Friends Reunion 3 – Five Allocators Riff on Investing (EP.454)

25:55I just talked to a manager who didn't even know what the 475 election was, and they had taken it. I think at the end of the day, when we talk about behavior, if you're being paid incentive off of your gross return, that's what you're going to focus on. So for those who have 475 blank stares, why don't you explain what it is? It allows you to get around the wash sale rule every year on December 31st. Your whole portfolio is mark to market. So therefore, you cannot have any long -term or you can't have any unrealized. Everything is short -term realized. It's actually all ordinary income, which is getting worse because you can't take losses to offset it.

26:30Everyone generally is quiet these days about public equities. So all this talk about privates. What are you thinking about active versus passive? On the U .S. equity side, we've taken a more conservative approach that we just want to be in like larger cap stocks now, even though that was where you should have been. But more just because it's such an uncertain world and there's all these paths that we could be taking. I just would rather be there and still actually active managers today because we always say being passive, you're still active. You're actively choosing because it's so concentrated to own those securities.

27:01I think in the non -U .S. markets, we continue to find compelling value from being active in more concentrated positions. The only big shift in our world is really the rise of ETFs, which we're happy when our managers decide they want to do an ETF because they're fantastic vehicles for taxable clients. That's been a huge area that's actually helping us. So we'll have the exact same manager we had before, but because they're in an ETF, it's helpful to clients from that perspective. I think you're seeing on some of the more long only, but disguised as hedge funds, that the fees are coming down. With returns coming down, people are starting to push back.

27:41You're seeing a lot more zero and 30, more alignment where you're not going to be able to get away with the one and a half or two on the long only. In general, we've focused much more on what bets we're making away from the benchmark, just to be very, very clear and confident that those are bets we want to make. And in some cases, we've taken certain bets off or we've taken them down a bit. So we have a bit more of Casey's sort of large cap US exposure. I think we are potentially on the verge of a lot more dispersion globally, a lot more dispersion in markets. There's an opportunity for the things in the U .S.

28:22that haven't done as well from a small cap basis and certain more value looking things. I think there's an interesting case to be made for EM right now in terms of EM really runs when commodities run. And I think we could potentially be in the early stages of commodities, just the demand being high for them. Marita, two years ago, you hinted at being interested in Africa. Africa up about 30 % this year so far. And we are in that manager, thankfully. What's the case that has you continue to be excited about African equities? The original case for that was just value and no one was looking at it.

29:01And there was a total dearth of capital there. Africa tends to do quite well when the commodity cycle is strong. They benefit. There's an argument to be made that it is an easier China play than China itself. There's an argument to be made. I think there are a couple things that could benefit it, and you haven't seen a ton of capital flow in yet. You're starting from a low base. Brad, any thoughts? Unfortunately, I feel a little like consensus because I agree with a lot of what's been said. If everyone else is different and I'm just agreeing with all these smart people, it's okay. We are passive in US large cap.

29:36That has worked out really, really well. We have been reducing that exposure. We've been overweight non -US, all active. That's actually worked out well too, especially this year. I mean, they didn't work out well at the same time. We're also reducing that a little bit, but not nearly as much. We have not done Africa. We have a different view on frontier markets and what the risk return is and liquidity and all the rules. You're taking a lot, a lot, a lot of risk and you don't know about repatriation of currencies, liquidity of the markets. And at the end of the day, it's fund flows that drive a lot of those returns.

30:10Basic commodities have done really well this year. That's really good for emerging markets, particularly emerging market countries that are both central banks are easing and they're big exporters of basic commodities. But for us, that's a cyclical play, not a long -term hold. And I worry about what the long -term risks are in a lot of these countries if we could do it tactically, but it's hard to do tactically given the liquidity in those markets. And most of the managers tend to be believers, not tactical traders of those markets. But there are things like Korea that we've liked a lot, value ups for real, and it's working great this year.

30:46And we've been leaning into that in Japan and obviously not emerging markets, but there are places you can be outside the US that have been phenomenal this year. But I think the biggest opportunity, both alpha and relative valuations in U .S. small cap. I'd agree with that. We're going to take a quick break in the action to tell you about SRS Aquium. Want to make sure your M &A processes aren't stuck in the past? Partner with a company that's been defining the future of dealmaking for nearly two decades instead. When it comes to M &A innovation, SRS Aquium has reshaped the way that deals get done, streamlining processes for maximum efficiency and minimum headaches.

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32:21We're on the same page as Meredith in terms of emerging markets. A next level too is you have to be disciplined about selling high and buying low. You just have to be really careful about when things are running up because it is true, emerging markets tie to commodities. That tends to run faster. We made a lot of money in the early days, in the mid -90s, early 2000s, playing off the volatility of our managers. The one nice thing about global equities is we're long -term investors, but you can trim on the margin, add to your other managers. Things are kind of running up or coming down. This is one of those markets, even managers actively saying, I'm going to look at things that aren't tied to tariffs, then that all gets bid up.

32:58You have to have some sort of mechanism to be disciplined about. How do you guys think about premium? What type of return expectation do you think people should be looking for or accepting? I'm going to give you the terrible answer, which is it depends. In something like small cap, I want a real premium, which you're getting today. And I want a very high expected alpha. And I want that alpha to come from fundamental research that is picking winners that we can then hold for a while that are going to be long -term winners. I want to get paid that premium two ways, buy and hold. If we're going to trade or have a manager who's involved in commodities or emerging markets, I want them to think like a trader.

33:37We have been able to find managers that upside downside capture is really skewed because they're really good at those markets. For there, I'm not thinking as much about what is the premium I'm getting to buy that and more of the how much volatility is there. And can we capture that volatility versus just be penalized by that volatility? I think you hit on this key thing that it's rare when alpha and beta line up. Alpha, you've always had to some degree in the non -U .S. markets because they're inefficient. That's why we've always liked them. But you now have the beta. You have the valuation piece.

34:09And so you can get those two pieces like Brett said together. It's compelling. I think the betas are more interesting than they've been in 15 or 20 years because of not just the entry point, but because of the deglobalization and you've got a declining correlation of those markets. And the only free lunch we get as allocators is diversification. If I can have international markets that are decoupling with the US market, that's just a portfolio benefit that's free to us. There aren't a lot of those around. Sorry, Ted, you asked the questions. I don't know I felt him staring at me You're very good at this John What are you guys excited about?

34:50I'm excited it's my anniversary today I just want to get that out there Thank you for Natalie Shout out to Nat for letting Brett be here Without her where would we be? That was really great show this I'm excited my baby's graduating from high school tomorrow Shaking up kids going to college And mine graduated last week Here's what I'm hopefully looking forward to. And I hesitate to put this out into the world because it feels like that might not happen. But the free lunch on diversification might come back because it hasn't been that way for, it felt like a long time. You had to have the bet to truly keep up.

35:27I'm happy to underperform when the markets are running, if we can protect on the downside, but to year after year feel like you can't keep up is a lot. And that's what I'm looking forward to and happy about? My new BBR pen is one thing I'm excited about. Leave that when it's over. Yes. And where's the camera? We're not giving that away. I'll take NIL dollars for that. Areas that we're looking at are, we do a lot in the defense tech space, obviously drones. I think it's a lot more difficult than nine and a half years ago when we first got in. A lot of players Figuring out how to manufacture cheap, inexpensive drones is one area within there.

36:09We're spending time on nuclear, trying to figure out picks and shovels, things like standard nuclear, supplying the fuel. We think that that trend is one to stay. And if we can figure out the tailwinds, try and take advantage of that. I'm actually really excited about real estate, both on the equity and credit side. If you take away all the macro noise, real estate can still be an area. disconnected from that. I think a lot of people forget 2022 when rates were high, they've come down, they've not come down enough. A lot of capital structures don't work. We forgot about the wall of maturities coming due.

36:43We're seeing groups buying things very small, one -off, like self -storage, for example, and then rolling it up all into a portfolio and handing it to everyone who's running interval funds and other things for purchase. You're seeing a lot more price realization, things coming to market and therefore deal activity. If you're a veteran and you've been in the industry through multiple cycles, I think you have the conviction to move forward faster. Sourcing is key in this situation because you want to be that phone call with the broker at the small end who's like, I got to move this quickly. These guys need liquidity.

37:14Can you do it? People have been through multiple market cycles and understand that and have the deep relationships from a sourcing, have a huge advantage. Are there particular subsectors? Multifamily, we're doing it in self -sorage. We're doing it industrial. We're seeing it across the board. The other area we were finding is just niche real assets. For example, we're doing a thing on container ships. A lot of them are not coming to the US. It's within non -US ports. Your downside is scrap metal, which is actually pretty compelling. Your upside is huge. So there's a lot of niche -y opportunities we're finding that are really compelling in this marketplace.

37:48I'd agree with a lot of what's been said on the real estate side. I completely agree. Public, private, credit, the niche -ier areas. In addition to the ones Casey mentioned, we're spending a lot of time and have done work and have made some investments, industrial outdoor storage, RV parks, all kinds of things like that. On the infrastructure side, rail cars, barges have been really interesting for us. One of the places where we see public, private, and credit incredibly dislocated, unloved, and where we think there's a huge opportunity is biotech. It has been such a bubble through the pandemic where biotech and vaccines were going to solve everything.

38:23And now we've had a massive dearth of capital for years. The public markets cratered in 22 and have yet to meaningfully bounce. The capital markets, except for brief windows, have not been open. No one's reallocating to venture capital funds. It's incredibly unloved. You've got an FDA that doesn't think vaccines should be around. Drug development has really gone sideways. And then you've got a massive decrease in investment in basic science here in the United States. And so you got to be able to look outside the US. The story is terrible, but we think it's going to climb that wall of woe. And back to entry point, you've got companies with great management teams, great science, cash on the balance sheet and trading at massive discounts to cash or are desperate for money.

39:06And you can structure private credit transactions that are really equity transactions. These are pre -revenue companies, but where you've got massive seniority and wonderful preferred returns and really neat structures. And so you can buy that through public companies, VC, private equity, and private credit. There's all kinds of things you can be doing in biotech today. Casey mentioned the two letters that everyone talks about these days, AI. Thoughts on how are you using AI in your investment processes? Right now, it's early innings. Most of the stuff we've either been able to do or is in our roadmap to do, I would say, are more efficiency enhancements.

39:45first drafts of investment committee memos, sorting of presentations, creating analysis of return streams. That's stuff that a junior mid -level professional does, and it takes some time and it makes them more efficient. That's where we are today. I think we're a little ways away, but I'm much more optimistic that we're going to be able to do things. I mean, I think what GA is doing is really cool in terms of having an AI bot on their investment committee, thinking about investment decisions they made in the past and having that institutional memory in a bot. I don't think we'll get there if ever, but things like triaging managers, understanding what our preferences are, and to be able to make those kind of initial spend more time, not spend time decisions.

40:27The other place that I am really optimistic are things that are time consuming, but thoughtful, like rebalancing portfolios or flagging things that are out of balance. You can do that through analog software that is just looking at equations and rebalancing, but doing it more thoughtfully, especially when you've got things like taxes and liquidity, which make those rebalancing decisions more complicated. I'm really optimistic there. We just hired a young guy who just finished up a project for a major endowment, how they do it. We're in the early innings, Brett's point about efficiencies, trying to figure it out.

41:03Somebody said, if you're over 50, you basically use chat GPT as an enhanced Google. And I think it's great. With some managers that we've been with for two decades, trying to figure out how do we take all that past letters, the past data? How do we summarize it? How do we figure out biases? How do we hold ourselves accountable? I think there's going to be tremendous opportunities. We'll have to see. We're even earlier than you guys. Remember, I work for a church. Very, very, very slow. I am extremely positive about the opportunities. I remember at one point in like 2000, 2001, a manager we were meeting with was like, it's not the internet.

41:43The internet is just a means to what is going to come. And it's just a means to what is going to come that's going to be so much more efficient. And ultimately, I think, get so embedded in everything that everyone does that it's hard to imagine right now exactly how it actually plays out economically. I found after talks with people at varying age levels, we were hitting some roadblocks and we were really focused on starting bottoms up. What are one off things we can do? So we created a committee within our wealth platform that was made up of the most recent grads and we had them do work on how they're using it.

42:18People are using it more than we even realize. We wanted to both have a way to say, give guidance. You shouldn't be using it in that way or you should. But also learn because our brains can't possibly come up with the things they're coming up with. That has been amazing. And they've really taught us new ways to think about it. And we've been able to mentor them on certain things that shouldn't go into the AI or that you have to check it. It hallucinates. Once you come out, it's really important. And that it's most powerful we've found when we use our own data, when we're putting in our own information and asking for things on top of that.

42:51This has been like a huge initiative across the firm, thinking about AI and how it integrates across. So they're doing a lot of cross -functional contests and they have groups present proposals and then sharing that information. And then lastly, the most important thing is data architecture. Putting on a new software is a big exercise. What's most important actually is your data and your data architecture, because the switching costs are going to be going down, down and down. So focus more on that aspect of it and then come up with ideas how to use it. I agree completely. We have spent so much time the last several years on data.

43:25And it goes back to, one, we've got some regulatory constraints. We can't use ChatGPT in the office. And there's a lot of LLM that we're not allowed to use. So the key is, what can you learn on your own data? But you can only learn off of 25 years of our data if your data is organized really, really well. And there's a lot of advantages to that. Part of it's switching vendors. A lot of it is being able to train models on our own decision -making in our own portfolios. What are some of the best practices or best use cases you've seen at managers with AI? I don't know that I've heard one yet. Things like lending against hard assets.

44:03A lot of that is more smaller balance loans. There's a lot of underwriting to that. The underwriting process might have software that scores something first, but if that score can be a LLM that is looking at your data and outcomes and learning, it will do that better than a human. Compared to 25 years ago when we started doing this, you're all in more senior leadership seats than you were 10 or 15 years ago. And I'd love to hear how you think about leading a team differently now from how you did in the past. Try to have a lot more patience. You're not throwing things around the office as much?

44:45Yeah, try not to throw things. Best lessons are just no two people are the same. I'm going to sound like the old guy, but this generation, it's really understanding what motivates different people. What I found is that it's network, network, network. Talk to any 22 -year -old, and that's all they want to build. You hear this in interviews. I'm thinking, don't mention network. If you're interviewing someplace, I also have a problem as I look back and I look at a 35 -year -old manager, I go, I'd never give them money. They're too young. And then you look at Andreas Halverson, 99, when he started.

45:19So it's a little bit of adapting. It's a little bit of perception. It's a little bit of taking a deep breath and trying to think things through a little bit and understanding that things are more individualistic than the straight management style. Is there an irony in your telling people not to focus on their network?

45:40I just give them my network. So, you know, we all share, but good point. I need to be better at and try to spend more deliberate time thinking about positive feedback. I'm the kind of person who just puts my head down and does the work and I don't care as much about feedback, but I realize that I'm an N of one. I need to be more thoughtful about that in terms of the team and thinking about, okay, where are opportunities to elevate the work that someone did in front of more people than just me? And where can I let this person step up and get positive feedback from me and from others in a more public setting versus assuming we're all going to come and put our heads down and do our work?

46:25There's no better lesson than raising kids, and I'm in teenage land right now, that people, individuals, human beings are motivated by different things. That's probably the biggest thing I've learned over the last 25 years. Also, just having had my own private partnership, that was really strong and amazing because we each brought something very unique, both in our knowledge, but also in our vantage points and the way we attack problems. There's a benefit to having people being different. The other piece that we're really focused on right now is excellence and hiring. We've always hired really smart, capable people, and we have an amazing team with longevity.

47:02We're increasingly also wanting to make sure that the next person we add incrementally every time is the strive for excellence, not just excellence in one area like grades, but excellence in other areas that you've shown resiliency and perseverance pushing through. If we can find that type of person combined with varying vantage points of the team together, we're just going to come to better answers because you get much better debate out of that. You get the ability to debate those things coming together. We're like highly focused on right now. We've always had a management philosophy for most of our history where the concepts are giving somebody the responsibility for the outcomes and giving them the authority to make those decisions.

47:45Those go hand in hand and then you measure those outcomes. That doesn't mean putting someone on an island. So what I find I'm spending more and more time on, even though you've given somebody the authority to drive a process, is coaching them to come to decisions on their own faster. It's pattern recognition. History doesn't repeat itself, but it rhymes. I've not invested in that particular area before, but it looks a lot like these three mistakes we've made in the past. Here are the things we really should worry about before you decide to move forward. more times than not, that helps them figure out that it's really special because those three things that I brought up aren't impacting or listen, yeah, you're right.

48:27These are some things I didn't think about. I appreciate that I got to dive into it and I got to say no faster. It's a lot of coaching. The other piece related to that, that I've found and continue to work on developing the skill because I find it is much more effective in that regard in terms of the coaching is instead of telling them, asking the questions so they answer it because I've found frustration sometimes with when I've told. It's not necessarily like parenting. Ask the question that helps them on it. One of the things we've been talking about is how do we help younger people in the office learn to listen?

49:02And we have all the sayings. Listen, understand, don't listen or respond. You have two ears, one mouth, use them proportionally. Our new one is invert the ratio of question marks to periods. It's really trying to get them to step back and think about what's the question, what don't they know? That has been something that I've been spending more time trying to help them do. I haven't been fully successful. Again, it's individuals. I think that that's the most important thing, especially with these today. Everybody's just taking information. They want it. They want it immediately. And they're not stepping back and listening and reading and saying, what questions have I not asked?

49:41We're actually doing sales coaching. I'm all in on it. One of the key things they say, communication is tough at every level, kids, relationships, managers, teams, and people often assume they know what the question is. Or if you're telling someone, you don't get any feedback. Asking questions, which is kind of what we all do for a living with our managers, is one of the key things to getting at making sure you're actually on the same page, which I've also realized in so many areas, including work, sometimes you think you're on the same page and you're not. And that can lead to a lot of frustration, especially when you're in the leadership position.

50:18I love asking the questions because you learn so many more things from that. The other thing that pulls in AI too, I was talking to someone and they were talking about like, oh, it's going to make it so much easier and we're not going to have to spend so much time training people. I actually totally disagree. What we do is an apprenticeship business. And I don't think that AI is going to change that. Ultimately, the most effective are these interpersonal, how do you ask questions, hear the answer and realize what the next question should be from what you've heard. Nuance, right? The nuance piece of it.

50:49What I worry about, though, I completely agree with the premise. And that's clearly how we all were trained and will be training the people who will ultimately replace us. But if there's fewer junior people. If what we're really using AI for early is efficiency enhancements, that just means in the future, I'm going to be hiring less junior people because the junior people I have are going to be more efficient. That's going to make their jobs better and they're going to be able to think more and I can train them more, but I'm going to have a lot fewer people going into that pipeline. It puts a premium on hiring the right people, which I hope we do.

51:24And I have confidence that we're doing, but we're just going to have a lot fewer people at the entry levels of our industry. That's going to have some negative ramifications down the road. Where are they going to go? Right now, they're just unemployed. Recent graduate unemployment is as high as it's ever been. We can talk about kids going off to college. I'm more worried about my kids leaving college right now. We have seven interns this summer. They all are worried that they're not going to have jobs after college. Appropriately. Casey, that gets back to this question about sales, because as much as all the seats are buying investments, everyone's in the sales business.

51:57What have you learned from doing the sales training that we may not have been exposed to? A lot of people feel like a person is inherently good at sales because they're outgoing, they form connections, there's amazing networking. I think that's been completely debunked. There actually is this whole concept of a framework, a framework for the initial meeting, a framework for follow -up, a framework for questioning. We have this thing, a pause, in terms of you get a tough question. The one other thing that I learned that is really helpful for us, it's one of my internal guys calls my head of business development, the expert issue, which is someone asks a question.

52:32We get this example like gold and you start saying why you do or do not agree with gold versus trying to first understand why is the client asking you about gold? Gold's a good one because there's so many different ideas of what people use. This sales coach we use calls it you're focusing on the bridge, which really quickly means You're standing on one side. It's gloomy, rainy and gross. You have to walk over a bridge. And on the other side of the bridge is rainbows and puppies. He said, you guys are getting stuck in talking about how amazing your bridge is. We use the best engineering. We paid top notch.

53:06We did this, this and this. And our bridge is so much better than the other bridge. But nobody actually cares. They just want to walk over the bridge to get to the rainbows and the unicorns. Teaching the team to stop getting into that bridge unless you're asked to get on that bridge and focus more on understanding what the client's actually trying to ask you. Goes to listening and understanding. Exactly. I have a couple of closing questions I'm gonna ask. Before we do that, curious if there are any questions or topics you have of each other that you'd like to probe to either learn more or share some insight that you've had of late.

53:38There are two that I've been grappling with. What is 60 -40 gonna look like over the next five, 10 years? We have a lot of equity exposure in our portfolios. We're trying to be thoughtful about how we get it. interest rates are at a level that are a lot more interesting than they've been over a lot of our careers. They may be going higher. I'm not sure that's a prediction. And if higher interest rates mean lower multiples, that's a really bad outcome for 6040. My premise is I'm a little worried about traditional portfolio construction. We've been leaning into, I think we all are with non -traditional.

54:08And the other one is the dollar. At the end of the day, we own dollar -denominated assets or assets where I look at performance converted back to dollars. We think about that as it relates to asset liability? What's the money for? Asking clients that question. Whatever it's for, it's charity, intergenerational lifestyle that is spent in dollars. So I have to worry about inflation and I have to worry about returns, but I think about it in dollars. And we've really had the exorbitant privilege of the dollar being a reserve currency. Do I have to worry about that or not going forward? I agree with you.

54:43I have concerns about the dollar too. and I try to separate my concerns about the dollar in terms of why I have them. Right, exactly. Yeah, so there's that. Not that it's a good bridge. Separate from that, I don't know, at least where we sit today, what has the scale. Some people say it's Bitcoin and whatever. There's nothing right now that even comes close, even if you said it's going to be these three things or these two things, whatever. My concern about the dollar then is more near term in terms of, yeah, it's pretty overvalued. It's out of run of being overvalued. I think it's a fair consideration that you should have diversification away from it, but that it's still, for all intents and purposes, the major form of currency in our portfolio.

55:30Dollar thoughts, Casey, John? That's the question mark. I think when Liberation Day was announced, we were down here some at the night that bond yields started trading off. and I was on with my head of credit, Alison. I'm like, this is feeling like 08 when the tarp didn't get passed right away in the house where things were about to like fall off a cliff. October 3rd. So as the bond yields are trading, I'm like, oh my God, who's dumping our debt? That's the question. And then we always say there's not another one, but there's lots of easy reasons for why they might start dumping our debt, which then cascades into all of these other things.

56:02The question I have is with the democratization and the fees, because you're paying higher fees to administer everything else for that, it costs more. Are those returns and correlations going to be compelling enough to get the diversification that we're able to get with our sized clients by going multi -asset class? Because we have a huge advantage to be able to do that in a big way. That's things we're thinking about on the 60 -40. I always come back to Brett Barth on this, actually. And when I quote the, you know, if I'm happy with everything in my portfolio, I've done something wrong. You can criticize me that and I'm being overly flip about this, but I think the way we all manage is we're constantly looking at the 60 -40.

56:43Is something on the margin changing? Private equity, do we need to extend the years? So I hope that that continues to serve all of us well and we don't just set it and walk away and think that 60 -40 is just what it's gonna be forever. John, thoughts? I'm just worried because Brett's been very agreeable today. And so it's so strange that way. It's really concerning. Yeah, I can see that. Okay, so I'm - It's his anniversary. It's part of my - Part of the management coaching I've gotten. I mean, we got puppy dogs over here. We got Brett Green. I mean, Meredith, help me here. I'm even a little bullied.

57:19It's very disconcerting. I mean, what the hell's happened with this world? It's just very, very strange. On that note, I want to do a quick round of closing questions. So your favorite newsletter, something you read, something you listen to regularly. Capital Allocators. Capital Allocators. Capital Allocators. Come on. Yes, yes. Capital LRK is weekly. And? Oh, gosh. No. Howard Marks still. Yeah, Howard Marks. I always read Howard Marks. And then the other one, Eric Peters. What's his name? Weekend notes. Weekend notes. Those two. Brett? There's a great piece that comes out from Jeffries every morning that I read every morning off their sales desk that's really interesting about what's topical today.

57:57I do try very hard not to be looking at the screen thinking about what's daily, but just being really informed. used to be reading the front page of the Wall Street Journal. Now you read the front page of the Wall Street Journal and it's all stuff you learned about yesterday or the day before. They've got a great sell side piece that goes out. The guys at Strategist we think are excellent. I really like their stuff. The Washington Research Group at TD Cowan has some great DC stuff that I read all the time. Chris is great. I love the way he quotes songs. It's a good point on the manager letters.

58:26We get so much wonderful data from each of our underlying managers in terms of what's going on. All right. Last one. What's your favorite weekend activity? We get to have one. I spent the rain in a soccer tournament all weekend. I'm an MD nester. So whenever the kids are home, whatever I can do with my kids, boating, golfing, watching sports, whatever it is. And when it's just you and Nat? Whatever Nat wants to do. I do miss the Saturday afternoon or Saturday morning, Randall's Island soccer games. I do not miss that. I don't miss that, actually. As much as you complain about it. The coldest place on the planet is Randall's Island in April.

59:06Even in June, sometimes. Just anything with kids. My son's going off to college, so just trying to enjoy as much time with him when he's willing to talk to me. Having a good meal. Doing a great trip with them. Just saw a cold play with my daughter. Nice. Not Taylor Swift. That was two years ago. Last year, we do our annual concert. So I'm a Tay -Tay fan. Still am. I've given up on her. What are we going to be talking about when we do this next? Impact of geopolitical, I think. We got a lot of stuff coming down the pipe. The Middle East this past week is a major, major reshuffling that is going to have impacts globally.

59:49We're going to be going into midterms. You got a lot there. and I'm very concerned about college campuses this fall, geopolitical will be back on the table. Deficits, we talk about it, but it hasn't mattered to the US and to our conversation about the dollar and 6040. And you've got places like Germany and the EU writ large where deficit spending is now much more common at a much bigger level than it used to be. There's all the follow -on effects of that, interest rates and inflation. Geopolitical is an interesting one because 30 years ago, 20 years ago, a geopolitical event would have massive market implications.

1:00:29Since then, geopolitical events have had less and less and less implications to the market. I feel like the pendulum went from overreacting for geopolitical to now we're really underreacting. Well, I'm pretty convinced that whatever it is we're talking about, it's not going to be any of that. Always. It's always something we're not talking about. All right, Brett, Meredith, John, Casey. Thanks. So much fun. Thank you. It was fun. Great to see you guys. Thanks for listening to the show. To learn more, hop on our website at CapitalAllocators .com where you can join our mailing list, access past shows, learn about our gatherings, and sign up for premium content, including podcast transcripts, my investment portfolio, and a lot more.

1:01:15Have a good one, and see you next time.

1:01:22You