1 00:00:00,400 --> 00:00:03,960 Speaker 1: Strap on your parachute. It's time for What Goes Up 2 00:00:04,120 --> 00:00:13,840 Speaker 1: with Sarah Ponzick and Mike Reagan. Hello and welcome to 3 00:00:13,880 --> 00:00:17,800 Speaker 1: What Goes Up, a Bloomberg weekly markets podcast. I'm Sarah Ponza, 4 00:00:17,880 --> 00:00:20,840 Speaker 1: a reporter on the Cross Asset team, and up Mike Reagan, 5 00:00:21,000 --> 00:00:24,120 Speaker 1: a senior editor at Bloomberg. This week on the show, 6 00:00:24,480 --> 00:00:27,440 Speaker 1: news of a vaccine has ignited a rotation in markets. 7 00:00:27,440 --> 00:00:30,760 Speaker 1: For evidence, some stats, as of midday Tuesday, the SMP 8 00:00:31,440 --> 00:00:35,120 Speaker 1: energy sector was already up thirty seven percent in November, 9 00:00:35,360 --> 00:00:37,879 Speaker 1: which would be the best month on record. Financials are 10 00:00:37,880 --> 00:00:39,640 Speaker 1: in the midst of their best month since two thousand 11 00:00:39,640 --> 00:00:42,159 Speaker 1: and nine. The Russell two thousand, or small caps is 12 00:00:42,159 --> 00:00:44,239 Speaker 1: also on track for its best month in history. Up 13 00:00:45,440 --> 00:00:48,320 Speaker 1: but still. Our guest says the news of a vaccine 14 00:00:48,400 --> 00:00:51,880 Speaker 1: does not change anything about the types of companies he owns. 15 00:00:52,159 --> 00:00:55,200 Speaker 1: The fund he manages is in the nine percentile year 16 00:00:55,240 --> 00:00:58,240 Speaker 1: to date according to Bloomberg data and over the last year, 17 00:00:58,520 --> 00:01:01,639 Speaker 1: three years, and five years. So he'll explain why, and 18 00:01:01,680 --> 00:01:04,040 Speaker 1: as always, we will close out the episode with our 19 00:01:04,120 --> 00:01:07,119 Speaker 1: tradition or gimmick, if you would prefer to call it, 20 00:01:07,240 --> 00:01:10,600 Speaker 1: the craziest thing I saw in markets this week. Uh, sorry, 21 00:01:10,640 --> 00:01:13,520 Speaker 1: you came prepared. I trust I did come prepared. I'd argue, though, 22 00:01:13,560 --> 00:01:15,600 Speaker 1: it's not a gimmick, Mike, it's a tradition. This is 23 00:01:15,640 --> 00:01:20,640 Speaker 1: a real, true tradition tradition, just like mashed potatoes and 24 00:01:20,720 --> 00:01:24,000 Speaker 1: turkey on exactly are you a turkey? Something tells me 25 00:01:24,040 --> 00:01:26,640 Speaker 1: you're like a vegetarian or something. No, Thanksgiving is my 26 00:01:26,640 --> 00:01:29,000 Speaker 1: favorite meal of the air, Mike. I do have a 27 00:01:29,080 --> 00:01:30,760 Speaker 1: vegan brother, which is maybe why you think that, But 28 00:01:30,800 --> 00:01:34,880 Speaker 1: no Thanksgiving. I could eat Thanksgiving dinner every single night 29 00:01:35,080 --> 00:01:37,240 Speaker 1: of the year. I could see you. I have a 30 00:01:37,360 --> 00:01:40,399 Speaker 1: daughter who is a newly minted vegetarian. So it's a 31 00:01:40,400 --> 00:01:43,440 Speaker 1: little challenging this year because I noticed that even my 32 00:01:43,560 --> 00:01:47,039 Speaker 1: vegetable dishes have meat in them, like the bacon bacon. 33 00:01:48,440 --> 00:01:51,120 Speaker 1: It's a tough one. But anyway, as you said, this 34 00:01:51,160 --> 00:01:56,160 Speaker 1: week's guest really uh phenomenal performance from the Investco Global 35 00:01:56,280 --> 00:02:00,440 Speaker 1: Focused Strategy Fund. As you mentioned, Sarah up pretty six, 36 00:02:00,520 --> 00:02:02,920 Speaker 1: closing it on a fifty percent year today gain for 37 00:02:02,960 --> 00:02:07,880 Speaker 1: that fund, top one percentile of similar funds. His name 38 00:02:08,040 --> 00:02:11,640 Speaker 1: is Randy Dishman. Randy, welcome to the show. Thanks glad 39 00:02:11,680 --> 00:02:14,200 Speaker 1: to be here, So, Randy, I you know, I'm looking 40 00:02:14,240 --> 00:02:16,160 Speaker 1: at the holdings of your fund and a lot of 41 00:02:16,200 --> 00:02:19,160 Speaker 1: sort of Internet big tech. I think what this year 42 00:02:19,600 --> 00:02:22,120 Speaker 1: sort of got shorthanded is some of the stay at 43 00:02:22,120 --> 00:02:24,280 Speaker 1: home names, which I know is not what you had 44 00:02:24,280 --> 00:02:26,240 Speaker 1: in mind when you you probably picked them out. But 45 00:02:27,080 --> 00:02:30,800 Speaker 1: talk to us about this whole buzz in the markets, 46 00:02:30,800 --> 00:02:34,080 Speaker 1: about a rotation out of sort of the big growth, 47 00:02:34,520 --> 00:02:36,920 Speaker 1: the real high flying stocks that we've seen over the 48 00:02:36,960 --> 00:02:39,360 Speaker 1: last few years, the facebooks and Googles of the world, 49 00:02:39,360 --> 00:02:43,440 Speaker 1: and into more value oriented stocks and small caps. Is 50 00:02:43,440 --> 00:02:45,480 Speaker 1: this keeping you up at night, this rotation or do 51 00:02:45,320 --> 00:02:47,600 Speaker 1: you do you think it's just a flash in the pen. No, 52 00:02:47,760 --> 00:02:50,079 Speaker 1: it's not keeping me up at night. I mean, I've 53 00:02:50,120 --> 00:02:54,200 Speaker 1: been something in Oppenheimer Now invest Go for twenty years 54 00:02:54,240 --> 00:02:56,160 Speaker 1: and it's not the first time I've seen this kind 55 00:02:56,200 --> 00:03:00,720 Speaker 1: of thing. But you know, everyone's getting excited about maybe 56 00:03:00,760 --> 00:03:03,280 Speaker 1: the end of COVID because of a vaccine. But the 57 00:03:03,320 --> 00:03:06,720 Speaker 1: truth is the economy has been substantially better than most 58 00:03:06,720 --> 00:03:10,680 Speaker 1: people realize. And even if we do get back out 59 00:03:10,720 --> 00:03:13,320 Speaker 1: of our houses, which seems kind of strange right now, 60 00:03:14,320 --> 00:03:18,160 Speaker 1: it's not going to change the structural trends that were started, 61 00:03:18,440 --> 00:03:20,919 Speaker 1: the ones that I've been looking at years ago. They've 62 00:03:20,960 --> 00:03:24,440 Speaker 1: got really nothing to do with COVID. And we'll continue 63 00:03:24,639 --> 00:03:27,480 Speaker 1: long after we stopped talking about COVID, Brandy, I want 64 00:03:27,480 --> 00:03:29,080 Speaker 1: to circle back a little bit. You spoke with one 65 00:03:29,080 --> 00:03:31,720 Speaker 1: of my colleagues, Bill Donna Hiary because also Mike and I, 66 00:03:32,200 --> 00:03:34,360 Speaker 1: she's a crazy Things correspondent we like to color on 67 00:03:34,400 --> 00:03:36,600 Speaker 1: this show. But you spoke earlier this year, and I 68 00:03:36,600 --> 00:03:38,880 Speaker 1: wanted to read a quote from the story that she 69 00:03:38,880 --> 00:03:42,040 Speaker 1: wrote from your conversation, and you said, I've heard bubble 70 00:03:42,160 --> 00:03:44,800 Speaker 1: used to describe it. That's laughably incorrect. I've heard popular 71 00:03:44,840 --> 00:03:47,640 Speaker 1: momentum trade laughably incorrect. And then you went on to say, 72 00:03:47,800 --> 00:03:49,960 Speaker 1: people look at tech and they see what they think 73 00:03:50,000 --> 00:03:52,920 Speaker 1: are high valuations, but they don't fully understand what's going 74 00:03:52,960 --> 00:03:55,880 Speaker 1: on structurally. Can you walk us through what that structural 75 00:03:56,000 --> 00:03:59,400 Speaker 1: change actually is and how that maybe has been affected 76 00:03:59,600 --> 00:04:02,840 Speaker 1: or or unaffected um from what we've seen and experience 77 00:04:02,880 --> 00:04:06,960 Speaker 1: in ding COVID. Sure, So you know, I look at 78 00:04:07,000 --> 00:04:10,080 Speaker 1: the world and try to figure out what's changing structurally 79 00:04:10,160 --> 00:04:12,840 Speaker 1: and and the difference. I mean, to be a good investor, 80 00:04:12,960 --> 00:04:15,880 Speaker 1: you really have to understand the difference between cyclical and 81 00:04:15,920 --> 00:04:19,800 Speaker 1: structural because people talk about growth and value all the 82 00:04:19,880 --> 00:04:23,560 Speaker 1: time and that's the current narrative. But you know, if 83 00:04:23,600 --> 00:04:27,839 Speaker 1: the underlying phenomenon is structural, structural doesn't separate the world 84 00:04:27,839 --> 00:04:31,440 Speaker 1: into growth and value. That's what cyclical does. But if 85 00:04:31,560 --> 00:04:34,960 Speaker 1: if the underlying phenomenon is structural, structural separates the world 86 00:04:35,000 --> 00:04:38,600 Speaker 1: into winners and losers, and losers go bankrupt. You know, 87 00:04:38,760 --> 00:04:43,200 Speaker 1: for instance, e commerce, the rise of e commerce and 88 00:04:43,680 --> 00:04:46,960 Speaker 1: the move to digital is not cyclical. It's not like 89 00:04:47,000 --> 00:04:50,119 Speaker 1: you and I are gonna use Amazon for three years 90 00:04:50,120 --> 00:04:52,600 Speaker 1: and to go, hey, you know what, that was pretty cool, 91 00:04:52,839 --> 00:04:55,240 Speaker 1: Let's go back to the store for the next three years. 92 00:04:55,880 --> 00:05:00,800 Speaker 1: Cyclical is you know, I wear blue things my wardrobe 93 00:05:00,839 --> 00:05:03,640 Speaker 1: this year and orange things next year. I mean, we 94 00:05:03,720 --> 00:05:06,599 Speaker 1: all know the difference, but as an investor, you have 95 00:05:06,720 --> 00:05:10,599 Speaker 1: to really look to see what that difference is. You know, 96 00:05:10,760 --> 00:05:14,280 Speaker 1: you can't really have a discussion about valuation without an 97 00:05:14,360 --> 00:05:18,359 Speaker 1: understanding of what's going on. And the fundamentals of the 98 00:05:18,400 --> 00:05:22,240 Speaker 1: move to the cloud and the fundamentals of e commerce 99 00:05:22,279 --> 00:05:26,760 Speaker 1: are off the chart phenomenal more than justify the valuation. 100 00:05:27,040 --> 00:05:30,320 Speaker 1: And when these growth rates continue for another couple of years, 101 00:05:30,800 --> 00:05:34,080 Speaker 1: the valuation gets swamped. I would say most of what 102 00:05:34,240 --> 00:05:38,560 Speaker 1: I owned today is fairly attractive on a two and 103 00:05:38,640 --> 00:05:41,440 Speaker 1: three year basis, which is all I care about. You know, ready, 104 00:05:41,520 --> 00:05:44,240 Speaker 1: Is it possible though, that the sort of trends we've 105 00:05:44,279 --> 00:05:48,000 Speaker 1: seen this year have pulled forward some of the returns 106 00:05:48,279 --> 00:05:51,360 Speaker 1: of the sort of internet and growth stocks, and that 107 00:05:51,400 --> 00:05:55,080 Speaker 1: they could be sort of infra sort of middling weaker 108 00:05:55,120 --> 00:05:58,400 Speaker 1: returns in one or even the rest of it this year. 109 00:05:58,440 --> 00:06:01,200 Speaker 1: And and um, you know, I don't know whether you 110 00:06:01,240 --> 00:06:03,039 Speaker 1: agree with that or not, But if so, would that 111 00:06:03,680 --> 00:06:07,320 Speaker 1: sort of cause you to to adjust your portfolio at all? 112 00:06:07,400 --> 00:06:10,200 Speaker 1: Or you just kind of the guy that would buy 113 00:06:10,200 --> 00:06:12,760 Speaker 1: and hold and sort of just bear, you know, bear 114 00:06:12,839 --> 00:06:16,520 Speaker 1: through those those weaker quarters if they if they are 115 00:06:16,520 --> 00:06:19,599 Speaker 1: in store for us. Well, you use the word growth stock. 116 00:06:19,640 --> 00:06:22,120 Speaker 1: I believe you didn't say tech. So you asked me 117 00:06:22,120 --> 00:06:29,040 Speaker 1: about growth stocks? Correct, Well, maybe answer growth and for tech? Okay, sure, 118 00:06:29,200 --> 00:06:31,960 Speaker 1: So so the people that know me know that in general, 119 00:06:32,160 --> 00:06:35,480 Speaker 1: I hate labels like that. You know, a growth stock 120 00:06:35,640 --> 00:06:39,479 Speaker 1: is what something that has a high pe something that's growing. 121 00:06:39,800 --> 00:06:42,880 Speaker 1: I don't really know, you know, if you're talking about 122 00:06:42,880 --> 00:06:46,560 Speaker 1: morning Star, you're talking about very quantitative metrics on what 123 00:06:46,600 --> 00:06:48,920 Speaker 1: a growth stock is. If you're talking about what most 124 00:06:48,920 --> 00:06:52,520 Speaker 1: people think about, they're thinking about high growth. You know, 125 00:06:52,560 --> 00:06:56,200 Speaker 1: I don't buy anything because of the label. I buy 126 00:06:56,279 --> 00:06:59,720 Speaker 1: things that you know. Let me put it this way, 127 00:07:00,440 --> 00:07:04,000 Speaker 1: Every great investment ever made in history, regardless of what 128 00:07:04,120 --> 00:07:08,720 Speaker 1: you called it, growth value, large, small, domestic, international, started 129 00:07:09,160 --> 00:07:12,360 Speaker 1: with one thing in common, buying something for less than 130 00:07:12,400 --> 00:07:16,560 Speaker 1: it's worth. And so that's all that matters. You pay something, 131 00:07:16,640 --> 00:07:19,880 Speaker 1: you get something in return. And so I look at 132 00:07:19,920 --> 00:07:24,960 Speaker 1: companies and figure out what the fundamentals warrant. And you know, 133 00:07:25,160 --> 00:07:29,040 Speaker 1: to your point, perhaps some demand has been pulled forward 134 00:07:29,120 --> 00:07:32,200 Speaker 1: in certain areas. But when I was talking to two 135 00:07:32,280 --> 00:07:35,280 Speaker 1: c e o s about the cloud six months ago, 136 00:07:36,200 --> 00:07:38,800 Speaker 1: eight months ago, they were talking about it as well, 137 00:07:38,880 --> 00:07:41,240 Speaker 1: it's a nice to have, but it's not a must have, 138 00:07:41,920 --> 00:07:44,080 Speaker 1: and so we'll get there over the next five or 139 00:07:44,160 --> 00:07:46,880 Speaker 1: seven years. When I was talking to c e O 140 00:07:47,040 --> 00:07:50,960 Speaker 1: s in the depths of COVID, their response was quite different. 141 00:07:51,400 --> 00:07:54,200 Speaker 1: It was if I don't get to the cloud tomorrow, 142 00:07:54,320 --> 00:07:57,520 Speaker 1: I don't have a business in a year. And so 143 00:07:57,920 --> 00:08:01,520 Speaker 1: it pulled forward some demand. But this is structural, it's 144 00:08:01,520 --> 00:08:05,560 Speaker 1: not cyclical. It's going to continue. It was happening before 145 00:08:05,600 --> 00:08:09,240 Speaker 1: COVID started, it was happening during COVID, and it's going 146 00:08:09,280 --> 00:08:11,960 Speaker 1: to continue to happen after COVID. Those are the kinds 147 00:08:12,000 --> 00:08:15,320 Speaker 1: of investments I look for. So with that said, has 148 00:08:16,360 --> 00:08:18,520 Speaker 1: and everything we've been through this year, I mean, granted 149 00:08:18,560 --> 00:08:22,000 Speaker 1: not over yet. Has this at all changed your view 150 00:08:22,160 --> 00:08:25,960 Speaker 1: on companies that have the most leeway for structural growth 151 00:08:25,960 --> 00:08:29,320 Speaker 1: going forwards? Have you made tweaks to your portfolios? Is 152 00:08:29,360 --> 00:08:33,000 Speaker 1: there something that you've seen as a true change at all, 153 00:08:33,040 --> 00:08:36,319 Speaker 1: whether that means adding um new companies or industries and 154 00:08:36,600 --> 00:08:40,120 Speaker 1: detracting from others or the opposite, anything at all. In 155 00:08:40,160 --> 00:08:42,920 Speaker 1: a lot of ways, not really, you know, I was 156 00:08:43,440 --> 00:08:45,760 Speaker 1: one part of being a good investor is to be 157 00:08:45,800 --> 00:08:49,920 Speaker 1: fully prepared to act with conviction when the market makes mistakes. 158 00:08:50,600 --> 00:08:53,440 Speaker 1: And so much of this job is you know, most 159 00:08:53,440 --> 00:08:55,319 Speaker 1: people that have been doing this a long time and 160 00:08:55,679 --> 00:08:59,200 Speaker 1: doing it well read five six hours a day, over 161 00:08:59,679 --> 00:09:03,440 Speaker 1: over decades, and so you know you're going to be 162 00:09:03,520 --> 00:09:06,360 Speaker 1: prepared when the market makes mistakes. Back in March, the 163 00:09:06,440 --> 00:09:09,560 Speaker 1: market made some fairly large mistakes, some of the biggest 164 00:09:09,559 --> 00:09:12,480 Speaker 1: I've seen in my career, and I was able to 165 00:09:12,520 --> 00:09:15,640 Speaker 1: take advantage of those. In many cases it was things 166 00:09:15,679 --> 00:09:18,760 Speaker 1: that I already owned. In a few cases, I was 167 00:09:18,840 --> 00:09:21,040 Speaker 1: able to add some companies that I had wanted to 168 00:09:21,080 --> 00:09:24,600 Speaker 1: own at a better price for a long time, and 169 00:09:24,640 --> 00:09:28,480 Speaker 1: the market mistakenly threw everything out at once, and I 170 00:09:28,559 --> 00:09:30,880 Speaker 1: was able to do that. And so I haven't really 171 00:09:31,000 --> 00:09:35,080 Speaker 1: changed much in terms of the names and the composition 172 00:09:35,120 --> 00:09:38,040 Speaker 1: of the fund, which is not not unusual for me 173 00:09:38,080 --> 00:09:41,480 Speaker 1: in times of stress. Though I was very active in 174 00:09:41,840 --> 00:10:01,280 Speaker 1: adding to the opportunities that I saw ready. I was 175 00:10:01,320 --> 00:10:04,199 Speaker 1: reading one of your blog posts and you sort of 176 00:10:04,280 --> 00:10:06,920 Speaker 1: laid out some of the main themes that you've talked about, 177 00:10:06,920 --> 00:10:09,680 Speaker 1: you know, the move to the cloud, the rise of 178 00:10:09,679 --> 00:10:14,160 Speaker 1: e commerce, diagnostics and research. One ball point you haven't here. 179 00:10:14,200 --> 00:10:16,640 Speaker 1: I found really interesting and also it cracked me up 180 00:10:16,640 --> 00:10:17,920 Speaker 1: a little bit. Let me just read a little bit 181 00:10:17,960 --> 00:10:21,240 Speaker 1: from this post. You're talking about the electronification of money, 182 00:10:21,720 --> 00:10:23,800 Speaker 1: and you say, but you're right basically that you expect 183 00:10:23,880 --> 00:10:26,600 Speaker 1: that to continue. And you say, why ever, look at 184 00:10:26,600 --> 00:10:32,200 Speaker 1: money under a microscope, don't it's discussing I guess in 185 00:10:32,240 --> 00:10:35,920 Speaker 1: the in a in a newly germ germophobic world, that 186 00:10:35,920 --> 00:10:38,679 Speaker 1: that that's a trend to accelerate. But yeah, so I'm 187 00:10:38,720 --> 00:10:41,560 Speaker 1: looking at it through some of the big holdings, the 188 00:10:41,559 --> 00:10:43,839 Speaker 1: top holdings in the focus fund. I see PayPal. That's 189 00:10:43,920 --> 00:10:46,839 Speaker 1: kind of an obvious expression of that theme. Is there 190 00:10:46,840 --> 00:10:49,160 Speaker 1: anything else that we're not saying? You know, I think 191 00:10:49,200 --> 00:10:51,080 Speaker 1: I'm only looking at the top holdings though, But are 192 00:10:51,120 --> 00:10:54,560 Speaker 1: there other sort of holdings that that expressed that theme 193 00:10:54,600 --> 00:10:56,640 Speaker 1: of the electronification of money? And if and if you 194 00:10:56,640 --> 00:10:58,600 Speaker 1: allow me to turn this into a three part question, 195 00:10:59,440 --> 00:11:05,319 Speaker 1: he usually asks amount taking it easy? Does cryptocurrencies play 196 00:11:05,520 --> 00:11:09,800 Speaker 1: any role in that thinking? And given that theme is 197 00:11:09,800 --> 00:11:11,520 Speaker 1: is one of your top teams? I'm I was kind 198 00:11:11,559 --> 00:11:14,200 Speaker 1: of surprised not to see Square in the portfolio, although 199 00:11:14,240 --> 00:11:16,400 Speaker 1: maybe it's down lower in the in the lower waitings. 200 00:11:16,440 --> 00:11:18,880 Speaker 1: But if it's not in the portfolio, something about square 201 00:11:18,880 --> 00:11:21,559 Speaker 1: you don't like? And again about the crypto, what's what 202 00:11:21,640 --> 00:11:24,520 Speaker 1: you're thinking on crypto? Okay? So, so when it comes 203 00:11:24,559 --> 00:11:28,360 Speaker 1: to the electronification of money, I don't think people see 204 00:11:28,400 --> 00:11:31,240 Speaker 1: it for what it is. One. It started in the 205 00:11:31,320 --> 00:11:35,400 Speaker 1: nineteen fifties with the rise of the first credit cards, 206 00:11:35,960 --> 00:11:38,959 Speaker 1: and back then, to get a credit card meant basically 207 00:11:39,000 --> 00:11:40,719 Speaker 1: you didn't need one, you had to be wealthy to 208 00:11:40,760 --> 00:11:43,680 Speaker 1: get a credit card. Uh, and it was a true 209 00:11:43,720 --> 00:11:47,160 Speaker 1: convenience right. And then in the eighties, about the time 210 00:11:47,200 --> 00:11:49,320 Speaker 1: I was coming out of college, you could get a 211 00:11:49,320 --> 00:11:52,760 Speaker 1: credit card, but socially, what it implied was you couldn't 212 00:11:52,760 --> 00:11:55,240 Speaker 1: afford what you were buying if you if you used it. 213 00:11:56,160 --> 00:11:59,840 Speaker 1: And so through my whole life, I've watched the social 214 00:12:00,000 --> 00:12:03,480 Speaker 1: attitudes change around a credit card and the late nineties 215 00:12:03,520 --> 00:12:07,360 Speaker 1: and early two thousands, and I think, you know you 216 00:12:07,400 --> 00:12:10,800 Speaker 1: can identify with this is you would use a credit card. 217 00:12:10,880 --> 00:12:14,200 Speaker 1: There was no social stigma around you couldn't afford what 218 00:12:14,240 --> 00:12:16,280 Speaker 1: you were buying, but you still only used it for 219 00:12:16,360 --> 00:12:21,480 Speaker 1: large purchases. And nowadays the social attitude is it's back 220 00:12:21,480 --> 00:12:24,800 Speaker 1: to being a true convenience. People will now go into 221 00:12:25,040 --> 00:12:27,719 Speaker 1: a convenience store by a bottle of water and a 222 00:12:27,760 --> 00:12:29,960 Speaker 1: back of potato chips on a credit card and think 223 00:12:30,040 --> 00:12:32,120 Speaker 1: nothing of it. But ten years ago you wouldn't have 224 00:12:32,160 --> 00:12:37,040 Speaker 1: done that. And so it's become a convenience item in 225 00:12:37,080 --> 00:12:40,640 Speaker 1: your life. You don't have to carry money. Covide comes 226 00:12:40,679 --> 00:12:44,760 Speaker 1: along and just reminds you that money is one of 227 00:12:44,800 --> 00:12:47,440 Speaker 1: the is one of the biggest common touch points in 228 00:12:47,520 --> 00:12:50,440 Speaker 1: your life. Money is filthy. We just got lucky on 229 00:12:50,480 --> 00:12:53,760 Speaker 1: that one. But social attitudes around credit cards have been 230 00:12:53,840 --> 00:12:58,040 Speaker 1: changing literally for sixty years, and we're still only about 231 00:12:58,760 --> 00:13:02,480 Speaker 1: penetrated globally in terms of all purchases. You asked about 232 00:13:02,640 --> 00:13:04,760 Speaker 1: you know, so I own MasterCard as part of that, 233 00:13:04,840 --> 00:13:07,240 Speaker 1: and I have for quite a while. But you asked 234 00:13:07,240 --> 00:13:11,880 Speaker 1: about crypto. I've looked at crypto, and for the life 235 00:13:11,920 --> 00:13:14,800 Speaker 1: of me, I can't figure out what purposes What is 236 00:13:14,840 --> 00:13:17,120 Speaker 1: it that you want to do with crypto that you 237 00:13:17,200 --> 00:13:21,000 Speaker 1: can't already do. The one thing I can do with 238 00:13:21,080 --> 00:13:26,520 Speaker 1: crypto that I can't already do is hide, And you know, 239 00:13:27,080 --> 00:13:30,280 Speaker 1: hiding suggests something to me that I might not want 240 00:13:30,280 --> 00:13:33,240 Speaker 1: to be part of as an investor. I'll leave it 241 00:13:33,280 --> 00:13:36,800 Speaker 1: at that. And you asked about Square as well. Square. 242 00:13:36,920 --> 00:13:40,120 Speaker 1: I looked at Square. I knew Square had a great product. 243 00:13:40,200 --> 00:13:43,000 Speaker 1: This is years ago. I knew Square had a nice 244 00:13:43,040 --> 00:13:46,160 Speaker 1: business model. I knew it would take the long tail, 245 00:13:46,800 --> 00:13:49,400 Speaker 1: and I made a mistake in not buying it. I 246 00:13:49,400 --> 00:13:52,440 Speaker 1: thought the valuation was a bit rich. I thought there 247 00:13:52,520 --> 00:13:55,559 Speaker 1: was little technology in its platform that it could hold 248 00:13:55,600 --> 00:13:59,560 Speaker 1: onto from a from the standpoint of advantage, And turns 249 00:13:59,600 --> 00:14:02,720 Speaker 1: out the first mover advantage was enough and so I 250 00:14:02,800 --> 00:14:05,080 Speaker 1: missed it. Sorry. I think he's the first one to 251 00:14:05,160 --> 00:14:07,959 Speaker 1: answer every part of a multi pronged question like that. 252 00:14:07,960 --> 00:14:09,800 Speaker 1: That was pretty good. I think I might agree with 253 00:14:09,840 --> 00:14:12,840 Speaker 1: that too. Congratulations, you deserve a pad on the back. 254 00:14:13,280 --> 00:14:15,080 Speaker 1: I want to I want to run through a couple 255 00:14:15,160 --> 00:14:17,439 Speaker 1: more of your top holdings though, Randy, and then kind 256 00:14:17,440 --> 00:14:19,400 Speaker 1: of dig a little bit deeper into this idea of 257 00:14:19,400 --> 00:14:22,400 Speaker 1: the rotation that a lot of sell side strategists are 258 00:14:22,440 --> 00:14:23,840 Speaker 1: at least calling for us. So if I look at 259 00:14:23,880 --> 00:14:28,320 Speaker 1: some of your top holdings on all your funds fact sheet, Facebook, Twilio, Salesforce, 260 00:14:28,360 --> 00:14:32,840 Speaker 1: Service now, CrowdStrike, i'd say usually when I get and 261 00:14:32,880 --> 00:14:35,800 Speaker 1: it's been often lately, sell side strategist notes are just 262 00:14:35,960 --> 00:14:38,880 Speaker 1: filled with this idea of a rotation. I won't even 263 00:14:39,000 --> 00:14:43,520 Speaker 1: use style or I won't use these descriptions or boxes, 264 00:14:43,800 --> 00:14:46,560 Speaker 1: but just this idea that companies that have performed very 265 00:14:46,560 --> 00:14:48,720 Speaker 1: well recently over the last couple of years, they're going 266 00:14:48,760 --> 00:14:51,680 Speaker 1: to start underperforming areas of the market that just haven't 267 00:14:51,680 --> 00:14:56,440 Speaker 1: performed quite as well. What is it, though, about the 268 00:14:56,480 --> 00:14:58,560 Speaker 1: way that you see the world in a in a 269 00:14:58,600 --> 00:15:02,440 Speaker 1: structural way that you maybe don't believe that a bank 270 00:15:02,920 --> 00:15:06,720 Speaker 1: or an energy company is all of a sudden going 271 00:15:06,760 --> 00:15:11,160 Speaker 1: to truly, for a long term period, start to outrun 272 00:15:11,240 --> 00:15:15,160 Speaker 1: say these five companies that I just listed, Well, you 273 00:15:15,200 --> 00:15:18,840 Speaker 1: know the boxes that you're that you're not talking about 274 00:15:18,920 --> 00:15:23,120 Speaker 1: but talking about. I remember stepping up in front of 275 00:15:23,120 --> 00:15:26,320 Speaker 1: a room full of people twelve thirteen years ago when 276 00:15:26,360 --> 00:15:29,560 Speaker 1: I first launched the fund, and I put those boxes 277 00:15:29,640 --> 00:15:32,280 Speaker 1: up and I said, this is where money goes to die. 278 00:15:33,080 --> 00:15:37,680 Speaker 1: And I stand by where I said thirteen years ago. Um, 279 00:15:37,800 --> 00:15:41,120 Speaker 1: the world doesn't work that way, and allocating that way 280 00:15:41,160 --> 00:15:43,200 Speaker 1: has never made any sense to me. It's a great 281 00:15:43,200 --> 00:15:46,840 Speaker 1: way to own too much, too many things, and to 282 00:15:47,480 --> 00:15:52,760 Speaker 1: lock in under performance. But but anyway, you know, cyclicals 283 00:15:52,880 --> 00:15:56,240 Speaker 1: will rebound. I mean, you're already seeing it now. But 284 00:15:56,320 --> 00:16:00,000 Speaker 1: that doesn't change the fundamentals. I'm talking about the different 285 00:16:00,280 --> 00:16:07,280 Speaker 1: between price action and fundamentals. It's not surprising to me 286 00:16:07,400 --> 00:16:10,840 Speaker 1: that some of these things are rebounding because many of 287 00:16:10,880 --> 00:16:13,560 Speaker 1: them were priced for bankruptcy. But at the end of 288 00:16:13,560 --> 00:16:18,520 Speaker 1: the day, you know, take energy. Energy is going against 289 00:16:18,560 --> 00:16:20,920 Speaker 1: the trend. I mean, there's no doubt in my mind 290 00:16:21,000 --> 00:16:23,920 Speaker 1: that electric cars are going to continue to take percent 291 00:16:23,960 --> 00:16:27,640 Speaker 1: of the fleet. Transportation is twenty plus percent of the 292 00:16:27,720 --> 00:16:32,520 Speaker 1: energy uses in this country. GDP continues to be less 293 00:16:32,600 --> 00:16:36,240 Speaker 1: energy intensive globally. It's not a place I would want 294 00:16:36,280 --> 00:16:39,800 Speaker 1: to invest money under the best of circumstances. This is 295 00:16:39,800 --> 00:16:44,640 Speaker 1: certainly not the best of circumstances. Might you get a bounce, Sure, 296 00:16:44,880 --> 00:16:48,960 Speaker 1: you're already getting it, But you know, that's a trading 297 00:16:49,040 --> 00:16:53,040 Speaker 1: kind of mindset that I think makes it very difficult 298 00:16:53,080 --> 00:16:56,840 Speaker 1: to be a really great long term investor. Some of 299 00:16:56,880 --> 00:17:00,920 Speaker 1: the other things financials financials to me, the money center banks, 300 00:17:01,040 --> 00:17:04,320 Speaker 1: particularly things like JP Morgan c Group, Bank of America, 301 00:17:04,400 --> 00:17:08,560 Speaker 1: Wells Fargo, I think Post DoD Frank Their balance sheets 302 00:17:08,560 --> 00:17:12,560 Speaker 1: are so gold plated that it's very difficult to lose 303 00:17:12,640 --> 00:17:17,000 Speaker 1: money in those in those banks at these prices. I'm 304 00:17:17,040 --> 00:17:19,719 Speaker 1: not saying it won't be dead money for a few years, 305 00:17:20,200 --> 00:17:23,719 Speaker 1: but I find that situation interesting as an investor, and 306 00:17:23,760 --> 00:17:26,760 Speaker 1: so I'll set those off to the side. Most of 307 00:17:26,800 --> 00:17:31,399 Speaker 1: the other cyclical value type rotation things that you're talking about, 308 00:17:32,160 --> 00:17:35,080 Speaker 1: I think are a waste of time. I think you 309 00:17:35,160 --> 00:17:37,879 Speaker 1: might get a good short term trade in those things, 310 00:17:38,320 --> 00:17:41,520 Speaker 1: but short term trading is a very difficult way to 311 00:17:41,560 --> 00:17:46,240 Speaker 1: make real money, and whatever rotation is happening is definitely 312 00:17:46,240 --> 00:17:49,160 Speaker 1: not changing the trends that I'm invested in right now. 313 00:17:51,840 --> 00:18:11,080 Speaker 1: M You know, Renny, one thing I wanted to ask you. 314 00:18:11,359 --> 00:18:14,000 Speaker 1: The Global Focus Fund, as its name implies, it is 315 00:18:14,000 --> 00:18:17,960 Speaker 1: a global fund, pretty decent allocation to China about ten. 316 00:18:19,280 --> 00:18:22,240 Speaker 1: I'm curious how all of the tensions between the US 317 00:18:22,480 --> 00:18:26,360 Speaker 1: and China over the recent years if they affected you're 318 00:18:26,440 --> 00:18:28,639 Speaker 1: you're buying it all? You know, were you were you 319 00:18:28,720 --> 00:18:32,840 Speaker 1: restrained on sort of looking at Chinese stocks because of that? 320 00:18:33,040 --> 00:18:35,840 Speaker 1: Were you know, under a Biden administration, would you be 321 00:18:36,600 --> 00:18:39,080 Speaker 1: inclined to look a little harder in China? Or does it? 322 00:18:39,200 --> 00:18:41,440 Speaker 1: Does it not really matter that the whole trade war 323 00:18:41,480 --> 00:18:44,800 Speaker 1: and geopolitical situation to you? I appreciate that question. I 324 00:18:44,880 --> 00:18:47,560 Speaker 1: get that question a lot, and my short answer would 325 00:18:47,600 --> 00:18:49,880 Speaker 1: be total waste of time to even think about it. 326 00:18:50,800 --> 00:18:53,840 Speaker 1: I've been through many elections as an investor, I've been 327 00:18:53,880 --> 00:18:58,359 Speaker 1: through many pretty severe macro phenomenon and I've not yet 328 00:18:58,400 --> 00:19:02,399 Speaker 1: seen the one that mattered to long term outcomes. China, 329 00:19:02,480 --> 00:19:08,000 Speaker 1: to me, I recognized fifteen years ago is a phenomenon 330 00:19:08,200 --> 00:19:11,520 Speaker 1: that I'm unlikely to see again in my lifetime. A 331 00:19:11,560 --> 00:19:16,439 Speaker 1: country at that scale coming out into the modern world 332 00:19:16,600 --> 00:19:20,800 Speaker 1: from emerging two developed. There are other countries that will 333 00:19:20,840 --> 00:19:23,560 Speaker 1: do that. There aren't any other countries left that will 334 00:19:23,600 --> 00:19:26,960 Speaker 1: do it at that scale. And you know the advantage 335 00:19:27,400 --> 00:19:30,919 Speaker 1: that China had, you think about something like Amazon. For 336 00:19:31,040 --> 00:19:36,680 Speaker 1: Amazon to become Amazon, it had competitors, thousands of competitors 337 00:19:36,720 --> 00:19:39,679 Speaker 1: that had a one year head start. They had the 338 00:19:39,720 --> 00:19:44,280 Speaker 1: best real estate, They had four generations of customer relations 339 00:19:44,320 --> 00:19:47,840 Speaker 1: that they could use against you. Amazon had to bankrupt 340 00:19:48,000 --> 00:19:53,320 Speaker 1: twenty thousand different companies just to become Amazon. Ali Baba 341 00:19:53,440 --> 00:19:56,840 Speaker 1: was competing with nothing Ali Baba. You know, there was 342 00:19:56,880 --> 00:20:00,760 Speaker 1: no organized retail in China prior, and so Ali Baba 343 00:20:00,840 --> 00:20:04,800 Speaker 1: could become Ali Baba quite quickly. I knew that China 344 00:20:04,880 --> 00:20:08,080 Speaker 1: would happen faster than the analogs people look to in 345 00:20:08,119 --> 00:20:11,600 Speaker 1: the United States, and so it was just a matter 346 00:20:11,680 --> 00:20:14,639 Speaker 1: of going there, figuring out who the winners were, what 347 00:20:14,760 --> 00:20:18,760 Speaker 1: advantages were necessary to win obviously, and then finding them 348 00:20:18,920 --> 00:20:22,320 Speaker 1: and it wasn't really that difficult. I continue to be 349 00:20:22,400 --> 00:20:26,120 Speaker 1: impressed by what they're able to do and how relevant 350 00:20:26,160 --> 00:20:29,080 Speaker 1: they are globally. Most of the political noise is just 351 00:20:29,240 --> 00:20:32,359 Speaker 1: that noise, and it doesn't really affect the outcol So 352 00:20:32,400 --> 00:20:35,440 Speaker 1: another question that maybe fits into this bucket. Ali Baba 353 00:20:35,440 --> 00:20:38,600 Speaker 1: also one of your top holdings the regulatory front. There's 354 00:20:38,640 --> 00:20:40,919 Speaker 1: been a lot of talk lately about regulation over in 355 00:20:41,040 --> 00:20:44,680 Speaker 1: China for big tech companies. Also here in the US, uh, 356 00:20:44,800 --> 00:20:46,960 Speaker 1: Facebook being one of your top holdings. Of of course, 357 00:20:46,960 --> 00:20:49,960 Speaker 1: there's a lot of talk about Facebook and other big 358 00:20:50,000 --> 00:20:53,760 Speaker 1: tech companies facing antitrust concerns here in the US. Does 359 00:20:53,800 --> 00:20:56,600 Speaker 1: that at all concern you know? And it's not for 360 00:20:56,680 --> 00:20:58,840 Speaker 1: lack of thinking about it and for lack of looking 361 00:20:58,960 --> 00:21:01,080 Speaker 1: One of the best things you've du to Facebook from 362 00:21:01,080 --> 00:21:03,240 Speaker 1: an investment point of view would be to break it up. 363 00:21:03,560 --> 00:21:08,439 Speaker 1: Most people don't really look at and understand Instagram for 364 00:21:08,520 --> 00:21:11,720 Speaker 1: what it is. Instagram is one of the best e 365 00:21:11,840 --> 00:21:17,560 Speaker 1: commerce and advertising assets ever created and will definitely at 366 00:21:17,600 --> 00:21:20,200 Speaker 1: some point be as big as core Facebook, and could 367 00:21:20,200 --> 00:21:23,679 Speaker 1: even be bigger because of the e commerce aspect of 368 00:21:23,720 --> 00:21:27,479 Speaker 1: it digital advertising. You know. One of the things that 369 00:21:27,520 --> 00:21:30,359 Speaker 1: people aren't looking at when they talk about the recovery 370 00:21:30,440 --> 00:21:34,679 Speaker 1: post COVID is they talk about the rotation back into 371 00:21:34,920 --> 00:21:39,639 Speaker 1: brick and mortar retail and airlines and carnival cruises and 372 00:21:39,680 --> 00:21:43,200 Speaker 1: things like that things that have historically through the cycle 373 00:21:43,320 --> 00:21:46,840 Speaker 1: been terrible investments and this time won't be any different. 374 00:21:47,640 --> 00:21:52,159 Speaker 1: But all of that comes with advertising and digital continues 375 00:21:52,200 --> 00:21:55,360 Speaker 1: to take share. And one of the things that COVID 376 00:21:55,480 --> 00:22:00,000 Speaker 1: did induce was trial. If you were someone who weren't 377 00:21:59,800 --> 00:22:04,879 Speaker 1: advertizing primarily on digital, you had no choice during COVID 378 00:22:04,960 --> 00:22:09,400 Speaker 1: but to do that. And every time I've seen advertisers 379 00:22:09,520 --> 00:22:14,080 Speaker 1: adopt digital, they don't go back. Their return on investment 380 00:22:14,160 --> 00:22:18,040 Speaker 1: for every digital dollar spent is so much greater than 381 00:22:18,280 --> 00:22:20,800 Speaker 1: everything else they could they could do with that dollar, 382 00:22:21,440 --> 00:22:26,040 Speaker 1: they don't go back. And so Facebook, Instagram, Google are 383 00:22:26,080 --> 00:22:31,879 Speaker 1: all natural beneficiaries of a return to a more normalized environment. Ready, 384 00:22:31,880 --> 00:22:36,719 Speaker 1: what are your themes you talk about is diagnostics and research? Um, 385 00:22:36,760 --> 00:22:40,360 Speaker 1: I'm curious, what's uh what you're seeing there that's exciting 386 00:22:40,760 --> 00:22:43,360 Speaker 1: and where do you see that space going? I mean, um, 387 00:22:43,400 --> 00:22:46,560 Speaker 1: this is obviously a trend that predates COVID, got quite 388 00:22:46,600 --> 00:22:48,720 Speaker 1: a shot in the arm from COVID. But where do 389 00:22:48,760 --> 00:22:50,919 Speaker 1: you see you know, what's exciting you in that space? 390 00:22:50,960 --> 00:22:53,639 Speaker 1: Any any stocks we don't know about, um? And and 391 00:22:53,680 --> 00:22:56,000 Speaker 1: where do you see that going in the future? Well, 392 00:22:56,480 --> 00:22:59,359 Speaker 1: you know, diagnostics is something that me and my and 393 00:22:59,480 --> 00:23:04,359 Speaker 1: colleague internally, we're talking about seventeen eighteen years ago. I 394 00:23:04,600 --> 00:23:07,480 Speaker 1: met Aluminium, one of my larger holdings, for the first 395 00:23:07,480 --> 00:23:10,520 Speaker 1: time in two thousand and three and sat on a 396 00:23:10,560 --> 00:23:13,240 Speaker 1: banker's box in the parking lot of the building that 397 00:23:13,320 --> 00:23:16,320 Speaker 1: the founder was in the process of moving into. He 398 00:23:16,440 --> 00:23:19,520 Speaker 1: told me, he told me the advantage that he had, 399 00:23:19,760 --> 00:23:22,000 Speaker 1: how things were going to play out for the company, 400 00:23:22,040 --> 00:23:25,600 Speaker 1: and everything that he said was absolutely correct. You know, 401 00:23:25,760 --> 00:23:28,680 Speaker 1: the rise of point of care diagnostics has been going 402 00:23:28,760 --> 00:23:32,439 Speaker 1: on for twenty five years, and so you know, I 403 00:23:32,520 --> 00:23:37,240 Speaker 1: owned two foundational platform assets in Ilumina and Thermo Fisher 404 00:23:37,680 --> 00:23:42,040 Speaker 1: that if you're doing research and development in the healthcare space, 405 00:23:42,680 --> 00:23:45,879 Speaker 1: you're highly likely and and this is globally, you're highly 406 00:23:45,960 --> 00:23:48,080 Speaker 1: likely to be a customer of one or both of 407 00:23:48,119 --> 00:23:52,720 Speaker 1: those companies. Uh. They are the de facto standards in 408 00:23:53,400 --> 00:23:58,800 Speaker 1: diagnostics research and in research automation, and so the things 409 00:23:58,840 --> 00:24:02,680 Speaker 1: that have started years ago. You know, imagine and if 410 00:24:02,720 --> 00:24:04,920 Speaker 1: you're old enough, remember what it was like to get 411 00:24:05,359 --> 00:24:09,159 Speaker 1: a test twenty years ago. You can wait three weeks 412 00:24:09,200 --> 00:24:13,040 Speaker 1: for a result and the doctor's office couldn't do it. Nowadays, 413 00:24:13,119 --> 00:24:15,800 Speaker 1: you can get the test done at your doctor's office 414 00:24:15,840 --> 00:24:19,320 Speaker 1: and you can have many times results before you can 415 00:24:19,320 --> 00:24:22,760 Speaker 1: make it through the parking lot. Uh. That's where medicine 416 00:24:22,800 --> 00:24:26,760 Speaker 1: is going. That's where diagnostics is going. And those two 417 00:24:26,800 --> 00:24:29,919 Speaker 1: assets are critical and taking it there that you know 418 00:24:29,960 --> 00:24:32,639 Speaker 1: it used to be they were necessary, but they weren't 419 00:24:32,720 --> 00:24:36,880 Speaker 1: leading it there. Now they're driving and h that's where 420 00:24:36,880 --> 00:24:39,320 Speaker 1: it's headed and it's going to play out over the 421 00:24:39,359 --> 00:24:42,119 Speaker 1: next ten fifteen years. Uh. And there's no way to 422 00:24:42,160 --> 00:24:45,720 Speaker 1: avoid those two, those two companies. It really is amazing. 423 00:24:45,880 --> 00:24:48,280 Speaker 1: And UH. Rewinding a little bit to your point on 424 00:24:48,440 --> 00:24:50,760 Speaker 1: e commerce and Instagram. I have a bit of a 425 00:24:50,800 --> 00:24:54,679 Speaker 1: crazy story before we get to sharing our crazy things. Uh. 426 00:24:54,760 --> 00:24:57,600 Speaker 1: Just the other day, so I'm in Michigan for the holiday. 427 00:24:57,880 --> 00:25:00,560 Speaker 1: We ran into a golf store and I just got 428 00:25:00,560 --> 00:25:02,560 Speaker 1: a puppy, Randy, and we are joking around. They have 429 00:25:02,600 --> 00:25:06,640 Speaker 1: all those animal heads that you can stick on your 430 00:25:06,720 --> 00:25:09,120 Speaker 1: driver as a cover, and we're joking around. We needed 431 00:25:09,119 --> 00:25:11,439 Speaker 1: to get one that looked like our our puppy for 432 00:25:11,720 --> 00:25:14,000 Speaker 1: the golf clubs. And next thing I knew a couple 433 00:25:14,080 --> 00:25:16,840 Speaker 1: hours later, I went on Instagram and what did I get? 434 00:25:16,840 --> 00:25:22,280 Speaker 1: An advertisement for cloning your dogs for a driver Head, 435 00:25:22,400 --> 00:25:24,439 Speaker 1: and I was like, okay, coincidence or not, but that 436 00:25:24,600 --> 00:25:28,000 Speaker 1: is a little bit too specific. And I'm just gonna 437 00:25:28,000 --> 00:25:31,760 Speaker 1: say these driver dog Head clones were honestly a little 438 00:25:31,760 --> 00:25:34,200 Speaker 1: bit too creepy, Like it looks like your actual dog 439 00:25:34,440 --> 00:25:38,640 Speaker 1: sitting on top of your golf club. That's a little crazy, 440 00:25:38,760 --> 00:25:40,680 Speaker 1: all right now. But what did you shoot, sir? That's 441 00:25:40,720 --> 00:25:43,480 Speaker 1: the real question. What what did I? Oh, I didn't, 442 00:25:43,520 --> 00:25:45,240 Speaker 1: I didn't actually golf. We just want to pick out 443 00:25:45,280 --> 00:25:47,919 Speaker 1: some shoes. You just like the fashion you just like. 444 00:25:47,960 --> 00:25:49,920 Speaker 1: I know. I'm not. I'm not. I'm not that good. 445 00:25:50,119 --> 00:25:52,800 Speaker 1: Don't don't worry. I don't get to play that often 446 00:25:52,840 --> 00:25:56,560 Speaker 1: in New York City. Um, but but I do enjoy it. 447 00:25:57,440 --> 00:26:00,119 Speaker 1: I like the Michigan reference. There, I know now why 448 00:26:00,160 --> 00:26:03,840 Speaker 1: you booked Randy another another Michigan U M b A there, 449 00:26:04,359 --> 00:26:06,280 Speaker 1: we'll all allow it. Hey, you guys have the same 450 00:26:06,600 --> 00:26:09,080 Speaker 1: football helmets as my Delaware Blue hens, so I will 451 00:26:09,119 --> 00:26:11,800 Speaker 1: I will allow. I will allow the Michigan love to 452 00:26:11,840 --> 00:26:14,760 Speaker 1: some degree. I don't think either of us want to 453 00:26:14,800 --> 00:26:20,560 Speaker 1: openly speak about Michigan football at this point in time. Mike, alright, well, 454 00:26:20,760 --> 00:26:23,360 Speaker 1: no basketball season, so it's gonna be a lot. I'm excited, 455 00:26:24,240 --> 00:26:27,719 Speaker 1: all right, anyway, I think that is our segue. If 456 00:26:27,720 --> 00:26:31,359 Speaker 1: I'm not mistaken, You're not all right, stand clear of 457 00:26:31,400 --> 00:26:35,560 Speaker 1: the craziest things we saw in markets this week. You know, 458 00:26:35,800 --> 00:26:37,760 Speaker 1: I'll kick it off from once. I'll kick it off. 459 00:26:38,600 --> 00:26:41,040 Speaker 1: Two crazy things I wanted to bring up, Sarah. One 460 00:26:41,359 --> 00:26:44,520 Speaker 1: was this last week we as you wrote about Tesla 461 00:26:44,760 --> 00:26:49,439 Speaker 1: getting added to the SMP five finally, So naturally you 462 00:26:49,480 --> 00:26:52,480 Speaker 1: would assume that would cause a rally, a little bit 463 00:26:52,520 --> 00:26:55,520 Speaker 1: of a pop in Tesla. It's amazing to me is 464 00:26:55,560 --> 00:26:58,880 Speaker 1: the short covering rally it caused in all these Tesla 465 00:26:58,960 --> 00:27:03,560 Speaker 1: like companies like Blink Charging fuel cell Energy. I don't 466 00:27:03,600 --> 00:27:05,840 Speaker 1: know how to pronounce this one. A row I row 467 00:27:05,960 --> 00:27:08,639 Speaker 1: stickers at a y r. Oh. They're all up like 468 00:27:08,760 --> 00:27:12,040 Speaker 1: in the hundreds of percent since Tesla was added, and 469 00:27:12,080 --> 00:27:14,240 Speaker 1: the thinking is that it just caused a massive cover 470 00:27:14,520 --> 00:27:17,199 Speaker 1: I think the Biden presidency is somewhat bullish for for 471 00:27:17,240 --> 00:27:20,440 Speaker 1: green energy as well. Uh so that's one of them. 472 00:27:20,440 --> 00:27:23,879 Speaker 1: But here's my real crazy thing. British airways. Have you 473 00:27:23,880 --> 00:27:28,040 Speaker 1: ever flown on British air Lovely airline and there I've 474 00:27:28,040 --> 00:27:30,440 Speaker 1: never flown first class on them, but apparently their first 475 00:27:30,440 --> 00:27:33,800 Speaker 1: class services is to die for. They've had so few 476 00:27:33,840 --> 00:27:36,560 Speaker 1: flights that they're just selling off all the year from 477 00:27:36,600 --> 00:27:39,320 Speaker 1: first class. So you can buy like the champagne flutes, 478 00:27:39,520 --> 00:27:43,920 Speaker 1: the fine china, the slippers. You can even buy those 479 00:27:43,960 --> 00:27:46,120 Speaker 1: heated boxes that they bring your meals around it, which 480 00:27:46,160 --> 00:27:48,000 Speaker 1: I kind of want one of them. The heated the 481 00:27:48,040 --> 00:27:50,399 Speaker 1: heated but it keeps it warm. Yeah, yeah, there's the 482 00:27:50,600 --> 00:27:54,439 Speaker 1: things that keep the So in the spirit of prices, right, Sarah, 483 00:27:54,440 --> 00:27:56,520 Speaker 1: what and Rerandy? What would you guys pay for a 484 00:27:56,560 --> 00:28:00,879 Speaker 1: British Air first class blanket counts just not talking the 485 00:28:00,880 --> 00:28:04,760 Speaker 1: meal box or the flute, just just you could buy 486 00:28:04,800 --> 00:28:06,480 Speaker 1: a British Air says you can buy it all and 487 00:28:06,520 --> 00:28:09,240 Speaker 1: recreate the first class experience in your living room when 488 00:28:09,240 --> 00:28:12,280 Speaker 1: you're stuck at home, which which I don't know. I 489 00:28:12,280 --> 00:28:13,840 Speaker 1: don't know if anybody in the world will do that. 490 00:28:13,880 --> 00:28:15,840 Speaker 1: Someone is found to do that, though, I I guess, 491 00:28:15,880 --> 00:28:19,520 Speaker 1: but I'd pay zero. I've done too many miles in 492 00:28:19,560 --> 00:28:26,200 Speaker 1: British AIRLA first class globally, so no novelty there. You're 493 00:28:26,240 --> 00:28:31,879 Speaker 1: not looking to experience. I mean, if you're bringing this 494 00:28:32,000 --> 00:28:34,000 Speaker 1: up for prices, right, it's got to be something that's 495 00:28:34,000 --> 00:28:36,840 Speaker 1: a bit ridiculous, and you wouldn't normally pay for a blanket. 496 00:28:38,040 --> 00:28:43,800 Speaker 1: I'm gonna go, I'll go three hundred. I wouldn't. I 497 00:28:43,800 --> 00:28:46,840 Speaker 1: wouldn't pay three hundred dollars for a blanket, but you 498 00:28:46,880 --> 00:28:48,840 Speaker 1: never know. I'm gonna buy one and resell to you 499 00:28:48,920 --> 00:28:51,880 Speaker 1: only nine pounds for for the British Air blanket. See 500 00:28:52,120 --> 00:28:53,840 Speaker 1: you checked me again. I was thinking that it's got 501 00:28:53,840 --> 00:28:56,560 Speaker 1: to be something ridiculous if if you're bringing it on 502 00:28:56,600 --> 00:28:59,560 Speaker 1: the show, you can get the slippers for ten pounds, 503 00:28:59,560 --> 00:29:05,000 Speaker 1: which is probably which I think you can pretty much 504 00:29:05,000 --> 00:29:06,760 Speaker 1: walk off a flight with them normally. Right, they don't. 505 00:29:06,800 --> 00:29:09,080 Speaker 1: I don't think they don't think they frisk you free 506 00:29:09,080 --> 00:29:12,720 Speaker 1: your slippers when you're getting light. So all right, Randy, 507 00:29:12,760 --> 00:29:14,720 Speaker 1: what how about you? Have you seen anything crazy this week? 508 00:29:15,560 --> 00:29:18,640 Speaker 1: You know? A colleague, me and a colleague, one of 509 00:29:18,760 --> 00:29:21,960 Speaker 1: one of my analysts, were just talking about a data 510 00:29:22,000 --> 00:29:24,880 Speaker 1: point that I I'm surprised people aren't talking more about 511 00:29:25,560 --> 00:29:30,360 Speaker 1: existing home sales, one of one of the best leading 512 00:29:30,400 --> 00:29:34,280 Speaker 1: indicators of spending because of the multiplier you know effect, 513 00:29:34,280 --> 00:29:39,120 Speaker 1: when people buy a house at a fifteen year high, 514 00:29:39,160 --> 00:29:41,960 Speaker 1: the highest since two thousand and five, and not only 515 00:29:42,000 --> 00:29:45,479 Speaker 1: the highest since two thousand and five, but double the 516 00:29:45,520 --> 00:29:48,880 Speaker 1: peak in two thousand and five. Now, if you have 517 00:29:48,960 --> 00:29:51,160 Speaker 1: been around as long as I have, you remember two 518 00:29:51,240 --> 00:29:55,080 Speaker 1: thousand and five was a crazy housing market. People were 519 00:29:55,160 --> 00:29:59,240 Speaker 1: knocking down million dollar houses and building two million dollar houses. 520 00:30:00,200 --> 00:30:04,360 Speaker 1: You had taxi drivers owning three properties in Florida. It 521 00:30:04,480 --> 00:30:08,800 Speaker 1: was really an off the hook housing market. Existing home 522 00:30:08,840 --> 00:30:13,760 Speaker 1: sales are twice that peak right now, so so ready. Obviously, 523 00:30:13,800 --> 00:30:15,840 Speaker 1: I mean the low mortgage rates are a big part 524 00:30:15,840 --> 00:30:19,800 Speaker 1: of that, right, and maybe a bottleneck of of uh, 525 00:30:19,840 --> 00:30:22,320 Speaker 1: you know, purchases that didn't go through during the pandemic. 526 00:30:22,440 --> 00:30:24,200 Speaker 1: Or is it people moving out of the cities? What 527 00:30:24,240 --> 00:30:25,360 Speaker 1: do you what do you think is driving all this 528 00:30:25,520 --> 00:30:28,920 Speaker 1: other than obviously the low rates, Well, part of it's 529 00:30:29,040 --> 00:30:35,040 Speaker 1: definitely COVID related. Um. And what my analyst thinks, and 530 00:30:35,040 --> 00:30:38,920 Speaker 1: and I think he's right, is, uh, there might be 531 00:30:39,600 --> 00:30:43,880 Speaker 1: a new trend towards de urbanization. You know, I remember 532 00:30:44,000 --> 00:30:46,800 Speaker 1: thinking twenty years ago and looking at data twenty years 533 00:30:46,840 --> 00:30:50,040 Speaker 1: ago that jobs were moving to the cities, people were 534 00:30:50,080 --> 00:30:53,760 Speaker 1: moving to the cities. Uh, and you could see urbanization 535 00:30:54,200 --> 00:30:57,520 Speaker 1: in the numbers. I think you are now starting to 536 00:30:57,560 --> 00:31:03,400 Speaker 1: see signs and it's totally trade by COVID of d urbanization. Uh. Now, 537 00:31:03,400 --> 00:31:07,400 Speaker 1: granted it's technologically enabled. Look at what we're doing right now. 538 00:31:08,200 --> 00:31:10,280 Speaker 1: We could be anywhere doing this and I can do 539 00:31:10,360 --> 00:31:13,400 Speaker 1: my job from anywhere, but it might be spreading a 540 00:31:13,400 --> 00:31:16,440 Speaker 1: bit more broadly in the economy. And you know that 541 00:31:16,520 --> 00:31:20,160 Speaker 1: comes with positives and negatives, sir. That means that means 542 00:31:20,200 --> 00:31:23,520 Speaker 1: suburban dads like me are the coolest right now? Is 543 00:31:23,560 --> 00:31:26,000 Speaker 1: that right? It does. Yeah, it's exactly what it means. 544 00:31:27,680 --> 00:31:30,800 Speaker 1: That's right, That's what I thought. Yeah, yeah, obviously I 545 00:31:30,840 --> 00:31:33,120 Speaker 1: also wanted to ask you, Randy, after Mike brought up 546 00:31:33,360 --> 00:31:36,080 Speaker 1: the bit on Tesla and the electric vehicle market, because 547 00:31:36,120 --> 00:31:38,800 Speaker 1: you are always looking for structural growers in almost companies 548 00:31:38,840 --> 00:31:42,920 Speaker 1: of the future. What what's your vision there? Well, I 549 00:31:43,280 --> 00:31:48,000 Speaker 1: looked at Tesla and again, so back in two thousand 550 00:31:48,040 --> 00:31:50,680 Speaker 1: and four, I was co managing a global fund with 551 00:31:51,480 --> 00:31:55,560 Speaker 1: one of my senior colleagues and we were talking about 552 00:31:55,560 --> 00:31:59,280 Speaker 1: electric vehicles back then, uh, you know, sixteen years ago, 553 00:31:59,680 --> 00:32:03,200 Speaker 1: and we went around the world and looked at everything 554 00:32:03,280 --> 00:32:06,080 Speaker 1: that had to do with any electric vehicle, every battery 555 00:32:06,120 --> 00:32:11,080 Speaker 1: company everywhere, the electric power training, every component wherever you 556 00:32:11,120 --> 00:32:14,800 Speaker 1: could find someone that had any input into electric vehicles. 557 00:32:14,840 --> 00:32:17,840 Speaker 1: We looked at it and evaluated it because I only 558 00:32:17,920 --> 00:32:21,320 Speaker 1: invested in what I consider to be advantaged companies, and 559 00:32:21,360 --> 00:32:23,680 Speaker 1: so you have to be able to find the advantage. 560 00:32:23,960 --> 00:32:27,160 Speaker 1: There's actually very little advantage to be had in the 561 00:32:27,200 --> 00:32:30,120 Speaker 1: electric power training. It's mostly there's not a lot of 562 00:32:30,160 --> 00:32:35,360 Speaker 1: intellectual property there. But Tesla obviously a great design, obviously 563 00:32:35,440 --> 00:32:39,160 Speaker 1: a good company in terms of its product. What I 564 00:32:39,200 --> 00:32:42,800 Speaker 1: didn't like about Tesla was the corporate governance when when 565 00:32:42,840 --> 00:32:47,200 Speaker 1: the management team bailed out the solar company using Tesla 566 00:32:47,240 --> 00:32:51,240 Speaker 1: shareholder money. You know, I've got to get three things right. 567 00:32:51,320 --> 00:32:54,680 Speaker 1: I've got to get is the company worth owning ever? Right? 568 00:32:54,840 --> 00:32:57,520 Speaker 1: And that's about advantage. And then I've got to get 569 00:32:57,560 --> 00:33:00,560 Speaker 1: at what prices it worth owning? Right? And then the 570 00:33:00,600 --> 00:33:02,280 Speaker 1: third thing I've got to get right is are the 571 00:33:02,320 --> 00:33:06,520 Speaker 1: people running this company running it for shareholders? Uh? That's 572 00:33:06,600 --> 00:33:10,680 Speaker 1: where Tesla failed for me, and I chose not to 573 00:33:10,720 --> 00:33:13,880 Speaker 1: buy Tesla. Some things just have to go up without you. 574 00:33:14,240 --> 00:33:17,080 Speaker 1: But I do believe electric vehicles are going to continue 575 00:33:17,120 --> 00:33:20,440 Speaker 1: to take share of the overall fleet. All right, Sarah, 576 00:33:21,480 --> 00:33:25,440 Speaker 1: what do you got alright? So in honor of Thanksgiving. 577 00:33:26,000 --> 00:33:29,040 Speaker 1: I wanted to do something that was food related. And 578 00:33:29,080 --> 00:33:31,360 Speaker 1: they'll say this has come from this past weekend. But 579 00:33:31,520 --> 00:33:34,640 Speaker 1: did you see this story about this big coco trade 580 00:33:34,680 --> 00:33:38,160 Speaker 1: from her? She So I'm just going to read you 581 00:33:38,240 --> 00:33:39,680 Speaker 1: the top. I'm gonna read you to the top of 582 00:33:39,680 --> 00:33:41,800 Speaker 1: this story. It just says one of America's top chocolate 583 00:33:41,800 --> 00:33:44,520 Speaker 1: makers is up ending the New York coco market. Hershe 584 00:33:44,680 --> 00:33:47,840 Speaker 1: is taking the unusual unusual step of directly sourcing a 585 00:33:47,960 --> 00:33:51,680 Speaker 1: large amount of cocoa through the Ice Futures US Exchange 586 00:33:51,720 --> 00:33:54,880 Speaker 1: instead of buying beans in the physical market. And then 587 00:33:54,880 --> 00:33:57,720 Speaker 1: it goes on to say the massive trade has set 588 00:33:57,760 --> 00:34:01,720 Speaker 1: December delivery futures to a record meum over the next contract. 589 00:34:01,760 --> 00:34:04,400 Speaker 1: And supposedly this purchase was so large that they required 590 00:34:04,440 --> 00:34:07,120 Speaker 1: special permission from the exchange. If you look at this chart, 591 00:34:07,160 --> 00:34:10,240 Speaker 1: it really is just i mean pun intended off the charts. 592 00:34:10,680 --> 00:34:13,239 Speaker 1: Uh it's it's it's pretty crazy. It is as an 593 00:34:13,280 --> 00:34:16,240 Speaker 1: amazing story. My favorite part of that story is apparently 594 00:34:16,280 --> 00:34:20,040 Speaker 1: there's like uh opeque type of cartel for for cocoa, 595 00:34:20,880 --> 00:34:23,640 Speaker 1: which which I was not aware of. I mean, like personally, 596 00:34:23,640 --> 00:34:25,680 Speaker 1: I'd rather be part of the chocolate cartel than the 597 00:34:25,719 --> 00:34:30,000 Speaker 1: oil cartel, but right right. They also said chocolate demand 598 00:34:30,120 --> 00:34:32,839 Speaker 1: had been reduced during COVID. I don't see that at all. 599 00:34:32,880 --> 00:34:34,920 Speaker 1: I would have thought it went through the roof people stress. 600 00:34:34,960 --> 00:34:40,200 Speaker 1: They're not They're not at our households. Mike, Yeah, so 601 00:34:40,400 --> 00:34:41,799 Speaker 1: I don't know, Randy, I don't know if you've ever 602 00:34:41,880 --> 00:34:45,160 Speaker 1: dabbled in cocoa futures. That's that seems like a perilous 603 00:34:45,200 --> 00:34:48,400 Speaker 1: market to me only as a consumer. As an investor, 604 00:34:50,320 --> 00:34:52,120 Speaker 1: I think that's the right good side to be on. 605 00:34:53,880 --> 00:34:56,799 Speaker 1: Plenty of chocolate these days. Uh, alright, Well, we're gonna 606 00:34:56,840 --> 00:34:58,719 Speaker 1: have to leave it there. We wanna wish a very 607 00:34:58,760 --> 00:35:01,319 Speaker 1: happy Thanksgiving to all. Know it's past, but we really 608 00:35:01,320 --> 00:35:04,439 Speaker 1: hope that you could enjoy it even in a year 609 00:35:04,760 --> 00:35:08,560 Speaker 1: as strange As and Randy Dishman, thank you so much 610 00:35:08,560 --> 00:35:10,800 Speaker 1: for joining the podcast this week. It was a blast. 611 00:35:10,960 --> 00:35:21,960 Speaker 1: Thanks for having me what goes up? We'll be back 612 00:35:22,040 --> 00:35:24,719 Speaker 1: next week. Until then, you can find us on the 613 00:35:24,719 --> 00:35:28,640 Speaker 1: Bloomberg Terminal website and app, or wherever you get your podcasts. 614 00:35:29,120 --> 00:35:31,040 Speaker 1: We'd love it if you took the time to rate 615 00:35:31,080 --> 00:35:33,800 Speaker 1: and review the show on Apple Podcasts so more listeners 616 00:35:33,800 --> 00:35:36,120 Speaker 1: can find US and you can find us on Twitter, 617 00:35:36,440 --> 00:35:40,200 Speaker 1: follow me at Sarah pont Sec, Mike is that Reaganonymous, 618 00:35:40,440 --> 00:35:44,640 Speaker 1: and you can also follow Bloomberg Podcasts at podcasts. Also 619 00:35:44,680 --> 00:35:46,840 Speaker 1: thank you to Charlie Pellett of Bloomberg Radio and the 620 00:35:46,920 --> 00:35:49,839 Speaker 1: voice of the New York City Subway system. What Goes 621 00:35:49,920 --> 00:35:52,640 Speaker 1: Up is produced by Jordan Gospore. The head of Bloomberg 622 00:35:52,640 --> 00:35:56,120 Speaker 1: podcast is Francesca Levie. Thanks for listening, See you next time.