Latest / Bloomberg Intelligence / What's Next In The Apple, Epic Saga?

Transcript

What's Next In The Apple, Epic Saga? · Bloomberg Intelligence

0:00
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
0:04
Speaker 1: my co host Matt Miller. Every business day we bring
0:06
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
0:11
Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
0:15
Speaker 1: called Apple Podcasts or wherever you listen to podcasts and
0:18
Speaker 1: at Bloomberg dot com slash podcast. Now, let's talk to
0:22
Speaker 1: the founder of Mountain. This is a company that builds
0:26
Speaker 1: advertising software for brands to drive UM conversations, conversions, revenue,
0:32
Speaker 1: site visits, all you can imagine. Really, it's basically a
0:37
Speaker 1: digital advertising tool and it's so important. Um the uh,
0:43
Speaker 1: the Apple ecosystem to this world. Mark Douglas is the
0:46
Speaker 1: CEO and founder of Mountain. He joins us now to
0:48
Speaker 1: talk about what's happened just now at the app Store
0:50
Speaker 1: and Epic in this court ruling. Um, Mark, give us
0:54
Speaker 1: your take first off on um on how important the
0:57
Speaker 1: app store is the Apple App Store for you know,
1:01
Speaker 1: the entire business. Yeah, so the the obviously, the iPhone
1:07
Speaker 1: is arguably one the most important devices ever created. And
1:11
Speaker 1: the way you get software on there is the App
1:13
Speaker 1: Store and Apple. People forget the first iPhone you could
1:17
Speaker 1: only use software from Apple. So when Apple opened that
1:21
Speaker 1: up and allowed people anyone to create software for the iPhone,
1:25
Speaker 1: they created this app store, and they started to c
1:28
Speaker 1: two developers for any revenue that's created on it. And
1:32
Speaker 1: so this ruling starts to essentially possibly shape loose that
1:38
Speaker 1: which I think arguably is really excessive. So Mark, I
1:43
Speaker 1: guess app Apple's contention has been that, yes, it's is
1:48
Speaker 1: by some measures excessive, you know from the app developers perspective,
1:53
Speaker 1: But boy, you get access to Apple's two billion device users.
1:58
Speaker 1: That's huge in tern is a value to uh these
2:01
Speaker 1: app developers. Now, Yeah, but the Apple also has a Mac,
2:05
Speaker 1: and I get access to all Mac users for free.
2:09
Speaker 1: So the and all and the software is often very similar,
2:14
Speaker 1: and you know the means of distribution there's the Internet.
2:18
Speaker 1: So I think that the ruling here. I think also
2:20
Speaker 1: one thing to keep in mind on this ruling, there
2:22
Speaker 1: were ten planes against Apple. Apple one nine of the
2:26
Speaker 1: ten planes, and and it it lost one of the planes,
2:30
Speaker 1: which I think has people, um, you know, kind of
2:33
Speaker 1: very excited about the possibility that the app store fees
2:37
Speaker 1: are going to go away. But um, I think people
2:41
Speaker 1: are just excited because Apple loss that the This is
2:44
Speaker 1: not a complete loss for Apple, and it's not a
2:47
Speaker 1: complete win for developers, but it starts to make a
2:50
Speaker 1: dent in in what I think is, clearly my opinion,
2:54
Speaker 1: is a monopoly. But the judge did not rule a monopoly.
2:57
Speaker 1: They just ruled that was unfair competition, and developers can
3:01
Speaker 1: now make changes that potentially eating that, you know, retain
3:05
Speaker 1: some of that. If I'm a user, I want the
3:08
Speaker 1: money for the app to go to the person that
3:10
Speaker 1: created I run, not to Apple that you know, that's
3:13
Speaker 1: my personal perspective. Let me make this personal for a second,
3:16
Speaker 1: because I always pull out of your bio mark that
3:18
Speaker 1: you grew up in the Bronx near Yankee Stadium, and
3:22
Speaker 1: you know, you're a normal person, and you went out
3:26
Speaker 1: west and started a bunch of um your own companies,
3:29
Speaker 1: and now have created this incredibly successful business and you're
3:34
Speaker 1: living the American dream. You fly to work in your
3:36
Speaker 1: own private plane every day. I don't know if you
3:39
Speaker 1: really do that, but you could if you wanted to,
3:40
Speaker 1: because you're a pilot. So isn't this um a story
3:45
Speaker 1: also uh from Apple's perspective of private property, of the
3:49
Speaker 1: American dream of you know, a company that builds something
3:52
Speaker 1: and gets to control how it's used. Right, Yeah, an
3:56
Speaker 1: Apple sells me and you know millions a hundreds of
4:00
Speaker 1: millions of other people are an incredible device and we
4:04
Speaker 1: gladly while gladly, but we pay over a thousand dollars
4:07
Speaker 1: devid device and then and then and and then they say, oh,
4:11
Speaker 1: and by the way, if you want to use anything
4:13
Speaker 1: on that advice were it takes of that also even
4:17
Speaker 1: though we didn't create what you're using. Yeah, but dude,
4:20
Speaker 1: for them that they made the device, they made the store.
4:22
Speaker 1: That's that's a good for good for Apple. Shouldn't they
4:25
Speaker 1: be able to do what they want with their own stuff?
4:28
Speaker 1: Well maybe, But that's also kind of a plastic example
4:32
Speaker 1: of a monopoly. And that was the argument that was
4:36
Speaker 1: made here, and the judge didn't go so far as
4:39
Speaker 1: to say it's a monopoly. Um And monopolies are generally
4:43
Speaker 1: anti competitive. It's not another competing app store, for example,
4:47
Speaker 1: with you know, a Apple devices, um and of accept
4:51
Speaker 1: the profit. And I think this ruling will potentially have
4:54
Speaker 1: some dent on Apple's profit if you're an investor. That's
4:57
Speaker 1: why it's one of the reasons that stock drops. But
5:00
Speaker 1: you know, the ruling is it should Apple take a
5:03
Speaker 1: cut of the whole equal system? And the ruling is
5:07
Speaker 1: is that potentially not? And um, but yeah, Apple's a
5:11
Speaker 1: great success story they've been. That's a lot. It's quite frankly,
5:15
Speaker 1: they make a lot without taking out the development well
5:17
Speaker 1: so as so is Mountain. We were talking, by the way,
5:20
Speaker 1: earlier about your acquisition of Ryan Reynolds. Ryan Reynolds Maximum Effort,
5:25
Speaker 1: such a cool agency, and um, we were each giving
5:30
Speaker 1: our favorite Ryan Reynolds movies. What's yours? Just out of curiosity, Mark,
5:33
Speaker 1: what's what's your favorite riots Ryan reylds production? Um, I'm terrible, nately,
5:40
Speaker 1: but that's Ryan asking question over dinner two months ago.
5:44
Speaker 1: And it was the vampire movie he was in. Oh
5:48
Speaker 1: my god, I'm blanking on a name. This is so embarrassing.
5:52
Speaker 1: But it's not. It's not. It's because I don't remember
5:54
Speaker 1: the Vampire movie either, And I feel like I've seen
5:56
Speaker 1: everything that he's been well states of movie he made,
6:01
Speaker 1: with the wedding movie he made, and that's what I'm
6:05
Speaker 1: talking about the proposal. I loved it too, also, it's amazing. Yeah,
6:09
Speaker 1: it was a great movie. I watched that a few
6:12
Speaker 1: months like two months ago, and I've seen a lot
6:14
Speaker 1: of Ryan movies. But I did a little refresh your
6:16
Speaker 1: course once I was put on the spot, and he
6:18
Speaker 1: didn't ask that question to him. He doesn't go around, Bud,
6:22
Speaker 1: what of my movies? Do you like? Someone else at
6:25
Speaker 1: the table at Okay, our producer Sarah Lives Lives. He
6:29
Speaker 1: told me that Blade Trinity is the vampire movie he's done.
6:33
Speaker 1: So um, that's correct. Owner Mark Douglas, founder of Mountain
6:41
Speaker 1: Just get over to David Kotalk right now, Chairman and
6:44
Speaker 1: chief investment officer at Cumberland Advisors. It's always great to
6:48
Speaker 1: get David's thoughts on the markets and the economy. David,
6:52
Speaker 1: what what do you make of this resurgence of the
6:56
Speaker 1: virus along with the incredible resistance of American people to vaccines,
7:03
Speaker 1: Not just Americans, but you know in the Western world
7:05
Speaker 1: there's such resistance to these vaccines. It looks like it's
7:10
Speaker 1: gonna the pandemic may last longer than we may have anticipated. Yeah,
7:14
Speaker 1: I fear it will. Um um. And of course there's
7:18
Speaker 1: mixed views of this vaccine hesitancy is something that we
7:23
Speaker 1: have seen in the past. We don't see a way
7:27
Speaker 1: to resolve it. I found a quote from Robert Kennedy
7:32
Speaker 1: in nineteen sixty four and he said, one of the
7:38
Speaker 1: persons are against everything all the time, and I guess
7:44
Speaker 1: that characterizes uh, this human condition. So we don't vaccinate,
7:50
Speaker 1: we get the results. I'm a little worried. Mike ostar
7:54
Speaker 1: home in his By the way, David, it's interesting because
7:57
Speaker 1: his son, Yeah, UM is one of the biggest anti
8:01
Speaker 1: vaxers who supports conspiracy theories about things like you know,
8:07
Speaker 1: Bill Gates working with UM the global elite, to inject
8:11
Speaker 1: us all with like five g nanobots. It's so true.
8:15
Speaker 1: What a quirk of fate. You know, Why can't somebody
8:18
Speaker 1: come up with something that says Ivermectin has a Chinese
8:22
Speaker 1: chip instead of Maderna. I mean, we have a crazy
8:27
Speaker 1: world and that's the nature of the human being. And unfortunately,
8:31
Speaker 1: what that does is extend the pandemic and it makes
8:34
Speaker 1: it works. It gives more time for more mutations, I
8:38
Speaker 1: was saying. Mike Osterholmen his podcast issued a warning because
8:43
Speaker 1: we're going to find out what happens when we open
8:45
Speaker 1: these large school systems, and of course we hope and
8:48
Speaker 1: pray that we don't have a lot of sick people,
8:51
Speaker 1: but we're doing it and that's the nature of the evolution.
8:55
Speaker 1: So I'm I don't think we're rather than Woods on
8:57
Speaker 1: delta virus our positions in their ports, oios in our
9:00
Speaker 1: management says, this is a pandemic and it's still underway
9:04
Speaker 1: worldwide and it's too soon to declare that it's over all. Right.
9:09
Speaker 1: So the pandemic is an issue for you, David, and
9:11
Speaker 1: for these markets. So is China. Um. You know, we've
9:14
Speaker 1: seen the crackdown that China has had on a number
9:18
Speaker 1: of its industries and the impact it's had on Western investors.
9:21
Speaker 1: How do you kind of contextualized that? Well, this is interesting.
9:27
Speaker 1: We published on this last weekend and on our morning
9:30
Speaker 1: call this morning, we had an extensive conversation uh Matt
9:34
Speaker 1: McLear and Bill Witheral and others on the call about
9:39
Speaker 1: the difference between the A shares and the eight shares
9:43
Speaker 1: and the old days the eight shares the A d
9:46
Speaker 1: R s the US capital market rules were accepted worldwide
9:53
Speaker 1: is the highest standard. And now it looks like this
9:56
Speaker 1: is a rotation or reversal, and we see the a
10:00
Speaker 1: Jing is going to open a Beijing stock exchange for
10:03
Speaker 1: small caps and new startup companies. So what does it
10:07
Speaker 1: mean if China says we don't need New York, we
10:11
Speaker 1: don't need the capital markets anymore. We're big enough, we're
10:14
Speaker 1: advanced enough. The rules have changed, the game has changed.
10:18
Speaker 1: That's a monumental shift between the two largest economies of
10:22
Speaker 1: the world. We're actually looking at the A shares and
10:27
Speaker 1: we haven't taken the position yet, but we're looking at
10:30
Speaker 1: the A share side and we're underweight China, and it's
10:35
Speaker 1: really in the eighth share side that we're underweight. So
10:40
Speaker 1: this will be fascinating to see how this turns out.
10:43
Speaker 1: It's huge, two largest economies in the world face off
10:47
Speaker 1: with each other. Yeah, and George Soros, I thought had
10:50
Speaker 1: an interesting opinion piece. I wonder what your take is.
10:55
Speaker 1: He was basically saying, Um, you know, put aside the
10:59
Speaker 1: profit to for a second, you can't be supporting this
11:02
Speaker 1: anti democratic regime from a moral standpoint. Well, that's that's
11:08
Speaker 1: a that's a debate. In fact, you know, there's there
11:11
Speaker 1: are e t s which are built on E s
11:15
Speaker 1: G standards and governance. They would say stay away from China.
11:20
Speaker 1: Um that there is a the behavior of large institution
11:25
Speaker 1: sorrows Cathy arc What do you do, do you go there,
11:27
Speaker 1: don't you go there? Where do you draw the line
11:32
Speaker 1: between the profit and the ethics or morals? And how
11:38
Speaker 1: do you do it? And are there ways to do
11:41
Speaker 1: it so they are aligned because and that's a difficult
11:47
Speaker 1: one for me personally, because I'm involved in policy organizations,
11:53
Speaker 1: and in the policy organization you want the best outcome
11:56
Speaker 1: from the world. And I'm a money manager. They have
12:00
Speaker 1: clients and they say, hey, your job is to make
12:02
Speaker 1: a profit for me, and so there's a tension between
12:06
Speaker 1: those things. A very profound question for the financial services industry. Hey, David,
12:12
Speaker 1: thank you so much for joining us. As always, we
12:14
Speaker 1: always appreciate your perspective. David Kotok, chairman and chief investment
12:18
Speaker 1: Officer of Cumbland Advisors, over about four billion dollars in
12:21
Speaker 1: assets under management, and he is located today out in Colorado.
12:25
Speaker 1: Good for him. All Right, We've got markets this year
12:30
Speaker 1: hitting nearly all time highs, nearly on a on a
12:33
Speaker 1: daily basis. Yet we have Wall Street strategies coming out
12:35
Speaker 1: with increasing caution. Let's get a view from the street.
12:39
Speaker 1: If you are Katarina Semeneti, Senior Vice president and Private
12:42
Speaker 1: wealth advisor for Morgan Stanley Private Wealth Management, joining us
12:45
Speaker 1: on the phone from the town of brotherly love. That
12:47
Speaker 1: would be Philadelphia, Katarina, thanks so much for joining us.
12:51
Speaker 1: What are you hearing from your clients as you talk
12:54
Speaker 1: to them over the last several weeks and months, Well,
12:58
Speaker 1: thank you for having me on the show. And you're right,
13:02
Speaker 1: it's um. You know, it's been crazy market and investors
13:06
Speaker 1: can't ignore the fact that S and T five hundred
13:09
Speaker 1: is up over twenty percent UM so far for the year.
13:13
Speaker 1: And as exciting as it might be, you know, seeing
13:15
Speaker 1: your portfolio go up this much, you know, it also
13:18
Speaker 1: raises concerns and investors are naturally worried about the economy
13:23
Speaker 1: staying power. Um. They're looking at the position of their
13:27
Speaker 1: portfolio and they're hearing about the negative impact on the
13:32
Speaker 1: future earnings of the companies based on everything they're seeing,
13:36
Speaker 1: including the labor shortages, strice pressures, supply chain interruptions. You know,
13:41
Speaker 1: it's something that we see every day. You know, there's
13:43
Speaker 1: a lot of talk about inflation, and it's one thing
13:46
Speaker 1: talking about it theoretically, and another thing is when the
13:50
Speaker 1: consumers and investors see the increased cost of goods and
13:53
Speaker 1: services the normal basket. You know, that is something that
13:57
Speaker 1: is their day to the experience, so naturally, you know,
14:01
Speaker 1: it's something that on our side, from the investment and
14:03
Speaker 1: vice perspective, we are advocating to risking portfolios. We're advocating
14:08
Speaker 1: taking profits reasonable profits within uh certain parts of the portfolio,
14:13
Speaker 1: specifically when it comes to the market indexes. But this
14:16
Speaker 1: would be a great time to take profit from S
14:19
Speaker 1: and D by hundred from Russell two thousand in reposition
14:22
Speaker 1: into individual equities and very carefully selected um specific sectors.
14:28
Speaker 1: Like so it's time to pick stocks. I mean, Lisa
14:30
Speaker 1: Shallott was on with US last week and she said
14:33
Speaker 1: ten to fifteen percent pullback isn't unlikely by the end
14:36
Speaker 1: of the year. I agree with her. You know, as
14:40
Speaker 1: a matter of fact, like everything that we're hearing from
14:43
Speaker 1: the US corporations is that all of the pressures that
14:46
Speaker 1: I already mentioned are going to be resulting in the
14:49
Speaker 1: earnings that are not going to be quite as exciting
14:52
Speaker 1: as what we have been seeing so far. There's a
14:54
Speaker 1: lot of negative pressures. Intend to fifteen percent correction in
14:58
Speaker 1: this space would be there, very much expected, but it
15:01
Speaker 1: also presents great buying opportunity for investors as long as
15:05
Speaker 1: they are strategically prepared for that. So if I want
15:08
Speaker 1: to de risk my portfolio, how do I do that?
15:12
Speaker 1: Though I just raise cash? Or how do I do that?
15:17
Speaker 1: I would take profits from the broad market sectors profits
15:20
Speaker 1: from S and P five hundered from Russell two thousand,
15:23
Speaker 1: and look specifically at sectors that are well positioned for
15:26
Speaker 1: this environment. Sectors like healthcare, sectors like financials, like consumer staples.
15:32
Speaker 1: Were less excited about consumer discretionary for example, because we
15:36
Speaker 1: feel like the buying power of consumer went down. Stimulus
15:40
Speaker 1: check already went out. You know that they are not
15:43
Speaker 1: not that many of them are expected to go forward,
15:46
Speaker 1: and all of these discretionary purchases that we so initially
15:49
Speaker 1: happening are really subsiding right now. We see a lot
15:52
Speaker 1: of appetite for services still. But coming back to the
15:55
Speaker 1: sectors that I've mentioned, health care, for example, is a
15:58
Speaker 1: perfect sector to be There's a lot of pent up
16:00
Speaker 1: demand in that state. Both pharmaceutical companies and healthcare in general.
16:05
Speaker 1: Financials are historically positively correlated for writing interest rate environment,
16:11
Speaker 1: so banks, um steam and facilitators are very well positioned.
16:15
Speaker 1: So again We'll have to look at valuations, we have
16:18
Speaker 1: to look at future earnings, we have to look at
16:21
Speaker 1: the overall positioning or these individual equities within their sectors.
16:25
Speaker 1: But this is a great time to pick up some
16:28
Speaker 1: high quality positions and be ready for a market callback
16:32
Speaker 1: and be ready to you know, have some cash on
16:34
Speaker 1: the sidelines in order to be making the strategic purchases.
16:39
Speaker 1: What when you look at individual stocks, what are you
16:42
Speaker 1: looking at? What do you like here? Or how do
16:45
Speaker 1: you go ahead and screen for those We we look
16:48
Speaker 1: at quality, you know, we look at the valuation, the
16:53
Speaker 1: earning positioning. In other words, you know, when we are
16:56
Speaker 1: discussing all the cost pressures, there are certain sect ares
17:00
Speaker 1: and certain stocks that are someone just just sensitized to
17:04
Speaker 1: this risk. So that's where security selection comes into play.
17:07
Speaker 1: You know, this is not you know, there are going
17:10
Speaker 1: to be times again when we look at broad market
17:12
Speaker 1: index ism they will make a lot of sense. But
17:15
Speaker 1: right now, you know, looking at quality, looking at dividend fields,
17:19
Speaker 1: looking at just overall, how is this certain positions a
17:23
Speaker 1: certain certain company positions within their overall sector, what is
17:27
Speaker 1: their competitive advantage? This is the time to to make
17:31
Speaker 1: this deep dive analysis. You know, and know what you
17:34
Speaker 1: own going into this market, this mid cycle transition, as
17:37
Speaker 1: we see, there's going to be a lot of volatility,
17:40
Speaker 1: there's going to be a lot of noise, and knowing
17:43
Speaker 1: what we own, having higher quality portfolios, um having this
17:48
Speaker 1: this very thoughtful type of accidilication. This is the time
17:52
Speaker 1: for that. Karina, just thirty seconds, do you recommend any
17:55
Speaker 1: bonds in your portfolio? We got the tenure at one
17:58
Speaker 1: point three. Absolutely, there's always time for the bonds in
18:02
Speaker 1: the portfolio. This is like when you're building a house.
18:05
Speaker 1: You absolutely need that foundation. You know, this is our
18:09
Speaker 1: risk management. But with bonds, just like with stocks, this
18:13
Speaker 1: is the time to look at quality and this is
18:15
Speaker 1: the time to make sure that the bonds positioning the
18:17
Speaker 1: portfolio makes a lot of sense. You know, get away
18:20
Speaker 1: from high yield, get away from those higher risk exposures
18:24
Speaker 1: and bonds, you know, and look at the very very
18:26
Speaker 1: high quality of strategic positioning in that sector. But they
18:29
Speaker 1: always make sense in the portfolio. Katerina, thanks so much
18:32
Speaker 1: for joining us, Katerina Seminetti. They're a private wealth advisor,
18:36
Speaker 1: Senior VP at Morgan Stanley Private Wealth Management. Great to
18:41
Speaker 1: get your outlook on the market. Especially as UM we
18:45
Speaker 1: bounce along the top here, it's time maybe to take
18:49
Speaker 1: some profits. Katerina tells us this is Bloomberg. Just get
18:56
Speaker 1: over at Matt Maldy now managing director and chief market
18:59
Speaker 1: strategy did Miller tay back And there's a number of
19:03
Speaker 1: things that I want to get to with you, Matt,
19:06
Speaker 1: but I'm gonna start off with UM rates. We're looking
19:09
Speaker 1: at a tenure that's now coming back down to one
19:12
Speaker 1: thirty two, and it has looked like since Jackson Hole
19:16
Speaker 1: it was rising from one UM and headed for one forty.
19:22
Speaker 1: Where do you see rates and y well, I mean, yeah,
19:26
Speaker 1: they have been climbing here. It's it's very interesting because
19:28
Speaker 1: we had that you know, that period from last August
19:30
Speaker 1: August for two thousand twenties through March where obviously they
19:34
Speaker 1: were training higher from his you know, crazy historic low level,
19:37
Speaker 1: and then of course we went for four or five
19:39
Speaker 1: months there from March to early August where it was
19:43
Speaker 1: going down. Now they're keeping back up. I think they're
19:45
Speaker 1: poised to go higher. I mean, this whole issue with inflation,
19:48
Speaker 1: I think is is a big concern. And I'm looking
19:51
Speaker 1: at the one point three seven level that was the
19:53
Speaker 1: high we saw a couple of times in August and
19:55
Speaker 1: the once just a little over a week ago. But
19:58
Speaker 1: the real number gonna be one. It for because you
20:00
Speaker 1: always need to see more of it, more than just
20:02
Speaker 1: a slight move above any key resistance level. At one
20:06
Speaker 1: point four, that's gonna be a problem. I'll pose a
20:08
Speaker 1: John Farrell question for you, do we get to two
20:10
Speaker 1: percent or one percent? For well, I mean, the thing
20:15
Speaker 1: is I I definitely think we get to two percent. First.
20:18
Speaker 1: The one thing, of course, that we're in the seasonally
20:21
Speaker 1: a tough time for the stock market. People get worried
20:24
Speaker 1: if there's a severe correction rather than just a mild one. Uh,
20:28
Speaker 1: you'd have flight to safety that may take us down
20:29
Speaker 1: to one percent. But I just don't see that from happening.
20:32
Speaker 1: I think we could very well see a correction, but
20:34
Speaker 1: not want to send it that low and then uh
20:36
Speaker 1: uh And I do think that right. I think the
20:38
Speaker 1: changing we get above one point four uh in the tenure,
20:41
Speaker 1: that's gonna signal important change in the near term trend
20:44
Speaker 1: FORER for interest rate, So that's going to be important.
20:46
Speaker 1: Him at um you know markets, equity markets hitting a
20:51
Speaker 1: new high seemingly on a daily basis. Yet we've seen
20:54
Speaker 1: Tom Keene this morning was just pointing out in his
20:58
Speaker 1: email inbox over the weekend a lot Wall Street strategist
21:01
Speaker 1: getting more and more cautious. Here, how do you think
21:03
Speaker 1: about these equity markets? Again, this wall of worry, everybody's
21:08
Speaker 1: been climbing it. But are we getting a little yes, exactly,
21:13
Speaker 1: And yeah, It's it's funny because as more people get
21:15
Speaker 1: more concerned, you tend to see that there's say, there's
21:18
Speaker 1: too many bears around, and then that should actually be
21:20
Speaker 1: a you know, a contrary contrary and indicator and and
21:24
Speaker 1: be bullish for the market. But I do understand why
21:26
Speaker 1: people are coming more more concerned. I mean, I'm just
21:28
Speaker 1: thinking and I'm in that boat. I mean, look just
21:31
Speaker 1: what we saw again today with the market opened very strongly. Uh,
21:35
Speaker 1: and now it's sold off. It's it's it's not down,
21:37
Speaker 1: it's down unchanged. All the NASDAC is down. But that's
21:40
Speaker 1: a definite And we've seen that for a couple of
21:42
Speaker 1: days in the last week. You know, we really saw
21:44
Speaker 1: it almost every day last week. We're seeing it again today.
21:46
Speaker 1: And we used to see just the opposite where the
21:48
Speaker 1: market opened down and then rallied then to the end
21:50
Speaker 1: of the day. And so this kind of change in
21:52
Speaker 1: trend is has got some people worried and and rightfully
21:55
Speaker 1: so I just think that with the concerns over inflation
21:57
Speaker 1: and maybe even stagflation, uh, those aren't good from markets.
22:01
Speaker 1: And you know, correcsitions are normal and healthy and there's
22:04
Speaker 1: nothing to worry about. But uh, do people do do
22:07
Speaker 1: need to be careful about them? But do we expect
22:09
Speaker 1: do you expect the correction? So many people have come out,
22:11
Speaker 1: from Deutsche Bank to Morgan Stanley to Goldman Sachs saying
22:15
Speaker 1: it's time and um, you know, maybe ten to fifteen percent. Yeah,
22:20
Speaker 1: I don't want to sound too alarming, but the one
22:22
Speaker 1: problem we get, we get is if we get to
22:24
Speaker 1: tender tender fifteen percent. Uh you're well, if you get
22:27
Speaker 1: to ten to twelve percent, I think you get the
22:29
Speaker 1: fifteen and I do think there's a good chance of that.
22:32
Speaker 1: And the reason why I say, why why would get there,
22:34
Speaker 1: why would accelerate, is because of this massive levels of
22:38
Speaker 1: leverage in the system. You know, this whole thing with
22:40
Speaker 1: margin dead. Margin dead isn't a problem when it's going up,
22:43
Speaker 1: it's when it rolls over. Well, sure enough, in July
22:45
Speaker 1: started to roll out a little bit. If it's starts
22:47
Speaker 1: if the markets down, people don't get margin calls until
22:50
Speaker 1: the market has gone down a certain amount. So the
22:52
Speaker 1: market goes down ten percent, it's almost certainly going to
22:54
Speaker 1: kick in some margin calls and therefore be a little
22:56
Speaker 1: bit more severe. Uh so it could be as much
22:59
Speaker 1: as fifteen to That may sound like a lot of alarming,
23:02
Speaker 1: but I think if people raise just a little bit
23:04
Speaker 1: of cash right now, then you're gonna be one here,
23:06
Speaker 1: will be gonna be the one who keeps your head.
23:07
Speaker 1: What of those around them are losing theirs or being
23:10
Speaker 1: forced to sell, and you're gonna be able to pick
23:12
Speaker 1: up some unbelievably great bargains. Yeah, that's kind of where
23:14
Speaker 1: I wanted to go, Matt, if I wanted to get
23:15
Speaker 1: a little bit more. If I if I'm thinking about
23:18
Speaker 1: the next movements, market could be a ten percent or
23:20
Speaker 1: so moved to the downside. Do I raise cash? Do
23:24
Speaker 1: I just rotate into some safer names? How do I
23:27
Speaker 1: prepare for that? Well? I think again, I do think
23:30
Speaker 1: raising cash is a good idea. And again it's not saying,
23:33
Speaker 1: oh my gosh, you're gonna miss this move It's like
23:35
Speaker 1: we're not saying going to or fift percent cash, just
23:38
Speaker 1: maybe five or ten percent cash. And it's not just
23:40
Speaker 1: because you can take advantage of it, but psychologically, especially
23:44
Speaker 1: for individual traders, it's really really helpful because you're sitting
23:47
Speaker 1: there going, oh my gosh, uh, I don't have any
23:50
Speaker 1: I don't have any cash. On the market's going down,
23:52
Speaker 1: it may go down more. I've got to sell and
23:54
Speaker 1: the end up selling at the exact wrong time. If
23:56
Speaker 1: you have a little bit of cash, even if it's
23:57
Speaker 1: only five or ten percent, you're gonna be much more
24:00
Speaker 1: Even if you don't get the exact bottom, uh what's
24:02
Speaker 1: the bottom is in, you're gonna be willing to buy
24:04
Speaker 1: rather than selling it. You know, similars, You're gonna be
24:06
Speaker 1: a buyer rather than the seller at the at the
24:08
Speaker 1: right time. And most of the people are gonna be
24:10
Speaker 1: selling at the exact wrong time. And so I think
24:13
Speaker 1: raising a bit of cashier is a good idea. Matt
24:15
Speaker 1: is crypto currency here this day. I mean, does it
24:18
Speaker 1: make sense for an investor um to allocate one percent
24:25
Speaker 1: of his or her portfolio to bitcoin A theory um, etcetera. Well,
24:31
Speaker 1: you know, it's it's it certainly seems to be here
24:33
Speaker 1: here to stay. Um, you know, very bullish on it
24:35
Speaker 1: on a longer term basis. I mean, it's gonna run
24:37
Speaker 1: into regulatory issues and it's going to remain incredibly volatile. Uh.
24:41
Speaker 1: So that's why I think these are things that you buy, uh,
24:44
Speaker 1: you know, spread out any kind of purchases, Like you said,
24:47
Speaker 1: you don't want to be loading up with you of
24:50
Speaker 1: your portfolio there but adding it over time. Uh And uh,
24:54
Speaker 1: I guess you know, I kind of look at we
24:56
Speaker 1: look at all of them a theoryum, probably more closer
24:58
Speaker 1: than others. But let's look at that theory two thousand
25:00
Speaker 1: dollar level on bitcoin that has been unbelievably key support
25:04
Speaker 1: this year, and if it breaks below that level at
25:07
Speaker 1: any time, uh, you might want to take some chips
25:09
Speaker 1: off the table and look for for a lower basis
25:12
Speaker 1: away from that exactly. So that's but we got you know,
25:16
Speaker 1: we rallied back. This rally above forty has been very
25:20
Speaker 1: important because it's been it was stuck in a sideways range.
25:23
Speaker 1: It broke out of that range, it got overbought. It's
25:26
Speaker 1: settling back in, but it's nice and stable. I think
25:29
Speaker 1: the thing is the upside is still pretty good here. Uh,
25:32
Speaker 1: and uh, I think over a long term basis again,
25:35
Speaker 1: ease into it. Uh, you don't. You don't have to
25:37
Speaker 1: be you know, money a little money in every month
25:39
Speaker 1: and and like you said, keep that to you know,
25:41
Speaker 1: three to five percent of your portfolio. All right, Matt,
25:44
Speaker 1: thank you so much for joining us. We always appreciate
25:46
Speaker 1: getting your thoughts and perspective. Matt Maley, Managing director in
25:49
Speaker 1: chief market strategist at Miller tay Back, also the founder
25:52
Speaker 1: of The Maine Report, joining us on the phone from Newton,
25:55
Speaker 1: Mass Patriots lost, I believe in the first week, so
25:58
Speaker 1: can't be too happy up there. But Matt, we've kind
26:01
Speaker 1: of got a market here. That's you know, We've got
26:02
Speaker 1: the down SMP higher, Uh, the Nastack pulling back, but
26:06
Speaker 1: still pretty steady. She goes, This is Bloomberg. Thanks for
26:10
Speaker 1: listening to the Bloomberg Markets podcast. You can subscribe and
26:14
Speaker 1: listen to interviews with Apple Podcasts or whatever podcast platform
26:18
Speaker 1: you prefer. I'm Matt Miller. I'm on Twitter at Matt
26:21
Speaker 1: Miller three. Pet On Ball Sweeney I'm on Twitter at
26:25
Speaker 1: pt Sweeney Before the podcast. You can always catch us
26:28
Speaker 1: worldwide at Bloomberg Radio,