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Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm

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Speaker 1: Jason Kelly. We're here every day bringing you the latest

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Speaker 1: news from the world's of business and finance, plus technology, politics, economics,

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Speaker 1: all harnessing the power of Bloomberg Business Week reporters and editors,

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Speaker 1: not to mention our hundred journalists and analysts more than

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Speaker 1: a hundred and twenty countries. You can download Bloomberg Business

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Speaker 1: Week on iTunes, SoundCloud, or Bloomberg dot Com. You can

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Speaker 1: also listen to our radio show weekdays at two pm

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Speaker 1: Eastern only on Bloomberg Radio. Let me throw out some

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Speaker 1: numbers for you. More than eight two thousand hundred coronavirus

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Speaker 1: cases they have been reported, with more new cases being

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Speaker 1: reported outside China than within the country for the first time,

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Speaker 1: highlighting the spread of the epidemic. Now, the first US

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Speaker 1: case of the virus was confirmed in Washington State at

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Speaker 1: Providence Regional Medical Center in Everett. That hospital is part

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Speaker 1: of the twenty five billion dollar Providence St. Joseph Health System,

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Speaker 1: which includes fifty one hospitals, more than eight hundred clinics,

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Speaker 1: and a hundred fifteen thousand caregivers. Dr Amy Compton Phillips

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Speaker 1: is chief clinical officer an executive vice president at Providence St.

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Speaker 1: Joseph Health Health, and she joins us on the phone

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Speaker 1: from Everett, Washington. UM. Dr Compton Phillips, nice to have

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Speaker 1: you here with Jason and myself. So how do you

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Speaker 1: now prepare for maybe what's expected in the US and

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Speaker 1: what are your expectations for the virus spread here in

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Speaker 1: the United States? Thanks so much for asking. Our expectation

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Speaker 1: out here is that this virus is now circulating in

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Speaker 1: the community and we need to be prepared for for

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Speaker 1: in FLUXI patients with symptoms UM. And so that includes

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Speaker 1: making sure that that UM all of those access points

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Speaker 1: in the community, so doctor's offices, we have express care clinics,

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Speaker 1: and Walgreens, we have urgent cares. All of those need

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Speaker 1: to be prepared for people with symptoms UM. So we're

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Speaker 1: really revving up our capacity not only to take care

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Speaker 1: of patients when they come in, but also our online

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Speaker 1: capabilities helping people have access to care through phone and

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Speaker 1: through video visits so that they can get care from

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Speaker 1: home and minimize the risk of transmitting the virus further UM.

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Speaker 1: And then in our acute care hospitals we're making sure

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Speaker 1: we're prepared not only to keep patients isolated as we

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Speaker 1: need to with any person with infections with that can

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Speaker 1: be transmitted through respiratory droplets, um, but also who may

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Speaker 1: need more intensive care, so with respirators and ventilators and

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Speaker 1: and more acute services. So it really is an all

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Speaker 1: out attempt to make sure that we're ready and able

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Speaker 1: to care for patients should this get significantly out of control.

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Speaker 1: So Dr Cometon Phillips, obviously there's a whole lot of information,

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Speaker 1: a lot of misinformation out there. Help us understand just

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Speaker 1: as sort of human beings in the world, what should

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Speaker 1: we be doing. What are you advising folks to do

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Speaker 1: to to minimize it, but but also to sort of

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Speaker 1: deal with this as this potentially spreads. Sure, well, I

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Speaker 1: think the key thing is, right now, don't panic. It's

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Speaker 1: one case. Does not mean you know, we have an

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Speaker 1: epidemic here in the US. Um, it is like a

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Speaker 1: very bad flu bug and people we've been dealing with

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Speaker 1: the flu, and nobody is afraid of the flu, right, Um,

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Speaker 1: so is this much worse than the flu? I think

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Speaker 1: that's what we're trying to understand a little bit. It

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Speaker 1: is a more severe version. Um So, it causes very

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Speaker 1: similar symptoms. It causes fever, headache, cost shortness of breath.

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Speaker 1: Um it's just so far in the statistics out of China,

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Speaker 1: which we'll see if they play out here in the States.

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Speaker 1: Um that of the people who get this infection about

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Speaker 1: get a severe case. Um So it goes from from

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Speaker 1: the average flue symptoms to having a cost of severe

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Speaker 1: and short espress of severe you actually need supplemental oxygen

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Speaker 1: um and in two and a half percent around the

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Speaker 1: more between two and three percent of cases, it gets

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Speaker 1: so severe causes death. Um So, one in five patients

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Speaker 1: getting this infection in China needed needed much more acute treatment.

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Speaker 1: And that's significantly worse than the the statistics in most years.

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Speaker 1: Um So, it is like a very very virulent proof.

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Speaker 1: One of the challenges is that, um, you know, most

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Speaker 1: of us don't have antibodies to this version of coronavirus,

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Speaker 1: and so being a novel infection, there's not any kind

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Speaker 1: of what we would call herd immunity around where people

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Speaker 1: are are more resistant to this journ and so and

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Speaker 1: you described a little bit of what you guys are

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Speaker 1: doing at your facilities. Um. You know, what should people

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Speaker 1: expect if they go into a doctor's office or a

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Speaker 1: hospital in terms of how they may be quarantined or

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Speaker 1: how they may be treated. Yeah, what we have been

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Speaker 1: doing up until yesterday is asking about travel history and

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Speaker 1: and if you if you have been traveling, We've been

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Speaker 1: asking you in h year isolated. If you're traveling and

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Speaker 1: have symptoms, we would also um uh put you in

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Speaker 1: a specific kind of isolation rooms, including negative pressure rooms,

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Speaker 1: so that we could do a test safely and send

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Speaker 1: that test off to the CDC UM or or to

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Speaker 1: the state departments, depending on where we are, if the

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Speaker 1: state department has capacity, UM, so that we could actually

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Speaker 1: do this new test for for COVID nineteen UM. That said,

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Speaker 1: now that now that we have at least one confirmed

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Speaker 1: case in the US, UM, we're working with the CDC

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Speaker 1: and with our departments of health in each state to

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Speaker 1: say how broadly do we need to be testing patients

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Speaker 1: here on the West Coast, which tends to be UM

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Speaker 1: ground zero for infections that are coming over from the

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Speaker 1: Pacific rim. I mean, have we learned something from treating

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Speaker 1: that first patient that you guys, UM that actually was

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Speaker 1: in your hospital system. We we have UM We've learned

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Speaker 1: a couple of things. One is that in our first patient,

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Speaker 1: and now we've treated several patients, but in our first patient, UM,

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Speaker 1: he actually didn't quite well for several days and then

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Speaker 1: to return for the worst UM. And so we know

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Speaker 1: that we can't just we can't just write it off

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Speaker 1: and say you're going to be fine. We actually are

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Speaker 1: are being a little more cautious and watching people, so

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Speaker 1: we know what the natural history of this new disease

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Speaker 1: looks like. UM. And the second thing is that we

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Speaker 1: were again in conjunction with the CDC and and UM

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Speaker 1: several several of our national international experts, UM, we were

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Speaker 1: able to get him access to an experimental drugs which

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Speaker 1: made a big difference in his care. All Right, listen,

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Speaker 1: we really enjoyed UM talking to you and getting UM

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Speaker 1: your firsthand experience with all of this. So much appreciated,

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Speaker 1: and I know our viewers and listeners appreciated as well.

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Speaker 1: Dr Amy Compton Phillips, chief Clinical Officer and Executive vice

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Speaker 1: President of Providence St. Joseph Health Health, on the phone

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Speaker 1: from Everett, Washington. All right, so to me, this is

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Speaker 1: one of the stories of our time. In many ways,

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Speaker 1: the expansion of access to different kinds of investments, and

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Speaker 1: we talked so much about it. We talked about the

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Speaker 1: private markets, the public markets, and and it's really an

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Speaker 1: important question as we think about our own retirement, as

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Speaker 1: we think about institutional versus retail for yield in a

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Speaker 1: low yield environment. Absolutely so, right at the heart of it.

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Speaker 1: Uh is in this discussion, as often is, is near

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Speaker 1: a case our columnist for Bloomberg Opinion joining us on

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Speaker 1: the phone from Washington, d C. And you're great to

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Speaker 1: have you back with us. Thanks for having me, Jason.

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Speaker 1: All right, so give us the set up here. I

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Speaker 1: love the headline, mom and pop should be free to

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Speaker 1: skip private equity, which is sort of a provocative statement

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Speaker 1: in the sense that private equity really wants these guys.

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Speaker 1: And there's also been this sense that retail investors want

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Speaker 1: to get a piece of this. You have a little

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Speaker 1: bit of a different take. Yeah, I mean, you know,

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Speaker 1: there's a yeah, there's a movement now to try to

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Speaker 1: democratize private equity. Um. You know, I make an observation

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Speaker 1: in the column, which is that you know, if you

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Speaker 1: if you say to people, market should be available to everyone.

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Speaker 1: You know, everyone should have equal access to market. That

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Speaker 1: would be a pretty you know, banal statement in most respect,

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Speaker 1: but when it comes to investing, it's hugely controversial because

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Speaker 1: we have this idea that we need to put gates

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Speaker 1: around certain investments to protect ordinary investors from themselves, because

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Speaker 1: they're presumably not sophisticated enough to to have access to

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Speaker 1: certain corners of the market. That includes private equity, that

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Speaker 1: includes hedge funds and other in other places. The problem

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Speaker 1: is that these gates eventually come down. They don't last forever.

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Speaker 1: And we're talking now about giving access to ordinary investors

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Speaker 1: private equity, which I support, but inevitably what happens is

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Speaker 1: these gates come down too long. It takes too long

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Speaker 1: for these gates to come down, and they come down

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Speaker 1: after everyone else has feasted. And in this case, you know,

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Speaker 1: private equity has been usually successful for the last three decades.

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Speaker 1: Valuations are very high, and I worry that ordinary investors

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Speaker 1: are going to be invited at the party just in

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Speaker 1: time to get hurt. Well, that's what I love, you know,

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Speaker 1: you know how we kind of look for peaks in

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Speaker 1: the market and signs, and I feel like Sam's l

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Speaker 1: sold his reat, you know, just ahead of the financial

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Speaker 1: a crisis and mortgage melt out were like, all right,

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Speaker 1: that was a peak. I do wonder if we talk

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Speaker 1: about so much money that has been, um, you know,

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Speaker 1: gathered by the private equity firms. We talked about all

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Speaker 1: the dry powder that they have, and I do wonder

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Speaker 1: if it's you know, a sign also along with the

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Speaker 1: reaching out to more regular investors, that maybe it's a

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Speaker 1: sign of the pe top I think it is, Carol.

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Speaker 1: I mean, there's there's two different ways I think you

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Speaker 1: could look at that. One is just objectively at the numbers.

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Speaker 1: I mean, you look at the valuations pe there twice

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Speaker 1: what they were twenty years ago, UM and also obviously

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Speaker 1: relies heavily on leverage, and for the last three decades

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Speaker 1: you had this secular trend of interest rates going from

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Speaker 1: you know, very very high levels in the in the

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Speaker 1: mid to late nineteen eighties to what they are now,

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Speaker 1: which is on the floor. And when you take away

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Speaker 1: those head winds, it's just difficult to see how private

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Speaker 1: equity is going to be able to put up the

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Speaker 1: numbers that it has in the past. And when you

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Speaker 1: look at projections for private equity going forward, I mean

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Speaker 1: there are some some people who think that returns are

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Speaker 1: going to be even lower than what you're going to

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Speaker 1: get from the S and P, which itself is not

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Speaker 1: particularly cheap. But there's also to your point, Carol, there's

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Speaker 1: also this mechanism, this is stealing that you know, the

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Speaker 1: smart money knows what it's doing and and and when

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Speaker 1: it when it owns rich assets, you know, maybe the

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Speaker 1: thing to do is to is to dump it on

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Speaker 1: unsuspecting ordinary investors. And so there's a feeling that that's

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Speaker 1: happening to right. Well, it's interesting too, and here I

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Speaker 1: think you point out point this out in your calm

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Speaker 1: as well, that not all private equity is created equal

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Speaker 1: to and and sort of ripping on your lead with

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Speaker 1: your your ground show marks quote about I don't want

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Speaker 1: to belong dating club that would have me as a member.

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Speaker 1: You know, part of it is which private equity funds

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Speaker 1: you could get into, because the really exclusive ones maybe

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Speaker 1: they don't want to make room, you know, for other investors,

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Speaker 1: because they've got all the money that they need. So

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Speaker 1: not everyone's created equal here, right, that's right, And I

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Speaker 1: think that's where you really have to distinguish, because you know,

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Speaker 1: in private equity and particularly adventure, there's a big difference

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Speaker 1: in the distribution of return um if you look at

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Speaker 1: if you look at, for example, what the returns of

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Speaker 1: the most successful private equity investors get, it's it's it's

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Speaker 1: orders of magnitude greater than what the than what sort

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Speaker 1: of like the average private equity returns are. And so

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Speaker 1: there is also there there is also the feeling that

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Speaker 1: as private equity proliferate, as fun proliferate, that to the

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Speaker 1: except that they're going to be available to ordinary investors,

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Speaker 1: or the ordinary investors are not going to get the

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Speaker 1: top of the line access exactly. That's a further problem.

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Speaker 1: All Right, we're gonna leave it. They're always good to

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Speaker 1: catch up with. You love your columns in Your kids

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Speaker 1: are columnists for bloom Grade Opinion, founder of Unison Advisors. Yeah,

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Speaker 1: and that's exactly what abortion clinics are facing. They're getting

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Speaker 1: nickel and dimed out of business. This is a fascinating story.

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Speaker 1: It's my must read in Bloomberg Business Week magazine. Rebecca

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Speaker 1: Greenfield is in charge of the diversity coverage here at

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Speaker 1: Bloomberg News. This story reported by her and Cynthia Coon's

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Speaker 1: Rebecca's here in our Bloomberg Interactive Broker Studio. As I said,

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Speaker 1: it is my must read. What's going on here? Thanks

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Speaker 1: for having mem Yeah, so we looked into the business

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Speaker 1: of being an abortion provider in UM as you know,

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Speaker 1: you know, with Donald Trump and the White House and

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Speaker 1: a more conservative court, the climate on abortion is definitely changing.

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Speaker 1: We wanted to see what does that mean for clinics

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Speaker 1: and what is their business like. And so our story

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Speaker 1: really digs into really how hard it is to run

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Speaker 1: a clinic these days, and not just because of the

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Speaker 1: laws or the political climate, but because of the business climate.

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Speaker 1: We'll talk to us a little bit more and what

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Speaker 1: that means. Yeah, so there are restrictive laws, and those

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Speaker 1: laws oftentimes do make it costlier for clinics to operate,

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Speaker 1: But then there's the general culture of fear and stigma

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Speaker 1: that makes other business owners not really want to work

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Speaker 1: with the business of abortion provider. And let me just

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Speaker 1: jump in because you do talk about one individual in particular,

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Speaker 1: Amy Heckstrom Miller Um, who is I think, in your words,

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Speaker 1: de facto legal guardian of the choice movement. But she

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Speaker 1: has talked about this abortion tax right, and this talk

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Speaker 1: gets into some of the additional costs on running a clinic. Yeah,

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Speaker 1: I love that phrase, like she she took, but yeah

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Speaker 1: for to her. Listen the abortion tax the way she

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Speaker 1: describes it, And what we found is kind of a

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Speaker 1: litany of search charges or increased costs or general nuisances

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Speaker 1: that make it more expensive to operate just because you're

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Speaker 1: in the business of abortion or just because you're an

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Speaker 1: abortion provider. So that can be anything from as little

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Speaker 1: as your local plumber doesn't want to come work with

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Speaker 1: you because he's scared of being targeted by protesters or

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Speaker 1: because he doesn't want to work with an abortion provider.

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Speaker 1: But we also found some bigger examples of this. So

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Speaker 1: we found UM insurance companies dropping abortion clinics or not

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Speaker 1: renewing their policies UM from their Business and Compliance insurance

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Speaker 1: UM because they I mean potentially because they were fearing

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Speaker 1: greater risks that these clinics might face in the giving

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Speaker 1: climate that we're in now. And also banks declining loans.

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Speaker 1: I mean that's a huge deal. Banks declining loans for

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Speaker 1: people who want to open up clinics. It's really hard

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Speaker 1: for these clinics, and it's kind of all wrapped up together.

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Speaker 1: You know, you can't just say, oh, the bank is

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Speaker 1: saying I don't want to be in the business of abortion.

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Speaker 1: The bank might be saying that. They might be saying

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Speaker 1: for business reasons, because it is all tied up in

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Speaker 1: this stick right right well, because often these are essentially

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Speaker 1: even in this globalized world community bankers, you know, they're

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Speaker 1: thinking about their other clients and and things like that.

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Speaker 1: And as you say, uh, sort of sort of that

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Speaker 1: spreading around you and Cynthia Coon's worked on this, it

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Speaker 1: feels of a piece with a lot of the work

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Speaker 1: she's done and you've done, put it into the context

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Speaker 1: of sort of everything else that we're seeing in a

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Speaker 1: in a changing world, it feels like, especially around both

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Speaker 1: women's health and reproductive health in many ways. Yeah, like

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Speaker 1: I said, we definitely came at those through lens. You know,

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Speaker 1: people have written about abortion before, we've written about women's

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Speaker 1: all before. But we really feel like we're in a

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Speaker 1: moment right now, um, where the legislator looks different, where

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Speaker 1: the courts look different, where things might actually change, and um,

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Speaker 1: there's actually like a long history of these tactics and

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Speaker 1: the kind of building to this moment now. So that's

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Speaker 1: really where we thought this piece fit in. I wondered

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Speaker 1: because you know, we talked earlier this week about a

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Speaker 1: couple of stories. Of course this story that's in the magazine,

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Speaker 1: but you know, putting together getting your head around. Okay,

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Speaker 1: here we are, how many decades since Roe v. Wade, Right,

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Speaker 1: And you would think that running a clinic would be

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Speaker 1: an easier business to do or easier process. It's not.

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Speaker 1: And yet at the beginning of the week we had

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Speaker 1: Harvey Weinstein, right, uh, and so the charges against him,

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Speaker 1: the verdict um and also doing some time and you know,

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Speaker 1: the whole me too movement. We have actually in the

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Speaker 1: last couple of years made some progress on that. So

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Speaker 1: it's kind of you know, kind of these mixed blessings

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Speaker 1: progress on that. And yet when you look at what's

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Speaker 1: going on with abortion clinics, we're sliding backward. Yeah, it's

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Speaker 1: it's a really dissonant right for this. So next week

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Speaker 1: the Supreme Court is hearing um arguments in an abortion

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Speaker 1: case that's really similar to an abortion case that they

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Speaker 1: heard four years ago. And it's really I mean, it's

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Speaker 1: potentially they could decide in the favor against the abortion clinics,

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Speaker 1: and yeah, that would be a huge backslide. Basically four

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Speaker 1: years ago they had this big victory and then it

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Speaker 1: would be a backslide. Um. And then you put that

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Speaker 1: against yeah, the whole me too movement, and that's kind

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Speaker 1: of a grassroots movement. It's very pressuring companies. Um. We

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Speaker 1: saw some movement in the criminal justice system with Harvey

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Speaker 1: Winston on Monday, But I think, yeah, it's just this

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Speaker 1: disconnect between basically like the laws and the court system

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Speaker 1: and what I think grassroots movements are happening now well.

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Speaker 1: And public opinion obviously plays into this as well. Was

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Speaker 1: so powerful when it came to the Me Too movement

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Speaker 1: and the velocity at which that happened obviously with Weinstein

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Speaker 1: specifically and all the sort of powerful people who ultimately

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Speaker 1: came forward there. But then the way that it that

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Speaker 1: it really went viral in a lot of ways. And

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Speaker 1: yet as you say, on the other side, in many

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Speaker 1: cases that has empowered uh, this other side going the

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Speaker 1: other way. Yeah, And we mentioned this this one statistic

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Speaker 1: in the story where it's seven out of ten people

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Speaker 1: according to a really reason survey, don't want to overturn

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Speaker 1: movie weight. Um, so that is the public opinion here,

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Speaker 1: of course, there's so much nuance and the abortion debate

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Speaker 1: that does that statistic doesn't get at But I still

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Speaker 1: think a lot of people would say they want most

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Speaker 1: abortion to be legal in many cads. You also talk

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Speaker 1: about the role of social media and all of this,

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Speaker 1: and that has proved I admit a lot of momentum

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Speaker 1: for the anti abortionists. Yeah. I don't know if you guys,

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Speaker 1: do you remember we talked about this moment but in

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Speaker 1: when those videos came out that purportedly showed Planned Parenthood

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Speaker 1: selling um doing illegally selling field body parts and then

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Speaker 1: it turned out to be a false claim and edited videos,

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Speaker 1: and that moment I remember being such a huge deal.

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Speaker 1: It also feels like it was much longer ago than

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Speaker 1: to me. But in our story we found how impactful

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Speaker 1: that was in the movement. It wasn't just a way

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Speaker 1: to get people to kind of rally against or behind

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Speaker 1: or for a Planned Parenthood, but it also motivated these

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Speaker 1: anti abortion activists to target medical waste companies because they

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Speaker 1: were saying, oh, yeah, these medical ways companies do work

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Speaker 1: with abortion providers, and if we can get them to

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Speaker 1: stop working with abortion providers, it will be really hard

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Speaker 1: for those providers to do business. All right, Well, it's

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Speaker 1: a really powerful story. Uh, Carol's must read. Uh. And

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Speaker 1: further conversation with Rebecca Greenfield on our can show this

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Speaker 1: weekend catch that starting Friday night, both an analysis of

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Speaker 1: this story and a little more conversation about the impact

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Speaker 1: of the Weinstein verdict, another story that Rebecca and her

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Speaker 1: team have been falling very closely. She oversees all of

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Speaker 1: our managing diversity coverage here at Bloomberg News. Our thanks

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Speaker 1: to Rebecca Greenfield. Alright, so mid all the talk of markets.

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Speaker 1: Companies continue to roll along, make decisions, People continue to

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Speaker 1: come and go, and on the going side, a couple

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Speaker 1: of people leaving some key roles over at Apple. And

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Speaker 1: when we think about Apple and wanting to know exactly

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Speaker 1: what's going on there and what it means, there's only

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Speaker 1: one guy for us, that's smart German. He joins us

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Speaker 1: from our Los Angeles bureau. I was delighted to catch

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Speaker 1: up with him briefly earlier in the week. So Mark,

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Speaker 1: tell us what's going on over at Apple that we're

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Speaker 1: talking ops and supply chain here. Yeah, Hi, Jason, get

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Speaker 1: you two? Yes, so too, Long time operations VPS, which

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Speaker 1: is basically the highest level you can be in the

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Speaker 1: Apple you know, in the Apple ranks other than a

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Speaker 1: senior VP or the CEO, CEO, etcetera. Have left the company.

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Speaker 1: One person named Nick for Lenza has retired. The other

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Speaker 1: do Go Pasmog is planning to leave later this year

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Speaker 1: and discussions about his exit. And they've both been very

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Speaker 1: key to the manufacturing and supply chain, like you said,

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Speaker 1: around nearly every major Apple product that you can think of.

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Speaker 1: So how serious is this? Like, what does it mean?

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Speaker 1: How do I read this as an investor? Yeah, this

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Speaker 1: isn't the end of the world. This is like Jason said,

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Speaker 1: it's the comings and goings of any corporation. People come,

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Speaker 1: people go. But these were you know, the two notable

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Speaker 1: names internally who who supervised you know, hundreds of people

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Speaker 1: and oversaw lots of manufacturing. So it is you know,

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Speaker 1: significant front from that standpoint. But does this change anything

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Speaker 1: long term for the company? Does this have anything to

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Speaker 1: do with the coronavirus of the trade war that's in

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Speaker 1: now well? And are you point out in your story,

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Speaker 1: which I think is really important for for folks to

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Speaker 1: remember and understand, that operations has been the core of

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Speaker 1: Tim Cook's Apple, right I mean, this is what has

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Speaker 1: really helped this company extend its lead over its rivals

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Speaker 1: to expand. This is the cornerstone of the strategy. So

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Speaker 1: when people leave in this business, maybe you know, back

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Speaker 1: in the day and the Steve jobs Apple, you know,

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Speaker 1: people have been like, it's an ops guy, you know,

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Speaker 1: don't worry as much about it. But this this is

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Speaker 1: the core of the strategy here, yeah, Apple, and it's

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Speaker 1: core is operated or run by operations people. I should

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Speaker 1: say three of their most senior people on that senior

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Speaker 1: executive team come from operations backgrounds. Like you said, Tim

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Speaker 1: Cook as an operations guy. His number two, Jeff Williams,

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Speaker 1: is an operations guy. They added a new operations person

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Speaker 1: to the executive team that sort of replaced Johnny. I've

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Speaker 1: on that executive leadership team, Sabby Khan. So this is

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Speaker 1: an operations driven company and it's you know, for a

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Speaker 1: long time the company, his division for ops hasn't really

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Speaker 1: seen much shifting at that top level. But now you're

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Speaker 1: seeing two people you know, coming and going in a

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Speaker 1: very short period of time. So Mark got to ask

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Speaker 1: you from a supply chain perspective, obviously, lots of people

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Speaker 1: have been talking about Apple through the lens of the

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Speaker 1: coronavirus and the impact there. They've made some changes. We've

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Speaker 1: talked to you about it over the last year or so,

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Speaker 1: especially in light of the trade war, help us understand

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Speaker 1: the impact on supply chain and operations that the coronavirus

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Speaker 1: is having. Now. So I think the impact is really

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Speaker 1: going to be in the month of March and potentially

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Speaker 1: in April. What you're going to start seeing is Apple

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Speaker 1: running out of iPhones at a lot of retail stores

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Speaker 1: in the United States, Europe, etcetera. So the impact is

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Speaker 1: going to be there. But obviously people are now coming

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Speaker 1: back to work, things are starting to ramp up, and

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Speaker 1: there's about a four to six week lead time, right,

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Speaker 1: so you're going to see some impact for the next

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Speaker 1: two months. But I think after those two months things

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Speaker 1: are going to start being uh, are going to start

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Speaker 1: to clear up and things should be fine. But you know,

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Speaker 1: there is some concern about the next iPhones. There is

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Speaker 1: concerned about some of the engineering work because these things

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Speaker 1: are developed hand in hand between Cupertino in China not

432
00:23:04,320 --> 00:23:07,119
Speaker 1: being able to be done. Um. But not not to

433
00:23:07,160 --> 00:23:11,360
Speaker 1: be too optimistic, but I honestly I don't anticipate any big,

434
00:23:11,440 --> 00:23:14,000
Speaker 1: you know, shifts away from the iPhone normal September launch

435
00:23:14,080 --> 00:23:15,840
Speaker 1: time for him because of this at this point. So

436
00:23:15,880 --> 00:23:17,680
Speaker 1: it's not gonna okay, so it's not gonna mess anything

437
00:23:17,760 --> 00:23:21,080
Speaker 1: up ultimately. Longer term here, I really don't think so.

438
00:23:21,320 --> 00:23:24,040
Speaker 1: Uh what we're seeing now were some conferences being canceled.

439
00:23:24,040 --> 00:23:25,920
Speaker 1: Souple was going to hold some sort of you know,

440
00:23:25,960 --> 00:23:28,400
Speaker 1: product launch event in March. I would anticipate that would

441
00:23:28,400 --> 00:23:30,639
Speaker 1: be sort of maybe like a press release situation instead,

442
00:23:30,680 --> 00:23:33,200
Speaker 1: or maybe at a smaller sort of a smaller gathering.

443
00:23:33,960 --> 00:23:36,560
Speaker 1: Other than that, I really don't see a long term

444
00:23:36,600 --> 00:23:39,440
Speaker 1: impact alright. I just want to bring you a red

445
00:23:39,480 --> 00:23:41,840
Speaker 1: headline crossing the Bloomberg right now has to do with

446
00:23:41,880 --> 00:23:47,040
Speaker 1: some of the key Canadian exchanges. Uh TMX exchanges, including

447
00:23:47,080 --> 00:23:50,600
Speaker 1: the t SX the Toronto Stock Exchange have been halted.

448
00:23:50,680 --> 00:23:54,240
Speaker 1: Trading there have been halted due to some technical issues.

449
00:23:54,480 --> 00:23:58,639
Speaker 1: That redhead crossing the Bloomberg just a few minutes ago.

450
00:23:58,760 --> 00:24:02,359
Speaker 1: So we'll bring you more as that develops. But you know,

451
00:24:02,400 --> 00:24:08,760
Speaker 1: obviously an important market, an important series of index the

452
00:24:08,800 --> 00:24:10,720
Speaker 1: technical halt and now it's going to be closed for

453
00:24:10,760 --> 00:24:12,840
Speaker 1: the rest of the day, that's right. Yeah, we're turning

454
00:24:12,840 --> 00:24:16,399
Speaker 1: the t S T s X, t X, t s

455
00:24:16,600 --> 00:24:20,200
Speaker 1: X V excuse me, and t s X Alpha exchanges.

456
00:24:20,720 --> 00:24:24,840
Speaker 1: Technical halt was declared and TMX now saying that the

457
00:24:24,840 --> 00:24:27,000
Speaker 1: technical halt to remain for the rest of the day

458
00:24:27,119 --> 00:24:30,600
Speaker 1: on the t s X the Toronto Stock Exchange. So

459
00:24:30,880 --> 00:24:33,680
Speaker 1: more on that as it develops. Our thanks to Mark

460
00:24:33,720 --> 00:24:37,320
Speaker 1: German out in Los Angeles Tech Reporter bringing us the

461
00:24:37,359 --> 00:24:40,919
Speaker 1: latest and greatest on Apple, as we said, some comings

462
00:24:40,920 --> 00:24:43,600
Speaker 1: and goings as it relates to some top executives there,

463
00:24:44,000 --> 00:24:46,119
Speaker 1: and a nice update from Mark as well on the

464
00:24:46,160 --> 00:24:49,760
Speaker 1: supply chain, because if you think too last week, I

465
00:24:49,760 --> 00:24:52,240
Speaker 1: think was it last week? You know, Apple was really,

466
00:24:52,480 --> 00:24:55,080
Speaker 1: you know, among the first to come out and say

467
00:24:55,280 --> 00:24:57,439
Speaker 1: here's how this is going to affect it being the

468
00:24:57,480 --> 00:25:02,000
Speaker 1: coronavirus our operation, you know, sort of shutting some things down,

469
00:25:02,000 --> 00:25:04,280
Speaker 1: and they talked about lower sales obviously in China right

470
00:25:04,320 --> 00:25:07,520
Speaker 1: because their retail outlets were closed. So it totally makes sense.

471
00:25:07,640 --> 00:25:10,080
Speaker 1: But I do wonder be coming off of US China

472
00:25:10,160 --> 00:25:13,119
Speaker 1: trade war, coming off of the virus. I really do

473
00:25:13,280 --> 00:25:16,440
Speaker 1: think there is a major rethink potentially going on when

474
00:25:16,480 --> 00:25:23,680
Speaker 1: it comes to supply chains around the world. Oh journal, Yeah,

475
00:25:23,720 --> 00:25:28,760
Speaker 1: but you let me drive. Oh no, no, no no, non, please,

476
00:25:28,840 --> 00:25:36,080
Speaker 1: I'll do the right drivel. I want to drive, Just drive, baby,

477
00:25:38,520 --> 00:25:48,200
Speaker 1: it's the questions. Drying. Yea, this is the Drive to

478
00:25:48,280 --> 00:25:52,080
Speaker 1: the Globe community. Thanks well, Drying us to Dawn on

479
00:25:52,240 --> 00:25:55,720
Speaker 1: Bloomberg Radio. All right, it's time for the Drive to

480
00:25:55,760 --> 00:25:59,439
Speaker 1: the clothes on a Thursday, pretty ugly thursday here on

481
00:25:59,520 --> 00:26:02,399
Speaker 1: the markets. Norm kindly back with us CEO and c

482
00:26:02,800 --> 00:26:06,240
Speaker 1: I O of JAG Capital Management, looking after about one

483
00:26:06,240 --> 00:26:09,080
Speaker 1: and a half billion dollars for clients, joins us on

484
00:26:09,119 --> 00:26:11,800
Speaker 1: the phone from St. Louis, Nor. I'm great to have

485
00:26:11,840 --> 00:26:14,520
Speaker 1: you back with Carol myself. Oh, thank you, so glad

486
00:26:14,560 --> 00:26:17,080
Speaker 1: to be here. All right, So what do you make

487
00:26:17,119 --> 00:26:19,200
Speaker 1: of a week like this? I know we're gonna talk

488
00:26:19,240 --> 00:26:21,880
Speaker 1: about some big caps and some names that you're following,

489
00:26:22,040 --> 00:26:24,479
Speaker 1: But how do you assess this? What are you hearing

490
00:26:25,160 --> 00:26:27,600
Speaker 1: from your clients as they you know, look at so

491
00:26:27,720 --> 00:26:30,960
Speaker 1: much read over the course of this week. Yeah, I

492
00:26:30,960 --> 00:26:33,359
Speaker 1: think it is it is nerve racking. This is this

493
00:26:33,440 --> 00:26:36,520
Speaker 1: has been you know, uh in terms of depths of

494
00:26:36,600 --> 00:26:40,359
Speaker 1: decline compared to you know, historical corrections. And we're not

495
00:26:40,480 --> 00:26:43,000
Speaker 1: that deep at least not at least not yet, but

496
00:26:43,840 --> 00:26:46,200
Speaker 1: over this short of a period of time, it's it's,

497
00:26:46,280 --> 00:26:48,600
Speaker 1: you know, getting to be somewhat unusual. I mean, we're

498
00:26:48,600 --> 00:26:50,760
Speaker 1: you know, after all, I think we were at fifty

499
00:26:50,800 --> 00:26:53,600
Speaker 1: two week highs on there really all time highs in

500
00:26:53,640 --> 00:26:56,720
Speaker 1: the SMP five hundred about a week ago, right. So, uh,

501
00:26:56,880 --> 00:26:59,680
Speaker 1: in just a few trading sessions, we've you know, we've

502
00:26:59,680 --> 00:27:02,119
Speaker 1: fallen quite a bit as the as the fear levels

503
00:27:02,119 --> 00:27:05,720
Speaker 1: of risin UM in terms of you know, uh, you

504
00:27:05,760 --> 00:27:08,080
Speaker 1: know what I'm telling folks, Uh, you know, we've got

505
00:27:08,080 --> 00:27:10,480
Speaker 1: to kind of I think, uh, you know, find a

506
00:27:10,480 --> 00:27:13,919
Speaker 1: balance between you know, um, on the one hand, not

507
00:27:14,000 --> 00:27:17,960
Speaker 1: being complacent about the virus risk, but on the other hand,

508
00:27:18,320 --> 00:27:21,360
Speaker 1: uh not not not going too far in the other

509
00:27:21,400 --> 00:27:25,040
Speaker 1: direction in terms of you know, fear. Uh So it's

510
00:27:25,160 --> 00:27:27,800
Speaker 1: it's an interesting time. If it wasn't uh such an

511
00:27:27,880 --> 00:27:32,320
Speaker 1: unpleasant uh you know backdrop, it would be you know, fascinating.

512
00:27:32,880 --> 00:27:35,840
Speaker 1: So how do you make sense of a normal an environment?

513
00:27:35,840 --> 00:27:38,760
Speaker 1: Though like this? I do wonder is it similar to

514
00:27:38,960 --> 00:27:41,760
Speaker 1: some of the steep selloffs and then bounce backs that

515
00:27:41,800 --> 00:27:44,960
Speaker 1: we've seen I feel like several times over the last

516
00:27:44,960 --> 00:27:47,320
Speaker 1: few years, especially when the market got a little pricey

517
00:27:47,760 --> 00:27:50,359
Speaker 1: or got a little elevated. UM, you know, is it

518
00:27:50,440 --> 00:27:53,480
Speaker 1: similar to that? Is there something different about this one?

519
00:27:53,520 --> 00:27:56,800
Speaker 1: I mean, I think many people safe to say, considering

520
00:27:56,800 --> 00:27:58,520
Speaker 1: the run up that we've had in the past year,

521
00:27:58,920 --> 00:28:02,000
Speaker 1: you know, it was looking four we're we're looking excuse me,

522
00:28:02,280 --> 00:28:05,040
Speaker 1: for some kind of correction to bring valuations more in

523
00:28:05,119 --> 00:28:09,080
Speaker 1: line with what made sense. Yeah, I mean this this,

524
00:28:09,359 --> 00:28:13,080
Speaker 1: while it's unusual, it's it's certainly not um not unique.

525
00:28:13,119 --> 00:28:15,480
Speaker 1: I mean, just to give one example, we had a

526
00:28:15,960 --> 00:28:19,199
Speaker 1: uh back in in the in the late two thousand

527
00:28:19,160 --> 00:28:22,240
Speaker 1: and eight summer of two thousands fifteen, UH, the SMP

528
00:28:22,400 --> 00:28:26,440
Speaker 1: had about a ten percent down draft in in four days. Now,

529
00:28:26,520 --> 00:28:29,680
Speaker 1: if today ends like it is, uh like it looks

530
00:28:29,720 --> 00:28:32,040
Speaker 1: like it's going to uh, this will be at about

531
00:28:32,040 --> 00:28:35,199
Speaker 1: an eleven eleven and a half percent draw down in

532
00:28:35,320 --> 00:28:39,680
Speaker 1: five days. UM. So you know, again it's somewhat unusual,

533
00:28:39,760 --> 00:28:43,000
Speaker 1: but but not unique. UM. And and and here's the

534
00:28:43,000 --> 00:28:45,520
Speaker 1: tricky thing. In the past, as you as you kind

535
00:28:45,560 --> 00:28:51,680
Speaker 1: of allude to, UM, these short, sharp, relatively deep pullbacks,

536
00:28:51,800 --> 00:28:55,560
Speaker 1: unless they occur during you know, an ongoing bear market.

537
00:28:55,600 --> 00:28:58,160
Speaker 1: You know, for example OH eight or early oh nine

538
00:28:58,280 --> 00:29:01,560
Speaker 1: or uh two thousand, two thousand one, two thousand two.

539
00:29:01,760 --> 00:29:04,880
Speaker 1: So with those exceptions, unless it's already unless we're already

540
00:29:04,920 --> 00:29:08,840
Speaker 1: in a bowl market, the tendency over the next you know, uh,

541
00:29:09,000 --> 00:29:13,120
Speaker 1: six months, twelve months has tended to be positive. Returns

542
00:29:13,120 --> 00:29:16,000
Speaker 1: have tended to be positive and actually more positive than

543
00:29:16,080 --> 00:29:20,480
Speaker 1: all other periods of roughly six or twelve months. And

544
00:29:20,560 --> 00:29:24,520
Speaker 1: so talk to us about some names that you're watching

545
00:29:24,720 --> 00:29:29,160
Speaker 1: amid all of this norm Yeah, so, um, you know,

546
00:29:29,240 --> 00:29:32,280
Speaker 1: we've on Mac Microsoft as one of our largest holdings

547
00:29:32,600 --> 00:29:37,000
Speaker 1: for for several years. Microsoft selling off um still you know,

548
00:29:37,160 --> 00:29:40,040
Speaker 1: still not a classically cheap stock, but in terms of

549
00:29:40,760 --> 00:29:44,760
Speaker 1: being extremely well run company that although they may experience it,

550
00:29:44,840 --> 00:29:47,040
Speaker 1: you know, and they told us they're going to experience

551
00:29:47,040 --> 00:29:49,600
Speaker 1: a bit of a slowdown near time in their Windows

552
00:29:49,640 --> 00:29:53,360
Speaker 1: business because of what's happening in China. Um, you know,

553
00:29:53,480 --> 00:29:57,000
Speaker 1: people are still going to use Microsoft software and solutions

554
00:29:57,000 --> 00:30:00,520
Speaker 1: and cloud solutions and Microsoft Office on the I many years.

555
00:30:00,560 --> 00:30:04,680
Speaker 1: I think you know that one looks interesting on further weakness. UM.

556
00:30:04,720 --> 00:30:07,520
Speaker 1: Another one that that we've owned for a while and

557
00:30:07,520 --> 00:30:10,560
Speaker 1: and really like it as kind of a a thought

558
00:30:10,640 --> 00:30:14,719
Speaker 1: leader in retail, uh is Lulu Lemon, which I'm talking

559
00:30:14,720 --> 00:30:17,840
Speaker 1: to you now. Um, you know, it's off about seven

560
00:30:17,880 --> 00:30:21,520
Speaker 1: percent today and and you know, my my educated guess

561
00:30:21,560 --> 00:30:25,880
Speaker 1: is it's related to their China exposure because that is a, um,

562
00:30:25,920 --> 00:30:30,400
Speaker 1: you know, a material part of Lulu's UM growth strategy. Yeah,

563
00:30:30,480 --> 00:30:33,200
Speaker 1: that's been a huge effort over the past few years.

564
00:30:33,600 --> 00:30:35,680
Speaker 1: We wrote a story about that in the magazine late

565
00:30:35,760 --> 00:30:40,640
Speaker 1: last year and that was a really big push, especially

566
00:30:40,640 --> 00:30:44,120
Speaker 1: when their private equity owner, their former private equity owner, Advent,

567
00:30:44,240 --> 00:30:47,400
Speaker 1: came back in right right, right, yeah. So so we

568
00:30:47,480 --> 00:30:50,680
Speaker 1: like the management, we like their strategy. Um you know,

569
00:30:51,080 --> 00:30:54,680
Speaker 1: we like their strategy with men'swear so to a certain extent.

570
00:30:54,760 --> 00:30:56,320
Speaker 1: And I don't know this to be the case, but

571
00:30:56,520 --> 00:30:58,360
Speaker 1: you know, as I look at my screen with several

572
00:30:58,400 --> 00:31:02,239
Speaker 1: hundred tickers on it, you can see that those with

573
00:31:02,320 --> 00:31:06,760
Speaker 1: the Chinese exposure, either actual or perceived, um you know,

574
00:31:06,800 --> 00:31:10,560
Speaker 1: getting getting getting hit a bit, maybe more than than

575
00:31:10,640 --> 00:31:13,760
Speaker 1: most of the other types of names. So um, so

576
00:31:13,800 --> 00:31:16,520
Speaker 1: I think you know, you know, I'm not pound of

577
00:31:16,520 --> 00:31:19,040
Speaker 1: the table, like I said, we have to draw you know,

578
00:31:19,240 --> 00:31:23,760
Speaker 1: a healthy balance between respecting what's going on and and

579
00:31:23,760 --> 00:31:27,080
Speaker 1: and not being complecent. Well, I forgive me if I

580
00:31:27,080 --> 00:31:29,000
Speaker 1: can just break in because we are seeing stocks take

581
00:31:29,040 --> 00:31:31,200
Speaker 1: another leg down. We are definitely at our loads of

582
00:31:31,240 --> 00:31:35,200
Speaker 1: the session. We are now down officially a correction ten

583
00:31:35,240 --> 00:31:38,200
Speaker 1: percent on the week for the Dow, the NASTAC, and

584
00:31:38,240 --> 00:31:42,040
Speaker 1: the SNP five hundred of thousand points one thy one points,

585
00:31:42,040 --> 00:31:44,640
Speaker 1: one thousand, twenty eight points lower on the Dow Jones

586
00:31:44,680 --> 00:31:47,080
Speaker 1: Industrial Average, so we're down almost three point nine percent,

587
00:31:47,320 --> 00:31:49,560
Speaker 1: down almost three point nine percent as well on the

588
00:31:49,680 --> 00:31:52,160
Speaker 1: S and P five hundred. We are below three thousand

589
00:31:52,520 --> 00:31:54,800
Speaker 1: on the s n P five hundred, and the NASDAC

590
00:31:54,880 --> 00:31:56,960
Speaker 1: now looking at a decline of more than four percent,

591
00:31:57,000 --> 00:31:59,600
Speaker 1: down three d sixty eight points. So you know, this

592
00:31:59,640 --> 00:32:02,560
Speaker 1: is two here, We've got roughly less than five minutes

593
00:32:02,640 --> 00:32:05,800
Speaker 1: left to the closing belt and we're selling into the close.

594
00:32:06,240 --> 00:32:08,400
Speaker 1: So norm, I mean, that's not a sign you want

595
00:32:08,400 --> 00:32:09,600
Speaker 1: to see. You want to see a little bit of

596
00:32:09,600 --> 00:32:12,040
Speaker 1: a bounce back. Yeah, we saw that a little bit

597
00:32:12,080 --> 00:32:14,720
Speaker 1: earlier today. And my good uh good friends, a long

598
00:32:14,760 --> 00:32:18,880
Speaker 1: time subscriber of the Spoke Investments and they just they

599
00:32:18,920 --> 00:32:22,400
Speaker 1: just tweeted that, Uh, the SMP is only declined ten

600
00:32:23,000 --> 00:32:25,920
Speaker 1: in a week four other times since the end of

601
00:32:25,960 --> 00:32:30,480
Speaker 1: World War two. UM April two thousand, September two thousand one,

602
00:32:30,480 --> 00:32:35,960
Speaker 1: Octo October two thousand eight, and guess what October. So

603
00:32:36,280 --> 00:32:39,560
Speaker 1: three of those other four instances were you know, in

604
00:32:39,640 --> 00:32:42,600
Speaker 1: the midst of ongoing either at the beginning of or

605
00:32:42,720 --> 00:32:45,520
Speaker 1: in the midst of ongoing bear markets. And this is, uh,

606
00:32:45,520 --> 00:32:48,440
Speaker 1: this is kind of a standout. Yeah, absolutely, well, yes,

607
00:32:48,560 --> 00:32:51,120
Speaker 1: certainly is standing out for all of us. Norm kindly,

608
00:32:51,360 --> 00:32:53,280
Speaker 1: thank you so much for your time. Is always CEO

609
00:32:53,440 --> 00:32:56,320
Speaker 1: and ce IO of Jack Capital Management, joining us on

610
00:32:56,360 --> 00:32:59,400
Speaker 1: the phone from St. Louis. Thanks for listening to Bloomberg

611
00:32:59,400 --> 00:33:02,720
Speaker 1: Business Week. You can subscribe to the podcast on iTunes, SoundCloud,

612
00:33:02,800 --> 00:33:04,920
Speaker 1: or Bloomberg dot com. You can also listen to our

613
00:33:05,000 --> 00:33:07,880
Speaker 1: radio show every weekday at two pm Eastern only on

614
00:33:07,920 --> 00:33:13,000
Speaker 1: Bloomberg Radio m