WEBVTT - U.S. Oil Demand Is Peaking, Expect Lower Prices At Pump: Schork 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg P and L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Abramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg P and L 0:00:20.840 --> 0:00:32.880 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Crude 0:00:32.920 --> 0:00:36.680 oil contracts are higher by nearly two on the NIMEX 0:00:36.800 --> 0:00:39.080 right now Here to tell us more about the oil 0:00:39.159 --> 0:00:42.920 complex is Stephen Shorky is the president of the Short Group. 0:00:43.120 --> 0:00:47.519 Joining us from Villanova, Pennsylvania. Stephen shork always a pleasure. 0:00:47.760 --> 0:00:52.560 Let's begin with news today about Saudi Arabia curbing output 0:00:52.720 --> 0:00:57.040 last month. This is according to OPEC delegates, and also 0:00:57.520 --> 0:01:01.680 the trade dispute that now has become political between Saudi 0:01:01.720 --> 0:01:06.679 Arabia and Canada. What does this mean for oil prices? Well, 0:01:06.720 --> 0:01:08.920 if we're left just to the seasonality of it all 0:01:09.120 --> 0:01:12.440 him right now, oil demand in the United States, if 0:01:12.480 --> 0:01:15.640 it has not peaked for the year, it shall peak 0:01:15.720 --> 0:01:18.120 over the next couple of months, excuse me, a couple 0:01:18.120 --> 0:01:20.640 of weeks. That is to say so, we typically see 0:01:20.640 --> 0:01:23.360 the highest demand for crudal. At the peak of the summer, 0:01:23.400 --> 0:01:26.680 we demand for gasolene is at its strongest. So as 0:01:26.680 --> 0:01:29.279 we transition into August, Now, of course we look ahead 0:01:29.319 --> 0:01:31.840 into September, we're not going to the shore, we're not 0:01:31.880 --> 0:01:35.200 going to the Poconos anymore. The kids are back at school, 0:01:35.360 --> 0:01:38.360 so demand for gasolene falls, and then demand for crudal 0:01:38.440 --> 0:01:43.160 falls precipitously as we go into the fall maintenance season. Now, remember, 0:01:43.240 --> 0:01:45.280 the refinery is the only guy in the world that 0:01:45.400 --> 0:01:49.280 actually buys crudal to use it, and their consumption of 0:01:49.320 --> 0:01:52.640 crudal drops tremendously in the months of September and October. 0:01:53.120 --> 0:01:58.160 And based on the published UH schedules for maintenance coming 0:01:58.200 --> 0:02:02.280 this fall, this maintenance season will be extraordinarily high. So 0:02:02.360 --> 0:02:04.520 we can expect to see a sharp drop off in 0:02:04.640 --> 0:02:07.960 demand for crude all in the months ahead. So what 0:02:08.080 --> 0:02:11.359 does this mean for price? Well, intuitively, if you're at 0:02:11.360 --> 0:02:15.239 the peak of the season and we're already well off prices, 0:02:15.320 --> 0:02:17.720 that is, are already well off their highs and we're 0:02:17.720 --> 0:02:20.880 only looking at weakening demand in the months ahead, that 0:02:20.919 --> 0:02:25.560 would imply lower prices in the nearby future. Okay, So 0:02:25.639 --> 0:02:28.960 does this mean that the best trade is to play 0:02:29.000 --> 0:02:33.600 on investors fears of increased prices. That's going the other way, 0:02:33.639 --> 0:02:36.800 that's the contrary bet. Make sure that you could stick 0:02:36.840 --> 0:02:39.920 it to an investor to pay sixty nine to seventy 0:02:39.919 --> 0:02:42.480 dollars a barrel when the price, based on what you 0:02:42.600 --> 0:02:46.640 just described, looks like it's going to fall right exactly, 0:02:46.720 --> 0:02:49.040 So we did. We came out of the worst worst 0:02:49.080 --> 0:02:53.200 of it, and and I think on investor's mind, what 0:02:53.320 --> 0:02:56.000 was really not focused on was the loss of Canadian 0:02:56.080 --> 0:02:58.840 crude oil. Uh, the market seem to be really focused, 0:02:58.840 --> 0:03:02.000 of course on the situation in Iran, the situation in Venezuela, 0:03:02.080 --> 0:03:05.920 the situation in Libya. But we had a major upgrader, 0:03:06.360 --> 0:03:09.320 a production plant in Calgary that went down for an 0:03:09.400 --> 0:03:12.280 unplanned outage back in the late spring, right as we 0:03:12.280 --> 0:03:15.080 were going into the peak demand season for oil. And 0:03:15.160 --> 0:03:17.800 keep in mind, demand for oil, demand for guests lane 0:03:17.880 --> 0:03:20.639 in the United States has never been stronger. And yet 0:03:20.680 --> 0:03:23.679 we lost a key supplier of that oil at the 0:03:23.760 --> 0:03:26.080 start of the season, and hence we did have a 0:03:26.160 --> 0:03:29.600 sharp run upping price. But the market has endured that 0:03:29.800 --> 0:03:33.240 right now, so prices at this level from a fundamental 0:03:33.280 --> 0:03:38.040 from the seasonality standpoint, you would expect to see lower prices, 0:03:37.080 --> 0:03:41.720 a softening in prices as it wore. But clearly with 0:03:41.840 --> 0:03:47.120 the headlines the reported assassination attempt down in Venezuela. Of course, 0:03:47.120 --> 0:03:50.760 the situation between this White House and Tehran, the situation 0:03:51.080 --> 0:03:55.440 in um in Libya, all plays into fear. And when 0:03:55.440 --> 0:03:57.920 you have in fear in the market, that fear gets 0:03:57.960 --> 0:04:00.680 priced in as a premium into the market. So there 0:04:00.720 --> 0:04:04.240 there is that still continue to overhang in this market. Okay, 0:04:04.280 --> 0:04:08.000 So if you're a driver and you're looking to put 0:04:08.040 --> 0:04:11.280 the gasoline or fuel in your automobile, should you expect 0:04:11.280 --> 0:04:14.680 prices to remain stable or at least lower going into 0:04:14.680 --> 0:04:17.880 the fall? Well going fall, we have to keep in mind, 0:04:17.960 --> 0:04:20.040 the investor listeners here has to keep in mind that 0:04:20.120 --> 0:04:23.720 come September fifteen, the rules begin to change with the 0:04:23.720 --> 0:04:26.359 type of gasolene that we put into our cars. And 0:04:26.360 --> 0:04:29.040 then that that transitions again in the month of October 0:04:29.080 --> 0:04:32.599 and once again in November, as you transition from a 0:04:33.040 --> 0:04:36.599 summer grade gasolene to quote unquote a winter grade gasolene 0:04:36.880 --> 0:04:40.040 now winter grade gasolene. Given the amount of chemical feedstocks 0:04:40.080 --> 0:04:43.880 to go into manufacturer, they're plentiful, so the manufacturer where 0:04:43.920 --> 0:04:48.200 the grade gasolene is a cheaper proposition. So inherently we 0:04:48.279 --> 0:04:50.400 are going to see lower oil prices. We're going to 0:04:50.640 --> 0:04:53.760 gasolene prices because of the transition for the types of 0:04:53.800 --> 0:04:58.080 gasolene that are going into the refinery, uh coming out 0:04:58.120 --> 0:05:00.559 of the refiner, I should say. So that's at him. 0:05:00.600 --> 0:05:03.200 I would expect to see lower prices because let's keep 0:05:03.240 --> 0:05:05.839 in mind, as you said, at the beginning of the summer, 0:05:05.880 --> 0:05:09.520 when demand was at all time high, we lost access 0:05:09.600 --> 0:05:12.320 to a lot of crude oil. We we've withstood that, 0:05:12.480 --> 0:05:14.680 and now we're going to a weak demand part of 0:05:14.720 --> 0:05:18.440 the year when we're manufacturing a cheaper gasoline going into 0:05:18.480 --> 0:05:23.440 that uh uh time frame. So I think at worst 0:05:24.040 --> 0:05:29.159 expect prices, you know, a slow, steady decline. But but 0:05:29.240 --> 0:05:31.400 certainly I would expect to see you're going to see 0:05:31.440 --> 0:05:35.240 a decline. That's just economically a truth that we'll see 0:05:35.240 --> 0:05:37.240 it over the next couple of months. All Right, I 0:05:37.279 --> 0:05:40.960 want you to put oil to the side. For gasoline 0:05:41.000 --> 0:05:43.159 to the side, I want you to talk about liquefied 0:05:43.240 --> 0:05:47.400 natural gas and the potential Chinese tariffs on l en 0:05:47.520 --> 0:05:52.239 g imports. Yeah, that that was a big surprise. Of course, 0:05:52.560 --> 0:05:58.120 China has identified US energy imports as tariffs, but they 0:05:58.160 --> 0:06:01.320 they had left out ellen G and I say that 0:06:01.360 --> 0:06:03.320 as a surprise, and I think it is catching the 0:06:03.320 --> 0:06:06.560 market a little bit off guard, given that China is 0:06:06.600 --> 0:06:09.760 in a massive transition to wean itself off of coal 0:06:10.480 --> 0:06:13.720 onto gas, and it's been a major buyer of l 0:06:13.800 --> 0:06:17.800 en G cargoes over the past year. Some estimates now 0:06:17.839 --> 0:06:22.400 have China as the world's largest buyer of l n G. Uh. 0:06:22.600 --> 0:06:26.919 So this was a surprise. I am skeptical China's making 0:06:26.920 --> 0:06:30.440 this threat. I am skeptical because we are we are 0:06:30.480 --> 0:06:32.320 coming out of the summer, which means we're going into 0:06:32.360 --> 0:06:34.880 the fall, and we're going into the peak demand season 0:06:34.920 --> 0:06:38.919 for Chinese gas consumption the winter. And the flexibility that 0:06:39.080 --> 0:06:44.440 us LG has it uh the cargoes can easily go 0:06:44.520 --> 0:06:47.240 into China. And this is what we saw last year. 0:06:47.560 --> 0:06:50.160 And when you have excess demand in the Chinese market, 0:06:50.160 --> 0:06:52.520 it was the us LG that fit that gap because 0:06:52.520 --> 0:06:55.560 of its flexibility. We gotta leave it there. Stephen Short 0:06:55.720 --> 0:06:59.240 is the president of the Short Group. He's based in Villanova, 0:06:59.400 --> 0:07:18.640 Pennsylvan and he's talking crude and liquefied natural gas. Right now, 0:07:18.720 --> 0:07:22.720 let's talk about CBS and the decline in the value 0:07:22.840 --> 0:07:28.080 of CBS shares since the accusations of sexual harassment against 0:07:28.120 --> 0:07:32.120 the CBS chief executive less Moonvest. Here to help us 0:07:32.200 --> 0:07:34.520 understand what's going on, is Tuna a MOBI. He is 0:07:34.560 --> 0:07:38.560 the senior media and entertainment analysts for cf R Research. 0:07:38.680 --> 0:07:42.760 Tuna always a pleasure. I was looking at the price 0:07:42.920 --> 0:07:47.239 of CBS stock and all right, fifty two bucks to share. 0:07:48.000 --> 0:07:55.160 But the decline since the revelation of these accusations against 0:07:55.240 --> 0:07:58.440 less Moonvest. Do you believe that that is really what 0:07:58.640 --> 0:08:02.720 is hurting the style? PIM? First off, good morning, Thanks 0:08:02.760 --> 0:08:06.360 for having me. Um. Absolutely, I think um. I think 0:08:06.360 --> 0:08:09.680 it does create an overhang on the stock, which is 0:08:09.760 --> 0:08:12.560 kind of why we downgraded it shares um from it 0:08:12.680 --> 0:08:16.000 by to a hold. Um. It's a little bit disappointing 0:08:16.080 --> 0:08:19.720 PIM that the company chose to conduct business as usual 0:08:19.800 --> 0:08:23.440 and the last earnings call as if wishing that the 0:08:23.560 --> 0:08:27.040 matter of the ongoing investigation will will just go away. 0:08:27.760 --> 0:08:30.320 But there is no questionably a cloud of overhang as 0:08:30.320 --> 0:08:34.840 a results of this on for investigation, and we think 0:08:34.880 --> 0:08:38.040 that as long as that cloud does not get resolved 0:08:38.080 --> 0:08:43.000 in a substantive manner that investors should tread cautiously even 0:08:43.040 --> 0:08:46.920 as the company has demonstrated continued strong fundamentals here. So 0:08:47.000 --> 0:08:52.120 we are cautiously, um, you know, waiting for the uh 0:08:52.280 --> 0:08:54.960 kind of the substance, and and based on that, we 0:08:55.080 --> 0:08:57.960 just think it's uh, it's prudent to to not add 0:08:58.040 --> 0:09:00.360 to current positions. Okay, but let me ask you a 0:09:00.400 --> 0:09:04.400 little bit. If indeed the company is doing well. We 0:09:04.559 --> 0:09:08.600 got the results last week. They're over the top business, 0:09:08.600 --> 0:09:15.640 exceeding estimates. They're adding subscribers at an accelerated rate. Their 0:09:15.840 --> 0:09:20.560 retransmission fees are also higher. Why wouldn't this be a 0:09:20.640 --> 0:09:24.079 good opportunity to buy a stock that's trading at fifty 0:09:24.160 --> 0:09:27.319 two that maybe just about let's say the middle of July, 0:09:27.960 --> 0:09:31.760 was trading nearly sixty dollars To share the simple answer, 0:09:31.880 --> 0:09:35.480 pay me that Less move is an integral part of 0:09:35.520 --> 0:09:38.600 the investments here. And there's a lot of investors that 0:09:38.640 --> 0:09:43.360 we speak to that actually brought into CBS precisely because 0:09:43.440 --> 0:09:47.520 Less and his team have demonstrated division to execute on 0:09:47.559 --> 0:09:51.840 that course strategy that you just alluded to. Growth in um, 0:09:51.880 --> 0:09:56.000 you know, non traditional revenue streams, whether it's UH streaming 0:09:56.280 --> 0:10:00.680 or content licensing UM over the time up you know, 0:10:00.880 --> 0:10:05.280 things of that nature retransmission. So I think the fundamentals 0:10:05.320 --> 0:10:09.160 definitely UM are very healthy, as you have alluded to. 0:10:09.320 --> 0:10:12.679 But right now I think, uh, there's a real uh 0:10:12.800 --> 0:10:16.280 some likelihood that some of the sharehold the value uh 0:10:16.360 --> 0:10:19.640 that Less Movements has created over the last decades, some 0:10:19.720 --> 0:10:22.760 of that could be uh eroded in the event that 0:10:22.840 --> 0:10:26.880 he could, you know, potentially be found uh uh you 0:10:26.920 --> 0:10:30.280 know somewhat complexity or even if should he leave. And 0:10:30.320 --> 0:10:34.520 remember there's still the issue of the potential merger with Votcom, 0:10:34.559 --> 0:10:38.959 which National Amusements is pushing uh and the litigation that 0:10:39.200 --> 0:10:41.960 is pending in that regard also creates an overhanging. There's 0:10:42.000 --> 0:10:44.480 a lot of CBS investors who would not like to 0:10:44.480 --> 0:10:47.520 see that merger happened. And to the extent that you 0:10:47.559 --> 0:10:51.320 know less who is the chief opponent of that marger 0:10:51.480 --> 0:10:54.640 to the extent that he's displaced, I think bringing together 0:10:54.720 --> 0:10:57.680 the two companies could also read some questions in the 0:10:57.720 --> 0:11:00.520 minds of CBS investors as to whether at is in 0:11:00.559 --> 0:11:03.880 fact something that will uh grow share all the value 0:11:03.920 --> 0:11:06.440 over the long term. Well to know I'm glad you 0:11:06.520 --> 0:11:09.719 mentioned Viacom. They're going to be reporting their results on 0:11:09.800 --> 0:11:14.480 Thursday before the market opens. What do you expect so 0:11:14.960 --> 0:11:18.000 CEO Robert Bakish. I think he's on on the on 0:11:18.040 --> 0:11:21.080 the good path, right. So he's articulated his vision to 0:11:21.240 --> 0:11:25.240 focus on the flagship brands, and we are actually encouraged 0:11:25.280 --> 0:11:27.679 by by some of the strides that have been made 0:11:27.800 --> 0:11:31.760 under his tenure. Um, you know, we're seeing some stabilization 0:11:31.800 --> 0:11:34.520 in the ratings that a Nickelodeon and and and MTV 0:11:34.640 --> 0:11:37.520 and v h one. Uh, there's still some challenges there, 0:11:37.559 --> 0:11:40.559 to be sure. At the Paramount Studio, I think we 0:11:40.720 --> 0:11:44.760 actually have been encouraged by a stemming of of the 0:11:44.760 --> 0:11:47.240 the the challenges that they've faced over the last several 0:11:47.360 --> 0:11:51.280 years where they've on the performed uh the other Hollywood studios. 0:11:51.320 --> 0:11:54.080 So I think there's also progress there in terms of 0:11:54.120 --> 0:11:58.600 the turnaround strategy. But we do expect to your question 0:11:58.679 --> 0:12:03.760 that there's still some underlying issues with maintaining some operating 0:12:03.800 --> 0:12:08.040 consistency on the advertising side. Uh. The company is still 0:12:08.200 --> 0:12:12.480 somewhat I think disadvantaged in this highly consolidated landscape where 0:12:12.520 --> 0:12:15.880 I think you see more uh, the bigger scale becomes 0:12:15.880 --> 0:12:19.120 even more important, which is why I think the merger 0:12:19.200 --> 0:12:23.320 with CBS is arguably much more crucial for Vatcom compared 0:12:23.360 --> 0:12:26.959 to CBS. Let's talk about another merger. Tell us about 0:12:27.120 --> 0:12:31.760 Disney and Century Fox. We get Disney results tomorrow after 0:12:31.840 --> 0:12:35.360 the close. The shares right now hitting a new fifty 0:12:35.400 --> 0:12:37.280 two week hi. The stock is up seven and a 0:12:37.360 --> 0:12:41.880 half percent this year. Correct. We are still very bullish 0:12:41.920 --> 0:12:45.560 on the shares of Disney. Withink the the the deal 0:12:45.679 --> 0:12:49.760 with Fox which just got approved by shareholders recently. I 0:12:49.800 --> 0:12:53.679 think that sets the company up very nicely to execute 0:12:53.679 --> 0:12:57.000 on its direct to consumer strategy as well as the 0:12:57.000 --> 0:13:00.040 advantages of scale. But I think, um, you know, the 0:13:00.360 --> 0:13:03.160 elephant in the room here is going to be how 0:13:03.920 --> 0:13:07.760 potentially h you know, Fox reacts to the bid for 0:13:08.040 --> 0:13:11.040 for Sky, which, as you know, Comcast have loved a 0:13:11.120 --> 0:13:13.920 much higher bid, and I think Fox has on until 0:13:14.040 --> 0:13:17.439 Thursday too to beat that offer. I I do believe 0:13:17.440 --> 0:13:19.600 that there's a very good chance that Fox can come 0:13:19.600 --> 0:13:23.440 back with a higher offer for uh First Sky, which 0:13:23.480 --> 0:13:26.080 could escalate the bid in war. And remember now that 0:13:26.200 --> 0:13:30.040 Disney has an agreement in place, there's also the likelihood 0:13:30.120 --> 0:13:33.040 we think that Disney could actually leap frog and make 0:13:33.120 --> 0:13:35.200 a food beat for Sky. So there's all kinds of 0:13:35.240 --> 0:13:39.719 moving parts here that will determine how, you know, the 0:13:40.000 --> 0:13:43.800 Sky UH issue gets resolved, and I think that's probably 0:13:43.840 --> 0:13:48.760 going to UH overshadow the results of these companies that 0:13:48.760 --> 0:13:51.200 have coming up in the next couple of days or so. Well, 0:13:52.160 --> 0:13:58.000 Century Fox reports on Wednesday just after the market closes. 0:13:58.280 --> 0:14:02.440 What do you think comcasts UH strategic response will be 0:14:02.520 --> 0:14:05.040 if they are not successful, as it looks as though 0:14:05.080 --> 0:14:09.040 they will not be Fox, I wouldn't rule them out 0:14:09.200 --> 0:14:10.920 as a matter of fact, Team. I would not even 0:14:10.960 --> 0:14:13.120 say that they would not be successful, because I think 0:14:13.160 --> 0:14:15.679 they made it pretty clear when they backed out of 0:14:15.720 --> 0:14:19.160 the you know, of the chase for Fox that UM 0:14:19.400 --> 0:14:21.760 Sky is now They're still focused, and I do believe 0:14:21.760 --> 0:14:24.720 that's a real chance that they could come back yet 0:14:25.120 --> 0:14:27.960 with a high offers. Should Disney and or Fox decide 0:14:28.040 --> 0:14:31.040 to UH to top camp Comcast offer on the table, 0:14:31.080 --> 0:14:34.920 I mean, Sky is an extremely strategic asset. We still 0:14:34.960 --> 0:14:37.720 think that Sky is probably on balanced the better match 0:14:37.840 --> 0:14:42.520 for Comcast rather than Disney, but I think expect both 0:14:42.560 --> 0:14:45.760 companies to go all out because I think the Sky 0:14:45.920 --> 0:14:50.160 assets are very unique skies as much as as as 0:14:50.200 --> 0:14:52.680 a bona fide content provider as it is is a 0:14:52.760 --> 0:14:58.800 satellite TV distributor, and the the most recent pact that 0:14:58.880 --> 0:15:02.760 they just signed with the Premierly was very very compelling, 0:15:03.280 --> 0:15:07.920 which makes it all the more valuable asset. Thanks very much. 0:15:07.960 --> 0:15:12.480 Tuna Amobi, Senior Media Entertainment Analysts at c f r 0:15:12.640 --> 0:15:34.080 A Research. What do the company's compona Arbor, how Arbor, 0:15:34.200 --> 0:15:38.400 Holmes and Westwood Meets and Bound having common? They're all 0:15:38.440 --> 0:15:42.560 companies that Warren Buffetts Berkshire Hathaway has acquired this year, 0:15:42.840 --> 0:15:46.040 and while the names may not be familiar, that's probably 0:15:46.080 --> 0:15:50.080 because they were not multibillion dollar deals. So here to 0:15:50.120 --> 0:15:52.880 tell us what Warren Buffett and Berkshire Hathaway are going 0:15:52.920 --> 0:15:55.080 to do with a hundred and eleven billion dollars worth 0:15:55.080 --> 0:15:59.480 of cash Our own Tara La Chappelle, Boomberg opinion columnist, 0:15:59.520 --> 0:16:02.520 Tara always a pleasure. Thanks for coming in, uh and 0:16:02.560 --> 0:16:05.120 I just want to note to follow Tara on Twitter 0:16:05.280 --> 0:16:08.800 just to go to at Tara lash L a c 0:16:09.280 --> 0:16:13.400 h Alright, Tara lash what what kind of acquisition does 0:16:13.440 --> 0:16:15.440 Warm Buffett need to make in order to really move 0:16:15.480 --> 0:16:18.200 the needle at Berkshire Hathaway. Well, their cash is over 0:16:18.240 --> 0:16:20.360 a hundred billion dollars, which has been the case for 0:16:20.400 --> 0:16:23.000 a while now. I mean, obviously they need a big deal. 0:16:23.320 --> 0:16:25.360 I think the challenge has been, you know, the same 0:16:25.400 --> 0:16:27.240 over the past year, which is that everything is very 0:16:27.240 --> 0:16:30.200 expensive compared to what a warm Buffett would like to 0:16:30.240 --> 0:16:32.440 pay for deals. And I don't know if he just 0:16:32.440 --> 0:16:35.400 bites the bullet and does something outside of evaluation he's 0:16:35.440 --> 0:16:38.040 comfortable with, I don't know if that makes sense, or 0:16:38.240 --> 0:16:41.400 does he finally give in and think about doing buy backs, 0:16:41.400 --> 0:16:44.440 which I think is something investors are becoming more open 0:16:44.480 --> 0:16:47.240 to as well, probably more so than the idea that's 0:16:47.280 --> 0:16:49.960 been floated around of them paying a one time dividend. Now, 0:16:50.040 --> 0:16:52.280 as I noted in the introduction, I mean, and I 0:16:52.320 --> 0:16:54.320 was kind of kidding because, I mean I had never 0:16:54.360 --> 0:16:57.240 heard of half of these companies. But uh, it's not 0:16:57.320 --> 0:17:01.520 as if they've been completely out of the acquisition business, right, 0:17:01.520 --> 0:17:06.639 I mean, because they bought Broun Group. They've also made 0:17:06.720 --> 0:17:12.159 an offer for about fifty of Riverside Capital Global, Aerospace, 0:17:12.280 --> 0:17:16.840 premium medical protection, medical liability, mutual insurance. I mean, these 0:17:16.840 --> 0:17:20.000 are they making a lot of acquisitions. They're just tiny, right, 0:17:20.000 --> 0:17:23.200 And I mean there was a large deal um last 0:17:23.280 --> 0:17:25.879 year when they bought a steak in Flying J Pilot, 0:17:25.920 --> 0:17:28.159 Flying J the stop company, which I think is a 0:17:28.640 --> 0:17:31.600 really great deal for brickshere, but down the road they'll 0:17:31.600 --> 0:17:34.280 be able to buy more of it. Um. It wasn't 0:17:34.320 --> 0:17:36.960 you know, a fifty billion dollar transaction that's really going 0:17:37.000 --> 0:17:38.399 to move the needle in the cash, But I think 0:17:38.440 --> 0:17:40.359 it was something that really matched with their strategy. So 0:17:40.400 --> 0:17:42.720 they're definitely active. You know, he has a lot of 0:17:42.720 --> 0:17:45.520 people working for him that are tasked with looking for deals, 0:17:45.600 --> 0:17:48.200 and I think there's just a lot of pressure right now, 0:17:48.640 --> 0:17:50.800 not just because the cash is so high, but because 0:17:50.840 --> 0:17:53.359 you know, Buffett is turning eighty eight later this month, 0:17:53.400 --> 0:17:55.679 and you don't want to leave his successor with the 0:17:55.760 --> 0:17:58.399 challenge of having all this cash and also trying to 0:17:58.440 --> 0:18:01.600 make investors comfortable with someone other than Buffet running the company. 0:18:01.640 --> 0:18:03.000 So I think he can make it a little bit 0:18:03.040 --> 0:18:05.320 easier for the next in line if he can do 0:18:05.359 --> 0:18:07.360 something to chip away at that cash with the deal 0:18:07.400 --> 0:18:10.680 that investors really like. Well, just to note that Flying 0:18:11.240 --> 0:18:14.879 J acquisition Pilot Flying JA acquisition that was only for 0:18:14.920 --> 0:18:17.919 about the company right exactly, so they have the option 0:18:17.960 --> 0:18:20.000 to buy more later on. But yeah, they don't. You know, 0:18:20.040 --> 0:18:23.280 it's not completely in the Berkshire house. It wasn't you know, 0:18:23.400 --> 0:18:25.120 the kind of deal that people were looking for, though 0:18:25.160 --> 0:18:27.000 I think it was a good one. Do you get 0:18:27.040 --> 0:18:31.280 the sense that investors in Berkshire Hathaway are eager for 0:18:31.440 --> 0:18:34.280 warm Buffet to spend the money or are they content 0:18:34.400 --> 0:18:37.359 to just sit and wait for a big market downturn 0:18:37.840 --> 0:18:41.160 and see an opportunity evolve. It depends who you ask. 0:18:41.280 --> 0:18:43.879 I've talked to a few different shareholders in recent weeks 0:18:43.880 --> 0:18:46.080 and months about this, and I think a lot of 0:18:46.119 --> 0:18:48.720 them are really patient, and then some other one, some 0:18:48.760 --> 0:18:51.280 of the younger ones that are looking ahead at you know, 0:18:51.320 --> 0:18:53.160 who's going to be running the company. I think they're 0:18:53.200 --> 0:18:55.280 looking at it from the standpoint that I was saying 0:18:55.320 --> 0:18:58.520 earlier that you know, it would be really hard for 0:18:58.640 --> 0:19:01.040 someone other than Buffett to do, would deal of that size. 0:19:01.040 --> 0:19:03.520 You know, he gets these deal sweeteners because of who 0:19:03.600 --> 0:19:06.000 he is and because the honor it's it's sort of 0:19:06.000 --> 0:19:08.960 perceived to be to be acquired by Berkshire. And I 0:19:09.040 --> 0:19:10.640 don't know if it's going to be that easy for 0:19:10.720 --> 0:19:13.760 his successor to to maintain that. So I think from 0:19:13.760 --> 0:19:16.000 that standpoint and makes sense to do as much as 0:19:16.040 --> 0:19:18.080 they can now with that money. But it's not as 0:19:18.160 --> 0:19:21.760 if Berkshire Hathaway is not being opportunistic in actually selling 0:19:22.040 --> 0:19:25.720 steaks as well. For example, that Philips sixties six divestiture 0:19:26.000 --> 0:19:28.680 right which some people were also puzzled by that. UM 0:19:28.720 --> 0:19:30.440 I was interested to see what they were going to 0:19:30.520 --> 0:19:32.280 do with Kraft Hinds. I think it's getting to the 0:19:32.320 --> 0:19:35.320 point where I really don't understand why Warren Buffett likes 0:19:35.320 --> 0:19:37.840 the stock so much. UM I don't know why Berkshire 0:19:37.880 --> 0:19:40.400 is still in it. I think that him stepping away 0:19:40.400 --> 0:19:42.479 from the board, while that was mostly due to him 0:19:42.480 --> 0:19:44.880 wanting to reduce his travel commitments, I think it could 0:19:44.960 --> 0:19:47.920 be a precursor to them backing off of Kraft Hinds. 0:19:47.960 --> 0:19:51.000 I just don't think if it never really did fit 0:19:51.320 --> 0:19:54.159 the kind of Berkshire investment that we're used to seeing, 0:19:54.200 --> 0:19:56.320 but he always was able to justify in what way 0:19:56.400 --> 0:19:59.200 is it because it didn't give them total control? Well? 0:19:59.240 --> 0:20:01.600 I think also the strategy you know, Kraft Times is 0:20:01.680 --> 0:20:04.480 run by three G private equity firm. They're really good 0:20:04.480 --> 0:20:08.000 at cutting costs and boosting profits. Craft Times became very 0:20:08.040 --> 0:20:10.800 easily one of the most profitable companies in the food space. 0:20:10.840 --> 0:20:13.280 But I think, you know, that's kind of maxing out now. 0:20:13.320 --> 0:20:16.239 They're not really investing for long term growth, even though 0:20:16.280 --> 0:20:19.040 they keep talking about it. And I think, you know, 0:20:19.080 --> 0:20:22.159 Warren Buffett looks long term, and when you look at 0:20:22.200 --> 0:20:23.960 Kraft Times, I don't know what that long term picture 0:20:25.240 --> 0:20:28.160 could be. Campbell, right, I mean they could buy Campbell Soup. 0:20:28.160 --> 0:20:29.960 I don't know that that does much for them. Sure, 0:20:30.000 --> 0:20:32.119 they could fire a lot of Campbell's people, cut a 0:20:32.119 --> 0:20:34.240 lot of costs U I'm sure they can make the 0:20:34.240 --> 0:20:38.159 business leaner, but that's a temporary boost. I think, you know, 0:20:38.200 --> 0:20:41.320 long term, Campbell Soup does not give them international exposure. 0:20:41.320 --> 0:20:45.280 It's almost entirely North America. And then you know, on 0:20:45.359 --> 0:20:47.760 top of it, it's not a growing business by any means. 0:20:47.840 --> 0:20:49.800 So I don't know how this really helps them in 0:20:49.840 --> 0:20:53.119 the long run. Is there a particular industry that you 0:20:53.160 --> 0:20:55.639 think that Warren Buffett and Berkshire hath to Weigh are 0:20:55.680 --> 0:20:59.200 focused on. I think they do. Like the consumer staples space. 0:20:59.240 --> 0:21:02.240 I think companies with really strong brand names, um, you know, 0:21:02.359 --> 0:21:06.520 Costco comes up a lot because Costco has this membership 0:21:06.560 --> 0:21:08.600 that's almost functions like a float, and it's that kind 0:21:08.640 --> 0:21:11.080 of brand, really strong brand equity that you could see 0:21:11.600 --> 0:21:14.359 being something almost like the premium that is paid in 0:21:14.400 --> 0:21:17.119 an insurance in exactly very similar. So I think he 0:21:17.160 --> 0:21:20.080 could be drawn to that business. Um, companies like Nike 0:21:20.240 --> 0:21:23.479 have come up. You know, uh, deer always comes up. 0:21:23.960 --> 0:21:27.840 Steak in Apple Apple. Yes, Um, a lot of industrial 0:21:27.880 --> 0:21:30.679 companies fit with the Berkshire strategy. But of course, you know, 0:21:30.720 --> 0:21:34.160 as we see with Apple, his investing lieutenants could take 0:21:34.200 --> 0:21:35.959 them a different direction. I mean it seems like they 0:21:35.960 --> 0:21:38.880 are open to tech or consumer electronics. So I think 0:21:38.920 --> 0:21:41.960 there's a lot out there. It's just prices the sticking point. Well, 0:21:42.080 --> 0:21:45.280 right now, the shares of Berkshire Hathaway, the A shares, 0:21:45.640 --> 0:21:48.920 they are up about five and a half percent so 0:21:49.000 --> 0:21:51.120 far this year, So I have to wait and see 0:21:51.160 --> 0:21:55.159 what happens. Much appreciated Tara la Chapelle are Bloomberg opinion 0:21:55.200 --> 0:21:59.640 columnists covering deals and that means Berkshire Hathaway as many 0:21:59.720 --> 0:22:02.960 other companies. And also once again, you can follow Tara 0:22:03.040 --> 0:22:05.880 on Twitter. Go ahead, I'm gonna let you say at 0:22:05.880 --> 0:22:08.000 Tara Lash. The last name is too long. Diffit into 0:22:08.040 --> 0:22:12.280 Twitter handle. It is t A r A l A 0:22:12.440 --> 0:22:27.560 c H. I'm pim Fox. If you believe technology skills 0:22:27.600 --> 0:22:31.600 will land you a job with regular pay increases, well 0:22:31.600 --> 0:22:34.240 you're gonna have to listen to Harley Lippman, the chief 0:22:34.280 --> 0:22:37.760 executive and the founder of Genesis ten. This is one 0:22:37.760 --> 0:22:41.440 of the nation's largest I T services and staffing firms, 0:22:41.760 --> 0:22:44.000 and he joins US now. Harley Lippman, thanks very much 0:22:44.000 --> 0:22:46.480 for being with us. So, if you believe that having 0:22:46.480 --> 0:22:49.080 those tech skills means you're gonna have a great job 0:22:49.160 --> 0:22:52.879 with regular pay increases, should you rethink that? No, not 0:22:52.960 --> 0:22:56.919 at all. Actually, um, even though wages have been flat 0:22:57.040 --> 0:23:01.240 for quite a while, especially because US big co operations 0:23:01.320 --> 0:23:05.479 have been able to leverage volume discounts, discounts when they 0:23:05.520 --> 0:23:08.960 work with vendors, and vendors provide a large number of 0:23:09.000 --> 0:23:13.280 I professionals, things are going to change. They're actually wages 0:23:13.320 --> 0:23:15.880 have been bottomed out and they're only going to go up. Well, 0:23:15.880 --> 0:23:19.000 when you say wages have bottomed out, why have wages 0:23:19.040 --> 0:23:23.920