1 00:00:05,800 --> 00:00:08,360 Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim 2 00:00:08,400 --> 00:00:11,200 Speaker 1: Fox along with my co host Lisa A. Bramowitz. Each 3 00:00:11,240 --> 00:00:14,440 Speaker 1: day we bring you the most important, noteworthy and useful 4 00:00:14,480 --> 00:00:17,079 Speaker 1: interviews for you and your money, whether you're at the 5 00:00:17,120 --> 00:00:20,360 Speaker 1: grocery store or the trading floor. Find the Bloomberg p 6 00:00:20,520 --> 00:00:32,239 Speaker 1: m L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. 7 00:00:32,240 --> 00:00:35,360 Speaker 1: All right now, right now, let's talk about Amazon and 8 00:00:35,479 --> 00:00:38,640 Speaker 1: Alphabet parent company of Google earnings with Gene Munster. He 9 00:00:38,840 --> 00:00:42,879 Speaker 1: is with the Loop of Ventures and Gene Munster tell us, well, 10 00:00:42,920 --> 00:00:45,839 Speaker 1: first of all, congratulations on Loop Ventures as always for 11 00:00:45,920 --> 00:00:50,760 Speaker 1: your prosperity and your your upward trajectory. Uh, you're gonna 12 00:00:50,800 --> 00:00:53,280 Speaker 1: match that along with what's going on with Amazon and Google, 13 00:00:53,320 --> 00:00:55,880 Speaker 1: because you know, you seem to have hitched your ride 14 00:00:55,920 --> 00:01:00,360 Speaker 1: to to behemos that just keep growing. Yeah things. So, 15 00:01:00,400 --> 00:01:04,080 Speaker 1: I mean, these are both megacab companies that are enjoying 16 00:01:04,360 --> 00:01:08,480 Speaker 1: a phenomenal core business and have some other beds that 17 00:01:08,560 --> 00:01:11,160 Speaker 1: should really reinvent these companies over the long hals, So 18 00:01:11,200 --> 00:01:14,040 Speaker 1: I just want to give you two quick points. First 19 00:01:14,120 --> 00:01:17,759 Speaker 1: is on Amazon, their unit growth is twenty four percent. 20 00:01:17,880 --> 00:01:20,399 Speaker 1: That's the pace of the sold units. That was the 21 00:01:20,480 --> 00:01:22,680 Speaker 1: same unit growth as in the December quarter, which is 22 00:01:22,720 --> 00:01:24,959 Speaker 1: hard because the numbers get bigger, it's harder to continue. 23 00:01:25,000 --> 00:01:28,880 Speaker 1: That's that's the impression number. And from Google's perspective, dead 24 00:01:28,959 --> 00:01:32,600 Speaker 1: paid click growth, that's the key metric in the street 25 00:01:32,640 --> 00:01:36,000 Speaker 1: was looking forward was up from last quarter. So what 26 00:01:36,080 --> 00:01:39,840 Speaker 1: I really want to emphasize here is these are behemoth companies. 27 00:01:40,440 --> 00:01:43,880 Speaker 1: Their core businesses are doing phenomenal, but the other crazy 28 00:01:44,000 --> 00:01:47,600 Speaker 1: part is that they're investing in these other optionality values 29 00:01:47,600 --> 00:01:50,760 Speaker 1: that will reinvent these businesses in the next decades. You know, 30 00:01:51,200 --> 00:01:54,120 Speaker 1: as you talk about these behemoth companies that are taking 31 00:01:54,200 --> 00:01:57,840 Speaker 1: over everything, I have to bring up the main theme 32 00:01:57,880 --> 00:01:59,560 Speaker 1: that is on a lot of people's minds. At what 33 00:01:59,760 --> 00:02:03,080 Speaker 1: point are these companies too big and are actually restricting 34 00:02:03,160 --> 00:02:06,320 Speaker 1: growth in other parts of the economy and are frankly 35 00:02:06,640 --> 00:02:12,080 Speaker 1: stifling out any competition that could possibly come up. Well, 36 00:02:12,240 --> 00:02:16,320 Speaker 1: both of these companies have a disruptive factor on competition. 37 00:02:16,440 --> 00:02:19,040 Speaker 1: So in to both cases, they had a huge impact 38 00:02:19,080 --> 00:02:21,280 Speaker 1: in the media world. Obviously Amazon what they've done to 39 00:02:21,360 --> 00:02:24,880 Speaker 1: brick and mortar, and so yes, they are causing an 40 00:02:24,880 --> 00:02:29,200 Speaker 1: incredible wake of heartache for other companies. But the reality 41 00:02:29,360 --> 00:02:32,720 Speaker 1: is that this is how consumers want the future to evolve, 42 00:02:32,760 --> 00:02:35,799 Speaker 1: and they are defining that. And so I think that 43 00:02:35,800 --> 00:02:38,919 Speaker 1: that's just the they're not too big too. They still 44 00:02:38,919 --> 00:02:41,760 Speaker 1: have room to get bigger, and unfortunately for other companies, 45 00:02:41,760 --> 00:02:43,840 Speaker 1: they're going to get some companies, a lot of companies 46 00:02:43,840 --> 00:02:46,280 Speaker 1: will get run over teen months to just a but 47 00:02:46,520 --> 00:02:49,680 Speaker 1: you know your numbers into perspective, all right, So unit 48 00:02:49,760 --> 00:02:53,440 Speaker 1: growth at Amazon, at a company that is doing it, 49 00:02:53,520 --> 00:02:55,800 Speaker 1: has a run rate right now of a hundred and 50 00:02:55,880 --> 00:03:01,480 Speaker 1: forty two billion dollars. It's really hard to put your 51 00:03:01,480 --> 00:03:03,359 Speaker 1: mind around. And we love doing this kind of stuff. 52 00:03:03,360 --> 00:03:05,600 Speaker 1: But one other thought here is that if you think 53 00:03:05,639 --> 00:03:08,720 Speaker 1: about total e commerce in the US, about twenty of 54 00:03:08,760 --> 00:03:13,160 Speaker 1: it today is is Amazon, as you mentioned, growing overall 55 00:03:13,200 --> 00:03:15,320 Speaker 1: e commerce from the US and growing at eight percent. 56 00:03:15,440 --> 00:03:18,799 Speaker 1: So these are just staggering numbers. And and I want 57 00:03:18,840 --> 00:03:20,880 Speaker 1: to make sure we also talk a little bit about 58 00:03:20,960 --> 00:03:22,760 Speaker 1: what some of the things that both these companies are 59 00:03:22,760 --> 00:03:25,440 Speaker 1: working on, because that I think it is equally as exciting. Well, 60 00:03:25,440 --> 00:03:27,359 Speaker 1: go for you, go for it, Jim, because as you say, 61 00:03:27,400 --> 00:03:31,360 Speaker 1: this is almost like creative destruction, and it is really uh, 62 00:03:31,400 --> 00:03:35,080 Speaker 1: well it's creating the future now. It is so in 63 00:03:35,360 --> 00:03:38,000 Speaker 1: Amazon's case, the three areas that they're really focused on 64 00:03:38,000 --> 00:03:42,280 Speaker 1: our media fulfillment and then uh international, but media this 65 00:03:42,440 --> 00:03:46,040 Speaker 1: basically they want to become more like a Showtime or 66 00:03:46,040 --> 00:03:49,480 Speaker 1: an HBO and just continue to add content their fulfillment. 67 00:03:49,480 --> 00:03:52,560 Speaker 1: They're doing last mile. And then for Google's side, I 68 00:03:52,600 --> 00:03:55,840 Speaker 1: just want to leave your listeners with a new word 69 00:03:56,400 --> 00:04:01,440 Speaker 1: called TensorFlow. Tenser flow and remember that because this is 70 00:04:01,480 --> 00:04:05,480 Speaker 1: the new platform that Google has that allows anybody to 71 00:04:05,560 --> 00:04:09,560 Speaker 1: access it for doing machine learning and artificial intelligence. And 72 00:04:09,560 --> 00:04:14,000 Speaker 1: they basically Google is allowing everyday people and companies to 73 00:04:14,120 --> 00:04:17,520 Speaker 1: access all their learnings and machine learning. Their CEO mentioned 74 00:04:17,560 --> 00:04:19,679 Speaker 1: Google CEO mentioned it. So the first thing you mentioned 75 00:04:19,680 --> 00:04:22,120 Speaker 1: on the call last night was TensorFlow, and I just 76 00:04:22,160 --> 00:04:24,200 Speaker 1: want to point that out. This is an example of 77 00:04:24,240 --> 00:04:27,200 Speaker 1: how Google is going to redefine themselves with the next decade. 78 00:04:27,440 --> 00:04:29,400 Speaker 1: What about the Google Car. I know that that was 79 00:04:29,440 --> 00:04:32,599 Speaker 1: something that was a pretty hot topic a while back, 80 00:04:32,680 --> 00:04:34,799 Speaker 1: but now there's sort of this feeling that in Detroit, 81 00:04:35,000 --> 00:04:38,400 Speaker 1: the big beheemoth automakers are really gonna have the upper 82 00:04:38,440 --> 00:04:41,600 Speaker 1: hand when it comes to autonomous driving and electric vehicles. 83 00:04:42,640 --> 00:04:45,000 Speaker 1: I think Detroit is going to be in a world 84 00:04:45,000 --> 00:04:48,080 Speaker 1: of hurt in the next one years. I'm sad to 85 00:04:48,320 --> 00:04:50,520 Speaker 1: predict that, but I think that that they just have 86 00:04:50,760 --> 00:04:55,719 Speaker 1: a lot of uh infrastructure around manufacturing and labor that 87 00:04:55,880 --> 00:04:58,280 Speaker 1: is difficult for them to break from. But Google is 88 00:04:58,279 --> 00:05:01,640 Speaker 1: going to take over. I think Google test lads and 89 00:05:01,920 --> 00:05:05,080 Speaker 1: a great position. Google mentioned on their call last night 90 00:05:05,120 --> 00:05:07,440 Speaker 1: that they see their way Motivision, which is the car division, 91 00:05:07,480 --> 00:05:10,080 Speaker 1: to also be in public transportation. I mean, this is 92 00:05:10,360 --> 00:05:13,239 Speaker 1: the type of broad thinking that we're hearing from Google 93 00:05:13,440 --> 00:05:15,320 Speaker 1: when you just don't hear that type of broad thinking 94 00:05:15,320 --> 00:05:18,520 Speaker 1: from Detroit. You know, I just want to take you 95 00:05:18,560 --> 00:05:21,360 Speaker 1: back to this tensor flow t E N s o 96 00:05:21,520 --> 00:05:26,080 Speaker 1: r flow because this is really an amazing site that well, 97 00:05:26,440 --> 00:05:28,520 Speaker 1: you know, you get to use words like neural networks 98 00:05:28,520 --> 00:05:31,520 Speaker 1: for machine translation. I'm not sure exactly what that is. 99 00:05:31,560 --> 00:05:33,480 Speaker 1: I can make a guess, but what are the kinds 100 00:05:33,520 --> 00:05:36,640 Speaker 1: of companies that will be using this so that what 101 00:05:36,760 --> 00:05:39,880 Speaker 1: that is is basically Google allows you to use their 102 00:05:39,960 --> 00:05:42,800 Speaker 1: voice recognition so we can just tap into them. They 103 00:05:42,839 --> 00:05:45,080 Speaker 1: can listen to what we're doing, it can do a 104 00:05:45,120 --> 00:05:48,440 Speaker 1: transcript of it and start to build insights from those transcripts. 105 00:05:48,480 --> 00:05:50,440 Speaker 1: So that's some of the things that you're talking about there. 106 00:05:50,800 --> 00:05:53,960 Speaker 1: But other things that this uh tensor flow does is 107 00:05:54,080 --> 00:05:57,200 Speaker 1: allows you to use Google's learnings by looking at an image, 108 00:05:57,240 --> 00:05:59,839 Speaker 1: so uh looking at image and reading what that image 109 00:06:00,080 --> 00:06:04,280 Speaker 1: my uh information about that image, and so it is uh, 110 00:06:04,520 --> 00:06:06,440 Speaker 1: it's just the start of what is going to be 111 00:06:06,480 --> 00:06:09,400 Speaker 1: a machine learned driven world. Yeah, Gene Munster, thank you 112 00:06:09,440 --> 00:06:10,960 Speaker 1: so much for joining us. We could talk a lot 113 00:06:10,960 --> 00:06:13,200 Speaker 1: about this. Unfortunately we have to leave it there. Jane 114 00:06:13,240 --> 00:06:16,479 Speaker 1: Munster is the co founder of loop Venture's former managing 115 00:06:16,480 --> 00:06:21,080 Speaker 1: director and senior research analyst at Piper Jaffrey Companies. I'm 116 00:06:21,160 --> 00:06:23,800 Speaker 1: Lisa Abramoid's here with pim Fox. You've been listening to 117 00:06:23,880 --> 00:06:40,000 Speaker 1: Bloomberg Markets on Bloomberg eleven three. Oh. We did get 118 00:06:40,000 --> 00:06:42,400 Speaker 1: our GDP report this morning. In the U S economy 119 00:06:42,800 --> 00:06:45,640 Speaker 1: expanded at the slowest pace in three years. This is 120 00:06:45,880 --> 00:06:49,400 Speaker 1: perhaps due to the weaker auto sales and lower home 121 00:06:49,480 --> 00:06:52,839 Speaker 1: heating bills. But does this signify some kind of broader 122 00:06:53,279 --> 00:06:56,520 Speaker 1: weakening that is starting to set in? We want to 123 00:06:56,560 --> 00:06:59,479 Speaker 1: find out. Constance Hunter has some answers for us. Constance 124 00:06:59,520 --> 00:07:03,479 Speaker 1: Hunter is chief economist a KPMG and constants. What was 125 00:07:03,520 --> 00:07:07,400 Speaker 1: your main takeaway from this particular report. Well, two things. One, 126 00:07:07,920 --> 00:07:10,840 Speaker 1: I know everybody's focused on the consumption data because of 127 00:07:10,840 --> 00:07:14,640 Speaker 1: course the consumer seventy GDP and it's very important. And 128 00:07:15,120 --> 00:07:19,720 Speaker 1: the lower energy prices and and mild winter really contributed. 129 00:07:19,760 --> 00:07:23,119 Speaker 1: That subtracted thirty basis points off GDP. Then the lower 130 00:07:23,200 --> 00:07:26,720 Speaker 1: rate of consumption of auto subtracted another forty five basis points, 131 00:07:27,080 --> 00:07:30,960 Speaker 1: so we're looking at factors that really slowed consumption in 132 00:07:31,000 --> 00:07:33,600 Speaker 1: a concerning way. Even if you added back those factors, 133 00:07:33,600 --> 00:07:36,200 Speaker 1: we only have a one percent annualized consumption rate in 134 00:07:36,240 --> 00:07:39,000 Speaker 1: the first quarter. And the question is why. Because we've 135 00:07:39,040 --> 00:07:42,800 Speaker 1: had seventy seven consecutive months of jobs growth, we're starting 136 00:07:42,840 --> 00:07:46,679 Speaker 1: to see wages go up, and not just the wage 137 00:07:46,760 --> 00:07:49,080 Speaker 1: data that we got today, but for example, the Atlanta 138 00:07:49,120 --> 00:07:52,720 Speaker 1: Fed has an index the employment caused their employment cost index, 139 00:07:53,040 --> 00:07:57,240 Speaker 1: which doesn't factor in UH benefits like healthcare. It's it's 140 00:07:57,240 --> 00:08:00,160 Speaker 1: the money that goes right to the individual and only 141 00:08:00,200 --> 00:08:04,520 Speaker 1: for families earning under a D fifty dollars. So it's 142 00:08:04,520 --> 00:08:08,240 Speaker 1: a really important piece of data, and that's showing at 143 00:08:08,400 --> 00:08:10,840 Speaker 1: up three point five percent year of a year. So 144 00:08:11,120 --> 00:08:14,400 Speaker 1: this really is a puzzle. And and so given that, 145 00:08:14,560 --> 00:08:17,160 Speaker 1: I think we're looking at somewhat of a temporary blip 146 00:08:17,560 --> 00:08:19,440 Speaker 1: in the consumption numbers. But the other thing that's not 147 00:08:19,480 --> 00:08:21,680 Speaker 1: getting as much air time is that we subtracted almost 148 00:08:21,680 --> 00:08:24,280 Speaker 1: one percent off of the GDP growth rate because of 149 00:08:24,320 --> 00:08:29,240 Speaker 1: inventory declines. And those inventory declines go hand in hand 150 00:08:29,680 --> 00:08:33,560 Speaker 1: with um imports. So we saw imports increase. We also 151 00:08:33,600 --> 00:08:36,200 Speaker 1: saw exports increase, which is a really good sign. Even 152 00:08:36,200 --> 00:08:39,920 Speaker 1: though net imports subtracted from GDP, that increase in exports 153 00:08:39,920 --> 00:08:42,000 Speaker 1: supports the idea that the rest of the world is 154 00:08:42,040 --> 00:08:45,040 Speaker 1: growing in a more robust and stronger fashion. So it's 155 00:08:45,040 --> 00:08:48,240 Speaker 1: going to help lift GDP overall. And so I think 156 00:08:48,280 --> 00:08:51,400 Speaker 1: we have a hold on one second, I'm actually struggling 157 00:08:51,440 --> 00:08:55,040 Speaker 1: to understand that. In other words, if inventories drop, that's 158 00:08:55,120 --> 00:08:59,520 Speaker 1: because our imports are no, no, no, Sorry I didn't 159 00:08:59,559 --> 00:09:01,600 Speaker 1: explain that. Well. So if if we see the strap 160 00:09:01,679 --> 00:09:05,080 Speaker 1: in inventories this quarter corresponding with an increase in imports, 161 00:09:05,080 --> 00:09:07,640 Speaker 1: what it suggests that the next quarter we're going to 162 00:09:07,720 --> 00:09:11,880 Speaker 1: see those inventories filled back up. Sorry, thank you for 163 00:09:11,920 --> 00:09:16,120 Speaker 1: clarifying that. That wasn't terribly clear. Let me see if 164 00:09:16,120 --> 00:09:18,320 Speaker 1: I can just understand where we are in the cycle though, 165 00:09:18,360 --> 00:09:21,160 Speaker 1: because I I keep hearing this idea that you know, 166 00:09:21,280 --> 00:09:23,800 Speaker 1: we're eight years so whatever it is, seven years into 167 00:09:23,800 --> 00:09:27,120 Speaker 1: a bull market, and they're this business cycle, and then 168 00:09:27,160 --> 00:09:29,280 Speaker 1: you get people will tell you that it's different this time, 169 00:09:29,320 --> 00:09:31,280 Speaker 1: because if you measure it from over here, you know 170 00:09:31,360 --> 00:09:34,560 Speaker 1: it's not the same. What's your take on where we 171 00:09:34,600 --> 00:09:37,280 Speaker 1: are in the in the business and interest rate cycle? Yeah, 172 00:09:37,320 --> 00:09:39,480 Speaker 1: I think we're at late stage. We're what I would 173 00:09:39,480 --> 00:09:42,440 Speaker 1: call the aph inning, and the FEDS job is to 174 00:09:42,600 --> 00:09:46,600 Speaker 1: create extra innings, all right, Um, but we are getting 175 00:09:46,600 --> 00:09:50,400 Speaker 1: to a point where we're having um wage increases. We're 176 00:09:50,440 --> 00:09:52,920 Speaker 1: gonna start to see labor shortages when I don't know, 177 00:09:53,000 --> 00:09:57,040 Speaker 1: sometime in sometime in and that in and of itself 178 00:09:57,080 --> 00:09:59,360 Speaker 1: is going to hamper how much growth we can have 179 00:09:59,559 --> 00:10:01,679 Speaker 1: going for wards. So I think we're going to be 180 00:10:01,679 --> 00:10:04,120 Speaker 1: looking at the all things being equal, which of course 181 00:10:04,160 --> 00:10:07,040 Speaker 1: they never are, but all things being equal, we're looking 182 00:10:07,080 --> 00:10:11,840 Speaker 1: at a mild recession sometime in late nineteen because of 183 00:10:11,920 --> 00:10:15,400 Speaker 1: labor shortages, because we have increased wages, and that's going 184 00:10:15,440 --> 00:10:17,640 Speaker 1: to put a crimp on our ability to continue grows. 185 00:10:17,840 --> 00:10:19,920 Speaker 1: So just in time, for the mid term elections, just 186 00:10:20,040 --> 00:10:22,200 Speaker 1: in time for the mid term. I just wanted to 187 00:10:22,200 --> 00:10:28,120 Speaker 1: make we got that twenty eighteen mid term elections. I 188 00:10:28,120 --> 00:10:31,080 Speaker 1: don't know that will happen in I would say late either, 189 00:10:31,200 --> 00:10:33,400 Speaker 1: like just sort of starting at the end of twenty 190 00:10:33,440 --> 00:10:36,080 Speaker 1: eighteen into twenty nineteen. I think we've got some runway. Well, 191 00:10:36,120 --> 00:10:39,680 Speaker 1: we'll put you down for November two thousand eighteen. I 192 00:10:39,679 --> 00:10:41,600 Speaker 1: want to just point out, Yeah, for now, I wanted 193 00:10:41,600 --> 00:10:44,120 Speaker 1: to point out. Black Rock's chief executive officer, Larry Fink 194 00:10:44,280 --> 00:10:46,840 Speaker 1: was on Bloomberg Television earlier this morning, and he said 195 00:10:46,840 --> 00:10:49,920 Speaker 1: that it was improbable that the US is GDP will 196 00:10:49,960 --> 00:10:52,760 Speaker 1: grow to three percent given the current demographics, and said 197 00:10:52,760 --> 00:10:57,120 Speaker 1: that right now the US is truly slowing down. Um, 198 00:10:57,160 --> 00:10:59,240 Speaker 1: you know, Constants, you seem like it seems like you 199 00:10:59,280 --> 00:11:02,320 Speaker 1: agree with the way, and not just demographics, but also productivity. 200 00:11:02,400 --> 00:11:06,280 Speaker 1: So potential GDP is the sum of the change in 201 00:11:06,320 --> 00:11:08,920 Speaker 1: the growth rate of productivity plus the change in the 202 00:11:08,960 --> 00:11:13,800 Speaker 1: working age population. Working age populations growing at zero point 203 00:11:14,360 --> 00:11:18,000 Speaker 1: that is is immigrants by the way, and productivity zero 204 00:11:18,040 --> 00:11:19,960 Speaker 1: point eight. That gets us to a one point one 205 00:11:20,000 --> 00:11:23,640 Speaker 1: potential GDP. Three is a pipe dream. Constant We were 206 00:11:23,640 --> 00:11:26,600 Speaker 1: talking earlier about the results from Synchrony and Capital One 207 00:11:26,679 --> 00:11:29,960 Speaker 1: showing an increasing number of charge offs for credit card loans. 208 00:11:30,360 --> 00:11:34,199 Speaker 1: How concerned should we be about this? Look at it. 209 00:11:34,200 --> 00:11:37,920 Speaker 1: It seems like it's it's a moderately worrying sign, and 210 00:11:38,000 --> 00:11:40,760 Speaker 1: it's it's something where I would say, this is now 211 00:11:40,800 --> 00:11:43,400 Speaker 1: an indicator you need to watch, whereas to three years 212 00:11:43,400 --> 00:11:45,400 Speaker 1: ago it wasn't an indicator you need to pay attention to. 213 00:11:45,440 --> 00:11:47,120 Speaker 1: If you have a dashboard you're looking at, you need 214 00:11:47,160 --> 00:11:50,240 Speaker 1: to make sure this is on that dashboard, All right, 215 00:11:50,520 --> 00:11:53,360 Speaker 1: that dash But we gotta do you think that dashboard 216 00:11:53,400 --> 00:11:56,600 Speaker 1: is on everybody's desk? Do you think everybody gets we 217 00:11:56,640 --> 00:12:00,360 Speaker 1: have a doomsday countdown? Pretty much everyone here? I mean, 218 00:12:00,600 --> 00:12:02,440 Speaker 1: the only reason I asked is because it certainly doesn't 219 00:12:02,440 --> 00:12:03,960 Speaker 1: look that way when you see you know, when you 220 00:12:04,000 --> 00:12:06,480 Speaker 1: see bonds sell off and you see people go into 221 00:12:06,600 --> 00:12:09,439 Speaker 1: risky acids like stocks in high yield. Yeah, well, look 222 00:12:09,480 --> 00:12:12,840 Speaker 1: where are we on bonds to twenty right? So I 223 00:12:12,840 --> 00:12:14,640 Speaker 1: don't know that looks like a bond rally from where 224 00:12:14,640 --> 00:12:16,920 Speaker 1: I sit based on the last six months, right, we 225 00:12:16,960 --> 00:12:18,760 Speaker 1: had that that we had that backup in the tenure 226 00:12:18,840 --> 00:12:20,520 Speaker 1: year old and now we're back down to twenty and 227 00:12:20,679 --> 00:12:23,559 Speaker 1: my hashtag rates low for a long time has remarkable 228 00:12:23,640 --> 00:12:27,440 Speaker 1: shelf life that has surprised even me. And you're calling 229 00:12:27,480 --> 00:12:30,040 Speaker 1: stuff for two more interest rate hikes one I think 230 00:12:30,120 --> 00:12:32,680 Speaker 1: one more this year. So they had forecast three for 231 00:12:32,720 --> 00:12:35,440 Speaker 1: this year and and I think they'll be lucky to 232 00:12:35,440 --> 00:12:37,800 Speaker 1: get away with two rate hikes this year. All right, 233 00:12:37,840 --> 00:12:42,319 Speaker 1: thanks very much appreciated. Constance Hunter joining us KPMG Chief Economist, 234 00:12:42,360 --> 00:12:53,679 Speaker 1: much appreciated. We want to take a moment to let 235 00:12:53,720 --> 00:12:56,600 Speaker 1: you know about something new from Bloomberg. 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Slash lens 245 00:13:30,559 --> 00:13:34,520 Speaker 1: Well the zero point seven percent increase in first quarter GDP, 246 00:13:34,679 --> 00:13:38,360 Speaker 1: notwithstanding our next guest says that trends and consumer confidence 247 00:13:38,400 --> 00:13:42,240 Speaker 1: are healthy, and that consumers are expressing optimism regarding the 248 00:13:42,280 --> 00:13:46,480 Speaker 1: short term outlook for business, jobs, and personal finance. This 249 00:13:46,640 --> 00:13:49,320 Speaker 1: all leads us to housing and Cheryl Palmer, the chief 250 00:13:49,320 --> 00:13:52,400 Speaker 1: executive of Taylor Morrison. Cheryl Palmer, thank you very much 251 00:13:52,400 --> 00:13:55,560 Speaker 1: for being with us, my pleasure. Thank you very much 252 00:13:55,559 --> 00:13:58,440 Speaker 1: for having me. Now. I was able to go through 253 00:13:58,480 --> 00:14:01,320 Speaker 1: your conference call, and boy, there are a lot of 254 00:14:01,320 --> 00:14:03,880 Speaker 1: different metrics that you use to judge the health of 255 00:14:03,920 --> 00:14:05,800 Speaker 1: your business, and I don't know whether you want to 256 00:14:05,800 --> 00:14:09,080 Speaker 1: start with net sales orders, just explained for people how 257 00:14:09,120 --> 00:14:12,679 Speaker 1: do you determine success, and then maybe talk a little 258 00:14:12,679 --> 00:14:17,840 Speaker 1: bit about the regional strength, which you say is pretty comprehensive. Yeah, no, 259 00:14:18,040 --> 00:14:20,720 Speaker 1: thank you. You know, we did report yesterday and we're 260 00:14:20,760 --> 00:14:24,120 Speaker 1: quite delighted with the results we were able to share. 261 00:14:24,360 --> 00:14:27,360 Speaker 1: And there are a number of metrics to your point, 262 00:14:27,440 --> 00:14:30,720 Speaker 1: but they all do derive from your opening comments, and 263 00:14:30,760 --> 00:14:34,040 Speaker 1: that's how people are feeling about the world today. And 264 00:14:34,080 --> 00:14:37,440 Speaker 1: I think there's been very encouraging signs as we you know, 265 00:14:37,520 --> 00:14:40,320 Speaker 1: came through fourth quarter and certainly came into the spring 266 00:14:40,400 --> 00:14:44,200 Speaker 1: selling season of the first quarter. The consumers feeling good, 267 00:14:44,240 --> 00:14:48,160 Speaker 1: They're feeling confident, healthy, there's out there spending money, they 268 00:14:48,200 --> 00:14:52,200 Speaker 1: feel good about their jobs. They're starting to see UM 269 00:14:52,280 --> 00:14:56,520 Speaker 1: improvement in income, you know, affordability. So it is still 270 00:14:56,680 --> 00:15:00,640 Speaker 1: very very good low interest rates. And that's know, that's 271 00:15:00,760 --> 00:15:05,000 Speaker 1: creating UM an optimism in our business and it really 272 00:15:05,040 --> 00:15:11,160 Speaker 1: manifested itself through UM a thirty three increase of sales 273 00:15:11,200 --> 00:15:14,360 Speaker 1: here over a year, you know, Cheryl Um. First of all, 274 00:15:14,400 --> 00:15:18,320 Speaker 1: I wanted to ask if you are concerned about the 275 00:15:18,440 --> 00:15:23,880 Speaker 1: pricing in certain markets, particularly Toronto, San Francisco, New York. 276 00:15:24,040 --> 00:15:27,880 Speaker 1: People are saying that the acceleration is certainly slowing down. 277 00:15:27,880 --> 00:15:31,000 Speaker 1: If not, uh, you know, showing signs of petering out, 278 00:15:31,120 --> 00:15:35,200 Speaker 1: particularly on the highest end. Are you seeing something similar 279 00:15:35,240 --> 00:15:38,080 Speaker 1: to sort of edify the concern of sort of slowed 280 00:15:38,080 --> 00:15:42,520 Speaker 1: down in those markets? You know, we actually have had 281 00:15:42,560 --> 00:15:45,440 Speaker 1: great success across all of our price point. Now, some 282 00:15:45,520 --> 00:15:47,480 Speaker 1: of the markets you mentioned we build, and we used 283 00:15:47,480 --> 00:15:50,280 Speaker 1: to build in Toronto, we don't anymore, UM, but we 284 00:15:50,320 --> 00:15:53,160 Speaker 1: do build in San Francisco. We do build in markets 285 00:15:53,160 --> 00:15:56,680 Speaker 1: across the US and to a number of consumer groups, 286 00:15:56,720 --> 00:16:00,640 Speaker 1: and we are seeing strength UM at the first time 287 00:16:00,680 --> 00:16:03,400 Speaker 1: buyers We're seeing it in that move up second time buyer. 288 00:16:03,520 --> 00:16:06,160 Speaker 1: We're seeing it with our fifty plus and those are 289 00:16:06,200 --> 00:16:11,080 Speaker 1: some of our highest average sales prices. And um, some markets, 290 00:16:11,200 --> 00:16:13,400 Speaker 1: you know, they are getting back to what I would 291 00:16:13,440 --> 00:16:16,640 Speaker 1: call some of the historic highs and some markets still 292 00:16:16,640 --> 00:16:19,119 Speaker 1: have a lot of runway. But as we reported yesterday, 293 00:16:19,560 --> 00:16:22,880 Speaker 1: you know we've raised prices and probably about our community 294 00:16:22,880 --> 00:16:25,280 Speaker 1: is just in the first quarter. So could you speak 295 00:16:25,280 --> 00:16:28,640 Speaker 1: a little bit about the Esplanade Golf and a country 296 00:16:28,640 --> 00:16:30,880 Speaker 1: club community. That one is in sarah Sota, but you've 297 00:16:30,880 --> 00:16:32,400 Speaker 1: got a variety of them, and I want you to 298 00:16:32,480 --> 00:16:34,720 Speaker 1: use that as an example of the kinds of products 299 00:16:34,720 --> 00:16:37,400 Speaker 1: that you are putting into the marketplace and maybe tell 300 00:16:37,480 --> 00:16:41,840 Speaker 1: us a little bit about the customer reception and cost. Yeah, 301 00:16:41,920 --> 00:16:45,320 Speaker 1: that one's really exciting. Our Esplanade brand is in Florida, 302 00:16:45,440 --> 00:16:48,920 Speaker 1: and we have ten of these lifestyle communities throughout Florida. 303 00:16:49,000 --> 00:16:51,200 Speaker 1: And the one that I highlighted in our call yesterday, 304 00:16:51,200 --> 00:16:55,640 Speaker 1: you're right, was in um Sara Soda, and I spoke 305 00:16:55,720 --> 00:16:59,240 Speaker 1: to the new amenities that we've opened and really the lifestyle, 306 00:16:59,320 --> 00:17:02,720 Speaker 1: the Ritz Carlton approach and our programming that we've created 307 00:17:02,800 --> 00:17:08,520 Speaker 1: with really dedicated concierge's staff, and we have seen throughout 308 00:17:08,600 --> 00:17:12,919 Speaker 1: Florida and throughout the Esplanade brand building since the middle 309 00:17:12,960 --> 00:17:16,760 Speaker 1: of last year through the shoulder selling season um at 310 00:17:16,840 --> 00:17:19,320 Speaker 1: a number of price points. Is even in our Esplanade 311 00:17:19,320 --> 00:17:21,800 Speaker 1: communities we build from, you know, the low two hundreds, 312 00:17:21,800 --> 00:17:25,080 Speaker 1: well over a million dollars. And these are very discerning 313 00:17:25,080 --> 00:17:27,840 Speaker 1: folks know what they want now, when they wanted, how 314 00:17:27,960 --> 00:17:30,400 Speaker 1: they want it, and they're going to get exactly that. 315 00:17:30,880 --> 00:17:34,280 Speaker 1: And we've had just a phenomenal spring selling season, and 316 00:17:34,680 --> 00:17:39,119 Speaker 1: I credit the team's great execution in delivering new amenities 317 00:17:39,200 --> 00:17:44,400 Speaker 1: with great pulside service, antiki bar and new restaurants. That's 318 00:17:44,400 --> 00:17:46,959 Speaker 1: how I gotta say. So that sounds it sounds lovely 319 00:17:47,640 --> 00:17:52,560 Speaker 1: and clearly well. But I want to also while we've 320 00:17:52,560 --> 00:17:54,240 Speaker 1: got to want you to talk a little bit about 321 00:17:54,320 --> 00:17:58,560 Speaker 1: where you are making new deals, where you are acquiring property, 322 00:17:58,600 --> 00:18:00,760 Speaker 1: because I know Atlanta has been a focus as well 323 00:18:00,800 --> 00:18:04,800 Speaker 1: as Dallas, and you've got that Darling brand, You're correct, 324 00:18:04,880 --> 00:18:07,639 Speaker 1: and so our Darling businesses in Dallas and Houston, and 325 00:18:07,640 --> 00:18:10,280 Speaker 1: we are certainly investing in It's it's new for us. 326 00:18:10,320 --> 00:18:13,480 Speaker 1: I mean, we just introduced our Taylor Morrison Brandon Dallas. 327 00:18:13,520 --> 00:18:16,280 Speaker 1: So now we have both our Darling and Taylor Morrison 328 00:18:16,280 --> 00:18:19,320 Speaker 1: in Houston, we also have both brands, So Dallas with 329 00:18:19,359 --> 00:18:23,640 Speaker 1: the new Taylor Morrison brand, were investing California, were investing 330 00:18:24,160 --> 00:18:26,359 Speaker 1: UM some of our newer markets in the Caroline. It's 331 00:18:26,400 --> 00:18:29,119 Speaker 1: really across the portfolio. Phoenix is one of our larger 332 00:18:29,720 --> 00:18:32,720 Speaker 1: are larger businesses, so that machine continues to need to 333 00:18:32,760 --> 00:18:36,119 Speaker 1: be invested in UM. So we're looking for opportunities across 334 00:18:36,119 --> 00:18:39,680 Speaker 1: the US today. Cheryl, this might seem like a kind 335 00:18:39,680 --> 00:18:43,000 Speaker 1: of stage left question, but in my opinion, we read 336 00:18:43,040 --> 00:18:46,400 Speaker 1: a lot about, you know, potential flooding on the coasts 337 00:18:46,480 --> 00:18:50,320 Speaker 1: and concerns that potential buyers might have about this when 338 00:18:50,320 --> 00:18:53,960 Speaker 1: people are buying your properties. Are you finding that a 339 00:18:53,960 --> 00:18:57,240 Speaker 1: lot more people are talking about that where it's located, 340 00:18:57,600 --> 00:19:00,000 Speaker 1: what the potential risk would be in a flooding type 341 00:19:00,040 --> 00:19:04,680 Speaker 1: the situation. You know, we don't see that often. Certainly 342 00:19:04,680 --> 00:19:08,000 Speaker 1: we have exorbitant range and some markets across the country, 343 00:19:08,000 --> 00:19:09,600 Speaker 1: but I wouldn't tell you that that's top on the 344 00:19:09,720 --> 00:19:12,720 Speaker 1: folks mind. Not with rains, not with raids. I'm talking 345 00:19:12,720 --> 00:19:15,400 Speaker 1: about coastal properties. As you know, sees rise because we've 346 00:19:15,400 --> 00:19:17,680 Speaker 1: been reading a lot about you know that this could 347 00:19:17,680 --> 00:19:20,960 Speaker 1: potentially even impede valuations in places like Miami or other 348 00:19:21,000 --> 00:19:24,119 Speaker 1: coastal cities. Yeah, I'm really going to come down to 349 00:19:24,280 --> 00:19:25,960 Speaker 1: once again, we don't We're not in Miami, but we 350 00:19:26,000 --> 00:19:28,840 Speaker 1: certainly are in many coastal cities in California, and it 351 00:19:28,920 --> 00:19:31,399 Speaker 1: really comes down to the design and the development of 352 00:19:31,440 --> 00:19:36,359 Speaker 1: those communities UM and how that infrastructure has been created. 353 00:19:36,960 --> 00:19:40,120 Speaker 1: And be honest, it's not something that I would tell 354 00:19:40,119 --> 00:19:43,600 Speaker 1: you is on top of consumers minds. Land acquisition, Where 355 00:19:43,640 --> 00:19:45,640 Speaker 1: are you doing the most acquisition? I know you try 356 00:19:45,680 --> 00:19:48,040 Speaker 1: to do it organically, but maybe give us some markets. 357 00:19:49,480 --> 00:19:53,080 Speaker 1: So some of the markets I just mentioned Texas, UM's 358 00:19:53,200 --> 00:19:58,280 Speaker 1: very healthy, California, Arizona, are smaller businesses in Colorado and 359 00:19:58,280 --> 00:20:01,960 Speaker 1: the Caroline As. We are investing, and we're investing over 360 00:20:02,000 --> 00:20:05,280 Speaker 1: the last couple of years, we've done some UM acquisitions 361 00:20:05,280 --> 00:20:08,400 Speaker 1: of new companies. Right now, we're very focused on organic 362 00:20:08,440 --> 00:20:11,600 Speaker 1: acquisition to your point, and I would tell you it's 363 00:20:11,640 --> 00:20:14,399 Speaker 1: really across our entire portfolio, and we tend to have 364 00:20:14,480 --> 00:20:17,560 Speaker 1: our longer landbanks where we build large master planned communities 365 00:20:17,600 --> 00:20:20,720 Speaker 1: like our esplanades in Florida, but we're still looking for 366 00:20:20,760 --> 00:20:24,119 Speaker 1: opportunities there and then in Arizona as well. Are you 367 00:20:24,160 --> 00:20:27,760 Speaker 1: concerned because this you're describing something that sounds like a 368 00:20:27,800 --> 00:20:31,840 Speaker 1: perfect alignment of the stars, and I'm wondering when that happens. 369 00:20:31,880 --> 00:20:34,040 Speaker 1: Do you there's a little voice go off in your 370 00:20:34,080 --> 00:20:38,440 Speaker 1: head that says, well, this isn't gonna last forever. Um, 371 00:20:38,480 --> 00:20:42,359 Speaker 1: that voice is always in my head and that's why, um, 372 00:20:42,400 --> 00:20:44,399 Speaker 1: you know, it might sound good and it is, and 373 00:20:44,480 --> 00:20:46,919 Speaker 1: generally I am very bullish on how the market hang on. 374 00:20:46,960 --> 00:20:48,920 Speaker 1: We're going to just have to break in Cheryl Palmer, 375 00:20:49,000 --> 00:21:03,560 Speaker 1: Chief executive Taylor Morrison, thank you very much. Well, we 376 00:21:03,600 --> 00:21:07,360 Speaker 1: want to learn more about utility stocks because utilities used 377 00:21:07,359 --> 00:21:09,040 Speaker 1: to be the stocks you went to if you were 378 00:21:09,080 --> 00:21:12,720 Speaker 1: looking for yield, but perhaps times have changed. We have 379 00:21:12,840 --> 00:21:16,440 Speaker 1: John Bartlett. He is the vice president of Reeves Asset Management. 380 00:21:16,520 --> 00:21:19,760 Speaker 1: He joins us here in our Bloomberg eleven three oh studios. John, 381 00:21:19,800 --> 00:21:24,080 Speaker 1: thanks very much for coming in. Our utilities looked upon 382 00:21:24,359 --> 00:21:29,600 Speaker 1: as investments for yield or has that just been thrown 383 00:21:29,640 --> 00:21:34,600 Speaker 1: out the window? Him? Principally not yield is a very 384 00:21:34,640 --> 00:21:38,679 Speaker 1: still important part of the total return of um of utilities. 385 00:21:38,720 --> 00:21:41,040 Speaker 1: But but they do have an opportunity for you know, 386 00:21:41,119 --> 00:21:44,200 Speaker 1: pretty pretty modest earnings growth. We see the industry growing 387 00:21:44,200 --> 00:21:46,800 Speaker 1: it's earnings about five percent per year, and that's really 388 00:21:47,320 --> 00:21:50,720 Speaker 1: on the back of continued investment, largely at the state level, 389 00:21:50,760 --> 00:21:54,320 Speaker 1: but also at the federal level too. So UM, I 390 00:21:54,359 --> 00:21:55,600 Speaker 1: want to I want to talk a little bit of 391 00:21:55,640 --> 00:22:00,400 Speaker 1: it infrastructure spending because definitely your world overlaps we had 392 00:22:00,440 --> 00:22:04,159 Speaker 1: heard during the campaigning season about a one trillion dollar 393 00:22:04,240 --> 00:22:08,720 Speaker 1: infrastructure spending plan. We haven't heard much more about it, 394 00:22:08,800 --> 00:22:12,400 Speaker 1: but you know, is there still some opportunity from fiscal 395 00:22:12,480 --> 00:22:14,879 Speaker 1: stimulus that you are expecting to actually happen in the 396 00:22:14,920 --> 00:22:17,320 Speaker 1: near term. Well, you know, the good news on that 397 00:22:17,400 --> 00:22:20,040 Speaker 1: front is, UM, it doesn't really matter that much to 398 00:22:20,080 --> 00:22:23,120 Speaker 1: me as utility investor. UM. One of the things we're 399 00:22:23,160 --> 00:22:26,560 Speaker 1: really looking forward to right now is getting UM five 400 00:22:26,560 --> 00:22:29,960 Speaker 1: commissioners back at the Federal Energy Regulatory Commission that's going 401 00:22:30,000 --> 00:22:33,040 Speaker 1: to That's probably the easiest way that the federal government 402 00:22:33,040 --> 00:22:36,080 Speaker 1: can get money started spending on infrastructures, just to get 403 00:22:36,119 --> 00:22:39,280 Speaker 1: those uh uh, those commissioners back in their seats, because 404 00:22:39,320 --> 00:22:43,200 Speaker 1: once that happens, there's a real spending opportunity. And for instance, 405 00:22:43,200 --> 00:22:45,120 Speaker 1: there's a number of pipelines that are just simply held 406 00:22:45,160 --> 00:22:47,480 Speaker 1: up by the fact that they don't have commissioners in 407 00:22:47,480 --> 00:22:49,440 Speaker 1: their chairs. The federal government doesn't need to spend the 408 00:22:49,520 --> 00:22:52,840 Speaker 1: time to get that stuff going. Well, you know, John, 409 00:22:52,880 --> 00:22:55,520 Speaker 1: we Uh, Lisa and i UH and the Bloomberg team, 410 00:22:55,520 --> 00:22:58,600 Speaker 1: we were at the Bloomberg New Energy of Finance, a 411 00:22:58,680 --> 00:23:03,439 Speaker 1: summit looking into the future of energy, and the constant 412 00:23:03,560 --> 00:23:09,800 Speaker 1: theme was renewables and the actual cost of generating electricity. 413 00:23:10,280 --> 00:23:12,600 Speaker 1: And I'm one, I'm warning you know, your your firm 414 00:23:12,640 --> 00:23:16,240 Speaker 1: has been what fifty five years in business, you specialized 415 00:23:16,280 --> 00:23:18,520 Speaker 1: in this. You manage nearly three billion. You've got an 416 00:23:18,600 --> 00:23:22,560 Speaker 1: E t F that focuses on on utilities, which maybe 417 00:23:22,560 --> 00:23:24,560 Speaker 1: you can paint us a picture of the utility that 418 00:23:24,720 --> 00:23:28,439 Speaker 1: is the most forward thinking when it comes to embracing 419 00:23:28,440 --> 00:23:32,600 Speaker 1: this renewable and low cost structure. Well, we're very excited 420 00:23:32,720 --> 00:23:35,639 Speaker 1: him uh. And if you look at the portfolio UH 421 00:23:35,960 --> 00:23:38,399 Speaker 1: that that's in the E t F, the ticker symbol 422 00:23:38,440 --> 00:23:41,240 Speaker 1: for that is U T E S, you'll see that 423 00:23:41,280 --> 00:23:45,399 Speaker 1: we're we're for us. Renewables are a very important focus 424 00:23:45,480 --> 00:23:50,040 Speaker 1: for us. We see that wind um resources will become 425 00:23:50,119 --> 00:23:54,560 Speaker 1: very competitive with UH, with other forms of electric generation, 426 00:23:55,040 --> 00:23:59,320 Speaker 1: even without the tax credits that they enjoy Today. Generally speaking, 427 00:23:59,359 --> 00:24:01,320 Speaker 1: the price of power is going down. There's not a 428 00:24:01,320 --> 00:24:04,800 Speaker 1: lot of demand incremental demand for new power. We continue 429 00:24:04,880 --> 00:24:07,879 Speaker 1: to find new ways to make generating power cheaper, and 430 00:24:07,920 --> 00:24:10,560 Speaker 1: the price of natural gas remains under control. So everything 431 00:24:10,640 --> 00:24:14,439 Speaker 1: from from that perspective really creates a great backdrop for 432 00:24:14,520 --> 00:24:18,800 Speaker 1: investment in utilities or for utilities because you know they 433 00:24:18,840 --> 00:24:22,120 Speaker 1: can go put put dollars to work and help help 434 00:24:22,160 --> 00:24:24,920 Speaker 1: their customers without having to go hat in hand back 435 00:24:24,960 --> 00:24:28,160 Speaker 1: to the regulator asking for for big rate rate increases 436 00:24:28,200 --> 00:24:32,000 Speaker 1: above inflation. So in your almost three billion dollar portfolio 437 00:24:32,280 --> 00:24:36,159 Speaker 1: of assets, what proportion would you say is tied to 438 00:24:36,320 --> 00:24:42,240 Speaker 1: renewable energy utilities versus others? And how much has that grown? Sure? Um, Well, 439 00:24:42,359 --> 00:24:45,000 Speaker 1: if you look at at everything that we manage, our 440 00:24:45,040 --> 00:24:48,000 Speaker 1: our largest single customers are closed and mutual fund and 441 00:24:48,000 --> 00:24:50,040 Speaker 1: the ticker symbol for that is is u t G. 442 00:24:50,640 --> 00:24:53,280 Speaker 1: That's about eight percent utilities. In fact, it's called the 443 00:24:53,359 --> 00:24:57,119 Speaker 1: Reeves Utility Income Fund. UM. I would say across the 444 00:24:57,440 --> 00:25:02,760 Speaker 1: rest of the spectrum about um would be would be 445 00:25:02,840 --> 00:25:04,719 Speaker 1: utilities And how much is that up from say, five 446 00:25:04,800 --> 00:25:08,760 Speaker 1: years ago? Um, you know, it's it's probably about about 447 00:25:08,800 --> 00:25:12,600 Speaker 1: the same. Um. We will always have obviously a great 448 00:25:12,640 --> 00:25:15,400 Speaker 1: deal of utilities and what we do. It's something that 449 00:25:15,480 --> 00:25:18,440 Speaker 1: we're experts on and spent a lot of time time studying. 450 00:25:18,640 --> 00:25:22,199 Speaker 1: But what I like about this particular portfolio, just in 451 00:25:22,280 --> 00:25:25,320 Speaker 1: terms of its diversity, is it not just it does 452 00:25:25,359 --> 00:25:29,000 Speaker 1: not just include what we consider energy utilities. It concludes 453 00:25:29,040 --> 00:25:33,480 Speaker 1: companies such as Charter Communications, Comcast, Verizon. We forget that, 454 00:25:33,520 --> 00:25:35,560 Speaker 1: you know, Verizon and A T and T. We forget 455 00:25:35,600 --> 00:25:39,600 Speaker 1: sometimes that the telephone and the mobile phone operators nowadays 456 00:25:39,680 --> 00:25:44,959 Speaker 1: are considered utilities and therefore those dividends are available for harvest. Well, 457 00:25:45,000 --> 00:25:47,120 Speaker 1: they're not regulated in the same way that utilities are. 458 00:25:47,119 --> 00:25:49,440 Speaker 1: But but you're absolutely right. We we we consider them 459 00:25:49,480 --> 00:25:52,720 Speaker 1: core infrastructure holdings and uh and we're very excited about 460 00:25:52,880 --> 00:25:55,880 Speaker 1: about cable generally because I noticed also, and we were 461 00:25:55,880 --> 00:26:00,359 Speaker 1: talking with Vince Piazza are US oil and Gas analyst, 462 00:26:00,480 --> 00:26:03,000 Speaker 1: and one of the companies in here is Royal Dutch Shell. 463 00:26:03,119 --> 00:26:04,880 Speaker 1: Now he doesn't cover but you know, I was looking 464 00:26:04,880 --> 00:26:07,080 Speaker 1: at the dividend of Royal Dutch Sell and we're talking 465 00:26:07,119 --> 00:26:10,679 Speaker 1: like over seven percent. That's right, and Pim, we're not 466 00:26:10,760 --> 00:26:13,879 Speaker 1: really counting on a on a huge rebound in the 467 00:26:13,920 --> 00:26:15,560 Speaker 1: price of oil right now. We're we're sort of it. 468 00:26:15,680 --> 00:26:17,359 Speaker 1: We try to be as agnostic as we can to 469 00:26:17,400 --> 00:26:19,560 Speaker 1: the price of oil, but within Royal Dutch there is 470 00:26:19,600 --> 00:26:22,119 Speaker 1: a wonderful cost cutting opportunity that's been at work and 471 00:26:22,160 --> 00:26:24,880 Speaker 1: we think is going to continue to play out. Thank 472 00:26:24,920 --> 00:26:26,720 Speaker 1: you so much for joining us. Truly a pleasure to 473 00:26:26,720 --> 00:26:29,440 Speaker 1: speak with you. John Bartlett is vice president of Reeves 474 00:26:29,440 --> 00:26:33,159 Speaker 1: Asset Management that he is focusing on utilities with a 475 00:26:33,240 --> 00:26:36,040 Speaker 1: portfolio of almost three billion dollars UH and certainly a 476 00:26:36,040 --> 00:26:39,000 Speaker 1: lot of changes coming up with both the potential infrastructure 477 00:26:39,000 --> 00:26:41,560 Speaker 1: spending as well as the move toward renewable is one 478 00:26:41,600 --> 00:26:43,840 Speaker 1: thing that we heard a lot about earlier this week, 479 00:26:43,920 --> 00:26:48,320 Speaker 1: really was trying to make money off of renewables at 480 00:26:48,320 --> 00:26:53,639 Speaker 1: a time when there is so much policy uncertainty. Thanks 481 00:26:53,640 --> 00:26:56,280 Speaker 1: for listening to the Bloomberg P and L podcast. You 482 00:26:56,320 --> 00:27:00,000 Speaker 1: can subscribe and listen to interviews at Apple Podcasts, SoundCloud, 483 00:27:00,240 --> 00:27:03,680 Speaker 1: or whatever podcast platform you prefer. I'm Pim Fox. I'm 484 00:27:03,720 --> 00:27:07,240 Speaker 1: on Twitter at pim Fox. I'm on Twitter at Lisa 485 00:27:07,280 --> 00:27:10,200 Speaker 1: Abramo wits one before the podcast. You can always catch 486 00:27:10,320 --> 00:27:12,040 Speaker 1: us worldwide on Bloomberg Radio