RUSH TRANSCRIPT Welcome back ░░░░░░░░ averages Raleigh with the ░░░░░░░░ averages rallying Our next ░░░░░░░░ staying cautious and thinks ░░░░░░░░ market is optimistic on ░░░░░░░░ road ahead Let s ░░░░░░░░ in rich saperstein back ░░░░░░░░ me at post nine ░░░░░░░░ more things change the ░░░░░░░░ they stay the same ░░░░░░░░ I think of when ░░░░░░░░ see you and read ░░░░░░░░ like that You re ░░░░░░░░ cautious on a market ░░░░░░░░ s proven as we ░░░░░░░░ at the outset to ░░░░░░░░ darn resilient At the ░░░░░░░░ of our cautiousness we ░░░░░░░░ by 10 and kept ░░░░░░░░ of our large tech ░░░░░░░░ and we now are ░░░░░░░░ at full allocations with ░░░░░░░░ market appreciation it We ░░░░░░░░ able to use that ░░░░░░░░ to redeploy into 4 ░░░░░░░░ free muni bonds which ░░░░░░░░ an outstanding opportunity for ░░░░░░░░ clients You still think ░░░░░░░░ opportunities outside of equities ░░░░░░░░ the best risk reward ░░░░░░░░ you and your clients ░░░░░░░░ At this time we ░░░░░░░░ there s great opportunity ░░░░░░░░ a bond market which ░░░░░░░░ uninvestable for roughly 15 ░░░░░░░░ and clients that had ░░░░░░░░ large equity positions that ░░░░░░░░ up over the years ░░░░░░░░ s time to trim ░░░░░░░░ and reallocate into other ░░░░░░░░ This notion that ken ░░░░░░░░ posed at the top ░░░░░░░░ you could tell by ░░░░░░░░ level of resiliency that ░░░░░░░░ market has put forward ░░░░░░░░ in the face of ░░░░░░░░ of these headwinds that ░░░░░░░░ like you look at ░░░░░░░░ say gosh I don ░░░░░░░░ want to be overly ░░░░░░░░ to equities Yet here ░░░░░░░░ are Super impressed with ░░░░░░░░ resiliency in the economy ░░░░░░░░ of a couple reasons ░░░░░░░░ hoarding Two you ve ░░░░░░░░ the excess savings post ░░░░░░░░ being burned off by ░░░░░░░░ Three you have the ░░░░░░░░ of the student loan ░░░░░░░░ And a lot of ░░░░░░░░ is reversing right now ░░░░░░░░ ll have qt added ░░░░░░░░ that mix and a ░░░░░░░░ where the bite of ░░░░░░░░ tightening still has to ░░░░░░░░ place So I mean ░░░░░░░░ what point do you ░░░░░░░░ your view You know ░░░░░░░░ expectations are up If ░░░░░░░░ remains the case that ░░░░░░░░ you know earnings meet ░░░░░░░░ moment and expectations and ░░░░░░░░ though sticky in certain ░░░░░░░░ particularly related to services ░░░░░░░░ to come down what ░░░░░░░░ it out there that ░░░░░░░░ somebody like you to ░░░░░░░░ your view Right now ░░░░░░░░ market is pricing in ░░░░░░░░ let s call it ░░░░░░░░ bullish slowdown where it ░░░░░░░░ tepid slowdown in economic ░░░░░░░░ A soft landing Plus ░░░░░░░░ inflation and then a ░░░░░░░░ that cuts and next ░░░░░░░░ an a I fueled ░░░░░░░░ in the equity markets ░░░░░░░░ just don t think ░░░░░░░░ the pieces will fall ░░░░░░░░ place like that Which ░░░░░░░░ That doesn t seem ░░░░░░░░ far fetched at this ░░░░░░░░ The S P generated ░░░░░░░░ in earnings in the ░░░░░░░░ two quarters The estimate ░░░░░░░░ this year is 222 ░░░░░░░░ we need to have ░░░░░░░░ 126 in earnings in ░░░░░░░░ next two quarters 12 ░░░░░░░░ growth Now I don ░░░░░░░░ see that happening Then ░░░░░░░░ 24 we need another ░░░░░░░░ to get to 248 ░░░░░░░░ think the market is ░░░░░░░░ in excessive earnings growth ░░░░░░░░ to where you know ░░░░░░░░ re going to come ░░░░░░░░ Okay So you think ░░░░░░░░ market is over valued ░░░░░░░░ that fair It s ░░░░░░░░ to talk about an ░░░░░░░░ valued market because tech ░░░░░░░░ had a he profound ░░░░░░░░ specifically a decade ago ░░░░░░░░ and Microsoft were 5 ░░░░░░░░ of the index Today ░░░░░░░░ 7 So that s ░░░░░░░░ the average multiples higher ░░░░░░░░ s right So I ░░░░░░░░ t look at the ░░░░░░░░ I m looking at ░░░░░░░░ economic outcome outlook and ░░░░░░░░ I have the opportunity ░░░░░░░░ do is invest past ░░░░░░░░ Fed tightening all this ░░░░░░░░ about is inflation coming ░░░░░░░░ or not There s ░░░░░░░░ wide range of asset ░░░░░░░░ I could choose from ░░░░░░░░ that s what we ░░░░░░░░ doing I know I ░░░░░░░░ of ask you that ░░░░░░░░ I m thinking about ░░░░░░░░ allocation You didn t ░░░░░░░░ any of your holdings ░░░░░░░░ mega cap No You ░░░░░░░░ a broadly negative view ░░░░░░░░ the market but in ░░░░░░░░ respects you re justifying ░░░░░░░░ some would call inflated ░░░░░░░░ of mega cap So ░░░░░░░░ cap has great benefits ░░░░░░░░ revenues a large moat ░░░░░░░░ their business Google roughly ░░░░░░░░ billion in revenues in ░░░░░░░░ cash flow 30 billion ░░░░░░░░ year in capex and ░░░░░░░░ D That s not ░░░░░░░░ the balance sheet Five ░░░░░░░░ over 100 billion in ░░░░░░░░ D that s been ░░░░░░░░ we have yet to ░░░░░░░░ the benefit of I ░░░░░░░░ these stocks are very ░░░░░░░░ the ones we own ░░░░░░░░ Microsoft and Google and ░░░░░░░░ they re going to ░░░░░░░░ go higher over time ░░░░░░░░ we also are long ░░░░░░░░ lot of oil stocks ░░░░░░░░ think oil is a ░░░░░░░░ sector to be in ░░░░░░░░ now and have been ░░░░░░░░ year And you have ░░░░░░░░ desire to increase your ░░░░░░░░ in I mean what ░░░░░░░░ does tech have right ░░░░░░░░ in terms of your ░░░░░░░░ Probably double what we ░░░░░░░░ be I don t ░░░░░░░░ You made the most ░░░░░░░░ case for someone negative ░░░░░░░░ the overall market You ░░░░░░░░ up muni bonds as ░░░░░░░░ started out If we ░░░░░░░░ negative we wouldn t ░░░░░░░░ a full allocation in ░░░░░░░░ We re cautious We ░░░░░░░░ 10 at the peak ░░░░░░░░ our caution Keep in ░░░░░░░░ for our clients the ░░░░░░░░ to the capital is ░░░░░░░░ important than the return ░░░░░░░░ the capital So we ░░░░░░░░ to choose where we ░░░░░░░░ going We don t ░░░░░░░░ to swing at every ░░░░░░░░ What do you make ░░░░░░░░ what griffin said I ░░░░░░░░ been playing a bunch ░░░░░░░░ it s interesting and ░░░░░░░░ s not the only ░░░░░░░░ talking about the possibility ░░░░░░░░ real yields really you ░░░░░░░░ spiking higher because of ░░░░░░░░ the deficit is the ░░░░░░░░ of issuance coming on ░░░░░░░░ market too much supply ░░░░░░░░ the market can bear ░░░░░░░░ the buyers aren t ░░░░░░░░ to soak it all ░░░░░░░░ Yeah Look that s ░░░░░░░░ really good point because ░░░░░░░░ s two factors here ░░░░░░░░ we evaluate it One ░░░░░░░░ higher rates lead to ░░░░░░░░ slowdown ultimately lower interest ░░░░░░░░ That is conflicted with ░░░░░░░░ increased supply that the ░░░░░░░░ has to issue to ░░░░░░░░ this 1 6 trillion ░░░░░░░░ So that is in ░░░░░░░░ But in the end ░░░░░░░░ re still buying longer ░░░░░░░░ bonds We think in ░░░░░░░░ long run the market ░░░░░░░░ appreciate the bonds will ░░░░░░░░ in a slowing economy ░░░░░░░░ s the most recent ░░░░░░░░ you bought Something jump ░░░░░░░░ to you that you ░░░░░░░░ let us know Yeah ░░░░░░░░ we ve added to ░░░░░░░░ occi Home Depot We ░░░░░░░░ looking at adding to ░░░░░░░░ right now There s ░░░░░░░░ lot of names we ░░░░░░░░ been adding to within ░░░░░░░░ existing portfolio You mentioned ░░░░░░░░ Why depot That s ░░░░░░░░ to me That s ░░░░░░░░ interesting environment where home ░░░░░░░░ right now is kind ░░░░░░░░ frozen If you have ░░░░░░░░ 3 mortgage you re ░░░░░░░░ to do home improvements ░░░░░░░░ think as it an ░░░░░░░░ space to be in ░░░░░░░░ now given the constriction ░░░░░░░░ the housing