First Trust ROI Podcast
On the ROI podcast, we discuss some of the most important questions facing investment professionals today, ranging from macroeconomic views, to perspectives on the equity and fixed income markets, to insights on practice management. We aim to cut through the noise, examine the data, and provide fresh insights to investment professionals as they help their clients find better ways to invest…seeking to generate attractive returns on their investments.
First Trust ROI Podcast
Ep 48 | Richard Bernstein | Where to Invest When Certainty is Scarce | ROI Podcast
Richard Bernstein draws on over four decades of investment experience to offer insights on how to navigate risks and opportunities amid soaring economic uncertainty and market volatility.
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Hi, welcome to this episode of the First Trust ROI podcast. I'm Ryan Isakainen, etf strategist at First Trust. Today, I'm joined by Richard Bernstein of Richard Bernstein Advisors. Rich is the CEO and founder of the firm that bears his name. Today, we talk about what's going on in the equity markets, where there might be opportunities, the risks related to all of the uncertainty that has emerged in 2025. Thanks for joining us. You were talking a second ago, before we got started, about an example of navigating tariffs, a publisher in Canada and I thought it was such a great example, so I want you to share it again if you're willing, because I think that sets the table for our conversation.
Richard:Sure. So, ryan, first let me say it's not my job to opine on whether policies are good or bad. Of course, as an investor, you just got to determine the best portfolio for whatever policy is in place. And so, with that in mind, yes, I know someone who is a senior manager in one of the major publishing companies and I don't know a month, six weeks ago, whenever it was, they had an emergency, all hands on deck meeting of senior management because of the tariffs, and they pulled in people from all over the country, maybe all over the world, I really don't know, but a lot of people and they were in a meeting for like four or five hours and when they came out of the meeting, they were informed that the tariff decisions had been changed and everything they had decided to do was now wrong. So they went into a meeting with one set of rules. Four or five hours later, the rules have changed.
Ryan:So you know, as I said, you'd think that some person would have come in and interrupted the meeting and say, hey guys, hold on here a minute. But evidently that didn't happen. I just I wanted to share that because I think that is like it typifies what businesses have had to go through, with all of the uncertainty. And I mean it's almost like uncertainty has been normalized this year.
Richard:Yeah, and you know, for all of us as investors, we tend to think of uncertainty as just being volatility or something like that, and we don't think about it from the point of view of a company and how companies have to plan. And the uncertainty hinders planning and I think companies can deal with any policy. I know everybody. No CEO has ever said to me they want to be more highly regulated. So you know.
Richard:but regardless of whether it's regulation or not regulation, whenever there's a clear set of rules, I think any CEO can pretty much deal with that. They may not like it, but they can deal with it. But when the rules are changing, you just can't plan, and so it hinders capital spending, it hinders hiring and everything.
Ryan:Yeah, Now I'm glad you've kind of made that distinction between operating a company and investing, because that was my thought and my question for you is how do you recommend investment professionals that are advising their clients and investors themselves? How do they navigate all that uncertainty?
Richard:Yeah. So, ryan, I think one of the things that we've tried to do at RBA through the years is invest for scarcities, right? Sometimes there's not a lot of earnings growth, so you want to find the companies that do have earnings growth. Sometimes there's a lot of earnings growth. You want to find the scarcity. It might be value, so you want to invest for value and things like that. I think everybody understands that there's a ton of uncertainty out there right now. Maybe it's going to subside, maybe it's not, but what that says is that the scarcity in the equity market right now I would argue in the fixed income market to some extent as well is certainty, and so you want to emphasize certainty in your portfolio. Now, that doesn't mean going to 100% cash. Somebody challenged me recently and said oh, you mean we should just have cash.
Richard:And I said no, no, no, that's not right. But what is certainty? Certainty is dividends right A bird in the hand is worth two in the bush. Certainty is dividends right A bird in the hand is worth two in the bush. Certainty is better balance sheets and stronger balance sheets and more visible outcomes and things like that. And I think a lot of investors have really bought off on kind of pie-in-the-sky long-term growth stories. Well, obviously, the range of outcomes has gotten broader and broader and broader for those long-term themes. So I think certainty is what people should emphasize in their portfolio.
Ryan:That's certainly what we're doing, Certainly what we're doing at FDA. So dividends, maybe higher quality, repeatable earnings those sorts of companies.
Richard:Exactly, it's not the amount of growth, it's the visibility of growth.
Ryan:Yeah, now, given that there is a lot of uncertainty, I think back to the last time the Trump administration was in office and there was a lot of trade war rhetoric and there was a lot of tariff negotiations, and it went back and forth, and back and forth. And then, in 2019, we had a rally and, I think, caught a lot of people by surprise, myself included. If I'm completely honest, do you think this time we need more certainty before we can have some sort of a rally in markets, or does it sneak up on us again?
Richard:I think. Well, first of all, I think you know the first Trump administration. We have to be careful about any conclusions, because it was kind of sidetracked by the pandemic, right Before we ever really saw what was going to happen. All of a sudden there was the pandemic and, you know, I don't think we should give it incomplete, maybe not a grade of ABCD, because of the pandemic. You know, can the market rally? Well, certainly it can. I mean, you know, there's timing differences with the amount of stimulus coming from the new tax package or whatever. There's questions about tariffs and when they're actually going to be employed and to what level. So in the meantime, yeah, the market can still rally.
Richard:I think, rather than talk about the market, which has been kind of what everybody's always worried about, and get you on television to talk about the market, I think one has to realize that the market is dominated by such a few number of stocks right now. Then, when you talk about the market, you're basically talking about seven or ten companies, and I'm not sure there's huge opportunity in those seven or ten companies. Like, who doesn't know what they are? I bet everybody watching this can name all seven or ten companies, right, how much opportunity is there. Rather, I think what people should be doing is thinking about the opportunity set beyond those seven companies, and is that a viable opportunity in this environment that we're heading towards? I would argue I think it's a huge opportunity, um relative to those seven or 10 companies.
Ryan:By the way, I was reading a note that your team had published that it said something like something about the mag seven and the mid seven.
Richard:Yes.
Ryan:I've got three teenagers. That is fantastic.
Richard:Right, the mag seven becomes the mid seven. Yes, and what we're trying to show in that is that, look, the mag seven may be magnificent companies, but they're not unique anymore. Maybe they were five years ago or four years ago, but they're certainly not unique anymore. And the example that we gave was that the median projected earnings growth rate for the MAG7 is 10% a year. 10% earnings growth over the next 12 months. That's it, just 10% earnings growth. If you look at the other 493, their earnings growth forecast is 9%. So how unique are these companies?
Richard:I'm not so sure, and so they seem to be kind of run-of-the-mill median type growers. So we use the Gen Z term mid, and we said the Mag 7 becomes the mid 7.
Ryan:Yeah, and so maybe the premium valuation that you're paying for that mag seven group of stocks is not exactly, I mean if you want to pay a premium valuation for uniqueness, right.
Richard:Why? Why do we pay more for a maserati than we do for a chevrolet? There's not a lot of maseratis. Why are fabergé eggs so expensive? Because there's only like 15 of them in the world, right? And so things like that. If something is unique, yes, you should pay a higher price for it, but if something's not unique, why the higher valuation? That doesn't make any sense, and we seem to understand that in every other aspect of our economic lives, but when we come to the stock market, somehow people lose that.
Ryan:Yeah, one of the things that we talked about last time you joined me on the podcast was re-industrialization, and you had talked about why that's a necessary thing and it's a good thing. And while we're still kind of on the topic of trade and tariffs and that sort of thing, I think that's one of the goals that the new administration has at least alluded to, if not said outright. They want to balance trade, and that involves reindustrialization, probably. So is that? I guess? My first question is is a trade, a balanced trade relationship with our trading partners?
Richard:is that a?
Ryan:good thing or a bad thing, it depends, okay.
Richard:How's that? For a decisive answer? It depends. I mean. There's many economists who pointed out nothing unique to me. There's nothing wrong with the trade deficit with a specific country, right? Certain countries can produce things that we don't produce and we produce things other countries don't produce, and that's perfectly normal In economic terms. It's called comparative advantage and that's fine, and they're always going to have a comparative advantage.
Richard:I think the United States is in a very different situation, in that we have a massive trade deficit that has been growing for 20, 25 years and we're just very highly dependent on the rest of the world for everything. There's actually very little that we supply to the rest of the world. That's value-added production. We provide crops, we provide energy, we provide raw materials, but there's not a lot of value-added goods that we provide to the rest of the world, especially when you take out those raw materials. So we're highly dependent on the rest of the world for these value-added products. That, I think, is the issue, because you then end up being dependent on the rest of the world for virtually everything. You know my joke we probably did this last time. I use it all the time is anything you're wearing right now made in the United States? And the answer, of course, is no, there is nothing.
Richard:That's because the United States has lost about 90% of our textile manufacturing capacity in the last 30 years, so that's not necessarily huge value added. I guess we could all run around naked. That would be interesting. But if you think about that relative to steel, relative to aluminum, relative to other manufacturing and things like that, you can start to understand the predicament that we're in. So I don't think we're ever going to go back to the 1950s and 60s manufacturing powerhouse, nor do I think we can or necessarily we should.
Richard:But to regain some element of economic independence is important and I think, ryan, I just want to point out when I say that I think it's really critical for people to understand that when we at RBA talk about the American Industrial Renaissance, you guys know this at First Trust very well.
Richard:We've been on this theme since 2011, right. I mean, I think the AIR ETF, which we have with you, came out in 2014, right, and before that it was a UIT. So this is not a new theme for us. This was something that was clearly in the cards that politicians ignored, and we thought that, again, looking for scarcities, this was something that had clearly in the cards that politicians ignored, and we thought that because, again, looking for scarcities, this was something that had to happen and I think now it's finally reached the, the political spectrum where people finally understand that this is important, different ways to solve the problem. I get that and and and that's what you're hearing a lot about right now, but the theme has been a theme of ours for more than a decade. Yeah, okay, so if that's what you're hearing a lot about right now, but the theme has been a theme of ours for more than a decade.
Ryan:Yeah, okay. So if that's a desirable outcome, I had Brian Westbury on my podcast a few episodes ago and he kind of I'll summarize his opinion. It was a lot more nuanced than I'll say, but it was basically that the Trump administration's recognized the problem, but he wasn't sure that tariffs was the right tool to address the problem.
Richard:What would you advise? If you were an advisor, I would agree with Brian on that, I think. Look, the goal here is a very noble goal and I agree with the goal 100%. Tariffs, I'm not sure, are the best way to solve the situation, and the reason why is simply because tariffs I'm going to sound professorial here for a second, I apologize Tariffs assume that goods have tremendous elasticity.
Richard:In other words if you raise the price on one, good customers are going to switch to the cheaper American-made good, which, in theory, fine, that might make sense. The problem is we were just discussing a second ago we don't make a lot of stuff here, so there's no ability to switch to an American made good, unless we walk around naked, unless we walk around naked. Exactly right, we don't make clothing and people do not want to see me walking around naked.
Ryan:I guarantee you that one.
Richard:So the problem is is that the tariff becomes a tax because there is no ability to switch? Is that the tariff becomes a tax because there is no ability to switch, and so I think that's a little bit not the most efficient way to solve the problem. I've argued for many, many years that what we should have been and should continue to do is provide massive incentive for companies to locate manufacturing here in the United States, and the example I used way, way back in 2011 in a report it was an op-ed in the Financial Times that said make the United States a giant enterprise zone. Now, for those people that aren't familiar with enterprise zones, they're zones that are set up, usually in cities, to try and attract investment, and you get huge, huge tax incentives, but only if you're within the zone. If you're outside the zone, there's nothing. So if you look at the inner harbor of baltimore that's always one that people talk about you can actually see where the where the boundaries are of the enterprise zone, because the second you go one block away from where the boundary was, there's no development and and you can literally see it, and so my idea was turn the United States into a giant enterprise zone.
Richard:We can't compete on the cost of labor with other countries, but we can compete on the after-tax cost of capital. Why don't we do that? Say, if any company builds a plant, keeps it in the United States for X number of years huge, I mean out of this world tax incentives to reload that plant here in the United States, because you have to offset our higher cost of labor and there's two inputs to production capital and labor. We can't compete on labor, let's compete on capital. The interesting thing right about when I wrote that 14 years ago was I went to economists on the left and on the right and asked them their opinion and it was crickets from everybody, because everybody had staked out their claim.
Richard:Nobody wanted to meet in the middle, and today we know that more than ever before. But that was even evident a decade ago.
Ryan:So is that why something like that hasn't been proposed and advanced? I think so.
Richard:I think that's right. I think that if you think about the politics involved with what I'm suggesting, the Republicans would argue that it's industrial policy that we're handing out favors to certain industries, and the Democrats would say that we're giving tax breaks to corporations. Right.
Richard:So you know, and what I actually was trying to propose was something in the middle that gave you a little bit of tax incentive, but only if you behaved well, and but didn't give just open end tax cuts and didn't you know, unless they were doing good thing. I mean, it seemed to be very sensible, I don't know.
Ryan:It's not like that hasn't been tried in other countries.
Richard:Oh it's done all over the place. I mean, as I said, it's done.
Richard:Cities do it all the time yeah you know, in the united states, baltimore being the perfect example that was probably 30 years ago that they set this up, but there is some positive effect. But the beauty of it is, if there is no positive effect, it doesn't cost you anything. Right, because you're only rewarding good behavior. If nobody behaves well, there's no tax loss. As opposed to giving, say, apple or Microsoft or or NVIDIA a tax break and then they go and produce in China. Right, why should the United States be funding production in China? That doesn't make much sense to me.
Ryan:OK. So, given the level of uncertainty that everyone is dealing with, the first quarter was a pretty tough quarter for GDP but there was some some maybe front running of imports that were involved with that. The second quarter at this point we're recording this on June 3rd, it's going to air on June 16th the Atlanta Fed's GDP now says something like four plus percent.
Richard:Surging, absolutely surging.
Ryan:Yeah, but is that just the opposite side of the coin you think? I think it probably is.
Richard:I think the gyrations of GDP are. Clearly you don't get gyrations from that just in the normal economy, unless something falls apart. So there's got to be some external influence here and I think we'd all agree it's probably trade that's doing this. But you know the underlying economy remains reasonably healthy. I mean we could argue about how healthy, but but it's certainly reasonably healthy. Um, uh, you know, you're seeing, the labor market is still pretty strong. We could argue there's little cracks around it, but labor market's pretty strong. Um, consumption is still reasonably healthy. Personal income is still reasonably healthy. You know it's like I. I think we could. You know we could argue about things like construction and housing and all those type of things, but you know, but I don't think we're heading for a recession in the near future.
Richard:Now, more important for investors, I think people should be looking at profits growth rather than economic growth. The profit cycle itself is decelerating and it looks like that's going to happen. Regardless of whether there's tariffs or no tariffs or uncertainty, that really looks like it's going to happen. We have some very tough comparisons coming up versus the end of 2024, which means that earnings growth is going to slow down. Doesn't mean it's going negative, but our forecast is we're going to go from about 14% earnings growth for the S&P year on year to about 2%. That's meaningful but not dire at all.
Ryan:So how does that compare when you look at different, if you slice the market differently, because, as you noted earlier, those 10 companies they account for a lot of that probably shift in level of profit growth.
Richard:So, where you see it, I'm saying, obviously this will make sense after I say it, your more cyclical industries are going to see more of a slowdown that's why they're called cyclical, but your more stable growth will do okay, which is why I mentioned before that our portfolio is oriented towards certainty. Certainty for us in a sector framework means more defensive sectors. So we've changed quite a bit Our portfolios in the last six months. Eight months have changed quite a bit from being very, very cyclical, trying to take advantage of that upturn in profitability, to being more defensive. So we're now overweight things like Saples and healthcare and utilities and quality, and we've moved up in market cap all the kind of things that you do when you want to try and gain more certainty.
Ryan:So the Fed has, I mean, I think, coming into this year there was maybe three or four cuts that were predicted by the markets or priced into the markets. Now I think we're at like two, maybe by the end of the year. So two-part question. One should the Fed be cutting rates at some point this year? And two do you think they actually will?
Richard:I don't think they have the flexibility to do it right now. I think the uncertainty some of the leading indicators of inflation have turned up. Wages are still pretty healthy and, as I said, the labor market is still reasonably tight. I don't think the Fed is going to cut rates until they see demonstrable weakness in the labor market. Right, there are two things are inflation and unemployment, and I think, given the uncertainty about inflation, nobody knows what the impact of tariffs is going to be.
Richard:I mean like you know, some people say, oh, it's going to be definitely inflationary. Some people say, I don't know how anybody could make that judgment. Yet I really don't know. And that's what the Fed is faced with is they don't know. So they're going to take their cue not from inflation, but they're going to take their cue from the labor market, and the labor market is still pretty healthy. I think, if everybody wants to play along at home like the home version of Hollywood Squares, you watch weekly initial jobless claims, because that is a leading indicator of employment, of the remainder of the employment statistics, and it'll give you a pretty good early warning radar about will the Fed be able to cut rates. Right now it's still pretty healthy. There's not much to be said, and I think you're hearing that from the Fed.
Ryan:Profits. Profit growth is decelerating. Is there anything in your kind of as you pull out your crystal ball and you think, well, maybe this is a growth surprise. Is there any sort of growth surprise that would catch the market off guard?
Richard:So I think I'm Trying to be optimistic yeah, no, no, no, I would say I'm going to. I think, yes, there is that chance that we're going to see stronger profits growth, but I think that people want to shift their mindset from real growth and real GDP to nominal growth and nominal GDP. And the reason I'm saying that is when I started back in the dark ages a bazillion years ago, nominal GDP was as important as real GDP to investors because there was a lot of inflation. Nominal GDP meaning real GDP plus inflation. There was a lot of inflation, so people concentrate a lot on nominal GDP.
Richard:Well, for decades now, we haven't had to worry about nominal GDP. I'm sure a lot of people don't even know what it is, and that's because inflation has been so low. So if you think about corporate profits growth, corporate profits growth is nominal. It's important. If companies can raise prices, profits will go up. So I think we want to get away from just thinking about units and unit growth, which is what people have really been focused on, and understand that there may be some pricing power here that companies can take advantage of. I think that would be a whopping surprise to many analysts, because they haven't had to deal with that in ages.
Ryan:Yeah, that's a good point. The other thing, or one of the other things that we discussed last time you were on was Bitcoin and you were kind of using it as a measure of liquidity in the market and you know, since then, bitcoin has continued to kind of move higher.
Richard:Yeah, it's moved higher, it went down, it went down pretty dramatically and now it's back up, so I'm not sure it's quite the store of value that everybody sometimes makes it, but is it still?
Ryan:do you still look at it as maybe a proxy for how much liquidity is in the market?
Richard:I definitely think it is, and I think it certainly shows the speculative fervor that still exists. You know, one of the things we've done recently is we've shown the correlation between Bitcoin, which I would argue is the ultimate speculative asset in this cycle. We've shown the relationship between Bitcoin and other speculative investments, and their correlations are all very, very high. The one thing that I do take big exception to is this notion that Bitcoin is somehow different than other cryptocurrencies.
Richard:And that's a big theme. The crypto fans like to say oh, bitcoin is real, these other things are fake, except the correlation of their returns is like over 80%. So there's really not that much of a difference between Bitcoin and Ethereum and Doge and Solana or whatever that other one. They all tend to move together. So that says to me this is more speculative than some people sort of assessing the future value of cryptocurrency, of bitcoin, as a usable cryptocurrency that were true it should be leaving the other ones behind interesting, yeah, I I candidly I don't know what to make of it sometimes, because I would have never thought it would be at the level that it's at today no, it's pretty shocking and and, um, you know, one of the things that I find a little disheartening editorial here for a second that I find a little disheartening is that the US financial markets used to be the pristine financial market of the world.
Richard:Right, we were the cream of the crop class and other countries envied our ability to have this clear and transparent and A-plus rated financial market, and what's happened in the last 5, 10, 15 years is that we've kind of moved away from that. And I think crypto and the fact that crypto is getting and this is not a political statement, because both sides of the aisle are on this Crypto is getting more attention than it probably should in Washington. I think we've lost sight of being that pristine financial market. All in the name of we want to speculate. That seems very weird to me.
Ryan:Yeah Well, saying pristine financial market, we also used to have a pristine credit rating.
Richard:Well, yeah, we don't have that either.
Ryan:That has seemed to have, um, well, I think the last rating agency just downgraded, so, um, that's a good segue. What? What do you think of of, uh, the health of the? The us credit market? I mean you, well, the us treasury market, I mean what? What is our? Are we worthy of a triple a?
Richard:credit rating.
Richard:No, I'm I clearly not, because now nobody rates that we forget that the dollar is the safe haven currency. There's kind of de facto and du jour right, du jour is by law. De facto is what is and what's happened. And the dollar and the treasury the treasury is the safe, the treasury no treasury bond is de facto the safe haven asset, but it actually isn't, and the only thing that's saving it is that the treasury market is the most liquid and deepest in the world versus other AAA rated sovereigns which don't have that liquidity.
Richard:So, if you want safer assets not safe, but safer assets you have no place to go but the United States. And where do you see that? You see that in spreads of treasuries versus AAA rated sovereigns. And there's a chart that we have that goes back I don't know, I can't remember how many it goes back to like 1990. And it shows treasuries 10-year treasury yield versus the 10-year treasury yield of the German Bund, which is AAA rated, and early on, before we got downgraded in 2011,. What you find is the two bonds trade back and forth and back and forth. There's a little blip with German reunification and they were printing money like crazy because they wanted to reunify Germany and all that. But generally the two bonds trade back and forth and back and forth to reunify Germany and all that. But generally the two bonds trade back and forth and back and forth.
Richard:Okay, 2011, we get downgraded and almost to the day, not too much exaggerating treasury yields start to climb relative to German bonds and that has never gone away. And right now it is almost 200 basis points of extra yield that we pay versus German bonds and other AAA rated sovereigns. And so this notion that we're going to be penalized my argument is we have been penalized. If you had a muni bond and it was downgraded, you wouldn't expect. You expect the yield to go up. If it was a corporate bond and it was downgraded, you expect the yield to go up. Guess what happened? We're not AAA anymore. Our yield went up relative to AAA rated sovereigns, and so what that means is we've been penalized. If you think about how every mortgage, every corporate bond, every muni bond, everything is priced off the 10-year, our economy has already been damaged by this for the last 10 to 12 to 14 years. Why didn't anybody notice? Nobody noticed because the absolute level of interest rates was so low. Everybody said, oh, rates are so low, this is great.
Ryan:Well, the boons were negative yields. They were, that's right, nice stretch there.
Richard:And, if you think about it, why were we still paying positive interest rates when AAA rated sovereigns were not? And this was true all around the world? It was really it was a crazy, crazy thing.
Ryan:I mean the Germans had much more austerity coming out of the financial crisis. They did Absolutely, and now it seems like this year they've kind of maybe loosened the purse strings a bit or at least said they were going to.
Richard:It'll be very interesting to see what happens because a lot of major NATO countries not all of them by any means, but several of the major nato countries are aaa rated and if they are going to change their spending patterns and their government borrowing and everything else, well, it'd be interesting to see what happens yeah, well, international um equities have certainly had a good year thus far.
Ryan:I mean europe in particular, but also, I think, brazil has done relatively well there's been some other pockets that have done really well. Some of that, I think, is just currency translation because the dollar has weakened right. But what's your outlook on international stocks? Do you think that there's opportunity there?
Richard:I think there is, and I think that international quality, specifically European quality, is on sale. I think this is for us, this is the most exciting theme of the next year to roughly, let's say, six to 18 months. I think it's the most exciting theme I could offer people is international quality. The growth rate, the expected earnings growth rate for international quality is as high, if not higher, than that for the MAG7. Again, this notion of the MAG7 becomes the mid-seven, but yet their dividend yield is almost infinitely higher because most of the mag 7 doesn't really pay a dividend. Right.
Richard:You know, for I'd say in probably roughly four to four and a half percent dividend yield and similar projected growth and evaluation. That's a half. That sounds okay to me.
Ryan:So quality international I think that's an important qualifier, although I don't know what you think about the low quality stocks. But I looked at the MSCI Acqui XUS index and something like 43% of that index had returns on equity below 10%. Yeah right, so not necessarily the high quality earnings. So our takeaway from that was that it is important to be selective when you're investing in nationals A hundred percent, and I think that's part of our emphasis here.
Richard:Is that the way to think about using my example before the Maseratis are on sale? If we could buy a Maserati for a Chevy price, I think we'd all do it, or most of us would, and that's kind of what's going on.
Ryan:Yeah, Valuations are definitely compelling, Although you know we've been saying valuations for international look pretty attractive for the last decade.
Richard:Absolutely, but they had to compete with what was somewhat we could argue how much somewhat of a Magnificent Seven environment, and their growth rates weren't there. Now, I think, you get the growth rates, you get the dividends and you get the valuation, which is a pretty good combination.
Ryan:Yeah, yeah. It strikes me that it's always important to at least attempt to avoid the value traps, correct and maybe using some screens where you're screening for dividends or quality or some other factors is a way to do that. Absolutely, I always have. I try to come up with a good final question for you, rich, and you're always good at answering it. But I'm looking around. You were able to bring along some interns from RBA and it got me thinking like, okay, you've been doing this for four decades plus, right?
Richard:Yeah right.
Ryan:If you were to go back when you were younger in your career, what have you learned that you would pass along and say like this is what I didn't understand back then, but I do now and it's been really important.
Richard:That's an interesting question because I'll answer that specifically. But I recently realized that, looking back on my career, there were several points in my career where I thought I was reasonably smart and when I look back I realize I really didn't know crap.
Richard:I really didn't know what I was doing but it sounded good and I convinced myself I was smart. And I think that's kind of important, because you should never stop trying to learn and never stop trying to improve, and one of the things that, in fact, we talked about this yesterday with our intern crop, given that it's the beginning of June and that's when interns flood New York City, that's right. Don't overly plan your future. I did not do that. I was the person who, in interviews, everybody asked me where do you want to be in five years? And I would say I don't know.
Richard:If you're 21, five years is like 25% of your lifetime. I mean, I don't know, but it took me a while to realize that was the wrong answer because I wasn't getting job. Second interviews and then I started making stuff up. But that's kind of how I've run my life, do not? I think younger people, especially these days, think everything has to be planned Right and and that I have to follow a certain pattern and I have to do certain things, and I just think that's the wrong way. I don't think. I think putting on blinders and not experiencing what's around you and not taking advantage of opportunities you didn't anticipate is is really bad. I think it hinders people's career growth.
Ryan:That is great advice. And you know, don't, don't think you're smarter than you are is the other takeaway that I heard in there.
Richard:Yeah, I'm constantly reevaluating my own intelligence.
Ryan:Well, hopefully we all are and hopefully we all are learning something.
Richard:Hopefully you're not reevaluating my intelligence. No, no, that's why I have you on the podcast because I always learn new things.
Ryan:I have the smartest people I know on and you are one of them. So thank you for coming on. Thank, you, and thanks to all of you as well, for joining us on this episode of the First Trust ROI podcast. We will see you next time.
