1 00:00:00,840 --> 00:00:04,000 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:05,280 Speaker 1: my co host Matt Miller. 3 00:00:05,640 --> 00:00:09,600 Speaker 2: Every business day we bring you interviews from CEOs, market pros, 4 00:00:09,720 --> 00:00:13,600 Speaker 2: and Bloomberg experts, along with essential market moven news. 5 00:00:14,160 --> 00:00:17,279 Speaker 1: Bind the Bloomberg Markets Podcast on Apple Podcasts or wherever 6 00:00:17,400 --> 00:00:20,400 Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast. 7 00:00:20,400 --> 00:00:23,239 Speaker 1: Matt Miller, Paul Sweeney here in a Bloomberg Interactive Broker studio. 8 00:00:23,280 --> 00:00:25,279 Speaker 3: We are streaming on YouTube. Go check it out there. 9 00:00:25,640 --> 00:00:28,960 Speaker 1: Search Bloomberg Global News and you'll get the feed there. 10 00:00:29,280 --> 00:00:30,280 Speaker 3: Nancy Curtin joins us. 11 00:00:30,320 --> 00:00:32,519 Speaker 1: She is a partner Global CEO and Head of Investment 12 00:00:32,520 --> 00:00:36,479 Speaker 1: Advisory at Alti Global, based in London, but joining us 13 00:00:36,479 --> 00:00:38,880 Speaker 1: live here in our Bloomberg Interactive Broker studio. Nancy, thanks 14 00:00:38,880 --> 00:00:41,479 Speaker 1: so much for joining us here. I'm just gonna put 15 00:00:41,560 --> 00:00:44,159 Speaker 1: I'm gonna ask you guys for your big picture perspective, 16 00:00:44,159 --> 00:00:47,640 Speaker 1: because twenty twenty two you couldn't hide anywhere. Equities got crushed, 17 00:00:47,680 --> 00:00:50,960 Speaker 1: bonds you got crushed This year better, particularly if you're 18 00:00:51,000 --> 00:00:54,440 Speaker 1: in some big cap tech names. How are you, guys 19 00:00:54,520 --> 00:00:57,000 Speaker 1: at ALTI Global looking at the market right now? 20 00:00:57,480 --> 00:00:59,960 Speaker 4: Okay, Well, first of all, thank you very much for 21 00:01:00,120 --> 00:01:03,000 Speaker 4: having me. Delighted to be here. First of all, we 22 00:01:03,200 --> 00:01:05,520 Speaker 4: entered twenty twenty three thinking it would be a better 23 00:01:05,680 --> 00:01:08,720 Speaker 4: year for risk assets. You know, back to back declines 24 00:01:08,800 --> 00:01:11,600 Speaker 4: in stocks and bonds quite unusual. It's only happened about 25 00:01:11,640 --> 00:01:13,920 Speaker 4: two percent of the dime in one hundred years. And 26 00:01:14,000 --> 00:01:17,440 Speaker 4: also sentiment was incredibly verish. But where are we now, 27 00:01:17,520 --> 00:01:20,560 Speaker 4: because now the market has risen, we've remain invested throughout 28 00:01:20,560 --> 00:01:24,560 Speaker 4: the year. Actually we've increased risk exposure slightly. So where 29 00:01:24,560 --> 00:01:27,440 Speaker 4: do we go from here? Look, trees don't grow into 30 00:01:27,520 --> 00:01:30,000 Speaker 4: the skies, So the first comment is, you know, don't 31 00:01:30,000 --> 00:01:33,080 Speaker 4: expect markets to be in a linear trend upward from here. 32 00:01:33,440 --> 00:01:35,840 Speaker 4: And we've seen some wobbles already this morning. That is 33 00:01:35,959 --> 00:01:40,440 Speaker 4: healthy a consolidation for markets. But what do we think 34 00:01:40,680 --> 00:01:43,959 Speaker 4: we think, Look, the Fed will be successful in bringing 35 00:01:44,000 --> 00:01:48,240 Speaker 4: inflation down. We already see some encouraging signs. Headline inflation 36 00:01:48,400 --> 00:01:52,640 Speaker 4: three percent remembers nine percent a year ago, so that's encouraging. 37 00:01:52,680 --> 00:01:53,880 Speaker 5: There's some sticky bits. 38 00:01:54,080 --> 00:01:56,600 Speaker 4: In core inflation, but we do think the Fed will 39 00:01:56,640 --> 00:02:00,600 Speaker 4: be successful in bringing inflation down. And looking to twenty 40 00:02:00,600 --> 00:02:02,640 Speaker 4: twenty four, which is what we'll start to do a 41 00:02:02,640 --> 00:02:05,360 Speaker 4: couple of weeks away September, we start to look forward 42 00:02:05,360 --> 00:02:09,240 Speaker 4: to next year. We think the outlook for a FED pause, 43 00:02:09,240 --> 00:02:13,440 Speaker 4: if not pivot, is encouraging for risk assets. 44 00:02:13,480 --> 00:02:16,119 Speaker 2: But because of a recession, right, I mean, the FED 45 00:02:16,160 --> 00:02:18,600 Speaker 2: can't raise rates five hundred and fifty bases points without 46 00:02:18,600 --> 00:02:19,840 Speaker 2: pushing us into a recession. 47 00:02:20,480 --> 00:02:24,720 Speaker 4: You know, let's talk about the reality of the data 48 00:02:24,720 --> 00:02:25,720 Speaker 4: coming in has. 49 00:02:25,680 --> 00:02:27,280 Speaker 5: Been incredibly encouraging. 50 00:02:27,720 --> 00:02:30,200 Speaker 4: I can't say that there may not be a mild recession, 51 00:02:30,480 --> 00:02:32,840 Speaker 4: but I'll tell you the soft landing narrative is getting 52 00:02:32,880 --> 00:02:36,679 Speaker 4: some increased credibility from the economic data. Let's just take 53 00:02:36,680 --> 00:02:40,160 Speaker 4: a first look at the consumption numbers. Pretty strong. Have 54 00:02:40,240 --> 00:02:43,880 Speaker 4: you traveled lately? I mean it's boomy, Okay, so you 55 00:02:43,880 --> 00:02:47,080 Speaker 4: know the consumer still has pent up savings from the pandemic. 56 00:02:47,280 --> 00:02:51,400 Speaker 4: They are using this to travel and experience obviously goods 57 00:02:52,040 --> 00:02:55,760 Speaker 4: less so. But actually, we think the interesting thing this 58 00:02:55,919 --> 00:02:59,080 Speaker 4: year is the US economy has been much less interest 59 00:02:59,160 --> 00:03:00,079 Speaker 4: rates since. 60 00:03:00,440 --> 00:03:01,560 Speaker 5: What do I mean by that? 61 00:03:01,960 --> 00:03:06,520 Speaker 4: Seventy five percent of mortgages over thirty years are below 62 00:03:06,720 --> 00:03:09,160 Speaker 4: four percent. In other words, they locked in lower rates 63 00:03:09,200 --> 00:03:12,880 Speaker 4: a couple of years ago, companies the same things locked 64 00:03:12,919 --> 00:03:16,679 Speaker 4: in lower interest rates, net interest cost us a percentage 65 00:03:16,680 --> 00:03:21,760 Speaker 4: of profitability has been declining, not rising, declining. Then we 66 00:03:21,800 --> 00:03:24,400 Speaker 4: have some fiscal spending one and a half trillion. These 67 00:03:24,400 --> 00:03:28,000 Speaker 4: are multi year programs, but that's additive. And finally, one 68 00:03:28,000 --> 00:03:31,240 Speaker 4: of our long term themes is we think that companies 69 00:03:31,320 --> 00:03:35,320 Speaker 4: will be investing, capex is likely to increase, and that 70 00:03:35,360 --> 00:03:39,360 Speaker 4: will be a support for economic growth looking forward. So 71 00:03:39,680 --> 00:03:42,400 Speaker 4: yet we could have a mild recession. But I have 72 00:03:42,480 --> 00:03:45,200 Speaker 4: to say the soft landing is getting a lot of 73 00:03:45,280 --> 00:03:47,160 Speaker 4: validation from the economic numbers. 74 00:03:47,400 --> 00:03:49,200 Speaker 2: I have to push back on that. Paul Go, you 75 00:03:49,240 --> 00:03:50,840 Speaker 2: don't want to though, right because you're hoping for a 76 00:03:50,960 --> 00:03:51,520 Speaker 2: soft landing. 77 00:03:52,040 --> 00:03:52,440 Speaker 3: I'm all in. 78 00:03:52,560 --> 00:03:54,920 Speaker 2: I just feel like, you know, the curve, the three 79 00:03:55,000 --> 00:03:59,840 Speaker 2: month ten year inversion is typically not this wrong. We've 80 00:03:59,880 --> 00:04:04,080 Speaker 2: got M two money supply contraction and Gary shillings that 81 00:04:04,120 --> 00:04:05,440 Speaker 2: we got the I just so I was hanging out 82 00:04:05,440 --> 00:04:10,520 Speaker 2: with Gary Shilling on Sunday. But the thing is, I think, 83 00:04:10,880 --> 00:04:13,960 Speaker 2: you know, the wealthy people might still have savings, but 84 00:04:14,040 --> 00:04:17,120 Speaker 2: I feel like the bottom eighty percent maybe don't have 85 00:04:17,240 --> 00:04:19,920 Speaker 2: any left, and we could be getting to the edge 86 00:04:19,920 --> 00:04:20,400 Speaker 2: of a cliff. 87 00:04:20,400 --> 00:04:21,200 Speaker 3: Here for them. 88 00:04:21,880 --> 00:04:26,279 Speaker 4: Well, let's go into the capex spend because we haven't 89 00:04:26,320 --> 00:04:30,080 Speaker 4: had capital expenditures in over a decade. Like companies, why 90 00:04:30,120 --> 00:04:32,240 Speaker 4: you know, why do you need to invest when labor 91 00:04:32,320 --> 00:04:36,160 Speaker 4: costs are like really low and money's free and commodity 92 00:04:36,160 --> 00:04:38,880 Speaker 4: prices are a week But we think the companies will 93 00:04:38,920 --> 00:04:41,479 Speaker 4: be investing. This is one of the surprises we think 94 00:04:41,520 --> 00:04:42,920 Speaker 4: for economic growth ahead. 95 00:04:43,960 --> 00:04:44,440 Speaker 5: Already. 96 00:04:44,480 --> 00:04:48,080 Speaker 4: Capex in the second quarter GDP number was up ten percent. 97 00:04:48,440 --> 00:04:51,560 Speaker 4: In the recent second quarter earnings, companies in the S 98 00:04:51,560 --> 00:04:55,080 Speaker 4: and P reported a fifteen percent increasing capex. Why do 99 00:04:55,160 --> 00:04:58,320 Speaker 4: I go on about capex because it expands the productive 100 00:04:58,440 --> 00:05:02,080 Speaker 4: potential of the economy to surprise on the upside. And 101 00:05:02,120 --> 00:05:05,359 Speaker 4: by the way, did you see the labor productivity numbers 102 00:05:05,800 --> 00:05:09,200 Speaker 4: three point seven percent? Let me see three point seven percent. 103 00:05:09,360 --> 00:05:11,560 Speaker 4: That's up from one point two in the first quarter. 104 00:05:11,880 --> 00:05:16,960 Speaker 4: And remember labor productivity is a subtraction from inflation to 105 00:05:17,080 --> 00:05:19,960 Speaker 4: get your unit labor costs. Okay, so let's go back 106 00:05:19,960 --> 00:05:22,880 Speaker 4: to your inverted deal curve and decline and money supply. Sure, 107 00:05:23,160 --> 00:05:27,480 Speaker 4: these are normally harbingers of recessionary activity, but I would 108 00:05:27,480 --> 00:05:29,839 Speaker 4: also point to the fact that eal curves have begun 109 00:05:29,880 --> 00:05:32,479 Speaker 4: to steepen in the last week or so. We think 110 00:05:32,520 --> 00:05:35,400 Speaker 4: this will be a trend that will continue to see. 111 00:05:35,760 --> 00:05:37,800 Speaker 4: And as I said, we think there are some solid 112 00:05:37,839 --> 00:05:39,720 Speaker 4: things that will support economic growth that. 113 00:05:39,800 --> 00:05:41,400 Speaker 5: Weren't there in the past. 114 00:05:41,760 --> 00:05:45,600 Speaker 4: Keep a close eye on capex, on shoine of manufacturing activity, 115 00:05:45,640 --> 00:05:49,799 Speaker 4: spending on jen Ai, spending on energy efficiency, and taking 116 00:05:49,800 --> 00:05:51,359 Speaker 4: advantage of the fiscal stimulus. 117 00:05:51,400 --> 00:05:55,320 Speaker 1: All right, so I've been overweight all the Miracle seven stocks, 118 00:05:55,400 --> 00:05:58,760 Speaker 1: so I've just been killing it. Can I, now, you know, 119 00:05:59,080 --> 00:06:02,279 Speaker 1: change the asset out and maybe go smaller, MidCap, try 120 00:06:02,279 --> 00:06:05,599 Speaker 1: to take advantage of increased capital spending, increased economic growth. 121 00:06:05,600 --> 00:06:08,560 Speaker 1: Can I take my profits in those big names. 122 00:06:08,720 --> 00:06:12,040 Speaker 4: Well, I wouldn't take your profits, right because we really 123 00:06:12,320 --> 00:06:15,680 Speaker 4: you know, the infrastructure layer of Jenai is in the 124 00:06:15,720 --> 00:06:19,159 Speaker 4: early innings here. I would try to look more broadly 125 00:06:19,240 --> 00:06:22,760 Speaker 4: beyond the Magnificent seven, those other companies that will contribute 126 00:06:22,800 --> 00:06:26,280 Speaker 4: to development of the infrastructure layer. We can't have Jenai 127 00:06:26,440 --> 00:06:29,240 Speaker 4: and large language models without an infrastructure layer. So we 128 00:06:29,320 --> 00:06:32,720 Speaker 4: do need a lot of building there. But you're right, 129 00:06:33,240 --> 00:06:36,600 Speaker 4: you know they're expensive. They've discounted a lot of good news, 130 00:06:36,880 --> 00:06:40,200 Speaker 4: and so what we've done is we've leaned into the underperformers, 131 00:06:40,680 --> 00:06:45,279 Speaker 4: particularly MidCap, less small cap, MidCap, more quality oriented, less leverage, 132 00:06:46,000 --> 00:06:49,159 Speaker 4: more exposed to what I call this onshine of manufacturing 133 00:06:49,279 --> 00:06:53,120 Speaker 4: theme cap x expend et cetera. So we've leaned into 134 00:06:53,360 --> 00:06:57,039 Speaker 4: value and MidCap because they're forty percent cheaper than you are, 135 00:06:57,120 --> 00:07:01,400 Speaker 4: Magnificent seven, and they trade at multi decade discounts versus 136 00:07:01,440 --> 00:07:03,919 Speaker 4: history and large caps as well. So that's one of 137 00:07:03,920 --> 00:07:05,440 Speaker 4: the things that we've done more recently. 138 00:07:06,160 --> 00:07:07,560 Speaker 2: Maybe just buy the equal weight to S and P 139 00:07:07,640 --> 00:07:08,200 Speaker 2: five hundred. 140 00:07:08,600 --> 00:07:09,240 Speaker 3: That's so fun. 141 00:07:09,760 --> 00:07:12,320 Speaker 2: I mean, if you think the rest, if you think 142 00:07:12,360 --> 00:07:14,320 Speaker 2: the rest of the stocks are going to catch up 143 00:07:14,320 --> 00:07:16,640 Speaker 2: to your mech spw ring, Yeah, equal weighted. 144 00:07:16,680 --> 00:07:19,200 Speaker 1: Okay, all right, So what are some you know, we 145 00:07:19,280 --> 00:07:22,120 Speaker 1: had the news today Moody's kind of dumping on the 146 00:07:22,160 --> 00:07:22,640 Speaker 1: banks again. 147 00:07:22,680 --> 00:07:24,160 Speaker 3: It seems like kind of old news. 148 00:07:24,720 --> 00:07:27,800 Speaker 1: How concerned are you at all with the US banking 149 00:07:28,000 --> 00:07:30,520 Speaker 1: system or maybe the global banking I'm sorry, where. 150 00:07:30,360 --> 00:07:32,800 Speaker 5: Was Moody's back in March? I'm sorry? 151 00:07:32,960 --> 00:07:36,200 Speaker 4: I mean, like months later we wake up and say, 152 00:07:36,280 --> 00:07:39,320 Speaker 4: the small and regional banks have a bit of a well, 153 00:07:39,320 --> 00:07:41,520 Speaker 4: there's you know, they're funding costs of risen and they've 154 00:07:41,520 --> 00:07:44,440 Speaker 4: got exposure to commercial real estate a trillion and a 155 00:07:44,480 --> 00:07:44,960 Speaker 4: half of that. 156 00:07:44,960 --> 00:07:46,840 Speaker 5: That remains a risk, right, but. 157 00:07:46,840 --> 00:07:50,000 Speaker 4: We've known that risk since March. That hasn't prevented markets 158 00:07:50,040 --> 00:07:53,680 Speaker 4: from moving higher. We think this is a multi year development. 159 00:07:53,680 --> 00:07:55,680 Speaker 4: In other words, we're we're not going to crash overnight 160 00:07:56,080 --> 00:07:58,840 Speaker 4: from commercial real estate. But I do wonder where these 161 00:07:58,960 --> 00:08:02,000 Speaker 4: rating agencies were back in March while we're doing the 162 00:08:02,000 --> 00:08:02,960 Speaker 4: downgrades now. 163 00:08:03,360 --> 00:08:05,400 Speaker 1: All right, So that's a way of saying that you're 164 00:08:05,440 --> 00:08:08,160 Speaker 1: not overly concerned about the US banking system or the 165 00:08:08,200 --> 00:08:09,240 Speaker 1: regional bank It is. 166 00:08:09,400 --> 00:08:09,720 Speaker 5: It is. 167 00:08:09,880 --> 00:08:13,560 Speaker 4: Look, you know, banking is hugely important to economic growth, 168 00:08:13,600 --> 00:08:15,960 Speaker 4: and so you know regional banks are you know where 169 00:08:16,000 --> 00:08:19,160 Speaker 4: you go small and medium sized businesses. And we do 170 00:08:19,200 --> 00:08:21,480 Speaker 4: think lending will be more constrained. We've seen that in 171 00:08:21,520 --> 00:08:24,080 Speaker 4: the SLEWS number seen your Loan Officer survey have come 172 00:08:24,120 --> 00:08:26,440 Speaker 4: down a bit. But we don't think it's enough to 173 00:08:26,720 --> 00:08:30,040 Speaker 4: slow the economy certainly into a deep recession, right, you know, 174 00:08:30,320 --> 00:08:34,599 Speaker 4: mild recession, slow down, soft landing. It's all a bit nuanced. 175 00:08:34,880 --> 00:08:38,000 Speaker 4: But don't forget cap expending, which we think will. 176 00:08:37,840 --> 00:08:40,160 Speaker 1: Be sad is a takeaway from today, No question about it. 177 00:08:40,400 --> 00:08:42,880 Speaker 1: You're based in London. How are things in London? Because 178 00:08:42,880 --> 00:08:44,079 Speaker 1: I'm not going because it's too crowded. 179 00:08:45,280 --> 00:08:48,200 Speaker 4: Okay, tourism is on fire. You go down Region Street, 180 00:08:48,240 --> 00:08:51,400 Speaker 4: you can't even move. But look London, as I call 181 00:08:51,520 --> 00:08:55,920 Speaker 4: a special child category. It's got lots of issues from 182 00:08:55,920 --> 00:08:59,319 Speaker 4: Brexit to higher level of inflation, to slower growth to 183 00:09:00,000 --> 00:09:03,760 Speaker 4: have you seen interest rates? Ah, God, don't get me started. 184 00:09:03,800 --> 00:09:07,080 Speaker 4: It also has you know, a stock market that's very 185 00:09:07,160 --> 00:09:10,800 Speaker 4: commodity and oil sensitive and bank sensitive. 186 00:09:10,880 --> 00:09:12,880 Speaker 5: So it's a bit of a special child. 187 00:09:13,200 --> 00:09:13,280 Speaker 6: Now. 188 00:09:13,400 --> 00:09:16,520 Speaker 4: In terms of international exposure, we like Europe much more. 189 00:09:16,559 --> 00:09:20,680 Speaker 4: We're getting exposure to industrial shares, cappac spend, luxury still 190 00:09:20,720 --> 00:09:24,040 Speaker 4: continues to be quite strong. Our positive vertings growth in 191 00:09:24,080 --> 00:09:27,319 Speaker 4: Europe despite the fact that economic growth has been pretty muted. 192 00:09:27,840 --> 00:09:29,880 Speaker 5: So that's been where we've had exposure. 193 00:09:30,120 --> 00:09:31,640 Speaker 3: All right, Nancy, thanks so much for coming in. 194 00:09:31,679 --> 00:09:34,679 Speaker 1: Really appreciate you coming in live into our Bloomorg Interactive 195 00:09:34,720 --> 00:09:35,400 Speaker 1: Broker studio. 196 00:09:35,800 --> 00:09:36,800 Speaker 3: What's our takeaway today? 197 00:09:36,880 --> 00:09:39,080 Speaker 2: We have to get Nancy back, is my takeaway. My 198 00:09:39,120 --> 00:09:41,520 Speaker 2: takeaways We have to get her back. But Capex it's 199 00:09:41,520 --> 00:09:42,360 Speaker 2: on that keepech for sure. 200 00:09:42,520 --> 00:09:45,040 Speaker 1: Nancy's a Partner Global CIO head of Investment Advisor read 201 00:09:45,080 --> 00:09:47,640 Speaker 1: Alte Global based in London, but again joining us. 202 00:09:47,520 --> 00:09:49,719 Speaker 3: Here in our Bloomberg studios and Eyork. We appreciate that. 203 00:09:50,760 --> 00:09:51,960 Speaker 7: You're listening to the team. 204 00:09:52,320 --> 00:09:55,680 Speaker 8: Ken's our live program Bloomberg Markets weekdays at ten am 205 00:09:55,720 --> 00:09:59,120 Speaker 8: Eastern on Bloomberg dot Com, the iHeartRadio app, and the 206 00:09:59,120 --> 00:10:03,000 Speaker 8: Bloomberg Business or listen on demand wherever you get your podcasts. 207 00:10:05,440 --> 00:10:08,520 Speaker 1: Matt Miller, Paul Sweeney here in the Bloomberg Interactor Broker Studio. Yes, 208 00:10:08,559 --> 00:10:10,440 Speaker 1: we are streaming live on YouTube and go over and 209 00:10:10,480 --> 00:10:15,000 Speaker 1: check it out. Just search Bloomberg Global News. Let's talk transportationation, 210 00:10:15,120 --> 00:10:18,440 Speaker 1: Let's talk trucks, all that fun stuff. Lee Claskow joins us. 211 00:10:18,440 --> 00:10:21,679 Speaker 1: He sector head Senior annalys Freight, Transportation and Logistics. That's 212 00:10:21,679 --> 00:10:23,400 Speaker 1: a big title. It's a lot bigger than when I 213 00:10:23,440 --> 00:10:26,240 Speaker 1: knew him. But he's a Bloomberg intelligence. He does it all, 214 00:10:26,280 --> 00:10:28,360 Speaker 1: from the ships to the trucks, to the to the 215 00:10:28,400 --> 00:10:30,120 Speaker 1: railroads and all that stuff in between. 216 00:10:30,960 --> 00:10:31,880 Speaker 3: Ups Lee. 217 00:10:32,240 --> 00:10:36,200 Speaker 1: United Parcel Service Big Brown had some disappointing numbers. My 218 00:10:36,400 --> 00:10:40,120 Speaker 1: question is are there disappointing numbers and their guidance Is 219 00:10:40,160 --> 00:10:42,440 Speaker 1: it a result of their new Teamsters contract or is 220 00:10:42,440 --> 00:10:46,640 Speaker 1: it reflecting economy slowing down? Maybe people aren't getting as 221 00:10:46,679 --> 00:10:48,640 Speaker 1: many boxes as they used to. What's driving it? 222 00:10:48,840 --> 00:10:48,960 Speaker 9: Right? 223 00:10:49,000 --> 00:10:50,640 Speaker 10: Well, first off, if you can call me can whenever 224 00:10:50,679 --> 00:10:51,000 Speaker 10: you want. 225 00:10:51,040 --> 00:10:53,640 Speaker 3: But you know, they had actually. 226 00:10:53,320 --> 00:10:55,880 Speaker 2: A barn of fire, Lee Clasgow barn of fire. 227 00:10:56,600 --> 00:10:59,720 Speaker 10: They had actually a pretty decent print on the second quarter, 228 00:10:59,800 --> 00:11:03,120 Speaker 10: but they did guide down and you know, we expect 229 00:11:03,400 --> 00:11:07,480 Speaker 10: the increase in costs from that new labor agreement is 230 00:11:07,520 --> 00:11:10,600 Speaker 10: going to be maybe a dollar in EPs headwind. That's 231 00:11:10,679 --> 00:11:14,160 Speaker 10: kind of really how we're thinking about it. Obviously, that's 232 00:11:14,200 --> 00:11:16,760 Speaker 10: assuming they're not going to be able to mitigate that 233 00:11:17,000 --> 00:11:22,160 Speaker 10: through productivity gains pricing, and that is what they're going 234 00:11:22,240 --> 00:11:25,600 Speaker 10: to do. You know, management said that probably in the 235 00:11:25,640 --> 00:11:27,199 Speaker 10: spring they're gonna they're gonna. 236 00:11:26,960 --> 00:11:29,440 Speaker 11: Probably lay out how they're going to get back. 237 00:11:29,280 --> 00:11:32,760 Speaker 10: To twelve percent margins on their domestic business. And that's 238 00:11:32,800 --> 00:11:35,920 Speaker 10: something that you know, we're relatively bullish about because UPS 239 00:11:36,000 --> 00:11:40,040 Speaker 10: has shown their ability to really embrace not only technology, 240 00:11:40,240 --> 00:11:43,840 Speaker 10: but also to go into verticals or businesses that are 241 00:11:43,880 --> 00:11:46,640 Speaker 10: a lot more profitable, like healthcare or the small to 242 00:11:46,720 --> 00:11:47,840 Speaker 10: mid sized shipper. 243 00:11:49,040 --> 00:11:52,080 Speaker 2: You know, I heard you on surveillance this morning talking 244 00:11:52,080 --> 00:11:56,360 Speaker 2: about this ups story as well as the Yellow Yellow story. 245 00:11:57,160 --> 00:12:00,800 Speaker 2: And I not note that they got emergency hunting last night. 246 00:12:00,920 --> 00:12:03,040 Speaker 2: Did that's seventeen percent to nice? 247 00:12:03,240 --> 00:12:06,000 Speaker 3: Is that not usury? Is that not a usury level? 248 00:12:06,600 --> 00:12:06,840 Speaker 6: Yeah? 249 00:12:06,880 --> 00:12:09,320 Speaker 10: I mean what I know, I don't cover Yellow, but 250 00:12:09,360 --> 00:12:11,520 Speaker 10: what I know about the deal is that it's just 251 00:12:11,760 --> 00:12:14,560 Speaker 10: it's debt, so just to finance them while they're trying 252 00:12:14,600 --> 00:12:17,079 Speaker 10: to sell everything. The government is supposed to be made 253 00:12:17,120 --> 00:12:20,760 Speaker 10: whole before they're able to get paid on that seventeen percent. 254 00:12:20,880 --> 00:12:22,760 Speaker 11: So I mean, what do they have refinance? 255 00:12:23,000 --> 00:12:26,040 Speaker 2: Just just selling their trucks and warehouses, right because they're 256 00:12:26,080 --> 00:12:28,920 Speaker 2: not any customer that was going to use Yellow. As 257 00:12:28,960 --> 00:12:31,280 Speaker 2: soon as they heard there was going to be a strike, 258 00:12:31,400 --> 00:12:33,520 Speaker 2: was like, let's find another trucker right now. 259 00:12:33,760 --> 00:12:36,319 Speaker 11: So yeah, this is not a restructuring. This is liquidation. 260 00:12:36,679 --> 00:12:39,120 Speaker 10: And their trucks are old, their trailers are old. If 261 00:12:39,120 --> 00:12:41,640 Speaker 10: you see them on the road relative to its peers, 262 00:12:41,720 --> 00:12:44,679 Speaker 10: you'd be like, that's not a great looking truck. They're 263 00:12:44,800 --> 00:12:47,000 Speaker 10: very old. They've had issues with that for. 264 00:12:46,960 --> 00:12:47,559 Speaker 7: A long time. 265 00:12:47,720 --> 00:12:50,679 Speaker 10: They don't own a lot of the facilities that they operated, 266 00:12:50,679 --> 00:12:52,960 Speaker 10: and they lease a lot of them, but there are 267 00:12:53,000 --> 00:12:54,960 Speaker 10: going to be some facilities that they could they could 268 00:12:55,000 --> 00:12:57,599 Speaker 10: sell and to raise that money to pay back and 269 00:12:57,679 --> 00:13:01,679 Speaker 10: only the government, but also that new round of financing. 270 00:13:01,720 --> 00:13:03,160 Speaker 2: All right, So we'll wrap that up and put it 271 00:13:03,200 --> 00:13:07,240 Speaker 2: to the side. In terms of ups, Can they not 272 00:13:07,520 --> 00:13:10,080 Speaker 2: raise prices significantly. 273 00:13:09,640 --> 00:13:10,160 Speaker 11: Well, they can. 274 00:13:10,520 --> 00:13:13,520 Speaker 10: Well, let's take a step back. They can raise prices 275 00:13:15,000 --> 00:13:18,840 Speaker 10: which will mitigate the inflationary pressures that they're facing. The 276 00:13:18,920 --> 00:13:21,440 Speaker 10: first year of the new labor contract, there's a big 277 00:13:21,480 --> 00:13:23,440 Speaker 10: step up in costs for them, so it kind of 278 00:13:23,480 --> 00:13:25,360 Speaker 10: barbells in the first year. In the five year in 279 00:13:25,440 --> 00:13:27,720 Speaker 10: terms of the step up, it's around a three point 280 00:13:27,800 --> 00:13:30,480 Speaker 10: three k gar in terms of inflationary pressure, and that 281 00:13:30,520 --> 00:13:33,440 Speaker 10: includes not only the wages that they're getting paid, but 282 00:13:33,520 --> 00:13:36,080 Speaker 10: also the benefits. So if you look at it through 283 00:13:36,120 --> 00:13:38,800 Speaker 10: the whole five years, it's really not that bad. But 284 00:13:38,840 --> 00:13:40,920 Speaker 10: the first step up is going to be a big headwind. 285 00:13:41,120 --> 00:13:43,079 Speaker 10: So you know, we think that they can go back 286 00:13:43,080 --> 00:13:44,800 Speaker 10: to earnings growth in twenty twenty four. 287 00:13:45,520 --> 00:13:47,360 Speaker 3: Matt's wondering what Caker is, but we'll get back to 288 00:13:47,400 --> 00:13:47,760 Speaker 3: that later. 289 00:13:47,960 --> 00:13:50,160 Speaker 2: I mean, I mean, this is just one of those 290 00:13:50,160 --> 00:13:53,800 Speaker 2: phrases that you throw around and I think it's another 291 00:13:53,840 --> 00:13:56,240 Speaker 2: thing that I always forget, But I'll. 292 00:13:56,120 --> 00:13:58,480 Speaker 10: Let compound an annual growth rate. 293 00:13:58,600 --> 00:14:00,760 Speaker 2: Okay, bo, there you go. You to bring it back 294 00:14:00,840 --> 00:14:02,720 Speaker 2: up in this next question. I think a lot of 295 00:14:02,720 --> 00:14:04,760 Speaker 2: listeners are like, hey, thanks Matt, Thanks Matt. 296 00:14:04,760 --> 00:14:05,280 Speaker 7: I didn't know what. 297 00:14:05,280 --> 00:14:08,080 Speaker 3: Kegar was either, exactly Matt's favorite. 298 00:14:08,080 --> 00:14:10,240 Speaker 1: One of Matt's favorite functions on the Bloomberg Kriminal is 299 00:14:10,559 --> 00:14:13,080 Speaker 1: comp get comparative returns. 300 00:14:13,080 --> 00:14:14,080 Speaker 3: So I put that up. 301 00:14:13,960 --> 00:14:17,600 Speaker 1: For UPS and FedEx. UPS over the last five years 302 00:14:17,640 --> 00:14:20,720 Speaker 1: is compounding and annual growth in the stock price eleven 303 00:14:20,760 --> 00:14:22,640 Speaker 1: point seventy five percent, a little bit better than they 304 00:14:22,680 --> 00:14:25,720 Speaker 1: s and p FedEx only three point four percent. Why 305 00:14:25,760 --> 00:14:29,240 Speaker 1: has UPS been rewarded more in the stock market versus FedEx? 306 00:14:29,320 --> 00:14:30,720 Speaker 3: Is it a different model? 307 00:14:31,120 --> 00:14:33,920 Speaker 10: Yeah, it really depends on the timeframe you're looking at, 308 00:14:33,960 --> 00:14:37,320 Speaker 10: Like this year, FedEx has been on fire relative to UPS. 309 00:14:37,320 --> 00:14:39,760 Speaker 2: But I like the comp function because it just defaults 310 00:14:39,800 --> 00:14:42,000 Speaker 2: to five years, and I think that's a great time 311 00:14:42,040 --> 00:14:42,920 Speaker 2: period to look at. 312 00:14:43,080 --> 00:14:46,840 Speaker 10: And over that five year period, you know, UPS started 313 00:14:47,000 --> 00:14:50,600 Speaker 10: right sizing their network, selling businesses that maybe didn't make 314 00:14:50,600 --> 00:14:52,720 Speaker 10: a lot of money, like they're less than truckload business. 315 00:14:52,720 --> 00:14:55,960 Speaker 10: The same business that Yellow was in LTL LTL less 316 00:14:55,960 --> 00:14:58,800 Speaker 10: than truckload and they were a unionized carrier, and they 317 00:14:58,800 --> 00:15:02,040 Speaker 10: were they were getting on a good year one hundreds 318 00:15:02,040 --> 00:15:04,120 Speaker 10: to two hundred basis points in margins. It was just 319 00:15:04,400 --> 00:15:07,520 Speaker 10: not a great business. So they sold that. They're investing 320 00:15:07,560 --> 00:15:12,520 Speaker 10: heavenly in technology. They are automating their facilities, you know, 321 00:15:12,560 --> 00:15:15,760 Speaker 10: they're they're reducing the numbers of o's or mistakes like 322 00:15:15,760 --> 00:15:17,800 Speaker 10: if the wrong shipment goes on the wrong. 323 00:15:17,600 --> 00:15:20,840 Speaker 11: Truck by half. They're just they're. 324 00:15:20,640 --> 00:15:23,640 Speaker 10: Doing really just a great job in their investment cycle. 325 00:15:24,080 --> 00:15:26,520 Speaker 10: And not only that, like I said earlier, they're focusing 326 00:15:26,520 --> 00:15:30,320 Speaker 10: on more profitable businesses. They're focusing on the healthcare businesses 327 00:15:30,360 --> 00:15:32,000 Speaker 10: and the small to mid sized businesses. 328 00:15:32,240 --> 00:15:32,840 Speaker 6: They had a. 329 00:15:33,040 --> 00:15:35,600 Speaker 10: Somewhat of an outsider. She was a board member, Carol Toomey. 330 00:15:35,720 --> 00:15:37,640 Speaker 10: She came into CEO a couple of years ago. I 331 00:15:37,720 --> 00:15:40,000 Speaker 10: think it's like two years nep by now, and she's 332 00:15:40,040 --> 00:15:44,040 Speaker 10: really done an excellent job. People were very you know, 333 00:15:44,920 --> 00:15:47,520 Speaker 10: kind of not sure if she was the right person, 334 00:15:47,600 --> 00:15:51,920 Speaker 10: but she's proved all of her critics wrong and UPS 335 00:15:51,960 --> 00:15:54,280 Speaker 10: has really been operating on all cylinders. 336 00:15:54,360 --> 00:15:56,160 Speaker 2: But now if their costs are going to go up 337 00:15:56,440 --> 00:15:59,120 Speaker 2: and they have to raise prices. Does this give FedEx 338 00:15:59,120 --> 00:16:01,080 Speaker 2: a chance to take a way more share and do 339 00:16:01,200 --> 00:16:01,880 Speaker 2: better well? 340 00:16:02,040 --> 00:16:04,320 Speaker 10: UPS on their call this morning they called out that 341 00:16:04,560 --> 00:16:09,160 Speaker 10: about one point two million packages per day were diverted 342 00:16:09,240 --> 00:16:13,440 Speaker 10: because of the potential for the strike, and they said 343 00:16:13,440 --> 00:16:15,280 Speaker 10: about a third of that went to FedEx, about a 344 00:16:15,320 --> 00:16:17,200 Speaker 10: third of that went to the US Postal Service, and 345 00:16:17,320 --> 00:16:19,720 Speaker 10: another third once is regional carriers that you and I 346 00:16:19,760 --> 00:16:23,440 Speaker 10: probably don't know the names of smaller players, and you 347 00:16:23,480 --> 00:16:27,560 Speaker 10: know they will probably win back some of that freight FedEx. 348 00:16:27,840 --> 00:16:28,560 Speaker 11: Some of it might be. 349 00:16:28,480 --> 00:16:30,360 Speaker 10: Sticky, but at the end of the day, you know, 350 00:16:30,640 --> 00:16:33,640 Speaker 10: a shipper will use a particular FedEx or UPS not 351 00:16:33,680 --> 00:16:35,160 Speaker 10: just on price, but a lot of it has to 352 00:16:35,200 --> 00:16:37,360 Speaker 10: do its service. And if they were with UPS before 353 00:16:37,800 --> 00:16:39,880 Speaker 10: because of service, are probably going to go back to 354 00:16:40,000 --> 00:16:41,560 Speaker 10: UPS real quick. 355 00:16:42,040 --> 00:16:44,040 Speaker 3: Were we in a supply chain? Are we kind of fixed? 356 00:16:44,560 --> 00:16:45,920 Speaker 3: Do you think just a global supply chain? 357 00:16:46,000 --> 00:16:46,080 Speaker 7: Right? 358 00:16:46,120 --> 00:16:46,480 Speaker 3: What are something? 359 00:16:46,600 --> 00:16:47,400 Speaker 11: Is always it fixed? 360 00:16:47,440 --> 00:16:47,640 Speaker 8: Yeah? 361 00:16:47,920 --> 00:16:50,280 Speaker 10: No, because every week it's something new, right, Okay, Like 362 00:16:50,320 --> 00:16:54,360 Speaker 10: it's whether the Canadian West Coast ports just got you know, 363 00:16:54,400 --> 00:16:57,240 Speaker 10: that just ended, So there's always something different, you know, 364 00:16:57,280 --> 00:16:59,080 Speaker 10: the Panama Canal, there's not enough water for. 365 00:16:59,080 --> 00:16:59,880 Speaker 3: Ships, Is that right? 366 00:17:00,200 --> 00:17:00,320 Speaker 12: Uh? 367 00:17:00,440 --> 00:17:03,200 Speaker 10: Yeah, they have They have to operate with less freight 368 00:17:03,280 --> 00:17:05,480 Speaker 10: on them, and it makes it a lot more expensive 369 00:17:05,480 --> 00:17:07,320 Speaker 10: than to send the freight through the Panama Canal. 370 00:17:07,400 --> 00:17:09,399 Speaker 1: There's a great book I read about the building of 371 00:17:09,440 --> 00:17:10,920 Speaker 1: the Panama can I forget who wrote it, but it 372 00:17:11,000 --> 00:17:11,840 Speaker 1: is an awesome book. 373 00:17:12,000 --> 00:17:13,440 Speaker 3: It's a great story. Makes me I want to go 374 00:17:13,480 --> 00:17:14,240 Speaker 3: to the Panama. 375 00:17:13,920 --> 00:17:15,240 Speaker 11: Can app When did you read that? I'm going to 376 00:17:15,280 --> 00:17:16,520 Speaker 11: guess you read that twenty years ago. 377 00:17:16,560 --> 00:17:18,399 Speaker 3: No, couple three years ago, maybe before you. 378 00:17:18,480 --> 00:17:20,680 Speaker 7: There's a drought there the lake that fills it up. 379 00:17:20,840 --> 00:17:22,920 Speaker 7: Is that's the problem? All right? 380 00:17:22,920 --> 00:17:26,359 Speaker 1: Ten seconds, Leek clasical transportation analyst Bloomberg Intelligence joins us. 381 00:17:26,680 --> 00:17:29,800 Speaker 8: You're listening to the tape cans Are live program Bloomberg 382 00:17:29,840 --> 00:17:33,439 Speaker 8: Markets weekdays at ten am Eastern on Bloomberg Radio, the 383 00:17:33,480 --> 00:17:35,440 Speaker 8: tune in app, Bloomberg dot Com, and. 384 00:17:35,400 --> 00:17:36,720 Speaker 7: The Bloomberg Business App. 385 00:17:36,760 --> 00:17:39,600 Speaker 8: You can also listen live on Amazon Alexa from our 386 00:17:39,600 --> 00:17:44,000 Speaker 8: flagship New York station just say Alexa playing Bloomberg eleven thirty. 387 00:17:45,400 --> 00:17:46,720 Speaker 3: All right, what kind of the news today? 388 00:17:46,760 --> 00:17:48,639 Speaker 1: One of the news drivers this morning has been Moodies 389 00:17:48,640 --> 00:17:51,880 Speaker 1: downgrading the credit ratings of a bunch of the regional 390 00:17:52,040 --> 00:17:55,000 Speaker 1: super regional banks. It seems like where were you when 391 00:17:55,000 --> 00:17:57,879 Speaker 1: we needed your butt? Here we are Chris Whalen joins us, 392 00:17:57,960 --> 00:18:00,119 Speaker 1: Chairman of Whale and Global Advisors. We always look to 393 00:18:00,119 --> 00:18:03,320 Speaker 1: talk to Chris, particularly about the banks. I mean, Chris, 394 00:18:03,520 --> 00:18:06,120 Speaker 1: help us out. You're an expert in this rating stuff 395 00:18:06,560 --> 00:18:08,720 Speaker 1: in the banks. Chris, what do you think about Moodies 396 00:18:08,840 --> 00:18:09,880 Speaker 1: and their call here? 397 00:18:11,119 --> 00:18:14,960 Speaker 13: The Moody's action today was very specific. They were looking 398 00:18:15,000 --> 00:18:18,520 Speaker 13: at certain banks and they took the decision to downgrade them. 399 00:18:18,880 --> 00:18:21,240 Speaker 13: What I think, and that's going to come more. We're 400 00:18:21,240 --> 00:18:23,040 Speaker 13: going to see a lot more of this because they're 401 00:18:23,080 --> 00:18:27,880 Speaker 13: adjusting their entire ratings complex for banks to the changes 402 00:18:27,920 --> 00:18:30,840 Speaker 13: we see in the market and to the higher interest rates. 403 00:18:30,840 --> 00:18:34,840 Speaker 13: So the basil obviously is going to reduce profitability. So 404 00:18:34,880 --> 00:18:37,760 Speaker 13: there's a lot of negatives that they're adjusting to. But 405 00:18:37,840 --> 00:18:39,800 Speaker 13: the thing we have to be aware of is that 406 00:18:39,840 --> 00:18:42,760 Speaker 13: when you see a sovereign downgrade for the United States, 407 00:18:43,160 --> 00:18:45,040 Speaker 13: and we can no longer ignore a S and P 408 00:18:45,280 --> 00:18:47,280 Speaker 13: as we have for the past decade. Right, we have 409 00:18:47,320 --> 00:18:49,840 Speaker 13: two of them now, so everybody's going to have to 410 00:18:49,920 --> 00:18:53,359 Speaker 13: use double level plus instead of triple A. And what 411 00:18:53,400 --> 00:18:55,840 Speaker 13: that means is that the big banks, the ones that 412 00:18:55,920 --> 00:19:00,280 Speaker 13: get uplift because there's an assumption of sovereign support, are 413 00:19:00,359 --> 00:19:03,040 Speaker 13: going to go down a notch. And and I think 414 00:19:03,080 --> 00:19:05,680 Speaker 13: you can assume all the agencies will have to adjust. 415 00:19:06,400 --> 00:19:09,320 Speaker 13: In Japan they give you two notches for the big banks. 416 00:19:09,760 --> 00:19:12,080 Speaker 13: In Europe they give you two notches because there's an 417 00:19:12,119 --> 00:19:14,560 Speaker 13: assumption that they're going to bail them out. In the 418 00:19:14,720 --> 00:19:19,320 Speaker 13: US not so much. You know, if any man for why. 419 00:19:19,280 --> 00:19:22,760 Speaker 2: Not after what we just saw, you know, we got 420 00:19:22,920 --> 00:19:24,200 Speaker 2: we got dec. 421 00:19:24,119 --> 00:19:28,680 Speaker 13: You know, we're tempting fate. When we have politicians who 422 00:19:28,760 --> 00:19:31,960 Speaker 13: think they can borrow money forever and who go around 423 00:19:31,960 --> 00:19:36,160 Speaker 13: worried about global warming and ESG instead of doing their jobs, 424 00:19:36,600 --> 00:19:39,960 Speaker 13: then this is what happens. People in the Buiden administration 425 00:19:40,080 --> 00:19:43,400 Speaker 13: were terribly surprised. And it just shows you how how 426 00:19:43,760 --> 00:19:47,639 Speaker 13: there's a lack of seriousness in Washington on fiscal issues. 427 00:19:47,720 --> 00:19:50,600 Speaker 13: It's stunning on both sides. By the way, By the. 428 00:19:50,600 --> 00:19:53,199 Speaker 2: Way, Chris I was, I sat down with Gary Shielding 429 00:19:53,240 --> 00:19:56,600 Speaker 2: to talk about a lot of this stuff on Sunday afternoon, right, 430 00:19:56,680 --> 00:20:02,360 Speaker 2: And the one the one question or the one problem 431 00:20:02,359 --> 00:20:04,800 Speaker 2: that we don't really see clearly is the possibility of 432 00:20:04,800 --> 00:20:07,679 Speaker 2: a debt bomb. You know, if we're continually running trillion 433 00:20:07,760 --> 00:20:12,480 Speaker 2: dollar deficits, yeah, zero percent or at two or three percent, 434 00:20:12,640 --> 00:20:15,560 Speaker 2: it's no big deal. But once you climb to five 435 00:20:15,600 --> 00:20:18,159 Speaker 2: and a half to six, it starts to get worrisome. 436 00:20:18,520 --> 00:20:21,400 Speaker 2: So what point is it too difficult for the United 437 00:20:21,440 --> 00:20:23,120 Speaker 2: States to service it's growing debt. 438 00:20:24,800 --> 00:20:27,280 Speaker 13: Well, it's not just the United States. There's a whole 439 00:20:27,400 --> 00:20:31,199 Speaker 13: raft of sovereign issuers underneath the US, including all the 440 00:20:31,240 --> 00:20:35,160 Speaker 13: agencies you have, all the states and the cities which 441 00:20:35,240 --> 00:20:39,280 Speaker 13: ultimately depend on support from the federal government implicitly. Right, 442 00:20:39,800 --> 00:20:41,560 Speaker 13: So there's a lot going on. And if we do 443 00:20:41,640 --> 00:20:45,000 Speaker 13: a funding, say at the beginning of next year, where 444 00:20:45,040 --> 00:20:48,159 Speaker 13: we're also doing an emergency bailout for a couple of 445 00:20:48,200 --> 00:20:51,920 Speaker 13: cities that have been downgraded and can't issue bonds anymore 446 00:20:52,119 --> 00:20:55,080 Speaker 13: at the old spreads, right, So the pricing is going 447 00:20:55,119 --> 00:20:59,080 Speaker 13: to continue to change. Obviously throughout the whole complex. Pricing 448 00:20:59,160 --> 00:21:01,760 Speaker 13: is going up credit and then some of them are 449 00:21:01,800 --> 00:21:04,679 Speaker 13: going to be downgraded. I think New York City is 450 00:21:04,680 --> 00:21:07,720 Speaker 13: going to be downgraded. So we'll be back in the seventies, 451 00:21:07,880 --> 00:21:10,920 Speaker 13: you know, and I don't think the US is ready 452 00:21:10,920 --> 00:21:12,960 Speaker 13: for that because we have so much debt at the 453 00:21:13,000 --> 00:21:13,680 Speaker 13: federal level. 454 00:21:14,080 --> 00:21:16,000 Speaker 3: But it makes sense, you know what I thought. I 455 00:21:16,040 --> 00:21:17,560 Speaker 3: saw Amanda Gordon, who. 456 00:21:17,520 --> 00:21:22,840 Speaker 2: Covers like Hoidy Toydy parties, right, big charity events out 457 00:21:22,840 --> 00:21:25,880 Speaker 2: at the Hamptons and stuff. She had a piece out 458 00:21:26,440 --> 00:21:30,560 Speaker 2: covering John Paulson who talked about the rising crime that 459 00:21:30,600 --> 00:21:32,840 Speaker 2: he's witnessing here in New York and talking about how 460 00:21:32,840 --> 00:21:35,159 Speaker 2: all his friends are moving down to Florida. Then I 461 00:21:35,200 --> 00:21:39,119 Speaker 2: saw another piece that New York is going to open 462 00:21:39,400 --> 00:21:42,879 Speaker 2: a migrant relief center on Randall's Island for another I 463 00:21:42,880 --> 00:21:47,240 Speaker 2: think two thousand immigrants, but we're already supporting fifty seven 464 00:21:47,640 --> 00:21:52,119 Speaker 2: two hundred. If you have the big tax payers moving 465 00:21:52,160 --> 00:21:55,280 Speaker 2: to West Palm Beach and we're bringing in, you know, 466 00:21:55,400 --> 00:21:57,320 Speaker 2: tens of thousands of immigrants, is it going to be 467 00:21:57,560 --> 00:22:00,919 Speaker 2: a problem for our tax base and for rising cost. 468 00:22:01,520 --> 00:22:05,160 Speaker 13: Well, obviously, you know New York is predicated on having 469 00:22:05,200 --> 00:22:09,040 Speaker 13: a very strong commercial foundation. They're the ones who pay 470 00:22:09,040 --> 00:22:12,919 Speaker 13: for everything, all the infrastructure you see in New York City, 471 00:22:13,200 --> 00:22:17,880 Speaker 13: the metro everything. You can't do it as a residential community, man, 472 00:22:18,200 --> 00:22:21,000 Speaker 13: You just can't. There's not enough revenue. And if you 473 00:22:21,040 --> 00:22:25,040 Speaker 13: were to tax the owners of apartments or you could 474 00:22:25,040 --> 00:22:28,879 Speaker 13: call them tenants, really they are in the same boat. 475 00:22:29,080 --> 00:22:31,840 Speaker 13: You can't possibly tax them enough to pay for everything. 476 00:22:32,119 --> 00:22:35,520 Speaker 13: So I think you'll see reduction in services. The progressive 477 00:22:36,040 --> 00:22:39,119 Speaker 13: mandate that says everybody is owed housing and support as 478 00:22:39,119 --> 00:22:42,240 Speaker 13: soon as they show up, and you know a smile, right, 479 00:22:42,520 --> 00:22:45,120 Speaker 13: is going to change because I think all of these 480 00:22:45,200 --> 00:22:47,600 Speaker 13: legacy cities in the northern tier are going to have 481 00:22:47,640 --> 00:22:50,640 Speaker 13: to downsize rather dramatically. It's going to look like Detroit 482 00:22:51,240 --> 00:22:54,560 Speaker 13: because remember, you know these cities were here for industrial 483 00:22:54,600 --> 00:22:57,920 Speaker 13: purposes two centuries ago. Why are they here today? What's 484 00:22:57,960 --> 00:23:01,760 Speaker 13: their economic Aggressionale right, Texas knows why it's here today. 485 00:23:01,760 --> 00:23:04,119 Speaker 13: They're here to make money. But I'm not sure you 486 00:23:04,160 --> 00:23:06,159 Speaker 13: want to live down there. You know what's so funny 487 00:23:06,240 --> 00:23:08,120 Speaker 13: is a lot of my business friends have moved south 488 00:23:08,160 --> 00:23:11,439 Speaker 13: to Florida and Texas, but they don't spend the summer there. 489 00:23:11,640 --> 00:23:15,200 Speaker 2: No, all my friends who moved to Florida keep track 490 00:23:15,359 --> 00:23:16,919 Speaker 2: of the days that they're here in New York, like 491 00:23:17,320 --> 00:23:19,280 Speaker 2: I can't stay for another three days or else I'm 492 00:23:19,320 --> 00:23:19,880 Speaker 2: going to get text. 493 00:23:20,040 --> 00:23:23,679 Speaker 13: But listen, there are literally hundreds of thousands, if not 494 00:23:23,840 --> 00:23:27,400 Speaker 13: millions of people who work in mortgage finance and real 495 00:23:27,480 --> 00:23:30,080 Speaker 13: estate and everything else who have moved out of California 496 00:23:30,160 --> 00:23:32,800 Speaker 13: New York and have gone to Texas and Florida because 497 00:23:32,840 --> 00:23:36,760 Speaker 13: of cost. They literally cannot have a person servicing and 498 00:23:36,840 --> 00:23:41,359 Speaker 13: performing loan in California today. Too expensive. You might be 499 00:23:41,400 --> 00:23:44,600 Speaker 13: able to do distress assets, but you certainly can't do 500 00:23:44,680 --> 00:23:47,479 Speaker 13: bread and butter, you know, servicing, because it's just so 501 00:23:47,600 --> 00:23:51,120 Speaker 13: expensive to create that seat for that employee. Can't do it. 502 00:23:51,840 --> 00:23:53,800 Speaker 13: All right, Well, these states have to come up with 503 00:23:53,880 --> 00:23:56,399 Speaker 13: a reason to exist. I don't care whether it's California, 504 00:23:56,480 --> 00:23:59,240 Speaker 13: New York, Illinois. They all have to go back to 505 00:23:59,280 --> 00:24:01,679 Speaker 13: the drawing board, say why are we here? How do 506 00:24:01,720 --> 00:24:04,359 Speaker 13: we make money? You know? And that's gonna be a 507 00:24:04,400 --> 00:24:06,840 Speaker 13: tough conversation in New York. I think it's. 508 00:24:06,680 --> 00:24:09,480 Speaker 3: Probably gotta start in Washington, many would say. Chris Whalen. 509 00:24:10,240 --> 00:24:13,480 Speaker 1: Chris Whalen is a chairman Whale and Global Advisors. Give 510 00:24:13,560 --> 00:24:15,119 Speaker 1: us us some color here on kind of what we 511 00:24:15,160 --> 00:24:17,760 Speaker 1: heard from Moody chair at the bank downgrade and Chris 512 00:24:17,760 --> 00:24:19,600 Speaker 1: suggesting that it's not just the US government, but it 513 00:24:19,640 --> 00:24:23,280 Speaker 1: will trickle down to you know, everything underneath the US government, 514 00:24:23,280 --> 00:24:26,000 Speaker 1: including states and cities, and that's where we might you know, 515 00:24:26,280 --> 00:24:27,160 Speaker 1: really see something. 516 00:24:28,119 --> 00:24:31,480 Speaker 8: You're listening to the team can's are live program Bloomberg 517 00:24:31,560 --> 00:24:34,919 Speaker 8: Markets weekdays at ten am Eastern on Bloomberg dot com, 518 00:24:35,000 --> 00:24:38,160 Speaker 8: the iHeartRadio app and the Bloomberg Business app, or listen 519 00:24:38,240 --> 00:24:40,320 Speaker 8: on demand wherever you get your podcasts. 520 00:24:42,119 --> 00:24:47,800 Speaker 1: Nancy Tangler, c IO at Laffer Tangler Investments, joins us. Nancy, 521 00:24:47,840 --> 00:24:51,240 Speaker 1: thanks much for joining us. Tg l R is a 522 00:24:51,320 --> 00:24:55,040 Speaker 1: new ETF. Tell us about it. 523 00:24:55,160 --> 00:25:00,200 Speaker 12: Oh gosh, thanks so much. Pre advertising, Yeah, we much 524 00:25:00,600 --> 00:25:05,679 Speaker 12: TTLR today. It's an actively managed dividend growth strategy. So 525 00:25:06,560 --> 00:25:09,240 Speaker 12: we focus and always have by the way, since nineteen 526 00:25:09,280 --> 00:25:11,960 Speaker 12: eighty four when I got into the business. We focus 527 00:25:12,040 --> 00:25:16,120 Speaker 12: on relative yield because management at large cap companies set 528 00:25:16,119 --> 00:25:18,960 Speaker 12: the dividend policy based on what they think long term 529 00:25:19,080 --> 00:25:22,960 Speaker 12: sustainable earnings powers is. So it's a great shortcut. We 530 00:25:23,040 --> 00:25:27,080 Speaker 12: don't have to worry as much about earning estimates as 531 00:25:27,119 --> 00:25:29,199 Speaker 12: we do. Are they able to pay the dividend? Are 532 00:25:29,240 --> 00:25:31,280 Speaker 12: they able to grow the dividend? And then being an 533 00:25:31,280 --> 00:25:33,240 Speaker 12: industry leader, which are the names that we own with 534 00:25:33,280 --> 00:25:36,000 Speaker 12: great management teams that rounds out the portfolio, so it 535 00:25:36,040 --> 00:25:40,480 Speaker 12: acts differently than maybe a more traditional equity income strategy. 536 00:25:40,480 --> 00:25:42,560 Speaker 12: We don't have utilities in this portfolio. We have one 537 00:25:42,640 --> 00:25:44,879 Speaker 12: rate because we're looking for growth at the end of 538 00:25:44,880 --> 00:25:46,480 Speaker 12: the day, just like every other investor. 539 00:25:46,760 --> 00:25:49,760 Speaker 2: So Nancy Matt Miller here, Hi, thanks for joining us. 540 00:25:49,840 --> 00:25:53,320 Speaker 2: I'm mat What what holdings do you have in the ETF. 541 00:25:53,359 --> 00:25:57,360 Speaker 2: What are the biggest stocks that you're allocating. 542 00:25:57,920 --> 00:26:00,920 Speaker 12: Well, So one of our largest holdings is d which 543 00:26:01,080 --> 00:26:03,480 Speaker 12: you know we bought at because of a great capital 544 00:26:03,520 --> 00:26:06,399 Speaker 12: allocation plan they reached at one point they were returning 545 00:26:06,400 --> 00:26:08,680 Speaker 12: almost one hundred percent of free cash flow to investors. 546 00:26:09,040 --> 00:26:11,600 Speaker 12: But in addition, as time has passed, we're going to 547 00:26:11,600 --> 00:26:14,720 Speaker 12: get VMware in this transaction as well that should be 548 00:26:14,720 --> 00:26:18,359 Speaker 12: closing soon. And the AI bump, which has really driven 549 00:26:18,359 --> 00:26:21,640 Speaker 12: the stock this year, but dividend growth has been five 550 00:26:21,720 --> 00:26:25,119 Speaker 12: year annualized about twenty four percent. So that's that's one 551 00:26:25,119 --> 00:26:28,200 Speaker 12: of our largest holdings. We are overweight tech in this portfolio, 552 00:26:28,240 --> 00:26:32,360 Speaker 12: which you maybe wouldn't normally think about in a dividend 553 00:26:32,359 --> 00:26:34,880 Speaker 12: growth strategy, but there actually are a lot of great companies. 554 00:26:35,200 --> 00:26:38,560 Speaker 12: Oracle would be another one that pay the dividend, you know, 555 00:26:38,560 --> 00:26:40,119 Speaker 12: have a yield about in line with the market a 556 00:26:40,119 --> 00:26:42,359 Speaker 12: little bit above, and they're growing in about twelve percent 557 00:26:42,400 --> 00:26:44,720 Speaker 12: a year. And oh, by the way, they're probably the 558 00:26:44,800 --> 00:26:50,880 Speaker 12: cheapest AI generative AI cloud computing platform. So that's kind 559 00:26:50,880 --> 00:26:52,159 Speaker 12: of given the stock a new burst. 560 00:26:52,280 --> 00:26:53,879 Speaker 3: So we AI antie. 561 00:26:53,920 --> 00:26:55,720 Speaker 2: A lot of people have been saying AI bubble to 562 00:26:55,760 --> 00:26:57,639 Speaker 2: me over the past couple of days. Analysts on the 563 00:26:57,640 --> 00:27:00,440 Speaker 2: street are using that term. 564 00:27:01,160 --> 00:27:02,760 Speaker 3: Do you think this is an AI bubble? 565 00:27:04,200 --> 00:27:08,120 Speaker 12: I don't. I think a couple of things. First of all, 566 00:27:08,240 --> 00:27:10,280 Speaker 12: we know we have a very tight labor force. You're 567 00:27:10,280 --> 00:27:13,240 Speaker 12: not dragging the baby boomers back in with the networth 568 00:27:13,240 --> 00:27:16,359 Speaker 12: of about seventy five trillion collectively, so we're going to 569 00:27:16,400 --> 00:27:19,479 Speaker 12: be living with this, with this tight labor market for 570 00:27:19,520 --> 00:27:21,800 Speaker 12: some time. And if you go back and look historically 571 00:27:22,119 --> 00:27:25,400 Speaker 12: in other periods of tight labor markets, what you'll see 572 00:27:25,440 --> 00:27:28,360 Speaker 12: is that tech spending as a percent of GDP goes 573 00:27:28,440 --> 00:27:31,320 Speaker 12: up pretty dramatically one to two percent. And then in 574 00:27:31,359 --> 00:27:34,159 Speaker 12: addition to that, you get the earnings flowing through to 575 00:27:34,160 --> 00:27:37,160 Speaker 12: the company. So technology stocks have always outperformed in period 576 00:27:37,240 --> 00:27:41,000 Speaker 12: previous periods of labor shortage. This one is predicted by 577 00:27:41,720 --> 00:27:44,320 Speaker 12: the government to go from twenty fifteen where they think 578 00:27:44,320 --> 00:27:47,119 Speaker 12: it began all the way through twenty forty seven. So 579 00:27:47,200 --> 00:27:50,080 Speaker 12: I would use weakness in these stocks to add I mean, 580 00:27:50,080 --> 00:27:53,199 Speaker 12: the question is can they monetize. Microsoft has shown us 581 00:27:53,200 --> 00:27:56,159 Speaker 12: that they intend to monetize a generative AI with their 582 00:27:56,320 --> 00:27:57,439 Speaker 12: co pilot offering. 583 00:27:58,320 --> 00:28:03,280 Speaker 1: So for this TF, what's a I guess, what's a 584 00:28:03,359 --> 00:28:05,640 Speaker 1: model name to put in there? In terms of dividend 585 00:28:05,720 --> 00:28:08,159 Speaker 1: yield and dividend growth? What do you guys look for 586 00:28:08,359 --> 00:28:10,440 Speaker 1: in order to put that into this portfolio. 587 00:28:11,800 --> 00:28:14,560 Speaker 12: So we start with the valuation, which is relative yield, 588 00:28:14,600 --> 00:28:18,400 Speaker 12: and what we're looking for is our companies who have 589 00:28:18,600 --> 00:28:21,800 Speaker 12: a dividend paying culture, so they are committed to the dividend. 590 00:28:22,119 --> 00:28:24,840 Speaker 12: They sometimes state, as McDonald's does, that it's a portion 591 00:28:24,960 --> 00:28:27,240 Speaker 12: of what they think long term sustainable earnings power is, 592 00:28:27,520 --> 00:28:31,800 Speaker 12: but most of these companies it's implied. So we own 593 00:28:31,920 --> 00:28:34,560 Speaker 12: some of the usual suspects that you would expect to 594 00:28:34,600 --> 00:28:37,840 Speaker 12: see in an equity income strategy. So home Depot would 595 00:28:37,840 --> 00:28:42,000 Speaker 12: be an example. We also own we just have been 596 00:28:42,040 --> 00:28:45,000 Speaker 12: adding to our positions in Starbucks, we own Walmart. But 597 00:28:45,040 --> 00:28:47,880 Speaker 12: then we also have this exposure overweight a pretty big 598 00:28:47,920 --> 00:28:51,520 Speaker 12: overweight to industrials and then a modest overweight to technology. 599 00:28:51,960 --> 00:28:55,440 Speaker 12: So these companies have long histories of paying the dividend 600 00:28:55,880 --> 00:28:58,720 Speaker 12: and it gives us information as well as it contributes 601 00:28:58,720 --> 00:29:01,960 Speaker 12: pretty materially the total turn, especially the dividend growth part. 602 00:29:02,640 --> 00:29:05,400 Speaker 2: Did you do you know channel checks? Looking at the 603 00:29:05,440 --> 00:29:08,840 Speaker 2: appetite for new ETFs. Obviously last year was a banner 604 00:29:08,960 --> 00:29:13,760 Speaker 2: year for ETF launches. We've seen them slow down a 605 00:29:13,760 --> 00:29:17,840 Speaker 2: little bit this year. Still strong growth though. What's your 606 00:29:17,920 --> 00:29:21,000 Speaker 2: view on the ETF nancy as an investment vehicle? 607 00:29:22,120 --> 00:29:25,560 Speaker 12: So I just just finished the second edition of my book, 608 00:29:25,560 --> 00:29:28,600 Speaker 12: The Women's Guide to Successful Investing, and has a whole 609 00:29:28,680 --> 00:29:30,960 Speaker 12: chapter on ETFs. I think they play a very important 610 00:29:31,040 --> 00:29:36,000 Speaker 12: role in investors' portfolios. This particular strategy would serve as 611 00:29:36,000 --> 00:29:40,360 Speaker 12: a core that you would sort of decorate around with 612 00:29:40,480 --> 00:29:46,320 Speaker 12: more aggressive, higher risk ETFs. We launched it because our 613 00:29:46,320 --> 00:29:48,240 Speaker 12: minimums are pretty high and we were turning away a 614 00:29:48,240 --> 00:29:50,120 Speaker 12: lot of people that were interested in working with us. 615 00:29:50,320 --> 00:29:52,160 Speaker 12: So this is one way we can, you know, make 616 00:29:52,280 --> 00:29:57,480 Speaker 12: our strategy accessible to them, and it's been it's been 617 00:29:58,480 --> 00:30:01,320 Speaker 12: an interesting experience and the launch went off pretty well today. 618 00:30:01,360 --> 00:30:02,479 Speaker 12: So we're pretty happy about that. 619 00:30:02,560 --> 00:30:06,360 Speaker 2: The expense ratio is a little bit steep, ninety five 620 00:30:06,440 --> 00:30:09,000 Speaker 2: basis points. Does that stay there or do you bring 621 00:30:09,040 --> 00:30:11,400 Speaker 2: it down once you get more flows. 622 00:30:11,880 --> 00:30:14,040 Speaker 12: I think we bring it down. I mean I also 623 00:30:14,040 --> 00:30:16,920 Speaker 12: wrote a whole chapter on how fees are the biggest 624 00:30:16,960 --> 00:30:19,000 Speaker 12: erodor of total return and so you need to pay 625 00:30:19,000 --> 00:30:21,440 Speaker 12: attention to that. So we're very committed in our in 626 00:30:21,480 --> 00:30:25,040 Speaker 12: our wealth practice, and then with this fund to be 627 00:30:25,240 --> 00:30:28,600 Speaker 12: a reasonable access point for individuals and to add value 628 00:30:28,680 --> 00:30:31,040 Speaker 12: above and beyond the benchmark, which we've been able to 629 00:30:31,040 --> 00:30:33,880 Speaker 12: do historically in our separately managed accounts. 630 00:30:34,160 --> 00:30:37,600 Speaker 2: I thought, Paul, we could ask Nancy about Apple, you know, 631 00:30:38,040 --> 00:30:40,720 Speaker 2: because it's been it's a bug in your bonnet. 632 00:30:40,800 --> 00:30:43,160 Speaker 1: It is to be in your bonnet exactly. So Nancy, 633 00:30:43,400 --> 00:30:46,320 Speaker 1: you look at you mentioning your overweight tech. How frustrating 634 00:30:46,360 --> 00:30:49,880 Speaker 1: is it to see a company as great as Apple 635 00:30:49,960 --> 00:30:52,680 Speaker 1: with a cash flow it has to pay a dividend 636 00:30:52,720 --> 00:30:53,520 Speaker 1: less than one percent. 637 00:30:54,880 --> 00:30:57,600 Speaker 12: I know when we got into that stock, this is 638 00:30:57,600 --> 00:31:00,360 Speaker 12: the crazy thing. I don't think anyone remembers. This was 639 00:31:00,360 --> 00:31:03,120 Speaker 12: at three percent and twenty thirteen. It was above the 640 00:31:03,160 --> 00:31:05,960 Speaker 12: tenure at that time, and they were growing the dividend, 641 00:31:06,040 --> 00:31:09,240 Speaker 12: So we actually began accumulating our positions that at that 642 00:31:09,400 --> 00:31:13,240 Speaker 12: point added to it over the years. Have basically sold 643 00:31:13,280 --> 00:31:16,280 Speaker 12: the majority of our holdings. But this particular ETF does 644 00:31:16,360 --> 00:31:20,240 Speaker 12: have a small allocation, about two and a half percent 645 00:31:20,320 --> 00:31:23,520 Speaker 12: to that particular stock, and I think it is important 646 00:31:23,800 --> 00:31:26,520 Speaker 12: that management continues to grow the dividend, but they could 647 00:31:26,720 --> 00:31:28,959 Speaker 12: continue to grow it in a lot more aggressive fashion. 648 00:31:29,040 --> 00:31:31,240 Speaker 12: So I am a little bit frustrated by that and 649 00:31:31,320 --> 00:31:34,640 Speaker 12: some of the other great you know technology companies, cloud 650 00:31:34,680 --> 00:31:38,000 Speaker 12: computing like Google and even Amazon. The only way you 651 00:31:38,000 --> 00:31:40,480 Speaker 12: can generate income off of those is to sell covered calls, 652 00:31:40,640 --> 00:31:44,280 Speaker 12: So but we're not doing that in this Do buybacks? 653 00:31:44,320 --> 00:31:46,400 Speaker 2: Do cash buybacks make you feel any better? 654 00:31:47,640 --> 00:31:51,120 Speaker 12: I mean yes, but I mean it's more sentiment in 655 00:31:51,160 --> 00:31:55,000 Speaker 12: my view, just like splitting a stock. But yeah, like 656 00:31:55,080 --> 00:31:59,080 Speaker 12: Service Now just announced they are engaging in their first 657 00:31:59,480 --> 00:32:02,040 Speaker 12: share by back. You know that's going to put a 658 00:32:02,080 --> 00:32:05,080 Speaker 12: floor under the stock at some point. But so we 659 00:32:05,120 --> 00:32:06,920 Speaker 12: look at that. It's important to us, but it's not 660 00:32:07,040 --> 00:32:10,000 Speaker 12: our overriding concern. And when we're when we're looking for 661 00:32:10,040 --> 00:32:10,680 Speaker 12: new names. 662 00:32:10,880 --> 00:32:14,280 Speaker 1: Yeah, looking at Apple, the indicated yield zero point five percent, 663 00:32:14,920 --> 00:32:16,520 Speaker 1: that's the bad news. I guess the good news is 664 00:32:16,520 --> 00:32:20,280 Speaker 1: they've five year net growth seven point two six percent, 665 00:32:20,360 --> 00:32:22,040 Speaker 1: so they are growing it. But again a lot of 666 00:32:22,040 --> 00:32:24,720 Speaker 1: folks like myself think we could see we should see you, 667 00:32:24,720 --> 00:32:26,280 Speaker 1: you know, to two and a half three percent divid 668 00:32:26,280 --> 00:32:28,560 Speaker 1: in yield on that name, but that's not how they 669 00:32:28,680 --> 00:32:31,480 Speaker 1: view their use of cash. Nancy Tangler, thanks so much 670 00:32:31,480 --> 00:32:36,200 Speaker 1: for joining us. Nancy is the CIO of Laffertangler Investments 671 00:32:36,840 --> 00:32:41,120 Speaker 1: and their new ETF out today looking at dividends and 672 00:32:41,240 --> 00:32:45,360 Speaker 1: dividend growth. Tg l R is the ticker you're listening. 673 00:32:45,000 --> 00:32:48,520 Speaker 8: To the tape. Catch are live program Bloomberg Markets weekdays 674 00:32:48,520 --> 00:32:51,760 Speaker 8: at ten am Eastern on Bloomberg Radio, the tune in app, 675 00:32:51,800 --> 00:32:53,240 Speaker 8: Bloomberg dot Com, and the. 676 00:32:53,200 --> 00:32:54,400 Speaker 7: Bloomberg Business App. 677 00:32:54,440 --> 00:32:57,239 Speaker 8: You can also listen live on Amazon Alexa from our 678 00:32:57,280 --> 00:33:01,640 Speaker 8: flagship New York station Just say Alexa, playing Bloomberg eleven. 679 00:33:02,960 --> 00:33:05,440 Speaker 1: Matt Miller, Paul Sweeney live here in the Bloomberg Interactive 680 00:33:05,440 --> 00:33:06,120 Speaker 1: Broker Studio. 681 00:33:06,200 --> 00:33:08,000 Speaker 3: We are streaming on. 682 00:33:07,880 --> 00:33:10,280 Speaker 1: YouTube, so just head over to YouTube and search Bloomberg 683 00:33:10,440 --> 00:33:13,240 Speaker 1: Global News and that'll bring you to the video feed. 684 00:33:13,280 --> 00:33:14,800 Speaker 1: I want to get right to our next guest, Margie 685 00:33:14,800 --> 00:33:19,280 Speaker 1: Petel senior portfolio manager a all Spring Global Investments, joins us, 686 00:33:20,240 --> 00:33:22,880 Speaker 1: marg I want to get the benefit here of your experience. 687 00:33:22,920 --> 00:33:26,240 Speaker 1: Here we're pretty much through earnings for this cycle. What 688 00:33:26,240 --> 00:33:27,520 Speaker 1: are your takeaways? 689 00:33:28,200 --> 00:33:31,120 Speaker 14: Well, once again, the second quarter surprised on the upside 690 00:33:31,200 --> 00:33:33,840 Speaker 14: like the first quarter did. Shows that companies are in 691 00:33:33,880 --> 00:33:37,280 Speaker 14: good shape. Revenues are okay, profit margins are following up, 692 00:33:37,280 --> 00:33:40,080 Speaker 14: which is very important, and really there is no saw 693 00:33:40,120 --> 00:33:42,160 Speaker 14: in the companies are seeing any kind of a broad 694 00:33:42,160 --> 00:33:46,320 Speaker 14: brush decline and economic activities. So the outwork for third 695 00:33:46,400 --> 00:33:49,560 Speaker 14: quarterbooks at least reasonable, so maybe better than people have 696 00:33:49,640 --> 00:33:52,720 Speaker 14: been thinking. And the whole thought or recession once again 697 00:33:52,760 --> 00:33:55,000 Speaker 14: seems to be be pushed out a little bit over 698 00:33:55,040 --> 00:33:55,640 Speaker 14: the horizon. 699 00:33:56,120 --> 00:34:00,160 Speaker 2: So Margo, when are you When is your expectation or 700 00:34:00,320 --> 00:34:03,280 Speaker 2: a recession? Because all the signs are there, and I 701 00:34:03,320 --> 00:34:07,720 Speaker 2: realized that the current and backward looking data still aren't 702 00:34:07,760 --> 00:34:11,640 Speaker 2: as bad. On the other hand, the Fed raised interest 703 00:34:11,719 --> 00:34:13,840 Speaker 2: rates five hundred and fifty basis points in like a 704 00:34:13,920 --> 00:34:15,719 Speaker 2: year and a half, so it's coming right. 705 00:34:16,960 --> 00:34:19,960 Speaker 14: Well, it's coming that we may have to wait longer 706 00:34:19,960 --> 00:34:23,799 Speaker 14: than people think. I think two several reasons. One, corporations 707 00:34:23,800 --> 00:34:27,239 Speaker 14: has spent the last decade of near zero rates, restructuring 708 00:34:27,280 --> 00:34:30,160 Speaker 14: the balance sheets, so they really aren't a sensitive to 709 00:34:30,320 --> 00:34:33,440 Speaker 14: higher short term rates as they have been in previous cycles. 710 00:34:33,719 --> 00:34:35,719 Speaker 14: Same thing with consumers who are having a little bit 711 00:34:35,760 --> 00:34:38,680 Speaker 14: of a slow down in housing, but many homeowners are 712 00:34:38,719 --> 00:34:42,040 Speaker 14: able again to refinance, locking long term low rates on 713 00:34:42,080 --> 00:34:44,480 Speaker 14: the houses, so they're not actually heard. And in fact, 714 00:34:44,520 --> 00:34:47,840 Speaker 14: i'd say the margins consumers are probably benefiting from getting 715 00:34:47,920 --> 00:34:51,160 Speaker 14: higher rates on their savings. With unemployment at three point 716 00:34:51,239 --> 00:34:54,279 Speaker 14: six percent, it's very, very hard to say that we're 717 00:34:54,320 --> 00:34:57,280 Speaker 14: on the Brinker recession, and especially when there's no sector 718 00:34:57,320 --> 00:34:59,439 Speaker 14: of the economy you can point to that's about ready 719 00:34:59,480 --> 00:35:02,600 Speaker 14: to tumble distress to feed over into some kind of 720 00:35:02,600 --> 00:35:05,360 Speaker 14: a general recession. So I just don't see a recession 721 00:35:05,400 --> 00:35:06,359 Speaker 14: any time in your time. 722 00:35:06,960 --> 00:35:11,240 Speaker 1: Well, margre given that background, is it reasonable for some people, 723 00:35:11,400 --> 00:35:13,400 Speaker 1: like in the fixed income space, maybe take on some 724 00:35:13,440 --> 00:35:16,520 Speaker 1: incremental risk in terms of maybe moving out in duration, 725 00:35:16,560 --> 00:35:18,200 Speaker 1: maybe even moving to high yield. 726 00:35:18,360 --> 00:35:19,200 Speaker 3: How do you think about that? 727 00:35:20,440 --> 00:35:23,640 Speaker 14: Well, high yield has not been very risky last year 728 00:35:23,760 --> 00:35:26,279 Speaker 14: or this year. It's actually still the best performing part 729 00:35:26,280 --> 00:35:28,960 Speaker 14: in the fixed income market when you look at maturity 730 00:35:29,000 --> 00:35:32,760 Speaker 14: adjusted and I think it will still be probably above 731 00:35:32,840 --> 00:35:36,200 Speaker 14: average compared to treasuries. The way I look at treasuries, 732 00:35:36,200 --> 00:35:38,560 Speaker 14: we have such an enormous amount of supply that has 733 00:35:38,600 --> 00:35:41,480 Speaker 14: to come, that has to be absorbed. That says to 734 00:35:41,520 --> 00:35:44,400 Speaker 14: be that we may have a relative scarcity of corporate 735 00:35:44,440 --> 00:35:47,319 Speaker 14: credits that people would like to buy versus treasuries. So 736 00:35:47,360 --> 00:35:50,239 Speaker 14: we might actually see old spreads, the amount of extrebo 737 00:35:50,320 --> 00:35:53,840 Speaker 14: to get in corporates over treasuries shrink from these levels. 738 00:35:53,880 --> 00:35:56,680 Speaker 14: And remember defaults throwing a little over three percent, So 739 00:35:57,000 --> 00:35:59,520 Speaker 14: even in the high old market, you're not seeing much distress. 740 00:36:01,040 --> 00:36:04,480 Speaker 1: So all right, if no real recession this year, I mean, 741 00:36:04,480 --> 00:36:07,360 Speaker 1: how should we think about this equity market, which has 742 00:36:07,400 --> 00:36:10,080 Speaker 1: really been driven this year by those magnificent seven stocks. 743 00:36:11,680 --> 00:36:13,600 Speaker 1: Do we start to try to rotate maybe out of them, 744 00:36:13,680 --> 00:36:16,160 Speaker 1: or maybe try to diversify way out of them into 745 00:36:16,160 --> 00:36:18,800 Speaker 1: some mid cap stocks, maybe some cyclical names. 746 00:36:20,080 --> 00:36:22,840 Speaker 14: Well, I still think the better trade is with larger 747 00:36:22,880 --> 00:36:27,000 Speaker 14: cap stocks because we don't really know what's going to happen. Secondly, 748 00:36:27,040 --> 00:36:29,320 Speaker 14: it looks as if growth in the second half of 749 00:36:29,360 --> 00:36:31,840 Speaker 14: the year will continue to be I think very very modest, 750 00:36:32,280 --> 00:36:34,799 Speaker 14: so high growing companies will be hard to find so 751 00:36:34,840 --> 00:36:36,880 Speaker 14: I think that some of the very large cap stocks 752 00:36:36,880 --> 00:36:40,480 Speaker 14: have been favorites so far this year may well continue 753 00:36:40,480 --> 00:36:43,600 Speaker 14: to perform because they still have the guaranteed growth. So 754 00:36:43,640 --> 00:36:46,319 Speaker 14: we're looking more for large cap companies where they have 755 00:36:46,680 --> 00:36:49,000 Speaker 14: either an industry that's on the secular up swing or 756 00:36:49,920 --> 00:36:52,680 Speaker 14: looks as if they can continue to have above their maturities. 757 00:36:53,360 --> 00:36:59,680 Speaker 2: That's pretty amazing because it seems like Margie the biggest companies. 758 00:36:59,239 --> 00:37:01,240 Speaker 3: On the S and P five hundred. 759 00:37:02,080 --> 00:37:08,520 Speaker 2: Then you know Apple, Microsoft, Amazon, and Nvidia, Alphabet Meta, 760 00:37:09,320 --> 00:37:13,160 Speaker 2: maybe Tesla. These companies you're looking at as growth companies 761 00:37:13,280 --> 00:37:15,960 Speaker 2: but also in a sense safe havens. 762 00:37:17,080 --> 00:37:19,560 Speaker 14: Well that's right, and ever since the first quarter when 763 00:37:19,800 --> 00:37:22,440 Speaker 14: they all produce pretty good earnings, they have act to 764 00:37:22,440 --> 00:37:25,720 Speaker 14: a safe haven. Certainly they have enormously liquid balance sheets 765 00:37:26,080 --> 00:37:28,759 Speaker 14: that they are safe haven. And I think from here 766 00:37:28,840 --> 00:37:32,399 Speaker 14: on the market's going to look at these stocks more individually. 767 00:37:32,480 --> 00:37:35,680 Speaker 14: For example, we saw Apple really come down a bit 768 00:37:35,719 --> 00:37:38,759 Speaker 14: since they've reported rather disappointing results, and the other some 769 00:37:38,840 --> 00:37:42,200 Speaker 14: of the other fag names of Microsoft, Meta have produced 770 00:37:42,280 --> 00:37:45,240 Speaker 14: very good results, and so those have continued to tuggle 771 00:37:45,320 --> 00:37:47,680 Speaker 14: on in advance. So we think it's really going to 772 00:37:47,719 --> 00:37:51,080 Speaker 14: be determined by results. Are these high growing stocks still 773 00:37:51,160 --> 00:37:53,960 Speaker 14: high growing or any of them running into roadblocks that 774 00:37:54,080 --> 00:37:56,680 Speaker 14: may take them down, So we think it'll be more individual. 775 00:37:56,719 --> 00:37:59,759 Speaker 14: We still think in general the larger companies will tend 776 00:37:59,800 --> 00:38:02,080 Speaker 14: to do well because they have all the strengths to 777 00:38:02,960 --> 00:38:05,400 Speaker 14: operate in a low growth market. 778 00:38:05,960 --> 00:38:06,240 Speaker 3: Margy. 779 00:38:06,320 --> 00:38:08,040 Speaker 1: Earlier today, Matt and I were talking with a guest 780 00:38:08,040 --> 00:38:12,440 Speaker 1: who's firm launched an ETF today that focuses on dividends, 781 00:38:12,600 --> 00:38:15,520 Speaker 1: dividend growth, and dividend yield. 782 00:38:15,520 --> 00:38:16,840 Speaker 3: How do you think about dividends? 783 00:38:18,360 --> 00:38:21,479 Speaker 14: Well, I think dividends are nice, and in a slow 784 00:38:21,520 --> 00:38:24,440 Speaker 14: growth market, which I think will now be in, probably 785 00:38:24,440 --> 00:38:27,000 Speaker 14: dividends will be a bigger component of total return for 786 00:38:27,080 --> 00:38:30,040 Speaker 14: stocks than we've seen over the last say five years 787 00:38:30,200 --> 00:38:32,680 Speaker 14: or so. However, I still think it comes down to 788 00:38:32,800 --> 00:38:36,280 Speaker 14: individual stocks, not so much a dividend rate, because often 789 00:38:36,600 --> 00:38:39,200 Speaker 14: stock set up high dividend yields are likely to be 790 00:38:39,360 --> 00:38:42,719 Speaker 14: equity under performers. Stocks of low dividends are likely to 791 00:38:42,760 --> 00:38:46,160 Speaker 14: raise their dividends over time. So rather than ETF one 792 00:38:46,200 --> 00:38:49,120 Speaker 14: size fits all, we'd rather just look at companies that 793 00:38:49,280 --> 00:38:51,800 Speaker 14: have we think the ability to raise their dividends or 794 00:38:51,800 --> 00:38:55,560 Speaker 14: reasonable dividends for the growth rate or likelihood to raise 795 00:38:55,560 --> 00:38:56,319 Speaker 14: their dividends. 796 00:38:56,880 --> 00:39:00,000 Speaker 2: Are those companies going to be some of the same 797 00:39:00,080 --> 00:39:03,319 Speaker 2: that are the Magnificent seven? I mean, are they going 798 00:39:03,360 --> 00:39:07,320 Speaker 2: to be growth companies, safe havens and able to raise dividends. 799 00:39:08,520 --> 00:39:12,440 Speaker 14: Well, I think companies are pretty cautious about raising their dividends, 800 00:39:12,440 --> 00:39:15,319 Speaker 14: more so than buying back stock. So we still think 801 00:39:15,360 --> 00:39:19,200 Speaker 14: that the technology sector will have companies that raise their dividends. 802 00:39:19,440 --> 00:39:22,680 Speaker 14: We think the industrial sector has turned the corner and 803 00:39:22,760 --> 00:39:25,399 Speaker 14: we think they're likely to have higher cash flow and 804 00:39:25,520 --> 00:39:28,920 Speaker 14: raiser dividends. And even in some of the healthcare names 805 00:39:29,160 --> 00:39:32,480 Speaker 14: healthcare books as if it's under a cloud hangover from 806 00:39:32,480 --> 00:39:34,799 Speaker 14: COVID and different things. But we think even there we 807 00:39:34,800 --> 00:39:38,680 Speaker 14: should see some modest increases in dividends over the next. 808 00:39:38,520 --> 00:39:38,960 Speaker 7: Year or two. 809 00:39:39,680 --> 00:39:43,239 Speaker 1: How about energy, Margie, We're looking at wtach crude oil 810 00:39:43,360 --> 00:39:45,800 Speaker 1: just under eighty two dollars a barrel, up from about 811 00:39:45,800 --> 00:39:48,239 Speaker 1: sixty seven to sixty eight just about five weeks ago. 812 00:39:48,320 --> 00:39:50,880 Speaker 1: So how do you guys think about the energy space. 813 00:39:52,320 --> 00:39:56,480 Speaker 14: We have a very modest exposure and energy because we 814 00:39:56,680 --> 00:39:59,080 Speaker 14: really aren't interested in making a plate on the price 815 00:39:59,080 --> 00:40:03,239 Speaker 14: of oil. We think there's a lot of roadblocks politically 816 00:40:03,360 --> 00:40:06,560 Speaker 14: for some companies really expanding their earnings where they might 817 00:40:06,719 --> 00:40:09,640 Speaker 14: like to. So we're kind of form on the sector. 818 00:40:10,640 --> 00:40:13,360 Speaker 1: All right, Margie, We really appreciate getting a few minutes 819 00:40:13,400 --> 00:40:16,600 Speaker 1: of your time. Margie Ptel, Senior portfolio manager at all 820 00:40:16,680 --> 00:40:21,919 Speaker 1: Spring Global Investment. Still keeping a relatively optimistic outlook on 821 00:40:22,160 --> 00:40:24,360 Speaker 1: the risk assets even in a slower growth environment. 822 00:40:24,640 --> 00:40:27,759 Speaker 8: You're listening to the tape Cat's are live program Bloomberg 823 00:40:27,800 --> 00:40:31,400 Speaker 8: Markets weekdays at ten am Eastern on Bloomberg Radio, the 824 00:40:31,480 --> 00:40:33,560 Speaker 8: tune in app, Bloomberg dot Com. 825 00:40:33,280 --> 00:40:34,720 Speaker 7: And the Bloomberg Business App. 826 00:40:34,760 --> 00:40:37,560 Speaker 8: You can also listen live on Amazon Alexa from our 827 00:40:37,560 --> 00:40:43,600 Speaker 8: flagship New York station. Just say Alexa, play Bloomberg eleven thirty. 828 00:40:43,400 --> 00:40:45,560 Speaker 1: Matt Miller, Paul Sweeney here in a Bloomberg Interactive at 829 00:40:45,560 --> 00:40:48,480 Speaker 1: Brokers Studio, or streaming live on YouTube, which is Head 830 00:40:48,480 --> 00:40:52,160 Speaker 1: over to that intraweb thing and search Bloomberg Global News 831 00:40:52,200 --> 00:40:57,280 Speaker 1: and don't take You'll find our video feed there. Eli Lilly, Novo, Nordisk, 832 00:40:57,440 --> 00:41:01,239 Speaker 1: two big farmer companies all time highs today. Look at 833 00:41:01,239 --> 00:41:04,880 Speaker 1: those charts, they're just absolutely monster charts, particularly in the 834 00:41:04,920 --> 00:41:05,759 Speaker 1: last twenty years. 835 00:41:05,800 --> 00:41:07,359 Speaker 3: So We're going to figure out what's going on there. 836 00:41:07,400 --> 00:41:10,960 Speaker 1: Something about an obesity drug here and reducing heart attacks. 837 00:41:11,000 --> 00:41:13,719 Speaker 1: All good news, all big news, But we need to 838 00:41:13,719 --> 00:41:16,360 Speaker 1: get talked to somebody who's actually an expert in this stuff. 839 00:41:16,360 --> 00:41:20,440 Speaker 1: Michael Shaw, Senior industry analyst at Bloomberg Intelligence. He's based 840 00:41:20,480 --> 00:41:21,759 Speaker 1: in London. Mikey, thanks so. 841 00:41:21,840 --> 00:41:22,719 Speaker 3: Much for joining us here. 842 00:41:22,760 --> 00:41:25,799 Speaker 1: Could you tell us what is going on with the 843 00:41:25,880 --> 00:41:31,719 Speaker 1: Novo Nordisk by and also by extension, Eli Lilly, what's 844 00:41:31,760 --> 00:41:33,160 Speaker 1: going on today? 845 00:41:33,920 --> 00:41:37,920 Speaker 9: Yeah, So, Novo basically had a landmark trial readout, so 846 00:41:38,000 --> 00:41:41,479 Speaker 9: I looked at WIGOVI and cardiovascular outcomes. Now, the base 847 00:41:41,560 --> 00:41:45,000 Speaker 9: case for this was a seventeen percent risk reduction on 848 00:41:45,080 --> 00:41:48,800 Speaker 9: CARDIOVASCAR outcomes, and really with a result we sawt of 849 00:41:48,880 --> 00:41:50,920 Speaker 9: like a home run result. So it actually reported a 850 00:41:50,960 --> 00:41:55,960 Speaker 9: twenty percent benefit. And what's more is that all drivers 851 00:41:55,960 --> 00:42:01,879 Speaker 9: of the compet at endpoint, so heart failure and KINDIVASCAR death, 852 00:42:02,360 --> 00:42:03,880 Speaker 9: they all drove that benefit. 853 00:42:03,960 --> 00:42:06,200 Speaker 6: So really a home run result for Novo. 854 00:42:06,239 --> 00:42:07,319 Speaker 3: That, Mikey. 855 00:42:07,400 --> 00:42:10,240 Speaker 2: The the main question people ask me, and that I 856 00:42:10,280 --> 00:42:13,360 Speaker 2: also want to know the answer to about these drugs 857 00:42:13,520 --> 00:42:17,680 Speaker 2: is what could the long term effects be? You know, 858 00:42:17,719 --> 00:42:20,439 Speaker 2: if you're shooting yourself in the leg with these every 859 00:42:20,480 --> 00:42:22,360 Speaker 2: week for the next you know, ten years. 860 00:42:22,800 --> 00:42:24,360 Speaker 11: What happens to your body? 861 00:42:25,880 --> 00:42:27,880 Speaker 9: Well, I think it's clear that we've seen, you know, 862 00:42:27,960 --> 00:42:31,360 Speaker 9: we've seen substantial weight loss associated with these products. So 863 00:42:31,680 --> 00:42:35,320 Speaker 9: Novo's Wigovi's got about well, showed up to eighteen percent, 864 00:42:36,320 --> 00:42:38,280 Speaker 9: to Zeppetite showed more than twenty percent. 865 00:42:38,719 --> 00:42:39,440 Speaker 6: In terms of the. 866 00:42:39,400 --> 00:42:43,760 Speaker 9: Side effects, well, I mean initially, you know, the glping 867 00:42:43,800 --> 00:42:46,600 Speaker 9: one class in general is associated with GI side effects, 868 00:42:46,600 --> 00:42:50,960 Speaker 9: so gashri intestinal side effects, things like nausea, vomiting, et cetera. 869 00:42:52,440 --> 00:42:54,239 Speaker 9: You know, this is a class of drug that's that's 870 00:42:54,280 --> 00:43:00,640 Speaker 9: been used for years in diabetes, and you know, there 871 00:43:00,680 --> 00:43:04,040 Speaker 9: have have been kind of anecdotal reports of things like 872 00:43:04,080 --> 00:43:07,160 Speaker 9: suicidal ideation that we've seen in the in the news recently. 873 00:43:07,239 --> 00:43:10,840 Speaker 2: Hang on out, so what say, what is it suicide? 874 00:43:11,920 --> 00:43:13,400 Speaker 6: Suicidal ideation? 875 00:43:13,560 --> 00:43:17,239 Speaker 9: Yes, but you got to also remember, you know, you know, 876 00:43:17,280 --> 00:43:20,520 Speaker 9: these these patients you know OBC, and they could be 877 00:43:20,520 --> 00:43:24,120 Speaker 9: actually other other things contributing to that. So nothing's been 878 00:43:24,160 --> 00:43:26,160 Speaker 9: seen in you know, nothing was seen in the clinical 879 00:43:26,200 --> 00:43:29,920 Speaker 9: trials and the large clinical trials, So you know, I think. 880 00:43:30,200 --> 00:43:32,600 Speaker 6: The safety of these drugs is kind of well. 881 00:43:32,400 --> 00:43:35,120 Speaker 9: Documented and and you know, there's been a lot of 882 00:43:35,160 --> 00:43:37,040 Speaker 9: experience already with with diabetes. 883 00:43:37,080 --> 00:43:38,719 Speaker 2: All right, So just to sort out what's on the 884 00:43:38,760 --> 00:43:41,719 Speaker 2: market here and who owns it the. 885 00:43:41,680 --> 00:43:44,560 Speaker 1: One Mic and his team did a big report on 886 00:43:44,760 --> 00:43:47,440 Speaker 1: just this whole places obesity stuff. 887 00:43:47,520 --> 00:43:50,040 Speaker 2: I mean, I'm I think this could be a game 888 00:43:50,160 --> 00:43:53,440 Speaker 2: changer for the Western world. Uh, you know, obviously if 889 00:43:53,440 --> 00:43:55,279 Speaker 2: there are no long term side effects, I don't want 890 00:43:55,280 --> 00:43:57,600 Speaker 2: to be giving birth to a three eyed fish later. 891 00:43:57,920 --> 00:44:02,000 Speaker 2: But uh so Novo nor Disc does we gov and 892 00:44:02,320 --> 00:44:05,920 Speaker 2: ozempic right, those are both from Novo nor Disc And 893 00:44:05,960 --> 00:44:16,719 Speaker 2: then Lily has tears zeppatide as well as re retattrue tide. 894 00:44:17,760 --> 00:44:19,080 Speaker 6: Is that right, Yeah, that's correct. 895 00:44:19,400 --> 00:44:19,920 Speaker 3: Yeah, So. 896 00:44:21,840 --> 00:44:23,840 Speaker 9: Basically we gave you in a zempiic are both the 897 00:44:23,840 --> 00:44:26,680 Speaker 9: same molecules, just we gave you the higher days that's 898 00:44:26,680 --> 00:44:31,319 Speaker 9: marketed or approved in obesity. Zempick is approved in diabetes. 899 00:44:32,640 --> 00:44:36,160 Speaker 9: Tozeptide is marketed under the brand name Munjari for diabetes, 900 00:44:36,200 --> 00:44:39,520 Speaker 9: and it should get approved in you know, towards the 901 00:44:39,600 --> 00:44:42,520 Speaker 9: end of the year for obesity. And then rettrue Tide 902 00:44:42,640 --> 00:44:46,160 Speaker 9: is a compound that they've got in there in their 903 00:44:46,200 --> 00:44:49,279 Speaker 9: in their pipeline which has yeah, which is you know, 904 00:44:49,400 --> 00:44:52,880 Speaker 9: shown potentially better data than totide on weight loss. So 905 00:44:52,880 --> 00:44:54,759 Speaker 9: that's something coming through the pipeline, all right. 906 00:44:54,800 --> 00:44:58,080 Speaker 1: But the anytime I talk to you, Mikey or Sam, 907 00:44:58,280 --> 00:45:01,319 Speaker 1: it always comes down Sam Faz, your partner in crime. 908 00:45:01,360 --> 00:45:03,440 Speaker 1: It always comes down to who pays for this stuff? 909 00:45:03,840 --> 00:45:06,440 Speaker 1: So who pays for this stuff in the big markets 910 00:45:06,480 --> 00:45:07,240 Speaker 1: around the country. 911 00:45:07,239 --> 00:45:09,799 Speaker 2: I saw I saw by the way that the University 912 00:45:09,840 --> 00:45:14,719 Speaker 2: of Texas has taken these drugs off of its insured 913 00:45:15,040 --> 00:45:19,120 Speaker 2: coverage coverage list because the University of Texas system was 914 00:45:19,160 --> 00:45:22,440 Speaker 2: paying five million dollars a month for its employees to 915 00:45:22,440 --> 00:45:23,520 Speaker 2: get hold of these things. 916 00:45:25,120 --> 00:45:27,000 Speaker 9: So yeah, So I mean that's a key question at 917 00:45:27,000 --> 00:45:29,240 Speaker 9: the moment given the size of the well, the potential 918 00:45:29,280 --> 00:45:32,839 Speaker 9: size of this indication. You know, historically, what we've seen 919 00:45:32,920 --> 00:45:35,399 Speaker 9: with these drugs is b see. You know, it's been 920 00:45:35,480 --> 00:45:37,200 Speaker 9: kind of more of a lifestyle choice. It's been an 921 00:45:37,239 --> 00:45:39,960 Speaker 9: out of pocket market. But we haven't seen the weight 922 00:45:40,000 --> 00:45:44,160 Speaker 9: loss data that that's you know, associated with these drugs historically. 923 00:45:45,200 --> 00:45:47,560 Speaker 9: So now with this outcomes data in hand, that's really 924 00:45:47,560 --> 00:45:50,719 Speaker 9: going to drive broad reinbursement, and I think it's going 925 00:45:50,800 --> 00:45:52,919 Speaker 9: to be tough for pairs to kind of not cover 926 00:45:53,000 --> 00:45:55,240 Speaker 9: these drugs. Is that, you know, if we're GOV showing 927 00:45:55,239 --> 00:45:59,040 Speaker 9: a twenty percent reduction and kind of carti of out 928 00:45:59,040 --> 00:46:01,239 Speaker 9: of their risk and cool that heart failure is kind 929 00:46:01,239 --> 00:46:03,280 Speaker 9: of one of the leading causes of death in the US. 930 00:46:04,080 --> 00:46:06,400 Speaker 9: And also it has you know, cost associated with it, 931 00:46:06,440 --> 00:46:08,960 Speaker 9: which are kind of a significant burden on the healthcare system. 932 00:46:09,400 --> 00:46:12,440 Speaker 9: So you know, the long long term savings you know 933 00:46:12,560 --> 00:46:15,239 Speaker 9: that these drugs could potentially offer, you know, are going 934 00:46:15,320 --> 00:46:15,799 Speaker 9: to be huge. 935 00:46:15,920 --> 00:46:17,239 Speaker 6: It's kind of of. 936 00:46:17,200 --> 00:46:20,360 Speaker 2: Course, you could achieve the same savings or certainly similar 937 00:46:20,400 --> 00:46:23,040 Speaker 2: savings that people would just eat less ice cream and 938 00:46:23,080 --> 00:46:25,279 Speaker 2: go to the gym more often. Right, So that's the 939 00:46:25,680 --> 00:46:28,759 Speaker 2: that's the problem, true too, that the insurance that the 940 00:46:28,800 --> 00:46:31,680 Speaker 2: companies paying for the insurance probably have, like my employees 941 00:46:31,760 --> 00:46:35,120 Speaker 2: either make horrible choices and take this drug and then 942 00:46:35,160 --> 00:46:38,120 Speaker 2: I pay five million dollars a month, or my employees 943 00:46:38,680 --> 00:46:41,640 Speaker 2: make good choices and I don't pay anything and no 944 00:46:41,640 --> 00:46:42,680 Speaker 2: one needs to take drugs. 945 00:46:44,600 --> 00:46:46,440 Speaker 6: Yeah, that's true. True, that's true too. 946 00:46:47,040 --> 00:46:50,080 Speaker 1: All right, Mikey, All right, that's your BC side. I 947 00:46:50,160 --> 00:46:52,080 Speaker 1: got my plays there and I know how to do that. 948 00:46:52,320 --> 00:46:55,319 Speaker 1: Another big area that we'd love to see some breakthroughs 949 00:46:55,440 --> 00:46:57,239 Speaker 1: and maybe your companies will do it. It's just kind 950 00:46:57,239 --> 00:47:01,680 Speaker 1: of dementia broadly defined. As the world population ages, it 951 00:47:01,680 --> 00:47:03,960 Speaker 1: becomes a bigger and bigger problem for a lot more people. 952 00:47:04,640 --> 00:47:07,400 Speaker 1: What's what's your industry, what's the farmer? What's a BioPharm 953 00:47:07,400 --> 00:47:09,280 Speaker 1: market in industry? What are they doing there? 954 00:47:10,800 --> 00:47:13,200 Speaker 9: I mean we've seen I mean it's not my area 955 00:47:13,239 --> 00:47:17,400 Speaker 9: of area of focus, but we've we've obviously seen the 956 00:47:17,520 --> 00:47:20,919 Speaker 9: kembe from Bigen and Essie come through, and then we've 957 00:47:20,920 --> 00:47:23,319 Speaker 9: got Lily with d nanamap, so you know, these are 958 00:47:23,360 --> 00:47:28,759 Speaker 9: treatments for Alzheimer's. Limbeck as well has got has shown 959 00:47:28,840 --> 00:47:31,960 Speaker 9: kind of positive data for Alzheimer's agitation, so that's like 960 00:47:32,000 --> 00:47:36,520 Speaker 9: a supplemental indication for one of their drugs for results 961 00:47:37,080 --> 00:47:40,520 Speaker 9: resultsy So you know these are you know, this is 962 00:47:40,560 --> 00:47:43,719 Speaker 9: an area where you know the success rate has has 963 00:47:43,760 --> 00:47:47,759 Speaker 9: not always been high, and you know drugs associated with 964 00:47:48,160 --> 00:47:51,280 Speaker 9: being developed in these eras are kind of highly risk adjusted. 965 00:47:51,920 --> 00:47:56,319 Speaker 9: So yeah, I guess it remains to be seen. It's 966 00:47:56,360 --> 00:47:59,680 Speaker 9: not an area that I focus on a particular. So 967 00:48:00,160 --> 00:48:03,000 Speaker 9: my colleague, you know, Sam Fazzelli, to look at that please, 968 00:48:03,239 --> 00:48:07,600 Speaker 9: But there's certainly kind of developments in the in the pipeline, all. 969 00:48:07,560 --> 00:48:10,400 Speaker 1: Right, So what's next for you know, the Eli Liliza 970 00:48:10,400 --> 00:48:13,920 Speaker 1: of the world, the the Novo's, I mean, these sacks 971 00:48:14,000 --> 00:48:14,720 Speaker 1: all time highs. 972 00:48:14,760 --> 00:48:15,520 Speaker 3: What do you think they do? 973 00:48:15,560 --> 00:48:18,239 Speaker 1: Are they continue to go out and and buy what 974 00:48:18,280 --> 00:48:20,640 Speaker 1: they can't develop? It seems like every Monday we come 975 00:48:20,640 --> 00:48:22,040 Speaker 1: in and there's a big farm at m and a t. 976 00:48:22,040 --> 00:48:25,200 Speaker 2: Rate and does anybody else make one of these appetites 977 00:48:25,239 --> 00:48:26,359 Speaker 2: of pressant shots? 978 00:48:28,000 --> 00:48:31,600 Speaker 9: Yes, I mean we've seen kind of a Rally and Amjin, 979 00:48:31,719 --> 00:48:33,600 Speaker 9: We've seen a rally and Viking, both of them have 980 00:48:33,680 --> 00:48:38,719 Speaker 9: JLP one drugs in their pipeline. Other companies include Zealand, 981 00:48:39,040 --> 00:48:44,200 Speaker 9: Alti Mune and Fizes also got like an oral JLP 982 00:48:44,280 --> 00:48:48,880 Speaker 9: one as well, So several companies developing these jlping one 983 00:48:48,960 --> 00:48:53,040 Speaker 9: drugs for obesity. In terms of what's next in the space, 984 00:48:53,719 --> 00:48:55,640 Speaker 9: so I think we're going to constantly see this back 985 00:48:55,640 --> 00:48:59,160 Speaker 9: and forth between Lily and Novo on the on the 986 00:48:59,200 --> 00:49:03,000 Speaker 9: innovation front, So we've uh Lily, Nova's got goo v 987 00:49:03,200 --> 00:49:06,080 Speaker 9: Lily is going to bring into zeppatide. Nova's then got 988 00:49:06,160 --> 00:49:10,399 Speaker 9: Cagari Semma, which is a combination product and then we've 989 00:49:10,719 --> 00:49:13,880 Speaker 9: also recently seen, you know, really strong data for retis 990 00:49:13,920 --> 00:49:18,280 Speaker 9: true Tide, which is a triple agonist, unlike to Ze Petite, 991 00:49:18,320 --> 00:49:22,239 Speaker 9: which is a dual agonist, so it's targeting three three 992 00:49:22,239 --> 00:49:23,000 Speaker 9: things instead of two. 993 00:49:23,040 --> 00:49:25,400 Speaker 1: All right, So, Mikey, it's really important for you and 994 00:49:25,440 --> 00:49:28,400 Speaker 1: for healthcare investors to follow where different drugs are in 995 00:49:28,440 --> 00:49:31,319 Speaker 1: the regulatory pipeline. You guys actually have a model of that, 996 00:49:31,360 --> 00:49:31,680 Speaker 1: don't you. 997 00:49:33,480 --> 00:49:35,560 Speaker 9: Yeah, we have a track. We have a model on 998 00:49:35,600 --> 00:49:37,960 Speaker 9: the syste Yeah, we have a track on the system. 999 00:49:37,640 --> 00:49:40,799 Speaker 1: And it's the best as best on Wall Street by far. 1000 00:49:41,520 --> 00:49:44,040 Speaker 1: Who's the person that manages that again, who's the person? 1001 00:49:45,640 --> 00:49:47,520 Speaker 6: Oh yeah, so Sam and I look at it. 1002 00:49:48,680 --> 00:49:50,360 Speaker 1: Yeah, all right, it's the best on the street. They 1003 00:49:50,440 --> 00:49:54,080 Speaker 1: track every single get to it. We'll find it. I'll 1004 00:49:54,080 --> 00:49:55,439 Speaker 1: get it for you in a second. But it's it's 1005 00:49:55,520 --> 00:49:58,200 Speaker 1: just the best. If you're a healthcare geek, you have 1006 00:49:58,280 --> 00:50:00,319 Speaker 1: to have this same because you have to know where 1007 00:50:00,360 --> 00:50:02,839 Speaker 1: drugs are, when the tests are coming, all that kind 1008 00:50:02,840 --> 00:50:03,200 Speaker 1: of stuff. 1009 00:50:03,200 --> 00:50:05,279 Speaker 3: And the Bloomberg Intelligence guys do that. 1010 00:50:05,320 --> 00:50:08,760 Speaker 1: Mike you Shaw, Senior industry antals Bloomberg Intelligence. I appreciate 1011 00:50:08,800 --> 00:50:12,960 Speaker 1: getting some time there. Eli Lilly Novo both all time highs. 1012 00:50:13,000 --> 00:50:15,799 Speaker 8: Here today, you're listening to the tape cats Are Live 1013 00:50:15,880 --> 00:50:20,279 Speaker 8: program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, 1014 00:50:20,440 --> 00:50:22,680 Speaker 8: the tune in app, Bloomberg dot Com. 1015 00:50:22,400 --> 00:50:23,839 Speaker 7: And the Bloomberg Business App. 1016 00:50:23,880 --> 00:50:26,680 Speaker 8: You can also listen live on Amazon Alexa from our 1017 00:50:26,680 --> 00:50:31,760 Speaker 8: flagship New York station, Just say Alexa Play Bloomberg eleven thirty. 1018 00:50:32,600 --> 00:50:36,000 Speaker 1: Ryan Lockwood joins it sees the CFO of Carparts dot 1019 00:50:36,040 --> 00:50:39,880 Speaker 1: Com trades on the Nasdaq. PRTs is a symbol company 1020 00:50:39,920 --> 00:50:43,160 Speaker 1: went public back in two thousand and seven. They did 1021 00:50:43,160 --> 00:50:46,480 Speaker 1: a secondary offering very adroitly in twenty twenty when they 1022 00:50:46,520 --> 00:50:48,719 Speaker 1: stuck got a nice pop from the pandemic. 1023 00:50:49,480 --> 00:50:51,759 Speaker 3: Ryan, thanks so much for joining us here. Again. 1024 00:50:52,000 --> 00:50:53,920 Speaker 1: I'm looking at your long term chart and just looks 1025 00:50:53,960 --> 00:50:56,719 Speaker 1: like a lot of other pandemic charts where you have 1026 00:50:56,880 --> 00:51:00,319 Speaker 1: this surge in twenty twenty as people behaviors chain during 1027 00:51:00,360 --> 00:51:01,919 Speaker 1: the pandemic, and then it's been kind of a slow 1028 00:51:02,000 --> 00:51:05,040 Speaker 1: bleed off after we get post pandemic. Here, talk to 1029 00:51:05,120 --> 00:51:08,920 Speaker 1: us how your business kind of changed during that you know, 1030 00:51:08,960 --> 00:51:12,640 Speaker 1: twenty twenty period, pre that period during the pandemic and 1031 00:51:12,719 --> 00:51:13,600 Speaker 1: kind of where we are now. 1032 00:51:14,719 --> 00:51:17,440 Speaker 15: Yeah, so our business thanks for having me. Our business 1033 00:51:17,520 --> 00:51:19,279 Speaker 15: did change a little bit, but actually a lot of 1034 00:51:19,280 --> 00:51:21,319 Speaker 15: the change came from a new management team that came 1035 00:51:21,360 --> 00:51:24,400 Speaker 15: in twenty nineteen. So part of what we did was 1036 00:51:24,640 --> 00:51:27,240 Speaker 15: revitalize the business and focus it more on the customer. 1037 00:51:28,080 --> 00:51:28,520 Speaker 7: You know, we. 1038 00:51:28,440 --> 00:51:32,000 Speaker 15: Obviously benefited from some of the stimulus and some of 1039 00:51:32,040 --> 00:51:35,360 Speaker 15: the online shopping that came from e commerce, but combined 1040 00:51:35,360 --> 00:51:38,680 Speaker 15: with that, we changed to a more stockship model that 1041 00:51:38,920 --> 00:51:41,480 Speaker 15: it provides more value to the customer. We improve the website. 1042 00:51:41,560 --> 00:51:42,920 Speaker 15: So there's a lot of things going on as part 1043 00:51:42,960 --> 00:51:43,400 Speaker 15: of the story. 1044 00:51:43,680 --> 00:51:47,080 Speaker 1: What are the drivers of your business? Like when I 1045 00:51:47,080 --> 00:51:49,080 Speaker 1: look at your financial model, what are the key drivers 1046 00:51:49,080 --> 00:51:49,919 Speaker 1: that I need to get right? 1047 00:51:51,200 --> 00:51:53,239 Speaker 15: I think the key drivers for our business what you're 1048 00:51:53,239 --> 00:51:55,080 Speaker 15: going to see over the next three to five years 1049 00:51:55,640 --> 00:52:00,560 Speaker 15: is a combination of reasonable revenue growth with with combined 1050 00:52:00,560 --> 00:52:02,960 Speaker 15: with operating leverage. So there's a lot of things we 1051 00:52:03,040 --> 00:52:07,840 Speaker 15: can do to improve marketing, expense, fulfillment expense, fixed operating leverage. 1052 00:52:08,200 --> 00:52:11,040 Speaker 15: And we've done a lot of improvements over time. They've 1053 00:52:11,040 --> 00:52:14,080 Speaker 15: all been relatively sticky, and we continue to drive improvements 1054 00:52:14,080 --> 00:52:16,120 Speaker 15: over the next you know, three to five years all. 1055 00:52:16,080 --> 00:52:18,040 Speaker 1: Right, so what give me a sense of kind of 1056 00:52:18,320 --> 00:52:22,319 Speaker 1: who your customer is and kind of how do they 1057 00:52:22,320 --> 00:52:24,640 Speaker 1: really interact with Carparks dot Com. 1058 00:52:25,000 --> 00:52:27,480 Speaker 15: Yeah, so our customer is going to be generally a 1059 00:52:27,600 --> 00:52:32,799 Speaker 15: value oriented, do it yourselfer who is relatively sophisticated or 1060 00:52:32,920 --> 00:52:35,320 Speaker 15: looking to do some easy jobs and save some money. 1061 00:52:35,719 --> 00:52:38,080 Speaker 15: Compared to brick and mortar stores, we're fifty to sixty 1062 00:52:38,120 --> 00:52:40,680 Speaker 15: percent cheaper. So if someone's willing to wait one or 1063 00:52:40,680 --> 00:52:43,200 Speaker 15: two days to get their part online, they can have 1064 00:52:43,719 --> 00:52:48,040 Speaker 15: significant value. And that's especially useful at a time like this. 1065 00:52:48,680 --> 00:52:51,400 Speaker 1: All right, so how do I you know in your business, 1066 00:52:51,440 --> 00:52:54,880 Speaker 1: how do you drive top line demands? Is just having 1067 00:52:55,719 --> 00:52:59,279 Speaker 1: more stuff, more skews that they may need or is 1068 00:52:59,320 --> 00:53:00,400 Speaker 1: it marketing promotion? 1069 00:53:00,600 --> 00:53:02,240 Speaker 3: How do you try it drive your top line? 1070 00:53:02,840 --> 00:53:05,439 Speaker 15: You know, for us driving top line, you know, there's 1071 00:53:05,480 --> 00:53:07,800 Speaker 15: a lot of value that we provide high quality parts, 1072 00:53:08,000 --> 00:53:09,640 Speaker 15: but what we're really looking to do is take the 1073 00:53:09,680 --> 00:53:12,120 Speaker 15: stress out of car repair. If you have a car 1074 00:53:12,160 --> 00:53:14,200 Speaker 15: that's out of warranty, that check engine that comes on, 1075 00:53:14,719 --> 00:53:17,440 Speaker 15: there's not really a great resource for people. And that's 1076 00:53:17,440 --> 00:53:20,640 Speaker 15: what we try to do is provide information, high quality parts, 1077 00:53:21,239 --> 00:53:24,120 Speaker 15: great value pricing and if you can't put it on yourself, 1078 00:53:24,160 --> 00:53:26,600 Speaker 15: we'll even connect you to a local mechanic. So we're 1079 00:53:26,640 --> 00:53:30,839 Speaker 15: really trying to provide a one stop shop for customers 1080 00:53:31,239 --> 00:53:32,239 Speaker 15: that takes the stress out. 1081 00:53:32,120 --> 00:53:32,640 Speaker 2: Of car repair. 1082 00:53:33,000 --> 00:53:33,439 Speaker 3: So help. 1083 00:53:34,040 --> 00:53:35,680 Speaker 1: You know, it seems like what we understand here in 1084 00:53:35,719 --> 00:53:38,480 Speaker 1: the post pandemic world that Detroit says it's going to 1085 00:53:38,520 --> 00:53:40,520 Speaker 1: build fewer cars, So the days of seventeen and a 1086 00:53:40,560 --> 00:53:43,680 Speaker 1: half million SAR might be over. Maybe it's fifteen fifteen 1087 00:53:43,680 --> 00:53:46,440 Speaker 1: and a half million cars. That means cars got to 1088 00:53:46,600 --> 00:53:49,080 Speaker 1: I guess, lasts longer, use cars, all that kind of stuff. 1089 00:53:49,440 --> 00:53:52,040 Speaker 3: Is that good for your business? Definitely? 1090 00:53:52,080 --> 00:53:54,719 Speaker 15: I think that's that's right when you look at SAR. 1091 00:53:55,160 --> 00:53:58,480 Speaker 15: You know, we had obviously a very lower SAR, you know, 1092 00:53:58,520 --> 00:54:00,279 Speaker 15: kind of coming into this year and part of last 1093 00:54:00,320 --> 00:54:03,000 Speaker 15: year due to interest rates. SAR might come down, but 1094 00:54:03,040 --> 00:54:05,440 Speaker 15: cars definitely have been lasted longer. They're going to commute 1095 00:54:05,520 --> 00:54:07,560 Speaker 15: last longer, and I think consumers are going to try 1096 00:54:07,560 --> 00:54:12,440 Speaker 15: to drive value by repairing their car having it lasts longer, 1097 00:54:12,600 --> 00:54:14,920 Speaker 15: and I think we're a great resource for them. 1098 00:54:15,480 --> 00:54:17,000 Speaker 1: Talk to us about I'm not sure if this is 1099 00:54:17,040 --> 00:54:19,040 Speaker 1: part of your business model, but we've seen in another 1100 00:54:19,200 --> 00:54:23,560 Speaker 1: retail spaces by now Pay Later. Is that something you 1101 00:54:23,560 --> 00:54:24,880 Speaker 1: guys offer? Is that a driver? 1102 00:54:25,160 --> 00:54:27,520 Speaker 3: How do you think about that? Yeah, that is a driver. 1103 00:54:27,640 --> 00:54:30,080 Speaker 15: So over the last couple of years, we've seen buy Now, 1104 00:54:30,080 --> 00:54:34,080 Speaker 15: Pay Later actually triple. It was running pretty steady around 1105 00:54:34,120 --> 00:54:36,280 Speaker 15: two and a half percent of revenue for e commerce, 1106 00:54:36,600 --> 00:54:39,600 Speaker 15: and recently it popped up. At the end of Q 1107 00:54:39,640 --> 00:54:42,560 Speaker 15: two it was running seven point nine percent, So we 1108 00:54:42,840 --> 00:54:45,160 Speaker 15: have seen a large uptake in that. I think it's 1109 00:54:45,200 --> 00:54:48,080 Speaker 15: a way that consumers are trying to balance the needs, 1110 00:54:48,480 --> 00:54:50,760 Speaker 15: their everyday needs with their car repair needs. 1111 00:54:51,680 --> 00:54:53,759 Speaker 1: You know, it's funny you go to the Consumer Electronics 1112 00:54:53,760 --> 00:54:56,719 Speaker 1: show and it's really an auto show, you know, with 1113 00:54:56,760 --> 00:54:58,680 Speaker 1: a little bit of technology around it. I mean, I 1114 00:54:58,719 --> 00:55:01,480 Speaker 1: think the auto industry, you know, controls way more than 1115 00:55:01,520 --> 00:55:04,879 Speaker 1: half the space they're out there in Vegas. How has 1116 00:55:05,040 --> 00:55:10,600 Speaker 1: like the computerization, the increase in technology and automobiles, How 1117 00:55:10,600 --> 00:55:11,840 Speaker 1: has that impacted your business? 1118 00:55:12,800 --> 00:55:12,960 Speaker 6: There? 1119 00:55:13,239 --> 00:55:15,200 Speaker 15: Actually hasn't been that much as an impact. You know. 1120 00:55:15,200 --> 00:55:18,640 Speaker 15: What we sell is a lot of the normal everyday 1121 00:55:18,680 --> 00:55:21,520 Speaker 15: items you need to repair your car. So even with 1122 00:55:21,560 --> 00:55:24,799 Speaker 15: a highly electric cut fied vehicle or even an EEV 1123 00:55:25,040 --> 00:55:28,640 Speaker 15: like a Tesla, they still have headlights, tail lights, door handles, 1124 00:55:29,239 --> 00:55:32,320 Speaker 15: ac compressors, radiators, all the normal nuts and bolts you 1125 00:55:32,400 --> 00:55:34,440 Speaker 15: might call it that go into a car. Even the 1126 00:55:34,520 --> 00:55:37,200 Speaker 15: most modern of all cars still has those basics. 1127 00:55:37,320 --> 00:55:40,080 Speaker 1: Okay, So you're not getting into the electronics and that 1128 00:55:40,120 --> 00:55:42,759 Speaker 1: type of stuff. That's something that you know, an onneer 1129 00:55:42,760 --> 00:55:45,360 Speaker 1: would have to go to the dealer or something like that. 1130 00:55:45,360 --> 00:55:48,480 Speaker 15: That's correct, Yeah, and I think those are usually very durable. 1131 00:55:48,600 --> 00:55:51,000 Speaker 15: So the ecu as you might call it, inside of 1132 00:55:51,000 --> 00:55:54,880 Speaker 15: a car that manages the brains of everything is very robust. 1133 00:55:55,120 --> 00:55:57,320 Speaker 15: The things that go out for people are the everyday 1134 00:55:57,320 --> 00:56:00,319 Speaker 15: items like the AC compressor, the window regulator that makes 1135 00:56:00,320 --> 00:56:00,960 Speaker 15: the window. 1136 00:56:00,680 --> 00:56:01,239 Speaker 7: Go up down. 1137 00:56:01,560 --> 00:56:04,560 Speaker 1: So is your competition kind of just my local car 1138 00:56:04,680 --> 00:56:05,600 Speaker 1: dealer in town. 1139 00:56:07,080 --> 00:56:09,439 Speaker 15: Our local competition is going to be really the brick 1140 00:56:09,480 --> 00:56:11,399 Speaker 15: and mortar, the big brick and mortars you might think about, 1141 00:56:11,560 --> 00:56:15,600 Speaker 15: or maybe a dealership where I think people that don't 1142 00:56:15,640 --> 00:56:18,359 Speaker 15: know about us might just walk in and pay three 1143 00:56:18,440 --> 00:56:20,920 Speaker 15: hundred dollars for a headlight without realizing that they could 1144 00:56:20,920 --> 00:56:23,200 Speaker 15: come to our website wait one or two days. You know, 1145 00:56:23,239 --> 00:56:25,279 Speaker 15: we cover ninety eight percent of the country and two 1146 00:56:25,320 --> 00:56:27,040 Speaker 15: day shipping, they could buy that same part for one 1147 00:56:27,120 --> 00:56:28,240 Speaker 15: hundred and thirty five dollars. 1148 00:56:28,920 --> 00:56:29,680 Speaker 3: So it's interesting. 1149 00:56:29,719 --> 00:56:32,200 Speaker 1: I'm just kind of wondering again kind of the growth 1150 00:56:32,200 --> 00:56:37,200 Speaker 1: of the business. It seems like, can you acquire customers? 1151 00:56:37,200 --> 00:56:39,200 Speaker 1: Can you market and say hey, you can do this, 1152 00:56:39,400 --> 00:56:41,400 Speaker 1: Like I'm not a handy person. I'm not a but 1153 00:56:41,440 --> 00:56:43,680 Speaker 1: if you say, hey, you can install this headlight. 1154 00:56:44,320 --> 00:56:46,960 Speaker 15: That's exactly right. So we recently just launched a line 1155 00:56:47,080 --> 00:56:50,160 Speaker 15: of YouTube instructional videos starting with a four to foot 1156 00:56:50,160 --> 00:56:53,480 Speaker 15: and fifty. It's the nation's most popular car, showing you 1157 00:56:53,520 --> 00:56:55,879 Speaker 15: how to replace a lot of parts on that. We're 1158 00:56:55,920 --> 00:56:58,080 Speaker 15: going to the Dodge Ram And we also recently launched 1159 00:56:58,080 --> 00:57:01,040 Speaker 15: a Spanish language version of this channel to kind of 1160 00:57:01,080 --> 00:57:03,680 Speaker 15: hit more audiences and make people feel comfortable that they 1161 00:57:03,680 --> 00:57:04,840 Speaker 15: can do these repairs themselves. 1162 00:57:04,880 --> 00:57:06,920 Speaker 1: That makes sense, all right, Ran, Thanks for taking the time. 1163 00:57:06,960 --> 00:57:09,759 Speaker 1: Appreciate learning a little bit about your company and kind 1164 00:57:09,760 --> 00:57:12,440 Speaker 1: of its expectations and kind of how the what are 1165 00:57:12,480 --> 00:57:14,640 Speaker 1: the drivers of this company? Ryan Lockwood, He's a CFO 1166 00:57:14,800 --> 00:57:17,760 Speaker 1: carparks dot com. You can check out the stock it 1167 00:57:17,840 --> 00:57:20,720 Speaker 1: is trades on the Nastaq p r TS. 1168 00:57:22,560 --> 00:57:25,640 Speaker 2: Thanks for listening to the Bloomberg Markets podcasts. You can 1169 00:57:25,680 --> 00:57:29,880 Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever. 1170 00:57:29,560 --> 00:57:32,240 Speaker 3: Podcast platform you prefer. I'm Matt Miller. 1171 00:57:32,480 --> 00:57:35,400 Speaker 2: I'm on Twitter at Matt Miller nineteen seventy three. 1172 00:57:35,840 --> 00:57:38,200 Speaker 3: And I'm Faul Sweeney. I'm on Twitter at pt Sweeney. 1173 00:57:38,360 --> 00:57:41,040 Speaker 1: Before the podcast, you can always catch us worldwide at 1174 00:57:41,040 --> 00:57:42,760 Speaker 1: Bloomberg Radio