1
00:00:05,800 --> 00:00:08,720
Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.

2
00:00:08,760 --> 00:00:11,560
Speaker 1: Along with my co host Lisa Bramowitz. Each day we

3
00:00:11,640 --> 00:00:15,120
Speaker 1: bring you the most important, noteworthy, and useful interviews for

4
00:00:15,200 --> 00:00:17,840
Speaker 1: you and your money, whether you're at the grocery store

5
00:00:17,960 --> 00:00:20,720
Speaker 1: or the trading floor. Find the Bloomberg p m L

6
00:00:20,840 --> 00:00:32,040
Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. We

7
00:00:32,080 --> 00:00:35,199
Speaker 1: have spent a lot of time on this program talking

8
00:00:35,280 --> 00:00:39,479
Speaker 1: about the woeful state that retail is in right now.

9
00:00:39,520 --> 00:00:42,680
Speaker 1: We have a defender, someone who can explain what's going on,

10
00:00:42,760 --> 00:00:46,360
Speaker 1: put it into perspective, and argue that perhaps markets have

11
00:00:46,440 --> 00:00:49,120
Speaker 1: gotten a little over their skis with their hatred of

12
00:00:49,159 --> 00:00:51,559
Speaker 1: the retail sector. Rick Helfin Fine, thank you so much

13
00:00:51,560 --> 00:00:54,800
Speaker 1: for joining us. Rick Helfnbine is President, chief executive officer

14
00:00:54,920 --> 00:00:59,160
Speaker 1: of American Apparel and Footwear Association, which is based in Washington,

15
00:00:59,480 --> 00:01:02,520
Speaker 1: d C. And is a cheerleader for these beating up

16
00:01:02,560 --> 00:01:05,240
Speaker 1: retailers that are seeing so much pain. So let's just

17
00:01:05,280 --> 00:01:08,880
Speaker 1: start broadly, Rick, why do you think that traders have

18
00:01:10,080 --> 00:01:12,600
Speaker 1: perhaps gotten a little ahead of themselves with selling some

19
00:01:12,680 --> 00:01:16,240
Speaker 1: of these shares and bonds of retailers. Well, that's pretty

20
00:01:16,240 --> 00:01:18,800
Speaker 1: easy to answer. You know, when you hear there's a

21
00:01:18,880 --> 00:01:21,880
Speaker 1: hurricane warning in Florida and nobody wants to fly down there.

22
00:01:22,000 --> 00:01:24,440
Speaker 1: You know, you don't want to fly into an apocalypse.

23
00:01:24,600 --> 00:01:28,560
Speaker 1: And people have been talking down on retail for months

24
00:01:28,680 --> 00:01:31,000
Speaker 1: now and form a whole host of reasons. You know,

25
00:01:31,040 --> 00:01:33,480
Speaker 1: you go back to two thousand and eight. The first

26
00:01:33,600 --> 00:01:37,560
Speaker 1: sign of coming out of a recession is a boost

27
00:01:37,560 --> 00:01:40,000
Speaker 1: in retail sales. And when you see that, which we

28
00:01:40,080 --> 00:01:44,279
Speaker 1: did in two thousand, retail stocks start flying up because

29
00:01:44,319 --> 00:01:45,920
Speaker 1: people have a little money in their pocket, they go

30
00:01:45,959 --> 00:01:48,559
Speaker 1: buy some new clothes and that's that's just the way

31
00:01:48,560 --> 00:01:51,920
Speaker 1: it works. So now we're in the mature part of

32
00:01:51,960 --> 00:01:54,840
Speaker 1: the cycle. And the mature part of the cycle is

33
00:01:55,520 --> 00:02:01,520
Speaker 1: look a look at the numbers. Consumer confidence sixteen year high, gasolene.

34
00:02:01,520 --> 00:02:03,480
Speaker 1: These are things we look at. Two dollars and forty

35
00:02:03,600 --> 00:02:07,920
Speaker 1: cents a gallon, Unemployment four point six pc, the GDP

36
00:02:08,120 --> 00:02:11,639
Speaker 1: at two point six percent. These are all indicators that

37
00:02:11,720 --> 00:02:14,600
Speaker 1: people are buying. Remember, two thirds of our economy is

38
00:02:14,680 --> 00:02:18,160
Speaker 1: based on consumer spending. On consumer spending, but that includes

39
00:02:18,200 --> 00:02:20,799
Speaker 1: consumer spending on services as well as good So there

40
00:02:20,840 --> 00:02:25,280
Speaker 1: has been a pretty big shift towards services and experiences

41
00:02:25,400 --> 00:02:28,519
Speaker 1: rather than buying a new outfit, right. I mean, this

42
00:02:28,600 --> 00:02:31,000
Speaker 1: has been one big driver of some of the pessimism

43
00:02:31,080 --> 00:02:34,560
Speaker 1: around retail. That's true, But then you also look at

44
00:02:34,560 --> 00:02:37,120
Speaker 1: the amount of goods coming into the country and you say,

45
00:02:37,680 --> 00:02:39,680
Speaker 1: you know, because we can read these import numbers, we

46
00:02:39,680 --> 00:02:41,760
Speaker 1: can look at domestic manufacturing, we look at the amount

47
00:02:41,800 --> 00:02:43,919
Speaker 1: of apparel and foot where that's coming in the country.

48
00:02:44,200 --> 00:02:48,040
Speaker 1: There really hasn't been slowdown. People are buying product. The

49
00:02:48,120 --> 00:02:51,680
Speaker 1: question is the new shopper, how's the new shopper buying?

50
00:02:51,720 --> 00:02:54,959
Speaker 1: And that's what's affecting brick and mortar retail sales. So

51
00:02:55,040 --> 00:02:57,720
Speaker 1: let's talk about brick and mortar because embedded in a

52
00:02:57,720 --> 00:03:00,120
Speaker 1: lot of the results that we have been seeing and

53
00:03:00,160 --> 00:03:03,880
Speaker 1: some of the pessimism is this very uncomfortable period where

54
00:03:03,919 --> 00:03:06,920
Speaker 1: brick and mortar has to spend a lot of money

55
00:03:07,200 --> 00:03:10,720
Speaker 1: to adapt to the online world, to distribution services to

56
00:03:10,919 --> 00:03:17,320
Speaker 1: online networks um while also dealing with lower margins on

57
00:03:17,480 --> 00:03:21,440
Speaker 1: those sales and higher competition from people who can see

58
00:03:21,760 --> 00:03:25,280
Speaker 1: marketplaces that are more comprehensive. This is what people are

59
00:03:25,280 --> 00:03:27,920
Speaker 1: worried about. What do you say to them, Well, the

60
00:03:28,000 --> 00:03:32,040
Speaker 1: worry is real, but the reality is nobody's walking around naked.

61
00:03:32,240 --> 00:03:39,720
Speaker 1: I mean really, realistically speaking, today you have to look

62
00:03:39,760 --> 00:03:42,320
Speaker 1: at who's your customer, you know, that's the big thing.

63
00:03:42,400 --> 00:03:45,520
Speaker 1: Who's buying the goods. And the millennial customers age eighteen

64
00:03:45,560 --> 00:03:49,800
Speaker 1: to thirty four of them will compare a shop or

65
00:03:50,000 --> 00:03:54,040
Speaker 1: plan with their phones now will still go on a

66
00:03:54,120 --> 00:03:57,720
Speaker 1: store to buy. So that's part of what's driving the

67
00:03:57,880 --> 00:04:03,320
Speaker 1: price pressure down because there is price comparison. So the

68
00:04:03,400 --> 00:04:06,960
Speaker 1: market is changing and retailers are adapting. And you know,

69
00:04:07,440 --> 00:04:09,160
Speaker 1: I know there was a lot of noise this morning

70
00:04:09,160 --> 00:04:12,800
Speaker 1: about foot Locker. You know, maybe they just didn't like

71
00:04:12,880 --> 00:04:15,080
Speaker 1: what's in the foot Lockers store. But foot Locker is

72
00:04:15,120 --> 00:04:18,279
Speaker 1: going to do just fine well. But in fairness, we

73
00:04:18,360 --> 00:04:22,280
Speaker 1: have seen a pretty broad based disappointment when it comes

74
00:04:22,360 --> 00:04:25,400
Speaker 1: to athletic where both what you wear when you go

75
00:04:25,440 --> 00:04:27,680
Speaker 1: work out as well as what you wear when you

76
00:04:27,680 --> 00:04:30,480
Speaker 1: want to look like you're working out even if you're not. Um. So,

77
00:04:30,640 --> 00:04:33,200
Speaker 1: you know, this is something that is raising concerns that

78
00:04:33,200 --> 00:04:35,160
Speaker 1: are we seeing the death of ath leisure as one

79
00:04:35,200 --> 00:04:38,000
Speaker 1: analyst put it, or you know, what's going on here?

80
00:04:38,040 --> 00:04:40,360
Speaker 1: Is this a sea change in the way people shop

81
00:04:40,400 --> 00:04:42,920
Speaker 1: at an entire industry? Uh? You know, are you saying

82
00:04:42,920 --> 00:04:46,120
Speaker 1: that you don't expect as many brick and mortar retailers

83
00:04:46,120 --> 00:04:49,479
Speaker 1: to go to business as UH are currently kind of

84
00:04:49,520 --> 00:04:52,240
Speaker 1: talking about it. You get into the numbers. We've had

85
00:04:52,279 --> 00:04:55,560
Speaker 1: eighteen bankruptcy so far this year, and that would be

86
00:04:55,600 --> 00:04:58,159
Speaker 1: in half the year, whereas two thousand and eight we

87
00:04:58,200 --> 00:05:02,720
Speaker 1: had eighteen for the whole year. So clearly there's a

88
00:05:02,760 --> 00:05:04,440
Speaker 1: lot of people going out of business. We have too

89
00:05:04,440 --> 00:05:08,279
Speaker 1: many stores, that's quite obvious. We have too many malls.

90
00:05:08,400 --> 00:05:10,359
Speaker 1: We have fifteen hundred walls at the peak. We have

91
00:05:10,360 --> 00:05:13,880
Speaker 1: about eleven hundred walls today. We may have eighties six

92
00:05:14,000 --> 00:05:17,800
Speaker 1: hundred doors closing this year. But we have too many

93
00:05:18,000 --> 00:05:21,000
Speaker 1: square foot per person in the United States. And with

94
00:05:21,040 --> 00:05:25,320
Speaker 1: this size and shift to the internet adjustment. So you

95
00:05:25,360 --> 00:05:28,320
Speaker 1: said we have eleven hundred malls in the US. Where

96
00:05:28,360 --> 00:05:31,200
Speaker 1: do you think that number will be five new years

97
00:05:31,200 --> 00:05:33,680
Speaker 1: from now? I think a thousand. I think we have

98
00:05:33,800 --> 00:05:36,800
Speaker 1: been another thousand walls to go to pare down to

99
00:05:37,040 --> 00:05:41,200
Speaker 1: probably where we should be. We're overmalled, we're overstored, and

100
00:05:41,279 --> 00:05:43,880
Speaker 1: you have this rise of the Internet. However, keep in

101
00:05:43,920 --> 00:05:46,360
Speaker 1: mind one thing about the rise of the Internet. It's

102
00:05:46,360 --> 00:05:49,960
Speaker 1: only eight point five of all the sales. So people

103
00:05:50,000 --> 00:05:52,599
Speaker 1: are still shopping brick and mortar. That's why I believe

104
00:05:52,839 --> 00:05:56,039
Speaker 1: the market is clearly oversold in the last week. You know,

105
00:05:56,400 --> 00:06:00,160
Speaker 1: look at look at people going into the stores. Look

106
00:06:00,160 --> 00:06:04,279
Speaker 1: at Nordstrom up, look at Target up, look at Walmart up,

107
00:06:04,320 --> 00:06:07,400
Speaker 1: look at Gap up. So let's not focus on the

108
00:06:07,400 --> 00:06:10,479
Speaker 1: bid news. Let's assume that all these retailers are going

109
00:06:10,480 --> 00:06:13,240
Speaker 1: into a period of adjustment and they will come out

110
00:06:13,240 --> 00:06:17,479
Speaker 1: of it just fine. Nobody's walking around naked. Rick Healfonbyne,

111
00:06:17,560 --> 00:06:19,840
Speaker 1: thank you so much for joining us. Truly a pleasure

112
00:06:19,880 --> 00:06:22,320
Speaker 1: to hear what you have to say. Rick Healfnbine is president,

113
00:06:22,440 --> 00:06:26,480
Speaker 1: chief executive officer at American Apparel and Footwear Association, which

114
00:06:26,560 --> 00:06:42,440
Speaker 1: is based in Washington, d C. Another share that we

115
00:06:42,440 --> 00:06:46,280
Speaker 1: are watching today is that of Infocis. That's the I

116
00:06:46,279 --> 00:06:50,640
Speaker 1: I T company and outsourcing provider who shares fell as

117
00:06:50,720 --> 00:06:53,880
Speaker 1: much as thirteen percent today, wiping three and a half

118
00:06:54,000 --> 00:06:57,039
Speaker 1: billion dollars from the company's market value. This came, of course,

119
00:06:57,120 --> 00:07:00,960
Speaker 1: after it's chief executive officer v Shall seek a resigned

120
00:07:01,480 --> 00:07:05,360
Speaker 1: even though many had really herald hit him as the

121
00:07:05,480 --> 00:07:08,760
Speaker 1: driver A lot of a lot of the companies gains

122
00:07:08,800 --> 00:07:11,720
Speaker 1: over the past few years. Here to discuss what the

123
00:07:11,800 --> 00:07:14,600
Speaker 1: road is ahead is anorag Grana. He's our senior analyst

124
00:07:14,680 --> 00:07:17,640
Speaker 1: of software and I T Services for Bloomberg Intelligence and

125
00:07:17,680 --> 00:07:21,640
Speaker 1: he joins us in our Bloomberg eleven three oh studios. Now, Anora,

126
00:07:22,120 --> 00:07:25,040
Speaker 1: can you just give us a sense of why the

127
00:07:25,080 --> 00:07:29,600
Speaker 1: CEO resigned and why it's being perceived so negatively by

128
00:07:29,600 --> 00:07:33,680
Speaker 1: the market. This company has a very interesting history. Prior

129
00:07:33,720 --> 00:07:37,520
Speaker 1: to Vichal taking over as the CEO, all the you know,

130
00:07:37,560 --> 00:07:41,960
Speaker 1: older CEOs were founding members of the company, and you know,

131
00:07:42,000 --> 00:07:44,680
Speaker 1: there was a lot of pressure that the last couple

132
00:07:44,720 --> 00:07:47,280
Speaker 1: of CEOs didn't do the job as well as uh,

133
00:07:47,400 --> 00:07:49,880
Speaker 1: you know, other publicly traded companies. So they brought in

134
00:07:49,920 --> 00:07:53,080
Speaker 1: a new guy that didn't was not a founder uh

135
00:07:53,320 --> 00:07:56,160
Speaker 1: from SAP. He did a good job. He's done a

136
00:07:56,240 --> 00:07:58,680
Speaker 1: lot of interesting things in the company since he came over.

137
00:07:59,160 --> 00:08:03,160
Speaker 1: Employe atriction has dropped, sales has improved, the overall perception

138
00:08:03,160 --> 00:08:06,440
Speaker 1: of emphasis is also improved in the industry. And then

139
00:08:06,520 --> 00:08:08,800
Speaker 1: but you know, one of the founding members has always

140
00:08:08,840 --> 00:08:13,200
Speaker 1: been nudging and bothering the board about you know, constantly

141
00:08:13,240 --> 00:08:15,600
Speaker 1: interfering with the way he's been running it, so he

142
00:08:15,680 --> 00:08:18,120
Speaker 1: just got sick of it and said, I'm quitting. So

143
00:08:18,240 --> 00:08:21,400
Speaker 1: why did one of the founders do that If he's

144
00:08:21,400 --> 00:08:24,120
Speaker 1: doing such a good job, if he's created so much

145
00:08:24,160 --> 00:08:28,160
Speaker 1: market value. It seems a lot like some cultural differences

146
00:08:28,240 --> 00:08:30,520
Speaker 1: between the two. Now, remember this is a forty billion

147
00:08:30,520 --> 00:08:33,160
Speaker 1: dollar company or around forty billion dollar company without the drop,

148
00:08:33,440 --> 00:08:35,360
Speaker 1: and you know a lot of the complaints were, well,

149
00:08:35,400 --> 00:08:37,440
Speaker 1: why are you paying so much so much? Why are

150
00:08:37,440 --> 00:08:40,800
Speaker 1: you taking charter jets? How much? Not not him? I

151
00:08:40,800 --> 00:08:42,920
Speaker 1: mean they had paid you know, the CFO a little

152
00:08:42,920 --> 00:08:47,360
Speaker 1: bit higher than what the founder thought was appropriate. And

153
00:08:47,640 --> 00:08:51,480
Speaker 1: it was basically constant interference from these founders as to

154
00:08:51,559 --> 00:08:55,760
Speaker 1: how the business should be run that made it, you know,

155
00:08:56,040 --> 00:08:58,200
Speaker 1: you know, made him said that, you know, enough is enough. Well,

156
00:08:58,240 --> 00:09:00,719
Speaker 1: let's talk a little bit about the business of a process, right,

157
00:09:00,760 --> 00:09:05,160
Speaker 1: because right now it is a promising time for a

158
00:09:05,200 --> 00:09:07,199
Speaker 1: lot of the services that they provide. But they're trying

159
00:09:07,240 --> 00:09:13,920
Speaker 1: to transfer over to more web services and provide software solutions.

160
00:09:13,960 --> 00:09:17,440
Speaker 1: Perhaps it is a little bit away from their original wheelhouse, right,

161
00:09:17,480 --> 00:09:18,760
Speaker 1: Can you give us a sense of what the big

162
00:09:18,880 --> 00:09:21,240
Speaker 1: challenges are? So if you look at this industry, has

163
00:09:21,280 --> 00:09:23,480
Speaker 1: been dominated by you know these three or four major

164
00:09:23,520 --> 00:09:28,040
Speaker 1: companies taught a consulting services in Force, Cognizance, web pro Um,

165
00:09:28,120 --> 00:09:32,120
Speaker 1: and all of them do similar kind of products and services,

166
00:09:32,160 --> 00:09:33,960
Speaker 1: but the bulk of their revenue comes from a lot

167
00:09:34,000 --> 00:09:37,880
Speaker 1: of legacy I T work, application maintenance and software development,

168
00:09:38,200 --> 00:09:42,320
Speaker 1: and the industry is moving more towards artificial intelligence software

169
00:09:42,360 --> 00:09:45,600
Speaker 1: oriented tools. And you know this guy at Emphasis his

170
00:09:45,679 --> 00:09:48,280
Speaker 1: background as he came from SAP, so he has done

171
00:09:48,360 --> 00:09:51,400
Speaker 1: a lot of new changes ever since he came as

172
00:09:51,400 --> 00:09:54,920
Speaker 1: the CEO, which is where the space has to go. Um.

173
00:09:55,080 --> 00:09:58,120
Speaker 1: So if the place is kind of commoditized and you

174
00:09:58,320 --> 00:10:00,880
Speaker 1: don't have a good leadership, just in this case, and

175
00:10:00,960 --> 00:10:03,280
Speaker 1: you know in an influsis it might give chance for

176
00:10:03,320 --> 00:10:05,960
Speaker 1: others to take shared away from the company, which is

177
00:10:06,000 --> 00:10:07,520
Speaker 1: I think one of the reasons why you see the

178
00:10:07,520 --> 00:10:10,199
Speaker 1: stocks dropping quite a bit. I see. So in other words,

179
00:10:10,240 --> 00:10:14,040
Speaker 1: the co founders looking at this company the way he

180
00:10:14,320 --> 00:10:19,120
Speaker 1: created it, which was providing providing outsourcing services, helping with

181
00:10:19,160 --> 00:10:23,360
Speaker 1: your company with your company's computer system from AFAR, which

182
00:10:23,400 --> 00:10:26,640
Speaker 1: is also sort of challenged right now given the HB

183
00:10:26,720 --> 00:10:29,960
Speaker 1: one visas and the emphasis are not outsourcing as much

184
00:10:30,120 --> 00:10:32,720
Speaker 1: at least in the US. Right well, publicly they have

185
00:10:32,800 --> 00:10:36,120
Speaker 1: said that they don't you know, find any fault with

186
00:10:36,200 --> 00:10:39,240
Speaker 1: his strategy and execution. They are more quite concerned about

187
00:10:39,240 --> 00:10:41,760
Speaker 1: some of the corporate governance issues. And now, I mean

188
00:10:41,800 --> 00:10:44,520
Speaker 1: the company has had an investigation to see you know,

189
00:10:44,559 --> 00:10:47,520
Speaker 1: there were any as there's some visible ragley allegations about

190
00:10:47,520 --> 00:10:50,280
Speaker 1: a particular acquisition, and they went through as this whole

191
00:10:50,400 --> 00:10:53,520
Speaker 1: round of um, you know, going through an investigation and

192
00:10:53,559 --> 00:10:56,040
Speaker 1: they didn't find anything. It is those kinds of issues

193
00:10:56,080 --> 00:10:59,120
Speaker 1: the founders are more um you know, problematic or issue

194
00:10:59,320 --> 00:11:01,640
Speaker 1: have issues with rather than the running of the company.

195
00:11:01,840 --> 00:11:05,199
Speaker 1: What about this idea of this emphasis on a more

196
00:11:05,280 --> 00:11:08,880
Speaker 1: nationalistic approach to business and how this could affect in

197
00:11:08,920 --> 00:11:11,839
Speaker 1: persus it. You know, they have said that they will

198
00:11:11,840 --> 00:11:13,800
Speaker 1: be hiring a lot more people in the US, and

199
00:11:14,520 --> 00:11:16,880
Speaker 1: that's just part and parcel of what they do. Um.

200
00:11:16,920 --> 00:11:19,360
Speaker 1: In fact, if you do have to do emerging technologies

201
00:11:19,720 --> 00:11:22,120
Speaker 1: for your clients, you do need more people on site,

202
00:11:22,360 --> 00:11:24,440
Speaker 1: which is you know, which is what all of these

203
00:11:24,440 --> 00:11:27,200
Speaker 1: companies are doing at this point. Um. But the bigger

204
00:11:27,200 --> 00:11:30,880
Speaker 1: issue in this particular cases, who can come Now? I mean,

205
00:11:31,080 --> 00:11:33,360
Speaker 1: I mean you really cannot have a non founder is

206
00:11:33,360 --> 00:11:35,800
Speaker 1: the CEO of a company at this point, because whoever

207
00:11:36,200 --> 00:11:39,679
Speaker 1: comes will face the same exact scrutiny from the founders.

208
00:11:39,760 --> 00:11:42,160
Speaker 1: They're going to start looking at every move this person makes,

209
00:11:42,400 --> 00:11:44,960
Speaker 1: who they hire, what kind of pay goes in. So

210
00:11:45,040 --> 00:11:46,760
Speaker 1: it's going to be very difficult for them to find

211
00:11:46,760 --> 00:11:50,360
Speaker 1: a SEEO. At this point. Have the founders said anything, Yeah,

212
00:11:50,400 --> 00:11:52,319
Speaker 1: they're still complaining. I mean I just saw that there

213
00:11:52,360 --> 00:11:55,160
Speaker 1: is a there is another letter that they have sent

214
00:11:55,240 --> 00:11:57,840
Speaker 1: out blasting the board, and I mean they might have to,

215
00:11:58,040 --> 00:12:00,400
Speaker 1: you know, either either you know, in my my view,

216
00:12:00,600 --> 00:12:02,800
Speaker 1: either the founders will have to sit down and decide.

217
00:12:03,240 --> 00:12:05,520
Speaker 1: Either they come and run the way they wanted and

218
00:12:05,559 --> 00:12:08,320
Speaker 1: they completely rechange the board and the management team and everything,

219
00:12:08,679 --> 00:12:12,240
Speaker 1: or they get rid of their you know, the stake

220
00:12:12,320 --> 00:12:14,680
Speaker 1: that they have and then let the let the other

221
00:12:14,679 --> 00:12:17,800
Speaker 1: shareholders on this company. This is really interesting to me

222
00:12:17,880 --> 00:12:19,680
Speaker 1: because there's a lot of money at stake, because, as

223
00:12:19,720 --> 00:12:22,800
Speaker 1: you said, a forty billion dollar company, and clearly the

224
00:12:22,880 --> 00:12:25,800
Speaker 1: market has retraced some of the losses from earlier. Now

225
00:12:25,840 --> 00:12:28,040
Speaker 1: the shares are only down only down a little more

226
00:12:28,080 --> 00:12:30,400
Speaker 1: than eight percent. But you know, you raise a lot

227
00:12:30,440 --> 00:12:33,200
Speaker 1: of very important issues just about the path forward at

228
00:12:33,240 --> 00:12:36,640
Speaker 1: a time when this is a very competitive space, when

229
00:12:36,679 --> 00:12:38,599
Speaker 1: they do have to make a lot of investments and

230
00:12:38,640 --> 00:12:41,360
Speaker 1: a lot of decisions sooner than later. Uh, and they

231
00:12:41,400 --> 00:12:45,240
Speaker 1: now are facing a leadership void and a very aggressive

232
00:12:45,600 --> 00:12:49,920
Speaker 1: co founder. Fascinating story. Ana Grana senior Analystic Software and

233
00:12:49,920 --> 00:12:52,560
Speaker 1: I T Services here at Bloomberg Intelligence and he joins

234
00:12:52,640 --> 00:13:08,520
Speaker 1: us in our eleven three oh studios right now. I

235
00:13:08,520 --> 00:13:11,320
Speaker 1: am so pleased to be speaking with Mike Buchanan, Deputy

236
00:13:11,400 --> 00:13:15,480
Speaker 1: Chief investment Officer at Western Asset Management. It oversees four

237
00:13:15,600 --> 00:13:20,199
Speaker 1: hundred and thirty three billion dollars and is based in Pasadena, California. Mike,

238
00:13:20,240 --> 00:13:22,719
Speaker 1: thank you so much for joining me. I want to

239
00:13:23,120 --> 00:13:25,800
Speaker 1: focus a little bit on what we've been hearing from

240
00:13:25,800 --> 00:13:29,080
Speaker 1: a growing number of big asset management firms, which is,

241
00:13:29,880 --> 00:13:34,040
Speaker 1: we are getting concerned about the overvaluation of US high

242
00:13:34,120 --> 00:13:37,240
Speaker 1: yield bonds and we are reducing allocations to this debt.

243
00:13:37,520 --> 00:13:40,840
Speaker 1: Where do you stand on this? Well, first of all, Lisa,

244
00:13:40,880 --> 00:13:43,760
Speaker 1: thanks for having me on. And yeah, you're right. I

245
00:13:43,760 --> 00:13:46,760
Speaker 1: mean that's something that um, we we hear a lot

246
00:13:47,240 --> 00:13:51,160
Speaker 1: from our clients, from consultants, concern that when you look

247
00:13:51,160 --> 00:13:53,120
Speaker 1: at the corporate credit markets, and it's not just hi

248
00:13:53,240 --> 00:13:56,640
Speaker 1: yield but investment grade as well. You just look at spreads,

249
00:13:56,679 --> 00:14:01,920
Speaker 1: you look at yields. Valuations overall seem you know, somewhat compressed.

250
00:14:02,080 --> 00:14:06,800
Speaker 1: And our view is that, Um, it's not necessarily indicative

251
00:14:06,880 --> 00:14:09,800
Speaker 1: of a market that's that's over bought or it's certainly

252
00:14:09,800 --> 00:14:12,319
Speaker 1: not in bubble territory. I think you have to put

253
00:14:12,360 --> 00:14:15,640
Speaker 1: it in context. You have to think about what is

254
00:14:15,720 --> 00:14:19,640
Speaker 1: the fundamental backdrop that's supporting these valuations. And it's very

255
00:14:19,640 --> 00:14:22,640
Speaker 1: important to to marry those two. And when we look

256
00:14:22,640 --> 00:14:25,280
Speaker 1: at that, what we see our fundamentals that we think

257
00:14:25,320 --> 00:14:28,360
Speaker 1: are still very strong, Uh, the most part moving in

258
00:14:28,400 --> 00:14:32,560
Speaker 1: the right direction. Um, And I think you know, valuations uh,

259
00:14:32,760 --> 00:14:36,240
Speaker 1: certainly not table pounding. We're finding opportunities, and in high

260
00:14:36,280 --> 00:14:39,520
Speaker 1: yield we're finding opportunities and investment grade. But to be

261
00:14:39,600 --> 00:14:44,280
Speaker 1: fair back to your question, we have been reducing our

262
00:14:44,320 --> 00:14:48,160
Speaker 1: our allocations just on opportunity. We're finding some other areas

263
00:14:48,160 --> 00:14:51,400
Speaker 1: where we think, uh, you have better risk adjusted returns,

264
00:14:51,440 --> 00:14:55,760
Speaker 1: so skewing our multisector portfolios in that direction. Like where

265
00:14:55,840 --> 00:14:59,400
Speaker 1: where are you seeing better opportunities? Well, I think, uh,

266
00:14:59,640 --> 00:15:04,440
Speaker 1: local emerging market, currency, debt is probably our our highest

267
00:15:04,480 --> 00:15:08,160
Speaker 1: conviction idea right now. UM. And you know it's you

268
00:15:08,200 --> 00:15:12,560
Speaker 1: think about a world that is where yields scarce. UM.

269
00:15:12,600 --> 00:15:15,560
Speaker 1: You certainly can get a lot of yield in emerging

270
00:15:15,600 --> 00:15:18,200
Speaker 1: market local currency debt. UM. And I think there's a

271
00:15:18,200 --> 00:15:20,840
Speaker 1: lot of macro forces that are that are behind you

272
00:15:21,040 --> 00:15:24,680
Speaker 1: and should result in some tightening of these spreads or

273
00:15:24,720 --> 00:15:28,280
Speaker 1: these yields relative to developed market. Um. You're starting to

274
00:15:28,320 --> 00:15:31,760
Speaker 1: see growth now for the first time and in really

275
00:15:31,800 --> 00:15:35,480
Speaker 1: three years in Russia and Brazil as an example, positive

276
00:15:35,520 --> 00:15:39,320
Speaker 1: growth there after two consecutive years of contraction. Uh. Some

277
00:15:39,440 --> 00:15:44,160
Speaker 1: of the inflationary pressures in those economies UH and and

278
00:15:44,160 --> 00:15:48,120
Speaker 1: and even broader emerging markets seem to be uh subsidying.

279
00:15:48,160 --> 00:15:50,040
Speaker 1: It's going to give their central banks a little more

280
00:15:50,040 --> 00:15:53,240
Speaker 1: flexibility on policy. And UH. You know, I think you're

281
00:15:53,280 --> 00:15:56,800
Speaker 1: also seeing a little more of a bias towards policy

282
00:15:56,840 --> 00:16:00,680
Speaker 1: discipline and reform. UH. So we really like take advantage

283
00:16:00,720 --> 00:16:03,200
Speaker 1: of of a lot of those opportunities. And that's where

284
00:16:03,560 --> 00:16:05,960
Speaker 1: you know, as we reduce some of these credit positions

285
00:16:05,960 --> 00:16:08,480
Speaker 1: that I mentioned earlier, that's where a lot of that

286
00:16:08,920 --> 00:16:13,760
Speaker 1: money is going. In correspondences before this segment. You also

287
00:16:13,840 --> 00:16:18,720
Speaker 1: noted that a sector specific wager, you're looking at investment

288
00:16:18,760 --> 00:16:21,320
Speaker 1: grade credit in the financial metals and mining and energy

289
00:16:21,360 --> 00:16:25,320
Speaker 1: sectors as well as rising star opportunities in high yield.

290
00:16:25,640 --> 00:16:29,600
Speaker 1: Are there specific names that you're targeting within that rising

291
00:16:29,640 --> 00:16:34,480
Speaker 1: star category UH that you really believe in strongly? Yeah,

292
00:16:34,520 --> 00:16:37,320
Speaker 1: I think that's a real interesting trade in high yield

293
00:16:37,440 --> 00:16:40,200
Speaker 1: right now. You know, people don't look at the the

294
00:16:40,640 --> 00:16:43,960
Speaker 1: shift and composition UH in terms of ratings in the

295
00:16:44,000 --> 00:16:47,280
Speaker 1: market UM as much as we think they should right now,

296
00:16:47,720 --> 00:16:51,000
Speaker 1: and you're definitely seeing less triple c issuance, You're seeing

297
00:16:51,000 --> 00:16:54,640
Speaker 1: more double b issuance. The double B market within high

298
00:16:54,680 --> 00:16:57,600
Speaker 1: yield is now the largest portion UH in terms of

299
00:16:57,720 --> 00:17:01,480
Speaker 1: rating UH category within the high old market, and we

300
00:17:01,560 --> 00:17:05,520
Speaker 1: think there's an inordinate number of those double bees that

301
00:17:05,720 --> 00:17:07,800
Speaker 1: we think have a reasonable chance to make it to

302
00:17:07,880 --> 00:17:10,320
Speaker 1: investment grade within the next year to year and a half.

303
00:17:10,720 --> 00:17:13,680
Speaker 1: Specific names, yeah, I mean they're they're you know, kind

304
00:17:13,680 --> 00:17:15,800
Speaker 1: of broad based, but I can throughout, you know, like

305
00:17:15,880 --> 00:17:20,760
Speaker 1: Haynes Brands is a good example, Park aerospace, even in

306
00:17:20,800 --> 00:17:23,040
Speaker 1: some of the you know, sectors that seem like they're

307
00:17:23,760 --> 00:17:27,760
Speaker 1: UH somewhat stressed. You mentioned Metals and Mining, Freeport mcmaran.

308
00:17:27,840 --> 00:17:32,840
Speaker 1: There on the energy side, Williams Pipeline Company. Uh, there

309
00:17:32,960 --> 00:17:35,399
Speaker 1: is really I think the bigger message is there's just

310
00:17:35,560 --> 00:17:38,800
Speaker 1: a very large number of these that our research teams identified,

311
00:17:38,800 --> 00:17:41,920
Speaker 1: and we think you'll get not only a decent amount

312
00:17:41,920 --> 00:17:44,280
Speaker 1: of income just from coupon clip there, but you'll also

313
00:17:44,359 --> 00:17:47,960
Speaker 1: get some total return from spread compression as they make

314
00:17:48,040 --> 00:17:51,760
Speaker 1: that jump from double B to triple B. Let's talk Tesla.

315
00:17:52,200 --> 00:17:55,120
Speaker 1: You didn't buy those bonds, did you. Well, we did

316
00:17:55,160 --> 00:17:57,919
Speaker 1: not participate in that deal. And you know, so it

317
00:17:57,960 --> 00:18:00,800
Speaker 1: wasn't because it's not a great company, but um, it's

318
00:18:00,840 --> 00:18:03,800
Speaker 1: really as a fixed income manager. Uh, you know, we

319
00:18:03,840 --> 00:18:08,359
Speaker 1: saw some things there that just didn't really uh compel

320
00:18:08,440 --> 00:18:11,120
Speaker 1: us to to to to participate in that deal. Didn't

321
00:18:11,119 --> 00:18:13,639
Speaker 1: think it offered a lot of relative value, and we

322
00:18:13,640 --> 00:18:15,520
Speaker 1: thought there were some risks there. But you did go

323
00:18:15,600 --> 00:18:18,680
Speaker 1: for Amazon. Amazon just sold the sixteen billion dollar offering.

324
00:18:18,840 --> 00:18:21,680
Speaker 1: Did you even buy the forty year bonds? We did.

325
00:18:21,720 --> 00:18:26,960
Speaker 1: We We bought Amazon um across most maturities. Uh. And

326
00:18:27,240 --> 00:18:29,480
Speaker 1: you know, it's interesting at least you look at those

327
00:18:29,520 --> 00:18:33,440
Speaker 1: two deals on the surface, they look somewhat similar. Um,

328
00:18:33,480 --> 00:18:36,359
Speaker 1: you know, there are obviously two great companies with tremendous

329
00:18:36,400 --> 00:18:40,840
Speaker 1: management teams, very proactive vision and in great leadership. The

330
00:18:40,880 --> 00:18:44,239
Speaker 1: difference being free cash flow generation. Tesla, you know, kind

331
00:18:44,280 --> 00:18:47,000
Speaker 1: of a different part of its its life cycle, still

332
00:18:47,080 --> 00:18:50,240
Speaker 1: burning cash, no free cash flow generation. It's going to

333
00:18:50,320 --> 00:18:53,560
Speaker 1: take at least three years um to get there, and

334
00:18:53,600 --> 00:18:56,760
Speaker 1: you certainly have execution risk and you know, a little

335
00:18:56,760 --> 00:19:00,000
Speaker 1: over five percent yield. We thought there were better UH

336
00:19:00,000 --> 00:19:03,000
Speaker 1: opportunities in the high old market, but you go over

337
00:19:03,000 --> 00:19:07,679
Speaker 1: to Amazon. Amazon, you know, really a pristine balance sheet.

338
00:19:07,800 --> 00:19:11,080
Speaker 1: They are generating a lot of free cash flow over

339
00:19:11,119 --> 00:19:15,960
Speaker 1: ten billion UH per annum by our estimates, great liquidity profile,

340
00:19:16,040 --> 00:19:19,919
Speaker 1: over twenty billion of cash and liquid securities on the

341
00:19:19,960 --> 00:19:22,960
Speaker 1: balance sheet. Triple A balance sheet. Even though the ratings

342
00:19:23,400 --> 00:19:25,879
Speaker 1: are are somewhat odd at B double A one double

343
00:19:25,920 --> 00:19:29,280
Speaker 1: A minus, we probably think it's closer to a high

344
00:19:29,320 --> 00:19:32,880
Speaker 1: single A you know, double A type company. So um, yeah,

345
00:19:32,920 --> 00:19:35,159
Speaker 1: we we really like the Amazon deal. Thought it was

346
00:19:35,200 --> 00:19:38,000
Speaker 1: priced right and took advantage of that. And Mike, just

347
00:19:38,119 --> 00:19:41,200
Speaker 1: to give you some kudos, the bonds are trading up

348
00:19:41,240 --> 00:19:43,960
Speaker 1: in the days after trading, so it seems like others

349
00:19:44,000 --> 00:19:46,480
Speaker 1: agree with you. I want to ask you about cash holdings,

350
00:19:46,560 --> 00:19:49,320
Speaker 1: because there have been a series of articles talking about

351
00:19:49,359 --> 00:19:53,720
Speaker 1: a reduced amount of dry powder or cash in investment

352
00:19:53,720 --> 00:19:55,920
Speaker 1: grade and high yield bond funds, and I'm wondering where

353
00:19:55,960 --> 00:19:58,399
Speaker 1: you stand on that and whether you've been also eating

354
00:19:58,400 --> 00:20:02,200
Speaker 1: into your cash piles in order to take advantage of

355
00:20:02,200 --> 00:20:05,320
Speaker 1: some of these opportunities. Yeah, I mean, are we we

356
00:20:05,400 --> 00:20:08,119
Speaker 1: manage our cash in accordance with what we see as

357
00:20:08,200 --> 00:20:11,320
Speaker 1: opportunity in the market. And yeah, right now, Like I said,

358
00:20:11,400 --> 00:20:14,679
Speaker 1: that's it's not a table pounder in either investment grade

359
00:20:14,840 --> 00:20:18,080
Speaker 1: or high yield. So we're operating with, you know, a

360
00:20:18,119 --> 00:20:21,639
Speaker 1: little bit more cash than maybe we traditionally have, UM

361
00:20:21,680 --> 00:20:25,280
Speaker 1: to take advantage of you know, maybe pullbacks or some

362
00:20:25,359 --> 00:20:29,200
Speaker 1: new issue opportunities. Um. But I think the also, I mean,

363
00:20:29,240 --> 00:20:32,680
Speaker 1: just kind of speaking beyond Western asset management and maybe

364
00:20:32,760 --> 00:20:35,320
Speaker 1: perhaps looking at some of our competitors, you've had a

365
00:20:35,359 --> 00:20:39,560
Speaker 1: tremendous amount of investment grade new issuance recently. And it's

366
00:20:39,560 --> 00:20:43,000
Speaker 1: not just the Amazon deal. You've had uh, some very

367
00:20:43,119 --> 00:20:46,440
Speaker 1: high profile you know, the A T and T issue

368
00:20:46,600 --> 00:20:49,760
Speaker 1: and B A T. You know, these are big, big issues.

369
00:20:49,800 --> 00:20:52,800
Speaker 1: So UM, a lot of that cash has probably been deployed,

370
00:20:53,320 --> 00:20:57,119
Speaker 1: speaks to the leaner cash positions. Mike Buchanan, Always a pleasure.

371
00:20:57,119 --> 00:20:58,959
Speaker 1: I love speaking with you. Mike bi canon as deputy

372
00:20:59,000 --> 00:21:02,840
Speaker 1: Chief Investment Officer for Western Asset Management, which has four

373
00:21:03,040 --> 00:21:05,600
Speaker 1: d and thirty three billion dollars out of management and

374
00:21:05,840 --> 00:21:10,800
Speaker 1: is based in Pasadena, California. Always fascinating to hear what

375
00:21:11,000 --> 00:21:14,280
Speaker 1: looks good and what doesn't for that behemoth money manager.

376
00:21:27,440 --> 00:21:29,760
Speaker 1: Right now, I am trying to wrap my head around

377
00:21:29,840 --> 00:21:33,320
Speaker 1: what it means to be a responsible investor and to

378
00:21:33,320 --> 00:21:35,480
Speaker 1: get a better sense of it from somebody who knows

379
00:21:35,880 --> 00:21:39,520
Speaker 1: best because he helped found the whole movement. Is John Stroyer,

380
00:21:39,600 --> 00:21:42,920
Speaker 1: chief executive officer of Calvert Research and Management, which was

381
00:21:42,960 --> 00:21:45,840
Speaker 1: acquired by Eaton Vance earlier this year and is based

382
00:21:45,840 --> 00:21:50,240
Speaker 1: in Bethesda, Maryland. John, I was reading some notes earlier,

383
00:21:50,400 --> 00:21:56,199
Speaker 1: and uh, evidently Calvert helped found this concept, this United

384
00:21:56,560 --> 00:22:00,960
Speaker 1: Nations Principles for Responsible Investment that now counts seventeen hundred

385
00:22:01,080 --> 00:22:04,480
Speaker 1: large investors in more than seventy trillion dollars in assets.

386
00:22:04,520 --> 00:22:06,840
Speaker 1: What does this mean? Great? Well, first of all, thanks

387
00:22:06,880 --> 00:22:08,520
Speaker 1: for having me on the show and your question, what

388
00:22:08,560 --> 00:22:11,320
Speaker 1: does it mean to be a responsible investor is a

389
00:22:11,400 --> 00:22:14,840
Speaker 1: very important one day answer. First and foremost, what it

390
00:22:14,880 --> 00:22:17,119
Speaker 1: means to be responsible investor is to get the right

391
00:22:17,160 --> 00:22:19,720
Speaker 1: amount of return for the risk you're taking. Some performance

392
00:22:19,800 --> 00:22:22,000
Speaker 1: is a big part of what we think about day

393
00:22:22,040 --> 00:22:24,560
Speaker 1: in and day out. The second big part of our

394
00:22:24,600 --> 00:22:29,080
Speaker 1: process is understanding how companies are impacting the environment and

395
00:22:29,119 --> 00:22:33,159
Speaker 1: how companies are impacting society. But again, it's critical that

396
00:22:33,200 --> 00:22:35,159
Speaker 1: we find the companies that are able to do a

397
00:22:35,200 --> 00:22:38,159
Speaker 1: great job for people in planet and do it in

398
00:22:38,200 --> 00:22:42,119
Speaker 1: a way that works for financially motivated investors. So is

399
00:22:42,200 --> 00:22:46,520
Speaker 1: your job to essentially come up with a framework of

400
00:22:46,600 --> 00:22:50,880
Speaker 1: what's responsible to give to some of these investors and say, here,

401
00:22:50,880 --> 00:22:52,639
Speaker 1: if you want to sleep well at night, if you

402
00:22:52,680 --> 00:22:54,600
Speaker 1: want to feel like you're doing the right thing with

403
00:22:54,600 --> 00:22:57,800
Speaker 1: respect to human rights, with respect to global warming, with

404
00:22:57,840 --> 00:23:01,480
Speaker 1: respect to whatever it is that you think is super important,

405
00:23:01,560 --> 00:23:03,560
Speaker 1: here's a basket of stuff to buy you bet. And

406
00:23:03,600 --> 00:23:06,600
Speaker 1: the question really is what matters to which companies. In

407
00:23:06,640 --> 00:23:09,840
Speaker 1: other words, a company that's in the utility sector, we

408
00:23:09,880 --> 00:23:12,960
Speaker 1: need to really focus on their greenhouse gas emissions, their

409
00:23:13,160 --> 00:23:16,960
Speaker 1: percentage of power generated from renewable sources, what they're doing

410
00:23:17,080 --> 00:23:20,600
Speaker 1: visa v fossil fossil fuels, those are very very important

411
00:23:20,600 --> 00:23:23,840
Speaker 1: considerations a company in the tech sector, it's a different

412
00:23:23,840 --> 00:23:26,320
Speaker 1: set of issues. We want to understand their ability to

413
00:23:26,359 --> 00:23:30,640
Speaker 1: create well being for a diverse workforce, their issues around

414
00:23:30,800 --> 00:23:34,639
Speaker 1: Internet privacy and security. So you said it right. We

415
00:23:34,720 --> 00:23:37,800
Speaker 1: want to give clients the answers in terms of here

416
00:23:37,840 --> 00:23:40,560
Speaker 1: are the companies that are really making a positive difference.

417
00:23:40,800 --> 00:23:43,120
Speaker 1: But it means different things to different companies, and that's

418
00:23:43,119 --> 00:23:47,439
Speaker 1: where our big research platform and industry leading team of

419
00:23:47,480 --> 00:23:51,080
Speaker 1: analysts really come into play figuring that all out. Can

420
00:23:51,119 --> 00:23:54,200
Speaker 1: you give some perspective on how much this sector has

421
00:23:54,280 --> 00:23:57,000
Speaker 1: grown over the past few years, just in terms of

422
00:23:57,000 --> 00:23:58,879
Speaker 1: now well, As you said, Calvert was one of the

423
00:23:58,920 --> 00:24:02,879
Speaker 1: founding signatories of the United Nations Principles Responsible Investing in

424
00:24:02,920 --> 00:24:05,800
Speaker 1: twenty six. At that time there were thirteen of us

425
00:24:06,200 --> 00:24:10,400
Speaker 1: representing just a few billions, a few hundred billion dollars

426
00:24:10,400 --> 00:24:14,080
Speaker 1: in assets. Today, seventeen hundred large investors have signed on

427
00:24:14,520 --> 00:24:19,280
Speaker 1: seventy trillion dollars um in in assets under management worldwide.

428
00:24:19,359 --> 00:24:21,800
Speaker 1: But what does that mean? Seventy trillion dollars in assets?

429
00:24:21,800 --> 00:24:24,840
Speaker 1: Does that mean as far as companies that are adhering

430
00:24:24,880 --> 00:24:27,760
Speaker 1: to these principles. This is their total a U gasset owners,

431
00:24:27,960 --> 00:24:31,440
Speaker 1: so large pension funds and other investment management firms who

432
00:24:31,480 --> 00:24:34,879
Speaker 1: have said this matters. We think it matters to understand

433
00:24:34,960 --> 00:24:38,119
Speaker 1: how a company is impacting people in the planet in

434
00:24:38,119 --> 00:24:40,760
Speaker 1: our investment process. But let's talk about it from a

435
00:24:40,800 --> 00:24:43,399
Speaker 1: financial advisor and a client's perspective. What do we know

436
00:24:43,520 --> 00:24:46,919
Speaker 1: there today? There's still a pretty big gap between the

437
00:24:46,960 --> 00:24:49,640
Speaker 1: investors who have put their hands up and said, hey,

438
00:24:49,680 --> 00:24:53,960
Speaker 1: I'm interested in responsible investing, versus the financial advisors who

439
00:24:53,960 --> 00:24:56,879
Speaker 1: are comfortable with their level of expertise in talking about it.

440
00:24:57,240 --> 00:25:00,280
Speaker 1: About seventy three percent of investors and Eaton Van his

441
00:25:00,320 --> 00:25:04,320
Speaker 1: most recent ATOMICS survey have said that they're really interested

442
00:25:04,320 --> 00:25:07,680
Speaker 1: and responsible investing, but only about twenty three percent of

443
00:25:07,720 --> 00:25:10,480
Speaker 1: financial advisors have said this is a meaningful part of

444
00:25:10,480 --> 00:25:13,760
Speaker 1: my business. So we know that advisors are catching up.

445
00:25:13,800 --> 00:25:16,639
Speaker 1: They're developing expertise or learning about products and ways to

446
00:25:16,680 --> 00:25:20,000
Speaker 1: serve these clients. But still, one of the most interesting

447
00:25:20,040 --> 00:25:23,800
Speaker 1: parts about this movement is its investor lad it's interesting.

448
00:25:24,119 --> 00:25:27,000
Speaker 1: Uh and and just real quick, you noted before the

449
00:25:27,040 --> 00:25:30,720
Speaker 1: segment that President Trump has actually given some steam to

450
00:25:30,760 --> 00:25:34,359
Speaker 1: this movement. Can you just encapsulate that in thirty seconds? Sure.

451
00:25:34,440 --> 00:25:37,720
Speaker 1: I think we're all looking to companies to solve some

452
00:25:37,800 --> 00:25:41,720
Speaker 1: of our most pressing social and environmental challenges today, more

453
00:25:41,800 --> 00:25:44,600
Speaker 1: so than we're looking to the federal government. UM. I

454
00:25:44,600 --> 00:25:46,719
Speaker 1: could leave it at that, but I'd also observe over

455
00:25:46,760 --> 00:25:48,879
Speaker 1: the past couple of days, a lot of CEOs have

456
00:25:49,000 --> 00:25:52,320
Speaker 1: stepped up and said, we're going to disassociate ourselves with

457
00:25:52,400 --> 00:25:56,120
Speaker 1: these business counsels that the president put put together, and

458
00:25:56,160 --> 00:25:58,639
Speaker 1: this is part of it. These are these are companies

459
00:25:58,640 --> 00:26:01,720
Speaker 1: saying we're going to continue to press forward. We're going

460
00:26:01,760 --> 00:26:05,359
Speaker 1: to work hard to solve the challenges that the population

461
00:26:05,400 --> 00:26:09,480
Speaker 1: of the United States needs to have solved, environmental challenges,

462
00:26:09,880 --> 00:26:14,760
Speaker 1: equality challenges, social challenges, and we're going to do what

463
00:26:15,000 --> 00:26:17,520
Speaker 1: sort of on our own. So I think that the

464
00:26:17,600 --> 00:26:23,240
Speaker 1: Trump administration has made it clear the companies, more so

465
00:26:23,320 --> 00:26:28,919
Speaker 1: today relative to government, are responsible for our environmental and

466
00:26:29,000 --> 00:26:32,360
Speaker 1: social outcomes. Thank you very much, John Stroyer, chief executive

467
00:26:32,359 --> 00:26:35,879
Speaker 1: officer of Calvert Research and Management, owned by Eaton Vans

468
00:26:36,119 --> 00:26:41,280
Speaker 1: and based in Bethesda, Maryland. Thanks for listening to the

469
00:26:41,320 --> 00:26:44,440
Speaker 1: Bloomberg P and L podcast. You can subscribe and listen

470
00:26:44,440 --> 00:26:48,600
Speaker 1: to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform

471
00:26:48,680 --> 00:26:52,560
Speaker 1: you prefer. I'm pim Fox. I'm on Twitter at pim Fox.

472
00:26:52,880 --> 00:26:56,400
Speaker 1: I'm on Twitter at Lisa Abramowits one before the podcast.

473
00:26:56,440 --> 00:27:06,080
Speaker 1: You can always catch us worldwide on Bloomberg Radio