So what. Housing is a lot of talk about housing right now whether we in fact are in a bubble. Obviously housing prices
have gone up a lot. Rent costs are really in record levels first place. At the same time the feds trying to come off of that
sugar high. Yeah it's clearly a reset going on in the housing market. You
know that those low interest rates clearly create a lot of demand a lot of activity in the housing market. But people
shouldn't forget that there's still an awful lot of younger folks out there who have delayed getting into their first first
homes and that latent demand is still out there. I think what we're seeing now is a re-evaluation of how much house can I
afford. And so we have seen people walk away from contracts. We've seen the builder slow down a little bit. But given our
high mortgage rates are the existing homeowners don't want to get out of their old cheap mortgages. So that's going to push
demand to the new builds. So we're still pretty enthusiastic about some of the plays in the new you know in new building for
housing like sale in our for example which tends to serve that lower end the first homebuyer or the one step up homebuyer. So
there are places to be in housing. You just have to be a little bit patient here as this recent plays through and folks
renegotiate contracts and then find slightly cheaper houses to buy servicing because you heard about land. Are there maybe a
lower end house. You are. What are you seeing is a lot of volatility in the marketplace. Where does it create
opportunities for investors at this point. Well it creates opportunities really at times when we see a sell off of course.
We haven't seen much of a sell off in in recent weeks. But but when we do get those that's an opportunity for investors to
reshuffle portfolios. Right. And sometimes it's about exchanging lower quality less defensive for higher quality more defensive
getting a little more yield in there. So I think areas that I would focus on right now are opportunities in health care like
pharma as well as as technology to secular growth plays there joining. One of the things that's been driving us to kind of
sometime sometimes are consumers. Consumers had a pretty good time of it. They've had really good balance sheets. They've got
a very fair amount of income coming in the same time. There's more pressure there now. What does that say in terms of
investing in stocks if in fact there's more pressure on the consumer. Yeah you know it's become a very challenging time to
invest in the consumer space because what we have going on now is really a tale of two consumers. We have folks at the lower to
middle end of the income distribution really being hurt by these high prices this high inflation. For them it's making their
budgets a lot tighter. And so we're seeing that and the results of say a Wal-Mart in a Target where they're fighting their
shoppers aren't spending less but they're switching away from discretionary products towards the necessities which have lower
margins. So it's hurting their profits. But then you look at the higher end of the income distribution you see companies like
Apple selling expensive iPhones. They're not seeing a drop in demand. We're seeing a Williams-Sonoma. Right. They sell higher
and you know kitchen gear and furnishing type stuff. And they're not really seeing a drop. So it really depends what kind of a
consumer products company you are and how much you can raise prices because you have a resilient supply of shoppers or how
much you're having to really trim them back to keep the shoppers walking in the door. And so it does make it a real selection
question. And to Christina's point finding the higher quality companies that have the more resilient shoppers is really going
to help your portfolio. David I would just argue that in this environment having seen
gas prices come down significantly. Real incomes aren't as pressured now as they were just a little
while ago. So I think that that chasm between those two sets of consumers might not be as wide. There's a little alleviation of
the pressure on lower and middle income American households right now just because energy prices have come down. So it's
certainly not a much better situation but it is materially better. And we saw that borne out in the most recent consumer
sentiment numbers. Talk about earnings. If you were to say for a while we're just getting through the earnings season here. If
we're seeing a tilt to consumers as we just heard from Janet. Are we seeing a tale of two sets of companies as well but high
quality versus less high quality. Well certainly there are some companies that are far better able to pass on their costs than
others. There are those that are really experiencing a reduction in traffic for example if we're looking at some of the retailers
and others that have have held up fairly well. So I think you know going forward what we're going to have to make an
assessment on is is which are those higher quality companies that can defend their margins that can pass on prices that can
weather this storm better. Because let's face it it's going to be you know there are going to be some significant headwinds in
the next two quarters I would argue. Joanne as a portfolio manager how are you feeling about tech these days. I know techs
covers an awful lot of sins. There are a lot of different things called tech. But how are you feeling other opportunities right
now in tech. Oh yeah I think there definitely are. You know it could take
some patients really for investors to to reap the rewards of tech. But when we look at technology what we look for are
companies that are in the middle of a change in the way things are done. A demand coming from the market whether it's
demographics or tastes. But you know the cloud area companies shifting their activities away from internal services to the
cloud. This is still happening. And more traffic on the Internet is pushing data centers to have to expand and build in faster
wider pipes. So if you look for the companies that supply the parts to enable that you know they're going to be able to sell
well no matter what happens in terms of the cyclical side of the economy. And generally if you if you pick and choose carefully
you can find ones that have deep moats around them that don't have a lot of competition. You're not buying into companies that
are selling commodities. So you know whether it's a Broadcom or an Amazon which really enables the class out or herself off
which enables the software to make all this work. These are companies earning power through. You're going to be a little bit
cyclical but they're going to hold up better than others will. Christine finally let's go overseas if we could because we've
talked about the Fed however fast they're going to tighten their tightening. No question about Europe. Looks like they're
tightening. There are some places like Japan and China that maybe going the other direction. Does that create an opportunity
for investors. I think so David. It's not just a difference in terms of monetary policy. So we both we have China easing and we
have Japan remaining very easy. But it's also fiscal stimulus. We're seeing fiscal stimulus in both those countries. Whereas in
the U.S. and other Western developed countries they're pulling back on stimulus. And so that sets up an environment in which
there are built in tailwinds that we're just not seeing here. I think there's potential there now when we look specifically at
China equities because a lot of pessimism right now around China especially given headlines around the property sector. But if
you ring fence the property sector and look at at the broader market especially technology there are a lot of effort
opportunities in China equities. And I think there's the potential for positive surprise.
Joanne Liu what about China. And I'll push Christine Christine here a little bit. It's certainly the property sector but there
are also geopolitical risk. And we saw the de-listing of a lot of the big Chinese publicly traded companies because of problems
with the United States. There are a lot of frictions here. How do you feel about China. Are there investments that make sense
there. You know we do think there are some good opportunities in China
and around China. Our international team which manages a set of internationally oriented portfolios now they're in there.
They're picking and choosing very carefully. You don't want to invest in a country as a whole. Like you said the property issue
in China is a serious one. But look at the cloud enabling companies in China the political environment. China is still
pro-growth even if they're running into problems with Covid and politics. Right. A company like Buy Do for example or Ali Baba
they're going to be able to be the engines of growth in China for many years to come. Even with those regulatory questions and
if they get delisted here. Right. They're going to be listed in probably Hong Kong. And so even if you're in an ETF you know
stocks in this country listed in New York even if they switch over to Hong Kong the investor is going to be fine with that. So
it's not as risky from that regulatory perspective I think as a lot of people think. And even on the geopolitical side you have
to really understand what the Chinese leadership wants to accomplish. And one thing they want to accomplish is continued
growth. So if you look for the companies that enable that even if they're a little bit more volatile. Could be good places to
be particularly at the valuations at which we're seeing them now so briefly at the end pristine. How do you factor in the
geopolitics of it when you appraise possible investment. It's very very hard to. So I think the best course of action is to
take a longer term view and recognize that geopolitics can have an impact on the shorter term rarely on the longer term rarely
on fundamentals if at all. What use it opportunistically. Because if geopolitics drives down stocks that's an entry
opportunity in my view as opposed to anything that causes concern and a run for the exits during that what you do in
picking your stocks look for some low hanging fruit as it were. Yeah I like the way Christina put that. You can't be a short
term investor in this kind of environment if you're going to go internationally or there are stocks that are gonna happen.
There's geopolitical risks. But longer term economies get through cycles. They get through these kinds of risks. And when
you find those opportunities for good solid companies that attractive valuations you do have to act opportunistically.