1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day, we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,520 --> 00:00:15,600 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,600 --> 00:00:18,439 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:23,239 Speaker 1: at Bloomberg dot com slash podcast. The consumer, despite this 7 00:00:23,400 --> 00:00:25,800 Speaker 1: rampant inflation that's hitting all of us, whether the gas 8 00:00:25,840 --> 00:00:29,280 Speaker 1: pumper in the supermarket, the consumers kind of hanging in there, 9 00:00:29,320 --> 00:00:31,320 Speaker 1: you know. I mean, we got some retail sales today 10 00:00:31,560 --> 00:00:33,120 Speaker 1: kind of came in a little bit better than expect 11 00:00:33,200 --> 00:00:35,440 Speaker 1: to look. Under the hood, there's definitely some concern there, 12 00:00:35,479 --> 00:00:37,720 Speaker 1: but you know, the headline number was pretty decent. I 13 00:00:37,760 --> 00:00:40,600 Speaker 1: want to break it down with Angie Solanki, National director 14 00:00:40,600 --> 00:00:44,080 Speaker 1: of Retail Services in the United States for Colliers. Colliers 15 00:00:44,280 --> 00:00:48,479 Speaker 1: is a publicly traded company uh NASDACS c I G 16 00:00:48,720 --> 00:00:51,040 Speaker 1: I is a took her to put into your Bloomberg 17 00:00:51,120 --> 00:00:55,080 Speaker 1: terminal and you what you make of the August retail 18 00:00:55,360 --> 00:00:59,279 Speaker 1: sales numbers. It was great to see that we had, 19 00:00:59,360 --> 00:01:01,600 Speaker 1: even though it was a slight rise, that there is 20 00:01:01,640 --> 00:01:05,640 Speaker 1: still confidence. Uh spend is still occurring, but it's occurring 21 00:01:06,440 --> 00:01:10,600 Speaker 1: more so where they're focused on value oriented because there's 22 00:01:10,640 --> 00:01:14,720 Speaker 1: still the inconsistency. Right there may be still a little 23 00:01:15,240 --> 00:01:20,119 Speaker 1: bit of concern as we see inflation still continuing to occur, 24 00:01:20,720 --> 00:01:24,280 Speaker 1: but overall there's still some confidence. I think retailers were 25 00:01:24,840 --> 00:01:30,880 Speaker 1: pleasantly surprised. So the headline number onto was again of 26 00:01:30,959 --> 00:01:34,720 Speaker 1: three tenths of one per cent, and I'm wondering what 27 00:01:34,840 --> 00:01:37,360 Speaker 1: that looks like when you adjusted for inflation, because these 28 00:01:37,440 --> 00:01:41,679 Speaker 1: numbers are not adjusted for inflation, right, correct? Correct? Um, 29 00:01:41,800 --> 00:01:44,120 Speaker 1: They definitely are not. I think that what we should 30 00:01:44,160 --> 00:01:46,679 Speaker 1: look at is if we look at, you know, the 31 00:01:46,760 --> 00:01:50,880 Speaker 1: last time we've seen inflation hit as as high as 32 00:01:50,920 --> 00:01:54,640 Speaker 1: it is right now this year, it was many many 33 00:01:54,680 --> 00:01:57,680 Speaker 1: moons ago. So yes, it's hurting us in terms of 34 00:01:57,680 --> 00:02:02,040 Speaker 1: the pocketbook, but overall, the drag we're seeing is still 35 00:02:02,240 --> 00:02:06,240 Speaker 1: isn't it's it's not as significant. People still understand that 36 00:02:06,320 --> 00:02:09,760 Speaker 1: there's an increase that they need to be mindful, um, 37 00:02:09,800 --> 00:02:12,079 Speaker 1: but they're still you know, they still need to look 38 00:02:12,120 --> 00:02:17,120 Speaker 1: at staple products, groceres spend um we're seeing from retailers 39 00:02:17,200 --> 00:02:21,920 Speaker 1: right now, though, is this really interesting kind of juxtaposition 40 00:02:22,040 --> 00:02:25,679 Speaker 1: in terms of they are starting to push out more 41 00:02:25,840 --> 00:02:29,320 Speaker 1: private labeled brands. So they're they're pushing out their more 42 00:02:29,400 --> 00:02:36,480 Speaker 1: their own brands and other brands good stuff. So it's September, 43 00:02:37,240 --> 00:02:41,400 Speaker 1: but I know retailers they're thinking holiday season already. UM, 44 00:02:41,480 --> 00:02:43,320 Speaker 1: what's the expectation when you talk to some of the 45 00:02:43,320 --> 00:02:49,000 Speaker 1: retailers out there about how this holiday season may shape up. Well, 46 00:02:49,040 --> 00:02:51,639 Speaker 1: there's still quite a bit of product in inventory out there, 47 00:02:51,800 --> 00:02:55,160 Speaker 1: so you know, the concern right now is how much 48 00:02:55,320 --> 00:03:00,000 Speaker 1: discounting really is required, So retailers are preparing for that. Um, 49 00:03:00,040 --> 00:03:02,840 Speaker 1: it's still going to be, you know, a fairly busy 50 00:03:03,000 --> 00:03:06,400 Speaker 1: holiday season. If they start to discount the product to 51 00:03:06,639 --> 00:03:10,960 Speaker 1: lure you know, the inflation worried shopper in UM, that 52 00:03:11,040 --> 00:03:15,200 Speaker 1: will start to show spend an increase in spend. But 53 00:03:15,240 --> 00:03:17,320 Speaker 1: I think it's really more that there's a quite a 54 00:03:17,320 --> 00:03:21,120 Speaker 1: bit of inventory be concerns still around discounting. You know, 55 00:03:21,160 --> 00:03:24,919 Speaker 1: this is the first holiday season that we're seeing where 56 00:03:24,919 --> 00:03:27,760 Speaker 1: consumers are going to most likely slow down due to 57 00:03:27,760 --> 00:03:31,360 Speaker 1: the high inflation UM in many many years. So we 58 00:03:31,400 --> 00:03:34,399 Speaker 1: don't really have any learnings from this since it's been 59 00:03:34,480 --> 00:03:38,880 Speaker 1: so long. UM, there's been talk about third party sellers 60 00:03:38,920 --> 00:03:42,720 Speaker 1: over at Amazon looking to potentially cut prices even further 61 00:03:42,920 --> 00:03:45,920 Speaker 1: to move these you know, this inventory that they're sitting on, 62 00:03:46,080 --> 00:03:49,240 Speaker 1: So that will be interesting for us to watch. In 63 00:03:49,360 --> 00:03:52,880 Speaker 1: terms of the gasoline component, we've seen prices at the 64 00:03:52,880 --> 00:03:56,760 Speaker 1: pump come down. Paul checks the regular unloaded up gas 65 00:03:56,800 --> 00:04:02,320 Speaker 1: average every day, um, and you know, the sales figures 66 00:04:02,320 --> 00:04:06,120 Speaker 1: excluding gas we're up zero eight percent, So I'm pretty strong. 67 00:04:06,280 --> 00:04:11,320 Speaker 1: Do you see people taking the savings essentially that they're 68 00:04:11,320 --> 00:04:16,279 Speaker 1: getting from the drop in pump prices and putting it elsewhere? Yeah. Actually, 69 00:04:16,440 --> 00:04:20,159 Speaker 1: we're seeing, um, you know, roughly a one percent rise 70 00:04:20,360 --> 00:04:23,560 Speaker 1: in spend at restaurants and bars. And this was in 71 00:04:23,640 --> 00:04:26,560 Speaker 1: the month of August. So even though food costs have 72 00:04:26,720 --> 00:04:29,160 Speaker 1: you know, have been hit pretty hard, you know, there's 73 00:04:29,240 --> 00:04:33,200 Speaker 1: still this you know, need to go out to be 74 00:04:33,360 --> 00:04:37,120 Speaker 1: out socialized. So it's a small percentage increase, but I 75 00:04:37,240 --> 00:04:39,679 Speaker 1: think people are saying, hey, if I'm going to spend 76 00:04:40,240 --> 00:04:42,120 Speaker 1: you know, call it a hundred and fifty dollars for 77 00:04:42,400 --> 00:04:46,080 Speaker 1: a meal for two people at home groceries I have 78 00:04:46,240 --> 00:04:47,960 Speaker 1: to buy, then I have to cook, and then I 79 00:04:48,040 --> 00:04:50,200 Speaker 1: have to clean. Why not just go out and have 80 00:04:50,279 --> 00:04:53,919 Speaker 1: a little fun. So, Um, I think that people are 81 00:04:54,000 --> 00:04:57,720 Speaker 1: really thinking where should they spend their time and if 82 00:04:57,800 --> 00:05:02,120 Speaker 1: it's a cost versus time versus value there they're spending 83 00:05:02,160 --> 00:05:05,039 Speaker 1: it in the restaurants, which is great for for definitely 84 00:05:05,120 --> 00:05:09,119 Speaker 1: our our restaurants and bars. Well, my household, I clean. 85 00:05:09,480 --> 00:05:11,760 Speaker 1: I'm the cleaner guy. I take care of it. Yet 86 00:05:11,880 --> 00:05:13,840 Speaker 1: I love doing that. Just leave me alone in the kitchen, 87 00:05:14,320 --> 00:05:18,120 Speaker 1: glass of wine. I'll clean up all day long. So, Angie, 88 00:05:18,480 --> 00:05:20,799 Speaker 1: and you're going out and spending money at restaurants and bars, 89 00:05:20,960 --> 00:05:23,480 Speaker 1: I am absolutely that that that's kind of my thing, Angie. Um, 90 00:05:24,200 --> 00:05:26,400 Speaker 1: for these retailers, can they are they gonna have enough 91 00:05:26,480 --> 00:05:28,560 Speaker 1: labor here for this holiday season? It just seems to 92 00:05:28,640 --> 00:05:33,560 Speaker 1: be a persistent problem across many industries. Yes, that is 93 00:05:33,720 --> 00:05:37,160 Speaker 1: the one worry, right, um, because you're it's a combination 94 00:05:37,480 --> 00:05:42,520 Speaker 1: of just resources human resources people. Um. But the second 95 00:05:42,600 --> 00:05:46,480 Speaker 1: piece of this, right is the uh, the cost. So 96 00:05:47,400 --> 00:05:50,720 Speaker 1: wages continue to be a concern for many retailers. Um, 97 00:05:51,080 --> 00:05:55,040 Speaker 1: they continue to increase wages. So that's going to be 98 00:05:55,279 --> 00:05:57,080 Speaker 1: really something that they're gonna have to focus on. It 99 00:05:57,160 --> 00:05:59,840 Speaker 1: is it relates to Okay, if we need to push product, 100 00:06:00,080 --> 00:06:02,000 Speaker 1: need to bring in volume of people. We want to 101 00:06:02,120 --> 00:06:06,479 Speaker 1: increase our sales. We need people to to have that movement. 102 00:06:06,839 --> 00:06:09,480 Speaker 1: But the other thing we're also seeing is technology. Right, 103 00:06:09,560 --> 00:06:12,320 Speaker 1: so technology continued to be a big play. I don't 104 00:06:12,360 --> 00:06:14,440 Speaker 1: know if you've read, like Starbucks is coming out with 105 00:06:14,520 --> 00:06:17,560 Speaker 1: this what they're calling their reinvention strategy to kind of 106 00:06:17,760 --> 00:06:21,360 Speaker 1: offset some of that labor concern and labor issues. And 107 00:06:21,480 --> 00:06:24,760 Speaker 1: so they're looking at automating more so over the next 108 00:06:24,800 --> 00:06:27,120 Speaker 1: several years where you can just get your food and 109 00:06:27,200 --> 00:06:29,760 Speaker 1: drink orders very quickly and and it cuts down on 110 00:06:29,880 --> 00:06:34,159 Speaker 1: that employee labor shortage and or cost issue. Alright, Angie, 111 00:06:34,240 --> 00:06:37,120 Speaker 1: Great Great stuff has always Anti Slanki, national director of 112 00:06:37,160 --> 00:06:40,800 Speaker 1: Retail Services for Colliers, talking about retail sales came in 113 00:06:40,839 --> 00:06:43,000 Speaker 1: a little bit better than expected for the month of August. 114 00:06:47,920 --> 00:06:50,599 Speaker 1: Let's get over speaking of driving across this beautiful country. 115 00:06:50,640 --> 00:06:52,920 Speaker 1: Let's get over to Brent Shooty right now. He's a 116 00:06:52,960 --> 00:06:58,320 Speaker 1: chief investment strategist at Northwestern Mutual. Brent, are you in Chicago. 117 00:06:59,279 --> 00:07:01,440 Speaker 1: I'm in Milwaukee. Know I was in Chicago earlier in 118 00:07:01,440 --> 00:07:03,400 Speaker 1: my career, but I moved to the beautiful city of Milwaukee. 119 00:07:03,560 --> 00:07:05,240 Speaker 1: Got it, Well, I just knew that you did your 120 00:07:05,320 --> 00:07:07,920 Speaker 1: MBA at the University of Chicago. They do numbers there 121 00:07:08,000 --> 00:07:11,880 Speaker 1: at the university. Highly respected by this program. UM. I'm 122 00:07:11,920 --> 00:07:14,680 Speaker 1: glad to have you on because I have been having 123 00:07:15,200 --> 00:07:19,239 Speaker 1: discussions with investors here in New York and and yesterday 124 00:07:19,320 --> 00:07:22,880 Speaker 1: we heard from Ray Dalio that he's on the bare side. 125 00:07:23,280 --> 00:07:25,720 Speaker 1: He says if the FED raises rates to four and 126 00:07:25,760 --> 00:07:28,720 Speaker 1: a half percent or more, which looks highly likely they'll do, 127 00:07:29,440 --> 00:07:33,920 Speaker 1: stocks could fall. On the other hand, UM. David Rubinstein 128 00:07:34,520 --> 00:07:37,640 Speaker 1: UM yesterday of Carlisle Fame, who also has a television 129 00:07:37,680 --> 00:07:41,960 Speaker 1: program here on Bloomberg Television, said he thinks that professional 130 00:07:42,040 --> 00:07:44,480 Speaker 1: investors are looking for bargains right now. This is when 131 00:07:44,480 --> 00:07:48,120 Speaker 1: you should be buying. Um. Do you side with one 132 00:07:48,240 --> 00:07:50,960 Speaker 1: or the other? I think it comes down to your 133 00:07:50,960 --> 00:07:54,160 Speaker 1: out look on inflation. And certainly, as I look at charts, 134 00:07:54,320 --> 00:07:57,600 Speaker 1: graphs and mosaics of ford looking indicators of inflation, I 135 00:07:57,720 --> 00:08:00,520 Speaker 1: find it very hard to see any reason and why 136 00:08:00,720 --> 00:08:03,120 Speaker 1: inflation is permanent or here to stay, and why the 137 00:08:03,160 --> 00:08:05,680 Speaker 1: fudge should actually raise rates above four and a half percent. 138 00:08:06,320 --> 00:08:08,840 Speaker 1: The only thing that people can point to is the 139 00:08:08,920 --> 00:08:12,400 Speaker 1: actual backward looking number itself. You're gonna hear chair Pal 140 00:08:12,480 --> 00:08:16,680 Speaker 1: again talk about inflation being broad and being sticky. Let 141 00:08:16,760 --> 00:08:19,360 Speaker 1: me take those two things apart really quickly to explain 142 00:08:19,440 --> 00:08:21,560 Speaker 1: why I don't think either one of them is relevant. 143 00:08:22,000 --> 00:08:24,200 Speaker 1: So the broadside people look at the medium or the 144 00:08:24,240 --> 00:08:27,760 Speaker 1: trimmed mean PC, and they're all elevated. The odd thing 145 00:08:27,880 --> 00:08:30,920 Speaker 1: this time reflecting the economy is that the good side 146 00:08:31,120 --> 00:08:33,840 Speaker 1: was at twelve percent it's now coming down to seven 147 00:08:33,880 --> 00:08:36,000 Speaker 1: point one percent on a year of your basis. The 148 00:08:36,120 --> 00:08:38,959 Speaker 1: services side is actually going up. And so yes, the 149 00:08:39,040 --> 00:08:41,600 Speaker 1: meeting is high, but this is really odd. They usually 150 00:08:41,640 --> 00:08:43,880 Speaker 1: move in the same direction. They're moving in the opposite 151 00:08:43,920 --> 00:08:46,560 Speaker 1: direction because goods was favored early and now it's moving 152 00:08:46,600 --> 00:08:50,200 Speaker 1: to services. That's that's going to resolve itself. That's one 153 00:08:50,240 --> 00:08:54,319 Speaker 1: thing about because rent has been a real thorn in 154 00:08:54,400 --> 00:08:56,400 Speaker 1: the fed side as well as you know my kid 155 00:08:56,440 --> 00:08:58,200 Speaker 1: brother trying to find an apartment in New York. Sure, 156 00:08:58,200 --> 00:09:01,199 Speaker 1: I mean sticky reflects housing and and housing unfortunately comes 157 00:09:01,240 --> 00:09:03,760 Speaker 1: in with lag. Tell me who on Wall Street doesn't 158 00:09:03,800 --> 00:09:05,959 Speaker 1: know that that owner's equivalent rent of that shelter has 159 00:09:06,000 --> 00:09:07,800 Speaker 1: a twelve to sixteen month leg And where do you 160 00:09:07,880 --> 00:09:10,240 Speaker 1: think home prices are going next? Take a look at 161 00:09:10,280 --> 00:09:12,360 Speaker 1: housing demanded look at the mortgage demand this week. It 162 00:09:12,400 --> 00:09:15,559 Speaker 1: was done year over year. The housing market has gone 163 00:09:15,600 --> 00:09:18,040 Speaker 1: from boom to bust. And so as I look forward, 164 00:09:18,080 --> 00:09:21,120 Speaker 1: I think inflation is still set to slow. The CPI 165 00:09:21,240 --> 00:09:24,240 Speaker 1: data is backward looking, and I have trouble finding anything 166 00:09:24,280 --> 00:09:26,360 Speaker 1: other than the labor market right now, which tells me 167 00:09:26,440 --> 00:09:31,160 Speaker 1: that inflation is going to be permanent. So given that backdrop, Brent, 168 00:09:31,480 --> 00:09:34,000 Speaker 1: have have we seen the lows in these equity markets? 169 00:09:34,040 --> 00:09:36,360 Speaker 1: Do you think we'll retest that low back? And I 170 00:09:36,400 --> 00:09:40,560 Speaker 1: guess late June, I'm not for sure that we won't 171 00:09:40,600 --> 00:09:42,840 Speaker 1: retest it. I mean you just mentioned to smart people 172 00:09:42,920 --> 00:09:44,760 Speaker 1: having different outlooks, and that usually has AT's a war 173 00:09:44,840 --> 00:09:47,120 Speaker 1: until we resolve it. On one side, I do think 174 00:09:47,160 --> 00:09:49,280 Speaker 1: the bottom is in. I think if you look back 175 00:09:49,320 --> 00:09:51,880 Speaker 1: to the sixties eighty two time period when inflation was 176 00:09:51,960 --> 00:09:54,160 Speaker 1: the economic problem like it is today. So I don't 177 00:09:54,200 --> 00:09:56,079 Speaker 1: ignore the recent time trades, but I look back to 178 00:09:56,160 --> 00:10:00,439 Speaker 1: that one when cp I peaked, the market bottomed. That's 179 00:10:00,480 --> 00:10:02,880 Speaker 1: what happened in every one of those sixty six, seventy, 180 00:10:03,120 --> 00:10:06,480 Speaker 1: seventy four eight and then Volker did Voker did um. 181 00:10:06,520 --> 00:10:08,559 Speaker 1: I don't think that's going to happen this time. But 182 00:10:08,720 --> 00:10:11,240 Speaker 1: those times where when CPI peaked the market bottom, that's 183 00:10:11,280 --> 00:10:14,599 Speaker 1: point number one. Two. Sentiment is already awful. People have 184 00:10:14,720 --> 00:10:17,760 Speaker 1: sold already. The AI sentiment has been below twenty nine 185 00:10:17,840 --> 00:10:20,400 Speaker 1: times this year. It only been below thirty eight. Are 186 00:10:20,520 --> 00:10:23,280 Speaker 1: only been below that thirty times in the prior thirty 187 00:10:23,360 --> 00:10:25,600 Speaker 1: forty years. Each one of those times except one lead 188 00:10:25,600 --> 00:10:29,360 Speaker 1: to four looking positive returns, throwing a positive throwing the 189 00:10:29,400 --> 00:10:31,679 Speaker 1: fifty percent retracement of blows that we had, which has 190 00:10:31,720 --> 00:10:35,199 Speaker 1: a nearly perfect record going back to and I think 191 00:10:35,240 --> 00:10:36,920 Speaker 1: you have the basis for the market having put in 192 00:10:36,960 --> 00:10:38,920 Speaker 1: the bottom. That doesn't mean it won't be a grinding 193 00:10:38,960 --> 00:10:40,640 Speaker 1: back and forth advance, but I don't think we're going 194 00:10:40,679 --> 00:10:43,079 Speaker 1: to go below those tune sixteenth lows. Alright. So with 195 00:10:43,200 --> 00:10:47,000 Speaker 1: that outlook, Brent, if you have UM cash to put 196 00:10:47,040 --> 00:10:49,360 Speaker 1: to work here, what do you do with it? Where 197 00:10:49,400 --> 00:10:52,839 Speaker 1: do you put it? Do you like equities? UM? Have 198 00:10:53,000 --> 00:10:56,040 Speaker 1: bonds taken a big enough beating, our yields high enough? 199 00:10:56,440 --> 00:10:58,920 Speaker 1: Do you like commodities that they're still room to run 200 00:10:59,040 --> 00:11:01,199 Speaker 1: there or they rolling over? I mean, what do you 201 00:11:01,280 --> 00:11:04,440 Speaker 1: do with money? Sure? And so this is where We've 202 00:11:04,480 --> 00:11:07,480 Speaker 1: been expressing our belief for the past here two years 203 00:11:07,520 --> 00:11:09,800 Speaker 1: that you need to invest in things that are cheap UM. 204 00:11:09,880 --> 00:11:12,440 Speaker 1: You need to invest in value, not the technology favorites 205 00:11:12,480 --> 00:11:13,960 Speaker 1: of the past and the growth favorites of the past, 206 00:11:14,040 --> 00:11:16,679 Speaker 1: the hope streams and themes hope them dreams, teams and 207 00:11:16,720 --> 00:11:19,199 Speaker 1: mean stocks I talked about before. You need to invest 208 00:11:19,240 --> 00:11:21,160 Speaker 1: across the board, I stage should say, but we do 209 00:11:21,280 --> 00:11:23,599 Speaker 1: like on a marginal basis value type stocks and the 210 00:11:23,679 --> 00:11:26,280 Speaker 1: SMP five hundred, We like the SMP six hundred, which 211 00:11:26,320 --> 00:11:29,920 Speaker 1: is UH the small cap area of the market, higher 212 00:11:30,080 --> 00:11:32,440 Speaker 1: quality small cap UM. And I do think bonds right 213 00:11:32,440 --> 00:11:35,480 Speaker 1: now are going to once again hedge stocks. They certainly 214 00:11:35,520 --> 00:11:38,080 Speaker 1: haven't this year, but I think at current yields right 215 00:11:38,120 --> 00:11:40,800 Speaker 1: now really yields UM they do provide a hedge and 216 00:11:40,840 --> 00:11:42,800 Speaker 1: so I would I would make sure that people UM 217 00:11:43,080 --> 00:11:45,199 Speaker 1: don't be don't start selling your bonds right now like 218 00:11:45,280 --> 00:11:47,400 Speaker 1: I think many people want to do. UH. And so 219 00:11:47,480 --> 00:11:49,640 Speaker 1: that's kind of where we're position. We still do own commodities, 220 00:11:49,640 --> 00:11:52,199 Speaker 1: albeit we are underweight our normal benchmark. And by the way, 221 00:11:52,240 --> 00:11:54,959 Speaker 1: that's a that's a position that we have owned historically. 222 00:11:55,200 --> 00:11:57,240 Speaker 1: We weren't the people who believe that inflation was dead. 223 00:11:57,559 --> 00:11:59,200 Speaker 1: Now it's here. And I'm kind of on the other 224 00:11:59,200 --> 00:12:00,640 Speaker 1: side of that argument right now. I think that the 225 00:12:00,880 --> 00:12:03,280 Speaker 1: inflation that we're having right now will come back because 226 00:12:03,320 --> 00:12:06,360 Speaker 1: it is mostly related to what happened post COVID. All right, Brent, 227 00:12:06,440 --> 00:12:08,480 Speaker 1: you said you're in Milwaukee. Milwaukee is one of my 228 00:12:08,640 --> 00:12:12,600 Speaker 1: favorite towns. Vernon it is. Um, it's a great town. 229 00:12:13,040 --> 00:12:15,079 Speaker 1: Talk to how is the market there? How is Milwaukee? 230 00:12:15,120 --> 00:12:17,800 Speaker 1: Because I think, you know, how's the economy how are 231 00:12:17,920 --> 00:12:21,559 Speaker 1: people kind of feeling about things in general? Just kind 232 00:12:21,600 --> 00:12:23,319 Speaker 1: of what's going on in mama real estate? What's the 233 00:12:23,360 --> 00:12:26,080 Speaker 1: real estate? Looks like we're all feeling pretty good right 234 00:12:26,080 --> 00:12:27,760 Speaker 1: now because the weather is still nice. Come visit me 235 00:12:27,840 --> 00:12:29,599 Speaker 1: in a month or two much and people will be 236 00:12:29,600 --> 00:12:32,400 Speaker 1: a little tour um. In general, I think the Milwaukee 237 00:12:32,440 --> 00:12:34,480 Speaker 1: economy is doing just fine. I mean, you know, certainly, 238 00:12:34,480 --> 00:12:36,640 Speaker 1: I think as you look around the country, people are 239 00:12:36,920 --> 00:12:39,480 Speaker 1: doing good. I mean, the unemployment rate is low. The 240 00:12:39,600 --> 00:12:41,520 Speaker 1: one big thing that sticks out that is the thing 241 00:12:41,600 --> 00:12:43,400 Speaker 1: that we have to fix. And if you fix that thing, 242 00:12:43,480 --> 00:12:45,719 Speaker 1: you fix the market is inflation. And that's where I 243 00:12:45,760 --> 00:12:48,160 Speaker 1: think there's good news because I do believe the Ford 244 00:12:48,200 --> 00:12:51,680 Speaker 1: indicators point to lower inflation. Yeah, you know, um, somebody 245 00:12:51,720 --> 00:12:55,320 Speaker 1: who was telling me yesterday she didn't think we're gonna 246 00:12:55,400 --> 00:12:58,280 Speaker 1: come down to four or five percent by May June 247 00:12:58,320 --> 00:13:00,480 Speaker 1: of next year, and I reminded her of the cops. 248 00:13:00,920 --> 00:13:05,360 Speaker 1: I mean, surely for that reason. It would be insane 249 00:13:05,559 --> 00:13:08,160 Speaker 1: if we were still over five percent after a nine 250 00:13:08,280 --> 00:13:11,640 Speaker 1: point one percent in June of this year. Yeah. I mean, 251 00:13:11,720 --> 00:13:13,040 Speaker 1: you look at it, supply and demand. I mean, the 252 00:13:13,080 --> 00:13:15,400 Speaker 1: said talks about that all the time. Demand has moderated. 253 00:13:15,760 --> 00:13:18,920 Speaker 1: Um PC is running a PC, Consumptions running two point 254 00:13:18,960 --> 00:13:21,000 Speaker 1: two percent year every year. UM it was running six 255 00:13:21,040 --> 00:13:23,719 Speaker 1: and a half percent before the Fed started hiking. The 256 00:13:23,760 --> 00:13:26,880 Speaker 1: housing market has slowed, inventories have rebuilt, and so I 257 00:13:27,120 --> 00:13:29,160 Speaker 1: do think it will begin to push back. I think 258 00:13:29,200 --> 00:13:31,800 Speaker 1: the big risk is that the Federal Reserve doesn't feel 259 00:13:31,840 --> 00:13:34,040 Speaker 1: they can have a forward outlook because they see, I 260 00:13:34,200 --> 00:13:36,160 Speaker 1: assume some of those things that many of us in 261 00:13:36,200 --> 00:13:39,200 Speaker 1: the market see. The question that I have is are 262 00:13:39,240 --> 00:13:42,319 Speaker 1: they so hot haunted by what happened in eighty that 263 00:13:42,400 --> 00:13:45,320 Speaker 1: they feel the need to keep ongoing Because inflation right 264 00:13:45,320 --> 00:13:47,280 Speaker 1: now is still high and there are lots of screaming 265 00:13:47,280 --> 00:13:49,880 Speaker 1: about it. Are they able to actually pause, because I 266 00:13:49,960 --> 00:13:52,920 Speaker 1: think they've accomplished in six months a lot already. I 267 00:13:53,040 --> 00:13:54,720 Speaker 1: just think it hasn't completely shot up in the numbers. 268 00:13:55,160 --> 00:13:57,800 Speaker 1: All right, Brent, great stuff as always, appreciate getting some 269 00:13:57,920 --> 00:14:01,720 Speaker 1: of your valuable time. Brent Shooty, Chief investments Strategist, Northwestern 270 00:14:01,800 --> 00:14:06,360 Speaker 1: Mutual located in beautiful Milwaukee, Wisconsin. We're talking beer. I 271 00:14:06,440 --> 00:14:08,120 Speaker 1: think they do that there. They do brought worst, they 272 00:14:08,160 --> 00:14:10,600 Speaker 1: do cheese. Uh. They get a lot of good money 273 00:14:10,640 --> 00:14:14,760 Speaker 1: management institutional investor money in Milwaukee. Believe it or not. 274 00:14:14,920 --> 00:14:21,400 Speaker 1: It punches way above its weight. Francis O joined us 275 00:14:21,480 --> 00:14:25,800 Speaker 1: Craft Technologies. I think they do artificial intelligence for investing. 276 00:14:25,840 --> 00:14:27,800 Speaker 1: I don't know. When I started on the block trading 277 00:14:27,840 --> 00:14:31,480 Speaker 1: Nescar Payne eight six. Every morning, my boss, Johnny coglan 278 00:14:31,520 --> 00:14:34,000 Speaker 1: would just run by and screaming my ear by them low, 279 00:14:34,760 --> 00:14:37,080 Speaker 1: sell them high. That's all I had to do. But 280 00:14:37,200 --> 00:14:40,080 Speaker 1: now you can use artificial intelligence. Francis, thanks so much 281 00:14:40,080 --> 00:14:41,960 Speaker 1: for joining us here. Tell us what you guys are 282 00:14:42,040 --> 00:14:46,800 Speaker 1: doing a Craft Technologies, Thank you, thank you for inviting me. Um. Yeah, 283 00:14:47,280 --> 00:14:50,680 Speaker 1: the Fiow and sale high we tried to do something 284 00:14:50,760 --> 00:14:53,480 Speaker 1: so like that as well. So the Craft clons. We 285 00:14:53,600 --> 00:14:57,880 Speaker 1: very the artficture Intelligent investment tech company providing the services 286 00:14:57,960 --> 00:15:02,000 Speaker 1: to us A management companies from the S location Signal 287 00:15:02,000 --> 00:15:06,440 Speaker 1: MONGST the signal security selections. We provide a cater solution 288 00:15:06,480 --> 00:15:09,560 Speaker 1: to our plan. Also the sponsor of the an units 289 00:15:09,640 --> 00:15:12,360 Speaker 1: et F as well. So first of all, I want 290 00:15:12,360 --> 00:15:15,520 Speaker 1: to point out that Craft is not like the macaroni 291 00:15:15,520 --> 00:15:19,000 Speaker 1: and cheese that's spelled q R A F T craft technology. 292 00:15:20,720 --> 00:15:24,920 Speaker 1: And um, you said you have an AI E t F. 293 00:15:25,240 --> 00:15:27,040 Speaker 1: So how does that work? It's an active e t 294 00:15:27,240 --> 00:15:32,440 Speaker 1: F and you use your algorithm to trade it. Yes, exactly, 295 00:15:32,520 --> 00:15:36,840 Speaker 1: we are using the artificial intelligence, specifically the deeplonging model 296 00:15:36,960 --> 00:15:40,920 Speaker 1: to trying to predict relative strengths of the stocks among 297 00:15:41,000 --> 00:15:44,520 Speaker 1: the universe. So you apply the uh DAT technology into 298 00:15:44,600 --> 00:15:47,640 Speaker 1: the activity manager of the ETF of the world. So 299 00:15:47,760 --> 00:15:50,040 Speaker 1: we're calling me the listing four et FC and n 300 00:15:50,120 --> 00:15:53,040 Speaker 1: I S right now. But so hang on, you trade 301 00:15:53,160 --> 00:15:55,560 Speaker 1: E t F with your algorithm or you offer an 302 00:15:55,600 --> 00:16:00,080 Speaker 1: e t F that's actively traded. Yes, later one we 303 00:16:00,200 --> 00:16:04,320 Speaker 1: offer on EPO. So what's the ticker. The ticker we 304 00:16:04,440 --> 00:16:08,520 Speaker 1: have the mb q UM, the quality A moment h 305 00:16:08,640 --> 00:16:12,080 Speaker 1: d IV, the one of most performing beast performing ETF 306 00:16:12,160 --> 00:16:15,960 Speaker 1: this series MVQ. Nice alright, I go on e t F, 307 00:16:16,080 --> 00:16:18,760 Speaker 1: go on my Bloomberg and um, it's pretty cool. You 308 00:16:18,800 --> 00:16:21,720 Speaker 1: can put in craft there and then you can define 309 00:16:21,880 --> 00:16:25,120 Speaker 1: exactly the family of francis. How does how does your 310 00:16:25,160 --> 00:16:29,360 Speaker 1: technology the use of artificial intelligence? How does that or 311 00:16:29,440 --> 00:16:31,640 Speaker 1: how has it been doing this year when we've had 312 00:16:31,680 --> 00:16:36,480 Speaker 1: a tremendous underperformance of both equities and fixed income, lots 313 00:16:36,520 --> 00:16:40,760 Speaker 1: of volatility, the fixed pushing higher? How has your process 314 00:16:40,800 --> 00:16:47,000 Speaker 1: worked well? So you're utilizing a the diploming model, which 315 00:16:47,080 --> 00:16:50,400 Speaker 1: is training the am L don't to liplicate the well 316 00:16:50,480 --> 00:16:53,720 Speaker 1: framed human perform management there. This is a making process 317 00:16:54,160 --> 00:16:57,720 Speaker 1: but without human emotional bience risk. So processing from the 318 00:16:57,800 --> 00:17:01,440 Speaker 1: mental data, price data, and macmak data to be our 319 00:17:01,520 --> 00:17:05,400 Speaker 1: model is trying to the maker scores and the foecust 320 00:17:05,480 --> 00:17:08,480 Speaker 1: relative performance at the stack amongst the universe. But the 321 00:17:09,000 --> 00:17:11,639 Speaker 1: EATP that I mentioned m v Q, the next value 322 00:17:11,680 --> 00:17:17,280 Speaker 1: et which is applying the ai WA m AIM methodology 323 00:17:17,320 --> 00:17:20,800 Speaker 1: into the value invest in the world, UMDAB each are 324 00:17:20,800 --> 00:17:24,560 Speaker 1: actually performing value well this year uh year today. As 325 00:17:24,600 --> 00:17:28,760 Speaker 1: of today NVQUE is only full person below the full 326 00:17:28,840 --> 00:17:32,919 Speaker 1: person losses, which is almost eleven percent point of performance 327 00:17:33,119 --> 00:17:36,800 Speaker 1: even against the widely used nscr U s A and 328 00:17:36,920 --> 00:17:40,040 Speaker 1: as value index UM show and even for the last 329 00:17:40,119 --> 00:17:42,960 Speaker 1: long year period NVC is even more possibly tend close 330 00:17:43,040 --> 00:17:45,399 Speaker 1: to percent. All right, I want to point out that 331 00:17:45,800 --> 00:17:51,919 Speaker 1: is n v Q as in Victor, Nancy Veronica. Okay, Um, 332 00:17:52,400 --> 00:17:56,159 Speaker 1: what's Q in the craft craft? Yes, exactly, n v Q. No. 333 00:17:56,320 --> 00:17:58,600 Speaker 1: I I was thinking in the military alphabet. If I 334 00:17:58,640 --> 00:18:01,080 Speaker 1: had Greg Jarrett here, he would do me right away. 335 00:18:01,400 --> 00:18:04,800 Speaker 1: Q looks like Quebec. So it's actually in the military 336 00:18:04,840 --> 00:18:09,560 Speaker 1: alphabet November Victor Quebec. Really que is a taker? Okay, 337 00:18:09,800 --> 00:18:13,200 Speaker 1: very good? All right, So francis, what's kind of what 338 00:18:13,320 --> 00:18:14,919 Speaker 1: do you guys as you look at the market here? 339 00:18:14,960 --> 00:18:17,320 Speaker 1: What what's what are you thinking about here as you 340 00:18:17,440 --> 00:18:22,280 Speaker 1: talk to your clients? Right? The carom back environment is 341 00:18:22,359 --> 00:18:24,879 Speaker 1: definitely not so multi papab between investors at all, Like 342 00:18:25,000 --> 00:18:28,080 Speaker 1: you're there are a lot of risk um that we 343 00:18:28,240 --> 00:18:34,160 Speaker 1: haven't seen this year, from being the heightened inflated inflation 344 00:18:34,280 --> 00:18:36,960 Speaker 1: environments and then the fact the hike is also not 345 00:18:37,080 --> 00:18:41,560 Speaker 1: favorable poetical risk and also be pretty much like the 346 00:18:41,720 --> 00:18:46,119 Speaker 1: perfect storm is hitting the financial market right now. And 347 00:18:46,560 --> 00:18:49,560 Speaker 1: if someone who still wants to have a position into 348 00:18:49,600 --> 00:18:52,880 Speaker 1: active market a letter I think about the lever wants 349 00:18:52,960 --> 00:18:56,720 Speaker 1: to say, let's think about the value investments. UM could 350 00:18:56,760 --> 00:18:59,159 Speaker 1: be the way to play for the next six to 351 00:18:59,240 --> 00:19:03,240 Speaker 1: twelve months on until there was a clear trajectory of 352 00:19:03,280 --> 00:19:09,400 Speaker 1: decidities are deciding to any sign on deluring there interested 353 00:19:09,600 --> 00:19:14,760 Speaker 1: UMU the legend back to the normal area shop for 354 00:19:15,000 --> 00:19:18,600 Speaker 1: now the gross act mark had it won't be so 355 00:19:18,720 --> 00:19:22,840 Speaker 1: much the value. The values that delated relate to play 356 00:19:23,320 --> 00:19:27,320 Speaker 1: relatively safer than the other mechandescent classes. All right, francis 357 00:19:27,359 --> 00:19:31,640 Speaker 1: good stuff. We appreciate it. Francis Oh, CEO of Craft Technologies, 358 00:19:32,119 --> 00:19:34,000 Speaker 1: UH talking to us about the e t F. He 359 00:19:34,160 --> 00:19:42,560 Speaker 1: uses artificial intelligence there in the investment process. Where is 360 00:19:42,720 --> 00:19:46,159 Speaker 1: Kevin Tyn I am so pumped for him. He's at 361 00:19:46,160 --> 00:19:49,159 Speaker 1: the Detroit Auto Show. UM. For a number of reasons. 362 00:19:49,280 --> 00:19:52,560 Speaker 1: This is spend a lot of time in Detroit. I 363 00:19:52,920 --> 00:19:54,520 Speaker 1: used to spend a ton of time in Detroit, and 364 00:19:54,560 --> 00:19:57,119 Speaker 1: the Auto show was typically in January, like the worst 365 00:19:57,200 --> 00:20:00,840 Speaker 1: time in the year to visit Detroit, but everybody went 366 00:20:00,880 --> 00:20:05,040 Speaker 1: because the super Bowl of UM, the automotive industry. Now 367 00:20:05,640 --> 00:20:09,000 Speaker 1: they have it in a more reasonable season, but I 368 00:20:09,040 --> 00:20:11,639 Speaker 1: don't think as many people are there. Well, the ce 369 00:20:11,880 --> 00:20:13,520 Speaker 1: S Show, I think is an auto show with a 370 00:20:13,560 --> 00:20:16,320 Speaker 1: couple of computers around it. Yeah, that's what the Toyot 371 00:20:16,400 --> 00:20:18,840 Speaker 1: president was saying yesterday as well. Kevin tell us first 372 00:20:18,880 --> 00:20:21,200 Speaker 1: of all about what the auto show is like. I mean, 373 00:20:21,880 --> 00:20:24,960 Speaker 1: it just wasn't the hype um this year that there 374 00:20:25,080 --> 00:20:27,760 Speaker 1: used to be, you know, pre pandemic back in the 375 00:20:27,880 --> 00:20:30,720 Speaker 1: day when Detroit was all about it. Yeah, it is 376 00:20:31,000 --> 00:20:35,480 Speaker 1: very very different. Um, I would say for the most part, 377 00:20:35,600 --> 00:20:40,920 Speaker 1: full displays are only General Motors, Ford and Statlantis. There's 378 00:20:40,960 --> 00:20:45,920 Speaker 1: a small Toyota booths and even smaller Subaru booth, and 379 00:20:46,080 --> 00:20:49,119 Speaker 1: that is it's what is it. Yeah, So there's a 380 00:20:49,320 --> 00:20:53,480 Speaker 1: couple of you know, there's a couple of like drone 381 00:20:53,680 --> 00:20:59,920 Speaker 1: and see plane companies showing stuff and electric truck plot 382 00:21:00,080 --> 00:21:02,600 Speaker 1: forms that so they they went out of the way 383 00:21:02,680 --> 00:21:05,199 Speaker 1: to fill the space with non automotive stuff. And then 384 00:21:05,240 --> 00:21:10,879 Speaker 1: there's this thing called automobility which is charging companies and 385 00:21:11,680 --> 00:21:14,920 Speaker 1: light ar and so it's and even the media center, 386 00:21:15,000 --> 00:21:17,560 Speaker 1: you know, we would come in here and media center 387 00:21:17,600 --> 00:21:21,959 Speaker 1: would take up this entire ballroom and Bloomberg and our 388 00:21:22,080 --> 00:21:24,680 Speaker 1: our team from Southfield here would just have a whole 389 00:21:24,800 --> 00:21:29,800 Speaker 1: table editors, reporters running from scrum to scrum and uh, 390 00:21:29,920 --> 00:21:33,639 Speaker 1: it's it's it's like a closet now. And there was 391 00:21:33,680 --> 00:21:35,639 Speaker 1: five people in the entire media it used to be. 392 00:21:36,600 --> 00:21:40,280 Speaker 1: It used to cover bill multiple halls and multiple floors. 393 00:21:40,520 --> 00:21:44,359 Speaker 1: And well, I think it reflects I mean, you guys 394 00:21:44,520 --> 00:21:47,800 Speaker 1: know Kevin and Matt. I mean it reflects auto companies 395 00:21:47,840 --> 00:21:50,720 Speaker 1: are technology companies today. I mean, and I guess that 396 00:21:50,800 --> 00:21:53,879 Speaker 1: makes more sense to be in Vegas, you know, in 397 00:21:54,200 --> 00:21:56,720 Speaker 1: for the ce S show, because man, that's what the 398 00:21:56,840 --> 00:21:59,760 Speaker 1: cars today are. I mean, we saw all these micro 399 00:22:00,400 --> 00:22:03,240 Speaker 1: talk to us about just the general buzz there as 400 00:22:03,280 --> 00:22:09,680 Speaker 1: it relates to the transition to electric vehicles. Um, you know, 401 00:22:09,720 --> 00:22:11,440 Speaker 1: where are we? You know? The interesting thing is, and 402 00:22:11,600 --> 00:22:14,879 Speaker 1: I can't remember who wrote the story that I read yesterday. 403 00:22:14,920 --> 00:22:19,520 Speaker 1: It was either Elizabeth Berman or Monica Raymond or Chris Ralvald, 404 00:22:19,600 --> 00:22:22,600 Speaker 1: But one of our German reporters talking about Herbert Diese 405 00:22:22,760 --> 00:22:26,120 Speaker 1: at his going away speech, you see this Kevin Um, Yeah, 406 00:22:26,160 --> 00:22:29,080 Speaker 1: this former CEO of Folkswagen when he was leaving. Um 407 00:22:29,400 --> 00:22:32,560 Speaker 1: he basically pointed out the fact that the transition to 408 00:22:32,720 --> 00:22:38,320 Speaker 1: electric is easy. The transition to software is hard. That's 409 00:22:38,320 --> 00:22:40,639 Speaker 1: where everyone's getting it wrong. Right. Anyone can put a 410 00:22:40,680 --> 00:22:42,800 Speaker 1: battery in a car, Okay, Tesla seems to have been 411 00:22:42,840 --> 00:22:45,360 Speaker 1: doing it better than anyone else. But putting all these 412 00:22:45,400 --> 00:22:48,080 Speaker 1: software systems and getting them to work together and getting 413 00:22:48,119 --> 00:22:50,040 Speaker 1: them to work as well as your iPhone or whatever 414 00:22:50,119 --> 00:22:52,240 Speaker 1: you use, it's not easy, and a lot of them 415 00:22:52,280 --> 00:22:55,360 Speaker 1: are failing or at least having real troubles, right, Kevin, Yeah, 416 00:22:55,400 --> 00:22:58,120 Speaker 1: And and it's the same thing with autonomous. Right. We've 417 00:22:58,160 --> 00:23:00,719 Speaker 1: heard so much about self driving, and you know how 418 00:23:00,880 --> 00:23:04,160 Speaker 1: right around the corner it is. And really we've we've 419 00:23:04,200 --> 00:23:07,200 Speaker 1: got the hardware figured out, right, and if that's of 420 00:23:07,280 --> 00:23:10,320 Speaker 1: the battle, that the last ten percent is as difficult 421 00:23:10,400 --> 00:23:12,280 Speaker 1: as it was to get to that point. And I 422 00:23:12,320 --> 00:23:15,000 Speaker 1: think you're seeing that in electrification and you're also seeing 423 00:23:15,040 --> 00:23:18,280 Speaker 1: it in autonomous. But but Paul, to your point about 424 00:23:18,960 --> 00:23:21,520 Speaker 1: the show being technology, you know, the other thing too, 425 00:23:21,680 --> 00:23:24,520 Speaker 1: is that you're you're you're having an auto show to 426 00:23:24,840 --> 00:23:27,000 Speaker 1: drum up demand and get the public to see your 427 00:23:27,040 --> 00:23:31,920 Speaker 1: new product, of which you have none in inventory. So 428 00:23:32,320 --> 00:23:37,240 Speaker 1: so to you in four years, right, I mean so 429 00:23:37,400 --> 00:23:40,040 Speaker 1: that's kind of I think the feeling puts, you know, 430 00:23:40,600 --> 00:23:44,320 Speaker 1: looking at the main auto shows right Detroit in January 431 00:23:44,440 --> 00:23:46,159 Speaker 1: used to be in January, you have New York right 432 00:23:46,200 --> 00:23:49,919 Speaker 1: around um Easter, and then you would have California right 433 00:23:49,960 --> 00:23:52,960 Speaker 1: around Thanksgiving, and it would always be kind of divided. 434 00:23:53,000 --> 00:23:56,840 Speaker 1: Where Detroit obviously is four GM and the De Lantis 435 00:23:56,920 --> 00:24:01,040 Speaker 1: domestic brands backyard, you would have the European makes really 436 00:24:01,119 --> 00:24:03,200 Speaker 1: kind of focus on New York because it was considered 437 00:24:03,240 --> 00:24:06,400 Speaker 1: the premium show, and then the West Coast show would 438 00:24:06,400 --> 00:24:08,080 Speaker 1: be a little bit more high tech, and you'd have 439 00:24:08,560 --> 00:24:12,920 Speaker 1: the Asia based manufacturers UM with a bigger presence there. 440 00:24:12,960 --> 00:24:15,520 Speaker 1: And now it just seems like I'm not sure there's 441 00:24:15,560 --> 00:24:18,400 Speaker 1: any presence anywhere other than like Paul said at CEF, 442 00:24:19,280 --> 00:24:23,399 Speaker 1: I guess Baby Vegas. I got. I prefer Detroit, honestly, 443 00:24:23,520 --> 00:24:25,760 Speaker 1: no matter what time of year, I prefer Detroit to 444 00:24:25,800 --> 00:24:28,320 Speaker 1: Las Vegas. But I have a special treat for for 445 00:24:28,440 --> 00:24:31,840 Speaker 1: all of you. Um there is one really cool thing 446 00:24:31,920 --> 00:24:35,359 Speaker 1: that happened at this car show, and that is Ford 447 00:24:35,560 --> 00:24:40,399 Speaker 1: unveiling It's brand new seventh generation Mustang and icon of 448 00:24:40,520 --> 00:24:42,560 Speaker 1: car that I have been a huge fan of ever 449 00:24:42,680 --> 00:24:45,000 Speaker 1: since I got gum on the seat of my dad's 450 00:24:45,040 --> 00:24:48,639 Speaker 1: sixty four and a half notch back. Um, and we've 451 00:24:48,680 --> 00:24:51,120 Speaker 1: got Jim Owns with us on the line here from 452 00:24:51,240 --> 00:24:54,080 Speaker 1: Detroit as well. He is the marketing manager for the 453 00:24:54,200 --> 00:24:57,879 Speaker 1: Mustang project. Jim, you know, this looks at first glance, 454 00:24:58,320 --> 00:25:01,480 Speaker 1: it looks more like an evolution than a revolution. But 455 00:25:01,600 --> 00:25:04,879 Speaker 1: there's some pretty major changes both to the power train, 456 00:25:05,480 --> 00:25:08,520 Speaker 1: UM and the interior as well as the exterior designed 457 00:25:08,560 --> 00:25:11,600 Speaker 1: that I really think makes this car a much more 458 00:25:11,680 --> 00:25:15,640 Speaker 1: attractive UM proposition. And I already wanted the old one, 459 00:25:16,000 --> 00:25:19,159 Speaker 1: So tell us about it. Um, we're so excited to 460 00:25:19,240 --> 00:25:21,440 Speaker 1: be on and talk about this. And you know, the 461 00:25:21,560 --> 00:25:23,639 Speaker 1: sixty four and a half Mustang that you got the 462 00:25:23,680 --> 00:25:26,920 Speaker 1: gum stuck on literally was a sixty five. You know, 463 00:25:27,040 --> 00:25:29,000 Speaker 1: there was really no such thing as the sixty four 464 00:25:29,000 --> 00:25:31,000 Speaker 1: and a half, even though all the Mustang fans around 465 00:25:31,040 --> 00:25:34,480 Speaker 1: the world they were all titled sixty five. So don't 466 00:25:34,520 --> 00:25:37,000 Speaker 1: worry about getting that gum stuck on your dad. That's 467 00:25:37,520 --> 00:25:39,800 Speaker 1: he He would always refer to it that way. And UM, 468 00:25:40,280 --> 00:25:42,440 Speaker 1: even yesterday my wife was saying, that's silly. Why was 469 00:25:42,480 --> 00:25:44,000 Speaker 1: it sixty four and a half? I don't know why 470 00:25:44,040 --> 00:25:47,080 Speaker 1: it was. I don't know why that year sticks with me. 471 00:25:47,240 --> 00:25:50,480 Speaker 1: Maybe that's when they showed it at the World's Fair, 472 00:25:50,560 --> 00:25:52,439 Speaker 1: or they put it up. You know, they took apart 473 00:25:52,560 --> 00:25:55,520 Speaker 1: you know this, they took apart a Mustang for the debut. 474 00:25:55,960 --> 00:25:58,880 Speaker 1: They carried it up the Empire State Building and put 475 00:25:58,920 --> 00:26:01,919 Speaker 1: it back together on the view on platform. We did 476 00:26:02,000 --> 00:26:05,119 Speaker 1: it twice. We did it in nineteen six and at 477 00:26:05,160 --> 00:26:07,200 Speaker 1: the time the size of the Mustang and the elevator 478 00:26:07,280 --> 00:26:10,199 Speaker 1: sizes have not changed on the Empire State Building, right, 479 00:26:10,240 --> 00:26:12,840 Speaker 1: they have never changed because of you know, the historical 480 00:26:12,880 --> 00:26:15,520 Speaker 1: aspect of that building. So in sixty six it took 481 00:26:15,640 --> 00:26:19,359 Speaker 1: four different times to go up the elevator when we 482 00:26:19,520 --> 00:26:22,159 Speaker 1: did it with the Gen six Mustang and we put 483 00:26:22,240 --> 00:26:24,520 Speaker 1: it out there the bright yellow one. UM, it took 484 00:26:24,560 --> 00:26:26,240 Speaker 1: a few more times to put it up there, and 485 00:26:26,320 --> 00:26:27,920 Speaker 1: we installed it up there. So yeah, it's been on 486 00:26:28,040 --> 00:26:31,399 Speaker 1: top of the Empire State Building twice. UM sixty four 487 00:26:31,440 --> 00:26:35,480 Speaker 1: and a half piece is when Ford started changing production 488 00:26:35,640 --> 00:26:39,800 Speaker 1: runs in their customers wanted to delineate between the original 489 00:26:40,160 --> 00:26:42,760 Speaker 1: and then the second one where they delineated it, and 490 00:26:42,840 --> 00:26:44,600 Speaker 1: that's the sixty four and a half, sixty five and 491 00:26:44,640 --> 00:26:49,000 Speaker 1: it's always a fun conversation over um. You had mentioned 492 00:26:49,480 --> 00:26:52,359 Speaker 1: the seventh generation and how you thought of it as 493 00:26:52,359 --> 00:26:56,639 Speaker 1: an evolution and and it has to be a you know, 494 00:26:56,880 --> 00:27:00,840 Speaker 1: for the six generations previously, it still has to be 495 00:27:01,200 --> 00:27:04,840 Speaker 1: unmistakably Mustang, right, and that we think we hit a 496 00:27:04,880 --> 00:27:07,520 Speaker 1: home run on it. And in the seventh generation it 497 00:27:07,640 --> 00:27:10,399 Speaker 1: has to reach to that new audience to bring the 498 00:27:10,520 --> 00:27:13,719 Speaker 1: new seventh generation customers in, and we think we hit 499 00:27:13,760 --> 00:27:16,880 Speaker 1: a home run with the design and that interior which 500 00:27:17,000 --> 00:27:21,359 Speaker 1: is just completely filled with gaming technology that the younger 501 00:27:21,440 --> 00:27:24,120 Speaker 1: audiences love. And then you said you talked a little 502 00:27:24,160 --> 00:27:26,480 Speaker 1: bit about the power trains and an all new Eco 503 00:27:26,600 --> 00:27:32,760 Speaker 1: Boost that has better performance, better power, more efficient production 504 00:27:32,880 --> 00:27:37,159 Speaker 1: of power. And then for Mustang fans globally, right, you 505 00:27:37,480 --> 00:27:41,040 Speaker 1: have cars on six of the seven continents. Um, it 506 00:27:41,320 --> 00:27:45,560 Speaker 1: is a fourth generation Coyote that will be the highest 507 00:27:45,720 --> 00:27:50,720 Speaker 1: horsepower Mustang gt tyote I've ever done. I'm so happy 508 00:27:50,760 --> 00:27:52,639 Speaker 1: to hear that, you know, because I was worried that 509 00:27:52,680 --> 00:27:54,320 Speaker 1: the horse power figures were gonna go down. And I 510 00:27:54,400 --> 00:27:56,040 Speaker 1: know that you're not going to tell us, well, go 511 00:27:56,119 --> 00:27:58,280 Speaker 1: ahead and tell us, just tell us, well, so i'd 512 00:27:58,320 --> 00:28:00,560 Speaker 1: loved I'd love to tell you just as a secret 513 00:28:00,560 --> 00:28:03,320 Speaker 1: whisper in your ear, But no, the asterisks are that, 514 00:28:03,440 --> 00:28:05,879 Speaker 1: you know, we're still in the testing and certification pieces 515 00:28:05,960 --> 00:28:08,520 Speaker 1: that will come closer to the summer of twenty three 516 00:28:08,600 --> 00:28:11,160 Speaker 1: when we launched the twenty four model year. But as 517 00:28:11,240 --> 00:28:13,400 Speaker 1: a you know, as a person who has not only 518 00:28:13,440 --> 00:28:17,320 Speaker 1: worked for Mustangs for four generations of them, also worked 519 00:28:17,359 --> 00:28:20,640 Speaker 1: for Carol Shelby for four years, you know, horsepower means 520 00:28:20,720 --> 00:28:24,960 Speaker 1: something and this is this is going to be one 521 00:28:25,040 --> 00:28:27,240 Speaker 1: that pulls you from the seat of your pants. And 522 00:28:27,320 --> 00:28:29,480 Speaker 1: we can't tell you how excited we are. All right, Jim, 523 00:28:29,840 --> 00:28:32,960 Speaker 1: Let's say I order a new Ford, when am I 524 00:28:33,000 --> 00:28:34,600 Speaker 1: going to get it? It looks like we're not going 525 00:28:34,640 --> 00:28:37,159 Speaker 1: to have a railroad strike, so that's good news. But 526 00:28:37,280 --> 00:28:39,480 Speaker 1: talk to us just about the supply chain getting stuff 527 00:28:40,000 --> 00:28:43,360 Speaker 1: from the auto industry these days. Yeah, and it's been, um, 528 00:28:43,920 --> 00:28:46,080 Speaker 1: it has been, you know, just like every other industry. 529 00:28:46,240 --> 00:28:50,280 Speaker 1: It's been you know, a struggle to identify you know, 530 00:28:50,360 --> 00:28:52,720 Speaker 1: when you can have your plant open and what parts 531 00:28:52,760 --> 00:28:55,800 Speaker 1: are coming in. And with Mustang, you ask about the Mustang. 532 00:28:56,120 --> 00:28:58,480 Speaker 1: This will be a twenty four model year, right, so 533 00:28:58,560 --> 00:29:01,600 Speaker 1: it'll be the fifty nine year model year for this 534 00:29:01,800 --> 00:29:04,920 Speaker 1: Mustang and that will be available in June of her 535 00:29:05,000 --> 00:29:08,320 Speaker 1: I'm sorry, in the summer of twenty three as a 536 00:29:08,400 --> 00:29:10,720 Speaker 1: twenty four model year. Right now, you can still go 537 00:29:10,840 --> 00:29:13,840 Speaker 1: in and order your twenty two are soon to order 538 00:29:13,960 --> 00:29:17,600 Speaker 1: your twenty three model your Mustang that is the existing one. UM. 539 00:29:17,760 --> 00:29:20,680 Speaker 1: And you know, we've been able to UM keep the 540 00:29:20,720 --> 00:29:24,320 Speaker 1: plants running and keep Mustang customers happy by delivering you know, 541 00:29:24,520 --> 00:29:27,200 Speaker 1: not only the Eco Boost, but right now the mach one, 542 00:29:27,320 --> 00:29:32,920 Speaker 1: the Trema. Yeah, with the Trumic seven speed dual clutch. 543 00:29:33,040 --> 00:29:36,320 Speaker 1: That's you know, shifts years in eighty milliseconds. Yeah, that's 544 00:29:36,320 --> 00:29:40,040 Speaker 1: a lot of fun. I want that. And are are 545 00:29:40,080 --> 00:29:42,760 Speaker 1: we going to have? Do we know about the transmission 546 00:29:42,840 --> 00:29:46,240 Speaker 1: options available in the new seventh gen? Yeah? So what 547 00:29:46,360 --> 00:29:49,760 Speaker 1: we've announced last night with the reveal of not only 548 00:29:49,880 --> 00:29:53,680 Speaker 1: the coup and convertible Eco Boost and GT, we introduced 549 00:29:53,720 --> 00:29:56,440 Speaker 1: for the first time in twenty one years, a new 550 00:29:56,600 --> 00:30:00,400 Speaker 1: specialty performance brand called the dark Horse. UM. For time 551 00:30:00,440 --> 00:30:03,960 Speaker 1: that we've had the forward facing pony on the car 552 00:30:04,760 --> 00:30:09,160 Speaker 1: UM and it is UM. It is extremely UM that 553 00:30:09,280 --> 00:30:11,600 Speaker 1: the fitting now of the dark Horse name. Now that 554 00:30:11,760 --> 00:30:15,400 Speaker 1: will be our specialty performance derivative that will have the 555 00:30:16,440 --> 00:30:20,200 Speaker 1: tremack box in the manual and the drift break and 556 00:30:20,280 --> 00:30:24,239 Speaker 1: the break manual transmission. It'll have a manual, it'll have well, 557 00:30:26,040 --> 00:30:29,560 Speaker 1: it'll have the automatic. I think the auto boxes pretty 558 00:30:29,600 --> 00:30:32,160 Speaker 1: amazing as well, and I'm gonna save the manuals guy. 559 00:30:32,360 --> 00:30:35,200 Speaker 1: So um, I was so impressed by the Shelby GT 560 00:30:35,320 --> 00:30:37,520 Speaker 1: five auto boxes. I think I would take that over 561 00:30:37,960 --> 00:30:41,040 Speaker 1: the stick. The cool thing about this new Mustang is 562 00:30:41,080 --> 00:30:45,560 Speaker 1: it's going to have an electric emergency break, a drift break. 563 00:30:49,000 --> 00:30:51,560 Speaker 1: Nobody likes a good m and a trade more than me, 564 00:30:51,720 --> 00:30:54,080 Speaker 1: because again, the first thing I do is I go 565 00:30:54,240 --> 00:30:56,400 Speaker 1: the m A page and I see who the bankers are. 566 00:30:57,400 --> 00:31:01,920 Speaker 1: And my good friend Frank Quattrone advised the seller, so 567 00:31:02,040 --> 00:31:05,880 Speaker 1: I know he got maximum price from this. So Adobe's 568 00:31:05,880 --> 00:31:12,640 Speaker 1: minus software company, Adobe's down? What is going on? He 569 00:31:12,720 --> 00:31:16,400 Speaker 1: covers all things technology for Bloomberg Intelligence. He's located. I 570 00:31:16,480 --> 00:31:18,000 Speaker 1: have no idea where, but we have him in the 571 00:31:18,040 --> 00:31:22,840 Speaker 1: Bloomberg Interactive Broker studio here in New York. Today. Adobe 572 00:31:23,080 --> 00:31:26,720 Speaker 1: a great company, big market cap um and this is 573 00:31:26,720 --> 00:31:29,360 Speaker 1: a hundred fifty billion market cup company stocks down six 574 00:31:30,040 --> 00:31:32,840 Speaker 1: on this. What's up? So you think about it. When 575 00:31:32,880 --> 00:31:34,840 Speaker 1: I looked at the deal, I said, okay, twenty billion, 576 00:31:35,000 --> 00:31:38,400 Speaker 1: it must have good financials. They're gonna do two million 577 00:31:38,440 --> 00:31:42,840 Speaker 1: and annual recording revenue it's aigma. It's a private company. 578 00:31:42,880 --> 00:31:45,479 Speaker 1: They're gonna do maybe four million after that. So if 579 00:31:45,480 --> 00:31:47,440 Speaker 1: you do a little bit of math around it, that 580 00:31:47,560 --> 00:31:53,720 Speaker 1: means fifty times sales or sales hundred times sales cash flow. 581 00:31:53,920 --> 00:31:57,400 Speaker 1: So I think that's what's happening here. The street is saying, 582 00:31:57,480 --> 00:32:00,600 Speaker 1: why are you overpaying so much for an asset where 583 00:32:00,720 --> 00:32:03,120 Speaker 1: the contribution to the top line is going to be 584 00:32:03,320 --> 00:32:05,640 Speaker 1: very small and the bottom line is actually going to 585 00:32:05,720 --> 00:32:09,720 Speaker 1: dilute your margins. It is insane to pay that much, 586 00:32:09,880 --> 00:32:13,720 Speaker 1: especially now when valuations have come in. What are people 587 00:32:13,760 --> 00:32:18,280 Speaker 1: paying for similar assets? So again it see, according to Adobe, 588 00:32:18,400 --> 00:32:20,560 Speaker 1: this is a technology that they're buying that that nobody 589 00:32:20,600 --> 00:32:24,280 Speaker 1: else has, So that's their rationale. The outside people are 590 00:32:24,280 --> 00:32:28,640 Speaker 1: buying less than ten time sales right now for software companies. 591 00:32:28,720 --> 00:32:31,160 Speaker 1: But once again their argument is this is the technology 592 00:32:31,240 --> 00:32:33,880 Speaker 1: that can reshape the company. Um, we published a note 593 00:32:34,000 --> 00:32:37,880 Speaker 1: yesterday where we basically say said that Adobe's long term 594 00:32:37,960 --> 00:32:40,360 Speaker 1: growth is not going to be like it has been 595 00:32:40,480 --> 00:32:44,480 Speaker 1: over the past decade because it's coming to a mature business. 596 00:32:44,560 --> 00:32:46,200 Speaker 1: So they really need to figure out what they do, 597 00:32:46,520 --> 00:32:49,240 Speaker 1: and if that means acquisitions, they may do the acquisition. 598 00:32:49,360 --> 00:32:51,480 Speaker 1: But we don't think that valuation is going to bounce 599 00:32:51,520 --> 00:32:53,720 Speaker 1: back ever again like it was in the you know, 600 00:32:53,800 --> 00:32:56,320 Speaker 1: before the pandemic or during the pandemic. All right, so 601 00:32:57,520 --> 00:33:00,479 Speaker 1: tell us what Adobe is in one set, and tell 602 00:33:00,560 --> 00:33:04,000 Speaker 1: us what Figma is in one sentence, and why Adobe 603 00:33:04,080 --> 00:33:07,960 Speaker 1: wanted to buy Figma and spend twenty billion large. The 604 00:33:08,120 --> 00:33:11,640 Speaker 1: real killer app that Adobe has is their creative cloud product, 605 00:33:11,880 --> 00:33:15,160 Speaker 1: Adobe Photoshop all the photo editing tools that you need. 606 00:33:15,640 --> 00:33:19,520 Speaker 1: Figma is a platform where people can collaborate. You are creators. 607 00:33:19,600 --> 00:33:22,160 Speaker 1: You can use you know, to exchange ideas. You can 608 00:33:22,200 --> 00:33:25,560 Speaker 1: go there. That's a whiteboard all web based stuff, and 609 00:33:25,880 --> 00:33:29,640 Speaker 1: those two things marry very well for the next generation creator. 610 00:33:30,280 --> 00:33:34,600 Speaker 1: Adobe is um. For some sometimes it's the bane of 611 00:33:34,680 --> 00:33:39,120 Speaker 1: my existence because I try and access files on my 612 00:33:39,240 --> 00:33:42,840 Speaker 1: computer that I can't unless I'm subscribed to Adobe. And 613 00:33:43,000 --> 00:33:46,240 Speaker 1: then once I subscribe to Adobe, I found it impossible 614 00:33:46,280 --> 00:33:51,000 Speaker 1: to cancel that subscriptions. They just suck me dry. Um 615 00:33:51,400 --> 00:33:55,080 Speaker 1: is everybody else or other consumers as annoyed. Do they 616 00:33:55,600 --> 00:33:59,080 Speaker 1: struggle to find another word? Do they hate Adobe as 617 00:33:59,160 --> 00:34:02,600 Speaker 1: much as I do? You can open those documents using 618 00:34:02,640 --> 00:34:04,840 Speaker 1: a web browser, So if you're just using a PDF 619 00:34:05,000 --> 00:34:07,800 Speaker 1: opener to do that, that's a free thing. You probably 620 00:34:07,840 --> 00:34:11,719 Speaker 1: downloaded a more expensive version and never deleted it from 621 00:34:11,760 --> 00:34:13,759 Speaker 1: your computer, but we can talk about that another time. 622 00:34:14,360 --> 00:34:16,560 Speaker 1: But so in a case, if you just want to 623 00:34:16,600 --> 00:34:19,000 Speaker 1: read a document, it's okay, that's free. But if you 624 00:34:19,080 --> 00:34:21,040 Speaker 1: want to you know, signature on it, you want to 625 00:34:21,120 --> 00:34:23,319 Speaker 1: go out and edit it and highlight it and send 626 00:34:23,360 --> 00:34:25,160 Speaker 1: it to your teammate, then you have to pay for 627 00:34:25,239 --> 00:34:28,560 Speaker 1: that particular software package. And that's the second piece of 628 00:34:28,640 --> 00:34:31,720 Speaker 1: their business called a document cloud, which is all of PDF. 629 00:34:32,120 --> 00:34:36,040 Speaker 1: But the real killer app is the the Photoshop, which 630 00:34:36,320 --> 00:34:38,560 Speaker 1: there is no graphic design and outdate in the world 631 00:34:38,840 --> 00:34:41,600 Speaker 1: that would not be using that for the world work 632 00:34:41,680 --> 00:34:44,640 Speaker 1: that they do. To me, that product is as powerful 633 00:34:44,680 --> 00:34:49,320 Speaker 1: as Microsoft ex Cell. Alright, and Paul, I guess you 634 00:34:49,440 --> 00:34:52,399 Speaker 1: probably spent decades with Microsoft Exel as your number one 635 00:34:52,560 --> 00:34:54,640 Speaker 1: back in the day, most clicked back in the day. 636 00:34:54,800 --> 00:34:59,800 Speaker 1: And the analyst, yeah, absolutely was before it was before Xcel. Actually, U, 637 00:35:00,000 --> 00:35:01,560 Speaker 1: I can't remember what we had before Excel. What do 638 00:35:01,640 --> 00:35:03,200 Speaker 1: we use on our I don't know WordPress, I have 639 00:35:03,280 --> 00:35:06,040 Speaker 1: that even before that. All right, I'm bringing up one 640 00:35:06,080 --> 00:35:10,359 Speaker 1: of Matt Miller's favorite functions here, c O m p uh. 641 00:35:10,520 --> 00:35:14,280 Speaker 1: Comparative returns Adobe over the last five years about fifteen 642 00:35:14,320 --> 00:35:18,359 Speaker 1: percent return the SMP about eleven. So it's done pretty well. 643 00:35:18,719 --> 00:35:20,760 Speaker 1: I see a lot of buy ratings out there for Adobe, 644 00:35:20,880 --> 00:35:23,600 Speaker 1: six or seven kind of hold ratings, no cells. So 645 00:35:23,719 --> 00:35:26,279 Speaker 1: the street still likes this name. What's the what's the 646 00:35:26,960 --> 00:35:29,600 Speaker 1: theme behind the bullish call here? So go back in 647 00:35:29,920 --> 00:35:35,920 Speaker 1: four or the company went into a massive undertakeoff, changing 648 00:35:35,960 --> 00:35:38,320 Speaker 1: their business model, went from a license model to a 649 00:35:38,360 --> 00:35:43,440 Speaker 1: subscription model. Unbelievable success since then, very strong growth rate 650 00:35:44,200 --> 00:35:47,680 Speaker 1: plus in fact, I would say, closer to margin expansion 651 00:35:47,800 --> 00:35:50,880 Speaker 1: like you have not seen as of today. Margins are 652 00:35:50,920 --> 00:35:55,640 Speaker 1: closer to adjusted operating margins for this company. So massive 653 00:35:55,680 --> 00:35:58,879 Speaker 1: margin expansion. And that was an entire call yesterday that Okay, 654 00:35:58,960 --> 00:36:01,759 Speaker 1: it's done exceeding well in the last you know, ten 655 00:36:01,840 --> 00:36:04,360 Speaker 1: audios or seven eight years. But now they're coming to 656 00:36:04,480 --> 00:36:07,920 Speaker 1: a point that growth rate goes to closer to fifteen 657 00:36:08,280 --> 00:36:11,680 Speaker 1: and there is no Mougin expansion. So the valuation. I 658 00:36:11,719 --> 00:36:15,239 Speaker 1: would say premium they got close to compared to Microsoft, 659 00:36:15,400 --> 00:36:18,279 Speaker 1: I think it's going to die now. And Microsoft's you know, 660 00:36:18,360 --> 00:36:20,760 Speaker 1: economics look a little bit better here compared to Adobe. 661 00:36:21,719 --> 00:36:26,600 Speaker 1: I don't know. Software. I mean it's it's a I mean, 662 00:36:26,640 --> 00:36:28,279 Speaker 1: you've got the easiest drap in the world. You just say, 663 00:36:28,640 --> 00:36:31,319 Speaker 1: I slapped by ratings on everything software. I mean, it's 664 00:36:31,360 --> 00:36:35,000 Speaker 1: just like growing business. How has it performed? Just probably 665 00:36:35,040 --> 00:36:37,880 Speaker 1: speaking forget about the hardware soft We'll talk to some 666 00:36:38,000 --> 00:36:40,040 Speaker 1: other you know, man deep on that one maybe. But 667 00:36:40,160 --> 00:36:43,760 Speaker 1: the software side, is it just a secular growth story. 668 00:36:44,000 --> 00:36:46,920 Speaker 1: It is a massive secular story. You you go back 669 00:36:46,960 --> 00:36:49,560 Speaker 1: and read and reasons you know later from ten years 670 00:36:49,560 --> 00:36:51,359 Speaker 1: ago and say software is going to eat the world. 671 00:36:51,719 --> 00:36:53,880 Speaker 1: Software at that time, Paul, when you hired me was 672 00:36:53,880 --> 00:36:56,040 Speaker 1: about two hundred billion in market size. It's close to 673 00:36:56,080 --> 00:36:59,080 Speaker 1: seven billion market now. You don't have to do much 674 00:36:59,360 --> 00:37:02,320 Speaker 1: just right the way. Yeah, and now and now what 675 00:37:02,360 --> 00:37:05,239 Speaker 1: the kids are talking about is the cloud. That's the 676 00:37:05,320 --> 00:37:07,839 Speaker 1: new thing. And I play the clouds three point, which 677 00:37:07,920 --> 00:37:10,120 Speaker 1: by I'm still have no idea what that. If you 678 00:37:10,160 --> 00:37:14,279 Speaker 1: have any call on web three point, it's it's a gimmick, right, Yeah, 679 00:37:14,320 --> 00:37:16,680 Speaker 1: that's right. Yeah, let's let's get started. Somebody's gonna send 680 00:37:16,680 --> 00:37:18,200 Speaker 1: me a lot of hate me a lot, Okay, So 681 00:37:19,040 --> 00:37:21,520 Speaker 1: best call right now in or the best growth story 682 00:37:21,640 --> 00:37:24,200 Speaker 1: in tech right now? I would say, given the cuttered 683 00:37:24,280 --> 00:37:27,080 Speaker 1: macro environment, I would put it put Microsoft on that 684 00:37:27,160 --> 00:37:30,040 Speaker 1: this because it's a safety stock as well as it 685 00:37:30,160 --> 00:37:34,560 Speaker 1: does everything right. Even in a bad, bad, bad economics environment, 686 00:37:34,600 --> 00:37:37,320 Speaker 1: they'll still grow tender. And it's Microsoft. The story a 687 00:37:37,480 --> 00:37:40,160 Speaker 1: cloud story, it is all. It's purely a cloud story. 688 00:37:40,200 --> 00:37:42,239 Speaker 1: So it's not a Windows story at all anymore. No, 689 00:37:42,320 --> 00:37:44,359 Speaker 1: but Windows does provide a lot of good cash flow, 690 00:37:44,880 --> 00:37:47,759 Speaker 1: except and again Office provides a very good cash flow. 691 00:37:47,840 --> 00:37:50,960 Speaker 1: It has two cash cows that fund anything they want 692 00:37:51,000 --> 00:37:53,839 Speaker 1: to fund, you know, to be honest, video games, activision 693 00:37:53,880 --> 00:37:56,360 Speaker 1: like and they can do anything out there. But what 694 00:37:56,520 --> 00:37:59,480 Speaker 1: happens is Microsoft is now the de facto thing you 695 00:37:59,680 --> 00:38:02,520 Speaker 1: need no matter where you are, what enterprise you are. 696 00:38:02,880 --> 00:38:04,759 Speaker 1: And it is a growth story for me because you 697 00:38:04,800 --> 00:38:07,520 Speaker 1: know what, they will double their revenue in the next 698 00:38:07,560 --> 00:38:09,960 Speaker 1: five years. Can you imagine that at the company with 699 00:38:10,000 --> 00:38:12,640 Speaker 1: three billion revenue will double the revenue in the next 700 00:38:12,680 --> 00:38:15,200 Speaker 1: five years. Oh yeah, yeah, I mean it's just an awesome, 701 00:38:15,320 --> 00:38:18,600 Speaker 1: awesome story. Anora Rana, senior software in I T Services 702 00:38:18,600 --> 00:38:23,080 Speaker 1: analyst Bloomberg Intelligence. Actually in the office he's supposed to 703 00:38:23,320 --> 00:38:26,560 Speaker 1: be in, which is the New York City world headquarters 704 00:38:26,680 --> 00:38:30,600 Speaker 1: of Bloomberg and Bloomberg Intelligence. A Bloomberg Intelligence analysts. What's 705 00:38:30,600 --> 00:38:32,520 Speaker 1: the percentage of them that are in the office. I 706 00:38:32,560 --> 00:38:35,120 Speaker 1: don't know. I'm gonna say maybe half, you know, I 707 00:38:35,200 --> 00:38:41,280 Speaker 1: don't know who knows. Thanks for listening to the Bloomberg 708 00:38:41,400 --> 00:38:44,800 Speaker 1: Markets podcast. You can subscribe and listen to interviews with 709 00:38:44,840 --> 00:38:49,640 Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. 710 00:38:49,920 --> 00:38:53,799 Speaker 1: I'm on Twitter at Matt Miller three. Pet On Ball 711 00:38:53,800 --> 00:38:56,680 Speaker 1: Sweeney I'm on Twitter at pt Sweeney. Before the podcast, 712 00:38:56,760 --> 00:38:59,239 Speaker 1: you can always catch us worldwide at Bloomberg Radio.