Latest / Bloomberg Intelligence / Mother's Day Has Become More Than Just Flowers

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Mother's Day Has Become More Than Just Flowers · 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
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  Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
• 0:15
  Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast. Now ourminder to all
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  Speaker 1: of our listeners. Sunday is Mother's Day. Typically, I'm sure
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  Speaker 1: you would send flowers, but you also might send gourmet
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  Speaker 1: foods and gift baskets. In fact, Flowers dot Com Incorporated
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  Speaker 1: has made more money from the latter than the former
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  Speaker 1: in recent time. Springing Chris McCann right now. He's the
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  Speaker 1: president and CEO. UM. Chris talked to us first about
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  Speaker 1: the product mix. Um, I've got to guess you sell
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  Speaker 1: more flowers on Sunday than any other day of the year,
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  Speaker 1: but you sell a lot more than that. Sure, thanks
• 0:57
  Speaker 1: thanks for having us. It's just such a crepet week
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  Speaker 1: on a mother is all around the world. It's just
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  Speaker 1: such an important role that they play. And you're right,
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  Speaker 1: Flowers in a traditional way to say thank you, in
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  Speaker 1: a way to say happy Mother's Day. But as we've
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  Speaker 1: branched out, gourmet foods from Harry and David h charcolate
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  Speaker 1: covered berries from Shari's Berries, or our newest brand, personalization
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  Speaker 1: Mall is just doing great this holidays. People are uploading
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  Speaker 1: photos to us. We're putting it in a picture frame
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  Speaker 1: for them, personalizing the message on the frames, sending it
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  Speaker 1: to their recipients. Mother's Day has become much more than
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  Speaker 1: just flowers. And as a company whose mission is to
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  Speaker 1: help our customers express, connect and celebrate, we're just so
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  Speaker 1: well positioned for that. So, Chris, give us a sense
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  Speaker 1: of how your business was impacted by the pandemic and
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  Speaker 1: maybe how you think your business is going to uh
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  Speaker 1: kind of kind of come out of this pandemic. But
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  Speaker 1: we've been very fortunate really that, you know, to all
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  Speaker 1: the troubles that we've had, you know, in our personal
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  Speaker 1: lives and even the challenges that we faced in the business,
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  Speaker 1: we were very fortunate that we were in front of
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  Speaker 1: two major shifts that took place during the pandemic, the
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  Speaker 1: tectonic shift from offline sales to online sales, and as
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  Speaker 1: an e commerce platform that's built for growth, we're right
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  Speaker 1: in front of that trend. The other one is I
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  Speaker 1: think we've all learned through this time relationships are so important,
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  Speaker 1: the need to stay connected to needs for human beings
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  Speaker 1: to express themselves, and that's who we are as a company.
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  Speaker 1: So we had good momentum going into the pandemic, good
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  Speaker 1: growth momentum that was accelerated significantly, just as the pandemic
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  Speaker 1: accelerated change in every area of life. So the year later,
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  Speaker 1: just over a year later, we're a much bigger, better,
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  Speaker 1: stronger company than we ever were. In fact, we got
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  Speaker 1: guided for double digit growth this quarter on top of
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  Speaker 1: phenomenal same quarter last year, and based on what we see,
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  Speaker 1: we see double digit growth going forward into our next
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  Speaker 1: fiscal year as well. How do you compete in um,
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  Speaker 1: the age of the Internet. You know, you've got competitors
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  Speaker 1: who are dropping vowels from their names, and you've still
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  Speaker 1: got kind of an old school phone number in front
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  Speaker 1: of yours. Um, what do you do to take on
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  Speaker 1: the kids in Silicon Valley? Well, I think, first of all,
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  Speaker 1: misspelling a brand name is is not as not the
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  Speaker 1: smartest thing to do to makes people try and figure
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  Speaker 1: out how do you spell that? Again? And over the
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  Speaker 1: years we've built such great brand recognition, such great brand
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  Speaker 1: attributes behind the one Flowers. The younger generation doesn't even
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  Speaker 1: realize that it actually was ones a phone number. Still
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  Speaker 1: is and we still get some cold volume there, but
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  Speaker 1: the vast majority of our business comes online on the
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  Speaker 1: e commerce channels. And that's why I say, over the
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  Speaker 1: years we've gone from this one Flower shop to this
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  Speaker 1: platform for expressions, connections and celebrations with all star lineup
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  Speaker 1: of brands and Harry and David personalization, mall Sharry's Berries,
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  Speaker 1: Flowers of course, and just constantly expanding the products and
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  Speaker 1: services we offer our customers to help them have better
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  Speaker 1: relationships in their lives. But what what kind of what
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  Speaker 1: kind of tech operation have you got going there? Because
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  Speaker 1: I noticed, I mean, it's always been the case when
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  Speaker 1: I put in flowers on Google, you pop up first.
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  Speaker 1: So you've got the search a search engine optimization down. Um,
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  Speaker 1: do you have a group of kids working out of
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  Speaker 1: Syosset on the internet? How's this going on? How's this
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  Speaker 1: going down? We had a group of wonderful people actually
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  Speaker 1: all over the country and frank quite frankly all over
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  Speaker 1: the world on our technology team, and we we we
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  Speaker 1: just made a major migration this past year or two
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  Speaker 1: into a whole new platform. It's a headless commerce platform
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  Speaker 1: built on pw A technology. It resides in the clouds,
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  Speaker 1: so it gives us a significantly enhanced flexibility and scalability.
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  Speaker 1: Uh and so it's tremendous capabilities there. But then it
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  Speaker 1: really comes down to the people. And as you say
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  Speaker 1: and Seo, we have some great people as young ladies Sarah,
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  Speaker 1: that does it h job heading that unit for us.
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  Speaker 1: But all about digital marketing, we've grown up as a
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  Speaker 1: digital marketing company, so we have great expertise and that's
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  Speaker 1: one of the things that brings that we bring to
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  Speaker 1: the table for some of the acquisitions that we've done.
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  Speaker 1: And in the past two years, we've taken Sherry's Berries,
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  Speaker 1: which was a bankrupt company and it has now been
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  Speaker 1: been a rowing success since we plugged it into our platform.
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  Speaker 1: And then most recently during the pandemic this August, we
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  Speaker 1: made our largest acquisition ever, Personalization Mall, and since moving
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  Speaker 1: that into our platform, last quarter of the holiday season,
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  Speaker 1: team ball grew for us. So so wheels are turning well.
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  Speaker 1: All right, Chris, thanks so much for joining us. We
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  Speaker 1: always appreciate chatting with you. Getting uh the latest on
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  Speaker 1: the gift at giving a business and nobody does it
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  Speaker 1: better than the good folks at one Flowers dot Com.
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  Speaker 1: Christma can't see Flowers dot Com Incorporated giving us his
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  Speaker 1: thoughts as we head in to Mother's Day weekend. Now,
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  Speaker 1: stocks are down and the broader indexes um, but not
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  Speaker 1: as bad in the big indexes as they are in
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  Speaker 1: small caps. That's bringing Dave Wilson right now for a
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  Speaker 1: look at what's going on um with the smaller cap companies. Dave,
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  Speaker 1: They've got that right, Matt. Smaller companies, bigger declines. That's
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  Speaker 1: part of the story of the day. The Russell two
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  Speaker 1: thousand index now lower by one point four percent, while
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  Speaker 1: the SMP five hundred is only down two tenths of
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  Speaker 1: a percent. Now the steepest drop in the Russell belongs
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  Speaker 1: to James River Group Holdings. The ticker their j R
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  Speaker 1: v R. The insurer has lost more than thirty two
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  Speaker 1: percent after raising a hundred and seventy five million dollars
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  Speaker 1: in a share sale that amounted to a fifteen per
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  Speaker 1: and a half percent steak. Regis ticker RGS is down
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  Speaker 1: about twenty six and a half percent. The hair salon
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  Speaker 1: owner and franchise are posts the wider loss and lower
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  Speaker 1: revenue for the fiscal third quarter than Analystic spected in
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  Speaker 1: Bloomberg Survey, and US concrete ticker u SCR is down
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  Speaker 1: twenty three First quarter revenue fell more than analysts predicted,
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  Speaker 1: as a winter storm in Texas her demand now. The
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  Speaker 1: biggest gain Russell belongs to Avid Technology. The ticker a
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  Speaker 1: v i D, the maker of audio and video editing software,
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  Speaker 1: is up twenty one percent after reporting first quarter results
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  Speaker 1: that surpassed projections, and the Quidity Services ticker l q
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  Speaker 1: DT is up nineteen and a half percent. UH, the
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  Speaker 1: online marketplace for surplus goods, had fiscal second quarter results
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  Speaker 1: that beat estimates. Bloomberk Stocks editor Dave Wilson, thank you
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  Speaker 1: so much. We appreciate that small cap report. Let's take
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  Speaker 1: a look now at the high yield business. We do
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  Speaker 1: that today with Emmanuel Hayes. He's a senior portfolio manager
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  Speaker 1: at Melan. Manuel, thanks so much for joining us here.
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  Speaker 1: We've seen in the equity markets really since September, kind
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  Speaker 1: of a rotation trade away from some of the big
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  Speaker 1: high tech growth names into some more cyclical names, maybe
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  Speaker 1: even from a smaller cap kind of banking on this reopening.
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  Speaker 1: Are we seeing something similar in the high yield market
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  Speaker 1: as well? Hi, thank you for having me pleasure to
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  Speaker 1: be here. The short after is yes, we're seeing something
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  Speaker 1: very similar in the broader high old market. Where As
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  Speaker 1: the COVID impacted everybody in March and in April, we
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  Speaker 1: started seeing a lot of sectors get impacted from a
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  Speaker 1: spread perspective, as a widened indie cyclical sectors think of
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  Speaker 1: leisures and airline transportation, more consumer cyclical sectors. And then
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  Speaker 1: as things started stabilizing and there's more optimism built into
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  Speaker 1: the vaccine rollouts, we're starting to see those trades performed
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  Speaker 1: really well. And so that's been very much in line
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  Speaker 1: with what we're seeing in the equity markets. But we're
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  Speaker 1: also seeing interesting other dynamics take place in high old.
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  Speaker 1: It's very exciting time. We're seeing a lot of companies
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  Speaker 1: being downgraded from investment grade. We're also seeing a lot
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  Speaker 1: of companies getting upgraded back into the investment grade market,
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  Speaker 1: providing nice tailwind performance on both sides. Very interesting time
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  Speaker 1: in the higold market right now, and a ton of
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  Speaker 1: issuance right manual we see we saw a record issuance
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  Speaker 1: last year four or billion dollars in total, and this
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  Speaker 1: year in the first quarter we had a hundred forty
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  Speaker 1: billion dollars in issue and so does that mean one
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  Speaker 1: is going to be another record year? All expectations is
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  Speaker 1: that this issuance pace will continue. A lot of issuance
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  Speaker 1: was built into last year after companies were in survival mode. Now,
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  Speaker 1: with rates continuing to be as low as they are,
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  Speaker 1: you are seeing companies being more opportunistic, looking to refinance
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  Speaker 1: their debt, bring down their interest expense, clean up the
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  Speaker 1: balance sheet issues that maybe they were encountering last year.
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  Speaker 1: So we are seeing record level of issuance. And with
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  Speaker 1: issue wance, there is a concession that takes place. So
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  Speaker 1: when issuers kind of the market, they do provide, you know,
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  Speaker 1: several bits to a hundred bits of concession just to
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  Speaker 1: entice investors to participate, and that provides a nice performance
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  Speaker 1: pop if you are able to do it in a
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  Speaker 1: very diversive light way across a lot of these bonds
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  Speaker 1: that are issued, hey man, will give us a sense
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  Speaker 1: of credit quality out there. We're again this pandemic. We're
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  Speaker 1: month fourteen here roughly. We do obviously see some really
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  Speaker 1: good light at the end of the tunnel here and
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  Speaker 1: a lot of parts of the economy already you know
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  Speaker 1: out of that tunnel. If if you will talk to
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  Speaker 1: us about the credit quality you've seen in your portfolio
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  Speaker 1: over the over the last fourteen months. Yeah, after the
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  Speaker 1: pandemic hit, we saw this huge amount of downgrades to
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  Speaker 1: take place. So a lot of bonds that were rated
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  Speaker 1: shoup will be were downgraded over two billion across twenty
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  Speaker 1: five companies. So naturally, what was the lowest part of
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  Speaker 1: the investment grade market migrated down into the high old market.
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  Speaker 1: And with that means now the high market for intensive
• 11:09
  Speaker 1: purposes is higher quality, meaning more double BE rated securities.
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  Speaker 1: And so you saw the broad high old market naturally
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  Speaker 1: increases double BE exposure. Just around half of the overall
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  Speaker 1: explosion high old is now rated double B and that's
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  Speaker 1: good for the overall credit quality of the company's, the
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  Speaker 1: overall market landscape and high old. And what we see
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  Speaker 1: is that segment, that little cohort of double B rated
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  Speaker 1: bonds that were downgraded, it's actually a very very strong performer.
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  Speaker 1: What happens with these bonds as they get migrated, they
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  Speaker 1: get forsold by a lot of investment grade holders, index ers,
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  Speaker 1: active managers, insurance companies, and so when they enter the
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  Speaker 1: high old market, not only is the higher quality, but
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  Speaker 1: you see these bonds come in at these discounts basis
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  Speaker 1: points from our analysis, and that shouldn't be the case.
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  Speaker 1: But because there is a inefficient bifurcated corporate market, high
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  Speaker 1: old investors are excited. They come in, they get these
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  Speaker 1: cheap bonds, high quality, large camp names, and they get
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  Speaker 1: out of its steep discount and then they harvest that premium.
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  Speaker 1: It's a great time to be a hiled manager, as
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  Speaker 1: you just are here sitting on the side taking advantage
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  Speaker 1: of this opportunity. That is truly fascinating insight. Manuel, thanks
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  Speaker 1: so much for joining us. Manuel Hayes, their senior portfolio
• 12:32
  Speaker 1: manager at Melon, talking to us about the fallen angels,
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  Speaker 1: getting them at a discount on the way in and
• 12:39
  Speaker 1: then making money obviously on the way back out. Well,
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  Speaker 1: when the pandemic hit, the lockdowns went into place, and
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  Speaker 1: daily lives as we knew them were greatly disrupted, and
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  Speaker 1: that includes going to your dentist, going towards your local
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  Speaker 1: doctor for you know, annual checkups for example, that all
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  Speaker 1: all was disrupted. Now as we come out on the
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  Speaker 1: other side, what's that Are we going to go back
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  Speaker 1: to a normal behavior? Let's check in with Stanley Berman.
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  Speaker 1: He's a chairman and chief executive officer of Henry Shine.
• 13:09
  Speaker 1: Henry Shin is a worldwide distributor of medical and dental supplies,
• 13:12
  Speaker 1: including vaccines, pharmaceuticals, financial services, and equipment. It is a
• 13:16
  Speaker 1: publicly traded UH stock. Stanley, thanks so much for joining
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  Speaker 1: us here. When do you think and to what degree
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  Speaker 1: do you think we will go back to kind of
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  Speaker 1: pre pandemic levels in terms of going to our dentists,
• 13:28
  Speaker 1: hopefully every six months, going to our doctor for that
• 13:31
  Speaker 1: annual check up. What are you hearing from the doctor's
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  Speaker 1: offices that you guys interact with. Thank you, Paul Matte
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  Speaker 1: for your interview today. Very very good question. Actually, the
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  Speaker 1: data is quite uh, it's really good and it's reassuring
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  Speaker 1: the lay. About two weeks ago, the American Dental Association
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  Speaker 1: reported that to the population are returning to the dentist,
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  Speaker 1: and that's up from about sixty sixty or seventy six
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  Speaker 1: months ago. And we expect the public to be going
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  Speaker 1: back to the dentist in full swing within a few months.
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  Speaker 1: I'm excited to go back to the dentist myself. Good
• 14:11
  Speaker 1: for you. Um, your r hygiene test and your regular
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  Speaker 1: visits are really important because there's a direct correlation between
• 14:18
  Speaker 1: good oral care and good health care. Well, tell me
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  Speaker 1: about it. And I'm getting older, you know, so I
• 14:24
  Speaker 1: I want to keep these teeth. I don't need to
• 14:26
  Speaker 1: trade them in for any plastic dentures. But um, what
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  Speaker 1: what what kind of gear are you selling the most of?
• 14:33
  Speaker 1: Because I imagine you did incredibly well with PPE obviously,
• 14:37
  Speaker 1: but that's got a kind of taper off. Um, what's
• 14:41
  Speaker 1: what's what's in the what's in the future for you?
• 14:44
  Speaker 1: Rather than you know, during the pandemic? What are you?
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  Speaker 1: What are you selling in in the reopening? Right? So,
• 14:49
  Speaker 1: of course pre E has been important. Rapid point of
• 14:53
  Speaker 1: care tests are very very important physician officers, some dental officers,
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  Speaker 1: but the big area has been in digital dentistry, in
• 15:02
  Speaker 1: other words, a scan of the mouth rather than using
• 15:05
  Speaker 1: an impression material and to take an impression and using
• 15:11
  Speaker 1: that to mill a crown or bridge share side. So
• 15:15
  Speaker 1: it's one visit to the dentist to replace crown or
• 15:20
  Speaker 1: put in a new crown or a place or put
• 15:23
  Speaker 1: in a new bridge. All right, So one of the
• 15:27
  Speaker 1: issues is telehealth, virtual care. They've really come to the
• 15:31
  Speaker 1: fore here during this pandemic. How's that impacted your business?
• 15:35
  Speaker 1: Am I gonna make fewer visits to the doctor's office? Um?
• 15:40
  Speaker 1: I'm not sure you're gonna make a significantly fewer visits,
• 15:44
  Speaker 1: but I think your business will be more productive because
• 15:46
  Speaker 1: the practitioner will be ready for you when you arrive.
• 15:49
  Speaker 1: Telehealth has gone up in a significant way. We of
• 15:52
  Speaker 1: course offer telehealth systems to our customers, but I think
• 15:55
  Speaker 1: the visit will be much more productive as the practitioner
• 16:00
  Speaker 1: will be ready for you, the staff will be ready,
• 16:02
  Speaker 1: and I think this hybrid health care system will be very,
• 16:06
  Speaker 1: very effectivating increasing the quality of health in this country.
• 16:12
  Speaker 1: In terms of vaccines, Um, are people coming in? You
• 16:16
  Speaker 1: think to the dentisty get vaccine? And then uh can
• 16:19
  Speaker 1: they can they do that? Can? Can the dental hygiene
• 16:22
  Speaker 1: has give you a vaccine? Well, I think we've done
• 16:24
  Speaker 1: a terrific job in rolling out the first phase of
• 16:27
  Speaker 1: a vaccination. A lot of people have the vaccination, but
• 16:32
  Speaker 1: we have a challenge. It's relatively stalled. There's vaccine hesitancy,
• 16:37
  Speaker 1: and only our physicians in the United States are offering
• 16:41
  Speaker 1: vaccines and a small amount of dentists. This is because
• 16:45
  Speaker 1: the system is not yet geared up to providing office
• 16:48
  Speaker 1: space practitioners with vaccines. The majority of Americans, of course,
• 16:53
  Speaker 1: received their fluid traditional flu vaccine, their other vaccines. In fact,
• 16:59
  Speaker 1: almost many percent from an office space practitioner who's very
• 17:03
  Speaker 1: much trusted. And we are advocating for the greater allocation
• 17:06
  Speaker 1: of vaccine to be provided to office space dentists and physicians. So, Stanley,
• 17:13
  Speaker 1: that kind of goes to the issue here of you know,
• 17:15
  Speaker 1: hesitancy of the vaccine. Here, what do you what would
• 17:18
  Speaker 1: you like to see in terms of programs to address
• 17:23
  Speaker 1: vaccine hesanity, because it's not just for the COVID vaccine.
• 17:25
  Speaker 1: We've had you know, anti vaxxers for lack of a
• 17:27
  Speaker 1: better term, um you know, you know throughout the country
• 17:31
  Speaker 1: about different vaccines. But how do we overcome that? I
• 17:34
  Speaker 1: think the number one priority is to put the physicians
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  Speaker 1: and the dentists in the driver's seat on vaccine education.
• 17:44
  Speaker 1: Physicians and Dennis are in every community, multiple practitioners in
• 17:49
  Speaker 1: every community, and we need to engage the office space
• 17:54
  Speaker 1: trusted dentists and physician in educating the public on the
• 17:59
  Speaker 1: importance of ACT means. We need to allocate vaccines, the
• 18:02
  Speaker 1: COVID vaccines to these office space practitioners, and we need
• 18:06
  Speaker 1: to do it quickly and make it easy for them
• 18:07
  Speaker 1: to have access to these vaccines. Right now, it's not easy,
• 18:11
  Speaker 1: a lot of paperwork for the practitioners. Yet they can
• 18:14
  Speaker 1: easily obtain other kinds of vaccines. We need to make
• 18:17
  Speaker 1: the COVID vaccine easily accessible to offer space practitioners. Standing
• 18:23
  Speaker 1: away from maybe away from your business and and thinking
• 18:26
  Speaker 1: more about the health and welfare of mankind. How concerned
• 18:31
  Speaker 1: are you about what we're seeing in India and what
• 18:34
  Speaker 1: we could soon see? You know, we could see similar
• 18:38
  Speaker 1: problems spikes in Africa in South America. Um, what do
• 18:43
  Speaker 1: you think needs to be done about that? I'm very,
• 18:45
  Speaker 1: very concerned for two reasons. There's a morality issue and
• 18:49
  Speaker 1: there's also the issue of ensuring that our own safety
• 18:53
  Speaker 1: is protected. Excuse me vaccines. Sorry, the viruses do not
• 19:00
  Speaker 1: have passports. You cannot be kept out through visas. We
• 19:04
  Speaker 1: need to make sure that the entire world has access
• 19:07
  Speaker 1: to P P and E quality that we know works tests,
• 19:13
  Speaker 1: rapid tests for COVID and the vaccine, and I'm fearful
• 19:17
  Speaker 1: that the wealthier countries in the world are keeping these
• 19:21
  Speaker 1: products for ourselves. Yes, it's not moral, but from a
• 19:26
  Speaker 1: practical point of view, if we don't provide these products
• 19:29
  Speaker 1: to the whole world, this virus will not be contained.
• 19:36
  Speaker 1: All right, Stanley, thanks so much for joining us. I
• 19:38
  Speaker 1: think really important to get your take on this and
• 19:41
  Speaker 1: also obviously great to hear about the business. At Henry Shine,
• 19:46
  Speaker 1: Stanley Bergman is the chairman and chief executive officer, and
• 19:50
  Speaker 1: he has been incredibly active, written a letter um to
• 19:54
  Speaker 1: Congress about why this issue can't be overlooked in the
• 19:59
  Speaker 1: direct consequences in terms of vaccine acceptance. This is Bloomberg.
• 20:10
  Speaker 1: Let's get now to Mark Barry Bow. He joins us
• 20:13
  Speaker 1: from Jennison Associates, the fundamental equity and fixed income business
• 20:17
  Speaker 1: a P JIM and he is their head of Global Equity. Mark,
• 20:22
  Speaker 1: we've seen this big rotation and we've been talking about
• 20:25
  Speaker 1: it for months and months now, but you don't think
• 20:27
  Speaker 1: investors should make major changes to their portfolios during market rotations,
• 20:32
  Speaker 1: instead focusing on investing for the longer term. How long
• 20:36
  Speaker 1: term are you thinking, well, you know, we're typically going
• 20:40
  Speaker 1: to look out um, you know, the next three years. Uh,
• 20:44
  Speaker 1: just in terms of secular trends. And you know, obviously
• 20:49
  Speaker 1: rotations can be painful, particularly if you're a growth investor
• 20:52
  Speaker 1: in this environment. But actually there's some really good stock
• 20:55
  Speaker 1: setting up here we think, going into the second half
• 20:59
  Speaker 1: of the year and into two. So it's it's very
• 21:03
  Speaker 1: a little unusual to say that a good economy is
• 21:06
  Speaker 1: bad for tech, because um, that would be the first
• 21:10
  Speaker 1: cycle we've ever had were good economies bad for tech.
• 21:13
  Speaker 1: Good economy is good for tech. So I think it's
• 21:16
  Speaker 1: a little bit overdone. So you don't think this rotation
• 21:18
  Speaker 1: is going to stick, is basically what you're saying. No,
• 21:21
  Speaker 1: I think once you as you're working through earnings, we're
• 21:23
  Speaker 1: seeing some amazing prints at a big companies like Apple
• 21:27
  Speaker 1: or Amazon, Google, Tesla, etcetera. And um, you know Mercado
• 21:33
  Speaker 1: Libre last night out of Latin America, and uh, these
• 21:38
  Speaker 1: leading companies are building major platforms that that are going
• 21:43
  Speaker 1: to you know, thrive for years to come, we think.
• 21:46
  Speaker 1: And so I think once the cyclical kind of you know,
• 21:50
  Speaker 1: rallied you know, reaches its crescendo as it were, because
• 21:55
  Speaker 1: there is nothing secular about it. It's just a cyclical
• 21:57
  Speaker 1: bounce off the bottom. Uh, it's going to be. Investors
• 22:01
  Speaker 1: are just gonna win with companies that are that are
• 22:03
  Speaker 1: gaining market share and creating goods and services that people
• 22:07
  Speaker 1: really like. And I think, you know, you're just back
• 22:10
  Speaker 1: to basic fundamentals instead of just macro trading. So how
• 22:15
  Speaker 1: do you generate alpha in with the strategy like that
• 22:19
  Speaker 1: mark in the in the context of not really going
• 22:21
  Speaker 1: to where the puck is going? Uh? And and over
• 22:24
  Speaker 1: the last you know, kind of nine months, ten months,
• 22:26
  Speaker 1: it's been some of those cyclical trade maybe even some
• 22:28
  Speaker 1: of the small caps as well. Yeah, no, you know,
• 22:33
  Speaker 1: we've of course over the last year. Uh. As long
• 22:37
  Speaker 1: as you're in the right names, you can consistently generate alpha.
• 22:41
  Speaker 1: Of course, if if the whole cluster sells off as
• 22:45
  Speaker 1: it did in March, you know, obviously in one month,
• 22:48
  Speaker 1: it's tough. So what we try to do is not
• 22:51
  Speaker 1: let all the short term movement get in the way
• 22:55
  Speaker 1: of evaluating how big can a specific company become, how
• 23:00
  Speaker 1: dominant in its particular niche, how important is that company
• 23:05
  Speaker 1: to a local market, And if you approach it from
• 23:08
  Speaker 1: that perspective, you tend to get some really good long
• 23:11
  Speaker 1: term investments that pay off. Um, although every one of
• 23:15
  Speaker 1: them periodically is going to take a breather, right, because
• 23:18
  Speaker 1: sometimes they'll get ahead of themselves as stocks. But you know,
• 23:21
  Speaker 1: if you look at Amazon, for example, it's kind of stunning. Uh,
• 23:25
  Speaker 1: you know, they just reported revenue growth on a multi
• 23:30
  Speaker 1: hundred billion dollar revenue base and um, you know, you
• 23:36
  Speaker 1: just don't find scale like that generally in the market.
• 23:39
  Speaker 1: So their revenues in the first quarter, we're up forty
• 23:43
  Speaker 1: year every year, the stocks only up thirty nine percent
• 23:46
  Speaker 1: year over year. So there seems to be a disconnect.
• 23:49
  Speaker 1: It's not not not extended. It makes sense you can't
• 23:52
  Speaker 1: go more compelling. It makes sense that you can't go
• 23:55
  Speaker 1: wrong there with the with the big fan companies. I mean,
• 23:58
  Speaker 1: Amazon is just a killer. But what do you like blow, um,
• 24:04
  Speaker 1: you know, trillion dollar valuations? What do you like in
• 24:07
  Speaker 1: terms of sectors other than Amazon? Apple? Um, you know, Tesla, Google? Sure? Well,
• 24:18
  Speaker 1: you know it's what's really interesting, Okay, if you if
• 24:20
  Speaker 1: you take a step back and you say, what, what's
• 24:22
  Speaker 1: the most important trend that's out there today that's shaping
• 24:28
  Speaker 1: new business formation? Shaping the industry structure, and it's this
• 24:35
  Speaker 1: digital transformation of the consumer. It's this direct to consumer
• 24:39
  Speaker 1: business model. So it doesn't matter if you're really powerful
• 24:42
  Speaker 1: brand like Louis Lutan or Nike. UM, you need to
• 24:49
  Speaker 1: um go direct to consumer. You need that relationship, and
• 24:53
  Speaker 1: you either do it through your own private store base
• 24:55
  Speaker 1: or your own website that you control so you can
• 24:58
  Speaker 1: monitor inventory pricing, um uh and control your own destiny.
• 25:04
  Speaker 1: So what we see in that movement is both um
• 25:09
  Speaker 1: early days of directed consumer sales like an e commerce
• 25:13
  Speaker 1: in Latin America where it's very underpenetrated. So that's like
• 25:16
  Speaker 1: Mercado Libre I mean just ironically reported last night sales
• 25:21
  Speaker 1: up a hundred fifty constant currency Brazil, Mexico, Argentina. They're
• 25:26
  Speaker 1: big markets, all of triple digit I mean, just an
• 25:28
  Speaker 1: amazing company. UM. And of course they're building digital payments
• 25:34
  Speaker 1: platform as well to grease the skids of commerce in
• 25:38
  Speaker 1: markets where people don't have credit cards or there is
• 25:41
  Speaker 1: low penetration, and so you have, you know, look to
• 25:45
  Speaker 1: emerging markets for these next markets. We got We've got
• 25:48
  Speaker 1: to leave it there just because of time, but we
• 25:50
  Speaker 1: really appreciate you taking time Mark Barry bow Head, a
• 25:52
  Speaker 1: global equity Jennison Associates. Thanks for listening to the Bloomberg
• 25:56
  Speaker 1: Markets podcast. You can subscribe and listen to interviews the
• 26:00
  Speaker 1: full podcasts, or whatever podcast platform you prefer. I'm Matt Miller.
• 26:04
  Speaker 1: I'm on Twitter at Matt Miller three. Pet On Fall
• 26:08
  Speaker 1: Sweeney I'm on Twitter at pt Sweeney. Before the podcast,
• 26:11
  Speaker 1: you can always catch us worldwide at Bloomberg Radio