Episode Transcript
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Speaker 1 (00:05):
He calls it the secular bull market that no one
believes the boy has ever been one. For the agents.
Originally led by the mag seven names, it is broadened out.
Already strong before the election, the advance has gotten stronger after.
It's been so strong, in fact, but this week's guest
raised his year end s and P five hundred target.
I'm fifty six hundred to a street high sixty one
(00:25):
hundred in September.
Speaker 2 (00:27):
Some scoff. Yet earlier this week we closed above six thousand.
Speaker 1 (00:30):
For the first time. So what's next for markets? Let's
find out from Brian Belski, chief investment strategist at BMO
Capital Markets. Brian, Welcome to the show.
Speaker 3 (00:40):
Hey, Mike, thanks for having us. We really appreciate the support.
Speaker 2 (00:43):
Yeah, I appreciate you for your flexibility here.
Speaker 1 (00:45):
You know, I'm trying not to be too salty that
you raised that SMP forecast a few days after the
Money Show event in Toronto rather than reveal it on stage,
but clearly it's been a great call.
Speaker 2 (00:54):
What prompted that move and what are you seeing in
markets now?
Speaker 3 (00:57):
Yeah? Thanks Mike. Also, we're going to publish our twenty
twenty five forecasts for both canad the United States next week.
I'm not gonna tell you anything about that either right now.
Speaker 2 (01:06):
So ha ha.
Speaker 3 (01:09):
Listen. If we're one thing, it's consistent. We have a
process and a discipline on how we look at things.
I'm gonna speak a little Canadian there, even though I'm not,
and we are fundamental by nature. We continue to believe
that the stock market is the market of stocks. We
continue to believe that the US stock market enter the
twenty five year secular bowl market in two thousand and nine.
(01:32):
We are bullishness has been resolute. We are not being stubborn.
We are stuck in how we look at things from
a discipline, fundamental basis. The majority of our competitors and
the Patriots have missed this market move. We're not going
to disparage them. We actually have a lot of empathy
for them, especially considering that the majority of economists, let alone,
(01:54):
and we're not an economists but an investment strategists, have
never bought a stock to save their life.
Speaker 2 (01:58):
Number one, but two.
Speaker 3 (02:00):
They've been so focused on macro macro macro and ekonikon
nikon econ and quant quant quant quant quant, they've forgotten
the esse of investing, which how I started this dietribe.
The stock market is the market of stocks. So the
bag seven and the technology move was really based on
an over sold creation that happened in twenty twenty two,
(02:23):
which made people rush into tech stocks in the beginning
of twenty twenty three. Then you had this massive performance
and a fomo trade feared missing out. Then you had
the AI trade come in. But our call all along
has been and again we've been resolutely consistent on this
(02:45):
that twenty twenty four was going to be the year
where we started to see broadening out. We've in fact
seeing that. Our primary theme for twenty twenty two twenty four,
I'm sorry, was own a little bit of everything, and
that's actually worked. We have the very good fortune MIC
of running eight separately manage accounts, two products for asset
management that are actively traded, and two synthetic ETFs, so
(03:09):
to the tune of ten billion dollars, and our average
out performance of those products is right around over the
last twelve months, excuse me, is right around seven d
and twenty five basis points.
Speaker 2 (03:20):
So why is that.
Speaker 3 (03:23):
We don't get shook out of the market. We've never
been accused of being cute by the way in our careers,
and instead of trying to time the market, this year,
we've learned that you want to be an investor and
everything that we've kind of encapsulated our almost thirty five
years in the business, MIC have come to fruition this year.
You own stocks for the wrong long run, you buy
(03:44):
good companies, you stick with your discipline, and you turn
off all the noise, especially regarding the election.
Speaker 1 (03:53):
I'm glad you brought that up. I'm gonna get the
election in a minute. But it's kind of interesting. You
shared a great anecdote in Toronto about meeting Warren Buffet
many years ag and he remember that conversation years later.
I bring that up because it seems like more of
a Warren Buffett kind of market, right, I mean, you've
got value stocks, small caps, financial things like that that
are thriving.
Speaker 3 (04:10):
Right, Yeah, I think that's where we're headed. You know,
we think twenty twenty four, given all everything that's gone
on and obviously the amazing performance, which would never begrudge performance,
really kind of to normal that, doctor, acters we're heading
(04:40):
into kind of more normalized trading. And normalized trading means
means you have distributive performance across sectors and asset classes
and styles and all this kind of stuff, and you
don't have these outside moves to in either direction. And
so Warren Buffett obviously it's actually had a lot of
he put on them this year for moving some things around.
(05:03):
You got to remember a gentleman like him has gone
through the wars and is much longer term than our
average institutional client, which is our day job talking to
the institutional clients around the world that have quite frankly
the attention spans of NATS and are trying to chase
the market with Joe. By the way, they missed the
(05:25):
majority of twenty twenty three, for sure, they missed it
and have been kind of let's say, taken back about
trying to re engage in twenty twenty four.
Speaker 1 (05:37):
Yeah, let me ask you about the election, and again
it's on everybody's mind.
Speaker 2 (05:43):
You know.
Speaker 1 (05:44):
Some of the concern out there is if we get
this red wave versus the divided government scenario, how do
you think that plays into markets?
Speaker 2 (05:50):
Are there any concerns with that?
Speaker 3 (05:52):
No, We've been pretty consistent in our twelve years, eight months,
three weeks, four days at demo every every four years,
we've tried off this report, Mike. We talked about election
perform and actually we've proven the block actually is not better.
And sometimes Republicans do better, sometimes Democrats do better. You
(06:13):
also have to layer in what they're taking over all
this kind of stuff. I think investors get politics wait
too much credit. And now the fear and rhetoric with
respect to Trump's tariffs and and all of this is
just nothing but noise. Again, turn off your turn off
your TV. Control what you can control. Trump is the negotiator.
(06:36):
We already know that Trump two point oh if they
like to call it, is gonna be dramatically different than
Trump to one point zher. We've already seen that in
the week or so since the election, in terms of
how he's handling these new positions.
Speaker 2 (06:49):
And remember too.
Speaker 3 (06:50):
That that Trump has a has has a mandate. Now
he won the popular vote, there's a landslide in terms
of of the electoral college. There's a massive distrust of
the press on both sides with respect to how this
(07:10):
was perceived coming into the election, with respect to the
polls and everything. Now you've got a situation where the
federal government did what it did post COVID by the way,
in terms of spending, and there's issues with respect to deficits.
He's got to figure out how to get out of
the deficit situation. And he's got he's now officially employed,
(07:36):
if not the probably the smartest person in the world
to try to figure that out. Elon Musk. So, I
think that this is Trump's opportunity finally to do what
he wanted to do in twenty sixteen for that first
term in terms of really looking at the at the government,
Mike as a business, and I think about I think
(07:59):
about as investors, my and how I love that that restructure.
Wall Street loves restructuring. Wall Street loves companies that buy
back stock paid dividends and cut costs. And so guess
what the American governments can try to do five x
(08:20):
stock paid.
Speaker 2 (08:21):
Dividends and cut costs.
Speaker 3 (08:23):
And so I think it's gonna be a really interesting
case study in terms of how we can get this done,
especially the next couple of years.
Speaker 2 (08:32):
Okay, I do have to ask about interest rates.
Speaker 1 (08:34):
I mean, obviously, you know, I think part of your
thesis for raising your target was the FED pivot cutting cycle.
Speaker 2 (08:40):
You know, what are your thoughts here? You know, with
the FED.
Speaker 1 (08:43):
Are they going to have to take into account some
of the Trump policies and maybe do a little less
cutting than people were thinking back in October or September.
Speaker 3 (08:51):
Well, at the FED, the FED transleft the station and
the changing off what that that's that been modeled in.
We for one, have been always very skeptical FED Fund's
futures and so and we're also excessively skeptical of the
(09:13):
fear tactics of of people saying that Trump's going to
get get rid of the FED. I think the.
Speaker 2 (09:20):
Fed it's probably not going to cut as much.
Speaker 3 (09:23):
And if we can average a four percent ten youre
treasury of the next couple years, that could be very
good for stocks.
Speaker 1 (09:28):
You know, I know you like to focus on micro
and stock picking versus macros.
Speaker 2 (09:31):
I definitely want to pivot away from that.
Speaker 1 (09:33):
I mean, you're going to be talking about stock sector
some ideas for next year, kind of without giving me
the whole kit and camudle away. What kinds of groups
are you looking at here? Any names that look particularly
attractive at this point? Well, our theme all along has
been on a little bit of everything. I think investors
are still very underweight small mid cap I think people
(09:53):
are underweight value. I think dividing growth is going to
be a good place to be.
Speaker 3 (09:56):
I think the big cap technology companies, whether or not,
have some magnificent seven. The top biggest companies in technology
are not the new consumer stables mic so there, let's
call them the nifty fifty, but really kind of the
terrific ten. But I do think you've maintained positions there
quite frankly, and pick your pick one or two that
you want to overweight, and otherwise you want to be
(10:17):
kind of neutral those big stocks and really be adding
in the other tier names that we've been consistently talking
about through the year, whether or not it's Oracle or Polunteer,
and continue to look at other consumer names like Lulu
at Costco, in Marriott and and still like the airlines
(10:37):
like Delta and United, I mean the in the defense
contractors like Lockeed Martin and some of the other industrials
like Honeywell. I think those are going to be the
names that I think will continue to do well of
the next several years.
Speaker 2 (10:50):
Okay, last question.
Speaker 1 (10:51):
Obviously we're talking because we're fortunate you're gonna be joining
us for the twenty four Money Show. Master Symposium in
Sarasota this December. Any sneaky you can give it what
in tid who listen to your session are going.
Speaker 2 (11:01):
To hear about there?
Speaker 3 (11:03):
Well, not so quindentally amount. Actually on my way to
Sarasota right now to do another event for FEMO, So
blessed and fortunately to be able to do that. We're
going to talk about the continuation the twenty five year
Secular Bowl, and we're going to talk about how it
is to maintain your consistency and kind of turn off
the noise. And so we're going to be a lot
more stock focused because I think a lot of people
(11:26):
don't quite frankully understand what stock picking is. And we
hear a lot about stock picking, but I think there's
been so much emphasis on trying to make the big
market fall from investors, from portfolio managers instead of just
kind of focusing more on bottoms of fundamental investing.
Speaker 1 (11:45):
Well, great, Brian, look, thank you so much for your
insights on viewers. If you're watching this you want to
learn more from Brian. He is going to be at
the Money Show Master's Posiums in Sarasota December fifth to fifth,
fifth to seventh at the highest regency, Sara Sota. You
find more in the link in the video description. Hell Bryan,
safe travels and thanks for joining me. Thanks so much.
Take care. We'll have more interviews for you every week,
(12:06):
so I encourage you to subscribe to The Money Master's
podcast so you can stay up to date with the
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at money Show.
Speaker 2 (12:21):
Thanks for listening, See you next time.