S&P 500 Bear Bets, Family Office Portfolio Shifts, & Pence Enters The Fray

The S&P 500 is now in striking distance of official “bull market” territory, but hedge funds are shorting the market in a big way.

Plus: family offices shift their attention away from real estate, and Mike Pence prepares to enter the Republican primary field.

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About The WealthChannel Podcast

On The WealthChannel Podcast, we unlock the world of wealth, money, and finance. Hosts Jimmy Atkinson and Andy Hagans deliver unfiltered views on the most important news that investors need to know right now.

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Jimmy: Welcome to The WealthChannel Podcast, episode one, Andy. Can’t wait to dive into this new show with you. On today’s episode, the S&P 500 bear bets are surging just as it hits bull territory. UBS has a new global family office report out that we’ll break down, and the Republican primary field is getting pretty crowded. But first, Andy, congrats, we made it to episode one. Why did you convince me to launch this new show with you?

Andy: Well, you know, how many years ago was it? We were college roommates and we used to have these long conversations late at night figuring out the world’s problems. Right, Jimmy. So I thought, you know…

Jimmy: That was about 20 years ago, right?

Andy: About 20, yeah. I figured it’s time to get the band back together, the two man band back together. So that’s what we’re doing here. Right.

Jimmy: Can’t wait with that Andy, let’s dive in. Story number one that we’re covering today, according to the Wall Street Journal, bearish bets against the S&P 500 are surging despite love for big tech. It’s a little bit of a juggle and hide situation with the stock market this year. The S&P 500 just a few hours ago, Andy, briefly hit bull market territory today, although it looks like it’s gonna close below the number it needs to in order to actually stay at that official bull level, which is 20% up. from the lows, it’s still off its highs that it hit in early 2022.

But interestingly about the S&P 500, it’s up, it’s got this big bull run right now, but the S&P 500 would actually be negative for the year without the contribution of seven big tech companies. So the other 493 or so components are actually down on the year in aggregate. Some interesting data from the Commodity Futures Trading Commission. Weekly net bets on the S&P 500 have hit their highest share of bear positions or short interests by hedge funds and other speculative investors since 2007.

Conversely, by the way, weekly net bets on the more tech-focused NASDAQ 100 share of bull positions is approaching the highest level since late last year. So investors, speculative investors, hedge funds. are starting to get really bearish on the broad S&P 500, although they’re still quite bullish on the tech sector. And as I mentioned, the seven big tech stocks are kind of forming pretty much all of this big run that the S&P 500 is on. Andy, what do you make of this market overall?

Andy: It’s so interesting. I mean, it reminds me of the economy at large, which is it’s really hard to draw any definitive conclusion, right? You you’ll get economic news that is bullish. You’ll get economic news that is bearish. And it seems like the same thing with the markets. I don’t know if I can exactly take a victory lap because I always couch any sort of prediction I make very carefully, but for the last six or nine months, I’ve been saying, you know, It feels like we’re in this recession and we’ve had a bear market, but next year in 2023, we just might see a bull market that manages to make everybody angry.

You know, like everybody, you know, kind of like in the, in the real estate market. I’m personally, I’m rooting for a correction just because I like to see capital formation. I like to see activity and I just think prices are too high. So I’m sort of rooting for a correction in the real estate market. Um, And I think maybe some people are rooting for a correction in the stock market. And it’s frustrating that there isn’t more of a correction, right?

Jimmy: Yeah, I think so. It seems like if you’ve got some dry powder on the sideline, maybe you’ve been waiting too long. You’ve already missed about a 20% run up since the lows of last year. And Andy, I agree with you. It’s kind of been, I guess I use the term Jekyll and Hyde before, because we’re kind of expecting, it seems like we’re expecting something to crash or meltdown.

There’s a lot of negative sentiment out there with regards to interest rates being way up. To combat inflation. We’ve had rampant inflation over the past 18 months But on the other hand the jobs numbers keep looking good month after month But still the sentiment seems to be negative even though hey if you look at the S&P 500 We’ve just entered bull market territory. We’re very close to it. We’re kind of scraping against the that number there. It looks like we’ve evaded the recession for now though, right Andy Do you think we’re gonna hit a recession? this year or next year maybe? What are your thoughts on where we might be headed?

Andy: Well, you know, that’s interesting. Uh, to me, the recession or not is almost besides the point because there’s individual characteristics of the economy and of markets that can be one way or the other, regardless if we’re in a recession. It’s like, let me give an example. Like, I just feel like this data is just so mixed. We have, you know, on the one hand, official inflation figures. We’re definitely seeing disinflation. Right. Inflation is not increasing at the same rate that it was a year ago. Um, clearly high interest rates have had an effect and just some of that, you know, uh, supply constraints, supply chain, some of it has resolved now. And so we’re definitely seeing an easing of inflation. On the other hand, anecdotally, it seems like a lot of prices are still way higher. You know, not 10%. 50% higher than they were two years ago, you know, groceries, use cars, things of that nature. And I think I’m saying that as a consumer, right? As much as an investor.

And I think a lot of consumers are feeling that way as well. So it’s almost like it doesn’t matter what the official inflation data is doing. If consumers feel like inflation is sky high. And in some cases, you know, you can argue the CPI is not really tracking things very accurately. You know, if consumers. feel like they’re in a recession, that’s going to affect their spending behavior. Another example that I’d give, there’s definitely tightness in the labor market. Like, no question. But on the other hand, anecdotally talking to some folks who are looking for jobs, they’re also basically telling me it’s not so easy getting a job right now. Like it doesn’t feel like a really tight, like the tight labor market that we had, let’s say a year ago or 15 months ago. You know. In terms of statistics, the labor market right now appears to be that same labor market. But in reality, the backdrop of corporations thinking that we might be entering a recession and everything has changed how everyone is viewing hiring. I think whether you’re looking for a job or whether you’re a corporation looking at doing layoffs or hiring freezes and so on. So it just, it feels like everything is so mixed. Jimmy and you can’t really pick one or the other. And I’m almost wondering if this whole year is just gonna be like a muddle through mixed year.

Jimmy: Yeah, and I also think we’re still kind of recovering from our response, our policy response to the pandemic of a few years ago, too, where we had to shut everything down. I think that’s probably still rippling through the economy. A couple pieces of good news with inflation, eggs are way down, right? Egg prices are way down. I think the chickens have largely recovered from the avian flu and new Teslas are way down too in terms of price. So if your CPI, your personal CPI is made out of eggs and brand new Teslas, I think you’re in good shape. Andy, you were the one who pointed out to me, I think like 10 or so years ago, I remember phone call with you where you were making a case that the CPI is kind of bogus. Each individual person has his or her own unique CPI. But I think overall, right, the CPI for the vast majority of people, it feels worse this year than it did last year and certainly worse than it did two years ago. I think that that’s your larger point here. with the economy right now, right?

Andy: Yeah, and you know, when a price of one item goes up 30%, and the price of another goes down 5%, so maybe that’s like eggs have gone down by 5%, then you mentioned new cars.

Jimmy: Oh, eggs are way down. They’re down way more than that. I think they’re down 50%. Well, that’s only because they were so darn high for a while.

Jimmy: that’s only because they were so darn high for

Andy: They’re down 50%. Pick a number when some items are down, uh, you know, prices have decreased by a substantial amount, but other prices have increased by a huge amount. Maybe you add it all together, take an average and you get 4.9 or whatever that current CPI is, but consumers are going to notice and they’re going to fixate on the 30% increases. the 40% increases, the 50% increases. You know, that anecdotally, they’re not going to notice, you know, Oh, summer up summer down because for years, for decades, we had very stable inflation price inflation. And so I think it’s the instability almost, you know, as a consumer almost feels random, you know, you talked about new cars, prices beginning to ease a little bit on some new cars and not all depending on the model. used cars still very expensive compared to where they were two or three years ago.

And it doesn’t look like those prices are going to be coming down anytime soon. You know, if you are a middle-class consumer, working class consumer, the prices of used carbs being 50% higher than they were 24 months ago, that’s a huge bite out of your pocketbook, you know, if that’s your monthly car payment.

So I think, you know, you can have as you can be armed with as much data as you want. You know, I think politicians maybe find this out the hard way. You can have all the data that you want, but when you go out and talk with individual people, individual consumers, individual voters, you know, they’re going to be talking about anecdotes and examples from their personal lives. They’re not necessarily going to be convinced by the big numbers, the big averages.

Jimmy: Well, let’s get back on to the main topic of the article, which is S&P 500. Investors are bearish on that broad stock market index, but there’s a lot of love for big tech. Nvidia stock, a classic example here the last week or so. I think there was one day where they reported earnings, Andy, if I recall correctly, where their gain the next day exceeded. the entire market capitalization of one of their rivals, Intel, which fascinated me. What is fueling the run up of big tech? Is it just AI hype or is there anything actually behind it? Because the price to sales ratio of Nvidia stock in particular is approaching astronomical level. So I wonder, is it just a bubble? Is it just AI hype? Or is there anything real behind it that’s fueling it? What do you think is going to be the result?

Andy: Well, I think with Nvidia, it’s definitely hype, Jimmy. I mean, for sure, and maybe deservedly so. I guess we’ll find out five years from now. But I think if you look at the broader tech sector and the broader S&P, you’re going to find that the tech sector is not trading at some crazy premium. you know, relative to its historical average. So I have these ticker pages up right now for SPY, you know, the S&P 500 ETF and QQQ, you know, the…

Jimmy: That’s the NASDAQ, right?

Andy: Yeah, the NASDAQ trust or whatever it’s called, but essentially ETF that tracks the tech sector. The PE ratio for QQQ is 28.9, and for SPY, 21.5. So there’s a little bit, you know, that’s a healthy premium for tech stocks, but it’s not a crazy premium. You know, typically the…

Jimmy: Tech stocks are looked at traditionally as growth stocks that would fuel that higher PE ratio for that sector, right?

Andy: Exactly. So I mean, you can definitely point to one or two individual stocks and say these are very, they feel frothy. They feel like there’s a lot of hype, but on the whole, you know, the tech sector, maybe it’s trading at a slight premium, but it, you know, it’s also, you know, experiencing huge revenue growth. And I also would say within the tech sector, we’ve seen a lot of companies trim expenses or, you know, do hiring freezes or, you know, have a little bit more discipline. with in terms of trying to maintain those earnings and those profit margins now than they did two years ago. And I think investors have responded positively to that by and large. So yeah, you know, it’s hard for me to call it a bubble, Jimmy, it’s because AI automation, it’s very clear those things are going to revolutionize the labor force revolutionize industry. My one word of caution is this. just because AI is going to transform our economy in many ways doesn’t necessarily mean investors will by and large get rich off of it, right? I would point to like airlines in the 1950s, 1960s, air travel transformed our economy in many ways, but by and large, airline investors did not get rich off of their airline investments.

Jimmy: All right, Andy, well, let’s do something crazy here. Let’s do something that’ll set the stage for the rest of the year. How about a wager between you and me? Where do you think the market, the S&P 500 is going to be at year end? Will it be higher or lower than it is today? And then I’ll just take the other side of that bet.

Andy: I’m going higher. I’ve got to go higher because I just think this is the year of the bull market that makes everybody a little angry. And I think if it just muddles through and gets a little bit higher next few quarters, it’s going to annoy some of these people like we talked about.

Jimmy: Well, that what’s going to annoy me because I’m on the other side of that bet. As I promised. I like actually being on the other side of that bet. Cause I just think the market’s just too fragile right now. I mean, if any of these big tech companies have a little bit of a slip, it’s going to have a huge impact on the S and P 500. I just think there’s the S and P 500. This bull run just has too many eggs in one basket. So I’m going to be on the side of, I think the market’s going to be lower at the end of the year than it is now. Hey, let’s check back in. first week of January and see where we’re at. Maybe we can rib each other throughout the course of the year here, Andy, about how the other one is doing. Does that sound good?

Andy: I love it. So I’m the official bull. You’re the official bear of the show. Yeah, that fits. I like it.

Jimmy: At least yeah, I think so at least through at least through December 31 of this year And then we’ll see what happens in 2024, but let’s move on now Andy if you’re ready to story

Andy: Let’s do it.

Jimmy: number two Which is we want to break down this new report out from UBS they have a global family office report for 2023 and The headline on the UBS website is family offices are planning the biggest shift in strategic asset allocation for several years. There was a breakdown also at Business Insider, which picked up a piece from the report to proclaim that the majority of family offices don’t have a wealth succession plan. So we’re gonna kind of pick up nuggets of both of those items there. This was a great report, really in depth. I really would encourage our listeners and viewers to check it out. We’ll have… Links to it on our show notes page for today’s episode.

But Andy, the biggest turnaround that family offices are planning is to make more bets on developed market fixed income. After three years of cutting back on bonds, 38% of family offices are gonna plan to increase their holdings over the next five years. Fixed income is now the most popular source of diversification for family offices. There’s also continues to be a strong trend toward alternatives, which Andy, you and I have been pumping alternatives for the last several years. We think there’s this big, broader global trend among not just family offices, but also ultra wealthy and high net worth investors away from more traditional portfolios into alternatives and alternatives, and excuse me, family offices are going to continue that surge into alternatives to help diversify their portfolios. But they are going to refocus their allocations within the alternatives bucket.

According to the report, hedge fund allocations are gonna go up from 4% to 7%. And then in contrast to that, direct private equity allocations are dropping from 13% to 9%. Real estate allocations is another topic that is covered here within alternatives. Collectively, family offices plan to decrease their exposure to real estate in the coming year with with increases to private equity funds, private debt and infrastructure to kind of offset the decrease in real estate. And then I think the report at one point mentioned most family offices are just planning to kind of wait out this interest rate hike for the next several months or a year or two and then real estate long term, still very bullish.

And like I said, Andy, there’s some very interesting nuggets about succession planning. in the report, which I want to get to in a minute, but first, Andy, what’s your family office doing this year? Or maybe put another way, how should ultra wealthy investors and family offices be responding to markets this year?

Andy: I think they’re using common sense. I mean, and that’s really what stuck out to me from this UBS report on family offices. It was kind of like, well, duh, in the sense, that, you know, they’re staying allocated to alternatives. So I think that’s interesting right off the bat. They’re not decreasing the overall allocation to alternatives, but alternatives is a big broad bucket that includes a lot of different things. So just one specific example that you already touched on. They’re decreasing their allocation to real estate. And it’s kind of like that’s, that’s a no brainer, right? With, with interest costs as high as they are and cap rates just have not expanded very much. You know, commercial real estate is still, you know, in my opinion, relatively expensive as a, is fairly premium priced given that interest rates are so much higher, conversely, private credit, you know, the article talks about fixed income, but also private credit and both of those, you know, all kinds of debt. Whether it’s private or fixed income is just paying so much better now.

So I think families are seeing, well, we can get eight or 9% from private credit, you know, strong asset backed private credit, or even 10%. What do we need to chase real estate returns for that might have similar return profile or possibly lower and a lot more risk doesn’t, it wouldn’t make any sense, right? So anecdotally. I’ve seen a lot of family offices, ultra high net worth, honestly that they typically don’t allocate anything to private credit or even just a little bit. They’re very much increasing those allocations. And I think to your point about real estate, it’s going to be a perennial favorite for families for the ultra high net worth, but they may be waiting for the next six, 12 months. I kind of alluded to that earlier in the show. Right. I’m one of those people, maybe, maybe some of these families are the same way. We like commercial real estate, but we don’t like it at any price. Right. And it’s just, it’s feels pretty expensive right now.

Jimmy: We like it long term, but we don’t like it right now. Tell me more about private credit. You mentioned that it’s achieving higher returns without the risk. Isn’t private credit a little bit risky? I mean, what types of companies are offering private credit or what types of projects are offering private credit? Tell me more about that.

Andy: Well, you know, private credit, very big, broad asset class, any kind of, you know, debt product in private industry, you know, not bonds that are publicly traded. So it’s a big, broad asset class. But my point is the spread of, you know, the spread between private credit and commensurate fixed income, you know, or similar type of fixed income that has widened a little bit. And then meanwhile, fixed income itself is yielding higher.

So when you add the just generally higher yields plus a wider spread, and the fact that a lot of private companies are having a little bit harder time accessing debt right now means that managers of private credit funds, they basically, you know, they, they have a line a mile long applicants, you know, who want to access credit or debt from their funds. It enables them to be very, very picky, right? And to only lend money out to very quality companies, strong collateral, very strong operating history. So in terms of the risk reward, that profile now looks to be very, very favorable, or at least that would be my opinion. It appears that a lot of family offices agree. And again, it’s not an asset class that they would typically look at. But right now, when you’re seeing very high quality private credit funds pay 8%, 9%, 10%, it’s like, well, shoot. If we can get 10% with what we perceive as very moderated risk, it seems like a no-brainer right now.

Jimmy: Yeah, there’s definitely risk with real estate right now with negative rent growth in some areas. And if you’re talking ground up development, I mean, the construction costs, the debt costs have just soared through the roof over the last 24 months. I think there’s probably some some risks with private credit as well. Of course, you’re not getting 10% for nothing. There’s no such thing as a free lunch, but it’s definitely worth taking a look at. I agree with you there, Andy. And do you think investors are going to come back to real estate once costs come down? And when do you think that that may happen?

Andy: Well, of course they’re going to come back to real estate. I mean, real estate is the, you know, it’s the favorite. It’s the number one alternative, you know, family offices are, they’re really catching up to where institutional investors have already been, which is institutional investors by and large have made huge allocations to alternative investments. And then within that real estate being a huge allocation within alternatives. A lot of families are catching up.

You know, a lot of them are already very heavily invested in real estate, but not all, and I think, you know, you mentioned already the concept of wealth transfer. That being top of mind for ultra high net worth family offices. And I think they like real estate, you know, especially direct investment in real estate, because it’s easy to understand it’s something that, you know, maybe the next generation can help to manage, you know, it’s kind of a hands on, but easy, easy to grok. type of business. So I think it’s going to stay in favor. And I was actually talking with DJ Van Keuren. This was, I don’t know, this was a month ago or when it was precisely, I’m going to butcher his quote, but he said something to the effect of you want to succeed with commercial real estate, buy at a seven cap, right? So it’s really, these investments become attractive based on, you know, that entry point, that, that price that you pay. And You know, given as high as interest rates are right now, you know, I think families are just waiting and thinking there might be better deals in 12 months. It doesn’t mean they don’t like real estate though.

Jimmy: Well, let’s talk about that succession plan now that that item from the report This was where I first found out about this report I was perusing business an insider this morning and they had a Headline that said the majority of family offices don’t have a wealth succession plan according to a new UBS survey I found that fascinating and then you know in the report it states that the main purpose of family offices created Created in the United States is to support the generational wealth transfer. 76% of US-based family offices agreed with that statement and ranked generational wealth transfer as the main purpose of their family office. Now only 63% of US family offices have a wealth succession plan in place for family members, and a mere 38% have created a succession plan for the overall family office, which shocked me that those numbers were so low. Andy, why are family offices so bad at planning for the future.

Andy: Well, I think it’s human nature because we all think we’re going to live forever, right? I mean, I certainly thought…

Jimmy: Well, I am.

Andy: … when I thought that when I was 18, I thought it when I was 30, I recently turned 40. And, you know, my parents have kind of told me, you know, as you get older, you know, you turn 30 and go, well, I’m not old yet. 40. Now that’s old. I just turned 40. I’m like, well, no, 40 is not old. Now 50. That’s old. I’m sure when I turned 50, I’m gonna be well, 50 is not old 60. You know, so I think a lot of these patriarchs, matriarchs of the family offices, regardless of their age, oftentimes they’re very sharp people and they probably just don’t feel that urgency. But you know, I would say the wiser course would be to, you know, plan ahead a little earlier and you know, have that in place. But I just think it’s human nature. And you know, people can be very smart. You know, entrepreneurs can be very, very sharp, very smart in one area of their lives and still have a huge blind spot. And I think with a lot of families, this is a huge blind spot.

Jimmy: Well, a lot of families, you know, you hear the term family office. I mean, by the way, I hear the term family office and you immediately have some sort of image in your head and oftentimes that of a very sophisticated investor. But the fact of the matter is most family offices, a lot of families didn’t earn their wealth or build their wealth through their investment acumen, but rather through other types of businesses over the last few years or decades or even centuries. And then they get to this point in time where they have to be a sophisticated investor. And oftentimes that doesn’t come right away, right?

Andy: Absolutely. Yeah. I mean, you know, back to DJ Van Keuren, who’s very familiar with a lot of these family offices, and he told me a story about a conference that was full of families. It was only family offices. The most popular session there was hedge funds 101, right? And actually, I respect. anyone who’s managing a portfolio or managing a family office for having this humility to know that you might be a beginner at something or that you might need the, the one-on-one crash course version of education. But you’re exactly right that a lot of, you know, tech entrepreneurs, real estate entrepreneurs, or just owners of operating businesses generate their fortune in a specific industry. They get very good at one thing and to be sure they’re smart people, but they don’t necessarily develop that. skill set of being a sophisticated investor.

And frankly, I don’t know that they need to before that liquidity event because they’re so focused just on growing their business. They’re generating wealth, typically through that family-owned business or that business that that patriarch or matriarch owns. And so it’s a totally different skill then. Oftentimes the family office will actually launch, it will be founded after a liquidity event where the matriarch or patriarch or they sell part of their business and there’s some sort of liquidity event that leads to the establishment of the family office. And that doesn’t mean that they necessarily have caught up in terms of their investor education. And sometimes even the managers of the office, it’s not necessarily that they’re hiring an experienced RIA or another type of fiduciary financial advisor to run their family office. Sometimes they’re hiring. you know, high school friends or people that they trust, people that they’ve known a long time that they trust. And then, so even that manager that they bring in doesn’t have the track record or experience of professional money management.

Jimmy: And if you’re a patriarch or matriarch and you do have a big liquidity event, I would encourage you, hey, go ahead and hire a professional but also become a sophisticated investor yourself and at least learn enough to be dangerous with knowing what’s going on with your money because no one’s gonna care more about your money than you are. Andy, I think you taught me that line. That’s a great line. Let’s move on though, because we’re running out of time here. We got about 10 minutes or so. Story number three that we’re gonna cover today, Mike Pence, he’s back. He has filed paperwork to launch. his 2024 Republican presidential campaign. Andy, I kind of wanted to use this breaking news story from earlier today just as an excuse to talk about politics and the race with you in general. The Republican field is getting pretty crowded. Now, of course, we’ve got Trump and DeSantis, but we’ve also got Ramaswamy, we have Haley, we have Senator Tim Scott, who’s one of my guys, my favorite, because he’s the Opportunity Zone guy.

We’ve got Mike Pence now, former Governor Christie may be next. to announce the Democratic field on the other hand, Biden of course is the incumbent. He only really has one true challenge at the moment who is Robert F. Kennedy Jr. Who by the way just happens to be doing a live Twitter spaces with Elon Musk right now. Really looking to the Republican field that’s looking like a two horse race. If you open up the futures market at Predict It, it’s basically Trump. and then a pretty big gap and then DeSantis and then pretty much nobody else in the picture at the moment. Although I would like our listeners and you Andy to keep in mind that at this point in the 2016 cycle, Jeb Bush was one of the front runners.

And I don’t think, I think we stopped hearing about Jeb Bush just a few weeks or a few months later. From this point, Trump didn’t enter the 2016 race. until June 16th of 2015. So at this point in time, he had not even entered the race yet. So perhaps the ultimate winner has not even entered the race yet. Andy, what do you make of the 2024 election cycle so far? And what do you think is gonna happen? What do you think will be the ultimate outcome here between Biden or whoever the Democrats put up versus, is it gonna be Trump? Is it gonna be DeSantis? Will it be a dark horse?

Andy: Well, talk about a big question. Are we going to have to make another prediction and then another bet on this? But boy, that’s a good question. So as you point out, this is a pretty crowded field already on the Republican side. And I was thinking my first instinct was, well, a crowded field that potentially helps Trump, right? Because there’s a portion of that Republican primary…

Jimmy: It certainly helped him in 2016, right?

Andy: Yeah, exactly. And there’s a portion of that Republican primary electorate that is, you know, would like to move on from Trump. You know, that’s obviously that’s a base of support for DeSantis. But I was also thinking, you know, on further reflection, let’s say, I wonder if this could help DeSantis as well, you know, because as much as you know, people who really watch the news and follow political news. They really know who Ron DeSantis is. I mean, he’s a national figure, but I think there’s a lot of voters who are fairly tuned out, especially with primary politics, really until the last minute.

And so having a crowded field, if it’s fractured, if no one is near 40% or 45%, you could also see that helping Ron DeSantis gain steam later in the cycle is more. voters get to know him, you know, theoretically that could help him or another challenger. But that being said, I do think Donald Trump will be very formidable in the primary, extremely formidable. I mean, we know that from his history, he’s a very tough campaigner, right? He’s not afraid to reach for insults or, you know, attacks on other candidates. So he’s in it to win it. And I thought there was a really interesting statistic in this article that you sent me about Pence’s announcement, Jimmy. Um, and I’m going to quote it here.

There was a recent survey from Quinnipiac where, um, 35% of Republican registered voters said they had an unfavorable opinion of Pence. Whereas only 11% of voters had an unfavorable opinion of Donald Trump and 5% of Republican voters had an unfavorable opinion of Ron DeSantis. So what actually shocked me was that Trump’s unfavorables in that Republican primary electorate are really pretty low. I mean, 11% that kind of surprised me on the low side. So personally, I…

Jimmy: You wouldn’t know that watching the news or reading the newspapers, would you?

Andy: Right. And just anecdotally, you know, I’ve talked to a lot of, I think, likely primary voters who, you know, anecdotally have told me they’d like to move on from Trump, but I don’t know that it’s necessarily showing up in the polls. You know, the polls, according to the polls, it looks like he’s going to be a very formidable primary candidate and that this would essentially be his primary to lose. What do you think, Jimmy?

Jimmy: Well, it’s hard to put too much stock in the polls at any point in time, but especially this early in the election cycle, I will say, you know, the more and more crowded this field gets, I think it is better for Trump in the long run, just based on what happened in 2016, because I think what you have shaping up is you’ve got Trump versus non-Trump, and if you’ve got 12 or 16 or however many it is, non-Trump candidates running, and you’ve only got one Trump, I think the Trump ends up trumping the non-Trumps in the long run.

But my crystal ball predictions on this are not historically accurate. I remember it was, I think, probably late 2015 or so, a couple of my friends asked me, hey, what do you think about Trump? Is he gonna go anywhere with this? And I said, no, that guy, he’s… He’s way too big of a blowhard. Nobody’s gonna vote for him. And boy, was I wrong. And I think I was like a lot of the mainstream folks out there who thought he would end up going nowhere. And hey, he’s shocked the world, right? And I think this time around, if he ends up succeeding in winning the nomination, it won’t be quite as big of a shock, but we could see notes of 2016 replaying in 2024, but time will tell, right?

And it’s still a very long time. until the primary season really starts getting underway at the being of next year and Super Tuesday and the convention and then the election is still more than a year away. So I always like to remind…

Andy: Long way away, yeah.

Jimmy: …people, hey, at this point in time in 2016, Trump had not even entered the field yet. So just something to think about there.

Andy: Jimmy, what do you think on the Democrat side? Do you think that, I mean, historically I would say there’s no chance for any kind of challenger to an incumbent president.

Jimmy: Yeah, historically, it would be the incumbent president after serving his first term, right? But this is not any incumbent president. This is the oldest incumbent president we’ve ever had in our nation’s history. He’s gonna be, I forget how old he would be on his inauguration if he were to re-win the election. I think it’s 80 maybe or something like that. But it’s incredible to think that we might have an octogenarian in the White House. By the way, Trump’s not a lot younger than Biden. Isn’t he only a couple years younger than him? But he does seem like he’s got a lot more vigor than Biden, I think, even ask anyone on the left side of the aisle, and they would probably agree with you there. I really don’t know what to make of the Democratic side.

I tend to think it’ll just be Biden by default, because he’s made it this far. And… I don’t see anybody else seriously challenging him. I don’t think anybody takes the vice president all that seriously. RFK Jr. Is an interesting case, but I think the vast majority of Americans would listen to him talk and probably conclude he’s a little bit of a nutball for better or worse. And so I think, I don’t think Biden’s really going to have any serious challengers, quite frankly, I think, I think Biden’s going to run away with it.

Andy: I think that’s absolutely right. You know, I think the only wild card, I don’t think Biden would lose a primary, like a contested primary. I think, you know, there’s always an outside chance that he would step down. Maybe even if he’s not planning to right now, he might choose to later, uh, because of health issues or whatever. And if that happened, I could see it just being blown wide open and being very, very competitive, um, on the Democrat side. But otherwise. It’s going to be Biden and it, you know, I think there’s a pretty high probability it’s going to be Biden Trump. So, you know, get ready guys, get ready.

Jimmy: That does seem to be the most likely outcome at the moment. But again, we’re still pretty early and you know, you know how it all turned out for Jeb Bush, who was one of the front runners at this point eight years ago. So, um, well, Andy, we’re, we’re running out of time. I want to get to our closing segment. That’s right. It’s time for our edition of the Bull Of The Week where we tell you what we’re bullish on up ahead here. So Andy, what’s your Bull Of The Week?

Andy: I am bullish on the new baseball rules for this season, for the 2023 season. Yeah. Everybody was kind of worried about them. And I have to say, you know, I’m kind of a traditionalist. I like tradition. Normally I’m not a big fan of, you know, new gimmicks and things like that and sports, uh, but they have sped the game up. There’s a little bit more offense. There’s a few more stolen bases. The games are just easier to watch. I can, I can catch the game and. You know, still go to bed at a decent hour for an old man like me who has to get up early. So I frankly, I like the new rules. It’s almost surprising to me that, you know, they came up with new rules and, uh, you know, we have a mutual friend who kind of poo pooed them is, you know, a baseball purist, shall we say,

Jimmy: Hahaha

Andy: but I have to say, I like them sometimes change is good. It’s just a better, for me, it’s a better viewing experience.

Jimmy: No, hey, I’m right with you on there, Andy. I like them too. And I was skeptical when they first started rolling them out early this year. I think it was after training camp where there was a report that came out that the game length had been decreased by a half an hour or so when I finally realized, oh, this is actually a pretty good thing. And what’s really interesting about what baseball did, so they have this pitch clock now where the pitcher can’t take so much time between pitches and the batter can’t take too much time between pitches either. The pitcher can only attempt to pick offs at first base, I think only twice per at bat, I forget the exact rules, but it has dramatically sped up the game. And in an interesting fashion, counter to what the NFL and college football are doing, college football and the NFL are trying to shorten their games by actually decreasing the amount of product.

And by that, I mean, they’re actually trying to bring down the number of plays per game, because God forbid they would do anything about the length of halftime or commercial breaks in between games, whereas baseball, you still get the same number of plays. You still have the same number of pitches per game on average that you did last year. The main difference is just the dead time between plays has been drastically reduced. So I applaud baseball for the move. I think it’s been great. Okay, my Bull Of The Week, Andy, is this, the WealthChannel Podcast. I know this is our first episode and… We kind of are going out on a limb here. We’re not quite sure how it’s going to work out, but, and we went back and forth on the format and why we’re launching it, but I’m really bullish on what you and I are going to bring to Apple Podcasts and Spotify and YouTube over time here.

It’s a lot of fun talking with you, Andy, and conversing with you about these different topics. And you and I just decided, hey, we each have our own podcast that are both very successful in their own fields. You talk about alternative investments. I talk about Opportunity Zones. Let’s bring all of our stuff together here and have our new show, just Jimmy and Andy, an hour of Jimmy and Andy every week to dissect some interesting things, or at least some things that we think are interesting. So that’s my Bull Of The Week is this podcast.

Andy: I love it and I gotta say I’m bullish on that as well. So we’re both in agreement with each other’s bulls. Those are two great picks, Jimmy.

Jimmy: Absolutely. Well, maybe next week we’ll get some disagreement, but Andy for this time, we’re out of time But hey for a first episode not bad. Am I right? Do you want to do this again next week with me?

Andy: Absolutely, no. So we’re going to record these on Monday evenings and then they’re going to come out Tuesday mornings, 7 a.m. Eastern time.

Jimmy: That’s right. And we’re going to have to see where the S&P 500 ends today on Monday, June 5th. And we’ll check in how it ends at the end of the year. Andy, this has been great. Thanks for joining me today.

As a reminder, you can find us online at wealthchannel.com slash podcast. The WealthChannel Podcast is available on YouTube, Apple, Spotify, and all other podcast listening platforms. Just hit that subscribe button so you get our new episodes every Tuesday morning. And we’ll see you next week!

Andy Hagans
Andy Hagans

Andy is a co-founder of WealthChannel, which provides education to help investors achieve financial independence and a worry-free retirement.

He also hosts "WealthChannel With Andy Hagans," a podcast featuring deep dive interviews with the world’s top investing experts, reaching thousands of monthly listeners.

Andy graduated from the University of Notre Dame, and resides in Michigan with his wife and five children.