Taper and Timetable Are Key Issues for FOMC

Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot Com. You can also listen to our radio show at two pm Eastern Time on the Bloomberg Radio or watch us on YouTube search Bloomberg Clovel News. We continue to break um or deal with, you know, outbreaks and some progress and

then some setbacks, Doctor Randa Meadows. Though Tim is present population health over at Providence Health System, one of the largest nonprofit health systems in the US, and you might remember they were home to the first confirmed COVID case back in early so we really appreciate their perspective, she joins us on the phone and Rent in Washington. Doctor Meadows, good to have you back with Tim and myself. How are you and what are you guys seeing there out west?

When it comes to COVID. It's great to be back with you. And what we are seeing is we still have some areas of spikes. Surge is still occurring, like in eastern Washington, Montana, and Alaska. But thankfully we're seeing a little bit of plateauing in California as well as in parts of our Again, Washington seems to be fairly stable as well. We're not over the hump, but it's over seeing a little bit Doctor Meadows Daylight coming true. Just to confirm are these outbreaks? Are these happening in

unvaccinated populations? Predominantly unvaccinated or small percent are vaccinated? Is that most of the let's can say the few that I think our breakthrough vaccinated or usually people don't remune compromise or other chronic illnesses behind them, um, but mostly unvaccinated. And are you right now? Where are you right now? Falling when it comes to to boosters and what you're seeing as far as people coming in who want boosters or guide it's coming from a doctor's about who should

get a booster. So we're saying a lot of questions and inquiries coming in and we are actually sharing with them what we know, UM, including the most recent announcement coming about the FDA Panel of Advisors recommending boosters for people who are be ncompromised. We're waiting for their final word on people who are over the age of sixty five getting it, who are otherwise healthy. UM patients are asking about it. You know, It's it's kind of a

mixed bag depending on which community you're in. Some anxious to get it and some still are waiting to get the first shot. I'm like, poke me as much as you want. I got my shot this morning. I'm like,

um no, but it is. It is important, and I do wonder we keep reminding doctor Meadows, you understand this so well about the importance of community and so the importance of individuals who don't even have a first shot of getting a first shot of making sure the developing world is getting vaccinated, because we can't move forward as a global society and community unless most people get some form of vaccination right or some kind of immunity. You

are absolutely correct. If we leave anybody uncoverage, it becomes a hot spot that they convince spread. It's also a hot spot for mutations to occur. So everybody needs to get it. So I am curious, are we? There was something I was reading or listening to this morning that I think was looking at China specifically, how maybe they are they shut down kind of their cities. I mean, are we? I mean, this is it, this is how it's going to be moving forward. I mean, you can't

convince maybe everybody to get a vaccine. We kind of know that already. Um So, are we going to be constantly in a state of we'll see some COVID outbreaks, people would be getting boosters. I don't know. Like that's what I'm trying to understand. You know, I think, first of all, I think it's too early to tell, but I can tell you that I'm going to agree with you that I hope certainly not. I think what's going to happen as well, we'll slowly but surely convinced more

people to get the vaccine. Um, the people who actually have gotten sick from COVID may now become our best folkespeople from encouraging their family and communities to do it. Um. But I don't think this is going to continue just forever if that's not the way that vaccines and pandemics work.

Um So, I think what we're going to find is that we're going to see the count's starting to go down again closer coming into December, unless another new variant comes up, UM, and I think eventually over the next couple of years it will start to blend in a little bit more. So. You just mentioned you got your flu vaccine. There may be a time when we're getting a flu vaccine and a COVID mixed together combination vaccine yesterday.

I will do that yesterday. Dr Meadows. As a parent, what should we know about or how concerned should we be about about kids? What are you seeing in the Providence health system when it comes to kids who are severely all those who don't even have the chance right

now to get vaccinated because they're not old enough. We're seeing an increase in the number of children who not only are testing positive of but even because it's the magnitude of the number of people are exposed, including children, we're seeing more kids coming into our hospitals and becoming more s really ill. Thankfully, Um, the mortality or death rates from them is still relatively low. But I gotta tell you, if it's just one kid and it's my kid,

that's way too many. Agreed. To put that out there. Agreed, agreed, Um, talk to Meadows. Sit tight. We just have to do a little bit of news. But we will come back and I would love to continue with you. Dr Ronda Meadows is our guest president of Population Health at Providence Health System, joining us on the phone from Wenton, Washington. Are you just kind of waiting? I mean you have a little one. Yeah, we do. So. Part of the reason I was off over the last week is because

he started preschool, so we did. It's like a phase and thing all parents are familiar with this when kids start preschool. You know they're they're going into an hour and a half and eventually you know a few hours and then all day. Um. But you know, he's not keeping his mask on. He's two and a half. He's not he's supposed to wear a mask at school. Not keeping his mask on, But who can blame him, he's two and a half. He's two and a half. It's

not required at the school. They's suggested, but you can't really require it to an aff yeal to wear masks, right exactly right there, little critters, And like, so what do you do? So are you kind of bracing? Yeah? Well so they do weekly tests, which is great. The kids. Yeah, the kids. Yeah, it's very hard to teach it to year old how to spit. But then I learned how to do it and it just doesn't stop. Yeah. Great,

Probably stay tuned. All right, folks, we're gonna come back with Dr Meadows in just a moment talking about the day's latest COVID headlines. You're listening to Bloomberg Business Week. I'm Carol Masser, my co host Tim Stanovic. This is Bloomberg Radio. You're listening to Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stenovic on Bloomberg Radio. All right, let's get back to Dr Ronda Meadows. She's President of Population Health at Providence Health System. Still with

us on the phone and written Washington. So one of the things that we've certainly seen as society stressed, we've seen healthcare workers stressed. Uh, Dr Meadows, what are you seeing on that front? So absolutely not just stressed, but exhausted and um and dismayed by by some of the contempt that they feel for the very people they're trying to help. UM. So, our cases are increasing, our hospitalizations, What do you mean What do you mean by that?

What do you mean on account you know? Oh, actually what I need is UM. Not only are people that are on vaccity becoming end to seeking care, but those some of those same people are standing outside of our hospitals who are protesting against vaccinations. UM. They get letters left on the on their car shield when they come out from a long shift working the emergency room or in the hospital. UM, they see the social media UM disparaging comments against them what they're trying to do. So

it's not just about the vaccine. It's basically about their efforts to try to help people and say people and promote the science getting a vaccine, reducing the transmission and

reducing the number of people who need hospital care. On the first place, Well, we live in a world of scarce resources, and one narrative that has emerged over the last few weeks has been the way that I see use in certain parts of the country have filled up, and you see percentages in the high nineties in some places in the past few weeks, and I wonder about the decisions that doctors have to make about, Okay, who is able to use this scarce resource that we have,

whether it's UH, you know a certain number of of nurses per patient, um or a certain number of patients per nurse, And I'm wondering what goes through a doctor's head when they have to make those decisions. Well, first, I can tell you that the doctors aren't making the decisions alone. We are actually actually a well prepared to

try to make the decision. They're still hard, um. I think what you're referring to is will we go to a crisis standard of care when we're trying to make a decision about what little resources, how will we use them as we will we use them for and what so? How do we decide that kind of stuff? You know, you don't want to be in a position where you're having to ration care, but that's where we are in

some places. And Tim, I want to tell you it's not just about rationing care, but people who are being treated for COVID's rationing resources for anybody who needs that ventilator, oxygen therapy. The doctors are nurses. That's what I mean.

Frustrating to patients and to caregivers if people who are using resources that essentially don't need to be there, People who could have been vaccinated and wouldn't even be in the hospital and perhaps are making it more difficult on patients you have a heart attack or some other emergency condition. You're absolutely right, and we see that and we feel it. And for the most part, I think our doctors, nurses, caregivers that are in the they're trying their best to

do what they can, but they're only human. Well, we wish you luck exactly, um, and that's something we need to remember in terms of what's going on today, what's going on tomorrow, and we really appreciate getting another glimpse of what you are seeing. Dr Rhonda Meadows stay Safety Well, President of Population Health at Providence Health System, as you might recall, home to the first COVID nineteen case confirmed back in January. She joined us on the phone from

written Washington. That's tough. It's something we're approaching the two year mark as to where you know, when COVID was circulating around the world in the United States, and it's

just it's mind boggling to two years. Two years and I know, like my daughter's gone back to school, she's in college now, and they have a vaccination policy, but they gave some leeway of kids to get vaccines after they came back to school, and there are cases coming out and they're keeping kids in classes, but they're trying to, you know, trying to make it work, but it's tough in masks and class masks and class many closed place yep, yep. And there is a vaccine mandate, but again they were

allowing kids to kind of get vaccines. So far, so good, So far, so good, but there are there are cases that that are definitely breaking out. This is Bloomberg Big to This Week with Carol Messer and Bloomberg Quick takes Tim Stenovic on Bloomberg Radio. Well, the upcoming sooner than you think issue Bloomberg Business This Week out later this week. Already though on the Bloomberg and at business week dot Com.

It's a story that takes us Tim inside Amazon's flagship fulfillment center outside Seattle, and it's all about algorithms and robots. They rule sooner than you think. They're here already. Joe Weber is editor at Bloomberg Business Week. He's with us in the Bloomberg Interactive Broker Studio. Matt Dave is technology reporter. He wrote the story. He's with Bloomberg News and he joins us on the phone from Seattle. Uh, Joel, what is so special about this one fulfillment center that Matt profiles.

So it's outside Seattle, and it has the reputation of being a flagship sort of almost like a like a test lab. I guess you could think of it as And I think part of that is just, you know, proximity to h Q. You can get those executives, executives coming by and saying, hey, in a second, how do

you guys do things here? But what they've really done, you know, the significance of this is that this was the first fulfillment sale center that was able to process more than a million packages a day, and so obviously that you know, once they optimized that, it was like what else can we take it? Um And And the secret to that, though, as Matt has revealed, is that there's a lot of algorithms. There's a few robots, and the humans work for all of them, right, Matt, Yeah,

that's right. Honestly, the starting point for this story, I met a guy who used to work at Amazon, went and jump somewhere else and he said, Man, I'm doing so many things that I never had to do back when I was at an Amazon warehouse. They just automated all of that for me. Well, tell us more as you walk um BF I four, which is this massive fulfillment center outside uh Seattle, tell us about it. Did you go visit? I did, Yeah, And it's the place I've been a couple of times over over the years

writing about Amazon. You know, as Joel said, they'd love to have folks in for tours. They're really proud of the facility. It's just a big excurban rectangle beside the fifteen football yield. Go in and there's this kind of low hum. But the weird thing for me is it's kind of quiet. Everybody's sort of in their own station. You know, most people, probably by number, are are putting something in a shelf um that's brought to them by a robot, or recreating something from a shelf and sending

on down the line. Um. You know, a couple of thousand people a day just you know, doing roughly most of them the same task over and over again, whether it's picking something off the shelf, putting in a package, and taking orders from from a smartphone app all time. What does your instinct tell you about a facility? Like this when you walk inside it and you see it, does it seem like, given the number of packages it's able to process a day, does it seem like more

people should be there? You know, it really does. Um that the places there's a there's a low hum, but it is kind of you really quiet, like you would you would assume hearing figures like a million packages the day, that there'll be more more frenzy. But Amazon's just got it down to such a science that everyone's just sort of, you know, quietly going about their business that at their station, um, quietly working for algorithms and robots. So what is the

hue to that they even told that? Well, it's it's you know, working an Amazon warehouses often an unpleasant place and has been been widely reported. Um. Amazon's productivity tracking

systems are are real precise, right. They can tell when you're working, They can tell when you put down the scanner, you know, So if you're in one of these frontline jobs, there's always this voice you know sometimes that it's just literally account countdown clock on your workstation telling you, um, you know, exactly what they expect you to be able to do. And Amazon, the very aggressive company sets that target real high. Um. So that's that's the life for

the front line. But one of the things that interested me, especially given that that story is so well known, as so, what the heck the managers do in this construct? Right, if if these people are working kind of self directed, what what are the people you know, at the top of the pyramid in a building like this, what do they all do all day? Well, they get to manage a lot more people, right, they do um and and

a lot of what they do is HR essentially. You know, they're they're trying to take it the best set of people. They're trying to troubleshoot when something goes wrong, you know, just because again all of the soft where whizzes that Amazon have taken taken things out of their hands, right, they don't do um staffing planning at a at a granular way. A lot of you know, warehouses in any company will do right. Most places you go to work and you know, the boss or the schedule tells you

where to go here, the schedule gripped up by by algorithm. Right, there's just so much that's been taken off their shoulders kind of with the aim of getting getting this this thin line of managers to effectively manage thousands and thousands of people. Um. So when you when you think about this, actually just real basic question. What's b F I F stand for? What? What is that? So it is a reference to uh an airport in Seattle called Boeing Field.

Every every Amazon building across the country takes its name from from whatever the regional airport is. Okay, So that was a big question I forgot to ask during the edity confessional. But is you get to know how the sausages made? The other thing is you know, obviously this is somewhat of a secret weapon for Amazon and is

allowed them to really become such a dominant company. But how does this automation compare with you know, the Walmarts and the targets of the world that that compete with them. Folks are definitely closing the gap. Um. Amazon has you know, built a lot of its technology, It's bought a lot of its technology. We read about their their similar acquisition of a little robot maker called Kiva back in twelve

that gave him a real big head start. Um. But companies you know are imitating what Amazon does and they are closing that gap, right Amazon's biggest advantage a few years ago was getting things out of these buildings as fast as they can. You know today they're looking for for secrets also, well, just because you know, the targets of the world, the Walmarts of the world are are kind of taking their cues from Amazon's robotifizes fulfillment and

and put it in their own operations. Not from a financial perspective, the ultimate goal for for any company that has this many employees is to reduce the number of employees because they're so expensive. Help us see into the future and Amazon's ability to actually automate nearly everything. Amazon has a set aside full automation as a long term goal. UM, it's something there their technology teams and their roboticists are working towards. I think realistically they don't see that as

practical for a long long time. UM, but that doesn't mean they can't get savings along the way, right We We talked to some folks who had insight into their key acquisition and said they saved something like on labor costs in the first implementations of their Their robots come to people, um operating methods. So there's there's definitely a lot of costs that that Amazon can look to reduce, you know, without going kind of that that dream of of a fully automated to samably that doesn't require any

any humans at all. So how much better has this stuff gotten with with practice in time? Is there any sense of that? We do know that how to call it? In a in a five or six year period, they were maybe three times as fast, right, it's date of

the art. Warehouse um, you know, roughly a decade ago was doing something like three hundred thousand items a day, as you mentioned, kicking us off, this facility can do a million plus that that stat though I put an afteriston that's getting a couple of years old now out, So it would not surprise me at all of Amazon is setting a new threshold and just just isn't quite ready to brack about it yet. All right, So to be feared or imitated or both, oh, certainly both depending

on depending on your line of work. But yeah, they've definitely reshaped warehousing in their image with this kind of technology. It's an incredible read. Um that day. Thank you tech reporter at Bloomberg News joining us from Seattle, Joe Weber

in our interactive Broker Studio. But I think it's interesting because I think we expect robots and automation to take some of the lower level jobs, but it sounds like you'll need fewer, maybe higher paying managers also in the process if other companies start to follow what Amazon's doing, and I think it's like inevitable that other companies will write, like if you're three hundred thousand packages a day to a million, it's like, how do I get that? How do I get that? And how do I reduce costs

in the process? All right, sound of the future. Alright, we gotta run. Joe Webber, thank you so much. Check this out sooner than you think. That's the upcoming issue of Bloomberg Business Week magazine. You are listening to Bloomberg Radio. You're listening to Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes. Tim Stinovik on Bloomberg Radio. So the f O m C FED will reserve Open Market Committee, kicking off its two day meeting today, decision we know

expected tomorrow. Fed officials Tim expected to hold interest rates near zero while telegraphing tapering of the FEDS and twenty billion dollars in monthly bond purchases in that policy statement that we get at two pm Wall Street time tomorrow.

But of interest, of course, as always j Pal's press conference, what he has to say about some of the concerns on investors minds Evergrand COVID, debt ceilings, inflation, jobs que on that subject bridge words, Ray Dalio caught up with our Tom Keene earlier today and Dahlia saying another round of quantitative easy yep, another round none out of the question. I think we're going to get another round every another round of q QUEI. You're predicting another round of QUEI,

not immediately. I think that what happens is you get a taper. I think like every tightening of interest rates has been less than the one before it, since and now when we had zero, then we did kwei, and every QUEI has been larger than the one before before it because we've accumulated so much that and that we're now printing. I think that you'll have probably one pull back and then you set the markets down because the duration of the bond market and the duration of assets

is longer. That means interest rate sensitivity is greater. You have that particular correction, and then you'll have another round of that fascinating Bridgewater's ratelio earlier with our Tom Keene. Let's get another perspective. So glad to have back with us. Steven Skanky, chief economic advisor at Kiel Point, former U S. Treasury and White House National Security Council staff member based in Washington, d C. And that's where we find him. Steve. Good to have you here with Tim and myself, So

let's get that perspective. What do you think about another round of QUEI at some point? Well, Carol, thanks, thanks for I mean to be back. It's always a pleasure to be with you. It certainly is possible that we'll need to have another run of QI, but but that isn't going to be. What's out of the gate next. The Fed is is looking to start a tapering program. The market is expecting that. You know, August showed weak employment growth and moderating inflation, so it's not like they

have to do anything. I think it's fair to say that overall the economy hasn't made substantial further progress, which is their touchstone. But they they will talk about it. They will try to work out a plan I believe that they will hint at when it begins. But to the point that the radialio made, they could get into it and and find out that they have to reverse course. Why why do you think that? What tells you what's the data that you point to when you say that

the economy has not made further substantial progress? Well, just the August employment numbers. Uh, we're we're far weaker than consensus and certainly what the FET is looking for. Um and even the expectation of retail sales, which turned out to be fine, we're below what. Uh, folks need to to see to see that the economy is really getting traction.

It doesn't look like it's collapsing, but it's it's not creating jobs at a at a pace that the bet is is needing it to do still millions more to get still, millions more steve to get back to work. I mean, could we possibly be facing a scenario We're not all of those jobs come back and it's a different economy post pandemic. I think we're seeing that already, Carrol, that it's going to be a different economy. Um. The you know that the fact that the unemployment rate is falling,

but we still have large numbers of people looking for work. Uh. You know, the simates as to how many people are looking for full time work in jobs that they would like to have is way beyond the number of people who are listed as unemployed. The fact that we don't have any positive movement in the labor force participation rate

means that the growth opportunity is necessarily constrained. Um. The the impact of COVID, particularly in the United States, continues to be a big issue, and the government you could just see, is is struggling to see how how that's going to get worked out. You know, the moves of the president made a couple of weeks ago, we're surprising, but I think they point to the level of tanks and concern about what has to happen to getting people back into the labor force and back to work and

back contributing to productive economic growth. Does that mismatch between demand for jobs and supply of jobs is Does that tell you that we're going to see serious wage increases from employers and that is a sign that inflation will be here to stay. We certainly can expect to see um significantly meaningful increases in wages to to get the people back to work. It seems to be that there's a couple of things going on. What is what is

technical and technology based. There have been some interesting articles on it on how the automatic of the automation of resume scanning has put a big obstacle in getting resumes of people who would like the jobs actually hired into the job. You know that the second thing the concerned about, COVID has has kept a lot of people whose ballot sheets are just fine from going back into the workplace.

Now we see that, we see that a lot heyt just got about seconds here, Um, Steve, I wanted to ask you, ever grand or China remaking its economy, are we likely to hear anything uh from the FET on that? And should we or do you want to hear from the FET on that? Well? I certainly don't want to hear from the FETE at that about that. If we hear from the FET it means it's way worse than any of us think it is or ought to be. Uh. I think at the end of the day, that's that's

probably not a big issue for the US economy. Uh. It's certainly sparked some here in markets. But I think the good news about ever brand is that, uh, that negative impact gets worked out pretty quickly. Hey, thirty more seconds, really quickly though. But if China's remaking its economy or Andy Brown and Bloomberg saying, you know, we may have to get accustomed to much lower growth rates in China, is that something that would ultimately impact the global economy

in a big way and possibly the US just quickly. Yes, it will have a negative impact on global economic growth, but I think not so much on the United States. You are a gem, come back soon. Steve Skanky. He is chief Economic Advisor at kill Point, former U S. Treasury and White House National Security Council staff member based in Washington, d C. That's where he found him taking lots of notes from that room a journal. Yeah, but you let me drive. Oh no, no, no, no home, honey, please,

I'll do the right drivel. I want to drive all drive the questions dry. This is the drive to the globe community. Thanks, we'll drying us Dawn on bloom Bird Radio. All right, just about ten minutes left in today's trading session. We have been bouncing around or offer highs and loads

of this session. Green on the screen though, with those major equity averages, but little changes in particular for the TAO and the SMP now stack up four tons of a percent, as we heard from Charlie, biggest gain there among those major equity averages. Let's get to it. Drive to the close with Eric Schoenstein. He is managing director portfolio manager Jensen Investment Management. They've got more than thirteen

point four billion in assets under management. Among the funds that he helps manage, the Jensen Quality Growth Fund, which TIM is beating most of its peers in the past three years, up nearly fourteen percent on average annually according to Bloomberg Data. Eric, good to have you here. What's front and center for you? Uh? Well, first and foremost, thank you for having me um front and center for

us as an investment team. You know, probably trying to parts through, as I'm sure many of your investing folks are, is trying to part through all the various risks and you know how they're going to impact companies, impact economy

and what that means for our investment. Investment strategy. The good news is for us is our investment strategy has always been focused on you know, what we consider to be high quality companies that are are frankly resilient in the face of risk, and so we think our companies are built to handle them. But nonetheless, risk assessment, I think is what is front and center right now. Well, yeah,

and I think China also front and center. I wonder these high quality companies, many of them do business I assume in China. I mean think about Apple for example, and in the kind of business that Apple does in China. I'm wondering how how you eric way China risk right now? Well, it's certainly one of the elements that needs to be weighed.

I think we have a um you know, you can certainly say we have geopolitical risk as a as a as something that needs to be considered now, perhaps in ways that it didn't need to be considered a few years. Why why do you say that? Because we've gone through you know, not eleven, We've gone through some really serious UM stuff over the last two decades or so. So what's different now? Is it just a China story that's the geopolitical I think? But well, yeah, what I was

referring to really is more of the China story. I mean geopolitical in terms of you know, terrorist activity and some of the other things that have happened. Yes, and those are things that should be considered. But I think from the standpoint of how, you know, trading partners in China's growth as an economy, growth is as a you know,

a nation that is more formidable. They're certainly trying to play a larger part on the world stage, and that that has real impact on on every company that does business in China, and certainly the ones we invest in

are not immune to that. I think that a bit of the difference for us from our perspective would be that, you know, these are multinational companies and so I don't know that we're necessarily in a position where China would be, you know, the largest part of any one of these businesses or their revenue streams and they so there's some level of insulation. But nonetheless it's a it's just one of the many things that we have to be thinking about, both domestically as well as globally in terms of the

impact on our business. Well, I take it you're not invested in casinos that have a large portion of operations in Macau because some of those typically the casino side of things doesn't meet our screen. Our you know our screen because of the consistency and quality means you know that they have two companies for us have to generate a fiftcent return on equity every year for ten consecutive years at a minimum, which means their business return is

consistently above their cost to capital. And casinos are a lot of fun, but they don't necessarily meet that criteria for us. So, Eric, how do you read into what happened yesterday in the markets and whether or not we see this as a signal or you see this as a signal that there could be a further pullback ahead. I think what happened yesterday is is emblematic in the fact that the markets searching for something to help direct it.

And you know, we've got a lot of moving parts, everything from what is the Fed going to do, to what kind of tax legislation is going to be out there, to what kind of spending, how are we going to treat the fact that we're going to have a fairly large gap in terms of you know, economic stimulus from what was provided this year to what's provided next year, and all of that creates a bit more of a troublesome direction in terms of trying to think about where

things are headed. And so any event like what happened yesterday which China, can become a catalyst for volatility. And I think that's what we're probably facing in the times in there, in the weeks and months ahead, is the potential for higher volatility. The anecdote to us for higher volatility is to look for companies that are less variable in their business performance, and that that speaks to our

high quality investing style. All right, so you have to pick names, and you do pick names for the funds that you manage and help manage. I mentioned the Gentsen Quality Growth Fund, which is got a bunch of investments in names like Apple, Microsoft, PepsiCo. There's a gent and quality value fund I think I mentioned in terms of the problem the performance um that's invested in the like I think Crown and Hasbro, Equifax. Tell me, how are

you picking names right now? Are you finding lots of opportunities? We actually are still finding good opportunities. I think the reality is is that you know, everything that happened last year from a momentum perspective was really focused on, you know, concentrated on very large companies and just a few stocks,

the average company was mostly left behind. And from evaluation perspective, even in the last month or so, you know, we've seen the average stock probably dropped in double digits or so, and so that's an opportunity from a yeah, from evaluation perspective, that presents opportunity. I think the key though for us is it's not strictly about valuation discipline. It also has to be a very strong fundamental opportunity and that's where you can see, you know, in our portfolio. You mentioned

the Quality Growth fund. For instance, you can see a Microsoft alongside of PEPSI. Now, clearly there are different growth rates, there are also different valuation opportunities. But our focus is to try to find to thirty really great combinations of

fundamental strength and valuation opportunity to comprise the portfolio. And the same thing would be true in the value strategy, although it's a little bit larger companies and a little bit smaller in cap you know, but in every case, the pillar of fundamental fundamental strength based on high business returns against across the capital and then the valuation opportunity is really what drives us. All right, listen, thanks great to check in with you. Eric stones Stone, Managing Director,

portfolio manager, Jensen Investment Management. I did mention fun performance before. It's the Gents and Quality Growth Value Fund which is beating most of its peers in the past three years, up nearly four on average annually, so I just wanted to make sure that I was clear about that. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio

or watch us on YouTube. Search to Bloomberg Global News