Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast.
Speaker 1: My name is Mike Reagan. I'm a senior editor at Bloomberg,
Speaker 1: and this week on the show, well, if you look
Speaker 1: at the leadership of the stock market in the second
Speaker 1: quarter so far, it's sort of a classic defensive leadership, healthcare, Utilities, Technology. Wait, technology,
Speaker 1: has the delta variant gotten so bad that tech is
Speaker 1: defensive again? Or were we crazy simply to ever think
Speaker 1: that tech would fall off the market's leaderboard for very long.
Speaker 1: To begin with, we'll get into it with a portfolio
Speaker 1: manager and tech analyst, but first I want to welcome
Speaker 1: back to the show a woman who there's a bit
Speaker 1: of mystery to her, but she's no stranger to our
Speaker 1: our listeners here on What Goes Up. She's coming back
Speaker 1: for another co hosting gig. Her name is Vildonna Hirich. Vildonna,
Speaker 1: welcome back. Thanks for having me. And since you are known,
Speaker 1: you don't get the Charlie Pellett introduction treatment. I'm sorry
Speaker 1: about that, but next time I'll definitely expect it. But
Speaker 1: I'm glad to have you on, Vildona because as a
Speaker 1: proud New Jersey native like yourself, it's a big week
Speaker 1: for New Jersey women in the Olympics. Are you as
Speaker 1: excited as I am about all these gold medals that
Speaker 1: that the great state of New Jersey is winning. I'm
Speaker 1: hugely excited. And my household was like cheering and so
Speaker 1: excited all week. And a thing move is from Trenton.
Speaker 1: I'm from Trenton, so I was really really excited to
Speaker 1: see her win, right, I don't forget Sidney McLaughlin right
Speaker 1: down the road for me. Yeah, very exciting. Vildona, if
Speaker 1: you were in the Olympics, what would you be taking
Speaker 1: gold medal in? Oh my gosh, that's I mean not
Speaker 1: I'm like not athletic at all. I can't even picture
Speaker 1: some of the things they do, Like hurdles. I can't
Speaker 1: even picture anybody ever looking at one and thinking I'm
Speaker 1: going to jump over that, let alone jump over it
Speaker 1: very very quickly. So I'm a big fan. I'm a
Speaker 1: big fan of the hurdles, and I'm a big fan
Speaker 1: of the Jamaican team, even though not as big of
Speaker 1: a fan as the New Jersey Condensed of the Olympic.
Speaker 1: But the Jamaican track team is so so athletic. Well, Donna,
Speaker 1: you would win gold in the Craziest Things of the Olympics,
Speaker 1: though I will say the craziest things. If there was
Speaker 1: an event for craziest things in the markets in a week,
Speaker 1: you would win the gold. And I will say, anyone
Speaker 1: else who out there has seen something crazy, by all means,
Speaker 1: give us a call on the Bloomberg Podcast hotline. I've
Speaker 1: been very negligent and not giving out the number for
Speaker 1: several episodes, but by all means, call us up at
Speaker 1: six four six three to four three four nine zero.
Speaker 1: Again that's six four or six three two four three
Speaker 1: four nine zero. Our lines are open. As they say
Speaker 1: on radio, I think I don't know something like that,
Speaker 1: but I leave us a voicemail on the hotline with
Speaker 1: the craziest thing you saw on markets and maybe we'll
Speaker 1: play it on the show. Well down, another proud New
Speaker 1: Jersey and I believe at least his firm is located
Speaker 1: in New Jersey is this week's guest. As I said,
Speaker 1: he's a portfolio manager at Harding Lovener. His name is
Speaker 1: Chris Mack. Chris, welcome to the show, Thanks Mike, and
Speaker 1: yes you're right New Jersey born and raised, so absolutely
Speaker 1: Jersey roots here and a leaf yet grad to boot
Speaker 1: which is kind of like almost New Jersey esque in
Speaker 1: Pennsylvania right over the river. Uh, kind of a rival
Speaker 1: to my Delaware Blue Hens. But I'm not gonna I'm
Speaker 1: not gonna get on your case about that. That's okay.
Speaker 1: And movie Hi is the only rivalry that counts. B
Speaker 1: That's that's true. I can't compete with you all in football,
Speaker 1: but we've we've gotten uh so yeah, I'll pretend it's
Speaker 1: a rivalry basketball. So it's a decent mashup sometimes. But
Speaker 1: but Chris, let's get into it. I know you have
Speaker 1: a pretty heavy tech focus at your firm and the
Speaker 1: funds you helped manage um. What is going on with
Speaker 1: tech being back in the leadership? I think the simple
Speaker 1: explanation narrative is that everyone's worried about the virus again.
Speaker 1: But as I said in the intro, I mean, did
Speaker 1: it ever make sense to sort of bet again this tech?
Speaker 1: I mean, is is it just a perennial leader that
Speaker 1: we should kind of always look to an absence of
Speaker 1: some other reason for say, the cyclical stop performed? How
Speaker 1: are you thinking about just the sector as a whole
Speaker 1: right now? Sure? Yeah, and you know, we could talk
Speaker 1: about maybe since the pandemic or even some of the
Speaker 1: trends that have been taking on a longer term perspective.
Speaker 1: You know, it's interesting about technology, and I think you
Speaker 1: mentioned in your comments earlier you start talking about cyclical
Speaker 1: or defensive, right, And if you look at the how
Speaker 1: the the the sector has evolved in terms of index representation,
Speaker 1: software has become a much much larger percentage of the
Speaker 1: index as opposed to go way back when it's much
Speaker 1: more hardware. Semiconductor is pretty strong, so you know, and
Speaker 1: even software as a whole has because their business model
Speaker 1: has shifted, right, a little bit more of recurring revenue,
Speaker 1: less counting on cyclical launches of versions of software, a
Speaker 1: little bit less CAPEX intensive, right, and so it has
Speaker 1: become a little bit more at the margin defense to
Speaker 1: your point, But when you look back over the past year,
Speaker 1: it's been different segments leading tech. There was a period
Speaker 1: of time when it was all about the semiconductor shortage
Speaker 1: and that cyclical rebound, and so semis were leading the
Speaker 1: way you go back last year it was more about
Speaker 1: software and digitalization of everything, um and then you know,
Speaker 1: particularly smaller cap software where maybe these companies are not
Speaker 1: yet profitable that they're growing really fast because they're acquiring
Speaker 1: users and can come more profitable more quickly. Um. So
Speaker 1: it's been different, different turns in leadership. One point, small
Speaker 1: caps semiconductors, now back to the big tech, which, to
Speaker 1: your points, a little bit more defensive. Chris, I remember
Speaker 1: last year when people positioning in tech companies actually was
Speaker 1: signaling that potentially we could be seeing a much longer
Speaker 1: time period of the recovery from the pandemic. But I
Speaker 1: also wanted to ask you if you could maybe tell
Speaker 1: us a bit more about your top holdings, because I
Speaker 1: think you guys owned some things, but then the same
Speaker 1: time you also own some regional banks, which, uh is
Speaker 1: an interesting play given what's going on with interest rates.
Speaker 1: So maybe you can tell us a bit more about
Speaker 1: how you guys are positioning. Sure, and it kind of
Speaker 1: gets too I guess you would say, the debts. Okay,
Speaker 1: what are we doing? Uh? You know, we we take
Speaker 1: a look at businesses. We look at combination of quality
Speaker 1: of the business, the profitability, growth, and then lastly valuation.
Speaker 1: So evaluation tends to dictate where we move. So tech
Speaker 1: has been a structural large weight for us health care
Speaker 1: as well. Um, we'll touch on that a little bit later,
Speaker 1: but I'll get to your point on banks. Uh, we
Speaker 1: are relativity index overweight on banks has become a larger
Speaker 1: position for US. But it's not been so much a
Speaker 1: cyclical trade, if you will. It's been much more about
Speaker 1: how are we finding under the radar growth financials that
Speaker 1: are able to grow irrespective of what interest rates are
Speaker 1: going to happen. Right. So example of that is a
Speaker 1: company like First Republic, which is a big holding for US.
Speaker 1: They're primarily growing a lot of relationship wise through refer
Speaker 1: calls um fee based income from from wealth management advice. Uh,
Speaker 1: So that is a little bit less dependent upon what's
Speaker 1: happening with interest rates. It will certainly help them too,
Speaker 1: but you know, if you look back, seventy percent of
Speaker 1: their growth has been coming from existing customers uh and
Speaker 1: just growing their wealth over time. So there's a certain
Speaker 1: element here that that's not relying on any particular cycle.
Speaker 1: Those are those are kind of financials that appeal to us.
Speaker 1: I was looking at those holdings to it's it's fascinating
Speaker 1: to me. So First Republic and SVB Financial what I
Speaker 1: find I guess it's not funny. But I kind of
Speaker 1: find it funny is that these are stocks that are
Speaker 1: in both value and growth indexes. So it's kind of
Speaker 1: like everyone's deciding to rotate from growth growth to value
Speaker 1: A why not by the ones that are that are
Speaker 1: in both indexes? But I mean, when you think about it,
Speaker 1: is that almost a viable strategy? What? As you said,
Speaker 1: what are the growth stocks that are that are priced
Speaker 1: like value stocks in a way. I mean, it seems
Speaker 1: you know, that's the conversation that doesn't get brought into
Speaker 1: the growth value roots rotation. It seems like, yeah, no,
Speaker 1: that's absolutely true. And I think that's so I think
Speaker 1: this a lot of times it's framed there's this false
Speaker 1: dichonomy is it growth or is it value? And there's
Speaker 1: there could be quite a little overlap. You look at
Speaker 1: historically companies like Apple that have been in both UH
Speaker 1: and you so so there's this this false conception and
Speaker 1: you have to pick more or the other. And so
Speaker 1: we're looking for growth, but just reasonably price growth, and
Speaker 1: sometimes that leads us into something that's more value esque.
Speaker 1: But then you know, even think take the case for
Speaker 1: value today, there it's it's about could value stock could
Speaker 1: the underlying businesses grow more quickly coming out of the
Speaker 1: pandemic then the growth businesses that are trading out of
Speaker 1: premium right. Um So even even the value case has
Speaker 1: got some element of growth to it. UM. So for us,
Speaker 1: the lines blur. It's really looking at what are the
Speaker 1: strongest position businesses within their industries, Uh, you know, where
Speaker 1: the where the structure is the strongest um and then
Speaker 1: less than looking at that valuation. So financials paired with
Speaker 1: technology makes a lot of sense to us. Um even
Speaker 1: if you know you could have a financial related technology
Speaker 1: company like in payments, like PayPal, which is one of
Speaker 1: our larger holdings. Um. You know, given digital payments and
Speaker 1: and so on, um And so combining that with healthcare
Speaker 1: for example, and a decent amount of industrials with some
Speaker 1: cyclical exposure. That's the way we're navigating this current environment.
Speaker 1: Because we can't predict what's happening with the delta variant.
Speaker 1: We don't know what's going to happen with interest rates.
Speaker 1: I could certainly give you my opinion, but I could
Speaker 1: wouldn't put a whole lot of weight in that opinion.
Speaker 1: So how do we manage those uncertainties is through a
Speaker 1: globally diversified portfolio. I'm glad you brought up the delta
Speaker 1: variant again because I wanted to ask you how you
Speaker 1: and your team are thinking about what's been going on
Speaker 1: and in terms of what the bond market is signaling.
Speaker 1: That's it signal that potentially we could have a slower
Speaker 1: growth environment or are some of the signals from the
Speaker 1: bond market a bit more technical in nature. How are
Speaker 1: you thinking about it? And how much of a threat
Speaker 1: is the delta variant to growth and growth propects us?
Speaker 1: Certainly a threat, and I think when it goes back
Speaker 1: to thinking about the pandemic recovery and vaccinations globally and
Speaker 1: just this notion that okay, certainly not every country is
Speaker 1: able to get either access to the vaccinations, are able
Speaker 1: to distribute them broadly enough that we have this uneven
Speaker 1: recovery if it's all about just the pandemic, right, And
Speaker 1: so that's already been coming into play. Now the delta
Speaker 1: variant just brings it home to roost, and now it
Speaker 1: comes home here in the US. That is threatening because
Speaker 1: vaccinations didn't quite get to the level that we had
Speaker 1: all been hoping for, and so now it just makes
Speaker 1: everyone tap the brakes again. So if you think about
Speaker 1: the whole case for you know, the higher interest rates,
Speaker 1: it gets back to this, what's going to happen with inflation? Right?
Speaker 1: And to what extent are Yeah, we have this stronger
Speaker 1: demand coming out of the pandemic because fortunately it wasn't
Speaker 1: as damaging as it could have been. You also had
Speaker 1: some flancial you know, economic incentive packages that have helped
Speaker 1: out there. Uh ease the blow if you will, um,
Speaker 1: but you know, trying to get the supply up and running.
Speaker 1: We see it in a semi connector sector for example,
Speaker 1: right or semi connector industry or building look at the
Speaker 1: price of you know, of building materials and what's happened.
Speaker 1: So we had this period we're up until May, everyone
Speaker 1: was anticipating inflation, and then that great CPI number comes
Speaker 1: in and you could see some of these you know,
Speaker 1: timber prices and everything just roll over right, And so
Speaker 1: I think everything would point to the FED being on
Speaker 1: the right path and saying that it is it will
Speaker 1: be transient. If you ask me, um, question is how
Speaker 1: long is transient? Because it's certainly these things are bottled
Speaker 1: up and it's some haven't come down the Pike yet right,
Speaker 1: it's gonna take some time for the semi connector shortage
Speaker 1: to ease. You know that there's gonna be more demand
Speaker 1: for sem reason things like autos and you know, tried
Speaker 1: buying an auto, trying running a car right now, it's impossible. Um,
Speaker 1: And so that's going to take some time for that
Speaker 1: manufacturing supply chain to to to respond. And then if anything,
Speaker 1: you go into next year, hey, maybe we are going
Speaker 1: to swing on the other side over capacity and back
Speaker 1: into the story of deflation and everything else that has
Speaker 1: been such a technology lead thing through digitalization. So a
Speaker 1: bit you know going on there. But um, to your point, Yeah,
Speaker 1: if you look at the tenure yield on treasury that's
Speaker 1: rolled up, you wouldn't have thought any of this has happened,
Speaker 1: right back to the old big tech deflation type trade. Uh.
Speaker 1: And you know, so there's no way of knowing exactly
Speaker 1: what's gonna happen in the future. I would argue that
Speaker 1: the longer term past is much more likely than the
Speaker 1: more recent past that seems to be more temporary nature
Speaker 1: due to pandemic related effects. Every time I hear the
Speaker 1: word transy and I think of those old hoboes that
Speaker 1: used to wander around with like the stick and the
Speaker 1: and the bag on the end of the stick and
Speaker 1: ride in the rails. Anyway, thats just me that that
Speaker 1: that's neither that's neither here nor there. But Chris I
Speaker 1: said something early on that I think is so important.
Speaker 1: You know that there's so many different subsectors within technology UM.
Speaker 1: You know, obviously they've tried to sort of break out,
Speaker 1: you know, the the Amazons and the facebooks and the
Speaker 1: Googles out of the main tech index and put them
Speaker 1: in discretionary or communications. I think there's an argument to
Speaker 1: be made that maybe the index providers could do that again,
Speaker 1: maybe a couple of times, and break up hardware and whatever.
Speaker 1: But specifically thinking about chip stocks, you know, the fascinating
Speaker 1: thing to me is this shortage of chips this year
Speaker 1: exposed the reality that basically every company, what company is
Speaker 1: not at at its core somehow exposed the tech these days.
Speaker 1: I mean, if you can't, if you can't build up
Speaker 1: an automobile without the supply of chips, uh, you know,
Speaker 1: it's just remarkable, and on up and down the line.
Speaker 1: Financial companies UM are in large sense mostly technology companies.
Speaker 1: These days, but specifically with chips. It's been such a
Speaker 1: shocking year for the chip sector with these shortages and
Speaker 1: the ripple effects caused by them. In your mind, does
Speaker 1: it seem like like a sort of tipping point type
Speaker 1: of event that will change the industry forever? In other words,
Speaker 1: will we sort of get away from that just in
Speaker 1: time type of manufacturing uh, that so many companies had
Speaker 1: relied on. Uh? Can we actually expect some foundries in
Speaker 1: the US at some point? I mean, and more companies
Speaker 1: you know talking about you know, fabricating their own ships
Speaker 1: or is that is that kind of a pipe dream?
Speaker 1: I mean, it's so expensive to to to get into
Speaker 1: that game. How do you see that all playing out?
Speaker 1: Sort of as a long term effect of everything we've
Speaker 1: seen in the past year. Yeah, on a longer term view, Um,
Speaker 1: you know, I think over time there is that potential
Speaker 1: that you do have a broader manufacturing footprint as it
Speaker 1: becomes more strategic. But to your point, it's easier said
Speaker 1: than done, right, It's very it's only becoming more and
Speaker 1: more and more expensive to manufacturers smaller and smaller chips, uh,
Speaker 1: and certain transistors, and so if you look at how
Speaker 1: someone like Taiwan Semiconductor. It's also holding of ours has
Speaker 1: become so dominant. Uh, it's in part because of these
Speaker 1: economies of scale that a crew and the expertise for
Speaker 1: them operating this foundry model, which if you go way
Speaker 1: back when companies used to produce their own chips here
Speaker 1: in the US for example, UH, and then they decided
Speaker 1: to outsource them. Why they outsource them because of the
Speaker 1: volatility in cycles made it very costly endeavor for them
Speaker 1: to predict. So you you would bear the brunt of
Speaker 1: all this capital expenditure and then a few time the
Speaker 1: cycle wrong, you take the financial hit. So working with
Speaker 1: someone like a Time one semiconductor outsourcing that manufacturing, that
Speaker 1: company is able to now diversify across all the different
Speaker 1: end markets and their customers that they have, and they
Speaker 1: could soften the blow and run much more profitable model
Speaker 1: over time that allows them to continue investing in cathotics
Speaker 1: and so on and so forth. Um, So you know,
Speaker 1: I think you're they're going to try to there's certainly
Speaker 1: more government incentives to try to do for them to
Speaker 1: manufacture elsewhere, whether it's in the US. Europe is also
Speaker 1: talking the same type of thing. What does it change
Speaker 1: longer term. I'm not sure it changes too much. Um.
Speaker 1: I think at the end of the day comes back
Speaker 1: to industry structure. Yeah, it comes back to you know,
Speaker 1: who are the who. I think you're seeing more customization
Speaker 1: and chips for things like artificial intelligence, Google design their
Speaker 1: own ships, Amazon, Apple, and that only fragments the end market,
Speaker 1: which gives more strength to the end manufacturer at the
Speaker 1: end of the day. Yeah, Chris, I wanted to ask
Speaker 1: you about small caps. I know one of the funds
Speaker 1: you helped manage is A is a small cap fund,
Speaker 1: and we talk about the rugs sort of getting pulled
Speaker 1: out of that as an asset class. Um. You know,
Speaker 1: it was supposed to be one of the big beneficiaries
Speaker 1: of the reopening, the reflation trade, and that's kind of uh,
Speaker 1: you know, the that's kind of turned around. I mean,
Speaker 1: I guess, um, when you're an active manager, it's arguably
Speaker 1: easier to to navigate than when you know you're buying
Speaker 1: just the two thousand index, the Russell two thousand index. Um.
Speaker 1: But what is your thinking about small caps as an
Speaker 1: asset class right now? I mean where how are you
Speaker 1: sort of sifting through everything and finding finding the best,
Speaker 1: most promising companies given this turnaround we've seen in the
Speaker 1: the index level small cap situation. Yeah, so if anything, so, yeah,
Speaker 1: it's an interesting environment for us as being more growth
Speaker 1: for focused Uh, the headwind that the effects value simpall
Speaker 1: cap value in particular was outperforming growth by a wide
Speaker 1: margin um and so we benefited from the growth tail
Speaker 1: end last year and then we're suffering a little bit
Speaker 1: from it this year. So the fact you know, seeing
Speaker 1: somewhere all over, we're not complaining too much about that,
Speaker 1: but as that's happened, it's given us opportunities to look at,
Speaker 1: you know, smaller growth companies that have been left behind.
Speaker 1: Like one of the areas that's kind of interesting is
Speaker 1: us specialty retail. There's a lot of talk that you know,
Speaker 1: it's just an Amazon world. It's all e commerce, right,
Speaker 1: And there's some small companies or smaller companies that are
Speaker 1: interesting that we own in the in the all cap fund,
Speaker 1: like an Etsy for example, that used to be a
Speaker 1: small cap and now it's no longer. But there are
Speaker 1: brick and mortar retailers that are doing okay in this environment.
Speaker 1: They're managing that, they're growing their stores, they are taking
Speaker 1: advantage of the disruption from the pandemic and the weak
Speaker 1: weaker financial strength of competitors to acquire more land and
Speaker 1: real estate and build and so some examples companies that
Speaker 1: are doing that. Company Ali's allis discount retail. They're growing
Speaker 1: their stores year every year. UM. They've actually been able
Speaker 1: to They have this discount model where you know, people
Speaker 1: are always still there's a really there's a reason to
Speaker 1: visit the store every day. They have a loyalty system UM,
Speaker 1: and so they've been able to grow their customers in
Speaker 1: part because through the pandemic they've were able to sell
Speaker 1: more UM essential items, cleaning products and so on, but
Speaker 1: they offer other things and so they have a good
Speaker 1: buying that we're kind of like a small t J
Speaker 1: mat Max if you will. UM. Another one is five below,
Speaker 1: this little niche targeting that teenage tween type segment with
Speaker 1: quirky different things at a reason you know, but at
Speaker 1: they're occupying this niche that is something that people go
Speaker 1: for that experience and it's not an Amazon type world.
Speaker 1: It's a different type of buyer and people look forward
Speaker 1: to going to that store. And they've been able to
Speaker 1: survive and then thrive through it too, So you know
Speaker 1: the answer to your question is just being very careful
Speaker 1: looking for insisting very strongly on that financial strength because
Speaker 1: we don't know when there's going to be cyclical changes,
Speaker 1: but we want to make sure, particularly as a smaller company,
Speaker 1: you've got that margin of safety that you know they're
Speaker 1: going to come out from it stronger and take advantage.
Speaker 1: And some of those retailers. I think that's an interesting
Speaker 1: area that you know, in the world everyone just think
Speaker 1: is about bigger and better in e commerce, there's some
Speaker 1: companies that are growing with financial strength in retail. Yeah.
Speaker 1: As a father of three daughters, well done, I'm very
Speaker 1: familiar with five below. I uh, A lot of disposable
Speaker 1: income gets dumped into that place. It's remarkable though, that
Speaker 1: is talk about it. Impulse purchase Meca. You know, I
Speaker 1: found myself buying, you know, going in there, taking a
Speaker 1: kid there to get some art supplies or whatever, and
Speaker 1: and finding myself some impulse fights some stuff that. Actually,
Speaker 1: that's how I feel about t J Max, which you
Speaker 1: just mentioned, and one of their other brands is Marshals,
Speaker 1: which I feel like I could go there every day
Speaker 1: and just buy like millions of things I have absolutely
Speaker 1: no use for I'm one of those I'm one of
Speaker 1: those consumers. I could tell you. I mean, you may
Speaker 1: attest when you know things start to reopen. Last year,
Speaker 1: there were lines out the door and around the corner
Speaker 1: to get back into t J Max. And that just
Speaker 1: we have this debate all the time about the pandemic
Speaker 1: and where the lasting changes. Where are the new habits
Speaker 1: that are going to be formed, and where are the
Speaker 1: old ones? And it just goes to show you that
Speaker 1: even though a lot of us are spending more on
Speaker 1: e commerce, there's certain experiences that we want to have
Speaker 1: in person that just come back, whether it's travel or
Speaker 1: you know, or or or going to a t J
Speaker 1: Max for example. It's it's a good point about Etsy
Speaker 1: graduating out of the small cap space. It must be
Speaker 1: a little frustrating when you when you run a small
Speaker 1: cap fund too, to pick a great stock and then
Speaker 1: watch it sort of graduate out of your out of
Speaker 1: your benchmark, Like I did everything right? Stay, why can't
Speaker 1: I keep this stock in the fun But I guess
Speaker 1: that's how it works. Yeah, we have we try to
Speaker 1: take into that into account. We we do give a
Speaker 1: little bit a leeway so we could sell it intelligently,
Speaker 1: and sometimes it helps us that discipline for something that
Speaker 1: is overvalued too. So you know, we just have to
Speaker 1: keep keep at it, and there's longer term opportunities, and
Speaker 1: that smaller cap UH focus gives that opportunity for the
Speaker 1: customers that are interested in that to diversify their portfolios.
Speaker 1: So it's not just all things right, it's a way
Speaker 1: to differentiate yourself and get diverse returns. I feel like
Speaker 1: the through line here really is consumer behavior and what
Speaker 1: the consumers thinking and doing. And one of the things
Speaker 1: that I had noticed this week is a lot of
Speaker 1: the research notes that that I was reading more mentioning
Speaker 1: mobility data, and people are still going out to restaurants.
Speaker 1: There's still foot traffic, you know, any of these measurements
Speaker 1: Apple mobility data, people out on the road, and it's
Speaker 1: actually holding up really well. And I'm wondering if you
Speaker 1: and Chris, you and your team also look at some
Speaker 1: of these so called real time data to UH to
Speaker 1: inform your strategy. Yeah, because you know, it's information that's
Speaker 1: out there, we look at it. UM. I think the
Speaker 1: big thing here is I don't think we necessarily have
Speaker 1: any particular edge from looking at that that's a that's
Speaker 1: that's data that's out there. I think it's much more
Speaker 1: about interpretation and what we're going to do. So it's
Speaker 1: much more about understanding. To this extent, it can inform
Speaker 1: us of longer term trends or longer term debates that
Speaker 1: we could have. Okay, the mobility data says this, is
Speaker 1: there anything here that that that pretends to something that
Speaker 1: could be extrapolated in a longer term or is this
Speaker 1: just a short term deal? Right? And so to extend
Speaker 1: it could help you time things a little bit, sure,
Speaker 1: but on a longer term three to five year view,
Speaker 1: we're not doing too much of that. If the T
Speaker 1: s A numbers go down, we're not, you know, going
Speaker 1: to be dumping one way or another. I think it's
Speaker 1: much more about, Okay, is there value in this sector?
Speaker 1: Is there value in this industry? Okay? If there's a
Speaker 1: short term transient effect, okay, that's an opportunity for us
Speaker 1: to add on a longer term view, provide the company's
Speaker 1: got financial strength, good management, longer term growth opportunities. So yeah,
Speaker 1: we look at it, but it's not it doesn't inform
Speaker 1: what we do. Stand clear of the craziest things we
Speaker 1: saw in markets this week. All right, guys, you know
Speaker 1: you both represented New Jersey very well this week. We
Speaker 1: didn't even talk about what everyone's favorite boardwalk is yet,
Speaker 1: but I think we'll have to save that for the
Speaker 1: next time because we have to talk about the crazy
Speaker 1: things Bill Donna. As you know well, Donna is our
Speaker 1: chief crazy things correspondent, Chris Um. But I kind of
Speaker 1: we'll talk after the show about the best boardwalks I've got,
Speaker 1: I've got, I've got some serious thought on that. I
Speaker 1: don't want to tell you my favorite because the beach
Speaker 1: we go to is actually really quiet and not that
Speaker 1: many people go to it, and I don't want to
Speaker 1: ruin that you're hoarding it off yourself. That's uh, the
Speaker 1: beach scarcity issue is is a big deal in New Jersey.
Speaker 1: All Right. I can respect that, but you do have
Speaker 1: to share your crazy thing, Bill don and I hyped
Speaker 1: you up, so I want you to go first. What's
Speaker 1: the craziest thing you saw in markets this week? Well,
Speaker 1: I think a lot of listeners might remember that the
Speaker 1: last time I was on the pod, we talked about
Speaker 1: something that was happening in space in terms of astronauts
Speaker 1: doing laundry. In space and so I'm revisiting that same
Speaker 1: theme this week, and Bloomberg had a story that caught
Speaker 1: my eye. It's a company called I Space. It's a
Speaker 1: Tokyo based space startup, and it's planning its first trip
Speaker 1: to the Moon next year. It raised forty six million
Speaker 1: dollars from Japanese investors to help bancrol those missions. So
Speaker 1: I feel like there's a lot happening with with space
Speaker 1: and all of the billionaires visiting space, and uh, that
Speaker 1: one was interesting to me. Are they going to put
Speaker 1: an actual person on the Moon? Are they just going
Speaker 1: to drop a little robot or something there? Oh, I'm
Speaker 1: not sure. Actually that's a good question. Probably robot. I
Speaker 1: think we would hear about it as a person. Look,
Speaker 1: I'm not one of those people that says the moon
Speaker 1: landing was staged, But I'm also like, how come no
Speaker 1: one else has landed on the moon? Human? What's going on?
Speaker 1: You know you're not one of those people, but yet
Speaker 1: you are. Yah? Yeah, I guess I guess that's my
Speaker 1: tough Maybe bezo us for uh where Richard Brents and
Speaker 1: we'll be up there these as will drop like an
Speaker 1: Amazon flag on the moon something. But all right, Chris,
Speaker 1: that one's pretty good, But can you beat a moon landing?
Speaker 1: As I don't know. I feel like this whole year
Speaker 1: is just full of crazy things, right, whether it's n
Speaker 1: f T S and crypto and everything else or set
Speaker 1: you know, Bezos going to the moon or not the
Speaker 1: moon going into our space on like this odd shaped
Speaker 1: rocket that you know, is there's so much that's like fiction,
Speaker 1: that's that's reality, that's true. Um so you know, or
Speaker 1: like the spot and the special for Atlas special purpose
Speaker 1: Entities and everything that's going on. But I'll go it's
Speaker 1: something that's a little bit you know, maybe less crazy
Speaker 1: and just more interesting to me, which is just I
Speaker 1: think you alluded to at the beginning of the of
Speaker 1: the show, which is just this the healthcare tech thing,
Speaker 1: which is just the fact that, um, you know, I
Speaker 1: think everyone thinks about them together in this environment. And
Speaker 1: I would notice that if you go past the past
Speaker 1: earning season, there's been a little bit of decoupling between
Speaker 1: tech reaction and health care reaction. And maybe that's the
Speaker 1: market trying to tell us that the pandemic this is
Speaker 1: the crazy thing. You know, maybe we should be all
Speaker 1: worried that the pandemic is going to get a lot
Speaker 1: worse again, and I think you certainly put that through there.
Speaker 1: And so it's interesting how the market tries to anticipate
Speaker 1: these things and you go back and you say, yeah,
Speaker 1: they really got it. And so now this makes me
Speaker 1: nervous of it for the future just in general. But
Speaker 1: it seems like there's no appetite for lockdowns, which is
Speaker 1: why the tech companies aren't doing better. It's much more
Speaker 1: about more tests and innovation there. So yeah, no, that
Speaker 1: makes a lot of sense to read it that way.
Speaker 1: You know, we're not gonna be stuck at home, but
Speaker 1: we're still going to be dealing with this thing for
Speaker 1: for a long time. That's pretty good. Um and and
Speaker 1: sad and scary. That might be the scariest thing of
Speaker 1: the week as well. Well done, Chris, crazy and scared,
Speaker 1: crazy and scary is dangerous. Smikes. Sorry, I got I
Speaker 1: got a good one for us to end on. Um
Speaker 1: and it's from the the Pressure Precious Metals Asset class
Speaker 1: And uh, well, Donna, you know there's a joke that
Speaker 1: if someone if you're walking in New York and someone
Speaker 1: comes up to you and says, hey, do you know
Speaker 1: how I can get to Carnegie Hall. You know what
Speaker 1: you're supposed to say, no practice, practice, practice, Do you
Speaker 1: get it? Yeah? Yeah, I can tell you're dying with
Speaker 1: laughter on that one. It's an old joke and you
Speaker 1: got to know these jokes though, all right, so it's
Speaker 1: so hilarious. But I would ask, how do you get
Speaker 1: a gold medal in the Olympics? You take your phone
Speaker 1: apart and you melt all the little pieceles. That's pretty good.
Speaker 1: That is how they did it actually, Or you could
Speaker 1: say practice, practice practice again. Another way you can get one.
Speaker 1: Just buy one from an auction house, which I think
Speaker 1: is almost a bigger flex like you, you know, you
Speaker 1: wear that thing to work, you know, And people would
Speaker 1: be like, well, Donna, did you did you win a
Speaker 1: gold medal in the Olympics, and be like, no, I
Speaker 1: bought one. I'm not. I'm that type of players. So
Speaker 1: there's an auction in house that has been selling some
Speaker 1: Olympic medals and Chris, this might catch you as a surprise,
Speaker 1: but will Don will know it's now time to play
Speaker 1: prices right with the craziest things. And this is courtesy
Speaker 1: of the New York Times. Um they are writing about
Speaker 1: the aftermarket for Olympic medals. Some of them are pretty cheap,
Speaker 1: I gotta say, cheaper than you would expect. But I'm
Speaker 1: want to give you one that is sort of the
Speaker 1: the gold medal of Olympic aftermarket medals, if you will.
Speaker 1: It's actually a silver medal um from the first modern
Speaker 1: Olympic Games in Athens. In here's what you need to
Speaker 1: know then. Back then, first place was a silver medal.
Speaker 1: There was no gold medal yet if you wont you
Speaker 1: got a silver. So this is first place silver medal
Speaker 1: eight Athens Olympics. So two part question for each of you, will, Donna,
Speaker 1: what's your bid for that medal? And two? Would you
Speaker 1: wear it to work? I would not wear to work,
Speaker 1: but I'm going to guess thirty six thousand dollars thirty
Speaker 1: six thousand dollars. Sorry, I'm keeping a poker face. Chris,
Speaker 1: what's your bid for an eighteen ninety six silver first
Speaker 1: place medal Athens Olympics, very first Olympics. I'm not sure.
Speaker 1: Let me figure out what what event it was. I'm
Speaker 1: not even sure what event it was, but I guess
Speaker 1: it doesn't matter. Yeah, I think she outbids me. I
Speaker 1: was gonna I mean I would bid a lot, maybe
Speaker 1: twenty thousand, but yeah, she outbids me, so I lose
Speaker 1: that auction. You're you're taking the under taking. Yeah, I'm
Speaker 1: taking a little bit under But maybe I don't know.
Speaker 1: I think it depends at the size of this medal, right,
Speaker 1: I can't think it was too gigantic, although there probably
Speaker 1: was more silver content in today right into today. Stay,
Speaker 1: today's medals barely have anything in it. Yeah, you're probably
Speaker 1: some value to it. This is a true value investor here.
Speaker 1: He wants to know the meltdown value of the Olympic
Speaker 1: medal from no collectors mark up. For Chris, it's about
Speaker 1: the bragging though. I do you have to have that collection?
Speaker 1: I don't know, but I can't think it's gigantic though. Well,
Speaker 1: and the one outside. It would be hard to trick
Speaker 1: anyone into believing that you won a medal in the Olympics.
Speaker 1: I mean maybe I might have a better Yeah that
Speaker 1: thanks that. I know. I set you up for that one.
Speaker 1: Thank you anyway. Boston based auction house are our auctions
Speaker 1: one hundred and eighty thousand dollars one hundred and eleven
Speaker 1: one eighty thousand, one hundred eleven dollars. Pretty good. Yeah,
Speaker 1: I get the medal. Well, Mike, you didn't you didn't
Speaker 1: tell us which Olympic event you'd be participating in. Oh, hoops,
Speaker 1: come on, okay, hoops. Not that I would ever the
Speaker 1: only sport, the only Olympic type of sport I really play,
Speaker 1: although mountain bikings in now, I might be able to, uh,
Speaker 1: I might be able to pry have a better shot
Speaker 1: a qualifying for that than hoops at at this age
Speaker 1: or at any age. But you're you're a hundred and
Speaker 1: thirty year old age. Yes, exactly exactly, but some bargains
Speaker 1: on some other medals. According to the Times, silver medal
Speaker 1: and shooting from the nineteen hundred Olympics in Paris only
Speaker 1: twelve bucks and uh nine winner games in Italy. Uh so,
Speaker 1: but that I think it's the it's the value of
Speaker 1: that first Olympics that that makes it. And they don't
Speaker 1: talk about the ancient Olympics. I don't know if there's
Speaker 1: any medals available for that that that would be the
Speaker 1: big flex. I guess all right, pull down. Well, I
Speaker 1: can't believe you wouldn't wear it's work though I would
Speaker 1: totally wear that thing everywhere. I went, Really, I don't
Speaker 1: see a reason to wear it though it's for the flex. Yeah,
Speaker 1: I guess it depends on what state it's in, and
Speaker 1: like Chris said, how large it is. Yeah, Chris would
Speaker 1: wear if Laffiott ever wins a football championship, will where
Speaker 1: he'll wear that around? I think? Yeah? No, I think
Speaker 1: I probably least would wear or something like this for
Speaker 1: a day. Yeah, just just for the effect, just for fun. Yeah,
Speaker 1: you gotta show up to work for there, at least
Speaker 1: on a zoom call. You know. I'd be wearing it
Speaker 1: on a zoom call for sure. Oh what's that? Oh
Speaker 1: that's my Olympic first place silver medal from anyway. Anyway,
Speaker 1: great stuff this week, guys. I think that's all the
Speaker 1: time we have really appreciated Chris mac Wildonna high Rich.
Speaker 1: I hope we can do it again someday. Likewise, add fine,
Speaker 1: thank you very much. What goes up, We'll be back
Speaker 1: next week. That's so then you can find us on
Speaker 1: the Bloomberg Terminal website and app or wherever you get
Speaker 1: your podcasts. We'd love it if he took the time
Speaker 1: to rate and review the show on Apple Podcasts so
Speaker 1: more listeners can find us. And you can find us
Speaker 1: on Twitter, follow me at Reaganonymous. Bildona high Rich is
Speaker 1: at Bildona high Rich. You can also follow Bloomberg podcasts
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Speaker 1: What Goes Up is produced by Toe for Foreheads. The
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Speaker 1: you next time.