WEBVTT - Summer Driving Season Will Pump Oil Prices Until Fall: Schenker 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Abramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:33.159 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Now 0:00:33.240 --> 0:00:35.559 let's turn our attention to Jason Shanker. He is the 0:00:35.560 --> 0:00:38.159 president and the founder of Prestige Economics. He's also a 0:00:38.200 --> 0:00:41.920 Bloomberg prophet. He's based in Austin, Texas, currently at the 0:00:41.920 --> 0:00:45.559 Atlanta FEDS Financial Markets Conference in Emilia Island, and you 0:00:45.600 --> 0:00:50.920 can follow Jason on Twitter at Prestige e con. Uh. Jason, 0:00:51.240 --> 0:00:54.120 where you caught on the back foot by the rise 0:00:54.240 --> 0:00:58.760 in oil prices? No, we've had an expectation that we 0:00:58.760 --> 0:01:02.280 would see oil prices rise through the driving season. You know, 0:01:02.320 --> 0:01:05.319 the unemployment rate we saw it in Friday's report, you know, 0:01:05.360 --> 0:01:08.800 the lowest we've seen since December two thousand. Strong labor 0:01:08.840 --> 0:01:11.520 market means we're going to see very strong driving demand 0:01:11.600 --> 0:01:15.360 that summer. Uh. The OPEC risks on top the Iranian 0:01:15.480 --> 0:01:18.920 risks of sanctions on top. That just adds fuel to 0:01:19.000 --> 0:01:21.920 a fire that we already expected would be burning. Because 0:01:22.200 --> 0:01:24.120 the U s summer driving season is one of the 0:01:24.160 --> 0:01:28.640 biggest factors for oil prices during the year seasonally. So 0:01:28.680 --> 0:01:30.440 I want to get a sense of how much is 0:01:30.480 --> 0:01:35.280 being baked in about the US withdrawing from the Iran packed. 0:01:35.680 --> 0:01:38.520 If the US does go ahead and withdraw from the 0:01:38.600 --> 0:01:42.240 nuclear agreement, do you think the oil prices could rise 0:01:42.319 --> 0:01:45.360 much more from here? Well, I think they could. I 0:01:45.360 --> 0:01:48.280 don't think it's priced in at all. Um. You know, 0:01:48.400 --> 0:01:51.360 the technicals and fundamentals that we've seen in the market. 0:01:51.840 --> 0:01:53.320 You know, we're but we watched the thirty day on 0:01:53.320 --> 0:01:55.480 the hundred day moving averages. We've been above those now 0:01:55.560 --> 0:01:58.680 for a little bit. Um. We're above other critical supports, 0:01:59.400 --> 0:02:03.240 these facts as were already supportive of prices. And you know, 0:02:03.280 --> 0:02:05.600 while we're seeing a little bit more upside today, and 0:02:06.360 --> 0:02:08.160 I think we're going to see quite a bit more 0:02:08.240 --> 0:02:11.880 moving forward. If we pull out of those that agreement 0:02:11.919 --> 0:02:14.440 with a run, you know, we could see five dollars, 0:02:14.520 --> 0:02:17.120 ten dollars, You could see a spike even higher than that. 0:02:17.160 --> 0:02:19.119 I don't think it'd be sustained. And I think once 0:02:19.160 --> 0:02:22.280 we get past the driving season, I think there's downside 0:02:22.360 --> 0:02:26.160 risks from higher interest rates, and if the trade UH 0:02:26.360 --> 0:02:28.520 factors remain in play, then there's still going to be 0:02:28.560 --> 0:02:31.359 downstairs there. But we see the sort of bifurcated dynamic 0:02:31.440 --> 0:02:34.760 of upside through the driving season. This produces more upside, 0:02:35.120 --> 0:02:37.959 but then in the fall more downside. Jason, how much 0:02:38.000 --> 0:02:41.120 is this increase in prices really tied to, let's say, 0:02:41.160 --> 0:02:44.320 the back and forth between the strength of the US dollar. 0:02:45.919 --> 0:02:48.440 Not much. I think that really if we look, the 0:02:48.440 --> 0:02:53.240 biggest fundamental driver for oil, like all commodities, is that 0:02:53.280 --> 0:02:56.600 they're bought and not sold. The global economy has been 0:02:56.639 --> 0:02:59.519 doing quite well, and despite what we've seen in industrial 0:02:59.520 --> 0:03:02.440 medals for those have been a weaker again, those seasonal 0:03:02.520 --> 0:03:05.359 dynamics for oil demand. Right now in the spring where 0:03:05.360 --> 0:03:08.880 we're trading driving season contracts with binaries are ramping up production. 0:03:09.240 --> 0:03:11.280 This is a time when you see oil prices rise 0:03:11.360 --> 0:03:13.280 typically anyway, and now you've got a bit of a 0:03:13.320 --> 0:03:17.640 pressure cooker because these geopolitical risks. So I'm trying to 0:03:17.639 --> 0:03:21.320 figure out right now. It seems like last year people 0:03:21.360 --> 0:03:23.800 were saying oil is never gonna get above fifty dollars 0:03:23.800 --> 0:03:26.080 in barrel, perhaps get to sixty dollars of barrel. Now 0:03:26.080 --> 0:03:28.320 we're at seventy dollars of barrel. How much of this 0:03:28.400 --> 0:03:31.840 is being driven by the fact that Saudi Arabia really 0:03:31.880 --> 0:03:34.360 wants to hit that eighty dollars of barrel mark for 0:03:34.480 --> 0:03:39.640 the Saudi aramco I p O possibly to happen next year. Yeah, 0:03:39.800 --> 0:03:42.960 I've seen as eighty dollars thrown around. Whether that's there 0:03:43.400 --> 0:03:46.200 you know, their actual explicit target or not that their 0:03:46.200 --> 0:03:50.440 explicit target was to push oil inventories to a five 0:03:50.640 --> 0:03:53.280 year towards the five year average range. That's been the 0:03:53.280 --> 0:03:56.440 goal of Opecanano PECK members. It's been clear. Something we've 0:03:56.480 --> 0:03:59.280 talked to our clients about is that Saudi Arabia is 0:03:59.400 --> 0:04:03.160 priori ties in balance sheet over income statement. Right, That's 0:04:03.160 --> 0:04:06.160 what they're doing, will sacrifice selling your fewer barrels now 0:04:06.200 --> 0:04:09.320 in order to increase the valuation of our business. That's 0:04:09.440 --> 0:04:13.120 very clear. Um upside risk. We've been assessing the price 0:04:13.240 --> 0:04:16.360 risk this summer. We would see in the sixty dollar 0:04:16.480 --> 0:04:19.720 range with potential spikes to eighty. That's something we were 0:04:19.760 --> 0:04:22.839 talking to clients about in December as a risk for 0:04:22.880 --> 0:04:26.360 the summer, so that definitely becomes a more material risk 0:04:26.480 --> 0:04:29.479 now with the geo political situation. That doesn't mean it 0:04:29.480 --> 0:04:32.840 will be sustained because the trade risks, global growth and 0:04:32.920 --> 0:04:35.599 interest rates will determine what happens once we get past 0:04:35.640 --> 0:04:38.960 this summer. But for now, best job market. You know 0:04:39.040 --> 0:04:41.960 in eighteen years you're gonna see a lot of people 0:04:41.960 --> 0:04:44.800 on the road and families driving down from Chicago to 0:04:44.880 --> 0:04:47.320 Disneyland or the Disney World. Are the kinds of things 0:04:47.360 --> 0:04:49.839 that you see driving whale prices in the summer and 0:04:49.960 --> 0:04:51.719 driving a lot of other bills too. If you're going 0:04:51.800 --> 0:04:56.080 to Disney World. Just saying I want to get I 0:04:56.080 --> 0:04:58.040 want to I want to get a sense of what 0:04:58.120 --> 0:05:01.080 you think of shale drillers and and the prospect of 0:05:01.120 --> 0:05:04.520 them really ramping up production in response to the higher price, 0:05:05.160 --> 0:05:08.560 meaning that they're basically going to offset some of the 0:05:08.600 --> 0:05:11.400 demand with just more output. What do you think is 0:05:11.480 --> 0:05:14.839 of that? Well, I think there's a couple of things 0:05:14.920 --> 0:05:16.960 that you know you still have. On the one hand, 0:05:17.000 --> 0:05:19.159 these folks they're looking at the curve, they know the 0:05:19.240 --> 0:05:23.560 seasonalities of pricing, and if they're making the drilling decisions, 0:05:23.880 --> 0:05:26.080 you know they're still going to have to understand and 0:05:26.120 --> 0:05:28.680 they deal with those dynamics. So I think that you're 0:05:28.680 --> 0:05:31.599 going to see more production, but you know, one bit 0:05:31.600 --> 0:05:34.320 and twice shy, I think you're gonna see um still 0:05:34.360 --> 0:05:36.039 some of this holding back. And I'd say that for 0:05:36.080 --> 0:05:37.800 the funds that are out there to discussion, there's a 0:05:37.839 --> 0:05:40.160 lot of money on the sidelines. There have been very 0:05:40.279 --> 0:05:43.279 large funds that have been raised in the last couple 0:05:43.279 --> 0:05:46.000 of years. I'm in Texas. I've been talking to a 0:05:46.000 --> 0:05:47.960 lot of these folks for the last year or so, 0:05:48.360 --> 0:05:51.560 and they they're still looking for distressed assets. I gotta 0:05:51.600 --> 0:05:54.840 tell you, seventy bucks of barrel looking for sweetheart deals 0:05:54.839 --> 0:05:57.640 with the stressed assets. If that's your mandate, that's going 0:05:57.680 --> 0:06:00.359 to be a pretty tough, tough fine for you. Jason, 0:06:00.440 --> 0:06:03.400 just quickly, what's the best way for investors to profit 0:06:03.440 --> 0:06:07.200 from this rise in oil prices? Well, you know, I 0:06:07.200 --> 0:06:10.279 think if folks want exposure, then they need to be 0:06:10.360 --> 0:06:13.880 looking at companies that are producing oil. Um. They also 0:06:13.960 --> 0:06:17.960 may want to be thinking about the the underlying commodity 0:06:18.000 --> 0:06:20.520 as well that the price is likely to rise. Those 0:06:20.560 --> 0:06:23.200 are probably the areas where you're going to see people plays. 0:06:23.360 --> 0:06:25.240 I want to thanks very much for joining us at 0:06:25.320 --> 0:06:29.400 Jason Schenker is the president and the founder of Prestige Economics. 0:06:29.400 --> 0:06:32.839 He's also a Bloomberg profit and you can follow Adjason 0:06:33.400 --> 0:06:50.480 on Twitter at the Prestige e con. We want to 0:06:50.560 --> 0:06:53.720 visit now in the world of real estate with Ken Wisenberg. 0:06:53.800 --> 0:06:55.599 He is a partner in charge of the real estate 0:06:55.640 --> 0:06:58.480 services group for Eisner Amper and he joins us here 0:06:58.520 --> 0:07:01.600 in our eleven three oh studious Ken, thanks very much 0:07:01.640 --> 0:07:03.840 for being with us. The news today, of course, is 0:07:03.920 --> 0:07:07.839 black Stone agreeing to buy Grammarcy Property Trust. The price 0:07:07.920 --> 0:07:12.000 tag is seven point six billion dollars. It's a fift 0:07:12.600 --> 0:07:16.560 premium over the closing price on Friday. Why do you 0:07:16.600 --> 0:07:20.440 think they're making this move to buy Grammarscy Property Trust. 0:07:20.960 --> 0:07:24.760 If you look at the overall market for warehouse space UM, 0:07:24.760 --> 0:07:27.440 it's in high demand because of the increase in online 0:07:27.440 --> 0:07:29.920 sales and in the next day or same day delivery 0:07:30.240 --> 0:07:33.840 requirements that people are expecting. And uh, this is a 0:07:33.880 --> 0:07:37.720 good entry for black Stone into this marketplace paying a 0:07:37.760 --> 0:07:40.600 premium over the current prices, and prices for this kind 0:07:40.640 --> 0:07:44.920 of space have been up last year. The reat UM 0:07:45.160 --> 0:07:48.360 warehouse reach space was up about six where the overall 0:07:48.400 --> 0:07:51.320 read market was down about eight or nine and they 0:07:51.360 --> 0:07:54.320 didn't get a big bump um it reads from the 0:07:54.360 --> 0:07:58.720 Trump tax cuts yet, so this seems to be a 0:07:58.800 --> 0:08:01.160 very good spot for them to go into. Uh, the 0:08:01.920 --> 0:08:04.280 spaces and high demand. It will continue to be in 0:08:04.360 --> 0:08:08.120 high demand for the same day delivery. And also um 0:08:08.160 --> 0:08:11.680 other industrial uses are on the rise. Companies are bringing 0:08:12.000 --> 0:08:15.040 operations back into the United States because of the repatriation 0:08:15.080 --> 0:08:20.200 tax cut, and you'll see a increase in industrial activity 0:08:20.240 --> 0:08:23.320 in the United States in general and warehouse in particular, 0:08:23.520 --> 0:08:27.280 so reads stating for real estate investment trusts. Just to 0:08:27.480 --> 0:08:30.720 make that clear, last week, per Logus, the world's largest 0:08:30.840 --> 0:08:34.880 warehouse owner, agreed to acquire DCT Industrial for nearly eight 0:08:34.880 --> 0:08:37.360 and a half billion dollars. So you are seeing the 0:08:37.400 --> 0:08:40.320 consolidation in this space. Can you just talk a little 0:08:40.320 --> 0:08:42.840 bit about what the differences between a warehouse and a 0:08:42.880 --> 0:08:46.320 big box store, because frankly, I hear about how warehouse 0:08:46.360 --> 0:08:48.400 space is in a real great demand, and then you 0:08:48.440 --> 0:08:50.800 hear about all these suffering malls and you think, well, 0:08:51.080 --> 0:08:52.920 I mean put two and two together, just make the 0:08:52.960 --> 0:08:56.280 malls into warehouses and you've got your demand sated. Well, 0:08:56.440 --> 0:09:01.559 warehouse space generally leases essentially less than retail space. When 0:09:01.559 --> 0:09:04.240 you look as you know, retail space would it be 0:09:04.280 --> 0:09:07.160 anywhere depending where it is. So on Fifth Avenue, retail 0:09:07.200 --> 0:09:10.160 spaces four or five thousan dollars a square foot. In 0:09:10.200 --> 0:09:13.240 the suburbs that might be you know, hundred dollars of foot, 0:09:13.240 --> 0:09:17.439 but warehouse space in the suburbs is probably dollars a foot. 0:09:18.160 --> 0:09:20.079 So it's a huge difference in the square footage. And 0:09:20.120 --> 0:09:23.280 also if you look at the parking arrangements UM and 0:09:23.360 --> 0:09:25.400 a big box store in the suburbs, there's a ton 0:09:25.440 --> 0:09:28.840 of parking UM at a warehouse there isn't. It's basically 0:09:28.840 --> 0:09:34.679 space for trucks UM. So if they do convert an 0:09:34.679 --> 0:09:38.040 existing big box store UM into warehouse, they have a 0:09:38.040 --> 0:09:41.640 lot of extra land available to build additional warehouse space 0:09:41.760 --> 0:09:44.480 on that property. It could be an interesting play well. 0:09:44.640 --> 0:09:47.480 And then I guess there has to be some massive 0:09:47.559 --> 0:09:51.360 realized loss if there is conversion of say a big 0:09:51.400 --> 0:09:54.800 mall into a warehouse space just because of the smaller 0:09:54.840 --> 0:09:57.000 price that they can charge. Right right, I don't see 0:09:57.040 --> 0:10:00.480 a large mall being converted to warehouse a arge mall 0:10:01.160 --> 0:10:03.360 UM to the extent that it's going to be good 0:10:03.400 --> 0:10:07.439 doing a redevelopment, will have entertainment, residential and office space 0:10:07.480 --> 0:10:10.360 added to it. Um. You might see a reduction in 0:10:10.400 --> 0:10:12.760 the number of cars over the next ten years due 0:10:12.800 --> 0:10:16.200 to self driving automobiles. People will not need to have 0:10:16.240 --> 0:10:18.640 their own cars and going through the mall will be 0:10:18.760 --> 0:10:21.000 you know, tapping your phone and a car will appear 0:10:21.040 --> 0:10:23.760 in your driveway. UM. So it's gonna be an interesting 0:10:24.160 --> 0:10:28.320 um change over the next ten years in terms of technology. UM. 0:10:28.360 --> 0:10:32.040 I think the malls are going through a repositioning and 0:10:32.120 --> 0:10:36.479 reimagining today which is really interesting. It's it's an experiential 0:10:37.040 --> 0:10:40.319 development in malls, um, which I love that word. Uh. 0:10:41.080 --> 0:10:44.720 And and if if you go down like in Florida 0:10:44.800 --> 0:10:47.680 is a really great example. So the Ball Harbor Mall 0:10:47.760 --> 0:10:50.920 was the classy mall. All of the major stores were there, 0:10:51.960 --> 0:10:57.680 and they're adding restaurants, adding pilates, class studios, palatine bike stores, 0:10:58.240 --> 0:11:00.520 you know. So it's an experience to go there because 0:11:00.520 --> 0:11:02.760 you're going to eat, you're going to exercise, you're going 0:11:02.800 --> 0:11:06.080 to to the to the movies right there. Um. And 0:11:06.240 --> 0:11:09.400 this good shopping and the you know, the best stores. Um. 0:11:09.400 --> 0:11:11.640 And that's an experience as opposed to just I'm going 0:11:11.640 --> 0:11:14.080 to the store to buy address or pair of pants, 0:11:14.880 --> 0:11:18.760 which you can now do online much easier, public versus private. 0:11:18.880 --> 0:11:21.400 Better to be a private real estate company these days. 0:11:22.600 --> 0:11:27.320 UM reads have not had UM huge uptick UM and 0:11:27.360 --> 0:11:31.000 I'm surprised at that the new tax cuts really favorite 0:11:31.000 --> 0:11:33.480 reads UM and come from a read is subject to 0:11:34.559 --> 0:11:39.480 business exclusion UM, so that you're paying the twenty rate 0:11:39.520 --> 0:11:43.880 on read income UM general dividends or but the corporation 0:11:43.920 --> 0:11:46.079 pays twenty one, so the effective right there is thirty 0:11:46.120 --> 0:11:49.520 seven UM. So reads are really have a tax benefit 0:11:50.040 --> 0:11:52.480 and that hasn't been factored into their pricing. Why do 0:11:52.559 --> 0:11:56.400 you think that is, UM, I think it's complicated for 0:11:56.440 --> 0:11:59.040 most people to understand. But you know, for analysts and stuff, 0:11:59.240 --> 0:12:02.560 they're looking at it, and reads are valued based on 0:12:02.559 --> 0:12:06.400 the dividend payout UM and and net asset value. But 0:12:06.480 --> 0:12:08.680 it's it's really the people buying it because of the 0:12:08.679 --> 0:12:12.800 dividend stream UM. And if interest rates are going up 0:12:13.000 --> 0:12:15.720 and you get three on a ten year treasury and 0:12:15.800 --> 0:12:19.040 three on a read, you're not going to pay as 0:12:19.120 --> 0:12:21.880 much for the REAT. So I want to just ship 0:12:21.920 --> 0:12:24.520 back to the idea of the warehouse space, and it's 0:12:24.520 --> 0:12:27.520 a it's a question that Pim raised before the segment 0:12:27.559 --> 0:12:30.000 where he was saying, you know, are we seeing peak 0:12:30.080 --> 0:12:34.120 valuations here? Just because we are seeing such premiums bid 0:12:34.200 --> 0:12:37.960 up for these spaces at this time, you know, there's 0:12:38.000 --> 0:12:40.520 a lot of money waiting to be placed in the market. 0:12:41.480 --> 0:12:46.280 The stock market is experiencing significant volatility over the last 0:12:47.040 --> 0:12:51.200 um ten or eleven months. People look for safe investments 0:12:51.280 --> 0:12:53.559 or safer investments that have a steady rate of return, 0:12:53.600 --> 0:12:57.040 and real estate provides that. So you're seeing real estate 0:12:57.040 --> 0:13:00.839 becoming a much more attractive investment when you look at 0:13:00.880 --> 0:13:03.000 what's going on in the world in terms of real 0:13:03.120 --> 0:13:07.920 estate UM affordable housing is in high demand UM housing 0:13:07.920 --> 0:13:10.719 in generalism and high demand. Hotels have been in high 0:13:10.800 --> 0:13:15.680 demand UM. Office less so, retail much less so UM 0:13:15.679 --> 0:13:19.600 the warehouse because of the of the shift in consumer 0:13:19.640 --> 0:13:23.400 behavior brought about by companies like Amazon, UM, you're seeing 0:13:24.080 --> 0:13:27.080 the darling of the of the investor real quick. Have 0:13:27.200 --> 0:13:31.320 we seen rates to rent out warehouse space go up recently? Yes, 0:13:31.640 --> 0:13:34.800 how much significantly? I don't have the exact statistics, but 0:13:35.000 --> 0:13:39.520 it's on the rise because demand is on the rise. Fascinating, 0:13:39.679 --> 0:13:42.200 Thank you so much for being with us. Kennt Weisenberg, 0:13:42.240 --> 0:13:44.720 partner in charge of the real estate services group for 0:13:44.880 --> 0:13:48.400 Eisner Amper in New York. We really appreciate you being here, 0:13:48.559 --> 0:13:53.319 especially on a day when Blackstone is buying Grammar Seat 0:13:53.360 --> 0:13:57.200 Property Trust. This is the second multi billion taller takeover 0:13:57.240 --> 0:14:00.760 of a warehouse company is in just the past two 0:14:00.960 --> 0:14:05.280 weeks fastening Space. We will continue to keep tabs on 0:14:05.320 --> 0:14:24.720 it customized in souls using three D printing technology. How 0:14:24.840 --> 0:14:27.360 is it done and what is the goal here? To 0:14:27.400 --> 0:14:32.040 help us understand this new business adventure is Shamil Hargovin. 0:14:32.120 --> 0:14:34.960 He is the co founder and the chief executive, along 0:14:35.000 --> 0:14:39.360 with Hannah Chakrits, the director of product and design for Weaves. 0:14:39.440 --> 0:14:45.080 That W I I V V. That's W double I 0:14:45.640 --> 0:14:49.240 double V. Alright, Shamil tell us about we've and the 0:14:49.400 --> 0:14:55.440 science behind custom made insuls. Hey, Pam, thank you, Yeah, We've. 0:14:56.120 --> 0:15:02.160 We've effectively taken Meta Greate medical great scan technology, put 0:15:02.200 --> 0:15:05.600 it on a phone and we're able to now from 0:15:05.640 --> 0:15:09.240 the comfort of your living room, measure your feet or 0:15:09.320 --> 0:15:12.160 other body parts and then run that through a system 0:15:12.200 --> 0:15:15.680 where we customize the product designed for your body. We 0:15:15.800 --> 0:15:19.880 buy mechanically enhance the product to serve your body, and 0:15:19.920 --> 0:15:23.280 then ultimately use additive manufacturing in three D printing to 0:15:23.400 --> 0:15:25.480 print the product in the United States and send it 0:15:25.520 --> 0:15:30.120 to your door. Chamil, Before we do anything else, we 0:15:30.160 --> 0:15:32.080 have to get something out of the way. You ran 0:15:32.120 --> 0:15:35.360 a marathon and flip flops? Is that right? I apologize 0:15:35.400 --> 0:15:39.360 that was our product engineer, Chris Bellomdia. Yes, okay, I'm 0:15:39.400 --> 0:15:41.880 just making sure and he lived to see the other day. 0:15:42.160 --> 0:15:44.880 You know, this is a fascinating issue because this sort 0:15:44.880 --> 0:15:47.680 of raises a question. Is this the future where you 0:15:47.680 --> 0:15:52.160 could just get a scan, have clothes or shoes manufactured 0:15:52.160 --> 0:15:54.640 at a three D printing press that doesn't require that 0:15:54.680 --> 0:15:57.080 many people there to do it, and then it gets 0:15:57.080 --> 0:15:59.520 shipped right to you. Is that what we're going to see, 0:15:59.640 --> 0:16:02.760 say in ten years from now. I'd say sooner than that, 0:16:02.920 --> 0:16:07.160 but yes, we're here. Um, we're starting with footwear, uh 0:16:07.440 --> 0:16:11.040 and and and products like orthotics and insoles. But it's 0:16:11.080 --> 0:16:13.800 just a matter of time before we get is smarter, quicker, 0:16:14.240 --> 0:16:17.200 and it becomes something increasingly cheaper for everyone to have. 0:16:17.720 --> 0:16:20.320 So Hannah, come on in here, because I'm trying to 0:16:20.360 --> 0:16:24.480 figure out the actual process of the three D printing 0:16:24.720 --> 0:16:27.840 and how you figure how you make it work. Can 0:16:27.880 --> 0:16:30.680 you just give walk me through what happens once someone 0:16:30.720 --> 0:16:33.840 submits a scan of their foot to the point when 0:16:33.840 --> 0:16:36.640 they get the product. Yeah. So it's actually a very 0:16:36.640 --> 0:16:39.480 simple process. You download our app, you pick the product 0:16:39.480 --> 0:16:41.760 that you want, and then with just a few photos, 0:16:42.000 --> 0:16:46.080 we digitally map your your feet and create a three 0:16:46.160 --> 0:16:48.880 D model of the product that we're building, and then 0:16:48.960 --> 0:16:51.840 can send that to the three D printer, print the 0:16:51.880 --> 0:16:53.920 product overnight, and get it to your door in under 0:16:53.920 --> 0:16:56.200 ten days. So you don't own the three D printing press, 0:16:56.360 --> 0:16:58.800 we do you do? Okay? So you have a press. Uh, 0:16:59.120 --> 0:17:04.200 we have a manufacturing facility and San Diego Shamille. What 0:17:04.480 --> 0:17:08.399 prevents other companies from coming in and doing exactly the 0:17:08.440 --> 0:17:11.840 same thing? I mean, there are ways to buy orthotics 0:17:11.840 --> 0:17:14.560 now you can have them custom molded, I guess to 0:17:14.640 --> 0:17:17.800 your feet. But what prevents someone else from coming in 0:17:17.880 --> 0:17:21.280 scanning someone's foot and using three D printing technology to 0:17:21.320 --> 0:17:24.560 offer a competitor. Absolutely. Let's just set a really quick 0:17:24.600 --> 0:17:27.880 piece of context. What's happening that's accelerating what we're doing 0:17:28.040 --> 0:17:31.640 for starters is we have scanning technologies and we've got 0:17:31.680 --> 0:17:35.439 the big players Apple, Intel, Microsoft, Google spending lots of 0:17:35.480 --> 0:17:39.080 money there on the printing side, ge Hewlett Packard, Carbon 0:17:39.160 --> 0:17:42.199 three D systems. What we are the leaders at is 0:17:42.320 --> 0:17:44.960 taking that scan and converting it into a three D 0:17:45.040 --> 0:17:49.160 printable file, and we do that in a matter of seconds. Uh. 0:17:49.200 --> 0:17:52.640 And that's the really, that's the patents, that's the technology, 0:17:52.720 --> 0:17:56.040 that's what we've continues to innovate in. Is it's almost 0:17:56.119 --> 0:18:00.159 a machine learning meets computer vision meets customization algorithm s 0:18:00.160 --> 0:18:03.000 and so that that that's our core technology. That's hard 0:18:03.040 --> 0:18:07.320 to replicate. So I'm just trying to figure out the 0:18:07.400 --> 0:18:11.840 advantage to the consumer. Clearly, it's because if you do 0:18:11.880 --> 0:18:14.639 have a custom fit based on your technology, that's an advantage. 0:18:14.920 --> 0:18:18.800 What about the cost, Hannah, The cost is affordable. But 0:18:18.920 --> 0:18:21.440 I want to touch on custom again. So the reason 0:18:21.480 --> 0:18:24.240 we do what we do is is not just because 0:18:24.280 --> 0:18:28.680 custom is cool. We truly believe that custom fit products 0:18:28.680 --> 0:18:31.480 will really impact how you move and you feel and 0:18:31.560 --> 0:18:33.960 you function on a day to day basis. So the 0:18:34.320 --> 0:18:37.639 Boston Marathon was an extreme example of that, where you 0:18:37.720 --> 0:18:41.520 have a product that's customed to each of your feet, uh, 0:18:41.520 --> 0:18:45.199 and it will impact how how you run, not just 0:18:45.240 --> 0:18:47.760 a marathon, but even how you walk to work, and 0:18:47.800 --> 0:18:50.719 how you stand and how you can you know, feel 0:18:51.000 --> 0:18:53.800 how your mood is during the day. So um our 0:18:53.840 --> 0:18:56.800 goal is feel and function how you move and live 0:18:57.320 --> 0:19:00.840 UM and you you'll be able to see our sandals 0:19:00.840 --> 0:19:06.040 for a very accessible price and our insuls from seventy nine. 0:19:07.720 --> 0:19:12.200 Shamille maybe speak a little bit about the actual library, 0:19:12.240 --> 0:19:16.280 the database of scanned images that you have, because doesn't 0:19:16.320 --> 0:19:19.600 that also make it possible for you to then customize 0:19:19.600 --> 0:19:22.280 it based on what you've done in the past. Absolutely 0:19:22.359 --> 0:19:24.880 that the data here is is the actual goal mine 0:19:24.920 --> 0:19:28.800 so to speak. We've has an extremely large repository footwear 0:19:28.880 --> 0:19:32.080 data we've collected and we actually acquired through one of 0:19:32.119 --> 0:19:37.320 our acquisitions in sixteen, was right, That's correct, yes, uh. 0:19:37.480 --> 0:19:39.800 And the idea here is that the more data we have, 0:19:39.960 --> 0:19:42.760 almost like you know, the search algorithms that the company 0:19:42.800 --> 0:19:45.080 is trying to bring AI into the world. Either more 0:19:45.200 --> 0:19:48.680 data you have, the more you're able, uh to kind 0:19:48.680 --> 0:19:51.760 of get this right in terms of understanding the different 0:19:51.760 --> 0:19:54.600 form factors and feet you're dealing with. And so this 0:19:54.680 --> 0:19:58.000 is very critical for our for our company and its longevity. 0:19:58.520 --> 0:20:00.639 Really interesting Thank you so much both of you for 0:20:00.760 --> 0:20:04.520 being with us. Chamil Hargovin, co founder and chief executive 0:20:04.520 --> 0:20:08.399 officer of We've in Seattle, and Hannah Zachritz, director of 0:20:08.480 --> 0:20:13.360 product and design for the company based in Vancouver, thank 0:20:13.400 --> 0:20:16.359 you so much. Really interesting and uh it makes me 0:20:16.520 --> 0:20:18.760 wonder what else will be able to be printed in 0:20:18.800 --> 0:20:22.239 those three D printers. I've seen houses being printed. I 0:20:22.280 --> 0:20:24.280 wonder how much they'll be part of our We're not 0:20:24.320 --> 0:20:41.240 going to help me in a marathon anyway. The Oracle 0:20:41.400 --> 0:20:45.679 of Omaha spoke and the world listened, and keep speaking 0:20:45.720 --> 0:20:48.160 and the world keeps listening. We're talking about the Berkshire 0:20:48.200 --> 0:20:52.560 Hathway Annual shareholder Meeting, which is ongoing. Joining us now 0:20:52.680 --> 0:20:56.320 is David Dead's founder, president, chief investment strategist at Point 0:20:56.440 --> 0:21:01.600 View Wealth Management, overseeing about three million dollars in New Jersey. David, 0:21:01.600 --> 0:21:04.080 thank you so much for being with us. I want 0:21:04.119 --> 0:21:08.639 to start first with the loss that Berkshire Hathaway reported 0:21:08.840 --> 0:21:12.960 due to what they called punishing accounting changes. Can you 0:21:13.040 --> 0:21:15.480 just talk about what these are and whether we should 0:21:15.480 --> 0:21:18.520 paying attention to that. Yeah, Well, the bottom line is 0:21:18.920 --> 0:21:23.280 people are not paying attention to that. Um Buffa is 0:21:23.280 --> 0:21:27.200 always focused on, you know, economic potential and actual earnings 0:21:27.200 --> 0:21:31.960 on cash invested. These changes in accounting treatment have have 0:21:32.240 --> 0:21:35.159 no impact on the value of his investment, on the 0:21:35.280 --> 0:21:38.160 value of his businesses, and so I think it's widely 0:21:38.520 --> 0:21:43.520 thought that investors and others should disregard these one time 0:21:43.560 --> 0:21:48.760 accounting issues. David diets rat poison. He talked about rat poison, 0:21:48.840 --> 0:21:52.800 didn't he? Well, uh, you know, there's a lot of 0:21:53.040 --> 0:21:57.879 even more colorful language that was used um in Omaha 0:21:58.280 --> 0:22:03.480 on Saturday. Um, but uh, you know, depending on the topic, 0:22:03.920 --> 0:22:07.560 but particularly Charlie Munger a man of few words, but 0:22:07.600 --> 0:22:10.960 they are certainly colorful words that were used to describe 0:22:11.000 --> 0:22:15.200 all sorts of things, including his uh dislike of cryptocurrencies. Yeah, 0:22:15.200 --> 0:22:18.399 that's what Warren Buffett said, that bitcoin is is rat poison. 0:22:18.480 --> 0:22:22.160 Did you find many people there who disagreed with them? Well, 0:22:22.400 --> 0:22:24.000 you know, not to make that word raised in the 0:22:24.119 --> 0:22:26.360 hand to argue with him on that, But I think 0:22:26.400 --> 0:22:29.840 the more important thing really was his reasoning there. And 0:22:29.920 --> 0:22:33.600 it all goes back for Warren Buffet um and Charlie 0:22:33.680 --> 0:22:37.359 Munger on productivity. If you have an asset that can 0:22:37.480 --> 0:22:41.160 do something for you, that can pay off income, that 0:22:41.200 --> 0:22:44.480 can grow crops which can produce a profit. They're all 0:22:44.560 --> 0:22:49.320 for that. When you have assets like gold, like cryptocurrencies, 0:22:49.359 --> 0:22:53.159 which just kind of exists in trade hands, but at 0:22:53.200 --> 0:22:56.399 the end of the day they don't multiply, they're not fertile, 0:22:56.720 --> 0:22:59.159 then he is very negative on that, and so he 0:22:59.200 --> 0:23:03.280 analogy cryptocurrency. They both did to one of the biggest 0:23:03.320 --> 0:23:06.520 investment the bacles that the world has ever seen, which 0:23:06.560 --> 0:23:10.600 was the trading of toolip bolts bulbs in the UH 0:23:10.680 --> 0:23:15.680 seventeenth century over in Amsterdam Um. And so the message 0:23:15.800 --> 0:23:19.159 was quite clear, steer clear. He added to that in 0:23:19.200 --> 0:23:21.359 some comments this morning when he asked, well, why is 0:23:21.400 --> 0:23:24.080 Goldman's Acts going to start trading them? And he said, 0:23:24.119 --> 0:23:26.080 quite frankly, I think some of the senior people at 0:23:26.080 --> 0:23:29.199 Goldman's Acts probably share the views I have. But you know, 0:23:29.240 --> 0:23:31.359 there's a market. The ducks are quacking, so you're gonna 0:23:31.359 --> 0:23:33.639