WEBVTT - Markets, Labor, And The Supply Chain 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.080 at Bloomberg dot com slash podcast. Let's check in with 0:00:23.120 --> 0:00:26.160 Phil Orlando, chief equity market strategist and head of client 0:00:26.239 --> 0:00:30.120 portfolio Management at Federated Hermes. Uh. They are big folks, 0:00:30.200 --> 0:00:34.400 over six hundred billion dollars in assets under management. Phil. 0:00:34.720 --> 0:00:37.960 I'm an equity investor. I'm looking at two I see 0:00:38.040 --> 0:00:41.479 rates are gonna be rising. I see the economy is 0:00:41.520 --> 0:00:44.080 going to be slowing. Is there any place for me 0:00:44.120 --> 0:00:48.519 to be in the equity markets? Uh? Yeah, It's certainly 0:00:48.520 --> 0:00:50.640 going to be a more volatile year, certainly going to 0:00:50.720 --> 0:00:54.080 be a choppier year. But we think when the dust 0:00:54.120 --> 0:00:57.200 settles at the end of the year, stock market will 0:00:57.240 --> 0:01:01.240 be maybe ten percent or so higher than forty hundred 0:01:01.280 --> 0:01:03.320 where we started the year. We think will end the 0:01:03.400 --> 0:01:06.760 year at about fifty three hundred. But that's going to 0:01:06.840 --> 0:01:09.720 be a very back end loaded kind of performance. The 0:01:09.760 --> 0:01:12.880 first nine months of the year. In our mind, UH 0:01:13.080 --> 0:01:15.640 is going to be very choppy, very volatile, with the 0:01:15.720 --> 0:01:20.520 focus on this soaring inflation, what's the federal Reserve doing 0:01:20.560 --> 0:01:24.360 in terms of changing policy, and so you know, we 0:01:24.480 --> 0:01:27.240 thought there would be an eight to twelve percent correction 0:01:27.600 --> 0:01:31.800 or so over the first couple of quarters of the year. UM. 0:01:31.920 --> 0:01:35.720 The emphasis here is going to be preserving capital, and 0:01:35.720 --> 0:01:39.600 and that suggests owning the stocks that are cheaper, that 0:01:39.760 --> 0:01:43.759 have lower datas, that have higher dividend yield support. UM. 0:01:43.959 --> 0:01:47.640 So we like domestic large cap and small cap value. 0:01:47.800 --> 0:01:52.720 We like small cap stocks, we like international stocks, and 0:01:52.720 --> 0:01:55.520 and those stocks have been performing a lot better than 0:01:55.520 --> 0:01:59.560 the growthier technology stocks, which which have been trading at 0:01:59.600 --> 0:02:04.600 at you know, sort of nosebleed valuation levels. So hang on, 0:02:04.680 --> 0:02:07.920 you want to in preserving capital, you want to buy 0:02:07.960 --> 0:02:11.560 a small cap stocks? How's that defensive? The small cap 0:02:11.600 --> 0:02:14.240 stocks have gotten taken out behind the wood shed, So 0:02:14.320 --> 0:02:19.079 the valuation is significantly more attractive than the large cap 0:02:19.120 --> 0:02:23.240 growth names. The small cap stocks quite literally a cheaper 0:02:23.280 --> 0:02:26.400 than the large cap stocks, and they've got better growth. Um. 0:02:26.480 --> 0:02:29.160 Most people think that it's the small cap stocks that 0:02:29.160 --> 0:02:31.800 are trading at you know, fifty or a hundred times 0:02:31.840 --> 0:02:35.200 forward earnings. That's not the case. So the value stocks, 0:02:35.240 --> 0:02:38.480 the small cap stocks, the international stocks are the places 0:02:38.520 --> 0:02:41.680 you're gonna find better value. And then what do you 0:02:41.760 --> 0:02:44.959 look for a specific sign to get back into the 0:02:45.000 --> 0:02:47.480 broader market If we're gonna ra at the end of 0:02:47.520 --> 0:02:49.160 the year, or is there a certain time that you 0:02:49.160 --> 0:02:52.600 want to do that, Well, certainly I think there's gonna 0:02:52.600 --> 0:02:56.680 be chopped into the late summer early fall period. We 0:02:56.720 --> 0:03:00.240 want to see how this inflation plays out. We want 0:03:00.240 --> 0:03:02.920 to see what the FEDS change in policy is going 0:03:03.000 --> 0:03:05.480 to be. We know the tapering is going to end 0:03:05.480 --> 0:03:07.920 in March. They told us that. We know they're going 0:03:07.960 --> 0:03:10.720 to start to raise interest rates in March. They told 0:03:10.760 --> 0:03:14.080 us that what we don't know is are they gonna 0:03:14.680 --> 0:03:18.919 tighten policy, raise interest rates every meeting every other meeting. 0:03:19.280 --> 0:03:21.839 Are they gonna give us a bunch of twenty five 0:03:21.880 --> 0:03:24.400 basis point heights? Are they going to front load with 0:03:24.480 --> 0:03:27.080 a couple of fifties? Are they going to start to 0:03:27.120 --> 0:03:33.040 aggressively shrink the balance sheet either passively or uh actively 0:03:33.080 --> 0:03:34.840 in the middle of the year. There's a lot of 0:03:34.880 --> 0:03:38.920 open questions, and importantly, We don't know who five of 0:03:38.960 --> 0:03:42.800 the seven members of the Board of Governors UH is 0:03:42.840 --> 0:03:45.960 going to be until the Senate confirms them or not 0:03:46.960 --> 0:03:49.640 later this month. So there's a lot of open questions 0:03:49.920 --> 0:03:55.920 surrounding inflation and federal reserve makeup and policy. Phil It's 0:03:55.960 --> 0:03:58.520 it's interesting here. We we've had, you know, this pullback 0:03:58.520 --> 0:04:00.800 in the marketplace. We've had a little bit of a 0:04:00.840 --> 0:04:04.600 bounce back here over the past week here. Um one 0:04:04.600 --> 0:04:06.680 of the sectors that has been really interesting. I look 0:04:06.720 --> 0:04:10.119 at w t I crude oil at a barrel. Yes, 0:04:10.240 --> 0:04:13.680 it's had such a move. Have the stocks had their 0:04:13.760 --> 0:04:15.760 day or is there still room to grow? I know 0:04:15.800 --> 0:04:18.480 a lot of folks thinking about that. Well, there's no 0:04:18.600 --> 0:04:21.560 question that energy has been the best performer to date, 0:04:21.680 --> 0:04:25.440 and and deservedly so. Crude oil has gone from thirty 0:04:25.560 --> 0:04:28.839 or thirty five dollars a barrel back in November of 0:04:29.880 --> 0:04:32.279 as you said, we're now at ninety dollars a barrel 0:04:32.360 --> 0:04:35.880 going higher. We're probably going to be a hundred hundred 0:04:35.960 --> 0:04:38.080 twenty by the end of the year. Why is that 0:04:38.400 --> 0:04:41.839 You've got this global reopening trade UH in which there 0:04:41.960 --> 0:04:46.480 is a significant demand for energy, Yet the largest energy 0:04:46.520 --> 0:04:50.080 producer in the world. The United States, we voluntarily reduced 0:04:50.080 --> 0:04:53.960 our production by over the course of the last year 0:04:54.839 --> 0:04:57.880 because of fiscal policy. So as a result, what's the 0:04:57.920 --> 0:05:03.400 clearing mechanism, price price has gone higher. Less less supply, 0:05:03.600 --> 0:05:06.320 more demand, and and that trend is going to continue 0:05:06.600 --> 0:05:10.279 until either the demand slows or we're able to put 0:05:10.320 --> 0:05:14.479 more more product onto the market. And the latter's looks 0:05:14.480 --> 0:05:19.080 seemingly difficult, right, I mean, opec Um doesn't have that 0:05:19.200 --> 0:05:22.920 much spare capacity. Well two issues. Number one, they're saying, well, 0:05:22.960 --> 0:05:26.960 we're just going to slowly add four dred thousand barrels, 0:05:26.960 --> 0:05:30.760 you know, a day over the next month to increase 0:05:30.839 --> 0:05:33.320 that but there are legitimate questions as to whether or 0:05:33.360 --> 0:05:35.760 not they've got any oil that they can put onto 0:05:35.760 --> 0:05:38.720 the market. They have they they may be uh, they 0:05:38.760 --> 0:05:41.119 may be running on empty right now. So the swing 0:05:41.160 --> 0:05:43.880 producer is going to be the United States. And and 0:05:44.160 --> 0:05:46.679 you know, over the course of the last year, we've 0:05:46.720 --> 0:05:50.000 taken our production down from thirteen million barrels a day 0:05:50.000 --> 0:05:52.599 to eleven million barrels a day. So in order to 0:05:52.680 --> 0:05:56.760 get the price lower, US producers need to be encouraged 0:05:56.800 --> 0:06:00.440 by the federal government to to start exploring and produce 0:06:00.480 --> 0:06:03.640 you more. By the way, Philip, we're at the SMP 0:06:04.080 --> 0:06:07.400 and crew is trading for hundred ten, hundred twenty. Where 0:06:07.400 --> 0:06:09.000 do you see the tenure at the end of the year. 0:06:09.800 --> 0:06:12.760 We think benchmark tens which are about one ninety now, 0:06:13.360 --> 0:06:15.159 we think they'll be closer to two and a half 0:06:15.200 --> 0:06:17.800 percent by the end of the calendar year. Interesting. See. 0:06:17.800 --> 0:06:20.360 Phil always brings the goods, you know, always got some 0:06:20.640 --> 0:06:23.200 headlines coming out of Philip Orlando. Phil, thanks so much 0:06:23.200 --> 0:06:26.279 for joining us. As always, we appreciate your clear calls 0:06:26.760 --> 0:06:30.560 on these markets. Phil Orlando, chief equity market strategist and 0:06:30.640 --> 0:06:34.560 head of Client Portfolio Management. He's a federated at HERMIS. 0:06:34.600 --> 0:06:38.080 Those federated folks are based in Pittsburgh, but uh fills 0:06:38.200 --> 0:06:45.560 in New York City. All right, let's talk interest rates. 0:06:45.600 --> 0:06:47.400 They're going higher. A lot of folks want to say 0:06:47.720 --> 0:06:49.440 where we want to get an understanding of, you know, 0:06:49.480 --> 0:06:52.479 how quickly and how much preamra she does this for 0:06:52.480 --> 0:06:54.719 a living Managing director in Global head of rate Strategy 0:06:54.720 --> 0:06:58.360 at TV Securities. Is my federal reserve gonna lift interest 0:06:58.400 --> 0:07:02.599 rates fifty basis points in mark? Thy thanks for having 0:07:02.600 --> 0:07:06.200 me on. We don't think not in March. I mean, 0:07:06.279 --> 0:07:10.080 it's not obvious to us that the benefits of going fifty, 0:07:10.160 --> 0:07:11.920 which is not priced in, it would be a huge 0:07:11.920 --> 0:07:15.080 shock to the market. It would tighten financial conditions that 0:07:15.400 --> 0:07:18.280 it's worth it. From the Fed standpoint, I mean, I 0:07:18.280 --> 0:07:21.280 think they're signaling that they're about to start hiking. We 0:07:21.360 --> 0:07:26.040 think largely consecutive meetings of hikes until as well as 0:07:26.120 --> 0:07:30.080 quantitative tightening until we figure out whether inflation is decelerating 0:07:30.080 --> 0:07:32.000 in the second half of the year, which we do expect. 0:07:32.040 --> 0:07:34.680 So we're looking for them to start in March, continue 0:07:34.680 --> 0:07:38.480 to hike it connegative meetings, and then slow down into 0:07:38.520 --> 0:07:41.360 your end because we see inflation declining. But I would 0:07:41.400 --> 0:07:45.200 stress that quantitative tightening is likely to move into strates higher. 0:07:45.320 --> 0:07:47.360 I mean, we don't think they go fifty, but if 0:07:47.400 --> 0:07:50.280 they start letting the balance sheet run off. The balance 0:07:50.320 --> 0:07:52.760 sheet is much larger than it was in seventeen, it 0:07:52.800 --> 0:07:55.320 has a shorter week to average maturity, and that's going 0:07:55.320 --> 0:07:57.600 to put a lot of treasury supply in the market, 0:07:57.640 --> 0:08:00.200 which we think will take that tenure higher. So we're 0:08:00.240 --> 0:08:02.720 looking forward to in a quarter on the tenure, the 0:08:02.720 --> 0:08:05.040 pace is tricky. When does the market start to price it, 0:08:05.200 --> 0:08:07.320 and you could get a faster move to that to 0:08:07.400 --> 0:08:09.520 in a quarter. But I do think the long end 0:08:09.560 --> 0:08:11.920 the front ense price for hikes. I think the long 0:08:12.040 --> 0:08:14.680 end still has some some work to do in terms 0:08:14.720 --> 0:08:17.640 of moving higher in rates to price. In this exit 0:08:17.720 --> 0:08:21.320 from off the Fit, It's been twenty five years since 0:08:21.360 --> 0:08:25.520 I took statistics from Hassan Rockmanny and at Antioch College. 0:08:25.560 --> 0:08:27.720 And to be honest, I was in a college in 0:08:28.080 --> 0:08:31.680 Yellow Springs, Ohio, really great, great place, and it was 0:08:31.680 --> 0:08:34.240 super fun, which is why I didn't pay much attention 0:08:34.280 --> 0:08:38.200 in statistics. But um, so the language I don't I 0:08:38.200 --> 0:08:42.520 don't have downpad. But you know, there can be a 0:08:42.520 --> 0:08:45.120 couple of different scenarios when you're making forecasts. Right, On 0:08:45.160 --> 0:08:47.280 the one hand, you can have a high degree of 0:08:47.320 --> 0:08:50.080 probability your base case is very likely to happen when 0:08:50.080 --> 0:08:53.400 you're looking at say um you know, year end fed 0:08:53.960 --> 0:08:57.440 UM policy and inflation. On the other hand, you can 0:08:57.480 --> 0:09:00.760 have a really broad distribution of probability these right. I mean, 0:09:01.760 --> 0:09:03.360 as you said, we don't know what's going to happen 0:09:03.400 --> 0:09:05.559 with inflation. Maybe it turns around in the middle of 0:09:05.600 --> 0:09:08.480 the year and then the fat doesn't have to hike five, six, 0:09:08.559 --> 0:09:12.000 seven times, or maybe inflation keeps coming on strong and 0:09:12.040 --> 0:09:14.360 they have to do not just one, but multiple fifty 0:09:14.400 --> 0:09:18.400 basis point rate hikes. Is this a situation where the 0:09:18.559 --> 0:09:25.120 likelihood we're forecasting the end game is much more difficult? Yes, 0:09:25.200 --> 0:09:27.480 it is, And I would say for a couple of reasons, 0:09:27.679 --> 0:09:30.240 we're still in the midst of a pandemic. Um. I mean, 0:09:30.280 --> 0:09:32.800 as much as we'd like to think that it's behind us, 0:09:33.200 --> 0:09:37.000 the impact of it on supply chains, on the goods 0:09:37.040 --> 0:09:40.000 to services, that that demand transition that we've been reading 0:09:40.000 --> 0:09:42.200 now for a year, I mean there's some aspect of 0:09:42.240 --> 0:09:44.720 that that flows into not just the labor market, but 0:09:44.800 --> 0:09:47.720 also inflation, because as much as inflation was a supply 0:09:47.760 --> 0:09:50.239 chain issue, was also a demand issue. There was significant 0:09:50.240 --> 0:09:53.160 demand for goods. So we're still trying to figure out 0:09:53.200 --> 0:09:57.600 the impact over the how COVID itself, um, you know, 0:09:57.640 --> 0:10:00.800 how how the pandemic progresses, How is the impact of 0:10:00.840 --> 0:10:04.320 that flow through. So there's that macro risk. And then 0:10:04.679 --> 0:10:06.480 to your point, I mean trying to figure out the 0:10:06.520 --> 0:10:09.800 timing of when inflation will decline. And at the same 0:10:09.840 --> 0:10:11.959 time you have a FED that I think has stepped 0:10:11.960 --> 0:10:14.840 back from forward guidance. They're telling us they're likely to 0:10:14.960 --> 0:10:17.959 start the exit soon, but after that, all options around 0:10:17.960 --> 0:10:21.480 the table because of being I think inherent uncertainty around 0:10:21.679 --> 0:10:25.240 the data and I think concerns that they might be 0:10:25.240 --> 0:10:27.559 behind the curve, which is why I think that fifty 0:10:27.559 --> 0:10:29.640 basis point will give a very strong signal that the 0:10:29.720 --> 0:10:32.840 FED things there behind the curve. But I think they 0:10:32.880 --> 0:10:35.240 want to keep all options on the table because they 0:10:35.240 --> 0:10:38.000 may have to go faster. And that's the case. Where 0:10:38.040 --> 0:10:40.760 can they go faster on QT or can they go 0:10:41.080 --> 0:10:43.280 more hikes market pricing? In about five and a half 0:10:43.360 --> 0:10:47.040 hikes this year there are seven meetings, they could technically 0:10:47.040 --> 0:10:49.880 go seven times, just twenty five, and it's much more 0:10:49.960 --> 0:10:53.560 than Well, Also, the hikes probably aren't going to have 0:10:53.720 --> 0:10:55.959 and as much of an effect on markets as QT 0:10:56.480 --> 0:10:59.520 are they. I mean, if they if they unwind two 0:10:59.600 --> 0:11:02.600 or three trillion dollars from their balance sheet, they still 0:11:02.640 --> 0:11:04.559 haven't gone through everything they build up since the beginning 0:11:04.559 --> 0:11:06.840 of the pandemic, and that would hit markets. I think, 0:11:07.000 --> 0:11:10.719 you know, that's way more than anyone expects. Exactly, and well, 0:11:10.760 --> 0:11:13.480 we've noticed real rates as well as the equity market 0:11:13.640 --> 0:11:16.920 or financial conditions in general seem to react much more 0:11:17.000 --> 0:11:21.240 to QT because there's a permanence to it. While on hike, 0:11:21.559 --> 0:11:23.760 if all we're doing is moving a hike from two thousand, 0:11:23.840 --> 0:11:26.400 twenty three to twenty two, you know it's a big 0:11:26.480 --> 0:11:28.880 deal if you're trading fret front futures, But it doesn't 0:11:28.920 --> 0:11:31.400 matter as much in terms of interest rates because you've 0:11:31.400 --> 0:11:34.000 just taken front loaded the hikes as opposed to increase 0:11:34.040 --> 0:11:36.400 the number of hikes. And notice the endpoint of the 0:11:36.440 --> 0:11:39.640 hiking cycle, the market pricing of that hasn't changed. It's 0:11:39.720 --> 0:11:42.920 been between one seventy five and one nine, so it's 0:11:42.920 --> 0:11:45.440 not like the markets adding more hikes. We're just moving 0:11:45.559 --> 0:11:48.680 hikes from one year to another. But QUT is a 0:11:48.679 --> 0:11:51.960 different story. At that point, there's a lot more treasuries 0:11:51.960 --> 0:11:54.640 and we need to find that marginal buyer for treasuries 0:11:54.960 --> 0:11:58.160 in auctions that every other week the Treasury has auctions. 0:11:58.160 --> 0:12:00.240 So yes, I think QUT is a bigger One of 0:12:00.280 --> 0:12:02.120 the reasons why we think the FIT would not have 0:12:02.200 --> 0:12:04.720 to hike as much is because of all right, prea 0:12:04.760 --> 0:12:06.480 thank you so much for joining us. Always appreciate a 0:12:06.480 --> 0:12:09.199 pre MISERM Managing director and global head of Rate strategy 0:12:09.200 --> 0:12:16.000 at TV Securities. Let's continue our discussion of the US 0:12:16.200 --> 0:12:18.440 labor market. We can do that now with Nolan Church, 0:12:18.679 --> 0:12:22.640 CEO and co founder of Continuum. Nolan former chief people 0:12:22.840 --> 0:12:26.680 Officer Carter, former head of Talented door Dash, former recruiter Google, 0:12:27.080 --> 0:12:30.240 so he knows all about this hiring and retaining talent 0:12:30.360 --> 0:12:34.720 stuff and captain of in Captain baseball team, the baseball 0:12:34.720 --> 0:12:36.360 team at the Universe with the name like Nolan, do 0:12:36.400 --> 0:12:38.120 you have to I think you have to be a 0:12:38.120 --> 0:12:40.400 baseball player. You can't go out there and you know, 0:12:40.840 --> 0:12:43.199 be a frisbee ultimate frisbe play. You're gonna be a 0:12:43.200 --> 0:12:46.080 bas frisbee golf exactly. Nolan, thanks so much for joining 0:12:46.160 --> 0:12:48.120 us here. One of the many questions I have about 0:12:48.120 --> 0:12:51.439 this unique place in time in our in our labor market, 0:12:51.520 --> 0:12:54.200 is you know, the four to five million people that 0:12:54.320 --> 0:12:58.640 aren't in the labor market today that we're there pre pandemic, 0:12:58.840 --> 0:13:01.240 Who are they? Where did they go? And are they 0:13:01.280 --> 0:13:04.120 ever coming back? Yeah, it's a great question. First of all, 0:13:04.120 --> 0:13:05.880 it's great to be here. Thanks for having me on. Guys. 0:13:06.559 --> 0:13:09.800 I think that's the big mystery we're all trying to solve. Now. 0:13:09.920 --> 0:13:11.560 What I would tell you is is that I can't 0:13:11.559 --> 0:13:13.960 tell you for certain for all four to five million, 0:13:14.360 --> 0:13:16.000 you know where they are ended up right now, But 0:13:16.160 --> 0:13:18.599 I will tell you that I think a large majority 0:13:18.640 --> 0:13:22.240 of those people have actually become solo preneurs. I think 0:13:22.240 --> 0:13:24.520 that they've started to work for themselves. I think that 0:13:24.559 --> 0:13:28.959 they're starting to consult, advise, become angel investors. And I'm 0:13:29.000 --> 0:13:32.480 seeing that especially being the case with executives that have 0:13:32.600 --> 0:13:37.640 deep expertise in a functional area. So how do we 0:13:37.720 --> 0:13:41.560 do that? Well, you gotta work in radio a little longer. 0:13:42.880 --> 0:13:45.480 Uh No, I honestly believe what it comes down to 0:13:45.679 --> 0:13:47.400 is is that if you look at the labor market 0:13:47.480 --> 0:13:50.080 right now, and specifically the case with the executives, which 0:13:50.080 --> 0:13:52.480 is where I've spent a bunch of my time, these 0:13:52.480 --> 0:13:55.760 people are the most in demand. So if you think 0:13:55.760 --> 0:13:58.160 about executive recruiting, which is the function in which we 0:13:58.200 --> 0:14:01.959 connect executives to companies today, these searches usually cost a 0:14:02.040 --> 0:14:05.520 hundred k or more, they usually take six to nine months. 0:14:06.040 --> 0:14:08.320 And right now there's a phenomenon I've never seen before, 0:14:08.320 --> 0:14:11.240 which is these executive recruiters are so busy they are 0:14:11.280 --> 0:14:14.439 turning away business. And so if you think about that 0:14:14.520 --> 0:14:16.079 on one side, and you think about the other side 0:14:16.120 --> 0:14:19.280 is these people have been in their careers for ten, fifteen, 0:14:19.360 --> 0:14:23.800 twenty plus years and they're tired. They've been working their 0:14:23.840 --> 0:14:27.400 tails off for typically one company at a time, and 0:14:27.600 --> 0:14:29.320 you know they look in tech Crunch every morning and 0:14:29.320 --> 0:14:32.560 they're starting to see all their CEOs become angel investors 0:14:33.000 --> 0:14:35.880 to do other things outside of just the CEO job, 0:14:35.880 --> 0:14:38.560 and they're wondering, Hey, I've had my head down this 0:14:38.840 --> 0:14:42.240 entire time. Is there something else that I can do 0:14:42.320 --> 0:14:44.960 that's interesting for me, that gives me more time back 0:14:45.000 --> 0:14:47.040 in my life, but still allows me to make an 0:14:47.040 --> 0:14:51.920 income and to challenge myself intellectually. So, Nolan, as you 0:14:51.960 --> 0:14:54.880 talk to your clients as they think about trying to hire, 0:14:54.920 --> 0:14:57.840 and we know it's such a difficult hiring environment right now. 0:14:57.880 --> 0:15:00.000 We see for you know, help one as signs every 0:15:00.000 --> 0:15:01.880 ay where and it's not just at the local bakery 0:15:01.880 --> 0:15:08.080 and local store, it's corporate America as well. Is hybrid workforce? 0:15:08.240 --> 0:15:10.440 Is that just table stakes? Do I just have to 0:15:10.520 --> 0:15:15.680 offer that as an employer? I actually don't think so. Now. 0:15:15.880 --> 0:15:18.280 What I will say is everything is a trade off 0:15:18.400 --> 0:15:21.600 right now, and so if you don't want to be 0:15:21.680 --> 0:15:26.080 remote first or hybrid, then you will take longer to 0:15:26.240 --> 0:15:32.680 hire somebody period, full stop, especially people that have experienced Yeah, 0:15:32.920 --> 0:15:35.880 that makes sense, right, especially depending on where you are 0:15:36.040 --> 0:15:39.400 what kind of I mean, your clients are higher end 0:15:40.160 --> 0:15:43.560 uh looking to fill higher end jobs, right, So I mean, 0:15:43.600 --> 0:15:46.080 if you're an executive and you're doing well, I don't 0:15:46.080 --> 0:15:48.320 think your boss probably cares most of the time what 0:15:48.480 --> 0:15:52.280 office you're in. That's that's what we're seeing now. And 0:15:52.360 --> 0:15:56.880 the COVID forced us all to become zoom native, uh 0:15:57.120 --> 0:16:00.600 to to just like everyone's got a webcam severn set 0:16:00.680 --> 0:16:02.760 up now, and so I think all of us are 0:16:02.760 --> 0:16:05.840 now used to this. What's happening though, is that just 0:16:05.880 --> 0:16:08.680 because these searches take so long, And it's the case 0:16:08.680 --> 0:16:11.160 for executives certainly, but frankly, all the way through the 0:16:11.200 --> 0:16:14.600 stack and the company, I think companies are are saying, actually, 0:16:14.640 --> 0:16:16.960 this trade off that we wanted to have everybody in 0:16:17.000 --> 0:16:20.000 the office just isn't worth it anymore, and now we 0:16:20.080 --> 0:16:23.280 need to optimize for speed. And if you're optimizing for speed, 0:16:23.320 --> 0:16:25.600 what we're seeing companies do is obviously they're going to 0:16:25.600 --> 0:16:29.280 remote first. Number one, we're seeing them pay more. Um 0:16:29.320 --> 0:16:33.080 So increasing compensation as number two, and then number three 0:16:33.120 --> 0:16:35.640 is that they're they're starting to explore these new options. 0:16:36.040 --> 0:16:38.560 So instead of hey, I thought I needed somebody for 0:16:38.760 --> 0:16:41.960 you know, I wanted somebody for a full time role 0:16:42.040 --> 0:16:45.200 working forty plus hours a week, I will now take 0:16:45.240 --> 0:16:48.240 somebody that's working twenty to thirty hours a week because 0:16:48.240 --> 0:16:50.160 I can get them in the building faster. By the way, 0:16:50.160 --> 0:16:53.880 how many people are you putting into you know, um, 0:16:54.120 --> 0:16:57.880 highly skilled, high level jobs normally where they need to 0:16:57.920 --> 0:17:02.560 be in New York City or in Chicago or in 0:17:02.840 --> 0:17:05.080 l A And they say, no, I'm gonna do with 0:17:05.119 --> 0:17:09.520 the job from like the mountains in Montana. That is, 0:17:09.640 --> 0:17:13.639 I would say of the executives in our market place 0:17:14.119 --> 0:17:17.920 are now like that. It is unbelievable. And and what's 0:17:17.960 --> 0:17:22.200 fascinating is is that you know, companies, they're they're starting 0:17:22.240 --> 0:17:24.480 to catch up, but still many of them are quite 0:17:24.480 --> 0:17:27.639 slow for this. And so we primarily work with with 0:17:27.760 --> 0:17:31.399 pre I p O startups in the technology sector, and 0:17:31.480 --> 0:17:33.400 I would say the large majority of those companies are 0:17:33.440 --> 0:17:37.600 now being founded as remote first companies. Those that aren't 0:17:37.720 --> 0:17:41.640 are living on this line between man, I really want 0:17:41.680 --> 0:17:44.000 to be intentional about my culture I want people in 0:17:44.080 --> 0:17:46.399 the office. We have this office, I want people to 0:17:46.520 --> 0:17:52.360 use it, but it's taking forever to hire. And so okay, 0:17:52.440 --> 0:17:56.199 maybe I'll now explore somebody fractionally that doesn't work in 0:17:56.240 --> 0:17:58.840 the office because they can come solve my problems today. 0:17:59.040 --> 0:18:01.000 Look at this is where the the world is moving 0:18:01.040 --> 0:18:03.639 in this direction, and I think the people that jump 0:18:03.680 --> 0:18:06.240 on this train now will deal with a lot less 0:18:06.240 --> 0:18:09.600 pain than those that continue to be headstrong about getting 0:18:09.600 --> 0:18:11.239 people in the I'll get on the train. I need 0:18:11.280 --> 0:18:12.720 to get on the you're gonna miss the train. We 0:18:12.760 --> 0:18:15.320 need to get Alan Anthony from Jersey on the train. 0:18:15.359 --> 0:18:17.560 That's what we need, all right. Nolan Church, thanks so 0:18:17.640 --> 0:18:20.400 much for joining us. Fascinating discussion here this half hour 0:18:20.440 --> 0:18:23.920 about the changing labor environment. Boy, you gotta get people 0:18:23.960 --> 0:18:26.320 back in the office, or do you? All right? Nolan Church, 0:18:26.359 --> 0:18:34.280 CEO and co founder of Continuum, fascinating discussion. All right, 0:18:34.359 --> 0:18:39.000 let's talk manufacturing here and Fan Dazzi, Chief executive Officer. 0:18:39.080 --> 0:18:43.120 Richie Brothers. Richie Brothers is a publicly traded company that's 0:18:43.160 --> 0:18:45.000 six and a half billion market cap. Stocks been kind 0:18:45.000 --> 0:18:48.119 of flat over last year. The company sells used and 0:18:48.359 --> 0:18:54.800 unused industrial equipment, including equipment using the construction, transportation, mining, forestry, petroleum, 0:18:54.840 --> 0:18:57.520 and agricultural industries. I didn't even know there was such 0:18:57.720 --> 0:19:00.800 a thing, but it makes perfect sense. And we love 0:19:00.880 --> 0:19:02.680 chatting with the ancause it's a good sense of what's 0:19:02.720 --> 0:19:06.159 going on in industrial America, supply chain, all that stuff. So, 0:19:06.240 --> 0:19:08.640 and thanks so much for joining us. How about let's 0:19:08.640 --> 0:19:11.639 just talk about how's your market is. How's the market 0:19:11.680 --> 0:19:16.640 for using and I guess new industrial equipment? Yeah, so 0:19:16.720 --> 0:19:19.639 thanks for having me on the show. The market is 0:19:19.720 --> 0:19:23.679 white hot because the demand is so high. The issue 0:19:23.760 --> 0:19:27.280 is the supply chain and that we're a global company, uh, 0:19:27.320 --> 0:19:29.960 and we're feeling it all over the globe. So Richie 0:19:30.040 --> 0:19:34.960 Brothers Transact primarily used equipment, and as you said, in 0:19:34.960 --> 0:19:40.760 the industrial transportation space. Unfortunately, Uh, if you don't have 0:19:40.800 --> 0:19:43.640 a new piece of equipment to replace your use piece 0:19:43.680 --> 0:19:46.400 of equipment, you cannot give up the uth piece of equipment. 0:19:46.480 --> 0:19:49.800 So we see the demand the sky high, resulting in 0:19:50.080 --> 0:19:54.640 just incredible prices for youth equipment in the marketplace because 0:19:54.680 --> 0:19:57.119 they cannot get you to replace at the same clip 0:19:57.160 --> 0:20:01.200 they will so I want to So I'm guessing is 0:20:01.240 --> 0:20:05.160 an auction platform that you have it. Yeah, so we uh. 0:20:05.240 --> 0:20:08.040 We primarily go to market through an auction platform. We 0:20:08.119 --> 0:20:10.920 also have a listing service that we've had in Europe 0:20:10.920 --> 0:20:15.320 for some time and just launched Ritchie List a couple 0:20:15.320 --> 0:20:18.679 of months ago in North America. So we allow people 0:20:18.720 --> 0:20:21.440 to list their own equipment, sell it themselves, we can 0:20:21.480 --> 0:20:23.800 finance that, we can inspect it for them, we can 0:20:23.800 --> 0:20:27.240 help close the transaction, or if you just need liquidity, 0:20:27.320 --> 0:20:30.399 we are happy to sell it on your behalf. So um, 0:20:30.440 --> 0:20:33.879 I mean it sounds awesome business like I want to 0:20:33.920 --> 0:20:36.520 go on the website and check it out. But I 0:20:36.359 --> 0:20:40.520 imagine that your turnover hasn't been so much higher over 0:20:40.560 --> 0:20:44.040 the past couple of years, but the prices have just soored. 0:20:44.160 --> 0:20:48.240 Is that the case, or do you even have more turnover? Yeah, no, 0:20:48.359 --> 0:20:51.200 that's exactly right. Our units are down. So two things 0:20:51.240 --> 0:20:55.080 are happening in our marketplace. The prices are sky high 0:20:55.160 --> 0:20:57.760 because the man the sky high. The units are down because, 0:20:57.800 --> 0:20:59.919 as you say, we you know, low turnover, we ken 0:21:00.200 --> 0:21:02.680 we can't get the new equipment. And also the mix 0:21:02.760 --> 0:21:05.560 of the equipment, so the things that are coming are 0:21:05.680 --> 0:21:09.919 older smaller. Again, you know, when people really have to 0:21:09.960 --> 0:21:12.639 turn the equipment they do. Otherwise they just hold onto 0:21:12.720 --> 0:21:16.600 it much longer. Now, the beauty of our businesses as 0:21:16.600 --> 0:21:19.720 that equipment continues to sit there, it continues to age. 0:21:19.760 --> 0:21:23.080 So sooner or later, when the supply chain catches up, uh, 0:21:23.160 --> 0:21:25.680 that equipment will need to be turned Uh. And that's 0:21:25.680 --> 0:21:28.520 where we come in. So we're we're but the but 0:21:28.640 --> 0:21:30.560 the but the opportunity for you here, I mean, I'm 0:21:30.600 --> 0:21:33.159 looking at your stock here going from basically forty to 0:21:33.320 --> 0:21:37.560 sixty pre pandemic to now, which is you know, gain 0:21:37.680 --> 0:21:40.080 is better than a stick in the eye. But your opportunity, 0:21:40.119 --> 0:21:45.720