WEBVTT - Small Business Survival Guide 0:00:00.720 --> 0:00:03.720 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:03.800 --> 0:00:06.320 Jason Kelly. We're right here every day bringing you the 0:00:06.400 --> 0:00:11.160 latest news from the world's of business and finance, plus technology, politics, economics, 0:00:11.240 --> 0:00:14.280 all harnessing the power of Business Week reporters and editors, 0:00:14.440 --> 0:00:16.439 and of course Carol that's part of a team of 0:00:16.520 --> 0:00:20.439 twenty seven hundred journalists and analysts more than a hundred 0:00:20.480 --> 0:00:23.240 and twenty countries and Jason. You can download Bloomberg Business 0:00:23.280 --> 0:00:26.239 Week on iTunes, SoundCloud, bl Bloomberg dot com. You can 0:00:26.280 --> 0:00:28.640 also listen to our radio show at two pm Eastern 0:00:28.680 --> 0:00:31.560 on Bloomberg Radio every weekday, or watch us on YouTube 0:00:31.600 --> 0:00:36.240 by searching Bloomberg Global News. This story is the most 0:00:36.280 --> 0:00:39.240 read on the Bloomberg in the past one hour, and 0:00:39.440 --> 0:00:41.720 it talks about the CDC. It talks about a warning 0:00:41.800 --> 0:00:45.279 it is not though, specifically about the coronavirus. Let's get 0:00:45.320 --> 0:00:49.000 into the details. Bloomberg News senior medical reporter Michelle Cortez 0:00:49.200 --> 0:00:51.000 is back with us, She joins us on the phone 0:00:51.000 --> 0:00:53.479 from Minneapolis. I have to say, Michelle, I was like 0:00:53.600 --> 0:00:56.040 quick scanning and I'm like, wait, what is this about? 0:00:57.360 --> 0:01:01.840 Right exactly as I couldn't get any parrel. It's horrible. 0:01:02.200 --> 0:01:05.520 But there is a virus who seems to be sweeping 0:01:05.560 --> 0:01:09.039 through the US and the world in fact, every other year, 0:01:09.480 --> 0:01:12.240 and it happens. It starts increasing picking up in August 0:01:12.240 --> 0:01:15.240 and runs through November, and it leaves in its wake 0:01:15.400 --> 0:01:19.959 paralysis and effects mainly children average age of five. And 0:01:20.000 --> 0:01:23.360 so the CDC is saying, hey, it's August. It happens 0:01:23.360 --> 0:01:27.000 every even year. Is an even year. So if you 0:01:27.080 --> 0:01:30.199 have children and they start complaining that their arm doesn't 0:01:30.240 --> 0:01:33.000 feel strong or their legs are suffering a little bit, 0:01:33.160 --> 0:01:35.640 especially if they've had, you know, a little bit of 0:01:35.680 --> 0:01:39.120 a cough for a fever a few days ahead beyond 0:01:39.160 --> 0:01:42.440 the lookout for that. What is it called. It's called 0:01:42.480 --> 0:01:47.160 acute flaccid militis. People call it like a polio like syndrome, 0:01:47.400 --> 0:01:51.840 but it's not polio. They have looked for the cause 0:01:51.920 --> 0:01:53.920 of this and they haven't been able to identify it. 0:01:54.120 --> 0:01:56.840 There is not polio in these kids, and so we 0:01:56.920 --> 0:01:58.880 know that that's not what it is. They think it's 0:01:58.920 --> 0:02:02.760 an enterovirus. It's called N six eight, and they see 0:02:02.960 --> 0:02:06.680 higher levels of that viral infection, but it's hard to 0:02:06.720 --> 0:02:10.240 catch because as we're seeing what's testing with coronavirus. It's 0:02:10.280 --> 0:02:12.640 just difficult to catch it right. So what there. It's 0:02:12.680 --> 0:02:14.840 kind of a warning to parent, especially amid with everything 0:02:14.880 --> 0:02:17.240 else that's going on, and it's very important that you 0:02:17.280 --> 0:02:20.680 do kind of catch it early correct exactly. So the 0:02:20.680 --> 0:02:24.640 thing is, unfortunately for kids who start showing the signs 0:02:24.680 --> 0:02:28.960 of muscle weakness and paralysis, many of them actually don't 0:02:29.040 --> 0:02:31.640 fully recover from it. There have been very rare cases 0:02:31.639 --> 0:02:35.040 of death, but there is this paralysis that can persist. 0:02:35.400 --> 0:02:38.359 So they want to get kids treated right away so 0:02:38.400 --> 0:02:40.800 that they can do an m r I, figure out 0:02:40.880 --> 0:02:43.240 if there is something in their central nervous system that's 0:02:43.280 --> 0:02:48.040 causing it, and start immediately rehabilitation efforts and things to 0:02:48.120 --> 0:02:50.640 keep their muscles strong so that what they don't lose 0:02:50.680 --> 0:02:53.600 they will continue to be able to use. Going forward, 0:02:54.680 --> 0:02:57.160 No go ahead, no no, no, you please finish. So 0:02:57.280 --> 0:02:59.720 the the what they're worried about is that parents are 0:02:59.720 --> 0:03:01.960 going to say, oh, you know, he did have a 0:03:01.960 --> 0:03:04.240 little bit of a fever, but he's feeling better now. 0:03:04.320 --> 0:03:08.080 He's complaining that his armor's legs bothering him. But coronavirus 0:03:08.160 --> 0:03:09.880 is out there. We don't want to go to the doctor. 0:03:09.919 --> 0:03:12.280 We don't want to go to the hospital because we're 0:03:12.320 --> 0:03:14.480 afraid that it's going to get worse, and maybe we're 0:03:14.520 --> 0:03:16.840 just watching to see if he gets better, and the 0:03:16.919 --> 0:03:21.160 proasis can happen just in hours. So it's very important 0:03:21.160 --> 0:03:23.280 if that's what you're seeing in your child to call 0:03:23.360 --> 0:03:26.040 your doctor, go to the emergency. It's terrifying your story. 0:03:26.080 --> 0:03:28.840 You mentioned at the average age was five, I mean, 0:03:29.000 --> 0:03:33.080 and and the cases have been rising correctly, right, correct, Yeah, 0:03:33.120 --> 0:03:35.080 they have been rising. But it's also important to remember 0:03:35.160 --> 0:03:38.040 that it's very very rare and of course, probably the 0:03:38.160 --> 0:03:40.800 vast majority of people who get this enter of virus 0:03:41.160 --> 0:03:45.440 don't have any complications at all. Right, it's probably thousands 0:03:45.480 --> 0:03:47.680 and thousands of people who get it, and the numbers 0:03:47.720 --> 0:03:50.040 were talking about are less than two hundred and fifty, 0:03:51.480 --> 0:03:54.880 so the numbers are are small. But it started, we 0:03:54.960 --> 0:03:58.800 started seeing this significant increase in there were a hundred 0:03:58.800 --> 0:04:01.840 and twenty cases and twenty fourteen, and that it increased 0:04:01.840 --> 0:04:05.520 in we were up to two d and in thirty 0:04:05.560 --> 0:04:10.400 eight or so in nineteen. Now now we have seen 0:04:10.520 --> 0:04:14.200 already even before August began, sixteen cases so far this year. 0:04:14.640 --> 0:04:17.599 So yeah, so we're seeing a lot. You know, I don't. 0:04:17.640 --> 0:04:19.599 I'm not a dark person, Michelle, but I gotta say 0:04:19.640 --> 0:04:22.599 that there's something with viruses and viral infections. It feels 0:04:22.640 --> 0:04:25.640 like we're seeing a lot more and a lot more 0:04:25.839 --> 0:04:31.560 that are, you know, very difficult to overcome. That's that's 0:04:31.680 --> 0:04:35.120 very true. And this is affecting kids, coronavirus and affecting 0:04:35.200 --> 0:04:38.560 older people. Influenza is just around the corner of that 0:04:38.720 --> 0:04:42.920 hits everybody. Uh yeah. The good thing is Carol social distancing, 0:04:43.040 --> 0:04:45.320 wearing a mask. It protects against all of these things. 0:04:45.480 --> 0:04:47.320 Isn't it amazing that I feel like there was so 0:04:47.400 --> 0:04:49.520 much pushback and now we've got kind of everyone. I 0:04:49.520 --> 0:04:51.560 mean the medical you know, you go to CDC and 0:04:51.600 --> 0:04:54.799 you go to various medical websites. They explain why masks 0:04:54.800 --> 0:04:56.760 makes sense. It's so simple, but it really does make 0:04:56.800 --> 0:05:01.080 a difference. It really does, all right, Michelle, one more 0:05:01.120 --> 0:05:04.560 thing for us to worry about, all right, but we 0:05:04.600 --> 0:05:07.400 appreciate it. Um, Michelle, Thank you so much. Michelle Cortez, 0:05:07.400 --> 0:05:11.000 she's our our senior medical reporter at Bloomberg News joining 0:05:11.040 --> 0:05:12.880 us from Minneapolis. Check out her story and I'll put 0:05:12.920 --> 0:05:15.480 it out on Twitter. It is indeed the most read 0:05:15.480 --> 0:05:19.080 story on the Bloomberg in the past sixty minutes. This story, too, 0:05:19.320 --> 0:05:22.560 among our most read on the Bloomberg. This Bloomberg Business 0:05:22.600 --> 0:05:25.479 Week story. It's about the London traders that hit a 0:05:25.640 --> 0:05:28.400 half a billion dollar jackpot when the price of oil 0:05:28.400 --> 0:05:31.080 went negative. Remember that story back in April. Well, Liam 0:05:31.160 --> 0:05:35.120 Vaughan is a financial investigations reporter at Bloomberg News. He 0:05:35.240 --> 0:05:39.160 joins us on the phone from London along with Bloomberg 0:05:39.200 --> 0:05:40.760 Business wee get or Joel Webber. He's on the phone 0:05:40.760 --> 0:05:44.080 in Massachusetts. Um, Joel, you know this is you know, 0:05:44.120 --> 0:05:46.200 about being a guest on the right side of the 0:05:46.240 --> 0:05:49.960 trade or just making a really really smart bet. Yeah, 0:05:50.040 --> 0:05:52.520 I mean it looked like this. The day that oil 0:05:52.560 --> 0:05:56.560 went negative was one that, um, you know, people were 0:05:56.560 --> 0:05:59.440 not really prepared for it, and you know, just bite 0:05:59.480 --> 0:06:01.400 a couple of more innings from CEM that it was 0:06:01.440 --> 0:06:05.039 a might have been a possibility when it happened, I 0:06:05.120 --> 0:06:08.760 just think it took a lot of people by a surprise. Um, 0:06:08.839 --> 0:06:12.880 But you know, I guess there's a couple of people 0:06:12.880 --> 0:06:15.400 in the world who could have been prepared for it. 0:06:15.560 --> 0:06:19.120 And that's sort of what Liam managed to unearth with 0:06:19.200 --> 0:06:25.800 this firm um little known in London called Vega and 0:06:25.800 --> 0:06:29.000 and Liam bring you in here. What did you discover 0:06:29.080 --> 0:06:34.240 about how they how they pulled this off. Yes, so 0:06:36.200 --> 0:06:40.000 there was a lot of speculation asked April twenty three 0:06:41.000 --> 0:06:46.279 about how exactly oil has fallen as far as it did. Like, 0:06:46.400 --> 0:06:49.320 as you say, there was some expectations because there was 0:06:49.360 --> 0:06:51.640 no demand for oil at the moment. You know, nobody's 0:06:51.720 --> 0:06:55.239 driving anywhere and nobody's making much. So you know, there's 0:06:55.279 --> 0:06:58.560 this kind of very unusual technical circumstances why you'd expect 0:06:58.560 --> 0:07:01.840 oil to be very cheap. But nobody really predicted it 0:07:01.839 --> 0:07:03.400 would go as far as he did. I mean, it 0:07:03.440 --> 0:07:06.560 literally fell forty dollars in a little over an hour, 0:07:06.880 --> 0:07:08.919 and so there was sort of ummings and irons about 0:07:09.000 --> 0:07:13.600 whether maybe some sort of at least disrupted trading was responsible. 0:07:13.960 --> 0:07:17.600 Um and we managed to find out that actually there 0:07:17.680 --> 0:07:21.120 was a firm, this tiny little firm called Vega Capital London, 0:07:21.360 --> 0:07:24.960 which is literally an office above a pub with a 0:07:25.000 --> 0:07:29.480 few deaths. Most of the guys they are trade from home. Um. 0:07:29.560 --> 0:07:33.520 They're predominantly expit traders, you know, quite kind of grizzled 0:07:34.240 --> 0:07:38.120 long in the two veterans of the oil market, who 0:07:38.640 --> 0:07:40.080 you know, a lot of times used to bind sell 0:07:40.160 --> 0:07:43.120 oil using hand signals, had managed to stick it out 0:07:43.680 --> 0:07:49.480 and then this particular day, owing to these unprecedented swirling 0:07:49.560 --> 0:07:52.000 movements in the market, were on the right side of 0:07:52.000 --> 0:07:56.000 his trade and managed to sort of bad half a 0:07:56.080 --> 0:08:00.000 billion goats, which you know, considering the size of the firm, 0:08:00.000 --> 0:08:03.480 and I think, you know, considering that normal earnings topathically, 0:08:03.680 --> 0:08:06.960 it's just an incredible sum. It's mind blowing. And I 0:08:07.040 --> 0:08:09.000 love how you say in your story, Liam, you know 0:08:09.200 --> 0:08:10.960 this is a company, as you said, most of them 0:08:10.960 --> 0:08:13.040 are working from home. There's not a lot of information, 0:08:13.600 --> 0:08:16.360 and that their website, the company website has remained under 0:08:16.400 --> 0:08:20.680 construction on LinkedIn since it was founded a few years ago. Right, 0:08:20.720 --> 0:08:23.920 so there's not a lot known about this firm. So 0:08:24.160 --> 0:08:27.080 is it a case that they were just on the 0:08:27.160 --> 0:08:29.200 right side of the I mean, obviously they were, But 0:08:29.280 --> 0:08:31.760 how were they able to pull this off? And I 0:08:31.840 --> 0:08:34.680 just wonder what regulators, you know, they've got to be 0:08:34.679 --> 0:08:38.920 scratching their head about how did this firm do it? Yes? 0:08:39.040 --> 0:08:44.000 So how very Matt Lavine is really good explaining this stuff, 0:08:44.040 --> 0:08:47.920 and he's absolutely right little couching it as somewhere between 0:08:48.640 --> 0:08:52.880 hedging and potential manipulation. UM. And that's the kind of 0:08:52.920 --> 0:08:55.840 messing quagmire that the regulators we're going to have to 0:08:56.720 --> 0:09:00.120 um get through and make a decision on. But essentially mean, 0:09:00.240 --> 0:09:03.360 what they were doing and what is this kind of 0:09:03.360 --> 0:09:05.600 feature of the oil market is that you can buy 0:09:05.760 --> 0:09:10.080 oil throughout the day but not know the price, and 0:09:10.200 --> 0:09:13.920 you just agree to buy or sell oil at whatever 0:09:14.000 --> 0:09:17.760 the settlement price ends up later that day. So what 0:09:17.880 --> 0:09:22.040 these Panny guys did, knowing that we were likely on 0:09:22.080 --> 0:09:25.200 a very downward day, is they bought up as much 0:09:25.280 --> 0:09:28.040 oil in this kind of what's called the trade at 0:09:28.120 --> 0:09:31.000 settlement market as possible, which meant that they were committed 0:09:31.040 --> 0:09:34.120 to buying thousands of bowers of oil and whatever the 0:09:34.160 --> 0:09:37.280 titles are two thirty. But then throughout the day they're 0:09:37.320 --> 0:09:42.000 also selling oil to kind of offset their position. And 0:09:42.679 --> 0:09:45.959 you know, according to our sources, they're selling very aggressively 0:09:46.520 --> 0:09:50.559 in unison in the last kind of you know, period 0:09:50.679 --> 0:09:52.800 of the day, two minutes really of the day, and 0:09:52.880 --> 0:09:56.800 they they're trading coinciding with a complete exodus of buyers, 0:09:57.160 --> 0:10:00.480 and it contributed, you know, to this massive would fall 0:10:00.480 --> 0:10:03.280 in the market. UM. Now, as we point out, you know, 0:10:03.320 --> 0:10:05.840 there are strict rules around trading at settlement. You're not 0:10:05.880 --> 0:10:08.480 supposed to trade in such a way as to try 0:10:08.480 --> 0:10:11.440 and deliberately move the settlement price to try and profit 0:10:11.480 --> 0:10:14.760 in another market. And people have been you know, in 0:10:14.800 --> 0:10:18.480 trouble for that previously. UM. And so what the regulators 0:10:18.480 --> 0:10:20.640 will have to determine is whether these guys who were 0:10:20.679 --> 0:10:24.319 aggressively hammering the market at the end of the day 0:10:24.480 --> 0:10:27.760 were legitimately hedging their position or they were actually trying 0:10:27.800 --> 0:10:33.360 to to you know, last through the market. And I 0:10:33.360 --> 0:10:36.880 think it's it gets really technical there. UM. And you 0:10:36.880 --> 0:10:40.560 know one reason Liam that um, as you write in 0:10:40.559 --> 0:10:44.480 the story, that that this is complicated for regulators. Um 0:10:44.880 --> 0:10:46.640 is something that you also know a little bit about 0:10:47.160 --> 0:10:51.360 from from your book because bringing a case you actually 0:10:51.360 --> 0:10:53.160 have to show intent, which means you have to get 0:10:53.200 --> 0:10:56.440 your hands on some stuff that shows, you know, in 0:10:56.559 --> 0:10:59.320 papor In writing that somebody knew what they were doing. 0:10:59.600 --> 0:11:02.559 So is how often a regular is able to pull 0:11:02.600 --> 0:11:07.800 that off? Yeah, thank you Joel for for mentioning the book. 0:11:08.320 --> 0:11:10.880 Just written another book called Flash Trash, and it is 0:11:10.920 --> 0:11:14.760 worth mentioning because it's actually strikingly similar situation for this 0:11:15.200 --> 0:11:17.160 whereby you had the flash crash and took down and 0:11:17.400 --> 0:11:19.920 saying and there was this big sort of scrudgingly after 0:11:19.920 --> 0:11:22.280 the event, and then a couple of years later they 0:11:22.360 --> 0:11:24.360 emerged that this guy in the in the surrounding his 0:11:24.520 --> 0:11:28.600 bedroom may have, you know, through his disruptive trading, actually 0:11:28.920 --> 0:11:31.920 been a significant contributor towards it. And this is a 0:11:32.040 --> 0:11:36.840 very very kind of reminiscent situation. Um And yeah, to 0:11:36.960 --> 0:11:39.520 your point, um, you know, historically we see if you 0:11:39.720 --> 0:11:43.760 see another, authorities have really struggled to bring and make 0:11:44.240 --> 0:11:48.479 stand manipulation cases because it's not enough just to sort 0:11:48.520 --> 0:11:52.200 of show from the data or even from methodism things 0:11:52.200 --> 0:11:54.840 that people intended to move the market. You have to 0:11:54.840 --> 0:11:57.599 actually kind of show beyond the reasonable doubt and the 0:11:57.679 --> 0:12:00.120 market wouldn't have moved anyway. And it's actually very hard 0:12:00.160 --> 0:12:02.720 to do that. Um So. In the surround case, the 0:12:02.760 --> 0:12:07.000 reason he got in trouble is because when they arrested him, 0:12:07.000 --> 0:12:10.319 they found him computer and there's actually videos of him 0:12:10.400 --> 0:12:13.760 unbelievably trading. Um And it also quite early in his 0:12:13.840 --> 0:12:17.000 career he sent emails talking about his plans to sort 0:12:17.000 --> 0:12:20.520 of manipulate the market. Um So, they had that hard evidence, 0:12:20.600 --> 0:12:23.160 but sund was pretty careless in that respect, and that 0:12:23.280 --> 0:12:27.600 these guys or any you know, traders have been sort 0:12:27.600 --> 0:12:29.320 of following the news over the last few years, they 0:12:29.360 --> 0:12:33.040 will be pretty savvy to the need to communicate in 0:12:33.080 --> 0:12:36.720 a in a effective and efficient way. Um, and you 0:12:36.760 --> 0:12:40.280 know a lot of of means of communication these days 0:12:40.320 --> 0:12:43.760 are fully encrypted and stuff. So even if the regulators 0:12:43.760 --> 0:12:46.480 suspected there's you know, there's something untowards here, actually been 0:12:46.520 --> 0:12:50.719 able to charge anyone is a different matter. Well, it's 0:12:50.760 --> 0:12:55.560 pretty incredible and as sophisticated and complicated and even with 0:12:55.600 --> 0:12:57.880 all the regulations we have to see this kind of 0:12:57.880 --> 0:13:01.280 a trade. It's it's pretty remarkable. Liam, Thank you so much, 0:13:01.320 --> 0:13:03.199 really appreciate it. It It is, as we said, among our 0:13:03.240 --> 0:13:07.360 most read stories on the Bloomberg liamba our financial investigations 0:13:07.360 --> 0:13:09.640 reporter at Bloomberg News, joining us on the phone from 0:13:09.640 --> 0:13:12.720 London along with Jill Webber, editor at Bloomberg Business Week. 0:13:12.720 --> 0:13:14.920 He's on the phone from Massachusetts and dude, check out 0:13:14.920 --> 0:13:18.560 Liam's book Flash Crash, A Trading Savant, a Global manhunt, 0:13:18.600 --> 0:13:21.720 and the most mysterious market crash in History. That book 0:13:21.760 --> 0:13:24.120 just came out in May of this year. In this 0:13:24.160 --> 0:13:27.400 week's edition of Bloomberg Business Week Small Business Survival Guide. UM, 0:13:27.400 --> 0:13:30.640 we've been talking a lot about small business and how 0:13:30.640 --> 0:13:33.080 they're getting through the pandemic. We're going to talk this 0:13:33.120 --> 0:13:36.400 week about preparing your business for uncertainty, which is one 0:13:36.440 --> 0:13:38.440 thing I feel like we kicked off the show Doug 0:13:38.480 --> 0:13:41.280 and I Doug Krisner talking about that specifically. Joining us 0:13:41.320 --> 0:13:44.640 right now is Bloomberg News editor Dimitrick Hessands. She joins 0:13:44.679 --> 0:13:46.600 us on the phone, and I believe she's in New 0:13:46.679 --> 0:13:49.760 York City today, along with Hunter Lovin's board member at 0:13:50.120 --> 0:13:53.600 Simplify Power on the phone from Colorado. I'm great to 0:13:53.640 --> 0:13:56.480 have both of you with us. Um, Demitra, let's kick 0:13:56.520 --> 0:13:58.680 it off because you've been, you know, tracking small business 0:13:59.120 --> 0:14:01.760 for US week to week. Tell us a little bit about, 0:14:01.920 --> 0:14:05.080 UM the thinking on this week's topic, because I do 0:14:05.120 --> 0:14:07.720 feel like the one thing people are certain about is 0:14:07.760 --> 0:14:10.280 that they just don't know about the rest of the year. 0:14:10.720 --> 0:14:15.640 And really, UM, it's true. And you know what was 0:14:15.679 --> 0:14:18.679 compelling about this, especially to Nick we've talked to him 0:14:18.679 --> 0:14:22.320 before also liber when he first met the folks that 0:14:22.400 --> 0:14:27.280 Simplify Power there, makers of Sustainable Safer Batteries based in California. 0:14:27.320 --> 0:14:30.440 We've written about them before and we've been in touch 0:14:30.480 --> 0:14:33.800 with the CEO. He's recently been in touch with Hunter 0:14:33.880 --> 0:14:37.640 and talking about something they've done called scenario planning, which 0:14:37.680 --> 0:14:42.120 really has been an incredibly useful tool to anticipate. I 0:14:42.120 --> 0:14:44.520 mean it's not really about it. It's sort of putting 0:14:44.640 --> 0:14:49.640 different scenarios before people at the company and really testing out, 0:14:49.680 --> 0:14:53.480 you know, what the company can withstand, how we can react, 0:14:53.640 --> 0:14:56.200 what it can do, what tools it has, it can 0:14:56.280 --> 0:14:58.480 It can be something that you used to decide about 0:14:58.520 --> 0:15:01.760 your supplies about you know, how much you need to 0:15:01.920 --> 0:15:04.080 kind of stockpile in terms of whatever it is that 0:15:04.120 --> 0:15:06.400 you make, um you know, where how you're going to 0:15:06.520 --> 0:15:09.760 deal with getting products to your customers. Um So to 0:15:09.920 --> 0:15:12.400 some degree, to a very large degree from what we've 0:15:12.400 --> 0:15:15.360 heard from them, this has really been very helpful to 0:15:15.440 --> 0:15:18.240 them in weathering this period in a way that many 0:15:18.280 --> 0:15:20.920 of their small businesses haven't been able to. So Hunter, 0:15:21.000 --> 0:15:22.440 come on in on this, and you know it's so 0:15:22.520 --> 0:15:25.080 timely because tomorrow I'm getting ready to talk to We 0:15:25.120 --> 0:15:28.040 have a group of CEOs that we regularly talk to 0:15:28.040 --> 0:15:30.840 you as part of our Bloomberg Live breakaway group and 0:15:31.120 --> 0:15:33.800 they're all wondering about reopening and what they're you know, 0:15:33.880 --> 0:15:36.560 second half talk, you know looks like and this whole 0:15:36.600 --> 0:15:38.960 idea of scenario planning I think fits right into this. 0:15:39.040 --> 0:15:41.240 Tell us a little bit about what you guys did 0:15:41.280 --> 0:15:44.400 and how and how it really helped you. It's the 0:15:44.480 --> 0:15:48.280 most powerful tool I'm aware of too for a business 0:15:48.360 --> 0:15:51.920 to figure out how to deal with uncertainty. It's in 0:15:52.000 --> 0:15:55.080 effect and over the horizon, look at what might be 0:15:55.080 --> 0:15:59.240 coming at you, which then enables you to test your 0:15:59.280 --> 0:16:07.320 strategy against a variety of mutually inconsistent but plausible possible futures, 0:16:07.360 --> 0:16:10.960 the goal being defined a strategy that as Royal Dutchell, 0:16:11.200 --> 0:16:17.000 which invented this discipline, calls a no regrets strategy. And 0:16:17.520 --> 0:16:21.520 it's a process that I helped companies go through in 0:16:21.560 --> 0:16:24.560 a very short period of time and simplify. We took 0:16:25.640 --> 0:16:29.600 I shut them a power point presentation the evening before 0:16:29.680 --> 0:16:32.520 then it took about four hours the next day. They 0:16:32.560 --> 0:16:37.880 involved basically everybody in the company. And even if you 0:16:38.040 --> 0:16:42.080 got no value out of the scenarios, just getting everybody 0:16:42.080 --> 0:16:45.720 in the company together and surfacing your assumptions is an 0:16:45.720 --> 0:16:50.560 incredibly good way to engage your employees. In this case, 0:16:50.880 --> 0:16:54.360 the initial time we did in November last year, the 0:16:54.440 --> 0:16:59.360 crew was not being terribly imaginative in terms of what 0:16:59.480 --> 0:17:01.840 could go wrong. And I said, guy, it's get a 0:17:01.840 --> 0:17:04.560 little wild and crazy. What if we had a pandemic? 0:17:05.320 --> 0:17:08.560 And Katherine von Berg, the CEO, looked at the ceiling, 0:17:08.680 --> 0:17:14.320 rolled her eyes. But then she started thinking, you know, 0:17:14.600 --> 0:17:18.800 Simplify gets a lot of its materials from China. What 0:17:18.920 --> 0:17:21.560 if there were a pandemic, What if our supply chains 0:17:21.640 --> 0:17:24.919 broke down? What if it came here? How would we 0:17:25.000 --> 0:17:29.040 keep the company operating? And so she started putting in 0:17:29.200 --> 0:17:34.560 place the mental capacity. So that went In December, words 0:17:34.600 --> 0:17:38.640 started coming out of China that there's this weird disease 0:17:38.720 --> 0:17:43.480 that's killing people. She went into overdrive and as a result, 0:17:43.840 --> 0:17:49.040 the company's profits this year about over last year. It's 0:17:49.080 --> 0:17:51.560 doing very well. It was shut down for all of 0:17:51.600 --> 0:17:54.680 two days over a weekend to do a deep cleaning 0:17:54.720 --> 0:17:58.080 and to put in place the safety provisions. It was 0:17:58.119 --> 0:18:02.320 deemed an essential enterprise and it's rolling. It's doing just great. Hunter, 0:18:02.440 --> 0:18:05.359 how like wild is that that a year ago? That 0:18:05.359 --> 0:18:08.919 that's exactly the you know, kind of crisis situation that 0:18:09.000 --> 0:18:13.880 you guys brought up the discipline of scenario planning, has 0:18:13.960 --> 0:18:20.359 you look at what are called the steep forces social, technological, economic, environmental, 0:18:20.400 --> 0:18:24.040 and political. What's really happening out there in the world 0:18:25.040 --> 0:18:28.840 where you might want to think about what's the impact 0:18:28.880 --> 0:18:33.120 that it's going to be on your company. And one 0:18:33.160 --> 0:18:35.920 of the things that's been predicted by the scientists for 0:18:35.960 --> 0:18:42.080 a long time is pandemics. It's not unimplausible outcome. So 0:18:42.160 --> 0:18:43.960 I was just trying to get them to think about 0:18:44.400 --> 0:18:46.959 what could go wrong, guys, and how are we going 0:18:47.000 --> 0:18:50.400 to deal with it if it does. Yeah, that it did. 0:18:50.720 --> 0:18:53.800 It's it's pretty remarkable. And Demitro just got about twenty 0:18:54.280 --> 0:18:56.359 thirty seconds here. I mean, yeah, it is pretty You 0:18:56.359 --> 0:18:58.520 know when you think about scenarios, that's not maybe the 0:18:58.520 --> 0:19:00.920 first one that comes to mind. But you know here 0:19:00.960 --> 0:19:04.760 we are no, absolutely not. I mean, I suspect again 0:19:04.880 --> 0:19:07.400 Hunter probably used it as one of many examples out 0:19:07.400 --> 0:19:10.200 of those areas that we've touched on. It just so happened. 0:19:10.240 --> 0:19:12.920 It was happening. You know, whatever your business, this can 0:19:13.000 --> 0:19:15.399 be super youthful. You're gonna you're gonna press the right 0:19:15.520 --> 0:19:18.919 in different ways. But it's very forwarding, Well, this was 0:19:18.960 --> 0:19:21.560 great and really helpful. Demitri, Thank you so much. Demitri 0:19:21.640 --> 0:19:25.280 Cassaniti's editor at Bloomberg News and of course, Hunter Lovin's 0:19:25.280 --> 0:19:27.800 board member at Simplified Power, joining us on the phone 0:19:27.800 --> 0:19:35.320 from Colorado bro Journal. Yeah, but you let me drive? 0:19:35.600 --> 0:19:39.560 Oh no, no, no, who's going to drive home? Honey? Please, 0:19:39.640 --> 0:19:46.800 I'll drive me. I want to drive, Just drive baby. 0:19:49.600 --> 0:19:59.560 The question trying this is the drive to the globe? 0:20:00.040 --> 0:20:07.120 Wrong commun radio. All right, you are listening to Bloomberg 0:20:07.480 --> 0:20:10.040 Business Week Jason Kelly and Carol Master. Forgot where I 0:20:10.119 --> 0:20:12.040 was for a second. It's been that sort of day. 0:20:12.080 --> 0:20:14.439 It's been a disruptive sort of day, Carol Master. So 0:20:14.520 --> 0:20:16.480 that's what we're going to talk about. Disruption in the 0:20:16.480 --> 0:20:19.919 stock market, disruption in stocks and maybe some disruptive names. 0:20:20.240 --> 0:20:22.639 Happy to have with us, probably rom She is portfolio 0:20:22.720 --> 0:20:25.960 manager for American Century Investments, joining us on the phone 0:20:26.320 --> 0:20:29.040 from New York City. Probably really nice to have you 0:20:29.080 --> 0:20:34.000 with us. Thank you for having me so. Disruption certainly 0:20:34.080 --> 0:20:38.320 has been the name of the game here in How 0:20:38.320 --> 0:20:41.280 do you approach it as an investor? Because you have 0:20:41.520 --> 0:20:44.600 I believe and keep me honest here you look after 0:20:44.640 --> 0:20:49.520 the Focus Dynamic Growth Strategy Fund for American Century and 0:20:49.640 --> 0:20:52.359 we've had maybe not so much focus, but we certainly 0:20:52.359 --> 0:20:54.960 had a lot of dynamism and maybe even some growth 0:20:54.960 --> 0:20:59.720 in this market. Yes, so yes, um, I do cool 0:20:59.760 --> 0:21:03.199 Man in Focus Dynamic Growth Fund, And this is a 0:21:03.240 --> 0:21:06.960 fund where we try to keep the names limited adjacent 0:21:07.080 --> 0:21:11.760 to names, But what we're focused on is early to 0:21:12.040 --> 0:21:17.879 rapid growth phases UM for companies and that automatically leads 0:21:17.920 --> 0:21:21.879 to innovation and disruption, just like you pointed out. And 0:21:21.960 --> 0:21:25.880 disruption comes in several sizes and shapes. Uh. We all 0:21:26.000 --> 0:21:29.040 think about e commerce. Most of us are not going 0:21:29.080 --> 0:21:32.960 to stores anymore. We buy more online. And we've had 0:21:33.000 --> 0:21:36.080 reports that you know, three years worth of growth has 0:21:36.080 --> 0:21:40.440 been squeezed into three months and apparently in e commerce 0:21:40.480 --> 0:21:42.800 and Makan say report tells you that it's ten years 0:21:42.800 --> 0:21:46.880 worth of growth in three months. So just astounding numbers there. 0:21:46.960 --> 0:21:51.320 But UM, disruption is not just in technology, Uh, it 0:21:51.600 --> 0:21:56.040 also is in traditional industries. It is also in uh, 0:21:56.040 --> 0:21:59.160 you know, healthcare for examples. So we look at disruption 0:21:59.200 --> 0:22:01.600 pretty much across us the boat if you will. Yeah, 0:22:01.800 --> 0:22:04.040 I just want to point out too, I mean the fund, 0:22:04.320 --> 0:22:07.119 the American century focused dynamic growth fund that you co 0:22:07.280 --> 0:22:11.240 manage UM, Amazon, Alphabet, and Tesla among the top holdings. 0:22:11.280 --> 0:22:14.720 The fund has returned nearly on average annually in each 0:22:14.720 --> 0:22:17.760 of the past five years, putting it in the percentile 0:22:17.840 --> 0:22:20.240 for funds in that category. So it's really been a 0:22:20.240 --> 0:22:22.800 top performer. And you do look at the holdings and 0:22:22.840 --> 0:22:27.159 they are companies that we know, how often are you guys, 0:22:27.600 --> 0:22:29.480 since you seem to kind of keep it down to 0:22:29.520 --> 0:22:32.680 a core portfolio, how long do you kind of hold 0:22:32.720 --> 0:22:35.919 on to something that gets into UM into one of 0:22:35.920 --> 0:22:40.200 the holdings, So, you know, But to what I said, 0:22:40.240 --> 0:22:43.280 you know, we're looking at companies in the early and 0:22:43.480 --> 0:22:47.760 rapid growth faces and I will touch on Google and Amazon. 0:22:47.920 --> 0:22:50.960 You know that are not particularly early, but we'll talk 0:22:51.000 --> 0:22:54.439 about that. So however, so since we get an early, 0:22:54.520 --> 0:22:57.800 we hold for long periods of time. So historically it's 0:22:57.800 --> 0:23:02.040