WEBVTT - Single Best Idea: Lori Calvasina & Jim Caron

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>The single best idea really interesting Monday, we had a

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<v Speaker 2>huge equity focus here, of course, with the stock market

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<v Speaker 2>future is doing so well today, a little bit of

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<v Speaker 2>fixed income. Thank you Jim Caron for coming in. We'll

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<v Speaker 2>get to him in a moment. Lori Kelvisena in with

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<v Speaker 2>RBC Capital Markets and she went up the income statement.

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<v Speaker 2>I can't say how deficient I see out there. The

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<v Speaker 2>earnings focus. People toss around fancy words like Brockton, who

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<v Speaker 2>produces for us. He's got a license plate that says

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<v Speaker 2>EBITDA on it, just to impress the financial babes. Anyways,

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<v Speaker 2>the idea is you go up the income statement. At

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<v Speaker 2>the top of the income statement is revenue analysis divided

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<v Speaker 2>into price and units. Lori Kelvisena, RBC Capital Markets.

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<v Speaker 3>You know, I can't say on that company specifically, but

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<v Speaker 3>when I do sort of my modeling Tom and in

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<v Speaker 3>my earnings model, the revenue line is very much a

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<v Speaker 3>quant driven model. So we have kind of five different components,

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<v Speaker 3>and with revenues, the two most impactful macro variables are

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<v Speaker 3>GDP and CPI, and so we're looking at real GDP

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<v Speaker 3>and then CPI. We break them out separately, and both

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<v Speaker 3>of those if you take the assumptions up, it's going

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<v Speaker 3>to goose your revenue number.

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<v Speaker 2>Laurie kelvicin, I can't say over the weekend what it

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<v Speaker 2>was exactly, but Atlanta GDP now looking at Q three

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<v Speaker 2>ending September thirtieth tomorrow inflation in GDP, the GDP number

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<v Speaker 2>is just breathtakets three point x percent, nowhere near slow down.

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<v Speaker 2>All of that may be cap X and AI and

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<v Speaker 2>all that, but nevertheless it's a buoyant a third quarter

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<v Speaker 2>to begin the earnings season. Jim Keren with us with

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<v Speaker 2>Morgan Stanley as well Jim Caron on the oddities of

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<v Speaker 2>banks within the.

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<v Speaker 1>Fixed SAT of space. We've been looking primarily at the

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<v Speaker 1>high yield space and also bank loans. So bank loans

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<v Speaker 1>are it's almost like floating rate high yield, and in

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<v Speaker 1>some ways it's a shorter term reset. On that, what

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<v Speaker 1>I would say is that despite the fact that we

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<v Speaker 1>think rates are coming down, we think that short term

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<v Speaker 1>high yield credit bank loans in particular actually have more

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<v Speaker 1>room to appreciate in price value over time as default

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<v Speaker 1>risks stay relatively low. A lot of people like high yield.

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<v Speaker 1>We do too, but we also like the bank loan debt,

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<v Speaker 1>and we also like to barbel that by owning some

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<v Speaker 1>short term, high quality government bonds.

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<v Speaker 2>Here's the reality, folks. Jim Karen read all twelve hundred

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<v Speaker 2>pages of Fabosi. I skimmed each chapter. Jim Karen with

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<v Speaker 2>Morgan Stanley. We're on podcasts nationwide. Look for Apple podcasts,

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<v Speaker 2>Spotify and on YouTube podcasts. It's single best idea.

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<v Speaker 1>Also wants alot in under mus