Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: pm Eastern Time on Bloomberg Radio or watch us on
Speaker 1: YouTube search Bloomberg Global News. There's a lot of things
Speaker 1: going on, and in particular we are seeing Tim a
Speaker 1: lot of individuals institutions working with sectors and segments of
Speaker 1: the US to encourage vaccine participation. And our next guest
Speaker 1: definitely has some thoughts on that. Yeah. Red Buttle is
Speaker 1: the founder of Public Private Strategies, also senior Fellow at
Speaker 1: the Aspen Institute. Joining us on the phone from Washington,
Speaker 1: d C. Rehet Caroline, I talk a lot about how
Speaker 1: well when when it comes to COVID, We talk a
Speaker 1: lot about everything when it comes to code. But two
Speaker 1: things that I've been been focused on as the US
Speaker 1: vaccination effort has has done really well. One is how
Speaker 1: do we get you know, I keep referring it to
Speaker 1: it as like the last mile, right, how do we
Speaker 1: get those people vaccinated who aren't being proactive about making appointments?
Speaker 1: And then also what does it look like if we
Speaker 1: do have to get that booster shot And this is
Speaker 1: the type of thing that we have to do every
Speaker 1: single year to prevent little outbreaks of of the pandemic.
Speaker 1: So what is the right way for for companies to
Speaker 1: approach this, like is this the flu shot? Like we
Speaker 1: get at work now? Well, first of all, thank you
Speaker 1: so much for having me, and you write employers of
Speaker 1: all sizes have a role to play. You know, we've
Speaker 1: specifically launched network focused on small businesses. And what we
Speaker 1: know from research is that you know, as you're talking
Speaker 1: about vaccine, hesitant populations, messengers or everything, and so really
Speaker 1: you know, this is about meeting the consumer where it's at.
Speaker 1: In this case, it's about meeting each American where it's at.
Speaker 1: And we really think that employers and in particular small
Speaker 1: businesses have a role as a trusted institution and really
Speaker 1: encouraging people to get their COVID facting. Well, tell us
Speaker 1: specifically about this initiatives initiative that you got out of
Speaker 1: way right right, Excuse me to reimagine main Street initiative.
Speaker 1: What is it about? What are you looking to do
Speaker 1: and what is it that's holding small businesses, particularly those
Speaker 1: maybe of color of you know, minority small businesses that
Speaker 1: maybe are preventing workers from getting the vaccine. Is it
Speaker 1: that they don't want to or that it's just difficult
Speaker 1: for them to get the time to do it. Absolutely,
Speaker 1: So we launched this initiative about a year ago when
Speaker 1: COVID nineteen broke out to really make sure that small
Speaker 1: business owners and in particular business owners of color, were
Speaker 1: at the center of our recovery. And so we've been
Speaker 1: working on research and ultimaker advocacy, and now we've added
Speaker 1: a new leg to this campaign, which is really using
Speaker 1: small employers as a vehicle to get information out because
Speaker 1: small business owners are some of the most trusted institutions
Speaker 1: in our country. They rank number two according to Gallop
Speaker 1: and quite frankly, the people who work for them trust them.
Speaker 1: And as you talked about, you know, particularly in communities
Speaker 1: of color, a lot of folks are unsure about the vaccine.
Speaker 1: Some of that is because of deep racism in our country,
Speaker 1: and rightfully so, what we know just how important this
Speaker 1: vaccine is to not only our public health but getting
Speaker 1: our economy open again. And it's not uncommon. Right to
Speaker 1: see employers, We've seen employers do unique stuff around the
Speaker 1: food vaccine um in this case, you know, for this
Speaker 1: first time effort, it's really important because these main street
Speaker 1: businesses engaged in these communities, their workers turn to them,
Speaker 1: their communities, uh look and see you know what what
Speaker 1: small business owners have to say about issues, and so
Speaker 1: we think they have the search and so in addition
Speaker 1: to providing education tools and resources, we've launched out Vaccine
Speaker 1: Leaders Pledge program for business owners to sign up, and
Speaker 1: we've curtailed information and resources to small business owners who
Speaker 1: want to talk to their employees and their communities about
Speaker 1: why this is important to not only getting public health BacT,
Speaker 1: but quite frankly to getting our economy will reopen. I
Speaker 1: think it's one thing for for people to trust their
Speaker 1: employer and understand that the vaccine is the right thing
Speaker 1: to do, but it's an entirely different thing to get
Speaker 1: on their phone schedule that appointment at a time that
Speaker 1: they're not at work, and then also schedule that that
Speaker 1: follow up appointment as well. So how do you make
Speaker 1: it as easy as possible for somebody who hasn't able
Speaker 1: to get a vaccine yet to do it? Well, I
Speaker 1: think that's where we see you know, this is this
Speaker 1: role of the employer coming in and so we've seen
Speaker 1: it employers doing really neat things. There's an amazing hair
Speaker 1: salon and Ohio is working to actually what could their
Speaker 1: customers for vaccine apointments when they come into this blond
Speaker 1: That's one example of an above and beyond effort. But
Speaker 1: as an employer, it's also really important to be able
Speaker 1: to create that space for your employees to get educated,
Speaker 1: but also letting them know that maybe you're going to
Speaker 1: give them paid time off when they're going to get
Speaker 1: their vaccine and give them paid time off to re
Speaker 1: cover so they don't feel the pressure of necessarily having
Speaker 1: to this work and the burden that comes with that
Speaker 1: as an exper incentive to make sure that they get vaccinated. Hey, Red,
Speaker 1: how big of a problem do you think it is
Speaker 1: among this small business community in terms of their workers
Speaker 1: or their business owners not going out and getting the
Speaker 1: vaccine specifically, or is it more that you're just thinking
Speaker 1: about the communities around them. I think it's two reasons.
Speaker 1: You know, One is because of this trusted status that
Speaker 1: I'm talking about. You know, we're living in an interesting
Speaker 1: time where a lot of people don't don't necessarily trust media,
Speaker 1: they don't trust the government, but they do trust their employers.
Speaker 1: In particular, they trust small business, So we think they're important.
Speaker 1: But also half of Americans work for small business owners,
Speaker 1: and actually about a hundred million Americans financial lives in
Speaker 1: some cases depend on a small business. So they are
Speaker 1: a really important channel for getting information out and touching
Speaker 1: touching individuals. And so that's really why we've chosen this
Speaker 1: channel in particular as a way to get information out.
Speaker 1: How do you think about areas outside of the US.
Speaker 1: That was the other thing that Caroline I talked about
Speaker 1: all the time is how this the pandemic is is. Look,
Speaker 1: we didn't we have not done a great job in
Speaker 1: the United States overall, but when it comes to vaccinations,
Speaker 1: we are certainly leading the world right now. But it's
Speaker 1: not the same story in the vast majority of the world. Yeah,
Speaker 1: before I worked outside government, I actually had the publice
Speaker 1: of serving at the Department of Helping Human Services, and
Speaker 1: I did a lot of work on E Bowla And
Speaker 1: you know, early on, one of the reasons we responded
Speaker 1: so quickly to the E Bowla prominent applicised because we
Speaker 1: knew that our world is in our connected it right,
Speaker 1: and that is so important for especially business today. And so,
Speaker 1: you know, this is a global issue and you know
Speaker 1: why we're making great progress here in the United States.
Speaker 1: I'm encouraged by the Biden Administration's efforts to rejoin KOVAC,
Speaker 1: to rejoin the World Health Organization because this is really
Speaker 1: a global problem and it doesn't stop. You know, a
Speaker 1: virus like this, uh sees no boarders, no boundaries, right,
Speaker 1: and so we really have to think about a global approach.
Speaker 1: And so right now we're focused on you know, getting
Speaker 1: everyone vaccinated at home, and then at the same time,
Speaker 1: because we can walk and you know, to publicum, at
Speaker 1: the same time, we're working on building our credibility back
Speaker 1: across the world. Helped virus as well. Well. Listen, it's
Speaker 1: a reminder of small businesses. They play a crucial role
Speaker 1: in communities. That's where conversations happen and you do think about,
Speaker 1: especially something like the vaccine getting a message out, how
Speaker 1: productive that can be those small business owners, in particular
Speaker 1: Red Bottle, Thank you so much. Founder of Public Private Strategies.
Speaker 1: It's a consulting firm. He's also senior fellow at the
Speaker 1: Aspen Institute. Re Joining us on the phone from Washington,
Speaker 1: d C. This is Bloomberg Business Week with Carol Masser
Speaker 1: from Bloomberg Radio. Writing for Bloomberg Business Week this week
Speaker 1: Bloomberg opinion columnist Liam Denning, who takes a look at
Speaker 1: the future of energy from really tim management perspective. It's
Speaker 1: a great business school case study. It's looking at Elon
Speaker 1: Musk of course, the see of Tesla and Darren Woods,
Speaker 1: his counterpart at ex On Mobile and safe to say,
Speaker 1: I gotta tell you, I had to actually look up
Speaker 1: the name of ex On Mobile CEO because I didn't
Speaker 1: remember that that's who was He should be tweeting more
Speaker 1: about dog coin maybe or maybe not, or just worrying
Speaker 1: about the future of energy anyway. This story is the
Speaker 1: remarks for the upcoming issue of Bloomberg Business Week. And
Speaker 1: joining us with more Bloomberg Business Week gator Joe Weber
Speaker 1: on the access Line in Brooklyn and Bloomberg Opinion Energy,
Speaker 1: Mining and commodities columnist Liam Denning. He's on the phone
Speaker 1: in New York, Joe. Let's start with you. Though. I
Speaker 1: love this. It really is a case study of two
Speaker 1: very different CEOs. Yeah, and I had the same reaction
Speaker 1: when I was reading it, like Darren who and um,
Speaker 1: for the most part, investors have kind of felt the
Speaker 1: same way. I think. But but I think, um, you know,
Speaker 1: one of the reasons that we are really into this
Speaker 1: is like, look like earning earning season upon us and
Speaker 1: Tesla versus x On. Can you like imagine two different
Speaker 1: corporate stories or leadership styles. And what I thought, Um,
Speaker 1: Liam did a really good job of hitting on was like,
Speaker 1: you know, for the most part, one is just really
Speaker 1: ran on faith and obviously that's more Tesla, while Exxon
Speaker 1: has been known for this real dogged nous on on numbers,
Speaker 1: and yet one is having a completely different version of
Speaker 1: reality than the other over the past long haul and
Speaker 1: and this year to date, which I'm sure we'll talk about,
Speaker 1: has been a little bit different. But but Lea, how
Speaker 1: did you ultimately settle on putting these two leaders in
Speaker 1: the spotlight as sort of opposite forces, if you will.
Speaker 1: I think it's just because we're a really interesting moment
Speaker 1: for both of them. So you remember last year UM
Speaker 1: xn's market cap shut up like a fact or seven
Speaker 1: went way past x UM and you know, as you
Speaker 1: may recall, there are a flurry of stories about that
Speaker 1: and how it symbolized the transition from you know, the
Speaker 1: oil age to the electric age and that sort of thing.
Speaker 1: But I think it's it's interesting because the way I
Speaker 1: think about it is, you know, if you go back
Speaker 1: a few years, Exon was the most valuable company in
Speaker 1: the world. It could kind of do no wrong UM
Speaker 1: and investors had this kind of rock solid belief in it.
Speaker 1: And here we are, you know, just a few short
Speaker 1: years later in early UM. Exon is you know, it's
Speaker 1: been through some traveling times, it's run pretty much the
Speaker 1: same as it always has been, but it's lost that
Speaker 1: kind of belief from investors, where Tesla, you know, despite
Speaker 1: everything it does that you think would shake belief, UM
Speaker 1: just has this kind of fanatical devotion on the part
Speaker 1: of investors. So I just always an interesting way of
Speaker 1: looking at these two companies opposite ends of the energy business.
Speaker 1: It's really interesting and I thought, man, this would be
Speaker 1: grea to like just sit down with a bunch of
Speaker 1: people like we are doing now and just talk about
Speaker 1: it like you do. Wonder because both liam are optimistic
Speaker 1: long term and how can that be possible? Can it
Speaker 1: be possible that they both have at least in the
Speaker 1: somewhat longer term, you know, optimistic futures or is that impossible?
Speaker 1: I think it's impossible. You know, there is one viewpoint
Speaker 1: that says, well, look, the energy transition will take time,
Speaker 1: and these both of these companies can certainly make money
Speaker 1: for some period. But I think when you look at
Speaker 1: their core belief systems, they're just very different. I mean,
Speaker 1: you know, Bloomberg an e f Our own in house forecasters.
Speaker 1: You know, they're pretty bullish on electric vehicles, but even
Speaker 1: they see it as taking a little while, um, maybe
Speaker 1: into the middle of the thirties to see like serious
Speaker 1: market penetration. Elon must sees it happening much quicker than that.
Speaker 1: You look at Excel mogul Um, they're more in the
Speaker 1: it will take time, camp we can develop new businesses
Speaker 1: that sort of thing. I just think that the the
Speaker 1: the sheer aggressiveness of each view makes them incompatible. You know,
Speaker 1: one of one of these is going to work out
Speaker 1: to be true, but not both. It does seem like
Speaker 1: the money right now is on Tesla, though it's it's
Speaker 1: hard to imagine a world where fossil fuels in a
Speaker 1: company that really is focused on fossil fuels ends up
Speaker 1: being the one that survives, right. I think longer term,
Speaker 1: for you know, fossil fuels are going to peak and
Speaker 1: decline absolutely. Um. I think it's a question of degree.
Speaker 1: You know, um Exon has suffered mainly because it made
Speaker 1: some really bad tactical errors. Um you know, stretching all
Speaker 1: the way back to about a decade ago when it
Speaker 1: brought this very expensive gas business where it ended up
Speaker 1: writing off quite a lot of it at the end
Speaker 1: of last year, and there have been other mistakes I
Speaker 1: think where it gets a little unbelievable, as if you
Speaker 1: look at Tesla. I mean, clearly there is a lot
Speaker 1: of money flowing into clean tech right now and there
Speaker 1: is a bright future for that business. But you know,
Speaker 1: you look at Tesla, It's made about billion dollars of
Speaker 1: profit over the last six quarters. It's valued at like
Speaker 1: seven billion dollars. Um has the market got a bit
Speaker 1: ahead of itself on Tesla. I would say, yes, well
Speaker 1: that kind of speaks to you know, how Excen specifically
Speaker 1: has performed this year year today, uh Liam and and
Speaker 1: that number actually really jumped out to me. Um So
Speaker 1: talk about like why why an x and might be
Speaker 1: able to continue to performing in the shorter term while
Speaker 1: while as in the long run we can might still
Speaker 1: the market might be right to be bullish on Tesla. Yeah,
Speaker 1: I think in the short term what Excen is doing,
Speaker 1: it's a couple of things. One is that it's just
Speaker 1: at the oil price has recovered a bit from the
Speaker 1: from the COVID pandemic, so that's kind of lifted all
Speaker 1: oil companies. I think the other thing is excellent has
Speaker 1: you know, it's excell was kind of aloof for the
Speaker 1: longest time. I mean, I think I mentioned in the
Speaker 1: piece that Darren Wood's made made headlines just for showing
Speaker 1: up on an earning cool uh And and they've actually
Speaker 1: had to listen, you know, they actually had activists show
Speaker 1: up and had to engage with them. And so they have,
Speaker 1: They've adjusted their stance, They've they've reigned in spending, they've
Speaker 1: started acknowledging that there is actually an energy transition and
Speaker 1: there there potentially going to start businesses. But look at that.
Speaker 1: So they're they're coming back, partly because the all price
Speaker 1: is coming back, but partly because they seem to have
Speaker 1: acknowledged their past mistakes with Tesla. There is there is,
Speaker 1: there is a core story of the energy transition, and
Speaker 1: that's that's right, of course, but it's also a function
Speaker 1: of the fact that we are we are in a
Speaker 1: moment in markets where that kind of long term vision
Speaker 1: thing is meeting you know, very low interest rates and
Speaker 1: you do get some fantastic valuations. Well, we're definitely at
Speaker 1: a point where there is this option this industry. There's
Speaker 1: still a lot of cars on the road that are
Speaker 1: you know, gas guzzlers. And at the same time, we
Speaker 1: had the Tesla story over the weekend, you know, with
Speaker 1: the car crash killing to no one appeared to be
Speaker 1: appeared to be driving, And it's just a reminder that
Speaker 1: it's not also an easy or just path forward without
Speaker 1: some speed bumps along the way, certainly for something like Tesla.
Speaker 1: Joe Weber at Liam Denning, thank you so much. This
Speaker 1: is Bloomberg Business Week with Carol Messer and Bloomberg quick
Speaker 1: takes Tim Stinovik on Bloomberg Radio. Well, the developed world
Speaker 1: taking care of the developing world when it comes to
Speaker 1: COVID and vaccine distribution. That's something that just last month
Speaker 1: we talked about with Nobelle Lloyd and Columbia University professor
Speaker 1: Joseph Stiglet's check it out. The developing countries, particularly in
Speaker 1: emerging markets, are not on tracked to have the kind
Speaker 1: of UH light at the end of the tunnel that
Speaker 1: we're beginning to see in the United States. We're getting vaccinated,
Speaker 1: and there are many many countries, as we document around
Speaker 1: the world that have not had a single vaccine. They
Speaker 1: just can't get access. It's a gap in terms of
Speaker 1: getting to that vaccine. We're certainly seeing that play out
Speaker 1: around the world. Writing about vaccine inequality and his weekly column,
Speaker 1: Bloomberg New Economy editorial director Andy Brown, Andy with us
Speaker 1: on the phone in New York City at our bureau
Speaker 1: here in New York City. I should say so Andy
Speaker 1: COmON in on this. This was something Joseph Stieglitz and
Speaker 1: about Laurie, very passionate about a lot of other people,
Speaker 1: and you just put it so eloquently in your weekly
Speaker 1: column um tell us about this. Yeah, well, the world
Speaker 1: the head of the World Health Organization described this vaccine
Speaker 1: inequity as a catastrophic moral failure, and not just that
Speaker 1: it makes absolutely no economic sense at all. Um. The
Speaker 1: International Chamber of columns to the study which showed that, um,
Speaker 1: that that vaccine national and basically rich countries hogging all
Speaker 1: the vaccines is going to cost the global economy something
Speaker 1: like nine point two trillion dollars, of which half the
Speaker 1: is going to be borne by by rich country. They
Speaker 1: lose because you know, they emerging markets that are grappling
Speaker 1: with the virus on buying their advanced manufactually products like
Speaker 1: planes and cars, but also they can't supply manufacturing parts.
Speaker 1: And the crazy thing here is that funding these multilateral
Speaker 1: efforts to vaccinate emerging economies is going to cost a
Speaker 1: couple of billion bucks, right, so you know, overall in
Speaker 1: the big picture, a drop in the bucket. Hey, Andy,
Speaker 1: I'm talk a little bit about what what this bill
Speaker 1: gates quote that you included quote, the the self interested
Speaker 1: thing and the altruistic thing making sure core nations of
Speaker 1: access to vaccines are one and the same. Why do
Speaker 1: we have so much trouble seeing that it's it's it's
Speaker 1: a really good question, you know. I mean, of course,
Speaker 1: governments everywhere have an obligation to look after their own people. Um,
Speaker 1: but you know, you've got you We've got to the
Speaker 1: situation now where in the US and large parts of Europe,
Speaker 1: we're well on our way now to hurt immunity, which
Speaker 1: is generally calculated as around about seventy percent of the
Speaker 1: population with some kind of of immunity at best. At
Speaker 1: the end of this year, we're looking at no more
Speaker 1: than emerging economies having inoculated no more than about twenty
Speaker 1: one quarter of their population. And as Joe Stiglets you
Speaker 1: just heard him say, you know, there's a whole bunch
Speaker 1: of poor countries U a couple of dozen of them
Speaker 1: where they haven't even gotten started, you know, and I
Speaker 1: mean you you think of about this. There's there's a
Speaker 1: stockpile right now in the US of twenty millions of
Speaker 1: doses of astra zeneca. Apparently it's not even going to
Speaker 1: factor into Joe Biden's or the Biden Administration's vaccine roll out.
Speaker 1: You know, twenty million vaccines could could could vaccinate the
Speaker 1: whole of Cameroon, you know, or angle. I mean, it
Speaker 1: just it which seemed to me to be such an
Speaker 1: easy win for advancing, particularly the United States right now,
Speaker 1: to just lead a global campaign to inoculate the world.
Speaker 1: I mean, of course it would be the morally the
Speaker 1: right thing to do. Um And you know, as they say,
Speaker 1: I mean, it's just a no brain from from an
Speaker 1: economic perspective. Well, you know, and in reading your column, Andy,
Speaker 1: the thing is right if you don't have a moral
Speaker 1: compass and you don't realize that it's the right thing
Speaker 1: to do to take care of the developing world, you know,
Speaker 1: just from an economic sense. And you mentioned this stat
Speaker 1: at the top of our segment here that you say
Speaker 1: that the Chamber of Commerce, the International Chamber of Congress,
Speaker 1: concluding an unequal allocation of injections vaccine injections could deprive
Speaker 1: the world economy of as much as nine point two
Speaker 1: trillion dollars. So even if you don't think it's the
Speaker 1: right thing to do, you've got to at some point
Speaker 1: logically understand that there is a huge economic cost, continued
Speaker 1: cost if we don't get this right. Yeah, and then
Speaker 1: the other tragedy is, you know, with this this scare
Speaker 1: of a blood blood clock arising from Astras Naca R
Speaker 1: Now J and J. You know, in America, it's basically
Speaker 1: a bit of a speed bump, right, I mean, J
Speaker 1: and J is about five percent, I think of all
Speaker 1: the vaccines that are being sort of pushed into arms
Speaker 1: around the country. But this, this, this is in Africa.
Speaker 1: The news that that J and J was being suspended
Speaker 1: in the US was absolutely devastating. I mean, you know,
Speaker 1: there's already a huge amount of vaccine hesitancy in Africa
Speaker 1: for all kinds of complicated reasons. You know, partly because
Speaker 1: a lot of people in Africa don't believe the Western
Speaker 1: pharmaceutical companies have their own best interests in hot at
Speaker 1: hot and you know, in country after country you're seeing
Speaker 1: that this news is now sort of health authority is
Speaker 1: a persuading population's got to get vaccinated. And this is
Speaker 1: just set these efforts all the way back to the
Speaker 1: square one. So, Andy, how do you envision this ending.
Speaker 1: Do we get to a point where the entire world
Speaker 1: gets inoculated and in a reasonable time frame, or or
Speaker 1: do we have pocket of areas of the of the world,
Speaker 1: like the United States that are somewhat vaccinated, even those
Speaker 1: you point out we live in a world with chorus
Speaker 1: borders and that kind of doesn't really matter. Well, I
Speaker 1: hope not, because, um, you know, the old cliche, until
Speaker 1: everybody is safe, nobody is safe. And and the you know,
Speaker 1: there's a very realistic scenario where they do emerging economies
Speaker 1: don't get back to the eightage, you're going to start
Speaker 1: to get of course, that gives that office an opportunity
Speaker 1: for variants to take hold, um, to overwhelm the existing vaccines. Um,
Speaker 1: you know, and then you see that, you see, you'll
Speaker 1: see the pandemic roaring back, and of course then we'll
Speaker 1: be back again in another economic crisis. I mean, hence
Speaker 1: Bill Gates is contention that the self interested thing and
Speaker 1: the altruistic thing one and the same. Yeah, And you know, listen,
Speaker 1: we have talked so much about the importance of Astra
Speaker 1: Zeneca's vaccine, Jay and Jay's vaccine and really being able
Speaker 1: to inoculate the world, and that has definitely been a
Speaker 1: major major setback. Andy, Thank you so much, uh Andy Brown,
Speaker 1: he's editorial director of Bloomberg New Economy. On the phone
Speaker 1: in our New York City bureau. But this is gonna
Speaker 1: be a big thing. I mean, jose Stieglitz and many others,
Speaker 1: as Andy referenced, have talked about the importance that the
Speaker 1: virus knows no borders, and if we don't take care
Speaker 1: of the world at large, that's going to be a problem,
Speaker 1: and it's going to make COVID stay with us much longer.
Speaker 1: Not only will it make COVID stay with us, a
Speaker 1: lot more lives will be lost, which is incredibly unfortunate.
Speaker 1: And what we see also is this uneven recovery around
Speaker 1: the world where we won't get fully back to normal.
Speaker 1: If there are areas of the world where there could
Speaker 1: be uh, mute mutations forming right right, exactly, all right, well,
Speaker 1: certainly something will continue. Watch check out Andy's columns and
Speaker 1: check out at new Econ Forum. This is Bloomberg Business
Speaker 1: Week with Carol Masser from Bloomberg Radio, one of the
Speaker 1: high flyers. Certainly of different tone this year, uh and
Speaker 1: in particular today down about seven, we're talking about Peloton,
Speaker 1: the stock selling of tim after US regulators warn consumers
Speaker 1: to stop using the exercise equipment maker's tread plus machine
Speaker 1: if they are young, children, are pets at home. I mean.
Speaker 1: Ben Side is technology and media analyst at Bloomberg Intelligence
Speaker 1: and joins us on the phone from New York City.
Speaker 1: I mean, thanks for joining us about this, Um, you
Speaker 1: have a reaction to this latest news from Peloton, essentially saying,
Speaker 1: um that the regulator warning on the tread plus that's
Speaker 1: this machine that Carol was talking about, may not actually
Speaker 1: hurt the company's growth. Why not? Thanks for having me, Yes, So,
Speaker 1: I mean when we look at the you know, the
Speaker 1: hardware mix that Peloton have, over ninety percent of sales
Speaker 1: are still the bike, not so much the treadmill or
Speaker 1: the treadmill plus. So in the very new term, it
Speaker 1: doesn't look to us like this will have an impact.
Speaker 1: But on the other side, when we uh, you know,
Speaker 1: look at dellegation standpoint, our allegation analyst Holy Film actually
Speaker 1: put on this morning discussing how an involuntary recall um
Speaker 1: for the treade Plass product is unlikely. So the really
Speaker 1: litters you know, at this point of time, unlikely for
Speaker 1: them to force polot On to stop, you know, sending
Speaker 1: this products. So that's why we think for the new
Speaker 1: term the impact could be minimal. What about though, on
Speaker 1: the brand, how much of this is important in terms
Speaker 1: of how they react to this particular thing. Uh, in
Speaker 1: this particular problem or potential problem. It's obviously a problem
Speaker 1: if it's happening, right, But I do wonder how the
Speaker 1: company addresses it, how that could ultimately affect their their
Speaker 1: future consumer base or future growth. Absolute that's a question
Speaker 1: because their focus for this year was also the treadmill,
Speaker 1: because when you look at the marketing spending the last
Speaker 1: few years was mostly for the bike, but they discussed,
Speaker 1: you know, on their earning goals how the treadmill. They're
Speaker 1: going to shift a lot of the marketing to the
Speaker 1: treadmill to you know, to do stuss for the product.
Speaker 1: And they also have um, the new lower price treadmill
Speaker 1: coming up in May. So yes, I agree that for
Speaker 1: the image of the brand, there could be an impact
Speaker 1: if this incidents keep happening and more regular to uh,
Speaker 1: you know join and you know a warrant about the product.
Speaker 1: But on the other hand, what the company is doing
Speaker 1: to answer the second part of your question, uh, you know,
Speaker 1: the announced they're also updating their software to make it
Speaker 1: a little bit harder for anyone who's not supposed to
Speaker 1: use the treadmill to use it from it basically either
Speaker 1: have a pass code or something for that sort, you know,
Speaker 1: to to to improve safety for the product. Do you
Speaker 1: see that being the solution here? Is it as simple
Speaker 1: as that? Is it an update to the harderware or
Speaker 1: is this the type of thing that the company get
Speaker 1: to the point where they are actually asking people to
Speaker 1: return this piece of equipment which is incredibly healty. Yes,
Speaker 1: I mean it's it's it's still unclear at this stage
Speaker 1: because we still are not clear on you know, is
Speaker 1: this a peloton specific issue or is this you know,
Speaker 1: an overall treadmill because as you know, treadmit a dangerous
Speaker 1: for children and impacts. So it's not something that I think,
Speaker 1: in opinion specific, But if the regulators find that, if
Speaker 1: there is something in the hardware, then make it specific. Yes,
Speaker 1: it could be a risk, but that's your question about
Speaker 1: is this enough from the software standpoint? Um, again, if
Speaker 1: it's overall a treadmill risk, I don't, I don't. I
Speaker 1: think yes, this is could be enough. But if more
Speaker 1: concerns give happening in the future, Um, I don't know.
Speaker 1: If I re call is even a possibility and the
Speaker 1: company says then not we're calling or stopping self for
Speaker 1: the product, well, you know, I mean I mean, like
Speaker 1: one thing I thought was interesting. I have a Peloton
Speaker 1: bike and you've got to log in, And of course
Speaker 1: a bike is not a treadmill. There are two different things.
Speaker 1: But I'm trying to understand. I think if you have
Speaker 1: everything turned off, unless you have a kid logging in, like,
Speaker 1: you can't necessarily get things going. Again, I don't have
Speaker 1: the treadmill, so I don't know logistically if you can
Speaker 1: just hit a power on button, uh and it's on,
Speaker 1: or if you just unplug it when you're done, do
Speaker 1: you kind of do away with the problem. I mean,
Speaker 1: treadmills have been around for a long time. Has this
Speaker 1: been a chronic consumer problem or consumer you know, I'm
Speaker 1: thinking of consumer reports. Have they reported on things like
Speaker 1: this in the past with other treadmills, or like I said,
Speaker 1: is there something Peloton specific? Yeah, I mean so for
Speaker 1: the first part of the question, I think yes, that's
Speaker 1: what the regreators are also suggesting, you know, just unplug it.
Speaker 1: We're having a different room. That stopped the problem, I
Speaker 1: mean obviously, but you know there is no pass code
Speaker 1: um there. You still have to log you know, the
Speaker 1: logan is automatic if you have your passports there. I
Speaker 1: would as soon because I have had a bike there also,
Speaker 1: so I remember it was just you know, just like
Speaker 1: one batman shrying up. But maybe people live it on
Speaker 1: and they go and come back. That's the risk. But
Speaker 1: but you know, I agree with that your unplug it
Speaker 1: or have more security measures that could be enough. We're
Speaker 1: not sure the second part of your question for the recalls, Uh,
Speaker 1: the note was put up. But again our relegation analysts
Speaker 1: that there were eighty recalls since two thousand about the
Speaker 1: accessory equipment. So they are relatively rare in this industry.
Speaker 1: And so you know, unless we see significant amount of
Speaker 1: this incident happened from Peloton specific, um, it just it
Speaker 1: doesn't do like it's something um that happens often. I
Speaker 1: mean very briefly, we only have fifteen seconds left. Other
Speaker 1: types of hardware that you expect Peloton has in its
Speaker 1: pipeline right now. Strength their focus is strength. When we
Speaker 1: look at stront very quickly, two percent of their work
Speaker 1: else work strength now it's thirteen percent, uh, lots of
Speaker 1: last year and growing. So that is you know, that
Speaker 1: is their focus. So that's like a tonal type of
Speaker 1: machine tonal or like maybe even a roller at high
Speaker 1: intensity or anything focused instrument. Listen, that's it. They're finding
Speaker 1: different revenue streams. That's pretty pretty remarkable that they pivoted
Speaker 1: off the bike into other things. Um, I mean, thank
Speaker 1: you so much. A man Ben Side. He's Bloomberg Intelligence
Speaker 1: technology analysts joining us on the phone in New York Cities.
Speaker 1: We mentioned Peloton chairs just down about seven point two
Speaker 1: percent as we speak. You're listening to Bloomberg Business Week
Speaker 1: and this this Boomberg Radio road morow the journal. Yeah,
Speaker 1: but you let me drive. Oh no, no, no, no no
Speaker 1: job all right, please, I'll do the right ravels. I
Speaker 1: want to drive all just drive the question try. This
Speaker 1: is the Drive to the Globe Commune. Thanks, we'll drying
Speaker 1: us Dawn on Bloomberg Radio. A right, just about eleven
Speaker 1: minutes uh left in today's trading session, getting ready to
Speaker 1: wrap up the Monday trade. Our guest in the Drive
Speaker 1: to the closes, Vance Howard back with us portfolio manager
Speaker 1: and CEO at Howard Capital Management, based in Georgia. And
Speaker 1: that's where we find in Roswell, Georgia to be exact,
Speaker 1: three billion in assets under management. Vans. Nice to have
Speaker 1: you back here on Bloomberg Radio. On Bloomberg Business Week.
Speaker 1: When you look at the markets, you think they're a
Speaker 1: bit overbought. However bought and what does that mean in
Speaker 1: terms of a potential pullback? Well, when we say over
Speaker 1: bought here, let's let's be real clear. On a very
Speaker 1: very short term basis, meaning maybe one to two weeks,
Speaker 1: we do not see this market turning over at all.
Speaker 1: And you know, our proprietary indicated the h C on
Speaker 1: biblines pausitive. So any pullback we see as a buying opportunity,
Speaker 1: but on a technical basis, just for a one or two.
Speaker 1: So you're all bullish. We're not only bullish, we're real bullish.
Speaker 1: We have been since the second week of April last year.
Speaker 1: So what derails this politionist Because we've spent a lot
Speaker 1: of time talking today about the unequal distribution of the
Speaker 1: vaccine and how just because the pandemic ends in the
Speaker 1: United States doesn't mean that it's necessarily ending around the world.
Speaker 1: And my concern they're apart from loss of life, is
Speaker 1: of course economic activity. And so Timmy that you brought
Speaker 1: that up to him, because Jess crossing the Bloomberg terminal
Speaker 1: of the State Department to caution against travel to about
Speaker 1: eight percent of countries evants. As to mention, I mean
Speaker 1: a reminder that globally we're still in a tough place.
Speaker 1: Globally we are, but you know, the you know, the
Speaker 1: vaccine is getting distributed very very very well in the
Speaker 1: United States. And by the way, that's a big testament
Speaker 1: of corporate America. They've been a big catalyst behind that.
Speaker 1: I think it's just been wonderful how fast they got
Speaker 1: the vaccine out and how fast are getting it into people.
Speaker 1: I've already had one shot. I'll be getting us next one,
Speaker 1: the next shot, next week. But you know, and you
Speaker 1: see France over there is really struggling up. I don't
Speaker 1: think that the corporate America has been quite as buttoned
Speaker 1: up for as strong as ours has, and I think
Speaker 1: that's why they've only got three or four percent of
Speaker 1: their people being vaccinated. So, you know, the US just
Speaker 1: heads and tails above most other places. But that creates
Speaker 1: some risks, and that creates some you know, and what
Speaker 1: the CFO would say, tail winds, right, especially when it
Speaker 1: comes to the way that the CFOs are thinking about
Speaker 1: the economy. Because this is a global economy that we
Speaker 1: live in, it doesn't matter if we're vaccinated here in
Speaker 1: the US, if other countries aren't, they're not going to reopen.
Speaker 1: And if our suppliers in the developing world can't provide
Speaker 1: components that we need for production, it just slows everybody down.
Speaker 1: Where there's no doubt it's going to be a slowdown.
Speaker 1: But we're opening up pretty quick even around the world.
Speaker 1: I think things are getting better, They're not getting worse.
Speaker 1: So you know, in net net, I think it's a positive.
Speaker 1: And let's let's face it, between China and the US,
Speaker 1: we're the two biggest economies out there, and it looks
Speaker 1: like China has opened up pretty good too. I work
Speaker 1: at Third GDP. I mean it was through the roof,
Speaker 1: so you so you're not worried at all. You know,
Speaker 1: even though we did a story about global you know,
Speaker 1: COVID cases coming up, I mean you think the US alone,
Speaker 1: and I know you also talked about China specifically too,
Speaker 1: although I think China has had some trouble with vaccine
Speaker 1: rollout as well. Um, you know, you're not worried. If
Speaker 1: China and the US are going you think everything's going
Speaker 1: to be fine. I think we're gonna work through it
Speaker 1: at a pretty good pace. I mean, do we have
Speaker 1: bumps in the road. Yes, But no matter whether we
Speaker 1: have a pandemic or not, there's always bumps in the road.
Speaker 1: There's always something you know, around the world that we
Speaker 1: can point a finger two and said, oh, that's the
Speaker 1: reason the market. But there's bumps. And then there's another
Speaker 1: wave of COVID that causes shutdowns, that that could that
Speaker 1: could be a concern, but that's still it's not to
Speaker 1: the point now i'd be too concerned about another way
Speaker 1: because even with the way, if we do have another wave,
Speaker 1: I don't think it's going to be as such a
Speaker 1: shock factor as the second wave was, and I think
Speaker 1: that was a pretty big one. But yeah, we're bullish
Speaker 1: and I would be buying into this, and I think
Speaker 1: six months, twelve months, eighteen months, I think you'd be
Speaker 1: happy you did. Really, So what I mean, what are
Speaker 1: your what are your own targets for the end of
Speaker 1: the year. Well, we don't have any targets them, to
Speaker 1: be quite candid, but we do run a proprietary indicated
Speaker 1: the h c M biline is mathematically driven. It's all
Speaker 1: quantitaty will be driven and I can tell you right now,
Speaker 1: strong as the h C on Biline is going back
Speaker 1: over forty years. You got an eighty two percent chance
Speaker 1: the market is going to be higher. So we know
Speaker 1: what the odds are you at a two percent chance
Speaker 1: you take that trade? So I'm gonna ask a question.
Speaker 1: I bet I know the answer. Tesla down four percent today?
Speaker 1: You like this name? Are you buying on this dip?
Speaker 1: Would we we bought a whole bunch of Tesla about
Speaker 1: I guess four weeks ago. You know, I think we're
Speaker 1: rough about on that trade. We started buying into Tesla
Speaker 1: back then. You know, again, ask yourself twelve twenty four
Speaker 1: months from now, do you think Tesla is going to
Speaker 1: be higher? I think it is. I don't know. I mean,
Speaker 1: there's a lot more new entrants when it comes to
Speaker 1: the e V market. We've done story after story every
Speaker 1: day that this year one is going to be whether
Speaker 1: it's Volkswagen with her, it's Mercedes, whether it's them, whether
Speaker 1: you know, you talked about it even you know, all
Speaker 1: along kind of the cost structure of cars. You see
Speaker 1: a lot new entries into the marketplace. You don't think
Speaker 1: that's going to give Tesla run for their money. It could,
Speaker 1: It very well could. But look at this though, You're
Speaker 1: you're buying one of the products that that's not that's
Speaker 1: a big part of Tesla unless a guy called Elon Musk.
Speaker 1: I mean, the guy made a billion bucks with Bitcoin.
Speaker 1: With Tesla, I mean, this guy is not sitting on
Speaker 1: his hands. He's probably one of the most brilliant innovators
Speaker 1: we have since Edison so and and Steve Jobs. So
Speaker 1: I mean you're also you're you're putting your money behind him.
Speaker 1: And I tell you, the guy's a young guy's a
Speaker 1: smart guy. I mean, think about what this guy can
Speaker 1: come up with next prod or twenty four months. Does
Speaker 1: it concern just today's news concern you at all? No,
Speaker 1: it doesn't concern me. I mean, this guy has already
Speaker 1: got a big foothold in the marketplace. He's he's going
Speaker 1: to drive traffic to Tesla. He's gonna come up with
Speaker 1: something probably pretty interesting and innovative and probably in the
Speaker 1: near term. Right. But just the fact that the the
Speaker 1: idea that it could damage the brand, You're not concerned
Speaker 1: about that? No, I'm not. I'm not concerned about that. Uh.
Speaker 1: Any other names that you're finding interesting, like we're gonna
Speaker 1: have United after the closing Bell today. We had Delta
Speaker 1: last week. I mean, listen, you know this is going
Speaker 1: to be potentially one of the big recovery stories. And
Speaker 1: we know this is a group that just got decimated.
Speaker 1: You know, all of their business are of their business
Speaker 1: shutdown in What do you make of maybe the air lines?
Speaker 1: Is that an area where you would commit some new
Speaker 1: money or have they had their bounce back already? No? No, no,
Speaker 1: I think they're gonna move higher right. Like I said,
Speaker 1: we're bullish. We think things are going to open up.
Speaker 1: We're not afraid of the world right now. You know,
Speaker 1: we're launching a lot of great stocks that have been basing,
Speaker 1: Like look at Amazon. Amazon has been basing for nine
Speaker 1: much and it's on the It's just very very close
Speaker 1: to having a fifty two week breakout, which is always
Speaker 1: a positive thing. You know, Microsoft just broke out to
Speaker 1: a fifty two week Hi. I mean, you're getting a
Speaker 1: lot of stocks that are starting to break out. That's
Speaker 1: telling you one thing. You don't trade with emotion. You
Speaker 1: have to trade math like we do. So sit around
Speaker 1: and worry about about the virus all day. You I
Speaker 1: don't know what's gonna happen. Nobody does, but I can
Speaker 1: tell you the odds are very very high mathematically from
Speaker 1: the HC M Biloon, this market is going higher. Well,
Speaker 1: there it is. You are definitely bullish. Okay, So I've
Speaker 1: asked you about if the virus could derail this. Is
Speaker 1: there anything else that you think could derail this? Because
Speaker 1: there's corporate taxes potentially that could go higher. We didn't
Speaker 1: see the market moves significantly on that news a few
Speaker 1: weeks ago, which leads me to believe that either A
Speaker 1: they don't think investors don't necessarily think it's gonna happen,
Speaker 1: or be Um, it won't affect the company's bottom lines
Speaker 1: and earning that much. Where do you falling when it
Speaker 1: comes to corporate taxes? Something to be concerned about? But yeah,
Speaker 1: it is, it is. There's two things that concern us now.
Speaker 1: These are things that could drill is higher taxes and
Speaker 1: and and dramatically more regulation. Those are the two factors
Speaker 1: They could fill a monkey wrench in this whole process. Um,
Speaker 1: But what we're getting is a lot of talk out
Speaker 1: of Washington. I don't know how much of this is
Speaker 1: gonna come reality because there's a point out there that
Speaker 1: you gotta step back as a legislature and say, man
Speaker 1: if I crushed the economy and probably not gonna keep
Speaker 1: my job and get reelected, So they're gonna have to
Speaker 1: kind of walk a tip rope and what do you
Speaker 1: do with regulation and taxes to try to stay, you know,
Speaker 1: keep between the lines and not swerve off and wreck. Hey,
Speaker 1: there's a lot of E t F that you like,
Speaker 1: just got about seconds left here. What's the play here
Speaker 1: for the E d F world for you? You know,
Speaker 1: I was on CNBC the other day and we're talking about,
Speaker 1: Oh my god, you're done. I can't even believe you
Speaker 1: did that. Really, I didn't hear him that. I didn't
Speaker 1: hear what you said. Sorry, we had a technically you
Speaker 1: were doing so well and then ah, well whatever, what
Speaker 1: you know. We started to find d v Y back
Speaker 1: in the first week or the first week of April
Speaker 1: of last year. It's been a great trade. But I
Speaker 1: was asked the question though by another being interviewed, like, so, well,
Speaker 1: don't you think it's topic You don't you think it's
Speaker 1: too hot? You know, new has become new, has become new,
Speaker 1: hows become new highes. That's how things double. So nothing
Speaker 1: can double unlessen to it and knew how the whole way. Yep.
Speaker 1: So when you look at the epicenter stocks with vv
Speaker 1: why holds a whole bunch of high dividend epicenter stocks.
Speaker 1: There's just so many things that are working right now.
Speaker 1: All Right, We're gonna leave it on that note. Vans Howard,
Speaker 1: thank you so much, Chief executive Officer, Portfolio manager Howard
Speaker 1: Capital Management, three billion in assets under management. A definite
Speaker 1: bull there, and we still like him even though he
Speaker 1: mentioned a competitor. I mean, we like our competitors. I
Speaker 1: know a lot of people there, a lot of my
Speaker 1: friends are there, but still know your audience. Thanks for
Speaker 1: listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud,
Speaker 1: or Bloomberg dot com, and you can also listen to
Speaker 1: our radio show at two pm Eastern on Bloomberg Radio
Speaker 1: or watch us on YouTube. Sarah to Bloomberg Global News