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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: dot com, the radio plus mobile app, and on your radio.

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Speaker 1: This is a Bloomberg Business Flash and I'm Karen Moscow.

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Speaker 1: There's updates brought to you by eisener Amper. When entrepreneurs

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Speaker 1: face challenges like choosing a business structure or access to capital,

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Speaker 1: they call the accountants and advisers at eisener Amper connect

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Speaker 1: with them oisener Amper dot com. Slash tech Herban Life

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Speaker 1: down almost fifteen percent this morning after it said it

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Speaker 1: overstated growth of new customers last year because of database errors.

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Speaker 1: US Dock Index futures meanwhile, little change doesn't p EMNI

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Speaker 1: futures down half a point now EMUNI futures that will change.

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Speaker 1: NAZ documity futures up one decks. In Germany's down a

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Speaker 1: tenth of upper cent. Tenure Treasury down five thirty seconds

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Speaker 1: see at one point eight five percent. Nimax scrude oil

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Speaker 1: up a tenth of upper center four cents to thirty

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Speaker 1: four seventy of barrel comacs. Gold is up two tenths percent,

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Speaker 1: or two dollars thirty cents at twelve forty four ten

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Speaker 1: and ounce. The Euro and dollar oh eight eight six

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Speaker 1: c N one thirteen point nine six. That's a Bloomberg

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Speaker 1: business flash. Tom and Mike, thanks so much. Karen greatly

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Speaker 1: appreciate that. Phil Serafino in our Paris office in London

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Speaker 1: are writing up on herban Life. We'll have more on

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Speaker 1: this coming up. It's really shocking headlines this morning on

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Speaker 1: a story Mike and I have tried to avoid, like crazy.

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Speaker 1: There's been a whole soap proper Truett this morning. The

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Speaker 1: soap opera became reality. Herbal Life Overstated two thousand fifteen

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Speaker 1: growth and active new members. Just one of their challenges

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Speaker 1: fifty six was a stock price. Mike enjoying a bit

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Speaker 1: ask of Well, it's trading in early market at sixty

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Speaker 1: so down thirty percent. So you didn't want to be

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Speaker 1: if you. So let's rip up the script and we

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Speaker 1: can do that constructively with Scott. Randy is with Wells Fargo.

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Speaker 1: He and I learning under a someone named Alfred Goldman L.

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Speaker 1: Goldman at A G. Edwards a million years ago. Scott Wren,

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Speaker 1: humility is in order we all know our personal herbal

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Speaker 1: lifes and other things that are out there. It's one

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Speaker 1: of the reasons we diversify. If I just want to

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Speaker 1: buy a group of stocks, what's the best way to diversify. Well,

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Speaker 1: I think that the best way to stay diversified, and

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Speaker 1: the way most of our clients would do that would

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Speaker 1: be to buy the basket. I mean they can buy

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Speaker 1: individual stocks. Our clients hold lots of individual stocks, but

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Speaker 1: certainly if they want to be diversified, you know, ultimately

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Speaker 1: the SMP five hundred, they would want to own that.

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Speaker 1: The drilling down UM. I mentioned industrials, I mentioned the

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Speaker 1: consumer discretionary sector, I mentioned technology. You can buy ets

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Speaker 1: that represent those exact s and p sectors, and you

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Speaker 1: know you can avoid picking the single stock. You can

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Speaker 1: buy the basket and if you feel good about the sector,

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Speaker 1: that's a good way to go. This is an ancient

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Speaker 1: beta question, and the question is do I diversified better

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Speaker 1: within this sector or is it more important to diversive

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Speaker 1: across sectors? Good question? Well, I think that, Um. You know,

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Speaker 1: the time of the way I always look at it

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Speaker 1: is is you know, you don't want to put all

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Speaker 1: your eggs in one basket, and that may mean the

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Speaker 1: cyclical basket as well, So you may not want to

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Speaker 1: just lean against the cyclical sectors that we particularly like.

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Speaker 1: I mean, you have to have something in your back

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Speaker 1: pocket in case you're wrong. In terms of stocks, yeah,

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Speaker 1: you need to own a little health care, You need

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Speaker 1: to own a little staples, more of the defensive types

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Speaker 1: of things, and then asset classes. You know, let's face it,

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Speaker 1: bonds have done, uh what treasuries have done? Well, you

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Speaker 1: need to have some bonds in your portfolio as well.

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Speaker 1: You know, I know Mike wants to jump in here,

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Speaker 1: just one more question. We understand herbal Life is a

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Speaker 1: smaller company. It's in the old phrase, a story stock.

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Speaker 1: I mean I get that. Do I have safety within

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Speaker 1: a diversified multinational or is that a fiction? Well, I

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Speaker 1: think it depends on on what it is. I I

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Speaker 1: like diversified multinationals. I like it better when they're paying

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Speaker 1: a good of an end um. There is some diversification there.

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Speaker 1: There's diversification and exposure to foreign markets, so there is diversification.

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Speaker 1: But once again then you need to, you know, look

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Speaker 1: at the individual stock. I mean, is it uh, you know,

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Speaker 1: is it a is it a food company or is it, uh,

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Speaker 1: you know, an industrial company? And makes it makes a

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Speaker 1: big difference on where you are in the cycle when

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Speaker 1: you're looking at diversification, is there a classification I suppose

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Speaker 1: the word would be at this point that you would

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Speaker 1: look at would you look at size, small, medium, or

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Speaker 1: large cap? Would you look at Uh, you've already mentioned

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Speaker 1: some industrial sectors, but some sectors of the market. But

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Speaker 1: you know, is there's some combination that is more likely

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Speaker 1: to provide you with gains at this point or is

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Speaker 1: it just too hard to tell given all the cross

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Speaker 1: currents we're seeing. Well the way that I look at

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Speaker 1: it in terms of size um when you're late in

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Speaker 1: the cycle, it's a large cap story and I and

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Speaker 1: I normally feel that from now until whenever the cycle

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Speaker 1: comes to an end, it is going to be a

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Speaker 1: large cap story. They have better balance sheets, better access

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Speaker 1: to credit. They're not one trick pony's mitten. Small cap

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Speaker 1: stocks they outperform halfway through the recession into the first

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Speaker 1: half or so of a cyclon, then at the end

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Speaker 1: they tend to fade because they do have fewer products,

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Speaker 1: less international diversification, less access to credit. So this should

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Speaker 1: be a large cap story from here on out through

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Speaker 1: the end of this of the cycle. Scott Ran, thank

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Speaker 1: you so much. With Wells Fargo um this morning looking

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Speaker 1: at the equity markets and uh particularly there's some theory

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Speaker 1: on diversification. Mike, I really want to put in perspective

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Speaker 1: the herbal life move. I think a lot of the

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Speaker 1: media today is going to talk about plunge, crater crash.

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Speaker 1: That's not what's happening. It's down fifty six, down to

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Speaker 1: forty right now, really hasn't found a bid yet. The

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Speaker 1: six month average line is fifty three, the twelve month

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Speaker 1: average line is fifty one eight. Like that, Mike, that

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Speaker 1: was old, so we're beneath that. But plunge really doesn't

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Speaker 1: capture what a real plunge would be, which would be

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Speaker 1: like forty two six dollars below it is right now.

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Speaker 1: So it's down. Is that? Who put it? Well? I

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Speaker 1: think you're right when you call it a story stock.

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Speaker 1: It isn't that biggest stock, but it's got it gained

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Speaker 1: prominence because of bills investment in his charges and said

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Speaker 1: to our executive producer Rachel worrespent as it give me

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Speaker 1: Howard Chillet, then I mean this is about forensic accounting.

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Speaker 1: We don't speculate. We just look at the headlines and

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Speaker 1: report them to you. If I look at first quarter

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Speaker 1: last year earnings adjustment was down tent instead it's down

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Speaker 1: twenty seven. There's no news there where the news is

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Speaker 1: has moved sixty days on Urban Life third quarter active

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Speaker 1: new members without China was is Now that gets my attention.

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Speaker 1: It's that kind of delta that really, uh you goat,

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Speaker 1: there's attention here this morning. Yes, anyway, we'll keep an

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Speaker 1: eye on what happens with them, but without panic or

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Speaker 1: going overboard. Um. A lot of Donald Trump news this

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Speaker 1: morning with well, Governor Romni is gonna come out and

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Speaker 1: attack him today and uh foreign policy experts writing a

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Speaker 1: letter uh saying that he would be a danger to

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Speaker 1: the country. We'll talk politics later today. I think we

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Speaker 1: need to touch on it with Steve Rattner and then

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Speaker 1: Gary Langer poster from Langer Research from New York City,

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