00:00 Speaker A
I want to get your take on the US economy. First I I do want to get your take on these headlines, US-China trade tensions trying. I it’s interesting because I think a lot of investors had thought, you know what, things are going okay, the two sides are talking. To some extent, I I thought it’d actually kind of moved off the radar. Now it feels like those tensions very much back on the radar. You got the new post from the president saying he believes China purposely is not buying US soy beans, that’s an economically hostile act. says we’re considering terminating business with China having to do with cook oil, cooking oil and other elements of trade as retribution. You’re an investor, you actually have to put money to work in this market. How do you navigate all this?
00:53 Speaker B
Well, I think the first thing we look at is you’ve got to kind of look look deep and long and recognize that there’s some fundamental issues that are underlying all of this. And the reality is is that China, you know, China’s trade with us is 2.3% of their economy. They don’t trade with us, they go into recession. Our trade with them is about one half of 1%. So if you look at this battle and this war that’s going back and forth, it’s an economic war and the point of the matter is is we have a much stronger hand. They need us more than we need them. period, end of story, full stop. And if you kind of step away from this, you recognize that what we’re seeing is a lot of noise, a lot of words around a battle, but in the general war, we’re probably going to win.
01:50 Speaker A
So what what do you as an investor, do you say to yourself, I’m going to see these posts, I’m going to see these headlines, but I’m going to look through it. It’s noise and just I’ll focus on earnings?
02:02 Speaker B
Exactly. Because you focus on earnings, you take a look at the fundamentals. You know, a lot of this, I call it the Frazzled Cat syndrome. The market’s at a it’s true. The market’s at kind of a high, you get any piece of noise, everybody goes crazy, they’re upside down on the ceiling, they panic, they overreact. And so that’s one thing we’ve we’ve been saying for a long time, buy chips on dips. And and be in the situation that when you when people are overreacting to these things, back up, look at the fundamentals, look at the earnings, and then make sure that’s what’s driving your
02:37 Speaker A
Do do you think in some sense is this market kind of coiled or positioned to overreact because market concentration, because of valuation.
02:46 Speaker B
Absolutely. I mean, because particularly when you get to the top, when the pricing is a little bit ahead of the earnings and when now we’re looking at people kind of wonder what’s next. But we’re going to see earnings probably be very good as they come out. We just started today, right? Or yeah, and then we’re going to continue to see earnings in the next couple of weeks. And I think those are going to be pretty good. And we’re going to be looking forward to predictions or or overall for the S&P 500, earnings are going to be up 10 to 10 to 12% next year. So, you know, earnings at an all-time high means markets are at an all-time high. And I think we have to just kind of get recognize that we get to these peaky moments, folks overreact. Sometimes people, sometimes people are irrational and they overreact and then for us, we look at that as an opportunity.
