Yardeni Research President Ed Yardeni Talks Market Outlooks, Personal Investment Strategy

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, podcasts, radio, news.

**Tom Keene** (0:07)
Let's do this. Let's look at inflation. Look at our optimism within the markets. Joining us now definitive on Wall Street at CJ. Lawrence just a few years ago. He helped invent the synthesis of economics into stock market analysis. Ed Yardeni joins us. Yardeni Research. Ed, we got a one-hour conversation we're going to cram in here.
I got to first go to the therapy that's needed as you go to retirement, which is you've got Max, Chloe, Cooper, and Bailey at the Yardeni house. It's a four dog night.

**Ed Yardeni** (0:38)
Yeah, it certainly is. It's their King Charles Cavaliers and their Couch Potato dogs.

**Tom Keene** (0:43)
I love those.

**Ed Yardeni** (0:44)
They're always on the couch and they're sleeping.

**Tom Keene** (0:46)
What are the camel feets? I mean, the vet bill must be just like seriously off the chart.

**Ed Yardeni** (0:50)
You have to get health insurance for your dogs. I mean, that's your Bloomberg Money advice.

**Tom Keene** (0:56)
Yeah, that's my advice. Thank you very much. Why is Ed Yardeni here? Let me go to the chart right now. Pull up an important chart. You're coming out of COVID. In October of 22, a guy named Ankom Por in the chart area and Yardeni in the economics and finance said, courage, buy here. What did you see in October 22 that gives you continued confidence in the market?

**Ed Yardeni** (1:21)
Well, October 22 was a very strange bear market. Usually bear markets are associated with recessions. There was no recession. As a matter of fact, at the time, I kept saying that we are experiencing the most widely anticipated recession of all times that just isn't going to happen. It was the Godot recession, if you will.
I just kept betting on the resilience of the economy. And so I kind of viewed the bear market as the aberration, rather than the economy, which remained very strong. The earnings were holding up reasonably well. So I kind of viewed that as a panic attack. Now look, there were good reasons for concerns. The Fed was raising interest rates from zero to 5.5% of the Fed funds rate. The bond yield was going up. Oil prices got a big spike. And yet the resilience of the economy came through remarkably well.
We were betting on that, and we're still betting on the resilience of the economy.

**Scarlet Fu** (2:15)
Yeah, so I want to take it to what we're seeing right now, because you said bond yields were going up, oil prices are going up. That's exactly what's happening now. The stock market has kind of slowed down a little bit. So the parallels between then and now, one could say, is noteworthy.

**Ed Yardeni** (2:29)
Well, there's definitely parallels, but one of the big differences is earnings. We've got what I call, you know, everybody talks about FOMO, fear of missing out. I'm talking about FOMO, and that is Fabulous Earnings Momentum.
We didn't have that back in 2022 And it was really at the end of 2022, November, that we suddenly had CHAT GPT and AI revolution just starting.

**Tom Keene** (2:55)
And the arc of this, and I just finished Justin Bear's wonderful book on Ned Johnson and, you know, the industry from ERISA 1974 forward. My basic take is we've rationalized ownership of bonds, which has been really difficult since 22, since 21 as well.
Is the basic psychology of retirement now afraid of stocks?

**Ed Yardeni** (3:18)
I don't think so. I think actually quite the opposite. I think a lot of my friends are retiring. We're the baby boomers. I'm still working for a living because I don't play golf. So I don't know what I would do with myself. You know, by the way, I get seasick on cruises. My friends are all going on cruises. They used to go one every three years. Now, they go three a year.
And I get text messages for them saying, I don't know what you're doing, but keep this market going up because we're spending money like crazy and our net worth is going up.

**Tom Keene** (3:46)
In the air belt showing us last week, Scarlet, it was brilliant on this saying the stock markets become the American retirement system.

**Ed Yardeni** (3:53)
It absolutely has. Do you know that the baby boomers have $90 trillion, trillion, not billions, trillion dollars of net worth. And by the way, there's still some people left from the so-called silent generation older than the baby boomers. They have $20 trillion.
So we're talking over $100 trillion of retirement net worth assets for the largest generation ever that is retiring.