Coronavirus Impact on IT Spending

on iTunes, SoundCloud, or Bloomberg dot Com. You can also listen to our radio show weekdays at two pm Eastern only on Bloomberg Radio. Carol, we are keeping an eye on, obviously, everything related to the health side of this. No one is following it more closely at Bloomberg than Drew Armstrong. He leaves all of our health coverage here in the US. He is spearheading a massive team that is coming at this from all angles. He joins us on the phone today, Drew,

how are you hey, guys? Um, greetings from the suburbs of New York City. I'm too and well good good um. So tell us what's the one thing we need to know today? I mean, you're seeing all of this so in depth. What do we need to know, based on what we've heard from public officials, what you're hearing from health officials, and sort of squaring that with maybe this

market enthusiasm. Yeah, And I think the big thing that people are watching right now, and this has really been, you know, the thing to watch all along is what are we seeing in new US cases in the various outbreaks here, And that's I want to be clear, you know, looking at the number of new cases is a leading indicator, but it's also a very imperfect one just because of the significant problems in the US with broad comprehensive testing

for this disease you would like to do. I'm sure a lot of your listeners have read stories, many of them written by us, about some of the problems with getting enough test out they are getting everybody tested and who needs to be tested and so on and so forth. But you know, right now, as a leading indicator, it's kind of the best thing that we have right now.

And we've seen a number of, you know, indications that in New York and New Jersey, which are two of the hottest outbreaks going on in the United States, that new infections imperfectly counted as they may be, appear to be slowing, and that, you know is overall good news in terms of when can some of these restrictions on movement and on business being open and on people having

to stay home begin to be loosened. There are a ton of caveats attached to that, but if you were looking for good news, this does feel to be a little bit of that right. Global cases topping one point thirty nine million deaths succeeding seventy nine thousand. Those are the latest numbers from John's Hopkins. You know, you speak of um imperfect models. Drew is China the model from a health case basis the right model to be looking

in terms of the trajectory. You know, I think there are some things that China tells us and some things that don't. There's there's two ways to think about, Like when we look at what happened in China and will Hunt, we've seen the exact theme dynamic play out in other locations around the world. You know, I mean and I and I and I mean that from the standpoint that you know, there are some significant screw ups and then problems and then consequences that happened there that has happened

everywhere else. I mean you know, first in China, we had basically the authorities say, hey, this isn't that big of a deal. We have this well in hand, you know, I think they were even saying it doesn't appear to be human human transmission. And then we entered a period where they didn't really have enough testing capacity, and so it seemed like cases will only rising a little bit. But in fact we had no idea how big the outbreak was there because they didn't have great testing capacity.

Then all of a sudden they got it. Cases exploded, and then by the time that happened, the healthcare system in Wuhan got overwhelmed and they had to build immense new capacity. They had a lot of excess death. Um. Those that's exactly what happened in Italy. Um, that's a

that's that's very similar what happened in the United States. Mean, we had, you know, federal leadership here that was saying, this is well contained, it's not that big of a deal, and then we had a massive problem with testing and then all of a sudden this thing was out of the list. I mean, we've seen the same exact dynamic play out. Um. What I think the lessons we can't take away from from China. Are you know, one, they did a lockdown that I think would never be allowed

in a democracy period. I mean, people were physically unable to leave their homes. In many cases, there were reports of house to house searches to find six people and um haul them off to quarantine centers. Um. You know, it may look similar in some respects, but I think that there are some aspects of that that were much

more um uh severe. And you know the other issues that we've seen reports from you know, the US intelligence community that they appeared to significantly undercounted, um or underrepresented the severity of the of the outbreak there. And so I think we still have some missing pieces of information from China, uh that we really don't know how that it was, and that may have influenced how the world

thought about this disease as well. I mean, you know, academics and healthcare folks, they're they're early understanding this thing was really relied upon by what we heard coming out of China, and it's possible that we got a very imperfect picture of that. So, Drew, we were just talking with our colleague Sarah Ponzac, you know, well, uh just a few minutes ago. She drove from New York to Florida over the past few days, and you know, painted a picture for US of a country, as you know

very well, that is very uneven in its response. As you talked to bureau chiefs, your reporters across the country. What's this sense you're getting of the US response which feels sort of checkered at best. I think there's something that you you all have to understand about the response here. And I and I say that I and I agree with you as the response is checkered. But also you know,

outbreaks are local disease commission happened locally. It is a person to person phenomenon, and so you know it is when we talk about a US response, UM, I don't think there should be you know, it doesn't feel like there should be homogenevy. And that's just because that's not how it works. I mean, neither are These are responses

that need to be locally calibrated. And one thing that you know, there has been quite a quite a bit of criticism of the federal government in its response to this, But you know, a response that's appropriate in New York, where we have hundred forty thousand almost cases confirmed so far, maybe very very different than a what a response looks like in Wyoming, which you know, doesn't have a massive subway system where everybody's holding the same pole and shared

cars and you know, close confines and things like that. Um, you know, responses are almost inevitably going to be appropriate to the local situation, even if they do share some um some commonalities throughout aspects of social distancing and things like that, in order to avoid spreading cases. But in urban location is gonna be really different than a rural one. Um, A dense city is going to be very you know, dense public transportation city is going to be very different

from a car are driven city. So, you know, I think that when we talk about a patchwork, I think in some cases, you know, that is appropriate. I think what you don't want to see is a patchwork of how seriously people take it or how closely they you know, follow the expert recommendations that are being given to them based on those circumstances. Hey, just quickly, you know you

write about treatment versus cure? Is it the race for a treatment versus the race for a cure for the virus helping or complicating the US and the world's ability to get on top of all of this. Well, you know, that's a really important dynamic that you that you bring up, because in reality, a cure here in almost certainly does not mean, you know, a drug that eliminates, that just kills off the virus. We have we have cured. We have cured in the in the true sense, one virus ever,

and that's hepatitis c UM. So it's you know, humanity one UH viruses a whole lot more than that. However, we're pretty good at developing vaccines, and our own immune systems are a relatively good at at pushing back some of these infections, and so when we talk about cure, we should really be talking about vaccines. UM. You know, therapeutics are are are in all likelihood going to be the type of things that are used for people who

are sick enough to be in the hospital and need them. Um. You don't need to be administering therapeutics UM in all likelihood to people who are experiencing the you know, relatively mild, if extremely unpleasant version of this. You know, the body patients from what we've seen so far, are recovering from this disease more or less on their own. You know, some of those books are getting hospitalizing and are getting supportive care, and some of that can be quite intense.

But you know, I think that when we think about how therapeutics, what the role therapeutics are gonna play, it's probably going to be for some of the people who are the most most severe folks and in most in need of medical attention. And so when you're talking to your medical folks, Drew Armstrong, what are they saying about this whole push within the administration or at least in

corners of the administration around this time? Llaria drug which I will not try and pronounce, Uh, that is certainly catching on in at least rhetorically with the president. Yeah, so that drug and hydroxy chloroquine. It's an old malaria drug, listen. I mean, you know, if you look around at the evidence, it's extremely limited. Um, there haven't really been redoubts from any meaningful trial that tells you whether or not this

thing actually works. People say, you know, hey, we gave this to temptatients and they all got better, Um, you know, or a lot of them got better, or you know, six out of ten of them got better in the reality is that most people do get better on their own. I think the data on this has been extremely checkery. There's been a lot of christmatism of these studies. There has not been a large conclusive study that tests this

drug against a placebo Um. You know, President Trump has faced pushed back from the stage by people like um, you know Dr Tony Faucci, who's ahead of the sub unit of the of the NH. There's just very very little evidence right now in support is if it works, that's fantastic news. I think, you know, one of the things that we hear over and over and over again from the people though who are developing these drugs is

you need to find out what actually does work. And you know, having a system where we let everyone try everything without any proof whatsoever muddies the waters terribly, puts people on therapies that may or may not work, and excludes them from therapies that may that we that actually may and it it it makes it much harder for us to get an answer on what works here, what is going to help the most number of people to get that answer quickly and then to get people onto

those drugs. So Um, there is a There is an urging inside the scientific community to do this the right way. Um. You know, you want to you want to give people hope and you want to give people care, but you also want to give people something that works and that's backed by evidence. So we don't waste their you know, their medical opportunities, their time, their money, all of those things, um, while while testing you know, while while trying therapies that

don't have an effect, and right. We want to get it right because we also don't want to see any kind of relapse of an outbreak. You know. One thing I want to ask you, Drew is and this was based on a conversation Jason I had yesterday, you know where one of our guests said, basically, we're not gonna be able to get back to work fully or you know, embrace kind of our social lives like we used to like big stadiums until we get a vaccine. Is that the case? I think that's probably you know, there are

definitely aspects to that. I think you're you know, think about your own lives and you know, if if someone if Governor Cuomo or President Frum said, hey, you know we've mostly got the all clear, there's some circulating. I don't know if you know how many people would necessarily hop right out to a restaurant, you know, start hugging and you know, shaking hands with people they haven't seen in months, you know, grab the subway pole, getting a taxicab, go back to work. I think this is going to

take time. You know. One thing that vaccines are are good at also is you know, is creating a level of certainty and comfort. Um. You know, people want to know not only have we successfully pushed back this disease into a small or smaller and smaller and smaller number of people through the social distancing measures and the mitigation measures, but also that you know, even if they are struck by it, that they are you know that they or

they are exposed to it, that they're protective. I think a vaccine is pretty crucial in all likelihood and creating that level of confidence just from a personal comfort standpoint. And Drew, what about this notion of the antibody test, How realistic is that? Because that's something that a lot of folks that I've been talking to even casually are saying that could be something that sort of helps spur us back to work or back into something resembling normal life. Yeah,

it's theoretically a very very interesting idea. And if it's perfect and if it's perfectly accurate, you know, which is not necessarily given. Let's be really clear here. You can have all of these tests comes when tend to come

with some level of false positives or false negatives. And one of the things that you know, critics of this idea say is that, well, you know, if two percent of the population has it, you know, or ten percent of the population has it, and the false positive rate on these antibody tests, which you know, these are detections of did you at some point have this virus and

might you now have some level of immunity? You know, if your rate of the disease in society is anywhere close to the false positive rate on your trial, you might run, you know, you might run these antibody tests on ten thousand people and say, you know, well, hey, we found you know, x number of people who are positives.

These people, you know, presumably they're immune, but it might just be that, you know, those are the people who are who are the false positives in your test, And what you're detecting isn't people who are immune but just

erroneous test um. So I think they're going to be you know, I think one of the things that we people do think that they're going to be quite useful for is measuring the prevalence of this disease, especially in places that have had a lot of it like New York, um, and where I think it may be, you know where

I think it. It remains to be seen how useful it is is going to be on a purely individual basis, And I think to do that, you're going to need a level of certainty about the accuracy of these and that is something that you know that that we know people are looking at now. I mean you obviously there is a desire to have this be as accurate as possible, so you can get exactly the type of answers about, Hey, do I have some level of community here? Can I go back to work? You know? Did I have this?

And was I perhaps mildly symptomatical? Was that you know the thing that I thought was flew back in February in fact this Those are the types of questions that you can get answers to if these tests are accurate enough. Right, you are are rock star, No doubt about it. Drew Armstrong, thank you so much. It is a must read on the Bloomberg terminal and also at Bloomberg dot com, so everyone should check it out. Drew Armstrong busy, busy guy

and his team. He is the team leader for US Healthcare, a Bloomberg News joining us once again on the phone from New York City. I always feel like I get clarity after I talk to Drew. Listen, I've told the entire New York hereau of this that when we look back on this, Drew Armstrong is going to be the hero and all of it. I mean, the way he's coordinated to the coverage has just been unbelievable and highly highly recommend and we talked about this, we recommended all

the time. If you go to Bloomberg dot com slash Coronavirus, you will get all of his team's coverage and much more. Uh, it's it's a great destination. You're listening to Bloomberg Business Week with Carol Messer and Jason Kelly on Bloomberg Radio. Let's talk about a story that is in the magazine. Well, and it's not just a story, it's a book. Carol, I can't I've been so excited for this book to come out. Sarah Fryer wrote it. It's called No Filter,

It's about Instagram. There's a fantastic excerpt in the magazine this week. Can't get enough of it. Uh, Sarah joins us on the phone from San Francisco. First of all, congratulations, this is an amazing, amazing accomplishment. How are you feeling? I feel good? I mean it. This is what was crazy to me about this story is just how much of it hadn't been hadn't been uncovered, And so I'm

really excited to share the first experts today. Also feel like there's there's so much that people will be able to learn about, not just the tension between Instagram and Facebook, but also Instagram's cultural impact on our world. So I want to also bring in Joe Webber, of course, editor Bloomberg Business Week. He's on the phone from Brooklyn. I mean, this is such you know, it's a great we know, a great book already, Uh, and you've got an excerpt in the magazine, but it is such a Business Week

story as well. We've been following Instagram and Facebook and kind of I just want to say the strife between the two Joe. Yeah, I am so excited for Sarah. Um. I think this book is just going to be amazing. And I was really honored to be able to publish um this particular excerpt because I think it really shows a side of Instagram and Facebook that you know, we've

just no one's really seen it like this before. And you know, Instagram was this little darling app just barely a decade ago, and you know, it just looks like this bargain that Mark Zuckerberg happened to pick up for you know, pennies, and now he's turned it into a major cash cow that is part of this family of

apps that he's built at Facebook. But in order to get there, along the way, there was a lot of internal stripes and tension, and that's ultimately what Sarah was able to bring to light in this particular part of our excerpt. And Um, Sarah, you know, like there's this pastry that makes an appearance and I just asked you, this is what what is uh? What is the cruffin? Oh, It's it's the San Francisco version of the Rainbow bagel. Basically, it's it's a it's a crispant muffin and it plays

the launch event for Instagram TV. This this launch event was like the most Instagram a little thing possible. They had Assay e Bols and Macho Late's and UM at a Tistor event in New York have like champagne filled this cotton candy. Uh really. I use that events as an example to show the contract between Instagram and Facebook.

Instagram is really about UM presenting your life as this this beautiful, manicured version, and Facebook is about this building your network and having friend connections, and the philosophies of the two products really aligned with the founders and what

kind of people they are. Zuckerberg being this dominant force trying to win over more and more of of humanity's attention, and Instagram trying to create a place where you know, culture can be appreciated and people can become uh, become recognized for their own brands and so so eventually these two clash, and when they're announcing I DTV in twenty team, that was a moment for System realizing that Instagram wasn't really going to be allowed to thrive without without Zuckerberg's

intense involvement in every step of the way, which is very different than the independence the company rejected in the past. And and Mark Zuckerberg, I mean you really tease out some sort of personality conflicts too, that Ivious had huge business applications as you're alluding to, Uh, Sarah, I would imagine there's much more in the book about this, because that was sort of the the key point of tension that Carol alluded to at the top of the conversation. Yeah,

Zuckerberg is is all about winning. He He's not about you know, being careful and and having um, you know, a lot of attention to detail and so and so we see that play out in their product strategy. Means Zuckerberg tried a million different things to counter the rise of Snapchat. Instagram tried one and it worked and and I think that uh, eventually, when Instagram's growth actually accelerated after copying Snapchat stories, Zuckerberg saw a threat to Facebook.

He saw that the Instagram way of doing things was gaining popularity, maybe at the expense of Facebook's longevity. And being the dominating force that he is and really caring about his flagship products, he started talking about cannibalization, the idea that Instagram success would eat into Facebook potential and started driving the fingers away right and a pact basically his baby Facebook. Like, it's just it's really phenomenal. Um, Sarah, congratulations,

were so excited for you. The book is No Filter, the inside story of Instagram. Check out the book, check out the excerpt that is in the magazine. This week, you're listening to Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. Well, companies, as we know, are retrenching. We talk about cutting back on spending, letting go of workers, stopping buy backs and conserving cash and

cutting costs in light of the virus. Here with what that means for I T spending, the good and the bad. Crawford del Perette his president of I DC Research Xerox or I d C forgive me I d C, and he's on the phone from Framingham, Massachusetts. UM, nice to have you back with us. Crawford talked to us a little bit about UM I T spending because we do know companies are retrenching. Any kind of early data that you guys are seeing, yeah, absolutely, thanks for having me, Carol. Um,

so there is some early data. I mean, this has been an extraordinary set of circumstances that we've seen. So we were looking at an I T market UH last year. UM, you know, you're looking at a market that is growing in excess of UH two years ago, excess five percent last year, excess in n SS of almost five per so for point eight percent in January this year, we're forecasting a market to grow about five point one percent.

We've taken that down to the I T market will shrink by almost three percent this year, down about two point seven percent. And that's based on a GDP forecast of about a two percent decline, which is not uncommon where I T tends to UM, you know, get stalled. There's a lot of tangible things that you can stop buying,

and then you you tend to see a slap down. UM. There's a lot of characteristics here that are different and UH different from say the cycle that we saw in two thousand and eight, UH in two thousand nine, where we think this might be a little bit less severe. But for sure, we've seen a huge a huge readjust and and not surprisingly we're seeing it across the board, but of course we're seeing it in the vertical segments.

The industry segments like hospitality, transportation, um man, parts of manufacturing. But we're also seeing it in the category you were just talking about, which is the small and medium business, particularly the emerging companies, where they just need a lockdown, own all their expenses and really try to go into survival mode a bit until we get through this well. And survival mode is exactly where I was going to

go next, Crawford, you and spend it so beautifully. You know, this notion that you had a lot of companies and I mean, I think our company would fall into this category who probably did some I wouldn't call it panic spending, but some unexpected spending to get everybody set up and sort of get people in a place where they could continue operating and and if not blowing budgets, at least reallocating things. And I wonder how long that takes to sort out. So take us a level down and help

us understand what what companies generally are thinking around that. Yeah. So it's a great point, Jason. And we've seen a lot of this, right, We've seen you know, we've been in constant communication with the end customers as well as the intermediary companies. The companies that provide the technology and

provide the services. And we've seen that across the board, you know, I've I've talked to large service providers that have had to stand up health organizations in places like um, large major cities, large government bodies where you know, over a weekend that they need an instant you know, a new set of laptops for you know, multiple hundreds of customers. Um. You know, good luck if you if you're in the market right now for a laptop as a as a small business or a consumer. We've seen a big surge

in demand there. But interestingly, when you get underneath that for the whole year, we actually still think that you'll see um contraction UM in those in those kinds of segments. We think that you know, you look at the you look at the PC market, which it had you know, a relatively you know, nice run. We're looking at you know, an I T spending, you know, we we expect that market to drop in almost including tablet's almost ten percent.

We expect the infrastructure market, you know, servers and large storage systems that will drop by about four percent UM. I T services that will drop between two and four percent. The only category that will likely show growth. To your point is interesting. It's software business. UM, that business we expect well and that that business will just for perspective, that business was between about nine percent growth, that'll go

down to about two growth. But again, what and this is an interesting trend that you know, we we've been talking about for a while, and that is that when you start buying these things as a service, right, you can't shut them off. You've basically bet your business as so that basically means that you know you're in it for a penny, you're in for a pound, and and you're going to continue to buy these services if you're a thing going forward, which we expect most men, many

companies today. Crawford, you're one of those individuals that we folks at Bloomberg have been talking to for years, and we have talked to you through various crises, whether it's coming out of the financial crisis, you know, whether it's after nine eleven. I mean, we have talked to you for a long time about UM, the industry and the tech industry generally speaking. I want to ask you, I mean, I hope you guys are doing okay. I hope your team is doing okay, And I'm curious how you see

this virus um changing the world. I mean, what do you see is the most important in a way that the world's going to be different on the other side. Yeah, well, thanks for thanks for that, and you know, we're all doing it is best that we can. You know, we're we're a company a thousand people in in fifty countries around the world, and we're all basically working from home right now. But as far as we can tell, most

people are safe, and that's that's that's very important. So I think that what you're going to see on the other side is a couple of things, and some will be very tangible and some sorry sorry very um I think top of mind, and some maybe a little bit less. So I think that one of the most tangible things you'll see, the barriers are going to come down in some things that regulation has been stopping those barriers from

coming down. I'm talking about stuff like Hella medicine. I think you're going to start to see a scenario where you know what, payers are going to have to get out of the way, and if a cursing can be diagnosed over a webcam, if if a person can can still be part of the system and get a quality diagnosis. Um, whether that's crossing state lines that aren't able to be

crossed today, I think those things start to change. So I think we're gonna see a big change in in those kinds of services going forward as we come out the other side. I also think we're going to see that how um the sort of people are willing to work and where they live. I think we might see more of a move to you know what, it's okay if I don't commute every single day, It's okay for me to work at home. You're not going to see

that same stigma. So I mean, I'm just gonna put it out there and stigma associated with you know, what's going on with that person because they're working at home. Well, the fact of the matter is we've proven that the world can be very productive from home, and I think the tools are there, and I think it was it's really about things like social norms and social etiquette when you're in the office, to be inclusive of the people

that are not necessarily in the office. And I think that now with new kinds of services, we're gonna be a lot more inclusive. On the other side. I think the one that's debatable and one that comes up a lot is what does this do for education? And I think for for education, I think that UM, the underserved and the nonserved people in emerging legions around the world, they will take advantage of these kinds of tools. But I'm a little more cynical when it comes to the

Western education system. I think that, unfortunately, it's a system that's based on classrooms. It's a system that was set up for classrooms, and I just think that, UM, there's sort of an eliteness that comes from being in that classroom at a university, and I think we're probably gonna fall back into that um in the future. But I do think that on the other side, this is going to be a moment, and it's gonna be a moment where things are going to change. I agree with you.

I think you make some really really good points. I hope you're right on a lot of them. Uh, And we'd love to keep checking in with you because we know you really have you and your team, uh, your finger on the pulse of how we think about technology, because you've got the data. We love the data, all right. Crawford del Prett thank you so much, President of I d C International Data Corp. Joining us on the phone from Framingham, Massachusetts. I'm bro Macro a journal. Yeah, but

you let me drive? Oh no, no, no, no, who's going to drive home? Honey? Please, I'll do the right drivel Let me. I want to drive, Just drive baby. The question trying This is the drive to the globe. Give me thanks. We'll drying us down on Bloomberg Radio. It is time for the drive to the clothes back with us as George Mateo, chief investment officer at Key Private Bank, joining us on the phone from Cleveland. George, nice to have you here with us. Um, how do

you look at this market? Bear market or could we be at the beginning of a new bull market? Well, great to be with you, and thanks for having me back. You know, I think it's probably good of both. I mean, I think we're just going to be in this sideways shop for a while. So we'll have days like today we'll so good about things, and days will still probably a little less good. So I think we just have

to kind of fasten our seatbelt and hold on. And so what are you hearing from uh, customers and clients and and one of the reasons I'm especially interested to I think we're both interested to hear you answer that, George, is because you're not in New York City. You're there in in Cleveland, And obviously I think this crisis looks, uh, while broadly the same, maybe individually locally and regionally a little bit different. So how are how are people reacting,

how are they interacting with you? Yeah, well, I hope you both are keeping safe too, and all your listeners for sure. I mean, I think Ohio is a little

bit of as a curve. It seems like we've had a pretty progressive government get out in front of this, but I think everybody is still in the same level anxiety where wherever you live, uh, And that's just kinda feels more anxiety to some that but I think people are trying to measure about it and trying to kind of maintain their composure, and investors need to do the

same thing. So, you know, in spite of all this uncertainty, we really want to encourage people to maintain their long term discipline and stay stay in the market excep they can, and really stick to their long term plan. And that's really the message we've been trying to emphasize how many of those of your clients their long term plan has really been upended by such a dramatic pullback in the

equity markets. You know, A good questions, not a lot though, I mean I think people um not to this extent certainly, but I think people might have been anticipating in some degree of alatility. We try to take a long term approach. We try to counsel clients to expect volatility will be a feature of the investment landscape. Again, the magnitude has probably been unprecedented for sure, and often use word but

I think it's fits. But I think people know that volatility is something that kind of comes with the territory. So we've got some great financial planning tools and techniques that really kind of focus that folk on that first, and then from there you can really hopefully build a long term investment plan and shake to it. In market site today. So, George, we love talking names with you.

Tell us about Microsoft. I'm especially interested because we had a great conversation just a little while ago with Crawford del Prett over at I d C. You know, talking about uh I T spending. But one of the bright spots and maybe this is why you have this pick Uh is around software that obviously is an area where we've seen tremendous growth, and his team is essentially predicting that it's the one area in I T where we

might still see a little bit of optimism this year. Yeah, I would agree with that, and I think it again speaks to the notion of really signing high quality companies with really strong balance sheets. You know, people are companies that are led by strong management teams and people can really identify with their services. Software. I think you're right is kind of a goacher areas. It's kind of a good core defensive name within the tech landscape, really strong

cash flow generation, strong balance sheet, good earning. The visibility I mean Abody's tarningt pssibilities a little bit mired DSE days, but we think that Microsoft can shine through an environment like this, going toward about a good sect of hell and set their back to it really can describe that grows form, we think. So does that mean when it dipped to below one forty, well below one forty, that

you guys were doing some buying. I think the low I'm just looking the most recent lows around one thirty four and change or so, did you do a bunch of buying into Microsoft? I say, we'd be a bunch of buying, but yeah, we've been nibbling at it. For sure. It's come back and um, you know we still like the name though, so on a long term basis, we'd be buying it today. Actually, what about something like a

dollar general? Weal, Yeah, we talked about this a lot, and we've been talking, um, Jason and I about the overall retail sector and what's going on. UM, tell us a bit about what's your what's your thesis is for this one? Well? Does that much extent? They're kind of a mass of their own destiny. I mean something the macro environment is going to be headwind for a lot of folks, and hopefully these things are more short term in nature, but they really do offer the best a

breach format within kind of a smaller size box. Um, They've got some really good levers they can pull to try and and enhance their merchandizing. They've got some new initiatives that are really poised for some growth going forward. They've also got a environment where they their closest competitor is a little bit hampered as antar term and so I think there's a lot of things they can do to kind of get through this better than others. So I think they're well positioned over the long term as

well well. And it's interesting to think about that name to George right, like knowing enough to be dangerous about their history. You know, KKR bought them kind of at the tail end of the last thing, right before the financial crisis, and it was a great name to have as we went into a period of economic uncertainty where a discount retailer maybe more attractive, and they are servicing a big chunk of the country that is largely under

market or undermarketed or under under retail sways underserved. Yeah, I agree with you, Yeah, hardly. I think that's so that's a key part the thesis for sure. But I do wonder. I do wonder too, that's going to be the segment of I feel like our population that's going to be hit the hardest. So does a dollar general benefit or get hurt because of that? You know, there are some short term headwinds for sure, But I think that they've plun to be seller operators. Uh, they're finding

people definding ways to get people into the store. Some continuing options they've set up at the back of the store that allow people to take up their goods, um, you know, without having to go in the store, are a big part of their growth also um. But again, I think they're really kind of focused on the core demographic. Really freshen of the stores a little bit too, which will actually hope we drive traffic. And adding new categories like food for example, will be another key driver for that.

And people still need to eat. Yeah, well, and one exactly and one of the things that they have on their side, I think, right, George, is this notion that they are in these underserved markets, and it's it's sort of the general part of the Dollar General that like they're the only game in town or one of the few games in town, and a lot of these more rural parts of the South and elsewhere. I think that's right. Yeah, that's too why I put it the general part of

the stores, It was just the Dollar General. I think that's a good analogy. Yeah, they've definitely been hiring. I was just looking at some of the most recent headlines are hiring up to fifty thousand new employees to support their operations. By the end of April they were doing that, and then they were also giving a bunch of their employees a bunch of bonuses, like thirty million dollars in bonuses. Yeah. Now it's really interesting. Great, great to catch up with you.

We really appreciate it. George Mateo is chief investment officer out of Keep Private Bank, on the phone from Cleveland. We hope you and your team stay safe and and hope you guys continue to be ahead of the curve. As you say, Uh, Mike Dwyne, I believe the governor of Ohio, as George pointed out, you know, he was one of the first he moved the primary bat. You know, there were a lot of big actions uh that uh he was taking up. Believe he's a Republican to you know.

So it's an interesting, uh case study in many ways as we continue to talk about governors and what not, so interesting to hear his perspective. As always, thanks for listening to Bloomberg Business Week. You can subscribe to the podcast on iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show every weekday at two pm Eastern only on Bloomberg Radio