2019 Schwab IMPACT Conference: Day 3

Greg Valliere on the Political Climate in Washington, D.C.

Valliere is a staple at IMPACT, and to the best of my knowledge, he speaks every year -- he certainly has every year I've attended. Further, he's consistently a highpoint of the week. A highly-connected insider, Valliere has made a career out of bridging the gap between Capitol Hill and Capital Markets, and he's really got a great pulse on the general political climate in what he refers to as "his city," Washington, D.C.

A few items of note from him:

• He has the odds of impeachment at 80% and said the off-cycle elections on Tuesday did not help Trump in that regard. However, he has the odds of conviction much, much lower.
• He credited Donald Trump for being the greatest politician he's ever seen in one specific area: demonizing his opponents. That solicited a hearty chuckle from a packed auditorium, but there's certainly truth to it.
• Valliere said the view, until very recently, among most on Wall Street was that there would be a relatively surefire victory for Trump in 2020. That changed, by his estimation, after Tuesday's results in Virginia and Kentucky.
• The best thing Trump has going for him, per Valliere, is a weak field of Democrats. He noted that even in person, Joe Biden has clearly lost a step. He expects that were she to be elected Elizabeth Warren would have to moderate on stances a bit but said she's not doing any favors with the fat middle portion of the country and that her shifty language on the funding of Medicare-for-All has eroded a lot of trust. He views Bernie as a protest candidate more than a plausible President.
• He does not see anyone else jumping into the race. He called Hillary Clinton radioactive and was highly dismissive of more fanciful notions of Michelle Obama and others jumping in late.
• On the Republican side, he thinks Pence will run in 2024 and assuming he's not brought down as part of the impeachment proceedings; he views him as a very strong candidate. He also thinks Nikki Haley should be a frontrunner in 2024.

Amy Webb on Emerging Tech Trends

Webb's bio lists her as a "quantitative futurist," so I was pretty ready to check out of her hour-long session this morning, but you can't judge a quantitative futurist by its cover. She was incredibly engaging while taking on pretty complicated topics like breaking up "Big Tech," privacy issues tied thereto, and the future of connectivity. There weren't immediately actionable ideas (though her backdrop did make the server farm REITS I'll mention later seem more attractive), but the macro themes were well-explained, and I think that type of content helps when analyzing companies.

BlackRock's Aladdin Software

A few reps from BlackRock, the largest asset manager in the world, stopped by to share observations from there powerful data analyzing tool "Aladdin." Perhaps they should have brought the Genie with them because the observations were downright useless on most levels. In theory, since many advisors use Aladdin to analyze and rebalance portfolios (of note: we do not), sharing findings from more than 22,000 portfolio review should have been interesting. It wasn't.

The first speaker was still showing slideshow photos of his family 15 minutes into the presentation.

Hailed as a session that would share "the three most valuable insights from 22,000 Aladdin portfolio constructions," the session imparted such wisdom as: Investors now want to invest WITH purpose, not merely for a purpose.

Deep stuff coming out of Agrabah.

5G and the Next Generation of Real Assets

Andy Wilson, a portfolio manager with DWS, shared insights on the ongoing (and impending) 5G buildout and the battle for spectrum. In simple terms: the upgrade cycle of connectivity and "internet of things" things.

He made a pretty compelling case for non-traditional infrastructure plays like server farm REITS. Definitely high on my list of things to dig a little deeper on.

Michael Kitces on the State of the Business

Michael Kitces, who is somewhere between a cult leader among financial planners and a blue-shirted warrior fighting for the rights of independent advisors (just depends on who you ask), shares his thoughts on the industry on a number of broad terms. Frankly, it was an incredibly interesting session, but probably not one our individual clients are all that consumed by - it was truly shop talk. Nonetheless, it was interesting to hear his interpretation of recent SEC regulations and imbedded disadvantages of certain parts of the financial services market.