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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: us live on YouTube.

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Speaker 2: Michael Wilson, thank you so much for joining this morning.

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Speaker 2: You called a new bullmarket and you say you have

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Speaker 2: a higher conviction into twenty twenty six. Why, yeah, thanks Tom.

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Speaker 3: I mean we talked about this in our midyear outlook

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Speaker 3: going back to May, which we felt like the April

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Speaker 3: lows would be a durable low for a lot of

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Speaker 3: different reasons. I'll try to go through them in no

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Speaker 3: specific order, but I mean, you know, we've had the

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Speaker 3: view coming into this year that it was going to

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Speaker 3: be a tough first half because earning provisions were coming

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Speaker 3: down pretty sharply for a lot of reasons, most notably

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Speaker 3: the AI CAPEC cycle was decelerating. We still had what

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Speaker 3: I would call a rolling recession in many industries that

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Speaker 3: were struggling, and the revisions were coming down. So what

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Speaker 3: tariffs did was it sort of culminated that that decline

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Speaker 3: into April, and as you know, I mean you've been

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Speaker 3: around the block like me. I mean, market's bottom on

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Speaker 3: bad news, okay, And so that I would have likened

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Speaker 3: the Liberation Day announcement to sort of a natural disaster

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Speaker 3: that basically, you know, capitulated, everybody capitulated. So that revision

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Speaker 3: of revision factors the main driver when I were bullish,

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Speaker 3: we think it's a bull market is the revision factors

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Speaker 3: for earnings are have shot higher. And you've seen our notes, Okay,

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Speaker 3: So like that's that is doesn't happen every year. That

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Speaker 3: is as extreme as we saw coming out of the

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Speaker 3: COVID lows in March of twenty twenty. Okay, it's as

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Speaker 3: extreme as we saw coming out of nine to eleven.

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Speaker 3: It looked like a recession. It walks like a recession,

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Speaker 3: a priced like a recession. So that's it.

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Speaker 2: Okay. This is a really critical question, folks. We all

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Speaker 2: understand the Trump legislation, the Beautiful Bill and all that

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Speaker 2: as some form of stimulus forward at least out one

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Speaker 2: two years, maybe three years. It Morgan standing, Mike Wilson.

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Speaker 2: The key question is the linkage of potential rate cuts

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Speaker 2: to equity enthusiasm. I don't have a straight answer on

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Speaker 2: that yet, can we link Powell, our future chairman, rate

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Speaker 2: cuts into an equity lift?

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Speaker 3: Yeah, well, I think I mean, as usual, the markets

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Speaker 3: get ahead of this, and what the markets are anticipating now,

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Speaker 3: the bond market and the equity markets that the FED

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Speaker 3: will be cutting sometime in the next you know, two

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Speaker 3: to six months. And you know, even our house call,

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Speaker 3: I mean, our house calls for no cuts this year,

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Speaker 3: but then they have seven cuts next year. I mean,

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Speaker 3: that's like wildly bullish for equities. Okay, so you know

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Speaker 3: it's you almost have the perfect setup, Tom, because what

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Speaker 3: you have now is lagging economic data, which is what

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Speaker 3: the FED uses to make decisions, and you have you

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Speaker 3: already had the equity market in our divisions telling you

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Speaker 3: what's going to happen. So you know, they're looking backwards

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Speaker 3: and they're going to be looking at lagging labor data,

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Speaker 3: you know, and then of course lagging inflation data, which

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Speaker 3: should come down ultimately later this year next year, and

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Speaker 3: they're going to cut into that and but the but

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Speaker 3: you know, there's not going to be a knock on

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Speaker 3: negative effect for earning revisions in the way that people

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Speaker 3: kind of assume when you get that sort of decline

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Speaker 3: in labor data. In fact, I would argue because it's

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Speaker 3: gradual that we're going to see revisions go up, because

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Speaker 3: you know, when companies reduce headcount, it actually accrues to margins.

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Speaker 4: Mike, what what is screening well for you? Now? I'm

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Speaker 4: not sure if it's sectors that you guys screened by

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Speaker 4: or different factors that you screen by. How are you

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Speaker 4: looking at this market and maybe where opportunities might be right,

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Speaker 4: So we do both.

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Speaker 3: We look at factor revisions, we look at sector industry revisions,

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Speaker 3: and we look at the stock level too. It works

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Speaker 3: in all those areas, and so we've been rightly positioned,

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Speaker 3: really since April to be overweight financials industrials. Those are

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Speaker 3: the two favorites, and also software to some degree, and

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Speaker 3: those have been the areas where the revisions have been

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Speaker 3: the strongest, and I think that probably could continue. And

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Speaker 3: so at the end of the day, I do think

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Speaker 3: the biggest opportunity going forward is the areas that have

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Speaker 3: not seen those revisions yet. So let's talk about the

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Speaker 3: industries where we've been sort of in this rolling recession.

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Speaker 3: Housing related, okay, commodity related, some of the consumer goods

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Speaker 3: areas which are going to feel the effects of terrors now.

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Speaker 3: So in the very short term, we actually think revision

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Speaker 3: breath could come down a bit as some of these

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Speaker 3: terrorts flow through to cost of good soul. But that's

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Speaker 3: just going to create the next buying opportunity, perhaps in

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Speaker 3: these areas that are lagged, even small casts, because they

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Speaker 3: will love the fact that that's cutting rates at some point.

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Speaker 4: Mike, one of the themes today and really for the

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Speaker 4: last period of time has been concentration risk. In this marketplace,

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Speaker 4: it seems like only a handful of stocks are driving

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Speaker 4: the performance. But I think what we're kind of coming

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Speaker 4: to the conclusion of our at least rationalizing is because

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Speaker 4: that's where the earnest growth is, that's where the free

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Speaker 4: cash flow is. How do you think about that issue?

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Speaker 3: You're exactly right. I mean, the market's not stupid. I mean,

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Speaker 3: like the first of all, what drove the market lower

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Speaker 3: in the first quarter the MAG seven You know why,

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Speaker 3: because the MAG seven range divisions were terrible. In the

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Speaker 3: first quarter, we had an AI camp BAX acceleration. We

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Speaker 3: had questions around whether it's going to generate ROI revenue

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Speaker 3: growth kind of decelerated a bit, so you know, it

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Speaker 3: happened for a reason, but has nothing to do with teriffs, okay.

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Speaker 3: It has everything to do which is the natural evolution

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Speaker 3: of this AI cycle that's going on. So I think,

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Speaker 3: you know, coming out of the April lows, the reason

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Speaker 3: why the MAG seven led is well, hey, they're big

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Speaker 3: and liquid, everybody loves them. But also because they were

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Speaker 3: seeing a rate of change bottom in the revision factors.

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Speaker 3: I'll give you two huge catalysts for that. The weaker dollar, okay,

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Speaker 3: which accrues to the large multinationals, particularly some of the

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Speaker 3: MAGS seven. And the second one was that we saw

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Speaker 3: that you know, U Vidio could no longer sell they

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Speaker 3: could sell, they could no longer sell chips to China,

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Speaker 3: and they took a big write down on inventory. But

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Speaker 3: now they can sell those chips when the inventory is

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Speaker 3: at well. So what does that tell you? Gross margins

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Speaker 3: are going to be basically manufactured for the next year.

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Speaker 3: So there's a lot of reasons, you know, why stocks

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Speaker 3: do what they do. But the main reason we for

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Speaker 3: our whole franchise, as you know, focuses on earnings, not

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Speaker 3: lagging economic data.

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Speaker 2: Mike Wilson with us across your commute this morning across

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Speaker 2: the nation, I should say on YouTube as well in

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Speaker 2: the office and of course at home YouTube subscribe to

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Speaker 2: Bloomberg Podcast growing each and every day. Should I do

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Speaker 2: a shout out right now for Joe Wisenthal, Tracy Alloy

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Speaker 2: killing it number one on Apple?

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Speaker 4: Yesterday's phenomenal had a great write up in the New

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Speaker 4: York Times, so they did double.

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Speaker 2: Days and you know they'll be with us Jackson Hole,

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Speaker 2: So maybe I'll get you know, maybe they're entourage. You'll

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Speaker 2: let me speak to them. We'll have to see Mike

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Speaker 2: Wilson with us. With Morgan Stanley, Mike, how do you

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Speaker 2: use your analysts work? Mister Weiss covers Microsoft just as

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Speaker 2: you know, do you speak to these people or how

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Speaker 2: do you use the securities analysis of Morgan Stanley.

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Speaker 3: Percent We're a micro macro franchise man. I started my

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Speaker 3: career in the stock business, you know, I used to

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Speaker 3: be a TMT specialist as a desk analyst, you know,

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Speaker 3: following bottoms up, and so I obviously know these folks

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Speaker 3: have been here for thirty five years. I know all

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Speaker 3: of them well, I've worked with all of them, and

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Speaker 3: so we every month we hold a call that we

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Speaker 3: basically call it the micro macro matchup, where we basically

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Speaker 3: kind of talk about our views from a macro standpoint.

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Speaker 3: Then we talk to the analysts and say, well, what

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Speaker 3: are you guys hearing? What are you doing? You know

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Speaker 3: how you how are your numbers may be adjusting, and

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Speaker 3: that informs us just like our analysis does from a

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Speaker 3: top down perspective. So the marring of the micro macro,

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Speaker 3: I think keeps us a step ahead of most people.

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Speaker 3: People can criticize us for various things, but they can't

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Speaker 3: criticize us for I think we have done a better

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Speaker 3: job of most of being in the right places within

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Speaker 3: the equity market because of that micro macro marriage.

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Speaker 2: So so delv here now in to say, I see

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Speaker 2: MIT Sloan, I see Caltech, this whole cottage industry, including

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Speaker 2: the University of Michigan and Arburg doing AI? Learn about AI?

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Speaker 2: Morgan Stanley, what is the next three months, six months?

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Speaker 2: Zeitgeist on AI? The momentum of it? Yeah?

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Speaker 3: Well, here again we have a pretty I have an

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Speaker 3: advantage because we have some analysts who are not only

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Speaker 3: you know, very good in this space, and they have

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Speaker 3: long tenure, like a lot of our tech analysts have

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Speaker 3: been in the seat for ten to twenty years as

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Speaker 3: we have continuity there, but the zeitgeist here is essentially

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Speaker 3: now into the adoption phase. We've written a lot about this,

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Speaker 3: which is that you know these tech cycles, you know,

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Speaker 3: there's there's basically an enabler phase where you have a

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Speaker 3: build out and the enablers benefit from that build out,

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Speaker 3: and then the technology gets adopted by the early adopters.

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Speaker 3: We're seeing that mainly by the hyperscalers quite frankly, because

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Speaker 3: they're very fast with the big data sets. And then

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Speaker 3: ultimately what we think is going to happen to the

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Speaker 3: application layers being built now that will then be basically

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Speaker 3: diffused out into the broader economy. And so that's where

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Speaker 3: it gets really exciting. That's sort of the you know

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Speaker 3: the Internet. When the Internet got exciting is when it

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Speaker 3: starts to make everyday businesses more productive. So we have screens,

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Speaker 3: we have lists, we've been publishing on this for.

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Speaker 2: Quite a while.

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Speaker 3: Those AI adopter stocks are massively outperforming, they have been.

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Speaker 3: The market knows this. I think we've been ahead of

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Speaker 3: that curve, and that's what we're saying, that's what we're

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Speaker 3: looking for for the next twelve months is that this

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Speaker 3: is where we're going to start to finally see some

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Speaker 3: of the productivity benefits diffused across the broader economy. It

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Speaker 3: won't be a straight line. There'll be doubts and fears

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Speaker 3: and uncertainty, but it's a very positive story for the

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Speaker 3: twenty twenty six earning story. And this is why stocks

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Speaker 3: are not as expensive as people think, because you know,

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Speaker 3: the market figured this out just.

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Speaker 2: Like we did.

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Speaker 3: I mean, you know, if we can figure it out, definitely,

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Speaker 3: the market figured it out that we're going to see

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Speaker 3: positive revisions lead to better earnings growth next year. Okay,

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Speaker 3: and I think you know the economic data is backward

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Speaker 3: looking and it just doesn't tell that.

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Speaker 2: Stor denominator Paul comes up. Yeah, that's the whole thing. Yeah,

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Speaker 2: it's amazing, Hey, Mike.

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Speaker 4: In your research note, you're right, since the loads in April,

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Speaker 4: the rally in stocks has been relentless.

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Speaker 2: With no tradable pullbacks.

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Speaker 4: What creates a pause and a bull market where you

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Speaker 4: can maybe catch up a little bit.

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Speaker 3: Well, we try to lay that out in our note

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Speaker 3: this week.

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Speaker 2: Right, it's just.

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Speaker 3: Because we want to be well balanced here, but I

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Speaker 3: want to go back and you know, that comment about

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Speaker 3: the market being relentless and straight up in no pullbacks,

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Speaker 3: that are those are the characteristics of a new ball market.

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Speaker 3: That's what happens, and that's what looks like. This looks

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Speaker 3: exactly like April, May, June, July twenty twenty. In fact,

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Speaker 3: it's following a similar pattern. So I think that the

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Speaker 3: things that could get us a consolidation in the third quarter,

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Speaker 3: which we did start writing about, you know, a couple

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Speaker 3: of weeks ago, we said there's going to be a pullback,

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Speaker 3: it's going to be during a third quarter. We do

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Speaker 3: want to win, but we do think there's three or

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Speaker 3: four potential drivers. And at number one, revision factors could

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Speaker 3: come down as the terror start to flow through, the

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Speaker 3: cost of good soul, right, the more expensive inventory starts

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Speaker 3: to flow through, and some companies will have margin pressure

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Speaker 3: with that, or there'll be some demand destruction. That's one.

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Speaker 3: I think. Number two is we know there's a trendspmens

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Speaker 3: supply coming on the treasury issue inside, maybe the term

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Speaker 3: premium kind of pushes out again and we get a

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Speaker 3: backup in long rates. You know, the market now is

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Speaker 3: negatively correlated to rate at this point, So that's another

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Speaker 3: potential driver. And I think the one that is not

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Speaker 3: so obvious but has been a big driver of the

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Speaker 3: bull market in the New Bowl market is the dollar weakness.

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Speaker 3: So dollar weakness has not only translated to better earnings

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Speaker 3: growth for the multinationals, it's also added an incredible amount

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Speaker 3: of liquidity to the tune of about eight trillion US

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Speaker 3: dollars to global money supply. So if the dollar would

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Speaker 3: strengthen here five six seventy eight percent, that could lead

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Speaker 3: to a liquidity drain of some kind and a.

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Speaker 2: Pullback of interesting fast I should point out mister Wilson

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Speaker 2: talks about the lift off of twenty twenty that was

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Speaker 2: precisely one hundred percent in twenty two months out to

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Speaker 2: the end of twenty twenty one. Was the first leg

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Speaker 2: of that lift. Absolutely extraordinary, Mike Wilson. I got to

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Speaker 2: go to one of the dogs. I noticed it on

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Speaker 2: the WEI screen today. Health, I mean, is it health

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Speaker 2: of value trap? How does Morgan Stanley consider purchase of

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Speaker 2: health equity?

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Speaker 3: Well, it has been one of the worst performing consistently sectors.

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Speaker 3: Even when the market was somewhat defensive in the first quarter,

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Speaker 3: it didn't really do its job. And I think we

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Speaker 3: could attribute this to a couple of different things. I

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Speaker 3: would say, most notably, we have a new obviously head

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Speaker 3: of the HHS, Robert Kennedy Junior, who you know, has

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Speaker 3: been I would say quiet so far on what his

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Speaker 3: main initiatives are going to be. And I think there's

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Speaker 3: just sort of sort of some fear there that maybe

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Speaker 3: it's going to be draconian and in terms of like

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Speaker 3: for farmer companies and some of the some of the

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Speaker 3: device some of the device companies and even the insurance companies.

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Speaker 3: And I think, you know, it could be this simple

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Speaker 3: time is that once once RFK Junior and the HHS

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Speaker 3: roll out what they're going to do, I think they've

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Speaker 3: they've said September they're going to be done with some

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Speaker 3: of their studies, it could just be a sigh of relief.

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Speaker 3: Maybe that's the catalyst here, But I mean, we're not

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Speaker 3: going to probably upgrade the group until we see at

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Speaker 3: least a bottoming out of relative range breath. We're just

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Speaker 3: not seeing that, and so there's no need to go there.

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Speaker 3: There's other things to do.

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Speaker 2: Paul, I get good news, I'll check the schedule. Duke

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Speaker 2: does not have privileged to lose to Michigan this year

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Speaker 2: in football. It's a constructive first step well for Duke

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Speaker 2: Mike Wilson, thank you so much. With Morgan Stanley.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 1: weekday afternoons from seven to ten am Eastern Listen on

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Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or

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Speaker 1: watch US live on YouTube.

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Speaker 2: And Stishamorosa with the Snow with Partners Group David Layton

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Speaker 2: and running the charge their Partners Group of course doing

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Speaker 2: a lot, particularly more out West in Switzerland as well.

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Speaker 2: You're still based in New York, right, Yeah, Partners has

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Speaker 2: a huge international perspective.

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Speaker 5: That's right.

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Speaker 6: We're global private markets firm. I've been around since nineteen

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Speaker 6: ninety six. Zooke is the headquarters. Denver's the US Zuke

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Speaker 6: that's how you pronounce it, zuk, Yes, outside of Zurich

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Speaker 6: and also in Denver as well, but also a really

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Speaker 6: big price and it's in New York as very could.

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Speaker 2: Thrilled to have you back with this level of MROs

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Speaker 2: of courage to stay in the market at different points.

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Speaker 2: Is you feel that way right now where people there's

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Speaker 2: so much geopolitical nervousness and all, and you're just saying,

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Speaker 2: fight the good fight and stay in the market.

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Speaker 6: Well, you know, Tom, one of the probably the best

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Speaker 6: perspectives I've gotten, you know, through kind of my investment tenures,

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Speaker 6: thinking about themes and think about the megatredza really change

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Speaker 6: and shape the world figures to come. And if you

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Speaker 6: align yourself with those and if you focus on what

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Speaker 6: actually drives earnings or what drives profitability, it's focusing on

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Speaker 6: things like artificial intelligence or digital transformation, or healthcare innovation

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Speaker 6: or you know, new ways of living. So that's what

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Speaker 6: sort of gives you the courage to stay through the

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Speaker 6: next rate cut or rate hike or not, or through

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Speaker 6: the next inflation report if you invest in the right

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Speaker 6: kinds of companies in order to benefit from that innovation

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Speaker 6: over time.

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Speaker 4: One of the big themes that we've i guess become

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Speaker 4: more accustoms over the last six months twelve months has

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Speaker 4: been maybe this onshoing, reassuring, this reduced sense of internationalism.

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Speaker 4: And for a company like yours that it is a

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Speaker 4: global company in Zurich and in the US and all

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Speaker 4: over the world, how do you guys think about the

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Speaker 4: fact that this may be a less global economy than

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Speaker 4: it was one, two, three, five years ago.

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Speaker 6: You know, I don't know if that is a completely

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Speaker 6: right assumption to make that this is a less global economy.

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Speaker 6: I don't think the objective is really to sever all

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Speaker 6: trade ties. I think the objective is really to rethink

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Speaker 6: the trade going forward and also to sort of set

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Speaker 6: out new rules of how the trade is going to

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Speaker 6: be done. So, if that's the base case scenario, as investors,

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Speaker 6: we have to think about how to corporations, how to consumers,

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Speaker 6: how do we want to adjust to that? And you know,

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Speaker 6: speaking of adjustment, this is why I call this a

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Speaker 6: quarter of adjustment. This is the time where companies are

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Speaker 6: going to decide whether they're going to pass through the

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Speaker 6: tariff cost to the consumer. Where they going to do?

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Speaker 2: What do you see there? What's your update?

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Speaker 6: We see a combination. I think the vast majority of companies,

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Speaker 6: about seventy five percent of companies are saying that they're

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Speaker 6: going to pass through the cost of the consumer. Maybe

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Speaker 6: only twenty five percent of those say it's one hundred

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Speaker 6: percent of the pass through. Some of it will be

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Speaker 6: absorbed by the profit margin, which is near a record.

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Speaker 2: Anna stj Morosa with this partners Group, and again thank

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Speaker 2: you for joining us on You're commute this morning across

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Speaker 2: the nation in the office at home in Zoos, Switzerland.

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Speaker 2: YouTube is the way our new distribution has subscribed to

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Speaker 2: Bloomberg Podcasts. We protect the copyright of all of our research.

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Speaker 2: They email and send us am Anastage's note no get

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Speaker 2: it from partners Group. I love how you say this

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Speaker 2: focus on what you can control. Describe that for equity

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Speaker 2: market investments right right now.

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Speaker 6: Well, the first thing you can control is the kinds

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Speaker 6: of companies you invest in, and what are the profit margins,

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Speaker 6: What is the starting point for those profit margins, and

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Speaker 6: what is the endpoint what you're trying to achieve. So

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Speaker 6: one thing we can control is actually growing that profitability

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Speaker 6: and growing the profit margin. You know, it's driving operational efficiencies,

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Speaker 6: it's perhaps infusing AI, machine learning and other productivity tools

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Speaker 6: to grow those margins. It's building platforms rather than you know,

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Speaker 6: let's say one product business. So that's one thing you

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Speaker 6: can control. You know. The other thing you can control

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Speaker 6: is you can pivot into the sectors where you do

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Speaker 6: naturally have faster earning growth because it is not a

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Speaker 6: company that's aligned with the old economy, but it's a

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Speaker 6: company that's aligned with a new economy. So that's why

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Speaker 6: we do look to things like data centers. That's why

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Speaker 6: we do look to the build out of the energy

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Speaker 6: production as well. So those are the things you can control.

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Speaker 6: You can control leverage, how much do you use, and

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Speaker 6: how do you know pull that lever based on what

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Speaker 6: interest rates are. So those are some of the main.

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Speaker 4: Things outside of tech, which is obviously driving this market.

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Speaker 4: Are there areas outside of technology that you guys find interesting?

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Speaker 6: Yes, you know, I think one of the misnomers in

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Speaker 6: the markets right now is that just because there's not

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Speaker 6: a big focus on sustainability from the current US administration,

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Speaker 6: and this is not a theme that's going to be there.

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Speaker 6: And you know, I very much think that sustainability is

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Speaker 6: a theme that's going to is here to stay because

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Speaker 6: it's really about how can we be the most efficient

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Speaker 6: with our natural resources, minimize the damage to the environment,

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Speaker 6: also make sure everybody has access to basics, which basic

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Speaker 6: since today days and age means a data center, power

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Speaker 6: by some sort of electricity production. So this, let me

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Speaker 6: interrupt this morning.

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Speaker 2: Apollo Funds comes out and says we're buying data centers

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Speaker 2: and they're buying stream data centers. Yeah, this is Joseph

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Speaker 2: Jackson and Trevor Mills that Apollo Partners, and that's exactly it.

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Speaker 2: Where private markets are coming in, that's right to finance

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Speaker 2: these this huge capital investment. Right.

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Speaker 6: Well, it's a great point, and here's the reality. Everybody's

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Speaker 6: been talking about data center for a while, and yet

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Speaker 6: if you look at the occupancy rates for data centers,

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Speaker 6: they are near record highs and we still think that

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Speaker 6: sort of the peak occupancy of data centers is still

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Speaker 6: a few quarters away. So that means for the time

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Speaker 6: being you still need to build out additional capacity and

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Speaker 6: supply demand for data centers is still going to be

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Speaker 6: tied for a period of time, so that that gives

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Speaker 6: you the ability to control the price and also the

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Speaker 6: investment has to continue as well. And by the way,

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Speaker 6: just another point to add on that, you know, just

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Speaker 6: real quick, data centers are thought right now for you know,

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Speaker 6: to be used for cloud and also training AI models.

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Speaker 6: But you know, Tom, the next phase of this of

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Speaker 6: data center growth is really the infront stage of it

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Speaker 6: and applying those train models into another use case.

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Speaker 4: Talk to us about valuation in this market. It's tough

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Speaker 4: here because it if you just kind of look at

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Speaker 4: the S and P of five hundred, it's expensive. But

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Speaker 4: if you make start making adjustments for some of these

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Speaker 4: technology companies, the mag seven of the world, maybe you

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Speaker 4: can make a case it's not that expensive. How do

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Speaker 4: you guys think about that.

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Speaker 6: I mean, it's true that Max seven versus the rest

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Speaker 6: is a very different scenario. But I will say that

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Speaker 6: even the cyclical sectors. For example, I looked at industrials

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Speaker 6: the other day, and even industrials then discount to the

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Speaker 6: S and P five hundred or for a machinery that

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Speaker 6: was actually the case, the discount has narrowed. So I think,

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Speaker 6: you know, broadly speaking, valuations in public markets have got

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Speaker 6: a long way in a short period of time. Having

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Speaker 6: said that, in private markets, that's where we are still

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Speaker 6: finding cheaper valuations. And if I look at the s

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Speaker 6: and P five hundred EV to Ibada, we're probably close

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Speaker 6: to seventeen seventeen and a half times. If I look

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Speaker 6: at private markets, we're about twelve point two times for

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Speaker 6: US EV to Ebadi in private markets. So that's why

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Speaker 6: we're obviously quite focused on scapture evaluation in private mark.

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Speaker 2: Just may be delicate. I don't want you putting in

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Speaker 2: jail and zoo Switzerland. But okay, but there's a lockup

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Speaker 2: to private markets are you seeing? I mean there's an

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Speaker 2: article in Carlisle this morning where they're jettising finally a

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Speaker 2: lot of properties in the buoyancy that we're in right now.

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Speaker 2: But do you see liquidity within private markets? It makes

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Speaker 2: up the liquidity penalty going from ev to ebit up.

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Speaker 6: To down right Well, liquidity is a big concern I

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Speaker 6: think one in private markets investing, and I think one

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00:21:25,480 --> 00:21:28,080
Speaker 6: of the things that Partners Group has done for a

435
00:21:28,119 --> 00:21:30,760
Speaker 6: long period of time is managed that liquidity for clients

436
00:21:30,800 --> 00:21:33,280
Speaker 6: in an evergreen solution. And what I mean by that,

437
00:21:33,760 --> 00:21:36,399
Speaker 6: and what I mean by that is clients have the

438
00:21:36,440 --> 00:21:40,240
Speaker 6: ability for quarterly liquidity if they need to. And the

439
00:21:40,400 --> 00:21:42,960
Speaker 6: reason we're able to do that is because not only

440
00:21:42,960 --> 00:21:46,080
Speaker 6: do we focus on direct control investments, but also secondary

441
00:21:46,200 --> 00:21:50,720
Speaker 6: co invests and that really you know, having managed this

442
00:21:50,840 --> 00:21:56,560
Speaker 6: for about sixteen years, it's been multiple cycles and liquidity

443
00:21:56,600 --> 00:21:57,600
Speaker 6: has been there for clients.

444
00:21:57,600 --> 00:22:02,800
Speaker 2: Can I do it? Audible? Mentioned evergreen solution? Do you

445
00:22:02,880 --> 00:22:05,399
Speaker 2: have a real Christmas tree or a fake Christmas tree.

446
00:22:05,640 --> 00:22:06,600
Speaker 6: I always get a real one.

447
00:22:07,440 --> 00:22:11,399
Speaker 2: Yeah, the biggest, the right answer, the biggest argument. Me

448
00:22:11,480 --> 00:22:13,879
Speaker 2: and John farrellhead I go over to Pharaohs. He's got

449
00:22:13,920 --> 00:22:16,920
Speaker 2: the fake Christmas tree with the light things filling around

450
00:22:16,960 --> 00:22:19,800
Speaker 2: at the bottom. I'm like, John, it's an American. You

451
00:22:19,920 --> 00:22:23,159
Speaker 2: gotta have a real tree. Okay. So that's that's our

452
00:22:23,200 --> 00:22:26,520
Speaker 2: evergreen solution here, Paul continue, I got way laid there.

453
00:22:26,760 --> 00:22:28,800
Speaker 4: Private credit it's been such a big part of the

454
00:22:28,960 --> 00:22:33,240
Speaker 4: alternative investment theme over the last certainly last fifteen years,

455
00:22:33,240 --> 00:22:35,320
Speaker 4: I guess since a financial crisis when it really got big.

456
00:22:35,320 --> 00:22:38,160
Speaker 4: How do you guys think about private credit alongside your

457
00:22:38,200 --> 00:22:39,639
Speaker 4: private equity and your other businesses.

458
00:22:39,720 --> 00:22:43,080
Speaker 6: Sure, it's a really important part of the solutions suite.

459
00:22:43,160 --> 00:22:45,080
Speaker 6: And you know, look, if you think about a bank

460
00:22:45,119 --> 00:22:48,480
Speaker 6: share of private credit of lending, it has stepped down

461
00:22:48,480 --> 00:22:51,200
Speaker 6: from about seventy four percent back twenty some years ago

462
00:22:51,320 --> 00:22:54,159
Speaker 6: to about twenty five percent depending on the quarter. And

463
00:22:54,200 --> 00:22:57,320
Speaker 6: it's been the private credit providers that have stepped in

464
00:22:57,359 --> 00:23:00,840
Speaker 6: and provided the liquidity and plugged in that gap. So

465
00:23:00,880 --> 00:23:02,960
Speaker 6: now about seventy five percent of the market is actually

466
00:23:03,080 --> 00:23:07,920
Speaker 6: driven by private credit. So look from a market perspective.

467
00:23:08,119 --> 00:23:09,960
Speaker 6: You know, whether we get a rate cut or not

468
00:23:10,040 --> 00:23:13,320
Speaker 6: from the FED, I will say the excess spread that

469
00:23:13,400 --> 00:23:17,040
Speaker 6: you get from in direct lending, for example, of on

470
00:23:17,119 --> 00:23:20,679
Speaker 6: average about five hundred basis points is quite attractive, you know,

471
00:23:20,800 --> 00:23:24,440
Speaker 6: especially rates keep heading lower private credit screen as well.

472
00:23:24,520 --> 00:23:26,520
Speaker 2: In the time left, I got to get some SPX

473
00:23:27,400 --> 00:23:30,399
Speaker 2: vision from you. How far up forward are you in

474
00:23:30,480 --> 00:23:33,720
Speaker 2: the stock market? How do you frame six end of

475
00:23:33,720 --> 00:23:35,920
Speaker 2: the year or even twelve months forward right now?

476
00:23:35,960 --> 00:23:39,040
Speaker 6: Look, I think we're in for a consolidation quarter this quarter,

477
00:23:39,080 --> 00:23:42,040
Speaker 6: at least until September seventeenth, which is of course the

478
00:23:42,160 --> 00:23:45,080
Speaker 6: FOMC decision. And I say that because we're going to

479
00:23:45,119 --> 00:23:49,240
Speaker 6: hear a lot about the tariff impacts on net profit margins,

480
00:23:49,320 --> 00:23:51,159
Speaker 6: and maybe some of that is going to be offset

481
00:23:51,200 --> 00:23:53,280
Speaker 6: by well, the label market is weak, therefore the FED

482
00:23:53,320 --> 00:23:55,840
Speaker 6: is going to cut, So I expect choppiness. But as

483
00:23:55,840 --> 00:23:59,520
Speaker 6: I think about the fourth quarter and into twenty twenty six, Tom,

484
00:23:59,560 --> 00:24:02,000
Speaker 6: I think, so what doesn't get talked about enough is

485
00:24:02,000 --> 00:24:04,760
Speaker 6: that we did pass a tax built that's quite favorable

486
00:24:04,800 --> 00:24:07,760
Speaker 6: for the consumer, but it's also quite favorable for businesses

487
00:24:07,800 --> 00:24:09,920
Speaker 6: as well. So whether it's one hundred percent R and

488
00:24:10,000 --> 00:24:12,919
Speaker 6: D expensing that has now been made permanent, or one

489
00:24:13,000 --> 00:24:15,600
Speaker 6: hundred percent depreciation that has also been made.

490
00:24:15,880 --> 00:24:20,480
Speaker 2: This is underplayed. Yeah, stimulus, the stimulus impact, you know,

491
00:24:20,520 --> 00:24:24,000
Speaker 2: the cynics would say it's clearly around Republican re election

492
00:24:24,119 --> 00:24:26,960
Speaker 2: twenty six and the president to twenty eight. But the

493
00:24:27,000 --> 00:24:30,080
Speaker 2: answer that the stimulus we're living right now is tangible.

494
00:24:30,280 --> 00:24:32,800
Speaker 6: It is tangible into twenty twenty six. We're not going

495
00:24:32,880 --> 00:24:35,400
Speaker 6: to see much of it this year, but into twenty

496
00:24:35,400 --> 00:24:37,280
Speaker 6: twenty six. And Tom, you know how the markets work,

497
00:24:37,320 --> 00:24:39,240
Speaker 6: They look forward, So I think that'll be an important

498
00:24:39,240 --> 00:24:40,359
Speaker 6: story in the fourth quarter.

499
00:24:41,000 --> 00:24:43,159
Speaker 2: So, but it's still not out of the triple leverage

500
00:24:43,200 --> 00:24:46,440
Speaker 2: all cash. I know how the markets work exactly one marvel.

501
00:24:46,640 --> 00:24:50,360
Speaker 4: So, Anastasia, how's your how's your job get to change?

502
00:24:50,400 --> 00:24:52,440
Speaker 4: Do you think if at all being part of the

503
00:24:52,480 --> 00:24:55,600
Speaker 4: Partners Group now, which is such a large alternative asset

504
00:24:55,600 --> 00:24:56,520
Speaker 4: manager globally with.

505
00:24:56,600 --> 00:24:59,600
Speaker 6: The other right, Well, it's certainly a privilege to be

506
00:24:59,600 --> 00:25:03,200
Speaker 6: a Partner group, and the role is really to help

507
00:25:03,240 --> 00:25:06,959
Speaker 6: our clients think about how does the macro how are

508
00:25:06,960 --> 00:25:10,720
Speaker 6: the macro forces impact your investment portfolio, specifically from the

509
00:25:10,720 --> 00:25:13,520
Speaker 6: standpoint of allocating to private markets. So what is this

510
00:25:13,600 --> 00:25:18,200
Speaker 6: combination of inflation to rates, to growth to tariffs mean

511
00:25:18,240 --> 00:25:20,560
Speaker 6: for investing in private equity? Where do we find some

512
00:25:20,600 --> 00:25:23,920
Speaker 6: of the best opportunities within directs or secondaries? What does

513
00:25:23,920 --> 00:25:28,359
Speaker 6: this mean for private credit, real estate, royalties, investment and more?

514
00:25:28,800 --> 00:25:31,280
Speaker 6: And you know, the other big conversation is that I

515
00:25:31,320 --> 00:25:35,760
Speaker 6: think a lot of clients understand and want to allocate

516
00:25:35,800 --> 00:25:37,840
Speaker 6: to private markets, but for a lot it's still a

517
00:25:37,840 --> 00:25:42,040
Speaker 6: consideration of how and how much. So helping advise clients

518
00:25:42,080 --> 00:25:45,159
Speaker 6: on the portfolio construct to private markets is an important

519
00:25:45,160 --> 00:25:46,280
Speaker 6: one as well as as.

520
00:25:46,200 --> 00:25:50,560
Speaker 2: You think, is someone at your Optimism American Economic Experiments

521
00:25:50,600 --> 00:25:53,399
Speaker 2: and ross with the Partners Group.

522
00:25:53,640 --> 00:25:57,560
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

523
00:25:57,600 --> 00:26:00,920
Speaker 1: starting at seven am Eastern on Applecarpe and Android Atto

524
00:26:01,000 --> 00:26:03,960
Speaker 1: with the Bloomberg Business App. You can also listen live

525
00:26:04,040 --> 00:26:07,639
Speaker 1: on Amazon Alexa from our flagship New York station, Just

526
00:26:07,680 --> 00:26:10,200
Speaker 1: say Alexa play Bloomberg eleven thirty.

527
00:26:10,560 --> 00:26:13,880
Speaker 2: Stephenoff joins down cio equities at Federator or Medicine. They've

528
00:26:13,880 --> 00:26:17,360
Speaker 2: got different approaches there, but all you need to know

529
00:26:17,480 --> 00:26:20,640
Speaker 2: is looking at the Federated Growth Fund. It's under the

530
00:26:20,640 --> 00:26:24,160
Speaker 2: the othean umbrella, as we call it. I mean it's

531
00:26:24,280 --> 00:26:28,760
Speaker 2: it's sort of doing okay. Three year ninety fifth percentile,

532
00:26:29,119 --> 00:26:33,040
Speaker 2: five year ninety ninth percentile. They're off the market today,

533
00:26:33,160 --> 00:26:35,879
Speaker 2: not too bad. And this is all the growth juggernaut,

534
00:26:35,920 --> 00:26:39,520
Speaker 2: and this is what Steve aut has acclaimed for worldwide.

535
00:26:39,720 --> 00:26:45,720
Speaker 2: I want you to explain, in this unique year, how

536
00:26:45,800 --> 00:26:51,760
Speaker 2: you approach equity investment knowing, like baseball twenty five or

537
00:26:51,760 --> 00:26:54,120
Speaker 2: twenty six or twenty eight percent of the stocks will

538
00:26:54,160 --> 00:26:58,440
Speaker 2: go up and the rest don't forget the what stock

539
00:26:58,520 --> 00:27:02,840
Speaker 2: to pick? How do you choose not to own a

540
00:27:02,920 --> 00:27:04,719
Speaker 2: stock in the S and P five hundred?

541
00:27:05,960 --> 00:27:09,200
Speaker 5: Well, I think it's our time horizon. That's a little different, right.

542
00:27:09,280 --> 00:27:15,840
Speaker 5: The most traders today are focused on day to day movements.

543
00:27:16,040 --> 00:27:19,240
Speaker 5: We're too big to even think about it that way anyway,

544
00:27:19,320 --> 00:27:22,080
Speaker 5: But I think it's not really the path to success

545
00:27:22,200 --> 00:27:24,639
Speaker 5: in the investment markets. We tend to look at a

546
00:27:24,640 --> 00:27:28,119
Speaker 5: longer term horizon, and that leads us to look through

547
00:27:28,240 --> 00:27:30,440
Speaker 5: some of the noise. What's interesting to me. I think

548
00:27:30,480 --> 00:27:33,520
Speaker 5: one reason we're having a pretty decent year here and

549
00:27:33,600 --> 00:27:36,520
Speaker 5: we did last year is the news cycle has really

550
00:27:36,600 --> 00:27:40,400
Speaker 5: shortened up, and so the folks chasing around the news

551
00:27:40,440 --> 00:27:44,040
Speaker 5: cycle are like chickens with their heads cut off, getting

552
00:27:44,080 --> 00:27:46,800
Speaker 5: whipsawed left and right. I mean, if you were following

553
00:27:46,800 --> 00:27:48,800
Speaker 5: the news cycle in April.

554
00:27:49,760 --> 00:27:51,720
Speaker 2: You went to cats. Is that what hedge funds do?

555
00:27:54,119 --> 00:27:55,120
Speaker 2: I don't want to speak to the.

556
00:27:55,040 --> 00:27:58,800
Speaker 5: Hedge funds broadly, but certainly that's one of the ways

557
00:27:58,800 --> 00:28:00,000
Speaker 5: they try to make money.

558
00:28:00,000 --> 00:28:01,480
Speaker 2: We have a lot of folks doing it.

559
00:28:01,600 --> 00:28:03,159
Speaker 5: Some of them do a good job at it, so

560
00:28:03,200 --> 00:28:06,240
Speaker 5: I'm not knocking the hedgehuns, but we tend to look

561
00:28:06,400 --> 00:28:10,080
Speaker 5: longer term and right now. That's helped us a lot

562
00:28:10,200 --> 00:28:14,960
Speaker 5: because one reason we were more optimistic in the spring

563
00:28:15,200 --> 00:28:18,399
Speaker 5: was to us, the gap between the soft data and

564
00:28:18,440 --> 00:28:21,399
Speaker 5: the hard data was pointing to you know, we are

565
00:28:21,400 --> 00:28:23,560
Speaker 5: in a little bit of a slowdown here, but we

566
00:28:23,640 --> 00:28:27,240
Speaker 5: thought coming through it, things would get better. And once

567
00:28:27,280 --> 00:28:30,600
Speaker 5: we got this uncertainty behind us this summer and here

568
00:28:30,640 --> 00:28:34,000
Speaker 5: we are right on schedule, you get a kind of

569
00:28:34,320 --> 00:28:37,960
Speaker 5: bounce effect just from the uncertainty lifting. Not to mention

570
00:28:38,960 --> 00:28:43,080
Speaker 5: you know, the the incentives to further investment through the

571
00:28:44,080 --> 00:28:47,880
Speaker 5: tax cut, You've got the deregulation thing coming through, and

572
00:28:48,520 --> 00:28:53,040
Speaker 5: you know, fortunately the Fed is looking backward, so they're

573
00:28:53,080 --> 00:28:53,800
Speaker 5: going to be cutting.

574
00:28:54,720 --> 00:28:58,400
Speaker 2: Well, we got to remind ourselves. One, you're trailing Nastack

575
00:28:58,520 --> 00:29:02,160
Speaker 2: up twenty eight percent, SMP five hundred and twenty percent,

576
00:29:02,640 --> 00:29:06,040
Speaker 2: now up thirteen percent. How many of our listeners and viewers,

577
00:29:06,320 --> 00:29:11,640
Speaker 2: including me, right understand looking back twelve months we got

578
00:29:11,640 --> 00:29:15,080
Speaker 2: a double digit to zero. Yep, that's amazing, exactly.

579
00:29:14,880 --> 00:29:17,760
Speaker 5: Right, and often, by the way, that's a precursor of

580
00:29:17,800 --> 00:29:21,000
Speaker 5: a pretty decent next twelve months if.

581
00:29:20,920 --> 00:29:24,120
Speaker 4: You look at the data, so Steve, one of the

582
00:29:24,120 --> 00:29:26,720
Speaker 4: concerns in particularly in the equity markets is a concentration

583
00:29:26,880 --> 00:29:29,120
Speaker 4: risk here. We've got it in the mag seven or

584
00:29:29,120 --> 00:29:31,600
Speaker 4: whatever you want to call it. So much of the performance,

585
00:29:31,680 --> 00:29:35,280
Speaker 4: so much of the valuation, is concentrated in a handful

586
00:29:35,320 --> 00:29:38,360
Speaker 4: of names, and people like Torston, slock Over Topollo just

587
00:29:38,440 --> 00:29:40,600
Speaker 4: kind of call out, well, we haven't seen that very

588
00:29:40,640 --> 00:29:42,280
Speaker 4: often in the past, and when we did see it

589
00:29:42,960 --> 00:29:45,640
Speaker 4: late nineties, it wasn't a good thing, do you guys.

590
00:29:45,720 --> 00:29:47,440
Speaker 5: Late nineties was a completely different thing.

591
00:29:47,480 --> 00:29:47,600
Speaker 2: Though.

592
00:29:47,600 --> 00:29:49,400
Speaker 5: If you look at the share of the top ten

593
00:29:50,120 --> 00:29:52,160
Speaker 5: versus the share of earnings of the top ten on

594
00:29:52,240 --> 00:29:54,720
Speaker 5: market gap, it's a flip flop of the late nineties, right,

595
00:29:54,800 --> 00:29:58,080
Speaker 5: late nineties, we didn't have any earnings. These top seven

596
00:29:58,160 --> 00:30:02,640
Speaker 5: companies are terrific companies with enormous free cash flow that

597
00:30:02,760 --> 00:30:06,440
Speaker 5: we think are reasonably valued, and within them even there,

598
00:30:06,800 --> 00:30:09,080
Speaker 5: what we're calling for is, as you think, you know,

599
00:30:09,320 --> 00:30:13,200
Speaker 5: is a rotation into the broader market. Okay, and that's

600
00:30:13,240 --> 00:30:15,520
Speaker 5: going to help our stockbreckers, by the way, but you

601
00:30:15,560 --> 00:30:20,160
Speaker 5: know that rotation has been slowed down by concerns that

602
00:30:20,240 --> 00:30:22,560
Speaker 5: the world was going to end with all the tarret

603
00:30:22,640 --> 00:30:25,480
Speaker 5: stuff and everything else. Now that it's not ending, I

604
00:30:25,520 --> 00:30:28,360
Speaker 5: think those stocks are going to start and that's what's happening.

605
00:30:28,400 --> 00:30:32,200
Speaker 5: We're already seeing the market broadening out here that the

606
00:30:32,280 --> 00:30:35,240
Speaker 5: mag seven have had a good run. We like within

607
00:30:35,320 --> 00:30:38,680
Speaker 5: that even some rotation like a Google as an example stock,

608
00:30:38,720 --> 00:30:41,800
Speaker 5: we like great cash flow generator training at about seventeen

609
00:30:41,880 --> 00:30:44,160
Speaker 5: eighteen times earnings for what you're getting.

610
00:30:44,560 --> 00:30:46,920
Speaker 2: You know, Paul, you mentioned this the federated growth and

611
00:30:47,000 --> 00:30:50,840
Speaker 2: this is the MTT platform out of Milwaukee. Forty seven

612
00:30:50,920 --> 00:30:54,680
Speaker 2: point four percent in the top ten stocks. Yep. That's

613
00:30:54,760 --> 00:30:58,760
Speaker 2: so way from the textbooks exactly studied years ago.

614
00:30:59,040 --> 00:31:02,720
Speaker 4: So see, are there sectors that screenwall for you these days?

615
00:31:02,760 --> 00:31:04,880
Speaker 2: Are there factors that screen wall for you these things.

616
00:31:04,920 --> 00:31:07,360
Speaker 2: That's a really important question about it. We haven't asked

617
00:31:07,360 --> 00:31:12,000
Speaker 2: that in ages. Yeah, Saunders questions exactly. Factors.

618
00:31:13,320 --> 00:31:16,120
Speaker 5: Well, our you know, our MTT model that we use

619
00:31:16,200 --> 00:31:20,160
Speaker 5: is multi factored, and it's it's very complicated and probably

620
00:31:20,160 --> 00:31:24,840
Speaker 5: too complicated, but it really tries to imitate the way

621
00:31:24,920 --> 00:31:28,440
Speaker 5: a human brain works in a way i'd call it.

622
00:31:29,200 --> 00:31:31,840
Speaker 5: We don't call it artificial intelligence, call it machine learning.

623
00:31:31,920 --> 00:31:34,280
Speaker 2: This is after the third or fourth beer.

624
00:31:36,080 --> 00:31:39,760
Speaker 5: Continue, But it looks for combinations of things that you like,

625
00:31:40,320 --> 00:31:42,680
Speaker 5: and you know, we point to some combinations of things

626
00:31:42,720 --> 00:31:44,880
Speaker 5: that look pretty good here to us. I mean, if

627
00:31:44,920 --> 00:31:48,520
Speaker 5: you look at companies that are more cyclical in their

628
00:31:48,640 --> 00:31:52,760
Speaker 5: nature and their backdrop and then have good balance sheets

629
00:31:53,240 --> 00:31:57,600
Speaker 5: in valuations that are still pretty cheap, those are the

630
00:31:57,640 --> 00:32:02,120
Speaker 5: stocks that we kind of like here. Regional banks, some

631
00:32:02,200 --> 00:32:05,680
Speaker 5: of the out of favor technology companies, you know, some

632
00:32:05,720 --> 00:32:07,040
Speaker 5: of the industrial sectors.

633
00:32:07,120 --> 00:32:10,080
Speaker 2: Defense defense stocks have had pretty good runs.

634
00:32:10,080 --> 00:32:12,400
Speaker 5: So but you have to look underneath the surface to

635
00:32:12,480 --> 00:32:15,600
Speaker 5: find ones that makes sense. But yeah, it's those kind

636
00:32:15,640 --> 00:32:18,040
Speaker 5: of things now a little more of a value tilt,

637
00:32:18,840 --> 00:32:22,680
Speaker 5: perhaps even within growth like Google's a growth stock, but

638
00:32:22,840 --> 00:32:24,320
Speaker 5: with a kind of value tilt.

639
00:32:24,080 --> 00:32:26,440
Speaker 4: To it valuation. I'm sure you get pushed back from

640
00:32:26,480 --> 00:32:29,520
Speaker 4: your clients a lot about point this market looks expensive here.

641
00:32:30,320 --> 00:32:32,640
Speaker 4: How do you respond to that? You say, hey, if

642
00:32:32,640 --> 00:32:35,520
Speaker 4: you back out these handful of aims, the market's not

643
00:32:35,600 --> 00:32:36,280
Speaker 4: that expensive.

644
00:32:36,440 --> 00:32:37,640
Speaker 2: That's exactly how we do it.

645
00:32:37,680 --> 00:32:40,000
Speaker 5: In fact, what we started doing about a year ago

646
00:32:40,880 --> 00:32:44,000
Speaker 5: was we started calculating what a fair value on the

647
00:32:44,160 --> 00:32:46,200
Speaker 5: S and P would be if you did the math

648
00:32:46,720 --> 00:32:50,680
Speaker 5: in two parts and then combined it. These big cash

649
00:32:50,680 --> 00:32:54,719
Speaker 5: flow generators that are near monopoly businesses that are in

650
00:32:54,840 --> 00:32:58,880
Speaker 5: growth spaces, we think you add that all up, they're

651
00:32:58,920 --> 00:33:01,640
Speaker 5: probably worth like a twenty five multiple.

652
00:33:02,280 --> 00:33:02,560
Speaker 2: People.

653
00:33:02,680 --> 00:33:06,040
Speaker 5: Heuristic on what the market is worth is based in

654
00:33:06,120 --> 00:33:10,680
Speaker 5: a world where the market average was fifty percent cyclical

655
00:33:10,880 --> 00:33:17,040
Speaker 5: industrial type companies, and now that share of the market's

656
00:33:17,040 --> 00:33:20,680
Speaker 5: probably about thirty percent. And you've got these big casual generators.

657
00:33:20,680 --> 00:33:23,400
Speaker 5: So when you put them out there at twenty five

658
00:33:23,600 --> 00:33:25,920
Speaker 5: and you say, okay, call the rest of the market eighteen,

659
00:33:26,600 --> 00:33:29,080
Speaker 5: you get to a fair multiple on the market of

660
00:33:29,120 --> 00:33:31,520
Speaker 5: around twenty one and a half. That's what we've been

661
00:33:31,600 --> 00:33:34,480
Speaker 5: using in all our targets that have more or less

662
00:33:34,520 --> 00:33:37,400
Speaker 5: been working for us. You know where we're closing in

663
00:33:37,440 --> 00:33:39,440
Speaker 5: on our target for this year now, which at one

664
00:33:39,440 --> 00:33:40,760
Speaker 5: time seemed crazy, but.

665
00:33:40,680 --> 00:33:42,480
Speaker 2: You got to get this in over with a big

666
00:33:42,520 --> 00:33:46,800
Speaker 2: share we purchased today. How's use the cash going among

667
00:33:46,840 --> 00:33:49,480
Speaker 2: the anointed? Are they actually giving it back and share

668
00:33:49,560 --> 00:33:51,720
Speaker 2: purchase and dividend. We're seeing a lot.

669
00:33:51,560 --> 00:33:54,320
Speaker 5: Of that right now, Tom, And that's another reason that

670
00:33:54,360 --> 00:33:56,760
Speaker 5: we're bullsh on the market. Companies are throwing off a

671
00:33:56,800 --> 00:33:59,240
Speaker 5: lot of cash here and we're in that part of

672
00:33:59,280 --> 00:34:01,920
Speaker 5: the cycle here. You're seeing that, and the buybacks are

673
00:34:01,920 --> 00:34:03,360
Speaker 5: supporting seasons.

674
00:34:03,360 --> 00:34:05,800
Speaker 2: Am I right? Forty percent of free cash flows. Some

675
00:34:05,840 --> 00:34:07,800
Speaker 2: of these companies are paying out.

676
00:34:08,160 --> 00:34:11,560
Speaker 5: In our dividend fund, We've got companies paying out sixty

677
00:34:11,760 --> 00:34:14,880
Speaker 5: five seventy percent. We like to see that in slower

678
00:34:14,920 --> 00:34:18,000
Speaker 5: growing companies and the dividend fund, but you know, we

679
00:34:18,160 --> 00:34:18,760
Speaker 5: like to see.

680
00:34:18,560 --> 00:34:21,879
Speaker 2: Those big payoffs. Steven O, thank you so much. Thank

681
00:34:21,920 --> 00:34:27,560
Speaker 2: you federator being with us today.

682
00:34:30,040 --> 00:34:33,960
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

683
00:34:34,000 --> 00:34:37,040
Speaker 1: starting at seven am Eastern on Apple, Corplay and Android

684
00:34:37,040 --> 00:34:40,040
Speaker 1: Auto with the Bloomberg Business app. You can also watch

685
00:34:40,120 --> 00:34:43,080
Speaker 1: us live every weekday on YouTube and always on the

686
00:34:43,080 --> 00:34:44,200
Speaker 1: Bloomberg terminal.

687
00:34:44,400 --> 00:34:47,440
Speaker 2: Douglas Holt's Eichin was a huge value add for years

688
00:34:47,520 --> 00:34:50,719
Speaker 2: and years. For some reason, over the last quarters we

689
00:34:50,800 --> 00:34:53,960
Speaker 2: have not had the expertise at Douglas Holtz econ on

690
00:34:54,040 --> 00:34:56,160
Speaker 2: the show. We're thrilled and he could join us in

691
00:34:56,160 --> 00:34:59,880
Speaker 2: the American Action Forum. His public service with Senator McCain

692
00:35:00,760 --> 00:35:05,960
Speaker 2: years ago a GOP slant, yes, but always just exceptional

693
00:35:06,000 --> 00:35:09,520
Speaker 2: scholarship out of Dennison in prison. Doug, it's been way

694
00:35:09,560 --> 00:35:12,480
Speaker 2: way too long. Thank you so much for joining today.

695
00:35:12,640 --> 00:35:20,440
Speaker 2: How far removed, Douglas Holtziken, it's just traditional Republican economics

696
00:35:20,520 --> 00:35:24,560
Speaker 2: and Republican labor economics. How far removed is it from

697
00:35:24,640 --> 00:35:25,480
Speaker 2: President Trump?

698
00:35:28,120 --> 00:35:31,560
Speaker 7: This is an enormous shift in the Republican Party. I mean,

699
00:35:31,800 --> 00:35:37,440
Speaker 7: it's almost unrecognizable from twenty years ago. And the characteristic

700
00:35:37,520 --> 00:35:40,520
Speaker 7: of this area is that both parties are interested in

701
00:35:40,640 --> 00:35:43,440
Speaker 7: using the power of the government is a cudgel for

702
00:35:43,560 --> 00:35:47,440
Speaker 7: their purposes. And that's that's not a limited government personal

703
00:35:47,440 --> 00:35:49,680
Speaker 7: freedom approach, not at all.

704
00:35:49,800 --> 00:35:53,120
Speaker 2: What is Kevin Asset doing. I mean, I understand Pennsylvania

705
00:35:53,239 --> 00:35:57,680
Speaker 2: doesn't have the quality of Princeton to the far far Norris,

706
00:35:57,800 --> 00:36:00,200
Speaker 2: but you know you and I know Kevin ass and

707
00:36:00,200 --> 00:36:04,840
Speaker 2: as a legit macro economist, how is he carrying water

708
00:36:04,960 --> 00:36:08,160
Speaker 2: for the president? How do you see that? Douglas Holt Eacon.

709
00:36:09,000 --> 00:36:11,239
Speaker 7: Uh, you know, I think that's a question you have

710
00:36:11,320 --> 00:36:14,680
Speaker 7: to ask Kevin. I don't understand a lot of the

711
00:36:14,719 --> 00:36:19,400
Speaker 7: Trump administration messaging on their policies. I certainly don't understand

712
00:36:19,400 --> 00:36:22,680
Speaker 7: the strategy and their policies, and and if Kevin understands it,

713
00:36:22,719 --> 00:36:23,839
Speaker 7: I'd like to understand it better.

714
00:36:24,719 --> 00:36:24,959
Speaker 1: Doug.

715
00:36:25,040 --> 00:36:28,200
Speaker 4: We we had some fireworks at the Bureau Labor Statistics

716
00:36:28,280 --> 00:36:30,719
Speaker 4: last week when the jobs data came out here. Can

717
00:36:30,760 --> 00:36:33,800
Speaker 4: you put that in context based upon your experience?

718
00:36:35,760 --> 00:36:38,640
Speaker 7: Well, you know, the assertion by the President was that

719
00:36:38,680 --> 00:36:42,240
Speaker 7: the commissioner rigged the data, and there's simply no evidence

720
00:36:42,680 --> 00:36:44,880
Speaker 7: of rigging the data, and there's no opportunity actually for

721
00:36:44,920 --> 00:36:48,200
Speaker 7: the commissioner to alter the data in anyway if you

722
00:36:48,200 --> 00:36:51,680
Speaker 7: look at the procedures that are followed. So it's a

723
00:36:51,719 --> 00:36:55,920
Speaker 7: baseless assertion. It's something that I think it is obviously

724
00:36:56,040 --> 00:37:00,920
Speaker 7: detrimental to the institution. It undermines to some extent credibility

725
00:37:00,680 --> 00:37:03,120
Speaker 7: of the government's data, and you don't like to see that.

726
00:37:03,880 --> 00:37:06,479
Speaker 7: And it was simply the White House trying to change

727
00:37:06,480 --> 00:37:09,080
Speaker 7: the subject from the substance of the data, which is

728
00:37:09,520 --> 00:37:11,880
Speaker 7: really poor jobs numbers over the past three months, to

729
00:37:13,120 --> 00:37:16,640
Speaker 7: firing an official who's a holdover from the Biden administration.

730
00:37:16,960 --> 00:37:19,000
Speaker 7: So it's an old playbook the White House. This White

731
00:37:19,040 --> 00:37:23,000
Speaker 7: House has used a lot. I do think it has

732
00:37:23,040 --> 00:37:25,840
Speaker 7: brought to the surface something that's really important, which is

733
00:37:26,400 --> 00:37:30,000
Speaker 7: the diminishing potential quality of the data at the BA

734
00:37:30,080 --> 00:37:33,080
Speaker 7: and the BLS. And you know, now, I think the

735
00:37:33,120 --> 00:37:36,360
Speaker 7: general public understands that response rates have fallen, that the

736
00:37:36,400 --> 00:37:39,799
Speaker 7: sampling sizes have gone down, and that initial listments are

737
00:37:40,120 --> 00:37:42,280
Speaker 7: as firm as they might be. So now the questions,

738
00:37:42,280 --> 00:37:45,239
Speaker 7: will anyone get behind an effort to improve those data

739
00:37:45,239 --> 00:37:48,800
Speaker 7: collecting efforts and strengthen those statistical agencies.

740
00:37:49,080 --> 00:37:51,520
Speaker 4: That's a good point, Doug. I mean it kind of

741
00:37:51,520 --> 00:37:54,520
Speaker 4: seems almost antiquated, you know, going out and doing a

742
00:37:54,560 --> 00:37:56,560
Speaker 4: survey in a world of digital.

743
00:37:58,080 --> 00:37:58,920
Speaker 2: Opportunities.

744
00:37:59,120 --> 00:38:00,719
Speaker 7: Here, can I say something about that?

745
00:38:00,719 --> 00:38:00,959
Speaker 2: Paul?

746
00:38:01,160 --> 00:38:03,759
Speaker 7: Yeah, you know a lot of people brought this up,

747
00:38:03,800 --> 00:38:05,600
Speaker 7: you know, like you should be tapping into the ADP

748
00:38:05,800 --> 00:38:10,240
Speaker 7: or other payroll processors, but at some point you actually

749
00:38:10,280 --> 00:38:12,600
Speaker 7: have to do a census of things. So that you

750
00:38:12,760 --> 00:38:15,239
Speaker 7: understand what the weights are going to be on the

751
00:38:15,280 --> 00:38:19,000
Speaker 7: ADP data. They sends it over sample large firms. So

752
00:38:19,280 --> 00:38:22,840
Speaker 7: there is at some point the antiquated issue of going

753
00:38:23,280 --> 00:38:25,919
Speaker 7: figuratively door to door and finding out what's out there,

754
00:38:26,440 --> 00:38:29,160
Speaker 7: knowing what the relative composition of the labor market is.

755
00:38:29,840 --> 00:38:32,680
Speaker 7: And that's an expensive and time consuming process, but it

756
00:38:32,719 --> 00:38:34,640
Speaker 7: needs to be done, be done better.

757
00:38:35,560 --> 00:38:39,560
Speaker 2: The hallmarkt holds he can work, folks, are single sentences

758
00:38:39,600 --> 00:38:43,480
Speaker 2: that make you stop. May I quote the non education,

759
00:38:44,000 --> 00:38:48,680
Speaker 2: non health private sector has lost forty six thousand jobs

760
00:38:49,040 --> 00:38:52,440
Speaker 2: over the past three months. Good morning, Nancy Lazar, who's

761
00:38:52,480 --> 00:38:55,799
Speaker 2: been brilliant on this. I don't think Doug that's understood

762
00:38:56,280 --> 00:39:01,840
Speaker 2: that private sector employment is terrible X the gifts of

763
00:39:01,960 --> 00:39:02,920
Speaker 2: health and education.

764
00:39:04,280 --> 00:39:06,880
Speaker 7: It's dead in the water and has been. I've been

765
00:39:07,600 --> 00:39:12,400
Speaker 7: confused by this sort of positive reactions to the recent

766
00:39:12,480 --> 00:39:15,320
Speaker 7: labor market reports because you know, even before the revision,

767
00:39:15,360 --> 00:39:17,600
Speaker 7: when we got one hundred and forty seven thousand jobs

768
00:39:18,200 --> 00:39:21,520
Speaker 7: in the previous employment report, seventy odd thousand of them

769
00:39:21,520 --> 00:39:24,960
Speaker 7: were in state in local governments. Of the remaining seventy odd,

770
00:39:25,160 --> 00:39:28,320
Speaker 7: fifty eight thousand were in health. It's the only place

771
00:39:28,320 --> 00:39:30,799
Speaker 7: that was generating any jobs. Everything else is dead in

772
00:39:30,840 --> 00:39:33,080
Speaker 7: the water. So when I look at the labor market,

773
00:39:33,080 --> 00:39:34,880
Speaker 7: I see a labor market where no one gets fired.

774
00:39:34,880 --> 00:39:37,160
Speaker 7: That's great, but no one gets hired either. It is

775
00:39:37,160 --> 00:39:39,120
Speaker 7: at a standstill, and that's really quite wrong.

776
00:39:39,320 --> 00:39:41,280
Speaker 2: So so how to fold that over to FED policy?

777
00:39:41,320 --> 00:39:41,400
Speaker 5: Here?

778
00:39:41,400 --> 00:39:44,040
Speaker 2: I mean, go to sixty thousand feet if you will.

779
00:39:44,080 --> 00:39:46,399
Speaker 2: I brought it up today for the first time. Are

780
00:39:46,440 --> 00:39:49,200
Speaker 2: we at a point now where this is so emergent

781
00:39:49,360 --> 00:39:51,400
Speaker 2: that in one week or two weeks we're going to

782
00:39:51,440 --> 00:39:56,400
Speaker 2: be talking about a fifty B cut September seventeenth.

783
00:39:56,520 --> 00:39:59,640
Speaker 7: I don't think we do see the basis for fifty

784
00:39:59,680 --> 00:40:02,399
Speaker 7: bas points because you know, the FED has a dual

785
00:40:02,440 --> 00:40:06,680
Speaker 7: mandate and and the Trump tariffs have really put the

786
00:40:06,680 --> 00:40:10,399
Speaker 7: FED in the crossairs because the inflation pressures are there,

787
00:40:10,920 --> 00:40:15,360
Speaker 7: the labor markets, uh, you know, really at a standstill.

788
00:40:15,480 --> 00:40:18,200
Speaker 7: So the mandates are telling you to do different things,

789
00:40:18,200 --> 00:40:20,479
Speaker 7: and how you balance that is an incredibly hard job.

790
00:40:20,960 --> 00:40:24,160
Speaker 7: People people put different weights on, you know, inflation versus unemployment.

791
00:40:24,360 --> 00:40:27,600
Speaker 7: They do, and we don't know how quickly this is

792
00:40:27,600 --> 00:40:28,040
Speaker 7: going to work.

793
00:40:28,120 --> 00:40:31,560
Speaker 2: So Paul I got to interrupt Doug. This is too

794
00:40:31,600 --> 00:40:35,000
Speaker 2: important Paul get one more in here, But does it

795
00:40:35,320 --> 00:40:37,120
Speaker 2: does Holts? He can look like he could be a

796
00:40:37,160 --> 00:40:37,880
Speaker 2: fed governor.

797
00:40:37,960 --> 00:40:42,360
Speaker 7: Oh, I mean that, I promise you he does not

798
00:40:42,440 --> 00:40:43,680
Speaker 7: look like he's going to be a fed.

799
00:40:45,800 --> 00:40:47,560
Speaker 4: So Doug, let's let's just kind of put a bow

800
00:40:47,600 --> 00:40:49,719
Speaker 4: on this with a discussion of tariffs here. I mean,

801
00:40:49,719 --> 00:40:52,760
Speaker 4: tariffs are here. They are here to stay. It looks

802
00:40:52,840 --> 00:40:55,759
Speaker 4: like and it's whether it's fifteen, eighteen twenty percent on

803
00:40:55,800 --> 00:40:58,279
Speaker 4: an average basis, how do you think that's going to

804
00:40:58,320 --> 00:41:01,160
Speaker 4: play out through this economy over there come six twelve,

805
00:41:01,160 --> 00:41:01,880
Speaker 4: eighteen months.

806
00:41:03,360 --> 00:41:05,959
Speaker 7: So I think number one, you have the right time frame.

807
00:41:06,400 --> 00:41:09,719
Speaker 7: People have gotten too accustomed to the notion that a

808
00:41:09,760 --> 00:41:13,160
Speaker 7: pandemic or financial crisis hits the mainStreet economy, and we

809
00:41:13,200 --> 00:41:15,520
Speaker 7: see real quickly what's going on. This is going to

810
00:41:15,560 --> 00:41:19,360
Speaker 7: evolve over quarters and years, not weeks and months, and

811
00:41:19,400 --> 00:41:22,279
Speaker 7: so we really haven't seen the impact yet. It is

812
00:41:22,400 --> 00:41:26,200
Speaker 7: unmistakable that the terrorists of this size, so roughly three

813
00:41:26,320 --> 00:41:29,040
Speaker 7: hundred to three hundred and fifty billion dollars at annualized rate,

814
00:41:29,239 --> 00:41:32,160
Speaker 7: that's a very big tax increase. It is going to

815
00:41:32,840 --> 00:41:35,520
Speaker 7: put upward pressure on prices, no way around it. And

816
00:41:35,520 --> 00:41:38,400
Speaker 7: it's going to take purchasing power away from consumers, and

817
00:41:38,760 --> 00:41:42,000
Speaker 7: that's going to slow the economy. So at some point

818
00:41:42,120 --> 00:41:45,520
Speaker 7: over the that six to twelve month horizon, we are

819
00:41:45,560 --> 00:41:49,240
Speaker 7: going to pay the price in inflation and slower employment growth.

820
00:41:49,239 --> 00:41:51,480
Speaker 7: And we're starting to see that, and there's no way

821
00:41:51,480 --> 00:41:53,399
Speaker 7: out of that. The only question is how big will

822
00:41:53,440 --> 00:41:54,720
Speaker 7: it be and how fast will it happen?

823
00:41:54,880 --> 00:41:56,880
Speaker 2: You know, as blue Tie as sort of a governor,

824
00:41:56,920 --> 00:42:00,319
Speaker 2: Blue Tie, Sure, I think it is solid. Second, thank

825
00:42:00,360 --> 00:42:02,560
Speaker 2: you so much, wonderful. It's on way too long. Doug.

826
00:42:02,560 --> 00:42:04,880
Speaker 2: We got to get you on your numerous times before.

827
00:42:04,960 --> 00:42:09,000
Speaker 2: Jackson hold Douglas oltz econ his public service. It's CBO.

828
00:42:09,080 --> 00:42:12,280
Speaker 2: He's a president of the American Action Forum.

829
00:42:12,840 --> 00:42:16,760
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

830
00:42:16,800 --> 00:42:20,200
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

831
00:42:20,239 --> 00:42:23,200
Speaker 1: with the Bloomberg Business app. You can also listen live

832
00:42:23,280 --> 00:42:26,840
Speaker 1: on Amazon Alexa from our flagship New York station, Just

833
00:42:26,880 --> 00:42:30,600
Speaker 1: say Alexa Play Bloomberg. Eleven thirty Lisa Mateo.

834
00:42:30,400 --> 00:42:33,040
Speaker 2: Fired up for the newspaper. She said, at three am,

835
00:42:34,120 --> 00:42:35,239
Speaker 2: what are you starting with today?

836
00:42:35,320 --> 00:42:37,759
Speaker 8: Okay, big sports news, So let's break this down. Okay,

837
00:42:37,760 --> 00:42:39,600
Speaker 8: so the NFL is going to sell most of its

838
00:42:39,640 --> 00:42:42,759
Speaker 8: media business to Walt Disney. This is in exchange for

839
00:42:42,840 --> 00:42:46,120
Speaker 8: a ten percent steak in the ESPN Sports Networks. Okay,

840
00:42:46,120 --> 00:42:48,800
Speaker 8: So ESPN, you know, jointly owned by Disney, they have

841
00:42:48,840 --> 00:42:51,520
Speaker 8: about an eighty percent steak, and also Hirst Communications they

842
00:42:51,560 --> 00:42:52,840
Speaker 8: have a twenty percent steak.

843
00:42:53,320 --> 00:42:53,960
Speaker 4: And what it.

844
00:42:53,960 --> 00:42:57,000
Speaker 8: Includes, it's the NFL Red Zone that's a subscription based

845
00:42:57,080 --> 00:43:00,840
Speaker 8: highlight service, the NFL network, cable chat, and also Disney

846
00:43:00,960 --> 00:43:04,719
Speaker 8: is going to get more air, more NFL games. ESPN though,

847
00:43:04,760 --> 00:43:07,359
Speaker 8: is getting ready to launch this new streaming service that's

848
00:43:07,400 --> 00:43:09,440
Speaker 8: going to cost about thirty dollars a month. So the

849
00:43:09,480 --> 00:43:12,799
Speaker 8: timing on this is pretty good. On top of that, though,

850
00:43:12,800 --> 00:43:14,640
Speaker 8: the Wall Street Journal actually just put it on an

851
00:43:14,680 --> 00:43:19,080
Speaker 8: article that says Disney bought exclusive rights to manywwees high

852
00:43:19,080 --> 00:43:21,839
Speaker 8: profile events for one and a half, just one hour.

853
00:43:22,520 --> 00:43:25,359
Speaker 2: The Sweeten cam is going nuts right now. You're over

854
00:43:25,440 --> 00:43:27,800
Speaker 2: there squirm and yeah, I mean, is this the future?

855
00:43:28,480 --> 00:43:31,040
Speaker 4: Well, it's a great move I think by ESPN and

856
00:43:31,120 --> 00:43:34,960
Speaker 4: Disney just to cement its relationship with the NFL. With

857
00:43:35,080 --> 00:43:37,360
Speaker 4: all the competition that is likely to come in for

858
00:43:37,440 --> 00:43:40,520
Speaker 4: distribution from Amazon than all the other streamers.

859
00:43:40,600 --> 00:43:46,480
Speaker 2: It's just kind of real journalistic independence. Yeah, I'm sure

860
00:43:46,480 --> 00:43:47,520
Speaker 2: there will be. It's fine.

861
00:43:47,560 --> 00:43:49,600
Speaker 4: They're already tied at the hip. I mean, they're already

862
00:43:49,640 --> 00:43:52,040
Speaker 4: tied at the hip anyway. This just kind of codifies

863
00:43:52,040 --> 00:43:53,840
Speaker 4: it and again in a world where there's going to

864
00:43:53,880 --> 00:43:56,880
Speaker 4: be more and more competition to get that NFL programming,

865
00:43:56,880 --> 00:43:59,600
Speaker 4: which is the most valuable in the world. ESPN's now

866
00:43:59,600 --> 00:44:01,440
Speaker 4: got a really good position, I think.

867
00:44:01,560 --> 00:44:02,280
Speaker 2: So we'll see.

868
00:44:02,920 --> 00:44:04,600
Speaker 8: I think. So I look at it and I'm like, okay,

869
00:44:04,640 --> 00:44:06,920
Speaker 8: maybe I can cut the cable cord now because all

870
00:44:07,000 --> 00:44:09,600
Speaker 8: my husband watches cable furs for the sports part of it.

871
00:44:09,600 --> 00:44:10,520
Speaker 5: In the NFL.

872
00:44:11,840 --> 00:44:13,560
Speaker 8: Seppens it's sports.

873
00:44:13,600 --> 00:44:14,200
Speaker 6: It's huge.

874
00:44:15,200 --> 00:44:15,560
Speaker 2: Okay.

875
00:44:15,640 --> 00:44:17,719
Speaker 8: So this next story I thought of you, Paul, because

876
00:44:17,719 --> 00:44:19,600
Speaker 8: I remember you said you go to resorts and at

877
00:44:19,640 --> 00:44:21,759
Speaker 8: the end of it, you get this big bill, right,

878
00:44:21,880 --> 00:44:26,600
Speaker 8: all the kids, smoothies like everything. So more people are

879
00:44:26,800 --> 00:44:30,360
Speaker 8: enjoying these all inclusive resorts so where everything is included

880
00:44:30,400 --> 00:44:32,120
Speaker 8: so you don't get the big bill at the end.

881
00:44:32,760 --> 00:44:36,520
Speaker 8: And hotels like Hyatt Marriott, they're trying to get the affluent, yes,

882
00:44:36,560 --> 00:44:39,799
Speaker 8: the customers. It's going to run you maybe about one

883
00:44:39,800 --> 00:44:42,919
Speaker 8: thousand dollars a night for you know, the first year.

884
00:44:43,160 --> 00:44:46,040
Speaker 2: Yeah, I did it, and I kept very careful track

885
00:44:46,120 --> 00:44:48,879
Speaker 2: and I decided it was fair. It was worth it.

886
00:44:48,880 --> 00:44:51,799
Speaker 2: It was yeah, borderline worth it. But yeah, the weight

887
00:44:51,880 --> 00:44:55,120
Speaker 2: of not having the smoothie bill at the end, or

888
00:44:55,200 --> 00:44:58,520
Speaker 2: excuse me, the rum punch bill exactly.

889
00:44:59,080 --> 00:45:00,399
Speaker 4: So we're all and we do it in a room

890
00:45:00,480 --> 00:45:00,839
Speaker 4: every year.

891
00:45:00,920 --> 00:45:03,120
Speaker 2: So this is build you, this is buildings.

892
00:45:03,400 --> 00:45:06,320
Speaker 8: So it is okay. So you have like Marriott, for example,

893
00:45:06,360 --> 00:45:09,440
Speaker 8: they just bought their first all inclusive W resort, Punta

894
00:45:09,520 --> 00:45:11,000
Speaker 8: Khana and the Dominican.

895
00:45:10,560 --> 00:45:12,360
Speaker 2: Republic check it out.

896
00:45:12,920 --> 00:45:15,440
Speaker 8: Last year they had their first Marriout branded in Cancun.

897
00:45:15,640 --> 00:45:18,719
Speaker 8: Even Hiatt they have about ten all inclusive brands. So

898
00:45:18,800 --> 00:45:20,920
Speaker 8: it's this is something that's really starting to build. But

899
00:45:21,000 --> 00:45:24,000
Speaker 8: they're gearing it like they're putting it on steroids. You know.

900
00:45:24,040 --> 00:45:25,560
Speaker 8: It's like, you know, a thousand.

901
00:45:25,160 --> 00:45:26,320
Speaker 6: Dollars for two people.

902
00:45:28,480 --> 00:45:31,000
Speaker 8: At that price, I don't. I don't know if I would.

903
00:45:31,320 --> 00:45:32,480
Speaker 8: I don't eat that much.

904
00:45:34,520 --> 00:45:35,359
Speaker 4: Salary every day.

905
00:45:35,440 --> 00:45:37,680
Speaker 2: Are you do you go to a resort like that?

906
00:45:37,760 --> 00:45:39,040
Speaker 2: Are you doing pilates?

907
00:45:39,800 --> 00:45:40,319
Speaker 3: You have to?

908
00:45:40,480 --> 00:45:41,839
Speaker 8: I go to the gym every day when I.

909
00:45:41,800 --> 00:45:42,360
Speaker 2: Go on vacation.

910
00:45:43,600 --> 00:45:47,600
Speaker 8: Next the people are okay, this one's going to get

911
00:45:47,640 --> 00:45:50,600
Speaker 8: you fired up to Okay. So this is Microsoft. They're

912
00:45:50,640 --> 00:45:54,400
Speaker 8: getting this more strict return to the office policy, sources

913
00:45:54,400 --> 00:45:57,800
Speaker 8: telling Business Insider employees could be coming back more often. Okay,

914
00:45:57,840 --> 00:46:01,279
Speaker 8: so right now they let employees work mostly remote as

915
00:46:01,360 --> 00:46:03,600
Speaker 8: much as fifty percent of the time. Sometimes they're a

916
00:46:03,600 --> 00:46:06,279
Speaker 8: little bit flexible. But the new policy is going to

917
00:46:06,320 --> 00:46:09,279
Speaker 8: require them to work in the office at least three

918
00:46:09,360 --> 00:46:09,839
Speaker 8: days a week.

919
00:46:09,920 --> 00:46:13,919
Speaker 2: Oh boy, what Business Insiders Holly doing a great job

920
00:46:13,960 --> 00:46:15,640
Speaker 2: on this with at Yes.

921
00:46:15,600 --> 00:46:16,319
Speaker 8: Yes they do.

922
00:46:16,320 --> 00:46:19,600
Speaker 2: They get there's just like you know, admirable Boom in

923
00:46:19,600 --> 00:46:22,360
Speaker 2: the in the wind on Mary Poppins. There's something going

924
00:46:22,400 --> 00:46:24,120
Speaker 2: on in August this year.

925
00:46:24,400 --> 00:46:26,640
Speaker 8: Yeah, but it could because you've seen like a lot

926
00:46:26,680 --> 00:46:29,280
Speaker 8: of especially tech companies starting to do this, like getting

927
00:46:29,320 --> 00:46:31,400
Speaker 8: the more back to the office, being a little bit

928
00:46:31,400 --> 00:46:31,920
Speaker 8: more strict.

929
00:46:31,960 --> 00:46:33,920
Speaker 5: But hey, three days, I don't know.

930
00:46:34,120 --> 00:46:37,200
Speaker 2: Listam tato, Thank you so much the newspapers this morning.

931
00:46:37,440 --> 00:46:42,200
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify

932
00:46:42,320 --> 00:46:46,120
Speaker 1: and anywhere else you get your podcasts. Listen live each

933
00:46:46,160 --> 00:46:49,960
Speaker 1: weekday seven to ten am Easter and on Bloomberg dot com,

934
00:46:50,120 --> 00:46:53,920
Speaker 1: the iHeartRadio app tune In, and the Bloomberg Business app.

935
00:46:54,239 --> 00:46:57,360
Speaker 1: You can also watch us live every weekday on YouTube

936
00:46:57,640 --> 00:46:59,640
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