Michael Weisz, Yieldstreet founder and president, joins Yahoo Finance to discuss the supply chain crunch, inflation, and Biden’s response to it all at today’s address.
ADAM SHAPIRO: All right. Whether you are an accredited investor or just starting out as a retail investor at the beginning of your earning potential, it’s all about creating wealth. But you have to ask the question, especially at this moment in time, how are the supply chain issues and the current inflation picture impacting the decisions you make, whether you’re a millionaire or whether you’re building your wealth for the first time.
Let’s get this discussion underway with Michael Weisz. He is the founder and president of Yieldstreet, and he’s joining us once again here on the Yahoo Finance platform. Good to have you here. And when you take a look at the big picture, because you deal with the accredited wealthy investors as well as those just starting out through your Prism fund, what is the question we should be asking as investors about the intersection of inflation and supply chain issues on where we then deploy our capital?
MICHAEL WEISZ: Adam, thanks for having me. That’s a great question that I think is top of mind for all of us today. And essentially where that drives us is a simple question is, how do I think about asset allocation? How do I think about where I should be investing? What impact does the supply chain challenges have on my portfolio? What impact does it have on my purchasing power? When we think about inflation, how long is it going to stick around for? I try to take that all together and understand what investment decisions I could be making and how to protect myself or how to take advantage from the situation. I think that’s what people are asking.
EMILY MCCORMICK: Michael, this is Emily here. Thank you so much for joining us. Speaking of supply chain issues, which we’ve been watching for months now, in terms of some of the latest developments looking at a company-specific basis, we did have Nike just earlier this week reporting better-than-expected quarterly earnings and sales results suggesting that it is effectively navigating some of these supply chain challenges. So are companies like Nike the exception or the rule here? And in other words, are things actually getting better as we move through this holiday season now at this point?
MICHAEL WEISZ: I don’t think they are necessarily. I actually feel that there are a number of data points that we’re seeing. I’ll give you one as an example. We’re very close to the shipping markets. We have a shipping business. And we continued to see some of the largest cargo carriers signing multi-year charter agreements at rates that are higher than we’ve ever thought they would be or could be today. And I think that’s showing us that supply chain issues are here to stay for a little while.
I think the example of Nike is highlighting something else, which is also really interesting, which is really demand. Consumer demand is through the roof. In part because of QE and stimulus that is coming to the market, there is more dollars in people’s pockets. And they are spending that money. And so I think the question is, where is the intersection between consumer demand and supply chain? And how do we make sense of that?
When you look at things like cars, when you look at things like microchips, we are not seeing those frames get better. In fact, today just happens to be a serendipitous day for this conversation. I sold the car today for the first time, and I sold it for one third higher than I was offered one year ago. That’s a personal car that was me today. I got 10,000 miles more than I expected. So no, I don’t think the supply chain issues are easing, but I do think that demand is super strong. And in cases like Nike, we’re seeing that.
ADAM SHAPIRO: My granddad was a junkyard guy and had used car dealerships in Portland, Maine. I’ll talk to you about selling used cars at a profit another time. But want to play a sound bite from President Biden because it gets to something you just pointed out. And on the other side of this, I want to get your thoughts on it.
JOE BIDEN: Top of mind for me is what is top of mind for so many families– the pinch of prices and the cost. Look, addressing these costs has been and will continue to be my top priority, the entire administration. And the way to do this is not to slow down our economic turnaround, not to step back from all this progress, but to build on it. We can and we will address prices by expanding productivity capacity in our economy, so we move more goods to market, get more Americans working, encouraging more investments in innovation, and making sure American consumers see those benefits at the store and at the pump.
ADAM SHAPIRO: Michael, you just pointed out, getting those goods to market, if they’re signing long-term deals with the shipping companies, used to cost you $2,000 a container. It got as high as $20,000 a container. If we’re still going to be paying more than two grand a container going forward, the president might be missing something. Or are we missing something?
MICHAEL WEISZ: No, I think the president is missing something. I think he’s also giving us some mixed messages in the economy. Some of the issues that you’re seeing, not to bring Omicron into the discussion, but if we’re going to create more mandates, if we’re going to keep people from being back in the workforce again, that’s clearly not going to go well with what he’s just said in that last clip that you’ve made. And so I think that there are conflicting messages that we’re hearing out of Washington and at our local municipalities that are making it difficult to reconcile and understand how we are going to bring costs down for consumers.
I think at the end of the day, inflation is the real thief here. And that’s what we need to look out for. So being properly invested and understanding where the opportunities may present themselves from the current dynamics and the supply chain and also how to navigate that, we’re going to be critical for the next 12 months.
EMILY MCCORMICK: Michael, we’re still seeing the labor force participation rate depressed compared to pre-pandemic levels. Job openings are near record highs. When do you expect the labor supply shortage portion of the supply side constraints to start to ease?
MICHAEL WEISZ: I think if we don’t see more support coming from the government, that over the next quarter we’re going to start to see a lot less labor shortages.
ADAM SHAPIRO: If we see fewer labor shortages and the Fed should get its interest rate lift-off wrong, what would you just predict very quickly? Are we headed for inflation? Because a lot of investors make their decisions based on that number, just the inflation number.
MICHAEL WEISZ: I think what the government did, actually, what the Fed did with regards to the rate hike was smart because it was modest. It seemed like there were tempering their reaction. A lot of people were jumping on whether they felt that it was a misstep in monetary policy that would have a wider effect. I think, in fact, they made the decision intentionally to ease into a rate hike so as not to create a shock to the system.
ADAM SHAPIRO: We appreciate your being here. Michael Weisz is Yieldstreet’s founder and president. And you should know that they have deployed more than $2.5 billion in capital since 2015. You can check them out at yieldstreet.com.