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How to Tweak the 60/40 Portfolio to Boost Yield: Ritholtz · Bloomberg Intelligence

• 0:01
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along
• 0:04
  Speaker 1: with my co host of Bonnie Quinn. Every business day
• 0:06
  Speaker 1: we bring you interviews from CEOs, A market pros, and
• 0:09
  Speaker 1: Bloomberg experts, along with essential market moving news kind the
• 0:12
  Speaker 1: Bloomberg Markets Podcast on Apple Podcasts or wherever you listen
• 0:16
  Speaker 1: to podcasts and on Bloomberg dot com focusing on markets here,
• 0:22
  Speaker 1: you know, you've got the interest rates and incredibly low.
• 0:25
  Speaker 1: It seems like if you listen to the Fed chairman
• 0:27
  Speaker 1: pal lower for longer. That calls into a question a
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  Speaker 1: lot of folks about the traditional sixty forty portfolio stocks
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  Speaker 1: and bonds. Is that dead? Is that a thing of
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  Speaker 1: the past. I'm gonna put that to Barry Ridholt's Bloomberg
• 0:40
  Speaker 1: opinion columnists and host of Masters in Business on Bloomberg Radio,
• 0:44
  Speaker 1: also founder in chief investment officer of Riddholt's Wealth Management. Barry,
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  Speaker 1: thanks so much for joining us here. So the sixty
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  Speaker 1: forty portfolio is that kind of a thing in the past. Yeah,
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  Speaker 1: you know, I always feel like a doctor who's telling
• 0:58
  Speaker 1: people they need to exercise and watch what they eat
• 1:02
  Speaker 1: when we discuss these traditional portfolios. Um no, these portfolios
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  Speaker 1: are are not dead. And look no further than the
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  Speaker 1: folks who had an all equity portfolio heading in to
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  Speaker 1: March of this year, all that panic selling we saw
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  Speaker 1: after a thirty percent drop, I'm pretty confident that most
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  Speaker 1: of those people did not have the sort of diversified
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  Speaker 1: portfolio where thirty or forty of your holdings are fixed
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  Speaker 1: income that operate as a volatility dampener. And and it's
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  Speaker 1: not just about yield. Well exactly, it wouldn't want to
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  Speaker 1: be these days, what barries So you're saying it's it's
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  Speaker 1: purely for the volatility dampening of of bonds that you'd
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  Speaker 1: have a bonds right now. Well, you know, consider it
• 2:00
  Speaker 1: at a fairly conservative portfolio. Depending on your age, your
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  Speaker 1: risk tolerance, that could be seventy thirty six if you're
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  Speaker 1: young and you could tolerate the swings that we've seen
• 2:12
  Speaker 1: in the market. Something like eight is certainly viable if
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  Speaker 1: you have a forty fifty year even a thirty year
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  Speaker 1: time horizon. You know, the problem that we always seem
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  Speaker 1: to encounter is that people look at low yields and
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  Speaker 1: what is it. A decade ago people were complaining that's
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  Speaker 1: the ten year had fallen to a four percent yield,
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  Speaker 1: people would people would kill for four percent. Now, uh,
• 2:39
  Speaker 1: that you cannot get blood from a stone, you cannot
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  Speaker 1: create something out of nothing, and you have to accept
• 2:46
  Speaker 1: that your options are limited and there's only so much
• 2:50
  Speaker 1: you can do. Now, there are things you can do UM,
• 2:54
  Speaker 1: and there are are different structural changes you can make
• 2:57
  Speaker 1: in different holdings you can have, but you have to
• 2:59
  Speaker 1: be real realistic that if you're looking for higher rates
• 3:03
  Speaker 1: in a low rate environment, you are taking on more
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  Speaker 1: risk and and that's the key to remember, and risk
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  Speaker 1: means potential loss. Hey, Barry, I think since the last
• 3:13
  Speaker 1: time we all sat down a chat chatted, we've had
• 3:18
  Speaker 1: at least a couple of pharmaceutical companies come out with
• 3:21
  Speaker 1: a vaccine. Data seems very very promising. Yet at the
• 3:24
  Speaker 1: same time we're seeing metrics on the pandemic just go
• 3:29
  Speaker 1: the absolute wrong way and certain cities and countries shutting down.
• 3:35
  Speaker 1: Is he stepped back here any What are your thoughts
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  Speaker 1: on that as it relates to the markets. Sure? So,
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  Speaker 1: there are there are two approaches that you take when
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  Speaker 1: you're dealing with a pandemic. One is a vaccine that
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  Speaker 1: will stop UM the spread of this, and and the
• 3:53
  Speaker 1: other is the various non pharmaceutical approaches that will allow
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  Speaker 1: you to to tamp down on the spread of the
• 4:05
  Speaker 1: epidemic while you're waiting for the pharmaceutical solution. And it
• 4:09
  Speaker 1: pretty much appears like this administration made a bet on
• 4:12
  Speaker 1: the former and while ignoring the latter, they went all
• 4:16
  Speaker 1: in on vaccines. And listen, these vaccines are going to
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  Speaker 1: be fantastic when they finally are manufactured in number and
• 4:22
  Speaker 1: are widely distributed and of the U S population has
• 4:27
  Speaker 1: taken them so that we have full herd immunity. But
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  Speaker 1: that's you know, six months at the earliest off in
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  Speaker 1: the future, maybe even more, maybe eight or ten months
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  Speaker 1: off in the future. And so the idea that we
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  Speaker 1: could ignore things like social distancing and working from home
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  Speaker 1: and wearing masks whenever we go outside is folly. And
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  Speaker 1: you see that in these you know, insane infection rates
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  Speaker 1: were coming up on two hundred thousand new infections a day.
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  Speaker 1: It's is horrible. And so on the one hand, you
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  Speaker 1: see the equity markets looking past that valley, but on
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  Speaker 1: the other hand, the broader economy is bracing for for
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  Speaker 1: quite the difficult couple of months. If not quarters, and
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  Speaker 1: that gets reflected in the bond market. Right But I
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  Speaker 1: do wonder if you wouldn't be better at all replacing
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  Speaker 1: some of that allocation with, for example, gold right now, Well,
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  Speaker 1: it depends on what your purpose. If you're if you're
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  Speaker 1: looking for a volatility dampen or go back to O
• 5:33
  Speaker 1: eight oh nine, go back to other periods of high
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  Speaker 1: volatility two thousand and of course, and you'll see, you know,
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  Speaker 1: gold didn't quite fall as much as stocks, but it's
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  Speaker 1: certainly um got hit when when the market fell. Bonds,
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  Speaker 1: on the other hand, not only did they not fall,
• 5:50
  Speaker 1: but they attracted capital. It's a it's a you know,
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  Speaker 1: it's it's a safe harbor in a storm on a
• 5:56
  Speaker 1: temporary basis. Um, what we've been telling people who were
• 6:01
  Speaker 1: looking for yield and are willing to take a little
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  Speaker 1: bit more risk, there are a couple of options they have.
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  Speaker 1: Certainly shortening your duration and and not owning a ten
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  Speaker 1: year taking less yield today, Um, you could you can
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  Speaker 1: own a three month treasury note. It's not that far
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  Speaker 1: less paying than what the tenure pays. And if eventually,
• 6:25
  Speaker 1: if and when rates go up, you can start rolling
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  Speaker 1: out of that into higher yields down the road. Um,
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  Speaker 1: we we suggest that for people who have montized portfolios,
• 6:37
  Speaker 1: if if you have a larger portfolio, well, you could
• 6:40
  Speaker 1: obviously construct a bond ladder, so you have three and
• 6:46
  Speaker 1: maturity dates and so on. You ladder that out for
• 6:49
  Speaker 1: a decade or longer. And then when each of the
• 6:54
  Speaker 1: legs of vote that ladder, each of the rungs of
• 6:57
  Speaker 1: that ladder come, do you replace them with ten year
• 7:01
  Speaker 1: out paper that is hopefully yielding higher levels. So you're
• 7:07
  Speaker 1: you're getting the benefit of edit duration now and if
• 7:11
  Speaker 1: yield goes up over time, well as each of these
• 7:14
  Speaker 1: wrongs mature, you have the opportunity to swap out higher
• 7:18
  Speaker 1: yielding treasury. Yeah, for sure, we're out of time. But
• 7:21
  Speaker 1: who is your next Master's Business candidate? UM? So I
• 7:25
  Speaker 1: have I have two really interesting people coming up. One
• 7:29
  Speaker 1: is Greg Fleming Um who who I'm sure you're familiar
• 7:33
  Speaker 1: with from from all of his um all of his
• 7:37
  Speaker 1: investment banking work. But the UH this weekend is Dennis
• 7:42
  Speaker 1: Lynch who is Morgan Stanley Counterport Global and has put
• 7:48
  Speaker 1: together an incredible track record this year. A lot of
• 7:52
  Speaker 1: his funds are up nearly double, so that that's a
• 7:55
  Speaker 1: fascinating conversation. Yeah, alright, Dennis Lynch, and then Gregory's timing,
• 8:00
  Speaker 1: who is now the president CEO of Rockefeller Capital Management,
• 8:03
  Speaker 1: coming up on Masters in Business with our guests. I
• 8:05
  Speaker 1: remember when Dennis Lynch was my client. He was a young, young,
• 8:09
  Speaker 1: young by side analyst at Morgan Stanley. Now he's a
• 8:11
  Speaker 1: very successful portfolio manager. They're running that large cap group.
• 8:15
  Speaker 1: Putting up just great numbers is very well. I think
• 8:17
  Speaker 1: you need to call Barry offline and give him a
• 8:19
  Speaker 1: few anecdotes so we can spin them into in business
• 8:22
  Speaker 1: always makes for a good introduction if you have a
• 8:24
  Speaker 1: little dirt on somebody. We got some economic data this
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  Speaker 1: morning from the Conference Board. It's leading Economic Index for
• 8:33
  Speaker 1: the US increased zero point seven percent in October, following
• 8:37
  Speaker 1: a zero point seven percent increase in September and at
• 8:40
  Speaker 1: one point six percent increase in August. To help us
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  Speaker 1: break it down, we welcome again ottoman Azzo Drum, Senior
• 8:45
  Speaker 1: Director Economics and Global Research Chair at the Conference Board. Automan,
• 8:50
  Speaker 1: thanks for joining us again. A good month. Uh what's
• 8:54
  Speaker 1: the takeaways here? Hi? Good morning, Thanks for having me
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  Speaker 1: on the program. Um. Yes, so the U S l
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  Speaker 1: Ai Rose again in October. The improvements were widespread among
• 9:05
  Speaker 1: leading indicators, despite the weakness from housing permits and the
• 9:10
  Speaker 1: consumer's outlook on economic conditions. So the takeaway is that
• 9:15
  Speaker 1: there is a recovery and leading indicators which bodes well
• 9:19
  Speaker 1: for the economic recovery. Um. But the leading index itself
• 9:24
  Speaker 1: has been decelerating in recent months. So that suggests that
• 9:28
  Speaker 1: growth will moderate going into the final months of twenty
• 9:33
  Speaker 1: and that will slow down from the the very unusual
• 9:37
  Speaker 1: rapid pace that we saw in the third quarter. And
• 9:41
  Speaker 1: certain things like stock prices helped boy its a little
• 9:43
  Speaker 1: bit this month, So you have to wonder if that's
• 9:46
  Speaker 1: a good thing for the entire economy, is just for
• 9:48
  Speaker 1: a certain portion of the economy. Well, when when you
• 9:51
  Speaker 1: look at the leading indicators, uh, you know, over several months,
• 9:57
  Speaker 1: especially stock prices, the yield spread components have been supporting
• 10:03
  Speaker 1: the improvements in the leading index UM. So you know,
• 10:07
  Speaker 1: that is a positive for the economy, But that's not
• 10:12
  Speaker 1: the whole of the sort of economic activity, right, so
• 10:16
  Speaker 1: there are other weaknesses that we've been seeing in other
• 10:20
  Speaker 1: parts of economic activity, and um, you know, you kind
• 10:25
  Speaker 1: of have to look at it as a glass full,
• 10:27
  Speaker 1: glass half full, half empty situation. It's entering autumn. It's
• 10:33
  Speaker 1: you know, the numbers are decent, the economy is recovering,
• 10:36
  Speaker 1: but then you know, every Thursday we get these jobs claims. Uh,
• 10:39
  Speaker 1: and it just kind of is a you know, shows
• 10:41
  Speaker 1: you that there are some serious headwinds still out there
• 10:44
  Speaker 1: in the marketplace, perhaps exacerbated by some of these metrics
• 10:47
  Speaker 1: for seeing from the virus and closing down. UM, how
• 10:52
  Speaker 1: do you think about the labor market as it relates
• 10:55
  Speaker 1: to the overall economic outlook. Yeah, the labor market obviously
• 11:00
  Speaker 1: is a very important element, especially in this recession, as
• 11:04
  Speaker 1: with every recession, but more so this time, I think
• 11:07
  Speaker 1: because the impact has been so disruptive for labor markets. UM.
• 11:12
  Speaker 1: I went back over several months and looked at so
• 11:15
  Speaker 1: the UI claims contributions in the ALII and the improvement
• 11:20
  Speaker 1: that we're seeing in the ALI over six months, half
• 11:24
  Speaker 1: of that comes from UI claims. UM. But again, UM,
• 11:29
  Speaker 1: we are seeing a deceleration in the improvements in labor
• 11:33
  Speaker 1: markets and that's going to be concerning, I think looking
• 11:36
  Speaker 1: ahead at the recovery, so we had what five six
• 11:40
  Speaker 1: months of positive personal income X transfers and it's still positive,
• 11:44
  Speaker 1: but it's very very anemic, Aloman. What what is that
• 11:49
  Speaker 1: telling us? Yeah? Again, you know, it is really a
• 11:54
  Speaker 1: reflection of all these disruptions that we're seeing, uh in
• 11:58
  Speaker 1: in the labor markets. People are concerned about their employment status,
• 12:03
  Speaker 1: uh ability to you know, keep their jobs. Uh. And
• 12:07
  Speaker 1: that has a reflection directly on their income levels. So
• 12:11
  Speaker 1: that does create some risk aversion um. And a lot
• 12:15
  Speaker 1: of the gains in personal income that we were seeing
• 12:19
  Speaker 1: is coming from uh, you know, a component called transfer payments, right,
• 12:23
  Speaker 1: so government stimulus programs, unemployment insurance programs have been supporting
• 12:31
  Speaker 1: those income levels UM. And you know, without that artificial support,
• 12:36
  Speaker 1: I think there is a lot of concern on people's
• 12:38
  Speaker 1: minds about again employment and income looking ahead a lot
• 12:43
  Speaker 1: about One part of the economy that continues to really
• 12:46
  Speaker 1: impress me. Surprised me actually is the housing market. We
• 12:49
  Speaker 1: had the existing home sales today, very strong numbers. Uh.
• 12:53
  Speaker 1: News starts yesterday, very strong numbers. Um. How does that
• 12:57
  Speaker 1: factor into your economic work and your outlook? Yeah? They
• 13:03
  Speaker 1: Uh there has been uh you know, more positive news
• 13:06
  Speaker 1: coming from the construction housing construction uh factor over the
• 13:12
  Speaker 1: last several months. That's good news for the economy because
• 13:16
  Speaker 1: it is a leading sector for overall economic activity UM.
• 13:21
  Speaker 1: In the leading index UM, we use a related component
• 13:25
  Speaker 1: which is building permits. Uh. That's highly correlated with starts,
• 13:29
  Speaker 1: but it tends to be a little bit smoother, So
• 13:31
  Speaker 1: it gives us a better view on a smoother view
• 13:34
  Speaker 1: on the business cycle and building permits UH contribution in
• 13:39
  Speaker 1: October war zero UM, So that could be a little
• 13:43
  Speaker 1: bit concerning. And I'd been watching that very carefully. Yeah,
• 13:46
  Speaker 1: we were looking at yesterday a month of a month,
• 13:48
  Speaker 1: it's flat and economist we're looking for it to be
• 13:51
  Speaker 1: up one point four and you have to wonder if
• 13:53
  Speaker 1: this isn't going to be a blip in the future
• 13:57
  Speaker 1: of housing starts. I mean, yes, how's the stars themselves
• 14:00
  Speaker 1: are still really strong at four point present in October,
• 14:03
  Speaker 1: but the permits aren't going in there, are they? Rights? Right? Uh?
• 14:08
  Speaker 1: So you know the weakness and permits of course is
• 14:10
  Speaker 1: related to the future activity and uh you know whether
• 14:14
  Speaker 1: you actually will start construction and whether the the good
• 14:18
  Speaker 1: news will continue or not. And uh, I think that
• 14:22
  Speaker 1: just highlights some, uh, some of the risks in economic recovery. AM.
• 14:27
  Speaker 1: We had the president of the Cleveland Fed on this morning, UH,
• 14:32
  Speaker 1: and one of the things she spoke about was the
• 14:34
  Speaker 1: continued need for fiscal stimulus. Uh, we haven't gotten that
• 14:39
  Speaker 1: fourth round that a lot of people in the market
• 14:42
  Speaker 1: were looking for a How do you think that's going
• 14:45
  Speaker 1: to play out with our the new uh newly elected
• 14:48
  Speaker 1: officials and and be what is it in your base
• 14:51
  Speaker 1: case at all? Um? You know, in our base case,
• 14:56
  Speaker 1: we haven't allowed for a lot more stimul us coming in.
• 15:01
  Speaker 1: But you know, as we know, at the end of
• 15:03
  Speaker 1: the year, a lot of these unemployment support programs are
• 15:07
  Speaker 1: going to expire. UM, So that does have an impact
• 15:11
  Speaker 1: on our projections. You know, over the next couple of quarters. UH,
• 15:15
  Speaker 1: without a large degree of government government stimulus, we're projecting
• 15:21
  Speaker 1: around two point two percent growth for the final quarter
• 15:26
  Speaker 1: UM and slowing growth in the first quarter of the
• 15:29
  Speaker 1: next year. I think just about all points seven percent
• 15:32
  Speaker 1: for GDP growth, Ottoman, you know, explain why all this
• 15:37
  Speaker 1: is happening. And at the same time, consumers seem to
• 15:40
  Speaker 1: be spending because we saw that in the retail learnings,
• 15:42
  Speaker 1: we saw in some other data, you know, in the
• 15:45
  Speaker 1: last few weeks. UM. Yeah again, Um, you know, personal
• 15:51
  Speaker 1: income has been doing well, it's deported by unemployment support
• 15:56
  Speaker 1: um so that partly explains uh, the good retail spending figures.
• 16:03
  Speaker 1: Um but I would be concerned about whether those trends
• 16:07
  Speaker 1: are going to be sustainable, especially now we have this
• 16:11
  Speaker 1: deceleration and the improvement in labor markets, and we're also
• 16:15
  Speaker 1: being faced by a second wave of the COVID nineteen outbreaks.
• 16:20
  Speaker 1: Um So that is likely to I think constrain a
• 16:24
  Speaker 1: consumer spending and that's probably the biggest factor in our
• 16:29
  Speaker 1: projections for the slowing growth in the last quarter. Ottoman,
• 16:34
  Speaker 1: thank you so much for joining us. As always, we
• 16:36
  Speaker 1: appreciate your thoughts. Ottoman also Drum, director of Economic research
• 16:40
  Speaker 1: and a global research there at the conference board, and
• 16:42
  Speaker 1: we appreciate his thoughts. So now let's get to our
• 16:47
  Speaker 1: guests and continue to talk markets. Brian Fairbanks is CEO
• 16:51
  Speaker 1: of Tricks, and Brian was listening to some of that. Brian,
• 16:54
  Speaker 1: they're just wondering what your takeaway is on coronavirus and
• 16:58
  Speaker 1: where we're at as an economy and where corporate America
• 17:01
  Speaker 1: is at. Oh, that's an absolute tough cup panel to follow.
• 17:05
  Speaker 1: We see great opportunity as we move forward. We're very
• 17:09
  Speaker 1: encouraged by the progress being made with the vaccines, as
• 17:14
  Speaker 1: well as the actions being taken in various states to
• 17:18
  Speaker 1: try to stem the continued spread of the virus. There
• 17:22
  Speaker 1: really tres company. We see continued opportunity for people to
• 17:26
  Speaker 1: improve their living spaces by buying our eco friendly outdoor decking.
• 17:32
  Speaker 1: So Brian, it's you know, we've seen this a lot
• 17:35
  Speaker 1: during the pandemic, a lot of folks obviously spending a
• 17:37
  Speaker 1: lot more time at home, uh, spending a lot of
• 17:39
  Speaker 1: time at Low's getting stuff to improve their home. Talked
• 17:43
  Speaker 1: us about how your business evolved, you know, starting that
• 17:47
  Speaker 1: February March time frame through today. Sure, we had a
• 17:51
  Speaker 1: lot of questions February March time frame of where the
• 17:54
  Speaker 1: economy was going to go, how the consumer would behave
• 17:58
  Speaker 1: Very quickly by really May, we found that the consumer
• 18:02
  Speaker 1: was very resilient and looking to improve their own living space.
• 18:07
  Speaker 1: One of the tail winds that we saw is that
• 18:09
  Speaker 1: people are interested in having work done outside their house,
• 18:13
  Speaker 1: whether they were doing it themselves and buying it one
• 18:15
  Speaker 1: of our d I Y partners or having a contractor
• 18:18
  Speaker 1: come in and do that. We've continued to see that
• 18:22
  Speaker 1: through the entire summer and now into the fall months. Brian,
• 18:26
  Speaker 1: where are your biggest areas of demand. I'm assuming that
• 18:29
  Speaker 1: in cities where people don't have balconies on us, they
• 18:33
  Speaker 1: can afford a balcony, and that you know that that
• 18:35
  Speaker 1: wouldn't be where your customer bases. It's more in the
• 18:38
  Speaker 1: rural areas. What wouldn't say necessarily rural areas supports so
• 18:42
  Speaker 1: in the suburban areas. So outside of your major cities
• 18:47
  Speaker 1: we are, our volume tends to dominate in those areas
• 18:51
  Speaker 1: where there are large populations. So your suburbs outside of
• 18:55
  Speaker 1: New York through Pennsylvania, down into the south, really across
• 18:59
  Speaker 1: the country where you see the larger population centers, you
• 19:02
  Speaker 1: will see high volume of trecks, decking and railing sales.
• 19:06
  Speaker 1: One of the things we've seen from a commodity standpoint
• 19:09
  Speaker 1: during this um it has been um the price of
• 19:13
  Speaker 1: wood and lumber. Talked to us about that as a
• 19:15
  Speaker 1: raw material for you guys, and kind of how you're
• 19:17
  Speaker 1: managing it. One of the unique things about Tres Company
• 19:21
  Speaker 1: is that our raw materials are recycled content. We are
• 19:25
  Speaker 1: buying poly ethylene from distribution centers, grocery stores all over
• 19:30
  Speaker 1: the country and then reclaimed wood out of furniture flooring manufacturers,
• 19:36
  Speaker 1: so we're not reliant upon the input price of wood
• 19:40
  Speaker 1: along the way because we are using those those leftover
• 19:44
  Speaker 1: scraps from the other parts of the business. And it's
• 19:46
  Speaker 1: a very unique business model that has helped with the
• 19:49
  Speaker 1: financial success of trucks over the years. So apparently compressed
• 19:55
  Speaker 1: landfill is another um I guess for people to use
• 19:59
  Speaker 1: to of there to have some compressed landfill used as decking.
• 20:05
  Speaker 1: How does that work and how do you make sure
• 20:07
  Speaker 1: that you know it's clean and so on. Our primary
• 20:11
  Speaker 1: sources for polyethylene are going to be out of industrial
• 20:16
  Speaker 1: protective wraps, grocery bags, other sort of films coming through.
• 20:22
  Speaker 1: There are opportunities in using landfill and generally require some
• 20:27
  Speaker 1: cleaning and oose are things that we look for opportunities
• 20:31
  Speaker 1: in the future. We hope also with some support of local, state,
• 20:36
  Speaker 1: and federal basis to help us use some of those
• 20:40
  Speaker 1: materials as we move forward. Talk to us about the
• 20:44
  Speaker 1: competitive landscape here. I know I'm guessing that with all
• 20:47
  Speaker 1: the people out there trying to either replace or build
• 20:50
  Speaker 1: new decking, it's not just you guys talked about the
• 20:52
  Speaker 1: competitive landscape for your business. There are three major companies
• 20:57
  Speaker 1: that make up a relatively consolidated industry. Trucks holds about
• 21:01
  Speaker 1: fifty of the share within the industry, and then the
• 21:04
  Speaker 1: other two companies the next so I mentioned consolidated. The
• 21:09
  Speaker 1: most important opportunity that Tres Company has is conversion of
• 21:13
  Speaker 1: market share against the wood industry. Wood accounts for approximately
• 21:18
  Speaker 1: of the volume of material sold, and that's our primary focus.
• 21:24
  Speaker 1: What are your growth plans? Presumably now be the time
• 21:27
  Speaker 1: where you would take advantage of people flying houses and
• 21:30
  Speaker 1: suburban and rural areas, and the house prices going up
• 21:33
  Speaker 1: and so on. Where do you see yourself scaling too
• 21:35
  Speaker 1: over the next few months. Over the past five years,
• 21:38
  Speaker 1: we've been growing at about a thirteen percent rate. This year,
• 21:42
  Speaker 1: with the midpoint of our fourth quarter guidance, our growth
• 21:45
  Speaker 1: would be and as we look to the forward years
• 21:49
  Speaker 1: with the wood conversion opportunity, we see no reason why
• 21:53
  Speaker 1: that would flow. Our product lines are highly desirable or
• 21:59
  Speaker 1: making low maintenance building products and improving the value of
• 22:05
  Speaker 1: people's hamet and we continue to see people looking for
• 22:08
  Speaker 1: repairing or model especially as the turnover of homes continues
• 22:12
  Speaker 1: to increase. So I see your stock is up six
• 22:15
  Speaker 1: this year. I'm looking at your balance sheet, not much debt.
• 22:18
  Speaker 1: What do you do here with your stock up here yet?
• 22:21
  Speaker 1: Any interest in selling stock or are you comfortable with
• 22:24
  Speaker 1: your capital structure is right here? Yeah, this is a
• 22:27
  Speaker 1: great time to have a conservative capital structure. That's something
• 22:31
  Speaker 1: that the Tres company has always prided itself on and
• 22:34
  Speaker 1: we received a lot of credit for that as we
• 22:37
  Speaker 1: moved through the pandemic phase. As we look forward, our
• 22:40
  Speaker 1: key key priorities will be first, organic growth. We're in
• 22:45
  Speaker 1: the midst of a two million dollar capacity improvement program
• 22:49
  Speaker 1: seventy capacity increase and most of that capacity will start
• 22:54
  Speaker 1: coming online in early Additional priorities are share BUYBA accident. Lastly,
• 23:01
  Speaker 1: it would be acquisitions that fit are strategic growth acquisitions.
• 23:07
  Speaker 1: Just briefly, can you tell us if you have your
• 23:08
  Speaker 1: eye on anything, Nothing in particular that we'd be discussing,
• 23:13
  Speaker 1: but we're always having discussions out in the marketplace and uh,
• 23:17
  Speaker 1: interesting things from time to time. Yeah, sure, Brian, thank you,
• 23:21
  Speaker 1: very very interesting and to come back on when you
• 23:24
  Speaker 1: get a little more serious about a particular acquisition. We
• 23:27
  Speaker 1: would love to hear about a buying. Fairbanks is CEO
• 23:31
  Speaker 1: of Tricks the Outdoor Decking Company. Stock is a heck
• 23:35
  Speaker 1: of a run again up six, because I guess that
• 23:38
  Speaker 1: makes sense. It's one of those um you just stay
• 23:41
  Speaker 1: at home place, right, Bunny. Yeah? And I mean, what
• 23:43
  Speaker 1: are you going to do if if the only exercise
• 23:45
  Speaker 1: you're you're getting is a d I y, Well, there's
• 23:47
  Speaker 1: that deck area that you kept meaning to build when
• 23:50
  Speaker 1: I building Now. Thanks for listening to the Boomberg Markets podcast.
• 23:54
  Speaker 1: You can subscribe and listen to interviews at Apple Podcasts
• 23:58
  Speaker 1: or whatever podcast platform you prefer. I'm Bonnie Quinn. I'm
• 24:01
  Speaker 1: on Twitter at Bonnie Quinn, and I'm Paul Sweeney. I'm
• 24:04
  Speaker 1: on Twitter at pt Sweeney. Before the podcast, you can
• 24:06
  Speaker 1: always catch us worldwide at Bloomberg Radio