Speaker 1: This is Bloomberg Business Week. I'm Carole Masser and I'm
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Speaker 1: know about U, Katie, but last night I about ten
Speaker 1: o'clock Eastern time saw in my email at a message
Speaker 1: opened it up all caps headline from the Bloomberg Professional Service,
Speaker 1: Bob Iger coming back to Disney after retiring Bob J
Speaker 1: peck out while was the only word that came to
Speaker 1: mind at some other choice where its came to mind
Speaker 1: as well. But this is a big deal in the
Speaker 1: world of media. We've got Felix to Lette with us.
Speaker 1: He's Media, Entertainment and Telecom editor for Bloomberg Business Week.
Speaker 1: Is also the author of the great new book It's
Speaker 1: called It's Not TV. The Spectacular, Rise, Revolution and Future
Speaker 1: of HBO. He joined us via zoom from New York City. Felix,
Speaker 1: what was your first reaction when you saw this last night?
Speaker 1: It was pretty jaw dropping. I had to close my
Speaker 1: fantasy football app and you know, pay attention to what's
Speaker 1: happened in the media world again. Um yeah, total shock, surprise, excitement.
Speaker 1: This is just a totally wild move. Um And I
Speaker 1: think underscores what a crazy time it is in the
Speaker 1: entertainment business and how challenging and tumultuous this transition from
Speaker 1: the cable era to the streaming era is going to
Speaker 1: be for pretty much every big player in the space,
Speaker 1: including Disney. I'll admit I was asleep at ten pm.
Speaker 1: You got an early morning. I was resting up for
Speaker 1: a big day of reporting for Bloomberg News. But uh
Speaker 1: so you described shock. Was anyone expecting this or was
Speaker 1: this across the board shocking? I think that there were
Speaker 1: definitely people calling for a change at the top of Disney,
Speaker 1: particularly coming off of this last quarter, which was really
Speaker 1: truly a disastrous quarter for Disney. Um And I think
Speaker 1: shapeck performance during the earnings call, uh, left a lot
Speaker 1: of people scratching their head. You know, the Disney had
Speaker 1: announced this one point five billion dollar loss on streaming
Speaker 1: for the quarter, which was you know, way bigger than
Speaker 1: people thought it was going to be. And yet SHAPEC
Speaker 1: was really cheerful and sunny during that call. And uh
Speaker 1: so we think in one sense, people were thinking, Okay,
Speaker 1: maybe this guy is in over his head. There's been
Speaker 1: all these series of missteps. There was, you know, his
Speaker 1: clumsy handling of the culture War issues down in Florida.
Speaker 1: There was this dismissile of Peter Rice, the head of television,
Speaker 1: earlier this year, which upset a lot of creative people
Speaker 1: in Hollywood. Um. You know, so there's been a series
Speaker 1: of airs. Um so, I think the decision to move
Speaker 1: on from SHAPEC, I think is not that shocking. It's
Speaker 1: really just the bringing Eiger back, um, you know, replacing
Speaker 1: his hand chosen you know, pick to succeed him originally. Uh.
Speaker 1: You know, for years, every time he's been out in public,
Speaker 1: people have asked them about would you ever consider coming
Speaker 1: back to Disney? And he said again and again and
Speaker 1: again like no, I'm not interested. I'm not interested. So
Speaker 1: that part of it is is pretty wild. Never say never.
Speaker 1: I mean, Bob Iger seventy one years old. He was
Speaker 1: was at Disney before he quote unquote retired more than
Speaker 1: for more than four decades. He was its CEO for
Speaker 1: fifteen years. He oversaw some of the biggest acquisitions that
Speaker 1: the company made, including Marvel, Pixar and other acquisitions. So, Felix,
Speaker 1: what does it mean for the future of Disney and
Speaker 1: what we can expect over the next two years, which
Speaker 1: is from what we understand, uh, what we'll see with Iger. Yeah,
Speaker 1: I mean, I think the argument for bringing him back
Speaker 1: is this guy had a fifteen year run that was
Speaker 1: seen as this incredible uh time for Disney, this great
Speaker 1: series acquisitions he made. And you know, we're at this
Speaker 1: point in this transition from cable to streaming where everybody
Speaker 1: is suffering because the linear networks that was making everybody
Speaker 1: profits are you know, continue to decline very quickly. The
Speaker 1: streaming services are essentially these huge giant holes of money
Speaker 1: at this point of people are just shoveling money into them.
Speaker 1: They're still not profitable. Um. So I think it's a
Speaker 1: time when almost anything could be up for um for sale.
Speaker 1: I think we're going to see more consolidation space. People
Speaker 1: are going to have to team up further in order
Speaker 1: to survive this era. And I think the argument for
Speaker 1: bringing your back is you want that guy uh making
Speaker 1: those big decisions over the next couple of years, um,
Speaker 1: and you know you have some faith that he's going
Speaker 1: to make smart moves. Well, Wall Street is definitely cheering
Speaker 1: both of you. Look at the shares also at least
Speaker 1: one upgrade on this news. But tell us about the
Speaker 1: potential fly in the ointment here the activist investor Nelson
Speaker 1: pelts his fund. What could potentially go wrong here? Yeah,
Speaker 1: I mean I think that there's plenty that could go wrong.
Speaker 1: I think, um, you know, part of it is again
Speaker 1: the funny. The thing that's kind of funny to me
Speaker 1: is like, you know, I kept pushing back his retirement
Speaker 1: again and again during his previous reign, and he kept,
Speaker 1: you know, there was all this speculation about you know,
Speaker 1: who are who's going to succeed you? Or do you
Speaker 1: have a leader in mind? You know, who's going to
Speaker 1: carry this future company into the future. He really kept
Speaker 1: running off potential candidates, um, and then in the end
Speaker 1: he picked this guy Shapebeck, who left everyone kind of
Speaker 1: scratching it has why do you do that? Um And
Speaker 1: now you know, on the one hand, it's great that
Speaker 1: Iger's back to deal with whatever acquisitions they're gonna have
Speaker 1: to make in the next couple of years. On the
Speaker 1: other hand, now he's back in charge of picking another
Speaker 1: successor for the future of Disney, and it doesn't give
Speaker 1: you a lot of faith that he is very good
Speaker 1: at that process. Um. So, I think that's going to
Speaker 1: be part of the challenge that all investors are going
Speaker 1: to be looking at, like what is the plan beyond
Speaker 1: these two years? That's certainly the question that many people
Speaker 1: are going to have it at least, as you mentioned,
Speaker 1: Katie uh And you pointed to Disney shares up more
Speaker 1: than five percent right now, and they were high as
Speaker 1: high as nine point nine percent earlier in the day.
Speaker 1: Felix Gillette Media Entertainment telecom editor for Bloomberg Business Week.
Speaker 1: He's the author of the great new book just came
Speaker 1: out earlier this month. It's called It's Not TV The
Speaker 1: Spectacular Rise Revolution in Future of HBO. Joining us this
Speaker 1: afternoon via zoom from New York City. You're listening to
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes.
Speaker 1: Tim Stinovic on Bloomberg Radio. We've talked in the past
Speaker 1: about what it means for people who have been laid
Speaker 1: off from some of the biggest tech firms. I mean,
Speaker 1: we're talking about companies like meta platforms, Uber, Lift, Salesforce, Stripe,
Speaker 1: and more. And we talked about it oftentimes in the
Speaker 1: context of what it means in the bigger picture of
Speaker 1: what it says about the economy. But there's a different
Speaker 1: way of looking at it that's really important, and it
Speaker 1: has to do with people who hold H one B
Speaker 1: visas and what they're doing if they've been laid off.
Speaker 1: We've got Sinduja Rodnegrogen on the phone with us. She's
Speaker 1: senior investigative data reporter. Actually, she joins us via zoom
Speaker 1: from San Francisco for a Bloomberg News You can read
Speaker 1: her story right now on the Bloomberg terminal and at
Speaker 1: Bloomberg dot com. Slash business Week also with us as
Speaker 1: Joel Webber, the editor of Bloomberg Business Week. He's with
Speaker 1: us right now in the Bloomberg Interactive Broker's studio. So, Joel,
Speaker 1: how how should we be thinking about these layoffs? Well,
Speaker 1: one thing that really UH struck me with UH. Saint's reporting.
Speaker 1: UH and companies reporting is about H one B visas
Speaker 1: and H one B visus have been uh something that
Speaker 1: the magazine has written about before. UM, skilled workers that
Speaker 1: have largely been in the tech industry. UH from a
Speaker 1: rod and you're we're talking some pretty incredible stories about
Speaker 1: where a lot of these people come from. But the
Speaker 1: tech industry has really benefited from this workforce. But what's
Speaker 1: what's interesting is effectively it's a company sponsored. So the
Speaker 1: moment that any of these people get laid off or fired,
Speaker 1: it puts them in a really difficult place. A lot
Speaker 1: of these people end up with mortgages, childcare, all kinds
Speaker 1: of stuff because they're you know, banking on a on
Speaker 1: a future here um oftentimes putting permanent residents residency in
Speaker 1: motion at the same time. So, so Sin brings us
Speaker 1: inside this having having seen this data, how significant of
Speaker 1: a hit to the tech industry are these firings having
Speaker 1: as as it puts a lot of these people in jeopardy. UM,
Speaker 1: So this is a very interesting question. So it's like
Speaker 1: hundreds of employees we know have been laid off just
Speaker 1: from Twitter and Meta. I think around three fifty. And
Speaker 1: I want to say it's an under account because we're
Speaker 1: looking at people who have been posting on LinkedIn, putting
Speaker 1: their name out there in a crowd crowdsourced spreadsheet or
Speaker 1: something saying hey, I'm in need of a visa sponsorship them.
Speaker 1: You know. Overall, like when we did our analysis, we
Speaker 1: realized just with like six companies you know that have
Speaker 1: been recently doing the layoffs Meta, Twitter, Amazon, Stripe, Salesforce,
Speaker 1: and um Um and Left, we found that they just
Speaker 1: the six of them employee sixty forty five thousand um
Speaker 1: H one B workers. That's an estimate we look, we
Speaker 1: created based on our our data analysis and just between
Speaker 1: Twitter and Meta, we found hundreds of people who claim
Speaker 1: to be visa holders who have been um um laid
Speaker 1: off in the in the in the last few weeks.
Speaker 1: So it's a pretty significant number, you know, and it's
Speaker 1: in the hundreds for sure. As you and our colleagues
Speaker 1: Brody Ford and Katrina Madison right, people who do hold
Speaker 1: H one B visas who then become unemployed, they can
Speaker 1: only remain in the US legally for sixty d is
Speaker 1: without finding new employers to sponsor them. Do we know
Speaker 1: anything about the terms that these employees are given when
Speaker 1: they are laid off from companies because they faced this
Speaker 1: special circumstance, Like are they given better terms because they're
Speaker 1: on this kind of timeline here? Yeah, I mean, I
Speaker 1: think you know, that was the interesting thing we found
Speaker 1: while reporting the story. You know, we started out thinking
Speaker 1: of the story is like a human story. You know,
Speaker 1: what happens when you have this few weeks a few
Speaker 1: months of deadline and you're trying to scramble for another
Speaker 1: job and visa sponsorship. But what we realize is that
Speaker 1: some companies are doing better than others in terms of
Speaker 1: how they treat their immigrant workforce and what policies they
Speaker 1: lay out. For example, you know, we found that Twitter
Speaker 1: sort of didn't give a lot of assistance or support
Speaker 1: to these employees, and some other companies have like a
Speaker 1: little wealth out slightly better thoughtout policies. So for example,
Speaker 1: you know, your sixty day clock starts sticking after the
Speaker 1: last day that you've you know, worked there, So if
Speaker 1: you could extend that last day, you know, if if
Speaker 1: there's like a notice period given that you're going to
Speaker 1: be laid off, but after two months, so that gives
Speaker 1: like people four months, you know, two months when they're
Speaker 1: working at that company, and then UM an additional sixty days.
Speaker 1: So if that can be a form of relief and
Speaker 1: as opposed to saying, you know, you're later off today, Uh,
Speaker 1: and then you know we're going to give you severance
Speaker 1: for three weeks or whatever or eight weeks or something,
Speaker 1: and then you know your clock starts right now. So
Speaker 1: that extension of time is really important. And you know
Speaker 1: some companies, I think Meta has done that, particularly for
Speaker 1: immigrant visa holders. Lift was another one. Um stripe when
Speaker 1: they wrote that email. I don't know if they offered
Speaker 1: a notice spirit, but they know definitely acknowledged that this
Speaker 1: would be very difficult for immigrant visa holders. And Twitter,
Speaker 1: you know sort of they didn't think through as much
Speaker 1: based on our reporting, and yeah, and there was there was,
Speaker 1: you know, the and when employees wrote to them, they
Speaker 1: many of them were really confused about you know, when
Speaker 1: does my clock start ticking? Does it start the day
Speaker 1: of January four? When you know you've said that that
Speaker 1: would be our last day? But you know, we're not productive,
Speaker 1: We're not on the are we on payroll? Are we not?
Speaker 1: And you know, like, uh, is it going to be
Speaker 1: a member for them. So there was like a lot
Speaker 1: of confusion amongst employees and they got very little guidance,
Speaker 1: very little like immigration one on one counseling or even
Speaker 1: or even you know, um, anything that says more definitively yeah,
Speaker 1: this is the day you need to this is your
Speaker 1: last day, or that is your last day. They just said,
Speaker 1: you know, you should consult your own immigration attorney. So
Speaker 1: I think, you know, employees, that's like the least you
Speaker 1: could do for this workforce if invested so much time
Speaker 1: in this country, like you mentioned, and you know, at
Speaker 1: least give them like the most they can get so
Speaker 1: they can like succeed in finding that job, especially now
Speaker 1: at the start of a place when a lot of
Speaker 1: tech companies are instituting hiring freezers and holiday season when
Speaker 1: things slow down. So you know, the more you can
Speaker 1: do for them, the better it is for them. Okay,
Speaker 1: So we I want to talk a little bit more
Speaker 1: about the Indians, because there there are a ton of
Speaker 1: H one b h A visa holders from India, uh
Speaker 1: many of them. As we were writing this story. I've
Speaker 1: been here for for years, and it seems like it's
Speaker 1: really hitting that country hard. These numbers right, So whom
Speaker 1: did you talk to and what do you learn from
Speaker 1: on the India quotion? I think you know, um a
Speaker 1: lot of people who come on H one B V.
Speaker 1: So it's like you mentioned drole, like the the goal
Speaker 1: is to eventually, you know, get permanent residency and citizenship.
Speaker 1: And for for a lot of folks like you know,
Speaker 1: you you stay on H one B for anywhere from
Speaker 1: three to six years. Your company starts working on your
Speaker 1: green card application, they file it and then you get
Speaker 1: your green card and you know, I want to say
Speaker 1: anywhere between one year or the three years or something
Speaker 1: of that sort. But with Indians and actually Chinese nationals
Speaker 1: like you file that green card and there's like a
Speaker 1: huge backlog because there's this rule that says that you know,
Speaker 1: you can own every country is allowed to get only
Speaker 1: seven percent of the green card and Indians and Chinese
Speaker 1: being a huge part of the tech force, have you know,
Speaker 1: immigrated on this reason larger numbers. So you know, particularly
Speaker 1: for Indians, you know, there are seven percent of the
Speaker 1: green cards reserved for them every year, which comes to
Speaker 1: around ten thousand green cards, and then there are five
Speaker 1: hundred thousand, uh nearly five hundred thousand um. You know
Speaker 1: holders who have applied for the green cards, so that
Speaker 1: so only ten thousand will keep getting every year. And
Speaker 1: the backlog is huge and it's growing. So you know,
Speaker 1: if you live for your green card today or if
Speaker 1: you applied for it in then the sillery could take
Speaker 1: as long as you may not. We unfortunately have to
Speaker 1: leave it there. Sindoja ranaj and Uh senior investigative data
Speaker 1: reporter for Bloomberg News. To be assume from San Francisco.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. We're to welcome
Speaker 1: in once against Sheen contractor. People listen to the program
Speaker 1: are familiar with her voice. She's E s G analysts
Speaker 1: for Bloomberg Intelligence. She's with us once again in the
Speaker 1: Bloomberg Interactor Broker Studio, fresh off of her recent trip
Speaker 1: to the Conference of Parties twenty seven. That's copy as
Speaker 1: it's known. She good to have you with us this afternoon.
Speaker 1: You just got back from Charmel Sheik, Egypt resort town.
Speaker 1: I know you did a lot of working there and
Speaker 1: not resorting. Okay, maybe some resorting, maybe some vacation. I
Speaker 1: hope you had some fun. First of all, what was
Speaker 1: cop like? I know this was your first one, so
Speaker 1: Tim Cupp was like nothing I've seen before. It was,
Speaker 1: you know, this two week conference where forty people just
Speaker 1: descent to talk about climate. I don't think I've ever
Speaker 1: been in that kind of environment. It's like very focused
Speaker 1: and there was so many interesting discussions, so many different things,
Speaker 1: especially around two things in particular. The first was really
Speaker 1: carbon markets. There was you know, people who were great supporters,
Speaker 1: there were people who are great sort of disbelievers. And
Speaker 1: the second one was around companies corbon reduction goals and
Speaker 1: the need to sort of just go beyond just paper
Speaker 1: de carbonization. I guess tell us about that debate there
Speaker 1: on carbon what is sort of the rallying cry for
Speaker 1: the advocates and what are the non believers saying. So
Speaker 1: when it comes to carbon markets, the goal is for
Speaker 1: companies to basically offset their own emissions by purchasing these
Speaker 1: credits from projects that remove common from the atmosphere. And
Speaker 1: basically the goal there has to be that sort of
Speaker 1: the price of carb and the cost of carbon has
Speaker 1: to pay for that additionality sort of without that the
Speaker 1: project might not have been viable, which makes it sort
Speaker 1: of an additionality. The the people who are against it
Speaker 1: believed that a lot of this money is going to
Speaker 1: go to works projects that are already financially viable. It's like,
Speaker 1: you know, a renewable project where it's cost competitive, it's
Speaker 1: going to be built anyway, there's no additionality, So the
Speaker 1: money is really going to nothing, I guess. So it's
Speaker 1: basically the point that you have to fund a project
Speaker 1: through offsets which otherwise wouldn't have existed. Okay, Well, you
Speaker 1: cover E s G for Bloomberg Intelligence, and a big
Speaker 1: part of your trip, of course, had to do with
Speaker 1: the way that you're writing reports about what you learn
Speaker 1: there and what investors can learn from the way that
Speaker 1: you know SG is being talked about at events like this.
Speaker 1: What's a big takeaway that you have for the Bloomberg
Speaker 1: Intelligence audience. So the one thing is, and I've said
Speaker 1: this before, but before God this year, before last year,
Speaker 1: companies are setting these Gorbon reduction goals at a pace
Speaker 1: we've never seen before. There were quite a few interesting
Speaker 1: talks that happened around actually sort of implementation, Like the UK,
Speaker 1: for example, had this new proposal during COP where you know,
Speaker 1: if a company has a goal, they have to have
Speaker 1: a plan on how to meet that good. I think
Speaker 1: that's the biggest takeaway. Even in our research, we find
Speaker 1: that out of the companies we've looked at, about eight
Speaker 1: have gobbon goals. But what do these actually mean? It's
Speaker 1: a huge gap. Yeah, I mean this is something I
Speaker 1: always think about, like how do you factor in goals
Speaker 1: such as that one when you're you know, thinking about
Speaker 1: a company's E s G score. Yeah, So that's sort
Speaker 1: of interesting because you know, when carbon is material, like
Speaker 1: for sectors like utilities, really sort of environmentally heavy sectors,
Speaker 1: that's when actually having a goal could have some kind
Speaker 1: of financial impacts. I think it comes down to materiality,
Speaker 1: what are the sectors by carbon matters, and how does
Speaker 1: it actually fuctor into your financial performance. I want to
Speaker 1: talk bigger picture COP because you were there and I
Speaker 1: haven't gotten to speak to many folks who were there.
Speaker 1: Does it do you leave with the impression that it's
Speaker 1: useful to the extent that all of these countries are
Speaker 1: going to leave and go back and work to reduce
Speaker 1: carbon emissions so we ultimately see a reduction in climate change.
Speaker 1: So Tim, I'll be honest. You know, before I went
Speaker 1: to this, I was really skeptic. I was like, why,
Speaker 1: what is the point of gathering? Blah blah. But then
Speaker 1: I spoke to a negotiator there and he told me
Speaker 1: one thing. He said, you know, shying, think back to
Speaker 1: Tift right. No, no, country don't net zero gulo had
Speaker 1: anything really to do with what sort of climate ambition.
Speaker 1: But look at where we are today, about a hundred
Speaker 1: and thirty plus companies have net zero goos. So you're
Speaker 1: to your it's kind of frustrating, but over the big picture,
Speaker 1: we've we have achieved something I guess and compared to
Speaker 1: business as usually if you think about it. So I
Speaker 1: feel better now we're talking about it. Yeah, exactly. See.
Speaker 1: Are you optimistic? Are you going next year? I hope?
Speaker 1: So I don't know. Are you optimistic though, just in
Speaker 1: the last thirty seconds that we have I am? I am?
Speaker 1: I think you know, given what companies are doing, given
Speaker 1: what countries are saying, given some of the things we've seen,
Speaker 1: I think I definitely am. Well, welcome back and thanks
Speaker 1: for sharing some of your experience with us. That Shaheen Contractors.
Speaker 1: She's environmental, social, and governance analyst at Bloomberg Intelligence, fresh
Speaker 1: offer trip from Charmel Shake where she was there for
Speaker 1: Copy seven a journal. Yeah, I'll bet you. Let me drive.
Speaker 1: Oh no, no, no no, no, honey, please, I'll do the
Speaker 1: bride revels. I want to drive. It's good question. Drive.
Speaker 1: This is the drive to the globe up on Bloomberg Radio.
Speaker 1: It's that time, already less than ten minutes to go
Speaker 1: to the end of trading here on this Monday, November two,
Speaker 1: Tim Stantovick and Katie Grydfeld relive in the Bloomberg Interactive
Speaker 1: Brokers the studio. Let's get to our drive to the close.
Speaker 1: Guest Eric Clarks, portfolio manager at Rational Dynamic Brands Fund.
Speaker 1: He joins us via Zoom from San Diego. Eric, good
Speaker 1: to have you with us. How are you, hey, Tim?
Speaker 1: How are you We're doing well. Thanks, It's good to
Speaker 1: have you back with us. Um, So help us understand
Speaker 1: the way that you're viewing the markets right now. We're
Speaker 1: getting to the close of the year, sort of the
Speaker 1: final sprint to the end of the year. It's a
Speaker 1: holiday week. We're seeing volumes down right now versus last
Speaker 1: twenty days on the SP five. How does the year end. Uh.
Speaker 1: You know that one's a bit of a toss up,
Speaker 1: to be quite honest with you, because we have tax
Speaker 1: laws selling, you know, at the end of the year,
Speaker 1: but we also have prices coming down to what I
Speaker 1: consider to be much more attractive than we've seen in
Speaker 1: in a number of years. And so you know, it's
Speaker 1: anybody's guests on the timing and when people do their
Speaker 1: tax laws selling. But we've certainly already done all that stuff,
Speaker 1: and now we're trying to pick away at some of
Speaker 1: the opportunities that tax laws selling is gonna is giving
Speaker 1: us the kind of right off the rest of the
Speaker 1: year then, and trying to you don't even have to
Speaker 1: come in, Katie, Okay, that's what I'm trying to get.
Speaker 1: I have been hearing more about tax as harvesting and
Speaker 1: what a brutal year. But I want to bring you
Speaker 1: into a debate we we're having at the start of
Speaker 1: the program about the consumer because we're going to get
Speaker 1: a lot of black data or Friday data on Friday
Speaker 1: after Thanksgiving. Uh, we know that the consumer is still
Speaker 1: strong here when you see headlines and economic reports to
Speaker 1: that effect. What is your takeaway is that bullish or
Speaker 1: bearish for you when you think about what the FED
Speaker 1: is trying to accomplish. Well, I mean, listen, that the
Speaker 1: FED is a whole different story that we could probably
Speaker 1: spend a lot of time on. But from a consumer,
Speaker 1: you know, when we are starting to feel squeezed, we
Speaker 1: start to make different decisions. We start to play that
Speaker 1: this versus that game. What do I need to buy?
Speaker 1: Even if I don't love the prices that are higher?
Speaker 1: What do I have to buy? I gotta keep doing that?
Speaker 1: What can I defer maybe for now if I'm feeling
Speaker 1: the pinch a little bit, particularly towards holidays, and you
Speaker 1: want to have good holiday spending. So I think we're
Speaker 1: in that period of consumers just making a decision about
Speaker 1: what to spend on and where to go, and which
Speaker 1: brands are the most relevant. I mean that that's where
Speaker 1: we we spend all of our time on brand relevancy.
Speaker 1: So so we feel like that we we have a
Speaker 1: good expertise in that area. But clearly the consumers, you know,
Speaker 1: feeling the pinch a little bit with prices being up
Speaker 1: literally across every category that we see. Okay, so that's
Speaker 1: the perfect segue to talk about what you're concerned with,
Speaker 1: and that's an earnings recession? Did we I mean, given
Speaker 1: what we've heard about from companies that have reported already,
Speaker 1: and we still got zoom after the bell, but we're
Speaker 1: pretty much done with earning season. Q four is not
Speaker 1: going to look great for a lot of companies. Amazon,
Speaker 1: for example, already gave us a heads up about that
Speaker 1: target as well. What did what did you see? And
Speaker 1: what does that portend for Q one? Well? I think
Speaker 1: the thesis is the next shoot a drop is earnings
Speaker 1: will start to reflect all the things that the FED
Speaker 1: has done, and that slow down will be here. My
Speaker 1: problem is, you know, the valuations have been reset so
Speaker 1: much already. Who knows if it's a full reset or
Speaker 1: a two thirds reset whatever the numb briz. I suspect
Speaker 1: we have an earnings trough for the year. You know,
Speaker 1: probably reported in the April quarter, and historically markets bottom
Speaker 1: three to six months before earnings and and GDP, etcetera.
Speaker 1: And so you know, if we're in late November now,
Speaker 1: where you know the market probably has fully discounted or
Speaker 1: at least you know, almost fully discounted the earnings recession
Speaker 1: that I think everybody expects. So does that mean we've
Speaker 1: hit bottom. Well, I I don't know that we've hit bottom.
Speaker 1: That it's that's above my pay grade. I'm trying to
Speaker 1: find the right price points for the brands that we love.
Speaker 1: It's really hard. I think, you know, Michael Symbolis from
Speaker 1: JP Morgan put out a report. I think that thirty
Speaker 1: on the smp IS is a reasonable place to go.
Speaker 1: It doesn't mean we have to go there. Doesn't we
Speaker 1: stay there, But I think if we get to that level,
Speaker 1: you're gonna see some you know, multi year wonderful buying opportunities,
Speaker 1: and sentiment is probably gonna be dreadful if we get
Speaker 1: down there, But that's usually when the best buying opportunities
Speaker 1: happen when it feels bad. All right, Erica, want to
Speaker 1: get specific here. I want to talk about the brands,
Speaker 1: the names that you're excited about. What are you looking at? Well,
Speaker 1: I mean, we focus on a lot of trends, and
Speaker 1: so some of them are consumer trends, and that's not
Speaker 1: just buying and selling of goods and services. You know,
Speaker 1: I love, we love this mega trend in alternative assets,
Speaker 1: people migrating a little bit of money from stocks and
Speaker 1: bonds into alternatives. Regal assets, infrastructure, private equity, all those things.
Speaker 1: Black Stone and k K are the two biggest. They
Speaker 1: are fairly cheap. Now. The stocks have come off pretty
Speaker 1: meaningfully this year. I'm looking for really good snapbacks in
Speaker 1: three within regular consumer spending. You know, I still like
Speaker 1: the the at Leisure, the Lulu Lemons, and the Nikes.
Speaker 1: They've cut down pretty meaningfully. We still like the home
Speaker 1: I know, there's you know, home sales have have cooled
Speaker 1: off pretty dramatically with the Fed actions and mortgage rates rising.
Speaker 1: That just means that people are going to stay in
Speaker 1: their homes rather than move. And so I'm not surprised
Speaker 1: to see home Depot and Low's still do pretty well.
Speaker 1: You know, inventories are up a little bit, but pricing
Speaker 1: powers is really strong. Eric, Tesla is on your list
Speaker 1: as well, thanks to the notes that you sent our
Speaker 1: producer Paul a little earlier today. I'm I've got Tesla's
Speaker 1: one of my decliners today. It's down to what another
Speaker 1: close to six percent six and a half percent right now, um,
Speaker 1: down from when Ellen's deal for Twitter clothes. Why are
Speaker 1: you bullish on Tesla? Well, we we sold it much
Speaker 1: higher ago and we just started nibbling literally put a
Speaker 1: pinky toe in the water a little bit higher than
Speaker 1: where we are and and we'll start to it's the
Speaker 1: smallest position in the fund. I just you know, right now,
Speaker 1: the distractions that Ellen has had with this Twitter I
Speaker 1: think are providing long term opportunities. And so I'm going
Speaker 1: to be very slow and methodical to put money into
Speaker 1: Tesla as it declines. But anything on her I think
Speaker 1: one fifty, you know, one between that level, I think
Speaker 1: are pretty good places to to to add to that
Speaker 1: name for the long term. But it's been a it's
Speaker 1: a teeny tiny port portfolio position right this minute. That
Speaker 1: this is really interesting that the Tesla discussion, that Elon
Speaker 1: Musk discussion. I mean we hear all the time as
Speaker 1: a bear case for Tesla that you know this is
Speaker 1: Elon Musk is a distracted CEO. Obviously he spread very
Speaker 1: thin with the most recent Twitter fiasco. How much of
Speaker 1: a concern is that for you? You say, this is
Speaker 1: a long term sort of nibbling that you're doing, But
Speaker 1: how do you factor that concern in? Well, I I
Speaker 1: think that he is getting the message. But let's use
Speaker 1: Disney as a good example. You know, Bob Jpeck probably
Speaker 1: wasn't the right guy Bob Iger's coming back. Ellen said
Speaker 1: he hates managing day to day business. That's not for strength.
Speaker 1: He needs a Tim Cook type up Garador to run Tesla,
Speaker 1: and he probably needs one to run Twitter. Let him
Speaker 1: be the kind of the chief chief information or innovation
Speaker 1: officer that's really He's just doing too much, and I
Speaker 1: think he finally realizes he Eric, we gotta run. Unfortunately,
Speaker 1: got to get you back. Eric Clark, portfolio manager at
Speaker 1: Rational Dynamic Brands Fund. Thanks for listening to Bloomberg Business Week.
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