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- [00:00]
Host
Looking for more investing options? Meet cboe, the exchange that pioneered options trading. With exclusive trading products like VIX and SPX Options, CBO can help you trade in any market environment. There are risks associated with CBOE Company products. Review the disclosures and disclaimers@cboe.com USDISclaimers never bet against American Grit or American Energy through innovation. Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction
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David Katz
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Ryan Reynolds
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Host
That's Venture Global. That's unstoppable energy.
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Seema Shah
Small businesses are the pulse of every community.
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Host
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Seema Shah
tools all in one place.
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Molly Peroni
With that guidance and your determination, you
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Seema Shah
can take your business farther and help
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Host
build a brighter future for your community. Learn more@chase.com business chase for business make
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Molly Peroni
more of what's Yours the Chase Mobile
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Host
app is available for select mobile devices. Message and data rates may apply JPMorgan
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Seema Shah
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Molly Peroni
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- [01:25]
Podcast Announcer
Bloomberg Audio Studios Podcasts Radio News. This is the Bloomberg Surveillance Podcast. Catch us live weekdays at 7am Eastern on Apple CarPlay or Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [01:50]
Host
Let's start off strong here. Get a thoughts about where we're going on these markets. Seema Shah, Chief Global Strategist at Principal Asset Management. She's based in London, but she's getting ready to do like a Midwest America trip. Good for her. I mean, East Lansing, Michigan. I have a soft spot in my heart for East Lansing, the state capital of Michigan. Des Moines, Iowa. Another great town. Seema, thanks so much for joining. You're giving us a little time here in New York City. What's the conversation you're having with your clients as you come through the US and meeting with your clients these days?
- [02:20]
Seema Shah
Thanks for having me. So the main conversation is of course around the Fed. That has to be the key conversation. And actually it's interesting because what we had seen is that over the previous six months there really wasn't a conversation about the Fed. No one was talking about interest rates. And now of course that conversation is completely turned on its head, questioning about inflation, whether rate hikes are coming, and then of course, if the market can digest that.
- [02:43]
Interviewer
So do you think Kevin Wash's biggest Change is more policy or communication or maybe both.
- [02:49]
Seema Shah
I think could be both. I mean, I think communication is obviously at the moment it is the key one and we did see that actually without the communication, the market puts more emphasis on the dots, which is the exact opposite of what he wanted. But I think as we go down the line, as we get towards the end of the year, policy really could have some meaningful changes. So much is going to depend on that task force. So, you know, we're going to be thinking about volatility in the next few months around what happens to rates. But then at the end of the year there's a significant potential for a pretty big market moves around. What happens from those task forces?
- [03:21]
Host
Simon, what's your inflation call these days? We've seen oil come down as it seems like we may have some progress here on some, some peace negotiations in the Middle East. What's your inflation call overall?
- [03:31]
Seema Shah
Yeah, so We've got headline CPI for example, at around 4.2% by year end. The oil price coming down certainly helps. But we do think that there's structural inflation. It's going to come down further through 2027. We do think it gets pretty close to 2% but still above. And the main reason for that is there are some other structural drivers behind inflation which are not going to be disappearing anytime soon, mainly around the CapEx build out. So this is still a high inflation environment. We think that the Fed is going to stay on hold. But I have to say, you know, clearly the risks around a potential hike have increased since last week. And so that is something which is a knife edge for us, I see.
- [04:08]
Host
Man, thank you so much for joining us. Going to go to Switzerland right now. Stephen Shah, Chief Global Strategist for Principal Global Investment. Stay with us. More from Bloomberg Surveillance coming up after this. When your options are limited, so are your opportunities. At ciboe, the global exchange that pioneered options trading, we offer more ways to move with the market from VIX and SPX options to global market data solutions. CBOE helps investors diversify, manage risk and stay ahead of whatever the market does next. CBOE Life is better with options. Your investments could be too. There are risks associated with CBO company products. Review the disclosures and disclaimers at cbo.com usdisclaimers the thing about AI for business,
- [04:53]
Ryan Reynolds
it may not automatically fit the way your business works. At IBM we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slash repetitive tasks and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.
- [05:20]
Host
IBM support for the show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge on public. You can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk, monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors LLC, SEC registered advisor. Complete disclosures available at public.com disclosures.
- [06:35]
Podcast Announcer
You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10am Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [06:47]
Host
David Katz joins as President and Chief Investment Officer, Matrix Asset Advisors. David, how do you guys think about small cap stocks these days?
- [06:56]
David Katz
Well, small caps have underperformed large caps for quite some time, so we think they are due to start to do better. You're starting to see it now. You know, a lot of that has come from smaller AI type plays that have done well within the small cap space. But we think if you look at the next two to four years, if interest rates ever start trending lower, economy starts to pick up. Small caps are selling at a much more reasonable valuation than the large caps and mega caps.
- [07:21]
Interviewer
What to you is the most crowded trade in the market right now? Or should I even ask that? And it's AI.
- [07:27]
David Katz
Exactly. So it's AI, but it no longer is AI like the Googles and the Amazons of the world. It's AI, the semiconductors and those beneficiaries. The pricing has gone crazy. Prices are up 100, 200% as a result. Earnings and profitability and margins are up very significantly for a lot of chip companies and they're being valued as if it's going to stay up there forever. As a result, they're selling at very, very rich valuations. And we think that that's an area to be wary about. We would not be throwing new money into the chip area of AI right now.
- [07:57]
Host
So when you see an IPO, $75 billion of Space X, the biggest of all time and whatnot, you got anthropic in the pipeline, We've got open air in the pipeline. Again, gajillion dollar IPOs. Does that tell you anything about the nature of the market? Is it late cycle, is it frothy? Is it just sign of a healthy market? How do you think about it?
- [08:15]
David Katz
All three healthy? You're able to sell these things. Yeah, but it definitely is frothy right now. If you look at Chachi Beat and you look at Anthropic, they're looking to be about a $1 trillion company. Microsoft right now sells at about $3.2 trillion. There isn't a big moat in a lot of these AI companies. As you see, Claude is now dominating Chachi Beat. Things change. So we think that ultimately you're paying a lot for those companies and we think there probably is better opportunity in the Googles and Microsoft's of the world because you're not getting a a startup at a low valuation, you're getting it at a top valuation.
- [08:51]
Interviewer
You do warn though that AI sentiment could peak before fundamentals. Do you think we're getting close to that point?
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David Katz
We don't know when that point's going to come, but that's exactly the point. Typically the stocks are going to go down three to six months before the fundamentals start to slow. We don't think we're at that point yet, but we do think you'll probably get there in the next six to 18 months. And we think that from a stock price valuation there are much better opportunities in the market in other areas that are not caught up in the excitement.
- [09:20]
Host
What are you doing in the bond market? Do you take credit risk here or do you just clip a 4.2% coupon on the two year?
- [09:26]
David Katz
We clip the 4.2% coupon in two year. We don't think you want to take credit risk and we don't think you want to take duration risk. We focus on one to five years. You're getting a good return. We think ultimately inflation is a longer term problem. The budget deficit is a longer term problem. The Fed losing its autonomy is a problem. So as a result, we're a little bit wary about longer term bonds, short Term bonds. That we think is a lot, that you get that 4.2% return.
- [09:50]
Interviewer
You've been bullish all year mostly. What's stopping you from being even more bullish today?
- [09:56]
Molly Peroni
Well.
- [09:56]
David Katz
Well, we're sort of counterintuitive. The fact that the market's gone up so much this year and the last three and a half years and now sales at 23 times earnings means that there's less upside. We think if the market regresses to the normal valuation that you're more limited. We think earnings growth is very good. An interesting fact, a hyper earnings growth, 20% or more earnings growth has generally not been an ideal market to make optimal returns. Usually 0 to 5%, 5 to 10% better for stock market returns. So the fact that we have great earnings growth doesn't mean that you're going to have great stock market returns, especially going forward, because you've already gotten a year's worth of returns in six months.
- [10:32]
Host
Give us a name or two that you like right now because it's got to be hard to pick individual names given some of the runs we've had. But a lot of names have not participated.
- [10:39]
David Katz
Well, that's the thing. You know, there are certain parts of the market that are very expensive. There are lots of parts of the market that are very inexpensive. So even though we think the market is richly priced, lots of opportunities. We like health care companies like a Medtronic or a Thermo Fisher. Real attractive, we think, you know, also consumer staples, you know, companies like Constellation Brands, pretty attractive. Tyson Foods, which is a protein play, is doing quite well.
- [11:04]
Host
They're getting a protein free studio.
- [11:06]
Interviewer
Protein maxing.
- [11:07]
Host
That's what the kids are doing. It's chicken, it's meat. I mean, what are you talking about? Go ahead. I know you got to go there.
- [11:13]
David Katz
But basically with the GLP ones, yeah, people are not eating as much carbohydrates, but they do need more and more protein. And the fact that you're having problems with the beef market now means more people are going to go to chicken. Tyson food benefits by any of that. And it's selling at 12 times earnings, 3 and a half percent yield. So there are lots of things out there that are good if you have a long time horizon and you don't mind being in boring, boring stocks.
- [11:37]
Interviewer
So much of the enthusiasm is coming from the back of strong corporate earnings. But do you think investors are becoming a little bit complacent about the geopolitical risk coming from the Middle East?
- [11:48]
David Katz
We think so. You know, you still have the Iran conflict going on in terms of possibly a resolution. But you had problems this weekend again with closing the straits, yet stocks are up 16% in the last two months. They're at a higher level than when the conflict started. So we do think there is a lot of optimism and people are ignoring the possible shortfalls. Again, that doesn't mean we're bearish, but we do think that you're going to be in a trading range. We would not chase the market here. If the market were to pull back 5 to 10%, we we'd start to buying on that dip. If it goes up 5%, you'd want to look at things that have done real well and take some profit.
- [12:22]
Host
David, I'm not going to call you old, but you've been around the block once or twice. Been around. Experienced, experienced veteran Alan Greenspan passed away this morning. Impact on the markets in general, the Fed in particular. What are your thoughts as you think about the tenure of Alan Greenspan and the Fed?
- [12:37]
David Katz
He was an extraordinarily smart person, did very good things, different time. He's not been involved, as you know, for quite some time. So it's not going to affect the markets now, but the markets should pay a nice respect to him because he really did a good job and was a really smart guy.
- [12:53]
Host
Absolutely. All right, Dave, thank you so much for joining us. David Katz, president and chief investment officer of Matrix Asset Advisors. Stay with us. More from Bloomberg Surveillance coming up after this. Support for the show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge on public. You can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English, like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk, monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors, LLC. SEC registered advisor. Complete disclosures available at public.com disclosures Ryan
- [14:17]
Ryan Reynolds
Reynolds here from Mint Mobile with a message for everyone paying Big Wireless way too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just $15 a month. Of course if you enjoy overpaying. No judgments. But that's weird. Okay, one judgment anyway. Give it a try@mintmobile.com Switch upfront payment
- [14:39]
Seema Shah
of $45 for three month plan equivalent to $15 per month required Intro rate first three months only, then full price plan options available, taxes and fees extra.
- [14:45]
Wasabi Representative
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- [14:54]
John Micklethwait
How?
- [14:55]
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- [15:52]
Podcast Announcer
You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10am Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [16:04]
Host
John Micklethwait joins us here, Editor in Chief of Bloomberg News. He is in our London office at the moment. John, talk to us about your thoughts here on Alan Greenspan. Such an extraordinary career spanning so many years, so many presidencies and reshaping kind of the Federal Reserve. Love to get your thoughts on Mr. Green Pan and his passing.
- [16:26]
John Micklethwait
Well first, obviously it's a sad day in that respect. I think he Greenspan was one of the great central bankers on multiple different levels. Really very, very intelligent. Also kind of very cryptic in terms of the way he often communicated to people. But I think he also had this very long sort of intellectual history goes back all the way to the fact that he was involved with Ayn Rand and stuff like that. He went through different kinds of intellectual fashions and on the whole he ran the economy pretty well. There will always be people who question how much his loosening set up the kind of financial crisis. But, you know, there were other factors at work there as well. It wasn't just him. So I think he will, he goes as a giant of central banking.
- [17:20]
Interviewer
What do you think is the biggest legacy that he left us with, especially now as the Federal Reserve and questions about its independence continue to hound markets and investors?
- [17:31]
John Micklethwait
It's a good point. I think he was a very strong advocate of central bank independence. I mean, sometimes you forget these things that you forget how different the world was at one time. But the fact that you ended up with Paul Volcker, Alan Greenspan, people like Ben Bernanke afterwards, the whole presumption of what they did was that the Federal Reserve should be separate and independent. In places like Britain, where I am at the moment, that was also a more recent thing. This is not something that has always been there. It's a kind of reputation that has to be built. And it's interesting the way that Jay Powell has managed to sort of defend that, I think actually relatively successfully against Donald Trump's attempts to sort of intervene in that area.
- [18:26]
Host
John, like to switch, switch gears here a little bit and focus a little bit on what's happening where you are right now in Great Britain. Keir Starmer said he would step down as Britain's Prime Minister, paving the way for Andy Burnham to succeed him. John, I'll offer you to just give us a little perspective here. It was just two years ago that Mr. Starmer won the office, seemingly with some pretty broad support. What happened in the past two years?
- [18:51]
John Micklethwait
Well, the interesting thing is that people like me always used to be rude about the attack for their degree of political volatility. But what seems to have happened is that England, Britain has become more like Italy and Italy has become more like Britain, with Giorgio Meloni now holding on to power quite solidly. I think when you look at Starmer, a lot of people, me included, thought that he knew exactly what to do. You know, he came in, it seemed, with a very efficient campaign. He seemed to be heading towards being a kind of Blair Part Two, he seemed to be friendly to business, especially with his Chancellor, Rachel Reeves. And really, I think it shows two things. One is that Britain is much harder to govern than it was before Brexit, certainly. And secondly, that, you know, but it wasn't just that. I think he just didn't come in with an idea about what exactly he was going to do. He was quite sure footed overseas in terms of foreign policy. I think he handled Donald Trump on the whole, relatively well, though. Trump made A predictably catty comment about him yesterday, but on the whole he did that quite well. But at home he always seemed at sea. He got into trouble almost immediately with rather silly thing to do with kind of clothing expenses. He then did this thing to do with pensioners and the winter fuel pavement, which sounds like something rather archaic, but effectively is a way to help people keep warmer in the winter that kind of blew up. But on the other hand, him and especially Rachel Reeves really did quite a lot of damage to the idea that this night new version of the Labour Party was something to get on with business. So he ended up losing on both sides. And suddenly in between this, he started being kind of outsmarted by his own MPs. Normally when you come in with a massive majority, that should be a sign of strength, but in a strange way, that sheer number gave people room to rebel when they wanted to, and that made it very difficult. So, yes, it does show that Britain is very hard to govern. But I think most people would admit that Starmer didn't make. He certainly didn't govern as well as he campaigned to become prime minister.
- [21:15]
Interviewer
And do you think that Andy Burnham, will he be seen as a continuity candidate or a change candidate? I'm just thinking of what the biggest policy differences we could see under a potentially Burnham premiership.
- [21:28]
John Micklethwait
That's a really good question. The answer is we don't know. He's emerging with something that people talk about, Manchester, Manchesterism. And it's a bit like an American governor coming in to be coming into the White House where people try desperately to work out what they did in Texas or what they did in California, and then trying to work out how they could apply that to the federal government. With one massive difference is that when you become president, you have to go through lots of good campaigns and things. In this case, kind of the basic starting point is Andy Burnham has been a successful mayor of Manchester. He had quite a long career in the Labour Party and he's enormously more popular than Keir Starmer. So let's give him a go. But nobody, as you pointed out, really knows exactly what he thinks. To the left, he's saying, I want to take. People talk about the way he sort of nationalized the buses in Manchester to the right. When people talk about mansterism, it's really about quite a lot of doing quite a lot of things with business and working out how to kind of boost growth in that way. And that again, has been something that Starmer has not been good at. So at the moment he is a kind of blank slate which works brilliantly if you're running to be something, because everyone can paint their hopes, dreams, fantasies, fantasies on you and think that you're going to be all these things at the same time. But at this precise moment, what he really needs is a plan and a direction and then say, look, we're going in this way and he really needs to bring the kind of parliamentary party behind him.
- [23:06]
Host
John, thank you so much. We really appreciate getting your thoughts here and your perspective. John Micklethwait is the editor in chief of Bloomberg News. He is in Bloomberg's London headquarters, Queen Victoria street there, giving us some thoughts on the passing of Alan Greenspan. 100 what a nice life there, a full life. And then as well as the latest on the changes in the uk. Stay with us. More from Bloomberg Surveillance coming up after this. Support for the show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the diplomatic, manually sweeping idle cash. Putting on a hedge on public. You can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk, monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory services by Public Advisors, LLC. SEC registered advisor. Complete disclosures available at public.com disclosures Ryan
- [24:46]
Ryan Reynolds
Reynolds here from Mint Mobile with a message for everyone paying Big Wireless Way too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just $15 a month. Of course, if you enjoy overpaying. No judgments. But that's weird. Okay, one judgment anyway. Give it a try@mintmobile.com Switch upfront payment
- [25:08]
Seema Shah
of $45 for 3 month plan equivalent to $15 per month required intro rate first 3 months only, then full price
- [25:12]
Molly Peroni
plan options available, taxes and fees extra.
- [25:14]
Wasabi Representative
See full terms@mintmobile.com innovation is what gets your business to market, and Wasabi is designed to give every business a shot at competition How? Break free from skyrocketing storage costs and unpredictable egress fees from old and top heavy legacy providers. You know the big guys Wasabi is the world's hottest cloud storage company and the go to provider for professional and collegiate sports teams and leagues around the world. And here's why. Innovation From Wasabi's AI enabled intelligent media storage, Wasabi Air to the industry's only cloud storage service with triple protection against cybercriminals, data deletion and ransomware. The world's top companies trust Wasabi. Remember, Wasabi is up to 80% less than market competition and doesn't charge a cent for businesses to access their own data. Wasabi Another championship story. Check them out for free@wasabi.com Wasabi Hot Cloud Storage proud partner of iHeart Podcast Network.
- [26:21]
Podcast Announcer
You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10am Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [26:33]
Host
Let's go back to these markets. We do that with a somebody who does this stuff for a living. Molly Perroni, Partner and president at Yachtman Asset Management. She's a graduate of William Mary University. I was just on the campus of William and Mary a couple weeks ago. Beautiful as ever down there in Williamsburg. It's a great place to visit. Molly. Let's talk about these markets here. You throw a lot a black swan in the form of an Iranian war. You throw all kinds of geopolitical unrest out there, but corporate America continues to come through with very strong earnings. Is it as simple as that?
- [27:07]
Molly Peroni
It sounds simple, doesn't it? It's unbelievable. But these things can go up and to the right for quite some time until they don't. And we've invested through the.com the telecom boom and bust. All of what we saw through the actually it's interesting. The s and P2000 to 2010 was flat. It was like it was flat because they pulled forward all the returns in the dot com bubble and it took that long for the market to actually move up again. It's just we haven't seen that in a very long time. We've instead seen mid-20s returns every year, seems like for several years.
- [27:48]
Interviewer
What about memory cycle? Your notes lean heavily on that. Do you think AI has permanently changed that memory cycle or are investors still underestimating the risk of yet again another downturn?
- [28:00]
Molly Peroni
Yeah, it's a great question. We have a pretty substantial position in Samsung, which we think like we like to do. At Yachtman, we like to get exposure without paying for it. We focus very much on the price that we pay for investments. And here we get to participate in AI without having to pay the multiples that we're seeing in some of the other memory players we're actually looking at. You can, you can invest in Samsung and in three years of their forecast you will, you'll make the market cap. So there is risk and memory. It's historically been a very cyclical industry boom, bust cycles, et cetera, et cetera, until this giant tailwind came along. And it's driving all kinds of purchases. I mean they're taking price, they're booking out capacity, we're hearing things that some customers are even helping to fund capacity build out. So it's quite a big deal. We didn't see that in our thesis. We actually invested in Samsung at the size when we thought it was just a good, really inexpensive memory player. And then this giant tailwind shows up, turns out to be one of the bottlenecks in all the AI build out. And it's a really nice place to be.
- [29:16]
Host
So how do you think about value when you look at an individual name? Is it relative to the peer group? Is it relative to the earnings you guys forecast? How do you guys think about values when you think about entering into a name?
- [29:29]
Molly Peroni
Yeah, we have a really interesting, well, it feels like a lost art because we're actually looking at the business itself. We're looking for what kind of free cash flow does a company generate. And we look back a very long period of time to be able to tell how does it behave in different market cycles and in different kind of economic environments. And so we've got, we've got a portfolio built with companies that we own and we're, and we're, they're kind of, we're thinking as an owner when we make these investments. So for Samsung, when we're looking at a three to four times kind of payback on the total market cap, that's the kind of bargains that we're looking for in the very best names in our portfolio. But it's always looking at forward, forward rates of return, the free cash flow that these companies can generate and how much risk we have to take to make some of these investments. You can think about like a AAA bond. You have very little risk in a AAA bond, so you actually get paid less. Right. But at the same time, if you have a riskier investment, you ought to be paid more in forward rate of return to be compensating for that risk. And that's some of how we've generated our returns through some pretty tough, tough cycles over their 30 year history of Yachtman.
- [30:39]
Interviewer
How are you thinking about diversification within equities and even across that within the fixed income market? Because it seems like it. And harder to diversify.
- [30:49]
Molly Peroni
Yeah, it's a pretty, it's a pretty. There's a lot of crowded trades out there for sure. We're actually, we don't, we're actually generalists. We approach investing like we own the business and, and so we have a variety of different companies across different industries and we actually are quite comfortable taking some outsized investments in companies that we believe strongly in. So you'll see names in our portfolio that are, that are much larger than the rest of the. Because we're looking, we see just sort of an outsized opportunity in those investment pieces.
- [31:20]
Host
All right, Samsung, the high tech. I get that. How about U Haul? That seems low tech, but give us that story.
- [31:28]
Molly Peroni
Yeah, it's pretty, it's pretty low tech. I don't know if you've ever rented a U Haul and took it on the road, but it's, we love it because every time we see a U Haul, a truck driving around, it's advertising the company. And you know, it's, it's like Kleenex, right? These trucks are ubiquitous. They've got like this gigantic network, you know, of different offices all over the country. And then they started building into the self storage business. And the self storage business is one where you have to put in a lot of capital up front. The units are not leased. And so you've got this sort of J curve effect as you get into the self storage business. But slowly but surely, they've been using the cash flows from the truck business to build out what's one of the leading self storage properties in the country. They're not very good at breaking out their product lines, their lines of business, kinds of accounting. So it actually takes a bit of work to really understand the trucking business versus self storage. But based on a recent, there was a recent self storage company, basically the number five in the market. If you apply those kinds of metrics, you get the truck business for free because it's very, it's a very, it's a great business and very much kind of owner occupied because the family owns and controls a huge portion of the company.
- [32:46]
Ryan Reynolds
Got it.
- [32:47]
Host
Molly, thanks so much for joining us. Always fascinating discussion. Molly Peroni, partner and president of Yachtman Asset Management.
- [32:53]
Podcast Announcer
This is the Bloomberg Surveillance Podcast available on Apple, Spotify and anywhere else you get your podcast. Listen live each weekday 7 to 10am Eastern on Bloomberg.com, the iHeartRadio app, TuneIn and the Bloomberg Business App. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal.
- [33:23]
Ryan Reynolds
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Host
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Seema Shah
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Molly Peroni
then full price plan options available, taxes
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Seema Shah
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Host
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