“How the SBA is Viewing a Changing World” Lamar Taylor, Chief Investment Officer for the Florida State Board of Administration, discusses the SBA's $275 billion asset management, focusing on asset allocation, assumptions, and potential changes in the economic landscape, before a June 26, 2025 meeting of The Economic Club of Florida.Show Notes (for complete Show Notes, please visit https://ecf.memberclicks.net/2025-june-lamar-taylor)With his slides, Mr. Taylor showed the Club how the Florida pension plan ranks very well against the top ten defined benefit plans in the country.  He said he achieves that through asset allocation.  Currently about 47% of the fund is in global equities, about 10% in real estate, and the rest in fixed income assets such as treasuries, mortgage-backed securities, and commercial paper.He reviews asset allocation every three to five years and works to get the most efficient return for the asset mix.Mr. Taylor said that Covid exposed weaknesses in the supply chain which led to an effort to re-shore and near-shore those supply chains.  The changes have required people to spend money.  Add in labor expense, energy transition, and an aging population, and those expenses affect equities.“Equities are about as expensive as they’ve ever been,” he said, “and particularly U.S. equities are expensive.”The price-to-earnings (P/E) multiples are now about 21-times forward-looking earnings.He said that it was his opinion that U.S. equities are primarily expensive because of concentration, particularly in:The Magnificent Seven (principally tech companies in Artificial Intelligence - AI) of the S&P 500 IndexSpending by wealthy U.S. consumers“A quarter to a third of the growth in U.S. GDP is attributable to capital expenditures in AI,” Mr. Taylor said, as he expressed concern about how large capital expenditures in the past, such as the Dot-Com boom, have not ended well.  “Maybe AI is different.  Who knows?  I don't know.  These are huge companies.  They can afford it.  They have fantastic earnings.”He said that half of U.S. spending is attributable to the top 10% of income earners.  Their spending used to be in the 30-35% range.  The top 20% of incomes now own 90% of equity securities, and the top 1% own almost 40% of those securities.Recently there have been calls for returning manufacturing to the country and reducing our trade deficit.  Mr. Taylor said he has begun to look at those changes differently through a concept called identity-of-payments.  He said the United States has been the destination for foreign capital for more than 40-years.“Because we are buying more than we're selling in the goods market, by definition, you’ve got to be importing capital to be able to do that,” he said.  “It doesn't mean that trade deficits... (for complete Show Notes, please visit https://ecf.memberclicks.net/2025-june-lamar-taylor)