Hello, and welcome to What Goes Up, a weekly markets podcast. I'm Mike Reagan, a senior editor at Bloomberg and this week on the show. For several years, cryptocurrencies were considered fringe investments on Wall Street, but this week a massive intro day plunge in bitcoin had some serious ripple effects on the stock market. Is this type of contagion the new abnormal for markets? We'll get into it with a veteran market strategists, and we'll also get his take on what type of stocks look attractive these days in this strange new world of risk taking that we're in. But first, Charlie Pellett tell us who this week's mystery co host is. This week's mystery co host is Vill Donna Hi Rich. Vill Donna is a cross asset reporter for Bloomberg in New York, and she owns a rescue from Kuwait. Her hobbies include running marathons, watching videos about grammar on, looking for typos, hint stories that Mike Reagan has already edited. That's all true, Vildna, correct. You know to me? My favorite fun Vildona fact is the cat from Kuwait. I need to hear that story. How did you rescue a cat from Kuwait. Oh, it's a state secret. I can't tell you. She is a rescue from Kuwait. We actually worked with small organization and there's a woman who works for one of the bigger airlines and she does a lot of US to Mid East trips and she puts them on the plane basically and and brings them in. And that's how my sister got her cat. That's how I got my cat. So that's pretty good. Katie Greifeld had a cat delivered the plane in some mysterious circumstances. Cat. You cut. People are weird. I don't know. That's not how we get dogs. No one would. No one would allow my dog on a plane. I guess is part of the thing. But we love them so much, I guess, so, I guess. So that's it. But the Donna. I'm very excited for this week's guest. Um. As you know, I've been doing this job a few years. Our guest has been doing it for his job for a few years, and we've never actually met. So I thank you for putting us all together this week. I will warn you, though, the Donna, our guest is from Boston, and there's He's got a great reputation as a nice guy. But there's always a risk with people from Boston at this time of year, and that's all they really want to talk about is the Red Sox. So I think we'll allow that. I don't know if some of our New York based listeners will will care for that, but I'll allow a little Red Sox talk. I'm from Philly. I it doesn't bother me that much. But I need you if he starts talking about the Celtics, I need you to cut him off, no problem, alright, if you hear the names Kemba Walker or Jayson Tatum, just hit that mute button on him instantly, right, I'll let him talk about talk O Fall. I like that guy. That's my favorite. That's my favorite Celtic Taco. Fall is the only person I've ever seen dunk cat basketball without leaving his feet. So that's made him one of my favorite players of all time. Well, let's bring him into the show here. He is the chief market strategist at National Securities. His name is Art Hogan. Art. Welcome to the show. Thanks so much for having me. It's a really a pleasure, Art, And you know what I do want to get into that idea of the cryptocurrency contagion. But I was reading near bio Vildnosan over your bio, and one thing jumped out at me that I find really interesting, and that's you started off your career on the floor of the Boston Stock Market, um, Boston Stock Exchange rather. And I find that interesting because when I started up Bloomberg UM just years ago. Uh, it was right when the computerization of markets was was in full swing and all these regional exchanges were kind of getting swallowed up by by the bigger players. I think it was Nastac that that bought Boston. But I has been curious. I never quite wrapped my head around sort of what the distinction was between these regional exchanges. I mean, obviously different type of clam chowder served in Boston then uh New York Exchange. But I'm curious, like, what was the scene like at the Boston Stock Exchange on picturing Maybe is it the type of thing where New England companies would would perhaps have a little bit more liquidity on an exchange like that? What was what was the purpose of of these regional exchanges like Boston and kind of what was it like working there. Yeah, that's such a great question, and you're your concept of hto regional exchanges is a very popular misconception, right. So the regional exchanges were trading just about everything that was traded on the New York Stocker Change and at the time the American Stock Exchange, and what they really were was a national market system. So there was seven regional exchanges too on the West coast, one in Los Angeles, one in San Francisco, There's one in Chicago, the Midwest Stock Exchange, which was the largest, Philadelphia had its own exchange, and Boston had one of exchanges. So they were well over a hundred years old by the time I got there, and they were really competition for the New York Stock Exchange. So think about it like this, The New York Stock Exchange would do about eighty percent of the listed volume and the regionals would do That's interesting, And would it be the type of thing where you know, say a firm like Fidelity would would do more trading on Boston than would New York, you know, a Boston area firm. That was certainly the case, at least for me. I worked for Fidelity, so I was actually a Fidelity employee and a floor broker on the exchange. And just to give you a sense of the time that I was there, I was there for the October crash seven, where the market went down twenty two point six percent in a day. To put some context around that, that would be about seventy points for the DAW to go down on a given day like today. So it was a you know, so pretty crazy times, and electronic trading really was at its infancy, so we were actually writing tickets and ripping things up and then there was a mess on the floor and that October uh Monday of seven, we were up to our knees in paper because it was just the craziest day anybody had ever seen. Or let's let's get into that idea of crypto speaking of crazy things. Um, you know, first of all, my nuts to think that that plunging bitcoin did have some contagion in the stock market. I'm and I'm talking beyond sort of the the names that are exposed to to crypto, like Tesla and UH micro Strategy and those type of stocks. It felt to me like it dragged the whole market down. Is is that your sense to well, it's interesting that's there's a lot of people that are really coming across that concept and saying, hey, you know, we've we're seeing cryptocurrencies down some thirty in a single day in the markets down to there must be some correlation. So the obvious correlations are the things you just mentioned that things that are directly tied and correlated to cryptocurrencies. But I think in a real sense, I step back and say what's happened in the second quarter, and I would say that we've removed a lot of speculative excesses in different esset classes. So for example, spacts, which were all the rage in the first quarter, have really fallen upon hard times in the second quarter. Right, we had a record number of SPACs last year, and in the first quarter we beat that record, and all of a sudden, supply had really swamped demand. So a lot of those spacts that came out and came public have pulled back significantly. We saw the same thing in electronic vehicle related stocks. We've certainly seen that over the last three days in crypto So I think it's much more they risk off and remove some speculative excesses and less of a correlation where people are looking at this and saying if people are selling bitcoin, they must be selling the SMP five funder. Well, Art, can I actually ask you to sort of help define what is going on with with markets right now? Because when we think back to last year, it was really easy to see who was leading markets. It was tech up until November right when you had some of the vaccine announcements, and then even after that you sort of had some clear and delineated market leadership. And I feel like over the last couple of weeks the narrative has been really difficult to define, to say the least, besides everything else that's sort of going on on a day to day basis. But so, can you help us make sense of of how we even describe what is going on with markets? I think if we back that lends up a little bit and say what happened in that's not happening in twenty one is a pretty good way to give a snapshot of what we've seen this year so far. So was all about what it was that was helping us get through a pandemic, everything that helped us work from home, like the Zoom app that we're on right now, like the all the the information technology that made our lives easier and possible. The work from home crowd that that the pandemic darlings were the rage, and they were until about Labor Day, and around Labor Day and and and things really getting stretched. The relative strength index for the maastic and positive nastic one had gotten to significantly overbought, and we saw a significant rotation. We saw a pretty good draw down in the nastac the better part of nine after Labor Day, and a rotation into aconomically sensitive cycnicals which had largely been ignored. And that was really the beginning of that reopening trade. So people decided that we need to start selling those things that have been working and got into you know, excessive valuations towards the end of the year, and and that proceeded to continue that rotation all the way into the first quarter of this year. So we came into the first quarter of this year and that rotation was pretty strong. You saw pretty good ramp up and economically sensitive cycnicals, everything from industrials to financials and energy, which is the best performing sector in the SP five hundred right now. And and the money was coming from the selling of technology, for example, but a lot of the other pandemic darlings. So I think that that sort of set the table for both of those trades to get stretched in the first quarter. And what we've seen since the second quarter began is that back and forth rotation based on how far we oversold technology and how far we've over bought some of the cyclicals. I think the the the pandemic darlings got oversold and I think that some of the cycnicles have been over bought. So we keep going back and forth on a week by week basis where that rotation reverses itself, and I think that's where we're going to be for most of the summer, you know, just to get back a little bit to that relationship between crypto and the equity markets. To me, I've always thought of it as crypto as kind of um almost like a safety valve for this sort of over excessive risk taking and sort of exuberant sentiment out there, especially with all the liquidity we have UH in the markets right now, and and how that you know, it's a nice little safety valve for for the stock market. You know it perhaps you know, can can siphon off some of that froth that otherwise would have you know, been pumped directly into the stock market, you know, as the case was perhaps in the dot com era, where all the all the speculation, uh, and all that euphoria was focused you right on on the equities and and all the I p O s coming out. But I do wonder, you know, when we look at and not just bitcoin. I mean, obviously ethereum is is the hot topic these days. Uh, and bitcoin and ethereum also being you know, sort of the blue chips of the crypto world right now. But when you go get further down the ladder to say doge coin or or some of these ridiculous meme coins the names of which I can't even say on a on a family podcast like this, and you watch this this paper wealth be vaporized. Uh, it's the tune of hundreds of billions of dollars in a matter of hours. Ultimately, I I find that to be a risky, dangerous thing. But I'm curious how you sort of think of that interplay between you know, the animal spirits uh and the euphoria chasing to get rich quick type of trades and crypto. Um, it's not ultimately a healthy thing for the stock market. Or put that sort of ricocheted back and and and be a bad thing. Well, I think that's an interesting way to set that up, Mike, and I think that when you sort of harken back to we had hundreds of companies that put dot com at the end of their title went public, and you know, often times we're up a hundred percent on the first day of trading and low and beholds. As two thousand turned to two thousand and one, a lot of those companies disappeared. Now we have hundreds of cryptocurrencies that have exploded in value, And to your point, is that a safety valve of of speculative money finding a place other than the stock market? For sure? I think that's that's certainly the case. I think the way to think about crypto in general is the backbone of crypto obviously is blockchain, and blockchain is likely to be a more important um paradigm for us in the future, very much like the Internet is much more important to us than it was in We just don't know who the winners and losers are going to be, and I think it's going to play out in a similar fashion. So we're not gonna have hundreds of cryptocurrencies will likely have some winners. I think the basic foundation to that is the technology behind it that will help us transact business in a more efficient and a more efficient way. But in terms of investors, that just your garden variety investor. You have to know this is speculus, and I think that the volatility is a feature. It's not it's it's not a bug, it's a feature. And we've seen since they started Bitcoin it's had at least half a dozen draw downs um and we just went through another one. So to to think about this as a stabile asset classes is the wrong way to think about it. And if you're going to invest in this, you want to think about something small and money that you would only put in a specultive bucket, something like a zero to five. And so a lot of times when people are talking about cryptocurrencies and and some of the volatility that we see there, they'll tie it back to retail investors either rushing in or getting burned, depending on what's going on. But so, how would you how are you and your team thinking about the involvement of the retail investor. Obviously it's been a really big topic for the path year, but then you sort of see conflicting data points where you might see inflows, for instance, into some retail favorite e t f s, but at the same time you're seeing waning call option volumes. So how are you guys thinking about the involvement of the retail investor. Yeah, so the involvement of retail investor in crypto is something we sort of have to keep it at arm's length. We will partner with somebody that runs a fund, but then that fund is going to charge fees, so it's probably not the most efficient way to do this, you know, in terms of overall advice, we know, make sure people know that it's not for the faint of heart or what is an orphans and it should be treated as a speculative asset class. So I think in the future, you know, when an e t F is approved, there'll probably be a lot more retail involvement, but again it should be sized to what you would size any speculative investment towards. And I think that when we think about that, we get questions about it all the time, But I think that what is healthy into Mike's point is the kind of volatility that we've seen this week is a reminder to everybody that it's not gonna always just go up, and nothing's guaranteed here, and it's likely something you want to be pretty conscious about as you tiptoe into it as an investment. I tend to think of it as a lottery ticket money, you know, stuff, You're an amount You're not, uh gonna feel a lot of pain if if, if you lose on some some losing tickets. But I wanted to talk a little bit about this perennial debate between growth and value, UH and in this case the real cyclical parts of the market as the reopening of the economies gets stronger and stronger. I think you've got a pretty interesting approach. You're almost sort of, you know, the neutral Switzerland in this debate, UH, recommending a kind of a barbell approached where you have growth on one side of the barbell and more cyclical stock exposure on on the other side. Unpack that for us a little bit. Uh So, what kind of sectors, what kind of names are you looking at on both ends of that barbell. Yeah, so our approach really is barbell approach that has growth on one side and cyclicality on the other, and we want you to have that approach because we don't think it's going to be a binary investment climate ever, right, So we don't think it's only going to be growth and not value and and and when we think about value, we think about cyclicality, especially in a reopening economy. So if you have balance where you say, okay, what are the three themes I can really get my head wrapped around in growth and then we've thrown out cloud computing, cloud security, and five G is thematics that we like and and and express those opinions UM that manifest exposure to those themes. And then on the other side of that, look at what's gonna work in cyclicality. So we've we've selected materials, industrials and financials. A lot of our investors have swapped out materials for energy and and happily UM. But what you have to do, though, is really important, is every two months to keep that barbell balanced, you have to sell the winners and buy some of your losers. So in February was one of the first times in three rotations where we actually had to sell some over cyclicality and put more money into the growth and and and that level the bar backout so you have equal exposure of exposure. And if you had done that for all of you would have outperformed the SP five foundered by almost five funder basis points, but four three basis points. And we think the same thing is gonna be true this year. And I think that helps you navigate these rotational markets where we have where growth is back, people are buying the growth names again, or wait a minute, they're back to cyclicality where you know, jumping into the financials. The industrials are doing great, and that gives you some balance. And if you set that timer so you know that you have to rebalance on a two month basis, you don't have to make that emotional decision to say I really don't want to sell my winners and buy some of my losers, and forces your hand and keeps you in a diversified portfolio. And of course, the other perennial, the new perennial debate is inflation, of course, and I know in your recent notes you've written about some of your thoughts they're saying inflationary pressures will be more temporary. So I'm hoping you can sort of bring that into a conversation and how you're you're thinking about inflationary pressures and is it your view that even if we do see some inflation, stocks can still continue to do well. So one of the concerns that you have is is is about inflation? Is margin pressure? Right? Do you get margin pressure if your input costs start rising but you're not able to pass that increased costs of of good sold onto the consumer. And through the first quarter earning season, we've already heard from some of those companies that have said clearly stated we need to raise prices. Some of the inflationary pressures we think are going to be temporary, because there's an old saying that nothing fixes high prices like high prices and you get a supply response. So we're starting to see that a bit as capacity utilization has gone up and sawmills, so number prices have come down about over the course of a week. I think that's healthy. I think the same thing will be true and energy prices as more production comes online, whether that comes from Iran sanctions coming off or OPEC plus increasing output quotas, which they're doing in North America going from eleven million barrels a day to thirteen million barrels a day. I think that'll that supply response helps push down on some of those inflationary pressures. So that's why we think that some of it's going to be temporary. I think the FED feels that way as well, and they're willing to be asymmetric on their inflation target. Their target has been that their target of two pc hasn't been met in ten years. They're willing to let inflation run a bit hotter unless an until we get to substantial economic progress towards full employment. So I think that a combination of a FED that's going to be patient with a little hotter inflation, which we've seen some reports of, and just the economics of supply and demand seeing a supply response come back into the marketplace. So right now we're in a world where aggregate demand is outstripping aggregate supply. I think the supply response gets us to a place where a lot of that gets neutralized. And it's not gonna happen right away. We'll probably have inflation running hot throughout the balance of this year, but I don't think it gets hot or I think at plateaus, and I think as we entered the first quarter next year, prices started to come in, you know, or I know you have a year end target for the SMP of about if I'm not mistaken, Um, that's not too far from where we are now. You know, I'm looking at my screen. It's probably about three and change away. UM, So I'm curious how you're thinking about that. You know, is that the potential that that maybe you'll even raise that or is it a matter of you know a lot of people are sort of racing for the FED too, starts thinking about talking about talking about thinking about maybe even whispering and rumors about that dirty word tapering, and a lot of people looking at even possibly as early as the Jackson Hole meeting in August. Is that kind of embedded in that forecast a little bit of uh, you know, a hint that the punch bowl will be drained next year? Uh in that forecast? Or or how are you viewing that at this point? We put the target out at the beginning of the year. It's about a fifteen percent upside from that point in time. So to your point, we've already captured about ten or eleven percent of that. UM. It's predicated on a multiple, uh, the current multiple for the SP five hundred, but based on a hundred and eighties six dollar earnings estimate for the SP five hunded, well, that number has gone up already, right, So the one that we're factoring that against worked its way higher after the first quarter earnings reporting season, so we'd have to make an adjustment on that. On a standstille basis, the estimates for the second quarter in the second half are now higher than than they were when we started this. So I think that when you think about what happens when the FEDS starts inching towards tapering and getting that message out there, I think they're going to be deliberately cautious about bleeding it into the marketplace, so we don't have that surprise taper that we had in two dozen and thirteen that caused a much more abrupt sell off. But it's certainly gonna slow things down, and I certainly think that as they start talking about it, more and more people will describe a lower multiple to the earnings power of of equities and that will likely temper some of the upside. And I think your timing is probably right. If you start thinking about Jackson Hole being at the end of the summer, and that's been a time frame when central bankers have have signaled changes in policy and policy paradigms. That's when quantitative easing was first introduced. So this maybe the time that they start talking about talking about tapering and and likely don't take action on it until the fourth quarter of this year. I think that's going to give the market plenty of notice. And at the very same time, I think second quarter earnings are still conservative and second half earnings they're still conservative because I just don't think we've come close to realizing the explosion of economic activity we're going to see as people get back to their normal lives. So with the FED, with the FED minutes coming out this week, and the FED hinting at the T word talk king about thinking about talking about tapering, if somebody were to ask you about this, how would you recommend investors actually start to prepare for that or position for that. Yeah, that's such a great question. So some of the things we think about in terms of investing to to hedge against inflation have a lot to do with what our Barbell approach looks like. So the Fed's going to be tapering because the economy is recovering, so all of the economically sensitive cyclic ales that we look at will do better, right, and a and a improving economy that is forcing the FED to start reducing their monthly purchases of fixed income assets, so that side of the barbell actually will outperform likely things like industrial materials, um, financials, energy, and that will likely heads you a bit. But at the very same time, if you if you, if you were all in on just cyclicality, you're gonna miss what it's going to be in a pretty explosive growth in things like five G and cloud computing, cloud security, and the themes that will continue to be evergreen in terms of technology revenue and earnings growth. Art We're gonna get to the craziest thing soon, and I have high hopes for vill Donni here. She is actually uh what I call our chief Crazy Things correspondent. Um, so no pressure of Bill Donna, but the hopes are high for for your crazy thing. Um what are Before we get to that, A lot of the guests we have on our very macro focused and and very hesitant to drop the names of some stocks they like, I've got to feel and you'll be able to hit us with a few names on either side of that barbell that are looking attractive to right now. Are there any stocks that, uh, you can kind of talk about as as good byes in your mind right now? Yeah, a couple of the names that we think about on the on the growth side and how do you express an opinion and things like five G or cloud security. We've got Palo Altode Networks on our on our focus list, We've got Apple Computer on our focused list once a Cloud Security ones clearly a five G play. On our National Dividend list, we have Verizon, which is clearly a five G beneficiary. So those are some of the cyclical names. We have Lamb Research also on that list. So I think those are some of the names that when you think about the growth side, that actually have earnings. And that's the difference about playing some of these themes because as interest rates start to go up, that long duration technology play that really rapid revenue growth, but earnings that are far out in the future are going to be discounted back at a much higher multiple, right, So you're gonna instead of being willing to pay thirty times for that kind of revenue growth, You're you're likely going to pay fifteen or twenty times. So we like those companies that are measured with a price to earnings ratio, and we certainly like, you know, the thematics that were locked into those some of the concepts around that. Over on the on the UH, the side that we we sort of consider the economically sensitive cyclical side. JP Morgan is one of the names that certainly feels like as a as a financial is going to do very well. I think that we think that Visa falls into that category as well in terms of financials. And then when we think about some of the industrial when we when we look at um industrials and materials, we certainly think that Caterpillar is a great way to think about that, and and UH and and and sort of play that. Now, those are individual names. A lot of our folks that are using the Barbell approach, we'll just use the e t F. They'll use the cloud Security et F and pick their favorite one. They use the five G t F and and that's another way to approach it. So it's it's it doesn't have to be picking single stocks as long as you're expressing the opinion that it's giving you exposure to the right themes and growth and at the same time the right themes that you want to be expressing opinions. And on the on the cyclical side, you know, five G to me, seems like an area that's got a kind of a long runway for say a buying whole type of investor um as opposed on the other side of the barbel some of these cyclicals, I feel like there's an expiration date on their outperformance. Is that is that tribe with what you're thinking, Yeah, that's probably true, right, So when you think about real long duration and thematics five she certainly plays into that. We're just scratching the surface of what that's gonna look like. So it's you know, it's probably out in front of us for years, as is cloud security. I mean, we just had another cyber attack and it's the second major one that we've had this year. So cloud security is always going to continue to be you know, important to us. But we don't know how high interest rates goes. So the financials likely you know, in an approving economy, both have more demand for the goods and services, but likely we'll have a lot more natatures margin. So I think that you know, just rising industrates help the financials just by turning the lights on. So I think there's a there's there's there's some runway on both sides of that. But that's very true. But I haven't forbid if we were able to get an infrastructure bill passed, some of the other industrial materials you know clearly are going to be beneficiaries of that. And again that's a six year plan, right, So to me, I think, you know, there's longevity and a lot of this, but you know it's it's I think one of the ways to protect yourself from any of these things getting too frothy is is is just that every two months you have to recalibrate that and if any of this has gotten ahead of itself, you're rebouncing into what hasn't been working. That's a great point about the infrastructure plan that that would provide a much longer runway for those names. Great stuff art um. Let us now go till Bildonna's favorite segment, The Craziest Things We Saw in Markets this Week stand clearer of the craziest things we saw in markets this week. I'm gonna save yours for last, Phildanna, because I have a feeling you're you're bringing us something good. And also this way, if we both had the same one, then mine will be first and I win. So so I'm actually hoping to throw you for a loop here. I picked something that I think is very unexpected and it is not crypto related. Oh oh boy, Okay, a little teaser there. I'm I'm excited. All right, let's start with you. I know there's a lot of crazy things in the world these days, but what is the craziest thing you saw in markets this week? Unfortunately, mine is crypto related. Ethan on furniture et h is. This symbol exploded and was up some fifty over the course of two days because it's symbol looks like it might have banned ethereum and it's not ethan. Allen Furniture makes furniture that kind of a it's a good, good business with a rising housing market, but it's certainly not as good as the market described it to credit for this week. And I thought that was one of the craziest things I've seen. I love it. I love a good mistake and ticker. Uh. Anytime Hewlett Packard reports, I check on the price of American pain. The oil fields company with the ticker HP. I love that. It's amazing people just in such a hurry. I guess they hit hit those symbols and and don't even think about it. That's a good one. Art vill Dona Arts said a high bar with that one. I like that one a lot um. I think he beats me. We'll see if he beats you, But as of now, I'm gonna just concede that he's in the lead. But mine's pretty good. I'm curious what you think about it. Art. It's this story we had out from Bloomberg by Crystal Kim and Tom Conciliano, and it's about us back that is being formed to raise money so basically buy another spack. Uh. This is a drug maker called roy Vent Sciences. And forgive me if I'm mispronounced that. Uh, they want to go public with a spack toub merge with another spack and then take over the spack acquired by Immu no Vent, another drug maker that I'm probably mispronouncing. But the point being a spack being formed to basically buy the assets of another spack at a huge premium. All right, this kind of makes my head spin and and it goes to your point about how hot, those spacks square for a hot minute there, and then the world came crashing down on him. But how are you looking at the whole spack space and what do you think about a spack being formed to buy another SPAC. Kind of reminds me of the line that they're on double secret probation from Animal House, right. So it feels as though the reasons SPACs started to become so popular last year and there was a record number of them, they came out because there's so many private companies that were staying private for so long because venture capital money was so cheap. So we had two SPACs that came out in public last year versus sixty the year before, and then we had three in the first quarter of this year. So clearly there's not five great ideas for these guys to go by, and I think that that supply just swamped the demand for the investors. And it doesn't take much of a hint that these things, some of these things aren't gonna work to sort of change the entire attitude towards the group. So again, that was just one of the sectors that lost some of its excess speculative froth in the in the month of May, and it's probably a healthy thing for all of us. I think that that issue of supply of shares in the market is so important. You know, this reminded me almost sort of the dot com I p O Mania on fast forward. You know, just overload the market with with I p o s and new share supply and and it's just you know, it's the market just chokes on it eventually, right, absolutely correct. And then if you went back and looked at the numbers, though, even with the numbers that we saw both in the first quarter of this year and all of last year and SPACs, it doesn't even hold a candle to the number of companies who were coming public. I bet um, all right, Phil Donna, if I could do a drum roll, I would, But but hit us with your craziest thing. Well, we've covered crypto so extensively this week, and obviously so much was happening. I just felt like I needed to take a break from it. But one headline that caught my attention, Uh, it's it's a Bloomberg headline. It says the hottest property on the market comes with an active volcano. So I'm talking about the real estate market here. Uh, and it's an Icelandic family. They own land where a volcano has emerged. Over the last couple of months, they're getting tons of offers from interested buyers. The Bloomberg story actually has this sentence in it says thousands have flocked to see the eruption. Some have evened fate and barbecued hot dogs on the lava. And there's a picture of somebody barbecuing a hot dog on top of this volcano. That is fantastic. That is you did you brought your a game? I I love it. Also, I've I've read that Iceland is a big hot spot no pun, intended for crypto mining because of all that geo thermal thermal energy. So, uh, my guess is that someone's going to buy that property and put a big bitcoin mining brig on top of it. That's that's just my guess. That's a pretty good guess. Who knows, Maybe they'll open a hot dog stand with with freshly grilled volcano hot dogs. But really good contributions from both you. I'm gonna word a two place tie for first place. Uh in the Craziest Things Are Yours was great? L Donna's Yours Yours was good. I clearly need to up my game when I'm around you too. One thing I do want to say is I've been very remiss about giving out the Bloomberg Podcast hotline. So if you have a crazy thing you want to share with us, give us a call, leave us a voicemail, and maybe we'll play it on the show. That number is six four six three to four three four nine. Oh, and that should do it for this week. Bildna hi Art Hogan so happy to have both you on the show. Really enjoyed it and hopefully we can do it again someday. Thank you so much. It's been fun. What goes up. We'll be back next week. Until then, you can find us on the Bloomberg Terminal, website and apt where wherever you get your podcasts. We'd love it if you took the time to rate and review the show on Apple Podcasts so more listeners can find us. And you can find us on Twitter. Follow me at reag Anonymous. Bildonna Hirich is at Bildonna hi Rich. You can also follow Bloomberg Podcasts at podcasts and thank you to Charlie Pellett of Bloomberg Radio and the voice of the New York City subway system. What Goes Up is produced by TO for Foreheads ahead of Bloomberg Podcasts is Francesco Levie. Thanks for listening, See you next time.

Hello, and welcome to What Goes Up, a weekly markets podcast. I'm Mike Reagan, a senior editor at Bloomberg and this week on the show. For several years, cryptocurrencies were considered fringe investments on Wall Street, but this week a massive intro day plunge in bitcoin had some serious ripple effects on the stock market. Is this type of contagion the new abnormal for markets? We'll get into it with a veteran market strategists, and we'll also get his take on what type of stocks look attractive these days in this strange new world of risk taking that we're in. But first, Charlie Pellett tell us who this week's mystery co host is. This week's mystery co host is Vill Donna Hi Rich. Vill Donna is a cross asset reporter for Bloomberg in New York, and she owns a rescue from Kuwait. Her hobbies include running marathons, watching videos about grammar on, looking for typos, hint stories that Mike Reagan has already edited. That's all true, Vildna, correct. You know to me? My favorite fun Vildona fact is the cat from Kuwait. I need to hear that story. How did you rescue a cat from Kuwait. Oh, it's a state secret. I can't tell you. She is a rescue from Kuwait. We actually worked with small organization and there's a woman who works for one of the bigger airlines and she does a lot of US to Mid East trips and she puts them on the plane basically and and brings them in. And that's how my sister got her cat. That's how I got my cat. So that's pretty good. Katie Greifeld had a cat delivered the plane in some mysterious circumstances. Cat. You cut. People are weird. I don't know. That's not how we get dogs. No one would. No one would allow my dog on a plane. I guess is part of the thing. But we love them so much, I guess, so, I guess. So that's it. But the Donna. I'm very excited for this week's guest. Um. As you know, I've been doing this job a few years. Our guest has been doing it for his job for a few years, and we've never actually met. So I thank you for putting us all together this week. I will warn you, though, the Donna, our guest is from Boston, and there's He's got a great reputation as a nice guy. But there's always a risk with people from Boston at this time of year, and that's all they really want to talk about is the Red Sox. So I think we'll allow that. I don't know if some of our New York based listeners will will care for that, but I'll allow a little Red Sox talk. I'm from Philly. I it doesn't bother me that much. But I need you if he starts talking about the Celtics, I need you to cut him off, no problem, alright, if you hear the names Kemba Walker or Jayson Tatum, just hit that mute button on him instantly, right, I'll let him talk about talk O Fall. I like that guy. That's my favorite. That's my favorite Celtic Taco. Fall is the only person I've ever seen dunk cat basketball without leaving his feet. So that's made him one of my favorite players of all time. Well, let's bring him into the show here. He is the chief market strategist at National Securities. His name is Art Hogan. Art. Welcome to the show. Thanks so much for having me. It's a really a pleasure, Art, And you know what I do want to get into that idea of the cryptocurrency contagion. But I was reading near bio Vildnosan over your bio, and one thing jumped out at me that I find really interesting, and that's you started off your career on the floor of the Boston Stock Market, um, Boston Stock Exchange rather. And I find that interesting because when I started up Bloomberg UM just years ago. Uh, it was right when the computerization of markets was was in full swing and all these regional exchanges were kind of getting swallowed up by by the bigger players. I think it was Nastac that that bought Boston. But I has been curious. I never quite wrapped my head around sort of what the distinction was between these regional exchanges. I mean, obviously different type of clam chowder served in Boston then uh New York Exchange. But I'm curious, like, what was the scene like at the Boston Stock Exchange on picturing Maybe is it the type of thing where New England companies would would perhaps have a little bit more liquidity on an exchange like that? What was what was the purpose of of these regional exchanges like Boston and kind of what was it like working there. Yeah, that's such a great question, and you're your concept of hto regional exchanges is a very popular misconception, right. So the regional exchanges were trading just about everything that was traded on the New York Stocker Change and at the time the American Stock Exchange, and what they really were was a national market system. So there was seven regional exchanges too on the West coast, one in Los Angeles, one in San Francisco, There's one in Chicago, the Midwest Stock Exchange, which was the largest, Philadelphia had its own exchange, and Boston had one of exchanges. So they were well over a hundred years old by the time I got there, and they were really competition for the New York Stock Exchange. So think about it like this, The New York Stock Exchange would do about eighty percent of the listed volume and the regionals would do That's interesting, And would it be the type of thing where you know, say a firm like Fidelity would would do more trading on Boston than would New York, you know, a Boston area firm. That was certainly the case, at least for me. I worked for Fidelity, so I was actually a Fidelity employee and a floor broker on the exchange. And just to give you a sense of the time that I was there, I was there for the October crash seven, where the market went down twenty two point six percent in a day. To put some context around that, that would be about seventy points for the DAW to go down on a given day like today. So it was a you know, so pretty crazy times, and electronic trading really was at its infancy, so we were actually writing tickets and ripping things up and then there was a mess on the floor and that October uh Monday of seven, we were up to our knees in paper because it was just the craziest day anybody had ever seen. Or let's let's get into that idea of crypto speaking of crazy things. Um, you know, first of all, my nuts to think that that plunging bitcoin did have some contagion in the stock market. I'm and I'm talking beyond sort of the the names that are exposed to to crypto, like Tesla and UH micro Strategy and those type of stocks. It felt to me like it dragged the whole market down. Is is that your sense to well, it's interesting that's there's a lot of people that are really coming across that concept and saying, hey, you know, we've we're seeing cryptocurrencies down some thirty in a single day in the markets down to there must be some correlation. So the obvious correlations are the things you just mentioned that things that are directly tied and correlated to cryptocurrencies. But I think in a real sense, I step back and say what's happened in the second quarter, and I would say that we've removed a lot of speculative excesses in different esset classes. So for example, spacts, which were all the rage in the first quarter, have really fallen upon hard times in the second quarter. Right, we had a record number of SPACs last year, and in the first quarter we beat that record, and all of a sudden, supply had really swamped demand. So a lot of those spacts that came out and came public have pulled back significantly. We saw the same thing in electronic vehicle related stocks. We've certainly seen that over the last three days in crypto So I think it's much more they risk off and remove some speculative excesses and less of a correlation where people are looking at this and saying if people are selling bitcoin, they must be selling the SMP five funder. Well, Art, can I actually ask you to sort of help define what is going on with with markets right now? Because when we think back to last year, it was really easy to see who was leading markets. It was tech up until November right when you had some of the vaccine announcements, and then even after that you sort of had some clear and delineated market leadership. And I feel like over the last couple of weeks the narrative has been really difficult to define, to say the least, besides everything else that's sort of going on on a day to day basis. But so, can you help us make sense of of how we even describe what is going on with markets? I think if we back that lends up a little bit and say what happened in that's not happening in twenty one is a pretty good way to give a snapshot of what we've seen this year so far. So was all about what it was that was helping us get through a pandemic, everything that helped us work from home, like the Zoom app that we're on right now, like the all the the information technology that made our lives easier and possible. The work from home crowd that that the pandemic darlings were the rage, and they were until about Labor Day, and around Labor Day and and and things really getting stretched. The relative strength index for the maastic and positive nastic one had gotten to significantly overbought, and we saw a significant rotation. We saw a pretty good draw down in the nastac the better part of nine after Labor Day, and a rotation into aconomically sensitive cycnicals which had largely been ignored. And that was really the beginning of that reopening trade. So people decided that we need to start selling those things that have been working and got into you know, excessive valuations towards the end of the year, and and that proceeded to continue that rotation all the way into the first quarter of this year. So we came into the first quarter of this year and that rotation was pretty strong. You saw pretty good ramp up and economically sensitive cycnicals, everything from industrials to financials and energy, which is the best performing sector in the SP five hundred right now. And and the money was coming from the selling of technology, for example, but a lot of the other pandemic darlings. So I think that that sort of set the table for both of those trades to get stretched in the first quarter. And what we've seen since the second quarter began is that back and forth rotation based on how far we oversold technology and how far we've over bought some of the cyclicals. I think the the the pandemic darlings got oversold and I think that some of the cycnicles have been over bought. So we keep going back and forth on a week by week basis where that rotation reverses itself, and I think that's where we're going to be for most of the summer, you know, just to get back a little bit to that relationship between crypto and the equity markets. To me, I've always thought of it as crypto as kind of um almost like a safety valve for this sort of over excessive risk taking and sort of exuberant sentiment out there, especially with all the liquidity we have UH in the markets right now, and and how that you know, it's a nice little safety valve for for the stock market. You know it perhaps you know, can can siphon off some of that froth that otherwise would have you know, been pumped directly into the stock market, you know, as the case was perhaps in the dot com era, where all the all the speculation, uh, and all that euphoria was focused you right on on the equities and and all the I p O s coming out. But I do wonder, you know, when we look at and not just bitcoin. I mean, obviously ethereum is is the hot topic these days. Uh, and bitcoin and ethereum also being you know, sort of the blue chips of the crypto world right now. But when you go get further down the ladder to say doge coin or or some of these ridiculous meme coins the names of which I can't even say on a on a family podcast like this, and you watch this this paper wealth be vaporized. Uh, it's the tune of hundreds of billions of dollars in a matter of hours. Ultimately, I I find that to be a risky, dangerous thing. But I'm curious how you sort of think of that interplay between you know, the animal spirits uh and the euphoria chasing to get rich quick type of trades and crypto. Um, it's not ultimately a healthy thing for the stock market. Or put that sort of ricocheted back and and and be a bad thing. Well, I think that's an interesting way to set that up, Mike, and I think that when you sort of harken back to we had hundreds of companies that put dot com at the end of their title went public, and you know, often times we're up a hundred percent on the first day of trading and low and beholds. As two thousand turned to two thousand and one, a lot of those companies disappeared. Now we have hundreds of cryptocurrencies that have exploded in value, And to your point, is that a safety valve of of speculative money finding a place other than the stock market? For sure? I think that's that's certainly the case. I think the way to think about crypto in general is the backbone of crypto obviously is blockchain, and blockchain is likely to be a more important um paradigm for us in the future, very much like the Internet is much more important to us than it was in We just don't know who the winners and losers are going to be, and I think it's going to play out in a similar fashion. So we're not gonna have hundreds of cryptocurrencies will likely have some winners. I think the basic foundation to that is the technology behind it that will help us transact business in a more efficient and a more efficient way. But in terms of investors, that just your garden variety investor. You have to know this is speculus, and I think that the volatility is a feature. It's not it's it's not a bug, it's a feature. And we've seen since they started Bitcoin it's had at least half a dozen draw downs um and we just went through another one. So to to think about this as a stabile asset classes is the wrong way to think about it. And if you're going to invest in this, you want to think about something small and money that you would only put in a specultive bucket, something like a zero to five. And so a lot of times when people are talking about cryptocurrencies and and some of the volatility that we see there, they'll tie it back to retail investors either rushing in or getting burned, depending on what's going on. But so, how would you how are you and your team thinking about the involvement of the retail investor. Obviously it's been a really big topic for the path year, but then you sort of see conflicting data points where you might see inflows, for instance, into some retail favorite e t f s, but at the same time you're seeing waning call option volumes. So how are you guys thinking about the involvement of the retail investor. Yeah, so the involvement of retail investor in crypto is something we sort of have to keep it at arm's length. We will partner with somebody that runs a fund, but then that fund is going to charge fees, so it's probably not the most efficient way to do this, you know, in terms of overall advice, we know, make sure people know that it's not for the faint of heart or what is an orphans and it should be treated as a speculative asset class. So I think in the future, you know, when an e t F is approved, there'll probably be a lot more retail involvement, but again it should be sized to what you would size any speculative investment towards. And I think that when we think about that, we get questions about it all the time, But I think that what is healthy into Mike's point is the kind of volatility that we've seen this week is a reminder to everybody that it's not gonna always just go up, and nothing's guaranteed here, and it's likely something you want to be pretty conscious about as you tiptoe into it as an investment. I tend to think of it as a lottery ticket money, you know, stuff, You're an amount You're not, uh gonna feel a lot of pain if if, if you lose on some some losing tickets. But I wanted to talk a little bit about this perennial debate between growth and value, UH and in this case the real cyclical parts of the market as the reopening of the economies gets stronger and stronger. I think you've got a pretty interesting approach. You're almost sort of, you know, the neutral Switzerland in this debate, UH, recommending a kind of a barbell approached where you have growth on one side of the barbell and more cyclical stock exposure on on the other side. Unpack that for us a little bit. Uh So, what kind of sectors, what kind of names are you looking at on both ends of that barbell. Yeah, so our approach really is barbell approach that has growth on one side and cyclicality on the other, and we want you to have that approach because we don't think it's going to be a binary investment climate ever, right, So we don't think it's only going to be growth and not value and and and when we think about value, we think about cyclicality, especially in a reopening economy. So if you have balance where you say, okay, what are the three themes I can really get my head wrapped around in growth and then we've thrown out cloud computing, cloud security, and five G is thematics that we like and and and express those opinions UM that manifest exposure to those themes. And then on the other side of that, look at what's gonna work in cyclicality. So we've we've selected materials, industrials and financials. A lot of our investors have swapped out materials for energy and and happily UM. But what you have to do, though, is really important, is every two months to keep that barbell balanced, you have to sell the winners and buy some of your losers. So in February was one of the first times in three rotations where we actually had to sell some over cyclicality and put more money into the growth and and and that level the bar backout so you have equal exposure of exposure. And if you had done that for all of you would have outperformed the SP five foundered by almost five funder basis points, but four three basis points. And we think the same thing is gonna be true this year. And I think that helps you navigate these rotational markets where we have where growth is back, people are buying the growth names again, or wait a minute, they're back to cyclicality where you know, jumping into the financials. The industrials are doing great, and that gives you some balance. And if you set that timer so you know that you have to rebalance on a two month basis, you don't have to make that emotional decision to say I really don't want to sell my winners and buy some of my losers, and forces your hand and keeps you in a diversified portfolio. And of course, the other perennial, the new perennial debate is inflation, of course, and I know in your recent notes you've written about some of your thoughts they're saying inflationary pressures will be more temporary. So I'm hoping you can sort of bring that into a conversation and how you're you're thinking about inflationary pressures and is it your view that even if we do see some inflation, stocks can still continue to do well. So one of the concerns that you have is is is about inflation? Is margin pressure? Right? Do you get margin pressure if your input costs start rising but you're not able to pass that increased costs of of good sold onto the consumer. And through the first quarter earning season, we've already heard from some of those companies that have said clearly stated we need to raise prices. Some of the inflationary pressures we think are going to be temporary, because there's an old saying that nothing fixes high prices like high prices and you get a supply response. So we're starting to see that a bit as capacity utilization has gone up and sawmills, so number prices have come down about over the course of a week. I think that's healthy. I think the same thing will be true and energy prices as more production comes online, whether that comes from Iran sanctions coming off or OPEC plus increasing output quotas, which they're doing in North America going from eleven million barrels a day to thirteen million barrels a day. I think that'll that supply response helps push down on some of those inflationary pressures. So that's why we think that some of it's going to be temporary. I think the FED feels that way as well, and they're willing to be asymmetric on their inflation target. Their target has been that their target of two pc hasn't been met in ten years. They're willing to let inflation run a bit hotter unless an until we get to substantial economic progress towards full employment. So I think that a combination of a FED that's going to be patient with a little hotter inflation, which we've seen some reports of, and just the economics of supply and demand seeing a supply response come back into the marketplace. So right now we're in a world where aggregate demand is outstripping aggregate supply. I think the supply response gets us to a place where a lot of that gets neutralized. And it's not gonna happen right away. We'll probably have inflation running hot throughout the balance of this year, but I don't think it gets hot or I think at plateaus, and I think as we entered the first quarter next year, prices started to come in, you know, or I know you have a year end target for the SMP of about if I'm not mistaken, Um, that's not too far from where we are now. You know, I'm looking at my screen. It's probably about three and change away. UM, So I'm curious how you're thinking about that. You know, is that the potential that that maybe you'll even raise that or is it a matter of you know a lot of people are sort of racing for the FED too, starts thinking about talking about talking about thinking about maybe even whispering and rumors about that dirty word tapering, and a lot of people looking at even possibly as early as the Jackson Hole meeting in August. Is that kind of embedded in that forecast a little bit of uh, you know, a hint that the punch bowl will be drained next year? Uh in that forecast? Or or how are you viewing that at this point? We put the target out at the beginning of the year. It's about a fifteen percent upside from that point in time. So to your point, we've already captured about ten or eleven percent of that. UM. It's predicated on a multiple, uh, the current multiple for the SP five hundred, but based on a hundred and eighties six dollar earnings estimate for the SP five hunded, well, that number has gone up already, right, So the one that we're factoring that against worked its way higher after the first quarter earnings reporting season, so we'd have to make an adjustment on that. On a standstille basis, the estimates for the second quarter in the second half are now higher than than they were when we started this. So I think that when you think about what happens when the FEDS starts inching towards tapering and getting that message out there, I think they're going to be deliberately cautious about bleeding it into the marketplace, so we don't have that surprise taper that we had in two dozen and thirteen that caused a much more abrupt sell off. But it's certainly gonna slow things down, and I certainly think that as they start talking about it, more and more people will describe a lower multiple to the earnings power of of equities and that will likely temper some of the upside. And I think your timing is probably right. If you start thinking about Jackson Hole being at the end of the summer, and that's been a time frame when central bankers have have signaled changes in policy and policy paradigms. That's when quantitative easing was first introduced. So this maybe the time that they start talking about talking about tapering and and likely don't take action on it until the fourth quarter of this year. I think that's going to give the market plenty of notice. And at the very same time, I think second quarter earnings are still conservative and second half earnings they're still conservative because I just don't think we've come close to realizing the explosion of economic activity we're going to see as people get back to their normal lives. So with the FED, with the FED minutes coming out this week, and the FED hinting at the T word talk king about thinking about talking about tapering, if somebody were to ask you about this, how would you recommend investors actually start to prepare for that or position for that. Yeah, that's such a great question. So some of the things we think about in terms of investing to to hedge against inflation have a lot to do with what our Barbell approach looks like. So the Fed's going to be tapering because the economy is recovering, so all of the economically sensitive cyclic ales that we look at will do better, right, and a and a improving economy that is forcing the FED to start reducing their monthly purchases of fixed income assets, so that side of the barbell actually will outperform likely things like industrial materials, um, financials, energy, and that will likely heads you a bit. But at the very same time, if you if you, if you were all in on just cyclicality, you're gonna miss what it's going to be in a pretty explosive growth in things like five G and cloud computing, cloud security, and the themes that will continue to be evergreen in terms of technology revenue and earnings growth. Art We're gonna get to the craziest thing soon, and I have high hopes for vill Donni here. She is actually uh what I call our chief Crazy Things correspondent. Um, so no pressure of Bill Donna, but the hopes are high for for your crazy thing. Um what are Before we get to that, A lot of the guests we have on our very macro focused and and very hesitant to drop the names of some stocks they like, I've got to feel and you'll be able to hit us with a few names on either side of that barbell that are looking attractive to right now. Are there any stocks that, uh, you can kind of talk about as as good byes in your mind right now? Yeah, a couple of the names that we think about on the on the growth side and how do you express an opinion and things like five G or cloud security. We've got Palo Altode Networks on our on our focus list, We've got Apple Computer on our focused list once a Cloud Security ones clearly a five G play. On our National Dividend list, we have Verizon, which is clearly a five G beneficiary. So those are some of the cyclical names. We have Lamb Research also on that list. So I think those are some of the names that when you think about the growth side, that actually have earnings. And that's the difference about playing some of these themes because as interest rates start to go up, that long duration technology play that really rapid revenue growth, but earnings that are far out in the future are going to be discounted back at a much higher multiple, right, So you're gonna instead of being willing to pay thirty times for that kind of revenue growth, You're you're likely going to pay fifteen or twenty times. So we like those companies that are measured with a price to earnings ratio, and we certainly like, you know, the thematics that were locked into those some of the concepts around that. Over on the on the UH, the side that we we sort of consider the economically sensitive cyclical side. JP Morgan is one of the names that certainly feels like as a as a financial is going to do very well. I think that we think that Visa falls into that category as well in terms of financials. And then when we think about some of the industrial when we when we look at um industrials and materials, we certainly think that Caterpillar is a great way to think about that, and and UH and and and sort of play that. Now, those are individual names. A lot of our folks that are using the Barbell approach, we'll just use the e t F. They'll use the cloud Security et F and pick their favorite one. They use the five G t F and and that's another way to approach it. So it's it's it doesn't have to be picking single stocks as long as you're expressing the opinion that it's giving you exposure to the right themes and growth and at the same time the right themes that you want to be expressing opinions. And on the on the cyclical side, you know, five G to me, seems like an area that's got a kind of a long runway for say a buying whole type of investor um as opposed on the other side of the barbel some of these cyclicals, I feel like there's an expiration date on their outperformance. Is that is that tribe with what you're thinking, Yeah, that's probably true, right, So when you think about real long duration and thematics five she certainly plays into that. We're just scratching the surface of what that's gonna look like. So it's you know, it's probably out in front of us for years, as is cloud security. I mean, we just had another cyber attack and it's the second major one that we've had this year. So cloud security is always going to continue to be you know, important to us. But we don't know how high interest rates goes. So the financials likely you know, in an approving economy, both have more demand for the goods and services, but likely we'll have a lot more natatures margin. So I think that you know, just rising industrates help the financials just by turning the lights on. So I think there's a there's there's there's some runway on both sides of that. But that's very true. But I haven't forbid if we were able to get an infrastructure bill passed, some of the other industrial materials you know clearly are going to be beneficiaries of that. And again that's a six year plan, right, So to me, I think, you know, there's longevity and a lot of this, but you know it's it's I think one of the ways to protect yourself from any of these things getting too frothy is is is just that every two months you have to recalibrate that and if any of this has gotten ahead of itself, you're rebouncing into what hasn't been working. That's a great point about the infrastructure plan that that would provide a much longer runway for those names. Great stuff art um. Let us now go till Bildonna's favorite segment, The Craziest Things We Saw in Markets this Week stand clearer of the craziest things we saw in markets this week. I'm gonna save yours for last, Phildanna, because I have a feeling you're you're bringing us something good. And also this way, if we both had the same one, then mine will be first and I win. So so I'm actually hoping to throw you for a loop here. I picked something that I think is very unexpected and it is not crypto related. Oh oh boy, Okay, a little teaser there. I'm I'm excited. All right, let's start with you. I know there's a lot of crazy things in the world these days, but what is the craziest thing you saw in markets this week? Unfortunately, mine is crypto related. Ethan on furniture et h is. This symbol exploded and was up some fifty over the course of two days because it's symbol looks like it might have banned ethereum and it's not ethan. Allen Furniture makes furniture that kind of a it's a good, good business with a rising housing market, but it's certainly not as good as the market described it to credit for this week. And I thought that was one of the craziest things I've seen. I love it. I love a good mistake and ticker. Uh. Anytime Hewlett Packard reports, I check on the price of American pain. The oil fields company with the ticker HP. I love that. It's amazing people just in such a hurry. I guess they hit hit those symbols and and don't even think about it. That's a good one. Art vill Dona Arts said a high bar with that one. I like that one a lot um. I think he beats me. We'll see if he beats you, But as of now, I'm gonna just concede that he's in the lead. But mine's pretty good. I'm curious what you think about it. Art. It's this story we had out from Bloomberg by Crystal Kim and Tom Conciliano, and it's about us back that is being formed to raise money so basically buy another spack. Uh. This is a drug maker called roy Vent Sciences. And forgive me if I'm mispronounced that. Uh, they want to go public with a spack toub merge with another spack and then take over the spack acquired by Immu no Vent, another drug maker that I'm probably mispronouncing. But the point being a spack being formed to basically buy the assets of another spack at a huge premium. All right, this kind of makes my head spin and and it goes to your point about how hot, those spacks square for a hot minute there, and then the world came crashing down on him. But how are you looking at the whole spack space and what do you think about a spack being formed to buy another SPAC. Kind of reminds me of the line that they're on double secret probation from Animal House, right. So it feels as though the reasons SPACs started to become so popular last year and there was a record number of them, they came out because there's so many private companies that were staying private for so long because venture capital money was so cheap. So we had two SPACs that came out in public last year versus sixty the year before, and then we had three in the first quarter of this year. So clearly there's not five great ideas for these guys to go by, and I think that that supply just swamped the demand for the investors. And it doesn't take much of a hint that these things, some of these things aren't gonna work to sort of change the entire attitude towards the group. So again, that was just one of the sectors that lost some of its excess speculative froth in the in the month of May, and it's probably a healthy thing for all of us. I think that that issue of supply of shares in the market is so important. You know, this reminded me almost sort of the dot com I p O Mania on fast forward. You know, just overload the market with with I p o s and new share supply and and it's just you know, it's the market just chokes on it eventually, right, absolutely correct. And then if you went back and looked at the numbers, though, even with the numbers that we saw both in the first quarter of this year and all of last year and SPACs, it doesn't even hold a candle to the number of companies who were coming public. I bet um, all right, Phil Donna, if I could do a drum roll, I would, But but hit us with your craziest thing. Well, we've covered crypto so extensively this week, and obviously so much was happening. I just felt like I needed to take a break from it. But one headline that caught my attention, Uh, it's it's a Bloomberg headline. It says the hottest property on the market comes with an active volcano. So I'm talking about the real estate market here. Uh, and it's an Icelandic family. They own land where a volcano has emerged. Over the last couple of months, they're getting tons of offers from interested buyers. The Bloomberg story actually has this sentence in it says thousands have flocked to see the eruption. Some have evened fate and barbecued hot dogs on the lava. And there's a picture of somebody barbecuing a hot dog on top of this volcano. That is fantastic. That is you did you brought your a game? I I love it. Also, I've I've read that Iceland is a big hot spot no pun, intended for crypto mining because of all that geo thermal thermal energy. So, uh, my guess is that someone's going to buy that property and put a big bitcoin mining brig on top of it. That's that's just my guess. That's a pretty good guess. Who knows, Maybe they'll open a hot dog stand with with freshly grilled volcano hot dogs. But really good contributions from both you. I'm gonna word a two place tie for first place. Uh in the Craziest Things Are Yours was great? L Donna's Yours Yours was good. I clearly need to up my game when I'm around you too. One thing I do want to say is I've been very remiss about giving out the Bloomberg Podcast hotline. So if you have a crazy thing you want to share with us, give us a call, leave us a voicemail, and maybe we'll play it on the show. That number is six four six three to four three four nine. Oh, and that should do it for this week. Bildna hi Art Hogan so happy to have both you on the show. Really enjoyed it and hopefully we can do it again someday. Thank you so much. It's been fun. What goes up. We'll be back next week. Until then, you can find us on the Bloomberg Terminal, website and apt where wherever you get your podcasts. We'd love it if you took the time to rate and review the show on Apple Podcasts so more listeners can find us. And you can find us on Twitter. Follow me at reag Anonymous. Bildonna Hirich is at Bildonna hi Rich. You can also follow Bloomberg Podcasts at podcasts and thank you to Charlie Pellett of Bloomberg Radio and the voice of the New York City subway system. What Goes Up is produced by TO for Foreheads ahead of Bloomberg Podcasts is Francesco Levie. Thanks for listening, See you next time.