YouSaid · the spoken record

Byron Gilliam

lines on the record: 65
first: 2023-07-22
most recent: 2023-07-22
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“I don't know. I mean, maybe because so much of the bond market is just treasuries. And then if you're an active bond measure manager, you're probably not going to buy treasuries. You're going to buy some corporates or something. And then you're going to gravitate towards riskier things and probably over time riskier things outperform. I don't know. I'm just guessing. I mean, that's kind of like the like what you've seen in equity is like this is a nightmare year for active stock pickers because Nobody picks Apple, Google, and Meta, right? Everyone picks their small cap favorites and they think no one else has discovered.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so I know that a lot of people know active stock pickers and stock traders, even like 85, 90% of the professionals struggle to beat the S&P 500, underperform the S&P 500 on any time horizon. But I think actually active managers in bonds have a somewhat better track record of picking bonds. So like active bond funds outperform passive bond funds. And I've heard reputable people say that I'm pretty, I'm pretty sure it's true. I've glanced through the studies. Do you have any idea on why that's the case as someone who was actively trading stocks for many decades?”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I did, but then I sold after like a 30% gain when I was a 40% gain. It was a 250% gain. Again, that's why you can be right. But if you don't have the confidence to follow through and size it big and continue in the trade and size up as it goes, roll the strikes up. Oh, you bought a $100 call option, make it $120. That's where the real money is made. And I think, yeah, you can be an okay investor, like average investor who has good thoughts that are occasionally right. But if you want to actually make money, you have to know which ideas are good and which ones to size up, you know. And that's why, yeah, that's why it's so hard to beat the market. And in my interviews, I've tried to like, you know, every maybe five interviews or 10 interviews, I like to throw out at people and just remind people for the audience that it's so hard to beat the market, the S&P 500 and professionals find it very hard to do it on a long-term time horizon. So like if you're doing this, like if someone's watching this, like working really hard in their job has nothing to do with markets. And then, oh, I'm going to trade stock.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“And also, even if you have a thought about, oh my God, this stock is underpriced, or blah, blah, blah. And then it goes up and you didn't buy the stock, you don't get to take credit for being right because I had a thought it was right. You know, like, I'll give you an example, Meta in last fall, it was trading at around $90. And super, oh my God, Mark Zuckerberg, the kid, he's wasting all this money in the metaverse. The earnings are down. Who uses Facebook? Whatever.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I'm a believer in the efficient markets hypothesis, which states simply that everything is always priced correctly, but just that moves are very close to random. It's just predictions are fun and narratives are fun. And I love following it and paying attention to it and trying to make some money every once in a while. I think markets are just very close to random and there are very, very few people that are ever going to beat them with any kind of regularity.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“If you make a call and it's kind of implied that it's going to happen quickly, you can't be, oh, I have a long time horizon. It's like, well, you didn't say that when you made that call. So, yeah, and that's why just with my reputation and your reputation, like I don't like making calls. There's securities that I have a strong view on. It's going up, down, sideways. But if I were to share that publicly. Let's say I'm right. People be like, oh, wow, Jack made a good call, and then they'll forget about it. But if I'm wrong, suddenly I'm the worst guy in the world. You know, I lost them money. And the same is true of the economy. So I don't know. I like being in a position where I don't have to make big, bold calls just because I feel like it's a tough business.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I think the price action and the economy, inflation from October until now, the soft lending call has been a 10 out of 10. And I don't think that it could have been any more soft landing than it was. I think it has been a pure soft landing E. But yeah, it's a question of where do you draw the line? Like, are you, if the game is over now, the soft landing land has won. But if you're going to 2024 and the game's not over, then we could have a recession, inflation could reaccelerate. But I agree with you. I mean, if I say, you know, in 2016 that the 10-year bond is, you know, it's headed to, the 10 years headed to 4%. And then it goes down and it goes down and it goes down. And then it goes to 1%. And then finally, it goes to 4% in 2023, 2022, 2023. It's like took six years, you know?”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I mean, I think we've already soft landed, right? Like, I don't really know what else are we waiting for, right? I feel like we've exited the pandemic economy and we've done it without going into recession. So I think that is already a soft landing. And then I feel like we're just starting something new now. Like if you were, I think all bets are off now and you just have to make, you know, you have to make new fresh predictions unrelated to the pandemic. If we get a, if we can, if we get a recession in the first half of 2024, then anybody who's calling it in 2022, that's count. You got to call your shots better than that”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Um, and this final question is you know, Byron, I know two things. Number one, I know you put a lot of faith in people's ability to predict the future macroeconomic economy. And number two, I mean, whenever someone tells me inflation is going up, downy, I always, I know that there are Economy”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Think that Bitcoin and the rest of crypto will probably be less correlated than it has been previously. Like, I kind of think Bitcoin is going to do its thing as a store of value and a potential reserve currency for people. And then the rest of crypto is going to have to develop some more utility and some different narratives. I kind of feel like the next big crypto rally, you know, Bitcoin will not necessarily lead it. Bitcoin will kind of do its own thing and the rest of crypto will go in a different direction maybe.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“That's not something I've thought much about. I would just say that the sample size is really small. So I don't like how many halvings have there been like four or something? I'm not even sure. So that's not really a pattern that I think you can bank on. And I think it gets harder because some of those halvings Bitcoin was really small. So it was easy for them, you know, it was easy for it to go up. Now it's got a $600 billion market cap like it's harder it's harder to move a $600 billion market cap than it is a, you know. One billion or whatever it was for the first couple of them. So, yeah, I would be a little bit skeptical of that narrative. I also don't think that. I don't think that”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“So, talk to me, you talk about narratives about one narrative in crypto is the having every couple of years, the amount of Bitcoin that's produced per block or whatever. I'm not a tech guy is cut in half and it has typically around a halving. That's when a new crypto bull market starts. So I think a halving is going to be next year. So do you think that that is actually a real signal or do you think it's kind of like an inverted yield curve where I'm not saying it's not a real signal, but it just so happens that before all these recessions, it happened. And if you have a thousand indicators, millions of indicators, there's going to be one that looks like the indicator and Bitcoin having is just kind of random.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, the ICO rally was just the ICO bubble must have been like the shortest bubble of all time. It was like, you know, it was shocking how quickly that deflated. I think maybe like, I think, I suppose I would say that the 2017 bubble in crypto was just really small and 2020 was more substantial.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“That's fair. So maybe 2017 and 2020 were both everything rallies maybe. I've only really been paying attention to crypto for a couple of years. So maybe I should be a little more cautious with my takeaways. But I don't know like 2017, like crypto was so tiny. Yeah, I mean, yeah, the ICO boom was definitely in everything rally. So yeah, so maybe they had two. You're right.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Isn't it just in, I think we had an everything bubble in stocks in early 2021. Maybe didn't compare to 99. But in some ways, I mean, you know, in 99, you had, oh, this is a giant bubble. It's $100 million. I mean, you had companies that were telling you they wouldn't make a dime in revenue until 2026 at much more than $10 billion going public. I mean, you had like an oat milk stock being valued at like billions and billions of dollars. I think there was an everything bubble in stocks in 2021. And also in crypto, isn't it kind of it's a cyclical gyration from extreme optimism to extreme pessimism from the valley of fear to the peaks of greed and everything rallies in crypto when it's a crypto bull market and everything doesn't do well and there's beta obviously you know bitcoin is going to outperform the speculative microcap coin in a bear market or you know it will go down less”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, you could argue about the valuation, but there was real earnings behind the tech rally that followed the dot-com bust. So I think sometimes people fall into the trap of assuming that every bust is always followed by the next rally and the next mania and you just have to wait around for it. I don't know if that's really the case. I think you won everything rally and or won everything bubble and we've had that in crypto. And for the next bull market, it's going to have to be something more substantial than that.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I think they'll be less correlated than they have been. If I had to bet on one of those two, I would probably take stocks at the moment. So crypto had its everything rally in like 2020 and 2021 where things just went up because they were crypto. Tech had their everything rally in 98, 99 where things went up just because they were a dot-com at the end of the name of the company. But I think you only get one everything rally, basically. So in the tech sector, the subsequent rally from whatever it was 2005 to 2015 or I don't know maybe 2008, whatever, you know, however you want to date it, basically the Fang rally, that was based on real earnings. That was based on new business models that were enabled by the internet and Facebook and Google and Amazon making huge amounts of revenue and building incredibly valuable businesses.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“What do you think is more likely over the next year, two years, like a strong bull market in stocks or a strong bull market in crypto? And do you expect that they'll be correlated as they have been over the past few years?”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, that's probably the case already. I think crypto is probably mostly algorithms already. I'm not really sure. But now I was thinking more of like, you know, if autonomous AI agents start providing services that people want, then people are going to have to pay for those services in crypto because AI agents are not going to have bank accounts. So that's going to That's going to bring people into the space and give them a reason to open a digital wallet and buy some crypto and learn how to move it around. And ultimately, it could, you know, it could.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“To the interview. What was that look like? I understand the narrative of, oh, it's not, we're not a crypto company. We're an AI company. It's a rebrand. I understand the PR that, but in terms of actually on the ground, what does that look like when AI is all within crypto? And I'll just give you an example of, I think on the online poker world, there used to be a time when there were a lot of recreational players on there. And I'm a recreational player, you're a recreational player that brings on other recreational players. They all feel safe. But then like all the pros came on, all the sharks and they started beating, you know, all the fish like me. And then there were poker bots. And so you go on as recreational player, you'd go on and you'd be on a six person table with five other bots. And this is no fun. I'm losing all this money and then no recreational plays on and the ecosystem kind of goes out. So is that a worry of if human beings who aren't professional crypto traders go on in crypto, they're just going to be kind of moved around and lose money to all.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Something like that. So I think the bulk case is that we're building the infrastructure rails and we don't really know what they're going to be used for yet. I think the next narrative should be AI because AI bots are going to want to be paying each other autonomously or getting paid by humans for services that they provide. And AI bots won't be able to open bank accounts, right? So crypto seems like it's custom made for the coming economy of autonomous AI agents. So I think that could be a really good narrative, but that's a couple years away still probably.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Centralized financial system that we're hoping for. But I think the bull case for crypto and DeFi in particular is that we're just still building out the infrastructure rails, that it's, you know, it's not 1999 in crypto, the tech stock equivalent would be like 1992 or something when HTTP was still being built or”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I think DeFi is super interesting, but it hasn't really found a real world use case as of yet. That is kind of maybe, maybe if there is a next narrative, people are hoping that it's real-world assets coming on chain. But, you know, DeFi now is still just different ways to leverage and trade more cryptos. It's just, you know, crypto is mostly for trading crypto at the moment. And DeFi is mostly over collateralized lending, which nobody really needs unless you've got some Ethereum and you want some ETH and you want to leverage up and buy more ETH and you can take an over collateralized loan on your ETH and buy more ETH, but that's not really world changing. That's not the new decent.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Just taking the percentage from the lows is not giving you an accurate reflection of sentiment or what's happening, I don't think. The question on narratives is a good one. I think we were kind of. In need of a new narrative. We had the NFT narrative and that popped and we had the DeFi narrative before that. And there's not much happening in DeFi.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“But what are the narratives like in crypto? And I'm somewhat surprised that the sentiment in crypto is still so kind of gallows humor, bearish given that it's 80% from the lows. I mean, an 80% improve, you'd think that improved sentiment somewhat, right? Or is it just everyone's cost basis was Bitcoin at 60,000?”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I don't think it's quite double. I think it's up like 80%, but it's coming off of a very low, low. It's a lot further from its highs than stocks or the tech stocks that they are sometimes correlated to. And they've been. Very sideways lately. There's not, I would not call it a bull market in crypto at all.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Yes. And I think that the volume coming out of the reverse repo facility has been offsetting QT, but the bull market stock started rallying well before that. So, I mean, are you going to say stocks anticipated their forward look? I don't know. Yeah, it's crazy how much the narratives change based on the price. And crypto, the most liquidity sensitive asset of all. It's doing well. I don't know. I don't know if you characterize it a bull market yet, but I mean, what's the price of Bitcoin has like doubled since it's bottomed in November, right?”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I don't know. It doesn't feel like that stuff has mattered. Like, you know, everyone was so terrified of QT. And I don't even remember the last time I heard QT mentioned. Like, it's still going on, right? Like they're still running off the balance sheet, but It doesn't hardly get a mention now. And stocks are back near all time highs. And the subset of stocks that were supposedly the most sensitive to liquidity and Fed doing things has been what's leading the stock market. So it just doesn't feel like it makes any difference.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Yes, but that actually has been declining. The amount of money in the reverse repo facility has been draining. Something Joseph Wang has been talking about for over a year, it's finally happened. Money market funds are buying more treasuries, and so they're taking money out of the reverse repro facility and buying more treasuries. And that has to do with supply and demand and just a lot of supply being issued by the treasury. So there's no longer a lack of collateral so that treasury yields are actually slightly above risk-free interest rates in reverse repo facility rather than below. So now there's actually a lot of incentive for money market funds to make more money if they buy treasuries rather than reverse. So that's actually been, I guess, a good thing for liquidity. And again, it's like, do you say because reverse repo facility is declining, that's the re aha. That's the reason why we have a bull market in stocks. I don't know. No one knows. What do you think about liquidity, Byron? Are you?”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I think a lot. And I want to walk back to what I said. So I think that. The fact that you have to pay more for your deposits actually should make you want to make more loans, but banks have been pulling back on credit. And I think that's because I know what it is. Deposits, the quantity of deposits affects, if deposits are leaving the banks, then banks will get more levered and they would want to make fewer loans. But if it's only the cost of deposits going up, then I actually think they want to make more loans. So it's the difference between quantity of deposits and the cost of deposits.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“So, if higher rates are not discouraging banks from lending, then like do the Fed interest rates have they mattered at all? Like, is that as inflation? I'll put it this way. How much credit does the Fed get for disinflation?”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Capital ratios. And this is really only a trouble for banks that have been in the news for having issues so far. But banks, you can't get too big. And if their deposits are leaving the banks and they're replacing them with borrowings, like, oh, they placed a 4% deposit cost with 4% FLB or 5%, you know, federal homeland bank or bank term funding program. That may be similar from the cost perspective, but actually I don't know, but like it's complicated. I think that banks can't get too big. And like if they... Their equity has been damaged, then they're leverage ratio will get too big, I think.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Issue is they want to make more loans. If deposit costs are high and interest rates went from deposit costs went from zero to 5%, I actually think banks want to make more loans, not fewer because they need more 7%, 8% loans to replace the 3%, 4% loans they made in 2020 so that their book can reprice so that their net interest margin. So I think it's like they want to make as many loans as possible. I think the limiting factor is one, the availability of good borrowers. And two, maybe more importantly is”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“A few things. Firstly, yeah, the unemployment rate is low. So individual small businesses paying off their loans. Those delinquencies are low. I think there are a lot of loans that are collateralized, so collateralized by commercial real estate, multifamily office, collateralized by a car and car loans. And those honestly have a lot to do with the collateral values, maybe even more so than the unemployment rates. And like if you look at auto delinquencies or net chargeoffs, they're actually down for ally, for capital one, where I think of capital one as only, you know, a card company, but they make a lot of auto loans. And the delinquencies are actually not delinquencies. Net charge are actually down just because used car values have gone up from beginning of the year to now. So it's really tied with the collateral values, as well as the unemployment rate. And you're absolutely right on the unemployment rate. And the second.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I would assume that credit will be fine because unemployment is 3.6% or something and GDP is still growing and corporations are still profitable. I guess my question though would be banks are presumably lending less like if you're paying 5% for a broker deposit, you're unlikely to want to make a fractionally backed loan to somebody right so like do you think that's going to impact the economy and is that like the long and variable lags that we've been waiting for and how much of an impact do you think that'll make?”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Is it over? I don't know. I don't think anyone knows, but it looks pretty stable. I'll say It looks pretty good if credit miraculously continues to be, if we don't have a recession and credit losses are very low, continue to be very low, it's looking good. I don't know how much more resilient this economy can be. I mean, I posted about Bloomberg in October, had a 100% chance of a recession from its models over the next year. And the economic data so far has really outperformed that. I mean, how much of that outperformance is due to the price of oil falling? So people, it's basically everyone in society gets a huge raise because they pay less at the pump. I mean, oil went from gas went from seven bucks to four bucks, three bucks. It's not going to go negative, you know what I mean? So I don't know, but a lot depends on the economy.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“$300 million that if they had to sell it, they couldn't get 10% of that, and the loan is still being valued at par and they're still paying because it was based on a low interest rate. So I feel like a lot of these, you know, doomsday warnings about commercial real estate, they could be true, but we're not seeing them in the bank earnings. And I think bank earnings are super lagging. So yeah, the broad trends is deposits have stabilized money for inflows back into the banks, but the cost is about the deposit cost and how that in fact impacts net interest margins. And broadly across the board, net interest margins are down, but they're down from last quarter or two quarters ago. And those were unstable because those were a time when they could make the loans at the higher yields, but there was a delay between when risk-free interest rates went up and how much they would have to pay out in deposit costs. So, yeah, I mean, I think it stabilized. Your question of.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I'd say your characterization is accurate, and there's so many regional banks. If I look at five of them in depth, there are a hundred that I didn't look at. So I'm obviously been missing stuff, but I'd say the general trend that I've been seeing is deposits have been going back up after if they were leaving some for the regional banks that have issues. A lot of community banks and small commercial banks, they don't have any issues whatsoever. So it's not the availability of deposits. It's the cost of deposits. And those cost of deposits have continued to rise as risk-free interest rates have risen, but the net interest margins, they've gone down, but it's been bearable. What really stuck out to me is credit so far has performed. Whether banks”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I think the stock market does that, like the stock hasn't done very much. So I think you can just look at the stock and see what's what people are assuming. I don't know. I guess my question to you would be on the regional banks. Like it seems like they've weathered the mini bank run, which turned out to be not much of a run. I guess the deposits are stabilizing, although a lot of them are having to pay up with brokered deposits and stuff. So I guess my question to you is like, is it over? Or is it back to normal? Or is there still shoes to drop”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Consumer lending. They tried to have deposits in the same way you go into Bank of America, like you go into Goldman Sachs. And that didn't work. I think it hasn't been working for a while and they've been losing a lot of money on it. But in accounting wise, this is when this is the quarter they chose took a hit. So if you look at return on equity, I look at a chart. It's going to look like a crash. Whereas RILA really the business has been bad for a long time. So like you should depreciate or amortize that loss like overall the quarters, not just this quarter, you know?”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I've been following them more than I normally would because banks are usually the boringest sector that you could possibly pay attention to. And as a trader, like you never paid attention because you knew if interest rates went up, they would make a little bit more net interest margin if stock markets were going up, then investment banks would do well. You knew what the banks were having a good quarter or not. So you didn't have to pay attention to their earnings. This one was a lot more interesting. There was a lot more differentiation between small banks and big banks and investment banks. I thought it was kind of interesting that the stock market is up as much as it is up and Goldman reported like a four percent return on equity or something like that, which is, again, that's like, that's not a bull market. If we're in a bubble, the investment banks would be making a lot more money.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, definitely. So I've been following earnings seasons happen. Banks have been, I've been following a little bit of the banks. How much have you been following the banks? And if you haven't been following that much, what questions would you have for me maybe?”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Also, the metrics like Microsoft is expensive, but it's like 38 times earnings. Even NVIDIA is, I don't know, what's the forward multiple on NVIDIA? It's probably only like 60 times earnings, right? When you get to a, it's not a bubble until you start doing multiples of eyeballs and stuff like that.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I think you're absolutely right when you said that the sign of a mania and a sign of a bubble that's about to pop. It can't get more manic. It can't get more bullish is not where we're at right now. We're Navidia's going up and the valuation does not make sense. Okay, maybe whatever, but it's a real company. I feel like, yeah, the sign of a bubble that's about to pop is when you have all of these speculative companies IPOing and going public and they don't go up and they actually start going down. Even as sentiment is very bullish.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I mean, it could happen again if there's huge public demand for AI stocks, then companies will start raising capital that way. I would guess, but we had one IPO this week, Oddity, and it was up 40%, which is pretty good. But, you know, that's the first one in a long while. And if we were really getting towards bubble territory, then there'd be one of those every day.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“I think we had a mania in like 2020 and 2021, but I see what you're right. There's more room for mania to develop in other asset classes. Private equity, real estate, obviously privately traded, and then venture capital, the valuations can creep up higher for longer before they have to go onto the IPO. Uber can become a $60 billion company and then IPO. It doesn't have to ipo at a smaller valuation. skeptical view is like the markets have become kind of a dumping ground for venture capital and that the mania happens before a company goes public not after”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, like AI kind of feels like a bubble from a sentiment perspective, but not from an investing perspective because like what can you do? All you can buy is NVIDIA and Microsoft, basically, right? And that's like, that's not the makings of a bubble. I read this week that Y Combinator, that 35% of their new entrants are AI companies or AI related. When those all start going public, that could be mania. That could be. I'd be surprised if we ever got there. Like, markets are different than they were 1999. Was just a lot companies stay private longer now. The mania kind of happens in venture capital and private equity. And I'm not sure it even ever makes it to listed equities. But if we had a mania, then yeah, it would do. But I don't think we're anything close to that right now.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“And that's typical for coming out of a period of bad returns of the large, reliable, stable, trusted companies lead the way. Like in March and April, April of 2020, May of 2020, it was Microsoft, Apple. It wasn't the speculative stocks or even the oil stocks. Those came later.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Okay, so I guess, I mean, the ball case is that, yeah, like you say, we're only just getting started. I don't think we're, I don't think we're in any kind of a mania at all. You know, if it's a mania, it's like a really weird one because it's basically like Apple and Microsoft and Google and these are giant companies that make tons of money. So Apple going from expensive to very expensive, like that's not a mania and that's not a bubble.”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, and I mean, you made a comparison to 99. If you analyze the Nasdaq, those are the annual return for the year. But from 99, you had so many years before of consistent high returns, whereas last year it was quite bad for the NASDAQ. I mean, normally the process is you emerge from a recession or from a period of bad returns and it starts out slow. It doesn't go from falling to a manic bull market. And I don't think we're at mania yet. I mean, I don't know. You tell me, but it just, yeah, I mean, how extreme do you think the sentiment is and can it last? Also, also, sorry, just another question of are we in a newbable market?”
2023-07-22 · Forward Guidance · It Can Always Go Higher | "On The Margin" Round Up with Byron Gilliam and Jack Farley · IDENTIFIED FROM THE TRANSCRIPT