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Ted Oakley

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2022-09-19

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2022-09-19

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1. “Well, it happened at March 2020 because of the Fed, not because of anything else. It wasn't any... There was any reason for that other than the fact if you produce enough money to buy something, you're going to get back into it. And I don't see that happening again, though. I think they realize the era of that, and I'd be surprised if that really surprised that that happened again. So I don't see any sort of a melt-up. And typically off of a low and bear market, it's a gradual thing and people look up and say, no, we're not going up. We're not going, but you keep on going up. And then by the time you get out of here and a half or two years, oh, we're in a bull market. But, you know, if you left the first 25 or 30 percent on the table. But that's usually the way they happen. We'll see if it happens that way this time.”

   2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

2. “What if we're right? Okay, and I always use this as an example to say, well, if you're wrong, you can make an adjustment and get money into the market over in time. You don't have to stay in cash. But if we're right and you do have liquidity and you've got some preservation of capital, it does set you up to where it gives you a lot of choices on what to do, say, you know, nine to 12 months from now. And so that's a way I would recommend it to people to look at. I don't think you have to be all in or all out, but I do think you should have some of your capital in a preservation mode, and that would be my advice to you.”

   2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

3. “Well, I guess my party message Jack would be this we could very well be wrong that it's going to be a tougher time the next two to four quarters, no question about it, that I would say that you don't have to believe me on that. We're not infallible.”

   2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

4. “Where you have 10, 15, 20 to 1 downside, you're getting to a point where everybody's throwing everything away. We look at the technicals too. That's not what we trade on. But I mean, we'll use it though at bottom lows at that time.”

   2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

5. “No, it's both, really. But I would tell you that one of the things we used technicals for is when you get into lows in the market, and what we look for is, you know, what will happen on those cases, your multiples will be compressed. You'll have low multiples, your price to book will be down. It won't be like it has been the last two or three years. Priced to sales will be down, you know, at good levels and that sort of thing. You'll start to see valuations like we'll look at something and say, you know, that company's worth a lot of money, but it has to be unwound in here. I have to see it. You'll see a lot of things that show up like that. On the other side, most bear markets will come with the latter part of it being in a short period of time. They get real aggressive on the downside. People just throw in. And we have a number of technical things we use to look at that. We'll know when you get to a point.”

   2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

6. “Of the best buying opportunities. So, what would be happening then would be all of that would be in the past, and maybe we're seeing some sunlight out there. I'm not saying it wouldn't happen. Of course, I have to tell you, Jack, man, I've been wrong so many times in the business that I can't count. So it could very well be wrong. Again, I will say this, though, we adjust. And one of the things we really believe in is we've made an era and we've made a lot of them. We make an adjustment and try to move with it if we can. I think that's the mark of a good money manager is you have to be able to say we didn't look at that correctly and we need to make a change. And I think that's what we would do if we saw that for sure.”

   2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

7. “Well, if that happens, it would have to have been something where they've got a handle on inflation, interest rates quit going up, companies started making more money or seeing that they were going to make more money. And you had a period where you'd already gone through, let's say, higher unemployment and now it's going back the other way. You're starting to employ people and that sort of thing. And so that's what happens. That's what happens at lowe's in the market, that when you go forward, especially the first in the money really, a lot of money is made in the first one or two years of off a market low. And I don't think people understand that a lot of times because they haven't had to spend a lot of time on the market low the last 10 years because of the Fed. But when you go through a true bear market, when you get to the end, it creates tremendous opportunity usually.”

   2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

8. “Have to get to the point where they just throw it in and say, you know what? I'm done. And we don't see that yet. In July, interesting, the MEM stocks, everything just came right back as if nothing happened.”

   2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

9. “To wring it out. And so I think I'd have to compare this one more to 2000. I wasn't in the market in January 73, but I was in the market in 75 and 76. And we had tough times with inflation. And so, you know, in the late 70s up through 82, we had every year we'd have a 20-25% sell-off, and they would rally back and that kind of thing. We had a lot of inflation. So it was a tougher time. But this one is more of a bubble look. If you just take, and one of the things I see is that people are still in denial on cryptocurrencies, on spacs, on all these companies that have no revenue, that don't make any money. Well, they're going to come back. Well, you don't come back from nothing. And our market letter last month, I wrote a little piece that said nothing from nothing leaves nothing. Well, that's true. That hasn't happened yet.”

   2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

10. “Well, this one I have to compare to late'99 and early 2000. I mean, that's to me the same. That's where you have these super bubbles. Everything is just totally expensive. The thing about OA was it was caused by it really was caused by one group and that was the housing subprime area. There were a lot of value things that still looked okay at that time. But now and over the last two years, everything got expensive, much like it was in 99 and 2000. It's probably worse than it was then. I think there's only been maybe four or five super bubbles in 120 years and that 29, like I said, 73, 2000. This was one. And it takes, when you get something like that and people do the craziest things and pay the craziest prices for things that don't matter, then it just takes a long time.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

11. “Know it's not something we, that's not from an investment standpoint, that's not. Because that's what really creates a thriving economy. You get rid of the weak hands and we went through a period a long period where there were no weak hands because they took care of everything and so they had enough money to keep that going.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

12. “Well, the big governor, you know, if you look back really Volcker was the only Fed governor I thought really did it correctly, which was we're not going to tell you a whole lot. We're just going to take care of what we should take care of. And one of the things that I think they miss is that they forget to talk about the money. So, you know, how much money is out there, what goes on. And of course, they dare not say back to Congress, for example, hey, fiscal policy, hey, we need some here, okay? We need you to take a stand on a couple of things. That never happens either. So I don't think it makes a lot of difference, really, because a lot of times they'll say what they're going to do and they don't do it anyway. So, you know, just look at last year all year, it's transitory, it's transitory, it's going to be okay. And of course, all the while it was building right underneath them and they couldn't see it. So we'll see what happens.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

13. “They are, but if you look at, first of all, if you look at most of the Fed presents, they should basically muzzle them and say, hey, you can't be out there talking because they all want to throw in and get it interviewed and have this, that, and the other. And most of them really don't have an idea. They just don't seem to be tied into what's going on on Main Street. I mean, that's the problem, and it's always been the problem. And so, you know, they get a lot of information, give them a lot of data given to them, but they have, you know, when it comes to empirical evidence, let's go down. Let's walk down the street and talk to some people, some businesses. They never get there.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

14. “I hate to be so negative on them, but I mean, they've just, you know, look at 20 years worth of what the Fed has said at each Fed present. And I can give you 15, 20 statements they've made that are completely, completely false. And so we'll have to just see.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

15. “Probably not. I mean, if you look at the last 20 years, this is a whole group of people. They were unelected, by the way. These are not elected people that have caused a lot of trouble for this country and really for the economy. And if you look at the last nine months, just think about it, what's going on with them. They're really hanging their head on unemployment and they're tightening into already a recession. They're tightening into slower times, which is really reverse of what you should be doing. And we've never seen that before. And so you can tell that the left hand doesn't know what the right hand's doing. And so, no, I wouldn't give them any, I wouldn't give them any accolades.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

16. “You know, I think, Jack, they're in a spot like we were. If you look at the late 60s, where they had spent so much money on the wars and really we produced all this money in the economy. So when we got into the 70s and you look at the Federal Reserve at that time, they started doing what this one's doing. They lowered the rates and they had to raise the rates and they lowered the rates. And finally after 10 years, eight to ten years, they had to really raise aggressively to try to break the back. And I don't know that that's where we are now, but I do think we have a Fed that's similar to those 70s where they juice it, back it off, put more in, back it off. They don't really know. That's the problem. And you have all these people with that group that none of them have any experience on Main Street. So they just go along with the PhDs that are in the ivory tower.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

17. “Well, if you take the effective Fed funds rates probably around 230 or 240, the stated rate would be 250, and they're going to probably raise it, let's say they raise it three-quarters this month to three and a quarter. There has to be a point where your Fed funds rate and your inflation rate are fairly close, okay? You know, Tuffle for bond prices, for that matter, you'll have to know what you own. But I suspect that somewhere going forward, they will have a different kind of world. It doesn't have to be run away inflation. But it has to be something that is higher than what we saw the last 10 years.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

18. “Well, you would have to think that we would not go through a period, Jack, like you just mentioned, where the Fed did such a disservice during that 10 or 12 year period to everyone, really, by keeping those rates there. And obviously, again, a totally irresponsible Fed and physical government too, if you want to get right down to it. But the problem with that is now we're paying the price for it. So we probably will not go back to that again. I doubt seriously, and people will say, well, you know, we're not going to have 8.5% or 9% inflation, but we'll have 5 or 6. Well, five or six will be a different investment where it is the last 10 years. So I think you will get to levels that you won't go below. I'll be surprised if you go below that because they just push too much money out there. And as Milton Friedman would say, the only person that can create inflation is a government.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

19. “Off every month or every quarter with more paper. In other words, it keeps us really a little shorter term. And that's where we head with those. We were not doing any of that right now.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

20. “Well, we don't see any right now, Jack. The one thing, you know, we've always traded in the Jenny May market more than Vannie Mayor or Freddie Mac. They're okay now because the government's involved with them. A lot of people lost a lot of money, though, back in 07, 08, and 09 because they were in that marketplace with those two. But for us, when we want to buy mortgage backs is when we feel like that you're going into a lower interest rate environment. And I don't think people realize this, but if you take a group of mortgage-backed securities and rates keep going up, that means people never pay those loans off. So you can't use what is a normal definition of where maybe an average maturity may be. So that's the problem in a rising rate environment that keeps getting extended. We'd rather buy the mortgage bags in a declining rate environment for this reason. We want to get paid.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

21. “Well, they have whined, Jack, but what happens is, and we've always tried to mention this to people, when you're buying high yield or what we call junk debt, it really equates to the same as a stock. So you don't buy that until you get a low in the market because it's just going to keep on going down. There's a lot of those companies that won't pay. Those spreads will keep on widening. And so you get into trouble. I think where the value lies is in the municipal market. If you look at municipal curve right now of yields, there's a lot of yield out there that's over the treasury yield, not in the one and two and three year, but you get out a little bit further, say, you know, eight to fifteen, that kind of thing. Be surprised at how much more there are those municipal yields are. And I'm high grade too. I'm talking about really high grade paper. So I'd rather go that way.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

22. “That's why we like that group quite a bit. And the Common Stock area, what happens is. A lot of the gross stocks that we might look at, maybe this could make a grow at 15% or 16%, 18%, what we would like for it to, we've had to reduce those down. And when you reduce them down, you've got to buy them cheaper. And that's where we are. We'll buy the energies again too. We own them now. I mean, the energies, but we'll see where it goes from here.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

23. “Well, if you get the right real estate and you have to be, when I say the right real estate, it has to be the parts of the market where you know that they're going to need what you have. That's why we have primary medical. We don't see, but if you use demographics and you use the things that go into that, we think that's an area that while it could be somewhat affected, it's usually not affected much. You don't find many physicians' offices closing down because times are tough and that kind of thing. So that's an area we really still like. We obviously think that's fine. If you look at natural gas pipelines, you know, their throughput is there no matter what. So, I mean, you're going to burn natural gas. You may be burning it at $5 an MCF or $10 an MCF, but you're still burning it. And that's...”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

24. “We own a couple of medical REITs that are really great yields for us. We own a good convenience store wreath that does well for us. And all in all, we try to pick and choose. We have about, you know, we have a small percentage, 4% or so in gold miners and gold. And that's where we are sort of in those two categories. And the stock side, you know, there's still some stocks that we think we own and we think they'll do reasonably well. We only have about we're only about 48% invested in stocks right now. But if you look at what we do own, you know, we own Visa MasterCard. Those are the kind of companies that will continue to do okay even in rough times. People continue to use a cards, do things along that line. O'Reilly Automotive. We have a lot of things. We try to buy things that you're going to use no matter what during this period.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

25. “And we had a lot of, we got a lot of heat for that last year, but we felt that's where we should be going with it because we could see rates were going to rise. And so, you know, you can get some really great yields right now on six months, 12 months, 18 month U.S. Treasuries. And secondly, we do have, you know, we have a seven or eight position position in the longer bonds. We won't add to that right here, but we've always had it on the outside. In between, we own a number of things that pay some really great cash flows in that strategy, and we have another strategy called high income. We own a lot of the great preferreds and some convertible preferreds. We're getting six, six and a quarter, six and a half percent on all of those.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

26. “Well, we have a mix right now. If you look at, you know, we have three strategies, but I'll just take the most conservative strategy, which is really just called conservative income. And we have probably 75% of that strategy is within 36 months or so of maturity.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

27. “Well, what happened back then was if you look at those companies, and a lot of the industry, including them, MLP business, by the way, in the first decade of the 2000-2010 or 12, they had too much debt. And that really caused a shakeup in the industry, not only the producers, but for the pipelines, because they had some companies didn't make it because of that. And that's what happened. Now, there are a few companies that still have quite a bit of debt, but generally they've been able to manage that pretty well. And I think those companies, they'll continue to do well. And you might even see more companies buying each other up because they can see how, hey, we need to grab these companies while we can still get the reserves.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

28. “And is it different now? Because I know during the shale boom of, let's say, 2009 to 2014, production of natural gas exploded higher and it was a quote success in that regard. But on the investment side, a lot of companies lost money even as prices were pretty high and eventually went bankrupt. Is it different now when pretty much no matter what oil or natural gas company you look at, they are printing money, so to speak, just, you know, many of them trading at 10 or even five price to earnings ratios. And also, do you expect that to continue?”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

29. “In the US, we own oil and we own natural gas pipelines, that sort of thing. Just have one of our companies get bought out today, Brigada So Brigham's a stock that we own for really for a number of years now. It's a great royalty company, but that's a kind of thing you have to find what you want to own and really get the price you want. But I think there have some opportunity in that, but you're going to have to get through weaker economic times first, I think.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

30. “Well, you know, for us there's nothing for us right now to do. We think a better buy would be eventually to buy the not necessarily for Europe, though. I think they're so far behind on what they're doing. You know, you've now look at Germany, they've reversed themselves on the nuclear, and you've got, you know, you're starting to see them think about, hey, in this idea that they're going to the Russian oil price, I mean, it's a far-flung idea. Now, maybe they could make it happen through their insurance companies. I don't know. But I do know this. If they start to play hardball like that, it's probably going to be more damaging to them than it would be Russia in the long run. So we don't see anything there that we want to, oh, in that part of the world that we want to do right now.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

31. “Sort of a two edged sword right now, Jack. What happens on the oil side probably is happening is that it's starting to discount a recession or a slower economy. Now that doesn't mean long term. It's not a great buy, but in the short run, that's what it looks like to us. On the other side, you look at natural gas and a lot of companies are producing more natural gas because it's in the U.S. It's around 850 and MCF. you know, they're starting to produce. They like to produce at that level and we've got a lot of gas. So they have a tendency to do that. Oil, I think they'll produce as much as they can. But it's a slow process and they've had them out of the market for finding oil now for a couple of years because of this administration has been the one that really unfortunately has really beat their oil companies up. And so they've had a tendency not to be as aggressive. But I think one of these days they...”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

32. “If you look at Russia, which controls a lot of oil, if they want to cut back on that oil, they can really move that price a lot and really put a lot of people in trouble. So I don't know where that ends up. Oil is certainly something you have to look at the next five years.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

33. “Well, they talk a big game, and we don't really and never have really believed anything the Fed says. I mean, if you look at their track record, it's very, very poor. And so people that want to get around and talk about the Fed, I'm not certain why, because if you look at what goes on, there's nothing there that would lead you to believe they can give you any insight to what's really going to happen. But having said that, I think what would happen is, and this is where you can't believe them. Let's just say that all of that happened and the market gets down 40 or 50%. I doubt seriously at that point that they're going to really keep their foot on the gas here.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

34. “I don't think so. I think it's a way, and you've got it longer to go, I should say. It could be wrong. Maybe there's a saving grace out there. I don't know. But if you look at Europe and the Far East, if you look what's going on, it could be a tough winter for a lot of situations. And so I can't see that right now.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

35. “Well, everybody owned tech high tech, and they owned it, especially there's ten or twelve stocks that they all own and everybody owned them. Those will be hit harder, I think. I think those will stay under pressure as you go along. I think a lot of that has to be wrung out of the market. And then you had so many companies, Jack, that really didn't make any money. Somebody didn't even have any revenues. And people are hung up in them. And I think all of that has to be wrung out. You already see it in the SPAC market. You see so many SPACs that are down 90, 95%. I think that'll be a big hit. Probably crypto has a long way to go, but all of those speculative excesses will have to be rung out of the market till you get to a point where people are just basically disgusted. That's when you get a low.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

36. “Now to somebody, they're going to have to have a 5% mortgage. Going to pay me less money. Maybe I can move out of it. Maybe I couldn't. I mean, see, all those things are ahead, and we haven't really gotten to that. But we're getting there, but we haven't gotten to that point. But that'll be the first thing. Second thing will be unemployment. You know, that'll go higher. And all of those things lead into people buying less and doing less and going less. And that's where it gets into the companies.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

37. “Well, there's a number of reasons, but one, I think housing hasn't really started to hammer it yet, but it will. And people forget about housing being really a major driver in the economy. And so when you look at that with housing being a driver, it's just started to show. See, housing comes in late. It's a late indicator because it's slow. Same way with employment. And so when housing comes in and gets weaker and weaker, which we think it will, we think it just started. Now when that happens and you're going to get in a situation where people are locked in. In other words, they spend too much on a lot of different assets and particularly housing and real estate and they can't be mobile with it. They can't move around because they're locked. And if I paid, if I'm a young person, I'd pay a million and a half dollars for a house. I leveraged it. And now, you know, I'm at a 3% rate on, say, a big mortgage, but I want to sell it.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

38. “Well, the short term Jack would be Federal Reserve, yeah, because but I don't think that'll be the long term. In the long run, I think it will be the economy because what will happen is you'll have somewhere along the lane you would have probably two quarters of reasonably significant downturn where it would get into the see we haven't gotten into unemployment yet But when unemployment starts rising you get into real that's when you're in a real recession And so we haven't gotten that yet you should barely touch it but it's once that starts and gets deeper then you're in a real recession and then you're in a situation where companies are going to really have to adjust out earnings etc but that's what makes a low I mean it's there's opportunity in that I wouldn't necessarily be so negative about it but I think you're gonna have to get into that for a couple of quarters before before it's all over with I would say”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

39. “And so it's very hard for them to get their hands around this, and that is, okay, this could last a long time and you can't, and they're all on the same mantra, which is, well, just keep on buying. Well, that will not work when you're in a tough market. You're going to have to have some preservation. And that's where I think we are right now.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

40. “Well, the difference between this and, say, 2008, for example, is this market was a super bubble market. I've never seen as many things in the last 18 months that were so expensive and not just stocks, but I'm talking about bonds, private equity, private real estate, you name it, Bax, crypto. I could go down the list. Everything was in a bubble. And that's more like 2000 or 1973 January, more like 1929, where you stay in the bear market longer than normal. I mean, the people that have been around this last decade 10 or 12 years only saw, they saw a bear mark for about 40 days in March of 20”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

41. “Yes, I do. I mean, I'm sure everybody has their own point of view, but for us, one of the things that we say, and right now, is that, you know, if you look at the last 12 years, there's all these people in the industry that have never been. And I think that's where we are now. And I really suspect that the next three to four quarters will stay under pressure. I'm not saying you won't get any rallies. You certainly could. But I think if you just look at the headwinds here, we're going to be in a place where it's going to be tougher.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

42. “Well, if they got cheap enough and we had the numbers, we would buy them. I mean, normally that doesn't come until you get to the low end of a bear market normally. That's when your multiples, you know, let's say everybody's thinking that, okay, hey, we were at a 22 multiple and now we're at an 18 multiple, well, we don't think we're in an 18 multiple. We think the multiple as you go forward over the next 12 months is much lower than that. I mean, much higher than that because earnings are going to be down. But eventually the prices will go down far enough to where you can make it work. We just don't think you can make it work right now.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

43. “Well, it factors in because if you look at a five-year growth rate, you're going to naturally discount it by, you know, you'll try to discount it by some inflation rate. What we usually do is discount it, and then we'll try to take that President value number and buy below that number. So you have sort of a built-in two-way help on something. The problem about last year was they were so expensive, Jack, that it didn't make any difference what the interest rates were. Everything was so expensive, and if even if you calculated a high earning rate for the next five years, you still couldn't make it work. And that's what we got into last year. Nobody could see it. I mean, they were all sort of drunk on the numbers, but that's where we were last year.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

44. “Well, I think the cost thing overall, Jack, is happening to every company, not just those stocks, but those stocks, if you'll notice, a lot of their advertising revenue is down, a lot of really just a lot of people going to their sites are down somewhat. And if you tell, we don't own this stock. If you take Netflix as an example, okay, people go on. They take the service, they watch the two shows they want to watch, and they drop it. And so, you know, it's that kind of thing where they can't really keep that consistency up. So I think that's where a lot of companies are headed in here where their numbers just won't match up.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

45. “Well, if you just take, for example, the Fang stocks, you know, as a group, they were down 10% in earnings from a year ago. So that's the kind of thing you start to see. Now, we own a lot of things besides, that's not a big, big area for us. But I will say that what we're finding on companies in general is they're starting to announce now that we're not going to hit the number or they've decreased their expectations so people will think they beat the number when they really didn't. If you go back six months from then, they didn't beat the number at all. And that's where we are in the stage of things. And I think there's more of that to come. And so for us, right now, what we'll do is we'll just, we're sort of at a waited out type thing. I think people have to wait this market out or they'll make some mistakes.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

46. “You have to decrease your expectations and where you want to own a company. And so we have very, very few companies that really fit into a category where we would want to start buying heavily. So we're sort of like we were. We're just at a sort of a downslope revision of it from a year ago.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

47. “Well, a year ago, Jack, what was happening is we have about a 200 stock universe that we would own or we'd like to own if we could. There are companies we like. But a year ago, they were all overpriced and it made us start to, from that point forward all the way up through really January, we were raising cash more than normal because we really was anything for us to buy in that slot. And so that's how that looked. Now, as we came into this year, we've had the most cash we've had in many years, actually. And so by the time we got to, let's say, May, June even, if you look at the, what we think are going to be the numbers for companies over the next 12 months, then it's hard for us again to see any great value. And I'll tell you why once you decrease the earnings.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT

48. “Well, what we do, you know, the way we really started many years ago is we started working all over the country and with people that sold companies because they get a lot of money. And that's still sort of what we do today, a lot of that. But our work goes, we do look at the macro top down, but most of the work we do is bottom up. I mean, we look at the companies, we look at the securities, look at the bonds. We don't do a lot of indexes or exchange-traded funds or that kind of thing. I won't say we never do one, but it's rare. And so from our standpoint, we're old school in that we run about three basic strategies that are easy to understand and really believe in the value work. And so that's where we head from here.”

    2022-09-19 · Forward Guidance · The Bear Market Has Only Just Begun | Ted Oakley · IDENTIFIED FROM THE TRANSCRIPT