WEBVTT - We Must Start Planning For a Permanent Pandemic: Andreas Kluth 0:00:00.800 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.560 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.640 at Bloomberg dot com slash podcast. All right, bring in 0:00:22.840 --> 0:00:27.040 Andrea's cluthe right now, a Bloomberg opinion calumnist who says 0:00:27.160 --> 0:00:31.920 we must start planning for a permanent pandemic. And um, 0:00:32.000 --> 0:00:34.760 Andrea's I want to say, this is getting more and 0:00:34.880 --> 0:00:39.040 more understandable by the day. But are you being a 0:00:39.080 --> 0:00:44.080 little bit too pessimistic? I mean, you say, recent developments 0:00:44.120 --> 0:00:49.600 suggests we may never achieve HERD immunity. Yeah, that's correct, 0:00:49.760 --> 0:00:52.080 And that sounds pestimistic. It wasn't meant to be. And 0:00:52.120 --> 0:00:54.480 if you read the article, you know the tone is 0:00:54.840 --> 0:00:56.960 of anything. I'm trying to be cavalier about it and 0:00:57.160 --> 0:01:01.040 in them almost optimistic. Note. I think if this is, 0:01:02.040 --> 0:01:04.440 if this is the way it's going, Matt, I think 0:01:04.440 --> 0:01:07.600 it's better to be realistic. In fact, you're into planning 0:01:07.600 --> 0:01:11.840 and into scenarios as a as a scenario then, UM, 0:01:11.880 --> 0:01:15.000 just lying to yourself and and as we believe, as 0:01:15.080 --> 0:01:17.360 we have been like, oh, it'll be over next month, 0:01:17.440 --> 0:01:19.479 it'll be over in the summer and the fall. We've 0:01:19.480 --> 0:01:22.840 been through this a few times, and um, we can 0:01:22.880 --> 0:01:25.880 go through the arguments, Matt. But there is a bit 0:01:25.920 --> 0:01:30.960 of a consensus some yeah, that that it may be 0:01:31.200 --> 0:01:35.920 quasi permanent, which is what Paul Bloomberg opinion columnists have 0:01:36.040 --> 0:01:38.399 been saying to me a lot lately. If you read 0:01:38.440 --> 0:01:42.080 the article I'm pulling boats out of the middle of 0:01:42.120 --> 0:01:46.080 the story, I read it start to finish me too well. 0:01:46.880 --> 0:01:48.920 Untry asked you talk about it in the in the 0:01:49.240 --> 0:01:52.480 in your piece about the whole concept of herd immunity. 0:01:52.520 --> 0:01:54.880 I think I think one of the working hypothesis in 0:01:55.640 --> 0:01:57.880 out there is that the combination of people that have 0:01:58.000 --> 0:02:03.480 already um had the virus plus those that are vaccinated 0:02:03.520 --> 0:02:06.240 will be enough to get us to quote unquote herd immunity. 0:02:06.920 --> 0:02:10.200 What's the kind of argument there? The counter argument is, so, 0:02:10.440 --> 0:02:12.840 so you're right, so you can get immunity from having 0:02:12.880 --> 0:02:15.480 had it and having antibodies and being immune that way, 0:02:15.800 --> 0:02:18.839 or from being vaccinated in all the other diseases out there, 0:02:18.840 --> 0:02:22.359 including this one. We thought the two to boil the 0:02:22.400 --> 0:02:25.440 many arguments down to the two main ones. The first 0:02:25.520 --> 0:02:28.280 is we have now evidence for South Africa and Brazil 0:02:29.560 --> 0:02:33.320 that having had the disease does not make you immune 0:02:33.360 --> 0:02:37.920 to new variance, new mutations of the virus, so that 0:02:38.000 --> 0:02:41.440 there is no what they call cross variant immunity that 0:02:41.639 --> 0:02:45.960 essentially needs that path to herd immunity isn't may not 0:02:46.040 --> 0:02:49.480 be available. That leaves everything on the vaccines, and as 0:02:49.520 --> 0:02:51.880 you know, that's going well in some places and others, 0:02:51.919 --> 0:02:55.760 but that this isn't about that. The the virus is mutating, 0:02:55.880 --> 0:02:59.799 mutating faster. Probably I'm calling it an arms race between 0:03:00.080 --> 0:03:04.079 new vaccines for new variants and new variants. But keep 0:03:04.120 --> 0:03:07.880 in mind there the evolution happened. It doesn't care where 0:03:08.000 --> 0:03:11.519 it happens. If you vaccinate everyone in Israel, which is 0:03:11.560 --> 0:03:15.320 about half of the people there, fine, maybe they could 0:03:15.360 --> 0:03:19.560 be taked temporarily. But the next door Syria or Palestine, 0:03:19.560 --> 0:03:23.000 you know, or in Africa, it is mutating and the 0:03:23.080 --> 0:03:27.000 new strain they will be unprotected against. And and that 0:03:27.120 --> 0:03:30.239 is that arms race we're in and we may lose. 0:03:31.160 --> 0:03:34.240 So I don't know enough about this, and you're the 0:03:34.280 --> 0:03:38.200 historian um, which is why we have you on. I 0:03:38.240 --> 0:03:42.520 thought that, for example, in the Spanish flu epidemic, which 0:03:42.560 --> 0:03:44.480 I know it's probably not PC to call it the 0:03:44.520 --> 0:03:51.880 Spanish flu pandemic Um, we saw that virus evolved in 0:03:51.920 --> 0:03:55.160 a way that just made it like the common flu 0:03:55.360 --> 0:03:59.320 that we all get today. UM. Basically it's still spread 0:03:59.360 --> 0:04:04.520 around but stopped killing people. And epidemiologists that we've spoken 0:04:04.520 --> 0:04:07.720 with have said that's a possibility with this virus as well. 0:04:07.720 --> 0:04:09.840 Why do you not think that's a likely path for 0:04:09.920 --> 0:04:14.640 it to take. I'm actually not have stating in opinion 0:04:14.960 --> 0:04:18.960 I think this. I'm giving scenarios. First of all, the 0:04:19.120 --> 0:04:24.479 normal thing with with pathogens, bacterial, viral doesn't matter is 0:04:24.480 --> 0:04:28.359 that the longer they evolved, they will eventually get better 0:04:28.400 --> 0:04:31.919 and get more transmissible but weaker, because it's actually the 0:04:31.960 --> 0:04:34.400 way it gives you an evolutionary advantage. If you don't 0:04:34.480 --> 0:04:37.359 kill your host, you get to propagate longer and hop 0:04:37.400 --> 0:04:40.320 onto the next one. But what we've seen, and this 0:04:40.400 --> 0:04:42.560 is why the article is coming out now, is what 0:04:42.640 --> 0:04:47.680 we've seen in recent months is varying submerging that are 0:04:47.920 --> 0:04:53.960 more transmissible but not less severe and there's the math. 0:04:54.080 --> 0:04:57.640 The epidemiological math is interesting and I linked to it 0:04:57.720 --> 0:05:00.800 is if you have a virus that mute, that gets 0:05:01.200 --> 0:05:04.800 more virulent, worse basically, but not more transmissible, you have 0:05:04.960 --> 0:05:08.599 linear growth in cases and debts. But if you have 0:05:08.760 --> 0:05:12.040 what we have now of a virus that mutates, becomes 0:05:12.080 --> 0:05:17.000 more transmissible and not less severe, you have exponential growth. 0:05:17.440 --> 0:05:20.240 And that is this. So, so what I'm saying is 0:05:20.279 --> 0:05:22.679 not that we're all doom. No, I'm not. I'm saying 0:05:22.720 --> 0:05:26.080 this is a scenario that so many people are taking 0:05:26.160 --> 0:05:29.240 very seriously. It just feels like, right now we have 0:05:29.279 --> 0:05:32.200 to start planning for it. Andres you you link to 0:05:32.240 --> 0:05:36.080 that math from Adam Karski at the London School of 0:05:36.160 --> 0:05:39.640 Hygiene and Tropical Medicine, and I'm going to click on that. 0:05:39.680 --> 0:05:41.680 I haven't read it yet, but I'm just thinking, like, 0:05:41.760 --> 0:05:44.560 it's only been a minute, right, We've only been We're 0:05:44.600 --> 0:05:50.360 only a year into this, and the um pandemic lasted 0:05:50.400 --> 0:05:52.960 a couple of years before it started to peter out. 0:05:53.120 --> 0:05:57.080 So I'm just I guess I'm optimist. I'm hopeful that 0:05:57.640 --> 0:06:00.680 we get an end not not only of the pandemic, 0:06:00.760 --> 0:06:03.440 but also eventually we get an end to these lockdowns, 0:06:04.480 --> 0:06:07.360 and you're allowed to be. Can I say one last thing? 0:06:07.360 --> 0:06:11.160 Do we have time? Oh? Yeah? Ye? For me, the 0:06:11.160 --> 0:06:14.880 purpose was to make this the curtain raiser, basically a 0:06:14.880 --> 0:06:17.680 new premise or a new scenario, which I want to 0:06:17.720 --> 0:06:21.560 follow up with lots of other columns if this is 0:06:21.600 --> 0:06:25.080 the case, because actually I'm I'm optimistic on how how 0:06:25.120 --> 0:06:29.720 resilient we are if this becomes the scenario. What does 0:06:29.760 --> 0:06:32.840 that mean for the economy, for politics, for how we work, 0:06:32.880 --> 0:06:36.080 how we study and learn the kids, how we exercise, 0:06:36.120 --> 0:06:38.440 how we travel, all these other things. Because you will 0:06:38.480 --> 0:06:41.800 see amazing changes, and you will see us become the 0:06:41.920 --> 0:06:44.919 future us in in this and it will not be 0:06:44.960 --> 0:06:47.440 all bad. And by the way the World Happens Index 0:06:47.520 --> 0:06:50.640 just came out this week, we're almost as happy as 0:06:50.680 --> 0:06:53.839 we've always been, So, you know, not the end of 0:06:53.839 --> 0:06:58.159 the world if the pandemic is almost permanent. And I 0:06:58.160 --> 0:07:00.520 think that's one of misunderstanding, So that want to clear 0:07:00.520 --> 0:07:03.080 that up. So Andrea's just we have about third thirty 0:07:03.120 --> 0:07:06.000 seconds here. What are you hearing from the biotech industry, 0:07:06.000 --> 0:07:09.720 from a pharma industry about their ability to create vaccines 0:07:09.760 --> 0:07:12.400 that may be flexible and in order to handle the 0:07:12.440 --> 0:07:17.760 various variants. I guess I'm very bullish on the technology. 0:07:17.960 --> 0:07:21.040 I don't talk about companies m RNA, which I've written 0:07:21.040 --> 0:07:24.480 about in the previous article, because this is an unbelievable 0:07:24.480 --> 0:07:28.800 opportunity for that technology to use messenger RNA to make 0:07:28.840 --> 0:07:32.200 any protein we want for the body to create community 0:07:32.200 --> 0:07:36.160 against that protein, because those are the vaccine. If we 0:07:36.240 --> 0:07:38.840 have a shot in the in the arms race I 0:07:38.920 --> 0:07:42.680 described of winning it, it's because of those vaccines. And 0:07:42.800 --> 0:07:45.320 once we've built up as we are now doing this 0:07:45.680 --> 0:07:50.800 enormous manufacturing and research capacity for that technology, we can 0:07:50.960 --> 0:07:55.000 use it against cancer. Cancer that's the next goal, and 0:07:55.120 --> 0:07:58.760 that would be definitely reason for optimism. Andreas, thanks very 0:07:58.840 --> 0:08:02.560 much for joining us. Andrea's cloth is a Bloomberg Opinion calumnists. 0:08:02.560 --> 0:08:05.920 He's also the author of Hannibal and Me, and you 0:08:05.960 --> 0:08:07.840 can read his work in the work of his colleagues 0:08:08.080 --> 0:08:11.720 on the terminal by typing O, P, I and go 0:08:12.680 --> 0:08:18.800 this is Bloomberg. Let's talk a little bit about real 0:08:18.960 --> 0:08:21.400 estate and what it's gonna look like as we come 0:08:21.440 --> 0:08:25.640 out of this pandemic, assuming that we will. Um The 0:08:25.720 --> 0:08:29.240 vaccine rollout is going really well in the US and 0:08:29.520 --> 0:08:32.480 the UK UM, and I want to bring in Lisa 0:08:32.520 --> 0:08:35.120 Kni for that. She's a co leader for National, the 0:08:35.280 --> 0:08:39.880 national real estate practice at Eisner Amper and Lisa, it's 0:08:39.920 --> 0:08:42.880 really interesting because this morning we saw some headlines about 0:08:43.040 --> 0:08:46.200 banks in Hong Kong that are giving up space. And 0:08:46.240 --> 0:08:49.040 of course I've spoken to the CEO of Deutsche Bank 0:08:49.080 --> 0:08:51.960 who thinks commercial real estate is one place where he 0:08:52.000 --> 0:08:55.720 can cut costs and then continue to save money going forward. 0:08:56.000 --> 0:08:58.600 Are we gonna see in San Francisco in New York 0:08:58.679 --> 0:09:03.400 a lot of big tenants start to pare down their uh, 0:09:03.600 --> 0:09:07.360 you know, their leases. Yes, thank you for having me 0:09:07.440 --> 0:09:10.200 this morning. So when you look at real estate overall, 0:09:10.280 --> 0:09:13.079 and the story is still being written, and but it's 0:09:13.080 --> 0:09:15.880 certainly with the tenants, as you had mentioned um in 0:09:15.920 --> 0:09:18.920 your opening description. And so some people believe that the 0:09:19.000 --> 0:09:21.120 workers are going to be more productive outside of the 0:09:21.160 --> 0:09:25.080 house versus some people's picture is saying, we still need 0:09:25.080 --> 0:09:28.679 that corporate culture environment to get innovation and growth, and 0:09:28.720 --> 0:09:31.640 so you still need that connectivity of the office, and 0:09:31.720 --> 0:09:33.720 that story is going to be with the tenant and 0:09:33.760 --> 0:09:37.760 how comfortable they feel bringing their teams back into the 0:09:37.840 --> 0:09:40.719 office market. And so we've already seen. Did they have 0:09:40.840 --> 0:09:42.319 to do that to the extent that they had them 0:09:42.320 --> 0:09:45.080 before the pandemic? I mean, I totally I'm totally down 0:09:45.080 --> 0:09:47.920 with everything you just said. But um, isn't there a 0:09:47.960 --> 0:09:51.680 new world facing us? Yeah? And by the way, before 0:09:51.800 --> 0:09:54.440 the new world faced us New York City and San Francisco, 0:09:54.520 --> 0:09:57.720 that same story was being written that people were paring 0:09:57.760 --> 0:10:01.839 down space and starting to at alternatives for their office 0:10:01.880 --> 0:10:04.400 spake whe whether it was hub and spoke models where 0:10:04.400 --> 0:10:07.839 there was no elevators and or or doing working outside 0:10:07.960 --> 0:10:10.600 of those main hub cities. So this story was being 0:10:10.640 --> 0:10:14.640 written pre pandemic, and it's also being written post pandemic, 0:10:14.920 --> 0:10:16.680 and it's going to see who the winners are going 0:10:16.720 --> 0:10:19.480 to be post pandemic and saying what are those office 0:10:19.520 --> 0:10:21.960 leases going to look like? How are the tenants are 0:10:22.000 --> 0:10:24.080 going to say, maybe we're going to take space. It's 0:10:24.120 --> 0:10:25.880 going to look a little bit different because we have 0:10:25.960 --> 0:10:29.640 to dedentify now when before we were using less space 0:10:29.640 --> 0:10:32.120 for a person, now we need to increase that space. 0:10:32.400 --> 0:10:34.480 And are we going to ask for shorter term leases 0:10:34.600 --> 0:10:37.079 which is going to drive down valuation? And how are 0:10:37.080 --> 0:10:40.560 those tenants going to negotiate with the landlords to figure 0:10:40.600 --> 0:10:44.280 out what spacing requirements make sense for them. So those cities, 0:10:44.559 --> 0:10:47.080 it's still a story that's going to be written, and 0:10:47.120 --> 0:10:49.480 again it's going to all depend on that tenant and 0:10:49.520 --> 0:10:52.040 that behavior of the people of how they feel when 0:10:52.040 --> 0:10:55.719 they want to get back into that office space. So coworking, 0:10:55.760 --> 0:10:58.000 which people were saying there's too much on the market, 0:10:58.320 --> 0:11:00.560 and how that was going to impact. And I think 0:11:00.600 --> 0:11:03.000 in the beginning of the pandemic, people were writing off 0:11:03.360 --> 0:11:06.920 in disparaging coworking space, but that actually might tend to 0:11:06.960 --> 0:11:09.720 be a solution for some of these larger companies that 0:11:09.760 --> 0:11:12.839 are looking to downsize from their bigger office spaces that 0:11:12.880 --> 0:11:16.319 they held in these bigger cities. Were you disparaging office 0:11:16.320 --> 0:11:20.160 spaceball coworking office space? Of course, I'm I'm as soon 0:11:20.160 --> 0:11:22.960 as I get my job, and the first one is Saturday. 0:11:23.760 --> 0:11:26.719 I'm back in the Bloomberg. See, I gotta tell you, 0:11:26.760 --> 0:11:31.000 I gotta tell you both. Um Lisa, right when he 0:11:31.080 --> 0:11:34.080 started we work, I went to hang out with what's 0:11:34.080 --> 0:11:37.160 his name now he's um, I can't remember his name's 0:11:37.760 --> 0:11:40.679 billionaire in the past ran we work. Anyway. I went 0:11:40.720 --> 0:11:43.199 down there about ten years ago and it was such 0:11:43.200 --> 0:11:45.440 a cool space to hang out. I thought it was awesome, 0:11:45.440 --> 0:11:47.720 but now you're right, people rip on it. Co working 0:11:48.160 --> 0:11:50.160 Lisa and I wonder I'd love to get a sense 0:11:50.160 --> 0:11:53.200 of valuation in the corporate office space. Have we seen 0:11:53.200 --> 0:11:55.679 any transactions, because I wouldn't be surprised to see a 0:11:56.440 --> 0:12:00.760 building on Park Avenue or Fifth Avenue trade hands at 0:12:00.840 --> 0:12:03.240 of what it would have two years ago. Have we 0:12:03.280 --> 0:12:06.199 seen anything? So there's been a lot less trading, and 0:12:06.360 --> 0:12:10.760 cap crates really have been relatively consistent because because there 0:12:10.760 --> 0:12:12.800 has been a lot less trading, and and there's still 0:12:12.840 --> 0:12:15.920 a major disparity between the bid and the ask. So 0:12:16.040 --> 0:12:19.040 you've seen some deals, but people are really disciplined with 0:12:19.080 --> 0:12:22.120 their capital right now, which is good um, and so 0:12:22.200 --> 0:12:24.760 we haven't seen as much trading, and so you're not 0:12:24.840 --> 0:12:28.520 really seeing the valuation shifts. And right now, the leases 0:12:28.559 --> 0:12:31.400 in place are still long term leases. And again, as 0:12:31.440 --> 0:12:34.080 I mentioned before, that story is going to be once 0:12:34.080 --> 0:12:38.120 those leases are set to expire and the revaluation occurs, 0:12:38.480 --> 0:12:40.800 that's really we're gonna We're we're going to see the 0:12:40.880 --> 0:12:43.560 trend of either the values are able to remain or 0:12:43.600 --> 0:12:48.080 they're going to change. By the way, what I like 0:12:48.160 --> 0:12:50.440 to know, Matt, because when we walk around in New York, 0:12:50.440 --> 0:12:53.640 what really really jumps out at you because you're at 0:12:53.679 --> 0:12:57.439 ground level on the street is retail space and the vacancies. 0:12:57.960 --> 0:12:59.280 At least it give us a sense of kind of 0:12:59.280 --> 0:13:01.120 how retail space is looking on some of these major 0:13:01.200 --> 0:13:05.079 urban markets. Yeah, and that was struggling before the pandemic, 0:13:05.160 --> 0:13:08.079 the retail space because the biggest problem in retail is 0:13:08.120 --> 0:13:11.880 not even e commerce. The biggest problem in retail is 0:13:11.920 --> 0:13:14.160 that oversupply at the stores. There was just there's too 0:13:14.240 --> 0:13:16.920 many out there, and so that's going to be the 0:13:16.960 --> 0:13:20.120 biggest struggle UM and and figure out you need capital 0:13:20.200 --> 0:13:23.840 to reposition those those retail spaces. And there's really no 0:13:23.920 --> 0:13:27.360 capital in that marketplace right now. And so retail is 0:13:27.400 --> 0:13:30.800 gonna has been struggling and probably will continue to struggle, 0:13:31.200 --> 0:13:34.040 um post pandemic. That's going to be a really the 0:13:34.040 --> 0:13:36.959 biggest concern of that. But remember it was struggling before 0:13:36.960 --> 0:13:42.400 we even had this happen. All right, So what's the 0:13:42.240 --> 0:13:44.640 over the next twenty seconds, I'd love to just get 0:13:44.679 --> 0:13:47.400 your thoughts here. Are we going to see a rebound, 0:13:47.480 --> 0:13:53.439 a snap back rebound in real estate? So they're Snappack rebound. 0:13:53.520 --> 0:13:55.640 So when we look at real estate overall, there's been 0:13:55.720 --> 0:13:59.880 some real winners and losers with each property sector. So 0:14:00.080 --> 0:14:03.280 each property sector has been faring um and there's always 0:14:03.320 --> 0:14:05.640 going to be an outlier within those. So when you're 0:14:05.640 --> 0:14:09.000 looking at an industrial center, that's been a darling of 0:14:09.040 --> 0:14:11.800 the industry and that's going to continue to be um. 0:14:11.840 --> 0:14:15.000 And so people are liking that hospitality, you know, leasure 0:14:15.040 --> 0:14:17.520 travels coming back. We're reading something in the news every 0:14:17.559 --> 0:14:19.880 single day about you know, people are ready to start 0:14:19.960 --> 0:14:23.360 traveling and so large block and convention centers may not, 0:14:23.640 --> 0:14:27.200 but leisure certainly is. So there is hope for the hospitality, 0:14:27.800 --> 0:14:29.280 hope for there or at least thanks so much for 0:14:29.360 --> 0:14:31.600 joining us. Lisa Nick, Co leader of the national real 0:14:31.680 --> 0:14:36.440 Estate practice at Eisner Amper. We all know the bull 0:14:36.480 --> 0:14:39.840 case for equities. It's kind of ingrained into our minds now. 0:14:40.120 --> 0:14:43.960 Persistent low rates, fiscal stimulus, the reopening trade, even some 0:14:43.960 --> 0:14:47.120 some good earnings. What keeps people up at night that 0:14:47.240 --> 0:14:50.480 are bullish? Let's talk to Louis Navalier, chairman, founder and 0:14:50.600 --> 0:14:54.800 c IO of Navallier and Associates based in Renown, Nevada. 0:14:55.320 --> 0:15:00.240 So Louis the bullish calling equities it's pretty solid. Are 0:15:00.280 --> 0:15:04.280 you a big proponent of that book call? Yes? The 0:15:04.360 --> 0:15:08.040 reason is sales and earnings momentum are still accelerate. So 0:15:08.120 --> 0:15:11.280 the first quarter results are going to be the peak 0:15:11.320 --> 0:15:13.680 for sales and earnings momentum. And we're gonna have easy 0:15:13.720 --> 0:15:17.920 comparisons all year because of the pandemic. But the peak 0:15:18.000 --> 0:15:20.760 of sales earnings momentum will happen in April and May. 0:15:20.800 --> 0:15:25.040 When we get those first quote results, Well, is it 0:15:25.040 --> 0:15:27.880 going to bring with it a lot of inflation um? 0:15:27.920 --> 0:15:31.400 And do you believe that to be transitory? It looks 0:15:31.400 --> 0:15:34.120 like it's transitory. I think what Wall Street wanted is 0:15:34.160 --> 0:15:37.600 it one of the Fed to acknowledge that inflation exists, 0:15:37.640 --> 0:15:40.520 and they when they raise their inflation target this year 0:15:40.600 --> 0:15:44.160 the two point four um that calm Wall straight down. 0:15:44.680 --> 0:15:47.200 The other thing is that there's a dollar was week 0:15:47.280 --> 0:15:50.240 for a while, but since late um February the dollars 0:15:50.560 --> 0:15:53.360 strengthening here quite a bit. So events like what happened 0:15:53.360 --> 0:15:55.920 in Turkey earlier this week, all those things to strengthen 0:15:56.000 --> 0:15:59.160 the dollar, plus all the e t v's money printing 0:15:59.240 --> 0:16:02.720 and MMT that where they just print endless money so 0:16:02.800 --> 0:16:05.880 that's that's all helping the strengthen the dollar, plus our GDP. 0:16:06.080 --> 0:16:08.800 You know, they're in a double differcession in Europe and 0:16:08.920 --> 0:16:13.640 uh we're recovering, so Louis, you know, there's been a 0:16:13.760 --> 0:16:16.240 question of kind of do I stick with the tried 0:16:16.320 --> 0:16:18.600 and true big tech growth names that have worked so 0:16:18.640 --> 0:16:21.440 well for me really since the financial crisis, or do 0:16:21.520 --> 0:16:23.880 I play this uh you know, kind of pivot trade 0:16:23.920 --> 0:16:27.640 this uh this reopening trade, if you will, and maybe 0:16:27.680 --> 0:16:31.560 go to some more economic sensitive areas. How are you 0:16:31.600 --> 0:16:36.640 thinking about your portfolio allocation? You right here? Well, I'm 0:16:36.680 --> 0:16:39.720 a growth manager and we got off to a very 0:16:39.720 --> 0:16:42.760 strong start to share, mostly from international e d rs, 0:16:43.120 --> 0:16:46.920 and obviously we got caught up in that NASAC capiculation 0:16:47.160 --> 0:16:50.040 a few weeks ago, but I'm very happy with how 0:16:50.120 --> 0:16:52.720 things are coming back. Now. I'm not gonna be find 0:16:52.760 --> 0:16:57.520 the financials because that's a valued managers thing, but the 0:16:57.640 --> 0:17:00.920 c Bilker is greater financials. Okay. As far as energy 0:17:01.120 --> 0:17:03.360 is concerned, we are starting to pick up some energy stocks, 0:17:03.480 --> 0:17:09.399 especially midstream, and so uh you know, obviously the that 0:17:09.640 --> 0:17:12.359 that's starting to look look a little more growthy, although 0:17:12.440 --> 0:17:14.959 technically that's a value stock as well. And then of 0:17:15.000 --> 0:17:18.160 course we have the chemical shortages. We have the plastic 0:17:18.160 --> 0:17:21.160 shortage in America and the big freeze in Texas, so 0:17:21.200 --> 0:17:23.840 that those are showing up on the energy side. So 0:17:24.000 --> 0:17:26.600 there's the markets broughtening out here and that's a that's 0:17:26.640 --> 0:17:29.920 a good thing. So this whole value surge we had 0:17:30.080 --> 0:17:31.840 is a good thing. But every time you go on 0:17:31.880 --> 0:17:35.480 earning season, you're gonna have to buy the value stocks averagage. 0:17:37.160 --> 0:17:41.000 Why do you like or why were you buying a 0:17:41.200 --> 0:17:43.040 d R s at the beginning of the year. Is 0:17:43.080 --> 0:17:47.040 that something that you do? Um at the value and 0:17:47.080 --> 0:17:51.760 associates especially well, we have a lot of foreign A 0:17:51.840 --> 0:17:53.720 d rs. We've always had a lot of Itsraeli A 0:17:53.840 --> 0:17:55.840 d R because you know, Israel's got a great silicon 0:17:55.960 --> 0:17:58.320 vallee a lot to get bought out. But we've had 0:17:58.400 --> 0:18:00.359 Chinese a d r s for some time than our 0:18:00.440 --> 0:18:03.360 perception was. Is that, for lack of a better word, 0:18:03.480 --> 0:18:06.000 China one the election and uh and we need to 0:18:06.000 --> 0:18:09.800 beat them or join them and um so um we 0:18:09.920 --> 0:18:14.760 joined them all right, Louis, So I know you growth 0:18:14.880 --> 0:18:17.760 and there's obviously tech is part of that. Are you 0:18:17.800 --> 0:18:20.960 concerned about regulatory risk? Or how concerned are you about 0:18:20.960 --> 0:18:23.720 regulatory risk for big tech. We're gonna have uh, some 0:18:23.800 --> 0:18:26.679 of the big tech CEOs Zuckerberg and so on in 0:18:26.720 --> 0:18:30.480 front of Congress again tomorrow. I'm pretty immune to that. 0:18:30.920 --> 0:18:34.120 My biggest check would be like a navidio UM so 0:18:34.160 --> 0:18:36.360 that's just a chip stock. And obviously there's a chip 0:18:36.359 --> 0:18:40.320 shortage and uh so the semi conductor space is very healthy. 0:18:40.359 --> 0:18:43.159 But yeah, I'm not a major holder of of of 0:18:43.240 --> 0:18:47.640 the check that is restricting Jane censorship and all that stuff. 0:18:47.680 --> 0:18:50.320 We're not part of that. But but you do love 0:18:50.480 --> 0:18:56.159 the uh Silicon Valley, I mean the original, um, the 0:18:56.200 --> 0:18:59.280 original definition of that. You began publishing research back in 0:19:00.119 --> 0:19:03.520 d So I'm guessing you're moved by you know, Andy 0:19:03.560 --> 0:19:08.480 Grove and and crew, like the the original chip producing 0:19:09.480 --> 0:19:13.119 UH companies. What do you think about the Intel news 0:19:13.119 --> 0:19:17.000 today that they're gonna, um start building a couple of 0:19:17.040 --> 0:19:20.560 new foundries. Well, that's great news, but there's an acute 0:19:20.600 --> 0:19:23.400 chip shortage. But you know, Intel's biggest problem has been 0:19:23.440 --> 0:19:26.480 they've been losing out to advanced micro devices. You know, 0:19:26.560 --> 0:19:29.840 Apple obviously builds their own chips, so Intel is trying 0:19:29.880 --> 0:19:32.400 to get its mojo back. But you know, worst case, 0:19:32.480 --> 0:19:35.440 they can just do what Taiwan does and start to 0:19:35.480 --> 0:19:38.840 make chips are in short supply, by the way, in Taiwan, 0:19:38.920 --> 0:19:41.639 they gotta drout over there, and that's that's another compilation 0:19:41.680 --> 0:19:44.520 to a chip shortage. Um, but we own a lot 0:19:44.560 --> 0:19:49.359 of Taiwan semi conductor and microelk it. Louis just about 0:19:49.400 --> 0:19:52.240 the thirty seconds. What's kind of your highest conviction work 0:19:52.320 --> 0:19:56.200 that you guys are doing right now? UM? I still 0:19:56.400 --> 0:20:00.280 really really like the cloud Okay, so you know, like 0:20:00.359 --> 0:20:05.359 service now are great. Obviously we like cybersecurity cloudfare. N 0:20:05.359 --> 0:20:09.680 e T is a good stock. Um. My favorite e 0:20:09.840 --> 0:20:12.640 V company is actually n i U. It's a Chinese 0:20:12.640 --> 0:20:17.120 company that makes uh electric bicycles and scooters. Um, that's 0:20:17.160 --> 0:20:20.800 my far. My favorite d Q, which makes Polly silicon 0:20:20.960 --> 0:20:24.119 for the solar sales in China is good. Um. We 0:20:24.200 --> 0:20:29.119 also have, you know, the inverter stocks like N's Energy. Louie, 0:20:29.160 --> 0:20:30.840 great to get some time with you, and I hope 0:20:30.880 --> 0:20:32.680 we get to talk to you again a little bit 0:20:32.680 --> 0:20:36.920 more in depth. Louis Navier joining us there, founder and 0:20:37.000 --> 0:20:40.240 CEO of Navier and Associates, talking about the tech stocks 0:20:40.240 --> 0:20:45.440 that he's interested out a Reno, Nevada. This is Bloomberg 0:20:48.320 --> 0:20:52.159 Craig So you're Auto's team leader for Bloomberg News, and 0:20:52.200 --> 0:20:55.600 he's got a fascinating story in the new double issue 0:20:55.640 --> 0:20:59.120 of Bloomberg Business Week magazine entitled the end of Testle's 0:20:59.160 --> 0:21:03.640 Dominance Maybe closer than it appears. Greg, thanks so much 0:21:03.640 --> 0:21:06.000 for joining us here. Talk to us about some of 0:21:06.040 --> 0:21:07.960 the games that are being made by some of the 0:21:07.960 --> 0:21:10.520 traditional automakers. A lot of noise coming out of Volkswagen 0:21:10.600 --> 0:21:14.760 in particular. They had a huge week last week, where 0:21:15.040 --> 0:21:18.919 it really started on Monday with an event that was 0:21:19.359 --> 0:21:24.160 kind of shamelessly similar to Tesla's Battery Day. Volkswagen called 0:21:24.200 --> 0:21:27.600 There's Power Day, but they spent two hours talking about 0:21:27.640 --> 0:21:33.639 their battery strategy, from manufacturing too uh materials to partners 0:21:34.000 --> 0:21:37.320 uh you know, charging stations as well. They really sort 0:21:37.359 --> 0:21:39.760 of covered the gamut, and and you know, it's it's 0:21:39.800 --> 0:21:44.400 interesting because this is a company that really since when 0:21:44.400 --> 0:21:47.840 they were caught with with the diesel emission scandal, they 0:21:47.880 --> 0:21:50.120 really sort of knew right off the bat that they 0:21:50.400 --> 0:21:53.720 needed to make amends. But the auto industry does move 0:21:53.720 --> 0:21:56.080 in product cycles that are you know, five or so 0:21:56.240 --> 0:21:58.600 years and so what we're really seeing is is kind 0:21:58.600 --> 0:22:02.280 of a realization of this you know, change in strategy 0:22:02.320 --> 0:22:04.320 that they were sort of forced to make away from 0:22:04.359 --> 0:22:07.560 diesels and toward electric vehicles. And what we're seeing as 0:22:07.600 --> 0:22:09.960 well is just you know, sort of the initial fruits 0:22:09.960 --> 0:22:12.359 of that that they are now building on to really 0:22:12.359 --> 0:22:15.040 try and become you know, actually that they are coming 0:22:15.040 --> 0:22:17.320 out and saying we want to be the world's biggest 0:22:17.359 --> 0:22:22.280 electric vehicle maker. By so uh, for those folks who 0:22:22.280 --> 0:22:26.240 have ever lived in Germany, we have a uh television 0:22:26.280 --> 0:22:30.440 talk show host called Harold Schmidt. And after David Letterman 0:22:30.520 --> 0:22:33.040 got really popular in the US, Harold Schmidt, who kind 0:22:33.040 --> 0:22:34.679 of looks a little like Letterman, said, you know what, 0:22:34.680 --> 0:22:36.639 I'm just going to do the exact same thing. Where's 0:22:36.680 --> 0:22:39.840 the suit, where's the sneakers? Has the same mimics, his 0:22:40.080 --> 0:22:43.400 mimics Letterman's delivery, just as the whole top ten list, 0:22:43.480 --> 0:22:46.720