By Jeremy Schwartz, CFA
On last week's episode of the "Behind the Markets" podcast, Liqian Ren and I were joined by Steve Cordasco, CEO of Cordasco Financial Network, and Srinivas Thiruvadanthai, director of research for the Jerome Levy Forecasting Center. We engaged in a wide-ranging discussion focused on global investment opportunities.
Srinivas Thiruvadanthai On Global Markets
Thiruvadanthai responded to Professor Jeremy Siegel's opening macro comments by saying he has a rather bearish outlook on the global economy and for international markets in particular. He finds high global debt levels, low interest rates and the inability to stimulate demand as the main reasons for concern. He also sees many countries as buoys in the ocean, bounced around by what is happening in the U.S. or China.
Thiruvadanthai has a more positive view on Japan, however, encouraged by an improving picture for corporate debt, citing lower net debt than was outstanding in 1970. Further, Japan's domestic economy has beaten expectations and has pent up demand for capital expenditures, while any weakness has been fully driven by exporters.
Later, Thiruvadanthai discussed the philosophy of the Jerome Levy Forecasting Center. It follows a macro-level flow of funds framework that looks at corporate profits in aggregate. The Center evaluates how movements in balance sheets translate to private sector profits and underlying growth.
He also discussed CEO David Levy's strategy of being bullish on bonds for much of the last 30 years, based on the belief that as global balance sheets continue to get bigger, interest rates will continue to be lowered. However, Thiruvadanthai also noted that we are getting to the point in the cycle where less upside potential remains on the trade, and we are beginning to see asymmetric payout structures mitigate that opportunity.
Steve Cordasco On Effective Financial Planning
Cordasco began by explaining his firm's financial planning roots. As financial planners first and foremost, Cordasco's team members spend time educating clients and helping them through understanding the complex discourse of markets.
Cordasco discussed two contrasting mindsets: the "fast money mind" and the "slow money mind." The fast money mind is the impulsive response a person has to news, advice or decisions. The slow money mind involves more strategic decision-making, when one has the time to consider the entire situation in order to determine if what one is contemplating makes practical sense. Cordasco Financial Network measures how you respond to various questions to see how both your fast money mind and slow money mind work to better help develop financial plans.
Cordasco emphasized truly getting to know clients beyond their general interests and occupation because more personalized service is instrumental in helping them reach their financial goals.
It was a great conversation. Please listen to the full discussion below.
Jeremy Schwartz, CFA, Executive Vice President, Global Head of Research
Jeremy Schwartz has served as our Executive Vice President, Global Head of Research since November 2018 and leads WisdomTree's investment strategy team in the construction of WisdomTree's equity indexes, quantitative active strategies and multi-asset model portfolios. Mr. Schwartz joined WisdomTree in May 2005 as a Senior Analyst, adding to his responsibilities in February 2007 as Deputy Director of Research and thereafter, from October 2008 to October 2018, as Director of Research. Prior to joining WisdomTree, he was head research assistant for Professor Jeremy Siegel and helped with the research and writing of Stocks for the Long Run and The Future for Investors. Mr. Schwartz also is co-author of the Financial Analysts Journal paper, What Happened to the Original Stocks in the S&P 500? He received his B.S. in Economics from The Wharton School of the University of Pennsylvania and hosts the Wharton Business Radio program Behind the Markets on SiriusXM 132. Mr. Schwartz is also a member of the CFA Society of Philadelphia.
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.