Well,

real rates have risen a lot over five years, but it's being driven by healthy growth.

The post-GFC period was the abnormal experience, and this is better.

I agree with Tom, too, that there's too much hawkishness being priced in.

We think that maybe one more hike, we would also agree that's probably not necessary.

But look, there's enough disinflation evidence in that.

And, you know, one thing I would say, though, at the margin is we are getting a little more cautious on equities.

ago.

[laughs]

I get a little nervous, but when I look at this one, I feel pretty good about how we did.

When we look at divergences and the ideas that central banks were gonna have a more complicated year, that was not at all where the market was when it started.

The market generally thought, "Oh, more easing is on the table." And the divergences have certainly played out.

We did not obviously call the catalyst that's made this year more complicated, the Iran war, as you pointed out in the intro, and that has introduced a lot of energy supply disruptions.

It's really caused certain countries to be dealing with dislocation depending on their reliance on the Middle East as a provider of goods and services that flow through there.

But by and large, these divergences have only exploded wider.

Yeah.

Just curious what you would say about that.

Yeah, I mean, it depends on how far back you go on the relative cheapness, because I do think 20 times when you consider the return on equity, which is so high for the U.S. market, creeping up towards 30 percent, very high margins.

I think that informs a higher P.E. that is justified.

By the way, Lizanne brought up a really good point, though, about the Magnificent Seven and how it's breaking a bit as a leader of the market.

There's also a breakdown of correlations among those stocks.

And so this market is now pivoting and being led very much by tangible infrastructure tied to AI.

I think the hyperscalers that dominate the Mag7, there's a lot of questions about return on investment in the long run.

I mean, that was, you tell me, what would you say, early 2010s to kind of early 2020s? Does Micron have that kind of staying power?

Was that a mistake?

Y- yeah, I, I think it was.

I think the magnitude to which venture and growth equity became part of the, the menu got too far askew, where it was dominating commitments.

And let's first step back and, and assess why it was deemed to be such an attractive area to invest.

Because over the long run, if you want to maximize your multiple and your internal rate of return, there is no doubt that venture capital and growth equity give you that highest threshold of returns if you select the right managers.

If the GPs you are aligned with will execute, you can see two, three, four X in individual funds, programs that will outpace a traditional buyout portfolio if executed well.... and in certain cycles, it can even be more pronounced than that.

So the, the reason that this was such an attractive area was because endowments are seeking to maximize the returns.

What's one key philosophy you've changed over the last twelve months?

Was that a mistake?

Y- yeah, I, I think it was.

I think the magnitude to which venture and growth equity became part of the, the menu got too far askew, where it was dominating commitments.

And let's first step back and, and assess why it was deemed to be such an attractive area to invest.

Because over the long run, if you want to maximize your multiple and your internal rate of return, there is no doubt that venture capital and growth equity give you that highest threshold of returns if you select the right managers.

If the GPs you are aligned with will execute, you can see two, three, four X in individual funds, programs that will outpace a traditional buyout portfolio if executed well, and in certain cycles, it can even be more pronounced than that.

So the, the reason that this was such an attractive area was because endowments are seeking to maximize the returns.

What's one key philosophy you've changed over the last twelve months?