1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Penel Podcast. I'm Paul swing you. 2 00:00:05,360 --> 00:00:07,680 Speaker 1: Along with my co host Lisa Brahma Waits. Each day 3 00:00:07,720 --> 00:00:10,240 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,280 --> 00:00:12,520 Speaker 1: you and your money. Whether at the grocery store or 5 00:00:12,560 --> 00:00:15,480 Speaker 1: the trading floor, find a Bloomberg Penl podcast on Apple 6 00:00:15,520 --> 00:00:17,959 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:24,880 Speaker 1: at Bloomberg dot com. There is a push pull dynamic 8 00:00:24,920 --> 00:00:27,560 Speaker 1: when it comes to emerging markets. On the one hand, 9 00:00:27,680 --> 00:00:31,600 Speaker 1: you have an increasingly doubbish federal reserve potentially weaker dollar. 10 00:00:31,760 --> 00:00:34,360 Speaker 1: On the flip side, you have trade wards that arguably 11 00:00:34,479 --> 00:00:37,680 Speaker 1: may end up slowing certain economies, particularly those tied to 12 00:00:37,800 --> 00:00:40,880 Speaker 1: China more than developed markets. Here to sort of pass 13 00:00:40,960 --> 00:00:43,919 Speaker 1: through where the opportunities are here. As Eric Fine, portfolio 14 00:00:43,960 --> 00:00:47,440 Speaker 1: manager focus on a marketing emerging markets fixed income at 15 00:00:47,479 --> 00:00:49,760 Speaker 1: van Eck Global, he joins us here in our Bloomberg 16 00:00:49,760 --> 00:00:53,280 Speaker 1: Interactive Broker studios. So where are we in terms of 17 00:00:53,320 --> 00:00:56,080 Speaker 1: this dynamic? Is the sort of bull case for EM 18 00:00:56,120 --> 00:00:59,960 Speaker 1: stronger right now or or the bear case? Um well, 19 00:01:00,200 --> 00:01:03,600 Speaker 1: I as a you know twenty five plus your EM 20 00:01:03,600 --> 00:01:05,760 Speaker 1: person um for twenty five years, I've been asked what 21 00:01:05,760 --> 00:01:08,080 Speaker 1: do I think about emerging market sponds, and for years 22 00:01:08,120 --> 00:01:10,200 Speaker 1: I've said I don't know, and I feel more and 23 00:01:10,240 --> 00:01:13,040 Speaker 1: more comfortable. I think it depends country by country. However, 24 00:01:13,080 --> 00:01:15,280 Speaker 1: that wasn't your question. Your question was broadly speaking, and 25 00:01:15,280 --> 00:01:18,760 Speaker 1: so my answer would be if quote unquote emerging markets 26 00:01:18,840 --> 00:01:23,800 Speaker 1: to you means um um a lot of exposure uh 27 00:01:23,840 --> 00:01:28,800 Speaker 1: to names like Mexico or Turkey, um, or it means 28 00:01:28,840 --> 00:01:31,559 Speaker 1: significant exposure to quote unquote E m f X, then 29 00:01:32,080 --> 00:01:34,840 Speaker 1: then UM, I would be more cautious. Um. Right now 30 00:01:34,880 --> 00:01:37,240 Speaker 1: the countries we are concerned about happen to be big 31 00:01:37,240 --> 00:01:41,120 Speaker 1: ones UM, Mexico in particular, Turkey, ongoing, Russia is tricky 32 00:01:41,160 --> 00:01:43,400 Speaker 1: because it's the fundamentals are fine. It's more about sanctions 33 00:01:43,480 --> 00:01:47,160 Speaker 1: risk um. Um So, Uh I think you could. I 34 00:01:47,200 --> 00:01:50,560 Speaker 1: think you could make a mixed case um and uh 35 00:01:50,600 --> 00:01:52,000 Speaker 1: so I would say, but I would I would say 36 00:01:52,000 --> 00:01:55,160 Speaker 1: the biggest concerns we have are that, uh, countries like 37 00:01:55,200 --> 00:01:59,720 Speaker 1: Turkey there's too much trapped exposure. Essentially, countries like Mexico 38 00:01:59,760 --> 00:02:02,600 Speaker 1: there's too much comfort with its ratings and we think 39 00:02:02,600 --> 00:02:06,480 Speaker 1: it's a d rating story. Claberg is mixed. Um. You're 40 00:02:06,520 --> 00:02:08,800 Speaker 1: saying that Mexico, you think it's going to default, No 41 00:02:08,960 --> 00:02:12,440 Speaker 1: D rating, D rating, D rating, Oh no, no, no no 42 00:02:12,760 --> 00:02:16,640 Speaker 1: default D rating. Um. I I would say that there's 43 00:02:16,720 --> 00:02:19,400 Speaker 1: there's a non trivial chance in a country like Turkey 44 00:02:19,400 --> 00:02:22,000 Speaker 1: that's in the midst of a bounce payments crisis right now. Um, 45 00:02:22,080 --> 00:02:25,240 Speaker 1: but no Mexico's D rating. So if you if you're 46 00:02:25,480 --> 00:02:29,120 Speaker 1: going to be very very married to the existing um 47 00:02:29,200 --> 00:02:32,880 Speaker 1: amount of debt that's out there essentially um, then um um. 48 00:02:32,880 --> 00:02:35,200 Speaker 1: Then I'd be cautious, and I'd be biased towards dollars, 49 00:02:35,600 --> 00:02:39,000 Speaker 1: towards dollar denominated debt, because the more profound thing that's 50 00:02:39,040 --> 00:02:41,200 Speaker 1: happened is that the FED has gotten activated. That seems 51 00:02:41,200 --> 00:02:44,320 Speaker 1: to me the big wheel turning um and uh. And 52 00:02:44,360 --> 00:02:47,040 Speaker 1: it gets to what you think happens. Let's say, let's 53 00:02:47,040 --> 00:02:50,480 Speaker 1: say that the Fed's reaction is discounting um a slowdown 54 00:02:50,480 --> 00:02:53,680 Speaker 1: in the economy. Well, most people with my experience that 55 00:02:53,760 --> 00:02:56,639 Speaker 1: believe in the so called dollar smile, which is um 56 00:02:57,040 --> 00:03:00,280 Speaker 1: um in in uh in extreme good time times, in 57 00:03:00,360 --> 00:03:03,160 Speaker 1: extreme bad times, the dollar can do. It does really 58 00:03:03,200 --> 00:03:07,400 Speaker 1: well and uh and and in a recession you've had 59 00:03:07,400 --> 00:03:09,760 Speaker 1: through all this dollar dead issuece essentially a big shorten 60 00:03:09,840 --> 00:03:12,280 Speaker 1: the dollar, we're going to a recession. The traditional behavior 61 00:03:12,280 --> 00:03:14,320 Speaker 1: is what we've seen, let's say, out of Turkey, when 62 00:03:14,360 --> 00:03:16,720 Speaker 1: they when they're worried about access to finance or a nowntern, 63 00:03:16,919 --> 00:03:19,560 Speaker 1: they buy dollars right and then if the policy reaction 64 00:03:19,680 --> 00:03:23,399 Speaker 1: is bad, they the authorities uh step in and try 65 00:03:23,440 --> 00:03:25,600 Speaker 1: to muck around with that. So, Eric, is there an 66 00:03:25,680 --> 00:03:29,280 Speaker 1: argument to me to be made that investors should avoid 67 00:03:29,520 --> 00:03:34,639 Speaker 1: or underweight emerging markets broadly until the China situation is resolved. 68 00:03:34,680 --> 00:03:38,920 Speaker 1: There's just too much uh, you know, tape risk. Absolutely not. 69 00:03:39,040 --> 00:03:42,040 Speaker 1: That's my one of my strongest is in general, people 70 00:03:42,040 --> 00:03:45,560 Speaker 1: are way too worried about emerging markets. UM as you 71 00:03:45,600 --> 00:03:48,880 Speaker 1: get paid. Let's just look at corporum corporates. You get 72 00:03:48,920 --> 00:03:50,520 Speaker 1: paid a higher spread for the same rating as a 73 00:03:50,600 --> 00:03:53,600 Speaker 1: US corporate, and that e M corporate has to work 74 00:03:53,640 --> 00:03:56,800 Speaker 1: harder to get that same ratings. You're basically you're in 75 00:03:56,840 --> 00:03:59,120 Speaker 1: a sense getting that lower leverage lower you know, not 76 00:03:59,240 --> 00:04:02,520 Speaker 1: that even those of those sorts of variables um uh, 77 00:04:02,640 --> 00:04:05,600 Speaker 1: typical US pension funds have about three allocated to e 78 00:04:05,720 --> 00:04:07,800 Speaker 1: M debt. If you look at the boring old efficient 79 00:04:07,800 --> 00:04:09,800 Speaker 1: frontier and I'm not a fan of looking backwards. But 80 00:04:09,840 --> 00:04:12,400 Speaker 1: the last fourteen years, and you look at the different 81 00:04:12,400 --> 00:04:14,840 Speaker 1: elements of fixed income you're supposed to have depending on 82 00:04:14,880 --> 00:04:18,800 Speaker 1: your risk tolerance of your bonds in e M debt, 83 00:04:19,240 --> 00:04:21,719 Speaker 1: and we're living in a post quee era where the 84 00:04:21,760 --> 00:04:24,640 Speaker 1: storytelling works with it. What are we talking about these days, 85 00:04:24,760 --> 00:04:28,960 Speaker 1: last ten fifteen years, sustainable level of debt, independent central banking, 86 00:04:29,240 --> 00:04:32,080 Speaker 1: getting paid for political risk. Those are all three. Those 87 00:04:32,080 --> 00:04:34,400 Speaker 1: are three things that EM has an answer for us. 88 00:04:34,400 --> 00:04:37,040 Speaker 1: So broadly speaking, I think this is e MS continues 89 00:04:37,080 --> 00:04:39,920 Speaker 1: to quit itself. My my concern is that as we 90 00:04:39,960 --> 00:04:43,880 Speaker 1: go through a trickier period, the names that are vulnerable 91 00:04:43,960 --> 00:04:46,679 Speaker 1: happen to be names that are household names, big names 92 00:04:47,200 --> 00:04:48,880 Speaker 1: in our portfolio. You know what we do is we 93 00:04:48,960 --> 00:04:52,000 Speaker 1: avoid them. Um. But one of the big phenomena, the 94 00:04:52,000 --> 00:04:53,880 Speaker 1: other phenomen has happened in the last ten years, is 95 00:04:54,080 --> 00:04:58,520 Speaker 1: that there has been increasing exposure to names because they're 96 00:04:58,520 --> 00:05:01,880 Speaker 1: part of an index, not because investors are choosing to 97 00:05:02,080 --> 00:05:04,760 Speaker 1: to to invest. And so I worry about Oh, I 98 00:05:04,760 --> 00:05:07,719 Speaker 1: don't like it, therefore I'm underweight behavior as opposed to 99 00:05:07,760 --> 00:05:10,920 Speaker 1: I don't like it and I don't own it behavior. Well, 100 00:05:10,920 --> 00:05:14,120 Speaker 1: so I'm wondering where do you find value. You said 101 00:05:14,160 --> 00:05:18,360 Speaker 1: dollars nominated bonds. Of which nations I'd say, some great 102 00:05:18,560 --> 00:05:22,120 Speaker 1: UH names out there are Brazil, UM and Ukraine. Brazil 103 00:05:22,200 --> 00:05:23,840 Speaker 1: is a big name, so that's why I mentioned it's 104 00:05:24,040 --> 00:05:28,920 Speaker 1: a big important one. UM Brazil has essentially one core problem. 105 00:05:28,920 --> 00:05:32,240 Speaker 1: It's fiscal in particular pension reform. Other than that, it's 106 00:05:32,240 --> 00:05:36,719 Speaker 1: an okay shape. Reserves are high well, certainly relative to imports. Um. 107 00:05:36,760 --> 00:05:38,599 Speaker 1: The economy is coming out of one of the deepest 108 00:05:38,600 --> 00:05:40,800 Speaker 1: recessions about a hundred years. They're going through number of 109 00:05:41,200 --> 00:05:44,239 Speaker 1: implementing a number of structural reforms. If and the central 110 00:05:44,279 --> 00:05:47,880 Speaker 1: bank is independent, inflation and inflation expectations are low and anchored. 111 00:05:48,080 --> 00:05:50,240 Speaker 1: If the economy grows, there's plenty of capacity, so you 112 00:05:50,240 --> 00:05:52,920 Speaker 1: won't see it past through the inflation immediately or you know, 113 00:05:53,040 --> 00:05:55,200 Speaker 1: and of structural reform. So so I think that's a 114 00:05:55,320 --> 00:05:58,720 Speaker 1: very very positive story, assuming they get pension reform through, 115 00:05:58,720 --> 00:06:01,000 Speaker 1: which is you know, a daily weekly soap opera. But 116 00:06:01,080 --> 00:06:02,600 Speaker 1: that is one of the great stories there. I think 117 00:06:02,640 --> 00:06:05,360 Speaker 1: pet Bra is a is a good way to um 118 00:06:05,480 --> 00:06:07,440 Speaker 1: UM get exposure. By the point of good corpus. I'd 119 00:06:07,480 --> 00:06:11,120 Speaker 1: also say Ukraine north of six over spreads. UM was 120 00:06:11,160 --> 00:06:13,240 Speaker 1: on an IMF program. It's likely re inter and IMF 121 00:06:13,320 --> 00:06:16,559 Speaker 1: program very popular. UM It's does have some issues, mainly 122 00:06:16,640 --> 00:06:19,279 Speaker 1: short term debt liabilities, but most of them are to 123 00:06:19,279 --> 00:06:22,560 Speaker 1: the US and can be handled through sponsorship from you 124 00:06:23,040 --> 00:06:25,440 Speaker 1: or or association with the I'm of Eric Fine, thank 125 00:06:25,480 --> 00:06:29,560 Speaker 1: you so much toward a force through emerging markets investing. 126 00:06:29,600 --> 00:06:32,240 Speaker 1: I guess the takeaways don't be scared away from emerging 127 00:06:32,279 --> 00:06:35,080 Speaker 1: markets given the trade tensions. Eric Fine, portfolio manager for 128 00:06:35,120 --> 00:06:39,040 Speaker 1: Emerging Markets Fixed Income Strategy at ben Global, joining us 129 00:06:39,200 --> 00:06:56,159 Speaker 1: UH in our Bloomberg Interactive Broker Studio. Let us turn 130 00:06:56,160 --> 00:06:59,080 Speaker 1: our sights to the one and only Mark Bennioff, who 131 00:06:59,080 --> 00:07:02,039 Speaker 1: has been a force unto himself when it has come 132 00:07:02,040 --> 00:07:07,120 Speaker 1: to consolidation. Salesforce dot Com now buying Tableau, a software 133 00:07:07,200 --> 00:07:10,280 Speaker 1: company h for a fifteen point three billion dollars in 134 00:07:10,320 --> 00:07:14,520 Speaker 1: an all stock deal. Sales Salesforce shares are down today 135 00:07:14,520 --> 00:07:18,240 Speaker 1: more than four percent. Tableau shares, however, UH surging more 136 00:07:18,280 --> 00:07:21,360 Speaker 1: than thirty percent. Luckily, we have Una Grana Software and 137 00:07:21,360 --> 00:07:24,320 Speaker 1: I T Services analyst for Bloomberg Intelligence here with us 138 00:07:24,360 --> 00:07:27,400 Speaker 1: in our Interactive Broker Studios to help us understand why 139 00:07:27,520 --> 00:07:31,840 Speaker 1: markets are perceiving this as a good deal currently for 140 00:07:31,840 --> 00:07:36,160 Speaker 1: for Tableau and perhaps not so much for Salesforce. Well, 141 00:07:36,200 --> 00:07:39,400 Speaker 1: it's all stock deal, so you would expect Salesforce to 142 00:07:39,480 --> 00:07:42,120 Speaker 1: go down a little bit. But you know, frankly, Salesforce 143 00:07:42,160 --> 00:07:44,520 Speaker 1: has done such a good job about a quieting companies 144 00:07:44,520 --> 00:07:47,280 Speaker 1: over the past few years, adding it to the portfolio 145 00:07:47,320 --> 00:07:50,080 Speaker 1: of already present companies it has. They bought a company 146 00:07:50,120 --> 00:07:53,360 Speaker 1: called mules Soft last year, and this particular deal actually, 147 00:07:53,480 --> 00:07:56,440 Speaker 1: you know, really complements the business of those guys, all right, 148 00:07:56,520 --> 00:08:00,240 Speaker 1: So why is Salesforce doing this deal? This is really 149 00:08:00,240 --> 00:08:01,800 Speaker 1: a big trade for them. Why are they doing this deal? 150 00:08:02,240 --> 00:08:04,640 Speaker 1: So one of the biggest themes in enterprise software today 151 00:08:04,680 --> 00:08:07,800 Speaker 1: is and you know, artificial intelligence, getting more analytics out 152 00:08:07,840 --> 00:08:11,480 Speaker 1: of your existing customer base, getting more insights. So for that, 153 00:08:11,560 --> 00:08:13,960 Speaker 1: you really need to you know, pull out data that 154 00:08:14,040 --> 00:08:17,920 Speaker 1: you have internally on your you know systems as well 155 00:08:17,920 --> 00:08:21,280 Speaker 1: as married to social media other kind of data systems. 156 00:08:21,320 --> 00:08:22,960 Speaker 1: But then at the end of the day, after you 157 00:08:23,040 --> 00:08:25,720 Speaker 1: gain insights of it, you need to visualize those particularly 158 00:08:25,720 --> 00:08:28,640 Speaker 1: in dashboards and beautiful graphs. And this is what tableou 159 00:08:28,680 --> 00:08:30,720 Speaker 1: does better than anybody else out there, can you just 160 00:08:30,840 --> 00:08:33,040 Speaker 1: zoom out a little bit and just give us a 161 00:08:33,080 --> 00:08:36,319 Speaker 1: sense of how much this deal is just yet confirmation 162 00:08:36,360 --> 00:08:40,200 Speaker 1: of Mark benning off strategy and frankly his his sort 163 00:08:40,240 --> 00:08:43,080 Speaker 1: of instinct and trusting his internal instinct to just go 164 00:08:43,160 --> 00:08:45,760 Speaker 1: with the deal when he sees it and moving quickly. 165 00:08:46,360 --> 00:08:48,560 Speaker 1: Moves very quickly, definitely, And you know we have seen 166 00:08:48,559 --> 00:08:51,199 Speaker 1: over the years, whether it was demand where um or 167 00:08:51,920 --> 00:08:54,120 Speaker 1: Force dot com, which is part of their platform as 168 00:08:54,120 --> 00:08:56,200 Speaker 1: a service at that time. I mean, all of these 169 00:08:56,240 --> 00:09:00,360 Speaker 1: things eventually adds very well to their exist in core 170 00:09:00,440 --> 00:09:02,640 Speaker 1: customer base, which is, you know, the people who buy 171 00:09:02,679 --> 00:09:05,360 Speaker 1: their sales cloud or their customer service cloud. All of 172 00:09:05,400 --> 00:09:07,800 Speaker 1: this you know, ties very well into that. So it 173 00:09:07,920 --> 00:09:09,559 Speaker 1: is you know, as you said, it is something that 174 00:09:09,640 --> 00:09:11,840 Speaker 1: market backing off just better than you know, almost everybody 175 00:09:11,880 --> 00:09:14,000 Speaker 1: out there at this point. Boy, I'm looking at the 176 00:09:14,320 --> 00:09:18,319 Speaker 1: Salesforce stock price chart five years on the Bloomberg terminal here. 177 00:09:18,559 --> 00:09:20,800 Speaker 1: That is a good story. I mean, wow, so he 178 00:09:20,920 --> 00:09:25,360 Speaker 1: and the market clear, He's obviously earned the markets support, um, 179 00:09:25,400 --> 00:09:27,840 Speaker 1: but the stock is down today. You know, I think 180 00:09:27,840 --> 00:09:30,480 Speaker 1: this is gonna be deluded to earnings initially, I mean, 181 00:09:30,480 --> 00:09:33,280 Speaker 1: did he overpay here potentially, it's so it is expensive. 182 00:09:33,320 --> 00:09:35,800 Speaker 1: Sixteen times sales is probably one of the largest. I mean, 183 00:09:35,840 --> 00:09:38,000 Speaker 1: I would say higher valuations that we have come across. 184 00:09:38,120 --> 00:09:40,320 Speaker 1: But again he's paying with stock, so that you take 185 00:09:40,360 --> 00:09:43,240 Speaker 1: that into account as well. It's not cash um And 186 00:09:43,320 --> 00:09:45,520 Speaker 1: you know, I think SIP bought a company called Qualtricks 187 00:09:45,640 --> 00:09:48,560 Speaker 1: just a few months ago. They actually paid more than this. 188 00:09:48,920 --> 00:09:52,080 Speaker 1: So current valuation in software is so high that if 189 00:09:52,120 --> 00:09:54,440 Speaker 1: you really need to get some deal done, you need 190 00:09:54,480 --> 00:09:56,920 Speaker 1: to take out you know, cash on at a much 191 00:09:56,960 --> 00:10:00,319 Speaker 1: higher multiple. So right now, who does this hurt them most? 192 00:10:00,360 --> 00:10:03,400 Speaker 1: In terms of Salesforce dot com competitors, They are trying 193 00:10:03,440 --> 00:10:06,520 Speaker 1: to be as aggressive so that Microsoft doesn't you know, 194 00:10:06,600 --> 00:10:09,800 Speaker 1: really become bigger in this space. So that's one second. 195 00:10:10,040 --> 00:10:12,319 Speaker 1: I think Article needs to step up their game a 196 00:10:12,400 --> 00:10:14,680 Speaker 1: little bit because their stock has not done as well 197 00:10:14,720 --> 00:10:17,240 Speaker 1: as Salesforce has over the last three to five years, 198 00:10:17,480 --> 00:10:19,319 Speaker 1: and they may not have that mouth currency to use 199 00:10:19,360 --> 00:10:21,400 Speaker 1: their stock to buy that. So they you know, they've 200 00:10:21,400 --> 00:10:23,800 Speaker 1: been buying back stock aggressively. They really need to think 201 00:10:23,840 --> 00:10:26,080 Speaker 1: back and say, do I need to get more cloud 202 00:10:26,120 --> 00:10:28,920 Speaker 1: deals to to to grow over the next few years 203 00:10:28,960 --> 00:10:31,400 Speaker 1: or not? Alright, So my favorite question when we talk 204 00:10:31,440 --> 00:10:34,320 Speaker 1: about deals, is this going to set off more deal 205 00:10:34,360 --> 00:10:37,200 Speaker 1: flows so my banker friends can get paid. It has 206 00:10:37,280 --> 00:10:39,840 Speaker 1: been for a while software deals has been so hot. 207 00:10:39,920 --> 00:10:43,160 Speaker 1: That's just I mean, I I won't be surprised over 208 00:10:43,200 --> 00:10:45,440 Speaker 1: the next few months if you see more deals in 209 00:10:45,440 --> 00:10:48,959 Speaker 1: those space. So what what So in a software space 210 00:10:49,040 --> 00:10:51,240 Speaker 1: is this? Is it all about the cloud here? I mean, 211 00:10:51,360 --> 00:10:54,160 Speaker 1: I guess we saw Google just uh last week with 212 00:10:54,679 --> 00:10:56,959 Speaker 1: two an a half billion dollar acquisition. Is is cloud 213 00:10:57,160 --> 00:11:00,920 Speaker 1: still the area where these tech companies are uh, you know, 214 00:11:01,040 --> 00:11:04,440 Speaker 1: investing money, making deals, putting capital to work. Cloud is 215 00:11:04,480 --> 00:11:07,080 Speaker 1: one Customer insights is another one. So Google, you know, 216 00:11:07,080 --> 00:11:08,959 Speaker 1: buying look at It is the same exact thing as 217 00:11:09,280 --> 00:11:12,520 Speaker 1: as Salesforce buying Tableau in terms of visualization of that data. 218 00:11:12,800 --> 00:11:15,040 Speaker 1: So you are trying to figure out a lot of 219 00:11:15,040 --> 00:11:18,880 Speaker 1: these enterprises, legacy enterprises, companies like Pepsi, Coca Cola, they 220 00:11:18,920 --> 00:11:22,199 Speaker 1: have so much of data on their own systems they 221 00:11:22,240 --> 00:11:24,800 Speaker 1: really need to extract it, get value out of it, 222 00:11:25,000 --> 00:11:26,880 Speaker 1: and then go back to that same customer and sell 223 00:11:26,960 --> 00:11:29,280 Speaker 1: more products to them. And that's where a lot of 224 00:11:29,320 --> 00:11:32,000 Speaker 1: these things are coming through. Is you know, your ability 225 00:11:32,080 --> 00:11:35,000 Speaker 1: to extract that data, clean it up in just then 226 00:11:35,080 --> 00:11:39,360 Speaker 1: analyze it and then finally show social you know, dashboards 227 00:11:39,360 --> 00:11:41,520 Speaker 1: along with it. Anaag ran I, thank you so much. 228 00:11:41,760 --> 00:11:44,680 Speaker 1: Anaa Ran as a senior analysts for software and I 229 00:11:44,760 --> 00:11:47,599 Speaker 1: T Services for Bloomberg Intelligence here in our Bloomberg and 230 00:11:47,640 --> 00:12:07,400 Speaker 1: Reactor Broker studio. Well trade tensions appear to be abating 231 00:12:07,640 --> 00:12:10,400 Speaker 1: somewhat today on news of the Mexico deal. Of course, 232 00:12:10,480 --> 00:12:12,959 Speaker 1: China is still to be determined, but looking at the 233 00:12:12,960 --> 00:12:17,120 Speaker 1: action today, market certainly liking the reduced attentions with Mexico. 234 00:12:17,480 --> 00:12:19,559 Speaker 1: To get a sense of where to go next, we 235 00:12:19,559 --> 00:12:23,439 Speaker 1: welcome Brad McMillan. Brad is chief Investment Officer of Commonwealth 236 00:12:23,480 --> 00:12:27,319 Speaker 1: Financial Network, about a hundred sixty one billion dollars under management. 237 00:12:27,400 --> 00:12:30,440 Speaker 1: He joins us on the phone from Waltham, mess Uh, Brad, 238 00:12:30,559 --> 00:12:34,120 Speaker 1: thanks so much for joining us. Do you think that 239 00:12:34,320 --> 00:12:39,520 Speaker 1: this storm is passing financial markets as we speak? I do, Paul, 240 00:12:39,600 --> 00:12:42,000 Speaker 1: and I'll tell you why. There's been a tremendous amount 241 00:12:42,000 --> 00:12:44,680 Speaker 1: of bad news. There have been some real shock Certainly 242 00:12:44,800 --> 00:12:48,800 Speaker 1: the Mexico tariff adjudgment you know, certainly qualifies as a shock. 243 00:12:48,880 --> 00:12:52,840 Speaker 1: But nonetheless markets have been resilient and they bounced back strongly. 244 00:12:52,920 --> 00:12:56,320 Speaker 1: I think there's a lot of strength there. Okay, So 245 00:12:56,520 --> 00:12:58,560 Speaker 1: at this point, given the fact that we didn't see 246 00:12:58,600 --> 00:13:00,640 Speaker 1: that much of a pullback, at this fact of not 247 00:13:00,720 --> 00:13:03,880 Speaker 1: getting a China US trade deal, where are the opportunities. 248 00:13:04,840 --> 00:13:07,480 Speaker 1: I think the opportunities are in growth sectors. I would 249 00:13:07,480 --> 00:13:12,160 Speaker 1: probably stay away from internationally exposed equities. You know, certainly 250 00:13:12,200 --> 00:13:14,960 Speaker 1: there's still risk there when you look at the United States, 251 00:13:15,000 --> 00:13:18,480 Speaker 1: there's a lot of fear about consumers spending, There's a 252 00:13:18,480 --> 00:13:20,920 Speaker 1: lot of fear about how fast the economy is going 253 00:13:20,960 --> 00:13:24,000 Speaker 1: to grow. In fact, we're seeing wage growth holding steady 254 00:13:24,040 --> 00:13:26,920 Speaker 1: at over three percent. We're seeing job growth despite the 255 00:13:27,000 --> 00:13:29,920 Speaker 1: last despite the disappointing number the other day, you know, 256 00:13:30,000 --> 00:13:32,960 Speaker 1: hold at strong levels, and we're seeing confidence high. I 257 00:13:33,000 --> 00:13:36,240 Speaker 1: think the consumer has been oversold, so Brad. One of 258 00:13:36,280 --> 00:13:38,920 Speaker 1: the areas that has u tends to lead the market 259 00:13:38,960 --> 00:13:41,199 Speaker 1: both up and down, as we saw in the fourth quarter, 260 00:13:41,440 --> 00:13:44,320 Speaker 1: is big tech. And I think maybe what's changed a 261 00:13:44,360 --> 00:13:47,280 Speaker 1: little bit in the analysis is and the big technology 262 00:13:47,559 --> 00:13:50,040 Speaker 1: stocks that have driven the market has been maybe there's 263 00:13:50,040 --> 00:13:53,320 Speaker 1: a new regulatory risk fact that it needs to be 264 00:13:53,360 --> 00:13:56,680 Speaker 1: waited for these names as US regulators start taking a 265 00:13:56,679 --> 00:13:58,240 Speaker 1: look at big tech. How do you factor that in. 266 00:13:59,160 --> 00:14:01,720 Speaker 1: I think right now the assumption has been that growth 267 00:14:01,760 --> 00:14:04,000 Speaker 1: is infinite, no one will ever touch them. But remember 268 00:14:04,040 --> 00:14:07,360 Speaker 1: tech has weathered this before. We went through a phase 269 00:14:07,400 --> 00:14:10,160 Speaker 1: where there was no taxes on the internet and if 270 00:14:10,160 --> 00:14:12,760 Speaker 1: we impose taxes, it was going to destroy everything, and 271 00:14:12,800 --> 00:14:15,800 Speaker 1: of course it didn't. Tech has a wonderful ability to 272 00:14:15,880 --> 00:14:20,840 Speaker 1: kind of negotiate around government restrictions. Microsoft another good example. 273 00:14:20,880 --> 00:14:22,400 Speaker 1: It was going to be broken up, it was going 274 00:14:22,440 --> 00:14:25,440 Speaker 1: to be taken down. Now it's worth over a trillion dollars. 275 00:14:25,880 --> 00:14:28,120 Speaker 1: Companies can respond to these things. I think it's a 276 00:14:28,160 --> 00:14:31,280 Speaker 1: real concern, but you have to factor in company's ability 277 00:14:31,320 --> 00:14:34,320 Speaker 1: to stay ahead of the regulators, which thus far they've 278 00:14:34,360 --> 00:14:36,880 Speaker 1: got a good record. So Brett, I'm struck by the 279 00:14:36,920 --> 00:14:40,320 Speaker 1: optimistic tone that you're taking in this idea that growth 280 00:14:40,360 --> 00:14:42,600 Speaker 1: stocks of more room to run the consumer has been 281 00:14:42,680 --> 00:14:46,200 Speaker 1: over sold, impairing that with the idea that traders are 282 00:14:46,200 --> 00:14:49,040 Speaker 1: currently pricing in two and a half rate cuts by 283 00:14:49,040 --> 00:14:52,520 Speaker 1: the end of this year, basically indicating a slowing in 284 00:14:52,560 --> 00:14:55,240 Speaker 1: the economy and a capitulation by the Federal Reserve that 285 00:14:55,280 --> 00:14:57,880 Speaker 1: their policies are just too tight at this point. How 286 00:14:57,920 --> 00:15:01,680 Speaker 1: do you reconcile these two sort of fact features of 287 00:15:01,720 --> 00:15:04,240 Speaker 1: the market right now. Well, first of all, they call 288 00:15:04,280 --> 00:15:06,120 Speaker 1: me or here at the office, So I'm not a 289 00:15:06,200 --> 00:15:09,920 Speaker 1: natural optimist, okay, but when you look at what's going on, 290 00:15:10,200 --> 00:15:12,600 Speaker 1: when you look at we've never had a recession with 291 00:15:12,760 --> 00:15:14,800 Speaker 1: job growth as strong as it is, We've never had 292 00:15:14,800 --> 00:15:18,280 Speaker 1: a recession with consumer confidence where it is puto business 293 00:15:18,280 --> 00:15:21,960 Speaker 1: confidence and even the yolkerb Yes, it's recently inverted, but 294 00:15:22,040 --> 00:15:24,800 Speaker 1: typically that gives us at least twelve months, so we've 295 00:15:24,840 --> 00:15:27,000 Speaker 1: got at least a couple of quarters ahead of us. 296 00:15:27,320 --> 00:15:29,240 Speaker 1: And I think right now all of the bad news 297 00:15:29,400 --> 00:15:32,800 Speaker 1: is kind of pushed expectations down undoing. Yes, there's a 298 00:15:32,880 --> 00:15:34,960 Speaker 1: storm coming, but I don't think it's showing up any 299 00:15:34,960 --> 00:15:37,920 Speaker 1: time soon. But I think the FED actually gets that 300 00:15:38,200 --> 00:15:41,680 Speaker 1: they're being cautious, they're being responsible, but I don't see 301 00:15:41,680 --> 00:15:45,200 Speaker 1: anybody pushing the panic button just yet. So but I think, um, 302 00:15:45,240 --> 00:15:47,280 Speaker 1: if we if I were just to summarize kind of 303 00:15:47,320 --> 00:15:49,720 Speaker 1: the guests that we've heard that people on this show 304 00:15:49,720 --> 00:15:52,320 Speaker 1: over the last several weeks, in terms of gauging a 305 00:15:52,400 --> 00:15:55,120 Speaker 1: recession call, it seems to be the most people are 306 00:15:55,160 --> 00:15:59,800 Speaker 1: thinking about something in timing mid is that something that 307 00:16:00,240 --> 00:16:04,120 Speaker 1: is consistent with your thinking. I think that's the best bet. 308 00:16:04,200 --> 00:16:06,600 Speaker 1: Right now, we've seen the EO curve invert. If that 309 00:16:06,640 --> 00:16:09,200 Speaker 1: takes us out twelve months, that would be right in 310 00:16:09,240 --> 00:16:11,800 Speaker 1: the middle of the sweet spot. If we see consumer 311 00:16:11,840 --> 00:16:14,560 Speaker 1: confidence decay, that would also put us in the same spot. 312 00:16:14,880 --> 00:16:16,800 Speaker 1: And there are other things that say that's the place. 313 00:16:17,120 --> 00:16:19,040 Speaker 1: So the real question is not are we going to 314 00:16:19,080 --> 00:16:21,880 Speaker 1: have a recession? We are at some point, but will 315 00:16:21,920 --> 00:16:24,720 Speaker 1: it be in And I think that's reasonable. Okay, So 316 00:16:24,760 --> 00:16:27,640 Speaker 1: we're speaking with Brad McMillan, chief investment officer at Commonwealth 317 00:16:27,680 --> 00:16:31,480 Speaker 1: Financial Network overseeing a hundred and sixty one billion dollars. 318 00:16:31,560 --> 00:16:34,600 Speaker 1: You talk with a lot of advisors, Brad, a lot 319 00:16:34,640 --> 00:16:37,960 Speaker 1: of investors, and I'm just wondering, you know, if you 320 00:16:38,040 --> 00:16:41,000 Speaker 1: tell them this, what happens If they say to you, okay, 321 00:16:41,040 --> 00:16:43,600 Speaker 1: there might be a couple quarters left. When do I 322 00:16:43,680 --> 00:16:46,320 Speaker 1: get out ahead of a recession? Sort of when is 323 00:16:46,360 --> 00:16:49,960 Speaker 1: the sort of escape hatch open. Well. One of the 324 00:16:49,960 --> 00:16:52,080 Speaker 1: good ways to look at it is, and I actually 325 00:16:52,080 --> 00:16:54,600 Speaker 1: wrote a book about this, is it can make sense 326 00:16:54,640 --> 00:16:57,920 Speaker 1: to de risk when the market moves into moves below 327 00:16:57,960 --> 00:17:01,680 Speaker 1: it's two day moving average that historically is indicated a 328 00:17:01,800 --> 00:17:04,400 Speaker 1: time to worry, and in fact, right now we were 329 00:17:04,560 --> 00:17:07,160 Speaker 1: just below the two day moving average. So you could 330 00:17:07,240 --> 00:17:09,359 Speaker 1: argue you should be worried. But when you look at 331 00:17:09,359 --> 00:17:13,000 Speaker 1: the other fundamentals, we don't see sustained pullbacks without a recession. 332 00:17:13,320 --> 00:17:15,160 Speaker 1: So I'm going to look at a recession. I'm going 333 00:17:15,240 --> 00:17:18,239 Speaker 1: to see where consumer confidence is. I'm going to be 334 00:17:18,240 --> 00:17:21,919 Speaker 1: mostly looking at a recession. So, Brad, one of the 335 00:17:21,920 --> 00:17:24,640 Speaker 1: things you know that's been powering obviously powers the US 336 00:17:24,680 --> 00:17:27,600 Speaker 1: economy and is um is the consumer, and we've seen 337 00:17:27,760 --> 00:17:31,960 Speaker 1: generally a very strong consumer. We did have that surprisingly 338 00:17:32,040 --> 00:17:35,639 Speaker 1: weak jobs data on Friday. What is your view of 339 00:17:35,640 --> 00:17:39,320 Speaker 1: the consumer. I think the consumer still feels good. I 340 00:17:39,359 --> 00:17:41,560 Speaker 1: think the what's interesting when you look at that weak 341 00:17:41,640 --> 00:17:44,880 Speaker 1: jobs report. First of all, we've had week jobs reports 342 00:17:44,920 --> 00:17:48,119 Speaker 1: before and they've rebounded. We seem to be in nineteen 343 00:17:48,160 --> 00:17:50,680 Speaker 1: at a lower level of growth given that we've had 344 00:17:50,680 --> 00:17:53,920 Speaker 1: two week reports, but it's still a healthy level on average. 345 00:17:54,520 --> 00:17:56,960 Speaker 1: Second of all, you've seen wage growth hold up. There 346 00:17:57,040 --> 00:17:59,720 Speaker 1: was some talk about how wage growth pulled back, but 347 00:17:59,800 --> 00:18:02,840 Speaker 1: in fact, for the average working person, the production workers. 348 00:18:03,080 --> 00:18:06,639 Speaker 1: Wage growth is held up much better. So for most people, 349 00:18:06,680 --> 00:18:10,679 Speaker 1: they're spending ability is being enhanced because they're making more money. 350 00:18:10,880 --> 00:18:14,160 Speaker 1: There's more people working, and in fact, with lower interest rates, 351 00:18:14,320 --> 00:18:16,479 Speaker 1: they're going to be more able to buy things like 352 00:18:16,600 --> 00:18:20,040 Speaker 1: cars and houses. That can only be helpful. So in 353 00:18:20,080 --> 00:18:22,919 Speaker 1: the meantime, we do have this trade battle that seems 354 00:18:22,920 --> 00:18:25,399 Speaker 1: to be reaching in the background. The U. S And 355 00:18:25,480 --> 00:18:28,800 Speaker 1: China seemed to be hardening their lines depending on the day, 356 00:18:28,840 --> 00:18:32,640 Speaker 1: and I'm just wondering how you factor this into your assessment. Well, 357 00:18:32,680 --> 00:18:34,679 Speaker 1: there are two things going on here. First is a 358 00:18:34,760 --> 00:18:36,879 Speaker 1: direct damage and even there, when you look at it, 359 00:18:36,880 --> 00:18:39,600 Speaker 1: it's about thirty billion dollars right now in a twenty 360 00:18:39,640 --> 00:18:43,480 Speaker 1: trillion dollar economy. It's meaningful, but it's certainly not going 361 00:18:43,520 --> 00:18:46,399 Speaker 1: to break the bank. The indirect effects are going to 362 00:18:46,440 --> 00:18:48,560 Speaker 1: be the most meaningful, and there you're starting to see 363 00:18:48,600 --> 00:18:51,760 Speaker 1: reduced confidence. It will start to see more impact on 364 00:18:51,840 --> 00:18:56,000 Speaker 1: consumers pocketbooks over the next couple of months if tariffs 365 00:18:56,040 --> 00:18:59,080 Speaker 1: go up. So it's a headwind, but it's a headwind 366 00:18:59,119 --> 00:19:02,439 Speaker 1: that's only gonna raw I slowly, and it's it's not 367 00:19:02,440 --> 00:19:04,800 Speaker 1: going to be an earthquake. It's going to be a slow, 368 00:19:05,000 --> 00:19:08,280 Speaker 1: slow slope to slow the economy down a little bit. So, bro, 369 00:19:08,400 --> 00:19:11,080 Speaker 1: let's take if we get a bad headline, I mean 370 00:19:11,119 --> 00:19:12,919 Speaker 1: a bad headline out of China, because I think the 371 00:19:12,920 --> 00:19:15,320 Speaker 1: expectations are, oh, some deal will get done. But if 372 00:19:15,359 --> 00:19:17,200 Speaker 1: we get some bad news out of China, what do 373 00:19:17,200 --> 00:19:19,000 Speaker 1: you think the risk of the you the market is. 374 00:19:21,080 --> 00:19:24,359 Speaker 1: I honestly don't think China drives much of the market. 375 00:19:24,400 --> 00:19:27,080 Speaker 1: When you get Chinese headlines, you go back and you 376 00:19:27,160 --> 00:19:31,880 Speaker 1: compare the you compare how the US market does. We're 377 00:19:31,960 --> 00:19:36,240 Speaker 1: still a very closed economy relatively speaking, only about an 378 00:19:36,280 --> 00:19:39,680 Speaker 1: eighth of our economy is exposed outside the US. Now 379 00:19:39,720 --> 00:19:43,679 Speaker 1: there's more exposure to earnings, corporate earnings, but at the 380 00:19:43,680 --> 00:19:46,120 Speaker 1: same time, much of that damage has already been done 381 00:19:46,440 --> 00:19:49,320 Speaker 1: and you've seen diminishing effects as we get more and 382 00:19:49,359 --> 00:19:52,480 Speaker 1: more headlines. So right now, I think the market's expectations 383 00:19:52,480 --> 00:19:54,680 Speaker 1: are pretty well. I think there's more chance to beat 384 00:19:54,720 --> 00:19:58,720 Speaker 1: it than underwhelment. Just real quick indexes or stock selection. 385 00:19:58,920 --> 00:20:02,080 Speaker 1: What's your preference right now? Right now, I think it's 386 00:20:02,080 --> 00:20:08,520 Speaker 1: still that indexes, you have individual stocks. Um, there's certainly 387 00:20:08,560 --> 00:20:10,960 Speaker 1: some opportunities out there, but for the average investor, of 388 00:20:11,000 --> 00:20:13,800 Speaker 1: the index remains the way to go. Brad mcbellan, chief 389 00:20:13,840 --> 00:20:17,280 Speaker 1: investment officer at coming to WET the Financial Network overseeing 390 00:20:17,320 --> 00:20:33,959 Speaker 1: a hundred and sixty one billion dollars. Well, I've been 391 00:20:33,960 --> 00:20:37,400 Speaker 1: told that this Sunday is Father's Day, So in case 392 00:20:37,440 --> 00:20:39,919 Speaker 1: anyone out there is thinking about a gift, UM, I 393 00:20:40,000 --> 00:20:44,919 Speaker 1: have enough. Um, I don't know, socks, ties, I've I 394 00:20:44,920 --> 00:20:46,960 Speaker 1: think I've got all that kind of stuff. So what 395 00:20:47,000 --> 00:20:48,760 Speaker 1: do you want? I'm just saying, well, I'll tell you 396 00:20:48,800 --> 00:20:51,200 Speaker 1: what I think our next guest, I'll have some cool ideas. 397 00:20:51,280 --> 00:20:55,280 Speaker 1: Joseph Aboud, chief creative director for Men's Warehouse. He joins 398 00:20:55,359 --> 00:20:58,040 Speaker 1: us in our Bloomberg eleven three oh studios. Joseph, thanks 399 00:20:58,040 --> 00:20:59,679 Speaker 1: so much for joining us. It's really great to have 400 00:20:59,760 --> 00:21:02,000 Speaker 1: you year. So, first of all, we were just talking 401 00:21:02,040 --> 00:21:04,720 Speaker 1: off air. You know the question I had is our 402 00:21:05,000 --> 00:21:09,480 Speaker 1: millennials are younger generations? Are they dressing up? Yeah, that's 403 00:21:09,520 --> 00:21:11,760 Speaker 1: the most encouraging news. As we were just talking about 404 00:21:12,040 --> 00:21:14,520 Speaker 1: to see the young guy getting dressed up again. Maybe 405 00:21:14,560 --> 00:21:18,200 Speaker 1: his dad lived through that casual experience and so now 406 00:21:18,240 --> 00:21:21,560 Speaker 1: he's finding his own space and he's doing custom suits 407 00:21:21,600 --> 00:21:24,040 Speaker 1: and it's a very big part of our business. So 408 00:21:24,080 --> 00:21:27,639 Speaker 1: the suit isn't dead, it's just morphed. They're wearing it differently. 409 00:21:27,680 --> 00:21:30,280 Speaker 1: Maybe the trousers a little shorter, the silhouettes are a 410 00:21:30,280 --> 00:21:33,560 Speaker 1: little leaner, but guys are getting dressed. So that's that's 411 00:21:33,560 --> 00:21:37,440 Speaker 1: really terrific. So what's the age group? Because I remember 412 00:21:37,480 --> 00:21:39,800 Speaker 1: back in the say six months ago, when we were 413 00:21:39,800 --> 00:21:42,440 Speaker 1: talking about yoga, were coming back and wondering how jim 414 00:21:42,440 --> 00:21:45,040 Speaker 1: ware was going to sort of infiltrate the male species. 415 00:21:45,040 --> 00:21:47,720 Speaker 1: And I'm just wondering, you know, is that is that over? 416 00:21:47,760 --> 00:21:49,719 Speaker 1: Because lul Lemon seems to be doing just fine. Well, 417 00:21:49,720 --> 00:21:52,639 Speaker 1: they're doing great. I think that's a lifestyle thing, but 418 00:21:52,720 --> 00:21:55,200 Speaker 1: I think that's just one piece of a guy's wardrobe. 419 00:21:55,600 --> 00:21:57,359 Speaker 1: Every guy is going to find a moment when he 420 00:21:57,400 --> 00:22:00,440 Speaker 1: needs to get dressed up. Younger or more staff published. 421 00:22:00,680 --> 00:22:03,359 Speaker 1: And so that young guy is graduating college and looking 422 00:22:03,440 --> 00:22:06,600 Speaker 1: to set himself for his future, is looking I need 423 00:22:06,600 --> 00:22:08,560 Speaker 1: two or three suits for a wedding, a funeral, a 424 00:22:08,640 --> 00:22:11,440 Speaker 1: job interview. So it's just that they're doing it their 425 00:22:11,480 --> 00:22:14,920 Speaker 1: own way. And it's very difficult to buy suits online. 426 00:22:15,320 --> 00:22:17,840 Speaker 1: You really need to go in and touch, feel and 427 00:22:17,880 --> 00:22:22,119 Speaker 1: get fitted. So having a retail locations is crucial to 428 00:22:22,160 --> 00:22:25,040 Speaker 1: get the guy to understand how it suits. And everybody 429 00:22:25,119 --> 00:22:28,240 Speaker 1: type is different, let's be sure about that. So just 430 00:22:28,320 --> 00:22:30,600 Speaker 1: it is Father's Day. So what what would you suggest 431 00:22:30,680 --> 00:22:34,680 Speaker 1: would be like a really good, thoughtful, cool, fun gift. Yeah, 432 00:22:34,720 --> 00:22:37,879 Speaker 1: I mean they're all different. Well here's the thing. What 433 00:22:38,000 --> 00:22:41,000 Speaker 1: a great and we found this that guys are getting 434 00:22:41,160 --> 00:22:45,359 Speaker 1: custom suits as gifts the experience. It's not actually purchased, 435 00:22:45,560 --> 00:22:47,399 Speaker 1: but it's a great gift. But if you want something 436 00:22:47,400 --> 00:22:50,720 Speaker 1: more affordable, linen is a great fabric for spring summer. 437 00:22:51,080 --> 00:22:53,520 Speaker 1: So the linen shirt is always a great piece of 438 00:22:53,600 --> 00:22:57,399 Speaker 1: white linen shirt. It's fresh. Anything that's more personal to 439 00:22:57,480 --> 00:22:59,720 Speaker 1: the dad. Maybe some dads are more dressed up. Some 440 00:22:59,840 --> 00:23:01,880 Speaker 1: day ads are a little more casual. So it really 441 00:23:01,920 --> 00:23:04,639 Speaker 1: depends on the direction you want to take. Where in 442 00:23:05,000 --> 00:23:08,639 Speaker 1: the United States that you're actually seeing younger people dressing 443 00:23:08,720 --> 00:23:10,879 Speaker 1: up more. Yeah, I think if you look at the cities, 444 00:23:10,920 --> 00:23:12,920 Speaker 1: I mean obviously just looking at the building that we're 445 00:23:12,960 --> 00:23:14,800 Speaker 1: in today, seeing all the young guys. There are a 446 00:23:14,840 --> 00:23:17,399 Speaker 1: lot of guys in shirts and trousers, but there are 447 00:23:17,440 --> 00:23:20,080 Speaker 1: a lot of guys and jackets and trousers. Some will tie, 448 00:23:20,119 --> 00:23:23,159 Speaker 1: some without But we find that throughout, including that the 449 00:23:23,240 --> 00:23:25,600 Speaker 1: dashing man next to me, of course, and it's great 450 00:23:26,520 --> 00:23:28,280 Speaker 1: dressed in a short and tie. But you know, there 451 00:23:28,359 --> 00:23:30,959 Speaker 1: is something wonderful. But when a guy gets dressed, he 452 00:23:31,080 --> 00:23:34,280 Speaker 1: feels different. I always say, a guy feels like James Bond. 453 00:23:34,320 --> 00:23:35,720 Speaker 1: You know, you put on a great suit or a 454 00:23:35,720 --> 00:23:39,000 Speaker 1: great texedough there's something really special about that. It's now 455 00:23:39,320 --> 00:23:42,560 Speaker 1: guys are wearing suits because they want to, not because 456 00:23:42,600 --> 00:23:44,879 Speaker 1: they have to. And that's the distinction. It's not a 457 00:23:44,960 --> 00:23:47,280 Speaker 1: uniform anymore. Joseph. I think one of the great things 458 00:23:47,359 --> 00:23:49,960 Speaker 1: about your brand and your company over the years that 459 00:23:50,040 --> 00:23:52,679 Speaker 1: just a good Brandon line of clothing is it's actually 460 00:23:52,720 --> 00:23:54,800 Speaker 1: manufactured here in the United States. Can you tell us 461 00:23:54,800 --> 00:23:57,120 Speaker 1: about that? Yeah, yeah, no, that's I think of all 462 00:23:57,160 --> 00:24:00,080 Speaker 1: of the things, of all my accomplishments are factory in 463 00:24:00,119 --> 00:24:03,560 Speaker 1: New Bedford, Massachusetts. We have eight hundred people there and 464 00:24:03,600 --> 00:24:07,320 Speaker 1: we produce about three hundred thousand high quality tailored garments 465 00:24:07,359 --> 00:24:11,440 Speaker 1: a year using Zenia fabric, lor Piano Fabric, all the 466 00:24:11,520 --> 00:24:14,879 Speaker 1: high end Italian fabric. So uh and it's grown. The 467 00:24:14,920 --> 00:24:18,919 Speaker 1: first season I launched in we made two thousand suits 468 00:24:18,960 --> 00:24:21,280 Speaker 1: there and now we're up to about three hundred and 469 00:24:21,320 --> 00:24:24,639 Speaker 1: forty thousand units, so it's it's it's a great place. 470 00:24:25,040 --> 00:24:28,119 Speaker 1: I think most people don't know that. But it's not 471 00:24:28,200 --> 00:24:30,800 Speaker 1: just about being made in America's being made well in America. 472 00:24:30,960 --> 00:24:33,679 Speaker 1: That's important. So you're part of tailored brands, and I 473 00:24:33,680 --> 00:24:36,000 Speaker 1: know that they did just appoint a new chief executive 474 00:24:36,000 --> 00:24:39,439 Speaker 1: officer within the past few months, Janish Lothi, and his 475 00:24:39,520 --> 00:24:41,960 Speaker 1: background is more in the casual wear, and I'm wondering 476 00:24:42,320 --> 00:24:46,080 Speaker 1: how that sort of meshed with your understanding of kind 477 00:24:46,080 --> 00:24:48,640 Speaker 1: of the future. How is that kind of going forward? Well, 478 00:24:48,680 --> 00:24:53,920 Speaker 1: I think Denish is Uh is highly intelligent, energized CEO. 479 00:24:54,160 --> 00:24:57,280 Speaker 1: We love having him. I think he's learned about what 480 00:24:57,320 --> 00:24:59,560 Speaker 1: we do in tailoring. He can fit a suit now, 481 00:24:59,800 --> 00:25:03,320 Speaker 1: so he really immerses himself in the experience. And when 482 00:25:03,359 --> 00:25:06,119 Speaker 1: we talk about casual and dressing, I think there's a 483 00:25:06,160 --> 00:25:09,800 Speaker 1: myth to some degree. As a woman, you probably know 484 00:25:09,880 --> 00:25:13,920 Speaker 1: that women have one wardrobe. Men have two wardrobes. They 485 00:25:13,920 --> 00:25:17,600 Speaker 1: haven't learned to integrate their wardrobes, and so when we 486 00:25:17,640 --> 00:25:20,240 Speaker 1: talk about casual, you can put a casual piece in 487 00:25:20,280 --> 00:25:22,560 Speaker 1: with a suit. So we're trying to teach men about 488 00:25:22,600 --> 00:25:26,720 Speaker 1: lifestyle dressing, and that does include suits, dressy clothing, but 489 00:25:26,840 --> 00:25:29,160 Speaker 1: it also includes sports wear. So I don't think there's 490 00:25:29,160 --> 00:25:31,480 Speaker 1: a one way or another to dress. I think it 491 00:25:31,520 --> 00:25:35,200 Speaker 1: should be all available to man, such as you mentioned earlier, 492 00:25:35,240 --> 00:25:37,919 Speaker 1: online shopping and how that's you know, there's challenges. They 493 00:25:37,920 --> 00:25:41,160 Speaker 1: are certainly in fine clothing. You talked about the importance 494 00:25:41,160 --> 00:25:43,720 Speaker 1: of actually touching and feeling it. Uh. You guys have 495 00:25:43,760 --> 00:25:47,480 Speaker 1: a new story you opened recently right your for your collection. Yes, 496 00:25:47,600 --> 00:25:50,439 Speaker 1: it's our it's our flagship store or black label collection 497 00:25:50,480 --> 00:25:53,040 Speaker 1: on forty ninth and Madison. And what I really wanted 498 00:25:53,080 --> 00:25:55,359 Speaker 1: to do is bring back the experience of the great 499 00:25:55,440 --> 00:25:59,840 Speaker 1: specialty store, great product, one of a kind pieces, service, 500 00:26:00,040 --> 00:26:03,440 Speaker 1: style and information. And that's always been my goal is 501 00:26:03,480 --> 00:26:06,080 Speaker 1: to be able to help men because so often you 502 00:26:06,160 --> 00:26:08,600 Speaker 1: walk into a store, you can't get the proper help, 503 00:26:08,640 --> 00:26:11,359 Speaker 1: you can't get the right fit. So service is a 504 00:26:11,440 --> 00:26:14,000 Speaker 1: huge part of the experience for guys. I love that. 505 00:26:14,080 --> 00:26:16,800 Speaker 1: When it comes to the experience for women, people talk 506 00:26:16,840 --> 00:26:19,680 Speaker 1: about manicures and and uh and getting your hair done 507 00:26:19,680 --> 00:26:22,879 Speaker 1: in bloods. But with with respect to a male store, 508 00:26:22,920 --> 00:26:25,320 Speaker 1: it's just simply the service. Is there anything else any 509 00:26:25,359 --> 00:26:29,280 Speaker 1: other high touch elements of being served in a store. Yeah, 510 00:26:29,359 --> 00:26:31,280 Speaker 1: you know, the the whole experience for guys. You know, 511 00:26:31,359 --> 00:26:34,400 Speaker 1: lifestyle for guys. We talk about the barbershop, we talk 512 00:26:34,480 --> 00:26:38,359 Speaker 1: about the bar those things that are important but really 513 00:26:38,400 --> 00:26:41,640 Speaker 1: for guys. And it's interesting how men shop. They're there, 514 00:26:41,720 --> 00:26:44,240 Speaker 1: they're laser focused. They want to know about the fabric, 515 00:26:44,359 --> 00:26:46,520 Speaker 1: they want to know about the fit, and it's so 516 00:26:46,560 --> 00:26:48,600 Speaker 1: important to give them that information. You know, here's a 517 00:26:48,640 --> 00:26:52,320 Speaker 1: fabric that is from Italy or from the UK. And 518 00:26:52,359 --> 00:26:54,040 Speaker 1: also what you want to do is make sure that 519 00:26:54,080 --> 00:26:56,200 Speaker 1: you can tell them about the experience and having them 520 00:26:56,240 --> 00:26:58,399 Speaker 1: enjoy it. Make it a process for the guy and 521 00:26:58,520 --> 00:27:01,600 Speaker 1: his wife or girlfriend or mom whatever. Jessepha Food, thank 522 00:27:01,640 --> 00:27:03,600 Speaker 1: you so much for being with us. Thank you guys 523 00:27:03,680 --> 00:27:06,879 Speaker 1: for having me again. Jesseph's food designer and chief creative 524 00:27:06,920 --> 00:27:11,200 Speaker 1: director of Men's Warehouse. Thanks for listening to the Bloomberg 525 00:27:11,240 --> 00:27:13,480 Speaker 1: P and L podcast. You can subscribe and listen to 526 00:27:13,520 --> 00:27:16,760 Speaker 1: interviews at Apple Podcasts or whatever podcast platform you prefer. 527 00:27:16,960 --> 00:27:19,600 Speaker 1: I'm Paul Sweeney. I'm on Twitter at pt Sweeney. I'm 528 00:27:19,640 --> 00:27:22,400 Speaker 1: Lisa Abram Woyds. I'm on Twitter at Lisa Abram wits 529 00:27:22,400 --> 00:27:25,280 Speaker 1: one before the podcast. You can always catch us worldwide. 530 00:27:25,240 --> 00:27:26,240 Speaker 1: I'm Bloomberg Radio.