Let's talk a little bit about let's talk a bit about this market. The S&P goes from strength to strength. It's being
driven by tech recently. Talk to me about the risk and reward here.
Yes. So look I want to first start with earnings season if that's OK guy because that's the number one thing on my mind
which is you know we went into earnings season wring your hands a little bit stressed out around these three pressures like you
know labor shortages supply chain disruptions and overall pricing. And then we've come out mostly on the other side. We
had better margins and better earnings than consensus expected. So we should feel feel pretty good. But the big thing I think on
everyone's mind right now the second part of earnings is really guidance. And this is what I think most investors are focusing
on. You're seeing this dispersion in the equity market despite the fact as you point out a moment ago that we keep on making
new all time highs on index. There's dispersion is coming from which companies are increasing their guidance and have more
optimistic 20 22 outlooks and those that are cutting. And so I think we're going to see more of that. The market grows higher
but at the same time there's going to be greater differentiation between those that have this company that have better prospects
for next year and those that have just kind of sort of topped out in terms of their earnings growth. So where does that leave
something like big tech came. I mean it's good to see you by the way. When you Google at two trillion dollars now in market cap
what do you do with the big tech saying names. Yeah Alex that's a good question. So I think we're going to see a little bit more
of the rotation that we experienced early on Friday and some of the last trading days of last week in terms of you know the
restart reopening economic winners whether that's on the consumer side or on the corporate side or turning to office
winners at the same time. That doesn't spell the end I think for big tech and for some of the most important themes that are
going to really I think drive the market higher in 2020 two which are around digitization and cloud adoption and you know
overall increasing technology enablement across all these industries. So I have to say as much as I'm sort of constructive
on the overall economy and like some of these restart and reopening plays into your and those that have given better
guidance for example I'm not feeding any of my tech positions. In fact we're continuing to lead into some of these secular
winners. Do I stay fully invested at this point.
100 percent guy I would not take money off the table. I think there's some room for some of these sort of micro
rotations I mentioned. Take a good stock of what companies were telling us over the last couple weeks and make sure that you're
positioned in those companies sectors and themes that can really produce enduring growth in the next stage of the economic cycle.
But don't take money off the table. Stocks are still the most interesting investment and perhaps the one that will offer the
best returns not just in the fourth quarter but into 2022. So stay invested. Resist the temptation to take a bunch of profits
and hold out for the next six weeks. So how then do you take into account. You know Covid case is rising in Europe for
example in Germany where I'm in that fourth wave. China keeps having that zero tolerance policy. And I can imagine that's only
going to make the supply chain problems even even thicker and chunkier. How do you look at those kind of headlines right now.
I feel like a year ago the S&P would have lived or died by that. Yeah it's a great point Alex. Look I'll be honest. I'm like
everyone else. I'm having a really hard time predicting the future path of Covid. But you made some really interesting
points in terms of where you see an increase in cases and China's zero tolerance policy.
I do think the Pfizer news combined with the Merck news you know a little bit earlier in terms of you medications that that
infected people can get that will allow them to you know at least reduce the incidence of hospitalization and certainly take
off DAX from the table does encourage people to return back to more normal activity. So
despite the fact that we're seeing this uptick I think there is a broad based belief that we can return to more normal activity
in 2020 to what this sort of means for supply chain. So if demand remains really strong is left to be seen. I just I will
say as I mentioned the beginning I felt pretty encouraged by how well companies manage supply chain issues in the third quarter.
Companies did a pretty good job here. I think in the near term we'll see certain industries some of those bottlenecks relieve.
But I think over the medium term what I'm also to be watching is what are companies spending in order to prevent this type of
issue from happening again in the future. And that expense may lead a little margin erosion a road erosion but I don't think
we're calling the end at this point. It's something interesting to watch but perhaps not as scary as it was pre earnings season.
Tell you what what is the trade out of CAC 26. Clearly a huge amount of money heading in the direction of sustainability. How
do I figure out how to invest or do I just say you know what it's like drinking from a fire hose. There's just going to be so
much liquidity coming into this space. Everything is going to go up. And as an addendum to that question how do I play the
president's infrastructure plan along the same sort of lines. Yes I got a lot of the conversation is being that some of these
sustainability and ESG geared companies have already run a phenomenal amount are trading at what someone suggest are
premium valuations and maybe the trade is over. I think we are in the first stages of a multi-year perhaps multi decade
investment in renewables and alternative energy and carbon neutrality. We hear this from governments. It's playing out in
some companies but there's I think a lot more opportunity and a lot more upside to come. You know one of the things that I'm
really focusing on in my climate and sustainability trades is actually looking at the full supply chain. So not just say
looking at an automaker like Tesla or something that has you know a huge amount of market share. But also looking at all the
suppliers from the batteries to the raw materials to the chips that go into enabling that technology. So I think there's an
opportunity to diversify around sustainability. I do not think this investment or
theme is over at this point and we're going to get some wobbles based on some premium valuations. But every policymaker around
the world has given us the same message. And I think we need to hear it and put that money to work.