1 00:00:00,210 --> 00:00:03,870 It does seem like there's so much optimism stars are aligned, especially 2 00:00:03,870 --> 00:00:07,349 with Trump saying, you know what, the war is ending or, you know, we're done 3 00:00:07,349 --> 00:00:10,379 with this. We've had him say that about 49 times 4 00:00:10,679 --> 00:00:13,080 since the war started. Some say even like five times in the 5 00:00:13,080 --> 00:00:17,190 last nine weeks. Why should we care and do we care? 6 00:00:17,429 --> 00:00:22,259 Not really, because I think that, yes, we care if oil prices were to really go 7 00:00:22,260 --> 00:00:24,990 parabolic. But I think that the big story and 8 00:00:24,989 --> 00:00:28,919 that's very clear even from the opening remarks from your team, is that this is 9 00:00:28,920 --> 00:00:32,579 all about A.I., Right? That's what's really driving markets 10 00:00:32,820 --> 00:00:34,710 around the world. If you look at even relative 11 00:00:34,710 --> 00:00:41,130 performance, it's all about A.I.. So just stepping back a bit that 12 00:00:41,280 --> 00:00:45,030 something similar happened last year, which is that we were all obsessed with 13 00:00:45,030 --> 00:00:48,689 that it's on the news front and yet that it did go up. 14 00:00:49,229 --> 00:00:53,279 But people forgot about that story because it was superseded by the 15 00:00:54,329 --> 00:00:57,600 amount of CapEx which is happening as far as air is concerned. 16 00:00:57,840 --> 00:01:01,410 Something similar is going on this year, which is that, yes, oil prices have gone 17 00:01:01,409 --> 00:01:04,530 up. They have settled at a much higher 18 00:01:04,709 --> 00:01:08,760 plateau even after the decline over the last day or two. 19 00:01:09,150 --> 00:01:15,300 But the AI boom is just so much bigger that it's swamping all other effects. 20 00:01:15,299 --> 00:01:18,090 So it's very hard to look as to what happened with the tariffs, which were 21 00:01:18,090 --> 00:01:22,950 the negative, that the average tariff rate in America today 22 00:01:23,280 --> 00:01:27,480 is much higher than what it was. Even though people talk about Trump 23 00:01:27,480 --> 00:01:30,990 having walked back and stuff, which is true, but it was two and a half percent. 24 00:01:30,989 --> 00:01:36,000 The average tariff rate before Trump started the escalation on the trade war. 25 00:01:36,299 --> 00:01:40,530 And even after he pulled back, we settled at about 10% or so, very 26 00:01:40,530 --> 00:01:44,939 significantly higher from where we were. And yet the markets and the economy 27 00:01:45,120 --> 00:01:48,420 withstood all of that, mainly because of the EIA boom. 28 00:01:48,659 --> 00:01:52,170 Same thing is happening this year that oil prices are higher, but because this 29 00:01:52,530 --> 00:01:57,299 boom is so powerful, the companies just keep increasing CapEx. 30 00:01:57,329 --> 00:02:02,789 Everyone's convinced that the world is moving towards is the future that that's 31 00:02:02,790 --> 00:02:04,920 all that markets seem to care about. Interesting. 32 00:02:04,920 --> 00:02:10,169 You talk about parabolic and we have seen parabolic moves before like gold, 33 00:02:10,169 --> 00:02:14,189 silver and even oil to to some extent a moment in time, 34 00:02:15,240 --> 00:02:18,900 but never at this scale. The question really is how long can this 35 00:02:18,900 --> 00:02:20,969 last? I mean, the momentum, the rally can't go 36 00:02:20,969 --> 00:02:23,069 on forever. What are the catalysts you're looking 37 00:02:23,069 --> 00:02:25,709 at? So like I framed this in like three 38 00:02:25,710 --> 00:02:28,260 ways, really. One, that if you look at history, the 39 00:02:28,259 --> 00:02:33,719 last 300 years, every single technological innovation has been 40 00:02:33,719 --> 00:02:37,919 accompanied by a financial bubble, every single know from the railroads to the 41 00:02:37,919 --> 00:02:43,049 Internet, canals, whatever you look at it, it's all been accompanied always by 42 00:02:43,199 --> 00:02:45,839 a financial bubble. Because when you have a great 43 00:02:45,840 --> 00:02:48,780 technological breakthrough, it's fantastic for the world. 44 00:02:48,780 --> 00:02:52,650 That's what the world progress is on. But it leads to a huge amount of over 45 00:02:52,650 --> 00:02:56,010 excitement. Companies invest and then they 46 00:02:56,009 --> 00:03:00,060 overinvest. And so that's how it goes on. 47 00:03:00,060 --> 00:03:04,800 But there are two lessons to this. One, that very rarely do these 48 00:03:04,800 --> 00:03:08,340 companies, which are investing and are making money on their investment because 49 00:03:08,340 --> 00:03:11,789 they typically overinvest, it's the consumer that ends up making money. 50 00:03:12,030 --> 00:03:15,810 And the second most important thing is this and we learned this in 300 years of 51 00:03:15,810 --> 00:03:21,120 looking at bubbles, that the consistent factor which pricks the bubbles is that 52 00:03:21,120 --> 00:03:25,680 when you have higher interest rates until you have high interest rates or 53 00:03:25,680 --> 00:03:29,219 some sort of a liquidity event which tightens 54 00:03:30,629 --> 00:03:35,430 money in the market place, bubbles don't just burst under their own weight. 55 00:03:35,909 --> 00:03:39,090 So I think that's what that's the zone we're currently in, that interest rates 56 00:03:39,090 --> 00:03:41,400 are pretty stable across much of the world. 57 00:03:41,789 --> 00:03:44,729 I'm watching the ten year in the US obsessively. 58 00:03:45,180 --> 00:03:51,629 It's not, you know, in a any sort of a major breakout, it's stuck between four 59 00:03:51,629 --> 00:03:53,359 and four and a half percent. Now. 60 00:03:53,400 --> 00:03:58,080 The tenure in the US to get to 5% or more, that's when I think that you would 61 00:03:58,080 --> 00:04:01,350 begin to get people asking questions, What's my return on investment? 62 00:04:01,650 --> 00:04:04,950 How much are going to make out of all this massive CapEx I'm spending? 63 00:04:05,219 --> 00:04:10,639 Until then, this arms race goes on. So, yes, this is a bubble. 64 00:04:10,770 --> 00:04:15,780 When I look at the like, I have four criteria to try and map out if we have a 65 00:04:15,780 --> 00:04:19,870 bubble or not. It deals with overvaluation over 66 00:04:19,949 --> 00:04:23,189 investment, over leverage and over ownership. 67 00:04:23,189 --> 00:04:28,230 The falls that I call them on most of these, for us, this is quite 68 00:04:28,230 --> 00:04:30,420 advanced. Now you can argue that we not that 69 00:04:30,600 --> 00:04:35,730 leverage the balance sheet of these companies which are in overinvesting 70 00:04:35,730 --> 00:04:37,890 now. They are still doing it out of the cash 71 00:04:37,889 --> 00:04:39,539 flows. The debt they're taking is still 72 00:04:39,540 --> 00:04:44,250 relatively small, but apart from that, we are overvalued. 73 00:04:44,490 --> 00:04:50,129 On most metrics, we are overawed. I mean, 60% of American households today 74 00:04:50,730 --> 00:04:54,689 have exposure to the equity market for the highest in the world. 75 00:04:54,689 --> 00:04:58,139 Actually, it's the highest in the world. And in fact, America is the only country 76 00:04:58,350 --> 00:05:03,070 where people. Have more of their wealth in the stock 77 00:05:03,069 --> 00:05:06,670 market than it did even in the property market, which includes their own homes, 78 00:05:07,000 --> 00:05:10,660 typically in China or other places. The it's the other way around. 79 00:05:10,670 --> 00:05:13,900 People are five times more wealth in the property market, in the stock market. 80 00:05:14,170 --> 00:05:19,000 So this is a very extended bull market. But having said that, as I said, that as 81 00:05:19,000 --> 00:05:23,350 long as interest rates are low and interest rates I see are low because 82 00:05:23,529 --> 00:05:26,079 there are about three and a half percent, 4%, what do we think of the 83 00:05:26,079 --> 00:05:29,859 short interest rates? But nominal GDP growth is much higher, 84 00:05:30,009 --> 00:05:32,050 you know, like it's running at four or 5%. 85 00:05:32,949 --> 00:05:37,779 Concentration risk. You take a look at Korea and Taiwan, all 86 00:05:37,779 --> 00:05:40,779 the massive rally has been pretty much down to three stocks. 87 00:05:40,810 --> 00:05:43,079 Exactly. I mean, the risk has become structural. 88 00:05:43,089 --> 00:05:45,369 No, absolutely. I think that this is why looking at 89 00:05:45,370 --> 00:05:50,769 indices has become very misleading now, because, you know, the same few 90 00:05:50,769 --> 00:05:53,560 companies are driving the index. So you spoke about the emerging market 91 00:05:53,560 --> 00:05:55,600 index. In fact, the emerging market index today 92 00:05:56,019 --> 00:05:58,810 is even more concentrated the than the US index. 93 00:05:58,810 --> 00:06:02,769 Remember, for years we have spoken about how in the US, the S&P 500 is very 94 00:06:02,769 --> 00:06:07,060 concentrated, dominated by these big tech companies, almost like never 95 00:06:07,060 --> 00:06:09,220 before. In emerging markets, something very 96 00:06:09,220 --> 00:06:12,490 similar has happened. So you have this massive dislocation 97 00:06:12,490 --> 00:06:17,410 take place that for this year, markets like China, India, these are actually 98 00:06:17,410 --> 00:06:22,930 down in dollar terms or, you know, like India still down ten or per cent in 99 00:06:22,930 --> 00:06:25,420 dollar terms. And yet these Korea, Taiwan markets, 100 00:06:25,779 --> 00:06:30,729 these are up anywhere between 70% for Korea, 40% for Taiwan on a one year 101 00:06:30,730 --> 00:06:34,120 basis, they've all doubled. So so getting massive dispersion. 102 00:06:34,389 --> 00:06:40,629 So as I said, the world has now become about a monomaniacal focus on which 103 00:06:40,629 --> 00:06:43,569 countries have which countries don't have a place. 104 00:06:43,629 --> 00:06:47,589 India doesn't have AI in India has been tumbling. 105 00:06:47,589 --> 00:06:51,009 And, you know, foreign investors, foreign funds have been making exit. 106 00:06:51,040 --> 00:06:55,150 What would change that? Would it take an air bubble baths for 107 00:06:55,149 --> 00:06:57,039 foreign investors to start pouring money into India? 108 00:06:57,100 --> 00:06:59,620 Yes, I think so. I think that India has been perceived 109 00:06:59,620 --> 00:07:04,649 that way, that it's become an anti I play because the current phase of air we 110 00:07:04,649 --> 00:07:09,099 are in is all about infrastructure build out who's got the compute, who's got the 111 00:07:09,100 --> 00:07:14,680 infrastructure to build all of that and India never invested that much on that 112 00:07:14,680 --> 00:07:16,780 front. I mean, India, if you look at the amount 113 00:07:16,779 --> 00:07:22,809 they spend on research and development as a share of the economy, it's point 6% 114 00:07:22,810 --> 00:07:25,720 or so. There is this Korea, Taiwan type people. 115 00:07:25,720 --> 00:07:32,230 They do, you know, four or 5% of the GDP in in R&D. 116 00:07:33,939 --> 00:07:36,699 Even China, the US is closer to 3%. Right. 117 00:07:36,759 --> 00:07:40,689 And those are very large economies. So I think that that's been India's 118 00:07:41,889 --> 00:07:45,669 so-called fault line. Now, of course at a later stage when it 119 00:07:45,670 --> 00:07:51,009 moves much more to adoption, then maybe India has an opportunity of using AI to 120 00:07:51,009 --> 00:07:54,129 try and improve its productivity and its efficiency. 121 00:07:54,129 --> 00:07:58,000 But currently the problem is that countries like India are seen on the 122 00:07:58,000 --> 00:08:01,420 wrong side of the trade for two reasons. One, as you mentioned, that they don't 123 00:08:01,420 --> 00:08:05,980 have this kind of, you know, semiconductors or compute which the 124 00:08:05,980 --> 00:08:11,050 entire world is chasing just now. And the second and this may be a bit of 125 00:08:11,050 --> 00:08:15,280 a myth, but at least that's the perception, is that a lot of jobs seem 126 00:08:15,279 --> 00:08:20,250 to be at risk because of the disruption that India has in the software sector, 127 00:08:20,259 --> 00:08:24,129 software, even the GCC sector. So these kind of sectors, you know, 128 00:08:24,129 --> 00:08:27,939 there's a job risk and there were 10 to 15 million people Indians employed in 129 00:08:27,939 --> 00:08:30,370 this, and some of them tend to be well-paying jobs in India. 130 00:08:30,639 --> 00:08:33,370 And jobs has been a structural issue in India. 131 00:08:33,370 --> 00:08:37,029 So on both those fronts, India is seen as a bit of a risk. 132 00:08:37,029 --> 00:08:40,569 Now, at some point in time, valuations will get attractive. 133 00:08:41,288 --> 00:08:46,569 And the fact that India, you know, that the nominal GDP is growing at 10% will 134 00:08:46,570 --> 00:08:51,580 offer an attractive entry point. But for now sentiment has become yeah, 135 00:08:51,700 --> 00:08:55,090 that we and it's true not just of India, it's true of some of the Southeast Asian 136 00:08:55,090 --> 00:08:57,610 countries as well. Like I was having a look at Philippines 137 00:08:57,610 --> 00:09:00,460 the other day, you know, like no one even talks about it. 138 00:09:00,759 --> 00:09:05,080 But the Philippines market today on some metrics is trading at the lowest 139 00:09:05,080 --> 00:09:08,800 valuation since the East Asian financial crisis. 140 00:09:08,830 --> 00:09:11,560 Would you buy it then? But I think that, you know, like the way 141 00:09:11,559 --> 00:09:15,429 I'm thinking of the portfolio today is this, if I can say so, that you think 142 00:09:15,429 --> 00:09:19,359 about how much air you want in your portfolio and then what are the cheap 143 00:09:19,360 --> 00:09:23,169 hedges that you can have in the portfolio, which is that these are 144 00:09:23,169 --> 00:09:25,779 cheap. They will not work just now, but let's 145 00:09:25,779 --> 00:09:29,980 say this reverses that for some reason interest rates go up or the bubble 146 00:09:29,980 --> 00:09:33,039 bursts, you know, like what are the things that could benefit? 147 00:09:33,220 --> 00:09:36,519 So yeah, I think that the India Philippines, you know, could be the kind 148 00:09:36,519 --> 00:09:39,639 of places. But in general, what I find is that the 149 00:09:39,639 --> 00:09:43,509 best hedge to this currently is not even gold at all, because what's happened to 150 00:09:43,509 --> 00:09:47,799 gold is that gold used to be a good hedge, but because it had such a peer we 151 00:09:47,919 --> 00:09:51,459 rally, it's no longer become a risk free asset. 152 00:09:51,490 --> 00:09:53,299 There's a risk that embedded in that price. 153 00:09:53,330 --> 00:09:56,830 So yeah, gold will do okay. But I think that the best quality stocks 154 00:09:56,830 --> 00:10:01,720 in the world today are the best. I do this because quality as a factor 155 00:10:02,110 --> 00:10:06,399 has done quite poorly, particularly in international markets, and the quality 156 00:10:07,120 --> 00:10:09,669 would be good. Companies with an artery of more than 157 00:10:09,669 --> 00:10:14,379 15% some earnings growth, but they have all done poorly because there's been 158 00:10:14,379 --> 00:10:18,820 such a focus on just having a I and many of the I please. 159 00:10:18,820 --> 00:10:21,850 I mean, we speak about the Magnificent Seven apart from that are in fact 160 00:10:21,850 --> 00:10:25,509 unprofitable. You talk about air place they used to 161 00:10:25,509 --> 00:10:30,519 say is still the place to be. And yet back in 2024, you called peak US 162 00:10:30,519 --> 00:10:32,799 exceptionalism. Yeah, that's not the case. 163 00:10:33,009 --> 00:10:35,740 We're seeing record after record after record. 164 00:10:35,740 --> 00:10:40,509 Yeah, and we'll continue to test record. I mean, so I'd written back in, as 165 00:10:40,509 --> 00:10:46,090 you're seeing like in December of 2024 that US exceptionalism is peaking. 166 00:10:46,450 --> 00:10:49,660 And what did I mean by that? What I meant was that America had had a 167 00:10:49,659 --> 00:10:53,139 50 year great run of stock market performance. 168 00:10:53,440 --> 00:10:57,280 But I was talking about relative the fact that the American stock market 169 00:10:57,519 --> 00:11:00,399 relative to the rest of the world was likely to peak. 170 00:11:00,759 --> 00:11:03,939 And when I look back at it, that has happened that even though the American 171 00:11:03,940 --> 00:11:08,170 market has continued to climb higher since December 2024, in fact, when I 172 00:11:08,350 --> 00:11:12,340 wrote that piece that you're talking about, I think since then international 173 00:11:12,340 --> 00:11:16,660 markets have outperformed the US. You know, like despite all this money 174 00:11:16,659 --> 00:11:20,379 flooding into America and there's massive amount of money, flooding in the 175 00:11:20,379 --> 00:11:22,809 dollar has, in fact in the margin weakened, 176 00:11:23,830 --> 00:11:25,870 it hasn't strengthened against most currencies. 177 00:11:25,870 --> 00:11:29,560 Now there are some currencies like the rupee and the peso, 178 00:11:29,559 --> 00:11:33,009 etc., which have clearly weakened against the dollar. 179 00:11:33,009 --> 00:11:36,460 Crumbled. Fine, you can use the word somebody, but 180 00:11:36,730 --> 00:11:41,590 generally currencies have done okay. So international markets have 181 00:11:41,830 --> 00:11:45,370 significantly outperformed the US since December 2024. 182 00:11:45,610 --> 00:11:48,669 And that's very interesting despite the boom happening. 183 00:11:49,000 --> 00:11:54,190 So now to the counterfactual that if I boom and for some reason I think America 184 00:11:54,190 --> 00:11:57,100 would be very vulnerable. So the other follow up piece that I'd 185 00:11:57,100 --> 00:12:02,740 written last year for my column was that America has become now one big bet on 186 00:12:02,970 --> 00:12:08,410 high that that and that's why even Trump and is able to get away with so much you 187 00:12:08,409 --> 00:12:11,589 know, like a lot of people here in Singapore in other places are befuddled 188 00:12:11,590 --> 00:12:17,019 that how does America get away with all these, you know, actions that it takes? 189 00:12:17,679 --> 00:12:22,870 And my point is, because America keeps bailing out Trump or other policies 190 00:12:23,049 --> 00:12:26,859 simply because of its preexisting strengths and because of the AI boom 191 00:12:26,860 --> 00:12:30,460 continuing. That's why the other actions of America 192 00:12:30,759 --> 00:12:34,569 are superseded by the AI boom. You talked earlier about how you're 193 00:12:34,570 --> 00:12:38,860 keeping a very close eye on ten year yields, which you say it's not at 5%, 194 00:12:38,860 --> 00:12:43,810 but when you take a look at 30 year yields at 5% and expect it possibly to 195 00:12:43,809 --> 00:12:47,289 go higher, isn't that sending alarm bells? 196 00:12:47,470 --> 00:12:50,980 Well, I wouldn't say alarm bells, but it's sending like an orange signal. 197 00:12:51,159 --> 00:12:53,230 It's telling you that this is what you should be looking at. 198 00:12:53,230 --> 00:12:57,639 As I said, 300 year history of bubbles, higher interest rates is what kills 199 00:12:57,639 --> 00:13:00,730 them. So if you get higher interest rates, the 200 00:13:00,730 --> 00:13:05,230 entire equation changes. But, you know, this is still broadly, if 201 00:13:05,230 --> 00:13:08,259 you look at it, it's been stuck in a range for a while now. 202 00:13:08,320 --> 00:13:10,750 Right. So in terms of that, but I think that 203 00:13:10,750 --> 00:13:15,490 the if interest rates go up, that's when it tells you, hey, this boom is coming 204 00:13:15,490 --> 00:13:18,190 to an end. Now you can see that it's already very 205 00:13:18,190 --> 00:13:20,500 advanced. I don't want to be around these, you 206 00:13:20,500 --> 00:13:24,009 know, like it like in this bubbly phase. But there's a lot of performance 207 00:13:24,009 --> 00:13:27,250 pressure that people are facing just now, because if you look at even bubbles 208 00:13:27,250 --> 00:13:30,429 historically, they typically you get the best returns. 209 00:13:30,429 --> 00:13:35,649 Typically at the end, even in 99 2000, you know that a lot of people speak 210 00:13:35,649 --> 00:13:40,090 about how Alan Greenspan in 1996 had said this was irrational exuberance and 211 00:13:40,090 --> 00:13:43,570 it took more than three years after that for that to really manifest itself. 212 00:13:43,570 --> 00:13:48,129 But we know from that statement the Nasdaq went up multiple times. 213 00:13:48,490 --> 00:13:53,590 But I think that a detail which is often overlooked here is 214 00:13:53,590 --> 00:13:58,840 that even in October of 1999, from then to the peak, the Nasdaq doubled. 215 00:13:59,379 --> 00:14:03,220 So, you know, the the the end when it happens, the last phase of this, when 216 00:14:03,220 --> 00:14:08,680 there's a scramble going on, the price action tends to be the most parabolic. 217 00:14:08,679 --> 00:14:12,099 And that's what we're seeing in some markets like in Korea and these places, 218 00:14:12,399 --> 00:14:16,659 you know, like now all of a sudden these chip stocks, they they going up 10% a 219 00:14:16,659 --> 00:14:18,639 day. I'm talking about and we're talking 220 00:14:18,639 --> 00:14:22,000 about really large caps chip stocks here like Samsung High Index. 221 00:14:22,000 --> 00:14:25,419 And still, you know, that's not normal price action. 222 00:14:25,419 --> 00:14:28,329 That tells you that this isn't a parabolic stage. 223 00:14:28,570 --> 00:14:33,879 But they said that until interest rates come in, undercut this, it's very hot. 224 00:14:34,000 --> 00:14:38,860 There's no science to see that it should stop right here because these things 225 00:14:38,860 --> 00:14:41,830 just tend to carry on with a momentum of their own. 226 00:14:41,830 --> 00:14:46,870 There's so much retail speculation going on, not just in the US, even in Korea. 227 00:14:46,870 --> 00:14:50,710 And then now you have, you know, like pro-cyclical things going on that 228 00:14:50,950 --> 00:14:56,200 American individual investors are now being allowed access to buy Korean 229 00:14:56,200 --> 00:14:58,960 equities as well. So it just. 230 00:14:59,019 --> 00:15:03,129 Fuse this further, We're sure. I'm just wondering again, the current 231 00:15:03,129 --> 00:15:07,629 geopolitical landscape, how are you pricing that into your investment 232 00:15:07,629 --> 00:15:09,789 theory? Because if you take a look at what's 233 00:15:09,789 --> 00:15:12,639 happened, you know, amid this Iran war, the U.S. 234 00:15:12,639 --> 00:15:16,720 has had to move all its weaponry from Asia to the Middle East. 235 00:15:16,720 --> 00:15:19,060 And now we're talking about a shortage of weaponry. 236 00:15:19,059 --> 00:15:21,639 In fact, the U.S. has told the E.U. 237 00:15:21,639 --> 00:15:25,509 that perhaps, you know, all the transfers of weaponry may have to be 238 00:15:25,509 --> 00:15:29,169 delayed. Inventories are really low. 239 00:15:29,629 --> 00:15:31,809 That's a huge risk for the world, isn't it? 240 00:15:31,960 --> 00:15:35,920 Yeah, but, you know, like markets are very bad at pricing these 241 00:15:35,919 --> 00:15:40,029 kind of risks. And that's because of the fact that, in 242 00:15:40,029 --> 00:15:44,110 all fairness, because 99% of the time these risks never materialize. 243 00:15:44,259 --> 00:15:49,509 There are always geopolitical risks out there in the 1% probability that they 244 00:15:49,509 --> 00:15:54,370 materialized, like, you know, like the First World War or something as grave as 245 00:15:54,370 --> 00:15:57,310 that. The markets are blindsided by that. 246 00:15:57,460 --> 00:16:01,990 So that's the problem that, as I said, more than 90% of the time you have 247 00:16:01,990 --> 00:16:04,930 geopolitical risks and they don't quite materialize. 248 00:16:04,929 --> 00:16:09,309 And you know, like there's a line with I always repeat that history is better 249 00:16:09,309 --> 00:16:13,419 remembered than it's lived, that we now look back and think that this is a very 250 00:16:13,419 --> 00:16:16,569 geopolitically fraught time. But at any point in time, 251 00:16:18,129 --> 00:16:22,090 geopolitics always seems that way because there's always some risk there, 252 00:16:22,090 --> 00:16:25,450 even in the best of times. Know the people. 253 00:16:25,450 --> 00:16:29,650 Year before, I think we were born in the 1960s speak about, you know, like the 254 00:16:29,649 --> 00:16:35,709 fact that there were all sorts of fears that us and Russia, the Soviet Union at 255 00:16:35,710 --> 00:16:37,120 that point in time would have a nuclear war. 256 00:16:37,120 --> 00:16:41,320 And you had all these exercises of people hiding under desks and stuff in 257 00:16:41,559 --> 00:16:44,019 like America. Similarly, in the best of times of the 258 00:16:44,019 --> 00:16:48,639 early 1990s, the peace dividend coming through, there was a real fear and 259 00:16:48,639 --> 00:16:52,960 Margaret Thatcher and all would speak about that, that the Soviet Union as a 260 00:16:52,960 --> 00:16:58,900 last gasp to stay in in power and to stay united would launch a nuclear 261 00:16:58,899 --> 00:17:02,610 attack you know like to try and assert its authority. 262 00:17:02,620 --> 00:17:06,068 So and that was remember now we look back at the 1990, there's a golden 263 00:17:06,068 --> 00:17:08,519 period about, you know, geopolitical stability. 264 00:17:08,529 --> 00:17:11,848 So my point is that geopolitics is always volatile. 265 00:17:11,858 --> 00:17:14,108 Yes, it seems it's a bit more volatile now. 266 00:17:14,410 --> 00:17:17,859 Could be the last 20 to 30 years, but the markets are very clear, which is 267 00:17:18,549 --> 00:17:21,068 that you do like the fear, geopolitical risk. 268 00:17:21,400 --> 00:17:25,210 And in the 1% chance that something really disastrous happens, they're 269 00:17:25,210 --> 00:17:29,319 always, you know, shocked by it. How do you think this will play out for 270 00:17:29,319 --> 00:17:31,689 the midterms? I mean, Cam Griffin did say that, you 271 00:17:31,690 --> 00:17:33,039 know what, the Democrats are going to win. 272 00:17:33,309 --> 00:17:36,799 Yeah, well, if you look, you know, here's the problem with the strike, 273 00:17:36,819 --> 00:17:40,419 which is that, yes, I think that there's an overwhelming consensus that the House 274 00:17:40,660 --> 00:17:43,779 will flip on that. You know, you know, like I think that 275 00:17:43,779 --> 00:17:47,589 everyone has sort of decided the Senate is still 5050. 276 00:17:47,589 --> 00:17:51,399 And here's the problem in the in the polling numbers that everyone looks at 277 00:17:51,400 --> 00:17:53,440 Trump's polling numbers and they are relatively low. 278 00:17:53,440 --> 00:17:57,880 But the two points I'll make here, one that every 279 00:17:57,880 --> 00:18:02,110 American presidents polling numbers for the last 50, 60 years have been 280 00:18:02,109 --> 00:18:05,109 declining. So comparing it to history has become 281 00:18:05,109 --> 00:18:08,529 fraught because in a more polarized world, all numbers are declining. 282 00:18:08,859 --> 00:18:13,359 And the second point I'll make here is that the if you look at the generic 283 00:18:13,539 --> 00:18:18,879 ballot, the Democrats and their polling numbers are, in fact, lower than 284 00:18:18,880 --> 00:18:21,520 Trump's. So be it. 285 00:18:21,519 --> 00:18:26,139 It's about who you're fighting out. So that's another reason why Trump is 286 00:18:26,140 --> 00:18:30,580 able to get away, because a lot of people in America are also very 287 00:18:30,579 --> 00:18:34,059 disillusioned with what the Democrat Party is doing.