We do have a downturn. I think we all agree on that right now. And a lot of investors are saying where do I go in a downturn.
What is active management offering you that perhaps passive does not. Well that offers you a lot. There's no doubt that there is
a place for passive and has been a huge place for passive. But when you had 15 years of super easy money and all bought rising
then you can run a momentum cycle. And many many people did. And that was a large part of the driving growth of passive know when
the cycle has reversed and the tide is going out. And as we can see today we have NASDAQ so far this year down 30 percent. We're
in a bear cycle. In a bear cycle you want to be very selective. You want to be able to make decisions to be defensive.
Essentially you don't want to own everything and passive is owning everything. So. So there is a role as an active investor
is to be able to answer the question of where should I go. Why should I do next. How can I
preserve my capital and be in a position to grow capital when there is a more conducive environment. So I think that helps all
our investors right now. On that very question as you're seeing growth subdued and some concerns about even recession here in
the states as well as elsewhere and at the same time you see inflation really if not out of control looking that direction.
Where are places you can go that's different. Where can you zig when others are zagging. Yeah. Well the very important thing to
recognize for every investor and it's where we begin is that you should be diversified. The first step to ensuring that you're
actually never going to have massive concentration risk. He should be diversified and you should recognize that throughout
your investing life. As always the cycle. Though there have been 14 bear cycles since 1929 and those bear cycles on average last
20 months. So you've got to think about is yes right now you're seeing inflation you know very very hot and you're seeing
central banks all across the world. The Fed yesterday was 75 bets and overnight the Swiss as well everybody raising tape
tightening the cycle to tackle inflation. So what should you do. Well you want to be in a defensive position. You think about
equity with strong income long term quality defensive business defensible business models with their ability to price through
higher input costs. You also got to think about if you think more and more micro level. Which countries are going to be
accommodating whilst the US in particular and central western Europe and the U.K. are tightening. China is actually a counter
to that. China has had we're struggling whilst the U.K. the US was thriving. And China is actually going to be accommodating
whilst the US is tightening. So in a diversified portfolio which is very important you can think of those places ISE being able
to have a better prospect of growth. Whilst there is such an effort to reduce demand which is clearly what's going to have
half to half it is beginning to happen and it is going to have to happen in the developed economies. So let's pursue that just
a little bit. China specifically I think I understand that sort of a macro level 40000 feet. China's program in loosening at the
same time the United States and a lot of other things really tightening. I understand it. Macro at the center. China is a big
country and a big economy. You have to be pretty careful don't you about where you invest in China. You absolutely have to be.
And you really have to have people on the ground to. We do have and have had for the last 30 years. So understanding the cycle
were very very selective in terms of where we would invest. And again that's debate. You've got to peel the onion and figure out
which businesses can thrive. Well businesses that are able to supply and service consumer demand in China of course are some
of those businesses because they're gonna have high exhort Janus demand. Those are some of the businesses that you would want to
be in. You wouldn't want to be in right now in real estate. Of course those issues are well-known. There are areas of tech
where you do want to be invested in China. China actually is producing a lot of clean tech for the energy transition and the
energy transition as we know. If you think about yesterday we're very preoccupied by inflation very preoccupied in the media's
fill of a tightening cycle. But climate change hasn't gone away. I think for the balance of our careers the energy the energy
transition is one of the single biggest opportunities. It's a risk for the planet. It's a risk for individual businesses as
one of the biggest investment opportunities that we will face. So being able to identify within that energy transition which
technologies switch clean tech technologies as you think about solar if you think about wind if you think about tidal but if
you also think about sustainability of food supply if you think about energy management systems and software systems those are
areas that we know that when you look through this cycle will have high demand and we're investing in those. Of course
sustainability lies at the very core of what we as a business are doing is not a marketing thing. It's about risk management.
It's understanding the true environmental social and governance risks associated with any particular investment. Steven one more
on China if I could. There's political risk in any investment anywhere in the world but certainly there is in China. We've
seen some for example investors in high tech in sort of big tech over in China really get burned over the last year or so. How do
you take into account political risk when you do pick your spots in China. It's incredibly important to understand in China
politics drives policy policy drives progress. So you need to understand these episodes of reform and fight. As you know I
spent the bulk of my career living and working in the Far East living and working across these different investment categories.
And I have seen many episodes of reform where Beijing allows the capitalism with communist characteristics to to to to grow and
thrive. And then it resets because it sees inequities building up the tackling inequities in exactly the same way that China
did last year in terms of tech regulation in terms of education regulation tackling inequities is by definition a good thing to
ensure that you can continue to grow. That's actually Beijing's motivation to ensure common prosperity. Common prosperity means
that you've got to be able to have an economy that can the ability to lift hundreds of millions of people out of poverty
and into the economy. They're not going to stop doing that. They want to continue doing that but they want to address inequities.
So what we have been doing is understanding where those in those episodes of reform. How long were the last. What is the intent
of the regulation and what are the consequences of it and see through that cycle. And I believe that China has actually
signaled that we've we've done the reform that we wanted to do. So they've been signaling no. We know today China is still
locking down China still Shanghai and Beijing are experiencing lockdowns at the moment because they're tackling and they're
still pursuing a zero corporate strategy. No. We also take a view that at present that is the right policy for China. So
you've got to take a view of many factors as the micro fight. But then the individual industry factors and then invest
accordingly. It's not just about China. So you have to take a view that some investors are taking the view that we're entering
a bipolar world and this says you're going to a US centric economy in the world and a China century economy. And within
that there are other countries that clearly do represent an opportunity. One of them is Japan. So you think about Japan if
you look at the very the weakness of their currency. But if you think about the fact that ISE some investors take the view that
there's a China centric supply chain emerging which we're seeing then that does represent an opportunity for Japan and for the
technologies in Japan and particularly in the energy transition. We view that as an investable area to.