Momentum Stock Slaughterhouse

24:35Oakmark? Yes. Okay. Yes. Nygren was a value manager riding Amazon. Yes. And like nailed it. Yes. And people would say, you're not a value manager. No, he finds value in Amazon. He's just not looking at the PE ratio. Yes. Okay. Say more about that. I think, well, the way that I tried to tackle this challenge with factor decay, because I still believed in wanting to focus on low valuation and a whole client base. That's what we've done. And we also had an income focus. One of the ways that I tackled that was peer groups and creating customized peer groups because I believe that the peer groups are what allow you to see when something is attractive or not, less so than an arbitrary rubric of, is it cheap to itself or is it cheap to the market?

25:20Some stocks always trade a premium to the market. Some stocks are not going to, you know, maybe when they're getting cheaper themselves, a bad thing. Business has changed. So the thing about real estate, I use a real estate analogy. You've got property in Florida, right? You've got Palm Springs and you've got Greenwich, Connecticut. You got Highland Park in Dallas. It's like, should those all be compared? Are they in a peer group? And I was like, yeah, they are. It's the same buyers. Yeah. Yeah, I agree. And what's crazy about the stock market is you can do this, but it's global, right? You can partition it by US and international.

25:51You can split it up. But getting those peer groups right, I think, is a big deal. And I'll give you an example. So within chemicals, we were always going back and saying, Leindel, Dow, these are the cheap ones, right? Low P, high yield. You know the story. It's like, what's commodity chemicals? It's like, what about Sherwin-Williams? Sherwin-Williams is a chemical stock. It's like, well, that always trades at a premium. Why does that trade at a premium? It's like, well, it trades at a premium because it actually looks more like Home Depot and Lowe's in the home improvement. It's like, well, that's a consumer discretionary.

26:19That's a different group. So Gix, has it separated? Don't get me started on Gix. But this is what I believe at a core level that you have to get the peer group right to get the valuation right. So what are you looking at? The best earnings growth story in a peer group versus the GIX classification PE ratios? So we look at five different metrics. Great question. We'll look at enterprise value to sales, price to book, dividend yield, PE, and momentum. But we are getting to your point, Josh. You have to get the growth rates accurate to form those peer groups. And then what we're doing, it's not a correlation analysis.

26:58We're actually looking for a distribution evaluation relationships. And you can actually see the bell curve in the relationships. And that allows for a greater, I would argue, probability of mean reversion if the distribution shows normality, if that makes sense. So I'll give you another example. I mean, I'm with you. I don't know if he is. Okay. Okay. Go on. Well, Union Pacific, Prologis, totally different, right? but they're similar okay because if you think about it what goes on the truck what goes on the car has to be stored has to be stored so the market knows this it's like are those peers like well they're not peers in the traditional sense it's like but are they peers in terms of how you should think about valuation and risk in the portfolio i would argue yes because the market sees them in a symbiotic relationship even though they do different things so it's a different way of tackling the problem that factors were decaying and again if you if you look at a back test from 2009 to present for a lot of these factors, they stopped working.

27:54And I think a lot of managers had a really hard time figuring out how to deal with this. And I think on the value side, what's so difficult is all these value managers got rewarded for not making any adaptations and changes. You think being an outsider is why you were able to arrive in an idea like this? Yes, I guess. I haven't ever really thought about it like that. Well, it's a positive. Like there's a book called Outliers. Yeah, I like that book. And it's about 12 CEOs who did things very differently than any of the other companies in their space. And as a result, those are like some of the top compounders in the history of the stock market.

28:31You didn't go to University of Chicago. I did not. So you're not like schooled in the Wharton. No, I'm not a Wall Street guy. I think Josh's earlier point is very important to hit on again. It was, to your point, the factor decay, right? A lot of money coming to these strategies. maybe close the discount of some of these attractive multiples. And there was just less, the arbitrage closed. This wasn't arbitrage, but, and then here come the fangs. And so you had that earlier period coupled with investor preference. The value stocks look horrible. And these companies look and perform amazing for the next decade.

29:05So it's been a hell of a run. It has. And I honestly hate classifying stocks as growth in value. It's super annoying because now Amazon is in the value index. It's one of the top weights. And it's like, well, now it's eligible for value. Nobody will ever call it a value stock. They'll never. Yeah. Maybe it pays a dividend, goes to eight times. Can we talk about today? Yeah. I think, I think this week software, this week in particular has been one of the most exciting times to watch what's happening in the market. The stories is changing and it's changing fast and it's not just software. It is the, I don't want the mag seven.

29:41I spoke about this last Tuesday with Josh. I think we have an anti-bubble going on. I think within the Mag 7, Oracle down 55%. Microsoft goes down every day. It's down 26%, worse than the Liberation Day sell-off. Nobody wants to own the AI winners. So that's like the anti-bubble. And then the stocks, the companies that are being displaced by anti, by the bubble, by the AI names, they're also getting destroyed. So it's like what was supposed to be the bubble, which is not a bubble, is the destroying the other names. It's a really fascinating market. Joe Wiesenthal had a great smart-ass tweet. He said like, he said like, I think he's talking about Blackstone.

30:24He's like, the private equity companies are creating a bubble in CapEx for AI, which is then disrupting all these software companies that they're invested in. Correct. It's basically like - They're disrupting their own portfolio companies. They're disrupting their own siblings. It's bizarre. I don't think anyone expected it to play out the way it is because it's been such a tight group. I mean, a couple of things on software I'll say though, the valuations got to all time highs during COVID same with biotech. So you start at the peak multiple. I think that shapes sometimes when the market starts to get worried and resets and re-rates these companies.

30:58The same thing was true in 2007 with the bank stocks. A lot of people forget that price to books of banks were all time highs. Oh, that's a great point. They didn't crash from a discount. Correct. They were at huge premiums. So you start up here and then the market says, hey, you used to be a disruptor, but now you're turning into a customer and that may whittle away some of the pricing power you had. The market trying to reset it. So to be honest, it is exciting. No one really knows where the multiples can settle out. I mean, if you look at what happened, I mean, NVIDIA was down 67 % in 2022.

31:30And I didn't remember anyone in 22 saying, hey, they're going to come out with the most amazing chips. You should be putting your whole net worth in it. I didn't hear any of that. And so I just bring that up because these things could get to lower multiples quickly if the fears and concerns stay there. We're seeing it's very violent. So one of the people that I do halftime report with said something really smart this week, Stephanie Link. So Stephanie, and she's invested in a bunch of software stocks like everybody else. And she was saying like the problem with bottom fishing in these names, well, obviously the obvious problem is we don't know what's the bottom.

32:02But the real problem is there's no proof point. meaning if they hammer, let's say, let's say they hammer a biotech stock, but we know that in three months there's an FDA decision due. That's a point at which we prove either they have the science or they don't. Same thing with an earnings call. If they're, if they're like beating the crap out of a company, but we know they report earnings in 10 days, there's like an end in sight where either you'll be proven wrong or right how the quarter went. Yes. With something like this, there is no proof point where you can definitively say on this date, we're going to once and for all put it to rest, whether or not these companies are about to be disrupted out of business or this whole thing is ridiculous.

32:54There's just no point at which anyone can look at and say, all right, if we can just hang on for a month, everything will be resolved. good or bad in this situation it's like all right this is a multiple re-rate yeah now there also are some bad fundamentals in the space but for the most part these companies report earnings the earnings are good yeah maybe the guidance is soft because there's ai uncertainty but we're not talking about a situation where companies are missing by 30 cents per share and then getting annihilated that would be easy it's just trying to sell it's just trying to figure out what the new multiple should be what are these worth can we do some charts i've got some charts okay john Let's run through some.

33:32All right. So the first shot I want to show you is application software. This is Adobe, Applovin, Salesforce, Datadog, Workday, all of the names that are just, it's in a 30 % drawdown, but that's not the worst part. John, show the previous one, please. It's fallen 18 % in seven days. The only other two times this has happened is during the financial crisis when the world was in question, the financial world was in question, and COVID. All right, so there is uncertainty is here. Is this relative or is this - No, absolute. So can I make one observation right off the bat? Sorry to interrupt you. Go.

34:13You mentioned 08 and you mentioned 22. And it's like, oh, well, the market was down, peaked the trough in 22, 25%. So the whole market was barfing on itself. Not today. And 08, not today. I've got them. So that is a concern because you've got the RTY at all time highs. You've got the S &P hanging in there. I kind of picture a crew team where a lot of people are rowing in the back. The equal weight looks fine. Yeah. So if the market was, you know, cracking hard, then it's like, well, everything's down. Some things are down more. Yeah. This is concerning. John, throw up chart. I'm going to skip ahead because John is hitting it.

34:48Throw up chart 13. All right. So I said to a chart goat the other day, I said, this is yesterday. I said, this is really weird. We have stocks that are crashing. He's like, who's chart goat? Don't worry about it. We have a guy working here, Matt Sermonaro. He's a goat. Who does, I think, the best charts in the industry. So I said, Matt. Amazing. We got to look at this. There are so many stocks that are down 5 % today and down 5 % yesterday. In this case, we used 4%. All right. So here's what we're looking at. I said to Matt, I bet you that when we've seen a surge in these type of days, you're in a bear market, right?

35:22So we said, okay, yesterday, in the past two days, we've had 109 stocks that fell 4 % in a single day. And we said, how many times, like, when does that happen? On average, on average, the stock market, the S &P since 2000, is in a 28 % drawdown when these days happen. Right now, we're 1 % from the all-time high. That's unbelievable. Yeah, it's a super different dynamic. It's very unusual. The market is taking out a rifle and it's saying you're out because the whole market's sitting up there. You're an AI disrupting. It's not a shotgun. It's you're dead. No. You're dead. And so here's, we've never seen this before.

36:01Remember on Tuesday, we said, have we ever seen this? Like where we've seen like cold names get killed, but who cares? There was like one or two of them. They were tiny. They weren't big. So we were talking about like a big group like this when the rest of the market is sort of nothing to see here. So our friend Warren Pies answered this in a chart. He said, until the current software debacle, John, this is chart two. Okay. Until the current software debacle, there has never been an instance where an S &P 500 industry that was so large, more than 8 % of total market cap, has sold off so hard, down 25%, and yet the market remained at highs within 3 % of all-time highs.

36:39Okay. Is this super bearish or super bullish? Super weird is what it is. It's super weird. It's super weird because, to your point, it's a big group. I've been shocked that the S &P has been so resilient with all the volatility under the surface because you've got a lot of names that are pulling a lot of weight that are smaller. To your point of the equal weight, all these equal weighted names are kind of waking up. The money is rotating out of these. So that that's part of it. But I'd be cautious on it because now you tell me I bought IGV today. I mean, cautious on the overall market. I'd be cautious on the software trade.

37:10Oh, well, too late for that, John. Yeah. I mean, I don't know why you need to chase that. I mean, there's so there are so many things I think that look really good in the market today. So it just and again, as a value manager, software is not a massive component to your head, though, knowing that this has never happened before. a group this big and important to the index being nuked with the market holding up. If I asked you, is this positive or negative for the rest of the market, like in the short term or the intermediate term, what would you guess? Because I have a very strong opinion, but I don't want to say it until I hear yours.

37:45I think you're going to say, well, I'm not going to predict what you're going to say. You're going to have a strong opinion. What is my prediction? What would you like if somebody asked you and you had to come up with an answer? If I I have to come up with an answer. I'm concerned. I'm concerned that you have a large cohort of companies that are under this much pressure. So it's concerning to me. Okay, I'm the exact opposite. So I - I'm so bullish on this. Oh, well, okay. I want to reframe something. Are you saying bullish on the market, Josh? I think this is like unbelievable. First of all, it's poetic justice.

38:17All those assholes who told everybody else, learn to code. Yeah. How'd that go? Well, that's - Learn to code. How about learn to do something with actual atoms and molecules because all this code is now easily replicated and improved upon by robots while we sleep. Why is this super bullish? Because this was the number one risk that people talked about that was going to bring down the market. When the tech bubble bursts, when the Mag7 cave, everything's done. And what we're learning right now is that the band plays on because there are other opportunities. and people are just taking the money, and they're saying, okay, I get it.

39:00That game's over. What's the next game? And they're buying things that cannot be disrupted. And I'm not suggesting people do that. I'm not saying, like, go run out and buy the consumer staples. They're historically expensive, but I get the mentality. You can't disrupt mac and cheese. That's true. Okay. So then there's - By the way, we're overweight a lot of these areas, not staples. So you're enjoying this more than everyone else is. Yeah, this has actually been really, yeah. Okay. healthcare stocks catch a bit. Yep. It's so bullish. Yep. I know people like, oh, historically that's defensive. Nah, you don't know what you're talking about.

39:33It's an area that's undisrupted and probably helped by AI. AI won't make its own drugs. AI will be used at these laboratories. Pfizer said they think they're going to save $500 million maybe in a year because of AI tools that are in there. So like this whole idea of the RSP, the equal weight, being flat while this sort of thing is only disrupting this one sector. Why is the rest of the market flat? Because people, I think, are now drawing a distinction. Some companies are going to see cost savings from AI and a lot of beneficial innovation. And some companies are going to be looking for something new to do because the thing that they once did is no longer needed.

40:21And I feel like that's capitalism. I don't know. That's true. I like it. That's true. I mean, I guess I have a few thoughts on that. I mean, not everything's flat, right? The 1 ,000 value's up five. I think the 2 ,000 value's up. Energy's up 15. Eight. Yeah, energy's up 15. AI doesn't make more natural gas transmission lines. Regional banks are up. Doesn't do it. Staples are up. Materials are up. Right. So there's a lot of stuff that's up. John Chartan. In 2000, does anybody know how much the S &P was down? In 2000? 2015. Like to finish the year. 15. I don't think it was down much. Maybe negative 10.

40:55Whoa. That's spot on. It was down 10. I was there, John. Okay. Well, I say that because when you hear 2000… While you were taking SATs in your kitchen, I was there. Thank you. There were a lot of stocks that held up. The problem is nobody owned them. Everybody owned Juniper Networks and Sienna and Cisco and Lucent Technology and Nortel. Nobody owned Mohawk Industries. like nobody owned the things that were flat to up but john check this out to your point this is a few days old this is as of 130 but bespoke said 57 of stocks are outperforming the index yeah i mean you have to love this yeah there's definitely a broadening i mean look i mean everyone's tired of seeing hey small caps are cheap to the s &p 500 so i didn't put that in my uh because everyone knows however it is true it is true that you've got some of the steepest discounts there going back to 2000.

41:47So I'm not surprised. And the other component, which the software names got wrapped up in momentum as a factor had had its biggest run the last 24 months. And I would only point to momentum as a factor that I still think has efficacy because it's human behavior because people buy what's going up. I think it's the original factor. Yeah. And I don't think it'll ever get arbitrarized away because it's too emotional. There's too much. There's people that are actually driving. Before Cliff asked this, proved that it's a factor. I think people innately knew it was a factor. And I think you look back at people writing about the stock market in the twenties, they were very aware of how momentum works.

42:22They couldn't put it into scientific terms and they couldn't prove it with math because they were riding those old timey bicycles with the giant front wheel and twirling their mustaches, but they got it. Like RKO was the fucking Nvidia of the twenties. I think it's the original factor, quite frankly. We had a crash yesterday. Yesterday. Yeah. The momentum factor. Yeah. Divided by value. Worst one-day return since, I guess, what happened in 2020, late 2022? I don't know. Whatever. But bad. Bad, bad, bad. Yeah. Again, you know, momentum was in the top percentile of performance going back historically.

43:00It's been sitting right up there for the last two years, okay? Coming off that 22 low, everything ripped in 23, but then it became really 24 and 25, pure momentum. It beat growth. It beat dividend. It beat everything. It beat low book. It beat like every factor under the sun. It crushed it. Right. It crushed it. So I'm not surprised given if you think back again, software multiples started at all time highs after COVID. You had this huge momentum run and now you've got a scare. So you've got the big dislocation going on. I'm not surprised by it, but I do think that it's an opportunity for other names to re-rate, but they have to have fundamentals.

43:33I think this argument that, hey, value is just going to come back, drives me crazy because it's going to be about the fundamentals that are going to drive that. And I will say, if you look at oil, particularly refiners, not all oils and drillers have done well, but to be honest, the fundamentals are sketchy on some of these right now. Refiners are growing at 40%. Refiners are going faster than NASDAQ. It's like, well, how is that possible? It's like, because crack spreads. It's like, well, that's bullshit. And that's been a momentum trade too, though. Well, it's turning into one, but it's just starting.

44:02I mean, earnings just went from negative to positive territory six months ago for refiners. So if crack spreads expand, that's good. That's just fancy word for margins. So there's a lot of good fundamental underpinning. This is my point in energy. I don't think a lot of people appreciate that, particularly refiners. And then the banks, Josh, I mean, these things are printing money. You've got some regional banks that are growing earnings at 30%. So again, you could have a re-rate because the fundamentals are really good, okay? And they're growing their earnings. I think that's a really key point So pull it back.

44:38So bring it back to 2000. Because when people talk about 2000, they say dot-com bubble. And that, in people's minds, becomes a shorthand for, like, a market crash. And it was. But it was a NASDAQ crash. Yeah, that's right. And a lot of stocks were just fine. They just weren't the stocks that people were talking about. but like this is more reminiscent of that than it is of any other tech any other market episode that I could call to mind like stocks that nobody talks about like Valero and Phillips in the refining group just like to name one group you're doing really well they are um John I got one you're to love let's do it you're to love this chart 17 all right so this This is why we call them chart good.

45:25So this is unbelievable work. And I'll explain what we're looking at. Okay. Okay. A lot of colors. Put your right foot on green. Listen, boys, listen, boys, Josh, you might not understand this, Sean, you're a smart man. All right. We've, we've, we've break down the market into deciles. All right. There's 10 even buckets. Okay. And on the left, we've got the worst performers. Okay. And of course, all the way on the right, we have the best performers. Okay. And within each decile, we break it down. How many stocks are in the top or whatever decile of return? and what you'll see all the way on the right, 27 % of companies in the material sector are in the best decile of performance.

46:0223 % of energy stocks are in the best decile of performance. It's not tech. People are rotating into some of the things that you probably own, which has got to be fun. Yeah, that's great. That's a good chart. It is a great chart. And I mean, look, I mean, this was 2000 was when our firm was born because everyone was on one side of the trade and nobody wanted any of these areas. And as you guys know, materials and energy at the smallest weights in the S &P 500. So there's not a lot of money allocated there in broad, broad baskets. But again, what gets me excited as your track record around Oh five must've been sick.

46:37Oh, it was like, you don't even need a wholesaler. Oh, I mean, you don't, you don't. It was, it was, it was, it was wild. They're all working. So just look at the orange that stands out. That's energy. There's none of them that are in Decile 5, 4, 2, or 1. Like, they're all working. They're all in the top half of performers. This is better than a heat map. So good. Like, with the heat map, they'll show you the ticker symbol of, like, you know, the big ones, the 10 stocks that you've heard of. Look at Staples. But this is, like, gives you. I mean, it's unbelievable. See, what's so fascinating about kind of the value growth argument, it's like, I don't like it because stocks are stocks.

47:11You know, it's like, is Lilly a growth stock? Is Lilly a value stock? Is Pfizer? You know, go into that. But it is an asset allocation decision. And what I mean by that is the 1 ,000 growth, it's like, how much is the sector allocation to tech? It's like, it's 50. It's like, well, what about Google, which is comm service? What about Amazon, which is discretionary? What about Meta, which is comm? It's like, well, you do that, and you're at two-thirds. So two-thirds of the entire opportunity set is in those groups. So value just looks totally different from a construction standpoint, if that makes sense, because energy is 10%.

47:44You know, financials are, you know, 35%. You've got materials that are, you know, 4 % or 5%. REITs are 10%, depending on what index, if it's a smaller one. So it's totally different groups that are making up the value indexes today. And I think that's not discussed a lot because it is an asset allocation decision. It's like, you did well the last few days if you had regional banks were up yesterday. It's like, oh, regional banks were up yesterday. It's like, why are they up yesterday? It's like, we have good fundamentals. they started from a really attractive point in 2023, which I don't think gets enough press either.

48:15And the discounts are still there, even though they're growing earnings. Super yield curve doesn't hurt. Yeah, you know, can I make one more point about the regional banks? Not that this is the most exciting topic, but - Don't get it, we get all out. We're going to go out. Let's do it. 2008, this is like, I was cutting my teeth and like these banks are just blowing up. You know, everyone's heading for the doors, Bear's turn drops, you know, 90 % a day. The entire thing's coming unwound. Regional banks are going, you know, blowing up. And that was an asset crisis that occurred. 2023 was not that.

48:46It was a liability crisis. And I think people miss this. It's like, why did First Republic and Silicon Valley fail? It's like, because the yields went up so fast that if they marked their treasuries, which they have to hold to market, they'll be at big losses. And this happened. Paper losses. Paper losses. And it's like, oh, wait a minute. We didn't expect that one. It's like, so the Fed fixes, the Treasury fixes it. We're going to open the discount window. You can exchange anything at par. Well, the Fed caused it, in fairness. They did. Yeah. They did. They telegraphed it. They said we were going to raise rates.

49:19And aggressive management caused those particular banks to fail. Yes. Because there's a lot of other banks that didn't play that game. A hundred percent. But, you know, if I think about what happened with First Republic, that's kind of interesting. That's like saying, hey, you know, we're going to raise capital and then telling your neighbors that you have termites and then saying, now I need to raise capital. So some poor decisions were made with how they could have, I think, avoided these issues. But I bring this up because the whole group got barfed because everyone was like, I've seen this before.

49:49It has to get worse. It has to get worse. But it was different. It was different. And so now you're coming off that base. Again, context, context, context, like 07, all time high. 2023 got back to 2008 valuations for banks. Okay. So now you've got that yield curve steepening and they're printing money. And by the way, they're not even really lending that much right now. So if you get more lending, that will continue to pull capital. So I think this dynamic that you're talking about with the momentum, you could see that continue because you've got fundamentals supporting it. It's not just a, they're cheap.

50:20Because to your point, Josh, the staples, a lot of these have terrible earnings. We'll see if they can turn them around, but they're high multiples. If we have now a value run that lasts more than a month, like, cause you know, over the last 10 years, we've had these mean reversions where it's like small caps are outperforming and then it just fades. Um, but you remember, and I remember these periods of time where you could have a five year value outperformance. And that's like right around when everybody starts launching smart beta products again, but whatever it could happen. People don't think it could happen.

50:56I wrote a blog post and deleted it. Oh, I, yep. Coward. What? No, because you're right. you're way smarter than me. And I thought this was going into a territory that I don't belong in. I try to stay in my lane. This is not, I should not be the one that writes this, but it was brilliant. If only, if only, if only I had the chops to say what I was trying to say. Now you gotta say it. Okay. The premise was, you know, rotation to value that lasts for five, five years. What will happen given the way markets and people are these days is we'll have a mag seven of value stocks. That's true. Because hurting is never going away.

51:35So I called it the SAG 7 because all these stocks were doing was sagging. And I was going to make the case that in a value outperformance dominion, it would look like Exxon Mobil, Procter & Gamble, like those would be the champion stocks of a value move. And they would cease to be value stocks eventually. and we're sort of seeing the early innings of that with walmart hitting a trillion dollar market cap i think people think it's like oh it's consumer staples it's defensive 40 times earnings yeah but i have a theory on that i think well i want to hear it but like so my my take was human behavior whatever's working we're going to take it too far and we will end up maybe they don't get to 35 of the s &p but we'll end up with seven value stocks that are 20 of the s &p like and i don't know what's in that basket, but like, and I was going to write it, but I didn't have like the mathematical ability to prove it.

52:35I know somebody could prove it, or I feel like somebody could show what that would look like if that were to happen. I'm just, again, I'm not the guy. I'm a big, I'm like, uh, I'm an ideas guy. Michael's the analytical guy. Uh, but anyway, what do you think about that idea? Like if we have five year run for value, are we going to end up with seven giant value stocks? Well, you should have written about it first of all, because you I did a great job explaining it and I loved it. Okay. A couple of thoughts. Can I say one thing about Walmart, first of all? Because Walmart now is in the NASDAQ, right?

53:05They, they, they, well, they, it's, they switched exchanges. Yes. Yes. Yes. So I just say that because Costco did that and it's like, well, that's pretty helpful for that multiple. And Walmart's like, oh, I'm going to do that too. So is it a value stock? It's like, I couldn't get back to the Amazon question. It's like Walmart is a really high multiple. Statistically, neither of those are value stocks. Correct. Right. Correct. Correct. um so no are they staples because historically when people were worried about the market they would buy walmart like like like it's a dollar store yes because it because it was like it's like a supermarket it's like well people need food i don't know that's not applicable anymore in today's market yeah defensive stock for value to work it's cyclical like this is the this is the trade okay so like staples to me is not the trade like they like sure procter and gamble may do fine.

53:54But the trade with long legs is going to be cyclicals. If you look at the 2000 value, which is, I'll argue, kind of the tip of the spear, that is 40 % financials, okay? 20 % in regional banks, then 10 % in energy. Okay, so right there, you've got 50 % of the opportunity set in energy and financials. So my comment to you on, as I think about how this could play out, But it may be a few stocks, but maybe it'll be sectors. Because if you think about financials, okay, financials were the largest sector in the S &P 500 back in 2007. Okay? They may not be as big as what technology is today. We'd have to check.

54:35But it was getting up there. So the way that value is expressing itself. Citi and Bank of America had big market caps relative to the rest of the market. Huge. So is oil part of that? For sure. But I think it's about financials because I think that's where you get the huge dislob. Because it's such a big group. It has the ability as it gets bigger to compound and take over the other groups. Not unlike what's happened with technology at the highest weighting it's ever been in the S &P 500. So you think that's the – if there's a value bent to the next leg of the bull market, you think it'll be harvested by investors who are in the financial stocks?

55:13It has to be because it's the largest group. It's kind of like when people were getting bullish on - Like materials can never get big enough to fit that much bullishness. I mean, you can overweight them, but I'm saying the group's like 3 % or 4 % of the S &P 500. It's just tiny, right? It's a little bit bigger in the - Energy too. It's so still. It's going to be hard. It's going to be hard because you're starting such a small place. It's going to be really tough. But financials, they can do that. Industrials as well. But I'll make another point. Emerging markets, people are like, do I like emerging markets?

55:43Do I not? A couple of years ago - I like them when they go up. You like them when they go up? Yeah. That's not about average. That's about right. And then when they aren't working, everyone's like, I don't really diversify outside the U.S. because I like my money here. China is the second largest economy in the world. China is the largest weight in the emerging market index. So I found it funny when people were like, I like emerging markets, but I don't like China. It's like, well, that's like saying that you like S &P 500, but you don't like technology. It's like, that doesn't make any sense.

56:12It's like, this is the second largest economy in the world. And they would liken it to Russia or some of these other countries. If you had that trade on, though, it's basically India versus China. And it's done pretty well. Well, since the Halloween lows of October 22, China is outperforming the S &P 500. Okay. Not a lot of people know that. But it's actually performed very well off the October Halloween lows of 22, beating the S &P. Yeah. So India's done fine, but India's down. You know, well, they're all down a little bit. China, you know, but in general, it's hard to get, my point is it's hard to get bullish on emerging markets.

56:46We have a problem with China because it's the biggest weight. And the same way that if you want to get bullish on value, it's like, well, what are the biggest, because to your point, Josh, everything is run by ETFs now. You have to be bullish financials. You have to be bullish financials. I got it. I agree. Yeah. Just like on a pure market cap basis, value X financials. Yeah. So what do you own? It makes, it makes material. Yeah. real estate well it'd be 10x overweight like a like a bunch of chemical companies and well here's the problem for the most part the other groups like staples right okay they don't grow very quickly so if they're going to do well it's probably going to be because the market's not doing very well which goes back to your point josh you're bullish on the market it's hard to get super excited about like hey let's really overweight this group that grows at three or four percent a year that's going to be tough to get super excited about but if a group's going at 30 and it's at a much lower valuation that gets a lot more exciting yeah i've got some staple stuff so if i were to say um so on the one hand i love that we're having a cleanse i love that all of the garbage has been taken out a lot of the quantum computing names and all the the crap that people are speculating about and i don't like watching anybody lose money but that's over right that trade has gone they're blown up now it's microsoft microsoft you like the cleanse i like the cleanse you like that you've done the juice cleanse i have not okay all right oracle is down 59 percent from its high.

58:04Microsoft just closed the gap from last April. I think it's down 28%. I think this is healthy. I think this wall of worry that we're setting up, it's necessary. Here's what I really don't like. I don't like that the market is still basically at an all-time high. Like that concerns me. So I see both sides. Like, well, it's great because now the 493 is taking the baton. Like it's all good. However, if I was concerned, here's the chart that I would be looking at. John, chart four, please. We want to see a risk on environment, obviously in a bull market. and the best proxy for me is discretionary divided by staples.

58:35And John, being that you're annoyed with some of the valuation, the way that we like categorize things, you'll appreciate that XLY is 40 % Amazon Tesla, right? Yes. So we have to equal weight it too, but they're both crashing. The ratio of discretionary to staples, so staples are breaking out relative discretionary. Which one of these is equal weight? Oh, the light blue. So that, I don't like that. They do the same thing anyway though. Well, yeah. Okay, I don't like that. I don't like, I don't love that U.S. staples are having their best January and February ever. There is a absolute rush into, so staples are up top left corner.

59:1212 % in January and February. Yeah. Bank of America has us back to 1997. Never seen anything like this. We have fund flows going berserk. Next chart, John. We're looking at the four-week average net flows as a percentage of market cap, right? So it adjusts for the size of these companies. And people are just absolutely diving in. And to your point about, well, Staples, how much do you want to pay for these companies? You want to pay 40 times for Walmart and Costco and Coca-Cola? I don't know. John, let's skip one chart. Go to chart nine, please. All right, next one. This is some chef's kiss work right here.

59:48Here's what we're looking at for people that are listening. I've got the Staples forward PE, and I've got the tech forward PE. Oh, wow. And for the last eight years, crazy as you would expect the tech forward p has been significantly higher and now they are touching tips but let me show you one more let they are they are they are they have converged and they're trading at the same forward p and so the next one each wait both both are trading at 23 times forward all right so so here's some here's some we did this is not a chart crime okay i am normalizing the axes to only show this particular point most of the time the blue line the dark blue, the light blue.

1:00:26They move together, right? Like for the most part, they move in the same direction. And now you are seeing a hard break, which shows very clearly that tech is getting a hard re-rating lower, Oracle 1060, right? And staples are getting a sharp re-rating higher. And so this is not that bullish. I think one thing I think about this, I mean, if you look at the forward estimates for a lot of the staples companies, they've been negative. Yeah. So you're getting super fast PE. None of this is fundamentals. Well, that's the thing. You're getting the PE expansion off of bad earnings. And so, you know, it's much harder for something with good earnings to expand the PE quickly, as we know.

1:01:08But when you have bad earnings, you have earnings coming off, the multiple can pop quickly if you're up 10 % because the earnings weren't there to support the move. So it's really strange. I don't know if people fully appreciate what they're paying for because the estimates have been really bad. They don't care. Safety. They're paying for undisruptible companies. And it sounds stupid. And then you look at the charts. Dude, they're paying for this. But they're getting disrupted by Zempic. John, they're paying for this. I know. They don't want to own Microsoft. That's what they're paying for. I know.

1:01:37They're puking this and they're buying staples. I know. I don't know shit about the fundamentals and what Satya is doing and whatever the sustainability. This is a buy. Microsoft. Microsoft. This is not Workday. We own Microsoft. Microsoft, 15 times forward earnings versus. Colgate, Palmolive, 30 times earnings. 100%. Okay. 100%, Josh. I'm 1 ,000 % on the board of the day. And whether it's not a— I like that you guys are saying that definitively. Whether it's a buy or not, it is not a sell. 100%. If you are selling Microsoft today, take your hands off the keyboard. 100%. 100%. There's way more interesting things than piling into staples.

1:02:11But again, I go back to these other areas because you've got earnings supporting it. You've got earnings supporting it. But yeah, I mean, the Microsoft sell-off, you know, we'll see. So tell us, what are your people doing in a week like this? Smiling. No, no, no. So you guys are in the right part of the market, which is why I booked you for this three months ago. I had a premonition. That was good. No, no, no. You guys are on the right side of this divergence. Okay. So what are you guys doing? How do you walk us through the mentality of the people who are now looking for opportunities? you guys are able to you're on the right side so you're not like oh no what do we sell you guys are like what what can we what can we buy so how do you guys talk about it well you know it's interesting um you know on a day-to-day basis you know moves in the market they get a lot of press but as you guys know you know the work's being continued constantly so we're in the engine room just you know going through what we're looking for extracting the alpha yeah we're the way we're i mean we're looking you know whenever you get dislocations okay whenever you get dislocations you know the work picks up but i'll be honest um you know we got really bullish on refiners at the beginning of the year we did not expect that that to rereading my cnbc column i actually did not see that one recently did you know are you are you i saw you talk about drill i wrote about i wrote about all three of them separately marathon valero and uh phillips like i pound as close as i get to pounding my fist on the table because it's it's on technicals i'm not i'm not terribly worried about the fundamentals, these stocks obviously were being accumulated like crazy.

1:03:49100%. So I wasn't early, but I wasn't late. 100%. 100%. But in terms of what we've done this week, I mean, not a lot, Josh, because we're already positioned for this. We were already positioned for it, and it was not anything that we had to do special. The main thing that we did leading up to this, I think it's positioned as well, is we're very overweight banks, we're very overweight energy, and we're overweight materials. And that was all a fallout of where we're finding value in terms of fundamentals and dislocations and valuations. Industrial is well, but those areas— Do you have to have an economic outlook that is more bullish than consensus to be that overweight, such cyclical areas of the market?

1:04:29Or is that not—let that work itself out? It's a great question. We definitely think about that. But if I had to articulate why we would push an overweight, it would be a combination of the multiple you're getting with the fundamentals supporting it. It's harder, which is why like staples, somebody's like, hey, I love staples. Like, why do you like them? It's like, well, I saw some chart on Price the Book. They're the cheapest. And it's like, yeah, yeah, but how's the business doing? It's like, the business isn't doing great. It's like, well, why are people buying it? Well, they want real things.

1:04:58It's like, I don't like that. I don't like that. I don't like that answer. so i think that you know the areas that had the fundamental support josh lead where i said that so okay you know the other thing i'll share too the russell 2000 okay that's the small cap index that is actually beating the s &p off the we got a new we got a new high this year we did okay it's being by over 10 off the liberation day lows i bring this up because sometimes rotations can happen below the surface but you don't see it for a while so your point that you made earlier josh about, you know, five years value may have a run.

1:05:29Well, it may have already started. We may even be one year in, but you don't know it yet. Right. You don't know it yet. You have to be able to look back to be able to say it. It's just another head fake. We've seen so many of them, right? There's been one other piece of market information that I don't love. Now, this is like maybe short-term stuff. I don't love that some of the companies that are beating in a real way are still getting sold. Palantir yesterday, I know it's in the basket of shit nobody wants to own, but they had a monster earnings report. Eli Lilly. And also, Palantir was up 6 % the day of reported earnings, down 12 % the day after, right?

1:06:04Yep. Eli Lilly, great earnings, was up, whatever it was, getting rocked today. Yep. Google. Alphabet. Google came back. Google came back. We own Google. All right, Google's on the high day. Look at that. Look at that. Highly day. Glad to hear that. So it's flat. But when stocks sell off on good earnings, that's not great. But I would also say, just like, listen, we've been in a bull market for so long. expectations were obviously not low. We all know that. What was the S &P up in 25, in 24, in 23? I know nobody likes losing money, myself included. But if we have a little bit of doubt, it's okay.

1:06:38If you could think past just tomorrow, like we need this. Okay, I have a question. How long has the bull market been going? When did it start? I have a different definition than that. This is rolling bull markets. It did not start in 2009. Okay. I think it's because - 2013. Because in 2010 and 2011 and 12, people like this is bullshit. Double dip recession. This is not real. It's fake. The double dip recession. I love that. I remember that going around. That was a big buzz phrase. We can't get any inflation. We're printing money. Where's the inflation? It's anemic economic growth. And even in 2013, the market was being led by staples.

1:07:08Nobody believed it. It was utilities and healthcare and real estate. Remember we talked about this at the time? Like it was a defensive bold market in 2013. Ten year drop major in 2013. So when we broke out of new highs in 2007, like from 2007, It was a defensive rally and there was a lot of doubt. And so I think that's when the bull market started or not started. I think that's, that's when I would date it to. If we're, if we're being statistical and we say the 1982 to 2000 bull market, the reason we started in 82 is because that's when it takes out the 1975 high. Why wouldn't we symmetrically say the same thing about this bull market in 2013, you take out the 07 high.

1:07:46Therefore, this secular bull market, the lows of the previous bear might have been in 09, but the beginning of this one is 13. And it was not just defensive. There was a birth of a new crop of growth stocks, which always happens. Netflix, Lululemon, people forget. We were having fun again in 13. Netflix was$20 billion. 13 was a big year. But the market was tiny at the time. And these were the stocks that captured our imaginations and made you think, oh, wow, there really are stocks that could go up a thousand percent. Chipotle. These were brand new growth stocks in 13. I know it's 15 years ago, but how long ago?

1:08:31That's right. But by the way, 13 years ago, it was a thing. It's not black or white. I understand the argument. Hey, listen, you measure the bear market from the top, right? Like peak to trough. So why would he measure the bull market from the bottom? Whatever. I don't buy that, but I understand there's different. What do you think the bull market started? Well, I've always wondered about 22 because we got two negative GDP quarters. Cyclical bear market, not secular. But everyone said it wasn't, but I was like, but we got two negative GDP quarters. Like, well, they didn't count it. And I'm like - We're making two different arguments.

1:08:59You're talking about recession. Yes. There was a recession in San Francisco. But don't recessions, don't bear markets - Reset. Don't reset. There was no unemployment. It's not a recession. I think your point is - You need like actual unemployment. Your point is that we've had bear markets. And I think it drives me nuts that people say it's been a one-way bull market since the bottom in 09 or whatever. Because it just hasn't. Where have you been? Where were you in 2022? That sucked. Yeah. Did COVID not happen? Was the stock market not going down 13 % a day? Yeah. What about Liberation Day? The thing is that people did.

1:09:29Wait, wait, wait. There's two things going on here. People discount bear markets that happen outside of recessions. Okay? In 22, nobody lost their job. In fact, the cause of the stock market selling off is the opposite. Employees were too valuable. That's true. Okay. So it's not a recession and people don't care about bear markets that didn't coincide with recession. That's fair. Okay. That's fair. So the real deal and the first 10 years of my career, I lived through two of them. The real deal is contracting GDP, crashing stocks and unemployment. And in 22, we had two of the three. And arguably, the big one is a spike in unemployment.

1:10:12And absent that, it's a cyclical bear market inside of a secular bull market that began in 2013. 2020 didn't reset it. That was a 10-minute bear market. That was 10 minutes, yeah. Terrifying 10 minutes, but 10 minutes. And 22 didn't reset it. Bullshit. 2022 was not 10 minutes. It was f***ing 10 days. Dude, Amazon and Google got cut. It was a Liberation Day-esque. Amazon and Google got cut. It was Liberation Day-esque. No, it wasn't. It was scarier because we thought we could die. Amazon and Google got cut in half. Meta lost three quarters of its value. And if you didn't check your account for a week, you missed it.

1:10:48This is revisionist history. It just, it sucked. It was not fun. Bonds were down 20%. I was terrified. I'm not pretending that it wasn't severe. I was scared. It sucked. Your point is, which is the right one, I think people act as if, if the world doesn't end, If we don't have a great financial crisis, then it's not a bear market. And that's just nonsense. Yes, I would agree. I would agree with that. I would agree with that. But I think that, again, I'm bullish on rate-sensitive stocks. So I think rate-sensitive stocks are going to go a lot higher. I mean, you're not going to get a re-rating. Do you like homebuilders?

1:11:21We're not overweight homebuilders. We do not have homebuilders in the portfolio right now. So what else is rate-sensitive? So what's rate-sensitive to you? Well, again, I would go back to, you know, first financials, right? Okay. But then, you know, anything in materials like steel, anything with cyclicality, you know, those are obviously very rate-sensitive names. And then you have real estate, you know, names like Prologis, you know, these names, you know, that name has done well the last few days. So I think that the rate-sensitive trade goes on. And you're not going to get a rotation into kind of the equal weight R.

1:11:49If R.S.P. goes, that's more, that is more rate-sensitive by definition because it's not heavier-weighted to big tech software companies that we were just talking about. You know what's so funny? You're looking at this chart of RSP and you're like, what? Yeah. It's at an all-time high. Yeah, it's at an all-time high. In financials, though, there are some sectors that are being blown up as collateral damage to this, like, software Armageddon. What are you talking about? Well, the alternative asset managers. Yeah. They're all in 30 % drawdown. S &P Global, FactSet. They look like this. They're going straight down.

1:12:21Right. Those are financials. Yeah. The data providers. Those are, yeah. So you have to actually pay attention. It's not just like XLF. Yeah, John, wake up. Yeah, the brokers are under pressure, right? So some of the insurance brokers haven't done as well. So the exchanges aren't doing as well, like MSCI, S &P. Private equity, blue owls, nuked. But those aren't, well, private equity, yes, but those aren't credit sensitive like the other areas in financials. They're financials, but they're not part of what you're describing. Exactly. Do you cover CMA? We don't own it currently. All-time high. Yeah.

1:12:55Today. Unbelievable. That's a commodity. That feasts on volatility. That's the junkie trade. That's like the degenerate trade. Yes. Yes. So that's benefiting from the run. Yeah. We don't have a ton of time, but we do have to talk crypto. We don't have to spend, we don't have to spend a million years on it, but like, oh my God, this is because this is part of this liquidation. It is. All right. Put up the, you want to go in order? I bought, I bought Bitcoin at 66 ,000 today. I can't help it. I'm a glutton for punishment. We were talking on Tuesday that I'm not going to buy like falling knives, but to me, I have to buy panic.

1:13:28And maybe I'm wrong and I'll sell it in two days. He only buys falling knives in crypto. No, no, no. So I don't, I've learned my lesson. I don't like buying falling knives when it's just relentless selling, okay? But like IGV today, to me, this is a trade. I'm not, this is not a buy and hold for me. When I see falling knives in like big groups, that panic. Indiscriminate. Liquidation. Yeah. I always buy liquidation. It's not always right. Doesn't mean we make money. Might lose. I'm a big boy. It's okay. But I have to buy panic. If I'm not buying panic, what am I doing? John, chart 18. What percent of your net worth do you have in crypto?

1:14:03Nominal. It's okay. Why? What do you mean why? Because he doesn't believe. You don't believe it really. No, no, no. I'll tell you why. I had way too much in Bitcoin and ETH. And thank God I sold a lot of it. So I sold enough so that if it got cut in half and it did, I don't care. He sold because the PE ratio got stretched. Can I show you this Ethereum chart? down 60 % from 2021. But like this last leg down, straight down. This is like really since the fall. Well, didn't Tom Lee call the bottom on it? Like on Squawk? Tom was here last week. Yeah. And he said - Great episode. He was early. So when Tom was here last week, it was at 2 ,800.

1:14:40And he said, it could go to 2 ,400. Yeah, it went to 1 ,800. Yeah. I mean, this is like, what is the, this is liquidation. Is it? There's nothing because there's no fundamentals. It just correlated with the tech trade. I think so too. Like it's correlated with the tech. It used to not be. Everyone made this argument that it was an uncorrelated asset, and that drove me crazy. It was until they got ETF'd. Yes. And now they're part of the whole casino. Now it's part of the casino. So it's no longer giving you that. 19. Look at this thing. Total Bitcoin spot ETF flows. That doesn't look that bad. It is bad.

1:15:10That's not a great division. Well, here's a question. Is it correlated or is it causal? I think it's causal. I think the ETFs, if they're not putting money into the ETFs, who else is? Who else could buy enough? Josh, this is my point on the factor decay. The ETFs are causal. Yes. So they 100 % are driving. We're on the same page with that. 100%. 100%. Robinhood, 10-year performance. I mean, it's been a win. Last year was the best performing stock in the market. This is basically a de facto crypto trade. It's where they make a lot of their money, and it's what their users are doing, and their account values get nuked when Bitcoin is in a 50 % drawdown, which it is right now.

1:15:48Show me Coinbase. 64 % drawdown. Holy shit. This thing looks like they just got FDA approval for a new type of flu. I've never seen a stock trade like this. Well, Coinbase is only growing at three percent. You call it corn braids? Coinbase is only growing at three or four percent now. Right. It was growing at a hundred. Right. So the market's right. The market's right. It's like now it's like. The market's always right for the most part. I mean, for the most part. This is the challenge with Bitcoin. It's the same thing with gold. It's like, what's the right price for gold? You know, we can talk about that.

1:16:22Whatever the price is today. $8 ,900, I was told. Dude, whatever the price is today is the right price. What is the moeyser going to be worth in 100 years? It's like, I don't know. It's like, I don't like the argument that because it doesn't produce cash flow, it doesn't have value because there's tons of things that don't produce cash flow that have value. But they're harder to value. They're way harder to value. And they're way harder to value because, for example, we own gold stocks. And it's been a great trade. But the valuations look really good there. The fundamentals look really good there.

1:16:49But we know these are expensive on certain metrics. okay but these are growing at 130 140 percent next year because where the gold price is because if you think about a gold i one time i met with the management of buenaventure it was young in my career i was out in laguna beach and i sat down uh with with management and he was explaining how gold mining works he got a piece of paper and he drew he drew a v and he said we mine all the gold it's easy to get and then if the gold price isn't high enough we can't do anything we just sit and And then if the gold price gets high enough, then we can mine a little bit more because it costs that much more to get it out.

1:17:23It's like, that's how it works. So it's super constrained. So when you get the price going like this, these things turn into money printing machines. They're growing faster than any stock in the stock market right now. Right. Like if Newmont's cost is$1 ,600 and the price of gold goes from 3 ,000 to 5 ,000, the stock should double. And that's literally what just happened. That's what's happened. That's what happened. So it's, but it's hard. And I've, and I'm honest with investors about this. It's like, well, are you guys still like gold? It's like, yeah, we still like gold because the fundamentals look really good.

1:17:55And we were still bullish here. But I recognize that if the price of gold were a drop precipitously, it's going to completely change economics. And it's unknowable, right? The economics of the companies you're buying instantly change and they could be the best managed companies in the world. It doesn't matter. Yeah. And I want to have an honesty about that. But we like that. We like these still. And they've been caught up a little bit in the momentum sell off. But, you know, I think those are going to be a little bit more resilient. Oh, that's so funny. Like the gold and silver sell-off was last week's story.

1:18:27Oh, yeah. And the software stocks blew up so badly this week that it's like, I haven't even looked at it. Yeah, they've been a little bit caught up because they're part of, again, these ETFs group the momentum together. So gold has gotten a little bit of attention as part of that. But it just goes back to Bitcoin. It's like, what is the price of Bitcoin? What's the price of gold? The price is what the price is. But that's why Coinbase's earnings, that's why they don't have any earnings. because the price is low. So the same thing will happen to Goldstock. Same thing happened to oil stocks. Yeah.

1:18:52Let me ask you guys a question before we get out of here. Amazon just supported. Take a guess. What's the stock price? I know. I would say down. I would say up. How much? Any guess? I would say it's up 7 % and I, full disclosure, I own it. I'll say it's down 3. Down 10. F*** you. All right. John Mowry, ladies and gentlemen. Hey, can I tell you a question? Do you know that you are one of the best first time guests we've ever had on the show you've I mean it's you might be like a podcast you might be a podcast that's not an easy seat to sit in well you did well you crushed the show John what do you think pretty good right Duncan what do you think I know that I know in your headphones you listen to music I approve alright can I say this go ahead super awesome to hang out and do this I was really looking forward to it I was so glad to to get to come up and do it I think super highly of the show Josh I've seen you a million times thank you thank you no I mean it sincerely I really I really was looking forward to this what is that you guys are awesome wait that's my new job listen listen from downtown that's so from downtown it says downtown how tough is that that's Marv that's Marv Albert that's Marv I think right is that Marv is that one of his who cares alright John before we get out of here we always like to ask people something that they're looking forward to and it doesn't have to be professional like Amazon's earnings call, which I'm now not looking forward to.

1:20:17I'm so excited. Could be anything in the world. What are you excited about? Okay, so I've married 15 years. All right. Okay, I've got a nine-year-old and an 11-year-old. All right. And I'm a big, big, big, big fan of trips. I think trips are the key ingredient for marriage, and they're the key ingredient for family. So I'm like big on this, okay? So I've planned a trip to Croatia this summer. and I'm super excited about it. I got my kids all excited about it. So that's what I'm really looking forward to. Time in Croatia. Is that the Adriatic? It's the Adriatic Sea. So it's like being in Italy.

1:20:56It's across the Adriatic from Italy. Yes, it's the backside. So if Italy's here, it's the backside. It's that water body, but it's calmer waters than a lot of the other places in Europe. And I've always wanted to see Croatia. That's where they filmed, I think, Game of Thrones. So just so beautiful. so that's what I'm looking forward to this summer I'm taking my family over there we're going to spend 10 days and that's going to be but I'm a huge believer in this I think it's the most if I was ever I don't know if I'll ever do this in another life maybe I'll be counselor it's like you want to have good relationships spend time how do you spend time?

1:21:30you go because you're too busy I'm too busy with work I'm distracted I'm in a bad mood when I get home stocks are down I'm like I can't take it I'm not a good dad I'm not a good husband a lot of times when I get home but I'm way better when I'm away and I carve out that time. So I'm super intentional about it and I'm a big believer in it. And I can't tell you how much I agree with that. And my kids who are now grown, they still reference trips that I can't even believe they remember. Like they'll randomly out of nowhere, talk about a night we spent in Philadelphia because they remember that the hotel gave them fuzzy slippers and robes.

1:22:07And they thought that was the funniest thing ever. And they like, we took pictures of them. And they'll still like just casually, it'll come up. And it's just unbelievable what they retain from those moments. From those moments. Because it's so different from the daily grind of this one has to be at school. This one goes to work. So I'm 100 % with you on that. I had to go to Japan last year for work. And I took, I took, I took the family, I took the kids. And my kids still like, they're just. For the rest of their lives. For the rest of their lives. Yeah. They still are just like Japan, Japan, Japan.

1:22:35They just thought it was the most, it was so clean. It was so techie. Everyone was so polite. They're just obsessed. Yeah, I love that. All right. Well, John, you did great on the show. We love hanging with you. I want to tell people where they can follow you or find out more about what you do. Give us some URLs that we could send people to. Some URLs? Like your website, your social media, wherever. www.investmentgroup.com. Let's say somebody listened to this and they're like, oh, that guy knows what he's talking about. I want to learn more. Where do they go? Okay, so Virtus is our parent company.

1:23:09and they own a bunch of affiliates. NFJ Investment Group is one of the boutique managers. You can find us through the Virtus website or NFJ Investment Group. I'm going to tell them to call Joe Terranova's cell phone. A hundred percent. You can call Joe. I should call him right after the show. And he will text you prospectus. All right. All right, dude, that's awesome. And so it's NFJ. Yes. Okay. And are you doing social media? Like what are you, you're on LinkedIn? I'm on LinkedIn. I've got Twitter, but I've got a nascent following. I need to probably work on that a little bit. No, no. Yeah. Yeah.

1:23:38Okay. LinkedIn's where it is. LinkedIn is the only social network that matters professionally. Instagram is the only way that matters to keep up with your friends and family. Yes. And you do not really need to go back to the past. My wife manages the Instagram. I manage the LinkedIn. Perfect. You got a nail. All right. Thank you so much, guys. Thank you for listening. Ratings and reviews, please. They go a long way. We love you for them. Great job this week. John, Duncan, Nicole, Graham, Rob, Keith. I mean, so many. Daniel, who else? Did I get in the call? I zoned out. You guys zoning out? All right.

1:24:13Here. Good night. We'll see you soon. Thank you. All right. Was that fun? That was awesome. That was awesome.

1:24:36That was awesome. Thank you.