Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.
Speaker 1: Along with my co host Lisa Abramowitz. Each day we
Speaker 1: bring you the most important, noteworthy, and useful interviews for
Speaker 1: you and your money, whether you're at the grocery store
Speaker 1: or the trading floor. Find the Bloomberg p m L
Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Now
Speaker 1: let's turn our attention to Jason Shanker. He is the
Speaker 1: president and the founder of Prestige Economics. He's also a
Speaker 1: Bloomberg prophet. He's based in Austin, Texas, currently at the
Speaker 1: Atlanta FEDS Financial Markets Conference in Emilia Island, and you
Speaker 1: can follow Jason on Twitter at Prestige e con. Uh. Jason,
Speaker 1: where you caught on the back foot by the rise
Speaker 1: in oil prices? No, we've had an expectation that we
Speaker 1: would see oil prices rise through the driving season. You know,
Speaker 1: the unemployment rate we saw it in Friday's report, you know,
Speaker 1: the lowest we've seen since December two thousand. Strong labor
Speaker 1: market means we're going to see very strong driving demand
Speaker 1: that summer. Uh. The OPEC risks on top the Iranian
Speaker 1: risks of sanctions on top. That just adds fuel to
Speaker 1: a fire that we already expected would be burning. Because
Speaker 1: the U s summer driving season is one of the
Speaker 1: biggest factors for oil prices during the year seasonally. So
Speaker 1: I want to get a sense of how much is
Speaker 1: being baked in about the US withdrawing from the Iran packed.
Speaker 1: If the US does go ahead and withdraw from the
Speaker 1: nuclear agreement, do you think the oil prices could rise
Speaker 1: much more from here? Well, I think they could. I
Speaker 1: don't think it's priced in at all. Um. You know,
Speaker 1: the technicals and fundamentals that we've seen in the market.
Speaker 1: You know, we're but we watched the thirty day on
Speaker 1: the hundred day moving averages. We've been above those now
Speaker 1: for a little bit. Um. We're above other critical supports,
Speaker 1: these facts as were already supportive of prices. And you know,
Speaker 1: while we're seeing a little bit more upside today, and
Speaker 1: I think we're going to see quite a bit more
Speaker 1: moving forward. If we pull out of those that agreement
Speaker 1: with a run, you know, we could see five dollars,
Speaker 1: ten dollars, You could see a spike even higher than that.
Speaker 1: I don't think it'd be sustained. And I think once
Speaker 1: we get past the driving season, I think there's downside
Speaker 1: risks from higher interest rates, and if the trade UH
Speaker 1: factors remain in play, then there's still going to be
Speaker 1: downstairs there. But we see the sort of bifurcated dynamic
Speaker 1: of upside through the driving season. This produces more upside,
Speaker 1: but then in the fall more downside. Jason, how much
Speaker 1: is this increase in prices really tied to, let's say,
Speaker 1: the back and forth between the strength of the US dollar.
Speaker 1: Not much. I think that really if we look, the
Speaker 1: biggest fundamental driver for oil, like all commodities, is that
Speaker 1: they're bought and not sold. The global economy has been
Speaker 1: doing quite well, and despite what we've seen in industrial
Speaker 1: medals for those have been a weaker again, those seasonal
Speaker 1: dynamics for oil demand. Right now in the spring where
Speaker 1: we're trading driving season contracts with binaries are ramping up production.
Speaker 1: This is a time when you see oil prices rise
Speaker 1: typically anyway, and now you've got a bit of a
Speaker 1: pressure cooker because these geopolitical risks. So I'm trying to
Speaker 1: figure out right now. It seems like last year people
Speaker 1: were saying oil is never gonna get above fifty dollars
Speaker 1: in barrel, perhaps get to sixty dollars of barrel. Now
Speaker 1: we're at seventy dollars of barrel. How much of this
Speaker 1: is being driven by the fact that Saudi Arabia really
Speaker 1: wants to hit that eighty dollars of barrel mark for
Speaker 1: the Saudi aramco I p O possibly to happen next year. Yeah,
Speaker 1: I've seen as eighty dollars thrown around. Whether that's there
Speaker 1: you know, their actual explicit target or not that their
Speaker 1: explicit target was to push oil inventories to a five
Speaker 1: year towards the five year average range. That's been the
Speaker 1: goal of Opecanano PECK members. It's been clear. Something we've
Speaker 1: talked to our clients about is that Saudi Arabia is
Speaker 1: priori ties in balance sheet over income statement. Right, That's
Speaker 1: what they're doing, will sacrifice selling your fewer barrels now
Speaker 1: in order to increase the valuation of our business. That's
Speaker 1: very clear. Um upside risk. We've been assessing the price
Speaker 1: risk this summer. We would see in the sixty dollar
Speaker 1: range with potential spikes to eighty. That's something we were
Speaker 1: talking to clients about in December as a risk for
Speaker 1: the summer, so that definitely becomes a more material risk
Speaker 1: now with the geo political situation. That doesn't mean it
Speaker 1: will be sustained because the trade risks, global growth and
Speaker 1: interest rates will determine what happens once we get past
Speaker 1: this summer. But for now, best job market. You know
Speaker 1: in eighteen years you're gonna see a lot of people
Speaker 1: on the road and families driving down from Chicago to
Speaker 1: Disneyland or the Disney World. Are the kinds of things
Speaker 1: that you see driving whale prices in the summer and
Speaker 1: driving a lot of other bills too. If you're going
Speaker 1: to Disney World. Just saying I want to get I
Speaker 1: want to I want to get a sense of what
Speaker 1: you think of shale drillers and and the prospect of
Speaker 1: them really ramping up production in response to the higher price,
Speaker 1: meaning that they're basically going to offset some of the
Speaker 1: demand with just more output. What do you think is
Speaker 1: of that? Well, I think there's a couple of things
Speaker 1: that you know you still have. On the one hand,
Speaker 1: these folks they're looking at the curve, they know the
Speaker 1: seasonalities of pricing, and if they're making the drilling decisions,
Speaker 1: you know they're still going to have to understand and
Speaker 1: they deal with those dynamics. So I think that you're
Speaker 1: going to see more production, but you know, one bit
Speaker 1: and twice shy, I think you're gonna see um still
Speaker 1: some of this holding back. And I'd say that for
Speaker 1: the funds that are out there to discussion, there's a
Speaker 1: lot of money on the sidelines. There have been very
Speaker 1: large funds that have been raised in the last couple
Speaker 1: of years. I'm in Texas. I've been talking to a
Speaker 1: lot of these folks for the last year or so,
Speaker 1: and they they're still looking for distressed assets. I gotta
Speaker 1: tell you, seventy bucks of barrel looking for sweetheart deals
Speaker 1: with the stressed assets. If that's your mandate, that's going
Speaker 1: to be a pretty tough, tough fine for you. Jason,
Speaker 1: just quickly, what's the best way for investors to profit
Speaker 1: from this rise in oil prices? Well, you know, I
Speaker 1: think if folks want exposure, then they need to be
Speaker 1: looking at companies that are producing oil. Um. They also
Speaker 1: may want to be thinking about the the underlying commodity
Speaker 1: as well that the price is likely to rise. Those
Speaker 1: are probably the areas where you're going to see people plays.
Speaker 1: I want to thanks very much for joining us at
Speaker 1: Jason Schenker is the president and the founder of Prestige Economics.
Speaker 1: He's also a Bloomberg profit and you can follow Adjason
Speaker 1: on Twitter at the Prestige e con. We want to
Speaker 1: visit now in the world of real estate with Ken Wisenberg.
Speaker 1: He is a partner in charge of the real estate
Speaker 1: services group for Eisner Amper and he joins us here
Speaker 1: in our eleven three oh studious Ken, thanks very much
Speaker 1: for being with us. The news today, of course, is
Speaker 1: black Stone agreeing to buy Grammarcy Property Trust. The price
Speaker 1: tag is seven point six billion dollars. It's a fift
Speaker 1: premium over the closing price on Friday. Why do you
Speaker 1: think they're making this move to buy Grammarscy Property Trust.
Speaker 1: If you look at the overall market for warehouse space UM,
Speaker 1: it's in high demand because of the increase in online
Speaker 1: sales and in the next day or same day delivery
Speaker 1: requirements that people are expecting. And uh, this is a
Speaker 1: good entry for black Stone into this marketplace paying a
Speaker 1: premium over the current prices, and prices for this kind
Speaker 1: of space have been up last year. The reat UM
Speaker 1: warehouse reach space was up about six where the overall
Speaker 1: read market was down about eight or nine and they
Speaker 1: didn't get a big bump um it reads from the
Speaker 1: Trump tax cuts yet, so this seems to be a
Speaker 1: very good spot for them to go into. Uh, the
Speaker 1: spaces and high demand. It will continue to be in
Speaker 1: high demand for the same day delivery. And also um
Speaker 1: other industrial uses are on the rise. Companies are bringing
Speaker 1: operations back into the United States because of the repatriation
Speaker 1: tax cut, and you'll see a increase in industrial activity
Speaker 1: in the United States in general and warehouse in particular,
Speaker 1: so reads stating for real estate investment trusts. Just to
Speaker 1: make that clear, last week, per Logus, the world's largest
Speaker 1: warehouse owner, agreed to acquire DCT Industrial for nearly eight
Speaker 1: and a half billion dollars. So you are seeing the
Speaker 1: consolidation in this space. Can you just talk a little
Speaker 1: bit about what the differences between a warehouse and a
Speaker 1: big box store, because frankly, I hear about how warehouse
Speaker 1: space is in a real great demand, and then you
Speaker 1: hear about all these suffering malls and you think, well,
Speaker 1: I mean put two and two together, just make the
Speaker 1: malls into warehouses and you've got your demand sated. Well,
Speaker 1: warehouse space generally leases essentially less than retail space. When
Speaker 1: you look as you know, retail space would it be
Speaker 1: anywhere depending where it is. So on Fifth Avenue, retail
Speaker 1: spaces four or five thousan dollars a square foot. In
Speaker 1: the suburbs that might be you know, hundred dollars of foot,
Speaker 1: but warehouse space in the suburbs is probably dollars a foot.
Speaker 1: So it's a huge difference in the square footage. And
Speaker 1: also if you look at the parking arrangements UM and
Speaker 1: a big box store in the suburbs, there's a ton
Speaker 1: of parking UM at a warehouse there isn't. It's basically
Speaker 1: space for trucks UM. So if they do convert an
Speaker 1: existing big box store UM into warehouse, they have a
Speaker 1: lot of extra land available to build additional warehouse space
Speaker 1: on that property. It could be an interesting play well.
Speaker 1: And then I guess there has to be some massive
Speaker 1: realized loss if there is conversion of say a big
Speaker 1: mall into a warehouse space just because of the smaller
Speaker 1: price that they can charge. Right right, I don't see
Speaker 1: a large mall being converted to warehouse a arge mall
Speaker 1: UM to the extent that it's going to be good
Speaker 1: doing a redevelopment, will have entertainment, residential and office space
Speaker 1: added to it. Um. You might see a reduction in
Speaker 1: the number of cars over the next ten years due
Speaker 1: to self driving automobiles. People will not need to have
Speaker 1: their own cars and going through the mall will be
Speaker 1: you know, tapping your phone and a car will appear
Speaker 1: in your driveway. UM. So it's gonna be an interesting
Speaker 1: um change over the next ten years in terms of technology. UM.
Speaker 1: I think the malls are going through a repositioning and
Speaker 1: reimagining today which is really interesting. It's it's an experiential
Speaker 1: development in malls, um, which I love that word. Uh.
Speaker 1: And and if if you go down like in Florida
Speaker 1: is a really great example. So the Ball Harbor Mall
Speaker 1: was the classy mall. All of the major stores were there,
Speaker 1: and they're adding restaurants, adding pilates, class studios, palatine bike stores,
Speaker 1: you know. So it's an experience to go there because
Speaker 1: you're going to eat, you're going to exercise, you're going
Speaker 1: to to the to the movies right there. Um. And
Speaker 1: this good shopping and the you know, the best stores. Um.
Speaker 1: And that's an experience as opposed to just I'm going
Speaker 1: to the store to buy address or pair of pants,
Speaker 1: which you can now do online much easier, public versus private.
Speaker 1: Better to be a private real estate company these days.
Speaker 1: UM reads have not had UM huge uptick UM and
Speaker 1: I'm surprised at that the new tax cuts really favorite
Speaker 1: reads UM and come from a read is subject to
Speaker 1: business exclusion UM, so that you're paying the twenty rate
Speaker 1: on read income UM general dividends or but the corporation
Speaker 1: pays twenty one, so the effective right there is thirty
Speaker 1: seven UM. So reads are really have a tax benefit
Speaker 1: and that hasn't been factored into their pricing. Why do
Speaker 1: you think that is, UM, I think it's complicated for
Speaker 1: most people to understand. But you know, for analysts and stuff,
Speaker 1: they're looking at it, and reads are valued based on
Speaker 1: the dividend payout UM and and net asset value. But
Speaker 1: it's it's really the people buying it because of the
Speaker 1: dividend stream UM. And if interest rates are going up
Speaker 1: and you get three on a ten year treasury and
Speaker 1: three on a read, you're not going to pay as
Speaker 1: much for the REAT. So I want to just ship
Speaker 1: back to the idea of the warehouse space, and it's
Speaker 1: a it's a question that Pim raised before the segment
Speaker 1: where he was saying, you know, are we seeing peak
Speaker 1: valuations here? Just because we are seeing such premiums bid
Speaker 1: up for these spaces at this time, you know, there's
Speaker 1: a lot of money waiting to be placed in the market.
Speaker 1: The stock market is experiencing significant volatility over the last
Speaker 1: um ten or eleven months. People look for safe investments
Speaker 1: or safer investments that have a steady rate of return,
Speaker 1: and real estate provides that. So you're seeing real estate
Speaker 1: becoming a much more attractive investment when you look at
Speaker 1: what's going on in the world in terms of real
Speaker 1: estate UM affordable housing is in high demand UM housing
Speaker 1: in generalism and high demand. Hotels have been in high
Speaker 1: demand UM. Office less so, retail much less so UM
Speaker 1: the warehouse because of the of the shift in consumer
Speaker 1: behavior brought about by companies like Amazon, UM, you're seeing
Speaker 1: the darling of the of the investor real quick. Have
Speaker 1: we seen rates to rent out warehouse space go up recently? Yes,
Speaker 1: how much significantly? I don't have the exact statistics, but
Speaker 1: it's on the rise because demand is on the rise. Fascinating,
Speaker 1: Thank you so much for being with us. Kennt Weisenberg,
Speaker 1: partner in charge of the real estate services group for
Speaker 1: Eisner Amper in New York. We really appreciate you being here,
Speaker 1: especially on a day when Blackstone is buying Grammar Seat
Speaker 1: Property Trust. This is the second multi billion taller takeover
Speaker 1: of a warehouse company is in just the past two
Speaker 1: weeks fastening Space. We will continue to keep tabs on
Speaker 1: it customized in souls using three D printing technology. How
Speaker 1: is it done and what is the goal here? To
Speaker 1: help us understand this new business adventure is Shamil Hargovin.
Speaker 1: He is the co founder and the chief executive, along
Speaker 1: with Hannah Chakrits, the director of product and design for Weaves.
Speaker 1: That W I I V V. That's W double I
Speaker 1: double V. Alright, Shamil tell us about we've and the
Speaker 1: science behind custom made insuls. Hey, Pam, thank you, Yeah, We've.
Speaker 1: We've effectively taken Meta Greate medical great scan technology, put
Speaker 1: it on a phone and we're able to now from
Speaker 1: the comfort of your living room, measure your feet or
Speaker 1: other body parts and then run that through a system
Speaker 1: where we customize the product designed for your body. We
Speaker 1: buy mechanically enhance the product to serve your body, and
Speaker 1: then ultimately use additive manufacturing in three D printing to
Speaker 1: print the product in the United States and send it
Speaker 1: to your door. Chamil, Before we do anything else, we
Speaker 1: have to get something out of the way. You ran
Speaker 1: a marathon and flip flops? Is that right? I apologize
Speaker 1: that was our product engineer, Chris Bellomdia. Yes, okay, I'm
Speaker 1: just making sure and he lived to see the other day.
Speaker 1: You know, this is a fascinating issue because this sort
Speaker 1: of raises a question. Is this the future where you
Speaker 1: could just get a scan, have clothes or shoes manufactured
Speaker 1: at a three D printing press that doesn't require that
Speaker 1: many people there to do it, and then it gets
Speaker 1: shipped right to you. Is that what we're going to see,
Speaker 1: say in ten years from now. I'd say sooner than that,
Speaker 1: but yes, we're here. Um, we're starting with footwear, uh
Speaker 1: and and and products like orthotics and insoles. But it's
Speaker 1: just a matter of time before we get is smarter, quicker,
Speaker 1: and it becomes something increasingly cheaper for everyone to have.
Speaker 1: So Hannah, come on in here, because I'm trying to
Speaker 1: figure out the actual process of the three D printing
Speaker 1: and how you figure how you make it work. Can
Speaker 1: you just give walk me through what happens once someone
Speaker 1: submits a scan of their foot to the point when
Speaker 1: they get the product. Yeah. So it's actually a very
Speaker 1: simple process. You download our app, you pick the product
Speaker 1: that you want, and then with just a few photos,
Speaker 1: we digitally map your your feet and create a three
Speaker 1: D model of the product that we're building, and then
Speaker 1: can send that to the three D printer, print the
Speaker 1: product overnight, and get it to your door in under
Speaker 1: ten days. So you don't own the three D printing press,
Speaker 1: we do you do? Okay? So you have a press. Uh,
Speaker 1: we have a manufacturing facility and San Diego Shamille. What
Speaker 1: prevents other companies from coming in and doing exactly the
Speaker 1: same thing? I mean, there are ways to buy orthotics
Speaker 1: now you can have them custom molded, I guess to
Speaker 1: your feet. But what prevents someone else from coming in
Speaker 1: scanning someone's foot and using three D printing technology to
Speaker 1: offer a competitor. Absolutely. Let's just set a really quick
Speaker 1: piece of context. What's happening that's accelerating what we're doing
Speaker 1: for starters is we have scanning technologies and we've got
Speaker 1: the big players Apple, Intel, Microsoft, Google spending lots of
Speaker 1: money there on the printing side, ge Hewlett Packard, Carbon
Speaker 1: three D systems. What we are the leaders at is
Speaker 1: taking that scan and converting it into a three D
Speaker 1: printable file, and we do that in a matter of seconds. Uh.
Speaker 1: And that's the really, that's the patents, that's the technology,
Speaker 1: that's what we've continues to innovate in. Is it's almost
Speaker 1: a machine learning meets computer vision meets customization algorithm s
Speaker 1: and so that that that's our core technology. That's hard
Speaker 1: to replicate. So I'm just trying to figure out the
Speaker 1: advantage to the consumer. Clearly, it's because if you do
Speaker 1: have a custom fit based on your technology, that's an advantage.
Speaker 1: What about the cost, Hannah, The cost is affordable. But
Speaker 1: I want to touch on custom again. So the reason
Speaker 1: we do what we do is is not just because
Speaker 1: custom is cool. We truly believe that custom fit products
Speaker 1: will really impact how you move and you feel and
Speaker 1: you function on a day to day basis. So the
Speaker 1: Boston Marathon was an extreme example of that, where you
Speaker 1: have a product that's customed to each of your feet, uh,
Speaker 1: and it will impact how how you run, not just
Speaker 1: a marathon, but even how you walk to work, and
Speaker 1: how you stand and how you can you know, feel
Speaker 1: how your mood is during the day. So um our
Speaker 1: goal is feel and function how you move and live
Speaker 1: UM and you you'll be able to see our sandals
Speaker 1: for a very accessible price and our insuls from seventy nine.
Speaker 1: Shamille maybe speak a little bit about the actual library,
Speaker 1: the database of scanned images that you have, because doesn't
Speaker 1: that also make it possible for you to then customize
Speaker 1: it based on what you've done in the past. Absolutely
Speaker 1: that the data here is is the actual goal mine
Speaker 1: so to speak. We've has an extremely large repository footwear
Speaker 1: data we've collected and we actually acquired through one of
Speaker 1: our acquisitions in sixteen, was right, That's correct, yes, uh.
Speaker 1: And the idea here is that the more data we have,
Speaker 1: almost like you know, the search algorithms that the company
Speaker 1: is trying to bring AI into the world. Either more
Speaker 1: data you have, the more you're able, uh to kind
Speaker 1: of get this right in terms of understanding the different
Speaker 1: form factors and feet you're dealing with. And so this
Speaker 1: is very critical for our for our company and its longevity.
Speaker 1: Really interesting Thank you so much both of you for
Speaker 1: being with us. Chamil Hargovin, co founder and chief executive
Speaker 1: officer of We've in Seattle, and Hannah Zachritz, director of
Speaker 1: product and design for the company based in Vancouver, thank
Speaker 1: you so much. Really interesting and uh it makes me
Speaker 1: wonder what else will be able to be printed in
Speaker 1: those three D printers. I've seen houses being printed. I
Speaker 1: wonder how much they'll be part of our We're not
Speaker 1: going to help me in a marathon anyway. The Oracle
Speaker 1: of Omaha spoke and the world listened, and keep speaking
Speaker 1: and the world keeps listening. We're talking about the Berkshire
Speaker 1: Hathway Annual shareholder Meeting, which is ongoing. Joining us now
Speaker 1: is David Dead's founder, president, chief investment strategist at Point
Speaker 1: View Wealth Management, overseeing about three million dollars in New Jersey. David,
Speaker 1: thank you so much for being with us. I want
Speaker 1: to start first with the loss that Berkshire Hathaway reported
Speaker 1: due to what they called punishing accounting changes. Can you
Speaker 1: just talk about what these are and whether we should
Speaker 1: paying attention to that. Yeah, Well, the bottom line is
Speaker 1: people are not paying attention to that. Um Buffa is
Speaker 1: always focused on, you know, economic potential and actual earnings
Speaker 1: on cash invested. These changes in accounting treatment have have
Speaker 1: no impact on the value of his investment, on the
Speaker 1: value of his businesses, and so I think it's widely
Speaker 1: thought that investors and others should disregard these one time
Speaker 1: accounting issues. David diets rat poison. He talked about rat poison,
Speaker 1: didn't he? Well, uh, you know, there's a lot of
Speaker 1: even more colorful language that was used um in Omaha
Speaker 1: on Saturday. Um, but uh, you know, depending on the topic,
Speaker 1: but particularly Charlie Munger a man of few words, but
Speaker 1: they are certainly colorful words that were used to describe
Speaker 1: all sorts of things, including his uh dislike of cryptocurrencies. Yeah,
Speaker 1: that's what Warren Buffett said, that bitcoin is is rat poison.
Speaker 1: Did you find many people there who disagreed with them? Well,
Speaker 1: you know, not to make that word raised in the
Speaker 1: hand to argue with him on that, But I think
Speaker 1: the more important thing really was his reasoning there. And
Speaker 1: it all goes back for Warren Buffet um and Charlie
Speaker 1: Munger on productivity. If you have an asset that can
Speaker 1: do something for you, that can pay off income, that
Speaker 1: can grow crops which can produce a profit. They're all
Speaker 1: for that. When you have assets like gold, like cryptocurrencies,
Speaker 1: which just kind of exists in trade hands, but at
Speaker 1: the end of the day they don't multiply, they're not fertile,
Speaker 1: then he is very negative on that, and so he
Speaker 1: analogy cryptocurrency. They both did to one of the biggest
Speaker 1: investment the bacles that the world has ever seen, which
Speaker 1: was the trading of toolip bolts bulbs in the UH
Speaker 1: seventeenth century over in Amsterdam Um. And so the message
Speaker 1: was quite clear, steer clear. He added to that in
Speaker 1: some comments this morning when he asked, well, why is
Speaker 1: Goldman's Acts going to start trading them? And he said,
Speaker 1: quite frankly, I think some of the senior people at
Speaker 1: Goldman's Acts probably share the views I have. But you know,
Speaker 1: there's a market. The ducks are quacking, so you're gonna
Speaker 1: make a market dry and makes the money off the activity.
Speaker 1: Warren Buffett also had some colorful words for Elon Musk. Yeah, exactly, well,
Speaker 1: I mean, I guess Elon Musk kind of started by
Speaker 1: calling moat, which is one of the favorite terms that
Speaker 1: they used to to give you a visual as to
Speaker 1: the type of protection they'd like to see around their
Speaker 1: businesses as lame um saying if that's your best defense
Speaker 1: against marauding armies, you're you're not much good and uh um.
Speaker 1: There's a lot of chuckling back and forth, but I
Speaker 1: think there's kind of a misunderstanding as to what a
Speaker 1: mode is all about. And and they explained how most
Speaker 1: are your competitive advantage, a reason why the product gear
Speaker 1: offering will continue to have a market, which is values
Speaker 1: it above him beyond your cost of production. And I
Speaker 1: thought it was it was kind of cute at the
Speaker 1: end when they talked about, well, you can make fun
Speaker 1: of our moats, but we have a nice moat around
Speaker 1: Seas Chocolates, which is one of their businesses, which is
Speaker 1: very big in California of course, where Elon Musk is
Speaker 1: and kind of challenged in a humorous way. Elon must
Speaker 1: to uh, you know, overcome the mote that Sees Chocolate
Speaker 1: has in California. Um. There's been some tweets back in
Speaker 1: the well from Elon Musk. He's saying he may take
Speaker 1: them up on the challenge, but I'll have to bet
Speaker 1: with the Warren and Charlie if there sees Canny enjoys
Speaker 1: a very great moat, and Elon is not gonna build
Speaker 1: a touch it. What did he say about Apple, because
Speaker 1: they did buy one another seventy five million shares in
Speaker 1: the first quarter, and it turns out that neither of
Speaker 1: them actually use an iPhone. Yeah, you know, it's kind
Speaker 1: of odd. I think I think the analysis is that
Speaker 1: it's more of a consumer good rather than a tech company.
Speaker 1: And you know, they see people's embrace of the the
Speaker 1: everything mac and iPhone ecosphere and see recurring revenues coming
Speaker 1: from that. So that's one thing. Of course, they really
Speaker 1: like the fact that it was well priced relative to
Speaker 1: a lot of other tech companies. Is actually priced um
Speaker 1: uh in terms of price to earnings below the overall market,
Speaker 1: and when you back out the cash is not being
Speaker 1: used to create the profits, the price earning creation is
Speaker 1: even less. And they also liked how Tim Cook thinks,
Speaker 1: which to cut to the chase means that unneeded capital
Speaker 1: will be returned to shareholders in the form of stock buybacks,
Speaker 1: and we just saw increase in the dividend. I think
Speaker 1: he likes the financial management at Apple, he likes the product,
Speaker 1: and quite frantically when you're a six hundred billion dollar
Speaker 1: market cap company like Berkshire Hathaway, you need very large
Speaker 1: targets to invest in so you don't rock the market
Speaker 1: or end up controlling it and having a file with
Speaker 1: the SEC. Of course, Apple fits that bill to a t.
Speaker 1: I want to thank you very much for being with us.
Speaker 1: David Diets is the founder of the president and chief
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