Episode 88: Watching our bond scenario unfold: ready for phase 2?


Consumer exhaustion is kicking in, yields have come down, and the economy is beginning to show signs of slowing.

Since outlining our three-themed bonds outlook, we’re finally getting an indication that it’s coming to fruition. As we get ready to transition to phase 2 (“duration is your friend”), investors could embrace longer duration on expectations that yields will fall further and the economy will continue slowing. Will the headwinds that impacted bonds as yields rose become tailwinds when yields fall?

For all this and more, tune in to our new podcast episode.  

The opinions expressed are those of Manulife Investment Management as of the date of this publication, and are subject to change based on market and other conditions. The information and/or analysis contained in this material have been compiled or arrived at from sources believed to be reliable but Manulife Investment Management does not make any representation as to their accuracy, correctness, usefulness or completeness and does not accept liability for any loss arising from the use hereof or the information and/or analysis contained herein. Manulife Investment Management disclaims any responsibility to update such information. Neither Manulife Investment Management or its affiliates, nor any of their directors, officers or employees shall assume any liability or responsibility for any direct or indirect loss or damage or any other consequence of any person acting or not acting in reliance on the information contained herein.

All overviews and commentary are intended to be general in nature and for current interest. While helpful, these overviews are no substitute for professional tax, investment or legal advice. Clients should seek professional advice for their particular situation. Neither Manulife, Manulife Investment Management Limited, Manulife Investment Management, nor any of their affiliates or representatives is providing tax, investment or legal advice. Past performance does not guarantee future results. This material was prepared solely for informational purposes, does not constitute an offer or an invitation by or on behalf of Manulife Investment Management to any person to buy or sell any security and is no indication of trading intent in any fund or account managed by Manulife Investment Management. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Unless otherwise specified, all data is sourced from Manulife Investment Management.

Manulife, Manulife Investment Management, the Stylized M Design, and Manulife Investment Management & Stylized M Design are trademarks of The Manufacturers Life Insurance Company and are used by it, and by its affiliates under license.

3249290

Macan Nia:

Welcome back to Investments Unplugged. I'm Macan Nia, co-chief investment strategist at Manulife. And as always, I'm joined here with my partner in crime. Kevin Headland.

Kevin Headland:

How's it going, Macan

Macan Nia:

Not bad. How are things with you?

Kevin Headland:

What's too bad? Weather's getting colder. I don't like it. I want the summer warmth again.

Macan Nia:

Yeah, well we've got a long way until that happens. So this is Canada, so should be used to it by now. But we also thought that we used to do this back in the day, we would have a segment called What You Need to Know, and we thought we would bring it back because it was a popular segment. We've heard from you, the audience and you'd like us to bring it back. And really what you need to know is just something that is really maybe not market specific or data specific in a nutshell. It's kind of fun and to talk about it quickly. And we thought that we would start this one with a what you need to know, and it revolves around really November and November is financial literacy month, which I think is one of the most underappreciated recognition months of the year.

Kevin will laugh when I say this, for those of you that know me well, I'm a little bit obsessive when it comes to personal finances. I think it's extremely important, and my wife and I have always struggled. How do we teach that to our two young girls? How do you teach them the value of a dollar? What does that even mean? And I came across an interview with a billionaire last year I think it was, who was struggling with this notion and he said, listen, my kids are kids of billionaires, they're always going to be spoiled, but I just wanted to do something that they would get maybe a semblance of the value of money. And he said, I came across this method, which has worked at the margin. And what it was was basically every week he would give them a sum of money and I'm just going to use round numbers, $5.

And of that $5, $1 the kids would have to put into savings, $1 they'd have to put into charity where at the end of the year they would choose a charity of their choice to donate that money to. And then $3 went into savings and the whole notion was to try to teach them the value of a dollar. And so we're coming to the end of our first year doing it with our 7-year-old. And the expected surprises have happened, but also some unexpected ones. So one for me was, Kev, you're going through this with your kids, is how do you humanize math in terms of the concepts of division? Multiply, adding, subtracting. And we found with her, she's thinking a lot more, okay, if I have X dollars, how many of this can I buy? Okay, if I, there's three of these and it costs this much, how much does it cost?

So not to make say it made Matt fun for her, but it humanized it to something that was important to her. That was one big learning. Another big learning is the whole concept of value of money to her children of that age or young age. I was joking about it with you, Kev, to her a bottle or a bottle, a pack of nerds has the same value as a car and going through, okay, well this costs this much. And then it introduced other things. Okay, well why does this cost that much more than this one? How come this car costs more than that car? And it spurred on a lot of questions. Many times, a lot of why's. I've been joking with you Kev, how at moments in our lives, me, my wife want to strangle ourselves because it's why, why, why, why? But it allowed her to better understand the financial world around her and also entrepreneurialism.

We thought she realized, okay, well this money's not enough for what I want. She got a taste of freedom, Kev, I have this money, I can go to the convenience store. I don't need mom and dad's money. And then her money ran out and she needed to make more money. So she became a little bit on many failed ventures. She had one successful one. It was basically rainbow Looms, right? You have a young daughter too. And she made them selling them in our front lawn. So the concept of oh, how much at first cap she wanted to charge 20 bucks per rainbow loom. And we're like, you think someone's going to buy a friendship basis for $20? So that whole concept of not so much supply and demand but target points. So what you need to know is financial literacy months. I think it's very important to make sure that our kids have a good relationship with money. So not so much that the money's controlling them, but they can control their money. So I thought that's something interesting to share that we have found success. So I know you something very similar with your kids.

Kevin Headland:

Yeah, I think it's so important. You hear a lot about the high school starting to look at incorporating financial literacy classes and it's so important in budgeting. I was part of a great program where we went and taught grade eight kids for one day and taught about life skills and budgeting and the reality and they think they can get a job and it will help them buy a Lamborghini and a mansion. And you quickly explain the realities of life and what it really means. But with our kids when they're even younger than that, I'm talking three years old, four years old, we instituted this idea of marbles and they had to jar each of marbles and it was rewarding to behavior. So they'd get X marbles for doing something or behaving or whatnot, and then they can cash in marbles for whatever they wanted. And one time myself and my son were at Toys R us and he wanted to spend some birthday money and the toy he wanted was more expensive than the money he had.

So instead of just giving it to him, I negotiate with him. I said, well, will you give me 10 marbles for the extra $15 when we get home? And he's like, yep, sure, no problem. And I did that. I paid the extra when we got home, he gave me the marble. So he cashed in and he knew that his marble allowance went down. He used it, right? He's understanding that this day, of course these days, of course he's much older, he is 11 now, he has birthday money and he is on Xbox. And he sees a game come up and he's like, new issue or a skin or whatever they spend money on, can I get that? I'm like, sure, go your piggy bank. Take the money out. If it's 10 bucks, you made me the $10 and I'll buy it for you. So he's understanding that. I said, but understand you really want it. You're not going to be able to get every one, right? And so I think it's really important to understand that and especially at an early age. So kudos to you. Great to see that Ruby is an entrepreneurial spirit and getting on the front lawn. I am glad to hear that the cops didn't shut her down. As you hear a lot of those happening with lemonade stands and whatnot, having licenses. Have you ever heard

Macan Nia:

That? Are you being serious or are you

Kevin Headland:

Joking? I'm dead serious. Yeah, it's sad that I've seen stories about lemonade stems being shut down. Oh my goodness. It's unreal. But yeah, you hear hears some good stories and some bad stories, but yeah, I've heard that as well. But it's nice to see. I think it's important and I think that hopefully our education system looks at putting that in more of a standard in high schools.

Macan Nia:

Yeah, it's absolutely, I think it's critical. But let's move on. So that's our what you need to know for this message now or this message, this podcast. So let's move on to what's happening in market. So we are recording this podcast on November 14th. Today we had CPI data, both core headline that came in below Expectations and markets, sorry,

Kevin Headland:

Out of the us, US

Macan Nia:

CBI, out of the us. Yeah, out of the us. And markets have ripped higher both equities and bonds. So let's check. As of right now, I think the s and p is up 2%, the small caps in the US, up 5%. When you're looking at the, basically the yield curve, you have yields across the spectrum falling. So the 30 year at this moment down 12 beeps, what's the 10 year down? 10 years down, almost 19 beeps at four and a half. And we posted something on LinkedIn where we looked at what was driving not only bond performance, but equity performance really over this past six months. And there's a direct relationship between that and yields. When you look at multiples, it's being driven by where interest rates are. So that is likely to continue going into the new year where equity markets and bond market performance is going to be driven by yields, and yields are going to be driven on inflation and what central banks are doing.

You're seeing a flavor of it now that yields are coming, inflation's coming down. So yields expectations are that they're going to trend lower. We are getting earlier signs. So I know remember Kev, our first theme for back at school was prepare for near term volatility amidst uncertainty. We're seeing that unfold today. And it seems like our second theme in terms of bonds is finally coming to fruition. Finally, hopefully we're going from phase one to phase two, and that phase two is adding to duration at the margin in expectations of the global economy slowing down, yields falling. And we're seeing signs of that. Kev, in terms of the consumer in the US in Canada, in terms of their slowdown in their spending.

Kevin Headland:

I just want to go back to the first theme of uncertainty, sorry, volatility, immense uncertainty. And we were talking about this late August, we published it in early September, and this notion of the benefit that yields are providing equities today is actually an opposite reaction to what's been happening since almost mid July, which was the peak in equity markets that the 10 year move from roughly call it three seventy five all the way to 5% by mid-October. And of course what you saw is equities pulling off from those elevated levels. And really it's because the opposite happens, right? Yields go up, the costs for the companies are much greater if their growthier companies, the interest rates that we're using for valuation is increasing when you're looking at discounted cashflow rates. So you're starting to see some benefit now, and this is kind of a normalization now, if the tenure continues to fall, but more on fears of economic weakness and maybe we go from a soft line scenario to recession, you're probably going to see continued choppiness.

And I think when we say volatility, we don't mean material volatility bear market scenario, but there's still some uncertainty there. And we still need to be very specific in the equities we own and want to own the quality businesses in this uncertain period where perhaps earnings continue to be weak to slow. So that's important there. Now when you go to the second phase or second theme, excuse me, of our three themed outlook, duration is your friend. And we've been saying this and it's been frustrating. We know it's frustrating this year, especially on the back of last year, if we were doing this podcast this same time last year or even we asked advisors, what are the chances the Federal Reserve goes to 5.5%? What are the chances the tenure yield hits 5% very low probability. We thought 2023 was going to be a very strong year for fixed income.

It hasn't played that way yet. And we've kept on saying that we're not necessarily we're wrong, we're probably early. And I think you're starting to see perhaps that play to fruition. And one of the things we also were talking about is this idea of the markets being priced for perfection and any changes one way or the other could create some movements. And right now, as you said, yeah, inflation came out. Listen, the inflation data was not great, but it was better than expected and not worse than expected. And therefore the market's rallying positively on that because I think some of the yield moves over the last month or so was on the back of this expectation that things actually were worse than perhaps expected and therefore was already front running and repricing that in. And now you're seeing this kind of normalization of repricing of both equities and fixed income.

Macan Nia:

But there are, and I like how you phrased that is the bond opportunity today, why it's attractive is you don't necessarily need a recession, you just need a slowdown. And you can really likely get those type of above average returns in bonds. In our view, the reason that the recession or material slowdown has been slow to really evolved this year is the health of the consumer savings rates were high, individuals had excess savings and they had low limits on their credit cards. And fast forward to November and those two areas of strength appear to be tapped out. You have seen savings rates go down from 25% of disposable income to I think they're below their long-term averages of seven. I think they're around like four or 5% today, whether it's Canada or the us. Credit card balances are at multi, I know in the US it's a multi-decade high.

In Canada it's multi-year high, I think it's 10 plus years. And you've seen Americans use basically 153. So the Federal Reserve came out and they've used basically 153 or billion dollars. Imagine a hundred, three fifty, a hundred and fifty 3 billion. There you go. maan over the last 12 months. And so it seems that the consumer's been tapped out. This earnings you're seeing a lot. The mention of top-down consumer mention of anything with the consumer being exhausted is at all time records. I think moving forward, the odds of a slow down that will benefit yields to the downside has increased compared to what it was even three to four months ago.

Kevin Headland:

Yeah, we talked a lot about this in our previous podcast about the consumer and the recession likelihood and the slowdown and as you said, the data just came out the third quarter of the year, year over year, 153 billion increase in credit card debt. And that's material. I think that is a record high for Yeah, not the

Macan Nia:

Them before Christmas.

Kevin Headland:

Yeah, maybe they're paying before Christmas, maybe they're front running it, but it's surprising. We know that delinquency rates are starting to pick up slightly. We're almost seeing this narrative again of this weaker economic data and we've often try to characterize everything that we look at every data point. It doesn't matter what it is, it's all about the balance of risks. Are things getting better or worse? When we look at the data and we say things are actually not getting better, they're probably getting worse or at least only flatlining, which means they're not growing, which is not a good thing either. Then it doesn't matter if you get a recession or not. But in a weaker economic data environment, yields tend to fall. The 10 year treasury yield tends to fall over history by about a third during recessions. So if you think about that at 5% levels, let's say we're just simple numbers, we start 5%, you're looking at roughly 1.6% off that high during recessions.

So when you think about that and you think of duration math, it becomes really attractive. And one of the things that we've been looking at our performance manage has been looking at is again, this notion of bounce of risks with their investments. And equity managers do it all the time. They look at, okay, what's my upside downside? What's my worst case scenario? What's my best case scenario? What's my base case scenario? Well, fixing a managers do the same thing, but perhaps you don't hear about it enough. So one of our fixing income portfolio managers was talking to recently said, Kev, look at the 20 year US treasury yield and we can actually do scenario analysis and look at the upside downside risk. So Macan, if you took the 20 year treasury yield and invested as of today, it was actually better even a week ago. But let's say just as of today, going one year forward, if the 20 year treasury yield increases by 50 basis points, right, that's negative to the return, the toll return is negative 1%. That's expected return. If the 20 year treasury yield falls 50 basis points from here. So falls

Macan Nia:

Maybe walk through. I think we're assuming that everyone on the call understands how the bond math work. So very simplistically explain that.

Kevin Headland:

Yeah. So talking about duration math, so essentially the idea that as yields fall depending on the duration of the bond, that's a sensitivity. So round numbers, look at the 10 year treasury yield. The 10 year treasury yield tends to have a duration of roughly eight years. So if the yield goes up by 1% or a hundred basis points, that is an 8% decrease in price one times eight. If the treasury yield falls by 1%, one times eight is an increase in price plus 8%. So understanding that bonds or prices and interest rates move inverse or in opposite directions, that's important. So when bond yields fall, that's actually a positive, which is why bonds were negative last year because when yields jumped so fast and so high, it really eroded the price of their overall bond. So going back to, excuse me, the asymmetry of bonds right now, it's the upside downside.

The upside is much greater than the downside. So back to the 20 year treasury yield, if yields jumped by 50 basis points over the next one year, the return in that one year would be minus 1%. If bonds yields fall by 50 base points, that's not the federal reserve that is specifically the yield of the 10 year or the 20 year treasury yield. If the yields fall by 50 base points, it's a pause return of just over 11%. So when you look at your upside downside risk, you're looking at 11 to one over a week ago when I did this math, it was closer to 20 to one because it was 11% upside and 0.5% downside, but yields have already fallen already, so you've missed out on some of the potential gains. So those are really good odds, 20 to one, 11 to one, still a really good asymmetrical risk in bonds, meaning it's worth it to take on a bit of duration because of the potential upside relative to the risk you might be facing on the downside. And if we believe that the economy is going to continue to slow, yields are going to continue to move to some degree to the downside, might not be linear, but we think the bounce of risks or the least amount of risk or least amount of, what did you say? Macan. I always say the, I know I'm trying to remember this, the statement you said it's like, anyway,

Macan Nia:

I say lot

Kevin Headland:

Was very be, I know it's pretty memorable. Anyway, we believe that yield's going to be falling and therefore we think again, it's perhaps time to be flexible and start to embrace duration moving slowly from phase one, invest grade bonds and embrace yields and starting to expand duration to your second phase.

Macan Nia:

And I think that those are all very good. None of us have a crystal ball. I think we've said it multiple times on this podcast, investing is a probability based decision and given where we are today, when you factor in the upside versus downside, when you factor in our rates at these levels more likely to continue to slow down the economy or will they pick it up And what will happen? And I think the risks are to the upside for bonds and one concern from investors is, well how about if that dynamic between equities and bonds is broken, right? The one before where equity sell off bonds rally and we did not see that during covid because of the inflation dynamic. How about if that continues for whatever reason? I think you are seeing it early in really kind of that October, November today that we're likely to go back to that old dynamic where equity sell off because there's a fear of the economy slowing down, earnings will be impacted. Central banks' odds of cutting rates will improve and then bonds rallying as a result so much more. I always did feel confident in reverting back to that dynamic that the covid dynamic between equity and bonds was unlikely to persist for a long period of time.

Kevin Headland:

It definitely has been some paradigm shifts and you to say that this time is different, but things are different as a result of covid. It is the first time in history that the government's increased money supply by that much and essentially cut checks to consumers and we're shutting our houses and we spent money. Things have changed. Definitely aspects of things have changed, but over time you tend to get a version to the mean or long-term. Tenants of investments or financial systems tend to come back together and that's the key. I think one of the ones that we post on LinkedIn recently is a chart that you created with regards to the long-term outperformance of equities versus bonds, but the lower probabilities of equities outperforming bonds in the near term. And of course we know that if I could invest today and close my eyes for 20 years, the probabilities are the equities will far outperform my fixed income. But we all know because we're human, even us in the investment industry can't close our eyes for 20 years on our investments and we see the short term and we need bonds to smooth that ride for investors over the short term when equities don't perform in line with expectations or when there's short-term bumps in the night where bonds should be there to protect on the downside.

Macan Nia:

Yeah, let's talk to that chart. I think it's a perfect example of where something looks good on paper, but in reality in practice it may not pan out that way. I laugh, I make the joke. It's very similar to the leafs. Looks look good on paper and you might disagree even looking good on paper, but generally they have looked good on paper, but in reality obviously they disappoint. Now the chart you're referring to, Kev, it's basically what we do is, and if you are part of LinkedIn and we are not a part of your network, please out to us, we'd love to be a part of your network. We really do find LinkedIn a great way of getting our information out in a quick concise manner. So basically the chart shows the odds of bonds outperforming equities based on any holding period. The holding periods that we've highlighted is one year, three year, five year 7, 10, 15 and 20.

And what it says is over any 15 year period, and I believe this data goes back 120 years, the odds of bonds outperforming stocks over any 15 year period is basically less than 10%. So in reality, should we own any bonds? If you truly have, I'm using air quotations, you can't see it and advisors love it. I laugh what I say. Our clients say they have a long-term time horizon until volatility hits. And that 10, 15 year time horizon becomes one year, if that's even lucky, it's probably week to week but say 10 to 15 days. But in reality, yeah, you should probably own much, much more equities than bonds in your asset allocation. But in reality, over short periods of times, bonds react or that bond equity dynamic react to economic data and there are periods, so over any one year period in that same 120 years, bonds have outperformed stocks roughly 37% of the time.

So yeah, in the short term there is a case for bonds in the long run there. So you might say, okay, well my clients have a time horizon, so I shouldn't own any bonds. But we know that's not true in reality. And this is not taking account a client experience, right? We were talking about me and you, Kev is a client more likely to navigate volatility, which is going to always be the case if they're 60 40 or a hundred percent equity, 0% bonds. And take away the covid example pre covid. Of course that balance investor is much more likely to navigate a sell off. And we know what do investors do during the bottoms or the troughs? Are they buying as they should? No, all the industry data shows you there's massive amount of outflows out of equities during those very same time that they should be buying.

And they're more likely to not sell if they're 60 40 because their bonds have provided that counterbalance to those equities. And I would even suggest too is when your bonds rally, it gives you, ammunition is the wrong word, it gives you dry powder to deploy into equities at a better valuation. So I thought it was a really interesting thing. I first saw it and I said to myself, why do we even own bonds? I have a long-term time horizon. And through our experiences, Kev, with advisors over the past 15 years, you take off your rational hat and you put, I don't know if it's an irrational hat, but a more pragmatic hat maybe is the right word. Because clients don't react to that. They're prisoners of their emotion. Yeah,

Kevin Headland:

Exactly. They're emotional. And we know that you look at behavioral finance and there is a bias against recency. We know that investors feel losses two times more than they reward or celebrate wins. And over time, again, last year and a half, two years is an abnormality. It's not normal the way the bonds reacted, but over long term, the bond portion of an asset allocation portfolio helps mitigate a downside. And the way you win over long term is compounding the fact that if you lose less than the downside, you don't need as much on the upside to grow your money. And that's key I think. And I think a lot of us have lost context or lost our relationship with the idea of compounding wealth and the fact that you don't need 20% returns every year, but you need to grow on a compound basis. The rule of 72 and every 7.2 years with a 10% annualized return, your money will double or any combination of 72, your money will double. And I think it's important to bring back that notion and say, we don't need these outsized returns. We don't need to try and hit home runs. Singles and doubles will win the game long term in investments. And I think that's important to just realize and don't lose faith in fixed income. A lot of investors become disenfranchised because it hasn't worked out. But again, there's a mathematical calculation in fixed income, which is very comforting to me, I would say as a very rational, pragmatic person. Well,

Macan Nia:

It depends on the topic, but anyway,

Kevin Headland:

Yeah, I guess, yeah, true. I do have some emotion. I'm not a robot, but just knowing that if I buy something at $90 and I know it's going to go to a hundred dollars at a certain date with a very high conviction, pay me an interest while I'm waiting. I know my expected return, I can calculate that. It's mathematical. There's no real assumptions there as long as I get paid back in maturity. So there's a comfort in bonds, it's just sometimes you have to be more patient. And I think patience is key. If today is an indication, if this continues, again, it'll be showing that patience has paid off for those that are investing in fixed income.

Macan Nia:

For anyone that wants to see Kevin be emotional and irrational, just go through an airport line security line with him. You'll see those I've never seen, I've never seen Kev get so riled up in my life about useless things, but hey, everyone has their thing, right? So yeah, I think that's really well said, Kev. It's like we're waiting for this party to start in and it hasn't happened. And I think now is not the time to think that the party is not going to get started at all. If you believe that rates, listen, I'm a simple man. We live in a capitalistic society. Capitalism is based on credit, the availability of credit and how much it costs. And in this environment where both of those are, it becoming harder to get access to credit. And when you do it's expensive. Look at any of the, we call it the slu, but the senior loan officer surveys that are the us, it's obvious that credit is not as easy to get.

You are already on the personal side, the delinquencies. So those individuals, 30 days, 60 days, I think the other one is six months delinquencies. They've been increasing for the lower and middle class really. I think for instance, the halfway point of this year or middle beginning of this year, you're starting to see it very low levels, but starting to see it creep up in the upper class. So I think credit is a lifeblood of any economy and when you're taking out that lifeblood or not taking it out but reducing it and it's becoming more expensive, of course it's going to have an impact on the broader economy. And the interesting thing about the bond opportunity, as we've said, you don't even need that dreaded R award. You just need a slow down and you see yields fall. Look at today like just said that TLT or the 20 year, the etf, right, the T lts, the 20 year plus US treasury, it's up to 2%. Last time I checked with just yields being down 15 beeps. So we think that the party was a little slow to begin, but we don't think that that party has just been avoided and we're likely to see the real benefits of it over the next three to six months. Any other comments, Kev?

Kevin Headland:

No, I'm just again, finally happy perhaps that this party has started again, it might be short term, it's not necessarily going to last forever, but finally to see it play itself out is kind of nice. As I said, it's been frustrating to continue to say the exact same thing and not happen and eventually it's we're proven, right?

Macan Nia:

All we need is for the confirmation is for business week to come out or the economist to come out with something on the front page that says bonds are dead. And then we know we got the beginning of the next bull market. So I'll be looking carefully at that to get that final confirmation of our thesis. So I think that's a good place to pause. Kev, we are going to tape a podcast in a couple of weeks. We'll be joined by Francis Donald, our partner in crime on the macro side where Francis is going to share with us the team's five macro views for 2024. And then we'll also share our three main investment themes for that. Likely Don, we have a continuation of what we said in September, nuances of course, but we'll be sharing that on our next podcast that we should publish within the next three to four weeks.

But thank you for joining us. If you find this podcast of use, please rate us. It goes a long way in terms of introducing this podcast to other like-minded individuals like yourself. And if there's anything else that you would like us to cover that is important, feel free to reach out. We're examples of what you need to know. We had a listener, I used to like it when you guys did that, so he is like, yeah, let's bring it back. So again, if you have any feedback, we only want to hear the positive, keep the negative to yourself. Joking aside, joking, but thank you again for joining us. I'm Mal Nia

Kevin Headland:

And Kevin Helen.

Macan Nia:

Thanks for tuning in. Take care.

Kevin Headland:

Nice,

Speaker 3:

Nice and lively this time. I liked it.

Macan Nia:

Yeah, I always see Kevin, good time. You just walk at a fricking airport with geez. Oh Jesus'. Like, oh my God. I've never seen rage so much in my life at

Kevin Headland:

Airport. One thing I hate, one thing I hate is everywhere here. Everywhere. It's stupidity, should I say, or just lack of common sense. And people today are still freaking bringing liquids on the plane. My God, where have you been for the last 20 years? Yeah,

Speaker 3:

Seriously

Kevin Headland:

Murphy man. It's not freaking rocket science. Come

Speaker 3:

On. That bugs me too.

Macan Nia:

Yeah. What bug me made perhaps forgot that there was liquid in it.

Kevin Headland:

Again, stupidity, common sense coming from England. England everyone. No, not liquidity. Literally bringing jars of frigging cologne or fricking whatever. I'm like, guess what? You should wear cologne anyway because we're all over frigging smelling anyway,

Speaker 3:

Coming from England, there's one thing in English person knows how to do and it's stand in line. It's just very orderly and perfect. And I come here and I'm like, what is going on in this store? People are just standing everywhere. It drives me absolutely insane. I can't handle it.

Kevin Headland:

How about the people? Everything drives you nuts. You got these nice somewhat organized lines for boarding the plane zone, one big sign, zone two, zone three plus people standing in line zone one, we start boarding and this person's not moving like, oh, you zone one. No, I'm zone five. Why the hell are you standing in zone one then?

Macan Nia:

Yeah, you also need to be mindful that not everyone travels as much as we do.

Kevin Headland:

There's signs mark you get at, right?

Macan Nia:

You read all the signs everywhere in the world. Listen, I get what you're saying, but I just find it very comical how, for me, it's always old people. I'm like, oh, Mako, you can't be mad at this person because they're moving out old person pace. Yeah,

Kevin Headland:

Really? It's not their fault, geez.

Macan Nia:

It's like, come on, old man, get going.

Kevin Headland:

Or the people that want all the way across five people want to get across and there's only room for five people to walk across a hallway. It's like, no, get on my way.

Speaker 3:

Yeah, no, I'll clear security in 30 seconds flat. I am just very efficient when it comes to that stuff.

Kevin Headland:

Get used to it. We're great. The best part now I find is especially in Europe, you notice this Pete, and we're starting seeing some airports in Canada, the separate little booths to take your stuff off so you can jump ahead of the slow people. But some airports are still living in the sixties and haven't adopted that and you're just like, oh my God. I was in Vancouver this past week and it was like this one of the biggest airports in Canada and you still haven't adopted this. And I was in the priority gate. The priority gate. You're still waiting. I'm like, people, how do you get priority in the first place if you're not traveling a lot? You should know better.

Speaker 3:

Yeah, exactly.

Kevin Headland:

Also, I hate rushing too, and I hate people who were a little too, let's say fair, but rushing. So I like to make sure that I'm not was talking about one time we were in Ireland and we had to book our Ryanair, you have to do something with your luggage ahead of time. You can't check it at the airport. You got to do ahead of time. And I know that and yeah, there's

Speaker 3:

Ryanair, the kings of efficiency. I don't even think they stop the plane. I think they load you wireless's, taxiing under the runway. They get charged for how long they're in the gate or whatever. They're just fast.

Kevin Headland:

It's great. They should be alerting that, right? Oh yeah. That's why they can charge a cheap fare.

Speaker 3:

Yeah, exactly.

Kevin Headland:

They don't deal with any crap, right?

Speaker 3:

Yeah, for sure.

Kevin Headland:

My flight was delayed last week. The bridge was stuck for the incoming plane at Pearson most expensive airport to land in the world. And the simple things like a bridge doesn't work.

Speaker 3:

We had that when we landed coming back from England, they couldn't get it to work. It's the same why

Kevin Headland:

We spend all this money to land at this airport if it doesn't work.

Speaker 3:

Yeah, yeah. It's crazy. It is expensive.

Kevin Headland:

It's like paying extra money for crap makes no sense. Brutal. So I do get emotional about certain things and the fact funny, funny stuff. That's stuff that bothers me. It shouldn't bother me at all, which is really the worst. Right.

Macan Nia:

Okay. Well on that lovely note, okay, I'll upload this, Kev, I'll record the intro.

Kevin Headland:

Perfect.

Macan Nia:

And we'll get it to you.

Speaker 3:

Sounds good.

Macan Nia:

Okay, cool. Thanks Pete. As usual, all

Speaker 3:

Guys. Cheers.

Kevin Headland:

Thanks. Talk soon. Bye.

Speaker 3:

Bye.

Kevin Headland, CIM

Kevin Headland, CIM, 

Co-Chief Investment Strategist

Manulife Investment Management

Read bio
Macan Nia, CFA

Macan Nia, CFA, 

Co-Chief Investment Strategist

Manulife Investment Management

Read bio