Ep 180: Where is the Economy Headed as We Enter 2024? With Sam Burns

Still be a counter to the monetary policy? And will monetary policy, will the Fed figure it out quickly enough to kind of back off and not have a recession and overcompensate for inflation like it has in the past in some cases, or does it have to wait for a crisis and a recession to happen and then come along, throw money around and panic and try to stimulate?

Welcome to the Next Level Income show, where it's our goal to take your income, your investments and your life to the next level. I'm your host, Chris Larson. If you haven't yet, get a copy of our book for free at our website, nextlevelincome.com. that's www.nextlevelincome.com. just click on the book link and I'll even send you a copy if you put your address in. On today's show, we have Sam Burns. Sam Burns is a cfa. He's the chief strategist at Mill Street Research. It's an independent research company specializing in proprietary institutional research, tools for asset allocation, stock selection and macroeconomic indicators. Sam has more than 20 years of experience as a market strategist providing US and global investment insights at Wall street firms including Oppenheimer and Company, Brown Brothers, Harriman, State Street Global Markets and Ned Davis Research. And today he's going to join us and try to read the tea leaves and figure out where the economy's been in 2023 and where we're going in 2024. Stay tuned. Sam, welcome to the show.

Thanks for having me on, Chris.

Yeah, I'm very excited. As listeners know, I'm a bit of a economic geek and I love to talk about the data that's out there. And we heard from your team. And I was, I've been reading your, your weekly roundup as well, which is fantastic when it comes to data. And everybody wants to know what the Fed's going to do. Everybody wants to know what the latest research is. And, you know, I figured we could take, take the next half hour or so and spread the tea leaves out on the table, Sam, and see what we can figure out here for, for the end of 23 and going into 2024. What do you say?

Sounds like a plan. Happy to do it.

Wonderful. Well, before we get into that, if you, if you would please share with the audience a little bit about your background, what you do at Mill Street Research, and then we'll, we'll get into what we're going to chat about today.

Sure. Yeah. So running Mill Street Research here in the Boston area for the Last seven years. And for pretty much my whole career, I've been doing, you know, equity markets, asset allocation, global economics, quantitative stock selection, mostly for an institutional investor audience. So most of the people that I talk to are professional investors in some way or another, and some of them are, you know, running real small, you know, investment advisory firm or big mutual fund companies. So they're all over the place. But I've also expanded more recently, offering the weekly roundup note you mentioned, which can, you know, may be of interest to individual investors or small investment advisors who want, you know, kind of a. A slice of what I offer to institution investors. The idea is to have a framework, to have a structure to have indicators, data that, you know and rely on and. And have a way to come into work every day and indicators that, you know, are relevant as opposed to getting kind of swung around by whatever's in the headlines every day, which a lot of. Even the professional clients I talk to still struggle. They get, you know, carried away with whatever the kind of, you know, meme of the day is and lose sight of kind of the fundamentals or what they should really be focused on and what really is relevant as opposed to what's most exciting. And so I think that's been my goal overall, is to provide, you know, data and indicators and information that clients can use and kind of weed out a lot of the noise and things that really aren't useful.

No, I love that. And we hear about the smart money, right? So a lot of people are retail investors, and a lot of people listen to the show because they want to gain some financial education. And a lot of these listeners are way ahead of kind of the retail money. But that's one of the things I like about real estate is it moves a little bit slower than the stock market. So those of us that aren't as smart as you, we can kind of bet on some of these slower trends. But I know we've had a lot of recording this right after Thanksgiving here, and we've had. We've had several different pieces of economic data come out shortly before this. You know, so I want to. I want to cover some of the broader economic data, but also, you know, dive deeper into, you know, some of the more specific real estate data. But maybe you can kind of kind of do an overview about some of the data that's come out here in the past month, you know, especially for people that aren't used to following it. Like. Like you and I are on a. On a regular basis.

Yeah, no, I think this last Month of November has actually been a pretty dramatic kind of, it's provoked a pretty dramatic in markets, both stock market and the bond market, interest rates. A lot of September, October and even back in August, people were worried that inflation was going to stay high, that the economy was too strong and that the Fed was going to have to keep tightening or at least stay tight for a long time. And that was pushing the long term bond higher, getting much closer to where short term rates were and got people very kind of off kilter. It also provoked some worries and some forced selling even amongst banks and some of the hedge funds and leveraged investors who deal in the fixed income market. Then we had the Fed meeting at the beginning of the month where Fed chair Jay Powell basically said things that were interpreted as meaning that they're probably not going to raise rates anymore from here out. That, that they've, you know, that there's been enough progress on inflation, the rates are already pretty high and that they don't really need to raise rates further to keep inflation on a downward trajectory. And then we got, you know, a, you know, good PPI report. The whole inflation retail sales numbers were relatively soft. So it basically all can then confirm. The data kind of came in saying, yeah, actually things are kind of better than expected or slower than expected. There's not too much going on in the economy. It's not inflationary pressure. And that's allowed bond yields to come back down again, allowed the stock market rally pretty sharply and kind of eased a lot of those concerns about, oh, there's, you know, there's too much inflation pressure or the Fed's going to have to keep tightening. So I think we're now in this kind of scenario where the Fed not going to cut rates right away, but it's probably going to just stay on hold for a while longer. And that's kind of allowed the markets to act a little better. And then, you know, corporate been pretty good, not spectacular, but pretty good overall, particularly the larger companies. And so that's kind of, you know, helped the stock market, you know, hold up a lot better lately. But that's kind of been the trend. It kind of reversed from September, October into November. And so a lot of people are feeling a little bit better now about things were this time last month.

Yeah, it's really, you know, I was kind of trying not to chuckle when you were saying it, but you know, you kind of caught yourself. You said, you know, it was better than expected. And then he said softer than like slower than expected. You know, the Fed's been in a war on inflation. And CPI is the, is the Consumer Inflation Index. Do you mind actually, do you mind sharing what the difference is between CPI and PPI for listeners real quick?

Sure, sure, yeah. So the cpi, the Consumer Price Index, is the main inflation index you probably have heard about, and it makes most of the news. And it's a measure of what consumers pay for things across the board. They basically take an average basket of what US consumers buy and, you know, with the weights of what they spend their money on and then track the prices of those month after month and then track kind of what the average consumer basket costs and build that into an index to show how much consumer inflation there is. So housing, it's got food, energy, all the things you buy at the store, all the services you buy, everything that a consumer might buy. The PPI is the Producer Price Index. And that's a different measure that's measuring what businesses charge each other, essentially what they're paying for goods and services. So it's all the raw materials they use to build things or the intermediate things they use when they're building, you know, either whether it's goods or services. It's a kind of a business to business wholesale inflation. And so what often happens is that the wholesale prices, the business inflation kind of moves first and then it kind of filters through down into prices at the store when you go to the grocery store. And so a lot of people look at the PPI as kind of the leading indicator in many cases for the CPI now, different things in them, so they don't always match up. Exactly. But that's kind of the general idea of it.

Wonderful, thank you. Yeah. And you said, you know, cpi, the print came in lower than was expected. And you know, the Fed's been really on, on a tear here for the past, you know, year, solid year on inflation. And the tool that they've been using is raising interest rates. And you know, when we raise interest rates, we raise the cost of money. And in general, it slows the economy down. And we've seen that, you know, what we were up to over. Did it hit 9% CPI at 9% last year? I'm trying to remember exactly.

Just under. Yeah, yeah. High 8%. Yeah, yeah, yeah.

And now we're back. It was, was it 3.2 was the, was the latest.

3.2 was the headline. Yeah, that's right, that's right.

All right, I'm on it. Okay, good.

That's right. You know, you got it.

Oh, you're making me sweat here. Sam, I gotta keep, I gotta be on point for, with, with, with you here. But, yeah, so that's a, that's a, that's a massive drop, right? I mean, we've seen it, we've seen it drop faster than almost any other time in history. So that's, that's a win for the Fed. And I know a lot of, you know, it's, it's interesting. So the stock market went up, you know, after that. And we've seen, we've seen it rally on this. Why is that? Why would the stock market go up if, if it seems like the economy's slowing down?

Right. And that's the other kind of the push and pull there of what the economy is doing versus what the Fed is worried about. And basically it's those, it's a sort of idea of if the economy is too strong, the Fed gets worried. That means there's going to be inflation. That if it's kind of, if the economy is running past its capacity, then that's what causes inflation. Now, I guess there's two things here. That's what the Fed has historically done, and the markets have kind of built that into their thinking. So if they see economic data that looks like it might be too strong, they're like, oh, the Fed's worried. We were raising rates. That's bad for stocks and will slow the economy, you know, maybe later on. And so they tend to be more nervous when rates are going up or they think the Fed might raise rates. Now, if you actually look at the data, that hasn't really been true. We haven't really had a problem with too much growth causing inflation for decades now. And it's really been supply shocks like Covid or, you know, oil shocks from OPEC or Russia invading Ukraine. Those things are actually caused most of the inflation that we've had, not just people having a job too much or something like that, but the Fed sometimes kind of gets, you know, a little worried about things that it shouldn't worry about. So that's what the market tends to respond to. So if you see inflation coming down and you see, you know, the economy slowing down, there's probably not going to be much inflation and therefore the Fed won't be a worry anymore. And the market tends to like that.

Yeah, no, I think that's a great point. It's, it's sometimes, I think, can be very confusing to people when they see these numbers come out. But, you know, it's important to remember that the stock market is really a predictor of the Future in a lot of ways, it's a pricing predictor for these companies. And with the cost of money, if it continues to go up that, you know, then the stock market ends up pricing in that. To the cost or the, the, the P E ratio, I guess would be fair to say with respect to that. And you mentioned something else. I think when I was looking through the data, you know, one of the big drivers of the reduction is, you know, know oil prices are down a lot, which is great. Hopefully, you know, looks like maybe the war in Ukraine will be winding up. It looks like there's been some resolution in Israel here recently. So I'm, I'm definitely keeping my fingers crossed on all those things. And those things are all, all really, you know, have a big impact when it comes to inflation here. And hopefully that helps out people around the holidays. And as we go into the heating oil season, I would like to, I'd like to, to, to touch on, you know, some of the real estate stuff here, Sam, because, you know, I think, you know, interest rates really play into this. But before we do that, you know, you mentioned that it wasn't really that people had, you know, there weren't too many jobs, there almost wasn't like too much money. It was because we had these supply shocks and also we had all this stimulus. Right. Like, I last. I don't know what the exact number is, but I know at the beginning of the year when I was at a conference we were talking about there was like $6 trillion of liquidity on the sidelines and still credit, you know, is abundant. Like, you know, it's, it was still easy to get credit. And I always look at that like I try to track these bigger trends, like kind of like tidal shifts going in and out versus like the waves. And you know, the way I saw it, I was sitting on a panel about a year ago and I was actually supposed to be on it this week, but I'm going to be out of town again. And my, my, my co. Panelists said we're going to have a big crash in the market in 2023 and there's going to be a big. And I was like, I just, I said, I just don't see it. And you know, I look at like what Ray Dalio says and I track the real estate market and you know, with the price of real estate and land and all this liquidity in the market, I said, I just don't see it. Credit's abundant. I said, then we have this $6 trillion, you know, bolus of liquidity just floating around out there. And if a deal comes up, even if it's not a great deal, if it's a pretty good deal, I said I think people are going to pounce on it. What have we seen with respect to, you know, the liquid and the money supply? M2 I guess we could talk about and how does that play into, you know, the price of equities and the price of real estate? Sam.

You'Re right. It's been a crazy few years here. And yeah, you had, basically had, you had, you know, Covid, which of course shut everything down for a while and you had the huge stimulus that came after it all the, you know, check out people and everything else. And then after that died down, a lot of people did, like you said, assume that once that stimulus ended and then the Fed started raising rates to really tight monetary policy, you would then have, you know, recession severe, you know, drop off in earnings and everything else in the economy. And then that didn't happen about last year. Maybe like you, everyone I talked to in the media or even clients were super bearish expecting the world to end or we're going into recession any minute now and, and that, you know, it didn't happen. We turned out the economy kind of stabilized, never went into recession, is actually doing better now. And I think part of that is because a lot of those supply shocks got resolved and also because there was a second round of essentially of stimulus that was from the like the CHIPS act, the Inflation Reduction act, the Infrastructure and Jobs act, all those things that were kind of a second round. We're much more focused on investment related kind of building bridges and factories.

Infrastructure.

Yeah, yeah. Manufacturing and infrastructure and spending on that has really gone up quite dramatically. I think that's what's allowed the US economy to do better than expected this year relative to a what people expected it to do and also relative to other economies. Europe or China or most other economies in the world haven't had the same fiscal stimulus that we've had and they've done worse. So you know, I think that's been the kind of the key factor keeping the US economy in much better shape than it would have been otherwise. And that. And so yeah, I think that's helped offset the effect in some ways of monetary policy getting tighter, the Fed raising rates which normally would slow the economy down quite a bit and push the stock market down and all those things. But you now you've had kind of that counterbalance from fiscal policy which we haven't seen really in this way for decades. So it really caught up people by surprise. It's been a big sort of shock in some ways, but people forgot about it once those legislation got passed, and now we're seeing the effects of it. So I think that's also affecting, you know, real estate to some degree in the sense that there is that kind of money around to do things. Now some people have gotten, you know, some commercial real estate that's gotten into trouble, and the banks have, you know, felt some of that because everybody's going back to the office after Covid, you know, and so some commercial real estate that's not being used as much. But the residential real estate market's held up quite well because people have jobs, people are getting raises. They can. They can afford the house. They just can't afford the mortgage as much.

It's the.

It's the cost of financing is the problem. And so this kind of, you know, weird balance of. There's not much on the market in terms of residential real estate inventory. People don't want to sell and give up their 3% mortgage to take on a new 8% mortgage. But the people who want to buy are nervous about taking on a high mortgage or paying up for it. They want to wait for prices to come down. They haven't really done that much. So you've got a kind of a locked market in the residential side. At the same time, there's a lot of multifamily housing building built, apartments and stuff being built, a lot more so than even single family housing. So I think that's where a lot of the new building is going on. And so there may be more supply coming in that regard, which will help keep rents or the rent growth, I should say lower, as it already started as to.

Yeah, no, that's a great point. And, you know, we. We have. We have over 3,000 units on the apartment side, over 3,500 now. And several of those communities are built to run communities. We track. We. We track the single family, you know, pricing and rates and all that stuff. And yeah, I mean, we're still. We're still at a massive shortage in this country of somewhere in the order of 4 million, you know, units on the apartment side. You know, you can add a couple million more units on the housing side or even more when you look at affordable housing, because, you know, we have. We have record household formation as the millennials are coming out and forming households and doing that. They want a place to live, you know, whether it's an apartment or, you know, a townhouse community or we're actually their own single family house if they can afford it. Yeah. So as you mentioned, like the markets, a lot people aren't selling their homes. That means supply is lower and demand still high. You know, people still want to do that and it's largely, you know, it's largely inelastic a lot of times when it comes to that. So where do you go? You go to one of those, those three, which has been really interesting to see that play out. So, yeah, that's why I'm still bullish on the specifically, you know, the multifamily side. I just don't mean we have a lot of supply coming on. It's muted rent growth to a degree, but rent growth has still been positive this year and there's been some pockets. What have you seen in terms of this was one of the things on my notes here. What are the, what have you seen on term building permits, you know, comparing multifamily versus single family. SAM Today's show is sponsored by Money Insights and their investment Optimizer strategy. In my book, I share how I use the same strategy starting over a decade ago to invest my money in two places at one time. This strategy has been used by the wealthiest for generations for estate planning, minimizing taxes, preserving wealth and increasing stability for their investments. Now you can do the same thing. In addition, you can build a plan to build an emergency fund, pay for college, fund a business plan for retirement, and ultimately optimize your total financial picture. To find out more information, check us out at the banking link at Next level income dot com.

Yeah, it looks like the multifamily side has been much stronger than the single family side. The single family side has held up surprisingly well given the sort of 7 or 8% mortgage rates, which normally you would think would just crush, you know, new home buying, but also new home construction. And so we've seen that the, you know, the home that I track in terms of their, their stock prices and earnings had been, you know, holding up much better than expected. They've actually weakened some in the last, I don't just say month or two as I think they're finally starting to feel the bite from, from the higher rates. But I think overall there's still that demand. Like you mentioned, a lot of people want to own homes and you know, during COVID of course, people didn't move. They just stayed where they were, wherever that was. Or they tried to move out of the city centers and into the suburbs if they could. But there's Still, I think a lot of that kind of, you know, dislocation and kind of pent up demand from things that didn't happen for a year or two during COVID that we're still trying to work out. But they're just trying to work it out with a, you know, the much higher mortgage rate than people are most people were used to. So I think yeah, multifamily has been where more of the growth has been, but there is still some growth in the rental prices just less than there was, you know, a year or two ago. Which is, which is good. You know, we don't want to have double digit rent increases.

Oh, it's crazy. Yeah, we've seen 25% growth in some markets year over year.

Yeah, so. So yeah, so I think like say as long as the employment market people have jobs and are getting raises and so far that's still true. Then the underlying ability to pay for a home is there. And that's really, I think that the key driver that there desired own homes or to rent, to have a home have and there's the income to pay for it. And then it's just a question of the financing side of things depending on who you are and where you are. And then of course there's all the local variations depending on where in the country you might be and what you're looking for. But yeah, so that's what I've noticed in the data that it is more multifamily than single family, but both are holding up better than if I just told you mortgage rates were at 8%, you would have probably predicted much weaker kind of data than we're seeing right now.

Yeah, like a catastrophe. Yeah. I mean it's interesting because we've had a ton of supply this year. We'll see solid supply next year in terms of apartment units. But starts were down because as rates went up, you know, a lot of builders, developers said whoa, whoa, whoa, can't afford, can't afford to do that right now. It doesn't make sense. So I think that'll, you know, that'll kind of, that'll kind of shift and moderate back and we'll still see, I think we'll still see consistent rent growth here over the next several years, Tom, as we kind of move through, you know, some of this newer supply. But like as you said, it's going to help, you know, keep rent growth at a healthy rate, you know, not this crazy 10 or 20% rates that people can't absorb. The other thing you mentioned was, you know, Infrastructure spending. And this is something that I kind of look back, I look at the real estate market kind of in these, and some listeners will smile and nod when they hear me say it. It's like an 18 and a half year cycle. And as it ebbs and flows towards the end of the cycle, we see this infrastructure spending. You mentioned decades. You can go back, you know, kind of the beginning of this, this, this century, but really, you know, going back, you know, another almost 20 years, you know, we saw a lot of the spending. You know, we're seeing it in just general infrastructure, which we desperately need in this country in a lot of areas. I think, you know, next year with the presidential election year, I think we'll see, I don't know, I think we're going to see some sort of stimulus as the Biden administration tries to, you know, and maybe that comes in student loans, maybe it comes in infrastructure spending. I just feel like there's going to be more fiscal stimulus in some way, shape or form, which is interesting with the Fed trying to fight inflation and the government, you know, fueling the fire on the other side of things. And then one thing I just, I was just reading about here this morning is the White House just announced a new program to help convert offices to apartments. Which I get asked all the time, people like, hey, this is a big. But, you know, it's not, there's a very small percentage of that. Any, any thoughts on that or what you see, what you see in terms of that in general, kind of like bigger trends. This is something I've kind of seen we saw with condo conversions. But this is something that's fairly unique in my experience in the past, you.

Know, 30 years, wait, you know, commercial real estate, you know, kind of operates and there may be a per, you know, X percent kind of decline in demand for, know, commercial downtown office space because more people are just comfortable working from home. You know, people have office kind of desk jobs and zooms and have replaced X percent of the, the former demand for, for commercial real estate in some ways. And so if there is a, something to be gained by taking some of that downtown, you know, particularly urban office space and converting it into apartments, you know, places where people want to live, but that has been too expensive historically, that might be something that would, you know, help kind of balance that out. But there's still demand for places to live, but slightly less demand for places to work. And so that may be a way to balance that out. Now, I know it is, you know, just as a practical matter, Tricky. To convert something that was built as an office building into something that can be a housing unit, you know, costs a lot of money. But, yeah, with the government's help and some people who have, you know, incentives to do that, then that might be one way to do it. I think you're right that in generally speaking, that fiscal policy helping infrastructure, roads and bridges and airports, but also building electric vehicle factories and everything else that's going on right now has been a key kind of underlying support, both for people having jobs, but also for building out the productive capacity of the economy and making it easier for things to happen. So I think that's been a key variable in terms of what's different this cycle versus previous cycle. I think, yeah, the administration will try to do as much as it can in that regard. I think Congress will be a sticking point. I think it'll be harder to get anything big through the current Congress as it stands. But, yeah, other things that. And then the legislation that was already in place will last for a while. It's got kind of like.

It was over a trillion. That was what, $1.1 trillion and. Yeah. And I love what it was. Inflation Reduction Act. That's funny. Like, I had to laugh when you said that because it's just like. It's like what a. It's what the government likes to. Right. They name things that are really the opposite of what it is.

Right, right. It all depends on how you spend the money. Yeah, exactly.

There you go. Yeah, it does. Yeah. We're gonna spend money and reduce inflation. Okay. But no, it's, again, you know, infrastructure in general. I think it's. We got, you know, hey, we gotta. If we're gonna have all these electric vehicles we needed, we need to upgrade the electrical grid. It'd be great to have some more on shorting with respect to a lot of the technology that we have. And I'd love to hear kind of your thoughts on that, which how you kind of share with your readers and with your research, how we can predict that. But before that, let's. Let's talk a little bit about kind of where we've been with interest rates. I know we touched on it a little bit this year and kind of where you see rates going, because I don't know, in my perspective, the Fed seems to always kind of wait too long to raise rates and then overshoot and then wait too long before they lower rates again. And the rate curve is still inverted. So I know a lot of people are like, hey, this is why we were Calling for a recession. We haven't seen that. What are your thoughts on that kind of historically and where do you, you know, what is your research showing with respect to rates going forward here in 2024?

Well, yeah, no, I certainly would agree that the Fed often, you know, is behind the curve and kind of, you know, causes more problems than it solves in some ways trying to kind of adjust rates to tinker with the economy when there's a lot going on. The economy that is driven by Fed policy and they respond to things that are maybe supply shocks or other things that maybe they shouldn't be responding to. They're causing volatility that doesn't need to be there. So yeah, I think they, I don't think they're going to raise rates any further. If they called me and asked, which they don't, but they should they ever called me and I would say the rates are probably already too high and could come down some. I think inflation is already close to their kind of 2% finish target. If you account for the fact that the housing data that's in the CPI is lagged. Yeah, slow to move because of the way it's constructed. You know, by definition I think they're aware of that, but they can't, as a kind of a publicity thing, they have to kind of keep the perception that they're still fighting in as long as it's, you know, above their target. So they can't come out and say, oh, we're going to, you know, stop raising rates or cut rates soon because then that would look like they're know, giving up on their inflation fighting credentials. But a lot of that is again a public perception. The Fed can't really control inflation that well and never has been able to, but you know, they're supposed to. So they act like they do much more, as much. The fiscal policy actually has a lot more influence than, than monetary policy does in kind of reality. But you know, it's, that's harder to pin down. So yeah, so I think, I think there will be rate cuts probably next year. Once the official inflation data finally catches up and shows that inflation is down to around 2% next year, then the Fed will have a harder time saying that need to be at five or five and a half percent and they'll probably bring them down some if they do that without a recession or a crisis. That would be the first time really since probably 1995 that that's happened. And 1995 was actually kind of the last real soft landing, you could say we had things slowed down but didn't stop. And then the Fed could cut rates a little bit and, you know, keep the economy going for another few years. And if that were to happen, which I think has a decent chance of happening, that would be kind of a good scenario. Stocks would do well, you know, consumers would do better, but that would be kind of what you want to see. The risk is that either they over tighten or stay tight too long or that fiscal policy suddenly gets thrown in reverse and that the federal government, Congress decides to cut spending aggressively and really contract fiscal policy. And so you have contractionary fiscal pulse and contractionary monetary policy at the same time. And that's usually what drives you into recession. So 2000, 2008, 1990, a lot of these things are when you had that combination of monetary and fiscal policy, both in contractionary and then shortly thereafter you had a recession. And so I think that's the risk that we're having to look at in 2024 is will fiscal policy be enough to kind of still be a counter to the monetary policy? And will monetary policy, will the Fed figure it out quickly enough to kind of back off and not have a recession and overcompensate for inflation like it has in the past in some cases? Or does it have to wait for a crisis and a recession to happen and then come along, you know, throw money around and panic and try to stimulate?

Yeah, no, I think it's a good, I mean, I look at and I think, okay, this would be an easy way for the current administration to work with the Fed to help juice the economy without having Congress in the way of blocking that, because you would really throw a lot of fire back onto the real estate market. You could say, hey, we're increasing housing affordability by encouraging these policies. You know, you can, you know, you throw, you know, because look, multifamily is really the only commercial sector in terms of real estate where, you know, there, there are federal agencies that are actively trying to improve this. So I'm like, okay, I could see that, I could see that, that happening to help give this administration at least some sort of wins as they go into, into the election and then you know, itself into a corner with raising rates because you look at the cost that we're paying in terms of interest rates. And I'm like, this just, it's just fist, it's just financially impossible to keep rates high and keep these, these federal, these deficits so high as well. We're end up paying down so much. So I don't Know, I look at them like, what's the end game? You think? Like, if, if they want to keep it, keep, you know, the music spinning a little bit longer, music on a little bit longer, then you got to raise, you got to lower rates and do that. So I feel like that would be, that would be a pretty easy way to get there, but we'll see. So maybe they will call you, Sam, and ask for your opinion and you can chime, but if they don't, they can read your, they can read your weekly roundup that we were chatting about at the beginning here. And what, you know, we haven't talked a lot about how to, you know, get into stock picking and how we talk about the stock market and those sorts of things. So if you wouldn't mind, kind of do a little overview about what we can see in your weekly roundup and what you share with your readers on a regular basis.

Sure, yeah. So the weekly roundup is meant to be kind of an overview or summary of a lot of what I offer to institutional clients that I work with, both in terms of asset allocation, kind of should you want to be more on or risk off in terms of your stocks and bonds, your general portfolio, should you expect things to be relatively low volatility gains, or is it going to be a risky period? And so I update that. There's a model that I use, again, the idea of having a well defined objective, a set of indicators to look at, kind of reading every day and getting carried away, whatever the journalists are writing, have a set of data that, you know, historically has had a good relationship in terms of forecasting future returns and risk. So that model is in that report every week and, and kind of allows you to kind of track, you know, whether conditions are improving or deteriorating in terms of the overall risk that you want to have in your portfolio. And then also offer sort of macro commentary kind of describing, you know, what's been going on, whether it's in the macro data that we talked about or, you know, investor sentiment, kind of what people are saying or, you know, different sectors or, you know, regions in the world, whatever is really kind of relevant and topical in terms of the indicators that I look at from an investor standpoint. And there's also a stock selection component where I have a, again, a model, a quantitative process for identifying stocks that have improving fundamentals, you know, good price trends and good valuations, and just giving you a list of 20 stock ideas that look really strong in my work. And then the list of the, the lowest ranked, the, the weak stocks. So you probably want to avoid. And, and as sort of just an idealist of things, if you're looking, and you've maybe been looking at some of these names yourself and you see them on my list and that's maybe a something to look at to buy. But again, it's meant to kind of provide a framework, some, some, some commentary and ideas for investors who are maybe a little more active or, you know, managing their own portfolios and want some ideas that are based on, you know, long term time tested indicators that professional investors use and pay a lot of money for. And so you can get it for much less there in the weekly roundup.

Yeah, no, I got, I got a issue pulled up right here. So I was going through it as you were, as you were going through. And I like, it's, it's concise, it's digestible and it covers a lot of the, the macro stuff which like I.

Said, I'm sorry, A lot of pictures.

Yep, absolutely. And yeah, look, I'm an economic nerd, so I absolutely love, love stuff like this. So it'll be in the show notes. If you want to check it out, you can, you can click on the link there and you can learn a little bit more about Sam's weekly roundup. It's at millstreetresearch.com forward/weekly-roundup. Again, we'll have that in the show notes. And Sam, I could, I could chat about you with this all afternoon. We could, we'd pour ourselves a drink and continue on into the evening. But I'm going to have to let you go. But we'd love to have you back on here in the future and we can continue to look forward and backward and educate the audience here on what we see coming up. So thank you so much for sharing your knowledge with us today.

Oh, it's been a pleasure. Thanks for having me on, Chris.

Absolutely. Hey Chris, here again. I hope you found this episode valuable. Now I have one more thing to gift you. We have a page for my coaching clients where you can get a free copy of my book as well as much more from previous guests on the show. Just check out nextlevelincome.com coaching to get a free copy of my book, audiobook and much more. I'll send you a copy of my book and cover all the shipping costs as a thank you for listening to the podcast. Also, please like share and take just 90 seconds to give us a rating on Apple podcasts.