Economic Commentator (4:23)

Looking at the state of the economy now, right, we look at global trade, did it need to be changed? Yes. Did it need to be blown up? I mean, there's, there's plenty of skeptics on that. I wonder, when, as you look at it, what do you think would have been the most effective way to get some tr. Some of these trade solutions from country to country or from a global standpoint.

Financial Analyst (4:50)

This may be a little bit controversial. I, I don't completely disagree with what President Trump has done done in terms of imposing tariffs to get the ball rolling. Because I think if you went to any country and said, look, we don't like the terms of trade, let's talk, they'd laugh at you. They'd say, go away. So the only way you're going to get people to change the terms of trade is to put a bazooka to their heads. What I don't like is the chaos. We're in and we're out. We're out, then we're in. Here's our tariffs, and then there's our tariffs. We're taking it away, we're putting it back. That causes too much. That's, that's, that's not my, that's not my strategy. You know, by. President Trump, loves, loves chaos, but everybody, most people in the world don't. So that's where I would disagree.

Economic Commentator (5:39)

If you were building your big, short portfolio today, what's the One trade that looks almost inevitable to you that will pan out over the next four or five years.

Financial Analyst (5:48)

I have no trade that I think would pan out immediately within the next year.

Economic Commentator (5:53)

Okay, what about four to five?

Financial Analyst (5:55)

Four to five? I, I still think that most of the technology traits that people have, you know, whether it's in video or Microsoft, any of the well known will. Will be great because I think we are still in the very, very early innings of AI. Very early innings. We're like inning one.

Narrator (6:14)

Yeah.

Financial Analyst (6:16)

So, you know, between now and inning nine, it's going to be a bit of an adventure. But I think if you stick it out, you'll make a lot of money. What's going to happen within the next six months because of all the trade negotiations, I wouldn't have a clue. And I just would say you need to keep your risk lower. I would not try and be a hero right now. I don't think, you know, some people would argue that, you know, the markets come down a lot, so valuations are better and well, of course the market's lower, the valuations look better. That's the tautology. The problem is that if you go into a global recession, all the earnings estimates are going to come lower. So then it doesn't look so cheap. On the other hand, if most of the countries settle with, with the United States and then everything is fine, it'll have been a great time to buy. But I can't handicap that.

Economic Commentator (7:05)

How much risk are you keeping on the table? If I may follow up, in my.

Financial Analyst (7:09)

Own personal portfolio, I have about 15% cash right now.

Economic Commentator (7:13)

Okay.

Financial Analyst (7:14)

Which is a lot for me.

Interview Host (7:17)

Are you.

Financial Analyst (7:17)

I'm very long term. What I have done is I've gone through my personal portfolio and any stocks where I said, do I really love this? Why do I really own this?

Economic Commentator (7:31)

Let's trim a little.

Financial Analyst (7:32)

Is there any thesis creep, get rid of it. So that was the first thing I did. Then I took a lot of things just lower. But like I said, on long term, the problem with like let's say liquidating your portfolio if you wanted to go to an extreme is you got to pay over 35% capital gains taxes. So do I think the market's going to go down 35%? I mean, it could. I mean, if we have a global recession, it's not impossible, but it's a lot. So I'd rather just trim some risk and just sit on the sidelines and sit and wait till it's. And look, if things get better, if you miss the first 5%, move so what, you know, if things, if all the trade stuff gets settled one way or another, you know, it'll be a bull market again for years. So who cares if you miss the first week?

Interview Host (8:24)

Yeah, the dollar is, I think it hit a three year low. Is that something that's concerning to you?

Financial Analyst (8:33)

You know, let's, let's do the doomsday scenario that some people like to paint. So the doomsday scenario would be like the US deficit is too big. People are not going to see U.S. bonds as the safety vehicles that they once were. So they're going to sell the US Bonds and that of course causes the dollar to go down and something else will replace the dollar as a reserve currency and there goes the United States is a great empire and it's Armageddon and cats and dogs are lying together and whatever else happens in Armageddon, depending upon your religion. But I think what people don't. And by the way, that thesis has only been around for 40 years. So I remember in the 90s Pete Peterson, who had been one of the founders, I think of KKR was talking about how the deficit's way too big and it's a disaster and God help us, et cetera. And that was in the 90s and here we are 2025. We're all still pretty healthy. What I think people miss and by the way, I can't talk. What happens short term to the dollar? What happens short term to people? Trading in bonds is not something that particularly interests me. So the fact that the dollar has sold off has I think got a lot more to do with hedge funds repositioning, de risking, looking for safe havens. But long term, what I think most people don't recognize is that the financial system of planet Earth runs on Treasuries. Banks, for example, lend to one another overnight in what's called the repo market. And the repo market is only trillions and it's all at overnight Treasuries. To make an argument that the dollar is going to lose its reserve status, I think you have to make an argument that there's going to be some sort of substitute for Treasuries, especially short term Treasuries. And right now there's no substitute for short term Treasuries. I mean banks are not going to park their money in Chinese bonds. There's no euro bond of any real significance. There's no alternative. So as long as there's no alternative, it's not something I particularly worry about all that much. Even though people like to talk about it on CNBC and paint doom and gloom. Listen, I predicted doom and gloom once. Once was enough. I'm not interested in predicting doom and gloom again unless I really, really seriously thought it was possible.

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