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Speaker 1: Let's get to Kim Forest, our guest for the half hour.

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Speaker 1: Kim is founder also the c i O at Boca

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Speaker 1: Capital Partners from Pittsburgh, Pennsylvania. Kim, it's always a pleasure.

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Speaker 1: Thanks for being with us. A lot to be nervous

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Speaker 1: about in markets, particularly in an environment where the Fed

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Speaker 1: continues to talk about tightening. Raphael Bostick on the conservative side,

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Speaker 1: maybe a little more dubbish is expecting an additional hundred

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Speaker 1: basis points. Maybe we've got another hundred and fifty or so.

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Speaker 1: If you're an equity investor, how do you play this? Well? Um,

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Speaker 1: the way I always play things is look out further

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Speaker 1: in time than a year. A year's kind of arbitrary

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Speaker 1: and anything can happen, and that's just it. We don't

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Speaker 1: know what is going to happen. So if you're looking

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Speaker 1: out three to five years from now, you can make

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Speaker 1: some decisions about what should be in your portfolio and

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Speaker 1: what all things being considered should grow during that time.

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Speaker 1: And um, I think that's a better way to do

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Speaker 1: it than shorter time periods. And you know, time periods

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Speaker 1: less than a year, that's just crazy, all right, So

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Speaker 1: give me some We'll give me some examples of things

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Speaker 1: that will grow over the longer term. I mean, is

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Speaker 1: technology on that list. Technology is really high on that list,

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Speaker 1: but it's probably not the technology that you are thinking

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Speaker 1: of when you say that word. Right now, we in

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Speaker 1: the last i don't know, maybe fifteen years, have gotten

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Speaker 1: used to technology being four consumers and I have. While

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Speaker 1: I have followed it, I have not really invested heavily

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Speaker 1: in it because consumers are capricious. The best kind of

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Speaker 1: technology enables businesses to be more productive. And that's what

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Speaker 1: I'm kind of positing out here is that you should

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Speaker 1: look for that sort of investment and you're going to

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Speaker 1: pay off, or it should pay off because well, it's

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Speaker 1: worth it, and um, making people. Making employees more productive

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Speaker 1: is something that companies are looking to do, especially now

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Speaker 1: with wage inflation. So what it is. There's a company

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Speaker 1: like Amazon that is obviously consumer facing a lot of

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Speaker 1: the business e commerce related, but there are cloud business

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Speaker 1: caters to the corporate client, and there's a situation where

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Speaker 1: they're serving both markets. Do you just have to be

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Speaker 1: exposed to Amazon just for the cloud side in and

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Speaker 1: of itself. Well, I'd say there's a better way to

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Speaker 1: do that, because you know, the consumer side is so

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Speaker 1: heavily weighted in the revenue and yet very little in

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Speaker 1: the earnings part of the equation that is Amazon, and

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Speaker 1: I warn you away from that. So looking at a

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Speaker 1: company like Microsoft might be a better bet. While they

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Speaker 1: have some consumer um uh products like Xbox, most of

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Speaker 1: their revenue comes from the stuff that we used to

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Speaker 1: be productive, and that would be office and exchange and

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Speaker 1: that sort of thing. And I think it's a pretty

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Speaker 1: good bet that Microsoft, while they probably will continue on

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Speaker 1: with Xbox, most of their money and most of their

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Speaker 1: effort is trying to make companies more productive. So if

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Speaker 1: you buy into this factory of the future idea right um,

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Speaker 1: the dark factory, I guess is another term for it,

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Speaker 1: where we're going to get automation and robotics to such

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Speaker 1: an extent is that people are going to virtually be

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Speaker 1: absent from the from the shop floor. I mean, is

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Speaker 1: that a play that you're investing in right now? Um,

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Speaker 1: indirectly because you don't really know when something like that

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Speaker 1: is actually going to hit a lot of times an

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Speaker 1: idea will captivate investors, they'll like pile into it, and

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Speaker 1: then it won't pay off in the desired time. Frame

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Speaker 1: and then they kind of leave it for dead and

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Speaker 1: lo and behold. You know, sometime in the future, you know,

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Speaker 1: you have that dark that dark floor or whatever you

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Speaker 1: called it. So I think the best way to do

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Speaker 1: that is to look at semiconductors that might play in

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Speaker 1: that area. UM Now, the thing that we know is

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Speaker 1: that technology gives us pretty activity. We don't know what

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Speaker 1: software is going to do it, but we do know

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Speaker 1: it's delivered on a chip. And looking at the state

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Speaker 1: of the world, although we do have a surplus of

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Speaker 1: chips that for whatever reason or you know, clogging up

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Speaker 1: the supply demand UM pricing scenario of chips, that is

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Speaker 1: going to be short lived because we are going to

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Speaker 1: use these things to make companies and people more productive.

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Speaker 1: So that's it in a nutshell. So semiconductors, really that's

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Speaker 1: a pretty broad category. Their memory chips. There are different

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Speaker 1: types of micro processors. They're the graphics card chips that

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Speaker 1: in video manufacturers. There's some of the smaller chips that

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Speaker 1: are used in mobile phones. Is there a segment of

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Speaker 1: the semiconductor market that you're favoring right now? Well, right now,

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Speaker 1: we kind of like um Intel for the reason that

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Speaker 1: you kind of snuck in there is that they're building

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Speaker 1: more fabs. And the reason why we like Intel and

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Speaker 1: I understand its problems and its culture slip up and

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Speaker 1: you know how far behind it is um its main competitor,

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Speaker 1: Taiwan Semi, but we believe that the company still has

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Speaker 1: some good assets in there, and moreover, they are moving

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Speaker 1: more towards the US rather than building on Taiwan, and

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Speaker 1: I think that's going to be um what a lot

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Speaker 1: of chip designers, which in video and a m D

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Speaker 1: are more chip designers than makers because they don't have

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Speaker 1: their own fab plants. And we believe that um Intel

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Speaker 1: has a good shot at getting some of uh Taiwan

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Speaker 1: Semi business if it can come back up and you know,

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Speaker 1: revamp its technology and catch up, and we think they can.

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Speaker 1: We were just talking in the last half hour about

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Speaker 1: some of the benefits of the US Inflation Reduction Act

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Speaker 1: as it relates to green energy. The f T had

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Speaker 1: an interesting piece talking about well it was actually an

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Speaker 1: interview with the head of Bristol Myers Squib that the

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Speaker 1: company is going to likely cancel some of its drug

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Speaker 1: development programs beginning next year because of new pricing rules

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Speaker 1: that allow the government a more flexibility to determine how

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Speaker 1: much the government will pay for for prescription drugs. That's

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Speaker 1: a part of the Inflation Reduction Act. When you consider

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Speaker 1: politics and you consider the fact now that the House

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Speaker 1: of Representatives is going to be controlled by Republicans, does

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Speaker 1: it change you're thinking on how to put money to work?

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Speaker 1: Not really even the Inflation Reduction Act that chip manufacturers

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Speaker 1: are going to benefit from, that that's kind of a

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Speaker 1: short term blip. And actually and tell how to strategic

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Speaker 1: relationship or built a strategic relationship with a company called

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Speaker 1: brooke Field Asset Management, and they are going to supply

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Speaker 1: you know, some debt to and tell so companies can

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Speaker 1: work around that. The whole Uh, whether or not pharmaceutical

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Speaker 1: companies are going to go on and do their drug development,

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Speaker 1: I mean, that is a that's an issue, but um,

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Speaker 1: you know, it's kind of up to them about what

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Speaker 1: kind of company they want to be. And uh, we'll

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Speaker 1: see if that really impacts the whole industry or if

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Speaker 1: it's just going to be a handful of larger companies

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Speaker 1: that really kind of outsourced drug development to the biotechs. Anyhow,

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Speaker 1: are you tapped into the market for some of the

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Speaker 1: Newark Technologies. When I think of Pittsburgh, I think of

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Speaker 1: Carnegie Mellon. I think of the robotics lab there. I

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Speaker 1: think that lift for a while. It may still be

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Speaker 1: the case was using Pittsburgh as a testing ground for

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Speaker 1: autonomous vehicles. Talk to me a little bit, very quickly, Kim,

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Speaker 1: about what you're observing where you are in Pittsburgh. Sure, well,

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Speaker 1: we just had actually Uber was there, and then a

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Speaker 1: company called Argo, which was funded by and noticed there

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Speaker 1: was right, was funded by Ford and VW. And they

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Speaker 1: just closed up shop a couple of weeks ago. And

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Speaker 1: this is absolutely shocking to me on a couple of fronts.

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Speaker 1: But the most shocking is that the company just went

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Speaker 1: out of business, as opposed to trying to sell some

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Speaker 1: of the stuff they developed. Although I've not been a

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Speaker 1: believer in truly autonomous cars in the next five years,

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Speaker 1: with that was what everybody was saying. There's still a

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Speaker 1: lot of systems that they've developed and monetize. So this

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Speaker 1: has been shocking. I think this is a short term

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Speaker 1: um problem, but we'll see what happens. Okay, Kim, good stuff.

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Speaker 1: Thank you for being with us. Kim Forest of Boca

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Speaker 1: Capital Partners, this is Bloomberg,