WEBVTT - What’s Keeping the Market Moving, Vaping Regulation, Ducati CEO 0:00:00.440 --> 0:00:02.960 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:03.040 --> 0:00:05.480 Jason Kelly. We're here every day bringing you the latest 0:00:05.519 --> 0:00:09.760 news from the world of business and finance, plus technology, politics, economics, 0:00:09.840 --> 0:00:13.480 all harnessing the power of Bloomberg Business Week reporters and editors, 0:00:13.480 --> 0:00:16.639 not to mention our hundred journalists and analysts more than 0:00:16.680 --> 0:00:19.280 a hundred and twenty countries. You can download Bloomberg Business 0:00:19.320 --> 0:00:22.200 Week on iTunes, SoundCloud, or Bloomberg dot com. You can 0:00:22.200 --> 0:00:24.520 also listen to our radio show weekdays at two pm 0:00:24.520 --> 0:00:34.120 Eastern only on Bloomberg Radio. All right, let's talk a 0:00:34.159 --> 0:00:36.520 little bit about where we are in the stock market. 0:00:36.560 --> 0:00:39.200 I think Carol is entering this segment with a little 0:00:39.240 --> 0:00:42.360 bit of trepidation because Sandy Villery is here, partner of 0:00:42.440 --> 0:00:45.520 Villary Funds, looking after about two billion dollars. He's based 0:00:45.520 --> 0:00:47.479 down in New Orleans. We've been talking about the Saints, 0:00:47.560 --> 0:00:49.440 We've been talking about l s U, We're talking about 0:00:49.479 --> 0:00:52.400 University of Georgia. He's going to the SEC Championship this weekend. 0:00:52.440 --> 0:00:54.560 But we're not going to talk about that. Maybe we'll 0:00:54.600 --> 0:00:55.880 talk about it a little bit later. We're gonna talk 0:00:55.880 --> 0:00:58.240 about the market. Sandy, great to have you. Wait, I'm sorry, 0:00:58.280 --> 0:01:00.959 oh wait what? Yeah? You just did you check out? 0:01:00.960 --> 0:01:03.000 Did you go to your halty place. I'm actually looking 0:01:03.000 --> 0:01:04.800 for a Giffy that's got an eye roll so that 0:01:04.800 --> 0:01:08.319 I can tweet it out. Good good, well that tiffy, Giffy, 0:01:08.400 --> 0:01:12.280 Tiffy whatever. Yeah, okay, so let's talk about investing. Yeah, 0:01:12.280 --> 0:01:14.639 so what's the state of the markets here? Is Sandy. 0:01:14.760 --> 0:01:17.600 You know, I feel like the theme that's developed on 0:01:17.680 --> 0:01:20.560 this program over the past couple of weeks is, oh man, 0:01:20.600 --> 0:01:23.760 this feels much better than than we did, certainly back 0:01:23.760 --> 0:01:28.160 in September, even with those uh sort of unpleasant couple 0:01:28.240 --> 0:01:30.760 days earlier in the week. How do we finish the year? Yeah? 0:01:30.880 --> 0:01:34.600 I think it's interesting. We were more i'd say fed driven, 0:01:34.720 --> 0:01:36.920 So everything was revolving around are we're going up or 0:01:36.959 --> 0:01:39.640 down an interest rates? And now that looks like inflation 0:01:39.720 --> 0:01:42.160 is comfortably below you know, their targeted two percent. I 0:01:42.160 --> 0:01:44.640 think that kind of fed risk or interest rate uh 0:01:44.680 --> 0:01:46.960 you know, possibility of rate hikes or that sort of 0:01:46.959 --> 0:01:48.800 thing or kind of you know, there's nothing that's gonna 0:01:48.800 --> 0:01:50.720 happen from that front probably for another twelve months. So 0:01:50.760 --> 0:01:53.120 now it's all trade war related. So that's what's kind 0:01:53.120 --> 0:01:56.440 of been um moving moving things uh recently. And if 0:01:56.480 --> 0:01:59.200 if the trade war, if it causes some headline risk 0:01:59.200 --> 0:02:00.880 and that sort of thing, we're gonna look for our 0:02:00.920 --> 0:02:03.600 individual stocks to try to find good value. And I 0:02:03.640 --> 0:02:05.840 do think we uh, I think these little dips in 0:02:05.840 --> 0:02:08.800 here are gonna be great opportunities before the December fifteen 0:02:08.880 --> 0:02:11.880 tried trade war deadline. And and I think you'll be 0:02:11.919 --> 0:02:15.560 pleasantly uh surprised to have a nice Christmas rally. Let's 0:02:15.560 --> 0:02:17.440 talk about your fund. The Hillary Balance Fund beating just 0:02:17.480 --> 0:02:19.160 about all of its peers so far this year. It's 0:02:19.160 --> 0:02:23.560 returning nearly twenty eighty nine percent according to Bloomberg Data. Um, 0:02:23.600 --> 0:02:26.560 what's balanced mean right now? What's the right balanced strategy 0:02:26.560 --> 0:02:28.240 in this environment? Yeah? So in a in a in 0:02:28.240 --> 0:02:30.320 a perfect environment, I guess we'd be about seventy percent 0:02:30.360 --> 0:02:32.359 in stocks and thirty percent in bonds. And we're we're 0:02:32.360 --> 0:02:35.480 actually a little bit heavier on in cash right now 0:02:35.800 --> 0:02:38.560 as the market goes higher and higher. We how actually 0:02:38.560 --> 0:02:40.600 we're about ten to ten percent in cash. That it 0:02:40.680 --> 0:02:42.480 sounds like a lot, yeah for us, it is when 0:02:42.480 --> 0:02:45.800 we're historically one to two percent in cash. So we've 0:02:45.840 --> 0:02:47.680 recently taken some profits in a few names that have 0:02:48.040 --> 0:02:50.600 you know, kind of exceeded our expectations. So have you 0:02:50.639 --> 0:02:52.800 backed out of more of the fixed income? Are backed 0:02:52.800 --> 0:02:56.160 out more of the equity side becasts they've done? Okay? Yeah, 0:02:56.160 --> 0:02:59.240 so we're we're down at about in stocks right now, 0:02:59.280 --> 0:03:00.680 so we've kind of back out of that, and then 0:03:00.680 --> 0:03:03.119 we're kind of at the minimum level on bonds as well, 0:03:03.240 --> 0:03:05.200 just thinking that you know, with rates going as low 0:03:05.240 --> 0:03:07.120 as they have, maybe there's not much more you know, 0:03:07.240 --> 0:03:10.160 left in the bond market either. So are you with 0:03:10.280 --> 0:03:12.160 that high cash position. Is it just a case you're 0:03:12.160 --> 0:03:15.440 waiting for some new equities that kind of catch your 0:03:15.440 --> 0:03:17.280 attention to invest in, or is it because you think 0:03:17.280 --> 0:03:20.200 our sessions near? Yeah? I know that basically we we 0:03:20.200 --> 0:03:21.560 we see it as sort of bullets in the gun. 0:03:21.600 --> 0:03:23.520 And if you think about last year December of let's 0:03:23.560 --> 0:03:25.200 call it December of two thousand and eighteen, when the 0:03:25.200 --> 0:03:27.320 market fell nine point two percent, that gave us the 0:03:27.360 --> 0:03:29.800 opportunity to get two new names to work, and literally 0:03:29.800 --> 0:03:32.280 between Christmas and New Year's we would have put by 0:03:32.280 --> 0:03:35.480 two more stocks. So we're looking for opportunities and volatility 0:03:35.480 --> 0:03:37.720 to buy. So let's talk about some of the names 0:03:37.760 --> 0:03:41.280 that you like. On Semiconductor is a really interesting one. 0:03:41.320 --> 0:03:45.040 Not when we hear about a ton, but you like it. Why. Yeah, 0:03:45.040 --> 0:03:47.839 So we had owned Cypress Semiconductor and Cyper's got bought 0:03:47.840 --> 0:03:51.280 out by in finniy On for for literally like fifteen 0:03:51.280 --> 0:03:57.000 times that we were happy, nice premium and and so, uh, 0:03:57.040 --> 0:03:59.040 there wasn't much left in that, and so we switched 0:03:59.040 --> 0:04:01.520 to on Semiconductor. Really, we think it's a kind of 0:04:01.560 --> 0:04:03.680 a secret way to play the five G build out 0:04:03.720 --> 0:04:06.040 because they had no exposure, no content at all on 0:04:06.040 --> 0:04:08.080 on three G or four G. Yet they have a 0:04:08.120 --> 0:04:11.280 hundred dollars of content on each of these base stations. 0:04:11.320 --> 0:04:14.160 That's uh, they've got almost all of us, all the suppliers, um, 0:04:14.200 --> 0:04:16.000 so they're involved in all of those and I think 0:04:16.000 --> 0:04:18.120 that's gonna be a nice play for them. It looks like, 0:04:18.160 --> 0:04:19.600 though I'm just gonna at our f a page on 0:04:19.600 --> 0:04:22.320 the Bloomberg, it looks like revenues though have been declining 0:04:22.720 --> 0:04:25.599 quarter to quarter year every year. Uh, same thing with earning, 0:04:25.720 --> 0:04:28.400 So what what's the problem here. What's interesting is if 0:04:28.440 --> 0:04:30.640 you look at they do have exposure to auto so 0:04:30.640 --> 0:04:32.760 they're in um, they're in you know, Europe we saw 0:04:32.839 --> 0:04:35.480 weaker auto numbers. China we saw weaker auto numbers. The 0:04:35.480 --> 0:04:37.360 amazing thing is when you look at their peers, their 0:04:37.360 --> 0:04:39.640 peers are down like nine or ten. Because of that, 0:04:39.760 --> 0:04:42.240 they were only down two percent. So they're they're doing 0:04:42.320 --> 0:04:44.599 much better. And it's because of the content story in 0:04:44.680 --> 0:04:49.520 autos where each iteration of these electric vehicles or autonomous vehicles, uh, 0:04:49.520 --> 0:04:52.640 they're getting more and more their content um on each one. 0:04:52.680 --> 0:04:55.560 So that's what's that's what's helping them out. Talk to 0:04:55.600 --> 0:04:59.160 me about E Health. That's another interesting name because I 0:04:59.560 --> 0:05:01.880 had did an interview earlier today we're gonna play out 0:05:02.600 --> 0:05:04.560 with the CEO of I A C. And he was 0:05:04.560 --> 0:05:07.120 talking about getting into the travel business early sort of 0:05:07.160 --> 0:05:10.560 early Internet, early two thousand's health is sort of trying 0:05:10.600 --> 0:05:13.200 to do what expedient and travelosity we're doing. You know 0:05:13.320 --> 0:05:15.000 that that that's it, and it's it's amazing if you 0:05:15.040 --> 0:05:17.839 compare their their website, which e health dot com, and 0:05:17.839 --> 0:05:19.960 you compare it to medicare dot com, or you compare 0:05:19.960 --> 0:05:23.240 it to healthcare I'm sorry dot gov. Uh, it's it's 0:05:23.279 --> 0:05:27.240 an amazing difference. The the government run website is so clunky. Uh, 0:05:27.279 --> 0:05:30.640 there's is extremely slick and a true e commerce website. 0:05:31.000 --> 0:05:33.960 UH love the demographics. Ten thousand, five hundred people are 0:05:34.000 --> 0:05:37.080 turning sixty five in the US every single day. Sixty 0:05:37.160 --> 0:05:41.120 million UH seniors are are eligible for their for for 0:05:41.240 --> 0:05:43.800 medicare and they just have one percent market share. We're 0:05:43.800 --> 0:05:45.720 hoping it gets up to four percent market share, so 0:05:45.720 --> 0:05:49.120 so they sell insurance they do. It's This is a 0:05:49.160 --> 0:05:51.560 stock that's up a hundred and thirty four percent this 0:05:51.640 --> 0:05:54.200 year and we're talking about a forward looking pe of 0:05:54.200 --> 0:05:56.400 about forty one, which is fine if the if the 0:05:56.440 --> 0:05:58.640 growth rates justify that. When did you get into this name? 0:05:59.080 --> 0:06:02.000 We actually got in UM with within about thirty days ago. 0:06:02.080 --> 0:06:03.960 We bought it. How many days about? It was around 0:06:03.960 --> 0:06:06.520 fifty nine dollars a share. There was a lot of 0:06:06.520 --> 0:06:08.880 headlines on nine. Now it's a ninety. It's been a 0:06:08.880 --> 0:06:11.080 great performer so far, right, But this is kind of 0:06:11.080 --> 0:06:13.040 my you know what I'm saying in terms of use 0:06:13.120 --> 0:06:15.880 these macro headlines to sort of find individual stories and 0:06:16.160 --> 0:06:19.440 buy them quickly. Because when there was the Medicare for 0:06:19.480 --> 0:06:23.240 All discussion, this stock got absolutely walloped. As UM. This 0:06:23.240 --> 0:06:25.080 would kind of this wouldn't do so well for their 0:06:25.120 --> 0:06:27.440 business if if every you know, you didn't have to 0:06:27.440 --> 0:06:29.839 go purchase healthcare when the market gets slammed down, whether 0:06:29.839 --> 0:06:31.720 it was three months ago, whether it was August, is 0:06:31.760 --> 0:06:33.480 that what you do a bunch of buying? Yeah, actually 0:06:33.560 --> 0:06:36.160 we did so, um and and that's that's that's what 0:06:36.160 --> 0:06:38.360 we're that's what we're hoping to do. And um we 0:06:38.360 --> 0:06:40.560 we will continue to take advantage of volatility to buy 0:06:40.560 --> 0:06:42.000 good stuff. You want the markets to be beat up 0:06:42.000 --> 0:06:43.919 a little bit, a little bit, a little bit of volatility. 0:06:44.040 --> 0:06:45.800 Use it as your friend, not your enemy, all right. 0:06:46.160 --> 0:06:49.200 Sandy Villery, partner of Villary Funds based down New Orleans. 0:06:49.839 --> 0:06:53.039 Go Tigers, Go Saints, and that is spelled g E 0:06:53.279 --> 0:06:58.120 A u X go. I'm rolling my eyes me and 0:06:58.160 --> 0:07:01.040 Taylor Swift. I just put it on Twitter, boy, all right, 0:07:01.800 --> 0:07:10.320 you must a lot. So we do want to talk 0:07:10.640 --> 0:07:14.760 about vaping, already under scrutiny for health risks and deaths. 0:07:14.840 --> 0:07:16.760 It was linked to a rare type of lung damage 0:07:16.760 --> 0:07:20.040 in a new case report released just yesterday. Controversy of 0:07:20.080 --> 0:07:22.200 the safety of the cigarettes man it is raging big 0:07:22.200 --> 0:07:23.600 time in the U S, where the deaths of as 0:07:23.600 --> 0:07:26.080 many as forty seven people have been linked to a 0:07:26.120 --> 0:07:29.560 different severe respiratory illness. The FDA, meantime, has said it 0:07:29.600 --> 0:07:31.880 does not know when final guidance will be issued when 0:07:31.920 --> 0:07:35.080 it comes to East cigarettes. So let's talk about regular 0:07:35.480 --> 0:07:38.720 regulations of the e cigarette market. With us. Is Dr 0:07:38.840 --> 0:07:41.480 Joanna co And, Professor of disease prevention and director of 0:07:41.520 --> 0:07:45.040 the Institute for Global Tobacco Control at Johns Hopkins Bloomberg 0:07:45.120 --> 0:07:47.920 School of Public Health, joining us on the phone from Baltimore. 0:07:48.160 --> 0:07:49.840 We do want to point out that the Bloomberg School 0:07:49.840 --> 0:07:52.560 of Public Health is supported by Michael R. Bloomberg, founder 0:07:52.600 --> 0:07:56.560 Bloomberg LP and Bloomberg Philanthropies. Michael Bloomberg has also committed 0:07:56.560 --> 0:07:58.760 a hundred and sixty million dollars in an effort to 0:07:58.800 --> 0:08:03.360 ban flavored East cigaret and vaping devices. Dr Cohen, nice 0:08:03.400 --> 0:08:05.800 to have you with us. This is certainly, um one 0:08:05.800 --> 0:08:09.320 of the big issues that the country is grappling with, 0:08:09.400 --> 0:08:13.120 and I think regulators are as well. You know, what 0:08:13.200 --> 0:08:15.520 are some of the issues that are front and center 0:08:15.520 --> 0:08:19.600 when it comes to vaping regulation? Right? Well, this is 0:08:19.640 --> 0:08:22.320 a tricky issue, exactly as you say. On one hand, 0:08:22.960 --> 0:08:26.640 we want to help get cigarette smokers off of cigarettes, 0:08:26.720 --> 0:08:29.680 because that's the most harmful thing you can do. Um. 0:08:29.880 --> 0:08:33.520 So the idea of the cigarettes and the promise of 0:08:33.559 --> 0:08:38.000 them was to really provide that off ramp for cigarette smokers. 0:08:38.040 --> 0:08:42.120 The problem is that, um, instead, we've seen a huge 0:08:42.320 --> 0:08:46.760 uptake of the cigarette use among kids, and that's exactly 0:08:46.800 --> 0:08:49.440 not what we want to see. It's turned out to 0:08:49.440 --> 0:08:54.200 be a public health disaster. And so what happens next 0:08:54.240 --> 0:08:57.160 from a regulatory perspective? Dr Cohen? Because you know, what 0:08:57.240 --> 0:08:59.040 are the interesting things that care was alluding to this, 0:08:59.280 --> 0:09:02.600 It's happened very fast that the government, uh, and I 0:09:02.640 --> 0:09:06.360 think even public health advocates have really identified this as 0:09:06.400 --> 0:09:10.840 a major issue. How do we get sort of smart regulation? 0:09:11.440 --> 0:09:15.360 But it sounds like in a relatively quick manner given 0:09:15.440 --> 0:09:19.560 the speed at which this is all happening, that's right. 0:09:19.679 --> 0:09:22.920 So Um. One of the things that's very concerning with 0:09:22.960 --> 0:09:25.520 a huge increase in use among kids is that the 0:09:25.600 --> 0:09:31.000 vast majority of them are using flavored the cigarettes. Um. 0:09:31.080 --> 0:09:34.199 We also hear that cigarette smokers who are using the 0:09:34.280 --> 0:09:37.600 cigarettes to quit also like flavors. So it gets really tricky. 0:09:37.640 --> 0:09:41.600 How do you get flavors to cigarette smokers who are 0:09:41.600 --> 0:09:44.800 trying to quit, but keep them completely away from the kids. 0:09:45.559 --> 0:09:48.360 So it does get tricky, and I think that's why 0:09:48.480 --> 0:09:50.920 the f d A is taking a little bit of 0:09:50.960 --> 0:09:53.320 time to make sure that they get it right. So 0:09:53.440 --> 0:09:55.200 I guess what I'm trying to understand. Two is I 0:09:55.200 --> 0:09:57.280 feel like we have various conversations where folks say the 0:09:57.320 --> 0:10:00.800 problems are with like black market e cigarettes. But I 0:10:00.840 --> 0:10:03.120 mean the point that you're making is we obviously don't 0:10:03.120 --> 0:10:06.719 want these in the hands of children. For smokers who 0:10:06.720 --> 0:10:09.360 are trying to break the habit, East cigarettes is a 0:10:09.360 --> 0:10:13.080 better option. Is that fair? Is that correct? Well, we 0:10:13.120 --> 0:10:17.160 still don't have great evidence yet that it really does 0:10:17.280 --> 0:10:20.400 help cigarette smokers quip, but that was the promise. That's 0:10:20.679 --> 0:10:23.000 that's the one reason why we would we might have 0:10:23.040 --> 0:10:25.440 these cigarettes on the market. What's interesting too, and I 0:10:25.480 --> 0:10:28.400 know Bloomberg Business Week magazine has covered this um in 0:10:28.480 --> 0:10:31.400 depth in terms of how quickly East cigarettes seemed to 0:10:31.440 --> 0:10:35.040 get to be able to come to market, um, even 0:10:35.040 --> 0:10:39.719 though the FDA oversight wasn't necessarily all in place. I mean, 0:10:39.800 --> 0:10:43.760 how did that happen? Well, when the sigarettes first came 0:10:43.800 --> 0:10:46.199 into the market, the FDA saw them and thought, hey, 0:10:46.240 --> 0:10:48.600 this is a smoking cessation device, and we need to 0:10:48.640 --> 0:10:51.960 regulate it as other smoking cessation devices. So we certainly 0:10:51.960 --> 0:10:56.640 have approved nicotine replacement therapy and other pharmaceutical products that 0:10:56.720 --> 0:10:59.360 have been shown to be effective to help smokers quit 0:11:00.120 --> 0:11:03.520 um but Egrette companies food and so we don't want 0:11:03.520 --> 0:11:06.400 to be regulated like smoking sensation devices. We want to 0:11:06.400 --> 0:11:09.760 be regulated like tobacco products. And that put a huge 0:11:09.840 --> 0:11:13.680 delay in the process. That's taken a while for all 0:11:13.679 --> 0:11:16.960 the administrative pieces to fall into place for the FDA 0:11:17.080 --> 0:11:21.160 to actually be able to now take action in regulating 0:11:21.200 --> 0:11:24.760 the cigarettes like tobacco products. And so, what are the 0:11:24.800 --> 0:11:27.320 companies saying at this point, Because, as you're alluding to 0:11:27.640 --> 0:11:32.120 Dr Cohen, you know, companies have very powerful voices among regulators, 0:11:32.320 --> 0:11:36.800 among lawmakers. We've seen that for decades in the case 0:11:36.880 --> 0:11:41.840 of tobacco. Uh, what are they saying and doing that 0:11:42.040 --> 0:11:46.360 may either help this move along or hinder it. Well, 0:11:46.400 --> 0:11:48.840 they certainly have their backs against the wall right now 0:11:49.160 --> 0:11:55.400 and trying to maintain credibility and and trying to maintain 0:11:55.559 --> 0:11:58.680 as many as much profits as they can as um 0:11:58.720 --> 0:12:03.400 as the regulators are are working to also address the 0:12:03.400 --> 0:12:07.040 public's health and keep kids away from these products. So 0:12:07.400 --> 0:12:09.280 you know, on one hand, we hear about one of 0:12:09.280 --> 0:12:13.640 the major e cigarette companies, um taking flavors off the 0:12:13.720 --> 0:12:17.280 market in this country, but just like we've seen with 0:12:17.360 --> 0:12:20.600 Big Tobacco in the past, they still have their flavors 0:12:20.600 --> 0:12:23.080 on the market in other countries around the world. So 0:12:23.559 --> 0:12:27.040 you know, they're just acting where they feel the pressure 0:12:27.080 --> 0:12:29.960 and not really taking the high road and thinking about 0:12:30.040 --> 0:12:32.959 the true impacts of their products bottom line. Just got 0:12:32.960 --> 0:12:34.840 about thirty seconds here. Do you think that we just 0:12:34.880 --> 0:12:39.480 went too fast on this? Uh, they went too fast. 0:12:39.520 --> 0:12:42.319 We went a little too slow and um, and we're 0:12:42.320 --> 0:12:45.600 in a bit of a tragedy right now where um, 0:12:45.640 --> 0:12:49.120 you know, hopefully now our politicians are going to be 0:12:49.200 --> 0:12:52.600 more concerned about doing right by the kids then by 0:12:53.000 --> 0:12:56.480 uh concerned about votes in the next election, and that 0:12:56.559 --> 0:12:59.480 we can pull this epidemic under control. All right, We're 0:12:59.480 --> 0:13:01.680 gonna leave it that note. UM, Dr Cohen, thank you 0:13:01.720 --> 0:13:04.480 so much. Joanna co And, Professor of disease Prevention, Director 0:13:04.480 --> 0:13:07.280 of the Institute for Global Tobacco Control at Johns Hopkins 0:13:07.400 --> 0:13:10.720 Bloomberg School of Public Health. Of course, that school supported 0:13:10.720 --> 0:13:13.880 by Michael R. Bloomberg, founder Bloomberg LP and Bloomberg philanthropies, 0:13:13.880 --> 0:13:17.120 and as we mentioned earlier Earlier, Michael Bloomberg has also 0:13:17.880 --> 0:13:21.480 committed money to an effort to ban flavored e cigarettes 0:13:21.520 --> 0:13:31.600 and vaping devices. All right, so let's talk a little motorcycles. 0:13:31.760 --> 0:13:33.920 We have got just the man to do it. Jason 0:13:33.960 --> 0:13:38.520 Chinok is here. He is CEO of Ducati North America. 0:13:38.640 --> 0:13:41.160 And can I just start by say we're gonna talk 0:13:41.160 --> 0:13:42.560 about new bikes and stuff like that. But can I 0:13:42.600 --> 0:13:46.040 just say, this must be like the coolest job in 0:13:46.080 --> 0:13:50.200 the world. Unquestionably, it's definitely one of the coolest motorcycle guy. 0:13:50.360 --> 0:13:54.000 I mean, you actually started working behind the counter at 0:13:54.040 --> 0:13:57.360 a like doing motorcycle parts, right, Yes, I did. In fact, 0:13:57.440 --> 0:13:59.680 it was something that years ago, I was following a 0:13:59.679 --> 0:14:02.240 different career path and I made the decision. I said, Okay, 0:14:02.280 --> 0:14:04.800 this is clearly not working out for me this other 0:14:05.080 --> 0:14:07.200 way I was going, And so I decided I'm going 0:14:07.240 --> 0:14:09.960 to follow another passion in life. And I started doing 0:14:09.960 --> 0:14:13.960 my homework, research, informational interviews with executives in the motorcycling industry. 0:14:14.240 --> 0:14:15.760 And then I realized, I said, the way for me 0:14:15.800 --> 0:14:17.600 to really learn this is just to cut my teeth 0:14:17.600 --> 0:14:19.560 at the at the beginning at the very bottom. And 0:14:19.600 --> 0:14:21.080 so I started off as a parts guy at a 0:14:21.120 --> 0:14:23.640 motorcycle dealership. Men, I had an education, and I was 0:14:23.680 --> 0:14:26.520 way over qualified for like what I was doing, But 0:14:26.760 --> 0:14:28.360 I said, this is where I got to learn, and 0:14:28.360 --> 0:14:30.760 I learned customers, I learned the product, I learned how 0:14:30.800 --> 0:14:33.720 to work with manufacturers. I mean, like that was those 0:14:33.840 --> 0:14:37.400 those four years were probably the most formative years of 0:14:37.440 --> 0:14:40.480 my career, uh, in terms of setting me for my future. 0:14:40.560 --> 0:14:43.400 What's changed about the industry since you started, Uh, the 0:14:43.440 --> 0:14:46.160 industry is actually it's become a little bit smaller than 0:14:46.240 --> 0:14:48.240 back then. I mean back then. Obviously, back in the 0:14:48.760 --> 0:14:52.200 early nineties or late nineties, credit was a little looser, uh, 0:14:52.240 --> 0:14:53.920 and so a lot of people were getting finance for 0:14:54.000 --> 0:14:56.480 motorcycles that maybe weren't really in the position where they 0:14:56.480 --> 0:14:59.360 should be financing motorcycles. And so as a result, what 0:14:59.440 --> 0:15:01.120 we saw as we saw a bit of shrinking in 0:15:01.120 --> 0:15:04.920 the industry when the recession hitting, credit tried up. But 0:15:05.000 --> 0:15:07.360 the good thing is is for brands like Ducati and 0:15:07.440 --> 0:15:10.520 where we're at, we really weren't affected by that because 0:15:10.560 --> 0:15:12.520 we always sold in the premium and we never had 0:15:12.560 --> 0:15:16.840 predatory lending or questionable credit practices, and so as a result, 0:15:17.280 --> 0:15:20.320 we gained a tremendous amount of market share when the 0:15:20.360 --> 0:15:23.640 recession hit. Now, volumes did affect We're effected a little 0:15:23.640 --> 0:15:26.320 bit as well. But and then as the market came back, 0:15:26.640 --> 0:15:28.240 not to the same degree as it was before. As 0:15:28.240 --> 0:15:30.560 it came back, we retained our share, increased our volumes, 0:15:30.560 --> 0:15:32.840 and so it's been quite positive for us in that regard. 0:15:33.120 --> 0:15:37.480 All right, so let's talk about this new lineup. What's different? 0:15:38.040 --> 0:15:41.320 What can people be looking for. Well, one of the 0:15:41.360 --> 0:15:43.520 flagship motorcycles that a lot of people are getting really 0:15:43.520 --> 0:15:45.800 excited about is a new motorcycle that we have called 0:15:45.800 --> 0:15:49.600 the street Fighter, and ye know that it is and 0:15:49.600 --> 0:15:52.280 and it comes from the idea of somebody taking a 0:15:52.320 --> 0:15:54.600 sport motorcycle like what you would see out on the racetrack, 0:15:55.080 --> 0:15:57.720 removing the farings off of it, the body work, and 0:15:57.800 --> 0:16:00.160 putting on a really cool headlight in the handlebar and 0:16:00.240 --> 0:16:03.360 that basically takes a very aggressive sport bike and makes 0:16:03.400 --> 0:16:06.240 it accessible for the street. Except for we've taken it 0:16:06.280 --> 0:16:09.560 and redone a completely beautiful redesign and it's built off 0:16:09.560 --> 0:16:13.080 of the V four platform and chassis which is uh 0:16:13.160 --> 0:16:15.600 which which is a number one seller last year for us. 0:16:16.000 --> 0:16:18.240 So there's that product and that that's on one end, 0:16:18.320 --> 0:16:21.440 and on the other end we find ourselves into the 0:16:21.480 --> 0:16:23.840 e bike world as well. Well, that's what I'm curious about. 0:16:23.840 --> 0:16:26.640 Tell us how aggressively you guys are pursuing I mean, 0:16:26.800 --> 0:16:29.280 how much your customer wants this? Well, this is something 0:16:29.360 --> 0:16:31.720 they launched in Europe last year as a pilot project, 0:16:31.800 --> 0:16:33.760 and then when I saw it come out on myself 0:16:33.800 --> 0:16:35.720 being a mountain biker, was like, I want that product, 0:16:35.720 --> 0:16:38.040 even if it's just to have one for myself. Uh. 0:16:38.080 --> 0:16:40.200 And then we took the last year in taking feedback 0:16:40.240 --> 0:16:42.320 from our customer base, from our dealer network and just 0:16:42.360 --> 0:16:45.600 really to understand and research what that markets like. And 0:16:45.640 --> 0:16:48.720 it's incredible. It's a very fast growing segment in North America. 0:16:48.800 --> 0:16:50.880 In Europe, it had actually been going for quite years. 0:16:51.560 --> 0:16:54.840 But our customer bases our first audience for this product 0:16:54.880 --> 0:16:58.520 because it's branded Dukati. But there's also really unique technologies 0:16:58.520 --> 0:17:00.840 and the partnership that we have with the company that's 0:17:00.880 --> 0:17:04.240 making the bikes with us. So but what's how how 0:17:04.280 --> 0:17:05.600 well did it sell in Europe? And I knew it 0:17:05.600 --> 0:17:07.640 sounds like you tinkered with it a little bit. Uh, 0:17:07.680 --> 0:17:09.880 it's going to the first sales in North America are 0:17:09.880 --> 0:17:13.240 going to happen, in correct, So what are your anticipation. 0:17:13.280 --> 0:17:16.560 What kind of a market size is this? Our market potential? Well, 0:17:16.600 --> 0:17:19.200 in terms of market potential, we're actually not looking necessarily 0:17:19.200 --> 0:17:21.679 at the bicycle business to try and compare us to that. 0:17:21.720 --> 0:17:23.520 We're looking at the first year for to be a 0:17:23.560 --> 0:17:26.480 supplement to what our dealers are selling and also to 0:17:26.480 --> 0:17:29.480 complement our customers life so volumes honestly, where it's not 0:17:29.560 --> 0:17:32.359 something that we're going to be very aggressive on. We 0:17:32.560 --> 0:17:35.400 as a premium bran, I'd rather deliver a good experience 0:17:35.840 --> 0:17:38.639 not only with the dealership and the product, but also 0:17:38.680 --> 0:17:40.280 for the customer and to be able to build it 0:17:40.280 --> 0:17:42.560 in a much more natural way. But Jason, why do it? Then? 0:17:42.920 --> 0:17:44.879 Why do it? Because it's a compliment to our the 0:17:44.920 --> 0:17:47.600 brand and also to our dealers, and our customers love 0:17:47.680 --> 0:17:50.480 this and in the motorcycling world a lot of alart. 0:17:50.520 --> 0:17:52.040 I mean, I'm glad that you're doing it because I'm 0:17:52.080 --> 0:17:54.320 kind of all in on green, but I'm you know, 0:17:54.760 --> 0:17:57.440 you know, I would I would be it would be 0:17:57.680 --> 0:18:00.119 impossible for me to claim that we were doing this 0:18:00.359 --> 0:18:03.080 to be green. It's not that it's the fact that 0:18:03.119 --> 0:18:06.840 it's appreciate the honest it's it's a really interesting technology 0:18:06.880 --> 0:18:10.280 and product where people can actually enjoy out into the 0:18:10.320 --> 0:18:13.280 real world. I mean, as an avid mountain biker, I 0:18:13.320 --> 0:18:15.960 can now ride with people that maybe aren't as skilled 0:18:16.000 --> 0:18:18.240 as a mountain biker with me and can go for longer. 0:18:18.320 --> 0:18:21.440 And that's it's that's why it's a compliment versus let's say, 0:18:21.960 --> 0:18:24.880 a green approach to the idea of a quiet bike. 0:18:25.560 --> 0:18:28.679 Uh no, more different than than a bicycle would be. 0:18:28.720 --> 0:18:30.720 I mean, really, you have a little wizzard the electric motor, 0:18:30.800 --> 0:18:33.720 and it's a it's a cyst, so it's not it 0:18:33.720 --> 0:18:35.480 doesn't do the pedaling for you, and it's not like 0:18:35.560 --> 0:18:38.080 a motorcycle where you throttle it and go. You have 0:18:38.200 --> 0:18:39.960 to put the power in in order for it to 0:18:40.000 --> 0:18:42.800 assist you to go through it. And so talk to 0:18:42.880 --> 0:18:46.320 us about your customer because, as you say, it's higher end, 0:18:46.400 --> 0:18:50.040 so maybe a little more recession proof. But we're constantly 0:18:50.320 --> 0:18:54.440 talking to ceo s about what they're seeing from their 0:18:54.480 --> 0:18:58.080 customers in terms of their willingness to spend. The consumer 0:18:58.119 --> 0:19:02.720 has been unbelievably resilient through this very long bullmarket. As 0:19:02.760 --> 0:19:06.480 you know, are you seeing any cracks at all, any caution, 0:19:06.560 --> 0:19:09.760 any pullback as you talk to customers being through the 0:19:09.800 --> 0:19:12.440 last recession, I'm always have a bit of cautious optimism 0:19:12.560 --> 0:19:16.560 is we like to use that term, but we continue 0:19:16.560 --> 0:19:19.119 to bring out more premium product, and we continue to 0:19:19.160 --> 0:19:21.560 bring out product that's on the higher end in terms 0:19:21.560 --> 0:19:26.560 of both price that seems to be more resilient than 0:19:26.840 --> 0:19:29.600 let's say even the more entry level product in our brand. Interesting, 0:19:29.720 --> 0:19:32.520 so uh, they think the challenge that we see is 0:19:32.560 --> 0:19:35.760 how do we continue to bring people into motorcycling, and 0:19:35.800 --> 0:19:38.360 how do we bring them in through the sub ten 0:19:38.400 --> 0:19:42.240 thousand dollar motorcycles to help foster new growth in development 0:19:42.240 --> 0:19:46.080 because at some point those customers are our top end 0:19:46.119 --> 0:19:48.440 customers start to age out, so you have to replenish them. 0:19:48.520 --> 0:19:50.800 We're not really having that sort of effect like some 0:19:50.880 --> 0:19:53.399