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[00:00:37] Joseph Gradante: Welcome, ladies and gentlemen, to another episode of Orwellian Optics by Allio Capital. I'm one of your co hosts, Chief Executive Officer Joseph Redonte, and I'm here with my co hosts, A. J. Giannone and Tyler. What's up, guys?

[00:00:50] AJ Giannone: hey Joseph. It's great to be here again. My name's A. J. Giannone, Chief Investment Officer of Alio Capital. a lot happening in the markets. Obviously we got the inauguration on deck [00:01:00] as well and a few things, some key reports were released in the last week on the macroeconomic side that I think are going to be really interesting discussion points and excited to to debate them with you guys.

[00:01:09] AJ Giannone: A lot going on for sure.

[00:01:12] Joseph Gradante: Tyler, how you feeling?

[00:01:12] Tyler Goering: Excited. A lot of stuff to dig into today, so yeah, let's get started.

[00:01:17] Joseph Gradante: Yeah, so,kicking it off here, right, the elephant in the room, let's address that, the inauguration speech,Trump, didn't disappoint, right? I mean, the guy, he went into that room and he just gave it to them, you know, straight up, like, hey, this is what's been happening. The people have been ripped off and we are going to change course and there's going to be this new, golden age of America, right?

[00:01:38] Joseph Gradante: a renaissance, if you will. a couple of things that are a little out there that I thought, he should have maybe waited later to unveil like the external revenue service. But other than that, his authenticity is what gives him credibility with the people. And you can just see if you watch it, the political class, right?

[00:01:54] Joseph Gradante: And how they don't care about being responsive to the people. And, Yeah,with that, a little [00:02:00] footnote there, I don't want to go too much into a tangent there. What did you guys think before we kind of dissect this?

[00:02:07] AJ Giannone: I'll let I'll let you lead it off Tyler and then I'll close it up. I got a few a few hammer points to, to nail home.

[00:02:12] Tyler Goering: Sure. I thought it was,very, very much what I expected, let's put it that way. you know, he definitely, stuck on the big things that got him elected immigration, wanting to, to reform the border. you know, definitely took some shots at, our foreign policy over the last four years. Very much the same things that he campaigned on. I felt like he really stuck to the script with his inauguration speech. couple of things that might be market movers in there. He did mention, electric vehicles and ending mandates for those. And then also there was a piece where he touched on energy independence.

[00:02:43] Tyler Goering: So those are things to maybe look out for, but, all in all, it was definitely,definitely par for the course or at least what I, the direction that I thought it would go in. The one thing that I will say, though, is more than any speech, I would, definitely look towards what he did after the speech.

[00:02:57] Tyler Goering: I think there was definitely, Executive orders signed, [00:03:00] yesterday. speeches are one thing, but, following up on some of these campaign promises, especially, you know, on day one, think shows that he's committed to his agenda that, maybe his, his, his. Agenda this time around is a little more crystallized, a little more clear than it was the first time around.

[00:03:15] Tyler Goering: I think he knows what he wants to accomplish and, he definitely has, some promises to keep to voters. So I thought that was, maybe even more of the important part than the speech itself, but those were my takeaways. Curious to see what you guys think.

[00:03:29] AJ Giannone: Yeah, I mean, to me, the, key point was exactly what you hit on. It was tying the rhetoric and the campaign trail speeches and all the promises to concrete action. And I think that's definitely been missing over the last four years is, what can we do as a country to reverse the course that we're on?

[00:03:46] AJ Giannone: we're up against a geopolitical adversary, whether you like it or not. We are the only company in China that is really determined and really motivated to deliver us a competition on the world stage [00:04:00] in, both an economic and a military sense. for me that's what keeps me up at night as an investment strategist, as a portfolio manager, as a chief investment officer.

[00:04:08] AJ Giannone: is looking out for those those black swans. And in this case, it gives me a great deal of confidence to see Trump go in on day one with the experience that he was able to draw from the prior four year term, being able to link the the rhetoric and the campaign promises to concrete action immediately on day one.

[00:04:26] AJ Giannone: And it gives me a great deal of confidence for his ability to at least push the ball in the right direction going forward, over the next few weeks and months. and to me that, the leaving the Paris climate accord,promoting energy and independence, opening up some more drilling opportunities, there are people who will vilify these actions.

[00:04:44] AJ Giannone: But I think. When you weigh all the evidence on all sides, this is going to give America a massive competitive advantage on the world stage if we're already effectively the world's number one energy producer. But if we can really lean into that advantage and [00:05:00] supercharge that exploration and production and refining and transportation infrastructure and, sector of the economy to the point where not only are we the world's number one producer, we're the world's number one producer by a country mile with a definitive cost advantage and the geopolitical advantage of having, oceans on both sides with an ability to produce energy for ourselves, be energy independent, allow that energy independence to flow through to all the other areas of production in the value chain process and allow us to produce.

[00:05:32] AJ Giannone: more goods at home, in America at a lower cost and really address both, the cost of living crisis, as well as, some of the competition on the world stage for our large corporations and our companies to be able to compete internationally in some of these markets where, it's been cost prohibitive for a lot of reasons.

[00:05:50] AJ Giannone: So,

[00:05:50] Joseph Gradante: I think you teed it up perfectly by bringing up China and,I brought it up a few weeks ago and I mentioned Taiwan and. if you look at [00:06:00] history, so important to navigating capital market. It's like everything that we're seeing right now has played out before on world stages.

[00:06:06] Joseph Gradante: Stay And, when you look at the debt to GDP ratio and you look at how it's affected other empires, there's this external conflict that we have with China, right? And then there's this internal conflict. And for me, the only way the internal conflict is going to unite is if they have a common enemy.

[00:06:29] Joseph Gradante: This is what happened in World War II. We were victorious in World War II, we rallied together, we rallied production, and that's why we came out. A lot of the other dominant powers at that time, they were crippled, fighting Germany. I am optimistic that it won't come to war this time, because I'd like to think that,we don't want mutually assured destruction, but I do think, Trump is laying the foundation here for, a game of chess, and I just, you My hope is that the political establishment will catch up and stop playing checkers, because what [00:07:00] happened, if you really understand globalization, it goes back to the turn of the century, when, a lot of the Robert Barons coming out of the Gilded Age, and John D.

[00:07:09] Joseph Gradante: Rockefeller had his son, John D. Rockefeller II. He went to Korea. He went to, Africa. And essentially, they were looking for cheap labor because there were no workers rights in the U. S. at that time. And workers started to demand better conditions. They started to form unions. they needed workers to produce.

[00:07:29] Joseph Gradante: and they came up with this whole bogus argument that, hey, if, if we could integrate with other nations, it would reduce the propensity for war and conflict, and it would raise the standard of living for everyone around the world. But in a representative democracy, in a republic, the job of the government is to represent their citizens and their interests because Now you see what's happened, right?

[00:07:50] Joseph Gradante: The people at the top essentially sold out the workers in search of cheaper labor in China, and China used this to exploit and take advantage of us and our division [00:08:00] internally, right? It's created this power, right? And, we are responsible for producing all their wealth, and we still have the competitive advantage over them.

[00:08:11] Joseph Gradante: In so many ways that if we have this battle now, in the game of innovation, in the game of intellectual property, in the game of military, I think we win, but we have to unite eternally. But to me, this is the black swan that, The Trump administration is going to face. And this is the whole reason why he's talking about the Panama command.

[00:08:32] Joseph Gradante: The media is like, why is he talking about the Panama command, the Gulf of America and, Greenland? Well, these are all strategic tactical military assets, that China is exploiting. And so Trump wants to assert our might to Set the, the world stage and let everyone put everyone to notice that America is back but I think, the interesting thing about that speech was just looking at the political class because you saw the Republicans and Democrats.

[00:08:58] Joseph Gradante: I, I paid a lot of attention to [00:09:00] George Bush and his, and his wife, their reaction, their facial expressions. I always do that because I like to read body language. And, you know, if you understand the Bushes and their history and,and their relationship with a lot of the bankers and, Prescott Bush, right?

[00:09:13] Joseph Gradante: He was a banker. He worked for Brown Brothers Harriman. He was a senator. they were big players in setting up this globalist paradigm and Bush Sr. was the ambassador to China. And Nixon, right? He went to China and the whole thing was about, setting up cheap. This is the relationship between, government and business, taking us off the gold standard, right?

[00:09:34] Joseph Gradante: again, government serving the interests of big business, the Federal Reserve. so now here's this guy who comes along, who's a clear nationalist and he's pro business, but he's also pro worker. And just like the Democrats and Republicans need to figure out that they need each other, that, the workers and innovators need each other.

[00:09:53] Joseph Gradante: we need innovation. That is the key, to production. But then we have to do it here, and pay [00:10:00] those. Sometimes higher cost because it gives us the competitive advantage and it's in the interest of national security because, China is not in the, business of wanting to,keep propping up, the U.

[00:10:15] Joseph Gradante: S. It's just a matter of, waiting until they essentially have all the chips on their side and then, they would, particularly if Japan has been selling, some of their, the U. S. debt. And so particularly if they start selling, the U.

[00:10:30] Joseph Gradante: S. debt that they hold,Japan, China, and they, Move away from the dollar as the reserve currency and kind of we're trending in that direction We're still a long way from there But this is our chance I think to unite internally and I think you know Taiwan thing is going to be where China is going to try to flex its muscle being that they're back into a corner And so this is the black cloud that potentially looms over the administration

[00:10:56] AJ Giannone: Yeah. And that, that part for me is the part where You know, I [00:11:00] think the most risk, at least right now, to, to most people's portfolios would be, you can talk about business cycles and credit cycles all you want, but,the real destructive capability of, a major incident or a conflict with China would be profound, both from a, investor perspective and from, the perspective of even, an economy being able to generate money.

[00:11:23] AJ Giannone: You go back to World War II, where an economy was really mobilized in pursuit of a common goal and a common enemy. And,the only reason that we were able to even provide the kind of warfare technology and infrastructure to our troops that we were able to do was because we were a production based economy.

[00:11:44] AJ Giannone: We are not that now. And you've seen this with some of the issues around supplying Ukraine. Like we're running out of basic materials, like rounds for, cannons, like bullets for guns, like all the basic components you need to protect yourself, to provide for the common defense, which is one of the core elements [00:12:00] of what, America and its government should be providing for its people, we're unable to do because we've offshored and sold away all of that industrial base.

[00:12:08] AJ Giannone: to me, I think the encouraging part of this is, the rhetoric matches the actions. I think Trump is incredibly cognizant and aware of the risks that are facing us, and he's being a little bit of a realist and a little bit more transparent than I think we've seen from, any of the maybe Prior five or six administrations in that regard, to your point, Joseph, it's been, the strategy of the United States to pursue some sort of democratic, integration with the world at large and to, assume that's going to preclude some sort of armed conflict.

[00:12:43] AJ Giannone: But I don't think that's a realistic assessment and a really honest read of history. So I think, you know, if you take the approach that, war is a real risk and it would be incredibly destructive. To, American prosperity, then your only logical course of action, which I'm [00:13:00] frankly encouraged that Trump is following is to, make us so incredibly and robustly defended and enforced that it wouldn't make any logical sense for anybody to take a shot at us, which I think is, the best, most reliable way to preclude that possibility of risk.

[00:13:20] Tyler Goering: You know, A. J., I had a question for you. kind of tying this back to the speech. Do you think Trump and the government's actions over the next couple of years will be more predictable, in regards to the economy and national security than previous administrations? And the reason I asked this, I mean, you're an asset manager, you make your bread and butter by trying to predict the future.

[00:13:40] Tyler Goering: Trump's, you know, the one message he keeps coming back to. is America first, America first, America first. So I, and I, I get the impression that he's sincere about that. so if you take that lens and look at all the decisions he may make in his presidency, does it make it kind of easier to predict what he will do [00:14:00] next?

[00:14:00] Tyler Goering: Because he seems so committed to putting America above all else.

[00:14:05] AJ Giannone: Yeah, I would say with a certain degree of. of hedging, I would say yes. I think he is an order of magnitude more prepared for this particular term than he was in the prior one where he didn't, maybe really expect to win. So he had to scramble to find capable advisors. He didn't know who to trust.

[00:14:26] AJ Giannone: He was a little bit on the back foot coming in, which meant he had to probably expend more energy and resources playing catch up. He had to learn the common pitfalls. He, he had to really learn on the job. and I think that's a challenge for anybody. I listened to an interview, with Jared Kushner, maybe a year ago, on the all in podcast where he referenced effectively Trump's a smart guy.

[00:14:46] AJ Giannone: He, he's willing to try things. That are maybe unconventional, and if they don't work, he's going to stop doing them. He's not, pursuing actions purely for the impact of just trying things. He wants to accomplish objectives. If he sees what [00:15:00] he's doing isn't working, he's going to change and flip flop.

[00:15:02] AJ Giannone: And I think, when you look back to the first term that he did, you saw a lot of that was maybe spun or perceived as erratic, but I think was just A really logical strategy to try as many different things as possible in a short period of time where he knew we had limited, Window of opportunity to accomplish the goals that he had set out to do.

[00:15:25] AJ Giannone: And, obviously some of the things weren't going to work as well as others,in a try and see approach where you're trying multiple things and seeing what's working. I think that's, a necessary consequence of that strategy. So I would think that this time around, he's going to have.

[00:15:39] AJ Giannone: A team of people he trusts, more capable and experienced advisors in key positions of influence. He's going to have more concrete and fleshed out plans coming in about the things he wants to accomplish and how he wants to accomplish them. And I think that's going to result in a little bit, at least from a, Maybe an optics perspective, a little bit more stability and a little bit more predictability.

[00:15:59] AJ Giannone: [00:16:00] But I think at the end of the day, it's still going to be a results oriented approach where if what he's doing isn't working, he's going to, flip the script and try something else.

[00:16:09] Joseph Gradante: I want to pull up this, this image really quick. And, it's an image here of, it's Clinton, Bush, and Obama taking a selfie together. as you can see, here,these guys are pals, right? they represent the same interest groups because it's,it's,divide and conquer, essentially, right?

[00:16:27] Joseph Gradante: And serve these big interest groups, right? So they can enrich themselves and their progeny. And,I think, Trump, he has a plan. the key here is going to be Republicans, I think in that, you know, we watched last week with John Duhn, just to tie this back to monetary and fiscal policy, it whether or not they realize that because, you know, and that we showed it and, doing talks about, the fact that when he joined the Republican party, it was a very different party 20 years ago.

[00:16:55] Joseph Gradante: So a lot of these guys have different principles and, we went into that deeper last week, [00:17:00] but essentially we have to end this internal conflict for Trump to be successful. And there's so many,big. interest groups that, are going to be, behind the scenes trying to, sow the seeds of chaos.

[00:17:16] Joseph Gradante: And, so it's going to be interesting. I think, as an investment company, it's important that, our audience understand, what a macro investment strategy is. And why this stuff is so important because,a lot of our competitors will put out charts of, the 20th century and they'll show, hey, look at the stock market between the 1920s and early 2000s.

[00:17:38] Joseph Gradante: we were really the. only dominant force after World War II. We were the lone superpower. So you had this stock picker's market because you had this emerging, dominant, power that was, producing more wealth than any other, country, system, empire in history at a rapid [00:18:00] pace.

[00:18:00] Joseph Gradante: And so it was Candyland when it came to just, picking companies. That's not the climate that we're in anymore, right? there's more parody on, on the global stage. There's more competition and, it's important to understand the way,monetary and fiscal policy, affect, regime changes and A.

[00:18:20] Joseph Gradante: J., I was hoping you can kind of dive into that a little bit as we see, you talked about it last week, how, there was the Trump trade and the market gave back. Yeah. a lot of those returns. and so we've had this volatility, and until, things completely shift and we could definitively say that we're in a new regime, we kind of got to wait for guidance and,I was hoping you could talk a little bit about the CPI report and, and take her, a little bit deeper into that picture.

[00:18:46] AJ Giannone: Yeah, absolutely. And, I'm going to start at a at kind of the high level and then work down to the CPI report and some of the inflation guidance that we're looking for and taken in at this point. But, to start with, yeah. The key point that [00:19:00] people often reference when they talk about, the best way to handle your personal finances and the, the, Oh, you should, buy and hold index funds.

[00:19:06] AJ Giannone: That's all you need to do. Buy and hold index funds. you're looking at a sample size, which was to your point, Joseph, probably, between 1920 and 2008, which was, potentially the most lucrative period In history to be investing in any one country over sustained, period of about 100 years.

[00:19:27] AJ Giannone: And then you extrapolate that out on basically no sound basis to make an assumption about the future that is predicated on the results of the past. And, what we've seen Over the last,10, 15 years is really a reshuffling of the global world order, which has seen, the United States, maybe fall a little bit off of its hegemonic position and have to go toe to toe, with China and some other regional powers in certain key areas.

[00:19:59] AJ Giannone: And, I think. [00:20:00] To go back to Dalio and his principles book and, and some of the things that we talk about here all the time, like these are incredibly important forces and they dictate the performance of markets. if you're going to sit around and make an assumption that you can just stuff your money in index funds in the United States for the next hundred years and realize 10 percent compound annual real returns, That's certainly an assumption you can make, but is that a, an assumption grounded in, the best thoughts that we have today and the evidence that we have in front of us now?

[00:20:31] AJ Giannone: And I'd argue, no, I think right now, we're in the middle of some volatility and it's a turbulent time to be an investor. It's a turbulent time to, be thinking about risk and asset allocation, all these key decisions that inform your financial future. whetheryou think that's accurate or not, I'd argue the reality of it is that, there are risks now today in the market that there weren't.

[00:20:56] AJ Giannone: 10, 15, 20 years ago, there are challenges to an investor [00:21:00] today that didn't exist. And you've seen this, with respect to some of the major players in the hedge fund space, to your point, Joseph, again, you saw people who were lucrative,and very prolific stock pickers in the eighties, nineties, early two thousands, who've withered away and either closed up shop or converted to family offices or gone out of business.

[00:21:18] AJ Giannone: Because it's not an easy money environment anymore. You have to work for your alpha, you have to work for your dollars. and I think what that shows is that, we're going through a period where there's some serious debate about the fiscal health and the fiscal future of the United States and the ability to repay its massive debt load and continue to fund all the things that it's made promises to.

[00:21:40] AJ Giannone: So,to tie it back to The Trump administration and the, Department of Government Efficiency and some of these other, initiatives. I think it's imperative that issue is addressed, but these are the things that we're paying attention to, to make asset allocation decisions. Because if the fiscal issue isn't addressed, that means that, the United States is going to be at greater and [00:22:00] greater risk with respect to China, for our ability to compete and dominate the 21st century in the same way that, that we did in the 20th century.

[00:22:08] AJ Giannone: To bring it back down to ground level, last week we got a tepid CPI report. Effectively what happened was, the market was, worried about inflation re accelerating. We got, a report that came in with inflation in line with consensus, with some, sub categories that, that showed some weakness that I think was encouraging to a lot of traders.

[00:22:27] AJ Giannone: And what that did, after a couple of weeks of a selloff between, the end of 2024 and the beginning of 2025,sentiment had pushed pretty far into the negative direction. And then when you see, a report come out like, Hey, inflation's not as bad as we thought that just gave the markets, reason to, to think, okay, maybe we do get some more fed cuts this year.

[00:22:46] AJ Giannone: prior to that report, it was looking like, maybe one cut, maybe zero cuts,which was a huge 180 from where we were when the Fed started cutting rates when, markets were anticipating,upwards of 3 or 4 rate cuts in 2025. [00:23:00] the. The Fed funds rate is tricky to anticipate and most investors, systematically get their projection and their estimation of where it's going to be at any time in the future wrong.

[00:23:11] AJ Giannone: So what you have to do is take a,systematic approach of what are the likely? outcomes, what data is coming out in the near future and try to build a set of scenarios and do an analysis. All right. I think there's a 20 percent probability that we get, no cuts. I think there's maybe a 10 percent probability that we get 4 cuts.

[00:23:32] AJ Giannone: the most likely outcome is, going to be X, Y, or Z. And so that's where we're at today. I think, there are a handful of areas of the economy that are. in some sort of stasis, just kind of waiting for, some guidance and some trends to materialize. executives are notoriously risk averse.

[00:23:52] AJ Giannone: They don't want to be the first ones to move, with respect to things like hiring or layoffs or some of these big critical business decisions. those [00:24:00] are the things that get you fired as an executive in corporate America. going with the herd and being a sheep, unfortunately, seems to be the safe way to play it.

[00:24:07] AJ Giannone: So I think, really, we're in a period where we have a great deal of uncertainty around some of these geopolitical risks. We're still waiting for clarity on tariffs. We are looking for clarity on tax policy, and we've been at a relatively elevated, fed funds right now for a couple of years, which is putting some stress and some strain on areas of the economy, like commercial real estate, the housing market and a few other areas that are, interest rate sensitive, like automobiles and large purchases that are done on credit.

[00:24:38] AJ Giannone: there's a balance that we're walking now where we have to be really careful and it just pays to pay attention. it's going to be really critical to pay attention to what's coming out of Washington, as Trump begins to, fulfill and take action on some of these campaign promises.

[00:24:51] AJ Giannone: We start to see some of these policies crystallize and materialize into, concrete, executive actions and legislative changes. And I think it's going to be,[00:25:00] potentially bullish for markets to get some clarity on these things, regardless of which way they end up coming in. just removing that uncertainty, I think is going to be beneficial and allow corporate America, individuals, companies, executives to start to make some long term business planning positions and invest, you know, in America, bring production back,do some hiring, do the things that, that they need to grow their business into 2025.

[00:25:23] Joseph Gradante: Yeah, I couldn't have said it more eloquently there. And I think that was, perfect. that's really the key, right?you don't fight the Fed, right? Or the federal government for that matter. You can use the Fed as the actual Fed, the Federal Reserve. But waiting for these things to play out, is the wise move because you have these stretch valuations in the equity market.

[00:25:46] Joseph Gradante: You have, higher, yield on the 10 year. And so this narrowing, right? of spreads. it's okay. what's going to be the catalyst to really? Keep driving these valuations higher and really get this growth. And [00:26:00] until those things happen, it's, it's anyone's guess. And so we are not in the business of guessing.

[00:26:05] Joseph Gradante: We are in the business of making data driven decisions. And so we look at all these scenarios, and we build them into our essentially AI models, And we look at the probabilities and as these things change, It allows us to make changes, to the core portfolio, but, Tyler mentioned last week, the importance of keeping some cash on the side and having,some money for a tactical asset allocation plan.

[00:26:31] Joseph Gradante: So, you know, what that looks like is, as some of these, geopolitical risks and monetary and fiscal policy guidance, come to fruition, Sometimes there's sudden shocks to the market, and you could take advantage of that. Like,an example,sanctions on Russia, right?

[00:26:46] Joseph Gradante: Led to higher oil prices. If we see things, particularly get contentious on the world stage, with Russia, China, and the U. S., it's going to lead to idiosyncrasies and you could exploit those [00:27:00] idiosyncrasies to gain additional alpha, right? we are not in the business of trading and I think there's a lot of mis, I hate to use the word misinformation, but I'm going to use it for lack of a better term.

[00:27:10] Joseph Gradante: I think when people are trying to learn how to invest, unfortunately,I don't understand why, but there seems to be a lot of gravitation towards, day trading. And the reality is that, the more you trade, the more likely you are to fail, right? And so that's not what we are saying.

[00:27:27] Joseph Gradante: We are saying that you need to have a core portfolio that's dynamic. it's a right now because of the uncertainty. It's a mix of risk on and risk off assets. And then on the side, based on how these things unfold, you can make tactical plays and put your cash to work in these dirty 90 day outlooks, really but we have to wait for this guidance really to come out.

[00:27:50] Joseph Gradante: and that's really what we do as a company, right? And we have our macro calendar, coming out on the website and basically, as these events [00:28:00] unfold, we will be talking about basically how we're, repositioning our portfolio and how we're making tactical plays and you could.

[00:28:08] Joseph Gradante: Really leverage our macro dashboard to follow along and learn how to invest yourself. Or if you're not interested in doing it and you're just trying to become more educated and just be able to speak more intelligently on these concepts, when you're in larger groups, you can just follow along and let the audio team manage it for you.

[00:28:25] Joseph Gradante: But that's really, the core of what we do. And so, anything else to add to that, Tyler?

[00:28:31] Tyler Goering: No, I thought that was a pretty good summary of macro investing there. You guys, you guys nailed it.

[00:28:37] AJ Giannone: Yeah, man, I appreciate it. And I think, just to hammer this point home that Joseph made, there's a difference between day trading and being reactive to the environment that you're in, I think people get lost in this duality of there's just index investing and there's day trading and, we think the optimal solution is somewhere in the middle.

[00:28:57] AJ Giannone: it's a lot more similar to, buying, some [00:29:00] index funds, having a core portfolio that's diversified among many different asset classes, but keeping a part of your portfolio and a part of your strategyis really your Swiss army knife of utility where you can, deploy it when you feel like the risk reward ratio is in your favor and, based on the things that you're seeing with respect to monetary and fiscal policy and risk and, the discount rate and, the trade offs that you have between cash and risk assets, that you can put that money to work when it suits you and pull it back, when it doesn't, and you can dial your risk up and down with respect to, Generally where you think you are in the market cycle.

[00:29:33] AJ Giannone: And this is something that's a little bit controversial, but Again, it's based on the trade off that like, Oh, instead you can just earn 10 percent by buying and holding index funds. And that may not be the case. the evidence would suggest strongly that it's not the case. So, you know, where we sit is in that middle ground of, we looked out at the environment and, Joseph and I and Tyler and everyone else here and go this is crazy.

[00:29:54] AJ Giannone: there's risk all over the place. it makes no sense to just set it and forget it. you have to have a more [00:30:00] nimble and reactive approach that's taking in all the data and all the evidence and all the, information that we have available today to make the best investment decisions for the future, not for the past.

[00:30:10] AJ Giannone: And so that I think, lost in the shuffle, but it's worth hammering home at least twice because it's that important.

[00:30:16] Tyler Goering: Yeah, you know, building dynamic portfolios. That's what we're all about is not static portfolios, dynamic portfolios, staying nimble in the markets, you know, keeping an eye out for all sources of risk. You know, that's, that's our bread and butter. That's what we're trying to achieve here. I think you both summed it up very nicely that that is the goal

[00:30:35] Tyler Goering: It's so crucial to pay attention because great change brings great opportunity. And when you look at, Gen X to Gen Z, right? a lot of us didn't get to participate in those easy money times of mass, wealth accumulation, but there's massive change going on and this new administration and this new regime, it is the time to be invested.

[00:30:56] Joseph Gradante: There is opportunity, right? No matter how it goes. [00:31:00] But it, you have to be proactive and you have to follow the data. It's not just, Hey, what's a hot stock and throwing money at it. And I get so frustrated when people ask, Hey, what's a good stock? And like,it's just kind sad that it's come to that because we live in this information age and there's so much out there.

[00:31:15] Joseph Gradante: But it's hard to sometimes, I think get through the noise. There's a lot of companies that talk about, you Democratizing, investing, but the truth is they're actually making the situation worse because they're not giving people, the information that they need to be on.

[00:31:32] Joseph Gradante: They're exploiting their lack of financial literacy. And so our premise here is that to be financially literate. You have, it starts with economics, right? and that's really like the core of what we do is following these economic indicators to understand the money flows and understand, where the probabilities are in your favor.

[00:31:48] Joseph Gradante: and again, it's, it's been a pleasure to be with you. again, Alio Capital, check out the website, sign up for the beta, click like, follow below, another episode of Orwellian Optics, peace, love. [00:32:00] See you next time, folks.

[00:32:01] Tyler Goering: Thanks guys. Yeah.

[00:32:02] AJ Giannone: Thanks

[00:32:02] AJ Giannone: everyone.