Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelly. We're right here every day bringing you the
Speaker 1: latest news from the world's of business and finance, plus technology, politics, economics,
Speaker 1: all harnessing the power of Business Week reporters and editors,
Speaker 1: and of course Carol that's part of a team of
Speaker 1: twenty seven hundred journalists and analysts more than a hundred
Speaker 1: and twenty countries and Jason. You can download Bloomberg Business
Speaker 1: Week on iTunes, SoundCloud, ol Bloomberg dot com. You can
Speaker 1: also listen to our radio show at two pm Eastern
Speaker 1: on Bloomberg Radio every weekday, or watch us on YouTube
Speaker 1: by searching Bloomberg Global News. Incredible Health is a company
Speaker 1: that connects hospitals with nurses and other healthcare workers. So
Speaker 1: let's talk about what our next guest has seen through
Speaker 1: the pandemic and what the future may look like to
Speaker 1: protect vital healthcare workers. Dr Iman Abusaid is CEO and
Speaker 1: co founder at Incredible Health. She joins us on the
Speaker 1: phone from San Francisco. Dr abus Aid, nice to have
Speaker 1: you here with Jason and myself. So tell us a
Speaker 1: little bit about what you have seen through the pandemic
Speaker 1: and kind of where we are right now. Yeah, thanks
Speaker 1: for having me. Um. So, what we've seen is we
Speaker 1: did a pretty in depth study of nurses throughout April
Speaker 1: over fo nurses and we also analyze the data in
Speaker 1: our database and what we're realizing. What we're seeing is
Speaker 1: that nurses are having a very difficult time with this pandemic,
Speaker 1: and the preexisting issues that already existed in this industry
Speaker 1: like staffing, shortages, burnout, and stress are continuing to happen.
Speaker 1: Um over to only two percent of nurses have said
Speaker 1: that their facility was very prepared to deal with COVID
Speaker 1: nineteen and so knowing this businesses as well as you do,
Speaker 1: both the sort of the the practice and the logistics
Speaker 1: of it, as well as the economics of it. Uh, doctor,
Speaker 1: I was like, how did this happen? Was it just
Speaker 1: a matter of unpreparedness? Was it just this the size
Speaker 1: and scope of it? What do you owe it to?
Speaker 1: I think it was both the shock. It was a
Speaker 1: shock to the health system, it really was. And uh,
Speaker 1: you know, when when of nurses are saying that they
Speaker 1: don't have the adequate personal protective equipment to practice safely,
Speaker 1: you know that's that just shows a lack of preparedness
Speaker 1: and the shock to the system. Now, I know that
Speaker 1: hospital executives are scrambling to fix this UM, but it's
Speaker 1: still a problem. So you're saying it's still a problem.
Speaker 1: It's still a problem. So where is the breakdown? I mean,
Speaker 1: you understand this world, and and you know, Jason and
Speaker 1: I've had a lot of conversations trying to understand, you know,
Speaker 1: the supply chain, and everybody talked about shortages, and we
Speaker 1: had federal officials saying we're doing everything we you know,
Speaker 1: we're getting all the equipment everybody needs, and yet there
Speaker 1: doesn't seem to be the case. What happened. Was it
Speaker 1: a case that we needed a federal initiative UM and
Speaker 1: didn't get it. Yeah, I mean I think all around,
Speaker 1: whether it was the hospital industry itself or government, it
Speaker 1: was just a lack of preparedness is quite shocking here.
Speaker 1: And it wasn't just about this is not just about
Speaker 1: personal protective equipment that's lacking. I mean even the section
Speaker 1: control protocols that hospitals needed to put into place that
Speaker 1: we're not clear guidelines coming from the CDC. So each
Speaker 1: hospital had to scramble to put their infection control protocols
Speaker 1: in place. You know, it's interesting, Dr Z. You know,
Speaker 1: we we've also talked a lot to you know, as
Speaker 1: Carol mentioned sort of the heads of hospital systems and
Speaker 1: sort of how it's going to be for consumers of
Speaker 1: healthcare and how we may interact with doctors and and whatnot.
Speaker 1: Differently going forward. How's it going to change the nursing business?
Speaker 1: I mean, you have a you have an MBA from Wharton,
Speaker 1: You've been involved in startups, you worked at McKenzie like,
Speaker 1: you understand the business side of this really well. How
Speaker 1: does the business of nursing change going forward? Okay, so
Speaker 1: even before the pandemic, there was a massive nursing shortage.
Speaker 1: Our our health system needed another There will be we
Speaker 1: will be one million nurses shorts by. It is one
Speaker 1: of the biggest skilled labor shortages we have in this country.
Speaker 1: This pandemic is expected to make it even worse because
Speaker 1: our demand for healthcare as a country continues to go up.
Speaker 1: Now we don't see that changing after the pandemic either.
Speaker 1: This is generally a group of workers has underappreciated, overworked,
Speaker 1: and there are simply not enough of them. And so
Speaker 1: we'll need to continue doing whatever we can to increase
Speaker 1: the number of nurses in this country. What does an
Speaker 1: average nurse? I hate that saying an average nurse, But
Speaker 1: what does a nurse make today? So the national averages
Speaker 1: around eighty thousand and ninety thousand dollars for a hospital nurse.
Speaker 1: In states like California, it's a bit higher, like a
Speaker 1: hundred and ten or a hunder twenty dollars average. So
Speaker 1: why aren't people going into nursing Um? Number one, it's
Speaker 1: a very tough profession and it's it's a challenging job. Um.
Speaker 1: The second is that nursing schools don't necessarily have the
Speaker 1: capacity to train more nurses. There are always huge weight
Speaker 1: lists for entering nursing school and they're still challenging to
Speaker 1: get in. Also, the training of nurses is not is inadequate.
Speaker 1: Even after nursing school, getting appropriately trained in a specific
Speaker 1: specialty has a lot of limitations because it's very expensive
Speaker 1: to train in nurse. And so you're obviously in the
Speaker 1: business of technology and using technology to maybe help eliminate
Speaker 1: some of these bottlenecks. How does it work, how does
Speaker 1: it work going forward? And how can technology help us here. Yeah,
Speaker 1: So in our case for incredible help, we work with
Speaker 1: over two hundred hospitals across the country, including top academic
Speaker 1: medical centers like Stanford and Cedar Sinai. And what we've
Speaker 1: done is, really we've automated entire processes of hiring and
Speaker 1: screening using software. So we've automated the screening of the nurses,
Speaker 1: we've automated the custom matching to specific employers that meet
Speaker 1: their needs. Um, and the end result is hiring happening
Speaker 1: in less than thirty days instead of it taking ninety days,
Speaker 1: which is the national average to fill a nurse position today. Wow.
Speaker 1: So how how much of an impact is that? Making
Speaker 1: only have about forty seconds left here? Yeah, So what
Speaker 1: we've already seen, I mean, um, it's in what we've
Speaker 1: seen in the survey is that for the emergency department
Speaker 1: and intensive care and nurses, it's they're higher getting hired
Speaker 1: even faster in nineteen days these days because of the pandemic.
Speaker 1: And so we see this acceleration continuing to happen and
Speaker 1: technology and hiring continue to be adopted across health systems
Speaker 1: in this country. Really some great insight, Yeah, really good,
Speaker 1: really good, And I think under reported candidly the shortage
Speaker 1: that we're talking about, great work. We really appreciate it.
Speaker 1: Dr Iman I was eight is co founder and CEO
Speaker 1: of Incredible Health, joining us on the phone from San Francisco.
Speaker 1: Fascinating background she has working at Mackenzie and n b
Speaker 1: A and has worked for a COASTLA backed startup as well.
Speaker 1: Really interesting, Like puls together, it comes at it from
Speaker 1: so many different perspectives, right, so fascinating. You're listening to
Speaker 1: Bloomberg Business Week with Carol Masser and Jason Kelly on
Speaker 1: Bloomberg Radio. So, Jason Kelly, don't you remember that bloom
Speaker 1: Bloomberg Business Week cover. I think it was last October.
Speaker 1: Everything is private equity right now. I think you had
Speaker 1: some some involvement in that. I did. I do remember that.
Speaker 1: I remember it quite well. It turns out it was
Speaker 1: fairly pression and unbelievably powerful and important story in the
Speaker 1: magazine this week. Heather pearl Berg wrote it. Max Chafkin
Speaker 1: edited it. He is the features editor, of course of
Speaker 1: Bloomberg Business Week. Here to tell us all about it.
Speaker 1: On the phone from Queen's mc hammer. What's going on,
Speaker 1: Hey there, how's it going? This is a big story.
Speaker 1: This is it's a long read, um and pretty intense.
Speaker 1: Tell us what Heather and you guys found when it
Speaker 1: comes to private equity and the medical business. So as
Speaker 1: you said, you know, pe private equity has you know,
Speaker 1: sort of been all over our economy. And of course,
Speaker 1: the healthcare industry is you know, one of the biggest
Speaker 1: or maybe the biggest um industry in the US, and
Speaker 1: so so probably woudn't surprise you that private equity investors
Speaker 1: are are in there. Um. What Heather did is she
Speaker 1: looked at a specific field, dermatology. Um. It's it's it's
Speaker 1: definitely not the only field where there's a lot of
Speaker 1: activity here, but it's one where where it's sort of everywhere. Uh.
Speaker 1: Some people think as many as ten percent of the
Speaker 1: dermatologists in America work for a private equity firm or
Speaker 1: work for a company that's backed by a private equity firm.
Speaker 1: And what's interesting, you know, kind of when you get
Speaker 1: into it, you start to see some of the ways
Speaker 1: that our healthcare system um isn't working particularly well. And
Speaker 1: you know, one thing, one of the stories we've seen
Speaker 1: and Heather gets into this in the in the piece,
Speaker 1: but one of the stories we've we've seen with the
Speaker 1: coronavirus is you have these e R doctors who are
Speaker 1: being UM either laid off or furloughed at a time
Speaker 1: when everybody in America is focused on healthcare. You know,
Speaker 1: you think watching the news that this would be a
Speaker 1: great time to be in healthcare. But it's it's it's
Speaker 1: of course a terrible time. And it's because of the
Speaker 1: way these companies are structured. They are you know, they're
Speaker 1: stretching away where they need past that and growing really fast.
Speaker 1: A lot of them are very leverage. And when you
Speaker 1: start not having um electric procedures, when when demand for
Speaker 1: the services goes down, that that's when things start to
Speaker 1: break down. And and and there are some of these
Speaker 1: kind of UM stories that really seemed pretty terrible. Well,
Speaker 1: and it's interesting. So you know these dermatologists, right, dermatology practices,
Speaker 1: I mean they were not deemed essential correct through the shutdown. Yeah, no,
Speaker 1: it's it's all very much gray area and and stayed
Speaker 1: in local laws. They're all they're all sorts of differences. Um.
Speaker 1: But but the lead anecdote in the story, which is
Speaker 1: very memorable, is of one of the bigger chains in
Speaker 1: the country. It's it's a large dermatology chain in current California,
Speaker 1: which you know, right at the height of the crisis,
Speaker 1: was basically calling people up and telling them to keep
Speaker 1: their botox appointments, among other things. And and UM. Heather
Speaker 1: listened in on a sort of assume conference that was
Speaker 1: held for the industry, where where the CEO of the
Speaker 1: company UM sort of explained himself saying, at you know,
Speaker 1: this is just like a grocery store where if they're
Speaker 1: selling flour and meat, it's not like they're gonna stop
Speaker 1: selling candy. And so the analogy would be, like, you know,
Speaker 1: operating botox is like UM selling candy. And you know
Speaker 1: that obviously makes sense maybe from a business point of view,
Speaker 1: it's it's these these companies definitely need to keep revenue
Speaker 1: if they want to survive. But but of course, many doctors,
Speaker 1: and this is a conversation that's going on everywhere I
Speaker 1: can talk to doctors feel very uncomfortable with this. They
Speaker 1: feel like they are being asked between sort of profits
Speaker 1: and UM traditional medical ethics. Well, and I think that's
Speaker 1: a really important point Max that Heather dives into pretty
Speaker 1: deeply into the story, which is, you know, there are
Speaker 1: some workarounds, and private equity is about nothing if not
Speaker 1: work arounds in terms of able to being able to
Speaker 1: structure deals in certain ways. Mean, this is a business,
Speaker 1: the health care business that the American Medical Association, I
Speaker 1: believe essentially says, listen, this isn't just your regularly your
Speaker 1: regular old sort of like P and L that you're
Speaker 1: managing here. And yet they sort of found a way
Speaker 1: through these uh managed companies to to basically buy these
Speaker 1: things up. And they're only sort of getting bigger, right Yeah,
Speaker 1: they're they're only getting bigger, and and they probably continue
Speaker 1: to get bigger because because the economy is so bad
Speaker 1: right now and these practices are are failing um or
Speaker 1: close to failure, and you know, big private equity firm
Speaker 1: comes in with a lot of money. You know that's
Speaker 1: going to look perhaps more attractive than it did before.
Speaker 1: I think we should say, and it's it's probably an
Speaker 1: important point that they're not everything about this industry is bad.
Speaker 1: I mean they are, and what they what they'll say
Speaker 1: when you talk to them, is that they are expanding
Speaker 1: access for people. You know, one one upside of growth
Speaker 1: is that is that you know, these practices are fanning out.
Speaker 1: It's it's potentially you know, more convenient for patients. Um. Also,
Speaker 1: you know a lot of people have talked about how
Speaker 1: how hard it is to be a doctor in America,
Speaker 1: and and you know, helping these doctors get paid a
Speaker 1: little bit more money. You know that all sounds like
Speaker 1: a good thing. The problem is when you get these
Speaker 1: um sort of private equity roll ups where they're they've
Speaker 1: already cut a lot of costs and then all of
Speaker 1: a sudden they try to do like another roll up,
Speaker 1: you know, taking two uh two sort of large groups
Speaker 1: of merging them together, and you basically, you know, according
Speaker 1: to the sources, to talk to lots and lots of doctors.
Speaker 1: You know, that's where you start running into problems. Well,
Speaker 1: and I love there's a quote and they're about serving
Speaker 1: two masters. You can't serve patients and investors. So it
Speaker 1: gets a little tricky and complicated. It's a great read,
Speaker 1: and as Jason mentioned, there's a lot of information here,
Speaker 1: so highly recommend everybody check it out in the magazine.
Speaker 1: Max Chafkin, features editor at Business Week, joining us on
Speaker 1: the phones from Queens, New York. Thanks Max, you're listening
Speaker 1: to Bloomberg Business Week with Carol Masser and Jason Kelly
Speaker 1: on Bloomberg Radio. All right, so let's get back to
Speaker 1: the world of economics. It's where we started the show
Speaker 1: at the top of two, with the FED releasing the
Speaker 1: minutes from its latest meeting, and those are must reads
Speaker 1: at this point as we try and discern what happens next,
Speaker 1: especially when it comes to monetary policy in this crisis.
Speaker 1: Let's break it down with our team, Alex Harris Pond.
Speaker 1: They are the Long Island Ladies, the Long Island Ladies, Guys,
Speaker 1: Queens Queen, the Queen's Queens, the Long Island Queens Queen.
Speaker 1: All right, we're gonna do that. Alex Harris Fond, reporter
Speaker 1: for Bloomberg. She's on the phone from my island City, Queens,
Speaker 1: Lanish electrovic and yours economist, Bloomberg Economic. She's on the
Speaker 1: same island, the Island of Long So, Elena, I want
Speaker 1: to start with you. What what you here? What do
Speaker 1: you see in those minutes today? What's the most important
Speaker 1: thing we need to take away? It's it's pretty close
Speaker 1: actually in terms of geography. But yeah, for the for
Speaker 1: the minute, two things really struck me. So first is
Speaker 1: about the state of the economy and how much policymakers
Speaker 1: are concerned about the medium outlook. So this struck us
Speaker 1: when the statement was released already three weeks ago. But
Speaker 1: the minutes provide a lot of detail about policymakers concerns
Speaker 1: about long term unemployment. So if people lose jobs and
Speaker 1: stay away from work for quite a long time, they
Speaker 1: will lose skills. So they already are talking about this
Speaker 1: in the minutes and about how much uncertainty there is.
Speaker 1: UH they're about future economic outlook, So that's one thing,
Speaker 1: and another thing is um UH what the policy tools discussion.
Speaker 1: So policymakers obviously reiterated the message that we heard from
Speaker 1: them in recent public remarks. The minutes noted that they
Speaker 1: are committed to using its full range of tools to
Speaker 1: support economic growth. So that includes que policies, that includes
Speaker 1: lending programs, and they and ready to adjust UH and
Speaker 1: adapt those existing facilities to better tailor them to business needs.
Speaker 1: So what was really interesting in this set of minutes
Speaker 1: is how they would like to reinforce forward guidance. This
Speaker 1: is a very powerful tool that said UH used in
Speaker 1: the past. They used it extensively during the financial crisis,
Speaker 1: and they would like to either introduce some sort of
Speaker 1: outcome based approach when they tie uh, the path for
Speaker 1: policy rates to some sort of macroeconomic variables such as
Speaker 1: the unemployment rate, and or they can do date based
Speaker 1: approach when they just say, okay, we're gonna keep the
Speaker 1: rates slow until some future date in time. So they
Speaker 1: used both approaches back in the financial crisis. You know,
Speaker 1: some of them were quite successful, some of them were
Speaker 1: probably not. Uh So it's not very clear that you know,
Speaker 1: these are the ideal tools, but there's a lot of
Speaker 1: discussion among policymakers about how to reinforce the message, so
Speaker 1: to say, open mouth operations from the fifth Alright, so
Speaker 1: let's bring in Alex Harris. And I'm curious if you're
Speaker 1: more interested in the FED or that twenty year bond auction.
Speaker 1: I mean, it seems like inventors are very happy to
Speaker 1: buy up anything that the US government puts out there,
Speaker 1: whether it's twenty years or thirty years. Uh, you know,
Speaker 1: real quick on the twenty year if you know, obviously
Speaker 1: this is the first twenty year auction we've seen in
Speaker 1: thirty four years, so it's hard to draw any sort
Speaker 1: of comparison. But you know, when the Treasury was debating
Speaker 1: about you know, fifty or a hundred year bond, and
Speaker 1: you know, dealers and other people in the community, in
Speaker 1: the financial community kept saying, no, no, twenty year. You
Speaker 1: know this this is a good time that you're going
Speaker 1: to get that interest from the pension them, from the
Speaker 1: life insurers. Um. In terms of the minutes, you know,
Speaker 1: some of it is you know, Elena mentioned uh policy,
Speaker 1: you know, it's full range of policy tools. But I
Speaker 1: think we need to just quickly mentioned what they did
Speaker 1: not talk about was negative interest rates. So I'm hoping,
Speaker 1: and I think a lot of people in the financial
Speaker 1: space are hoping that this puts the negative rates discussion
Speaker 1: to bed. You know, FED funds futures implied rates were
Speaker 1: back in positive territories. So I think people are like, okay,
Speaker 1: debts over so. So the fact that there was no
Speaker 1: mention of it, you know, I think it was key.
Speaker 1: You know, there was also a brief mention of yield
Speaker 1: curve control, which is where they would cap rates at
Speaker 1: some point on the curve at a certain level. Um.
Speaker 1: You know, and and someone had sent me some commentary
Speaker 1: and you know, this could be a way the FED
Speaker 1: could be seen as sort of expanding committing to an
Speaker 1: unlimited expansion of its portfolio. Um, you know if they
Speaker 1: if they do end up going that route and I
Speaker 1: don't they put that that to bed yet. So so
Speaker 1: there's something to it there and something to be mindful of.
Speaker 1: We listened to you know, members of the f MC
Speaker 1: come out and speak, you know. And then the other
Speaker 1: thing is at least for the friend and those those
Speaker 1: funding market wants. Um. You know, the SILMA manager Lowly Logan,
Speaker 1: laid out the rationale for why they didn't feel the
Speaker 1: need to move that interest in excess reserves rate higher,
Speaker 1: and participants were sort of split during the last meeting,
Speaker 1: you know, as to whether or not they were going
Speaker 1: to do it, and it seems like, um, they're like, yeah,
Speaker 1: we don't, we don't feel a need to. We're okay here.
Speaker 1: But you know, one of the things if I could
Speaker 1: ask them anything right now in relations in regards to
Speaker 1: that age, okay, well, if you don't feel like you do,
Speaker 1: feel like the bottom of the range is pretty well protected.
Speaker 1: And why did you make them move higher? You know,
Speaker 1: why did you make the tweek in January? Because something
Speaker 1: was not necessarily adding up for me and I would
Speaker 1: be curious to know more about you know, why January
Speaker 1: warranted such a move right now with rates of the
Speaker 1: zero lower bounded doesn't All right, guys, listen, Thank you
Speaker 1: so much. Really appreciate you weighing in on some of
Speaker 1: the day's news, including those Fed minutes. Yolanda Slet. You
Speaker 1: have a senior US economist at Bloomberg Economics on the
Speaker 1: phone from Long Island, New York, along with Alex Harris
Speaker 1: also weighing in on that twenty year bond auction. Bond
Speaker 1: reporter at Bloomberg News from Long Island City, Queens. You're
Speaker 1: listening to Bloomberg Business Week with Carol Messer and Jason
Speaker 1: Kelly on Bloomberg Radio. So, Jason, it was pretty hard
Speaker 1: to find an investment haven, as we know, as the
Speaker 1: financial markets were selling off right initially because of the virus.
Speaker 1: And yet Emily Chason writes and our weekly Bloomberg Green
Speaker 1: Segment that while not many s G fund managers their
Speaker 1: mission was necessarily to protect investors from a global pandemic,
Speaker 1: it turns out maybe a lot of their funds did.
Speaker 1: So let's get into it. In our Bloomberg Green Segment,
Speaker 1: Emily is sustainability editor at Bloomberg New She joins us
Speaker 1: once again on the phone in New York. So, Emily,
Speaker 1: tell us a little bit of about this story this week.
Speaker 1: We we often talk about E s G funds and
Speaker 1: their mission, and I feel like over the last decade
Speaker 1: or so, we know that you can kind of have
Speaker 1: an E s G mission and also get performance. But
Speaker 1: it sounds like you found out that even during this
Speaker 1: market downturn caused by the virus, that some of these
Speaker 1: E s G funds actually outperformed maybe some other investments. Yeah. Well,
Speaker 1: so it's interesting because E s G portfolio managers for years,
Speaker 1: if you talked to them, they say, you know, there
Speaker 1: was a market downturn in that quarter, and we actually
Speaker 1: outperformed in it. So they've actually sort of bet on
Speaker 1: resilient companies even though they were kind of planning for
Speaker 1: a climate crisis or finding, you know, managers they thought
Speaker 1: were good and adaptable, using E s G sports as
Speaker 1: a proxerty for that. They turned out that they had
Speaker 1: also sort of bet for this global pandemic. So when
Speaker 1: you look at UM portfolios and indexes overall. Black Rocks
Speaker 1: did a really interesting study this week where it found
Speaker 1: that UM in the COVID nineteen crisis, E s G
Speaker 1: indexes outperformed. And if you look like eighteen when there
Speaker 1: were market downturns, like of E s G in bexes
Speaker 1: that performed. So there seems to be a pattern here, right,
Speaker 1: And yet Emily, you know there's not a lot of
Speaker 1: available inventory out there for the regular old four oh
Speaker 1: one K investor to really get into these investments. Why, well,
Speaker 1: this is what you've sort of damaged it. This week
Speaker 1: in our screen newsletter was why the d S funds
Speaker 1: that are providing this downside protection are missing from your
Speaker 1: four oh one k fund? And it's a little complicated. Um,
Speaker 1: Bloomberg does have an E s G fund in it's
Speaker 1: four one k, but very few companies have done it
Speaker 1: because they're worried that they're compromising returns for that. But
Speaker 1: now now that's not really the case anymore. If you
Speaker 1: look at you know, how this performed. And this is
Speaker 1: the first big test for a lot of the S
Speaker 1: funds that only about a s G funds actually have
Speaker 1: a five year track record UM that are large G
Speaker 1: s G funds, So UM, this is the first big test,
Speaker 1: and they seem to be providing some sort of economic benefits.
Speaker 1: So I think people are going to wonder why they're
Speaker 1: not in there for own plans. It's a great question, right,
Speaker 1: But wasn't I felt like for a time, you know,
Speaker 1: especially when E s G funds were kind of newer
Speaker 1: on the on the environment or the investment um you know, landscape,
Speaker 1: that they didn't always perform as well. But we've seen
Speaker 1: things change, especially as more companies, you know, your big companies,
Speaker 1: your sp companies have really kind of embraced E s
Speaker 1: G ways. Yeah, there's kind of been a transition from
Speaker 1: socially responsible investing of the days of yore that it
Speaker 1: was just kind of finding companies that they didn't think
Speaker 1: we're bad and taking them out of the portfolio, like
Speaker 1: tobacco or hall weapons. Right. But now E s G
Speaker 1: is much more focused on risk management, which is a
Speaker 1: good downside protection strategy, and then also they're more focused
Speaker 1: on using all this information in those new e SC
Speaker 1: data to find opportunities. So a lot of U s
Speaker 1: G funds are much more heavily exposed to tech and huscare,
Speaker 1: which has actually outperformed in this latest crisis, and they're
Speaker 1: under exposed to fassis fuel which you know, we thought
Speaker 1: oil go to zero, so that was a good move.
Speaker 1: And Emily, we're always fascinated between you know, some of
Speaker 1: the connective tissue in terms of what types of investors
Speaker 1: are drawn to these types of investments. Uh, Millennials were
Speaker 1: always concerned about them. You know, I have a millennial
Speaker 1: co host and Carol, and you know I worry about
Speaker 1: her um, you know, not being exposed as much too
Speaker 1: for one case. You know, these are the things I
Speaker 1: worry about. But in all seriousness, like, millennials not so
Speaker 1: much into retirement savings historically, right, Yeah, I'm I'm practically
Speaker 1: a millennial, but they millennials are you really are a millennial.
Speaker 1: You're an actual millennial. But so millennials, a lot of
Speaker 1: them graduated and like into the recession of two thousand
Speaker 1: and eight, a lot of them are you know, under
Speaker 1: invested in their form. Okay, I haven't had a lot
Speaker 1: of money to say, have a lot of debt, you know, so,
Speaker 1: but millennials who do have money, a huge portion of
Speaker 1: it is what's actually in their forum. Okay, that's a
Speaker 1: huge portion of their household investible income are really excited
Speaker 1: about e s G. They would really like to invest
Speaker 1: in it UM, but they don't have that option in
Speaker 1: the Forum one K, which is the biggest pool of
Speaker 1: assets that's available to them for investment in this way. Emily,
Speaker 1: I do wonder if you wonder about this as well,
Speaker 1: that because you know of what we're going through right now,
Speaker 1: this health pandemic, and we're talking a lot about some
Speaker 1: of the big problems that are facing the global society,
Speaker 1: whether it's climate change or whether it's future pandemics, whether
Speaker 1: more in more companies kind of embrace E s G
Speaker 1: ways and they become you know that there will be
Speaker 1: more offerings for E s G funds. I wonder if
Speaker 1: we're going to see that kind of on the other
Speaker 1: side of this virus. Just got about forty five seconds here. Yeah,
Speaker 1: there's been a ton of inflows actually into E s
Speaker 1: G funds, so I wouldn't be surprised that at all.
Speaker 1: And there's been a ton of news coverage, a lot
Speaker 1: of interest in the space. All Right, we're gonna leave
Speaker 1: it there. Thank you so much. Good to catch up
Speaker 1: with you. Emily Chasen, Sustainability at editor at Bloomberg, part
Speaker 1: of the Green Team, The Bloomberg Green Team. UH timely
Speaker 1: launch of that earlier this year, because I do think
Speaker 1: we are to your point here, We're thinking about this
Speaker 1: much more holistically. We're thinking about our world as you
Speaker 1: like to say, um in all in all facets in
Speaker 1: many ways, right, and just some of the big problems.
Speaker 1: And you do wonder you know we we just talked
Speaker 1: about was it the bite yesterday about Unlearn A bunch
Speaker 1: of other companies that are saying, come on, we've got
Speaker 1: to work together public private partnerships to tackle some of
Speaker 1: these inequalities that are in our world. Check out all
Speaker 1: of their work at Bloomberg dot com, slash Green Broom
Speaker 1: a journal. Yeah but you let me drive? Oh no, no, no,
Speaker 1: no please, I want to drive all Just drive baby,
Speaker 1: the questions drying job. This is the drive to the globe.
Speaker 1: Give me thanks, we'll drying us on Bloomberg Radio. It
Speaker 1: is time for the drive to the close back with
Speaker 1: us as Joanna Barton, she is co director of Growth
Speaker 1: Equities at Eaton Vance, and she joins us on the
Speaker 1: phone from Boston, and I'm nice to have you here
Speaker 1: with us. How's it going. It's going well, it's there's
Speaker 1: some sun outside. I'm seeing a lot more green on
Speaker 1: my screen. Life is good. Life is good. You know.
Speaker 1: I want to ask you something because one of the
Speaker 1: big stories that Jason I've been talking about and then
Speaker 1: we'll get into because we love to be able to
Speaker 1: talk stocks with you, but we're hearing a lot of
Speaker 1: financial firms, UM, whether it's JP Morgan and other city
Speaker 1: group you know, thinking about moving a lot of folks
Speaker 1: out to the suburbs. And I'm just curious what's the
Speaker 1: talk in Boston about. Because of the virus UM and
Speaker 1: nervousness about commuting to big cities, you know that companies
Speaker 1: are rethinking where their offices are, and I'm just curious
Speaker 1: what you're hearing about, UH in Boston and particularly maybe
Speaker 1: among the financial sector. Well, a majority of our employees
Speaker 1: are obviously working from home right now. There isn't any
Speaker 1: talk of having alternative location outside of Boston right now.
Speaker 1: But I think UM, many of those conversations I've certainly
Speaker 1: taken place, and perhaps the answer is UM, not one
Speaker 1: or the other, but maybe a hybrid of UM or
Speaker 1: maybe a sort of a three case scenario where you
Speaker 1: still have headquarters that are central for your investors, for
Speaker 1: your clients corporate access, but also have the flexibility of
Speaker 1: working from home and having alternative sort of satellite offices. So, um,
Speaker 1: I think many of these options are on the table
Speaker 1: and I'm sure being discussed as to speak and Jana,
Speaker 1: as an investor, as you look at companies, many of
Speaker 1: which I think you're invested in and they sort of
Speaker 1: work through this, does it change like do you have
Speaker 1: to model differently? I mean, or is it just sort
Speaker 1: of one of the sort of softer factors that you
Speaker 1: work in. I mean, I do wonder how we think
Speaker 1: about because you guys do I'm sure sort of intensive
Speaker 1: work on all of your portfolio, Like do you think
Speaker 1: about companies differently in terms of, you know, how aggressive
Speaker 1: they are on this, what their cost structures end up being,
Speaker 1: How radical does it need to be in for it
Speaker 1: to enter into your analysis here. Oh, that's a great question.
Speaker 1: I think depending on the industry, the real estate cost
Speaker 1: is a different input, um. So for retailers obviously it's
Speaker 1: a very different input than for someone um like an
Speaker 1: Amazon or Google. Right, So I think it's more of
Speaker 1: a question of the overall cost structure and firms that
Speaker 1: do have the flexibility and variable cost structure because of
Speaker 1: the model of their own business and that agility that's
Speaker 1: a long term tail wind. So the more flexibility you
Speaker 1: have in your model, um better it is for you.
Speaker 1: And I think that's part of the reason why the
Speaker 1: profitability stream of companies within tech and perhaps the next
Speaker 1: gen secular winners is so much more attractive because the
Speaker 1: sort of embedded costs a less of an overhang on them.
Speaker 1: So what do you make of where we are in
Speaker 1: the markets? And I'm just curious what what if any
Speaker 1: buying have you been either suggesting or looking at right now,
Speaker 1: especially since you know we're you know, seeing a little
Speaker 1: bit of a rally again, uh this week. But it
Speaker 1: depends on the week, you know, in terms of the
Speaker 1: tone of the market. So where do you think we are?
Speaker 1: And I'm curious about anything you might have been buying
Speaker 1: into right now. It's interesting because I was looking at
Speaker 1: my notes. The last time you and I spoke was
Speaker 1: kind of in the midst of the most severe drawdown
Speaker 1: that we saw in the marketplace, and we were doing
Speaker 1: a ton of buying then, which felt very uncomfortable, and
Speaker 1: I remember we had a lot of conversations about that.
Speaker 1: But the reason why I bring that up is because
Speaker 1: this unevenness that we're seeing both in terms of reopening
Speaker 1: for business and different states doing their own thing. That's
Speaker 1: the same thing we're seeing in the marketplace. So while
Speaker 1: on the surface you see the market, albeit it's still
Speaker 1: down here today, the average company is underperforming a cap
Speaker 1: weighted index almost two times. As I look at the
Speaker 1: market here, not inclusive of the rally we had today,
Speaker 1: we have SMB down just shy of nine percent, but
Speaker 1: the average stock is down seventeen percent. And more importantly,
Speaker 1: when you look at specific sectors like consumer discretion and
Speaker 1: you've got one outlier, which is Amazon, up over thirty percent,
Speaker 1: without which that sector would be down four Again, the
Speaker 1: reason why I'm providing this context is on the surface
Speaker 1: that looks like there's a lot of green, but not
Speaker 1: everything has recovered to the extent that we might believe
Speaker 1: it has. So like specialty retail, area of the market
Speaker 1: that was bruised during the downturn is still recovering. So
Speaker 1: that's an area where we're interested in an unnimbling here
Speaker 1: and there um and help Gere's also an area that
Speaker 1: has been in the headlines where biotech and farma has
Speaker 1: done really well, but other companies like met Devices and
Speaker 1: life sciences have been left behind. So that's also an
Speaker 1: area where we're sort of playing the laggards. And so
Speaker 1: what do you look for in this specialty retailer at
Speaker 1: this point, Yanna, because I feel like we are starting
Speaker 1: to see some very distinct winners and losers, or we
Speaker 1: were before the pandemic set in. And I wonder how that,
Speaker 1: how this experience or sort of looking at who's done
Speaker 1: what and how everybody has handled this changes your opinion
Speaker 1: or do you look at different things? How does the
Speaker 1: pandemic change that calculus? Well, um, apologies for my dog
Speaker 1: there by the way, Um, I've had my two year
Speaker 1: old daughter scream on air, so that don't know. Apologies,
Speaker 1: it's good, it's good. I think home improvement is an
Speaker 1: area that's obviously topical because we had reports today of
Speaker 1: lows and yesterday of home depot and all of us
Speaker 1: is stuck at home. I don't know about you, but
Speaker 1: I'm doing a ton of nesting. So when you see
Speaker 1: the results from loads that are coming in where you're
Speaker 1: not only seeing positive comps, but double digit comps that
Speaker 1: they haven't seen since I think back in two thousand seven,
Speaker 1: I think there's some durability to that. Right, So there's
Speaker 1: some company specific things that they're doing in terms of
Speaker 1: their constructor and margin improvements, but also sort of do
Speaker 1: it yourself is um. You know, buyers coming back and
Speaker 1: we're doing a lot more buying for outdoor spaces and such.
Speaker 1: So UM again, home Deepot versus Lows we have a
Speaker 1: position and Lows because it's less expensive than home Depot
Speaker 1: and has lagged Home Deeper year to do. UM. So
Speaker 1: that's a company specific story. We're also intrigued by the
Speaker 1: off price retailers as well. UM. Again, all of those
Speaker 1: stores are closed. UM. I'm certainly waiting for the opening.
Speaker 1: I can't tell you how much, but that story is
Speaker 1: not going away. And if anything, I think those guys
Speaker 1: will have the upper hand in terms of the inventory
Speaker 1: that will be stuck in the chee in US and
Speaker 1: will wait to be moved. So tjs of the world
Speaker 1: and others I think will be just fine because they
Speaker 1: have the liquidity, the scale, and the infrastructure. So there
Speaker 1: are just two examples of what is intriguing to us.
Speaker 1: But they'll be doing it differently, right, They're going to
Speaker 1: have to be with social distancing and so on. Right,
Speaker 1: I assume it's going to be a little trickier going back. Absolutely,
Speaker 1: I think the point that you're bringing up is an
Speaker 1: important one, which is we really need to focus on
Speaker 1: multi channel, right retailer meaning you know, and maybe have
Speaker 1: showcase and demonstrated the strength you can have from having
Speaker 1: the digital presence. So ordering online is picking up at
Speaker 1: a curbside pick and whatever it is. So yeah, we
Speaker 1: gotta run, but you're absolutely right, the multi channel is
Speaker 1: going to be important. Thanks so much for listening to
Speaker 1: Bloomberg Business Week. Download the podcast on iTunes, south Cloud,
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