Perspective in life — and investing — is critically important.
It’s one thing to write about the words emanating from the world’s most powerful chief executive officer, but it’s something else entirely to sit across from them for 25 minutes asking questions on live TV.
How do I know this? Well, I just did it — and in Frisco, Texas, no less!
After several weeks of damn near begging average investors to carefully consider the warnings from JPMorgan Chase chairman and CEO Jamie Dimon, I got to chat with banking’s top dog late Wednesday.
A total of 25 minutes exclusively on Yahoo Finance Live with someone whose career I have followed closely, mere hours after the Federal Reserve left interest rates at 22-year highs.
Added intrigue: Fed Chair Jerome Powell sounded quite cautious on the economic outlook in his presser, mostly as he (and others at the Fed) can’t quite measure the impact of their aggressive rate hikes since March 2022.
With that as a backdrop (and October’s poor market performance), here are a few observations from being inches away from Dimon — who was in Texas for JPMorgan’s “Make Your Move Summit” dedicated to empowering small businesses. They are in no precise order. Random, in fact.
Chill on the succession stuff: People need to stop asking Dimon about when he is going to retire; it’s getting tiring. I found Dimon to be classic Dimon — he has wicked knowledge of incredible details, enjoys engaging with clients and employees, and is on the ready to phone up a powerful friend if need be. I am sure Dimon has laid out a succession plan for JPM’s board, but it’s unlikely to be executed anytime soon. And that is a good thing for JPMorgan and its investors.
“Jamie is the LeBron James of banking,” Wells Fargo’s longtime bank analyst Mike Mayo told Yahoo Finance Live post our interview with Dimon.
Just like LeBron, Dimon has earned the right to go out on his own terms when he sees fit.
Housing in 2024 is going to be tough: Powell struck a note of caution on the outlook for housing amid 8% mortgage rates. Dimon came off to me equally as cautious, given the steep ascent in housing costs. Higher rates are “slowing down people’s ability to move,” Dimon told me. “People today are doing adjustable-rate mortgages, but the cost of carrying a mortgage is higher. So buyers either are going to buy a smaller house, which is a choice, or they’re going to wait, or not buy at all,” Dimon added.
Are we nearing a housing crisis? No, this is of course not Great Recession stuff. But the reality is that it has become way more expensive to own a home, and housing supply is scarce. That means a powerful driver of economic activity is drying up ahead of 2024. It’s hard to see the situation improving as the Fed made it clear (at least to me) that higher rates for longer are the new normal.
Bring on those Home Depot earnings…
The Lag: “I personally believe that at one point it will rattle the markets,” Dimon said on the lagged impact of the Fed’s quantitative tightening (defined by Yahoo Finance here). No further context needed — let that statement sink in.
The follow up: As I wrote a couple of weeks back, for Dimon to say this is the “most dangerous” time he has seen for the world was a major wake-up call to investors underpricing geopolitical risks. I asked Dimon to expand on what he meant in his latest earnings release.
“This is maybe a little bit more like pre-World War II,” Dimon said, pointing to the Russia-Ukraine and Israel-Hamas wars. “Like we have to get this right. I like the fact that the Biden administration and others now, Mitch McConnell, and [other] leaders are saying we need to take care of this. It is for America, because if we don’t fix this the world may not be completely safe for freedom.”
I came away from my chat with Dimon glad to have asked investors to listen to his words several weeks ago.
Sitting across from Dimon, it’s obvious he takes these interviews seriously. It’s not to talk his book or scare the hell out of people. This is just the most connected person in business doing what he does best — offering invaluable insight while trying to keep JPM humming along.
“Study everything. Learn, learn, learn. Don’t get rigid in how you think,” Dimon added.
Listen to that too, investors.
Programming note: Yahoo Finance anchor Seana Smith will be reporting live from JPMorgan Chase’s “Make Your Move Summit” in Frisco, Texas, all day Thursday. Key guests include Chase Business Banking CEO Ben Walter, Southwest CEO Bob Jordan, and NFL Hall of Famer Emmitt Smith.
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