WEBVTT - Markets, Cars, And Ice Cream (Radio) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.520 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.800 at Bloomberg dot com slash podcast. Now, let's bring in 0:00:22.880 --> 0:00:26.279 Lauren Gilbert right now from Wealthwise Financial Services. She's the 0:00:26.320 --> 0:00:30.800 founder and the CEO. And what a time to be investing, 0:00:31.200 --> 0:00:34.800 making investment decisions, deciding on investment strategy. What do you do, 0:00:35.000 --> 0:00:41.159 Loreen after a nine point one percent cp I print right. 0:00:41.240 --> 0:00:44.880 It's a shocking number, definitely, and it's got investors nervous. 0:00:44.920 --> 0:00:48.400 But I think when we think about having a level head, 0:00:49.000 --> 0:00:52.200 when we look at core inflation has been coming down 0:00:52.440 --> 0:00:55.920 to hit a peak, and I don't think that the 0:00:56.040 --> 0:00:59.280 FED will be as aggressive as some people are thinking. 0:00:59.400 --> 0:01:03.680 I think they night stick to the basis points. Nonetheless, 0:01:03.760 --> 0:01:05.959 no matter what it is and whatever it is that 0:01:06.000 --> 0:01:11.080 we're looking at, we just have to focus on long 0:01:11.200 --> 0:01:14.200 term investing. And with that, I think that investors are 0:01:14.600 --> 0:01:20.319 actually probably too uh too worried, too fearful about this 0:01:20.480 --> 0:01:24.240 and keeping their equity exposure in line with their risk tolerance. 0:01:24.319 --> 0:01:28.679 So while we've pulled in some cash, not being overly 0:01:28.840 --> 0:01:33.360 conservative with equity exposure. Loreen, let's talk about this Humiss 0:01:33.560 --> 0:01:36.639 data if we can here. It's coming in pretty good 0:01:36.680 --> 0:01:40.680 actually at a time when consumer sentiment is extremely extremely low. 0:01:41.040 --> 0:01:45.000 How much stocks should be put in this particular report? Yeah, 0:01:45.000 --> 0:01:50.680 exactly that the consumer sentiment has been extremely low. Um, 0:01:50.720 --> 0:01:53.400 but when you look at today and the retail sales number, 0:01:54.240 --> 0:01:56.600 it shows that consumers are still spending. So there's this 0:01:56.680 --> 0:02:01.880 disconnect between consumer sentiment and and actually what people are doing. 0:02:01.920 --> 0:02:05.440 And I think hopefully that holds because we rely on 0:02:05.520 --> 0:02:08.880 our economy on the consumer. Two thirds of our GDP 0:02:09.040 --> 0:02:12.000 is based on the consumer spending. So, uh so we 0:02:12.040 --> 0:02:14.160 are seeing the consumer spending. Now, what we don't really 0:02:14.160 --> 0:02:16.959 know is how much of that is just higher prices, 0:02:17.000 --> 0:02:20.640 So higher prices, but people are actually purchasing less but 0:02:20.680 --> 0:02:23.280 the prices are higher, so we have to factor that in. 0:02:23.400 --> 0:02:26.960 But people are spending. The consumer is still strong, and 0:02:27.000 --> 0:02:29.880 so we think the consumer can weather this, but they're 0:02:29.880 --> 0:02:32.520 not happy about it. They're not They're not happy that 0:02:32.560 --> 0:02:36.799 they're spending extra money on goods. In terms of the 0:02:36.800 --> 0:02:40.200 FED UM, you know, a hundred basis points has been floated, 0:02:40.240 --> 0:02:42.639 but it seems like seventy five is pretty much a lock. 0:02:42.760 --> 0:02:46.359 What do you expect for you know, the the year 0:02:46.480 --> 0:02:50.399 end rate or the terminal rate from the Federal Reserve. Yeah, 0:02:50.400 --> 0:02:52.280 I think we're the three and a half more than 0:02:52.720 --> 0:02:55.720 the four that might be expected. So you know, we 0:02:55.800 --> 0:02:58.840 do think the seventy five and then um, you know, 0:02:58.880 --> 0:03:02.200 we'll see, hopefully there's a breather where the Federal Reserve 0:03:02.240 --> 0:03:06.560 will take a look at how that's really being priced 0:03:06.600 --> 0:03:10.000 in with the economy and how the economy is taking 0:03:10.040 --> 0:03:13.440 it um and so I think that what we're going 0:03:13.480 --> 0:03:17.280 to see this year is an aggressive fad and next 0:03:17.360 --> 0:03:21.359 year they might have to completely reverse course and become 0:03:21.480 --> 0:03:25.760 much more accommodative based on the economy. So uh so, 0:03:25.760 --> 0:03:29.799 so I think, you know, consumers as well as investors 0:03:29.840 --> 0:03:34.080 just ride this out. Looking specifically, what we're doing is 0:03:34.160 --> 0:03:38.520 looking for companies that are spending on capex, what's going 0:03:38.520 --> 0:03:41.160 on with share buy backs, you know, what is their 0:03:41.200 --> 0:03:45.520 strength on cash flow? And those strong companies are what 0:03:45.560 --> 0:03:48.920 we're looking for. Well, you're talking about fundamentals here, Can 0:03:48.960 --> 0:03:51.240 we just have a sentiment for a second, because do 0:03:51.320 --> 0:03:53.560 people really want to even be in this market when 0:03:53.560 --> 0:03:56.480 there's this much uncertainty. It's something you're seeing in commodities, 0:03:56.480 --> 0:03:59.480 for example, that simply open interest in that market is 0:03:59.600 --> 0:04:02.920 drop because nobody wants to navigate the volatility. Can the 0:04:02.960 --> 0:04:06.760 same be said for the SMP five Well, you mentioned 0:04:06.760 --> 0:04:10.200 a really good point. For sure. Definitely, emotions get involved 0:04:10.240 --> 0:04:13.040 when it comes to investing, and that's where we have 0:04:13.240 --> 0:04:17.440 to help our investors keep emotion out of it and 0:04:17.760 --> 0:04:20.320 really look at that, you know, how to client call 0:04:20.400 --> 0:04:25.040 the other day saying all I'm hearing is recession, recession, recession, recession. 0:04:25.320 --> 0:04:29.280 How bad is it? And our feeling is that, you know, one, 0:04:29.320 --> 0:04:33.200 we're not in a recession yet and to uh, it's 0:04:33.279 --> 0:04:35.000 probably not going to be as bad as people think 0:04:35.040 --> 0:04:37.760 it's going to be. So with that, yes, we could 0:04:37.760 --> 0:04:41.919 still see some downside from here on equity prices, but 0:04:42.040 --> 0:04:44.160 when we look at our year in numbers, on our 0:04:44.200 --> 0:04:47.960 expectations on the SMP, it's higher than what it is 0:04:48.080 --> 0:04:51.640 right now. So as long as investors can take, you know, 0:04:51.680 --> 0:04:55.680 and look at it out longer term view, um, it 0:04:55.760 --> 0:04:58.560 makes more sense to be invested, and like I was 0:04:58.560 --> 0:05:02.880 saying earlier, the average investor is still as too little 0:05:02.960 --> 0:05:05.400 equity exposure. So if I came to you with a 0:05:05.440 --> 0:05:07.520 million bucks in the three to five year time horizon, 0:05:07.560 --> 0:05:11.120 what would you do. We have that situation right now. 0:05:11.160 --> 0:05:13.920 We're investing that money, We're putting it to work. Now, 0:05:14.200 --> 0:05:16.680 that investor that I'm talking about is a modern investor, 0:05:17.000 --> 0:05:21.240 So holding to that sixty allocation and of course including 0:05:21.320 --> 0:05:26.760 including alternatives in the mix, uh would make sense? All right? Loreen, 0:05:26.839 --> 0:05:29.919 thanks so much. Lori and Gilbert, their founder and CEO 0:05:30.120 --> 0:05:33.400 of Wealthwise Financial Services talking to us about the current 0:05:33.440 --> 0:05:40.520 investment environment. Me and pretty have a bet. Now, we 0:05:40.560 --> 0:05:43.920 do have a bet. I think that inflation peaked at 0:05:43.960 --> 0:05:47.560 least in terms of the headline CPI number with the 0:05:47.600 --> 0:05:53.160 reading that we got what was that Wednesday? Right? Nine nine? 0:05:53.200 --> 0:05:56.400 Handle yet? So if if we get a higher number 0:05:56.440 --> 0:05:59.040 than that, I will take you to dinner wherever you 0:05:59.120 --> 0:06:02.320 like and one of your friends. So it's not a date. 0:06:04.800 --> 0:06:07.840 Maybe maybe my wife could come over. Yeah, let's do that. Um, 0:06:08.400 --> 0:06:12.159 if I'm right and hold on, If I win and 0:06:12.400 --> 0:06:18.440 inflation is higher and has not, Pete, what do you want? 0:06:18.160 --> 0:06:21.440 I don't know, if I take you to dinner, and 0:06:21.640 --> 0:06:24.279 if if I win, you pay for dinner. Exactly, you 0:06:24.320 --> 0:06:28.760 take me to the Flying j um in in Harrisburg. 0:06:28.760 --> 0:06:31.599 We're gonna interview the CEO right now, Schamik Konar, CEO 0:06:31.760 --> 0:06:35.000 of the Pilot Company. I grew up with Pilot and 0:06:35.080 --> 0:06:37.920 the Flying j I used to drive all the time. 0:06:38.000 --> 0:06:41.560 I still kind of do from Grandville, Ohio to New 0:06:41.640 --> 0:06:45.000 York City and I always stop at um at your 0:06:45.560 --> 0:06:48.320 what do you call them truck stops? Convenience centers? What 0:06:48.360 --> 0:06:51.440 do you call the Flying j are the pilots called 0:06:51.480 --> 0:06:54.640 them travel travel centers? That's right, I always say truck 0:06:54.680 --> 0:06:57.719 stop people being a cupstomer Matt to be appreciated and 0:06:57.760 --> 0:07:00.920 hopefully we do a good job for you. No, obviously 0:07:01.080 --> 0:07:03.520 I love it, or I wouldn't stop there all the time. Um, 0:07:03.640 --> 0:07:07.640 although it is very convenient, right, they seem to be everywhere, 0:07:07.680 --> 0:07:09.520 at least for a Midwest boy like me. How many 0:07:09.520 --> 0:07:12.040 stores do you have? And and and where are they? 0:07:12.080 --> 0:07:16.480 Where they focused concentrated? No, we were, Actually we're we're 0:07:16.560 --> 0:07:19.200 all over the country. So you know, we sell a 0:07:19.200 --> 0:07:22.160 few a lot of about eight hundred and twenty locations 0:07:22.360 --> 0:07:26.800 around the country. And and Canada and uh, you know, 0:07:26.840 --> 0:07:30.360 we're pretty much on every major rangstate and uh and 0:07:30.360 --> 0:07:32.760 and some of the local roads depending on the amount 0:07:32.800 --> 0:07:35.680 of amount of traffic there. So you know, it's a 0:07:35.880 --> 0:07:43.360 pretty uh, pretty broad network. And so I guess the 0:07:43.440 --> 0:07:46.040 story is, now you're gonna put e V chargers everywhere? 0:07:46.080 --> 0:07:49.920 Is that in it? Well? Yes, that is. We are 0:07:50.000 --> 0:07:53.800 partnering out with General Motors to put EV chargers at 0:07:54.120 --> 0:07:57.880 at five hundred of locations to start with. Yes, So 0:07:58.200 --> 0:08:00.000 talk to us a little bit about the transition there 0:08:00.000 --> 0:08:02.000 went from gas stations to e vs. We had a 0:08:02.000 --> 0:08:04.960 guest on almost like yesterday from GMO. From from GM. Yeah, 0:08:04.960 --> 0:08:07.360 that's what he's talking about, right, I'm aware, thank you, 0:08:07.880 --> 0:08:11.000 uh talking about well, you know, we're still have this 0:08:11.120 --> 0:08:13.920 massive infrastructure to build, but I'm curious about the trade 0:08:13.920 --> 0:08:18.680 off there. You know, the way we pretty the way 0:08:18.720 --> 0:08:21.680 we look at this is our goal is to provide 0:08:21.800 --> 0:08:24.120 a great experience for our guests and to be able 0:08:24.160 --> 0:08:27.440 to deliver the form of energy that they need. Right, 0:08:28.000 --> 0:08:31.960 so you know, whether whether whether people need electricity or 0:08:32.000 --> 0:08:34.920 whether they need gasoline, our goal is to provide whatever 0:08:35.000 --> 0:08:38.080 form of energy they need. So you know, we view 0:08:38.200 --> 0:08:40.679 this as a as a bit of the natural transition 0:08:40.960 --> 0:08:44.120 as we uh you know, move away from fossil fields, 0:08:44.160 --> 0:08:46.240 which is gonna take a long time in my opinion. 0:08:46.320 --> 0:08:49.640 But but we are moving to a world where we 0:08:49.679 --> 0:08:52.680 are going to have to service many kinds of guests 0:08:52.679 --> 0:08:55.520 as we call them at our travel centers. And I 0:08:55.640 --> 0:08:58.640 see a future where, you know, for a period of time, 0:08:58.720 --> 0:09:02.200 we will be selling so mean diesel. Uh you know, 0:09:02.360 --> 0:09:06.840 we we currently sell a lot of bio diesel, renewable diesel, 0:09:07.040 --> 0:09:11.400 ethan al, and we'll be selling electricity and possibly hydrogen 0:09:12.080 --> 0:09:14.960 and uh, you know, possibly compressed natural gas. So I 0:09:15.000 --> 0:09:18.920 see this kind of multi few future for us as 0:09:18.960 --> 0:09:21.400 we work our way through this transition. I mean, I 0:09:21.440 --> 0:09:23.600 assume that you also want to make money though, right, 0:09:23.720 --> 0:09:28.280 So what kind of margins, uh do you expect from 0:09:28.400 --> 0:09:33.000 or or or maybe even you know, gross revenue do 0:09:33.040 --> 0:09:38.680 you expect from an electric vehicle customer versus someone who's 0:09:38.840 --> 0:09:43.240 fueling up a gas or diesel. That my, my, my 0:09:43.280 --> 0:09:45.800 shareholders will be pleased that you bring that up. But 0:09:48.240 --> 0:09:50.839 you know, look at this point, it's a little bit 0:09:50.840 --> 0:09:53.480 of a complicated question. And the reason I the reason 0:09:53.600 --> 0:09:57.440 I say that is, uh, you know, uh the electric 0:09:58.559 --> 0:10:03.520 UH procurement rates are actually fairly complicated around the country, 0:10:03.559 --> 0:10:05.640 so and this is one of the challenges we're working 0:10:05.679 --> 0:10:09.080 to figure out. It's based on the rate structures that 0:10:09.120 --> 0:10:13.480 are offered by utilities in different states. You can actually 0:10:13.520 --> 0:10:18.080 have pretty significant variations in the price of electricity and 0:10:18.200 --> 0:10:21.400 the way electricity is priced because you have these things 0:10:21.400 --> 0:10:24.960 called demand charges where you have to pay regardless of 0:10:24.960 --> 0:10:28.160 whether you're whether people are charging at your location or not. 0:10:28.520 --> 0:10:30.199 And if I have to pass all of that onto 0:10:30.200 --> 0:10:33.560 our customers or you know, if you have large demand charges, 0:10:33.640 --> 0:10:35.360 it's gonna be help for us to make money for 0:10:35.440 --> 0:10:38.000 some period of time. In all those states where you 0:10:38.040 --> 0:10:41.560 don't have demand charges, it's gonna be you know, possible 0:10:41.600 --> 0:10:45.000 for us to UH to make money. But ultimately, the 0:10:45.040 --> 0:10:47.760 way I think about it is, we have to be 0:10:47.840 --> 0:10:51.160 competitive with the price of gasoline. So when you think 0:10:51.200 --> 0:10:53.920 about it on a you know, for a mile basis, 0:10:54.000 --> 0:10:56.880 for a mile cost of fuel, we have to be 0:10:56.920 --> 0:11:00.800 competitive with gasoline. So right now, it's it's it's a 0:11:00.840 --> 0:11:04.280 difficult call to make, but this is something that we're 0:11:04.280 --> 0:11:06.360 going to have to work through state by state and 0:11:06.360 --> 0:11:10.400 work through with our customers as well. From a market's perspective. 0:11:10.440 --> 0:11:16.200 It feels like President Biden's comments that operators of such 0:11:16.240 --> 0:11:21.199 facilities as yours have the ability to control the prices 0:11:21.240 --> 0:11:23.880 at the pump, the prices that consumers are facing from 0:11:23.960 --> 0:11:26.840 marcus perspective, which which Matt and Night talked about on 0:11:26.840 --> 0:11:29.920 the daily, that seems like a very challenging thing to do. 0:11:29.960 --> 0:11:32.040 But I'd like to get your response as the owner 0:11:32.360 --> 0:11:37.319 of one of such operators. You know, um, what ends 0:11:37.360 --> 0:11:40.079 up happening is the factors that drive are pricing are 0:11:40.240 --> 0:11:43.440 are generally three things, right. First is what the cost 0:11:43.640 --> 0:11:45.720 of the fuel is. And this is what you guys 0:11:46.440 --> 0:11:48.800 talk about all the time, right Like double Pi is 0:11:48.800 --> 0:11:52.040 trading at ninety forty two right now, and you know 0:11:52.320 --> 0:11:55.120 you've got on letter gasoline trading at two two right, 0:11:55.160 --> 0:11:57.800 So the cost of the product. Uh And and one 0:11:57.880 --> 0:12:00.160 of the challenges we do run into is we has 0:12:00.160 --> 0:12:02.679 to carry inventory. So the markets move up and now 0:12:02.720 --> 0:12:05.320 and every day, but we have to carry a fair 0:12:05.360 --> 0:12:08.480 amount of inventory. So you know, how we price also 0:12:08.520 --> 0:12:11.240 depends on what the thought stuff that inventory in our 0:12:11.240 --> 0:12:14.800 tanks place. The second factor that comes into play is 0:12:14.840 --> 0:12:17.480 what our competitors are doing. Right as you know, this 0:12:17.640 --> 0:12:21.160 is uh. You know, retail retail fuel is a hyper 0:12:21.160 --> 0:12:24.320 competitive industry. I mean I grew up in India. When 0:12:24.360 --> 0:12:26.920 I came to the US, I was absolutely shocked by 0:12:26.960 --> 0:12:28.960 the fact that you could have three or four gas 0:12:29.040 --> 0:12:34.320 stations at one intersection right competing for prices. So competitive 0:12:34.360 --> 0:12:38.240 behavior comes into play a lot. And these days, uh, 0:12:38.280 --> 0:12:41.120 you know, with with what's happened in the US uh 0:12:41.920 --> 0:12:45.520 uh fuel industry, with the fact that our refining capacity 0:12:45.600 --> 0:12:47.839 has gone down, you know, kind of six six or 0:12:47.880 --> 0:12:51.360 seven percent over COVID and the fact that we're running 0:12:51.400 --> 0:12:57.040 law and inventories. Localized markets have tremendous dislocations and fuel. 0:12:57.120 --> 0:12:59.640 You can have markets which are or you can have 0:12:59.760 --> 0:13:02.920 term those which a hundred miles apart, and you see 0:13:02.120 --> 0:13:06.120 fifty different in the cost of fuel. So you know, 0:13:06.160 --> 0:13:08.400 what you see on the imax of what you see 0:13:08.400 --> 0:13:11.560 on the trading in the trading markets every day are 0:13:11.600 --> 0:13:14.480 not necessarily the cost of fuel that we face in 0:13:14.600 --> 0:13:18.040 local markets. So you know, those are the two factors 0:13:18.080 --> 0:13:21.080 that come into play, and they basically, um, you know, 0:13:21.400 --> 0:13:24.800 we're in the world right now where we have hurricane 0:13:24.920 --> 0:13:29.520 level of volatility. Yeah, absolutely, every day Shamik listen if 0:13:29.520 --> 0:13:32.000 you're in New York City, please stop by. I love 0:13:32.000 --> 0:13:34.040 to have you in the studio and talk further about this. 0:13:34.120 --> 0:13:36.480 If you're in Washington, d C. Maybe go to the 0:13:36.480 --> 0:13:42.360 White House and explain that to them. I'm in my 0:13:42.400 --> 0:13:45.760 sweet spot right now. My buddy Kevin Tynan just walks into. 0:13:45.800 --> 0:13:48.000 I haven't seen you in like six years, dude. It's 0:13:48.000 --> 0:13:51.160 a real bromance in here. Bloomberg Bloomberg Intelligence. He covers 0:13:51.160 --> 0:13:54.640 the carmakers and uh Critty, you'll get to know him well. 0:13:54.679 --> 0:13:57.640 Me and Tretty are starting a car podcast. Yeah, we'll 0:13:57.640 --> 0:13:59.719 have to have you on it. Um, let's start by 0:13:59.720 --> 0:14:02.560 talking about the CT four black Wing. No, this is 0:14:02.559 --> 0:14:06.360 a Cadillac product that Um it's tough to get right now, right, 0:14:06.720 --> 0:14:10.240 just like every really special vehicle. But I want to 0:14:10.240 --> 0:14:14.160 hear specifically about this as well. What is it? Well, 0:14:14.200 --> 0:14:18.080 what what's beautiful? Is uh? Manual transmission? I think it's 0:14:18.360 --> 0:14:24.560 close six horsepower something ridiculous like that, but luxury. So 0:14:24.600 --> 0:14:28.240 what is it? A supercharged six point two lead V eight? Yeah, yeah, 0:14:28.400 --> 0:14:31.720 it's it's essentially it's the four door z O six 0:14:32.400 --> 0:14:35.040 more or less. Well, now they have an escalade coming out. 0:14:35.120 --> 0:14:37.640 It's going to have the same power plant. In terms 0:14:37.640 --> 0:14:40.600 of getting these cars, it's just impossible. I've you know, 0:14:40.640 --> 0:14:43.920 I've thought a Chevy Silverado z R two. I think 0:14:43.960 --> 0:14:46.760 it's the sweet spot for uh, the sort of off 0:14:46.880 --> 0:14:52.120 road style commuter trucks, Starbucks trucks. But I'm not gonna 0:14:52.120 --> 0:14:53.800 get it. I'm worried I won't get it till the 0:14:53.880 --> 0:14:55.800 end of the year because of this chip shortage. And 0:14:55.800 --> 0:14:57.680 I just saw this morning a number across the Charmer 0:14:57.800 --> 0:15:00.560 that was really depressing. Porsche first half, say, ails down 0:15:00.640 --> 0:15:03.760 five per cent. And you know that the giant empire 0:15:03.840 --> 0:15:06.840 of Volkswagen should be able to move all of their 0:15:06.920 --> 0:15:09.240 chips to their highest margin business. So if they can't 0:15:09.280 --> 0:15:12.240 even get Porsche sales to rise, we're in trouble. Well. 0:15:12.280 --> 0:15:15.560 And the other thing that not only are you and 0:15:15.760 --> 0:15:18.960 customers waiting for product, your at least in this country, 0:15:18.960 --> 0:15:21.920 you're paying over M S r P, you know, over 0:15:22.000 --> 0:15:26.120 for just a regular truck YEP. And and it's amazing, right, 0:15:26.160 --> 0:15:29.000 in all my years of doing this, we've been above 0:15:29.200 --> 0:15:32.560 M S r P as an industry since October of 0:15:32.680 --> 0:15:35.760 last year. I wouldn't think that I would have ever 0:15:35.800 --> 0:15:39.640 seen that, even maybe for one or two automakers for 0:15:39.760 --> 0:15:44.960 one month, never mind an entire industry for It'll be 0:15:44.960 --> 0:15:46.920 a year by the time this this rings out. But 0:15:47.680 --> 0:15:49.960 I just looked at the chart. Out of the thirty 0:15:50.040 --> 0:15:52.800 some odd brands in the US, there's six that are 0:15:52.840 --> 0:15:58.040 still selling below ms RP. Everybody else is above. Wait, 0:15:58.280 --> 0:16:04.280 what what's below? What's below? Uh there's BMW, Mini, Ram, 0:16:04.480 --> 0:16:09.560 Jeep and Alpha Romeo. Oh well, brand, I'm talking to 0:16:09.640 --> 0:16:12.880 brand brand on average, Kevin, Let's broaden this out for 0:16:13.120 --> 0:16:15.440 the people like myself who don't know half the words 0:16:15.480 --> 0:16:17.640 you just said. You and Matt just nerded out about 0:16:17.840 --> 0:16:21.400 let's talk about supply chains here, chip shortages. Already. We 0:16:21.400 --> 0:16:23.720 were just talking to a guest who was saying they're 0:16:23.720 --> 0:16:28.680 putting more EV charging stations in their their gas trucking stops, 0:16:28.680 --> 0:16:33.080 transportation centers, whatever, pilot flying j that's the one, um, 0:16:33.120 --> 0:16:35.080 But I'm curious how much of it is getting ahead 0:16:35.080 --> 0:16:37.160 of itself. You have a chip shortage, you need more 0:16:37.240 --> 0:16:41.200 chips to make evs. That production it almost feels like 0:16:41.200 --> 0:16:43.520 it's plateauing to some extent, and yet you have this 0:16:43.600 --> 0:16:45.680 infrastructure that's being built out, and that doesn't even take 0:16:45.720 --> 0:16:49.520 into account the affordability of EVS, which is more expensive anyway. Right, 0:16:49.600 --> 0:16:55.520 And we could do a whole podcast on this, but um, look, 0:16:56.680 --> 0:16:58.840 I am of the belief and you're probably not going 0:16:58.920 --> 0:17:00.720 to hear this in many places that a lot of 0:17:00.760 --> 0:17:05.720 this shortages are being orchestrated for those reasons of balancing 0:17:05.760 --> 0:17:10.520 supply and demand, getting over ms RP for product. Uh 0:17:10.560 --> 0:17:13.480 you know, so costs have been rationalized in this industry 0:17:13.520 --> 0:17:16.240 to the point where automakers don't have to push push 0:17:16.280 --> 0:17:20.320 push production choked the dealers would supply then throw a 0:17:20.320 --> 0:17:22.880 ton of incentives at it to to move it out 0:17:22.920 --> 0:17:28.439 the door. So to put it in context, four million 0:17:28.600 --> 0:17:32.000 units inventory prior to the pandemic, four million units on 0:17:32.040 --> 0:17:34.680 the ground in the US rolling every month. We now 0:17:34.720 --> 0:17:38.120 have one point two million. There be roughly a good 0:17:38.160 --> 0:17:39.760 month in the U s would be one point five 0:17:39.800 --> 0:17:42.720 million sales from one point five million transactions. So we 0:17:42.760 --> 0:17:44.960 had two and a half times as many units on 0:17:44.960 --> 0:17:48.760 the ground prior to the pandemic. Now we're nicely imbalance, 0:17:49.080 --> 0:17:53.119 and you're seeing the effect on margins and on pricing power. 0:17:53.720 --> 0:17:57.520 So in my mind, the motivation for the automakers is 0:17:57.800 --> 0:18:02.080 it's not a chip. Yeah, there's a chip otherwise I 0:18:02.080 --> 0:18:04.520 want my truck right now. But you're right. I mean 0:18:05.960 --> 0:18:10.080 between the time that I started shopping for my truck 0:18:10.359 --> 0:18:15.080 in February and then actually put in the order in April, 0:18:15.640 --> 0:18:19.840 they raised prices twice on that one specific model, and 0:18:19.880 --> 0:18:22.160 of course they're raising prices across the industry. The only 0:18:22.160 --> 0:18:25.399 thing that makes me doubt and orchestration. I mean maybe 0:18:25.400 --> 0:18:29.120 there's a mild orchestration, but not like a full blown 0:18:29.160 --> 0:18:33.800 conspiracy theory is that dealerships are getting the amount over 0:18:33.960 --> 0:18:35.800 M S R P the A D M if you will, 0:18:36.240 --> 0:18:39.800 And I think that makes um the and correct me 0:18:39.840 --> 0:18:42.280 if I'm wrong, the big producers kind of angry. I 0:18:42.320 --> 0:18:45.440 think this is an excuse for GM and Ford to say, 0:18:45.480 --> 0:18:48.359 you know what, we're moving to a direct sales model. Well, 0:18:48.400 --> 0:18:51.440 first of all, I don't think you can scale direct sales, right. 0:18:51.760 --> 0:18:53.600 If you're a g MM Ford and you're selling two 0:18:53.600 --> 0:18:56.960 and a half million units a year in this country, 0:18:57.359 --> 0:18:59.040 I just don't know how you're going direct. The other 0:18:59.080 --> 0:19:03.680 thing is, look, you're a manufacturer and and I say 0:19:03.720 --> 0:19:06.840 this to people all the time as a consumer, where 0:19:06.920 --> 0:19:11.560 you think that the that the dealership model is is 0:19:11.680 --> 0:19:14.159 a bad experience what do you think that's going to 0:19:14.240 --> 0:19:16.920 be like when you try and buy vehicles at retail 0:19:17.080 --> 0:19:20.520 from a manufacturer who's never done it? Right, So, so 0:19:20.600 --> 0:19:24.600 the idea that that process would actually be better going 0:19:25.119 --> 0:19:27.800 to a company who has never done anything like it 0:19:27.840 --> 0:19:30.640 and it's hundred plus years of existence, to me makes 0:19:30.680 --> 0:19:33.000 no sense. But there wouldn't be the a d M, 0:19:33.040 --> 0:19:35.960 which is, by the way, the additional dealer market. Yeah, 0:19:35.960 --> 0:19:38.399 they're sure there would, right. So, so if if a 0:19:38.440 --> 0:19:41.120 manufacturer sells to a dealer at wholesale, you think they're 0:19:41.119 --> 0:19:43.080 going to leave that money on the table for you know, 0:19:43.600 --> 0:19:46.800 they're gonna sell the you and and if there's if 0:19:46.800 --> 0:19:49.000 there's if you don't want your truck at the price 0:19:49.080 --> 0:19:51.840 they want you to pay, and there's three people behind you. 0:19:52.880 --> 0:19:55.600 Good point, right. So, so the idea that the manufacturer 0:19:55.680 --> 0:19:58.320 is going to do the consumer a favor by selling 0:19:58.359 --> 0:20:01.359 directly to them, I think is is just misguided. All right, Well, 0:20:01.400 --> 0:20:04.000 we'll see if they can maybe break off little pieces 0:20:04.040 --> 0:20:06.959 of their business to do that, like Ford split, you know, 0:20:07.119 --> 0:20:10.040 the E VS away from the ice business. Yeah. Well 0:20:10.080 --> 0:20:13.080 that that tells me two things, right, One is that 0:20:13.080 --> 0:20:15.359 that either and I don't believe this to be the 0:20:15.400 --> 0:20:17.600 case that you don't get how things are retailed at 0:20:17.640 --> 0:20:20.760 scale in this country, or it's not going to be scaled. Kevin. 0:20:20.840 --> 0:20:23.520 I could do this for hours, obviously, and someday we will. 0:20:27.800 --> 0:20:31.760 Nathan Hagar is there to join me because he loves 0:20:31.840 --> 0:20:36.280 ice cream so much. Mentioned Spider Man back in the day. 0:20:36.280 --> 0:20:38.439 I used to make the Spider Man Sunday. Have you 0:20:38.440 --> 0:20:40.080 ever heard of that? No? What's how do you do that? 0:20:40.320 --> 0:20:43.320 So it's vanilla ice cream and you put chocolate syrup 0:20:43.359 --> 0:20:46.520 on it in a web pattern. That's all it is. Yeah, 0:20:46.720 --> 0:20:48.840 not too exciting, but I thought it would be read 0:20:49.400 --> 0:20:52.760 yeah you would think so. Yeah that actually, Oh my goodness, 0:20:52.800 --> 0:20:58.160 that sounds pretty nice. Strawberry ice cream with chocolate. Kim 0:20:58.160 --> 0:21:03.160 Padal Regwam joins us CEO Dryers Grand ice Cream. Kim, 0:21:03.200 --> 0:21:05.280 thanks so much for your time. Is it is it 0:21:05.480 --> 0:21:10.399 National ice Cream Day today? No? Sunday Sunday? Yes, of 0:21:10.400 --> 0:21:13.639 course it's on Sunday, Matt, I didn't know it was 0:21:14.000 --> 0:21:19.920 Sunday ice Cream Sunday. It's perfectly positioned on Sunday. Yeah, 0:21:20.320 --> 0:21:25.040 is it on Sunday? Every years it is on Sunday. Well, 0:21:25.040 --> 0:21:29.280 there you go. So um how's business right now? I mean, 0:21:29.359 --> 0:21:33.000 I I imagine I was just looking for milk futures 0:21:33.040 --> 0:21:36.560 on the Bloomberg terminal. I imagine those prices have risen 0:21:36.600 --> 0:21:41.760 along with everything else, you know, So business is very 0:21:41.840 --> 0:21:45.320 very strong. So our business Dryers, Grand ice Cream, and 0:21:45.359 --> 0:21:49.399 the brands that we have Hogen, Dass, Dryers, Drumstick, Outshine, 0:21:49.720 --> 0:21:52.439 they are all performing so well in the marketplace. I mean, 0:21:52.440 --> 0:21:55.040 if you look so far this year, we're a double 0:21:55.080 --> 0:21:58.479 digit growth coming off you know, a couple of really 0:21:58.560 --> 0:22:01.960 big years as well. Also, we're the We're very proud 0:22:02.000 --> 0:22:05.840 we're the biggest ice cream manufacturer in America and we 0:22:05.880 --> 0:22:09.240 have the biggest brand with Hogan Dust. You know, prices 0:22:09.680 --> 0:22:13.080 on some products and we've seen the inflation like everybody has, 0:22:13.240 --> 0:22:15.600 and so what we've been trying to do is keep 0:22:15.640 --> 0:22:20.120 our focus on investing in factory so we are building capacity. 0:22:20.720 --> 0:22:23.239 It's all we've been focused on for the last two 0:22:23.359 --> 0:22:25.359 years because we want to make sure when people go 0:22:25.440 --> 0:22:28.080 to the store, and you know, it's a tough time 0:22:28.160 --> 0:22:30.280 right now, right prices are high that we can put 0:22:30.280 --> 0:22:33.080 a smile on faces with the ice cream that we have, 0:22:33.440 --> 0:22:36.520 so um, that has been our big agenda to fight 0:22:36.600 --> 0:22:39.520 all the challenges going on. Yeah, and it is a 0:22:39.520 --> 0:22:42.360 tough time. And I know when I walk through the 0:22:42.640 --> 0:22:46.040 ice cream frozen section, I look not just at the 0:22:46.119 --> 0:22:49.960 prices but at the size of the cartons. Whether you're 0:22:50.000 --> 0:22:53.000 gonna have to shrink things just a little bit more 0:22:53.040 --> 0:22:56.000 to keep the prices where we expect them to be. 0:22:56.320 --> 0:23:00.480 Is that something that you're thinking about. So we what 0:23:00.600 --> 0:23:03.280 we have done is we have across all of the 0:23:03.400 --> 0:23:07.000 brands offered kind of a variety of prices and sizes. 0:23:07.040 --> 0:23:10.000