WEBVTT - Markets, Banks, UPS, and Novo (Podcast) 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:05.280 my co host Matt Miller. 0:00:05.640 --> 0:00:09.600 Every business day we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:13.600 and Bloomberg experts, along with essential market moven news. 0:00:14.160 --> 0:00:17.279 Bind the Bloomberg Markets Podcast on Apple Podcasts or wherever 0:00:17.400 --> 0:00:20.400 you listen to podcasts, and at Bloomberg dot com slash podcast. 0:00:20.400 --> 0:00:23.239 Matt Miller, Paul Sweeney here in a Bloomberg Interactive Broker studio. 0:00:23.280 --> 0:00:25.279 We are streaming on YouTube. Go check it out there. 0:00:25.640 --> 0:00:28.960 Search Bloomberg Global News and you'll get the feed there. 0:00:29.280 --> 0:00:30.280 Nancy Curtin joins us. 0:00:30.320 --> 0:00:32.519 She is a partner Global CEO and Head of Investment 0:00:32.520 --> 0:00:36.479 Advisory at Alti Global, based in London, but joining us 0:00:36.479 --> 0:00:38.880 live here in our Bloomberg Interactive Broker studio. Nancy, thanks 0:00:38.880 --> 0:00:41.479 so much for joining us here. I'm just gonna put 0:00:41.560 --> 0:00:44.159 I'm gonna ask you guys for your big picture perspective, 0:00:44.159 --> 0:00:47.640 because twenty twenty two you couldn't hide anywhere. Equities got crushed, 0:00:47.680 --> 0:00:50.960 bonds you got crushed This year better, particularly if you're 0:00:51.000 --> 0:00:54.440 in some big cap tech names. How are you, guys 0:00:54.520 --> 0:00:57.000 at ALTI Global looking at the market right now? 0:00:57.480 --> 0:00:59.960 Okay, Well, first of all, thank you very much for 0:01:00.120 --> 0:01:03.000 having me. Delighted to be here. First of all, we 0:01:03.200 --> 0:01:05.520 entered twenty twenty three thinking it would be a better 0:01:05.680 --> 0:01:08.720 year for risk assets. You know, back to back declines 0:01:08.800 --> 0:01:11.600 in stocks and bonds quite unusual. It's only happened about 0:01:11.640 --> 0:01:13.920 two percent of the dime in one hundred years. And 0:01:14.000 --> 0:01:17.440 also sentiment was incredibly verish. But where are we now, 0:01:17.520 --> 0:01:20.560 because now the market has risen, we've remain invested throughout 0:01:20.560 --> 0:01:24.560 the year. Actually we've increased risk exposure slightly. So where 0:01:24.560 --> 0:01:27.440 do we go from here? Look, trees don't grow into 0:01:27.520 --> 0:01:30.000 the skies, So the first comment is, you know, don't 0:01:30.000 --> 0:01:33.080 expect markets to be in a linear trend upward from here. 0:01:33.440 --> 0:01:35.840 And we've seen some wobbles already this morning. That is 0:01:35.959 --> 0:01:40.440 healthy a consolidation for markets. But what do we think 0:01:40.680 --> 0:01:43.959 we think, Look, the Fed will be successful in bringing 0:01:44.000 --> 0:01:48.240 inflation down. We already see some encouraging signs. Headline inflation 0:01:48.400 --> 0:01:52.640 three percent remembers nine percent a year ago, so that's encouraging. 0:01:52.680 --> 0:01:53.880 There's some sticky bits. 0:01:54.080 --> 0:01:56.600 In core inflation, but we do think the Fed will 0:01:56.640 --> 0:02:00.600 be successful in bringing inflation down. And looking to twenty 0:02:00.600 --> 0:02:02.640 twenty four, which is what we'll start to do a 0:02:02.640 --> 0:02:05.360 couple of weeks away September, we start to look forward 0:02:05.360 --> 0:02:09.240 to next year. We think the outlook for a FED pause, 0:02:09.240 --> 0:02:13.440 if not pivot, is encouraging for risk assets. 0:02:13.480 --> 0:02:16.119 But because of a recession, right, I mean, the FED 0:02:16.160 --> 0:02:18.600 can't raise rates five hundred and fifty bases points without 0:02:18.600 --> 0:02:19.840 pushing us into a recession. 0:02:20.480 --> 0:02:24.720 You know, let's talk about the reality of the data 0:02:24.720 --> 0:02:25.720 coming in has. 0:02:25.680 --> 0:02:27.280 Been incredibly encouraging. 0:02:27.720 --> 0:02:30.200 I can't say that there may not be a mild recession, 0:02:30.480 --> 0:02:32.840 but I'll tell you the soft landing narrative is getting 0:02:32.880 --> 0:02:36.679 some increased credibility from the economic data. Let's just take 0:02:36.680 --> 0:02:40.160 a first look at the consumption numbers. Pretty strong. Have 0:02:40.240 --> 0:02:43.880 you traveled lately? I mean it's boomy, Okay, so you 0:02:43.880 --> 0:02:47.080 know the consumer still has pent up savings from the pandemic. 0:02:47.280 --> 0:02:51.400 They are using this to travel and experience obviously goods 0:02:52.040 --> 0:02:55.760 less so. But actually, we think the interesting thing this 0:02:55.919 --> 0:02:59.080 year is the US economy has been much less interest 0:02:59.160 --> 0:03:00.079 rates since. 0:03:00.440 --> 0:03:01.560 What do I mean by that? 0:03:01.960 --> 0:03:06.520 Seventy five percent of mortgages over thirty years are below 0:03:06.720 --> 0:03:09.160 four percent. In other words, they locked in lower rates 0:03:09.200 --> 0:03:12.880 a couple of years ago, companies the same things locked 0:03:12.919 --> 0:03:16.679 in lower interest rates, net interest cost us a percentage 0:03:16.680 --> 0:03:21.760 of profitability has been declining, not rising, declining. Then we 0:03:21.800 --> 0:03:24.400 have some fiscal spending one and a half trillion. These 0:03:24.400 --> 0:03:28.000 are multi year programs, but that's additive. And finally, one 0:03:28.000 --> 0:03:31.240 of our long term themes is we think that companies 0:03:31.320 --> 0:03:35.320 will be investing, capex is likely to increase, and that 0:03:35.360 --> 0:03:39.360 will be a support for economic growth looking forward. So 0:03:39.680 --> 0:03:42.400 yet we could have a mild recession. But I have 0:03:42.480 --> 0:03:45.200 to say the soft landing is getting a lot of 0:03:45.280 --> 0:03:47.160 validation from the economic numbers. 0:03:47.400 --> 0:03:49.200 I have to push back on that. Paul Go, you 0:03:49.240 --> 0:03:50.840 don't want to though, right because you're hoping for a 0:03:50.960 --> 0:03:51.520 soft landing. 0:03:52.040 --> 0:03:52.440 I'm all in. 0:03:52.560 --> 0:03:54.920 I just feel like, you know, the curve, the three 0:03:55.000 --> 0:03:59.840 month ten year inversion is typically not this wrong. We've 0:03:59.880 --> 0:04:04.080 got M two money supply contraction and Gary shillings that 0:04:04.120 --> 0:04:05.440 we got the I just so I was hanging out 0:04:05.440 --> 0:04:10.520 with Gary Shilling on Sunday. But the thing is, I think, 0:04:10.880 --> 0:04:13.960 you know, the wealthy people might still have savings, but 0:04:14.040 --> 0:04:17.120 I feel like the bottom eighty percent maybe don't have 0:04:17.240 --> 0:04:19.920 any left, and we could be getting to the edge 0:04:19.920 --> 0:04:20.400 of a cliff. 0:04:20.400 --> 0:04:21.200 Here for them. 0:04:21.880 --> 0:04:26.279 Well, let's go into the capex spend because we haven't 0:04:26.320 --> 0:04:30.080 had capital expenditures in over a decade. Like companies, why 0:04:30.120 --> 0:04:32.240 you know, why do you need to invest when labor 0:04:32.320 --> 0:04:36.160 costs are like really low and money's free and commodity 0:04:36.160 --> 0:04:38.880 prices are a week But we think the companies will 0:04:38.920 --> 0:04:41.479 be investing. This is one of the surprises we think 0:04:41.520 --> 0:04:42.920 for economic growth ahead. 0:04:43.960 --> 0:04:44.440 Already. 0:04:44.480 --> 0:04:48.080 Capex in the second quarter GDP number was up ten percent. 0:04:48.440 --> 0:04:51.560 In the recent second quarter earnings, companies in the S 0:04:51.560 --> 0:04:55.080 and P reported a fifteen percent increasing capex. Why do 0:04:55.160 --> 0:04:58.320 I go on about capex because it expands the productive 0:04:58.440 --> 0:05:02.080 potential of the economy to surprise on the upside. And 0:05:02.120 --> 0:05:05.359 by the way, did you see the labor productivity numbers 0:05:05.800 --> 0:05:09.200 three point seven percent? Let me see three point seven percent. 0:05:09.360 --> 0:05:11.560 That's up from one point two in the first quarter. 0:05:11.880 --> 0:05:16.960 And remember labor productivity is a subtraction from inflation to 0:05:17.080 --> 0:05:19.960 get your unit labor costs. Okay, so let's go back 0:05:19.960 --> 0:05:22.880 to your inverted deal curve and decline and money supply. Sure, 0:05:23.160 --> 0:05:27.480 these are normally harbingers of recessionary activity, but I would 0:05:27.480 --> 0:05:29.839 also point to the fact that eal curves have begun 0:05:29.880 --> 0:05:32.479 to steepen in the last week or so. We think 0:05:32.520 --> 0:05:35.400 this will be a trend that will continue to see. 0:05:35.760 --> 0:05:37.800 And as I said, we think there are some solid 0:05:37.839 --> 0:05:39.720 things that will support economic growth that. 0:05:39.800 --> 0:05:41.400 Weren't there in the past. 0:05:41.760 --> 0:05:45.600 Keep a close eye on capex, on shoine of manufacturing activity, 0:05:45.640 --> 0:05:49.799 spending on jen Ai, spending on energy efficiency, and taking 0:05:49.800 --> 0:05:51.359 advantage of the fiscal stimulus. 0:05:51.400 --> 0:05:55.320 All right, so I've been overweight all the Miracle seven stocks, 0:05:55.400 --> 0:05:58.760 so I've just been killing it. Can I, now, you know, 0:05:59.080 --> 0:06:02.279 change the asset out and maybe go smaller, MidCap, try 0:06:02.279 --> 0:06:05.599 to take advantage of increased capital spending, increased economic growth. 0:06:05.600 --> 0:06:08.560 Can I take my profits in those big names. 0:06:08.720 --> 0:06:12.040 Well, I wouldn't take your profits, right because we really 0:06:12.320 --> 0:06:15.680 you know, the infrastructure layer of Jenai is in the 0:06:15.720 --> 0:06:19.159 early innings here. I would try to look more broadly 0:06:19.240 --> 0:06:22.760 beyond the Magnificent seven, those other companies that will contribute 0:06:22.800 --> 0:06:26.280 to development of the infrastructure layer. We can't have Jenai 0:06:26.440 --> 0:06:29.240 and large language models without an infrastructure layer. So we 0:06:29.320 --> 0:06:32.720 do need a lot of building there. But you're right, 0:06:33.240 --> 0:06:36.600 you know they're expensive. They've discounted a lot of good news, 0:06:36.880 --> 0:06:40.200 and so what we've done is we've leaned into the underperformers, 0:06:40.680 --> 0:06:45.279 particularly MidCap, less small cap, MidCap, more quality oriented, less leverage, 0:06:46.000 --> 0:06:49.159 more exposed to what I call this onshine of manufacturing 0:06:49.279 --> 0:06:53.120 theme cap x expend et cetera. So we've leaned into 0:06:53.360 --> 0:06:57.039 value and MidCap because they're forty percent cheaper than you are, 0:06:57.120 --> 0:07:01.400 Magnificent seven, and they trade at multi decade discounts versus 0:07:01.440 --> 0:07:03.919 history and large caps as well. So that's one of 0:07:03.920 --> 0:07:05.440 the things that we've done more recently. 0:07:06.160 --> 0:07:07.560 Maybe just buy the equal weight to S and P 0:07:07.640 --> 0:07:08.200 five hundred. 0:07:08.600 --> 0:07:09.240 That's so fun. 0:07:09.760 --> 0:07:12.320 I mean, if you think the rest, if you think 0:07:12.360 --> 0:07:14.320 the rest of the stocks are going to catch up 0:07:14.320 --> 0:07:16.640 to your mech spw ring, Yeah, equal weighted. 0:07:16.680 --> 0:07:19.200 Okay, all right, So what are some you know, we 0:07:19.280 --> 0:07:22.120 had the news today Moody's kind of dumping on the 0:07:22.160 --> 0:07:22.640 banks again. 0:07:22.680 --> 0:07:24.160 It seems like kind of old news. 0:07:24.720 --> 0:07:27.800 How concerned are you at all with the US banking 0:07:28.000 --> 0:07:30.520 system or maybe the global banking I'm sorry, where. 0:07:30.360 --> 0:07:32.800 Was Moody's back in March? I'm sorry? 0:07:32.960 --> 0:07:36.200 I mean, like months later we wake up and say, 0:07:36.280 --> 0:07:39.320 the small and regional banks have a bit of a well, 0:07:39.320 --> 0:07:41.520 there's you know, they're funding costs of risen and they've 0:07:41.520 --> 0:07:44.440 got exposure to commercial real estate a trillion and a 0:07:44.480 --> 0:07:44.960 half of that. 0:07:44.960 --> 0:07:46.840 That remains a risk, right, but. 0:07:46.840 --> 0:07:50.000 We've known that risk since March. That hasn't prevented markets 0:07:50.040 --> 0:07:53.680 from moving higher. We think this is a multi year development. 0:07:53.680 --> 0:07:55.680 In other words, we're we're not going to crash overnight 0:07:56.080 --> 0:07:58.840 from commercial real estate. But I do wonder where these 0:07:58.960 --> 0:08:02.000 rating agencies were back in March while we're doing the 0:08:02.000 --> 0:08:02.960 downgrades now. 0:08:03.360 --> 0:08:05.400 All right, So that's a way of saying that you're 0:08:05.440 --> 0:08:08.160 not overly concerned about the US banking system or the 0:08:08.200 --> 0:08:09.240 regional bank It is. 0:08:09.400 --> 0:08:09.720 It is. 0:08:09.880 --> 0:08:13.560 Look, you know, banking is hugely important to economic growth, 0:08:13.600 --> 0:08:15.960 and so you know regional banks are you know where 0:08:16.000 --> 0:08:19.160 you go small and medium sized businesses. And we do 0:08:19.200 --> 0:08:21.480 think lending will be more constrained. We've seen that in 0:08:21.520 --> 0:08:24.080 the SLEWS number seen your Loan Officer survey have come 0:08:24.120 --> 0:08:26.440 down a bit. But we don't think it's enough to 0:08:26.720 --> 0:08:30.040 slow the economy certainly into a deep recession, right, you know, 0:08:30.320 --> 0:08:34.599 mild recession, slow down, soft landing. It's all a bit nuanced. 0:08:34.880 --> 0:08:38.000 But don't forget cap expending, which we think will. 0:08:37.840 --> 0:08:40.160 Be sad is a takeaway from today, No question about it. 0:08:40.400 --> 0:08:42.880 You're based in London. How are things in London? Because 0:08:42.880 --> 0:08:44.079 I'm not going because it's too crowded. 0:08:45.280 --> 0:08:48.200 Okay, tourism is on fire. You go down Region Street, 0:08:48.240 --> 0:08:51.400 you can't even move. But look London, as I call 0:08:51.520 --> 0:08:55.920 a special child category. It's got lots of issues from 0:08:55.920 --> 0:08:59.319 Brexit to higher level of inflation, to slower growth to 0:09:00.000 --> 0:09:03.760 have you seen interest rates? Ah, God, don't get me started. 0:09:03.800 --> 0:09:07.080 It also has you know, a stock market that's very 0:09:07.160 --> 0:09:10.800 commodity and oil sensitive and bank sensitive. 0:09:10.880 --> 0:09:12.880 So it's a bit of a special child. 0:09:13.200 --> 0:09:13.280 Now. 0:09:13.400 --> 0:09:16.520 In terms of international exposure, we like Europe much more. 0:09:16.559 --> 0:09:20.680 We're getting exposure to industrial shares, cappac spend, luxury still 0:09:20.720 --> 0:09:24.040 continues to be quite strong. Our positive vertings growth in 0:09:24.080 --> 0:09:27.319 Europe despite the fact that economic growth has been pretty muted. 0:09:27.840 --> 0:09:29.880 So that's been where we've had exposure. 0:09:30.120 --> 0:09:31.640 All right, Nancy, thanks so much for coming in. 0:09:31.679 --> 0:09:34.679 Really appreciate you coming in live into our Bloomorg Interactive 0:09:34.720 --> 0:09:35.400 Broker studio. 0:09:35.800 --> 0:09:36.800 What's our takeaway today? 0:09:36.880 --> 0:09:39.080 We have to get Nancy back, is my takeaway. My 0:09:39.120 --> 0:09:41.520 takeaways We have to get her back. But Capex it's 0:09:41.520 --> 0:09:42.360 on that keepech for sure. 0:09:42.520 --> 0:09:45.040 Nancy's a Partner Global CIO head of Investment Advisor read 0:09:45.080 --> 0:09:47.640 Alte Global based in London, but again joining us. 0:09:47.520 --> 0:09:49.719 Here in our Bloomberg studios and Eyork. We appreciate that. 0:09:50.760 --> 0:09:51.960 You're listening to the team. 0:09:52.320 --> 0:09:55.680 Ken's our live program Bloomberg Markets weekdays at ten am 0:09:55.720 --> 0:09:59.120 Eastern on Bloomberg dot Com, the iHeartRadio app, and the 0:09:59.120 --> 0:10:03.000 Bloomberg Business or listen on demand wherever you get your podcasts. 0:10:05.440 --> 0:10:08.520 Matt Miller, Paul Sweeney here in the Bloomberg Interactor Broker Studio. Yes, 0:10:08.559 --> 0:10:10.440 we are streaming live on YouTube and go over and 0:10:10.480 --> 0:10:15.000 check it out. Just search Bloomberg Global News. Let's talk transportationation, 0:10:15.120 --> 0:10:18.440 Let's talk trucks, all that fun stuff. Lee Claskow joins us. 0:10:18.440 --> 0:10:21.679 He sector head Senior annalys Freight, Transportation and Logistics. That's 0:10:21.679 --> 0:10:23.400 a big title. It's a lot bigger than when I 0:10:23.440 --> 0:10:26.240 knew him. But he's a Bloomberg intelligence. He does it all, 0:10:26.280 --> 0:10:28.360 from the ships to the trucks, to the to the 0:10:28.400 --> 0:10:30.120 railroads and all that stuff in between. 0:10:30.960 --> 0:10:31.880 Ups Lee. 0:10:32.240 --> 0:10:36.200 United Parcel Service Big Brown had some disappointing numbers. My 0:10:36.400 --> 0:10:40.120 question is are there disappointing numbers and their guidance Is 0:10:40.160 --> 0:10:42.440 it a result of their new Teamsters contract or is 0:10:42.440 --> 0:10:46.640 it reflecting economy slowing down? Maybe people aren't getting as 0:10:46.679 --> 0:10:48.640 many boxes as they used to. What's driving it? 0:10:48.840 --> 0:10:48.960 Right? 0:10:49.000 --> 0:10:50.640 Well, first off, if you can call me can whenever 0:10:50.679 --> 0:10:51.000 you want. 0:10:51.040 --> 0:10:53.640 But you know, they had actually. 0:10:53.320 --> 0:10:55.880 A barn of fire, Lee Clasgow barn of fire. 0:10:56.600 --> 0:10:59.720 They had actually a pretty decent print on the second quarter, 0:10:59.800 --> 0:11:03.120 but they did guide down and you know, we expect 0:11:03.400 --> 0:11:07.480 the increase in costs from that new labor agreement is 0:11:07.520 --> 0:11:10.600 going to be maybe a dollar in EPs headwind. That's 0:11:10.679 --> 0:11:14.160 kind of really how we're thinking about it. Obviously, that's 0:11:14.200 --> 0:11:16.760 assuming they're not going to be able to mitigate that 0:11:17.000 --> 0:11:22.160 through productivity gains pricing, and that is what they're going 0:11:22.240 --> 0:11:25.600 to do. You know, management said that probably in the 0:11:25.640 --> 0:11:27.199 spring they're gonna they're gonna. 0:11:26.960 --> 0:11:29.440 Probably lay out how they're going to get back. 0:11:29.280 --> 0:11:32.760 To twelve percent margins on their domestic business. And that's 0:11:32.800 --> 0:11:35.920 something that you know, we're relatively bullish about because UPS 0:11:36.000 --> 0:11:40.040 has shown their ability to really embrace not only technology, 0:11:40.240 --> 0:11:43.840 but also to go into verticals or businesses that are 0:11:43.880 --> 0:11:46.640 a lot more profitable, like healthcare or the small to 0:11:46.720 --> 0:11:47.840 mid sized shipper. 0:11:49.040 --> 0:11:52.080 You know, I heard you on surveillance this morning talking 0:11:52.080 --> 0:11:56.360 about this ups story as well as the Yellow Yellow story. 0:11:57.160 --> 0:12:00.800 And I not note that they got emergency hunting last night. 0:12:00.920 --> 0:12:03.040 Did that's seventeen percent to nice? 0:12:03.240 --> 0:12:06.000 Is that not usury? Is that not a usury level? 0:12:06.600 --> 0:12:06.840 Yeah? 0:12:06.880 --> 0:12:09.320 I mean what I know, I don't cover Yellow, but 0:12:09.360 --> 0:12:11.520 what I know about the deal is that it's just 0:12:11.760 --> 0:12:14.560 it's debt, so just to finance them while they're trying 0:12:14.600 --> 0:12:17.079 to sell everything. The government is supposed to be made 0:12:17.120 --> 0:12:20.760 whole before they're able to get paid on that seventeen percent. 0:12:20.880 --> 0:12:22.760 So I mean, what do they have refinance? 0:12:23.000 --> 0:12:26.040 Just just selling their trucks and warehouses, right because they're 0:12:26.080 --> 0:12:28.920 not any customer that was going to use Yellow. As 0:12:28.960 --> 0:12:31.280 soon as they heard there was going to be a strike, 0:12:31.400 --> 0:12:33.520 was like, let's find another trucker right now. 0:12:33.760 --> 0:12:36.319 So yeah, this is not a restructuring. This is liquidation. 0:12:36.679 --> 0:12:39.120 And their trucks are old, their trailers are old. If 0:12:39.120 --> 0:12:41.640 you see them on the road relative to its peers, 0:12:41.720 --> 0:12:44.679 you'd be like, that's not a great looking truck. They're 0:12:44.800 --> 0:12:47.000 very old. They've had issues with that for. 0:12:46.960 --> 0:12:47.559 A long time. 0:12:47.720 --> 0:12:50.679 They don't own a lot of the facilities that they operated, 0:12:50.679 --> 0:12:52.960 and they lease a lot of them, but there are 0:12:53.000 --> 0:12:54.960 going to be some facilities that they could they could 0:12:55.000 --> 0:12:57.599 sell and to raise that money to pay back and 0:12:57.679 --> 0:13:01.679 only the government, but also that new round of financing. 0:13:01.720 --> 0:13:03.160 All right, So we'll wrap that up and put it 0:13:03.200 --> 0:13:07.240 to the side. In terms of ups, Can they not 0:13:07.520 --> 0:13:10.080 raise prices significantly. 0:13:09.640 --> 0:13:10.160 Well, they can. 0:13:10.520 --> 0:13:13.520 Well, let's take a step back. They can raise prices 0:13:15.000 --> 0:13:18.840 which will mitigate the inflationary pressures that they're facing. The 0:13:18.920 --> 0:13:21.440 first year of the new labor contract, there's a big 0:13:21.480 --> 0:13:23.440 step up in costs for them, so it kind of 0:13:23.480 --> 0:13:25.360 barbells in the first year. In the five year in 0:13:25.440 --> 0:13:27.720 terms of the step up, it's around a three point 0:13:27.800 --> 0:13:30.480 three k gar in terms of inflationary pressure, and that 0:13:30.520 --> 0:13:33.440 includes not only the wages that they're getting paid, but 0:13:33.520 --> 0:13:36.080 also the benefits. So if you look at it through 0:13:36.120 --> 0:13:38.800 the whole five years, it's really not that bad. But 0:13:38.840 --> 0:13:40.920 the first step up is going to be a big headwind. 0:13:41.120 --> 0:13:43.079 So you know, we think that they can go back 0:13:43.080 --> 0:13:44.800 to earnings growth in twenty twenty four. 0:13:45.520 --> 0:13:47.360 Matt's wondering what Caker is, but we'll get back to 0:13:47.400 --> 0:13:47.760 that later. 0:13:47.960 --> 0:13:50.160 I mean, I mean, this is just one of those 0:13:50.160 --> 0:13:53.800 phrases that you throw around and I think it's another 0:13:53.840 --> 0:13:56.240 thing that I always forget, But I'll. 0:13:56.120 --> 0:13:58.480 Let compound an annual growth rate. 0:13:58.600 --> 0:14:00.760 Okay, bo, there you go. You to bring it back 0:14:00.840 --> 0:14:02.720 up in this next question. I think a lot of 0:14:02.720 --> 0:14:04.760 listeners are like, hey, thanks Matt, Thanks Matt. 0:14:04.760 --> 0:14:05.280 I didn't know what. 0:14:05.280 --> 0:14:08.080 Kegar was either, exactly Matt's favorite. 0:14:08.080 --> 0:14:10.240 One of Matt's favorite functions on the Bloomberg Kriminal is 0:14:10.559 --> 0:14:13.080 comp get comparative returns. 0:14:13.080 --> 0:14:14.080 So I put that up. 0:14:13.960 --> 0:14:17.600 For UPS and FedEx. UPS over the last five years 0:14:17.640 --> 0:14:20.720 is compounding and annual growth in the stock price eleven 0:14:20.760 --> 0:14:22.640 point seventy five percent, a little bit better than they 0:14:22.680 --> 0:14:25.720 s and p FedEx only three point four percent. Why 0:14:25.760 --> 0:14:29.240 has UPS been rewarded more in the stock market versus FedEx? 0:14:29.320 --> 0:14:30.720 Is it a different model? 0:14:31.120 --> 0:14:33.920 Yeah, it really depends on the timeframe you're looking at, 0:14:33.960 --> 0:14:37.320 Like this year, FedEx has been on fire relative to UPS. 0:14:37.320 --> 0:14:39.760 But I like the comp function because it just defaults 0:14:39.800 --> 0:14:42.000 to five years, and I think that's a great time 0:14:42.040 --> 0:14:42.920 period to look at. 0:14:43.080 --> 0:14:46.840 And over that five year period, you know, UPS started 0:14:47.000 --> 0:14:50.600 right sizing their network, selling businesses that maybe didn't make 0:14:50.600 --> 0:14:52.720 a lot of money, like they're less than truckload business. 0:14:52.720 --> 0:14:55.960 The same business that Yellow was in LTL LTL less 0:14:55.960 --> 0:14:58.800 than truckload and they were a unionized carrier, and they 0:14:58.800 --> 0:15:02.040 were they were getting on a good year one hundreds 0:15:02.040 --> 0:15:04.120 to two hundred basis points in margins. It was just 0:15:04.400 --> 0:15:07.520 not a great business. So they sold that. They're investing 0:15:07.560 --> 0:15:12.520 heavenly in technology. They are automating their facilities, you know, 0:15:12.560 --> 0:15:15.760 they're they're reducing the numbers of o's or mistakes like 0:15:15.760 --> 0:15:17.800 if the wrong shipment goes on the wrong. 0:15:17.600 --> 0:15:20.840 Truck by half. They're just they're. 0:15:20.640 --> 0:15:23.640 Doing really just a great job in their investment cycle. 0:15:24.080 --> 0:15:26.520 And not only that, like I said earlier, they're focusing 0:15:26.520 --> 0:15:30.320 on more profitable businesses. They're focusing on the healthcare businesses 0:15:30.360 --> 0:15:32.000 and the small to mid sized businesses. 0:15:32.240 --> 0:15:32.840 They had a. 0:15:33.040 --> 0:15:35.600 Somewhat of an outsider. She was a board member, Carol Toomey. 0:15:35.720 --> 0:15:37.640 She came into CEO a couple of years ago. I 0:15:37.720 --> 0:15:40.000 think it's like two years nep by now, and she's 0:15:40.040 --> 0:15:44.040 really done an excellent job. People were very you know, 0:15:44.920 --> 0:15:47.520 kind of not sure if she was the right person, 0:15:47.600 --> 0:15:51.920 but she's proved all of her critics wrong and UPS 0:15:51.960 --> 0:15:54.280 has really been operating on all cylinders. 0:15:54.360 --> 0:15:56.160 But now if their costs are going to go up 0:15:56.440 --> 0:15:59.120 and they have to raise prices. Does this give FedEx 0:15:59.120 --> 0:16:01.080 a chance to take a way more share and do 0:16:01.200 --> 0:16:01.880 better well? 0:16:02.040 --> 0:16:04.320 UPS on their call this morning they called out that 0:16:04.560 --> 0:16:09.160 about one point two million packages per day were diverted 0:16:09.240 --> 0:16:13.440 because of the potential for the strike, and they said 0:16:13.440 --> 0:16:15.280 about a third of that went to FedEx, about a 0:16:15.320 --> 0:16:17.200 third of that went to the US Postal Service, and 0:16:17.320 --> 0:16:19.720 another third once is regional carriers that you and I 0:16:19.760 --> 0:16:23.440 probably don't know the names of smaller players, and you 0:16:23.480 --> 0:16:27.560 know they will probably win back some of that freight FedEx. 0:16:27.840 --> 0:16:28.560 Some of it might be. 0:16:28.480 --> 0:16:30.360 Sticky, but at the end of the day, you know, 0:16:30.640 --> 0:16:33.640 a shipper will use a particular FedEx or UPS not 0:16:33.680 --> 0:16:35.160 just on price, but a lot of it has to 0:16:35.200 --> 0:16:37.360 do its service. And if they were with UPS before 0:16:37.800 --> 0:16:39.880 because of service, are probably going to go back to 0:16:40.000 --> 0:16:41.560 UPS real quick. 0:16:42.040 --> 0:16:44.040 Were we in a supply chain? Are we kind of fixed? 0:16:44.560 --> 0:16:45.920 Do you think just a global supply chain? 0:16:46.000 --> 0:16:46.080 Right? 0:16:46.120 --> 0:16:46.480 What are something? 0:16:46.600 --> 0:16:47.400 Is always it fixed? 0:16:47.440 --> 0:16:47.640 Yeah? 0:16:47.920 --> 0:16:50.280 No, because every week it's something new, right, Okay, Like 0:16:50.320 --> 0:16:54.360 it's whether the Canadian West Coast ports just got you know, 0:16:54.400 --> 0:16:57.240 that just ended, So there's always something different, you know, 0:16:57.280 --> 0:16:59.080 the Panama Canal, there's not enough water for. 0:16:59.080 --> 0:16:59.880 Ships, Is that right? 0:17:00.200 --> 0:17:00.320 Uh? 0:17:00.440 --> 0:17:03.200 Yeah, they have They have to operate with less freight 0:17:03.280 --> 0:17:05.480 on them, and it makes it a lot more expensive 0:17:05.480 --> 0:17:07.320 than to send the freight through the Panama Canal. 0:17:07.400 --> 0:17:09.399 There's a great book I read about the building of 0:17:09.440 --> 0:17:10.920 the Panama can I forget who wrote it, but it 0:17:11.000 --> 0:17:11.840 is an awesome book. 0:17:12.000 --> 0:17:13.440 It's a great story. Makes me I want to go 0:17:13.480 --> 0:17:14.240 to the Panama. 0:17:13.920 --> 0:17:15.240 Can app When did you read that? I'm going to 0:17:15.280 --> 0:17:16.520 guess you read that twenty years ago. 0:17:16.560 --> 0:17:18.399 No, couple three years ago, maybe before you. 0:17:18.480 --> 0:17:20.680 There's a drought there the lake that fills it up. 0:17:20.840 --> 0:17:22.920 Is that's the problem? All right? 0:17:22.920 --> 0:17:26.359 Ten seconds, Leek clasical transportation analyst Bloomberg Intelligence joins us. 0:17:26.680 --> 0:17:29.800 You're listening to the tape cans Are live program Bloomberg 0:17:29.840 --> 0:17:33.439 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:17:33.480 --> 0:17:35.440 tune in app, Bloomberg dot Com, and. 0:17:35.400 --> 0:17:36.720 The Bloomberg Business App. 0:17:36.760 --> 0:17:39.600 You can also listen live on Amazon Alexa from our 0:17:39.600 --> 0:17:44.000 flagship New York station just say Alexa playing Bloomberg eleven thirty. 0:17:45.400 --> 0:17:46.720 All right, what kind of the news today? 0:17:46.760 --> 0:17:48.639 One of the news drivers this morning has been Moodies 0:17:48.640 --> 0:17:51.880 downgrading the credit ratings of a bunch of the regional 0:17:52.040 --> 0:17:55.000 super regional banks. It seems like where were you when 0:17:55.000 --> 0:17:57.879 we needed your butt? Here we are Chris Whalen joins us, 0:17:57.960 --> 0:18:00.119 Chairman of Whale and Global Advisors. We always look to 0:18:00.119 --> 0:18:03.320 talk to Chris, particularly about the banks. I mean, Chris, 0:18:03.520 --> 0:18:06.120 help us out. You're an expert in this rating stuff 0:18:06.560 --> 0:18:08.720 in the banks. Chris, what do you think about Moodies 0:18:08.840 --> 0:18:09.880 and their call here? 0:18:11.119 --> 0:18:14.960 The Moody's action today was very specific. They were looking 0:18:15.000 --> 0:18:18.520 at certain banks and they took the decision to downgrade them. 0:18:18.880 --> 0:18:21.240 What I think, and that's going to come more. We're 0:18:21.240 --> 0:18:23.040 going to see a lot more of this because they're 0:18:23.080 --> 0:18:27.880 adjusting their entire ratings complex for banks to the changes 0:18:27.920 --> 0:18:30.840 we see in the market and to the higher interest rates. 0:18:30.840 --> 0:18:34.840 So the basil obviously is going to reduce profitability. So 0:18:34.880 --> 0:18:37.760 there's a lot of negatives that they're adjusting to. But 0:18:37.840 --> 0:18:39.800 the thing we have to be aware of is that 0:18:39.840 --> 0:18:42.760 when you see a sovereign downgrade for the United States, 0:18:43.160 --> 0:18:45.040 and we can no longer ignore a S and P 0:18:45.280 --> 0:18:47.280 as we have for the past decade. Right, we have 0:18:47.320 --> 0:18:49.840 two of them now, so everybody's going to have to 0:18:49.920 --> 0:18:53.359 use double level plus instead of triple A. And what 0:18:53.400 --> 0:18:55.840 that means is that the big banks, the ones that 0:18:55.920 --> 0:19:00.280 get uplift because there's an assumption of sovereign support, are 0:19:00.359 --> 0:19:03.040 going to go down a notch. And and I think 0:19:03.080 --> 0:19:05.680 you can assume all the agencies will have to adjust. 0:19:06.400 --> 0:19:09.320 In Japan they give you two notches for the big banks. 0:19:09.760 --> 0:19:12.080 In Europe they give you two notches because there's an 0:19:12.119 --> 0:19:14.560 assumption that they're going to bail them out. In the 0:19:14.720 --> 0:19:19.320 US not so much. You know, if any man for why. 0:19:19.280 --> 0:19:22.760 Not after what we just saw, you know, we got 0:19:22.920 --> 0:19:24.200 we got dec. 0:19:24.119 --> 0:19:28.680 You know, we're tempting fate. When we have politicians who 0:19:28.760 --> 0:19:31.960 think they can borrow money forever and who go around 0:19:31.960 --> 0:19:36.160 worried about global warming and ESG instead of doing their jobs, 0:19:36.600 --> 0:19:39.960 then this is what happens. People in the Buiden administration 0:19:40.080 --> 0:19:43.400 were terribly surprised. And it just shows you how how 0:19:43.760 --> 0:19:47.639 there's a lack of seriousness in Washington on fiscal issues. 0:19:47.720 --> 0:19:50.600 It's stunning on both sides. By the way, By the. 0:19:50.600 --> 0:19:53.199 Way, Chris I was, I sat down with Gary Shielding 0:19:53.240 --> 0:19:56.600 to talk about a lot of this stuff on Sunday afternoon, right, 0:19:56.680 --> 0:20:02.360 And the one the one question or the one problem 0:20:02.359 --> 0:20:04.800 that we don't really see clearly is the possibility of 0:20:04.800 --> 0:20:07.679 a debt bomb. You know, if we're continually running trillion 0:20:07.760 --> 0:20:12.480 dollar deficits, yeah, zero percent or at two or three percent, 0:20:12.640 --> 0:20:15.560 it's no big deal. But once you climb to five 0:20:15.600 --> 0:20:18.159 and a half to six, it starts to get worrisome. 0:20:18.520 --> 0:20:21.400 So what point is it too difficult for the United 0:20:21.440 --> 0:20:23.120 States to service it's growing debt. 0:20:24.800 --> 0:20:27.280 Well, it's not just the United States. There's a whole 0:20:27.400 --> 0:20:31.199 raft of sovereign issuers underneath the US, including all the 0:20:31.240 --> 0:20:35.160 agencies you have, all the states and the cities which 0:20:35.240 --> 0:20:39.280 ultimately depend on support from the federal government implicitly. Right, 0:20:39.800 --> 0:20:41.560 So there's a lot going on. And if we do 0:20:41.640 --> 0:20:45.000 a funding, say at the beginning of next year, where 0:20:45.040 --> 0:20:48.159 we're also doing an emergency bailout for a couple of 0:20:48.200 --> 0:20:51.920 cities that have been downgraded and can't issue bonds anymore 0:20:52.119 --> 0:20:55.080 at the old spreads, right, So the pricing is going 0:20:55.119 --> 0:20:59.080 to continue to change. Obviously throughout the whole complex. Pricing 0:20:59.160 --> 0:21:01.760 is going up credit and then some of them are 0:21:01.800 --> 0:21:04.679 going to be downgraded. I think New York City is 0:21:04.680 --> 0:21:07.720 going to be downgraded. So we'll be back in the seventies, 0:21:07.880 --> 0:21:10.920 you know, and I don't think the US is ready 0:21:10.920 --> 0:21:12.960 for that because we have so much debt at the 0:21:13.000 --> 0:21:13.680 federal level. 0:21:14.080 --> 0:21:16.000 But it makes sense, you know what I thought. I 0:21:16.040 --> 0:21:17.560 saw Amanda Gordon, who. 0:21:17.520 --> 0:21:22.840 Covers like Hoidy Toydy parties, right, big charity events out 0:21:22.840 --> 0:21:25.880 at the Hamptons and stuff. She had a piece out 0:21:26.440 --> 0:21:30.560 covering John Paulson who talked about the rising crime that 0:21:30.600 --> 0:21:32.840 he's witnessing here in New York and talking about how 0:21:32.840 --> 0:21:35.159 all his friends are moving down to Florida. Then I 0:21:35.200 --> 0:21:39.119 saw another piece that New York is going to open 0:21:39.400 --> 0:21:42.879 a migrant relief center on Randall's Island for another I 0:21:42.880 --> 0:21:47.240 think two thousand immigrants, but we're already supporting fifty seven 0:21:47.640 --> 0:21:52.119 two hundred. If you have the big tax payers moving 0:21:52.160 --> 0:21:55.280 to West Palm Beach and we're bringing in, you know, 0:21:55.400 --> 0:21:57.320 tens of thousands of immigrants, is it going to be 0:21:57.560 --> 0:22:00.919 a problem for our tax base and for rising cost. 0:22:01.520 --> 0:22:05.160 Well, obviously, you know New York is predicated on having 0:22:05.200 --> 0:22:09.040 a very strong commercial foundation. They're the ones who pay 0:22:09.040 --> 0:22:12.919 for everything, all the infrastructure you see in New York City, 0:22:13.200 --> 0:22:17.880 the metro everything. You can't do it as a residential community, man, 0:22:18.200 --> 0:22:21.000 You just can't. There's not enough revenue. And if you 0:22:21.040 --> 0:22:25.040 were to tax the owners of apartments or you could 0:22:25.040 --> 0:22:28.879 call them tenants, really they are in the same boat. 0:22:29.080 --> 0:22:31.840 You can't possibly tax them enough to pay for everything. 0:22:32.119 --> 0:22:35.520 So I think you'll see reduction in services. The progressive 0:22:36.040 --> 0:22:39.119 mandate that says everybody is owed housing and support as 0:22:39.119 --> 0:22:42.240 soon as they show up, and you know a smile, right, 0:22:42.520 --> 0:22:45.120 is going to change because I think all of these 0:22:45.200 --> 0:22:47.600 legacy cities in the northern tier are going to have 0:22:47.640 --> 0:22:50.640 to downsize rather dramatically. It's going to look like Detroit 0:22:51.240 --> 0:22:54.560 because remember, you know these cities were here for industrial 0:22:54.600 --> 0:22:57.920 purposes two centuries ago. Why are they here today? What's 0:22:57.960 --> 0:23:01.760 their economic Aggressionale right, Texas knows why it's here today. 0:23:01.760 --> 0:23:04.119 They're here to make money. But I'm not sure you 0:23:04.160 --> 0:23:06.159 want to live down there. You know what's so funny 0:23:06.240 --> 0:23:08.120 is a lot of my business friends have moved south 0:23:08.160 --> 0:23:11.439 to Florida and Texas, but they don't spend the summer there. 0:23:11.640 --> 0:23:15.200 No, all my friends who moved to Florida keep track 0:23:15.359 --> 0:23:16.919 of the days that they're here in New York, like 0:23:17.320 --> 0:23:19.280 I can't stay for another three days or else I'm 0:23:19.320 --> 0:23:19.880 going to get text. 0:23:20.040 --> 0:23:23.679 But listen, there are literally hundreds of thousands, if not 0:23:23.840 --> 0:23:27.400 millions of people who work in mortgage finance and real 0:23:27.480 --> 0:23:30.080 estate and everything else who have moved out of California 0:23:30.160 --> 0:23:32.800 New York and have gone to Texas and Florida because 0:23:32.840 --> 0:23:36.760 of cost. They literally cannot have a person servicing and 0:23:36.840 --> 0:23:41.359 performing loan in California today. Too expensive. You might be 0:23:41.400 --> 0:23:44.600 able to do distress assets, but you certainly can't do 0:23:44.680 --> 0:23:47.479 bread and butter, you know, servicing, because it's just so 0:23:47.600 --> 0:23:51.120 expensive to create that seat for that employee. Can't do it. 0:23:51.840 --> 0:23:53.800 All right, Well, these states have to come up with 0:23:53.880 --> 0:23:56.399 a reason to exist. I don't care whether it's California, 0:23:56.480 --> 0:23:59.240 New York, Illinois. They all have to go back to 0:23:59.280 --> 0:24:01.679 the drawing board, say why are we here? How do 0:24:01.720 --> 0:24:04.359 we make money? You know? And that's gonna be a 0:24:04.400 --> 0:24:06.840 tough conversation in New York. I think it's. 0:24:06.680 --> 0:24:09.480 Probably gotta start in Washington, many would say. Chris Whalen. 0:24:10.240 --> 0:24:13.480 Chris Whalen is a chairman Whale and Global Advisors. Give 0:24:13.560 --> 0:24:15.119 us us some color here on kind of what we 0:24:15.160 --> 0:24:17.760 heard from Moody chair at the bank downgrade and Chris 0:24:17.760 --> 0:24:19.600 suggesting that it's not just the US government, but it 0:24:19.640 --> 0:24:23.280 will trickle down to you know, everything underneath the US government, 0:24:23.280 --> 0:24:26.000 including states and cities, and that's where we might you know, 0:24:26.280 --> 0:24:27.160 really see something. 0:24:28.119 --> 0:24:31.480 You're listening to the team can's are live program Bloomberg 0:24:31.560 --> 0:24:34.919 Markets weekdays at ten am Eastern on Bloomberg dot com, 0:24:35.000 --> 0:24:38.160 the iHeartRadio app and the Bloomberg Business app, or listen 0:24:38.240 --> 0:24:40.320 on demand wherever you get your podcasts. 0:24:42.119 --> 0:24:47.800 Nancy Tangler, c IO at Laffer Tangler Investments, joins us. Nancy, 0:24:47.840 --> 0:24:51.240 thanks much for joining us. Tg l R is a 0:24:51.320 --> 0:24:55.040 new ETF. Tell us about it. 0:24:55.160 --> 0:25:00.200 Oh gosh, thanks so much. Pre advertising, Yeah, we much 0:25:00.600 --> 0:25:05.679 TTLR today. It's an actively managed dividend growth strategy. So 0:25:06.560 --> 0:25:09.240 we focus and always have by the way, since nineteen 0:25:09.280 --> 0:25:11.960 eighty four when I got into the business. We focus 0:25:12.040 --> 0:25:16.120 on relative yield because management at large cap companies set 0:25:16.119 --> 0:25:18.960 the dividend policy based on what they think long term 0:25:19.080 --> 0:25:22.960 sustainable earnings powers is. So it's a great shortcut. We 0:25:23.040 --> 0:25:27.080 don't have to worry as much about earning estimates as 0:25:27.119 --> 0:25:29.199 we do. Are they able to pay the dividend? Are 0:25:29.240 --> 0:25:31.280 they able to grow the dividend? And then being an 0:25:31.280 --> 0:25:33.240 industry leader, which are the names that we own with 0:25:33.280 --> 0:25:36.000 great management teams that rounds out the portfolio, so it 0:25:36.040 --> 0:25:40.480 acts differently than maybe a more traditional equity income strategy. 0:25:40.480 --> 0:25:42.560 We don't have utilities in this portfolio. We have one 0:25:42.640 --> 0:25:44.879 rate because we're looking for growth at the end of 0:25:44.880 --> 0:25:46.480 the day, just like every other investor. 0:25:46.760 --> 0:25:49.760 So Nancy Matt Miller here, Hi, thanks for joining us. 0:25:49.840 --> 0:25:53.320 I'm mat What what holdings do you have in the ETF. 0:25:53.359 --> 0:25:57.360 What are the biggest stocks that you're allocating. 0:25:57.920 --> 0:26:00.920 Well, So one of our largest holdings is d which 0:26:01.080 --> 0:26:03.480 you know we bought at because of a great capital 0:26:03.520 --> 0:26:06.399 allocation plan they reached at one point they were returning 0:26:06.400 --> 0:26:08.680 almost one hundred percent of free cash flow to investors. 0:26:09.040 --> 0:26:11.600 But in addition, as time has passed, we're going to 0:26:11.600 --> 0:26:14.720 get VMware in this transaction as well that should be 0:26:14.720 --> 0:26:18.359 closing soon. And the AI bump, which has really driven 0:26:18.359 --> 0:26:21.640 the stock this year, but dividend growth has been five 0:26:21.720 --> 0:26:25.119 year annualized about twenty four percent. So that's that's one 0:26:25.119 --> 0:26:28.200 of our largest holdings. We are overweight tech in this portfolio, 0:26:28.240 --> 0:26:32.360 which you maybe wouldn't normally think about in a dividend 0:26:32.359 --> 0:26:34.880 growth strategy, but there actually are a lot of great companies. 0:26:35.200 --> 0:26:38.560 Oracle would be another one that pay the dividend, you know, 0:26:38.560 --> 0:26:40.119 have a yield about in line with the market a 0:26:40.119 --> 0:26:42.359 little bit above, and they're growing in about twelve percent 0:26:42.400 --> 0:26:44.720 a year. And oh, by the way, they're probably the 0:26:44.800 --> 0:26:50.880 cheapest AI generative AI cloud computing platform. So that's kind 0:26:50.880 --> 0:26:52.159 of given the stock a new burst. 0:26:52.280 --> 0:26:53.879 So we AI antie. 0:26:53.920 --> 0:26:55.720 A lot of people have been saying AI bubble to 0:26:55.760 --> 0:26:57.639 me over the past couple of days. Analysts on the 0:26:57.640 --> 0:27:00.440 street are using that term. 0:27:01.160 --> 0:27:02.760 Do you think this is an AI bubble? 0:27:04.200 --> 0:27:08.120 I don't. I think a couple of things. First of all, 0:27:08.240 --> 0:27:10.280 we know we have a very tight labor force. You're 0:27:10.280 --> 0:27:13.240 not dragging the baby boomers back in with the networth 0:27:13.240 --> 0:27:16.359 of about seventy five trillion collectively, so we're going to 0:27:16.400 --> 0:27:19.479 be living with this, with this tight labor market for 0:27:19.520 --> 0:27:21.800 some time. And if you go back and look historically 0:27:22.119 --> 0:27:25.400 in other periods of tight labor markets, what you'll see 0:27:25.440 --> 0:27:28.360 is that tech spending as a percent of GDP goes 0:27:28.440 --> 0:27:31.320 up pretty dramatically one to two percent. And then in 0:27:31.359 --> 0:27:34.159 addition to that, you get the earnings flowing through to 0:27:34.160 --> 0:27:37.160 the company. So technology stocks have always outperformed in period 0:27:37.240 --> 0:27:41.000 previous periods of labor shortage. This one is predicted by 0:27:41.720 --> 0:27:44.320 the government to go from twenty fifteen where they think 0:27:44.320 --> 0:27:47.119 it began all the way through twenty forty seven. So 0:27:47.200 --> 0:27:50.080 I would use weakness in these stocks to add I mean, 0:27:50.080 --> 0:27:53.199 the question is can they monetize. Microsoft has shown us 0:27:53.200 --> 0:27:56.159 that they intend to monetize a generative AI with their 0:27:56.320 --> 0:27:57.439 co pilot offering. 0:27:58.320 --> 0:28:03.280 So for this TF, what's a I guess, what's a 0:28:03.359 --> 0:28:05.640 model name to put in there? In terms of dividend 0:28:05.720 --> 0:28:08.159 yield and dividend growth? What do you guys look for 0:28:08.359 --> 0:28:10.440 in order to put that into this portfolio. 0:28:11.800 --> 0:28:14.560 So we start with the valuation, which is relative yield, 0:28:14.600 --> 0:28:18.400 and what we're looking for is our companies who have 0:28:18.600 --> 0:28:21.800 a dividend paying culture, so they are committed to the dividend. 0:28:22.119 --> 0:28:24.840 They sometimes state, as McDonald's does, that it's a portion 0:28:24.960 --> 0:28:27.240 of what they think long term sustainable earnings power is, 0:28:27.520 --> 0:28:31.800 but most of these companies it's implied. So we own 0:28:31.920 --> 0:28:34.560 some of the usual suspects that you would expect to 0:28:34.600 --> 0:28:37.840 see in an equity income strategy. So home Depot would 0:28:37.840 --> 0:28:42.000 be an example. We also own we just have been 0:28:42.040 --> 0:28:45.000 adding to our positions in Starbucks, we own Walmart. But 0:28:45.040 --> 0:28:47.880 then we also have this exposure overweight a pretty big 0:28:47.920 --> 0:28:51.520 overweight to industrials and then a modest overweight to technology. 0:28:51.960 --> 0:28:55.440 So these companies have long histories of paying the dividend 0:28:55.880 --> 0:28:58.720 and it gives us information as well as it contributes 0:28:58.720 --> 0:29:01.960 pretty materially the total turn, especially the dividend growth part. 0:29:02.640 --> 0:29:05.400 Did you do you know channel checks? Looking at the 0:29:05.440 --> 0:29:08.840 appetite for new ETFs. Obviously last year was a banner 0:29:08.960 --> 0:29:13.760 year for ETF launches. We've seen them slow down a 0:29:13.760 --> 0:29:17.840 little bit this year. Still strong growth though. What's your 0:29:17.920 --> 0:29:21.000 view on the ETF nancy as an investment vehicle? 0:29:22.120 --> 0:29:25.560 So I just just finished the second edition of my book, 0:29:25.560 --> 0:29:28.600 The Women's Guide to Successful Investing, and has a whole 0:29:28.680 --> 0:29:30.960 chapter on ETFs. I think they play a very important 0:29:31.040 --> 0:29:36.000 role in investors' portfolios. This particular strategy would serve as 0:29:36.000 --> 0:29:40.360 a core that you would sort of decorate around with 0:29:40.480 --> 0:29:46.320 more aggressive, higher risk ETFs. We launched it because our 0:29:46.320 --> 0:29:48.240 minimums are pretty high and we were turning away a 0:29:48.240 --> 0:29:50.120 lot of people that were interested in working with us. 0:29:50.320 --> 0:29:52.160 So this is one way we can, you know, make 0:29:52.280 --> 0:29:57.480 our strategy accessible to them, and it's been it's been 0:29:58.480 --> 0:30:01.320 an interesting experience and the launch went off pretty well today. 0:30:01.360 --> 0:30:02.479 So we're pretty happy about that. 0:30:02.560 --> 0:30:06.360 The expense ratio is a little bit steep, ninety five 0:30:06.440 --> 0:30:09.000 basis points. Does that stay there or do you bring 0:30:09.040 --> 0:30:11.400 it down once you get more flows. 0:30:11.880 --> 0:30:14.040 I think we bring it down. I mean I also 0:30:14.040 --> 0:30:16.920 wrote a whole chapter on how fees are the biggest 0:30:16.960 --> 0:30:19.000 erodor of total return and so you need to pay 0:30:19.000 --> 0:30:21.440 attention to that. So we're very committed in our in 0:30:21.480 --> 0:30:25.040 our wealth practice, and then with this fund to be 0:30:25.240 --> 0:30:28.600 a reasonable access point for individuals and to add value 0:30:28.680 --> 0:30:31.040 above and beyond the benchmark, which we've been able to 0:30:31.040 --> 0:30:33.880 do historically in our separately managed accounts. 0:30:34.160 --> 0:30:37.600 I thought, Paul, we could ask Nancy about Apple, you know, 0:30:38.040 --> 0:30:40.720 because it's been it's a bug in your bonnet. 0:30:40.800 --> 0:30:43.160 It is to be in your bonnet exactly. So Nancy, 0:30:43.400 --> 0:30:46.320 you look at you mentioning your overweight tech. How frustrating 0:30:46.360 --> 0:30:49.880 is it to see a company as great as Apple 0:30:49.960 --> 0:30:52.680 with a cash flow it has to pay a dividend 0:30:52.720 --> 0:30:53.520 less than one percent. 0:30:54.880 --> 0:30:57.600 I know when we got into that stock, this is 0:30:57.600 --> 0:31:00.360 the crazy thing. I don't think anyone remembers. This was 0:31:00.360 --> 0:31:03.120 at three percent and twenty thirteen. It was above the 0:31:03.160 --> 0:31:05.960 tenure at that time, and they were growing the dividend, 0:31:06.040 --> 0:31:09.240 So we actually began accumulating our positions that at that 0:31:09.400 --> 0:31:13.240 point added to it over the years. Have basically sold 0:31:13.280 --> 0:31:16.280 the majority of our holdings. But this particular ETF does 0:31:16.360 --> 0:31:20.240 have a small allocation, about two and a half percent 0:31:20.320 --> 0:31:23.520 to that particular stock, and I think it is important 0:31:23.800 --> 0:31:26.520 that management continues to grow the dividend, but they could 0:31:26.720 --> 0:31:28.959 continue to grow it in a lot more aggressive fashion. 0:31:29.040 --> 0:31:31.240 So I am a little bit frustrated by that and 0:31:31.320 --> 0:31:34.640 some of the other great you know technology companies, cloud 0:31:34.680 --> 0:31:38.000 computing like Google and even Amazon. The only way you 0:31:38.000 --> 0:31:40.480 can generate income off of those is to sell covered calls, 0:31:40.640 --> 0:31:44.280 So but we're not doing that in this Do buybacks? 0:31:44.320 --> 0:31:46.400 Do cash buybacks make you feel any better? 0:31:47.640 --> 0:31:51.120 I mean yes, but I mean it's more sentiment in 0:31:51.160 --> 0:31:55.000 my view, just like splitting a stock. But yeah, like 0:31:55.080 --> 0:31:59.080 Service Now just announced they are engaging in their first 0:31:59.480 --> 0:32:02.040 share by back. You know that's going to put a 0:32:02.080 --> 0:32:05.080 floor under the stock at some point. But so we 0:32:05.120 --> 0:32:06.920 look at that. It's important to us, but it's not 0:32:07.040 --> 0:32:10.000 our overriding concern. And when we're when we're looking for 0:32:10.040 --> 0:32:10.680 new names. 0:32:10.880 --> 0:32:14.280 Yeah, looking at Apple, the indicated yield zero point five percent, 0:32:14.920 --> 0:32:16.520 that's the bad news. I guess the good news is 0:32:16.520 --> 0:32:20.280 they've five year net growth seven point two six percent, 0:32:20.360 --> 0:32:22.040 so they are growing it. But again a lot of 0:32:22.040 --> 0:32:24.720 folks like myself think we could see we should see you, 0:32:24.720 --> 0:32:26.280 you know, to two and a half three percent divid 0:32:26.280 --> 0:32:28.560 in yield on that name, but that's not how they 0:32:28.680 --> 0:32:31.480 view their use of cash. Nancy Tangler, thanks so much 0:32:31.480 --> 0:32:36.200 for joining us. Nancy is the CIO of Laffertangler Investments 0:32:36.840 --> 0:32:41.120 and their new ETF out today looking at dividends and 0:32:41.240 --> 0:32:45.360 dividend growth. Tg l R is the ticker you're listening. 0:32:45.000 --> 0:32:48.520 To the tape. Catch are live program Bloomberg Markets weekdays 0:32:48.520 --> 0:32:51.760 at ten am Eastern on Bloomberg Radio, the tune in app, 0:32:51.800 --> 0:32:53.240 Bloomberg dot Com, and the. 0:32:53.200 --> 0:32:54.400 Bloomberg Business App. 0:32:54.440 --> 0:32:57.239 You can also listen live on Amazon Alexa from our 0:32:57.280 --> 0:33:01.640 flagship New York station Just say Alexa, playing Bloomberg eleven. 0:33:02.960 --> 0:33:05.440 Matt Miller, Paul Sweeney live here in the Bloomberg Interactive 0:33:05.440 --> 0:33:06.120 Broker Studio. 0:33:06.200 --> 0:33:08.000 We are streaming on. 0:33:07.880 --> 0:33:10.280 YouTube, so just head over to YouTube and search Bloomberg 0:33:10.440 --> 0:33:13.240 Global News and that'll bring you to the video feed. 0:33:13.280 --> 0:33:14.800 I want to get right to our next guest, Margie 0:33:14.800 --> 0:33:19.280 Petel senior portfolio manager a all Spring Global Investments, joins us, 0:33:20.240 --> 0:33:22.880 marg I want to get the benefit here of your experience. 0:33:22.920 --> 0:33:26.240 Here we're pretty much through earnings for this cycle. What 0:33:26.240 --> 0:33:27.520 are your takeaways? 0:33:28.200 --> 0:33:31.120 Well, once again, the second quarter surprised on the upside 0:33:31.200 --> 0:33:33.840 like the first quarter did. Shows that companies are in 0:33:33.880 --> 0:33:37.280 good shape. Revenues are okay, profit margins are following up, 0:33:37.280 --> 0:33:40.080 which is very important, and really there is no saw 0:33:40.120 --> 0:33:42.160 in the companies are seeing any kind of a broad 0:33:42.160 --> 0:33:46.320 brush decline and economic activities. So the outwork for third 0:33:46.400 --> 0:33:49.560 quarterbooks at least reasonable, so maybe better than people have 0:33:49.640 --> 0:33:52.720 been thinking. And the whole thought or recession once again 0:33:52.760 --> 0:33:55.000 seems to be be pushed out a little bit over 0:33:55.040 --> 0:33:55.640 the horizon. 0:33:56.120 --> 0:34:00.160 So Margo, when are you When is your expectation or 0:34:00.320 --> 0:34:03.280 a recession? Because all the signs are there, and I 0:34:03.320 --> 0:34:07.720 realized that the current and backward looking data still aren't 0:34:07.760 --> 0:34:11.640 as bad. On the other hand, the Fed raised interest 0:34:11.719 --> 0:34:13.840 rates five hundred and fifty basis points in like a 0:34:13.920 --> 0:34:15.719 year and a half, so it's coming right. 0:34:16.960 --> 0:34:19.960 Well, it's coming that we may have to wait longer 0:34:19.960 --> 0:34:23.799 than people think. I think two several reasons. One, corporations 0:34:23.800 --> 0:34:27.239 has spent the last decade of near zero rates, restructuring 0:34:27.280 --> 0:34:30.160 the balance sheets, so they really aren't a sensitive to 0:34:30.320 --> 0:34:33.440 higher short term rates as they have been in previous cycles. 0:34:33.719 --> 0:34:35.719 Same thing with consumers who are having a little bit 0:34:35.760 --> 0:34:38.680 of a slow down in housing, but many homeowners are 0:34:38.719 --> 0:34:42.040 able again to refinance, locking long term low rates on 0:34:42.080 --> 0:34:44.480 the houses, so they're not actually heard. And in fact, 0:34:44.520 --> 0:34:47.840 i'd say the margins consumers are probably benefiting from getting 0:34:47.920 --> 0:34:51.160 higher rates on their savings. With unemployment at three point 0:34:51.239 --> 0:34:54.279 six percent, it's very, very hard to say that we're 0:34:54.320 --> 0:34:57.280 on the Brinker recession, and especially when there's no sector 0:34:57.320 --> 0:34:59.439 of the economy you can point to that's about ready 0:34:59.480 --> 0:35:02.600 to tumble distress to feed over into some kind of 0:35:02.600 --> 0:35:05.360 a general recession. So I just don't see a recession 0:35:05.400 --> 0:35:06.359 any time in your time. 0:35:06.960 --> 0:35:11.240 Well, margre given that background, is it reasonable for some people, 0:35:11.400 --> 0:35:13.400 like in the fixed income space, maybe take on some 0:35:13.440 --> 0:35:16.520 incremental risk in terms of maybe moving out in duration, 0:35:16.560 --> 0:35:18.200 maybe even moving to high yield. 0:35:18.360 --> 0:35:19.200 How do you think about that? 0:35:20.440 --> 0:35:23.640 Well, high yield has not been very risky last year 0:35:23.760 --> 0:35:26.279 or this year. It's actually still the best performing part 0:35:26.280 --> 0:35:28.960 in the fixed income market when you look at maturity 0:35:29.000 --> 0:35:32.760 adjusted and I think it will still be probably above 0:35:32.840 --> 0:35:36.200 average compared to treasuries. The way I look at treasuries, 0:35:36.200 --> 0:35:38.560 we have such an enormous amount of supply that has 0:35:38.600 --> 0:35:41.480 to come, that has to be absorbed. That says to 0:35:41.520 --> 0:35:44.400 be that we may have a relative scarcity of corporate 0:35:44.440 --> 0:35:47.319 credits that people would like to buy versus treasuries. So 0:35:47.360 --> 0:35:50.239 we might actually see old spreads, the amount of extrebo 0:35:50.320 --> 0:35:53.840 to get in corporates over treasuries shrink from these levels. 0:35:53.880 --> 0:35:56.680 And remember defaults throwing a little over three percent, So 0:35:57.000 --> 0:35:59.520 even in the high old market, you're not seeing much distress. 0:36:01.040 --> 0:36:04.480 So all right, if no real recession this year, I mean, 0:36:04.480 --> 0:36:07.360 how should we think about this equity market, which has 0:36:07.400 --> 0:36:10.080 really been driven this year by those magnificent seven stocks. 0:36:11.680 --> 0:36:13.600 Do we start to try to rotate maybe out of them, 0:36:13.680 --> 0:36:16.160 or maybe try to diversify way out of them into 0:36:16.160 --> 0:36:18.800 some mid cap stocks, maybe some cyclical names. 0:36:20.080 --> 0:36:22.840 Well, I still think the better trade is with larger 0:36:22.880 --> 0:36:27.000 cap stocks because we don't really know what's going to happen. Secondly, 0:36:27.040 --> 0:36:29.320 it looks as if growth in the second half of 0:36:29.360 --> 0:36:31.840 the year will continue to be I think very very modest, 0:36:32.280 --> 0:36:34.799 so high growing companies will be hard to find so 0:36:34.840 --> 0:36:36.880 I think that some of the very large cap stocks 0:36:36.880 --> 0:36:40.480 have been favorites so far this year may well continue 0:36:40.480 --> 0:36:43.600 to perform because they still have the guaranteed growth. So 0:36:43.640 --> 0:36:46.319 we're looking more for large cap companies where they have 0:36:46.680 --> 0:36:49.000 either an industry that's on the secular up swing or 0:36:49.920 --> 0:36:52.680 looks as if they can continue to have above their maturities. 0:36:53.360 --> 0:36:59.680 That's pretty amazing because it seems like Margie the biggest companies. 0:36:59.239 --> 0:37:01.240 On the S and P five hundred. 0:37:02.080 --> 0:37:08.520 Then you know Apple, Microsoft, Amazon, and Nvidia, Alphabet Meta, 0:37:09.320 --> 0:37:13.160 maybe Tesla. These companies you're looking at as growth companies 0:37:13.280 --> 0:37:15.960 but also in a sense safe havens. 0:37:17.080 --> 0:37:19.560 Well that's right, and ever since the first quarter when 0:37:19.800 --> 0:37:22.440 they all produce pretty good earnings, they have act to 0:37:22.440 --> 0:37:25.720 a safe haven. Certainly they have enormously liquid balance sheets 0:37:26.080 --> 0:37:28.759 that they are safe haven. And I think from here 0:37:28.840 --> 0:37:32.399 on the market's going to look at these stocks more individually. 0:37:32.480 --> 0:37:35.680 For example, we saw Apple really come down a bit 0:37:35.719 --> 0:37:38.759 since they've reported rather disappointing results, and the other some 0:37:38.840 --> 0:37:42.200 of the other fag names of Microsoft, Meta have produced 0:37:42.280 --> 0:37:45.240 very good results, and so those have continued to tuggle 0:37:45.320 --> 0:37:47.680 on in advance. So we think it's really going to 0:37:47.719 --> 0:37:51.080 be determined by results. Are these high growing stocks still 0:37:51.160 --> 0:37:53.960 high growing or any of them running into roadblocks that 0:37:54.080 --> 0:37:56.680 may take them down, So we think it'll be more individual. 0:37:56.719 --> 0:37:59.759 We still think in general the larger companies will tend 0:37:59.800 --> 0:38:02.080 to do well because they have all the strengths to 0:38:02.960 --> 0:38:05.400 operate in a low growth market. 0:38:05.960 --> 0:38:06.240 Margy. 0:38:06.320 --> 0:38:08.040 Earlier today, Matt and I were talking with a guest 0:38:08.040 --> 0:38:12.440 who's firm launched an ETF today that focuses on dividends, 0:38:12.600 --> 0:38:15.520 dividend growth, and dividend yield. 0:38:15.520 --> 0:38:16.840 How do you think about dividends? 0:38:18.360 --> 0:38:21.479 Well, I think dividends are nice, and in a slow 0:38:21.520 --> 0:38:24.440 growth market, which I think will now be in, probably 0:38:24.440 --> 0:38:27.000 dividends will be a bigger component of total return for 0:38:27.080 --> 0:38:30.040 stocks than we've seen over the last say five years 0:38:30.200 --> 0:38:32.680 or so. However, I still think it comes down to 0:38:32.800 --> 0:38:36.280 individual stocks, not so much a dividend rate, because often 0:38:36.600 --> 0:38:39.200 stock set up high dividend yields are likely to be 0:38:39.360 --> 0:38:42.719 equity under performers. Stocks of low dividends are likely to 0:38:42.760 --> 0:38:46.160 raise their dividends over time. So rather than ETF one 0:38:46.200 --> 0:38:49.120 size fits all, we'd rather just look at companies that 0:38:49.280 --> 0:38:51.800 have we think the ability to raise their dividends or 0:38:51.800 --> 0:38:55.560 reasonable dividends for the growth rate or likelihood to raise 0:38:55.560 --> 0:38:56.319 their dividends. 0:38:56.880 --> 0:39:00.000 Are those companies going to be some of the same 0:39:00.080 --> 0:39:03.319 that are the Magnificent seven? I mean, are they going 0:39:03.360 --> 0:39:07.320 to be growth companies, safe havens and able to raise dividends. 0:39:08.520 --> 0:39:12.440 Well, I think companies are pretty cautious about raising their dividends, 0:39:12.440 --> 0:39:15.319 more so than buying back stock. So we still think 0:39:15.360 --> 0:39:19.200 that the technology sector will have companies that raise their dividends. 0:39:19.440 --> 0:39:22.680 We think the industrial sector has turned the corner and 0:39:22.760 --> 0:39:25.399 we think they're likely to have higher cash flow and 0:39:25.520 --> 0:39:28.920 raiser dividends. And even in some of the healthcare names 0:39:29.160 --> 0:39:32.480 healthcare books as if it's under a cloud hangover from 0:39:32.480 --> 0:39:34.799 COVID and different things. But we think even there we 0:39:34.800 --> 0:39:38.680 should see some modest increases in dividends over the next. 0:39:38.520 --> 0:39:38.960 Year or two. 0:39:39.680 --> 0:39:43.239 How about energy, Margie, We're looking at wtach crude oil 0:39:43.360 --> 0:39:45.800 just under eighty two dollars a barrel, up from about 0:39:45.800 --> 0:39:48.239 sixty seven to sixty eight just about five weeks ago. 0:39:48.320 --> 0:39:50.880 So how do you guys think about the energy space. 0:39:52.320 --> 0:39:56.480 We have a very modest exposure and energy because we 0:39:56.680 --> 0:39:59.080 really aren't interested in making a plate on the price 0:39:59.080 --> 0:40:03.239 of oil. We think there's a lot of roadblocks politically 0:40:03.360 --> 0:40:06.560 for some companies really expanding their earnings where they might 0:40:06.719 --> 0:40:09.640 like to. So we're kind of form on the sector. 0:40:10.640 --> 0:40:13.360 All right, Margie, We really appreciate getting a few minutes 0:40:13.400 --> 0:40:16.600 of your time. Margie Ptel, Senior portfolio manager at all 0:40:16.680 --> 0:40:21.919 Spring Global Investment. Still keeping a relatively optimistic outlook on 0:40:22.160 --> 0:40:24.360 the risk assets even in a slower growth environment. 0:40:24.640 --> 0:40:27.759 You're listening to the tape Cat's are live program Bloomberg 0:40:27.800 --> 0:40:31.400 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:40:31.480 --> 0:40:33.560 tune in app, Bloomberg dot Com. 0:40:33.280 --> 0:40:34.720 And the Bloomberg Business App. 0:40:34.760 --> 0:40:37.560 You can also listen live on Amazon Alexa from our 0:40:37.560 --> 0:40:43.600 flagship New York station. Just say Alexa, play Bloomberg eleven thirty. 0:40:43.400 --> 0:40:45.560 Matt Miller, Paul Sweeney here in a Bloomberg Interactive at 0:40:45.560 --> 0:40:48.480 Brokers Studio, or streaming live on YouTube, which is Head 0:40:48.480 --> 0:40:52.160 over to that intraweb thing and search Bloomberg Global News 0:40:52.200 --> 0:40:57.280 and don't take You'll find our video feed there. Eli Lilly, Novo, Nordisk, 0:40:57.440 --> 0:41:01.239 two big farmer companies all time highs today. Look at 0:41:01.239 --> 0:41:04.880 those charts, they're just absolutely monster charts, particularly in the 0:41:04.920 --> 0:41:05.759 last twenty years. 0:41:05.800 --> 0:41:07.359 So We're going to figure out what's going on there. 0:41:07.400 --> 0:41:10.960 Something about an obesity drug here and reducing heart attacks. 0:41:11.000 --> 0:41:13.719 All good news, all big news, But we need to 0:41:13.719 --> 0:41:16.360 get talked to somebody who's actually an expert in this stuff. 0:41:16.360 --> 0:41:20.440 Michael Shaw, Senior industry analyst at Bloomberg Intelligence. He's based 0:41:20.480 --> 0:41:21.759 in London. Mikey, thanks so. 0:41:21.840 --> 0:41:22.719 Much for joining us here. 0:41:22.760 --> 0:41:25.799 Could you tell us what is going on with the 0:41:25.880 --> 0:41:31.719 Novo Nordisk by and also by extension, Eli Lilly, what's 0:41:31.760 --> 0:41:33.160 going on today? 0:41:33.920 --> 0:41:37.920 Yeah, So, Novo basically had a landmark trial readout, so 0:41:38.000 --> 0:41:41.479 I looked at WIGOVI and cardiovascular outcomes. Now, the base 0:41:41.560 --> 0:41:45.000 case for this was a seventeen percent risk reduction on 0:41:45.080 --> 0:41:48.800 CARDIOVASCAR outcomes, and really with a result we sawt of 0:41:48.880 --> 0:41:50.920 like a home run result. So it actually reported a 0:41:50.960 --> 0:41:55.960 twenty percent benefit. And what's more is that all drivers 0:41:55.960 --> 0:42:01.879 of the compet at endpoint, so heart failure and KINDIVASCAR death, 0:42:02.360 --> 0:42:03.880 they all drove that benefit. 0:42:03.960 --> 0:42:06.200 So really a home run result for Novo. 0:42:06.239 --> 0:42:07.319 That, Mikey. 0:42:07.400 --> 0:42:10.240 The the main question people ask me, and that I 0:42:10.280 --> 0:42:13.360 also want to know the answer to about these drugs 0:42:13.520 --> 0:42:17.680 is what could the long term effects be? You know, 0:42:17.719 --> 0:42:20.439 if you're shooting yourself in the leg with these every 0:42:20.480 --> 0:42:22.360 week for the next you know, ten years. 0:42:22.800 --> 0:42:24.360 What happens to your body? 0:42:25.880 --> 0:42:27.880 Well, I think it's clear that we've seen, you know, 0:42:27.960 --> 0:42:31.360 we've seen substantial weight loss associated with these products. So 0:42:31.680 --> 0:42:35.320 Novo's Wigovi's got about well, showed up to eighteen percent, 0:42:36.320 --> 0:42:38.280 to Zeppetite showed more than twenty percent. 0:42:38.719 --> 0:42:39.440 In terms of the. 0:42:39.400 --> 0:42:43.760 Side effects, well, I mean initially, you know, the glping 0:42:43.800 --> 0:42:46.600 one class in general is associated with GI side effects, 0:42:46.600 --> 0:42:50.960 so gashri intestinal side effects, things like nausea, vomiting, et cetera. 0:42:52.440 --> 0:42:54.239 You know, this is a class of drug that's that's 0:42:54.280 --> 0:43:00.640 been used for years in diabetes, and you know, there 0:43:00.680 --> 0:43:04.040 have have been kind of anecdotal reports of things like 0:43:04.080 --> 0:43:07.160 suicidal ideation that we've seen in the in the news recently. 0:43:07.239 --> 0:43:10.840 Hang on out, so what say, what is it suicide? 0:43:11.920 --> 0:43:13.400 Suicidal ideation? 0:43:13.560 --> 0:43:17.239 Yes, but you got to also remember, you know, you know, 0:43:17.280 --> 0:43:20.520 these these patients you know OBC, and they could be 0:43:20.520 --> 0:43:24.120 actually other other things contributing to that. So nothing's been 0:43:24.160 --> 0:43:26.160 seen in you know, nothing was seen in the clinical 0:43:26.200 --> 0:43:29.920 trials and the large clinical trials, So you know, I think. 0:43:30.200 --> 0:43:32.600 The safety of these drugs is kind of well. 0:43:32.400 --> 0:43:35.120 Documented and and you know, there's been a lot of 0:43:35.160 --> 0:43:37.040 experience already with with diabetes. 0:43:37.080 --> 0:43:38.719 All right, So just to sort out what's on the 0:43:38.760 --> 0:43:41.719 market here and who owns it the. 0:43:41.680 --> 0:43:44.560 One Mic and his team did a big report on 0:43:44.760 --> 0:43:47.440 just this whole places obesity stuff. 0:43:47.520 --> 0:43:50.040 I mean, I'm I think this could be a game 0:43:50.160 --> 0:43:53.440 changer for the Western world. Uh, you know, obviously if 0:43:53.440 --> 0:43:55.279 there are no long term side effects, I don't want 0:43:55.280 --> 0:43:57.600 to be giving birth to a three eyed fish later. 0:43:57.920 --> 0:44:02.000 But uh so Novo nor Disc does we gov and 0:44:02.320 --> 0:44:05.920 ozempic right, those are both from Novo nor Disc And 0:44:05.960 --> 0:44:16.719 then Lily has tears zeppatide as well as re retattrue tide. 0:44:17.760 --> 0:44:19.080 Is that right, Yeah, that's correct. 0:44:19.400 --> 0:44:19.920 Yeah, So. 0:44:21.840 --> 0:44:23.840 Basically we gave you in a zempiic are both the 0:44:23.840 --> 0:44:26.680 same molecules, just we gave you the higher days that's 0:44:26.680 --> 0:44:31.319 marketed or approved in obesity. Zempick is approved in diabetes. 0:44:32.640 --> 0:44:36.160 Tozeptide is marketed under the brand name Munjari for diabetes, 0:44:36.200 --> 0:44:39.520 and it should get approved in you know, towards the 0:44:39.600 --> 0:44:42.520 end of the year for obesity. And then rettrue Tide 0:44:42.640 --> 0:44:46.160 is a compound that they've got in there in their 0:44:46.200 --> 0:44:49.279 in their pipeline which has yeah, which is you know, 0:44:49.400 --> 0:44:52.880 shown potentially better data than totide on weight loss. So 0:44:52.880 --> 0:44:54.759 that's something coming through the pipeline, all right. 0:44:54.800 --> 0:44:58.080 But the anytime I talk to you, Mikey or Sam, 0:44:58.280 --> 0:45:01.319 it always comes down Sam Faz, your partner in crime. 0:45:01.360 --> 0:45:03.440 It always comes down to who pays for this stuff? 0:45:03.840 --> 0:45:06.440 So who pays for this stuff in the big markets 0:45:06.480 --> 0:45:07.240 around the country. 0:45:07.239 --> 0:45:09.799 I saw I saw by the way that the University 0:45:09.840 --> 0:45:14.719 of Texas has taken these drugs off of its insured 0:45:15.040 --> 0:45:19.120 coverage coverage list because the University of Texas system was 0:45:19.160 --> 0:45:22.440 paying five million dollars a month for its employees to 0:45:22.440 --> 0:45:23.520 get hold of these things. 0:45:25.120 --> 0:45:27.000 So yeah, So I mean that's a key question at 0:45:27.000 --> 0:45:29.240 the moment given the size of the well, the potential 0:45:29.280 --> 0:45:32.839 size of this indication. You know, historically, what we've seen 0:45:32.920 --> 0:45:35.399 with these drugs is b see. You know, it's been 0:45:35.480 --> 0:45:37.200 kind of more of a lifestyle choice. It's been an 0:45:37.239 --> 0:45:39.960 out of pocket market. But we haven't seen the weight 0:45:40.000 --> 0:45:44.160 loss data that that's you know, associated with these drugs historically. 0:45:45.200 --> 0:45:47.560 So now with this outcomes data in hand, that's really 0:45:47.560 --> 0:45:50.719 going to drive broad reinbursement, and I think it's going 0:45:50.800 --> 0:45:52.919 to be tough for pairs to kind of not cover 0:45:53.000 --> 0:45:55.240 these drugs. Is that, you know, if we're GOV showing 0:45:55.239 --> 0:45:59.040 a twenty percent reduction and kind of carti of out 0:45:59.040 --> 0:46:01.239 of their risk and cool that heart failure is kind 0:46:01.239 --> 0:46:03.280 of one of the leading causes of death in the US. 0:46:04.080 --> 0:46:06.400 And also it has you know, cost associated with it, 0:46:06.440 --> 0:46:08.960 which are kind of a significant burden on the healthcare system. 0:46:09.400 --> 0:46:12.440 So you know, the long long term savings you know 0:46:12.560 --> 0:46:15.239 that these drugs could potentially offer, you know, are going 0:46:15.320 --> 0:46:15.799 to be huge. 0:46:15.920 --> 0:46:17.239 It's kind of of. 0:46:17.200 --> 0:46:20.360 Course, you could achieve the same savings or certainly similar 0:46:20.400 --> 0:46:23.040 savings that people would just eat less ice cream and 0:46:23.080 --> 0:46:25.279 go to the gym more often. Right, So that's the 0:46:25.680 --> 0:46:28.759 that's the problem, true too, that the insurance that the 0:46:28.800 --> 0:46:31.680 companies paying for the insurance probably have, like my employees 0:46:31.760 --> 0:46:35.120 either make horrible choices and take this drug and then 0:46:35.160 --> 0:46:38.120 I pay five million dollars a month, or my employees 0:46:38.680 --> 0:46:41.640 make good choices and I don't pay anything and no 0:46:41.640 --> 0:46:42.680 one needs to take drugs. 0:46:44.600 --> 0:46:46.440 Yeah, that's true. True, that's true too. 0:46:47.040 --> 0:46:50.080 All right, Mikey, All right, that's your BC side. I 0:46:50.160 --> 0:46:52.080 got my plays there and I know how to do that. 0:46:52.320 --> 0:46:55.319 Another big area that we'd love to see some breakthroughs 0:46:55.440 --> 0:46:57.239 and maybe your companies will do it. It's just kind 0:46:57.239 --> 0:47:01.680 of dementia broadly defined. As the world population ages, it 0:47:01.680 --> 0:47:03.960 becomes a bigger and bigger problem for a lot more people. 0:47:04.640 --> 0:47:07.400 What's what's your industry, what's the farmer? What's a BioPharm 0:47:07.400 --> 0:47:09.280 market in industry? What are they doing there? 0:47:10.800 --> 0:47:13.200 I mean we've seen I mean it's not my area 0:47:13.239 --> 0:47:17.400 of area of focus, but we've we've obviously seen the 0:47:17.520 --> 0:47:20.919 kembe from Bigen and Essie come through, and then we've 0:47:20.920 --> 0:47:23.319 got Lily with d nanamap, so you know, these are 0:47:23.360 --> 0:47:28.759 treatments for Alzheimer's. Limbeck as well has got has shown 0:47:28.840 --> 0:47:31.960 kind of positive data for Alzheimer's agitation, so that's like 0:47:32.000 --> 0:47:36.520 a supplemental indication for one of their drugs for results 0:47:37.080 --> 0:47:40.520 resultsy So you know these are you know, this is 0:47:40.560 --> 0:47:43.719 an area where you know the success rate has has 0:47:43.760 --> 0:47:47.759 not always been high, and you know drugs associated with 0:47:48.160 --> 0:47:51.280 being developed in these eras are kind of highly risk adjusted. 0:47:51.920 --> 0:47:56.319 So yeah, I guess it remains to be seen. It's 0:47:56.360 --> 0:47:59.680 not an area that I focus on a particular. So 0:48:00.160 --> 0:48:03.000 my colleague, you know, Sam Fazzelli, to look at that please, 0:48:03.239 --> 0:48:07.600 But there's certainly kind of developments in the in the pipeline, all. 0:48:07.560 --> 0:48:10.400 Right, So what's next for you know, the Eli Liliza 0:48:10.400 --> 0:48:13.920 of the world, the the Novo's, I mean, these sacks 0:48:14.000 --> 0:48:14.720 all time highs. 0:48:14.760 --> 0:48:15.520 What do you think they do? 0:48:15.560 --> 0:48:18.239 Are they continue to go out and and buy what 0:48:18.280 --> 0:48:20.640 they can't develop? It seems like every Monday we come 0:48:20.640 --> 0:48:22.040 in and there's a big farm at m and a t. 0:48:22.040 --> 0:48:25.200 Rate and does anybody else make one of these appetites 0:48:25.239 --> 0:48:26.359 of pressant shots? 0:48:28.000 --> 0:48:31.600 Yes, I mean we've seen kind of a Rally and Amjin, 0:48:31.719 --> 0:48:33.600 We've seen a rally and Viking, both of them have 0:48:33.680 --> 0:48:38.719 JLP one drugs in their pipeline. Other companies include Zealand, 0:48:39.040 --> 0:48:44.200 Alti Mune and Fizes also got like an oral JLP 0:48:44.280 --> 0:48:48.880 one as well, So several companies developing these jlping one 0:48:48.960 --> 0:48:53.040 drugs for obesity. In terms of what's next in the space, 0:48:53.719 --> 0:48:55.640 so I think we're going to constantly see this back 0:48:55.640 --> 0:48:59.160 and forth between Lily and Novo on the on the 0:48:59.200 --> 0:49:03.000 innovation front, So we've uh Lily, Nova's got goo v 0:49:03.200 --> 0:49:06.080 Lily is going to bring into zeppatide. Nova's then got 0:49:06.160 --> 0:49:10.399 Cagari Semma, which is a combination product and then we've 0:49:10.719 --> 0:49:13.880 also recently seen, you know, really strong data for retis 0:49:13.920 --> 0:49:18.280 true Tide, which is a triple agonist, unlike to Ze Petite, 0:49:18.320 --> 0:49:22.239 which is a dual agonist, so it's targeting three three 0:49:22.239 --> 0:49:23.000 things instead of two. 0:49:23.040 --> 0:49:25.400 All right, So, Mikey, it's really important for you and 0:49:25.440 --> 0:49:28.400 for healthcare investors to follow where different drugs are in 0:49:28.440 --> 0:49:31.319 the regulatory pipeline. You guys actually have a model of that, 0:49:31.360 --> 0:49:31.680 don't you. 0:49:33.480 --> 0:49:35.560 Yeah, we have a track. We have a model on 0:49:35.600 --> 0:49:37.960 the syste Yeah, we have a track on the system. 0:49:37.640 --> 0:49:40.799 And it's the best as best on Wall Street by far. 0:49:41.520 --> 0:49:44.040 Who's the person that manages that again, who's the person? 0:49:45.640 --> 0:49:47.520 Oh yeah, so Sam and I look at it. 0:49:48.680 --> 0:49:50.360 Yeah, all right, it's the best on the street. They 0:49:50.440 --> 0:49:54.080 track every single get to it. We'll find it. I'll 0:49:54.080 --> 0:49:55.439 get it for you in a second. But it's it's 0:49:55.520 --> 0:49:58.200 just the best. If you're a healthcare geek, you have 0:49:58.280 --> 0:50:00.319 to have this same because you have to know where 0:50:00.360 --> 0:50:02.839 drugs are, when the tests are coming, all that kind 0:50:02.840 --> 0:50:03.200 of stuff. 0:50:03.200 --> 0:50:05.279 And the Bloomberg Intelligence guys do that. 0:50:05.320 --> 0:50:08.760 Mike you Shaw, Senior industry antals Bloomberg Intelligence. I appreciate 0:50:08.800 --> 0:50:12.960 getting some time there. Eli Lilly Novo both all time highs. 0:50:13.000 --> 0:50:15.799 Here today, you're listening to the tape cats Are Live 0:50:15.880 --> 0:50:20.279 program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, 0:50:20.440 --> 0:50:22.680 the tune in app, Bloomberg dot Com. 0:50:22.400 --> 0:50:23.839 And the Bloomberg Business App. 0:50:23.880 --> 0:50:26.680 You can also listen live on Amazon Alexa from our 0:50:26.680 --> 0:50:31.760 flagship New York station, Just say Alexa Play Bloomberg eleven thirty. 0:50:32.600 --> 0:50:36.000 Ryan Lockwood joins it sees the CFO of Carparts dot 0:50:36.040 --> 0:50:39.880 Com trades on the Nasdaq. PRTs is a symbol company 0:50:39.920 --> 0:50:43.160 went public back in two thousand and seven. They did 0:50:43.160 --> 0:50:46.480 a secondary offering very adroitly in twenty twenty when they 0:50:46.520 --> 0:50:48.719 stuck got a nice pop from the pandemic. 0:50:49.480 --> 0:50:51.759 Ryan, thanks so much for joining us here. Again. 0:50:52.000 --> 0:50:53.920 I'm looking at your long term chart and just looks 0:50:53.960 --> 0:50:56.719 like a lot of other pandemic charts where you have 0:50:56.880 --> 0:51:00.319 this surge in twenty twenty as people behaviors chain during 0:51:00.360 --> 0:51:01.919 the pandemic, and then it's been kind of a slow 0:51:02.000 --> 0:51:05.040 bleed off after we get post pandemic. Here, talk to 0:51:05.120 --> 0:51:08.920 us how your business kind of changed during that you know, 0:51:08.960 --> 0:51:12.640 twenty twenty period, pre that period during the pandemic and 0:51:12.719 --> 0:51:13.600 kind of where we are now. 0:51:14.719 --> 0:51:17.440 Yeah, so our business thanks for having me. Our business 0:51:17.520 --> 0:51:19.279 did change a little bit, but actually a lot of 0:51:19.280 --> 0:51:21.319 the change came from a new management team that came 0:51:21.360 --> 0:51:24.400 in twenty nineteen. So part of what we did was 0:51:24.640 --> 0:51:27.240 revitalize the business and focus it more on the customer. 0:51:28.080 --> 0:51:28.520 You know, we. 0:51:28.440 --> 0:51:32.000 Obviously benefited from some of the stimulus and some of 0:51:32.040 --> 0:51:35.360 the online shopping that came from e commerce, but combined 0:51:35.360 --> 0:51:38.680 with that, we changed to a more stockship model that 0:51:38.920 --> 0:51:41.480 it provides more value to the customer. We improve the website. 0:51:41.560 --> 0:51:42.920 So there's a lot of things going on as part 0:51:42.960 --> 0:51:43.400 of the story. 0:51:43.680 --> 0:51:47.080 What are the drivers of your business? Like when I 0:51:47.080 --> 0:51:49.080 look at your financial model, what are the key drivers 0:51:49.080 --> 0:51:49.919 that I need to get right? 0:51:51.200 --> 0:51:53.239 I think the key drivers for our business what you're 0:51:53.239 --> 0:51:55.080 going to see over the next three to five years 0:51:55.640 --> 0:52:00.560 is a combination of reasonable revenue growth with with combined 0:52:00.560 --> 0:52:02.960 with operating leverage. So there's a lot of things we 0:52:03.040 --> 0:52:07.840 can do to improve marketing, expense, fulfillment expense, fixed operating leverage. 0:52:08.200 --> 0:52:11.040 And we've done a lot of improvements over time. They've 0:52:11.040 --> 0:52:14.080 all been relatively sticky, and we continue to drive improvements 0:52:14.080 --> 0:52:16.120 over the next you know, three to five years all. 0:52:16.080 --> 0:52:18.040 Right, so what give me a sense of kind of 0:52:18.320 --> 0:52:22.319 who your customer is and kind of how do they 0:52:22.320 --> 0:52:24.640 really interact with Carparks dot Com. 0:52:25.000 --> 0:52:27.480 Yeah, so our customer is going to be generally a 0:52:27.600 --> 0:52:32.799 value oriented, do it yourselfer who is relatively sophisticated or 0:52:32.920 --> 0:52:35.320 looking to do some easy jobs and save some money. 0:52:35.719 --> 0:52:38.080 Compared to brick and mortar stores, we're fifty to sixty 0:52:38.120 --> 0:52:40.680 percent cheaper. So if someone's willing to wait one or 0:52:40.680 --> 0:52:43.200 two days to get their part online, they can have 0:52:43.719 --> 0:52:48.040 significant value. And that's especially useful at a time like this. 0:52:48.680 --> 0:52:51.400 All right, so how do I you know in your business, 0:52:51.440 --> 0:52:54.880 how do you drive top line demands? Is just having 0:52:55.719 --> 0:52:59.279 more stuff, more skews that they may need or is 0:52:59.320 --> 0:53:00.400 it marketing promotion? 0:53:00.600 --> 0:53:02.240 How do you try it drive your top line? 0:53:02.840 --> 0:53:05.439 You know, for us driving top line, you know, there's 0:53:05.480 --> 0:53:07.800 a lot of value that we provide high quality parts, 0:53:08.000 --> 0:53:09.640 but what we're really looking to do is take the 0:53:09.680 --> 0:53:12.120 stress out of car repair. If you have a car 0:53:12.160 --> 0:53:14.200 that's out of warranty, that check engine that comes on, 0:53:14.719 --> 0:53:17.440 there's not really a great resource for people. And that's 0:53:17.440 --> 0:53:20.640 what we try to do is provide information, high quality parts, 0:53:21.239 --> 0:53:24.120 great value pricing and if you can't put it on yourself, 0:53:24.160 --> 0:53:26.600 we'll even connect you to a local mechanic. So we're 0:53:26.640 --> 0:53:30.839 really trying to provide a one stop shop for customers 0:53:31.239 --> 0:53:32.239 that takes the stress out. 0:53:32.120 --> 0:53:32.640 Of car repair. 0:53:33.000 --> 0:53:33.439 So help. 0:53:34.040 --> 0:53:35.680 You know, it seems like what we understand here in 0:53:35.719 --> 0:53:38.480 the post pandemic world that Detroit says it's going to 0:53:38.520 --> 0:53:40.520 build fewer cars, So the days of seventeen and a 0:53:40.560 --> 0:53:43.680 half million SAR might be over. Maybe it's fifteen fifteen 0:53:43.680 --> 0:53:46.440 and a half million cars. That means cars got to 0:53:46.600 --> 0:53:49.080 I guess, lasts longer, use cars, all that kind of stuff. 0:53:49.440 --> 0:53:52.040 Is that good for your business? Definitely? 0:53:52.080 --> 0:53:54.719 I think that's that's right when you look at SAR. 0:53:55.160 --> 0:53:58.480 You know, we had obviously a very lower SAR, you know, 0:53:58.520 --> 0:54:00.279 kind of coming into this year and part of last 0:54:00.320 --> 0:54:03.000 year due to interest rates. SAR might come down, but 0:54:03.040 --> 0:54:05.440 cars definitely have been lasted longer. They're going to commute 0:54:05.520 --> 0:54:07.560 last longer, and I think consumers are going to try 0:54:07.560 --> 0:54:12.440 to drive value by repairing their car having it lasts longer, 0:54:12.600 --> 0:54:14.920 and I think we're a great resource for them. 0:54:15.480 --> 0:54:17.000 Talk to us about I'm not sure if this is 0:54:17.040 --> 0:54:19.040 part of your business model, but we've seen in another 0:54:19.200 --> 0:54:23.560 retail spaces by now Pay Later. Is that something you 0:54:23.560 --> 0:54:24.880 guys offer? Is that a driver? 0:54:25.160 --> 0:54:27.520 How do you think about that? Yeah, that is a driver. 0:54:27.640 --> 0:54:30.080 So over the last couple of years, we've seen buy Now, 0:54:30.080 --> 0:54:34.080 Pay Later actually triple. It was running pretty steady around 0:54:34.120 --> 0:54:36.280 two and a half percent of revenue for e commerce, 0:54:36.600 --> 0:54:39.600 and recently it popped up. At the end of Q 0:54:39.640 --> 0:54:42.560 two it was running seven point nine percent, So we 0:54:42.840 --> 0:54:45.160 have seen a large uptake in that. I think it's 0:54:45.200 --> 0:54:48.080 a way that consumers are trying to balance the needs, 0:54:48.480 --> 0:54:50.760 their everyday needs with their car repair needs. 0:54:51.680 --> 0:54:53.759 You know, it's funny you go to the Consumer Electronics 0:54:53.760 --> 0:54:56.719 show and it's really an auto show, you know, with 0:54:56.760 --> 0:54:58.680 a little bit of technology around it. I mean, I 0:54:58.719 --> 0:55:01.480 think the auto industry, you know, controls way more than 0:55:01.520 --> 0:55:04.879 half the space they're out there in Vegas. How has 0:55:05.040 --> 0:55:10.600 like the computerization, the increase in technology and automobiles, How 0:55:10.600 --> 0:55:11.840 has that impacted your business? 0:55:12.800 --> 0:55:12.960 There? 0:55:13.239 --> 0:55:15.200 Actually hasn't been that much as an impact. You know. 0:55:15.200 --> 0:55:18.640 What we sell is a lot of the normal everyday 0:55:18.680 --> 0:55:21.520 items you need to repair your car. So even with 0:55:21.560 --> 0:55:24.799 a highly electric cut fied vehicle or even an EEV 0:55:25.040 --> 0:55:28.640 like a Tesla, they still have headlights, tail lights, door handles, 0:55:29.239 --> 0:55:32.320 ac compressors, radiators, all the normal nuts and bolts you 0:55:32.400 --> 0:55:34.440 might call it that go into a car. Even the 0:55:34.520 --> 0:55:37.200 most modern of all cars still has those basics. 0:55:37.320 --> 0:55:40.080 Okay, So you're not getting into the electronics and that 0:55:40.120 --> 0:55:42.759 type of stuff. That's something that you know, an onneer 0:55:42.760 --> 0:55:45.360 would have to go to the dealer or something like that. 0:55:45.360 --> 0:55:48.480 That's correct, Yeah, and I think those are usually very durable. 0:55:48.600 --> 0:55:51.000 So the ecu as you might call it, inside of 0:55:51.000 --> 0:55:54.880 a car that manages the brains of everything is very robust. 0:55:55.120 --> 0:55:57.320 The things that go out for people are the everyday 0:55:57.320 --> 0:56:00.319 items like the AC compressor, the window regulator that makes 0:56:00.320 --> 0:56:00.960 the window. 0:56:00.680 --> 0:56:01.239 Go up down. 0:56:01.560 --> 0:56:04.560 So is your competition kind of just my local car 0:56:04.680 --> 0:56:05.600 dealer in town. 0:56:07.080 --> 0:56:09.439 Our local competition is going to be really the brick 0:56:09.480 --> 0:56:11.399 and mortar, the big brick and mortars you might think about, 0:56:11.560 --> 0:56:15.600 or maybe a dealership where I think people that don't 0:56:15.640 --> 0:56:18.359 know about us might just walk in and pay three 0:56:18.440 --> 0:56:20.920 hundred dollars for a headlight without realizing that they could 0:56:20.920 --> 0:56:23.200 come to our website wait one or two days. You know, 0:56:23.239 --> 0:56:25.279 we cover ninety eight percent of the country and two 0:56:25.320 --> 0:56:27.040 day shipping, they could buy that same part for one 0:56:27.120 --> 0:56:28.240 hundred and thirty five dollars. 0:56:28.920 --> 0:56:29.680 So it's interesting. 0:56:29.719 --> 0:56:32.200 I'm just kind of wondering again kind of the growth 0:56:32.200 --> 0:56:37.200 of the business. It seems like, can you acquire customers? 0:56:37.200 --> 0:56:39.200 Can you market and say hey, you can do this, 0:56:39.400 --> 0:56:41.400 Like I'm not a handy person. I'm not a but 0:56:41.440 --> 0:56:43.680 if you say, hey, you can install this headlight. 0:56:44.320 --> 0:56:46.960 That's exactly right. So we recently just launched a line 0:56:47.080 --> 0:56:50.160 of YouTube instructional videos starting with a four to foot 0:56:50.160 --> 0:56:53.480 and fifty. It's the nation's most popular car, showing you 0:56:53.520 --> 0:56:55.879 how to replace a lot of parts on that. We're 0:56:55.920 --> 0:56:58.080 going to the Dodge Ram And we also recently launched 0:56:58.080 --> 0:57:01.040 a Spanish language version of this channel to kind of 0:57:01.080 --> 0:57:03.680 hit more audiences and make people feel comfortable that they 0:57:03.680 --> 0:57:04.840 can do these repairs themselves. 0:57:04.880 --> 0:57:06.920 That makes sense, all right, Ran, Thanks for taking the time. 0:57:06.960 --> 0:57:09.759 Appreciate learning a little bit about your company and kind 0:57:09.760 --> 0:57:12.440 of its expectations and kind of how the what are 0:57:12.480 --> 0:57:14.640 the drivers of this company? Ryan Lockwood, He's a CFO 0:57:14.800 --> 0:57:17.760 carparks dot com. You can check out the stock it 0:57:17.840 --> 0:57:20.720 is trades on the Nastaq p r TS. 0:57:22.560 --> 0:57:25.640 Thanks for listening to the Bloomberg Markets podcasts. You can 0:57:25.680 --> 0:57:29.880 subscribe and listen to interviews at Apple Podcasts or whatever. 0:57:29.560 --> 0:57:32.240 Podcast platform you prefer. I'm Matt Miller. 0:57:32.480 --> 0:57:35.400 I'm on Twitter at Matt Miller nineteen seventy three. 0:57:35.840 --> 0:57:38.200 And I'm Faul Sweeney. I'm on Twitter at pt Sweeney. 0:57:38.360 --> 0:57:41.040 Before the podcast, you can always catch us worldwide at 0:57:41.040 --> 0:57:42.760 Bloomberg Radio