Owen Schrum: Managing Inflation and Risk in Volatile Markets

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welcome to fun with annuities with your

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host me stan the annuity man america's

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annuity agent can annuities be fun can

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contractual guarantees be fun

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absolutely they can find out the brutal

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facts about annuities with no sales

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pitches or high pressure nonsense just

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the brutal and factual annuity truth

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which is all you need to hear

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let's have some fun with annuities and

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let's have that fun start right now

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[Music]

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welcome to fun with annuities i'm your

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host stan the annuity man america's

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annuity agent yes you're right i am

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licensed in all 50 states i'm glad you

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asked welcome to everybody on the major

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podcast platforms and all you aggressive

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people watching us on the fun with

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annuities youtube

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channel today

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is a special day because we have a

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repeat guest because he's a smart dude

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he's a personal friend he's taught me

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everything i have ever known about the

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stock market way back in the day that's

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how much we

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we we know each other welcome back to

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fun with annuities the the honorable

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owen shrum

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it is so good to be back here with you

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to be back with your

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listeners we've gotten good feedback

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from the previous previews yeah yeah

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well that's because you've been right

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you know i remember what you we the

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first one we did and you were my

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inaugural celebrity celebrity guest on

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the phone with the news when we made the

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idea

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had the idea to okay let's bring on

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smart people and i said i know one and

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you were the first one and um

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i remember i was getting so much heat

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about bitcoin at 60 000

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people were hammering us yelling at us

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emailing us and

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owen give the people an update on

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bitcoin from 60 000 to 20 21 000.

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exactly so

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and at the time of this taping we're

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typically a couple weeks out so who

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knows where it's going to be at this

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point in time let's just start there

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because you know the pioneers take all

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the arrows on as we always say

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where do you think it's going

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bitcoin now that bitcoin but crypto in

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general

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crypto okay

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exact crypto

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engine you know an interesting thing is

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i've noticed and people are talking

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about it a little bit and stay in the

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annuity man it fits right in with what

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we talked about

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it was supposed to be at the new

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currency the new digital currency that

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people alternative asset owen it was an

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alternative asset well here's what

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happened market collapsed what happened

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to bitcoin went with it did to

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lockstep almost

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if you put the cards put the charts

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right beside each other they went up

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together they went down together only

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bitcoin did so more more fold

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much faster rate of decline my point is

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it's a risk asset like we talked about

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it's not stored it's not stored value

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it's not the new currency it's not

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the new monetary

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policy that countries are going to use

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it is a

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risk asset with no implied value that is

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tracking just like other risk assets

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and with each passing day there's like

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the the onions being peeled back on bad

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stories

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lack of liquidity out of supposed crypto

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banks you know elon musk selling all of

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it

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um

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institutions i read the other day really

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getting out of the crypto space and i

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read the other day and this is the one

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that disturbs me is over 50

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of crypto owners have owned the crypt

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whatever crypto they purchased for less

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than a year

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these are newbies in in here these are

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people that are hoping and dreaming and

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buying the lottery ticket don't you

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think you know stan i saw and by the way

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excuse me these numbers are not going to

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be exact but the point is it's close

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enough so the point is made they tracked

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crypto ownership

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institutions

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typical investors institutional

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investors small ownership they do have

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some eight nine percent ten percent

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uh

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a number like 55 percent of new

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investors under four at you age 40

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own crypto so it is a

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a new asset the same people i fear are

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buying

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crypto that are buying

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game stock

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yeah exactly all of these high

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speculative mean stocks that we've

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talked about

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and it's going to end poorly for them

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and they're going to get a bad taste in

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their mouth and they're going to avoid

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what is indeed a great creator of wealth

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as we know for for generations of people

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because they got burned on crypto

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they're not going to invest and it's

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going to it's going to end poorly yeah i

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was talking to paul merriman which is a

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good friend of mine

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sorry i had to grab something so for the

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people in the podcast on the youtube i

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kind of did a lean to the right

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um and he was talking about people um

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that are invested in in crypto have more

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faith in crypto than they do the s p 500

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and i was like really wow that's insane

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that's crazy that just that just means

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we're not doing any type of financial

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education in the school system

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that's a terrifying statistic yeah if

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that's true let's just say a portion of

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that's true i mean let's just say just a

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few people believe that that is

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absolutely nuts

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um and i do think that you know the

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warren buffets of the world

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they just think it's going to zero do i

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think it's going to zero i don't know

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who knows do you know nobody knows but i

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do think that watching it from a

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resistance level standpoint and what you

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taught me about watching those things

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you can see it struggling you can see

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the struggles right here

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and uh it's going to test i think it's

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going to test

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even further down and test the uh

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the heart and soul and the guts and the

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you know of people that want to hang in

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for the long term so well i think it's

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safe to say to your listeners and to you

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involved it's a risk asset but for those

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who are looking at

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stable coins and the ones that are

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for a money market deposit for their

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first home yeah stop

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sleep yeah please stop just for your own

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good stop

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no i i i totally agree with you um let's

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pivot to the markets you know we're

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talking to owen shrum if uh we'll have

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his site on

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our site you know he's gonna have a

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permanent page it's from pwschrumpw.com

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if you want to um you know get a free

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portfolio review and and and talk to him

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schedule time with him he is

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recognized as one of the top personal

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you know

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fee only money managers on the planet

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so if you if you want a high level brain

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working on your non-annuity assets

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this is the guy because um

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you know

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there's a lot of there's a lot of

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charlatans out there and as owen and i

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always joke we have cowboy boots older

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than most financial advisors

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they they haven't seen down markets

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they haven't seen inflation they haven't

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seen down markets they haven't they

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really haven't seen them they really

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haven't seen volatility

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no

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no so

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you know i was talking to someone the

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other day and i'm not going to mention

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the big the big firm it's one of the the

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big firms

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um that that is a big mutual fund firm

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and they have a private wealth area and

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i said

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and they told me what the person said it

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was the typical buy and hold and this

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you know historical returns and all that

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stuff and i said to him i said how old's

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that person

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just wondering he said i think he's 28 i

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said 28

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all right

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i mean you know um i'm not putting that

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down and i was 28 at one point in time

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um you were too oh i wouldn't have

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messed with you in your 28 no heck no

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no no absolutely not and vice versa by

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the way uh it's it's just that you have

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to

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i'm not putting these people down but

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you have to factor in who you're talking

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to yes and and the fact that their young

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skulls full of mush and they're being

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fed a line to say

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and you have to filter through that i

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also think too oh in that um

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people just need to be aware of risk i

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think that's what i love about what you

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do which is

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that's your primary focus is de-risking

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the portfolio for growth

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am i right about that it is de-risking

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it to the person who's investing the

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money and risk as you know you're on the

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front lines for a long time risk means

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different things to different people

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sure

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we've got people out there that say risk

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low risk is non-nasdaq tech stocks

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we've got other people that say high

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risk is a five-year cd instead of a

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one-year cd i bring that up only because

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risk is very specific to the person that

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we're talking to so our first and main

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objective is to get to the bottom of

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their what they're trying to do enough

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so we can customize this portfolio to

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get the returns they want the goals they

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want without taking undue risk that they

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don't want

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unfortunately

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as and i speak to this as an industry

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it's it's a fact

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our definition of risk is a lot

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different from the people we're talking

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to there's somewhat of a disconnect and

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what we think is normal when we have the

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first bear market people will look at

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their statements and they just can't

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believe that their investments could go

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down 15

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so

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communication

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and making sure you're in line with the

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risks that the client wants to take and

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then hopefully deliver the returns and

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deliver that risk management

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so again the answer is

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it's it's person to person family to

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family

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by the way that's owen shrum and one of

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the things that owen has beside his name

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other than

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graduated from the university of north

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carolina god's country is he is a

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certified investment management analyst

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which is a sema cima

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there's not many of those dudes out

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there you've got to go

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to wharton and get i mean it's

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impossible and of course he aced

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everything and he's got it but the point

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is

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this is high level stuff and and i know

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he sounds like your typical north

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carolinian and maybe he is right but but

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uh you know there's there's some like

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there's some definite iq there when you

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talk about risk

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being personal do you agree that

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inflation and p the way people look at

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inflation should be personal as well

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inflation every

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ask anyone what's during election year

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what's the big rally in crime we don't

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want to raise taxes

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we want low taxes

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inflation is the most insidious tax

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there is

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it's a tax on every american this year

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and you ask people going to the grocery

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store they're not going to be surprised

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at what i say inflation is running

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almost double digits yeah increase in

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one year

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how much would people be screaming if

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their taxes went up ten percent

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but i also tell people to

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turn off the television and what people

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are talking about with inflation because

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if your kids are out of the house you're

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not buying milk and taking them to dance

11:43
class and practice you're not driving as

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much

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it's personal

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it's personal and also too if you have

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enough assets

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you're watching inflation like the

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romans watch people fight in the

11:55
coliseum you're up there eating grapes

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so don't when people start going well

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inflation how do we solve for that i'm

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like

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what are you talking about you know stop

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being dramatic um you know inflation of

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always hits the lower end

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people unfortunately

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it is much harder it is but i'm tired of

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people and most of the people that are

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listening to this podcast are people

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that

12:18
are our investors are pretty well off

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are trying to get better

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understand markets

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please stop

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please stop trying to find things that

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are going to solve for inflation it just

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it's it's not there and if anyone tells

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you they have it

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run get up walk out there's no packaged

12:38
product that does it

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the key however to inflation it and to

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the point when i say it's a tax that

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affects people's wealth

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unfortunately the best way to be

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inflation is to have assets

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and people with assets their assets are

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inflated as well and there are certain

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asset classes certain things you can

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invest in on a general basis that do

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much better during inflation than other

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things which suffer during inflation

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you want to own real assets there's a

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lot of real assets dividend-paying

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stocks are asking real assets stocks are

13:13
real assets right

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there's everyone thinks the stock market

13:17
is

13:18
wall street in the stock market no it's

13:20
not it's a business on the corner it's

13:22
correct plant making something it's a

13:24
company writing software stocks are real

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assets

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um commodities are real assets real

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estate is real assets

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inflation

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real assets do better during

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inflationary times financial assets

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not so much so they tend to do poorly

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and don't keep up with inflation

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financial assets bonds

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cds

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mortgage holding mortgages anything that

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is a as a financial asset

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just tends to perform poorly and

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underperform during inflationary times

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let's talk about bonds oh and shrum

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rising interest rate world and

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unfortunately a lot of people think

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bonds are safe

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um there's more bonds in stocks and it's

14:09
it can't you know valuations can go up

14:11
and down what are you telling people

14:13
here about bonds

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in the world that we're in

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bonds unfo first off let me answer that

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backwards we've had the longest bull run

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in history and bonds bonds have grown up

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in value since 1981.

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only a bull market that's gone up that

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long that bull market is over and it

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might be over for the foreseeable

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foreseeable future

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interest rates sitting at the pendant

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pre-pandemic everyone was .2 yeah in the

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pandemic they lowered it to darn near

14:44
zero which way rate's going to go now in

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the same period of time because i was

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going to talk about inflation

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uh milton friedman the great economy

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said inflation period period what causes

14:54
inflation forget the economic mumbo

14:57
jumbo it's monetary supply money m2 did

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you know we created 10

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trillion dollars plus of money supply in

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the past two years

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over 10 trillion did we run out of toner

15:11
owen is there a ton is there is there a

15:14
investment play on toner cartridges

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unfortunately not if they did they'd be

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selling in argentina

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um

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but i'll give you a point normally we

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increase

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monetary supply in this country and i

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know i'm in the weeds but know this

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because it'll it'll it'll make you

15:30
understand everything better

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the country we increase monetary supply

15:36
two and a half three and a half percent

15:37
every year that's what they do what the

15:39
fed does how much inflation run every

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year normally two and a half three and a

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half percent

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we just increased money supply 40

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in two years

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you wonder why we're having inflation we

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put and that money is going through

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people is in people's pockets it's not

15:58
in banks and insurance companies

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that money went into people's pockets

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and unfortunately it takes a long time

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for that to work its way through the

16:08
system so inflation isn't transitory is

16:12
our oh come on miss yelling said it was

16:15
not transitory and

16:17
inflation from two years ago

16:21
that started is going to take 18 more

16:24
months to work its way through the

16:25
economy because of the way they do the

16:27
reporting real estate is a lagging

16:29
indicator yeah we're starting to report

16:32
on real estate sales that happen during

16:34
the peak of inflation so inflation isn't

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going away

16:40
also

16:41
the job numbers are lagging as well they

16:43
always they're out here touting job

16:44
numbers i mean that's a lagging

16:46
indicator

16:47
what are you i mean

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you're smart guy

16:50
i mean obviously you're my friend so

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you're smart right and you got your mba

16:54
from uh

16:56
you got your mba you even went to

16:57
hampton sydney college for people that

17:00
understand where that is and

17:02
we're gonna have to discuss why you have

17:04
a chemistry

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degree from hampton sydney and how that

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applies

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in fact let's stop there because i'll

17:10
hold the question you're you're you have

17:12
a chemistry major

17:14
1980 as you know without going to

17:17
history poor boy from north carolina

17:19
was the president from 1976 to 80

17:22
unemployment's 10 percent i have 12

17:24
we're bought

17:26
we're stealing coupons from calendars so

17:28
we can get two for one pizza hut to live

17:29
on for the week

17:31
no money

17:33
art uh art his not to knock it art

17:35
history and i took that class by the way

17:38
and i made it wasn't an option i wanted

17:40
to take a degree that i could get a job

17:42
when i got out of college and that job

17:44
was with one of the best employers on

17:46
the planet and who i kept in business

17:48
for many years until i stopped and that

17:50
employer was well i i work for nalco

17:53
chemicals no that's not what i'm talking

17:55
about but our biggest client that i work

17:57
for was anheuser-busch there you go and

18:00
when i stopped drinking owen their stock

18:02
went down

18:07
in fact they sold out to a brazilian

18:09
company ambit oh my god i know i know

18:12
but i was always like man you were the

18:14
chemist for budweiser that's like that's

18:16
like

18:17
that's phenomenal you're a chemist but i

18:20
think that you being a chemistry major

18:24
separates you

18:25
in the when you manage people's money i

18:27
will

18:28
i'm going to go out on a limb owen

18:30
there's got to be less than five of you

18:32
chemistry majors out there managing

18:35
money at a high level am i right has

18:37
anybody ever watched cnbc in the

18:38
audience have you i know you have i'm

18:41
i'm raising my hand just because i laugh

18:43
i i laugh at the how they promote crypto

18:46
as the crypto ads are coming up that's

18:48
all

18:49
funny guy in the morning joe curran

18:52
yeah yeah is he a chemistry major

18:54
chemistry major from mit

18:57
oh my then biochemistry major masters of

19:01
mit and went to work for merrill lynch

19:03
oh my god what a sound sounds eerily

19:05
familiar owen yes it does unbelievable

19:09
well that's um

19:10
that's interesting i wanted to i got i

19:12
got sidetracked with your with your

19:15
background and your resume because it's

19:17
fascinating and he plays guitar

19:19
and

19:20
and owen played football

19:23
for hampton sydney

19:25
and i'm i'm not sure what i'm getting

19:27
ready to say is racist or not if it is

19:29
stop me okay

19:31
because it does it's not meant to be

19:33
racist but

19:34
before the knees

19:36
gave out on you a few years back you

19:38
were a fast white guy correct

19:40
yeah that that played defensive back for

19:42
the sole reason that i could run fast

19:45
those days are gone those days are gone

19:47
festus i i can tell you that i could i

19:50
could unfortunately pull my pants up and

19:52
show you the two scars on both my knees

19:54
from new replacements

19:57
well what i want you to return to on a

19:59
daily basis is wearing the headband that

20:02
you used to sport a long time ago

20:04
because i think you can throw your logo

20:06
on you know i'm about logos i'm wearing

20:07
a hat you can wear a headband i mean

20:09
that that would work

20:11
all right let's pivot back

20:12
they're redefining recession here owen i

20:15
mean i was under the assumption that the

20:18
recession definition was pretty locked

20:20
in

20:21
for the last

20:23
100 years

20:25
the administration do

20:27
this is a rhetorical question do they

20:29
think we're this dumb

20:31
no

20:32
i

20:33
cannot believe i look i gotta be

20:35
agnostic politically here but i can't of

20:37
course of course

20:39
in fact of honesty i gotta i gotta come

20:41
forward the biden administration is

20:44
right on this one issue what is that

20:47
that they're trying to say that the

20:49
definition of in recession of two

20:52
negative down quarters of gdp is not

20:55
indeed the definition of a recession and

20:57
in this one case they're right

21:00
it

21:01
what's the asterisk to that though well

21:03
it's a combination of a lot of

21:07
indicators

21:08
in fact the negative gdp is sort of as

21:11
we talked about a trailing definition i

21:13
was pulling something up i i actually

21:16
saw this don't don't show it because 99

21:19
of our people are on podcast i

21:21
understand i'm just going to read it

21:23
it's it's it a lot of indicators

21:26
aggregate real economic activity federal

21:29
statistics real personal income non-farm

21:32
payroll unemployment is measured by

21:34
household survey

21:37
unemployment

21:38
non-farm unemployment gdp so there's

21:42
about eight to ten things that make up

21:45
whether a recession is in place so to

21:48
save it

21:49
two negative orders of gdp

21:53
by the way which routinely they revise

21:56
those

21:57
every other quarter aren't they

21:58
splitting hairs here aren't they trying

22:00
to thread the needle come on man i'm

22:02
gonna put it this way you're not having

22:04
a recession when you're having i mean

22:07
five uh economic activity industrial

22:09
production was up 5.5 percent average

22:12
new jobs was 450 000 that's not

22:16
recession that's not a recession

22:18
we are in my opinion going to have a

22:21
recession it's just not one right now

22:24
the recession is going to come the

22:26
federal reserve never i cannot think

22:29
i've done this since 1983 and studied it

22:31
for 10 years before that i've never

22:33
remembered a time the federal reserve

22:35
ever was able to orchestrate what they

22:38
define as the soft landing where they

22:41
raise interest rates just to slow the

22:43
economy down and they don't push it into

22:45
recession in reality it's not that easy

22:48
and they never do it so they're going to

22:50
raise interest rates they raised them

22:52
yesterday two days ago points 75 basis

22:54
points 0.75 they're going to do it again

22:57
they're probably going to go too far and

22:59
then sometime in 2023 2024 they will

23:03
push us into what i think will be a

23:06
rather mild recession but i do think

23:09
we're going to see a recession i just

23:12
personally don't think it's now

23:15
shameless plug right here owen

23:17
i want the people right now listening

23:19
and viewing to i just want you to think

23:21
about who you're dealing with from a

23:22
money management standpoint and i want

23:25
you to think

23:26
and analyze

23:28
are they as smart as what you just said

23:30
i mean do they sound like owen do they

23:32
talk like owen

23:34
are they as smart as if they are fine

23:36
but i'm going to tell you i need you to

23:38
think i mean he's he's a good friend yes

23:40
i'm plugging he's a but he's fantastic

23:43
the point is

23:45
you need to have an advisor in the

23:48
non-annuity space

23:50
that you can have this type of

23:52
conversation that owen and i are having

23:55
a non-salesy high iq

23:58
pragmatic approach to your specific

24:01
situation okay i'm off your soapbox now

24:03
owen but i you know i get mad sometimes

24:06
when people go well in my advisors i'm

24:08
like

24:09
then get a better advisor you know it's

24:12
like you go to the doctor saying my arm

24:13
hurts when i move it like this the guy

24:15
goes don't move it like that i mean it's

24:17
the same thing if you don't

24:19
feel comfortable that your advisor has

24:22
the iq level you need find another

24:24
advisor okay maybe it's not owen but at

24:27
least

24:29
have the conversation with them ask

24:30
yourself could you have this

24:31
conversation that i'm having with owen

24:33
because

24:34
this is the conversation you should be

24:36
having with your advisor which is about

24:39
the markets etc etc

24:42
pivoting just a little bit

24:43
okay

24:45
our friend vladimir putin

24:49
and

24:51
the ukraine issue

24:54
you know the biden administration is is

24:56
is saying that having more effect than

24:58
most people believe are they right

25:01
what is your take on this

25:03
ongoing

25:04
war that doesn't seem to end and now the

25:06
media has lost interest so now we're not

25:08
hearing about it anymore

25:10
i have

25:11
again this is one person's opinion sure

25:15
but i follow a lot of other people so i

25:18
this is this is less my opinion than my

25:20
hacker that

25:22
gathering information from people

25:24
smarter than i am

25:26
and it's

25:27
and it's to the point you make already

25:29
france and germany are bailing

25:31
they're they're going to have no heat

25:33
they're going to have no natural gas for

25:35
the winter because they they ditched all

25:37
their other energy i know

25:39
i know their soul for the russian north

25:42
pipeline

25:43
germany and france are failing uh who

25:46
knows what the current biden

25:47
administration is going to do

25:49
and

25:51
russia is going to take a lot that i

25:53
have a concern that we're just gonna

25:56
the longer it drags out the less

25:58
interest this country's gonna take in it

26:00
and russia is there and um let's face it

26:04
he doesn't have to worry about

26:06
a populist population kicking him out of

26:08
office no he's he can they can sit there

26:12
and

26:13
as we've seen

26:15
he can keep manufacturing

26:18
military goods and starve the country

26:21
but i just don't see him stopping the

26:24
bombing of ukraine and at the very least

26:28
he will russia will end up

26:31
taking the

26:32
eastern

26:34
seaboard coastline grain areas of

26:37
ukraine before it's over

26:40
yeah i think the ripple effect is just

26:42
starting with all of this um

26:45
and i know and you know when you send

26:47
billions of dollars over there there's

26:48
people that are taking lots of that and

26:50
just going to the swiss alps

26:52
i just haven't been invited to those

26:54
parties yet but i mean you and i both

26:56
know there's some shenanigans going on

26:57
with that anytime you send that stuff

27:00
the the military industrial complex i

27:03
sound like a cable news

27:04
person but the point is me and you both

27:07
know there's some agendas here that

27:10
don't line up

27:12
but you know another thing about this is

27:16
maybe the most important thing to come

27:18
out of this other than

27:21
germany and france's ability to support

27:23
nato on their borders

27:25
is they've allowed

27:26
sweden now in nato

27:29
yeah

27:29
yes

27:31
yeah

27:32
so maybe there will be a re-definite

27:34
readout i mean let's face it nato has

27:36
been

27:37
in my opinion more of a diplomatic

27:40
uh entity than a defense entity for

27:43
decades

27:44
and maybe this will be redefining

27:47
the nato coalition that may be something

27:49
that's interesting that comes out of

27:51
this

27:52
no longer is germany and france the

27:54
centers of nato

28:00
it's always been weird times i mean

28:02
every every everyone says well this is

28:04
really strange and really chaotic it's

28:05
always weird and chaotic

28:08
um

28:08
but i think what scares me the most is

28:10
that we really haven't had what what i

28:12
call it an event in a while

28:14
um and that would shoot this this whole

28:17
thing that would throw this whole thing

28:18
into chaos if there was an event

28:21
a terrorist event terrorist event right

28:23
those type of things something really

28:25
bizarre that's unplanned

28:28
and i know people out there screaming at

28:29
the at the speakers going what about all

28:32
these shootings in the country yeah

28:33
those are horrific but i'm talking about

28:35
911

28:36
yeah those type of things that just that

28:38
just sends the country in a spiral i

28:41
guess covet could be thrown as that as

28:43
well

28:44
but i think as a country we got to come

28:46
to the conclusion that

28:48
we're going to have the cold flu and

28:49
covet season from here on in i mean

28:51
there it's going to we do we just added

28:53
one i've had covet three times

28:56
um

28:57
all different all different all

28:58
different variants i'm just getting off

29:00
the third one the third one was weirder

29:02
because it was more of a cough

29:04
than anything the first one two

29:06
were

29:07
the first one was worse than the than

29:08
the second one etc but

29:10
i just think it's going to be part of

29:12
our life

29:14
going forward

29:15
let's segue that into something that

29:17
really may tie into people's investments

29:20
a little bit because i and

29:22
which is what i know people really would

29:24
like to hear about but

29:26
follows what the vane you're speaking

29:29
is

29:30
for a long time

29:32
19

29:33
late 80s 90s

29:36
globalism has been the economic force of

29:38
the century of the past

29:41
50 years

29:42
the growth in china and emerging markets

29:45
in south korea and india and brazil

29:49
global

29:50
jobs from the united states shipping

29:53
over to

29:54
vietnam to asia i mean globalism is all

29:58
you've heard about

30:00
half the decisions that affect this

30:02
country are made in davos switzerland by

30:04
the globalists

30:05
yeah it is

30:07
there's a lot of people saying that

30:09
there is now being a retrenchment of

30:12
globalism

30:14
and we're all becoming more

30:15
nationalistic

30:17
because of the response to the pandemic

30:20
because of what's happened in the

30:22
ukraine people don't trust the

30:24
globalists

30:25
because of what's happening and we've

30:27
talked about inflation one of the major

30:29
causes of

30:31
inflation has been disruptions of supply

30:34
side chains right and i hate to tell you

30:37
the reason there's been disruption of

30:38
supply chains is because we get it all

30:41
from asia that wouldn't have been a

30:43
problem for domestically produced goods

30:45
right and you're starting to see more we

30:48
just passed a giant bill in congress to

30:50
make all our chips what for 400 billion

30:53
dollars yeah start making all our chips

30:56
no longer in china and asia but in the

30:58
united states again maybe we will see

31:01
the world become smaller i'm not saying

31:04
it's a good thing or a bad thing but it

31:06
will affect your investments because if

31:09
you're in a pension plan and you're

31:10
buying target state funds or you're

31:13
buying and you're in a lot of the

31:15
annuities people buy that have the

31:16
predefined investment portfolio yeah the

31:19
variables

31:20
look in them i'm going to bet you 40 of

31:23
the equity portfolio is international

31:27
and

31:28
i believe that there may be some

31:30
disruption of

31:33
of this global economic theme that has

31:36
happened and maybe there's opportunities

31:39
right here in the united states what

31:41
does that mean for a portfolio are you

31:43
less global with the portfolio are you

31:45
more targeted if you're going to do it

31:49
um that's a really good question of

31:51
course it is because i asked it for

31:53
god's sake

31:54
well

31:55
prior

31:56
if you look if you look even two years

31:59
ago

32:01
mcdonald's earnings were down 12 percent

32:05
took a lot of companies took big hits

32:07
because they pulled out of russia right

32:09
uh starbucks and some computer companies

32:12
and even apple are retrenching out of

32:14
china a little bit

32:16
they're moving manufacturing facilities

32:18
out of china

32:19
so

32:20
maybe the theme is

32:23
is the united states going to

32:25
reindustrialize

32:26
are we going to produce more important

32:29
strategic goods such as technology in

32:32
the united states and is there an

32:34
opportunity for domestic investing

32:36
versus international investing

32:39
i think every investor and every manager

32:41
needs to decide is your allegation

32:44
standard

32:46
global mix for a diversified portfolio

32:48
and pension plans 55 u.s 45

32:52
the rest of the world

32:55
is that should that be 70 30

32:57
i think it's decisions people have to

32:59
make

33:00
look let's stop this looking backwards

33:03
this this fund has a great track record

33:05
going back

33:06
back testing numbers and in annuities or

33:09
invest it's a joke what's important is

33:11
forward thinking correct

33:13
maybe we need to make some forward

33:16
thinking decisions and re-evaluate asset

33:18
allocations both from a risk and from a

33:20
return point of view and

33:22
maybe a domestic

33:25
a heavier portfolio heavily weighted and

33:27
domestic might make more sense from both

33:30
the safety point of view and a return

33:31
point of view don't know but it

33:33
certainly begs discussion

33:36
oh and as you know there's a group

33:38
called pearl jam and they're a very good

33:40
rock and roll group and they have a song

33:42
called jeremy

33:44
and

33:45
it says you know one of the lines in it

33:46
is jeremy spoke in class today go pull

33:49
it up for the people that don't know

33:50
that song but the jeremy i want you to

33:52
talk about is the jeremy that you follow

33:55
yes

33:56
can you

33:57
can you can you tell the people about

33:59
that jeremy and what he's saying right

34:01
now because i know that you um

34:04
interact with him and and you follow him

34:06
and he's pretty insightful what is

34:08
jeremy saying and tell the people who

34:09
jeremy is well let me back up dr single

34:12
dr jeremy siegel is one of the great

34:15
economists today

34:17
um

34:18
a major influence

34:20
in the world economically more

34:22
importantly and i'm not going to give

34:24
him the name but people said the wizard

34:25
of wall street he wrote the definitive

34:28
uh

34:29
treaty on the history of returns that's

34:32
used in every academic environment

34:34
uh stocks for the long run

34:37
uh but do you think he's ever been

34:38
introduced with pearl jam like i just

34:40
did

34:41
you know what i went to his house a

34:44
high-rise pound i mean that's that's a

34:46
pretty good

34:47
segue you gotta admit i brought that one

34:49
you do you you know and he would love it

34:52
he had a eight when i went to see

34:54
ten-year-old son who had guitars

34:56
including pearl jam he loves eddie

34:58
better okay so so so okay so he would he

35:02
would be like yes stan you're on it

35:04
brother that's what he'd probably say

35:05
but in a very probably more high brow

35:07
way so keep going about jeremy so what

35:09
did he say as you remember in your day

35:12
he was the one in 1999 who stood upside

35:15
down on his head and said anybody buying

35:17
nasdaq right now instead of selling

35:19
nasdaq there is no such thing as the

35:21
valuations that these stocks hold and

35:24
it's a bubble

35:25
most did not listen to them

35:27
last march 31st i think was the date of

35:30
2020 he got on a call with all of us

35:33
that have are fortunate enough to have

35:35
access to him

35:36
and said you've got to get on the phone

35:38
and tell your clients whatever they do

35:41
do not sell your stocks

35:43
because i've never seen anything like

35:46
the monetary supply being money supply

35:48
hitting this country right now it

35:50
exceeds world war ii levels

35:53
they're flooding the market and

35:54
eventually these stocks will buy back

35:56
it's not for any reason other the amount

35:58
of liquidity in the market tell your

36:00
people not to sell

36:02
and that literally was one week within

36:04
the bottom of the market as we know it

36:07
bounced off of 34 and finished up the

36:10
year

36:10
11

36:12
dr siegel then during that same call

36:14
said we are going to have inflation

36:15
inflation will rise 20 to 25 in the next

36:18
four years

36:20
and he said it then and he's beat the

36:22
drum he's also said the bull market and

36:24
stocks are over which i never finished

36:26
that stocks about fixed income the bull

36:28
market and bon excuse me and bonds are

36:31
over rates are rising and will rise the

36:33
next three to five years

36:35
you will depending upon the maturity of

36:38
your bonds you will lose weight lose

36:41
money in bonds because remember

36:44
bonds wait a minute you just said lose

36:46
weight lose weight no i know it's in

36:49
your mind because you're so skinny i

36:50
think you threw that in there

36:51
subliminally i'm looking at

36:55
you just threw that in there just to

36:56
just

36:57
just to throw it in everyone's face that

36:59
you've lost all this weight and you're

37:01
felt which is one of my favorite words

37:03
all right keep going sorry and okay good

37:05
i want to go back luke back to people

37:07
who buying stocks with with maturities

37:10
three four most maturities in a

37:11
portfolio or ten years

37:13
are gonna lose eight to ten percent of

37:15
their money and in bonds

37:18
he has beaten that drum continues to do

37:20
so he says right now

37:24
interesting that he he's when stocks are

37:27
off 24 he says we're within four to five

37:30
percent of the low if we've not already

37:32
reached the low i believe there'll be a

37:34
rally in

37:36
and we'll have a recession next year

37:38
and gave us some interesting data on

37:40
midterm elections i'd love to share

37:42
before we hang up please do

37:45
interest interesting interesting he

37:47
believes that people investing money at

37:50
these levels particularly in some of the

37:53
lower see

37:54
the amazon netflix pay pals tesla's

38:00
uh of the world may be down 70

38:03
there are a lot of blue chip stock and

38:05
they were trading at 30 40 50 times

38:07
earnings and just unsupportable levels

38:10
you're right

38:11
but as stocks have sold off so have the

38:15
more reasonable value stocks with good

38:17
dividends and they're trading at 10 11

38:19
and 12 times earnings stand

38:21
because people deploying money in

38:23
inflationary times in these stocks

38:26
historically historically will have

38:29
really attractive returns if they have a

38:32
long and i'm not trying to say the buy

38:34
and hold thing but let's face it the old

38:36
saying is buy low sell high well right

38:38
now it's lower than it was

38:40
six months ago right and when you're

38:42
looking at some

38:44
reasonable stocks at 13 times earnings

38:47
historically that's a good entry point

38:49
and you may you probably will have good

38:51
returns that's what he's saying he also

38:53
is saying inflation is going to continue

38:55
to run high for 18 months

38:58
only because it's in the system and has

39:00
to work its way through the system but

39:02
the federal reserve has to be careful

39:04
not to go too far

39:07
what i like about what you do is is

39:09
you're data driven yes we are you're i

39:12
mean it's and i can summarize that with

39:15
facts not emotions

39:17
and

39:18
i think people need to realize that

39:20
it needs to be data-driven everything in

39:23
life is data-driven whether you know it

39:24
or not the advertisements that come into

39:26
your phone or data driven

39:28
the the the food that's on the shelf in

39:30
certain spaces is data-driven

39:33
everything's data-driven so if that's

39:35
the case

39:36
then why aren't you more data-driven

39:39
with your investments and why aren't you

39:41
with a data driven

39:43
um investment advisor money manager guru

39:46
master of the universe because

39:49
there's no emotions with with this yeah

39:51
if you're you know if you want to do

39:53
emotions then go go be a trader and good

39:55
luck

39:56
okay

39:57
but

39:58
i think what you need to take away from

39:59
this is this is a fact based

40:03
business

40:05
investing it's facts institutions don't

40:07
make

40:08
investments based on emotions they make

40:10
but they make investments based on facts

40:14
and they have to have all the facts not

40:16
some of the facts there's no emotion in

40:18
that

40:19
so i think that's what i really like

40:20
about what you're doing what's what's

40:22
worrying you right now owen trump

40:26
other than carolina basketball stop for

40:28
a second that's not worrying me okay

40:30
okay so you have recovered from them

40:32
losing in the national championship that

40:34
is not worrying me what worry me right

40:36
now

40:37
is

40:39
um

40:40
people are still holding too many bonds

40:41
in their portfolio and they don't

40:43
understand the risks they don't even

40:45
know that they have them i'm not being

40:47
investment specific but the most popular

40:50
investment in 401k plans as which there

40:52
are billions out there

40:55
target date funds

40:57
and without going into the details if

40:59
people want explanation i'll be glad to

41:01
talk to them the target date funds

41:03
balance stocks and bonds depending upon

41:06
your retirement but the pertinent word

41:08
is they have bonds and usually the

41:09
maturities are intermediate to long-term

41:11
bonds sure without even knowing it 40 to

41:14
60 percent of their portfolio could be

41:16
in longer-term bonds which one they're

41:19
not going to get any return most likely

41:21
they're going to get a negative return

41:23
for that percentage that's in long-term

41:25
bonds and i don't want this americans

41:27
are wonderful hard-working people i

41:29
don't want them to see them lose money

41:31
in the 401k plan when it's so obvious

41:35
so that's number one number two i am

41:37
concerned the federal reserve will go

41:39
too far and force us into a deeper

41:42
recession than we are going we would

41:44
normally have

41:45
i believe we're in good shape as long as

41:48
the federal reserve doesn't go

41:51
too aggressively they've been pretty

41:53
aggressive and i'm looking at the money

41:55
supply and it the faucet's been turned

41:57
off yep it's it's it's been turned off

42:01
the money that's working its way through

42:03
will run out eventually and they've just

42:06
got to be careful those are the two

42:08
things that are worrying me

42:11
do you i mean it's hard for me to

42:13
believe that the fed at the time of this

42:14
taping they just raised rates and then

42:17
their i guess the next scheduled

42:20
meeting is in september it's hard for me

42:22
to believe they're going to raise right

42:23
before the election what's your take not

42:26
saying that none of us know

42:29
what's your insight

42:31
it was hard to believe by most people in

42:33
this business particularly the economist

42:35
and particularly the good ones

42:37
that

42:38
they did not raise rates

42:41
back when the pan they had flooded the

42:43
market agreed that money and

42:46
obviously we were starting to fly again

42:49
we had vaccines people were getting

42:51
vaccines

42:53
the economy was reopening and they

42:55
continued ppp loans they continue

42:58
unemployment loans they continue

43:00
economic stimulus they put another four

43:02
billion dollars in as people were going

43:05
back to work i know they sh and janet

43:08
yellen said herself we should have

43:11
not we should have stopped sooner and

43:13
started raising rates

43:15
i would have thought they went were then

43:18
one it's group things understand it's

43:20
not just one person it's sure

43:22
and the political spectrum of that board

43:24
is varied i believe

43:28
it was disbelief that they didn't stop

43:30
earlier so

43:31
yeah i can believe they would go too far

43:34
boards of directors don't

43:36
make great decisions sometimes because

43:39
they all have to please everybody

43:42
that is true

43:43
what makes you optimistic what do you

43:44
what's the glass half full

43:46
when you other than your life and your

43:48
friendship with me music in general but

43:51
from the market standpoint

43:53
i rarely stop counting my blessings for

43:55
those things

43:57
but what yeah what what makes you

43:58
optimistic here from

44:00
from the investors standpoint

44:02
i think you've laid out a lot of it but

44:05
but tie that up in a nice little bow on

44:07
what makes you optimistic

44:10
first and foremost with outstanding

44:11
without sounding corny

44:13
capitalism

44:15
free markets is the greatest system

44:17
that's created unbelievable wealth for

44:20
hundreds of hundred years

44:23
and it's still unfettered and there's

44:26
still wealth to be made and they're

44:27
still hard-working people

44:30
and i'll give you an example there's a

44:32
lot of stocks out there that people

44:33
loved

44:35
as you understand from compliance i

44:37
can't name them in this of course not no

44:40
you all know who they are some really

44:41
great stocks that you loved

44:44
and they're 40 30 and 40 percent

44:47
cheaper than they were two years ago and

44:49
now people hate them

44:52
so my point is there are some really

44:54
good companies at really fair valuations

44:59
that if people just avoid the emotional

45:01
construct of of becoming one of the herd

45:04
and panicking from all the news

45:07
and

45:08
evaluate rebalance their portfolio as

45:11
they need perhaps even dollar cost

45:14
average into lower priced assets

45:18
if it's commensurate with their

45:20
objectives look if you're taking if

45:21
you're retired you're taking income out

45:23
of your portfolio that's a different

45:25
scenario sure totally totally just from

45:28
an investment construct

45:31
valuations are cheap we believe this

45:33
recession look let's let me back up stan

45:36
to answer this in another way we had the

45:38
worst pandemic since 1917

45:42
it was global entire economy shut down

45:47
many people thought we're going to shut

45:48
down economies for years not months

45:52
the the pharmaceutical companies the

45:54
science community the health companies

45:56
rallied around came up with a vaccine in

45:59
six months yeah saved hundreds of

46:01
millions of people's lives and we're

46:03
back to work in 24 months yeah now that

46:06
does not minimize the sadness of

46:08
millions of people sure i'm sorry but it

46:10
was real it's miraculous what we've done

46:13
during that period of time it's true

46:16
and now we're going back

46:18
try going to an airport but you know you

46:20
asked me before about a wee in a

46:21
recession

46:22
go get on go to atlanta hartsville

46:26
airport yeah every plane i'm on

46:30
you know of course oh and i'm in first

46:32
class you understand that right yes

46:34
because i it's not because i'm wanting

46:36
to spend money i'm tall

46:38
i'm i'm not vertically challenged like

46:39
you are i'm sick i sat in a plane with

46:41
you when the guy in front

46:43
led his seat back all the way

46:46
that's what yeah that's what i couldn't

46:47
afford first class i got a couple more

46:49
questions for you as we tie this thing

46:51
up obviously i always have fun with you

46:53
and

46:54
and and and even though you're a really

46:56
good friend one of my best friends in

46:57
the world i i always enjoy and look

46:59
forward to what you have to say about

47:01
investing because it's always

47:02
enlightening to me because

47:04
you just know this stuff backwards and

47:06
forwards tell me about what your

47:07
feelings are about consumer debt here on

47:09
because we're revisiting those 2008

47:12
levels that you know well we're never

47:14
going to do that again we're there again

47:16
with consumer debt what are you thinking

47:18
about that right now it worries me a lot

47:21
for two reasons

47:23
the people taking on the debt or the

47:25
people least able to afford it no doubt

47:28
and it's furthering the system we have

47:30
between the have and have not since the

47:32
society and that's not the history of

47:34
this country something like the consumer

47:36
debt is what is making that gap wider

47:39
and that bothers me

47:40
secondly guess which rates are going to

47:42
go up faster

47:44
if not the meat the banks paying you on

47:46
your cds and savings accounts it's what

47:49
they're charging you on loans and that

47:51
rises exponentially the more risky those

47:54
loans are the payday loans the credit

47:57
card loans yeah

47:58
mortgages i mean stan did use some of

48:01
these some of these uh payday loans the

48:04
interest rates are in the hundreds and

48:06
from the thousands it's ugly man

48:09
it's ugly i mean that's a that's an ugly

48:11
business really and credit card rates

48:15
lucky if you see 24 you might be looking

48:17
at 30 percent

48:20
but we're back we're back there again

48:23
and it worries me for it worries me for

48:25
the people it worries me for the country

48:28
it does we both have been you know we

48:30
both come from no money and we both have

48:32
been in those situations where we didn't

48:33
have money we've been there yes it's a

48:35
hard thing man and you do what you got

48:37
to do

48:38
right and so the problem is there's a

48:40
lot of people having to do what they got

48:42
to do

48:43
to survive it um whether they're on

48:46
their own or have a family one last

48:48
question is always the last question

48:50
with my celebrity guest like you

48:52
there's no pressure whatsoever owen

48:54
because

48:55
you know it's just it's just one

48:56
question but it's the mic drop moment

48:58
and i'm gonna i'm gonna give you the

49:00
floor

49:01
once again to leave the people

49:04
with something when they turn the

49:05
podcast off they go you know what

49:07
that guy owen trump left me with such a

49:10
nugget of wisdom that it's going to

49:12
change my life so no pressure whatsoever

49:14
with that i'll count you down

49:17
three two one go

49:19
i want everyone out there that has a

49:21
401k plan to do a deep dive into do they

49:25
have any bonds in their 401k plan and

49:27
what are the maturities of those bonds

49:30
period

49:32
that's owen trump personal friend

49:34
financial guru all-around good guy

49:37
mediocre guitar player mediocre

49:40
but he means well

49:42
and i want to thank every single person

49:44
that's listening to

49:45
us on all major podcast platforms and

49:47
joining us on the fun with annuities

49:49
youtube channel i will see you next week

49:57
thanks for listening to fun with

49:59
annuities please hit the subscribe

50:01
button and make sure to go to my site at

50:03
the

50:04
annuityman.com where you can run your

50:06
own spea dia and q lat quotes and see a

50:09
live feed of the best micah fix rates in

50:12
the country and even get indexed and

50:14
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50:16
you can also sign up for my six annuity

50:19
owner's manual books and i'll ship them

50:21
for free and under no obligation i also

50:24
encourage you to schedule a one-on-one

50:26
call with me stan the annuity man so we

50:29
can have a full discussion of your

50:31
specific situation it will be the best

50:34
brutally factual and truthful advice you

50:37
will ever get and that's one guarantee

50:39
you should definitely take advantage of

50:41
so join me next time for the number one

50:43
annuity podcast on the planet fun

50:47
with annuities

50:51
[Music]

51:02
you