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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jai Ley.

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Speaker 1: We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Right Now.

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Speaker 1: On leadership, and it is a leadership that started out

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Speaker 1: of a very difficult, challenging childhood and what he did

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Speaker 1: at St. Vincent St. Mary High School in Akrona, Ohio,

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Speaker 1: and that was Lebron James leading early. It is something

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Speaker 1: he has continued on our Jason Kelly with this important

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Speaker 1: interview with Mr James on his business enterprises. Here is

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Speaker 1: Lebron James on a leadership and the National Basketball Association.

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Speaker 1: Being a leader is not when. It's not about when

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Speaker 1: you decide to do it. It's every single day. If

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Speaker 1: you want to be a leader, or you call yourself

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Speaker 1: a leader, has to be every single day that you

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Speaker 1: wake up and you jump out of your bid and

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Speaker 1: people are gonna follow you. Then if people are gonna

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Speaker 1: understand you and understand that you're not perfect, but they

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Speaker 1: know you are true to them, so you know, my

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Speaker 1: mission has always been that and it will it will

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Speaker 1: not change. I will continue to point out things that

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Speaker 1: I know is wrong, UM if I see it, UM,

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Speaker 1: not only socially, but also with cameras in my face.

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Speaker 1: And I will also continue to leave by example as

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Speaker 1: a model citizen, as a black man growing up UM

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Speaker 1: in America. So my mission stays the same, Lebron, I

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Speaker 1: do wonder I think back toeen and and Eric Garner

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Speaker 1: and the T shirt UH that you wore, and the

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Speaker 1: NBA has consistently stood behind you and its players in

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Speaker 1: terms of protests. Other leagues have not done that, most

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Speaker 1: notably the NFL. Now the NFL has changed its tune.

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Speaker 1: What do you make of that? UM? I do know

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Speaker 1: one thing I can speak from is what I'm a

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Speaker 1: part of and a part of the league with a

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Speaker 1: great commissioner and Adam Silver, and he's always listened to

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Speaker 1: the voice of his players, UM, and I've always respected

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Speaker 1: him of that for that, UM, He's given us an

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Speaker 1: opportunity to when we feel something that's very wrong with society,

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Speaker 1: that's very wrong with what's going on in our communities,

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Speaker 1: that we could speak upon that and use the NBA

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Speaker 1: shield to back us. And UM, I have nothing but

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Speaker 1: respect for Adam Silver. Um, as far as the NFL,

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Speaker 1: I'm not in those locker rooms. I'm not with those guys.

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Speaker 1: But I do understand, um, that an apology. I have

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Speaker 1: not heard true official apology to Colin Kaepernick on what

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Speaker 1: he was going through and what he was trying to

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Speaker 1: tell the NFL and tell the world about why he

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Speaker 1: was kneeling when he was doing that as a San

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Speaker 1: Francisco forty niner. Um, So I just see that to

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Speaker 1: be still be wrong. Um. And now they are listening something.

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Speaker 1: But I still think, um, we have not heard that

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Speaker 1: official apology to a man who basically sacrifice everything for

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Speaker 1: the better at his world. So I can say that

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Speaker 1: about about that, And Maverick, I wonder about the Kaepernick

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Speaker 1: issuing from from your perspective, knowing the business world, the

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Speaker 1: endorsement world, the economic element of this, how does that

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Speaker 1: change going forward? Given that, I think it's fair to

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Speaker 1: say Colin Kaepernick was vindicated in a lot of senses. Yeah, well,

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Speaker 1: I think you know. The fact of the matter is, Um,

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Speaker 1: Colin Kaepernick did what was on his heart, He did

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Speaker 1: what he felt was right. He took all the right steps.

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Speaker 1: People always obviously look over that he met with the military. Uh.

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Speaker 1: I think it was a marine or maybe even a

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Speaker 1: Navy seal that told him sitting was the wrong thing

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Speaker 1: to do, that he should knew. That's where he actually

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Speaker 1: got the idea. He took the right steps. But I

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Speaker 1: think as black people, you know, we've been ringing this

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Speaker 1: alarm for a long time, and and and the rest

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Speaker 1: of the country, who are you know, I happen to

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Speaker 1: believe most people are good, so who are not? Even

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Speaker 1: races have just been hitting snooze on it because it's

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Speaker 1: just the system has been set up in a way

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Speaker 1: that even if you're not racist, right, that you still

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Speaker 1: perpetuate a system that oppresses black people. An important conversation

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Speaker 1: when Jason Kelly started this project in February, but now

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Speaker 1: in the summer of our discontent, exceptionally important to listen

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Speaker 1: to Lebron James not only on his business affairs, but

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Speaker 1: also on his take on American society. This is a joy.

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Speaker 1: He comes to us today within the vicinity of his

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Speaker 1: Colby College, and he comes to us from BMB Perry

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Speaker 1: Bob where he does global allocation. But far more than that,

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Speaker 1: Mark Howard was an institution at Lehman Brothers for years

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Speaker 1: in credit analysis, were thrilled he could join us this morning. Mark,

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Speaker 1: I'm gonna cut to the chase. There's no real yield.

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Speaker 1: There's barely any nominal yield at all. What's a retire

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Speaker 1: read to do? Tom, That's a great question, because I

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Speaker 1: think even the real yield that is there is a

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Speaker 1: little bit illusory. For example, if you strip out some

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Speaker 1: of the distressed assets in the high yield market that

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Speaker 1: that the same person wouldn't normally buy, the remaining yield

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Speaker 1: or spread is really uh, quite average, if you will,

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Speaker 1: in the scheme of things looking over time. So I

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Speaker 1: think a retiree is supposed to be diversified. They're supposed

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Speaker 1: to own equities, perhaps a little bit more than they

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Speaker 1: normally do. And uh and they have to be very

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Speaker 1: careful to keep dry powder, to buy tips like we

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Speaker 1: had yesterday, because the way to generate return, the way

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Speaker 1: to generate alphau is to be fairly nimble. Unfortunately, this

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Speaker 1: is a this is a very odd market, as John

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Speaker 1: is talking about. On many occasions, policymakers are really distorting

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Speaker 1: things and that makes it very difficult for retirees. Well,

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Speaker 1: John does that on his property. The real yield we're

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Speaker 1: looking for that folks to come back sometime in two

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Speaker 1: things and twenty two. Mark, I want thank you, Mark.

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Speaker 1: I want to look right now when I look at

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Speaker 1: the yield dynamics, there's a one way bet right now

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Speaker 1: in conversation about higher yields, yield curve control, etcetera. Do

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Speaker 1: you push against the one way bet and look for

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Speaker 1: yields stability or even lower yields? You know, Tom, I

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Speaker 1: think that you know, there's a there's a short term

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Speaker 1: and there's a longer term. We do think that that

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Speaker 1: there's probably gonna be some give back and perhaps a

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Speaker 1: bit of a rally and yields, but ultimately we you know,

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Speaker 1: over the into the fourth quarter as we have election

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Speaker 1: uncertainty and and other noise in the marketplace defensiveness. But

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Speaker 1: but longer term, we think central banks are gonna really

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Speaker 1: keep pressure on yields and it's gonna be hard to

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Speaker 1: fight that tape. That's a that's a tough one to

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Speaker 1: fight against. Mark. There's a real worry about the instability

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Speaker 1: and some of the states across the United States right now.

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Speaker 1: And I just want to and I just wanted a

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Speaker 1: little bit more deeply if the United States become the

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Speaker 1: source of instability in the months to come. What does

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Speaker 1: that mean for the primacy of dollar denominated assets. You know,

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Speaker 1: it's a it's a great question, Jonathan, and and I

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Speaker 1: hear that increasingly from global investors. We've seen quite a

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Speaker 1: bit of money flowing into Europe, for example, recently reflecting

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Speaker 1: both a more active ECB, better growth data, and underlying

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Speaker 1: that issue about whether the currency tail winds might be

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Speaker 1: better in Europe than in the US. But the dollar

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Speaker 1: has been surprisingly resilient and as you as you know,

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Speaker 1: a lot of people expect one more round a fiscal stimulus,

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Speaker 1: particularly its administration looks to bolster it's reelection chances. So um,

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Speaker 1: you know, it's it's it's hard to see the dollar

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Speaker 1: giving up a lot in the short term, but longer term, yes,

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Speaker 1: that dollar primacy is at some risk, particularly depending on

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Speaker 1: how the election goes later this year. So Mark, is

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Speaker 1: that basically your way of saying that you currently are

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Speaker 1: still betting on US dollar assets ahead of others or

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Speaker 1: does this mean this is sort of a medium term

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Speaker 1: bet on on Europe? How how are you positioning well,

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Speaker 1: As one of your earlier guests Andrew said before in

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Speaker 1: a in a risk off. Treasuries still hold a lot

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Speaker 1: of the lure, as does high quality credit, so uh,

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Speaker 1: in the in the shorter term, not that we expect

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Speaker 1: a major risk off, but we wouldn't be surprised to

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Speaker 1: see a pullback over the quiet summer months when liquidity

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Speaker 1: is less and as investors position four, we think the

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Speaker 1: dollar will remain resilient, So we're not uh anticipating a

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Speaker 1: big move. We do think structurally the dollar is a

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Speaker 1: little bit expensive versus the basket and versus the Euro

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Speaker 1: longer term. Uh, you know, there there are very real

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Speaker 1: questions about dollar primacy and UM, but we're not staking

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Speaker 1: big allocation bets on that until we get closer to

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Speaker 1: the election and have more clarity around that mark. You

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Speaker 1: talked about central bank distortions, and there is this feeling,

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Speaker 1: don't fight the Fed, go into risk your assets because

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Speaker 1: yields will remain ultra ultra low and they're going to

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Speaker 1: keep pump being that prime to get asset prices higher.

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Speaker 1: At what point does that fall down? As we see

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Speaker 1: the highest pace of bankruptcy is in the US since

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Speaker 1: two thousand and nine, with Chuck E. Cheese filing for

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Speaker 1: bankruptcy this morning, at least it's a it's a terrific question.

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Speaker 1: And and you know, increasingly we're seeing fund managers, the

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Speaker 1: big major fund managers acknowledge that, uh, you know, rates,

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Speaker 1: much of the mortgage market, the investment grade credit market,

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Speaker 1: even part of the double being market is hugely distorted.

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Speaker 1: And that's not just in the US, but it's it's

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Speaker 1: in Europe as well. And so equities are the one

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Speaker 1: place to kinda to pivot or to to uh swing

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Speaker 1: your at your risk allocation. And the very low end

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Speaker 1: of the high yield market, of course that's not liquid

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Speaker 1: enough to do very tactically. So um we we do

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Speaker 1: see um, you know, the potential for particularly as we

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Speaker 1: see the second wave of corporate stress. Right the first

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Speaker 1: wave were the most directly affected companies, the airlines, the

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Speaker 1: cruise companies, U edging, and the light The second wave

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Speaker 1: are going to be the ones that are exposed to

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Speaker 1: have been basically broken, either from a business model or

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Speaker 1: from a balance sheet standpoint, and that's where you're going

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Speaker 1: to see more bankruptcies, particularly in the energy patch, but

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Speaker 1: also in retail and in other sectors. So I think

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Speaker 1: you see more dispersion, Lisa, I think you see more

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Speaker 1: differentiation between winners and losers, and then ultimately consolidation through

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Speaker 1: the bankruptcy process. Only Lisa could fit in Chucky Cheese,

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Speaker 1: and our guests would call it a great question. Still,

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Speaker 1: that's something Tom and I seriously can't do. Tom Caine

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Speaker 1: for me now, looking at this data at the moment,

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Speaker 1: there's a serious shift and we need to talk about it.

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Speaker 1: We were focusing on sequential growth and I think we

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Speaker 1: all got to slap around the head big time in

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Speaker 1: the last few weeks to focus once again on what's

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Speaker 1: really important, subcapacity economic growth. For a long long time,

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Speaker 1: we will be below potential. We talked about the airline

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Speaker 1: sector is just one example. They're going to be below capacity,

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Speaker 1: below potential for months, if not years, Tom, and that's

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Speaker 1: a massive problem for this economy. This is a really,

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Speaker 1: really important question. I should point out, folks, I've never

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Speaker 1: eaten at Charles Cheese. I'll try to get there before

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Speaker 1: they shut down at the shop Mark Howard. What is

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Speaker 1: so important about this is it really goes to the

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Speaker 1: comfort of investment grade. If John gets his subcapacity economy,

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Speaker 1: does that take out profits and reduce margins, which begins

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Speaker 1: to affect the price of investment grade paper. Tom. In

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Speaker 1: a normal world that absolutely would be the case. So

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Speaker 1: we're not in a normal world where central banks are

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Speaker 1: are really propping up the investment grade market to maintain

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Speaker 1: um you know, good good liquidity in these markets and

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Speaker 1: access to capital. All the major US corporations who needed

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Speaker 1: money this year are into early next for refinancing or

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Speaker 1: for um for investment purposes have tapptain marketing. As you know,

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Speaker 1: we've had one point two trillion of I g issuing

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Speaker 1: so far this year. The back half of the year

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Speaker 1: is gonna be a lot less, perhaps only four million

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Speaker 1: a billion of issuance. So there just isn't the need

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Speaker 1: for for this type of excuse me, isn't the need

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Speaker 1: for fresh capital. And as long as the central bank

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Speaker 1: is they're buying assets. We don't see a real pullback,

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Speaker 1: only a modest pullback investment grates and we think it's

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Speaker 1: a safe asset class for the foreseeable future. Mark. Maybe

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Speaker 1: this is off the mark, Howard Radar, but I'm going

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Speaker 1: to ask it. I think it is a timely question, folks,

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Speaker 1: and that is of state and city finances in America.

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Speaker 1: How urgent is it in the fixed income space to

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Speaker 1: get our state and local taxation fiscal debt fixed soon.

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Speaker 1: Well at the time, you know that there are both

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Speaker 1: structural and short term issues, whether it's the long term

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Speaker 1: pension and retiree health issues that that plague our our

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Speaker 1: municipalities in our states. But in the short term they're

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Speaker 1: you know, very real budget gaps that need to be

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Speaker 1: um sorted out by uh, you know, per per law UH.

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Speaker 1: And I think there's gonna be a band aid applied

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Speaker 1: to that in one form or another. No structural fix

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Speaker 1: um and so it's important, but I think Washington is

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Speaker 1: working on it, and I think it will particularly now

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Speaker 1: with the migration of the virus. It's no longer a

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Speaker 1: we they phenomena uh, and money being transported from one

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Speaker 1: state to another. We're all in this together. So I

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Speaker 1: think we're going to see some some band aids applied

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Speaker 1: to that fiscal situation. But it's a very real issue

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Speaker 1: for a lot of insurance companies, particularly pncs that are

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Speaker 1: very involved in the muni market, and of course for

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Speaker 1: a broad swath of retirees who who are active investors there.

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Speaker 1: Mark how would have BEFITS has today to catch up

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Speaker 1: with he said, right now, with us Sebastian page of

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Speaker 1: Tiro Price of course, the venerable buy side institution in Baltimore, Maryland,

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Speaker 1: and we're thrilled he could be with us for a

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Speaker 1: mid year correction. Sebastian, Within all this turmoil and the

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Speaker 1: record uncertainty, how do you reframe for the second half

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Speaker 1: of two thousand wanting Well, Tom, we just had our

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Speaker 1: Assocation Committee meeting and we will remain neutral for now

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Speaker 1: between stocks and bonds. You were just talking about the

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Speaker 1: key risks with the reopening, and those are all very

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Speaker 1: immediate risks, the pandemic and the reopening risk, and the

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Speaker 1: only thing I would say there is a significant risk.

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Speaker 1: But we also have to contrast the statistics on the

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Speaker 1: number of deaths and hospitalizations and there's a risk there

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Speaker 1: in Texas that came out this morning with the number

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Speaker 1: of cases themselves. So there's interpretation in the data and nuance,

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Speaker 1: but it is a risk. Then the election, you know,

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Speaker 1: for the second half of the year, and then just

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Speaker 1: generally the uncertainty on the pace of the economic recovery.

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Speaker 1: And this is where sentiment matters. What are what is

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Speaker 1: priston with respect to what's going to come out. We're

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Speaker 1: just talking about unemployment and claims data. You know, I

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Speaker 1: listened to your show a lot, and every gas on

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Speaker 1: Bloomberg Surveillance was pessimistic about six weeks ago. Right. The

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Speaker 1: refrain was, we're not getting a V shape and it's

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Speaker 1: going to be really, really slow more than people think. Uh.

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Speaker 1: But recently you've seen a little bit of a reset

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Speaker 1: of expectations on the upside. So that kind of gives

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Speaker 1: us pause. Actually, because we tend to lean against the wind.

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Speaker 1: So we're willing to take some cyclical exposures in our

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Speaker 1: portfolios for the second half of the year, and we

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Speaker 1: typically take a six to eight horizon under the hood

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Speaker 1: of a neutral stocks re respond positioning, so we'll have

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Speaker 1: slight overweights to small caps and emerging markets. For example,

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Speaker 1: what is leaning against the winds Maine? An environment like

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Speaker 1: this sebastition, you know it Generally speaking, it means looking

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Speaker 1: at valuation. Now, in this environment, it's very hard to

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Speaker 1: look at valuations because the fundamentals are very hard to estimate.

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Speaker 1: But let's look at emerging markets. For example, emerging markets

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Speaker 1: if you look at just forward pease, and again the

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Speaker 1: data is not perfect, right, but relative to the US,

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Speaker 1: they've essentially never been that cheap if you look at

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Speaker 1: say fifteen twenty years of data, So we're talking nine

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Speaker 1: percentile valuations in favor of emerging markets. So that's an

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Speaker 1: example of where you could lean against the wind. But

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Speaker 1: in the current environment, it's not just about valuations. It's

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Speaker 1: also about, of course, the macro. The macro could be

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Speaker 1: could be favorable for emerging markets as well. You know,

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Speaker 1: we expect a weaker dollar, and just generally speaking, coming

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Speaker 1: af you use business cycle models coming out of recessions,

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Speaker 1: emerging markets tend to do well, and the sentiment could

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Speaker 1: turn favorable if you take the six to eighteen much horizon. So, Jonathan,

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Speaker 1: that's an example of how we would think about leaning

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Speaker 1: against the wind. Look at how extremes some of the

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Speaker 1: valuations are, and then look at the other factors fundamental,

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Speaker 1: macro and sentiment. So looking at the fundamental factors, we're

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Speaker 1: just getting news that Macy's, for example, is a planning

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Speaker 1: layoffs that are roughly three percent of the total workforces.

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Speaker 1: Plays into this feeling that as this goes on, as

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Speaker 1: a sentiment SAgs in the face of those higher virus counts,

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Speaker 1: the layoffs will only continue to mount. From your perspective.

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Speaker 1: Are official shutdowns positive for sentiment given the fact that

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Speaker 1: perhaps it will shore up some confidence that the virus

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Speaker 1: will get simed and get curtailed. Or are they negative

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Speaker 1: given the fact that they could spread fear further. It's

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Speaker 1: clearer their negative, and it's clear that the news flow

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Speaker 1: for sentiment over the last couple of days is negative

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Speaker 1: because there's just so much uncertainty just about the pace

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Speaker 1: of the reopening. Right if you just zoom out and

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Speaker 1: take a longer time horizon, this is fundamentally more of

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Speaker 1: a temporary shock than other economic shocks we've had in history.

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Speaker 1: But day today, Uh, I don't think there's an expectation

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Speaker 1: that will go back into full nationwide lockdown, but it

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Speaker 1: will be a bumpy road towards reopening, and that is

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Speaker 1: definitely negative sentiment. But if you're kind of a longer

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Speaker 1: term investor, again going back to the idea of leaning

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Speaker 1: against the wind, it gives you an opportunity to do

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Speaker 1: that when valuations get really really stretched, you know. Yep, Sebastian,

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Speaker 1: the heritage of tro price. Just one final question, if

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Speaker 1: we could is growth. How do you deal with the

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Speaker 1: mega growth stocks right now? How does tro price deal

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Speaker 1: with these stocks that just go up and up and up.

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Speaker 1: You know, for us, growth remained the secular winners. But

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Speaker 1: going back to valuations, that's the most kind of worrisome

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Speaker 1: aspect of the value growth decision. Just just look at

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Speaker 1: the performance of value on your Bloomberg year today right

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Speaker 1: minus seventeen and relative to growth over the last twelve months,

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Speaker 1: thirty percent under performance value relative to growth. So we

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Speaker 1: like the fact that growth are secular winners, and we're

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Speaker 1: investors in growth stocks. But if I talk to some

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Speaker 1: of our bottom up portfolio managers, some of them are

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Speaker 1: starting to hedge some of these exposures with more cyclicality

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Speaker 1: in the portfolio, looking at financials and energy stocks for example.

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Speaker 1: US as asset allocators, we're going to be neutral for

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Speaker 1: now between value and growth. Now is not the time

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Speaker 1: to be a hero in either direction between value and

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Speaker 1: growth stocks. Sebastian Page as hero price and really good advice.

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Speaker 1: Right now we need to catch up unvail. You you

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Speaker 1: can do that with Mario Gabella. Yeah is this title

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Speaker 1: in that title at Gemco and Gabelle And yes he's

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Speaker 1: a grateful anthropist and all that. But what you really

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Speaker 1: need to know is he was a disciple of Roger Murray.

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Speaker 1: One of the reasons we have the I R A

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Speaker 1: and the old Kio account and frankly the four oh

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Speaker 1: one K was a Columbia University professor who stood up

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Speaker 1: and change the perception of value investing many many decades ago.

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Speaker 1: Mr Gibelly was a disciple of Roger Murray and he

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Speaker 1: joins us this morning, Mario, is value investing changing right now?

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Speaker 1: Is it changed from Graham and Dodd to Roger Murray

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Speaker 1: and that is it changing right now into is something new? Yeah,

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Speaker 1: that's a great question. And I'm glad you mentioned h

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Speaker 1: Roger and his success of Bruce Greenwald. What we do

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Speaker 1: and basically read annual reports. I was on conference calls yesterday,

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Speaker 1: for example, Patterson Company was talking about so on and

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Speaker 1: we're talking to broadcast of executives to understand business. So

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Speaker 1: we look with a microscope on the details that are unfolding,

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Speaker 1: but also use a telescope and say what the company

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Speaker 1: and the world gonna look like in five years. So

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Speaker 1: nothing has changed. But going back, since the middle of March,

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Speaker 1: Gubbies gold and now growth stocks have been the flavor

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Speaker 1: of the day. The descriptive see between owning a basket

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Speaker 1: of in quotes UH interesting value companies are particularly small

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Speaker 1: leverage companies on the downside of a cycle has been

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Speaker 1: a challenge. How Growth team led by Howard Wards up

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Speaker 1: thirteen percent of value teams poly down fifteen. But we

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Speaker 1: think the best is yet to come and over the

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Speaker 1: next three or four years you're gonna get an enormous

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Speaker 1: UH surgeon. And as the economy improves in value investing

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Speaker 1: type stocks, you are notorious for the conference call and

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Speaker 1: for speaking to managements. Are they impatient over there under valuation?

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Speaker 1: And can they affect a plan to find value while

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Speaker 1: they wait for the market to find value? Are they

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Speaker 1: motivated to see their shares move higher? I don't know

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Speaker 1: if they want motivated to move the shares higher. Independent

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Speaker 1: of that, If you want to be practical, Tom, if

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Speaker 1: you had a stock that was forty in your options,

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Speaker 1: are ours? We're at a strike of forty five and

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Speaker 1: you stock ten? You know you reset the option, So

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Speaker 1: forget that and let's stop being cynical all the time.

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Speaker 1: The point is that what is intrinsic value? What is

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Speaker 1: the business worth? Why aren't there more deals surfacing that value?

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Speaker 1: When will deals come back? When will the Henry Travis

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Speaker 1: is and the private equity guys and the facts unfolded.

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Speaker 1: And you're going to see more of that, particularly as

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Speaker 1: you get closer to the election, going into independent of that,

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Speaker 1: what how bad is bad? How good is good? What

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Speaker 1: are the changes in the world with regards to the

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Speaker 1: changing business models? You know Shampa has said this before,

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Speaker 1: creative the structure, we call it creative innovation. What's going

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Speaker 1: on in the digital world? And then how do you

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Speaker 1: what's going on in the economy and what are the

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Speaker 1: speed bumps short term and what are they long term?

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Speaker 1: So you've got all of those. Okay, are you so?

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Speaker 1: How bad is bad? And you'll get a dot today

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Speaker 1: on the c Fred on his Federal Reserve of the

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Speaker 1: United States and stress tests. But what the Fed did

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Speaker 1: was they went into hypersonic in terms of monetary policy.

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Speaker 1: That you've gone into hypersonic with regards the fiscal policy.

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Speaker 1: You'll hopefully get some kind of an infrastructure bill coming down,

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Speaker 1: even though it's politically a challenge to do it. But

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Speaker 1: bottom line is that the second quarter earnings coming out

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Speaker 1: in about two weeks, they're gonna start showing. If you

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Speaker 1: look through the reary mirror some uninspiring results. The question

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Speaker 1: is when the able just look through the UH windshield

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Speaker 1: and then the second pirate francy and is fairly uncomplicated.

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Speaker 1: When PPP drops out at the end of July, will

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Speaker 1: the US economy, which is a quarter of the world's economy,

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Speaker 1: will the Japanese economy well, the Chinese economy which is

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Speaker 1: seventeen percent of the world, and will European economies improved.

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Speaker 1: The I m F came out yesterday and painted a

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Speaker 1: very robust picture. For one, I'm kind of in part

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Speaker 1: in that camp, and I you know, the Chinese are

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Speaker 1: doing better at an accelerating rate. So the global economy

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Speaker 1: looks okay. US margins will be under pressure because of

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Speaker 1: higher cost UH tax rates are likely to be a

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Speaker 1: questioned in terms of the outlook. One corporate cash flows

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Speaker 1: are not as good as they think. The second part, however,

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Speaker 1: is companies are not buying stock back. Yesterday, for example,

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Speaker 1: TEAMUS issue twenty billion dollars T Mobile to buy UH

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Speaker 1: Softbanks ownership of their stock UH and so on. So

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Speaker 1: you're seeing corporate issuance is also putting a lit on

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Speaker 1: the market. And then the question is the multiple So

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Speaker 1: We're very optimistic over the next two or three years

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Speaker 1: about what we find. Marie, I guess you know, how

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Speaker 1: do you look at supply chains so you can find

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Speaker 1: a value company or value investing and then something happens

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Speaker 1: in trade wars are actually you know, countries are much

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Speaker 1: more inward looking and changes everything. Well, you know Francy

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Speaker 1: and that's a great idea. And you take a look

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Speaker 1: the old concept of the nineteen thirties when you looked

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Speaker 1: at companies with a microscope. You looked at companies selling

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Speaker 1: the low cash value. You know, we find them today

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Speaker 1: hard to believe. If there are companies out there selling

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00:25:05,160 --> 00:25:08,520
Speaker 1: the location, the problem is they're not large, Okay. But

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Speaker 1: then the question is what do you do with financial engineering?

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Speaker 1: You saw uh Adele look at potentially selling of vm

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00:25:16,240 --> 00:25:19,359
Speaker 1: ware or spending it or monetizing at Deutsche Telecom, which

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00:25:19,600 --> 00:25:21,720
Speaker 1: you look at what they're doing with T Mobile in

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Speaker 1: the United States and what soft bank did, and that's

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00:25:23,800 --> 00:25:27,199
Speaker 1: financial engineering. You see DuPont when international flavors and fragrances

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Speaker 1: ed Reeden that runs that as a financial engineer. Then

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Speaker 1: you see companies saying let's try to make corporate love,

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00:25:34,280 --> 00:25:37,600
Speaker 1: and that has been on a challenge short term and

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00:25:37,640 --> 00:25:41,239
Speaker 1: it's politically not appropriate because you everyone wants to not

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Speaker 1: lose their champion to h takeovers, and then what you're

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00:25:44,359 --> 00:25:47,080
Speaker 1: also seeing is a lot of fraud. Uh. You had

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Speaker 1: another one today and uh, I believe was Singapore. You

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00:25:51,280 --> 00:25:53,800
Speaker 1: had some other companies. It reminds me of World Calm

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Speaker 1: in the United States and Enron about eighteen years ago,

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Speaker 1: Mario gabell I gotta make a tuition payment to Fordham

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Speaker 1: and after that, I got to write a check to

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Speaker 1: Boston College. I gotta make some money fast. What's the

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00:26:08,160 --> 00:26:14,680
Speaker 1: best education? Education? Education? Start thinking about helping out inter

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00:26:14,800 --> 00:26:19,119
Speaker 1: city schools, helping out schools where we can bolve Okay,

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Speaker 1: the students through the system. Let's rip up the script

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Speaker 1: right now. We're Mario Bally. Well, let's rip up the

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Speaker 1: script right now. Mr James is talking about education matters.

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Speaker 1: What are the fat cats like you need to do

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00:26:34,200 --> 00:26:39,240
Speaker 1: to generate a jump start education experience in the poorer

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00:26:39,320 --> 00:26:42,640
Speaker 1: parts of each major city in this country. What's that

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00:26:43,200 --> 00:26:47,280
Speaker 1: plan about, Johnny? Start that education? Yeah, twenty five years

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00:26:47,280 --> 00:26:49,920
Speaker 1: ago we started giving money for the South Bronx Educational

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Speaker 1: Fund with the Mayas, the Supreme Court justice came out

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Speaker 1: of We also have been involved in in the city

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Speaker 1: schools through Christo Ray. We'd like to give back to

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Speaker 1: the community in that fashion. The problem we have today,

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Speaker 1: even though we were roting working with Zoom, we're working

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Speaker 1: with the team and those kinds of technologies. How do

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Speaker 1: I train individuals? How do I get them to learn about,

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Speaker 1: how to do research, how to do independent judgment unless

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Speaker 1: we can get them in one location. Sometimes are the

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00:27:20,680 --> 00:27:24,160
Speaker 1: challenges in terms of going out and recruiting individuals. We've

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Speaker 1: actually hired individuals from high school that we're in the

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00:27:27,080 --> 00:27:30,040
Speaker 1: in the city to work with us for a training program.

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Speaker 1: That's a challenge today in terms of you know, do

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Speaker 1: you put them on mass transit to get up to

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00:27:34,200 --> 00:27:37,480
Speaker 1: wherever we're located in Grantiture and so on. So those

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Speaker 1: are some of the challenges Tom And on the other side,

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Speaker 1: we have endowed scholarship of professorships at Taulane at the

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Speaker 1: University of Miami and so on, and we're looking at

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Speaker 1: other schools to do this and how why should we

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Speaker 1: not go to Temple in more House and try to

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Speaker 1: do something like that. We just got to figure that

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Speaker 1: out right. Marioga Belly thank you so much. Greatly appreciate that.

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Speaker 1: Mr Gabilly, of course alluding to our interview to Lebron James,

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Speaker 1: see them across the Bloomberg Network. Thanks for listening to

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00:28:04,040 --> 00:28:08,560
Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interviews on

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00:28:08,640 --> 00:28:14,480
Speaker 1: Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm

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00:28:14,520 --> 00:28:17,800
Speaker 1: on Twitter at Tom Keene before the podcast. You can

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Speaker 1: always catch us worldwide. I'm Bloomberg Radio