1
00:00:04,760 --> 00:00:08,080
Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm pim Fox.

2
00:00:08,119 --> 00:00:11,200
Speaker 1: Along with my co host Lisa Abramowitz. Each day we

3
00:00:11,280 --> 00:00:14,480
Speaker 1: bring you the most important, noteworthy, and useful interviews for

4
00:00:14,520 --> 00:00:16,560
Speaker 1: you and your money, whether you're at the grocery store

5
00:00:16,800 --> 00:00:19,960
Speaker 1: or the trading floor. Find the Bloomberg pm L podcast

6
00:00:20,000 --> 00:00:28,240
Speaker 1: on iTunes, SoundCloud and at Bloomberg dot com. Here to

7
00:00:28,320 --> 00:00:31,040
Speaker 1: tell us what's going to happen in seventeen, or at

8
00:00:31,120 --> 00:00:34,080
Speaker 1: least what might happen is liz Ane Saunders, chief investment

9
00:00:34,080 --> 00:00:38,520
Speaker 1: strategist for Charles Schwab and Company, joining us from San Francisco.

10
00:00:38,920 --> 00:00:41,360
Speaker 1: Lizen always a pleasure tell us your outlook for the

11
00:00:41,440 --> 00:00:43,760
Speaker 1: SMP five harder. Let's start with earnings and then we

12
00:00:43,800 --> 00:00:47,800
Speaker 1: can talk about valuations. So um well, both in earnings

13
00:00:47,840 --> 00:00:51,479
Speaker 1: and in terms of market performance, we don't publish targets.

14
00:00:51,520 --> 00:00:53,720
Speaker 1: I actually think that that's a bit of a silly exercise.

15
00:00:53,800 --> 00:00:56,400
Speaker 1: But if you look at the consensus right now for

16
00:00:56,480 --> 00:01:01,160
Speaker 1: corporate earnings, it's about growth every year for calendar year seventeen.

17
00:01:01,520 --> 00:01:04,319
Speaker 1: What's interesting about that number is most analysts that do

18
00:01:04,360 --> 00:01:08,560
Speaker 1: publish forecasts have it yet incorporated in the potential benefit

19
00:01:08,680 --> 00:01:12,320
Speaker 1: either from regulatory reform or tax reform, infrastructure spending, or

20
00:01:12,360 --> 00:01:14,480
Speaker 1: maybe the combin combination of all of those. So I

21
00:01:14,480 --> 00:01:18,759
Speaker 1: think there's potentially upside um. There's also some downside because

22
00:01:18,800 --> 00:01:21,560
Speaker 1: analysts naturally get a little bit too too optimistic, But

23
00:01:21,600 --> 00:01:24,120
Speaker 1: I think the net is going to be fairly positive

24
00:01:24,120 --> 00:01:26,640
Speaker 1: in terms of economic growth. Clearly, we saw a lift

25
00:01:26,680 --> 00:01:29,399
Speaker 1: up and economic activity in the second half of ten,

26
00:01:29,480 --> 00:01:31,400
Speaker 1: so I actually think the rally that we got in

27
00:01:31,440 --> 00:01:34,160
Speaker 1: the stock market had as much to do with that,

28
00:01:34,280 --> 00:01:36,520
Speaker 1: and much of that predated the election, so I don't

29
00:01:36,520 --> 00:01:39,280
Speaker 1: think it's pure election related, and I think we are

30
00:01:39,319 --> 00:01:41,880
Speaker 1: looking at a pro growth administration. My concern, and I

31
00:01:41,959 --> 00:01:44,959
Speaker 1: think it was exacerbated by the press conference yesterday, is

32
00:01:45,000 --> 00:01:49,160
Speaker 1: that the protectionist part of the policy platform is starting

33
00:01:49,160 --> 00:01:52,320
Speaker 1: to move up the spectrum in terms of likely action

34
00:01:52,360 --> 00:01:54,680
Speaker 1: in seen, and I think that would be an offset

35
00:01:54,720 --> 00:01:57,560
Speaker 1: to some of the more positive components of the of

36
00:01:57,600 --> 00:01:59,840
Speaker 1: the plan. You know, we hear a lot about the

37
00:02:00,040 --> 00:02:03,600
Speaker 1: rotation out of bonds and into stocks. Do you believe

38
00:02:03,640 --> 00:02:05,640
Speaker 1: that this is happening and what are you looking for

39
00:02:05,920 --> 00:02:09,239
Speaker 1: to sort of indicate whether there is sort of more

40
00:02:09,360 --> 00:02:13,280
Speaker 1: upside in stocks at the behest or at the detriment

41
00:02:13,360 --> 00:02:16,720
Speaker 1: to the detriment of bonds. I think it's it's too

42
00:02:16,720 --> 00:02:19,560
Speaker 1: soon to suggest that a new trend is in place.

43
00:02:19,639 --> 00:02:22,880
Speaker 1: I e. The great rotation has kicked in. Uh you

44
00:02:23,200 --> 00:02:26,079
Speaker 1: shaw about three weeks of pretty steady and flows into

45
00:02:26,120 --> 00:02:29,200
Speaker 1: the US equity market, combining both neutral funds and exchange

46
00:02:29,200 --> 00:02:32,000
Speaker 1: traded funds. But in the last week that's actually falter

47
00:02:32,080 --> 00:02:34,280
Speaker 1: and you've gone back into negative territory. So it's a

48
00:02:34,520 --> 00:02:36,600
Speaker 1: you know, it's a nascent shift, and I think too

49
00:02:36,600 --> 00:02:38,200
Speaker 1: soon to suggest that this is going to be a

50
00:02:38,200 --> 00:02:41,120
Speaker 1: big story in two seen. The good news is is

51
00:02:41,160 --> 00:02:42,960
Speaker 1: that if you look further back, if you look through

52
00:02:43,000 --> 00:02:47,000
Speaker 1: that this entireble market, not a single net new dollar

53
00:02:47,080 --> 00:02:49,560
Speaker 1: of money has come into the US equity market, even

54
00:02:49,560 --> 00:02:53,240
Speaker 1: if you include e t f s into the funds category.

55
00:02:53,440 --> 00:02:55,760
Speaker 1: So there's still a lot of runway ahead of us

56
00:02:56,040 --> 00:02:59,080
Speaker 1: for that to be a lift for the market. I I.

57
00:02:59,240 --> 00:03:01,360
Speaker 1: You know, the fact we got three weeks of infloz

58
00:03:01,440 --> 00:03:03,360
Speaker 1: is a good thing, but it also shows you how

59
00:03:03,400 --> 00:03:06,480
Speaker 1: quickly sentiment can shift. Given that in just the last week,

60
00:03:06,919 --> 00:03:10,160
Speaker 1: during this period of consolidation for equities, kind of investors

61
00:03:10,160 --> 00:03:13,160
Speaker 1: turntail again. So it has the potential to be a

62
00:03:13,200 --> 00:03:16,440
Speaker 1: positive story. It's I think it's a little early. Well,

63
00:03:16,440 --> 00:03:19,239
Speaker 1: how attractive do equities have to be in order to

64
00:03:19,280 --> 00:03:21,240
Speaker 1: attract that money. I was just taking a look at

65
00:03:21,280 --> 00:03:24,200
Speaker 1: the price to earnings ratio for the SMP five D.

66
00:03:24,360 --> 00:03:28,040
Speaker 1: If you bought it today, you're paying a twenty one multiple. Well,

67
00:03:28,040 --> 00:03:30,800
Speaker 1: that's on trailing earnings. And nothing wrong with looking at

68
00:03:30,800 --> 00:03:32,639
Speaker 1: trailing yeah, because you don't know what's going to happen

69
00:03:32,680 --> 00:03:35,600
Speaker 1: in the future. But when you are at an inflection

70
00:03:35,640 --> 00:03:38,960
Speaker 1: point in earnings and your trailing earnings incorporates a couple

71
00:03:39,000 --> 00:03:42,440
Speaker 1: of quarters of an earnings recession, I think that artificially

72
00:03:42,560 --> 00:03:45,440
Speaker 1: deflates the E and the PE equation, and I think

73
00:03:45,480 --> 00:03:49,360
Speaker 1: it is important to look in conjunction with trailing valuations,

74
00:03:49,400 --> 00:03:52,240
Speaker 1: look at forward valuations, and on a forward PE basis,

75
00:03:52,520 --> 00:03:55,640
Speaker 1: you're more like seventeen. That's a little bit north of

76
00:03:55,720 --> 00:03:59,080
Speaker 1: the long term median. But in the current inflation environment

77
00:03:59,080 --> 00:04:01,800
Speaker 1: we're in, assuming it doesn't really kick in from here,

78
00:04:02,400 --> 00:04:05,800
Speaker 1: multiples have actually typically traded above where we are right now.

79
00:04:05,880 --> 00:04:09,200
Speaker 1: So I also think valuation is the eye of the beholder.

80
00:04:09,200 --> 00:04:12,520
Speaker 1: We're talking about traditional PE ratios. You can look at

81
00:04:12,600 --> 00:04:15,440
Speaker 1: price to book. You can look at inflation adjusted measures

82
00:04:15,440 --> 00:04:17,440
Speaker 1: like the rule of twenty two FED model. You can

83
00:04:17,480 --> 00:04:21,080
Speaker 1: look at even further trailing numbers like Schiller Cape, and

84
00:04:21,480 --> 00:04:23,680
Speaker 1: I promise you that no matter what your view is

85
00:04:23,720 --> 00:04:26,120
Speaker 1: on the market, I can find you a valuation metric

86
00:04:26,200 --> 00:04:28,840
Speaker 1: that perfectly supports that view. And that view could be

87
00:04:28,880 --> 00:04:32,920
Speaker 1: anything from extreme embarishness to extreme abolishness. Liz, you know

88
00:04:33,320 --> 00:04:35,800
Speaker 1: the flip side of where what's a good entry point

89
00:04:35,839 --> 00:04:38,240
Speaker 1: for stocks is at what point is it does it

90
00:04:38,279 --> 00:04:40,359
Speaker 1: make sense to get back into bonds. I'm looking at

91
00:04:40,400 --> 00:04:43,599
Speaker 1: a ten ure yield at two point uh. Some asset

92
00:04:43,640 --> 00:04:47,479
Speaker 1: managers have called for three ten yurared yields by the

93
00:04:47,520 --> 00:04:49,719
Speaker 1: end of this year. I mean at that level, do

94
00:04:49,760 --> 00:04:51,360
Speaker 1: you think that that would be a buy? I don't

95
00:04:51,360 --> 00:04:53,320
Speaker 1: think it should ever be a level. I don't think

96
00:04:53,360 --> 00:04:56,039
Speaker 1: investing should ever be about get in and get out.

97
00:04:56,080 --> 00:04:58,960
Speaker 1: That those are those are gambling on a moment in time,

98
00:04:58,960 --> 00:05:01,360
Speaker 1: and investing should always be a process over time. So

99
00:05:01,680 --> 00:05:04,640
Speaker 1: I would use the tried and true rules around rebalancing.

100
00:05:04,640 --> 00:05:07,720
Speaker 1: And what rebalancing does is it let your portfolio tell

101
00:05:07,720 --> 00:05:10,320
Speaker 1: you when it's time to do something. If your bond

102
00:05:10,360 --> 00:05:12,640
Speaker 1: allocation has gotten out of whack relative to what your

103
00:05:12,680 --> 00:05:14,800
Speaker 1: normal targets should be. And that's a function of your

104
00:05:14,880 --> 00:05:17,760
Speaker 1: risk tolerance and time arizing a need for income, etcetera, etcetera.

105
00:05:18,279 --> 00:05:20,680
Speaker 1: Then your portfolio tells you want to make that adjustment

106
00:05:21,000 --> 00:05:24,200
Speaker 1: to pick some arbitrary level on the yield to say

107
00:05:24,240 --> 00:05:26,960
Speaker 1: time to get back in and bonds. Again, that's gambling

108
00:05:26,960 --> 00:05:28,839
Speaker 1: on a moment in time, and investing should never be

109
00:05:28,880 --> 00:05:31,800
Speaker 1: about that. Where is this money going to come from

110
00:05:31,839 --> 00:05:35,440
Speaker 1: central banks or from actual investors? Oh? I think from

111
00:05:35,480 --> 00:05:38,400
Speaker 1: from actual investors. Keep in mind that if you look

112
00:05:38,440 --> 00:05:41,720
Speaker 1: over this entire Bowl market, retail investors have not been

113
00:05:42,200 --> 00:05:44,159
Speaker 1: very active. We talked about that as it relates to

114
00:05:44,200 --> 00:05:48,120
Speaker 1: fund flows. Hedge funds net long exposure never got much

115
00:05:48,160 --> 00:05:50,960
Speaker 1: above the low fifties in this entire Bowl market and

116
00:05:51,000 --> 00:05:52,919
Speaker 1: pass Bowl markets. You would expect that to get up

117
00:05:52,920 --> 00:05:56,320
Speaker 1: into the mid sixties. Pension funds have not Traditional pension

118
00:05:56,360 --> 00:05:58,920
Speaker 1: funds have not been big buyers. So really the only

119
00:05:58,960 --> 00:06:00,760
Speaker 1: game in town has been come. He's buying back their

120
00:06:00,760 --> 00:06:02,640
Speaker 1: own stock. In an environment where you haven't had a

121
00:06:02,760 --> 00:06:05,919
Speaker 1: robust I p O market, it's a simple supply demand.

122
00:06:06,240 --> 00:06:09,600
Speaker 1: So I think there's a lot of room for investors

123
00:06:09,680 --> 00:06:13,600
Speaker 1: of every variety of different cohorts of investors two up

124
00:06:13,640 --> 00:06:16,839
Speaker 1: their equity exposure. I wouldn't expect in a straight line,

125
00:06:16,880 --> 00:06:18,840
Speaker 1: nor what I wanted to be. I think, you know,

126
00:06:18,880 --> 00:06:21,320
Speaker 1: we started to get a sense of a melt up

127
00:06:21,680 --> 00:06:25,000
Speaker 1: until this recent consolidation phase, and is as lovely as

128
00:06:25,000 --> 00:06:28,400
Speaker 1: melt ups feel while they're happening, assuming you're long, they

129
00:06:28,440 --> 00:06:30,240
Speaker 1: don't tend to end well. So this kind of two

130
00:06:30,279 --> 00:06:32,920
Speaker 1: steps forward half a step back is actually a pattern

131
00:06:32,920 --> 00:06:36,159
Speaker 1: I would love to see continue in As you mentioned

132
00:06:36,200 --> 00:06:39,600
Speaker 1: petch funds and what they may do. Yesterday, Cowper's c

133
00:06:39,839 --> 00:06:42,239
Speaker 1: I O. Is on Bloomberg Television and he was talking

134
00:06:42,279 --> 00:06:46,160
Speaker 1: about how he was hoping to rotate about thirty billion

135
00:06:46,200 --> 00:06:49,799
Speaker 1: dollars of money that's currently managed by external managers private

136
00:06:49,800 --> 00:06:53,480
Speaker 1: equity firms, hedge funds, and make it internally managed. Do

137
00:06:53,520 --> 00:06:55,800
Speaker 1: you think that that's a good idea or and also

138
00:06:55,839 --> 00:06:57,119
Speaker 1: do you think that that's going to be a trend

139
00:06:57,240 --> 00:07:00,440
Speaker 1: that takes hold? Well, Yeah, I think it's a trend

140
00:07:00,520 --> 00:07:02,440
Speaker 1: that that has already occurred. I think you already hit

141
00:07:02,480 --> 00:07:07,839
Speaker 1: the inflection point for endowments, foundations, institutions, pension funds, that

142
00:07:08,279 --> 00:07:11,880
Speaker 1: um shifted uh for for many years over the past

143
00:07:12,320 --> 00:07:15,960
Speaker 1: decade or so, shifted significantly away from the public markets

144
00:07:15,960 --> 00:07:18,600
Speaker 1: towards the private markets, whether it was you know, hedge

145
00:07:18,600 --> 00:07:22,880
Speaker 1: funds or venture capito a private equity or or real

146
00:07:23,000 --> 00:07:26,320
Speaker 1: estate funds. But that pendulum has already started to swing back.

147
00:07:26,320 --> 00:07:28,280
Speaker 1: And in the case of hedge funds. The interesting thing

148
00:07:28,280 --> 00:07:30,400
Speaker 1: about hedge funds, there is a lot of people put

149
00:07:30,400 --> 00:07:33,760
Speaker 1: them in a category of alternative investments. Yet if if

150
00:07:33,760 --> 00:07:36,000
Speaker 1: you have an investment in a hedge fund and that

151
00:07:36,080 --> 00:07:40,560
Speaker 1: hedge fund is buying equities either on the longer short side,

152
00:07:40,960 --> 00:07:44,800
Speaker 1: that's your exposure. That's not an alternative asset. It's a

153
00:07:44,800 --> 00:07:48,880
Speaker 1: an alternative way to get exposure to the equity asset class.

154
00:07:48,920 --> 00:07:51,560
Speaker 1: So I think there's also a rethinking of how we

155
00:07:52,160 --> 00:07:55,440
Speaker 1: categorize hedge funds, and if they're purely equity, that's how

156
00:07:55,480 --> 00:07:57,720
Speaker 1: you you have to incorporate that into your equity exposure.

157
00:07:57,760 --> 00:08:01,280
Speaker 1: I think it's the fee problem, limited performance, higher fees.

158
00:08:01,360 --> 00:08:03,600
Speaker 1: That's been the real rub. Thank you so much, We're

159
00:08:03,600 --> 00:08:05,840
Speaker 1: gonna have to leave it there, unfortunately. Liz Ane Saunders,

160
00:08:05,960 --> 00:08:10,800
Speaker 1: chief investment strategies strategist at Charles Schwab and Company talking

161
00:08:10,840 --> 00:08:24,760
Speaker 1: about her outlook for this year. Well, another sort of

162
00:08:24,800 --> 00:08:28,200
Speaker 1: sad stories in the biotech industry. There's a story on

163
00:08:28,200 --> 00:08:31,240
Speaker 1: the Bloomber terminal this morning talking about the mood of

164
00:08:31,360 --> 00:08:34,360
Speaker 1: shock and disbelief at the JP Morgan Healthcare conference in

165
00:08:34,400 --> 00:08:38,079
Speaker 1: San Francisco as they listened to President elect Trump talk

166
00:08:38,280 --> 00:08:40,480
Speaker 1: about how he's going to take a hard line with

167
00:08:40,520 --> 00:08:43,199
Speaker 1: his negotiations with the pharmaceutical companies. I want to bring

168
00:08:43,200 --> 00:08:46,240
Speaker 1: in Max Neeson bloombergad Fly columnists to sort of shed

169
00:08:46,280 --> 00:08:49,520
Speaker 1: some light on why perhaps this shouldn't have come as

170
00:08:49,559 --> 00:08:52,600
Speaker 1: a surprise to these pharmaceutical executives. Max, I mean, this

171
00:08:52,720 --> 00:08:56,800
Speaker 1: is not unexpected, right, I mean you're to calumn about this, uh,

172
00:08:57,000 --> 00:09:00,319
Speaker 1: several of them in fact, Uh, it really it does

173
00:09:00,360 --> 00:09:04,239
Speaker 1: bewilder me the extent of the surprise. During the campaign,

174
00:09:04,440 --> 00:09:08,360
Speaker 1: Trump repeatedly mentioned that he wanted Medicare to be able

175
00:09:08,400 --> 00:09:12,240
Speaker 1: to negotiate drug prices and push them down. Back in December,

176
00:09:12,280 --> 00:09:15,920
Speaker 1: he made another comment about how he didn't like the

177
00:09:15,920 --> 00:09:18,680
Speaker 1: way that drug prices were going. What's really worrying for

178
00:09:18,720 --> 00:09:20,800
Speaker 1: the sector. I think I think that kind of explained

179
00:09:20,840 --> 00:09:22,840
Speaker 1: some of the extent of the reaction is the fact

180
00:09:22,840 --> 00:09:25,520
Speaker 1: that he really seems to be escalating both his rhetoric

181
00:09:25,960 --> 00:09:29,400
Speaker 1: and um to some degree, the specificity going from just

182
00:09:29,520 --> 00:09:32,120
Speaker 1: I don't like drug prices to we're gonna change the

183
00:09:32,160 --> 00:09:35,320
Speaker 1: bidding process a policy than in fact many fear that

184
00:09:35,400 --> 00:09:38,240
Speaker 1: Hillary Clinton would actually try to bring about it if

185
00:09:38,280 --> 00:09:40,440
Speaker 1: she had been elected. We're just looking at some of

186
00:09:40,440 --> 00:09:42,880
Speaker 1: the stocks today other than Mark, and we're gonna get

187
00:09:42,880 --> 00:09:45,840
Speaker 1: to that in a in a second. But Fires are

188
00:09:45,880 --> 00:09:49,400
Speaker 1: down one percent, Bristol Maris Squib down about three quarters

189
00:09:49,440 --> 00:09:51,920
Speaker 1: of a percent, Abvy is down about a quarter of

190
00:09:51,960 --> 00:09:54,800
Speaker 1: although yesterday the clients were much more severe with so

191
00:09:54,920 --> 00:09:56,880
Speaker 1: much deed, I would just like to see whether anyone said, oh,

192
00:09:56,920 --> 00:10:01,080
Speaker 1: these are bargains. Johnson and Johnson down about half, right,

193
00:10:01,240 --> 00:10:03,680
Speaker 1: of course, the Nazac Biotechnology and that's which I'm looking

194
00:10:03,679 --> 00:10:06,640
Speaker 1: at right now, down six tents of repercent, which considering

195
00:10:06,679 --> 00:10:09,480
Speaker 1: how much stocks are down today and basically in line

196
00:10:09,480 --> 00:10:12,360
Speaker 1: with the market. And that's after a three percent decline yesterday.

197
00:10:12,440 --> 00:10:14,920
Speaker 1: Although Max, how much does that due to Mark? Because

198
00:10:14,960 --> 00:10:18,200
Speaker 1: Mark shares are up. Um. Yeah, Murk is kind of

199
00:10:18,200 --> 00:10:20,560
Speaker 1: the soul out performer on the kind of a specific

200
00:10:20,559 --> 00:10:23,280
Speaker 1: piece of drug data that was so good that it

201
00:10:23,320 --> 00:10:27,200
Speaker 1: seemed to overweigh the kind of broader industry. Yeah, lung cancer,

202
00:10:27,200 --> 00:10:30,160
Speaker 1: it's actually a really huge deal for them. Um. They

203
00:10:30,160 --> 00:10:33,800
Speaker 1: have a so called immune oncology drug sort of unlawshed, unleaked,

204
00:10:33,880 --> 00:10:38,200
Speaker 1: unleashes the immune system against lung cancer. And the news

205
00:10:38,280 --> 00:10:40,679
Speaker 1: they got is that it might be approved in combination

206
00:10:40,720 --> 00:10:44,360
Speaker 1: with chemotherapy in a far broader subset of patients. Right now,

207
00:10:44,360 --> 00:10:47,199
Speaker 1: it can only be used in about of them whose

208
00:10:47,200 --> 00:10:50,760
Speaker 1: tumor as a specific mutation. If they get disapproval by May,

209
00:10:50,840 --> 00:10:52,880
Speaker 1: which is well ahead of anything competitors can hope for,

210
00:10:53,520 --> 00:10:56,199
Speaker 1: it'll be about a year ahead of expectations and massively

211
00:10:56,240 --> 00:10:59,000
Speaker 1: increase their market size. Can I just ask you a

212
00:10:59,040 --> 00:11:01,440
Speaker 1: little bit about this because you mentioned the approval process

213
00:11:01,559 --> 00:11:04,079
Speaker 1: and we have yet to hear who is going to

214
00:11:04,200 --> 00:11:07,280
Speaker 1: be the head of the Food and Drug Administration? Does

215
00:11:07,400 --> 00:11:09,959
Speaker 1: anybody that you talk to expect big changes in the

216
00:11:10,000 --> 00:11:12,280
Speaker 1: way that drugs are approved now that there's going to

217
00:11:12,360 --> 00:11:15,120
Speaker 1: be a new president. Um, there there can be a

218
00:11:15,360 --> 00:11:17,559
Speaker 1: kind of a really big swing on that depending on

219
00:11:17,640 --> 00:11:19,600
Speaker 1: who gets put in charge. There have been sort of

220
00:11:19,600 --> 00:11:23,040
Speaker 1: two names, two very different names put up. One of

221
00:11:23,080 --> 00:11:26,320
Speaker 1: whom is a former kind of Peter Theeal associate who

222
00:11:26,360 --> 00:11:28,439
Speaker 1: has some pretty I mean, I would describe them as

223
00:11:28,480 --> 00:11:30,960
Speaker 1: just wacky ideas that he's dispoused in the past on

224
00:11:31,280 --> 00:11:34,600
Speaker 1: drug development, that you should approve drugs just based on safety.

225
00:11:34,640 --> 00:11:36,480
Speaker 1: If they're saying if they don't hurt people, if they

226
00:11:36,480 --> 00:11:39,120
Speaker 1: don't hurt people, you know, is this um, you know,

227
00:11:40,000 --> 00:11:43,120
Speaker 1: we'll find that before the second who is also being concerned. Um,

228
00:11:43,240 --> 00:11:46,240
Speaker 1: it's kind of a more doctrinaire x f DA official

229
00:11:46,320 --> 00:11:48,959
Speaker 1: who just you know, he's he's a little bit more conservative,

230
00:11:49,080 --> 00:11:52,520
Speaker 1: but he's not going to dramatically shake up the kind

231
00:11:52,559 --> 00:11:54,560
Speaker 1: of way things are done. I'd imagine if he replaces

232
00:11:55,000 --> 00:11:57,760
Speaker 1: Mr Califf. How much do you think that there are

233
00:11:57,800 --> 00:12:01,079
Speaker 1: conversations going on in the back office is of pharmaceutical

234
00:12:01,120 --> 00:12:04,559
Speaker 1: companies right now about how to take back the news

235
00:12:04,559 --> 00:12:07,880
Speaker 1: cycle from President elect Trump. I mean, it seems like

236
00:12:07,920 --> 00:12:09,920
Speaker 1: all he has to say is we're going to negotiate

237
00:12:10,040 --> 00:12:12,920
Speaker 1: really hard, and and their their share is just plummet.

238
00:12:12,960 --> 00:12:16,080
Speaker 1: I mean, can they do anything to kind of take charge?

239
00:12:16,440 --> 00:12:18,960
Speaker 1: I think they absolutely can. I think you've already seen

240
00:12:19,040 --> 00:12:21,640
Speaker 1: some of these moves from a couple of companies kind

241
00:12:21,640 --> 00:12:25,920
Speaker 1: of advocating self policing self restriction on drug price increases,

242
00:12:26,200 --> 00:12:30,760
Speaker 1: notably Novo nordisk Al organ and then just yesterday ABVY

243
00:12:30,880 --> 00:12:34,040
Speaker 1: pledge to not take take only a single drug price

244
00:12:34,120 --> 00:12:36,560
Speaker 1: set of drug price increase this year and limited to

245
00:12:36,720 --> 00:12:39,600
Speaker 1: less than ten percent, which is kind of, you know,

246
00:12:39,679 --> 00:12:43,440
Speaker 1: not exactly altruistic, but definitely a step down from what

247
00:12:43,520 --> 00:12:45,960
Speaker 1: had become the industry, or of kind of bi annual

248
00:12:46,080 --> 00:12:48,880
Speaker 1: price increases in excess of ten percent. The name you're

249
00:12:49,160 --> 00:12:52,240
Speaker 1: the name you're looking for was Jim O'Neill. Jim O'Neill,

250
00:12:52,600 --> 00:12:57,199
Speaker 1: who is at the event at the capital management firm

251
00:12:57,240 --> 00:13:00,880
Speaker 1: a Mithral Capital, which was founded by, as you said,

252
00:13:00,880 --> 00:13:04,719
Speaker 1: Peter Tildy, once a founder of PayPal and one of

253
00:13:04,760 --> 00:13:07,760
Speaker 1: the backers of Facebook. Yeah, that's the name. And and

254
00:13:07,840 --> 00:13:11,600
Speaker 1: also another tick on his resumes he's a member of

255
00:13:11,640 --> 00:13:15,000
Speaker 1: the board of the C Studying Institute, which are libertarians

256
00:13:15,040 --> 00:13:18,160
Speaker 1: C platforms, which kind of dovetails with his view on

257
00:13:18,240 --> 00:13:21,920
Speaker 1: the approvability of drugs and liberty libertarian fashion. And just

258
00:13:22,000 --> 00:13:24,959
Speaker 1: to close the loop on Murk and their lung cancer drug.

259
00:13:25,400 --> 00:13:28,840
Speaker 1: Lung cancer is the leading cause of cancer death in

260
00:13:28,920 --> 00:13:33,080
Speaker 1: both men and women in the United States and worldwide

261
00:13:33,320 --> 00:13:35,760
Speaker 1: specifically China. China has got a very big problem well

262
00:13:35,760 --> 00:13:37,800
Speaker 1: and in the United In the United States, lung cancer

263
00:13:37,840 --> 00:13:41,000
Speaker 1: is responsible for thirty percent of cancer deaths. This is

264
00:13:41,080 --> 00:13:45,199
Speaker 1: more than breast cancer, colon cancer, and prostact cancer combined.

265
00:13:45,720 --> 00:13:48,400
Speaker 1: About a hundred and fifty five thousand people die each

266
00:13:48,480 --> 00:13:49,960
Speaker 1: year from lung cancer, So that would be a big

267
00:13:50,000 --> 00:13:54,080
Speaker 1: breakthrough from Mark really well be huge market. Thanks very much, mcknean,

268
00:13:54,520 --> 00:14:08,920
Speaker 1: gad Fly expert in pharma. We've been hearing a lot

269
00:14:08,960 --> 00:14:12,160
Speaker 1: about how the Senate is currently talking about repealing and

270
00:14:12,240 --> 00:14:16,600
Speaker 1: voting to repeal Obamacare, but what exactly is going to

271
00:14:17,000 --> 00:14:19,240
Speaker 1: replace it? I want to bring in. Brian Ry, senior

272
00:14:19,280 --> 00:14:23,320
Speaker 1: healthcare policy analyst for Bloomberg Intelligence, has been closely following

273
00:14:23,800 --> 00:14:27,760
Speaker 1: the proceedings in Congress. Brian, I hear a lot about

274
00:14:27,800 --> 00:14:32,760
Speaker 1: the repeal of Obamacare. What exactly is Congress can replace

275
00:14:32,760 --> 00:14:35,840
Speaker 1: it with. I guess that's the key question that everyone's

276
00:14:35,840 --> 00:14:37,880
Speaker 1: grappling with, and the fact that they haven't come forward

277
00:14:37,920 --> 00:14:41,400
Speaker 1: with a single plan that everyone supported underscores how difficult

278
00:14:41,400 --> 00:14:43,680
Speaker 1: the question that is. I think you know, broadly speaking,

279
00:14:43,680 --> 00:14:45,600
Speaker 1: what Republicans want to do is what a lot of

280
00:14:45,600 --> 00:14:48,000
Speaker 1: politicians want to do, and that's keep the parts of

281
00:14:48,000 --> 00:14:50,720
Speaker 1: the plan that are popular and eliminate those that aren't.

282
00:14:50,840 --> 00:14:52,560
Speaker 1: Of course, that's easier said than done. So what I

283
00:14:52,560 --> 00:14:55,120
Speaker 1: think they want to replace it with is a system

284
00:14:55,200 --> 00:14:58,000
Speaker 1: that allows for more choice. I think they want to

285
00:14:58,040 --> 00:15:00,840
Speaker 1: combine a combination of uh, some plans that are have

286
00:15:01,280 --> 00:15:04,800
Speaker 1: lower premiums but higher deductible, sort of the catastrophic plans

287
00:15:04,800 --> 00:15:06,640
Speaker 1: that right now don't meet a lot of the essential

288
00:15:06,640 --> 00:15:10,920
Speaker 1: benefit requirements under the c A or under Obamacare, but

289
00:15:10,960 --> 00:15:12,880
Speaker 1: are lower premium And they want to do that to

290
00:15:12,920 --> 00:15:14,720
Speaker 1: try and draw in a lot of the younger, healthier

291
00:15:14,760 --> 00:15:18,360
Speaker 1: people that right now are aren't enrolling in sufficient numbers

292
00:15:18,560 --> 00:15:21,280
Speaker 1: to make the risk pools profitable for insurers. You've seen

293
00:15:21,320 --> 00:15:22,800
Speaker 1: a lot of insurers they're going to pull out of

294
00:15:22,800 --> 00:15:26,119
Speaker 1: the exchanges. I think that's the trend that the Republicans

295
00:15:26,120 --> 00:15:29,320
Speaker 1: are trying to reverse. Brian, I'm gonna ask you about

296
00:15:29,320 --> 00:15:32,480
Speaker 1: something much more sort of day to day. You know

297
00:15:32,560 --> 00:15:36,280
Speaker 1: those signs that are posted in restaurants showing the calorie count.

298
00:15:37,280 --> 00:15:40,040
Speaker 1: I believe restaurants that have more than twenty locations they

299
00:15:40,040 --> 00:15:42,280
Speaker 1: were required under the A c I to post this

300
00:15:42,440 --> 00:15:47,280
Speaker 1: nutritional information. Are things like that going to go away? Uh?

301
00:15:47,760 --> 00:15:49,400
Speaker 1: If they are, it's probably not going to be as

302
00:15:49,400 --> 00:15:52,200
Speaker 1: part of this process, um and uh. And so that

303
00:15:52,200 --> 00:15:55,160
Speaker 1: that's something that again, you know, they may direct uh

304
00:15:55,280 --> 00:15:58,280
Speaker 1: there the new administration under the FDA, for example, to

305
00:15:58,400 --> 00:16:01,480
Speaker 1: either withdraw that guid insto issue updated guidance that that

306
00:16:01,600 --> 00:16:03,640
Speaker 1: does that. But that's probably not going to be part

307
00:16:03,640 --> 00:16:05,880
Speaker 1: of what Congress is doing right now. And that's simply

308
00:16:05,920 --> 00:16:10,320
Speaker 1: because to avoid a Senate filibuster, recognizing the math problem

309
00:16:10,360 --> 00:16:14,160
Speaker 1: that Republicans have fifty two votes and not sixty. Um,

310
00:16:14,320 --> 00:16:17,520
Speaker 1: they're using this budget reconciliation process, and that restricts the

311
00:16:17,560 --> 00:16:20,200
Speaker 1: things that they can really target under this repeal effort,

312
00:16:20,440 --> 00:16:23,840
Speaker 1: the things that are only budget related, so taxes, penalties,

313
00:16:23,880 --> 00:16:27,040
Speaker 1: and medicaid expansion, anything involving federal funding. But a lot

314
00:16:27,080 --> 00:16:29,240
Speaker 1: of those regulations, such as the one you just referenced,

315
00:16:29,320 --> 00:16:32,640
Speaker 1: uh with the menu menus and calories, that's something that

316
00:16:32,680 --> 00:16:36,000
Speaker 1: would have to be addressed separately. Brian. Let's say this

317
00:16:36,520 --> 00:16:41,240
Speaker 1: repeal of Obamacare does pass the Senate. What happens then,

318
00:16:42,400 --> 00:16:44,400
Speaker 1: So where we are now is they've last night they

319
00:16:44,440 --> 00:16:48,000
Speaker 1: Senate essentially passed UM. What would be a blueprint that

320
00:16:48,040 --> 00:16:51,360
Speaker 1: would authorize various committees to then come up and craft

321
00:16:51,680 --> 00:16:54,320
Speaker 1: a repeal bill that has to go to the House. Now,

322
00:16:54,360 --> 00:16:57,160
Speaker 1: they're going to probably address that either tomorrow or over

323
00:16:57,200 --> 00:16:59,640
Speaker 1: the weekend, and then a couple of committees in each

324
00:16:59,680 --> 00:17:01,200
Speaker 1: the sent it in the House would then go to

325
00:17:01,200 --> 00:17:04,119
Speaker 1: work and craft language saying, Okay, we're going to repeal

326
00:17:04,520 --> 00:17:07,399
Speaker 1: these taxes, were going to repeal these mandates, repeal the

327
00:17:07,400 --> 00:17:10,840
Speaker 1: penalties for not buying A c A compliant insurance, those things,

328
00:17:10,840 --> 00:17:12,760
Speaker 1: and then in a matter of weeks come back with that.

329
00:17:12,880 --> 00:17:15,679
Speaker 1: But back to the original question. At the same time,

330
00:17:15,800 --> 00:17:18,440
Speaker 1: you know, President elect Trump and a growing number of

331
00:17:18,440 --> 00:17:21,120
Speaker 1: Republicans said, what, we also want to have a bill

332
00:17:21,200 --> 00:17:24,080
Speaker 1: specifying what we would replace it with in place at

333
00:17:24,080 --> 00:17:26,679
Speaker 1: the same time to make this simultaneous. If they're going

334
00:17:26,680 --> 00:17:28,760
Speaker 1: to try and do that, then this process will probably

335
00:17:28,800 --> 00:17:31,320
Speaker 1: bog down and they'll have to delay the repeal effort

336
00:17:31,320 --> 00:17:33,520
Speaker 1: while they wait for the replace effort to catch up.

337
00:17:34,320 --> 00:17:37,159
Speaker 1: This is maybe tangential to the issue of the A

338
00:17:37,320 --> 00:17:42,440
Speaker 1: c A. But haven't the lawmakers in Washington taken aim

339
00:17:42,480 --> 00:17:49,240
Speaker 1: at the use of human fetal tissue cells for scientific research?

340
00:17:50,359 --> 00:17:52,120
Speaker 1: They have, and you know there there are a few

341
00:17:52,160 --> 00:17:55,560
Speaker 1: different things and sort of tangential to that is part

342
00:17:55,560 --> 00:17:58,920
Speaker 1: of this repeal process. Speaker Paul Ryan has said that, UM,

343
00:17:59,040 --> 00:18:01,520
Speaker 1: they'd like to include, you know, removing federal funding for

344
00:18:01,560 --> 00:18:05,120
Speaker 1: planned parenthood for example, and UM and that could potentially

345
00:18:05,119 --> 00:18:08,800
Speaker 1: complicates their efforts to pass the repeal BI Also, you know,

346
00:18:08,920 --> 00:18:10,640
Speaker 1: lots of moving parts. But you're right, and I think

347
00:18:10,640 --> 00:18:13,560
Speaker 1: Republicans who have been targeting UH those type of provisions

348
00:18:13,600 --> 00:18:15,600
Speaker 1: for a while feel like that would say Republican in

349
00:18:15,640 --> 00:18:18,800
Speaker 1: the White House and Republicans retain a control of both chambers,

350
00:18:18,800 --> 00:18:21,359
Speaker 1: that this is their best chance to advance provisions like that.

351
00:18:21,520 --> 00:18:23,600
Speaker 1: And it'sn't one of the ideas with the repeal of

352
00:18:23,600 --> 00:18:27,440
Speaker 1: Obamacare that states would get less federal funding for medicaid

353
00:18:27,480 --> 00:18:29,960
Speaker 1: as part of this UH and would compel them to

354
00:18:30,160 --> 00:18:32,760
Speaker 1: negotiate take a harder line with drug companies. Is that

355
00:18:32,760 --> 00:18:34,760
Speaker 1: sort of the idea? You know, it could, So there's

356
00:18:34,760 --> 00:18:37,080
Speaker 1: two different things there. You know, they could repeal the

357
00:18:37,320 --> 00:18:39,800
Speaker 1: medicaid expansion that was part of the A C A

358
00:18:40,240 --> 00:18:42,359
Speaker 1: or you know, maybe have a compromise and leave it

359
00:18:42,440 --> 00:18:43,919
Speaker 1: up to the states saying if you want to keep it,

360
00:18:43,960 --> 00:18:47,000
Speaker 1: you can if not you don't necessarily have to, um,

361
00:18:47,040 --> 00:18:49,639
Speaker 1: but what they like to do. I think Paul Ryan's

362
00:18:49,720 --> 00:18:53,639
Speaker 1: vision is to essentially convert medicaid in the block grant program,

363
00:18:53,640 --> 00:18:56,440
Speaker 1: where we the federal government will give each state pool

364
00:18:56,440 --> 00:18:58,480
Speaker 1: of money UM to do with as they see fit

365
00:18:58,760 --> 00:19:01,720
Speaker 1: and uh and designed to own medicaid plans with that.

366
00:19:01,960 --> 00:19:04,600
Speaker 1: That's a harder sell on the drug pricing front. UM.

367
00:19:04,760 --> 00:19:07,320
Speaker 1: You know, we'll see what Trump's pick a for HHS

368
00:19:07,359 --> 00:19:10,520
Speaker 1: Secretary Tom Prices next weekend. We gotta run. Thanks very much,

369
00:19:10,520 --> 00:19:12,440
Speaker 1: Brian Ryan. Are you gonna be following this for us?

370
00:19:12,520 --> 00:19:28,040
Speaker 1: Our senior healthcare policy analyst for the Bloomberg Intelligence Government team.

371
00:19:28,040 --> 00:19:31,320
Speaker 1: Will Apple become the next HBO? Well, it looks like

372
00:19:31,320 --> 00:19:33,439
Speaker 1: they're gonna try. I want to bring in John Petreats,

373
00:19:33,680 --> 00:19:37,440
Speaker 1: managing director and portfolio manager at Point View Wealth Management,

374
00:19:37,440 --> 00:19:39,920
Speaker 1: to give some context to the news that we got

375
00:19:40,160 --> 00:19:44,080
Speaker 1: uh this morning by the Wall Street Journal that Apple

376
00:19:44,240 --> 00:19:49,760
Speaker 1: is planning to create new original television content for its

377
00:19:49,960 --> 00:19:54,240
Speaker 1: music subscribers. So John, Uh, first of all, what's your

378
00:19:54,240 --> 00:19:56,760
Speaker 1: take on what their plan is to do as far

379
00:19:56,800 --> 00:19:59,639
Speaker 1: as creating original content? Well, first of all, thanks for

380
00:19:59,680 --> 00:20:01,960
Speaker 1: having me on. I gives my first point would be, well,

381
00:20:02,000 --> 00:20:05,080
Speaker 1: it's about time. Um, when you're a six hundred and

382
00:20:05,119 --> 00:20:09,399
Speaker 1: fifty billion dollar company, it's really hard to sell a

383
00:20:09,440 --> 00:20:12,359
Speaker 1: lot of cool widgets to grow the top line, you

384
00:20:12,440 --> 00:20:15,040
Speaker 1: have to move into some sort of subscription type of

385
00:20:15,080 --> 00:20:18,720
Speaker 1: business model in order to grow, because it's just, you know,

386
00:20:18,840 --> 00:20:21,399
Speaker 1: you just can't. The margins on the hardware business just

387
00:20:21,440 --> 00:20:24,400
Speaker 1: get compressed, and it's just it's very difficult to reinvent

388
00:20:24,480 --> 00:20:28,440
Speaker 1: and sell new items. So the fact that they're finally

389
00:20:28,480 --> 00:20:33,200
Speaker 1: catching up or going after Amazon, Netflix, Hulu, understanding that

390
00:20:33,840 --> 00:20:36,520
Speaker 1: through the Apple TV, which is a portal for them,

391
00:20:36,760 --> 00:20:39,680
Speaker 1: they can create this original content or with the cash

392
00:20:39,680 --> 00:20:43,160
Speaker 1: where they have buy content and set up some sort

393
00:20:43,160 --> 00:20:45,960
Speaker 1: of scription subscription model where you and I pay Apple

394
00:20:46,240 --> 00:20:49,280
Speaker 1: you know, ten nine a month and get all this content.

395
00:20:49,680 --> 00:20:52,119
Speaker 1: So I think it's it's it's a great move for

396
00:20:52,280 --> 00:20:55,840
Speaker 1: a huge company that needs to change their business model.

397
00:20:56,080 --> 00:20:58,320
Speaker 1: You know, it's interesting that you talked about, you highlighted

398
00:20:58,359 --> 00:21:00,879
Speaker 1: that they might buy content, and I mean the content

399
00:21:00,960 --> 00:21:03,760
Speaker 1: world right now is incredibly crowded. You've got you know,

400
00:21:03,840 --> 00:21:07,840
Speaker 1: you mentioned yourself, Netflix, Hulu, Hbo, itself. I mean everyone

401
00:21:07,920 --> 00:21:11,199
Speaker 1: is sort of focusing on content. Are you expecting some

402
00:21:11,280 --> 00:21:14,680
Speaker 1: kind of consolidation and if so, who might Apple look

403
00:21:14,800 --> 00:21:18,480
Speaker 1: to purchase. Yeah, it's a good idea, it's a it's

404
00:21:18,520 --> 00:21:21,320
Speaker 1: a good question. I think they're going to go along

405
00:21:21,359 --> 00:21:25,480
Speaker 1: the route of building out their own original content. They

406
00:21:25,480 --> 00:21:29,000
Speaker 1: may not acquire companies, but they may acquire a very

407
00:21:29,080 --> 00:21:32,000
Speaker 1: creative smart people. Look what they did with Beats by

408
00:21:32,040 --> 00:21:35,480
Speaker 1: bringing on Jimmy Iovine and Dr dre Um to build

409
00:21:35,520 --> 00:21:38,280
Speaker 1: out on the music platform. So maybe they bring on

410
00:21:38,440 --> 00:21:42,800
Speaker 1: board really smart people to who are very creative to

411
00:21:42,920 --> 00:21:46,159
Speaker 1: do their original content. You know, a Viacom is a

412
00:21:46,200 --> 00:21:49,640
Speaker 1: company out there that has a tremendous amount of content

413
00:21:49,720 --> 00:21:55,040
Speaker 1: that's being undervalued. They have paramount studios, they own MTV, Nickelodeon,

414
00:21:55,160 --> 00:21:57,800
Speaker 1: and all the other sorts that that that the market

415
00:21:57,880 --> 00:22:01,240
Speaker 1: is thinking traditional TV and a cable model is dead.

416
00:22:01,640 --> 00:22:04,239
Speaker 1: So you know, maybe there's someone like that where they

417
00:22:04,240 --> 00:22:06,159
Speaker 1: can go up and pick up on the cheap. But

418
00:22:06,280 --> 00:22:09,200
Speaker 1: I think Apple's first route is going to be um

419
00:22:09,480 --> 00:22:12,280
Speaker 1: doing it on their own and maybe hiring and spending

420
00:22:12,280 --> 00:22:14,600
Speaker 1: a lot of money on really smart people that come

421
00:22:14,600 --> 00:22:17,160
Speaker 1: out and build it on their own. But John, isn't

422
00:22:17,200 --> 00:22:21,600
Speaker 1: the Walk of Fame littered with those efforts to become

423
00:22:21,840 --> 00:22:25,320
Speaker 1: a content producer, whether it is in the movie industry,

424
00:22:25,359 --> 00:22:29,359
Speaker 1: television industry. Is there an example of a company that

425
00:22:29,520 --> 00:22:32,879
Speaker 1: formally was not in the business that just flipped the

426
00:22:32,920 --> 00:22:36,000
Speaker 1: switch and was successful at it. I mean Amazon is

427
00:22:36,000 --> 00:22:39,280
Speaker 1: a perfect example, right. I mean, Amazon, who build this

428
00:22:39,520 --> 00:22:43,520
Speaker 1: entire bread and butter off the e commerce distribution platform

429
00:22:43,600 --> 00:22:47,120
Speaker 1: and then through the fire Stick, has decided to build

430
00:22:47,119 --> 00:22:50,159
Speaker 1: out its own content. And now as prime members, you

431
00:22:50,240 --> 00:22:54,480
Speaker 1: get access to all that through the through the fire Stick,

432
00:22:54,560 --> 00:22:56,879
Speaker 1: and you get X to all of Amazon's original content

433
00:22:56,920 --> 00:22:59,440
Speaker 1: within But do we know about that Amazon actually makes

434
00:22:59,440 --> 00:23:02,280
Speaker 1: a profit on all that content. If you take away

435
00:23:02,320 --> 00:23:08,000
Speaker 1: that prime subscriber, well that's a different story. Well, I

436
00:23:08,000 --> 00:23:11,160
Speaker 1: mean the goal supposedly is to actually make money, right, Yeah,

437
00:23:11,680 --> 00:23:13,639
Speaker 1: if there's ways to do it though, I mean Apple,

438
00:23:14,080 --> 00:23:18,760
Speaker 1: if the Apple can bundle right a a content subscription

439
00:23:19,119 --> 00:23:22,000
Speaker 1: with its music and then add in features of hey,

440
00:23:22,200 --> 00:23:25,600
Speaker 1: you know, we'll throw in extra storage on iCloud. I mean,

441
00:23:25,600 --> 00:23:28,040
Speaker 1: there's a lot of other ways to bundle in content

442
00:23:28,119 --> 00:23:31,960
Speaker 1: where a user, um, where maybe Apple is not maximizing

443
00:23:32,000 --> 00:23:34,600
Speaker 1: each individual user of an iPhone or an eye watch

444
00:23:35,200 --> 00:23:39,639
Speaker 1: effectively um to get more juice from the Lemon, so

445
00:23:39,880 --> 00:23:43,160
Speaker 1: I think and again, this is not a very capital

446
00:23:43,200 --> 00:23:46,119
Speaker 1: intensive type of build out. Think about the other projects

447
00:23:46,119 --> 00:23:47,920
Speaker 1: that have been thrown out that Apple may get into it,

448
00:23:48,000 --> 00:23:50,920
Speaker 1: such as cars, and I was never a believer into

449
00:23:51,040 --> 00:23:54,159
Speaker 1: the car model. But good luck in terms of building

450
00:23:54,160 --> 00:23:57,960
Speaker 1: on manufacturing facilities dealing with unions for auto workers. I

451
00:23:57,960 --> 00:24:01,040
Speaker 1: mean that was a capital intensive venture that people are

452
00:24:01,040 --> 00:24:03,360
Speaker 1: trying to throw out there. If Apple would compete with Tesla,

453
00:24:03,680 --> 00:24:05,440
Speaker 1: that I just didn't think make it any sense at all.

454
00:24:06,560 --> 00:24:08,199
Speaker 1: What's the key audience do you think that they're going

455
00:24:08,200 --> 00:24:10,919
Speaker 1: to try to target here? Well? I think clearly the

456
00:24:10,960 --> 00:24:14,760
Speaker 1: millennials are changing the way the way they view TV.

457
00:24:14,920 --> 00:24:17,320
Speaker 1: I mean, my kids are nine and a half and

458
00:24:17,400 --> 00:24:20,560
Speaker 1: six and a half and they probably watch more YouTube

459
00:24:20,560 --> 00:24:24,200
Speaker 1: and Netflix than when they're allowed to watch TV than

460
00:24:24,560 --> 00:24:27,560
Speaker 1: anything else. Um, they don't even know. They don't have

461
00:24:27,600 --> 00:24:30,359
Speaker 1: any uh you know, they're not they're not tied to

462
00:24:30,440 --> 00:24:33,320
Speaker 1: the traditional TV model that say you and I were

463
00:24:33,359 --> 00:24:36,440
Speaker 1: all brought up with. So the idea of you can

464
00:24:36,520 --> 00:24:39,600
Speaker 1: watch what you want when you want. An Apple has

465
00:24:39,680 --> 00:24:42,720
Speaker 1: the key here is Apple has the I t V platform, right,

466
00:24:42,720 --> 00:24:45,320
Speaker 1: you have that portal where you could download apps and

467
00:24:45,359 --> 00:24:47,560
Speaker 1: it could work seamlessly with all of your other Apple

468
00:24:47,600 --> 00:24:49,679
Speaker 1: devices and have your pictures on there in your music.

469
00:24:50,200 --> 00:24:53,359
Speaker 1: So by doing this, I think it's one of the

470
00:24:53,440 --> 00:24:58,439
Speaker 1: key ingredients to capturing UM The entire UH end users

471
00:24:58,760 --> 00:25:01,959
Speaker 1: UH media have Thanks very much for being with us.

472
00:25:02,040 --> 00:25:05,600
Speaker 1: John Patritis is a Managing director portfolio manager Point of

473
00:25:05,680 --> 00:25:09,560
Speaker 1: View Wealth Management based in Summit, New Jersey, speaking about

474
00:25:09,600 --> 00:25:13,080
Speaker 1: Apple and its potential to get into the content business.

475
00:25:19,000 --> 00:25:21,440
Speaker 1: Thanks for listening to the Bloomberg P and L podcast.

476
00:25:21,800 --> 00:25:25,600
Speaker 1: You can subscribe and listen to interviews at iTunes, SoundCloud,

477
00:25:25,800 --> 00:25:30,000
Speaker 1: or whatever podcast platform you prefer. I'm pim Fox. I'm

478
00:25:30,000 --> 00:25:32,960
Speaker 1: out there on Twitter at pim Fox. I'm out there

479
00:25:32,960 --> 00:25:36,280
Speaker 1: on Twitter at Lisa Abramo. It's one before the podcast.

480
00:25:36,280 --> 00:25:39,000
Speaker 1: You can always catch us worldwide on Bloomberg Radio.