Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelly. We're right here every day bringing you the
Speaker 1: latest news from the world's of business and finance, plus technology, politics, economics,
Speaker 1: all harnessing the power of Business Week reporters and editors.
Speaker 1: And of course Carol that's part of a team of
Speaker 1: twenty seven hundred journalists and analysts more than a hundred
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Speaker 1: by searching Bloomberg Global News. So let's talk about the
Speaker 1: news today from Maderna. The next guest really needs no introduction,
Speaker 1: and yet let's go through it. Dr William hasl Teen.
Speaker 1: His bio reminds us that he has educated a generation
Speaker 1: of doctors at Harvard h helped usign the strategy for
Speaker 1: the first treatment for HIV AIDS. He also founded more
Speaker 1: than a dozen biotech companies, including Human Genome Sciences, and
Speaker 1: serves on many advisory boards. Welcome after Hazeltin. It's great
Speaker 1: to have you here with us. He's chairman and president
Speaker 1: of Access Health International. It's a nonprofit think tank. It's
Speaker 1: really on a mission to improve access to high quality
Speaker 1: and affordable health care for everyone everywhere. And he joins
Speaker 1: us on the phone in New York City, a doctor
Speaker 1: Hazel teen, nice to have you here with Jason and myself.
Speaker 1: The news today from Maderna. How do you see it?
Speaker 1: How do you read it? I see it as a
Speaker 1: small step forward and a lot of hype. Interesting, tell
Speaker 1: us more, Yeah, explain why? Well, there are eight pages
Speaker 1: that they reported. The data is not public. We can
Speaker 1: evaluate it. We don't know what actually happened, and there
Speaker 1: are other reports of published papers by scientists around the
Speaker 1: world who have uh done the least what they've done
Speaker 1: and perhaps more so. That's why I say it's a
Speaker 1: little bit of news and a lot of hype. And
Speaker 1: so when you look at that, is this just people, really,
Speaker 1: the market in particular, and maybe us just as human
Speaker 1: beings looking and grabbing onto to some sliver of hope. Here,
Speaker 1: Dr Hazeltine, you know, hope has been the handmaid of
Speaker 1: scoundrels for generations. It's what allows us to be conned
Speaker 1: We need hope, but hope is also dangerous. We have
Speaker 1: to be careful yea with it. I'm not saying that
Speaker 1: that vaccine won't work. I'm just saying it's a very
Speaker 1: slender thread to move in the market. Well yeah, go ahead, No, no, no,
Speaker 1: well you know what, let me just because we want
Speaker 1: to continue this line of thought. We did. They catch up.
Speaker 1: Our Bloomberg News team on the TV side caught up
Speaker 1: at the Modernity CEO Stefan boncell Um, and talked about
Speaker 1: Phase three the trial, specifically that they expect by July.
Speaker 1: Let's just listen to a snippet of that interview. We
Speaker 1: are finalizing the protocol for a Phase three, which is
Speaker 1: the last clinical study before Provolo, which we are hoping
Speaker 1: to start in July of this year. Of the study
Speaker 1: will be several fathom, has the subjects across many countries.
Speaker 1: We are finalizing the protocol as we speak with the
Speaker 1: var and we're hoping that people can start in July,
Speaker 1: as with our plans. So phase three, as we know
Speaker 1: and you certainly know, Dr Hazeltine is an important process,
Speaker 1: but but it reminds us that there's still a lot
Speaker 1: to be known, right there's a lot to be known. No,
Speaker 1: as far as we know, there's been no real challenge
Speaker 1: and a human being. And I can say that I've
Speaker 1: been reviewing the literature of vaccine efforts over many years,
Speaker 1: first with stars, then with mirrors and other coronaviruses. This
Speaker 1: is not a simple problem. Um. There are a number
Speaker 1: of different attempts that have been made. There are results
Speaker 1: that look at least as good as these results from
Speaker 1: two other laboratories, and so it's it's very premature. It
Speaker 1: doesn't mean it's not going to work. I don't want
Speaker 1: to say that I have any information about whether it's
Speaker 1: going to work or not. All I can say is
Speaker 1: the kinds of signals they're getting are expected at this stage.
Speaker 1: They don't necessarily mean that the vaccine will protect anybody,
Speaker 1: or if they do protect it, how long they will
Speaker 1: protect them. There are a lot of questions that remain
Speaker 1: to be done, and eight people is a far too
Speaker 1: small study to know whether it's even safe. So, you know,
Speaker 1: I think making a big announcement that moves the market
Speaker 1: on a first in human study for eight people is
Speaker 1: an extraordinary event in biomedical science. It just doesn't happen. Uh,
Speaker 1: The fact that this has happened puts I think we
Speaker 1: all understand why we're all desperate to see an end
Speaker 1: to this disease. We have friends, we have children and
Speaker 1: grandchildren were deeply worried about uh We're all upset about
Speaker 1: the economy and the way this has changed our lives,
Speaker 1: and we are hoping for an ant But hope is
Speaker 1: not the answer. Really, hard data is the answer to
Speaker 1: what's what we need, and we haven't seen that yet.
Speaker 1: Let's get right back to our conversation with Dr WILLIAMS. Hazeltine,
Speaker 1: Chair President of Access Health International, legendary in the medical field,
Speaker 1: and Dr Hazeltine, I wanted to take you back, if
Speaker 1: we could, to some time that you spent last year
Speaker 1: in China and in Wuhan specifically, and I wonder what
Speaker 1: you make of where the outbreak is there and what
Speaker 1: we should be taking in terms of lessons here. Juhan
Speaker 1: is a very nice city. It's a garden city in
Speaker 1: a way. It's a high tech city, uh and it's
Speaker 1: a university town. It's a very interesting city. UM. If
Speaker 1: you look at the history, and I have friends there
Speaker 1: and I have followed it pretty closely. Uhan is now
Speaker 1: pretty much back not to normal, but it is certainly
Speaker 1: way ahead of where we are. And that's because it's
Speaker 1: a very very vigorous methods to shut down the infection.
Speaker 1: It worked. If you look at the total number of
Speaker 1: cases in China. There are sporadic cases here and there,
Speaker 1: particularly up by the Russian border, but basically that the
Speaker 1: entire country, for example, Beijing hasn't had a new infection
Speaker 1: for thirty days. It is quite remarkable what you can
Speaker 1: do with public health measures without a vaccine or without
Speaker 1: a drug. Right And you know, the Chinese government, I
Speaker 1: would guess, has certainly been helpful in making it possible
Speaker 1: for people to stay home um, also requiring people to
Speaker 1: stay home. UM. How do you see the US approach?
Speaker 1: I mean, it's it's there's so much pressure. You see it,
Speaker 1: the protests on various governors in certain states to reopen UM.
Speaker 1: I feel like it's a delicate balance. What is the
Speaker 1: balance that? How you see it between balancing making sure
Speaker 1: people stay safe. But you know, we've got an economy
Speaker 1: that's that's really a mess right now. It's you've got
Speaker 1: you've you've summarized it very nicely. If I look at
Speaker 1: the data in the us UH and I look at
Speaker 1: the most cities. What I see is what I would
Speaker 1: have expected. That we climbed up to the top of
Speaker 1: what we hoped was a mountain, but it turned out
Speaker 1: it was a plateau. And the end of that plateau
Speaker 1: is not yet insight. And that's because we haven't taken
Speaker 1: the measures in this country to restrict people to people
Speaker 1: transmission it's necessary. We've reduced it so that in many
Speaker 1: places we're at a plateau. But if you look around
Speaker 1: the world and you look at the countries that have
Speaker 1: been really effective and having a sharp rise and a
Speaker 1: sharp fall, they've been very restrictive. If you look at
Speaker 1: the countries like the United States and Great Britain, you
Speaker 1: find that we have just as many infections on a
Speaker 1: daily basis today as we did when we closed the
Speaker 1: place up. That's sort of surprising, and it suggests that
Speaker 1: if we open up again and we're careless about how
Speaker 1: we open up, we'll have another rise. And if people
Speaker 1: think the warm weather is going to save them, they
Speaker 1: should look at the data from India, where it's really
Speaker 1: warm right now. It's free monsoon. I've been there. It
Speaker 1: is hot as hades there and it's damned, it's miserable,
Speaker 1: and that that infection is just skyrocketing right through the roof.
Speaker 1: It's in an exponential phase right now, and that is
Speaker 1: in really warm weather. So warm weather isn't going to
Speaker 1: save anybody. What will save us is being careful of
Speaker 1: who we meet. Doesn't mean we have to keep the
Speaker 1: economy closed, but it means that as long as there's
Speaker 1: a high level of infection in your community, you have
Speaker 1: to be extremely careful. The only safe assumption is that
Speaker 1: everybody you meet is infected and that you, even if
Speaker 1: you've had this disease, can be reinfected. That is the
Speaker 1: only safe assumption. So if it goes back to taste
Speaker 1: testing and tracing, I mean, do we do we need
Speaker 1: to wake up every day and say, okay, these are
Speaker 1: the hotspots in our local communities. So this is either
Speaker 1: where we don't want to go or this is where
Speaker 1: people need to be quarantined. Like, how do we need
Speaker 1: to do an Unfortunately, we only have about a minute left. Okay,
Speaker 1: we you've only used two words test, trace, and I
Speaker 1: would ask, and then what what is isolation? And very
Speaker 1: strict isolation? Voluntary hopefully and if that doesn't work, involuntary test,
Speaker 1: trace and isolate those that are infected. Is the only
Speaker 1: sure way is long as the virus is in your
Speaker 1: community and is spreading. I want some people to listen
Speaker 1: to this to remember one thing. It took one person
Speaker 1: in China to infect the world, one person. It will
Speaker 1: take one person in your city to reinfect the whole city.
Speaker 1: And it will take one person in your household to
Speaker 1: reinfect your entire household. We must be careful, yes, open,
Speaker 1: open when the virus levels are low, and be and
Speaker 1: assume everybody you meet is potentially infected. All right, Well, um,
Speaker 1: words of caution, certainly, and a good warning on a
Speaker 1: day when there seems to be a lot of brilliance,
Speaker 1: to say the least, certainly from a market perspective. Dr
Speaker 1: William Hazeltine, he knows what he's talking about, cheering, President
Speaker 1: of Excess Health International, A long history of fighting disease.
Speaker 1: We really appreciate your time here on a Monday. This
Speaker 1: is Bloomberg Business Week with Carol Masser and Jason Kelly
Speaker 1: on Bloomberg Radio. You know, it's interesting talking to Bill Hazeltine.
Speaker 1: Dr Belle Hazeltine, Carol, you know just about the information,
Speaker 1: how you read it. You know what's working, what's not working.
Speaker 1: All of us are just grasping for anything that we
Speaker 1: can get our hands on, you know, some measure of hope.
Speaker 1: And that makes it a lot trickier to figure out,
Speaker 1: like who's telling the truth, who's not, what's coming over
Speaker 1: the internet. Let's get into that story. It's a fascinating
Speaker 1: piece written by Joshua Breusting. He's a tech writer for
Speaker 1: Bloomberg business Week. It's in the magazine this week, online
Speaker 1: and at Bloomberg dot com and the Bloomberg Terminal. Today
Speaker 1: he joins us on the phone from New York City.
Speaker 1: Joe Webber, the editor of Bloomberg business Week. He's on
Speaker 1: a remote line in Brooklyn. So JDub set this up
Speaker 1: for us because this is a really important story. So
Speaker 1: you know, we we've been talking just a lot about how, um,
Speaker 1: you know, information, how we process information in general, and
Speaker 1: you know, Josh kind of raised his hand about this
Speaker 1: group at the State Department called the well shorthand as
Speaker 1: GEK and he'll tell us more about them in a second. Um.
Speaker 1: And the moment he started telling us about them, we
Speaker 1: just said, you need to start writing this story because
Speaker 1: what it really shows is UM you know, the US
Speaker 1: is you know, we've we've been talking about disinformation for
Speaker 1: for a couple of years now, but even within the
Speaker 1: US government there's actually some people who know about that
Speaker 1: more than others. UM, josh what what the backstory of
Speaker 1: ghek so GET or the Global Engagement Center is an
Speaker 1: office within the U S State Department, And I had
Speaker 1: actually been looking at it far before the current UM
Speaker 1: COVID pandemic when UM there were actually questions about recruitment
Speaker 1: of Islamic groups using online channels for recruitment. That was
Speaker 1: the get's original charge UM, and then it's expanded to
Speaker 1: deal with Russian disinformation UM during the election UM and
Speaker 1: kind of shifted away from online recruitment and towards state
Speaker 1: sponsored attempts to UM basically poisoned online discourse around various things. Obviously,
Speaker 1: the coronavirus has made this just more urgent than it's
Speaker 1: ever seen before. So can I just say this is
Speaker 1: one of those stories you're like, wait a minute, You've
Speaker 1: got this agency within the government that is looking into
Speaker 1: basically debunking conspiracy theories, and yet, as you write, Josh
Speaker 1: in one of your Joshua and one of your in
Speaker 1: your story. Hanging over all of this is the US
Speaker 1: government's biggest obstacle to eliminating misinformation. Gabrielle, which is the
Speaker 1: woman who runs this, who runs GHEK, you write her
Speaker 1: boss's bosses, bosses tendency to amplify the sorts of conspiracy
Speaker 1: theories that GEK was created to contain. You're talking about
Speaker 1: President Trump, Yeah, exactly. Uh. The GEK has really been
Speaker 1: bedeviled by President Trump from the time he took off
Speaker 1: it in different ways. Interestingly, at first, when it was
Speaker 1: just trying to build up its staff. Right at the
Speaker 1: beginning of his administration, he UM and his administration had
Speaker 1: really no interest in having a part of the U.
Speaker 1: S State Department that was focused on Russian disinformation given
Speaker 1: the election and his um real opposition to looking closer
Speaker 1: into that operation. UH. Then in more recent years, UH,
Speaker 1: the administration has become more interested in UH in the GECK.
Speaker 1: It's increased it's UM, it's increased its budgets significantly, and now,
Speaker 1: especially during coronavirus, you have the situation where this is
Speaker 1: a small agency trying to say the Chinese government is
Speaker 1: UM backing these UH misinformation campaigns related to COVID. The
Speaker 1: Russian government is backing misinformation campaigns relate to COVID. But
Speaker 1: a lot of the information is things that you have
Speaker 1: heard from President Trump sometimes and that makes it difficult
Speaker 1: to really to speak with a U to speak confidently
Speaker 1: on that. So, Joshua, the part of the thing that
Speaker 1: I think we we were sort of captivated by in
Speaker 1: the story is like the agency kind of does things
Speaker 1: both ways. It's both defensive and sort of offensive. How
Speaker 1: do they play both sides like that? Sure? So the
Speaker 1: defensive aspect is really the identification, UM and exposure of
Speaker 1: foreign disinformation campaigns, and that's really the thing that they
Speaker 1: focused on most during the during the coronavirus pandemic. You've
Speaker 1: seen the agency, you know, come out and say Russia
Speaker 1: is doing this or China is doing that. Interestingly, UM,
Speaker 1: some other disinformation experts have questions some of these conclusions.
Speaker 1: The offensive aspect of this, which it really is not
Speaker 1: as open about right now, is having some sort of
Speaker 1: counter programming out there, usually UM targeted at audiences abroad
Speaker 1: to put out messages that would undermine the sort of
Speaker 1: messaging coming from other states. So what does this guy,
Speaker 1: I mean, how worried should we be about all of
Speaker 1: this at a time where we're I mean this this
Speaker 1: is not an academic exercise in many ways, because people
Speaker 1: are making real life decisions based on what they read
Speaker 1: on the internet in some ways. After doing this reporting, Joshua,
Speaker 1: what's your takeaway, Well, the first thing is, I think
Speaker 1: there's pretty much consensus amongst anyone paying attention that there's
Speaker 1: a real danger too uh, manipulation of online platforms to
Speaker 1: spread lives and confusion, and that it could Yeah, it
Speaker 1: could lead to people, you know, either doing things that
Speaker 1: will personally hear themselves or not acting in ways that
Speaker 1: can help us collectively deal with the problem with the problem.
Speaker 1: And the second point is that I think the experience
Speaker 1: of the Global Engagement Center shows just how tricky it
Speaker 1: is for a government to respond to this. Anything that
Speaker 1: any administration does is inherently political, and when you have
Speaker 1: such polarized times, having the Trump administration say something is uh,
Speaker 1: it's coming from a particular place, and given how people
Speaker 1: generally react to things based on where they come from,
Speaker 1: it has been Uh, it's fraught to have someone trying
Speaker 1: to act in what would seem to be a neutral way. Yeah, Well,
Speaker 1: it's really Ah, it's it's quite a it's quite a story,
Speaker 1: and we're really happy you brought it to as. Joshua
Speaker 1: Breustin is tech writer for Bloomberg Business Week, joining us
Speaker 1: on the phone from New York City. Joel Webber, the
Speaker 1: editor of Bloomberg Business Week. He joined us from Brooklyn,
Speaker 1: and I have to say, I mean, this takes us
Speaker 1: back to the election. We've got another election coming up.
Speaker 1: We're talking to Cheryl Sandberg later. Um, so you do
Speaker 1: wonder what the private sector is doing around this, as
Speaker 1: well as the government, because, as Joshua very rightly points out,
Speaker 1: it gets trickier when the governments of all this. I
Speaker 1: have to say, we just finished watching Homeland. All of this, yeah,
Speaker 1: is it comes together right and you think, okay, wait
Speaker 1: a minute, this is just you know, I'm watching a
Speaker 1: series or something. Then you read these kinds of stories
Speaker 1: and you're like, oh, wait a minute, like, wa is
Speaker 1: this is this Gabrielle or Carrie exactly. This is Bloomberg
Speaker 1: Business Week with Carol Masser and Jason Kelly on Bloomberg Radio.
Speaker 1: Let's catch up with Andy Brown. He is editorial director
Speaker 1: of Bloomberg New Economy, joining me on the phone. From
Speaker 1: New Hampshire. It's got a great column on the Bloomberg Today.
Speaker 1: Check it out. It's called very simply, US China relations
Speaker 1: hang by two threads, and those threads feeling increasingly gossamer
Speaker 1: and in many ways so much rhetoric, uh, flying back
Speaker 1: and forth. Tell us what you make of this, because
Speaker 1: it's trade and virus, right, I mean, there are those
Speaker 1: the two threads. Yep. Well, one of those is trade,
Speaker 1: that's for sure. I mean that's the most important one,
Speaker 1: this phase one trade deal. This is the most important
Speaker 1: achievement of the Trump administration visa v China. I mean,
Speaker 1: it's what it's. It's it's pretty much the only accomplished,
Speaker 1: the signal accomplishment from you know, all the huffing and
Speaker 1: puffing and standing up to China, and you know, right
Speaker 1: now it's it's up in the air. So you know,
Speaker 1: Trump tells Fox Business last week, maybe we should just
Speaker 1: cut off the relationship all together, the whole the whole thing,
Speaker 1: just dumped the relationship with with China. And you know,
Speaker 1: it's not the first time we've heard this kind of
Speaker 1: rhetoric from him. Last year, you remember he told all
Speaker 1: American companies to exit China. Um, but you know, increasingly
Speaker 1: markets seemed to believe that he could he could be serious. Yeah,
Speaker 1: and why I mean what we talked a little bit
Speaker 1: about this last week, but remind us like why this
Speaker 1: timing do you think and what is what's underneath this
Speaker 1: from the US administration's perspective. Well, look, I mean Trump
Speaker 1: Trump has always had a very idiosyncratic view understanding of
Speaker 1: trade economics, right, and so you know, he believes essentially
Speaker 1: that every trade deal the US has ever has ever
Speaker 1: entered into has you know, has has been you know,
Speaker 1: bad for America, but America has got a raw deal,
Speaker 1: right and um, you know everybody else has has has
Speaker 1: gained an America's expense. So he doesn't like trade generally.
Speaker 1: He believes that trade deficits, um, you know, by definition
Speaker 1: mean that the US is getting a raw deal. It's
Speaker 1: sort of money that is coming out of your pocket, when,
Speaker 1: of course, by and large, trade deficits in the US
Speaker 1: or an indication of the U s economy is healthy
Speaker 1: in doing well. And you know the only time America
Speaker 1: didn't have a trade deaf as it was was during
Speaker 1: the Great Depression where it didn't be all together. So
Speaker 1: you know, he's always taken a grim view on trade.
Speaker 1: But you know this, this seems to be part of
Speaker 1: the whole bashing China to deflect attention and deflect blame
Speaker 1: from his mishandling at a federal level of of COVID nineteen. Yeah,
Speaker 1: and so you I was being a little bit glib
Speaker 1: about the virus. But the the other one that you
Speaker 1: point out is basically the threat is that the connectivity
Speaker 1: really between these two leaders, between Presidency and President Trump,
Speaker 1: helped me understand that. Yeah, well it's always been a
Speaker 1: bit of a fig leave. So right from the beginning, um,
Speaker 1: the White House has been very careful to separate the
Speaker 1: personal relationship that Donald Trump allegedly had us with Jimping,
Speaker 1: to try to separate that from all of the other
Speaker 1: bad things that are happening in the relationships. So you know,
Speaker 1: this was supposed to be the thing that holds it
Speaker 1: all together and prevents a total unraveling. And you know,
Speaker 1: so hence we would hear him say things like my
Speaker 1: good friends Jim Ping and he giming very rarely reciprocated
Speaker 1: to this sort of thing. Johnny's leaders don't go in
Speaker 1: for personal friendships. I mean, they go into national interests
Speaker 1: and that's it. Um, they're not big on sort of
Speaker 1: the like the bron nous, right they're they're they're not.
Speaker 1: That's not sort of their jam. They don't they don't
Speaker 1: do they don't do bromance. They don't do romance domastically,
Speaker 1: and they certainly don't do it internationally. Nevertheless, there's there's
Speaker 1: been there's been this kind of pretense that you know,
Speaker 1: these two get along pretty well, and you know, and
Speaker 1: last week he says, I don't want I don't want
Speaker 1: I don't want to talk to him either, right, so
Speaker 1: you know, it's it's just a it's it's kind of
Speaker 1: more symbolic of what really does appear to a far
Speaker 1: agoing unraveling of the entire relationship across its breadth. I
Speaker 1: mean technology, exchanges, trade, talent um and now of course
Speaker 1: threatening to you know, to uh, threatening to cut off
Speaker 1: the China from from from US finance. Um, it's right
Speaker 1: across the board. Well, and it's interesting too because you're
Speaker 1: seeing this divergence, you know, and and again you're you're
Speaker 1: exactly right, and it's such a nice nuance to separate
Speaker 1: sort of the business from from the personal. But you know,
Speaker 1: even what seemed to be these personal slash professional views
Speaker 1: of something like the w h O. You know, where
Speaker 1: you have the President of the United States saying I'm
Speaker 1: done with them, I may cut off all their funding,
Speaker 1: and President She, you know, as recently as today, being like,
Speaker 1: we're going to fund this, like we're all in. I
Speaker 1: mean that it feels like the virus has exacerbated some
Speaker 1: things here, right, yeah, right, Well that that when when
Speaker 1: when President She stands up and says, you know, if
Speaker 1: we get a vaccine in China, we're gonna right into
Speaker 1: a public good and supply it to the whole world.
Speaker 1: And oh and by the way, we've got to log
Speaker 1: in another two billion dollars to the to the w
Speaker 1: h O, which is a huge amount, I mean comparative
Speaker 1: to what they've been they've been putting in. I mean
Speaker 1: it's forty million bucks a year right now the US
Speaker 1: is putting so clearly, you know, the two pronged effort here.
Speaker 1: One is to deflect global criticism from china early mismanagement
Speaker 1: of the virus. But also it's a sort of a
Speaker 1: one up and ship on Trump. Right, who's who's who's
Speaker 1: defunding the who in the middle of a global pandemic.
Speaker 1: It's amazing, all right, always got to catch up. They
Speaker 1: always feel smarter after I talked to you. Andy Brown,
Speaker 1: editorial director of Bloomberg New Economy, joining me on the
Speaker 1: phone from New Hampshire, the Journal. Now, but you let
Speaker 1: me drive, Oh no, no, no, no please, I'll do
Speaker 1: the righting revels. I want to drive, ba, just drive, baby.
Speaker 1: The questions get drying, yea, the drive to the Globe Commune. Thanks,
Speaker 1: we'll drying us dawn on Bloomberg Radio. All right, it's
Speaker 1: time for the Drive to the close. George Young with me,
Speaker 1: partner and portfolio manager for Villary Funds, on the phone
Speaker 1: from New Orleans. And you know, when Carol's off the
Speaker 1: show for a little while, we just go southern. We
Speaker 1: go full southern. George Young, tell me what's going on,
Speaker 1: uh down in the big easy. Well, everything's going pretty
Speaker 1: well here. I gotta thank you for having me on
Speaker 1: SINS a wonderful day, because you could have had me
Speaker 1: here on March. I think the tone might have been
Speaker 1: a little different for your audience's mood might have been
Speaker 1: a little different, So thank you for that. A little
Speaker 1: different for sure. Yeah, So what is it like? I mean,
Speaker 1: I want to talk stocks and I want to talk
Speaker 1: to market, but but do tell me what what's it
Speaker 1: like on the ground there? Um, thanks are pretty good.
Speaker 1: I mean, obviously, be in the southeast, we've got beautiful
Speaker 1: weather right now, and in the Northeast you didn't have
Speaker 1: that until recently. So we've had a great spring, obviously
Speaker 1: marred by COVID nineteen. That's been tough on all of
Speaker 1: us here around the world, actually, but I think we've
Speaker 1: seen some recovery here and possibly because we took our
Speaker 1: hit a little bit earlier, possibly because of Marty Gros,
Speaker 1: a close contact there, unfortunately obviously, but it was about
Speaker 1: Marty Gros scene. But in that case, we took our
Speaker 1: hit early, and things are looking a lot better here.
Speaker 1: So I tend to be optimistic and as a rule,
Speaker 1: and I tend to be optimistic about where we're going
Speaker 1: with this in a lot of different ways. So things
Speaker 1: are good here and I hope they're getting a lot
Speaker 1: better nationally and internationally. Yeah, it's interesting. I mean, I
Speaker 1: think you'd agree that you know New York City and
Speaker 1: its environs where I am talking to you from them
Speaker 1: just north of the city right now, and uh, you know,
Speaker 1: obviously we were there on the on the front end
Speaker 1: as well, and it is interesting to sort of watch
Speaker 1: this uh play out and see different investors and business
Speaker 1: people talk about it in different parts of the country.
Speaker 1: And we're always quick quick to ask our folks, especially
Speaker 1: who are outside of the Northeast, what what's going on.
Speaker 1: So you look at a market like today's, George, with
Speaker 1: a huge amount of enthusiasm as you alluded to, you know,
Speaker 1: biggest jumps in over a month, highest level since early March,
Speaker 1: and you know that that March period, as you said,
Speaker 1: was was bleaked to say the least. Uh. How much
Speaker 1: do you worry that maybe this is too optimistic? Well,
Speaker 1: the market does seem like it may have gotten ahead
Speaker 1: of itself. We've had such a major move from from
Speaker 1: from the lows. It's just been incredible. UM. Specifically, UM,
Speaker 1: the move has been approximately up of depending on which
Speaker 1: index you want to measure. We tend to be more
Speaker 1: small MidCap oriented, so the recovery has been a lot
Speaker 1: more severe. It's been about for the Russell two thousand
Speaker 1: for instance. UM, that's a hell of a move upward,
Speaker 1: and at some point the market space of some sort
Speaker 1: of equilibrium. So arguably of a little bit over bought
Speaker 1: at the moment. However, they are still a number of
Speaker 1: stocks that still are being punished. And it's somewhat interesting
Speaker 1: because a month or two ago market loads we thought
Speaker 1: they were opportunities to buy, and we were fortunate enough
Speaker 1: to have cash for our clients. We really tried to
Speaker 1: look into three different categories. There were the aggressive categories
Speaker 1: cruises and casinos, for instance, because you think, who's ever
Speaker 1: going to go back in our casino? Who's ever going
Speaker 1: to go on our cruise again? However, that was certainly
Speaker 1: priced into the stocks. Then we thought, g it might
Speaker 1: make sense to move to something a little more moderate,
Speaker 1: such as transportation or medical. Uh If if somebody needs
Speaker 1: to move goods from one place for another, they're going
Speaker 1: to use a trucker. For instance, if somebody needs to
Speaker 1: have a knee replacement, they don't have to get it
Speaker 1: done today, but in due course they do need to
Speaker 1: have that knee replaced. Uh and and and then you
Speaker 1: could look at them maybe more conservative or obvious stocks,
Speaker 1: such as utilities or maybe tech. Everyone in the world's
Speaker 1: using Zoom every but in using Amazon, that's all obvious. Again,
Speaker 1: that's priced in the stock, and that makes stock a
Speaker 1: little more expensive, so we use the middle ground. We
Speaker 1: bought JB. Hunt, which patient company, the Trucker, one of
Speaker 1: the most efficient out there when it comes to inner
Speaker 1: moodal They've got about at market share, and we chose Striker,
Speaker 1: which a lot of orthopedic surgeons out there would know,
Speaker 1: or those that have had knee or shoulder replacements would understand.
Speaker 1: That's the best in business. So we went with the
Speaker 1: middle ground, which made sense, and we were rewarded. UM.
Speaker 1: So things look pretty good at this moment, but it
Speaker 1: depends on the consumer. And I think maybe one thing
Speaker 1: that the listeners need to take away is that patients
Speaker 1: is important both in avoiding contact with the virus UH,
Speaker 1: you also need patients for investing. Not coincidentally, UM, if
Speaker 1: you look at the numbers of the past fifteen years,
Speaker 1: markets returned about nine percent, and if an investor misses
Speaker 1: the twenty best days, that return drops to one percent.
Speaker 1: Don't don't get whipsode, don't get in and get out.
Speaker 1: And the behavioral psychologists UH will tell you investors tend
Speaker 1: to be very skittish and on days like say, you
Speaker 1: think of everything's great, let's keep buying a week ago
Speaker 1: when we had a bad day, you might have thought
Speaker 1: the world's fallen apart. Don't do any buying ever. Again,
Speaker 1: somewhere between those ways, those approaches as a way to
Speaker 1: do it, but you need to have patience as an investor.
Speaker 1: So that tell me just a little bit more about
Speaker 1: each of those names, J. B. Hunt and and Striker,
Speaker 1: because you know, obviously they're not other folks are in
Speaker 1: that business as well. What did you see in those
Speaker 1: particular names. Well, what we saw is that with Striker,
Speaker 1: for instance, let's go back to the hip and the
Speaker 1: knee replacements, of the shoulder replacements, those are delayed surgeries.
Speaker 1: You don't want to it's not elective surgery where you
Speaker 1: would go into have a dermatological procedure for instance. Uh,
Speaker 1: this is something that really needs to be done. It
Speaker 1: just that need to be done today, but at some
Speaker 1: point you need to get that done. Striker we think
Speaker 1: is the best in the business. Uh. They they've been
Speaker 1: in each of those business a name for over fifty years.
Speaker 1: So it's the sort of thing that they have the expertise,
Speaker 1: they understand how it works, and uh, they have a
Speaker 1: good sales group, they've got a good management group that's
Speaker 1: been in charge for some time. So that's what we
Speaker 1: try to do is once we find a theme, we
Speaker 1: try to see what's going to work best with that theme.
Speaker 1: In terms of management, we also look at debt. One
Speaker 1: company that doesn't have too much debt, because that's the
Speaker 1: way that you can get in trouble nowadays. If you
Speaker 1: don't have staying power, um, you're you're you're not able
Speaker 1: to withstand the bad markets. So before I let you
Speaker 1: go talk to me, uh, just for seconds about first
Speaker 1: Hawaiian because I think that's another Namu line. Right. So again,
Speaker 1: if you take a look at the banks, the banks
Speaker 1: are comprised of borrowers and they are comprised of people
Speaker 1: who will lend money to the bank i e. Depositors.
Speaker 1: In this case, there's not much spread between what somebody
Speaker 1: can get uh in terms of their interest rates. Nor
Speaker 1: is there much of a difference when with with what
Speaker 1: you can get in terms of a mortgage. So that
Speaker 1: net interest spread is where the bank makes money. That's
Speaker 1: tough on all banks nowadays. We look at who's going
Speaker 1: to recover. First Hawaii is based on tourism and also
Speaker 1: military spending. Tourism is gonna come back, and due course,
Speaker 1: we don't know when military spending is a constant Hawaii,
Speaker 1: and in particular First Wine is a very good base
Speaker 1: for a bank to operate, the oldest bank west of
Speaker 1: the Mississippi. I know that was I saw that in
Speaker 1: the notes. I would not that that's a trivial question.
Speaker 1: I would have gotten dead wrong. I would have said
Speaker 1: something in California, all right. George Young, partner and portfolio
Speaker 1: manager for Hillary Funds, joining me on the phone from
Speaker 1: New Orleans. Always good to hear that accent. Thanks so
Speaker 1: much for listening to Bloomberg Business Week. Download the podcast
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