00:00:02 Speaker 1: Bloomberg Audio Studios. 00:00:04 Speaker 2: Podcasts. 00:00:05 Speaker 3: Radio. News. 00:00:12 Speaker 1: This is the Bloomberg Surveillance Podcast. Catch us live weekdays at 7 a.m. Eastern on Apple CarPlay or Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. 00:00:27 Speaker 4: Darna Roth joins us right now. I want you to walk through, Michael, the impact of back-to-back quarters of boom economy nominal GDP. I talked to everybody at Jackson Hole about the world of Michael Darda. What does it mean to have a boom nominal GDP? 00:00:47 Speaker 3: Thanks for having me on, Tom. Yeah, these numbers are quite something. So if we look at the private final sales, so it's nominal GDP for the private sector focusing on consumption and investment. we actually ran it just above a 9% pace in Q2. And the tracking estimates for the third quarter are very high. So inflation is expected to come down into the mid twos, but you know, it looks like we could print another huge quarter for real final sales, you know, even above 4%. So that would get you to about seven. And so if that's truly the underlying pace, then the Fed is way behind the curve and needs to tighten monetary policy. But there's a crucial caveat here. We're not really seeing that momentum in the nominal or money income proxies. They've been much steadier. And we've seen a decline in real income growth because of the energy shock. Bond market inflation expectations that are forward-looking are not priced for a 7% to 9% nominal economy. So I think the fourth quarter of this year is going to be the tell. And, you know, we'll see whether the Fed raises rates before that. 00:02:09 Speaker 5: It looks like they're locked and loaded. So the critical. 00:02:13 Speaker 4: Distinction here, Michael, from your work with Jude Winansky years ago is how exposed is the Warsh Fed? I mean, to me, the answer is with all the blather, all the Michael McKee analysis, they're going to wait and wait and wait and wait and be massively exposed. Am I wrong? 00:02:32 Speaker 3: Well, you know, that, you know, that is one criticism that, you know, the economy is heating up. And if the Fed is sitting there, you know, you essentially have a passive easing of monetary policy and then they're going to have to catch up later on. And that could create volatility that threatens the business cycle. But we're really not getting that from credit markets, Tom. You know, if you look at inflation expectations, even with energy prices running back up towards the highs of the year, you know, we're seeing inflation expectations at the five and 10 year horizons just sitting there just above two, consistent with price stability. And futures markets are only pricing in a few rate hikes from here. And that's not indicative of the Fed being way off sides, for example, like it was coming into 2022, when the breakeven markets on a forward-looking basis were running away from the Fed. Nominal growth was running away from the Fed. We were in a huge V-shaped recovery, and the Fed was lock, stock, and barrel focused on the previous business cycle, which was utterly irrelevant. That's not taking shape today. 00:03:40 Speaker 2: What did you make, Michael, from Fed Chairman Warsh's comments and performance at Jackson Hole last week? 00:03:46 Speaker 3: Well, Paul, you probably also noticed that he started his talk with an analogy about taking hikes with different monetary luminaries. There was a Donald Cohen hike, which was a you know, one that would, you know, potentially take you to the brink of death. And then the Bernanke hike, which was much more leisurely. I mean, you know, markets, you didn't, you know, the subtlety wasn't lost on the market. And so you had those Fed tightening expectations push back up over 50%. You know, we're well above that now. And, you know, it could simply be that the consensus of the committee has shifted, right? Now, under the feet of the new chairman. And is he going to is he going to take a vote where he's outvoted by. 00:04:35 Speaker 4: The rest of the committee? 00:04:36 Speaker 5: They're ready to raise policy rates. 00:04:38 Speaker 3: I don't think so. 00:04:39 Speaker 4: Oh, I so agree with what you just said. And I can't say it. Michael Darter with us, Roth Capital, red and green on the screen here, the VIX 15.36. OK, Paul, this is John from Atlantic, Atlantic Highlands. Do you know where that is? 00:04:55 Speaker 6: Oh, sure. 00:04:55 Speaker 7: That's highfalutin. 00:04:56 Speaker 4: It's like is that was that fancy? 00:04:58 Speaker 8: Yeah. 00:04:59 Speaker 4: Tom, are you trying to look like Grizzly Adams? No, I'm trying to look like Michael Darda. For those of you on the radar, Darda's rocking the Labor Day beard, too. 00:05:08 Speaker 3: Okay. 00:05:08 Speaker 5: I didn't know that was a look. 00:05:10 Speaker 4: Okay. Mike from Bedford said, Tom, lose it. But other than that, Paul Sweeney with Michael Darda. 00:05:17 Speaker 2: Michael, tomorrow we're going to get a labor data point here, change in nonfarm payrolls, consensus 55,000. 00:05:21 Speaker 7: How's the U.S. labor market out there, do you think? 00:05:25 Speaker 3: The labor market has looked steady, if unspectacular. We're not getting any signs of overheating from any of the labor market indicators. I mean, obviously, on the employment payroll side, we were soft this past month. And the labor market has also absorbed a lot of shocks with the shuttering of the border. At the same time, the unemployment rate has been at the same level for two years now. That's typically a situation you see when the economy is growing at about the growth rate of potential. So steady if unspectacular. Certainly no run-up in wage growth that would look inflationary, although Fed Chair Walsh basically took the wage indicators away. and threw them off a clip in the Jackson Hole speech, citing a paper that argued they were lagging indicators of the business cycle. So he's not going to be focused there in terms of the front edge of inflation. But I still think they're helpful in an environment where you've absorbed repeat supply side shocks. The fact that nominal wages are slow and steady is And inflation expectations, which are a market-based forward-looking indicator, are also low and steady and anchored. You know, that tells me the Fed's not hugely offsides here. 00:06:44 Speaker 4: All right, Michael, take a memo. Take off Monday, and then we'll get you back on next week. I think these conversations on the animal spirit of the country, our nominal GDP, just so, so important. Mr. Darda with Roth Capital Partners. Stay with us. 00:07:01 Speaker 9: More from Bloomberg Surveillance coming up after this. 00:07:11 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10 a.m. 00:07:17 Speaker 10: Eastern. 00:07:17 Speaker 1: Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube. 00:07:24 Speaker 4: Scott Cronin with us right now, head of U.S. Equity Strategy at Citi. I'll be honest, sort of like my interview of the day. Scott, what are you writing in the after Labor Day memo? 00:07:36 Speaker 6: Well, what I'm writing, Tom, and it's good to be on the show with Paul, is that we need to get through this. The way we're looking at the setup into year end is that we have to get over the hump on that. We need to look at the ongoing trend in oil prices. And the question comes up all the time on the midterms. But at the end of the day, we think the path of least resistance is up into the ride into the end of the year. 00:08:00 Speaker 4: I mean, the bottom line is— and Paul, help me here. Sweeney's been in the street— I mean, you and Cronin actually were on speaking terms, weren't you? 00:08:07 Speaker 7: Scott ran the West Coast when I was a Southside analyst. 00:08:09 Speaker 4: Yeah, I mean, like, you know. 00:08:10 Speaker 5: Paul's still my favorite health care analyst. I mean, come on. 00:08:14 Speaker 4: I mean, look at this, you two. Ending September 30, earnings middle of October, October 14, 15, 16, J.P. Morgan. Okay, fine. And the answer is nothing's going to change. They're still going to be great, right? 00:08:27 Speaker 10: Yeah. 00:08:27 Speaker 2: I mean, Scott, this has been a market really driven by earnings and just extraordinary earnings growth in the first half of this year. How do you guys at Citi think about the back half going into 2027? 00:08:40 Speaker 5: Actually, it's a really important discussion. 00:08:43 Speaker 6: Beginning of the year, consensus earnings for the index this year was about 312. We're currently standing at 363. This is phenomenal in terms of the improvement in consensus expectations. There's a big asterisk we got to put on this, though, and that's the write-up of assets that so many of these media companies have passed through in the Q1 and even more so in the Q2 reporting period. So a lot of the earnings growth has come from what we'd say non-operating items. And what that means is that they're very hard to project out into 2027. So the way this is going to set up As we get closer to the end of the year, we're going to forget about the write-ups in Q1 and Q2. We're going to look at 27 and say, but wait a minute, the growth is going to decelerate pretty materially from 26. 00:09:29 Speaker 5: What do we do? 00:09:32 Speaker 7: And I think. 00:09:32 Speaker 6: That discussion is going. 00:09:34 Speaker 5: To be front and center, I think. 00:09:36 Speaker 2: So is this a sense that maybe we can have to rely on multiple expansion going into next year? Because 2026 has been a year, again, driven by earnings more than multiple actions. 00:09:48 Speaker 6: Yeah, well, I think what's going to happen is it's going to be a combination. I'm going to characterize it a little bit differently, Paul. I think the market, the way we're talking about it, the market's discounting 26 and probably 27 earnings. particularly for the AI-influenced part of the market. But it doesn't know what to do about 28 to 30, okay? 00:10:09 Speaker 5: You see the. 00:10:09 Speaker 6: CapEx projections that take you higher into the end of the decade, but the market is deservedly concerned about the implications. 00:10:18 Speaker 5: Of that, both positive and negative. 00:10:21 Speaker 6: And that's why you're getting a lot of volatility back and forth between semis at one point, software another, hardware sneaks in. You've got the- You know, the comm services component, it's going to continue very fluid. But I think ultimately, ultimately, it's going to be, yeah, 27 is going to be pretty good, barring a recession. It's a question of how aggressive do you get about 28 and beyond. 00:10:44 Speaker 4: Scott, you know, Kate Moore darkened the door out in Jackson Hole. She was very polite. She was in the rain. 00:10:49 Speaker 7: Okay. Yeah, I saw her. 00:10:49 Speaker 4: Grandma had an umbrella. 00:10:50 Speaker 7: You guys were getting dumped on that one day. 00:10:52 Speaker 4: But Kate Moore toughed it out. She had her L.L. Beans on and her Mac and Mac and all, you know, the raincoat and all that. Scott, both of you are optimistic. What money market yield tips things over where people just stop moving money flow into equities? 00:11:07 Speaker 6: Well, I'm not sure it's money markets, Tom, but my line in the sand is 480-10 year on the way to 5. And we've run into issues with that over the past two, not three years. The issue with the money market fund dynamic and I hate to conjure this up again, but honestly, it didn't have the desired impact that you would have expected from a Fed rate hike cycle because the wealthier part of the income distribution flat out benefits from it. 00:11:38 Speaker 5: They're net savers. They got most of the equity assets. 00:11:40 Speaker 6: And what you're giving them is a bit of a high five on higher on higher money market rates. 00:11:45 Speaker 4: Interesting. Scott, thank you so much for the brief. Scott Conner had a U.S. equity strategy at Citigroup. Stay with us. 00:11:53 Speaker 9: More from Bloomberg Surveillance coming up after this. 00:12:04 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10 a.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube. 00:12:17 Speaker 4: Head of crowding out theory at Wellington Management Boston, Lauren Moran joins us. Right now. I mean, is your world crowding out or troubled, I should say, by the massive full faith and credit U.S. debt and deficits? 00:12:32 Speaker 11: Yeah, I think it's a great question, and it's clearly what bond markets are grappling with right now. We sit near the highs, even though we've seen retracement. How many beeps? 00:12:40 Speaker 4: I mean, is it teens, weens, or can you measure it? 00:12:43 Speaker 11: You know, I think it's hard to say, but I think when you think about the sheer paramount of debt that we're seeing both from the U.S. Treasury, from global sovereign markets, in all developed markets, this is not a U.S.-centric phenomenon. And then in addition to the AI CapEx, you know, we're looking at 2027 issuance in dollars of over four trillion potentially. This is a lot for markets to absorb. And I think that's what rates markets are telling you right now is there is a price to gain to get access to capital. It's not that you can't price it. 00:13:15 Speaker 8: It's that it will cost you. 00:13:17 Speaker 11: More and it will cost the U.S. government more and it will cost corporates more. 00:13:21 Speaker 7: Spreads, though. 00:13:22 Speaker 5: And are still very tight. 00:13:23 Speaker 7: Is that right? Talk to us about what the markets tell us there. 00:13:27 Speaker 8: Yeah, it's fascinating. 00:13:28 Speaker 11: Obviously, as we think about the shift, it's really been a shift off of debt with consumers, debt with household balance sheets look fine. Corporate balance sheets are starting to relever but are not problematic. The bulk of the debt growth is really on sovereign balance sheets globally and developed market sovereigns. When you think about the corporate spreads, Corporate spreads as a percentage of your all-in yields is only around 14% right now. And so I think that's the challenging part when people look at all-in yields being attractive. That's your sovereign yield. 00:14:01 Speaker 8: That's attractive. 00:14:03 Speaker 11: And so the question of, are you getting paid for that incremental risk? And I think that's a challenge. And when I think overall at Wellington, how we're thinking about it, is this a challenging setup for corporate credit? 00:14:13 Speaker 2: Where around the world do you see the best opportunities here? 00:14:17 Speaker 7: Because you say sovereign governments around the world are issuers. Where are you guys focusing? 00:14:23 Speaker 11: Yeah, it's challenging because developed markets as a whole have been less restrained in terms of their fiscal largesse. Emerging markets have certainly seen performance that is really surprised to the upside. And I think that's really a tale of the dichotomy, which is you're seeing much more typical fiscal and monetary policy from emerging markets than you are from developed markets now. And the AI impulse is largely a U.S. phenomenon, but obviously more broadly. And so I think that's the question of diversification and diversifying outside of U.S. 00:14:58 Speaker 3: Assets. 00:15:00 Speaker 2: What did you take away from Jackson Hole last week with our Fed Reserve chairman? 00:15:04 Speaker 7: How did that go down in Wellington? 00:15:07 Speaker 1: Yeah. 00:15:07 Speaker 11: So, you know, Wellington's thought of that is this was what was needed, was more orthodox return in terms of Warsh correcting a little bit of the communication missteps from the July meeting. And I think he did an excellent job doing so. Obviously, the bond market's been very responsive to that. I think it's a question now of what do we do going forward? The comments on the tape this morning draw a little bit of a question in terms of whether the Fed is willing to hike in September. I think when we look at financial conditions, as Chair Warsh highlighted, are clearly easy, definitely not tight here. We have nominal growth over 6%, 7%. And continued move in unemployment, which I think there's a lot of skepticism, but our expectation at Wellington is we end the year sub 4% unemployment. 00:15:58 Speaker 4: I mean, with that statement, and if it's been yield up, price down, people are losing money in fixed income. Do you see like a whiplash almost? 00:16:09 Speaker 11: Yeah, I think the difference from 2022, and I think this is where people look at 22 and say it was a challenging experience. But remember, then you didn't have the income cushion to offset your total returns. 00:16:19 Speaker 4: Okay, I get that. But the bottom line is somebody's looking at their, on September 14th, they're looking at ending August 31 and going, really? 00:16:26 Speaker 7: I mean, it's. 00:16:28 Speaker 4: Different this time. 00:16:30 Speaker 2: It is. 00:16:31 Speaker 11: And I think a big question is, is do we see fiscal consolidation? Do we see monetary policy address inflation credibly? You know, we've seen a large move. Yields are at levels that it's hard to be, you know, really negative at these levels, especially given, you know, concerns around, you know, broader risk assets and how to think about just tail risks in the economy with oil well above 90 and otherwise. But no, I think yields can continue to drift higher. But I do think that income cushion is really important because it does help buffer. 00:17:07 Speaker 8: That total return. 00:17:08 Speaker 2: In a corporate credit market, are there sectors that you like? Are there factors that you look at? How do you kind of think about places to allocate capital? 00:17:17 Speaker 11: Yeah, so this year it's been all about AI versus everyone else. And it's basically two totally distinct markets, which is challenging. And I think it's certainly we have not seen a crowding out of capital from anyone that's not AI related. The demand for these deals, for anything non-AI related, one-off issuer, long end 30 years, we've seen really a dearth of 30-year issuance from anyone other than the hyperscalers because being very responsive to the level of rates. And so really what I think we continue to see now is just a divergence, which is the broad market is actually really starved for different credits and high-quality credits that are not necessarily re-leveraging aggressively. Versus AI, which the expectation is we just continue to get more and more issuance. And so, you know, broadly, I think we'll continue to see this dispersion underlying a market that overall is at very tight levels. 00:18:12 Speaker 4: I look at the challenge here, and I think of, you know, others that say dividend growth is a yield alternative. Do you buy that idea? 00:18:23 Speaker 8: Yeah. So, you know. 00:18:25 Speaker 11: We look very regularly in terms of dividend yields versus underlying yields in corporate bond portfolios. And when I look at that, we're at very wide levels. 00:18:36 Speaker 8: And that would. 00:18:36 Speaker 11: Certainly be an argument of where high quality investment grade fixed income assets and dollars are really a competitive market and should certainly be a piece of your portfolio. I completely understand the concerns around inflation, around monetary policy, around the rate move that we've seen. But just understanding that these income levels do provide a good cushion and that that yield differential is really compelling right now. 00:19:01 Speaker 4: Lauren, thank you so much. Lauren Moran with us, with Wellington of Boston. We really appreciate that. Stay with us. 00:19:09 Speaker 9: More from Bloomberg Surveillance coming up after this. 00:19:19 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10 a.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app. Or watch us live on YouTube. 00:19:32 Speaker 10: From the trenches. You've got to be in the game to write this book. It's a crushing 204 pages. Totally readable. And it's rule number one. If you're going to write a book, you have to quote Warren Buffet. If you don't, you can't sell the book. Look at market fluctuations. as your friend rather than your enemy. Profit from folly rather than participate in it. Joining us, someone who's enjoyed losing money, David Bonson, CIO of the Bonson Group as well. The book is Profit from the Profit. I mean, this is really good about dividend growth. Is dividend growth dead? 00:20:09 Speaker 8: No, I think dividend growth is as alive as ever, but it is more selective. It is more opportunistic. And when the overall population, Tom, is less participating, it puts a premium in the value of those who are doing it. I think that the greater number of S & P companies that either don't grow or don't pay a dividend makes those who do even more special. 00:20:30 Speaker 7: I love this line, and I've used it on Tim Cook many times. 00:20:34 Speaker 2: Dividend growth is not a way to sacrifice innovation and profit growth for. 00:20:37 Speaker 7: Boredom and mediocrity. 00:20:39 Speaker 2: I mean, how do you think about that argument of dividends versus reinvesting in the message it sends? 00:20:45 Speaker 7: How do you think about that? 00:20:46 Speaker 8: I wrote a whole chapter in the book about it because I think it's the best argument that people could make that is the most misunderstood. You use Apple as an example. First of all, you don't give money back to someone when if you take that very dollar, you can go make them more money with it immediately. The issue is that nobody on earth believes there's an infinite opportunity set for every company to constantly generate a higher return on invested capital by holding people's money. Neither did Apple, since they held $ 250 billion in a money market. All of the people who own Apple have their own money market. Then you say, well, they could go do M & A with it. They didn't. You could say they could buy Dr. Dre's headphone company. 00:21:30 Speaker 5: They did that. 00:21:31 Speaker 8: That blew up $ 3 billion. What happened was a lot of bad M & A that no one cared about. Because Metaverse here and the Tim Cooks thing with the Dr. Dre company, they were making so much money, shareholders ignored it. But they didn't ignore it at Viacom and Paramount. They didn't ignore it at AOL Time Warner. They didn't ignore it in the media sector. M & A did a lot of value-destructive things. Returning capital to shareholders is a very good way to reward risk-takers. 00:21:58 Speaker 2: How do you think about just free cash flow, obviously, is important for these companies. In terms of dividend growth, though, do you look at dividend payout ratios? 00:22:09 Speaker 7: Do you look at dividend growth? How do you screen for? companies and dividend strategies? 00:22:15 Speaker 8: Well, all of these things matter, but the dividend growth is connected to the dividend payout ratio. For one thing, if they have a 20% payout ratio, you might argue they don't seem that committed to it. It doesn't seem like a big priority. If they have a 90% payout ratio, you might think they don't have a lot of margin of error. If earnings drop 11%, they might be facing a dividend cut. So we do tend to believe, and it's different sector by sector because of CapEx. Exxon and Chevron have grown the dividend every year since World War II, but they are very heavy CapEx companies. McDonald's, Procter & Gamble, they have Pepsi, 100% cash flow productivity. They don't have the CapEx reinvestment needs. So we have to look at it case by case, but the payout ratio matters. 00:22:55 Speaker 4: Are share buybacks a dividend equivalent? 00:22:58 Speaker 3: Absolutely. 00:22:58 Speaker 8: No, they're not. And there's also a whole chapter about this. Well, first of all, I'm going to insist that we add the word net share buybacks. 00:23:05 Speaker 4: After compensation and all that. 00:23:07 Speaker 8: Because I am so tired of companies saying we return capital shareholders and yet there's more shares now than there were before. 00:23:13 Speaker 4: We bought them back. Yeah, because of the compensation. 00:23:15 Speaker 8: Really, most share buybacks are a cost to the company, not a return of capital. Most of them are executive comp, incentive comp, employee comp. There's nothing wrong with that. It might be a good use of capital, but it's not a return of capital to shareholders. 00:23:30 Speaker 4: AI. 00:23:31 Speaker 2: It has been the theme in this market for now going on four-ish, five years. How do you mesh that in with your dividend strategy? strategies and views here. 00:23:42 Speaker 8: I want to say something that might sound alarming to some people, but if AI does not help companies like Procter & Gamble, Walmart, Coca-Cola, then AI is going to be one of the biggest busts in human history. It has to, at some point, be helping companies that don't make the chips for AI. 00:23:59 Speaker 7: Again, I'm McDonald's. 00:24:01 Speaker 2: I go into my McDonald's here on 3rd Avenue and 58th Street today. AI? 00:24:06 Speaker 7: Am I interacting with AI? 00:24:08 Speaker 8: Does McDonald's want me to interact with AI? I think it's a back office. 00:24:11 Speaker 4: With your number two value meal? 00:24:13 Speaker 7: Yep, absolutely. I've been ordering that since high school. 00:24:15 Speaker 8: That's sort of the big question. Where consumers and where companies can benefit and implement into their workflow at an enterprise level. I think that kiosks are not AI, but there was a form of automation that McDonald's already, you know, you basically have employee comp at McDonald's has not gone up, but headcount They have wages per hour have gone way up. I think kiosks could help, but that wasn't AI-driven. Look, I think that the AI story with regular companies you don't think of as AI-oriented is like the Internet, something that has to drive efficiency and productivity. If it does, it makes the earnings of our companies better. If it doesn't, AI's got problems. 00:24:53 Speaker 4: We've got a key viewer question here, but I've got to ask this first on profit from the profit of the past. present and future of dividend growth. Is Nvidia getting it done? Are they doing the processes to be a blue chip company? Because they have five-year dividend growth of 20% per year, even though it's a small yield. 00:25:12 Speaker 8: Well, when you say small yield, we're understating the point a little bit. It's a nominal yield. It's tip money. It's not really what we consider to be even a yield. 00:25:22 Speaker 4: Why Do they do that? 00:25:24 Speaker 8: So that ETFs that say they have to have a dividend to buy them are able to buy them. 00:25:28 Speaker 4: That's the only reason. That's the only reason. 00:25:30 Speaker 8: It's borderline fraudulent, but it's not fraudulent by the company. NVIDIA is doing nothing wrong, but the ETFs are. Fascinating. It's purely to pass on the screen. 00:25:39 Speaker 7: That was my pitch as an investment banker. 00:25:42 Speaker 2: Do a dividend just so I can go sell your stock to more people. 00:25:45 Speaker 8: And it opens the audience. 00:25:47 Speaker 4: Where is the arrogance? I mean, this is, Caroline, to translate here, David Bonson is very West Coast. They don't think like we do. It's sort of like Scotland in the United Kingdom. But anyways, where does the arrogance come from? where they say they don't need a dividend, to Paul's arch question. 00:26:06 Speaker 8: And it's cultural in Silicon Valley. You recall in the 90s, it was laughed at, the idea of having to do it. And it does come back sort of to what Paul's question, the belief that we have something we can do with your money that's better than you can do with it. And now I would say, how much has Cisco ended up paying out in dividends? Qualcomm, Intel, even Microsoft, before they had this big run-up in the last eight, nine years out on cloud, they became a big dividend payer and grower. They never paid a dividend until President Bush's second tax cut in 2003. So there's a lot of elements behind it, but I do think all companies grow up and become dividend payers or they become worse companies. 00:26:44 Speaker 4: No one cares, David. Social's lighting up here. Mike up in Bedford says, lose the beard. 00:26:50 Speaker 5: Should I lose the beard. 00:26:51 Speaker 4: David Bonson? It's like my Labor Day Jackson Hole quaff. 00:26:55 Speaker 8: No, I think you have to do what feels authentic to you, Tom. I don't think you can take advice from others on this. That's a loaded word, authentic. 00:27:04 Speaker 3: I love it. 00:27:05 Speaker 4: Exactly. 00:27:06 Speaker 5: For those of you on radio, Mr. 00:27:08 Speaker 4: Bonds is sporting a sprightly beard. 00:27:10 Speaker 7: Yeah, but that's his look. 00:27:11 Speaker 4: Wear Sweeney on the beard. 00:27:13 Speaker 7: No, please. That's the last thing you want to see. No way. 00:27:15 Speaker 4: You could do the Letterman thing. 00:27:17 Speaker 7: Yeah, nothing works there. 00:27:19 Speaker 4: Like Vince Powell down in Nashville. 00:27:21 Speaker 7: Not working. 00:27:23 Speaker 4: Was this fun to write? 00:27:25 Speaker 8: It was fun to write, and I'm proud of it, but it was different than some of my past books. It allowed me to be more philosophical about dividend growth than I've been in the past. I really got into why I believe what I believe. 00:27:39 Speaker 4: Are you moving to Texas? 00:27:40 Speaker 8: I'm staying here in New York for good. We've been lifetime Californians and then 10 years bi-coastal, and now we've sold our. 00:27:46 Speaker 4: House in California. We're here full-time. 00:27:48 Speaker 8: Went to low-tax New York. We wanted to lower our tax rate by 30 basis points. And start to work on the mayoral race in a couple of years. 00:27:59 Speaker 4: David Bonson, thank you so much. Profit from the profit. Some really great energy in here. 204 pages. Can't say enough about it. David L. Bonson with a new effort. 00:28:08 Speaker 1: This is the Bloomberg Surveillance Podcast. Available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday, 7 to 10 a.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.