1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day, we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,520 --> 00:00:15,600 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,600 --> 00:00:18,439 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:22,880 Speaker 1: at Bloomberg dot com slash podcast. Dan Genter all right, 7 00:00:22,880 --> 00:00:26,520 Speaker 1: he's a CEO CIO chairman of this r NC Genter 8 00:00:26,560 --> 00:00:28,960 Speaker 1: Capital Management. That's all good, and we'll get to the 9 00:00:29,000 --> 00:00:32,360 Speaker 1: markets there. There's also graduate of the University of Southern California. 10 00:00:32,400 --> 00:00:34,920 Speaker 1: But California Day, I know, so I have to ask 11 00:00:35,080 --> 00:00:37,199 Speaker 1: the question, Danna. Maybe you don't have an opinion, but 12 00:00:38,159 --> 00:00:40,400 Speaker 1: Southern cal and u c l A are leaving the 13 00:00:40,440 --> 00:00:44,240 Speaker 1: Packed twelve for the Big ten. What are you guys thinking? 14 00:00:46,080 --> 00:00:48,480 Speaker 1: You know, I don't know what they're thinking, because it's 15 00:00:48,760 --> 00:00:51,159 Speaker 1: you know, we we the Pack ten has always been, 16 00:00:51,320 --> 00:00:54,560 Speaker 1: you know, very very competitive. I think they just kind 17 00:00:54,560 --> 00:00:56,200 Speaker 1: of don't like the way it's being run. And and and 18 00:00:56,520 --> 00:00:58,800 Speaker 1: and look, when you look at the domination of college 19 00:00:58,800 --> 00:01:02,280 Speaker 1: football here in America, stor only the SEC has dominated. 20 00:01:02,640 --> 00:01:04,520 Speaker 1: They don't have any chance to go that way, but 21 00:01:04,600 --> 00:01:06,559 Speaker 1: they can move a little further, eats get a little 22 00:01:06,560 --> 00:01:08,800 Speaker 1: more integrated, and I think they're just trying to increase 23 00:01:08,840 --> 00:01:11,360 Speaker 1: the level of play and frankly, get a little more 24 00:01:11,400 --> 00:01:14,240 Speaker 1: competitive with regards to being able to recruit new players. 25 00:01:14,280 --> 00:01:16,800 Speaker 1: So I think that's the strategy. You know, Well, we're 26 00:01:16,800 --> 00:01:18,600 Speaker 1: gonna have to travel a little further to go to game. 27 00:01:19,520 --> 00:01:24,120 Speaker 1: I will buy Dan a ticket to a Rutgers game 28 00:01:24,440 --> 00:01:27,640 Speaker 1: in New Brunswick, New Jersey. Money says he doesn't show 29 00:01:27,720 --> 00:01:29,720 Speaker 1: up though, I mean, they're not going to travel to 30 00:01:30,280 --> 00:01:32,480 Speaker 1: you know, champagne. What does it mean for the Rose Bowl? 31 00:01:32,760 --> 00:01:37,080 Speaker 1: I don't know. I don't know, guys, but you but 32 00:01:37,080 --> 00:01:39,160 Speaker 1: but you know you you offer some champagne. Maybe it's 33 00:01:39,200 --> 00:01:41,080 Speaker 1: some good whiskey, and I think we're we gotta bet 34 00:01:41,120 --> 00:01:44,920 Speaker 1: going on board. Hey Dan, we've had a rocky few 35 00:01:44,959 --> 00:01:48,960 Speaker 1: days here, a rocky two. What are you telling your 36 00:01:49,040 --> 00:01:53,120 Speaker 1: clients here as boy? You know, Mr Pale is certainly 37 00:01:53,200 --> 00:01:58,000 Speaker 1: making good on his interest rate rise regime. Yeah, you know, gentlemen, 38 00:01:58,240 --> 00:02:00,840 Speaker 1: I've been doing this for forty three years, and despite 39 00:02:00,840 --> 00:02:03,680 Speaker 1: the fact of how much everybody tries, we're just dealing 40 00:02:03,760 --> 00:02:07,120 Speaker 1: with a very very classic You can't fight the FED situation, 41 00:02:07,720 --> 00:02:09,880 Speaker 1: and and we can, you know, talk about all the 42 00:02:09,880 --> 00:02:12,400 Speaker 1: theories behind that, but the basic reality is is that 43 00:02:12,440 --> 00:02:15,280 Speaker 1: when you're when you're significantly increasing the cost of capital, 44 00:02:15,680 --> 00:02:18,680 Speaker 1: you're gonna adjust pe ratios. And that's exactly what we're seeing. 45 00:02:18,720 --> 00:02:21,040 Speaker 1: I mean, this is this is not an earnings issue. 46 00:02:21,480 --> 00:02:25,359 Speaker 1: You know, the economy really is fairly solid across the board, 47 00:02:25,360 --> 00:02:28,200 Speaker 1: which is also I think what's confusing people. But you know, 48 00:02:28,240 --> 00:02:30,880 Speaker 1: when but when you're going to compress margins and you're 49 00:02:30,880 --> 00:02:33,600 Speaker 1: going to compress earnings and you have this kind of uncertainty, 50 00:02:33,880 --> 00:02:35,640 Speaker 1: you know, that's why we're sitting at a sixteen and 51 00:02:35,639 --> 00:02:38,399 Speaker 1: a half p right now, and it's gonna be even 52 00:02:38,400 --> 00:02:39,960 Speaker 1: though the earnings you know, look we're gonna be up 53 00:02:40,040 --> 00:02:42,480 Speaker 1: nine percent next year based on one projections at about 54 00:02:42,800 --> 00:02:45,399 Speaker 1: two forty three, and we're doing pretty well this year. 55 00:02:45,440 --> 00:02:48,880 Speaker 1: So this really is not an earnings economic issue. It's 56 00:02:48,919 --> 00:02:52,280 Speaker 1: a it's a consolidation issue, you know, based upon cost 57 00:02:52,320 --> 00:02:55,280 Speaker 1: of capital. And there's not a near term end in 58 00:02:55,320 --> 00:02:57,519 Speaker 1: sighting that you don't think that strategists are going to 59 00:02:57,600 --> 00:03:01,960 Speaker 1: have to bring down earnings expect patians um into next year. 60 00:03:02,000 --> 00:03:04,840 Speaker 1: I mean, Morgan Stanley and Bank America are already warning 61 00:03:04,880 --> 00:03:08,800 Speaker 1: that because of this interest rate environment, they're gonna have to, 62 00:03:09,639 --> 00:03:12,040 Speaker 1: you know, analysts are gonna have to continue to bring 63 00:03:12,040 --> 00:03:14,960 Speaker 1: the bar lower the bar. I think they're gonna have to. 64 00:03:15,320 --> 00:03:18,520 Speaker 1: But but the uncertainty is that nobody knows where because 65 00:03:18,680 --> 00:03:20,919 Speaker 1: the same thing was said about this year. Yet we're 66 00:03:20,960 --> 00:03:23,160 Speaker 1: still really on track to be two thirty this year 67 00:03:23,680 --> 00:03:27,280 Speaker 1: because you people have they have raised prices. You've actually 68 00:03:27,280 --> 00:03:29,960 Speaker 1: not had that much margin compression just because they've been 69 00:03:29,960 --> 00:03:32,320 Speaker 1: able to raise prices and revenues have actually gone up 70 00:03:32,320 --> 00:03:35,720 Speaker 1: about four So I think that's really where people keep 71 00:03:35,800 --> 00:03:38,720 Speaker 1: trying to fight this back, saying, hey, what what is 72 00:03:38,760 --> 00:03:41,200 Speaker 1: the FED seeing that we're not seeing? Is that things 73 00:03:41,240 --> 00:03:44,120 Speaker 1: just don't look that bad. And then when the Fed 74 00:03:44,200 --> 00:03:47,760 Speaker 1: comes out like Pole did and doubles down and saying, well, 75 00:03:47,880 --> 00:03:50,040 Speaker 1: you know, we don't really care. We're gonna keep slamming 76 00:03:50,080 --> 00:03:53,120 Speaker 1: on the brake here and you better be careful, have 77 00:03:53,200 --> 00:03:55,480 Speaker 1: your seatbelt on, and all the luggage it's not strapped 78 00:03:55,480 --> 00:03:58,080 Speaker 1: out of the back is gonna come flying forward. So 79 00:03:58,440 --> 00:04:00,080 Speaker 1: that's what people are looking at. Well, they can, and 80 00:04:00,280 --> 00:04:03,360 Speaker 1: I mean the FED can continue to raise rates as 81 00:04:03,440 --> 00:04:05,960 Speaker 1: long as we're looking at three and a half percent 82 00:04:06,040 --> 00:04:08,760 Speaker 1: unemployment right, as long as jolts numbers come in the 83 00:04:08,800 --> 00:04:10,920 Speaker 1: way they did today, as long as the economy feels 84 00:04:10,960 --> 00:04:16,320 Speaker 1: like it's smooth sailing. Um, you know, the contraction and 85 00:04:16,360 --> 00:04:19,720 Speaker 1: growth in the first and second quarter notwithstanding. Um. This 86 00:04:19,800 --> 00:04:22,640 Speaker 1: is why I don't get how comes so many on 87 00:04:22,680 --> 00:04:25,719 Speaker 1: the by side don't take the FED at its word. 88 00:04:26,320 --> 00:04:29,200 Speaker 1: Why are so many people who have been you know, 89 00:04:29,440 --> 00:04:31,680 Speaker 1: you're in the market for forty three years, Paul and 90 00:04:31,760 --> 00:04:33,039 Speaker 1: I had lunch with the guy who's been in this 91 00:04:33,120 --> 00:04:35,920 Speaker 1: market for twenty thirty years. I know some very big 92 00:04:35,960 --> 00:04:38,039 Speaker 1: fund managers who've been in this market for thirty or 93 00:04:38,040 --> 00:04:40,640 Speaker 1: forty years, and they're all fighting the FED. They don't 94 00:04:40,680 --> 00:04:43,960 Speaker 1: believe Powell's narrative, and they think they're going to have 95 00:04:44,040 --> 00:04:47,760 Speaker 1: to cut in. Well, look, the FED has a long 96 00:04:47,880 --> 00:04:50,680 Speaker 1: term history of basically trying to, you know, walk back 97 00:04:50,760 --> 00:04:54,000 Speaker 1: the economy, and I think for a lot of veterans, 98 00:04:54,040 --> 00:04:56,360 Speaker 1: they're not convinced that they're not trying to do that. 99 00:04:56,839 --> 00:04:59,200 Speaker 1: I think they're becoming more convinced. And certainly the comments 100 00:04:59,320 --> 00:05:01,960 Speaker 1: this this week, which I mentioned kind of double down 101 00:05:02,440 --> 00:05:03,960 Speaker 1: is that, hey, our foots on the brake and we're 102 00:05:03,960 --> 00:05:07,520 Speaker 1: gonna keep pushing harder. And and people are that they 103 00:05:07,560 --> 00:05:10,359 Speaker 1: are finally getting the message that that's going to happen, 104 00:05:10,600 --> 00:05:12,880 Speaker 1: and the concern is that they're gonna over that. They're 105 00:05:12,920 --> 00:05:16,000 Speaker 1: just gonna overdo it. You mentioned USC. You know, one 106 00:05:16,000 --> 00:05:18,520 Speaker 1: of my professors at USC's business school was Art Laugher. 107 00:05:19,040 --> 00:05:21,479 Speaker 1: And one of the things that aren't always said is 108 00:05:21,600 --> 00:05:24,640 Speaker 1: be careful the bullets that you shoot out there, because 109 00:05:24,680 --> 00:05:26,680 Speaker 1: you're not going to know where they hit the target 110 00:05:26,960 --> 00:05:29,760 Speaker 1: for nine to twelve months. And by the time you 111 00:05:29,800 --> 00:05:32,880 Speaker 1: know where it's hitting the target, if the target gets shattered, 112 00:05:33,279 --> 00:05:35,279 Speaker 1: then you've got another nine months before you can try 113 00:05:35,320 --> 00:05:37,400 Speaker 1: to put up a new target and correct it. And 114 00:05:37,440 --> 00:05:40,960 Speaker 1: so that's what's concerning people right now is to say, hey, 115 00:05:41,000 --> 00:05:44,239 Speaker 1: are they just overdoing it to get inflation numbers down 116 00:05:44,400 --> 00:05:46,920 Speaker 1: so they can post that. And what we're gonna do 117 00:05:47,000 --> 00:05:48,920 Speaker 1: is now they're going to take what's a pretty good economy, 118 00:05:49,279 --> 00:05:51,280 Speaker 1: drive it into a recession, and then we're gonna see 119 00:05:51,320 --> 00:05:54,200 Speaker 1: earnings really come down. All right, Dan, thirty seconds, give 120 00:05:54,240 --> 00:05:56,520 Speaker 1: us your pitch on E n B A. It's an 121 00:05:56,520 --> 00:05:59,920 Speaker 1: EMU like, well, if the energy space and the utilities 122 00:06:00,000 --> 00:06:02,440 Speaker 1: are the only as positive for the year. Uh we 123 00:06:02,600 --> 00:06:04,280 Speaker 1: even though you're on a rough day today, we think 124 00:06:04,360 --> 00:06:07,320 Speaker 1: is going to continue. And it's it has the largest 125 00:06:07,320 --> 00:06:11,839 Speaker 1: North American infrastructure midstream as the biggest gas utilia in Canada. 126 00:06:12,040 --> 00:06:13,920 Speaker 1: You've got a six point two percent yeo while you 127 00:06:14,000 --> 00:06:17,200 Speaker 1: wait and only it's a good place to you know, 128 00:06:17,279 --> 00:06:18,880 Speaker 1: to to hang out and make some money while you 129 00:06:18,880 --> 00:06:21,560 Speaker 1: wait this out. Energy love it. It's having its time 130 00:06:21,560 --> 00:06:23,760 Speaker 1: in the samething like healthcare, gilead. Yeah, I know, either 131 00:06:23,839 --> 00:06:26,040 Speaker 1: all over that stuff. Well, we'll talk to Dan about 132 00:06:26,080 --> 00:06:28,920 Speaker 1: that next time. Dan Genter, CEO, ce IO and chairman 133 00:06:29,360 --> 00:06:36,279 Speaker 1: of r n C Genter Capital Management. Let's talk about 134 00:06:36,279 --> 00:06:40,000 Speaker 1: the independent financial advisor business. That is a huge business 135 00:06:40,120 --> 00:06:43,840 Speaker 1: as more and more advisors become independent and they're out 136 00:06:43,839 --> 00:06:47,919 Speaker 1: there gathering assets and managing those assets, dealing with the 137 00:06:48,000 --> 00:06:51,719 Speaker 1: changing technologies not as well as the changing markets. Natalie 138 00:06:51,720 --> 00:06:54,240 Speaker 1: Wolfson's CEO of asset Mark, joins us here in our 139 00:06:54,240 --> 00:06:57,520 Speaker 1: Bloomberg Interactive Brokers studio. Natalie, just take us a couple 140 00:06:57,560 --> 00:06:59,880 Speaker 1: of seconds, just tell us what you do at ass 141 00:07:00,000 --> 00:07:03,280 Speaker 1: set Mark and how to help these financial advisors. Thanks 142 00:07:03,279 --> 00:07:05,040 Speaker 1: so much. Well, it asked Mark. What we do is 143 00:07:05,080 --> 00:07:09,800 Speaker 1: we provide technology, investments, due diligence, and servicing and support 144 00:07:09,840 --> 00:07:13,240 Speaker 1: for financial advisors so that financial advisors at all sizes 145 00:07:13,320 --> 00:07:16,840 Speaker 1: can compete. Um. If they need uh, you know, support 146 00:07:16,920 --> 00:07:19,160 Speaker 1: as it relates to how they talk to clients or 147 00:07:19,560 --> 00:07:21,560 Speaker 1: the technology they use, they can come to asset Mark 148 00:07:21,600 --> 00:07:24,880 Speaker 1: and we help them provide those services to their clients. 149 00:07:24,880 --> 00:07:27,200 Speaker 1: It's very cool. You know. In the past, if I 150 00:07:27,200 --> 00:07:29,640 Speaker 1: needed a financial advisor, I probably would have chosen somebody 151 00:07:29,640 --> 00:07:31,200 Speaker 1: from New York and they have a ton of overhead 152 00:07:31,240 --> 00:07:32,840 Speaker 1: and I would have paid a bigger fee. But now 153 00:07:33,040 --> 00:07:35,720 Speaker 1: because everything is by zoom anyway, I have a financial 154 00:07:35,720 --> 00:07:38,800 Speaker 1: advisor in Grandville, Ohio, and I meet with him over 155 00:07:38,880 --> 00:07:41,600 Speaker 1: Zoom and he uses these kind of products to show 156 00:07:41,640 --> 00:07:46,000 Speaker 1: me everything, you know, in real time. Um. You also though, 157 00:07:46,760 --> 00:07:51,040 Speaker 1: supply household investor households with technology. Right, What's It's a 158 00:07:51,120 --> 00:07:54,200 Speaker 1: much bigger uh number in terms of um, you know, 159 00:07:54,400 --> 00:07:58,680 Speaker 1: the customers. What's what's that product? Yeah, So we served 160 00:07:58,840 --> 00:08:01,760 Speaker 1: independent financial advisor is and about two hundred and twenty 161 00:08:01,840 --> 00:08:06,120 Speaker 1: thousand households and those households are served by the independent 162 00:08:06,120 --> 00:08:10,840 Speaker 1: financial advisors. By the independent financial advisors so that's counted 163 00:08:10,840 --> 00:08:13,840 Speaker 1: in your platform massets, which is like eight billion dollars 164 00:08:13,920 --> 00:08:16,320 Speaker 1: or something. That's right, eight two billion as of June 165 00:08:16,840 --> 00:08:20,440 Speaker 1: of this year. And what we do is we provide 166 00:08:20,440 --> 00:08:23,520 Speaker 1: advisors with technology, and those advisors need technology to have 167 00:08:23,640 --> 00:08:27,280 Speaker 1: great conversations with their clients. Clients want to see their portfolios, 168 00:08:27,320 --> 00:08:30,080 Speaker 1: they want to engage with their financial plans, they want 169 00:08:30,120 --> 00:08:32,960 Speaker 1: to ask questions about what's happening with our portfolios, especially 170 00:08:32,960 --> 00:08:36,000 Speaker 1: in markets like this, And the technology and the services 171 00:08:36,040 --> 00:08:38,840 Speaker 1: and the diligence that Asset Mark provides helps the financial 172 00:08:38,840 --> 00:08:42,240 Speaker 1: advisors deliver those services to investors. So for you, when 173 00:08:42,240 --> 00:08:45,000 Speaker 1: you're engaging with your financial plan, you're probably doing it 174 00:08:45,360 --> 00:08:49,320 Speaker 1: over a zoom meeting through technology that shows you different scenarios. 175 00:08:49,480 --> 00:08:51,880 Speaker 1: What happens if fixed income comes off a little bit more, 176 00:08:51,960 --> 00:08:55,640 Speaker 1: what happens if equities are depressed for the remainder of 177 00:08:55,640 --> 00:08:57,920 Speaker 1: the year. What happens if my daughter goes to college 178 00:08:57,920 --> 00:09:02,600 Speaker 1: in America or for free in Spain. Oh really, it's 179 00:09:02,600 --> 00:09:05,640 Speaker 1: a it's a hugely different scenario. It is, it is, 180 00:09:05,800 --> 00:09:08,200 Speaker 1: and our technology would help your financial advisor have that 181 00:09:08,240 --> 00:09:11,920 Speaker 1: conversation with you. What are the financial advisors I wonder 182 00:09:11,960 --> 00:09:14,360 Speaker 1: how your your business and the business of independent financial 183 00:09:14,360 --> 00:09:19,960 Speaker 1: advisors changed during the pandemic. The business of delivering advice 184 00:09:20,200 --> 00:09:25,760 Speaker 1: changed fundamentally during the pandemic um Overnight UH financial advisors 185 00:09:25,760 --> 00:09:30,560 Speaker 1: and their clients were forced to adopt technology, and technology 186 00:09:31,200 --> 00:09:35,760 Speaker 1: enriches the conversation. And it was very, very quickly after 187 00:09:36,320 --> 00:09:40,320 Speaker 1: the pandemic started that financial advisors started to realize that 188 00:09:40,480 --> 00:09:44,319 Speaker 1: you can have in many cases better conversations when the 189 00:09:45,160 --> 00:09:48,440 Speaker 1: data is interactive. And so, going back to your conversation 190 00:09:48,480 --> 00:09:52,319 Speaker 1: with your financial advisor, if you're worried about a particular 191 00:09:52,400 --> 00:09:56,720 Speaker 1: particular market scenario, or you're interested and understanding the difference 192 00:09:56,720 --> 00:09:58,640 Speaker 1: in your ability to retire, if your daughter goes to 193 00:09:58,640 --> 00:10:01,040 Speaker 1: school in Spain or goes to United States, you can 194 00:10:01,080 --> 00:10:04,679 Speaker 1: make those adjustments in real time using technology. And so 195 00:10:04,720 --> 00:10:07,959 Speaker 1: what financial advisors have seen is while the one on 196 00:10:07,960 --> 00:10:12,320 Speaker 1: one inner personal conversations are still important and powerful, the 197 00:10:12,520 --> 00:10:15,360 Speaker 1: ongoing conversations to make sure you're on track, to make 198 00:10:15,360 --> 00:10:17,959 Speaker 1: sure your portfolio is doing what you intended to do, 199 00:10:18,600 --> 00:10:22,800 Speaker 1: that's better served online and through technology. I feel like 200 00:10:22,840 --> 00:10:24,880 Speaker 1: there must have been two big changes. Right on the 201 00:10:24,920 --> 00:10:29,160 Speaker 1: one hand, you had um a lot of business happening 202 00:10:29,200 --> 00:10:33,360 Speaker 1: remotely or happening over um fiber. And on the other hand, 203 00:10:33,440 --> 00:10:37,320 Speaker 1: you had a huge resurgence in interest, right because of 204 00:10:37,360 --> 00:10:41,240 Speaker 1: stimmies and meme stocks and Wall Street bets in investing, 205 00:10:41,360 --> 00:10:44,960 Speaker 1: and so even you know, non Wall Street bets board 206 00:10:44,960 --> 00:10:48,080 Speaker 1: members were We're saying, hey, let me look at how 207 00:10:48,120 --> 00:10:49,840 Speaker 1: I can make money in this market, how I can 208 00:10:49,880 --> 00:10:51,640 Speaker 1: move my assets. Right, So is that is that part 209 00:10:51,679 --> 00:10:53,600 Speaker 1: of the growth as well? I noticed you spent time 210 00:10:53,600 --> 00:10:55,760 Speaker 1: at Charles Schwab, which must be a huge beneficiary of 211 00:10:55,800 --> 00:10:58,480 Speaker 1: that as well. Yeah, you know, speaking of of charl Schwab, 212 00:10:58,520 --> 00:11:01,880 Speaker 1: they they print at a report about the next generation 213 00:11:01,920 --> 00:11:05,840 Speaker 1: of investors. And one thing that's incredibly exciting about this 214 00:11:05,920 --> 00:11:09,480 Speaker 1: generation or this uh, this generation of investors is they're 215 00:11:09,520 --> 00:11:14,760 Speaker 1: extremely excited about investing UM. In fact of all investors 216 00:11:14,760 --> 00:11:19,040 Speaker 1: started investing post two thousand twenty, and so this generation 217 00:11:19,040 --> 00:11:25,400 Speaker 1: that's that of new investors started investing post and they 218 00:11:25,440 --> 00:11:29,080 Speaker 1: started investing in new asset classes. So whether it's a 219 00:11:29,080 --> 00:11:33,200 Speaker 1: bitcoin or n f t s or they UM gravitated 220 00:11:33,200 --> 00:11:36,840 Speaker 1: towards robin hood because of fractional shares, they're interested and 221 00:11:36,920 --> 00:11:40,280 Speaker 1: excited about saving in that way. Now, the last year 222 00:11:40,400 --> 00:11:44,480 Speaker 1: has been pretty tough for those investors. Doesn't stem their 223 00:11:44,520 --> 00:11:47,240 Speaker 1: overall interests though, and their excitement about investing makes them 224 00:11:47,240 --> 00:11:50,080 Speaker 1: think about investing differently. And that's where advice comes in. 225 00:11:50,120 --> 00:11:52,400 Speaker 1: You don't have to be all or nothing as it 226 00:11:52,480 --> 00:11:55,920 Speaker 1: relates to a particular type of investment all in bitcoin, 227 00:11:56,040 --> 00:11:58,760 Speaker 1: all in game stop. Yeah, maybe I should get a 228 00:11:58,760 --> 00:12:03,720 Speaker 1: financial advisor instead. Oh, that financial advisor uses your software exactly. 229 00:12:03,760 --> 00:12:06,839 Speaker 1: All right, Natalie, great stuff. Really appreciate you coming into 230 00:12:06,840 --> 00:12:09,960 Speaker 1: our Bloomberg and Director Broker studio. That's a sponsored job. 231 00:12:10,000 --> 00:12:12,400 Speaker 1: There you go, uh, CEO of Asset Market. They're based 232 00:12:12,400 --> 00:12:15,840 Speaker 1: in Concord, California. Uh, good stuff. And she is a 233 00:12:15,840 --> 00:12:21,320 Speaker 1: product Matt of the California University System, the undergraded Berkeley 234 00:12:21,840 --> 00:12:24,560 Speaker 1: NBA from u C l A. That's pretty good, Professor 235 00:12:24,559 --> 00:12:26,520 Speaker 1: Scott Galloway at n y U. He says one of 236 00:12:26,520 --> 00:12:29,120 Speaker 1: the greatest benefits he ever received his like was being 237 00:12:29,120 --> 00:12:31,400 Speaker 1: born in the state of California, because then you can 238 00:12:31,480 --> 00:12:34,120 Speaker 1: get the great education from the UC, great academics and 239 00:12:34,200 --> 00:12:41,679 Speaker 1: great football. Yeah, and not a bad beach Elon Musk Twitter, 240 00:12:41,760 --> 00:12:46,280 Speaker 1: that saga continues. He cited the recent accusations from a 241 00:12:46,320 --> 00:12:50,040 Speaker 1: Twitter whistleblower as a new reason to terminate the forty 242 00:12:50,080 --> 00:12:53,199 Speaker 1: four billion dollar takeover of the social media platform. Does 243 00:12:53,200 --> 00:12:58,240 Speaker 1: this have any more value than perhaps the initial termination letter, 244 00:12:58,240 --> 00:13:00,319 Speaker 1: which focused on the box. I don't know, but Dan 245 00:13:00,440 --> 00:13:03,400 Speaker 1: ives he follows this stuff on Wall Street. He's a 246 00:13:03,440 --> 00:13:07,000 Speaker 1: managing director and senior equity analysts web Bush Securities. Hey, Dan, 247 00:13:07,360 --> 00:13:10,640 Speaker 1: as you when you know your institutional investor clients. Look 248 00:13:10,640 --> 00:13:14,440 Speaker 1: at this latest news from Musk talking about the whistle blower. 249 00:13:14,960 --> 00:13:17,720 Speaker 1: What do you guys make of it? Well? I think 250 00:13:17,720 --> 00:13:20,360 Speaker 1: it gives Musk a leg to stand on going into 251 00:13:20,440 --> 00:13:23,960 Speaker 1: Delaware Court in October. I mean from Musk, it's essential 252 00:13:24,160 --> 00:13:27,280 Speaker 1: like a kid in Christmas morning finding something under the tree. 253 00:13:27,400 --> 00:13:32,200 Speaker 1: Because Twitter had ironclad case going into court. And I 254 00:13:32,280 --> 00:13:35,160 Speaker 1: think this does change the calculus. Really, I think you're 255 00:13:35,160 --> 00:13:38,240 Speaker 1: seeing that reflecting Twitter stock. I mean it doesn't. I 256 00:13:38,559 --> 00:13:43,200 Speaker 1: read this whole report. He doesn't say anything that I 257 00:13:43,240 --> 00:13:47,400 Speaker 1: wouldn't have known was true before Elon Musk made the offer, 258 00:13:47,720 --> 00:13:50,000 Speaker 1: or during or after. I mean, the idea that there 259 00:13:50,040 --> 00:13:52,400 Speaker 1: are too many bots on Twitter. We all knew that 260 00:13:52,720 --> 00:13:55,880 Speaker 1: two years ago, last year, a month ago, next month, 261 00:13:56,120 --> 00:13:57,560 Speaker 1: Like none of the none of the stuff is New 262 00:13:57,600 --> 00:13:59,800 Speaker 1: I feel like Elon Musk just spouts off on so 263 00:14:00,160 --> 00:14:02,560 Speaker 1: media about stuff he's gonna do. He's gonna take his 264 00:14:02,600 --> 00:14:05,600 Speaker 1: company private for four twenty, or he's gonna, you know, 265 00:14:05,720 --> 00:14:08,960 Speaker 1: pump up doge coin, or he's gonna make a cyber truck, 266 00:14:09,040 --> 00:14:11,520 Speaker 1: or he's gonna buy Twitter. He doesn't mean any of it. 267 00:14:12,880 --> 00:14:17,160 Speaker 1: Look and I think finally he really find himself between 268 00:14:17,160 --> 00:14:20,960 Speaker 1: the rock and hard place, because we really speaking, Twitter 269 00:14:21,120 --> 00:14:24,840 Speaker 1: has a very strong stand going into Delaware Court, and 270 00:14:24,880 --> 00:14:26,960 Speaker 1: I think must seize the writing on the wall. And 271 00:14:27,040 --> 00:14:28,840 Speaker 1: that's why, you know, I think this is all a 272 00:14:28,880 --> 00:14:32,120 Speaker 1: game of high stakes poker in some sort of renegotiation 273 00:14:32,200 --> 00:14:34,680 Speaker 1: with Twitter, because he's basically going to find himself either 274 00:14:34,800 --> 00:14:38,080 Speaker 1: needing to buy Twitter in terms of being forced by 275 00:14:38,160 --> 00:14:42,080 Speaker 1: the courts of twenty or a massive settlement. And that's 276 00:14:42,200 --> 00:14:45,960 Speaker 1: really where the Zacho situation, you know, has really been 277 00:14:46,240 --> 00:14:49,720 Speaker 1: something where I think he has a small victory and 278 00:14:49,760 --> 00:14:52,520 Speaker 1: he's definitely trying to pounce on it. Well, for those 279 00:14:52,560 --> 00:14:56,240 Speaker 1: that are interested in this story, I recommend a column 280 00:14:56,360 --> 00:15:00,640 Speaker 1: yesterday on the Bloomberg Terminal by Matt Levine Um and 281 00:15:00,680 --> 00:15:03,800 Speaker 1: it's Matt Levine's money stuff, which I read every day 282 00:15:03,840 --> 00:15:06,240 Speaker 1: because they're always awesome. And then he's been following this 283 00:15:06,520 --> 00:15:08,760 Speaker 1: situation very closely, and you can get that at Bloomberg 284 00:15:08,800 --> 00:15:12,200 Speaker 1: dot com, slash opinion or ni O P I R 285 00:15:12,280 --> 00:15:15,480 Speaker 1: O P I n go on the terminal. It's really 286 00:15:15,560 --> 00:15:17,000 Speaker 1: a good take on it. And by the way, he 287 00:15:17,040 --> 00:15:19,000 Speaker 1: doesn't and he was an m and a lawert Walktell 288 00:15:19,280 --> 00:15:21,680 Speaker 1: so he knows this kind of stuff cold and he 289 00:15:21,720 --> 00:15:25,000 Speaker 1: says it ain't gonna happen for Mr Musk. Here all right, Dan, 290 00:15:25,120 --> 00:15:28,960 Speaker 1: more importantly, you know, if I'm a Twitter shareholder and 291 00:15:29,000 --> 00:15:31,320 Speaker 1: you're as close to this story as any from a 292 00:15:31,320 --> 00:15:36,280 Speaker 1: Wall Street perspective, what's your call on Tesla right here? 293 00:15:36,600 --> 00:15:41,880 Speaker 1: Does this noise around Twitter affect your call or maybe 294 00:15:41,880 --> 00:15:46,400 Speaker 1: what some investors feel about this Tesla story. Yeah, I 295 00:15:46,440 --> 00:15:51,120 Speaker 1: think it's started to be decoupled from the Tesla stock 296 00:15:51,840 --> 00:15:57,480 Speaker 1: because of the situation where Musk has changed his moon 297 00:15:58,120 --> 00:16:00,920 Speaker 1: and he's already sold stock, and that's been a clear 298 00:16:01,040 --> 00:16:05,040 Speaker 1: overhang on Tessa stock. Now that said, it's been a 299 00:16:05,080 --> 00:16:08,720 Speaker 1: black eye from Musk and is a Tessa holder, you 300 00:16:08,840 --> 00:16:12,480 Speaker 1: just want this to end, this nightmare soap opera, because 301 00:16:12,520 --> 00:16:15,160 Speaker 1: in a risk off market, the last thing you need, 302 00:16:15,600 --> 00:16:18,320 Speaker 1: it's just another reason to sell Tesla. Does he keep 303 00:16:18,360 --> 00:16:21,160 Speaker 1: selling his shares? I mean, he says it seems like 304 00:16:21,160 --> 00:16:23,240 Speaker 1: he says every time he sells him that that's it, 305 00:16:23,320 --> 00:16:25,200 Speaker 1: that's the last time. But is he going to keep 306 00:16:25,400 --> 00:16:29,000 Speaker 1: reducing his steak? Well, guys have now he says it's done. 307 00:16:29,000 --> 00:16:31,000 Speaker 1: But as you said, it's the boy that cried wolf 308 00:16:31,080 --> 00:16:36,440 Speaker 1: and that continues to be a frustration for Testa investors, 309 00:16:36,480 --> 00:16:40,800 Speaker 1: although ultimately for Tessa it's fundamentally that that I think 310 00:16:40,800 --> 00:16:43,680 Speaker 1: what ultimately drives the stock higher, and I think it's 311 00:16:43,720 --> 00:16:45,960 Speaker 1: all about China, and I think that's sort of over 312 00:16:46,240 --> 00:16:49,880 Speaker 1: rude some of the i'll say dark clouds caused by 313 00:16:49,920 --> 00:16:53,360 Speaker 1: the Twitter situation. Finally, Tesla just achieved a new lap 314 00:16:53,400 --> 00:16:58,280 Speaker 1: record at Seabring. They continually break records in terms of 315 00:16:59,040 --> 00:17:02,720 Speaker 1: um the speed and for formants and distance um that 316 00:17:02,840 --> 00:17:05,760 Speaker 1: electric cars can achieve. This is something that no one 317 00:17:05,800 --> 00:17:10,760 Speaker 1: can dispute. Elon Musk continues to defy. UM. The big 318 00:17:10,800 --> 00:17:15,760 Speaker 1: incumbent automakers, Uh, you would expect Folkswagen or GM and 319 00:17:15,800 --> 00:17:19,560 Speaker 1: Ford to be able to use their resources, knowledge of 320 00:17:19,600 --> 00:17:24,359 Speaker 1: production and uh you know, giant market position too to 321 00:17:24,560 --> 00:17:27,760 Speaker 1: beat Tesla. But they can't do it so far. What 322 00:17:27,960 --> 00:17:30,439 Speaker 1: is it Dan that makes UM? What what is it 323 00:17:30,480 --> 00:17:35,560 Speaker 1: that allows Tesla, you know, battery vehicles UM to drive 324 00:17:35,640 --> 00:17:39,040 Speaker 1: further and faster and in some sense it's better than 325 00:17:39,080 --> 00:17:42,520 Speaker 1: anyone else. Yeah. Look, it's a great point, and that's 326 00:17:42,560 --> 00:17:46,920 Speaker 1: really why Tesla has really dominated the EV industry. It's 327 00:17:46,920 --> 00:17:50,919 Speaker 1: not just battery technology, but I think in terms of 328 00:17:50,920 --> 00:17:54,160 Speaker 1: what they've built at Fremont, at Giga, and they continue 329 00:17:54,160 --> 00:17:57,040 Speaker 1: replicates the scale because they're able to do it from 330 00:17:57,040 --> 00:18:01,000 Speaker 1: a scale perspective, and as well as the battery apology 331 00:18:01,160 --> 00:18:04,879 Speaker 1: that's been the combo that's to needle them despite all competitions, 332 00:18:04,920 --> 00:18:09,840 Speaker 1: despite all the sort of the skeptics, to continue now 333 00:18:09,880 --> 00:18:12,119 Speaker 1: to be on a trajectory next year, to be on 334 00:18:12,280 --> 00:18:15,880 Speaker 1: two million vehicles. It's so crazy because I get into 335 00:18:15,880 --> 00:18:20,280 Speaker 1: like an Audi Etron right, and it's luxurious, and it's 336 00:18:20,400 --> 00:18:24,159 Speaker 1: also familiar because it's very Audi like, and then UM 337 00:18:24,200 --> 00:18:27,800 Speaker 1: on the Autobahn when I'm running at a battery power 338 00:18:27,880 --> 00:18:30,080 Speaker 1: at a you know, a hundred and fifty miles in, 339 00:18:30,200 --> 00:18:32,040 Speaker 1: I'm thinking, Man, I wish I was in a Tesla 340 00:18:32,160 --> 00:18:35,000 Speaker 1: right now, And I don't know how they can come 341 00:18:35,000 --> 00:18:37,680 Speaker 1: out with the vehicle that doesn't outperform a Tesla. I 342 00:18:37,680 --> 00:18:40,479 Speaker 1: mean they're autie. I know it's well, that's the tesla 343 00:18:40,840 --> 00:18:42,840 Speaker 1: gig there. Hey, Dan, most of our listeners know that 344 00:18:42,880 --> 00:18:45,240 Speaker 1: you cover some of the big big names after the Apples, 345 00:18:45,240 --> 00:18:48,360 Speaker 1: the Microsoft's of the world. Given the altility that we've 346 00:18:48,359 --> 00:18:51,040 Speaker 1: seen so far here in two what's your top call 347 00:18:51,280 --> 00:18:56,040 Speaker 1: right now or top call is Apple? But because of 348 00:18:56,119 --> 00:18:59,600 Speaker 1: the aphone fourteen upgrade cycle and our checks in the 349 00:18:59,600 --> 00:19:03,679 Speaker 1: easier continues show firm demand even in the macro that 350 00:19:03,720 --> 00:19:07,880 Speaker 1: we're seeing. I think it's an underestimated cycle, and that's 351 00:19:07,880 --> 00:19:10,560 Speaker 1: why this is a stock that I believe powers through 352 00:19:10,600 --> 00:19:14,200 Speaker 1: the storm and that continues to be our favorite in 353 00:19:14,320 --> 00:19:17,480 Speaker 1: terms of overall tech file by Microsoft. And what are 354 00:19:17,520 --> 00:19:19,760 Speaker 1: you hearing on your channel checks? And again for those 355 00:19:19,800 --> 00:19:21,920 Speaker 1: listening a lot of these a lot of animals, top 356 00:19:21,920 --> 00:19:24,879 Speaker 1: animals like Dan, they really call all the suppliers and 357 00:19:24,920 --> 00:19:26,720 Speaker 1: get a sense of what's going on out there in 358 00:19:26,760 --> 00:19:30,080 Speaker 1: the supply chain. What are you hearing? Well, at this point, 359 00:19:30,600 --> 00:19:34,359 Speaker 1: it's been firm in terms of ninety million orders four 360 00:19:34,400 --> 00:19:38,119 Speaker 1: iPhone fourteen and that's in line with iPhone thirteen. You know, 361 00:19:38,160 --> 00:19:41,160 Speaker 1: if there's when when you look at Tim Cook and Apple, 362 00:19:41,200 --> 00:19:43,080 Speaker 1: they've been able to sort of nail that from the 363 00:19:43,160 --> 00:19:47,560 Speaker 1: demand perspective. If that trajectory continues to play through the 364 00:19:47,560 --> 00:19:50,720 Speaker 1: streets actually gonna have to raise numbers on iPhone fourteen 365 00:19:50,920 --> 00:19:55,240 Speaker 1: rather than decline. And that's something that's obviously counterintuitive relative 366 00:19:55,320 --> 00:19:58,680 Speaker 1: to the macro speaks of that golden install based of 367 00:19:58,720 --> 00:20:02,080 Speaker 1: a Cupertino good stuff. As always, Dan i'ves he's a 368 00:20:02,119 --> 00:20:06,240 Speaker 1: managing director senior equity analyst for web Bush Securities. Talking 369 00:20:06,240 --> 00:20:08,720 Speaker 1: a little testa talk, a little Twitter. Uh. It is 370 00:20:08,760 --> 00:20:10,720 Speaker 1: a never ending saga there. But we also wanted to 371 00:20:10,720 --> 00:20:17,400 Speaker 1: get Apple his top his top call, which is Apple Boy. 372 00:20:17,400 --> 00:20:20,200 Speaker 1: Those are just amazing how strong the housing market held 373 00:20:20,280 --> 00:20:23,600 Speaker 1: up during the pandemic, the beginning, the middle of the end, 374 00:20:23,640 --> 00:20:25,359 Speaker 1: and now we're starting to see see some signs that 375 00:20:25,400 --> 00:20:28,399 Speaker 1: maybe the residential real estate market is rolling over. To 376 00:20:28,480 --> 00:20:32,240 Speaker 1: get the latest, we welcome Brad Dillman, chief economist for Courtland. 377 00:20:32,520 --> 00:20:34,480 Speaker 1: Brad love to get your thoughts. We've had the case 378 00:20:34,480 --> 00:20:37,200 Speaker 1: Shiller's data come out this morning. We had some housing 379 00:20:37,200 --> 00:20:41,400 Speaker 1: start data last week. Are rising interest rates, rising mortgage rates. 380 00:20:41,440 --> 00:20:43,159 Speaker 1: They're taking a toll on the real estate market. How 381 00:20:43,160 --> 00:20:48,320 Speaker 1: do you see this playing out? Finally? Uh, you know, 382 00:20:48,359 --> 00:20:50,880 Speaker 1: seeing this impact from higher rates. You know, we did 383 00:20:50,920 --> 00:20:54,040 Speaker 1: have sort of a false peak in home price appreciation 384 00:20:54,080 --> 00:20:56,040 Speaker 1: about a year ago, only to see a really strong 385 00:20:56,119 --> 00:20:59,359 Speaker 1: spring this year. Um, really shows you, I think, really 386 00:20:59,359 --> 00:21:02,399 Speaker 1: the effects of the underbuilt environment and then just how 387 00:21:02,400 --> 00:21:06,760 Speaker 1: accommodative rates were in the past. So what do we 388 00:21:06,840 --> 00:21:10,040 Speaker 1: expect now? I mean I've heard um Marx Andy for 389 00:21:10,119 --> 00:21:13,240 Speaker 1: Moody's said that in some local markets prices could fall 390 00:21:14,280 --> 00:21:18,600 Speaker 1: redfin Um recently said that new HomeBuyer purchase agreements are 391 00:21:18,720 --> 00:21:22,560 Speaker 1: rapidly falling. Black Night reported the first monthly national declines 392 00:21:22,600 --> 00:21:24,679 Speaker 1: in home prices. What are we what are you setting 393 00:21:24,760 --> 00:21:27,080 Speaker 1: up for? Well? I mean, you know, if you look 394 00:21:27,119 --> 00:21:29,240 Speaker 1: at homes home prices of me, they're still up called 395 00:21:29,440 --> 00:21:31,600 Speaker 1: eighteen percent year over year. Right, they may have fallen 396 00:21:31,640 --> 00:21:34,080 Speaker 1: slightly month to month, we may see them come down 397 00:21:34,080 --> 00:21:36,840 Speaker 1: a bit and and and frankly we should. Um. In 398 00:21:36,880 --> 00:21:38,840 Speaker 1: my view, the cracks in the housing market are not 399 00:21:38,920 --> 00:21:41,399 Speaker 1: so much of a rationalization from where we are today, 400 00:21:41,400 --> 00:21:43,840 Speaker 1: but really just thee out of control home price appreciation 401 00:21:44,359 --> 00:21:47,199 Speaker 1: that we had seen. I think there's certainly the possibility 402 00:21:47,240 --> 00:21:50,040 Speaker 1: that we could see some markets become very illiquid to 403 00:21:50,119 --> 00:21:53,320 Speaker 1: the degree that they had really been dependent on in migration, 404 00:21:53,440 --> 00:21:56,000 Speaker 1: that movement of incomes and savings from other parts of 405 00:21:56,000 --> 00:21:58,680 Speaker 1: the country and really dependent on on use of leverage. 406 00:21:58,720 --> 00:22:01,680 Speaker 1: Just to say, the low mortgage rates had prevailed, so 407 00:22:02,280 --> 00:22:04,280 Speaker 1: you know, unless you know, you didn't have individuals who 408 00:22:04,320 --> 00:22:06,200 Speaker 1: may have gotten over their skis. But I don't think 409 00:22:06,240 --> 00:22:08,800 Speaker 1: we're on deck for the kind of mass job losses 410 00:22:08,840 --> 00:22:12,679 Speaker 1: that would result in systemic home price declins. Brad, you 411 00:22:12,680 --> 00:22:15,600 Speaker 1: mentioned a topic that I've always find interesting, which is 412 00:22:16,119 --> 00:22:20,399 Speaker 1: the housing shortage here. So when I read the you know, 413 00:22:20,440 --> 00:22:23,280 Speaker 1: the quarter of the results of the publicly traded home builders, 414 00:22:23,480 --> 00:22:26,240 Speaker 1: you know they're they're building the McMansions because that's where 415 00:22:26,760 --> 00:22:31,080 Speaker 1: the margin is, but that's not necessarily where the demand 416 00:22:31,240 --> 00:22:33,760 Speaker 1: or need is in some of the entry level housing. 417 00:22:33,800 --> 00:22:36,840 Speaker 1: How do you square those two issues and deal with 418 00:22:36,840 --> 00:22:40,800 Speaker 1: this American home shortage? Yeah, I mean, so we've had artificial, 419 00:22:40,880 --> 00:22:44,440 Speaker 1: artificially low long term interest rates really during the pandemic. 420 00:22:44,440 --> 00:22:46,800 Speaker 1: We've also gone through about of this in twelve, which 421 00:22:46,800 --> 00:22:49,760 Speaker 1: had really created the underbuilt situation that we had going 422 00:22:49,800 --> 00:22:52,880 Speaker 1: into the pandemic. Um So when you have really high 423 00:22:52,960 --> 00:22:56,040 Speaker 1: prices like that, and you've canna only really deliver supply 424 00:22:56,160 --> 00:22:58,880 Speaker 1: on the margin. That's the sweet spot the builders got 425 00:22:58,880 --> 00:23:01,399 Speaker 1: a target now for currently, we have seen some movement 426 00:23:01,400 --> 00:23:03,639 Speaker 1: in this over the last few years. The degree to 427 00:23:03,680 --> 00:23:06,040 Speaker 1: which long term rates were low and carrying mortgage rates 428 00:23:06,080 --> 00:23:09,159 Speaker 1: with them, saw such significant home price appreciation that we 429 00:23:09,200 --> 00:23:11,560 Speaker 1: did see just a lot of single family housing starts. 430 00:23:12,080 --> 00:23:14,000 Speaker 1: And so what we're under built by my estimate of 431 00:23:14,040 --> 00:23:16,960 Speaker 1: about one million housing units nationally, and that's housing units 432 00:23:16,960 --> 00:23:19,440 Speaker 1: of any time. We do have one point six eight 433 00:23:19,480 --> 00:23:22,960 Speaker 1: million housing units under construction. So in many ways, we're 434 00:23:23,080 --> 00:23:26,280 Speaker 1: very quickly writing this housing market to the degree that 435 00:23:26,280 --> 00:23:29,119 Speaker 1: we're underbuilt. One flying the ointment in that is just 436 00:23:29,400 --> 00:23:32,800 Speaker 1: what's really happening with with immigration, both legal and illegal. 437 00:23:33,000 --> 00:23:35,320 Speaker 1: We're gonna need to see those new population figures to 438 00:23:35,400 --> 00:23:38,919 Speaker 1: know have we been building enough housing or not. In 439 00:23:39,040 --> 00:23:44,879 Speaker 1: terms of UM Courtland, what you're doing at Courtland, UM, 440 00:23:45,080 --> 00:23:48,679 Speaker 1: you have thousands and thousands of homes, you you do 441 00:23:48,760 --> 00:23:53,359 Speaker 1: multifamily housing investment, You have hundreds of apartment communities all 442 00:23:53,440 --> 00:23:58,720 Speaker 1: around the US. UM, are you seeing price appreciation there? 443 00:23:58,760 --> 00:24:03,400 Speaker 1: Are you? Are you seeing rental units doing well? Yeah? 444 00:24:03,440 --> 00:24:06,639 Speaker 1: I mean the rental markets done fantastic coming out of 445 00:24:06,640 --> 00:24:10,000 Speaker 1: the pandemic. You've got near twenty year highs and occupancy 446 00:24:10,080 --> 00:24:12,000 Speaker 1: rates and multi family in general, they're starting to come 447 00:24:12,000 --> 00:24:14,320 Speaker 1: down a little bit because there's been double digit rent 448 00:24:14,359 --> 00:24:16,720 Speaker 1: growth in some parts of the country like Flora. This 449 00:24:16,800 --> 00:24:20,240 Speaker 1: is hit highs in some markets of about which is 450 00:24:20,240 --> 00:24:23,280 Speaker 1: a very significant real cost of living increase. So multi 451 00:24:23,359 --> 00:24:25,200 Speaker 1: family has done incredibly well. We can actually see this 452 00:24:25,240 --> 00:24:27,879 Speaker 1: reflected in the starts data. So while mortgage rates have 453 00:24:27,960 --> 00:24:30,679 Speaker 1: gone up, you know, single family starts have now fallen 454 00:24:30,720 --> 00:24:32,919 Speaker 1: back to pre COVID levels, But if you look at 455 00:24:33,000 --> 00:24:35,720 Speaker 1: starts for structures with five units or more, they're really 456 00:24:35,720 --> 00:24:38,119 Speaker 1: flirting with thirty five year highs. And so I think 457 00:24:38,160 --> 00:24:40,440 Speaker 1: we can see this in the appealable density and also 458 00:24:40,680 --> 00:24:44,919 Speaker 1: over renting. You know, Brandon, during the early days of 459 00:24:44,960 --> 00:24:47,840 Speaker 1: the pandemic, we had you know, urban dwellers kind of 460 00:24:48,000 --> 00:24:50,640 Speaker 1: flee from the cities and I guess, you know, head 461 00:24:50,680 --> 00:24:54,480 Speaker 1: to Florida, head to Austin, Texas, head to Nashville. Is 462 00:24:54,520 --> 00:24:57,399 Speaker 1: the perception in your industry that that's kind of a 463 00:24:57,400 --> 00:24:59,399 Speaker 1: permanent shift or we are we seeing any data that 464 00:24:59,440 --> 00:25:03,600 Speaker 1: says and maybe they're coming back. Well, we have seen 465 00:25:03,760 --> 00:25:07,880 Speaker 1: a fairly strong urban core ran growth recovery. Uh. And 466 00:25:08,119 --> 00:25:10,480 Speaker 1: we've also seen really because of this real cost of 467 00:25:10,520 --> 00:25:14,280 Speaker 1: living increase in air swile affordable areas that in some 468 00:25:14,359 --> 00:25:17,120 Speaker 1: respects urban core sub markets are actually becoming more attractive 469 00:25:17,160 --> 00:25:20,280 Speaker 1: for the consumer. Again, when you square this with with 470 00:25:20,400 --> 00:25:22,440 Speaker 1: energy prices as well, namely, like you know, the cost 471 00:25:22,480 --> 00:25:24,439 Speaker 1: of gasoline and the and the potential that may go 472 00:25:24,520 --> 00:25:27,880 Speaker 1: back up again, urban core more walkable living, this kind 473 00:25:27,880 --> 00:25:30,399 Speaker 1: of thing becomes a little bit more appealing. There's there's 474 00:25:30,440 --> 00:25:33,360 Speaker 1: still a lot of money out there for investments, um, 475 00:25:33,400 --> 00:25:34,919 Speaker 1: and not a lot of places to put it right now. 476 00:25:35,000 --> 00:25:40,080 Speaker 1: Are you seeing institutions get into uh real estate? Oh? Yeah, 477 00:25:40,119 --> 00:25:42,280 Speaker 1: I mean there's certainly been a stronger level. I mean, 478 00:25:42,359 --> 00:25:45,960 Speaker 1: I mean, you know, at a more rapid pace. Yeah, 479 00:25:45,960 --> 00:25:49,040 Speaker 1: I mean there's uh, there's macro trends at play as well. 480 00:25:49,040 --> 00:25:50,960 Speaker 1: What I can tell you is that there's been interest 481 00:25:51,000 --> 00:25:53,600 Speaker 1: from abroad as the dollar has been relatively strong compared 482 00:25:53,640 --> 00:25:57,800 Speaker 1: to other currencies. Who we're seeing foreign institutions move into 483 00:25:58,359 --> 00:26:01,520 Speaker 1: the you know, the multi family space. UM. We're also seeing, 484 00:26:01,560 --> 00:26:04,600 Speaker 1: of course, uh, continued activity in a single family rental 485 00:26:04,680 --> 00:26:06,480 Speaker 1: space as well, all right, Brad, thanks so much for 486 00:26:06,560 --> 00:26:09,560 Speaker 1: joining us. Always appreciate getting your perspective. Brad Dilman, chief 487 00:26:09,560 --> 00:26:14,800 Speaker 1: economists for Cortland talking about the real estate business, maybe peaking. 488 00:26:18,600 --> 00:26:21,480 Speaker 1: We really have a discussion about the global jewelry business, 489 00:26:21,480 --> 00:26:24,359 Speaker 1: and we can do that. There's nobody better than Alexander Laser, 490 00:26:24,560 --> 00:26:29,280 Speaker 1: CEO of Pandora Group. Alexander, thanks so much for joining us. Boy, 491 00:26:29,320 --> 00:26:32,040 Speaker 1: I'd love to just get your thirty thou foot view 492 00:26:32,320 --> 00:26:35,440 Speaker 1: of the global jewelry business. Kind of take us some 493 00:26:36,359 --> 00:26:40,800 Speaker 1: nineteen until here we are today. Yeah, so we could 494 00:26:40,800 --> 00:26:44,600 Speaker 1: go even further back. The category globally has grown a 495 00:26:44,640 --> 00:26:47,080 Speaker 1: little bit ahead of GDP for the last ten years, 496 00:26:47,119 --> 00:26:49,879 Speaker 1: let's say, up until the pandemic hit. And then the 497 00:26:50,000 --> 00:26:52,520 Speaker 1: interesting thing happened, of course, when people were locked up 498 00:26:52,560 --> 00:26:55,800 Speaker 1: at home or or couldn't go out to kind of 499 00:26:56,280 --> 00:26:59,280 Speaker 1: go to restaurants, etceter. It seemed like the category kind 500 00:26:59,280 --> 00:27:02,600 Speaker 1: of got a nice little boost um. And then, of 501 00:27:02,640 --> 00:27:06,400 Speaker 1: course last year the US government decided to issue those 502 00:27:06,440 --> 00:27:10,560 Speaker 1: stimulus checks, which made the in particularly the US category 503 00:27:10,640 --> 00:27:15,119 Speaker 1: grow by a whopping, which, of course all the players 504 00:27:15,160 --> 00:27:19,600 Speaker 1: took advantage of coming into this year. Then naturally that 505 00:27:19,600 --> 00:27:22,720 Speaker 1: that kind of growth is nowhere to be found because 506 00:27:22,720 --> 00:27:25,680 Speaker 1: the similar checks are gone. So what we're facing now 507 00:27:25,680 --> 00:27:27,439 Speaker 1: in the U S Is a is a contraction of 508 00:27:27,480 --> 00:27:29,760 Speaker 1: the category. But still, if I look, for instance, on 509 00:27:29,760 --> 00:27:32,800 Speaker 1: my business in the second quarter of the year, it's 510 00:27:32,880 --> 00:27:36,040 Speaker 1: down twelve percent versus the prior year, but it's up 511 00:27:36,200 --> 00:27:40,879 Speaker 1: almost six versus So it's some kind of strange dynamics 512 00:27:40,920 --> 00:27:43,919 Speaker 1: going on. But overall, I would say that the globally speaking, 513 00:27:43,960 --> 00:27:47,760 Speaker 1: the category is in a good place. What about Europe, 514 00:27:47,800 --> 00:27:51,000 Speaker 1: I mean, Um, I've just moved back to the States 515 00:27:51,040 --> 00:27:54,480 Speaker 1: from Berlin. Um spent five or six years over there, 516 00:27:54,640 --> 00:27:58,280 Speaker 1: and of course Pandora is a household name. Um in 517 00:27:58,320 --> 00:28:02,359 Speaker 1: Europe in terms of the jewelry business, how hard are 518 00:28:02,400 --> 00:28:06,399 Speaker 1: you getting hit by higher energy prices that are just 519 00:28:07,040 --> 00:28:12,920 Speaker 1: draining consumer wallets? Mm hmm. So the first half of 520 00:28:12,960 --> 00:28:16,040 Speaker 1: this year, we look at things like traffic, you know, 521 00:28:16,119 --> 00:28:22,359 Speaker 1: conversion rates, basket size average, you know, price for transaction, etcetera, etcetera. 522 00:28:22,640 --> 00:28:27,280 Speaker 1: All those retail metrics are intact intact across Europe, and 523 00:28:27,560 --> 00:28:31,800 Speaker 1: Europe is actually up double digits in the second quarter 524 00:28:31,840 --> 00:28:34,320 Speaker 1: of this year. And now again we need to bear 525 00:28:34,359 --> 00:28:35,920 Speaker 1: in mind at the prior year we had a fair 526 00:28:35,960 --> 00:28:38,560 Speaker 1: amount of stores closed due to the restrictions of COVID. 527 00:28:38,600 --> 00:28:41,560 Speaker 1: But if you then back it up versus nineteen, which 528 00:28:41,600 --> 00:28:44,120 Speaker 1: is kind of the last let's call it clean base 529 00:28:44,160 --> 00:28:47,280 Speaker 1: here from a place from a financial standpoint, then we're 530 00:28:47,440 --> 00:28:51,000 Speaker 1: up in double digit across European continent. So again pandora 531 00:28:51,120 --> 00:28:54,320 Speaker 1: is actually varying really well in the in this situation, 532 00:28:54,440 --> 00:28:57,960 Speaker 1: so it's important. I just flew, for example, from Valencia 533 00:28:58,000 --> 00:29:00,280 Speaker 1: to Frankfurt and Loftanza. You still have to wear mask 534 00:29:00,360 --> 00:29:02,520 Speaker 1: on the flight hold time. So Europe is still in 535 00:29:02,560 --> 00:29:05,200 Speaker 1: a way kind of emerging from the pandemic. Here in 536 00:29:05,200 --> 00:29:09,360 Speaker 1: the US, of course we are fully out um and 537 00:29:09,400 --> 00:29:13,520 Speaker 1: in Asia you've still got certainly in China zero COVID policy. 538 00:29:13,640 --> 00:29:18,080 Speaker 1: Is that the most difficult market by far, I mean 539 00:29:18,440 --> 00:29:22,320 Speaker 1: the Chinese market is as you say, they run the 540 00:29:22,440 --> 00:29:25,920 Speaker 1: zero tolerance policy, which makes it incredibly difficult to to 541 00:29:25,920 --> 00:29:27,880 Speaker 1: operate a business there because from one day to the 542 00:29:27,920 --> 00:29:30,360 Speaker 1: other day can shut the city like Shanghai twenty five 543 00:29:30,400 --> 00:29:33,880 Speaker 1: million people. Uh, and you have no full warning. So 544 00:29:34,560 --> 00:29:36,600 Speaker 1: trading in China right now is I think it's a 545 00:29:36,680 --> 00:29:39,440 Speaker 1: challenged for not just for respect for anybody that that 546 00:29:39,560 --> 00:29:43,040 Speaker 1: runs an operation out there. Alexander, give us the latest 547 00:29:43,120 --> 00:29:46,800 Speaker 1: on the supply chain. How is that it's been a 548 00:29:46,920 --> 00:29:49,240 Speaker 1: challenge for you. How have you overcome it? What's the 549 00:29:49,280 --> 00:29:53,600 Speaker 1: current state of your supply chain? Well? And if I 550 00:29:53,640 --> 00:29:56,040 Speaker 1: remember well when the first news came back and was 551 00:29:56,080 --> 00:29:59,960 Speaker 1: a late nineteen early twenty of this kind of issue 552 00:30:00,000 --> 00:30:04,360 Speaker 1: in Bjuhan, my first thought went to to our manufacturing 553 00:30:04,360 --> 00:30:08,280 Speaker 1: sites were vertically integrated, so we we produced everything in Thailand, 554 00:30:08,800 --> 00:30:10,960 Speaker 1: and and Thailand in particular bank Whip is a very 555 00:30:10,960 --> 00:30:14,880 Speaker 1: popular tourist destination for Chinese. So I feared that you know, 556 00:30:15,240 --> 00:30:18,400 Speaker 1: um that that we would have issues without supply chain 557 00:30:18,480 --> 00:30:22,200 Speaker 1: coming out of Thailand. So we immediately introduced on our 558 00:30:22,280 --> 00:30:28,040 Speaker 1: own strict strict rules and how we behave UM and 559 00:30:28,040 --> 00:30:31,800 Speaker 1: and and also actually hired another two thousand people to 560 00:30:32,040 --> 00:30:35,080 Speaker 1: ramp up our in mentory position just in case that 561 00:30:35,080 --> 00:30:37,840 Speaker 1: that something would happen there were at that time, everything 562 00:30:37,920 --> 00:30:40,200 Speaker 1: was unknown to all of us. Because now we've learned 563 00:30:40,280 --> 00:30:43,719 Speaker 1: somehow to to maneuver that. So we've carried a higher 564 00:30:43,720 --> 00:30:46,520 Speaker 1: in mentory position throughout the whole pandemic, including up to 565 00:30:46,640 --> 00:30:49,920 Speaker 1: now uh And that's kind of how we have stayed 566 00:30:50,320 --> 00:30:53,280 Speaker 1: in stock, so I have zero issues. In fact, my 567 00:30:53,360 --> 00:30:55,920 Speaker 1: service levels are probably the best they've ever been in 568 00:30:56,000 --> 00:30:59,320 Speaker 1: Pandora's good for you, guys. It seems like that early 569 00:30:59,360 --> 00:31:02,880 Speaker 1: action work for you. Talk to us about kind of 570 00:31:02,920 --> 00:31:08,160 Speaker 1: your storefront business versus your e commerce business, how the 571 00:31:08,200 --> 00:31:10,760 Speaker 1: trends there have changed over the last few years, maybe 572 00:31:10,760 --> 00:31:16,000 Speaker 1: where you're you know, invest investing going forward. Yeah, so, 573 00:31:16,320 --> 00:31:19,000 Speaker 1: uh so, when I joined Pandora in some three and 574 00:31:19,080 --> 00:31:21,640 Speaker 1: three and a half years ago, e commerce was not 575 00:31:21,840 --> 00:31:23,800 Speaker 1: like something that the company has spent an awful lot 576 00:31:23,800 --> 00:31:27,000 Speaker 1: of energy against which clearly I had a different point 577 00:31:27,000 --> 00:31:29,040 Speaker 1: of view on. So we we started. That was one 578 00:31:29,080 --> 00:31:31,000 Speaker 1: of the first things we started, kind of making sure 579 00:31:31,000 --> 00:31:33,360 Speaker 1: that our platforms were a bit in better shape, the 580 00:31:33,400 --> 00:31:36,120 Speaker 1: consumer experience was in better shape. And then actually we 581 00:31:36,200 --> 00:31:40,240 Speaker 1: turned this into more of a full price uh sale 582 00:31:40,560 --> 00:31:44,360 Speaker 1: environment rather than the historic way of using this as 583 00:31:44,400 --> 00:31:47,080 Speaker 1: an outlet. Somehow, at the end of the day, I 584 00:31:47,120 --> 00:31:49,840 Speaker 1: get ten times as much traffic coming to my website 585 00:31:49,880 --> 00:31:53,000 Speaker 1: and then my physical store networks that this needs to 586 00:31:53,040 --> 00:31:55,800 Speaker 1: be kind of the best, the best best version of 587 00:31:55,800 --> 00:31:59,280 Speaker 1: Pandora need to be online in a way, at least visually. 588 00:31:59,520 --> 00:32:02,120 Speaker 1: So so reput a lot of effort against that. Then 589 00:32:02,120 --> 00:32:05,560 Speaker 1: of course the pandemic struck and we found ourselves in 590 00:32:05,600 --> 00:32:09,560 Speaker 1: April what it is now with ninety I think of 591 00:32:09,560 --> 00:32:13,440 Speaker 1: our physical network was shut. I lost that year. I 592 00:32:13,480 --> 00:32:16,960 Speaker 1: only lost ten percent of my business because I have 593 00:32:17,240 --> 00:32:21,200 Speaker 1: huge migration coming into the e commerce site. So now 594 00:32:21,840 --> 00:32:24,360 Speaker 1: you know, so even in UK, I remember when this 595 00:32:24,440 --> 00:32:27,040 Speaker 1: must have been back in April of twenty, I was 596 00:32:27,080 --> 00:32:30,760 Speaker 1: actually growing with my entire physical network down. My business 597 00:32:30,800 --> 00:32:35,040 Speaker 1: actually growing year or year purely through eCOM. Now then 598 00:32:35,040 --> 00:32:37,800 Speaker 1: everybody said, oh, this is the end of retail and 599 00:32:37,840 --> 00:32:40,960 Speaker 1: everything is going to go online, is very far from 600 00:32:41,000 --> 00:32:45,000 Speaker 1: the truth. When when stores reopened, people come straight back 601 00:32:45,040 --> 00:32:47,400 Speaker 1: into the stores. So I think, what you know, looking 602 00:32:47,400 --> 00:32:50,200 Speaker 1: at it today, there is a systemic shift we have 603 00:32:50,360 --> 00:32:53,400 Speaker 1: roughly you know, it's twice as big as a share 604 00:32:53,400 --> 00:32:56,360 Speaker 1: of my business is online. That people love coming into 605 00:32:56,400 --> 00:32:59,200 Speaker 1: the stores. As I jokingly say, there's a lot of 606 00:32:59,200 --> 00:33:04,360 Speaker 1: our customers on and actually six of our customers on. Men, 607 00:33:04,840 --> 00:33:10,880 Speaker 1: these poor souls need help our stores. I can say 608 00:33:10,920 --> 00:33:13,200 Speaker 1: that being a man, so that it gets offended, but 609 00:33:13,320 --> 00:33:15,400 Speaker 1: this is true. They love coming in through our stores 610 00:33:15,440 --> 00:33:19,000 Speaker 1: and they'll still find a way to get offended, believe 611 00:33:19,040 --> 00:33:22,760 Speaker 1: you me. But I think it's uh fascinating, absolutely fascinating 612 00:33:22,760 --> 00:33:27,320 Speaker 1: and of course a really interesting uh business model to 613 00:33:27,400 --> 00:33:30,680 Speaker 1: watch as we went into lockdown came out of lockdown. 614 00:33:30,680 --> 00:33:34,720 Speaker 1: I think Pandora is really a um uh really one 615 00:33:34,720 --> 00:33:36,960 Speaker 1: of one of the one of the most interesting businesses 616 00:33:37,240 --> 00:33:40,320 Speaker 1: because of your connection to travel, because of your connection 617 00:33:40,400 --> 00:33:45,000 Speaker 1: to excess cash, and because of you know, jewelries and 618 00:33:45,320 --> 00:33:48,000 Speaker 1: supply chains and commodity is just such an interesting thing. Alexander, 619 00:33:48,040 --> 00:33:50,680 Speaker 1: thanks so much for joining us. Alexander Lasik, there, the 620 00:33:50,760 --> 00:33:56,880 Speaker 1: CEO of Pandora. Thanks for listening to the Bloomberg Markets podcast. 621 00:33:57,280 --> 00:33:59,880 Speaker 1: You can subscribe and listen to interviews with Apple pod 622 00:34:00,080 --> 00:34:04,080 Speaker 1: Casts or whatever podcast platform you prefer. I'm Matt Miller. 623 00:34:04,320 --> 00:34:08,200 Speaker 1: I'm on Twitter at Matt Miller three, and I Fall 624 00:34:08,239 --> 00:34:11,120 Speaker 1: Sweeney I'm on Twitter at pt Sweeney. Before the podcast, 625 00:34:11,160 --> 00:34:13,680 Speaker 1: you can always catch us worldwide at Bloomberg Radio.