YouSaid · the spoken record

Richard Bernstein

lines on the record: 108
first: 2025-07-11
most recent: 2025-07-11
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

“have liquidity and what's the third part the third is sentiment and valuation Okay, so obviously we prefer to look at more undervalued situations, sentiment. We're trying to look for basically assets that people hate. Valuation will reflect that. If something's really undervalued, something's really cheap, it reflects that people don't like it. And it's just like any other good in any other market. If something's really expensive, it means people like it.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so to some extent it does. And it's going to affect more. It's going to feed into R's, more to the corporate profit side in terms of how much stuff are you going to sell, right? Because fiscal stimulus is trying to stimulate consumption or aggregate demand, if you prefer, to be a real economist here. It's going to try and stimulate aggregate demand. And that'll show up in our stuff type. All right, so.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“So next would be liquidity. Okay, and liquidity is a function of several different things. It's obviously a function of monetary policy. We follow monetary policy in 43 countries around the world. I know that sounds silly and obviously the G7 or G10, you get a lot more information than you would in some weird emerging market country. But we do follow central bank policy. We follow yield curves, the slope of the yield curves, right, whether you've got a bullish steepening of the curve, in other words, our interest rates coming down, but the curve is steepening, interest rates going up at the curve is steepening. Or is the curve inverting? I mean, we look at all these different things. They have different implications for sector rotation and things like that as well. And then we follow things like bank lending standards. Now, that's obviously, you can only get that in the most developed countries, but that's an important consideration as well. Are banks tightening credit or easing credit? People say, well, doesn't the central bank control that? Well, not really. You can kind of lead a horse to water, but you can't make it lend.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. So those are the type of things that we're looking at in terms of profits like, and as I said, we look at profits like those all around the world. We look at them by region, by country, we look at by sectors, you know, we look at profit cycles for, say, the tech sector for the consumer staple sector or something like that as well.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Which affects pros. So, all our indicators are either going to try to figure out how much stuff is, let's take the S&P 500, our S&P 500 companies going to sell, and what's going to be their margin per product. So margin, as you point out, could be interest rates. It could be labor costs, it could be pricing power because of inflation. People forget inflation isn't bad for a lot of corporate profits for equity, for sure. Right, because you certainly learn.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Profit side. So, what happens is if you look at the growth rate of corporate profits, you will see it follows a pretty normal cycle through time. And our challenge as investors is to find indicators that will allow us to effectively forecast that. Exactly. So if profits go this 5%, what's the problem of it going to 10% as opposed to going to zero? So we spend an awful lot of time with a lot of indicators that look at that. What are the indicators look at? Well, look, profitability is a pretty simple formula. It's how much stuff are you selling and what your margin per item? I mean, that's really all profitability is. Well, but there's a couple.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“So, whereas an economic cycle maybe is going to take four or eight years, you could have multiple profit cycles in that four or eight-year period.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“And the economic sidle. What is a profit cycle? So, you know, whereas people look at GDP growth or industrial production growth and they say, this is the economic cycle, what we're looking at is corporate profits growth. Now, let's just, as an example, we look at profits cycles all around the world, but let's take, for example, the S&P 500, the US profit cycle. What happens is the difference between an economic cycle and a profit cycle, number one, is that profit cycles tend to boom and bust. Fortunately, the overall economy does not do that on a regular basis. And secondly, profit cycles have a shorter periodicity. So you can get multiple profit cycles in one economic cycle.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“That's out there. Tell us about it. So I mentioned profit cycles. I think for us that is the most important part of our process. And as I said before, people spend too much time worrying about economic cycles and not enough time worrying about profit cycles. Define profit cycles.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly right, and put the wax in your ears, the whole routine, right? And that's what we do as a firm. We have a very hard core process. It's macro driven, but we're going to follow that process come hell or high water. You know, it's funny. People understand that. And they understand what we do. We understand why they do. They understand the notion of the book, but yet they get very angry when we're not. Following the siren song of what's the newest, baddest, you know.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly, exactly. And so, what the book tries to argue is that there's some very sound principles that everybody should be following to build wealth, but yet there's a siren song, if you will, of you into Greek mythology. There's a siren song of things, of noise telling you that there's something new or better, get rich, quick. You know, all these kind of things that are going on. And to continue with that, your portfolio follows that sound and crashes on the rocks, if you want to, the mythology example. And so, what the book says is the way to solve this problem of this incessant noise is to hardcore follow a process and come hell or high water, you're going to stick to that process. That's the mask you talk about.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Boards and websites. Yeah, I mean, you're just beginning to get websites in depth, but we're really still talking about a period of hard copy research reports and television. That's really what the mainstay of what people were looking at. The point of the book was to say that building wealth for an individual investor is actually not that difficult. Why don't people do it? Why don't people do this is kind of silly. Well, when you.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“It's crazy nonsense. How Yeah, so I wrote a book in 2000, so 25 years ago. I wrote a book that was called Navigate the Noise. I remember Investing in the New Age of Media and Hype. 25 years ago, I wrote about the new age of media and hype. You were ahead of the car. You think it's gotten a bit worse since 25 years.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, you can't have an overvalued asset that people hate or an undervalued asset that people love. That doesn't make any sense. So valuation is going to reflect sentiment. And so what we're basically looking for, if you think about those three categories I just mentioned, we're looking for situations where fundamentals are improving. Liquidity is adequate or getting better, and everybody hates it. Or vice versa, where fundamentals are deteriorating, liquidity is drawing up and everybody loves it. We're going to try and stay away from that. That's maybe a gross simplification of what we do, but that's kind of what we do.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“And liquidity is going to be anything from central banks, central bank actions to lending standards from banks. Anything that's going to allow more leverage and greater liquidity in investable assets in a stock market. And then number three is going to be sentiment and valuation. Now, sometimes people say, well, sentiment and valuation. Why are they together? And my answer to that is... That's the other. Yeah, my answer is that valuation is a reflection of sentiment.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“If it's trending the right way, GDP is going to be a contributor, but a lot of other things contribute to corporate profits. We're looking at corporate profits and profit cycle is not economic cycles. Number two category is going to be what we call liquidity.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“So, Barry, I mentioned that we are macro investors. We're not looking at individual stocks. So everything we do is going to fall into some macro umbrella of one form or another. And the way to think about it is it's going to fall into three categories. Everything we look at is going to fall into three categories. Number one would be corporate profits. One of the things that I wrote about extensively, even when I was at Maryland through my entire career, is I've argued that equity investors spend too much time worrying about the economy and not enough time worrying about corporate profits. The stock market doesn't really care about GDP. The stock market cares about corporate profits.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, you then entered the lost decade in equities. And your return for a decade was slightly negative. If you had been in other things like emerging markets or energy or, you know, all kinds of small caps, all these different things, you would have done fabulously well. If you bought small caps at the peak of the small cap bull market in 1983, it took you 17 years to catch up to the S&P. Wow. So you would have been neutral. So, you know, everybody says, oh, I'm a long-term investor. I'm just going to buy an index. If you buy the wrong index at the wrong time, it can have a real detrimental effect. And that's what pactive investing is supposed to be all about, is the active decision making around these passive investments.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“But there's been many times in the past where if you had bought the wrong index at the wrong time, your portfolio suffered dramatically for an extended period of time. For instance, if you had bought NASDAQ or even the S&P ETF in March of”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“We did that. So Pactive stands for the active use of passive investors. And what we're really referring to here are a lot of ETFs. And we're a macro firm. We claim to know nothing about Coke versus Pepsi. But rather, we look at size-style geography and, you know, asset allocation, things like that. And ETFs are right in our wheelhouse. It's been a great invention, and we're very big users of ETFs. Jack Bogle, I met many times when he was alive, and I always thought he was one of the smartest guys I ever met in my career. But one of the things that, and Jack would always say, don't talk to an active manager, just go buy an index. Okay, fine. But with Jack would, and that's an interesting discussion, we can have the discussion all day long as to why that happens or doesn't happen, whether he's right or wrong. But the one thing that Jack would never tell anybody is what index to buy and when. And, you know, one may say, well, that sounds silly.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“And so I would never put a number out. I would never give people a firm number, but I would always answer the question by saying, well, we don't really have an official target, but we have a 10% expected return. And nobody ever noticed that 10% is roughly the long-term average return of the S&P. With dividend reinvesting, 10% change. 10%. So I used to always say 10%. And that would make everybody happy. And so regardless whether I was bullish or bearish, I always answer the question saying, oh, I don't know, we have a 10% expected return. And that kept people satisfied. But I really don't think that the notion of what is your target is an appropriate thing to discuss as an investor. Look, if you want to be a trader and you want to do a lot of short-term trading, I get that and I understand it. For a true investor, I think it's kind of a silly discussion.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so what Barry is, as I'm sure you know, sell site strategists are always pestered for their target. What's your target on the S&P? And I used to think that was the most watched, least important thing I ever did.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“And so the lesson from that, you know, when I was a young pup, was gee, I really didn't know what I was talking about. And, you know, I learned that from various people working on Wall Street. And, you know, so when it came to 09, I was kind of determined not to make the same mistake again.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm not sure in our careers there has been. Maybe 82, right? If you think back to 82. Right, right in the beginning. Maybe 82 was a time. And I do remember that. I'm old enough where I do remember what the sentiment was like. And certainly I had very little experience on Wall Street. I know what my sentiment was like in 82. I couldn't believe that the market would be going up. Well, you just had...”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“That's the sort of stuff you kind of thing where certainly on the private client side, for those of you to remember, you know, in 2008, 9, 10, 11, 12, the story was all about bonds, bonds, bonds, bonds, bonds. Nobody wanted the risk of equities. And if you twisted their arm, maybe they would invest in large cap, high-quality dividend paying stocks. But there was no way that they were going to take any kind of beta risk. So no”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“The street got incredibly negative, incredibly negative. And so from my point of view, and what you're referring to was that do I stay at Merrill and try to convince everybody to be more bullish or do I go off and start my own firm? And I just thought it'd be better given all the other things we've discussed, it was better to start my own firm.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“So let me explain what it is. The cell side indicator is a sentiment indicator that's based on Wall Street's consensus recommended asset allocation. So Stock Sponds Cash, how much has you put in stocks at any point in time? I started that all the way back at EF Hutton. You mentioned Hutton before, and we continued it through Merrill, and Merrill still runs it today. It really just looks at the equity allocation and puts basically standard deviation bands around that. And as you might expect, when Wall Street gets really bullish, that's a bearish sign. Wall Street gets really bearish. That's a bullish sign.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“How long? I would say I would measure it in years. Really? Yeah, I think I don't remember the date of when we hit $5 billion, but I'm going to say it probably took us five or six years at least to get to $5 billion.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, well, you know, everybody talks about it being like a hockey stick, you know, the raising assets is sort of like a hockey stick where you think of as a turbocharger, where you're kind of going along and all of a sudden the turbocharger kicks in, you start really accelerating. That was the experience that we had in the firm. We had people who knew us as a group were reasonably willing to invest with us, but to the broader audience, it was much more difficult. And then as they got more confident, of course, the turbocharger started revving up.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Right? Like having cash or gold or all these different things that we would include in our multi-asset portfolios so that people would feel more confident in what was going on. It worked, but it didn't really work because it was.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely. It was very frustrating. If you look at our early marketing materials, you will find comments about what we called fire extinguishers. Right. And fire extinguishers were positions we would take in the portfolio that we could pull off the wall and put out the fire in the portfolio.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, it did without a doubt. I mean, but it was incredible. We were, you know, at the time, people were very cautious on the United States if they wanted growth, whatever they determined that was, it had to be in the emerging markets. It could not be in the United States. And we were bullish and we wanted to invest in the United States. And people just couldn't deal with that.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“So, two things one was that I was getting into an area that I didn't know and I knew I didn't know the buy side the way I knew the sell side. I knew that. And what I didn't know was how much I didn't know. And so the early fits and starts were trying to hire the right people. I didn't even know enough to hire the right people. Eventually that did happen. And we hired a guy named John McComb, who's still the president of the firm. But it was kind of Know off and on we were not doing all that well at the beginning because largely because I didn't even know who to hire or who not to hire because I was so inexperienced on the buy side So that was surprise number one surprise number two was that people would not invest with us at the time because we were too bullish And that was fascinating. That was really. That just makes you”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“So that's kind of how it began. And, you know, I don't want to say that everything went swimmingly at the beginning. No, you're starting a firm. You have, you know, like any startup, you have pluses and minuses and you hem and haunt. You do different things. But through time, it's worked out pretty well.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely. And so, you know, I just remember exactly where I was, and I said, well, gee, you know, this could be like a big bull market. And, you know, I actually at one point said to potential investors, I thought that we were entering the biggest bull market of our careers.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“It was definitely improving. And so, you know, the way I described to people is I said, you know, markets don't move on the absolutes of good or bad. Markets move on better or worse. And things were horrible in an absolute sense, but they were getting better.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, exactly. And so then the question was what was I going to do? I had toyed with the idea of opening an independent research shop and that sort of thing. I remember exactly where I was. I was in our den weekly initial jobless claims had just come out. This is like in July of 2009. And the number came out and it was a blowout good number. And I said to myself, this is a rogue number. And then I said to myself, well, wait a minute, why is it a rogue number? Maybe things are just getting better because I was listening to all the talking heads. And they were all negatives as all get out. And I said, let me.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“And then Bank of America bought Merrill, and they were great. And, you know, everything was good, but it was clear to me I wasn't going to have more fun. The burned out nature was going to continue. This was only going to get worse. It was going to get worse. So I just figured like, why do this? So I just thought I was leaving. Again, Merrill was fantastic. They encouraged me to stay. I just said, no, no, no, thanks, but I'm done, you know, stick a fork in me. I'm done. Hey, 20 years is a long time being a...”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“And so not lying about my age, I actually did turn 50. And I was pretty burned out. And then the financial crisis hit, and I thought, you know, it's the wrong time to leave. It'd be irresponsible for the chief strategist of Merrill Lynch to leave in the midst of a crisis. That's just very unfair to our clients, very unfair to the firm. You know, I rose to this level. I have a certain amount of responsibility. I can't be selfish on this. So I stuck it out for a while.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, I left Merrill because I've gotten burned out. I mean, one of the things that people don't realize is as a sell side analyst, the better you get at your job, the demands on your time grow exponentially. And so I was traveling all over the world. I was non-stop writing. I mean, I had burned out. And I tried to leave Meryl several years before. And they convinced me to stay. They said, you know, like, no, it's okay. We'll take care of you. Everything will be fine. Don't worry about it. But in 2008 in the financial crisis, I turned 50.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't think that was the root of the question because they had my resume. They knew exactly. And so it was really like, how old is this guy? You know, can he really do this? And so I lied. So I told everybody I was 30. That's hilarious. Yeah, it is kind of funny.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“That's all it was. Well, by the time I actually got the job and showed up at Merrill, I was 30 So I've never felt bad about it because I was asked in every single, like, why would they ask? They wouldn't ask unless they thought maybe I was too young. That would be the impetus for asking the question. Nobody's going to ask the question. Well, how much experience?”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Did you just pad your resume? No, that's legit. That's 100% legit. So what was happening was I knew that if I went to these interviews and I told people I was 29, they would think I was a kid.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, and they couldn't find out. So there was all kinds of stuff that they could do back then that you can't do now or can do now. Did you really get?”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Older. Older. Because I was 29 when I was interviewing for this position, and I knew that, and everybody, and back then you could ask people how old you were.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“I was there not for any other reason, to be perfectly frank, and I think the people involved at the time would agree with this, that in institutional investor there was a quantitative analysis slot. Merrill had nobody who was there. They thought, well, let's get somebody who can maybe run for this slot. We'll get another II vote, and we'll see what happens. And I was their choice to just kind of become this quad guy. I don't think they knew what to do with me. I don't think they were thinking anything else other than like, you know, go do your thing and hopefully this will all work out.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Like Schwab We're going to push into Main Street. Just for the thundering herd. You know, it's funny. One of the things I always tell recent graduates of colleges is don't try to plane out your future because when you're 21 or 22, you have no idea where you're going to do. When you're 25 or 27 or 30, you know, you really don't know. And my example of the changes after the Reagan Corridor election are pretty clear on that one. But the same thing was at Merrill. You know, I kind of came in as a quant analyst.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, if I'm not mistaken, Charlie Merrill was his whole philosophy was bringing Wall Street to Main Street. I think he actually coined that phrase.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“I was So it was, you know, I think it was an interesting time. And, you know, I should say, first of all, the Merrill was a fantastic place to work. Totally. It was, you know, anybody out there who has worked at Merrill knows the feeling that I have for the firm because they feel it too. And it was a great place to work. The corporate culture began to change in the few years before the financial crisis. And we got a little bit away from our roots. You know, our roots were very much as a private client-oriented firm that also had great trading and investment banking and everything else. But the heart of the firm was still on the private client. So for any number of strategic reasons, the firm decided that we wanted to change that emphasis. And I think it's kind of dangerous to take a lot of risk when you don't really have the experience doing it. Sure. And so I think that's kind of what happened to Merrill. You know, I mentioned the...”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source
“It was by accident. It was like switching managers type thing and somehow it got put into the wrong file, wrong set of files. And there was mine. So of course I read it.”
2025-07-11 · Masters in Business · Richard Bernstein on the State of Markets Today · IDENTIFIED FROM THE TRANSCRIPT · source