WEBVTT - Why Merck's Vaccine Exit Is Significant: Mammadova 0:00:01.360 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.120 --> 0:00:06.200 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.360 we bring you interviews from CEO, market pros and Bloomberg experts, 0:00:10.400 --> 0:00:13.600 along with essential market moving news. Find the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple Podcasts or wherever you listen to podcasts, 0:00:17.000 --> 0:00:20.920 and on Bloomberg dot com. Paul Sweeney here accompanied by 0:00:20.960 --> 0:00:24.840 Matt Miller from Berlin, Germany, again continued newsflow on the 0:00:24.920 --> 0:00:28.560 healthcare front as it relates to the virus vaccines, what's working, 0:00:28.640 --> 0:00:31.720 what's not working? To get the latest, we welcome Jalen Mamadova, 0:00:32.080 --> 0:00:35.640 Global sector lead for healthcare at Third Bridge, based in 0:00:35.760 --> 0:00:37.920 New York City. Jailn, thanks so much for joining us here. 0:00:38.159 --> 0:00:42.400 We got some news out here today about merk Uh 0:00:42.440 --> 0:00:46.440 that it's vaccine they're pulling, it's not working, and then 0:00:46.479 --> 0:00:49.519 they kind of pulling back from that. How significant is that? 0:00:50.800 --> 0:00:53.559 Thanks so much for having me, And it's pretty significant 0:00:53.640 --> 0:00:56.760 given the low vaccine supply that we have and the 0:00:56.800 --> 0:01:00.200 inefficiencies on the logistics fronts for both in fact pers 0:01:00.200 --> 0:01:02.280 and providers around the coal chain. For m R and 0:01:02.360 --> 0:01:06.120 AS is really increases our reliance on the expected positive 0:01:06.120 --> 0:01:08.319 redoubts from J and J and Novo backs, as well 0:01:08.360 --> 0:01:11.520 as some pipeline candidates like GSC, SINOFFI and some of 0:01:11.560 --> 0:01:14.000 the newer platforms that you haven't releasen the media cover 0:01:14.040 --> 0:01:17.360 as much like back starts, TABLET or CODA Genics, nasal vaccines, 0:01:17.680 --> 0:01:20.319 all of those now are going to start mattering. The 0:01:20.360 --> 0:01:23.520 other front is on mark, so they have pulled back 0:01:23.560 --> 0:01:25.520 on the two. But it's important to also bear in 0:01:25.560 --> 0:01:29.440 mind that we should still be following a potential reformulation 0:01:29.520 --> 0:01:32.720 on the delivery front for their VSC platforms, So if 0:01:32.720 --> 0:01:35.600 you go from intramuscular to potentially intra nasle, you may 0:01:35.640 --> 0:01:37.880 still see some form of efficacy. The question then is 0:01:38.240 --> 0:01:41.120 how far behind is that put them on. Fiser and 0:01:41.160 --> 0:01:44.800 Maderna puts extreme pressure in terms of streamlining their manufacturing. 0:01:44.840 --> 0:01:48.720 Reefs already seen hiccups in terms of you know, accommodating 0:01:48.720 --> 0:01:53.080 for temperature controlled environments and modernist booster, which will add 0:01:53.080 --> 0:01:56.600 as a third regiment to be completely protective from the 0:01:56.600 --> 0:01:59.120 news strains, will be more and more important. On the upside, 0:01:59.160 --> 0:02:02.880 though we've seen some loss and scheme on attention in 0:02:03.000 --> 0:02:07.160 terms of the neutralizing antibody molecules from Lily and the 0:02:07.240 --> 0:02:09.560 genera on those are going to probably come back, and 0:02:09.600 --> 0:02:11.680 we'll see more and more adoption of those as well 0:02:11.720 --> 0:02:14.920 as therapeutic products, which is the anti viral that the 0:02:15.000 --> 0:02:18.359 work is working on. You know, we we've heard from 0:02:18.400 --> 0:02:22.160 so many people UM that this has been an inefficient rollout, 0:02:22.639 --> 0:02:24.920 although it seems so much more efficient than the last 0:02:24.919 --> 0:02:28.280 time we vaccinated the entire world in a handful of months. 0:02:28.520 --> 0:02:32.400 I wonder what you think UM needs to be improved 0:02:32.880 --> 0:02:37.160 and if you have optimism that it will be. I 0:02:37.280 --> 0:02:40.720 do have optimism, and so Biden's bands can technically work, right, 0:02:40.760 --> 0:02:43.600 We're already on the path of the news during a 0:02:43.639 --> 0:02:46.000 million a day, you can even double that number. But 0:02:46.120 --> 0:02:48.720 all of this is going to be predicated on seeing 0:02:48.960 --> 0:02:52.360 some form of federal guidance and financing for both providers 0:02:52.360 --> 0:02:55.600 and manufactors. So take the provider site, that's a huge 0:02:55.600 --> 0:02:58.679 trick up. We don't have the medical staffing. Sub eight 0:02:58.880 --> 0:03:01.200 storage is probably going to be even more important now 0:03:01.240 --> 0:03:03.079 with Mark falling out of the race, at least in 0:03:03.120 --> 0:03:06.240 the New York term, helping them resupply their dry ice, 0:03:06.280 --> 0:03:07.920 which they either have to do on their own or 0:03:07.960 --> 0:03:11.520 both state and expanding their infrastructure on the manufacturing site. 0:03:11.760 --> 0:03:14.160 In order for Biden's plan to work, you need seven 0:03:14.160 --> 0:03:17.160 point five million production a week for the next nine 0:03:17.200 --> 0:03:21.000 to ten weeks between Siser and Maderna for that to happen. 0:03:21.080 --> 0:03:23.400 And you need some assistance on the shipping and container 0:03:23.400 --> 0:03:28.320 companies as well as distribution mechanisms with with McKesson. All 0:03:28.360 --> 0:03:30.840 in all, we need a central distribution system in the 0:03:31.040 --> 0:03:33.959 US that helps accommodates for the sub eight storage and 0:03:34.000 --> 0:03:38.240 those special containers. Assistance for companies like Sterling Ultracold that 0:03:38.280 --> 0:03:41.600 are working on coaching solutions UH to enable the use 0:03:41.600 --> 0:03:44.240 of mobile clinics that are really going to become important 0:03:44.840 --> 0:03:48.280 in the next few months. So Jaalen, A lot of 0:03:48.320 --> 0:03:50.160 things need to fall into place, A lot of things 0:03:50.200 --> 0:03:53.360 need to happen that you just enumerated. How confident are 0:03:53.440 --> 0:03:58.000 you that this administration can get it done in a 0:03:58.040 --> 0:04:04.160 reasonable period of time? I this year, I'm confident because 0:04:04.160 --> 0:04:06.440 the tone has changed, right, it's a it's a more 0:04:07.160 --> 0:04:09.720 our experts are confident will say it this way because 0:04:09.720 --> 0:04:11.360 the tone has changed. But I do have to say 0:04:11.400 --> 0:04:15.680 operation work speed. The previous administration, it did put a 0:04:15.680 --> 0:04:18.200 lot of the involves the seeds into place that needed 0:04:18.200 --> 0:04:22.120 to happen for Biden's plan to work, So we shouldn't 0:04:22.160 --> 0:04:25.720 dismiss that. And our experts see that there have been 0:04:25.760 --> 0:04:28.000 a lot of progress made with operational work, see that 0:04:28.040 --> 0:04:31.640 would even make the hundred millions possible in a hundred days. 0:04:32.320 --> 0:04:35.320 But the tone of the Biden administration has changed and 0:04:35.640 --> 0:04:38.240 we are more confident, are experts are more confident that 0:04:38.279 --> 0:04:41.200 we will be seeing financing where it needs be in 0:04:41.279 --> 0:04:45.560 terms of having a convergence between even take federally owned 0:04:45.640 --> 0:04:48.960 material and commercially owned material across the four or five 0:04:49.600 --> 0:04:52.000 pipeline candidates that are more near term. And then this 0:04:52.080 --> 0:04:58.920 week's before outstanding, you know, without sounding at all political, um, 0:04:59.040 --> 0:05:02.599 the Trump administrat had already ramped up vaccinations to a 0:05:02.720 --> 0:05:06.120 level that would achieve Biden's goals, right, I mean, by 0:05:06.160 --> 0:05:09.560 the time President Biden came into office, we were already 0:05:09.600 --> 0:05:12.599 vaccinating in the US almost a million people a day. 0:05:12.680 --> 0:05:15.520 So all he has to do is not do worse 0:05:16.200 --> 0:05:19.800 then the Trump administration. The point that they had reached, 0:05:19.920 --> 0:05:22.680 is that really a concern for you that President Biden's 0:05:22.680 --> 0:05:26.680 administration will now do worse because of a lack of 0:05:27.160 --> 0:05:32.640 funding or production bottlenecks. So it's not so there's only 0:05:32.760 --> 0:05:35.000 so much that can happen at the federal level, which 0:05:35.040 --> 0:05:38.200 is why we bring it back to the financing component. 0:05:38.520 --> 0:05:42.400 The cold chain is not entirely developed in this country. 0:05:42.440 --> 0:05:44.920 I'm not even talking about the ultra culture cold chain, 0:05:45.080 --> 0:05:48.359 ultra ultra you know, sub ad Storge. It's all going 0:05:48.400 --> 0:05:51.080 to come down to how stream lights the properties are 0:05:51.240 --> 0:05:55.320 at that level. Right with Mirk falling out and now 0:05:55.360 --> 0:05:58.520 that we have Fiser Madurnam potentially J and J, that 0:05:58.600 --> 0:06:00.960 still puts a lot of pressure on two of the 0:06:01.000 --> 0:06:05.760 most complicated logistically speaking, vaccine candidates where you're seeing increased 0:06:05.800 --> 0:06:08.599 vaccine wastage. So that's where the issue is going to 0:06:08.600 --> 0:06:12.200 be with the Biden administration, not so much as you know, 0:06:12.200 --> 0:06:14.320 in comparing the two administrations, is not going to be 0:06:14.400 --> 0:06:17.320 so much in the implementation, but so much in Shakespeain 0:06:17.360 --> 0:06:19.200 the MAZE action funds, right, because if you look at 0:06:19.240 --> 0:06:22.320 the supply chain right hand, our focuses in streamlining, there's 0:06:22.360 --> 0:06:26.000 manufacturing in efficiencies. That really comes down to UH financing 0:06:26.040 --> 0:06:27.920 in some form of federal guidance, and that's what's going 0:06:27.960 --> 0:06:32.480 to dictate whether or not the Biden administration will prove 0:06:32.520 --> 0:06:35.560 to be successful. And hey, j we have about thirty 0:06:35.560 --> 0:06:39.240 seconds left. The emerging markets, I mean the existing developed 0:06:39.240 --> 0:06:40.960 markets have their own challenge. Just talk to us about 0:06:40.960 --> 0:06:44.760 the emerging markets. What's the plan there? The plan I 0:06:44.760 --> 0:06:49.320 mean COVID will probably in the low middle income countries 0:06:49.360 --> 0:06:52.080 will get vaccinated by your end we'll see in addition 0:06:52.080 --> 0:06:56.920 of by middle of next year and probably completion by 0:06:56.920 --> 0:07:01.200 two so that would be that would be the timeline. Jalen, 0:07:01.200 --> 0:07:03.120 thank you so much for joining us. We appreciate it 0:07:03.200 --> 0:07:06.719 always getting your thoughts to Jalen Momodova, Glomal sector lead 0:07:06.760 --> 0:07:09.760 for healthcare for Third Bridge. So, mad, I guess the 0:07:09.840 --> 0:07:12.840 key issue here is obviously funding here in the States, uh, 0:07:12.880 --> 0:07:16.720 some central distribution um and then hopefully we can get 0:07:16.760 --> 0:07:18.920 you know, it's more out of you know, Johnson and Johnson. 0:07:18.920 --> 0:07:22.040 That's the next pharmaceutical company that we're really waiting on. Well, 0:07:22.080 --> 0:07:24.720 I think you make also an incredibly important point with 0:07:24.800 --> 0:07:27.560 your last question. You know, we've got to vaccinate the 0:07:27.600 --> 0:07:31.040 whole world. So even if the US is successful, the UK, 0:07:31.240 --> 0:07:34.120 Germany and France, if you if you leave all of 0:07:34.120 --> 0:07:36.600 the rest of the countries in the world without vaccinations, 0:07:36.800 --> 0:07:38.720 then they just spread a new variant and you have 0:07:38.760 --> 0:07:41.800 a new problem. Yep, absolutely so um, as we heard 0:07:41.800 --> 0:07:46.720 from Jalen, Uh, that is probably not likely till two. 0:07:46.960 --> 0:07:49.760 So uh, this is going to be an issue for 0:07:49.840 --> 0:07:52.840 some time. But again, uh, the vaccines are getting out 0:07:52.920 --> 0:07:56.360 and hopefully they can be ramped up in terms of timing. Matt. Thanks, 0:07:56.360 --> 0:07:58.880 what's for joining us today. We appreciate you. You're coming along. 0:07:58.880 --> 0:08:03.640 That was fun. Well, when we take a look at 0:08:03.840 --> 0:08:07.680 the large global airlines we saw the story of was 0:08:07.720 --> 0:08:13.120 a dramatic decline in passenger air travel commercially. How about 0:08:13.200 --> 0:08:15.880 on the private side. That's checking with Thomas Floor. He's 0:08:15.920 --> 0:08:18.600 a chairman and founder of Vistol Glober also the leader 0:08:18.600 --> 0:08:21.800 of the new private jet platform XO Thomas. Next, much 0:08:21.800 --> 0:08:23.960 for joining us here. You know, I think you know 0:08:24.120 --> 0:08:26.600 a lot of our audience is certainly familiar when they 0:08:26.600 --> 0:08:28.520 look at the Uniteds of the world, the Deltas of 0:08:28.560 --> 0:08:33.040 the world, the European airlines saw dramatic declines in air travel. 0:08:33.559 --> 0:08:39.199 What happened to the private jet industry? Hey, how are you? Uh, 0:08:39.480 --> 0:08:42.040 very very good question. I mean, what do we really 0:08:42.120 --> 0:08:45.240 saw with the what I call the destruction of the 0:08:45.280 --> 0:08:49.160 commercial infrastructure is the fact that you know, the the 0:08:49.160 --> 0:08:54.280 the uh CEO is the chairman, the the the important 0:08:54.320 --> 0:08:57.440 business leader around the globe. They still needed to travel 0:08:58.040 --> 0:09:01.280 and uh, we're not the ending on the load factor. 0:09:01.760 --> 0:09:06.120 So what happened was that the private jet industry really 0:09:06.200 --> 0:09:10.600 filled a gap and whilst overall travel was down, the 0:09:10.760 --> 0:09:16.920 addressable market has really uh multiplied in in in in 0:09:17.040 --> 0:09:20.560 the sense that there's a McKinsey study that up to 0:09:22.480 --> 0:09:25.280 people who can actually afford to fly on business sheds, 0:09:25.559 --> 0:09:29.319 they never did. They used the commercial infrastructure, and um, 0:09:29.360 --> 0:09:33.440 that is really a traumatic shift where people were before, 0:09:33.600 --> 0:09:36.439 you know, and maybe we're offering demo flights to show 0:09:36.440 --> 0:09:40.360 people the time effectiveness of business judge were now actually 0:09:40.400 --> 0:09:42.400 paying for them that because that was the only way 0:09:42.640 --> 0:09:46.079 to get from a certain destination to another destination. I 0:09:46.120 --> 0:09:49.920 can understand that, especially during a pandemic, it's a lot 0:09:49.920 --> 0:09:54.040 more attractive to fly private. UM. I flew commercial once 0:09:54.200 --> 0:09:56.840 during this pandemic and it's an experience that I never 0:09:56.960 --> 0:10:02.360 ever ever want to repeat. On the other hand, UM Thomas, 0:10:02.360 --> 0:10:06.760 there's been some events like Davos, which I'm sure must 0:10:06.760 --> 0:10:09.559 be a huge part of the private jet business. I mean, 0:10:09.679 --> 0:10:12.800 I look at the airfield there in Switzerland and see, 0:10:13.080 --> 0:10:15.120 you know, it seems like all of the private jets 0:10:15.120 --> 0:10:17.240 in the world go there once a year, and this 0:10:17.320 --> 0:10:20.000 year they didn't. Can you feel something like that the 0:10:20.040 --> 0:10:24.240 cancelation of Davos UM well, look, I mean there is 0:10:24.960 --> 0:10:27.720 it's kind of like a very popular event and so 0:10:27.720 --> 0:10:30.160 therefore it's kind of like covered by the press. But 0:10:30.600 --> 0:10:34.280 the the the the the market is a lot bigger 0:10:34.320 --> 0:10:37.199 than just the Davos type of thing. People would make 0:10:37.200 --> 0:10:40.880 the example of Super Bowl and what have you. I 0:10:40.920 --> 0:10:44.080 can only look at our data and our data at 0:10:44.320 --> 0:10:46.640 at this the global which you know, you know, we 0:10:46.679 --> 0:10:49.200 have the two brands. We have this the jet which 0:10:49.240 --> 0:10:51.760 really offers an alternative two aircraft ownership, and then we 0:10:51.800 --> 0:10:56.440 have the digital marketplace, which is flying so and at 0:10:56.440 --> 0:11:01.040 the flying level for example UM which sell memberships and 0:11:01.080 --> 0:11:04.640 so access to our fleet. We're seeing a three x 0:11:04.880 --> 0:11:07.880 in sign up of new members. And this is even 0:11:07.920 --> 0:11:11.600 if you compare Q two, which was the kind of 0:11:11.640 --> 0:11:14.440 like the center of the of the of the downturn 0:11:15.000 --> 0:11:18.640 of in due to COVID, we had over the year 0:11:18.720 --> 0:11:23.760 before a three x wall members signing up. Because people 0:11:23.800 --> 0:11:28.400 want access to a to a world infrastructure which gets 0:11:28.400 --> 0:11:31.280 them from A to B. And and so what I'm 0:11:31.320 --> 0:11:34.320 saying and what I was seeing on before, is that yes, 0:11:34.600 --> 0:11:37.640 there is less line than zoom other technologies that really 0:11:37.640 --> 0:11:41.439 makes it possible day to communicate. But there is still 0:11:41.480 --> 0:11:45.319 a very very big activity of flights UH in demand 0:11:45.360 --> 0:11:48.439 today and that's what we are seeing in our traffic 0:11:48.520 --> 0:11:51.800 data and both at the Vistitute level as well as 0:11:51.840 --> 0:11:54.960 at the as the Excel level. So Thomas, you talked about, 0:11:54.960 --> 0:11:58.920 so that that increases the demands that you saw last year. 0:11:59.160 --> 0:12:01.760 Give us a sense of kind of the breakdown between 0:12:01.880 --> 0:12:06.040 business versus personal slash leisure, because I think the expectation 0:12:06.120 --> 0:12:08.840 or the belief is that most of private jet aviation 0:12:09.040 --> 0:12:12.880 is business related m hm. And I think this is correct. 0:12:12.920 --> 0:12:15.920 I mean, if I had to give a more or 0:12:16.040 --> 0:12:20.079 less balanced break that, I'd say, it's it's still eight 0:12:20.200 --> 0:12:25.280 business and twenty leisure. Um, it's it's before. Let's let's 0:12:25.320 --> 0:12:28.520 take somebody needed to go from from Boston to Desmond 0:12:28.640 --> 0:12:32.360 in the Midwest, and and maybe today you can get there, 0:12:32.360 --> 0:12:34.079 but you need to change the airport. So now you're 0:12:34.080 --> 0:12:38.800 having your your exposure, your your health exposure to three 0:12:38.840 --> 0:12:43.760 airports and two airplanes. And today you know a couple 0:12:43.800 --> 0:12:47.120 of executives get together and say, okay, well four people flying, 0:12:47.640 --> 0:12:51.240 let's charter a plane. Uh go there in the morning, 0:12:51.320 --> 0:12:54.240 come back in the evening, having a safe travel bubble. 0:12:54.600 --> 0:12:56.680 And I think that's that's really one of the other 0:12:56.760 --> 0:13:00.160 drivery with that in the private jet industry, we're we're 0:13:00.200 --> 0:13:04.760 able to create these travel bubbles that everybody's tested from 0:13:05.000 --> 0:13:07.600 the driver taking you to the airplane. You're not going 0:13:07.640 --> 0:13:10.360 through a terminal building. You're actually pulling up in front 0:13:10.400 --> 0:13:13.880 of the airplane, and the pilots are tested and you 0:13:14.000 --> 0:13:16.000 go there at the pallets are not allowed to leave 0:13:16.080 --> 0:13:18.160 the airplane. Look, there's there's no way it could be 0:13:18.200 --> 0:13:21.560 worse timas than commercial flight. I mean there's zero social distancing. 0:13:21.600 --> 0:13:23.560 You're shoved together like sardines and a bus from the 0:13:23.559 --> 0:13:25.959 airport to the plane, and then no one knows how 0:13:25.960 --> 0:13:28.120 to properly wear a mask. Let me ask you about 0:13:28.160 --> 0:13:32.040 the infrastructure because I've been watching the UH this signal 0:13:32.480 --> 0:13:36.680 takeover battle. UM it's a company that helps fuel private 0:13:36.760 --> 0:13:40.320 jets and provides passenger Medagine do you see UH this 0:13:40.400 --> 0:13:43.760 market growing fast? I mean, does the infrastructure grow with 0:13:43.840 --> 0:13:47.000 the popular area in the demand. Yes, I mean we 0:13:47.000 --> 0:13:51.240 we have Look, I mean we went through and we 0:13:51.320 --> 0:13:55.800 have very clear signals internally here were we continue to expand. 0:13:55.840 --> 0:13:58.440 We we have more demand than we can fulfill on 0:13:58.440 --> 0:14:01.040 our own sleep. This such a day has a hundred 0:14:01.040 --> 0:14:04.599 thirty aircraft and we're planning to go to about one 0:14:04.679 --> 0:14:08.920 six because we're every day of the year we're about 0:14:09.400 --> 0:14:12.400 over subscribed and which we then need to sub charter 0:14:12.559 --> 0:14:16.120 and hence this is this is the demand. So I 0:14:16.160 --> 0:14:20.320 think you're bought on. Overall people travel less, but the 0:14:20.360 --> 0:14:23.480 addressable market is so much bigger, and it was One 0:14:23.480 --> 0:14:27.520 other interesting thing is that Thomas and we're running out 0:14:27.560 --> 0:14:28.880 of time and we're gonna have to leave it there, 0:14:28.880 --> 0:14:31.920 but will certainly follow up with you on the private 0:14:31.960 --> 0:14:35.720 jet aviation industry experiencing some growth here. That's Thomas Floord, 0:14:35.800 --> 0:14:40.479 chairman and founder of Vista Global. Today we're joined by 0:14:40.520 --> 0:14:45.200 Matt Miller from Berlin, Germany. Well, some active managers had 0:14:45.280 --> 0:14:49.120 quite in terms of performance. Our next guest is certainly 0:14:49.120 --> 0:14:51.320 one of them, Peter Anderson. He's the founder of Anderson 0:14:51.400 --> 0:14:56.240 Capital Management based in Boston. A return last year versus 0:14:56.280 --> 0:14:59.360 the SMP, A similar return actually in twenty nineteen as well. 0:14:59.440 --> 0:15:01.520 Let's get a s it's a kind of how he 0:15:01.600 --> 0:15:06.000 did it and what he's thinking about. Peter, thanks so 0:15:06.080 --> 0:15:08.920 much for joining us here. What were the winners for 0:15:09.000 --> 0:15:12.320 you last year? What worked for you? Well, you know, 0:15:12.440 --> 0:15:14.640 I stuck to basics. I have to tell you that 0:15:14.680 --> 0:15:18.640 I've been doing this since Paul, and I will tell 0:15:18.720 --> 0:15:23.800 you that me was the most difficult year ever to invest. 0:15:23.840 --> 0:15:27.320 There were so many uncertainties. Of course the virus headlining that, 0:15:27.960 --> 0:15:31.680 and um I really didn't change any of my discipline. 0:15:31.800 --> 0:15:36.120 What I've tried to find our stocks that are common sense, uh, 0:15:36.640 --> 0:15:41.160 easy to understand situations, and so some of the top 0:15:41.200 --> 0:15:45.560 performers actually were pet care stocks. I own a company 0:15:45.560 --> 0:15:50.360 called Trupanion, which is an insurance company health insurance company 0:15:50.400 --> 0:15:54.320 for animals. That stock has gone through the roof because 0:15:54.360 --> 0:15:59.040 the fundamentals are so appealing. Only one percent of pets 0:15:59.040 --> 0:16:02.560 out there are have health insurance. So can you imagine 0:16:02.960 --> 0:16:05.920 if we double just to two percent, that the revenues 0:16:06.000 --> 0:16:07.880 of that company with double. So it's things like that. 0:16:07.920 --> 0:16:10.720 I tried to keep my eye on the center ring 0:16:10.800 --> 0:16:13.760 of this three ring circus to worry, and sometimes it 0:16:13.760 --> 0:16:15.840 takes a lot of discipline, but if you do, I 0:16:16.120 --> 0:16:19.400 think it does pay off. I have my dog Steve 0:16:19.520 --> 0:16:23.960 insured to the eye teeth. I mean he's insured if 0:16:24.000 --> 0:16:27.680 he breaks your stuff, he's insured if you break his stuff. Um, 0:16:27.760 --> 0:16:30.560 and of course if he needed anything beyond what insurance 0:16:30.600 --> 0:16:33.800 to pay for, I'd sell a car to pay for Steve. 0:16:34.480 --> 0:16:40.080 You are, yeah, well, yes, people will pay anything for 0:16:40.120 --> 0:16:43.880 their pets, So that's a smart strategy, Pete. And congratulations 0:16:43.920 --> 0:16:48.000 on I mean, back to back plus gains is insanely good. 0:16:48.560 --> 0:16:54.080 But um, you know, does this keep working? Um? Can you? 0:16:54.240 --> 0:16:59.120 Can you still bet on these? Uh common sense value? 0:16:59.600 --> 0:17:03.320 Name as we as we bounce back from if we 0:17:03.360 --> 0:17:09.439 hopefully bounce back from pandemic. I would say with great courage, yes, 0:17:09.560 --> 0:17:13.840 it is more applicable now than it's ever been. And 0:17:13.880 --> 0:17:16.439 the reason I say that are there's so many um 0:17:16.920 --> 0:17:20.720 narratives out there now right about other types of industries, 0:17:20.760 --> 0:17:25.320 say cryptocurrency, which compare that to say dog food. I mean, 0:17:25.400 --> 0:17:28.520 just as an extreme example, right, because I also own 0:17:28.600 --> 0:17:34.040 Fresh Pet, which is a animal food producer. But when 0:17:34.040 --> 0:17:37.280 you look at cryptocurrency, I have no idea how that works, 0:17:37.440 --> 0:17:40.000 and I at least have the courage to tell people that, 0:17:40.400 --> 0:17:44.040 you know, most people have only a superficial knowledge of 0:17:44.119 --> 0:17:47.600 how cryptocurrency works, yet they plow into that. So I 0:17:47.640 --> 0:17:50.439 think more than ever, we are tempted. You know, I 0:17:50.480 --> 0:17:52.600 was talking about a three ring circus and the other 0:17:52.640 --> 0:17:55.040 two rings. There's a lot of things going on that 0:17:55.080 --> 0:17:58.320 can distract us from our main focus. One of them 0:17:58.359 --> 0:18:01.199 is cryptocurrency. Another one I inc and I know this 0:18:01.320 --> 0:18:06.160 is against most opinion out there, is the electric vehicle market. 0:18:06.359 --> 0:18:09.320 They're great cars, but they only they're less than five 0:18:09.359 --> 0:18:12.399 percent of the total addressable market. So we need to 0:18:12.440 --> 0:18:15.240 stay focused on this. And I think more than ever, 0:18:15.720 --> 0:18:19.680 common sense, simple to understand stories will win the day. 0:18:20.200 --> 0:18:24.200 Peter's you know, I would say, since the September time frame, 0:18:24.240 --> 0:18:26.399 if you will, kind of a rotation trade in the 0:18:26.440 --> 0:18:29.440 equity markets from some of the tried and true big 0:18:29.480 --> 0:18:31.240 tech names that have led the way really since the 0:18:31.280 --> 0:18:33.600 financial crisis, the Amazons, the Apples of the world, into 0:18:33.640 --> 0:18:37.680 some more cyclical names. How do you view that trade? Well, 0:18:37.720 --> 0:18:40.520 I view that kind of the way most people are 0:18:40.520 --> 0:18:44.640 looking at, uh the big spending bill that the government 0:18:44.880 --> 0:18:49.360 is UH projecting and the stimulus all that, and that 0:18:49.440 --> 0:18:53.720 does tie in with these rotations. However, I think timing 0:18:53.760 --> 0:18:57.119 those rotations is a fool's errand and I never tried 0:18:57.160 --> 0:18:59.680 to time markets like that. Of what I do is 0:18:59.720 --> 0:19:02.800 I say to myself, for instance, cyber security, is that 0:19:02.920 --> 0:19:06.520 a rotational type industry? Absolutely not, no matter what's going 0:19:06.640 --> 0:19:09.960 on in the country, if we're in a cyclical mode, uh, 0:19:10.160 --> 0:19:12.760 ben or value or growth, whatever however you want to 0:19:12.840 --> 0:19:17.720 call it. Cybersecurity names like Palo Alto and cyber Arc 0:19:17.960 --> 0:19:22.120 are there to stay. They are endurable. Uh, They're durable 0:19:22.160 --> 0:19:25.960 companies that I think will surpass anything in terms of 0:19:26.000 --> 0:19:29.479 trying to time markets back and forth like that. If 0:19:29.520 --> 0:19:33.320 he you know, um, James Carvill used to say, if 0:19:33.359 --> 0:19:35.320 there were a reincarnation, he wanted to come back as 0:19:35.320 --> 0:19:39.080 the bond market because the bond market was the boss 0:19:39.240 --> 0:19:42.399 and everyone was afraid of the bond market. But um, 0:19:42.440 --> 0:19:46.359 that's really not the case. I even saw US debt 0:19:46.440 --> 0:19:48.920 financing costs are going to be the lowest they've been 0:19:48.960 --> 0:19:52.159 in like four years this year. Um, is that going 0:19:52.240 --> 0:19:54.560 to stay that way? Because that's really been a huge 0:19:54.600 --> 0:19:58.840 tail wind. Fantastic points you're making, because of course, the 0:19:58.960 --> 0:20:03.480 other narrative out there now is uh, inflation, and people 0:20:03.480 --> 0:20:07.720 are very, very worried about interest rates going up, etcetera. 0:20:08.040 --> 0:20:10.760 And there's tons of work being done on that. And 0:20:11.000 --> 0:20:13.760 I think it's not as simple as most people think 0:20:13.840 --> 0:20:18.560 when they say, well, there's a stimulus plan that equals inflation, 0:20:18.920 --> 0:20:23.080 that equals higher rates. I don't foresee rates increasing for 0:20:23.160 --> 0:20:25.399 the next two years, and I think that puts me 0:20:25.520 --> 0:20:29.600 on a very uh a minority group of talking about 0:20:29.760 --> 0:20:33.000 interest rates. But the common sense application of this again, 0:20:33.040 --> 0:20:35.480 I just go back to this, is that the FED 0:20:35.600 --> 0:20:38.160 is not going to make any movement right now because 0:20:38.200 --> 0:20:40.920 we have to recover from the virus. Hey, Peter, thank 0:20:40.960 --> 0:20:43.280 you so much for joining us. Always appreciate getting your thoughts. 0:20:43.280 --> 0:20:51.680 Peter Anderson, founder of Anderson Capital Management, two years plus return. 0:20:51.840 --> 0:20:54.400 Certainly getting it right in the equity markets. A lot 0:20:54.400 --> 0:20:59.760 more coming up. Sweeney here, accompanied by Matt Miller from 0:20:59.760 --> 0:21:03.399 her in Germany. Let's take a look at the theater business. Um. 0:21:03.440 --> 0:21:05.880 You know, it's really obviously most of the theaters around 0:21:05.880 --> 0:21:07.920 the world have been closed since the beginning this pandemic, 0:21:08.080 --> 0:21:11.600 really crushing their balance sheets, and one of them, a 0:21:11.800 --> 0:21:14.720 MC the largest, is trying to shore up its balance sheet. 0:21:14.920 --> 0:21:17.520 Cat Doherty joins us. She's a high yield distressed debt 0:21:17.520 --> 0:21:21.160 and bankruptcy reporter from Bloomberg News joined us on the phone. 0:21:21.560 --> 0:21:23.679 Kat talked to us about a MC again, the world's 0:21:23.800 --> 0:21:27.720 largest theater operator, really filling the pain of this pandemic 0:21:27.720 --> 0:21:29.840 and what it's done to theater tendance. What's it doing 0:21:29.840 --> 0:21:33.440 with its balance sheet? Well, the latest today is just 0:21:33.480 --> 0:21:36.720 a string of actions that it's taken since the peak 0:21:36.760 --> 0:21:39.400 of the pandemic, when it saw a number of its 0:21:39.600 --> 0:21:43.840 theaters closed a majority um last spring, and now they've 0:21:43.960 --> 0:21:48.600 reopened about three hundred to four hundred of those in 0:21:48.640 --> 0:21:52.359 the US, but still they're seeing attendance at all time lows. 0:21:52.359 --> 0:21:56.640 So today they announced new financing that they secured. This 0:21:56.680 --> 0:22:01.200 is a combination of debt and equity. They've been going 0:22:01.240 --> 0:22:05.040 to the equity markets to raise new capital and they're 0:22:05.119 --> 0:22:09.000 using that capital to try to get through the next 0:22:09.119 --> 0:22:13.960 few months, really looking for the summer when they're hoping 0:22:14.240 --> 0:22:18.680 the vaccine will be UM largely used and they'll see 0:22:19.119 --> 0:22:22.199 movie goers back in their seats. I don't know about you, 0:22:22.280 --> 0:22:26.160 but I will be the first person there. I mean 0:22:26.160 --> 0:22:28.359 when when they open back up. I used to go 0:22:28.400 --> 0:22:31.120 to the movies every week, you know. Um, and it's 0:22:31.240 --> 0:22:34.359 killing me that I can't do any of this stuff. Uh. 0:22:34.600 --> 0:22:38.800 What does a m C say about their expected rebound. Well, 0:22:38.880 --> 0:22:41.040 they're hoping that a lot of their movie goers are 0:22:41.080 --> 0:22:43.639 just like you, that there is pent up demand and 0:22:43.640 --> 0:22:47.080 that there are many users viewers that want to be 0:22:47.280 --> 0:22:50.639 back in the seats of the theater seeing the movies 0:22:50.680 --> 0:22:53.080 on the big screen and not just at home. We've 0:22:53.119 --> 0:22:56.920 seen a lot of pressure even before the pandemic, with 0:22:57.200 --> 0:23:01.840 consumers shifting to Netflix and other streaming services. UM, but 0:23:01.960 --> 0:23:06.000 others do want to see these movies, uh, in an 0:23:06.000 --> 0:23:09.399 experience that's unlike any other. UM, when you're seeing it 0:23:09.440 --> 0:23:12.680 in front of a big screen away from your home. UM. 0:23:12.720 --> 0:23:16.119 And I think that the pandemic has has just is 0:23:16.160 --> 0:23:19.960