Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along
Speaker 1: with my co host of Bonnie Quinn. Every business day
Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,
Speaker 1: along with essential market moving news. Kind the Bloomberg Markets
Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,
Speaker 1: and on Bloomberg dot com. It is time for Bloomberg Opinion.
Speaker 1: This morning. We're joined by Bloomberg Opinion columust Max Neson.
Speaker 1: He covers all things biotech, farmer and healthcare. Max, You've
Speaker 1: got a column now which I just read talking about Kodak.
Speaker 1: I'm looking at the shares of Kodak here up twelve
Speaker 1: percent today, um up seven year to date, up over
Speaker 1: the trailing twelve months, and now has a market cap
Speaker 1: of one point six three billion. I didn't even know
Speaker 1: this company was still in existence as a public equity.
Speaker 1: What's going on with Kodak? Uh? So, what's going on
Speaker 1: driving this this incredible stuff? Brice Increase is a deal
Speaker 1: alan from from the government which is intended to help
Speaker 1: them kind of make a transition into into a new business,
Speaker 1: uh which is the making of of drug product of
Speaker 1: of active pharmaceutical ingredients part of kind of an ongoing
Speaker 1: policy effort to bring more of that production back into
Speaker 1: the United States. UM, which you know that that business
Speaker 1: is really currently very dependent on China and India. I'm
Speaker 1: in addition to the sort of political leanings of the
Speaker 1: current administration. You know, there are potential national security concerns
Speaker 1: about disruption, there have been quality control issues, so you know,
Speaker 1: it's not a not an insane policy move. But but
Speaker 1: the thing that's a little bit more difficult to understand
Speaker 1: is why Kodak and secondly, um, why why this loan
Speaker 1: well significant would lead to such an enormous increase in
Speaker 1: the stock Because this is a company that that, while
Speaker 1: it has chemical experience, is new to this business, which
Speaker 1: is a very difficult, very low margin commodity business. It
Speaker 1: moved out the United States for a reason because it's
Speaker 1: much cheaper to do it elsewhere. It's hard to be
Speaker 1: cost competitive here. So the imagined future where you know,
Speaker 1: code Act does this sustainably and profitably seems very unlikely
Speaker 1: to mean, I just want to bring it to our
Speaker 1: listeners attention that several outlets and now reporting that Hermann Kine,
Speaker 1: the former presidential candidate has died from COVID nineteen once again,
Speaker 1: Herman Caine has died from COVID nineteen. Will bring you
Speaker 1: more details when we get them. But another death among
Speaker 1: the one d and fifty thousand plus deaths that we
Speaker 1: were counting every day, Max. How concerning is that that
Speaker 1: we are seeing numbers rise again in the places like
Speaker 1: New Jersey, which had tried to sort of Tampa down
Speaker 1: and had managed to do so. It's it's very concerning,
Speaker 1: and you know, unfortunately maybe inevitable accent uh you know,
Speaker 1: really really strict policy or or you know, profound adherent
Speaker 1: to social distancing guidelines going forward. I think the country
Speaker 1: is in a pretty concerning place where well, you do
Speaker 1: have some some plateauing or or decline of case growth
Speaker 1: in you know, put the initial hotspots Texas, initial new offspots, Texas, Florida, Arizona.
Speaker 1: You still have many cases there also deaths as as
Speaker 1: you know, people have consistently warned catching up to that
Speaker 1: case you know, that past case growth, and then many
Speaker 1: other examples besides New Jersey around the country that you know,
Speaker 1: well not as acute as those hot spots, yet still
Speaker 1: seeing very significant levels of case growth. All of which um,
Speaker 1: you know, makes any further opening, makes school in the
Speaker 1: fall harder and will lead to both you know, more
Speaker 1: debts and the sort of unknown long term consequences of infection. Um,
Speaker 1: which you know, more more research props up every day
Speaker 1: indicating the possibility of heart lung damage that may be durable.
Speaker 1: So um, yeah, it's a it's a scary time, all right.
Speaker 1: So that brings us to the continuing ongoing view of
Speaker 1: potential for vaccines Johnson and Johnson. I saw a headline
Speaker 1: vaccine protects monkeys from COVID with single shot. How important
Speaker 1: is the J and j H news there? Um, you know,
Speaker 1: it's a little bit of both. Do you always have
Speaker 1: to be particularly cautious about um, you know, non human data.
Speaker 1: There's a saying among people who do in vectious disease research, Um,
Speaker 1: you know, mice lie, monkeys exaggerate, So you know, there,
Speaker 1: there's that's a thing you really kind of do have
Speaker 1: to view it in the context that, well, well, this
Speaker 1: can tell you something valuable, give you an indication of
Speaker 1: the likelihood that a vaccine is promising, and in this case,
Speaker 1: the particularly promising potential of of a single dose. After
Speaker 1: you really do need to see it at humans before
Speaker 1: you make any conclusions. And that's something where um, you know,
Speaker 1: the change of vaccine is running a little bit behind.
Speaker 1: It just began it its first in human studies, so
Speaker 1: I'll I personally wait for that before making to two
Speaker 1: firm of a verdict on the promise of the vaccine. Though, um,
Speaker 1: definitely you know what you want to see from a
Speaker 1: primary challenge study. You know it wasn't It went well
Speaker 1: within the limitations of the study. And we have confirmation
Speaker 1: now on the Boomberg website that Herman Came, the piece
Speaker 1: of Jane executive of course, has died seventy four years old.
Speaker 1: He released a statement via Twitter on July twod that
Speaker 1: he was hospitalized in the Atlanta area after contracting coronavirus,
Speaker 1: and that was less than two weeks after attending President
Speaker 1: Donald Thomp's indoor rally and Tulsa, Arizona. He didn't know
Speaker 1: when or how he contracted the disease. But again, Herman Kine,
Speaker 1: the former prominent Republican who actually was running for White
Speaker 1: House position, if you'd like to put it that way,
Speaker 1: has died from COVID nineteen Max. Thank you, This isn't
Speaker 1: the last death, unfortunately from this awful pandemic. And again
Speaker 1: we're more than a hundred and fifty thousand people down
Speaker 1: here in the United States now and much more than
Speaker 1: that globally, so Paul and another prominent figure dying from
Speaker 1: COVID nineteen. You have to wonder if this will change
Speaker 1: the conversation in any way across the country, but unfortunately
Speaker 1: it's hard to see that happening. It is time to
Speaker 1: take a closer look at that economic data as well
Speaker 1: as what the Federal Reserved chair said yesterday. No better
Speaker 1: man than to bring in David Kotok Now of Cumberland Advisors. David,
Speaker 1: good morning, and welcome. Good morning, Vanney. It's nice to
Speaker 1: talk with well, it is, except that we got a
Speaker 1: second quarter annualized figure of down thirty two point nine
Speaker 1: percent for GDP growth. What does that mean for the
Speaker 1: economy going forward? What should we read into this well
Speaker 1: remarkable number. We've already had a lot of conversation about it.
Speaker 1: Um it was expected to be huge, and it validated
Speaker 1: the expectation, and it says nothing about where we're going
Speaker 1: to be in the fourth quarter and next year. And
Speaker 1: that's what's key markets are I think are reacting not
Speaker 1: to the GDP number with this red tape today. I
Speaker 1: think they're reacting to the impasse from the US Congress,
Speaker 1: which invites risk and the blame game between the two
Speaker 1: largest economies in the world, China and the United States.
Speaker 1: And I think that's what's driving this market to a
Speaker 1: red tape, not GDP. All right, Dave, let's let's go there. Um.
Speaker 1: We had Kevin Sirelli, Bloomberg's Washington correspondent on earlier with
Speaker 1: Tom Keene and myself on surveillance. He believes that from
Speaker 1: his contacts in Washington that something will in fact get
Speaker 1: done this week. What's your outlook for the fiscal stimulus?
Speaker 1: What do you think the market is really looking for
Speaker 1: to come out of Washington. Yeah, well, I I saw
Speaker 1: the piece with Kevin. Um. As you said, you know,
Speaker 1: I'm a regular surveillance watcher every morning, and I think
Speaker 1: the cutting edges where they're going to meet in the middle.
Speaker 1: The issue of the liabilities is not resolved, or maybe
Speaker 1: it will become. So how do you deal with a
Speaker 1: retroactive liability deletion on the part of local governments, on
Speaker 1: the part of business. Is what to do with the
Speaker 1: liability for COVID and how do you establish proof in
Speaker 1: a pandemic. These are also complicated my expectation as the
Speaker 1: markets would like to see you meet in the middle compromise.
Speaker 1: They don't expect three plus trillion, and they don't expect
Speaker 1: one trillion, and they do expect some amount of sustenance
Speaker 1: to keep thirty or forty million Americans bridged at least
Speaker 1: in part across the gap for the rest of the year.
Speaker 1: Markets would like that, businesses would like that, the citizens
Speaker 1: would like that, and we would get beyond the same
Speaker 1: pass which you indicated this morning is possibly going to happen.
Speaker 1: Is it realistate, David to think though, that, you know,
Speaker 1: the administration of all of this can get done in
Speaker 1: the way that Republicans are expecting, in the sense of,
Speaker 1: you know, okay, down to two extra from the federal
Speaker 1: governments per week for a couple of months, and then
Speaker 1: you know, by then everybody will be able to get
Speaker 1: some of what they had been making. Is that even possible?
Speaker 1: There is no extra money for states to do this? Um, well,
Speaker 1: that's that's the profound question, Ronnie. It's a fair one,
Speaker 1: you know. I I reflect on history as you know it.
Speaker 1: I'm a student of history for a very long time.
Speaker 1: And I remember Winston Churchill rising in the House of Commons.
Speaker 1: I wasn't there at the time when I'm very young,
Speaker 1: but I remember reading his words in in the House
Speaker 1: of Commons after World War two and all the chaos
Speaker 1: a allowed, and he stood up in the House of
Speaker 1: Commons and he says, it has been said that democracy
Speaker 1: is the worst system of government. And he paused, and
Speaker 1: he said, except for all the others. And we are
Speaker 1: testing Churchill's wisdom right now today in the United States,
Speaker 1: as we have been all year. There's truth that that's
Speaker 1: our system. As crazy as it is, it's still better
Speaker 1: than a place where you live under a dictator and
Speaker 1: an autocrat and you have no rights. And so I
Speaker 1: I'm a long term believer in this enduring, marvelous experiment
Speaker 1: that started over two hundred years ago. So I think
Speaker 1: we'll work this out the hard way, but we'll get there. So, David,
Speaker 1: what's an investor to do here? As we look at
Speaker 1: these dire economic data. Yes, it's backward looking, but it's
Speaker 1: really sobering. What should investors do here as they think
Speaker 1: about the next of all eighteen months? One investor should do.
Speaker 1: It depends on their point of view. In Cumberland's case,
Speaker 1: in the stock market, we have some cash reserve, but
Speaker 1: we are invested. In the U S stock market, we
Speaker 1: are overweight the sectors which we think benefit healthcare. It's
Speaker 1: a great example, of course, and we are underweight or
Speaker 1: avoiding the troubled places. Trying to pick the right cruise
Speaker 1: ship company that will survive is trying to avoid a
Speaker 1: falling knife. Why why do that? In the rest of
Speaker 1: the world, we are deploying moneys because we think pandemics
Speaker 1: run their course. And in Asian countries specifically, we see
Speaker 1: the ability of governments to respond better than we have done,
Speaker 1: and they are doing that. Why they learned with two
Speaker 1: two thousand and three with stars, They prepared, they have
Speaker 1: tracing testing, they have all the facilities in place, they
Speaker 1: apply technology, they have apps on their phones, whether it's
Speaker 1: in a country like China or it's in South Korea,
Speaker 1: tai one. So we favor looking at Asian recovery leading
Speaker 1: the way coming out of this, and some are already
Speaker 1: doing it. And in the United States, we have to
Speaker 1: get through this forest fire in the country. Now we
Speaker 1: don't have three ways. We don't have flattening the curve.
Speaker 1: We have a forest fire. It's burning. It doesn't burn forever,
Speaker 1: but it will burn for a while. David, thanks so
Speaker 1: much for that. We really appreciate it. David Kotok, Chairman
Speaker 1: and Chief investment Officer of Cumberland Advisors. They have over
Speaker 1: three billion dollars in assets under mention. We always appreciate
Speaker 1: Dave's perspective as broad perspective on the and uh, you know,
Speaker 1: putting things in context. I think for investors, I think
Speaker 1: that's investor's value that David has seen a few of these.
Speaker 1: He's seen pandemics, he has seen crises, he's seen crisis
Speaker 1: calls by all different sorts of things. He's seen market
Speaker 1: bubbles burst, and he's in the game more than ever.
Speaker 1: So obviously there is another side to the end of
Speaker 1: all of this. Very excited to welcome our next guest.
Speaker 1: Dr David S. Gorton is cardiologist and President and CEO
Speaker 1: of the Association of American Medical Colleges or the a
Speaker 1: a m C. He joins US now from Washington, d C.
Speaker 1: Following an op ed in the Washington Post which was
Speaker 1: entitled we need a COVID nineteen reset. So we developed
Speaker 1: a comprehensive plan to do just that. Drs Gorton, thanks
Speaker 1: for joining. What does a reset look like? Is it
Speaker 1: a countrywide lockdown? No, Bunny, First of all, thanks for
Speaker 1: having me on UM. It's more complicated than that. We
Speaker 1: laid out nine immediate steps that we believe the country
Speaker 1: needs to take in two longer term actions. And among
Speaker 1: those nine steps, the big three are will not surprise you.
Speaker 1: Number one is to do a better job at making
Speaker 1: sure that we have the supplies we need from personal
Speaker 1: protective equipment to the lab supplies that will allow us
Speaker 1: to boost up testing. Number two is testing itself and
Speaker 1: really nothing else that we can do in the country
Speaker 1: that we want to do, like reopen the economy, go
Speaker 1: back to school, go back to college, all of those
Speaker 1: things will depend on a better ability to do testing
Speaker 1: and turn it around more quickly than we're doing it
Speaker 1: right now. And then, thirdly, we believe there should be
Speaker 1: national standards on face coverings and that masks should be
Speaker 1: mandatory in areas of growing community spread. And then there's
Speaker 1: many other aspects, but those are those are the ones
Speaker 1: that I believe are the most urgent we need to
Speaker 1: work on now. Doctor, I guess For me, the biggest
Speaker 1: frustration is that petas I look at the US relative
Speaker 1: to other countries around the world, there has not been
Speaker 1: a national response policy to what is clearly a national problem.
Speaker 1: It is left to state by states. Some states like
Speaker 1: New York have done it better than some other states
Speaker 1: like Florida for example. Will there ever be a national response?
Speaker 1: And if there is, where does it need to come from?
Speaker 1: Doesn't need to come from the White House? Well, when
Speaker 1: you ask whether ever be a national response, if I
Speaker 1: had that crystal ball and it was as effective as that,
Speaker 1: I'd probably be um sitting in your seat and telling
Speaker 1: people which way to go. But um, what I would
Speaker 1: say is the first two words of my outbed and
Speaker 1: yesterday's post. We're we're failing, and I mean we very sincerely.
Speaker 1: All of us need to pull together individual decisions like
Speaker 1: whether to wear a mask, whether to be socially distant,
Speaker 1: whether to pay attention to the evidence based advice we're
Speaker 1: getting from the top health professionals in the country. And yes,
Speaker 1: we believe that there is a role for government to
Speaker 1: develop more national policies, not only the administration, Congress, but
Speaker 1: there's also a role for the private sector. We think
Speaker 1: that the manufacturing sector, for example, could help us. But
Speaker 1: we're playing catch up on these supply issues. So there's
Speaker 1: something here from everybody. But yes, there does need to
Speaker 1: be a national view of how to go forward, and
Speaker 1: we try to present that view in our roadmap. Is
Speaker 1: there a time limit for this? I mean, will there
Speaker 1: be a point beyond which of all is lost? I
Speaker 1: don't mean to be, you know, totally apocalyptic about this,
Speaker 1: but you know at a certain point it's too late
Speaker 1: to implement proactive measures. Well, I'm a physician as scientist,
Speaker 1: and I'm very very strong believer in biomedical research. Right
Speaker 1: this minute, Bunny and Paul, there are people all over
Speaker 1: the world working on robust vaccines right this minute. There's
Speaker 1: people at universities and in pharmaceutical industry working on anti
Speaker 1: viral treatments and so on. And as we've learned more
Speaker 1: about the coronavirus on the front lines of hospitals across
Speaker 1: the world, we've learned more and more how to provide
Speaker 1: supportive care. So I remain an optimist about this. Nonetheless,
Speaker 1: if we don't make some changes and soon in supplies, testing,
Speaker 1: face coverings, and some other areas, um we're going to
Speaker 1: have a lot more deaths, and I'd like to just
Speaker 1: insert one issue relate to finance, if I might. One
Speaker 1: of the difficulties of national system of health insurance that's
Speaker 1: or fifty percent of people insured through their employer. Is
Speaker 1: it a time where employment dips than healthcare coverage dips
Speaker 1: as well. And one of our immediate action recommendations is
Speaker 1: to immediately expand health insurance through COBRA. That's a mechanism
Speaker 1: already in place, but many workers cannot afford to pay
Speaker 1: both the employer and employee premiums for COBRA when they're
Speaker 1: out of work. So we're asking for Congress to consider
Speaker 1: at least partly subsidizing COBRA for a while while we're
Speaker 1: in such a pickle in terms of employment and a
Speaker 1: reduction in health insurance coverage. Doctor, One of the big
Speaker 1: topics right now as it relates to our response to
Speaker 1: the pandemic is the reopening of schools or weeks away
Speaker 1: in many parts of the country. Many parts of country
Speaker 1: are actually reopening now. How do you think this should
Speaker 1: play out? One of our recommendations is to establish Tavanni's
Speaker 1: point earlier national criteria and your point national criteria for
Speaker 1: CAPE through twelve school reopenings and to immediately convene a
Speaker 1: working group to study different approaches, so to bring together
Speaker 1: the expertise to do this right. We need to bring
Speaker 1: the educators, the teachers, We need to bring some voice
Speaker 1: from parents and families, and of course we need to
Speaker 1: bring the voice of public health, epidemiology and infectious diseases.
Speaker 1: There was a recent of consensus report that I commend
Speaker 1: to you and your listeners from the National Academy of Science, Engineering,
Speaker 1: and Medicine just a few weeks ago, which laid out
Speaker 1: a very important step by step process for reopening and
Speaker 1: so we have a bit of a roadmap from the
Speaker 1: National Academy is one of the most prestigious groups in
Speaker 1: the country or in the world, and I think we
Speaker 1: need to do is make up a national commitment to
Speaker 1: listening to some of these recommendations, and then it has
Speaker 1: to be interpreted like everything else locally, depending on the
Speaker 1: amount of community spread, the re sources available, and the
Speaker 1: different neighborhoods of school districts we're talking about. There's a great,
Speaker 1: great difference, as you know, in the resources available to
Speaker 1: school districts based on local property tax revenue and so on.
Speaker 1: So yes, we need to pay attention to this, and
Speaker 1: the National Academy's report is a terrific place to start. Dr.
Speaker 1: You're a cardiologist as well as everything else, and I'm
Speaker 1: curious as to what's been the most surprising thing for
Speaker 1: you as a result of this COVID pandemic. What does
Speaker 1: the disease do in terms of what you're a specialist
Speaker 1: in that terrifies you. Well, um, from the cardiology point
Speaker 1: of view, that has not been as prominent as issues
Speaker 1: as you know, with the lungs, with the neurological system
Speaker 1: and other things. But I'll say as just a physician
Speaker 1: in general, I used to run a division of general
Speaker 1: internal medicine. We call this a novel coronavirus because it's
Speaker 1: the first time that we've known about this coronavirus affecting humans,
Speaker 1: and the fact that there can be such robust spread
Speaker 1: of a disease from asymptomatic people is quite unusual. And
Speaker 1: of course this makes it much much harder to manage
Speaker 1: the communities because you don't really know who's got it.
Speaker 1: A medical commentator a couple of three months ago said
Speaker 1: we should all act as if we have coronavirus. Put
Speaker 1: a mask on, stay away from other people, and so
Speaker 1: on and so forth, except those in our immediate family
Speaker 1: with whom we're living. And I think that's a very
Speaker 1: interesting way to look at it. But that's been a big,
Speaker 1: big surprise. And then the other big, big surprise has
Speaker 1: been the chameleon like effects of this virus on various
Speaker 1: different bodily systems. And I'm sure you all have followed
Speaker 1: the lingering effects, the neurological effects, as well as those
Speaker 1: effects from the immune system on the lungs. He does.
Speaker 1: Dr David Scorton, thank you so much for joining us.
Speaker 1: We really appreciate your thoughts, uh and opinions, David. Dr
Speaker 1: David Scorton, cardiologists and President CEO of the Association of
Speaker 1: American Medical Colleges, giving us his thoughts on what a
Speaker 1: national policy could look like. Well, tech analysts and tech
Speaker 1: investors are going to be more than busy after the
Speaker 1: close today. We have the big four tech companies, Apple, Amazon, Facebook,
Speaker 1: and Alphabet reporting numbers. I don't think that's ever happened,
Speaker 1: Vonnie one time at the same time on the same
Speaker 1: day reporting. It's gonna go. So there's gonna be a
Speaker 1: lot to pass through from big tech. It's got a
Speaker 1: little bit of a preview there. We can do that
Speaker 1: with Barry Ridholtz. He's a Bloomberg opinion columnist and host
Speaker 1: of Masters in Business on Bloomberg Radio. And of course
Speaker 1: he's a founder, chairman and chief investment off Server it
Speaker 1: holds wealth Management. So, Barry, if you needed some color
Speaker 1: on what's going on in the tech space, I think
Speaker 1: you're gonna get it. After the close today, You're gonna
Speaker 1: get a lot more than color. You're gonna have a
Speaker 1: full painting as to how four of the six companies
Speaker 1: that have been driving two thirds of the SMP five hundred,
Speaker 1: how well they're doing. And uh, it's gonna be interesting.
Speaker 1: Remember back in February, Apple was the first company that
Speaker 1: came out and said, given this nascent coronavirus pandemic, we
Speaker 1: have no visibility for the rest of the year. They
Speaker 1: were way ahead of the curve on that. I'm really
Speaker 1: curious to see what they're going to come out and say, Yeah,
Speaker 1: it's gonna be fascinating. I mean, will they all show
Speaker 1: stellar results? You think Pario it feels like they are
Speaker 1: some of the only winners out of all of this. Well,
Speaker 1: they clearly have been UM part of the stocks that
Speaker 1: have been been driving games. Take take the ten biggest
Speaker 1: names in the SMP five hundred on an equal weight basis,
Speaker 1: they're up thirty four percent for the year. Take the
Speaker 1: next four hundred nine UM stocks in the SNP five
Speaker 1: hundred on an equal weight basis, they're down eight percent
Speaker 1: for the year. So the the earnings health of the
Speaker 1: of the fang so called fang stocks are really important,
Speaker 1: but I don't know if investors are going to give
Speaker 1: them a pass. If anybody says, well, this sector did
Speaker 1: well and this division did well, but we really saw
Speaker 1: soft sales in this sector. Maybe it's iPhones, maybe it's UM.
Speaker 1: Some form of advertising on Facebook or Google that's they
Speaker 1: expect will return once things get back to normal. It's interesting.
Speaker 1: I'm looking, you know, just at the the advertising driven
Speaker 1: names that we're gonna hear from tonight, in terms of
Speaker 1: Facebook and and Google parent is alphabet UM those stocks,
Speaker 1: you know, they're you know, and also looking for a
Speaker 1: significantly slower rubbnue growth because let's face it, advertisers aren't
Speaker 1: advertising that much. I don't care if it's on a
Speaker 1: radio or TV ed or a newspaper or on the Internet.
Speaker 1: Yet those stocks are still up their team percent. So
Speaker 1: I guess tech investors barrier, you know, willing to look
Speaker 1: towards the other side of this. Yeah, I mean everybody
Speaker 1: knows your your movies aren't advertising, restaurants aren't advertising anything.
Speaker 1: That's a face to face experience where people have a
Speaker 1: tendency to um put that on hold until we get
Speaker 1: past the pandemic. Obviously that's down. I have to think
Speaker 1: investors understand that, and they're looking at one maybe even
Speaker 1: past that too. It's it's hard to It's really hard
Speaker 1: to say. And one of the bigger concerns was regulatory
Speaker 1: overreach in d C. Based on what we saw yesterday,
Speaker 1: I don't think these four companies have a whole lot
Speaker 1: to worry about in terms of the government figuring out
Speaker 1: what they even do more or less regulating them or
Speaker 1: breaking them up. Sorry, I mean, is this the line
Speaker 1: of the sound after this? If there are no consequences
Speaker 1: in any way regulatory or anti trust or otherwise, do
Speaker 1: they get Carton Lush and do we see somebody like
Speaker 1: Jeff Bezos and start increasing prices on Amazon, which was
Speaker 1: always the original goal anyway, you know, the only historical
Speaker 1: frame of reference that that I can compare this to
Speaker 1: was Microsoft in the late nineties, and if you remember,
Speaker 1: Microsoft owned the desktop, and any time a new idea
Speaker 1: or feature or a little software program was developed, it
Speaker 1: managed to be copied and built into Windows. And once
Speaker 1: the Justice Department started talking about antitrust enforcement, it really
Speaker 1: led to that Cambrian explosion of websites and soft web
Speaker 1: based software apps. And I'm wondering if something similar might
Speaker 1: not happen. Maybe we're at peak Google and peak Facebook.
Speaker 1: Given the mere fact that we're having this hearing, Microsoft
Speaker 1: might have, you know, pulled in some of their claws
Speaker 1: a little bit when the Justice Department started poking around.
Speaker 1: Maybe Facebook and Google and Amazon for that matter, um
Speaker 1: throttle back a little bit. Apple's got a ton of
Speaker 1: criticism for their thirty tax on the app store. Let's
Speaker 1: see if anybody wants to change, uh their current business
Speaker 1: models to sort of keep the wolves away from you know,
Speaker 1: the crown jewels, verry. When when we do come out
Speaker 1: of I'll put the glass half empty on on the
Speaker 1: table here. When we do come out of this pandemic
Speaker 1: and the economy starts to really right itself, do you
Speaker 1: expect investors will rotate out of these tech winners and
Speaker 1: try to find some more value and possible performance from
Speaker 1: some of the more UH names that were beaten down
Speaker 1: the cyclicals and so on. You know, we've done a
Speaker 1: couple of studies on this internally. We've We've crunched a
Speaker 1: lot of numbers, and I've read other studies from people
Speaker 1: like Bill Miller and Research Affiliates and a q R
Speaker 1: and go down the list. The key determiner as to
Speaker 1: whether it's value or growth that dominates seems to be
Speaker 1: some combination of interest rates and inflation. When we are
Speaker 1: in a low yield environment and a very low inflationary environment,
Speaker 1: it does not work to the advantage of value, and
Speaker 1: in many ways the cheap cost of capital works to
Speaker 1: the advantage of the bigger, more ambitious tech companies. But
Speaker 1: if people like j Professor Jeremy Siegel at Wharton are correct,
Speaker 1: and when we begin to recover and all this pent
Speaker 1: up demands plus all the FED and congressional stimulus works
Speaker 1: its way into the economy, you might see a little
Speaker 1: bump up in inflation. And if it gets to three
Speaker 1: or four percent or more for just a year a
Speaker 1: couple of years, that should be advantageous to value stocks.
Speaker 1: Very briefly, you know, at Redults well as management, are
Speaker 1: you buying or selling anything these days? No, We're pretty
Speaker 1: happy with the way our portfolios are configured. The most
Speaker 1: recent change we made was last quarter when we added
Speaker 1: gold to our tactical portfolio, and that that was a
Speaker 1: pretty easy call to make when you look at the
Speaker 1: possibility of inflation, and you look at the just the
Speaker 1: overall trend and then the breakout in gold. But the
Speaker 1: thing that's been driving gold recently has been the inability
Speaker 1: for the US Congress to agree on any sort of
Speaker 1: a second act to the Cares Act. Compared to Europe.
Speaker 1: Look at how successfully Europe put through a new stimulus plan,
Speaker 1: and just look at the relationship between the euro and
Speaker 1: the dollar. The euro was having one of its best
Speaker 1: runs in a long time. The dollar did take until
Speaker 1: five in the morning that last day, though, So Barry,
Speaker 1: we'll see what happens on Friday. Maybe we'll get something
Speaker 1: out of Congress. Barry Riddles with Golden seventy ounce right now.
Speaker 1: Thank you for joining us. Barry Riddles, CEO of Riddle's
Speaker 1: Wealth Management, Bloomberg Opinion contributor and Masters in business host.
Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can
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Speaker 1: podcast platform you prefer. I'm Bonnie Quinn, I'm on Twitter
Speaker 1: at Bonnie Quinn, and I'm Paul Sweeney. I'm on Twitter
Speaker 1: at pt Sweeney. Before the podcast, you can always catch
Speaker 1: us worldwide at Bloomberg Radio