1 00:00:04,760 --> 00:00:08,080 Speaker 1: Welcome to the Bloomberg pm L podcast. I'm Pim Fox. 2 00:00:08,119 --> 00:00:11,200 Speaker 1: Along with my co host Lisa Abramowitz. Each day we 3 00:00:11,280 --> 00:00:14,480 Speaker 1: bring you the most important, noteworthy, and useful interviews for 4 00:00:14,520 --> 00:00:16,880 Speaker 1: you and your money, whether at the grocery store or 5 00:00:16,920 --> 00:00:20,640 Speaker 1: the trading floor. Find the Bloomberg p L podcast on iTunes, 6 00:00:20,840 --> 00:00:31,080 Speaker 1: SoundCloud and at Bloomberg dot com. I want to learn 7 00:00:31,160 --> 00:00:34,680 Speaker 1: more about General motors announcement today that it was investing 8 00:00:34,720 --> 00:00:39,400 Speaker 1: one billion dollars in a US investment plan, spending on 9 00:00:39,520 --> 00:00:42,800 Speaker 1: models and plants that have long been in the work. 10 00:00:42,880 --> 00:00:45,880 Speaker 1: So I want to bring in David Welch, Detroit Bureau chief. 11 00:00:46,040 --> 00:00:49,320 Speaker 1: My first question for you, David, is how much of 12 00:00:49,360 --> 00:00:52,480 Speaker 1: this plan was already in the works and how much 13 00:00:52,520 --> 00:00:55,760 Speaker 1: of this is new as a result of some of 14 00:00:55,800 --> 00:00:59,680 Speaker 1: the cajoling from President elect Trump's team. It looks like 15 00:00:59,760 --> 00:01:01,520 Speaker 1: most of it, if not all of it. The only 16 00:01:01,560 --> 00:01:04,559 Speaker 1: part that we didn't really know about that that wouldn't 17 00:01:04,560 --> 00:01:08,360 Speaker 1: have been part of their initial capital expenditures plan might 18 00:01:08,400 --> 00:01:11,319 Speaker 1: be the the axle jobs coming back from Mexico. But 19 00:01:11,360 --> 00:01:14,839 Speaker 1: even there, uh GM shift things around all the time 20 00:01:15,600 --> 00:01:20,200 Speaker 1: based on demand for vehicles. Uh and and that kind 21 00:01:20,200 --> 00:01:22,320 Speaker 1: of thing you know that the White Coward jobs, which 22 00:01:22,319 --> 00:01:24,640 Speaker 1: is the bulk of this. UH. That's five thousand workers 23 00:01:24,680 --> 00:01:26,600 Speaker 1: who will be doing R and D, who will be 24 00:01:26,600 --> 00:01:30,280 Speaker 1: doing advanced development work on autonomous vehicles, and also some 25 00:01:30,440 --> 00:01:32,680 Speaker 1: people who are working for GM Financial, which is the 26 00:01:32,760 --> 00:01:35,000 Speaker 1: lending unit. UH. None of that would have been in 27 00:01:35,040 --> 00:01:37,760 Speaker 1: Mexico anyway, of course, but you know those are areas 28 00:01:37,840 --> 00:01:40,480 Speaker 1: that GM has been growing and adding more people. They 29 00:01:40,520 --> 00:01:43,520 Speaker 1: had announced a while ago they were expanding their technical 30 00:01:43,560 --> 00:01:45,440 Speaker 1: center north of Detroit, so a lot of that stuff 31 00:01:45,480 --> 00:01:49,840 Speaker 1: was already in the works. UM factories to UH down 32 00:01:49,920 --> 00:01:52,080 Speaker 1: in Mexico. They do make a lot of small cars 33 00:01:52,120 --> 00:01:54,919 Speaker 1: and things that are already well margin because the wages 34 00:01:54,960 --> 00:01:56,960 Speaker 1: are cheaper, and that's the only way you can even 35 00:01:57,000 --> 00:02:00,120 Speaker 1: have a hope of making money on compact cars. As 36 00:02:00,120 --> 00:02:02,120 Speaker 1: the market ships away from that stuff and they're building 37 00:02:02,120 --> 00:02:06,080 Speaker 1: more SUVs to meet demand, that stuff will naturally require 38 00:02:06,120 --> 00:02:09,359 Speaker 1: investment in the US. Well, David, you know, we got 39 00:02:09,400 --> 00:02:12,080 Speaker 1: a chance to spend some time with you at the 40 00:02:12,120 --> 00:02:15,560 Speaker 1: North American International Auto Show at Cobo Hall in Detroit, 41 00:02:15,680 --> 00:02:17,520 Speaker 1: and I'm wondering if you could give us a little 42 00:02:17,520 --> 00:02:20,600 Speaker 1: bit of a look into the detail of the auto 43 00:02:20,680 --> 00:02:25,280 Speaker 1: industry right now, what with the emissions scandal that plagues 44 00:02:25,360 --> 00:02:30,680 Speaker 1: not only VW's balance sheet but certainly Vexus. Sergio Marcione 45 00:02:30,760 --> 00:02:35,079 Speaker 1: of Fiat Chrysler, what are the big themes right now 46 00:02:35,120 --> 00:02:39,480 Speaker 1: that you need that you recommend people watch well. Regulations 47 00:02:39,520 --> 00:02:42,120 Speaker 1: a big part of it, and it's been a really 48 00:02:42,160 --> 00:02:44,440 Speaker 1: busy a few weeks in the auto industry for a 49 00:02:44,440 --> 00:02:47,960 Speaker 1: couple of reasons. You have the Obama administration leaving and 50 00:02:48,000 --> 00:02:50,280 Speaker 1: on their way out, they're trying to really make sure 51 00:02:50,840 --> 00:02:54,640 Speaker 1: that things like clean air regulations are are really adhered to. 52 00:02:55,160 --> 00:02:58,480 Speaker 1: So they they both the Justice Department and the ep 53 00:02:58,560 --> 00:03:01,680 Speaker 1: A really handled handed volks like and some really big 54 00:03:01,720 --> 00:03:04,560 Speaker 1: fines and some in dipmonds. They really went after them. 55 00:03:04,639 --> 00:03:08,359 Speaker 1: And they're going after fid Kreisler to make sure that 56 00:03:08,360 --> 00:03:11,320 Speaker 1: that the devices they had in their cars were not cheating. 57 00:03:11,360 --> 00:03:13,400 Speaker 1: They haven't said their cheat devices yet. There there are 58 00:03:13,440 --> 00:03:16,480 Speaker 1: eight devices that changed the emissions performance of the vehicle 59 00:03:16,560 --> 00:03:19,960 Speaker 1: under certain conditions, all kind of have those those are legal. 60 00:03:20,360 --> 00:03:22,200 Speaker 1: You have to tell the government they're there and they 61 00:03:22,240 --> 00:03:27,000 Speaker 1: didn't do that, so that is uh that would warrant 62 00:03:27,000 --> 00:03:30,280 Speaker 1: a penalty. Even if they are fine. They have to 63 00:03:30,320 --> 00:03:32,440 Speaker 1: be disclosed. Now, if it turns out that they were 64 00:03:32,440 --> 00:03:35,560 Speaker 1: done to cheat emissions tests, which is something Sergio Marchioni, 65 00:03:35,600 --> 00:03:39,400 Speaker 1: the CEO, has denied, then then the findes can get 66 00:03:39,440 --> 00:03:42,560 Speaker 1: really big like they were with Volkswagen. But at the 67 00:03:42,560 --> 00:03:46,760 Speaker 1: moment it's not really Uh, they haven't proven that. That's 68 00:03:46,800 --> 00:03:49,720 Speaker 1: the situation, you know, David, Just a turning back to GM. 69 00:03:49,720 --> 00:03:52,160 Speaker 1: I'm wondering, you know, how much of this is a 70 00:03:52,200 --> 00:03:55,080 Speaker 1: pup relations stunt or how much of this would have 71 00:03:55,160 --> 00:03:58,839 Speaker 1: been done in the past with a company extolling it's 72 00:03:58,920 --> 00:04:02,840 Speaker 1: it's upcoming expenditure plan, uh, in a release like this. 73 00:04:04,120 --> 00:04:05,960 Speaker 1: Is it just the media? Is it us that is 74 00:04:06,000 --> 00:04:08,280 Speaker 1: making a bigger deal about this because we're putting it 75 00:04:08,280 --> 00:04:11,960 Speaker 1: into our our pattern of trying to respond to President 76 00:04:11,960 --> 00:04:15,160 Speaker 1: elect Trump? Or has there been a material shift in 77 00:04:15,240 --> 00:04:19,080 Speaker 1: approach to how some of these car companies communicate. I 78 00:04:19,120 --> 00:04:21,160 Speaker 1: think a lot of it is the former. The General 79 00:04:21,240 --> 00:04:24,280 Speaker 1: Motors spends nine billion dollars a year in capital expenditures, 80 00:04:24,360 --> 00:04:26,919 Speaker 1: and that's new cars that are coming to market the 81 00:04:26,960 --> 00:04:29,240 Speaker 1: next few years, and that's tooling up the factories to 82 00:04:29,320 --> 00:04:31,440 Speaker 1: make those new cars. Every time you have a new car, 83 00:04:31,839 --> 00:04:34,640 Speaker 1: you've got a new chassis line, a new paint shop, 84 00:04:34,720 --> 00:04:38,240 Speaker 1: a new line for the body panels, new stampings for 85 00:04:38,279 --> 00:04:41,920 Speaker 1: those bodies, and all that requires a lot of capital investment, 86 00:04:42,000 --> 00:04:43,599 Speaker 1: and they do it to the tune of nine billion 87 00:04:43,600 --> 00:04:45,960 Speaker 1: dollars a year. Some of the vehicles they're coming out 88 00:04:46,000 --> 00:04:48,880 Speaker 1: within the next few years are support utility vehicles that 89 00:04:48,880 --> 00:04:52,480 Speaker 1: they didn't previously have. So between for example, between now 90 00:04:51,839 --> 00:04:55,320 Speaker 1: and Cadillac is supposed to get three new SUVs that 91 00:04:55,360 --> 00:04:58,520 Speaker 1: they don't have now. Why because Cadillac is behind in 92 00:04:58,640 --> 00:05:01,200 Speaker 1: luxury crossover issue use, which is the sweet spot of 93 00:05:01,200 --> 00:05:04,880 Speaker 1: the luxury market. They have one auld E BMW and 94 00:05:05,040 --> 00:05:07,839 Speaker 1: UH Mercedes have to three or four in their wind up, 95 00:05:07,880 --> 00:05:10,080 Speaker 1: so GM is just catching up. You're gonna need factories 96 00:05:10,120 --> 00:05:11,600 Speaker 1: to make those, so that's gonna be a big part 97 00:05:11,640 --> 00:05:14,159 Speaker 1: of the investment right there. So all that stuff was 98 00:05:14,200 --> 00:05:16,120 Speaker 1: in the work. So you're talking nine billion a year 99 00:05:16,160 --> 00:05:20,479 Speaker 1: between now and one billion dollars that they're announcing and 100 00:05:20,640 --> 00:05:24,680 Speaker 1: the jobs that would assemble those and a lot of 101 00:05:24,680 --> 00:05:28,480 Speaker 1: it has retained jobs, which means UH that had they 102 00:05:28,480 --> 00:05:30,760 Speaker 1: not put a vehicle in that existing factory, they would 103 00:05:30,760 --> 00:05:33,360 Speaker 1: have laid those people off, but instead they're giving them 104 00:05:33,400 --> 00:05:35,360 Speaker 1: something to do so they'll keep those jobs. A lot 105 00:05:35,400 --> 00:05:37,800 Speaker 1: of it is stuff that would have already happened. The 106 00:05:37,839 --> 00:05:40,360 Speaker 1: investment and autonomous vehicles and R and D would have 107 00:05:40,400 --> 00:05:43,200 Speaker 1: already happened. And they have already stated that they want 108 00:05:43,240 --> 00:05:45,880 Speaker 1: to grow their lending business to make more car woons 109 00:05:46,360 --> 00:05:48,320 Speaker 1: that already would that would have happened as well. The 110 00:05:48,360 --> 00:05:50,920 Speaker 1: only thing that might have happened is the four and 111 00:05:51,000 --> 00:05:54,640 Speaker 1: fifty jobs. These are people making axles coming back from 112 00:05:54,680 --> 00:05:57,159 Speaker 1: Mexico to the US, so that may have stayed down there. 113 00:05:57,640 --> 00:06:00,440 Speaker 1: So there's that. But a lot of this is just uh. 114 00:06:00,480 --> 00:06:03,160 Speaker 1: And they told me this moving forward. The announcements they 115 00:06:03,160 --> 00:06:07,200 Speaker 1: would have made basically under pressure from Trump and in 116 00:06:07,320 --> 00:06:10,200 Speaker 1: order to play nice with them. Remember, the automakers have 117 00:06:10,240 --> 00:06:12,640 Speaker 1: a lot of stuff they want out of the Trump administration, 118 00:06:13,120 --> 00:06:16,599 Speaker 1: which is maybe a little bit more relaxation on a 119 00:06:16,640 --> 00:06:22,000 Speaker 1: few economy standards, and also lower corporate tax rates are 120 00:06:22,000 --> 00:06:24,000 Speaker 1: a lot of things they like that the Obama administration 121 00:06:24,040 --> 00:06:25,640 Speaker 1: didn't want to do. We're going to leave that for 122 00:06:25,680 --> 00:06:27,640 Speaker 1: another time. I want to thank you very much. David 123 00:06:27,680 --> 00:06:43,320 Speaker 1: Welch is our Detroit bureau chief for Bloomberg News. I'm 124 00:06:43,320 --> 00:06:45,880 Speaker 1: trying to make sense of some of the moves in 125 00:06:45,960 --> 00:06:50,120 Speaker 1: the Pound following Prime Minister Theresa May's comments to diplomats 126 00:06:50,160 --> 00:06:54,640 Speaker 1: about how Britain plans to break away from the European Union. 127 00:06:55,000 --> 00:06:56,800 Speaker 1: For somebody with a lot more insight than I can 128 00:06:56,839 --> 00:07:00,000 Speaker 1: bring for this is Rob Hutton, UK Government and Polity 129 00:07:00,000 --> 00:07:02,840 Speaker 1: six reporter for Bloomberg, who is joining us now. Rob, 130 00:07:02,880 --> 00:07:06,120 Speaker 1: thank you so much. So what is the main takeaway 131 00:07:06,400 --> 00:07:09,760 Speaker 1: from the speech so far? Well, the main takeaway is 132 00:07:09,800 --> 00:07:12,880 Speaker 1: that she does actually have a plan. And I think 133 00:07:12,880 --> 00:07:14,880 Speaker 1: if you'd asked me this morning, is she going to 134 00:07:14,920 --> 00:07:17,200 Speaker 1: say very much? I just said I'm not sure she is, 135 00:07:17,240 --> 00:07:20,040 Speaker 1: you know, but we did get we got clarity on 136 00:07:20,040 --> 00:07:21,640 Speaker 1: a number of things. We've got clarity. She wants to 137 00:07:21,640 --> 00:07:25,360 Speaker 1: take Britain out of the European the European Union, single market, 138 00:07:25,400 --> 00:07:28,360 Speaker 1: all the way out. Um, we got clarity before you 139 00:07:28,400 --> 00:07:31,280 Speaker 1: continue with that. So what's the significance of that. Well, 140 00:07:31,520 --> 00:07:34,400 Speaker 1: that is the basis on which I in Britain can 141 00:07:34,440 --> 00:07:38,600 Speaker 1: sell something to Germany on exactly the same rules that 142 00:07:38,720 --> 00:07:42,320 Speaker 1: somebody in Germany can sell to somebody in Germany. She 143 00:07:42,360 --> 00:07:45,040 Speaker 1: wants to break from that. And now that's fantastically important 144 00:07:45,040 --> 00:07:47,520 Speaker 1: for manufactured so you can build a car in Britain 145 00:07:47,560 --> 00:07:50,040 Speaker 1: and sell it all the way across Europe with with 146 00:07:50,120 --> 00:07:54,160 Speaker 1: exactly the same regulations, and does she want to replace 147 00:07:54,160 --> 00:07:56,440 Speaker 1: it with something else? Well, what she wants to do, 148 00:07:56,560 --> 00:07:59,040 Speaker 1: she wants to she says. She said she wants to 149 00:07:59,080 --> 00:08:01,120 Speaker 1: keep access to the Stems Union. This is a slightly 150 00:08:01,160 --> 00:08:03,680 Speaker 1: tricky language. She wants to take Britain out of the 151 00:08:03,760 --> 00:08:08,600 Speaker 1: Customs Union which sort of underpins that, and but still 152 00:08:08,920 --> 00:08:11,600 Speaker 1: but still continue trading within it. And at that point 153 00:08:11,680 --> 00:08:13,440 Speaker 1: you then start to get into what she didn't say. 154 00:08:13,840 --> 00:08:16,280 Speaker 1: There are interesting questions about well, let's say I build 155 00:08:16,280 --> 00:08:17,880 Speaker 1: a car in Britain and then I want to sell 156 00:08:17,880 --> 00:08:20,200 Speaker 1: it to Germany. But we have a regulatory dispute. Where 157 00:08:20,240 --> 00:08:22,640 Speaker 1: are we going to resolve that? And let's say that 158 00:08:22,680 --> 00:08:25,560 Speaker 1: Germany changes its car regulations, or did the rather the 159 00:08:25,560 --> 00:08:28,800 Speaker 1: European Union changes its car regulations. Britain is no longer 160 00:08:28,840 --> 00:08:31,000 Speaker 1: bound by those, but effectively we kind of still are 161 00:08:31,040 --> 00:08:33,120 Speaker 1: because if we want to sell cars here and there, 162 00:08:33,520 --> 00:08:36,360 Speaker 1: so we already have that going on with Fiat and 163 00:08:36,760 --> 00:08:40,760 Speaker 1: VW because of emissions. Well that's you know, and who 164 00:08:40,800 --> 00:08:43,680 Speaker 1: who actually you know takes over as the regulator. But 165 00:08:43,760 --> 00:08:46,920 Speaker 1: in just the focus on Theresa May. For example, I'm 166 00:08:46,920 --> 00:08:49,920 Speaker 1: trying to understand that it says that the Prime Minister 167 00:08:49,960 --> 00:08:53,880 Speaker 1: has a twelve point brexit plan. Uh, is there any 168 00:08:53,960 --> 00:08:57,400 Speaker 1: and anything other than putting it to a vote at Parliament? 169 00:08:57,960 --> 00:09:00,600 Speaker 1: It is what else do we need? Else? Is the 170 00:09:00,600 --> 00:09:02,760 Speaker 1: most important thing that we need? The most important thing 171 00:09:02,800 --> 00:09:05,040 Speaker 1: is is leaving a single market. The second most important 172 00:09:05,040 --> 00:09:09,320 Speaker 1: thing is is keeping some kind of customs union access. 173 00:09:09,360 --> 00:09:12,680 Speaker 1: That's her compromise. The vote to Parliament, I think is 174 00:09:12,720 --> 00:09:14,640 Speaker 1: slightly a red herring. I've got to say, and if 175 00:09:14,880 --> 00:09:16,640 Speaker 1: that's what people are buying the pound on the back of, 176 00:09:16,720 --> 00:09:19,440 Speaker 1: then they should think about that because basically what that 177 00:09:19,440 --> 00:09:22,079 Speaker 1: means is in two years time, members of Parliament are asked, 178 00:09:22,240 --> 00:09:24,320 Speaker 1: do you want whatever deal it is I've got or 179 00:09:24,360 --> 00:09:25,920 Speaker 1: do you want to leave the European Union with no 180 00:09:26,040 --> 00:09:29,880 Speaker 1: deal at all? So so let's just undo all of 181 00:09:29,920 --> 00:09:32,960 Speaker 1: this and not leave is unlikely to be on the table. 182 00:09:33,600 --> 00:09:35,920 Speaker 1: The choice. The choice is going to be this deal 183 00:09:35,960 --> 00:09:38,920 Speaker 1: which you may not like, or no deal. I'm struggling 184 00:09:38,920 --> 00:09:42,000 Speaker 1: to understand. I mean, people talk about hard brexit versus 185 00:09:42,000 --> 00:09:45,960 Speaker 1: a soft brexit based on what you initially said. It 186 00:09:46,040 --> 00:09:48,040 Speaker 1: seems like that would be a hard breath. This is 187 00:09:48,040 --> 00:09:50,840 Speaker 1: a pretty hard brexit, yes, so so the soft that 188 00:09:50,920 --> 00:09:55,120 Speaker 1: the people who wanted something softer are all slightly stunned today, 189 00:09:55,160 --> 00:09:58,840 Speaker 1: I think because because there's there's there's no concessions to 190 00:09:58,880 --> 00:10:00,600 Speaker 1: them at all. There was an nice bit in the 191 00:10:00,720 --> 00:10:02,160 Speaker 1: in the speech where the Prime Minister said that we 192 00:10:02,240 --> 00:10:04,640 Speaker 1: all had to come together and sort of unite however 193 00:10:04,640 --> 00:10:06,920 Speaker 1: we voted in the referendum. But to be honest, there's 194 00:10:06,960 --> 00:10:08,640 Speaker 1: not very much for people who voted to stay to 195 00:10:09,000 --> 00:10:11,840 Speaker 1: unite around in this speech. I guess it's difficult to 196 00:10:11,840 --> 00:10:14,160 Speaker 1: figure out in some quarters whether there's a hard boiled 197 00:10:14,160 --> 00:10:16,720 Speaker 1: egg or a soft boiled. This is quite a hard boil. 198 00:10:17,880 --> 00:10:19,760 Speaker 1: But you say it's a hard boiled egg, and yet 199 00:10:19,800 --> 00:10:22,240 Speaker 1: you see that big rise in the value. Well, that's 200 00:10:22,240 --> 00:10:23,959 Speaker 1: what I wanted, That's what right, That's what I wanted 201 00:10:24,000 --> 00:10:28,160 Speaker 1: to expand on because why it is, as you said, 202 00:10:28,240 --> 00:10:30,640 Speaker 1: is this just a red red herring and someone's climbing 203 00:10:30,679 --> 00:10:35,240 Speaker 1: at something, And because I wonder is uh is President 204 00:10:35,240 --> 00:10:39,520 Speaker 1: elect Donald Trump in some way connected to well, I mean, 205 00:10:39,600 --> 00:10:41,200 Speaker 1: you know, there may be, there may be other reasons 206 00:10:41,200 --> 00:10:43,160 Speaker 1: and other things are going on. We had higher than 207 00:10:43,200 --> 00:10:45,719 Speaker 1: expected to expect inflation this morning, so the pound was 208 00:10:45,720 --> 00:10:49,000 Speaker 1: already on its way up before the speech began. The pound, 209 00:10:49,440 --> 00:10:52,360 Speaker 1: the pound did definitely rise when she she talked about 210 00:10:52,360 --> 00:10:55,560 Speaker 1: a vote and on the past the pound has written 211 00:10:55,559 --> 00:10:59,160 Speaker 1: on things that made Brexit look less likely. And I 212 00:10:59,160 --> 00:11:02,680 Speaker 1: I mean, were trying very hard to to tell people 213 00:11:03,120 --> 00:11:06,319 Speaker 1: don't don't count on that vote, don't sift the sand 214 00:11:06,360 --> 00:11:08,920 Speaker 1: for a diamond. You know that that that that vote 215 00:11:09,000 --> 00:11:11,520 Speaker 1: is highly unlikely to reverse the decision. And in fact, 216 00:11:11,520 --> 00:11:13,800 Speaker 1: when we tried, when when somebody asked the Prime Minister, 217 00:11:13,880 --> 00:11:15,960 Speaker 1: and when we've asked her office, well, come on, what 218 00:11:16,040 --> 00:11:17,760 Speaker 1: happens if the vote goes the other way? They just 219 00:11:17,840 --> 00:11:19,319 Speaker 1: laugh and say the vote won't go the other way 220 00:11:19,360 --> 00:11:21,640 Speaker 1: and they're right, who you know, how bad would a 221 00:11:21,679 --> 00:11:24,160 Speaker 1: deal have to be for you to decide? That's what 222 00:11:24,240 --> 00:11:29,439 Speaker 1: David Cameron said, didn't he? Yeah, well that's true. We 223 00:11:29,520 --> 00:11:31,760 Speaker 1: got to leave it there. Robin Huddon, UK Government and 224 00:11:31,800 --> 00:11:46,320 Speaker 1: Politics reporter for Bloomberg joining us from London. I want 225 00:11:46,360 --> 00:11:49,040 Speaker 1: to bring in Joe Carroll, who covers the oil industry 226 00:11:49,080 --> 00:11:51,760 Speaker 1: for us at Bloomberg, to give a little bit more 227 00:11:51,920 --> 00:11:56,520 Speaker 1: color around this. Excell and Mobile purchase of of shale 228 00:11:57,320 --> 00:12:00,240 Speaker 1: land and they based they paid five point six billion 229 00:12:00,320 --> 00:12:05,760 Speaker 1: dollars in shares for this premium basin land. And Joe, 230 00:12:05,800 --> 00:12:08,360 Speaker 1: I want to start with, was this an expected acquisition 231 00:12:08,400 --> 00:12:11,520 Speaker 1: of XS. Well, we've known Exon is looking around this 232 00:12:11,520 --> 00:12:14,360 Speaker 1: this region in Texas and New Mexico called the Permian Basin. 233 00:12:14,400 --> 00:12:18,240 Speaker 1: It's the biggest US oil field UM for for for 234 00:12:18,400 --> 00:12:22,480 Speaker 1: quite a while, we didn't expect a deal this gigantic 235 00:12:23,040 --> 00:12:24,560 Speaker 1: for x On. This is the biggest deal since they 236 00:12:24,559 --> 00:12:27,439 Speaker 1: bought Xto and that was their first for a into 237 00:12:27,520 --> 00:12:30,520 Speaker 1: into North American shale, and that was back in UM. 238 00:12:30,559 --> 00:12:33,720 Speaker 1: Not only are they paying five point six billion in shares. 239 00:12:34,240 --> 00:12:37,280 Speaker 1: If the resources as rich as UM you know, as 240 00:12:37,280 --> 00:12:39,600 Speaker 1: their geologists expected to turn out to be, they'll pay 241 00:12:39,600 --> 00:12:42,760 Speaker 1: another billion in cash over the next fifteen years. I 242 00:12:42,880 --> 00:12:45,360 Speaker 1: got to imagine that somehow we're going to work in 243 00:12:45,800 --> 00:12:49,040 Speaker 1: former chief executive of Exxon Mobile Rex Till listen into 244 00:12:49,040 --> 00:12:52,400 Speaker 1: the conversation. Yeah, they haven't told us, but it sure 245 00:12:52,760 --> 00:12:56,319 Speaker 1: appears almost certain that this was a transaction that began 246 00:12:56,600 --> 00:12:59,880 Speaker 1: before he left January one. These things just don't come 247 00:12:59,880 --> 00:13:02,480 Speaker 1: together that quickly. Well, do you think that it was 248 00:13:02,559 --> 00:13:06,360 Speaker 1: expedited to come out before Rex Silerson took the role 249 00:13:06,400 --> 00:13:09,960 Speaker 1: of Secretary of State under President elect Tromp. No, I 250 00:13:09,960 --> 00:13:12,640 Speaker 1: don't think the I think once once a company cut 251 00:13:12,679 --> 00:13:18,280 Speaker 1: ties with him, Um, they cut ties with him. So um. 252 00:13:18,440 --> 00:13:20,240 Speaker 1: Right now I'm looking at X and shares there up 253 00:13:20,280 --> 00:13:23,640 Speaker 1: a bit. But what could this do for X? And? 254 00:13:23,679 --> 00:13:26,080 Speaker 1: I mean, how much better of a position does this 255 00:13:26,160 --> 00:13:29,280 Speaker 1: put them in? Potentially this is a pretty even though 256 00:13:29,440 --> 00:13:31,640 Speaker 1: for X on five and a half billion dollars doesn't 257 00:13:31,679 --> 00:13:35,560 Speaker 1: sound like a lot of money. This gives them, yeah, 258 00:13:35,600 --> 00:13:38,600 Speaker 1: for for you know, for a company with more annual 259 00:13:38,679 --> 00:13:43,680 Speaker 1: sales that said, it's if at least twenty years of drilling, 260 00:13:43,679 --> 00:13:46,360 Speaker 1: it's an enormous amount of oil. It's three something billion 261 00:13:46,440 --> 00:13:49,439 Speaker 1: dollars worth of oil locked on the ground there. It's 262 00:13:49,480 --> 00:13:52,800 Speaker 1: pretty low risk because because the superman folks have been 263 00:13:52,840 --> 00:13:55,959 Speaker 1: drilling out there for for almost a century. Um. It's 264 00:13:56,000 --> 00:13:58,280 Speaker 1: interesting to me because it strikes me that this is 265 00:13:58,320 --> 00:14:00,680 Speaker 1: some of the consolidation that a lot of oil analysts 266 00:14:00,679 --> 00:14:03,720 Speaker 1: have been waiting for. People said that because of the 267 00:14:04,200 --> 00:14:07,080 Speaker 1: drop in oil prices, that we have to see this 268 00:14:07,160 --> 00:14:10,440 Speaker 1: consolidation by the biggest oil companies. Do you expect there 269 00:14:10,480 --> 00:14:14,079 Speaker 1: to be more announcements like this from exces, rivals, from everybody. 270 00:14:14,120 --> 00:14:16,920 Speaker 1: You know. Yesterday was was the Clayton Williams Noble deal. 271 00:14:17,160 --> 00:14:19,320 Speaker 1: Um that that Dave Wilson just referenced, And that's in 272 00:14:19,320 --> 00:14:22,400 Speaker 1: the same area that's in this uh Delaware basin, which 273 00:14:22,400 --> 00:14:25,280 Speaker 1: is a subrecon region of the Permian there on the 274 00:14:25,320 --> 00:14:28,040 Speaker 1: Texas New Mexico border. It's the hottest m and A 275 00:14:28,120 --> 00:14:30,720 Speaker 1: play in oil anywhere in the world. Um. I think 276 00:14:30,760 --> 00:14:35,040 Speaker 1: it attracted the quarter of about of all the oil 277 00:14:35,160 --> 00:14:40,440 Speaker 1: M and A dollars. That's that's from according to Wood mackenzie. Um. Yeah, 278 00:14:40,480 --> 00:14:42,200 Speaker 1: of course this is just going to keep steam rolling on. 279 00:14:43,160 --> 00:14:45,960 Speaker 1: At what point does the price just become too expensive, 280 00:14:46,080 --> 00:14:50,800 Speaker 1: Because if you've got ample supply in a domestic market, 281 00:14:51,720 --> 00:14:55,160 Speaker 1: then you face the prospect of having more supply than 282 00:14:55,160 --> 00:14:57,800 Speaker 1: your needs. You mean, you're talking about the price of oil. 283 00:14:59,360 --> 00:15:01,640 Speaker 1: As far as x sun goes there, they're confident they'll 284 00:15:01,680 --> 00:15:04,000 Speaker 1: they'll get double digit returns as low you know, with 285 00:15:04,080 --> 00:15:08,200 Speaker 1: oil as low as forty up barrel. I believe Nobile 286 00:15:08,240 --> 00:15:10,640 Speaker 1: said the same thing yesterday. So forty dollars is the 287 00:15:10,680 --> 00:15:13,080 Speaker 1: breakpoint for when you flipped the switch to get the 288 00:15:13,120 --> 00:15:17,040 Speaker 1: shale out. The shale oil out well forty dollars is 289 00:15:17,080 --> 00:15:20,560 Speaker 1: the break point where you're making you return. It can 290 00:15:20,560 --> 00:15:23,480 Speaker 1: certainly go lower than that. Joe, has it gotten cheaper 291 00:15:23,800 --> 00:15:28,480 Speaker 1: to extracate oil from shell drilling. What's happened is they've 292 00:15:28,680 --> 00:15:31,720 Speaker 1: yeah on a per unit basis, sure, because what they've 293 00:15:31,720 --> 00:15:34,080 Speaker 1: done is they just drill these sideways wells for for 294 00:15:34,120 --> 00:15:36,600 Speaker 1: a mile for two miles. Now, it costs more to 295 00:15:36,680 --> 00:15:38,760 Speaker 1: drill each one of those wells, but the amount of 296 00:15:38,760 --> 00:15:41,520 Speaker 1: oil that comes gushing out is so much more massive 297 00:15:42,360 --> 00:15:44,720 Speaker 1: that your per unit costs are a lot lower. Because 298 00:15:44,720 --> 00:15:46,320 Speaker 1: that was one of the big obstacles right in the 299 00:15:46,440 --> 00:15:48,360 Speaker 1: U s. It's a lot more expensive to extracate oil 300 00:15:48,400 --> 00:15:50,840 Speaker 1: than it is, for example, in Saudi Arabia and Iran. 301 00:15:50,920 --> 00:15:57,560 Speaker 1: Correct correct um. So going forward is could any regulations 302 00:15:57,600 --> 00:16:00,880 Speaker 1: actually help Exxon access more of the land that they 303 00:16:00,880 --> 00:16:02,560 Speaker 1: just purchased. Could that have played into this at all 304 00:16:02,640 --> 00:16:05,880 Speaker 1: or not? Really? You know, unlike the rest of the world, 305 00:16:05,880 --> 00:16:09,240 Speaker 1: in the United States, almost everything that gets drilled for 306 00:16:09,240 --> 00:16:12,760 Speaker 1: oil and gas is privately owned. Uh, you know, it's 307 00:16:12,800 --> 00:16:14,720 Speaker 1: not like working in Canada or the UK or really 308 00:16:14,720 --> 00:16:16,520 Speaker 1: anywhere else in the world where the government or the 309 00:16:16,560 --> 00:16:21,400 Speaker 1: crown owns the resource, so so and and and given 310 00:16:21,400 --> 00:16:23,200 Speaker 1: the fact that most of the regulation comes at the 311 00:16:23,200 --> 00:16:25,920 Speaker 1: state level, I don't see a huge impact from from 312 00:16:25,960 --> 00:16:29,800 Speaker 1: from the federal situation. Well, Joe tell us about potential 313 00:16:29,840 --> 00:16:34,440 Speaker 1: price changes fifty three fifty two dollars a barrel. The 314 00:16:34,600 --> 00:16:38,320 Speaker 1: OPEC meeting is in May. You've got this confluence of 315 00:16:38,360 --> 00:16:44,600 Speaker 1: shale oil plus a new president, President elect Donald Trump. Uh, 316 00:16:44,640 --> 00:16:47,040 Speaker 1: what do you see in the next ninety days. In 317 00:16:47,120 --> 00:16:48,920 Speaker 1: the next ninety days, I think you continue to see 318 00:16:49,000 --> 00:16:51,280 Speaker 1: more deals in the Permian, more m and a UM 319 00:16:51,320 --> 00:16:54,760 Speaker 1: as long as these companies can can lock in prices 320 00:16:54,800 --> 00:16:57,680 Speaker 1: by by you know, with forward hedges. Uh, they're just 321 00:16:57,680 --> 00:17:00,480 Speaker 1: gonna they're gonna drill as much as they can, you know, 322 00:17:00,520 --> 00:17:03,640 Speaker 1: and make their returns. UM. I think it was the 323 00:17:03,680 --> 00:17:06,640 Speaker 1: Southeast was yesterday the day before said they don't expect 324 00:17:07,600 --> 00:17:10,359 Speaker 1: expect the cuts, the open cuts to last through June. 325 00:17:10,960 --> 00:17:14,920 Speaker 1: So so I think we really see see an impact there. 326 00:17:15,280 --> 00:17:16,560 Speaker 1: All right. I have a feeling you're going to be 327 00:17:16,680 --> 00:17:18,879 Speaker 1: very busy, and we thank you for it. Joe Carroll 328 00:17:19,080 --> 00:17:23,960 Speaker 1: is Energy America's reporter for Bloomberg, giving us some perspective 329 00:17:23,960 --> 00:17:28,240 Speaker 1: and additional information about x On Mobile paying five point 330 00:17:28,359 --> 00:17:33,440 Speaker 1: six billion dollars to expand it's acreage in uh Western Texas. 331 00:17:44,480 --> 00:17:46,520 Speaker 1: Here to tell us about some innovation when it comes 332 00:17:46,520 --> 00:17:48,840 Speaker 1: perhaps to your portfolio, but it might also include some 333 00:17:48,920 --> 00:17:53,119 Speaker 1: healthcare stocks, is Mike Bailey. He is the chief of 334 00:17:53,119 --> 00:17:55,200 Speaker 1: financial Officer I beg your pardon to see f A 335 00:17:55,320 --> 00:17:59,560 Speaker 1: and director of Research at FBB Capital Markets. Hey Mike Bailey, 336 00:17:59,600 --> 00:18:02,120 Speaker 1: I'm sorry, I thought you got a new title there, 337 00:18:02,119 --> 00:18:05,119 Speaker 1: but you didn't. Good morning morning at least thanks for 338 00:18:05,119 --> 00:18:07,359 Speaker 1: having me. All right, I'm gonna get some kind of 339 00:18:07,359 --> 00:18:10,240 Speaker 1: surprised news there, no no, no, no more surprise that 340 00:18:10,240 --> 00:18:14,840 Speaker 1: we've got enough people doing surprise news. It's ok. You're 341 00:18:14,880 --> 00:18:19,600 Speaker 1: you're managing almost a billion at FBV Capital. What are 342 00:18:19,640 --> 00:18:22,359 Speaker 1: you telling your your client base right now to do 343 00:18:22,760 --> 00:18:26,040 Speaker 1: or not do well? I think as we look at 344 00:18:26,080 --> 00:18:29,879 Speaker 1: the very short term and ideally we do next three months. Sure, 345 00:18:30,160 --> 00:18:32,720 Speaker 1: so I think we are a bit concerned here. Um, 346 00:18:32,800 --> 00:18:34,919 Speaker 1: you know, I think we're we've got the uh the 347 00:18:34,960 --> 00:18:38,280 Speaker 1: Trump inauguration coming up here in a few days. I 348 00:18:38,320 --> 00:18:41,960 Speaker 1: think will probably be a good year, maybe not quite 349 00:18:41,960 --> 00:18:44,760 Speaker 1: as good as what what are you concerned about Yeah, 350 00:18:44,760 --> 00:18:47,200 Speaker 1: I think so if we want to kind of create 351 00:18:47,320 --> 00:18:49,639 Speaker 1: a new word here, people love Brexit and flash crash 352 00:18:49,680 --> 00:18:53,040 Speaker 1: and such, so Trump's secution, uh doesn't quite roll off 353 00:18:53,040 --> 00:18:55,080 Speaker 1: the tongue. But I think we're getting to a phase 354 00:18:55,119 --> 00:18:59,280 Speaker 1: where investors expect Trump to execute and we're getting you know, 355 00:18:59,280 --> 00:19:02,000 Speaker 1: the rubbers about to hit the road here Friday, and 356 00:19:02,040 --> 00:19:06,200 Speaker 1: I think our concerns are basically investors are hoping that 357 00:19:06,240 --> 00:19:08,480 Speaker 1: Trump is going to act on some of his promises, 358 00:19:08,520 --> 00:19:11,639 Speaker 1: you know, whether that's lower taxes, whether that's juicing up 359 00:19:11,640 --> 00:19:14,359 Speaker 1: the economy, um. And if that doesn't happen, or if 360 00:19:14,359 --> 00:19:17,040 Speaker 1: it happens later than investors expect, you're going to see 361 00:19:17,040 --> 00:19:19,439 Speaker 1: some downside. So I think for us, um, there's a 362 00:19:19,440 --> 00:19:22,200 Speaker 1: little bit more hope in the market right now than 363 00:19:22,560 --> 00:19:24,600 Speaker 1: what you might expect to see in the very short term. 364 00:19:24,920 --> 00:19:27,320 Speaker 1: So you know, also, we sort of haven't seen much 365 00:19:27,440 --> 00:19:31,560 Speaker 1: volatility at all really since you know, the election actually, 366 00:19:31,800 --> 00:19:33,680 Speaker 1: so I think putting some of those pieces together, we 367 00:19:33,720 --> 00:19:35,879 Speaker 1: wouldn't be surprised to see a little bit of downside 368 00:19:35,920 --> 00:19:38,159 Speaker 1: you know, later this week, early next week, and then 369 00:19:38,200 --> 00:19:40,720 Speaker 1: I think investors will will catch their breath, you will 370 00:19:40,760 --> 00:19:43,160 Speaker 1: see the new administrations start to roll out some policies, 371 00:19:43,400 --> 00:19:45,720 Speaker 1: and I think that some of those expectations will get 372 00:19:45,720 --> 00:19:48,200 Speaker 1: realized as we head towards the later latter part of 373 00:19:48,200 --> 00:19:49,800 Speaker 1: the year. Mike, I thought that it was interesting that 374 00:19:49,840 --> 00:19:52,480 Speaker 1: you said that you think that there's roughly upside and 375 00:19:52,520 --> 00:19:55,080 Speaker 1: five percent downside for the year, sort of to your 376 00:19:55,119 --> 00:19:57,320 Speaker 1: point that the near term perhaps downside, but over the 377 00:19:57,359 --> 00:19:59,720 Speaker 1: longer term upside. I thought it was also interesting that 378 00:19:59,800 --> 00:20:05,920 Speaker 1: you mentioned industrials and healthcare as all whether sectors, particularly healthcare. 379 00:20:06,000 --> 00:20:08,080 Speaker 1: This was interesting to me because we've seen a lot 380 00:20:08,119 --> 00:20:11,680 Speaker 1: of volatility in biopharmaceutical stocks and as as well as 381 00:20:11,720 --> 00:20:15,160 Speaker 1: a hospital shares on the back of Trump's comments. So 382 00:20:15,400 --> 00:20:18,480 Speaker 1: why is this such a stalwart industry? You know, I 383 00:20:18,520 --> 00:20:20,520 Speaker 1: think when we look at healthcare, and I am a 384 00:20:20,560 --> 00:20:22,400 Speaker 1: bit biased, used to be a healthcare analysts, I've spent 385 00:20:22,440 --> 00:20:24,160 Speaker 1: a lot of time looking at it. Um, I do 386 00:20:24,480 --> 00:20:26,240 Speaker 1: think I think there are a lot of spaces within 387 00:20:26,359 --> 00:20:28,359 Speaker 1: healthcare where or you can do well over a number 388 00:20:28,359 --> 00:20:31,119 Speaker 1: of years, and it may not necessarily be you know, 389 00:20:31,200 --> 00:20:33,120 Speaker 1: the big farm of the big biotech that folks think 390 00:20:33,160 --> 00:20:35,240 Speaker 1: about is kind of the headlines. Uh you know, maybe 391 00:20:35,280 --> 00:20:38,280 Speaker 1: it's uh services maybe it's a managed care insurance stock, 392 00:20:38,440 --> 00:20:41,479 Speaker 1: maybe it's a MidCap medical device dock. But there are 393 00:20:41,520 --> 00:20:44,920 Speaker 1: some companies that in our view are changing and growing 394 00:20:45,080 --> 00:20:47,600 Speaker 1: pretty meaningfully over a number of years. Uh. And they've 395 00:20:47,640 --> 00:20:50,080 Speaker 1: got you know, they're diversified, so if the US is 396 00:20:50,119 --> 00:20:52,280 Speaker 1: down one year, you know, maybe they'll get helped uh 397 00:20:52,320 --> 00:20:55,440 Speaker 1: internationally the next year. UM. So there are some spaces 398 00:20:55,440 --> 00:20:57,600 Speaker 1: we like. However, as you mentioned, there are certainly some 399 00:20:57,680 --> 00:21:00,480 Speaker 1: areas that had a great bull run or two three, 400 00:21:00,560 --> 00:21:02,359 Speaker 1: four years and that kind of came to a screeching hall. 401 00:21:02,480 --> 00:21:04,880 Speaker 1: So we're we're awfully cautious of some of those spaces 402 00:21:04,920 --> 00:21:08,240 Speaker 1: where you know, whether it's Trump's you know, drug pricing tweets, 403 00:21:08,240 --> 00:21:10,560 Speaker 1: things like that, that where you can get in trouble 404 00:21:10,560 --> 00:21:12,640 Speaker 1: with some of these companies. So we're trying to look 405 00:21:12,840 --> 00:21:14,879 Speaker 1: look across the whole space and find some pretty interesting 406 00:21:14,960 --> 00:21:17,440 Speaker 1: the names that are growing nicely. Are you finding any 407 00:21:17,440 --> 00:21:23,000 Speaker 1: opportunities outside of just the broadly traded shares just in 408 00:21:23,080 --> 00:21:26,080 Speaker 1: terms of sort of the traditional US pharmaceutical stocks, are 409 00:21:26,119 --> 00:21:28,840 Speaker 1: looking at other kinds of healthcare companies or just you know, 410 00:21:28,920 --> 00:21:31,520 Speaker 1: other assets of the healthcare companies, I mean, our stocks 411 00:21:31,560 --> 00:21:34,280 Speaker 1: the best way in yeah, good, good points. So I mean, 412 00:21:34,520 --> 00:21:37,280 Speaker 1: as a sort of generalist investment firm, we do equities, 413 00:21:37,280 --> 00:21:39,679 Speaker 1: we do fixed income, preferred things like that, so we 414 00:21:39,680 --> 00:21:43,600 Speaker 1: we look across the capital structure in general. For healthcare, 415 00:21:43,640 --> 00:21:45,960 Speaker 1: I think we tend to favor more on the equity side, 416 00:21:45,960 --> 00:21:49,120 Speaker 1: but we certainly owned plenty of corporate debt for for 417 00:21:49,280 --> 00:21:52,439 Speaker 1: healthcare companies. Um. I think though, looking at at healthcare 418 00:21:52,440 --> 00:21:55,119 Speaker 1: in particular, you do get some nice yields because I 419 00:21:55,160 --> 00:21:56,840 Speaker 1: think that it is a space if you do own it, 420 00:21:56,880 --> 00:21:59,200 Speaker 1: if you're overweight, you can certainly get some decent yield 421 00:21:59,240 --> 00:22:02,400 Speaker 1: and maybe you don't have to be overweight bonds for example, 422 00:22:02,400 --> 00:22:04,880 Speaker 1: within healthcare. But there's some certainly some ways to play 423 00:22:04,880 --> 00:22:07,040 Speaker 1: it on the preferred side. For example, not quite as 424 00:22:07,080 --> 00:22:10,399 Speaker 1: many healthcare names available there, but certainly a handful to 425 00:22:10,480 --> 00:22:13,439 Speaker 1: choose from. Hey, Mike, what's been the best and worst 426 00:22:13,480 --> 00:22:16,359 Speaker 1: call that you've that you've made over let's say, the 427 00:22:16,440 --> 00:22:19,720 Speaker 1: last twelve months. So we can either talk about it 428 00:22:19,720 --> 00:22:22,080 Speaker 1: within healthcare or just broad No, no, broadly, brother, I 429 00:22:22,119 --> 00:22:23,679 Speaker 1: want to know, like, for example, you know, were you 430 00:22:23,720 --> 00:22:26,000 Speaker 1: a bond bull when when everyone you know tried to 431 00:22:26,000 --> 00:22:28,200 Speaker 1: get out of the gate and then you got head 432 00:22:28,200 --> 00:22:31,440 Speaker 1: faked out of that one and got you know, bullish again. Yeah, 433 00:22:31,520 --> 00:22:33,240 Speaker 1: I mean, and so if we look you know, across 434 00:22:33,400 --> 00:22:35,440 Speaker 1: all markets, I think one of the areas we did 435 00:22:35,480 --> 00:22:37,400 Speaker 1: maybe a bit better. This goes back a little bit 436 00:22:37,400 --> 00:22:39,240 Speaker 1: over a year. We were a bit cautious on high 437 00:22:39,320 --> 00:22:42,920 Speaker 1: yield kind of heading into the UM energy junk bond 438 00:22:42,960 --> 00:22:46,959 Speaker 1: meltdown in late uh kind of early sixteen, So we 439 00:22:46,960 --> 00:22:50,639 Speaker 1: were so like a medium term call. Yeah, So I 440 00:22:50,680 --> 00:22:52,119 Speaker 1: think that that was sort of the call there, and 441 00:22:52,200 --> 00:22:54,520 Speaker 1: high yield, I think from a negative you know, I 442 00:22:54,560 --> 00:22:56,520 Speaker 1: think we probably could have taken a look at our 443 00:22:56,520 --> 00:22:59,800 Speaker 1: treasury exposure a bit differently heading into the election. I 444 00:22:59,800 --> 00:23:01,520 Speaker 1: think that's certainly in space where I think a lot 445 00:23:01,520 --> 00:23:03,880 Speaker 1: of folks will were caught off guard, and we're probably 446 00:23:04,080 --> 00:23:06,480 Speaker 1: there as well. But UM in general, I think we 447 00:23:06,640 --> 00:23:08,439 Speaker 1: try to be a bit more nimble on the equity 448 00:23:08,480 --> 00:23:11,480 Speaker 1: side from the on the bond from bomb perspective, we 449 00:23:11,520 --> 00:23:13,960 Speaker 1: tend to be a little bit more patient, I think, 450 00:23:13,960 --> 00:23:15,959 Speaker 1: and and sort of realize that the bond market does 451 00:23:16,000 --> 00:23:18,439 Speaker 1: move a bit more slowly compared to equities, but we 452 00:23:18,480 --> 00:23:20,960 Speaker 1: do certainly take a look at each asset class out 453 00:23:20,960 --> 00:23:22,720 Speaker 1: there well, I've just want to do you have to 454 00:23:22,760 --> 00:23:26,040 Speaker 1: add another metric now and I'm serious here when it 455 00:23:26,080 --> 00:23:29,879 Speaker 1: comes to tweet volume of a of a particular company 456 00:23:30,080 --> 00:23:34,360 Speaker 1: or a particular industry, because uh, we have a function 457 00:23:34,440 --> 00:23:36,760 Speaker 1: on the Bloomberg that offers that. I'm sure there are 458 00:23:36,760 --> 00:23:41,400 Speaker 1: many others, but you know, certainly not like this and integrated. 459 00:23:41,440 --> 00:23:44,439 Speaker 1: But so we're able to see this as and then 460 00:23:44,520 --> 00:23:47,840 Speaker 1: you correlated to you know, news articles read and uh 461 00:23:48,160 --> 00:23:51,399 Speaker 1: so on. Do you think that that is a valid 462 00:23:51,480 --> 00:23:53,439 Speaker 1: you know, a research criteria that's going to have to 463 00:23:53,480 --> 00:23:56,720 Speaker 1: be added into your perspective? Uh? You know, I think 464 00:23:56,800 --> 00:23:59,640 Speaker 1: if we get the next four years looking like last 465 00:23:59,680 --> 00:24:02,080 Speaker 1: suck couple of months, that that's certainly in a possibility. 466 00:24:02,280 --> 00:24:04,400 Speaker 1: I think certainly a lot of smart investors are using 467 00:24:04,440 --> 00:24:06,760 Speaker 1: every data set they can, and if it turns out 468 00:24:06,760 --> 00:24:09,520 Speaker 1: that tweets become highly correlated with you know a lot 469 00:24:09,560 --> 00:24:11,680 Speaker 1: of you know, blue chips or big companies out there, 470 00:24:11,720 --> 00:24:14,760 Speaker 1: is that's certainly relevant. Um. I think another point that 471 00:24:14,760 --> 00:24:17,040 Speaker 1: that we sort of think about is just volatility in general. 472 00:24:17,320 --> 00:24:20,000 Speaker 1: So if you've got a lot of presidential tweets out 473 00:24:20,000 --> 00:24:22,239 Speaker 1: there driving market volatility, that's something we want to take 474 00:24:22,240 --> 00:24:24,560 Speaker 1: advantage of a couple of things we're looking at is 475 00:24:24,560 --> 00:24:26,720 Speaker 1: some of the for example, online brokers or some of 476 00:24:26,720 --> 00:24:29,800 Speaker 1: the exchanges out there. I think our position pretty well 477 00:24:29,840 --> 00:24:32,399 Speaker 1: to to to improve as you get more volatility. So 478 00:24:32,400 --> 00:24:34,399 Speaker 1: that's one of the ways we're playing it without trying 479 00:24:34,400 --> 00:24:36,719 Speaker 1: to to get as focused as you know, looking at 480 00:24:36,720 --> 00:24:38,919 Speaker 1: individual companies that may or may not have a tweet 481 00:24:38,920 --> 00:24:41,200 Speaker 1: coming out that could drive it intra day. Well, thank 482 00:24:41,240 --> 00:24:43,560 Speaker 1: you so much for joining us. Mike Bailey, CFA and 483 00:24:43,640 --> 00:24:47,560 Speaker 1: Director of Research at FBB Capital Partners talking about why 484 00:24:47,680 --> 00:24:50,800 Speaker 1: over the long term, healthcare shares as well as industrials 485 00:24:51,480 --> 00:24:53,679 Speaker 1: will continue to do well. And Pam, I find that 486 00:24:53,760 --> 00:24:57,200 Speaker 1: interesting because, particularly in the industrial sector, we saw such 487 00:24:57,760 --> 00:24:59,480 Speaker 1: a rally last year at the end of the year 488 00:25:00,000 --> 00:25:03,840 Speaker 1: in response to some of the potential President electro Trump policies. 489 00:25:04,240 --> 00:25:07,320 Speaker 1: UM will now see whether you can make good on that. 490 00:25:12,600 --> 00:25:15,080 Speaker 1: Thanks for listening to the Bloomberg P and L podcast. 491 00:25:15,440 --> 00:25:19,159 Speaker 1: You can subscribe and listen to interviews at iTunes, SoundCloud, 492 00:25:19,440 --> 00:25:23,640 Speaker 1: or whatever podcast platform you prefer. I'm pim Fox. I'm 493 00:25:23,640 --> 00:25:26,560 Speaker 1: out there on Twitter at pim Fox. I'm out there 494 00:25:26,600 --> 00:25:29,880 Speaker 1: on Twitter at Lisa Abramo. It's one before the podcast. 495 00:25:29,920 --> 00:25:32,600 Speaker 1: You can always catch us worldwide on Bloomberg Radio