Predictions for 2026: Interest Rates, GDP, Stocks, Housing, and Economic Trends

1
00:00:00,540 --> 00:00:02,940
Today's podcast is about predictions for 2026.

2
00:00:03,440 --> 00:00:05,880
Welcome to Something More with Chris Boyd.

3
00:00:06,240 --> 00:00:09,020
Chris Boyd is a certified financial planner practitioner

4
00:00:09,020 --> 00:00:12,020
and senior vice president financial advisor at Wealth

5
00:00:12,020 --> 00:00:14,680
Enhancement Group, one of the nation's largest registered

6
00:00:14,680 --> 00:00:15,700
investment advisors.

7
00:00:16,260 --> 00:00:18,140
We call it Something More because we'd like

8
00:00:18,140 --> 00:00:20,280
to talk not only about those important dollar

9
00:00:20,280 --> 00:00:22,460
and cents issues, but also the quality of

10
00:00:22,460 --> 00:00:24,900
life issues that make the money matters matter.

11
00:00:25,260 --> 00:00:28,640
Here he is, your fulfillment facilitator, your partner

12
00:00:28,640 --> 00:00:31,800
in prosperity, advising clients on Cape Cod and

13
00:00:31,800 --> 00:00:32,840
across the country.

14
00:00:33,220 --> 00:00:35,660
Here's your host, Jay Christopher Boyd.

15
00:00:35,940 --> 00:00:37,180
Welcome to the podcast.

16
00:00:37,480 --> 00:00:38,380
Thanks for being with us.

17
00:00:38,420 --> 00:00:39,160
I'm Chris Boyd.

18
00:00:39,180 --> 00:00:41,220
I'm here with Jeff Perry, Russ Ball, Brian

19
00:00:41,220 --> 00:00:41,600
Regan.

20
00:00:41,700 --> 00:00:44,260
We are all of the AMR team at

21
00:00:44,260 --> 00:00:46,800
Wealth Enhancement and glad to have you joining

22
00:00:46,800 --> 00:00:47,080
us.

23
00:00:47,200 --> 00:00:51,600
It is the 15th of December for this

24
00:00:51,600 --> 00:00:54,420
show to air and it is the beginning

25
00:00:54,420 --> 00:00:54,960
of Hanukkah.

26
00:00:54,960 --> 00:00:58,680
So for all those who celebrate Hanukkah, our

27
00:00:58,680 --> 00:01:01,240
Jewish friends, we wish you a happy Hanukkah.

28
00:01:03,099 --> 00:01:06,540
Additionally, before we talk about predictions, Brian's got

29
00:01:06,540 --> 00:01:09,260
a few predictions and we'll see if anyone

30
00:01:09,260 --> 00:01:11,620
else has any like crystal ball gazing that

31
00:01:11,620 --> 00:01:12,380
they want to share.

32
00:01:13,120 --> 00:01:16,220
But one of the things that I wanted

33
00:01:16,220 --> 00:01:18,500
to at least take a moment to talk

34
00:01:18,500 --> 00:01:20,100
about, we didn't get a chance to talk

35
00:01:20,100 --> 00:01:25,980
about the Fed's meeting recently and the direction

36
00:01:25,980 --> 00:01:28,380
that that implies and just maybe some things

37
00:01:28,380 --> 00:01:29,480
to take away from that.

38
00:01:29,660 --> 00:01:31,520
I got the impression there was more dissent.

39
00:01:31,680 --> 00:01:35,000
It wasn't as kind of the same kind

40
00:01:35,000 --> 00:01:37,740
of continuity that we seem to see more

41
00:01:37,740 --> 00:01:38,620
frequently.

42
00:01:40,400 --> 00:01:44,880
Yeah, but at the same time, Brian, tell

43
00:01:44,880 --> 00:01:45,600
us a little bit about it.

44
00:01:45,660 --> 00:01:47,800
But in the process, what is this issue

45
00:01:47,800 --> 00:01:50,740
about data that was discussed when it came

46
00:01:50,740 --> 00:01:52,320
to jobs?

47
00:01:52,420 --> 00:01:55,740
It seemed like there was some discussion of

48
00:01:55,740 --> 00:01:57,280
that that came out of this meeting.

49
00:01:58,420 --> 00:02:00,700
Yeah, that was an interesting comment.

50
00:02:00,940 --> 00:02:02,980
So one of the things that Jay Powell

51
00:02:02,980 --> 00:02:05,940
said gave him comfort in cutting is he

52
00:02:05,940 --> 00:02:09,080
thinks the jobs data that he's seeing, which

53
00:02:09,080 --> 00:02:12,760
is lagged and out of date, is overstated

54
00:02:12,760 --> 00:02:15,940
by about 60,000 a month, which is

55
00:02:15,940 --> 00:02:17,480
a significant statement, right?

56
00:02:18,560 --> 00:02:21,100
So he's basically saying, you know, if we're

57
00:02:21,100 --> 00:02:23,300
averaging 40,000, 50,000 a month, he

58
00:02:23,300 --> 00:02:25,460
actually thinks it's negative by 10,000 to

59
00:02:25,460 --> 00:02:26,000
20,000.

60
00:02:26,600 --> 00:02:29,400
And is that a comment on the veracity

61
00:02:29,400 --> 00:02:33,880
of the data being compiled by the agency

62
00:02:33,880 --> 00:02:38,020
compiling it, or is it something that's referring

63
00:02:38,020 --> 00:02:42,420
to just there's this lag or whatever in

64
00:02:42,420 --> 00:02:45,740
data being fully presented?

65
00:02:46,640 --> 00:02:49,160
Is this a critique of some kind that

66
00:02:49,160 --> 00:02:49,620
he's making?

67
00:02:50,260 --> 00:02:51,520
I think it's a bit of both.

68
00:02:52,740 --> 00:02:56,760
You know, he says that they're doing their

69
00:02:56,760 --> 00:02:58,460
best with the data they have, which is

70
00:02:58,460 --> 00:03:03,300
not really the typical jobs data that you'd

71
00:03:03,300 --> 00:03:04,840
get from the Bureau of Labor Statistics on

72
00:03:04,840 --> 00:03:05,900
the first Friday of every month.

73
00:03:07,800 --> 00:03:12,020
They're compiling jobless claims and jolts reports and,

74
00:03:12,140 --> 00:03:15,680
you know, ADP and trying to come up

75
00:03:15,680 --> 00:03:16,620
with a number.

76
00:03:17,900 --> 00:03:19,620
And then the other side of that is,

77
00:03:19,940 --> 00:03:22,160
you know, the way that BLS conducts the

78
00:03:22,160 --> 00:03:25,340
surveys are, you know, can be looked at

79
00:03:25,340 --> 00:03:28,960
as, viewed as a little flawed, you know.

80
00:03:29,920 --> 00:03:31,340
That's not a new critique though.

81
00:03:32,140 --> 00:03:33,980
That's been around for a while, right?

82
00:03:34,380 --> 00:03:35,920
Well, I think the problem is people just

83
00:03:35,920 --> 00:03:37,500
aren't answering surveys like they used to.

84
00:03:38,560 --> 00:03:39,580
I know I don't.

85
00:03:39,640 --> 00:03:41,380
I always think who's the madman who's actually

86
00:03:41,380 --> 00:03:43,600
answering, wasting their time doing this stuff.

87
00:03:44,840 --> 00:03:47,740
The reality is they're just, people aren't doing

88
00:03:47,740 --> 00:03:48,780
it like they used to.

89
00:03:49,820 --> 00:03:52,600
And, you know, if you keep just getting

90
00:03:52,600 --> 00:03:54,200
the same type of person who's willing to

91
00:03:54,200 --> 00:03:57,060
answer a survey, you know, from a phone

92
00:03:57,060 --> 00:03:59,440
call, you know, you're going to get a

93
00:03:59,440 --> 00:04:00,120
different kind of data.

94
00:04:00,540 --> 00:04:05,480
So, you know, there's some legitimate critiques there.

95
00:04:05,560 --> 00:04:08,140
And then, you know, the margin of error

96
00:04:08,140 --> 00:04:10,800
is very wide.

97
00:04:10,820 --> 00:04:12,700
I don't know off the top of my

98
00:04:12,700 --> 00:04:14,140
head, but I think it's around 200,000.

99
00:04:14,320 --> 00:04:16,079
So if you get a number that's 50

100
00:04:16,079 --> 00:04:19,899
,000, that could be anywhere between plus 250

101
00:04:19,899 --> 00:04:21,520
and minus 150, right?

102
00:04:21,720 --> 00:04:24,920
So, you know, saying that it's overstated by

103
00:04:24,920 --> 00:04:29,200
60,000 isn't too great of a statement

104
00:04:29,200 --> 00:04:30,440
in and of itself when you think of

105
00:04:30,440 --> 00:04:32,100
the margin of, the stated margin of error.

106
00:04:32,260 --> 00:04:33,600
Anyways, this is very wide.

107
00:04:33,820 --> 00:04:35,580
So, you know, it's the best we have.

108
00:04:35,660 --> 00:04:37,160
They're doing the best they can with the

109
00:04:37,160 --> 00:04:37,840
data they have.

110
00:04:39,380 --> 00:04:42,960
And, you know, I wouldn't be surprised if

111
00:04:42,960 --> 00:04:46,720
the jobs data was overstated.

112
00:04:46,880 --> 00:04:51,560
I mean, anecdotally, you don't get the feeling

113
00:04:51,560 --> 00:04:53,580
that the job market's very robust.

114
00:04:54,880 --> 00:04:57,320
So, you know, to me, it seems reasonable,

115
00:04:57,460 --> 00:04:57,920
you know.

116
00:04:59,340 --> 00:05:01,460
Jeff, so what was the result?

117
00:05:02,180 --> 00:05:03,880
Quarter point reduction?

118
00:05:04,300 --> 00:05:06,700
Yeah, quarter point in the Fed funds rate,

119
00:05:06,700 --> 00:05:08,060
which was as expected.

120
00:05:08,800 --> 00:05:13,040
Although, you know, usually when as expected happens,

121
00:05:13,040 --> 00:05:15,500
the market either does nothing or sells off,

122
00:05:15,580 --> 00:05:17,480
you know, buy the rumor, sell the news,

123
00:05:17,520 --> 00:05:17,700
right?

124
00:05:17,780 --> 00:05:21,920
But the day of the Federal Reserve cut,

125
00:05:23,040 --> 00:05:26,860
at the time of Powell's comments, the market

126
00:05:26,860 --> 00:05:27,660
had a great day.

127
00:05:28,340 --> 00:05:31,160
So it was a little bit, I found

128
00:05:31,160 --> 00:05:35,040
a little surprising because it wasn't dovish, you

129
00:05:35,040 --> 00:05:36,380
know, wasn't like, oh, we're going to keep

130
00:05:36,380 --> 00:05:38,020
rolling this along.

131
00:05:38,260 --> 00:05:40,800
It was kind of hawkish, actually, like maybe

132
00:05:40,800 --> 00:05:44,300
one next year, not maybe one in January,

133
00:05:44,480 --> 00:05:45,860
maybe one next year.

134
00:05:46,240 --> 00:05:48,540
And we're data dependent and all the things

135
00:05:48,540 --> 00:05:51,620
he usually says, but the market seemed to

136
00:05:51,620 --> 00:05:52,920
like it, whatever he said.

137
00:05:52,920 --> 00:05:57,180
And back to your dissents, there were two

138
00:05:57,180 --> 00:06:00,780
of the Fed presidents that said no cut

139
00:06:00,780 --> 00:06:02,980
should be had, no reduction.

140
00:06:03,680 --> 00:06:06,820
And there was one, the most recent appointment

141
00:06:06,820 --> 00:06:09,660
by Trump, who voted against it because he

142
00:06:09,660 --> 00:06:12,180
wanted a 50% basis point cut.

143
00:06:12,740 --> 00:06:14,040
So not enough, right?

144
00:06:14,620 --> 00:06:15,600
Yeah, yeah.

145
00:06:15,740 --> 00:06:19,280
Which, you know, majority agreed to the quarter

146
00:06:19,280 --> 00:06:20,140
point cut.

147
00:06:20,320 --> 00:06:21,200
So that's where we are.

148
00:06:21,520 --> 00:06:23,340
And so where does that leave us for

149
00:06:23,340 --> 00:06:25,940
a rate range in the neighborhood of three

150
00:06:25,940 --> 00:06:26,680
and a half percent?

151
00:06:27,260 --> 00:06:28,560
Three and a half to 375.

152
00:06:29,180 --> 00:06:29,380
Yep.

153
00:06:29,380 --> 00:06:29,580
Okay.

154
00:06:30,500 --> 00:06:31,040
All right.

155
00:06:31,880 --> 00:06:34,560
So if you have money market funds, if

156
00:06:34,560 --> 00:06:38,040
you have high interest savings accounts, you probably

157
00:06:38,040 --> 00:06:40,000
will see those yields come down a little

158
00:06:40,000 --> 00:06:43,420
bit over treasury rates will probably come down

159
00:06:43,420 --> 00:06:43,800
a little bit.

160
00:06:44,440 --> 00:06:45,480
CDs, yep.

161
00:06:45,680 --> 00:06:47,140
Some of these will start to work their

162
00:06:47,140 --> 00:06:51,600
way into the rates we feel as consumers

163
00:06:51,600 --> 00:06:53,300
and the way we do our savings.

164
00:06:54,600 --> 00:06:58,100
On the other hand, you know, not so

165
00:06:58,100 --> 00:07:00,640
much necessarily when it comes to mortgage rates

166
00:07:00,640 --> 00:07:02,600
or whatever, though they seem to have come

167
00:07:02,600 --> 00:07:03,940
down from their highs.

168
00:07:05,080 --> 00:07:07,860
Anyone know offhand where mortgage rates are these

169
00:07:07,860 --> 00:07:08,200
days?

170
00:07:09,260 --> 00:07:11,760
Mortgage, about 6.4, 30 year.

171
00:07:14,000 --> 00:07:14,540
Yeah, that's good.

172
00:07:15,600 --> 00:07:16,920
Common man on the street.

173
00:07:17,080 --> 00:07:18,980
But better than the sevens.

174
00:07:19,100 --> 00:07:21,120
And we had seen not too long ago.

175
00:07:21,480 --> 00:07:21,620
Yeah.

176
00:07:21,740 --> 00:07:25,580
Common man on the street hearing of a

177
00:07:25,580 --> 00:07:26,300
rate point cut.

178
00:07:26,300 --> 00:07:29,940
And, you know, we've had three of them

179
00:07:29,940 --> 00:07:32,420
now, you know, so far this year.

180
00:07:32,740 --> 00:07:33,000
Yeah.

181
00:07:33,160 --> 00:07:36,740
Might think that mortgage should come down more,

182
00:07:36,840 --> 00:07:37,040
right?

183
00:07:37,100 --> 00:07:40,900
Or even bonds, bond yields should come down

184
00:07:40,900 --> 00:07:41,220
more.

185
00:07:41,460 --> 00:07:43,960
And in this time period, like the 10

186
00:07:43,960 --> 00:07:45,900
year has gone up and down, but it

187
00:07:45,900 --> 00:07:48,800
really hasn't moved substantially based upon these rate

188
00:07:48,800 --> 00:07:49,040
cuts.

189
00:07:49,380 --> 00:07:51,640
So do I hear a prediction in the

190
00:07:51,640 --> 00:07:53,240
comments coming from Jeff Perry?

191
00:07:53,720 --> 00:07:55,460
Well, that is part of the title.

192
00:07:56,700 --> 00:07:59,600
Yeah, I'll translate that, yeah.

193
00:08:01,320 --> 00:08:03,180
Where do you want the prediction of rate

194
00:08:03,180 --> 00:08:05,560
cuts or long term rate cuts or long

195
00:08:05,560 --> 00:08:07,100
term reductions or bonds?

196
00:08:07,460 --> 00:08:08,600
There's a lot here.

197
00:08:09,100 --> 00:08:09,940
You tell me.

198
00:08:10,180 --> 00:08:15,460
My first prediction of the podcast is that

199
00:08:15,460 --> 00:08:18,380
they will be more than one interest rate

200
00:08:18,380 --> 00:08:19,660
cut next year.

201
00:08:20,140 --> 00:08:21,600
I'm not really going on a big limb

202
00:08:21,600 --> 00:08:21,780
here.

203
00:08:21,880 --> 00:08:22,640
I'm not giving a number.

204
00:08:22,640 --> 00:08:23,940
Not rate change, but rate cut.

205
00:08:24,540 --> 00:08:27,040
Yeah, Federal Reserve rate cuts, there will be

206
00:08:27,040 --> 00:08:30,180
more than one, which is where the chairman

207
00:08:30,180 --> 00:08:32,400
said yesterday that that's most likely.

208
00:08:32,600 --> 00:08:34,200
So I'm saying there's going to be more.

209
00:08:34,440 --> 00:08:35,039
All right.

210
00:08:36,000 --> 00:08:36,780
There you go.

211
00:08:36,960 --> 00:08:37,940
You heard it here first.

212
00:08:38,340 --> 00:08:39,220
I'll go out on a limb.

213
00:08:39,340 --> 00:08:40,299
I'll go out on a limb a little

214
00:08:40,299 --> 00:08:41,120
further than Jeff.

215
00:08:41,159 --> 00:08:42,919
I think there's going to be at least

216
00:08:42,919 --> 00:08:43,860
three cuts.

217
00:08:44,160 --> 00:08:44,500
All right.

218
00:08:44,540 --> 00:08:45,900
That's further than I went, for sure.

219
00:08:46,160 --> 00:08:46,460
At least 75.

220
00:08:47,100 --> 00:08:50,720
And I think there's a high probability that's...

221
00:08:51,280 --> 00:08:53,440
How many notes can you name that tune

222
00:08:53,440 --> 00:08:53,760
in?

223
00:08:53,940 --> 00:08:55,720
You probably don't know that reference.

224
00:08:55,940 --> 00:08:56,680
Name that tune.

225
00:08:57,320 --> 00:08:59,660
But do you want to go further on

226
00:08:59,660 --> 00:09:00,680
that limb, Russ?

227
00:09:00,720 --> 00:09:01,760
That's where I was going with that.

228
00:09:01,980 --> 00:09:02,860
Four rate cuts.

229
00:09:05,140 --> 00:09:06,080
I love it.

230
00:09:06,160 --> 00:09:07,540
You guys can be right and I'm not

231
00:09:07,540 --> 00:09:07,920
wrong.

232
00:09:10,760 --> 00:09:11,540
Oh my goodness.

233
00:09:11,680 --> 00:09:11,940
All right.

234
00:09:12,040 --> 00:09:12,660
So in any case...

235
00:09:14,100 --> 00:09:15,840
So can I explain my...

236
00:09:15,840 --> 00:09:18,240
Give my reasoning for at least three before

237
00:09:18,240 --> 00:09:19,000
we move on?

238
00:09:19,440 --> 00:09:21,040
And I think this is a great segue.

239
00:09:22,660 --> 00:09:25,320
So the president's going to be nominating his

240
00:09:25,320 --> 00:09:29,520
own Fed chair in April or May.

241
00:09:29,900 --> 00:09:31,080
That is an excellent point.

242
00:09:31,520 --> 00:09:33,780
And he has made no bones about the

243
00:09:33,780 --> 00:09:36,960
fact that he thinks rates should be zero.

244
00:09:38,460 --> 00:09:40,760
And I think he's going to put in

245
00:09:40,760 --> 00:09:41,180
a puppet.

246
00:09:43,740 --> 00:09:45,800
And it's probably going to be Kevin Hatchet.

247
00:09:45,800 --> 00:09:46,020
Bias is showing.

248
00:09:48,180 --> 00:09:51,020
I mean, the reality of the situation is

249
00:09:51,020 --> 00:09:51,120
showing.

250
00:09:51,120 --> 00:09:54,300
That's what he's indicated he intends to do.

251
00:09:54,520 --> 00:09:56,120
I follow your logic here.

252
00:09:56,380 --> 00:09:59,540
All I'm doing is repeating what our furious

253
00:09:59,540 --> 00:10:02,220
leader says every day.

254
00:10:02,520 --> 00:10:03,820
I have to defend something.

255
00:10:04,240 --> 00:10:07,560
I don't think he's suggested that his next

256
00:10:07,560 --> 00:10:10,260
Fed president will be a puppet.

257
00:10:11,580 --> 00:10:14,340
Well, it's going to be Kevin Hatchet.

258
00:10:14,480 --> 00:10:16,340
Or at least that is the expectation.

259
00:10:16,680 --> 00:10:21,440
And Kevin Hatchet has been nothing but a

260
00:10:21,440 --> 00:10:22,520
puppet for the president.

261
00:10:22,720 --> 00:10:23,940
There's no other way to put it.

262
00:10:24,420 --> 00:10:27,120
In the role that he's in.

263
00:10:27,340 --> 00:10:30,840
History is full of appointments being made to

264
00:10:30,840 --> 00:10:31,880
people who...

265
00:10:33,840 --> 00:10:36,280
Prognosticators, experts had opinions about what they would

266
00:10:36,280 --> 00:10:36,600
do.

267
00:10:37,040 --> 00:10:38,720
And then they don't do them.

268
00:10:39,180 --> 00:10:41,500
Well, I honestly hope you're right and hope

269
00:10:41,500 --> 00:10:42,000
I'm wrong.

270
00:10:42,100 --> 00:10:43,620
But I think he's the next Arthur Burns.

271
00:10:44,460 --> 00:10:46,540
And if people are unfamiliar with who Arthur

272
00:10:46,540 --> 00:10:49,520
Burns is, he was a Nixon puppet at

273
00:10:49,520 --> 00:10:54,100
the Federal Reserve who kept rates low for

274
00:10:54,100 --> 00:10:54,600
too long.

275
00:10:54,720 --> 00:10:57,240
And inflation grew well out of control.

276
00:10:58,220 --> 00:10:59,820
And I expect he's going to be closer

277
00:10:59,820 --> 00:11:02,740
to that than Ben Bernanke or Jay Powell

278
00:11:02,740 --> 00:11:05,660
or Paul Volcker for that matter.

279
00:11:05,960 --> 00:11:10,040
So this is about expectations and predictions.

280
00:11:10,720 --> 00:11:12,160
That's what I expect.

281
00:11:12,320 --> 00:11:13,160
At least three cuts.

282
00:11:13,620 --> 00:11:14,740
All right, excellent.

283
00:11:15,620 --> 00:11:18,080
I get the rationale anyway.

284
00:11:18,240 --> 00:11:19,360
The idea that there's going to be a

285
00:11:19,360 --> 00:11:23,520
new Fed chair and probably there may even

286
00:11:23,520 --> 00:11:28,540
be some other turnover as well.

287
00:11:28,900 --> 00:11:31,700
People may resign as well with the new

288
00:11:31,700 --> 00:11:33,000
leadership and such.

289
00:11:34,460 --> 00:11:36,820
So I think that makes sense.

290
00:11:36,920 --> 00:11:37,660
I follow your rationale.

291
00:11:38,560 --> 00:11:41,100
So Brian, you had the idea of talking

292
00:11:41,100 --> 00:11:42,500
about some predictions.

293
00:11:42,500 --> 00:11:45,480
So let me turn things to you for

294
00:11:45,480 --> 00:11:46,160
a minute or two.

295
00:11:46,740 --> 00:11:49,360
What did you have in mind for some

296
00:11:49,360 --> 00:11:50,880
of your predictions for the year?

297
00:11:51,360 --> 00:11:54,720
Yeah, so I did write an article on

298
00:11:54,720 --> 00:11:54,900
this.

299
00:11:54,940 --> 00:11:56,360
And I'm hoping to have it posted before

300
00:11:56,360 --> 00:11:57,040
the end of the year.

301
00:11:57,720 --> 00:12:00,880
So hopefully people can listen to this podcast,

302
00:12:00,980 --> 00:12:02,640
but also review it on our website in

303
00:12:02,640 --> 00:12:03,960
the next couple of weeks.

304
00:12:04,160 --> 00:12:08,120
But we just talked about the Fed funds

305
00:12:08,120 --> 00:12:09,280
and we talked about mortgages.

306
00:12:09,280 --> 00:12:12,160
And that's interesting because number one and number

307
00:12:12,160 --> 00:12:13,520
two are related.

308
00:12:14,240 --> 00:12:17,620
I think the US CPI, which is inflation,

309
00:12:18,060 --> 00:12:21,060
not the Fed's preferred measure, but a widely

310
00:12:21,060 --> 00:12:24,380
followed measure of inflation, will stay above 3

311
00:12:24,380 --> 00:12:26,580
% until the second half of 2026.

312
00:12:27,320 --> 00:12:28,600
Why do I think that?

313
00:12:29,040 --> 00:12:31,700
That is when the effects of tariffs will

314
00:12:31,700 --> 00:12:32,300
roll off.

315
00:12:32,960 --> 00:12:33,620
What was that?

316
00:12:33,680 --> 00:12:35,420
You think it will do what, CPI?

317
00:12:35,760 --> 00:12:38,540
Stay above 3% until the second half

318
00:12:38,540 --> 00:12:39,260
of 2026.

319
00:12:39,860 --> 00:12:42,080
So right now it's above 3%.

320
00:12:42,080 --> 00:12:45,760
It's not significantly above 3%.

321
00:12:45,760 --> 00:12:48,960
It's at 3.03 for the US Core

322
00:12:48,960 --> 00:12:50,440
Consumer Price Index right now.

323
00:12:50,960 --> 00:12:52,540
And I think it's going to remain there

324
00:12:52,540 --> 00:12:56,620
for at least another six months, which is

325
00:12:56,620 --> 00:12:57,560
tough news, right?

326
00:12:57,840 --> 00:13:03,640
And if my prediction on the Federal Reserve

327
00:13:03,640 --> 00:13:05,080
that we're going to be cutting for the

328
00:13:05,080 --> 00:13:07,960
sake of cutting, it could stay higher for

329
00:13:07,960 --> 00:13:08,720
much longer.

330
00:13:10,020 --> 00:13:11,900
You know, I also think it's quite possible

331
00:13:11,900 --> 00:13:13,160
that we're going to need those cuts.

332
00:13:13,300 --> 00:13:14,340
And part of the reason why I think

333
00:13:14,340 --> 00:13:16,940
we might need those cuts is because I

334
00:13:16,940 --> 00:13:21,140
think wealthier, older people, for the most part,

335
00:13:21,240 --> 00:13:28,480
have really been doing well with this risk

336
00:13:28,480 --> 00:13:30,760
-free interest rate of 5% for the

337
00:13:30,760 --> 00:13:31,240
last few years.

338
00:13:31,320 --> 00:13:32,740
I think it's been great, right, for them.

339
00:13:33,240 --> 00:13:35,600
And I think there's going to be, you

340
00:13:35,600 --> 00:13:37,120
know, a slowdown in the wealth effect when

341
00:13:37,120 --> 00:13:40,160
they start getting 3.5% or 3%.

342
00:13:40,160 --> 00:13:42,880
And I think in order to stimulate more

343
00:13:42,880 --> 00:13:45,680
borrowing, you're going to need to cut significantly

344
00:13:45,680 --> 00:13:46,380
more than that.

345
00:13:46,540 --> 00:13:49,500
So I do think, you know, it's inevitable

346
00:13:49,500 --> 00:13:50,580
that we're probably going to have more than

347
00:13:50,580 --> 00:13:52,900
one next year, but I also think, you

348
00:13:52,900 --> 00:13:54,420
know, it could very well be justified.

349
00:13:55,700 --> 00:13:59,480
Now on mortgages, that was my, you know,

350
00:13:59,500 --> 00:14:01,380
this isn't about mortgages, but it's related to

351
00:14:01,380 --> 00:14:02,340
mortgages and interest rates.

352
00:14:02,900 --> 00:14:05,180
I think we're going to have a, I

353
00:14:05,180 --> 00:14:06,660
think the U.S. single family home price

354
00:14:06,660 --> 00:14:09,280
is going to fall by 5% year

355
00:14:09,280 --> 00:14:12,320
over year at some point in 2026.

356
00:14:13,200 --> 00:14:17,520
And that's a pretty lofty prediction because home

357
00:14:17,520 --> 00:14:18,580
prices don't typically fall.

358
00:14:18,900 --> 00:14:20,500
You know, there's been a handful of years

359
00:14:20,500 --> 00:14:21,560
when it's actually happened.

360
00:14:22,360 --> 00:14:24,420
But I'm looking at a chart right now

361
00:14:24,420 --> 00:14:28,160
from Redfin, and there are 500,000 more

362
00:14:28,160 --> 00:14:30,660
sellers than buyers right now.

363
00:14:31,960 --> 00:14:34,280
And existing family homes, you're saying?

364
00:14:35,820 --> 00:14:39,100
Just U.S. single family homes, whether existing

365
00:14:39,100 --> 00:14:39,680
or new.

366
00:14:40,480 --> 00:14:44,380
I don't think the metric that I pulled

367
00:14:44,380 --> 00:14:46,260
differentiates.

368
00:14:46,600 --> 00:14:48,240
I just think it's single family homes.

369
00:14:48,320 --> 00:14:50,240
And how many more you said right now?

370
00:14:51,440 --> 00:14:56,860
It's 500,000 more, 530,000 more sellers

371
00:14:56,860 --> 00:14:57,860
than buyers right now.

372
00:14:58,300 --> 00:15:00,260
So what I think is happening is we

373
00:15:00,260 --> 00:15:05,420
have this situation where people want to sell

374
00:15:05,420 --> 00:15:08,080
for one reason or another, but they either

375
00:15:08,080 --> 00:15:10,720
own their home outright, which a lot of

376
00:15:10,720 --> 00:15:11,500
people do in this country.

377
00:15:12,440 --> 00:15:13,640
Jeff, you might know better than me, but

378
00:15:13,640 --> 00:15:14,880
I think the number is more than 50

379
00:15:14,880 --> 00:15:15,360
% now.

380
00:15:16,800 --> 00:15:18,480
Or they have a very low interest rate,

381
00:15:18,500 --> 00:15:19,880
so they can sit on it for a

382
00:15:19,880 --> 00:15:20,340
long time.

383
00:15:20,340 --> 00:15:23,780
And I think people are anchoring to prices

384
00:15:23,780 --> 00:15:27,820
that just aren't relevant to the market right

385
00:15:27,820 --> 00:15:28,040
now.

386
00:15:28,280 --> 00:15:30,400
Like high watermark kind of numbers, you're saying?

387
00:15:30,460 --> 00:15:32,600
Yeah, so we're not having any transactions right

388
00:15:32,600 --> 00:15:32,920
now.

389
00:15:33,500 --> 00:15:35,580
And I don't think that's sustainable.

390
00:15:35,800 --> 00:15:37,480
And I think we're going to see prices

391
00:15:37,480 --> 00:15:40,420
come down, especially if mortgage rates don't come

392
00:15:40,420 --> 00:15:43,700
down, which I think is a possibility.

393
00:15:45,900 --> 00:15:48,580
Yeah, I agree with Brian on that.

394
00:15:48,580 --> 00:15:51,980
I look at it as maybe simpler on

395
00:15:51,980 --> 00:15:52,700
housing prices.

396
00:15:52,880 --> 00:15:54,660
It's more of, in my mind, a correction.

397
00:15:55,100 --> 00:15:57,600
Housing prices don't typically go down, I agree,

398
00:15:57,740 --> 00:15:59,980
but housing prices don't typically go up like

399
00:15:59,980 --> 00:16:02,000
they did COVID and such.

400
00:16:02,400 --> 00:16:05,380
So it needs to come back to where

401
00:16:05,380 --> 00:16:07,360
the market is, I guess is the best

402
00:16:07,360 --> 00:16:08,160
way I can say it.

403
00:16:08,540 --> 00:16:10,860
Brian, you've often talked about the issue that

404
00:16:10,860 --> 00:16:14,340
there's an inadequate supply to meet the needs

405
00:16:14,340 --> 00:16:15,560
of housing.

406
00:16:15,560 --> 00:16:18,720
And that has been a factor in the

407
00:16:18,720 --> 00:16:20,920
pricing going up so much.

408
00:16:21,500 --> 00:16:24,440
Has that changed much in terms of new

409
00:16:24,440 --> 00:16:25,560
homes being built?

410
00:16:25,820 --> 00:16:30,100
Or is there an increase in supply?

411
00:16:31,580 --> 00:16:33,980
I mean, there's always an increase in supply,

412
00:16:34,200 --> 00:16:36,000
and more of the existing homes are coming

413
00:16:36,000 --> 00:16:36,640
out of the market.

414
00:16:37,600 --> 00:16:40,280
But we had a dearth of supply for

415
00:16:40,280 --> 00:16:43,960
years in the post-COVID era.

416
00:16:43,960 --> 00:16:46,540
And it's getting better, but it's not good.

417
00:16:48,540 --> 00:16:52,140
Maybe that's going to keep a floor on

418
00:16:52,140 --> 00:16:52,680
these prices.

419
00:16:53,100 --> 00:16:55,980
But I don't think we'll really know until

420
00:16:55,980 --> 00:16:57,020
the spring market hits.

421
00:16:57,500 --> 00:17:00,800
We've talked before about how a lot of

422
00:17:00,800 --> 00:17:02,900
the home buying and selling happens between April

423
00:17:02,900 --> 00:17:03,339
and August.

424
00:17:03,800 --> 00:17:05,240
And I think that's going to be the

425
00:17:05,240 --> 00:17:06,640
case, and it's going to be interesting to

426
00:17:06,640 --> 00:17:08,180
see what happens then.

427
00:17:09,500 --> 00:17:10,940
Sorry, Chris, I don't have the numbers in

428
00:17:10,940 --> 00:17:11,260
front of me.

429
00:17:11,260 --> 00:17:13,359
I know that they're higher.

430
00:17:13,640 --> 00:17:15,760
The supply is higher, both in existing and

431
00:17:15,760 --> 00:17:16,400
new home sales.

432
00:17:16,819 --> 00:17:18,540
Well, it's maybe part of the factor in

433
00:17:18,540 --> 00:17:19,980
thinking about prices, right?

434
00:17:20,280 --> 00:17:26,200
And I would think regionally and location may

435
00:17:26,200 --> 00:17:30,340
be a big factor in answering some of

436
00:17:30,340 --> 00:17:30,920
those questions.

437
00:17:31,240 --> 00:17:32,980
It's not uniform across the country.

438
00:17:33,360 --> 00:17:34,600
And what segment of the market?

439
00:17:34,860 --> 00:17:36,660
I think builders are building, certainly.

440
00:17:36,940 --> 00:17:39,580
But if they have buyers at the upper

441
00:17:39,580 --> 00:17:42,080
price range, I think the market that needs

442
00:17:42,080 --> 00:17:44,820
to be built is the entry-level market.

443
00:17:45,220 --> 00:17:47,460
I think that's where the deficit is.

444
00:17:48,220 --> 00:17:49,160
Right, right.

445
00:17:49,640 --> 00:17:51,560
I bet others in the room would agree.

446
00:17:55,280 --> 00:17:55,800
Yeah.

447
00:17:57,040 --> 00:17:58,960
I mean, the first-time home buyer, even

448
00:17:58,960 --> 00:18:02,660
whether Massachusetts and the Cape, where Russ and

449
00:18:02,660 --> 00:18:06,400
Chris are, and Boston, where Brian is, those

450
00:18:06,400 --> 00:18:09,380
markets are very resilient because there's just virtually

451
00:18:09,380 --> 00:18:11,700
no new inventory coming on.

452
00:18:12,660 --> 00:18:17,020
Down here in Florida, where I am, there's

453
00:18:17,020 --> 00:18:18,280
plenty of building.

454
00:18:19,500 --> 00:18:20,920
But if you don't have...

455
00:18:20,920 --> 00:18:22,360
It's geared toward a certain...

456
00:18:22,360 --> 00:18:24,580
If you don't have $500,000 or you

457
00:18:24,580 --> 00:18:28,280
can't handle the $500,000 mortgage range, there's

458
00:18:28,280 --> 00:18:29,820
not a lot of options and not a

459
00:18:29,820 --> 00:18:30,340
lot of building.

460
00:18:30,660 --> 00:18:32,560
And as long as there's a demand, which

461
00:18:32,560 --> 00:18:35,260
there is here for houses, you know, $500

462
00:18:35,260 --> 00:18:37,480
,000 to $1,000,000 is where the

463
00:18:37,480 --> 00:18:38,180
demand is.

464
00:18:39,480 --> 00:18:42,740
Why wouldn't a builder, without some incentive, build

465
00:18:42,740 --> 00:18:45,040
houses that cost that much and make that

466
00:18:45,040 --> 00:18:47,260
much profit rather than building a house for

467
00:18:47,260 --> 00:18:48,460
$250,000 or $300,000?

468
00:18:49,680 --> 00:18:50,520
That's a good point.

469
00:18:52,060 --> 00:18:54,120
I mean, the bottom line is, right, if

470
00:18:54,120 --> 00:18:55,660
I were to buy my house today, the

471
00:18:55,660 --> 00:18:57,260
same one I'm sitting in right now, my

472
00:18:57,260 --> 00:18:58,520
mortgage would be 50% higher.

473
00:18:59,920 --> 00:19:00,780
That's ridiculous.

474
00:19:01,480 --> 00:19:03,060
Between cost and interest rates, right?

475
00:19:03,060 --> 00:19:05,080
Something has to give.

476
00:19:06,460 --> 00:19:08,260
And it's going to happen one way or

477
00:19:08,260 --> 00:19:08,520
another.

478
00:19:08,800 --> 00:19:10,680
I just, you know, it's anybody's guess on

479
00:19:10,680 --> 00:19:11,340
how it's going to happen.

480
00:19:12,780 --> 00:19:13,040
All right.

481
00:19:13,080 --> 00:19:14,220
So we've heard some...

482
00:19:14,220 --> 00:19:15,300
This is interesting stuff.

483
00:19:15,600 --> 00:19:18,680
Some thoughts about real estate, thoughts about mortgages,

484
00:19:18,880 --> 00:19:21,860
thoughts about CPI, interest rates.

485
00:19:23,280 --> 00:19:26,840
What else do you have on your radar,

486
00:19:27,760 --> 00:19:29,160
Brian, that you're thinking about?

487
00:19:29,540 --> 00:19:31,580
Or if anyone else has any predictions, feel

488
00:19:31,580 --> 00:19:32,360
free to chime in.

489
00:19:32,360 --> 00:19:34,380
This was Brian's thoughts.

490
00:19:34,440 --> 00:19:35,540
I have a question for Brian.

491
00:19:35,720 --> 00:19:37,340
I don't know if he's prepared to answer

492
00:19:37,340 --> 00:19:38,320
it, but I bet he is.

493
00:19:39,180 --> 00:19:40,300
GDP forecast.

494
00:19:42,770 --> 00:19:47,550
1.8. I'm going to up that.

495
00:19:48,750 --> 00:19:49,310
Ready?

496
00:19:49,710 --> 00:19:54,950
2.5. From your voice to God's ears.

497
00:19:55,150 --> 00:19:56,230
I'm very optimistic.

498
00:19:56,510 --> 00:19:58,890
There's going to be some stimulus from the

499
00:19:58,890 --> 00:20:00,030
one big, beautiful bill.

500
00:20:00,170 --> 00:20:02,190
There's going to be some bigger tax returns

501
00:20:02,190 --> 00:20:02,670
coming.

502
00:20:04,150 --> 00:20:06,250
Exports are up, at least this past month.

503
00:20:08,270 --> 00:20:09,670
So I'm optimistic.

504
00:20:11,770 --> 00:20:14,430
Yeah, I think, you know, you might be

505
00:20:14,430 --> 00:20:14,670
right.

506
00:20:14,830 --> 00:20:16,060
Potential GDP is 2%.

507
00:20:17,170 --> 00:20:19,430
You know, and that this kind of moves

508
00:20:19,430 --> 00:20:21,150
nicely into my next prediction.

509
00:20:21,410 --> 00:20:23,410
And that is that the hyperscalers will not

510
00:20:23,410 --> 00:20:24,010
cut spending.

511
00:20:25,790 --> 00:20:29,050
You know, I think if that keeps happening,

512
00:20:29,190 --> 00:20:31,750
you know, your 2.5% prediction might

513
00:20:31,750 --> 00:20:33,610
very well be accurate.

514
00:20:33,810 --> 00:20:35,570
Or, you know, possibly even low, right?

515
00:20:36,330 --> 00:20:39,810
You know, when NVIDIA's last earnings call, they

516
00:20:39,810 --> 00:20:43,490
predicted that the hyperscalers would raise their spending

517
00:20:43,490 --> 00:20:45,590
to $600 billion in 2026.

518
00:20:46,230 --> 00:20:49,590
So are you solely focusing hyperscaler as an

519
00:20:49,590 --> 00:20:50,310
AI spend?

520
00:20:50,490 --> 00:20:52,490
Or are you including something else in there?

521
00:20:52,490 --> 00:20:57,230
So I think hyperscalers to me are Meta,

522
00:20:57,390 --> 00:20:59,350
Amazon, Google, Microsoft.

523
00:20:59,970 --> 00:21:02,810
These are the big companies that are scaling

524
00:21:02,810 --> 00:21:08,090
cloud computing and, you know, using or trying

525
00:21:08,090 --> 00:21:10,050
to scale their LLM model, their large language

526
00:21:10,050 --> 00:21:10,490
models.

527
00:21:10,910 --> 00:21:12,950
So those are the hyperscalers to me.

528
00:21:13,030 --> 00:21:15,150
They are spending an enormous amount of money.

529
00:21:15,250 --> 00:21:16,650
You can actually throw Oracle in there too.

530
00:21:16,990 --> 00:21:18,470
And you should throw Oracle in there.

531
00:21:18,530 --> 00:21:19,870
And I don't think anyone's going to stop

532
00:21:19,870 --> 00:21:20,990
spending in 2026.

533
00:21:20,990 --> 00:21:23,770
And my evidence for this is what Jensen

534
00:21:23,770 --> 00:21:25,770
Wong of NVIDIA said on the last earnings

535
00:21:25,770 --> 00:21:25,950
call.

536
00:21:26,050 --> 00:21:29,770
They expect $500 billion in revenue in 2026,

537
00:21:29,950 --> 00:21:33,410
which was incredible that he laid out a

538
00:21:33,410 --> 00:21:35,310
full year of revenue guidance.

539
00:21:35,470 --> 00:21:36,310
That is unheard of.

540
00:21:36,430 --> 00:21:39,010
I mean, normally you get one quarter if

541
00:21:39,010 --> 00:21:39,390
you're lucky.

542
00:21:39,990 --> 00:21:41,890
So the fact that a whole year is

543
00:21:41,890 --> 00:21:42,570
remarkable.

544
00:21:43,090 --> 00:21:45,010
And, you know, I think a lot of

545
00:21:45,010 --> 00:21:47,950
people are waiting with bated breath for that

546
00:21:47,950 --> 00:21:49,130
to turn.

547
00:21:49,130 --> 00:21:50,630
And I think it's going to turn at

548
00:21:50,630 --> 00:21:50,970
some point.

549
00:21:51,070 --> 00:21:51,970
I just don't think it's going to happen

550
00:21:51,970 --> 00:21:52,770
in 2026.

551
00:21:54,190 --> 00:21:55,450
And to your point, I think that's going

552
00:21:55,450 --> 00:21:56,550
to be very helpful to GDP.

553
00:21:57,010 --> 00:21:58,210
And I think, you know, you're right.

554
00:21:58,470 --> 00:21:59,930
You know, we're going to have tax cuts

555
00:21:59,930 --> 00:22:02,870
and refunds are going to be more generous

556
00:22:02,870 --> 00:22:05,790
here in the first half of 2026 as

557
00:22:05,790 --> 00:22:05,930
well.

558
00:22:05,990 --> 00:22:07,870
And that might spur, you know, consumer spending.

559
00:22:09,450 --> 00:22:11,050
So I didn't jot it down.

560
00:22:11,150 --> 00:22:13,330
What was the prediction regarding hyperscalers?

561
00:22:13,910 --> 00:22:15,490
That they will not cut spending.

562
00:22:15,490 --> 00:22:16,330
Okay.

563
00:22:16,990 --> 00:22:19,030
Which is what people are worried about for

564
00:22:19,030 --> 00:22:20,870
if there's a bubble kind of thing.

565
00:22:21,670 --> 00:22:22,110
Right.

566
00:22:22,410 --> 00:22:25,290
And my main source of evidence for this

567
00:22:25,290 --> 00:22:27,150
is the one year of guidance that NVIDIA

568
00:22:27,150 --> 00:22:27,670
gave us.

569
00:22:27,830 --> 00:22:29,650
Now, NVIDIA could be wrong, right?

570
00:22:29,910 --> 00:22:32,070
But to me, that's the best guidepost we

571
00:22:32,070 --> 00:22:32,270
have.

572
00:22:33,230 --> 00:22:34,910
None of this is, you know, I have

573
00:22:34,910 --> 00:22:35,670
10 predictions here.

574
00:22:35,830 --> 00:22:37,550
I say I'm hoping about 600.

575
00:22:37,970 --> 00:22:39,510
I would consider that good, right?

576
00:22:40,950 --> 00:22:42,670
So, you know, none of this is set

577
00:22:42,670 --> 00:22:43,470
in stone, obviously.

578
00:22:43,470 --> 00:22:43,990
Sure.

579
00:22:45,030 --> 00:22:47,250
But I think, you know, Jeff's GDP estimate.

580
00:22:47,830 --> 00:22:50,010
And I threw out 1.7 because I

581
00:22:50,010 --> 00:22:50,950
think we're going to be a little bit

582
00:22:50,950 --> 00:22:51,570
under potential.

583
00:22:51,710 --> 00:22:53,390
That's why I said 1.7. I said

584
00:22:53,390 --> 00:22:55,010
1.8. Do you want to change it

585
00:22:55,010 --> 00:22:55,810
to 1.7?

586
00:22:56,330 --> 00:22:57,890
1.7, 1.8. I mean, we're splitting

587
00:22:57,890 --> 00:22:58,510
hairs, you know.

588
00:22:58,790 --> 00:23:00,570
It's going to be under potential.

589
00:23:00,870 --> 00:23:02,250
You could call it 1.8, you could

590
00:23:02,250 --> 00:23:04,690
call it 1.7. I'll change it to

591
00:23:04,690 --> 00:23:05,810
1.7. Okay.

592
00:23:06,670 --> 00:23:08,330
But I also think the S&P 500

593
00:23:08,330 --> 00:23:10,210
is going to touch 7,800 at some

594
00:23:10,210 --> 00:23:10,450
point.

595
00:23:11,510 --> 00:23:14,270
Um, you know, that might seem kind of

596
00:23:14,270 --> 00:23:15,070
bullish to people.

597
00:23:15,490 --> 00:23:18,390
It's right in line with my fair value

598
00:23:18,390 --> 00:23:19,270
evaluation.

599
00:23:20,770 --> 00:23:23,910
So, you know, I'm expecting or hoping that,

600
00:23:24,170 --> 00:23:25,510
you know, we're going to have another good

601
00:23:25,510 --> 00:23:26,770
year in 2026.

602
00:23:27,370 --> 00:23:29,090
And I think part of that is what

603
00:23:29,090 --> 00:23:32,790
kind of percentage move that would represent today?

604
00:23:35,270 --> 00:23:37,270
I think when I did this, it was

605
00:23:37,270 --> 00:23:37,890
14%.

606
00:23:38,810 --> 00:23:40,430
I don't have it in front of me.

607
00:23:42,190 --> 00:23:42,850
That's all right.

608
00:23:42,910 --> 00:23:43,570
I'm going to see.

609
00:23:44,510 --> 00:23:46,390
Well, you guys, if you guys want to

610
00:23:46,390 --> 00:23:48,550
chat amongst yourselves or whatever.

611
00:23:48,990 --> 00:23:49,930
What's that Mike Myers thing?

612
00:23:51,150 --> 00:23:52,430
Talk amongst yourselves.

613
00:23:53,070 --> 00:23:53,810
Yeah, yeah.

614
00:23:53,830 --> 00:23:54,910
I'll try to get it up.

615
00:23:55,790 --> 00:23:57,490
I would be very happy if that prediction

616
00:23:57,490 --> 00:23:57,850
is right.

617
00:23:58,850 --> 00:23:59,210
All right.

618
00:23:59,210 --> 00:24:00,710
Who would be upset with that, right?

619
00:24:01,630 --> 00:24:03,850
I'm kind of waiting for the correction, but

620
00:24:03,850 --> 00:24:05,510
I'm not really waiting for it.

621
00:24:05,530 --> 00:24:06,550
I don't like to have a pile of

622
00:24:06,550 --> 00:24:07,690
money on the sideline or something.

623
00:24:08,150 --> 00:24:11,290
I just like they do come regularly and

624
00:24:11,290 --> 00:24:12,670
we haven't had a real.

625
00:24:13,850 --> 00:24:14,730
Yeah, right.

626
00:24:15,250 --> 00:24:17,370
Yeah, it doesn't mean a little more of

627
00:24:17,370 --> 00:24:17,590
that.

628
00:24:17,710 --> 00:24:20,590
Doesn't mean we can't have a correction and

629
00:24:20,590 --> 00:24:21,330
7800.

630
00:24:21,810 --> 00:24:22,550
No, absolutely.

631
00:24:24,190 --> 00:24:26,110
Yeah, I think that's very plausible.

632
00:24:26,270 --> 00:24:27,230
I mean, just look at what we had

633
00:24:27,230 --> 00:24:27,730
this year, right?

634
00:24:27,770 --> 00:24:30,930
We had a sizable correction in April, a

635
00:24:30,930 --> 00:24:32,210
very sizable correction in April.

636
00:24:32,370 --> 00:24:34,070
I mean, a downright scare, right?

637
00:24:34,150 --> 00:24:35,810
Yeah, liberation day correction.

638
00:24:35,810 --> 00:24:42,210
Yeah, where people were liberated from their mental

639
00:24:42,210 --> 00:24:42,730
capacity.

640
00:24:42,850 --> 00:24:45,970
It seemed like on that day, but because

641
00:24:45,970 --> 00:24:46,850
it was absolutely crazy.

642
00:24:47,010 --> 00:24:48,930
And thank God that people moved on.

643
00:24:49,110 --> 00:24:50,870
I was scared when they talked about the

644
00:24:50,870 --> 00:24:54,310
idea of the total restructuring of our trade

645
00:24:54,310 --> 00:24:54,810
policy.

646
00:24:55,010 --> 00:24:57,410
And then, fortunately, it was a little less

647
00:24:57,410 --> 00:24:58,810
extreme than it was initially.

648
00:24:59,390 --> 00:25:00,510
It was totally nuts.

649
00:25:00,870 --> 00:25:01,950
I mean, there's no doubt about it.

650
00:25:02,010 --> 00:25:03,250
They backed off completely.

651
00:25:03,250 --> 00:25:05,890
We had what, like 145% tariff on

652
00:25:05,890 --> 00:25:06,190
China.

653
00:25:06,290 --> 00:25:07,590
We had like a 90% tariff on

654
00:25:07,590 --> 00:25:07,970
Vietnam.

655
00:25:08,250 --> 00:25:10,930
I mean, that was going to stop the

656
00:25:10,930 --> 00:25:11,930
economy in its tracks.

657
00:25:12,370 --> 00:25:14,950
And thank God we've come back from that.

658
00:25:15,970 --> 00:25:17,410
And it's been great for the S&P

659
00:25:17,410 --> 00:25:17,730
500.

660
00:25:17,910 --> 00:25:20,090
The S&P 500 is up 18.4

661
00:25:20,090 --> 00:25:25,850
% through last Thursday, which was a good

662
00:25:25,850 --> 00:25:26,070
number.

663
00:25:26,190 --> 00:25:27,510
That's a number I have in front of

664
00:25:27,510 --> 00:25:27,970
me right now.

665
00:25:27,970 --> 00:25:31,170
The All-Country World Index, which includes international

666
00:25:31,170 --> 00:25:33,710
stocks on a market cap basis, is up

667
00:25:33,710 --> 00:25:37,070
22.5%. And that's one of the interesting

668
00:25:37,070 --> 00:25:40,870
stories of 2025, that the vast outperformance of

669
00:25:40,870 --> 00:25:44,670
international stocks versus domestic stocks is wild.

670
00:25:45,570 --> 00:25:47,950
And I think we haven't seen that in

671
00:25:47,950 --> 00:25:49,050
a very, very long time.

672
00:25:49,310 --> 00:25:50,050
That's a good question.

673
00:25:50,270 --> 00:25:51,650
Let's talk about that for a moment.

674
00:25:51,930 --> 00:25:54,450
Before we do, I don't want to leave

675
00:25:54,450 --> 00:25:55,050
tariffs.

676
00:25:55,290 --> 00:25:56,070
I have a prediction.

677
00:25:56,740 --> 00:25:57,030
OK.

678
00:25:57,750 --> 00:25:59,410
It will be in 2026.

679
00:26:00,230 --> 00:26:02,970
I predict the Supreme Court will strike down

680
00:26:02,970 --> 00:26:07,730
all or part of the president's unilateral authority

681
00:26:07,730 --> 00:26:08,430
on tariffs.

682
00:26:11,620 --> 00:26:11,860
All right.

683
00:26:11,980 --> 00:26:13,580
I was looking up the betting odds on

684
00:26:13,580 --> 00:26:14,300
this the other day.

685
00:26:14,600 --> 00:26:19,620
And there's a 25% chance that the

686
00:26:19,620 --> 00:26:23,260
Supreme Court upholds his tariffs on the betting

687
00:26:23,260 --> 00:26:23,560
odds.

688
00:26:23,860 --> 00:26:25,860
Well, I'm in the money then.

689
00:26:26,540 --> 00:26:27,240
You're in the money.

690
00:26:28,240 --> 00:26:32,100
I think legally, it's a fastball down the

691
00:26:32,100 --> 00:26:32,320
middle.

692
00:26:32,780 --> 00:26:37,380
But politically, it's a 25% chance that

693
00:26:37,380 --> 00:26:38,560
they'll do something else.

694
00:26:39,160 --> 00:26:42,200
Legally, it's an easy case to me.

695
00:26:42,800 --> 00:26:46,780
Historically, there's some reasons to doubt that.

696
00:26:46,880 --> 00:26:50,900
But I believe that'll happen in the 2026

697
00:26:50,900 --> 00:26:52,260
spring decisions.

698
00:26:53,180 --> 00:26:55,780
So I think, Brian, when it comes to

699
00:26:55,780 --> 00:26:58,960
the dollar, you've had sort of a general

700
00:26:58,960 --> 00:27:02,880
inclination to think that it would be reasonable

701
00:27:02,880 --> 00:27:05,280
to see the dollar decline continue.

702
00:27:06,940 --> 00:27:10,620
And so similarly, the question about you mentioned

703
00:27:10,620 --> 00:27:16,040
international stocks having outperformed this year, which is

704
00:27:16,040 --> 00:27:17,540
first in a while.

705
00:27:17,740 --> 00:27:19,340
We haven't seen that in many years.

706
00:27:21,200 --> 00:27:25,960
So is it time to be less US

707
00:27:25,960 --> 00:27:32,120
-centric and more of a portfolio weight in

708
00:27:32,120 --> 00:27:33,480
international stocks?

709
00:27:34,080 --> 00:27:37,720
Relative, we've always been pretty underweight international stocks.

710
00:27:39,040 --> 00:27:44,480
What's your thought about the forecast for what

711
00:27:44,480 --> 00:27:49,800
may come when it comes to predictions for

712
00:27:49,800 --> 00:27:53,300
how international, will it continue to fare well?

713
00:27:55,450 --> 00:27:56,330
Good question.

714
00:27:59,270 --> 00:28:01,090
So if you're going to- First of

715
00:28:01,090 --> 00:28:04,030
all, I think the dollar part of it

716
00:28:04,030 --> 00:28:05,730
is part of that equation, right?

717
00:28:05,870 --> 00:28:07,930
You know, what happens with the dollar is

718
00:28:07,930 --> 00:28:09,950
maybe a factor in some of your thinking

719
00:28:09,950 --> 00:28:10,670
on that, right?

720
00:28:11,430 --> 00:28:14,170
So I don't have a good guess on

721
00:28:14,170 --> 00:28:15,090
what the dollar is going to do.

722
00:28:15,350 --> 00:28:16,490
And you're right.

723
00:28:16,490 --> 00:28:21,670
I think we've had quite the tailwind from

724
00:28:21,670 --> 00:28:27,430
the dollar here in 2025.

725
00:28:27,790 --> 00:28:31,210
The dollar's down 10% year to date,

726
00:28:31,570 --> 00:28:34,170
10.1% year to date, the dollar

727
00:28:34,170 --> 00:28:34,610
index.

728
00:28:36,330 --> 00:28:38,510
But that decline has stopped.

729
00:28:38,890 --> 00:28:40,870
It stopped really over the summer, right?

730
00:28:40,890 --> 00:28:42,450
It kind of bottomed and it's actually up

731
00:28:42,450 --> 00:28:42,950
a little bit.

732
00:28:42,950 --> 00:28:47,110
It was down 11.5% at one

733
00:28:47,110 --> 00:28:47,410
point.

734
00:28:47,650 --> 00:28:49,350
So it seems to be, if you just

735
00:28:49,350 --> 00:28:50,630
look at the chart, that the dollar is

736
00:28:50,630 --> 00:28:51,290
leveling off.

737
00:28:52,150 --> 00:28:55,630
And if that continues, then the dollar decline

738
00:28:55,630 --> 00:28:57,110
is no longer going to be a tailwind

739
00:28:57,110 --> 00:28:58,710
for international stocks.

740
00:28:59,090 --> 00:29:01,050
And if you think that all international stocks

741
00:29:01,050 --> 00:29:04,810
on a dollar basis, which is, as Americans,

742
00:29:04,810 --> 00:29:06,510
we should measure it on a dollar basis,

743
00:29:07,090 --> 00:29:12,070
have gotten a 10% surge in a

744
00:29:12,070 --> 00:29:16,970
local currency situation, it's, you know, the outperformance

745
00:29:16,970 --> 00:29:18,930
is not as strong as it might appear.

746
00:29:19,470 --> 00:29:22,210
So, you know, I believe international stocks on

747
00:29:22,210 --> 00:29:23,870
the whole, I quoted the Acquia earlier, but

748
00:29:23,870 --> 00:29:25,510
I think they've done 30% this year,

749
00:29:25,650 --> 00:29:26,650
strip away 10%.

750
00:29:26,650 --> 00:29:29,170
They've done 20%, still better than the S

751
00:29:29,170 --> 00:29:30,750
&P 500, but not much, right?

752
00:29:31,610 --> 00:29:35,490
And if you think that crazy dollar decline

753
00:29:35,490 --> 00:29:37,710
that happened, you know, starting with the anticipation

754
00:29:37,710 --> 00:29:41,150
of tariffs and then the actual liberation day,

755
00:29:41,370 --> 00:29:43,110
it's recovered since then.

756
00:29:43,970 --> 00:29:45,730
And if you think that that move is

757
00:29:45,730 --> 00:29:48,870
done, well, I wouldn't be so bullish on

758
00:29:48,870 --> 00:29:50,790
international stocks just because of the dollar, right?

759
00:29:50,850 --> 00:29:52,610
It seems like that move is done.

760
00:29:52,930 --> 00:29:54,890
You know, anything crazy can happen, as we

761
00:29:54,890 --> 00:29:55,070
know.

762
00:29:55,190 --> 00:29:57,070
I mean, April 2nd was absolutely crazy and

763
00:29:57,070 --> 00:29:58,110
didn't make any sense whatsoever.

764
00:29:58,110 --> 00:30:00,790
So, you know, it's certainly possible that could

765
00:30:00,790 --> 00:30:01,030
happen.

766
00:30:01,130 --> 00:30:04,990
It just seems like we're done with that

767
00:30:04,990 --> 00:30:05,770
situation.

768
00:30:06,270 --> 00:30:07,950
On the other hand, one of my predictions

769
00:30:07,950 --> 00:30:12,790
is that European countries, developed European countries are

770
00:30:12,790 --> 00:30:14,430
going to continue to spend on military and

771
00:30:14,430 --> 00:30:14,690
defense.

772
00:30:16,890 --> 00:30:19,290
And, you know, I, quite frankly, was talked

773
00:30:19,290 --> 00:30:21,850
into this by one of my wealth enhancement

774
00:30:21,850 --> 00:30:27,010
colleagues who, he just said, hey, look, do

775
00:30:27,010 --> 00:30:30,090
you think that the European countries are confident

776
00:30:30,090 --> 00:30:34,070
in their historical position in NATO?

777
00:30:34,310 --> 00:30:36,150
Meaning, is the United States still going to

778
00:30:36,150 --> 00:30:40,210
continue to fund them militarily and defend them

779
00:30:40,210 --> 00:30:41,550
as they historically have?

780
00:30:41,650 --> 00:30:43,710
But there's no way they have the same

781
00:30:43,710 --> 00:30:46,030
trust that they did, you know, a year

782
00:30:46,030 --> 00:30:46,290
ago.

783
00:30:46,490 --> 00:30:48,450
It's just, you know, it would be silly

784
00:30:48,450 --> 00:30:49,110
if they did.

785
00:30:49,520 --> 00:30:52,250
At the same time, you know, Russia invaded

786
00:30:52,250 --> 00:30:54,890
one of their close neighbors and is still

787
00:30:54,890 --> 00:30:56,010
at war with Ukraine.

788
00:30:58,030 --> 00:31:00,770
And Germany has, you know, started to do

789
00:31:00,770 --> 00:31:01,630
some deficit spending.

790
00:31:02,830 --> 00:31:04,970
Japan has started to do some deficit spending.

791
00:31:05,150 --> 00:31:08,270
So, you know, we still have an ongoing

792
00:31:08,270 --> 00:31:12,390
saga in the Taiwan Strait, right?

793
00:31:12,390 --> 00:31:19,350
85% of China's military is focused on

794
00:31:19,350 --> 00:31:20,690
the Taiwan Strait right now.

795
00:31:21,890 --> 00:31:26,170
So, you know, I think my colleague, his

796
00:31:26,170 --> 00:31:28,690
name is Terry Zhao, he, I think he's

797
00:31:28,690 --> 00:31:28,930
right.

798
00:31:29,350 --> 00:31:31,930
And, you know, I took his prediction and

799
00:31:31,930 --> 00:31:32,470
made it my own.

800
00:31:32,590 --> 00:31:34,550
So I'll give him credit where credit is

801
00:31:34,550 --> 00:31:34,690
due.

802
00:31:34,730 --> 00:31:36,230
But I think that that's likely.

803
00:31:36,330 --> 00:31:37,510
And I think that could be a tailwind

804
00:31:37,510 --> 00:31:41,250
for international stocks in 2026.

805
00:31:42,390 --> 00:31:45,050
But we're emerging market stocks, you know, quote,

806
00:31:45,070 --> 00:31:47,990
unquote, value stocks led in 2026.

807
00:31:48,210 --> 00:31:49,130
I think it's going to be more of

808
00:31:49,130 --> 00:31:51,590
a developed market in 20, I mean, 2025.

809
00:31:51,850 --> 00:31:52,670
I think it's going to be more of

810
00:31:52,670 --> 00:31:53,990
a developed market in 2026.

811
00:31:56,520 --> 00:31:58,300
Anything to add to any of those either?

812
00:31:58,400 --> 00:32:00,060
Yes, that's that's really interesting.

813
00:32:00,360 --> 00:32:02,080
I like this, I'm enjoying this.

814
00:32:03,380 --> 00:32:04,940
I don't know if you have any others,

815
00:32:04,940 --> 00:32:06,880
but I think we're probably at a point

816
00:32:06,880 --> 00:32:09,020
where we can put a pin in our

817
00:32:09,020 --> 00:32:09,800
conversation.

818
00:32:10,080 --> 00:32:11,320
Is there anything else you want to add

819
00:32:11,320 --> 00:32:13,860
to the predictions before we wrap up?

820
00:32:13,860 --> 00:32:14,600
Brian?

821
00:32:14,980 --> 00:32:19,280
Well, we talked about Fed cuts and we

822
00:32:19,280 --> 00:32:22,480
talked briefly about how Fed Chair Powell thinks

823
00:32:23,940 --> 00:32:26,480
the employment situation is overstated right now in

824
00:32:26,480 --> 00:32:26,800
the data.

825
00:32:28,300 --> 00:32:33,080
One of my reasonings for Fed cuts is

826
00:32:33,080 --> 00:32:37,040
because, you know, the new chair, but I

827
00:32:37,040 --> 00:32:39,700
also think the economy may need the support.

828
00:32:39,860 --> 00:32:40,600
We talked about that.

829
00:32:40,600 --> 00:32:43,320
And along those lines, I think continuing claims

830
00:32:43,320 --> 00:32:44,200
will go over two million.

831
00:32:45,840 --> 00:32:47,640
So the reasoning for that is I just

832
00:32:47,640 --> 00:32:49,040
don't think there's a lot of robust hiring.

833
00:32:49,340 --> 00:32:50,760
I don't think there's much firing either.

834
00:32:51,200 --> 00:32:53,420
But we haven't been over two million since

835
00:32:53,420 --> 00:32:53,960
2021.

836
00:32:54,400 --> 00:32:56,440
We're at 1.94 right now.

837
00:32:57,460 --> 00:33:00,700
So this is it's trending in that direction.

838
00:33:01,380 --> 00:33:03,740
And if the trend continues, which, you know,

839
00:33:03,740 --> 00:33:07,060
the data is very, let's say, fairly static,

840
00:33:07,340 --> 00:33:09,060
but it hasn't been there in four years.

841
00:33:09,060 --> 00:33:11,920
So, you know, I think that's probably I

842
00:33:11,920 --> 00:33:12,480
think that's likely.

843
00:33:12,860 --> 00:33:15,060
I think that's likely as the economy is,

844
00:33:16,120 --> 00:33:17,280
you know, I think below potential.

845
00:33:17,440 --> 00:33:18,600
Jeff thinks is above potential.

846
00:33:18,780 --> 00:33:19,720
I hope I'm wrong on this one.

847
00:33:19,740 --> 00:33:22,760
But I think I think that that's more

848
00:33:22,760 --> 00:33:23,900
likely than not, in my opinion.

849
00:33:24,320 --> 00:33:26,180
Yeah, I'll take the under on that.

850
00:33:27,900 --> 00:33:28,480
Hope you're right.

851
00:33:28,680 --> 00:33:31,200
Because of a strong economy and because of

852
00:33:31,200 --> 00:33:36,780
the decrease in immigration and the deportation of

853
00:33:36,780 --> 00:33:40,380
individuals here, I think that'll have a downward

854
00:33:40,380 --> 00:33:42,460
impact on unemployment.

855
00:33:45,220 --> 00:33:45,540
All right.

856
00:33:46,200 --> 00:33:47,540
What about discussion?

857
00:33:47,760 --> 00:33:52,040
Sorry, going back to concerns about Fed independence,

858
00:33:52,640 --> 00:33:55,540
like you feel like that might have a

859
00:33:55,540 --> 00:33:59,700
impact on markets every time, you know, Powell's

860
00:33:59,700 --> 00:34:00,900
been under threat.

861
00:34:01,060 --> 00:34:02,540
The market has an immediate reaction.

862
00:34:02,940 --> 00:34:04,320
Do you think that will kind of be

863
00:34:04,320 --> 00:34:07,360
like a drawn out experience where the market

864
00:34:07,360 --> 00:34:09,219
kind of bakes it in over time or

865
00:34:09,219 --> 00:34:11,659
I don't know, what are your what's your

866
00:34:11,659 --> 00:34:12,360
take on that, Brian?

867
00:34:14,100 --> 00:34:15,480
Well, it would have been very bad if

868
00:34:15,480 --> 00:34:16,719
he pushed him out before the end of

869
00:34:16,719 --> 00:34:17,060
his tenure.

870
00:34:17,760 --> 00:34:19,880
That would have that would have just said,

871
00:34:19,880 --> 00:34:22,400
you know, we're throwing out the rule of

872
00:34:22,400 --> 00:34:23,940
law in the United States and we're doing

873
00:34:23,940 --> 00:34:27,400
whatever whatever, you know, the premier wants.

874
00:34:27,719 --> 00:34:30,260
And I'm very thankful that that did not

875
00:34:30,260 --> 00:34:30,560
happen.

876
00:34:31,080 --> 00:34:32,719
And we're going to do this in a

877
00:34:32,719 --> 00:34:33,960
in a reasonable way.

878
00:34:33,960 --> 00:34:37,500
And I think that's why the 10 year

879
00:34:37,500 --> 00:34:39,560
treasury, for example, is at four point one

880
00:34:39,560 --> 00:34:43,060
percent instead of six percent, because, you know,

881
00:34:43,060 --> 00:34:43,699
that didn't happen.

882
00:34:44,159 --> 00:34:46,719
And hopefully, you know, Jeff is right.

883
00:34:47,199 --> 00:34:50,340
And, you know, this continued level headedness that

884
00:34:50,340 --> 00:34:53,360
I think we've seen over the last seven

885
00:34:53,360 --> 00:34:56,920
months, you know, relative level headedness hopefully continues

886
00:34:56,920 --> 00:34:57,900
into 2026.

887
00:34:59,300 --> 00:35:01,140
But yeah, I think for the record, I'm

888
00:35:01,140 --> 00:35:02,780
not predicting level headedness.

889
00:35:07,020 --> 00:35:08,500
It's all relative, right?

890
00:35:09,020 --> 00:35:10,540
Yeah, it's all relative.

891
00:35:13,180 --> 00:35:14,380
Yeah, that's funny.

892
00:35:15,040 --> 00:35:15,220
All right.

893
00:35:15,260 --> 00:35:16,020
Well, this was fun.

894
00:35:16,320 --> 00:35:17,240
Good topic.

895
00:35:17,480 --> 00:35:18,340
Good conversation.

896
00:35:19,600 --> 00:35:22,300
You know, obviously, when it comes to portfolio

897
00:35:22,300 --> 00:35:26,880
management and obviously all these things fit into

898
00:35:26,880 --> 00:35:28,700
the context of the financial plan, we talk

899
00:35:28,700 --> 00:35:29,720
about that quite often.

900
00:35:30,250 --> 00:35:32,720
But when it comes to these kind of

901
00:35:32,720 --> 00:35:36,220
predictions, it probably is worth talking about how

902
00:35:36,220 --> 00:35:39,420
does this work into thinking about portfolio management?

903
00:35:39,920 --> 00:35:41,480
And I would just add that it's somewhat

904
00:35:41,480 --> 00:35:42,300
on the edges.

905
00:35:42,900 --> 00:35:45,040
You know, when we think about our portfolio

906
00:35:45,040 --> 00:35:47,660
designs and strategies, we do have to think

907
00:35:47,660 --> 00:35:50,480
about how some of these factors could be

908
00:35:50,480 --> 00:35:54,280
an influence and how that might impact what

909
00:35:54,280 --> 00:35:54,860
we do.

910
00:35:55,420 --> 00:35:58,780
But ultimately, Brian, maybe it's worth just a

911
00:35:58,780 --> 00:36:01,140
little bit of perspective as though as much

912
00:36:01,140 --> 00:36:02,900
as this is kind of interesting to think

913
00:36:02,900 --> 00:36:06,680
about, when does it become relevant to how

914
00:36:06,680 --> 00:36:11,440
one handles their portfolio and what changes are

915
00:36:11,440 --> 00:36:13,640
made within a portfolio design?

916
00:36:14,240 --> 00:36:15,740
I just don't want it to be the

917
00:36:15,740 --> 00:36:18,960
impression that some of these whims are, you

918
00:36:18,960 --> 00:36:22,500
know, it's kind of interesting and thought provoking.

919
00:36:23,020 --> 00:36:26,060
But when does it really affect portfolio structure?

920
00:36:26,420 --> 00:36:26,920
Do you know what I mean?

921
00:36:27,940 --> 00:36:28,140
Yeah.

922
00:36:28,300 --> 00:36:32,850
So, you know, we talked about how I'm

923
00:36:32,850 --> 00:36:36,550
expecting based on my fair value analysis, a

924
00:36:36,550 --> 00:36:39,630
14% return is my median expectation for

925
00:36:39,630 --> 00:36:41,850
the next 12 months, right?

926
00:36:42,530 --> 00:36:45,290
If that expected return was 7% instead

927
00:36:45,290 --> 00:36:48,070
of 14%, well, we'd probably be taking a

928
00:36:48,070 --> 00:36:49,370
whole lot less risk, right?

929
00:36:49,390 --> 00:36:51,470
We'd probably be more into the fixed income.

930
00:36:51,630 --> 00:36:51,770
Why?

931
00:36:51,770 --> 00:36:54,510
Because, well, a 10 year treasury, I can

932
00:36:54,510 --> 00:36:56,210
get 4% plus a spread, call it

933
00:36:56,210 --> 00:36:56,850
one and a half.

934
00:36:57,770 --> 00:36:58,830
You know, I can get five and a

935
00:36:58,830 --> 00:37:00,090
half in an investment grade bond.

936
00:37:00,250 --> 00:37:03,070
I can get seven from a high yield

937
00:37:03,070 --> 00:37:03,370
bond.

938
00:37:04,090 --> 00:37:05,930
Why would I take equity like risk when

939
00:37:05,930 --> 00:37:07,570
I can take high yield risk, right?

940
00:37:07,690 --> 00:37:08,650
There would be a trade off.

941
00:37:09,750 --> 00:37:12,670
But we are expecting a premium in the

942
00:37:12,670 --> 00:37:13,330
stock market.

943
00:37:13,470 --> 00:37:14,890
Now, anything can happen in the stock market,

944
00:37:14,950 --> 00:37:15,090
right?

945
00:37:15,130 --> 00:37:17,810
The standard deviation is 20%, let's give it,

946
00:37:18,270 --> 00:37:19,050
let's call it, right?

947
00:37:19,050 --> 00:37:22,570
So if I think the median expected return

948
00:37:22,570 --> 00:37:25,970
is 14%, that means that, you know, I

949
00:37:25,970 --> 00:37:28,110
could say with 65% confidence that it

950
00:37:28,110 --> 00:37:31,550
could be anywhere between negative 6% and

951
00:37:31,550 --> 00:37:34,430
positive 34%, right?

952
00:37:34,470 --> 00:37:35,590
That's a huge range.

953
00:37:35,710 --> 00:37:37,770
And I could say with 95% confidence,

954
00:37:38,630 --> 00:37:41,630
you know, which is two standard deviations, that

955
00:37:41,630 --> 00:37:43,990
could be anywhere between negative 26 and, you

956
00:37:43,990 --> 00:37:45,770
know, a gigantic number in the other direction.

957
00:37:46,270 --> 00:37:47,590
So what am I saying?

958
00:37:47,950 --> 00:37:49,930
And I also say that I expect, I

959
00:37:49,930 --> 00:37:51,370
said this in the last webinar, that I

960
00:37:51,370 --> 00:37:53,490
think the tails are fat in the return

961
00:37:53,490 --> 00:37:56,990
distribution, which means that it's a fun way

962
00:37:56,990 --> 00:37:58,430
of saying, I think there's going to be

963
00:37:58,430 --> 00:38:00,150
outsized amount of volatility.

964
00:38:00,390 --> 00:38:03,470
So like Jeff said before, you know, we

965
00:38:03,470 --> 00:38:04,690
could have a correction and we could still

966
00:38:04,690 --> 00:38:05,790
have a 14% return.

967
00:38:06,690 --> 00:38:07,410
Yeah, absolutely.

968
00:38:07,590 --> 00:38:10,730
And I think the way the world is

969
00:38:10,730 --> 00:38:12,610
set up right now, the investing landscape is

970
00:38:12,610 --> 00:38:13,950
set up right I think that is more

971
00:38:13,950 --> 00:38:17,670
likely in 2026 than, you know, an average

972
00:38:17,670 --> 00:38:17,930
year.

973
00:38:18,890 --> 00:38:22,510
So, you know, that all goes into our

974
00:38:22,510 --> 00:38:24,310
portfolio positioning, right?

975
00:38:24,610 --> 00:38:26,170
We talked about international stocks.

976
00:38:26,270 --> 00:38:27,550
How much international do you want to have?

977
00:38:28,490 --> 00:38:29,510
Do you want to have developed?

978
00:38:29,590 --> 00:38:30,530
Do you want to have emerging markets?

979
00:38:31,610 --> 00:38:32,990
You know, we did a lot of things

980
00:38:32,990 --> 00:38:34,990
right in 2025, but we did not have

981
00:38:34,990 --> 00:38:36,990
emerging markets to any significant degree.

982
00:38:37,030 --> 00:38:39,050
And we had to make up for that,

983
00:38:39,230 --> 00:38:42,110
you know, through alternatives, through good sector selection.

984
00:38:43,350 --> 00:38:44,950
There are good decisions that helped.

985
00:38:45,730 --> 00:38:46,130
Right.

986
00:38:46,770 --> 00:38:47,890
You know, one of my predictions that we

987
00:38:47,890 --> 00:38:49,710
did not get to was about private credit

988
00:38:49,710 --> 00:38:51,490
and how I think it's going to continue

989
00:38:51,490 --> 00:38:52,350
to make headlines.

990
00:38:53,990 --> 00:38:56,230
You know, that's in a not so good

991
00:38:56,230 --> 00:38:56,530
way.

992
00:38:57,190 --> 00:38:58,430
In a not so good way.

993
00:38:58,470 --> 00:39:00,150
We haven't had private credit in the portfolio

994
00:39:00,150 --> 00:39:02,210
and it's not from people trying, it's not

995
00:39:02,210 --> 00:39:03,430
from a lack of people trying to sell

996
00:39:03,430 --> 00:39:04,390
it, sell it to us.

997
00:39:05,530 --> 00:39:08,650
You know, my inbox, just like every portfolio

998
00:39:08,650 --> 00:39:10,790
manager across the country is filled with people

999
00:39:10,790 --> 00:39:13,770
trying to sell us this high fee, underperforming

1000
00:39:13,770 --> 00:39:14,050
junk.

1001
00:39:15,870 --> 00:39:16,930
And, you know, I guess I'm not mincing

1002
00:39:16,930 --> 00:39:17,710
words today, right?

1003
00:39:18,310 --> 00:39:19,310
What do you really think?

1004
00:39:19,530 --> 00:39:19,710
Yeah.

1005
00:39:21,490 --> 00:39:24,510
So, you know, that's, that's all that is,

1006
00:39:24,770 --> 00:39:27,610
gets into the thought process and goes into

1007
00:39:27,610 --> 00:39:29,370
the stew that makes up a, you know,

1008
00:39:29,410 --> 00:39:30,590
a portfolio allocation.

1009
00:39:32,210 --> 00:39:32,470
All right.

1010
00:39:32,590 --> 00:39:33,150
Well said.

1011
00:39:33,350 --> 00:39:36,310
So, you know, aspects of this are relevant

1012
00:39:36,310 --> 00:39:39,150
and some of it is you kind of

1013
00:39:39,150 --> 00:39:41,410
have a see how things evolve, see how

1014
00:39:41,410 --> 00:39:44,970
things develop to make a play for how

1015
00:39:44,970 --> 00:39:47,690
to benefit from some of these thoughts in

1016
00:39:47,690 --> 00:39:49,050
your portfolio structuring.

1017
00:39:49,170 --> 00:39:50,730
But one thing you can't do is say,

1018
00:39:50,830 --> 00:39:52,570
I'm 100% confident in any of this,

1019
00:39:52,650 --> 00:39:54,170
because then you're going to get yourself in

1020
00:39:54,170 --> 00:39:55,110
a lot of trouble, right?

1021
00:39:55,110 --> 00:39:56,330
You're going to be taking way too much

1022
00:39:56,330 --> 00:39:57,370
risk one way or another.

1023
00:39:58,170 --> 00:40:00,290
You probability weight them in your mind, at

1024
00:40:00,290 --> 00:40:00,790
least, right?

1025
00:40:01,030 --> 00:40:02,550
And you think about how they work together

1026
00:40:02,550 --> 00:40:04,130
and how they, and how they balance each

1027
00:40:04,130 --> 00:40:04,350
other.

1028
00:40:04,350 --> 00:40:06,930
Um, we have very few people that are

1029
00:40:06,930 --> 00:40:09,330
in, in our, from our clientele that are

1030
00:40:09,330 --> 00:40:10,170
a hundred percent stock.

1031
00:40:10,550 --> 00:40:12,310
And if they are, they have a very,

1032
00:40:12,450 --> 00:40:15,250
they have a diversified, you know, allocation, um,

1033
00:40:15,470 --> 00:40:16,230
in their portfolio.

1034
00:40:17,050 --> 00:40:19,310
So, you know, I, I think, um, you

1035
00:40:19,310 --> 00:40:20,950
gotta have humility when we do this, we

1036
00:40:20,950 --> 00:40:23,130
laugh, we disagree, and that's all fun.

1037
00:40:23,130 --> 00:40:24,570
And it, and a lot of this does,

1038
00:40:24,670 --> 00:40:26,310
you know, end up in the thought process

1039
00:40:26,310 --> 00:40:26,910
of the portfolio.

1040
00:40:27,590 --> 00:40:29,270
Um, but it has to be done with

1041
00:40:29,270 --> 00:40:30,390
hard data and it has to be done

1042
00:40:30,390 --> 00:40:31,930
with a, with a, with a huge amount

1043
00:40:31,930 --> 00:40:32,390
of humility.

1044
00:40:33,810 --> 00:40:37,250
And so as you approach next year and

1045
00:40:37,250 --> 00:40:39,310
think about some of these issues, if you're

1046
00:40:39,310 --> 00:40:41,210
not giving it the kind of thought that

1047
00:40:41,210 --> 00:40:44,070
our team obviously does, and you think you

1048
00:40:44,070 --> 00:40:47,230
could benefit from some assistance in how to

1049
00:40:47,230 --> 00:40:50,910
position your portfolio, uh, what's working, what's not,

1050
00:40:51,370 --> 00:40:53,230
don't hesitate to reach out to us.

1051
00:40:53,370 --> 00:40:55,230
This is the perfect time of year for

1052
00:40:55,230 --> 00:40:58,790
scheduling a fresh look at the start of

1053
00:40:58,790 --> 00:41:00,510
the year and evaluate.

1054
00:41:00,510 --> 00:41:02,530
We work on a two meeting process.

1055
00:41:02,650 --> 00:41:03,790
It is all complimentary.

1056
00:41:04,470 --> 00:41:07,270
We review things fully and in the context

1057
00:41:07,270 --> 00:41:09,590
of a financial plan, and we're here to

1058
00:41:09,590 --> 00:41:10,670
help if you need the help.

1059
00:41:10,790 --> 00:41:13,390
So with that, thanks everybody for the fun

1060
00:41:13,390 --> 00:41:16,470
discussion until next time, keep striving for something

1061
00:41:16,470 --> 00:41:16,850
more.

1062
00:41:18,010 --> 00:41:19,910
Thank you for listening to something more with

1063
00:41:19,910 --> 00:41:20,630
Chris Boyd.

1064
00:41:20,950 --> 00:41:23,070
Call us for help, whether it's for financial

1065
00:41:23,070 --> 00:41:27,010
planning or portfolio management, insurance concerns, or those

1066
00:41:27,010 --> 00:41:29,050
quality of life issues that make the money

1067
00:41:29,050 --> 00:41:30,150
matters matter.

1068
00:41:30,510 --> 00:41:32,650
Whatever's on your mind, visit us at something

1069
00:41:32,650 --> 00:41:35,650
more with chrisboyd.com or call us toll

1070
00:41:35,650 --> 00:41:41,510
free at 866-771-8901, or send us

1071
00:41:41,510 --> 00:41:46,450
your questions to amr-info at wealthenhancement.com.

1072
00:41:46,530 --> 00:41:48,570
You're listening to something more with Chris Boyd

1073
00:41:48,570 --> 00:41:51,190
financial talk show wealth enhancement advisory services and

1074
00:41:51,190 --> 00:41:53,330
Jay Christopher Boyd provide investment advice on an

1075
00:41:53,330 --> 00:41:54,650
individual basis to clients.

1076
00:41:54,650 --> 00:41:56,790
Only proper advice depends on a complete analysis

1077
00:41:56,790 --> 00:41:58,250
of all facts and circumstances.

1078
00:41:58,250 --> 00:42:00,330
The information given on this program is general

1079
00:42:00,330 --> 00:42:02,350
financial comments and cannot be relied upon as

1080
00:42:02,350 --> 00:42:03,950
pertaining to your specific situation.

1081
00:42:04,170 --> 00:42:06,130
Wealth Enhancement Group cannot guarantee that using the

1082
00:42:06,130 --> 00:42:08,110
information from this show will generate profits or

1083
00:42:08,110 --> 00:42:09,230
ensure freedom from loss.

1084
00:42:09,430 --> 00:42:11,590
Listeners should consult their own financial advisors or

1085
00:42:11,590 --> 00:42:13,690
conduct their own due diligence before making any

1086
00:42:13,690 --> 00:42:14,470
financial decisions.