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Jawad S. Mian

lines on the record: 80
first: 2023-07-21
most recent: 2023-07-21
sittings or episodes: 1
sources: podcast

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“Interesting, a question I've been asking is what if the greatest trick the market ever pulled was convincing investors that were still in a bear market? Right.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“Phenomenal backdrop. So the rate sensitivity to the U.S. economy is historically low. So the households are in a much better position today than they ever were. The reason, despite global tightening, we haven't seen a slowdown in sort of a major slowdown in consumer spending is partly because of the fact that we had significant gains in savings, not just exercise, but total saving because ours worked. So checking deposits today are $4 trillion higher than they were pre-pandemic. We're underappreciating the amount of money still in the system and what that means for demand. The demand side of the economy, because of the pandemic, took a massive upward shock that I still don't think that we're fully getting our heads around.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“Below 1980 levels when the data series began. That's pretty significant. So you can have a 5% Fed funds rate and the consumer is not stopping. At the same time, if you look at corporates, they extended their maturities for their liabilities from five years to seven years. Their interest cost as a share of debt is 3.5%, the lowest since 1950. And then you look at the mortgage market, that's another, you know,”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“A question I'd like to ask is what is happening that shouldn't be or what is not happening. And given the sort of Fed tightening and all the information we received, it's surprising to see the markets hold up. Simple answer, second-level market. It's significant to see the housing market bounce back. Simple answer demographics. And why aren't in a recession? Simple answer. I would say that rate sensitivity in the US economy is historically low. And what I mean by that is post GFC, we had this beautiful deleveraging that Bridgewater talked about. But post pandemic has gotten even better because they have the boost to incomes and you have the further drop in interest costs. So if you look at household debt service to disposable income ratio,”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“I think I mentioned the demographic impulse. I think it was a significantly important one. I think the second is the household finances, which is also related to why we've somehow skirted a recession so far and the consumer remains.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“So, when people compare the current sort of bear cycle to 2001 and 2008, the reason I think that's flawed is because that was in a secular bear market.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's interesting, right? So I think. The 20% measure Nothing significant about it, but it's an interesting study that we can do around it, right? So, what we looked was let's segment the 20% decline between a secular bull market and a secular bear market. And what's the difference? And what you realize is when you have a 20% decline plus in a secular bull market, the average decline is 27%.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“And so what's interesting is we've risen 175% despite the US-China trade war, despite the pandemic, despite unacceptably high inflation, the energy crisis in Europe, bank failures again, despite all of that. And I think we're going to continue to power ahead because of structurally changes in the economy that, again, we're not appreciating fully.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and I think what's interesting about that beard is, again, you had the 87 crash, you had the 1990 SNL crisis, you had the Gulf War, the LADAM crisis, the Asian crisis, the Russian default, the bloodbath in 1994. So you always have these events and you still had three corrections of over 20%. And so even the current secret market, when you put it in context, the reason the context is important is because we've been in the secular market, where currently, since 2013, the stocks are up 175%. We lack the upside. We haven't reached the sort of upside in terms of price. And not even in terms of duration. So the previous bull markets were 18 years long, where like nine years in. So it's two-thirds of the way through, I would probably say.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“Wake up call, and you want to, and money's a proxy for safety. So you've seen this dynamic where millennials are increasingly taking participation in financial markets, in home ownership. So homeownership has increased from 38% to 46% for millennials over the last seven years. And they're going to continue to increase. So they're entering the peak earning years. And I think that's demographic impulse is still underappreciated.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely. And what's more interesting is that the pandemic, I think, created this. Psychological fear and anxiety about wanting financial safety and securing your financial future. So you've seen more homeownership interest and more stock participation because the pandemic was like this visceral death experience. Wake up call.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“So, when the boomer turned 35 in 1981, his net worth was around $136,000 in comparable dollars today, the millennials at $128,000.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“Millennials are now the largest generation in America. And if you think about the 1980 secular bull market, 1981 is when you had the baby boomers begin to turn 35 During their peak earning years. The millennials started doing that in 2016. And the pandemic was important because after the pandemic, household wealth for millennials increased. So if you compare it in present dollars,”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“But do you have an event that really shocks investors, right? Just like 87 was very shocking. And the decline in the Kennedy beer market was very shocking. It happened very quickly. And the pandemic was something like that. It was a mid-cycle crash in the way I perceive it. And so What's more important, I think, apart from just the technical conversation we're having around the indices and the breakouts, the pandemic made a significant difference from a fundamental standpoint. Because obviously fundamental underpinnings to the cyclical market, number one is the fact that households are in better financial conditions than they have been since the GFC. But number two is from a demographic standpoint.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“Even a secular bull market has like a mid cycle crash, right? So, for example, in the 1950 to 1968 bull market, the mid cycle crash was the 1961 Kennedy Bear market. The market fell down 30%. In the 1980 to 2000 market, you had the mid cycle crash in the 87 crash.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“Thousand peak. And the second book market began with a 4P of 13. We rose to 23. Last October, we bought them at around 15 in a bit. And we're at 18 now. So, again, this is 13 to 23 down to 15. We will not get to 23, in my opinion, but can we get to 2021? I think so”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“Valuations are ebb and flow. So the beacon valuation was in 1961 at 22 times multiple. But by 1968, even when the index made it stop, the PE was trading at 18 times. And the reason that's important is because there's a lot of talk about valuation now And I feel like we may have seen the valerations peak for this cycle in 2021 at 23 times 4PE. But that doesn't mean necessarily that the cyclical boar market is over. So this secular market that we're in today began in 2013. When we finally broke above the 1500 level that was capping the index since 2000.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“So by 1950, the SM500 was stuck at the 20 level on the index for about 13, 14 years. And in the 1950s, when you finally broke out. And between 1950 to 1968, which was the first secular bull period, you had a gain of about 450%. You had 1950s, which is the best decade for stocks ever, we forget. But that whole period actually had three recessions. It had the Korean War. It had the Cuban missile crisis. It had the race rights. It had Three corrections of order 20%. It had bunyals that went from 2.2% to nearly 6%, and yet equities did well. That was a period of 1950 to 1968. The second, and what's interesting about that period is the fact that valuations actually peaked in 1961. Yet the market beat in 1968.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“So, a secular bull market would be a period of a long period of above average equity returns where you have pullbacks, but they're shorter in duration in magnitude than otherwise expected. And the recoveries are quick. And you've got rising risk appetite and valuations climb or expand. And the secular bear market will be vice versa, right? The fact that you've got declining risk appetite. Declines are prolonged, deep, and valuations mean revert.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think that's where the community comes in, right? Because I don't claim to be a guru or a market expert. I'm just genuinely curious. And I'm happy to know and admit that I don't know everything. Frankly, that's been one of the greatest liberalizations in my life. It's the fact I don't need to know everything and I don't know everything and I can rely and trust other people within the community. So I don't have a particular strong opinion about a particular topic. I'll go look at the expert and have a conversation with him or her. And so I can lean on the community. Again, this idea that all of us are smarter than any of us. And I don't have a particular ego that needs to be presented and articulated in a particular way. I'm happy to just say I don't know when I really don't know.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“The way I think about it, Barry, is again from a spiritual angle. All the prophets made this particular prayer. O God, show us things as they are. And so for me, the objective is to see things as they are, not so much as how I want it to be. So I even watched myself when I use the words like should. The market should behave this way. I think that's hypocrisy. The market shouldn't behave one way or another. It is what it is, right? So I've got a particular view. You've got your view and then there's a divine view or the market view. So how can you get closer to that truth only by shedding yourself, shedding your ego, insisting that the market behave a particular way? And I'm okay to be curious. And that's a big difference.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“But no one was listening, so it's being reported again and said again. So I benefit a lot from the virtues, the wisdom, from ancient sages, poets, philosophers. And I think it helps me see the world clearly. I believe the more clarity we have internally, the more clarity we have in seeing things. And so all that people that you cite are helping me in terms of being a better person, being aware of my biases and just being a much clearer thinker.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, I think life in markets are intertwined. You know, the biggest risk in markets is ego. I would say the biggest risk in life is ego. The biggest virtue in markets and life is humility. I often say successful investing is only possible with knowledge of oneself. And so I think for me, when I started writing, it was as much a process of self-inquiry as it was examining markets. And you start to see the overlap and similarities and the biases and the common mistakes that keep coming up, you just have to keep cultivating a better version of yourself and keep working in progress. And I feel like there's a lot to be said about ancient wisdom. It's almost like everything's been said before.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“Of you, but it's certainly look when I launched the business, I realized I'm not unique in what I do because there are lots of other people out there who are writing opinions about the market, but I am unique in who I am. And so I've made it a point to always write from a personal space and really cultivate the craft of writing and really examining markets objectively becoming very agnostic in my analysis as opposed to ideological and empirical as opposed to dogmatic. So I don't care to be consensus or contrarian, bullish or bearish. I just want to be independent and come to the truth.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“I wasn't working for a hedge fund. I started my career as a bank teller. For the longest time, I thought that unconventional background is a shortcoming. But what I realized over the years through the help and encouragement of the community, there's actually a core strength because it helps me view the world differently from the vast majority of Western-born and trained analysts.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“Some of the greatest writers Barry have talents that are very yet odd with their experiences. If you think about Herman Melville couldn't stand life aboard a ship. He wrote Mobidik. Ernest Hemingway spent time away from the action in the wars, but he became the greatest wartime writer ever. Jack Kerouac was famous in nomadic, but he wrote On the Road at the home of his mother, Jane Austen remained single, but she became the chronicled revered chronicle of courtship, love and marriage. Emily Bronte liked to keep in her own company, but when she wrote Wuthering Heights, people thought that it's written by a man because she painted such a viciously brutal world. And Emily Dickinson, you know, she liked being by herself. In her poetry, she unveiled the secrets of the universe. And so when I asked myself the question, am I qualified to provide investment advice? What I realized was in all these instances, their distance from the subject not undermined their credibility. It only allowed them to be more curious and examine it in ways that perhaps others wouldn't. And so for the longest time, I actually thought that my unconventional background, I wasn't an Ivy League student, I didn't train at an international.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“Or breakfast somewhere, and we're all exchanging ideas. A core principle is all of us are smarter than any of us. And I really lean into that. And so I learn a lot from the community. And then the fourth element would be a Slack group where everybody sort of exchanges ideas in real time. And the fifth and the most important element is just one-on-one conversations. I'm a big believer in building strong relationships. And that's kind of what develops the research idea flywheel, understanding from people what they're thinking, what they're concerned about. That inspires me to sort of focus on what I need to write about. And so in a nutshell, that's what we do.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“Reflections is a macro advisory and community that works with portfolio managers, CIOs around the world. They rely on me to challenge their beliefs, expand their knowledge to help them think about the world differently. And I do that through different ways. First is just my research, my writing, and I'm allowed to be reflective. I don't publish daily or weekly. I'm not reacting to events. I can be deeply reflective about what's going on. two, three times a month I'll write about some topic or theme that's interesting. We do that through online events. So I'll interview someone from the community about a particular topic. I don't claim to be an expert in everything. But if there's something interesting happening in biotech or in China or Fed policy or AI, we'll have a salon, an online salon that we sort of discuss ideas. Another thing core part is just year-round events. I'll travel to New York and London and Miami and Hong Kong and Singapore, LA, San Francisco, Dubai every six weeks, and we'll do a dinner.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“So you effectively published my work before I launched Reflection? And the last thing you published was my resignation letter, which is really the sort of inspirational, glowing, flowing words about why I'm leaving my job to unfold my personal legend as I was thinking about at that time, inspired by the alchemist.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source
“So I've always had this ambition to do my own thing, and I've had a very unconventional background. I saw my career as a bank debtor, but fell in love with markets and read all the right books to get inspired. And I had this goal that I want to do my own thing by the time I turned 30. And if I have a few years of savings, I'll quit and start writing. And so I started practicing writing online. And I looked up to you as the big picture blog. And I reached out to you with some of my work and you published.”
2023-07-21 · Masters in Business · Jawad S. Mian on Global Investment Research · IDENTIFIED FROM THE TRANSCRIPT · source