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Retail Sales, AI Investing, EVs, And Adobe (Podcast) · 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. The consumer, despite this
• 0:23
  Speaker 1: rampant inflation that's hitting all of us, whether the gas
• 0:25
  Speaker 1: pumper in the supermarket, the consumers kind of hanging in there,
• 0:29
  Speaker 1: you know. I mean, we got some retail sales today
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  Speaker 1: kind of came in a little bit better than expect
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  Speaker 1: to look. Under the hood, there's definitely some concern there,
• 0:35
  Speaker 1: but you know, the headline number was pretty decent. I
• 0:37
  Speaker 1: want to break it down with Angie Solanki, National director
• 0:40
  Speaker 1: of Retail Services in the United States for Colliers. Colliers
• 0:44
  Speaker 1: is a publicly traded company uh NASDACS c I G
• 0:48
  Speaker 1: I is a took her to put into your Bloomberg
• 0:51
  Speaker 1: terminal and you what you make of the August retail
• 0:55
  Speaker 1: sales numbers. It was great to see that we had,
• 0:59
  Speaker 1: even though it was a slight rise, that there is
• 1:01
  Speaker 1: still confidence. Uh spend is still occurring, but it's occurring
• 1:06
  Speaker 1: more so where they're focused on value oriented because there's
• 1:10
  Speaker 1: still the inconsistency. Right there may be still a little
• 1:15
  Speaker 1: bit of concern as we see inflation still continuing to occur,
• 1:20
  Speaker 1: but overall there's still some confidence. I think retailers were
• 1:24
  Speaker 1: pleasantly surprised. So the headline number onto was again of
• 1:30
  Speaker 1: three tenths of one per cent, and I'm wondering what
• 1:34
  Speaker 1: that looks like when you adjusted for inflation, because these
• 1:37
  Speaker 1: numbers are not adjusted for inflation, right, correct? Correct? Um,
• 1:41
  Speaker 1: They definitely are not. I think that what we should
• 1:44
  Speaker 1: look at is if we look at, you know, the
• 1:46
  Speaker 1: last time we've seen inflation hit as as high as
• 1:50
  Speaker 1: it is right now this year, it was many many
• 1:54
  Speaker 1: moons ago. So yes, it's hurting us in terms of
• 1:57
  Speaker 1: the pocketbook, but overall, the drag we're seeing is still
• 2:02
  Speaker 1: isn't it's it's not as significant. People still understand that
• 2:06
  Speaker 1: there's an increase that they need to be mindful, um,
• 2:09
  Speaker 1: but they're still you know, they still need to look
• 2:12
  Speaker 1: at staple products, groceres spend um we're seeing from retailers
• 2:17
  Speaker 1: right now, though, is this really interesting kind of juxtaposition
• 2:22
  Speaker 1: in terms of they are starting to push out more
• 2:25
  Speaker 1: private labeled brands. So they're they're pushing out their more
• 2:29
  Speaker 1: their own brands and other brands good stuff. So it's September,
• 2:37
  Speaker 1: but I know retailers they're thinking holiday season already. UM,
• 2:41
  Speaker 1: what's the expectation when you talk to some of the
• 2:43
  Speaker 1: retailers out there about how this holiday season may shape up. Well,
• 2:49
  Speaker 1: there's still quite a bit of product in inventory out there,
• 2:51
  Speaker 1: so you know, the concern right now is how much
• 2:55
  Speaker 1: discounting really is required, So retailers are preparing for that. Um,
• 3:00
  Speaker 1: it's still going to be, you know, a fairly busy
• 3:03
  Speaker 1: holiday season. If they start to discount the product to
• 3:06
  Speaker 1: lure you know, the inflation worried shopper in UM, that
• 3:11
  Speaker 1: will start to show spend an increase in spend. But
• 3:15
  Speaker 1: I think it's really more that there's a quite a
• 3:17
  Speaker 1: bit of inventory be concerns still around discounting. You know,
• 3:21
  Speaker 1: this is the first holiday season that we're seeing where
• 3:24
  Speaker 1: consumers are going to most likely slow down due to
• 3:27
  Speaker 1: the high inflation UM in many many years. So we
• 3:31
  Speaker 1: don't really have any learnings from this since it's been
• 3:34
  Speaker 1: so long. UM, there's been talk about third party sellers
• 3:38
  Speaker 1: over at Amazon looking to potentially cut prices even further
• 3:42
  Speaker 1: to move these you know, this inventory that they're sitting on,
• 3:46
  Speaker 1: So that will be interesting for us to watch. In
• 3:49
  Speaker 1: terms of the gasoline component, we've seen prices at the
• 3:52
  Speaker 1: pump come down. Paul checks the regular unloaded up gas
• 3:56
  Speaker 1: average every day, um, and you know, the sales figures
• 4:02
  Speaker 1: excluding gas we're up zero eight percent, So I'm pretty strong.
• 4:06
  Speaker 1: Do you see people taking the savings essentially that they're
• 4:11
  Speaker 1: getting from the drop in pump prices and putting it elsewhere? Yeah. Actually,
• 4:16
  Speaker 1: we're seeing, um, you know, roughly a one percent rise
• 4:20
  Speaker 1: in spend at restaurants and bars. And this was in
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  Speaker 1: the month of August. So even though food costs have
• 4:26
  Speaker 1: you know, have been hit pretty hard, you know, there's
• 4:29
  Speaker 1: still this you know, need to go out to be
• 4:33
  Speaker 1: out socialized. So it's a small percentage increase, but I
• 4:37
  Speaker 1: think people are saying, hey, if I'm going to spend
• 4:40
  Speaker 1: you know, call it a hundred and fifty dollars for
• 4:42
  Speaker 1: a meal for two people at home groceries I have
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  Speaker 1: to buy, then I have to cook, and then I
• 4:48
  Speaker 1: have to clean. Why not just go out and have
• 4:50
  Speaker 1: a little fun. So, Um, I think that people are
• 4:54
  Speaker 1: really thinking where should they spend their time and if
• 4:57
  Speaker 1: it's a cost versus time versus value there they're spending
• 5:02
  Speaker 1: it in the restaurants, which is great for for definitely
• 5:05
  Speaker 1: our our restaurants and bars. Well, my household, I clean.
• 5:09
  Speaker 1: I'm the cleaner guy. I take care of it. Yet
• 5:11
  Speaker 1: I love doing that. Just leave me alone in the kitchen,
• 5:14
  Speaker 1: glass of wine. I'll clean up all day long. So, Angie,
• 5:18
  Speaker 1: and you're going out and spending money at restaurants and bars,
• 5:20
  Speaker 1: I am absolutely that that that's kind of my thing, Angie. Um,
• 5:24
  Speaker 1: for these retailers, can they are they gonna have enough
• 5:26
  Speaker 1: labor here for this holiday season? It just seems to
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  Speaker 1: be a persistent problem across many industries. Yes, that is
• 5:33
  Speaker 1: the one worry, right, um, because you're it's a combination
• 5:37
  Speaker 1: of just resources human resources people. Um. But the second
• 5:42
  Speaker 1: piece of this, right is the uh, the cost. So
• 5:47
  Speaker 1: wages continue to be a concern for many retailers. Um,
• 5:51
  Speaker 1: they continue to increase wages. So that's going to be
• 5:55
  Speaker 1: really something that they're gonna have to focus on. It
• 5:57
  Speaker 1: is it relates to Okay, if we need to push product,
• 6:00
  Speaker 1: need to bring in volume of people. We want to
• 6:02
  Speaker 1: increase our sales. We need people to to have that movement.
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  Speaker 1: But the other thing we're also seeing is technology. Right,
• 6:09
  Speaker 1: so technology continued to be a big play. I don't
• 6:12
  Speaker 1: know if you've read, like Starbucks is coming out with
• 6:14
  Speaker 1: this what they're calling their reinvention strategy to kind of
• 6:17
  Speaker 1: offset some of that labor concern and labor issues. And
• 6:21
  Speaker 1: so they're looking at automating more so over the next
• 6:24
  Speaker 1: several years where you can just get your food and
• 6:27
  Speaker 1: drink orders very quickly and and it cuts down on
• 6:29
  Speaker 1: that employee labor shortage and or cost issue. Alright, Angie,
• 6:34
  Speaker 1: Great Great stuff has always Anti Slanki, national director of
• 6:37
  Speaker 1: Retail Services for Colliers, talking about retail sales came in
• 6:40
  Speaker 1: a little bit better than expected for the month of August.
• 6:47
  Speaker 1: Let's get over speaking of driving across this beautiful country.
• 6:50
  Speaker 1: Let's get over to Brent Shooty right now. He's a
• 6:52
  Speaker 1: chief investment strategist at Northwestern Mutual. Brent, are you in Chicago.
• 6:59
  Speaker 1: I'm in Milwaukee. Know I was in Chicago earlier in
• 7:01
  Speaker 1: my career, but I moved to the beautiful city of Milwaukee.
• 7:03
  Speaker 1: Got it, Well, I just knew that you did your
• 7:05
  Speaker 1: MBA at the University of Chicago. They do numbers there
• 7:08
  Speaker 1: at the university. Highly respected by this program. UM. I'm
• 7:11
  Speaker 1: glad to have you on because I have been having
• 7:15
  Speaker 1: discussions with investors here in New York and and yesterday
• 7:19
  Speaker 1: we heard from Ray Dalio that he's on the bare side.
• 7:23
  Speaker 1: He says if the FED raises rates to four and
• 7:25
  Speaker 1: a half percent or more, which looks highly likely they'll do,
• 7:29
  Speaker 1: stocks could fall. On the other hand, UM. David Rubinstein
• 7:34
  Speaker 1: UM yesterday of Carlisle Fame, who also has a television
• 7:37
  Speaker 1: program here on Bloomberg Television, said he thinks that professional
• 7:42
  Speaker 1: investors are looking for bargains right now. This is when
• 7:44
  Speaker 1: you should be buying. Um. Do you side with one
• 7:48
  Speaker 1: or the other? I think it comes down to your
• 7:50
  Speaker 1: out look on inflation. And certainly, as I look at charts,
• 7:54
  Speaker 1: graphs and mosaics of ford looking indicators of inflation, I
• 7:57
  Speaker 1: find it very hard to see any reason and why
• 8:00
  Speaker 1: inflation is permanent or here to stay, and why the
• 8:03
  Speaker 1: fudge should actually raise rates above four and a half percent.
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  Speaker 1: The only thing that people can point to is the
• 8:08
  Speaker 1: actual backward looking number itself. You're gonna hear chair Pal
• 8:12
  Speaker 1: again talk about inflation being broad and being sticky. Let
• 8:16
  Speaker 1: me take those two things apart really quickly to explain
• 8:19
  Speaker 1: why I don't think either one of them is relevant.
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  Speaker 1: So the broadside people look at the medium or the
• 8:24
  Speaker 1: trimmed mean PC, and they're all elevated. The odd thing
• 8:27
  Speaker 1: this time reflecting the economy is that the good side
• 8:31
  Speaker 1: was at twelve percent it's now coming down to seven
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  Speaker 1: point one percent on a year of your basis. The
• 8:36
  Speaker 1: services side is actually going up. And so yes, the
• 8:39
  Speaker 1: meeting is high, but this is really odd. They usually
• 8:41
  Speaker 1: move in the same direction. They're moving in the opposite
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  Speaker 1: direction because goods was favored early and now it's moving
• 8:46
  Speaker 1: to services. That's that's going to resolve itself. That's one
• 8:50
  Speaker 1: thing about because rent has been a real thorn in
• 8:54
  Speaker 1: the fed side as well as you know my kid
• 8:56
  Speaker 1: brother trying to find an apartment in New York. Sure,
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  Speaker 1: I mean sticky reflects housing and and housing unfortunately comes
• 9:01
  Speaker 1: in with lag. Tell me who on Wall Street doesn't
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  Speaker 1: know that that owner's equivalent rent of that shelter has
• 9:06
  Speaker 1: a twelve to sixteen month leg And where do you
• 9:07
  Speaker 1: think home prices are going next? Take a look at
• 9:10
  Speaker 1: housing demanded look at the mortgage demand this week. It
• 9:12
  Speaker 1: was done year over year. The housing market has gone
• 9:15
  Speaker 1: from boom to bust. And so as I look forward,
• 9:18
  Speaker 1: I think inflation is still set to slow. The CPI
• 9:21
  Speaker 1: data is backward looking, and I have trouble finding anything
• 9:24
  Speaker 1: other than the labor market right now, which tells me
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  Speaker 1: that inflation is going to be permanent. So given that backdrop, Brent,
• 9:31
  Speaker 1: have have we seen the lows in these equity markets?
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  Speaker 1: Do you think we'll retest that low back? And I
• 9:36
  Speaker 1: guess late June, I'm not for sure that we won't
• 9:40
  Speaker 1: retest it. I mean you just mentioned to smart people
• 9:42
  Speaker 1: having different outlooks, and that usually has AT's a war
• 9:44
  Speaker 1: until we resolve it. On one side, I do think
• 9:47
  Speaker 1: the bottom is in. I think if you look back
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  Speaker 1: to the sixties eighty two time period when inflation was
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  Speaker 1: the economic problem like it is today. So I don't
• 9:54
  Speaker 1: ignore the recent time trades, but I look back to
• 9:56
  Speaker 1: that one when cp I peaked, the market bottomed. That's
• 10:00
  Speaker 1: what happened in every one of those sixty six, seventy,
• 10:03
  Speaker 1: seventy four eight and then Volker did Voker did um.
• 10:06
  Speaker 1: I don't think that's going to happen this time. But
• 10:08
  Speaker 1: those times where when CPI peaked the market bottom, that's
• 10:11
  Speaker 1: point number one. Two. Sentiment is already awful. People have
• 10:14
  Speaker 1: sold already. The AI sentiment has been below twenty nine
• 10:17
  Speaker 1: times this year. It only been below thirty eight. Are
• 10:20
  Speaker 1: only been below that thirty times in the prior thirty
• 10:23
  Speaker 1: forty years. Each one of those times except one lead
• 10:25
  Speaker 1: to four looking positive returns, throwing a positive throwing the
• 10:29
  Speaker 1: fifty percent retracement of blows that we had, which has
• 10:31
  Speaker 1: a nearly perfect record going back to and I think
• 10:35
  Speaker 1: you have the basis for the market having put in
• 10:36
  Speaker 1: the bottom. That doesn't mean it won't be a grinding
• 10:38
  Speaker 1: back and forth advance, but I don't think we're going
• 10:40
  Speaker 1: to go below those tune sixteenth lows. Alright. So with
• 10:43
  Speaker 1: that outlook, Brent, if you have UM cash to put
• 10:47
  Speaker 1: to work here, what do you do with it? Where
• 10:49
  Speaker 1: do you put it? Do you like equities? UM? Have
• 10:53
  Speaker 1: bonds taken a big enough beating, our yields high enough?
• 10:56
  Speaker 1: Do you like commodities that they're still room to run
• 10:59
  Speaker 1: there or they rolling over? I mean, what do you
• 11:01
  Speaker 1: do with money? Sure? And so this is where We've
• 11:04
  Speaker 1: been expressing our belief for the past here two years
• 11:07
  Speaker 1: that you need to invest in things that are cheap UM.
• 11:09
  Speaker 1: You need to invest in value, not the technology favorites
• 11:12
  Speaker 1: of the past and the growth favorites of the past,
• 11:14
  Speaker 1: the hope streams and themes hope them dreams, teams and
• 11:16
  Speaker 1: mean stocks I talked about before. You need to invest
• 11:19
  Speaker 1: across the board, I stage should say, but we do
• 11:21
  Speaker 1: like on a marginal basis value type stocks and the
• 11:23
  Speaker 1: SMP five hundred, We like the SMP six hundred, which
• 11:26
  Speaker 1: is UH the small cap area of the market, higher
• 11:30
  Speaker 1: quality small cap UM. And I do think bonds right
• 11:32
  Speaker 1: now are going to once again hedge stocks. They certainly
• 11:35
  Speaker 1: haven't this year, but I think at current yields right
• 11:38
  Speaker 1: now really yields UM they do provide a hedge and
• 11:40
  Speaker 1: so I would I would make sure that people UM
• 11:43
  Speaker 1: don't be don't start selling your bonds right now like
• 11:45
  Speaker 1: I think many people want to do. UH. And so
• 11:47
  Speaker 1: that's kind of where we're position. We still do own commodities,
• 11:49
  Speaker 1: albeit we are underweight our normal benchmark. And by the way,
• 11:52
  Speaker 1: that's a that's a position that we have owned historically.
• 11:55
  Speaker 1: We weren't the people who believe that inflation was dead.
• 11:57
  Speaker 1: Now it's here. And I'm kind of on the other
• 11:59
  Speaker 1: side of that argument right now. I think that the
• 12:00
  Speaker 1: inflation that we're having right now will come back because
• 12:03
  Speaker 1: it is mostly related to what happened post COVID. All right, Brent,
• 12:06
  Speaker 1: you said you're in Milwaukee. Milwaukee is one of my
• 12:08
  Speaker 1: favorite towns. Vernon it is. Um, it's a great town.
• 12:13
  Speaker 1: Talk to how is the market there? How is Milwaukee?
• 12:15
  Speaker 1: Because I think, you know, how's the economy how are
• 12:17
  Speaker 1: people kind of feeling about things in general? Just kind
• 12:21
  Speaker 1: of what's going on in mama real estate? What's the
• 12:23
  Speaker 1: real estate? Looks like we're all feeling pretty good right
• 12:26
  Speaker 1: now because the weather is still nice. Come visit me
• 12:27
  Speaker 1: in a month or two much and people will be
• 12:29
  Speaker 1: a little tour um. In general, I think the Milwaukee
• 12:32
  Speaker 1: economy is doing just fine. I mean, you know, certainly,
• 12:34
  Speaker 1: I think as you look around the country, people are
• 12:36
  Speaker 1: doing good. I mean, the unemployment rate is low. The
• 12:39
  Speaker 1: one big thing that sticks out that is the thing
• 12:41
  Speaker 1: that we have to fix. And if you fix that thing,
• 12:43
  Speaker 1: you fix the market is inflation. And that's where I
• 12:45
  Speaker 1: think there's good news because I do believe the Ford
• 12:48
  Speaker 1: indicators point to lower inflation. Yeah, you know, um, somebody
• 12:51
  Speaker 1: who was telling me yesterday she didn't think we're gonna
• 12:55
  Speaker 1: come down to four or five percent by May June
• 12:58
  Speaker 1: of next year, and I reminded her of the cops.
• 13:00
  Speaker 1: I mean, surely for that reason. It would be insane
• 13:05
  Speaker 1: if we were still over five percent after a nine
• 13:08
  Speaker 1: point one percent in June of this year. Yeah. I mean,
• 13:11
  Speaker 1: you look at it, supply and demand. I mean, the
• 13:13
  Speaker 1: said talks about that all the time. Demand has moderated.
• 13:15
  Speaker 1: Um PC is running a PC, Consumptions running two point
• 13:18
  Speaker 1: two percent year every year. UM it was running six
• 13:21
  Speaker 1: and a half percent before the Fed started hiking. The
• 13:23
  Speaker 1: housing market has slowed, inventories have rebuilt, and so I
• 13:27
  Speaker 1: do think it will begin to push back. I think
• 13:29
  Speaker 1: the big risk is that the Federal Reserve doesn't feel
• 13:31
  Speaker 1: they can have a forward outlook because they see, I
• 13:34
  Speaker 1: assume some of those things that many of us in
• 13:36
  Speaker 1: the market see. The question that I have is are
• 13:39
  Speaker 1: they so hot haunted by what happened in eighty that
• 13:42
  Speaker 1: they feel the need to keep ongoing Because inflation right
• 13:45
  Speaker 1: now is still high and there are lots of screaming
• 13:47
  Speaker 1: about it. Are they able to actually pause, because I
• 13:49
  Speaker 1: think they've accomplished in six months a lot already. I
• 13:53
  Speaker 1: just think it hasn't completely shot up in the numbers.
• 13:55
  Speaker 1: All right, Brent, great stuff as always, appreciate getting some
• 13:57
  Speaker 1: of your valuable time. Brent Shooty, Chief investments Strategist, Northwestern
• 14:01
  Speaker 1: Mutual located in beautiful Milwaukee, Wisconsin. We're talking beer. I
• 14:06
  Speaker 1: think they do that there. They do brought worst, they
• 14:08
  Speaker 1: do cheese. Uh. They get a lot of good money
• 14:10
  Speaker 1: management institutional investor money in Milwaukee. Believe it or not.
• 14:14
  Speaker 1: It punches way above its weight. Francis O joined us
• 14:21
  Speaker 1: Craft Technologies. I think they do artificial intelligence for investing.
• 14:25
  Speaker 1: I don't know. When I started on the block trading
• 14:27
  Speaker 1: Nescar Payne eight six. Every morning, my boss, Johnny coglan
• 14:31
  Speaker 1: would just run by and screaming my ear by them low,
• 14:34
  Speaker 1: sell them high. That's all I had to do. But
• 14:37
  Speaker 1: now you can use artificial intelligence. Francis, thanks so much
• 14:40
  Speaker 1: for joining us here. Tell us what you guys are
• 14:42
  Speaker 1: doing a Craft Technologies, Thank you, thank you for inviting me. Um. Yeah,
• 14:47
  Speaker 1: the Fiow and sale high we tried to do something
• 14:50
  Speaker 1: so like that as well. So the Craft clons. We
• 14:53
  Speaker 1: very the artficture Intelligent investment tech company providing the services
• 14:57
  Speaker 1: to us A management companies from the S location Signal
• 15:02
  Speaker 1: MONGST the signal security selections. We provide a cater solution
• 15:06
  Speaker 1: to our plan. Also the sponsor of the an units
• 15:09
  Speaker 1: et F as well. So first of all, I want
• 15:12
  Speaker 1: to point out that Craft is not like the macaroni
• 15:15
  Speaker 1: and cheese that's spelled q R A F T craft technology.
• 15:20
  Speaker 1: And um, you said you have an AI E t F.
• 15:25
  Speaker 1: So how does that work? It's an active e t
• 15:27
  Speaker 1: F and you use your algorithm to trade it. Yes, exactly,
• 15:32
  Speaker 1: we are using the artificial intelligence, specifically the deeplonging model
• 15:36
  Speaker 1: to trying to predict relative strengths of the stocks among
• 15:41
  Speaker 1: the universe. So you apply the uh DAT technology into
• 15:44
  Speaker 1: the activity manager of the ETF of the world. So
• 15:47
  Speaker 1: we're calling me the listing four et FC and n
• 15:50
  Speaker 1: I S right now. But so hang on, you trade
• 15:53
  Speaker 1: E t F with your algorithm or you offer an
• 15:55
  Speaker 1: e t F that's actively traded. Yes, later one we
• 16:00
  Speaker 1: offer on EPO. So what's the ticker. The ticker we
• 16:04
  Speaker 1: have the mb q UM, the quality A moment h
• 16:08
  Speaker 1: d IV, the one of most performing beast performing ETF
• 16:12
  Speaker 1: this series MVQ. Nice alright, I go on e t F,
• 16:16
  Speaker 1: go on my Bloomberg and um, it's pretty cool. You
• 16:18
  Speaker 1: can put in craft there and then you can define
• 16:21
  Speaker 1: exactly the family of francis. How does how does your
• 16:25
  Speaker 1: technology the use of artificial intelligence? How does that or
• 16:29
  Speaker 1: how has it been doing this year when we've had
• 16:31
  Speaker 1: a tremendous underperformance of both equities and fixed income, lots
• 16:36
  Speaker 1: of volatility, the fixed pushing higher? How has your process
• 16:40
  Speaker 1: worked well? So you're utilizing a the diploming model, which
• 16:47
  Speaker 1: is training the am L don't to liplicate the well
• 16:50
  Speaker 1: framed human perform management there. This is a making process
• 16:54
  Speaker 1: but without human emotional bience risk. So processing from the
• 16:57
  Speaker 1: mental data, price data, and macmak data to be our
• 17:01
  Speaker 1: model is trying to the maker scores and the foecust
• 17:05
  Speaker 1: relative performance at the stack amongst the universe. But the
• 17:09
  Speaker 1: EATP that I mentioned m v Q, the next value
• 17:11
  Speaker 1: et which is applying the ai WA m AIM methodology
• 17:17
  Speaker 1: into the value invest in the world, UMDAB each are
• 17:20
  Speaker 1: actually performing value well this year uh year today. As
• 17:24
  Speaker 1: of today NVQUE is only full person below the full
• 17:28
  Speaker 1: person losses, which is almost eleven percent point of performance
• 17:33
  Speaker 1: even against the widely used nscr U s A and
• 17:36
  Speaker 1: as value index UM show and even for the last
• 17:40
  Speaker 1: long year period NVC is even more possibly tend close
• 17:43
  Speaker 1: to percent. All right, I want to point out that
• 17:45
  Speaker 1: is n v Q as in Victor, Nancy Veronica. Okay, Um,
• 17:52
  Speaker 1: what's Q in the craft craft? Yes, exactly, n v Q. No.
• 17:56
  Speaker 1: I I was thinking in the military alphabet. If I
• 17:58
  Speaker 1: had Greg Jarrett here, he would do me right away.
• 18:01
  Speaker 1: Q looks like Quebec. So it's actually in the military
• 18:04
  Speaker 1: alphabet November Victor Quebec. Really que is a taker? Okay,
• 18:09
  Speaker 1: very good? All right, So francis, what's kind of what
• 18:13
  Speaker 1: do you guys as you look at the market here?
• 18:14
  Speaker 1: What what's what are you thinking about here as you
• 18:17
  Speaker 1: talk to your clients? Right? The carom back environment is
• 18:22
  Speaker 1: definitely not so multi papab between investors at all, Like
• 18:25
  Speaker 1: you're there are a lot of risk um that we
• 18:28
  Speaker 1: haven't seen this year, from being the heightened inflated inflation
• 18:34
  Speaker 1: environments and then the fact the hike is also not
• 18:37
  Speaker 1: favorable poetical risk and also be pretty much like the
• 18:41
  Speaker 1: perfect storm is hitting the financial market right now. And
• 18:46
  Speaker 1: if someone who still wants to have a position into
• 18:49
  Speaker 1: active market a letter I think about the lever wants
• 18:52
  Speaker 1: to say, let's think about the value investments. UM could
• 18:56
  Speaker 1: be the way to play for the next six to
• 18:59
  Speaker 1: twelve months on until there was a clear trajectory of
• 19:03
  Speaker 1: decidities are deciding to any sign on deluring there interested
• 19:09
  Speaker 1: UMU the legend back to the normal area shop for
• 19:15
  Speaker 1: now the gross act mark had it won't be so
• 19:18
  Speaker 1: much the value. The values that delated relate to play
• 19:23
  Speaker 1: relatively safer than the other mechandescent classes. All right, francis
• 19:27
  Speaker 1: good stuff. We appreciate it. Francis Oh, CEO of Craft Technologies,
• 19:32
  Speaker 1: UH talking to us about the e t F. He
• 19:34
  Speaker 1: uses artificial intelligence there in the investment process. Where is
• 19:42
  Speaker 1: Kevin Tyn I am so pumped for him. He's at
• 19:46
  Speaker 1: the Detroit Auto Show. UM. For a number of reasons.
• 19:49
  Speaker 1: This is spend a lot of time in Detroit. I
• 19:52
  Speaker 1: used to spend a ton of time in Detroit, and
• 19:54
  Speaker 1: the Auto show was typically in January, like the worst
• 19:57
  Speaker 1: time in the year to visit Detroit, but everybody went
• 20:00
  Speaker 1: because the super Bowl of UM, the automotive industry. Now
• 20:05
  Speaker 1: they have it in a more reasonable season, but I
• 20:09
  Speaker 1: don't think as many people are there. Well, the ce
• 20:11
  Speaker 1: S Show, I think is an auto show with a
• 20:13
  Speaker 1: couple of computers around it. Yeah, that's what the Toyot
• 20:16
  Speaker 1: president was saying yesterday as well. Kevin tell us first
• 20:18
  Speaker 1: of all about what the auto show is like. I mean,
• 20:21
  Speaker 1: it just wasn't the hype um this year that there
• 20:25
  Speaker 1: used to be, you know, pre pandemic back in the
• 20:27
  Speaker 1: day when Detroit was all about it. Yeah, it is
• 20:31
  Speaker 1: very very different. Um, I would say for the most part,
• 20:35
  Speaker 1: full displays are only General Motors, Ford and Statlantis. There's
• 20:40
  Speaker 1: a small Toyota booths and even smaller Subaru booth, and
• 20:46
  Speaker 1: that is it's what is it. Yeah, So there's a
• 20:49
  Speaker 1: couple of you know, there's a couple of like drone
• 20:53
  Speaker 1: and see plane companies showing stuff and electric truck plot
• 21:00
  Speaker 1: forms that so they they went out of the way
• 21:02
  Speaker 1: to fill the space with non automotive stuff. And then
• 21:05
  Speaker 1: there's this thing called automobility which is charging companies and
• 21:11
  Speaker 1: light ar and so it's and even the media center,
• 21:15
  Speaker 1: you know, we would come in here and media center
• 21:17
  Speaker 1: would take up this entire ballroom and Bloomberg and our
• 21:22
  Speaker 1: our team from Southfield here would just have a whole
• 21:24
  Speaker 1: table editors, reporters running from scrum to scrum and uh,
• 21:29
  Speaker 1: it's it's it's like a closet now. And there was
• 21:33
  Speaker 1: five people in the entire media it used to be.
• 21:36
  Speaker 1: It used to cover bill multiple halls and multiple floors.
• 21:40
  Speaker 1: And well, I think it reflects I mean, you guys
• 21:44
  Speaker 1: know Kevin and Matt. I mean it reflects auto companies
• 21:47
  Speaker 1: are technology companies today. I mean, and I guess that
• 21:50
  Speaker 1: makes more sense to be in Vegas, you know, in
• 21:54
  Speaker 1: for the ce S show, because man, that's what the
• 21:56
  Speaker 1: cars today are. I mean, we saw all these micro
• 22:00
  Speaker 1: talk to us about just the general buzz there as
• 22:03
  Speaker 1: it relates to the transition to electric vehicles. Um, you know,
• 22:09
  Speaker 1: where are we? You know? The interesting thing is, and
• 22:11
  Speaker 1: I can't remember who wrote the story that I read yesterday.
• 22:14
  Speaker 1: It was either Elizabeth Berman or Monica Raymond or Chris Ralvald,
• 22:19
  Speaker 1: But one of our German reporters talking about Herbert Diese
• 22:22
  Speaker 1: at his going away speech, you see this Kevin Um, Yeah,
• 22:26
  Speaker 1: this former CEO of Folkswagen when he was leaving. Um
• 22:29
  Speaker 1: he basically pointed out the fact that the transition to
• 22:32
  Speaker 1: electric is easy. The transition to software is hard. That's
• 22:38
  Speaker 1: where everyone's getting it wrong. Right. Anyone can put a
• 22:40
  Speaker 1: battery in a car, Okay, Tesla seems to have been
• 22:42
  Speaker 1: doing it better than anyone else. But putting all these
• 22:45
  Speaker 1: software systems and getting them to work together and getting
• 22:48
  Speaker 1: them to work as well as your iPhone or whatever
• 22:50
  Speaker 1: you use, it's not easy, and a lot of them
• 22:52
  Speaker 1: are failing or at least having real troubles, right, Kevin, Yeah,
• 22:55
  Speaker 1: And and it's the same thing with autonomous. Right. We've
• 22:58
  Speaker 1: heard so much about self driving, and you know how
• 23:00
  Speaker 1: right around the corner it is. And really we've we've
• 23:04
  Speaker 1: got the hardware figured out, right, and if that's of
• 23:07
  Speaker 1: the battle, that the last ten percent is as difficult
• 23:10
  Speaker 1: as it was to get to that point. And I
• 23:12
  Speaker 1: think you're seeing that in electrification and you're also seeing
• 23:15
  Speaker 1: it in autonomous. But but Paul, to your point about
• 23:18
  Speaker 1: the show being technology, you know, the other thing too,
• 23:21
  Speaker 1: is that you're you're you're having an auto show to
• 23:24
  Speaker 1: drum up demand and get the public to see your
• 23:27
  Speaker 1: new product, of which you have none in inventory. So
• 23:32
  Speaker 1: so to you in four years, right, I mean so
• 23:37
  Speaker 1: that's kind of I think the feeling puts, you know,
• 23:40
  Speaker 1: looking at the main auto shows right Detroit in January
• 23:44
  Speaker 1: used to be in January, you have New York right
• 23:46
  Speaker 1: around um Easter, and then you would have California right
• 23:49
  Speaker 1: around Thanksgiving, and it would always be kind of divided.
• 23:53
  Speaker 1: Where Detroit obviously is four GM and the De Lantis
• 23:56
  Speaker 1: domestic brands backyard, you would have the European makes really
• 24:01
  Speaker 1: kind of focus on New York because it was considered
• 24:03
  Speaker 1: the premium show, and then the West Coast show would
• 24:06
  Speaker 1: be a little bit more high tech, and you'd have
• 24:08
  Speaker 1: the Asia based manufacturers UM with a bigger presence there.
• 24:12
  Speaker 1: And now it just seems like I'm not sure there's
• 24:15
  Speaker 1: any presence anywhere other than like Paul said at CEF,
• 24:19
  Speaker 1: I guess Baby Vegas. I got. I prefer Detroit, honestly,
• 24:23
  Speaker 1: no matter what time of year, I prefer Detroit to
• 24:25
  Speaker 1: Las Vegas. But I have a special treat for for
• 24:28
  Speaker 1: all of you. Um there is one really cool thing
• 24:31
  Speaker 1: that happened at this car show, and that is Ford
• 24:35
  Speaker 1: unveiling It's brand new seventh generation Mustang and icon of
• 24:40
  Speaker 1: car that I have been a huge fan of ever
• 24:42
  Speaker 1: since I got gum on the seat of my dad's
• 24:45
  Speaker 1: sixty four and a half notch back. Um, and we've
• 24:48
  Speaker 1: got Jim Owns with us on the line here from
• 24:51
  Speaker 1: Detroit as well. He is the marketing manager for the
• 24:54
  Speaker 1: Mustang project. Jim, you know, this looks at first glance,
• 24:58
  Speaker 1: it looks more like an evolution than a revolution. But
• 25:01
  Speaker 1: there's some pretty major changes both to the power train,
• 25:05
  Speaker 1: UM and the interior as well as the exterior designed
• 25:08
  Speaker 1: that I really think makes this car a much more
• 25:11
  Speaker 1: attractive UM proposition. And I already wanted the old one,
• 25:16
  Speaker 1: So tell us about it. Um, we're so excited to
• 25:19
  Speaker 1: be on and talk about this. And you know, the
• 25:21
  Speaker 1: sixty four and a half Mustang that you got the
• 25:23
  Speaker 1: gum stuck on literally was a sixty five. You know,
• 25:27
  Speaker 1: there was really no such thing as the sixty four
• 25:29
  Speaker 1: and a half, even though all the Mustang fans around
• 25:31
  Speaker 1: the world they were all titled sixty five. So don't
• 25:34
  Speaker 1: worry about getting that gum stuck on your dad. That's
• 25:37
  Speaker 1: he He would always refer to it that way. And UM,
• 25:40
  Speaker 1: even yesterday my wife was saying, that's silly. Why was
• 25:42
  Speaker 1: it sixty four and a half? I don't know why
• 25:44
  Speaker 1: it was. I don't know why that year sticks with me.
• 25:47
  Speaker 1: Maybe that's when they showed it at the World's Fair,
• 25:50
  Speaker 1: or they put it up. You know, they took apart
• 25:52
  Speaker 1: you know this, they took apart a Mustang for the debut.
• 25:55
  Speaker 1: They carried it up the Empire State Building and put
• 25:58
  Speaker 1: it back together on the view on platform. We did
• 26:02
  Speaker 1: it twice. We did it in nineteen six and at
• 26:05
  Speaker 1: the time the size of the Mustang and the elevator
• 26:07
  Speaker 1: sizes have not changed on the Empire State Building, right,
• 26:10
  Speaker 1: they have never changed because of you know, the historical
• 26:12
  Speaker 1: aspect of that building. So in sixty six it took
• 26:15
  Speaker 1: four different times to go up the elevator when we
• 26:19
  Speaker 1: did it with the Gen six Mustang and we put
• 26:22
  Speaker 1: it out there the bright yellow one. UM, it took
• 26:24
  Speaker 1: a few more times to put it up there, and
• 26:26
  Speaker 1: we installed it up there. So yeah, it's been on
• 26:28
  Speaker 1: top of the Empire State Building twice. UM sixty four
• 26:31
  Speaker 1: and a half piece is when Ford started changing production
• 26:35
  Speaker 1: runs in their customers wanted to delineate between the original
• 26:40
  Speaker 1: and then the second one where they delineated it, and
• 26:42
  Speaker 1: that's the sixty four and a half, sixty five and
• 26:44
  Speaker 1: it's always a fun conversation over um. You had mentioned
• 26:49
  Speaker 1: the seventh generation and how you thought of it as
• 26:52
  Speaker 1: an evolution and and it has to be a you know,
• 26:56
  Speaker 1: for the six generations previously, it still has to be
• 27:01
  Speaker 1: unmistakably Mustang, right, and that we think we hit a
• 27:04
  Speaker 1: home run on it. And in the seventh generation it
• 27:07
  Speaker 1: has to reach to that new audience to bring the
• 27:10
  Speaker 1: new seventh generation customers in, and we think we hit
• 27:13
  Speaker 1: a home run with the design and that interior which
• 27:17
  Speaker 1: is just completely filled with gaming technology that the younger
• 27:21
  Speaker 1: audiences love. And then you said you talked a little
• 27:24
  Speaker 1: bit about the power trains and an all new Eco
• 27:26
  Speaker 1: Boost that has better performance, better power, more efficient production
• 27:32
  Speaker 1: of power. And then for Mustang fans globally, right, you
• 27:37
  Speaker 1: have cars on six of the seven continents. Um, it
• 27:41
  Speaker 1: is a fourth generation Coyote that will be the highest
• 27:45
  Speaker 1: horsepower Mustang gt tyote I've ever done. I'm so happy
• 27:50
  Speaker 1: to hear that, you know, because I was worried that
• 27:52
  Speaker 1: the horse power figures were gonna go down. And I
• 27:54
  Speaker 1: know that you're not going to tell us, well, go
• 27:56
  Speaker 1: ahead and tell us, just tell us, well, so i'd
• 27:58
  Speaker 1: loved I'd love to tell you just as a secret
• 28:00
  Speaker 1: whisper in your ear, But no, the asterisks are that,
• 28:03
  Speaker 1: you know, we're still in the testing and certification pieces
• 28:05
  Speaker 1: that will come closer to the summer of twenty three
• 28:08
  Speaker 1: when we launched the twenty four model year. But as
• 28:11
  Speaker 1: a you know, as a person who has not only
• 28:13
  Speaker 1: worked for Mustangs for four generations of them, also worked
• 28:17
  Speaker 1: for Carol Shelby for four years, you know, horsepower means
• 28:20
  Speaker 1: something and this is this is going to be one
• 28:25
  Speaker 1: that pulls you from the seat of your pants. And
• 28:27
  Speaker 1: we can't tell you how excited we are. All right, Jim,
• 28:29
  Speaker 1: Let's say I order a new Ford, when am I
• 28:33
  Speaker 1: going to get it? It looks like we're not going
• 28:34
  Speaker 1: to have a railroad strike, so that's good news. But
• 28:37
  Speaker 1: talk to us just about the supply chain getting stuff
• 28:40
  Speaker 1: from the auto industry these days. Yeah, and it's been, um,
• 28:43
  Speaker 1: it has been, you know, just like every other industry.
• 28:46
  Speaker 1: It's been you know, a struggle to identify you know,
• 28:50
  Speaker 1: when you can have your plant open and what parts
• 28:52
  Speaker 1: are coming in. And with Mustang, you ask about the Mustang.
• 28:56
  Speaker 1: This will be a twenty four model year, right, so
• 28:58
  Speaker 1: it'll be the fifty nine year model year for this
• 29:01
  Speaker 1: Mustang and that will be available in June of her
• 29:05
  Speaker 1: I'm sorry, in the summer of twenty three as a
• 29:08
  Speaker 1: twenty four model year. Right now, you can still go
• 29:10
  Speaker 1: in and order your twenty two are soon to order
• 29:13
  Speaker 1: your twenty three model your Mustang that is the existing one. UM.
• 29:17
  Speaker 1: And you know, we've been able to UM keep the
• 29:20
  Speaker 1: plants running and keep Mustang customers happy by delivering you know,
• 29:24
  Speaker 1: not only the Eco Boost, but right now the mach one,
• 29:27
  Speaker 1: the Trema. Yeah, with the Trumic seven speed dual clutch.
• 29:33
  Speaker 1: That's you know, shifts years in eighty milliseconds. Yeah, that's
• 29:36
  Speaker 1: a lot of fun. I want that. And are are
• 29:40
  Speaker 1: we going to have? Do we know about the transmission
• 29:42
  Speaker 1: options available in the new seventh gen? Yeah? So what
• 29:46
  Speaker 1: we've announced last night with the reveal of not only
• 29:49
  Speaker 1: the coup and convertible Eco Boost and GT, we introduced
• 29:53
  Speaker 1: for the first time in twenty one years, a new
• 29:56
  Speaker 1: specialty performance brand called the dark Horse. UM. For time
• 30:00
  Speaker 1: that we've had the forward facing pony on the car
• 30:04
  Speaker 1: UM and it is UM. It is extremely UM that
• 30:09
  Speaker 1: the fitting now of the dark Horse name. Now that
• 30:11
  Speaker 1: will be our specialty performance derivative that will have the
• 30:16
  Speaker 1: tremack box in the manual and the drift break and
• 30:20
  Speaker 1: the break manual transmission. It'll have a manual, it'll have well,
• 30:26
  Speaker 1: it'll have the automatic. I think the auto boxes pretty
• 30:29
  Speaker 1: amazing as well, and I'm gonna save the manuals guy.
• 30:32
  Speaker 1: So um, I was so impressed by the Shelby GT
• 30:35
  Speaker 1: five auto boxes. I think I would take that over
• 30:37
  Speaker 1: the stick. The cool thing about this new Mustang is
• 30:41
  Speaker 1: it's going to have an electric emergency break, a drift break.
• 30:49
  Speaker 1: Nobody likes a good m and a trade more than me,
• 30:51
  Speaker 1: because again, the first thing I do is I go
• 30:54
  Speaker 1: the m A page and I see who the bankers are.
• 30:57
  Speaker 1: And my good friend Frank Quattrone advised the seller, so
• 31:02
  Speaker 1: I know he got maximum price from this. So Adobe's
• 31:05
  Speaker 1: minus software company, Adobe's down? What is going on? He
• 31:12
  Speaker 1: covers all things technology for Bloomberg Intelligence. He's located. I
• 31:16
  Speaker 1: have no idea where, but we have him in the
• 31:18
  Speaker 1: Bloomberg Interactive Broker studio here in New York. Today. Adobe
• 31:23
  Speaker 1: a great company, big market cap um and this is
• 31:26
  Speaker 1: a hundred fifty billion market cup company stocks down six
• 31:30
  Speaker 1: on this. What's up? So you think about it. When
• 31:32
  Speaker 1: I looked at the deal, I said, okay, twenty billion,
• 31:35
  Speaker 1: it must have good financials. They're gonna do two million
• 31:38
  Speaker 1: and annual recording revenue it's aigma. It's a private company.
• 31:42
  Speaker 1: They're gonna do maybe four million after that. So if
• 31:45
  Speaker 1: you do a little bit of math around it, that
• 31:47
  Speaker 1: means fifty times sales or sales hundred times sales cash flow.
• 31:53
  Speaker 1: So I think that's what's happening here. The street is saying,
• 31:57
  Speaker 1: why are you overpaying so much for an asset where
• 32:00
  Speaker 1: the contribution to the top line is going to be
• 32:03
  Speaker 1: very small and the bottom line is actually going to
• 32:05
  Speaker 1: dilute your margins. It is insane to pay that much,
• 32:09
  Speaker 1: especially now when valuations have come in. What are people
• 32:13
  Speaker 1: paying for similar assets? So again it see, according to Adobe,
• 32:18
  Speaker 1: this is a technology that they're buying that that nobody
• 32:20
  Speaker 1: else has, So that's their rationale. The outside people are
• 32:24
  Speaker 1: buying less than ten time sales right now for software companies.
• 32:28
  Speaker 1: But once again their argument is this is the technology
• 32:31
  Speaker 1: that can reshape the company. Um, we published a note
• 32:34
  Speaker 1: yesterday where we basically say said that Adobe's long term
• 32:37
  Speaker 1: growth is not going to be like it has been
• 32:40
  Speaker 1: over the past decade because it's coming to a mature business.
• 32:44
  Speaker 1: So they really need to figure out what they do,
• 32:46
  Speaker 1: and if that means acquisitions, they may do the acquisition.
• 32:49
  Speaker 1: But we don't think that valuation is going to bounce
• 32:51
  Speaker 1: back ever again like it was in the you know,
• 32:53
  Speaker 1: before the pandemic or during the pandemic. All right, so
• 32:57
  Speaker 1: tell us what Adobe is in one set, and tell
• 33:00
  Speaker 1: us what Figma is in one sentence, and why Adobe
• 33:04
  Speaker 1: wanted to buy Figma and spend twenty billion large. The
• 33:08
  Speaker 1: real killer app that Adobe has is their creative cloud product,
• 33:11
  Speaker 1: Adobe Photoshop all the photo editing tools that you need.
• 33:15
  Speaker 1: Figma is a platform where people can collaborate. You are creators.
• 33:19
  Speaker 1: You can use you know, to exchange ideas. You can
• 33:22
  Speaker 1: go there. That's a whiteboard all web based stuff, and
• 33:25
  Speaker 1: those two things marry very well for the next generation creator.
• 33:30
  Speaker 1: Adobe is um. For some sometimes it's the bane of
• 33:34
  Speaker 1: my existence because I try and access files on my
• 33:39
  Speaker 1: computer that I can't unless I'm subscribed to Adobe. And
• 33:43
  Speaker 1: then once I subscribe to Adobe, I found it impossible
• 33:46
  Speaker 1: to cancel that subscriptions. They just suck me dry. Um
• 33:51
  Speaker 1: is everybody else or other consumers as annoyed. Do they
• 33:55
  Speaker 1: struggle to find another word? Do they hate Adobe as
• 33:59
  Speaker 1: much as I do? You can open those documents using
• 34:02
  Speaker 1: a web browser, So if you're just using a PDF
• 34:05
  Speaker 1: opener to do that, that's a free thing. You probably
• 34:07
  Speaker 1: downloaded a more expensive version and never deleted it from
• 34:11
  Speaker 1: your computer, but we can talk about that another time.
• 34:14
  Speaker 1: But so in a case, if you just want to
• 34:16
  Speaker 1: read a document, it's okay, that's free. But if you
• 34:19
  Speaker 1: want to you know, signature on it, you want to
• 34:21
  Speaker 1: go out and edit it and highlight it and send
• 34:23
  Speaker 1: it to your teammate, then you have to pay for
• 34:25
  Speaker 1: that particular software package. And that's the second piece of
• 34:28
  Speaker 1: their business called a document cloud, which is all of PDF.
• 34:32
  Speaker 1: But the real killer app is the the Photoshop, which
• 34:36
  Speaker 1: there is no graphic design and outdate in the world
• 34:38
  Speaker 1: that would not be using that for the world work
• 34:41
  Speaker 1: that they do. To me, that product is as powerful
• 34:44
  Speaker 1: as Microsoft ex Cell. Alright, and Paul, I guess you
• 34:49
  Speaker 1: probably spent decades with Microsoft Exel as your number one
• 34:52
  Speaker 1: back in the day, most clicked back in the day.
• 34:54
  Speaker 1: And the analyst, yeah, absolutely was before it was before Xcel. Actually, U,
• 35:00
  Speaker 1: I can't remember what we had before Excel. What do
• 35:01
  Speaker 1: we use on our I don't know WordPress, I have
• 35:03
  Speaker 1: that even before that. All right, I'm bringing up one
• 35:06
  Speaker 1: of Matt Miller's favorite functions here, c O m p uh.
• 35:10
  Speaker 1: Comparative returns Adobe over the last five years about fifteen
• 35:14
  Speaker 1: percent return the SMP about eleven. So it's done pretty well.
• 35:18
  Speaker 1: I see a lot of buy ratings out there for Adobe,
• 35:20
  Speaker 1: six or seven kind of hold ratings, no cells. So
• 35:23
  Speaker 1: the street still likes this name. What's the what's the
• 35:26
  Speaker 1: theme behind the bullish call here? So go back in
• 35:29
  Speaker 1: four or the company went into a massive undertakeoff, changing
• 35:35
  Speaker 1: their business model, went from a license model to a
• 35:38
  Speaker 1: subscription model. Unbelievable success since then, very strong growth rate
• 35:44
  Speaker 1: plus in fact, I would say, closer to margin expansion
• 35:47
  Speaker 1: like you have not seen as of today. Margins are
• 35:50
  Speaker 1: closer to adjusted operating margins for this company. So massive
• 35:55
  Speaker 1: margin expansion. And that was an entire call yesterday that Okay,
• 35:58
  Speaker 1: it's done exceeding well in the last you know, ten
• 36:01
  Speaker 1: audios or seven eight years. But now they're coming to
• 36:04
  Speaker 1: a point that growth rate goes to closer to fifteen
• 36:08
  Speaker 1: and there is no Mougin expansion. So the valuation. I
• 36:11
  Speaker 1: would say premium they got close to compared to Microsoft,
• 36:15
  Speaker 1: I think it's going to die now. And Microsoft's you know,
• 36:18
  Speaker 1: economics look a little bit better here compared to Adobe.
• 36:21
  Speaker 1: I don't know. Software. I mean it's it's a I mean,
• 36:26
  Speaker 1: you've got the easiest drap in the world. You just say,
• 36:28
  Speaker 1: I slapped by ratings on everything software. I mean, it's
• 36:31
  Speaker 1: just like growing business. How has it performed? Just probably
• 36:35
  Speaker 1: speaking forget about the hardware soft We'll talk to some
• 36:38
  Speaker 1: other you know, man deep on that one maybe. But
• 36:40
  Speaker 1: the software side, is it just a secular growth story.
• 36:44
  Speaker 1: It is a massive secular story. You you go back
• 36:46
  Speaker 1: and read and reasons you know later from ten years
• 36:49
  Speaker 1: ago and say software is going to eat the world.
• 36:51
  Speaker 1: Software at that time, Paul, when you hired me was
• 36:53
  Speaker 1: about two hundred billion in market size. It's close to
• 36:56
  Speaker 1: seven billion market now. You don't have to do much
• 36:59
  Speaker 1: just right the way. Yeah, and now and now what
• 37:02
  Speaker 1: the kids are talking about is the cloud. That's the
• 37:05
  Speaker 1: new thing. And I play the clouds three point, which
• 37:07
  Speaker 1: by I'm still have no idea what that. If you
• 37:10
  Speaker 1: have any call on web three point, it's it's a gimmick, right, Yeah,
• 37:14
  Speaker 1: that's right. Yeah, let's let's get started. Somebody's gonna send
• 37:16
  Speaker 1: me a lot of hate me a lot, Okay, So
• 37:19
  Speaker 1: best call right now in or the best growth story
• 37:21
  Speaker 1: in tech right now? I would say, given the cuttered
• 37:24
  Speaker 1: macro environment, I would put it put Microsoft on that
• 37:27
  Speaker 1: this because it's a safety stock as well as it
• 37:30
  Speaker 1: does everything right. Even in a bad, bad, bad economics environment,
• 37:34
  Speaker 1: they'll still grow tender. And it's Microsoft. The story a
• 37:37
  Speaker 1: cloud story, it is all. It's purely a cloud story.
• 37:40
  Speaker 1: So it's not a Windows story at all anymore. No,
• 37:42
  Speaker 1: but Windows does provide a lot of good cash flow,
• 37:44
  Speaker 1: except and again Office provides a very good cash flow.
• 37:47
  Speaker 1: It has two cash cows that fund anything they want
• 37:51
  Speaker 1: to fund, you know, to be honest, video games, activision
• 37:53
  Speaker 1: like and they can do anything out there. But what
• 37:56
  Speaker 1: happens is Microsoft is now the de facto thing you
• 37:59
  Speaker 1: need no matter where you are, what enterprise you are.
• 38:02
  Speaker 1: And it is a growth story for me because you
• 38:04
  Speaker 1: know what, they will double their revenue in the next
• 38:07
  Speaker 1: five years. Can you imagine that at the company with
• 38:10
  Speaker 1: three billion revenue will double the revenue in the next
• 38:12
  Speaker 1: five years. Oh yeah, yeah, I mean it's just an awesome,
• 38:15
  Speaker 1: awesome story. Anora Rana, senior software in I T Services
• 38:18
  Speaker 1: analyst Bloomberg Intelligence. Actually in the office he's supposed to
• 38:23
  Speaker 1: be in, which is the New York City world headquarters
• 38:26
  Speaker 1: of Bloomberg and Bloomberg Intelligence. A Bloomberg Intelligence analysts. What's
• 38:30
  Speaker 1: the percentage of them that are in the office. I
• 38:32
  Speaker 1: don't know. I'm gonna say maybe half, you know, I
• 38:35
  Speaker 1: don't know who knows. Thanks for listening to the Bloomberg
• 38:41
  Speaker 1: Markets podcast. You can subscribe and listen to interviews with
• 38:44
  Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller.
• 38:49
  Speaker 1: I'm on Twitter at Matt Miller three. Pet On Ball
• 38:53
  Speaker 1: Sweeney I'm on Twitter at pt Sweeney. Before the podcast,
• 38:56
  Speaker 1: you can always catch us worldwide at Bloomberg Radio.