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Joining me now is Scott Ladner, Horizon Investments chief investment officer. Uh, Scott, it feels like the theme of the show so far, which you've written about, is that we're sort of in this wait and see economy right now. We're waiting to see which tariffs are going to stick and what effect they will have. We're waiting to see if we're going to get a tax cut, or even an extension to Benz Point. How do you invest in a wait and see economy?

Well, and hopefully really you don't actually wait and see. We have to make decisions today about some of this stuff in in the absence of a lot of facts. Um, and and that absence of a lot of facts is making people very uncomfortable. Yeah. Um, and so it's not only investors that are uncomfortable, but it is consumers are clearly uncomfortable as we've seen with some of these surveys. Uh business business leaders are uncomfortable because CAPEX plans are coming in. So you know this unfortunately the wait and see outlook isn't great. Um, now this is a completely man-made wait and see. I mean, there is this has been sort of man-made uncertainty injected into the system. Um it can just as easily be uninjected or taken out of the system. So I I don't think that's quite in the price right now. Um, but but the issue, the problem with the wait and see economy is that if everybody decides at the same time just to stop because I don't know what's going to happen next. Um, that's a recession. Like that's that's how you get a recession. Now to be clear, that is not what we think is going to happen, um, but that is the risk out there that if if this thing goes on long enough and there's enough uncertainty that persists for long enough, people are just like, okay, we'll just wait.

Well, either that or people learn to make do with the uncertainty, right? Which is also, I mean people adapt in other words. Companies adapt, which is a thing that tends to happen also, right?

Yeah, I mean look we are very resilient. I mean like you know the economy is really resilient and the consumers are really resilient and and the investors are very resilient. And so yes, we will figure it out. But the process we've been going through over the last month or so has been people figuring out like, hey listen, we don't have necessarily a pragmatist in in office this time. Like we had a pragmatist much more of a pragmatist last last go around. This time we got somebody that's much more driven by ideology, much more driven by things he wants to get done quickly. Um, and and that sort of transition from like he's got our back no matter what from an investment standpoint. He's got our back no matter what. Stock market goes down, he's going to pull the plans and he's going to change and so on and so forth. He's not doing that right now, right? And so that transition from like realizing that we don't have this on the circuit back immediately to something else is like that's I think that's part of this adapt, you know, the process of being adapted.

Well, and to your point, maybe you know, either he was a pragmatist now he's not or there were pragmatists around him, right? I mean, I think that there was this assumption that Scott Beson is a is a former hedge fund manager. This is the guy who's going to be the Treasury Secretary. Howard Ludnick runs a bank, right? Investment bank basically, a brokerage. So, you know, how does that do you think where do you think we are in that realization process on the part of market participants?

I mean I think we're a lot of the way through it. I mean like I think at this point nobody's surprised that that we don't necessarily have clarity and certainty right now because Trump is using some some of his terror policy to to prosecute a lot of his a lot of his objectives frankly. Um, and and so and and Besson has been pretty clear, um and especially just this weekend saying listen, we view a correction, we view this sort of market action that we've been seeing as healthy. Um it's not healthy when you go straight up and you get euphoria. Now we weren't getting euphoria anytime soon, but he's got to sort of say some of this stuff. But I do think if things get particularly bad, I mean we are in a kind of an animal spirits type of economy. If the market goes down too much, that will end up hampering Trump's plans and that that won't be that won't be good. But right now a 10% correction, by the way, which feels much worse to folks right now, a 10% correction is very sort of manageable. You get you know, if we start getting towards a 20 or 25 or 30% like all bets are off with some of this stuff. But we just don't think we're going to get there because the economy is just darn strong.

So you're not doing wait and see investing because you don't really have the choice of doing that. So what are you doing right now then while all this is going on?

So we we've been doing uh we've been moving money actually out of the US and more into places like Europe and emerging markets, places that were sort of verboten from a from an investment standpoint because they just didn't have their fiscal house in order, their regulatory house in order or or otherwise. Um, but Trump frankly looks like he's scared the bejesus into some of these countries and to some of these officials um, by by by some of these actions. So he's kind of scared other countries into action. Uh, whereas like people like he scared Americans into inaction, but he scared other countries into into actually doing a lot of fiscal expansion, especially in Europe, first time we've seen that in what, a generation? Um, and he's forcing you know, China to to think about maybe coming off of common prosperity um, and maybe even doing a little bit of fiscal, we'll see. Uh but you know his the sort of the threat of Trump has gotten some of these other economies and some of these other geographies kind of off you know, off their hind legs and getting just to move again. So that's actually unlocking some investment potential for the first time in a very long time outside the US. So the the primary thing we've been doing is getting is moving money out of sort of you know, cyclical value US side and moving it, which we still love we still love tech. Um and moving it more into the uh more into frankly Europe, emerging markets, types of places, at least for a while.

Okay, so I have two follow up questions then on that. First of all, we've already seen a big run in parts of Europe for example and in things like Kweb, the Chinese internet stocks, right? So how much more do you think can be can we see on top of what we've already seen?

It will depend on somewhat on on if the policy is actually get followed through. So the the move we've gotten so far in both of those places has been more speculative. Um like, oh my gosh, fiscal expansion is possible in Europe. Um, now the next thing is is we actually have to see it happen and we've got to see it flow through some of the company results and see consumers actually get excited over there again and get off their hind legs. Um in China it's going to it's going to be do they is she really coming off of capitalism is evil? And is he really coming off of common prosperity? Now we've seen it before in China where like one day it was zero Covid, the next day it was not. So he can change his mind and move 180 on on an issue, a very big issue, uh like pretty easily. He may be doing it again on this on this common prosperity anti-capitalism thing. If that is the case, like China is all of a sudden investable again. It's the second biggest economy in the world. Um, and in Europe, you know again, these aren't I don't think long-term trades because American exceptionalism is still there, it's probably still going to rule the day, AI is still him. Um, but it's it's going to these other places are all of a sudden much more investable than they have been for a very long time. And so that's uh seeing how it actually comes through in in reality. It's like outside of the initial burst of like, oh my gosh, this is possible. Um, like that's that's sort of the next leg of this.

Okay, so let's come back to you love tech. You still love tech. US US mega cap tech specifically?

Yeah. Yes. Anything anything touching AI. So just just like anything touching PC or internet 25 years ago, 30 years ago, uh was was you couldn't like you may be wrong for a little while, but you're not going to be wrong over the over the next three or four years. That's kind of how we feel about US tech today. Um, and so and especially as you know, it's been obviously bludgeoned over the last month or two. So these are much more attractive prices to to get in than it was a month or two ago. Um, and so yes, we we want to continue to add into into weakness in in that space because I think that that that trend and that tailwind is not going anywhere anytime soon.

Scott, thank you so much for coming in. It's good to see you. Thank you.

I appreciate it.