Robinhood Shares Take A Slide

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio, or watch us on YouTube search Bloomberg Global News. We went through some of the headlines when it comes to returning to work. Paul Wells Fargo pushing its return to office plan to October. Florida's hospitals here in the US have been strained by delusion COVID patients UH Closer to home here in New York City cases are spiking as well. Let's get an

international perspective, a perspective from around the world. Joining us now is Dr Chizuba we Nady and associate scientists at the Johns Hopkins Bloomberg School of Public Health. All so the Nigeria, Country director at the Johns Hopkins International Vaccine Access Center, Dr Wenatti joins us from Nigeria. Thanks so much for joining us. How are you doing. I'm fine, Thank you, It's great to be here. Well, it's great to have you on the show. Give us we we

do focus. We have been focusing a lot on what's been happening here in the United States. UM, give us an update from Nigeria, because according to the Bloomberg Vaccine Tracker, only one percent of the population has been inoculated. That's right, only one percent of Nigerian's have received the vaccine. And

that one percent is courtesy of the Kovacs facility. UM. We received three point nine million doses way back in February, and the government ruled out the vaccination program quite effectively and used of all the vaccines. And I have to say that one of the concerns with the vaccines is the risk of expiration, and so the government was able to roll it out without any single vaccine expiring. UM and and that really speaks to the need and the demand for the vaccine. There is a latent demand for

these vaccines. Despite the fact that we have heard about vaccine hesitancy. There are some people who are heasy, that for sure, but there are still quite a number of people who want these vaccines. UM there is now a new batch of vaccine that we just received m August first four million doses from the US government actually through recovered facility, and so plants are on their way right now to UM get those vaccines rolled out and people vaccinated.

But as you can see, four million doses will only bring us up to one two percent vaccinated. So there's still quite a lot of on net need for vaccination, for COVID vaccination in Nigeria and indeed in all of Africa and many lower middle income countries. So talking on it,

that's kind of where I wanted to go. What's what's the plan or what's expectation in Nigeria and across Africa for maybe the intermediate term over the next six months in terms of percentage vaccinated, how high do you think you can get that number and over what time frame?

It's very hard to say because as you know, most of the global vaccine supplies have been locked up by you know, reach out countries who got in there first, and you know they the manufacturing and some of SUCU companies to produce vaccines for them and secure those vaccine doses. But now we're seeing more and more of the rich countries UM donating some of their doses to the COVAC facility.

We know that the COVACT facility your mart to of the population of the countries that they would provide vaccine to cover those and that would be over a period of um you know, from from February that was going to be an over a period of one year, one and a half years. So in the next six months m we are hoping that we should be able to get enough vaccines from both the KOVAC Facility as well as the African Union who is making our invent also to provide some vaccines UM to to try and get

to that. But we're not sure for if we're going to get to because right now the global vaccine supply is in very very short um supply and UM the prospects for producing enough to to feed the world or to satisfy the world need is actually quite a bleak.

You know. Well, one thing that I've been thinking about a lot and look in recent months is the fact that in the United States we are so wealthy when it comes to vaccines, and there are so many Americans right now who are sick because they did not take a vaccine. And around the world there are so many people who would get in line to get the vaccine that is just sitting there at a drug store waiting

for an American to come and get it. From a from the perspective of a public health expert, a physician, and somebody who's living in a country where only one percent is vaccinated, what goes through your head when you see that? Yeah, I I I find that. I mean, that's that's unfortunate really because, um, there are many people elsewhere who would line up, like you say, for these vaccines.

But but that is that is the reality in in in the US, and I think it will also be the reality in now and middle income countries when we do have enough vaccines. There will in every population there will be some people who are hesitant. Right, And so US has reached that state where you have you have satisfied those who will take the vaccine immediately, and you're now in the in the phase where you need to, um, you need to encourage age those who are still on

the sense about the vaccine. You encourage them to get the vaccine. But there there are some people who will not get the vaccine, and that's that's the truth. I think the US vaccine mandates. That's a hot topic here in the United States and I guess other developed markets that have relatively high vaccination rates. Do you think that's something that should be enforced either at the you know, the government level, or maybe just at a private level.

If you want to come into my restaurant, you've got to prove that you've been vaccinated. Personally, I think so. Um, with the way the COVID transmission is happening and the risk of of viral variants that you know, could cost more harm than good. UM, I think that clearly we if we have more vaccination, is going to slow the spread of of the of the virus and the variants and reduce the odds that even more dangerous variant will emerge. And that's something we really need to worry about, UM

right now. I think many employers want to see that their employee show their vascination cards. So at Hopkins, for example, UM, there's no mandates per se, but if you're not vaccinated, you have to be tested often and so you know, it's still an inconvenient for you to get tested maybe

every other day or wearing masks consistently. So I think that they definitely has to do something to be done if either there's evactive mandates in place or there is stricter and more regular testing, because we don't want an individual's freedom to infringe on the health of the public or the community, So that sense of responsibility must be upheld. What is the best way to instill that sense of responsibility in someone who says, well, forcing me to get

a vaccine is a threat to my individual liberty. The best way I think is is to put the responsibility back on them right to not put the public at risk. So I think what they're doing in in in France is if you're not vaccinated, then you stay home. Those who are vaccinated now have the liberty to go out because we're not going to close the economy down for those who refuse to get vaccinated and continue to be

a threat to the public. Help. So, Um, while we don't want to infringe on individual liberties and freedoms, um, we would have to put the owners back on the individual who refuses to get vaccinated to you know, to to keep from spreading the disease to other people, So you would you if you're not vaccinated, then you would have to wear masks, you would have to test frequently, and you would have to prove that you're not a

risk to the public. So I think it's a matter of putting a carrot and a stick, and I think the stick should be wielded where people, you know, refuse to get vaccinated if there's no medical reason for them not to get vaccinated. So dr wee not. The delta variant is obviously the dominant variant on a global scale. Do we know anything about how long it will remain and driving these surges? Is it just a factor of when something else comes along or is there a scenario

where this dies out as a variant? He should we think about it? The way to think about it is that, um, the more the virus is transmitted, the more the risk of variant emergence. So the delta variant right now, obviously you know the results of continuous transmission. The way we are going to get rid of the delta variant it is for you know, more people to get vaccinated and for us to curb transmission by maintaining the same um. You know, public health measures social distance and wearing masks,

avoiding crowds and things like that. So if we look at the if we look at the epidemic curve of let's say the alpha, we can really tell with the alpha because alpha is less transmissible than the delta variants. So we're actually looking at a longer term UM scenario where if we don't put enough measures in place, the delta variants might actually stay longer than we saw, the alpha variant being like a major driver of of of

the epidemic. So I would say that UM, for now, it's really really important for us to get the vaccination rates of around the world because another variant might emerge from a part of the world where vaccines are not available. This is exactly what we were warned about months ago,

and we're seeing it happen right now. Dr She is about Wenati, Associate Scientist at the Johns Hopkins Bloomberg School Public Health, also Nigeria Country Director at the Johns Hopkins International Vaccines Center, the Johns Hopkins Bloomberg School of Public Health that is supported by Michael R. Bloomberg, founder A Bloomberg LP and Bloomberg philanthropies. Well, the U S economy

is in the midst of a historic comeback. It's happening, though, with the lowest rate of labor force participation in more than four decades and a record number of unfilled jobs. It leaves economists, policymakers and investors wondering where have all the workers gone? Those are the words from Olivia Rockman. She's US economy reporter for Bloomberg News. She's joining us on the phone from San Diego. Also, Joe Webber's joining us. He's at her at Bloomberg Business Week. He joins us

on the access line from Massachusetts. Yes, San Diego, that's pretty nice place to be right now, Olivia, I can speak like that as a Californian, Joel, Where have all the workers gone? It has been a question that companies UM an economists have just been obsessing about um since the economy started to pick up steam. And there's help wanted signs. The biggest thing I've been seeing a like

signing bonuses and like this isn't like nothing. We're talking like thousands of dollars on up and it's all on an attempt to incentivize workers to come out of the closet because they have just literally it seems like they've gone missing. But it turns out that, um, it's not quite as big of a mystery, um as it might seem, and that Olivia sort of helped UH do some sleuthing and figure out what was at the bottom of it.

And and Olivia, I'll turn it over to you. But part of this is frankly just because of boomers, right, that's right. So one of the big factors is that boomers retired at double the rate that they did in twenty nineteen last year, and so we have this highly productive group of workers that now is basically out for for good. And then at the same time, we're seeing the birth rate decline and we're not seeing young people and try to work force at as fact of wait

as those generations before them did. Well, you know, Olivia al from Jersey called me and said, get back to work. So here I am back back to work. But one of the issues that I think some people may have is maybe their skills just kind of lapse here and they might not be as employable as maybe they were when they're in their workforce. And I'm thinking maybe about some some of the older demos um what are you

finding as at least ages. So it's of course historical that employers discriminate against people who are older when it comes to hiring because they know they won't get as

many years out of that worker. At the same time, while skills may lapse when you spend more time out of the workforce, it also means that if you've had these long resume gaps when you're applying for a job, employers often, you know, let those resumes out or aren't as quick to hire, and so it makes it harder for people to jump back into the workforce the longer

they've been away. So what do economists and analysts who you speak to say needs to happen when it comes to policy making decisions to encourage employees to get back to work. There are a number of factors here. So one of them that we've kind of found over the last six months or so is a childcare problem. And so parents, particularly women, left the labor force at high rates, and some see the cost of childcare and they say, you know what, why go back at a low wage

when I can just save on that cost. And so some of what Biden has proposed in this trillions of dollar packages childcare castability. So that's one thing. Another thing is the opioid crisis that's caused a lot of people to lead the labor force, and again that takes a crackdown on you know, rehabilitation and help for these individuals. So there's so many categories in each one sort of

has its own policy structure around it. I want to talk more about the opoids, um, because when you think about the scale of an epidemic like it was and predated, um, uh, this pandemic obviously, um, it's easy to maybe think like it it wouldn't have had as big of a dint as it seems to be happen be having. So like, how are economists looking at at the implications from from opioids? How how big is that in terms of the missing element in this labor force. So drug overdose death in

particular rose by thirty percent last year. Um. That's a huge increase from the years prior. In fact, opioid death had been kind of plateau going and have now increased again. And the problem there is that in areas where addiction rates are higher, we see lower rates of labor force participation. And so as this spreads, it sort of worsens the issue. Um, Like we've seen a d C for example, been a

huge problem for many of the employers there. And so when you think about, um, what can be done, I mean, like, how do you how do you get on the other side of this from a policy perspective. So, of course, as I mentioned, Biden is proposing this massive infrastructure plan which has many different components that are aiming to help get people back into the labor force. But as we say in our story, you know, labor force participation is at a forty year low right now, um, right, Like

we're back to the seventies exactly. And the seventies was a time in which we had you know, historic recession, inflation was high, and there were cultural differences then as well. Um. And so while we did sort of climb out of the pandemic low, we haven't seen a lot of progress in labor force participation since August of last year. And so it's going to take a lot for for you know, policymakers both on the said side and on the White House side to come up with solutions to get people

to start working again. The seventies were quite good for me, I'll just point out, all right, let's talk automation here, Olivia. When I go to the CBS and get my four or five items, I just scan it myself in schedattle. I mean, so that's got to be an issue. What's really interesting here is in prior recessions, we always saw automation coming in kind of to replace manufacturing jobs, factory jobs.

But because of the health crisis, we've seen automation now replacing service workers as well, whether that's in food service or as you mentioned as CBS or grocery store. And so we've sort of seen what happened in Pire recessions now accelerate on the automation front. And in the US, we really don't invest that much in reskilling, which would help people who've lost their jobs two robots kind of get back into the workforce, and so that's that's really

where we're lacking in that area. Hey, Olivia, just in the last thirty seconds that we have with you, the jobs report tomorrow it's expected to show that the US added just about seventy five thousand jobs in July. What's the number that you're going to be paying attention to, though, Well, this story is all about labor fourth participation and economists for estimating that labor first participation is going to barely

move upward. And so you know that's going to continue to point to this trend that there's going to need to be more happy on the policy front to get us back. Olivia Rockman is US economy reporter at Bloomberg News. She joins us on the phone from San Diego along with Joel weber Eder at Bloomberg Business Week. He's joining us from Massachusetts. Olivia's story is featured in the current

issue of Bloomberg Business Week magazine. You can read it now at the Bloomberg Terminal and on Bloomberg dot com slash of business Week. This is Bloomberg business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. All right, Paul Sweeney sitting here for Carol Master today along with Tips Stenovic, Boy me, M and A is alive and well. And that whole concept of content is king is absolutely making itself known. And I always described

that term content is king. It's widely used, but I describe it to Sumner Redstone, the media mogul. He used to just say that all the time because he owned a lot of content. Uh, let's take a look at some of these deals with Jerry Smith, media reporter for Bloomberg News. He joins us on the phone from New York City. So, Jerry, first, we had Rees Witherspoon selling her Hello Sunshine Media Group to nine million bucks. I

think this pe folks. And then just today South Parks creator signed a new nine million dollar deal with Viacom CBS is what's going on out there? Seems like an arms race. Yeah, that's absolutely right. I mean there's a real land grab right now for high quality programming as all the big media giants and tech companies are trying to um, you know, fill their streaming services with as many TV shows and movies as possible. So this new deal Jerry runs through, it covers six more cycles of

South Park, it includes fourteen made for streaming movies. That's the part that really stuck out to me. So this is these are for Paramount plus because it's really confusing because you can watch south Park on HBO Max. Yeah that's right. I mean that's an example of just how um you know splintered. The full streaming world is where you know, the old episodes of the show might be in one streaming service and the new reboot of the

show is on another. I mean, there's another example where Peacock is doing a reboot of The Fresh Prince of bel Air, but the old episodes of Fresh Princes are on HBO Max. I think ya com CBS. Their deal with the South Park creators runs longer than their license to deal with HBO Max, and I think the strategy there is eventually those shows, those old episodes of South Park end up on Paramount Plus along with all the

new shows and movies that the creators are making. Jerry, I'm getting to the point of being and I'm a media analyst, have covered this stuff for thirty five years of getting completely overwhelmed by the choices there, but I cannot report that after again thirty or five years, I finally cut the cord for no other reason than we sold our house, you know. Um, But it's interesting here.

What do you think is next? I mean, are we can see more and more of these A list people, you know, I kind of go out there and try to form production companies and but also content and sell out. Yeah, I mean, this is really an incredible time. If you are you know, independent studio, I mean Lebron james Is

Production Studio is also exploring its sale. Um, you know, I think that there's uh, you know, these streaming services they just need more and more programming and certainly they're just in how studios are making a lot of it. But if you're an independent producer, I mean you have your your phone is probably ringing off the hook right now with streaming services that are are looking to do deals with you. Well to that, and Jerry, you have

a new story out in Bloomberg Business. We can current issue. It's all about none other than the daily shows. John Stewart. He's going to Apple TV. This is cool. Yeah, this is cool. And and this is interesting because I remember years ago this was what Jerry where uh hbo signed a deal with Jon Stewart after he was on Comedy Central and nothing ever came of that. Yeah that's right.

He Um, you know, he had an idea and a very ambitious idea to do some sort of animated show related to current events and it uh and it just died in production. Um. But yeah, he has a new show that's coming out on Apple TV TV plus next month. Um, it's gonna be a little bit different format in the Daily Show. He's going to spend an hour really doing

a deep dive on a certain specific topic. Um. He hasn't said what these topics are going to be yet, but it sounds similar to what John Oliver does, a former colleague of Stuart's from The Daily Show, John Oliver as a show on HBO called Last Week Tonight where he, um, you know, spends much of the program just um doing a really in depth piece on on a specific topic. Um. But yeah, I mean Apple TV Plus has has sort of flown under the radar in the whole discussion about

the streaming wars. Um, certainly Apple has very deep pockets, but um, in streaming service, the library is a lot thinner than um, you know, Netflix or HBO Max. But they certainly, you know, they have a hit show right now, Ted Lasso. Everybody seems to be talking about Ted Lasso. Um, you know in this Jon Stewart show. I know they're hoping that that's going to be generating a lot of buzz.

And it's an important moment for Apple Apple TV Plus because a lot of the people who signed up got one year free trials and those were extended and extended again, and now they're starting to wear off, so that, you know, Apple TV plus really needs some compelling content to keep people around once they're free trial in. Yeah, I mean it's and it's not for lack of resources, right j When you think about the balance sheet of Apple, if they if they really really wanted to get in here,

there's no opping them. Do we have any idea of the terms of this John Stewart deal? Uh, you know, I mean he's going to be producing other programming for Apple as well. I think, um, you know, but it's definitely Apple is As you said, they've got very deep pockets. I think everyone in Hollywood has been waiting for them

to start taking some big swings. Uh. You know, they have Oprah Winfrey, They have a lot of really big name talent um you know that that are making shows and movies for them, and I think it's um, you know, the John Stewart Show will be a really interesting example also because um, you know that the whole late night um comedian talk shows haven't always translated well on streaming services.

We haven't seen anything that's really broken through in the same way that you know, the broadcast networks with the Tonight show. UM, you know that that that they have, so that'll be really interesting to see. Um, you know how John Stewart Show does. Hey, Jerry, can't let you leave without talking about Viacom CBS because I know you're up early covering those earnings. Today shares a Viacom CBS higher by more than seven right now. UM, what's the

headline there? Well, certainly streaming. Uh, you know, they're starting to see some traction with with Paramount Plus. They're starting to expand internationally. They announced a big deal where they're going to be launching Paramount plus UM on Sky's European networks. That's the deal Skies, owned by Comcast. There was a lot of chatter about maybe Comcasting Viacom CBS could do some sort of m and a, but at least for now, it looks like they're just going to be partnering on

UM launching streaming services in Europe. UM. Also, the ad market is bouncing back. Last year, advertisers really pulled back at the height of the pandemic, and now they're starting to spend again. And every media company now is UM you know, saying that the markets bouncing back. Amazing good stuff. Jerry Smith, media reporter for Bloomberg News, joining us on the phone from New York. Lads of m n A some act positions looking for content in the media world.

Taking a look right now at the real time price of robin Hood took her h O O D down twenty two today. That follows three days of gains, still though trading at fifty four dollars a share, significantly higher than the I p O price of just a week ago. The reason for this decline today investors filing to sell stock, venture capitalists who are cashing in billions of dollars after robin Hood's increase in share price in recent days. Annie Massa is investing reporter at Bloomberg News. She joins us

on the phone from New York City. Uh, Annie, Uh, it's the sell off has accelerated since we last spoke on quick Take a few hours ago. Uh. Is this just a result of the volatility that we've seen in robin Hood in in the last six days. It's a real reversal from what we were seeing earlier this week. As you mentioned, we had a three day stretch earlier this week when robin Hood's price doubled and that it was a turnaround from I p O day when it

sold off. So you've seen these big, big swings in robin Hood over the course of the past week and it's only been a public company for a single week. Yeah, any what jumped out of me was the lock up or lack there of. On any of my equity deals, you'd have to have a six month lock up here, but these guys didn't. Why not? So this this is

a bit different. Some of the reason that we've seen this sell off today and one of the surprises that came out this morning was you're seeing some of the big venture capital backers of robin Hood UM getting the opportunity to UH sell shares to the tune of ninety

eight million shares. Now that's not all happening at once, but they do have the ability to do that and UM, as you mentioned the in a typical I p O process, those lockups are in place to kind of stabilize the price of the stock went in the public and robin Hood had a couple other factors in play here. They

had an unusually large allocusian to retail. They have these provisions for their venture backers, who, as you remember, kind of failed them out earlier in the year during the game stop and and C volatility UM they raised an emergency more than three billion dollars UM, I mean nearly overnight from their VC backers, so that um those dynamics are a bit more unique to Robin Hood. Any Even though robin Hot stock is down right now, over the last three days, it's higher by more than do we

know why the stock moved higher so quickly? Was this? Is this a meme stock? Now? Basically that's what it seems like. It's it's it's like nothing fundamental has changed, right, it does seem it does seem to have some of that means some of those meme stock characteristics, just seeing those crazy swings with no real fundamental change that we

can identify UM and and the big retail participation. Something that's interesting about these dynamics with Robin Hood right now is there wasn't as much retail UM activity on the first day of trading, but it picked up pretty considerably in the past couple of days, even becoming the fourth most traded stock on retail trading platforms yesterday. So, I mean, the retail action has definitely arrived. It just arrived a few days after the I PM. Yeah, I'm going at

the volume here. Over sixty four million shares have traded so far today. That feels like retail to me. And it has a company commented all about their stock price, you know, moving over the last several days. They haven't commented on it. They they've only pointed to statements that executives have made in the past about how they're keeping

their eye on the long term. Here. Still, you have to imagine that at robin Hood headquarters or working from home, they're keeping an eye on this share price because yesterday the stock was held in multiple times for volatility. So that's the type of thing you can entirely ignore. Yeah, that's just in the first That was just in the first you know, like the first eleven minutes of trading, I believe it was. It was a wild ride. Um any what what's the next catalyst that we should be

looking for for robin Hood. I mean, since it's a meme stock, I hesitate to even ask the question because there's no sort of rhyme of reason as to why it moves. But given that we got this filing earlier today that sent the stock price plummeting, what are you

on the lookout for. One important thing that we haven't touched on yet is that options on robin Hood began trading yesterday, so those uh lad a couple of days behind the day that the stocks started trading, So that may have amplified some of the volatility that we saw. And um, you know, hundreds of thousands of options were trading hands yesterday, so that added the action. But um, one other thing to look out for in the future is the resolution of some of the regulatory um inquiries

that they've revealed. Even in a couple of days leading up to the I p O, there are still very much open investigations, so that's something to keep an eye on as well. Annie massa investing reporter for Bloomberg News, joining us on the phone from here in New York the Journal. Yeah, but you let me drive. Oh no, no, no no, no home please, I'll do the riding. I want to drive. All just drive, baby, it's the questions to try. This is the drive to the globe that community. Thanks,

we'll dry us Nada Boomberg Radio. All right here we are looking at these markets at or near record highs. Once again, you know a lot of folks are debating whether to stay in a growth trade that's worked for such a long time go with a rotation trade into more cyclical names. And that's kind of been a little bit of a discussion within the equity markets. Let's check in with our next guests, Uh see where they come out.

Sandy Villery, portfolio manager Villery and Company with two billion dollars in assets under management, joining us on the phone in New Orleans. Sandy, thanks so much for joining us. I'd love to get your thoughts on kind of maybe where you're leaning, where you shake out in terms of this growth versus the rotation into maybe more value cyclical

Where are you guys? Yeah, I mean, thank thanks for having me, by the way, And um, I would say that you know, when you look at something like the tenure Treasury and it's it's down where it is, uh, it starts to make us a little bit nervous. I mean basically it's telling you, I mean, the bond market tends to be smart in the stock market, and it's kind of telling you that, you know, growth is gonna slow.

So um, you know, we we we kind of think we want to take some profits and and maybe some technology stocks that have done quite well, probably on the growth side, as you know, they've got a nice tail

win with rates coming down. And if if our belief is that rates can pop up, you know, perhaps by you know, the end of the year, when maybe this you know, delta variant gets behind us and and maybe it peaks out here over the short run, Um, then we want to we want to switch into things like financials and maybe more cyclicals they could uh you know, being be in some trouble over the short run as

RACHEL going down, but then look to reverse. So we kind of want to be a little bit contrarian as to kind of where all the you know, the masses are are headed right now? Does that picture change at all tomorrow if if we get a huge bee with the jobs report. Yeah, it's interesting because um, you know, we saw you know, June comes in at eight hundred fifty thousand. Hopefully uh we get near this eight seventy

thousand number for July. But the question is is a bad number actually good news for the stock market, um, because you know, you could you could have um, you know situation where maybe we start to taper um a little bit you know soon, or maybe we start taper by the end of the year, or maybe we don't. So I think a bad number could could lead you towards, um, you know, the FED being you know, kind of staying a little bit more delish longer than than what people

are expecting. So if you want more more you know, more more Jews from the Fed, then maybe you want a little bit of a bad number. It's interesting, so sane I'm looking at the Russell two thousands day of having a very good day up about one point seven. I know historically you guys have favorite small cap uh stocks. Is that still the case in what sectors are kind of interesting to you guys? Yeah, no, we we we

do favorite small caps. We just think over the long run, Uh, it certainly gives you the opportunity to have us, you know, a company bought out or it gives you, um, you know hopefully, Uh, we're trying to find that that company that becomes the next you know, Amazon or Walmart, if you will. So we like to we definitely like to

be in this more smaller cap names. And I think we are trying to take advantage of, you know, with with things like financials that are a little bit um again under some pressure with falling rates and having a more difficult time you know, with their net interest margins, etcetera, trying to take advantage and being a little bit contrarian.

And then we also want to buy you know, some things that are a little bit um maybe tied to the reopening of the economy that all of a sudden are under pressure, you know, because of the delta variant and and and and some uncertainty. So we we love, we love some names that are more cyclical and uh and tied to the reopening. We're just looking towards maybe buying them, you know, maybe in the lows in in

in August or September. Um. I think August is maybe the third worst month for the market, you know, since the fifties, and I think September is the worst month. So maybe we get an opportunity to buy some things a little bit cheaper if we're patient and selling in their strength with you know, firms like Goldman raising their price target on the SMP to getting getting everybody excited.

I think, you know, an opportunity to sell into that and looked to buy I think maybe a little bit cheaper and some more volatile days uh in the months ahead, yeah, perhaps, I mean we're only five days into the into the month, not even five trading days into the month. And uh, the nasdacs already hired at one point four percent, the SMP highed by close to seven tenths of one percent. So we'll have to wait and see, Sandy, what what would be that that thing that sends markets lower. We

haven't had a five percent pullback in close for a year. Yeah, I think if you saw, um, you know, all of a sudden, we're going to paper maybe a little bit sooner. I think people do expect, you know, um, you know, the FED to stop buying them, you know, the d and twenty billion of treasuring agencies each month. And perhaps if we um, if if that becomes more concrete, you know, that could start, you know, by the end of this year.

You know, perhaps uh, you know, the stimulus party isn't over, but maybe they start to flicker the lights, you know a little bit faster and um. And so I think when the you know, when the when the FED, um, you know, it starts to react more and really truly becomes um, you know a little bit more hawkish than that could be. You know, something that they could send the market. You know, um, a little bit further south, send you one of the names that you've written up

as Caesar's. I'm a big fan of the gaming industry and was fascinated by the economics and the financials. There, give us your call on Caesar's here, seems like it would be it would fit in with your thesis of a really good reopening play. Yeah, and and you know, these guys have done an amazing job. I mean, sometimes you've been on the horse and and sometimes you've been on the jockey. And Tom Reeg has just been an

unbelievable operator. He came from Eldorado Resorts and has done some great things with you know, is Capri and Tropicana

and things like that. And so he actually came in and bought Caesar's and he's already um, you know, cutting expenses and doing these things that are um incredible to get his you know, hopefully long term operating margins up to and and you know, still they're talking about ten dollars of free cash flow shares is certainly in play in this This sector kind of trades at eleven and thirteen times, so you could be looking at a hundred

thirty dollar stock. UM. You know, he is very committed to you know, the the online gaming as well as UM you know, as well as sports betting, and you know, four billion dollar acquisition of William Hill, which is the third largest sports book operator in the country, is all gonna be run through Caesars. And then you get the you know, sixty million total rewards customers. It's just, um, you know, an amazing an amazing feed. So I think

I think these guys have a lot of Uh. I still think it's very early and what he's capable of doing, and he's just had such a good track record that UM, you know, we're excited about owning that name, especially if you get a sell off you know, uh, if people get worried about you know, casino is closing and things like that, that's just gonna be a great opportunity over the next you know, twelve to eighteen months. What about

a bank like First Hawaiian. Yeah, I think that's a similar, um, a similar situation where if you can get um, you know, if you can get into a you know, maybe a more reasonable valuation with UM you know, again with interest rates you know falling here and really hurting financials. UM, these guys have a you know, three point eight percent dividend yield and looks very good when you're when you're comparing it to a you know, one point two percent

ten year treasury um. These guys never took tarp Um, you know, pretty pretty conservative, you know, back in the financial crisis. Never took tarp Um founded in eighteen fifty eight, so really kind of a duopoly with Bank of Hawaii. And they're also UM sort of a play on not only the military that that's over there, but also UM the reopening UM and and you know, tourism coming back.

And I think it's one that UM doesn't seem to me to be a UM, you know, real risky at all, but but certainly offers a lot of upside should you see rates you know, drift higher as we get past this delta variant. Sandy Villery, portfolio manager at Villery and a company two billion dollars in assets under management, joining us this afternoon from New Orleans. Sandy, thanks so much for taking the time. Thanks for listening to Bloomberg Business Week.

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