Compass Pathways CEO on 'Magic Mushrooms'

dot com. If you can also listen to our radio show at two pm Eastern on Bloomberg Radio and be sure to watch us too on YouTube by searching Bloomberg Global News. You're listening to Bloomberg Business Week on this Tuesday. I'm Carol Masser. So we talked about New York City's covin I team positive test rate over seven day periods staying below a threshold that would trigger shutdown of schools.

That's good. We did see groups representing you as doctors, nurses, and hospitals urging President Trump to share information about the administration's coronavirus response with President like Joe Biden and his transition team. We had Germany warning and glamrkele that Germany remains very serious, but there is some optimism that an economic recovery will gather pace once the pandemic is brought

under control. There's a lot going on global cases. My meantime, they're topping fifty fine point one million when it comes to COVID nineteen deaths one three million. Back with us for our daily virus update. Dr David Levy, the CEO of the healthcare company E h E Health, and he joins us on the phone in New York City. Dr. Leaving, Nice to have you back with us. How are things going, What are you seeing when it comes to the virus.

Thanks so much, Carol's great to be back. Well, you know, we basically have around the rest of the country and explosion of cases, and they're creeping up in New York. We have some great silver linings on their horizon with respect to both vaccines and the advent of antibody treatment

monoclonal antibody treatment. But in the meantime, from now until the end of the holidays in December, we've got to keep focused on what I call public health one oh one masks, social distancing testing, positive contact tracing, and positive people quarantine. It's as basic and as simple as that, and it's the thing that's right at our hands to be able to do with actively. Yeah, I mean, listen, you know, we all know what it is, right, social

distancing and wearing masks. It gets tougher. Though. I think it's fair to say that once everybody has to be inside, you can't be outside like you were maybe over the summer. Correct. And I also do think that there's something now that we're what eight months into this, there's pandemic fatigue, and I think there are people who who you know, left brain, right brain. I understand this is what we need to do, but I'm exhausted. I'm tired of this. Yeah, so we're

all exhausted. You know. We see it at our own company, we see it at our clients companies, we see it everywhere. And all I can tell you it's a leadership to get out there and to keep on pushing people to the finish line, pushing them to the finish line. We will get to the end of this. I am confident of that this is going to start looking much much better with the turn of the year, and we just have to keep on strong right up to the end.

And there's there's no other answer for it. Frankly, at the moment, well, And it's interesting that you say that too, um at a time when I just read a headline kind of leading into you out doctors, nurses, hospitals urging the current administration to share information about the White House's

coronavirus response with President elect Joe Biden's transition team. How do you s someone who understands this virus in the medical community, understand the frontline workers who are constantly putting their lives at risk and watching these cases that are you know, increasing around the country, around the world. How important is it that this transition just when it comes to COVID nineteen be smart, go well, and that there are no laps, right, that we just kind of are

as seamless as possible. Well, just to give people perspective on what we're looking at with respect to the advent of vaccines and antibodies, you're talking about two specific treatments of vaccine which creates active immunity, which have focused just

on the vulnerable population. And when we're looking at efficacy, you're talking about bringing down the entire lethality of this epidemic just probably focusing on the vulnerable population somewhere not that much different than generalized influenza, and that's without her immunity. It's just focusing on the vulnerable, vulnerable people. The same

thing with anti the same thing with MONOCOLI anybodies. This is an anti viral therapy which has about a seventy percent reduction in admission rates for folks who are at risk, namely vulnerable populations. That can bring the case fatality, the lethality of this epidemic down significantly to be just a little bit above uh one and a half times a general flu epidemic, or a little bit a little bit higher.

So the idea of getting these two new therapies, or these two new strategies to vulnerable vulnerable populations relates to two things. One is obviously supply, then distribution and access. And if we don't have all of that seamlessly coordinated, we're going to miss an enormous opportunity to significantly drop fatality. That, by the way, is without getting into the whole distribution of and the ramping up of testing masks and ppe, which is basically back to the you know, public health

one on one issues. But boy, with these two new therapies coming down the pike, if we are not seamlessly coordinated, we can lose a major opportunity to have some serious impact. Carol. If this was a baseball game, where are we in terms of innings? Seven? Oh, that's positive. Yeah, well, I'm I'm optimistic. I mean, there could be extra innings. So and I'm not trying to be funny here, but we're going to have a rough seventh and eighth. But uh,

and I say that to the end of December. But I really believe that as these things come online, we're going to see really a significant change. And and honestly, I don't see how we can start enforcing some of this mask ging more seriously across the country as well. Should we have a mandate, Should we have a mandate come down from from the typical government. There is no downside in my view to a mask mandate. I'm in

I just if this is not rocket science. Uh, this has proven you can see the numbers some people project perhaps reduction and spread just by wearing masks. This should be a no brainer. It's absolutely and this is not economic shutdown. It's basically just putting on a mask. Uh. You know, I think it's a patriotic thing to do. Quite candidly, Yeah, No, no, No, I get it. It's funny too. And we've all had conversations at home at work about how it's just become kind of so normal

for so many of us. And I think if you've been in one of these major cities where you've seen the impact of it, it's like putting on a seatbelt when you get into a car. You know, it's interesting. In New York, it's not an issue. Everybody wears a mask. Everybody gets it. And frankly, I think it's because of the horrific spring we had and you know, one and three and fifty New Yorkers died of COVID. People get that. They understand that it was over ten times out of

nine eleven. So we wear masks, no problem, we get it. I just want to talk to you a little bit more about COVID nineteen, Dr Lee, because I did feel like, you know, you gave us a little bit of a timeline and not a little bit you gave us, you know, saying we're in the seventh inning. Uh if this was a baseball game, but you said the seventh and athennings are going to be pretty tough. But the difference between now and let's say a few months ago, perhaps are

at the beginning of this pandemic. Is that the vaccine developments that we've made progress, Yeah, for sure, of the vaccine as well as the new um anti viral medications and monoclonal and polyclonal antibodies, one of which was approved last week. So that's been basically a story that hasn't been told enough, but it's going to be a very significant impact, we believe. Why is that so important in addition to the vaccines, Well, um, to have a drug that you can give when you're just mildly ill or

moderately ill. It's kind of like an antibiotic when you show up to the bacteria, when you show up to the hospital for the bacteria, and the moment you get a shot of penicillin and you don't have to get admitted to the hospital. Well, this is kind of like the same thing. It's in a few an infusion, but it really takes down the chance of being admitted with the serious illness. And frankly, that's exactly what President Trump got from the General and exactly what Governor Christie got

from the from Lily. So these medications are highly effective and when targeted and vulnerable populations can have a very significant impact, and you have to do it early. Correct, Yeah, milder, moderate symptoms and vulnerable populations. The problem with that strategy isn't actually it's effectiveness, it's it's supply and distribution. Uh. And we're actually probably going to see in the next few weeks and months we'll see infusion centers pop up

all over the place, right exactly. Well, that that begs to that bigger question of the supply chain, whether it's the vaccine or whether it's these anti viral treatments, right. Uh, these are not things. I know the vaccine makers, the big farmer companies, I mean, they certainly have been working towards this, they've even started manufacturing it. But this is going to be huge, the logistical side of manufacturing it and then getting it out, the vaccine or even these

viral anti viral treatments exactly. And that's back to the issue why you need such close coordination between the outgoing and the incoming administrations. I Mean, this thing has to be seamlessly coordinated, otherwise people will die, no question. All right. One thing I did want to ask you too, is what are you seeing when it comes to people coming in and doing some of those preventive routine treatments. Have you seen an increase in people feeling more comfortable about

coming back to the doctor's office. Yeah, we provide preventive health services around the country and what we and for for large employers and for their employees and spouses and families, and uh, we actually were caught by surprise how engage people were once we reopened after the lockdown, because people have begun to understand that that much of the co more bid conditions affiliated with COVID nineteen can kill you, and those are all lifestyle illnesses overweight, high blood pressure,

diabetes and the like. Getting those things under control have meaningful impact in this pandemic, and so we strongly believe

that that's a great reason to get back in. People are figuring out that they're not going to get COVID at their local hospital or their well managed doctor's office because appropriate precautions are being taken and reducing comorbidities is a hugely advantageous thing to do, and it's something that everybody can do today without without any big dispute on whether there's going to be a good outcome doctor leaving.

That's a great thing to do. That I just wanted because we just only have about forty seconds left here, I just want to follow on that. I mean, what is one thing that we could change or mandate because we do know that, you know, taking care of your health, wellness, weight, these are things that really impact your outcome in any health situation. How do we change that? How do we change the trajectory in the trend line just quickly? Well, in the end, I mean, you can force people to

do what they don't want to do. I think that frankly, educating the public about how important lifestyle is UH is probably the most important thing. You know, I call it. You know, COVID compress this time, your overweight, your diabetic, you're hypertensive. You know you may not have tender fifteen or twenty years anymore to hang around and wait till those things impact your end organs, your organ You know,

this could hit you right away. So I think the most important thing is education and awareness and getting people to know and to understand that they can do something about it. Yeah, it's a big issue, no doubt about it, especially when you look at things like the diabetes numbers in the United States. Dr Levy, Thank you so much. Nice to check in with you. Dr David Levy, CEO of e h E Health Training us on the phone in New York City. This is Bloomberg Business Week with

Carol Messer from Bloomberg Radio. Well, you've watched this company's videos. I know I've treated out several. I actually went down a rabbit hole today watching them all over again because I've watched Spot the Dog running Cheetah wildcast. There's also Atlas the Dynamic Humanoid. We're talking about the cutting edge of company that puts out those robotic x you know who they are. We're talking about Boston Dynamics. They've really become part of our pop culture, which is about it

looks like to enter a next chapter. Sarah McBride writes about it for Business Week, venture capital reporter at Bloomberg News, and she joins us on the foot in San Francisco along with Bloomberg Business wee get to Joe Webber, Joel, how much time do you spend watching Boston Dynamics videos? They creeping out a little bit, so yes, that's fair. And this is a rabbit hole or like a robot hole,

so so yeah, I mean I think. You know, these videos of Boston Dynamics robots have been sort of Internet sensation for basically as long as they've been making those robots, and they can do some interesting things like climb stairs and up and tours heavy things, and you know, and you know in Asia you see them during the pandemic and they sort of you know, bar constructions that people to stay away from each other and that kind of

stuff that you know. The interesting thing that Sarah brings out here is like you know, for all of those great Internet videos and everything, like, yeah, there's a there's a kind of a lack of a business model underlying it, and that's actually led to some turmoil, not only a Boston Dynamics and that sort of gets to the heart of the story because Boston Dynamics in this whole division have actually been up for sale and they might catch some big money. Um how much money and who's buying

so well? Um, Apparently Hyundai Motor Corp. Has been talking to Soft Bank about buying Boston Dynamics and that would be a price tag of around a billion dollars, I'm told, which sounds like a lot for what for many years has just been a vanity project. But Boston Dynamics says it's getting to the point where it's robots can do some pretty practical things. And um Hyundai actually has a

walking car division. If you thought the Boston Dynamics videos were terrifying, way tweet some of the walking car videos. And so who knows. I think guy saw that movie. It was called Transformers exactly. But it's like, but it's amazing too. Like I had my producer, um Ario Gomi, he like went online too because we were talking about the robots, the robots, the humanoids that we're cheering at a baseball game. Yeah, this summer, no human fans were allowed,

but robots fans were allowed. And Stuffink owns a ton of robots companies, not just Boston Dynamics. So they mixed up some spot dog robots from Boston Dynamics with some of their others and had them cheering on the sidelines, wearing baseball caps and singing fan songs, eating hot dogs, having a beer. Now not so much, it's really I mean,

there are practical things that these robots can do. But the company says it's next generation of robots which will handle logistics and work in warehouses are the one that are going to be super practical, and those are called handle and do a lot of things which don't sound that tough, like taking boxes off of trucks and loading them onto palates, but apparently are very complicated for the types of machines and factories to do. Now that's where

they say they'll really shine. So thing ingredients all of this sarah um because you know, if if, if it seems like there's actually like a potential to you know, make money just around the corner, Um, why not stick with that? Why? Why why would something look to moad this now? Well, stuff think has had so many um uh challenges and we had that big cover story last year about some of the challenges they've been facing. We

work has imploded and uh. Then this year with COVID, they were just in a position where they were trying to raise cash. They sold up a lot of businesses, including arm and so this was just one obvious place in their portfolio where it had been um sucking money out of soft bank. It was costing them over a hundred and fifty million dollars a year just to run

Boston Dynamics. So this was an obvious place to make a cut where they could uh worth mentioning there that also ye yeah, worth mentioning there that SoftBank isn't the only owner of that Boston Dynamics has had before before SoftBank, who was it against? Sarah Google the same thing. Google was perfectly prepared to have a vanity project and then a new CFO came in started kind of putting financial

controls on different parts of the company. It was part of Google X, that part of Google that does super cool cutting edge projects, and she just said, nope, we need to impose some financial discipline. So they got fuld to soft Bank, and that was um complicated and had to go through review by the government because Boston Dynamics has very cutting edge technology. In fact, the military used to pay for a lot of Boston Dynamics projects that

stopped under Google. And now if it sells again to another non US entity, it would again have to be reviewed by the government. So it's a complicated deal. So one thing I want to ask you, I mean, this is a company that's been around for almost thirty years. I mean, and it does sell stuff, it does sell robots, but can it be a really successful company? Uh? You know,

And and and really become something. And almost I think you end the story saying that, you know, it's it's an opportunity for them to kind of become the Google of the robotics industry, or somebody has talked about it. We really don't have necessarily someone of this ilk out there. Yeah, robotics is a fascinating field with hundreds of startups and so many people trying to achieve dominance in the field.

And um, they had owners who were content to let them just spend hundreds of millions of dollars researching the best types of robots. So arguably they are now in this very unusual position because they had owners who for a while didn't really care about how much money they

were spending bankrolling Boston Dynamics. But the company was profitable in the past before Google bought it, and it was doing more defense military work, and it says it can be profitable again, and they certainly have the technological chops, so it could be a really interesting new chapter in their life. And I mean, Joe, you've got to get

I think you've got get one of these dogs. I'm just saying already, doctor, I think they wrote expensive No, No, you may not a robotic cat that sounds even creepier than a real cat. Um uh, you know. The the the The other thing that I'll just point out in all of this is that there are other robotics companies that I find really interesting, like for Nuke is one in Jaman um does really like heavy equipment and stuff.

So I actually think strategically for Hondai, this is sort of a way of picking up a piece that, um, you know, if it's on the brink of having some breakthrough products, it could become sort of a crown jewel in the Hondai portfolio. It's a really great point and a great story, um, and I highly recommend everyone check it out at Bloomberg dot com. Sarah McBride, thank you so much. Venture Capital reporter of Bloomberg News on the

phone in San Francisco. Jill Webber, editor of Bloomberg Business Week, on the remote access from Brooklyn. This is Bloomberg Business Week with kirol Master on Bloomberg Radio. So in an upcoming edition of Bloomberg Business Week talks that we featured in the magazine, we're gonna talk to one of this year's successful I p O s, which is up more than a hundred since its debut as an a d

R in the New York Stock Exchange in September. It's the company that has patented a synthetic version of the active ingredient in so called magic mushrooms for use in treatment resistant depression. We're delighted to welcome to Boomberg Radio Compass Pathways chairman, CEO and co founder George Goldsmith, who joins us on the phone overseas in Europe. Georgie, it is so great to have you here with us. We've been talking about your company since it was featured in

Business Week magazine. How are you. I'm doing well, Carol, and thank you so much for having me on. Well, it's great. It's great to have you here, and what a year it's been, and what a year Togo public. Um. First of all, tell us a little bit about your company and how you came across this, because I do

understand it's a pretty personal story. Um. Yes, it is a personal story, and I think that in many ways, so many interesting companies do form that way, and so from our point of view, we had our son really struggled with mental health issues when he went to university, Like far too many young people do. We thought, how hard could this be, you know, their good treatments and therapies. Yet the more he encountered, the more difficult it was for him to be recognizable to us with the side effects,

and it didn't really help him. So we then started talking to lots of different people doing our own research. My co founder in life he cuttering amount of dis guy as a doctor, and and in her own researchers she stumbled across psilocybin and philocybin research and we became really intrigued by this um. The other thing that happened simultaneously is the more people we talked about our own challenges that we were facing, the more we heard from

others about their challenges. And these would be long term friends who we've known for quite a while that they never felt comfortable sharing their own challenges until we did. And that really led us to to understand that almost everybody has a story of you know how the current system isn't quite helping enough people well enough, and that

really inspired us to look at this research. We solves promise and and the issues, how do we bring it to patients, not just bring it into the next journal article and journal articles are critically important, but they're necessary but not sufficient to bring this to patients, and that's really our academic well, and I do you know, it's interesting.

I was doing some reading on this and that my understanding is for those, you know, patients and individuals who deal with and and suffer depression, that they're the existing treatments only really work for about seventy patients, leaving as many as ninety millions still struggling around the world. I think that's some world health organization. So it is a huge and I hate to put it in business terms,

but we are Bloomberg. It's a huge market. It is give meat markets of suffering, forgive me in that sense. And so there's a tremendous amount of suffering and I think we've been pretty good at developing tools to ameliorate sent of that, but is quite quite difficult because what happens is with each new treatment, those people actually have less and less likely to be helped by what's next. So there's been a very large studies in the US by the National SUDA Mental Health, and we really have

documentation for that. So if we have the opportunity to do something unique here, which is a well dose. So what we do is we provide a very high dose of suicide in a carefully controlled setting under supervision by especially trained therapists. So this isn't anything that anyone would do at home and um patients listen to a special

soundtrack and they're really supported through this process. And what happens is that afterwards, for many patients they experience an immediate reduction and depression that actually lasts for quite a while. And what are research really looking at is well, who benefits not everyone, so who doesn't? And what separates the people who benefit for a few weeks from the single dose for a few months of people who actually have

even longer experiences. So we've went to the FDA and actually we're operating now in ten countries doing clinical research twenty one research sites, and we're really looking at how do we do the real deep research to generate the information and insight we need to go to what's the next phase for us, which would be phase three trials and we'll be putting out on our Phase two trials about a year from now. So we've been really excited

about the progress. And I should say that the FDA has named your experimental treatment quote a breakthrough therapy, which is, you know, really wonderful to kind of get that acknowledgement, but it also means now you've got to do more rigorous,

more risk adverse testing. It's a lot of pressure, I'm assuming, and you've got to make sure you're working with the right scientists, the best scientists, the best clinical trials correct well, absolutely and absolutely and then even more so right because obviously there's a history here um as what we're looking to do is the highest quality, rigorous, most rigorous research.

The first support of Call for us was actually even before we formed the company, to speak with regulators players just to understand what did they think about this and what we were really struck by in all the conversations, and the breakthrough therapy designation is I think a perfect example of this. The problem is so big, and that's what you said, you know, there's such a huge amount of suffering here. The tools we have are good for some,

but not enough. They saw that this is the promising So what we found is that a huge amount of support, but we really have to get this right. We have to get it right for patients, for their families and society just got about a minute, and then I've got to do some news and then we'll come back. But how big of a market opportunity do you think is there for compass pathways? Just quickly, well, I think that what we see in this is not obviously about ninety

million people suffering from so called treatment resistent depression. But to be clear, this isn't people who is not a group of people who are resisting treatment. This is a

group of people for whom are treatment stoke work. And so perhaps you know, I think this is really really important, but that's just the start, because really what we're looking at is working on areas of mental health where people get caught in patterns of negative thinking or patterns of obsessive thinking that happens in other areas like anxiety or

O c D or other things. And we're really curious about how could this mechanism of a high dose of psilocybin therapy yield benefit for other classes of people who aren't helped enough. So is this like a potentially a multibillion dollar drug potential Just quickly, just got about fifteen seconds here. Um, well, I think that it is potential to have it be a therapy it's really important that it's not a drug. It's drugs. It's given in cons

combination with psychological support, and that's the critical pick. Hey. So before I move on, though, you did say and I thought this was a really important distinction, George, as you said, it's not a drug, it's a potential therapy. Having said that, I do think you know our listeners are curious, UM about how big that market size might be anxiety disorders, to press it, the depression treatment market, it's expected to be something like So what's your expectation

or thoughts on this. So a few things. One is I appreciate your digging into this. So just to give you some and your listeners some perspective. Depression is the leading cause of disability worldwide, just depression, UM, and in the US, the annual cost of depression is forecast to be about two hundred billion per year and a large number of out is direct costs of outpatients in patient medical services, pharmaceutical services, and the number you've referred to

is largely in the pharmaceutical space. Now, what we know is that about a third of patients, as you mentioned, simply aren't helped and the third of patients that aren't helped actually are about three or four times more expensive two or three depends on the kind of where where you're doing the data. UM. Then patients who are helped by these medicines UM And so we have not only a very large group of patients who aren't helped, but

also those are the most expensive patients. And so if we could make a difference in their lives, I think there's a huge opportunity to really um develop a new model of care for them. And this is what's so interesting about what we're doing. It is a therapy, right, It's a single dose under supervised circumstances, with preparation and then some follow up afterwards. And what's really unique about this.

So they did some really fascinating work at Johns Hopkins where a lot of this research was reborn in the over ten years ago. One of the questions they asked patients who going through this, and they asked this question six weeks after this experience, They said, how meaningful would you say this experience was in your life? Personally meaningful?

And people were given, you know, sort the most meaningful of the top five, you know, and so over seventy the single experience was one of the top five most meaningful experiences of their life. Right, So you can't you can't really put you can't you can't write no, no, no. And I wish you we were in person because you can see me smiling, because you can't put a value

on it. And I have a sister who works in this area, so I've kind of grown up learning about this, and I agree that there's an unbelievable cost by not, you know, helping out this sector of our population. And also it's invaluable in terms of they basically get their lives back. Having said that, you kind of evaded my answer. So it was this like a multibillion dollar potential treatment or tens of Yes, so I think it is multi billion ye, And you know we've had so But again

that's if the trials work. Well, what's let's let's talk about that, because that's a big deal. I mean, listen, we're all learning about the drug process, right because of the drug approval process, because of COVID. What challenges does does the US present, What regulatory hurdles still remain? And I do wonder if you're following kind of the playbook from marijuana kind of prescription first. Recreational second, how are

you thinking about it? Not at all. Now, We're really thinking about the huge unmet needs there is for patients, uh, and that's you know, what we're really focused on is access, and that means approval by medicaid, by you know, insurers. So from day one, we've been really focusing on making sure that if this in fact is successful in trials, people have access to it, and that means working with insurers even in the design of clinical trials to make

sure they have the evidence. Hey, this for this patient popuation. So that's super important to us. It's a different model than a recreational model. You're gonna have to come back because I want to talk more. We still have a few minutes, but I just want to squeeze in some things. When when did you recognize the potential in this space? Was it after your son or was it when you started doing some digging, Like what was the thing that

you just said kind of the aha moment? Well, the aha moment was being awakened in February by coach and my wife who was busy doing medical research and her sleepless night as a doctor, and she said, I came across this thing called philocybin um. It's the active ingredient magic mushrooms you can wear in the sixties and seventies.

What do you think of that? So say, what, honey, finding this And you know, obviously I grown up in that time, so I was familiar with these things, but it was just a whole world that I had completely forgotten about from that time. So listen, just got about forty five seconds left here. Why synthetic um psilocybin in And I'm just curious how you produce it? And just quickly yeah, sorry, we need to It's a medicine, so we need to know exactly what patients are receiving, what

the doses. It has to be the same quality every place on the planet that it's given. So that's why you have to use synthetic. It's the regulatory path forward. It's one where we always know there are no impurities, that people get exactly what it says on the tent,

and then we can do controlled research. So it's super important that in a medical setting we use synthesize pilotype and that's something that we've spent a lot of time developing and working with the regulators on both sides of the Atlantic, to make sure it's the highest purity and genuinely a medicine with evidence. Well, just then the difference between a drug and and a medicine is evidence. And so we're creating a medicine from this which is philocide

and our proprietary form of right. And then with the evidence that works. Got it, George, we have to go. Please come back. I'd love to learn more, George old Smith, and also listen to more of the trial, the trials George, of course of compass pathways ro Marco journal. Now, but you let me drive. No, no, no no home, honey, please, I'll do the right drivel. I want to drive, just drive. It's the questions trying. This is the drive to the globe. Give me thanks, We'll try us down on Bluebird Radio.

It is time for the drive to the clothes on this Tuesday, back with us as annimal Letty, head of active Equity at Wells Fargo Asset Management. They've got roughly six hundred seven billion dollars in assets under management, and is back with us on the phone from Milwaukee, Wisconsin. Hey, An, good to have you here with us. Um, how's it going and getting cold? Carol darn winter, I know, right, how did that happen? It's kind of dark almost already

here in New York. How are you guys doing though, Uh? With the virus? I know at Midwestern and parts of the country, it's been pretty tough. It has been a little bit tougher here. Clearly the weather changing has had an impact, but so far most of us are staying strong and healthy and we're trying to do that the best we can with its cold weather. Well, I'm glad

to hear that that you guys are doing okay. Um. Having said that, I do wonder if at all your market outlook, your market sentiment has changed at all, Considering here we are in the last week and a half, we've had a big development from Fiser, a big development from Maderna, and um, my last guest at the top of our show, UH talked about the medical world and saying that we're kind of in the maybe seventh inning when it comes to the virus, but the seventh and

eighth innings they're going to be really rough. UM. I just wonder how all of this may be impacts your visibility when it comes to investing. Yeah, it's a really good question, because I do think we've we've gotten some of the best news we could have gotten all year

with the fisor FISER and Maderna news. But we do have this little bit of time now where we're waiting for the vaccine, and so it does feel like there's a chance that we could have an air pocket in the both in the economy and in the market as we're waiting for the vaccines to get distributed. And you know, we do see that more UM states are starting the shutdowns again. We have businesses clothing again, and so that has a real impact and certainly more people getting sick UM.

I think we're going to see the effects of that play out into the market. But as we both know, the market is focused on the long term and on the recovery, and we have seen a pretty sharp workcovery so far. And you know, if you get the vaccine out in masses by spring, that recovery can really continue. And I think the economy is going to be in

really good shape and certainly will have easy comparisons. And that's why I think you see the majority of strength Well yeah, right, I mean, to some extent, we start to have a little bit of visibility. So at this point, you know, we've talked a lot about market rotation, We've talked about the value names again, I mean, are those parts of the market that you're interested in looking at

think investors should be considering. Certainly, our managers were paying close attention to the cyclical of recovery very early on, and as you said, Carol, we've seen some of that play out. We saw the gap between growth and value, you know, a historic gap start to narrow, and now

I think we're on more of a level playing field. Certainly, technology is trading at a premium, but it's demanding that premium because it's providing growth in a world that where growth is still scarce, but value and thick local docs there still is. There still are a lot of attractive names there. But you have to be choosy. And the reason why I say that is you want to avoid

companies that have weak balance sheets. Um certainly companies that are not well competitively positioned, because the economy is rapidly changing and we're seeing that through this pandemic. The economy has shifted more to digitalization and almost in every aspect in our lives, even within manufacturing, and so companies need to be able to invest in the future and to stay alive, quite honestly, and remain competitive. And so that's

really what our managers are focused on. There's an intense boos once sheet on cash flows, and management are capable of leaving their companies. You know what's interesting to Anne and I think about this. I've thought about this a lot.

You know, after the financial crisis, that there was a point where you looked at a city group at a dollar a share and you knew, okay, especially after we got through what happened to Lehman and we saw other companies, we saw at some point that no matter what the government, the Federal Reserve like, there were going to be a safety net to protect these companies, right because we couldn't let everything come undone. And I do feel like there's it's not the same. It's not apples to apples, this

isn't a financial crisis. But nonetheless, at some point, you know, we see it with central banks, global central banks, we see it with the US Central Bank, we see it even with policymakers, and we'll see if we get another round of stimulus. But there is some understanding that we can't let everything come undone on Main Street or Wall Street. Right, you're absolutely right about that. I think we all know

the airlines can't all go bankrupt. We can't have every industry at you know, certain parts of every industry at risk. And there certainly are you know, restaurants, hotels, that travel and leisure sector that really hasn't been able to come back in any strong way. Um certainly has been challenged. And so I think you'll see some stimulus go towards those businesses and certainly hopefully to the small businesses that really has had to bear the brunt of this pandemic.

So where don't you want to be right now? Where would you just say, Hey, you're sitting now down with your best friends, You're having a glass of wine, and you're saying, I don't even think about it. I think the areas that a lot of our managers are underweight the index and you could be having a glass of water. You don't have to drink, you don't have to have alcohol. I'm just gonna put that out there. Forgive me. I

think people think I'm a whine Oh I'm not. I think all of us, probably you know, diffen a little bit. It's been rough. You know, I would say that, you know, our managers have been underweight energy and um, I know that's a relatively small um part of the benchmarks now, but it has been an industry that has been challenged. Um, you know for a lot of different reasons. Stiller worst

performing group this year. Down, it's just been slammed. Yes, although you know you've seen this strong resurgence of the last couple of weeks, right, so you know you might miss out on on some of these surges, on these mild memorillies. And then we have been our managers across the board have also been underweight banks because of the interest rate pressures that will likely continue. And Miletti always good to hear your voice, take care of stay safe.

And Milletti, head of Active Equity Wells Fargo Asset Management, on the phone from Milwaukee. They've got about six hundred seven billion in assets under management. Thanks so much for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or at Bloomberg dot com, and be sure to check out our daily radio show at two pm Eastern on Bloomberg Radio. And be sure to watch us to on YouTube by searching Bloomberg Global News,