Latest / Best of Business / Sam Dickie: Fisher Funds expert on the future of Trump's tariffs - and what it could mean for the economy

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Sam Dickie: Fisher Funds expert on the future of Trump's tariffs - and what it could mean for the economy · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks'd be follow
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  Speaker 1: Heller Dooper see Alan.
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  Speaker 2: Sam Dicky from Fisher Funds is with us O.
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  Speaker 3: Sam, good evening here righting now.
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  Speaker 2: Oh thank you so much. Geez, I've come back straight
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  Speaker 2: into the old trade war and what's going on with
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  Speaker 2: the tariff headlines? How long is this going to go
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  Speaker 2: on for?
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  Speaker 1: Do you think?
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  Speaker 3: Well? There are sort of really three types of beer markets.
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  Speaker 4: And remember a beer market is one where the market
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  Speaker 4: falls by twenty percent or more.
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  Speaker 3: And we were their last Tuesday. So three types.
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  Speaker 4: An event driven beer market, a cyclical beer market, and
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  Speaker 4: a structural beer market. So structural is where there are
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  Speaker 4: structural imbalances or financial bubbles like the nineteen thirties Great Depression.
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  Speaker 4: Cyclical beer market is a function of the economic cycle
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  Speaker 4: turning down like the nineteen ninety recession. And an event
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  Speaker 4: driven beer market it's the most benign of all. The
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  Speaker 4: market falls because of a specific event like COVID. And
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  Speaker 4: to be clear, this current situation is event driven, which
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  Speaker 4: is the most benign, and the event was the Liberation
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  Speaker 4: Day tariffs. Now that's not to say that everything that
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  Speaker 4: comes out of Trump's mouth is a virus like COVID.
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  Speaker 4: But Goldman Sacks did an exercise looking back almost two
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  Speaker 4: hundred years, and event driven beer markets last only six
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  Speaker 4: to eight months.
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  Speaker 2: Is there a possibility that an event driven beer market
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  Speaker 2: becomes a structural beer market.
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  Speaker 4: Well, there's a possibility it can become a cyclical beer market.
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  Speaker 3: So you think about, you know, if you're sitting in.
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  Speaker 4: A boardroom in Hanoi or Mumbai, or Manchester or Milwaukee,
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  Speaker 4: and you've been asked to sign off on a billion
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  Speaker 4: dollar CAPEX project, for example, you'd probably sit on your hands, right,
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  Speaker 4: And if consumers in business sit on their hands for
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  Speaker 4: too long, we slip into recession, and the beer market
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  Speaker 4: could last for longer. And a cyclical beer market can last,
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  Speaker 4: you know, obviously longer than six to eight months.
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  Speaker 2: Yeah, and then obviously the worst case scenario is it
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  Speaker 2: then becomes a structural one. And there's but the best
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  Speaker 2: case scenario. What you're telling us is that we're talking
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  Speaker 2: about a matter of months here.
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  Speaker 3: Yeah, that's right.
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  Speaker 2: Okay, are there any parallels in history here?
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  Speaker 3: Yeah?
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  Speaker 4: I think COVID is a reasonable parallel for event driven
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  Speaker 4: beer market.
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  Speaker 3: Yeah, I mean, those are other parallels. I mean, looking
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  Speaker 3: back two hundred years.
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  Speaker 4: There's been many event driven beer markets and the average
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  Speaker 4: time these last is six to eight months. The average
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  Speaker 4: time a cyclical beer market lasts about twenty seven months.
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  Speaker 4: So that's sort of gold sex looking back over two
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  Speaker 4: hundred odd years.
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  Speaker 2: So what are you looking for to kind of tell you,
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  Speaker 2: to inform you as to where we're going with this
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  Speaker 2: and whether it's improving or getting worse.
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  Speaker 4: I'd love to say we're able to ignore the haphazard
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  Speaker 4: headline bombs coming out of the US, but really looking
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  Speaker 4: for any signs of walking back some of the tariff
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  Speaker 4: and posts on China. Any signs at the ninety day
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  Speaker 4: pause on the rest of the world will result in
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  Speaker 4: a permanent pause, but more so any sign that there
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  Speaker 4: is movement towards his endgame.
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  Speaker 3: Of on shurreing US manufacturing.
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  Speaker 4: So you probably saw in video in the press yesterday
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  Speaker 4: talking up spending half a trillion dollars over the next
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  Speaker 4: four years to manufacture AI chips in the US, but Apple, Honda, Hyundai,
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  Speaker 4: Volkswagen all making noises about wrapping up US manufacturing and
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  Speaker 4: then just the US dollar itself. Think of that as
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  Speaker 4: a popularity barometer for Trump, and the US is an
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  Speaker 4: investment destination.
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  Speaker 2: Do you when you see these I mean a lot
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  Speaker 2: of us are looking at some of the stuff that
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  Speaker 2: he's backtracking on and he's sort of flip flopping, and
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  Speaker 2: we're seeing it as signs that he's coming under pressure
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  Speaker 2: and blinking and we're taking that as positive signs. Are you.
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  Speaker 3: Yeah? I think that's reasonable.
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  Speaker 4: We did discover as his pain threshold last Wednesday, and
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  Speaker 4: the market always talks about finding the pain point tour,
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  Speaker 4: looking for the where's the insurance policy at? And originally
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  Speaker 4: the most benign view was you won't want to see
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  Speaker 4: the equity market falling because that's a you know, it's
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  Speaker 4: a popularity barometer.
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  Speaker 3: But he was clearly prepared to let the equity market.
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  Speaker 4: But when thirty year bond yields spiked higher as foreign
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  Speaker 4: investors put a high risk premium on US government debt,
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  Speaker 4: and remember ninety percent of mortgages in the US has
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  Speaker 4: set off those rates, and then credit spreads spiked higher.
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  Speaker 4: So credit spreads you slap on top of government bonds
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  Speaker 4: to lend to you know, individuals or governments, a sorry,
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  Speaker 4: individuals or businesses. That was his pain point, So equity
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  Speaker 4: market weakness hurts Wall Street.
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  Speaker 3: That would rise and borrowing costs hurts everyone.
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  Speaker 2: Right, Sam, what's your advice to investors.
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  Speaker 4: Well, I can't give advice, but that the marketer is
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  Speaker 4: watching those three assets, the US dollar, the third year bond,
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  Speaker 4: and US credit spreads. They're all at slightly uncomfortable levels
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  Speaker 4: but holding there for now. But more broadly, we've got
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  Speaker 4: to remember at times like this, says equity investors, you
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  Speaker 4: learn to stomach the sort of volatility every few years.
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  Speaker 4: So two thousand and one, two and eight, twenty eleven,
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  Speaker 4: twenty eighteen, twenty twenty, twenty twenty two, and now twenty
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  Speaker 4: twenty five we saw these types of volatility as to
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  Speaker 4: be expected to.
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  Speaker 3: Situation is fluid, but at the very least hither.
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  Speaker 4: I think it's a good chance to speak to your
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  Speaker 4: financial advisor and check and make sure you're in the
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  Speaker 4: right strategy for your risk tolerance.
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  Speaker 1: Yeah, very goodvice.
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  Speaker 2: Hey, thank you very much, Sam, appreciated. Happy Easter to
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  Speaker 2: you that. Sam de Keia Fisher funds
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