Transcript
Scott Becker (0:00)
This is Scott Becker with the Becker Business Podcast. In the Becker Private Equity Podcast we're thrilled today to be recording with producer Grace Lynn Keller, brilliant producer. Thank you for joining us today, Grace. Today we're going to talk about eight stories that we're following today. We're going to give a quick pre script before we jump into that, the big pre script today. The introduction today is the markets are relatively flat early. We're almost midday to today. The Producer Price Index came in June, really flat which was a really positive indication for the market. After CPI for June, the Consumer Price Index was elevated. So both those things are good news and leave us with a little more comfort that the Fed still can reduce rates sometime this year. Nowhere soon because CPI was up but PPI was soft to down. The third sort of intro story we're following this morning is the big banks and trading firms Goldman Sachs, Morgan Stanley, bank of America all reported really good earnings for the quarter. So that's our introduction today. Now I'm going to go through eight quick stories that we're following. First, five well known companies took it on the chin yesterday. We always find this fascinating. Maybe it's part of Schadenfreude, but, but Here are the five Encompass Health dropped 10.3%. RH the furniture retailer dropped 7.57%. BlackRock, the huge money manager dropped 6%. Whirlpool dropped 5% and finally Albertsons also dropped 5%. BlackRock, the world's largest money manager now has 12 trillion plus in assets under management. It released earnings and what it found was even though its assets under management are growing, its expenses grew more than expected. Third, we'll note three stocks that give us FOMO and these are Palantir up 98 year to date, HIMS and hers up 108 year to date and Bitcoin again just knocking out of the park past 120,000 this week. We'll see where it lands. Third, I am relatively active on X. I, I find to be gamified interesting, a stupid use of my time, all those things on X. You would think if you're not the perfect physical specimen, if you're not the perfect entrepreneur, there's something wrong with you. What I have found is that the reality is that most of us benefit from a regular job and it's not entrepreneurship or bust. Myself personally, I've had a regular job for a long time. I've been an entrepreneur too. The regular job, the relationships, the colleagues, the structure, the stability is so important to my sanity. This concept that Somehow or another it's entrepreneur or bust is just wrong. And I think that for so much of our world we, we really thrive. A good job, a regular paycheck, a regular income and the structure and routine that comes with it. So that's our thoughts on that concept that is so riveting and so discussed often on axed. 4th Stellantis Jeep. They are dropping their hydrogen fuel cell program but bringing back the Jeep Cherokee. This is a company that's been sort of in the woods for months, really in trouble. The Stock is down 27% year to date, but we certainly applaud both of these moves. Fifth, Carvana, which used to be thought of as a smoke and mirrors company, is now up 70% year to date. It continues to move in the right direction. Sixth, mega private equity fund Blackstone is down 7.3% year to date, but for most of the year it's been hovering at 20 to 30% year to date. The biggest bold bracket PE funds seem to be doing better and better. The mid sized fund seems to be a little slower though. One of the ones I work with seems to be constantly raising funds so hopefully they're doing okay. Again they're down 7% year to date, but earlier they're down 20 to 30% year to date, so moving in the right direction. Seventh, we talk a lot in our world about mental and physical health and we're talking about this concept the other day we with part of the family and some extended friends and concepts but. But I sort of view the world in three stages of existence and everybody's built differently but this is me and I have some people this resonates with and they'd love to hear your thoughts. Those three stages of existence are stage one not busy, really slow and I end up being quite depressed and then it's harder to get going again. Stage two is the stage where I view of life where we're busy but not necessarily busy with purpose or busy with intentionality. But far better for me to be busy and then to be depressed. So better to be busy than not busy. Between those two, the third stage of life that I look at is this concept of being busy with purpose or busy with intention. This is as close as I get to the Abraham Maslow self actualization. Again, I spent a great deal of life my currently in stage two, busy but not necessarily as intentional as I'd like to be. Other times busy with purpose. I love that periodically I fall back into not busy and that becomes boring and depressing for me and I've defined myself out of that. The last concept that we'll talk about today, the eighth story is private equity in health care. We'll briefly call this the Good, the Bad and the Ugly. We had published another podcast on the subject, the Good in Private Equity and Health Care. Investing in high margin growth businesses, not doing too big an income scrape and also not over leveraging the heck out of whatever platform or business that you're buying. The second thing, the bad, the bad is investing in lower margin specialties, adding debt on it and finding yourself really squeezed. And we see a lot of that. The third, the ugly, it is killing the company with too much debt. Again, we saw this with Steward Health Care, the hospital chain, 30, 34 hospitals, they essentially went broke. Is the private equity fund overdid the recaps, left the low margin business with a lot of trouble. Again, these are eight of the stories that we're following today. Thank you for listening to the Becker Private Equity and Business Podcast and the Becker Business Podcast. Thank you to Graceland Keller, our producer, for being with us today. Thank you very much.