00:00 Speaker A
Uncertainty front and center, Brad. I got, we got tariff uncertainty, we got trade uncertainty. I I do want to touch, Brad, on on these comments from President Trump, because he keeps going after Fed chief uh, Jay Powell. He went after him on social media. Our colleague, Jen, pointing out he he just went after him again this afternoon, Brad, very hard, uh, emphasizing his frustration with Powell, saying he’s not happy with him. He’s always too late, Trump said. It’s a kind of thing, Brad, listen, that that’s going to make a lot of headlines. But I’m just curious, as an investor, you’re watching this, you’re hearing this, you’re seeing these headlines, what do you make of it?
01:33 Brad
I mean, I kind of feel like investors are in the same boat that Powell’s in. Like, you know, he he’s got a challenging dual mandate that he’s dealing with. And what he’s saying is, we need to sit back and wait and see how this all plays out because we don’t have any certainty either. And so, I think investors need to be in that same position where we need to collect information. If you don’t have conviction or clarity, you don’t have to do anything. You know, be careful overreacting to the day-to-day motion that gets into it. I think inactivity is an activity in these markets. If you’re following a process and you’re well positioned from day one, then you shouldn’t be stressing now. And, you know, that’s what we think we do well, but hopefully that’s that’s the mindset of the Fed, too, is we’re well-positioned for what’s going on. We have a process and we’ll follow it. And Trump can say what he wants, but we’re going to do our job. And I think that’s the same truth for investors.
03:41 Speaker A
What happens for, uh, you know, for for businesses in this circumstance? They’re sitting there looking at all of this policy uncertainty. That’s got to be slowing their activity. You know, we hear about delays in terms of investment and uh and hiring as a function of that. How’s that affecting your views right now?
04:23 Brad
Yeah, I mean, it should be affecting our views on on global growth and inflationary pressures. I I think that’s that’s one of the risks that we see. Again, I’m not a expert on tariffs, but I can interpret how the market is interpreting it. And I think the way the market is interpreting the policies that are going on right now, specifically tariffs, is we’re transferring US politics onto global politics. Like, in the US we’ve decided there’s a right and a wrong, there’s a pick a side mentality. There’s not a democratic system that we meet in the middle that generates prosperity for all. And the market is saying, we’re worried about that being put on the global stage, that uh there’s a problem for global growth. There’s a implication for global inflation. There’s not a shared prosperity. There’s not global dependence. There’s not global community. And that isolationism is is a problem. So I think from an investment standpoint, what we need to do is look for those companies that have uh critical infrastructure, have pricing power that have um some way to uh make it through all the unknowns that exist in the market currently, that can come out of this three to five years later more powerful um in a better situation. I think that’s really difficult, which is why I’d say, don’t move unless you feel like you have high conviction or certainty. And that’s why I think we’re seeing valuations drop, that’s why we’re seeing people revise earnings because I think there’s a lot of unknowns that exist in this market right now. That’s not good.
07:12 Speaker A
Against that backdrop, though, Brad, um as an investor, where where do you see opportunity? Where are the areas of emphasis for you right now in your portfolio?
07:44 Brad
Yeah, correct. I think you can always find opportunities if you’re you’re looking at the volatility in the market. And we’ve picked out some spots that we think are really attractive. I think there’s some attractive areas inside the financial services where you don’t have to make a rate call. And those are those leading names that have entrenched positions and strong duopolies or monopolies like S&P Global on the ratings side. Um, you know, MSCI on the indices side. We think those are exceptionally strong businesses. Even Intercontinental Exchange and ICE that has this uh this wonderful derivatives business around energy. Guess what? I think we can all raise our hand of who thinks there’s going to be volatility in the energy markets over the next decade. That seems highly likely, especially if for in the global environment we’re in. I’d say even go back to, I know it’s a topic today, even go back to places in health care. Um look at a UNH. Um, you know, one of these things that does happen to these companies over time is uh uh acuity and treatment and hospitalization visits do change. And patient flows do change from company to the companies. But the good thing about insurers is they have a 12-month cycle. They can go and reprice all that business. So what looks bad today may not look as bad in the future. So go go visit some of these areas where we know there’s some entrenched position of these companies, and they’re getting beat up on stock-specific stuff. That may very well be an opportunity.