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in the new bull market typically the categories of stocks not every single stock but the categories they got hit the hardest bounced the most for about 8 to 13 months so you know I get these client questions I'm going to Rattle off some client questions and some short answers first why do you wave your hands around so much well you know just easier for me I just am who I am uh some people that seems to really bother uh you know what you do if you want to understand what I'm saying and my waving my hands around really bothers you just don't look just listen it's easy don't get all that F the next one which similarly applies is do you dye your hair hair I mean how can you be as old as you are a subog genarian and you're not bald and and and you don't need gray hair well actually if you're really close to me and you got good eyesight you can see I do have some gray hairs uh but the fact of the matter is and I'm just going to say this we're all different and I got really good hair jeans I got them from my father my father when he was in eight in his 80s was almost completely black hair by the time he died at 96 he was still 2third black hair only about one3 GR and uh so you know I I got my own deficiencies genetically but uh but the here is one of them uh one question is recently I I've said that the bank lending costs are nearly zero in America they're averaging 33 pie of points uh regardless of the interest rate hikes of the Central Bank and where can I find evidence of that information the easiest way to do it is to look online and just do a search for average savings account rates in America and that'll take you close it's the easiest one as long as Banks and credit card companies keep lending won't then inflation continue uh and why would it stop under these conditions well first I've never said it would stop in fact the idiots at the central banks excuse me the people at the central banks I didn't mean to be redundant the people at the central banks have never said they mean to get inflation to stop they mean to get inflation to go to about 2% now regardless of what they end up doing don't end up doing mean to do don't mean to do what ends up actually happening nobody's talking about stopping inflation just having the rate of it decrease I will say and I've said this many times before the rate of increase over the course of a number of months from now is going to be a feature of what input costs to our manufacturing sectors were some number of months ago like maybe about six seven of them varies little over time those costs have been coming down therefore inflation will irregularly come down ahead because the input costs through a process of manufacturing and service lead to the output costs the ongoing lending keeps the econ eony from getting too bad now in America The Lending rates growth rates have been very high they're moderating now and rolling over a little but still high the fact is there's two more things to think about in this one overseas they're lower still positive but lower so what really matters is the global rate and then these numbers are not inflation adjusted so you have to take the inflation out of the total lending number because what's really important is the net lending on top of the inflation and that number right now on a global basis is running about 3% what am I saying what I'm saying is that I don't think that the central banks doing what they're doing right now naturally get you to a permanent 2% or less inflation rate but they move you toward a 3% inflation rate where they are right now in the not terribly distant future within 2023 and that's if you will to pardon the phrase close enough for government work as they approach that they can't tell if they're hitting their job or not uh so I do think inflation will keep falling I don't think it'll stop but the reality is the net lending growth over the inflation rate on a global basis and it's Global that matters because we live in a global world if you take almost anything that's a complicated thing any kind of complicated thing it's got parts from all over the world and some of which have gone back and forth and forth before they get assembled into the final thing inflation ought to come down but not every month not every week irregularly and people have a hard time with it because it's not like prices are reversing and going to back where they used to be that's disinflation and we don't really do much of that in our Western World assuming tech stocks rebound more than others at the beginning of a newable market when does it make sense to rotate to other value oriented sectors and their Industries what industries and sectors might those be so let me just talk about the bounce effect really quickly off the bottom of a market in a bare Market in the new bull market typically the categories of stocks not all every single stock but the categories they got hit the hardest bounced the most for about 8 to 13 months sometimes they start off a little faster sometimes a little slower you wouldn't find that very surprising now would you but after about three months off the bottom pass I mean where we are now and more having the market H its bottom in October that bounce effect gets stronger and stronger until it more or less Peaks and stop that's the time you to expect those categories got hurt the most like Tech to bounce back the most now after that sometimes they continue to lead but they usually don't they got hammered the most in the bare market usually because they' done really well in the prior bull market and over saying themselves this is where your question becomes app because you say what other categories might do well on the feature is in that time period which is leading into the middle the beginning of the middle of a bull market you typically get luxury goods continuing to do well Energy's 50/50 then Banks often do well Banks I'm not necessarily referencing the rest of the financial services but in a rising market a lot of the rest of financial services do too because they're linked off to Capital markets pricing and then Industrials and particularly any kind of Industrials with a growth oriented vent particularly those feeding into consumer durables products that will cost you a fair amount you don't really have to buy them versus Consumer Staples which are the more defensive ones uh food clothing Etc so that's where you would look that's uh where you should think to be then but that isn't now and if you like these videos that I do I'll be back doing more of these grab bag things and I'm sure there'll be this question coming up in varied ways month after month after month the final and last one I got for now off of this week is can two different styles growthy Tech or just growthy in general and value oriented sectors perform well at the same time in the beginning of a bull market now you know why they give me these cards with this big print on them because I'm not supposed to do this stuff with with my glasses on and at my age I can't read the print if they don't make it big like this for me it's it's the hair it's the waving hands and and you know I gotta go a what does that say so the fact is yes in fact categories where one typically does the reverse of the other can also like growthy stocks and value stocks can also do similarly well over a sustained period there's no law rule um that says anywhere any place that categories have to be widely desperate in their returns one has to beat the market by a lot while the other likes the market by a lot if one leads the market by a lot the other one probably does l it by a lot but they can perform very similarly and this year I don't expect overall in the year to see growth and value with hugely different returns thank you for listening to my grab bag questions and answers and I hope you want to uh listen to the next section of them when we do it again probably next month take care subscribe to the fis
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