Single Best Idea with Tom Keene: Frank Lee & Lori Calvasina

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

In this episode, we feature conversations with Frank Lee & Lori Calvasina.

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. A single best idea.
It was a terrific Monday. Monday in July. You know,
you're really not focused like you got to get you

(00:23):
got to get the Tuesday, to get the week started.
Our team put together a great set of conversations to
get you to your Tuesday so you can get your
week started. Real high point. Elaine Ray joined us. She's
a giant in European economics. Was a really good and
thoughtful discussion on what she thinks Europe needs to do

(00:43):
to get their act together. It was very academic, very highbrow,
but that was wonderful. And then we had the lowbrow
as well. Isabelle Lee of Bloomberg News with a breaking
story the Compendium of Crypto at one hundred and eighteen
thousand bitcoin rather at one hundred and eighteen thousand and
whither from here. Wrapped around that was equities, bonds, currencies

(01:05):
and commodities and special guests in from Hong Kong. I
love saying this. With the Hong Kong and Shanghai Banking
Corporation HSBC, is there giant on semiconductor analysis. Here is
Frank Lee of HSBC.

Speaker 2 (01:21):
I think it is an issue that people talk about,
but we haven't really seen that really materialize yet. I
do think the infrastructure build will continue. I think everybody
recognizes the importance of AI right now and why it's
so important to invest it in. You know, for example,
if you look at sovereign AI right now in the
announcements earlier in the year about you know, Saudi Arabia

(01:43):
canna invest this huge amount of desness. But there's also
the question are they ready yet, right because they need
to build the infrastructure in terms of the energy. But
I think it will eventually. I think we'll go hand
in hand.

Speaker 1 (01:53):
Really really interesting and particularly Frank then the Pacific rim
on Taiwan and then over to mainland China as well.
Just absolutely fascinating. And again we protect the copyright of
our guests. His reports are jaw dropping in their complexity.
I threaten to actually read one and try to get
through it. On AI and almost on the physics and

(02:16):
computation wrapped around artificial intelligence, there's no physics with Lori Calvsina.
It's about studying the mood of the equity market with
RBC Capital Markets.

Speaker 3 (02:27):
Lori Calvisina, Well, what I'll tell you I'm seeing in
my Decktom and Tom, you and I've known each other
a long time. I am sort of like anti theme,
anti fad, like I am never, you know, sort of
drinking the kool aid on the next hot thing. But
I've been calmed down a little bit on this AI
theme because when I look at the top ten megacap
names in the S and P five hundred, which are
largely AI plays, and I do a median pe of

(02:49):
those companies, and I compare it to the long term
growth expectations, and I take those two things right, and
I look at MAG seven versus rest of the S
and P rel pe line is the same line as
the relative long term earnings growth line, So they're getting
different multiples, but it's based on the differing perceptions of
what the long term earnings growth rates are. And that's

(03:11):
been very similar to what we tend to see over time.
I think there was a breakdown in that relationship around
the GFC briefly, but this is even how stocks behaved
back in the nineties and early two thousands. So I
think you've really got to tackle those long term earnings
growth expectations, and you've either got to just like Bang
down the mag seven trade and say their numbers are
way too optimistic, or you've got to look at the

(03:32):
rest of the market and say it's way too pessimistic
and move those up. And we're just not seeing any
change in that relative gap. So they're kind of each
getting the relative pe they deserve.

Speaker 1 (03:41):
Bottle it, Laurie Kelvisen. There are the wonderful discussion of
piecing together your conviction about what the growth rate is,
however you measure that with a company and with an
industry as well. It really gets back to the basics
of security analysis. We're back to the basics here in

(04:02):
mid July onward to that July thirty FED meeting, and
of course all the geopolitics of the domestic Washington as well.
We're out on Apple Music, on Spotify as well as
where you find the podcast and on YouTube podcasts. It's
a single best idea