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 --> 00:00:15,560 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 --> 00:00:21,919 Speaker 1: at Bloomberg dot com slash podcast. Let's get right to 7 00:00:21,920 --> 00:00:25,000 Speaker 1: our next guest, Mike Mulaney, Director of Global Markets Research 8 00:00:25,040 --> 00:00:28,520 Speaker 1: at Boston Partners Global Investors. Mike, thanks so much for 9 00:00:28,600 --> 00:00:32,000 Speaker 1: joining us here. You know, as we really continue our 10 00:00:32,040 --> 00:00:35,080 Speaker 1: focus on the US failed to reserve, the real challenge 11 00:00:35,080 --> 00:00:37,920 Speaker 1: for a lot of investors is will this failed reserve 12 00:00:38,080 --> 00:00:41,120 Speaker 1: move to such a point that it may push the 13 00:00:41,200 --> 00:00:44,479 Speaker 1: US economy inter recession if we're not already in one already. 14 00:00:44,520 --> 00:00:46,960 Speaker 1: How do how do you think about that? Well, we 15 00:00:47,040 --> 00:00:49,960 Speaker 1: gauge it based upon what their targets are for their 16 00:00:50,200 --> 00:00:53,479 Speaker 1: their inflation forecasts, and that we look at core PC, 17 00:00:53,880 --> 00:00:57,320 Speaker 1: the personal consumption Expenditure Price index, which is really what 18 00:00:57,440 --> 00:00:59,680 Speaker 1: they focus on. And if you look at the most 19 00:00:59,680 --> 00:01:02,480 Speaker 1: recent drop plot that came out with last week, um, 20 00:01:02,520 --> 00:01:04,520 Speaker 1: you know they've got that at the end of two 21 00:01:04,520 --> 00:01:08,480 Speaker 1: thousand twenty three at two point seven percent. So to 22 00:01:08,600 --> 00:01:10,800 Speaker 1: drop from where we are right now, which I believe 23 00:01:10,880 --> 00:01:13,520 Speaker 1: is four point nine percent down to two point seven percent, 24 00:01:13,680 --> 00:01:16,480 Speaker 1: it's a pretty substantial drop within a relatively short span 25 00:01:16,520 --> 00:01:20,240 Speaker 1: of time, roughly about eighteen months um. It has been 26 00:01:20,280 --> 00:01:23,080 Speaker 1: accomplished before. We've seen that kind of a drop over 27 00:01:23,120 --> 00:01:26,280 Speaker 1: that's kind of a time frame from a historical standpoint, 28 00:01:27,080 --> 00:01:30,840 Speaker 1: in two instances since nineteen sixty. But one was during 29 00:01:30,880 --> 00:01:34,400 Speaker 1: basically the the the recession that was called caused by 30 00:01:34,440 --> 00:01:37,920 Speaker 1: the Arab oil embargo back in nineteen seventy four seventy five, 31 00:01:38,760 --> 00:01:41,399 Speaker 1: and the second one was back in the in the 32 00:01:41,480 --> 00:01:44,960 Speaker 1: Voca era when he burst the prior inflation bubble during 33 00:01:44,959 --> 00:01:47,720 Speaker 1: the ladder part of the nineteen seventies. So to have 34 00:01:47,800 --> 00:01:51,480 Speaker 1: that kind of a drop in core PCE over eighteen 35 00:01:51,520 --> 00:01:56,200 Speaker 1: months has generally been associated with recession both times that 36 00:01:56,240 --> 00:01:58,600 Speaker 1: we've seen that once again since nineteen sixty. By the way, 37 00:01:58,680 --> 00:02:03,600 Speaker 1: Arthur Burns also I believe at one point got inflation 38 00:02:03,640 --> 00:02:06,320 Speaker 1: to um well well where it looked like it was 39 00:02:06,400 --> 00:02:10,880 Speaker 1: under control, and then failed to continue. Then inflation came 40 00:02:10,960 --> 00:02:15,000 Speaker 1: roaring back in the latter half of the seventies. Right. Um. 41 00:02:15,120 --> 00:02:18,400 Speaker 1: Basically he blinked, Is it is it a concern with 42 00:02:18,440 --> 00:02:21,959 Speaker 1: this fat that they're gonna you know, raise to three 43 00:02:22,000 --> 00:02:23,800 Speaker 1: and a half four or four and a half percent 44 00:02:23,960 --> 00:02:26,040 Speaker 1: and and get inflation on the way down, but then 45 00:02:26,080 --> 00:02:29,160 Speaker 1: be confronted by a recession or a bigger market sell 46 00:02:29,200 --> 00:02:33,080 Speaker 1: off and then start cutting again. Yeah. I think that's probably, 47 00:02:33,240 --> 00:02:35,680 Speaker 1: you know, something that's in the back of most investors minds, 48 00:02:35,720 --> 00:02:37,600 Speaker 1: what they'll do if they'll balk at this, if they 49 00:02:37,680 --> 00:02:39,760 Speaker 1: really will pull a voke or or the pull a 50 00:02:39,800 --> 00:02:42,639 Speaker 1: Burns one of the two and Um, then I think 51 00:02:42,639 --> 00:02:44,800 Speaker 1: the way to look at that would be that watched 52 00:02:44,880 --> 00:02:48,000 Speaker 1: there once again their inflation forecasts and their and their 53 00:02:48,040 --> 00:02:51,240 Speaker 1: and their financial objections going forward at the at the 54 00:02:51,280 --> 00:02:54,200 Speaker 1: meetings that are coming up. Um. If they balk and 55 00:02:54,240 --> 00:02:57,000 Speaker 1: they say once again that you know, they're still talking 56 00:02:57,040 --> 00:03:00,280 Speaker 1: about a two percent target inflation for PC, not even 57 00:03:00,320 --> 00:03:03,880 Speaker 1: the two point seven percent, which is once again for 58 00:03:03,919 --> 00:03:06,799 Speaker 1: the end of two thousand twenty three. Um. If they 59 00:03:06,800 --> 00:03:09,639 Speaker 1: balk and they start saying, well, you know, two percent 60 00:03:09,800 --> 00:03:13,200 Speaker 1: is really an unrealistic number because of structural problems that 61 00:03:13,280 --> 00:03:16,359 Speaker 1: we can't control, and they start raising that, I think 62 00:03:16,400 --> 00:03:19,320 Speaker 1: that's probably a greater concern for investors because that brings 63 00:03:19,360 --> 00:03:24,040 Speaker 1: in more of a stay inflation environment potentially going forward. So, Mike, 64 00:03:24,040 --> 00:03:27,200 Speaker 1: where you had that stock market, is that pricing in 65 00:03:27,280 --> 00:03:32,400 Speaker 1: a recession? Uh, soft landing not recession? Um. Historically the 66 00:03:32,480 --> 00:03:35,880 Speaker 1: last four recessions that we've seen, the market's been down 67 00:03:35,920 --> 00:03:40,040 Speaker 1: over So if indeed we are about to you know, 68 00:03:40,120 --> 00:03:43,280 Speaker 1: embark on a recession sometime, maybe not in two thousand 69 00:03:43,280 --> 00:03:45,920 Speaker 1: and twenty two, but most likely in two thousand twenty 70 00:03:45,960 --> 00:03:48,680 Speaker 1: three once again at the Fed sticks there to their 71 00:03:48,720 --> 00:03:52,440 Speaker 1: inflation goals, then the market still has additional die inside. 72 00:03:52,480 --> 00:03:56,320 Speaker 1: From this point, President Biden out saying that a recession 73 00:03:56,400 --> 00:04:01,760 Speaker 1: is not an inevitability. Uh. Elon Us counters that, well, 74 00:04:01,880 --> 00:04:03,920 Speaker 1: we're definitely going to have a recession at some point. 75 00:04:04,000 --> 00:04:07,640 Speaker 1: You can count on that unless we've ended the business cycle, right. Um. 76 00:04:07,680 --> 00:04:10,360 Speaker 1: But he says it's he thinks it's more likely than 77 00:04:10,440 --> 00:04:12,680 Speaker 1: not in the near term, and that call is growing 78 00:04:12,720 --> 00:04:17,760 Speaker 1: in terms of weight um. More and more UH economists 79 00:04:17,800 --> 00:04:22,080 Speaker 1: on the street are saying, look, it's it seems um 80 00:04:22,200 --> 00:04:25,360 Speaker 1: maybe or higher the odds of a recession between now 81 00:04:25,360 --> 00:04:29,360 Speaker 1: and say, is it is it possible? We get a 82 00:04:29,560 --> 00:04:35,640 Speaker 1: light recession and pull out quickly based upon the magnitude 83 00:04:35,640 --> 00:04:37,800 Speaker 1: of the change that we've seen in inflation. You know, 84 00:04:37,839 --> 00:04:41,800 Speaker 1: it's gone up over five in a one year period. UM, 85 00:04:41,880 --> 00:04:45,719 Speaker 1: that's pretty much almost unprecedented. So to be able to 86 00:04:45,800 --> 00:04:49,279 Speaker 1: get that under control, I don't think a light recession 87 00:04:49,320 --> 00:04:51,200 Speaker 1: does it. It's probably gonna have to be something which 88 00:04:51,240 --> 00:04:54,240 Speaker 1: is more severe. The question is how you know, long 89 00:04:54,360 --> 00:04:56,360 Speaker 1: live it is. It may not have to last all 90 00:04:56,360 --> 00:04:57,760 Speaker 1: that long, but I think it's going to have to 91 00:04:57,800 --> 00:05:01,279 Speaker 1: be relatively deep, basically to flushed the system again and 92 00:05:01,320 --> 00:05:03,960 Speaker 1: get things back to a kind of a neutral drawing 93 00:05:04,000 --> 00:05:08,320 Speaker 1: board from an inflation standpoint. So but what about UM 94 00:05:08,520 --> 00:05:12,840 Speaker 1: different sectors? Could we have a recession? Uh, spares for example, 95 00:05:12,920 --> 00:05:16,479 Speaker 1: the finance financial sector? Well, most likely if you look 96 00:05:16,520 --> 00:05:19,400 Speaker 1: historically what sectors have done well during you know, more 97 00:05:19,920 --> 00:05:24,479 Speaker 1: inflation induced recessionary periods, it's usually been energy materials. So 98 00:05:24,560 --> 00:05:28,800 Speaker 1: you could see energy materials still in positive territory. Maybe not, 99 00:05:29,080 --> 00:05:31,040 Speaker 1: you know, by the end of the year, although energy 100 00:05:31,120 --> 00:05:32,680 Speaker 1: is up a lot still this year, but you can 101 00:05:32,720 --> 00:05:36,560 Speaker 1: still see, UM those two sectors performing reasonably well in 102 00:05:36,600 --> 00:05:40,800 Speaker 1: an inflation induced recession. UM At the other end of 103 00:05:40,800 --> 00:05:43,680 Speaker 1: the spectrum. You would hope that most likely financials would 104 00:05:43,720 --> 00:05:46,400 Speaker 1: do well on the increase in interest rates, which generally 105 00:05:46,440 --> 00:05:50,120 Speaker 1: have a positive effect on banks net interest margins, but 106 00:05:50,200 --> 00:05:51,960 Speaker 1: we haven't seen that as of yet. Part of the 107 00:05:51,960 --> 00:05:54,040 Speaker 1: reason is that long growth has been you know, pretty 108 00:05:54,120 --> 00:05:57,200 Speaker 1: much stubborn at about four percent for banks right now, 109 00:05:57,240 --> 00:05:59,360 Speaker 1: and it hasn't really grown that much. All right, Mike, 110 00:05:59,440 --> 00:06:03,200 Speaker 1: your rents box are playing five four baseball. There's six 111 00:06:03,200 --> 00:06:06,920 Speaker 1: games above five on there, but there's thirty games behind 112 00:06:06,960 --> 00:06:08,560 Speaker 1: my New York Yankees? What are you? What are the 113 00:06:08,560 --> 00:06:11,320 Speaker 1: folks in Boston thinking this year? We've got more? We've 114 00:06:11,320 --> 00:06:13,640 Speaker 1: got more right now. So Mo was on our side. 115 00:06:13,760 --> 00:06:16,080 Speaker 1: It's all I can tell you right now. So we've 116 00:06:16,120 --> 00:06:18,839 Speaker 1: been doing well to the last probably three weeks, and 117 00:06:18,880 --> 00:06:21,560 Speaker 1: hopefully that's the turn that we needed, much like we 118 00:06:21,600 --> 00:06:24,039 Speaker 1: saw basically at the end of last season. Quite frankly. 119 00:06:24,200 --> 00:06:27,760 Speaker 1: All right, see, you know, Mike's all over our Boston, uh, 120 00:06:27,880 --> 00:06:30,719 Speaker 1: you know, baseball stuff. Michael Laney, Director of Global Markets Research, 121 00:06:30,760 --> 00:06:33,600 Speaker 1: Boston Partners Global Investors. Is it still the case that 122 00:06:33,680 --> 00:06:38,479 Speaker 1: the Red Sox like um look all bearded and mustache 123 00:06:38,520 --> 00:06:41,080 Speaker 1: e while the New York Yankees have although one of 124 00:06:41,080 --> 00:06:43,600 Speaker 1: the Yankees has a mustache I noticed. I'm not sure 125 00:06:43,640 --> 00:06:46,000 Speaker 1: what's going on there, but I think that's an increasingly accepted. 126 00:06:46,040 --> 00:06:49,320 Speaker 1: Look around this office, more and more of our smartest, 127 00:06:49,360 --> 00:06:52,400 Speaker 1: you know, reporters and economists have you, no thank you. 128 00:06:57,640 --> 00:07:00,680 Speaker 1: June is Pride month and a month when we're focusing 129 00:07:00,880 --> 00:07:04,080 Speaker 1: on equality issues here at Bloomberg Today, are you bringing 130 00:07:04,160 --> 00:07:07,839 Speaker 1: Ronda Lanche Sharpe, founder and President at the Woman's Institute 131 00:07:07,880 --> 00:07:12,040 Speaker 1: for Science, Equity and Race, to discuss her recent Bloomberg 132 00:07:12,080 --> 00:07:16,560 Speaker 1: piece on increasing black economists in the workforce? Ron, thanks 133 00:07:16,600 --> 00:07:20,520 Speaker 1: so much for joining us here talk to us about again, uh, 134 00:07:21,080 --> 00:07:26,600 Speaker 1: the the economics business and the economics environment, uh and 135 00:07:26,760 --> 00:07:31,040 Speaker 1: trying to increase black economists in that workforce. And first 136 00:07:31,040 --> 00:07:34,600 Speaker 1: of all, thank you for having me. And before I 137 00:07:34,600 --> 00:07:36,560 Speaker 1: talk about that, I want to make sure that we're 138 00:07:36,640 --> 00:07:41,480 Speaker 1: clear on some definitions, because there are economists who are 139 00:07:41,480 --> 00:07:46,520 Speaker 1: economists by their job titled, but aren't pH d level economists. 140 00:07:46,840 --> 00:07:51,600 Speaker 1: And my article is focused on PhD level economists for 141 00:07:51,680 --> 00:07:54,800 Speaker 1: a couple of reasons. One, they are the folks who 142 00:07:54,960 --> 00:08:01,320 Speaker 1: educate undergraduates because econ departments primarily higher pH d economists. 143 00:08:01,320 --> 00:08:04,400 Speaker 1: So if indeed, you believe that if you see it, 144 00:08:04,560 --> 00:08:07,880 Speaker 1: you kind of achieve it. If you don't have faculty 145 00:08:08,000 --> 00:08:10,520 Speaker 1: members who are black, then you may not see it 146 00:08:10,560 --> 00:08:13,480 Speaker 1: as a as a possibility for you. And I'd also 147 00:08:13,640 --> 00:08:19,840 Speaker 1: like to acknowledge a black economist, Ronda Williams, who was 148 00:08:20,640 --> 00:08:23,360 Speaker 1: the first I think black economists that many of us 149 00:08:23,360 --> 00:08:26,160 Speaker 1: think about who did LBG t Q issues. And I 150 00:08:26,160 --> 00:08:30,360 Speaker 1: think Rhonda has been dead about twenty years. The International 151 00:08:30,400 --> 00:08:34,280 Speaker 1: Association for Feminist Economics gives a prize called Ronda Williams 152 00:08:34,280 --> 00:08:39,320 Speaker 1: Prize that is to acknowledge women feminist scholars who are 153 00:08:39,400 --> 00:08:43,439 Speaker 1: both activists and UM scholars. And so I just want 154 00:08:43,480 --> 00:08:47,280 Speaker 1: to make sure that we're clear about economists are those 155 00:08:47,280 --> 00:08:50,560 Speaker 1: with pH d s, not those whose job titles well, 156 00:08:50,600 --> 00:08:55,200 Speaker 1: and um, what I would consider incredibly important Rhonda is 157 00:08:56,080 --> 00:08:59,640 Speaker 1: UM students need to get a diversity of opinions, right 158 00:09:00,120 --> 00:09:04,480 Speaker 1: end viewpoints. And if all of their professors in e 159 00:09:04,679 --> 00:09:09,839 Speaker 1: con or in anything frankly are just white, then um, 160 00:09:09,840 --> 00:09:13,240 Speaker 1: they don't get that. They don't get to see another perspective, 161 00:09:13,280 --> 00:09:16,320 Speaker 1: and they could very well develop their own perspectives, of course, 162 00:09:17,000 --> 00:09:21,240 Speaker 1: but I would think it's key, especially to UM you 163 00:09:21,280 --> 00:09:26,760 Speaker 1: know better universities that pride themselves on giving a better 164 00:09:26,920 --> 00:09:30,640 Speaker 1: education to UH to provide students with that kind of 165 00:09:30,760 --> 00:09:36,599 Speaker 1: broad based education. So so I I agree and disagree. 166 00:09:36,880 --> 00:09:39,480 Speaker 1: And so the ways and I agree is that ideology, 167 00:09:39,559 --> 00:09:42,559 Speaker 1: the way that you think about problems are absolutely important, 168 00:09:42,920 --> 00:09:45,240 Speaker 1: and we want to have all of our students see 169 00:09:45,240 --> 00:09:48,640 Speaker 1: a diversity of that. I think where where I disagree 170 00:09:48,800 --> 00:09:52,040 Speaker 1: is the assumption that any one of a particular racial 171 00:09:52,080 --> 00:09:56,840 Speaker 1: group provides a particular perspective. So when I advocate to 172 00:09:57,000 --> 00:10:00,600 Speaker 1: have more black economists, and this is also a good 173 00:10:00,600 --> 00:10:03,560 Speaker 1: point for me, time for me to make this point, 174 00:10:03,920 --> 00:10:06,160 Speaker 1: and that some of the emails that I've received have 175 00:10:06,280 --> 00:10:09,040 Speaker 1: you know, talked about Asian economists, and that if you 176 00:10:09,120 --> 00:10:13,480 Speaker 1: look at the data for economists broadly, we are not 177 00:10:13,640 --> 00:10:19,280 Speaker 1: producing many economists who are American born or permanent residents 178 00:10:19,320 --> 00:10:23,280 Speaker 1: across any racial group. About six of economists at the 179 00:10:23,320 --> 00:10:26,360 Speaker 1: PhD level are those who are temporary residents. So we 180 00:10:26,440 --> 00:10:31,080 Speaker 1: do a great deal of I would say, exporting that education. 181 00:10:31,360 --> 00:10:33,760 Speaker 1: So so so I just want us to be be 182 00:10:34,080 --> 00:10:38,319 Speaker 1: cautious there that the reason that I want black economists 183 00:10:38,559 --> 00:10:42,360 Speaker 1: is partly because there is this thought that there's an ideology, 184 00:10:42,400 --> 00:10:44,280 Speaker 1: but I think we're the biggest difference is it's the 185 00:10:44,360 --> 00:10:49,520 Speaker 1: lived experiences that black economists bring um. And while some 186 00:10:49,640 --> 00:10:52,000 Speaker 1: of that can have some commonalities, if you're a low 187 00:10:52,040 --> 00:10:56,640 Speaker 1: income or first generation student, there will be some shared experiences. 188 00:10:56,840 --> 00:10:59,280 Speaker 1: One of the things that we know in America is 189 00:10:59,320 --> 00:11:02,440 Speaker 1: that people own assume that whites are poor. They don't 190 00:11:02,440 --> 00:11:05,640 Speaker 1: assume that Asians are poor. They assume that black and 191 00:11:05,720 --> 00:11:08,760 Speaker 1: Hispanics are more likely to be poor, because that's so 192 00:11:08,840 --> 00:11:11,280 Speaker 1: much of what we hear in the rhetoric. So it 193 00:11:11,400 --> 00:11:15,400 Speaker 1: is more about lived experiences to approach the problems. The 194 00:11:15,440 --> 00:11:19,400 Speaker 1: way that we're all trained is essentially the same. It 195 00:11:19,559 --> 00:11:22,400 Speaker 1: is our lived experience then may alter how we look 196 00:11:22,440 --> 00:11:25,520 Speaker 1: at a problem. So RANDI here at Bloomberg, we're all 197 00:11:25,559 --> 00:11:27,760 Speaker 1: about numbers, all about data. I wonder if you could 198 00:11:27,760 --> 00:11:30,319 Speaker 1: just kind of put in context the percentage of black 199 00:11:30,440 --> 00:11:33,520 Speaker 1: PhD economists that are out there, and maybe how that's 200 00:11:33,520 --> 00:11:35,720 Speaker 1: trended over the last few years and kind of where 201 00:11:35,760 --> 00:11:39,199 Speaker 1: you'd like to see it go. Um okay. So so 202 00:11:39,240 --> 00:11:42,640 Speaker 1: there's sort of two ways to sort of think about this. Generally, 203 00:11:42,920 --> 00:11:46,040 Speaker 1: when we talk about black economists, we are talking about 204 00:11:46,200 --> 00:11:50,880 Speaker 1: them who's producing any given year and that's about one percent. 205 00:11:51,040 --> 00:11:54,000 Speaker 1: We're talking black. In general, black men tend to get 206 00:11:54,080 --> 00:11:58,120 Speaker 1: the larger share of economics doctorates that are awarded than 207 00:11:58,280 --> 00:12:01,600 Speaker 1: black women. And again, when we're talking black here, we 208 00:12:01,679 --> 00:12:05,079 Speaker 1: are talking folks who are permanent residents or citizens. We're 209 00:12:05,120 --> 00:12:07,920 Speaker 1: not talking international students because they don't show up in 210 00:12:07,960 --> 00:12:12,720 Speaker 1: the data racially. They show up as temporary residents. UM. 211 00:12:12,760 --> 00:12:15,760 Speaker 1: When we think more broadly, I think our estimates show 212 00:12:15,880 --> 00:12:18,520 Speaker 1: that maybe they are about four about three to four 213 00:12:18,640 --> 00:12:24,240 Speaker 1: hundred black economists period who have doctorates UM and and 214 00:12:24,240 --> 00:12:26,880 Speaker 1: and so that's that's not very many. But it is 215 00:12:26,960 --> 00:12:30,400 Speaker 1: tough to really get a count on how many economists 216 00:12:30,400 --> 00:12:35,119 Speaker 1: there are out there, because, um, once you get your doctorate, 217 00:12:35,400 --> 00:12:38,000 Speaker 1: there really isn't a data set that then tracks you. 218 00:12:39,080 --> 00:12:42,079 Speaker 1: Meaning you could get your doctorate in economics and then 219 00:12:42,200 --> 00:12:44,360 Speaker 1: end up working at a bank or doing something that's 220 00:12:44,360 --> 00:12:48,960 Speaker 1: not that. But you could have gotten your doctorate outside 221 00:12:48,960 --> 00:12:51,720 Speaker 1: of the US. And then we know that often people 222 00:12:51,920 --> 00:12:54,440 Speaker 1: come to the US to get employment, so we wouldn't 223 00:12:54,480 --> 00:12:57,360 Speaker 1: have a record of those who we would look at 224 00:12:57,400 --> 00:12:59,720 Speaker 1: and you know, typically say that they are black who 225 00:12:59,800 --> 00:13:02,440 Speaker 1: have pH d's and economics. We don't have a way 226 00:13:02,480 --> 00:13:06,040 Speaker 1: to track. By the way, what is UM what is 227 00:13:06,080 --> 00:13:09,360 Speaker 1: keeping these numbers so low? I noticed in your story 228 00:13:09,440 --> 00:13:13,360 Speaker 1: that Howard is the only HBCU that has uh UM 229 00:13:13,440 --> 00:13:18,120 Speaker 1: doctorate program in economics, and I think it's a combination 230 00:13:18,200 --> 00:13:21,800 Speaker 1: of things. You're one if you have been reading the 231 00:13:21,840 --> 00:13:24,280 Speaker 1: news over probably the last five years. There was a 232 00:13:24,320 --> 00:13:27,560 Speaker 1: climate study done by the American Economics Association that just 233 00:13:27,640 --> 00:13:32,480 Speaker 1: talks about the hostility in in the profession. I think 234 00:13:32,559 --> 00:13:36,400 Speaker 1: that's one. I think that they're The second is people 235 00:13:36,480 --> 00:13:39,400 Speaker 1: don't know what economics is right, and so they often 236 00:13:39,400 --> 00:13:43,440 Speaker 1: get us confused with being a business major. I'd say 237 00:13:43,440 --> 00:13:45,920 Speaker 1: that those are the two, the hostility in the department 238 00:13:46,559 --> 00:13:50,560 Speaker 1: and then UM and the act the department specifically, but 239 00:13:50,640 --> 00:13:53,680 Speaker 1: in the profession, what's felt is hostility and that people 240 00:13:53,720 --> 00:13:56,480 Speaker 1: don't know what economics is, and so often what you'll 241 00:13:56,520 --> 00:14:00,240 Speaker 1: see is institutions that don't have business majors particul red 242 00:14:00,320 --> 00:14:04,280 Speaker 1: for undergrads. Students will study economics because they think that 243 00:14:04,280 --> 00:14:07,440 Speaker 1: that's business and they're just not the same UM. It 244 00:14:07,559 --> 00:14:10,760 Speaker 1: is difficult to get people to understand that what economists do. 245 00:14:11,120 --> 00:14:13,680 Speaker 1: It's really to think about how do we allocate scarce 246 00:14:13,760 --> 00:14:16,760 Speaker 1: resources and that's broadly defined, and then how do we 247 00:14:16,840 --> 00:14:21,280 Speaker 1: set up policies to incentivize particular behaviors. And if you 248 00:14:21,360 --> 00:14:24,720 Speaker 1: don't understand that's what economists do, it is very easy 249 00:14:24,760 --> 00:14:29,600 Speaker 1: to be dismissive of the need for economists and economic policies. 250 00:14:29,720 --> 00:14:32,360 Speaker 1: And as one email said to me, and then you 251 00:14:32,400 --> 00:14:36,640 Speaker 1: focus on the need for STEM and not economists without 252 00:14:36,680 --> 00:14:39,800 Speaker 1: recognizing that economists are going to set the policies that 253 00:14:39,880 --> 00:14:42,880 Speaker 1: incentivize the investment in step. All right, Ron, the great, 254 00:14:42,920 --> 00:14:44,720 Speaker 1: great stuff, Thank you so much for taking the time. 255 00:14:45,040 --> 00:14:48,080 Speaker 1: Ronda Vanche Sharp, founder and President of the Woman's Institute 256 00:14:48,080 --> 00:14:50,880 Speaker 1: for Science, Equity and Race, And I'm looking at our 257 00:14:50,960 --> 00:14:54,160 Speaker 1: very impressive CV. The good news is she spent time 258 00:14:54,160 --> 00:14:56,600 Speaker 1: at Duke. The bad news and she also spent time 259 00:14:56,640 --> 00:14:59,160 Speaker 1: at UNC Chapel Hill, so I guess they kind of 260 00:14:59,200 --> 00:15:01,920 Speaker 1: cancel each other. Are out. But the UH talking about 261 00:15:02,400 --> 00:15:07,840 Speaker 1: again increasing the number of black economists PhD level black 262 00:15:07,880 --> 00:15:11,160 Speaker 1: economists in there so they can be professors. Exactly right, 263 00:15:11,280 --> 00:15:18,280 Speaker 1: absolutely all right. As a good As a former investment banker, 264 00:15:18,360 --> 00:15:20,680 Speaker 1: I know a good fee when I see one, and 265 00:15:20,760 --> 00:15:23,800 Speaker 1: breaking a big company up into multiple literal pieces is 266 00:15:23,840 --> 00:15:27,560 Speaker 1: a darn good that's excited advisory fee. I'm not sure 267 00:15:27,560 --> 00:15:31,080 Speaker 1: if the Kellogg's news is anything more than that. Jen Bartasha, 268 00:15:31,120 --> 00:15:34,560 Speaker 1: senior equity Research Channel's Consumer Stables and Retail for Bloomberg Intelligence. 269 00:15:34,640 --> 00:15:37,760 Speaker 1: She joins, she follows this this industry, this company, Jen, 270 00:15:38,400 --> 00:15:42,320 Speaker 1: What is Kellogg's doing here? Are they really creating value? 271 00:15:42,320 --> 00:15:43,920 Speaker 1: Does this make sense to you what they're doing breaking 272 00:15:43,960 --> 00:15:47,440 Speaker 1: up the company? Yeah? So, thanks, Paul. When when I 273 00:15:47,480 --> 00:15:50,360 Speaker 1: look at this, there really is a value creation opportunity 274 00:15:50,360 --> 00:15:52,640 Speaker 1: when you talk about the snacking portion of the company 275 00:15:52,680 --> 00:15:54,840 Speaker 1: that will go forward. Um, if you just look at 276 00:15:54,880 --> 00:15:57,880 Speaker 1: how some of the peers in the snacking category are valued, 277 00:15:57,920 --> 00:16:00,560 Speaker 1: whether it's Mondeleze or Hershey, there is a premium to 278 00:16:00,600 --> 00:16:03,000 Speaker 1: where Kellogg currently trades, and so there is some value 279 00:16:03,040 --> 00:16:06,640 Speaker 1: creation opportunity there. UM less a little bit less um 280 00:16:06,880 --> 00:16:10,480 Speaker 1: enthusiastic about seeing the opportunity for an independent serial company 281 00:16:10,640 --> 00:16:15,000 Speaker 1: and an independent plant based company. So the independent plant 282 00:16:15,000 --> 00:16:17,600 Speaker 1: based company is that trying to get the beyond meat 283 00:16:17,680 --> 00:16:21,520 Speaker 1: type of multiple out there, Well, that would in theory 284 00:16:21,600 --> 00:16:23,320 Speaker 1: be be one of the things that they can achieve. 285 00:16:23,400 --> 00:16:26,080 Speaker 1: And and if the you know, the Kellogg says that 286 00:16:26,280 --> 00:16:30,000 Speaker 1: um that their plant based business is profitable, which would 287 00:16:30,040 --> 00:16:33,320 Speaker 1: be a certain certainly a differentiator in the plant based world, 288 00:16:33,360 --> 00:16:35,880 Speaker 1: and so could actually help command a pretty good premium 289 00:16:36,000 --> 00:16:39,800 Speaker 1: or multiple in in that in that space. Um. That 290 00:16:39,920 --> 00:16:42,280 Speaker 1: the real concern is is what happens to a serial 291 00:16:42,360 --> 00:16:46,960 Speaker 1: based company. What happens to any of these companies after 292 00:16:47,000 --> 00:16:50,000 Speaker 1: they split up? I mean, surely we've seen enough of 293 00:16:50,000 --> 00:16:54,760 Speaker 1: them to understand, uh, like a track record of these 294 00:16:54,840 --> 00:16:58,720 Speaker 1: kind of splits. Yeah, it's interesting if you look at 295 00:16:58,760 --> 00:17:01,680 Speaker 1: if you look back to Wayne craft Times and Mandols 296 00:17:01,760 --> 00:17:04,320 Speaker 1: broke up. Um. You know, Craft Times, it took them 297 00:17:04,359 --> 00:17:08,280 Speaker 1: decades to actually regain a positive momentum in their core business. Um. 298 00:17:08,359 --> 00:17:11,760 Speaker 1: And and that's really maybe one of the concerns that 299 00:17:11,800 --> 00:17:13,720 Speaker 1: you have when you look at the Kellogg companies is 300 00:17:13,760 --> 00:17:17,400 Speaker 1: whether that that higher growth snacking company takes off kind 301 00:17:17,400 --> 00:17:20,120 Speaker 1: of like Mandoles did, um, and then how how much 302 00:17:20,119 --> 00:17:22,880 Speaker 1: effort is it going to take to really get garner 303 00:17:23,000 --> 00:17:26,520 Speaker 1: the profit margin increases and then sales increases that they 304 00:17:26,520 --> 00:17:29,280 Speaker 1: think are possible for the serial company and then plant 305 00:17:29,280 --> 00:17:32,040 Speaker 1: based you know, it's it's it's a very volatile market, 306 00:17:32,119 --> 00:17:34,439 Speaker 1: so it's it's it's too early to tell where that 307 00:17:34,480 --> 00:17:38,240 Speaker 1: could go, all right, So Jen, you may not know this, 308 00:17:38,320 --> 00:17:41,280 Speaker 1: but I'm big, big into Cereal. Um, a big serial person. 309 00:17:41,320 --> 00:17:43,480 Speaker 1: It's one of the main reasons I work at Bloomberg. 310 00:17:43,480 --> 00:17:45,720 Speaker 1: I mean, we have a strong serial game here, not 311 00:17:45,800 --> 00:17:50,480 Speaker 1: as strong as in uh Princeton. They are big inside tip. Yeah, 312 00:17:50,520 --> 00:17:52,840 Speaker 1: they have even better serial selections if you go down 313 00:17:52,840 --> 00:17:55,280 Speaker 1: to L L two. Really yeah, okay, good to talk 314 00:17:55,320 --> 00:17:59,040 Speaker 1: to us about the serial business. Is it growing at all? Jen? Well, 315 00:17:59,080 --> 00:18:01,240 Speaker 1: the serial business is the last two or three years 316 00:18:01,280 --> 00:18:05,600 Speaker 1: has actually seen outside growth relative to its historical performance, 317 00:18:05,640 --> 00:18:08,240 Speaker 1: at least in the North American market. Um. If you 318 00:18:08,320 --> 00:18:11,280 Speaker 1: look over time, it's a it's a low single digit 319 00:18:11,320 --> 00:18:14,879 Speaker 1: growth category, so you're talking anywhere from one to three growth. 320 00:18:15,119 --> 00:18:18,240 Speaker 1: The pandemic really reinvigorated Cereal, brought a lot of people 321 00:18:18,280 --> 00:18:20,360 Speaker 1: back to Cereal, and a lot of people are still 322 00:18:20,400 --> 00:18:23,960 Speaker 1: eating breakfast at home. Um and because they're not necessarily 323 00:18:24,000 --> 00:18:27,240 Speaker 1: back in the office every day. Um. But it could 324 00:18:27,280 --> 00:18:30,600 Speaker 1: just be a temporary bolster that's happened to extend over 325 00:18:30,600 --> 00:18:33,320 Speaker 1: the period of two or three years before we start 326 00:18:33,359 --> 00:18:36,560 Speaker 1: to see that category start to contract again. All right, Jen, 327 00:18:36,720 --> 00:18:39,560 Speaker 1: great stuff. You know Bartasha, she's been a Bloomberg since 328 00:18:39,560 --> 00:18:42,760 Speaker 1: two thousand to twenty years. She's done everything and now 329 00:18:42,800 --> 00:18:45,320 Speaker 1: she's one of our top research analysts Bloomberg Intelligence. Or 330 00:18:45,359 --> 00:18:48,320 Speaker 1: appreciate getting her thoughts here on klox. Jen Bartasha, Senior 331 00:18:48,320 --> 00:18:56,399 Speaker 1: Eggity research channelists for Bloomberg Intelligence. You know, one of 332 00:18:56,440 --> 00:18:59,120 Speaker 1: the things this pandemic is the way folksed. I think 333 00:18:59,119 --> 00:19:00,800 Speaker 1: one of the things that changes the way folks interact 334 00:19:00,840 --> 00:19:04,480 Speaker 1: with healthcare. All this telehealth really really became front and 335 00:19:04,520 --> 00:19:06,680 Speaker 1: center for a lot more people, and just the way 336 00:19:06,720 --> 00:19:09,359 Speaker 1: we interact with the healthcarecteris is pretty interesting. Nita Deca, 337 00:19:09,400 --> 00:19:12,840 Speaker 1: senior Research Channels for Robot Global, joins us here. Nina, 338 00:19:13,080 --> 00:19:15,520 Speaker 1: you know, it's interesting. Thanks so much for joining us here. 339 00:19:15,560 --> 00:19:18,280 Speaker 1: Talk to us about maybe some of the ways it's 340 00:19:18,400 --> 00:19:22,560 Speaker 1: changed how consumers interact with, uh, you know, the health 341 00:19:22,600 --> 00:19:24,680 Speaker 1: care system. It seems like we're doing a lot more 342 00:19:25,080 --> 00:19:28,160 Speaker 1: on our own, a lot more remotely. Yeah, we are, 343 00:19:28,280 --> 00:19:29,760 Speaker 1: and thanks for having me on the show. By the way, 344 00:19:29,800 --> 00:19:33,399 Speaker 1: we appreciate it. Um. A couple of things really happened 345 00:19:33,400 --> 00:19:35,639 Speaker 1: as a result of the pandemic. We already knew and 346 00:19:35,680 --> 00:19:37,359 Speaker 1: we've been hearing about it a lot, but there's been 347 00:19:37,400 --> 00:19:41,000 Speaker 1: a skilled healthcare worker shortage that was definitely exacerbated by 348 00:19:41,000 --> 00:19:46,040 Speaker 1: the pandemic. And that's even driving UH from a consumer perspective, 349 00:19:46,800 --> 00:19:49,280 Speaker 1: people are having a hard time getting doctor appointments and 350 00:19:49,560 --> 00:19:52,640 Speaker 1: getting medical care. There's been like two three months wait 351 00:19:52,680 --> 00:19:55,160 Speaker 1: list to get in to see a cardiologist, for example, 352 00:19:55,760 --> 00:19:59,120 Speaker 1: or two to get knee surgery. So even though UM 353 00:19:59,600 --> 00:20:03,520 Speaker 1: largely the COVID beds aren't being occupied by hospitals causing delays, 354 00:20:03,840 --> 00:20:06,119 Speaker 1: the fact that there's just not enough staff is causing 355 00:20:06,119 --> 00:20:09,720 Speaker 1: delays UM. And then to your point, consumers are having 356 00:20:09,720 --> 00:20:12,080 Speaker 1: to do a lot of things on their own remote 357 00:20:12,160 --> 00:20:16,040 Speaker 1: care UM, and they're also looking for convenience. The world 358 00:20:16,040 --> 00:20:18,040 Speaker 1: got used to being able to see a doctor without 359 00:20:18,040 --> 00:20:21,399 Speaker 1: having to leave their house through telemedicine and UH. And 360 00:20:21,480 --> 00:20:23,720 Speaker 1: that's just one part of a huge theme that we're 361 00:20:23,720 --> 00:20:27,160 Speaker 1: going to see moving forward of virtual care, where people 362 00:20:27,160 --> 00:20:29,720 Speaker 1: are going to be able to wear wearable devices UM 363 00:20:29,840 --> 00:20:33,399 Speaker 1: like I Rhythm Ticker I RTC has a wearable device 364 00:20:33,520 --> 00:20:37,200 Speaker 1: that you can use to help diagnose um arrhythmia and 365 00:20:37,280 --> 00:20:41,119 Speaker 1: help prevent stroke and heart disease or and and and 366 00:20:41,240 --> 00:20:44,200 Speaker 1: cardiac failure. So UM, so there's gonna be a lot 367 00:20:44,200 --> 00:20:47,280 Speaker 1: more remote monitoring We're expecting people to start using more 368 00:20:47,320 --> 00:20:51,120 Speaker 1: continuous bluecost monitoring devices. That's going to be a huge 369 00:20:51,160 --> 00:20:55,360 Speaker 1: positive catalyst for dex Com and abb it um. So 370 00:20:55,600 --> 00:20:58,200 Speaker 1: a lot of more d I Y in healthcare and 371 00:20:58,359 --> 00:21:00,560 Speaker 1: UH and really an exciting time to be investing in 372 00:21:00,560 --> 00:21:03,520 Speaker 1: the space. Given the market pullback it is. I was 373 00:21:03,560 --> 00:21:05,560 Speaker 1: gonna say, it's even more exciting if you want to 374 00:21:05,560 --> 00:21:09,399 Speaker 1: buy at these levels. What happened to the stock? Uh, 375 00:21:09,440 --> 00:21:14,640 Speaker 1: you were trading at twelve, thirteen, fourteen, UM came down 376 00:21:14,680 --> 00:21:16,919 Speaker 1: to ten at the beginning of this year and then 377 00:21:16,960 --> 00:21:22,080 Speaker 1: all of a sudden, So we just want to get 378 00:21:22,080 --> 00:21:26,080 Speaker 1: it thoughts here just on the some of the differences, 379 00:21:26,119 --> 00:21:27,800 Speaker 1: we should clarify that I was looking at a different 380 00:21:27,840 --> 00:21:31,520 Speaker 1: I was looking at a different So I'm wondering, Uh, Nina, 381 00:21:31,800 --> 00:21:32,960 Speaker 1: is it going to go back the way it was? 382 00:21:33,000 --> 00:21:35,840 Speaker 1: Like one of the challenges, I guess is labor, Like 383 00:21:35,920 --> 00:21:39,280 Speaker 1: every other part of the economy has labor shortages. Is 384 00:21:39,280 --> 00:21:41,160 Speaker 1: that something that's endemic? Do you think to the health 385 00:21:41,160 --> 00:21:45,200 Speaker 1: care business going forward? It is a problem. And guess 386 00:21:45,200 --> 00:21:48,280 Speaker 1: what this means. Healthcare is one of the last sectors 387 00:21:48,320 --> 00:21:52,240 Speaker 1: to become digitized and automated, and there is a huge 388 00:21:52,280 --> 00:21:57,080 Speaker 1: opportunities for new technology to be acquired by healthcare stakeholders 389 00:21:57,080 --> 00:22:00,760 Speaker 1: to further automation. Look at sturgical addicts. You can do 390 00:22:00,840 --> 00:22:04,080 Speaker 1: more with less um All across labs, there have been 391 00:22:04,280 --> 00:22:08,840 Speaker 1: um acquisitions and rumors of acquisitions to acquire ways to 392 00:22:09,080 --> 00:22:13,000 Speaker 1: further automate in the labs. Pharmacies, there's a huge pharmacy shortage. 393 00:22:13,359 --> 00:22:16,240 Speaker 1: Pharmacists are leaving the work post, just like doctors, just 394 00:22:16,320 --> 00:22:19,840 Speaker 1: like nurses and uh and and why are pharmacists, these 395 00:22:19,880 --> 00:22:23,200 Speaker 1: people with extensive degrees in the back of the pharmacy 396 00:22:23,280 --> 00:22:26,720 Speaker 1: putting pills and bottles that is all automated and and 397 00:22:26,720 --> 00:22:29,640 Speaker 1: and there's a huge upside potential for companies who do that. 398 00:22:29,840 --> 00:22:33,080 Speaker 1: For example, Omni Cells ticker O m c L makes 399 00:22:33,200 --> 00:22:37,119 Speaker 1: robotics equipment for for pharmacists so that it frees up 400 00:22:37,119 --> 00:22:39,879 Speaker 1: their time and they can help with patient care. Did 401 00:22:39,960 --> 00:22:43,040 Speaker 1: you know that UM medical error is a third leading 402 00:22:43,040 --> 00:22:45,800 Speaker 1: cause of death in the US. So if you take that, 403 00:22:46,200 --> 00:22:48,600 Speaker 1: and then you compound that with the fact that the 404 00:22:48,760 --> 00:22:52,400 Speaker 1: population is aging, and you've got a healthcare worker shortage 405 00:22:52,440 --> 00:22:55,119 Speaker 1: that's gotten worse by the pandemic, and you've got a 406 00:22:55,160 --> 00:22:58,080 Speaker 1: situation where we're going to have even more medical errors, 407 00:22:58,119 --> 00:23:01,159 Speaker 1: So it really is time to invest more an automation 408 00:23:01,320 --> 00:23:04,719 Speaker 1: and AI capabilities so that healthcare workers can do what 409 00:23:04,760 --> 00:23:07,200 Speaker 1: they do best, which is actually care face to face 410 00:23:07,280 --> 00:23:10,760 Speaker 1: with their patients. Alright, sorry about the false stock quote. 411 00:23:10,800 --> 00:23:12,400 Speaker 1: I was having a senior moment and I might need 412 00:23:13,080 --> 00:23:18,000 Speaker 1: some medication, um in terms of investing, In terms of 413 00:23:18,040 --> 00:23:21,040 Speaker 1: the strategic moves that you make, do you like E 414 00:23:21,200 --> 00:23:25,680 Speaker 1: T S? Do you like active management over passive? Right now? 415 00:23:25,720 --> 00:23:29,680 Speaker 1: What do you think we're headed towards? Here's my recommendation. 416 00:23:29,720 --> 00:23:32,280 Speaker 1: If everything I just said is it sounds a little 417 00:23:32,359 --> 00:23:35,320 Speaker 1: daunting to an investor, let me tell you that that's 418 00:23:35,359 --> 00:23:37,800 Speaker 1: just a tiny fraction of all the investment opportunities that 419 00:23:37,880 --> 00:23:43,160 Speaker 1: are out there. There's regenerative medicine, there's telehealths robotics, there's diagnostics, genomics. 420 00:23:43,520 --> 00:23:46,680 Speaker 1: Uh yeah, I would recommend an ETS for example, R 421 00:23:46,760 --> 00:23:49,520 Speaker 1: E T H Tech E T S HT e C 422 00:23:50,920 --> 00:23:55,080 Speaker 1: Healthcare Technology and Innovation by Robo Global. And it's comprised 423 00:23:55,160 --> 00:23:58,479 Speaker 1: of a D plus companies that we picked with a 424 00:23:58,480 --> 00:24:01,240 Speaker 1: team of research channelists, so we do the legwork and 425 00:24:01,320 --> 00:24:04,480 Speaker 1: it's across that breadth of areas across health scare that 426 00:24:04,520 --> 00:24:07,440 Speaker 1: I just mentioned where you can really have the team 427 00:24:07,480 --> 00:24:09,960 Speaker 1: of experts day. These are the best in class companies 428 00:24:10,200 --> 00:24:12,400 Speaker 1: that are changing the face of healthcare over the next 429 00:24:12,440 --> 00:24:14,760 Speaker 1: five to ten years, and and it really kind of 430 00:24:14,760 --> 00:24:17,480 Speaker 1: alleviates the need for for the investor to have to 431 00:24:17,480 --> 00:24:20,000 Speaker 1: go through sector by sector and figure out where they 432 00:24:20,000 --> 00:24:22,000 Speaker 1: where they want to invest. Like, for example, there's a 433 00:24:22,000 --> 00:24:24,840 Speaker 1: company called Cattalent. A lot of investors haven't heard of 434 00:24:24,880 --> 00:24:28,200 Speaker 1: this name. Cattalent is one of the company's Maderna partnered 435 00:24:28,240 --> 00:24:31,679 Speaker 1: with to get their drugs manufactured, scaled and across the 436 00:24:31,680 --> 00:24:34,840 Speaker 1: finish line. And guess what Now that mrn A is 437 00:24:34,880 --> 00:24:40,560 Speaker 1: a proven, tested, tried therapy global, Cattalent is very well 438 00:24:40,600 --> 00:24:44,720 Speaker 1: positioned for all the other mRNA therapies to come because 439 00:24:44,760 --> 00:24:46,800 Speaker 1: they now they now know how to manufacture it and 440 00:24:46,840 --> 00:24:48,800 Speaker 1: sail it and get it out the door. And that's 441 00:24:48,840 --> 00:24:51,040 Speaker 1: just one example. So we've got a lot of those 442 00:24:51,320 --> 00:24:54,640 Speaker 1: really cool names we've got in the portfolio. At least 443 00:24:54,640 --> 00:24:59,080 Speaker 1: half the portfolio are these large cap, real steady moving 444 00:24:59,320 --> 00:25:03,280 Speaker 1: up kind of mid single high single digit growers. Um 445 00:25:03,560 --> 00:25:06,640 Speaker 1: some provide dividends, so you've got that stability in there 446 00:25:06,720 --> 00:25:10,720 Speaker 1: and then portfolio is like the small mid calf names 447 00:25:10,760 --> 00:25:14,240 Speaker 1: that a lot of people probably don't already own. Hey, Nina, 448 00:25:14,320 --> 00:25:16,800 Speaker 1: that's really interesting, good stuff. Really appreciate you taking the time. 449 00:25:16,880 --> 00:25:20,320 Speaker 1: Nina Deck, a senior research analyst for robo Global. I 450 00:25:20,400 --> 00:25:23,560 Speaker 1: first met the robot Global folks in Amsdam, which I 451 00:25:23,600 --> 00:25:26,919 Speaker 1: think was maybe was or is their headquarters. But they 452 00:25:27,000 --> 00:25:31,040 Speaker 1: are global investors. Before global was cool, I'm talking twenty 453 00:25:31,119 --> 00:25:33,040 Speaker 1: years ago, they were thinking about where do I invest 454 00:25:33,080 --> 00:25:35,679 Speaker 1: across the media space or the technology space on a 455 00:25:35,720 --> 00:25:37,640 Speaker 1: global basis, And that's kind of when I first got 456 00:25:37,920 --> 00:25:42,840 Speaker 1: meet those good folks at robo Global. Well, if in 457 00:25:42,880 --> 00:25:45,800 Speaker 1: the United States, if you want to buy I don't know, groceries, 458 00:25:45,880 --> 00:25:48,320 Speaker 1: household products, health supply, stuff like that, and you want 459 00:25:48,320 --> 00:25:50,919 Speaker 1: to do it in bulk, one of the companies you 460 00:25:50,920 --> 00:25:53,880 Speaker 1: can turn to is Boxed. It is a publicly traded 461 00:25:53,960 --> 00:25:56,159 Speaker 1: company bo x D as a ticker you can put 462 00:25:56,200 --> 00:25:59,040 Speaker 1: in your Bloomberg terminal. Che Hwang, CEO and co found 463 00:25:59,080 --> 00:26:01,240 Speaker 1: er Box joins the chay. Talk to us a little 464 00:26:01,240 --> 00:26:03,800 Speaker 1: bit about your company, kind of the origins of Boxed 465 00:26:03,840 --> 00:26:07,760 Speaker 1: and and and the market you guys are trying to serve. Yeah, absolutely, 466 00:26:07,760 --> 00:26:09,439 Speaker 1: Thanks for having me back. You know, it's been a 467 00:26:09,480 --> 00:26:12,440 Speaker 1: long ride for us about almost ten years now, uh, 468 00:26:12,480 --> 00:26:15,399 Speaker 1: culminating in our public debut last year. And so start 469 00:26:15,440 --> 00:26:18,680 Speaker 1: off in a garage ship in bolt consumables to folks 470 00:26:18,720 --> 00:26:21,280 Speaker 1: all around the country. But since then we've begun to 471 00:26:21,280 --> 00:26:23,800 Speaker 1: sell to business folks all around the country. So whether 472 00:26:23,840 --> 00:26:27,480 Speaker 1: it's office pantries, whether it's bus terminals, all the way 473 00:26:27,520 --> 00:26:30,760 Speaker 1: to actually selling the software that powers are e commerce business. 474 00:26:30,760 --> 00:26:33,359 Speaker 1: So we not only sell the uh goods, but also 475 00:26:33,400 --> 00:26:36,680 Speaker 1: sell the technology that power is that business for us? 476 00:26:36,720 --> 00:26:39,640 Speaker 1: So how difficult is that right now? With supply chain 477 00:26:39,720 --> 00:26:43,280 Speaker 1: issues with gas and diesel prices, I mean, your costs 478 00:26:43,359 --> 00:26:47,440 Speaker 1: must be skyrocketing, that's right, you know it's um. Uh, 479 00:26:47,480 --> 00:26:50,720 Speaker 1: there's definitely have been calmer waters throughout this last decade 480 00:26:50,720 --> 00:26:53,760 Speaker 1: of operating, that's for sure. UM. Luckily for us, you know, 481 00:26:53,800 --> 00:26:56,600 Speaker 1: we struck a really great extension, a really great kind 482 00:26:56,600 --> 00:27:00,199 Speaker 1: of enhanced partnership with Federal Express, so uh we may 483 00:27:00,240 --> 00:27:01,840 Speaker 1: be able to actually be one of the few companies 484 00:27:01,840 --> 00:27:04,960 Speaker 1: that blowers their transportation costs this year. But you're exactly right, 485 00:27:04,960 --> 00:27:09,640 Speaker 1: between labor, supply chain inflation, there's a lot of dynamics 486 00:27:09,640 --> 00:27:12,159 Speaker 1: in the marketplace right now, all right, So give us 487 00:27:12,200 --> 00:27:14,639 Speaker 1: a sense of kind of how who you compete against 488 00:27:14,840 --> 00:27:16,800 Speaker 1: day to day. There's so much I think what we've 489 00:27:16,840 --> 00:27:19,000 Speaker 1: all done, maybe over the past two and a half 490 00:27:19,080 --> 00:27:22,160 Speaker 1: years with the pandemic is really embraced e commerce, maybe 491 00:27:22,160 --> 00:27:24,200 Speaker 1: more than we ever thought we would, for a whole 492 00:27:24,240 --> 00:27:26,920 Speaker 1: different range of products. So talk to us about the 493 00:27:26,920 --> 00:27:30,920 Speaker 1: competitive environment you find yourself in. So, UM, what's interesting 494 00:27:31,000 --> 00:27:33,879 Speaker 1: is that a lot of our customers actually, as of 495 00:27:33,880 --> 00:27:36,600 Speaker 1: our last read, almost sevent of our customers live out 496 00:27:36,640 --> 00:27:39,520 Speaker 1: in rural America or live in the deep suburbs. Uh. 497 00:27:39,560 --> 00:27:42,239 Speaker 1: And so when you think about that customer, um, you know, 498 00:27:42,400 --> 00:27:46,080 Speaker 1: folks like Costco, Sam's Club, BJ's Wholesale Club. You know, 499 00:27:46,119 --> 00:27:49,360 Speaker 1: they're ubiquitous in name potentially, but not ubiquitous in location. 500 00:27:49,440 --> 00:27:51,520 Speaker 1: And so we service actually a lot of folks that 501 00:27:51,520 --> 00:27:53,919 Speaker 1: would otherwise go into a dollar store or the regular 502 00:27:53,960 --> 00:27:56,440 Speaker 1: supermarket two shops, so they really don't have that much 503 00:27:56,480 --> 00:27:59,040 Speaker 1: bulk available to them. On the B two B side, 504 00:27:59,040 --> 00:28:01,399 Speaker 1: of course, it's a typical kind of office depots W 505 00:28:01,560 --> 00:28:03,760 Speaker 1: Mason's of the world and some of the caters. And 506 00:28:03,800 --> 00:28:06,720 Speaker 1: on the software side, UM, you see us bumping against 507 00:28:07,040 --> 00:28:08,719 Speaker 1: a lot of the big kind of e commerce software 508 00:28:08,760 --> 00:28:12,440 Speaker 1: companies out there. So but you don't I mean Costco 509 00:28:12,600 --> 00:28:16,119 Speaker 1: and b JS these must be competitors as well. Or 510 00:28:16,160 --> 00:28:19,080 Speaker 1: is it the idea that they just don't deliver? Yeah, 511 00:28:19,119 --> 00:28:22,639 Speaker 1: so they've begun to deliver, especially in recent years. But 512 00:28:22,760 --> 00:28:25,080 Speaker 1: when you look at kind of the experience that they 513 00:28:25,240 --> 00:28:27,639 Speaker 1: really trying to push, uh, it's really trying to get 514 00:28:27,680 --> 00:28:30,719 Speaker 1: you in store. So a lot of folks, folks that 515 00:28:30,760 --> 00:28:33,359 Speaker 1: we've surveyed in the past, really when they kind of 516 00:28:33,720 --> 00:28:35,560 Speaker 1: um when you ask the manic gotal Lee kind of 517 00:28:35,760 --> 00:28:37,639 Speaker 1: why don't you have a costco membership? Why don't you 518 00:28:37,680 --> 00:28:40,400 Speaker 1: have a membership to a wholesale club? A lot just 519 00:28:40,480 --> 00:28:43,560 Speaker 1: aren't willing to uh pay for a membership just to 520 00:28:43,880 --> 00:28:45,880 Speaker 1: be able to get something delivered to them because remember, 521 00:28:45,880 --> 00:28:47,600 Speaker 1: they don't have a wayhouse club close to them, so 522 00:28:48,000 --> 00:28:51,120 Speaker 1: they'll buy a membership uh and just buy online. For 523 00:28:51,160 --> 00:28:52,880 Speaker 1: a lot of them, they just don't see the value 524 00:28:52,920 --> 00:28:55,840 Speaker 1: in that. So, Chack, give us a sense of kind 525 00:28:55,840 --> 00:28:59,280 Speaker 1: of your read on the consumer based upon your business 526 00:28:59,280 --> 00:29:01,360 Speaker 1: to transitioning your business, how do you think that the 527 00:29:01,400 --> 00:29:06,280 Speaker 1: consumers doing the economies doing from the consumer's perspective. You know, 528 00:29:06,320 --> 00:29:08,520 Speaker 1: if we had this conversation just a few months ago, 529 00:29:08,560 --> 00:29:11,440 Speaker 1: I would say probably a lot better. Um. But I 530 00:29:11,480 --> 00:29:14,240 Speaker 1: think luckily, what you generally find in retail is that 531 00:29:14,360 --> 00:29:16,920 Speaker 1: in kind of crazy environments that we're that that we're 532 00:29:17,080 --> 00:29:20,240 Speaker 1: now and that we're probably gonna go into even more 533 00:29:20,280 --> 00:29:22,360 Speaker 1: than the coming kind of weeks and months, um, you 534 00:29:22,400 --> 00:29:25,760 Speaker 1: really see consumers trade up or trade down, right, Um, 535 00:29:25,800 --> 00:29:28,920 Speaker 1: trade down. They can go into a hard discounters dollar stores, 536 00:29:29,600 --> 00:29:33,360 Speaker 1: trading down into kind of territory they otherwise wouldn't have, um, 537 00:29:33,640 --> 00:29:35,760 Speaker 1: kind of gone into or shopped in in in kind 538 00:29:35,760 --> 00:29:38,640 Speaker 1: of better times. Uh. But some consumers also trade up. 539 00:29:38,680 --> 00:29:40,400 Speaker 1: And I know it's self serving for us to say so, 540 00:29:40,480 --> 00:29:42,400 Speaker 1: but the numbers in the past have shown that in 541 00:29:42,440 --> 00:29:45,840 Speaker 1: recessionary environments, folks that with the wherewith all actually stock 542 00:29:45,960 --> 00:29:48,520 Speaker 1: up because they know they're gonna go through thirty six 543 00:29:48,600 --> 00:29:51,880 Speaker 1: cans of sparkling water a week and and so um, 544 00:29:51,960 --> 00:29:54,040 Speaker 1: they definitely want to stock up, and by doing so 545 00:29:54,160 --> 00:29:56,120 Speaker 1: they can save some money. So I think we're gonna 546 00:29:56,120 --> 00:29:58,880 Speaker 1: start to see some trading up and trading down across 547 00:29:58,880 --> 00:30:01,480 Speaker 1: the entire retail sector, especially when it comes to consumables. 548 00:30:01,600 --> 00:30:04,480 Speaker 1: I drink about that much sparkling water maybe a day. 549 00:30:04,520 --> 00:30:07,880 Speaker 1: Actually for me, I just knocked back those the polar 550 00:30:08,080 --> 00:30:11,880 Speaker 1: lime flavored Anyway, it's neither here nor there. In terms 551 00:30:11,880 --> 00:30:17,520 Speaker 1: of buying in bulk um, are you like using any 552 00:30:17,520 --> 00:30:19,920 Speaker 1: extra cash you have to buy your own shares? I 553 00:30:19,960 --> 00:30:24,120 Speaker 1: mean they've dropped to a dollar forty six UM and 554 00:30:24,160 --> 00:30:27,600 Speaker 1: you have been trading around ten twelve fourteen dollars apiece. 555 00:30:28,160 --> 00:30:33,480 Speaker 1: So do you see your shares as undervalued? I personally 556 00:30:33,520 --> 00:30:37,040 Speaker 1: absolutely do. So you're exactly right. We were just probably 557 00:30:37,080 --> 00:30:39,280 Speaker 1: a few weeks ago, one of the best public debuts 558 00:30:39,280 --> 00:30:42,440 Speaker 1: in the entire country for uh and then to have 559 00:30:42,600 --> 00:30:46,120 Speaker 1: kind of no news come out, absent kind of an 560 00:30:46,240 --> 00:30:49,360 Speaker 1: errings release for this to happen. We just believe it's 561 00:30:49,360 --> 00:30:52,760 Speaker 1: a severe dislocation of kind of what the value of 562 00:30:52,800 --> 00:30:54,680 Speaker 1: the company is and what is actually valued in the 563 00:30:54,720 --> 00:30:58,280 Speaker 1: marketplace today. UM. But you know, I think actions speak 564 00:30:58,320 --> 00:31:02,080 Speaker 1: louder than words. So we've had separate directors file form 565 00:31:02,160 --> 00:31:04,640 Speaker 1: force making buys in the marketplace, and actually I just 566 00:31:04,680 --> 00:31:08,440 Speaker 1: bought more shares UM just this past week. So you know, 567 00:31:08,480 --> 00:31:10,400 Speaker 1: one of the things we've noticed in the market, uh 568 00:31:10,600 --> 00:31:13,120 Speaker 1: Shaw when we talk to fund managers and so on 569 00:31:13,160 --> 00:31:15,840 Speaker 1: as the you know, trying to in this market so 570 00:31:15,840 --> 00:31:19,120 Speaker 1: far in two is a refocus on kind of the fundamentals. 571 00:31:19,160 --> 00:31:20,600 Speaker 1: And it's one thing to have a great top line 572 00:31:20,600 --> 00:31:23,200 Speaker 1: growth story, which you guys certainly do, but you have 573 00:31:23,240 --> 00:31:24,960 Speaker 1: to deliver that to the bottom line. And I'm just 574 00:31:25,000 --> 00:31:26,960 Speaker 1: looking at the f A functional on the Bloomberg terminal, 575 00:31:26,960 --> 00:31:29,480 Speaker 1: looks like the streets still has you negative free cash 576 00:31:29,480 --> 00:31:32,000 Speaker 1: flow for the next couple of years, and so how 577 00:31:32,040 --> 00:31:34,880 Speaker 1: do you think about your free cash flow, your capital structure, 578 00:31:34,880 --> 00:31:38,160 Speaker 1: and your ability to continue to grow the business. Yeah, 579 00:31:38,200 --> 00:31:40,440 Speaker 1: you know, it's really a balance of all those, right. 580 00:31:40,520 --> 00:31:44,480 Speaker 1: I think when kind of times were were different, you know, 581 00:31:44,520 --> 00:31:46,160 Speaker 1: we were on this trajectory and if you look at 582 00:31:46,160 --> 00:31:49,160 Speaker 1: our growth margin, you look at a kind of ibada growth. 583 00:31:49,400 --> 00:31:51,720 Speaker 1: We were marching towards this path each and every year. 584 00:31:51,800 --> 00:31:54,760 Speaker 1: We basically be in been in business, um, but we 585 00:31:54,840 --> 00:31:57,080 Speaker 1: have to adapt to the marketplace as well. So our 586 00:31:57,160 --> 00:32:00,000 Speaker 1: B two B business, our software business, those are all 587 00:32:00,520 --> 00:32:03,520 Speaker 1: much higher gross margin businesses than our B two C 588 00:32:03,680 --> 00:32:06,280 Speaker 1: consumer business. So if you just look at software, we 589 00:32:06,360 --> 00:32:08,600 Speaker 1: sold twenty million dollars of software last year at a 590 00:32:09,840 --> 00:32:12,760 Speaker 1: gross margins, So for us really kind of seeing how 591 00:32:12,840 --> 00:32:15,080 Speaker 1: the market dynamics are in the coming weeks and really 592 00:32:15,080 --> 00:32:19,480 Speaker 1: refocusing our efforts. Um if uh, kind of there's low 593 00:32:19,520 --> 00:32:22,920 Speaker 1: tide when it comes to capital availability and overall market sentiment. 594 00:32:23,040 --> 00:32:26,000 Speaker 1: So luckily we have all these different business segments, some 595 00:32:26,040 --> 00:32:28,240 Speaker 1: more profitable than others, and you'll see some focus on 596 00:32:28,280 --> 00:32:31,480 Speaker 1: those in the coming weeks. Okay, what's it like operating, 597 00:32:31,640 --> 00:32:34,520 Speaker 1: uh startup company or a new company? I get guess 598 00:32:34,560 --> 00:32:36,520 Speaker 1: you're publicly traded, it's not really start up, but in 599 00:32:36,560 --> 00:32:39,640 Speaker 1: New York City as opposed to the West Coast. Um, 600 00:32:40,120 --> 00:32:42,320 Speaker 1: you know, beck about ten years ago. You know, it's 601 00:32:42,360 --> 00:32:44,200 Speaker 1: kind of ten fifteen years ago. When I first gott 602 00:32:44,200 --> 00:32:45,480 Speaker 1: into tech in New York City, it was kind of 603 00:32:45,480 --> 00:32:48,120 Speaker 1: a waste land like meaning that you know, there weren't 604 00:32:48,120 --> 00:32:50,560 Speaker 1: a lot of folks writing checks, like everyone kind of 605 00:32:50,640 --> 00:32:53,440 Speaker 1: knew each other. But man, it's it's gotten much better, 606 00:32:53,480 --> 00:32:55,720 Speaker 1: I would say, over the last few years. Still not 607 00:32:55,880 --> 00:32:58,000 Speaker 1: the same, not the same as the West Coast, but 608 00:32:58,320 --> 00:33:00,400 Speaker 1: definitely a lot better when it comes to the eco system. 609 00:33:00,480 --> 00:33:03,240 Speaker 1: So um, you know, I'll take it. But overall, you know, 610 00:33:03,320 --> 00:33:06,920 Speaker 1: between supply chain challenges, going public in this market, it's 611 00:33:06,960 --> 00:33:09,040 Speaker 1: been a fun ride. We're learning a ton and we're 612 00:33:09,040 --> 00:33:11,080 Speaker 1: still focused on the future, so we're quite bullish on 613 00:33:11,120 --> 00:33:13,760 Speaker 1: the company. All right, Check, Thanks so much for joining us. 614 00:33:13,800 --> 00:33:16,720 Speaker 1: Appreciate getting your thoughts there. Che Hwang, CEO and co 615 00:33:16,800 --> 00:33:19,120 Speaker 1: founder of Boxed. That is a New York Stock Change 616 00:33:19,200 --> 00:33:23,120 Speaker 1: listed stock. B o x D is the tim ticker 617 00:33:23,440 --> 00:33:26,600 Speaker 1: for your Bloomberg terminal shipping stuff like groceries. Think about 618 00:33:26,640 --> 00:33:31,280 Speaker 1: that uh in bulk. Thanks for listening to the Bloomberg 619 00:33:31,320 --> 00:33:34,720 Speaker 1: Markets podcast. You can subscribe and listen to interviews with 620 00:33:34,800 --> 00:33:39,560 Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. 621 00:33:39,840 --> 00:33:43,720 Speaker 1: I'm on Twitter at Matt Miller three pt on Ball 622 00:33:43,760 --> 00:33:46,640 Speaker 1: Sweeney I'm on Twitter at pt Sweeney. Before the podcast, 623 00:33:46,680 --> 00:33:49,440 Speaker 1: you can always catch us worldwide at Bloomberg Radio.