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Speaker 2: This is Bloomberg business Week Inside, from the reporters and
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Speaker 2: Podcast with Carol Messer and Tim Stenebek from Bloomberg Radio.
Speaker 3: The Price of Bitcoin.
Speaker 4: We're always watching that President elect Donald Trump's pick up
Speaker 4: a crypto proponent to be the next head of the
Speaker 4: SEC lifted bitcoin to one hundred thousand dollars for the
Speaker 4: first time as traders warmed to the prospect of relaxed regulations.
Speaker 4: We got with us Stacy Marie Ishmel, Managing editor for
Speaker 4: Crypto at Bloomberg News. Stacey Marie joins us here in
Speaker 4: the Bloomberg Interactive Brokers studio. Zeke Fox is a Bloomberg
Speaker 4: News financial investigation reporter. He's also the author of Number
Speaker 4: Go Up Inside at Crypto's Wild Rise and Staggering Fall.
Speaker 4: Zeke joins us from New York as well. Stacey Marie.
Speaker 4: There this moment when it comes to news events that
Speaker 4: are kind of indelible in people's minds. You know, you
Speaker 4: talk to people when they heard about the assassination of
Speaker 4: JFK or like, you know, more recently in our lifetimes, covid.
Speaker 4: You know, where were you when you heard Tom Hanks
Speaker 4: had COVID and the NBA was shutting down the season Austin,
Speaker 4: Texas is.
Speaker 3: Exactly you know? Is bitcoin? You were? Were you there
Speaker 3: for south by Southwest?
Speaker 5: No?
Speaker 3: Is there for work? Okay? You're there for work? Okay?
Speaker 3: Are you?
Speaker 4: Is this one of those moments where like it's that
Speaker 4: significant when it comes to the history of cryptocurrency?
Speaker 3: Where were you when bitcoin hit one hundred k?
Speaker 1: I will say that was very much the vibe of
Speaker 1: folks in and around bitcoin and crypto yesterday, particularly on
Speaker 1: social media, whether it was LinkedIn or x or blue Sky,
Speaker 1: you know, the you know, folks who are CEOs, folks
Speaker 1: who are developers, folks who are just retail traders were like,
Speaker 1: it's here, We've made it. Our time is now.
Speaker 5: Zeke. I wanted to bring you into the conversation because
Speaker 5: something I've been asking a lot of people about is
Speaker 5: sort of the frothiness, because once you get two one
Speaker 5: hundred thousand, a lot of people want to start talking
Speaker 5: about technicals about resistance. But I mean, where do you
Speaker 5: find resistance from there. And what I'm wondering too, is
Speaker 5: when you have people like the Hawk to a Girl
Speaker 5: Haley Welch that are kind of jumping in and trying
Speaker 5: to launch these type of mean coins. Are we actually
Speaker 5: at the phase here where things are looking a little
Speaker 5: too froppy for the crypto space.
Speaker 6: Well, what the bitcoin proponents would say is that all
Speaker 6: the attention that bitcoin is getting around the price hitting
Speaker 6: this milestone, like the coverage US talking about it right now,
Speaker 6: is part of the momentum that's going to drive it
Speaker 6: even higher. And this crypto executive, Dan held I once
Speaker 6: heard him explain it in a pretty interesting way. He
Speaker 6: called it number go up technology, and he said it's
Speaker 6: very powerful piece of technology. It's the price. As the
Speaker 6: price goes higher, more people become aware of it and
Speaker 6: buy it in anticipation of the price continuing to climb. Now,
Speaker 6: I don't think that that is a sustainable state of affairs,
Speaker 6: but that's what it's been driving Bitcoin higher. Now it's
Speaker 6: up fivefold since it's lows after FTX collapsed back in
Speaker 6: November twenty twenty two. It's pretty wild to see how
Speaker 6: far it's come.
Speaker 4: It is wild, Stacey Marie, I want to bring you
Speaker 4: back in here. The reason I asked about where you
Speaker 4: were because my phone blew ups. I think everybody else
Speaker 4: has did with notifications about this. I was talking to
Speaker 4: somebody who works in real estate development, who has an MBA,
Speaker 4: who understands cash flows and is extremely skeptical about why
Speaker 4: bitcoin is worth one hundred thousand dollars. There are still
Speaker 4: many of those skeptics out there.
Speaker 1: There are, absolutely there are. I think there are more
Speaker 1: people who don't know and don't care than there are skeptics,
Speaker 1: and then there are the true believers. That's sort of
Speaker 1: the segmentation. What I would say is, in addition to
Speaker 1: the very common market dynamic that Zeke just described about
Speaker 1: people being attracted to large numbers and especially numbers, it
Speaker 1: seems to be on a positive trajectory. There is the
Speaker 1: reality that there is something of an institutional price floor
Speaker 1: in the market now for bitcoin, and that is the
Speaker 1: participation of the enormous asset manages, the black Rocks of
Speaker 1: the world who are getting more involved in things like ETFs,
Speaker 1: the people who want to put bitcoin into people's four
Speaker 1: oh one case and have that kind of institutionalization of
Speaker 1: how retail investors are getting access to this asset, and
Speaker 1: that is driving some amounts of the enthusiasm. But the
Speaker 1: other is the possibility that the US federal government might
Speaker 1: itself become a large holder of bitcoin.
Speaker 4: Well, well, let's dig into that a little bit. Why
Speaker 4: you're talking about a potential strategic bitcoin reserve or maybe
Speaker 4: other methods of the US buying this during the next administration.
Speaker 4: What's the justification for that, Like, how do you get
Speaker 4: that past tax payers?
Speaker 1: How you get a past task players is a question
Speaker 1: for political scientists. But the justification that's being offered by
Speaker 1: the administration is that bitcoin the US should be the
Speaker 1: world capital of financial innovation, and bitcoin and blockchain technology
Speaker 1: are key elements of that. Right, that's the claim, And
Speaker 1: Zeke was there in Nashville when President elect Trump was
Speaker 1: kind of making these claims to a large gathering of
Speaker 1: people who are absolutely primed to believe it. The problem
Speaker 1: for I think the average taxpayer, to your point, is
Speaker 1: joining the dots between This is a virtual currency, a
Speaker 1: digital currency. It's not something that you can hold. It's
Speaker 1: not like a vaccine or wheat or petroleum that in
Speaker 1: a time of crisis, you have exactly a clear sense
Speaker 1: of how this will be used but for folks who
Speaker 1: believe in bitcoin and folks who believe in blockchain, they're like,
Speaker 1: just getting that assurance from the US government is enough.
Speaker 5: Zeke, I want to bring you back into this conversation
Speaker 5: so you can talk more about when you have a
Speaker 5: new administration coming in here and then sort of the
Speaker 5: lack of regulation when it comes to the crypto space.
Speaker 5: How do you view and your sources view kind of
Speaker 5: the direction of a bitcoin and other cryptocurrencies with the
Speaker 5: Trump administration coming in again.
Speaker 6: Well, it's kind of funny that bitcoiners are so concerned
Speaker 6: with regulation. I mean, in most ways, bitcoin was already
Speaker 6: legal and wasn't fit facing huge threats from whatever administration
Speaker 6: was going to come. I think the bitcoiners are really
Speaker 6: excited to have the president talking about bitcoin and talking
Speaker 6: about the possibility of this strategic reserve, even if it
Speaker 6: is kind of far fetched. Trump Truth today on truth
Speaker 6: Social congratulations, Bitcoiners, You're welcome. And what he's saying is that,
Speaker 6: I mean, he flew to Nashville, he gave a speech
Speaker 6: at the Bitcoin Conference where he laid out how he
Speaker 6: was going to do things to help promote bitcoin. He
Speaker 6: said that you know, the usf Bitcoin's going to the moon.
Speaker 6: The US is going to lead the way. And now
Speaker 6: without even doing anything, just with his election, with what
Speaker 6: he's been saying, he's gotten kind of the bitcoin mania
Speaker 6: going to like new heights. And it should be said
Speaker 6: that bitcoin executives came together to give Trump twenty five
Speaker 6: million dollars in campaign to nations, which helped smooth the
Speaker 6: way for him to flip from calling bitcoin a scam,
Speaker 6: which is what he said during his first administration.
Speaker 5: So, Sat Marie, how do you view sort of the
Speaker 5: flip flopping there, Because when you think of even saying
Speaker 5: Elon Musk with ev makers and things like that, they
Speaker 5: definitely benefited in his company benefited more so under a
Speaker 5: Biden administration. But we were thinking about the crypto side
Speaker 5: of things and maybe the AI side of things. How
Speaker 5: is this sort of shift coming in your kind of view?
Speaker 1: I mean, I think one of the big things you know, Zeke,
Speaker 1: is entirely correct. Bitcoin itself wasn't targeted by the US
Speaker 1: Securities and Exchange Commission in any real way, but pretty
Speaker 1: much every other part of the market was.
Speaker 3: Right.
Speaker 1: If you were somebody who was doing transactions in Ether
Speaker 1: on the ethereum blockchain, if you were somebody who was
Speaker 1: doing crypto lending. If you were somebody who was lending
Speaker 1: to somebody who was doing crypto lending, the SEC probably
Speaker 1: found a way to sue you, or at least to
Speaker 1: tell you to stop to stop doing that thing. And
Speaker 1: the widespread expectation, especially among the folks who were celebrating
Speaker 1: on social media yesterday, is that it'll be a totally
Speaker 1: different ballgame under the new regulatory.
Speaker 4: Okay, so that's exactly where I want to go right now.
Speaker 4: And I brought this up in a live Q and
Speaker 4: A that we did on the Bloomberg terminal and for
Speaker 4: Bloomberg subscribers a little earlier today about bitcoin here at
Speaker 4: one hundred thousand, Zeke, I want to send this on
Speaker 4: over to you first and then have Stacy Marie way in.
Speaker 4: And it's just the whole idea behind regulations. We live
Speaker 4: in a world with regulations and with laws, and those
Speaker 4: laws and regulations a lot of people would argue are
Speaker 4: there for a reason. I'm wondering to what extent you
Speaker 4: think the guardrails will be off an industry like cryptocurrency
Speaker 4: during the Trump administration, and if at all we could
Speaker 4: see negative repercussions for that I mean, we're just two
Speaker 4: years out from the collapse of FTX, and a lot
Speaker 4: of folks who lost quite a lot of money. Some
Speaker 4: of it has been recovered at this point with different projects,
Speaker 4: but there were folks who were hurting for quite quite
Speaker 4: a bit of time in the wake of that.
Speaker 6: Yeah, I mean, I was just watching an old interview
Speaker 6: with Paul Atkins, who's tabbed to be the next SEC commissioner,
Speaker 6: and he was saying that he felt some of the
Speaker 6: huge frauds that occurred during the last crypto boom like FTX,
Speaker 6: where the result of the SEC not creating a set
Speaker 6: of cryptospecific regulations that would bring the industry inside them
Speaker 6: and instead, since it was difficult to comply, people were
Speaker 6: just sort of running wild. I'm not sure how true
Speaker 6: that is. And we mentioned Poctua coin today. Yeah, this
Speaker 6: is a you know, they've actually been a huge number
Speaker 6: of these meme coins where basically somebody with some degree
Speaker 6: of notoriety starts promoting some made up coin. People jump
Speaker 6: in hoping that the price will pomp in that they'll
Speaker 6: get out while the getting is good, and then inevitably
Speaker 6: it's like a zero sum game. Are actually worse Most
Speaker 6: of the people who do it are going to lose money.
Speaker 6: Now where that fits in like a pro crypto regulatory regime,
Speaker 6: I'm not sure, but it doesn't seem like the kind
Speaker 6: of economic activity we should be encouraging.
Speaker 4: Stacey Marie, I want to give you the last word
Speaker 4: here thirty seconds on this thinking about a regulatory environment
Speaker 4: where guardrails could be off.
Speaker 1: I think one of the most important things to that
Speaker 1: point you're making, Zee, and what you said in the
Speaker 1: conversation earlier, is what does this mean for a person
Speaker 1: who buys something that they think is real from somebody
Speaker 1: they think is reliable it turns out to be a scam,
Speaker 1: a fraud, misrepresented, missold. What is the recourse that they have?
Speaker 1: And a lot of the industry's focus has been on
Speaker 1: the regulation of a kind of the companies, the exchanges,
Speaker 1: the technology itself, and there's a large gap, particularly in
Speaker 1: the US, for consumer protections as it relates to that,
Speaker 1: and I am personally very interested in seeing whether we'll
Speaker 1: get any movement there.
Speaker 4: We'll definitely appreciate you both of us joining us. Stacey
Speaker 4: Marie Ishmail, managing editor for Crypto at Bloomberg News. Also
Speaker 4: Zeke Fox Bloomberg News Financial Investigations reporter, also the author
Speaker 4: of Number Go Up, Inside Crypto's wild Rise and Staggering Fall.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 4: We've got all our eyes, all eyes on what's going
Speaker 4: on when it comes to tariffs and the potential threat
Speaker 4: of tariffs from the incoming administration or Bloomberg Intelligence team
Speaker 4: actually that with a new note this morning about the
Speaker 4: risks of tariffs specifically on US automakers. US automakers could
Speaker 4: see more than three hundred and thirty five hundred dollars
Speaker 4: in added labor cost per vehicle if President elect Donald
Speaker 4: Trump's proposed tariffs are imposed on imports from Canada and Mexico,
Speaker 4: and the figure may also arise if auto parts are reshored.
Speaker 4: This is according to a Bloomberg Intelligence analysis. Ford GM
Speaker 4: and Stilantis might bear the biggest brunt given their production
Speaker 4: in Mexico, but Tesla could be least affected. We got
Speaker 4: with us Linley Brown, partnering Global Trade at Ernst and Young.
Speaker 4: She joins us from San Francisco this afternoon. Linley, First
Speaker 4: of all, how are you out in California right now?
Speaker 2: Good?
Speaker 7: It's hard to complain, you know, December and California.
Speaker 4: Okay, Good, just wanted to check there. Hey, I do
Speaker 4: want to get an idea from you. First of all,
Speaker 4: how you think about the relationship between tax and tariffs,
Speaker 4: because this is the intersection of your specialty at Ey
Speaker 4: and specifically the conversations that you're having right now with
Speaker 4: leaders at companies all around the country as they prepare
Speaker 4: for the incoming administration.
Speaker 7: Yeah, that's a great question. It's been very busy and
Speaker 7: this is certainly the topic to jure. You know, with
Speaker 7: the current threat of widespread tariffs, companies are really examining
Speaker 7: multiple avenues of mitigation and one of those, one of
Speaker 7: those levers, one of those super powerful mitigating factors is
Speaker 7: customs valuation. Pertinent to customs valuation is tax, particularly where
Speaker 7: you have buyers and sellers in these global transactions who
Speaker 7: are related, namely, you know the automakers, the companies that
Speaker 7: you named and kind of the intro so this is them, right,
Speaker 7: This is that valuation of products that is all tax.
Speaker 5: And Tim was actually just mentioning a really interesting stat
Speaker 5: from Bloomberg Intelligence where they were compiling data about how
Speaker 5: Detroit automakers face a thirty five hundred dollars a car
Speaker 5: hike on Trump tariffs, potentially an added labor cost per vehicle.
Speaker 5: What I'm wondering when you have a situation on this,
Speaker 5: what are the potential here of this getting passed down
Speaker 5: to consumers and shoppers of these types of vehicles.
Speaker 7: That's a great question. You know, the importer of record
Speaker 7: will bear that duty cost one hundred percent of the time.
Speaker 7: Right then to your point, right, the question is will
Speaker 7: that product from a price elasticity perspective, will they be
Speaker 7: able to pass that on to consumers or not? Right,
Speaker 7: if you are the only seller of a very particular product,
Speaker 7: you can charge whatever you want to. If you're not,
Speaker 7: and there's you know a lot of competition, those companies
Speaker 7: are probably going to absorb those costs. And that's when
Speaker 7: comes in these mitigating activities. Right, how do you mitigate
Speaker 7: the extent of those tariffs so that it doesn't because
Speaker 7: those go right into cost of goods sold. But the
Speaker 7: ability to pass those costs onto consumers will totally depend
Speaker 7: on the availability of you know, in the competitiveness in
Speaker 7: this market.
Speaker 3: What do you mean by that?
Speaker 4: Do you mean geographic competitiveness and companies that might not
Speaker 4: necessarily be important?
Speaker 3: Like, how does that work?
Speaker 4: Because you would imagine that every company is sort of
Speaker 4: dealing with the same thing, at least if they're manufacturing
Speaker 4: products in those areas.
Speaker 7: Yeah, so it's we've certainly seen a shift, right, So
Speaker 7: from twenty eighteen, with like the first Trump administration until now,
Speaker 7: companies have certainly diversified their supply chain. They moved out
Speaker 7: of China, they moved you know, near shoring, right, they
Speaker 7: moved to Mexico. Certain other companies you know, moved other places.
Speaker 7: From a you know, from a supply and demand perspective.
Speaker 7: The impact of the tariffs is on those automakers that
Speaker 7: sort of went all in from a Mexico perspective, They're
Speaker 7: they're in that bullseye right now. It's totally geographical. It
Speaker 7: depends on you know, near shoring, far shoring, whatever you
Speaker 7: made to diversify your manufacturing base. That will certainly impact
Speaker 7: what options you have available to mitigate the tariffs and
Speaker 7: just how impacted you are.
Speaker 5: So walk us through how exactly tax and custom departments
Speaker 5: will end up having to work together on this.
Speaker 7: Yeah, it is really it's interesting because you know, with
Speaker 7: an EY, I sit in the tax group, right, I'm
Speaker 7: an indirect tax. That's kind of an EY construct within
Speaker 7: most companies, and certainly it will vary based on sector
Speaker 7: and based on product customers could sit in supply chain,
Speaker 7: it could sit in legal, it could sit in tax
Speaker 7: Automotive for example, historics tell us it sits in tax, technology,
Speaker 7: sits in tax where that doesn't happen.
Speaker 8: Right.
Speaker 7: What these companies are going to need to do and
Speaker 7: have already started doing, is connecting those thoughts to say,
Speaker 7: if I really want to decrease my duties on imported products,
Speaker 7: most duties are advalrum. They are a percentage of customs value.
Speaker 7: To the extent you decrease your customs value, you pay
Speaker 7: less duties. The only way you're really decreasing that value
Speaker 7: is to team with tax, particularly in these areas of
Speaker 7: related party pricing, So where you are purchasing from a
Speaker 7: related party, you have a lot more ability and kind
Speaker 7: of you know, you have the ability to kind of
Speaker 7: change where is the profit in that value chain That
Speaker 7: is a tax discussion with a customs valuation lens. Those
Speaker 7: rules are different OECD transfer pricing wto customs valuation rules,
Speaker 7: but they have the same goal right arms length pricing.
Speaker 7: So to those two groups will undoubtedly work together. They
Speaker 7: have been largely since twenty eighteen, and for any of
Speaker 7: those linkages that were broken, they will certainly pick that
Speaker 7: right back up. And that is the way that both
Speaker 7: customs and tax kind of team together to create the
Speaker 7: most strategic value to enterprises when they're in this immediate
Speaker 7: kind of blizzard of tariff discussions.
Speaker 4: Linley really appreciate you joining us. Linley Brown, partner in
Speaker 4: Global Trade at Ernst and Young, joining us this afternoon.
Speaker 4: I'm the latest when it comes to how executives, how
Speaker 4: boardrooms are thinking about the added labor costs or the
Speaker 4: added costs associated with Trump's tariffs. Again, we don't know
Speaker 4: what's going to happen on January twentieth. We only know
Speaker 4: what the President elect has said thus far.
Speaker 2: Jess, you're listening to the Bloomberg Business Week podcast. Listen
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Speaker 4: Well, you can find our next guest products in the
Speaker 4: dairy section of your local supermarket. LifeWay known for its
Speaker 4: kaffir it's that yogurt like drink. Can also find it
Speaker 4: in my cousin's fridge. I found out over the weekend.
Speaker 4: I opened the fridge and there was some LifeWay in there.
Speaker 4: It's a public traded company about three hundred and sixty
Speaker 4: million dollar market cap. We got back with us Julie Smolanski.
Speaker 4: She's second generation of her family to run the company
Speaker 4: after her father started it and took it public on
Speaker 4: the Nasdaq. There's a pretty cool story behind that. Julie
Speaker 4: Simolanski is Chairman, president and CEO over at LifeWay, joining
Speaker 4: us from Los Angeles.
Speaker 3: Julie, great to have you back with us.
Speaker 8: Actilli in Miami, right, Oh Miami?
Speaker 3: Oh look at that? Okay? Well, trade one warm climate
Speaker 3: for another warm climate?
Speaker 5: Were more than here for sure.
Speaker 3: Love it.
Speaker 2: Hey.
Speaker 4: So, since we last spoke in October, LifeWay rejected that
Speaker 4: unsolicited takeover offer bides to Known North America twenty seven
Speaker 4: dollars per share.
Speaker 3: Because according to you guys, that.
Speaker 4: Quote substantially undervalues the company. Though you also said that
Speaker 4: the board is not opposed to the sale of the
Speaker 4: company at any price.
Speaker 9: What's the price, Well, that's for others to decide, But
Speaker 9: what I can tell you is that, you know, I'm
Speaker 9: not surprised that there is this interest and a lot
Speaker 9: of eyes on us.
Speaker 8: We have achieved twenty quarters of year ROHD over year growth.
Speaker 9: The last five quarters were historic record breaking quarters. Our
Speaker 9: growth profit has gone up almost one hundred percent in
Speaker 9: the last five years. Our shareholder return we've delivered a
Speaker 9: twelve hundred percent return in the last five years. So
Speaker 9: there is a lot going on at LifeWay, and we're
Speaker 9: really excited about all the opportunities that are available.
Speaker 8: So you know, we still have we have a long
Speaker 8: runway to go, and we have.
Speaker 9: A playbook on how to do it with an incredible
Speaker 9: management team and really on trend.
Speaker 8: Products that are really hitting the tipping point.
Speaker 9: Like we haven't even scratched the surface of all the
Speaker 9: opportunities around gut health, microbiome friendly live bacteria that is
Speaker 9: beneficial to the body that science is now finally just
Speaker 9: touching up to what my ancestors have been saying for
Speaker 9: two thousand years, which is the keeper and lifewaykeeper is
Speaker 9: beneficial to the body, and so so we're really excited
Speaker 9: about all of that.
Speaker 4: Julie, would it be do you want to actually sell
Speaker 4: the company? Because you grew up with this company, you
Speaker 4: took over at the age of twenty seven. It's a
Speaker 4: really it's a it's a really interesting story. It's also
Speaker 4: a tragic story about why you ended up taking it over.
Speaker 4: But I imagine there's a lot of emotions with this.
Speaker 3: I mean, do you do you want to sell it?
Speaker 9: I mean, you know, there's a board, there's an advisor.
Speaker 9: Evercore has been brought into be the the financial advisor,
Speaker 9: mesment banker. We have a very acclaimed legal team, so
Speaker 9: you know, you know what I want is that necessarily
Speaker 9: really relevant? But what I can tell you is that
Speaker 9: LifeWay and Kaper is in my DNA, and like you said,
Speaker 9: my father started a company. It originated from the Caucasus
Speaker 9: mountains where my family's from. And uh, you know there's
Speaker 9: there there is certainly a long leg see and authenticity
Speaker 9: that is priceless, and.
Speaker 8: You know that will never disappear.
Speaker 9: You know, our legacy, our history, what we've brought to
Speaker 9: the food industry, to the dairy case. You know, we
Speaker 9: really my father brought Keeper to the America, to America
Speaker 9: and created the category, commercialized it. So you know, what
Speaker 9: I would say is that there's probably no one else
Speaker 9: that knows Peper better than I do.
Speaker 8: I was eleven years old when my dad gave me
Speaker 8: the very very.
Speaker 9: First batch of Keeper that he made in our basement
Speaker 9: outside of Chicago in Sochie, Illinois. And I was eleven
Speaker 9: years old when I went to the first trade show
Speaker 9: and grew up on a trade show floor. Eleven years
Speaker 9: old when I you know, took part in my very
Speaker 9: first in store demo teaching Americans.
Speaker 8: What Keefer is all about.
Speaker 9: So you know that That's what I can tell you
Speaker 9: is that it's in my DNA. So I'm very passionate
Speaker 9: about it and that will never change.
Speaker 5: Well, I want to follow up on that, because why
Speaker 5: do you think it's not relevant if you're cheerman and
Speaker 5: CEO of the company.
Speaker 9: Well, there's a board and there's you know a lot
Speaker 9: of other factors that go into play, so you know
Speaker 9: that's really there's corporate governance and we're a publicly traded
Speaker 9: company and the board is going to do what's in
Speaker 9: the best interests.
Speaker 8: Of all shareholders and all stakeholders. So that's what's really.
Speaker 9: Important to us to make sure that we follow a
Speaker 9: great process and bring the best value to shareholders. But
Speaker 9: we're committed to bringing shareholders the best value for their investment,
Speaker 9: and that's what we'll keep doing.
Speaker 4: What message do you have for shareholders right now who
Speaker 4: want to make sure you're not distracted with these takeover
Speaker 4: offers and the work that goes into these versus making
Speaker 4: sure you're staying focused on delivering products and also working
Speaker 4: on that pipeline of products for sure.
Speaker 9: Well, we just announced a series of new innovations that
Speaker 9: we've been working on. We just launched ten new exciting
Speaker 9: lactose free Keefer flavors and really exciting trend setting flavors
Speaker 9: like pink pink passion fruit, pink dragon fruit that you know,
Speaker 9: was inspired by the Starbucks success of their pink drink,
Speaker 9: pistachio rose vanilla, inspired by the viral hit of Dubai
Speaker 9: chocolate bars, so a whole bunch of really hot flavors
Speaker 9: tarot Ubay. So those are hitting the streets. It's really
Speaker 9: exciting to see them out in the wild. We just
Speaker 9: announced another new innovation, a collagen Keeper smoothie.
Speaker 8: There is a huge, huge demand for skin healthy foods,
Speaker 8: foods that make us.
Speaker 9: Glow from the inside out and bring beauty to everyone
Speaker 9: inside out. We really believe the beauty comes from within
Speaker 9: and it starts with the gut. And there's incredible science
Speaker 9: and research that shows that the microbiome is just starting
Speaker 9: to become you know, all the good things about it
Speaker 9: is just starting to become known to lay people, and
Speaker 9: so we're you know, focused on sharing that message with
Speaker 9: as many people as possible. I'm right now at art
Speaker 9: Fuzzle doing the Art of business at a Founder Made summit,
Speaker 9: talking with other entrepreneurs about all the great work that
Speaker 9: we're doing, incorporating AI into our business, how it expedites
Speaker 9: our product launches, et cetera.
Speaker 8: So, you know, I'm definitely very focused on all the
Speaker 8: great things that we have.
Speaker 9: We are excited to announce new our children's product, pro Bugs,
Speaker 9: which is the first keeper in a pouch, first product
Speaker 9: in a pouch. We really disrupted the baby food space
Speaker 9: by bringing pouches to the market and disrupting that whole space.
Speaker 9: But our Probugs are for the first time we're scaling
Speaker 9: into mass market. They've always been available at Whole Foods
Speaker 9: nationwide exclusively, but now we're taking the math market based
Speaker 9: on some research that show that this is a you know,
Speaker 9: a continuing demand for parents and kids, and you know,
Speaker 9: we're so we're making sure that all of our consumers
Speaker 9: from cradle to grave are being served in one way
Speaker 9: or another. Will be announcing new expansion of our Farmer's Cheese,
Speaker 9: which has become really a huge success. It's been a
Speaker 9: legacy product for us for the last thirty eight years,
Speaker 9: but Farmer's Cheese is really taking off because of the
Speaker 9: viral nature of cottage cheese because of TikTok and social media.
Speaker 9: Cottage cheese really took off last year and our Farmer's
Speaker 9: cheese is already basically like a better version of blended
Speaker 9: cottage cheese. So we have like a recipe hack there.
Speaker 9: So you know, Farmer's Cheese is going into a math
Speaker 9: market for the first time, into fourteen hundred stores in January.
Speaker 8: So we have a lot of great.
Speaker 9: Things that are that we've been working on and are
Speaker 9: hitting the streets, and you know, that's what we're dedicated
Speaker 9: and focused to, and.
Speaker 8: The board will singdle the other stuff in the boardroom.
Speaker 5: And we're talking about sort of the farmers cheese, a
Speaker 5: cottage cheese and things like that. Who do you consider
Speaker 5: to be your prime competitors.
Speaker 9: Well, it's hard to say, because you know, Lifewaight is
Speaker 9: really the ninety five percent category leader and Keeper for example,
Speaker 9: So we're the global category leader. We have ninety five
Speaker 9: percent market share in the United States. We're the number
Speaker 9: one category leader in Mexico, where.
Speaker 8: We launch an export two.
Speaker 9: We're in South Africa, now, we're throughout the Caribbean. We
Speaker 9: just announced a new distribution deal to UAE and Dubai
Speaker 9: that'll be shipping in the next couple of days or weeks,
Speaker 9: and so it's it's hard to say who's our competitor.
Speaker 9: We're the number one in Keeper, We're the number one
Speaker 9: in Farmer's cheese. I would say, you know, the next
Speaker 9: thing would be other kinds of categories that compete with us,
Speaker 9: but not specifically anything within our category.
Speaker 8: We're the number one in both of those with no
Speaker 8: competition behind us.
Speaker 4: Julie, We're gonna have to leave it, but it's always
Speaker 4: great when you join us, whether you're in Miami for
Speaker 4: our basel or you're in la Julie Simlanski, chairman, president
Speaker 4: and CEO over at Life Why LifeWay joining us this afternoon.
Speaker 8: I'm brother Mac the journal about you.
Speaker 2: Let me drive?
Speaker 3: Oh no, no, no, no, who's going to drive?
Speaker 2: Alright?
Speaker 3: Please, I'll do the gravels. Let's wait, I want to drive.
Speaker 1: It's a good question.
Speaker 3: This is the drive to the clothes dot me.
Speaker 2: I think we'll buy around.
Speaker 5: On Bloomberg Radio with less than twenty minutes to go
Speaker 5: before the closing bell, the S and P five hundred
Speaker 5: is just marginally lowered down about one tenth of a percent, Tim,
Speaker 5: but still on track to snap four consecutive sessions of gains.
Speaker 5: Of course Tim was putting out earlier. How the S
Speaker 5: and P five hundred has hit fifty six records so
Speaker 5: far this year through yesterday, so one of the best
Speaker 5: year we've seen so far this century. Now it's time
Speaker 5: for driving the clothes.
Speaker 3: With century, I mean the way through the century.
Speaker 5: I mean that's right, we're going into twenty twenty five. Yeah,
Speaker 5: if you put into historical context, twenty twenty one saw
Speaker 5: I think it was around seventy all time high. So
Speaker 5: that was that year where we saw a lot of
Speaker 5: the meme craze and dog craze as well, and markets
Speaker 5: had peaked out later that year in the Nazek one hundred,
Speaker 5: but one of the best years, nineteen ninety five also
Speaker 5: had more than seventy records, but still none the least
Speaker 5: fifty six is good here. But we want to bring
Speaker 5: in Eric Clark, portfolio manager at Rational Dynamic Brands Funds
Speaker 5: from San Diego, who is going to break down the
Speaker 5: outlook for markets in twenty twenty five. It's great having
Speaker 5: you join with us, Eric, and I want you to
Speaker 5: discuss as we're kind of the calendar flipping going into
Speaker 5: twenty twenty five. I mean, we still have a little
Speaker 5: under a month to go here, So what is your
Speaker 5: kind of take as far as positioning going into year
Speaker 5: in and what does the positioning say as far as
Speaker 5: how investors are moving things around and shifting things in
Speaker 5: their portfolio is going into twenty twenty five.
Speaker 10: Yeah, I happy holidays almost. You know, it feels a
Speaker 10: little like like November of twenty twenty one right now
Speaker 10: with the speculation, you know, and that's what happens when
Speaker 10: people are nervous and there's a lot of uncertainty with
Speaker 10: the election and the results, and you know, the Fed's
Speaker 10: been gating off the economy for two and a half years.
Speaker 10: So when that all changes, you know, some some you know,
Speaker 10: animal spirits get unleashed, and I think that that's where
Speaker 10: we are right now. So that always makes me a
Speaker 10: little bit nervous short term, but I think, you know,
Speaker 10: heading into twenty twenty five, we should have a good,
Speaker 10: stable economy with an administration that's clearly more pro business
Speaker 10: and less regulation hopefully maybe even working on the government,
Speaker 10: and they're operating efficiency, so you know, we see lots
Speaker 10: of positive things. And you know, the consumer is still
Speaker 10: strong and spending, albeit not broad, but that that isn't
Speaker 10: a new phenomenon. The consumer has been very value oriented
Speaker 10: and trade down oriented for the last you know, two
Speaker 10: or three years because of inflation. So we don't really
Speaker 10: see that changing too much. We just worry a little
Speaker 10: bit that the speculative part of the market is getting
Speaker 10: a little too excited for people, and so you know,
Speaker 10: we don't tend to play in that world anyway.
Speaker 5: We like bitcoin.
Speaker 10: Speculative I would say bitcoin, I would say lower quality stocks,
Speaker 10: smaller cap stocks without profits, you know, those things have
Speaker 10: lagged for the last year, and so they're playing a
Speaker 10: little bit of catchup and some of the big cap
Speaker 10: high quality names are slowing down a little bit, which
Speaker 10: is fine. They were, you know, doing all the heavy
Speaker 10: lifting for most of the year.
Speaker 4: So well, okay, so let's talk a little bit about
Speaker 4: what you're going to do and how you might make
Speaker 4: some changes with the fund hsut X, the Rational Dynamic
Speaker 4: Brands Fund year to date up more than thirty one percent.
Speaker 4: It puts it in the eighty seventh percentile of its peers,
Speaker 4: so certainly some significant outperformance there over the last month,
Speaker 4: up close to ten percent. Amazon, Apollo, KKR, LVMH, Netflix,
Speaker 4: Chipotle among the top holdings in there. How does that change?
Speaker 4: How are you changing the portfolio or are you sticking
Speaker 4: to what you have in there right now?
Speaker 10: Well, we were sticking to some of the things, like
Speaker 10: you know, Amazon's been the biggest holding for a couple
Speaker 10: of years now, and we got a chance to really
Speaker 10: make it much bigger in twenty two when the stock
Speaker 10: was down sixty percent or so, which we thought was
Speaker 10: really silly. So we got a chance to buy a
Speaker 10: bunch of names when the market just didn't care about
Speaker 10: fundamentals in twenty twenty two, what I would say is
Speaker 10: we're introducing a little bit of defensiveness to the portfolio
Speaker 10: through things like you know, Clorox. We already have Walmart,
Speaker 10: which tends to be a pretty good defensive, even though
Speaker 10: they're playing offense pretty good these days too. In retail,
Speaker 10: while we've added you know, next Era Energy, which is
Speaker 10: a utility renewables. And then we have some contrarian ideas
Speaker 10: for twenty twenty five with you know, we've added Disney,
Speaker 10: We've added Nike back. We haven't had that one in
Speaker 10: a while. We've added Starbucks back, we haven't had that.
Speaker 3: One in a while.
Speaker 10: But we still love you know, the private equity guys.
Speaker 10: Even though you know, maybe those stocks might be a
Speaker 10: little bit ahead of fundamentals long term, they're still going
Speaker 10: to all throw their assets, you know, by double over
Speaker 10: the next five years. So the stock prices certainly will
Speaker 10: catch up to the fundamentals soon enough. So generally speaking,
Speaker 10: keeping with the same themes of consumer spending and the
Speaker 10: big trends that are happening, but always looking for some
Speaker 10: catch up opportunities that haven't moved, that aren't so expensive
Speaker 10: that people don't really, you know, don't really love or
Speaker 10: that maybe you know, real turnaround stories. And we're seeing
Speaker 10: more and more in the retail sector for.
Speaker 5: Sure, So you like Apple, Netflix, Amazon, What about when
Speaker 5: you come to chip stocks like Nvidia and maybe some
Speaker 5: of the other smaller ones.
Speaker 10: You know, we we obviously sold in Nvidia way too early,
Speaker 10: and we had some good gains on it. But to me,
Speaker 10: if I were going to play in the semiconductor world,
Speaker 10: Taiwan Semi still looks more interesting to us, much more
Speaker 10: reasonably valued. Has to be a part of every conversation
Speaker 10: within semiconductors and manufacturing. But you know, as a consumer
Speaker 10: dedicated investor with the technology that we own, tends to
Speaker 10: be more consumer tech rather than you know, semiconductors in general,
Speaker 10: so that that tends not to be a place that
Speaker 10: we play. We love salesforce. Clearly, they are going to
Speaker 10: enable lots of consumer companies to you know, implement AI initiatives,
Speaker 10: streamline operations, get some operational efficiencies. That's going to be
Speaker 10: a major theme across corporate America for the next three years.
Speaker 10: And you know, my view is that once you implement
Speaker 10: those things, your stock might not look as expensive as
Speaker 10: it does. If you can reset margins hire and profits
Speaker 10: hire because you're just doing things much better and delighting
Speaker 10: customers and allowed to raise your prices like metadid, you know,
Speaker 10: with their ads. So AI is definitely a very important thing.
Speaker 10: It's not just semiconductors. It's going to ripple through the
Speaker 10: entire you know, all of corporate America.
Speaker 4: In the last thirty seconds that we have with you,
Speaker 4: what are you staying away from apart from me, apart
Speaker 4: from like, you know, the speculative stuff.
Speaker 10: Sorry, sure, I mean I think it's I think it's
Speaker 10: if you are high valuations, super high expectations, and you know,
Speaker 10: going into the year where your business is probably about
Speaker 10: as good as it gets, then those are areas that
Speaker 10: I would like to stay away from because I'm much
Speaker 10: more focused on where are estimate revisions, where have they bottomed,
Speaker 10: and where are the beats? Probably more likely rather than
Speaker 10: in the most heated part of the market that everybody wants.
Speaker 10: I tend to be a I use the phrase looking
Speaker 10: for diamonds in a dumpster, and that's what we're doing
Speaker 10: in retail right now.
Speaker 4: Hey, Eric, Always good to check in with you from
Speaker 4: Sunny San Diego. Eric Clark Portfolio manager over at the
Speaker 4: Rational Dynamic Brands Fund, joining us this afternoon.
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