Single Best Idea with Tom Keene: Mike Green & Frances Donald

Tom Keene breaks down the Single Best Idea from the latest edition of Bloomberg Surveillance Radio.

In this episode, we feature conversations with Mike Green & Frances Donald.

Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.

Speaker 2 (00:14):
A single best idea on a FED day, I think
more than any other FED day that we've done. In
the morning. We had less conversation on the FED. It's
just the confusion that's out there. And this keyword uncertainty.
We covered it yesterday. I will be honest, I can't
remember the guest, but we had a brilliant discussion of
Nightian uncertainty. Nightian k and Ight Nightian Uncertainty is Frank Knight,

(00:42):
nineteen twenty one. It was his thesis I believe at
Chicago a million years ago, and it's a rite of passage.
You have to read the thing. It's my recollection. It's
forty fifty sixty pages, but you have to read his
thesis on Nightian uncertainty, which is sort of a reachable,
touchable uncertainty even though you can't see or touch the

(01:02):
uncertainty is a simple way to put it. That's where
we are right now, particularly given the trade war. A
lot of good conversations today. We started strong, huge response,
Thank you so much out on YouTube to Mike Green,
five Star, Morning Star, High Yield Fun Mike Green with
a lot of really good discussions about active versus passive.

(01:25):
Here's Mike Green on your retirement choice.

Speaker 3 (01:28):
The quick answer is there is no right percentage, right,
It's going to depend on everyone's individual component. The key
thing that I would highlight is that when you think
about investing for retirement, when you think about those, focus
on what you need, not what your neighbor wants. Right,
And this is a really key component. We tend to
get ourselves caught up in the fomo type framework. We're
in an environment in which you can if you're worried

(01:49):
about inflation, you can buy real yielding tips with a
positive yield for the first time in over a decade. Right.
That is something that I would argue people are ignoring.
I would broadly suggest that income in a lot of
ways because it has what I refer to as indogenous liquidity,
significant coupon payments and an ultimate payment of at maturity.
Has very different characteristics than the Ponzi like characteristics associated

(02:12):
with equities, where you are always getting your value from
what somebody else pays, and so those are ways that
you can separate yourselves. They're not immune, I have to
be clear, this is a systemic issue, but they are
a better way to think about the opportunity.

Speaker 2 (02:25):
The forever debate about the certain cash flows of fixed
income versus a less certain equity world. Mike Green. There
Francis Donald is with RBC Capital Markets. She gave us
a traditional FED coverage is best she could. Here's Francis
Donald of RBC on our labor economy.

Speaker 1 (02:45):
The nature of this job market is changing. We have
the most amount of those over the age of sixty
five the US has ever seen. Over one in five
Americans is over the age of sixty five, most amount
of retirees ever and so economists are scratching their head.
Why are higher rates down but also fire rates down
and quick rates down. This is a job market that
is acclimating to a demographic bus that's occurring in real time.

(03:09):
Demographics are traditionally something that you look at when you're
five or ten year forecast when you're forced to do
something that difficult. They're not something we take to hear now.
And this is why when I talk about uncertainty, a
lot of folks are saying we're going to get more
certainty on trade in the coming week. But a lot
of the customers, a lot of the folks that we
talk to in the United States are also paying very
close attention to immigration policies that come through and how

(03:31):
this government is going to support or not support what
is a very shifting labor dynamic. Now Federal Reserve is
going to have to talk about this at some point,
probably not today, when they're looking at something like a
high fours unemployment rate and that's going to be enough
for them to start cutting.

Speaker 2 (03:46):
Just brilliant Francis Donald there on what the media doesn't
talk about enough, which is demographic economics. Angus Madison owned
the high ground one this I really can't and Robert Fogel,
I believe it. Penn at University of Pennsylvania, the laureate.
I really can't say enough how we ignored our peril

(04:08):
the demographics the makeup of any society, whether it's China
or the US, whatever. But that was just brilliant. Francis
Donald there on an Aging America. We're on YouTube, some
real benchmarks today for us. Thank you so much for
subscribing to Bloomberg podcasts out on YouTube. It is the
foundation of our future. Really appreciate that. And out on

(04:30):
YouTube podcasts. This is a single best idea