Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim
Speaker 1: Fox along with my co host Lisa A. Bramowitz. Each
Speaker 1: day we bring you the most important, noteworthy and useful
Speaker 1: interviews for you and your money, whether you're at the
Speaker 1: grocery store or the trading floor. Find the Bloomberg p
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Speaker 1: All right now, right now, let's talk about Amazon and
Speaker 1: Alphabet parent company of Google earnings with Gene Munster. He
Speaker 1: is with the Loop of Ventures and Gene Munster tell us, well,
Speaker 1: first of all, congratulations on Loop Ventures as always for
Speaker 1: your prosperity and your your upward trajectory. Uh, you're gonna
Speaker 1: match that along with what's going on with Amazon and Google,
Speaker 1: because you know, you seem to have hitched your ride
Speaker 1: to to behemos that just keep growing. Yeah things. So,
Speaker 1: I mean, these are both megacab companies that are enjoying
Speaker 1: a phenomenal core business and have some other beds that
Speaker 1: should really reinvent these companies over the long hals, So
Speaker 1: I just want to give you two quick points. First
Speaker 1: is on Amazon, their unit growth is twenty four percent.
Speaker 1: That's the pace of the sold units. That was the
Speaker 1: same unit growth as in the December quarter, which is
Speaker 1: hard because the numbers get bigger, it's harder to continue.
Speaker 1: That's that's the impression number. And from Google's perspective, dead
Speaker 1: paid click growth, that's the key metric in the street
Speaker 1: was looking forward was up from last quarter. So what
Speaker 1: I really want to emphasize here is these are behemoth companies.
Speaker 1: Their core businesses are doing phenomenal, but the other crazy
Speaker 1: part is that they're investing in these other optionality values
Speaker 1: that will reinvent these businesses in the next decades. You know,
Speaker 1: as you talk about these behemoth companies that are taking
Speaker 1: over everything, I have to bring up the main theme
Speaker 1: that is on a lot of people's minds. At what
Speaker 1: point are these companies too big and are actually restricting
Speaker 1: growth in other parts of the economy and are frankly
Speaker 1: stifling out any competition that could possibly come up. Well,
Speaker 1: both of these companies have a disruptive factor on competition.
Speaker 1: So in to both cases, they had a huge impact
Speaker 1: in the media world. Obviously Amazon what they've done to
Speaker 1: brick and mortar, and so yes, they are causing an
Speaker 1: incredible wake of heartache for other companies. But the reality
Speaker 1: is that this is how consumers want the future to evolve,
Speaker 1: and they are defining that. And so I think that
Speaker 1: that's just the they're not too big too. They still
Speaker 1: have room to get bigger, and unfortunately for other companies,
Speaker 1: they're going to get some companies, a lot of companies
Speaker 1: will get run over teen months to just a but
Speaker 1: you know your numbers into perspective, all right, So unit
Speaker 1: growth at Amazon, at a company that is doing it,
Speaker 1: has a run rate right now of a hundred and
Speaker 1: forty two billion dollars. It's really hard to put your
Speaker 1: mind around. And we love doing this kind of stuff.
Speaker 1: But one other thought here is that if you think
Speaker 1: about total e commerce in the US, about twenty of
Speaker 1: it today is is Amazon, as you mentioned, growing overall
Speaker 1: e commerce from the US and growing at eight percent.
Speaker 1: So these are just staggering numbers. And and I want
Speaker 1: to make sure we also talk a little bit about
Speaker 1: what some of the things that both these companies are
Speaker 1: working on, because that I think it is equally as exciting. Well,
Speaker 1: go for you, go for it, Jim, because as you say,
Speaker 1: this is almost like creative destruction, and it is really uh,
Speaker 1: well it's creating the future now. It is so in
Speaker 1: Amazon's case, the three areas that they're really focused on
Speaker 1: our media fulfillment and then uh international, but media this
Speaker 1: basically they want to become more like a Showtime or
Speaker 1: an HBO and just continue to add content their fulfillment.
Speaker 1: They're doing last mile. And then for Google's side, I
Speaker 1: just want to leave your listeners with a new word
Speaker 1: called TensorFlow. Tenser flow and remember that because this is
Speaker 1: the new platform that Google has that allows anybody to
Speaker 1: access it for doing machine learning and artificial intelligence. And
Speaker 1: they basically Google is allowing everyday people and companies to
Speaker 1: access all their learnings and machine learning. Their CEO mentioned
Speaker 1: Google CEO mentioned it. So the first thing you mentioned
Speaker 1: on the call last night was TensorFlow, and I just
Speaker 1: want to point that out. This is an example of
Speaker 1: how Google is going to redefine themselves with the next decade.
Speaker 1: What about the Google Car. I know that that was
Speaker 1: something that was a pretty hot topic a while back,
Speaker 1: but now there's sort of this feeling that in Detroit,
Speaker 1: the big beheemoth automakers are really gonna have the upper
Speaker 1: hand when it comes to autonomous driving and electric vehicles.
Speaker 1: I think Detroit is going to be in a world
Speaker 1: of hurt in the next one years. I'm sad to
Speaker 1: predict that, but I think that that they just have
Speaker 1: a lot of uh infrastructure around manufacturing and labor that
Speaker 1: is difficult for them to break from. But Google is
Speaker 1: going to take over. I think Google test lads and
Speaker 1: a great position. Google mentioned on their call last night
Speaker 1: that they see their way Motivision, which is the car division,
Speaker 1: to also be in public transportation. I mean, this is
Speaker 1: the type of broad thinking that we're hearing from Google
Speaker 1: when you just don't hear that type of broad thinking
Speaker 1: from Detroit. You know, I just want to take you
Speaker 1: back to this tensor flow t E N s o
Speaker 1: r flow because this is really an amazing site that well,
Speaker 1: you know, you get to use words like neural networks
Speaker 1: for machine translation. I'm not sure exactly what that is.
Speaker 1: I can make a guess, but what are the kinds
Speaker 1: of companies that will be using this so that what
Speaker 1: that is is basically Google allows you to use their
Speaker 1: voice recognition so we can just tap into them. They
Speaker 1: can listen to what we're doing, it can do a
Speaker 1: transcript of it and start to build insights from those transcripts.
Speaker 1: So that's some of the things that you're talking about there.
Speaker 1: But other things that this uh tensor flow does is
Speaker 1: allows you to use Google's learnings by looking at an image,
Speaker 1: so uh looking at image and reading what that image
Speaker 1: my uh information about that image, and so it is uh,
Speaker 1: it's just the start of what is going to be
Speaker 1: a machine learned driven world. Yeah, Gene Munster, thank you
Speaker 1: so much for joining us. We could talk a lot
Speaker 1: about this. Unfortunately we have to leave it there. Jane
Speaker 1: Munster is the co founder of loop Venture's former managing
Speaker 1: director and senior research analyst at Piper Jaffrey Companies. I'm
Speaker 1: Lisa Abramoid's here with pim Fox. You've been listening to
Speaker 1: Bloomberg Markets on Bloomberg eleven three. Oh. We did get
Speaker 1: our GDP report this morning. In the U S economy
Speaker 1: expanded at the slowest pace in three years. This is
Speaker 1: perhaps due to the weaker auto sales and lower home
Speaker 1: heating bills. But does this signify some kind of broader
Speaker 1: weakening that is starting to set in? We want to
Speaker 1: find out. Constance Hunter has some answers for us. Constance
Speaker 1: Hunter is chief economist a KPMG and constants. What was
Speaker 1: your main takeaway from this particular report. Well, two things. One,
Speaker 1: I know everybody's focused on the consumption data because of
Speaker 1: course the consumer seventy GDP and it's very important. And
Speaker 1: the lower energy prices and and mild winter really contributed.
Speaker 1: That subtracted thirty basis points off GDP. Then the lower
Speaker 1: rate of consumption of auto subtracted another forty five basis points,
Speaker 1: so we're looking at factors that really slowed consumption in
Speaker 1: a concerning way. Even if you added back those factors,
Speaker 1: we only have a one percent annualized consumption rate in
Speaker 1: the first quarter. And the question is why. Because we've
Speaker 1: had seventy seven consecutive months of jobs growth, we're starting
Speaker 1: to see wages go up, and not just the wage
Speaker 1: data that we got today, but for example, the Atlanta
Speaker 1: Fed has an index the employment caused their employment cost index,
Speaker 1: which doesn't factor in UH benefits like healthcare. It's it's
Speaker 1: the money that goes right to the individual and only
Speaker 1: for families earning under a D fifty dollars. So it's
Speaker 1: a really important piece of data, and that's showing at
Speaker 1: up three point five percent year of a year. So
Speaker 1: this really is a puzzle. And and so given that,
Speaker 1: I think we're looking at somewhat of a temporary blip
Speaker 1: in the consumption numbers. But the other thing that's not
Speaker 1: getting as much air time is that we subtracted almost
Speaker 1: one percent off of the GDP growth rate because of
Speaker 1: inventory declines. And those inventory declines go hand in hand
Speaker 1: with um imports. So we saw imports increase. We also
Speaker 1: saw exports increase, which is a really good sign. Even
Speaker 1: though net imports subtracted from GDP, that increase in exports
Speaker 1: supports the idea that the rest of the world is
Speaker 1: growing in a more robust and stronger fashion. So it's
Speaker 1: going to help lift GDP overall. And so I think
Speaker 1: we have a hold on one second, I'm actually struggling
Speaker 1: to understand that. In other words, if inventories drop, that's
Speaker 1: because our imports are no, no, no, Sorry I didn't
Speaker 1: explain that. Well. So if if we see the strap
Speaker 1: in inventories this quarter corresponding with an increase in imports,
Speaker 1: what it suggests that the next quarter we're going to
Speaker 1: see those inventories filled back up. Sorry, thank you for
Speaker 1: clarifying that. That wasn't terribly clear. Let me see if
Speaker 1: I can just understand where we are in the cycle though,
Speaker 1: because I I keep hearing this idea that you know,
Speaker 1: we're eight years so whatever it is, seven years into
Speaker 1: a bull market, and they're this business cycle, and then
Speaker 1: you get people will tell you that it's different this time,
Speaker 1: because if you measure it from over here, you know
Speaker 1: it's not the same. What's your take on where we
Speaker 1: are in the in the business and interest rate cycle? Yeah,
Speaker 1: I think we're at late stage. We're what I would
Speaker 1: call the aph inning, and the FEDS job is to
Speaker 1: create extra innings, all right, Um, but we are getting
Speaker 1: to a point where we're having um wage increases. We're
Speaker 1: gonna start to see labor shortages when I don't know,
Speaker 1: sometime in sometime in and that in and of itself
Speaker 1: is going to hamper how much growth we can have
Speaker 1: going for wards. So I think we're going to be
Speaker 1: looking at the all things being equal, which of course
Speaker 1: they never are, but all things being equal, we're looking
Speaker 1: at a mild recession sometime in late nineteen because of
Speaker 1: labor shortages, because we have increased wages, and that's going
Speaker 1: to put a crimp on our ability to continue grows.
Speaker 1: So just in time, for the mid term elections, just
Speaker 1: in time for the mid term. I just wanted to
Speaker 1: make we got that twenty eighteen mid term elections. I
Speaker 1: don't know that will happen in I would say late either,
Speaker 1: like just sort of starting at the end of twenty
Speaker 1: eighteen into twenty nineteen. I think we've got some runway. Well,
Speaker 1: we'll put you down for November two thousand eighteen. I
Speaker 1: want to just point out, Yeah, for now, I wanted
Speaker 1: to point out. Black Rock's chief executive officer, Larry Fink
Speaker 1: was on Bloomberg Television earlier this morning, and he said
Speaker 1: that it was improbable that the US is GDP will
Speaker 1: grow to three percent given the current demographics, and said
Speaker 1: that right now the US is truly slowing down. Um,
Speaker 1: you know, Constants, you seem like it seems like you
Speaker 1: agree with the way, and not just demographics, but also productivity.
Speaker 1: So potential GDP is the sum of the change in
Speaker 1: the growth rate of productivity plus the change in the
Speaker 1: working age population. Working age populations growing at zero point
Speaker 1: that is is immigrants by the way, and productivity zero
Speaker 1: point eight. That gets us to a one point one
Speaker 1: potential GDP. Three is a pipe dream. Constant We were
Speaker 1: talking earlier about the results from Synchrony and Capital One
Speaker 1: showing an increasing number of charge offs for credit card loans.
Speaker 1: How concerned should we be about this? Look at it.
Speaker 1: It seems like it's it's a moderately worrying sign, and
Speaker 1: it's it's something where I would say, this is now
Speaker 1: an indicator you need to watch, whereas to three years
Speaker 1: ago it wasn't an indicator you need to pay attention to.
Speaker 1: If you have a dashboard you're looking at, you need
Speaker 1: to make sure this is on that dashboard, All right,
Speaker 1: that dash But we gotta do you think that dashboard
Speaker 1: is on everybody's desk? Do you think everybody gets we
Speaker 1: have a doomsday countdown? Pretty much everyone here? I mean,
Speaker 1: the only reason I asked is because it certainly doesn't
Speaker 1: look that way when you see you know, when you
Speaker 1: see bonds sell off and you see people go into
Speaker 1: risky acids like stocks in high yield. Yeah, well, look
Speaker 1: where are we on bonds to twenty right? So I
Speaker 1: don't know that looks like a bond rally from where
Speaker 1: I sit based on the last six months, right, we
Speaker 1: had that that we had that backup in the tenure
Speaker 1: year old and now we're back down to twenty and
Speaker 1: my hashtag rates low for a long time has remarkable
Speaker 1: shelf life that has surprised even me. And you're calling
Speaker 1: stuff for two more interest rate hikes one I think
Speaker 1: one more this year. So they had forecast three for
Speaker 1: this year and and I think they'll be lucky to
Speaker 1: get away with two rate hikes this year. All right,
Speaker 1: thanks very much appreciated. Constance Hunter joining us KPMG Chief Economist,
Speaker 1: much appreciated. We want to take a moment to let
Speaker 1: you know about something new from Bloomberg. Starting right now,
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Speaker 1: Google Chrome extension to scan any news story on any website,
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Speaker 1: It's pretty amazing. Download our io s app or search
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Speaker 1: it out. Learn more at Bloomberg dot com. Slash lens
Speaker 1: Well the zero point seven percent increase in first quarter GDP,
Speaker 1: notwithstanding our next guest says that trends and consumer confidence
Speaker 1: are healthy, and that consumers are expressing optimism regarding the
Speaker 1: short term outlook for business, jobs, and personal finance. This
Speaker 1: all leads us to housing and Cheryl Palmer, the chief
Speaker 1: executive of Taylor Morrison. Cheryl Palmer, thank you very much
Speaker 1: for being with us, my pleasure. Thank you very much
Speaker 1: for having me. Now. I was able to go through
Speaker 1: your conference call, and boy, there are a lot of
Speaker 1: different metrics that you use to judge the health of
Speaker 1: your business, and I don't know whether you want to
Speaker 1: start with net sales orders, just explained for people how
Speaker 1: do you determine success, and then maybe talk a little
Speaker 1: bit about the regional strength, which you say is pretty comprehensive. Yeah, no,
Speaker 1: thank you. You know, we did report yesterday and we're
Speaker 1: quite delighted with the results we were able to share.
Speaker 1: And there are a number of metrics to your point,
Speaker 1: but they all do derive from your opening comments, and
Speaker 1: that's how people are feeling about the world today. And
Speaker 1: I think there's been very encouraging signs as we you know,
Speaker 1: came through fourth quarter and certainly came into the spring
Speaker 1: selling season of the first quarter. The consumers feeling good,
Speaker 1: They're feeling confident, healthy, there's out there spending money, they
Speaker 1: feel good about their jobs. They're starting to see UM
Speaker 1: improvement in income, you know, affordability. So it is still
Speaker 1: very very good low interest rates. And that's know, that's
Speaker 1: creating UM an optimism in our business and it really
Speaker 1: manifested itself through UM a thirty three increase of sales
Speaker 1: here over a year, you know, Cheryl Um. First of all,
Speaker 1: I wanted to ask if you are concerned about the
Speaker 1: pricing in certain markets, particularly Toronto, San Francisco, New York.
Speaker 1: People are saying that the acceleration is certainly slowing down.
Speaker 1: If not, uh, you know, showing signs of petering out,
Speaker 1: particularly on the highest end. Are you seeing something similar
Speaker 1: to sort of edify the concern of sort of slowed
Speaker 1: down in those markets? You know, we actually have had
Speaker 1: great success across all of our price point. Now, some
Speaker 1: of the markets you mentioned we build, and we used
Speaker 1: to build in Toronto, we don't anymore, UM, but we
Speaker 1: do build in San Francisco. We do build in markets
Speaker 1: across the US and to a number of consumer groups,
Speaker 1: and we are seeing strength UM at the first time
Speaker 1: buyers We're seeing it in that move up second time buyer.
Speaker 1: We're seeing it with our fifty plus and those are
Speaker 1: some of our highest average sales prices. And um, some markets,
Speaker 1: you know, they are getting back to what I would
Speaker 1: call some of the historic highs and some markets still
Speaker 1: have a lot of runway. But as we reported yesterday,
Speaker 1: you know we've raised prices and probably about our community
Speaker 1: is just in the first quarter. So could you speak
Speaker 1: a little bit about the Esplanade Golf and a country
Speaker 1: club community. That one is in sarah Sota, but you've
Speaker 1: got a variety of them, and I want you to
Speaker 1: use that as an example of the kinds of products
Speaker 1: that you are putting into the marketplace and maybe tell
Speaker 1: us a little bit about the customer reception and cost. Yeah,
Speaker 1: that one's really exciting. Our Esplanade brand is in Florida,
Speaker 1: and we have ten of these lifestyle communities throughout Florida.
Speaker 1: And the one that I highlighted in our call yesterday,
Speaker 1: you're right, was in um Sara Soda, and I spoke
Speaker 1: to the new amenities that we've opened and really the lifestyle,
Speaker 1: the Ritz Carlton approach and our programming that we've created
Speaker 1: with really dedicated concierge's staff, and we have seen throughout
Speaker 1: Florida and throughout the Esplanade brand building since the middle
Speaker 1: of last year through the shoulder selling season um at
Speaker 1: a number of price points. Is even in our Esplanade
Speaker 1: communities we build from, you know, the low two hundreds,
Speaker 1: well over a million dollars. And these are very discerning
Speaker 1: folks know what they want now, when they wanted, how
Speaker 1: they want it, and they're going to get exactly that.
Speaker 1: And we've had just a phenomenal spring selling season, and
Speaker 1: I credit the team's great execution in delivering new amenities
Speaker 1: with great pulside service, antiki bar and new restaurants. That's
Speaker 1: how I gotta say. So that sounds it sounds lovely
Speaker 1: and clearly well. But I want to also while we've
Speaker 1: got to want you to talk a little bit about
Speaker 1: where you are making new deals, where you are acquiring property,
Speaker 1: because I know Atlanta has been a focus as well
Speaker 1: as Dallas, and you've got that Darling brand, You're correct,
Speaker 1: and so our Darling businesses in Dallas and Houston, and
Speaker 1: we are certainly investing in It's it's new for us.
Speaker 1: I mean, we just introduced our Taylor Morrison Brandon Dallas.
Speaker 1: So now we have both our Darling and Taylor Morrison
Speaker 1: in Houston, we also have both brands, So Dallas with
Speaker 1: the new Taylor Morrison brand, were investing California, were investing
Speaker 1: UM some of our newer markets in the Caroline. It's
Speaker 1: really across the portfolio. Phoenix is one of our larger
Speaker 1: are larger businesses, so that machine continues to need to
Speaker 1: be invested in UM. So we're looking for opportunities across
Speaker 1: the US today. Cheryl, this might seem like a kind
Speaker 1: of stage left question, but in my opinion, we read
Speaker 1: a lot about, you know, potential flooding on the coasts
Speaker 1: and concerns that potential buyers might have about this when
Speaker 1: people are buying your properties. Are you finding that a
Speaker 1: lot more people are talking about that where it's located,
Speaker 1: what the potential risk would be in a flooding type
Speaker 1: the situation. You know, we don't see that often. Certainly
Speaker 1: we have exorbitant range and some markets across the country,
Speaker 1: but I wouldn't tell you that that's top on the
Speaker 1: folks mind. Not with rains, not with raids. I'm talking
Speaker 1: about coastal properties. As you know, sees rise because we've
Speaker 1: been reading a lot about you know that this could
Speaker 1: potentially even impede valuations in places like Miami or other
Speaker 1: coastal cities. Yeah, I'm really going to come down to
Speaker 1: once again, we don't We're not in Miami, but we
Speaker 1: certainly are in many coastal cities in California, and it
Speaker 1: really comes down to the design and the development of
Speaker 1: those communities UM and how that infrastructure has been created.
Speaker 1: And be honest, it's not something that I would tell
Speaker 1: you is on top of consumers minds. Land acquisition, Where
Speaker 1: are you doing the most acquisition? I know you try
Speaker 1: to do it organically, but maybe give us some markets.
Speaker 1: So some of the markets I just mentioned Texas, UM's
Speaker 1: very healthy, California, Arizona, are smaller businesses in Colorado and
Speaker 1: the Caroline As. We are investing, and we're investing over
Speaker 1: the last couple of years, we've done some UM acquisitions
Speaker 1: of new companies. Right now, we're very focused on organic
Speaker 1: acquisition to your point, and I would tell you it's
Speaker 1: really across our entire portfolio, and we tend to have
Speaker 1: our longer landbanks where we build large master planned communities
Speaker 1: like our esplanades in Florida, but we're still looking for
Speaker 1: opportunities there and then in Arizona as well. Are you
Speaker 1: concerned because this you're describing something that sounds like a
Speaker 1: perfect alignment of the stars, and I'm wondering when that happens.
Speaker 1: Do you there's a little voice go off in your
Speaker 1: head that says, well, this isn't gonna last forever. Um,
Speaker 1: that voice is always in my head and that's why, um,
Speaker 1: you know, it might sound good and it is, and
Speaker 1: generally I am very bullish on how the market hang on.
Speaker 1: We're going to just have to break in Cheryl Palmer,
Speaker 1: Chief executive Taylor Morrison, thank you very much. Well, we
Speaker 1: want to learn more about utility stocks because utilities used
Speaker 1: to be the stocks you went to if you were
Speaker 1: looking for yield, but perhaps times have changed. We have
Speaker 1: John Bartlett. He is the vice president of Reeves Asset Management.
Speaker 1: He joins us here in our Bloomberg eleven three oh studios. John,
Speaker 1: thanks very much for coming in. Our utilities looked upon
Speaker 1: as investments for yield or has that just been thrown
Speaker 1: out the window? Him? Principally not yield is a very
Speaker 1: still important part of the total return of um of utilities.
Speaker 1: But but they do have an opportunity for you know,
Speaker 1: pretty pretty modest earnings growth. We see the industry growing
Speaker 1: it's earnings about five percent per year, and that's really
Speaker 1: on the back of continued investment, largely at the state level,
Speaker 1: but also at the federal level too. So UM, I
Speaker 1: want to I want to talk a little bit of
Speaker 1: it infrastructure spending because definitely your world overlaps we had
Speaker 1: heard during the campaigning season about a one trillion dollar
Speaker 1: infrastructure spending plan. We haven't heard much more about it,
Speaker 1: but you know, is there still some opportunity from fiscal
Speaker 1: stimulus that you are expecting to actually happen in the
Speaker 1: near term. Well, you know, the good news on that
Speaker 1: front is, UM, it doesn't really matter that much to
Speaker 1: me as utility investor. UM. One of the things we're
Speaker 1: really looking forward to right now is getting UM five
Speaker 1: commissioners back at the Federal Energy Regulatory Commission that's going
Speaker 1: to That's probably the easiest way that the federal government
Speaker 1: can get money started spending on infrastructures, just to get
Speaker 1: those uh uh, those commissioners back in their seats, because
Speaker 1: once that happens, there's a real spending opportunity. And for instance,
Speaker 1: there's a number of pipelines that are just simply held
Speaker 1: up by the fact that they don't have commissioners in
Speaker 1: their chairs. The federal government doesn't need to spend the
Speaker 1: time to get that stuff going. Well, you know, John,
Speaker 1: we Uh, Lisa and i UH and the Bloomberg team,
Speaker 1: we were at the Bloomberg New Energy of Finance, a
Speaker 1: summit looking into the future of energy, and the constant
Speaker 1: theme was renewables and the actual cost of generating electricity.
Speaker 1: And I'm one, I'm warning you know, your your firm
Speaker 1: has been what fifty five years in business, you specialized
Speaker 1: in this. You manage nearly three billion. You've got an
Speaker 1: E t F that focuses on on utilities, which maybe
Speaker 1: you can paint us a picture of the utility that
Speaker 1: is the most forward thinking when it comes to embracing
Speaker 1: this renewable and low cost structure. Well, we're very excited
Speaker 1: him uh. And if you look at the portfolio UH
Speaker 1: that that's in the E t F, the ticker symbol
Speaker 1: for that is U T E S, you'll see that
Speaker 1: we're we're for us. Renewables are a very important focus
Speaker 1: for us. We see that wind um resources will become
Speaker 1: very competitive with UH, with other forms of electric generation,
Speaker 1: even without the tax credits that they enjoy Today. Generally speaking,
Speaker 1: the price of power is going down. There's not a
Speaker 1: lot of demand incremental demand for new power. We continue
Speaker 1: to find new ways to make generating power cheaper, and
Speaker 1: the price of natural gas remains under control. So everything
Speaker 1: from from that perspective really creates a great backdrop for
Speaker 1: investment in utilities or for utilities because you know they
Speaker 1: can go put put dollars to work and help help
Speaker 1: their customers without having to go hat in hand back
Speaker 1: to the regulator asking for for big rate rate increases
Speaker 1: above inflation. So in your almost three billion dollar portfolio
Speaker 1: of assets, what proportion would you say is tied to
Speaker 1: renewable energy utilities versus others? And how much has that grown? Sure? Um, Well,
Speaker 1: if you look at at everything that we manage, our
Speaker 1: our largest single customers are closed and mutual fund and
Speaker 1: the ticker symbol for that is is u t G.
Speaker 1: That's about eight percent utilities. In fact, it's called the
Speaker 1: Reeves Utility Income Fund. UM. I would say across the
Speaker 1: rest of the spectrum about um would be would be
Speaker 1: utilities And how much is that up from say, five
Speaker 1: years ago? Um, you know, it's it's probably about about
Speaker 1: the same. Um. We will always have obviously a great
Speaker 1: deal of utilities and what we do. It's something that
Speaker 1: we're experts on and spent a lot of time time studying.
Speaker 1: But what I like about this particular portfolio, just in
Speaker 1: terms of its diversity, is it not just it does
Speaker 1: not just include what we consider energy utilities. It concludes
Speaker 1: companies such as Charter Communications, Comcast, Verizon. We forget that,
Speaker 1: you know, Verizon and A T and T. We forget
Speaker 1: sometimes that the telephone and the mobile phone operators nowadays
Speaker 1: are considered utilities and therefore those dividends are available for harvest. Well,
Speaker 1: they're not regulated in the same way that utilities are.
Speaker 1: But but you're absolutely right. We we we consider them
Speaker 1: core infrastructure holdings and uh and we're very excited about
Speaker 1: about cable generally because I noticed also, and we were
Speaker 1: talking with Vince Piazza are US oil and Gas analyst,
Speaker 1: and one of the companies in here is Royal Dutch Shell.
Speaker 1: Now he doesn't cover but you know, I was looking
Speaker 1: at the dividend of Royal Dutch Sell and we're talking
Speaker 1: like over seven percent. That's right, and Pim, we're not
Speaker 1: really counting on a on a huge rebound in the
Speaker 1: price of oil right now. We're we're sort of it.
Speaker 1: We try to be as agnostic as we can to
Speaker 1: the price of oil, but within Royal Dutch there is
Speaker 1: a wonderful cost cutting opportunity that's been at work and
Speaker 1: we think is going to continue to play out. Thank
Speaker 1: you so much for joining us. Truly a pleasure to
Speaker 1: speak with you. John Bartlett is vice president of Reeves
Speaker 1: Asset Management that he is focusing on utilities with a
Speaker 1: portfolio of almost three billion dollars UH and certainly a
Speaker 1: lot of changes coming up with both the potential infrastructure
Speaker 1: spending as well as the move toward renewable is one
Speaker 1: thing that we heard a lot about earlier this week,
Speaker 1: really was trying to make money off of renewables at
Speaker 1: a time when there is so much policy uncertainty. Thanks
Speaker 1: for listening to the Bloomberg P and L podcast. You
Speaker 1: can subscribe and listen to interviews at Apple Podcasts, SoundCloud,
Speaker 1: or whatever podcast platform you prefer. I'm Pim Fox. I'm
Speaker 1: on Twitter at pim Fox. I'm on Twitter at Lisa
Speaker 1: Abramo wits one before the podcast. You can always catch
Speaker 1: us worldwide on Bloomberg Radio