Episode 95
Markets, Globalisation and Diversification: Are Investors Looking in the Wrong Place?
Richard and Brian are back for this week’s episode of Macro Aggressions. This episode breaks down the “Russian doll” problem sitting inside mega-cap tech earnings, why portfolio diversification may matter more now than it has in fifteen years, and what’s happening beneath the surface of an S&P 500 that keeps hitting new highs.
Richard Taylor of Plan First Wealth and Brian Dunhill of Dunhill Financial unpack Burry’s concerns around private company valuations (SpaceX, Anthropic, OpenAI) sitting inside public company earnings, changes to GPU depreciation accounting that are quietly inflating profits, and why small cap stocks, emerging markets, and international stocks are starting to outperform after over a decade of US large-cap dominance. This is practical stock market advice for anyone wondering if their portfolio is over-concentrated in seven companies and whether now is the moment to start rebalancing.
They also cover the diverging picture between the stock market and the real economy: sticky 4.2% inflation, weakening wage growth, and job losses under the current administration, set against a market still riding high on AI enthusiasm and a growing conversation around a potential market bubble.
The conversation turns geopolitical, covering Europe’s active effort to decouple from American tech infrastructure, why universities across Europe are pushing to get off US servers, and what that could mean long term for US-Europe relations and international wealth strategies. Richard and Brian also dig into the UK’s ongoing political instability, the lasting economic impact of Brexit, and whether a new Labour leadership shift could change the UK’s trajectory.
Whether you’re watching the Magnificent Seven dominate your portfolio, thinking about how UK politics and Brexit affect cross-border wealth, or just want a grounded read on where markets stand versus the economy, this episode covers the full picture, not just the headlines.
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Expat Wealth is supported by Plan First Wealth. Plan First Wealth is a Registered Investment Advisor serving fellow expatriates and immigrants living across the US on matters such as retirement planning, investment management, tax planning and non-US asset management.
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Expat Wealth is affiliated with Plan First Wealth LLC, an SEC registered investment advisor. The views and opinions expressed in this program are those of the speakers and do not necessarily reflect the views or positions of Plan First Wealth.
Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Plan First Wealth does not provide any tax and/or legal advice and strongly recommends that listeners seek their own advice in these areas.
ABOUT RICHARD:
Richard Taylor is a British expat, dual citizen (UK & US). Originally from Bolton, he now lives in Greenwich, CT, where Plan First Wealth has its head office.
As the firm’s leader, Richard launched Taylor & Taylor, now Plan First Wealth, and continues to fuel the firm’s growth. Richard is a Chartered Financial Planner (UK – CII) in addition to holding the IMC (CFA UK) and Series 65 (US – FINRA).
Connect with Richard on LinkedIn
TRANSCRIPT:
Brian Dunhill: [00:00:00 – 00:00:06]
You know, we’ve, we’ve lost 2 million jobs under Trump, and that is not a good place to be in any way, shape or form.
Richard Taylor: [00:00:06 – 00:00:31]
Dude, my wife and I were literally just saying this World Cup, I had low expectations. Honestly, I think it’s been wonderful. I think the, the, the, the stadiums are fantastic. You know, I actually thought because they’re all set up for American football, they’re out of town, it wouldn’t work. But the stadiums are fantastic. But what I really enjoyed is I really enjoyed, like watching people come to America and fall in love with it. And I needed that.
Brian Dunhill: [00:00:31 – 00:00:55]
Honestly, when, with all the buy recommendations coming out with SpaceX, Raymond James came out with an $800 price target. You know, you just have to think these guys are, Raymond James are getting a little bit too much sun. It’s going to their brains when, when we talk about the east, they are, they are actually building those relationships that they haven’t in the past. Sadly, that’s China at the forefront instead of the US at the forefront.
Richard Taylor: [00:00:57 – 00:02:09]
Welcome to Expat Wealth, a Plan first wealth podcast dedicated to helping ambitious expatriates in America and Americans overseas thrive. I’m your host, Richard Taylor, and Plan first wealth is the business I founded and run today. And we work with successful expatriates, immigrants and internationally minded Americans to make the most of their opportunity and avoid the expat landmines. First, a quick disclaimer. While Plan First Wealth LLC is an SEC registered Investment Advisor, the views and opinions expressed addressed in this program are those of the speakers and do not necessarily reflect the views and positions of Plan First Wealth. Information presented is for educational purposes only. Now, if you aren’t already receiving our emails, please go to our website, www.planfirstwealth.com and sign up there. It’s free and you’ll be notified every time we drop a new episode. And so much more. Okay, let’s get back to this week’s show. Welcome back to another episode of Macro Aggressions, where my friend Brian Dunhill of Dunhill Financial fame and myself, Richard Taylor of Plan first wealth, get together, dissect what’s going on in the world, fix all the world’s problems. Job done, right? It’s as simple as that, isn’t it? We have all the answers.
Brian Dunhill: [00:02:09 – 00:02:13]
I thought we were changing. I thought we were going to do it this time as just a full football podcast.
Richard Taylor: [00:02:13 – 00:02:14]
Well, obviously, yes.
Brian Dunhill: [00:02:14 – 00:02:19]
Now America is football mad. That’s all we care about. No more stock market, just football.
Richard Taylor: [00:02:19 – 00:02:25]
No. Yeah, but obviously. But as middle aged White men. We have all the answers, right? So, you know, don’t confine it just to football.
Brian Dunhill: [00:02:26 – 00:02:29]
Well, you’re English. You got to just chant it’s coming home for the next hour, right?
Richard Taylor: [00:02:29 – 00:02:30]
Oh, God, yeah.
Brian Dunhill: [00:02:30 – 00:02:30]
Yeah.
Richard Taylor: [00:02:30 – 00:02:41]
Oh. The whipsaw of our emotions from Croatia is coming home to the next two matches, which were a horror show, one of which I went to, by the way. And then.
Brian Dunhill: [00:02:41 – 00:02:41]
Really?
Richard Taylor: [00:02:41 – 00:02:54]
Which one did you go to? I went to Panama because it’s just down the road. It’s an hour from me. So I took my seven year old, my first, my first England match, my first World cup match, also his first England match in his first World cup at age 7. That’s pretty cool.
Brian Dunhill: [00:02:54 – 00:02:55]
Brilliant.
Richard Taylor: [00:02:55 – 00:03:17]
I mean, we were out in the nosebleeds. We were six, we were six back from the top row. So we were. I had altitude sickness up there. It is high, but it was awesome. It was magnificent. Football wasn’t great, although we won. But then after, after our showing in Mexico, which was just unreal. I’ve never seen a performance like that from England. It was spectacular.
Brian Dunhill: [00:03:17 – 00:03:29]
You know, we’ve had some great games, we’ve had a great tournament, but I think the best part of the entire World cup has been, for the most part, Donald Trump has kept his mouth shut until Monday.
Richard Taylor: [00:03:29 – 00:03:57]
Dude, my wife and I were literally just saying this World Cup, I had low expectations, honestly. And it’s been my, I think it’s been wonderful. I think the, the, the, the stadiums are fantastic. You know, I actually thought, because they’re all set up for American football and they’re out of town, it wouldn’t work, but the stadiums are fantastic. But what I really enjoyed is I really enjoyed, like, watching people come to America and fall in love with it. And I needed that, honestly.
Brian Dunhill: [00:03:57 – 00:03:58]
Absolutely.
Richard Taylor: [00:03:59 – 00:04:14]
And just before this whole thing kicked off that we’re about to talk about, my wife and I were just saying, like, how great it is to have this, like this new perspective, this narrative and how all the political stuff, all that stuff that’s just like, weighed us down for the last 18 months had just faded into the background.
Brian Dunhill: [00:04:14 – 00:04:19]
And then it is the American spirit and then what happens?
Richard Taylor: [00:04:20 – 00:04:23]
He just could not, he could not keep out of it.
Brian Dunhill: [00:04:23 – 00:04:27]
What’s a red card anyways? Richard, you have to explain this to us American.
Richard Taylor: [00:04:28 – 00:04:44]
Does it matter? Because according to Trump, he doesn’t know what a red card is, but he’s still really good at telling you it wasn’t a foul. I don’t know the rules, but because I am so, so good at everything. I can still tell it wasn’t a foul, it wasn’t a red card. Therefore I can. Oh, geez. Just give me a break.
Brian Dunhill: [00:04:44 – 00:04:50]
But Richard, doesn’t he just look like an athlete? I mean, he looks like he knows everything about sports, doesn’t he?
Richard Taylor: [00:04:51 – 00:05:04]
Yeah, apparently so. Yeah. Just. Yeah, just took himself in there and took the narrative and it’s a stain, honestly.
Brian Dunhill: [00:05:04 – 00:05:19]
Yeah. But for FIFA’s vantage point, if all of a sudden that takes away the conversation from four quarters, because that was the entire conversation at the beginning of the World Cup. If they get to keep 4/4 new profit center for the rest of the World cup or anything that FIFA touches.
Richard Taylor: [00:05:19 – 00:05:20]
Yeah.
Brian Dunhill: [00:05:20 – 00:05:31]
And, well, we had a reprieve from Donald Trump doing stupid stuff in the rest of the world for a while until all of a sudden the US sadly gets eliminated. And what does he do?
Richard Taylor: [00:05:33 – 00:05:36]
We shouldn’t laugh. We really shouldn’t laugh. It’s not funny.
Brian Dunhill: [00:05:36 – 00:05:44]
You know, the easiest Google to make about American football is the history of American football. Have you ever heard of the miracle on grass?
Richard Taylor: [00:05:44 – 00:05:45]
No.
Brian Dunhill: [00:05:45 – 00:06:09]
Okay. The miracle on grass was back in the 1950s, America actually beat England in the World Cup. And my favorite part about the whole thing was that the entire English press thought that it was a misprint that America beat England 1 nothing. So they reported it over here as England beat America 10 to 1. Because they thought they just left off a 1. No.
Richard Taylor: [00:06:10 – 00:06:12]
That’s incredible. What’s it called? Miracle on the grass.
Brian Dunhill: [00:06:13 – 00:06:15]
Miracle on grass. Look it up. It’s brilliant.
Richard Taylor: [00:06:16 – 00:06:43]
Very good. All right, so let’s get into it. World cup aside. What are we. What are we here to talk about? So we were chatting before. We’re going to talk about. Our old friend Michael Burry has reappeared back in the news. And is it, you know, the savant of 2008, who since then has been not a savant, like, in my opinion. What’s. What’s happening now?
Brian Dunhill: [00:06:44 – 00:08:14]
Well, Michael’s. He’s looking through some of the different companies in, especially in the Mag 7. And the Mag 7 have become such an interest for us because they’ve become such a big part of the S&P 500. And he’s actually digging into what their earnings growth looks like. And most of these companies are establishing what, you know, hundreds of billions of dollars of earnings. And so it becomes like an economy. And what’s interesting is two placements that he identifies. One of them is that a lot of their earnings growth is actually coming from their ownership in some private companies, especially a few that we’ve discussed. Before SpaceX, Anthropic and OpenAI. And if these three companies are becoming such a big part of their earnings, it’s so important for the Mag 7 to actually push that forward and have successful IPOs. Which starts to make sense why our discussion last time was the potential insertion in the indexes early on. Now, that part doesn’t concern me as much because it’s a question of what is the value of these underlying companies. I don’t know if you saw this morning when with all the, the buy recommendations coming out with SpaceX, Raymond James came out with an 800 price target.
Richard Taylor: [00:08:14 – 00:08:15]
$800?
Brian Dunhill: [00:08:16 – 00:08:48]
Yes, $800. And you know, you just have to think these guys are, Raymond James are getting a little bit too much sun. It’s going to their brains. I mean, I can see 200, I can see 300 on these magical effects, but $800 just seems a little too far out there. That being said, you’re buying into potentially the magic of Elon Musk or his ability to spin things in ways. It is a meme stock and it will be a meme stock for a while.
Richard Taylor: [00:08:48 – 00:08:49]
100%.
Brian Dunhill: [00:08:49 – 00:09:51]
It doesn’t have the revenue substantiating it. That’s one of those aspects that, okay, maybe this becomes an ability for some of these companies to offload some of these large positions that have become 30 to 40% of some of their earnings growth. The one that really concerns me is the accounting. Changes in accounting. We can’t be surprised that when we have a marketplace that’s talking all about deregulation, the accounting of depreciation of assets for many of these companies is becoming a little fuzzy. And it’s becoming a little fuzzy because they used to depreciate their GPUs. The server farms that these companies have are just astronomically huge by over three to four years. And now they’re starting to actually depreciate them over seven years. That’s a huge savings for these companies and a huge increase to their profits. But the question becomes, can these servers last for seven years? How long you had your computer, Richard?
Richard Taylor: [00:09:51 – 00:10:09]
Two. I have massive problems with it. I’m probably gonna have to wipe. No joke, I’m probably gonna have to wipe it. And after this call, like, it’s just, it’s just stopped working in the last two days. I’ve managed to, like, I spent all day yesterday on the phone with my IT providers. I managed to get it working for today, but tomorrow it’s probably not to be wiped from scratch to start again.
Brian Dunhill: [00:10:11 – 00:10:50]
Right there. You’re going to get a call from your accountant if you depreciated that over more. Richard, we need to have a conversation. There could be some reality you could play on both sides that, okay, some of these servers, could this be the model for say, something like OpenAI, that that’s how they’re powering the freemium models, or that’s how they’re powering some of these other aspects? Yes, but is some of it just manipulating accounting standards? Potentially. Whereas the reality probably someplace in between. So it’s, it’s a very interesting change in, in, in how some of these earnings come across.
Richard Taylor: [00:10:50 – 00:11:19]
So what, so what’s he saying? Is he coming out and saying like what he always says that this, this whole thing is built on sand and the earnings are not real. They’re private company valuations mixed with accounting sleight of hand, which is absolutely. There’s always that he’s not wrong. Right. But he’s, he’s been, he’s made a lot of calls since his, since 2008. He gets a lot of attention because of that film the Big Short. And he makes his calls, but they don’t always, you know, the world keeps.
Brian Dunhill: [00:11:19 – 00:12:18]
Going on, the world keeps spinning because these companies are still extremely profitable. You know, you’re not talking about all of their earnings. You’re. But you’re talking about substantial parts of the growth. So it does become the question of can they continue to substantiate that growth, especially if they spin off several of these factors, especially if they continue to have different regulatory issues across the world. I tend to think the key element to ensuring ourselves against a problem like this is the old adage that diversification is the only privilege. It’s how do we keep ourselves from having the majority of our portfolio in seven stocks? So there’s not so many times in my life that I can say I think Uncle Warren is wrong. But when he says the Perfect portfolio is 90% S&P 510%. 10 Year T bills, I’m going 10 years too long. And the S&P 500 alone is not diversified.
Richard Taylor: [00:12:18 – 00:12:23]
I read that smaller company stocks were up 73% from April last year.
Brian Dunhill: [00:12:24 – 00:12:33]
Small caps are actually growing at an astronomical pace. And historically they’ve always done well in a recession. So it starts to make sense.
Richard Taylor: [00:12:33 – 00:12:37]
Wait, are you saying you bring up the R word? What are you saying there, lad?
Brian Dunhill: [00:12:38 – 00:12:48]
Well, I don’t think that this has been an economy so different from the stock market. The general economy hasn’t been all that attractive to the entire segment.
Richard Taylor: [00:12:48 – 00:13:22]
The economy Right. The, there is a real divergence right now between the market, which had a rip roaring Q2. I mean that was partly because it was kind of the lows of the Iran invasion, but a rip roaring Q2 and the economy, which is like the economy is kind of faltering a little bit. I think like inflation is still 4.2%. That is really high. Not, not an individual, an individual printer. 4.2 Is not high, but sustained. 4.2% Is really high. The payroll is weakening. The vibes are not great. People are feeling, people aren’t feeling great.
Brian Dunhill: [00:13:22 – 00:14:02]
I don’t think wage growth, like you said, it’s coming down. And when inflation is up and wage growth is going down, you’ve got a recipe for disaster. Especially under a government that we’re basically going to say we’re going to fix everything. We’ve lost 2 million jobs under Trump and that is not a good place to be in any way, shape or form. People are losing jobs when the baby boomers are still retiring. We keep talking about demographics. We’ve got until 2030 where they’re continuing to retire. We should be getting jobs galore across the board, but we’re losing them. That creates more problems than it does anything else.
Richard Taylor: [00:14:03 – 00:14:08]
Yeah. So first of all, just burry. What is burry saying?
Brian Dunhill: [00:14:08 – 00:14:20]
Is burry saying, Burry saying this is basically a Russian doll, that basically it’s something inside of a. Something inside of a. Something else. And therefore what’s. What are you actually buying inside of there?
Richard Taylor: [00:14:20 – 00:14:20]
Okay.
Brian Dunhill: [00:14:21 – 00:14:38]
And when one of the biggest owners of the biggest public companies that own SpaceX is Google. Are we getting a big part of our earnings just from a decent IPO price and therefore can they offload it before it implodes?
Richard Taylor: [00:14:38 – 00:15:03]
So, so, so is he. He’s saying this whole thing is kind of not built major weaknesses. We’re saying markets flying. Not just the U.S. there’s some, the smaller, not just large cap, smaller market, emerging international. But we’re seeing signs of weakness in the economy separate to that. And do you think we’re in for a, I mean, do you think we’re in for some trouble?
Brian Dunhill: [00:15:04 – 00:16:07]
I’ve been redistributing my portfolios, as you know. And when we look at, you know, if we start on a large cap value, I’m sorry, large cap spectrum first values outperformed growth for the first time in what, 15 years. This year I think large cap value is up 16% versus 10 on the large cap growth. There is definitely a swing back to that side. Small cap has outperformed emerging markets are killing it. They’re doing wonderful. And developed markets outside of the US are outperforming the US. The diversification has started in a big, big way. 10, 15 Years ago. Buy the S&P 500, forget about it. Now you want more diversification than just that. Because if one of those seven companies were to falter, it could be a huge disaster to the S&P 500. Don’t let it be a huge disaster to your portfolio.
Richard Taylor: [00:16:07 – 00:16:11]
I agree with you, but people have been saying that for 15 years.
Brian Dunhill: [00:16:11 – 00:16:24]
Sometimes it’s easier to hedge that position and be wrong than go out there and get your head knocked off for being right. I would rather have the diversification inside of my portfolio.
Richard Taylor: [00:16:24 – 00:17:21]
I would as well. Honestly, I would. I imagine this is good news for Dimensional. For those who don’t know, Dimensional are very successful and I think a fantastic fund manager, fun company. I mean they are a fund manager, they’re a fund company. And their whole thesis is tilting towards value over growth, smaller companies over large companies and highly profitable. And value and smaller hasn’t really worked for the last 15 years and now it’s coming back into its own. But you look at the wealth of data and it does very much support dimensionals. I have money invested in Dimensional. I truly believe in it. But it has been a more difficult 15 years for that thesis. I would argue that’s coming that now if you do believe in diversification, not of styles and sectors and geography, which I do, I’d argue that that has always been a worthwhile exercise and now perhaps even more so if we are coming to the end of this cycle in US large mega cap, if we.
Brian Dunhill: [00:17:21 – 00:18:06]
Are, I tend to think that the last years prove that we are. And typically these Trends will last 10 to 15 years. It is hard to actually attract the funds when you don’t have a strong dollar policy. So therefore money’s going to flood back to their regions. You take those aspects that have led towards certain sectors doing very, very well. We were talking about Spain Poland Poland being two of the top performers performers in Europe. Why are they two of the top performers in Europe? Because they have the least association with the United States. Their companies do the least amount of business with the United States and therefore any bumping of heads between those two regions is going to affect them the least of of any place else.
Richard Taylor: [00:18:06 – 00:19:03]
I read a 2 first part of a 2 parter from the Wall Street Journal today. It was a fascinating piece about Europe’s real commitment plan to decouple from America and how Hard that is because of how entwined we are. More how entwined Europe is with America because of, you know, you just simple things like using teams, you know, and Microsoft and where all the data and information is stored. But Europe is really working together with Mark Carney on how to decouple from America. And that is both sensible, I think, and also sad. And I think it has the potential to have seismic consequences. And it’s really very interesting to know what they are, is that you got to think that’d be bad for America long term. And I wonder, could it be good for, could it be good for Europe? Could it reinvigorate European private sector or not? I really. This is going to be an interesting one, how it plays out.
Brian Dunhill: [00:19:04 – 00:19:45]
We’ve seen how it’s worked for the defense sector in the last couple of months because you would have thought, okay, well, if all of a sudden NATO spending increases, they’re going to buy into what’s been around. No, basically the amount of investment throughout Europe has just grown exponentially. And the defense stocks in the States, well, they’re good, but not as much of a reward from that. When you talk about the teams aspect, you’ll remember last year there was the judges in the Hague that had their access removed on US Government grounds. The Hague, the international courts. Right.
Richard Taylor: [00:19:45 – 00:19:45]
I didn’t know that.
Brian Dunhill: [00:19:45 – 00:20:24]
And all of a sudden, yeah, I don’t think that was really pushed in the US that they were coming through on that. And all of a sudden you have universities throughout Europe. Universities. We’re not talking about the judges or anything else, the governments. We’re talking about universities basically stating we want to get off American servers or American access on those types of products. Well, the types of products that are offered in Europe are suboptimal for the types of structures that they were trying to build out. But they’re having to improve at a much faster scale and a much faster clip because now they have the clientele for that.
Richard Taylor: [00:20:24 – 00:21:01]
You know, ironically, could this be the kick that Europe needs to get its act together? So for the last however many decades, it’s been able to kind of just like, it’s just been easier to, you know, America has done all the innovating and America’s got all the products and it’s just been easier to, to, to license them and to use them. And as a result. Well, the reason why Europe is like this multifactor. But one of the reasons, I think is that you could argue is because of that. And could this be the, the, the paper that lights America, Europe Again, could it? I don’t know.
Brian Dunhill: [00:21:01 – 00:21:05]
Well, I don’t know if it’s that we don’t innovate over here.
Richard Taylor: [00:21:05 – 00:21:06]
Not the same extent.
Brian Dunhill: [00:21:06 – 00:22:17]
Yeah, well, not to the same because we’ve never had a company get to that same layer as a Google or an Apple or such. So you get these companies that once they get to a couple hundred, couple hundred million or even a couple billion, all of a sudden they dump out, they sell out to the bigger powers. And because of the strong dollar for all these years, well, who has the money? Whoever has the strong currency. So they’ve been the net buyers for 15 years and that is our memory for the general marketplace. But if you ask your parents, they’ll be thinking, ah, there were those years where that was the uk, that was Britain, that was how they built up these mega global banks because they had a strong currency back in those days. So these things come in strides over the course of time. If you look at the Italians, they’re trying to build their mega banks right now. Look at them trying to sneak into Germany with, with some major, major acquisitions. And yeah, we, we could see a changeover in some of those policies, but we have a population of 440 million and they can’t even agree on a language. So are they going to be able to build those?
Richard Taylor: [00:22:17 – 00:23:49]
I’m excited to announce that Expat wealth has its first sponsor, the Global Financial Planning Institute. The GFPI exists to provide education, community tools, resources and ongoing research for financial planners and other financial professionals working with international and cross border clients in the US and Americans abroad. I’m a GFP Institute fellow and I’ve put all our employees through their GFPI programs when they join us. I’ve met some great people, I’ve learned a ton. It’s a genuine community of internationally minded folk doing their best to serve their clients properly and critically sharing what they know in the oftentimes challenging and ambiguous US cross border environment. And as anyone in this sector will tell you, you’re always learning. So if you work with international clients and, or Americans abroad, or if this is an area you’re looking to get into, check out the gfpi at www.gfp.instu-you will be glad you did and I hope to see you there soon. Talking about Britain, you know, watching from afar but with a, with a vested interest in the uk. I still love the uk. I will usually have First Sky News on here in the background. It seems to me UK is going through a horrible crisis of confidence right now. Just a real politically. But also like the people just seem depressed, like just, just, just there’s a real crisis of confidence and I’m interested to know what you think about this. Do you think Andy Burnham could, could be the solution to this?
Brian Dunhill: [00:23:49 – 00:24:33]
Did you know that BP has had as many chairmans of, of their company as we’ve had Prime Ministers of our country in the last 10 years? We’ve both had seven. Right. BP is kind of a joke of the energy stocks and you know, the uk, they can’t pick a direction in any way, shape or form when it comes down to it. Depressingly you might have seen in The Economist the 10 year anniversary of the, of the Brexit vote. I think the entire country agrees. The fact that that was a mistake, right? The problem is how do you get back in, you know, you, you nobody, nobody will politically put all their eggs into that basket trying to get in.
Richard Taylor: [00:24:33 – 00:24:55]
Brian, Brian, Brian, Brian. I keep, I keep hearing this and I desperately wish it to be true that the whole country agrees Brexit was a mistake. But all I see from afar, right, is I see the relentless rise of Farage and reform and this even worse one. What is it this Rupert guy, what is he the one return or something?
Brian Dunhill: [00:24:56 – 00:24:57]
Reform?
Richard Taylor: [00:24:57 – 00:25:00]
No, reform. This other one even more fringe.
Brian Dunhill: [00:25:00 – 00:25:02]
Yeah, I know, I know which one.
Richard Taylor: [00:25:02 – 00:25:15]
And they are all completely committed to Brexit and think it was the best thing ever. And and so is it do, do that or is it just like Maga, where there’s just gonna be 30 of the country that is like unreachable and will never change its mind?
Brian Dunhill: [00:25:15 – 00:26:11]
Well, if, if, when you think about how we structure Congress in the United States or Parliament here in the uk, you’re going to have regions of the country that are completely destitute compared to London as a whole. So the majority of the population can believe one way, but the majority of Parliament can actually vote in another way. And I think that’s the predicament that we found ourselves in is that all of a sudden a segment of the country has been left behind and that segment is quite large. And the way to fix that is separate to the way to continue to grow London. I was reading the other day in the Financial Times that pre Brexit we had 190,000 people that worked in finance. Everybody thought that this was going to pull and actually reduce the size of the financial industry here in London. We now have 240,000 employees working in finance.
Richard Taylor: [00:26:11 – 00:26:15]
Is that right? Yeah, I remember everything was going to go to Frankfurt, wasn’t it absolutely.
Brian Dunhill: [00:26:15 – 00:26:47]
Frankfurt, Dublin, Luxembourg, Paris was going to be the four places that people were going to migrate to. And a whole bunch of jobs moved to those different regions. But the sector as a whole grew. Tons of companies, tons of hedge funds. They went over to Switzerland. A couple years later, they boomeranged right back here to London. It’s not going to fall apart in any way, shape or form, but even though London is the lifeblood of the UK, it’s only one in six individuals in the UK. It’s 10 million out of 60 million people.
Richard Taylor: [00:26:47 – 00:26:52]
Exactly. And what if the rest of them still. Do the rest of them really not support Brexit? I don’t know. I think people.
Brian Dunhill: [00:26:53 – 00:27:13]
I tend to think, from what I’ve read, pre Brexit vote, we were 50, 50. Now it’s closer to 53. 54% Are for rejoining the European Union, but most of those individuals would not actually vote for another referendum. And the main reason is because it was so divisive.
Richard Taylor: [00:27:13 – 00:27:14]
Yeah.
Brian Dunhill: [00:27:14 – 00:27:15]
I think we have to wait. It’s a generational thing.
Richard Taylor: [00:27:15 – 00:27:20]
It’s a generational thing. Yeah. It’s like a Burgundy passport back and I can live anywhere on the continent.
Brian Dunhill: [00:27:21 – 00:27:24]
You want to rejoin the European Union just so that you can go move to France?
Richard Taylor: [00:27:24 – 00:27:32]
Yes. I’m that selfish. Yes. Anyone listening? No, There is more to it than that, but I would like that. That would be a nice benefit that I’d get back.
Brian Dunhill: [00:27:32 – 00:27:37]
I got a wonderful immigration attorney, so I can send you over to him and he can get you over to France, no problem.
Richard Taylor: [00:27:37 – 00:27:43]
Out of interest, do you have any opinion opinion on Starmer going and Burnham coming in?
Brian Dunhill: [00:27:43 – 00:28:01]
I think it’s going to be an interesting question of nothing happening for a long period of time. It’s such a divided parliament that they’re just going to. Labour is doing the exact same thing as the Tories did, bashing each other instead of actually trying to build an agenda.
Richard Taylor: [00:28:01 – 00:29:06]
Right. Yes. And this whole thing of like seven prime ministers or eight in 10 years, what a disaster. I will say I. And this might be hopelessly naive and idealistic, but I do feel. I feel something about this change that I never felt on the rest, in that I think Starmer was a good man with zero charisma, or in this setting, zero charisma. And you need some charisma to, like, galvanize the country. And he was also so scared of offending everyone. He came across as so totally gray and devoid and you just. He had no real agenda or vision that I can see and I think I Think that’s integral to being a successful leader, a politician. I think Andy Burnham has these things. I think he has charisma. I think he has a vision. I think he’s going to bring some new energy to the job. And look, maybe a year from now, I’m going to be proved hopelessly. Like I say, naive and idealistic. But I do feel better than I felt about any of the previous changes, that. That this guy might be able to do something, might be able to inspire, perhaps.
Brian Dunhill: [00:29:06 – 00:29:08]
I hope you’re right. I fear you’re wrong.
Richard Taylor: [00:29:10 – 00:29:11]
I’m sure you’re right.
Brian Dunhill: [00:29:12 – 00:29:49]
I just say that just because Keir Starmer is kind of just left of center as we go further, all of a sudden, Parliament’s going to become more divided on those types of issues, and the louder he becomes, the more opposition is going to come in place. Place. So my bigger fear is the further you go left from center, all of a sudden, those two parties that are far right get more of a voice to try to swing things back and forth. And therefore, my fear is not how good of a leader is he going to be, it’s how much does this stir up the far right?
Richard Taylor: [00:29:49 – 00:29:56]
Yeah, they don’t need more stirring up. They got Elon stirring that pot nicely. I mean, what is he doing getting involved in that stuff?
Brian Dunhill: [00:29:56 – 00:30:09]
But crikey, he got bored of getting involved in. In the Trump stuff. It brought out too much in the Epstein papers. So I guess since we got rid of Mendelssohn, all of a sudden, there was nobody to bring it back to the Epstein papers.
Richard Taylor: [00:30:14 – 00:30:32]
Big question. Do you think Britain, can we get back to, like. Can we get back to. To be like a. It just feels like we’re on a downward trajectory. It doesn’t have to be that way. Right. We’re not just not to write the country off as a. Has been.
Brian Dunhill: [00:30:32 – 00:30:49]
Oh, no. I mean, you have 60 million people that the market cap of The FTSE represents 4% of the world’s stock market. So there’s still a global power. They’re punching above their weight. But I’ve always looked at it a little bit differently. I don’t know if you. Did you read Hans Roslin’s book Factfulness?
Richard Taylor: [00:30:49 – 00:30:51]
Factfulness? Yes. Yeah.
Brian Dunhill: [00:30:51 – 00:31:29]
That’s a brilliant book. Right. Just changes your view in a positive manner of how the world’s kind of played out. And after reading that, I would not say the UK is getting to be less representative of what’s going on in the world. I would basically say that your emerging markets have become that much More important because they’ve become that much more affluent. Look at some of the biggest companies in the world. The biggest growth companies in the world are coming from emerging markets like Korea, right? When. When we look at a company like Tata, they own Range Rover, Jaguar and. Twining. Twining. Twinning. How do you pronounce the T?
Richard Taylor: [00:31:29 – 00:31:34]
Twinning. I think. I think Twinning. I don’t really. I actually know I’m not that. Don’t take that as gospel.
Brian Dunhill: [00:31:34 – 00:31:40]
- I’ve seen it down in Andover a million times as I drive past, and every time I think to myself, I need to find a Brit to ask them how to pronounce this.
Richard Taylor: [00:31:40 – 00:31:49]
The first time I tried to say apocryphal, I said apocryphal. So I’m not the guy to. I’m not. You shouldn’t be taking tips from me on this.
Brian Dunhill: [00:31:50 – 00:32:23]
If all of a sudden an Indian company owns some of the most valuable brands here in the uk, is that a bad thing for the UK or is that a great thing for globalization? Globalization should continue to happen based on not the falling of UK standards, but the rising of global standards. I think in factfulness, he said, in the 80s, 1/3 of the world, two thirds of the world, lived on less than a dollar a day. And now it’s only one third of the world lives on the equivalent of what a dollar a day would have been back in the 1980s.
Richard Taylor: [00:32:24 – 00:33:13]
Globalization is the key, is truly the key to all this, the key to raising all our living standards and, let’s be honest, reducing war. The more interconnected and the more relations you have with each other, the less wars we will and conflicts we’re going to have. But the world is moving away from that right now, starting with our old friend Brexit. And then Mr. Trump is doing his best to sever those ties. I do have. All is not lost. But I do feel we’re kind of traveling in the wrong direction. And I’m hopeful. I hear what you say about. But I’m hopeful perhaps Burnham can start to write that train. But we will see. I do think we have to. We have to come back together again, though. But this generation. It’s not going to happen. You’re right.
Brian Dunhill: [00:33:13 – 00:33:19]
I mean, it’s. It’s the UK and the US is going in the wrong direction. The. The EU is still expanding.
Richard Taylor: [00:33:19 – 00:33:31]
Yeah, but. And also though the uk, but ironically, I think the US and the UK kind of our relationship is still strong. It is kind of. It’s splintering into three separate relationships rather than one big cohesive one.
Brian Dunhill: [00:33:31 – 00:34:11]
And the biggest loser in that is, is the UK at the end of the day, because it’s, at the end of the day, the UK was kind of that entry point for the US into Europe, into all those talks. So all of a sudden, as the UK has separated themselves from Europe, they’re separated from all of those conversations. They’re just playing a middleman in between. And that’s not as necessary as it might have been before. But when we talk about the east, they are, they are actually building those relationships that they haven’t in the past. Sadly, that’s China at the forefront instead of the US at the forefront.
Richard Taylor: [00:34:11 – 00:34:13]
That’s trouble. That’s bad. That’s, that is really bad news.
Brian Dunhill: [00:34:14 – 00:35:50]
It’s, it’s, it’s bad for us at the end of the day. That is bad for, for our bottom lines. But, you know, we’ve, we were looking up earlier to retract back onto to Iran. Fifth time the US is going through and bombing them. The US has bombed 70% of the refineries throughout Iran and Iran has only bombed 20% of the refineries throughout the rest of the Middle east, which has meant the only excess capacity is supposedly in China and India. So the biggest benefactors of the war in Iran could potentially be China and India. So where are we really accomplishing all that much throughout the war in Iran? Well, okay, we haven’t taken them off the line. We’ve gotten ourselves into a whole muddle in the Strait of Hormuz. Oil prices are all over the place, but the refined capacity could lead towards shortfalls overall. Now, every time to get diversification from those seven stocks and to hedge some on inflation, I’ve been buying more oil stocks. I hate that from an ESG factor, but how can you not balance yourself out and get a little bit of value, a little bit of diversification and make sure that you have access to both refined materials that there’s a major shortfall in and potentially oil prices spiking right back, back up. Today we’re back up to 75 bucks a barrel. That’s, you know, a 25% increase from where we were at the beginning of the year. It’s the hedge that, that needs to be in the portfolios in certain regards, doesn’t help on the whole globalization factor.
Richard Taylor: [00:35:50 – 00:36:18]
No. So diversification, that’s our message from today. So seeing as we strayed into politics and of thus, you know, are now hated by half of America. Listen to this. And half of Britain, It’s all about, all about reducing the amount of clients we get from from these podcasts. All right my friend, good to catch up with you always. And where can people find you?
Brian Dunhill: [00:36:19 – 00:36:25]
Oh, they can find me at Dunhill Financial. Drop me an email info. Dunhillfinancial.com would love to hear from you.
Richard Taylor: [00:36:25 – 00:36:38]
And if anyone has any questions for the show they want Brian and I to answer on here. We have a new email box. It’s called expat wealth. PlanFirstWealth.com drop us a line in there and we will endeavor to answer your questions when we are together. All right my friend, I shall see you soon.
Brian Dunhill: [00:36:38 – 00:36:40]
Great seeing you Richard. Thanks so much.
Richard Taylor: [00:36:41 – 00:37:38]
All right folks, that’s another episode of Expat wealth under our belts. Thank you for listening. I appreciate it. And I appreciate you. If you’re enjoying the show and would like to support the mission, which is to help ambitious expats thrive in America and ask you to subscribe to the POD wherever you listen and also consider leaving a rating and review, this stuff really does matter. Please help us get this information to the people who need it, that is to your fellow expats. Just a quick reminder that this show is brought to you by Ponfa as well. We are a US based financial planner and wealth manager and we help successful American and international families living across the US to make the most of their opportunity and ultimately to retire happier. If you’d like to know more about how we might be able to help you, you can find us on our website, www.planfirstwealth.com or you can look me up on LinkedIn. Do get in touch. We’d love to hear from you. As always, thank you to the podcast guys for their help producing this episode and the entire show. See you next week.
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