The Dividend Cafe - Market Outlook w/ David L. Bahnsen - Zoom Replay - Apr. 5, 2021

Episode Date: April 5, 2021

David and Scott recap Q1 2021, discuss economic outlook looking forward, and explore opportunities for investors in current markets. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Welcome to the Dividend Cafe, weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. Well, thank you, Erica, and I'm going to turn it over to my co-host, Scott Gamm. It's funny, we've been doing this for over a year and every single one that we've ever done, I had some kind of, you know, margin beforehand. Even if I had meetings that morning or other things going on at the market, I always had like five minutes or 30 minutes or something sitting at my desk, getting set up and this and that. And this is the first time that I literally am sitting down in front of the camera for you all running from a meeting I just had here in Midtown Manhattan. And so,

in fact, Scott, I would love to even make a few comments about the meeting I just had later on that are maybe a little more peripheral to some of the stuff we're going to talk about. So I'll let you approach that. But yes, audience, for those who can't tell, I'm sitting at our office in New York City. And Scott Gamm, who continues to graciously co-host this national call, is going to lead us. And you all are free to send in questions real time throughout the call to questions at thebonsongroup.com. With that, Scott, over to you. Well, David, thank you very much. And as always, great to be with

you. And before we begin, David, as many people watching may know, it was an exciting weekend for you and your team, the sixth year anniversary of the founding of the Bonson Group. So congratulations to you and your team on that. And, you very exciting time for you guys. Thank you, Scott. I guess I should clarify, it's the six-year anniversary of us as the Bonson Group being independent. We, of course, existed before that at Morgan Stanley. And so I sort of view it as the 2.0 phase, but us as an independent fiduciary entity, April 2nd was the day that we walked out the door. And so we celebrated that six-year mark over the weekend. And as I said to my team, it's one of those things that people can say it feels like so much longer and people can say it feels like so much longer, and people can say it feels like yesterday,

and both things might be true in their own context. And with that, David, we will do what we do, which is talk about the markets. And we've got record highs, the S&P and the Dow today. NASDAQ still a little bit below where it was trading at a record back in February. And I'm just curious, you know, your overall temperature on where things stand now, because it's been a pretty remarkable first quarter of 2021 with stocks up about 7% across the board, at least. Yeah, it's interesting to see kind of different levels

in the three major market indices, I think. And I'm going to pull up a little sheet here on my screen that our team put together late last week. But the NASDAQ was still up year to date. And in fact, through the end of first quarter, I believe was up 2%. But then the S&P was up a pretty good amount more than that in the 6 range and the Dow in the 8 range. So that's a total reversal of the return levels you saw in the different broad indices last year, where the NASDAQ was up the most, S&P in the middle, and the Dow at the end of the pack. end of the pack. But that's basically the same thing you're seeing across the board, whether you're talking about sectors, whether you're talking about market indices, that more or less you're seeing quite a bit of reversal from last year, an inverse response.

The leaders of last year are the laggards this year and the laggards last year, the leaders this year. But look, I think if when you talk about the NASDAQ, for example, being the laggard, and the largest company in the NASDAQ and the S&P 500, it was down in the first quarter 7.8%. And yet, I don't know, when you look at it versus the returns that tech investors experienced last year. And for all of the mean reversion and everything that is a theme I'm very tapped into and believe in, it really has not been that bad. And so I think that probably most people in any shoes that they're wearing right now, unless they're completely out of equities or only in the long treasury bond, most investors probably are pretty happy with how 2021 has started. Well, and on that note, David, I mean, you know, when we would do these calls throughout last year, you know, the number of worries we had and subsequently the speed at which we have really kind of sort of crossed those worries off the list, I think a lot of people would find pretty remarkable.

So maybe the question now becomes, what else is there to worry about for 2021? I mean, what risks do you see? Is it rising taxes? Has the market really acknowledged that or priced that in? Or what should we be thinking about that maybe people aren't talking about? Yeah, I think you were on the call on the other line with me this morning when I was on with a reporter making the comment that when sometimes the thing to be worried about is just being back to normal. In other words,

what you could risk during a pandemic and during an economic contraction and during all the event-driven moments of the last year from the jobs picture to the election to to obviously economic shutdown that when those things clear out you go okay well good everything is clear so what do we have to worry about now? But of course, the answer is whatever you had to worry about before, which is the fact that you have a turbulent world and an economy that forever will be subject to various combination of headwinds and tailwinds. And that includes geopolitical risk. It includes fiscal realities. It includes significant questions about GDP growth. Those are questions that never even got remotely answered post-financial crisis. How are we going to get this economy back to

trendline growth? And that has a lot of implications for investors in both debt and equity. And so then you have certain things that get a lot better. You have a really significant performance and risk assets in both 2017 and 2019. And then all of the things that were on the table that were big questions, either midterm or short term, but especially long term type considerations, they all get tabled for COVID. And to deal with the ad hoc realities of the pandemic and its economic ramifications. the pandemic and its economic ramifications. So now, as we see the light at the end of the tunnel, we see the pending herd immunity, we see the success of the vaccination. I think that then we just have to get back to a point where we're kind of back to normal. And I mean that in a lot of different ways. But normal always includes a combination of risks and rewards and upsides and downsides and headwinds and tailwinds for investors.

And at the top of that list for me is my desire to see a return to trendline GDP growth. And I don't believe we're going to get there. I think that one of the remedies to the COVID moment and one of the remedies to the financial crisis was a structural change in monetary policy in our country and certainly comfort level with changing fiscal policy in our country, namely running deficits that would have previously been unspeakable for both parties. And now those things being so normalized that I think they represent secular downward compression on GDP growth. So there's a lot out there to continue to consider. And yet there's a lot out there to be invested in along the way. So what does that risk of a lack of trendline GDP growth means for what traditionally drives markets, which is corporate earnings? And, you know,

I guess what's the spread between the two? How much does that GDP growth matter for earnings, which in turn, how much does that matter for the markets? Well, this is a difficult question because there are some people who I think inherently have believed that ultimately corporate earnings follow GDP growth. And yet what gets missed in that is proficiency and execution and success. The notion that everyone is tethered in together is inaccurate. There are, even in an overall environment, I'm making up this analogy right now on the spot, which I am very prone to do, but I have basketball on my mind because of the NCAA tournament. Look, a team can go out and

lose a game, but that doesn't mean one guy doesn't have 37 points, even though a couple other players may be scored less than their normal scoring average, right? That's a pretty good analogy, by the way, I have to say. Usually like seven seconds into my made up analogies, I think of a flaw in it, but this one I'm liking so far, so I'm going to stick with it. My point being that in a period of trendline GDP growth that is subpar, you can still have standout performers. And standout performers, for my money, are more likely to be in corporate America than they are in governmental America, or than they are in Japan or Europe, for that matter. And so this is what you've seen. We had a trend line of real GDP growth, both globally and domestically, that we have failed to get back to

since the great financial crisis. And yet you've had corporate America create record profits. There's been an aid and assist in that from the Fed, but nobody can deny that they've been unbelievably proficient at managing the balance sheet, managing the P&L, organic growth. For the most part, they've been good operators. There's plenty of bad operators in there, but that's what you expect in a free enterprise system.

And so real GDP growth, when I speak to it and disappointment in what I expect to be a failure to get back to trendline real GDP growth anytime soon, I don't necessarily refer to that in the context of corporate profits. I don't necessarily refer to it in the context of stock market performance. I refer to it in the concept of job opportunities for young people. I refer to it in the context of wage growth. I think this is the stuff where it becomes a little less investment-oriented and a little more macroeconomic. So just sticking with the investment theme then, as we get back to normal, there's obviously a lot of noise as to, you know, what sectors are going to outperform. And you kind of mentioned it earlier, you know, the laggards of last year are the

leaders of this year. But in terms of where you see opportunity, I've heard you mention consumer staples as one sector that you think is undervalued. You know, unpack that thesis and kind of what about the consumer staples sector is important to you as we look ahead to this post-COVID world? Yeah, I definitely have said that and I'll continue to say it, but I should add to that from a relevance or application standpoint, I would not go buy the consumer staples sector. I would buy the select names in the consumer staples sector that I think are beneficiaries right now for buyers of an overall negative sentiment in the whole sector. So you have an overall negative sentiment in the whole sector, but you have standout performers in the sector that are still receiving the kind of pricing treatment of the whole space. And so without getting into specific names here in this call,

there are literally several companies that we think are really performing quite well, innovating in product development, innovating in new markets, have been wise stewards of their balance sheet and deserve a higher rating. And even apart from that, from a stock price standpoint, which I think matters to most people, it doesn't matter that much to me. I'm never, as a perpetual buyer of equities, in a hurry for the stocks I'm buying to be going higher in price. I hope people can understand that, but I mean it very seriously. But I mean their organic free cash flow generation is stellar. And, you know, the same is true in financials.

The same is true in some industrials. Same has been true in a couple other areas we were in that were out of favor. Some private equity asset managers that are publicly traded. Some of the energy names, although there's still plenty of story to talk about there. But the consumer staples just happen to be an example where I don't feel any disappointment in execution or operating performance. And yet the pricing is not caught up. And so that's what always you're looking to do as a contrarian is find things that the price and value might be disconnected, certainly on an absolute basis, but even on a relative basis

as well. So that's sort of our thesis around consumer staples right now. And David, maybe the same could be said about one particular corner of the tech sector that you're fond of, or at least one corner that has specific companies that you're fond of, old tech, which may sound vague, but when you think about it, it's, I mean, when I've heard you, you know, describe your thesis on that, I mean, it certainly makes a lot of sense just kind of juxtaposing the sort of, I guess, newer tech companies of the past decade that everyone talks about, coupled with the older tech companies from decades ago that no one talks about or few people pay much attention to anymore. Yeah, I appreciate you saying that because it's my opinion that my thesis on old tech is very

compelling as well. And yet, you know, this it's not a popularity contest or a matter of persuasion that things will be vindicated or they will not. But I think the biggest argument against old tech and uncool tech and boring tech and long established familiar tech names, three of which were invested with in our dividend growth portfolio. I think the biggest argument against it would be, well, they're not going to go compound at 20 to 30% a year for the next five years, to which I say I agree. And I got some news for you. years to which I say I agree. And I got some news for you. Either or the other names. And if people believe those new tech, big tech, cool tech names are going to compound again, 20 to 30% of the next five years, then that's really where they should put some capital.

And I think they're insane. I think that that's literally crazy, crazy talk. And by the way, really good argument for the overvaluation we may be suffering through right now. So once you accept that the opportunity cost argument is not really super compelling, I look at it as a risk reward proposition as I look at all investing decisions. And I think you do have some names that, first of all, are vital to the entire new tech, cool tech, big tech story. The existence of the technology infrastructure, the hardware, the services complex, the routers,

the servers, the microprocessors, the semiconductors, there's this kind of ecosystem of technology, and it's never going to command the PEs, the rapidly growing e-com or social media type names, platform names might at least some point in time really not only command, but deserve. I think that, however, apart from the PE expansion, they have incredible free cash flow growth. And from a risk-adjusted standpoint, they have a really unique balance sheet that's almost more utility-like in terms of really dependable cash flows and yet plenty of money in the bank, very low debt-to-cash ratios and things like that, which I think matters in a high PE and high leverage part of the cycle. That to the extent we get into some of the big headwinds

people are worried about, not pandemic headwinds, not once in a hundred year health scares, but more broad-based repricing of risk assets. I think those things are gonna matter a lot. So you have a bit more defensiveness and yet you still have a really compelling business model. And then lastly, you have, I think, an unpriced call option. And what I mean by that is the businesses are mostly priced in old tech around their core businesses, their cash flow generation, their balance sheets, some of which are still growing, some of which are a little slower growth, what have you. new ways that they're approaching the chip industry, redefining in some cases the way that they become more of a services and consulting company versus just a network and router company.

So I'm kind of saying all these different aspects of business models and the real-life examples to real-life companies. I'm just not saying the names of the companies. I don't know. All of these companies have other things that I think represent growth engines that in my mind are not priced in. And so I like the idea of a free call option on the future, along with really steady business along the way. And of course, for us as dividend growth investors, really attractive dividend yields that are growing year over year over year.

Well, and I think as we sort of cut through the noise in this post-COVID world, and I hate to keep using that phrase, but that's kind of what we're dealing with right now. I think perhaps investors will finally start to look at fundamentals, which may have gotten lost in this surge we've had over the past 12 months in terms of the broader stock market, where it seems as though everything can just go up for an indefinite amount of time. Yeah. So your question is more just around timing of... Rephrase the question for me yeah well no i mean i was just saying you know it seems like some of the the the traditional indicators that we use to look at stocks may get

lost when we've got a sort of a violent move up in the stock market as we've totally kind of had over the over the past year yeah and and you know in know, in fairness, that's been true, not just in the kind of extraordinary post-COVID moment, but I would argue that the relative pricing afforded to new tech versus old tech, that there had been a growing disparity there even pre-pandemic. even pre-pandemic. And so it all the more to me makes the case for, again, unless one wants that 30% annual return, I think that it makes the case even more for a relative superior risk reward trade-off in old tech. I think it's been a few years in the making. And yet, by the way, it isn't like there's been bad returns in these names. It's still been quite impressive. And by the way, it's still been really great free cashflow growth. And that's the thing that you have to

understand. Something in the range of half of the investing public cares about more is their income, their growing income. They're getting more and more reductions in coupon from their bond portfolio, more and more risk required in credit to achieve the same income. And yet these old tech names and others that we've talked about, consumer staples and so forth, are continuing to see that free cash flow grow. And so all of those things together really are part and parcel of the underlying investment thesis at the Bonson Group. David, let's also talk about some of the things making headlines lately. A lot of people are wondering whether or not we're going to get an infrastructure deal. And of course, that may have potentially short-term market implications.

What's your take on whether or not we get a deal and kind of how investors should be parsing that part of the picture? Well, if anyone had asked me this, and of course, plenty of people did, six hours ago or six days ago. I would have said, of course, we're going to end up getting a deal. And yet this deal is not going to come as easily as these various COVID relief bills came. At least the first one and the third one. The second one obviously took a little longer. And there was a lot of kind of political stuff attached to that delay. But no, I would have said like any significant piece of legislation, whatever people see in the

headlines at the point at which, like in this case, the White House announces a bill, I have every belief that a bill's going to end up coming. and yet I have no confidence that it's going to sail through. And that would have been my answer six hours ago or six days ago, as I said. As it turns out, within the last, I think now about 75 minutes, Senator Manchin in West Virginia has said he's not going to support the infrastructure bill as was proposed by the Biden administration. Now, when he came out wanting a little bit of leverage in the COVID deal, he didn't use it for much. They made a couple little adjustments on the margin that didn't really affect the total price tag. They affected the granularity of who was eligible for direct payments and some other things, pretty small ball.

He had the leverage and he used it, but he didn't use it for much. But in this case, he's come out and said he will not support the infrastructure bill if it's funded with a 28% corporate tax rate. He's demanding a 25% corporate tax rate. I wrote in the DC Today last Wednesday that my belief was the corporate tax rate that they proposed to 28 was going to end up being bargained down to 25. My economic advisor at the Bonson Group, Larry Kudlow, was very forward in that counsel to 25. my economic advisor at the bonson group larry carlo uh was very forward in that council to me and uh here about like i said roughly an hour ago we're hearing it now directly not as whisper talk in the beltway but publicly from senator manchin i find it fascinating. That's a big difference in what the cost to corporate earnings is. And ultimately, to answer your question, I think an infrastructure bill will get done.

I do not think it'll get done quickly. I think there'll be much more adjustments. And there will end up being the unhappy Republicans, some unhappy moderates, and some unhappy progressives along the way. And that's generally how legislation is supposed to get done. Not just that everyone's happy. That's a given because everyone has to get to a yes vote or enough people are doing it. But that everyone's unhappy. They all had to give something up to get there. And that's where i expect this is going as well my friend so then sounds like an infrastructure bill will be tied to some increase in the corporate tax rate and and if it does i guess the question then becomes to what magnitude of an increase would markets start to worry just from an earnings point of view i mean is it you, if we go from 21 to 25, is that enough of a

spread that would start to really impact earnings? No, it's not. And the reason is that it's already priced. It's already expected. And again, the biggest issue out of the corporate tax rate legislation of 2017 was dealing with foreign profits. And there was at that point something in the range of $2 trillion that were U.S.-based companies that had generated offshore profits and were holding them offshore because of various tax inefficiencies, leaving the money from coming back into our country for the purpose of capital formation, for the purpose of return of capital to shareholders through buybacks or dividends, for the purpose of reinvestment in their own business, such as CapEx, for the purpose of M&A, or even for the purpose of debt reduction. And this part can't be undone. They already have repatriated something

in the range of $1.4 trillion. And so that's been my view for some time that the biggest needle mover in market pricing at the 2017 tax bill was enabling a more competitive scenario for that money offshore. That got done. That kind of victory lap, if you will, has been achieved. Now, on a go forward, let's say that they do end up at a 25% corporate rate. It's meaningfully lower than the 35% rate that we had been functioning at for a very long time. And then you combine that with other potential deductions that come back and so forth. And the ability of corporate America to kind of adjust and optimize their own tax efficiency. It's not something I anticipate being a big needle mover. tax efficiency. It's not something I anticipate being a big needle mover. 28 would be more of one and a resumption of 35, which is not even being proposed by the Biden administration,

I think would be disastrous. But 21 to 25 is probably not going to be the same impact whatsoever. And would you say all this is more of a 2022 type of timing situation in terms of coming to fruition? Well, the bill would pass in 21, but it'd be effective for 22. Okay. And presumably the markets would start to sniff through that this year. Or like this minute. Yes. Because of my high degree of confidence in the market's fundamental role of being a discounting mechanism, I have no doubt that they're pricing in those various scenarios now. Look, you can't price in something that's a complete unknown, obviously. And you obviously can't price in what we call black swan events that are invisible and impossible

to see. Things like a once inin-a-hundred-year global pandemic. But in this particular case, it's been highly known. And when someone says, well, I'm surprised markets, I just want to kind of reduce this to something comprehensible. When someone says, I'm surprised, because here's what's happening. If you get a corporate tax rate, 25%, there's some percentage of corporate profits that were going to be X of after tax corporate profits, which is all we cared about. They were going to be X and now they're going to be something less than X. So how could that not impact equity pricing? The answer is if equity prices before that happened would have been something else, but were being held down

by the aforementioned discounting process. In other words, markets right now are holding back where they otherwise would be believing that some adjustment to corporate tax rates and therefore after-tax corporate profits is coming. tax rates and therefore after-tax corporate profits is coming. So discounting is not always so clean and easy as to provide that post-hoc visibility. It's more complicated than that. And that's our job as investment advisors to kind of understand that whole process. Well, and it's interesting, David, because we've got a whole 30 minutes without talking about interest rates and the 10-year yield, which if this were a month ago, and we did

these calls a month ago, that's what we were always talking about. 1.714 on the 10-year, look, that's a higher level than it was a month ago, than it was two months ago, than it was three months ago. And here we are, stocks at record highs. And you've been pretty vocal in recent months about saying how a 1.5, a 1.7, 10-year yield does not make much of a difference in terms of where stocks go. Any updated views or anything to say on where the 10-year sits right now? Is there anything to say on where the 10-year sits right now? Yeah, the reason that I've been right about this is because I was not taking a really bold or controversial or profound position.

I was saying something that everybody should have known. And for the most part, the wrongness has been embodied at the press, not in the real money management community. But most people know that when bond yields are growing a little bit because of really profound, real economic growth, that that can be a good thing for equities, not a bad thing. And that for bond yields to move because of a genuine and sustained and dramatic inflation scare, that is something that pushes bond yields higher, so bond prices lower, and reprices equity, so pushes stocks lower. I'm sorry, but 1.7% is not a dramatic inflation scare.

inflation scare. The move higher in the 10-year is a almost perfectly understandable pricing of better economic outlook, of improved GDP growth that I now believe will be something in the range of 9% to 10% nominal GDP growth in 2021, and therefore 7% to 8% real GDP growth in 2021. And this is the opinion of not just our own in-house economic advisor and not just some of our outsourced research perspectives put into a kind of consensus or aggregate, but it's the opinion of a great deal of the street as well. I think a 1.7% tenure with 7% or 8% real GDP growth is low. And yet, those are the types of things that are beneficial to equities. On the margin,

anything that is highly dependent on pricing or multiple expansion, growing valuation, that big tax example, a lot of NASDAQ example, it's hard for them to get the same level of multiple expansion in that kind of yield expansion. And so I think that that is where you may see some impact to equity pricing in those sectors. But the idea of the 1.7 10-year being a total re-rating of equities is not something that I ever took seriously. And I will say that even if we get a two-handle, a lot of the people I respect and listen to

really do believe we'll get a two-handle on the 10-year. I think we could. I think we probably will, but I think it'd be low two low two handle. I'm not in the two and a half camp. And then I don't want to be. Because if you do start getting to the two and a half camp and the Fed is, excuse me, the Treasury is still running these kinds of deficits, then I think the Fed right now feels that they've kind of dodged a bullet, not having to go to yield curve control. And I think that they would end up doing it. I think that they would end up bringing those yields down. They love the steep yield curve right now. But if they got

up to 2.5%, I think they'd intervene. And so this is the world we're living in right now. So we're just, this is the world we're living in right now. Well said. And next week we'll get the latest CPI figures, which, you know, there's obviously controversy on, you know, how the CPI is calculated and what that means. But it'll be interesting to see sort of the year over year change in that. But obviously we should remind everyone where we were a year ago in terms of inflation. That's right. remind everyone where we were a year ago in terms of inflation.

That's right. Yeah, violent deflation builds, creates the situation for really significant reflation. And yet it just is very important economically to evaluate that pre-contraction level to current level as opposed to the trough level, because it's just highly misleading to look at most inflationary realities right now from their March, April, May, June 2020 lows. You have to look to Q4 of 2019 or early Q1 of 2020 to get a comparison that's very useful to us economically. All right. And David, what do you have coming up today in D.C. today, which is your daily commentary that's released daily at about 6 p.m. Eastern time? Well, I'm back in New York City, as I mentioned.

And so that means three extra hours of reading and writing every morning. And so it's a pretty long one today. I got into a real nice research zone both before and after my workout this morning. And so it's a pretty long one today. I got into a real nice research zone both before and after my workout this morning. And so do you see today's a bit longer going into public policy, going into COVID and vaccination data, some comments on the Fed, and some things that I think some economists are getting really wrong that are in the same category of what I just spoke about when people talk about the bond market maybe forcing the Fed's hand and why I don't view it that way at this time. So DC Today will be pretty robust and look forward to people getting it. This week,

I'd point out that the FOMC minutes from last month will come out. And there's a good four or five Fed governors, including Chairman Powell, who are set to publicly speak this week. So you have a number of things that could be on the calendar, market impacting and relevant to our perspective. But earnings season won't really kick off until a bit later. But obviously now, as we get like into the next week, the remainder of, let's say the next four or five weeks will be predominantly centered around the Q1 earnings results. So we're a few days away still from that. Okay, David, thank you so much. Always great insights. And, you know, and you know what I did? You know what, Scott, thank you so much. Always great insights. And, you know. And you know what I did?

You know what, Scott? I did have one question come in. And this person listed a specific company. And I can't say the name of the company here on the call for a number of reasons. But it has to do with a really large soft drink company that they're wondering that the question has to do with where the, you know, I've alluded to the fact that we plan to be selling this company. And, and I just simply do not make portfolio decisions around politics. If I did, it would be possible to own almost any company because, you know, there's always going to be some company that has some view or says something or has an employee or a key executive in the company that says something that might be outside of my worldview or maybe outside someone else on our investment committee's worldview. I don't really believe most companies when they say these things that may be in our view,

sometimes problematic, because I think most of them are just completely full of it. Just rank virtue signaling, saying sometimes some of the stupidest things you've ever heard in your life. And it doesn't bother me because I know they don't mean it. And I consider it quasi marketing and sometimes cowardice, but whatever. Those dynamics are out there. But in the world we're in right now, we can't afford to just say, anytime someone has something take place that bothers us or offends us, we're going to sell the company. We would not serve our clients well to do that. And yet with this particular company that this person has brought up,

we are in fact selling the position. And it is in response to some of the decisions that they're making and things that they're saying, but it is not political. It is not a difference of opinion on left, right stuff and culture war and all these things. It is actionable stewardship of company resources that when we believe one has chosen to hurt the interest of their shareholders materially so, not just marginally, materially so around a particular ideological craziness that we think is going to do damage. And so I'm going to, in another forum than this, where I am not able to be as specific as I want, I'm going to be unpacking this at greater length. But I thought that that question

teed up my ability to give a kind of broad response to listeners as to how we view these things. We don't have the ability to go make politically correct, whether a right-wing version or a left-wing version or anything in between, or even a politics-free version of a portfolio, okay? There's just so much going on at a million miles an hour. And frankly, there is a significant aspect of corporate America right now that an awful lot of investors

would probably want to kind of steer clear from in a general sense. But I am trying to provide listeners where we draw those lines. And this particular sale that's about to take place is a company that I love, that I have loved for a good portion of my life. It's an iconic brand. And from a dividend growth standpoint, is just an absolute staple, but has been demonstrably willing to sacrifice shareholder value in recent times. And so left, right, or moderate, that's something that we can't tolerate. And that's where we're at with that. I'll take more questions on that offline, offline but that's that's where uh i wanted

to at least give that answer as we close out well and david you had also mentioned at the at the top of the conversation of takeaways you wanted to share about a meeting you had right before our conversation yeah for those who don't know um midtown manhattan our office is at 44th and lexington avenue and and there is a structured credit manager that we're invested with in our credit portfolio and is one of the hedge funds we allocate capital to within our fund to funds, our alternative income solutions. And they're based at 54th and Madison. So two avenues away and 10 blocks away. And I spent an hour and a half there at their offices right before our call here today.

And I just don't want, with all of the talk about stock market, with all the talk about bond yields, with all the talk about geopolitics, I don't want us to lose sight of the importance of credit markets in financial markets. There are just some incredibly idiosyncratic, interesting money-making opportunities there that we've been invested in for a long time, have done very, very well. We're really quite engaged in this. A year or so ago when credit markets broke down. And this Exonic Capital Partners, this money management firm here in New York, I was just meeting with. Exonic Capital is a really

interesting boutique manager. But the reason I'm bringing it up here on the call is just simply to reiterate the constant reality that there are always things happening underneath the surface that I'm going to write a white paper on the nature of structured credit right now in the in the days or weeks ahead but I really believe that when everyone's talking only about big tech or or the stock market or the S&P and everyone's talking about treasury bond yields. There's just entire worlds, multi, multi, multi, multi-billion dollar worlds of opportunity that others are engaged in.

And we don't ever wanna miss those opportunities. And so it's a very big part of what we're doing at the Bondston Group. We're core dividend growth managers, but we just have significant passion for alternative asset markets as well. And I think it's a huge part of our value proposition to clients. All right. Well, we look forward to that white paper.

And we could do a whole, I'm sure we could fill a whole hour of Zoom time on that as well at some time. So if I if I could just spend an hour, as I did, listening to an analyst only in the aviation sector, asset backed security market, nothing to do with like the big airline companies, just simply the parts suppliers and some of the structured credit realities in that ABS space, then I'm sure you and I could do 30, 45 minutes on the overall structured credit market. Yes.

No shortage of topics there, David. Absolutely. Well, thank you. Is there anything else you have for me, Scott? I think this is a good place for us to leave our conversation here. And, you know, we're still looking at record highs in the markets. And, you know, who knows where we'll be in another two weeks when we speak again. But that's the fun of this game.

Absolutely. Well, I will let Erica send us home then. But thanks as always, Scott. Appreciate it. And anyone who does have any questions, comments that came out of this call, please send to me. I do. I make every effort to respond to everybody. But, you know, certainly we understand

if there's things you want clarification on. Thank you, Scott. Thank you, viewers and listeners. And of course, thank you, Erica. The Bonson Group is a group of investment professionals registered with Hightower Securities LLC, member FINRA and SIPC,

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