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BI Weekend: Disney Earnings, EV Latest · Bloomberg Intelligence

0:02
Speaker 1: This is Bloomberg Intelligence with Alex Steel and Paul Sweeney.
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Speaker 2: The real app performance has been the US corporate high yield.
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Speaker 3: Do investors like the M and A that we've seen?
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Speaker 2: These are two big time blue chip companies.
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Speaker 4: The window between the peak and cut changing super fast.
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Speaker 1: Bloomberg Intelligence with Alex Steel and Paul Sweeney.
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Speaker 5: On Bloomberg Radio. I'm Paul Sweeney and I'm John Tucker
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Speaker 5: filling in for Alex Steele.
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Speaker 6: On Today's Bloomberg Intelligence Show.
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Speaker 2: We dig inside the big business stories impacting Wall Street
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Speaker 2: and the global markets.
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Speaker 5: Each and every week we provide in depth research and
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Speaker 5: data on some two thousand companies of one hundred and
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Speaker 5: thirty industries our analysts cover worldwide.
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Speaker 2: Today, we'll look at how a future Donald Trump presidency
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Speaker 2: will impact electric vehicles.
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Speaker 5: Plus we're going to discuss why shares of Tyson Food
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Speaker 5: surge the most in more than two years.
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Speaker 2: But first we dive into corporate earnings from the media
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Speaker 2: and entertainment giant Walt Disney.
1:04
Speaker 5: Walt Disney reported fourth quarter sales and profit that beat
1:07
Speaker 5: Wall Street expectations and forecast earnings growth for the next
1:10
Speaker 5: three years.
1:12
Speaker 2: For more, John and I were joined by Githa Raganathan,
1:14
Speaker 2: Bloomberg Intelligence analysts on US media.
1:16
Speaker 5: First, we asked Keitha for her take on Disney's most
1:19
Speaker 5: recent quarter.
1:21
Speaker 4: What we saw was a lot of guidance, and we've
1:23
Speaker 4: never seen guidance laid out like this for us ever before.
1:26
Speaker 4: I mean, this was line by line item guidance for
1:29
Speaker 4: each of the different subdivisions at Disney, whether you know
1:32
Speaker 4: it was the theme park business or the streaming or
1:35
Speaker 4: movie studios. They kind of gave us, you know, segment
1:38
Speaker 4: by segment numbers and exactly what to expect. And really
1:41
Speaker 4: the biggest thing for Disney over the past few quarters
1:45
Speaker 4: has just been this lack of visibility and so much
1:47
Speaker 4: of investor uncertainty, and they just cleared it all up
1:52
Speaker 4: in this one, you know, fell swoop with this earnings report.
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Speaker 2: They never did that for me, getha, I always had
1:57
Speaker 2: to guess and all that stuff. But for you, they
1:59
Speaker 2: just started up on silk platter. What got your attention
2:02
Speaker 2: the most from some of this guidance, What do you
2:03
Speaker 2: think the street really likes?
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Speaker 4: I think what the street really likes is you have
2:07
Speaker 4: high single digit EPs growth. Remember the street was projecting
2:11
Speaker 4: about four to five percent, So that's a nice uptick
2:15
Speaker 4: there for twenty twenty five, and then going into twenty
2:17
Speaker 4: twenty six and twenty twenty seven, they're looking at double
2:20
Speaker 4: digit earnings growth. And the other bright spots were, you know,
2:24
Speaker 4: the theme park business. Now, we do know that there
2:26
Speaker 4: is a moderation when it comes to the domestic theme
2:28
Speaker 4: park business, but it looks like things might not be
2:31
Speaker 4: actually as bad as we had feared. So domestic parks
2:34
Speaker 4: actually performed a little bit better than we expected. And
2:37
Speaker 4: then they talked about some weakness going into the fiscal
2:40
Speaker 4: first quarter. Remember we did have those two big hurricanes
2:43
Speaker 4: in Florida. They do have a lot of cruise ships
2:46
Speaker 4: that they're launching, and so there's going to be some
2:48
Speaker 4: launch costs weighing on profit. But then you get into
2:51
Speaker 4: the second half of fiscal twenty twenty five and they're
2:53
Speaker 4: expecting those cruise ships to contribute in a big way
2:55
Speaker 4: and kind of the theme parks to also come back.
2:57
Speaker 4: So I think that's again some source of you know,
3:01
Speaker 4: investor optimism and confidence.
3:04
Speaker 5: I get this streaming part. I'm not sure that I
3:06
Speaker 5: understand that linear TV part and why that's still part
3:10
Speaker 5: of the empire.
3:12
Speaker 4: Yeah, nobody understands it, john And that was actually a
3:15
Speaker 4: question for Hugh Johnston and Bob Eygert at the earnings call.
3:19
Speaker 4: They're like, you know, why should you be holding onto
3:22
Speaker 4: this business? You know, Comcast just recently said that they're
3:25
Speaker 4: going to be kind of considering spinning off their cable
3:28
Speaker 4: TV network business. And remember, the big thing that's really
3:31
Speaker 4: coming up for Disney in twenty twenty five is that
3:35
Speaker 4: they are launching this standalone ESPN product. And if they
3:39
Speaker 4: had any reservations in the past about jettisoning, you know,
3:43
Speaker 4: the TV network's business because they were tied to the
3:45
Speaker 4: bundle through ESPN, you know, this kind of definitely opens
3:49
Speaker 4: up the field for them and it no longer ties
3:51
Speaker 4: them down to the bundle. So they were asked the question,
3:53
Speaker 4: they said that they're not looking into it. They like
3:56
Speaker 4: their portfolio just the way it is. But we really
3:58
Speaker 4: think that once they get that ESPN standalone of streaming
4:02
Speaker 4: service up and running, they surely will kind of look
4:05
Speaker 4: into doing something more dramatic, I think with the TV networks,
4:08
Speaker 4: especially given you know, a regulatory change.
4:11
Speaker 2: To talk to us about the streaming business. They've finally
4:15
Speaker 2: turned profitable on that business. Give us the delta that
4:18
Speaker 2: you think that streaming business go through from losses to
4:21
Speaker 2: potential profits.
4:21
Speaker 4: Here, big big turnaround, Paul, And I mean this was
4:24
Speaker 4: really the big story for twenty twenty four. To go
4:27
Speaker 4: from four billion in losses in twenty twenty two, two
4:30
Speaker 4: and a half billion in losses in twenty twenty three,
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Speaker 4: to finally squeaking out a profit here in twenty twenty four.
4:36
Speaker 4: And remember they've just barely broken even, so about one
4:39
Speaker 4: hundred and fifty million dollars in profit. But the whole
4:41
Speaker 4: story is how they kind of build on that one
4:44
Speaker 4: hundred and fifty million dollars. So you know, Netflix this
4:47
Speaker 4: year is going to report about ten billion dollars in profit,
4:50
Speaker 4: and I think there's some encouraging commentary, so they already
4:52
Speaker 4: kind of guided. They gave us actually hard numbers for
4:56
Speaker 4: the streaming profit for both fiscal twenty twenty five and six.
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Speaker 4: Twenty twenty five, they said over a billion dollars in profit,
5:04
Speaker 4: and in twenty twenty six they actually gave us a
5:05
Speaker 4: margin number, double digit margins. And remember this is the
5:09
Speaker 4: big story. Everybody is chasing those twenty five percent operating
5:13
Speaker 4: margins that Netflix has already achieved, and so Disney is.
5:16
Speaker 4: It looks like, I mean, they obviously have a lot
5:18
Speaker 4: of catching up to do, but they're closing in.
5:20
Speaker 5: Our Thanks to Githa Raganath in Bloomberg Intelligence analyst on
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Speaker 5: US media, this.
5:25
Speaker 2: Week, we focused on a Bloomberg Big Take story entitled
5:28
Speaker 2: Trump's win puts Musk in the White House's new C suite.
5:32
Speaker 5: You can find it on Bloomberg dot com and on
5:34
Speaker 5: the terminal. The story looks at how Tesla CEO Elon
5:37
Speaker 5: Musk spent at least one hundred and thirty two million
5:40
Speaker 5: dollars to help Donald Trump's re election as US president
5:43
Speaker 5: and now Musk we'll have a role in Trump's new administration.
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Speaker 2: For more, guest host Jess Meant and I were joined
5:48
Speaker 2: by one of the story's authors, Max Chafkin, Bloomberg BusinessWeek
5:52
Speaker 2: Senior reporter. We first asked Max what we know about
5:55
Speaker 2: Elon Muck's new role.
5:56
Speaker 6: And we learned a little bit more.
5:58
Speaker 7: Just after this story was published, Donald Trump made something
6:01
Speaker 7: official that he had teased and that Elon Musk can
6:04
Speaker 7: tease repeatedly on the campaign trail, Elon Musk will be
6:07
Speaker 7: the person charged with providing advice on the streamlining of government. Now,
6:12
Speaker 7: that could mean any number of things. It could mean,
6:15
Speaker 7: I think very little. It could also mean that, as
6:19
Speaker 7: Donald Trump prepares to enact his you know, very ambitious agenda,
6:23
Speaker 7: that Elon Musk will be at his side, and that'll
6:26
Speaker 7: be my bad. I mean, I think the job thing
6:29
Speaker 7: is probably a distraction. You know, the most important question
6:33
Speaker 7: in the Trump White House is who has Trump's ear,
6:35
Speaker 7: and right now that's Elon Musk. And I think as
6:39
Speaker 7: we put together the story and as I've been thinking
6:41
Speaker 7: about this, you know, Elon Musk throws him into these companies,
6:44
Speaker 7: and famously he has six different companies, you know, Tesla
6:47
Speaker 7: and SpaceX, his car company, and rocket Company being.
6:50
Speaker 6: The big ones.
6:51
Speaker 7: I think we need to start thinking about politics, and
6:53
Speaker 7: in particular Elon Musk's role in right wing politics, whether
6:57
Speaker 7: it's the Trump the next Trump administration, or even beyond
7:00
Speaker 7: on that as his other big company, as something that
7:03
Speaker 7: he is going to be devoting a lot of time
7:05
Speaker 7: to and trying to use it frankly to benefit his
7:09
Speaker 7: other interests.
7:10
Speaker 8: Leading a commission specifically outside of government, Elon Musk doesn't
7:14
Speaker 8: have to divest his personal and financial holdings when making
7:17
Speaker 8: recommendations to the White House on federal spending and regulations
7:20
Speaker 8: that he wants to cut. I mean, what sort of
7:21
Speaker 8: precedents do we have for something that's created sort of
7:24
Speaker 8: that's supposed to be specifically outside government, And what power
7:27
Speaker 8: can he yield and not yield? Do we have any indications?
7:30
Speaker 7: Sure have been lots of presidential commissions. You know, this
7:34
Speaker 7: kind of thing is not necessarily anything new. It's really
7:37
Speaker 7: just a question of how closely is Donald Trump listening
7:41
Speaker 7: to it? And when Elon Musk, He's suggested all kinds
7:44
Speaker 7: of very radical things, things that are likely to be
7:47
Speaker 7: either difficult to achieve, like practically working within the confines
7:51
Speaker 7: of government, or wildly unpopular or both. So you know,
7:55
Speaker 7: he's said he suggested, for instance, that he's going to
7:58
Speaker 7: twitter the US governmentsuggessing, you know, massive layoffs. Remember he
8:02
Speaker 7: laid off eighty percent of the Twitter staff. He is
8:05
Speaker 7: not going to lay off eighty percent of the US government.
8:07
Speaker 7: I think that would be a very very very surprising
8:10
Speaker 7: thing if it were to happen that said, you know,
8:13
Speaker 7: Trump has has is going to try to defund aspects
8:17
Speaker 7: of the government, and it really seems like Elon Musk
8:20
Speaker 7: is going to play a role in deciding what gets defunded,
8:23
Speaker 7: which is of course, is going to raise all sorts
8:26
Speaker 7: of ethical concerns and questions. And because because there are
8:30
Speaker 7: ways that President Trump, president elect Trump is going to
8:34
Speaker 7: be in a position to say, squash investigations into Elon
8:38
Speaker 7: Musk companies, or direct funds to Elon musk companies, or
8:42
Speaker 7: slow down some of Elon Musk's competitors, and and so
8:46
Speaker 7: you know, it's it's it's going to keep journalists busy.
8:48
Speaker 7: It's gonna I'm sure that the left is going to
8:52
Speaker 7: be very focused on this over the next couple of
8:54
Speaker 7: years because Elon Musk, who's a polarizing guy, is going
8:58
Speaker 7: to be tied to this administration very closely.
9:00
Speaker 2: I mean, Elon Musk, you cite it in your article,
9:03
Speaker 2: and you just mentioned here all the companies he runs, Tesla, SpaceX,
9:07
Speaker 2: orally on and on and on. How many hours in
9:09
Speaker 2: a day does this guy have?
9:10
Speaker 6: I mean, I mean, I mean, you know you have.
9:13
Speaker 8: Mentioned when you think about how many companies to plays
9:17
Speaker 8: a lot.
9:17
Speaker 7: Of video games, which you know is one of the
9:20
Speaker 7: many head scratchers with this extraordinary man.
9:24
Speaker 6: Uh. I think we've seen.
9:26
Speaker 7: Investors in some of these other companies get concerned. And
9:30
Speaker 7: you know, right now we're in the middle of this
9:33
Speaker 7: kind of honeymoon phase. You know, there's a mania to
9:36
Speaker 7: the way Elon Musk is talking about this stuff. Is
9:39
Speaker 7: in mar A Lago, he's in Washington. You know, Trump
9:41
Speaker 7: family members are referring to him as uncle Elon.
9:44
Speaker 6: You got to think that.
9:45
Speaker 7: This is not going to last, and if it were
9:48
Speaker 7: to last, that there would be a bit of a
9:50
Speaker 7: coutdown because because as you say, Tesla is a big,
9:54
Speaker 7: complicated company with lots of challenges, and right now we're
9:58
Speaker 7: seeing a lot of investors bid up the stop, but
10:00
Speaker 7: there isn't a ton of It's not like there's a
10:03
Speaker 7: clear rationale for why Tesla is suddenly worth like forty
10:06
Speaker 7: percent more than it was before the election, except that, hey,
10:10
Speaker 7: maybe Trump's gonna make things better. But but you know,
10:12
Speaker 7: they're gonna be challenges and distraction is going to be
10:15
Speaker 7: something that we're gonna be looking at.
10:18
Speaker 8: And what about ev policies because it seemed like they
10:20
Speaker 8: were more beneficial toward Tesla maybe under the Biden administration
10:24
Speaker 8: rather than the prior Trump administration. So how does this
10:26
Speaker 8: sort of shift? And you have kind of the Trump
10:29
Speaker 8: two point.
10:29
Speaker 4: Zero coming up.
10:30
Speaker 7: And this is one of the things that's so strange
10:32
Speaker 7: because Elon Musk became much more conservative during the Biden years,
10:37
Speaker 7: but the Bid years were incredibly good to Tesla.
10:40
Speaker 6: Tesla's value, you know, shot way up.
10:43
Speaker 7: It went from being kind of a niche player to
10:45
Speaker 7: one of the large American car companies. And you know, Trump,
10:50
Speaker 7: as you kind of hint, was very critical about electric
10:54
Speaker 7: vehicles on the campaign trail. Now, now there are two
10:56
Speaker 7: things here that are probably worth bringing up. One is
10:59
Speaker 7: where Tesla is now is very different than it was
11:01
Speaker 7: four or five years ago. And you could make an
11:03
Speaker 7: argument that these electric vehicle subsidies actually do more for
11:07
Speaker 7: Tesla's competitors than they do for Tesla itself.
11:09
Speaker 6: So like, if you were to remove all.
11:11
Speaker 7: These subsidies, yes, it might cost Tesla investors money, but
11:15
Speaker 7: it would also sort of help Tesla lock in its
11:18
Speaker 7: very very dominant position in the market. And the second thing,
11:21
Speaker 7: probably the more important thing, is that Elon Musk is
11:24
Speaker 7: desperately trying to move beyond the auto business. He wants
11:27
Speaker 7: Tesla to be an AI company. He wants to have robotaxis.
11:31
Speaker 7: There is no regulatory regime there, and I think what
11:34
Speaker 7: investors are hoping, and again I don't know that they
11:36
Speaker 7: have much sort of clear factual basis for this hope.
11:39
Speaker 7: But this is the rationale that Trump will basically legalize
11:42
Speaker 7: this business, that he will take a.
11:44
Speaker 6: Very dicey regulatory situation.
11:47
Speaker 7: And make it less dicey, and that will be worth
11:49
Speaker 7: a lot of money to Tesla and ultimately to as shareholders.
11:52
Speaker 6: Thirty seconds left, Max.
11:54
Speaker 2: How much time do we think Elon Musk is going
11:56
Speaker 2: to allocate to the government stuff?
11:59
Speaker 7: Well, right now it seems like he's he's it's a
12:02
Speaker 7: full time job, right I mean, he seems to be
12:04
Speaker 7: there quite a lot. I think this is going to
12:07
Speaker 7: be something that he's very very focused on, you know,
12:11
Speaker 7: probably as long as it lasts, which which maybe that's
12:14
Speaker 7: only going to be a couple of months.
12:17
Speaker 6: Maybe it's going to be longer.
12:18
Speaker 9: You know.
12:19
Speaker 7: He did he has signaled that he wants to play
12:21
Speaker 7: in politics beyond this, beyond twenty twenty four. He's talking
12:25
Speaker 7: about the midterms already so interesting, you'll see, all right.
12:28
Speaker 5: Thanks to Max Chafkin, Bloomberg BusinessWeek senior reporter, coming up
12:32
Speaker 5: wi a breakdown how oil producers will be impacted by
12:35
Speaker 5: a Donald Trump presidency.
12:36
Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing inpth
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Speaker 2: I go on the terminal. I'm Paul Sweeney.
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Speaker 5: And I'm John Tucker. This is Bloomberg.
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13:09
Speaker 5: I'm Paul Sweeney and I'm John Tucker filling in for
13:11
Speaker 5: Alex Steele. Last week, Donald Trump was elected the forty
13:14
Speaker 5: seventh President of the United States, reclaiming the White House
13:18
Speaker 5: and pulling off a stunning political comeback. And how many
13:21
Speaker 5: industries are wondering how they'll be impacted In twenty twenty five.
13:25
Speaker 5: For more against hoos, Matt Miller and I were joined
13:27
Speaker 5: by Steve Man, Bloomberg Intelligence Global Autos and Industrials Research Manager.
13:32
Speaker 5: We first asked Steve for his take on how the
13:34
Speaker 5: EV industry will be affected by Donald Trump.
13:37
Speaker 9: Yeah, if Trump decides to kind of remove or cut
13:41
Speaker 9: the seventy five hundred tax credit or EV tax credit,
13:44
Speaker 9: I think most people believe that the EV penetration will stall.
13:49
Speaker 9: If not stall, it'll probably fall because a lot of
13:53
Speaker 9: the consumers are relying on that that's seventy five hundred
13:57
Speaker 9: dollars to make sure, you know, to bring down the price,
14:00
Speaker 9: the effective price of the vehicle. Most evs sold in
14:04
Speaker 9: America are still very expensive. There's only a limited number
14:08
Speaker 9: of them that are under fifty thousand dollars. So the
14:11
Speaker 9: fear is, you know, it's going to stall EV penetration.
14:17
Speaker 9: The automaker is going to have a hard time because
14:19
Speaker 9: they's already invested. They've already committed investing a lot of
14:23
Speaker 9: money under the Inflation Reduction Act about one over one
14:28
Speaker 9: hundred and fifty billion dollars to onshore a lot of
14:31
Speaker 9: supply chains. So it's going to cause a lot of
14:34
Speaker 9: chaos within the industry.
14:35
Speaker 5: So they'll be under no pressure whatsoever moving forward, possibly
14:39
Speaker 5: to increase sales of evs.
14:42
Speaker 9: Yeah, I think the automaker is going to have to
14:45
Speaker 9: increase incentives. I think what could happen if the EV
14:50
Speaker 9: penetration rate does decrease from about eight percent currently in
14:55
Speaker 9: the US. He's going to be left with the strongest players.
14:58
Speaker 9: And to me, that looks like Tesla, because Tesla does
15:02
Speaker 9: have the lowest costs structure amongst all the EV makers
15:07
Speaker 9: in the US, and if the market shrinks, the weaker
15:12
Speaker 9: ones will probably fall on the wayside.
15:15
Speaker 5: And oddly enough, First Bro or what do we call him,
15:17
Speaker 5: first friend, Elon Musk, he's not necessarily in favor of
15:20
Speaker 5: these these tax subsidies for evs.
15:25
Speaker 9: Yeah, I think, you know, to him, I don't. He
15:29
Speaker 9: thinks Tesla doesn't need them, and I you know, it's
15:32
Speaker 9: it's partly true. If you look at the amount of
15:36
Speaker 9: cars that are least and eligible for the seventy five hundred,
15:42
Speaker 9: actually a lot of the seventy five hundred tax credit
15:45
Speaker 9: as actually from leased vehicles. If you look at the
15:49
Speaker 9: amount of least vehicles that Tesla have sold in the
15:52
Speaker 9: past twelve months, it's about twenty percent. So you know
15:56
Speaker 9: they'll get impacted. But if you compare it to Rivian.
15:59
Speaker 9: You know, Rivian has about fifty percent of their vehicles
16:02
Speaker 9: leased and those and eligible for the seventy five hundred,
16:06
Speaker 9: so it could be a bigger impact in Reviant.
16:09
Speaker 10: Yeah, there's a limit on you don't get the tax
16:11
Speaker 10: credit if you're buying a vehicle that costs more than
16:14
Speaker 10: eighty thousand dollars. And I believe there's a household income
16:18
Speaker 10: requirement as well, you have to be below a certain level.
16:21
Speaker 10: But if you lease it, you can get around at
16:24
Speaker 10: least one part of that tax credit. Isn't that right, Steve?
16:26
Speaker 5: That's right.
16:27
Speaker 9: That's actually what I'm referring to. So when we look
16:29
Speaker 9: at the companies who's going to get impacted, we really
16:32
Speaker 9: look at, you know, how many of those vehicles are leased.
16:36
Speaker 9: If you look at EV's in general in the US,
16:39
Speaker 9: the you know, the leasing penetration is actually upwards of
16:42
Speaker 9: seventy five eighty ninety percent, So a lot of people
16:45
Speaker 9: that actually buy evs are leasing it to get that
16:48
Speaker 9: seventy five hundred dollars.
16:50
Speaker 10: What does the EV market look like right now? I mean,
16:52
Speaker 10: I know, if you read the headlines, you would think
16:57
Speaker 10: that no one has bought an EV this year, Like,
16:59
Speaker 10: you know, the industry is in trouble because they're so unpopular,
17:04
Speaker 10: not just politically, but you know, since there's difficult to
17:07
Speaker 10: charge for a lot of people, it's just not an option. However,
17:10
Speaker 10: don't we still see EV sales actually growing?
17:15
Speaker 5: Oh, we are.
17:16
Speaker 9: We are seeing EV sales growing, especially in the second
17:18
Speaker 9: half of this year, because there's been a lot of
17:21
Speaker 9: price cuts right over the past eighteen twenty four months
17:24
Speaker 9: in the industry, and a lot of these vehicles have
17:27
Speaker 9: become more affordable, and even especially in the used EV market,
17:32
Speaker 9: those vehicles are very competitive to gasoline cars. What the
17:37
Speaker 9: industry is really facing is getting more impacted by the
17:41
Speaker 9: fact that interest rates are high. A lot of people
17:44
Speaker 9: cannot afford expensive cars these days, and EV's are a
17:47
Speaker 9: little bit more expensive than ice at the moment. So
17:50
Speaker 9: what the industry was trying to do, and I think
17:52
Speaker 9: what the IRA was trying to do, was trying to
17:54
Speaker 9: onshore a lot of the production while on shore a
17:57
Speaker 9: lot of the supply chain in the US and hopes
18:00
Speaker 9: of brain costs down so automakers can offer more affordable evs.
18:06
Speaker 9: And that's what we were expecting. We were actually expecting
18:11
Speaker 9: the EV penetration rate to rise, especially into twenty twenty
18:15
Speaker 9: six and twenty twenty seven.
18:17
Speaker 10: I got to break in here because I feel like,
18:19
Speaker 10: you know, Americans have shown a propensity for taking one
18:22
Speaker 10: thousand dollars plus monthly payments.
18:24
Speaker 6: I don't think it's about the price.
18:26
Speaker 5: Frankly, what do you think.
18:29
Speaker 6: That's the big problem.
18:30
Speaker 10: I'm test driving right now at GMC Sierra EV. It
18:33
Speaker 10: is a fantastic vehicle. It's expensive, but I think a
18:37
Speaker 10: lot of people are willing to take on debt to
18:39
Speaker 10: own a car like that. The problem is there's nowhere
18:41
Speaker 10: to charge it. I park in a garage across the
18:43
Speaker 10: street in Manhattan, you know, capital of the world, and
18:46
Speaker 10: the only option they offer is the slowest potential charge
18:50
Speaker 10: for twenty dollars a day.
18:51
Speaker 5: So it's just not worth it.
18:53
Speaker 9: Yeah, I think that's a very good point. Affordability is
18:56
Speaker 9: not the only hurdle. It's the charging and the range,
18:59
Speaker 9: and you know, dependent on the use. I think a
19:02
Speaker 9: lot of people with the second vehicle make it an EV.
19:06
Speaker 9: Someone who's using it for daily commutes make an EV.
19:10
Speaker 9: But you know, America is a big country and people
19:13
Speaker 9: love to drive cars, and there are a big majority
19:17
Speaker 9: of car buyers that are you know, probably staying away
19:21
Speaker 9: from ev.
19:22
Speaker 5: Because of that, all right? Thanks to Steve Man, Bloomberg Intelligence,
19:25
Speaker 5: Global Autos and Industrials Research Manager.
19:28
Speaker 2: Each week we look at research from Bloomberg and EF
19:31
Speaker 2: previously known as New Energy Finance.
19:33
Speaker 5: They're the team at Bloomberg that tracks and analyzes the
19:36
Speaker 5: energy transition from commodities to power, transport, industries, buildings, and
19:41
Speaker 5: agriculture sectors. This week, we took a look at how
19:45
Speaker 5: Donald Trump's upcoming presidency will impact the oil industry.
19:49
Speaker 2: For more guests, Sos, Molly Smith, and I were joined
19:51
Speaker 2: by ty Lou b n E, f oil market specialist.
19:55
Speaker 2: We first asked, Hi, if it is a fair assumption
19:57
Speaker 2: that Donald Trump will be good for the energy industry.
20:00
Speaker 11: I think the USL industry and the gas industry can
20:03
Speaker 11: benefit from Trumpet administration in the number of ways. I
20:07
Speaker 11: think the first off, the bed is like a lower
20:10
Speaker 11: corporate tax rate.
20:12
Speaker 12: So personal see.
20:13
Speaker 11: That Trump has mentioned has indicated he would like to
20:16
Speaker 11: lower corporate tax rates from the current twenty one percent
20:19
Speaker 11: to fifteen percent.
20:20
Speaker 12: So if the materializes, that's the way of the BED.
20:22
Speaker 11: That's like more money for the industry and for the shareholders.
20:25
Speaker 3: What are they going to do with that money?
20:26
Speaker 9: Then?
20:26
Speaker 3: Are you suggesting it would be share buybacks?
20:29
Speaker 2: Yeah?
20:29
Speaker 11: So there's definitely like a number of options these companies
20:32
Speaker 11: can do with this quote unquote extra money. They can,
20:35
Speaker 11: like you said, they can do more buyback for the shares,
20:38
Speaker 11: they can issue more dibidend payouts, they can reduce the debt,
20:42
Speaker 11: and finally they can always they always have the option
20:44
Speaker 11: to funnel some of these money into capital expenditures, which
20:48
Speaker 11: ultimately retranslates into more production down the road.
20:52
Speaker 2: From the regulatory standpoint, I mean, can I go down
20:54
Speaker 2: there now and drill a well? Can I make a
20:56
Speaker 2: pipeline to take my natural guess to corporate christ Year
21:00
Speaker 2: wherever it needs to get to. Is it can be
21:02
Speaker 2: easier under a second Trump administration to build energy stuff?
21:07
Speaker 12: Yeah, I would definitely think so.
21:08
Speaker 11: So under the Parton administration, that's the government has imposed
21:11
Speaker 11: a lot of regulations. There are team that's unfriendly to
21:14
Speaker 11: the only gas industry. The government is issued during rights
21:18
Speaker 11: moratorium they issued they placed the pause on energy exports permits,
21:24
Speaker 11: and they also increase royalties on federal land leases.
21:28
Speaker 1: Uh.
21:28
Speaker 12: And I would presume and all of.
21:30
Speaker 11: These like we're pretty hostile and created a lot of
21:33
Speaker 11: uncertainty to the industry.
21:34
Speaker 12: So I would assume I would.
21:36
Speaker 11: Think that Trump administration would remove a lot of these regulations.
21:40
Speaker 11: There are team that's ownerds to our gas producers, so
21:44
Speaker 11: definitely beneficial from that point of view.
21:46
Speaker 13: You mentioned before, you know, increasing capex potentially and how
21:50
Speaker 13: that would mean more production.
21:52
Speaker 3: Got to the worry about prices.
21:53
Speaker 13: If you are producing so much more, what happens to
21:56
Speaker 13: the supply demand equation. There is that already some thing
22:00
Speaker 13: that drillers are thinking about of how much more they
22:03
Speaker 13: might want to maybe not go in too much.
22:05
Speaker 12: Yeah, that's for sure.
22:06
Speaker 11: So if you look at the past ten years, use
22:09
Speaker 11: oil producers have on server occasions crashed the aill process
22:12
Speaker 11: when they decided to turn on the production tabs. So
22:15
Speaker 11: they're very cognizange of the risks this time around. On
22:18
Speaker 11: top of that, that's like a lot of shareholder pressures
22:20
Speaker 11: on these oil and gas companies to maintain capital discipline
22:23
Speaker 11: and to increase capital payback. So from that sense, I
22:27
Speaker 11: think even though if there's like more money to grow
22:29
Speaker 11: around in the industry, it would be more much harder
22:32
Speaker 11: for the oil producers to grow production the way they.
22:36
Speaker 12: Did in the past ten years.
22:38
Speaker 2: So when did the US become a net exporter like
22:41
Speaker 2: twenty sixteen or something like that. I think so, okay,
22:44
Speaker 2: so we were a net importer forever, then we became
22:46
Speaker 2: thanks to the shell find so we became.
22:49
Speaker 6: A net exporter.
22:51
Speaker 2: How does the US oil industry and not sure if
22:54
Speaker 2: you can being characterize it or is it just individual companies?
22:56
Speaker 2: How does the US oil industry interact with O Peck
23:00
Speaker 2: if at all?
23:01
Speaker 11: So the way I think about that, very competitive, like
23:04
Speaker 11: natural competitors against each other. So if if lower taxes
23:08
Speaker 11: in the Trump administration materializes, it would definitely make the
23:11
Speaker 11: US O patch a lot more competitive. It will also
23:15
Speaker 11: the brick given calculations there be and there would be
23:18
Speaker 11: more money to grow around, so it would be it
23:20
Speaker 11: will make it much harder for OPEC.
23:22
Speaker 12: To increase the output.
23:24
Speaker 11: So it's going to place O pack on a more
23:26
Speaker 11: difficult grant.
23:28
Speaker 13: You know, something that in part got Donald Trump reelected
23:32
Speaker 13: to the White House was the idea of bringing prices down.
23:35
Speaker 13: And you know, gas prices obviously a big sticking point
23:38
Speaker 13: for a lot of Americans. Gas prices have been coming
23:41
Speaker 13: down pretty consistently over the past, you know, six months
23:46
Speaker 13: or so down to now, like about roughly three dollars
23:49
Speaker 13: a gallon on average nationwide.
23:51
Speaker 3: What can Trump really do for gas prices?
23:55
Speaker 11: Well, when I think about gas prices, there are two
23:57
Speaker 11: pieces to it. That's the crude oil price art and
24:00
Speaker 11: then the that's the refinery margin part. Now, on the
24:03
Speaker 11: refinery margin, there's probably not much a person can do
24:06
Speaker 11: to it because you basically have to increase refining capacity
24:10
Speaker 11: and that takes years to build out. If you want
24:12
Speaker 11: to prove their part, the outer part will be the
24:15
Speaker 11: all price prize. Now, if you wed regulations make it
24:19
Speaker 11: easier for companies to drill, you.
24:21
Speaker 12: Can pre rent. Theoretically, you can prevent some of the.
24:24
Speaker 11: Possible price spikes in all price in all prices, just
24:28
Speaker 11: because it's less onerous for these jurists to put more
24:32
Speaker 11: capital into the ground. So in this sense, you can
24:35
Speaker 11: help prices from seeing more spikes. But however, I don't
24:39
Speaker 11: think these companies will really go out and go all
24:42
Speaker 11: and endure again the way they did before, for the
24:44
Speaker 11: reasons we talked about before.
24:46
Speaker 2: So what's happened to the Russian oil It's been a
24:49
Speaker 2: couple of years now, and if it's not going to Germany.
24:52
Speaker 6: Where's it going.
24:54
Speaker 11: Yeah, so it's not going to the Western European nations,
24:57
Speaker 11: and Western Nations has placed sanctions on Russian So a
25:00
Speaker 11: lot of this has been brought up.
25:02
Speaker 12: By unconscries like India and China.
25:04
Speaker 11: So they're pretty really benefiting from these sensions.
25:08
Speaker 6: So these sanctions aren't really working, are they.
25:10
Speaker 12: They'll be directing trade flow.
25:12
Speaker 6: It's the redirecting trade flow, and.
25:14
Speaker 11: They're making it harder for Russia to ship the ows
25:17
Speaker 11: around the world. So it does increase the costs on
25:21
Speaker 11: the Russian all producers. So that's an impact, but the
25:24
Speaker 11: impact I feel like it's probably more limited.
25:27
Speaker 5: All Right, thanks to Tyler B and E f oil
25:29
Speaker 5: market specialists. Just to head on the program, we're going
25:32
Speaker 5: to look at how Wall Street math wizards are decoding
25:36
Speaker 5: private market returns.
25:37
Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
25:40
Speaker 2: depth research and data on two thousand companies one hundred
25:43
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25:46
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25:47
Speaker 5: I'm Paul Swiney and I'm John Tucker, and this is Bloomberg.
25:55
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25:59
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26:03
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26:06
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26:09
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26:14
Speaker 5: I'm Paul Sweeney and I'm John Tucker filling in for
26:16
Speaker 5: Alex Steele.
26:17
Speaker 6: We move next to corporate earnings from Tyson Foods. This
26:20
Speaker 6: week shares a Tyson food surge, the most in more
26:22
Speaker 6: than two years.
26:23
Speaker 5: That's after the company beat fourth quarter earnings expectations and
26:26
Speaker 5: projected stronger results next year. And this comes as a
26:30
Speaker 5: turnaround at Tyson's chicken business offset losses in beef for More.
26:35
Speaker 2: Guest host Jess Mett and I were joined by Jen
26:37
Speaker 2: bartashis Bloomberg Intelligence senior retail analysts. We first asked Jen
26:41
Speaker 2: for her take on Tyson's Foods the most recent.
26:43
Speaker 14: Quarter, and I think what we've really thought was they
26:46
Speaker 14: were able to end their fiscal year on a high note.
26:49
Speaker 14: That's really been a culmination of a lot of effort
26:51
Speaker 14: to streamline and improve their business. They've been very inconsistent
26:54
Speaker 14: in the last few years, so it is a little
26:56
Speaker 14: refreshing to see that they finally seem to have gotten
26:59
Speaker 14: their arms around some of the problems that they were having,
27:02
Speaker 14: and I seem to be on a very good trajectory
27:04
Speaker 14: going forward.
27:05
Speaker 8: Talk to us more, maybe about the inflation picture, because
27:08
Speaker 8: it looks like Tyson's second largest source of revenue actually
27:12
Speaker 8: demand for chicken actually improved because consumers were looking for
27:15
Speaker 8: those cheaper alternatives to beef. So what do you think
27:17
Speaker 8: this tells us about inflation right now?
27:21
Speaker 14: It's a great question, And with regards to inflation, there's
27:24
Speaker 14: a dual effect that Tyson has. The first is because
27:27
Speaker 14: they are so big in chicken, it's obviously a benefit
27:30
Speaker 14: to them when people are trading down or they're seeking
27:33
Speaker 14: cheap protein to put on their table. Chicken is a
27:35
Speaker 14: big answer to that question, and Tyson is definitely reaping
27:39
Speaker 14: the benefits of that. A little bit harder and a
27:41
Speaker 14: little bit more nuanced is the impact that inflation has
27:44
Speaker 14: on their prepared food segment. That's on the things that
27:47
Speaker 14: you find in the frozen aisle, in the refrigerated aisle.
27:50
Speaker 14: Those are higher cost items usually and they're a little
27:53
Speaker 14: bit higher margin for Tyson. So finding the right balance
27:56
Speaker 14: has been important as consumers look for those prices to
27:59
Speaker 14: come down a little bit further as well.
28:02
Speaker 2: So what drives their business top line revenue drivers is
28:06
Speaker 2: is it kind of a GDP stories, It's something different
28:08
Speaker 2: than that.
28:10
Speaker 14: It really is a reflection of where the consumer is.
28:12
Speaker 14: It is really about where the demand is going to
28:15
Speaker 14: fall when it comes to cost drivers. For Tyson, they
28:19
Speaker 14: really benefit from lower grain prices. So when corn comes down,
28:22
Speaker 14: soy comes down. That's good because that's the feedstock for
28:25
Speaker 14: the animals. But the way that Tyson goes usually follows
28:30
Speaker 14: just the general consumer and where they're trending and how
28:34
Speaker 14: incomes are progressing.
28:35
Speaker 8: Something earlier this year I thought was interesting because I
28:38
Speaker 8: talked to you about kind of price mix when it
28:41
Speaker 8: came to another segment in the consumer staples category, when
28:45
Speaker 8: it came to consumer package good type companies. Obviously, if
28:48
Speaker 8: you look at Tyson's Food too, when it comes to
28:50
Speaker 8: those types of food, beverage, food product type companies that
28:54
Speaker 8: are distributing packaged foods and meats, how do you view
28:57
Speaker 8: kind of when you were talking to me earlier this
28:58
Speaker 8: year about promotiontional sales for a lot of these types
29:01
Speaker 8: of companies in the back half of the year, like
29:03
Speaker 8: buy one, get one free, different things like that. As
29:06
Speaker 8: far as what this shows us about maybe consumer spending
29:09
Speaker 8: and what a lot of these companies when they are
29:11
Speaker 8: distributing these types of goods, how they're faring.
29:14
Speaker 14: It's a big topic for these companies. And so when
29:17
Speaker 14: you're looking at volumes, almost every package food company started
29:20
Speaker 14: this year saying they were going to grow volumes, and
29:23
Speaker 14: yet very few have actually been able to actually realize
29:26
Speaker 14: volume growth this year. And that's really because the shoppers
29:29
Speaker 14: have been so conservative on their spending and they've been
29:32
Speaker 14: seeking deals. There's been a lot of pressure to run promotions,
29:36
Speaker 14: and so we've seen promotional activity tick up substantially in
29:40
Speaker 14: the last quarter and in the second half of this
29:43
Speaker 14: year overall, and we're seeing more deals, more discounts, and
29:48
Speaker 14: all of that is usually coming at the price of
29:50
Speaker 14: the package food company, not necessarily the retailer. So that's
29:54
Speaker 14: good news for consumers who are looking for deals. It
29:57
Speaker 14: makes it a much harder process to manage for the
29:59
Speaker 14: packa food companies. So for Tyson, you know, part of
30:02
Speaker 14: what they've really been working on is increasing their innovation
30:05
Speaker 14: pipeline things where they can bring new products to market
30:09
Speaker 14: and have a different price point for those and that's
30:12
Speaker 14: a similar strategy to what a lot of these other
30:14
Speaker 14: package food companies are trying to do to just generate
30:17
Speaker 14: consumer interest in their products.
30:19
Speaker 2: Again, so Jenna know Tyson, they actually have adjusted operating
30:23
Speaker 2: income losses for beef and pork.
30:27
Speaker 14: Why is that, Yes, Well, when you look at the
30:30
Speaker 14: beef market, we have a shortage of beef. The animals
30:34
Speaker 14: are getting bigger, so there's still beef there, but because
30:37
Speaker 14: of that, prices have been a lot higher and it's
30:41
Speaker 14: been a little bit more expensive for consumers in terms
30:43
Speaker 14: of purchasing beef and certainly specific cuts of beef. And
30:48
Speaker 14: what we're seeing in the cattle market are very few
30:50
Speaker 14: signs that that's going to change anytime soon. So at
30:53
Speaker 14: this moment, we're thinking we're not going to see big
30:56
Speaker 14: signs that the cattle market is going to expand again
30:58
Speaker 14: until the end of twenty twenty five, so that's still
31:02
Speaker 14: a good ways away, which is part of why the
31:04
Speaker 14: company guided to a loss and adjusted operating income for
31:07
Speaker 14: the beef segment for twenty twenty five.
31:09
Speaker 5: All Right, Thanks to Jen Bartashis Bloomberg Intelligence Senior Analysts,
31:13
Speaker 5: Retail staples and packaged food.
31:15
Speaker 2: This week, we took a look at a Bloomberg Big
31:18
Speaker 2: Take story entitled Wall Street math Wizards are Decoding Private
31:22
Speaker 2: market Returns.
31:23
Speaker 5: You can find it on Bloomberg dot Com and the Terminal.
31:26
Speaker 5: The story looks at how a small band of math
31:28
Speaker 5: wizards want to demystify private market returns.
31:32
Speaker 2: For more, guest host Molly Smith and I were joined
31:34
Speaker 2: by the stories author Justina Lee, Bloomberg Markets reporter. We
31:38
Speaker 2: first asked Justina for more context on our latest story.
31:41
Speaker 15: If we kind of think about, you know, what's been
31:43
Speaker 15: happening to active management in the stock market for the
31:46
Speaker 15: past few decades. I mean, these days were really used
31:49
Speaker 15: to talk about like you know, alpha and beta and
31:52
Speaker 15: kind of how does your performance compare to the benchmark?
31:55
Speaker 15: And that's really killed a lot of the business. And
31:57
Speaker 15: I think what my story tries to bring up is
32:00
Speaker 15: could we see a similar revolution in private markets? And
32:03
Speaker 15: of course it's a way harder math to crunch, because
32:07
Speaker 15: as you mentioned, you know, you don't have the numbers
32:09
Speaker 15: as often and a lot of the time, you know,
32:11
Speaker 15: the numbers are quite subjective. But we are seeing a
32:15
Speaker 15: lot of interesting quant research here and they are trying
32:18
Speaker 15: to kind of use some statistical techniques to kind of
32:21
Speaker 15: reveal the risks and also to compare performance within private markets.
32:26
Speaker 13: And so much of what comparing performance needs is obviously
32:29
Speaker 13: a benchmark. And talking about how the S and P
32:32
Speaker 13: five hundred is the natural benchmark for so many companies.
32:35
Speaker 3: Does that still apply in private markets?
32:38
Speaker 13: Does that still make sense to be comparing these returns
32:41
Speaker 13: against a publicly a basket of publicly traded companies.
32:44
Speaker 15: Yeah, that really is a big question here, because even
32:47
Speaker 15: if you use a lot of these quant techniques, you
32:50
Speaker 15: still need to choose a benchmark to compare private markets to.
32:54
Speaker 15: And actually it can tell you a very different kind
32:57
Speaker 15: of story depending on which benchmark you pick. Like in
33:00
Speaker 15: my story, I cited this paper from Public Market Quants
33:04
Speaker 15: saying that you know, if you compare PE to S
33:07
Speaker 15: and P five hundred, I mean, the average P fund
33:09
Speaker 15: actually does quite well. But if you compare it to
33:12
Speaker 15: like small cap value, you know, come up. Maybe perhaps
33:15
Speaker 15: you might think that looks more like a P portfolio.
33:18
Speaker 15: It actually loses to small cap value. And I think
33:21
Speaker 15: that really is the big question here, because if you're
33:24
Speaker 15: an investor and you can get better returns in public markets.
33:28
Speaker 15: I mean, you're paying way less fees in public markets,
33:30
Speaker 15: and so you wouldn't want to be EPE.
33:33
Speaker 2: What is the direct alpha approach?
33:36
Speaker 15: Yeah, so this staric alpha approach was kind of invented
33:40
Speaker 15: by this guy, Barry Griffiths, who was at Landmark Partners
33:43
Speaker 15: for a long time and then when that was acquired
33:46
Speaker 15: by Ares, he was the head quantum ARES. And the
33:49
Speaker 15: math is actually not that complicated. It's mostly to compare
33:54
Speaker 15: kind of the cash flows you get from PE kind
33:56
Speaker 15: of with the opportunity cost of what you would have
34:00
Speaker 15: gotten if you had invested that in public markets. And
34:03
Speaker 15: so the idea there is kind of a more apples
34:06
Speaker 15: to apples comparison to what you could have gotten. And
34:09
Speaker 15: then that's supposed to kind of raise a question of
34:12
Speaker 15: you know, where the fees worth it? Or was locking
34:14
Speaker 15: up your money worth it, Because even if you are
34:17
Speaker 15: getting better returns in private equity, a lot of the
34:20
Speaker 15: time it might not be worth it if you think
34:22
Speaker 15: it's riskier because you cannot sell out of it, or
34:25
Speaker 15: you think it's riskier because it's using more leverage. And
34:28
Speaker 15: so I think a lot of the quant research is
34:30
Speaker 15: kind of bringing forth to these questions give.
34:33
Speaker 13: Us a sense of what some of these fees are like,
34:36
Speaker 13: because on the public side, it's really been such the
34:38
Speaker 13: story as the race to the bottom in fees, especially
34:42
Speaker 13: with the proliferation of ETFs and other funds that you
34:45
Speaker 13: can get into with passive management.
34:47
Speaker 3: So how expensive is it if you're.
34:50
Speaker 13: An investor in some of these private funds?
34:53
Speaker 15: Yeah, I mean so a lot of these private funds
34:55
Speaker 15: do have a hurdle rate, And interestingly, the hurdle rate
34:58
Speaker 15: is pretty standard, like around eight percent, and that you
35:01
Speaker 15: kind of start earning kind of carry above and beyond that,
35:05
Speaker 15: and that carry has actually increased the steer because we
35:09
Speaker 15: are seeing a bit more deal making pick cup as well.
35:13
Speaker 2: All Right, here's my big issue with private investments is
35:18
Speaker 2: just the marked to market. It's so I think it's
35:20
Speaker 2: just so unevenly applied. I don't feel like there's any consistency. Again,
35:25
Speaker 2: as I was mentioning to Molly, private equity folks are
35:28
Speaker 2: happy to mark the market on the way up, But
35:30
Speaker 2: I don't recall anybody reporting terrible marks in twenty twenty
35:33
Speaker 2: two when stocks and bonds were both down double digits.
35:37
Speaker 6: Talk to us at that part of the business.
35:39
Speaker 15: Yeah, And I think that is the big question right now,
35:41
Speaker 15: because the defining theme of the last two years is
35:44
Speaker 15: that we're not really seeing a lot of exits from
35:47
Speaker 15: PE investments and because of that, a lot of investors,
35:50
Speaker 15: you know, your pensions and your endowments are not getting
35:53
Speaker 15: their cash back. And the reason for that seems to
35:56
Speaker 15: be that a lot of PE firms don't want to
35:58
Speaker 15: sell into this market. They're not getting valuations that they like,
36:03
Speaker 15: even though the market has been kind of going up,
36:05
Speaker 15: And I think that kind of reflects sort of the
36:08
Speaker 15: disconnect here, like maybe maybe private markets haven't really caught
36:12
Speaker 15: up with sort of the twenty twenty two adjustment from
36:15
Speaker 15: higher interest rates here. And so if you actually kind
36:18
Speaker 15: of look at some of these math techniques that's being
36:21
Speaker 15: used to unsmooth the volatility, what you get is actually
36:25
Speaker 15: a volatility level that's very similar to the S and
36:28
Speaker 15: P five hundred. So, but a lot of people would
36:31
Speaker 15: say maybe investors do like the smooth volatility, even if
36:34
Speaker 15: it's not the truth. So that is one sin of
36:36
Speaker 15: code Taque that we hear a lot.
36:38
Speaker 13: What do you hear from other people outside of private
36:41
Speaker 13: markets about some of these math techniques?
36:43
Speaker 3: Do they pass the so called sniff test.
36:46
Speaker 13: You know, they seem legit or cause I guess like
36:48
Speaker 13: for maybe like some where my head is going, is
36:51
Speaker 13: you know the way that companies can sometimes make like
36:54
Speaker 13: really creative adjustments.
36:55
Speaker 3: To what their earnings looks like.
36:56
Speaker 13: And it's like, hmm, is that like maybe just a
36:59
Speaker 13: little bit to Rosie, So tell us a little bit
37:01
Speaker 13: about like what the feedback has been on what these
37:04
Speaker 13: quants are doing.
37:05
Speaker 15: Yeah, I think, you know, using these cont techniques is
37:09
Speaker 15: definitely not the standardier And I think if you talk
37:12
Speaker 15: to a lot of allocators they will tell you sort
37:15
Speaker 15: of the practical side of things, which is that, you know,
37:17
Speaker 15: since two thousand and eight, PE generally has at least
37:21
Speaker 15: on the surface, done better than you know, public markets,
37:24
Speaker 15: and most people are pretty happy with that, and they
37:28
Speaker 15: kind of feel like, you know, even if it is
37:30
Speaker 15: actually riskier, who cares, right. I have a kind of
37:33
Speaker 15: a quote from a guy who's very familiar with PEE
37:36
Speaker 15: where he's like, well, there's more cash coming out of
37:38
Speaker 15: this box, So do we really need to dig that deeper?
37:42
Speaker 15: Do we really need to torture the data? But I
37:45
Speaker 15: think there's also more interest in these methods right now
37:48
Speaker 15: because there's a sense out here that with interest rates
37:51
Speaker 15: higher and kind of with maybe just riding valuations getting
37:56
Speaker 15: a bit more difficult, we're entering into a tougher period
37:59
Speaker 15: for private equity, and so people will actually start to
38:02
Speaker 15: ask these questions, all right.
38:04
Speaker 5: Thanks to Justina Lead, Bloomberg Markets Reporter.
38:07
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