Latest / Bloomberg Intelligence / Inflation, Commodities, And The Supply Chain

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Inflation, Commodities, And The Supply Chain · Bloomberg Intelligence

• 0:00
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
• 0:04
  Speaker 1: my co host Matt Miller. Every business day we bring
• 0:06
  Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
• 0:11
  Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
• 0:15
  Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast. Let's talk global geopolitics,
• 0:24
  Speaker 1: global energy. There's a lot going on out there in
• 0:26
  Speaker 1: this big world. At Price, senior fellow and former British
• 0:29
  Speaker 1: trade official at n y U joins us, and let's
• 0:32
  Speaker 1: first talk about just the global energy markets. That's kind
• 0:35
  Speaker 1: of been on topic today again. Brent crew down about
• 0:38
  Speaker 1: eight percent today, below a hundred dollars just at one thirty.
• 0:42
  Speaker 1: There's a lot of cross winds out there. What are
• 0:44
  Speaker 1: you focusing on here right? Well, on those cross winds, honestly,
• 0:48
  Speaker 1: and it's it's a bit bizarre. Um. This war in Europe,
• 0:52
  Speaker 1: I think is something of a mixed citty, and I
• 0:54
  Speaker 1: think that that's something that everyone's looking at, including the FED.
• 0:57
  Speaker 1: On the one hand, it's it's obviously inflationary, right because
• 1:01
  Speaker 1: it's a supply disruption and that goes back to what
• 1:03
  Speaker 1: you're saying about oil prices. They spiked, everyone freaked out
• 1:06
  Speaker 1: at the pumps over here in the US. But on
• 1:08
  Speaker 1: the other hand, it's deflationary in the sense that it
• 1:11
  Speaker 1: could destroy global demand. Look at the I M S.
• 1:13
  Speaker 1: It's downgrading its global growth forecast. So I think it's
• 1:17
  Speaker 1: it's very it's a good phrase that you're using their
• 1:19
  Speaker 1: cross winds and we're just gonna have to lick our finger,
• 1:22
  Speaker 1: put it in the air and see which one is stronger.
• 1:25
  Speaker 1: What do you think ed about the story that Saudi
• 1:29
  Speaker 1: Arabia is in talks with China to um basically accept
• 1:34
  Speaker 1: you on instead of dollars for oil. I mean, um,
• 1:38
  Speaker 1: this has to be a huge economic issue, right It
• 1:41
  Speaker 1: centers around the world reserve currency and the power that
• 1:45
  Speaker 1: the US gets from that. But maybe a shift now
• 1:49
  Speaker 1: towards UM, you know, the second biggest economy. Yes, this
• 1:54
  Speaker 1: is I think everything that's happening now at roots is
• 1:57
  Speaker 1: a dollar standard story. So you can you can look
• 2:00
  Speaker 1: at the war in Ukraine, you can look at COVID,
• 2:02
  Speaker 1: you can look at US domestic inflation, and I think
• 2:06
  Speaker 1: with a big piece of paper and a market pin,
• 2:08
  Speaker 1: you can draw the lines between all these things and
• 2:10
  Speaker 1: what the world expects of the dollar and how people
• 2:14
  Speaker 1: are looking at the dollar in the future. So if
• 2:16
  Speaker 1: if the Saudis are indeed doing that, UM, that's no
• 2:19
  Speaker 1: bueno for us, for those of us who have a
• 2:22
  Speaker 1: very strong stake in the dollar standards UM. And I
• 2:25
  Speaker 1: think it's something that in this period of disruption we
• 2:28
  Speaker 1: should definitely watch, definitely look at, not get too distracted.
• 2:32
  Speaker 1: Everything we're looking at is a dollar standard story. And
• 2:36
  Speaker 1: what's kind of astounded me as as I think about
• 2:38
  Speaker 1: this Russia Ukraine's situation is how it seems like it's
• 2:42
  Speaker 1: so well coordinated some of the economic sanctions we're seeing
• 2:45
  Speaker 1: from not just the US, but from other countries as well.
• 2:49
  Speaker 1: From your perspective, how effective do you think they can
• 2:52
  Speaker 1: be will be on Russia, Because just on the surface,
• 2:54
  Speaker 1: to this late person, they seem pretty significant, right, I
• 2:58
  Speaker 1: think very significant. I've seen a few commentators saying, you know,
• 3:02
  Speaker 1: don't count the Russians out. These these sanctions will will
• 3:06
  Speaker 1: not have the sort of effect that you want. But honestly,
• 3:09
  Speaker 1: I would not be surprised by a complete and total
• 3:12
  Speaker 1: collapse in Russia in the social fabric. UM. I think
• 3:15
  Speaker 1: part of this is the whole information scenery. It seems
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  Speaker 1: if you look at reports in New York Times and
• 3:21
  Speaker 1: so on, it seems that the Russians still don't know
• 3:23
  Speaker 1: that they're at war, most of them, which is bizarre.
• 3:26
  Speaker 1: But when they do find out, which you know, one
• 3:29
  Speaker 1: has to think will happen as as the body count
• 3:32
  Speaker 1: comes up, right, UM, I think that that, in combination
• 3:35
  Speaker 1: with what's going on in the financial system, could really
• 3:38
  Speaker 1: really put Russia into a serious problem. So I think
• 3:41
  Speaker 1: one point to make though, just conceptually, is that a
• 3:43
  Speaker 1: lot of people are talking about the Second Cold War.
• 3:45
  Speaker 1: I think the difference here is that we're not trying
• 3:47
  Speaker 1: to contain Russia and the Russian economy. We're actually trying
• 3:50
  Speaker 1: to export recession and even a financial crisis into Russia.
• 3:54
  Speaker 1: So I think that can be very effective. UM. One
• 3:58
  Speaker 1: of the interesting moves I've seen, as someone who you
• 4:00
  Speaker 1: know lived in Germany but I know you studied also
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  Speaker 1: German history, is the shift towards, you know, finally spending
• 4:09
  Speaker 1: money on military equipment. They had been so not only understaffed,
• 4:13
  Speaker 1: but also UM didn't have enough stuff previously and weren't
• 4:16
  Speaker 1: spending enough of their UM weren't spending enough of their
• 4:20
  Speaker 1: uh G d p on. You know, they had the
• 4:22
  Speaker 1: two percent promise on military gear. Now they're gonna buy
• 4:27
  Speaker 1: thirty five F thirty five's and fifteen new eurofighters and
• 4:31
  Speaker 1: this seems to be you know, one of the um
• 4:34
  Speaker 1: unintended consequences of Vladimir Putin's moving to Ukraine's that he's
• 4:37
  Speaker 1: united Europe and you know rearmed Germany. Well, I mean
• 4:42
  Speaker 1: absolutely rearmament is the right phrase to use. Again. I mean,
• 4:45
  Speaker 1: the fact that the Germans are now comfortable with weaponry,
• 4:50
  Speaker 1: with rearming with a strong military force is incredible and
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  Speaker 1: for anyone with interest in European and German history, this
• 4:56
  Speaker 1: shift is profound. It's also so something that I think
• 5:01
  Speaker 1: is going to be thought about in London, right because
• 5:04
  Speaker 1: of course the UK it's just left the European Union.
• 5:07
  Speaker 1: I don't think we foresaw a German standing army when
• 5:10
  Speaker 1: we did that. But you're right, the real impact here
• 5:13
  Speaker 1: is on Putin. He's made such a massive, massive error
• 5:16
  Speaker 1: going into the Ukraine. And I think that the obvious
• 5:19
  Speaker 1: bravery of the UK Ukrainian forces, Ukrainian civilians taking up arms.
• 5:23
  Speaker 1: The longer that lasts, the longer Europe has time to
• 5:27
  Speaker 1: rearm the longer a standing German army is going to
• 5:29
  Speaker 1: be more of the prospect. I'd put one caveat in there.
• 5:33
  Speaker 1: There are long standing historical ties between Germany and Russia,
• 5:37
  Speaker 1: and I think if you look back to the First
• 5:38
  Speaker 1: and Second World War, you could argue that the United
• 5:42
  Speaker 1: States intervene in both of those wars to prevent a
• 5:44
  Speaker 1: continental economy in which Russian and German economics were combined
• 5:49
  Speaker 1: under the leadership of either Moscow or Berlin. So in
• 5:52
  Speaker 1: the future after this war in Ukraine, I wouldn't rule
• 5:54
  Speaker 1: out one scenario, which is an armed Berlin and armed
• 5:58
  Speaker 1: Moscow shaking hats. All right, thank you so much for
• 6:01
  Speaker 1: joining us. We really appreciate your perspective here. A lot
• 6:04
  Speaker 1: of again cross winds here on a global geopolitical space
• 6:08
  Speaker 1: impacting markets at prices and senior fellow and former trade
• 6:12
  Speaker 1: official at New York University giving us some thoughts here.
• 6:21
  Speaker 1: I pulled up my g l g l c O
• 6:25
  Speaker 1: screen on the Bloomberg Terminal global commodities prices, and on
• 6:28
  Speaker 1: a year to date basis, everything is pretty much everything
• 6:31
  Speaker 1: is up double digits, whether it's energy, medals, aggs, and
• 6:35
  Speaker 1: I guess that's what you call inflation. Um, the question
• 6:39
  Speaker 1: is when does it peak? How click that doesn't come down?
• 6:41
  Speaker 1: How do I play it? Will Ryant, chief executive officer
• 6:45
  Speaker 1: for Grantit Chairs Advisors, joins us Will again, I'm looking
• 6:48
  Speaker 1: at my commodities pretty much everything is up big time.
• 6:51
  Speaker 1: When does this peak? Do you think this inflation in
• 6:54
  Speaker 1: this U S economy? Well, it's a great question. Um,
• 6:58
  Speaker 1: I think that's you know, Unfortunately, for as far as
• 7:02
  Speaker 1: inflation goes, these things tend to take a number of years.
• 7:07
  Speaker 1: No cycles, particularly on the commodity side, tend to last
• 7:11
  Speaker 1: in years, not days or months. Um. I think at
• 7:15
  Speaker 1: this stage you're really talking about two possible scenarios. Really,
• 7:19
  Speaker 1: if you're talking about inflation easing, that's going to come
• 7:22
  Speaker 1: from an increase in supply, and an increase in supply
• 7:27
  Speaker 1: you know, will happen, um as long as high prices
• 7:30
  Speaker 1: stay or prices stay elevated, but it takes time. The
• 7:34
  Speaker 1: other thing, probably the most likely thing that will happen
• 7:37
  Speaker 1: if prices keep continuing to rise, is demand destruction. In
• 7:41
  Speaker 1: other words, the consumer just gives up at some point
• 7:44
  Speaker 1: and says, you know what, I can't pay five dollars
• 7:48
  Speaker 1: per gas or six or seven or eight or whatever
• 7:51
  Speaker 1: it may be at that time. And once that happens,
• 7:53
  Speaker 1: then you start to see using because of demand for
• 7:56
  Speaker 1: that commodity falls. How much is how a law stick
• 8:01
  Speaker 1: is the oil patch? I was talking to a gold
• 8:03
  Speaker 1: miner yesterday who said, it's very that come out of
• 8:07
  Speaker 1: the right now is very inelastic. They're taking as much
• 8:09
  Speaker 1: out of the ground as they can, and the and
• 8:12
  Speaker 1: the ramp up time for new production is is much longer. Um,
• 8:16
  Speaker 1: what does what does oil look like in those terms? Yeah?
• 8:20
  Speaker 1: I think that's right. Um that you know, again, you
• 8:23
  Speaker 1: know it depends on what country you know you're talking about.
• 8:26
  Speaker 1: Definitely some more production can be brought online. And clearly
• 8:30
  Speaker 1: the the the easiest winds, if you want to look
• 8:33
  Speaker 1: at it that way, are going to be from existing
• 8:36
  Speaker 1: producing countries. And that's what the administration is doing, is
• 8:39
  Speaker 1: going to going to produces like Saudi Arabia, going to
• 8:43
  Speaker 1: the OPEC countries, even to Venezuela places like that, and
• 8:47
  Speaker 1: trying to get more barrels. So that's certainly possible. But
• 8:51
  Speaker 1: in terms of domestic production, you know, again those um
• 8:54
  Speaker 1: fields sites that are already in operation may be able
• 8:57
  Speaker 1: to to increase but really you're looking for much more
• 9:00
  Speaker 1: of an increase from likes of shale et cetera. What
• 9:04
  Speaker 1: is the problem with getting more out of the shale? Um?
• 9:07
  Speaker 1: I heard somebody this morning say costs to bring oil
• 9:11
  Speaker 1: out of the ground in the US are thirty three
• 9:13
  Speaker 1: dollars a barrel. Shouldn't that motivate? You know? You hear
• 9:16
  Speaker 1: the Biden administration talk all the time as if they've
• 9:19
  Speaker 1: done literally everything they can about these nine thousand leases. Um.
• 9:24
  Speaker 1: If that's really how it is, wouldn't the massive you know,
• 9:30
  Speaker 1: sixties six dollars in profit per barrel of oil drive
• 9:34
  Speaker 1: everybody out to bring it to use those leases? Yes?
• 9:38
  Speaker 1: And no? Um. So here's what happened last time. You
• 9:42
  Speaker 1: may remember that there was a huge boom in US
• 9:46
  Speaker 1: shale and because of that, you know one, prices collapsed,
• 9:51
  Speaker 1: and ultimately they did so partly because the U S
• 9:55
  Speaker 1: shale industrial US got into a market share war with Sadia,
• 10:00
  Speaker 1: Arabia and Opeque in terms of competing for market share.
• 10:05
  Speaker 1: The price well went down. A lot of those a
• 10:06
  Speaker 1: lot of those shell producers went bust, and in that
• 10:10
  Speaker 1: sort of rush to produce more production, banks have lent
• 10:14
  Speaker 1: them a lot of money as a lot of financing there,
• 10:17
  Speaker 1: and a lot of people lost a lot of money
• 10:19
  Speaker 1: in that particular collapse. So long story short is, the
• 10:23
  Speaker 1: producers are going to be more disciplined. They're going to
• 10:26
  Speaker 1: be more disciplined because the banks and the lenders are
• 10:28
  Speaker 1: making them mean more disciplined. But they're also fearful of,
• 10:32
  Speaker 1: you know, the oil price collapsing again like it did
• 10:35
  Speaker 1: last time. So people are going to be more disciplined
• 10:37
  Speaker 1: and therefore a bit more cautious about bringing that production
• 10:40
  Speaker 1: on because of the cautions and retail that we had
• 10:45
  Speaker 1: last time. Hey, well, I'm looking at my metal screen
• 10:47
  Speaker 1: here and one of the medals that is kind of
• 10:50
  Speaker 1: lagged a little bit is platinum. What's the call on
• 10:53
  Speaker 1: spot platinum here? Well, plantinum is an interesting one because
• 10:57
  Speaker 1: palladium went to the Moon after the war broke out,
• 11:02
  Speaker 1: and that was because simply Russia is the largest producer
• 11:05
  Speaker 1: of palladium in the world. Russia is also the second
• 11:10
  Speaker 1: largest producer of platinum. Number one producer is South Africa.
• 11:15
  Speaker 1: But those metals can be interchanged one for one. They're
• 11:18
  Speaker 1: both used for catholytic converters to clean the emissions that
• 11:22
  Speaker 1: come out of an internal combustion engine. And you know,
• 11:27
  Speaker 1: with the price of palladium almost three times the price
• 11:29
  Speaker 1: of platinum, they can be exchanged or substituted one for one.
• 11:33
  Speaker 1: So people are looking at platinum right now, both in
• 11:37
  Speaker 1: terms of you know, the war situation and a supply
• 11:41
  Speaker 1: disruption coming from Russia, but also because with the price
• 11:44
  Speaker 1: of pladium so high, I thinking automakers have to come
• 11:47
  Speaker 1: in here and substitute these metals in the favor of platinum. Hey, well,
• 11:53
  Speaker 1: thanks so much for joining us. Really appreciate it. Next
• 11:56
  Speaker 1: time we're gonna talk a little pork bellies, maybe I'm
• 11:58
  Speaker 1: going to lean hogs up to five year to date?
• 12:01
  Speaker 1: How about that tree ripping face? Will Ryan, chief executive
• 12:04
  Speaker 1: officers for granted Chairs advisors will always checking when with
• 12:07
  Speaker 1: Will whenever there's big moves in the commodities space, as
• 12:10
  Speaker 1: there has been here over the last uh several truly unbelievable, right,
• 12:13
  Speaker 1: I mean, we saw Brent crude um went up to
• 12:17
  Speaker 1: what a hundred and thirty nine dollars of barrel like
• 12:21
  Speaker 1: literally seven days ago, and now it's trading at Yeah,
• 12:26
  Speaker 1: it's amazing. And you know, oil traders, I used to
• 12:28
  Speaker 1: know a few oil traders. I would trade this stuff
• 12:30
  Speaker 1: in the pits, and they say you will get crushed
• 12:32
  Speaker 1: in this market if you don't pay attention, and that's
• 12:34
  Speaker 1: certainly the case here. Dave Major's joins us the CEO
• 12:41
  Speaker 1: of me Com Collector Car Auctions. Before we get down
• 12:44
  Speaker 1: to the business side of it. Um, Yeah, what is
• 12:48
  Speaker 1: going on with with the prices in terms of these cars?
• 12:53
  Speaker 1: I mean, for regular every day like an F one fifty, Um,
• 12:58
  Speaker 1: we're paying out the nose. But the prices that I'm
• 13:00
  Speaker 1: seeing for like a goat as as as Greg Jarrett
• 13:03
  Speaker 1: just mentioned, are just huge. Yeah. Well yeah, first, good
• 13:07
  Speaker 1: morning from State Farm Stadium in Glendale, Arizona. We're getting
• 13:11
  Speaker 1: ready to get started with another big MICAM auction starts
• 13:15
  Speaker 1: tomorrow and we're expecting to see prices continue to be
• 13:19
  Speaker 1: in the stratosphere for collector cars. That that phenomenon started
• 13:23
  Speaker 1: for us back in the summer of when we came
• 13:28
  Speaker 1: back to auction coming out of the pandemic, and and
• 13:31
  Speaker 1: actually has has been picking up steam ever since, as
• 13:34
  Speaker 1: evidenced by our well even before that with the Big Muscle.
• 13:37
  Speaker 1: I remember ten years ago looking at Plymouth couta Barracuda
• 13:42
  Speaker 1: UM that you sold for I think three point four
• 13:45
  Speaker 1: million dollars um. Why is this? That's the holy grail
• 13:50
  Speaker 1: of collector cars? I see? So that's why because it's
• 13:53
  Speaker 1: the one um It's not like a GT five hundred
• 13:56
  Speaker 1: or a Chevrolet um at sas now, the Plymouth Plymouth
• 14:04
  Speaker 1: heavy Couta has always been that that car that if
• 14:06
  Speaker 1: you're if you're a serious collector of American muscle cars,
• 14:09
  Speaker 1: you have to have one of those in your collection.
• 14:12
  Speaker 1: And as you said, they go for multimillions of dollars,
• 14:16
  Speaker 1: which you know, it's just incredible. But the whole collector
• 14:19
  Speaker 1: car market, you know, return something like thirty or forty
• 14:23
  Speaker 1: percent a year over the last ten fifteen years. So
• 14:27
  Speaker 1: that's the cream of the crop that the markets exactly.
• 14:31
  Speaker 1: Hey David, you know, unlike Matt, I'm not a car geek,
• 14:34
  Speaker 1: although I do own BMW five thirty five with a
• 14:38
  Speaker 1: manual transmission. So if you want to make a bid, uh,
• 14:41
  Speaker 1: feel free. What's driving this market? Is this just the
• 14:45
  Speaker 1: people saying, oh my god, they aren't going to make
• 14:47
  Speaker 1: any more you know, gasoline driven cars, so I better
• 14:50
  Speaker 1: get one, you know, gasolene cars, manual shift. Uh, it's
• 14:56
  Speaker 1: a lot of you know, people my age coming of
• 14:59
  Speaker 1: age and remembering the cards of their youth from the
• 15:02
  Speaker 1: sixties and seventies in particular. But now we're starting to
• 15:05
  Speaker 1: see cars in the eighties and nineties pick up steam
• 15:07
  Speaker 1: as well. And so, you know, I think a lot
• 15:10
  Speaker 1: of things happened during the pandemic that that built the
• 15:14
  Speaker 1: steam for the collector car market, and we're seeing that
• 15:17
  Speaker 1: continue with a lot of great cars coming to the market.
• 15:20
  Speaker 1: We've got fifteen cars here in Arizona, the largest number
• 15:23
  Speaker 1: of cars ever to come to this office. It doesn't
• 15:27
  Speaker 1: look like it's selling down at Yeah, we should definitely
• 15:30
  Speaker 1: go there. You you sell though the cream of the
• 15:32
  Speaker 1: crop we're talking about. You have a nineteen sixty seven
• 15:35
  Speaker 1: Ferrari to s G t V four, So this is
• 15:38
  Speaker 1: another level. But on a lower end, have things like
• 15:43
  Speaker 1: bring a trailer or what's Doug Demro's thing called cars
• 15:46
  Speaker 1: and bids um you know Hemming's have they kind of
• 15:49
  Speaker 1: helped push up the top end. Yeah, I think particularly
• 15:54
  Speaker 1: in the collector car market, that rising tide lifts all
• 15:56
  Speaker 1: boats certainly holds true. There's you know, they're bring a trailer.
• 16:00
  Speaker 1: There's a certain clientele that wants to just transact transact business.
• 16:05
  Speaker 1: When you come to make and makeam auction, it's more
• 16:07
  Speaker 1: of an experience. You want to you want to come
• 16:09
  Speaker 1: and look at the cars and touch and feel them
• 16:11
  Speaker 1: and talk to your friends. Will you never do a day?
• 16:15
  Speaker 1: Will you never do an online auction platform, you know,
• 16:18
  Speaker 1: eBay style like those others we do. We do online
• 16:22
  Speaker 1: live auctions. So for instance, our auction here from Glendale,
• 16:26
  Speaker 1: you can bid online right along with those people that
• 16:29
  Speaker 1: are sitting in the seats, and and if you look
• 16:31
  Speaker 1: on the website on makam dot com as you're bidding,
• 16:34
  Speaker 1: it looks just like you're sitting in the front row
• 16:35
  Speaker 1: of the auction. So we're we're a live auction company.
• 16:38
  Speaker 1: We prefer to, you know, to include the excitement of
• 16:41
  Speaker 1: a live auction, whether you're in person, on the phone,
• 16:43
  Speaker 1: or via the internet. However you want to bid with us,
• 16:46
  Speaker 1: you can participate, Dave. But I understand it correctly that
• 16:50
  Speaker 1: you're at the big football stadium in in Glenville, correct.
• 16:54
  Speaker 1: State Farmers. State Farmers our oldest and and largest sponsor,
• 16:59
  Speaker 1: and we're really happy to have this third year. I
• 17:01
  Speaker 1: believe that we've been at State Farm Stadium where the
• 17:03
  Speaker 1: Arizona Cardinals. I mean that suggests you're gonna have a
• 17:06
  Speaker 1: lot of people, a lot of Matt Miller type people
• 17:09
  Speaker 1: come through. How many people are going to come through
• 17:10
  Speaker 1: this auction, Well, we'll probably have over the four days
• 17:13
  Speaker 1: of the auction, we'll probably have somewhere around twenty people.
• 17:17
  Speaker 1: You know. I certainly wish that we could fill the
• 17:19
  Speaker 1: sixty five thousand seats in the arena every day, but
• 17:22
  Speaker 1: that that doesn't quite happen. Have you seen any effect
• 17:26
  Speaker 1: of I mean, I don't know Russians, uh what their
• 17:29
  Speaker 1: taste is in cars, but have you ever seen have
• 17:31
  Speaker 1: you seen any effect on the the sanctions? You know,
• 17:36
  Speaker 1: we haven't yet. We do have a few Russian collectors
• 17:41
  Speaker 1: that work with us. I assume that we're going to
• 17:44
  Speaker 1: see you know, that fall off. They're typically not at
• 17:47
  Speaker 1: this auction there at one of our two biggest auctions,
• 17:50
  Speaker 1: either in cas Semi, Florida that we just had in
• 17:52
  Speaker 1: January or Indianapolis, Indiana in May. But I would expect
• 17:56
  Speaker 1: that we're probably going to see them apps and hopefully
• 18:00
  Speaker 1: this conflict is over by the time we get to
• 18:02
  Speaker 1: May and things get back to normal little bit, not
• 18:05
  Speaker 1: just for the sake of our auctions and our collector
• 18:07
  Speaker 1: and look for the world in general. From your mouth
• 18:09
  Speaker 1: to God's ears. Dave, thanks so much for joining us.
• 18:12
  Speaker 1: Dave Major's there, the CEO of me Com Collector Car Auctions.
• 18:16
  Speaker 1: The auction I think its off tomorrow in Glendale. I'm
• 18:18
  Speaker 1: definitely gonna be sitting home watching it. You can follow
• 18:21
  Speaker 1: that TV, yeah, for sure, or or online or online,
• 18:24
  Speaker 1: but I'm probably not gonna be bidding during this entire
• 18:31
  Speaker 1: pandemic and the resulting economic dislocation. One of areas of
• 18:35
  Speaker 1: the economy that just always amazed me to the upside
• 18:37
  Speaker 1: was the real estate business, whether it's new home sales,
• 18:42
  Speaker 1: new home construction, um existing home sales just really really strong.
• 18:47
  Speaker 1: And obviously there's a lot of reasons for that, not
• 18:49
  Speaker 1: the least which is a record low interest rate. But
• 18:51
  Speaker 1: a lot of folks are thinking about ways to play that,
• 18:53
  Speaker 1: and one way might be through the technology side. Uh
• 18:56
  Speaker 1: two weeks Court Demaunch. He's the CEO of pro Corps
• 18:59
  Speaker 1: technolog He joins us here. See thanks so much for
• 19:02
  Speaker 1: joining us here. Tell us about procure pro Core pro
• 19:07
  Speaker 1: Core Sorry, and how you guys kind of kind of
• 19:09
  Speaker 1: fit into the construction business. Yeah, no, Paul, by the way,
• 19:14
  Speaker 1: thank you for having me nice too, nice to meet you.
• 19:16
  Speaker 1: So pro Core is a construction project management platform and
• 19:21
  Speaker 1: we have provided we provide solutions to everybody involved in
• 19:23
  Speaker 1: the construction process. So if you've ever built anything like
• 19:26
  Speaker 1: remodeled the bathroom or built a house, you know that
• 19:29
  Speaker 1: you're going to hire a general contractor and a bunch
• 19:31
  Speaker 1: of subcontractors and these folks are going to come together, uh,
• 19:34
  Speaker 1: probably never worked together as a team before and try
• 19:37
  Speaker 1: to solve the complexities of your project, which is a prototype.
• 19:40
  Speaker 1: And it doesn't matter if it's a house, doesn't matter
• 19:42
  Speaker 1: if it's a nuclear power plant or a port, or
• 19:44
  Speaker 1: a bridge or a highway. Uh. You know, construction is
• 19:47
  Speaker 1: everywhere and pro Work platform brings everybody together onto a
• 19:51
  Speaker 1: single source of truth uh and enables jobs to get
• 19:53
  Speaker 1: done on time and on budget. And it's um you know,
• 19:56
  Speaker 1: we've we've now been in business for twenty years and
• 19:58
  Speaker 1: we're a global company and we're having a lot of fun.
• 20:01
  Speaker 1: So how much of your business is retail, residential versus
• 20:06
  Speaker 1: um you know, commercial? So it's actually even way broader
• 20:10
  Speaker 1: than that, Pall. It's it's interesting people tend to think
• 20:12
  Speaker 1: of construction as being residential and commercial. Um, there is industrial,
• 20:17
  Speaker 1: there's warehouses, there is ports and harbors and civil engineering
• 20:21
  Speaker 1: projects and you know, uh, nuclear power plants. So um,
• 20:25
  Speaker 1: we are very diversified across a very broad spectrum. There's
• 20:30
  Speaker 1: very little construction on this planet that doesn't benefit from
• 20:34
  Speaker 1: using pro corps across all of those sectors. So we're
• 20:37
  Speaker 1: very much not concentrated. All right, So give us a
• 20:40
  Speaker 1: sense of kind of how your business fared during the
• 20:43
  Speaker 1: pandemic and kind of what's the near term outlook. Yeah,
• 20:47
  Speaker 1: so um, we we we tend to follow the macro
• 20:51
  Speaker 1: economic environment pretty pretty closely, which was as as the
• 20:56
  Speaker 1: pandemic came on. Um, the general sense it in the
• 21:00
  Speaker 1: building industry was there was some fear about what was
• 21:02
  Speaker 1: coming in the future. Um. So what we what we
• 21:06
  Speaker 1: saw was there were some headwinds in the industry, but
• 21:08
  Speaker 1: then there were some tail winds. So let me the
• 21:10
  Speaker 1: headwinds that we faced when we were going into the
• 21:12
  Speaker 1: pandemic was, uh, there's been a labor shortage in construction
• 21:16
  Speaker 1: for years and that only got more challenging during the
• 21:20
  Speaker 1: during the pandemic. And then you you you know, you've
• 21:23
  Speaker 1: probably talked a lot about the supply chain challenges and
• 21:26
  Speaker 1: the global economy, and that's been an issue as well
• 21:29
  Speaker 1: as commodity prices and inflation. So those are the headwinds
• 21:32
  Speaker 1: um that we see in the industry, but we are
• 21:34
  Speaker 1: benefiting from some tail winds. And the tail winds are
• 21:37
  Speaker 1: that this industry is one of the last to go
• 21:40
  Speaker 1: through the digital transformation uh phase, so in it's still
• 21:43
  Speaker 1: early days in digital transformation, and COVID brought on two
• 21:48
  Speaker 1: new kind of opportunities for pro Core. One was because
• 21:51
  Speaker 1: of the remote work environment that came out of COVID.
• 21:54
  Speaker 1: A platform like pro Corp, which brings everyone together virtually
• 21:58
  Speaker 1: is really really beneficial to come and so it enables
• 22:00
  Speaker 1: people to not have to drive into the job site
• 22:03
  Speaker 1: every day that don't aren't required to be there. Number
• 22:05
  Speaker 1: one and number two was some of the some of
• 22:07
  Speaker 1: the folks that had been in the industry for a
• 22:09
  Speaker 1: long time retired during COVID, and then a lot of
• 22:13
  Speaker 1: the younger folks that were coming out of university. We're
• 22:15
  Speaker 1: coming in to the industry expecting the technology that would
• 22:19
  Speaker 1: be uh you know, mobile centric and more consumer based,
• 22:22
  Speaker 1: and that's where pro Bowl really shines. So what we
• 22:24
  Speaker 1: like to say, is that on net net basis, the
• 22:27
  Speaker 1: headwinds and the tail winds kind of um netted themselves out.
• 22:31
  Speaker 1: But I will tell you that the head winds are
• 22:33
  Speaker 1: working themselves out over time, and we are incredibly optimistic
• 22:37
  Speaker 1: about this fourteen trillion dollar TAM that we're looking at all. Right,
• 22:41
  Speaker 1: So in terms of your company, you mentioned it was
• 22:43
  Speaker 1: twenty years old, came public last year, had some gold
• 22:46
  Speaker 1: plated underwriters there sixty seven dollars share the stocks that
• 22:49
  Speaker 1: just under fifty two dollars today. The good news, it's
• 22:52
  Speaker 1: up four percent today. The bad news is down about
• 22:55
  Speaker 1: the thirty year today. What's the market concern around your
• 22:59
  Speaker 1: stock over the last several months. I don't believe that
• 23:03
  Speaker 1: our stock has been singled out. I believe that our sector,
• 23:06
  Speaker 1: the high growth vertical SAS market, has been uh challenged
• 23:10
  Speaker 1: across so our cohorts I think are spacing the same challenges.
• 23:13
  Speaker 1: I think we because we closed out the year so
• 23:16
  Speaker 1: strong and we're so optimistic about the future that I
• 23:19
  Speaker 1: think all of this will work itself out over time.
• 23:21
  Speaker 1: So talk to us about the growth driver. What's the
• 23:24
  Speaker 1: key growth driver that you guys are real is he
• 23:25
  Speaker 1: really is focusing on right now. Aside from just the
• 23:28
  Speaker 1: economic expansion, yeah, so um our platform is very much
• 23:34
  Speaker 1: driven around driving growth uh and and driving adoption of
• 23:38
  Speaker 1: new users and new pain customers. Interestingly enough, our platform
• 23:42
  Speaker 1: allows our customers to bring on unlimited collaborators onto the platform,
• 23:46
  Speaker 1: So if you're general contractor, you can bring all your
• 23:48
  Speaker 1: subs on it no additional costs to the platform. And
• 23:51
  Speaker 1: because of that, we create this fly wheel effect of
• 23:54
  Speaker 1: more The more people on our platform that see the
• 23:56
  Speaker 1: value of it, the more people that want to be
• 23:57
  Speaker 1: our customers. So the growth factors are the network effect
• 24:02
  Speaker 1: that we get from the from our platform, our international
• 24:06
  Speaker 1: expansion of the CAM is outside the US, and our
• 24:10
  Speaker 1: international group last year. We have a lot of new
• 24:14
  Speaker 1: products that our customers can can put us on our platform,
• 24:17
  Speaker 1: and so there's just a lot of ways that we
• 24:19
  Speaker 1: look at growth in four and it's exciting. Some good stuff.
• 24:22
  Speaker 1: There to a quarterma CEO of pro Court Technologies joining
• 24:25
  Speaker 1: us here talk about technology coming to the construction business
• 24:28
  Speaker 1: and where the upside might be. Thanks for listening to
• 24:31
  Speaker 1: the Bloomberg Markets podcast. You can subscribe and listen to
• 24:35
  Speaker 1: interviews with Apple Podcasts or whatever podcast platform you prefer.
• 24:39
  Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller. Three
• 24:44
  Speaker 1: pt on Fall Sweeney, I'm on Twitter at pt Sweeney.
• 24:46
  Speaker 1: Before the podcast. You can always catch us worldwide at
• 24:49
  Speaker 1: Bloomberg Radio