WEBVTT - Stocks Tumble as Year’s Winning AI Bets Take a Hit 0:00:02.520 --> 0:00:07.000 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.680 --> 0:00:13.000 This is Bloomberg business Week Daily reporting from the magazine 0:00:13.000 --> 0:00:17.639 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.640 --> 0:00:22.560 and trends shaping today's complex economy. Plus global business, finance 0:00:22.600 --> 0:00:25.880 and tech news as it happens. The Bloomberg Business Week 0:00:26.000 --> 0:00:31.480 Daily Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:32.320 --> 0:00:34.400 Let's broaden out a little bit and let's get into 0:00:34.440 --> 0:00:36.920 maybe investors have they been reacting since we got that 0:00:36.960 --> 0:00:39.839 FED decision and what we are seeing with investment flows 0:00:39.880 --> 0:00:42.280 and what's going on in terms of activity. 0:00:42.440 --> 0:00:44.800 For that, we turned to Stephanie gild, chief investment officer 0:00:44.840 --> 0:00:46.479 over at Robinhood Markets. You joined us here in the 0:00:46.479 --> 0:00:49.720 Bloomberg Business Week Studio. Stephanie, I wanted to start with 0:00:49.760 --> 0:00:52.120 what's happening on the Robinhood platform because you certainly have 0:00:52.479 --> 0:00:55.200 a certain segment of the investing population. 0:00:55.280 --> 0:00:56.800 What are you seeing on Robinhood right now? 0:00:57.240 --> 0:01:01.360 We're seeing still not buying, but it's it's been more muted, 0:01:01.400 --> 0:01:04.840 i'd say, than it was before, and it's been in 0:01:04.880 --> 0:01:07.000 some of the things that have been going down or 0:01:07.040 --> 0:01:11.480 had like Netflix, for example, You've also seen where there's 0:01:11.520 --> 0:01:15.319 been sales, it's been more in the AI oriented names. 0:01:15.920 --> 0:01:18.840 So I've kind of shared this before, but our customers 0:01:18.840 --> 0:01:21.560 tend to hold corepositions and trade around them, meaning they 0:01:21.560 --> 0:01:23.479 buy when they go down and sell when they go up. 0:01:24.120 --> 0:01:26.479 But we're seeing a little bit differently where there seem 0:01:26.560 --> 0:01:29.440 to be like being more subjective about what they're investing in. 0:01:29.520 --> 0:01:31.240 And that's why I say, like it was kind of 0:01:31.319 --> 0:01:34.480 interesting to see in video being sold and you know, 0:01:34.520 --> 0:01:35.880 things that are kind of under. 0:01:35.640 --> 0:01:38.360 Pressure, so selling as rather than selling as they have 0:01:38.440 --> 0:01:41.639 gone up a lot and taking some profits, they're selling 0:01:41.640 --> 0:01:42.559 as they're going down. 0:01:42.800 --> 0:01:45.720 Yeah, but they probably have embedded profits because they will 0:01:45.800 --> 0:01:47.360 them all year. So I think that's like kind of 0:01:47.360 --> 0:01:49.680 giving up a little bit on the AI trade for now. 0:01:49.760 --> 0:01:50.720 Well, like I totally get it. 0:01:50.800 --> 0:01:52.640 Like you know, Tim and I were talking about Oracle, 0:01:52.760 --> 0:01:55.760 like it is still up almost fourteen percent year to date, 0:01:55.760 --> 0:01:59.000 but we've seen a more than forty percent decline from. 0:01:58.760 --> 0:02:00.320 Some of them when it hit a record back in 0:02:01.120 --> 0:02:02.080 in September. 0:02:02.080 --> 0:02:05.840 Excuse me, so, I mean, are there how much can 0:02:05.880 --> 0:02:07.160 you dig deeper into. 0:02:07.000 --> 0:02:08.519 The data in terms of what you're seeing? 0:02:08.560 --> 0:02:11.160 Is it mag seven names that people are getting out 0:02:11.200 --> 0:02:12.320 of Is it all tech? 0:02:12.440 --> 0:02:14.959 Is it just AI related? Like what are you just say? 0:02:15.040 --> 0:02:18.920 I related that I've seen, and then some of the 0:02:19.000 --> 0:02:21.320 like core we you know those kind of names are like. 0:02:21.639 --> 0:02:22.680 Cloud, Yeah, exactly. 0:02:23.919 --> 0:02:27.960 You've also seen some buying in just broad based ETFs 0:02:28.040 --> 0:02:31.440 and some t bill oriented ones that like kind of 0:02:31.480 --> 0:02:35.679 make me feel like diversification, you know, kind of parking 0:02:35.760 --> 0:02:37.760 things rather than trying to pick. 0:02:38.600 --> 0:02:41.600 So less playing the market and more like long term 0:02:41.639 --> 0:02:43.799 diversified index funds I think for. 0:02:43.840 --> 0:02:46.800 Now, Like for now, usually we see that activity when 0:02:46.800 --> 0:02:49.040 there's a big dip, like they go into ETFs first 0:02:49.040 --> 0:02:50.800 and then they play the differences and names. 0:02:50.880 --> 0:02:51.920 How are they playing this? Uh? 0:02:52.080 --> 0:02:53.840 I don't want to call it a crypto winter yet, 0:02:54.120 --> 0:02:57.400 but we're down another three percent on bitcoin, hovering around 0:02:57.480 --> 0:02:59.120 ninety thousand dollars per bitcoin right now. 0:02:59.160 --> 0:02:59.880 How's that played out? 0:02:59.880 --> 0:03:01.919 Of the last couple of weeks in the stocks, I've 0:03:01.960 --> 0:03:04.720 seen actually some buying and like the micro strategy names, 0:03:04.760 --> 0:03:08.120 but on the crypto side, have actually seen more selling 0:03:08.120 --> 0:03:08.560 than buying. 0:03:08.960 --> 0:03:09.480 Interesting. 0:03:09.600 --> 0:03:13.519 Yeah, So instead of actually holding the patterns that you're seeing, 0:03:13.520 --> 0:03:18.480 instead of actually holding the cryptocurrency, people are instead putting 0:03:18.639 --> 0:03:21.880 money into the proxies or the hoarders. 0:03:22.200 --> 0:03:24.600 Yeah there, I mean, if you can make that relationship. 0:03:24.600 --> 0:03:27.240 I kind of look at two different dashboards and crypto versus, 0:03:27.720 --> 0:03:29.920 but I did think it was interesting to see buying 0:03:29.960 --> 0:03:32.400 into the the equity related. 0:03:32.120 --> 0:03:34.080 Yeah, because certainly strategy has had its own set of 0:03:34.400 --> 0:03:37.040 of challenges. Okay, so let's bo back out a little 0:03:37.040 --> 0:03:39.320 bit big macro picture right now. We haven't had a 0:03:39.400 --> 0:03:41.240 chance to speak to you in a few weeks, and 0:03:41.240 --> 0:03:42.920 given what we heard from Jay Powell, we just heard 0:03:42.920 --> 0:03:46.520 from Mike McKee about different views of the economy coming 0:03:46.560 --> 0:03:48.520 from different people, where do you sit. 0:03:50.680 --> 0:03:53.640 I think the economy's okay, actually, like I think when 0:03:53.640 --> 0:03:57.160 you're this is totally anecdotal, but at my feeling is 0:03:57.160 --> 0:04:00.400 that like New York City is busy, travel is lot, 0:04:00.480 --> 0:04:03.640 like I actually think the consumers generally okay. That being said, 0:04:03.640 --> 0:04:05.520 the lower end consumer is still not doing well, and 0:04:05.560 --> 0:04:07.240 I don't think they've been doing well for a while. 0:04:08.480 --> 0:04:09.520 So I actually and I. 0:04:09.920 --> 0:04:15.400 Do think things got overvalued market wise, So I do, 0:04:15.480 --> 0:04:17.360 and I also think that the FED is caught between 0:04:17.360 --> 0:04:19.120 a rock and a hard place because you do have 0:04:19.160 --> 0:04:24.480 this explosive growth growth in the AI trade growth and 0:04:24.560 --> 0:04:27.719 credit markets, and so they have to kind of worry 0:04:27.720 --> 0:04:33.159 about that being overblown and that creating increased inflation. Obviously 0:04:33.200 --> 0:04:34.680 we don't know what's going to happen with terrorists, but 0:04:34.680 --> 0:04:36.640 that's creating an issue for them too. Then you do 0:04:36.720 --> 0:04:39.599 have the lower end consumer that is still struggling. So 0:04:40.040 --> 0:04:42.159 it makes me think of like Europe post two thousand 0:04:42.160 --> 0:04:43.799 and eight, when they had to worry about like Spain 0:04:43.920 --> 0:04:47.680 versus Germany. And so that's why I think there's so 0:04:47.800 --> 0:04:51.400 much of a debate within the FED. And you know, 0:04:51.440 --> 0:04:53.320 Powell did say, like, don't even look at the data 0:04:53.360 --> 0:04:55.120 that's going to come out next week. 0:04:55.240 --> 0:04:55.960 Do you agree with him? 0:04:56.080 --> 0:04:56.800 Who doesn't yet? 0:04:57.160 --> 0:05:00.520 I yes, I'm like, and I don't. I worry about 0:05:00.520 --> 0:05:02.920 the quality of it too. Like in general, I. 0:05:02.920 --> 0:05:04.640 Want to ask you about I'm looking you know, we're 0:05:05.040 --> 0:05:06.560 almost at the end of the year, so we can 0:05:06.640 --> 0:05:09.600 look at the S and P five hundred, the major 0:05:09.640 --> 0:05:13.800 industry groups and see what really did well or didn't do. 0:05:14.080 --> 0:05:17.799 I mean, communications services names thirty one percent, higher information 0:05:17.920 --> 0:05:20.919 tech twenty three percent. So even though I mean the 0:05:20.960 --> 0:05:22.760 mag seven, even if we start to see you know, 0:05:22.839 --> 0:05:25.120 pullbacks on some of these names or the AI trade 0:05:25.400 --> 0:05:29.760 still outperforming. Industrials up almost twenty percent, financials up thirteen percent. 0:05:29.800 --> 0:05:33.880 I'm looking at the S and P Composite Pharmaceuticals Index. 0:05:33.920 --> 0:05:36.799 It's up of almost twenty one percent. Now, yeah, yeah, 0:05:36.839 --> 0:05:40.400 finally exactly. So I'm just curious, what else can you 0:05:40.400 --> 0:05:42.240 you dig deeper in a year where we've talked so 0:05:42.320 --> 0:05:44.680 much about AI, We've talked about rare earths, we have 0:05:44.800 --> 0:05:47.880 seen some you know m and a activity going on. 0:05:48.200 --> 0:05:50.120 What is it that you have also. 0:05:49.880 --> 0:05:51.680 Seen that are interesting and you can get an idea 0:05:51.680 --> 0:05:54.679 of what investors are interested in what they are not interesting? 0:05:54.640 --> 0:05:56.680 Have been kind of starting I've been bottom fishing, like 0:05:56.720 --> 0:05:58.840 we've been, yeah, sort of store. I sorted like the 0:05:58.920 --> 0:06:02.240 Russell one thousand into you know, top and bottom players, 0:06:02.279 --> 0:06:04.600 and it just felt like there was a rotation that 0:06:04.600 --> 0:06:06.840 started on October twenty ninth, which was when we had 0:06:06.839 --> 0:06:09.800 that like six percent pullback, and a lot of those names, 0:06:09.839 --> 0:06:11.840 like of the top one hundred, the ones that are 0:06:11.920 --> 0:06:14.920 up the most one hundred most this year, forty one 0:06:14.960 --> 0:06:18.000 of them are in a negative return since October twenty ninth. 0:06:18.080 --> 0:06:20.400 So I've been We've been kind of looking around, being 0:06:20.440 --> 0:06:23.360 like where is there still growth? And I actually think 0:06:23.400 --> 0:06:25.160 like the other thing we've been doing this year is 0:06:25.520 --> 0:06:28.839 investing with in alignment to fiscal policy because we do 0:06:28.920 --> 0:06:31.480 think like what the Trump administration is doing is important 0:06:31.520 --> 0:06:34.359 to understand, and I think the consumer is going to 0:06:34.360 --> 0:06:38.200 be more important for them this year or coming into 0:06:38.240 --> 0:06:40.080 the next year, I should say. And so we've been 0:06:40.120 --> 0:06:43.440 looking more in like the retail space of players that 0:06:44.080 --> 0:06:46.080 are interesting and so. 0:06:45.640 --> 0:06:49.000 So retailers, tailor and brand names. 0:06:48.760 --> 0:06:54.120 In retail, like on holding Lululemon, like they're down, you know, 0:06:54.560 --> 0:06:57.400 they're down double digits this year or maybe not, maybe 0:06:57.440 --> 0:07:00.680 not on after the yes yearly so yes, there is 0:07:00.720 --> 0:07:03.120 down fifty percent, it's up ten percent or so today, 0:07:04.160 --> 0:07:07.039 And so we just think like there is value to 0:07:07.080 --> 0:07:09.560 be found there while we wait to see what happens 0:07:09.600 --> 0:07:10.440 in the tech world. 0:07:11.080 --> 0:07:15.240 But on a Lulu for example, there seems doesn't a 0:07:15.240 --> 0:07:17.680 lot of that depend on who the next CEO of 0:07:17.680 --> 0:07:19.680 the company is, and they don't even know who that's 0:07:19.680 --> 0:07:20.000 going to be. 0:07:20.200 --> 0:07:23.600 There is execution risks there now for thee with obviously 0:07:23.600 --> 0:07:26.520 the change in the CEO, but I think it also 0:07:27.320 --> 0:07:30.160 it lost some shine on its brand, and I think 0:07:30.200 --> 0:07:32.800 they have done a lot to try to turn that around, 0:07:32.800 --> 0:07:34.800 and you've seen that in gap this year, which is 0:07:34.840 --> 0:07:38.320 also like, I think they're further into that journey, but 0:07:38.360 --> 0:07:41.280 I think it actually creates an opportunity. 0:07:41.720 --> 0:07:43.600 Yeah, perhaps been doing really well of late. 0:07:43.760 --> 0:07:45.880 Yeah, it's now up about eleven percent year to date. 0:07:46.080 --> 0:07:48.280 But your point is right that if the consumer feels 0:07:48.360 --> 0:07:50.960 better and is out there spending, if we get more 0:07:51.040 --> 0:07:54.040 juice in terms of the way of stimulus, you know, 0:07:54.040 --> 0:07:56.200 whether you believe it's the right strategy or not, if 0:07:56.240 --> 0:07:59.000 there's more money in the pocket of consumers. 0:07:58.640 --> 0:07:59.440 Trying not to invest. 0:07:59.480 --> 0:08:01.800 In my heart, I know, I know, I know, I 0:08:01.880 --> 0:08:05.400 know it's going to go somewhere, and so there are 0:08:05.480 --> 0:08:08.840 names that will certainly benefit. Great staff love digging deep 0:08:08.880 --> 0:08:11.680 into your platform. Stephanie Gilch, chief investment office at robin 0:08:11.680 --> 0:08:15.320 Hood Markets, Joining us right here on Bloomberg Business Week Daily. 0:08:17.000 --> 0:08:17.760 Stay with us. 0:08:17.840 --> 0:08:20.760 More from Bloomberg Business Week Daily coming up after this. 0:08:24.480 --> 0:08:28.480 You're listening to the Bloomberg Business Weekdaily Podcast. Catch us 0:08:28.560 --> 0:08:32.000 live weekday afternoons from two to five pm Eastern Listen 0:08:32.040 --> 0:08:34.800 on Apple CarPlay and the Android Auto with the Bloomberg 0:08:34.840 --> 0:08:37.560 Business app, or watch us live on YouTube. 0:08:39.000 --> 0:08:41.240 All right, let's get to a stock we've been talking about. 0:08:41.280 --> 0:08:44.480 We're talking about Lululemon. Stock is the number one gainer 0:08:44.520 --> 0:08:46.559 in both the S and P five hundred Nasdaq one hundred, 0:08:46.679 --> 0:08:50.079 up just shy of twelve percent. Even so, the stock 0:08:50.120 --> 0:08:52.760 is still down forty five percent year to date. We 0:08:52.800 --> 0:08:54.720 did see the stock rally after the company boosted its 0:08:54.760 --> 0:08:57.560 full year outlook and announced him that it's CEO would 0:08:57.600 --> 0:08:58.120 step down. 0:08:58.240 --> 0:09:00.599 The company searching for a replacement for Calvin McDonald. Do 0:09:00.640 --> 0:09:03.120 will depart the top post at the end of January. 0:09:03.200 --> 0:09:07.160 Putamgyle is Bloomberg Intelligence Senior analyst, free Commerce anath Leisure. 0:09:07.200 --> 0:09:10.280 She joins us from New Jersey. So, first of all, 0:09:10.559 --> 0:09:12.760 were you as surprised by the market as the market 0:09:12.880 --> 0:09:13.640 was by this move? 0:09:15.040 --> 0:09:17.920 You know, I kind of expected a move similar to 0:09:17.960 --> 0:09:22.640 this because Little Lemon has just not been performing well, right, 0:09:22.720 --> 0:09:26.040 So when you have instances in retail where there's just 0:09:26.520 --> 0:09:30.280 no point of understanding how they're going to turn this 0:09:30.320 --> 0:09:32.360 business around, when it takes a longer time, there is 0:09:32.440 --> 0:09:36.040 usually some sort of management change. So this was in 0:09:36.080 --> 0:09:39.320 my mind a little overdue. And it'll be interesting to 0:09:39.360 --> 0:09:42.120 see on who fills these shoes, because I think that's 0:09:42.200 --> 0:09:44.680 key to the turnaround in the vision that they put forward. 0:09:44.840 --> 0:09:46.280 So on that, who do you think, like, what are 0:09:46.280 --> 0:09:48.880 some names that are being banded about the analyst community 0:09:48.960 --> 0:09:49.320 right now? 0:09:50.240 --> 0:09:52.040 You know, names I don't know about, but we do 0:09:52.200 --> 0:09:54.520 know that we want to product lead. I would like 0:09:54.559 --> 0:09:58.000 to see a product led leader because at the end 0:09:58.040 --> 0:10:01.000 of the day, retail is about product and Lula Lemon 0:10:01.040 --> 0:10:04.600 needs to bring its product back in play ahead of 0:10:04.640 --> 0:10:08.240 competition and really where consumers feel like they're getting something 0:10:08.280 --> 0:10:09.720 that they can't get anywhere else. 0:10:10.640 --> 0:10:11.480 You know, it's interesting. 0:10:11.480 --> 0:10:13.320 First of all, you go to the dees page of 0:10:13.400 --> 0:10:15.400 Lululemon and under management. 0:10:15.000 --> 0:10:17.840 There's no no names there right now, which I don't know. 0:10:18.040 --> 0:10:20.480 Is there something wrong with my screen or I don't know? 0:10:20.600 --> 0:10:23.080 You think, point, how often is it that we see 0:10:23.120 --> 0:10:25.560 a CEO exited. 0:10:25.320 --> 0:10:28.200 Ye out a plan for a new one? Yeah, exactly, 0:10:28.400 --> 0:10:29.280 a big deal yesterday. 0:10:29.679 --> 0:10:31.240 So that's a good point put him. 0:10:31.280 --> 0:10:35.120 You say, it's long overdue, and so like, why isn't 0:10:35.120 --> 0:10:39.280 it that they internally or the board didn't say this 0:10:39.320 --> 0:10:42.240 ain't working because he's been there for a few years now, 0:10:42.600 --> 0:10:45.440 So why why did it take them so long? Or 0:10:45.480 --> 0:10:47.640 did they not give him enough time to figure it out. 0:10:47.679 --> 0:10:50.360 Calvin MacDonald we're talking about. 0:10:49.840 --> 0:10:53.160 Well, he's been with Little Lemon for seven years, I 0:10:53.160 --> 0:10:55.880 think since twenty eighteen, right, so he's had a bairent 0:10:55.920 --> 0:10:58.720 amount of time there when he came on board. The 0:10:58.880 --> 0:11:01.559 excitement once you know all about the personal care remember 0:11:01.640 --> 0:11:04.600 us talking about it. Where will they enter this business 0:11:04.640 --> 0:11:07.040 that has seventy eighty percent margins and it would be 0:11:07.080 --> 0:11:11.079 so great? And I'd say during the pandemic, things were 0:11:11.120 --> 0:11:14.520 working great, right for not just them, for anyone who 0:11:14.600 --> 0:11:17.360 had active war. That is how people dressed. That was 0:11:17.440 --> 0:11:19.400 the movement. It was to be healthy, it was to 0:11:19.480 --> 0:11:22.160 be out, It was to work out and really lounge 0:11:22.160 --> 0:11:25.440 at home while you're working. So what happened post pandemic? 0:11:25.440 --> 0:11:28.440 And that's really where we kind of think about what 0:11:28.559 --> 0:11:32.200 did the leadership do to stay ahead of trends? And 0:11:32.240 --> 0:11:35.200 I think as we exited the pandemic, we didn't see 0:11:35.200 --> 0:11:38.400 as much innovation as we would have liked, because you 0:11:38.480 --> 0:11:43.000 saw competitors like Alo, like Vori and others really come 0:11:43.000 --> 0:11:47.080 in with competitive product, sometimes at similar price points and 0:11:47.200 --> 0:11:50.360 took mind share and wallet share of the shopper. So 0:11:50.640 --> 0:11:54.400 that just brought us to question, do we need vision 0:11:55.040 --> 0:11:58.640 from a leader that has the product background to really 0:11:58.760 --> 0:12:01.640 drive a product ledterc And keep in mind, over the 0:12:01.679 --> 0:12:07.160 last few years, Lululeman has had several leaders leave the company, 0:12:07.240 --> 0:12:08.520 so there has been turnover. 0:12:09.440 --> 0:12:11.520 You know, it's interesting you go back to Yeah, I 0:12:11.520 --> 0:12:12.600 forgot about that when. 0:12:12.440 --> 0:12:13.920 He came in. 0:12:13.960 --> 0:12:16.120 His background, I mean, he had been president CEO of 0:12:16.160 --> 0:12:20.520 Sephora USA for five years, right, So the expectation. 0:12:20.120 --> 0:12:21.719 Was Sears I think before that run and. 0:12:21.640 --> 0:12:22.320 Sears before that. 0:12:22.400 --> 0:12:25.160 But the Sephora thing I find interesting because people kind 0:12:25.160 --> 0:12:27.560 of love that model. I mean, was the hope right 0:12:27.600 --> 0:12:30.040 that they was he was going to bring actual products right, 0:12:30.240 --> 0:12:35.360 like whether and which do have incredibly high margins, whether 0:12:35.400 --> 0:12:37.040 it's I don't know, is it skincare? Like what was 0:12:37.080 --> 0:12:39.000 it that he they thought he was going to bring in? 0:12:40.120 --> 0:12:42.680 So do you remember like the dry powder? You know, 0:12:42.720 --> 0:12:44.480 we all go work out and your hair is kind 0:12:44.480 --> 0:12:46.319 of sweaty, and you're like, I'd love to gift shape 0:12:46.320 --> 0:12:49.040 them powder and go with. So they added dry powder. 0:12:49.200 --> 0:12:53.000 They try to deoder. And the thing is with Sephora, 0:12:53.080 --> 0:12:55.959 you're not looking for performance in all your product. When 0:12:55.960 --> 0:12:58.319 you moved to an active airline, you need to solve 0:12:58.360 --> 0:13:02.840 for performance, and that's not easily done. In fact, I 0:13:02.880 --> 0:13:04.959 don't even know if there's a product today out there 0:13:05.480 --> 0:13:08.920 that actually works to solve real performance issues. I think 0:13:08.960 --> 0:13:10.520 it's still a hole in the market. 0:13:10.720 --> 0:13:15.760 It's called anyone take a shower? I mean to be honest, like, yeah, 0:13:15.800 --> 0:13:17.680 there's no I don't go work out and then like 0:13:17.760 --> 0:13:18.400 go out to dinner. 0:13:18.480 --> 0:13:21.199 Yeah, and like, you know something for shoes. I don't know. 0:13:21.440 --> 0:13:21.840 I don't know. 0:13:21.920 --> 0:13:23.599 Well, I don't know if you're doing yoga you're in 0:13:23.640 --> 0:13:24.080 bare feet. 0:13:24.120 --> 0:13:25.080 Yeah, that's a good point, you know. 0:13:25.480 --> 0:13:27.040 Can I just say, like I was thinking about the 0:13:27.040 --> 0:13:28.720 pair of yoga pants I wear all the time. 0:13:28.880 --> 0:13:29.920 It's Outdoor Voices. 0:13:30.080 --> 0:13:32.160 I bought them. Has that company has had its own 0:13:32.160 --> 0:13:34.200 share of iterations. 0:13:33.880 --> 0:13:36.200 Years ago though, And it was because my daughter wanted 0:13:36.200 --> 0:13:37.160 something and I'm like, these. 0:13:36.960 --> 0:13:37.600 Are really cool. 0:13:37.600 --> 0:13:40.280 But it was innovative because they had these side pockets 0:13:40.559 --> 0:13:42.360 and I use them for traveling. I can throw my 0:13:42.400 --> 0:13:44.520 cell phone in and so and so. So it's not 0:13:44.559 --> 0:13:47.080 been Lulu that I have picked up something. 0:13:47.120 --> 0:13:48.960 Well put them Come on in on the idea of 0:13:49.000 --> 0:13:51.880 brand value here, because Chip Wilson is a name we 0:13:51.920 --> 0:13:54.920 haven't mentioned in a few minutes he's the founder of Lululemon. 0:13:54.960 --> 0:13:58.640 He's outspoken. Everybody remembers what happened when he was CEO 0:13:58.679 --> 0:14:00.960 of the company. He's out with a state. He's got 0:14:00.960 --> 0:14:05.320 like a pr agency. He says, quote, the erosion of 0:14:05.400 --> 0:14:08.680 premium brand value in the company's core markets demonstrates that 0:14:08.760 --> 0:14:12.480 the board does not understand its target customers anymore or 0:14:12.520 --> 0:14:16.920 what will drive shareholder value at Lululemon over the long term. 0:14:17.280 --> 0:14:21.000 He blasted them in this statement earlier this morning. Is 0:14:21.040 --> 0:14:22.800 that view widely held by analysts. 0:14:24.360 --> 0:14:27.520 I think you can blame anyone right about now because 0:14:27.600 --> 0:14:31.520 lul Lemon hasn't been able to perform as it did historically. 0:14:31.960 --> 0:14:35.160 But that said, you have to remember that the landscape 0:14:35.200 --> 0:14:39.760 has very quickly changed because everyone has access to consumers, 0:14:39.880 --> 0:14:44.280 everyone has access to intelligence and data and technology, and 0:14:44.320 --> 0:14:48.000 you're leveling the playing field. Lulu Lemon's brand still has 0:14:48.160 --> 0:14:51.040 great brand equity. Don't get me wrong. It's still a 0:14:51.240 --> 0:14:53.880 very well known and preferred brand, and its sales are 0:14:54.040 --> 0:14:58.400 very strong internationally, especially China where many can't even get 0:14:58.440 --> 0:15:01.120 in and get it right. So I do give them 0:15:01.160 --> 0:15:04.240 credit for their international growth. I give them credit for men, 0:15:04.440 --> 0:15:07.120 I give them credit for digital. It's just when it 0:15:07.160 --> 0:15:10.480 comes to women, they just haven't had the innovation. I 0:15:10.520 --> 0:15:13.720 really think it's a product missed up. They need more innovation. 0:15:13.800 --> 0:15:17.040 They need a constant flow of new products that excite 0:15:17.080 --> 0:15:19.360 and delight the customer, and they haven't been able to 0:15:19.400 --> 0:15:20.640 do that. Well. I agree with you. 0:15:20.640 --> 0:15:22.240 I've walked it in out of there, and I really 0:15:22.240 --> 0:15:24.800 do like the quality of their their stuff. I think 0:15:24.800 --> 0:15:26.320 there is something to be said for that. But I 0:15:26.320 --> 0:15:28.200 agree with you, Punam. I walk in and I'm like, 0:15:28.280 --> 0:15:30.000 kind of seen it all before, or I've got it 0:15:30.320 --> 0:15:33.600 already at home, and so I need something else. Chip 0:15:33.640 --> 0:15:36.440 Wilson just real quickly thirty seconds. Does he have much sway? 0:15:36.520 --> 0:15:39.480 I was just looking at the HDS function on the Bloomberg. 0:15:39.560 --> 0:15:40.440 Does he still only. 0:15:40.680 --> 0:15:44.080 Calls himself the top independent active shareholder? 0:15:44.600 --> 0:15:45.760 He calls himself that today. 0:15:47.320 --> 0:15:48.640 I don't have the numbers in front of me, but 0:15:48.680 --> 0:15:50.800 he definitely is among the top, and I would say 0:15:50.840 --> 0:15:53.760 he does have, you know, some push, especially when a 0:15:53.800 --> 0:15:55.960 company isn't doing well right, so you have to think 0:15:55.960 --> 0:15:59.280 about the dynamics that play here. Little Lemon isn't performing 0:15:59.280 --> 0:16:03.440 while their results domestically are not anywhere where we would 0:16:03.480 --> 0:16:05.720 like to see them and they're not going to meet 0:16:05.720 --> 0:16:09.320 their twenty twenty six targets based on our analysis. So 0:16:09.520 --> 0:16:12.520 at this point, I think when you have a founder 0:16:12.560 --> 0:16:15.880 who really established this company, right, who really brought into 0:16:15.880 --> 0:16:17.000 it through, he does. 0:16:16.880 --> 0:16:19.320 Have a say all right, Punham, thank you, thank you, 0:16:19.440 --> 0:16:22.240 have a great weekend, Punam Goyle. She's Bloomberg Intelligence Senior 0:16:22.240 --> 0:16:24.840 analyst for e Commerce and eth Leisure. Been following this company, 0:16:24.840 --> 0:16:26.920 as you can tell, knows it inside and out for 0:16:26.960 --> 0:16:28.320 many years. 0:16:29.080 --> 0:16:32.920 This is the Bloomberg Business Week Daily podcast. Listen live 0:16:33.040 --> 0:16:36.240 each weekday starting at two pm Eastern on applecar Play 0:16:36.360 --> 0:16:39.000 and the Android Auto with the Bloomberg Business app. You 0:16:39.040 --> 0:16:42.200 can also listen live on Amazon Alexa from our flagship 0:16:42.280 --> 0:16:46.160 New York station, Just Say Alexa played Bloomberg eleven thirty. 0:16:48.160 --> 0:16:50.680 Well a defense system that could defend the US from 0:16:50.720 --> 0:16:54.680 the nuclear missile arsenals of Russia, China, and North Korea. 0:16:55.280 --> 0:16:57.640 It's the so called Golden Dome and iunce just days 0:16:57.640 --> 0:17:00.840 into President Trump's second administration. The president has said the 0:17:00.840 --> 0:17:03.280 project will cost about one hundred and seventy five billion 0:17:03.320 --> 0:17:06.080 dollars and it'll be completed by the end of his term. 0:17:06.200 --> 0:17:09.760 In twenty twenty nine, but defense experts say those targets 0:17:09.800 --> 0:17:13.000 are unrealistic. Bloomberg analysis on the final price tag could 0:17:13.000 --> 0:17:16.639 reach many multiples of that, And Carol, the tech not 0:17:16.760 --> 0:17:18.760 even confirmed that could actually work. 0:17:19.040 --> 0:17:21.520 You know, I think what I find fascinating reminds me 0:17:21.560 --> 0:17:24.120 of like President Reagan and is Star Wars. 0:17:24.400 --> 0:17:27.600 We talked about in like grade school as not working. 0:17:27.560 --> 0:17:30.360 Right exactly, although you kind of understood where he's going, 0:17:30.359 --> 0:17:33.760 but this certainly feels like and is more of a reality. 0:17:33.840 --> 0:17:36.960 Well, it's a Bloomberg big take and just a fantastic read. 0:17:37.480 --> 0:17:41.120 Joining us now is Santa Paschenker, Bloomberg News space reporter. Also, 0:17:41.160 --> 0:17:44.800 Wayne Sanders joins us. He's Bloomberg News Bloomberg Intelligence Senior 0:17:44.840 --> 0:17:48.280 Defense chanalyst. Santa joins us from Washington, DC. Wayne joins 0:17:48.359 --> 0:17:52.280 us from Maryland. First, Sana, I want to start with you, 0:17:52.400 --> 0:17:55.840 Carol said, the whole concept reminds her of Star Wars 0:17:55.920 --> 0:17:59.760 during the Reagan administration. But explain exactly how the Golden 0:17:59.800 --> 0:18:02.840 Dome would work, the satellites, the missiles, what would happen? 0:18:04.320 --> 0:18:05.120 Yeah, totally. 0:18:05.240 --> 0:18:08.080 So the Golden Dome is intended to be a multi 0:18:08.200 --> 0:18:12.160 layered defense missile defense shield. So the way it would 0:18:12.200 --> 0:18:15.200 work is like, in the case of an attack from 0:18:15.359 --> 0:18:20.320 an adversary like Russia, North Korea, or China, a nuclear 0:18:20.359 --> 0:18:23.800 missile would first encounter a space based layer of defense, 0:18:23.800 --> 0:18:27.760 which would include space space missile interceptors, and that technology 0:18:27.800 --> 0:18:31.959 doesn't yet exist, but those are intended, those which were 0:18:32.000 --> 0:18:36.240 outlined in President Trump's executive Order as a requirement of 0:18:36.280 --> 0:18:40.560 the Golden Dome would attempt to counter the missile at 0:18:40.600 --> 0:18:43.560 the very first stage, which is in space, and then 0:18:43.600 --> 0:18:46.280 if they make it past that space based layer of defense, 0:18:46.359 --> 0:18:49.520 there would be other layers of defense, including the high 0:18:49.600 --> 0:18:53.280 atmosphere and even on the ground like using Patriot and 0:18:53.320 --> 0:18:57.240 bad batteries to intercept different types of missiles that could 0:18:57.280 --> 0:18:58.560 be launched from adversaries. 0:18:58.600 --> 0:19:02.080