Latest / Bloomberg Intelligence / Tesla, Enbridge, Wall Street, and ETFs (Podcast)

Transcript

Tesla, Enbridge, Wall Street, and ETFs (Podcast) · Bloomberg Intelligence

0:00
Speaker 1: Let's go to Welcome to the Bloomberg Markets podcast sweet
0:03
Speaker 1: alongside every business day we bring you interview CEO, market
0:09
Speaker 1: crows and Bloomberg experts, along with the Springwhelming the Bloomberg
0:14
Speaker 1: MarketCast podcast or wherever you listen to podcast and at
0:18
Speaker 1: Bloomberg dot com Splash podcast. Very positive and very right
0:22
Speaker 1: on this story since day one. He's viewed it as
0:25
Speaker 1: a tech story, not a metal bending story per se,
0:27
Speaker 1: and he's been absolutely right. Dan, what was your takeaway
0:30
Speaker 1: from your time down in Austin. Look, I think Paul,
0:35
Speaker 1: with these as well as Apple events, I think investors
0:38
Speaker 1: always want more meat on the boat. You know, obviously
0:41
Speaker 1: they lead the groundwork for what I've used a flex
0:44
Speaker 1: to muscles type of event from a scale and scoope
0:48
Speaker 1: in terms of what they're doing on evs. But you
0:51
Speaker 1: didn't have a sub thirty k vehicle introduced. I think
0:54
Speaker 1: that's still to come, but I think they read the
0:56
Speaker 1: groundwork for it. Stock was so off knee jerk and
0:59
Speaker 1: now becomes a sort of what's the next step on
1:03
Speaker 1: this roadmap? I mean, Dan, you know that I feel
1:08
Speaker 1: like their design and vehicles are just too long in
1:12
Speaker 1: the tooth. I mean they Matt Winkler has had his
1:15
Speaker 1: models for more than a decade, wow, which says a
1:18
Speaker 1: lot about the quality of the vehicles, and I'm not
1:22
Speaker 1: debating that, but it's just tired and they all look
1:26
Speaker 1: alike except for the cyber truck, which is I guess what,
1:30
Speaker 1: three years late now. So at what point does Elon
1:35
Speaker 1: Musk stop fooling around with Twitter and start like working
1:39
Speaker 1: on progress at his car company. Look, I think you
1:45
Speaker 1: hit the nail on the head relative to competition increasing,
1:49
Speaker 1: and you won't how sort of come out with more models.
1:52
Speaker 1: I think they've the first time admitted they're going to
1:55
Speaker 1: need basically ten models for the long term, and now
1:59
Speaker 1: it's about when do they come out? What do they
2:01
Speaker 1: look like? Look, I personally believe, based on our work,
2:05
Speaker 1: sub thirty k is going to be the key from
2:07
Speaker 1: a cheaper vehicle as well as an suv like Tessler.
2:11
Speaker 1: I think that's really from a mass market, which streets
2:15
Speaker 1: open to focus on and clearly, look cybertruck. A year
2:18
Speaker 1: from now you'll see cybertrucks around and that I mean
2:21
Speaker 1: there was Deliveries should be by your early next year,
2:25
Speaker 1: but that's not going to move the needle from a
2:27
Speaker 1: mass perspective, and that's why this is so important. From
2:30
Speaker 1: sub thirty K, Well, they just need to look since
2:33
Speaker 1: the model S was introduced, the nine to eleven has
2:36
Speaker 1: had four model changes, okay, and today's models doesn't look
2:42
Speaker 1: any different than it did ten years ago. It still
2:45
Speaker 1: looks great. I think, if you I'm going to carve
2:47
Speaker 1: myself never that into it. But I just feel like
2:50
Speaker 1: they need to. You know, if Mercedes or if BMW
2:54
Speaker 1: hadn't changed their design language in over a decade, it
2:58
Speaker 1: would be a real problem. Why is it okay for
3:00
Speaker 1: this company? I think it's because when you think an
3:03
Speaker 1: electric vehicles right now, it's still Tesla's world. Everyone else
3:07
Speaker 1: paid in terms of the EV space. They know there's
3:10
Speaker 1: an opportunity let's call it three million vehicles in terms
3:15
Speaker 1: of how they get they just hit there four millions
3:19
Speaker 1: in terms of deliveries. So they've really obviously crushed in
3:22
Speaker 1: terms of this initial sort of you know, growth area.
3:26
Speaker 1: But now it's the next phase of the growth story,
3:28
Speaker 1: and I think it's all about costs. It's all about efficiencies.
3:32
Speaker 1: They can lower by forty fifty percent in terms of
3:35
Speaker 1: what they're talking about. Then all of a sudden, you
3:37
Speaker 1: start to have a twenty twenty eight k Tessla out there. Hey, Dan,
3:42
Speaker 1: you know, one of the most read stories on the
3:44
Speaker 1: terminal today is about Elon mush not surprisingly, but it's
3:46
Speaker 1: about his use of his private plane and he's flown
3:49
Speaker 1: the most among some of the richest billionaires AND's and
3:52
Speaker 1: it's really spiked up after he bought Twitter. But it
3:54
Speaker 1: just goes to the point he's got so many different
3:57
Speaker 1: companies in so many different businesses and I'm wondering in
4:00
Speaker 1: Austin at the investor date to what extent was that
4:03
Speaker 1: brought up or addressed by him or by investors that Hey, Elon,
4:06
Speaker 1: can you focus on where the real money is, which
4:08
Speaker 1: is Tesla. Look, I think there's definitely questions around that
4:14
Speaker 1: and nothing on Twitter. I think that's something that started
4:17
Speaker 1: to go more into the background. But you're starting to
4:20
Speaker 1: see more, you know what I'd say, Ben Strength, you know,
4:24
Speaker 1: Tom Zoo and two Mothers are starting to come up
4:26
Speaker 1: in terms of the TESTA organization. I believe he's been
4:30
Speaker 1: able to balance it well, but no doubt you're starting
4:34
Speaker 1: to see, you know, a must ask pay more and
4:36
Speaker 1: more attention to some of these next steps with Tessa
4:40
Speaker 1: with SpaceX, and I think that continues to be a
4:44
Speaker 1: source subject for investors for you know what I've used
4:47
Speaker 1: probably with the most fouled individual in the world. What
4:51
Speaker 1: do you think about I saw a Lucid on the
4:54
Speaker 1: road yesterday. Barely see any of those. I saw Rivian
4:58
Speaker 1: parked by the scars Dale train station. They look sweet,
5:02
Speaker 1: but they're really disappointing in terms of their ability to
5:05
Speaker 1: ramp up production. Faraday whatever it's called. I still have
5:09
Speaker 1: never seen one of those Pollstar, Yeah, Pollstar, but that's
5:12
Speaker 1: Volvo right, So okay, I mean, what do you think
5:14
Speaker 1: about these electric vehicle startups that we all had such
5:17
Speaker 1: high hopes for it and everybody bet up the stock
5:19
Speaker 1: initially and now have just been in disappointment after disappointment.
5:23
Speaker 1: Are they going to come back? Are they going to survive? Look?
5:26
Speaker 1: I think it's a great comparison what we saw yesterday.
5:29
Speaker 1: I mean, Tessa flexes the muscles has the scale. You're
5:32
Speaker 1: going to see GM doing the same thing coming at
5:35
Speaker 1: the three one through Ari quoter on what's forward. But
5:38
Speaker 1: these startups, it is so difficult to scale and so expensive,
5:42
Speaker 1: and in a risingry environment that's tougher and tougher, so
5:46
Speaker 1: we're going to survive. Some are not. And I think
5:48
Speaker 1: it also just shows the dog ain't the homework excuse
5:51
Speaker 1: like we've seen Rithian others. It just doesn't work in
5:55
Speaker 1: this market where the dream quoter unquotter story stocks are
6:00
Speaker 1: no longer. I thought r J. Scaringe was gonna kill it.
6:02
Speaker 1: He took like a decade to bring out the truck,
6:05
Speaker 1: and now, I mean, fifty thousand is all they're gonna
6:09
Speaker 1: make in twenty twenty three. If I ordered one of
6:11
Speaker 1: those and I'm on a two year waiting list that
6:13
Speaker 1: just went to three years, I'm gonna be super disappointed.
6:16
Speaker 1: I mean, it has been up there from a disappointment
6:19
Speaker 1: with riving and trooms out of gate given r J
6:21
Speaker 1: and you know everything we saw from him pre IPO
6:25
Speaker 1: up there with you know, maybe Zach Wilson and some
6:28
Speaker 1: other disappointments, it's been very, very frustrating for industris. Hey, Dan,
6:32
Speaker 1: just real quick, thirty seconds your time in Austin. What's
6:35
Speaker 1: the number one question you heard from institutional investors? Well,
6:38
Speaker 1: I think today the big focus is, Okay, what does
6:44
Speaker 1: ultimately the timeline look like to get efficiencies down? And
6:48
Speaker 1: is the China growth story, continuing to ram push price cuts.
6:51
Speaker 1: Everyone's focused on price cuts in China. What the demand
6:55
Speaker 1: story looks like. We continue believe that that's robust. But again,
6:59
Speaker 1: haters continue the heat on task with that good stuff.
7:03
Speaker 1: All right, Dan Ives, thanks so much for joining us.
7:04
Speaker 1: Appreciate getting your perspective as always on Tesla and on
7:09
Speaker 1: all things technology. Again, Tesla stock off about five percent
7:12
Speaker 1: here to a little bit disappointing as you read some
7:14
Speaker 1: of the research and some of the reporting, just that
7:16
Speaker 1: there wasn't more color as Dan was suggesting on some
7:19
Speaker 1: of the newer models that just kind of more to come.
7:23
Speaker 1: So you kind of have to just kind of believe
7:25
Speaker 1: in Elon and that's been the story for a long
7:28
Speaker 1: period of time. Dan I has from web Bush. Let's
7:33
Speaker 1: get to our c suite conversation. We're talking insurance, Juan Andre,
7:37
Speaker 1: is that that thing to do? That? Right? Thank you?
7:40
Speaker 1: We want to draw a CEO of Everest. There's an end.
7:44
Speaker 1: There's not on my list my sheet. It's just because
7:49
Speaker 1: thank you. Okay. The most important thing the names I
7:52
Speaker 1: care about the New York stock chame symbol stock symbol
7:54
Speaker 1: R E go. We'll get you there. And this is
7:57
Speaker 1: a stock that's done really well. So we want to
7:59
Speaker 1: talk to one on here. He's also what a name, Yeah,
8:04
Speaker 1: got out to you all right, So this is an
8:06
Speaker 1: insurance company. Tell us about Everst, tell us about what
8:08
Speaker 1: you do, and then we'll get into some of the
8:10
Speaker 1: you know, the growth drivers. The challenge is that type
8:12
Speaker 1: of thing. Yeah, No, absolutely, Paul, pleasure to be here. Look,
8:15
Speaker 1: Everest is what we call a hybrid company. We have
8:18
Speaker 1: both reinsurance business and an insurance business. You know, we
8:22
Speaker 1: trade in the New York Stock Exchange, part of the
8:24
Speaker 1: SMP five hundred, and we have done exceedingly well over
8:28
Speaker 1: the last few years. As a matter of fact, I've
8:29
Speaker 1: been the CEO since January first of twenty twenty, and
8:33
Speaker 1: we've grown the reinsurance business about fifty five percent in
8:36
Speaker 1: that period of time. January first, twenty twenty. Time to
8:40
Speaker 1: take over a Yeah, it's a wonderful time. You must
8:43
Speaker 1: have taken off your tie and marchin, unbutton your top
8:45
Speaker 1: like I need to breathe a little bit. Yeah, Well,
8:48
Speaker 1: realistically I was only out of the office for a
8:50
Speaker 1: couple of months and then I was back all in.
8:52
Speaker 1: But it goes back to the story, right, because I
8:54
Speaker 1: think we've done a very nice job managing the company
8:57
Speaker 1: through all of these challenges. And you know, to what
8:59
Speaker 1: I was saying, it's not only the growth of fifty
9:01
Speaker 1: six in our reinsurance business over that period of time
9:03
Speaker 1: over sixty in our primary business, but the stock price
9:06
Speaker 1: has gone up about forty percent since I started in
9:09
Speaker 1: twenty twenty, so the company has done well. So yeah,
9:12
Speaker 1: I mean I usually look at a comp screen, as
9:14
Speaker 1: our listeners know, to see how you've done over a
9:18
Speaker 1: five year period. You've outperformed over that period, but I'll
9:22
Speaker 1: put in you know, your starting date still massively outperformed
9:26
Speaker 1: not only the S and P five hundred, but also
9:29
Speaker 1: the financial sector. Why do you think it is that
9:31
Speaker 1: you're doing so much better than the benchmarks? Yeah, No, Look,
9:35
Speaker 1: I think it's a few things. Number One, I think
9:37
Speaker 1: we've got a world class team. We've put together a
9:39
Speaker 1: very clear strategy, and we have been relentless about executing
9:42
Speaker 1: against that strategy. So I think those are sort of
9:44
Speaker 1: the key elements that we have. In addition to that,
9:47
Speaker 1: we've also had a good market, you know, and that's
9:49
Speaker 1: one of the things that it's important to talk about today.
9:52
Speaker 1: It's the fact that in the reinsurance market particularly, we
9:55
Speaker 1: have a one in a generation type opportunity. There's a
9:58
Speaker 1: secular supply and demand to balance that's taking place right now,
10:02
Speaker 1: and we're uniquely positioned to take advantage of that. And
10:04
Speaker 1: so all of that together, I think, is what's led
10:06
Speaker 1: to that outperformance. We're making a big deal on Bloomberg
10:09
Speaker 1: Gradi on television today about the rise in interest rates,
10:11
Speaker 1: the ten year Treasury now above four percent. How does
10:15
Speaker 1: that impact your business a rising interest rate environment? Yeah,
10:18
Speaker 1: absolutely so. By definition, because we're a reinsurance insurance company,
10:22
Speaker 1: we tend to invest in very conservative investments, mostly fixed income,
10:26
Speaker 1: so that really does translate to our portfolio yield increasing.
10:29
Speaker 1: So that's generally a good thing for us. Yeah. I
10:32
Speaker 1: mean last year the SMP was down twenty percent and change.
10:35
Speaker 1: You are up twenty percent and change. Is that Is
10:40
Speaker 1: that kind of outperformance going to stick if we have
10:42
Speaker 1: a recession? What happens to your business if we go
10:44
Speaker 1: into a serious recession? Yeah, Matt. Look, we tend to
10:46
Speaker 1: be essentially a safe port in a recession, and the
10:50
Speaker 1: reason for that is businesses can't do their job without
10:54
Speaker 1: our products, right, You can't run a company without general liability, insurance,
10:57
Speaker 1: property insurance, directors and officers liability, and particularly in the
11:01
Speaker 1: heightened risk environment that you have today, demand for our
11:04
Speaker 1: products is at an all time high. So for us,
11:06
Speaker 1: a recession is actually an opportunity for us to continue
11:09
Speaker 1: to grow. So are there sectors of the economy or
11:14
Speaker 1: let's put it this way, where do you guys focus
11:16
Speaker 1: What are some of the sectors that you guys have
11:18
Speaker 1: exposure to or want to have exposure to. Yeah, so
11:20
Speaker 1: we're very well diversified both in reinsurance and insurance, and
11:24
Speaker 1: that's really across industries, geography's product lines, et cetera. That
11:28
Speaker 1: gives us the ability to look at particular aspects of
11:31
Speaker 1: the economy and say, this is an area where we
11:33
Speaker 1: see a lot of opportunity and we want to play.
11:36
Speaker 1: For instance, property right now is a terrific area for
11:38
Speaker 1: us to play. Areas that we're watching more closely are
11:41
Speaker 1: credit credit related lines, things like mortgage surety, etcetera, etcetera.
11:46
Speaker 1: Because we don't know if there's going to be a
11:47
Speaker 1: credit cycle beyond some of this, how do you guys
11:50
Speaker 1: really compete against Again, we'd look about the stock Matt
11:54
Speaker 1: and now we always focus on stocks. If you get
11:55
Speaker 1: a snapshot of how companies are doing over a period
11:58
Speaker 1: of time, talk to us about your competition. Sure, it
12:00
Speaker 1: really does vary whether it's reinsurance or insurance. On the
12:03
Speaker 1: reinsurance side, we compete against Munich re, Swiss re hanover Re,
12:07
Speaker 1: and then some of the other Bermuda companies, some of
12:09
Speaker 1: the smaller ones. On the primary side, we're competing against
12:12
Speaker 1: chob aig Acca, Alliance, Zurich. Those are some of the competitors.
12:18
Speaker 1: How come those the res are all German speaking, Munich,
12:22
Speaker 1: re hanover Re, those are all a very small part
12:25
Speaker 1: of the middle of Europe. Why is reinsurance so concentrated there? Yeah,
12:30
Speaker 1: I think historically a lot of the large global reinsurers
12:33
Speaker 1: did come out of the continent of Europe, but their
12:35
Speaker 1: worldwide right. Their home offices may be in Munich or Zurich,
12:39
Speaker 1: but they're really worldwide players. But I think a lot
12:41
Speaker 1: of it was just their history and a lot of
12:43
Speaker 1: opportunity in the continent of Europe when they first started.
12:46
Speaker 1: So what do you do? Why are we not interviewing
12:48
Speaker 1: him in Bermuda? We should? That was are you actually headquarter?
12:52
Speaker 1: You literally live in Bermuda. Now I go back and
12:54
Speaker 1: forth to Bermuda. Our company is headquartered in Bermuda. Yes,
12:58
Speaker 1: we know a guy in Bermuda. There's and he went
13:02
Speaker 1: to Johns Hopkins as Yes, we've got your masters at
13:04
Speaker 1: Johns Hopkins right international, we could tie all in. So
13:07
Speaker 1: do you focus your business because you studied international studies.
13:11
Speaker 1: You've been recognized by Latino Leaders magazine for your contributions.
13:18
Speaker 1: You had Latin American studies also as part of your masters,
13:21
Speaker 1: do you focus on a global business or as your
13:24
Speaker 1: business really focused in the US Now? Our our business
13:27
Speaker 1: is totally global. So if I think about it from
13:29
Speaker 1: the reinsurance side, I have customers in a one hundred
13:32
Speaker 1: and fifteen countries around the world. That makes sense. We
13:34
Speaker 1: are the seventh largest reinsurer in the world, so we
13:37
Speaker 1: pray a significant role in all of that. On the
13:39
Speaker 1: primary side, we're in the middle of expanding our business
13:42
Speaker 1: from North America also into other countries. So matter of fact,
13:45
Speaker 1: we just opened up offices in Santiago, Dusseldorf, Paris, Madrid,
13:51
Speaker 1: Singapore and in this year we have additional expansion to
13:54
Speaker 1: go as well. So this leads to my question about growth.
13:59
Speaker 1: What's your plan and look like, say a five year
14:01
Speaker 1: plan for growth from here? Are you going to do
14:03
Speaker 1: it organically? Are you? We talked to pack Allaghory yesterday
14:09
Speaker 1: and he's done a lot of it by buying other companies.
14:13
Speaker 1: What does it look like Foreverest. Yeah, for us, it's
14:15
Speaker 1: really more of an organic build and we have been
14:17
Speaker 1: very successful. I mean the growth numbers that I quoted
14:20
Speaker 1: earlier in our discussion, we're all organic based. And I'll
14:23
Speaker 1: give you an example. So in the reinsurance business, January
14:27
Speaker 1: first is where the majority of your renewals take place.
14:30
Speaker 1: So we secured over fifty percent of our portfolio on
14:33
Speaker 1: January one in an environment good number. That's a very
14:36
Speaker 1: good nub because my analyst, Matthew Palazzola, that's his question,
14:40
Speaker 1: ask him how the January one renewals went. Yeah, No,
14:42
Speaker 1: it's it's it's a it's a very Over fifty percent
14:45
Speaker 1: of your portfolio being secured in this January one is
14:47
Speaker 1: a very good number because what we saw is that
14:49
Speaker 1: once in a generation opportunity that I was telling you about,
14:52
Speaker 1: pricing for property catastrophe went up fifty percent in January one.
14:56
Speaker 1: In the US, it went up forty percent internationally, so
15:00
Speaker 1: we were able to secure over fifty percent of our
15:02
Speaker 1: portfolio at much better pricing, much better terms. So that
15:06
Speaker 1: sets us up with a very good tailwind going into
15:08
Speaker 1: twenty twenty three. How much of a problem are you, know,
15:11
Speaker 1: these big superstorms and are we really seeing more and
15:14
Speaker 1: more of them or do we just talk about it
15:16
Speaker 1: a lot? I mean, since Katrina, we haven't seen that
15:19
Speaker 1: kind of devastation in the US, but we've had some
15:21
Speaker 1: big storms along Florida. We had Superstorm Sandy here that
15:25
Speaker 1: closed the New York Stock Exchange for four days. Is
15:28
Speaker 1: that a concern for you? It certainly is, and I
15:30
Speaker 1: think it ought to be a concern for everybody. I'll
15:32
Speaker 1: give you a couple of statistics. So last year in
15:35
Speaker 1: twenty twenty two, the insurance industry paid out over one
15:38
Speaker 1: hundred and forty billion in insured loss. In twenty one
15:41
Speaker 1: it was one hundred and thirty billion, and insure laws.
15:42
Speaker 1: So what we're clearly seeing is more severe storms. This
15:46
Speaker 1: is all driven by climate change, right Caesar warming up,
15:49
Speaker 1: Warmer seas lead to more severity, higher category four, category
15:54
Speaker 1: five type storms. So that creates for our industry essentially
15:58
Speaker 1: an impetus to get much better at risk selection and modeling,
16:01
Speaker 1: and frankly, that's one of the things that we've done
16:03
Speaker 1: at Everest in this period of time is reduce our
16:05
Speaker 1: exposure to natural catastrophe, which then reduces our volatility to earnings.
16:10
Speaker 1: And it goes back to the diversification point that I
16:12
Speaker 1: was making earlier. We're a well balanced company, so we
16:15
Speaker 1: don't have to rely only on property. Natural catastrophe exposures.
16:19
Speaker 1: What happens to our good friends down in Florida, can
16:20
Speaker 1: they even get insurances? And that's where you're from, right,
16:23
Speaker 1: you grew up in Miami. I am I'm a Florida boy.
16:25
Speaker 1: It happens well. Listen, if Florida has gone through a
16:27
Speaker 1: very difficult period of time, particularly over the last couple
16:30
Speaker 1: of years, but the governor in the special legislative session
16:33
Speaker 1: that they just had at the end of last year,
16:35
Speaker 1: have put in place some very good reforms that will
16:38
Speaker 1: curve some of the fraud, some of the litigation that
16:40
Speaker 1: basically was creating a capacity crunch, if you will, in
16:43
Speaker 1: the state. Now, those reforms will take some time to
16:46
Speaker 1: play out, but ultimately that votes very well for Florida
16:49
Speaker 1: for their consumers. And for the insurance and reinsurance market.
16:52
Speaker 1: I mean that's so as a state kind of for
16:55
Speaker 1: the last backstop in Florida. Look, I think in Florida
16:59
Speaker 1: have a few wasues. One, you're exposed to hurricanes because
17:02
Speaker 1: the word is, you have a lot of people moving
17:04
Speaker 1: down there, people like to live on the coast. And
17:06
Speaker 1: in addition to that, you have some of the environmental
17:08
Speaker 1: factors I just described. There's a lot of fraud and
17:11
Speaker 1: there's a lot of litigation, and that's really what the
17:13
Speaker 1: governor and the legislature have really just addressed. But again
17:17
Speaker 1: that'll take a little bit of time to show up.
17:19
Speaker 1: All right, fascinating stuff. Want Andrade CEO of Everest. It's
17:23
Speaker 1: in New York Stock Exchange traded company r E is
17:26
Speaker 1: a symbol like reinsurance based in Bermuda, Bermuda. And again,
17:31
Speaker 1: why are we here not in Bermuda? We could have
17:33
Speaker 1: done this. Why isn't there everyone based in Bermuda? Exactly?
17:39
Speaker 1: I want to talk energy. We'll do that with Greg Ebel.
17:41
Speaker 1: He's the CEO of n Bridge Energy that trades on
17:44
Speaker 1: the New York Stock is changed as symbol as e
17:46
Speaker 1: N as a Nancy Bison boy it's got a seventy
17:49
Speaker 1: eight billion dollar market. Captus stocks up about one point
17:53
Speaker 1: two percent today, kind of unchanged on the year. And
17:55
Speaker 1: this isn't a company that also had an investor day yesterday.
17:58
Speaker 1: It's not just Tesla, but a lot of hope are
18:00
Speaker 1: trying to get out in front of their shareholders. Greg,
18:02
Speaker 1: thanks so much for joining us here. I'd love to
18:05
Speaker 1: first of all, just tell us what end Bridge Energy does,
18:08
Speaker 1: how does it fit into the energy stream, and then
18:11
Speaker 1: tell us kind of what were your big big points
18:14
Speaker 1: you tried to make yesterday your investor day. Sure, I appreciate,
18:17
Speaker 1: appreciate being with your Polman. Thanks very much. Yeah. So
18:21
Speaker 1: the best way for your listeners probably to think through
18:24
Speaker 1: this and Bloomberg Radio think through this is, you know,
18:26
Speaker 1: end Bridge is really like the FedEx, if you will,
18:28
Speaker 1: from an energy infrastructure perspective, and we're really trying to
18:32
Speaker 1: be that first choice for our customers for energy delivery.
18:35
Speaker 1: So we pick up whether it's oil or it's gas,
18:37
Speaker 1: or we're on the renewable side as well, we'll store
18:40
Speaker 1: it and ultimately we deliver it to those users. So
18:43
Speaker 1: yesterday it was about going out to the our investors
18:46
Speaker 1: and telling them how we you know, we see four
18:48
Speaker 1: to six percent growth here over the medium term, continued
18:52
Speaker 1: growth in our dividend, which by the way, we've increased
18:55
Speaker 1: every year for twenty eight years. So that makes us
18:58
Speaker 1: one of those, uh, you know, dividend ristocrats out there.
19:01
Speaker 1: And that's a key component in this type of environment.
19:03
Speaker 1: And it's all backed up by about seventeen and a
19:06
Speaker 1: half billion dollars of pipeline projects that can go throughout
19:10
Speaker 1: of North America and wind projects and renewable projects in
19:14
Speaker 1: five to seven countries. You know, we move twenty five
19:17
Speaker 1: to thirty percent of all the oil and all the
19:20
Speaker 1: gas that moves to North America to day every day
19:22
Speaker 1: safely reliably. So are there places I just recall seeing
19:28
Speaker 1: a story last month where gas bills just soared in California,
19:34
Speaker 1: whereas everywhere else around the world, around the country, I
19:37
Speaker 1: should say, they were stable or even down. Are there
19:40
Speaker 1: places that it's harder to get gas and oil? Two? Yeah, absolutely,
19:45
Speaker 1: so California is a good example, you know. But we
19:48
Speaker 1: have pipelines where the mainline pipe, the main pipeline provider
19:51
Speaker 1: for gas into New England. So New England actually pays
19:55
Speaker 1: some of the highest prices for natural gas in the world,
19:59
Speaker 1: if you can believe put that in the context of
20:02
Speaker 1: what everything that's going on in Europe and stuff. And
20:04
Speaker 1: that's not because there's no supply, right the supply. I
20:07
Speaker 1: think about the Marsalage shale, they'll think Pennsylvania, Ohio. It's
20:13
Speaker 1: about infrastructure. So if you're relying on infrastructure and you
20:16
Speaker 1: can't get the supply to where the demand is, good,
20:19
Speaker 1: old economics push that. And so you've got a lot
20:21
Speaker 1: of people in New England who, through no fault of
20:24
Speaker 1: their own, are extremely disadvantaged in terms of what they've
20:28
Speaker 1: got to pay for what they've got to pay for
20:30
Speaker 1: natural guys. You know, for many years we've been able
20:32
Speaker 1: to change that. We'd like to kind of get back
20:35
Speaker 1: at doing that. It's a challenging environment as you know, pipelines.
20:39
Speaker 1: What are the biggest headwinds Because you say a lot
20:43
Speaker 1: of people through no faults of their own, but of
20:45
Speaker 1: course we can all vote, and if the big headwind
20:49
Speaker 1: is say a governor or a state legislature, it is
20:52
Speaker 1: kind of our own fault. Well you hit it right on.
20:56
Speaker 1: That is it is when I say no fault of
20:58
Speaker 1: their own right, Obviously they're not approving pipelines are doing
21:01
Speaker 1: the regulatory side of things, and they're obviously not producing
21:04
Speaker 1: the product, so they're they're takers of the product. Most
21:08
Speaker 1: of our customers are utilities. So what we really need
21:11
Speaker 1: to do is to figure out some way and this
21:13
Speaker 1: is true for renewables as as well as pipelines. We've
21:16
Speaker 1: got to figure out a way how do we get
21:18
Speaker 1: permitting change so that people can get the energy that
21:21
Speaker 1: they need. You know, something in the last twelve months
21:23
Speaker 1: we've probably all realized, and maybe we were just getting
21:26
Speaker 1: too happy about this and complacent, that there is a
21:30
Speaker 1: real energy trilemma there of energy security, affordability, and obviously sustainability.
21:37
Speaker 1: So you know, I think we've really got to think
21:39
Speaker 1: that through. I know here in the United States, Congress
21:41
Speaker 1: has looked, as you probably recall, at various permitting reforms
21:45
Speaker 1: that was supposed to be part of some elements that
21:47
Speaker 1: happened last year. It didn't. Maybe this Congress will be
21:50
Speaker 1: able to make some of those changes. And then you
21:52
Speaker 1: pointed out at the state level, if you don't get
21:54
Speaker 1: support at the state level and makes it very difficult.
21:57
Speaker 1: So great, let's just go to that point here. Um,
22:01
Speaker 1: My energy analysts kind of said, Hey, ask Greg about
22:04
Speaker 1: Michigan and line five. And you know, Governor Whitmer of
22:09
Speaker 1: Michigan actually campaign against that pipeline project when you ran
22:12
Speaker 1: for office. So just give our listeners a sense of
22:15
Speaker 1: maybe the puts and takes when when you sit down
22:18
Speaker 1: with regulators, whether it's the state level or the federal level,
22:20
Speaker 1: about getting new project approved. Yeah, and you know, often
22:23
Speaker 1: it's a it's the situation of you know, people's varying
22:27
Speaker 1: views on the pace of energy transition. And again, we're
22:31
Speaker 1: involved in all aspects of this, right from the upstream
22:34
Speaker 1: to the downstream, from liquids the gas to renewables, and
22:37
Speaker 1: I think we've got a pretty good view on what
22:39
Speaker 1: that pays. So you know that situation line five, as
22:42
Speaker 1: you mentioned it, which is really about a very small
22:45
Speaker 1: piece of pipeline or distance wise, Uh, that's uh, that'sh
22:52
Speaker 1: goes across the straits there, and frankly, uh, you know,
22:57
Speaker 1: it's desperately needed that that energy in places like Detroit
23:01
Speaker 1: and refineries in Ohio, and it's also tied up, if
23:06
Speaker 1: to make it even more complicated, even in international treaties.
23:09
Speaker 1: So you know, despite the commentary out of the governor
23:13
Speaker 1: and the Attorney General. I think this is a federal issue.
23:17
Speaker 1: It's being dealt with right at the highest levels both
23:19
Speaker 1: of the Canadian government with the Prime Minister and obviously
23:22
Speaker 1: the Biden administration. So you know, I think this is
23:25
Speaker 1: about there's there's a way to do this, and there's
23:27
Speaker 1: a way to do this in a in a very
23:30
Speaker 1: transitional manner that does not but under fair burdens on consumers.
23:37
Speaker 1: And that's what we're trying to do. And in the meantime,
23:39
Speaker 1: you know that pipeline continues to run very safely and
23:43
Speaker 1: deliver the fuel that's needed to fuel the quality of
23:46
Speaker 1: life throughout the Michigan and obviously over in Ohio, any
23:49
Speaker 1: of the Canada as well. We always say on this show,
23:53
Speaker 1: just so you know, we always call it the Great
23:56
Speaker 1: State of Ohio, Greg, that Great State of Ohio or
24:00
Speaker 1: the Ohio State, one of the two, right the Ohio
24:03
Speaker 1: State University. Pretty good season, a little disappointing against Michigan, obviously,
24:08
Speaker 1: but that at all. So, Greg, what's that? What was
24:11
Speaker 1: a big message that you wanted to really get across
24:14
Speaker 1: at your investor day yesterday in conversially, what maybe is
24:17
Speaker 1: the is the number one issue for investors in your company. Well,
24:21
Speaker 1: I'd say the number one issue for investors in our company,
24:23
Speaker 1: and I think we're addressing it, is how do you
24:26
Speaker 1: get this seventeen and a half billion dollar backlog of
24:28
Speaker 1: projects into service on time and on budget. And fortunately
24:32
Speaker 1: that's spread out over ten or twelve projects, So we
24:36
Speaker 1: feel very good about that. Hence our view with investors
24:39
Speaker 1: that look, we want to be that first choice energy
24:43
Speaker 1: investment for you, and the way for us to do
24:45
Speaker 1: that is be that first choice energy delivery. And that's
24:48
Speaker 1: what we're really talking about. And you can do that
24:51
Speaker 1: in all aspects of the business at Enverridge. Right. Do
24:53
Speaker 1: you like utilities, We have the largest gas utility by
24:56
Speaker 1: volume in North America if you like the pipeline inside
25:00
Speaker 1: of things, and on the old side, we've got those
25:02
Speaker 1: pipelines if you like gas pipelines and LG and as
25:04
Speaker 1: you know, the United States is now the largest exporter
25:07
Speaker 1: of energy. We have that in our portfolio. And we
25:10
Speaker 1: also have renewables. We've been in the renewable business for
25:13
Speaker 1: twenty five years, so we know how to do that,
25:15
Speaker 1: whether it's solar or it's win And that was the
25:17
Speaker 1: message and all that what it's going to get you
25:20
Speaker 1: is a further extension of the twenty eight years in
25:24
Speaker 1: a row of increase in the dividends. So that's the
25:26
Speaker 1: message we were actually putting out there. All right, Greg,
25:28
Speaker 1: thanks so much for taking the time to join us.
25:31
Speaker 1: And you're busy there with your investor investor days, Greg Eble,
25:34
Speaker 1: he's the CEO of n y N Bridge Energy Basing, Calgary, Alberta.
25:39
Speaker 1: So away out there, one of those seas I really
25:40
Speaker 1: want to get to at some point. It stuck a
25:45
Speaker 1: little investment banking, little Wall Street stuff. We had some
25:50
Speaker 1: investor days. We're done with earnings. We can kind of
25:52
Speaker 1: look back. We can also talk a coin base with
25:55
Speaker 1: Shinale because yesterday she talked to Brian Armstrong. Yeah, and
25:58
Speaker 1: Brian Armstrong was not on Bloomberg, which I think you
26:01
Speaker 1: know what it was? Simulcast, dude, was it? Yes? I
26:04
Speaker 1: wanted a separate Okay, I was like, why isn't he
26:06
Speaker 1: in our Rain Radio studio. Sinali bask Alison Williams, Bloomberg Intelligence.
26:11
Speaker 1: Shinnali Bloomberg News joins us here. So Snai, real quick,
26:14
Speaker 1: what's the feedback you got on your discussion with our
26:16
Speaker 1: friends from coin Bass yesterday. Two things here. One is
26:20
Speaker 1: that he talked about how a lot of the assets
26:24
Speaker 1: on coin base were associated with the CFTC. They were commodities.
26:27
Speaker 1: And of course we know that the SEC is very
26:29
Speaker 1: concerned about certain assets being defined as securities. So that
26:33
Speaker 1: is going to be very telling about how this fight
26:36
Speaker 1: really continues to play out. But Gary Genzel and the
26:39
Speaker 1: SEC have said that their staking of ethereum is a
26:45
Speaker 1: security not coin basis. They've said, krack in staking service, okay, right,
26:51
Speaker 1: and they find cracking like thirty million bucks. Yeah, and
26:52
Speaker 1: they didn't admit or deny any wrongdoing, but that was
26:56
Speaker 1: the size of the total payment here, so yeah, I mean,
26:59
Speaker 1: if you pay somebody thirty million dollars, you don't have
27:01
Speaker 1: to admit or deny any wrongdoing. Clearly something happened there.
27:04
Speaker 1: So really, Brindan Armstrong is, you know, trying to exode
27:07
Speaker 1: a lot of confidence here, trying to work with the regulators.
27:10
Speaker 1: You know, he wore a suit. So I think this
27:13
Speaker 1: kind of shows you a lot about the place coin
27:15
Speaker 1: base is trying to take in the crypto world and
27:18
Speaker 1: try to bridge traditional finance with crypto. Hey, Alison Alson
27:22
Speaker 1: Williams Bloomberg intelligence. Also on our Bloomberg Interactor Broker Studio here,
27:25
Speaker 1: you were at Goldman Sachs yesterday. What's kind of your
27:28
Speaker 1: takeaway from Goldman from the investment banks, what's kind of
27:31
Speaker 1: the narrative you're on the big investment banks. So I
27:35
Speaker 1: think it's still all about the economy. Right, So we
27:40
Speaker 1: wrapped up the fourth quarter. We've had Goldman Investor Day.
27:44
Speaker 1: I was disappointing. Goldman, I think was disappointing on sort
27:47
Speaker 1: of both fronts, you know. And I think we talked
27:52
Speaker 1: about the fact that, like to me, they're killing it
27:56
Speaker 1: in their core business, right, so trading, gaining significant share,
28:00
Speaker 1: M and A, which is a lucrative business. You have
28:04
Speaker 1: all these boutiques that you know, have popped up going
28:06
Speaker 1: after that business. There's still number one for a long time.
28:11
Speaker 1: So I think that the quarters started out pretty strong
28:15
Speaker 1: in terms of trading. Question for you, Allison, because if
28:19
Speaker 1: some people are so upset about the consumer, but the
28:21
Speaker 1: reality is with rates up, do you think that what
28:24
Speaker 1: Goldman is trying to do, David Salomon is trying to
28:26
Speaker 1: do is just say hold on, like we can finally
28:29
Speaker 1: make money and consumer, let us try to do that.
28:32
Speaker 1: Is that kind of what he's trying. Can he say
28:35
Speaker 1: one thing or the other? Well, I think you know,
28:39
Speaker 1: it's funny because I think where they what they're doing
28:42
Speaker 1: is we're going to focus on the consumer in the
28:44
Speaker 1: in the areas that makes sense, right, So the Apple
28:47
Speaker 1: card and the GM business, we're going to focus on
28:49
Speaker 1: those areas. The balance transfer business, which you know, to
28:53
Speaker 1: me never made sense for them. It's I don't know
28:56
Speaker 1: what the competitive advantages of doing a strategy that came
28:59
Speaker 1: out in the nineties. It's never really been a winner, um,
29:03
Speaker 1: and does not work well in a higher rate environment. Um.
29:07
Speaker 1: So moving away from that and keeping the more profitable
29:10
Speaker 1: businesses um. But you should have just said it like that.
29:14
Speaker 1: He should have said, you know what, this was a
29:16
Speaker 1: bad idea. We made the wrong decision. We're going to
29:19
Speaker 1: move on from that. Well, we keep a couple of
29:21
Speaker 1: pieces of this business. Yes, but we're done. The consumer
29:24
Speaker 1: business is dead. Put it it's what do you put
29:27
Speaker 1: a fork in it? Right? It's over, and that's I
29:29
Speaker 1: think people would have been happy with it. They didn't
29:31
Speaker 1: come out and say, well, I think I think what
29:33
Speaker 1: they did say is that they are looking at strategic options, right,
29:38
Speaker 1: So I think people got excited like, oh, they might
29:40
Speaker 1: sell it, and then you know, analysts are like, oh,
29:42
Speaker 1: you gonna sell this quarter, You're gonna sell this and that.
29:45
Speaker 1: That's when he was kind of like, Okay, look like
29:47
Speaker 1: we've told you what we're going to tell you. We
29:49
Speaker 1: can't say anymore. All right, Alison Williams, Shinelli Bassek, give
29:52
Speaker 1: us a little bit of a round table here on
29:53
Speaker 1: all things Wall Street. Let's talk eighteen ft. Is that
29:59
Speaker 1: okay with you? Absolutely? I love ETS. I have a
30:03
Speaker 1: whole show dedicated to ETFs on Tuesdays no on Mondays
30:06
Speaker 1: at one pm Wall Street Time. Yasmin daya builder joints
30:09
Speaker 1: us here in our Bloomberg Interactor Broker studio. She's head
30:12
Speaker 1: of ETFs and managing director at Engine Number one. Yasmin,
30:16
Speaker 1: thanks much for joining us here in our Bloomberg Interactor
30:18
Speaker 1: Broker studio. We appreciate you coming in. Just give me
30:21
Speaker 1: the thirty second call on what is it? What do
30:23
Speaker 1: you guys do at Engine number one? Yeah? Sure, thanks
30:25
Speaker 1: for having me. And to Number One's an investment firm
30:27
Speaker 1: and we're focused on identifying and investing in large scale
30:31
Speaker 1: transformational themes. We're best known by many investors for our
30:35
Speaker 1: activist campaign where we got three people on the board
30:37
Speaker 1: of directors at x on Mobile, and I think that
30:40
Speaker 1: campaign sort of shows two things of how we focus.
30:42
Speaker 1: Number One, we come at some of these questions around,
30:45
Speaker 1: for example, climate change environmental issues from the lens of
30:48
Speaker 1: an investor. What is additive to shareholder value for a
30:51
Speaker 1: company over time, not ideology or morality of climate change
30:54
Speaker 1: for example. And secondly, we're active owners. We work closely
30:58
Speaker 1: with the companies in our portfolio to think about where
31:00
Speaker 1: are the things that they can do to be more
31:02
Speaker 1: accountable to their plans or accelerate their plans. Have you
31:05
Speaker 1: ever met Vek Ramaswami. I have not personally. Now, okay,
31:09
Speaker 1: so he's this drive guy. Yeah, I think he's running
31:11
Speaker 1: a real president. But he will tell you, or he
31:18
Speaker 1: tells us, that he's not anti ESG. He just wants
31:21
Speaker 1: to maximize profits. And I had thought of engine number
31:25
Speaker 1: one as being an ESG play. But you're saying that's
31:29
Speaker 1: not the case. Absolutely not. In fact, I think this
31:31
Speaker 1: is actually one of the hard parts of the market,
31:33
Speaker 1: is this terminology around ESG. So maybe I can spend
31:37
Speaker 1: a second on that and they'll talk about us ESG
31:39
Speaker 1: investing predominantly is about trying to rate companies and rank
31:42
Speaker 1: companies and so rating them by environmental criteria or social
31:46
Speaker 1: criteria and really ultimately saying what's the best company in
31:49
Speaker 1: the portfolio based on that criteria and what's the worst.
31:52
Speaker 1: The problem with that is, number one, all of that
31:54
Speaker 1: is very subjective. What's good to me may not be
31:57
Speaker 1: good to you. And secondly, that whole process is completely
32:00
Speaker 1: delinked from performance. None of that involves how does this
32:04
Speaker 1: actually relate to a company's long term prospects and value creation.
32:08
Speaker 1: We're really looking for where there is an intersection between
32:12
Speaker 1: criteria in these spaces and shareholder value. So we're absolutely
32:16
Speaker 1: looking at this in the investment from the investment lens,
32:18
Speaker 1: and our goal is ultimately long term investment performance for investors.
32:23
Speaker 1: All Right, So, I know, Yasman, you guys focus on
32:26
Speaker 1: a lot of thematic work in your ETFs, and we
32:29
Speaker 1: were just talking about supply chain talked to us about
32:31
Speaker 1: how what are some of the themes you guys are
32:33
Speaker 1: working on with your ETF business. Yeah, I think theme
32:36
Speaker 1: based investing is very interesting and from our perspective, one
32:40
Speaker 1: of the most interesting themes right now is the relocalization
32:43
Speaker 1: of supply chains to North America. Now, to talk about
32:46
Speaker 1: where is this investment going, you actually kind of have
32:48
Speaker 1: to spend a little time on where it's been, which
32:50
Speaker 1: is that for the past forty years, companies have really
32:53
Speaker 1: been focused primarily and almost exclusively in their supply chains
32:56
Speaker 1: around financial efficiencies, so moving huge parts of their supply
33:00
Speaker 1: chains to lower cost regions, eliminating redundant season supply chains.
33:05
Speaker 1: Which the best way to see this is just look
33:07
Speaker 1: at US manufacturing over that forty year period of time.
33:10
Speaker 1: I was just talking about US lost. The US lost
33:13
Speaker 1: seven million manufacturing jobs, so enormous and magnitude, but it
33:18
Speaker 1: actually left companies very exposed to a lot of i'd
33:21
Speaker 1: say unintended consequences. Ultimately, supply chains were proven to be
33:25
Speaker 1: very fragile. So the big trend right now is bringing
33:28
Speaker 1: back parts of supply chains to help create more resilience
33:31
Speaker 1: supply chains. And we think there's a lot of investment
33:33
Speaker 1: opportunity out But does it make sense, I mean, reassoring
33:36
Speaker 1: is the you know, popular term. Does it make sense
33:40
Speaker 1: to bring them back to the US because we still
33:41
Speaker 1: have high labor costs, right, or does it make sense
33:46
Speaker 1: to move away from countries with whom we may have,
33:51
Speaker 1: you know, our differences, but bring them to places like
33:55
Speaker 1: Mexico where they have much lower I mean, this is
33:57
Speaker 1: the old story. When I was a kid college, we
34:00
Speaker 1: studied machiadoras in Mexico and that was a bad thing
34:03
Speaker 1: back then. But now bringing a company back and putting
34:05
Speaker 1: it it's production in Mexico is a good thing. Yeah,
34:07
Speaker 1: it's a really good question. So first of all, the
34:10
Speaker 1: cost differentials and labor advantages between the US and China,
34:14
Speaker 1: for example, have narrowed, and in fact it's lower costs
34:17
Speaker 1: to produce certain goods in Mexico now, So your point,
34:19
Speaker 1: So the opportunity is really broadly North America, I would say,
34:22
Speaker 1: in a big way. So that's point one. Point two.
34:26
Speaker 1: Automation and innovation is going to be an important part
34:28
Speaker 1: of this, because you're absolutely right. There was a reason
34:31
Speaker 1: why many parts, in all parts, frankly of supply chains
34:34
Speaker 1: were put abroad. It was cost. So when bringing certain
34:37
Speaker 1: parts back, you have to think about, is there a
34:39
Speaker 1: way to actually make your manufacturing processes, your manufacturing factories
34:43
Speaker 1: more efficient in the way they operate to help combat
34:46
Speaker 1: that cost differential. And that's one of the big areas
34:48
Speaker 1: we're actually investing around, are there also positive? I mean,
34:52
Speaker 1: you don't care about climate change on an a moral ground,
34:55
Speaker 1: but if what you're doing happens to be better for
34:58
Speaker 1: the climate, doesn't that please your investors? I mean, we
35:02
Speaker 1: spend our time understanding how these issue areas impact broader
35:07
Speaker 1: stakeholders because it's an important part of understanding risk for companies.
35:11
Speaker 1: And certainly the relocalization of supply chains to North America
35:15
Speaker 1: should actually lower emissions over time, just given the regulatory
35:18
Speaker 1: standards we have around environmental standards in the US. I'd
35:22
Speaker 1: also say it's going to be hugely impactful for job
35:25
Speaker 1: creation in the US, particularly in the manufacturing sector, and
35:28
Speaker 1: we spent a lot of time looking at when their
35:30
Speaker 1: local plant is built, what does that actually do in
35:33
Speaker 1: terms of, you know, the types of jobs that are
35:35
Speaker 1: brought back, the wages of those jobs, and I think
35:38
Speaker 1: importantly the multiplier effect of that, you know, the extra
35:41
Speaker 1: jobs that are created indirectly around that, And so I
35:45
Speaker 1: think that will actually be a huge, hugely important. By
35:47
Speaker 1: the way, I'm not sure how much you're focused on this,
35:50
Speaker 1: because that's I guess a longer term right, bringing these
35:54
Speaker 1: production facilities back and those jobs will be created over
35:57
Speaker 1: the next years, not months. But is it inflationary It
36:01
Speaker 1: certainly can be. Yeah, that's one of the big thesis
36:04
Speaker 1: across our whole broader. I mean, we're focused on the
36:06
Speaker 1: reindustrialization I would say about North America and implicit and
36:09
Speaker 1: that is an inflationary pressure. Yes. Another big theme I
36:12
Speaker 1: know you guys spend a lot of time on at
36:14
Speaker 1: engine Number one is energy. What are some of the
36:17
Speaker 1: plays and where you're seeing some of the flows go. Yeah. Absolutely, So,
36:21
Speaker 1: just to say up front, the energy transformation, as we
36:24
Speaker 1: call it, is one of the biggest investment opportunities that
36:27
Speaker 1: sits in front of us. By some estimates, it's going
36:29
Speaker 1: to take three to five trillion dollars of investment per
36:33
Speaker 1: year to decarbonize our economy. So we're talking about massive
36:36
Speaker 1: investment dollars flowing into the space. We have a very
36:39
Speaker 1: different point of view than most classic climate strategies. A
36:42
Speaker 1: classic climate strategy would be built in a way where
36:44
Speaker 1: it's if you don't like it, you don't own in,
36:46
Speaker 1: so you avoid the largest emitters, the largest companies and sectors.
36:50
Speaker 1: From our perspective, some of the biggest investment opportunities are
36:54
Speaker 1: places like agriculture, transportation, energy. Basically, seventy five percent of
37:00
Speaker 1: global greenhouse gas emissions come from those three segments. That's
37:03
Speaker 1: the heart of the energy transition. So where we spend
37:05
Speaker 1: our times across those value chains and just looking for
37:08
Speaker 1: opportunity in those spaces, which you know most most places
37:11
Speaker 1: would be just trying to minimize your emissions in your
37:14
Speaker 1: portfolio today by investing in sort of younger green technology solutions.
37:18
Speaker 1: What do you think about those younger green technology Are
37:21
Speaker 1: they just not ready to generate profit or oh it's
37:26
Speaker 1: an and not nor I mean, but that's that's I
37:28
Speaker 1: think the bigger thing here is just widening the aperture
37:31
Speaker 1: of where you see the opportunity. A good example of
37:33
Speaker 1: this would be transportation, just to talk about the whole
37:36
Speaker 1: system altogether. When most people think about what's the opportunity
37:40
Speaker 1: in the energy transition for transportation, those electric vehicles, and
37:44
Speaker 1: they'll own the companies that are the leaders leading automakers
37:47
Speaker 1: and electric vehicles. But there's so much more to the
37:50
Speaker 1: investment approach that you have to think about. For example,
37:53
Speaker 1: metals are an important component of batteries, which are obviously
37:56
Speaker 1: going to be a important part of being all electric.
38:00
Speaker 1: Mining equipment is needed to get those metals out of
38:02
Speaker 1: the ground. Another type of company you can invest around,
38:05
Speaker 1: and then transportation, how are you going to move all
38:07
Speaker 1: those inputs around. So we just define the opportunity a
38:10
Speaker 1: lot broadened, and I would say most investors do, who
38:13
Speaker 1: I think see it more from one sort of sector
38:16
Speaker 1: level lens. I'm learning a lot here. So where are
38:20
Speaker 1: the where do you see the flows in that? In
38:22
Speaker 1: the energy space, where do you see the flows going
38:24
Speaker 1: the most? Are people just looking to get the latest
38:27
Speaker 1: technology or can you get them to think bigger pictures
38:31
Speaker 1: and the and the metals. By the way, we just
38:32
Speaker 1: have a big BusinessWeek piece that forward, among others, is
38:37
Speaker 1: sourcing aluminum from minds that are allegedly polluting you know,
38:43
Speaker 1: whole communities in the Amazon. Oh. These are complex, complex topics,
38:48
Speaker 1: which is why I think this is one hundred percent
38:50
Speaker 1: the space for active management. It is very difficult to
38:53
Speaker 1: just kind of set it and forget it through an
38:55
Speaker 1: index based approach. I think theme based investing broadly is
38:58
Speaker 1: actually going to have a real kind of tailwind to
39:01
Speaker 1: it because if you think about right now, investors have
39:03
Speaker 1: to be hunting for differentiated sources of growth in their
39:06
Speaker 1: portfolio beyond what worked for them for the last ten
39:09
Speaker 1: fifteen years, which is just let me go to the
39:11
Speaker 1: lowest cost market cap portfolio i can. And so I
39:14
Speaker 1: think some of these themes, but particularly active managers who
39:17
Speaker 1: can play it in a really dynamic way, it's going
39:20
Speaker 1: to be very interesting for investors as they build portfolio.
39:22
Speaker 1: I think you've got one of the best seats on
39:24
Speaker 1: Wall Street, which is having a title head of ETFs anywhere.
39:28
Speaker 1: The growth in ETFs is pretty amazing believable. I mean
39:31
Speaker 1: it's just you know, so we can do a whole
39:33
Speaker 1: nother discussion and just on the ETF space and the funds. Well,
39:36
Speaker 1: what you guys are doing is unique inside that. Yeah,
39:39
Speaker 1: I mean my favorite thing about ETFs is it's both
39:41
Speaker 1: growing and evolving. I mean, it is a huge source
39:44
Speaker 1: of growth, but also if you look under the hood,
39:47
Speaker 1: the number of strategies that are coming out on the
39:49
Speaker 1: types of dynamic investments you can now access is so
39:52
Speaker 1: much wider than it was just five ten years. It's
39:54
Speaker 1: amazing good stuff and I learned a lot today. Yasmin,
39:56
Speaker 1: thank you so much for coming in. Yasmin DAYA build
39:58
Speaker 1: your head of ETF, managing director at Engine Number one.
40:01
Speaker 1: A very smart discussion ever. Thanks for listening to the
40:06
Speaker 1: Bloomberg Markets podcast. You can subscribe and listen to interviews
40:10
Speaker 1: with Apple Podcasts or whatever podcast platform you prefer. I'm
40:14
Speaker 1: Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three,
40:18
Speaker 1: and I'm Fall Sweeney. I'm on Twitter at pt Sweeney.
40:21
Speaker 1: Before the podcast, you can always catch us worldwide at
40:23
Speaker 1: Bloomberg Radio