades and people just
• 29:01
  Speaker 2: playing the momentum.
• 29:06
  Speaker 1: You say you deal with a lot of family offices.
• 29:08
  Speaker 1: How many of them are trying to hedge by moving
• 29:12
  Speaker 1: money out of the United States.
• 29:15
  Speaker 2: They're moving money, well, they're concerned about the dollar, so
• 29:19
  Speaker 2: to that extent, they're moving some money out of state,
• 29:23
  Speaker 2: out of the States, but there's no equal safety net
• 29:27
  Speaker 2: anywhere else than the dollar to them. So more of
• 29:30
  Speaker 2: them are moving it into real estate if they want
• 29:32
  Speaker 2: to get out of the market, or gold. And that's
• 29:35
  Speaker 2: we're seeing quite a bit of that, quite a bit
• 29:37
  Speaker 2: of that now. The international markets they've warmed to that
• 29:41
  Speaker 2: because they've seen the money that's being spent in Europe
• 29:43
  Speaker 2: now on not only defense but on infrastructury building. One
• 29:47
  Speaker 2: of these nasty little facts up there is you can
• 29:49
  Speaker 2: no longer drive a Porsche at one hundred and ten
• 29:50
  Speaker 2: miles an hour on the Autobahn because the Germans have
• 29:53
  Speaker 2: been so austere that they haven't fixed their podles on
• 29:55
  Speaker 2: the Augabon so and this became really came to light
• 29:59
  Speaker 2: when NATO talking about moving tanks over certain bridges that
• 30:02
  Speaker 2: had to cross Germany to Poland. The bridges wouldn't hold
• 30:05
  Speaker 2: the tanks. So this is an example of money being spent.
• 30:08
  Speaker 2: Part of it is you kind of shake your head
• 30:10
  Speaker 2: and go, how could they let that happen? That's the
• 30:12
  Speaker 2: Postmarkel years. But the other side of it, and it's
• 30:15
  Speaker 2: really an issue, but a positive issue from investment, is
• 30:19
  Speaker 2: that these companies that do that type of work will
• 30:22
  Speaker 2: be profitable for a while. You could say the same
• 30:24
  Speaker 2: thing in certain emerging markets where they're going to do
• 30:27
  Speaker 2: pretty well. And the family offices have been ahead of
• 30:29
  Speaker 2: that game. They've been going in that direction for the
• 30:32
  Speaker 2: better part of a year. And some of that has
• 30:34
  Speaker 2: been political, right, some of them have recognized that Trump's
• 30:37
  Speaker 2: going to push them to do things that they didn't
• 30:39
  Speaker 2: want to do the European countries, and they're responding and
• 30:43
  Speaker 2: doing it. And family offices didn't get that wealthy by
• 30:46
  Speaker 2: being stupid. They recognize that there's an opportunity there.
• 30:51
  Speaker 1: The family office. You know, for those that are not
• 30:54
  Speaker 1: familiar with that language, it's usually it's inherited. It's usually
• 30:57
  Speaker 1: second least second generation, third generation and sort of wealth
• 31:01
  Speaker 1: right that is now.
• 31:04
  Speaker 2: For interrupting, but now more first generation because of the
• 31:08
  Speaker 2: tech wealth. Right, So a Zuckerberg has a family office
• 31:11
  Speaker 2: or Bezos and all of them. But to your point,
• 31:14
  Speaker 2: Kennedy's didn't put a family office together until Joseph Kennedy
• 31:18
  Speaker 2: was getting pretty old, right, and it was really already
• 31:21
  Speaker 2: moved down to the younger, younger generation. It was a
• 31:25
  Speaker 2: method of privacy, right. The idea was that they didn't
• 31:27
  Speaker 2: want anybody really knowing what they had exactly, and what
• 31:30
  Speaker 2: kind of trades they were making, and what kind of
• 31:32
  Speaker 2: banks they had money at. And they couldn't just swear
• 31:36
  Speaker 2: their accountants and their attorneys to secrecy, so they could
• 31:38
  Speaker 2: employ them and threaten to fire them from that job
• 31:41
  Speaker 2: if they said anything. And so they created that years ago.
• 31:45
  Speaker 2: It was one hundred million dollars was a qualifier for
• 31:47
  Speaker 2: a family office. Today you wouldn't really, it doesn't make
• 31:51
  Speaker 2: sense financially to start under a billion dollars of family networth.
• 31:55
  Speaker 2: You plug into something called a multi family office, which
• 31:58
  Speaker 2: is what we do in one of our visions, where
• 32:00
  Speaker 2: we essentially help a number of families and they commingle
• 32:05
  Speaker 2: their assets for certain investment opportunities. They commingle their assets
• 32:08
  Speaker 2: for economies of scale with advisors that type of thing.
• 32:12
  Speaker 2: Big change a couple of years ago where the SEC
• 32:14
  Speaker 2: required them to register as investment advisors, and it was
• 32:20
  Speaker 2: knocked back but it was. It was a big deal
• 32:23
  Speaker 2: because a lot of these Once you register as an
• 32:25
  Speaker 2: investment advisor, now the SEC knows what you're doing, and
• 32:28
  Speaker 2: it defeats that whole privacy issue. So there's some complications there.
• 32:32
  Speaker 1: Well, I will tell you, and I want to just
• 32:34
  Speaker 1: sort of share with listeners and viewers why I've become
• 32:37
  Speaker 1: more interested in family offices. As you look for investors
• 32:41
  Speaker 1: in new businesses, particularly in the media space, a family
• 32:46
  Speaker 1: office is more likely to give you time, have patients,
• 32:56
  Speaker 1: you know, not necessarily, not all of them are this way,
• 32:59
  Speaker 1: but some are. You're more likely to find versus working
• 33:01
  Speaker 1: with just a larger private equity firm. Who needs help.
• 33:05
  Speaker 1: I need my three year return, I need a what's
• 33:07
  Speaker 1: my exit ramp in five years? What's my exer versus
• 33:09
  Speaker 1: much right? And and sometimes it is political alignment, you know,
• 33:16
  Speaker 1: I'm involved with investment's been over ten years now, that's
• 33:20
  Speaker 1: kind of been flat. It's gone really nowhere, but it's
• 33:24
  Speaker 1: been a sustainable real estate development and and different, you know,
• 33:30
  Speaker 1: and it's come close, but it's it's been family offices
• 33:34
  Speaker 1: that were the primary primary investors. And it is a
• 33:41
  Speaker 1: it has been a long time horizon it's show wee.
• 33:43
  Speaker 2: It's an increasingly it's an increasingly popular source of investment
• 33:48
  Speaker 2: in capital for companies. For exactly why you say they
• 33:51
  Speaker 2: have a They have a very long time horizon and
• 33:53
  Speaker 2: they're very patient and they don't need a return immediately.
• 33:56
  Speaker 1: Well they may be. It's their way of like, hey
• 33:59
  Speaker 1: we got to fix local news. I get it. You
• 34:01
  Speaker 1: need ten years not three years, okay, versus you know
• 34:05
  Speaker 1: your Apollo. You know, look they got a It's almost
• 34:07
  Speaker 1: like a factory of investments, right.
• 34:09
  Speaker 2: Yeah, yeah, that's exactly right. Yeah, yeah, Pollow is a
• 34:12
  Speaker 2: good example. No, but it's an interesting group. I enjoy it.
• 34:18
  Speaker 2: I love one of the reasons I'm still in businesses.
• 34:21
  Speaker 2: I love hearing about somebody creating a new widget and
• 34:24
  Speaker 2: then building a company around it. I just find that
• 34:27
  Speaker 2: to be.
• 34:28
  Speaker 1: And you get that more often with family office investments
• 34:31
  Speaker 1: than with just generic private equity.
• 34:33
  Speaker 2: Right yeah, yeah. I mean private equity has been the
• 34:37
  Speaker 2: source for a lot of these smaller companies to be
• 34:40
  Speaker 2: taken out and purchased. I mean private equity is buying
• 34:43
  Speaker 2: into doctors groups and dentist groups and veterinarian groups, so
• 34:46
  Speaker 2: they're getting on a granular level with businesses, family offices,
• 34:50
  Speaker 2: you see, not necessarily buying businesses. They'll buy into something
• 34:53
  Speaker 2: or they'll be the seed investor for it.
• 34:56
  Speaker 1: Let's talk about some of the I think as I
• 35:01
  Speaker 1: sort of been saying, I said, look, the pitchforks are
• 35:03
  Speaker 1: getting sharpened, and I think there are some wealthy people
• 35:07
  Speaker 1: who are nervous about this, you know, and you see
• 35:10
  Speaker 1: the stories about people building bunkers and all of this stuff.
• 35:13
  Speaker 1: Do you have many investors that are worried about this
• 35:15
  Speaker 1: inequality coming for them.
• 35:18
  Speaker 2: It's more of a conversation now than it has been ever.
• 35:23
  Speaker 2: I don't have anybody that is. I mean, if they're
• 35:26
  Speaker 2: building a bunker in Florida, it's because of hurricanes, not
• 35:28
  Speaker 2: because somebody's coming out now.
• 35:30
  Speaker 1: You can't build too much of a bunker in Florida.
• 35:31
  Speaker 1: You're going to hit the Atlantic Ocean, so good luck,
• 35:33
  Speaker 1: that's right, Or the golf or the golf.
• 35:37
  Speaker 2: But it's come up, you know. I mean, just just
• 35:40
  Speaker 2: go to Munich this past week, right, you know, the
• 35:44
  Speaker 2: AOC's discussion and others about you know, the change in
• 35:48
  Speaker 2: the world. And I thought that was interesting on a
• 35:51
  Speaker 2: number of levels. But it was an immediate example. And
• 35:54
  Speaker 2: you see it in other countries as well too. You
• 35:56
  Speaker 2: see it a lot more in Europe, and so it'll
• 36:00
  Speaker 2: be interesting to see what happens. But I haven't had
• 36:01
  Speaker 2: any experience where people feel threatened. But I do think
• 36:04
  Speaker 2: it's one of the reasons you have. And we saw
• 36:08
  Speaker 2: it in Covid Here in Florida, the increase in gun
• 36:10
  Speaker 2: sales where people I mean, I live on the water
• 36:14
  Speaker 2: in this little town in bel Air, and I was
• 36:18
  Speaker 2: the only I probably should admit this on a publication,
• 36:21
  Speaker 2: but on the media, but I was the only house
• 36:26
  Speaker 2: on the street that wasn't armed. And I'm not talking
• 36:29
  Speaker 2: about just armed. I'm talking about two three five seven guns.
• 36:33
  Speaker 2: My wife and I she's a native of Pennsylvania and
• 36:35
  Speaker 2: she have brothers had gone hunting, and she said, well, yeah,
• 36:37
  Speaker 2: I know how to use the gun. I go, let's
• 36:39
  Speaker 2: go to the gun range because I got to figure
• 36:40
  Speaker 2: this out because if nothing else, I got to be
• 36:42
  Speaker 2: able to talk to my neighbors. So I think that
• 36:46
  Speaker 2: had something. There is some of that.
• 36:48
  Speaker 1: It's something about Florida. It's so funny. It's like, I
• 36:52
  Speaker 1: know a lot of people that are in your situation
• 36:54
  Speaker 1: who are like, boy, I don't want to be a
• 36:55
  Speaker 1: gun owner, but if everybody else can have a gun
• 36:57
  Speaker 1: around me, I better maybe I.
• 36:58
  Speaker 2: Should feel it really stupid.
• 37:00
  Speaker 1: Yeah, you're like, am I going to be that? And
• 37:02
  Speaker 1: and like what happened?
• 37:03
  Speaker 2: You know?
• 37:03
  Speaker 1: But that is you know, I'm also one of those
• 37:06
  Speaker 1: who believes in statistics and and the numbers say you're
• 37:11
  Speaker 1: more likely to die of a gunshot wound if you
• 37:13
  Speaker 1: have a gun in the house than if you don't
• 37:15
  Speaker 1: have a gun in the house. Yeah, and yeah, I
• 37:17
  Speaker 1: believe that.
• 37:18
  Speaker 2: Yeah, and I would have to be the guy says,
• 37:20
  Speaker 2: hold on just a minute. I'm just trying to figure
• 37:22
  Speaker 2: out how to load this thing. Give me just a second.
• 37:25
  Speaker 2: It wouldn't it wouldn't be pretty. So I thankfully I am
• 37:28
  Speaker 2: married to a very smart woman who knows how to
• 37:30
  Speaker 2: do that. And so we've agreed that if we're under attack,
• 37:33
  Speaker 2: she'll defend us.
• 37:34
  Speaker 1: Well, but basically she's going to survive. You'll be done
• 37:37
  Speaker 1: in like the first couple of days of the.
• 37:39
  Speaker 2: She's mentioned that, actually she's mentioned.
• 37:42
  Speaker 1: That, Yeah, when when money will be worthless and we're
• 37:46
  Speaker 1: trading bottle caps, you know, as our new currency. I joke,
• 37:51
  Speaker 1: except that is the kind of the plot line of
• 37:54
  Speaker 1: the TV show Fallout, which I I am. I look
• 38:02
  Speaker 1: at the bad guys in Fallout, and all the bad
• 38:05
  Speaker 1: guys now are either corporate like titans, right. Our new
• 38:10
  Speaker 1: bad guys are corporate titans or private equity people right,
• 38:13
  Speaker 1: the uber and super rich. And you have people complaining
• 38:18
  Speaker 1: that private equity. You just talked about them investing in doctors'
• 38:20
  Speaker 1: offices and denis practices and you've got you know, buying
• 38:24
  Speaker 1: up houses to rental properties and stuff. Do folks in
• 38:30
  Speaker 1: private equity know that their brand is for shift these
• 38:34
  Speaker 1: days that you know, it's not that positive.
• 38:38
  Speaker 2: You know, it's it's it's a great question, and the
• 38:41
  Speaker 2: short answer is yes. And this has been the same
• 38:44
  Speaker 2: as people that made a lot of money on Wall
• 38:46
  Speaker 2: Street for many years. They weren't in the business to
• 38:48
  Speaker 2: be like they were in the business to get rich.
• 38:50
  Speaker 2: And I think that's I think that still still is
• 38:53
  Speaker 2: out there. I mean they think and the rationalization is
• 38:57
  Speaker 2: their investments into companies create the capital for those companies
• 39:02
  Speaker 2: to do better, and so they rationalize that. And you know,
• 39:06
  Speaker 2: they defend themselves against carried interest in other things. But
• 39:10
  Speaker 2: you know, it's it's it's it's it's an issue. But
• 39:12
  Speaker 2: they don't. They don't really worry as much about what
• 39:14
  Speaker 2: they thought of as looking for the next best investment opportunity.
• 39:17
  Speaker 2: There's a ton of private equity cash out there looking
• 39:21
  Speaker 2: for places to invest in things. I mean, roofing companies
• 39:24
  Speaker 2: here in Florida are now being bought up, independent car washes,
• 39:28
  Speaker 2: little car washes.
• 39:30
  Speaker 1: Private equity is rolling up roofers.
• 39:33
  Speaker 2: Roofers, and and and. Two years ago the big thing
• 39:36
  Speaker 2: was car washes, So they look for places too.
• 39:39
  Speaker 1: I thought car washes were all money laundering fronts. I mean, well,
• 39:43
  Speaker 1: semi facetious, but not facetious.
• 39:46
  Speaker 2: I think I think that was the the extension of laundromats, right,
• 39:50
  Speaker 2: I mean it was wherever, wherever cash was you. But
• 39:53
  Speaker 2: but you know, I'm I'm relatively I'm relatively positive about
• 39:57
  Speaker 2: the economy for for a bunch of reasons. The mayor
• 40:00
  Speaker 2: may not get talked about here. So the private equity
• 40:03
  Speaker 2: some degree provides some liquidity for folks that are looking
• 40:06
  Speaker 2: to sell their businesses that might not otherwise have been
• 40:09
  Speaker 2: able to sell. Now the question is what do they
• 40:11
  Speaker 2: do with it afterwards? That's the big criticism. Right, they
• 40:15
  Speaker 2: take a business, they need to make it profitable. In
• 40:17
  Speaker 2: five years. They don't have that time horizon. We spoke
• 40:19
  Speaker 2: about a little while ago about family offices. So they
• 40:23
  Speaker 2: do things cutting services, firing people, doing all sorts of
• 40:26
  Speaker 2: things that are on well.
• 40:27
  Speaker 1: Nursing homes has been a classic case. I mean, look,
• 40:30
  Speaker 1: I get what's attractive to private equity when you do
• 40:33
  Speaker 1: roll ups, Like it makes sense to me about rufers.
• 40:36
  Speaker 1: Car washes. Let make less sense to me, but rufers
• 40:38
  Speaker 1: makes sense to me because in Florida, you suddenly will
• 40:41
  Speaker 1: have a steady stream of government controlled cash that is
• 40:46
  Speaker 1: suddenly going to pay for bills or with a doctor's offices,
• 40:51
  Speaker 1: it's Medicare with you know that there is a source
• 40:54
  Speaker 1: of constant revenue that comes in, which for private equity
• 40:58
  Speaker 1: is attractive. So I sort of get maybe what they're
• 41:02
  Speaker 1: thinking on the roofer front that if you've cornered the
• 41:04
  Speaker 1: market on roofers, you're going to have all this FEMA
• 41:07
  Speaker 1: aid coming in and insurance, you know, money automatically coming
• 41:13
  Speaker 1: You're not you're not as reliant on individual customers as
• 41:18
  Speaker 1: you are and sort of, you know, collect a collection
• 41:21
  Speaker 1: of customers that are forced to use your service because.
• 41:26
  Speaker 2: And then if they can find businesses that have automatic,
• 41:29
  Speaker 2: repeatable cash flow where somebody's put them on a you know,
• 41:32
  Speaker 2: on a on some kind of contract where they pay
• 41:34
  Speaker 2: two hundred a month or one hundred and fifty a month,
• 41:36
  Speaker 2: whether it's a gym or you know, it's it's it's
• 41:38
  Speaker 2: the whole idea of the cell phone business. Right. They
• 41:40
  Speaker 2: like that repeatable, dependable cash flow that gives evaluation higher.
• 41:45
  Speaker 2: I have a good friend who owns a series of
• 41:47
  Speaker 2: coffee shops. The private equity. You are looking at these
• 41:49
  Speaker 2: coffee shops being able to to monetize them. Again, it's
• 41:55
  Speaker 2: it's interesting. It's entrepreneurism, and it's a it's I'm not
• 41:58
  Speaker 2: sure if it's his best or it's but it's entrepreneurs.
• 42:01
  Speaker 1: I think we're trying to figure that out, right. It's
• 42:03
  Speaker 1: like it's you know, it's interesting as I've been trying
• 42:07
  Speaker 1: to start a couple of small what in comparison with
• 42:12
  Speaker 1: the small businesses, you know, the structure is an impediment, right,
• 42:17
  Speaker 1: thinking about well, how can I afford you know, I
• 42:19
  Speaker 1: could afford to pay salaries, but I can't afford the
• 42:22
  Speaker 1: benefits for salaries like that. And you know, you know,
• 42:26
  Speaker 1: a big entity can sort of can can weather that
• 42:30
  Speaker 1: a small startup. This feels like it's never been harder
• 42:34
  Speaker 1: to start up a small business that's more than five employees.
• 42:39
  Speaker 1: That that the you know, it's one thing to have
• 42:41
  Speaker 1: like five employees or less, right, super small business basically
• 42:44
  Speaker 1: do it yourself. Then there's well no, no, no, you're you're
• 42:48
  Speaker 1: you're going to have a payroll of somewhere between say
• 42:51
  Speaker 1: six and twenty. That feels like a nightmare now to
• 42:55
  Speaker 1: start a business like that, and and that kind of
• 42:58
  Speaker 1: feels like that shouldn't be the case.
• 43:00
  Speaker 2: Payroll companies take off some of that challenge, right where
• 43:03
  Speaker 2: you can have somebody do all that for a couple
• 43:05
  Speaker 2: of cents per employee. But you're right, it's not as
• 43:08
  Speaker 2: easy as just doing your thing you've got. I mean,
• 43:10
  Speaker 2: you talk to anybody that's in a restaurant business or
• 43:12
  Speaker 2: anybody that's a doctor. They take the weekends to fill
• 43:15
  Speaker 2: out insurance forms, right in the case of the restaurant business. There,
• 43:18
  Speaker 2: So it is, it's it's true entrepreneurship and small businesses.
• 43:23
  Speaker 2: And you know the stat right, but our country is
• 43:25
  Speaker 2: primarily small businesses, and so that's you know, it's it's
• 43:30
  Speaker 2: something that needs to grow and needs to continue. But
• 43:32
  Speaker 2: it's hard they.
• 43:33
  Speaker 1: Don't think we have the laws in place that encourage
• 43:36
  Speaker 1: small business startups or not, because I would argue we don't.
• 43:41
  Speaker 2: I agree with you. I agree with you. I think
• 43:43
  Speaker 2: it's one of the reasons that, you know, as much
• 43:45
  Speaker 2: as economists are crawling for interest rates to stay where
• 43:48
  Speaker 2: they are because the fear of inflation coming back, I
• 43:50
  Speaker 2: think interest rates are too high for that exact example.
• 43:54
  Speaker 2: Folks are having a lot of trouble getting capital, and
• 43:56
  Speaker 2: if they can get it, the interest rate is ridiculously high.
• 43:59
  Speaker 2: So get about even buying a house.
• 44:01
  Speaker 1: Just let me throw I mean, I'll give you two
• 44:03
  Speaker 1: items that I never thought i'd sound like a Bernie
• 44:08
  Speaker 1: Sanders on this, But if you took the burden of
• 44:11
  Speaker 1: healthcare and childcare off of a business owner to as
• 44:17
  Speaker 1: a benefit, and the government was helping with that, I
• 44:21
  Speaker 1: could probably start up this business a lot sooner.
• 44:24
  Speaker 2: Yeah, yeah, yeah, I mean, that's not Bernie Sanders, that's
• 44:27
  Speaker 2: just become common sense. But you're right, that's where he would,
• 44:31
  Speaker 2: you know.
• 44:31
  Speaker 1: And that's the trouble. Those that want to fight it say, oh,
• 44:33
  Speaker 1: that's socialism. It's like, no, this is government making it
• 44:36
  Speaker 1: easier to start a small business. The halfway pitching this.
• 44:40
  Speaker 2: Yeah, there's a halfway step in between, right, and that's
• 44:43
  Speaker 2: making more access to capital and there are a lot
• 44:46
  Speaker 2: of proposals out there for that. And again that's sometimes
• 44:50
  Speaker 2: private equity. That's sometimes banks. Bank regulations on the regional
• 44:54
  Speaker 2: bank side are ridiculous, really ridiculous.
• 44:57
  Speaker 1: And I'm not plain and I get it. It's like, look,
• 45:00
  Speaker 1: the regional the small and regional banks are paying a
• 45:04
  Speaker 1: penalty for the sins of Layman Brothers.
• 45:06
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• 48:06
  Speaker 1: life insurance is something you should really think about it,
• 48:08
  Speaker 1: especially if you've got a growing family. Why what's your
• 48:17
  Speaker 1: sense in the public markets? Is there no longer as
• 48:20
  Speaker 1: much confidence in the public markets. It seems like there
• 48:23
  Speaker 1: are more and more companies that don't want the hassle
• 48:25
  Speaker 1: of shareholders, don't want the hassle of quarterly filings, things
• 48:31
  Speaker 1: like that, and more and more are I would like
• 48:36
  Speaker 1: to stay as private companies.
• 48:38
  Speaker 2: There is a trend, there is a trend for exenative buildings,
• 48:42
  Speaker 2: less less reporting. You're seeing it even more with the
• 48:44
  Speaker 2: AI companies right Athropic, Open Ai. They they they can
• 48:51
  Speaker 2: they can set an artificial valuation of the company. Nobody
• 48:54
  Speaker 2: can really challenge that. You're seeing some of that. I'm
• 48:57
  Speaker 2: not necessarily sure that's a lack of confidence in the
• 49:01
  Speaker 2: public markets. I just don't think they need the capital
• 49:04
  Speaker 2: because they're getting plenty of capital from private sources. Remember,
• 49:07
  Speaker 2: one of the reasons a company goes public is access
• 49:09
  Speaker 2: to unlimited capital. Frankly, right now in our society, we
• 49:13
  Speaker 2: have access to unlimited private capital. So I think that's
• 49:16
  Speaker 2: a lot of the driver, more so than just the
• 49:18
  Speaker 2: fact that and talking about confidence in the public markets
• 49:22
  Speaker 2: from a retail client perspective, I see it actually being
• 49:26
  Speaker 2: the reverse. I see a lot of confidence. Robin Hood
• 49:28
  Speaker 2: is killing it because they're opening so many accounts for
• 49:31
  Speaker 2: young investors who want to be part of the markets.
• 49:33
  Speaker 2: So I think in that way it's pretty strong. You
• 49:39
  Speaker 2: see examples of it. You see examples of it in
• 49:42
  Speaker 2: the way that younger people are operating just right now.
• 49:45
  Speaker 2: Obviously you see them doing these memestop type of things,
• 49:48
  Speaker 2: which is bordering on a little sinsanity, But generally speaking
• 49:52
  Speaker 2: they like to invest.
• 49:55
  Speaker 1: Well do they like to invest?
• 49:56
  Speaker 2: Or?
• 49:56
  Speaker 1: Are they gambling? There's one of that. Yeah, I mean
• 50:00
  Speaker 1: the we're the prediction gambling houses because I just refuse
• 50:07
  Speaker 1: to call them markets. Yes, that it is a market
• 50:11
  Speaker 1: per se, but it is I think it's a rigged market.
• 50:15
  Speaker 1: Can talk about it.
• 50:16
  Speaker 2: If they're buying an et F s and five hundred,
• 50:19
  Speaker 2: that's necessarily right, right, Yeah, No, you're right.
• 50:22
  Speaker 1: But but I do think we've we're market you know,
• 50:25
  Speaker 1: we're sort of we're making everything seem like a a
• 50:30
  Speaker 1: what do you were? Commoditized? Monetizing everything right? You know,
• 50:34
  Speaker 1: I assume we're you know, you're gonna be instead of
• 50:38
  Speaker 1: paying you know, how do you pay your quarterback? In
• 50:41
  Speaker 1: college football? You know, the fans may be asked to
• 50:44
  Speaker 1: buy a share of I'm a big University of Miami guy.
• 50:47
  Speaker 1: You know we might you know, I'm gonna you know,
• 50:49
  Speaker 1: can you buy ten shares of Carson Beck's salary? Like
• 50:52
  Speaker 1: why do I have a feeling that? And then and
• 50:54
  Speaker 1: then I might trade it on a market because ah,
• 50:57
  Speaker 1: he's doing well, somebody will buy it. It's worth more
• 50:59
  Speaker 1: now because he might be a Heisman Trophy candidate. I mean,
• 51:02
  Speaker 1: I guess that's what the prediction markets are are are
• 51:05
  Speaker 1: serving as in some form or another. I don't know
• 51:09
  Speaker 1: if we need all that.
• 51:10
  Speaker 2: I never understood the portal concept in college sports, where
• 51:15
  Speaker 2: somebody can go and to another school. I mean, can
• 51:18
  Speaker 2: you imagine being a coach. I think that's why Lou
• 51:20
  Speaker 2: Saban said, that's it. I'm done.
• 51:23
  Speaker 1: You're showing your Lou Saban was a Miami guy. Nick Saban,
• 51:26
  Speaker 1: not related to but thank you man who saved Miami football.
• 51:31
  Speaker 1: So I always have a strong feeling, a warm feeling
• 51:34
  Speaker 1: about him.
• 51:34
  Speaker 2: Listen that you you you should have been very proud.
• 51:37
  Speaker 2: I hope you were. In the National National Championship game.
• 51:39
  Speaker 2: They played them tough. That was that was a great game.
• 51:42
  Speaker 2: So we were all we were all kind of cheering
• 51:45
  Speaker 2: down here because we want.
• 51:46
  Speaker 1: To Badio's first time. Floridians seemed to like, yeah, let's
• 51:50
  Speaker 1: root for my Like Miami usually was the black hat team,
• 51:52
  Speaker 1: you know, to the rest of the day, had a
• 51:54
  Speaker 1: lot of support. I could feel it. For the first time.
• 51:57
  Speaker 1: Miami wasn't hated.
• 51:59
  Speaker 2: But you know, there is there is a sea change, Chuck,
• 52:01
  Speaker 2: that's going on. Economically. I'm not sure I'm qualified to
• 52:05
  Speaker 2: to say where it's going to end up, but I
• 52:09
  Speaker 2: see there's a casino like approach to certain markets. You
• 52:13
  Speaker 2: didn't want to call them markets. There are markets technically,
• 52:15
  Speaker 2: but it's it's a it's a.
• 52:18
  Speaker 1: Town has an advantage that you can't see, you know,
• 52:22
  Speaker 1: I don't you know, for instance, on slot machines, none
• 52:24
  Speaker 1: of us know exactly how that algorithm works in those
• 52:28
  Speaker 1: slot machines. Nobody you know, but somebody has the answer
• 52:32
  Speaker 1: to that somebody knows when that slot machine one, you know,
• 52:37
  Speaker 1: one hundred and thirty three, you know on the floor
• 52:39
  Speaker 1: is going to pay out. You know, you know, somebody
• 52:43
  Speaker 1: knows the answer. And that's my concern about these prediction markets,
• 52:46
  Speaker 1: is that somebody knows the answer and can gain it.
• 52:49
  Speaker 2: I think there's you know, what we're seeing the prediction
• 52:52
  Speaker 2: markets now, for example, I mean, we've had a couple
• 52:54
  Speaker 2: of good years in the market, and the projection is
• 52:57
  Speaker 2: for twenty twenty six to be good too, until it
• 53:00
  Speaker 2: becomes fairly clear, if it becomes fairly clear that there
• 53:04
  Speaker 2: might be a wholesale change politically in the mid terms,
• 53:07
  Speaker 2: and then you're seeing all of a sudden things look
• 53:09
  Speaker 2: a little bit different. And so we're already trying to
• 53:12
  Speaker 2: game that out, and that could be very interesting. If
• 53:17
  Speaker 2: the house flips, you'll see people, you know, draw back,
• 53:20
  Speaker 2: I think out of the market.
• 53:22
  Speaker 1: You'll see, yeah, and then somebody is going to point
• 53:24
  Speaker 1: out the chart that shows how well the market does
• 53:26
  Speaker 1: with divide of.
• 53:27
  Speaker 2: Government divided government. And in fact, if you go a
• 53:30
  Speaker 2: little further back, is you know democrats, you know, because
• 53:34
  Speaker 2: they had this reputation for spending more money actually stock
• 53:37
  Speaker 2: markets did pretty well under.
• 53:38
  Speaker 1: Prest democratic presidents. Right have all I get called a
• 53:42
  Speaker 1: liar when I say that, it's just a fact. I mean,
• 53:45
  Speaker 1: it's just been how it's worked going back to it
• 53:49
  Speaker 1: goes back to Reagan, right, Carter and Reagan, but it
• 53:51
  Speaker 1: goes back in politically.
• 53:53
  Speaker 2: Though. I think that you asked this earlier in the discussion,
• 53:57
  Speaker 2: but I think you're going to see more and more
• 53:59
  Speaker 2: of an impact politically on economic situations going forward. And
• 54:02
  Speaker 2: I think it's a byproduct of what's happened over the
• 54:06
  Speaker 2: last few years, particularly with President Trump. I think regardless
• 54:11
  Speaker 2: of which way it goes, you're going to have a
• 54:13
  Speaker 2: seesaw type of effect.
• 54:15
  Speaker 1: Well, I don't expect you to say this, but I'm
• 54:19
  Speaker 1: going to say this, and I'm going to ask you
• 54:20
  Speaker 1: whether this is having some impact the more transactional that
• 54:24
  Speaker 1: Trump presents himself as. So you know, I talked about
• 54:27
  Speaker 1: the crypto industry who just basically got in bed with him,
• 54:30
  Speaker 1: and AI decided to get in bed, like, look, we
• 54:33
  Speaker 1: can get we can get more of what we want
• 54:35
  Speaker 1: out of here. Let's just make this bet in the
• 54:37
  Speaker 1: moment and we'll deal with We'll deal with when the
• 54:41
  Speaker 1: other party gets power. We'll deal with them when we
• 54:43
  Speaker 1: when they get power, and we'll figure it out. And
• 54:48
  Speaker 1: the concern I have is this is like step one
• 54:51
  Speaker 1: to kleptocracy. And let me just ask you this, when
• 54:55
  Speaker 1: do you tell a client be careful investing in country
• 54:58
  Speaker 1: X because the government is too involved in the economy.
• 55:03
  Speaker 2: I haven't had that conversation yet, but I do a
• 55:05
  Speaker 2: fair amount of interviews Great Britain and of course Farage
• 55:10
  Speaker 2: coming in. I mean, there's an example of something that
• 55:13
  Speaker 2: you have to keep an eye on, and I think
• 55:16
  Speaker 2: about coming up recently.
• 55:17
  Speaker 1: You know, Turkey is a place that is a on
• 55:20
  Speaker 1: one hand, is an interesting, vibrant economy I mean, and
• 55:23
  Speaker 1: maybe an investable place. On the other hand, I wouldn't
• 55:27
  Speaker 1: trust that government.
• 55:28
  Speaker 2: But Turkey is not a conversation that comes up very
• 55:31
  Speaker 2: regularly for investing. Now Brazil, that's something we hear a
• 55:34
  Speaker 2: lot about. And Brazil was on fire last year, so
• 55:36
  Speaker 2: it did very well. So yeah, I mean, you have
• 55:39
  Speaker 2: to watch it. But I think I think, you know,
• 55:42
  Speaker 2: what worries me about some of the indications that the
• 55:45
  Speaker 2: FED isn't as independent as we would like. So what
• 55:49
  Speaker 2: worries me about more than the stock market. What worries
• 55:52
  Speaker 2: me is the bond market, and the bond market picks
• 55:55
  Speaker 2: up these these inconsistencies that are going on economically, and
• 55:58
  Speaker 2: I think we're going to see more potential for that.
• 56:00
  Speaker 2: Goldman Sacks is predicting middle single digit returns and equity
• 56:04
  Speaker 2: markets for the next couple of years, which surprised a
• 56:08
  Speaker 2: lot of us, and they continue to double down on that.
• 56:11
  Speaker 2: I'm not sure that's true. I see some potential for
• 56:15
  Speaker 2: Do you.
• 56:15
  Speaker 1: Think they're saying that they just don't have confidence in
• 56:17
  Speaker 1: the central bank.
• 56:19
  Speaker 2: That's the dollar, the central bank. I think the uncertainty,
• 56:24
  Speaker 2: not knowing about terrorists. I think the Supreme Court, frankly
• 56:27
  Speaker 2: is going to go against the terrorists. But there's no
• 56:30
  Speaker 2: mechanism that we have to be able to refund one
• 56:32
  Speaker 2: hundred and twenty five billion dollars, which is roughly what's
• 56:34
  Speaker 2: been collected. So I think they're going to split the
• 56:37
  Speaker 2: baby and say, look, you don't have to give back
• 56:39
  Speaker 2: the tariffs that you got, but you can't do it
• 56:40
  Speaker 2: going forward. So administration is going to be forced to
• 56:43
  Speaker 2: find another avenue for that. They'll probably find something. But
• 56:47
  Speaker 2: the point is this uncertainty and not knowing what's going
• 56:49
  Speaker 2: to happen. I think Goldman's is predicting that that's going
• 56:53
  Speaker 2: to impact company's earnings, it's going to impact their businesses,
• 56:57
  Speaker 2: and we've seen some of that already. So it's the
• 57:00
  Speaker 2: next couple of years I actually, I actually think are
• 57:04
  Speaker 2: going to be more interesting from a volatility standpoint.
• 57:08
  Speaker 1: Well, it's interesting. I why why do you because well
• 57:13
  Speaker 1: you said two different things here, and that's why I
• 57:15
  Speaker 1: want to I want to clarify as we as we
• 57:17
  Speaker 1: land this play. You seem to be pretty a little
• 57:20
  Speaker 1: more bullish on this year economically than most people. So
• 57:23
  Speaker 1: let's unpack that.
• 57:24
  Speaker 2: Why companies' earnings are excellent and they continue to revise
• 57:30
  Speaker 2: them upwards. They're very lean and they've stayed lean after COVID.
• 57:34
  Speaker 2: That's why you don't see unemployment changing all that dramatically today.
• 57:39
  Speaker 2: Michael Barr in his speech, one of the FED governors
• 57:41
  Speaker 2: actually talked about the disruption short term major disruption the
• 57:45
  Speaker 2: labor markets that AI is going to produce. So that's
• 57:49
  Speaker 2: the thing that I worry about coming down the road.
• 57:51
  Speaker 2: But for the next and we used to look at
• 57:53
  Speaker 2: things three to five years. Now we're looking at things
• 57:55
  Speaker 2: as three to six months. In the three to six
• 57:58
  Speaker 2: months period. I'm pretty positive after those times, it's we're
• 58:02
  Speaker 2: not predicting.
• 58:05
  Speaker 1: How much do you look at the what happened to
• 58:08
  Speaker 1: the railroads in the eighteen seventies and eighties and certainly
• 58:14
  Speaker 1: what happened in the UK, And how much do you
• 58:17
  Speaker 1: think that AI investors ought to be thinking about that?
• 58:21
  Speaker 2: Perhaps not AI investors as much as software companies. I
• 58:24
  Speaker 2: think it's very possible that software companies are some of
• 58:27
  Speaker 2: the casualties to that where AI can replace them. And
• 58:30
  Speaker 2: it takes three to six months to write code by
• 58:32
  Speaker 2: somebody that's really good, AI might do it in twelve minutes,
• 58:35
  Speaker 2: so that's going to be a challenge for some software companies.
• 58:38
  Speaker 1: I also hear you there, but I kind of feel
• 58:40
  Speaker 1: like I kind of feel like this was an overreaction
• 58:43
  Speaker 1: about software companies because you still want expertise, Like I
• 58:47
  Speaker 1: want to train musician to oversee AI trying to compose music.
• 58:54
  Speaker 1: I don't want just some random schmengy doing it right.
• 58:57
  Speaker 1: So I still want a software you know, one time
• 59:04
  Speaker 1: inventor and codeer overseeing this.
• 59:07
  Speaker 2: I agree, and I think it was an overreaction. They
• 59:09
  Speaker 2: threw the baby out with the bathwater. You're not going
• 59:11
  Speaker 2: to replace a crowd strike or a snowflake. Those are
• 59:14
  Speaker 2: essential software companies that are doing essential work right. But
• 59:18
  Speaker 2: I think as that refines over the next year to three,
• 59:21
  Speaker 2: you're going to see some of them be casualties for this.
• 59:23
  Speaker 2: And I can't name names in that, and I can't
• 59:26
  Speaker 2: even think that far ahead, but I'm sure that that's
• 59:28
  Speaker 2: going to be an occurrence. But keep in mind, this
• 59:31
  Speaker 2: AI is only in the second inning. They're just fumbling around.
• 59:35
  Speaker 2: I mean, I don't know how many times you hitch
• 59:37
  Speaker 2: at GBT, but it's kind of amazing, whether it's that
• 59:40
  Speaker 2: or Gemini, how many questions you get answered right. And
• 59:43
  Speaker 2: this is before even keep in mind a gentic SERI
• 59:46
  Speaker 2: is coming. That's probably by the end of the year
• 59:50
  Speaker 2: that people there's roughly two million iPhones out there and
• 59:53
  Speaker 2: use will have a system on their phone which will
• 59:57
  Speaker 2: allow them to take money from say Bank of a
• 1:00:00
  Speaker 2: America and send it to Schwab or something like this,
• 1:00:02
  Speaker 2: just in a voice control. I mean, this what Apple
• 1:00:06
  Speaker 2: has taken a long time to get into this AI space.
• 1:00:11
  Speaker 2: They there's a couple of reasons for it, but the
• 1:00:14
  Speaker 2: bottom line is when they deliver this product through this
• 1:00:17
  Speaker 2: mechanism called SIRI. It's going to be a game changer,
• 1:00:20
  Speaker 2: and that'll only be the third or fourth inning. Now
• 1:00:22
  Speaker 2: we're just in the second, So it's you know, there's
• 1:00:26
  Speaker 2: some plus spots to this economy, I really think, but
• 1:00:31
  Speaker 2: there's also going to be some major changes. I think
• 1:00:33
  Speaker 2: one of the reasons I enjoy the business is those
• 1:00:36
  Speaker 2: changes both scare me and excite me.
• 1:00:38
  Speaker 1: Yeah no, I mean, you know, yes, I mean, look,
• 1:00:42
  Speaker 1: I think fear of AI job displacement is going to
• 1:00:45
  Speaker 1: be a driver of a lot of decision making, even
• 1:00:49
  Speaker 1: if we don't have evidence of it right away.
• 1:00:52
  Speaker 2: Yeah, yeah, yeah, yeah. And I think I think the
• 1:00:56
  Speaker 2: politics will become increasingly more important because I think I
• 1:01:00
  Speaker 2: think that the politicians are going to have to understand
• 1:01:03
  Speaker 2: that the populism side of what they're doing might get
• 1:01:07
  Speaker 2: him some votes, but it could hurt him in other ways.
• 1:01:10
  Speaker 2: And I think that's just something that's now being refined.
• 1:01:13
  Speaker 2: I I have a friend who's running for governor down here,
• 1:01:16
  Speaker 2: and he's constantly navigating that minefield. He was a Republican.
• 1:01:20
  Speaker 2: He's now a Democrat because the Republicans hated it because yeah, yeah,
• 1:01:26
  Speaker 2: because he didn't like Trump and and it's it's it's interesting.
• 1:01:29
  Speaker 2: I mean, you look at Svanberger, right, she she you know,
• 1:01:32
  Speaker 2: she she ran one way. She ran as a moderate,
• 1:01:36
  Speaker 2: a centrist. I still think she is, for the most
• 1:01:39
  Speaker 2: part right.
• 1:01:40
  Speaker 1: But when you have one party control, all of a sudden,
• 1:01:42
  Speaker 1: your legislature can define you. I mean, I'm pretty close
• 1:01:46
  Speaker 1: with Pat McCrory, the former Republican governor of North Carolina,
• 1:01:49
  Speaker 1: and you know he will tell you because his legislature was,
• 1:01:52
  Speaker 1: you know, further to the right than Donald Trump was
• 1:01:55
  Speaker 1: at times, and they could override his vetos, so he
• 1:01:59
  Speaker 1: ended up. You agree to some things at a party
• 1:02:03
  Speaker 1: politics that can define you in a way that becomes
• 1:02:06
  Speaker 1: impossible to get yourself out of. It's a warning. I
• 1:02:09
  Speaker 1: worried about this for Spamburger, that she was going to
• 1:02:13
  Speaker 1: have to immediately start as a partisan because of this
• 1:02:16
  Speaker 1: redistricting mess, right, and that it could define her early days.
• 1:02:20
  Speaker 1: And you know, your first impressions, your first impression, and
• 1:02:24
  Speaker 1: it has made a second one. Yeah, yeah, no, that's right,
• 1:02:27
  Speaker 1: that's right. I mean, it's it's very interesting you mentioned
• 1:02:29
  Speaker 1: North Carolina. I said to my wife the other day,
• 1:02:32
  Speaker 1: I can't remember Tom tillis sounding so smart. The last
• 1:02:35
  Speaker 1: couple of interviews i've heard him do. It's like, my goodness,
• 1:02:38
  Speaker 1: where's this guy Chen? Well, he's not going to worry about,
• 1:02:41
  Speaker 1: you know, Trump's endorsement. Like, I mean, it's quite you know,
• 1:02:45
  Speaker 1: we always knew politicians spun, but they're spinning and there's
• 1:02:50
  Speaker 1: like total like capitulation. And I think what we're learning
• 1:02:54
  Speaker 1: from these retiring Republicans who the minute they retire they
• 1:02:58
  Speaker 1: really tell you what's going on.
• 1:03:00
  Speaker 2: They get courage. Yeah, no, no, it's entire it's very understanding.
• 1:03:04
  Speaker 2: But the Democrats don't have a clear run. You know,
• 1:03:06
  Speaker 2: they have a unique ability to snatch the feet from
• 1:03:08
  Speaker 2: the jobs of victory. And I'm afraid that you can
• 1:03:11
  Speaker 2: see that a little bit now. I see that. You know,
• 1:03:12
  Speaker 2: I'm a big fan of these young politicians Momdami and AOC.
• 1:03:17
  Speaker 2: I don't think they can run the country. I think
• 1:03:20
  Speaker 2: that showed just with AOC's interviews of Munich. But the
• 1:03:22
  Speaker 2: fact of the matter is they're refreshing. If you organize
• 1:03:26
  Speaker 2: a lot of kids to come to the voters in
• 1:03:28
  Speaker 2: a big city, I think that works. I'm not sure
• 1:03:30
  Speaker 2: that works in a national election, so it'll be interesting,
• 1:03:34
  Speaker 2: but I watch it more and more now, particularly on
• 1:03:37
  Speaker 2: the centrist side, because I could make a pretty strong
• 1:03:40
  Speaker 2: case the centrist policies are going to be better financially
• 1:03:43
  Speaker 2: than these draconian one way or the other.
• 1:03:45
  Speaker 1: Well, I want to rebrand centrism because you know, get it.
• 1:03:49
  Speaker 1: I always joke, I get accused of being a centrist,
• 1:03:51
  Speaker 1: and what I always say is, nope, I'm an incrementalist.
• 1:03:54
  Speaker 1: There are good left wing ideas and good right wing ideas.
• 1:03:58
  Speaker 1: I like that, and you gotta start a tiny The
• 1:04:02
  Speaker 1: only way to bring the country along on anything is
• 1:04:04
  Speaker 1: you got to go a small step. When you make
• 1:04:07
  Speaker 1: a big leap, that's when the boomerang comes. It always does.
• 1:04:10
  Speaker 1: You can snap back and sometimes go backwards because you
• 1:04:13
  Speaker 1: took too big of a leap and the SmackDown is coming.
• 1:04:16
  Speaker 1: You know, we never like I mean that, you know,
• 1:04:19
  Speaker 1: we don't like too much change. It's so funny, the
• 1:04:24
  Speaker 1: thing that the big conundrum. And you see it because
• 1:04:28
  Speaker 1: when when people's own pot money, he's on the line,
• 1:04:30
  Speaker 1: they stop being disruptors and change agents, right, And we're
• 1:04:35
  Speaker 1: that way as an electorate. We want change and the
• 1:04:38
  Speaker 1: minute somebody implements it, we hate it.
• 1:04:41
  Speaker 2: You're seeing that in the immigration issues, right now in
• 1:04:43
  Speaker 2: the polling. That's right, that's right, that's right.
• 1:04:47
  Speaker 1: Well, Bob, let me ask you this. You sound like
• 1:04:50
  Speaker 1: you're still bullish on basic old investing in the stock market.
• 1:04:54
  Speaker 1: You would still tell somebody today, whatever you can sock away,
• 1:04:57
  Speaker 1: still do it, because you're going to you know, if
• 1:05:01
  Speaker 1: you just sit there, don't look at it, and you know,
• 1:05:04
  Speaker 1: just shoot, you just bought the S and P five
• 1:05:06
  Speaker 1: hundred sort of one of those funds. You're going to
• 1:05:09
  Speaker 1: make ten percent on average over a So that's.
• 1:05:12
  Speaker 2: Good for the thirty year old and maybe even the
• 1:05:14
  Speaker 2: thirty five or forty year old, but I wouldn't have
• 1:05:16
  Speaker 2: that for the sixty year old, and beyond right, i'd
• 1:05:19
  Speaker 2: be and it could be a little lower in age.
• 1:05:21
  Speaker 1: Right.
• 1:05:21
  Speaker 2: It really depends on risk tolerance. That's a that's a
• 1:05:24
  Speaker 2: discussion that really needs to be had with clients. Now,
• 1:05:27
  Speaker 2: be prepared for a thirty percent drop. I don't know
• 1:05:29
  Speaker 2: if it's going to happen. I don't know when it's
• 1:05:31
  Speaker 2: going to happen. But can you afford that? So the
• 1:05:33
  Speaker 2: answer to that, if they say no, is then look,
• 1:05:36
  Speaker 2: you don't belong in a ninety percent equities portfolio. You
• 1:05:39
  Speaker 2: belong in a fifty to fifty or sixty forty and
• 1:05:42
  Speaker 2: you need enough cash to go through a couple of
• 1:05:43
  Speaker 2: years of retirement, so keep it in the bank. I
• 1:05:46
  Speaker 2: think that allocation side and one of the reasons we
• 1:05:48
  Speaker 2: don't worry about AI kicking us out of business, just
• 1:05:51
  Speaker 2: trying to increase our productivity is that's a discussion you
• 1:05:54
  Speaker 2: really have to have with a client. You can't you
• 1:05:56
  Speaker 2: can't put that on chat GBT. That's really a a
• 1:06:00
  Speaker 2: field discussion.
• 1:06:01
  Speaker 1: Well, I mean it's like just like healthcare. I mean,
• 1:06:04
  Speaker 1: you may get a you may you may have more
• 1:06:07
  Speaker 1: data about about the healthcare space thanks to chat GBT,
• 1:06:13
  Speaker 1: but you still want a doctor, a curator you trust
• 1:06:16
  Speaker 1: to explain why chat came up with that come.
• 1:06:19
  Speaker 2: Back to go back and forth. You know, I have
• 1:06:21
  Speaker 2: a bunch of friends that are doctors in my area.
• 1:06:23
  Speaker 2: And one of the things I don't know if you
• 1:06:25
  Speaker 2: remember this or even if you were in in in
• 1:06:28
  Speaker 2: the area you live at the time, but there was
• 1:06:30
  Speaker 2: a men's clothing store called SIMS.
• 1:06:32
  Speaker 1: Oh yeah.
• 1:06:33
  Speaker 2: The educated consumer is our customer is our best customer.
• 1:06:36
  Speaker 2: And I think that applies a friend of mine, as
• 1:06:38
  Speaker 2: a cardiologist, you said to me that the best thing
• 1:06:41
  Speaker 2: is when a client comes in and has done some
• 1:06:42
  Speaker 2: research on the drugs and the different procedures that I
• 1:06:45
  Speaker 2: want to talk to them about, you know, as long
• 1:06:47
  Speaker 2: as they're not trying to play doctor and tell me
• 1:06:49
  Speaker 2: they don't like this because I like it better. The
• 1:06:51
  Speaker 2: fact is they have a better relationship, a better patient relationship.
• 1:06:55
  Speaker 2: We have it, by the way, with our clients.
• 1:06:57
  Speaker 1: When you're on a you don't mind when a client
• 1:06:59
  Speaker 1: comes in and says, hey, you know, I was talking
• 1:07:02
  Speaker 1: with my son's advisor and he says this, this and this.
• 1:07:06
  Speaker 2: You know, for years and we were early to this game, right,
• 1:07:10
  Speaker 2: is the idea that an index fund, as opposed to
• 1:07:12
  Speaker 2: an actively managed portfolio is a better, better approach to take.
• 1:07:16
  Speaker 2: And you know, before chat GBT or any of that,
• 1:07:19
  Speaker 2: people were reading that Jason's Wyatt and Wall Street journals.
• 1:07:22
  Speaker 2: An old friend of mine wrote a lot of those
• 1:07:24
  Speaker 2: columns about that type of thing, and it was a
• 1:07:27
  Speaker 2: better discussion because the client was informed. Now, had you
• 1:07:30
  Speaker 2: had clients that were just stuck on a certain area
• 1:07:33
  Speaker 2: and you couldn't change their mind, but I'd rather have
• 1:07:35
  Speaker 2: that than someone that wasn't knowledgeable at all.
• 1:07:38
  Speaker 1: I'm gonna get you out of here on this when
• 1:07:40
  Speaker 1: it comes to what you do for a living, not
• 1:07:42
  Speaker 1: your own personal concerns or politics, but what you do
• 1:07:46
  Speaker 1: for a living. What's one question you want every presidential
• 1:07:50
  Speaker 1: candidate to answer to it so that you understand whether
• 1:07:53
  Speaker 1: they understand our economy and markets.
• 1:07:57
  Speaker 2: I think it's been very obvious over the last couple
• 1:07:59
  Speaker 2: of months, and it continues to be Is the Federal
• 1:08:01
  Speaker 2: Reserve an independent organization? I think we're the envy of
• 1:08:05
  Speaker 2: the markets around the world for two reasons. Our rule
• 1:08:08
  Speaker 2: of law on the independence of our FED. That's why
• 1:08:11
  Speaker 2: the dollar has been so strong. That's why it's the
• 1:08:13
  Speaker 2: world safe haven, the currency of choice. I think that's
• 1:08:16
  Speaker 2: an area that I think is as important as anything,
• 1:08:19
  Speaker 2: and we're seeing it play out in real time.
• 1:08:21
  Speaker 1: Well, you know, that might be one of the few
• 1:08:24
  Speaker 1: issues that becomes a regularly asked question of these candidates.
• 1:08:28
  Speaker 1: Do you believe in you know that the FED should
• 1:08:29
  Speaker 1: be independent?
• 1:08:31
  Speaker 2: And then the problem, of course is when they're asked
• 1:08:32
  Speaker 2: those questions, they say one thing and do something else. Right,
• 1:08:35
  Speaker 2: So you know that that's an issue. But yeah, no,
• 1:08:38
  Speaker 2: I agree with you. I think I think it's important.
• 1:08:42
  Speaker 2: I would also if I went into the political side
• 1:08:44
  Speaker 2: a little bit. I worry about the Supreme Court, but
• 1:08:47
  Speaker 2: I really think that FED independence is a big issue.
• 1:08:49
  Speaker 1: You know.
• 1:08:50
  Speaker 2: The bond market is something that I watch even more
• 1:08:52
  Speaker 2: closely in the stock market. I'll leave you with a
• 1:08:55
  Speaker 2: James Carvill quote which I always love. You probably heard it.
• 1:08:58
  Speaker 2: He said once. If I believe in reincarnation, I don't
• 1:09:01
  Speaker 2: want to come back as president or the Pope or
• 1:09:03
  Speaker 2: even a four hundred baseball hitter. I'd rather come back
• 1:09:05
  Speaker 2: as The bond market scare the hell out of everybody,
• 1:09:07
  Speaker 2: and I think if you're in the financial business, you
• 1:09:10
  Speaker 2: understand what that means. The bond market is the liquidity
• 1:09:13
  Speaker 2: for all businesses, both in the United States and abroad.
• 1:09:16
  Speaker 2: And when the bond market starts to seize up, that's problems,
• 1:09:20
  Speaker 2: and that will happen if there's issues with the Federal Reserve.
• 1:09:23
  Speaker 2: So I'm keeping my fingers crossed that that isn't a
• 1:09:26
  Speaker 2: rubicount we need to cross.
• 1:09:27
  Speaker 1: Well, Paul, that's a great conversation. Appreciate the time, the wisdom,
• 1:09:32
  Speaker 1: the you know, it's good to get to know you.
• 1:09:33
  Speaker 2: I'll forget the chance to do this again. So I'm
• 1:09:36
  Speaker 2: this has been a pleasure