WEBVTT - Fundamentals Still Matter Despite Reddit Noise: Federated's Orlando 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Along 0:00:04.120 --> 0:00:06.200 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.360 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.400 --> 0:00:13.600 along with essential market moving news. Find the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple podcast or wherever you listen to podcasts, 0:00:17.000 --> 0:00:20.320 and on Bloomberg dot com. Let's get to our next guest, now, 0:00:20.320 --> 0:00:22.960 Phil Orlando, with chief equity market strategist and ahead of 0:00:23.000 --> 0:00:27.360 client portfolio managing at Federated Hermes and always has really 0:00:27.360 --> 0:00:29.400 interesting things to say. Phil, Since the last time we 0:00:29.400 --> 0:00:32.640 spoke with you, I think maybe a couple of structural 0:00:32.720 --> 0:00:37.040 fragilities have been exposed in this market and also some 0:00:37.200 --> 0:00:40.640 froth in places, more places now than before. What's your 0:00:40.640 --> 0:00:43.319 big take on what's going on between the redditors and 0:00:44.200 --> 0:00:47.880 the market and the brokerages and the hedge funds. Well, 0:00:48.280 --> 0:00:53.000 you know this whole uh reddit game, stop robin hood 0:00:53.080 --> 0:00:58.040 saying is is very interesting and certainly very entertaining. But 0:00:58.040 --> 0:01:02.640 but the reality is that that ultimately fundamentals still matter. 0:01:03.320 --> 0:01:05.000 You know. I don't know if you stayed up late 0:01:05.080 --> 0:01:08.759 to watch the Saturday Night Live skit with Kate McKinnon 0:01:08.800 --> 0:01:13.080 and Pete Davidson. But you know, all kidding aside, that 0:01:13.240 --> 0:01:18.640 really shone a light on what ultimately matters longer term, 0:01:18.680 --> 0:01:22.280 and that if a company's fundamentals are strong, revenues and 0:01:22.319 --> 0:01:26.160 earnings will go up and that will drive share prices higher. 0:01:26.400 --> 0:01:29.280 If the business is weak, revenues and earnings are going 0:01:29.319 --> 0:01:33.360 the wrong way, ultimately the share price will decline. Now 0:01:33.640 --> 0:01:36.600 that there could be noise in the interim, and that's 0:01:36.640 --> 0:01:40.119 what we're seeing now with with you know, the hedge 0:01:40.160 --> 0:01:44.840 funds and the redded people and whatever. But but you know, um, 0:01:45.280 --> 0:01:50.160 longer term, ultimately, these companies are going to succeed or 0:01:50.280 --> 0:01:53.960 fail on the basis of the underlying supply and demand 0:01:54.360 --> 0:01:58.000 and strength of their business. Still. I mean, you know, 0:01:58.040 --> 0:02:01.240 we've seen these stype the phenomena in the past and 0:02:01.320 --> 0:02:04.360 kind of you know, a term of old day trader, 0:02:04.440 --> 0:02:06.400 if you will. But I guess what's new here is 0:02:06.400 --> 0:02:09.280 there's so much liquidity on the sidelines, so much liquidity 0:02:09.320 --> 0:02:12.760 in the marketplace. You've got the advent of social media 0:02:12.960 --> 0:02:16.200 and the ability for retailers to kind of really team 0:02:16.280 --> 0:02:20.200 up if you will, in a particular security. Um, you've 0:02:20.200 --> 0:02:22.359 got the pandemic, people are kind of locked in their homes. 0:02:22.680 --> 0:02:24.880 How much of this is kind of a one off, 0:02:25.000 --> 0:02:27.920 short term phenomena versus maybe a new wrinkle to the 0:02:27.960 --> 0:02:32.040 market going forward. Everything you've said is absolutely true that 0:02:32.120 --> 0:02:35.000 we you know, the advent of social media, the fact 0:02:35.080 --> 0:02:38.440 that they're somewhere between four and five trillion dollars of 0:02:38.560 --> 0:02:43.040 cash sitting on the sidelines. Uh, we're sitting here. Uh. 0:02:43.200 --> 0:02:47.080 The last personal savings rate we saw was around thirteen 0:02:47.160 --> 0:02:51.200 or fourteen percent. So people are flush with cash, stock 0:02:51.240 --> 0:02:53.840 markets up, They've got nothing to do. We're locked in 0:02:53.840 --> 0:02:57.720 our house. We've got a snowstorm here in the northeast, um, 0:02:57.800 --> 0:03:00.160 you know, And and people are bored, and they say, well, 0:03:00.240 --> 0:03:03.320 let's let's stick it to the man. Let's let's take 0:03:03.360 --> 0:03:07.120 out some of these wealthy hedge fund guys and team 0:03:07.200 --> 0:03:09.520 up and drive these stocks higher and force them to 0:03:09.560 --> 0:03:13.200 cover their shorts. All of that's true, But the reality is, 0:03:13.240 --> 0:03:18.919 where's the endgame? At what point do fundamentals matter and 0:03:19.120 --> 0:03:22.120 individuals need to sell to lock in their profits or 0:03:22.200 --> 0:03:25.040 create some additional liquidity. Who are they going to sell 0:03:25.120 --> 0:03:29.799 to if the fundamentals are poor and everyone who uh, 0:03:29.960 --> 0:03:33.000 you know, potentially they would need to buy the stock 0:03:33.160 --> 0:03:36.600 is already in UM, so you run the risk of 0:03:37.040 --> 0:03:40.360 looking at the mirror image of this somewhere down the 0:03:40.440 --> 0:03:43.640 road now is that? Is that somewhere down the road tomorrow, 0:03:43.880 --> 0:03:48.560 next week, next month timing? I have no idea, So yeah, 0:03:48.640 --> 0:03:51.360 and I suppose that was my original question, Phil. I mean, 0:03:51.480 --> 0:03:55.960 we have a combination of market makeup, positioning, hedge, fund positioning, 0:03:56.000 --> 0:04:02.160 retail positioning, so much leverage, technicals, economic risk thanks to COVID, 0:04:02.520 --> 0:04:07.280 there are so many difficulties out there. What would make 0:04:07.320 --> 0:04:09.920 you want to trade in this market or I mean, 0:04:09.960 --> 0:04:12.280 would you even want to sort of deleverage a little 0:04:12.280 --> 0:04:17.279 bit here? Well, certainly we're not buying into this. We're 0:04:17.360 --> 0:04:21.080 we're not buying these stocks that we think or you know, 0:04:21.200 --> 0:04:24.040 have poor fundamentals that are getting driven up because of 0:04:24.080 --> 0:04:29.520 these market dynamics. Ultimately, we're looking across the proverbial valley 0:04:29.600 --> 0:04:32.159 and seeing, you know, what could happen on the other 0:04:32.200 --> 0:04:37.640 side when when you've got some margin calls or when 0:04:37.640 --> 0:04:39.840 you start to get a tsunami of selling in order 0:04:39.880 --> 0:04:44.000 to create some liquidity. So we're studying the underlying fundamentals 0:04:44.000 --> 0:04:46.000 of the market, which frankly we think are pretty good. 0:04:46.680 --> 0:04:50.560 So so, you know, as if there is an air 0:04:50.640 --> 0:04:54.000 pocket here, if there is a dislocation over the course 0:04:54.040 --> 0:04:56.279 of the next month or two, and you know, the 0:04:56.360 --> 0:05:00.320 market gets flapped around and drops by, you know, a 0:05:00.320 --> 0:05:03.560 fairly significant amount. And we still think the fundamentals are 0:05:03.600 --> 0:05:06.680 good based upon the things the President Biden is doing, 0:05:06.680 --> 0:05:09.200 and the rollout of the vaccine, and the fact that 0:05:09.240 --> 0:05:11.960 the set is keeping interest rate to zero. All of 0:05:12.000 --> 0:05:15.680 those things the things that truly matter. At that point 0:05:16.080 --> 0:05:19.200 the decision maybe, well, let's let's throw to the log 0:05:19.240 --> 0:05:22.600 on the fire here, expecting that stock prices will work 0:05:22.720 --> 0:05:25.440 higher longer term. All right, so let's go a little 0:05:25.440 --> 0:05:27.120 bit on the on the fundamentals here, get away from 0:05:27.120 --> 0:05:30.560 the redditors. Earnings were about the third or the way through. 0:05:30.600 --> 0:05:33.520 What are you seeing here. We're seeing a great earning season. 0:05:33.560 --> 0:05:37.400 We're as you said, we're about forty of the way through. Uh, 0:05:37.520 --> 0:05:42.520 we are seeing The consensus expectation going into the quarter 0:05:43.120 --> 0:05:46.159 was that earnings would be down something in the order 0:05:46.160 --> 0:05:48.320 of about nine or ten percent on a year of 0:05:48.360 --> 0:05:54.159 a year basis. So far, earnings are up. Three of 0:05:54.160 --> 0:05:57.400 the companies that have already reported have beaten by an 0:05:57.440 --> 0:06:00.400 average of seventeen and a half percent. That is the 0:06:00.520 --> 0:06:04.520 third best beat rate in history, trailing only the second 0:06:04.600 --> 0:06:07.120 quarter in the third quarter of last year. So the 0:06:07.120 --> 0:06:11.479 earnings are coming in strong again, the vaccines rolling out, 0:06:11.520 --> 0:06:14.240 the sets staying at zero, all of that suggests that 0:06:14.320 --> 0:06:17.560 the underlying fundamentals for the market, the stuff that truly matters, 0:06:17.800 --> 0:06:21.599 isn't pretty good shape. Hey Phil, thanks as always, always 0:06:21.640 --> 0:06:24.240 appreciate getting your bullish call on the market. You've been 0:06:24.240 --> 0:06:27.080 absolutely spot on. Uh So we'll see how the rest 0:06:27.080 --> 0:06:29.760 of these earnings come through this quarter. Phil Orlando, chief 0:06:29.760 --> 0:06:33.720 equity market strategist and head of client portfolio Management of 0:06:33.760 --> 0:06:36.600 Federated Hermes. Uh they're based he is based in New 0:06:36.680 --> 0:06:40.040 York City and eighty billion dollars in equities under management, 0:06:40.080 --> 0:06:44.880 six fifteen billion firm wide, So Federated Hermes all over 0:06:44.920 --> 0:06:47.720 the market. And Phil certainly has a great handle on 0:06:47.960 --> 0:06:52.240 the market. And again, as I said, he's been consistently bullish, 0:06:52.360 --> 0:06:54.240 you know, over the last couple of years, and he's 0:06:54.240 --> 0:06:59.719 been absolutely spot on. Well, the trading activity we've seen 0:06:59.800 --> 0:07:02.159 in a handful of stock starting last week with game 0:07:02.200 --> 0:07:06.240 Stock Game Stop and then expanding to others really highlighted 0:07:06.240 --> 0:07:09.880 a trading strategy of looking for stocks relatively small to 0:07:09.920 --> 0:07:13.360 MidCap stocks with big short interest and jumping in on 0:07:13.440 --> 0:07:16.360 those and creating a good old fashioned short squeeze. One 0:07:16.360 --> 0:07:18.480 of the folks that's involved in in just kind of 0:07:18.520 --> 0:07:22.440 the whole process of the data around short interests is 0:07:22.800 --> 0:07:26.280 Bob Sloan, founder and managing partner of S three Partners 0:07:26.920 --> 0:07:30.800 S three Partners of finance company that provides data analytics. 0:07:31.080 --> 0:07:33.600 It's most used product is black app. It's the market 0:07:33.640 --> 0:07:36.400 standard for real time short interests and securities finance for 0:07:36.440 --> 0:07:40.840 about forty thousand security so clearly on top of that 0:07:40.840 --> 0:07:43.880 short interest data. Bob, thanks so much for joining us here. 0:07:44.560 --> 0:07:47.600 What did what did you make of last week? Your 0:07:47.600 --> 0:07:51.480 company and you you've been involved in the this. We 0:07:51.520 --> 0:07:53.480 may have lost Paul in the blizzard. It's kind of 0:07:53.600 --> 0:07:56.040 to make us noment, but Bob, the general point is 0:07:56.120 --> 0:08:00.680 well taken. So what did you make of last week? Well, 0:08:00.720 --> 0:08:04.920 we were seeing the markets change right in front of 0:08:04.920 --> 0:08:09.480 our eyes. There's a new socially mobilized force and investing 0:08:10.400 --> 0:08:17.200 and it has taken to targeting short sellers as its 0:08:17.280 --> 0:08:24.040 investment strategy and opportunity for the time being. How many 0:08:24.120 --> 0:08:26.840 times can this happen? So for example, this week it 0:08:26.840 --> 0:08:29.520 seems to be silver, but it's a whole different bowl 0:08:29.560 --> 0:08:32.679 game taking on something like silver then taking on a 0:08:32.800 --> 0:08:38.079 stock like game stock. I think what we're seeing isn't 0:08:38.160 --> 0:08:42.280 just an attack on institutions generally. Um. That's one of 0:08:42.280 --> 0:08:45.240 the things I wrote in the piece UM that I 0:08:45.320 --> 0:08:50.400 put up on on on our website, is that you know, 0:08:50.679 --> 0:08:54.520 the the attack on the capitol, Um, you're seeing an 0:08:54.559 --> 0:08:58.560 attack on financial institutions, just just an attack on institutions generally. 0:08:59.000 --> 0:09:02.560 And this has become the nexus of Reddit. Combined with 0:09:03.080 --> 0:09:08.120 socially scaled activists, investing has become an attack on institutions. 0:09:08.120 --> 0:09:10.880 And this is why they love Elon must so much. 0:09:11.240 --> 0:09:12.960 You know, he's like, how can they love a billionaire 0:09:13.000 --> 0:09:15.600 because he took on the short sellers in one It's 0:09:15.600 --> 0:09:19.120 that simple for now, at least. I mean, you know, 0:09:19.440 --> 0:09:22.440 these stories are never over until they're over. But they 0:09:22.520 --> 0:09:25.280 also embrace a lot of people that sort of say 0:09:25.320 --> 0:09:28.319 the right thing but aren't necessarily doing the right thing. 0:09:28.320 --> 0:09:32.120 I mean, um, you know, he took he may have 0:09:32.120 --> 0:09:34.000 taken all the short sellers, but in their own way, 0:09:34.040 --> 0:09:37.600 the short sellers can flush out things like fraud and 0:09:38.080 --> 0:09:40.560 you know, wrong valuations and stuff on Wall Street. So 0:09:40.600 --> 0:09:45.120 why are short sellers in particular the bad guy? I 0:09:45.120 --> 0:09:47.280 don't think that they are, you know, I obviously have 0:09:47.320 --> 0:09:50.520 a very long history of understanding and defending the right 0:09:51.080 --> 0:09:53.920 to have negative views expressed in the marketplace. There's no 0:09:54.040 --> 0:09:57.640 marketplace unless there's two way price discovery, meaning, you know, 0:09:57.800 --> 0:09:59.559 it can't just be all up. It's like having a 0:09:59.600 --> 0:10:02.840 democra see where you can only vote yes. That's not 0:10:02.880 --> 0:10:05.000 a society, right. You have to be able to vote 0:10:05.000 --> 0:10:07.600 no too. And so I think when you see these 0:10:07.600 --> 0:10:10.160 things like on Meet the Press yesterday where Chuck Todd 0:10:10.240 --> 0:10:12.600 is asking, you know, people from the White House, should 0:10:12.600 --> 0:10:15.800 short selling be banned? You know, that's just kind of stupid. 0:10:15.840 --> 0:10:19.440 That's just not how markets work. We need short selling 0:10:19.679 --> 0:10:22.400 and we need that function to be in the marketplace 0:10:22.440 --> 0:10:25.920 because otherwise when we want to get our money, when 0:10:25.920 --> 0:10:27.560 we want our money, it's not going to be there. 0:10:27.559 --> 0:10:29.960 And that's really vitally. Bob, you said a few minutes 0:10:30.000 --> 0:10:32.320 ago that this is a populist revolution in financial markets, 0:10:32.320 --> 0:10:33.920 and indeed, if you look at some of the language, 0:10:34.080 --> 0:10:38.920 you know that's obviously what what some of the characteristics 0:10:38.960 --> 0:10:42.040 of this sort of quote unquote revolution are but it 0:10:42.080 --> 0:10:45.480 was a real revolution. Wouldn't these people be be targeting 0:10:45.800 --> 0:10:50.240 long positions just as much as short positions? Well, you know, 0:10:51.480 --> 0:10:55.920 you know, I think that, Um, the revolution is in 0:10:56.000 --> 0:10:58.800 the use of the technology, and it's made them an 0:10:58.800 --> 0:11:02.960 activist investor. So typically an activist would show up to 0:11:02.960 --> 0:11:05.000 a company and say, you know, I own six percent 0:11:05.040 --> 0:11:07.600 of the shares and you know, these are the things 0:11:07.640 --> 0:11:09.320 I like the company to go do, and the company 0:11:09.320 --> 0:11:12.760 would the other adopt a strategy not to do that, 0:11:12.960 --> 0:11:16.520 or they generally would say, okay, you know, let's let's 0:11:16.520 --> 0:11:20.560 fire people. And this is something much more basic. It's hey, 0:11:20.640 --> 0:11:23.520 I like the popcorn at AMC. You know, I like 0:11:23.679 --> 0:11:25.880 my flip phone. I like talking to my person at 0:11:25.920 --> 0:11:29.240 game stuff. It's much more about a cultural thing, and 0:11:29.280 --> 0:11:31.520 it just so happens to be. These stocks are all 0:11:32.040 --> 0:11:36.600 more or less in one sector, consumer and retail, and 0:11:36.640 --> 0:11:41.240 so this is why it's happening. Um, this cross current 0:11:41.280 --> 0:11:46.280 between socially mobilized investing and short interest in this area. Hoop, 0:11:46.320 --> 0:11:49.360 are you surprised that some big hedge funds really really 0:11:49.360 --> 0:11:54.880 got hurt here? UM? Name me a risk model from 0:11:54.920 --> 0:11:57.280 the Federal Reserve to any hedge fund in the world 0:11:57.520 --> 0:12:02.319 that saw this as a risk. A good point. What 0:12:02.960 --> 0:12:04.600 do you think is next year, Bobo, We're gonna see 0:12:04.600 --> 0:12:07.360 more of this going forward, this combination of social media 0:12:07.440 --> 0:12:11.600 and trading activity. It's a really it's a really sticky 0:12:11.679 --> 0:12:15.320 question because the little person, as it were, and they're 0:12:15.360 --> 0:12:17.000 not little people, and that's not you know, I'm just 0:12:17.040 --> 0:12:22.880 saying the smaller investor is retail is now empowered with 0:12:23.040 --> 0:12:29.080 something massively potent, and so how do you regulate that? 0:12:29.080 --> 0:12:32.640 That is the sixty foll question. Yeah, this, of course, 0:12:32.640 --> 0:12:35.240 as we just get news that Robin Hood had to 0:12:35.480 --> 0:12:39.160 recapitalize itself once again. According to Dow Jones, it's taken 0:12:39.240 --> 0:12:42.040 another more than two billion dollars to point four billion 0:12:42.040 --> 0:12:47.320 dollars from shareholders scaring requirements. Yeah, Vonnie, So that's a 0:12:47.360 --> 0:12:49.720 great point. You know, one of the things that should 0:12:49.720 --> 0:12:55.679 be examined here is what happened with that company in 0:12:55.800 --> 0:12:58.480 terms of how they were handling margin, What were the 0:12:58.559 --> 0:13:01.880 risk parameters that they had in place? Um as this 0:13:01.960 --> 0:13:05.480 flow is happening. So that's certainly an area of you know, 0:13:05.559 --> 0:13:08.000 rightful scrutiny. You're gonna have to promise come on again 0:13:08.120 --> 0:13:09.720 very soon, because we want to keep our eye on 0:13:09.760 --> 0:13:12.959 this story, or it'll keep its eye on us, for sure. 0:13:13.040 --> 0:13:16.480 Bob Sloan as founder and managing partner at S three Partners, 0:13:17.000 --> 0:13:20.000 And it's interesting listening to Bob Sloan just about you know, 0:13:20.280 --> 0:13:22.199 short selling being a part of the market of Annie 0:13:22.200 --> 0:13:24.520 and I think that's uh, I think what most people 0:13:24.559 --> 0:13:27.560 tend to conclude, uh, you know, as they think about 0:13:27.559 --> 0:13:29.560 short selling. We seem to have this discussion about short 0:13:29.559 --> 0:13:32.079 selling every five or six years or so and whether 0:13:32.120 --> 0:13:34.400 it should be allowed in the marketplace. And I think 0:13:34.400 --> 0:13:37.000 where we always come down as a marketplaces it is 0:13:37.080 --> 0:13:39.920 a normal part of a healthy market. Although sometimes ago 0:13:40.000 --> 0:13:41.920 I always thought the short sellers were the black sheep 0:13:41.960 --> 0:13:44.480 of the market. For the populace to jump on the 0:13:44.480 --> 0:13:46.760 short seller is is it's it's a little ironic. I mean, 0:13:46.800 --> 0:13:49.240 I think it has something to do with GM as well. Yeah, 0:13:49.240 --> 0:13:54.839 we'll have more on that coming up. This is Bloomberg. Well, 0:13:54.920 --> 0:13:57.880 today is the first day of Black History Month. As 0:13:57.880 --> 0:14:01.840 a country continues to struggle with how to address racial inequality, 0:14:02.200 --> 0:14:05.200 our next guest can discuss how individuals can support racial 0:14:05.440 --> 0:14:08.120 diversity with their investments joining us now is Marvin Owens. 0:14:08.200 --> 0:14:11.400 It's the chief Engagement Officer at Impact Shares and a 0:14:11.480 --> 0:14:14.040 former Senior Director of Economic Development at the n double 0:14:14.080 --> 0:14:16.440 A CP. Marvin, thanks so much for joining us here. 0:14:16.600 --> 0:14:19.160 I love to start out with just getting a description 0:14:19.200 --> 0:14:23.840 of what Impact Shares does. Hey, thanks for having me. 0:14:23.920 --> 0:14:27.120 It's good to be here. UH. Impact Shares It's is 0:14:27.160 --> 0:14:30.600 a first of its kind nonprofit fund manager that really 0:14:30.640 --> 0:14:35.640 focuses on how you connect capital with social causes. We 0:14:35.680 --> 0:14:39.520 are an engagement for where engagement platform where investors and 0:14:39.640 --> 0:14:43.720 corporations and advocacy organizations have come together um to use 0:14:43.800 --> 0:14:46.200 capital to move the needle on social issues. So in 0:14:46.240 --> 0:14:49.320 the case of our current our current platform we have, 0:14:50.000 --> 0:14:53.000 of course are in a CP fund which is The 0:14:53.040 --> 0:14:56.280 advocacy organization is the a c P. We have the 0:14:56.440 --> 0:14:58.840 w O MN and fund which is focused on gender 0:14:58.840 --> 0:15:02.760 equity is UH Ethics. The organization is the y w 0:15:02.880 --> 0:15:05.600 c A, and we're working with the u N on 0:15:06.320 --> 0:15:09.600 our fund sd g A, which focuses on sustainable development goals, 0:15:09.720 --> 0:15:13.280 all of which are our platforms that create an opportunity 0:15:13.320 --> 0:15:15.680 to kind of really move the needle on social issues 0:15:15.760 --> 0:15:19.359 and using capital to really make that happen, which is fantastic. 0:15:19.400 --> 0:15:21.800 Let's start with n A c P, which is the 0:15:21.800 --> 0:15:24.840 in fact shares a CP Minority Empowerment e t F. 0:15:25.120 --> 0:15:27.520 Right now, you have a hundred and seventy four holdings 0:15:27.560 --> 0:15:31.000 in there, and the top one is Apple, followed by Microsoft. 0:15:31.360 --> 0:15:35.560 What can you do in order to pressure Apple, Microsoft 0:15:35.600 --> 0:15:38.160 and the other major companies like that that are you know, 0:15:38.240 --> 0:15:41.640 just one four of the e t F to make 0:15:41.680 --> 0:15:45.880 some positive changes. Well, here's the thing. I think that 0:15:45.960 --> 0:15:49.280 in the current environment in which their number of companies 0:15:49.280 --> 0:15:52.160 that have come out and made some very explicit statements 0:15:52.240 --> 0:15:55.520 of standing against racial discrimination and wanting to really engage 0:15:55.520 --> 0:15:59.240 and change, UM, we now have this e t F 0:15:59.440 --> 0:16:03.280 which is another tool to really insent those kinds of changes. 0:16:03.480 --> 0:16:05.920 I mean, uh, this is really not just driven by 0:16:06.000 --> 0:16:08.160 the advocacy community, but it really is being driven by 0:16:08.200 --> 0:16:11.480 the investor community as well. UM. Investors really do want 0:16:11.480 --> 0:16:15.120 to see companies UM truly engaged in the kind of 0:16:15.200 --> 0:16:19.280 social issues that reflective of of society within the society's 0:16:19.320 --> 0:16:22.280 best interests. So when it comes to racial equity, UM, 0:16:22.480 --> 0:16:25.720 now it's not just the advocacy community kind of voicing 0:16:25.760 --> 0:16:28.600 these concerns, but now it's also the investor communities pushing 0:16:28.640 --> 0:16:30.520 for these changes, which I think is going to help 0:16:31.240 --> 0:16:36.360 these corporations to move the needle. Marvin, the pandemic and 0:16:36.400 --> 0:16:40.560 the economic fallout UM is really shown. I say, brighter light, 0:16:40.600 --> 0:16:44.240 if you will, on the economic disparity in this country. Um, 0:16:45.240 --> 0:16:47.040 how are you kind of viewing that, how much of 0:16:47.080 --> 0:16:50.680 this potential damage to some of these minority communities might 0:16:50.680 --> 0:16:53.960 be a little bit more permanent than temporaries relates to 0:16:54.000 --> 0:16:57.080 the pandemic. Yeah, we're really concerned about that. You know, 0:16:57.120 --> 0:16:59.520 in the middle of this pandemic, black workers have really 0:16:59.520 --> 0:17:03.160 been impacted disproportionately, just like black workers have been impacted 0:17:03.200 --> 0:17:06.600 by UM the infections of the disease itself. I think 0:17:06.600 --> 0:17:09.600 it's important to note that black workers have lost a 0:17:09.680 --> 0:17:12.679 disproportionate amount of jobs as well, and so we are 0:17:12.720 --> 0:17:16.879 concerned about that because you add this COVID reality to 0:17:17.000 --> 0:17:21.280 an already widening wealth gap and and and wage gap 0:17:21.359 --> 0:17:23.520 that exists in this country, and you have been making 0:17:23.840 --> 0:17:27.679 something that is more devastating and hopefully not permanent. But 0:17:27.680 --> 0:17:29.760 I think there's some things we can do to change that, 0:17:29.800 --> 0:17:31.879 which means we really need to look at legislation that 0:17:32.520 --> 0:17:35.800 really understands what these issues all about and really moves 0:17:35.800 --> 0:17:38.639 the needle on making sure that we close some of 0:17:38.680 --> 0:17:40.439 these gaps. I think there's a lot we can do 0:17:40.520 --> 0:17:44.240 to gather them, and I'm encouraged by the current administration 0:17:44.359 --> 0:17:47.080 which is making all the all the right moves and 0:17:47.119 --> 0:17:49.040 saying the right things. We just need to make sure 0:17:49.160 --> 0:17:52.000 that we are able to push to make sure the 0:17:52.080 --> 0:17:56.240 changes are really implemented policy wise, right exactly? How you know, 0:17:56.359 --> 0:17:59.040 what do you like about the Widen racial Equity Plan, 0:17:59.359 --> 0:18:01.919 Let's say, Marvin, I mean, what are the parts that 0:18:01.960 --> 0:18:05.160 we really need to make sure come to fruition. Well, 0:18:05.200 --> 0:18:06.840 I think, um, first of all, you have to just 0:18:06.920 --> 0:18:11.480 kind of just kinda give them some some some recognition 0:18:11.600 --> 0:18:14.680 for being able to even use the words like white supremacy, 0:18:14.720 --> 0:18:17.160 which I don't think any other American president has really 0:18:17.359 --> 0:18:21.000 used in an in an inauguration speech, which says a lot. 0:18:21.119 --> 0:18:22.920 But I also think we've got to move the needle 0:18:22.960 --> 0:18:26.160 on making sure that these uh, these policies are really 0:18:26.160 --> 0:18:29.040 focused on how do we really tap into the needs 0:18:29.080 --> 0:18:32.600 of black business owners. UM. I like what they're what 0:18:32.640 --> 0:18:35.800 they're saying in terms of everything wanting to UM target 0:18:36.359 --> 0:18:38.600 uh communities of color and making sure that we're talking 0:18:38.600 --> 0:18:41.400 about racial equity in terms of policy. But we've also 0:18:41.440 --> 0:18:45.240 got to make sure that UM that we're utilizing black 0:18:45.280 --> 0:18:48.680 fund managers, that we're utilizing black asset managers. We're looking 0:18:48.720 --> 0:18:50.760 at how to make sure that we are using minority 0:18:50.840 --> 0:18:55.280 depository institutions when we roll out these new COVID packages 0:18:55.359 --> 0:18:57.880 and the COVID relief bills that are coming out. There's 0:18:57.880 --> 0:18:59.840 a lot we can do to make sure that we 0:19:00.000 --> 0:19:03.720 are really impacting the communities that need to help UM. 0:19:03.760 --> 0:19:07.240 And I'm encouraged by what the the Biden administration is saying. 0:19:07.320 --> 0:19:09.320 I just need to we just needed to make sure 0:19:09.359 --> 0:19:14.000 they're really following through on their promises. Marvin, If you 0:19:14.000 --> 0:19:19.760 know our listeners want to maybe incorporate equality issues into 0:19:20.040 --> 0:19:21.600 their investing, what's the best way to do it. Is 0:19:21.640 --> 0:19:22.720 it to kind of look at the E s G 0:19:22.920 --> 0:19:26.640 scores and things like that. Yeah, it's been really important 0:19:26.680 --> 0:19:29.560 for us to be able to talk about companies that 0:19:29.600 --> 0:19:32.320 are that are really in our index. And I think 0:19:32.359 --> 0:19:34.760 that as you look at companies not just in terms 0:19:34.840 --> 0:19:36.919 of their returns, but also in terms of what they are, 0:19:36.920 --> 0:19:40.639 how they're engaging in the broaderest society. It's important to 0:19:40.720 --> 0:19:43.400 make sure that the investor community is looking at all 0:19:43.440 --> 0:19:46.199 of this. And I think that you can go to 0:19:46.240 --> 0:19:49.360 our website impact ets dot org and you can look 0:19:49.359 --> 0:19:52.000 at our holdings. But I think an important thing to 0:19:52.000 --> 0:19:54.800 do is to make sure that are these companies are 0:19:54.800 --> 0:19:58.200 not just not just performing well, but they're also doing 0:19:58.200 --> 0:20:00.480 what they what they should do around me. So so issues. 0:20:00.520 --> 0:20:03.960 The truth in the matter is diversity helps with business. 0:20:03.960 --> 0:20:08.440 I think more diverse companies tend to be better, better operators, 0:20:08.480 --> 0:20:11.040 tend to be more profitable, tend to be folks who 0:20:11.080 --> 0:20:14.040 do the right thing in larger ways. So um look 0:20:14.040 --> 0:20:15.600 at our go to our website and you can check 0:20:15.600 --> 0:20:18.960 it out. Marvin, thank you for joining us today. Marvin 0:20:18.960 --> 0:20:22.720 Owen's junior is Chief Engagement Officer Impact Shares, former senior 0:20:22.720 --> 0:20:25.480 director of Economic Development. At the end, double a CP 0:20:28.480 --> 0:20:30.879 green on the screen today and it looks like the 0:20:30.880 --> 0:20:34.560 Reddit traders they've have expanded the scope of their buying, 0:20:34.600 --> 0:20:38.640 moving on from individual equities to commodities such as silver 0:20:38.760 --> 0:20:41.200 that SOB stuff about eight percent today trading just below 0:20:41.240 --> 0:20:43.680 thirty dollars and ounce. Let's get a sense of what's 0:20:43.680 --> 0:20:47.040 going on across markets. We talked to Katie Dreifeld, cross 0:20:47.040 --> 0:20:49.800 asset reporter for Bloomberg News. Joining us on the phone 0:20:50.240 --> 0:20:53.359 from New York Mike McLoone commodity strategist for Bloomberg Intelligence. 0:20:53.359 --> 0:20:56.639 He follows the silver market closely. Katie, give us a 0:20:56.640 --> 0:20:58.119 sense of kind of what you're seeing in the market here. 0:20:58.119 --> 0:21:00.480 I'm looking at some of those Reddit stocks last week, 0:21:00.600 --> 0:21:05.720 some divergent performance there. Yeah, today is an interesting dynamic 0:21:05.720 --> 0:21:08.520 where you have the broad indexes at least up so 0:21:08.600 --> 0:21:11.080 far about an hour into treating. But you're also seeing 0:21:11.119 --> 0:21:14.000 some of those Reddit UH favorites, like you say, they're 0:21:14.119 --> 0:21:17.719 higher to you a MC higher for example, even as 0:21:17.840 --> 0:21:20.240 Game Stop takes a bit of a pause. But if 0:21:20.240 --> 0:21:23.080 you look at what is moving the broader indexes, I 0:21:23.080 --> 0:21:26.760 mean it helps that you have Tesla, Amazon, Apple all 0:21:26.840 --> 0:21:30.840 higher today. That's dragging those benchmarks up and it might 0:21:31.000 --> 0:21:33.520 be helping that if you look at the new short 0:21:33.600 --> 0:21:37.640 interest that's out of UH partners such as S three 0:21:37.680 --> 0:21:41.840 Partners and I h S Market, you you can see 0:21:41.840 --> 0:21:45.280 that short interest on game Stop has actually dropped a bit. 0:21:45.400 --> 0:21:49.400 It's still relatively high. It's about thirty nine percent going 0:21:49.440 --> 0:21:52.399 by I h SS numbers, but that was theorized to 0:21:52.480 --> 0:21:55.439 have created a sort of the gross thing hedge funds 0:21:55.440 --> 0:21:58.520 having to take down risks and bleeding into the broader markets. 0:21:58.600 --> 0:22:02.960 It appears that that may be easing now, Mike, what 0:22:03.240 --> 0:22:05.479 can happen in the silver market. I mean, it's it's 0:22:05.480 --> 0:22:08.199 a bit more complicated, and there are various ways of 0:22:08.200 --> 0:22:11.080 trading it, and also there's various ways of market making 0:22:11.080 --> 0:22:13.200 in it that aren't the same as an individual stock. 0:22:13.880 --> 0:22:16.840 What are these redators getting into and how are they 0:22:16.880 --> 0:22:20.400 playing this particular trade? But hello, Vanni, I'm hearing they're 0:22:20.400 --> 0:22:23.280 buying a lot of calls, most notably out of money calls. 0:22:23.280 --> 0:22:25.679 But if the narrative plays out as Paul and I 0:22:25.720 --> 0:22:27.360 know and from b I a lot of us are 0:22:27.400 --> 0:22:29.840 ex traders. As an ex trader, I will tell them 0:22:29.880 --> 0:22:32.560