Single Best Idea with Tom Keene: Mike Green & Frances Donald
04:48 Share

You're listening to an iHeart Podcast.

No sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn more at Schwab.com slash trading. Hiscox Small Business Insurance knows there is no business like your business. Across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for

Bloomberg Audio Studios. Podcasts. Radio. News.

The singleness idea on a Fed day, I think more than any other Fed day that we've done in the morning, we had less conversation on the Fed.

It's just the confusion that's out there and this keyword uncertainty. We covered it yesterday. I'll be honest, I can't remember the guest, but we had a brilliant discussion of Knightian uncertainty. Knightian, K-N-I-G-H-T. Knightian uncertainty is Frank Knight, 1921. It was his thesis, I believe, at Chicago a million years ago.

And it's a rite of passage. You have to read the thing. It's my recollection. It's 40, 50, 60 pages. But you have to read his thesis on nighty and uncertainty, which is sort of a reachable, touchable uncertainty, even though you can't see or touch the uncertainty is a simple way to put it. That's where we are right now, particularly given the trade war. A lot of good conversations today. We started strong. Huge response. Thank you so much out on YouTube, Mark.

to Mike Green, five-star Morningstar high-yield fund. Mike Green with a lot of really good discussions about active versus passive. Here's Mike Green on your retirement choice. The quick answer is there is no right percentage, right? It's going to depend on everyone's individual component. The key thing that I would highlight is that when you think about investing for retirement, when you think about those, focus on what you need, not what your neighbor wants.

Right. And this is a really key component. We tend to get ourselves caught up in the FOMO type framework. We're in an environment in which you can if you're worried about inflation, you can buy real yielding tips with a positive yield for the first time in over a decade. Right. That is something that I would argue people are ignoring. I would broadly suggest that fixed income in a lot of ways, because it has what I refer to as endogenous liquidity, significant coupon payments and an ultimate payment of maturity.

has very different characteristics than the Ponzi-like characteristics associated with equities, where you are always getting your value from what somebody else pays. And so those are ways that you can separate yourselves. They're not immune. I have to be clear, this is a systemic issue. But they are a better way to think about the opportunity. The forever debate about the certain cash flows of fixed income...

versus a less certain equity world. Mike Green there. Frances Donald is with RBC Capital Markets. She gave us a traditional Fed coverage as best as she could.

Here's Frances Donald of RBC on our labor economy. The nature of this job market is changing. We have the most amount of those over the age of 65 the U.S. has ever seen. Over one in five Americans is over the age of 65. Most amount of retirees ever. And so economists are scratching their head. Why are higher rates down, but also fire rates down and quit rates down? This is a job market that is actually...

acclimating to a demographic bust that's occurring in real time. Now, demographics are traditionally something that you look at when you're five or 10 year forecast, when you're forced to do something that difficult. They're not something we take the here and now. And this is why when I talk about uncertainty, a lot of folks are saying we're going to get more certainty on trade in the coming week. But a lot of the customers, a lot of the folks that we talk to in the United States are also paying very close attention to immigration policies that come through and how this government is going to support

or not support what is a very shifting labor dynamic. Now, Federal Reserve is going to have to talk about this at some point, probably not today, when they're looking at something like a high fours unemployment rate, and that's going to be enough for them to start cutting. Just brilliant. Francis Donald there on what the media doesn't talk about enough, which is demographic economics. Angus Madison said,

on the high ground on this. I really can't, and Robert Fogle, I believe, at Penn, at University of Pennsylvania, the laureate, I really can't say enough how we ignored our peril, the demographics, the makeup of any society, whether it's China, the U.S., whatever.

But that was just brilliant. Francis Donald there on an aging America. We're out on YouTube. Some real benchmarks today for us. Thank you so much for subscribing to Bloomberg Podcasts out on YouTube. It is the foundation of our future. Really appreciate that. And out on YouTube podcasts, it's a single best idea.

Hiscox Small Business Insurance knows there is no business like your business. Across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for protection. Find flexible coverage that adapts to the needs of your small business with a fast, easy online quote at Hiscox.com. That's H-I-S-C-O-X dot com.

There's no business like small business. Hiscox Small Business Insurance. You're listening to an iHeart Podcast. ♪