WEBVTT - Improving Coronavirus Testing 0:00:00.440 --> 0:00:02.960 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:03.040 --> 0:00:05.520 Jason Kelly. We're here every day bringing you the latest 0:00:05.519 --> 0:00:09.800 news from the world's of business and finance, plus technology, politics, economics, 0:00:09.840 --> 0:00:13.480 all harnessing the power of Bloomberg Business Week reporters and editors, 0:00:13.480 --> 0:00:16.759 not to mention our journalists and analysts more than a 0:00:16.800 --> 0:00:19.520 hundred and twenty countries. You can download Bloomberg Business Week 0:00:19.560 --> 0:00:22.439 on iTunes, SoundCloud, or Bloomberg dot Com. You can also 0:00:22.480 --> 0:00:24.919 listen to our radio show weekdays at two pm Eastern 0:00:25.000 --> 0:00:28.280 only on Bloomberg Radio. We want to move to our 0:00:28.320 --> 0:00:32.600 own expert here. Brian Granuelotti is the chief executive officer 0:00:32.640 --> 0:00:35.440 of Atlantic Health System, joining us on the phone from Morristown, 0:00:35.760 --> 0:00:39.360 New Jersey. Obviously a state like here in New York 0:00:39.400 --> 0:00:42.360 that has been hit very hard. New Jersey's death rate 0:00:42.479 --> 0:00:46.000 actually eclipsing the daily death rate, eclipsing New York's, I 0:00:46.000 --> 0:00:49.520 believe for the first time today. So clearly a lot 0:00:49.600 --> 0:00:51.559 going on, and a lot going on as we think 0:00:51.600 --> 0:00:56.360 about what happens next, even in terms of reopening the economy. Brian, 0:00:56.520 --> 0:00:59.200 really good to have you with Carol and myself. Thank 0:00:59.240 --> 0:01:02.639 you so give us a sense of what you are 0:01:02.720 --> 0:01:05.959 seeing on the front lines there, what is it like, 0:01:06.520 --> 0:01:10.200 and what's maybe new and different today or this week 0:01:10.720 --> 0:01:14.160 versus in the preceding weeks. Sure, you know you you 0:01:14.200 --> 0:01:17.800 had mentioned the differences between New York and New Jersey, 0:01:17.840 --> 0:01:22.080 and I gotta tell you that, Um, you gotta follow 0:01:22.120 --> 0:01:26.520 the transit lines, because what happened in New York followed 0:01:26.560 --> 0:01:29.400 the transit down into New Jersey. And we have been 0:01:29.440 --> 0:01:33.000 really overwhelmed, as you described here, uh, in New Jersey, 0:01:33.040 --> 0:01:36.600 particularly in northern New Jersey. So today at our command 0:01:36.680 --> 0:01:39.520 center call, we had five hundred and forty four patients 0:01:39.560 --> 0:01:43.920 with COVID in our hospitals and um, about thirty five 0:01:44.040 --> 0:01:48.120 percent of those patients are still on ventilators. So we 0:01:48.160 --> 0:01:51.520 have a very sick patient population. But that's down from 0:01:51.600 --> 0:01:54.920 our peak, which was on April ninth, where we actually 0:01:54.960 --> 0:01:58.400 had eight hundred and thirty four patients. So we're down 0:01:58.440 --> 0:02:03.040 about thirty but it's still an enormous number of patients. 0:02:04.240 --> 0:02:07.080 You know. As we've gone through this process, Brian, I mean, 0:02:07.360 --> 0:02:12.840 what have we learned about being prepared next time, you know, 0:02:13.200 --> 0:02:15.400 and what we need to do in terms of really 0:02:15.600 --> 0:02:19.760 shoring up our health system. And access for everyone. You know, 0:02:19.800 --> 0:02:24.160 there's a there's a famous statement it's about the economy. Um, well, 0:02:24.200 --> 0:02:27.880 it's about the testing. I mean, our major lesson here 0:02:28.000 --> 0:02:32.120 is testing was a problem at the beginning. Testing continues 0:02:32.160 --> 0:02:34.919 to be a problem today. And if we don't get 0:02:34.960 --> 0:02:38.720 this testing right as we go into recovery, we're going 0:02:38.760 --> 0:02:42.040 to have a rebound effect and we're going to be 0:02:42.400 --> 0:02:44.639 back in the soup again, and we have to be very, 0:02:44.760 --> 0:02:47.880 very careful about that. The second thing that we've learned 0:02:48.000 --> 0:02:52.000 is that just in time delivery doesn't work in a pandemic, 0:02:52.360 --> 0:02:56.520 and our supply chain is really broken right now. Um, 0:02:57.240 --> 0:03:00.640 we went through periods of enormous panic making sure that 0:03:00.680 --> 0:03:03.720 we had the right kind of protective equipment for our 0:03:03.880 --> 0:03:08.520 team members to keep them healthy and safe. Ventilators were 0:03:08.600 --> 0:03:10.919 a big issue over a period of time. I can 0:03:10.960 --> 0:03:15.040 tell you just uh a weekend we spent scanning the 0:03:15.240 --> 0:03:18.359 nation for ventilators and and being able to have many 0:03:18.400 --> 0:03:20.840 of our colleagues in different parts of the country support those. 0:03:21.360 --> 0:03:24.760 And it's the same thing with medications, particularly those medications 0:03:24.760 --> 0:03:28.040 that support people on ventilators. So what we've learned is 0:03:28.080 --> 0:03:32.160 we've really got to fix this supply chain, we've got 0:03:32.160 --> 0:03:35.200 to have more control over it because you know, COVID 0:03:35.360 --> 0:03:38.680 is not going to go away until we have a vaccine, 0:03:39.280 --> 0:03:41.640 and that could be a year and a half or 0:03:42.000 --> 0:03:45.840 two years away. So we have just threaded the needle 0:03:46.160 --> 0:03:50.360 here in UH, New Jersey. The governor has been a 0:03:50.400 --> 0:03:55.160 fantastic ally and advocate for us, particularly with the federal 0:03:55.200 --> 0:03:58.720 government and the stockpiles. But we've learned a lot and 0:03:58.760 --> 0:04:01.480 we've got to make sure that at UH we continue 0:04:01.480 --> 0:04:03.960 to use the tools that we have, the predominant one 0:04:04.000 --> 0:04:06.800 being social distancing. Right now, so Brian, I want to 0:04:06.800 --> 0:04:08.880 talk a little bit more about testing it if we could, 0:04:08.960 --> 0:04:11.160 because I feel like we want to go at level 0:04:11.200 --> 0:04:15.360 down and understand both testing for the disease and also 0:04:15.480 --> 0:04:18.599 the zoological, the the antibody testing. What do we know 0:04:18.800 --> 0:04:22.000 now and what is important for our listeners to know 0:04:22.200 --> 0:04:25.280 in terms of what they should be doing, what they 0:04:25.320 --> 0:04:28.880 should expect, especially you know, in and around your hospital 0:04:29.000 --> 0:04:32.800 system over the coming weeks. So the frustration that we've 0:04:32.839 --> 0:04:35.760 had with the diagnostic tests, in other words, do you 0:04:35.800 --> 0:04:38.840 have COVID or not? Is we needed to get that 0:04:39.000 --> 0:04:40.960 right at the point of care so there wouldn't be 0:04:41.080 --> 0:04:47.560 delays in providing a definitive diagnosis because many patients come 0:04:47.640 --> 0:04:52.440 into the health care system UH and they don't need 0:04:52.480 --> 0:04:57.920 to be hospitalized about so so when they go back, 0:04:57.960 --> 0:04:59.839 they need to know if they have a diagnogosis or not, 0:05:00.040 --> 0:05:03.760 they know whether to self quarantine. That diagnosis wasn't coming 0:05:03.800 --> 0:05:06.400 back for three or four days, and that was a 0:05:06.520 --> 0:05:10.200 big problem of the patients that go into the hospital. 0:05:10.560 --> 0:05:13.919 We have to treat everybody is COVID positive until we 0:05:14.000 --> 0:05:19.640 have a definitive diagnosis. And in that instance, about of 0:05:19.640 --> 0:05:21.680 the patients that would go into the hospital and be 0:05:21.800 --> 0:05:25.200 tested UM would be under UH. We wouldn't have a 0:05:25.240 --> 0:05:28.440 test result on them. So we were burning through all 0:05:28.480 --> 0:05:32.680 that scarce protective equipment because we had to treat everybody 0:05:32.720 --> 0:05:35.679 the same. So again we have to have a point 0:05:35.760 --> 0:05:39.640 of care test on that. And then going forward as 0:05:39.680 --> 0:05:43.719 we open up healthcare and start doing some of the 0:05:43.760 --> 0:05:46.520 care that's been tent up, and you've seen articles written 0:05:46.520 --> 0:05:49.880 recently about that UM where people are just staying home 0:05:49.920 --> 0:05:52.200 instead of engaging in the health system, which they need 0:05:52.240 --> 0:05:55.200 to do. We're gonna need to provide that test at 0:05:55.240 --> 0:05:59.719 that preoperative time or pre procedure time in order to 0:05:59.760 --> 0:06:02.720 make sure that we know those patients do not have COVID, 0:06:03.200 --> 0:06:06.040 so that diagnostic tests are going to have to be 0:06:06.200 --> 0:06:09.159 at the spot you're doing the care and they need 0:06:09.200 --> 0:06:12.360 to be able to be determined right away. And when 0:06:12.400 --> 0:06:14.200 you say point of care, I just want to make 0:06:14.200 --> 0:06:15.720 sure that I understand when you say point of care 0:06:15.760 --> 0:06:19.120 that that could also include a pharmacy or someplace like that, 0:06:19.240 --> 0:06:22.600 right or am I misunderstanding, Well, if you're coming in 0:06:22.640 --> 0:06:25.279 for a diagnostic test, or if you're coming in for 0:06:25.400 --> 0:06:28.120 a surgery, it would be in a facility a lot 0:06:28.120 --> 0:06:32.760 of that where you do your preoperative testing. Um. The 0:06:32.839 --> 0:06:36.000 second piece that you talked about antibody testing. That's going 0:06:36.040 --> 0:06:40.320 to be important as it provides some clarification on whether 0:06:40.400 --> 0:06:44.000 or not you have had the disease previously. Now, over 0:06:44.040 --> 0:06:47.520 the last week you've seen U two things happen in 0:06:47.520 --> 0:06:51.280 that space which are concerning. One is that we are 0:06:51.320 --> 0:06:56.599 getting an incredible variation of results on the different tests 0:06:56.600 --> 0:06:58.600 that are being done, the types of tests that are 0:06:58.640 --> 0:07:03.200 being done, and it's really caused some pause and some concern. 0:07:03.960 --> 0:07:06.400 But but clearly we've got to run that down because 0:07:06.400 --> 0:07:09.000 what we don't want to do is give somebody an 0:07:09.040 --> 0:07:12.080 impression that they have built up the immunities. And then 0:07:12.080 --> 0:07:14.920 the second piece that's been of concern was the was 0:07:14.960 --> 0:07:17.720 the feedback we got from the World Health Organization over 0:07:17.760 --> 0:07:22.720 the weekend that perhaps having those antibodies does not necessarily 0:07:22.760 --> 0:07:27.080 protect you again from getting this virus. I think more 0:07:27.120 --> 0:07:30.000 work needs to be done in that space, because the 0:07:30.160 --> 0:07:33.880 consequence of thinking your bulletproof on this and you're not 0:07:33.880 --> 0:07:39.480 going to get it again, uh, is a problem. So Okay, 0:07:39.640 --> 0:07:41.760 I don't want to get all dystopian on everybody, but 0:07:41.920 --> 0:07:45.400 Brian described to me, then what our world is like 0:07:45.560 --> 0:07:48.840 going forward, is it we all just have to get 0:07:48.920 --> 0:07:53.160 used to a lot more testing, wearing masks and potentially 0:07:53.160 --> 0:07:56.360 I mean, you got you oversee a massive hospital system, 0:07:56.440 --> 0:07:59.920 seven hospitals in New Jersey, I think roughly sev men 0:08:00.160 --> 0:08:03.840 ers um almost five thousand physicians, eleven counties. You know, 0:08:03.920 --> 0:08:07.520 five million people you know have access to your system. 0:08:07.640 --> 0:08:10.720 Is it a case that you know, how we go 0:08:10.800 --> 0:08:13.520 about getting procedures, It's going to be very different and 0:08:13.560 --> 0:08:14.800 we have to just get used to it. That's going 0:08:14.840 --> 0:08:17.240 to become the new norm. And we also will have 0:08:17.280 --> 0:08:21.560 health facilities that are separated into virus where people have 0:08:21.640 --> 0:08:25.400 the virus and those places that do not. Yeah, the first, 0:08:25.440 --> 0:08:27.760 the first thing I want to say is that our 0:08:27.840 --> 0:08:32.560 hospitals are safe. UM. I would I would argue our 0:08:32.600 --> 0:08:35.800 hospitals are very safe compared to some of the other 0:08:36.120 --> 0:08:39.800 things we engage in um UH in our communities as 0:08:39.840 --> 0:08:43.400 we UM seek our activities of daily living UM so 0:08:43.480 --> 0:08:46.480 we're we're safe to begin with. But as we think 0:08:46.520 --> 0:08:50.280 about needing to continue to care for this virus UM 0:08:50.480 --> 0:08:53.360 we will as our volumes go down in our hospitals, 0:08:54.160 --> 0:08:58.520 these patients will be contained in very specific areas where 0:08:58.559 --> 0:09:02.240 they won't be interact with other patients. The team members 0:09:02.280 --> 0:09:04.840 that will care for them will care for those patients 0:09:04.880 --> 0:09:09.360 and not care for other patients during their shifts. And 0:09:09.600 --> 0:09:13.400 we need to make sure that UM we have safe 0:09:13.400 --> 0:09:18.439 pathways through our organizations so that we don't have people 0:09:18.559 --> 0:09:23.000 intersecting UH inadvertently, and all those steps are being put 0:09:23.040 --> 0:09:27.680 in place literally as we speak. We also UM have 0:09:28.240 --> 0:09:31.000 when we do turn a unit over and have it 0:09:31.120 --> 0:09:34.440 become an on COVID unit, we do a terminal cleaning 0:09:34.440 --> 0:09:37.680 in there and make sure that everything is safe, so 0:09:37.679 --> 0:09:41.240 so patients shouldn't be safe or shouldn't be scared, and 0:09:41.240 --> 0:09:44.000 there are safe. The thing that we need to think 0:09:44.000 --> 0:09:46.280 about though, to your question, is this will be a 0:09:46.320 --> 0:09:49.640 period of wearing masks. This will be a period of 0:09:49.720 --> 0:09:52.800 maintaining social distance. This will be a period where you 0:09:52.840 --> 0:09:57.400 can't bring your entire family in on your office visit. Um. Uh. 0:09:57.440 --> 0:10:00.160 Those are the kinds of things that we're doing. We're 0:10:00.160 --> 0:10:04.040 going to continue to really use telehealth in a big way, um. 0:10:04.080 --> 0:10:07.120 But we're also in the process of opening our offices. 0:10:07.720 --> 0:10:10.000 You mentioned we have a lot of physician practices, and 0:10:10.080 --> 0:10:14.000 we're doing that also. And so I guess just to 0:10:14.000 --> 0:10:16.680 to drill down at a further level, how long does 0:10:16.920 --> 0:10:20.280 the sort of era of social distance and masking and 0:10:20.720 --> 0:10:23.719 all of that last. In your estimation, Brian, is it 0:10:23.840 --> 0:10:26.120 till we have a vaccine or is what do we 0:10:26.160 --> 0:10:29.600 need to see in order for you know, life to 0:10:29.800 --> 0:10:35.840 even optically look something like close to normal, you know, 0:10:36.040 --> 0:10:39.360 in a perfect world, that's the answer. It's a vaccine. 0:10:39.920 --> 0:10:42.120 But the but the reality is that that's going to 0:10:42.200 --> 0:10:44.600 take a while. So we've got to continue to pursue 0:10:44.600 --> 0:10:47.079 a couple of things. One is we've got to pursue 0:10:47.120 --> 0:10:51.440 effective treatments for this disease, because that will go a 0:10:51.440 --> 0:10:54.760 long way in itself to taking the scare out of 0:10:54.760 --> 0:10:58.640 this UM. The second thing that we've got to work 0:10:58.720 --> 0:11:02.199 on is just contin enuing to educate the public about 0:11:02.200 --> 0:11:04.839 the importance of washing your hands and using a lot 0:11:04.880 --> 0:11:07.600 of common sense, you know, the kinds of things that 0:11:07.760 --> 0:11:10.800 you you learned when you were a kid, UM, and 0:11:11.280 --> 0:11:14.240 make sure that we're adhering to those things. But we 0:11:14.320 --> 0:11:17.199 also are going to be in a position where our 0:11:17.240 --> 0:11:18.960 lives are going to be a lot different. You know, 0:11:19.040 --> 0:11:25.599 I think about restaurants, you know, um, paper disposable menus, um. 0:11:25.679 --> 0:11:28.680 Instead of something that seats a hundred, it'll seat fifty 0:11:28.840 --> 0:11:34.319 and those all have huge uh impacts on those various industries. 0:11:35.000 --> 0:11:37.679 But we will be in a different place. But the 0:11:37.800 --> 0:11:40.440 key thing, again, just to go back to it, is 0:11:40.559 --> 0:11:43.679 we've got to we've got to be able to have 0:11:43.840 --> 0:11:46.920 the testing available so that when we do get an outbreak, 0:11:47.480 --> 0:11:49.880 we are on that in doing the tracing we need 0:11:49.960 --> 0:11:53.320 to do. And that is kind of the blocking and 0:11:53.400 --> 0:11:57.360 tackling of public health system. Ryan just just got about 0:11:57.360 --> 0:12:00.480 thirty seconds here are you bracing your team and preparing 0:12:00.480 --> 0:12:03.360 your team though potentially for another second wave here and 0:12:03.480 --> 0:12:07.080 just gotta be quick. Yes, we are we are absolutely 0:12:07.120 --> 0:12:10.280 preparing for that wave and we will pray that it 0:12:10.320 --> 0:12:13.080 doesn't happen, but we will be there as we always 0:12:13.160 --> 0:12:16.480 are to serve our communities safely, and that's really what 0:12:16.520 --> 0:12:19.640 we're all about. All Thank you so much. We really 0:12:19.640 --> 0:12:23.000 appreciate it. Thank you so much, Brian granielatia really thoughtful conversation, 0:12:23.400 --> 0:12:26.560 realistic conversation about where we are on the medical front 0:12:26.840 --> 0:12:29.199 as it comes to the health system. Carol, he is 0:12:29.240 --> 0:12:32.080 the CEO of Atlantic Health System, joining us on the 0:12:32.080 --> 0:12:34.200 phone from Morristown, and you're a great state of New 0:12:34.280 --> 0:12:36.160 Jersey and my great state of New Jersey and just 0:12:36.240 --> 0:12:38.000 understanding a little bit more of what life is like 0:12:38.080 --> 0:12:40.600 on the other side. And I think, you know, the 0:12:40.600 --> 0:12:43.360 more information we know, the more secure we will feel 0:12:43.720 --> 0:12:46.880 about kind of re entering um. And so it's really 0:12:46.880 --> 0:12:48.680 great to get some time with him. All right, coming up, 0:12:48.720 --> 0:12:52.360 we're going to check in on an interesting story that's 0:12:52.480 --> 0:12:54.960 in Bloomberg Business Week magazine this week, and it all 0:12:54.960 --> 0:12:57.840 has to do with that active passive management kind of 0:12:57.880 --> 0:13:00.600 at it again. I gotta say, I'm just not sure 0:13:00.600 --> 0:13:02.560 how this is going to go today. It's just it's 0:13:02.600 --> 0:13:05.640 just one of those days. It's one of those limits Tuesday, 0:13:06.400 --> 0:13:08.800 and we're going with it as much as we can. 0:13:08.920 --> 0:13:12.680 Joel Weber is joining us, as he does most days 0:13:12.840 --> 0:13:14.880 at this time. He, of course is the editor Bloomberg 0:13:14.920 --> 0:13:17.640 Business Week, as is Justine, the lead markets and quant 0:13:17.800 --> 0:13:21.160 reporter quantz reporter for Bloomberg, joining us on the phone 0:13:21.440 --> 0:13:24.840 from London and Joel, I feel like this is almost 0:13:24.840 --> 0:13:27.319 like a little throwback to your time as editor of 0:13:27.360 --> 0:13:30.720 Bloomberg Markets. Like I started, I'm digging this, I'm digging 0:13:30.760 --> 0:13:33.800 in it. Tell us, tell us about this story. So 0:13:34.240 --> 0:13:37.760 there was a kind of a Bloomberg News Call regular 0:13:37.840 --> 0:13:42.200 call about a week ago, and Justina kind of piped 0:13:42.240 --> 0:13:44.520 in with this idea that she was kind of noodling, 0:13:44.920 --> 0:13:47.200 and as she was describing it, I was just like, Wow, 0:13:47.320 --> 0:13:50.760 just sounds so perfect for Bloomberg Markets. I want it 0:13:50.760 --> 0:13:53.880 for Bloomberg Business and I want it for Bloomberg Business Week. Um, 0:13:53.880 --> 0:13:57.200 and it's really about small versus big companies, which is 0:13:57.240 --> 0:13:59.640 one that I think, you know, we're we're gonna obviously 0:13:59.720 --> 0:14:02.160 spend a couple of minutes talking about here. It's also 0:14:02.200 --> 0:14:04.800 going to be I think I've seen that will resonate 0:14:05.400 --> 0:14:10.520 um for the coming year for investors particular um, if 0:14:10.559 --> 0:14:14.200 not years. And it really what really caught my ear though, 0:14:14.480 --> 0:14:17.160 was the word quantz um. So just you know, you 0:14:17.160 --> 0:14:19.680 want to figure out how to make sense of this 0:14:19.720 --> 0:14:25.800 for for us? Yeah? Sure, because essentially what quantitative investors 0:14:25.840 --> 0:14:29.320 do is that, you know, they don't rely on human judgment. 0:14:29.440 --> 0:14:32.360 They use their computer models to try to find a 0:14:32.440 --> 0:14:36.200 couple of trading fingales that they then apply across thousands 0:14:36.200 --> 0:14:40.600 of securities. And so I initially got this idea talking 0:14:40.680 --> 0:14:42.840 to a quant fund and what they were telling me 0:14:43.400 --> 0:14:46.400 is that the dominance of all these megacap stocked you know, 0:14:46.480 --> 0:14:50.000 like Netflix or Facebook was really not good for their 0:14:50.120 --> 0:14:55.360 kind of strategies because they're essentially underweight megacaps given doubt, 0:14:55.400 --> 0:14:58.400 they're so diversified. And I thought that was a really 0:14:58.440 --> 0:15:01.360 interesting kind of intersection and of this nerdy realm of 0:15:01.520 --> 0:15:04.480 quantz and also a phone phenomenon that I'm sure all 0:15:04.560 --> 0:15:07.480 of us are noticing in the market. So what does 0:15:07.520 --> 0:15:10.480 it tell us about kind of what what they're seeing? 0:15:10.720 --> 0:15:13.160 And because it's it's interesting, you know, justine it because 0:15:13.200 --> 0:15:16.160 we talked so much about active versus passive, right, uh, 0:15:16.160 --> 0:15:18.440 and we know the passive play has been you know, 0:15:18.640 --> 0:15:20.960 done so well for so long coming off of the 0:15:21.000 --> 0:15:24.400 financial crisis and until recently, Um, kind of what did 0:15:24.480 --> 0:15:26.800 you take away from kind of doing this story and 0:15:26.840 --> 0:15:31.840 about that argument in that debate that's been going on, right, 0:15:32.000 --> 0:15:35.480 I mean, essentially one trend that has been making it 0:15:35.600 --> 0:15:39.080 even harder for the active stock pickers is that, you know, 0:15:39.160 --> 0:15:42.520 since the crisis, we have seen big companies get even bigger. 0:15:43.240 --> 0:15:45.440 Now a lot of people think this is you know, 0:15:45.480 --> 0:15:48.040 a structural trend in this sense that a lot of 0:15:48.080 --> 0:15:51.760 the tech companies are taking an advantage of essentially a 0:15:51.760 --> 0:15:55.560 winner took all economy. Because as an active stock picker, 0:15:55.640 --> 0:15:57.960 you want to be different from the benchmark. So you 0:15:58.000 --> 0:16:00.880 want to feel like you have your own original ideas. 0:16:00.880 --> 0:16:04.200 So a lot of the times were naturally underweight large caps, 0:16:04.760 --> 0:16:07.080 but you know, when the they gets bigger, that's not 0:16:07.240 --> 0:16:10.040 an advantage for active stock pickers. And we've kind of 0:16:10.120 --> 0:16:14.280 seen that, you know, repuls be the asset management industry 0:16:14.320 --> 0:16:17.080 with a lot of acquisitions and even more people at 0:16:17.120 --> 0:16:22.280 turning to eats each year. So so just what what 0:16:22.360 --> 0:16:25.040 about right of late? Just you know, the past few 0:16:25.040 --> 0:16:28.080 months have been so crazy and you know, in theory, 0:16:28.160 --> 0:16:31.360 I guess maybe you know, quantitative approach could take out 0:16:31.400 --> 0:16:34.960 that the emotional effect um. What's been happening with quants 0:16:34.960 --> 0:16:40.120 of late, right, I mean, obviously I'm generalizing a little, 0:16:40.280 --> 0:16:43.800 but this year hasn't been great for quantz either. And 0:16:43.840 --> 0:16:46.720 part of the reason is that, you know, they tend 0:16:46.760 --> 0:16:49.960 to have more experiensures to small caps which have been underperforming. 0:16:50.440 --> 0:16:53.680 They also have more exposure to value stocks typically, which 0:16:53.720 --> 0:16:57.800 as you know, have also suffered even more than growth stocks. 0:16:57.880 --> 0:17:00.480 And so it hasn't been a great year for on theater. 0:17:00.680 --> 0:17:04.480 But they're always saying, you know, in every market, when 0:17:04.840 --> 0:17:08.200 valuations are so stretched between the winners and losers, there 0:17:08.240 --> 0:17:10.919 could be a snap back. And it's interesting because I 0:17:10.920 --> 0:17:13.400 think the past couple of days we've seen a little 0:17:13.400 --> 0:17:15.639 bit of that, like small cups coming back a little. 0:17:15.920 --> 0:17:20.800 It's definitely far too early to say then, Yeah, I 0:17:20.800 --> 0:17:23.080 mean it's interesting too. I mean, I guess guys to 0:17:23.080 --> 0:17:26.280 to think about who the winners and losers are, at 0:17:26.359 --> 0:17:28.159 least so far in this and I feel like we're 0:17:28.160 --> 0:17:29.520 going to get a little bit of a picture of 0:17:29.560 --> 0:17:33.440 this this week, Carol, when all the companies are are 0:17:33.480 --> 0:17:36.000 starting to perform, and Joel it it does take me 0:17:36.040 --> 0:17:39.119 back to some extent and this uh, this company has 0:17:39.119 --> 0:17:41.199 mentioned in the lead of Justine's story. It takes it 0:17:41.240 --> 0:17:43.600 back to Zoom, which was the subject of a great 0:17:43.920 --> 0:17:46.320 cover story in the magazine a couple of weeks ago. 0:17:46.359 --> 0:17:48.920 I mean sort of discerning the winners and losers here 0:17:49.000 --> 0:17:53.280 even from beyond the quant perspective, but just from a 0:17:53.359 --> 0:17:57.400 stock in a business perspective, is it feels even trickier 0:17:57.520 --> 0:18:01.240 right now. Yeah, and especially as you know, if if 0:18:01.240 --> 0:18:04.480 we think about the market share the um it's sort 0:18:04.480 --> 0:18:07.040 of the situation like this pandemic kind of creates for 0:18:07.119 --> 0:18:09.520 like an Amazon where you can just see like how 0:18:09.560 --> 0:18:12.320 a big company could really really thrive here while so 0:18:12.359 --> 0:18:15.560 many small ones get hurt. But now that said, like 0:18:15.760 --> 0:18:18.760 you know, I recorded a podcast earlier with Eric ful Tunis, 0:18:18.800 --> 0:18:21.239 and one of those things that um, he was kind 0:18:21.240 --> 0:18:23.119 of thinking about on the E t F side is 0:18:23.160 --> 0:18:26.480 just like you know, small companies have been so beaten down, 0:18:26.640 --> 0:18:28.679 and he just kind of has a theory that like, 0:18:28.760 --> 0:18:30.800 you can only beat these things down so far, like 0:18:30.880 --> 0:18:34.640 over the long term, we might actually see some of these, um, 0:18:34.680 --> 0:18:37.760 the smaller companies and even the small small company value 0:18:37.800 --> 0:18:41.000 ones really outperformed over the next three to five years, 0:18:41.000 --> 0:18:43.639 so from a long term play, there might be something 0:18:43.680 --> 0:18:46.399 to that just you know, like any any reporting on 0:18:46.440 --> 0:18:51.400 that and um from from you right exactly. I mean 0:18:51.480 --> 0:18:54.040 for my story, I spoke to the head of Quantitative 0:18:54.080 --> 0:18:57.800 Strategies and Northern Trust Assets. His name is Michael hunts Deed. 0:18:58.280 --> 0:19:00.879 What he told me is that besides factor which is 0:19:00.920 --> 0:19:04.120 you know, betting on small caps, it's not dead. It's 0:19:04.160 --> 0:19:07.040 just that it's an incredibly long cycle. I think it's 0:19:07.080 --> 0:19:10.520 around eight years, and his research meaning that you could 0:19:10.600 --> 0:19:14.119 be underperforming for eight years, but if you stick it 0:19:14.160 --> 0:19:17.000 out over the long term, it actually still works out. 0:19:17.359 --> 0:19:20.360 So of course, the problem for most people, especially if 0:19:20.400 --> 0:19:22.520 you're a fun manager and then needs to get paid, 0:19:22.600 --> 0:19:25.280 is that most people don't have that kind of patience. 0:19:25.720 --> 0:19:28.600 But if you do, um, you know, the academic research 0:19:28.640 --> 0:19:32.840 indicates that exposure to small caps should still out perform 0:19:32.960 --> 0:19:34.920 over the long one. I gotta say, this is the 0:19:35.000 --> 0:19:37.080 kind of story that just you know, Jill, it just 0:19:37.240 --> 0:19:39.119 makes the market even more interesting as we try to 0:19:39.119 --> 0:19:41.760 figure out kind of what happens next. Yeah, I mean, 0:19:41.800 --> 0:19:43.480 it's like to me, it's like that great buy and 0:19:43.520 --> 0:19:45.960 hold lesson Like if you if you can seriously like 0:19:46.080 --> 0:19:50.120 buy and holding. It might be might be worth thinking about. Yeah, absolutely, 0:19:50.160 --> 0:19:52.320 all right. It's a great story on the Bloomberg one 0:19:52.320 --> 0:19:54.119 of the most read, and not surprisingly, it's in the 0:19:54.160 --> 0:19:57.200 upcoming edition of Bloomberg Business Week, so find it online 0:19:57.640 --> 0:19:59.960 or pick up the magazine when it's out later this week. 0:20:00.080 --> 0:20:04.160 Justina Lee joining us from London. Joel Webber, the editor 0:20:04.160 --> 0:20:11.080 of Bloomberg Business Week, joining us from Brooklyn. I'm brooom 0:20:11.440 --> 0:20:18.119 journal now, but you let me drive. Oh no, no, no no, no, honey, please, 0:20:18.240 --> 0:20:27.439 I'll do the riding drivel. I want to drive, Just drive, baby. 0:20:28.200 --> 0:20:38.160 The question dry This is the drive to the globe. 0:20:38.920 --> 0:20:42.520 Give me thanks. We'll drying us down on Bloomberg Radio. 0:20:43.000 --> 0:20:44.840 It is time for the drive to the clothes. Just 0:20:45.119 --> 0:20:49.400 got about fifteen minutes left in today's trading day. Calm 0:20:49.440 --> 0:20:51.639 us along with Jason Kelly. Back with us is Alan Zaffron. 0:20:52.040 --> 0:20:53.919 He is founding partner in co CEO at I e 0:20:54.000 --> 0:20:59.040 Q Capital, joining us on the phone from Foster City, California. Allen, 0:20:59.160 --> 0:21:01.199 good to have you here with us. How's it all 0:21:01.240 --> 0:21:04.640 going well, I'll tell you what, it's beautiful weather out here. 0:21:04.680 --> 0:21:07.600 Home sheltering is a badly got eightygree weather in sunshine, 0:21:07.640 --> 0:21:10.359 so it isn't all bad in California. Are people still 0:21:10.359 --> 0:21:13.840 sheltering though, with that kind of weather? They are? And 0:21:13.880 --> 0:21:16.840 if you're listening to Mayor London Breed in San Francisco 0:21:16.880 --> 0:21:19.440 and you're in the six counties around surrounding San Francisco, 0:21:19.480 --> 0:21:22.560 you're sheltering at least through the end of May. So 0:21:22.720 --> 0:21:27.000 California has a, um, you know, a tighter lockdown possibly 0:21:27.000 --> 0:21:29.159 than other parts of the country. And we'll see the 0:21:29.200 --> 0:21:31.360 long run whether that was prudent or not, both from 0:21:31.359 --> 0:21:34.000 a health as well as an economic perspective. But the 0:21:34.119 --> 0:21:36.119 rules are the rules, and that's the way we're in 0:21:36.119 --> 0:21:39.399 California and Northern California currently. And so what do you 0:21:39.440 --> 0:21:42.679 make of it? I mean, as a longtime businessman, you know, 0:21:42.800 --> 0:21:45.760 someone who's watching both the markets, but obviously has watched 0:21:45.760 --> 0:21:49.240 the rise of Silicon Valley and and just the economic 0:21:49.320 --> 0:21:53.320 boom that you've seen there in Northern California. Obviously it's 0:21:53.320 --> 0:21:57.240 a balance Alan, But but I do I wonder what 0:21:57.240 --> 0:22:01.159 do you make of it? I may convit it's it's 0:22:01.200 --> 0:22:05.760 fraught with challenges. Uh, clearly, it's a negative economically, clearly 0:22:05.840 --> 0:22:09.480 it's a positive from a healthcare perspective. UM, the reality 0:22:09.600 --> 0:22:12.320 is we probably were not built to handle a massive 0:22:12.359 --> 0:22:16.600 amount of emergency UH cases heading into hospitals. We would 0:22:16.640 --> 0:22:19.679 have been overwhelmed. UM. It's easier look in retrospect and 0:22:19.720 --> 0:22:22.480 think we should have acted sooner. We didn't. In the 0:22:22.480 --> 0:22:25.000 absence of doing that, we had to take some action steps. 0:22:25.320 --> 0:22:27.800 The question will obviously be was the cure worse than 0:22:27.840 --> 0:22:31.359 the disease? Not entirely sure. It's very clear that there's 0:22:31.400 --> 0:22:35.879 been significant economic damage that's gonna last years, not weeks, 0:22:35.880 --> 0:22:39.439