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we've been privileged to get to spend so many mornings with you Muhammad the market does look like it's moving higher on the back of science you've talked about how this is going to be solved by science ultimately how do you think the market and investors should think about this kind of news so first it's very good news remember there's three steps to the health solution one is treating the illness better the second is containing the spread of the virus and the third is immunity and on the first one we have better news that's really good news it's also good that we have a roadmap to how we're going to reopen the economy and we needed Andrew after this week's data retail sales industrial production jobless claims housing they were all pretty scary so it's a good thing that we have it going forward we have a road map we have progress on a critical health issue and one does have to consolidate these games to maintain what you're seeing in the marketplace today but Muhammad you know over the last week or two you've been a bit skeptical I think of the rise in the stock market you've questioned whether we're going to see some some some negative down drafts in a meaningful way the question is can you bet against two things the government and all this government support that's being thrown at this and science because if you're not in the market effectively when we finally do get announcements about things like that you may miss that that's the optimistic view yeah that's the wrong question is how you bet I have been saying bet up in quality and if you look over the last few weeks it is the companies with a better balance sheet it is a companies that live mostly in virtual space that have done better the Nasdaq has outperformed the S&P and has certainly outperform emerging markets so the up in quality trade has worked so far so the question is how do you stay engaged in the market not whether you shouldn't get stay engage in the markets the reason why it's I have a poll I pause is because of the level of valuations the SMP is about about 20 the p/e ratios about 20 last year's earnings now a few companies impact in health care some very essential staple consumer staples are gonna have similar or better earnings but most will not not this year not next year so it's a valuation issue that that sort of holds me back but the relative value trade the up in quality trade I like it all day long okay all right we like we like your quality you fall back on that lot Mohammed but so regrets I've had a few I think it's a song I mean three weeks ago really we're gonna grind lower we're up 30% since then you know you don't wish maybe you just said yeah buy quality but don't buy quality buy anything up 30% no regrets whatsoever of staying staying a little bit bearish too long none whatsoever no of course as regrets and and I could have never imagined and it is controversial drill I could have never imagined the Fed going in and buying high-yield bonds and there's there's a pushback against was that a good idea to get exposed to more credit with more default risk did I predict that no I did not and I don't actually I don't think they should have done it but I've certainly didn't predicted and had I predicted it I would have been more positive on buying the market as a whole because the market has immediately embraced that the next step in the capital structure and it's not a big one once you cross into investment grade and two high-yield the next step into equities doesn't look that big is the Fed buying equities and that now is in the marketplace ask you separately Muhammad about the price of oil because we're now in the $18 range here on a barrel in a normal world the the equity market the everybody that would be the conversation and there would be panic in the streets you wouldn't normally imagine can you explain the disconnect yeah there's two very interesting dynamics going on one is that demand is falling and the China number was particularly influential because trying is a high energy intensity country so when GDP contracts by 6.8% that's meaningful for energy but the second one is look at the difference between WTI and Brent it is WTI that's getting hit very hard and that's about storage anger it has a particular there's nowhere for the oil to go so the demand gets hit also on on the inventory side so it is a big deal I think the marketplace is looking through this a few weeks ago that would have disrupted the market but the market is seeing a few things that is embracing some of which I also embrace we are seeing advances in medical issues as so many brains are allocated to that we are seeing a roadmap for we opening I embrace these two things but they're also seeing a very strong Fed put that's what the one I don't embrace you
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