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playlist and put your summer on track. Red Bull Summer All Day Play Red Bull gives you wings. Visit red bull.com brightsummer ahead to learn more. See you this summer. All right, y', all, we've got Jeremy Schwartz, the chief investment officer from Wisdom Tree, on the show today. Because geopolitics have been everything so far in 2026 with what's going on in Iran, with what's the, you know, Europe and NATO and like all this stuff, right? So, so what we've done essentially said, hey, who is a geopolitical expert and who is building investment products for retail investors? Wisdom Tree to allow us then to identify trends and then invest in those trends through. We talk about a ton of different ETFs in this specific episode. Specifically, we talk about the WDAF etf. There's another one, we talk about the WTV etf, wtip. Like we're getting into deep stuff here. So if you want to go get a notepad or pull up your phone or something, start typing these tickers down, that's a good idea because some of these have done really, really well and is a really interesting investment thesis around them that I'm not now jazzed about, as you can tell. Just how excited I am about how this interview, it's, it's great. So I'm super excited to welcome Jeremy. But Robert, I mean, we just wrapped up the interview in case you want to do anything here and let people know just how fun it was.
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C
Yeah, this episode is all about preventing all of you from having these knee jerk reactions that we talk about all the time. Whether it's a Trump tweet or it's some crazy headline that scares you, this episode is going to make you feel so much better about understanding one thing, that there's a bull market everywhere to invest in. If you know where to find it.
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A
With that being said, let's jump to our episode with Jeremy Schwartz. Hey everyone, and welcome back to the Rich Habits podcast, a top 10 business podcast on Spotify brought to you by public.com by the end of this episode, you are going to understand how geopolitics has become one of the most important drivers of the stock market, how global power shifts are creating entirely new investment opportunities, and how investors should consider positioning their portfolios. My name is Austin Hankwitz. I'm joined by co host Robert Kroke. Robert is a seasoned entrepreneur with lifetime revenues north of 300 million. And I'm a multimillionaire in my late 20s with a background in finance and economics. As the show name might suggest, every single episode we talk about rich habits as they relate to business, finance and mindset. So, Robert, what are we specifically talking about today?
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C
In today's episode of the Rich Habits podcast, we're talking about something that has recently become the number one driver of the markets in 2026 and geopolitics. Countries are picking sides, trade routes are being rearranged, military budgets are ballooning, and governments are stepping in to steer their economies more directly than they have in a very, very long time. A few years ago, most investors cared about interest rates, inflation and earnings, and that was pretty much it. Now, a single policy change, a Trump tweet, or a flare between two countries can move entire sectors within minutes and overnight sometimes. That's why we're so excited today to have Jeremy Schwartz on the show. He's the global CIO at WisdomTree, where he's spent close to 20 years leading investment strategy across stocks, bonds and multi asset portfolios. Jeremy, we're so excited. Welcome to the podcast.
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B
Robert, it's so great to be with you. Thanks so much for having me.
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A
So let's zoom out. It used to be that geopolitics was just noise in the background, but now it feels like it's driving the market on a weekly basis. In 2026, how should investors think about that and what actually changed to make it matter this much now in 2020 compared to 2024 or 2025?
- [04:30]
B
Well, there's real stuff happening around the world. So we are dealing with a lot of situations. As I sort of meme out monitoring the situation, there's a lot of monitoring going on in terms of real situations that are really challenging for people. And how do we navigate all these? Certainly the US Administration is part of the both the volatility, but also some of the setups and the catalysts for a lot of different areas of the market. So it's definitely become a very policy driven market. And just because there's so much stuff happening around the world that makes you think about what are the positives, whether negatives. Certainly when we had Liberation Day, people call it a liquidation day with all the tariffs like that was a whole set of policies. And then are those tariffs going to last? Now there's still uncertainty of how are these tariffs going to play out. Since talking recently, are some of these tariffs going to come back to levels from before the Supreme Court ruling? So there's just a lot of unique situations. Certainly there's conflict. We're hoping we're getting the resolution of the conflict in Iran. There's so ongoing conflict with Russia, Ukraine and will that how is that going to play out? We think that also could resolve with a lot of positive long term implications, but it's still uncertain. And so I think it's just we've gone from where the Fed and inflation was the top story and what was Jay Powell going to do was the most important headline. It's just no longer the most important headline. Now it is a Trump true social tweet and all the policy changes that are happening because there's just so much geopolitics that are in flux.
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A
We've always got to be monitoring the situation. And now I feel like everyone has turned into a geopolitics genius, which is pretty funny.
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C
And Jeremy, what's interesting is that your team doesn't just look at all of this instability and just see uncertainty. You see places to put money to work. And you've pointed out the things like countries rearming, supply chains, moving alliances, reshuffling and said those are investable opportunities. So how do you take something that feels so messy and uncertain and turn it into a clear investment thesis?
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B
Yeah, a lot of the natural reaction when you see these typical volatility spiking, you just want to get defensive. You go to cash, you freeze and take action. And we're not in our frameworks. We do have a team focused on geopolitics and has incorporated into a number of different investment strategies trying to take advantage of this. You look for catalysts that there's some winners and losers in all these things. You try to position the portfolios with that in mind, like what are the catalysts on the upside? What are the catalysts you want to avoid? The tariffs were an element of that. And then as you start thinking, well, maybe the Supreme Court rules against it, these tariffs come off a lot of companies had factored in the negativity from the tariffs and there was upside potential because hey, maybe the Supreme Court changes some of the dynamics and you actually get a relief of some of those efforts with the energy. We came in the year overweight some of the things like energy. And the conversations at some of our investment committees were hey, Chevron owns a lot of assets in Venezuela. If something happens in Venezuela, there's a huge amount of upside for Chevron. Now we didn't know how quickly that was going to happen, but that was really some of our conversations at our investment committees. And we came overweight Chevron into a number of portfolios. And now actually recently as we were starting to see, hey, oil has gone up 40% relative to all the other sectors. Maybe now it's priced in and maybe now there's now a resolution to the downside. You reduce some of the energy exposures at some of our investment committees. And so it's trying to figure out positioning with this geopolitics in mind and what are the developments. Think about what's mispriced or not priced but also always looking for the positive catalyst of, of where the changing nature leads to some upside potential.
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A
I guess my follow up to that Jeremy, would be how do you discern as a chief investment officer of what is actually important? What's a needle mover in the markets? What's going to actually matter versus what's noise? Right. Why do you think, you know this specific event if it's tariffs, if it's, you know, whatever, like what is that thing that actually matters versus what is just something you think the markets are going to shrug off in, in a couple of days or a couple of weeks. How do you discern the difference there?
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B
Yeah, and so WisdomTree has built long term investment themes. I think we do tend to have a longer term outlook. We have a gentleman, Sam Ryan, that we brought on to help manage geopolitical risk. Aware portfolios, we called him the GRAP portfolio. So we've got some history of live track records managing models, but then from building it into that ETF model portfolio, then building specific ETFs that start to incorporate that type of thinking into the specific etf. And so I'd say we have a dedicated team that is the job of that team. Most of wisdom tree strategies are systematic quantitative, but we're getting more with some of this sort of qualitative assessment. And there is definitely a team focused on being thoughtful about it. And now there's some big things happening on the wars the allies, these tariffs, those are major events. I mean, there's probably a lot of other noise happening below the surface, but those are the biggest things that every headline is spinning on is what's happening in Iran, will we get a deal in Russia? Ukraine, tariffs, you saw instantly it was a important thing. Now you could say, is it lasting or are they overreacting? And you have to make that judgment of how things are evolving. But I'd say we're focused on the big dominating narratives. Who are the strategic allies around the world? What are the big sectors and themes that the administration is investing in? If it's not geopolitics, it's AI. All right, so what are the key components of AI and technology? Well, we need energy, we need nuclear, we need every source of energy possible. But that's also in this geopolitical arena. A lot of what's happening is tying to energy and oil. So you have a long term worldview and then sort of try to find the short term catalyst where the investments are going.
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A
Jeremy, I appreciate that breakdown and kind of like pulling on that thread even more trying to find the investable opportunities. When it comes to geopolitics, one thing you flagged is this long term term ramp up in defense spending. Europe and Asia are modernizing their militaries. They're pouring money into new technology. Why isn't this just a one or two year bump? Why do you think this specifically could last long enough? And maybe not just this example, but others that allow us to actually discern this as an investable trend, a theme, an underlying thesis that we can invest into for years to come?
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B
Yeah, I do call it the defense tech super cycle. So I think there is a real big long term theme here and I'll sort of get to how I think about this sort of longer term super cycle in the short run. Just quickly there is a lot more spending happening. I think we saw the needs for it. I'm very interested in Wisdom Tree might have had our most successful ETF launch in history on a global basis back last year in Europe. Our team, the week that Zelensky was in the White House and you had that epic blow up with Trump telling Zelensky they had that epic battle and fight and it was like, oh, what is Trump doing here? Well, Zelensky basically went home and the story was Europe has to spend a lot more on defense. And a lot of the Europeans had been under allocated to defense stocks. They had ESG mandates that precluded them from investing in European defense stocks. We were One of the first, we had the first ETF focus on only pure play European defense stocks. And in a market where they were dramatically under allocated. Now that direct exposure to European defense, that is definitely one today theme. But these commitments for getting to 5% spending by NATO that Trump is pushing, clearly they now don't view the US as the same trusted ally as they were before. And so the spending on defense is not a short term thing. Even if we get resolution with Russia, Ukraine, and I think we're probably more optimistic than others that there is a resolution coming, the rest of Europe is not going to really pare back on spending. They see they have some questions on the US but when I called it the defense tech super cycle, the same thing is true in Asia, Japan, Korea, India. I mean India had a little bit of a hot war with Pakistan. But you have the real, I think what all of this conflict today has been about. There's, there's a subtext of China and through the conflict in Asia. And so I think all of Asia is going to be spending a lot more on defense. If you had to say, do you think Europe or Asia defense is where you want to be in the defense sector? I think Asia is my top idea. Even more so than say US Defense companies. Asia defense is the top of the defense theme. But when I called it the defense tech super cycle, it's not that I'm saying just buy the defense stocks. Actually I think it's broader. It's the innovation that we're going to get from Europe, Korea, India, Japan, because they're spending on defense, it becomes much broader. You think about your cell phone. Where did the technology for your cell phone come? You go back to World War II, we develop walkie talkies and the spending on defense leads to consumer applications. You have, where did the Internet come from? Well, you have the Sputnik moment in the 1950s, 1958. We create an organization in response called ARPA. ARPA becomes DARPA, DARPA R&D leaves to the Internet. You know, so there's all sorts of innovation that's going to come. Consumer applications could come because they're spending money on defense. You see right now with Iran, who is sending the best drones to Iran? The Ukraine is. I mean, Zelensky is now a powerful ally in the Middle east because he was battle tested. He had to forge defenses against the shahed drones and now he's sending his tech there. But drones is probably one of the exciting new technologies. We're creating sub themes for physical AI, humanoids, drones, but there will be consumer applications beyond the defense applications. And so that's kind of a spillover where defense spending ultimately will lead to more consumer innovation. And I think, you know, we've been used to the US Being the only powerhouse in tech. And I think the spending on defense longer term will bring a lot of innovation across the world.
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A
So I really want to just follow up on this, Robert, before you jump in, because I love what you're talking about here, Jeremy, and it's the reason we have people like you on our podcast. I'm not a geopolitics. Geopolitics. I'm not an expert in that. And I don't think Robert claims to be either. But you are now talking about. And you know, we've been kind of figuring this out behind the scenes with you, really excited to have you on the show here and thinking about themes to talk about on the show. You were talking about even weeks ago when we first met, how Europe is, to your point, really ramping up their spend. I just saw this morning in the Wall Street Journal, Europe is accelerating a NATO fallback plan in case Trump pulls out of NATO.
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B
Right.
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A
So you're totally right. And to that point, with Asia, you've got the wisdom tree, Asia Defense Fund, WDAF is the ticker. It's up 26% year to date because of this theme that you guys saw last year coming around the corner. And so when people talk about like, oh my gosh, the stock market's flat this year, or it's all over the place because of, you know, this Middle east conflict. And I, I don't know where to put my money. Like, something we talk about a lot on the show is there's a bull market everywhere. You just have to find it. And I think what you've done here by coming on the show and talking about these, you know, defense spending super cycles and not just talking about it, but giving investors an opportunity to participate, giving the WDAF ETF or the W EF ETF, which is that Europe versus Asia Defense Fund ETFs that wisdom trees created here and they've performed so well year to date. It's just, it's incredible. And I, I really appreciate you really breaking it down for our audience because these are the thematics that we like to ensure our audience is diversified into when they're trying to say, okay, I've got my base built, I've got the S P, the nasdaq, I'm doing some of this stuff. But, like, what is an underlying secular growth trend that I really want to have some exposure to. And you're over here talking about Europe in Asia and sort of this ramp up period. So I, I love that you're talking about this stuff. As you, you can tell I'm really excited.
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B
Well, thanks Austin. I mean that has been, they've definitely been the one of the top performers, top asset gatherers. And you know, I, for even for us globally today, Europe is probably the top theme followed by things like where Earth. Like but you need where earth for these defense things. So it's all interrelated. A lot of it does trade off of a similar underlying necessity, but it's a, a very interesting set of things. And, and yeah, I love the focus on Asia defense. I think of the allies in Asia. That's where the next real conflict comes. And I think there's just gonna be a lot of spending on those, those stocks.
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A
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C
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- [17:54]
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C
Full disclosure in the podcast description.
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A
Back to our interview with Jeremy Schwartz.
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C
Well Jeremy, you went really granular, Austin. Thank you for bringing it back around for our listeners so they can understand how can they win from this? How can they execute from this? So great job you guys because Jeremy, you crushed that. But I want to make sure the listeners understand it. We don't go too deep that they don't know, hey, that sounded really cool. How can I invest in that? So really appreciate it. Great job. But another idea that stuck out for me is the shift from pure globalization to countries choosing to trade with allies over whoever is cheapest. Security and reliability are winning out over efficiency now. But what does this really mean for the markets and who benefits the most. So our listeners can kind of understand it.
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B
We were just talking Asia defense and that was for the conflict with China. So there's no question who's on the short stick of the Trump playbook right now. And you know, we're gearing up for gatherings of Trump and Xi in May. I tend to be hawkish because of all that stuff happening on the conflict with China. There could be a resolution. I understand the case. People say China stocks are cheap. Who's going to actually compete with US tech dominance? Who's got some of the AI models? Who's got the EVs, the Solar? They've got all the power and infrastructure to actually develop AI technology. Really it's only China that can compete. So I understand why people might think it's an interesting setup, but I also think it just has a lot of extra risk that really very few other places have. And it's a 30% weight for many emerging market portfolios. That's a very big index weight. So when we think about building what I call that geopolitical risk aware portfolio, the GRAP or our etf, which is geoa, the Geo Alpha Opportunities, which really is a global portfolio looking for the best opportunities. We're going for the allies in that now. Who's the allies? Japan's a strong ally, India's a strong ally. Poland and Europe has a key component between Russia, Ukraine and where is spending happening and where are some of the policies happening that are providing positive inflection regardless of some of the outcomes there? But European infrastructure rebuilding top theme as that becomes a conflict resolution. But if the allies in Asia again Japan and India pairs a growth in value, Japan is one of your preeminent value plays for international. Buffett's been buying Japan as one of the sort of other thought leaders who've been on our side on Japan. India has been out of favor the last 12, 18 months conflicting with the higher energy prices. They are on the naughty list for buying the Russian oil for a while. But we think the long term growth story in India is very good and we actually think that they are a really good long term partner ally of the US So Japan and India pair well but it's, you know about the top themes that you're, you're getting exposure to as well. But it is definitely underweight China to avoiding China.
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A
And again that was the GEOA ETF for specifically who could begin to benefit most from, you know, these countries trading with their allies versus just trading with whoever is cheapest so we've talked about diversification a lot on the show and I even alluded to it before because I think the old playbook of diversification, especially now in 2026, is beginning to feel a little outdated. Right. It was essentially stocks and bonds just get yourself, you know, 6040 portfolio. Maybe you get a little international fun here or there. But now with everything shifting, it's a very policy driven market at the moment. Supply chains are moving, tensions are rising. Obviously what's going on in the Middle east, does that approach of a 6040 portfolio, just stocks and bonds, does it still hold up in your opinion? And if not, what should investors be doing differently to diversify in 2026 and beyond?
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B
Well, when you think about the case for bonds today, you know, the bonds we look at real returns is how we like to look at things, returns after inflation. And we can talk about what is the expected return for US equities, global equities and bonds. The TIPS bond today the expected return on bonds is very close to its real yield. You don't get a lot of this valuation expansion as a persistent return. So the 10 year tips in the US today is right around 2%. They taught us in school the rule of 72, 72 divided by 2 is going to take you 36 years to double your purchasing power in bonds. It's not quite exciting as a return. So yes, it's a safety play. If I'm afraid of risk in equities, it hedges some of that and with hey, with the inflation protection I will get to keep up with inflation. But 2%, very tough to double your money. Now you say stocks are expensive. The S and p is around 21 times earnings. While we're talking that's a 5% earnings yield. That's what we use as our real return gauge. So that call it a 14 to 15 year doubling of your money. Definitely better than the 36 years in bond. Now you're hearing portfolios like the 6040 should be 6040 with commodities. You know there's been some people who've thrown that out there that sort of hedges some of the unique things happening in the market. You know one of the things WisdomTree started doing 2017-2018, we started looking at a concept called capital efficient portfolios where we could add sort of unique sources of leverage on top. You know, a way to more better optimize your portfolio so you could have your stocks and bonds and then add diversifiers on top. I think that has been something we're seeing a few billion dollars come into as a way to do it. And we've got a bunch of combinations so stocks and bonds, stocks and gold. One we did recently is TIPS Bonds plus long short commodities. So the fund is called inflation plus and it has a basket of tips and then adds a long short set of commodities on top. That is kind of just one of those alternative diversifiers that that can be a unique addition to just a standard 60, 40. You know, I'd say you're not going to bonds for a return, you're going for protection and hiding out. Inflation is top of mind, not one of the key risks. I do think people are under allocated to commodities. As a general conclusion, when I look at my European clients, they might have a 7 to 8% average allocation to commodities and gold. The US investor, if I look at the ETF allocation, we're to about 14 trillion plus in total assets in the world. I operate in the ETF world, less than 2% is allocated to any commodity. And so I think that is a subpar allocation. So the question is how do you raise that? And I think some of those capital efficient ideas, we have a whole suite of these capital efficient ideas that can let you mix and match. And the whole point of them was to add a little prudent futures overlays, whether it's gold bonds or managed futures that are kind of interesting overlays.
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A
That's awesome. So wtip, the wisdom tree Inflation plus fund, I just pulled it up here, is essentially a way to have some, I think I understood as some bond exposure with a little commodity exposure as well. And I'm looking at performance since June when y' all launched it. It's up 30%, which means over the last, what is that, nine months, a 30 return as commodities I'm sure continue to really drive a lot of that performance. I think that's it' incredible. 14%, you know, year to date performance in this WTIP ETF. I've never heard of this and I'm so grateful that you're coming on the show and educating us in real time how you guys are beginning to like innovate and think more about like the 6040 portfolio. Yes. Maybe it serves its purpose for some people that want, you know, whatever with bonds. But if you want maybe a little sexier version of bonds.
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C
Right.
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A
The WTIP could be that because it's now this blend between some bonds and commodities.
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B
Yeah. I think think the struggle we've seen with commodities long only they go, they definitely have some volatility that can be as high as stocks and so people say, you know, the commodity trend is not like equities where you have a set of cash flows that you can value a stock.
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A
Right.
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B
You have the Warren Buffett quote. Gold is just this shiny thing. You could put all the gold in a few Olympic sized swimming pools and I could, I could shine it. But like what does that get me? But they do play unique roles in diversifiers. In portfolios they have gold has provide long term inflation protection but also spikes in some of these commodity prices is a key risk. You see with energy spiking that was one of the key risks for the markets this year. What I love about our inflation plus fund is that it's not long only is that it will the long short. We identify trends in markets and it can short particular commodities if the, if the signal flips. And so it has this, it's effectively TIPS which gives you inflation protection. But the long short commodities on top I would position it versus other bonds or other TIPS strategies. Long only TIPS with the, that that inflation hedge. But obviously you know the commodities has more juice, you know than just a standard bond portfolio. But I think it's a nice way to add it into a, into a portfolio besides because most people don't have direct commodities. As I said 2% average allocation commodities, very, very low.
- [27:26]
C
Yeah, I love this Jeremy because you know, Austin will attest I've been beating on the table for years for people to get some exposure to commodities but they just don't understand what that means. And you know, so I've been talking about it for a very long time. Obviously we've had a good run over the last couple years but the volatility definitely is there for commodities more so than stocks in most instances. But that's a crazy stat to me. Only 2% of people holding that amount of proportion of their portfolios in commodities. But let me jump into my next questions because markets have been dominated by a handful of massive tech names for a while now. But we saw the magnificent seven taking a beating at the start of 2026 and you've said that there are real opportunities outside of this group, especially as the global picture changes. So what are you looking at that most people either are ignoring or straight up don't even know exist in the markets. So our listeners can know where these nuggets and these kind of newer things can be uncovered to be able to invest in.
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B
Yeah. So I'll give some quick comments just on the mag 7 which I think have come down in some ways. I've been calling now Nvidia a value stock actually. And one of our funds, we made Nvidia the top holding because a few weeks ago it sold off and I, and I was looking at like a 19 forward PE, one of its lowest multiples maybe in a very forever kind of time period. And it was growing at a. At a very fast rate. It was at least a market multiple, S and P multiple, but at forward growth rates much, much higher than your average stock. Some of these value indexes had Tesla in the top five holders. Things I will say a lot about like Elon having the most incredible innovator. But Tesla's not a value stock. And you say, well, how do they. He's 180pe. By what metric is it a value stock? I'll tell you this methodology from one of the top two index providers there is in the world. People will figure it out. Looks at growth rates and if it comes not to be pure growth, like I. E. The growth rate slows down. So expensive, slower grower. Now you've got a weight in their value index. Okay, kind of silly if you're really trying to say or if you're defi. If you're allocating between their growth and value, understand why you want to have some stuff that's pure growth, pure value. Then you get this middle box and where do you allocate the weight to? Well, they get some big weight in the value index, but it's definitely not a value stock. So you know, that index might have an 1819 PE, a little bit below the market, but definitely not true value. I could look at stocks doing 4 and a half percent on average buybacks 2% dividend yields 2 and a half percent. So we were talking like close to 7% dividend and buybacks 13 PE today, you know, for the S and p selling at 21. And these are not low quality companies. This is with profitability filters. So this is what we call our US Value fund. It is focused on quality and shareholder yields. It is an active fund. So there is some discretion just beyond the model and, and Nvidia being the top holding in that strategy as we calling it a value fund. Value stock is an example of that meta also now value stock, I think from many of these metrics. Tesla not a value stock on that score. But I don't think tech is really dramatically expensive. The whole tech sector, 24 times, median of the last 30 years of 22 times they're growing faster than the market. You know, there's more a lot of idiosyncratic growth stories there But I'd say there's definitely pockets of value. That whole basket for us value is 13 pe quite attractive. And you're getting more companies. Well, everyone's worried that the software SaaS apocalypse as they call it, you know, a lot of those companies are doing a lot of buybacks and so I think there could be good pockets of value there as well.
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A
That is the WTV etf, the wisdom tree US Value fund is what you were alluding to there for everyone listening and taking notes and trying to like find the tickers here, here. Because I want to make sure everyone can act upon if they are interested in any of these things. So you think, just to follow up on Robert's question here, that people are ignoring value at the moment with these, you know, PE ratios around that 12, 13, 14, 50 times compared to 21, 22. Who knows how high the S and P got? You think that value stocks right now could be an interesting thing to keep an eye on is what I'm hearing.
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B
Yeah, I think that is. It's certainly not expensive. I mean with the narrative that tech is so expensive and I think there's pockets of tech that, that are, are increasingly showing up in that fund but. And then the aggregate being 13, it's a very. I mean the average P for the S and P historically going back 150 years was 16. So these stocks are selling at generally way below the typical valuation of the market. And you say, all right, well some of these stocks are going away. The software stocks are now like your preeminent value dying stock. It hasn't showed up in the fundamentals yet. You can say, all right, well, that the writing's on the wall. Adobe's earnings are going to crater. They're no longer going to need Adobe because we're going to do it all things on anthropic and OpenAI and all these new AI tools or maybe their Firefly AI actually is really dramatically growing. They figure out how to get AI to their benefit. Maybe they don't need as many employees. Maybe they actually can compete over time and the revenue is stickier than people fear. And then single digit P es getting close to it and big buybacks, that might be a powerful, attractive combination.
- [32:52]
A
I completely agree. I am very much in the value camp myself right now as I look around my own portfolio and thinking about what stocks I'm actively buying. I love scooping up shares of Amazon after it gets beat down, trading at the lowest, you know, EBITDA to enterprise value it's traded at in years. I Actually was talking about this with Robert just the other day. Looking at the price to operating cash flow multiple right now for Amazon, it's trading at 17 times operating cash flow, which is lower than the depths of the 2022 bear market. Right. So like that's the type of value I'm sure that you guys got going on here in the Wisdom Tree US Value fund. But I, listen, I'm, I'm right there with you. I think value is very important. As you know, we see these names that are the opposite right. That they're just going vertical on these stock charts. It's like I don't want to touch any of that. Give me the stuff that's undervalued historically speaking that are doing really well and sort of forgotten as it relates to this AI, you know, bull market we've been in for the last three or four years.
- [33:51]
B
Very much I agree with that. We, we ended up selling Walmart out of that, that fund. That sort of Walmart versus Amazon I think is the classic valuation story. And I'm with you. I don't think we've added Amazon yet to that value fund, but that is something we'll be looking at.
- [34:07]
C
Wow, what a great conversations. Stepping back though, it really does feel like politics, policy and markets are kind of all tangled together in a way they've never been before. So for regular investors, Jeremy, trying to make sense of all this, what's the biggest mistake you see people making? Because we always see these knee jerk reactions with their portfolios when they see these clickbait headlines and they just overreact all the time. So walk our listeners through what you see in your world as the biggest mistakes the everyday retail investor is making.
- [34:40]
B
Well, the world seems scary out there and with all this conflict it's, it's very tempting to say, hey, I just don't want to take any risk. I go to Cash and you try to get, sit on the sidelines, but it's once you, you do that, it's also very tough to get back in the markets because the world is really always risky. And we do have, I've worked with Professor Siegel from Wharton for the last 25 years. We've got a book stocks for the long run. It helps bring comfort to the long term returns on the market. And so I'd say getting too defensive in the moments where things look very bad tends to be the worst emotions. But also these conflicts as we talked about, don't have to just be getting in defensive because there's risk around the world. There's a lot of places where you could find upside catalysts from all these negative headlines. And so I think things like that Geo Alpha opportunities we talked about is one way we can help you manage that. But these other themes, the things like the inflation plus for the inflation risk. Inflation is the top of mind risk. I think sort of rising commodity prices being the key driver of that risk. I think that is people been under allocated to that. So, so building well diversified portfolios not overly focused on the US you know 80% type US allocation is often what we see. The world used to be 5050 US foreign. Now I think the benchmark ACWI all country world energy is 6040 but most people have nowhere near 60 40. Our geo alpha is more like 5050 that fund that we talked about. So you know I think being globally diversified still is important. The innovation is going to come from there. As I talked about the defense tech super cycle come bring it all together. I do think there is a good case for long term international allocations and so don't always stay focused on the US and don't get too defensive as these headlines try to scare you out of the market.
- [36:28]
A
Now before we ask Jeremy our final question Robert Goldman Sachs Research just published something that went viral in the media. They're calling it the return of physical assets. Specifically these tangible assets that cannot be disrupted by AI.
- [36:42]
C
Yeah, Goldman says that this one bucket from the report has outperformed capital light companies by roughly 35% since the the start of 2025. 35%. At the same time the software sector is currently down about 30% from all time highs. The report basically says the market is repricing what things are worth today based on whether they're physical and hard to replace or just digital and vulnerable to disruption.
- [37:08]
A
They're calling the winners heavy assets with Low Obsolescence or H.A.L.O. as an acronym. And we were reading the report and thinking what should we see in this analysis? Blue chip artwork. And here's why. Because there's scarce supply for artists like Picasso and Basquiat. And while software valuations began to fall, a klimt painting in 1907 just sold for $236 million in November. Obviously this is an outlier but still the highest price ever paid for modern art at auction. So how about that for low obsolescence?
- [37:38]
C
I mean that's the thing. The Art Price 100 Index has outpaced the S&P 500 by 64% from 2000 to 2024. Pretty amazing stat. And we've been using today's sponsor Masterworks for years. You guys have heard us talk about it and they let you invest in shares of museum quality artworks featuring Basquiat, Banksy and Picasso without having to spend millions of dollars. And this is a compelling investment most people couldn't possibly access Without Masterworks since 2019, Austin, this is a crazy set as well. Over 70,000 members have invested in over $1.3 billion across more than 500,000 DOL artworks and across 26 exits to date, investors have seen net annualized returns like 14.6%, 17.6% and 17.8%.
- [38:29]
A
Well, while we got Goldman Sachs telling investors to get real about those physical assets and the wealthy having now poured hundreds of millions into single paintings, you might want to see if art fits in your own portfolio. Better yet, our listeners can now actually skip the wait list at Masterworks Art Rich Habits. That's Masterworks Art Rich Habits. Link in the show notes below. Go check that out to skip the wait list and jump on Masterworks immediately. You don't have to go be behind all the other people that are trying to go on the platform. We've got you priority access to Masterworks. Again, that's Masterworks Art Rich Habits.
- [39:09]
C
And always remember, investing involves risk. Past performance is not indicative of future results. See important Regulation a disclosures@masterworks.com CD all
- [39:20]
A
right, Robert, let's now jump back to our interview with Jeremy.
- [39:22]
C
So Jeremy, you summed it up well. Give us one sector you're super excited about for the next two years.
- [39:29]
B
Well, I, I do. It's hard to say with all that stuff happening in defense, the drones. It's hard to not be in the drone technology. I think that's the key area that we see a lot of real interest in physical AI and drones is a place we really want to be.
- [39:46]
A
So do you guys have a drone etf? Oh yeah, you do.
- [39:49]
B
Don't let me sue to a theater near you.
- [39:52]
C
Does this drone technology ETF do you wrapper in the Joby Aviations and the Archers and all of them that are in this industry of these ET vols and doing all of that.
- [40:04]
B
We're definitely looking at all these things as we think where the technologies are going. It's going to be some combinations of the humanoid supply chain drones in all applications of physical AI. So we will be looking at all three of those subsectors for inclusion in our indexes going forward there.
- [40:19]
A
I can't wait for that. That is so cool that you guys are bringing a wisdom tree. Physical AI, humanoids and drones, ETF here to the United States. So cool that you all are doing that. And thanks for alluding to that. I don't know if that's public knowledge yet, but it is.
- [40:33]
C
Now, I was going to say, you heard it here first.
- [40:36]
B
Public filing. And the index is live. And we do have a fund in your Europe.
- [40:41]
A
Very cool. Jeremy, thanks so much for joining us on this week's episode of the Rich Habits podcast. We're so grateful to get industry experts like you on the show talking with hundreds of thousands of retail investors across all different platforms and mediums, because it's going to get shared far and wide, not just on the show, but newsletters and on X and Instagram and clips and everything like that. So we just love that you're able to come here and say, listen, Austin, Robert, y' all don't have to be the geopolitical experts. I'll be that. And I'll tell you. And build products that will allow retail investors to invest toward these themes that we've seen coming a mile away, like the Europe and Asia. And now this drone stuff. It's. And then of course, wtip like you guys are crushing it. Thanks so much for joining us, Jeremy, and hopefully we'll have you back soon.
- [41:24]
B
So much fun. Thank you so much. Pleasure being here, Robert.
- [41:27]
A
I don't think I've been more jazzed to add half a dozen ETFs to my watch list and my arsenal. Right. I'm, I'm genuinely so excited about this one. The WDAF, the Wisdom Tree Asia Defense Fund, again, 26% year to date. It was launched in September of last year. It's crushed it. Then this Wisdom Tree Inflation Plus Fund where you're looking for some stability that's not bonds and doesn't have that duration risk. Like, there is some really cool stuff that was talked about in today's episode. I hope all of you took notes and you're now going to go take action because again, I feel like I have a renewed watch list and a renewed, you know, arsenal of different ETFs to pull from out of my back pocket as it relates to. Oh, yeah, yeah. I do want to have some exposure to that in my portfolio. I should put five or ten thousand dollars into this Asia fund or this Europe fund because I did see that Wall Street Journal headline about Europe pulling out and, you know, all these other different things. And it's just, it's awesome. And I'm humbled that people like Jeremy join us on the show to educate us. Robert and Austin, but also our audience and we're so grateful to have, you know, brought together everyone here on this episode and it's, it's just such a fun, cool opportunity to do this.
- [42:41]
C
Yeah, 100%. That was an incredible episode. Just love that we get to bring on the smartest people, the experts, the giants in their fields around the country to help us really educate our audience on all things business, finance mindset and personal finance. More, more importantly so what a great episode and Jeremy just crushed it and
- [43:03]
A
I'm excited he admitted that they're working on a drone physical AI, humanoid etf. How sick is that going to be, man?
- [43:12]
C
I can't wait till that comes out.
- [43:13]
A
Everybody, thanks so much for tuning in to this week's episode of the Rich Habits PODC podcast. And please, if you thought this episode about geopolitics was interesting and you, you and your friends are talking about this or you know, someone who's really into this defense super cycle or whatever, share this episode with a friend because we really think some of the conversations we had today are going to be really important and really beneficial and valuable to a lot of people. Not just listening right now, but people in your network that are interested in learning more about about Asia in Europe and drones and humanoids and like all this stuff. Like it's, it's really interesting stuff. So please consider sharing it with a friend. Consider subscribing to the Rich Habits Newsletter, joining us inside the Rich Habits Network and leaving us a five star review on Spotify. We've taken the liberty to find all of the tickers and websites for all of these ETFs by WisdomTree. They're going to be linked in the show notes below. Go learn about it. Go do your own research. Read the prospectus. Do all the fun stuff. Stuff. You all are educated investors as well, and with that being said, we'll see you on Thursday. Your next chapter in healthcare starts at
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B
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A
meet instructors and learn about our Associate
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A
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