'Barbell' Investing Strategies With Jurrien Timmer

Summary

Podcast Summary: "Masters in Business"

Episode: 'Barbell' Investing Strategies With Jurrien Timmer
Host: Barry Ritholtz (Bloomberg)
Guest: Jurrien Timmer, Director of Global Macro at Fidelity
Air Date: October 10, 2025

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Overview

This episode features an in-depth discussion between Barry Ritholtz and Jurrien Timmer, Fidelity’s Director of Global Macro, covering the evolution of investing strategies, especially the concept of "barbell" investing, the post-60/40 portfolio landscape, and how global macroeconomic forces shape investment opportunities. Timmer shares personal insights from his international upbringing, decades-long career, and the importance of blending technical and fundamental perspectives. The episode also explores shifting correlations, equity cycles, the future of inflation, and overlooked asset classes like gold.

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Key Discussion Points & Insights

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Jurrien Timmer’s Background & Evolution in Finance

(02:40 – 07:30)

• Timmer grew up in Aruba and later moved to the U.S. for college, initially considering architecture but choosing finance at Babson College.
• He started his career in fixed income at ABN, taking the only U.S. job available to a Dutch citizen on a practical training visa.
• Quote: "You take the job that's offered and make the best of it. You play the hand that's dealt." – Jurrien Timmer (04:59)
• Timmer attributes his longevity and adaptability in markets to his foundation in fixed income, noting its importance for both equity and macro investors.
• His visual approach to markets led him to technical analysis and producing hand-made chart reports in the early days.
• Recruited by Fidelity in 1994 as a "fixed income technician," a rare specialty.
• Pivoted from technical analysis to a multidisciplinary, global macro role, adapting to the needs and language of fundamentally-focused portfolio managers.

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Role at Fidelity & Global Macro Philosophy

(09:49 – 12:29)

• Timmer describes his role as “Director of Global Macro” — overseeing global top-down analysis across all asset classes, excluding individual security selection.
• He deliberately fused charting with macroeconomics to bridge the gap between technical and fundamental perspectives for portfolio teams.
• Quote: "A chart’s a chart. I’m going to weave a broader approach to this." – Jurrien Timmer (10:22)
• Emphasizes that fundamentals inform “what and why," technicals inform “when and how much.”

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International Perspective & Its Influence

(12:29 – 15:34)

• Timmer credits diverse upbringings (Dutch, Aruban, American) and a globetrotting lifestyle with fostering a "global citizen" worldview.
• Seamlessly integrates cultural awareness into investment perspectives, organizing multicultural collaborations even outside of finance (e.g., running an international food camp at Burning Man).
• Quote: "I feel at home in almost any place in the world...you’re just used to having all these different cultures in the same space." – Jurrien Timmer (14:09)

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Bonds, Yield Curves, and Fiscal Dominance

(18:13 – 25:03)

• Explains how Treasury yields, stuck between 4–5%, create equity headwinds once above 4.5%.
• Discusses the return of positive correlation between bonds and stocks since COVID, reminiscent of pre-1990s markets.
• Quote: "It was rising yields that caused the problem in the stock. And so there’s a whole broader conversation about the 60/40." – Jurrien Timmer (18:13)
• Fiscal dominance: The U.S. is using deficit spending to try to outgrow the national debt, leading to higher Treasury supply, potentially higher yields, and new equity risks.
• Money market funds’ rise isn’t just cash “waiting” to return to stocks—it’s a function of yield disparity between deposits and MMFs.

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Equities: Valuations, Secular vs. Cyclical Markets

(26:05 – 42:12)

• Notes the divide between the high-valuation “Mag 7” tech leaders and the broader market (cap-weighted PE vs. equal-weighted).
• Draws historical parallels to the late-1990s and previous secular bull markets: periods defined by sustained multiple expansion rather than immediate fundamental improvement.
• Quote: "Over the near term, a high PE has very little to say about the next year or two...It’s a tough game to time the mean reversion of PEs." – Jurrien Timmer (27:59)
• Dates the start of the current secular bull to 2009 rather than 2013, based on a broad confluence of chart and fundamental signals.
• Behavioral aspects: The 2009–present bull was “the most hated” in market history, fueled by persistent skepticism and negativity even as markets rallied.
• Quote: "You can be 100% correct about the economic cycle and be 100% wrong about the market. Because if it’s already been reflected..." – Jurrien Timmer (48:38)

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Current Economic Cycle, Labor Markets, and Sentiment

(43:44 – 47:36, 57:05 – 62:27)

• U.S. household and corporate debt levels are relatively healthy; stress concentrated on the government’s balance sheet.
• COVID upended traditional business cycle signals; labor markets balanced out as post-crisis supply/demand normalized.
• Widespread negative consumer sentiment, as captured by Michigan and other surveys, is seen as anomalous and possibly politically polarized, not truly reflecting hard economic conditions.
• Quote: "I think a lot of the sentiment data are still driven by the inflation data. ...Everything remains more expensive—that COVID spike has not been unwound." – Jurrien Timmer (57:47)
• Inflation target: Argues there’s nothing inherently magical about 2% inflation; long-term averages have been closer to 3%, and markets function well with inflation in the 1–4% range.

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Global Market Leadership and the Barbell Concept

(53:09 – 57:05; 69:04 – 72:29)

• U.S. relative outperformance has transitioned into a global bull market—earnings growth and payout ratios in non-U.S. stocks (like Europe and Japan) now rival or surpass the U.S.
• The "barbell" strategy: Remain exposed to “Mag 7” leaders, but complement them with compelling international value opportunities, rather than just shifting to small/mid cap domestically.
• Quote: "Rather than going down cap...gold seas, do a barbell of Mag 7 and non-U.S. stocks. Then you can play the dollar, get equally good fundamentals for a 15 PE instead of a 24 PE." – Jurrien Timmer (56:31)

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Post-60/40 Portfolio & Alternative Assets

(72:29 – 76:16)

• Traditional 60/40 stock-bond portfolios worked due to negative correlations, which may not hold as bond yields become positively correlated with equities.
• New paradigm: Proposes 60/20/20 barbell, where the “20/20” includes cash, gold, alternatives (managed futures, long/short, private credit), and even Bitcoin.
• Quote: "If the 40 can be the cause of problems rather than the solution...then I get into okay, I’ll take some share from the bonds...Maybe some cash, gold, Bitcoin..." – Jurrien Timmer (73:52)
• Key for investors: Seek high Sharpe/Sortino ratios with uncorrelated assets.

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Gold, Bitcoin, and Overlooked Assets

(76:37 – 80:54)

• Gold is emerging from a long period of underinvestment, especially among institutional investors.
  • Despite its rally, Timmer notes it’s still treated as a “sideshow” by many institutions.
• Compares gold to early Bitcoin in its outsider status, but expects increased allocation as gold’s value rises.
• Evaluates gold’s valuation in relation to global money supply (M2); the two have historically tracked, and further expansion could justify higher gold prices.
• Quote: "Gold is kind of like where Bitcoin was ten or five years ago—people dismiss it, but if it keeps going, endowments will have no choice but to figure it out." – Jurrien Timmer (77:47)

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Notable Quotes & Memorable Moments

• "A chart’s a chart. I’m going to weave a broader approach to this." — JT (10:22)
• "You play the hand that's dealt." — JT (04:59)
• "It was rising yields that caused the problem in the stock. And so there’s a whole broader conversation about the 60/40." — JT (18:13)
• "You can be 100% correct about the economic cycle and be 100% wrong about the market." — JT (48:38)
• "Rather than going down cap...gold seas, do a barbell of Mag 7 and non-U.S. stocks." — JT (56:31)
• "Gold is kind of like where Bitcoin was ten years ago...if it keeps going, endowments will have no choice but to figure it out." — JT (77:47)

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Timestamps for Important Segments

| Timestamp | Topic / Section | |-------------|------------------------------------------------------| | 02:40-07:30 | Timmer’s origin story, early career, and move to Fidelity | | 09:49-12:29 | The meaning of "global macro" and multidisciplinary analysis | | 18:13-25:03 | Treasury yields, fiscal dominance, changing market correlations | | 26:05-42:12 | Equities: valuations, secular bull markets, cycles & psychology | | 43:44-47:36 | Economic overview, labor markets after COVID | | 53:09-57:05 | The new global bull market, “barbell” between Mag 7 and non-U.S. | | 57:05-62:27 | Sentiment, inflation, and the 2% target | | 69:04-72:29 | U.S. vs IFA fundamentals, global shareholder yields | | 72:29-76:16 | Building the modern portfolio—post 60/40 approaches | | 76:37-80:54 | Gold, Bitcoin, and overlooked institutional assets |

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Listener Takeaways

• The world of asset allocation is undergoing a paradigm shift as positive correlations return between stocks and bonds, urging investors to go beyond 60/40.
• A barbell approach—balancing concentrated growth (U.S. tech giants) with international value opportunities—is Timmer’s preferred global equity stance.
• Gold, after years in the background, may be on the cusp of institutional acceptance as global debt and money supply expand.
• Humility, adaptability, and global perspective are recurring themes—both for professional growth and portfolio construction.
• High market valuations and negative sentiment do not necessarily presage near-term declines; context, cycles, and allocation flexibility are more important than static dogmas.

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This summary captures the key ideas and flow of the conversation between Barry Ritholtz and Jurrien Timmer. For full nuance and anecdotal color—plus Timmer’s chart discussions and book/TV recommendations—listen to the episode in its entirety.

Transcript

[Barry Ritholtz]

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[Barry Ritholtz]

On the latest Masters in Business podcast. An amazing Conversation I sit down with Urian Timmer. He's the director of Global Macro at Fidelity. They touch about 50 million separate clients. What an amazing conversation. Urian has been started out in fixed income before he became a market technician. Now Global Macro is his beat, which means he covers everything US Overseas equity, bonds, commodities, economic data. I thought this conversation was fascinating and I think you will also. What a depth and breadth of knowledge. With no further ado, my conversation with Fidelity's Yurian Timmer. Yurian Timmer, welcome to Bloomberg.

[Jurrien Timmer]

Thank you very much, Barry.

[Barry Ritholtz]

I've been looking forward to this. I've been consuming your stuff for it feels like forever. I'm a big fan of what you do, but before we get to your work at Fidelity for the past three decades, let's talk a little bit about your background. You get a bachelor's in finance from Babson College. What was the original career plan?

[Jurrien Timmer]

Well, so I was born and raised on the island of Aruba in 1962, when Aruba was still very small and Sheltered. And as a Dutch citizen, now also an American citizen, but, you know, generally the kid. The Dutch kids would go to Holland to go to higher education. But I was in love with the American culture. I met many tourists on the beach, and so I wanted to go to the States and do the American thing. And then my father, who was an importer of construction materials, et cetera, he had contacts in Boston. They said, okay, well, you should send your kid to Babson because it's small, he won't be overwhelmed as an international student. And I've always wanted to be an architect, but then in the last year before finishing high school, I'm like, I don't think I'm good enough to be an architect, so let me do business. And I figured, you know, there's always something you can do with a business degree. And so I studied finance with a minor in investments. And then, you know, I graduated with no work permit. Right. So I was in that place where you need to have obviously a work permit. So back then, I don't know if it's still the case, but back then you got one year practical training visa and then you had to go, you know, get a, get a real, a real visa. So I took literally the only job that was offered to me in the United States. So I applied to every Dutch company. I figured at least they'll have maybe some sentimental reasons to hire a Dutch person. I could have worked in Holland, of course, but I wanted to be in the States. So the Dutch bank abn, which later became ABN Amro, hired me. I went to New York into their corporate banking credit program in which I had zero interest. But it's like, this is the job, no pun intended.

[Barry Ritholtz]

But you eventually become pretty senior in the fixed income group at abn.

[Jurrien Timmer]

Yeah, so I was very lucky. And again, it's sort of you take the job that's offered to you and you make the best of it. You play the hand that's dealt. And literally within a few months, ABN set up a capital markets group because we were the primary dealer in New York together with LaSalle National bank in Chicago for the HQ in Amsterdam, which of course was one of the world's largest banks at the time and a very large treasury book. And so I was the person who would execute the trades for hq. So I became a client of Solomon Brothers and Smith Varney and Goldman Sachs, et cetera. And so I got into the Wall street game and I learned everything about fixed income. And to this day, if you're either a stock Market person or a global macro person. Having a foundation in fixed income is so important.

[Barry Ritholtz]

It's so true. You say that some of my favorite stock analysts began as bond analysts because they're concerned about return of capital, not return on capital. And it focuses them very much on staying away from the speculative nonsense. And it's been very consistent over the years. I have a list of some favorite people in that space. So. So you start out in fixed income. When did technical analysis and becoming a CMT arise in your journey?

[Jurrien Timmer]

So I was at ABNMU in New York for 10 years. And so I'm, you know, I'm there executing trades, learning about the markets, watching my Teller 8. And the Bloombergs were still. There were the quad screens with the amber.

[Barry Ritholtz]

Right.

[Jurrien Timmer]

And you know, I just. I've always been a visual person. And so I started gravitating towards charts. And, you know, charts are kind of the mainstay of what I do. Even now, 40 years later.

[Barry Ritholtz]

40 years later.

[Jurrien Timmer]

It's crazy. And I like to write. I think I get that from my dad, who's a great writer. And so I always had this kind of urge to put pen to paper and to show charts. And so I just started writing a newsletter for the people in my universe at the time. And, you know, it would be like charts from CQG cut out, taped onto a typed report, and then faxed to people. Like, that's what the technology was back then. And so it was. So that's how it started. And then I ended up, you know, getting the chartered market technician, although that may have been during the Fidelity years.

[Barry Ritholtz]

So. So how did you go from ABN AMRO to Fidelity? When was that?

[Jurrien Timmer]

So, so the culture of abn, am not to spill any beans, but this is a long time ago.

[Barry Ritholtz]

30 years ago.

[Jurrien Timmer]

30 years ago, I didn't like where it was going. So ABN had a bank in Chicago and they saw what a profit center in New York was, so they wanted me to work for them, become a commission salesman. And I'm like, it's not what I do. And just coincidentally at that time, Fidelity came looking around, looking for the most obscure job in the world. A fixed income technical.

[Barry Ritholtz]

Right.

[Jurrien Timmer]

I mean, talk about a narrow field. Right.

[Barry Ritholtz]

Very specific.

[Jurrien Timmer]

So that was in 1994. Around that time, you know, I was kind of looking around and. And I had two major career highlights within six months of each other. Because in 94, I was approached by Paul Tudor Jones's company.

[Barry Ritholtz]

Oh, really?

[Jurrien Timmer]

And so I had a meeting with Paul in his office downtown New York with this giant tellerade on the screen. And we were looking at the bond chart 94, the bear market.

[Barry Ritholtz]

Right. And he very famously had called the 87 crash before.

[Jurrien Timmer]

And he was, do you think that's a fourth wave? And we were having that conversation. That was great. And then I was approached by Fidelity and I ended up going with Fidelity. But the last interview of that process was with Ned Johnson.

[Barry Ritholtz]

Oh really?

[Jurrien Timmer]

And so I spent the founder, I spent an hour with him in his office talking about Parkers because I was hired to go into the chart room. And at Fidelity nobody got into the chart room without Ned's blessing. Right. Because.

[Barry Ritholtz]

And back then were they still doing charts by hand?

[Jurrien Timmer]

Yep.

[Barry Ritholtz]

Amazing.

[Jurrien Timmer]

And so anyway, so that's how the Fidelity career started. And it was interesting because this is now early 95 and of course 94 was that bear market. We had the so called Tequila crisis in Mexico. And so the new mandate from upstairs in 95 was we're not making any duration bets. You just stick to your bottom up, you look at credits and I'm coming in there as a technician and what am I supposed to. There really is nothing for me to do. And so at that point I kind of reinvented myself and became multi asset and I went to the equity side and anyway, so that was the second.

[Barry Ritholtz]

When you say multi asset, I think you're the only person in all of finance with the title Director of Global Macro. Global means around the world. Macro means 30,000 foot view. Is everything out there in your jurisdiction?

[Jurrien Timmer]

Pretty much. So I don't do security selection. We have armies of very talented.

[Barry Ritholtz]

But you do stocks, bonds, alts, crypto, commodities, gold, you name it, everything.

[Jurrien Timmer]

But it's top down as well as.

[Barry Ritholtz]

Economic data, interest rates, employment, etc.

[Jurrien Timmer]

And that's how I transitioned from being a technical strategist to being more kind of multidisciplinary. Because I quickly learned at Fidelity as I was roaming the halls pitching ideas to. To portfolio managers who generally are fundamentally oriented. It's like I'm speaking a different language. So Fidelity's always had a lot of technical analysts and the chart room, but I had to reinvent myself again and pivot towards at least speaking their language. And a chart is a chart, right? It can just be a bar chart of the S and P, or it could be of the P E ratio or earnings or monetary policy. So I figured a chart's a chart. I'm going to weave a broader approach to this. And that's where I came up with the title.

[Barry Ritholtz]

So Whenever I see a technician and a fundamental analyst having a discussion, somewhere along the line someone says, look, I'm a technical analyst. I'm just telling you what's going on in the battle between supply and demand. It's up to you to create a narrative around that. You tell us what's going on. Fundamentally, I don't know, but I could tell you who's winning, the buyers or the sellers.

[Jurrien Timmer]

Yeah. So the fundamentals tell you kind of the why, maybe the what and the why, and the technicals tell you kind of the when and the how much it helps give you conviction. And generally speaking, we use technical analysis like our equity PMs do. Like they're obviously going to have an idea about a company and what their long term prospects are, but then our technical analysts will say, okay, well, you've rated the this stock A1, meaning strong buy. But the chart looks like hell. You should be aware that what's happening is not the same as what should be happening. And maybe it takes time, but it's a second opinion, which can be very helpful. And the other way around as well. A chart looks amazing, but it gets a really poor fundamental ranking. And we also have a quantitative dean that does a quant overlay as well.

[Barry Ritholtz]

So we talked about global macro. I'm curious, you're a Dutch citizen originally born and raised in Aruba, now a citizen of the US for the past 25 years. How does that international upbringing affect how you see the entire world of assets?

[Jurrien Timmer]

Yeah, it's a great question. I do think that I've been privileged to grow up in a very diverse environment. Like if you look at old high school pictures, I'm like maybe one of two white kids in there. Everyone else is different shades, but so very, very diverse. And so I think, and also just going to different countries and learning different cultures or being exposed to them, I think it's helped me. Like I view myself sort of as a global citizen.

[Barry Ritholtz]

Well, you're a Globetrotter, you're in the U.S. you were in California, you're in New York. Boston. You going to where? What's your next few stops? London.

[Jurrien Timmer]

I'm flying to London on Saturday. I'll be in Geneva after that. And then we were just in Lake.

[Barry Ritholtz]

Geneva a year ago. Spectacular.

[Jurrien Timmer]

And then actually we're going to Holland because my parents are, they live in the Hague. They're celebrating their 70th wedding anniversary. So they're, they're 91 and 97. So we got three generations of Timur descending on the Hague in about A week and a half. And I like, I think we're. But I feel at home in almost any place really in the world. And you know, when it's hard to understand what someone says because the English is not their first language, you can kind of like, you figure it out because you just kind of used to this, you know, this environment where everyone's coming from different places and like, you know, even now, like I run, and this is totally separate topic, but I run a food camp at Burning man. And it's a very global camp. We have 90 people, we all cook meals that we gift away to the artists there. But we have like 30 Brazilians and we have like French and Swiss and Mexican people and obviously Americans. And that like it's easy to do because you're just used to having all these different cultures in the same space.

[Barry Ritholtz]

So I'm kind of fascinated by the new. I don't love the earbuds, they're not comfortable in my ear. But the new AI enabled instant translation that is Star Trek next level futuristic. I can see that saying, oh, you want to go to Japan or Korea or China? Here you go, knock yourself out. That sort of technological innovation is that, that turns that into a must have technology.

[Jurrien Timmer]

Yeah, for sure.

[Barry Ritholtz]

How many languages do you speak?

[Jurrien Timmer]

I speak obviously Dutch is my native language. English, I used to be totally fluent in Spanish, but I've kind of lost that. And then of course there's the world language called Papiamento, which is what they speak in Aruba, which is essentially kind of a Spanish Portuguese blend. But if you don't know a word, you can just say it in Dutch or English and it means. And it's completely acceptable.

[Barry Ritholtz]

Really fascinating. Coming up, we continue our conversation with Yurian Timmer, Director of Global Macro at Fidelity, discussing various asset classes, equities, bonds, commodities, alternatives. You're listening to to Masters in Business on Bloomberg Radio. Masters in Business is proud to be brought to you by A. Lange and Sona. Inseparable from the history of fine watchmaking in Saxony since 1845. The Lange philosophy, defined by Walter Lange himself, is simple. Never stand still. Their commitment to detail is so rare, so exquisite, that every watch movement is assembled twice the first time to ensure perfect mechanical function. Then it gets completely disassembled, fully decorated by hand, and brought together again with meticulous finishing and hand engraving. The result, a timepiece built not just to keep time, but to honor it. Alanga and Sona, a dedication to craftsmanship and tradition that never stands still. There are two kinds of people in the world, people who think about climate change and people who are doing something about it. On the Zero podcast, we talk to both kinds of people. People you've heard of, like Bill Gates.

[Jurrien Timmer]

Amokin at what the world has to do to get to zero, not using climate as a moral crusade, and the.

[Barry Ritholtz]

Creative minds you haven't heard of yet. It is serious stuff, but never doom and gloom. I am Akshat Ratty. Listen to Zero every Thursday from Bloomberg Podcasts on Apple, Spotify or anywhere else you get your podcasts. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My guest this week, Urian Timmer, director of Global Macro at Fidelity. They touch about $16 trillion in assets and have discretion over 6.4 trillion. So we were talking about what a globetrotter you are. Let's trot around the world and talk about various asset classes since you began your career with bonds. Let's, let's start with bonds. How do you see what's been going on with treasury yields anticipating not only the 25 basis cut point we had in September, but perhaps a couple more this year and next?

[Jurrien Timmer]

Yeah. So treasury yields, such an interesting market right now. We've been stuck sort of between 4 and 5% for a while. For a while. And when we go above 4.5%, it's like nothing good happens. The old Fed model from the Greenspan days comes lurking back and it starts to wobble the stock market because the bond yield and the equity yield are about the same right now. And so that takes you back to the 80s and mid-90s and even the 70s and 60s where bonds to stocks were positively correlated instead of negatively correlated. That began during the Great moderation era, late 90s until Covid, basically. And then in 2022, of course, the correlation flipped back to positive. It was rising yields that caused the problem in the stock. And so there's a whole broader conversation about the 60 40. But just dealing with Treasuries right now. So as you get close to five, it really starts to freak the stock market out. But also the bond buyers start to emerge because there's value. Right.

[Barry Ritholtz]

I mean, real rates, 5% yields over.

[Jurrien Timmer]

2.5% inflation, you're actually making this back into fixed income. Right. But down at 4, when you have a gross scare kind of like, I mean, I wouldn't say it's growth scare.

[Barry Ritholtz]

But the jobs are there's some nervousness and some, I hate the word uncertainty, but there's a lack of clarity as to how all these things tariffs yield, FOMC plays out.

[Jurrien Timmer]

So at 4 generally I would be a better seller than a buyer. But this question of fiscal dominance, clearly the administration wants to grow out of the debt. I think that's the very overt plan if you listen to Scott Besant or.

[Barry Ritholtz]

Even they're pretty explicit about it.

[Jurrien Timmer]

And so they're trying to goose the economy and outrun the debt because everyone knows you can't really cut the debt very much because too much of the budget is not discretionary. And so that's the plan. And I think it's basically it's a good plan because what are the alternatives? Right.

[Barry Ritholtz]

Raising taxes and cutting spending, which we know what the odds of that happen.

[Jurrien Timmer]

Yes. But running kind of that fiscal train means deficit spending or at least that's part of it. And that means more supply and that could mean higher term premia for long Treasuries. And we've seen that. Right. The term premium during the QE financial repression days was like minus 150, which makes no sense. A risk premium should always be positive. And now it's plus 60, plus 70. But historically it's been plus 150 or even more. And so if the term premium mean reverts back to a normal level, positive level, because deficit spending and debt levels are rising, you could easily see a five handle on Treasuries. And a five handle on Treasuries are not going to sit well with equities like the equity market can go up, earnings can drive the bus, but the PE gets under pressure because the risk free asset is now competing with the risky asset and they're offering the same yield.

[Barry Ritholtz]

So quick question on that. In the 2010s or at least towards the end of the 2010s, we had an inverted yield curve for a while. What's the impact of that on that term premium or lack thereof?

[Jurrien Timmer]

Yeah, so we had that very inverted yield curve. Obviously it shouted recession and it didn't happen. And I think, I think the reason in hindsight was that the economy is just less interest rate sensitive than it used to be. So everyone refi'd their mortgage in 20, 20 and 21 at sub 3%. That's also why the housing market is frozen. But also if you look at the big banks, why is a yield curve inversion typically bad? Is because banks net interest margins goes upside down, they borrow short, lend long and so banks stop lending and you get a credit crunch and you get a recession. But in this case the large bank, if you notice your Deposit rate at the large mega center banks has not really gone up commensurate with the yield on money market funds. Right. So that deposit rate went up to a half a percent and is now coming back down again. So for a large bank, the yield curve not only was never inverted, it was extremely steep. Half a percent funding. If you're funding your loans on deposits and you're paying half a percent on those deposits and you can lend at 7 or 8% month, you'll do that all day long.

[Barry Ritholtz]

And yet at the same time, we've watched money markets go 5 trillion, 6 trillion, 7 trillion. It's become so easy with your app to move money from, hey, I'm going from Chase to Schwab, I'm going from Citi to Fidelity where I'm getting real yield. I wonder how much technology plays a role in people. It used to be a pain in the neck. Oh, I'm getting quarter percent in my checking account, but do I really want to write a check and mail it out and wait for the.

[Jurrien Timmer]

Yeah. So you leave money at the bank for convenience. You know, you got bills to pay, but if you have extra cash, you're buying a CD or money market fund or buying T bills or what have you, and it's a lot easier than it used to be. And so now you got 7 trillion in money market funds, which a lot of people actually think is money waiting to be invested in the stock market. But I don't think there's really a signal there because I think that money came out of the banks and probably will go back to the banks.

[Barry Ritholtz]

So some people, people have said, hey, as soon as the Fed starts cutting rates, it'll A, make the cost of borrowing cheaper for corporate America as well as American households, and B, is going to scare some of that money away. And it's got nowhere to go but equity. Fair narrative or kind of a lot of wishful thinking?

[Jurrien Timmer]

It could be a combination of both. But if you typically look at when money market fund assets swell like it did during the pandemic, it's money coming out of the stock market seeking a safe haven. And then when the stock market recovers, the money goes back in the stock market. That's not the pattern this year. The money came out of the banks in part because of the Silicon Valley debacle a few years ago, but also.

[Barry Ritholtz]

500 basis points of rate hikes in 2022. Exactly.

[Jurrien Timmer]

So money markets went from zero to five and a half, suddenly attractive, and deposits went from zero to half. So money markets yielded 10x the bank deposit. And so some of that may go to the stock market, but it didn't come from the stock market, let me put it that way.

[Barry Ritholtz]

So you noted something really interesting. I remember you wrote in 2022, bonds went from being a port in the storm to the storm itself.

[Jurrien Timmer]

Yes.

[Barry Ritholtz]

So normally we think of money leaving equity and going in the safe harbor of money markets. Were we seeing money exiting bonds and going to money markets? Is that what happened?

[Jurrien Timmer]

Was it a duration plus from among the typical investors? We have not really seen an exodus at all. And I think part of that is just the demographics of the baby boom. Solving for income more so than growth. So when you look at fund flows into fixed income, they've remained strong and they were strong at 1% and they're strong at 4%. So I think that is more of a structural trend than playing the markets, if you will. Like I think the average investor is not looking at. Okay, well real rates are now positive. So let me do this. But they're solving for outcomes, they're buying solutions. Based funds like our target date will have certain amount of fixed income which.

[Barry Ritholtz]

Have just attracted so much money in 401 s over the past 20 years. It's amazing. So let's talk a little bit about equities. I keep hearing people complain about valuations, but if you you stayed out of equities due to elevated valuation, you missed most of this run from the 2013 breakout.

[Jurrien Timmer]

Yes. So the market obviously is very bifurcated. We got the mag7, the cap weighted pe is 2324. The equal weighted pe is 18. So there's a very large gap there. If you look back at the mid to late 90s, which is kind of an analogous period to today. We had the 94 stealth bear market when Greenspan raised rates 300 basis points. Then he gave back 75. And we had a huge rally. And it was also the start of the Internet boom. The Netscape IPO I think was like in 1996. So the post2022 period, very analogous to post1996 soft landing, ease off the brakes, markets rip. And then the post 98 long term capital, that 22% decline, very robust recovery. And then Greenspan eases three times into that recovery. We're seeing the same thing now. We had a 21% tariff tantrum. No recession, the kind of the administration backed off. Very, very strong. One of the strongest ever recoveries from a 20% decline other than 1998. And then now Powell's easing into that. But the point is that that period saw almost non stop multiple expansion and that's what we've seen since 2022. And you know, PEs are, they are strong predictors of long term return. So if you take a 10 year CAPE ratio and you regress that against 10 year forward returns, you see a very high, it explains the forward returns very well. But over the near term a high PE has very little to say about the next year or two. And this is because the market tends to be in a rising trend. Momentum begets momentum and that's what we're in. So it's a tough game to time on the mean reversion of, of PES evaluation even though we know that historically it's between 10 and 30 and it does mean revert. But when the mean reversion starts and from what level is very, very difficult to do. Especially during secular trends which I think.

[Barry Ritholtz]

We'Re very clearly in so, so many different places to go with this. I have a dozen questions. Maybe we'll go a little long the segment and delve deeper into equity. I love the concept of a secular bull market as opposed to a cyclical, but I think a lot of people don't really understand the difference. Give us your definition of what is a secular bull market, when this one began and why.

[Jurrien Timmer]

Yeah, so we have the market cycle which is generally driven by the business cycle. So you have a recession and you have the early cycle recovery where things get less bad. And of course the market is always anticipating that. Right. The market's always in price discovery. And this is why at bottoms price will lead earnings which is why the PE always goes up in the first year of a bull market like it always does. And it doesn't make sense on the surface. People are like, oh, this can't be real. It's all PE driven. Where are the earnings? Well, the market's just front running the earnings. But then there are the secular trends. And if you go back 100 years, you can see them, you can spot them very easily because the market has a kind of Central trend line plus 10% nominal plus 7, 6 and 3/4 real. And if you run a regression trend line against the total real return of the S and P or some basket of stocks going back 150 years, it's like perfect. And then you have the pendulum swinging above it and below it.

[Barry Ritholtz]

So you have very noisy, but still the overall trend is being maintained.

[Jurrien Timmer]

But you have these super cycles where you're outperforming the trend line. So the 80s and 90s was one of those. So instead of a 10% return, we got 18% returns for like 18 years. The 50s and 60s, after World War II, the 20s, that was a truncated one. But from 20 to 29, boy did that thing go. And since 09 is where I put it, other technicians generally disagree with me. They think it was 2013. When you look at the Cape model, you look at deviation from trend, you look at the slope of those early trend lines. For me, it's.09, which puts it at 16. And of course, and then you have the secular bear markets. Right. So the 2000s was one, the 1970s, very famous. Of course, 1930s doesn't mean the market necessarily goes down, but it's underperforming that 10% trend line. And generally, in real terms, it's probably going down. And so that's kind of how I define find the secular trend.

[Barry Ritholtz]

So we are in agreement on so much stuff. I'm going to circle back to 09 and push back a little bit. But you mentioned that first year you get a PE spike as the market anticipates improving earnings. One of the things that's kind of fascinating is to see how much of a bull market's gains are attributable to not improving fundamentals, but multiple expansions. From 82 to 2000, what was it? Three quarters of the gains were multiple expansion. How much of that is psychology and how much of that is just people getting on board late as the market rallies?

[Jurrien Timmer]

It's both. But yeah, for instance, in 82, the PE was like 7. And in 2000, and what was the yield in 82? It was double ditches, almost 20%. A lot of competition. And then in 2000. Yes, exactly, exactly. And in 2000, the PE was 35, using operating earnings. That was the forward PE, actually, the trailing PE was like 45. So that's a hell of a pendulum swing. And, you know, obviously 1982, inflation was very high. They had the malaise of. In the economy, bonds were very competitive. Nobody wanted to pay for earnings.

[Barry Ritholtz]

The death of equities, which was a few years earlier on Death of Business Week.

[Jurrien Timmer]

Death of equities, yes, for sure. And then people become more comfortable and then they go from comfortable to confident. And then it's like, yeah, I'm going to pay 20 or 25 times these earnings. And then of course, then you have the growth, the growth stocks. So the late 90s, obviously were, you know, I used to call them the Janus 20. There was a fund that would just the most Stocks.

[Barry Ritholtz]

And so I remember the Ryan Net net funds around that.

[Jurrien Timmer]

Exactly. And of course right now it's the Mag 7 formerly known as the Fangs. And those are secular growers. Right. And there's a theme, right? It was Internet back then. It's AI now. And people get onto the bandwagon and it's like, yeah, you know, I'll pay 35 times earnings for a company that is in this space and is going to grow their earnings in a secular way, not a cyclical way. And so it's totally plausible and understandable. But at the end it goes too far and I don't think we're anywhere close to that. But then you start looking for signs of froth. But yeah, but that's, that's the pendulum swing. So.

[Barry Ritholtz]

So let's talk about 09 and why so many of your technical brethrens dated to 2013, which was when all of the major indices broke out over their prior trading range. So the pushback I hear to 09 is, well, that's like dating the 82 to 2000 bull market to the lows in 73, 74. And you're still, all you're doing over that period is recovering the sell off 23rd, what we were down 56, 57% from October 07 to March 09. And then to get back to where you were in 07, it took till 2013. So why 09 as opposed to 13?

[Jurrien Timmer]

It's totally legit argument. But I would say a couple things. One is this is not an exact science, right. There's only been two or three or four secular bull markets. Right.

[Barry Ritholtz]

Small data set.

[Jurrien Timmer]

Small data set. It's not a quant model. You have to look at the chart, at the slope. So I date the secular bull market from the 50s. I date at 49. Even though 49 was not the low. Right.

[Barry Ritholtz]

The low was 46.

[Jurrien Timmer]

46, something like that. But in 49 something changed and the slope started to. The market found itself and that trajectory started to really compound at double digits and you broke out of that big shelf that was really from 29 all the way to 49 70s. The low was of course in 74. October 74 after 48% bear market. We had some other little cycles. But then in 82 it took off. There was a change in the fundamentals. Volcker broke inflation. And then you look at the. So then I get verification from the fundamentals. So I look at the charts and yes, I see the argument and I agreed, it's a good point. But in 09 the market just went straight up after a decade of sideways in 82. The market went straight up after a decade of sideways in 49. Same thing whether the low was in or not. And of course in real terms, the 82 low was below the 74 low because of inflation.

[Barry Ritholtz]

You really fell tremendously in the 70s.

[Jurrien Timmer]

So I want to get second opinions from the real chart and from the fundamentals. So the Cape model again where you compare the 10 year PE to the 10 year forward return looks very similar at the 09 and not similar at the 13 when the market already had a lot of momentum. And then the other thing I look at again, that 150 year regression trend line of the real S&P.

[Barry Ritholtz]

150 years.

[Jurrien Timmer]

Yeah. And so at secular peaks the market is about 100% above the trend line and at secular troughs it's about 50% below. So that point was in 09, it was not in 13. So I look at the weight of the evidence from a multitude of indicators and again, it's not an exact science. I'm not saying I'm right, they're wrong, but for me that's where I get.

[Barry Ritholtz]

But you've been a whole lot more.

[Jurrien Timmer]

Right than many other people and it's interesting. So in 09 I was actually running a fund back then of a global macro fund and I was like, the market was so depressed. Right. So remember March of 09?

[Barry Ritholtz]

Sure, of course.

[Jurrien Timmer]

And I'm like, I want to be long, but what if I'm wrong? And I'm like at this point if.

[Barry Ritholtz]

I'm wrong, so what, you're already down 50 cut in half.

[Jurrien Timmer]

Well, but at that point the whole system is going to collapse. So it's like, why not bet at that point? Um, and so yeah, when is down.

[Barry Ritholtz]

More than 50% in US markets? Not a great entry point.

[Jurrien Timmer]

Exactly.

[Barry Ritholtz]

I mean that, that's one thing, but I have to ask you a question about 009. So I was looking through some of my old notes as I was preparing for this and I have, I'm curious as to your thoughts on some of the behavioral aspects including sentiment and bull bear ratio. I wrote something up in October 09 calling that recovery the most hated bull market in market history. Markets went straight up, everybody was miserable. It's a head fake, it's a false breakout. This is all going to be a disaster. And if you listen to those people, you left a ton of money on the table. What's your thought on that extreme sentiment in one direction or the other? And just what it means when everybody hates a particular asset class, it's obviously.

[Jurrien Timmer]

An opportunity because that means that everyone is not on the same side of the boat. Right?

[Barry Ritholtz]

Or they're all on the wrong side of the boat.

[Jurrien Timmer]

But before I answer the rest of that, what I was going to say earlier was when you run the regression of the 09 to present S and P, either in real or nominal terms, and you run the same regression from 82 to 2000, from 49 to 68, it's exactly the same slope. And so if in 09 I got bullish and in 13 I'm like, yeah, now we've taken out the high, so now we can say this bull market is confirmed. So the 13 for me is not the start, but it's confirmation. But if I had looked at nothing else for the next, next 12 years, today I would be within 10% of that slope having materialized. And so again, you're never going to do that on a secular chart. You want to have weight of the evidence, but it shows you how powerful that context can be to just look at those different time frames and see where they are because it will keep you on the right side of the market. Market.

[Barry Ritholtz]

So, last question on equities. Given the 49 to 66 rally, the 82 to 2000 and then the 09 forward, how much legs does this secular bull market have? Can this go another five, six, seven years? And the other related question is how much of a reset does that giant fiscal stimulus of 2021, 222 build into markets?

[Jurrien Timmer]

It's a great question. And so on the surface of it, we're 16 years in the last two were 18 years. But again, sample size of two, you can't go with that. Right? But the Cape model again, which has been a very good long term model in terms of the 10 year CAGR for the market, suggests that the sort of the PE, the growth rate in the PE peaked in 19 for obvious reasons because it's a 10 year model. So 09 rolls off and then you have that peak and we've been holding steady at around 14, 15% 10 year CAGRs. That actually has another peak in about 20, 26, 7, 8. My guess is that that acceleration will be an AI bubble or it could be where it's just like the AI boom, the Mag 7. All of a sudden everyone's buying companies with no earnings because they're promising to be the next killer app and that sort of thing.

[Barry Ritholtz]

The next pets.com.

[Jurrien Timmer]

Yes. And my guess is that if we are heading into A fiscally dominant era or we're in it already. So we had 5 trillion of helicopter money in 2020. We now have another $5 trillion fiscal bill. If the next Fed post Powell is going to be just more dovish than the economics suggest in order to help fund that debt, then you could see inflation be structurally higher than 2%, maybe 3 to 4. And if the 10 year yield at that point goes to a 5 handle because the term premium is back, you can easily see a scenario where in a few years that Fed model principle of rising yields bringing down the PE is going to be the thing that flattens that secular slope. That doesn't mean like a 2000s like bear market. It doesn't have to mean that, but it could just be a flattening. Instead of running at 2x the 10 year rate of change, maybe you're at half X or something like that.

[Barry Ritholtz]

So generally speaking, when you see an elevated cape, it's not a sell signal, it's really a signal. Lower your future return expectations. Things are going to be a little more difficult, a little less easy sledding.

[Jurrien Timmer]

Yes, I think the next 10 years will be less, less robust than the last, but it doesn't mean they have to be negative at all.

[Barry Ritholtz]

You mentioned the 80s into the 90s in the post World War II era. It's kind of fascinated to look at rolling 15 year periods. The 15 years following 09 is the third best 15 year period in history. It's really amazing. Coming up, we continue our conversation with Yurian Timmer, Director of Global Macro at Fidelity, talking about crypto, gold, commodity alternatives and the state of the economy. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio.

[Jurrien Timmer]

Foreign.

[Barry Ritholtz]

I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Yurian Temmer. He is the director of Global Macro at Fidelity Investments, the giant firm helping to manage over $16 trillion in client assets. So, so let's talk a little bit about the current environment. You look at more than just stocks and bonds. You look at a lot of economic data as well and chart that. So how do you think where we are in the current economic cycle? How do you describe our location in the business cycle?

[Jurrien Timmer]

So generally speaking, the economy remains pretty solid. People are employed, their wages are exceeding the inflation rate at this point. Debt levels are not high, at least as a percent of gdp. Right. So the household debt to GDP ratio peaked during the financial crisis. Right.

[Barry Ritholtz]

It's pretty modest In Hasbro, yeah, it.

[Jurrien Timmer]

Was 100% of GDP. It's now 70. So there's a debt issue on the government's balance sheet, but not in the household or even the corporate balance sheet.

[Barry Ritholtz]

Even the government side. Isn't our debt to GDP ratio like half of Japan, something like that?

[Jurrien Timmer]

So about 120% if it's just a federal debt. If you add all other debt, it's about 250, but it's comparable to other regions. But certainly Japan gets the prize and China as well, just in terms of the growth rate of the debt.

[Barry Ritholtz]

China. Oh, okay. Not total, but yeah. China's been growing debt and the Chinese provinces have been growing debt as well.

[Jurrien Timmer]

Yeah. And the Chinese numbers of course can be a little vague because the federal debt in China is not high. But they have the four big policy banks that are essentially providing liquidity. And so you have to add that. So China and Japan are the worst offenders. The US is on par with most kind of European and other countries. But so anyway, so the economy looks pretty good. But one of the things that Covid did was it sort of upended a lot of the things we think about when we look at the economic cycle, at the business cycle. So. So of course we know what happened. The economy froze, people got laid off. And then at least in the US the economy came back really fast, faster than in other places. And the labor wasn't there. Right. Baby boomers had checked out. They left the labor force. Of course, the borders were closed. And I remember I was doing a lot of flying back to LA at the time because I was hiding in Santa Barbara because the office was closed. And it's like the counter at JetBlue in Boston was like they just did not have enough people. People were coming back. Like everyone was like, okay, we're back. But the supply chains weren't there. And so we had this very tight labor market that of course we would hear about all the time from the Jolts report, two job openings for every job seeker, that sort of thing. And that has been worked off over the last few years. Few years. I think that was the goal of the tightening policy or part of the goal. So when you look at the Jolts report or you look at the U3 jobless rate relative to NAIRU, the non accelerating rate of employment, everything is in balance. Like it's right at that zero line. So they supply.

[Barry Ritholtz]

Is that why we've kind of been hanging around 4 3, 42 in unemployment?

[Jurrien Timmer]

So no one's hiring, but not many people are Looking for jobs and not.

[Barry Ritholtz]

A lot of people getting laid off.

[Jurrien Timmer]

No. And so there's balance, right? The job seekers versus the job providers. But you look at that chart over 50 years and you can see that there's a pendulum swing of that business cycle. So we went from very tight to neutral. And the inclination is to look at that. And it's like, well, every other time that's happened, the next phase is contraction. And I think that's what the bond market is saying. That's, I think, where the Fed's coming from now that they did the 25. They're looking at the jobs data, they're looking at the revision, the jobs report revision, big downward revision, almost a million 911,000 jobs. And they're like, okay, we should build in some cushion for that. And so I think that's generally the vibe. But other than that, we have a whole economics team that looks at the business cycle and we're not really seeing a lot of red flags other than that yellow flag, if you will.

[Barry Ritholtz]

How closely does the market cycle track the business cycle? Because, you know, I've heard it said so many times, the market is not the economy and vice versa. And the old joke is the stock market is forecast nine of the last four recessions. How do you see that overlay?

[Jurrien Timmer]

There is of course a connection, right? You look at GDP growth in inventories, I mean, it's less about that now than it was decades ago. The impact of monetary policy. But the markets are not the economy. There is a reflection because if the economy grows, earnings are going to grow and then the market's going to go up because price follows earnings. But there's a sentiment equation in the stock market that of course, you don't have so much in the economic cycle and you have the timing right. So the market is always going to anticipate future changes.

[Barry Ritholtz]

You have a chart showing markets bottom eight months below profits. That's a huge lead time, eight months.

[Jurrien Timmer]

So you can be 100% correct about the economic cycle and be 100% wrong about the market. Because if it's already been reflected and if it's already has even over over earned against that future signal, then you're buying yesterday's news. But yeah, so the market generally at bottoms, will bottom two, three quarters before earnings. That happened during COVID and I remembered like it was yesterday because during COVID you know, the market fell 35% February and March. Then like late March, it bottomed March 25th. And I think by June it was.

[Barry Ritholtz]

At new highs, right, 69% for the year from the lows, which is amazing.

[Jurrien Timmer]

And people like the economists had a cover saying this is divorced from reality. And so it's my job a to have people not sell in the first place to be the long term investor. The way I always describe it is you're getting a really juicy 10, 11% return by investing in stocks. But the price of admission is you got to endure some volatility and if you can't stand the price, then you don't get the reward.

[Barry Ritholtz]

How do you explain to clients? And I got a million calls, man. This market has become disconnected from reality. What's your explanation to them?

[Jurrien Timmer]

So that what happened, it happened after the financial crisis. So price bottoms, the market bets on recovery. And it could be wrong, right? Price discovery doesn't mean the market knows everything. And that's one thing where I sometimes disagree with technicians who say market's always right. Say well the market's not always right, but the market's always right in discounting everything that's knowable.

[Barry Ritholtz]

Right.

[Jurrien Timmer]

So it's right in that, but it doesn't mean that what it's discounting can't change. Right. And we saw this during the tariff tantrum in April. The market was pricing in a left tail that never arrived and now and then it had to unprice it. But so the market looks ahead and the market bottomed in March of 09. Earnings didn't bottom until the third or fourth quarter. Same thing during COVID March, bottomed in March of 2020. Earnings recovered third or fourth quarter. And so you can't look at the news and say how can the market be here when the earnings or like people are dying.

[Barry Ritholtz]

So how did you explain this to clients? I'm curious.

[Jurrien Timmer]

I explained it exactly that way that the price always leads and you can't look at it in sort of a linear way. You have to just, you have to know that at inflection points the price action is going to make no sense. And this is why people sell at bottoms and buy at tops because they're trying to understand the narrative. And that narrative is not the one that is ruling the roost. At the time.

[Barry Ritholtz]

One of the things that we found was useful was explaining to clients that their life experience isn't market cap weighted. When you look at what's driving the big indexes, it was back then it was the fang. Now we call it the Magnificent seven. But we did a calculation and found out that if all the airlines, all the hotels, all the local retailers, like just a run of the worst businesses during the pandemic, if they just disappeared Tomorrow, it was 6% of the S&P 500. And you know, or Apple or Microsoft, it's like, it's amazing how our daily experience is so different from what markets are like.

[Jurrien Timmer]

And we had that during Brexit in 2016. I mean, that was constantly the headlines. What about Brexit? Why is the US market ignoring it? Well, because. Because the UK is 3% of S& P revenues, that's why.

[Barry Ritholtz]

So that raises really interesting questions. Question about the US versus the rest of the world in terms of economic activities. So the s and P500 just gets just about half of its revenue from overseas. For most of the past 15 years, the US side of consumer spending, business spending, government spending, has been very supportive of the domestic side of the s and P500. Kind of feels like that's shifting a little bit.

[Jurrien Timmer]

Bit.

[Barry Ritholtz]

We're seeing a little slowdown on consumer spending, a little slowdown on economic activity here. As Europe and Asia seem to be starting to finding their footing after a bad 10 years. Can we just pass off the baton without the S and P stumbling? Is that, is that possible?

[Jurrien Timmer]

It's possible and it's actually happening right now. And this is one of the areas that I'm most excited about right now, is that this us, the US bull market has become a global bull market. You look at EM stocks, Chinese stocks, Europe, Japan, and it's very exciting because for many years the US Exceptionalism train has been running since 2014, 15 and the rest of the world was always so tempting with its lower valuation. And I've had conversations with our asset allocation PMs for years saying, look like, yeah, I can buy IFA or EM at 14 times.

[Barry Ritholtz]

It's cheap for a reason, though.

[Jurrien Timmer]

It's cheap for a reason. The market's very efficient. But so the catalyst. So you need a catalyst to make the mean reversion in valuation to trigger that. And the catalyst is always going to be related to earnings. Like if you look at the relative performance us vs non us over the past 10 years, it's exactly the same as the relative earnings line. It's the same thing. So you need something to change on the earnings side. And that's changing. So we have, of course, a very concentrated market in the us and that does pose risks, right? I mean, if those seven stocks go down, guess what? The S and P is going to go down. Even if 70% of the stocks in the S and P are going up. If you're an indexer or you're buying an spy, you're not going to feel those gains because those top seven stocks are taking the index down. So for the last year or so it was a question of how do you diversify against concentration risk? Do you go down cap? Do you buy the Russell 2000? But now the answer is easier because now you have a catalyst, a fundamental catalyst that is causing the mean reversion to happen between U.S. and non U.S. stocks. And, and where that's coming from is that. So I'm a big fan of the discounted cash flow model, the dcf, which looks at not so much earnings, but the payout of earnings. So if you have earnings growth at 10% and 70% of those earnings are being returned to shareholders as dividends or buybacks, the payout is that 70%. And the payout ratio is 70%. And for the US it's always been a very dominating scenario where the payout in the US was very strong because of all the share buybacks we have here.

[Barry Ritholtz]

Where are we today with that? Are we still seeing the same sort of share buybacks? Because it seems like we haven't been hearing a lot of announcements, but that doesn't mean it's not happening.

[Jurrien Timmer]

We don't hear a lot, but the buybacks are at record highs, 300 billion over the last 12 months. And the payout ratio is 75% for the the S and P. But guess what? The payout for IFA, which is non US developed stocks, the payout ratio is also 75%. It always used to be lower because they don't do buybacks over there, they do dividends, but now they're doing more buybacks. And the growth rate in the payout itself over the last five years is now higher in IFA than in the US So you're getting equal or superior or at least competitive fundamentals at a fraction of the valuation and that's a good deal. So finally that part is working where the pond that we're fishing from is now broader and for me it's a barbell strategy. I don't want to be short the max 7 because they can get bigger and you don't want to miss out on that. But rather than going down cap in the US gold seas do a barbell of mag 7 and non US stocks. Then you can play the dollar with dollar weakening story. You can get equally good fundamentals for a 15 PE instead of a 24 PE. And to me that's a good thing right now.

[Barry Ritholtz]

So the last two things I want to talk to you about in terms of the current environment are inflation and sentiment. And I'm not sure how much of this is related. You know, when we see the Michigan sentiment data, it seems to be so awful and it just doesn't feel like is this really worse than the financial crisis, worse than Covid, worse than the dot com implosion in 911 or worse than the 87 crash? If you follow the sentiment data, it's saying yes. Just doesn't feel that way.

[Jurrien Timmer]

No, it doesn't. And I think the sentiment data, obviously they're very bifurcated by, by political belief.

[Barry Ritholtz]

Right.

[Jurrien Timmer]

You know, and I, we've seen those charts.

[Barry Ritholtz]

Really useful. Yeah.

[Jurrien Timmer]

And I, I spent time on both coasts and you know, I was in, at a dinner party in Montecito, California a few weeks ago and people were like, how can everything look so good when we're like at the end of the world type of thing?

[Barry Ritholtz]

Right.

[Jurrien Timmer]

And then I'll be, you know, in some other place and it'll be the total opposite. But I think a lot of the cinnamon data are still driven by the inflation data. Like obviously the inflation rate has come down to 2.8%, but everything remains more expensive. That Covid spike that has not been unwound. And that's one of the things I worry about because not to make a comparison to the 1970s, which obviously was.

[Barry Ritholtz]

The great inflation structural and long term.

[Jurrien Timmer]

But during the 50s and 60s inflation was super low 2%. And then to the second half of the 60s it started to creep up and then it came back down. But in order for the average to be at 2%, if you go to 6%, you then need to go below 2 for the average to be 2. And we haven't done that. We went from 2 to 9 to 2.8 and we never went below 2. And if we for some reason get another upswing swing and we're at 3 and 4, that five year number is now going to be at 4.5%. And I think that's what's driving a lot of this. It certainly did during COVID And it's things like food. Right. So like the top now beef prices.

[Barry Ritholtz]

Are up, egg prices have come back down, but beef prices have run away.

[Jurrien Timmer]

So I think a lot of it has to do with that because people are employed, wages are competitive right now and you know, unemployment rates 4.3%. But I think it's just that cost of living, it just kind of like grinds and it's been grinding for five years now.

[Barry Ritholtz]

So let's talk about that 2% target. You know, in the 2010s an era of concerns about deflation and monetary stimulus, 2% seemed like a reasonable number. Is that still a reasonable number now? That, that. And that was an upside target, right? You were at 1% aiming for 2. Now we're at 2 and a half, 3 aiming back at 2. Maybe in an era of fiscal stimulus, 2 and a half, 3% makes more sense. I mean, I'm not a monetarist, but I don't know why the whole world changes except for our inflation target.

[Jurrien Timmer]

There's nothing magical about 2. Like if you go back 150 years again, again the average inflation rate is like 3%, 2.8. If you look at a distribution of equity PEs and the inflation rate, the sweet spot is sort of 1 to 4. So whether you're at 3 or 2, like for the stock market doesn't matter. Like 10, 10 to 2, like that.

[Barry Ritholtz]

9, 9 matter that matters.

[Jurrien Timmer]

And that distribution. It's interesting because obviously the higher the inflation rate goes, the lower the pe, which makes perfect sense because if inflation goes up, bond yields go up, then the safe asset is very competitive with the risky assets. So why take the risk?

[Barry Ritholtz]

Plus the cost of capital goes up.

[Jurrien Timmer]

If you go to the left tail deflation, there is really no correlation. Nobody likes deflation. So from that angle, two and a half is not a problem. Even three is not a problem. I think the Fed worries that, that if they were to ever admit that inflation expectations could get unanchored, but they went to the AIT thing, the average inflation targeting. And actually that actually prevented them from raising rates when they should have back in 20, 21 and 2.

[Barry Ritholtz]

They were late to the party to raise and they seem like they were late to the party to cut as well.

[Jurrien Timmer]

So their policy was we need to see the whites in the eyes of inflation inflation before we raised rates. And by the time the whites of the eyes were visible, it was like too late. Inflation was at 5, going to 9, but. So it's a nuanced thing, but again, 3% is not going to be the end of the world. It just means the bonds have a term premium and stock market is still fine. Maybe the PE is like 17 instead of 19, but if earnings are doing a heavy lift lifting, it doesn't matter. But again, it's like what will it take for the Fed to actually say that? Or will they ever say it? Or will we just have a post Powell Fed that says instead of neutral being inflation plus 100, neutral is inflation and so they are at 3 instead of 4 or something.

[Barry Ritholtz]

So I see your charts everywhere. Not only are they all over social media, but you do regular chart packs. I love your monthly chart packs back. I'm going to flip open my laptop and let's look at some of your favorite charts and I'll make these available on YouTube and on the website when, when this posts. Let's start with market cycles. And what we see going back to around our birth date is just a series of long bull markets followed by shorter, shallower bear markets. Tell us about this market cycle chart. And what are the different shading means in blue and red? What's the significance of that?

[Jurrien Timmer]

Yeah, so the shadings is the valuation, the five year cape ratio.

[Barry Ritholtz]

When it starts to get pricey, it turns red.

[Jurrien Timmer]

It turns red, yeah. And so what the top part of the chart shows are the market cycles. So the green are the bull markets, of course, cyclical bull markets. The red are the bear markets. And you can see, as we talked about earlier, it's pretty rare for a 50% drawdown. There's only been really a couple of them. And so what this shows is that the current bull market, as strange as it or as unusual as it has felt for many people, actually is pretty garden variety. Right. 88% gain over 35 months. So it's pretty average. But then when you look at the bottom panel, it shows the relative the percentage of stocks outperforming the index. And now you see something pretty unusual, something we've only seen a few times in history. And that is of course the concentration effect of the mag 7. Then before that, the fangs and the market is as concentrated as it was in the late 90s and the early to mid 70s, which was the original Nifty50 period. And so, so for an indexer, I guess it doesn't matter. For an active investor it does. But even for an indexer it does because the largest stocks are getting bid up whether they deserve it or not. Of course they're large because they deserve to be generally. But it shows you how narrow the market has been during this cycle. And so it's just a way of describing kind of of where we are. So you got the cyclical on the top and the bottom speaks more to the secular.

[Barry Ritholtz]

Really interesting. So let's talk about debt dynamics, which shows the change in federal debt versus what.

[Jurrien Timmer]

So what this chart shows, and it's a very simple chart, but I think it speaks volumes, is that during COVID we kind of, I think, entered the fiscally dominant Era where, where debt financing or deficit spending becomes a very major tool, which is definitely different from the financial crisis when we actually had austerity after the financial crisis with the Tea Party movement. Now we have the opposite. And in the initial years after that fiscal expansion started, the Fed was actually doing a lot of the heavy lifting by putting those bonds or not those bonds, but putting bonds on its balance sheet. So you could see the rise in debt is largely accommodated by an expanding balance sheet since that time, since 2022, the Fed's gone into quantitative tightening mode where it's shrinking its balance sheet, but the debt just keeps going up. So the debt is now up about 14 trillion in the last five years and only about two and a half of that is sort of been absorbed by the Fed. So I put two and two together and it's like, okay, if the, that purple line at the top just keeps going up, who's going to buy this? Right? Who's going to buy the debt? And will the Fed be forced back into playing a bigger role in kind of mopping up that supply? And that's the fiscal dominance thing, that's.

[Barry Ritholtz]

A little bit of modern monetary theory, is that the Fed can just buy up all the debt and there's no constraints whatsoever. SOMA stands for what system?

[Jurrien Timmer]

Open Market Market Account.

[Barry Ritholtz]

So that's what the Fed has on its balance sheet that went up since the financial crisis and it's come down since 22.

[Jurrien Timmer]

It's the part of the Fed's balance sheet that is sort of the QE part, if you will.

[Barry Ritholtz]

So let's talk a little bit about equity supply and demand. What are we looking at this chart back to 1986. Is this simply liquidity driven or what's going on here?

[Jurrien Timmer]

So I think this is, and not a lot of people talk about this, but I think this is why of the fundamental drivers of the current secular bull market era. And so you can see on the chart, I started the clock at the bottom in 09, which again I believe is the start of the secular bull market. And I look at just the supply and demand of equities just from within the corporate America structure. So not investor flows, but how much were there in IPOs and secondary issues? And it's a couple of trillion. How much was share buybacks and how much was MA and share buybacks? And M and A have something in common in that it's corporates buying shares of other corporates and those shares get retired. Right? So that's the demand for shares. And what you see is if you look at the supply demand ratio, it's very unbalanced. The demand far exceeds the supply. And to me, this has been one one of the important drivers for driving returns in the secular bull market. And there's no signs that this is letting up. And so when we think about what inning is the secular bull market in, when is it going to end and why, this is one of the things I look at. It's just when you're retiring far more shares than you're issuing, it's like, duh, markets are going to go up.

[Barry Ritholtz]

All else being equal, what's so surprising about this? This is how relatively insignificant the retail flows are.

[Jurrien Timmer]

Yes, they are.

[Barry Ritholtz]

It's just the opposite of how so many people describe it. Coming up, we continue our conversation with Yurian Timmer, director of Global Macro at Fidelity, discussing various asset classes, equities, bonds, commodities, alternatives. You're listening to Masters in Business on Bloomberg Radio.

[Jurrien Timmer]

Foreign.

[Barry Ritholtz]

I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Jurrien Timmer. He is the director of Global Macro at Fidelity Investments, the giant firm helping to to manage over $16 trillion in client assets. Let's talk about US fundamentals versus IFA fundamentals. So this looks at various market data, buybacks, dividends, et cetera. Tell us what this chart is showing us.

[Jurrien Timmer]

Yeah, so this we were talking about earlier about there finally being a catalyst for non US stocks to compete with the max 7 driven US stock market. And so on the left I show the earnings line for the S and P the payout so that the share of earnings being returned, quote unquote to shareholders, shareholder yield as dividends and buybacks. And then at the bottom you see the payout ratio again either as dividends in the yellow buybacks in the purple and you can see the payout has risen very nicely, almost a double since five years ago. Payout ratio is about 75%. So very bullish fundamentals like you, those fundamentals deserve a high pe, right, because not only are the earnings growing, but they're being returned to shareholders, which of course is worth more than if you're not getting them back. It's just the present value of future cash flows. But what's changed just in the last few years is that for IFA again, which is the MSCI non U S Developed Index, you see an even better growth rate in the payout and you.

[Barry Ritholtz]

See more than double.

[Jurrien Timmer]

Yeah. And you see an equally robust payout ratio again of about 75%. So the rest of the world is really competitive now, despite the fact that this is such a max 7 heavy market. And so this is just a very exciting time because you can actually, you don't have to make that make or break binary decision. Like you're either in these big stocks or you're left behind. There are other places to get those returns down.

[Barry Ritholtz]

What's so fascinating about this chart is how inverted the ratio of buybacks to dividends is. In the US 45% of shareholder yield is buybacks, 30% are dividends, that flips. In Europe, it's 47% are dividends, only 27% are buybacks. Or I should say, if not just Europe, although a lot of it seems to be concentrated in Europe.

[Jurrien Timmer]

Yes.

[Barry Ritholtz]

How much of that is just driven by tax policy and regulations?

[Jurrien Timmer]

I think it's largely culture. It's just. And Europe is more of a value market. So it's really like the banks are really running the show right now. And so the US it's more the growthy stocks. So they don't want to. So dividends are kind of like a sacred contract, if you will. It takes a lot for dividends to be cut. So I think Europe and Japan is just generally been more of a value driven and the culture has been more okay, we're going to earn so much and you're going to get that back as dividends. But especially the Japanese and also the Europeans are getting much more with the shareholder culture now in terms of unlocking value and returning those as buybacks. So they're starting to play the game.

[Barry Ritholtz]

Last few questions before we get to our favorite question. You have a section in the chart book about the post 6040 world. I've heard people say the old 6040 is now 503020 or 5030 10, 5 5. Tell us what you think of as the post 6040 world.

[Jurrien Timmer]

So I look at it, I call it the 6020 20. So the 60, the 6040 paradigm worked like a charm right from the late 90s until the early 2020s and 60%s and P 40% Bloomberg AG. So the investment grade bond index and you got a 9% CAGR against the 9% volume. And what's not to like about that? Right? During that time inflation was like two and a half. So you got a very attractive real return with really moderate volatility. But the whole premise of that paradigm was that the 40 was insurance against the 60. So the 60 of course is always the anchor. That's where the Compounding is. And the 40 would be your port in the storm. I think that's now changed. So 2022 obviously was a return to the old Fed model days where rye rising yields take the mojo out of the stock market, to put it mildly. The good news is that bonds of course now are a viable asset. They generate a positive real yield, but their correlation is now positive against equities instead of negative. So when I think about the post 6040 world, I'm less worried about the 60. Like we can add more international in the 60 and like we were just discussing, but what do we do about the 40? If the 40 can be the cause of problems rather than the solution to problems, and especially if we end up with a higher term premium, then bonds are not going to be as safe as they used to be. So then I get into kind of, okay, I'm going to take some share from the bonds. It doesn't have to be 20. Like again, this is not investment advice but back of the envelope stuff. And maybe some cash strategies are more competitive if we're not going to go back to the zero interest rate days, which I don't think we are. Gold are the proven anti bond over history. Right. They don't produce a cash flow 3700.

[Barry Ritholtz]

Bucks as we speak.

[Jurrien Timmer]

But when bonds do poorly, gold really shines, no pun intended. And then you got to throw bitcoin in there as kind of the wannabe exponential gold. And then other, other strategies like alternatives, managed futures, equity, long, short, private credit, all of those kind of alpha rather than beta strategies.

[Barry Ritholtz]

You have tips in there as well?

[Jurrien Timmer]

Yeah, tips, high yield markets or asset classes that are not negatively correlated but they're not positively correlated as well. So when you look at kind of The Sharpe ratios versus the correlation not just to the 60 but especially to the 40. Right. Because I want to hedge more against the 40 than the 60.

[Barry Ritholtz]

I was going to say this doesn't look like a yield chase, this looks like a diversifier. Is that the thinking here?

[Jurrien Timmer]

Yeah, yeah. And actually if you go down one chart, I think. Yeah, right there.

[Barry Ritholtz]

Oh, look at that.

[Jurrien Timmer]

So I want high Sharpe ratios or high sort, high sortino ratios and assets that are uncorrelated. And you get into the bcom commodities, you get into gold. Bitcoin is not quite uncorrelated but all the alt strategies are uncorrelated. And so to me that is sort of the next 60 40.

[Barry Ritholtz]

Really, really fascinating. Last question before we get to our favorites. You look at so many charts each week. You identify trends Before a lot of people do, what are investors, investors not talking about but perhaps should be? What topics? Assets, geographies, data points, what do you think is getting overlooked? But it's really worth investors time to.

[Jurrien Timmer]

Pay attention to one asset class, and we just talked about it. That I think generally is seen as a sideshow. The way bitcoin used to be. It's no longer a sideshow for sure. Is actually gold.

[Barry Ritholtz]

Because even at 3,700 bucks, are people still thinking of it as a sideshow?

[Jurrien Timmer]

I think institutions do, right? So regular retail investors, as I call them, you can buy GLD or some other gold ETF and I own it in my portfolio. And so I think there it's part of the conversation. But when you think about large endowments, institutional investors, even mutual funds, like you need a special wrapper in your mutual fund to own physical gold. Like you need to go to the SEC and get approval. And so gold has been sort of dormant for so long until recently that it's like, yeah, I don't really want to go through this trouble. To buy something that doesn't have a cash flow, can't be valued, requires special regulatory approvals. And then all of a sudden it starts to run like it is now.

[Barry Ritholtz]

Everybody wants it.

[Jurrien Timmer]

So I think that's the story, ironically, because bitcoin has obviously come well after gold as a kind of a store value, hard money asset. In a way, gold is kind of like where Bitcoin was 10 years ago or five years ago, where, okay, bitcoin's interesting, but I don't understand it. I don't feel like spending a hundred hours on this. It's a bubble, it's a scam, it's a pet rock. And gold is like, if it keeps going the way it is, and I suspect it will, the endowments are like, okay, people are asking me about this. I need to really figure out how do we not. How do we buy it? You can buy it, of course, but it's always been a dismissed asset. Let me put it that way.

[Barry Ritholtz]

I mean, that's what I grew up with. It was kind of mocked by the exact equity people. Depends on the length of the chart you look at. You could show trailing multi decade period where gold has outperformed the S and P. So if you look at gold as in a secular bull market, I'm not asking for a forecast, but what's within the range of possible numbers. Gold could run to from 3700 up from the low 2000s in early. What are we peaking like 202014 and then 2019, something like that.

[Jurrien Timmer]

And it was like 260.

[Barry Ritholtz]

Oh God. I remember in the 90s, yeah, when GLD first came out, I want to say gold was about 430, 440. I remember talking about it on TV and getting laughed at by anchors.

[Jurrien Timmer]

So I, I once saw a chart that actually Paul Tudor Jones created, speaking of Paul, where he compared the, the above ground value of, of gold or the value of above ground gold and compared it to the value of M2.

[Barry Ritholtz]

They kind of track each other.

[Jurrien Timmer]

The chart concluded that when the money supply grows too fast, gold takes market share. So hard money takes market share from soft money, from fiat money. And at certain extremes, like in the 70s and other periods, periods of 30s, the value of gold will go all the way up or beyond the value of M2. And so right now M2 is about 23 trillion. Gold plus Bitcoin is also about 23 trillion. So in that sense it's come a long way to take that market share. And now it's a question of does M2 either globally or, or in the US continue to grow at an above average pace. So the average pace is about 6% nominal, about 2%, 3% real. So I do think a lot of the gains are in already, but it will naturally overshoot as these cycles always do. So that's kind of how I would measure it. So if the money supply goes to 30 trillion, gold and bitcoin could be 35 trillion and obviously gold is a large part of that. Bitcoin is about 2 trillion. And then you convert that to a price. But that's kind of how I think about the valuation side.

[Barry Ritholtz]

Really fascinating. Tell us about your mentors who helped shape your career.

[Jurrien Timmer]

Definitely Ned Johnson. Because when I came in to Fidelity in 95, I'd been in New York for 10 years, didn't really have mentors. And so he, Fidelity has a very strong corporate culture, let's put it that way. And especially around the way we approach long term investments. We're obviously a long term investor. So he was the last person I spoke to before I got hired. And then in those formative years I worked in the chart room and I would spend, spend hours per week with Ned. Like he would just come down really hours per week and we would just pour over charts. Like we have these huge charts on the wall, floor to ceiling like 40 foot wide. Like a daily chart of whatever the Dow, manually, by hand, it would be computer generated. But then because we don't want to print a whole new 40 foot sheet everywhere. So you would just, you fill it in by hand and just the oral tradition, the oral history. So he was looking at the chart and then he was like, okay, well. And he would go from right to left and say okay. And we'd end up like in 1968. And he's telling me about the glamour stocks and this and that and I'm like, well this is like gold, right? Like you don't, you know. And so he would have this encyclopedic memory, but also just the way the information was displayed. Semi log scales. The chart room has like museum quality lighting, how you display, how you visualize data. And so he instilled that culture, we call it Kaizen kind of just gradually improving and having compounding isn't just for investing, right. It's just in our day to day stuff, you do something, something consistently, right. It's going to make an impact. And when I look back at my 40 years and I'm not going anywhere but like to me that Kaizen has really played a role in my relationships, in my work and I think a lot of that just came from him.

[Barry Ritholtz]

Really, really interesting. Let's talk about books. What are some of your favorites? What are you reading now?

[Jurrien Timmer]

So I hate to admit it but, but I don't read a lot of finance books because I'm very interested in having balance between, oh, I don't want finance books between right and Left Brain.

[Barry Ritholtz]

We've all read Reminiscence of a Stock Operator. I'm more curious as to what else you're reading.

[Jurrien Timmer]

I will say that during COVID I read this huge tomb called the History of the Federal Reserve by Alan Meltzer. Oh sure, because I've looked at so many charts. Charts. You've read the reports of financial repression.

[Barry Ritholtz]

It's like a thousand pages.

[Jurrien Timmer]

But I went, that book was like this blow by blow using the Fed minutes and all these correspondence to see how the Fed handled the financial repression of the 40s. And so that was fascinating. Although most people would say well that sounds really boring, a little dry. But as a consumer, consumer of the data just to see, okay, wherever it was at the Fed would go to the treasury and they were playing games. The treasury would issue bonds below market and then the auction would fill. Then knowing that the Fed would have to mop up the supply. All of that stuff was just really, really fascinating. And we see the interference with politics and monetary policy today, but it's nothing new. Like in the 60s, both Nixon and Kennedy were equally guilty of.

[Barry Ritholtz]

Seems a Little more overt and public today. It used to be sort of cloak room sort of stuff.

[Jurrien Timmer]

Yes. So that was one. But the most interesting recent book I've read was it's called Rock Me on the Water. And it's a book about music, TV and movies during the early 70s and how LA was like the epicenter of American culture. So you had like the Laurel Canyon.

[Barry Ritholtz]

Folks, musicians, Mitchell, David Crosby.

[Jurrien Timmer]

You had these groundbreaking TV shows. Right. Because we were coming out of the straitjacket of the 60s, conformist. Like, no one dared to make a show that, like, challenged the status quo. And then you had like, MASH and, you know, Mary Tyler Moore owned the family and then the movies like Taxi Driver. And as a, you know, as a. I think I'm kind of Gen X, but on the border of Gen X.

[Barry Ritholtz]

And Baby Boomer, I'm in the same, like a foot in each camp.

[Jurrien Timmer]

Yeah. And so growing up, you know, formative years in the 70s in Aruba, but consuming American pop culture, right. We would sit down every night watching like, you know, Wide World of Sports and Mary Tyler Moore and all those shows.

[Barry Ritholtz]

Rock me on the Water.

[Jurrien Timmer]

Rock me on the Water. And. And it's just like. So it's fascinating to read about the things that we live through as kids, as teenagers. But then like, yeah, you know, that was so amazing.

[Barry Ritholtz]

Let's talk about streaming. What are you watching or listening to right now?

[Jurrien Timmer]

We are binge watching the Bear. So I'm an avid cook. Like I said, I run a food camp at Burning man. And that's. And we tend to be late to shows and then we just watch like Four Seasons.

[Barry Ritholtz]

Yeah, the Bear is great.

[Jurrien Timmer]

Yeah.

[Barry Ritholtz]

So if you cook or worked in restaurants, it just rings so true.

[Jurrien Timmer]

Yeah.

[Barry Ritholtz]

I got to ask you a crazy question. You're a cook. What pots do you like? What knives do you like?

[Jurrien Timmer]

I use the all clad. I have two places. I have a gas stove and set Barbara. And an induction stove. In Boston, you know, I came this.

[Barry Ritholtz]

Close to putting an induction stove in my primary residence, but we had just gotten gas and so of course we ran with gas.

[Jurrien Timmer]

Yeah, I will run with gas anytime. Induction is good. It's very precise. Yes. But I like the organic kind of tactile dimension of gas. But so all class. And the German knives, what's it called? Gustorff. I forget. And my go to knife is a 10 inch chef's knife. Not the really high one, but the medium one. So the medium one is thick enough to smash on garlic, but not so thick that you don't feel connected. You don't have the road feel of the knife on the cutting board.

[Barry Ritholtz]

So, so, so I'm jonesing for this shun knife I keep seeing, and they're just exorbitant.

[Jurrien Timmer]

Yeah.

[Barry Ritholtz]

And we gave someone a gift of the Stanley Tucci healthy nonstick. Supposedly the old non stick is not good and she loves it.

[Jurrien Timmer]

She's been.

[Barry Ritholtz]

So we're debating going out and getting a set for a. Like, it's rare. You give someone a gift and they're like, oh, my God, this is amazing. Amazing.

[Jurrien Timmer]

Stanley Tucci is one of my heroes.

[Barry Ritholtz]

Oh, really? Have you watched his show? In Italy. I had to stop because it just makes me want to eat. Even after dinner, you want to go eat.

[Jurrien Timmer]

That's my guilty pleasure on TikTok is little food clips. And I don't even have to have the sound on. It's just because I kind of know what works with recipes. So I don't need a recipe, but I just need someone to visualize an approach. And so a lot of the things I cook today are from TikTok.

[Barry Ritholtz]

Oh, no kidding. Oh, that's amazing. All right, our final two questions. What sort of advice would you give a recent college grad interested in a career in technical analysis, fixed income, or just investing generally?

[Jurrien Timmer]

Be open minded, be humble. The true heroes of mine in our business, this, including Ned Johnson, he's no longer with us, of course. Was that just humility? Right. I'll talk to Will danoff, who runs 300 billion.

[Barry Ritholtz]

I love Will.

[Jurrien Timmer]

He's the humblest guy. He's amazing you'll ever meet. And there is no room for big egos, like, no matter how important you are, I have no time for that. So stay humble. Don't figure out, don't think you've figured it all out at the age of 25. Be a learner and be ready to reinvent yourself. I've had to do it a number of times at Fidelity, either as planned or as not planned. And you just gotta roll with the punches. And like I said, the first job I had was like the last job I was interested in, but I took it because it was the only job.

[Barry Ritholtz]

And our final question. What do you know about the world of investing today? You wish you knew 40 years ago or so when you were first getting.

[Jurrien Timmer]

Started that markets go through cycles and it always comes back, not always quickly, but every time the market goes down 20 plus percent. It's like the end of the world and it's totally different from every other time. And this is such a crisis. But then I've now been through 12 bear markets in my career and it's like, yeah, whatever. Nothing shocks me anymore. Of course I'm maybe in a better place because because I've earned my wealth. I'm not still building it, but it's just Take a step back, look at the bigger picture. Make sure your portfolio is where it should be in terms of risk and goals. And don't be your own worst enemy by selling at the bottom. Call someone. Have them talk you off the ledge first.

[Barry Ritholtz]

Thank you Jurjen for being so generous with your time. We have been saying speaking with Yurian Timmer, Director of Global Macro at Fidelity Investments. If you enjoy this conversation, well, check out any of the 563 we've done over the past 11 and a half years. You can find those at Bloomberg, iTunes, Spotify, YouTube, or wherever you get your favorite podcasts. Be sure to check out my new book, how not to Invest the ideas, numbers, and behaviors that destroy wealth and how to avoid them how not to Invest at your favorite bookstore. I'd be remiss if I did not thank the crack team that helps put these conversations together each week. Alexis Noriega and Anna Luke are my producers. Sean Russo is my researcher. Sage Bauman is the head of podcasts. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio Video.