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Speaker 2: Michael Wilson, thank you so much for joining this morning.
Speaker 2: You called a new bullmarket and you say you have
Speaker 2: a higher conviction into twenty twenty six. Why, yeah, thanks Tom.
Speaker 3: I mean we talked about this in our midyear outlook
Speaker 3: going back to May, which we felt like the April
Speaker 3: lows would be a durable low for a lot of
Speaker 3: different reasons. I'll try to go through them in no
Speaker 3: specific order, but I mean, you know, we've had the
Speaker 3: view coming into this year that it was going to
Speaker 3: be a tough first half because earning provisions were coming
Speaker 3: down pretty sharply for a lot of reasons, most notably
Speaker 3: the AI CAPEC cycle was decelerating. We still had what
Speaker 3: I would call a rolling recession in many industries that
Speaker 3: were struggling, and the revisions were coming down. So what
Speaker 3: tariffs did was it sort of culminated that that decline
Speaker 3: into April, and as you know, I mean you've been
Speaker 3: around the block like me. I mean, market's bottom on
Speaker 3: bad news, okay, And so that I would have likened
Speaker 3: the Liberation Day announcement to sort of a natural disaster
Speaker 3: that basically, you know, capitulated, everybody capitulated. So that revision
Speaker 3: of revision factors the main driver when I were bullish,
Speaker 3: we think it's a bull market is the revision factors
Speaker 3: for earnings are have shot higher. And you've seen our notes, Okay,
Speaker 3: So like that's that is doesn't happen every year. That
Speaker 3: is as extreme as we saw coming out of the
Speaker 3: COVID lows in March of twenty twenty. Okay, it's as
Speaker 3: extreme as we saw coming out of nine to eleven.
Speaker 3: It looked like a recession. It walks like a recession,
Speaker 3: a priced like a recession. So that's it.
Speaker 2: Okay. This is a really critical question, folks. We all
Speaker 2: understand the Trump legislation, the Beautiful Bill and all that
Speaker 2: as some form of stimulus forward at least out one
Speaker 2: two years, maybe three years. It Morgan standing, Mike Wilson.
Speaker 2: The key question is the linkage of potential rate cuts
Speaker 2: to equity enthusiasm. I don't have a straight answer on
Speaker 2: that yet, can we link Powell, our future chairman, rate
Speaker 2: cuts into an equity lift?
Speaker 3: Yeah, well, I think I mean, as usual, the markets
Speaker 3: get ahead of this, and what the markets are anticipating now,
Speaker 3: the bond market and the equity markets that the FED
Speaker 3: will be cutting sometime in the next you know, two
Speaker 3: to six months. And you know, even our house call,
Speaker 3: I mean, our house calls for no cuts this year,
Speaker 3: but then they have seven cuts next year. I mean,
Speaker 3: that's like wildly bullish for equities. Okay, so you know
Speaker 3: it's you almost have the perfect setup, Tom, because what
Speaker 3: you have now is lagging economic data, which is what
Speaker 3: the FED uses to make decisions, and you have you
Speaker 3: already had the equity market in our divisions telling you
Speaker 3: what's going to happen. So you know, they're looking backwards
Speaker 3: and they're going to be looking at lagging labor data,
Speaker 3: you know, and then of course lagging inflation data, which
Speaker 3: should come down ultimately later this year next year, and
Speaker 3: they're going to cut into that and but the but
Speaker 3: you know, there's not going to be a knock on
Speaker 3: negative effect for earning revisions in the way that people
Speaker 3: kind of assume when you get that sort of decline
Speaker 3: in labor data. In fact, I would argue because it's
Speaker 3: gradual that we're going to see revisions go up, because
Speaker 3: you know, when companies reduce headcount, it actually accrues to margins.
Speaker 4: Mike, what what is screening well for you? Now? I'm
Speaker 4: not sure if it's sectors that you guys screened by
Speaker 4: or different factors that you screen by. How are you
Speaker 4: looking at this market and maybe where opportunities might be right,
Speaker 4: So we do both.
Speaker 3: We look at factor revisions, we look at sector industry revisions,
Speaker 3: and we look at the stock level too. It works
Speaker 3: in all those areas, and so we've been rightly positioned,
Speaker 3: really since April to be overweight financials industrials. Those are
Speaker 3: the two favorites, and also software to some degree, and
Speaker 3: those have been the areas where the revisions have been
Speaker 3: the strongest, and I think that probably could continue. And
Speaker 3: so at the end of the day, I do think
Speaker 3: the biggest opportunity going forward is the areas that have
Speaker 3: not seen those revisions yet. So let's talk about the
Speaker 3: industries where we've been sort of in this rolling recession.
Speaker 3: Housing related, okay, commodity related, some of the consumer goods
Speaker 3: areas which are going to feel the effects of terrors now.
Speaker 3: So in the very short term, we actually think revision
Speaker 3: breath could come down a bit as some of these
Speaker 3: terrorts flow through to cost of good soul. But that's
Speaker 3: just going to create the next buying opportunity, perhaps in
Speaker 3: these areas that are lagged, even small casts, because they
Speaker 3: will love the fact that that's cutting rates at some point.
Speaker 4: Mike, one of the themes today and really for the
Speaker 4: last period of time has been concentration risk. In this marketplace,
Speaker 4: it seems like only a handful of stocks are driving
Speaker 4: the performance. But I think what we're kind of coming
Speaker 4: to the conclusion of our at least rationalizing is because
Speaker 4: that's where the earnest growth is, that's where the free
Speaker 4: cash flow is. How do you think about that issue?
Speaker 3: You're exactly right. I mean, the market's not stupid. I mean,
Speaker 3: like the first of all, what drove the market lower
Speaker 3: in the first quarter the MAG seven You know why,
Speaker 3: because the MAG seven range divisions were terrible. In the
Speaker 3: first quarter, we had an AI camp BAX acceleration. We
Speaker 3: had questions around whether it's going to generate ROI revenue
Speaker 3: growth kind of decelerated a bit, so you know, it
Speaker 3: happened for a reason, but has nothing to do with teriffs, okay.
Speaker 3: It has everything to do which is the natural evolution
Speaker 3: of this AI cycle that's going on. So I think,
Speaker 3: you know, coming out of the April lows, the reason
Speaker 3: why the MAG seven led is well, hey, they're big
Speaker 3: and liquid, everybody loves them. But also because they were
Speaker 3: seeing a rate of change bottom in the revision factors.
Speaker 3: I'll give you two huge catalysts for that. The weaker dollar, okay,
Speaker 3: which accrues to the large multinationals, particularly some of the
Speaker 3: MAGS seven. And the second one was that we saw
Speaker 3: that you know, U Vidio could no longer sell they
Speaker 3: could sell, they could no longer sell chips to China,
Speaker 3: and they took a big write down on inventory. But
Speaker 3: now they can sell those chips when the inventory is
Speaker 3: at well. So what does that tell you? Gross margins
Speaker 3: are going to be basically manufactured for the next year.
Speaker 3: So there's a lot of reasons, you know, why stocks
Speaker 3: do what they do. But the main reason we for
Speaker 3: our whole franchise, as you know, focuses on earnings, not
Speaker 3: lagging economic data.
Speaker 2: Mike Wilson with us across your commute this morning across
Speaker 2: the nation, I should say on YouTube as well in
Speaker 2: the office and of course at home YouTube subscribe to
Speaker 2: Bloomberg Podcast growing each and every day. Should I do
Speaker 2: a shout out right now for Joe Wisenthal, Tracy Alloy
Speaker 2: killing it number one on Apple?
Speaker 4: Yesterday's phenomenal had a great write up in the New
Speaker 4: York Times, so they did double.
Speaker 2: Days and you know they'll be with us Jackson Hole,
Speaker 2: So maybe I'll get you know, maybe they're entourage. You'll
Speaker 2: let me speak to them. We'll have to see Mike
Speaker 2: Wilson with us. With Morgan Stanley, Mike, how do you
Speaker 2: use your analysts work? Mister Weiss covers Microsoft just as
Speaker 2: you know, do you speak to these people or how
Speaker 2: do you use the securities analysis of Morgan Stanley.
Speaker 3: Percent We're a micro macro franchise man. I started my
Speaker 3: career in the stock business, you know, I used to
Speaker 3: be a TMT specialist as a desk analyst, you know,
Speaker 3: following bottoms up, and so I obviously know these folks
Speaker 3: have been here for thirty five years. I know all
Speaker 3: of them well, I've worked with all of them, and
Speaker 3: so we every month we hold a call that we
Speaker 3: basically call it the micro macro matchup, where we basically
Speaker 3: kind of talk about our views from a macro standpoint.
Speaker 3: Then we talk to the analysts and say, well, what
Speaker 3: are you guys hearing? What are you doing? You know
Speaker 3: how you how are your numbers may be adjusting, and
Speaker 3: that informs us just like our analysis does from a
Speaker 3: top down perspective. So the marring of the micro macro,
Speaker 3: I think keeps us a step ahead of most people.
Speaker 3: People can criticize us for various things, but they can't
Speaker 3: criticize us for I think we have done a better
Speaker 3: job of most of being in the right places within
Speaker 3: the equity market because of that micro macro marriage.
Speaker 2: So so delv here now in to say, I see
Speaker 2: MIT Sloan, I see Caltech, this whole cottage industry, including
Speaker 2: the University of Michigan and Arburg doing AI? Learn about AI?
Speaker 2: Morgan Stanley, what is the next three months, six months?
Speaker 2: Zeitgeist on AI? The momentum of it? Yeah?
Speaker 3: Well, here again we have a pretty I have an
Speaker 3: advantage because we have some analysts who are not only
Speaker 3: you know, very good in this space, and they have
Speaker 3: long tenure, like a lot of our tech analysts have
Speaker 3: been in the seat for ten to twenty years as
Speaker 3: we have continuity there, but the zeitgeist here is essentially
Speaker 3: now into the adoption phase. We've written a lot about this,
Speaker 3: which is that you know these tech cycles, you know,
Speaker 3: there's there's basically an enabler phase where you have a
Speaker 3: build out and the enablers benefit from that build out,
Speaker 3: and then the technology gets adopted by the early adopters.
Speaker 3: We're seeing that mainly by the hyperscalers quite frankly, because
Speaker 3: they're very fast with the big data sets. And then
Speaker 3: ultimately what we think is going to happen to the
Speaker 3: application layers being built now that will then be basically
Speaker 3: diffused out into the broader economy. And so that's where
Speaker 3: it gets really exciting. That's sort of the you know
Speaker 3: the Internet. When the Internet got exciting is when it
Speaker 3: starts to make everyday businesses more productive. So we have screens,
Speaker 3: we have lists, we've been publishing on this for.
Speaker 2: Quite a while.
Speaker 3: Those AI adopter stocks are massively outperforming, they have been.
Speaker 3: The market knows this. I think we've been ahead of
Speaker 3: that curve, and that's what we're saying, that's what we're
Speaker 3: looking for for the next twelve months is that this
Speaker 3: is where we're going to start to finally see some
Speaker 3: of the productivity benefits diffused across the broader economy. It
Speaker 3: won't be a straight line. There'll be doubts and fears
Speaker 3: and uncertainty, but it's a very positive story for the
Speaker 3: twenty twenty six earning story. And this is why stocks
Speaker 3: are not as expensive as people think, because you know,
Speaker 3: the market figured this out just.
Speaker 2: Like we did.
Speaker 3: I mean, you know, if we can figure it out, definitely,
Speaker 3: the market figured it out that we're going to see
Speaker 3: positive revisions lead to better earnings growth next year. Okay,
Speaker 3: and I think you know the economic data is backward
Speaker 3: looking and it just doesn't tell that.
Speaker 2: Stor denominator Paul comes up. Yeah, that's the whole thing. Yeah,
Speaker 2: it's amazing, Hey, Mike.
Speaker 4: In your research note, you're right, since the loads in April,
Speaker 4: the rally in stocks has been relentless.
Speaker 2: With no tradable pullbacks.
Speaker 4: What creates a pause and a bull market where you
Speaker 4: can maybe catch up a little bit.
Speaker 3: Well, we try to lay that out in our note
Speaker 3: this week.
Speaker 2: Right, it's just.
Speaker 3: Because we want to be well balanced here, but I
Speaker 3: want to go back and you know, that comment about
Speaker 3: the market being relentless and straight up in no pullbacks,
Speaker 3: that are those are the characteristics of a new ball market.
Speaker 3: That's what happens, and that's what looks like. This looks
Speaker 3: exactly like April, May, June, July twenty twenty. In fact,
Speaker 3: it's following a similar pattern. So I think that the
Speaker 3: things that could get us a consolidation in the third quarter,
Speaker 3: which we did start writing about, you know, a couple
Speaker 3: of weeks ago, we said there's going to be a pullback,
Speaker 3: it's going to be during a third quarter. We do
Speaker 3: want to win, but we do think there's three or
Speaker 3: four potential drivers. And at number one, revision factors could
Speaker 3: come down as the terror start to flow through, the
Speaker 3: cost of good soul, right, the more expensive inventory starts
Speaker 3: to flow through, and some companies will have margin pressure
Speaker 3: with that, or there'll be some demand destruction. That's one.
Speaker 3: I think. Number two is we know there's a trendspmens
Speaker 3: supply coming on the treasury issue inside, maybe the term
Speaker 3: premium kind of pushes out again and we get a
Speaker 3: backup in long rates. You know, the market now is
Speaker 3: negatively correlated to rate at this point, So that's another
Speaker 3: potential driver. And I think the one that is not
Speaker 3: so obvious but has been a big driver of the
Speaker 3: bull market in the New Bowl market is the dollar weakness.
Speaker 3: So dollar weakness has not only translated to better earnings
Speaker 3: growth for the multinationals, it's also added an incredible amount
Speaker 3: of liquidity to the tune of about eight trillion US
Speaker 3: dollars to global money supply. So if the dollar would
Speaker 3: strengthen here five six seventy eight percent, that could lead
Speaker 3: to a liquidity drain of some kind and a.
Speaker 2: Pullback of interesting fast I should point out mister Wilson
Speaker 2: talks about the lift off of twenty twenty that was
Speaker 2: precisely one hundred percent in twenty two months out to
Speaker 2: the end of twenty twenty one. Was the first leg
Speaker 2: of that lift. Absolutely extraordinary, Mike Wilson. I got to
Speaker 2: go to one of the dogs. I noticed it on
Speaker 2: the WEI screen today. Health, I mean, is it health
Speaker 2: of value trap? How does Morgan Stanley consider purchase of
Speaker 2: health equity?
Speaker 3: Well, it has been one of the worst performing consistently sectors.
Speaker 3: Even when the market was somewhat defensive in the first quarter,
Speaker 3: it didn't really do its job. And I think we
Speaker 3: could attribute this to a couple of different things. I
Speaker 3: would say, most notably, we have a new obviously head
Speaker 3: of the HHS, Robert Kennedy Junior, who you know, has
Speaker 3: been I would say quiet so far on what his
Speaker 3: main initiatives are going to be. And I think there's
Speaker 3: just sort of sort of some fear there that maybe
Speaker 3: it's going to be draconian and in terms of like
Speaker 3: for farmer companies and some of the some of the
Speaker 3: device some of the device companies and even the insurance companies.
Speaker 3: And I think, you know, it could be this simple
Speaker 3: time is that once once RFK Junior and the HHS
Speaker 3: roll out what they're going to do, I think they've
Speaker 3: they've said September they're going to be done with some
Speaker 3: of their studies, it could just be a sigh of relief.
Speaker 3: Maybe that's the catalyst here, But I mean, we're not
Speaker 3: going to probably upgrade the group until we see at
Speaker 3: least a bottoming out of relative range breath. We're just
Speaker 3: not seeing that, and so there's no need to go there.
Speaker 3: There's other things to do.
Speaker 2: Paul, I get good news, I'll check the schedule. Duke
Speaker 2: does not have privileged to lose to Michigan this year
Speaker 2: in football. It's a constructive first step well for Duke
Speaker 2: Mike Wilson, thank you so much. With Morgan Stanley.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live
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Speaker 2: And Stishamorosa with the Snow with Partners Group David Layton
Speaker 2: and running the charge their Partners Group of course doing
Speaker 2: a lot, particularly more out West in Switzerland as well.
Speaker 2: You're still based in New York, right, Yeah, Partners has
Speaker 2: a huge international perspective.
Speaker 5: That's right.
Speaker 6: We're global private markets firm. I've been around since nineteen
Speaker 6: ninety six. Zooke is the headquarters. Denver's the US Zuke
Speaker 6: that's how you pronounce it, zuk, Yes, outside of Zurich
Speaker 6: and also in Denver as well, but also a really
Speaker 6: big price and it's in New York as very could.
Speaker 2: Thrilled to have you back with this level of MROs
Speaker 2: of courage to stay in the market at different points.
Speaker 2: Is you feel that way right now where people there's
Speaker 2: so much geopolitical nervousness and all, and you're just saying,
Speaker 2: fight the good fight and stay in the market.
Speaker 6: Well, you know, Tom, one of the probably the best
Speaker 6: perspectives I've gotten, you know, through kind of my investment tenures,
Speaker 6: thinking about themes and think about the megatredza really change
Speaker 6: and shape the world figures to come. And if you
Speaker 6: align yourself with those and if you focus on what
Speaker 6: actually drives earnings or what drives profitability, it's focusing on
Speaker 6: things like artificial intelligence or digital transformation, or healthcare innovation
Speaker 6: or you know, new ways of living. So that's what
Speaker 6: sort of gives you the courage to stay through the
Speaker 6: next rate cut or rate hike or not, or through
Speaker 6: the next inflation report if you invest in the right
Speaker 6: kinds of companies in order to benefit from that innovation
Speaker 6: over time.
Speaker 4: One of the big themes that we've i guess become
Speaker 4: more accustoms over the last six months twelve months has
Speaker 4: been maybe this onshoing, reassuring, this reduced sense of internationalism.
Speaker 4: And for a company like yours that it is a
Speaker 4: global company in Zurich and in the US and all
Speaker 4: over the world, how do you guys think about the
Speaker 4: fact that this may be a less global economy than
Speaker 4: it was one, two, three, five years ago.
Speaker 6: You know, I don't know if that is a completely
Speaker 6: right assumption to make that this is a less global economy.
Speaker 6: I don't think the objective is really to sever all
Speaker 6: trade ties. I think the objective is really to rethink
Speaker 6: the trade going forward and also to sort of set
Speaker 6: out new rules of how the trade is going to
Speaker 6: be done. So, if that's the base case scenario, as investors,
Speaker 6: we have to think about how to corporations, how to consumers,
Speaker 6: how do we want to adjust to that? And you know,
Speaker 6: speaking of adjustment, this is why I call this a
Speaker 6: quarter of adjustment. This is the time where companies are
Speaker 6: going to decide whether they're going to pass through the
Speaker 6: tariff cost to the consumer. Where they going to do?
Speaker 2: What do you see there? What's your update?
Speaker 6: We see a combination. I think the vast majority of companies,
Speaker 6: about seventy five percent of companies are saying that they're
Speaker 6: going to pass through the cost of the consumer. Maybe
Speaker 6: only twenty five percent of those say it's one hundred
Speaker 6: percent of the pass through. Some of it will be
Speaker 6: absorbed by the profit margin, which is near a record.
Speaker 2: Anna stj Morosa with this partners Group, and again thank
Speaker 2: you for joining us on You're commute this morning across
Speaker 2: the nation in the office at home in Zoos, Switzerland.
Speaker 2: YouTube is the way our new distribution has subscribed to
Speaker 2: Bloomberg Podcasts. We protect the copyright of all of our research.
Speaker 2: They email and send us am Anastage's note no get
Speaker 2: it from partners Group. I love how you say this
Speaker 2: focus on what you can control. Describe that for equity
Speaker 2: market investments right right now.
Speaker 6: Well, the first thing you can control is the kinds
Speaker 6: of companies you invest in, and what are the profit margins,
Speaker 6: What is the starting point for those profit margins, and
Speaker 6: what is the endpoint what you're trying to achieve. So
Speaker 6: one thing we can control is actually growing that profitability
Speaker 6: and growing the profit margin. You know, it's driving operational efficiencies,
Speaker 6: it's perhaps infusing AI, machine learning and other productivity tools
Speaker 6: to grow those margins. It's building platforms rather than you know,
Speaker 6: let's say one product business. So that's one thing you
Speaker 6: can control. You know. The other thing you can control
Speaker 6: is you can pivot into the sectors where you do
Speaker 6: naturally have faster earning growth because it is not a
Speaker 6: company that's aligned with the old economy, but it's a
Speaker 6: company that's aligned with a new economy. So that's why
Speaker 6: we do look to things like data centers. That's why
Speaker 6: we do look to the build out of the energy
Speaker 6: production as well. So those are the things you can control.
Speaker 6: You can control leverage, how much do you use, and
Speaker 6: how do you know pull that lever based on what
Speaker 6: interest rates are. So those are some of the main.
Speaker 4: Things outside of tech, which is obviously driving this market.
Speaker 4: Are there areas outside of technology that you guys find interesting?
Speaker 6: Yes, you know, I think one of the misnomers in
Speaker 6: the markets right now is that just because there's not
Speaker 6: a big focus on sustainability from the current US administration,
Speaker 6: and this is not a theme that's going to be there.
Speaker 6: And you know, I very much think that sustainability is
Speaker 6: a theme that's going to is here to stay because
Speaker 6: it's really about how can we be the most efficient
Speaker 6: with our natural resources, minimize the damage to the environment,
Speaker 6: also make sure everybody has access to basics, which basic
Speaker 6: since today days and age means a data center, power
Speaker 6: by some sort of electricity production. So this, let me
Speaker 6: interrupt this morning.
Speaker 2: Apollo Funds comes out and says we're buying data centers
Speaker 2: and they're buying stream data centers. Yeah, this is Joseph
Speaker 2: Jackson and Trevor Mills that Apollo Partners, and that's exactly it.
Speaker 2: Where private markets are coming in, that's right to finance
Speaker 2: these this huge capital investment. Right.
Speaker 6: Well, it's a great point, and here's the reality. Everybody's
Speaker 6: been talking about data center for a while, and yet
Speaker 6: if you look at the occupancy rates for data centers,
Speaker 6: they are near record highs and we still think that
Speaker 6: sort of the peak occupancy of data centers is still
Speaker 6: a few quarters away. So that means for the time
Speaker 6: being you still need to build out additional capacity and
Speaker 6: supply demand for data centers is still going to be
Speaker 6: tied for a period of time, so that that gives
Speaker 6: you the ability to control the price and also the
Speaker 6: investment has to continue as well. And by the way,
Speaker 6: just another point to add on that, you know, just
Speaker 6: real quick, data centers are thought right now for you know,
Speaker 6: to be used for cloud and also training AI models.
Speaker 6: But you know, Tom, the next phase of this of
Speaker 6: data center growth is really the infront stage of it
Speaker 6: and applying those train models into another use case.
Speaker 4: Talk to us about valuation in this market. It's tough
Speaker 4: here because it if you just kind of look at
Speaker 4: the S and P of five hundred, it's expensive. But
Speaker 4: if you make start making adjustments for some of these
Speaker 4: technology companies, the mag seven of the world, maybe you
Speaker 4: can make a case it's not that expensive. How do
Speaker 4: you guys think about that.
Speaker 6: I mean, it's true that Max seven versus the rest
Speaker 6: is a very different scenario. But I will say that
Speaker 6: even the cyclical sectors. For example, I looked at industrials
Speaker 6: the other day, and even industrials then discount to the
Speaker 6: S and P five hundred or for a machinery that
Speaker 6: was actually the case, the discount has narrowed. So I think,
Speaker 6: you know, broadly speaking, valuations in public markets have got
Speaker 6: a long way in a short period of time. Having
Speaker 6: said that, in private markets, that's where we are still
Speaker 6: finding cheaper valuations. And if I look at the s
Speaker 6: and P five hundred EV to Ibada, we're probably close
Speaker 6: to seventeen seventeen and a half times. If I look
Speaker 6: at private markets, we're about twelve point two times for
Speaker 6: US EV to Ebadi in private markets. So that's why
Speaker 6: we're obviously quite focused on scapture evaluation in private mark.
Speaker 2: Just may be delicate. I don't want you putting in
Speaker 2: jail and zoo Switzerland. But okay, but there's a lockup
Speaker 2: to private markets are you seeing? I mean there's an
Speaker 2: article in Carlisle this morning where they're jettising finally a
Speaker 2: lot of properties in the buoyancy that we're in right now.
Speaker 2: But do you see liquidity within private markets? It makes
Speaker 2: up the liquidity penalty going from ev to ebit up.
Speaker 6: To down right Well, liquidity is a big concern I
Speaker 6: think one in private markets investing, and I think one
Speaker 6: of the things that Partners Group has done for a
Speaker 6: long period of time is managed that liquidity for clients
Speaker 6: in an evergreen solution. And what I mean by that,
Speaker 6: and what I mean by that is clients have the
Speaker 6: ability for quarterly liquidity if they need to. And the
Speaker 6: reason we're able to do that is because not only
Speaker 6: do we focus on direct control investments, but also secondary
Speaker 6: co invests and that really you know, having managed this
Speaker 6: for about sixteen years, it's been multiple cycles and liquidity
Speaker 6: has been there for clients.
Speaker 2: Can I do it? Audible? Mentioned evergreen solution? Do you
Speaker 2: have a real Christmas tree or a fake Christmas tree.
Speaker 6: I always get a real one.
Speaker 2: Yeah, the biggest, the right answer, the biggest argument. Me
Speaker 2: and John farrellhead I go over to Pharaohs. He's got
Speaker 2: the fake Christmas tree with the light things filling around
Speaker 2: at the bottom. I'm like, John, it's an American. You
Speaker 2: gotta have a real tree. Okay. So that's that's our
Speaker 2: evergreen solution here, Paul continue, I got way laid there.
Speaker 4: Private credit it's been such a big part of the
Speaker 4: alternative investment theme over the last certainly last fifteen years,
Speaker 4: I guess since a financial crisis when it really got big.
Speaker 4: How do you guys think about private credit alongside your
Speaker 4: private equity and your other businesses.
Speaker 6: Sure, it's a really important part of the solutions suite.
Speaker 6: And you know, look, if you think about a bank
Speaker 6: share of private credit of lending, it has stepped down
Speaker 6: from about seventy four percent back twenty some years ago
Speaker 6: to about twenty five percent depending on the quarter. And
Speaker 6: it's been the private credit providers that have stepped in
Speaker 6: and provided the liquidity and plugged in that gap. So
Speaker 6: now about seventy five percent of the market is actually
Speaker 6: driven by private credit. So look from a market perspective.
Speaker 6: You know, whether we get a rate cut or not
Speaker 6: from the FED, I will say the excess spread that
Speaker 6: you get from in direct lending, for example, of on
Speaker 6: average about five hundred basis points is quite attractive, you know,
Speaker 6: especially rates keep heading lower private credit screen as well.
Speaker 2: In the time left, I got to get some SPX
Speaker 2: vision from you. How far up forward are you in
Speaker 2: the stock market? How do you frame six end of
Speaker 2: the year or even twelve months forward right now?
Speaker 6: Look, I think we're in for a consolidation quarter this quarter,
Speaker 6: at least until September seventeenth, which is of course the
Speaker 6: FOMC decision. And I say that because we're going to
Speaker 6: hear a lot about the tariff impacts on net profit margins,
Speaker 6: and maybe some of that is going to be offset
Speaker 6: by well, the label market is weak, therefore the FED
Speaker 6: is going to cut, So I expect choppiness. But as
Speaker 6: I think about the fourth quarter and into twenty twenty six, Tom,
Speaker 6: I think, so what doesn't get talked about enough is
Speaker 6: that we did pass a tax built that's quite favorable
Speaker 6: for the consumer, but it's also quite favorable for businesses
Speaker 6: as well. So whether it's one hundred percent R and
Speaker 6: D expensing that has now been made permanent, or one
Speaker 6: hundred percent depreciation that has also been made.
Speaker 2: This is underplayed. Yeah, stimulus, the stimulus impact, you know,
Speaker 2: the cynics would say it's clearly around Republican re election
Speaker 2: twenty six and the president to twenty eight. But the
Speaker 2: answer that the stimulus we're living right now is tangible.
Speaker 6: It is tangible into twenty twenty six. We're not going
Speaker 6: to see much of it this year, but into twenty
Speaker 6: twenty six. And Tom, you know how the markets work,
Speaker 6: They look forward, So I think that'll be an important
Speaker 6: story in the fourth quarter.
Speaker 2: So, but it's still not out of the triple leverage
Speaker 2: all cash. I know how the markets work exactly one marvel.
Speaker 4: So, Anastasia, how's your how's your job get to change?
Speaker 4: Do you think if at all being part of the
Speaker 4: Partners Group now, which is such a large alternative asset
Speaker 4: manager globally with.
Speaker 6: The other right, Well, it's certainly a privilege to be
Speaker 6: a Partner group, and the role is really to help
Speaker 6: our clients think about how does the macro how are
Speaker 6: the macro forces impact your investment portfolio, specifically from the
Speaker 6: standpoint of allocating to private markets. So what is this
Speaker 6: combination of inflation to rates, to growth to tariffs mean
Speaker 6: for investing in private equity? Where do we find some
Speaker 6: of the best opportunities within directs or secondaries? What does
Speaker 6: this mean for private credit, real estate, royalties, investment and more?
Speaker 6: And you know, the other big conversation is that I
Speaker 6: think a lot of clients understand and want to allocate
Speaker 6: to private markets, but for a lot it's still a
Speaker 6: consideration of how and how much. So helping advise clients
Speaker 6: on the portfolio construct to private markets is an important
Speaker 6: one as well as as.
Speaker 2: You think, is someone at your Optimism American Economic Experiments
Speaker 2: and ross with the Partners Group.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarpe and Android Atto
Speaker 1: with the Bloomberg Business App. You can also listen live
Speaker 1: on Amazon Alexa from our flagship New York station, Just
Speaker 1: say Alexa play Bloomberg eleven thirty.
Speaker 2: Stephenoff joins down cio equities at Federator or Medicine. They've
Speaker 2: got different approaches there, but all you need to know
Speaker 2: is looking at the Federated Growth Fund. It's under the
Speaker 2: the othean umbrella, as we call it. I mean it's
Speaker 2: it's sort of doing okay. Three year ninety fifth percentile,
Speaker 2: five year ninety ninth percentile. They're off the market today,
Speaker 2: not too bad. And this is all the growth juggernaut,
Speaker 2: and this is what Steve aut has acclaimed for worldwide.
Speaker 2: I want you to explain, in this unique year, how
Speaker 2: you approach equity investment knowing, like baseball twenty five or
Speaker 2: twenty six or twenty eight percent of the stocks will
Speaker 2: go up and the rest don't forget the what stock
Speaker 2: to pick? How do you choose not to own a
Speaker 2: stock in the S and P five hundred?
Speaker 5: Well, I think it's our time horizon. That's a little different, right.
Speaker 5: The most traders today are focused on day to day movements.
Speaker 5: We're too big to even think about it that way anyway,
Speaker 5: But I think it's not really the path to success
Speaker 5: in the investment markets. We tend to look at a
Speaker 5: longer term horizon, and that leads us to look through
Speaker 5: some of the noise. What's interesting to me. I think
Speaker 5: one reason we're having a pretty decent year here and
Speaker 5: we did last year is the news cycle has really
Speaker 5: shortened up, and so the folks chasing around the news
Speaker 5: cycle are like chickens with their heads cut off, getting
Speaker 5: whipsawed left and right. I mean, if you were following
Speaker 5: the news cycle in April.
Speaker 2: You went to cats. Is that what hedge funds do?
Speaker 2: I don't want to speak to the.
Speaker 5: Hedge funds broadly, but certainly that's one of the ways
Speaker 5: they try to make money.
Speaker 2: We have a lot of folks doing it.
Speaker 5: Some of them do a good job at it, so
Speaker 5: I'm not knocking the hedgehuns, but we tend to look
Speaker 5: longer term and right now. That's helped us a lot
Speaker 5: because one reason we were more optimistic in the spring
Speaker 5: was to us, the gap between the soft data and
Speaker 5: the hard data was pointing to you know, we are
Speaker 5: in a little bit of a slowdown here, but we
Speaker 5: thought coming through it, things would get better. And once
Speaker 5: we got this uncertainty behind us this summer and here
Speaker 5: we are right on schedule, you get a kind of
Speaker 5: bounce effect just from the uncertainty lifting. Not to mention
Speaker 5: you know, the the incentives to further investment through the
Speaker 5: tax cut, You've got the deregulation thing coming through, and
Speaker 5: you know, fortunately the Fed is looking backward, so they're
Speaker 5: going to be cutting.
Speaker 2: Well, we got to remind ourselves. One, you're trailing Nastack
Speaker 2: up twenty eight percent, SMP five hundred and twenty percent,
Speaker 2: now up thirteen percent. How many of our listeners and viewers,
Speaker 2: including me, right understand looking back twelve months we got
Speaker 2: a double digit to zero. Yep, that's amazing, exactly.
Speaker 5: Right, and often, by the way, that's a precursor of
Speaker 5: a pretty decent next twelve months if.
Speaker 4: You look at the data, so Steve, one of the
Speaker 4: concerns in particularly in the equity markets is a concentration
Speaker 4: risk here. We've got it in the mag seven or
Speaker 4: whatever you want to call it. So much of the performance,
Speaker 4: so much of the valuation, is concentrated in a handful
Speaker 4: of names, and people like Torston, slock Over Topollo just
Speaker 4: kind of call out, well, we haven't seen that very
Speaker 4: often in the past, and when we did see it
Speaker 4: late nineties, it wasn't a good thing, do you guys.
Speaker 5: Late nineties was a completely different thing.
Speaker 2: Though.
Speaker 5: If you look at the share of the top ten
Speaker 5: versus the share of earnings of the top ten on
Speaker 5: market gap, it's a flip flop of the late nineties, right,
Speaker 5: late nineties, we didn't have any earnings. These top seven
Speaker 5: companies are terrific companies with enormous free cash flow that
Speaker 5: we think are reasonably valued, and within them even there,
Speaker 5: what we're calling for is, as you think, you know,
Speaker 5: is a rotation into the broader market. Okay, and that's
Speaker 5: going to help our stockbreckers, by the way, but you
Speaker 5: know that rotation has been slowed down by concerns that
Speaker 5: the world was going to end with all the tarret
Speaker 5: stuff and everything else. Now that it's not ending, I
Speaker 5: think those stocks are going to start and that's what's happening.
Speaker 5: We're already seeing the market broadening out here that the
Speaker 5: mag seven have had a good run. We like within
Speaker 5: that even some rotation like a Google as an example stock,
Speaker 5: we like great cash flow generator training at about seventeen
Speaker 5: eighteen times earnings for what you're getting.
Speaker 2: You know, Paul, you mentioned this the federated growth and
Speaker 2: this is the MTT platform out of Milwaukee. Forty seven
Speaker 2: point four percent in the top ten stocks. Yep. That's
Speaker 2: so way from the textbooks exactly studied years ago.
Speaker 4: So see, are there sectors that screenwall for you these days?
Speaker 2: Are there factors that screen wall for you these things.
Speaker 2: That's a really important question about it. We haven't asked
Speaker 2: that in ages. Yeah, Saunders questions exactly. Factors.
Speaker 5: Well, our you know, our MTT model that we use
Speaker 5: is multi factored, and it's it's very complicated and probably
Speaker 5: too complicated, but it really tries to imitate the way
Speaker 5: a human brain works in a way i'd call it.
Speaker 5: We don't call it artificial intelligence, call it machine learning.
Speaker 2: This is after the third or fourth beer.
Speaker 5: Continue, But it looks for combinations of things that you like,
Speaker 5: and you know, we point to some combinations of things
Speaker 5: that look pretty good here to us. I mean, if
Speaker 5: you look at companies that are more cyclical in their
Speaker 5: nature and their backdrop and then have good balance sheets
Speaker 5: in valuations that are still pretty cheap, those are the
Speaker 5: stocks that we kind of like here. Regional banks, some
Speaker 5: of the out of favor technology companies, you know, some
Speaker 5: of the industrial sectors.
Speaker 2: Defense defense stocks have had pretty good runs.
Speaker 5: So but you have to look underneath the surface to
Speaker 5: find ones that makes sense. But yeah, it's those kind
Speaker 5: of things now a little more of a value tilt,
Speaker 5: perhaps even within growth like Google's a growth stock, but
Speaker 5: with a kind of value tilt.
Speaker 4: To it valuation. I'm sure you get pushed back from
Speaker 4: your clients a lot about point this market looks expensive here.
Speaker 4: How do you respond to that? You say, hey, if
Speaker 4: you back out these handful of aims, the market's not
Speaker 4: that expensive.
Speaker 2: That's exactly how we do it.
Speaker 5: In fact, what we started doing about a year ago
Speaker 5: was we started calculating what a fair value on the
Speaker 5: S and P would be if you did the math
Speaker 5: in two parts and then combined it. These big cash
Speaker 5: flow generators that are near monopoly businesses that are in
Speaker 5: growth spaces, we think you add that all up, they're
Speaker 5: probably worth like a twenty five multiple.
Speaker 2: People.
Speaker 5: Heuristic on what the market is worth is based in
Speaker 5: a world where the market average was fifty percent cyclical
Speaker 5: industrial type companies, and now that share of the market's
Speaker 5: probably about thirty percent. And you've got these big casual generators.
Speaker 5: So when you put them out there at twenty five
Speaker 5: and you say, okay, call the rest of the market eighteen,
Speaker 5: you get to a fair multiple on the market of
Speaker 5: around twenty one and a half. That's what we've been
Speaker 5: using in all our targets that have more or less
Speaker 5: been working for us. You know where we're closing in
Speaker 5: on our target for this year now, which at one
Speaker 5: time seemed crazy, but.
Speaker 2: You got to get this in over with a big
Speaker 2: share we purchased today. How's use the cash going among
Speaker 2: the anointed? Are they actually giving it back and share
Speaker 2: purchase and dividend. We're seeing a lot.
Speaker 5: Of that right now, Tom, And that's another reason that
Speaker 5: we're bullsh on the market. Companies are throwing off a
Speaker 5: lot of cash here and we're in that part of
Speaker 5: the cycle here. You're seeing that, and the buybacks are
Speaker 5: supporting seasons.
Speaker 2: Am I right? Forty percent of free cash flows. Some
Speaker 2: of these companies are paying out.
Speaker 5: In our dividend fund, We've got companies paying out sixty
Speaker 5: five seventy percent. We like to see that in slower
Speaker 5: growing companies and the dividend fund, but you know, we
Speaker 5: like to see.
Speaker 2: Those big payoffs. Steven O, thank you so much. Thank
Speaker 2: you federator being with us today.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple, Corplay and Android
Speaker 1: Auto with the Bloomberg Business app. You can also watch
Speaker 1: us live every weekday on YouTube and always on the
Speaker 1: Bloomberg terminal.
Speaker 2: Douglas Holt's Eichin was a huge value add for years
Speaker 2: and years. For some reason, over the last quarters we
Speaker 2: have not had the expertise at Douglas Holtz econ on
Speaker 2: the show. We're thrilled and he could join us in
Speaker 2: the American Action Forum. His public service with Senator McCain
Speaker 2: years ago a GOP slant, yes, but always just exceptional
Speaker 2: scholarship out of Dennison in prison. Doug, it's been way
Speaker 2: way too long. Thank you so much for joining today.
Speaker 2: How far removed, Douglas Holtziken, it's just traditional Republican economics
Speaker 2: and Republican labor economics. How far removed is it from
Speaker 2: President Trump?
Speaker 7: This is an enormous shift in the Republican Party. I mean,
Speaker 7: it's almost unrecognizable from twenty years ago. And the characteristic
Speaker 7: of this area is that both parties are interested in
Speaker 7: using the power of the government is a cudgel for
Speaker 7: their purposes. And that's that's not a limited government personal
Speaker 7: freedom approach, not at all.
Speaker 2: What is Kevin Asset doing. I mean, I understand Pennsylvania
Speaker 2: doesn't have the quality of Princeton to the far far Norris,
Speaker 2: but you know you and I know Kevin ass and
Speaker 2: as a legit macro economist, how is he carrying water
Speaker 2: for the president? How do you see that? Douglas Holt Eacon.
Speaker 7: Uh, you know, I think that's a question you have
Speaker 7: to ask Kevin. I don't understand a lot of the
Speaker 7: Trump administration messaging on their policies. I certainly don't understand
Speaker 7: the strategy and their policies, and and if Kevin understands it,
Speaker 7: I'd like to understand it better.
Speaker 1: Doug.
Speaker 4: We we had some fireworks at the Bureau Labor Statistics
Speaker 4: last week when the jobs data came out here. Can
Speaker 4: you put that in context based upon your experience?
Speaker 7: Well, you know, the assertion by the President was that
Speaker 7: the commissioner rigged the data, and there's simply no evidence
Speaker 7: of rigging the data, and there's no opportunity actually for
Speaker 7: the commissioner to alter the data in anyway if you
Speaker 7: look at the procedures that are followed. So it's a
Speaker 7: baseless assertion. It's something that I think it is obviously
Speaker 7: detrimental to the institution. It undermines to some extent credibility
Speaker 7: of the government's data, and you don't like to see that.
Speaker 7: And it was simply the White House trying to change
Speaker 7: the subject from the substance of the data, which is
Speaker 7: really poor jobs numbers over the past three months, to
Speaker 7: firing an official who's a holdover from the Biden administration.
Speaker 7: So it's an old playbook the White House. This White
Speaker 7: House has used a lot. I do think it has
Speaker 7: brought to the surface something that's really important, which is
Speaker 7: the diminishing potential quality of the data at the BA
Speaker 7: and the BLS. And you know, now, I think the
Speaker 7: general public understands that response rates have fallen, that the
Speaker 7: sampling sizes have gone down, and that initial listments are
Speaker 7: as firm as they might be. So now the questions,
Speaker 7: will anyone get behind an effort to improve those data
Speaker 7: collecting efforts and strengthen those statistical agencies.
Speaker 4: That's a good point, Doug. I mean it kind of
Speaker 4: seems almost antiquated, you know, going out and doing a
Speaker 4: survey in a world of digital.
Speaker 2: Opportunities.
Speaker 7: Here, can I say something about that?
Speaker 2: Paul?
Speaker 7: Yeah, you know a lot of people brought this up,
Speaker 7: you know, like you should be tapping into the ADP
Speaker 7: or other payroll processors, but at some point you actually
Speaker 7: have to do a census of things. So that you
Speaker 7: understand what the weights are going to be on the
Speaker 7: ADP data. They sends it over sample large firms. So
Speaker 7: there is at some point the antiquated issue of going
Speaker 7: figuratively door to door and finding out what's out there,
Speaker 7: knowing what the relative composition of the labor market is.
Speaker 7: And that's an expensive and time consuming process, but it
Speaker 7: needs to be done, be done better.
Speaker 2: The hallmarkt holds he can work, folks, are single sentences
Speaker 2: that make you stop. May I quote the non education,
Speaker 2: non health private sector has lost forty six thousand jobs
Speaker 2: over the past three months. Good morning, Nancy Lazar, who's
Speaker 2: been brilliant on this. I don't think Doug that's understood
Speaker 2: that private sector employment is terrible X the gifts of
Speaker 2: health and education.
Speaker 7: It's dead in the water and has been. I've been
Speaker 7: confused by this sort of positive reactions to the recent
Speaker 7: labor market reports because you know, even before the revision,
Speaker 7: when we got one hundred and forty seven thousand jobs
Speaker 7: in the previous employment report, seventy odd thousand of them
Speaker 7: were in state in local governments. Of the remaining seventy odd,
Speaker 7: fifty eight thousand were in health. It's the only place
Speaker 7: that was generating any jobs. Everything else is dead in
Speaker 7: the water. So when I look at the labor market,
Speaker 7: I see a labor market where no one gets fired.
Speaker 7: That's great, but no one gets hired either. It is
Speaker 7: at a standstill, and that's really quite wrong.
Speaker 2: So so how to fold that over to FED policy?
Speaker 5: Here?
Speaker 2: I mean, go to sixty thousand feet if you will.
Speaker 2: I brought it up today for the first time. Are
Speaker 2: we at a point now where this is so emergent
Speaker 2: that in one week or two weeks we're going to
Speaker 2: be talking about a fifty B cut September seventeenth.
Speaker 7: I don't think we do see the basis for fifty
Speaker 7: bas points because you know, the FED has a dual
Speaker 7: mandate and and the Trump tariffs have really put the
Speaker 7: FED in the crossairs because the inflation pressures are there,
Speaker 7: the labor markets, uh, you know, really at a standstill.
Speaker 7: So the mandates are telling you to do different things,
Speaker 7: and how you balance that is an incredibly hard job.
Speaker 7: People people put different weights on, you know, inflation versus unemployment.
Speaker 7: They do, and we don't know how quickly this is
Speaker 7: going to work.
Speaker 2: So Paul I got to interrupt Doug. This is too
Speaker 2: important Paul get one more in here, But does it
Speaker 2: does Holts? He can look like he could be a
Speaker 2: fed governor.
Speaker 7: Oh, I mean that, I promise you he does not
Speaker 7: look like he's going to be a fed.
Speaker 4: So Doug, let's let's just kind of put a bow
Speaker 4: on this with a discussion of tariffs here. I mean,
Speaker 4: tariffs are here. They are here to stay. It looks
Speaker 4: like and it's whether it's fifteen, eighteen twenty percent on
Speaker 4: an average basis, how do you think that's going to
Speaker 4: play out through this economy over there come six twelve,
Speaker 4: eighteen months.
Speaker 7: So I think number one, you have the right time frame.
Speaker 7: People have gotten too accustomed to the notion that a
Speaker 7: pandemic or financial crisis hits the mainStreet economy, and we
Speaker 7: see real quickly what's going on. This is going to
Speaker 7: evolve over quarters and years, not weeks and months, and
Speaker 7: so we really haven't seen the impact yet. It is
Speaker 7: unmistakable that the terrorists of this size, so roughly three
Speaker 7: hundred to three hundred and fifty billion dollars at annualized rate,
Speaker 7: that's a very big tax increase. It is going to
Speaker 7: put upward pressure on prices, no way around it. And
Speaker 7: it's going to take purchasing power away from consumers, and
Speaker 7: that's going to slow the economy. So at some point
Speaker 7: over the that six to twelve month horizon, we are
Speaker 7: going to pay the price in inflation and slower employment growth.
Speaker 7: And we're starting to see that, and there's no way
Speaker 7: out of that. The only question is how big will
Speaker 7: it be and how fast will it happen?
Speaker 2: You know, as blue Tie as sort of a governor,
Speaker 2: Blue Tie, Sure, I think it is solid. Second, thank
Speaker 2: you so much, wonderful. It's on way too long. Doug.
Speaker 2: We got to get you on your numerous times before.
Speaker 2: Jackson hold Douglas oltz econ his public service. It's CBO.
Speaker 2: He's a president of the American Action Forum.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto
Speaker 1: with the Bloomberg Business app. You can also listen live
Speaker 1: on Amazon Alexa from our flagship New York station, Just
Speaker 1: say Alexa Play Bloomberg. Eleven thirty Lisa Mateo.
Speaker 2: Fired up for the newspaper. She said, at three am,
Speaker 2: what are you starting with today?
Speaker 8: Okay, big sports news, So let's break this down. Okay,
Speaker 8: so the NFL is going to sell most of its
Speaker 8: media business to Walt Disney. This is in exchange for
Speaker 8: a ten percent steak in the ESPN Sports Networks. Okay,
Speaker 8: So ESPN, you know, jointly owned by Disney, they have
Speaker 8: about an eighty percent steak, and also Hirst Communications they
Speaker 8: have a twenty percent steak.
Speaker 4: And what it.
Speaker 8: Includes, it's the NFL Red Zone that's a subscription based
Speaker 8: highlight service, the NFL network, cable chat, and also Disney
Speaker 8: is going to get more air, more NFL games. ESPN though,
Speaker 8: is getting ready to launch this new streaming service that's
Speaker 8: going to cost about thirty dollars a month. So the
Speaker 8: timing on this is pretty good. On top of that, though,
Speaker 8: the Wall Street Journal actually just put it on an
Speaker 8: article that says Disney bought exclusive rights to manywwees high
Speaker 8: profile events for one and a half, just one hour.
Speaker 2: The Sweeten cam is going nuts right now. You're over
Speaker 2: there squirm and yeah, I mean, is this the future?
Speaker 4: Well, it's a great move I think by ESPN and
Speaker 4: Disney just to cement its relationship with the NFL. With
Speaker 4: all the competition that is likely to come in for
Speaker 4: distribution from Amazon than all the other streamers.
Speaker 2: It's just kind of real journalistic independence. Yeah, I'm sure
Speaker 2: there will be. It's fine.
Speaker 4: They're already tied at the hip. I mean, they're already
Speaker 4: tied at the hip anyway. This just kind of codifies
Speaker 4: it and again in a world where there's going to
Speaker 4: be more and more competition to get that NFL programming,
Speaker 4: which is the most valuable in the world. ESPN's now
Speaker 4: got a really good position, I think.
Speaker 2: So we'll see.
Speaker 8: I think. So I look at it and I'm like, okay,
Speaker 8: maybe I can cut the cable cord now because all
Speaker 8: my husband watches cable furs for the sports part of it.
Speaker 5: In the NFL.
Speaker 8: Seppens it's sports.
Speaker 6: It's huge.
Speaker 2: Okay.
Speaker 8: So this next story I thought of you, Paul, because
Speaker 8: I remember you said you go to resorts and at
Speaker 8: the end of it, you get this big bill, right,
Speaker 8: all the kids, smoothies like everything. So more people are
Speaker 8: enjoying these all inclusive resorts so where everything is included
Speaker 8: so you don't get the big bill at the end.
Speaker 8: And hotels like Hyatt Marriott, they're trying to get the affluent, yes,
Speaker 8: the customers. It's going to run you maybe about one
Speaker 8: thousand dollars a night for you know, the first year.
Speaker 2: Yeah, I did it, and I kept very careful track
Speaker 2: and I decided it was fair. It was worth it.
Speaker 2: It was yeah, borderline worth it. But yeah, the weight
Speaker 2: of not having the smoothie bill at the end, or
Speaker 2: excuse me, the rum punch bill exactly.
Speaker 4: So we're all and we do it in a room
Speaker 4: every year.
Speaker 2: So this is build you, this is buildings.
Speaker 8: So it is okay. So you have like Marriott, for example,
Speaker 8: they just bought their first all inclusive W resort, Punta
Speaker 8: Khana and the Dominican.
Speaker 2: Republic check it out.
Speaker 8: Last year they had their first Marriout branded in Cancun.
Speaker 8: Even Hiatt they have about ten all inclusive brands. So
Speaker 8: it's this is something that's really starting to build. But
Speaker 8: they're gearing it like they're putting it on steroids. You know.
Speaker 8: It's like, you know, a thousand.
Speaker 6: Dollars for two people.
Speaker 8: At that price, I don't. I don't know if I would.
Speaker 8: I don't eat that much.
Speaker 4: Salary every day.
Speaker 2: Are you do you go to a resort like that?
Speaker 2: Are you doing pilates?
Speaker 3: You have to?
Speaker 8: I go to the gym every day when I.
Speaker 2: Go on vacation.
Speaker 8: Next the people are okay, this one's going to get
Speaker 8: you fired up to Okay. So this is Microsoft. They're
Speaker 8: getting this more strict return to the office policy, sources
Speaker 8: telling Business Insider employees could be coming back more often. Okay,
Speaker 8: so right now they let employees work mostly remote as
Speaker 8: much as fifty percent of the time. Sometimes they're a
Speaker 8: little bit flexible. But the new policy is going to
Speaker 8: require them to work in the office at least three
Speaker 8: days a week.
Speaker 2: Oh boy, what Business Insiders Holly doing a great job
Speaker 2: on this with at Yes.
Speaker 8: Yes they do.
Speaker 2: They get there's just like you know, admirable Boom in
Speaker 2: the in the wind on Mary Poppins. There's something going
Speaker 2: on in August this year.
Speaker 8: Yeah, but it could because you've seen like a lot
Speaker 8: of especially tech companies starting to do this, like getting
Speaker 8: the more back to the office, being a little bit
Speaker 8: more strict.
Speaker 5: But hey, three days, I don't know.
Speaker 2: Listam tato, Thank you so much the newspapers this morning.
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