March 13, 2025 • 36 mins
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By repeatedly threatening, imposing, and withdrawing tariffs, the Trump Administration is creating uncertainty for businesses who depend on international trade.
The result is a sharp drop in the stock market, with additional declines likely.
In this episode, Steve and Clem explore how Trump’s trade policies are based on 19th century economic assumptions and fail to recognize that high tariffs can trigger depressions, as they did in the early 20th century. They also discuss how tariffs on steel and aluminum are legally premised on national security grounds!
Steve and Clem discuss inconsistencies in Administration objectives: Are tariffs meant to be a permanent revenue source or are they meant to be a geopolitical or geo-economic bargaining chip? They can’t be both!
Steve and Clem explore ways in which investors can protect themselves against tariff-generated volatility.
Straight Talk for All - Nonsense for None
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Disclaimer - These podcasts are not intended as investment advice. Individuals please consult your own investment, tax and legal advisors. They provide these insights for educational purposes only.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Steve Davenport (00:02):
Hello everyone and welcome to Skeptic's Guide
to Investing.
Here we are, thursday, march13th, and I'm here with Clem
Miller and we're going to talkabout the turmoil among tariffs
and every day it seems like wego from 25 to 50 in tariffs
(00:23):
levels.
And then we talk about aluminum, we talk about steel, we talk
about almost everything as beingsomething that we should put a
tariff on.
And after you know muchsurprise, I learned that Glenn
Miller's family was involved inthe tariffs that were set over
100 years ago, in 1922.
(00:47):
And his relative was namedFordney and it was called
Fordney and another bill and hewas the chairman of the House
Ways and Means, and this billwent after farmers and equipment
and helped cause the depressionin the farming and agricultural
(01:10):
community in the 20s, beforeSmoot-Hawley caused further
depression in other industries.
So we could basically look atthe depression and say it was
related to a Klum's family.
They were a main part ofcreating it.
So, thinking about that as yourinvestment advisor, that's why
(01:32):
you want to listen more to meand less to Clem, because you're
leading us down a path toanother depression.
So besides that, I think itwill be good for Clem to kind of
put things in perspective as amember of a family that has a
deep history around tariffs, tohelp us understand what are
(01:54):
tariffs, why are tariffseffective, why are they not
effective and how do we look atthis turmoil as it affects our
portfolios?
I believe that you know, I'venever been a big believer in
autos.
I've never been a big believerin steel.
They're very tough industries.
They've almost becomecommoditized to some degree.
But I think it would be goodfor us to understand for our own
(02:20):
portfolios where are thereopportunities and where are
people who are in those likelyto go for replacement stocks?
So, clint, do you think you'regoing to cause a depression in
the next two to three years ordo you think it will be longer
term before the impact of yourideas will?
Clem Miller (02:40):
destabilize the US economy.
Destabilize the US economy.
Let me step back, steve, andlet's talk about a little bit
about the history of tariffs andthe time, long ago, when
(03:02):
tariffs actually worked, worked.
Uh, if you have, and you reallyhave to go back to, uh, the
19th century, uh, and even thelate 19th century with, uh, you
know, president Trump's uh hero,uh, president, uh, william
McKinley, and by going back thenyou know you're looking at a
(03:24):
world where there was lessglobal trade.
It was a world before you had alot of trade and commodities
and trade in manufacturers.
You had less in the way ofmanufacturers.
This was a world beforeautomobiles.
(03:45):
It was a world where, you know,you had just established
telecommunications capabilitiesaround the world.
It was a world where you didn'thave container ships, much less
computers, much less computers.
(04:08):
And in that kind of environmentwhere there was a lot of, you
know, trade friction and apreference for domestic goods
and inability.
Really, you know lots ofbarriers, physical barriers, to
being able to conductinternational trade.
You know tariffs actuallyworked very well.
You could put up a tariff andit basically, you know, tipped
(04:30):
preferences into domesticbusinesses.
You know tariffs, you knowlooking back even a little
further, you know, you can lookback to Hamilton right and
Hamilton Secretary of theTreasury.
His idea was to build anindustrial power in the United
(04:52):
States and he used tariffs aspart of his plan for doing that.
He also used government capitalexpenditure to do that as well,
but he looked at tariffs as away to do that.
But today, if you think about,you know, the post-war period,
you think about, you know,global trade expansion.
(05:13):
You think aboutcontainerization.
You think about, you know, theuse of computers to direct trade
from one country to another.
You talk about expansion ofcommodities, everybody being
able to do optimization ofpricing.
(05:35):
You're talking about a worldwhere tariffs are much less
effective in achievingobjectives such as
reindustrialization, much lesseffective in achieving
objectives such asre-industrialization.
So it may be in in, uh, ourpresident's mind that he can do
what william mckinley did, orlike, uh, you know, maybe my, my
(05:58):
uh cousin long lost, uh, unruh,highly, highly distant cousin,
um, joseph fordney tried to doin 1922, um, but you know, today
it's a very different world andall tariffs do is create a lot
(06:18):
of problems and confusion and um, and you know, just a lot of
problems and confusion.
In fact, I would argue that thebiggest problem is for
companies that are trying to dolong-term strategic planning.
And if a company can't,companies sit down.
(06:41):
They do three to five year,seven year strategic plans and
they build these around certainassumptions and scenarios.
And if they can't rely on thosescenarios because you've got
external forces like tariffs, itcauses a lot of havoc and
companies can't operateeffectively in that kind of
(07:03):
uncertain environment.
Steve Davenport (07:06):
You think that what these tariffs will
eventually do is force moreunshoring, Because people will
not want to have locationsacross the border where they'll
have to deal with getting intothe US, that the only real
solution if you're a company isif I want to avoid these tariffs
, I got to build it in the US.
Is that possibly the logic forwhy we pursue this?
Clem Miller (07:32):
Well, you know that's a stated objective,
obviously, but think about itthis way If you've got a
capability already in the UnitedStates with capacity that's
unused in the United States,sure that's possible.
But if you don't have that, youactually need to build capacity
(07:54):
in the United States in orderto have operations in the United
States, and that can take ayear, two years, three years,
five years, 10 years.
It can take an awful long timeto build capacity in the United
States.
I heard about Canada was.
Steve Davenport (08:12):
The aluminum trade is one of the dirtiest
businesses and that's why we'veleft it in Canada.
There's no, there's no smeltingon aluminum capability in the U
?
S, so we don't get it fromCanada.
We can't turn a factory on thatwas shut last week.
It's just that aluminum went along time ago out of the US
(08:32):
because it is such a dirtyprocess.
Clem Miller (08:34):
Right, and 80% of the value added in making
aluminum is actually electricityadded in making aluminum is
actually electricity Becausewhat happens is that you need to
convert the bauxite into anintermediary product called
alumina and alumina into thefinal product of aluminum.
(08:57):
And in order to do all that,you need to have power.
And that's why, over the lastyou know, four or five decades,
a lot of aluminum production hasmoved into regions that have a
lot of energy.
So, for example, the Gulfstates, where obviously you have
(09:20):
a lot of energy, have builtlarge aluminum manufacturing
capability.
It's not just that they wantedto build aluminum plants, it's
that it was cost effective andthey had a comparative advantage
in terms of being able toprovide cheap electricity to
(09:42):
build aluminum, to manufacturealuminum.
Um, but let's you know why youmentioned aluminum?
Let me just mention something.
You know why?
Why is trump focusing onaluminum?
Why is he focusing on steel?
It's because there are laws onthe books that give him
authority to declare a nationalsecurity emergency and allow for
(10:07):
steel and aluminum tariffs.
It's called Section 232.
And Section 232 is a nationalsecurity law and it arose from
this notion that a country thatthe United States, in order to
maintain a defense industrialbase needed to have domestic
(10:29):
steel and aluminum production,you know, for ships and aircraft
, and so that allows thepresident to apply uh, to apply
tariffs under his own authoritywithout having to go to Congress
for specific authorities toapply those.
There's a separate kind ofauthority called Section 301
(10:53):
authority and what that does isthat's more of the kinds of
competitive authorities where ifthe Us finds that uh, that
somebody else is dumping right,that you can have a
countervailing tariff orcountervailing duty uh against
(11:14):
that that others.
That's very narrow and specificand it's for a particular type
of product and you know it's nota sweeping kind of uh of tariff
that covers, you know, entiresectors.
Steve Davenport (11:29):
So couldn't the , the, the courts, strike down
these tariffs, as there is nosecurity at risk with canada?
I mean, if the, if it'saluminum that's coming from
canada isn't we don't have ashortage of it in our military
and there's no, then how do we?
Clem Miller (11:47):
I can't tell you.
I can't tell you what thecourts would do, but I think my
guess would be that you knowthey would allow steel and
aluminum tariffs.
Uh, because they are.
There's a clear law that saysthe president can make a
national security determination.
But on some of these otherthings, you know, if, if, if, if
(12:13):
Trump were to to to have like10% across the board tariffs or
20% across the board tariffs, Ithink those are potentially
subject to court striking themdown, because I don't think, I
don't think necessarily thepresident has the authority to
do that, not, not that I'm awareof, at least, Well, I just saw
something come across the wirethat I found to be very
(12:35):
frightening, which was aproposal for 100 percent tariff
on EU wine.
Steve Davenport (12:41):
Yeah, I don't know where you are with wine,
but that's a lot of wine andthat's a lot of tariff, and we
don't need that kind of effecton our lives.
To be taking my Beaujolais ormy Chianti away from me, that
seems kind of harsh, so I don'tknow.
You can talk all you want aboutaluminum and steel, but once
(13:03):
you touch my wine, I thinkyou're dealing in a very
dangerous slope.
Clem Miller (13:10):
Well, I think, Steve, that that was aimed at
the Democrats who sip Europeanwines and helps protect the
bud-swelling mega folks.
Okay.
Steve Davenport (13:31):
I think it's a little frightening when you talk
about national security forsteel and aluminum, and I think
the only reason to tariff wineis strictly symbolic.
I mean, I think it's all aboutsymbolism is strictly symbolic.
I mean, I think it's all aboutsymbolism, and I guess that's
what I'd ask you is how much ofthese discussions or issues are
just bluster or puffery and howmuch of it is.
(13:54):
These are real things and realproblems and we're going to
straighten out the US tradedeficit through this process.
It's just a bump in the roadtowards a greater place.
Paul Jay 007, md, phd, phd, phd, phd, phd, phd, phd, phd, phd,
phd, phd, phd.
Is it 80 percent puffering innegotiation and 20 percent real?
Clem Miller (14:13):
Well, let me say this I think Trump believes it's
real.
I mean, this has been somethinghe's been harping about for
decades tariffs and I believe, Ithink he believes that high
tariffs work.
They worked for his hero,william McKinley over.
High tariffs work.
Uh, they worked for his hero,uh, william McKinley, uh, over a
(14:35):
hundred years ago, and I thinkhe thinks that you know they're
going to work as they did forMcKinley and not work the way it
did.
You know, uh related to uh,fortney McCumber and uh and
Smoot-Hawley uh, which wereproved to be disasters.
So I do think he believes inthat.
(14:55):
Now here's the problem.
Problem is, is that there areirreconcilable objectives with
regard to tariffs.
On the one hand you've heardthis story I'm sure that if we
have tariffs that are highenough, that it'll help control
(15:15):
the deficit or help to pay fortax cuts or continuation of tax
cuts.
It's just a different revenueform, right?
I'm sure you've heard that one.
Steve Davenport (15:26):
Yeah, it's all taken care of.
Clem Miller (15:28):
Right, but that assumes, of course, that tariffs
are persistent, large andpersistent, but what we've seen
in reality is that Trump is alsousing them, right as, or the
threat of them, in order tobring about various objectives.
(15:49):
You know some, not even havingto do with economics, like, uh,
you know political objectives,objectives regarding, um, you
know, immigration, you knowmigration, um, you know these
are objectives that you know.
If you make, if you do anegotiation and tariffs are part
of it, and you achieve what youwant in the negotiation and
(16:12):
withdraw the tariffs, that's nota persistent tariff that can be
used for deficit reduction.
No, I think that's what I'mtrying to figure out.
Steve Davenport (16:22):
Are we doing this just for spite, to try to
create a more level?
I agree that perhaps the US hasbeen more open than other
markets and therefore has beentaken advantage of for our
openness.
I think ultimately we benefitfrom lower priced goods and
ultimately we don't want some ofthis smelting going on in the
(16:44):
US for the aluminum.
So there's a reason why it'sdone in Canada.
They've got more energyavailable.
They've got, you know, largerland and less issues with
density, whereas if you put analuminum facility in a dense
area of America, it would behorrible for those people who
live there.
(17:06):
They can locate thesefacilities in ways that are
accessible to the energy.
So there is a reason for doingthis and it has nothing to do
with the price.
It has everything to do withthe visuals of what it means if
we're hurting Canada and wherethat's one of their main
(17:27):
products.
I think aluminum has got to beone of the larger items in terms
of the GDP of Canada.
So I see why it's being done.
But my question is is it reallythe economics or is it really
just?
You know, we're playing a gamehere where we keep slapping this
, and that's why I bring up thewine.
(17:49):
I mean obviously France.
One of their main exports iswine and cheese and butter.
And I look at this and say, boy, this is just like attacking
the French, and I'm not sure.
I guess, if we do all thesethings on our own and there is
no coordination, aren't we lesslikely to be successful with
(18:09):
this, and isn't it?
Isn't there just going to besuccessful with this, and isn't
it?
Isn't there just going to be areciprocal tariff put on some of
our goods?
Oh, of course that ultimatelyjust neutralizes the benefit of
the tariff and therefore we endup in a state where now we've
got two more things with largertariffs, and so our level of
tariffing, if tariff affects.
(18:32):
Let's say, the average Americanhas an income of $65,000 and
let's say their expenses are$60,000.
I don't know if that's the wayit works out.
I think in the lower middleincome it might be close to
$65,000 and $65,000.
But how much are these tariffstoday and how much do you think
(18:52):
they'll be tomorrow?
It feels to me like they'reprobably four or five thousand
and we're probably going to goto a place where they might be
six or seven thousand.
But I don't.
I don't see us having a planthat says here's the biggest
injustices and we're going toattack those first and we're
(19:13):
going to do it in a way, andthere just doesn't seem to be a
rationale to which do we dofirst?
And then, how do we make surethat the reciprocal tariffs?
You know, maybe we don't sendthose semis to Canada, we send
those semis to someone else whohas a better record with us in
(19:35):
terms of reciprocal tariffs?
It feels like it's just anotherexample of Canada is the 51st
state and Greenland is going tobe the 52nd, and the Panama
Canal is going to become ownedby the.
Clem Miller (19:51):
US.
I just saw an article today Ithink it might have been in the
journal where somebody pointedout that there's a new portrait
hanging in the Oval Office.
It used to be, the new portrait, you know, under the first
Trump administration, was AndrewJackson.
(20:12):
The new portrait, you know,under the first Trump
administration, was AndrewJackson, who you know kind of
resonates with with certainpeople in the US.
Now the portrait is James KPolk, and he's an otherwise
unforgettable president, uh, butthe one thing that history
remembers him for is the factthat he basically engaged in the
(20:36):
Mexican war.
Us Mexican war took over a largechunk of Northern Mexico, uh,
including what is now California, uh, arizona, new Mexico, parts
of Colorado and Wyoming partsof Texas.
Uh, and engaged in other uh, uh, uh, engaged in negotiation and
(20:57):
expansion with, uh, with Canada, uh, in order to try to take
over a good chunk of Canada.
And he ended up with, you know,a 49th.
You've heard of the 49thparallel.
Uh, they ended up with the 49thparallel being the border, but
at one point it was 54, 40 orbust.
I don't know if you've heardthat slogan.
(21:18):
Yeah, 54, you know 54 is quitefar north and uh, and you know,
if that had been.
If that had been the case,54-40, most of where the current
Canadian population is would bein the United States.
So you know, I'm just waitingfor Trump to say 54-40 or bust.
Steve Davenport (21:45):
I thought he had the picture of himself for
the mugshot when he was arrested.
Clem Miller (21:51):
That's outside of his office.
Steve Davenport (21:53):
Oh, okay, I hope they didn't take down that
to put up the Polk picture, youknow, I mean, I think they all
established a certain feelingabout the office, you know.
Clem Miller (22:04):
Right, well, maybe they put a red hat on top of
Polk, I don't know so we talkedabout Canada.
Steve Davenport (22:11):
We talked a little bit about French wines.
What do you think about Mexico?
And the person who seems to beno longer an issue is Xi in
China.
I don't know why we're nottalking anymore about China as
one of our major tradingpartners and we focus so much
energy on Canada, when I thoughtthe purpose of all this was for
(22:34):
fentanyl and to prevent thefentanyl from getting into the U
?
S.
Clem Miller (22:39):
So.
So there is a theory, and I'mnot, I'm not a hundred percent
convinced that this is accurate,but there is this theory that
that Trump is trying to createuh spheres of influence, uh,
which is a you know, an oldgeopolitical uh concept, uh,
(23:03):
where you know the U?
S would be, uh, the big powerin the western hemisphere,
certainly in anything north ofpanama, right, but perhaps even
the entire western hemisphere,where you know russia would
control.
You know, you're right, youknow, let's put it, western
(23:24):
eurasia, let's say, includingparts of eastern europe, uh,
where you've got Western Europe,maybe being its own sphere of
influence, eu and UK, and thenyou've got China basically
(23:45):
controlling large parts of Asia.
I know that leaves out parts ofthe world.
I mean, where does Japan fit?
Where does India fit?
Where does Australia fit?
But you know, the generalnotion is that there are these,
you know, spheres of influencewhich are, you know, u and this
kind of corresponds.
(24:18):
I don't know if you remember thebook 1984, or read the book
1984, but there was this conceptin the book 1984 where there
were three great powers Oceania,eurasia and East Asia and that
there was always a struggle, awar between two of those three,
(24:44):
and then, sort of overnight, thewarring parties would change.
So you'd have all thispropaganda of oceania versus
eurasia, and then the next thingyou would hear is that the
fight is actually betweenoceania and east asia, and that
propaganda would changeovernight and people just
(25:04):
couldn't figure it out.
Um, you know the people whowere being uh, hit with the
propaganda, but you know butsomething similar is happening
here Something similar-.
Steve Davenport (25:16):
Can you imagine the current administration read
1984, though, can you?
No, that seems like a stretchof if you're counting on people
reading a book in order to comeup with a strategy.
I think it's more like acartoon would be better.
Like, are there any cartoonsthat he could be basing his
strategy on?
Clem Miller (25:34):
So are we.
I mean, isn't what's going onsort of cartoonish enough?
I mean?
Steve Davenport (25:39):
I'm saying it looks to me like you're looking
at a textbook and a classic inAmerican literature.
For the analogy and I'm saying,should we look towards Flash
Gordon Thor?
Clem Miller (25:52):
I mean the thing about 1984, it was a book about
authoritarianism and you know, Ithink it's.
You know, somebody, ok, isadvising Trump on how to, how to
you know, be aquasi-authoritarian, and I think
(26:13):
one of those elements, or someof those elements, could be
taken from 1984, includingcontrol of the media and this
notion that you should always beinvolved in some kind of
conflict.
Steve Davenport (26:33):
I kind of believe that that's what Russia
is worried about is that if theystop for too long and there was
peace, he would lose a lot ofthat urgency that Putin is
trying to establish of theirneed to reestablish Russia in
its native homeland.
And I think that he would loveto keep the chaos and I think
that Trump admires that thirstfor chaos because it makes him
(26:58):
feel like maybe he will be morestable.
I mean, I think the whole ideaof martial law and the questions
about whether we're beingattacked like to base the
tariffs on Canada on aregulation regarding national
security.
I haven't really thought aboutCanada and more of an
(27:19):
adversarial, and I don't reallythink that their productions of
aluminum are doing anything tohurt our national security.
Right, I could be wrong.
Clem Miller (27:28):
Yeah, I mean.
The question is how dependentare we?
Is US aircraft production onCanadian aluminum, aircraft
production on Canadian aluminum?
And it probably is verydependent because Canada is an
ally, a NATO ally, of the UnitedStates.
Steve Davenport (27:47):
Yeah.
But I guess I'd say well, arewe short airplanes?
Are we short Like?
Is there a national shortage ofmilitary equipment that's made
from aluminum?
I guess maybe we've sent someof those planes over to the
Ukraine and maybe we need moreplanes now.
Maybe there is a bigger needhere.
But I guess I'd like to justtake the last five minutes and
(28:10):
just think about what do peoplewho are investors need to take
from the tariff discussion?
A way that they can use intheir portfolios to try to help
them immunize against this, whatI will call outlandish kind of
behavior, because on one daywe're going to 50% and then
(28:31):
we've dropped that idea by thenext day and if we continue with
that, nobody is going to beable to live with that
volatility.
I think everybody wants to seenobody is going to be able to
live with that volatility.
I think everybody wants to seegovernment, individuals,
companies.
They want to see some kind ofcalming or some kind of
resolution so that we can investfor a longer time horizon
(28:52):
without thinking about well, Ican't buy this company because
it's Mexican and they're goingto be subject to more tariffs
and we're going to not have theability to regulate their
earnings and their ultimaterevenue right.
Clem Miller (29:06):
So, steve, I think this is a period where investors
have to kind of lay low, and bylaying low I mean have
relatively defensive portfol, um, low beta, more cash, um, in my
case, uh, I've got asignificant gold chunk, um.
(29:28):
So I think I think that's whatyou have to do in this
environment, and I know you knowmany of you uh may see, you
know, you might see like threeor four days of an up market in
an otherwise downtrend and youmight think, oh well, we've
reached the bottom.
You might be tempted to thinkthat I'm not so sure about that.
(29:53):
Um, it could be a while before,uh, this chaos goes away.
I mean, if this were an, if Imean if this were a normal
situation of a pullback withoutlike a real, solid explanation,
yeah, I mean you could look atthree or four days as the
beginning of a bounce back.
(30:13):
But we know what's causing thisturmoil, this chaos.
We know what's doing it it'sthe tariffs, the uncertainty
around the tariffs.
Steve Davenport (30:24):
Well, there's also profit-taking in AI.
Clem Miller (30:27):
And, I think, the profit-taking in AI.
Steve Davenport (30:29):
I think AI went up probably too much.
Clem Miller (30:31):
You think that's causing.
Steve Davenport (30:34):
No, I think it's a combination of factors.
I'm just saying that if I was,you know, I think my advice to
investors is to try to stay calmand try to make sure that
they're positioned in a way thatthey could live with a 20 or
30% drought, because I believethat we're still got debt
ceiling issues, we've still gotextension of the tax cuts, we've
(30:56):
still got some pretty majorthings on the table that aren't
being resolved and don't seemlike there is a coherent plan.
It seems like a little bit ofthis, a little bit of that.
We'll try talking about firingIRS agents so that will make it
easier for people to file theirtaxes.
It's just a kind of soup du jourof what's the industry or
(31:20):
country that we're going toattack today, and I find that to
be a little frightening.
So, yes, I think there arereasons to own healthcare, there
are reasons to owncommunication, there are reasons
to own tech, and I think theyjust all need to be kind of
modestly or reasonably allocatedin your portfolios so that
(31:42):
you're not exposed.
I'd say you underweight steel,you underweight aluminum, you
underweight autos, youunderweight industrials, because
they tend to be the biggerticket items that will be
affected by tax.
Clem Miller (31:55):
Yeah, materials industrials consumer,
discretionary I wouldunderweight all those.
Yeah, what?
Industrials?
Consumer discretionary I wouldunderweight all those.
Yeah, what about staples?
Staples I would well seethere's the problem.
Right, there's a problem withstaples.
You have to pick those.
You don't want to pick thosecompanies that are too dependent
on China right.
Steve Davenport (32:17):
I mean Starbucks is the example.
I guess I would say Starbucksfuture depends on growth into
China.
Is the growth into China goingto happen?
Is it not going to happen?
Is the economy in China tooweak for it to happen?
Clem Miller (32:32):
And what about Walmart's dependency on products
from China?
Steve Davenport (32:38):
I kind of wonder where the Walmart and
Target you know both comebecause they're both very, they
are, by definition, importinggoods across the border to
satisfy US demand.
So I kind of think that retail,which you know, if we look at a
client, don't you think there'ssome, there's some people that
(33:00):
say never buy the airlines,never buy autos, because they're
just too much of a cycle,there's too much up and down and
it's not always clear thatthey're tied as closely to the
economy, because there's usuallysome type of a delay or some
type of an offset.
And I kind of think that whenwe look at our portfolios,
(33:23):
energy looks like good valuehere.
I think that energy is going tobenefit, even though it hasn't
yet and we haven't seen anyTrump.
And I think that technology isgoing to benefit Because I think
that we are.
You know, there's one part ofAmerica that even after this
China deep seek, we realizedthat we do have a lot of
companies here and things herethat are going to benefit.
Clem Miller (33:45):
So I think there's a lot to like in technology,
except that right now it'sgetting cheaper.
Well, it's gotten cheaper, noquestion about that.
But it has high beta and somarket goes down.
They tend to go down further.
Steve Davenport (34:04):
I think that I think some of the names that are
in tech, like a cisco or aglassware or you know, corning,
you know, I think some of thenames are pretty low multiples
that weren't part of the ai.
I think it's tech, non-ai thatI would look at right now and
look at some dividend yields.
That's my recommendation.
Clem Miller (34:24):
I've got Corning in my portfolio, yeah.
Steve Davenport (34:28):
And you might consider dividends someday,
right?
So I'm pretty much done withthe tariff conversation because
I think we might have beatenthis.
Done with the tariffconversation because I think we
might have beaten this horse,the Fordney horse.
We might have ridden on toolong.
So I'm going to say I'mrecommending to people that we
(34:53):
try to be thoughtful about whatyou own and try to avoid some of
the things in the tariff spacebecause I think it's going to go
on for a while.
Do you have any final comments?
Clem Miller (35:02):
No, I think we've covered it adequately, and I
don't think this will be thelast time we talk about tariffs,
steve.
Steve Davenport (35:09):
No, I don't think so Well either.
So I think, it's good to lookat where it's come from, look at
where it's going and thinkabout why and how it works today
versus when McKinley and Polkwere running around.
So thanks everybody forlistening.
Please like and share us andlet people know that you're
listening and that we can helpthem with improving their
(35:31):
investment IQ and helping makingtheir lives and their financial
wellness better.
Thank you, everyone.
Hello everyone and welcome to Skeptic's Guide
to Investing.
Here we are, thursday, march13th, and I'm here with Clem
Miller and we're going to talkabout the turmoil among tariffs
and every day it seems like wego from 25 to 50 in tariffs
(00:23):
levels.
And then we talk about aluminum, we talk about steel, we talk
about almost everything as beingsomething that we should put a
tariff on.
And after you know muchsurprise, I learned that Glenn
Miller's family was involved inthe tariffs that were set over
100 years ago, in 1922.
(00:47):
And his relative was namedFordney and it was called
Fordney and another bill and hewas the chairman of the House
Ways and Means, and this billwent after farmers and equipment
and helped cause the depressionin the farming and agricultural
(01:10):
community in the 20s, beforeSmoot-Hawley caused further
depression in other industries.
So we could basically look atthe depression and say it was
related to a Klum's family.
They were a main part ofcreating it.
So, thinking about that as yourinvestment advisor, that's why
(01:32):
you want to listen more to meand less to Clem, because you're
leading us down a path toanother depression.
So besides that, I think itwill be good for Clem to kind of
put things in perspective as amember of a family that has a
deep history around tariffs, tohelp us understand what are
(01:54):
tariffs, why are tariffseffective, why are they not
effective and how do we look atthis turmoil as it affects our
portfolios?
I believe that you know, I'venever been a big believer in
autos.
I've never been a big believerin steel.
They're very tough industries.
They've almost becomecommoditized to some degree.
But I think it would be goodfor us to understand for our own
(02:20):
portfolios where are thereopportunities and where are
people who are in those likelyto go for replacement stocks?
So, clint, do you think you'regoing to cause a depression in
the next two to three years ordo you think it will be longer
term before the impact of yourideas will?
Clem Miller (02:40):
destabilize the US economy.
Destabilize the US economy.
Let me step back, steve, andlet's talk about a little bit
about the history of tariffs andthe time, long ago, when
(03:02):
tariffs actually worked, worked.
Uh, if you have, and you reallyhave to go back to, uh, the
19th century, uh, and even thelate 19th century with, uh, you
know, president Trump's uh hero,uh, president, uh, william
McKinley, and by going back thenyou know you're looking at a
(03:24):
world where there was lessglobal trade.
It was a world before you had alot of trade and commodities
and trade in manufacturers.
You had less in the way ofmanufacturers.
This was a world beforeautomobiles.
(03:45):
It was a world where, you know,you had just established
telecommunications capabilitiesaround the world.
It was a world where you didn'thave container ships, much less
computers, much less computers.
(04:08):
And in that kind of environmentwhere there was a lot of, you
know, trade friction and apreference for domestic goods
and inability.
Really, you know lots ofbarriers, physical barriers, to
being able to conductinternational trade.
You know tariffs actuallyworked very well.
You could put up a tariff andit basically, you know, tipped
(04:30):
preferences into domesticbusinesses.
You know tariffs, you knowlooking back even a little
further, you know, you can lookback to Hamilton right and
Hamilton Secretary of theTreasury.
His idea was to build anindustrial power in the United
(04:52):
States and he used tariffs aspart of his plan for doing that.
He also used government capitalexpenditure to do that as well,
but he looked at tariffs as away to do that.
But today, if you think about,you know, the post-war period,
you think about, you know,global trade expansion.
(05:13):
You think aboutcontainerization.
You think about, you know, theuse of computers to direct trade
from one country to another.
You talk about expansion ofcommodities, everybody being
able to do optimization ofpricing.
(05:35):
You're talking about a worldwhere tariffs are much less
effective in achievingobjectives such as
reindustrialization, much lesseffective in achieving
objectives such asre-industrialization.
So it may be in in, uh, ourpresident's mind that he can do
what william mckinley did, orlike, uh, you know, maybe my, my
(05:58):
uh cousin long lost, uh, unruh,highly, highly distant cousin,
um, joseph fordney tried to doin 1922, um, but you know, today
it's a very different world andall tariffs do is create a lot
(06:18):
of problems and confusion and um, and you know, just a lot of
problems and confusion.
In fact, I would argue that thebiggest problem is for
companies that are trying to dolong-term strategic planning.
And if a company can't,companies sit down.
(06:41):
They do three to five year,seven year strategic plans and
they build these around certainassumptions and scenarios.
And if they can't rely on thosescenarios because you've got
external forces like tariffs, itcauses a lot of havoc and
companies can't operateeffectively in that kind of
(07:03):
uncertain environment.
Steve Davenport (07:06):
You think that what these tariffs will
eventually do is force moreunshoring, Because people will
not want to have locationsacross the border where they'll
have to deal with getting intothe US, that the only real
solution if you're a company isif I want to avoid these tariffs
, I got to build it in the US.
Is that possibly the logic forwhy we pursue this?
Clem Miller (07:32):
Well, you know that's a stated objective,
obviously, but think about itthis way If you've got a
capability already in the UnitedStates with capacity that's
unused in the United States,sure that's possible.
But if you don't have that, youactually need to build capacity
(07:54):
in the United States in orderto have operations in the United
States, and that can take ayear, two years, three years,
five years, 10 years.
It can take an awful long timeto build capacity in the United
States.
I heard about Canada was.
Steve Davenport (08:12):
The aluminum trade is one of the dirtiest
businesses and that's why we'veleft it in Canada.
There's no, there's no smeltingon aluminum capability in the U
?
S, so we don't get it fromCanada.
We can't turn a factory on thatwas shut last week.
It's just that aluminum went along time ago out of the US
(08:32):
because it is such a dirtyprocess.
Clem Miller (08:34):
Right, and 80% of the value added in making
aluminum is actually electricityadded in making aluminum is
actually electricity Becausewhat happens is that you need to
convert the bauxite into anintermediary product called
alumina and alumina into thefinal product of aluminum.
(08:57):
And in order to do all that,you need to have power.
And that's why, over the lastyou know, four or five decades,
a lot of aluminum production hasmoved into regions that have a
lot of energy.
So, for example, the Gulfstates, where obviously you have
(09:20):
a lot of energy, have builtlarge aluminum manufacturing
capability.
It's not just that they wantedto build aluminum plants, it's
that it was cost effective andthey had a comparative advantage
in terms of being able toprovide cheap electricity to
(09:42):
build aluminum, to manufacturealuminum.
Um, but let's you know why youmentioned aluminum?
Let me just mention something.
You know why?
Why is trump focusing onaluminum?
Why is he focusing on steel?
It's because there are laws onthe books that give him
authority to declare a nationalsecurity emergency and allow for
(10:07):
steel and aluminum tariffs.
It's called Section 232.
And Section 232 is a nationalsecurity law and it arose from
this notion that a country thatthe United States, in order to
maintain a defense industrialbase needed to have domestic
(10:29):
steel and aluminum production,you know, for ships and aircraft
, and so that allows thepresident to apply uh, to apply
tariffs under his own authoritywithout having to go to Congress
for specific authorities toapply those.
There's a separate kind ofauthority called Section 301
(10:53):
authority and what that does isthat's more of the kinds of
competitive authorities where ifthe Us finds that uh, that
somebody else is dumping right,that you can have a
countervailing tariff orcountervailing duty uh against
(11:14):
that that others.
That's very narrow and specificand it's for a particular type
of product and you know it's nota sweeping kind of uh of tariff
that covers, you know, entiresectors.
Steve Davenport (11:29):
So couldn't the , the, the courts, strike down
these tariffs, as there is nosecurity at risk with canada?
I mean, if the, if it'saluminum that's coming from
canada isn't we don't have ashortage of it in our military
and there's no, then how do we?
Clem Miller (11:47):
I can't tell you.
I can't tell you what thecourts would do, but I think my
guess would be that you knowthey would allow steel and
aluminum tariffs.
Uh, because they are.
There's a clear law that saysthe president can make a
national security determination.
But on some of these otherthings, you know, if, if, if, if
(12:13):
Trump were to to to have like10% across the board tariffs or
20% across the board tariffs, Ithink those are potentially
subject to court striking themdown, because I don't think, I
don't think necessarily thepresident has the authority to
do that, not, not that I'm awareof, at least, Well, I just saw
something come across the wirethat I found to be very
(12:35):
frightening, which was aproposal for 100 percent tariff
on EU wine.
Steve Davenport (12:41):
Yeah, I don't know where you are with wine,
but that's a lot of wine andthat's a lot of tariff, and we
don't need that kind of effecton our lives.
To be taking my Beaujolais ormy Chianti away from me, that
seems kind of harsh, so I don'tknow.
You can talk all you want aboutaluminum and steel, but once
(13:03):
you touch my wine, I thinkyou're dealing in a very
dangerous slope.
Clem Miller (13:10):
Well, I think, Steve, that that was aimed at
the Democrats who sip Europeanwines and helps protect the
bud-swelling mega folks.
Okay.
Steve Davenport (13:31):
I think it's a little frightening when you talk
about national security forsteel and aluminum, and I think
the only reason to tariff wineis strictly symbolic.
I mean, I think it's all aboutsymbolism is strictly symbolic.
I mean, I think it's all aboutsymbolism, and I guess that's
what I'd ask you is how much ofthese discussions or issues are
just bluster or puffery and howmuch of it is.
(13:54):
These are real things and realproblems and we're going to
straighten out the US tradedeficit through this process.
It's just a bump in the roadtowards a greater place.
Paul Jay 007, md, phd, phd, phd, phd, phd, phd, phd, phd, phd,
phd, phd, phd.
Is it 80 percent puffering innegotiation and 20 percent real?
Clem Miller (14:13):
Well, let me say this I think Trump believes it's
real.
I mean, this has been somethinghe's been harping about for
decades tariffs and I believe, Ithink he believes that high
tariffs work.
They worked for his hero,william McKinley over.
High tariffs work.
Uh, they worked for his hero,uh, william McKinley, uh, over a
(14:35):
hundred years ago, and I thinkhe thinks that you know they're
going to work as they did forMcKinley and not work the way it
did.
You know, uh related to uh,fortney McCumber and uh and
Smoot-Hawley uh, which wereproved to be disasters.
So I do think he believes inthat.
(14:55):
Now here's the problem.
Problem is, is that there areirreconcilable objectives with
regard to tariffs.
On the one hand you've heardthis story I'm sure that if we
have tariffs that are highenough, that it'll help control
(15:15):
the deficit or help to pay fortax cuts or continuation of tax
cuts.
It's just a different revenueform, right?
I'm sure you've heard that one.
Steve Davenport (15:26):
Yeah, it's all taken care of.
Clem Miller (15:28):
Right, but that assumes, of course, that tariffs
are persistent, large andpersistent, but what we've seen
in reality is that Trump is alsousing them, right as, or the
threat of them, in order tobring about various objectives.
(15:49):
You know some, not even havingto do with economics, like, uh,
you know political objectives,objectives regarding, um, you
know, immigration, you knowmigration, um, you know these
are objectives that you know.
If you make, if you do anegotiation and tariffs are part
of it, and you achieve what youwant in the negotiation and
(16:12):
withdraw the tariffs, that's nota persistent tariff that can be
used for deficit reduction.
No, I think that's what I'mtrying to figure out.
Steve Davenport (16:22):
Are we doing this just for spite, to try to
create a more level?
I agree that perhaps the US hasbeen more open than other
markets and therefore has beentaken advantage of for our
openness.
I think ultimately we benefitfrom lower priced goods and
ultimately we don't want some ofthis smelting going on in the
(16:44):
US for the aluminum.
So there's a reason why it'sdone in Canada.
They've got more energyavailable.
They've got, you know, largerland and less issues with
density, whereas if you put analuminum facility in a dense
area of America, it would behorrible for those people who
live there.
(17:06):
They can locate thesefacilities in ways that are
accessible to the energy.
So there is a reason for doingthis and it has nothing to do
with the price.
It has everything to do withthe visuals of what it means if
we're hurting Canada and wherethat's one of their main
(17:27):
products.
I think aluminum has got to beone of the larger items in terms
of the GDP of Canada.
So I see why it's being done.
But my question is is it reallythe economics or is it really
just?
You know, we're playing a gamehere where we keep slapping this
, and that's why I bring up thewine.
(17:49):
I mean obviously France.
One of their main exports iswine and cheese and butter.
And I look at this and say, boy, this is just like attacking
the French, and I'm not sure.
I guess, if we do all thesethings on our own and there is
no coordination, aren't we lesslikely to be successful with
(18:09):
this, and isn't it?
Isn't there just going to besuccessful with this, and isn't
it?
Isn't there just going to be areciprocal tariff put on some of
our goods?
Oh, of course that ultimatelyjust neutralizes the benefit of
the tariff and therefore we endup in a state where now we've
got two more things with largertariffs, and so our level of
tariffing, if tariff affects.
(18:32):
Let's say, the average Americanhas an income of $65,000 and
let's say their expenses are$60,000.
I don't know if that's the wayit works out.
I think in the lower middleincome it might be close to
$65,000 and $65,000.
But how much are these tariffstoday and how much do you think
(18:52):
they'll be tomorrow?
It feels to me like they'reprobably four or five thousand
and we're probably going to goto a place where they might be
six or seven thousand.
But I don't.
I don't see us having a planthat says here's the biggest
injustices and we're going toattack those first and we're
(19:13):
going to do it in a way, andthere just doesn't seem to be a
rationale to which do we dofirst?
And then, how do we make surethat the reciprocal tariffs?
You know, maybe we don't sendthose semis to Canada, we send
those semis to someone else whohas a better record with us in
(19:35):
terms of reciprocal tariffs?
It feels like it's just anotherexample of Canada is the 51st
state and Greenland is going tobe the 52nd, and the Panama
Canal is going to become ownedby the.
Clem Miller (19:51):
US.
I just saw an article today Ithink it might have been in the
journal where somebody pointedout that there's a new portrait
hanging in the Oval Office.
It used to be, the new portrait, you know, under the first
Trump administration, was AndrewJackson.
(20:12):
The new portrait, you know,under the first Trump
administration, was AndrewJackson, who you know kind of
resonates with with certainpeople in the US.
Now the portrait is James KPolk, and he's an otherwise
unforgettable president, uh, butthe one thing that history
remembers him for is the factthat he basically engaged in the
(20:36):
Mexican war.
Us Mexican war took over a largechunk of Northern Mexico, uh,
including what is now California, uh, arizona, new Mexico, parts
of Colorado and Wyoming partsof Texas.
Uh, and engaged in other uh, uh, uh, engaged in negotiation and
(20:57):
expansion with, uh, with Canada, uh, in order to try to take
over a good chunk of Canada.
And he ended up with, you know,a 49th.
You've heard of the 49thparallel.
Uh, they ended up with the 49thparallel being the border, but
at one point it was 54, 40 orbust.
I don't know if you've heardthat slogan.
(21:18):
Yeah, 54, you know 54 is quitefar north and uh, and you know,
if that had been.
If that had been the case,54-40, most of where the current
Canadian population is would bein the United States.
So you know, I'm just waitingfor Trump to say 54-40 or bust.
Steve Davenport (21:45):
I thought he had the picture of himself for
the mugshot when he was arrested.
Clem Miller (21:51):
That's outside of his office.
Steve Davenport (21:53):
Oh, okay, I hope they didn't take down that
to put up the Polk picture, youknow, I mean, I think they all
established a certain feelingabout the office, you know.
Clem Miller (22:04):
Right, well, maybe they put a red hat on top of
Polk, I don't know so we talkedabout Canada.
Steve Davenport (22:11):
We talked a little bit about French wines.
What do you think about Mexico?
And the person who seems to beno longer an issue is Xi in
China.
I don't know why we're nottalking anymore about China as
one of our major tradingpartners and we focus so much
energy on Canada, when I thoughtthe purpose of all this was for
(22:34):
fentanyl and to prevent thefentanyl from getting into the U
?
S.
Clem Miller (22:39):
So.
So there is a theory, and I'mnot, I'm not a hundred percent
convinced that this is accurate,but there is this theory that
that Trump is trying to createuh spheres of influence, uh,
which is a you know, an oldgeopolitical uh concept, uh,
(23:03):
where you know the U?
S would be, uh, the big powerin the western hemisphere,
certainly in anything north ofpanama, right, but perhaps even
the entire western hemisphere,where you know russia would
control.
You know, you're right, youknow, let's put it, western
(23:24):
eurasia, let's say, includingparts of eastern europe, uh,
where you've got Western Europe,maybe being its own sphere of
influence, eu and UK, and thenyou've got China basically
(23:45):
controlling large parts of Asia.
I know that leaves out parts ofthe world.
I mean, where does Japan fit?
Where does India fit?
Where does Australia fit?
But you know, the generalnotion is that there are these,
you know, spheres of influencewhich are, you know, u and this
kind of corresponds.
(24:18):
I don't know if you remember thebook 1984, or read the book
1984, but there was this conceptin the book 1984 where there
were three great powers Oceania,eurasia and East Asia and that
there was always a struggle, awar between two of those three,
(24:44):
and then, sort of overnight, thewarring parties would change.
So you'd have all thispropaganda of oceania versus
eurasia, and then the next thingyou would hear is that the
fight is actually betweenoceania and east asia, and that
propaganda would changeovernight and people just
(25:04):
couldn't figure it out.
Um, you know the people whowere being uh, hit with the
propaganda, but you know butsomething similar is happening
here Something similar-.
Steve Davenport (25:16):
Can you imagine the current administration read
1984, though, can you?
No, that seems like a stretchof if you're counting on people
reading a book in order to comeup with a strategy.
I think it's more like acartoon would be better.
Like, are there any cartoonsthat he could be basing his
strategy on?
Clem Miller (25:34):
So are we.
I mean, isn't what's going onsort of cartoonish enough?
I mean?
Steve Davenport (25:39):
I'm saying it looks to me like you're looking
at a textbook and a classic inAmerican literature.
For the analogy and I'm saying,should we look towards Flash
Gordon Thor?
Clem Miller (25:52):
I mean the thing about 1984, it was a book about
authoritarianism and you know, Ithink it's.
You know, somebody, ok, isadvising Trump on how to, how to
you know, be aquasi-authoritarian, and I think
(26:13):
one of those elements, or someof those elements, could be
taken from 1984, includingcontrol of the media and this
notion that you should always beinvolved in some kind of
conflict.
Steve Davenport (26:33):
I kind of believe that that's what Russia
is worried about is that if theystop for too long and there was
peace, he would lose a lot ofthat urgency that Putin is
trying to establish of theirneed to reestablish Russia in
its native homeland.
And I think that he would loveto keep the chaos and I think
that Trump admires that thirstfor chaos because it makes him
(26:58):
feel like maybe he will be morestable.
I mean, I think the whole ideaof martial law and the questions
about whether we're beingattacked like to base the
tariffs on Canada on aregulation regarding national
security.
I haven't really thought aboutCanada and more of an
(27:19):
adversarial, and I don't reallythink that their productions of
aluminum are doing anything tohurt our national security.
Right, I could be wrong.
Clem Miller (27:28):
Yeah, I mean.
The question is how dependentare we?
Is US aircraft production onCanadian aluminum, aircraft
production on Canadian aluminum?
And it probably is verydependent because Canada is an
ally, a NATO ally, of the UnitedStates.
Steve Davenport (27:47):
Yeah.
But I guess I'd say well, arewe short airplanes?
Are we short Like?
Is there a national shortage ofmilitary equipment that's made
from aluminum?
I guess maybe we've sent someof those planes over to the
Ukraine and maybe we need moreplanes now.
Maybe there is a bigger needhere.
But I guess I'd like to justtake the last five minutes and
(28:10):
just think about what do peoplewho are investors need to take
from the tariff discussion?
A way that they can use intheir portfolios to try to help
them immunize against this, whatI will call outlandish kind of
behavior, because on one daywe're going to 50% and then
(28:31):
we've dropped that idea by thenext day and if we continue with
that, nobody is going to beable to live with that
volatility.
I think everybody wants to seenobody is going to be able to
live with that volatility.
I think everybody wants to seegovernment, individuals,
companies.
They want to see some kind ofcalming or some kind of
resolution so that we can investfor a longer time horizon
(28:52):
without thinking about well, Ican't buy this company because
it's Mexican and they're goingto be subject to more tariffs
and we're going to not have theability to regulate their
earnings and their ultimaterevenue right.
Clem Miller (29:06):
So, steve, I think this is a period where investors
have to kind of lay low, and bylaying low I mean have
relatively defensive portfol, um, low beta, more cash, um, in my
case, uh, I've got asignificant gold chunk, um.
(29:28):
So I think I think that's whatyou have to do in this
environment, and I know you knowmany of you uh may see, you
know, you might see like threeor four days of an up market in
an otherwise downtrend and youmight think, oh well, we've
reached the bottom.
You might be tempted to thinkthat I'm not so sure about that.
(29:53):
Um, it could be a while before,uh, this chaos goes away.
I mean, if this were an, if Imean if this were a normal
situation of a pullback withoutlike a real, solid explanation,
yeah, I mean you could look atthree or four days as the
beginning of a bounce back.
(30:13):
But we know what's causing thisturmoil, this chaos.
We know what's doing it it'sthe tariffs, the uncertainty
around the tariffs.
Steve Davenport (30:24):
Well, there's also profit-taking in AI.
Clem Miller (30:27):
And, I think, the profit-taking in AI.
Steve Davenport (30:29):
I think AI went up probably too much.
Clem Miller (30:31):
You think that's causing.
Steve Davenport (30:34):
No, I think it's a combination of factors.
I'm just saying that if I was,you know, I think my advice to
investors is to try to stay calmand try to make sure that
they're positioned in a way thatthey could live with a 20 or
30% drought, because I believethat we're still got debt
ceiling issues, we've still gotextension of the tax cuts, we've
(30:56):
still got some pretty majorthings on the table that aren't
being resolved and don't seemlike there is a coherent plan.
It seems like a little bit ofthis, a little bit of that.
We'll try talking about firingIRS agents so that will make it
easier for people to file theirtaxes.
It's just a kind of soup du jourof what's the industry or
(31:20):
country that we're going toattack today, and I find that to
be a little frightening.
So, yes, I think there arereasons to own healthcare, there
are reasons to owncommunication, there are reasons
to own tech, and I think theyjust all need to be kind of
modestly or reasonably allocatedin your portfolios so that
(31:42):
you're not exposed.
I'd say you underweight steel,you underweight aluminum, you
underweight autos, youunderweight industrials, because
they tend to be the biggerticket items that will be
affected by tax.
Clem Miller (31:55):
Yeah, materials industrials consumer,
discretionary I wouldunderweight all those.
Yeah, what?
Industrials?
Consumer discretionary I wouldunderweight all those.
Yeah, what about staples?
Staples I would well seethere's the problem.
Right, there's a problem withstaples.
You have to pick those.
You don't want to pick thosecompanies that are too dependent
on China right.
Steve Davenport (32:17):
I mean Starbucks is the example.
I guess I would say Starbucksfuture depends on growth into
China.
Is the growth into China goingto happen?
Is it not going to happen?
Is the economy in China tooweak for it to happen?
Clem Miller (32:32):
And what about Walmart's dependency on products
from China?
Steve Davenport (32:38):
I kind of wonder where the Walmart and
Target you know both comebecause they're both very, they
are, by definition, importinggoods across the border to
satisfy US demand.
So I kind of think that retail,which you know, if we look at a
client, don't you think there'ssome, there's some people that
(33:00):
say never buy the airlines,never buy autos, because they're
just too much of a cycle,there's too much up and down and
it's not always clear thatthey're tied as closely to the
economy, because there's usuallysome type of a delay or some
type of an offset.
And I kind of think that whenwe look at our portfolios,
(33:23):
energy looks like good valuehere.
I think that energy is going tobenefit, even though it hasn't
yet and we haven't seen anyTrump.
And I think that technology isgoing to benefit Because I think
that we are.
You know, there's one part ofAmerica that even after this
China deep seek, we realizedthat we do have a lot of
companies here and things herethat are going to benefit.
Clem Miller (33:45):
So I think there's a lot to like in technology,
except that right now it'sgetting cheaper.
Well, it's gotten cheaper, noquestion about that.
But it has high beta and somarket goes down.
They tend to go down further.
Steve Davenport (34:04):
I think that I think some of the names that are
in tech, like a cisco or aglassware or you know, corning,
you know, I think some of thenames are pretty low multiples
that weren't part of the ai.
I think it's tech, non-ai thatI would look at right now and
look at some dividend yields.
That's my recommendation.
Clem Miller (34:24):
I've got Corning in my portfolio, yeah.
Steve Davenport (34:28):
And you might consider dividends someday,
right?
So I'm pretty much done withthe tariff conversation because
I think we might have beatenthis.
Done with the tariffconversation because I think we
might have beaten this horse,the Fordney horse.
We might have ridden on toolong.
So I'm going to say I'mrecommending to people that we
(34:53):
try to be thoughtful about whatyou own and try to avoid some of
the things in the tariff spacebecause I think it's going to go
on for a while.
Do you have any final comments?
Clem Miller (35:02):
No, I think we've covered it adequately, and I
don't think this will be thelast time we talk about tariffs,
steve.
Steve Davenport (35:09):
No, I don't think so Well either.
So I think, it's good to lookat where it's come from, look at
where it's going and thinkabout why and how it works today
versus when McKinley and Polkwere running around.
So thanks everybody forlistening.
Please like and share us andlet people know that you're
listening and that we can helpthem with improving their
(35:31):
investment IQ and helping makingtheir lives and their financial
wellness better.
Thank you, everyone.
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