Jamie Dimon: Why I Won't Buy Bonds, AI's Future & Leadership Lessons

**Jamie Dimon** (0:00)
When I look at AI itself, the amount of money being spent is huge.
Will it in total pay off? Probably, just like the internet did. Will it pay off the way you expect and the time table you expect? Definitely not.

**Wilfred Frost** (0:12)
At the moment, long-dated government bonds, would you be a buyer of those?

**Jamie Dimon** (0:18)
But personally, no.
I would not be a buyer, and part of it is interest rates, inflation, I mean, even if inflation was 2%, the 10-year bond should probably be at 4.5%, 4 to 4.5%. And they're almost there today. Being an economic historian, I can't take out of my mind what happened after the Great Recession of 74 That last thing, and you actually have to sign the piece of paper, and you know when you're signing that piece of paper, that you've just committed the company, not just yourself, to back breaking scary work for 12 months, and that your shareholder would be under pressure. Yeah, you know you're entering a mouse draw and that you could have avoided. Yeah, you feel a pit in your stomach. And that is lonely too.

**Wilfred Frost** (1:01)
Welcome to The Master Investor Podcast with me, Wilfred Frost, where we celebrate and learn from the success of the greatest investors, business leaders and politicians in the world, giving you, our listeners, The Edge. The Master Investor Podcast is sponsored by LSEG, Interactive Brokers, The World Gold Council and BNY Investments. Please do remember the views expressed in this podcast are for general information purposes only. Nothing in the podcast constitutes a financial promotion, investment advice or a personal recommendation. More on that in the show notes.
My guest today is the undisputed heavyweight champion of the world of finance and banking, Jamie Dimon, of course, the chairman and CEO of JPMorgan Chase. A bank he took over in January 2006 and has led for the last 20 years through the financial crisis, through the sovereign debt crisis, through COVID, through the 2023 banking crisis and each time emerging stronger on the other side. Jamie, it is great to see you again. Welcome to The Master Investor Podcast.

**Jamie Dimon** (2:03)
I'm thrilled to be here. It's always good to see you, Wilf.

**Wilfred Frost** (2:05)
It's really a treat to have you. We've done about seven or eight interviews together, but I've never done something as long form as this. So thank you for your time. Let's go in the short term first of all though. And your earnings just a few days ago, Blockbuster, the highest ever quarterly profit, $21.2 billion, up 41%.
I don't want to put a negative question on it, but can things go on that well?

**Jamie Dimon** (2:29)
So, you know, listen, first of all, we build a company for the long run. And obviously we deal, you mentioned crises and ups and downs. We're clearly in a very, almost as good as it gets environment for banks, high volumes, high asset prices. You know, a lot of people trading, et cetera. So this can go on for a while. It will eventually end, you know. But it's not how we run the bank. I run the bank, we serve clients, we serve them around the world. We serve them every day. We invest through thick or thin. I remind people, our best year, it wasn't the year we made the most money. Our best year was the year we had only a 7% return in tangible equity.
It was 2008
And that outperformed everybody, and that was our finest moment.

**Wilfred Frost** (3:05)
In a relative sense, and I guess setting you up for the long term. And as you say, the current environment, we had again good economic data this morning on the retail sales front.
The environment for your stock is good, the environment for your company is good, the environment for the economy is good. At the same time, do you think the probability of a major risk suddenly rising is a bit higher than, you know, you've been in charge for 20 years. If you took out 2008 and COVID, is the risk, the tail risk bigger than outside of those moments?

**Jamie Dimon** (3:36)
I think at first I was very intelligent to say it was the probability because we don't know which probability is baked into the market. There is something baked in. I tell people, if you said the market is going to fall 40 percent, there's only a 10 percent chance, that's 4 percent. That's one PE turn. So it's possible something is baked in. What is not baked in is that it actually happens and such. So I do think if you made, and I always do this just as an exercise, make a list of all those really complex, long-term geopolitical tectonic plates, things that could affect the market or may not, and they may mix and match in a certain way you don't understand. So you have wars in Ukraine, terrors in the Middle East, obviously Iran, great global deficits, remilitarization of the world, America's relation with China. So there are a lot of things out there which could cause a problem, but again, they might not. I hope they all resolve properly and that's what most governments want.