Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast.
Speaker 1: My name is Mike Eagan. I'm a senior editor at Bloomberg.
Speaker 2: And numbldna hire a market support at Bloomberg.
Speaker 1: And this week on the show, you probably heard about this,
Speaker 1: but the Federal Reserve signal this week that even though
Speaker 1: they paused this month, central bankers are expecting to lift
Speaker 1: interest rates again this year. Yet the stock market took
Speaker 1: it all in stride and is continuing its riproaring twenty
Speaker 1: twenty three rally that's been largely driven by hype around
Speaker 1: artificial intelligence. So what are we to think about a
Speaker 1: week like this? Is the equity market right to fight
Speaker 1: the Fed this time given all of the optimism around AI,
Speaker 1: or is it time to sober up and get with
Speaker 1: the feds program. We're going to get into it with
Speaker 1: a fund manager who manages a global equity fund. But first, Voldana,
Speaker 1: I'm very excited for our Craziest Things segment because.
Speaker 2: Can I give a hand in giving a spoiler?
Speaker 1: All right, that joke's not going to make sense till
Speaker 1: later in the podcast, but I will confirm it's a good.
Speaker 2: Joke and listeners, Yeah, I'm really sticking my neck out.
Speaker 1: Here also a very off color joke, but.
Speaker 2: Yeah, it's actually really terrible. You know, our guest, he's
Speaker 2: joining us for the first time ever, and he probably
Speaker 2: thinks we're just two big weirdos.
Speaker 1: Which is true.
Speaker 2: Yeah, it's true, but I really don't want to keep
Speaker 2: him waiting. It's Mark Barribow. He's the head of Global
Speaker 2: Equity at Jennison Associates, which is the fundamental equity business
Speaker 2: of p Jim. Mark, thank you so much for joining us.
Speaker 3: It's great to be here.
Speaker 2: I promise our little intro will make a little more
Speaker 2: sense later, but maybe just to start out, you can
Speaker 2: tell us about your at Jennison and what you do there.
Speaker 3: I'm the head of Global Equities at Jennison, so we
Speaker 3: managed global equity portfolios, international equity portfolios, and emerging market portfolios,
Speaker 3: both small, MidCap and large caps, so that whole spectrum
Speaker 3: and our specialty at Jennison is growth equities, and all
Speaker 3: of our global products are growth oriented.
Speaker 1: So Mark, did what we heard from Jrome Pow this
Speaker 1: week change your thinking at all about what took spect
Speaker 1: for the rest of the.
Speaker 3: Year, Not at all. The big hit the equity markets
Speaker 3: took last year was in response to the change in
Speaker 3: Fed policy. We got the big rate increases, unprecedented really
Speaker 3: for any rate cycle in the post war era, and
Speaker 3: that speed led to valuation declines across the board last year,
Speaker 3: but particularly growth stocks, which dropped relative to value stocks
Speaker 3: to their lowest level since the crisis eight. So the
Speaker 3: setup coming into the year is pretty good on a
Speaker 3: value from evaluation perspective. And now the markets are just
Speaker 3: reacting to earnings news and normal fundamental things, and that's
Speaker 3: why I think it's looking pretty constructive.
Speaker 2: Mark how difficult is it for the Fed to get
Speaker 2: its messaging right going forward? Like they didn't hike this time,
Speaker 2: but then they came out saying we do want to
Speaker 2: continue potentially hiking further later on this year. They see
Speaker 2: growth actually being better than they had anticipated prior to
Speaker 2: yesterday's meeting. It's such a like, how difficult is it
Speaker 2: going to be for them to actually message this to
Speaker 2: the market and investors.
Speaker 3: They overshot on the downside, they're probably going to oversheet
Speaker 3: on the upside. That's typically what the Fed does. Let's
Speaker 3: say eighty to ninety percent of it's behind us, So
Speaker 3: I think that's why the markets are moving on.
Speaker 1: You, Mark, As I mentioned in the introduction, artificial intelligence,
Speaker 1: following the release of the latest versions of chat Cheap
Speaker 1: is really captivated investors' attention. But I do think what's fascinating.
Speaker 1: There's a lot of hype, but there does seem to
Speaker 1: be some fundamentals attached to the theme, almost immediately when
Speaker 1: you look at the outlook from a company like Nvidia.
Speaker 1: I know, one of the top holdings in your Global
Speaker 1: Opportunities fund Oracle last week saying their cloud revenue is
Speaker 1: really getting juiced by AI as well. Yeah, I'm sort
Speaker 1: of reminded of that old cliche that in the gold Rush,
Speaker 1: most people that got rich were the merchants selling the
Speaker 1: picks and shovels. And to me, I feel like you know,
Speaker 1: in this gold rush, it's the chip makers, the cloud
Speaker 1: companies that are the picks and shovel merchants of this.
Speaker 1: I'm just curious, though, with that all said, how you're
Speaker 1: thinking about AI as far as separating the hype from
Speaker 1: where the true prospects are the potential for fundamental improvement
Speaker 1: for various companies and various sectors.
Speaker 3: Sure, I mean, well, at first I would absolutely agree
Speaker 3: with you that the infrastructure layer that allows for this
Speaker 3: accelerated computing to go on is the way to play
Speaker 3: AI right now, because we're in the R and D phase.
Speaker 3: The applications are just getting developed, and it is going
Speaker 3: to be a tectonic shift in technology for the next decade.
Speaker 3: It's the biggest thing to happen since the mobile Internet,
Speaker 3: and so we're very excited about it. But again, the
Speaker 3: best way to play it is through the infrastructure required
Speaker 3: to do this computing. So that starts with high end semiconductors,
Speaker 3: it starts with cloud based computing workloads, and I think
Speaker 3: investors will do quite well in that. And then as
Speaker 3: we move forward, you're going to see more and more
Speaker 3: software applications embed this technology that's already starting, but it's
Speaker 3: going to accelerate over the next year. This isn't a
Speaker 3: long term thing. You're not going to have to wait
Speaker 3: three to five years to see what happens. It's going
Speaker 3: to start to come into every application that's important for
Speaker 3: productivity purposes in the next four quarters, and then we'll
Speaker 3: start to see separation like who's got the winning formula,
Speaker 3: who's developing unique applications that we couldn't even dream of.
Speaker 3: Maybe old companies that maybe new companies, we don't know.
Speaker 3: But what's important, this is a real advancement in technology.
Speaker 3: It's going to be utilized aggressively, and so I think
Speaker 3: investors should definitely try to position for it.
Speaker 1: Yeah, and Mark, the other narrative of the year that
Speaker 1: sort of has gone hand in hand with AI is
Speaker 1: what I refer to the top heaviness of the rally
Speaker 1: that we've seen this year. The big megacap tech stocks
Speaker 1: are really dominating the gains. And I'm curious how you
Speaker 1: approach that as a fund manager. You know, as I mentioned,
Speaker 1: Nvidia's one of your top holdings, do you have any
Speaker 1: limits on sort of how big of an allocation you
Speaker 1: can give to one stock? Does it worry you at all?
Speaker 1: This top heaviness? How do you think about that when
Speaker 1: you're managing a fund like this?
Speaker 3: First, I would say, if you own these stocks in
Speaker 3: your portfolio, you're really happy. Yeah, So I have no
Speaker 3: complaints about the concentration of the market. So there's a
Speaker 3: couple of reasons behind it. One, we started the year
Speaker 3: at very low valuations because of what happened last year. Secondly,
Speaker 3: these companies are generating among the highest levels of free
Speaker 3: cash flow you can find in the global stock market,
Speaker 3: and that's one of the reasons investors are flocking to them.
Speaker 3: It's because you don't have to take a lot of
Speaker 3: risk to participate in a market rally. And investors still
Speaker 3: are a little wary about what's happening out there because
Speaker 3: the FED is tightened so much. So I'm not saying
Speaker 3: there's a flight to safety, but there's a flight to quality,
Speaker 3: and so they're benefiting from that. And then of course
Speaker 3: the AI boom has ignited a catalyst for future growth,
Speaker 3: and that catalyst really wasn't here a year ago. We
Speaker 3: didn't know where the next wave of investment spending would occur,
Speaker 3: and now we know, and so that clarity is leading
Speaker 3: the true companies that benefit from it to lead the market.
Speaker 3: And then other things are participating. And so what I
Speaker 3: would say right now is as we go into earning
Speaker 3: season the summer and go into the fall, you've got
Speaker 3: to be careful because you don't want to be exposed
Speaker 3: in stocks that participated in the rally but in reality
Speaker 3: have nothing new to offer the marketplace, because those are probably.
Speaker 2: Correct and mark broadly speaking, what is the base case
Speaker 2: on AI for the average investor, for instance, So why
Speaker 2: might somebody be buying stocks right now based on the
Speaker 2: AI thme. Is it the idea that these companies have
Speaker 2: so much cash and they, as you said, maybe will
Speaker 2: be putting some of it towards research and development, et cetera.
Speaker 3: Well, you want to be in the ones that one
Speaker 3: are positioned in. The infrastructure build out in Video is
Speaker 3: an easy example.
Speaker 1: We refer to.
Speaker 3: Their earnings release on May twenty fourth is the big
Speaker 3: bang because in my history of doing growth equities since
Speaker 3: the nineties, I've never seen a company raised guidance for
Speaker 3: a quarter by four billion dollars. That's unprecedented. So their
Speaker 3: data center revenue is effectively going to double quarter over
Speaker 3: quarter from four billion to eight billion. And again these
Speaker 3: are numbers that are staggering. So in Video's valuation, ironically,
Speaker 3: it has been declining the last month, not going up,
Speaker 3: even though the stock is because the power of that
Speaker 3: earnings revision is so huge. With fundamental strength there, it
Speaker 3: gives investors more confidence that you're not buying into hype,
Speaker 3: you're actually buying into real demand strength, and that's very good.
Speaker 3: Other beneficiaries, of course, are Microsoft because of their asure
Speaker 3: cloud and their big investment and chat GPT, and of
Speaker 3: course you have Google Cloud, and Google of course has
Speaker 3: deep learning. It's also an AI expert, and Amazon's aws
Speaker 3: will probably benefit as well. So you have different ways
Speaker 3: where you're going to see positive revenue and earnings revisions
Speaker 3: hopefully as the year goes on. From that pure investment spending.
Speaker 3: I think that's why the stocks are doing well, and
Speaker 3: you don't have to get ahead over your skis yet
Speaker 3: thinking about what are the new applications that are going
Speaker 3: to come out that are very exciting I can't miss.
Speaker 3: You don't have to worry about that yet. That'll develop
Speaker 3: over the next year mark.
Speaker 1: Earlier in the year and late last year, it felt
Speaker 1: like the consensus really believe that a recession was inevitable.
Speaker 1: Now's the year goes on, I think it's much more
Speaker 1: debatable whether this proverbial soft landing can actually perhaps maybe
Speaker 1: be achieved. But I'm wondering how much of that plays
Speaker 1: into the outlook for growth stocks. If we do see
Speaker 1: a deterioration in the data, rise in joblessness, lower GDP,
Speaker 1: or even negative GDP, how big of a risk is
Speaker 1: that to this whole AI theme and the capital spending
Speaker 1: that goes along with it, that is propelling it.
Speaker 3: Okay, First, on the recession outlook. I mean, the recession
Speaker 3: has been pre announced four or five times every quarter.
Speaker 3: Here maybe it happens. But we had a big downturn
Speaker 3: in home construction last year. We had a big downturn
Speaker 3: in Silicon Valley last year, big layoffs as you know.
Speaker 3: So you've had these rolling recessions and different segments of
Speaker 3: the marketplace over the last year and so far this year.
Speaker 3: I don't know what if we created one point seven
Speaker 3: million new job that's not a recession. It's steady state,
Speaker 3: slow growth, so fueled by a powerful job market. So
Speaker 3: we probably do get a soft landing. I think that's
Speaker 3: what the market is coming around to believe in. Now,
Speaker 3: what does it mean for growth stocks. It's really bullish
Speaker 3: for growth if you go into a soft landing, because
Speaker 3: the average company is seeing a slowdown in its earnings,
Speaker 3: whereas growth companies will be putting up hopefully on average,
Speaker 3: double digit earnings growth. And that's quite a differentiator in
Speaker 3: a slowing, uncertain market environment. And that's indeed what we're
Speaker 3: seeing in our portfolios. We looked at this data the
Speaker 3: other day because we've just gone through a big earning
Speaker 3: season and for the first quarter, that weighted average growth
Speaker 3: in the portfolio was around fifteen percent. For the S
Speaker 3: and P five hundred, it's three point two. You're finally
Speaker 3: getting rewarded for that growth again once that big reevaluation
Speaker 3: reset occurred last year.
Speaker 2: So your funds obviously are doing well this year. But
Speaker 2: at the same time, you said today's markets are among
Speaker 2: the most challenging we have seen in several decades. There's
Speaker 2: a lack of visibility, contradictory indicators. Can you talk about that.
Speaker 3: Yeah, it all starts with the pandemic, right, So we
Speaker 3: had the V shaped recovery during the pandemic. It shocked
Speaker 3: the global economy. The growth companies did very well during
Speaker 3: the pandemic because they were supplying everything from streaming entertainment
Speaker 3: to laptops needed to work remotely. Digital transformation of companies
Speaker 3: as they accelerated their cloud deployments to make everything work.
Speaker 3: And so we had a big demand surge and then
Speaker 3: the hangover post pandemic as you adjusted to more normal
Speaker 3: rates of spending growth and for the whole economy, of course,
Speaker 3: we had this apply chain problem which led to the
Speaker 3: inflation and that's eason. Now as supplies come into the market,
Speaker 3: you're no longer constrained on any number of products, right,
Speaker 3: and goods inflation has turned negative, services inflation still positive.
Speaker 3: That's a very complicated environment with the FED being as
Speaker 3: aggressive as they are, because the Yell curve would suggest
Speaker 3: we go we might have a recession, but of course
Speaker 3: the Yell curve predicts lots of recessions that never happen,
Speaker 3: so that's not a certainty. And then you have different
Speaker 3: economies around the world doing different things, which is actually beneficial.
Speaker 3: So the US might be slowing, whereas China's coming out
Speaker 3: of the pandemic finally, so that's a good offset to
Speaker 3: might slow down here. Europe seems to be doing okay
Speaker 3: for Europe, not a problem. There's a lot of cross
Speaker 3: currents that are very challenging. Now, getting back to one
Speaker 3: of the other point that was raised earlier questions the
Speaker 3: other thing that's likely to happen we think in the
Speaker 3: next couple of years is a lot of good support
Speaker 3: for a number of US investment areas. And the reason
Speaker 3: is we have this unprecedented combination of public industrial policy,
Speaker 3: which we've never had before. So we have the US
Speaker 3: Chips Act, which is going to lead to the onshing
Speaker 3: of semiconductor manufacturing in the United States. That's tens and
Speaker 3: tens of billions of dollars of capex that will occur
Speaker 3: here on top of the Inflation Reduction Act, which is
Speaker 3: again leading to multi billion dollar build out of electric
Speaker 3: vehicle and battery manufacturing as well as alternative energy systems.
Speaker 3: So we have tremendous structural support in certain areas of
Speaker 3: capital spending wich we've typically not had in the US,
Speaker 3: which is structural and secular and has years to run,
Speaker 3: and we're in the early innings of it, so that's
Speaker 3: also very exciting. These are very positive trends that are occurring,
Speaker 3: maybe as the overall economy slows, but if you're invested
Speaker 3: in those segments of the economy, you're actually seeing strength.
Speaker 3: It's really important from a stock selection perspective to weed
Speaker 3: through those all of the different parts of the market
Speaker 3: and just focus on those that have really good secular
Speaker 3: demand strength, because I think that's going to work.
Speaker 1: You know, Mark, there was a chart I must have
Speaker 1: seen about a thousand times this year that basically showed
Speaker 1: the Nasdaq one hundred and the inverse of some treasure yield,
Speaker 1: whether it's the ten year yield or the real yield,
Speaker 1: and the thinking being that a lot of people thought
Speaker 1: there was this negative correlation. As interest rates go up,
Speaker 1: growth stocks should suffer for her. That's obviously if that
Speaker 1: correlation existed, it's been demolished in the past month or two.
Speaker 1: I think there's many cliff Astness and others who would
Speaker 1: argue that that was a bogus correlation to begin with,
Speaker 1: that we're being fooled by a simple overlay chart like that.
Speaker 1: I'm just curious how you're thinking about that relationship between
Speaker 1: interest rates and growth. Is it a valid headwind to
Speaker 1: growth stocks as an asset class? And I know you
Speaker 1: like to focus on the quality with the strong balance
Speaker 1: sheets and the strong cash flow. If you're thinking of
Speaker 1: growth as a factor on its own, does interest rates
Speaker 1: worry you at all about it?
Speaker 3: Historically the correlation wasn't there, but it was there with
Speaker 3: a bullet in twenty twenty two.
Speaker 1: Yeah, as you.
Speaker 3: Said, it's broken down this year, so it's not working anymore.
Speaker 3: I think the only important part about that correlation is
Speaker 3: just the step function change. So if you do go
Speaker 3: from an interest rate environment that's been there for a
Speaker 3: long time and then you jump rates up several hundred
Speaker 3: basis points pretty quickly. That's a lot to ask for
Speaker 3: from evaluation perspective. You are going to get compression, and
Speaker 3: we did get that. But once that happens, it's over. Now.
Speaker 3: It's just the way we look at it. It's made
Speaker 3: the best company win, right because you reset valuation across
Speaker 3: the system globally, and now we'll see who has the
Speaker 3: best growth and earnings growth, and that stock's going to win.
Speaker 3: That's our you.
Speaker 2: I need to give a shout out to our colleague
Speaker 2: Katie Greifeld, who sometimes fills in as co host on
Speaker 2: this show, for thinking of the next question. But I
Speaker 2: want to pose it to you as well. I'm wondering
Speaker 2: what you think of the two areas of the market
Speaker 2: that are super hot right now, being totally polar opposite.
Speaker 2: One is AI and the other is money market funds,
Speaker 2: which are still seeing tons of cash coming in.
Speaker 3: Yeah. I mean, if you can get at four percent
Speaker 3: or five percent yield and then the taxi jumpt ones
Speaker 3: even better on a tack s adjusted basis, that's stiff
Speaker 3: competition for stocks. So I think it's really hard for
Speaker 3: the average stock to compete against that, for sure. But
Speaker 3: one of the reasons AI related names are doing so
Speaker 3: well is they do offer good competition because they have
Speaker 3: the prospects for perhaps very strong growth going forward and
Speaker 3: very strong current demand. So that looks relatively safe. So
Speaker 3: that's how I would explain that. And then you're right,
Speaker 3: you have that deep void in the middle that's not
Speaker 3: really doing anything.
Speaker 1: Yeah, well, it kind of goes to what you said
Speaker 1: earlier about it really being you know, when you look
Speaker 1: at a market that NASDAQ one hundreds up what thirty
Speaker 1: percent this year, you think, yeah, you think, oh, it's
Speaker 1: this speculative frenzy, but it really is a chase for
Speaker 1: quality and maybe safety on the other end of the
Speaker 1: barbell with the money mark funds. But I've got to
Speaker 1: confess this is one of those nightmare scenarios for me
Speaker 1: when I have to pronounce the name of a company
Speaker 1: that I'm not sure how to produce in the video.
Speaker 1: In video, I can say in video, this is one
Speaker 1: of those companies I've read. I've read the name a
Speaker 1: million times is, and I'm not sure I've ever said
Speaker 1: it out loud. I'm going to say Hermes Ermez is
Speaker 1: that how you say, Mark.
Speaker 2: Is she right about easier than the video?
Speaker 1: I'm gonna you say Hermie, you say Sayers International, Yeah,
Speaker 1: I purely in French. It's whereas we say in Philly Ermes.
Speaker 1: I did want to ask you about Ermez and another
Speaker 1: top holding of the fund, lv m H two sort
Speaker 1: of luxury good famous luxury European luxury good goods providers.
Speaker 1: I mean there's two fcs surrounding companies like this that
Speaker 1: I've heard this year. One is the China reopening will
Speaker 1: unlock a lot of demand from China. The other is
Speaker 1: high end consumers like Vildana over there are so many
Speaker 1: they are immunes to inflation. They'll keep spending. They're not
Speaker 1: pinching pennies because cpis Ferrari another one, another one. You know,
Speaker 1: I'm curious your rationale for having these Ferrari, LVMH, Air Miz.
Speaker 1: What's the rationale with having a heavyweighting in these guys.
Speaker 3: Sure, it's very interesting because side by side with Nvidia
Speaker 3: and Microsoft and Apple and Broadcom, we have LVMH and
Speaker 3: Airs and Ferrari. So what makes them appealing? First? Their
Speaker 3: business models, they're direct to consumer models. In other words,
Speaker 3: you can only buy their product from their stores or
Speaker 3: their website, So Louis Bhutan or air Man or Ferrari,
Speaker 3: and you can't get access all their products. They'll sell
Speaker 3: out very quickly because they ration their most popular products
Speaker 3: to maintain exclusivity and protect pricing and margins, and they
Speaker 3: control the distribution so they don't get into inventory problems.
Speaker 3: They have pricing power and direct to consumer brand models
Speaker 3: are the best in the world and they just happen
Speaker 3: to have developed them over time. And so what you've
Speaker 3: seen is the return on invested capital for these companies
Speaker 3: has been rising quite significantly over the last decade, particularly
Speaker 3: compared to say European market average, and that's because of
Speaker 3: the business model superiority. Then you get to the economics
Speaker 3: of their customer and yes, it's true higher and consumers
Speaker 3: are less exposed to inflation problems and pinched paychecks and
Speaker 3: all of that, but the majority of the customers for
Speaker 3: luxury are actually Neil and gen Z around the world.
Speaker 3: It's not your old wealthy people, and so there is
Speaker 3: a fashion element, there's a social element we don't quite understand,
Speaker 3: but the spending is quite strong, so we like the
Speaker 3: customer mix. They do a very good job managing their business,
Speaker 3: keeping supplies tight, maintaining that exclusivity and pricing power, and
Speaker 3: for that reason you generate really strong margins and cash flow.
Speaker 3: And again it's hard to find that consistently anywhere else,
Speaker 3: but we have found it here. We really like the
Speaker 3: industry from that perspective. But again we only go with
Speaker 3: the big leaders. We don't go across the industry. There's
Speaker 3: only a few brands that have this capture the moment
Speaker 3: with consumers, and we just like to stick with those brands.
Speaker 1: Interesting millennial angle there. It confirms my image of Wildana.
Speaker 1: Drive it around in your Ferrari with yorks Vatan bag
Speaker 1: filled with I did have it ermes Thai one time,
Speaker 1: hermes Thai one time, but it was actually a hand
Speaker 1: me down from my older brotherhood. Very much more of
Speaker 1: a passionate stuff than my Joseph A. Beggs mark. I
Speaker 1: think we've established that I did not take French in
Speaker 1: high school, but I did take Spanish, so I can
Speaker 1: pronounce another stock in your top ten. I don't think
Speaker 1: a lot of us listeners are familiar with this one,
Speaker 1: so maybe you can talk to us a little bit
Speaker 1: about Mercado Libre.
Speaker 3: Oh yeah, that's one of our favorites. So there, you know,
Speaker 3: think of them as the Amazon of Latin America or
Speaker 3: the Ali Baba of Latin America. So they span the
Speaker 3: entire region with an e commerce platform which is the
Speaker 3: largest and in Latin America, even in the biggest market, Brazil,
Speaker 3: e commerce is very underpenetrated. We estimate, for example, in
Speaker 3: Brazil it might be around ten percent penetration of the market,
Speaker 3: whereas in the US we're well above twenty China is
Speaker 3: almost thirty and so there's a long runway of growth
Speaker 3: for them if they continue to execute well to get
Speaker 3: more and more people online shopping. And it's different about
Speaker 3: e commerce markets in emerging markets versus developed like the
Speaker 3: US is. You usually get another facet to the platform,
Speaker 3: and in the case of Ali Baba, it was financial technology.
Speaker 3: In other words, how do you get people to buy
Speaker 3: online whenether they don't have credit cards. You create an
Speaker 3: internet based payment system and you allow people to load
Speaker 3: money onto that, and then it becomes a de facto
Speaker 3: payment system, not just for your e commerce site, but
Speaker 3: people use it offline at a gas station, at a
Speaker 3: farm stand, at a grocery store, pay your utility bills,
Speaker 3: pay your Netflix bill, etc. Mercado Libra has the most
Speaker 3: valuable payments platform in Latin America as well, called Mercado Pago,
Speaker 3: and it's a big growth engine for them and a
Speaker 3: huge source of profitability. So when you think about financial
Speaker 3: access in Latin America or other emerging markets, it's really
Speaker 3: important because they typically don't have access to state of
Speaker 3: the art financial services. So once you start a payments
Speaker 3: platform just to fuel your e commerce platform, all of
Speaker 3: a sudden, you can start offering all sorts of financial
Speaker 3: services on top of it at low feet and the
Speaker 3: banking system doesn't offer it to the majority of the population.
Speaker 3: So again you have another huge addressable market, unmet need
Speaker 3: in the marketplace being solved for by technology companies. So
Speaker 3: that's that's why we like it so much.
Speaker 1: Really interesting, you know, it's great to hear. We don't
Speaker 1: often talk to global fund managers with global discussions, so
Speaker 1: it's educational to hear about these companies we might not
Speaker 1: know so much about. Well Mark Barrabou, he's the head
Speaker 1: of Global Equity at Jennison Associates, which is the fundamental
Speaker 1: equity business at PGIM. Thanks so much, Mark, We can't
Speaker 1: quite let you go just yet. Though. We do have
Speaker 1: a tradition on the show where we all must discuss
Speaker 1: the craziest things we saw in markets this week. And well,
Speaker 1: don I'm gonna pick your brain on this one.
Speaker 2: Wow, you're still going with the jokes. The jokes are
Speaker 2: as you said, in bad taste.
Speaker 1: The very bad tastes. Yeah, but you started it, so
Speaker 1: it's all your fault I did. I'm not going to
Speaker 1: get Lindy a hand on that.
Speaker 2: Oh my god, Okay, this but this really was It's
Speaker 2: it's a market. It's a market, yes, but it's also
Speaker 2: a really creepy, spooky story.
Speaker 1: Right, No more, Ado, Without further Ado hit him with
Speaker 1: the craziest thing.
Speaker 2: The manager of Harvard's medical school morg got in trouble
Speaker 2: this week for stealing body parts and then selling them.
Speaker 2: This was a huge story on the terminal. So this guy,
Speaker 2: he allowed buyers into the school's morgue. They chose body
Speaker 2: parts from donated donors. Yep, and he transported heads, brainskin
Speaker 2: and bones to his home in New Hampshire.
Speaker 1: Now you were thinking, all right, is there these for
Speaker 1: organ donations organ transplant which would be a high dollar
Speaker 1: value I'm obviously most obsessed with the price discovery on
Speaker 1: the body parts. You know, you hear kidneys selling for
Speaker 1: hundreds of thousands and millions. Maybe, but no, this is
Speaker 1: like Cat's creepy corner, like a retail store selling like macabs. Yeah,
Speaker 1: scary stuff. I'm going to go one further because I
Speaker 1: did the due diligence to get some price discovery on
Speaker 1: these body parts, and I'm not sure you did. So
Speaker 1: I think that means we can play our little game show.
Speaker 1: The price is precise, and I regret to inform you Mark,
Speaker 1: you're now a contestant on that he doesn't want the
Speaker 1: prices very good.
Speaker 3: We're gonna test your Are we talking for transplant or petsod?
Speaker 1: It's more like a novelty market. I'll give you an example.
Speaker 1: I apologize this all is in very bad taste. It
Speaker 1: but one guy purchased a bunch of human skin. I
Speaker 1: can't even.
Speaker 2: Say, Oh, this is so bad.
Speaker 1: He purchased in Pennsylvania, my home state. It's just embarrassing
Speaker 1: it would be Pennsylvania. He purchased a bunch of human skin,
Speaker 1: then he tanned it and turned it in. No he didn't, Yeah,
Speaker 1: which I gotta say, oh my god, I personally I
Speaker 1: am an Oregon donor if someone took my skin and
Speaker 1: made leather out of it, maybe a LVMH handbag or
Speaker 1: an Ermes mark shaking it marks about the mark's about
Speaker 1: to end this soon, he's gone anyway. Prices precise, and
Speaker 1: what happened is the payments. Of course, where else would
Speaker 1: they be made?
Speaker 2: But Venmo, I'm surprised it wasn't via crypto.
Speaker 1: Yeah, maybe there were some that we don't know about.
Speaker 1: One customer purchased a human head. Oh my god, human
Speaker 1: head number seven to be specific. So he would let
Speaker 1: these people into go shopping around in the moor to
Speaker 1: decide what they wanted.
Speaker 2: This is so wild.
Speaker 1: So human head number seven was paid for with a
Speaker 1: Venmo payment. What do you suppose the price was for
Speaker 1: human head number seven?
Speaker 2: Twenty thousand dollars?
Speaker 1: Twenty thousand dollars mark? What's your price's precise? Guess for human.
Speaker 3: Because I'm not prepared for this at all, but I
Speaker 3: would say less than a thousand.
Speaker 1: Oh, that is why he is the head of fundamentals
Speaker 1: and I'm not one thousand exactly? What yeah, yeah, one
Speaker 1: thousand for human head number seven.
Speaker 2: Because Pa do you know if you're getting right price.
Speaker 1: It's a very thin market. Not a lot of liquidity
Speaker 1: in this market. Which there's a joke, but don't make it.
Speaker 1: Don't make it. There was one venmo payment with the
Speaker 1: memo that just said brains with five eyes. It's winter
Speaker 1: Bucks for the brain.
Speaker 2: Oh my god, I.
Speaker 1: Think I've even disgusted myself with a segment.
Speaker 2: This is horrible.
Speaker 1: It's horrible, but Veldona secretly loves it.
Speaker 2: You can go No, I just was interested in the story.
Speaker 1: Mark. We apologize for that segment. We have to be okay,
Speaker 1: we have to be true to our mission here and
Speaker 1: that is truly the craziest thing. It really is.
Speaker 2: It's wild. There was some other stuff. There were some
Speaker 2: other good stories.
Speaker 1: Maybe Mark has a good one. Mark, you got any
Speaker 1: good crazy stories for us, any good crazy.
Speaker 3: I don't have anything. I don't have any I can't
Speaker 3: compete with.
Speaker 2: I'm so sorry, Mark, he's never going to come back on.
Speaker 1: Well that was Mark Barrebeau of Jennison at p JAM.
Speaker 1: Really quite a pleasure to talk to you and hear
Speaker 1: your insight on everything going on in the markets these days. Mark,
Speaker 1: We really appreciate your time.
Speaker 3: Thank you. It was great to be on and hopefully
Speaker 3: you'll have me back.
Speaker 2: Yeah, we're gonna pick you my god Mark, I'm sorry
Speaker 2: and thank you. It was great to have you on.
Speaker 3: Thanks, we'll see you later work.
Speaker 1: What Goes Up will be back next week. Until then,
Speaker 1: you can find us on the Bloomberg Terminal, website and app,
Speaker 1: or wherever you get your podcasts. We'd love it if
Speaker 1: you took the time to rate and review the show
Speaker 1: on Apple Podcasts. Some more listeners can find us, and
Speaker 1: you can find us on Twitter, follow me at Reaganonymous.
Speaker 1: Wildna Hirich is at Bildona Hirich. You can also follow
Speaker 1: Bloomberg Podcasts at podcasts. What Goes Up is produced by
Speaker 1: Stacy Wang. Thanks for listening, See you next time at
Speaker 1: mentan