Lead-Lag Live
Welcome to the Lead-Lag Live podcast, where we bring you live unscripted conversations with thought leaders in the world of finance, economics, and investing. Hosted through X Spaces by Michael A. Gayed, CFA, Publisher of The Lead-Lag Report (@leadlagreport), each episode dives deep into the minds of industry experts to discuss current market trends, investment strategies, and the global economic landscape.
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Lead-Lag Live
Mike Larson on Offensive Investment Styles, Global Diversification, and 2025 Market Trends
Join me, Michael Gayed, and my esteemed guest Mike Larson, Editor-in-Chief at Money Show, as we unravel the bold investment strategies that have reshaped the financial landscape in 2023. Discover how offensive investing styles have not only outperformed but also paved the way for potential recovery in the bond market, particularly high-quality treasuries. We delve into the vibrant Money Show events in Las Vegas, a hotbed of dynamic investment insights, featuring luminaries like Ralph Acampora and Dan Ives who bring a wealth of knowledge from technical analysis to energy and economic strategies.
Looking ahead to 2025, we examine the transition from tech-heavy portfolios to a broader sector approach, with energy, industrials, materials, and financials taking center stage. Listen as we dissect the potential impacts of Trump administration policies on U.S.-based companies and the shift towards increased credit growth opportunities. Our annual top picks report, boasting insights from over 44 expert contributors, reveals a diverse array of conservative and aggressive investment recommendations, offering invaluable guidance for navigating the evolving market.
The conversation then broadens to a global perspective, highlighting the resurgence of value investing, the potential of small-cap stocks, and the critical importance of international diversification. We explore the energy sector with insights from Robert Bryce and consider the implications of deregulation on financial and real estate markets. As we conclude, I extend an invitation to the upcoming Money Show in Las Vegas, promising an enriching experience filled with networking, learning, and engaging discussions. This episode is a treasure trove of investment wisdom, tailored for both seasoned investors and those just starting their financial journey.
The content in this program is for informational purposes only. You should not construe any information or other material as investment, financial, tax, or other advice. The views expressed by the participants are solely their own. A participant may have taken or recommended any investment position discussed, but may close such position or alter its recommendation at any time without notice. Nothing contained in this program constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in any jurisdiction. Please consult your own investment or financial advisor for advice related to all investment decisions.
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Uh, what's the what's the thinking for this year so far?
Speaker 2:Yeah, sure, I mean, you and I have talked before, you know, this sort of be bold thesis that I've had going back to the beginning of 23 and it's just summed up in my. You know, that was sort of my, my way of trying to kind of sum it up in a brief uh package, in a brief way, by calling it be bold, meaning your offensive style of investing, your offensive sectors, those types of things have outperformed for two years now, I think. Probably and gosh, hopefully somebody's taking a recording of this. These words don't come back to haunt me, but maybe the worst is over for bonds, I think you know, and particularly higher quality in treasuries, because you've already seen a big move in terms of spread tightening and a big move for junk and high yield.
Speaker 1:My name is Michael Guyatt, publisher of the Lead Lag Report. Joining me here is Mr Mike Larson, who I saw at the Money Show, and I'm going to see the Money Show again in February in Vegas and I'm going to be actually apparently in Vegas both in February and March as I go to the Exchange Conference. So it's going to be a very Vegas-focused first quarter. Mike. For those who are not familiar with your background, as always, introduce yourself. Who, the first quarter Mike? For those who are not familiar with, your background.
Speaker 2:As always, introduce yourself. Who are you? What have you done throughout your career? What do you do now? Yeah, appreciate you having me on to talk again about markets.
Speaker 2:I'm Mike Larson. I'm Editor-in-Chief at Money Show. I've been here about two and a half years but I've been presenting at Money Shows with my former employer, weiss Ratings, weiss Research, going all the way back to 2005. So my job entails emceeing live events, introducing people, hosting discussions, getting to have people on podcast recordings done on site. I had some great conversation with Mike as part of that. My background again I've been sort of in the financial analysis journalism newsletter world since all the way back in 2002, give or take and just really excited to be doing what I'm doing on Money Show. To give or take and just really excited to be doing what I'm doing at Money Show, excited to have the chance to meet investors and traders in person, talk about markets on site in Vegas and the other events that we host In between, just getting out there and discussing markets and formats like this. So excited for what's coming up. It's clearly an interesting market environment. As you said, we're going up against some Davos speakers, so we'll see how we do.
Speaker 1:Yeah, and there's a lot of big shifts happening with new administration which we can maybe touch on. I was impressed by the types of guests that you had and speakers. The last one, Peter Schiff, was there. I had a selfie that went a little bit viral with him. I had done a spaces with him the day before, and you had a couple of other big names, the one that's coming up. You know I have not talked about this or just riffing here for the first time, so talk to me about who's going to be in Vegas in February.
Speaker 2:Yeah, we've got a real great lineup for this. I mean for people who are watching this, if you don't know, money Show. We do two different kinds of events. One is like the show in Vegas investment ideas, things to talk about. Then we also have a keynote stage workshop rooms, money masters courses, kind of the whole nine yards, and these are big events. They're kind of aimed at a general investor trader audience.
Speaker 2:This time around on the keynote stage we've got names you're going to recognize. We've got Ralph Acampora, obviously a technical analysis guy that's been around forever. He's going to be speaking there. We have Dan Ives and Mark Mahaney talking about technology from Evercore and Wedbush. I'll give you some ideas on what's going on in that sector. On the energy front, we've got a few people like Dan Sauer. We've got Tim Davis. We've got NSL Haji he's a first time speaker out there kind of talking about what's going on in the oil, natural gas geopolitical front. Obviously, with the Trump administration it's kind of a hundred degree difference from what was going on in the Biden administration when it comes to policy. So those are a few of the big names.
Speaker 2:And we've got people like Matt Helgen speaking about crypto. We've got Christina Hooper from Invesco talking about economics, steve Sosnick and Ed Yardeni kind of talking about big picture strategy. So really it just sort of depends what you're looking for. You're going to get big picture market overviews kind of 36,000 feet in economic views from some of these people. You're going to get trading ideas and strategies from others that are specialists there and we do really try and cover a little bit of everything. We talk stocks, we talk fixed income, cryptocurrencies, commodities again, and alternative investments more so in the last few events as well. So again, just kind of depending what you're invested in, what you're interested in, you're going to find people who can talk about it and you're going to get a chance to get up close and personal with them.
Speaker 2:I mean, it's funny. You mentioned the selfie thing. Some of these conferences that I've been to and other events, people are kind of held behind a velvet rope. You're not going to get a chance to interact with the speakers. They just go up on stage and they kind of get whisked off to do their thing somewhere. That's not how we try and do things at Money Show. You're going to have book signings with some of them, meet and greets, take selfies. They really do participate in these events in a number of different ways, so excited to be there in Vegas and I mean, let's be honest, it's Vegas, so it's always a lot of fun- I mean, I'm there for you, but I'm also there for Vegas.
Speaker 1:It's funny because when people think about that, are not involved in investing, they tend to think it's Vegas. And maybe you can argue that, given some of the vehicles like Zero, dte and all these leveraged products, that the market is becoming increasingly like Vegas. Let's explore that for a little bit. Any thoughts on sort of? Has the market become just sort of a gambling domain at this point?
Speaker 2:You know it's funny. I mean you see how some of these apps are set up and some of these strategies are set up. I mean, let's be honest, I mean part of it is to attract that active trader. That sort of gamification. I mean it's happening throughout the industry and that is something that's definitely going on. And you look at options trading volume last year another all-time record. I mean it's not just, and I would say, a lot of that's coming from these shorter-term options. People are just buying an option and selling it in an hour or two in the same day if they want.
Speaker 2:And I always approach zero DTE or really any financial product and say, well, there's benefits, drawbacks, pitfalls, benefits and strategies you can use them for. And it's all about education, right? Almost any kind of investment, almost any kind of vehicle, stocks, etfs, leveraged, unleveraged there's ways to use them properly and there's ways to misuse them. It's just like any other tool. So our goal and my goal at Money Show is really to try and bring together speakers that can sit you down and say, hey, this is how this product works. These are the benefits, these are the drawbacks, these are some of the strategies that, again, if you want to be sort of a short term in and out trader, here's how you use them. If you're somebody who's got a longer term time frame swing trading or long term investment, here's how you can use some of them. Just give people that background, give people that expertise, that knowledge and then hopefully send them on their way a little bit smarter than when they came in the room beforehand.
Speaker 1:Well, what's the experience level in general of people that attend the money show? Are we talking like amateur professional traders? Kind of runs the gamut.
Speaker 2:Yeah, you know, honestly, at the big events like this, these are designed to kind of appeal to the mass trader and investor audience. So you know we get all types. I've had it's funny, I've had conversations back when I used to be a presenter at Money Show. Sit down to somebody. They're kind of just dressed in regular clothes. You know you wouldn't know anything. They tell you they just sold their business for a100 million and they're looking to do something with the money that is not managed by an advisor. And then you have people that you know of all walks of life and again, I think it's interesting that it's not necessarily people that you see that you bump into in the whole cocktail receptions. Whatever your first impression may not actually be the accurate impression. So in any event you'll meet all types, but it is generally a retail investor crowd.
Speaker 2:We aren't an advisor-focused conference like some that are out there. We are focused at the individual investor. We do get some institutional types there as well. We invite speakers, again, that are from a bunch of different types of companies. You have everything from newsletter publishers, independent publishers on up to Christina Hooper from Invesco Obviously that's a multi-billion dollar investment ETF fund or firm. So we've got a little bit of everything there, depending on how it comes to speakers and attendees. I would say we also do have the symposium level events. This is not one of those. We do have one in Vegas that's coming up in July that are aimed at that ultra high net worth investor and trader. So it's kind of a more intimate experience less people there, no big conference floor, but you have sort of a higher tier of attendee, you have a higher tier of speaker and they're just designed to be kind of in some markets that aren't big enough to support a full-scale investor or money show traders expo event like we're doing this next month.
Speaker 1:Let's get into Outlook for this year, since you mentioned. You talked to a lot of advisors, individuals, and obviously have your own analysis and research. It was a pretty strong year. Obviously the last two years yes, last year in particular was a strong year. What's the thinking for this year so far?
Speaker 2:Yeah, sure, I mean you and I have talked before. You know this sort of be bold thesis that I've talked before. You know this sort of be bold thesis that I've had going back to the beginning of 23. And it's just summed up in my you know, that was sort of my way of trying to kind of sum it up in a brief package, in a brief way, by calling it be bold, meaning your offensive style of investing, your offensive sectors, those types of things have outperformed for two years now and obviously the market overall just had its best back-to-back years with the S&P since 97, 98. If you look at that in one of two ways, you can say holy cow, that's great, everything was wonderful. Look how great the late 1990s were for markets and investors, and they were until they weren't right. I mean, we all know what happened after that. You got the dot-com bust and a couple of incredibly lousy years for investors and then a long period of stagnation for that era's stocks that had outperformed.
Speaker 2:In this environment I don't think and many of our speakers aren't looking for an outrageous ramp to the upside. I think it would be crazy to expect a third year of 20% plus returns for the S&P. What I'm looking at, what my work is showing, is that we're probably going to see some broadening out here. I think what happened last July was pretty significant and that's when you saw a violent allocation out of some of the MAG-7 only tech, only type names and into things like small caps and other lagging sectors. We reversed some of that after July, but we're starting to see that character again early here in 2025. I mean, you look at the sectors that were advancing and this is as of two days ago when I pulled the data energy the XLE was actually your best performing ETF year to date. That's kind of funny to talk about year to date numbers and you're not even all the way to January, but it's sort of instructive that you had energy, that you had industrials, you have materials and some of these other and financials, especially outperforming tech, and I think that that's going to kind of be a trend that we see this year.
Speaker 2:If you look at, you know, love him or hate him. If you look at what Trump's policies are about and kind of what he's likely to do in the administration, it's going to be things that are more favorable to US based companies versus overseas. Versus overseas. It's going to be favorable to industries and sectors like financials less regulation, more credit growth or at least credit growth opportunities. I think you're going to see nearshoring, onshoring, whatever you want to call it, some of that stuff going on in the manufacturing sector and that, ultimately, is going to benefit some of these left behind groups, in my opinion.
Speaker 2:I don't think tech melts down or anything. I don't think tech's going to kill you in like a dot-com bus type environment, but I do think it'll be interesting if I had to sort of make a side bet on the markets. I wouldn't be surprised if things like the IWM outperformed the XLK in the first six months of this year or that financials continue to outperform technology as well. Some of those things we haven't seen for a while are probably going to be the kinds of things that I'm looking for as we roll here under 25.
Speaker 1:I know you do some work and publish kind of top picks and ideas. Let's go through some of that because I think that's where most people want to get or watch this or get some interesting ideas from you.
Speaker 2:Yeah, sure, I appreciate that Every year for Money Show. Prior to me being here, I've been on board for about two and a half years, so there was another gentleman who was in charge of our annual top picks project before that, and that's what I'm doing now. Essentially, we go out every year towards the tail end of the year and say, look, go to our experts a lot of newsletter publishers, people like that that are willing to talk stock picks versus just sort of broad market overviews and say, look, if you give me one conservative and one more aggressive name, a little more dividend oriented versus growth oriented name, that you think you'd want to recommend for the next 12 months, and we publish it, we get all the details, we get the write-ups. I go out and chase these people down and they give me some great inputs. We put charts in there, we put graphics, we put details and write-ups on all these stocks. The result is the top picks report. So for 2025, we had just over 78 picks from just over 44 different contributors, and these people are specialists in a lot of different areas. Some people specialize in resources and commodities, some people specialize in small caps, global stocks, even cryptocurrencies. You get a wide range of experts in this report that give you their best ideas. And it's not an actively managed portfolio, right? So we'll publish this report at the beginning of January each year.
Speaker 2:This one went out on Monday, january 6th and you've got those names. It's designed as sort of a starting point for your research. See what stocks they're picking, read the write-ups, see if you want to be a more conservative person, focus on the conservative investment. If you want to take some more risk and you've got the money to play money to kind of do that, then you can focus on the more aggressive picks that are in there. The idea is put these in this again hypothetical, not portfolio, but just this report and then see how they perform and periodically update.
Speaker 2:You know I usually do a mid-year update and an end-year update on what worked, what didn't work. You know what kind of groups within that report did well and what didn't, and just you know. It's a great starting point for your research and we got kind of some interesting ideas. It's not just your typical stuff. I mean, people aren't just picking hey, buy Microsoft, buy Meta, you know whatever. There's a couple of names like that, but you can find those kinds of names anywhere. The idea is to try and find some undiscovered, some different ideas that'll give you you know again some spice for your portfolio and some things you might not be looking at otherwise.
Speaker 1:Yeah, I mean I like the breadth of contributions from that perspective. I think that's different perspectives in general. You mentioned small caps and practice for that. You know I've been obsessed with small caps for a while. Right, the idea that they haven't really participated as much as the broader S&P 500, obviously I'm with you on the broadening out. What does history suggest? As far as that broadening out, though, meaning from what I've seen, it seems like small caps actually tend to outperform more often than not in bear markets Certainly can lead in bull market.
Speaker 2:It's going to be interesting. I mean, again, this thing can go one of two ways. Obviously it's been sort of a waiting for Godot scenario. If you've been a value investor, if you've been a small cap focused investor for a number of years, right. But and you know we need to see that happen we need to see this be more of a thesis and more of a show me kind of scenario, especially as we start in this new year, when you can find developments, fundamental developments, political developments, washington developments and so on, that argue for that group, those types of market caps, stocks and sectors to outperform. They should, given kind of the backdrop. If they don't, that to me would be a worrisome sign. So I think it's going to be instructive to see what happens here as we get further into the first quarter, you know, the first couple of weeks of January. Does that tend to continue to happen as we get out of the month of January and move into February and March and so on? You know, like I said earlier, I don't think that things like tech kill you. I don't personally see a big bearish environment unfolding, but I would be concerned if we don't get that broader participation as we get further into the year. I would say one thing and we've had conversations before in my career I mean, I've been doing this again since 2001,. 2002 at Weiss and then since then with MoneyShop I don't have a problem saying if I see a lot of stupid stuff going on or risky stuff going on, I don't have a problem switching sides and calling it out and saying we've got a big issue here. I did it back at Weiss in the early 2000s, talking about the housing and mortgage market, and people were talking about us well-contained. I said that was bunk, this is going to be an absolute disaster. And that's what happened. Right More recently, kind of back in 2021, I was worried by a lot of just the silliness going on with all these SPACs coming out of the gate, all these money losing IPOs.
Speaker 2:It was sort of like an echocom bust or boom or whatever you want to call it, and I had no problem saying it. And you know, some of those companies, those SPACs and some of these money losing tech companies lost 50, 60, 70% of their values. I don't see that yet. I mean one of the big things I'm looking for to see if it's gone too far and we're facing troubles is credit exuberance, extreme risk taking, ipos coming out one after the other that are flooding the equity markets with shares, until and unless that happens, I'm not particularly worried about the big picture threats, but it's something that's on my radar. It's something I've got to be watching as we go through the year.
Speaker 2:I think even some of our speakers you've spoken to Edgar Denny, amongst others, who have talked about the melt-up scenario, how that's actually kind of a risk. In the short term it's great, yay, the markets are going to the moon and everybody's making money. But if you get that melt-up scenario ultimately ends to, you know, on the flip side we see the meltdown. So if we get more steady, broadening gains, that's great. If we get into that melt-up scenario, then I'd be more worried.
Speaker 1:When does international start to get interesting? That's been a hard area, although I did see some stat that if you took out NVIDIA's performance last year, the S&P pretty much had the same results as Europe.
Speaker 2:I don't know how accurate that is but any thoughts on when international diversification is going to matter again? Yeah, it's great and I will just throw I mentioned earlier and there is a reasonable segue here that report I talked about. If you go to toppicks2025.moneyshowcom, that's where you can get the reports. And I bring it up because of your question about international investing. A few of the picks that were coming in, as I saw what people were sending me to put together for the report, were international names. Now, a couple of them are just because they always focus on international. That's their niche.
Speaker 2:But even some of the more general type people were recommending a few foreign companies, companies with exposure in Asia and other emerging markets, and I was kind of like, are you sure that's where you want to go? I mean, hey, it's your recommendation, I get it, but people are going to read this and maybe scratch their heads a little bit. And I think that it falls into that same broadening out category. I mean, if it's not a US-centric, tech-dominated kind of market, what's going to work? Where is money going to rotate? And I think that there's a case to be made specifically for kind of Asian focused, emerging market focused type companies. Yeah, I wouldn't go hog wild, you know allocating out of the US and into those markets.
Speaker 2:But I do think if you see a browning out trend number one and you see number two, maybe the Trump dollar trade that kind of really kicked off when the polls started swinging his way in October. That obviously continued after the election in November you have a big run in the dollar. If you want to say maybe that's over, maybe that's sort of the Trump tariff trade priced in and the dollar even beneficial, particularly for emerging markets, not to just have the dollar ramp in your face every day like it did late last year and like it did even more so in 2022. So I think that it is an interesting segment of the market If you argue that China is trying to stimulate its way out of problems, at least somewhat, if you say the dollar is going to stabilize and some of this tariff stuff turns out to be more bluster than bite.
Speaker 2:These stocks are cheap. They're cheap for reasons, but maybe they're cheap with potential catalysts. So I think there is a case to be made for adding more exposure to emerging markets or foreign markets as part of this play into. I made money on what worked before. Now I want to make money on what didn't.
Speaker 1:Speaking of things that didn't make money, we should talk about bonds, which are not exactly exciting, and I can't tell you how many people I see that say they will never touch bonds ever again. They'd rather just do cover cold strategies which have been all the rage in the equity landscape as of the last several years here Are bonds ever going to be a viable asset class again?
Speaker 2:You know it's so funny to talk about the death of 60-40. I mean, obviously, 60-40 didn't do you any favors in 2022. And the 40 part of your portfolio, specifically of your distant treasuries, versus higher risk bonds, junk bonds and so on. It's been, you know, it's been ugly, it has been. I think it's interesting, and I think's part of this. Maybe the dollar's topped out.
Speaker 2:I think you could also make a case that, look, we've seen the inflation is going to be sticky because of things like tariffs, because the Fed's not going to be able to cut further, because we're not getting to 2% inflation, and so on. Rates had to adjust higher, and part of that's also what Trump's policies will do, and part of that's also what Trump's policies will do. You could argue, though, that most of that move also may have already taken place. You know, the 10-year seems to kind of try to define a home base here four and a half, four and three quarters, maybe 5% on the upper end. If that's the case, if interest rates just stabilize here, you're getting a decent yield. Not fantastic, of course, but decent yield versus the ZERP, nerp, lerp type days, but decent yield versus the ZERP, nerp, lerp type days Plus.
Speaker 2:You may have already seen the downside price moves that you would expect because of some of the tariff policy, because of the growthier dent or tilt to the US economy that less regulation and so on theoretically should entail. Maybe you've already seen that. So I think, probably and gosh, hopefully somebody's taken a recording of this, these words don't come back to haunt me but maybe the worst is over for bonds, I think, and particularly higher quality in treasuries, because you've already seen a big move in terms of spread tightening and a big move for junk and high yield. So I think maybe you might want to kind of go up the quality ladder a little bit there and park more money and sort of the lower risk stuff that I think again, your inflation risk is lower, your policy risk might have been priced in. I think it could be a decent, if not spectacular, year for here or year for bond investors if we just kind of find a home base in this four and a half to five percent range.
Speaker 1:Yeah, it'd be interesting to see if it's a decent year for duration uh alongside credit spreads, because I keep going back to, I think people conflate the two. They think the bond bear market, uh, is based on bonds. It's really based on the duration side of bonds, whereas credit spreads like you look at junk debt they're at, you know, pretty much near all-time highs, if not all all-time highs, from a total return perspective. You mentioned energy earlier and I think we should touch on oil and some thoughts on how Trump's policies could impact the price of oil. I think he had this line in a recent speech along the lines of we're going to unlock the liquid gold beneath our feet, which is basically oil. Let's talk about that. Any thoughts on how the investment landscape looks as it relates to commodities and oil in general?
Speaker 2:Yeah, it's interesting. The podcast I did for our show this week Was with Robert Bryce. He's a longtime energy sector journalist, author, podcaster, whatever, a lot of things under his belt and he and I had a conversation Because ahead of that interview I pulled the data on again energy stocks, what the underlying commodities were doing and so on on. And three or two days ago, crude oil, from the election, three or two days ago, the commodity itself, wti was up about 10%, natural gas was up 46%, the XLE was up about 5.5%, so outperforming the S&P by maybe a percentage point or two. And on a year-to-date basis, as I said earlier, the XLE was up about 8%. It's leading the sector EPS.
Speaker 2:Now you would argue, and I think the sort of mainstream thought is oh, we've got drill, baby drill. It's going to be a free-for-all. You know these guys wildcatters are going to go out there and pull every last drop of oil they can out of the ground and prices are going to take. But it hasn't happened yet. And this is at a time when we've already known the election results for a few months. We've already known Trump's proclivities when it comes to energy regulation. So why is that? Some of it's weather, I mean, let's be honest, obviously here in Florida, here in Southwest Florida, it's supposed to be 35 on Saturday morning when I go outside to walk my dog, not really thrilled about that. So part of it's just weather and the related demand for natural gas, heating and so on, but some of it is that the US is already producing the most oil ever. We're already exporting LNG to a lot of markets around the world and you know, I think the energy sector in particular one of Robert's points was that we talked about was that these guys got absolutely crushed in the mid-2010s as part of the shale boom and bust.
Speaker 2:So many companies went bankrupt, so many individuals went bankrupt. It was a total disaster. And then again there was a second round of massive problems in 2020 when oil prices went negative during the pandemic. So you could argue, and I think, that there's more capital discipline, there's more drilling discipline, even in a lower regulatory environment and where the price of oil is whatever level 75, 80, maybe on the upside, 85.
Speaker 2:It's not going to be this free for all environment. These guys got burned not just once, but twice, so they're going to be shyer. There's more capital discipline, there's more. Hey, let's not just put every dollar into the ground. Let's also pay more back to shareholders and dividends and buybacks and so on. So I think you know, and again, if the price of oil keeps going up for long term, eventually that discipline is going to fall away. Right, I mean, if you get $100, $110, $120, $130 oil, again people are going to be trying to produce all they can. But in the near and intermediate term, even under this drill, baby drill regime, there's a case to be made that we're not going to see this collapse in price because of Trump. So it'll be interesting to see how that shakes out. Certainly we haven't seen it yet. If the weather warms up again, then we kind of want to see what happens with commodities and with the stocks that are tied into it.
Speaker 1:But so far so good if you're an energy investor. One of the major themes, I think, under the Trump presidency is deregulation. That's been thrown out there as a word. I saw something along the lines of for every new regulation that gets passed, trump wants 10 others revoked. Let's talk about that. I think deregulation is. It has a lot of interesting implications on efficiency, profit margins, different industries, different winners, different losers, different market caps as well.
Speaker 2:Yeah, I mean, you know, again, there's a philosophical side to it, there's a political side to it and there's a pure economics and kind of market side to this whole push. And I think if we just focus on the tail end of that you know, I use the words all else being equal, I use them and it's sort of I mean, things are never exactly equal, but I think in a regime that's going to, particularly in something like the financial sector, right, it's going to have less regulation, less sort of you know all that kind of stuff that's been an issue for a sector like financials, both traditional banking and sort of off the books, you know, shadow banking sector. If that goes away, then you're going to see more aggressive lending behavior, going to see more aggressive investing behavior, going to see more capital creation and more risk taking. Now, again, it's all about you know degrees there, right. If it gets out of control, then that's when my antenna go up and say, oh, we don't want whatever this cycle's equivalent of the housing boom and bust or mortgage boom and bust is, or the CRE boom and bust and so on. That eventually becomes a problem if credit growth gets too aggressive, but in a less regulation environment, less supervision, not supervision, but sort of easier supervision.
Speaker 2:Environment, that's going to be something that helps financials. So I don't think it's any surprise that that sector on the last six months has performed very, very well. So that's kind of a way that it works into the real world and into the economy. But even on other sectors you know whether it is sort of environmental related regulations being eased on a mining or oil industry participants, or you know whether it's it's labor related restrictions and things for manufacturers and so on if all of that is rolled back to some degree and I will sort of caveat this with there's always a lot of bluster. I mean, we know that Trump will say things that get press. Not everything actually ends up being implemented, but ultimately that philosophy and that sort of approach seems to be the law of the land, or at least it's going to be for the next couple of years, four years. So that does tend to help corporate America and that does tend to help the markets, particularly US-focused companies, which kind of goes back to that whole small cap thesis.
Speaker 1:Yeah, I have to agree.
Speaker 2:I think that's going to be an interesting no-transcript, and you happen to be lucky enough to have bought it or refinanced back when rates were at three and a half or even three, in some cases as low as two and a half percent. What are you going to do? You're going to do everything you can to stay in that home and not give up that mortgage rate, not trade up to a house that costs $200,000 more and your payment's going to jump because your rate is now going to be 6.5%, 7% instead of 2.5% or 3%. So you've seen, on the existing side of the fence less inventory, less turnover, less activity and so on there's always going to be people who have to sell their homes job loss, divorce, family's getting bigger, whatever. But if you're a sort of discretionary home seller and buyer in the existing home market, you've kind of been willing to just say, hey, look, this is good enough, I'm going to do something, I'm going to improve my existing home, I don't want to move and give up that rate. So you haven't seen volumes on that side. That's part of it. But the new home builders because anybody who's in the market to buy if they need a new a home, they need to buy something. You know you're going to get more inventory, you're going to get some incentives to offset higher rates on the new housing side. So you've actually seen some of the home builders do fairly well even in a higher rate environment.
Speaker 2:So you know a couple of them have highlighted that in the report. There was one of them Dream Finders Homes was one that a contributor picked for this coming year. So there's a few of those. I wouldn't say it's a big area of focus, simply because real estate isn't hot and I don't think most people think it's going to be hot on the residential side. I will say on the commercial side. It's interesting because there have again same thing there were a few REIT picks in that report. There's a few REIT and commercial focused speakers in Vegas in some of the events this year and I think we've seen that battleship begin to turn. If you look at things like the Fed's own data, the sluice data on lending surveys, they go out, they poll the bankers and they say what's happening with your commercial real estate lending? Are you getting tighter or looser with credit? Are you seeing more or less demand? And they do that obviously for every category of loan out there CNI and consumer, and so on.
Speaker 2:But it's interesting, even though the mainstream media still talk a lot about the commercial real estate disaster and nobody wants to go to the office and nobody's buying anything at the malls and blah, blah, blah, the sector, the bankers that are lending money to the sector, the developers to the building owners, have actually gotten looser with standards for the last couple of quarters, or at least less of them, are tightening. The net tightening percentage has gone down for a few quarters. Now you don't hear about banks like Silicon Valley, you know, going broke or needing to be taken over by the FDIC or merged with healthier institutions, like you did back in 23. And I think that's because we've kind of gotten past that inflection point where things are as bad as they're going to get. I don't think that that means you're going to see office buildings going up in every corner anytime soon.
Speaker 2:I don't think it means that you're going to make a ton of money investing in that sector or in REITs. But if you're a patient investor, you're looking for again going back to sort of what hasn't worked, what might in the past, what might work in the future. You know, I'd take the tires on some of the REITs out there and maybe start to add exposure to those that you know have a decent asset base, a decent yield and that aren't over levered, because I think the surviving players, if they made it through the stuff that happened in that sector in 22, 23, and even early 24, you know the outlook going forward. It's not going to be fantastic. You're not going to double or triple your money this year in my opinion, but you might be able to get some decent yield and get some decent returns just as that sector gradually recovers.
Speaker 1:What have we not hit on? I mean, we touched on a lot of different asset classes. We touched on the money show itself, maybe just so I have something else to look forward to when it comes to Vegas. We had the conference. Are there going to be some after parties? What's going on? That, and that's what I care about.
Speaker 2:Yeah, absolutely. I mean, look, you know, we're at the Paris Las Vegas, which you've. You've been there. Probably a lot of your listeners have been there. It's a great location to start. You're right in the middle of the strip. So, uh, you know, if you're, if you're done with a full day of conference, your brain, all the ideas you can have, guess what, you've got pretty much every casino, every show, every restaurant, everything you could want to do in Vegas, sort of at your fingertips. So there's plenty to do both in the Paris itself and in the surrounding area on the Strip.
Speaker 2:But as far as the show itself, yeah, we're doing a lot of stuff differently here. We're planning to have a money machine on site. You know the dollar bill is flying around. You flying around, you can kind of enter for your chance to win some time in there. We're going to be doing book signings and meet and greets with the speakers. So, like I said, it's not really. You know, you see some man or woman speak on stage and they never see them again. They just get whisked off to the airport. You know, that's not how we do things. You're going to get the chance to again shake their hands, take pictures with them, ask them questions up close and personal. We do have a cocktail reception at the end of each day, so you have the opportunity to kind of, you know, kick back, grab a drink, talk about markets, talk about strategies.
Speaker 2:These conferences, these big shows, tend to have anywhere, over the course of three days, from 1,000 to 1,500 people. So you know it's not a tiny environment. You're going to get the chance to talk to a lot of people. If that's your thing and you want to swap ideas and pick other people's brains, you're going to have the chance to do that during the cocktail receptions. I guess I'll throw it out too, because it is something we're doing for the first time there. We're actually going to have a poker night this time. So next door, at the Horseshoe on Tuesday evening, you'll have the chance. I mean, it is kind of call in and reserve your spots let's give me a chance to basically sit down at a card table, play poker against your fellow attendees. Some of the speakers are going to get involved and there's prizes for the winners of the tournament. So you know stuff like that that you can do, either with us or if you want to be off on your own at the end of the day, you got lots of options for that too.
Speaker 1:I am definitely looking For those that are listening, that want to attend. How do they do so? Is there any kind of a discount or code or something?
Speaker 2:Yeah, sure they can. I mean, the website for the event is lasvegasmoneyshowcom, so just the city moneyshowcom. We still have early bird pricing right now, so it is until the beginning of February. February 3rd is actually the deadline. You can still get a standard pass for $149, which gets you into pretty much all the keynotes, all the workshops, the exhibit hall, the cocktail receptions after things like that. It's a great way to just get a little bit of everything Again. That's the standard sort of basic price, $149. It goes up to $199 after February 3rd.
Speaker 2:But we know that some people want to kind of kick the tires. If you've never been to the Money Show, this particular event, or any of our events for that matter, there is a free exhibit hall pass you can register for at that site. It's not going to get you into keynotes, it's not going to get you into workshops, but it gets you into the exhibit hall and that's where you're going to have the sponsors. You're going to learn about trading technologies. There's live trading demos. We always do put some stage presentations in there, so we'll have a chance to hear from some of the sponsors, from some of the speakers. We'll do shorter versions of their presentations, give you sort of the basics of what it is they do and what their strategies are.
Speaker 2:You'll also have access to things like the Podcasters Corner. Obviously, we're excited you're going to be joining us. We're going to be having podcast interviews going on at the event so you can sit in and watch as podcasters myself and some of our guests who have podcasts of their own interview. The experts ask them for sort of an abbreviated view of what they're seeing in the markets, what people can do. So it's a great chance. It's free Register, you're all set. Just show up at the Paris and kick the tires a little bit.
Speaker 1:I will absolutely be there, I will be presenting as well and I'm looking forward to connecting with a lot of the great people there, mike, any final thoughts here? I think it was a good conversation Again, folks. I think it's a good group to get involved in, especially given a lot of changes happening here. But any kind of last words here?
Speaker 2:Yeah, I would just say you know again, I remain fairly or I guess I call myself bold-ish, you know on the markets. I think this is an environment where there's still opportunities. It's an environment where you're going to make money, in my opinion, in different parts of the market, different sectors and stocks, than you might have in the last year or two. If we don't see that rotation or if we see some over risk taking really start to get out of control, that kind of melt up scenario. That, to me, is the biggest risk out there and something I'll be watching for. But for now I kind of feel it's a steady as she goes market.
Speaker 2:I'd love to see as many of the people listening or watching this as possible in Vegas. It's going to be a great time, february 17th to 19th, and if that doesn't work for you, we do have other shows throughout the year in different cities. So just go to moneyshowcom and check it out. I mean, I've been being on this side of the fence now as host and come up say hi, shake my hand. If you like what I said, tell me Great thanks, you made a lot of money. And if you don't like what I said and you don't make a lot of money. I'll be hiding behind one of the booths.
Speaker 1:I may be with you in that booth. I feel good.
