This is Bloomberg Business Wait inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebek from Bloomberg Radio.
And when we're talking about China being the world's second largest economy, and also when you're looking at Bloomberg Economics, really thinking that when you're thinking at the trajectory of its growth not quite holding up as much as obviously
economists we're anticipating. And then also when you're thinking about Tim the liquidity crunch it's going under, when you're thinking about some of those property developers and the pressure that they have been under so significantly, what this could really mean when you're looking at global economic growth and obviously the US economy, which has proven to be pretty resilient.
Here, Yeah, just doing a great job of laying out all the challenges when we do look at China, the world's second largest economy, to get an idea of where China's economy is headed in its effect on global growth. I'm very pleased to have with us this afternoon. Leland at Miller CEO at China page book International. Leland joining us on a zoom from Washington, D C. Leland, How are you good?
Well?
Thank you well, thanks so much for joining us. You might have heard us mentioned earlier this morning that we actually saw Bloomberg Economics cut its long term forecast as the post COVID rebound has run out of steam. This for China, it's pretty remarkable to see this. Just a couple of weeks ago, Carol and I we're talking to some folks who said, you know what, it's no longer a growth story the same way that it has been in China for years, and in fact we could see
higher growth here in the US. That's just not something we talked about a few years ago. Where do you fall, Leland?
Well, it was something we were talking about for the past ten years, but you know, nobody really wanted to hear about it, because you know, the idea was China was growing at eight percent, or they were going at close to eight percent, and most people didn't really see a reason why the economic magic couldn't continue. The growth model had worked up to that point, why couldn't they
still crank out another twenty years at eight percent? I think that was the mindset up until relatively recently when people realize that, look, no one in Beijing is an economic magician anymore than anywhere else in the world. You know, there's subject to the laws of economics. And when they have the system that they have, it's it is structurally pumped up growth for a while, but there's going to be a much more precipitous slowdown on the way down.
So I think, first of all, we have to be ready for very for a future of significant slowdown going forward, a structural slowdown. And second, when you're looking at whether the United States can pass, whether China can pass the United States, or whether it does or not, I think that the issue here is that if Chijin pain falls victim to the mindset that he has to pass the United States, and they do everything that's needed in order to pass the United States in GDP growth, then China
will be going the wrong direction. I think they'll you know, Sheijin Ping will be reversing some of the stuff he's been doing for the past you know, the past several years. It's caused a lot of you know, pressure on the economy, but has been towards the idea of getting dead under control. So to the extent that China passed the United State, which looks unlikely. It's always looked unlikely. But if it does happen, it means Chi Jinping is doing the wrong things, not the right things.
Why is it that the post COVID rebound just didn't hold.
That's a great question. I mean, you know, we were very cautious, particularly early in the year, saying, look, there's a lot that China has to get over. You have to break down the COVID zero administrative state. You know, businesses have been frozen in place for a year now. But even we were surprised at how tepid the recovery was in the second quarter. I think it all comes down to confidence. When you look at what's happening in the economy. Firms didn't like what they were coming out of.
They didn't know what was happening, and so there wasn't a sense of confidence the economy. If you don't have confidence, then you're not borrowing, you're not hiring, you're not spending. There was some of this, but not enough of it, and so you had a sequential recovery and month to month to month throughout twenty twenty three, but it was nowhere near what people were expecting or hoping for, and so people have become very very despondent on what they're seeing in the economy right now.
So Leland, what does this all mean for American investors and American companies that do business or want to do business in China.
Well, I think this is, you know, peace by piece. We have been opening the eyes of foreign investors. I mean, you know, a long time ago, it was it was first it was gepolitics, and then it was the trade war, and then it was you know, COVID, and then it was COVID zero, and now it's you know, low growth after COVID zero, and with with the foreign foreign crackdown
on business, crackdown on foreign businesses. So there hasn't been one thing that convinced foreign investors, foreign businesses that they had to be more careful about going into China. Maybe they didn't want to go there, maybe they had to pull their supply chains out. It's been incremental, but I think when we got to COVID zero, finally, I think a lot of foreign businesses they just said, enough is enough.
We can't operate here. It's not worth it. And you know, we can't be susceptible to having our supply chains severed because somebody decides to do a nationwide lockdown.
But so if you're Nike, if you're Disney, you're not gonna throw in the towel. If you're Apple, yeah, sure you're gonna move your supply chains a little bit. I mean, but that company is just so intertwined with China.
That's exactly right. So what you're gonna do is you're gonna bifurcate your operations. So you're gonna have a China operations, You're gonna have an X Chine operations that allows you not to have supply chains that are that are tangled up. You produce in China for Chinese consumers, if you think that's a great market, then you stay in there and you need to ramp it up. But if you're if you're mostly ramping up for for for for foreign consumers,
maybe you don't run your supply chains through China anymore. So, yes, absolutely, there's companies that don't have that absolutely don't want to pull themselves out of China and won't, but I think they're they're they're changing their approach and how they treat the China part of the equation.
How concerned are you about China's property debt crisis.
I'll be real provocative here and I'll say I'm not concerned at all. Not that things aren't a mess. I just look, we spent all of August. Everyone supposed to be a VACA. We've spent all of August listening to people say that China's collapsing. Emitt hard Landing. We had a lot of people worried about that, had a lot of notes going out saying, look, China is not collapsing. Here's what's actually happening. It's not that the property sector
isn't a mess. The property sector is a mess. You've got a big shadow bank that's wobbling right now in Country Garden, which you had two years ago in Evergrand. It freaked everybody out. A lot of problems the property sector. But China is not a typical economic system. It is a non commercial financial system, which means they're much less susceptible to things like a limit moment, like an acute crisis.
So you have the ability to do things in a non commercial financial system you can't do in the West. You can't do in the US can't do in Europe. And so the idea that this is going to create some sort of sense of financial contagion and just roll every everybody over very very unlikely. But it does cause stresses to the system. And I think that it's happening right now because the Chinese government is allowing it to happen.
When it starts looking like guess could go out of control, then they step in and and and they ease conditions a bit.
What are they going to do in terms of stepping in? I mean, are you talking the question of moral hazard here, like they're not going to let anything fail?
Well, I think they want to. They want to. They know that they are creating very very difficult conditions inside the inside the property sector. What they want to keep the problems inside of property. So you want to make sure that financial contagent is it's spreading to other areas of economy. You want to make sure that cash flow doesn't completely freeze up. Uh, And so that's why you're
seeing easing measures right now. So, I mean, we have a fiscal activity index we track and monetary stimulus index we track, and we could see that as they are pushing harder on some of these issues, like you know, the resolution on these shadow banks, and and and and as property continues to deteriorate, then they step in and they give it a little bit of juice on the side. And so there is there is a you know, a
push and pull on these things. But in terms of a bank, a big shadow bank falling in it causing the system to fall apart in a domino effect like we saw with Lehman, that's not going to happen in China.
So what are their corners within the economy have been able to offset those concerns when you're talking about when you're looking at what's happening with the property debt crisis not being as big of an issue as maybe people are thinking at this point.
Well, one of the problems is you haven't had real strength anywhere else to compensate. So if the conversation right now is you know, are things going greater are they going not that great? Then a difficult you know, it's a difficult thing to hash out. But you know, luckily for us it's been very easy because the question is is China growing or is it China collapsing? And China's clearly not collapsing. I think the whole thing is ludicrous.
That that is the sentiment people have right now. If you look at what's happening in the manufacturing sector, it's actually held up much more impressively this year than we thought it would. You've got enormous headwinds. You're coming off three years of gangbusters growth. It's manufacturings holding its own. Is it doing great? Is it doing twenty twenty two?
Low?
It's not doing It's not what it was, but it's doing okay. It's not a huge weak point. The consumption parts of the e conoity. We look retail and services, are they doing great?
Well?
Parts of services are, but overall doing okay, you know, very uneven. So they're not a real bright spot. It's just you know, you're not seeing great stuff out of China. You're not seeing good data, but you're just not seeing anywhere near as negative a story as a lot of people think is happening inside inside the walls of the economy.
Well, hey, just before we let you go, Leland, talk about political implications here she as president for life, as said in the past, any political implications in thirty seconds.
This is she's show. So we can you know we spend a lot of time talking about how you know, four investors say, oh, Shei Jinping would never do this because dot dot dot. I think after a year of COVID zero we have we should be coming to the conclusion that there is nothing Chijin Ping won't do simply because we don't think he'll do it. It can be very humble in in evaluating where he's taking the economy, and it's in a very different direction than than he ran in the past.
All right, we're gonna have to leave it there. Thank you so much for taking the time this afternoon. That's Leland Miller, CEO at China beij International, joining us this afternoon on zoom from Washington, DC.
If you're listening to the Bloomberg Business Week podcast, catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, or watch us live on YouTube ZIM.
We all know how much AI is all the hype.
I mean, just look different. Vidia is here to date increase of two hundred percent or.
More exactly, though questions do remain about what this all means for cybersecurity, particularly in the workplace, especially since generative AI applications continue to evolve. So we have Dana simbercov chief Risk, Privacy and Information Security Officer at a Point, joining us on Zoom from New Hampshire to explain why the cybersecurity industry isn't ready for the AI boom and what guardrails companies should use to protect their employees. Dana,
thanks so much for joining us. As always, I want to get your thoughts on that because when we are discussing, like Tim and myself about this AI boom, why is it that cybersecurity companies may not be ready for this just yet.
Well, thanks Jess and Tim for having me this afternoon. Great to be with you. I think AI is just yet another obstacle in the road to looking for that
perfect security solution that just doesn't exist out there. Honestly, so, artificial intelligence and sort of the leap learning that is coming through technologies like that GBT really puts cyber professionals on edge because this is just one more ripple in the world we live in where cyber professionals have to be right one hundred percent of the time and bad guys only have to be right once in order to get inside of your defenses.
And there's a shortage of bad guys out there, Dana, as we as we certainly know. So what's the worst case scenario here? I mean, describe for us what kind of keeps you up at night, makes you scared.
Well, I think that really the secret to building a good program and addressing this is really to go back to cyber hygiene basics, doing what we do every day, which is making sure that we have good data governance in place within our companies and across our partner ecosystems. Because if you know what information you're handling, if you know what it is, where it is, who can access it, and how it's being shared, then you can largely mitigate
some of the risks that are associated with AI. So at the end of the day, it does oh no, continue, Well, I was just going to say, at the end of the day, it does come down to people, policy and technology. So there really is no bad technology, just bad use of technology.
And when you're talking about cybersecurity, are there particular sub industries or companies that you think might potentially be more vulnerable than others?
Well, I certainly think that the ability for or again those malicious bad actors to use AI to potentially perpetrate cybercrime, take advantage of insiders inside of a company to really accelerate the process of cyber attacks. We've already seen through phishing and smishing, where somebody receives a phone call or a text message saying that they are an executive that
need help right away. Just imagine that amplified with the ability to actually, you know, fake person over video, these deep fakes that we've been hearing about where a person's image or voice could be easily replicated data.
You said phishing. We all know about phishing. Did you say smishing?
Smishing, Yes, that's smishing is using a text message or some kind of social media. So whether it's WhatsApp, your phone, or you know, just pretending to be somebody that you're not and using technology to get to an intended target.
And this is really common. We see it a lot both inside of our company is you know, as we build our own cyber defenses, but also across our customer ecosystem, where it really isn't just what you know, but who you are that makes you a target potentially within a company.
Yeah, I didn't know that what it was. That's what it was called. We had a great cover story an excerpt from Zeke Fox's forthcoming book Number Go Up that talked all about where those text messages actually come from. I also encourage everybody listening who's interested to go check
that one out. It was just a couple of weeks ago. Okay, So, Dana, what about when it comes to I mean, when I think about the worst case scenario, I mean, I understand, like, I consider myself pretty savvy when it comes to, uh not answering those phishing emails, And we certainly get trained pretty well here at Bloomberg, and I think a lot of companies do that in this day and age.
Even do some trick emails at times just to see if we get caught.
Yeah, they do. You got to you got to be vigilant. I think my concern though, is is is how generative AI sort of changes that, and it makes it so it's like really not possible to distinguish what is real and what isn't real. So so let's say that the weakest link is always the person. Where do companies like afpoint come in to try to stop that from happening?
Well, I think at the end of the day, it really is going to come down to not only identity, but also technology and what we allow individuals to do. So just in the same way we've been talking over the last really couple of years with COVID about now the borderless office, where employees are working really from anywhere in the world, they're home, Starbucks, you know, the office.
That means that there's no perimeter around the office that you can protect, and so identity really has become that new perimeter to a great extent, and making sure that you know who you're talking to and who you are is going to be critical. And limiting the ability for somebody to move either horizontally or vertically within a company if they are impersonated, is going to really help sort of fill that gap and protect against that kind of risk.
We actually did hear from z Scaler after the bell. They did report earnings and there are forecasts for EPs to beat estimates. But of course, when it comes to a cloud cybersecurity company like this, and I have to note it stocks up more than five percent, and after I was treating how does cloud play into this? And when it comes to AI as well, in some of your concerns.
Well, cloud is both an opportunity and a risk. That certainly a point as a as a cloud first company providing services to you know, millions of our customers around the world, takes advantage of a lot of the build in security controls that exist through our partners like Microsoft and others. There's also real opportunity with AI and the cloud to benefit from you know, the kind of machine learning and intelligence that could also be used to fight cybercrime.
So I think there are tremendous opportunities that the cloud brings a really at the end of the day at somebody else's computer, and so that good data hygiene data governance is going to be critical to making sure that whether you're in the cloud or on premise, that you're really doing the right things to protect your business and your data.
Is there a future for on premise or is it all in the cloud?
Well, hard to say. I think, you know, the cloud is certainly the future. It's it's the wave, it's the direction that we see companies moving more and more. I think that there will likely always be some hybrid environments and depending on your industry, depending on the kind of information you have, cloud is not always possible, but we'll see.
Now.
You never say never, and I think it's always good to head your bets.
Whenever you speak to companies, what is their biggest concern right now?
Well, again, I think it is knowing where that data is. It's that unknown, that risk of not knowing is never better. And so you know, the challenge for AI is clearly that you can have a machine outpacing you rapidly. We now see that our computers regularly are asking us to prove that we're human by answering thinks like captures when you go to websites, Will computers outpace humans at some point? Maybe?
I think again, for cybersecurity and privacy professionals, it's building accounted into the way that we use data, making sure that there's good transparency with our customers, and making sure that we're really, you know, doing the right thing to maximize the opportunity for businesses to do what they should be doing while protecting the rights of individuals and data subjects.
I don't know, just do you have any ever have a problem with those captures. I feel like they're they're already the captures have already outsmarted me. I mean, you know, what I'm talking about. Write those things.
Yeah, come on, I.
Mean, I mean, I honestly like one time I got one of those Bloomberg emails and accidentally clicked it on something. Then I had to go back through and do all of the training. So I'm super vigilant now.
And not to busted. You only make that mistake once.
I know, exactly, so never again after doing that.
Well, that's that's good. That's good hyber training.
It really is.
Yeah, we have we have some pretty uh you know, and you gotta it takes a while to do those trainings too. Exactly for the last day, Dana, I'll tell you that Data Simberkoff really appreciate you taking the time. She's chief Risk, Privacy and Information Security officer at a point joining us on Zoom from New Hampshire this afternoon.
I think there's a lot of questions about what the future of sort of the hybrid cloud is, Jess, And you know whether or not what's on premise and what's not on premise, especially with the multinational companies where those servers are based. You see that certainly with you know, tech companies that right you know, required to co locate servers in certain countries and then those servers and that information is under the jurisdiction of that area, so it gets really complicated.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern on Bloomberg Radio, the Bloomberg Business App, and YouTube. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.
Tim.
As you know we discussed earlier in Today's Big Take with Bloomberg's Matt Boyle, workers in Asia and Europe have largely returned to offices at a faster pace then their American counterparts more than three years after COVID shifted corporate life. Now, US employers are demanding a workplace reset, and they want it now on everything from action on societal issues and
work life boundaries per Edelman's latest trust Barometer reports. So who better to walk us through this latest report back with us again is Richard Edelman's chief executive officer at the firm, who is joining us on zoom in New York City to discuss these latest fightings. Thanks so much Richard for chatting with us again. Walk us through what you think are the biggest takeaways from these latest figures that you have.
I think the first important finding is that my employer is substantially trusted more than any other institution. So trust is local in my CEO and in my company's ability to make change twenty five points higher than the other institution, sixty points higher than government in terms of ethics. The second big finding is the trust gap for so called deustless workers. In other words, people who are either on the factory floor are operating as sort of independent contractors,
they have substantially less trust in institutions. The third big finding, which you led the broadcast with, is workers want a reset. Two thirds of people say I want to change my work life balance. This is a three years after COVID kind of reaction saying, you know, I'm not so fast, folks.
Are they? Richard still in control though? I mean, yes, we're still adding over one hundred thousand jobs each month here in the United States, but we're not hearing from executives to the same extent that we were in the last couple of years how much trouble they're having finding employees who's in the driver's seed.
So employees think that they are because they're saying, by six to one, seven to one, I want my CEO to speak up on societal issues. I expect that, in fact, you're going to listen to me when I want to make change. I expect in a sense sort of a
partnership as opposed to a class employer employee relationship. But this is being sorted out because the employer has the tightrope also of don't get into politics and you know, be careful on especially in the US, on steering clear of you know, electro politics or you know, things that will get you into trouble.
When you're talking about work life boundaries, what specifically are employees looking for.
Employees are looking for, in a sense, a new compact that says you'll listen to me, you'll come visit me on the factory floor and get my input.
In fact, the.
Deskless worker who actually feels very disconnected is connected if the company trusts them, so that that matter of going out and listening. But also we want to hear in the halls of power the voice of our CEO expressing our views.
Does this change based on the type of industry that the company's in, like you know, if you're working for one company and in one sector versus a company and another sector, is it is it different?
I think in tech and financial services it's sort of the counter positions. But where financial companies are really ordering employees back. The CEOs of tech companies because they have you know, talents and or remote programmers theoretically can work solo.
But sorry, Richard, I mean in terms of trust.
But what we found in our own company, trust is made up of four things ability, dependability, integrity, and purpose and the ability to come together in the office I think gives some sense of culture and also some sense of shared purpose. So you know, we're encouraging the hybrid structure, and several of our clients are following suit.
Huh, Tim and I have been discussing a lot this afternoon with this theme about especially when we're talking about the US and employers trying to get their employees back into the office. What do you think is the catalyst
that change? That is that a potential because we don't see a recession on the horizon, but at a particular point in the business cycle, if you do see that shift with the slowing economy and then job cuts are coming is that the shift that employers think could potentially shift the power there.
The power struggle is a standoff, and the smart company will find a way between and move gradually if that's the direction. But what employees really want is to feel as if they're getting value from their employer, that the employer's listening, that it's not going to go back to the pre twenty twenty method of talk down to me. I want to be represented, I want to be heard.
I want to feel as if I'm making change. By eight to one, people say I'm prepared to come to work for a company if that company stands up on human rights, or on sustainability, or on race and diversity. So that matters.
So when it comes to thinking about what this what the takeaways are for leaders who are listening to our program, who are watching our program right now, you what have you learned in the years that you've been doing the trust barometer and how it's changed, because I got to tell you, you know, last couple times we've had you on it's been similar findings, Richard, that the company is the one where people, you know, people trust as an institution
more than government. So what's the big takeaway for executives listening.
My employer is so much more trusted than any other institution. There are huge expectations of you in satisfying what an employee wants from a societal point of view, work life balance. It's complicated by the reality of politics in today's world.
So I would identify the three or four key issues on which I'm going to speak which have to do with your own values and your core competencies, and they're probably in the area of sustainability, diversity and inclusion, geopolitics when it matters like getting out of Russia, and lastly
wages and reskilling. On the other issues, talk with your employees, talk internally, but be careful about what you say in a public sense as an advocate, because again you'll get right into the R versus D and the differences could not be more stark.
Yeah, that's certainly an area where I mean, you know, you don't want to bring that up when you're with new people you meet her or in the workplace. Right religion and politics, right topics. Richard Edelman, we love it when you joined us CEO of Edelman joining us on Zoom from New York City. Some really interesting findings in this and you know we have Richard join us. We
haven't joined us. Several times a year often he joins us from Davos where he is the World Economic Forum, and you know, talking to these leaders, Jess, who are making these decisions about the ways that they run their business.
The journal. No, no, no, j honey, Please, I'll travel.
I want to drive.
It's good question.
This is the drive to the clothes.
On Bloemberg Radio.
Well, it is that time time for us to drive to the clothes. We are just shy at eighteen minutes until the US markets closed here in New York. Very please to add back with us this afternoon. Abbe Deschaponde, Founder and chief investment Officer at center Stone Investors. Abbe joining us on zoom from New York City. Abbe, how are you.
I'm doing well. Unfortunately summer's over.
But is it? Though it's still so hot and it doesn't seem like everyone's back to work, does it? Is this summer over?
Oh?
Covid era, right, yeah, exactly. We've talked a lot about that this afternoon.
Uh.
Hey, we love talking to you because you always come with some great picks. We're gonna get to those in just a minute. But first I want to start with with Mac because you're kind of in a different different camp. You're not really talking about a soft landing. You argue that a mild recession could be coming.
Yeah, I mean very functionally similar though. I mean I'm not looking for like a huge two thousand and eight or nine or even twenty twenty ish decline and economic activity. But I mean it's hard to argue that with the kinds of interest rate changes that we've had and the wild sort of spending spree that we were on that that there shouldn't be a period of retrenchment. I think there definitely will be, seems to be already started, have
already started. But whether that evolves into something, you know, that's the end of the world, I just don't believe it. But I guess, as a famous person once said, the future is uncertain.
So what would be the catalyst to have growth slow down? I'm looking at the ECFC function in the tournament that obviously looks at the aggregate for economists, and they don't have a quarter of for quarter contraction anymore for the remaining quarters this year.
So so this is one of the issues is that when we talk about the economy we're talking about. You know, well, in the United States, a twenty trillion dollars behemoth. Economies are adaptable, they're you know, they're that they're they're dynamic organisms, right, So it's very rare for the entire economy just to just implode. It's just too big. They're twenty pieces and
to twenty slices. So what we're I think the nuances parts of the economy can slow down enough to give the impression of a from a macro standpoint, a slowdown that would qualify as a recession. That would be like a zero percent, you know kind of growth rate. Where where I have trouble, like most people seeing a major problem is you know, is employment. Well that really turn out with all these shortages and labor shortages we've had we have, it's hard to see like a huge, uh,
you know, labor problem. And then at the same time, you have a lot of stimulus and a lot of the that five hundred billion dollars really hasn't gone through the system yet from the i RA. So there's plenty of stimulus. There's you know, the at least fiscal stimulus. The monetary stimulus has obviously been tightened. But I mean, you know, anecdotally many many, if not most, households refinanced at very low rates just just a couple of years ago.
I mean, there's there's not as much of a direct impact like this was a four or five year economic cycle. I think interest rates would have much more of a kind of impact. But households are turned out where it's where you can see the slowdown occurring. It's in this it's in the lower end. And we see this, and you know the results from companies like a Dollar General, which we recently began to purchase, where that consumer is hurting from the interest rate increases. But you know, it's
a smaller segment. It's a lot of people obviously, but it's a smaller segment for me as a proportion of the total you know, spend in the economy. But you know, you can definitely see that there's there's slow down here and there. It's just I don't and most people probably don't believe that there's going to be a direct hit
to the entire economy. Those types of you know, where the economy quote unquote like uniformly succumbs to weakness, that's that tends to be led by a financial you know issue, you know, like a banking crisis like we had fifteen years ago.
Just what about what about a regional banking crisis?
I mean I had had an issue for a brief moment of time in that region. But I was just talking to some mortgage brokers the other day, and the banks are lending. The banks are lending freely, even to the distressed homeowners for doing the home equity by lines of credit, for instance, to pay off higher interest car loans. I mean people are getting by somehow.
Okay, I'll be I want to talk about some of the picks that that you brought with you. I want to start with a company that I don't get to tell about much, but I'm a cyclist and I saw Shamano on your list and some people might know it as a fishing tackle company, some as a bicycle component manufacturer. Why is Shamano one of your picks?
You know, that's the like. So a lot of companies went through COVID and had a huge you know, biking became very popular during COVID because of an outdoor activity, and so that a big spike in demand. And now you're seeing the other side of that. You know a lot of businesses have too much inventory. Retailers have a lot of inventory a lot of different things, and especially bikes. So there is a you know, this this issue kind of cycling through quote unquote the industry, and Shamano's not
immune to that. Now that said, Chamano's a one of really two brands in their space. They kind of more or less dominate the bike parts business. These are derailers, brake parts and things that you see in a bicycle, and typically people suspect the bike with the parts. The parts are actually more important than the bike in a lot of cases. So it's a it's a branded good,
it's a it's a franchise. And where there's been technological development like electronics, shifting, shifting and whatnot, no, Shamano's led that. So to me, it has all the hallmarks of a franchise. And in addition, which is somewhat still unusual for Japanese businesses, they're very shared work oriented. They buy back stock, they be a dividend, They understand what intrinsic value is for
their own business. And as a consequence, we have a great deal of faith and management to be able to manage through this type of cycle, and since it's a franchise, we're more than willing to give them time.
We have about a minute left. But Ryanair and Porsche also on your list. What do you like about them?
Well, right here, these are both I'll tyke yiner first. Or like Shamano, is a brand is a brand?
Uh?
Now? Unlike Shimano, Ryanair's developed their brand by being the lowest cost provider and basically commodity industry, which is airlines. And they've done that by logging in gates and routes to two airports that are off set out the outside the city center. And they've done that and have been able to provide the lowest cost airline ticket for for
European travelers. That's a business that, because of the cost advantages that they have, seems to gain market share every time there's a weakness, and then when things rebound, they have emerged with greater number of gates and their routes expand. As a results, they just continue to gain market share. As much as you can be a franchise in the airline industry, they've got them and it's very unlikely that
anyone can displace them. So let's you know prime the primary reasons and again good management, good business model, and the balance sheet is very solid to They own all the airplanes, which gives me se comfort. They're not sitting their releasing them.
We love it when you join us. That's Bish Bonde joining us from Centerstone Investors. He's the founder in CIO at the company. Joining us on zoom from New York City.
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