1 00:00:04,719 --> 00:00:07,040 This is Market Pulse by Faster Ford from 2 00:00:07,040 --> 00:00:08,500 Northern Trust Asset Servicing. 3 00:00:08,844 --> 00:00:10,285 My name is Mark Mallett. I'm the chief 4 00:00:10,285 --> 00:00:11,984 strategy officer for Northern Trust, 5 00:00:12,445 --> 00:00:14,945 and I'm joined today by Gary Pollan, 6 00:00:15,910 --> 00:00:18,390 who and I'll take a moment, because Gary 7 00:00:18,390 --> 00:00:18,869 is really, 8 00:00:19,589 --> 00:00:21,510 you know, thinks his title is very important, 9 00:00:21,910 --> 00:00:24,550 head of International Enterprise Client Solutions at Northern 10 00:00:24,550 --> 00:00:24,885 Trust. 11 00:00:25,524 --> 00:00:27,125 There's a lot in that, Gary. So I'm 12 00:00:27,125 --> 00:00:29,445 very interested to hear, you know, what you 13 00:00:29,445 --> 00:00:31,204 know, where you're spending your time. So today, 14 00:00:31,204 --> 00:00:33,670 we're going to be talking about some investment 15 00:00:33,670 --> 00:00:36,149 themes that Gary has been focused on. You 16 00:00:36,149 --> 00:00:37,450 know, it's great to have you back. 17 00:00:37,829 --> 00:00:39,590 Always exciting to have you on on the 18 00:00:39,590 --> 00:00:40,090 podcast, 19 00:00:41,075 --> 00:00:43,395 and really looking forward to today's conversation. It's 20 00:00:43,395 --> 00:00:44,994 great to be here. You know, what I 21 00:00:44,994 --> 00:00:46,354 thought we'd start off with, 22 00:00:46,835 --> 00:00:48,310 was just hearing, like, what's top of mind? 23 00:00:48,310 --> 00:00:49,509 You know, you've been writing about a lot 24 00:00:49,509 --> 00:00:50,950 of different things over the last few months 25 00:00:50,950 --> 00:00:53,509 since the you've last been on, the podcast. 26 00:00:53,509 --> 00:00:55,750 You know, anything in particular in the market, 27 00:00:55,750 --> 00:00:57,715 you know, that that's, that's top of mind? 28 00:00:58,594 --> 00:01:01,335 So what what what's top of mind is, 29 00:01:02,435 --> 00:01:04,355 isn't the market so much as is more 30 00:01:04,355 --> 00:01:05,094 the Olympics. 31 00:01:06,129 --> 00:01:08,129 In France, there's a French philosopher, a guy 32 00:01:08,129 --> 00:01:09,729 called Albert Camus, who said, 33 00:01:10,609 --> 00:01:12,390 the best way to understand the world, 34 00:01:13,090 --> 00:01:15,329 is to sometimes turn away from it. So 35 00:01:15,329 --> 00:01:17,935 I've turned away from markets, and I've focused 36 00:01:17,935 --> 00:01:20,655 heavily on the Olympics of late, which I'm 37 00:01:20,655 --> 00:01:22,194 just enthralled by. 38 00:01:23,295 --> 00:01:25,760 I'm now madly in love with Celine Dion. 39 00:01:25,819 --> 00:01:27,200 She is, just 40 00:01:27,980 --> 00:01:29,760 somehow recaptured my, 41 00:01:30,140 --> 00:01:31,520 my my my attention, 42 00:01:31,885 --> 00:01:33,905 which, I thought what she did was incredible. 43 00:01:34,605 --> 00:01:36,305 And also there's a couple of other, 44 00:01:36,844 --> 00:01:38,944 characters that really stand out, 45 00:01:39,325 --> 00:01:42,060 one of which was an Australian hockey player 46 00:01:42,439 --> 00:01:44,519 who broke his finger 2 weeks before getting 47 00:01:44,519 --> 00:01:46,140 on the plane to go to the Olympics 48 00:01:46,359 --> 00:01:47,879 to be told by a surgeon that if 49 00:01:47,879 --> 00:01:49,775 he operates, which he should, he won't be 50 00:01:49,775 --> 00:01:50,895 able to play. So you know what he 51 00:01:50,895 --> 00:01:53,775 did? Chopped his finger off. Now that's commitment. 52 00:01:53,775 --> 00:01:55,295 I'm sure you'd you'd shown that sort of 53 00:01:55,295 --> 00:01:57,295 commitment to Northern Trust. This is, this is 54 00:01:57,295 --> 00:01:59,390 field hockey. This is field hockey. That is, 55 00:01:59,390 --> 00:02:01,270 you know, tough times don't last but tough 56 00:02:01,270 --> 00:02:03,049 blokes do. That was very impressive. 57 00:02:03,909 --> 00:02:04,409 But 58 00:02:04,790 --> 00:02:06,630 back to markets, I mean I think sport 59 00:02:06,630 --> 00:02:07,484 always has 60 00:02:07,965 --> 00:02:10,465 some some relevance to markets and the Olympics 61 00:02:10,604 --> 00:02:11,104 notwithstanding. 62 00:02:11,884 --> 00:02:13,965 And I think what what the Olympics does 63 00:02:13,965 --> 00:02:15,965 always remind you of is, you know, the 64 00:02:15,965 --> 00:02:18,889 importance of shared experiences. It shows how, you 65 00:02:18,889 --> 00:02:20,909 know, it unites, it brings people together. 66 00:02:22,009 --> 00:02:24,169 It also reminds us that team spirit is 67 00:02:24,169 --> 00:02:25,689 found at the bottom of a plank glass, 68 00:02:25,689 --> 00:02:27,754 which was certainly where I found it last 69 00:02:27,754 --> 00:02:29,294 night, and it also, 70 00:02:29,995 --> 00:02:30,574 I think 71 00:02:30,875 --> 00:02:33,375 reminds you of the importance of of national 72 00:02:33,674 --> 00:02:34,174 identity. 73 00:02:34,860 --> 00:02:36,879 And this is the segue back to markets. 74 00:02:37,580 --> 00:02:40,000 I think this idea of, you know, national 75 00:02:40,299 --> 00:02:40,799 identity 76 00:02:41,099 --> 00:02:43,759 transcends not just sport, but also politics 77 00:02:44,485 --> 00:02:46,264 and potentially even asset allocations. 78 00:02:47,365 --> 00:02:49,044 And one of the things, you know, you 79 00:02:49,044 --> 00:02:50,724 you see, I mean, everyone over here, the 80 00:02:50,724 --> 00:02:52,105 big sport is the elections, 81 00:02:52,560 --> 00:02:54,159 and everyone's trying to predict who's going to 82 00:02:54,159 --> 00:02:54,819 win that. 83 00:02:55,680 --> 00:02:56,900 I'm trying to think 84 00:02:57,199 --> 00:02:59,199 what will endure beyond that. And so you 85 00:02:59,360 --> 00:03:01,519 thinking through the next year when we move 86 00:03:01,519 --> 00:03:02,019 from 87 00:03:02,574 --> 00:03:04,895 from campaigning to governing. And, you know, are 88 00:03:04,895 --> 00:03:05,555 there any 89 00:03:06,175 --> 00:03:08,814 characteristics today that will continue then? And I 90 00:03:08,814 --> 00:03:09,699 think one of the 91 00:03:10,259 --> 00:03:13,159 underlying themes is this idea of 92 00:03:13,620 --> 00:03:14,120 nationalism. 93 00:03:15,379 --> 00:03:17,139 And the reason I say that is I 94 00:03:17,139 --> 00:03:17,639 think, 95 00:03:17,995 --> 00:03:20,074 you know, if you want to find an 96 00:03:20,074 --> 00:03:22,395 amazing technology, you could point to AI. But 97 00:03:22,395 --> 00:03:25,115 I think perhaps the most profound technology we've 98 00:03:25,115 --> 00:03:26,555 had over the last 30 or 40 years 99 00:03:26,555 --> 00:03:29,879 has been horizontal drilling and fracking. Why? Because 100 00:03:30,099 --> 00:03:32,280 the US is now self sufficient in energy. 101 00:03:32,900 --> 00:03:35,594 So back when the US was heavily involved 102 00:03:35,594 --> 00:03:37,354 in external affairs, be it in the Middle 103 00:03:37,354 --> 00:03:39,834 East, Russia, wherever, they were heavily dependent on 104 00:03:39,834 --> 00:03:41,694 external forms of energy importation. 105 00:03:42,400 --> 00:03:44,159 That's no longer the case, and I think 106 00:03:44,159 --> 00:03:45,540 that's hugely impactful. 107 00:03:45,920 --> 00:03:47,920 And it just means that they no longer 108 00:03:47,920 --> 00:03:50,560 need to be so mindful, and they're starting 109 00:03:50,560 --> 00:03:51,854 to focus a little bit more 110 00:03:52,334 --> 00:03:54,574 internally. And and that has, I think, quite 111 00:03:54,574 --> 00:03:55,474 profound implications. 112 00:03:55,935 --> 00:03:57,794 We call it a tectonic shift, 113 00:03:58,414 --> 00:04:00,655 and I think that's a really apt metaphor 114 00:04:00,655 --> 00:04:01,840 because if you think of, 115 00:04:02,319 --> 00:04:04,319 back when we were Pangaea, we were one 116 00:04:04,319 --> 00:04:06,479 continent and it split. It split into 2 117 00:04:06,479 --> 00:04:08,719 and then it fragmented more. And I think 118 00:04:08,719 --> 00:04:10,180 that idea of fragmentation 119 00:04:11,245 --> 00:04:13,485 is starting to percolate more and more into 120 00:04:13,485 --> 00:04:14,465 how we think about, 121 00:04:15,485 --> 00:04:17,245 asset allocation. If the world is no longer 122 00:04:17,245 --> 00:04:19,199 flat and the world is fragmented, then I 123 00:04:19,199 --> 00:04:21,680 think you might start to see allocators start 124 00:04:21,680 --> 00:04:22,740 fragmenting their, 125 00:04:23,279 --> 00:04:26,079 allocation. And if you are really excited about 126 00:04:26,079 --> 00:04:27,459 the UK, like I am, 127 00:04:27,935 --> 00:04:30,095 or Japan, or or or other parts of 128 00:04:30,095 --> 00:04:31,774 the world, and you wanna get exposure to 129 00:04:31,774 --> 00:04:32,274 those 130 00:04:33,214 --> 00:04:36,379 interesting opportunities, well, you're not gonna find those 131 00:04:36,379 --> 00:04:37,600 exposures in the aqui 132 00:04:38,060 --> 00:04:39,660 world, because there you will just find the 133 00:04:39,660 --> 00:04:41,919 US and probably 4 or 5 stocks 134 00:04:42,379 --> 00:04:45,954 within that. So, you know, you talked about 135 00:04:45,954 --> 00:04:47,495 some of the areas, some of the, 136 00:04:48,035 --> 00:04:49,954 countries that they're interested in, you know, UK, 137 00:04:49,954 --> 00:04:51,954 Japan. What what about, you know, those areas 138 00:04:51,954 --> 00:04:53,495 is is, you know, makes them interesting? 139 00:04:54,250 --> 00:04:55,930 So let's start with the the premise that 140 00:04:55,930 --> 00:04:56,990 I think where 141 00:04:57,449 --> 00:05:00,650 Alpha could be sought best going forward with 142 00:05:00,650 --> 00:05:02,810 an an equity standpoint is by moving away 143 00:05:02,810 --> 00:05:03,634 from the index 144 00:05:04,194 --> 00:05:05,415 and thinking more regionally. 145 00:05:06,115 --> 00:05:07,095 Not just because 146 00:05:07,634 --> 00:05:10,275 politically we're thinking more more regionally. I think 147 00:05:10,275 --> 00:05:11,670 there are interesting 148 00:05:12,210 --> 00:05:14,310 things going on in certain markets. Now, 149 00:05:15,330 --> 00:05:17,569 as you know, I've been writing about Japan 150 00:05:17,569 --> 00:05:19,430 for some time and I I still think 151 00:05:19,490 --> 00:05:19,990 that 152 00:05:20,464 --> 00:05:22,944 bull market is young. I think it's a 153 00:05:22,944 --> 00:05:24,485 young bull worth riding, 154 00:05:24,865 --> 00:05:26,785 and once we get through this carry trade 155 00:05:26,785 --> 00:05:29,205 unwind, I think there's an opportunity there. 156 00:05:29,960 --> 00:05:32,540 There's still good value in Japanese stocks. 157 00:05:33,240 --> 00:05:33,900 I recently 158 00:05:34,520 --> 00:05:35,420 looked at 159 00:05:36,814 --> 00:05:37,794 some screens 160 00:05:38,574 --> 00:05:40,975 and about 50% of the topics still trades 161 00:05:40,975 --> 00:05:42,035 below book value, 162 00:05:42,415 --> 00:05:42,915 and 163 00:05:43,375 --> 00:05:46,340 about 20% trade below 0.6 times book, which 164 00:05:46,340 --> 00:05:48,980 means they need to double to get to 165 00:05:48,980 --> 00:05:50,980 1 times book, which is the target of 166 00:05:50,980 --> 00:05:52,439 the Tokyo Stock Exchange. 167 00:05:53,754 --> 00:05:56,394 You've got incredible amounts of cash being generated. 168 00:05:56,394 --> 00:05:58,074 You've got record buybacks, and you've got 4 169 00:05:58,074 --> 00:05:59,435 times the amount of cash on the balance 170 00:05:59,435 --> 00:06:00,714 sheet to what you have in the US. 171 00:06:00,714 --> 00:06:02,250 So I think Japan is still, 172 00:06:03,290 --> 00:06:05,949 at an early stage. You don't fix the 173 00:06:06,009 --> 00:06:09,069 3 decades of behavior in in in 12 174 00:06:09,290 --> 00:06:11,095 to 18 months. So I think that's still 175 00:06:11,415 --> 00:06:13,995 very interesting. I think China is really interesting. 176 00:06:15,095 --> 00:06:16,475 Obviously, there's lots of 177 00:06:17,254 --> 00:06:18,470 risks, but I think those risks 178 00:06:19,269 --> 00:06:21,110 are starting to be discounted in in in 179 00:06:21,110 --> 00:06:21,610 price. 180 00:06:22,389 --> 00:06:23,769 You've also got reforms, 181 00:06:24,069 --> 00:06:26,785 and these reforms are very much aimed at 182 00:06:26,785 --> 00:06:29,745 domestic consumption. Now, forgive me for being rather 183 00:06:29,745 --> 00:06:32,165 simple about this, but you can't fix consumption 184 00:06:32,225 --> 00:06:33,605 unless you fix confidence. 185 00:06:34,379 --> 00:06:36,460 And the easiest way to fix confidence is 186 00:06:36,460 --> 00:06:39,740 by increasing collateral values. Right? Wealth affects. And 187 00:06:39,740 --> 00:06:41,100 what are the 2 biggest forms of collateral 188 00:06:41,100 --> 00:06:43,180 value in China? One's property and the other's 189 00:06:43,180 --> 00:06:43,805 stock market. 190 00:06:44,365 --> 00:06:45,964 So I think property and stock markets become 191 00:06:45,964 --> 00:06:46,865 policy levers, 192 00:06:47,805 --> 00:06:49,584 and I think they will be pulled, 193 00:06:50,604 --> 00:06:51,104 and 194 00:06:51,404 --> 00:06:52,544 I feel reasonably 195 00:06:53,509 --> 00:06:54,009 comfortable, 196 00:06:55,350 --> 00:06:57,689 playing alongside that that lever being pulled. 197 00:06:58,790 --> 00:07:01,175 The UK is still perhaps the one I'm 198 00:07:01,175 --> 00:07:03,495 most interested in, and and there's a little 199 00:07:03,495 --> 00:07:05,194 bit of a bias because that's where I'm 200 00:07:05,735 --> 00:07:06,235 situated. 201 00:07:06,855 --> 00:07:09,350 But we've also got catalysts now, and the 202 00:07:09,350 --> 00:07:11,509 catalysts come in a range of forms. We've 203 00:07:11,509 --> 00:07:12,009 got, 204 00:07:12,470 --> 00:07:15,189 incentives. Government the government stopped beating up on 205 00:07:15,189 --> 00:07:17,475 bankers, by the way. So sentiment wise, that's 206 00:07:17,475 --> 00:07:19,555 that's quite a big thing, because the bankers 207 00:07:19,555 --> 00:07:20,995 were part of the problem. Now they're part 208 00:07:20,995 --> 00:07:22,375 of the solution, which is interesting. 209 00:07:23,555 --> 00:07:25,955 We've got stable government, which is governing from 210 00:07:25,955 --> 00:07:26,615 the center, 211 00:07:26,959 --> 00:07:28,000 right, as the rest of the world is 212 00:07:28,000 --> 00:07:29,220 trying to tear itself apart. 213 00:07:29,599 --> 00:07:32,240 That's unique. That's interesting. That feeds into risk 214 00:07:32,240 --> 00:07:33,939 premia, and risk premia, 215 00:07:34,634 --> 00:07:37,035 in in in the UK is is still 216 00:07:37,035 --> 00:07:37,535 extremely, 217 00:07:38,235 --> 00:07:40,154 high relative to other parts of the world, 218 00:07:40,154 --> 00:07:41,935 particularly here in the US. It's almost double. 219 00:07:43,889 --> 00:07:45,990 We've got Catalyst in the form of incentives 220 00:07:46,129 --> 00:07:48,610 to create more of an equity culture and 221 00:07:48,610 --> 00:07:50,610 getting retail investors back into the market who 222 00:07:50,610 --> 00:07:51,750 basically have fled, 223 00:07:52,425 --> 00:07:53,625 alongside with Brexit, 224 00:07:54,345 --> 00:07:56,824 and have invested everywhere else but their home 225 00:07:56,824 --> 00:07:57,324 market. 226 00:07:57,625 --> 00:07:59,464 We've got tax incentives that might bring them 227 00:07:59,464 --> 00:08:00,829 back. That's that's important. 228 00:08:01,529 --> 00:08:04,410 We've got reforms around MiFID, so more research 229 00:08:04,410 --> 00:08:04,910 provision. 230 00:08:05,289 --> 00:08:07,610 We've eased our listing rules to make capital 231 00:08:07,610 --> 00:08:09,870 more attractive to being listed in the UK. 232 00:08:10,154 --> 00:08:12,314 But far and away, the most important is 233 00:08:12,314 --> 00:08:14,395 pension reform. Now you hear a lot about 234 00:08:14,395 --> 00:08:16,875 pension reform in the UK, but it matters 235 00:08:16,875 --> 00:08:17,375 because 236 00:08:17,810 --> 00:08:20,050 pensions are such an enormous part of the 237 00:08:20,050 --> 00:08:20,550 available 238 00:08:21,169 --> 00:08:23,189 capital that can be put to work. 239 00:08:23,889 --> 00:08:26,149 And it wasn't that long ago, 240 00:08:26,625 --> 00:08:29,365 late nineties, where UK pension assets 241 00:08:29,824 --> 00:08:32,865 had about half of their available assets invested 242 00:08:32,865 --> 00:08:33,924 in UK stocks. 243 00:08:34,740 --> 00:08:36,840 Fast forward to today, that number is about 244 00:08:37,059 --> 00:08:39,779 2. In fact, the government's own pension fund 245 00:08:39,779 --> 00:08:40,600 has 1.7% 246 00:08:41,700 --> 00:08:44,120 of their assets in UK stocks. Now 247 00:08:45,404 --> 00:08:47,725 that is about to change for two reasons. 248 00:08:47,725 --> 00:08:48,384 1 is 249 00:08:49,245 --> 00:08:53,105 we're a predominantly defined benefit system, but that's 250 00:08:53,419 --> 00:08:55,259 now changing. They're all in surplus, so a 251 00:08:55,259 --> 00:08:56,860 lot of the corporate funds are in surplus. 252 00:08:56,860 --> 00:08:58,779 That means the corporates no longer have to 253 00:08:58,779 --> 00:09:00,945 keep filling the pension pot. They can use 254 00:09:00,945 --> 00:09:03,184 that money for other things like buybacks or 255 00:09:03,184 --> 00:09:03,684 capex, 256 00:09:04,144 --> 00:09:07,105 something rather new and exciting. Was that driven 257 00:09:07,105 --> 00:09:09,024 by in the interest rate environment? Did that 258 00:09:09,024 --> 00:09:11,580 help the, you know, creation? A 100% because 259 00:09:11,580 --> 00:09:13,500 they their liabilities are discounted to the yeah. 260 00:09:13,500 --> 00:09:16,139 So as liabilities as the discount factor interest 261 00:09:16,139 --> 00:09:18,320 rates went up, their liabilities went down. 262 00:09:18,764 --> 00:09:20,524 So it's certainly been been an impact. But 263 00:09:20,524 --> 00:09:22,924 that's that's relevant, and now they're moving they're 264 00:09:22,924 --> 00:09:23,404 being, 265 00:09:23,804 --> 00:09:26,544 sold on those liabilities to insurance companies. 266 00:09:27,600 --> 00:09:29,539 But we're now seeing a move towards more 267 00:09:29,919 --> 00:09:32,580 defined contribution. Now for the first time 268 00:09:33,120 --> 00:09:37,074 ever in May, defined contribution inflows out were 269 00:09:37,074 --> 00:09:39,954 bigger than defined benefit inflows. That hasn't happened 270 00:09:39,954 --> 00:09:41,554 for a very long time. So I think 271 00:09:41,554 --> 00:09:43,634 the forced selling stopped, and now we're about 272 00:09:43,634 --> 00:09:45,850 to see more money flow into defined contribution. 273 00:09:45,850 --> 00:09:47,870 Defined contribution typically invests 274 00:09:48,330 --> 00:09:49,870 in in in more growth assets, 275 00:09:50,250 --> 00:09:52,250 whereas defined benefit need to match their assets 276 00:09:52,250 --> 00:09:54,009 and their liabilities. So one's more risk averse, 277 00:09:54,009 --> 00:09:54,615 the other one. 278 00:09:55,815 --> 00:09:57,174 The 2 countries in the world that have 279 00:09:57,174 --> 00:10:00,214 the most defined contribution, Australia and and and 280 00:10:00,214 --> 00:10:01,894 the US, what do they also share? The 281 00:10:01,894 --> 00:10:03,929 2 best performing share markets over the past 282 00:10:03,929 --> 00:10:06,970 a 120 years. Right? So a bit of 283 00:10:06,970 --> 00:10:09,370 supply side of of sort of yeah. The 284 00:10:09,370 --> 00:10:11,050 the push of funds into the market Exactly. 285 00:10:11,210 --> 00:10:13,115 Is gonna Exactly. So so I'll give you 286 00:10:13,115 --> 00:10:15,835 some some numbers. So about a $1,000,000,000,000 has 287 00:10:15,835 --> 00:10:18,095 come out of UK equity markets 288 00:10:18,555 --> 00:10:19,855 from that pension pool 289 00:10:20,159 --> 00:10:20,659 and 290 00:10:21,039 --> 00:10:22,899 I mean the market's only just over 2,000,000,000,000 291 00:10:23,279 --> 00:10:24,820 so it's an enormous now, 292 00:10:25,200 --> 00:10:27,279 in 2 or 3 years' time, the government's 293 00:10:27,279 --> 00:10:29,615 going to force pension funds in the UK 294 00:10:29,674 --> 00:10:31,134 to disclose their holdings. 295 00:10:31,595 --> 00:10:33,514 Now in a world of nash see above, 296 00:10:33,514 --> 00:10:35,910 you know, national identity, I think it's going 297 00:10:35,910 --> 00:10:39,070 to be incredibly hard to justify an underweight 298 00:10:39,070 --> 00:10:39,570 position. 299 00:10:40,269 --> 00:10:42,750 And I think you'll find that others and 300 00:10:42,750 --> 00:10:44,835 some might go way beyond that, especially if 301 00:10:44,835 --> 00:10:46,355 markets going up, which I think they will. 302 00:10:46,355 --> 00:10:49,654 So I believe we have a pension put 303 00:10:50,434 --> 00:10:50,934 emerging. 304 00:10:51,269 --> 00:10:52,629 Now we've got a Fed put. I think 305 00:10:52,629 --> 00:10:54,649 we've got a pension put in the UK 306 00:10:54,789 --> 00:10:56,710 that's starting to emerge. And and if I 307 00:10:56,710 --> 00:10:58,970 was an allocator, I'd be seriously considering 308 00:10:59,725 --> 00:11:02,225 finding alpha regionally and reallocating 309 00:11:02,845 --> 00:11:05,004 towards the UK, which I think is still 310 00:11:05,004 --> 00:11:06,544 one of the more interesting opportunities. 311 00:11:07,429 --> 00:11:09,509 The other market I'm really interested in is 312 00:11:09,509 --> 00:11:10,009 Finland. 313 00:11:10,870 --> 00:11:11,370 Okay. 314 00:11:12,389 --> 00:11:15,264 Because I think the other mis priced outcome, 315 00:11:15,565 --> 00:11:17,725 something we're not talking about so much, what 316 00:11:17,725 --> 00:11:19,004 we talk about, I don't think we think 317 00:11:19,004 --> 00:11:20,945 through it, is I think we're mispricing 318 00:11:21,884 --> 00:11:22,625 the probability 319 00:11:23,790 --> 00:11:25,090 of peace 320 00:11:25,470 --> 00:11:25,970 in 321 00:11:26,670 --> 00:11:27,170 Ukraine. 322 00:11:28,269 --> 00:11:30,350 Now, I'm not saying that's going to happen. 323 00:11:30,350 --> 00:11:32,095 I'm just saying that the market's mis pricing 324 00:11:32,095 --> 00:11:33,535 that outcome, and if you were to get 325 00:11:33,535 --> 00:11:35,455 it, then one of the countries most likely 326 00:11:35,455 --> 00:11:38,514 to benefit who shares the largest border with 327 00:11:38,815 --> 00:11:39,794 Russia is Finland. 328 00:11:40,190 --> 00:11:41,710 And there's another reason why I think Finland 329 00:11:41,710 --> 00:11:43,970 is really interesting, we'll perhaps come on to 330 00:11:44,190 --> 00:11:46,450 in later questions. But so anyway, 331 00:11:46,990 --> 00:11:49,245 so being a bit Finland aside, I think 332 00:11:49,245 --> 00:11:50,684 I think the UK is a very interesting 333 00:11:50,684 --> 00:11:53,245 opportunity. Japan, I think, still, you know, if 334 00:11:53,245 --> 00:11:54,304 you look back at 335 00:11:54,684 --> 00:11:56,785 Japan only very recently broke above its 336 00:11:57,139 --> 00:11:59,059 1989 peak. You go back to when the 337 00:11:59,059 --> 00:11:59,799 Dow broke 338 00:12:00,100 --> 00:12:01,940 up above its 29 peak, you know, it 339 00:12:01,940 --> 00:12:04,120 compounded 11% for the next 10 years. 340 00:12:04,625 --> 00:12:07,445 Yep. Could history rhyme? Yeah. I think it 341 00:12:07,825 --> 00:12:10,384 might. Yeah. I suppose if we're seeing a 342 00:12:10,384 --> 00:12:12,545 different view from regional, but if we look 343 00:12:12,545 --> 00:12:14,679 at sort of, you know, if there are 344 00:12:14,679 --> 00:12:16,839 any sort of thematic, you know, things going 345 00:12:16,839 --> 00:12:18,059 on, you know, that, 346 00:12:18,519 --> 00:12:19,579 that you find interesting. 347 00:12:20,200 --> 00:12:21,384 So I think last time I was on, 348 00:12:21,384 --> 00:12:23,945 we're talking about GLP 1 drugs and the 349 00:12:23,945 --> 00:12:26,125 impact that's having for obesity 350 00:12:26,504 --> 00:12:27,644 rates, but also 351 00:12:29,419 --> 00:12:31,500 some of the implications there. I think we're 352 00:12:31,500 --> 00:12:33,419 starting to think now about the second order 353 00:12:33,419 --> 00:12:35,179 effects, and now we've had more time to 354 00:12:35,179 --> 00:12:37,100 experiment with these drugs. You know, some doctors 355 00:12:37,100 --> 00:12:37,679 are microdosing. 356 00:12:38,125 --> 00:12:39,725 Some of the the data that's coming back 357 00:12:39,725 --> 00:12:40,704 is just extraordinary. 358 00:12:41,245 --> 00:12:43,404 So we mentioned, you know, the impact of 359 00:12:43,404 --> 00:12:45,884 of on not just fixing things like, you 360 00:12:45,884 --> 00:12:47,730 know, diabetes, but also heart disease. 361 00:12:48,129 --> 00:12:49,190 And if you're thinking 362 00:12:50,049 --> 00:12:50,549 productivity, 363 00:12:51,809 --> 00:12:53,329 and we all point to AI as the 364 00:12:53,329 --> 00:12:54,470 great hope for productivity. 365 00:12:54,985 --> 00:12:55,964 Well, just think about, 366 00:12:57,144 --> 00:12:59,245 a recent paper written by 367 00:12:59,625 --> 00:13:01,464 the Tony Blair Institute, the think tank in 368 00:13:01,464 --> 00:13:02,125 the UK, 369 00:13:02,585 --> 00:13:03,710 and they were looking at 370 00:13:04,429 --> 00:13:06,690 heart disease of workers over 50. 371 00:13:07,070 --> 00:13:07,889 About 20% 372 00:13:08,269 --> 00:13:10,690 of workers over 50 will leave work before 373 00:13:11,070 --> 00:13:13,334 retirement because of heart issues, 374 00:13:15,154 --> 00:13:17,254 and if you were able to 375 00:13:18,355 --> 00:13:21,095 fix 1 fifth of that cohort 376 00:13:22,089 --> 00:13:23,629 then, you know, you're increasing 377 00:13:24,169 --> 00:13:27,549 productivity by worker productivity by £2,000,000,000 to £3,000,000,000 378 00:13:27,929 --> 00:13:28,589 per annum. 379 00:13:29,610 --> 00:13:31,954 So there's huge amounts of hope for these 380 00:13:31,954 --> 00:13:33,475 drugs, not just in terms of the health 381 00:13:33,475 --> 00:13:35,475 benefits, but also the economic ones. So when 382 00:13:35,475 --> 00:13:36,995 I say second order effects, I'm starting to 383 00:13:36,995 --> 00:13:39,735 think through more about the the economic benefits. 384 00:13:40,669 --> 00:13:42,289 The other really fascinating 385 00:13:42,909 --> 00:13:44,669 aspect of these drugs is they seem to 386 00:13:44,669 --> 00:13:46,589 be impacting the reward networks of the brain, 387 00:13:46,589 --> 00:13:47,570 so they're impacting 388 00:13:48,414 --> 00:13:49,315 people's addiction 389 00:13:49,774 --> 00:13:51,315 to eating, obviously, 390 00:13:51,774 --> 00:13:52,434 to smoking, 391 00:13:52,975 --> 00:13:55,934 drinking, gambling, and I'm starting to question whether 392 00:13:55,934 --> 00:13:57,794 it might also start to impact 393 00:13:58,159 --> 00:14:00,480 our addictions to, because it's the same reward 394 00:14:00,480 --> 00:14:02,259 network, it's dopamine, social media. 395 00:14:03,679 --> 00:14:05,759 Now, this is the most so the the 396 00:14:05,759 --> 00:14:08,095 book I've been reading, which if anyone's got 397 00:14:08,095 --> 00:14:09,634 young children, prepubescent, 398 00:14:10,095 --> 00:14:12,095 pre teen children, I think it's almost essential 399 00:14:12,095 --> 00:14:14,034 reading, is called The Anxious Generation 400 00:14:14,789 --> 00:14:15,929 by Jonathan Haidett. 401 00:14:16,549 --> 00:14:17,750 And I think this is gonna be one 402 00:14:17,750 --> 00:14:20,409 of those touchstone books that, you know, changes 403 00:14:20,470 --> 00:14:22,809 behavior, certainly of our parents, and 404 00:14:23,195 --> 00:14:25,434 basically what what he's done is he's, you 405 00:14:25,434 --> 00:14:28,254 know, there's always been this assumed correlation between, 406 00:14:29,115 --> 00:14:30,394 social media and, 407 00:14:30,955 --> 00:14:32,254 and and teen depression. 408 00:14:33,420 --> 00:14:34,320 Well, he's now 409 00:14:34,779 --> 00:14:37,259 attempted to prove it using using evidence. And 410 00:14:37,259 --> 00:14:39,340 so he looks at Gen zed, so those 411 00:14:39,340 --> 00:14:41,600 children born after 20 sorry, 1995, 412 00:14:42,815 --> 00:14:43,955 and the 413 00:14:44,414 --> 00:14:46,735 they are the 1st cohort to go through 414 00:14:46,735 --> 00:14:49,554 puberty with a portal in their pocket. 415 00:14:50,509 --> 00:14:52,590 And they've moved from this sort of, 416 00:14:53,149 --> 00:14:55,009 real world play to, 417 00:14:56,509 --> 00:14:58,995 to to phone time. So they've moved from, 418 00:14:58,995 --> 00:15:00,595 I can't remember what it was, but it 419 00:15:00,595 --> 00:15:02,274 was they're spending all of their free time 420 00:15:02,274 --> 00:15:04,595 now on on on phones, and and this 421 00:15:04,595 --> 00:15:05,095 coincided 422 00:15:05,394 --> 00:15:08,320 coincided with this movement to really overprotect our 423 00:15:08,320 --> 00:15:10,660 children in in the real world and almost 424 00:15:11,120 --> 00:15:12,800 let them free on the online world, you 425 00:15:12,800 --> 00:15:13,940 know, without protection. 426 00:15:14,444 --> 00:15:17,644 And he's saying it's rewired children, and especially 427 00:15:17,644 --> 00:15:20,044 those at that age, because the prefrontal cortex 428 00:15:20,044 --> 00:15:22,149 isn't fully developed, and that that's the part 429 00:15:22,149 --> 00:15:23,669 of the brain that's your, sort of, your 430 00:15:23,669 --> 00:15:25,209 second order, your thinking part, 431 00:15:25,830 --> 00:15:26,730 delayed gratification, 432 00:15:27,429 --> 00:15:29,429 your control of temptation, all those sorts of 433 00:15:29,429 --> 00:15:31,565 things, is not fully developed and therefore it's 434 00:15:31,565 --> 00:15:32,544 incredibly vulnerable 435 00:15:33,245 --> 00:15:34,144 to these influences. 436 00:15:35,644 --> 00:15:38,464 And so he that's, I think, of real 437 00:15:39,129 --> 00:15:41,769 interest in bringing it back to markets. He 438 00:15:41,769 --> 00:15:43,389 suggested we need to age gate, 439 00:15:44,169 --> 00:15:46,865 iPhone and social media. Now, we are starting 440 00:15:46,865 --> 00:15:48,245 to see this being adopted. 441 00:15:49,264 --> 00:15:49,764 California's 442 00:15:50,144 --> 00:15:50,304 just 443 00:15:51,665 --> 00:15:53,985 New Zealand's just, I think, banned iPhones for 444 00:15:53,985 --> 00:15:55,959 lots of schools, and my kids' school in 445 00:15:55,959 --> 00:15:58,539 the UK, they're doing the same. Now, 446 00:15:58,919 --> 00:15:59,740 back to Finland. 447 00:16:00,519 --> 00:16:03,240 Instead of us allowing to give them an 448 00:16:03,240 --> 00:16:05,284 iPhone, they're actually giving us 449 00:16:06,084 --> 00:16:07,845 the brick phone, so we can stay in 450 00:16:07,845 --> 00:16:08,985 touch with them and SMS. 451 00:16:09,444 --> 00:16:10,424 Do you know what the phoners? 452 00:16:10,804 --> 00:16:12,324 It's a Nokia. I was gonna say the 453 00:16:12,324 --> 00:16:13,865 old Nokia. Nokia. The Nokia. 454 00:16:14,509 --> 00:16:17,309 And Nokia once had 70% market share of 455 00:16:17,309 --> 00:16:20,190 the Finnish stock market. You think Nvidia's got 456 00:16:20,190 --> 00:16:21,629 concentration risk. Go and have a look at 457 00:16:21,629 --> 00:16:22,610 Nokia in 2000. 458 00:16:24,115 --> 00:16:26,054 So, you know, it could be the antidote 459 00:16:26,115 --> 00:16:26,855 to this 460 00:16:27,475 --> 00:16:29,975 counter movement towards social media, 461 00:16:30,970 --> 00:16:32,330 it could be a way of, you know, 462 00:16:32,330 --> 00:16:33,929 it could be picked up as a way 463 00:16:33,929 --> 00:16:35,230 to help our kids, and, 464 00:16:36,330 --> 00:16:37,769 and of course you might get a a 465 00:16:37,769 --> 00:16:39,230 peace dividend, and Finland 466 00:16:39,584 --> 00:16:40,884 could be one of those beneficiaries. 467 00:16:41,504 --> 00:16:43,345 So, those sorts of things have been top 468 00:16:43,345 --> 00:16:45,664 of mind. The other sort of thematics which 469 00:16:45,664 --> 00:16:47,284 I'm still very interested in, 470 00:16:47,904 --> 00:16:49,980 space. I think we mentioned when we were 471 00:16:49,980 --> 00:16:52,779 here last. Space is fascinating. There's so much 472 00:16:52,779 --> 00:16:54,940 stuff going on in space, and in fact 473 00:16:54,940 --> 00:16:57,100 part of the military issues are currently in 474 00:16:57,100 --> 00:16:57,600 space. 475 00:16:58,125 --> 00:17:00,045 We just don't see it. Why? Because there's 476 00:17:00,045 --> 00:17:02,065 no reporters up there, there's no photo ops. 477 00:17:02,845 --> 00:17:05,805 But, there is a huge economy already in 478 00:17:05,805 --> 00:17:06,305 space. 479 00:17:06,649 --> 00:17:08,009 Yes, military is a big part of it, 480 00:17:08,009 --> 00:17:11,210 but also communications, Wi Fi, Starlink, these sorts 481 00:17:11,210 --> 00:17:11,789 of things. 482 00:17:13,130 --> 00:17:13,950 Space solar 483 00:17:14,434 --> 00:17:17,015 is possibly one of the answers 484 00:17:17,955 --> 00:17:18,455 to, 485 00:17:19,315 --> 00:17:21,734 non intermittent baseload power 486 00:17:22,200 --> 00:17:24,440 that doesn't leave a nasty side effect like 487 00:17:24,440 --> 00:17:27,320 nuclear does. So that's interesting. Apparently, the US 488 00:17:27,320 --> 00:17:29,580 military are already using it, 489 00:17:30,275 --> 00:17:32,775 I. E. Those folks that bought us 490 00:17:33,234 --> 00:17:34,454 things like GPS, 491 00:17:34,994 --> 00:17:37,015 the microwave, the Internet, radar 492 00:17:37,349 --> 00:17:38,490 may soon bring us 493 00:17:38,950 --> 00:17:39,450 solar. 494 00:17:39,910 --> 00:17:41,589 So I think that's interesting. And keep an 495 00:17:41,589 --> 00:17:44,230 eye next year, you know, just linking back 496 00:17:44,230 --> 00:17:46,525 to this idea of of nationalism, I think 497 00:17:46,525 --> 00:17:49,424 we might actually see that fragment into subnationalism, 498 00:17:49,964 --> 00:17:50,464 provincialism. 499 00:17:51,964 --> 00:17:53,805 Kind of look what's happening in Texas. Texas 500 00:17:53,805 --> 00:17:55,630 is talking about setting up their own stock 501 00:17:55,630 --> 00:17:56,130 exchange. 502 00:17:56,669 --> 00:17:58,269 I can't help but think there could be 503 00:17:58,269 --> 00:18:01,470 a certain person behind that, a certain Elon 504 00:18:01,470 --> 00:18:03,730 Musk, right, who would love to IPO 505 00:18:04,565 --> 00:18:05,065 SpaceX 506 00:18:05,684 --> 00:18:06,984 and launch it from, 507 00:18:07,765 --> 00:18:08,904 you know, Texas. 508 00:18:09,605 --> 00:18:11,924 I'm just speculating, but you know, these are 509 00:18:12,005 --> 00:18:13,609 this is my reading of the tea leaves. 510 00:18:14,170 --> 00:18:16,009 And if you think of SpaceX, I think 511 00:18:16,009 --> 00:18:17,390 SpaceX could be an extraordinary, 512 00:18:18,730 --> 00:18:20,589 opportunity because, you know, 513 00:18:20,965 --> 00:18:23,285 like what NVIDIA is to GPUs in terms 514 00:18:23,285 --> 00:18:25,684 of market share, they are to low orbit 515 00:18:25,684 --> 00:18:27,865 satellites. I think they account for about 70% 516 00:18:28,005 --> 00:18:29,809 of low orbit satellites and their speed and 517 00:18:29,809 --> 00:18:32,049 efficiency advantage is miles ahead of anyone else. 518 00:18:32,049 --> 00:18:33,889 It's more than China, more than NASA put 519 00:18:33,889 --> 00:18:35,490 together the satellites. They're still the only ones 520 00:18:35,490 --> 00:18:38,615 with, with repeatable rockets. Exactly. They get back 521 00:18:38,615 --> 00:18:40,234 to it. So watch this space. 522 00:18:41,734 --> 00:18:42,134 Sorry. 523 00:18:42,695 --> 00:18:44,875 So that's that's of interest. And there's another 524 00:18:45,230 --> 00:18:46,609 thing that comes from space. 525 00:18:47,470 --> 00:18:48,369 Did you know? 526 00:18:49,390 --> 00:18:51,330 I'm waiting to be enlightened. Gold. 527 00:18:51,789 --> 00:18:52,289 Okay. 528 00:18:52,590 --> 00:18:53,755 Gold comes from outer space. 529 00:18:54,795 --> 00:18:56,714 True story. So we're mining gold in outer 530 00:18:56,714 --> 00:18:58,875 space. No. Gold, that's how it was formed, 531 00:18:58,875 --> 00:19:00,734 from some, you know, cosmic collision. 532 00:19:01,289 --> 00:19:02,589 Look it up. Alright. 533 00:19:03,289 --> 00:19:04,910 Gold's another space play. 534 00:19:05,769 --> 00:19:08,250 I'm still very bullish on gold, not just 535 00:19:08,250 --> 00:19:11,115 because it is one of the ways to 536 00:19:11,275 --> 00:19:13,295 that enables central banks to 537 00:19:13,835 --> 00:19:15,134 provide a safer 538 00:19:15,914 --> 00:19:18,174 reserve asset in a world that's fragmenting. 539 00:19:18,555 --> 00:19:19,695 Right? See above. 540 00:19:20,259 --> 00:19:21,940 And that's why we're seeing the biggest demand 541 00:19:21,940 --> 00:19:23,320 is still the, 542 00:19:23,859 --> 00:19:26,340 the central banks that perhaps fall outside of 543 00:19:26,340 --> 00:19:29,000 the US sphere, the Washington Consensus, 544 00:19:30,005 --> 00:19:30,904 for obvious reasons. 545 00:19:33,125 --> 00:19:35,125 Gold could also play a role in fixing 546 00:19:35,125 --> 00:19:36,105 the debt problem. 547 00:19:36,724 --> 00:19:38,244 Right? You have to bear with me here, 548 00:19:38,244 --> 00:19:38,744 but, 549 00:19:39,539 --> 00:19:40,279 in the US, 550 00:19:40,980 --> 00:19:41,720 I understand, 551 00:19:42,900 --> 00:19:43,400 that, 552 00:19:43,860 --> 00:19:46,105 the Treasury has a large 553 00:19:46,904 --> 00:19:47,724 gold holding, 554 00:19:48,184 --> 00:19:50,444 but it's valued at $42 an ounce. 555 00:19:51,224 --> 00:19:53,384 And they could, if they wanted to, in 556 00:19:53,384 --> 00:19:56,329 some form of debt jubilee, actually utilize the 557 00:19:56,329 --> 00:19:57,470 Fed operating handbook, 558 00:19:58,089 --> 00:19:58,589 and 559 00:19:59,529 --> 00:20:02,250 revalue it to current levels or above, and 560 00:20:02,250 --> 00:20:04,704 so doing you know, releasing liquidity the mark 561 00:20:04,704 --> 00:20:06,625 without increasing their debt issuance. So that could 562 00:20:06,625 --> 00:20:08,384 have a role to play in that, but 563 00:20:08,384 --> 00:20:09,904 that's not a reason to own it. Just 564 00:20:09,904 --> 00:20:10,404 interesting. 565 00:20:11,039 --> 00:20:12,880 But of course the third thing is this 566 00:20:12,880 --> 00:20:15,599 idea of digital gold. You know, everyone gets 567 00:20:15,599 --> 00:20:17,700 excited about Bitcoin being, you know, 568 00:20:18,375 --> 00:20:19,974 a good form of it, but it's an 569 00:20:19,974 --> 00:20:21,595 imposter to the real thing. 570 00:20:21,974 --> 00:20:25,255 And I urge anyone here to listen to 571 00:20:25,255 --> 00:20:26,789 the interview we did with 572 00:20:27,269 --> 00:20:29,670 David Tait, who's the CEO of the World 573 00:20:29,670 --> 00:20:30,410 Gold Council, 574 00:20:30,869 --> 00:20:32,250 whose ambition is 575 00:20:33,029 --> 00:20:36,150 to create a ledger of all responsibly sourced 576 00:20:36,150 --> 00:20:37,955 gold. Right, bring governance 577 00:20:38,575 --> 00:20:39,875 to gold mining, 578 00:20:42,335 --> 00:20:44,755 put it on a distributed ledger and then 579 00:20:45,055 --> 00:20:46,115 tokenize it 580 00:20:46,509 --> 00:20:49,230 and create a digital version of gold, which 581 00:20:49,230 --> 00:20:51,250 is backed by the real stuff. 582 00:20:51,789 --> 00:20:54,350 Okay? Which the people of my generation, we 583 00:20:54,350 --> 00:20:57,125 like real things as opposed to and this 584 00:20:57,125 --> 00:21:00,244 could help bring that generation into the digital 585 00:21:00,244 --> 00:21:01,765 world and bridge that gap. So So is 586 00:21:01,765 --> 00:21:04,404 that increasing liquidity? Is that what's what's what's 587 00:21:04,404 --> 00:21:06,789 his what does he think that the the 588 00:21:06,950 --> 00:21:07,917 what on the what's on the other side 589 00:21:07,917 --> 00:21:07,953 of that? What's the benefit of, of that? 590 00:21:07,953 --> 00:21:07,986 Well, the benefits of the ledger are that 591 00:21:07,986 --> 00:21:08,740 you get provenance. 592 00:21:13,974 --> 00:21:15,575 So if you're a central bank and you 593 00:21:15,575 --> 00:21:18,455 want to ensure that you're buying from a 594 00:21:18,455 --> 00:21:21,335 reputable source, well, it it's registered. You've you've 595 00:21:21,335 --> 00:21:23,099 got that ledger. And What that means is 596 00:21:23,099 --> 00:21:24,720 you remove a lot of bad actors 597 00:21:25,420 --> 00:21:25,920 from, 598 00:21:26,460 --> 00:21:28,619 you know, in Africa, for example, some of 599 00:21:28,619 --> 00:21:31,345 the the biggest buyers of artisanal gold, for 600 00:21:31,345 --> 00:21:34,625 example, are, you know, these mafia organizations, and 601 00:21:34,625 --> 00:21:36,785 quite often you might find that money ends 602 00:21:36,785 --> 00:21:38,404 up in the hands of rogue states, 603 00:21:38,990 --> 00:21:39,490 Russia. 604 00:21:40,430 --> 00:21:42,450 And so I think that will help minimize 605 00:21:42,750 --> 00:21:44,690 that, which is which is really important. 606 00:21:45,934 --> 00:21:47,554 But then if you can imbue 607 00:21:48,015 --> 00:21:48,755 the characteristics 608 00:21:49,294 --> 00:21:49,794 of 609 00:21:50,815 --> 00:21:52,515 Bitcoin, I. E. Transferability, 610 00:21:53,294 --> 00:21:53,794 portability, 611 00:21:54,494 --> 00:21:54,994 divisibility, 612 00:21:56,529 --> 00:21:57,909 with a physical 613 00:21:58,769 --> 00:21:59,269 component. 614 00:21:59,809 --> 00:22:01,429 Or you're bringing the best of 615 00:22:01,970 --> 00:22:02,789 goals past 616 00:22:03,384 --> 00:22:04,205 with the digital future, 617 00:22:04,825 --> 00:22:07,465 and actually creating something that could also become 618 00:22:07,465 --> 00:22:08,125 a currency. 619 00:22:09,065 --> 00:22:10,525 So, watch this space, 620 00:22:11,849 --> 00:22:12,349 sorry, 621 00:22:12,650 --> 00:22:13,789 but I think that is 622 00:22:14,730 --> 00:22:15,230 extraordinarily 623 00:22:15,690 --> 00:22:16,190 interesting, 624 00:22:16,890 --> 00:22:18,890 and I do urge anyone to listen to 625 00:22:18,890 --> 00:22:21,015 David's story because it's not just about what 626 00:22:21,015 --> 00:22:22,694 he's doing with the World Gold Council, it's 627 00:22:22,694 --> 00:22:25,335 his backstory which is, you know, he's climbed 628 00:22:25,335 --> 00:22:26,474 Everest 5 times, 629 00:22:27,230 --> 00:22:28,589 He does it because he gives a lot 630 00:22:28,589 --> 00:22:30,349 of money to a charity in the UK, 631 00:22:30,349 --> 00:22:32,990 which is all about protecting children from from 632 00:22:32,990 --> 00:22:35,525 from from abuse, And it's it's an incredible 633 00:22:35,525 --> 00:22:36,884 story, and I and I urge you to 634 00:22:36,884 --> 00:22:39,045 listen to it. So what we sort of 635 00:22:39,045 --> 00:22:41,045 pivoted a little bit to asset classes, I 636 00:22:41,045 --> 00:22:42,400 suppose, but are there any, you know, 637 00:22:43,359 --> 00:22:45,140 other asset classes that, 638 00:22:45,599 --> 00:22:48,019 you think our viewers should be thinking about? 639 00:22:49,279 --> 00:22:51,075 So yeah. I mean, a lot of allocators 640 00:22:51,075 --> 00:22:53,075 are sort of thinking forward and questioning, right, 641 00:22:53,075 --> 00:22:54,434 what are the big risks and what do 642 00:22:54,434 --> 00:22:55,634 I need to, 643 00:22:55,955 --> 00:22:58,434 think about in terms of assets to hedge 644 00:22:58,434 --> 00:22:59,174 those risks. 645 00:23:00,740 --> 00:23:03,460 Fear of inflation hasn't gone away. Right? In 646 00:23:03,460 --> 00:23:05,619 fact, we're about to re liquefy the system, 647 00:23:05,619 --> 00:23:07,299 and I think inflation, like it did in 648 00:23:07,299 --> 00:23:08,900 the seventies, could be an issue we deal 649 00:23:08,900 --> 00:23:11,115 with again in years to come. And 650 00:23:11,494 --> 00:23:13,494 how do you fix inflate? Well, how from 651 00:23:13,494 --> 00:23:14,934 an allocator's point of view, what are the 652 00:23:14,934 --> 00:23:17,095 types of assets that should do well in 653 00:23:17,095 --> 00:23:20,000 an inflationary environment? Well, hard assets are 1. 654 00:23:20,000 --> 00:23:22,240 And I think we're all under invested in 655 00:23:22,240 --> 00:23:22,980 hard assets, 656 00:23:23,360 --> 00:23:24,420 gold, infrastructure, 657 00:23:25,200 --> 00:23:27,644 agriculture. You know, those sorts of things are 658 00:23:27,644 --> 00:23:30,225 interesting and a lot more conversations around them. 659 00:23:31,404 --> 00:23:33,085 Inflation is another way to fix the debt 660 00:23:33,085 --> 00:23:33,585 problem. 661 00:23:34,125 --> 00:23:35,884 And again, you know, hard assets play to 662 00:23:35,884 --> 00:23:38,210 that, but the other asset class I'm starting 663 00:23:38,210 --> 00:23:39,650 to see people start to think about again 664 00:23:39,650 --> 00:23:41,970 as innovation as an asset class. How do 665 00:23:41,970 --> 00:23:43,269 you get exposure to innovation? 666 00:23:44,184 --> 00:23:46,345 If you're, you know, if you're not Sequoia, 667 00:23:46,345 --> 00:23:48,365 if you're not, you know, a large Ontario 668 00:23:48,825 --> 00:23:51,144 Canadian pension fund and you can't go direct 669 00:23:51,144 --> 00:23:51,804 to Sequoia, 670 00:23:52,279 --> 00:23:54,779 How else can you actually get exposure to 671 00:23:55,559 --> 00:23:58,200 to that asset class that is innovation? There's 672 00:23:58,200 --> 00:24:00,565 been some interesting developments in that space, which, 673 00:24:01,044 --> 00:24:02,585 I've spent some time with recently. 674 00:24:03,845 --> 00:24:06,085 The counter to that though is for the 675 00:24:06,085 --> 00:24:08,504 first time I've noticed a few questioning 676 00:24:08,804 --> 00:24:09,544 the role 677 00:24:10,049 --> 00:24:12,630 private equity plays within their portfolio, 678 00:24:13,809 --> 00:24:14,309 because 679 00:24:15,089 --> 00:24:17,650 I think there's a growing understanding that it's 680 00:24:17,650 --> 00:24:20,674 not immune to the cycle, like, you know, 681 00:24:20,674 --> 00:24:22,855 all asset classes have a life cycle, 682 00:24:23,634 --> 00:24:24,115 and, 683 00:24:24,914 --> 00:24:26,295 it's clearly showing 684 00:24:26,755 --> 00:24:28,900 those characteristics of where it is in its 685 00:24:28,900 --> 00:24:30,119 cycle, which is quite late. 686 00:24:31,059 --> 00:24:33,700 But more perhaps relevant is its role as 687 00:24:33,700 --> 00:24:34,359 a diversifier. 688 00:24:34,674 --> 00:24:36,994 So is it a risk diversifier? Well, unsure. 689 00:24:36,994 --> 00:24:38,454 The key is in the name, equity. 690 00:24:39,714 --> 00:24:42,355 And the bigger issue that folks are starting 691 00:24:42,355 --> 00:24:44,069 to raise now is its role as 692 00:24:45,029 --> 00:24:46,329 a return diversifier. 693 00:24:46,630 --> 00:24:47,450 One of the inherent, 694 00:24:49,669 --> 00:24:52,404 attributes was this ability to smooth returns, But 695 00:24:52,404 --> 00:24:54,265 now as you enter more retail, 696 00:24:54,805 --> 00:24:56,884 investors and you become or get closer to 697 00:24:56,884 --> 00:24:58,505 the regulator, the regulator demands 698 00:24:58,805 --> 00:25:00,904 more transparency and more frequency 699 00:25:01,589 --> 00:25:02,490 of valuation. 700 00:25:03,029 --> 00:25:03,529 Right? 701 00:25:04,470 --> 00:25:06,789 And the more you measure something, the greater 702 00:25:06,789 --> 00:25:09,190 its volatility. Volatility is a function of measurement. 703 00:25:09,190 --> 00:25:11,845 Right? So if an elephant and a mouse 704 00:25:11,904 --> 00:25:14,224 agree to meet 300 miles down the coast, 705 00:25:14,224 --> 00:25:15,684 they'll end up at different pubs. 706 00:25:16,865 --> 00:25:17,684 True story. 707 00:25:18,330 --> 00:25:20,089 The reason is because they use a different 708 00:25:20,089 --> 00:25:20,589 measure 709 00:25:21,210 --> 00:25:23,470 That's the same thing. It's fractal geometry apparently. 710 00:25:23,849 --> 00:25:25,150 They tell me. Mhmm. 711 00:25:25,609 --> 00:25:28,085 And so I think be, you know, be 712 00:25:28,085 --> 00:25:30,164 careful what you wish for. So the more 713 00:25:30,164 --> 00:25:31,384 measurement, more volatility, 714 00:25:31,684 --> 00:25:32,505 higher risk, 715 00:25:32,884 --> 00:25:34,805 less risk adjusted returns. So you know it 716 00:25:34,805 --> 00:25:37,549 would then just start to align more with 717 00:25:37,930 --> 00:25:40,350 public equities, so you wouldn't get the diversification 718 00:25:40,490 --> 00:25:44,110 that you Yeah. Yeah. And now I'm fascinated 719 00:25:44,170 --> 00:25:46,964 by what, BlackRock have just done with Prequin, 720 00:25:47,105 --> 00:25:48,964 and, you know, they're talking about indexation. 721 00:25:49,585 --> 00:25:52,224 That's a very late cycle thing. You know, 722 00:25:52,224 --> 00:25:54,304 could that sort of squeeze out even more 723 00:25:54,304 --> 00:25:55,845 of the alpha element, 724 00:25:57,169 --> 00:25:59,009 which is interesting to watch. It'll be fascinating 725 00:25:59,009 --> 00:26:00,069 to see how that evolves, 726 00:26:00,690 --> 00:26:02,230 because it could force 727 00:26:02,849 --> 00:26:05,329 change in that asset class being about an 728 00:26:05,329 --> 00:26:06,734 alpha play to a cosplay. 729 00:26:07,514 --> 00:26:09,355 So then it's the it favors the big 730 00:26:09,355 --> 00:26:10,954 players again, which I'm not sure what that 731 00:26:10,954 --> 00:26:12,954 does to the industry, but anyway watch this 732 00:26:12,954 --> 00:26:13,934 space, forgive 733 00:26:14,440 --> 00:26:15,899 that. But so that's interesting. 734 00:26:16,679 --> 00:26:18,519 But the flip side of that is I'm 735 00:26:18,519 --> 00:26:20,619 I'm looking for alternative alternatives 736 00:26:21,240 --> 00:26:23,644 that you know, the average return on private 737 00:26:23,644 --> 00:26:25,105 equity at the index level, 738 00:26:25,884 --> 00:26:27,884 we're in the single digits. Of course, there 739 00:26:27,884 --> 00:26:29,484 are some managers that are way beyond that, 740 00:26:29,484 --> 00:26:31,039 and probably some way below, but but the 741 00:26:31,039 --> 00:26:33,279 average, the index is is single digit, and 742 00:26:33,279 --> 00:26:34,559 that could last for a couple of years. 743 00:26:34,559 --> 00:26:36,659 So I'm looking for alternative alternatives. 744 00:26:37,039 --> 00:26:39,359 Now, the key, I think we've mentioned this 745 00:26:39,359 --> 00:26:39,859 is 746 00:26:40,434 --> 00:26:41,494 regional alpha. 747 00:26:42,355 --> 00:26:43,575 You know, I can find, 748 00:26:45,474 --> 00:26:47,634 things in other parts of the world in 749 00:26:47,634 --> 00:26:49,769 public markets that will deliver me a positive 750 00:26:49,769 --> 00:26:50,269 carry, 751 00:26:51,609 --> 00:26:53,470 that will compound over time, 752 00:26:54,730 --> 00:26:56,750 that are liquid, and they're called 753 00:26:57,434 --> 00:26:57,934 dividends. 754 00:26:59,515 --> 00:27:01,694 Now you're not gonna be like the real 755 00:27:01,755 --> 00:27:03,054 popular guy at the party 756 00:27:03,595 --> 00:27:05,650 but you know, you could get rich. You 757 00:27:05,650 --> 00:27:06,849 might be you might be able to pay 758 00:27:06,849 --> 00:27:09,169 for the party. Well, yeah. In retrospect at 759 00:27:09,169 --> 00:27:09,669 least. 760 00:27:10,369 --> 00:27:11,269 I'll take credit. 761 00:27:12,484 --> 00:27:13,924 When you think about it, I mean, I 762 00:27:13,924 --> 00:27:14,505 I I 763 00:27:14,805 --> 00:27:17,525 there's loads of 5% dividend stocks that grow 764 00:27:17,525 --> 00:27:19,710 their dividend higher than a rate of 765 00:27:27,224 --> 00:27:29,785 from your private equity portfolio, and year 7 766 00:27:29,785 --> 00:27:32,445 it's doubled, it's double digit. By year 10, 767 00:27:32,505 --> 00:27:34,445 you know, you've got a pretty good return, 768 00:27:34,825 --> 00:27:35,325 assuming 769 00:27:35,880 --> 00:27:36,460 no leverage 770 00:27:36,919 --> 00:27:39,480 and price and no price appreciation. The current 771 00:27:39,480 --> 00:27:39,980 bid 772 00:27:40,279 --> 00:27:41,720 in some of the foot in in the 773 00:27:41,720 --> 00:27:44,515 FTSE, for example, of private equity buying, 774 00:27:45,054 --> 00:27:47,154 these public assets is 50% premium. 775 00:27:47,934 --> 00:27:49,954 So I think that's a good risk adjusted, 776 00:27:50,015 --> 00:27:52,390 quite safe, slow, boring way, and boring is 777 00:27:52,390 --> 00:27:54,330 good, I don't mind, let's get rich slow. 778 00:27:54,710 --> 00:27:55,609 Which for allocators 779 00:27:55,910 --> 00:27:58,309 who are presumably taking a long term view, 780 00:27:58,309 --> 00:28:00,944 why they're happy enough to invest and lock 781 00:28:00,944 --> 00:28:02,464 their money up for 10 years in private 782 00:28:02,464 --> 00:28:03,924 equity. I think that's 783 00:28:04,304 --> 00:28:06,144 an area where they should be thinking more 784 00:28:06,144 --> 00:28:06,450 about. 785 00:28:07,169 --> 00:28:07,669 So, 786 00:28:08,049 --> 00:28:09,569 Gary, we've covered a lot a lot of 787 00:28:09,569 --> 00:28:10,789 ground, talked about, 788 00:28:11,329 --> 00:28:12,690 you know, some you know, talked about the 789 00:28:12,690 --> 00:28:13,644 Olympics a little bit, 790 00:28:14,205 --> 00:28:15,805 talked about some regional things that are going 791 00:28:15,805 --> 00:28:17,484 on, some asset class stuff, or anything that 792 00:28:17,484 --> 00:28:19,484 we haven't covered that you think, you know, 793 00:28:19,484 --> 00:28:21,950 might be interesting. We we we haven't covered 794 00:28:21,950 --> 00:28:23,869 AI in a meaningful way. I mean, how 795 00:28:23,869 --> 00:28:25,470 how can we have a conversation and and 796 00:28:25,470 --> 00:28:26,529 not talk about AI? 797 00:28:27,710 --> 00:28:29,650 So artificial intelligence 798 00:28:30,394 --> 00:28:32,894 is the antidote to 799 00:28:34,075 --> 00:28:35,054 natural stupidity. 800 00:28:37,759 --> 00:28:40,179 Well, then there's hope for me. Excellent. 801 00:28:40,720 --> 00:28:42,660 And that's why I use it so much. 802 00:28:44,559 --> 00:28:46,734 Look, so, right, I guess there's a couple 803 00:28:46,734 --> 00:28:49,275 of questions here, you know. Where are we 804 00:28:49,414 --> 00:28:51,734 in the cycle? You know, do we keep 805 00:28:51,734 --> 00:28:53,034 buying AI stocks? 806 00:28:55,009 --> 00:28:56,690 I kind of feel we're 807 00:28:57,409 --> 00:28:58,389 I don't think it's 808 00:28:58,690 --> 00:29:00,049 over, but I think we may have run 809 00:29:00,049 --> 00:29:02,115 a bit too fast too quick. I think, 810 00:29:02,115 --> 00:29:03,875 you know, we've partied pretty hard, and I 811 00:29:03,875 --> 00:29:06,455 think there's a period of sobriety about to 812 00:29:06,595 --> 00:29:07,095 emerge. 813 00:29:07,955 --> 00:29:09,475 For people who have lived through the dotcom 814 00:29:09,475 --> 00:29:11,075 bubble, we may have seen this before. Is 815 00:29:11,075 --> 00:29:12,420 that a Yeah. I I don't think this 816 00:29:12,420 --> 00:29:14,019 is a bubble. Yeah. And so far that, 817 00:29:14,019 --> 00:29:15,700 you know, if you look at valuations they're 818 00:29:15,700 --> 00:29:17,299 they're above fair value for sure. I don't 819 00:29:17,299 --> 00:29:18,900 think anyone would contest that, but you know 820 00:29:18,900 --> 00:29:19,720 I've seen them 821 00:29:20,194 --> 00:29:22,994 far higher above any estimate of what fair 822 00:29:22,994 --> 00:29:23,734 value is. 823 00:29:25,154 --> 00:29:27,815 But I think the narrative needs to change. 824 00:29:28,579 --> 00:29:30,500 A couple of reasons for that. I mean, 825 00:29:30,500 --> 00:29:32,579 at the moment it's all been about capex. 826 00:29:32,579 --> 00:29:34,819 I mean, the amount of capex spent from 827 00:29:34,819 --> 00:29:36,835 the MAG 7, it's extraordinary. I mean, you 828 00:29:36,835 --> 00:29:38,755 know, what the MAG 7 are spending on 829 00:29:38,755 --> 00:29:39,255 CapEx 830 00:29:39,954 --> 00:29:41,634 as a percentage of the S and P 831 00:29:41,634 --> 00:29:43,394 500 is, you know, it's about a 5th. 832 00:29:43,394 --> 00:29:45,575 It's just it's it's eye watering. It's enormous. 833 00:29:46,009 --> 00:29:48,110 But, of course, we need to ensure that 834 00:29:48,490 --> 00:29:50,430 those investments deliver a return. 835 00:29:51,850 --> 00:29:54,644 Starting to see some some question marks around 836 00:29:54,644 --> 00:29:55,944 the consumer applications 837 00:29:56,325 --> 00:29:58,984 and the return profiles of of of them. 838 00:29:59,365 --> 00:30:01,525 We're starting to see, as you always do, 839 00:30:01,525 --> 00:30:02,025 more 840 00:30:02,359 --> 00:30:04,059 competition enter that space. 841 00:30:05,160 --> 00:30:06,839 Those that provide the picks and shovels to 842 00:30:06,839 --> 00:30:08,839 that infrastructure spend, obviously, is still doing quite 843 00:30:08,839 --> 00:30:11,944 well, but we're starting to now start starting 844 00:30:11,944 --> 00:30:14,284 to see a few more entrants like Cerabras, 845 00:30:14,505 --> 00:30:16,125 who had just announced their IPO. 846 00:30:16,505 --> 00:30:17,404 Apparently, they're 847 00:30:17,784 --> 00:30:20,309 a credible threat to to NVIDIA. I don't 848 00:30:20,470 --> 00:30:22,549 that's a headline. There's nothing I've got nothing 849 00:30:22,549 --> 00:30:24,309 to back that, but, you know, they might 850 00:30:24,309 --> 00:30:26,650 chip away at their dominance. Forgive me. 851 00:30:27,035 --> 00:30:28,494 Bad. Well played. 852 00:30:29,835 --> 00:30:32,015 So that's it. Signals, I'm always 853 00:30:32,315 --> 00:30:33,914 signals are always interesting in terms of where 854 00:30:33,914 --> 00:30:35,195 we are on the hype cycle. A couple 855 00:30:35,195 --> 00:30:36,255 of things happened recently, 856 00:30:36,960 --> 00:30:38,640 and it's for you to decide whether they 857 00:30:38,640 --> 00:30:40,419 are positive or negative signals. 858 00:30:41,359 --> 00:30:43,940 We had the first I'd seen a company 859 00:30:44,000 --> 00:30:47,045 change their name to Ad AI. Company called 860 00:30:47,045 --> 00:30:47,545 Tempus. 861 00:30:48,325 --> 00:30:51,045 It's now Tempus AI. It IPO'd recently. It's 862 00:30:51,045 --> 00:30:52,965 actually done quite well, but, you know, that 863 00:30:52,965 --> 00:30:54,105 might give people 864 00:30:54,579 --> 00:30:56,180 some muscle memory of what happened back in 865 00:30:56,180 --> 00:30:57,779 2000. We saw a number of I think 866 00:30:57,779 --> 00:31:00,099 Viacom from memory may have changed or tried 867 00:31:00,099 --> 00:31:02,615 to change its name to dotcom. And so 868 00:31:02,615 --> 00:31:04,134 that that that's one of those signals, 869 00:31:05,015 --> 00:31:06,695 for you to decide whether it's positive or 870 00:31:06,695 --> 00:31:08,535 negative, and I think the share price will 871 00:31:08,535 --> 00:31:09,195 tell you. 872 00:31:09,734 --> 00:31:11,599 We've had the, you know, outlander 873 00:31:12,460 --> 00:31:14,640 outlandish, valuation call on Nvidia. 874 00:31:15,180 --> 00:31:16,859 Unfortunately, it comes from someone I really respect 875 00:31:16,859 --> 00:31:18,220 and think is very, very good. And if 876 00:31:18,220 --> 00:31:21,204 you read his rationale, it's it's incredibly thoughtful. 877 00:31:21,585 --> 00:31:23,744 And that's James Anderson that used to run, 878 00:31:23,984 --> 00:31:25,984 from Bailly Gifford, you know, early investor in 879 00:31:25,984 --> 00:31:27,779 Tesla and all these sorts of things. And 880 00:31:27,779 --> 00:31:29,779 he, you know, has made obviously, there are 881 00:31:29,779 --> 00:31:31,539 some assumptions and these assumptions would have to 882 00:31:31,539 --> 00:31:32,940 hold true, but if you do, he's got 883 00:31:32,940 --> 00:31:34,440 a valuation of $50,000,000,000,000 884 00:31:35,220 --> 00:31:36,340 which is more than the S and P. 885 00:31:36,340 --> 00:31:39,244 So that's being caught by people, the headline. 886 00:31:39,464 --> 00:31:41,065 But of course, as always, if you read 887 00:31:41,065 --> 00:31:42,744 what's behind it, it's very rare. And he 888 00:31:42,744 --> 00:31:44,505 doesn't give a he gives a low probability 889 00:31:44,505 --> 00:31:46,539 of that outcome, but the headline doesn't know 890 00:31:46,539 --> 00:31:47,039 that. 891 00:31:47,819 --> 00:31:50,240 And we started to see some questions around 892 00:31:50,380 --> 00:31:53,339 use cases not delivering up delivering on the 893 00:31:53,339 --> 00:31:54,319 hope. You know, Microsoft 894 00:31:54,715 --> 00:31:57,375 had a few clients drop their Copilot recently. 895 00:31:58,394 --> 00:32:01,855 I think Meta dropped their celebrity AI chatbot, 896 00:32:02,099 --> 00:32:04,599 you know, having Tom Bradley. Tom Bradley? 897 00:32:04,980 --> 00:32:07,380 Tom? Tom Brady. Tom Brady, you know, talk 898 00:32:07,380 --> 00:32:09,460 to you on chatbot for your that that's 899 00:32:09,460 --> 00:32:11,315 pretty cool. But anyway, they've they've canned that. 900 00:32:12,274 --> 00:32:13,095 And the, 901 00:32:13,634 --> 00:32:15,315 what's the think tank that's come out, done 902 00:32:15,315 --> 00:32:17,075 the survey, and showed that most people who 903 00:32:17,075 --> 00:32:19,174 have been given targets by way of productivity, 904 00:32:19,819 --> 00:32:20,720 about 70% 905 00:32:21,019 --> 00:32:22,619 what's the name? Oh, I have to come 906 00:32:22,619 --> 00:32:24,619 back. I'm in the show notes. Of the 907 00:32:24,619 --> 00:32:26,079 the think tank. About 70% 908 00:32:26,539 --> 00:32:27,599 of people surveyed 909 00:32:27,934 --> 00:32:29,894 have no clue how they're gonna be able 910 00:32:29,894 --> 00:32:31,634 to use AI to get to those productivity. 911 00:32:31,695 --> 00:32:34,434 So there's a bit of of of of, 912 00:32:34,575 --> 00:32:36,183 you know, questions starting to be asked. I 913 00:32:36,183 --> 00:32:36,247 think we need to see new applications emerge, 914 00:32:36,247 --> 00:32:36,310 which they will. But until we get to 915 00:32:36,310 --> 00:32:36,994 that point, I think some 916 00:32:41,519 --> 00:32:44,240 sobriety and some consolidation is probably is probably 917 00:32:44,240 --> 00:32:45,755 quite warranted. Yep. 918 00:32:46,375 --> 00:32:48,075 Yeah. Certainly, we're, you know, 919 00:32:48,855 --> 00:32:51,835 trying to move from that that hype cycle 920 00:32:51,894 --> 00:32:52,394 to, 921 00:32:53,414 --> 00:32:55,899 tangible benefits is is really what what we're 922 00:32:55,899 --> 00:32:57,899 gonna have to do. And I just think 923 00:32:57,899 --> 00:32:59,500 about it from my own perspective as well. 924 00:32:59,500 --> 00:33:00,159 I mean, 925 00:33:01,019 --> 00:33:01,740 you know, one of my 926 00:33:02,525 --> 00:33:05,345 whenever I'm asked about, you know, the industry, 927 00:33:05,404 --> 00:33:07,404 in our industry, I, you know, I often 928 00:33:07,404 --> 00:33:09,690 say, look, you know, the first challenge we 929 00:33:09,769 --> 00:33:11,609 face is the data. And we've gotta get 930 00:33:11,609 --> 00:33:12,269 the data 931 00:33:12,569 --> 00:33:14,409 in the right shape, form, and place before 932 00:33:14,409 --> 00:33:15,950 we can apply a clever, 933 00:33:17,690 --> 00:33:19,615 LAM to it. So that's that's you know, 934 00:33:19,615 --> 00:33:21,394 the first challenge. I don't think we're there. 935 00:33:21,454 --> 00:33:22,654 At the industry level, I don't think we're 936 00:33:22,654 --> 00:33:23,474 there yet, 937 00:33:23,934 --> 00:33:25,295 but I think we're a lot closer than 938 00:33:25,295 --> 00:33:26,974 what we were 5 years ago. So that's 939 00:33:26,974 --> 00:33:27,795 the first challenge. 940 00:33:28,369 --> 00:33:31,509 The second challenge is we're a really regulated 941 00:33:31,809 --> 00:33:33,650 industry, and you know if there's ever a 942 00:33:33,650 --> 00:33:36,049 steward's inquiry and they ask you to show 943 00:33:36,049 --> 00:33:38,275 you're working, it's very hard to do and 944 00:33:38,275 --> 00:33:40,835 you can't The answer comes out of a 945 00:33:40,835 --> 00:33:42,434 of a black box. And the way those 946 00:33:42,434 --> 00:33:44,674 neural networks are stressed. Until we solve for 947 00:33:44,674 --> 00:33:45,494 that hallucination 948 00:33:45,910 --> 00:33:48,549 point, I think that is a challenge for 949 00:33:48,549 --> 00:33:50,809 our industry where we can't tolerate 950 00:33:51,590 --> 00:33:52,090 error. 951 00:33:54,125 --> 00:33:55,484 And then the final thing is, 952 00:33:59,404 --> 00:34:01,424 to assume there is insights 953 00:34:01,890 --> 00:34:04,930 from your data you must first assume your 954 00:34:04,930 --> 00:34:05,990 data is insightful. 955 00:34:06,450 --> 00:34:07,650 I had someone call me recently and said, 956 00:34:07,650 --> 00:34:09,010 Gary, we could take all the stuff you 957 00:34:09,010 --> 00:34:10,369 have written on the weekend and we could, 958 00:34:10,369 --> 00:34:12,284 you know, put an LLM on it. 959 00:34:13,144 --> 00:34:14,585 What are you going to find in that? 960 00:34:14,585 --> 00:34:16,364 There's no there's nothing insightful. 961 00:34:18,744 --> 00:34:19,644 So anyway 962 00:34:20,630 --> 00:34:22,710 that's me on AI. There you go. Well, 963 00:34:22,710 --> 00:34:23,529 I think that's 964 00:34:23,829 --> 00:34:25,989 sounds like a great way to, to to 965 00:34:25,989 --> 00:34:27,289 wrap up our conversation. 966 00:34:27,945 --> 00:34:29,385 But, Gary, I really appreciate you taking the 967 00:34:29,385 --> 00:34:31,724 time. Pleasure. Always great to have you on. 968 00:34:31,945 --> 00:34:33,545 Looking forward to seeing how some of these 969 00:34:33,545 --> 00:34:35,625 themes start to play out over the coming 970 00:34:35,625 --> 00:34:37,179 months and until we can have you back. 971 00:34:38,300 --> 00:34:39,980 But as always, a big thank you to 972 00:34:39,980 --> 00:34:42,800 our listeners. Really appreciate everybody's time and attention, 973 00:34:43,659 --> 00:34:46,094 and thank you for joining us on MarketPulse 974 00:34:46,234 --> 00:34:47,054 by FastForward. 975 00:34:47,355 --> 00:34:49,034 Look to look forward to seeing you on 976 00:34:49,034 --> 00:34:49,855 our next episode.