1 00:00:05,800 --> 00:00:08,720 Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 2 00:00:08,760 --> 00:00:11,520 Speaker 1: Along with my co host Lisa Abramowitz. Each day we 3 00:00:11,640 --> 00:00:15,120 Speaker 1: bring you the most important, noteworthy, and useful interviews for 4 00:00:15,200 --> 00:00:17,840 Speaker 1: you and your money, whether you're at the grocery store 5 00:00:17,960 --> 00:00:20,720 Speaker 1: or the trading floor. Find the Bloomberg p m L 6 00:00:20,840 --> 00:00:32,520 Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Let's 7 00:00:32,560 --> 00:00:36,120 Speaker 1: turn out to one stock and one story. In particular, 8 00:00:36,640 --> 00:00:40,320 Speaker 1: Century Fox shares higher right now by more than seven percent. 9 00:00:40,840 --> 00:00:43,519 Speaker 1: This comes after an increased bid from Disney seventy one 10 00:00:43,560 --> 00:00:47,519 Speaker 1: billion dollars to acquire those uh century Fox assets. Here 11 00:00:47,560 --> 00:00:50,840 Speaker 1: to tell us more, Paul Sweeney expert when it comes 12 00:00:50,880 --> 00:00:54,520 Speaker 1: to all things Internet and media related. He is our 13 00:00:54,560 --> 00:00:57,560 Speaker 1: director of North American Research for Bloomberg Intelligence and our 14 00:00:57,600 --> 00:01:01,240 Speaker 1: Internet analysts. Paul, what do you make of this particular 15 00:01:01,520 --> 00:01:04,679 Speaker 1: move by Disney? Is this the coda? Is this the 16 00:01:04,800 --> 00:01:07,840 Speaker 1: final final bid? You know, we'll have to see. The 17 00:01:07,840 --> 00:01:10,800 Speaker 1: ball is definitely in Comcast court here, but you know, 18 00:01:10,840 --> 00:01:14,280 Speaker 1: this is a very aggressive move by Bob Buyer and 19 00:01:14,520 --> 00:01:17,280 Speaker 1: and Disney. Not only did they raise the price of 20 00:01:17,280 --> 00:01:21,039 Speaker 1: their deal by approximately thirty but they also added a 21 00:01:21,080 --> 00:01:25,480 Speaker 1: cash component allowing shareholders to elect between cash and stock, 22 00:01:25,560 --> 00:01:28,640 Speaker 1: and that really makes the deal very compelling for sellers, 23 00:01:28,640 --> 00:01:31,520 Speaker 1: particularly the Murdoch family, who may prefer to take stock 24 00:01:31,560 --> 00:01:34,120 Speaker 1: and defer some of their their tax gains versus a 25 00:01:34,560 --> 00:01:37,120 Speaker 1: a Comcast deal which is all cash and which would 26 00:01:37,600 --> 00:01:40,920 Speaker 1: clearly result in a significant tax liability for the Murdoch 27 00:01:41,040 --> 00:01:43,880 Speaker 1: So this is about as compelling a deal as Disney 28 00:01:43,920 --> 00:01:45,360 Speaker 1: could have come back with. I think it's actually a 29 00:01:45,360 --> 00:01:48,400 Speaker 1: little surprising how aggressive they were. So again, the ball 30 00:01:48,480 --> 00:01:51,560 Speaker 1: is really in the court of Comcast and Brian Roberts, 31 00:01:51,600 --> 00:01:53,960 Speaker 1: and they need to decide how much they want this asset. 32 00:01:54,240 --> 00:01:58,240 Speaker 1: I'm really confused about the market response to this. Disney 33 00:01:58,240 --> 00:02:02,600 Speaker 1: shares are up more than one percent, even though, uh, 34 00:02:02,640 --> 00:02:05,680 Speaker 1: you know, the risk of Disney over paying, the risk 35 00:02:05,720 --> 00:02:08,320 Speaker 1: of a bidding war ending up with an outcome that 36 00:02:08,440 --> 00:02:12,560 Speaker 1: isn't so great is rising. Can you explain why investors 37 00:02:12,560 --> 00:02:16,600 Speaker 1: are cheering this the power of cash? Um so. I 38 00:02:16,600 --> 00:02:19,919 Speaker 1: think what's happening here is the original all stock deal 39 00:02:20,080 --> 00:02:23,240 Speaker 1: that Disney put on the table is actually diluted to 40 00:02:23,280 --> 00:02:27,200 Speaker 1: Disney shareholders per our analysis. However, as they reduced the 41 00:02:27,200 --> 00:02:29,720 Speaker 1: amount of equity that they put in deal and increase 42 00:02:29,800 --> 00:02:32,840 Speaker 1: the cash. Even at today's low rates, the deal becomes 43 00:02:32,919 --> 00:02:36,000 Speaker 1: less and less dilutive and actually a little bit of 44 00:02:36,040 --> 00:02:40,800 Speaker 1: creative here. So depending upon the elections of cash versus stock. So, um, 45 00:02:40,840 --> 00:02:44,440 Speaker 1: it's actually for Disney from a near term perspective a 46 00:02:44,480 --> 00:02:47,079 Speaker 1: little bit better believe it or not. And then I 47 00:02:47,120 --> 00:02:49,000 Speaker 1: think it just kind of goes to I think it 48 00:02:49,080 --> 00:02:51,160 Speaker 1: reflects effected. I think investors feel like this might be 49 00:02:51,200 --> 00:02:54,760 Speaker 1: a knockout punch by Disney. Well, taking a look at 50 00:02:54,760 --> 00:02:57,360 Speaker 1: the shares of Comcast. On the other hand, you know, 51 00:02:57,520 --> 00:03:00,480 Speaker 1: Comcast investors don't seem to have liked this deal. The 52 00:03:00,560 --> 00:03:03,359 Speaker 1: stock is down nearly eighteen percent so far this year 53 00:03:03,639 --> 00:03:07,200 Speaker 1: today basically unchanged. Do you think that the if indeed 54 00:03:07,240 --> 00:03:10,680 Speaker 1: Disney walks away with this, that this will be something 55 00:03:10,720 --> 00:03:13,840 Speaker 1: that will be positive for Comcast? I think so in 56 00:03:13,919 --> 00:03:15,960 Speaker 1: the short term. You're exactly right. The stock has been 57 00:03:15,960 --> 00:03:19,040 Speaker 1: down this year. It's been underperforming given Charter, which is 58 00:03:19,080 --> 00:03:21,720 Speaker 1: another big cable company, And I think the concern there 59 00:03:21,720 --> 00:03:24,360 Speaker 1: with Comcast was just exactly what happened, that they would 60 00:03:25,160 --> 00:03:26,839 Speaker 1: try to use their balance sheet to make a big 61 00:03:26,840 --> 00:03:30,440 Speaker 1: acquisition and uh and uh, you know, really limit the 62 00:03:30,480 --> 00:03:32,320 Speaker 1: amount of stock they can buy back or the amount 63 00:03:32,360 --> 00:03:34,520 Speaker 1: they can invest in some of their other core businesses. 64 00:03:34,560 --> 00:03:37,800 Speaker 1: And I think Comcast investors, while they're obviously very supportive 65 00:03:37,840 --> 00:03:39,840 Speaker 1: of Brian Roberts and its management team, I think they 66 00:03:39,840 --> 00:03:43,520 Speaker 1: feel like, UM, the Fox assets are not as critical 67 00:03:43,560 --> 00:03:45,760 Speaker 1: to the future of Comcast as they might be for Disney. 68 00:03:45,800 --> 00:03:48,560 Speaker 1: As a result, I don't think Comcast shareholders were quite 69 00:03:48,600 --> 00:03:51,960 Speaker 1: as supportive of the Comcast management team and board as 70 00:03:51,960 --> 00:03:55,000 Speaker 1: the Disney shareholders have proven to be. UM. So the 71 00:03:55,080 --> 00:03:57,160 Speaker 1: question then will be, you know, A, what does Comcast 72 00:03:57,280 --> 00:03:59,720 Speaker 1: do here in response to the Disney bid? And be 73 00:04:00,120 --> 00:04:03,600 Speaker 1: if they lose, where does Comcast go next? UM? Do 74 00:04:03,720 --> 00:04:07,120 Speaker 1: they try to copple together some assets like a Discovery Communications, 75 00:04:07,160 --> 00:04:08,920 Speaker 1: like some other media companies that might be out there, 76 00:04:08,960 --> 00:04:12,680 Speaker 1: like some film studios that might replicate in some way, um, 77 00:04:12,720 --> 00:04:16,080 Speaker 1: the assets that they did not get with Fox. Paul Sweeney, 78 00:04:16,160 --> 00:04:18,160 Speaker 1: thank you so much for being with us, and I'm 79 00:04:18,200 --> 00:04:21,520 Speaker 1: sure we'll be following this on an ongoing basis as 80 00:04:21,520 --> 00:04:24,240 Speaker 1: this saga continues to play out. Paul Sweeney as US 81 00:04:24,279 --> 00:04:27,560 Speaker 1: director of Research and senior Media and Internet analyst for 82 00:04:27,680 --> 00:04:45,080 Speaker 1: Bloomberg Intelligence. General Electric shares are down more than one 83 00:04:45,160 --> 00:04:48,560 Speaker 1: percent today, following in early two percent laws yesterday after 84 00:04:48,600 --> 00:04:52,520 Speaker 1: getting kicked out of the Dow Jones Index. This is 85 00:04:52,560 --> 00:04:56,799 Speaker 1: a symbolic move, but it also could affect gees fortunes 86 00:04:56,839 --> 00:05:00,400 Speaker 1: going forward in a fundamental way. Sarah pon Sech joins 87 00:05:00,480 --> 00:05:03,840 Speaker 1: US now she's bloomber Cross Asset reporter um and this 88 00:05:03,880 --> 00:05:07,480 Speaker 1: story is fascinating from so many perspectives. But first, can 89 00:05:07,480 --> 00:05:09,960 Speaker 1: you just sort of paint the picture. General Electric has 90 00:05:10,000 --> 00:05:13,120 Speaker 1: been in the index for a long time, storied company. 91 00:05:13,160 --> 00:05:15,680 Speaker 1: Why was it kicked out? Of course, so this is 92 00:05:15,800 --> 00:05:18,920 Speaker 1: pretty bitter sweet. G E was one of the original 93 00:05:19,000 --> 00:05:21,840 Speaker 1: down members and now we don't have any of them. 94 00:05:21,880 --> 00:05:24,039 Speaker 1: But the problem with ge is that we have been 95 00:05:24,080 --> 00:05:28,120 Speaker 1: seeing it come forth with so many issues lately. I mean, 96 00:05:28,160 --> 00:05:31,080 Speaker 1: it's lost half its market value in the last year. 97 00:05:31,240 --> 00:05:35,400 Speaker 1: This year, it's down already last year it's down. I mean, 98 00:05:35,400 --> 00:05:38,200 Speaker 1: it's been struggling with weak demand for industrial equipment. It's 99 00:05:38,200 --> 00:05:41,080 Speaker 1: had cash flow problems. They're also going through an accounting 100 00:05:41,080 --> 00:05:43,840 Speaker 1: probe right now. So there's just so much right now 101 00:05:43,880 --> 00:05:46,160 Speaker 1: that's hurting the company. And it dropped to a point 102 00:05:46,200 --> 00:05:48,919 Speaker 1: that's so low because the doubt is price weighted that 103 00:05:49,000 --> 00:05:51,360 Speaker 1: it really didn't have too much weight within the Dow, 104 00:05:51,440 --> 00:05:54,720 Speaker 1: and the doubts also supposed to represent the economy and 105 00:05:54,839 --> 00:05:57,919 Speaker 1: the down makers, if you will feel like the economy 106 00:05:58,000 --> 00:06:00,479 Speaker 1: is moving forth and maybe g E is in the 107 00:06:00,520 --> 00:06:02,680 Speaker 1: next part of it. Well, just to be clear, right, 108 00:06:02,680 --> 00:06:05,680 Speaker 1: the way in which the Dow Jones Industrial Leverage is 109 00:06:05,720 --> 00:06:09,760 Speaker 1: put together is it is a price of and it's 110 00:06:09,760 --> 00:06:13,160 Speaker 1: the sum of the actual price of all of the 111 00:06:13,200 --> 00:06:16,760 Speaker 1: components and the index, and then that price is then 112 00:06:16,920 --> 00:06:21,000 Speaker 1: divided by something called the Dow divisor, and that is 113 00:06:21,080 --> 00:06:25,120 Speaker 1: designed to account for stock splits as well as a 114 00:06:25,200 --> 00:06:29,000 Speaker 1: variety of other kind of changes in the actual stock price. 115 00:06:29,839 --> 00:06:34,080 Speaker 1: And it's interesting because this is a very human decision, right, 116 00:06:34,160 --> 00:06:36,960 Speaker 1: This is not something like g E reached a certain 117 00:06:37,000 --> 00:06:40,560 Speaker 1: level of sales, you're out. It's not about it. It's 118 00:06:40,600 --> 00:06:42,839 Speaker 1: not about that, right. It's not rules based, and like 119 00:06:42,920 --> 00:06:44,840 Speaker 1: you said, it is price weighted, whereas a lot of 120 00:06:44,839 --> 00:06:47,840 Speaker 1: the other industries are market cap weighted. But it's not 121 00:06:48,000 --> 00:06:51,080 Speaker 1: a rules based system that either adds stocks or takes 122 00:06:51,120 --> 00:06:54,680 Speaker 1: stocks out of the index. Rather, there's actually a committee 123 00:06:55,000 --> 00:06:57,760 Speaker 1: that sits around and discusses which stocks should be the 124 00:06:57,800 --> 00:07:00,040 Speaker 1: next one added, But this raises so many questions. It 125 00:07:00,160 --> 00:07:02,800 Speaker 1: is about just you know, what is passive management and 126 00:07:03,040 --> 00:07:07,560 Speaker 1: you know with index strategies, is this smart investing? I mean, 127 00:07:07,680 --> 00:07:11,400 Speaker 1: given the fact that this company's shares has have absolutely tanked, 128 00:07:11,680 --> 00:07:15,160 Speaker 1: is now the time to sell out and solidify losses 129 00:07:15,240 --> 00:07:17,320 Speaker 1: and then bringing another name that's done really well that 130 00:07:17,440 --> 00:07:20,080 Speaker 1: might not have as many games looking forward? Right. So 131 00:07:20,120 --> 00:07:23,000 Speaker 1: Stephen Gendell, he wrote an opinion column for Bloomberg this morning, 132 00:07:23,000 --> 00:07:25,360 Speaker 1: and he made a really interesting point saying, is it fair, 133 00:07:25,840 --> 00:07:27,880 Speaker 1: uh for a committee to sit around and kind of 134 00:07:27,960 --> 00:07:31,280 Speaker 1: choose what the economy is supposed to look like going forwards? 135 00:07:31,280 --> 00:07:33,280 Speaker 1: And he pointed out that the DAL dropped A T 136 00:07:33,400 --> 00:07:35,800 Speaker 1: and T back in and since then a T and 137 00:07:35,840 --> 00:07:38,480 Speaker 1: T is we just saw the acquisition with Time Warner. 138 00:07:38,640 --> 00:07:41,000 Speaker 1: And even before that, the DAL dropped Bank of America, 139 00:07:41,000 --> 00:07:44,760 Speaker 1: and since then Bank of America shares are up. So 140 00:07:44,840 --> 00:07:47,400 Speaker 1: it really comes down to the point of who whose 141 00:07:47,440 --> 00:07:49,040 Speaker 1: choice is it to really decide who goes and who 142 00:07:49,080 --> 00:07:53,720 Speaker 1: comes out. American Cotton Oil Company that was one of 143 00:07:53,720 --> 00:07:56,480 Speaker 1: the original down members just to give it and it's 144 00:07:56,520 --> 00:07:59,080 Speaker 1: now part of Unilever. After a variety of you know, 145 00:07:59,640 --> 00:08:02,560 Speaker 1: a sires and sellers and so on. But I mean, 146 00:08:02,600 --> 00:08:04,960 Speaker 1: it just reflects the ongoing change in the way that 147 00:08:05,040 --> 00:08:08,680 Speaker 1: the economy is represented in the financial markets right right. 148 00:08:08,760 --> 00:08:12,560 Speaker 1: And something that we've been discussing a lot is why Walgreens. 149 00:08:12,880 --> 00:08:15,880 Speaker 1: We've been trying to figure it out because with Walgreens 150 00:08:15,920 --> 00:08:18,160 Speaker 1: you can go both ways. Of course, it is actually 151 00:08:18,160 --> 00:08:20,560 Speaker 1: classified as a consumer staples company, but a lot of 152 00:08:20,560 --> 00:08:22,600 Speaker 1: people do think of it as a bit of a 153 00:08:22,680 --> 00:08:25,200 Speaker 1: healthcare company. So if you look at the waitings and 154 00:08:25,240 --> 00:08:28,280 Speaker 1: the members of the makeup of the Dow, consumer staples 155 00:08:28,320 --> 00:08:31,720 Speaker 1: hold about five point seven percent of the entire index, 156 00:08:31,880 --> 00:08:35,240 Speaker 1: but healthcare, on the other hand, holds about So is 157 00:08:35,280 --> 00:08:39,240 Speaker 1: this a safe way to get more at retail but 158 00:08:39,400 --> 00:08:42,280 Speaker 1: not get into traditional retail. Someone I spoke with this morning, 159 00:08:42,280 --> 00:08:43,760 Speaker 1: she said, you're not gonna add Mazis, You're not gonna 160 00:08:43,760 --> 00:08:45,440 Speaker 1: add J C. Penny. But is it kind of a 161 00:08:45,440 --> 00:08:48,520 Speaker 1: cop out? I also wonder, you know, just with respect 162 00:08:48,640 --> 00:08:52,200 Speaker 1: to General Electric getting booted, how much the company shares 163 00:08:52,240 --> 00:08:55,240 Speaker 1: will now decline further just to sort of a de 164 00:08:55,320 --> 00:08:59,160 Speaker 1: facto response to these indexed funds that are being forced 165 00:08:59,200 --> 00:09:02,800 Speaker 1: to sell the shares. And so I wonder if this 166 00:09:02,840 --> 00:09:05,920 Speaker 1: sort of creates a spine, and that includes exchange traded funds, 167 00:09:06,440 --> 00:09:09,600 Speaker 1: as you mentioned. But Goldman Sacks actually they came out 168 00:09:09,600 --> 00:09:11,880 Speaker 1: with an interesting note. I thought it was a bit contrarian, 169 00:09:11,880 --> 00:09:14,120 Speaker 1: because that's what you would think, um, But an analyst 170 00:09:14,200 --> 00:09:16,480 Speaker 1: over Goldman Sachs he actually found that stocks that have 171 00:09:16,520 --> 00:09:20,040 Speaker 1: been removed from the index recently have typically outperformed the 172 00:09:20,040 --> 00:09:22,520 Speaker 1: rest of the doubt over the next twelve months. And 173 00:09:22,559 --> 00:09:25,080 Speaker 1: some are saying, in a way, maybe this is good 174 00:09:25,480 --> 00:09:28,960 Speaker 1: for g E because maybe this takes off that label 175 00:09:29,000 --> 00:09:33,160 Speaker 1: of ge being that old, sturdy industrial company and maybe 176 00:09:33,160 --> 00:09:36,280 Speaker 1: it allows it to move forwards. Actually, Brooks Sutherland of 177 00:09:36,400 --> 00:09:39,839 Speaker 1: Bloomberg Opinion ort com and was discussing how perhaps this 178 00:09:39,960 --> 00:09:42,760 Speaker 1: freees up General Electric to think more radically about how 179 00:09:42,800 --> 00:09:46,120 Speaker 1: to reshape itself and perhaps to a wholesale breakup of 180 00:09:46,160 --> 00:09:48,760 Speaker 1: the company and really reckoned with some of the problems 181 00:09:48,760 --> 00:09:50,880 Speaker 1: that has been facing over the past few months. Yeah, 182 00:09:50,920 --> 00:09:52,839 Speaker 1: I mean, we'll definitely see going forwards, and it'll be 183 00:09:52,880 --> 00:09:55,160 Speaker 1: interesting to keep an eye on GEES price just because 184 00:09:55,200 --> 00:09:57,600 Speaker 1: it has been torn down so much over the past 185 00:09:57,679 --> 00:09:59,439 Speaker 1: year or even more a year or so. But it's 186 00:09:59,440 --> 00:10:02,080 Speaker 1: gonna be good for the shares of Walgreen. Oh yeah, 187 00:10:02,080 --> 00:10:03,959 Speaker 1: I mean if you look at Walgreen shares right now, 188 00:10:04,000 --> 00:10:06,920 Speaker 1: Walgreen shares are trading up about almost four and a 189 00:10:06,960 --> 00:10:09,280 Speaker 1: half percent, so we're seeing it reflected in the share 190 00:10:09,320 --> 00:10:11,880 Speaker 1: price today and I'm sure going forwards as it's added, 191 00:10:11,880 --> 00:10:14,200 Speaker 1: I think it's supposed to be effective Tuesday before the 192 00:10:14,200 --> 00:10:16,880 Speaker 1: open of the market. I'm sure we'll see a bit 193 00:10:16,920 --> 00:10:18,840 Speaker 1: of a of a booth there. Yeah, And just to 194 00:10:18,840 --> 00:10:23,080 Speaker 1: give you the perspective, Walgreens Boots Alliance has three hundred 195 00:10:23,200 --> 00:10:27,920 Speaker 1: and forty five thousand employees. Compare that to a General 196 00:10:27,960 --> 00:10:31,559 Speaker 1: Electric three hundred and thirteen thousand employees, So at least 197 00:10:31,600 --> 00:10:33,920 Speaker 1: in terms of a number of people work for the companies, 198 00:10:34,320 --> 00:10:37,680 Speaker 1: not dissimilar. And I will just make one additional note 199 00:10:37,679 --> 00:10:39,480 Speaker 1: that while we're talking about General Electric in the down 200 00:10:39,559 --> 00:10:42,960 Speaker 1: Jones index, uh, there are other index related decisions that 201 00:10:42,960 --> 00:10:45,320 Speaker 1: are affecting vast amounts of money right now as well. 202 00:10:45,360 --> 00:10:48,560 Speaker 1: For example, with respect to Saudi Arabia and Argentina both 203 00:10:48,600 --> 00:10:52,920 Speaker 1: looking for their inclusion m ms c I index, which 204 00:10:52,960 --> 00:10:55,240 Speaker 1: would affect six hundred billion dollars of assets. I mean 205 00:10:55,240 --> 00:10:58,880 Speaker 1: it's just these and just recently happened with China. That's 206 00:10:57,760 --> 00:11:02,199 Speaker 1: rights Leather. I'm gonna leave you with that last thought. 207 00:11:02,880 --> 00:11:12,000 Speaker 1: You know why the US leather company was an original 208 00:11:12,040 --> 00:11:16,200 Speaker 1: member of the TAO. The Thanks very much, Sarah Ponzac, 209 00:11:16,520 --> 00:11:37,240 Speaker 1: Bloomberg News, Cross Asset Reporter. All about general electric investing 210 00:11:37,320 --> 00:11:41,000 Speaker 1: in small and mid cap stocks, that's the specialty of 211 00:11:41,000 --> 00:11:43,520 Speaker 1: our next guest, Eric Kubi. He is the chief investment 212 00:11:43,520 --> 00:11:48,160 Speaker 1: officer for north Star Investment Management. They are based in Chicago. 213 00:11:48,520 --> 00:11:50,959 Speaker 1: Eric joins us though in our eleven three oh studios. Eric, 214 00:11:51,000 --> 00:11:52,960 Speaker 1: thank you very much for being with us. All right, 215 00:11:53,000 --> 00:11:54,640 Speaker 1: step up to the plate and tell us how do 216 00:11:54,720 --> 00:11:57,440 Speaker 1: you define small and mid cap stocks? And tell us 217 00:11:57,720 --> 00:12:01,640 Speaker 1: about the north Star dividend fun This is the symbol 218 00:12:02,040 --> 00:12:06,480 Speaker 1: is n s d v X right, great, well, thanks 219 00:12:06,480 --> 00:12:10,560 Speaker 1: for having me here. Um, So we define, uh, small 220 00:12:10,640 --> 00:12:13,839 Speaker 1: cap stocks as actually being companies that have market caps 221 00:12:13,920 --> 00:12:17,640 Speaker 1: under two and a half billion dollars. The definition changes. 222 00:12:17,720 --> 00:12:20,360 Speaker 1: I know, uh, when I first got into business, a 223 00:12:20,400 --> 00:12:22,439 Speaker 1: small cap stock probably had a market cap under a 224 00:12:22,480 --> 00:12:25,040 Speaker 1: hundred million dollars. So you you have to keep moving 225 00:12:25,080 --> 00:12:28,920 Speaker 1: with the times, um. But we focus actually on the 226 00:12:29,000 --> 00:12:31,600 Speaker 1: smaller end of the small cap stocks. The billion dollar 227 00:12:32,080 --> 00:12:35,959 Speaker 1: in under area. Alright. So you know, this is a 228 00:12:36,080 --> 00:12:39,199 Speaker 1: very important interview to be having right now because the 229 00:12:39,320 --> 00:12:41,280 Speaker 1: rust of two thousand, which is often viewed as a 230 00:12:41,360 --> 00:12:45,000 Speaker 1: proxy for smaller companies in the US, has been on 231 00:12:45,200 --> 00:12:48,160 Speaker 1: a terar. It has more returned more than twice as 232 00:12:48,240 --> 00:12:51,160 Speaker 1: much as the SMP five hundred and uh nearly three 233 00:12:51,160 --> 00:12:53,520 Speaker 1: times as much as the Dow Jones Industrial Index. So 234 00:12:53,760 --> 00:12:57,000 Speaker 1: I have to wonder, you know, right now many investors 235 00:12:57,000 --> 00:13:00,720 Speaker 1: are viewing small cap stocks as a haven in from 236 00:13:00,800 --> 00:13:05,040 Speaker 1: trade tensions because these companies are less exposed to any 237 00:13:05,120 --> 00:13:07,560 Speaker 1: economic impacts. Do you think that this is an accurate 238 00:13:07,600 --> 00:13:10,959 Speaker 1: bet so to a certain extent, Yeah, I mean, I 239 00:13:11,360 --> 00:13:15,000 Speaker 1: think that there are certain characteristics of small cap companies 240 00:13:15,160 --> 00:13:19,160 Speaker 1: which make them a haven from from what is concerning 241 00:13:19,200 --> 00:13:23,000 Speaker 1: the market right now. Most small cap companies don't do 242 00:13:23,200 --> 00:13:26,440 Speaker 1: much international business, so they're not going to be that 243 00:13:26,520 --> 00:13:30,120 Speaker 1: affected now. They're not immune because their supply chain still 244 00:13:30,960 --> 00:13:34,160 Speaker 1: is affected. Um and so I don't think that it's 245 00:13:34,360 --> 00:13:36,880 Speaker 1: a safe haven per se, but I do think it's 246 00:13:36,880 --> 00:13:40,080 Speaker 1: a good place to go into. The other aspect is 247 00:13:40,120 --> 00:13:43,680 Speaker 1: the dollar. The dollar has strengthened quite a bit. Again, 248 00:13:43,720 --> 00:13:46,760 Speaker 1: that's typically good for small cap companies. That shows the 249 00:13:47,000 --> 00:13:50,760 Speaker 1: domestic economy is strong, and also they're not exporting, so 250 00:13:50,800 --> 00:13:54,319 Speaker 1: the strong dollar doesn't hurt them. Again, largely, I think 251 00:13:54,360 --> 00:13:58,000 Speaker 1: what's happening is a rotation. Two thousand seventeen was the 252 00:13:58,080 --> 00:14:01,000 Speaker 1: year of the large cap growth stock. The entire year, 253 00:14:01,080 --> 00:14:06,120 Speaker 1: twelve months in a row, uninterrupted through January uninterrupted large 254 00:14:06,160 --> 00:14:08,840 Speaker 1: cap growth stocks. And since then there's been a rotation 255 00:14:09,240 --> 00:14:11,960 Speaker 1: into small cap companies, mainly into the Russell two thousand, 256 00:14:12,520 --> 00:14:15,280 Speaker 1: because people like to index, and I don't think that 257 00:14:15,280 --> 00:14:17,880 Speaker 1: that's really the right way to do it because within 258 00:14:17,920 --> 00:14:20,240 Speaker 1: the index, you know, there's a lot of companies that 259 00:14:20,240 --> 00:14:23,560 Speaker 1: aren't benefiting from the corporate tax cut, that aren't benefiting 260 00:14:23,600 --> 00:14:26,800 Speaker 1: from the strong dollar. But so we like, we like 261 00:14:26,880 --> 00:14:29,440 Speaker 1: more specific small cap companies. But it's the easy trade, 262 00:14:29,480 --> 00:14:31,600 Speaker 1: is the Russell two thousand. People like the easy trade. 263 00:14:31,760 --> 00:14:34,000 Speaker 1: All Right, I'm gonna ask Lisa to check your footwear 264 00:14:34,240 --> 00:14:36,760 Speaker 1: right now, because I want you to talk about a 265 00:14:36,760 --> 00:14:39,360 Speaker 1: company that I know is in the portfolio. This is 266 00:14:39,480 --> 00:14:44,560 Speaker 1: Rocky Brands out of Nelsonville, Ohio. How did you find 267 00:14:44,600 --> 00:14:47,200 Speaker 1: nelson How did you find uh Rocky Brands? That? Do 268 00:14:47,280 --> 00:14:53,920 Speaker 1: you want my report? Okay, come on. They're they're pretty classic, alright, 269 00:14:55,160 --> 00:14:59,600 Speaker 1: black office shoes, no boots today. All right. So we 270 00:14:59,680 --> 00:15:02,320 Speaker 1: found Rocky the same way we find most of our companies, 271 00:15:02,360 --> 00:15:05,480 Speaker 1: which is we screen. We're screening for companies in our 272 00:15:05,520 --> 00:15:09,640 Speaker 1: market cap arena that are had nice dividend yields. We 273 00:15:09,800 --> 00:15:12,040 Speaker 1: when we bought Rocky, it was over three percent. That's 274 00:15:12,040 --> 00:15:15,120 Speaker 1: our dividend screen was over three and it was trading 275 00:15:15,120 --> 00:15:22,040 Speaker 1: extraordinarily cheaply versus book value versus their earnings. UH and UH, 276 00:15:22,320 --> 00:15:24,800 Speaker 1: what's happened is their business has gone It's had a 277 00:15:24,880 --> 00:15:28,440 Speaker 1: terrific year. All of their markets are doing really well, 278 00:15:29,040 --> 00:15:34,280 Speaker 1: outdoor work, Western and military. They also do um a 279 00:15:34,360 --> 00:15:39,119 Speaker 1: great business with UH with companies. About two million employees 280 00:15:39,200 --> 00:15:42,240 Speaker 1: have to wear protected footwear in the country, and they've 281 00:15:42,240 --> 00:15:46,000 Speaker 1: got a great system for delivering the right footwear that 282 00:15:46,120 --> 00:15:48,000 Speaker 1: companies need to buy for their employees. So it's been 283 00:15:48,120 --> 00:15:51,960 Speaker 1: terrific company having a fantastic year. If you go down 284 00:15:52,000 --> 00:15:55,080 Speaker 1: the list, some of the other names that you identify, McGrath, 285 00:15:55,160 --> 00:16:00,320 Speaker 1: rent Corps, Brooks Automation, BG Staffing, among others. Just want 286 00:16:00,320 --> 00:16:02,160 Speaker 1: to get your sense real quick. We have about a 287 00:16:02,160 --> 00:16:05,240 Speaker 1: minute here on just the U S economy. From the 288 00:16:05,280 --> 00:16:10,720 Speaker 1: small business perspective, are you hearing from leaders of the 289 00:16:10,760 --> 00:16:14,000 Speaker 1: companies that we are peaking and that their profits and 290 00:16:14,040 --> 00:16:16,840 Speaker 1: potential are peaking, or that this is the beginning of 291 00:16:17,040 --> 00:16:21,360 Speaker 1: another sort of leg up in this business cycle. Small 292 00:16:21,360 --> 00:16:24,360 Speaker 1: business optimisms at all time high. When I talk to 293 00:16:24,480 --> 00:16:29,000 Speaker 1: company managements, they sound very enthusiastic about the near and 294 00:16:29,160 --> 00:16:34,120 Speaker 1: intermediate term. Uh, there is some concern about the you 295 00:16:34,120 --> 00:16:36,080 Speaker 1: know again, some of the tearoffs, how that's going to 296 00:16:36,120 --> 00:16:38,640 Speaker 1: affect them, what's going to happen to the consumer if 297 00:16:38,680 --> 00:16:42,440 Speaker 1: there is inflation. But we talked to CEOs all the time, 298 00:16:42,520 --> 00:16:46,560 Speaker 1: and uniformly they feel great about the future, very positive, 299 00:16:47,080 --> 00:16:49,200 Speaker 1: and they can hire people and they and they're looking 300 00:16:49,240 --> 00:16:51,120 Speaker 1: to hire people. And b G Staffing, which is a 301 00:16:51,160 --> 00:16:54,680 Speaker 1: temporary help firm, is doing a good job of helping 302 00:16:54,720 --> 00:16:58,320 Speaker 1: companies find people to hire. So employment is terrific and 303 00:16:58,360 --> 00:17:01,080 Speaker 1: they're looking to hire people all. Eric kubi thank you 304 00:17:01,080 --> 00:17:03,280 Speaker 1: so much for joining us. Eric Kuby is chief investment 305 00:17:03,280 --> 00:17:07,240 Speaker 1: officer at north Star Investment Management, which is based in Chicago. 306 00:17:07,320 --> 00:17:10,920 Speaker 1: But he checked out here to a sultry New York 307 00:17:10,960 --> 00:17:15,520 Speaker 1: City where we're enjoying some really Uh maybe maybe he 308 00:17:15,600 --> 00:17:19,360 Speaker 1: trecked wearing his Rocky brand boots. Yeah. Maybe, although if 309 00:17:19,359 --> 00:17:21,040 Speaker 1: you have to take those off and then then then 310 00:17:21,080 --> 00:17:23,520 Speaker 1: lay them back up again when you're going through security, 311 00:17:24,000 --> 00:17:25,800 Speaker 1: it might be in might PN conference, I always used 312 00:17:25,800 --> 00:17:42,240 Speaker 1: slip on there is a profound dissonance in markets these days. 313 00:17:42,359 --> 00:17:46,879 Speaker 1: If you look at the political headlines crossing UH highlights 314 00:17:46,960 --> 00:17:51,280 Speaker 1: a deep polarization of several nations and a sense of 315 00:17:51,480 --> 00:17:54,240 Speaker 1: high drama. If you look at the markets, the drama 316 00:17:54,440 --> 00:17:57,879 Speaker 1: is not. They're joining us to talk about uh, you know, 317 00:17:57,960 --> 00:18:01,360 Speaker 1: just how to view tariff hawk and other sort of 318 00:18:01,680 --> 00:18:04,959 Speaker 1: uh policy driven news that we've been getting. From an 319 00:18:04,960 --> 00:18:08,080 Speaker 1: investing standpoint. Is Mark Freeman, chief investment officer at Westwood 320 00:18:08,280 --> 00:18:10,440 Speaker 1: Holdings Group, and he joins us here in our eleven 321 00:18:10,480 --> 00:18:14,080 Speaker 1: three oh studios. So at what point, Mark, do you 322 00:18:14,160 --> 00:18:19,280 Speaker 1: start to change your allocations in light of the tariff 323 00:18:19,280 --> 00:18:21,240 Speaker 1: discussions that we've been getting in the back and forth 324 00:18:21,280 --> 00:18:24,600 Speaker 1: between Jun Ping and and Donald Trump. Yeah. Well, first, 325 00:18:24,760 --> 00:18:26,960 Speaker 1: great to be with you. Um, I think you raised 326 00:18:26,960 --> 00:18:30,080 Speaker 1: a real key point, certainly for investors. I think ultimately 327 00:18:30,080 --> 00:18:33,800 Speaker 1: what we have to differentiate in this in this areas 328 00:18:33,880 --> 00:18:36,719 Speaker 1: is that ultimately, when do these issues tariffs obviously your 329 00:18:36,760 --> 00:18:39,960 Speaker 1: front and foremost. But when do these issues move from 330 00:18:40,000 --> 00:18:42,480 Speaker 1: being what I would say, impacting the multiple, which is 331 00:18:42,520 --> 00:18:46,040 Speaker 1: a confidence gauge, and impacting on that, but moved from 332 00:18:46,119 --> 00:18:49,919 Speaker 1: that to being an earnings factor, because that's ultimately it's 333 00:18:49,960 --> 00:18:52,600 Speaker 1: when it becomes a much more significant issue for the market. 334 00:18:52,960 --> 00:18:55,520 Speaker 1: Right now, we're seeing it from a volatility standpoint, and 335 00:18:55,520 --> 00:18:58,080 Speaker 1: that's why when I say it impacts the multiple, you're 336 00:18:58,080 --> 00:19:01,080 Speaker 1: seeing volatility or changes in in that. But when it 337 00:19:01,119 --> 00:19:04,080 Speaker 1: becomes a much more fundamental issue is when you actually 338 00:19:04,080 --> 00:19:06,879 Speaker 1: start to see it impact either actual or earnings or 339 00:19:06,920 --> 00:19:10,320 Speaker 1: perhaps even more importantly, the market's expectation for for what 340 00:19:10,480 --> 00:19:13,520 Speaker 1: future earnings will be. That that's that that's when it 341 00:19:13,560 --> 00:19:17,199 Speaker 1: becomes an important issue. Okay, So just so so that 342 00:19:17,560 --> 00:19:20,600 Speaker 1: we're clear here, it's about the difference between what investors 343 00:19:20,600 --> 00:19:23,600 Speaker 1: are willing to pay for every dollar of earnings, that's 344 00:19:23,600 --> 00:19:27,480 Speaker 1: what they're willing to pay, versus the actual performance of 345 00:19:27,520 --> 00:19:29,679 Speaker 1: the company. So there are two kind of different things 346 00:19:30,160 --> 00:19:33,440 Speaker 1: exactly right. Okay from there, all right, now, I want 347 00:19:33,480 --> 00:19:36,520 Speaker 1: to get to the point about cash because I know 348 00:19:36,600 --> 00:19:40,399 Speaker 1: you you you help manage the Westwood UH Fund. This 349 00:19:40,520 --> 00:19:43,600 Speaker 1: is w h G I X right, and this is 350 00:19:43,640 --> 00:19:48,320 Speaker 1: the Westwood Income Opportunities Fund. Do you recommend people hold 351 00:19:48,359 --> 00:19:50,840 Speaker 1: onto a decent amount of cash now or do you 352 00:19:50,880 --> 00:19:53,679 Speaker 1: want to be fully invested? Well, I think in this 353 00:19:53,800 --> 00:19:56,760 Speaker 1: environment and our view is as we go forward, that volatility, 354 00:19:56,760 --> 00:19:59,920 Speaker 1: which has been largely absent prior coming into this year, 355 00:20:00,160 --> 00:20:03,320 Speaker 1: but that volatility will normalize. And that's just another way 356 00:20:03,320 --> 00:20:06,639 Speaker 1: of saying returned back to where it was prior to 357 00:20:06,760 --> 00:20:09,960 Speaker 1: the UH, prior to the to the Great Financial Crisis 358 00:20:09,960 --> 00:20:12,439 Speaker 1: and that. But basically the volatility going forward will be higher. 359 00:20:12,560 --> 00:20:15,080 Speaker 1: So whether it's issues like this or some other items 360 00:20:15,240 --> 00:20:17,440 Speaker 1: from there, we expect volatility to go back to more 361 00:20:17,480 --> 00:20:21,680 Speaker 1: normalized level. Under that assumption, we would advocate holding at 362 00:20:21,720 --> 00:20:25,240 Speaker 1: least some cash. Now we can define what is significant 363 00:20:25,359 --> 00:20:28,640 Speaker 1: or how much that is for us, that's typically between 364 00:20:28,760 --> 00:20:31,560 Speaker 1: say six two maybe ten percent cash. We view that 365 00:20:31,600 --> 00:20:33,520 Speaker 1: as just be it so, and what that allows you 366 00:20:33,560 --> 00:20:35,879 Speaker 1: to do is to be opportunistic. It's not it's not so, 367 00:20:35,960 --> 00:20:38,160 Speaker 1: you just keep it and it's there. But I think 368 00:20:38,200 --> 00:20:40,120 Speaker 1: the other thing that that's that at the margin, which 369 00:20:40,119 --> 00:20:42,480 Speaker 1: now starting to matter and which is very different where 370 00:20:42,480 --> 00:20:44,280 Speaker 1: we've been roughly from the last decade, is now the 371 00:20:44,359 --> 00:20:47,119 Speaker 1: rate of return on cash has actually moved up. I 372 00:20:47,119 --> 00:20:48,440 Speaker 1: mean that is one of the things that the FED, 373 00:20:48,480 --> 00:20:51,320 Speaker 1: from a tightening standpoint, has has probably impacted the most 374 00:20:51,400 --> 00:20:54,000 Speaker 1: is actually the rate on cash and is that continues 375 00:20:54,280 --> 00:20:57,080 Speaker 1: If that continues to drift up, which it seems most 376 00:20:57,119 --> 00:20:59,280 Speaker 1: likely that FED is very much committed to continuing to 377 00:20:59,359 --> 00:21:02,320 Speaker 1: raise rates, then that's another. So now the opportunity cost 378 00:21:02,680 --> 00:21:06,000 Speaker 1: is diminishing on that front. But I think in this 379 00:21:06,119 --> 00:21:09,880 Speaker 1: environment and allowing to be opportunistic makes sense. I ask 380 00:21:09,920 --> 00:21:11,960 Speaker 1: a lot of people this, and I'd love to get 381 00:21:11,960 --> 00:21:14,399 Speaker 1: your response to it. Almost the last time that you 382 00:21:15,000 --> 00:21:18,199 Speaker 1: made it significant change to your allocations in your portfolios. 383 00:21:18,720 --> 00:21:21,840 Speaker 1: Oh goodness. Um, well, in terms of our specific income 384 00:21:21,840 --> 00:21:25,480 Speaker 1: opportunity strategy, we use up to eight different asset classes 385 00:21:25,520 --> 00:21:28,920 Speaker 1: and those are changing literally on a quarterly basis. It's 386 00:21:28,960 --> 00:21:31,480 Speaker 1: ultimately driven though by the market environment and where we're 387 00:21:31,480 --> 00:21:34,679 Speaker 1: seeing opportunities and where things perhaps are getting repriced, and 388 00:21:34,680 --> 00:21:38,480 Speaker 1: so it's moving. It shifts, uh, incrementally, you know, on 389 00:21:38,520 --> 00:21:40,920 Speaker 1: a quarterly basis, even on sometimes on a weekly basis, 390 00:21:41,000 --> 00:21:44,040 Speaker 1: but but over time it does change rather significantly. So 391 00:21:44,160 --> 00:21:47,080 Speaker 1: what's been the most recent significant change that you made 392 00:21:47,080 --> 00:21:49,440 Speaker 1: an allocation. I think one of the things is actually 393 00:21:49,560 --> 00:21:51,840 Speaker 1: is is a couple of a couple of different areas. 394 00:21:52,080 --> 00:21:54,760 Speaker 1: One look, there is being some repricing on the short 395 00:21:54,840 --> 00:21:56,639 Speaker 1: end of the Yeld curve, and so we're using that 396 00:21:56,760 --> 00:21:59,280 Speaker 1: implementing some of our cash we've had, our higher cash balance. 397 00:21:59,320 --> 00:22:01,440 Speaker 1: We can now use that to add some incremental yield 398 00:22:02,040 --> 00:22:04,640 Speaker 1: for that UM in another part of the capital structure 399 00:22:04,640 --> 00:22:07,200 Speaker 1: of the preferred market. And so there we're not to 400 00:22:07,200 --> 00:22:09,399 Speaker 1: get too technical, but where we can use what we 401 00:22:09,440 --> 00:22:12,119 Speaker 1: call they're called hybrids, but they're just floating right securities. 402 00:22:12,359 --> 00:22:14,720 Speaker 1: They have a shorter duration than a typical preferred, but 403 00:22:14,760 --> 00:22:17,400 Speaker 1: then they become a floater after either three years five 404 00:22:17,480 --> 00:22:20,120 Speaker 1: years with a nice reset. And so if our expectations 405 00:22:20,119 --> 00:22:22,479 Speaker 1: are that short rates and fed rates continue to move up, 406 00:22:22,960 --> 00:22:25,080 Speaker 1: that's kind of a way for us to participate in 407 00:22:25,119 --> 00:22:27,720 Speaker 1: that and still learned some attractive yield. And then the 408 00:22:27,720 --> 00:22:30,520 Speaker 1: other area we're still in our largest components is still 409 00:22:30,520 --> 00:22:32,879 Speaker 1: in the equity market. I want to ask you about 410 00:22:32,920 --> 00:22:35,159 Speaker 1: one area of the equity market, and this is a 411 00:22:35,200 --> 00:22:38,800 Speaker 1: transportation because I noticed you got a position in FedEx 412 00:22:39,600 --> 00:22:42,600 Speaker 1: and I was reading a story today that UM logistic 413 00:22:42,720 --> 00:22:46,600 Speaker 1: costs have really accelerated there, up about six percent year 414 00:22:46,680 --> 00:22:49,600 Speaker 1: over year, and I would imagine that that's got to 415 00:22:49,640 --> 00:22:52,520 Speaker 1: benefit a company like FedEx if they can pass along 416 00:22:52,560 --> 00:22:57,480 Speaker 1: those increased costs of consumers. That's that's a fundamental part 417 00:22:57,480 --> 00:22:59,440 Speaker 1: of our thesis, and in terms of owning the name 418 00:22:59,560 --> 00:23:02,760 Speaker 1: and just kind of give you, um, not not necessarily 419 00:23:02,760 --> 00:23:07,600 Speaker 1: an anecdotal um. Uh. Example of that is that if 420 00:23:07,640 --> 00:23:11,119 Speaker 1: you look at the consumer staples sector and many of 421 00:23:11,119 --> 00:23:13,520 Speaker 1: those companies when they were reporting that, they were saying, look, 422 00:23:14,080 --> 00:23:16,320 Speaker 1: we knew in demand was a problem, but now we're 423 00:23:16,359 --> 00:23:20,200 Speaker 1: facing cost pressures. And then more specifically, we're facing cost 424 00:23:20,240 --> 00:23:22,840 Speaker 1: pressures on the transportation front. I heard that from the clus, 425 00:23:23,960 --> 00:23:27,720 Speaker 1: General Mills, others, they've all highlighted that. And so so 426 00:23:27,920 --> 00:23:31,399 Speaker 1: one company's cost pressures is another company's pricing power. And 427 00:23:31,480 --> 00:23:33,960 Speaker 1: so if we're like, okay, well then maybe let's take 428 00:23:33,960 --> 00:23:35,840 Speaker 1: a look at the company that has pricing power, and 429 00:23:35,960 --> 00:23:39,159 Speaker 1: FedEx I think is a classic example of that. What 430 00:23:39,200 --> 00:23:41,160 Speaker 1: do you think is the biggest mistake that many investors 431 00:23:41,200 --> 00:23:47,320 Speaker 1: are making? Today? Oh? Gosh, um, that's that's that's a 432 00:23:47,640 --> 00:23:50,800 Speaker 1: that's a great question. Um. To me, it's about I 433 00:23:50,840 --> 00:23:53,919 Speaker 1: think it would be understanding. Maybe a mistake, but I 434 00:23:53,920 --> 00:23:58,000 Speaker 1: think in terms of of understanding from a process standpoint, 435 00:23:58,160 --> 00:24:00,960 Speaker 1: one of the things that we UM have been communicating 436 00:24:01,000 --> 00:24:05,320 Speaker 1: to UM, to our investors and to others is that, look, 437 00:24:05,520 --> 00:24:08,840 Speaker 1: don't lose sight of how the process works UM in 438 00:24:08,960 --> 00:24:13,280 Speaker 1: terms of look, profit the market eventually always follows profit growth. Okay, 439 00:24:13,280 --> 00:24:16,439 Speaker 1: so profits are item number one. So profit lead the 440 00:24:16,480 --> 00:24:20,439 Speaker 1: market and the market UM leads the economy. The problem 441 00:24:20,480 --> 00:24:24,040 Speaker 1: is the investors to from a from a relationship standpoint, 442 00:24:24,080 --> 00:24:26,080 Speaker 1: they tend to think of it is exactly the opposite. 443 00:24:26,320 --> 00:24:28,800 Speaker 1: And that's why so many times you see retail investors 444 00:24:28,800 --> 00:24:30,800 Speaker 1: are saying, Okay, the time to invest is when the 445 00:24:30,800 --> 00:24:33,240 Speaker 1: economy is doing really, really well, because then that's going 446 00:24:33,280 --> 00:24:35,080 Speaker 1: to be good for the market, and then therefore that 447 00:24:35,080 --> 00:24:38,159 Speaker 1: should be good for for profits. It's it's exactly the opposite. 448 00:24:38,200 --> 00:24:40,280 Speaker 1: And so we're really just trying to highlight to people 449 00:24:40,560 --> 00:24:44,200 Speaker 1: that ultimately, despite look, I'm not saying all these more 450 00:24:44,240 --> 00:24:47,159 Speaker 1: politically oriented items and things like that aren't important, but 451 00:24:47,240 --> 00:24:49,560 Speaker 1: it ultimately comes back to the fundamentals for the market, 452 00:24:49,960 --> 00:24:52,280 Speaker 1: and that then the single most important fundamental for the 453 00:24:52,320 --> 00:24:55,120 Speaker 1: market is ultimately is profit growth. And what that looks 454 00:24:55,200 --> 00:24:58,639 Speaker 1: like and following that for going going forward there. I 455 00:24:58,640 --> 00:25:00,280 Speaker 1: want to thank you very much for being with us. 456 00:25:00,359 --> 00:25:02,240 Speaker 1: Much appreciate it. It's much pleasure to having you in 457 00:25:02,280 --> 00:25:05,399 Speaker 1: the future. Mark Freeman is the chief investment Officer of 458 00:25:05,440 --> 00:25:08,920 Speaker 1: a Westwood Holdings Group. They are based in Dallas, Texas, 459 00:25:09,359 --> 00:25:17,280 Speaker 1: and much appreciated. Very interesting conversation. Thanks for listening to 460 00:25:17,320 --> 00:25:20,199 Speaker 1: the Bloomberg P and L podcast. You can subscribe and 461 00:25:20,240 --> 00:25:24,240 Speaker 1: listen to interviews at Apple Podcasts, SoundCloud, or whatever podcast 462 00:25:24,240 --> 00:25:27,720 Speaker 1: platform you prefer. I'm pim Fox. I'm on Twitter at 463 00:25:27,880 --> 00:25:31,280 Speaker 1: pim Fox. I'm on Twitter at Lisa Abramo. It's one 464 00:25:31,520 --> 00:25:34,199 Speaker 1: before the podcast. You can always catch us worldwide on 465 00:25:34,240 --> 00:25:35,080 Speaker 1: Bloomberg Radio.