TSMC Stuck in Middle of Global Panic Over Chips

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. Let's get right to our guest, because there's lots of stuff going on, certainly watching the continued rollout of the vaccine and new development, certainly when it comes to the virus. Dr William Hasltin is back

with us, chairman and President of Access Health International. It's a nonprofit thing tank on a mission to improve access to high quality and affordable health care for people everywhere. He has found in more than a dozen biotech companies, including Human Genome Sciences. His autobiography, released earlier this year, My Lifelong Fight against disease from Polio and aids to two COVID nineteen. And he's also got a book out. I don't know how he finds time to sleep called Variance,

The Shape Shifting Challenge of COVID Natine. He's back with us on the phone in Connecticut, Doctor Hasseltine. Good to have you back. How are you, Carol. It's a pleasure to be here. Thank you for that very center this introduction. I just speak the truth. Um, tell me how you're doing, and tell me when it comes to COVID headlines, vaccine headlines, what is it that you are constantly kind of looking

out for. What's kind of front and center when it comes to the information that continues to flow out on both the virus and the vaccine. Well, first thing to say is, we're very fortunate to have great vaccines that are working really effectively and very safely, especially the m R and A vaccines. They're protecting people really well. Uh, they are as safe as of any vaccine I've ever seen, and we're very fortunate. The biggest question for those is how long will they be protecting us, and how well

will they protect us against the variants? And for how long? Today this morning, we got the first shoe that dropped, and that is that one of the best of all the vaccines, the moderna vaccine doesn't protect against two of the common variants after about six months very well, at least as judged by the ability of the antibodies in people who were vaccinated to neutralize the virus as different

from a real vaccine. Test is showing that it's failing to protect people in real life, but it's a pretty good indication that it's not going to protect people for very much longer, so that the net result is also quite positive. And the very same report it said, if you get a booster at six months, you're golden again. You're maybe better off than you were before. And so it's uh good news, bad news story. Bad news doesn't last that long against the variant. It news, there's something

to think. So what I've done is I put in my calendar six months from when I got my last shot, I'm going to get another. So, I mean, do you think we'll start to see a recommendation from the CDC soon for that for that booster shot. CDC has been a little slow in this pandemic, but I think they'll come to that position. And you know, the first person to mention that was a head of fiser. You may remember that just a few weeks ago Albert Boule is saying that of the fightser shot, so he knew something

that we did it. But now we do from the moderna publication, which is six eight months out, fewer than half the people are protected against the Brazilian and the South African variant according to these studies of antibody neutralization. So if we don't pursue a course of booster shots for everyone, mark your calendar's kind of thing right now,

could we potentially see another outbreak? Absolutely, because most of the viruses that are infecting people in the United States and I should say around the world today are variants. They're not the original UH strain, and the reason for that is the variants are more infectious and they displace one. We're now in the fourth wave of increasingly transmissible variants. First wave was what came out of China a year

ago February. It changed and swept the world. Then late summer early fall, a whole bunch of new variants came and they displaced whatever else was there. And right now the Indian strains seems to be displacing even the British strain in Britain. So this is a natural course that we're seeing faster than we expected. Um and it does mean that I believe we will be seeing recommendations for

six months boosters pretty soon. So does that mean Dr Hazeltine, that it's every six months or is there a chance that modern advice are able to change the formulation somewhat slightly and actually give a shot that has longer lasting antibodies until we get new types of vaccines, and I'm not sure how we're going to do that. There's some ideas on the drawing board, but until we figure out how to make vaccines that are going to last longer, it's probably going to be a minimum of every year

and possibly more often. We're to the point now, though we're not right. And we're to the point now though where where some of the healthcare professionals who got the shot in December would be approaching that six month mark. We only have about twenty seconds left, Doctor Hezeltine. Well, you're correct, I were approaching the time when it's about time to get and I should say, if you haven't caught those two vaccines, the other ones you may need

a little more often. So I think it's time to consider booster shots for the earliest people who are vaccinated. So let's talk about You wrote a story, um and uh and it talks about this anti viral drug cocktail. So tell us about what this is about what this might do, especially for a place like India, which is really having a difficult time right now with COVID nineteen. Well, there are two ways to prevent infections on our vaccines,

which are by far the most convenient. You get one shot and and or two shots and you may have many months to many years of protection. Or if you're exposed, to take a drug cocktail that will prevent you from getting infected uh for a week or two. Um. Let me give you an example of something that happened last year. There's a new drug called Zofluza that was developed by a Japanese company now sold I believe in America by genn Tech. Uh. And if you are exposed to flu,

your kid comes home from school with the flu. Uh, you take that one pill and you're you have about eight chance you reduce your chance of being infected by that's what we're talking about. Drugs. You can take when exposed or when you think you may be exposed to prevent you from getting infection. Now it turns out that the slow poke in treatment of and prevention of infection

has been drugs. But they're rapidly catching up. And just a week ago there was some very very interesting news that many of the drugs that are useful for treating hepatitis C. There are seven different drugs used in two drug combinations work in a very unexpected way against the protein of the covid virus called n SP three, and to everyone's surprise, it's powerfully synergistic with another drug called ramdesivier and one and one in this case makes ten,

not too and so it's giving us the idea that there should be a lot of combinations of drugs which together can be what's called synergistic the one and want let equals sent. The great thing about that discovery is India is the powerhouse from manufacturing small drugs and can produce these drugs, which in the United States cost about eighty dollars for three months treatment cost maybe thirty five dollars. In fact, new costs thirty five for a three months treatment.

So if you only need them for a few days. That you're only talking about a couple of bucks for treatment, So how would this for that couple of other dogs? And you're in good shape to help stop this epidemic, not only by getting vaccines which are in short supply, but by using combinations of drugs. Well, So how would this How would this work in a place like India right now? How would they how would they distribute this quickly?

And how would they know who to distribute it? Tours it's safe to assume that the infection right there is so high that you can assume you've been exposed. That's probably a pretty good assumption. I don't think there's enough drug right now. For of all, we don't really know what the right these are pills. This isn't a shot. Ram decipere now has to be infused and the drug that we now know it works best with these hepatitis C drugs their pills, but it works best with ram desipere.

And they're probably other drugs that are being developed. MOLL no peer of heer by Merk and other companies, proteation inhibitors by Fiser and other companies. Uh, it'll take a while. But if I were India, I would do a massive warp speed trial to see what's working. With so many people infected, you could get that answer in a month

or two. So essentially, rather than rather than, rather than somebody getting the vaccine, they're given this cocktail tail what at first signs of it or just in general no, no, or you're even just exposed. You're exposed. Okay, it's like with with with no losing. You don't have to be infected.

You don't want to be infected. So if somebody comes into your household or you're at a workplace or the school where people are getting the fluid, you pop this pill and your chances about decreased that you're going to get it. That's fantastic, and I think it's a whole different approach that people. We're going to have a farm, a big pharma copea of anti sarroscopy drugs in about six months to a year, and I think that will be a good supplement. The great thing about those drugs

also is resistance to vaccines. Resistance to immunity is parallel and like a different world from drug resistance. So you get that maybe the best of both worlds. Vaccines plus these drugs to protect yourself against all of these very I think a lot of good news is coming down the Hey just quickly, just twenty seconds tho, Dr has I mean to be clear that you take this pill and you're good for a couple of weeks or is

it longer than that? Probably not longer. At this point, it's taken us thirty years to get shots which might protect us for eight to nine months from HIV. You've got to really be careful with long term effects for long acting drugs or people who are entirely healthy. But we can get there. We can get to a shot that will last probably a year or more, but it'll take us some time, but we can get there with their drugs too. All right. Yeah, we've said we've got

to about have a bunch of tools to do this. Um. Dr Heseltine, thank you so much. Always appreciate checking in with you. Dr William Hazeltine, Scherman and President of Access Healthy International. What are you thinking? I'm thinking how long are we going to be in this situation? Right? Yeah?

It's what it feels like. It feels like, I mean, my my thoughts on involved a lot, but it's interesting, like He's saying that, you know, you have multiple tools because there are probably ultimately people who will not get vaccine. So how do you treat somebody who all of a sudden says they're exposed, so you want to prevent them from getting it, so they get maybe a cocktail. Yeah,

it's a great point. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So there's a story in the upcoming issue of the magazines out later on this week on newsstands, online, on on Bloomberg about how the company that's become the leader in the most advanced types of semiconductors on the market today is TIMS stuck in the middle of a global panic over chip supply company t s MC. Joel

Weber is editor at Bloomberg Business Week. He joins us now on the remote from Brooklyn, and Joshua Breustein, technology writer at Bloomberg Business Week, joins us on the phone

from New York City. Joel, I was I was pretty shocked to read how much Samsung and t SMC Intel are spending divine designing the next generation chip business given that here we are now in this global supply crunch, well billions, and the number even like the number that we've seen from from Intel, the twenty billion that they want to throw at the Arizona project seems paltry when you get the big numbers that the t s MC is the world throw around, and you know t s

MC is is I think pre chip short edge. There are probably a lot of people who had no who that company was. You know, if you're if you're in the in the tech business, Uh, t s MC has quietly become just a juggernaut over the past couple of decades, and so I think a lot of people suddenly woke up to the realization that this is a huge powerhouse

company UM in the midst of the chip shortage. And what the story that Jock edited in in this UM this week's issue is about is effectively t SMC sort of finds itself in the middle of now a game of geopolitics that looks really complicated. So so, Josh, what did uh what did our reporters discover as they dug into this story. Yeah, so the t SMC story is

is interesting. This is a company, as Joel said that was really unknown UM outside of tech circles until very recently, and it pioneered a process for making chips where it would allow its customers to design the chips and then it would manufacture them. This is different from companies like Intel, who were handling UM the entire thing, and this really

was a revolution in the chip industry. UM t smcs real big break came when it began manufacturing chips that Apple was designing for its iPhones, and that allowed t SNC to really learn how to make the most sophisticated chips on the market, and that's been a great business

for it. It is UM an enormous company. It's very important throughout the global tech industry, and now with the chip shortage, you're seeing officials really across the globe worrying about UM, their supply chains, and in a lot of cases wanting chips to be manufactured closer to home. The thing with for t SMC is that almost all of its highest level chips are made in Taiwan UM, and so it's going to be facing increasing pressure from places like the United States and from Europe to UH to

evolve into something that it never has been. Right and closely tied as you, as you just said, to Taiwan, which kind of puts it also in China's grasp and I do wonder how that also kind of complicates things. Joshua. Yeah, I think when when you're talking about Taiwan and UM and the West looking at Taiwan, I think there's a bit of nervousness that it is very close physically to China, UM that you might be a little bit nervous about your long term prospects of relying on something of strategic

importance that happens really in China's backyard. UM and t SNC. You know, it has uh its own interesting relationship with China. It's also not making it's most sophisticated chips in China UM and China wants to have its own chip industry as well. So I'm wondering where this leaves the companies that it that it supplies chips to. Well, I think that the companies who rely on t SMC for chip manufacturing are probably doably pretty happy with the way that

this works. They get to design the chips, they don't have to build these multibillion dollar factories where they're made. UM and you know, I think that there's UH interest in having t SMC. You continue to do that, but maybe in a way that will make companies and policymakers outside of UM Taiwan or not that close to Taiwan just a little bit more comfortable UM with the prospect

of supply shocks. Yeah, I mean, I think one of the things that is interesting about this is that you have a ton of different UH countries all wanting to throw their weight around, whether it's the US or China or Japan, and ultimately you have UM Taiwan here, which is basically I mean this is like one of basically the biggest company that Taiwan has UM and so Josh Like, one of the things that stuck out to me as I was, you know, thinking about the capital expend manatures

and UM everything else that you know, the competitors that would want to try and steal back some market share from t SMC arresting with here is like ultimately t SMC is the one with the leverage, right like you. You can't just like spool up one of these factories and do it overnight like you. You have to be thinking decades out here. So to some extent like that

they have the cards right. Absolutely, t SMC has a big head start on most of its competitors when it comes to making the most sophisticated chips, and that's going to give it a lot of leverage. Um. But as you also see add um, national governments want to throw around money as well, Like that is a potential opportunity for t SMC. It's also a potential opportunity for some of its competitors to close the gap. But closing that gap is not going to be easy or even a

foregone conclusion that it will happen. Okay, I got one more for you, Josh, which is I thought that the lead of this story was super interesting. Like to give you a sense of how long TIS and C has been around, can you rewind the clock and tell us

what we found out? Yeah, So the lead of the story UM starts with Morris Chang, who is t s MC's founder, UM, who was born in China, UM, but actually spent the early part of his career in the United States, and he recently was reminiscing about a industry conference he went to in nineteen UM with the with the founders of Intel's who were not yet the founders of Intel because the company had not yet been founded, but he remembers going to this conference, UM, going out

and having beers with them and as he put it, singing arm in arm all the way back to our hotel. Um. So these guys have known each other for a long time. UM, and you know that the basic, uh, the basic foundation of the chip industry has been around for quite some time, and they felt favored by the gods, and as Debbie points out in the piece, until passed up a chance to actually invest in the nineteen eighties in t SMC. It's just fascinating, and I feel like we're not quite

sure how the chips may fall or going forward. Um. Great great reporting, Debbie Wu. Of course, the reporter who did this story for Bloomberg Business Week, Josha Breustin, now Tech editor at Business Week, giving us the details along with Jill Webber, editor of Bloomberg business Week, and in this week's Business Week Small Business Survival guid cash is

king once again at Small Business. Who'd have thought, right, because it's like Tim bin all In when it comes to digital Yeah, especially at the beginning of the pandemic when nobody would touch cash. Rob Mandelbama is freelance contributor at Bloomberg Business Week and joins us on the phone from Brooklyn. Rob, this is something I run into because I do drive. So I go and I fill up my car in Brooklyn, and it's always like ten or twelve or fifteen cents cheaper per gallon. So I, here's

something about me. I fill up with cash all the time because I don't want to pay that extra fee. But as you report in Bloomberg Business this week, this is starting to spread to other types of stores as customer as businesses tire of those swipe fees, which add up to a lot of money. They certainly do. UM businesses have complained about swipe fees for decades, and you know, credit cards, as you mentioned, are just becoming more and

more the currency of the moment. I talked to one restaurant, you know, percent of its sales were credit card sales. So those swipe fees really add up for for places like that. Ye, swipe fees for credit card transactions the report amount it to nine billion dollars in the US or at two of credit card sales. So so how is this playing out at mom and pop stores throughout Brooklyn? UM well throughout Brooklyn and throughout the rest of the country. Um,

there are payment processors. These are the people who sort of connect the merchant to the banks that sort of handle credit card transactions. Payment processors are approaching merchants sometimes and saying, we have a way to lower your fees to zero um, and we do that by making the

customer pay them. That can be very difficult though, if you're a business and you're you're you don't necessarily want to be the one who's necessarily charging more for something because you want to provide the customer the cheapest price. It depends, right, you know, if you're a restaurant that it provides a particular you know, a particular experience or a particular kind of food. You know, people who go to restaurants because they like the food, uh might be

willing to go to to pay that extra four percent. Um. You know, if you're the only fish merchant you know in walking distance, people might uh suck it up and pay credit cards. Most people do, in fact, uh just absorb the fee. So how important, first of all, is small business to all of these credit cards? Oh? Uh, not very important, Carol. Uh Yeah, I mean, I mean they would they would disagree of course. Uh, don't forget

shops small on Saturday. But um, but you know, I mean the vast majority of credit card transactions take place at giant retailers, you know, at at the costcoes, the wal Marts, the Sephoras, you know, the target no love lost between credit cards and small business was interesting to it.

I didn't know. And in your story you talk about, you know, we get those cards that give us rewards and cash back and travel points, and merchants are the ones that ultimately are paying for those benefits for consumers. That's right, that's right. And they're much more expensive for merchants and other cards. You know, it could be the difference between paying a two percent transaction fee and paying a four percent transaction fee or four and a half or five. So I do customers seem okay with the

way this is going? According to the merchants, the credit card companies will tell you something different. According to the merchants, tim Um, yes, Uh, customers understand and they understand that they're paying for the convenience paying for credit cards. A couple of the merchants told me that they had took criticism from customers at the very beginning, but they quickly sort of came around. So I wonder if this leads to some sort of resurgence in cash. I mean, I

gotta tell you, it actually has for me. Now that I'm driving and I'm filling up my car like I'm I'm making sure that when I go to the gas station, I actually have cash. Um. But for so long the story has been that, you know, with the rise of fintech companies and Dunmill and credit cards becoming ubiquitous with square, cash was gonna die. Um, the restaurants and stores, because there were both restaurants and stores that I talked to,

did not see an appreciable uptick in cash transactions. They saw some saw some uptick and cash transactions, but by and large, um, you know, credit cards held their ground even even with the feed. So I think what it sounds like is I'm cheaper than everybody else. I'm sorry again, I'm cheaper than everybody else. Like I will, I don't want to pay for the convenience. I want to get

the cheapest price. Well, you're not cheaper than me. Okay, Because finally, a man after my own heart, I appreciate it. But I think about it too when it comes to tipping and things like that, right, because percentages are taken out, So like I do try to have a little bit of cash, um one point, right because because an individual or server gets less because the credit cards take their fees correct. Right. Uh, you know, to be honest, I don't know if restaurants uh take it out to take

that out, but it wouldn't surprise me if they did. Sure. Yeah, anyway, it's interesting and listen, we're still finding our way through when it comes to the impact of the pandemic. What's lasting. All I know is I have gone digital big time when it comes to payment with everything, especially with the

tap tap tap to pay credit cards with owns. There was even someone my daughter will telling me a story about someone who is asking for money in the streets and they're like somebody said, well I don't have any cash, and they're like, well, I've got Venomo. Yeah it makes sense. It's all you needs a smartphone in a bank account. Exactly. Um. Interesting story, Rob, Thank you so much, really appreciate it. Rob Mandelbaum, he is Bloomberg Business Week contributor on the

phone in New Jersey. Check out that story. Uh, in the magazine and all of the coverage when it comes to small business and the survival guide. You can find more at Bloomberg dot com. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So, Tim, this was the story I think you covered on Cricktake today as well, about how Uber and Lift are losing their race when it comes to the electric future. Yeah, is that Chatman is Bloomberg

News technology reporter. She joins us on the phone from San Francisco. She and our colleague Ben Elgin have this deep dive into Uber and Lift what they're doing or what they're not doing, I should say, in order to help their drivers here in the US actually get towards that sustainable future. Liz, thanks for joining us on this, first of all layout Uber and Lifts climate goals and

what they're actually trying to achieve this decade. Sure thing so um earlier this summer, after years and years of pressure from different environmental groups and just increasing academic research showing their impact on the climate with their with this, do you know what was supposed to be the future of transportation? Uber or first Lift and then Uber both committed to being a electric on the platform in the United States by so that was the pledge they made.

So then and I decided to dig in and take a look and see how those efforts were going. So how are they going? Not so great? Um, you know. There it is a long process, and it involves a lot of different shareholders, obviously policy makers, auto manufacturers, and of course the infrastructure with you know, to support the charging stations so that these drivers can um, you know, continue to do their job and not waste you know,

time that they would take to charge. But the net net of this is that they've made this pledge UM to be electric. And right now the percentage is point five percent of ride hailing companies are now electric vehicles here in the United States, and um, that's less than the point seven overall in the United States passeter cars. So basically we're gonna have to see adoption outpaced the general population by about ten x in order for them to hit these goals. And it's pretty expensive to to

still purchase these vias. Um, you know, there's still thousands of dollars more even after lower you know, plummeting battery costs and government rebase and all this. So you know, um, uber has set up some programs to try to help drivers by offering incentive. LIFT is offering no financial incentives. UM. But you know, in this article we take a look at different ways that they're approaching it, and you know, our concludean was that the efforts so far have been tentative, incomplete,

and sloppily executed. Well, let's let's take us take us through some numbers. Here. Is that because your your story opens with an anecdote about somebody named Kurt Kinder and his Chevy Bolt. Um, he only spends about five dollars per day on electricity to to charge his car. As you point out, the thirteen dollar difference amounts over difference amounts over three thousand dollars per year, and that is

money that he gets to keep. So there's five dollars of the navy versus eighteen is gas exactly what he would charge for gas. And plus it didn't even take into account the maintenance costs that are associated with internal combustion vehicles, which are more in some cases than e vs. So so what what is the economic is? Is it just the initial outlay that's so expensive. Yeah, that's it him. It's just still thousands of dollars more to purchase these

evs than it is for a gas car. And so a lot of these drivers, you know there if it is a part time job, or they're only doing it a couple of hours a week just to and from you know, their UM, you know, their their jobs, or at a side hustle or something like that. UM, sometimes they can afford it. We talked to a number of Tesla drivers. I talked to a gentleman here and in Oakland who had a Tesla and was driving UM for

for uber UM. But he got frustrated after a while because he wasn't getting any of the bonuses that he had been promised, and that Uber had said that, you know, they would give one dollar bonuses for every single electric vehicle trip that one of their drivers made. This is us sensibly to help them make the transition, to encourage

them to do it UM. But the upshot was that when we started, you know, doing some reporting and talking to electric vehicle drivers, UM, you know, a large number of the ones that we spoke to had never gotten these bonuses. So we gave that note, gave that list to Uber, and they checked into it and found that a technical glitch had occurred. Uh, they apologized and immediately made the payment and the re proactively is what was

a ten percent bonus. And then you know, we kept reporting and then we found a you know, some of these drivers aren't still aren't getting the bonus. They got the first bonus but not the second one, and so we called them again and and you know, and then

they made it, made it good with them there. So it's it's been tricky, and there has been a pattern of that also in UM with a Sacramento pilot program plan that they had where drivers didn't you know, had a hard time signing up and then oftentimes never collected these bonuses which try not tign back eighteen was fuit dollars. And then also in London as well, they just recently cut how much they were giving writers drivers there under this clean air plan. Hey lost only go about thirty

seconds left here though. Ultimately though Uber and Left have to figure out a way to get more a Vy vehicles in their fleet because of carbon emissions and controls and concerns and more regulation and just real quickly, Yeah, there is definitely pressure, but it's state by state here, you know, California has its clean mile standard that's coming into effect. Um. You know to to push some do that, um. But you know it's so far this is this is voluntary,

so and it's gonna take. It's gonna take more like in China real quickly and running out of time. But in China d D there at but they also have the support of the Chinese Government of automakers and the like. And OLAH is nowhere near its goal. Cabify um as well and grabs in in Salfys that doesn't have any goal. All right, good steps. Everything Lizette does has so much information. Go to Bloomberg dot com and read this story because it's so good. Lizette Chapman, of course tech reporter here

at Bloomberg Journal. Now, but you let me drive, Oh no, no, no no, no please, I'll do the ex me. I want to drive, Just drive by the question trying here is the drive to the globe. Thanks, we'll dry us on Bloomberg Radio. All right, So, just about ten and a half minutes left in today's trading session. We've been

bouncing around, no doubt about it. Today definitely off our loads of the session, particularly with the NASDAC which Tim, as you mentioned, actually squeezing out a little bit of a gain, was in the green just for a moment now just down about one tenth of one percent, but nonetheless of all to day, and who knows exactly why, because there's been a lot of reasons thrown out there. It's been a wild day. I was down more than two Yeah, pretty significant. All right, let's see what our

next guest has to say. Barry James is back with us. He's president, CEO and portfolio manager at James Investment Research. On the phone from Alpha, Ohio. Barry, nice to have you back here on Bloomberg. So how do you explain the day. I've seen inflation concerns initially for the sell off, I've seen profit taking, which is something that we've feel

like it's often a throwaway explanation. How do you see it? Well, that's a great question, Carol, and uh, you know, the answer is always that the sellers are more anxious than the buyer. But as we if we look at last week, you know, the oil, the energy sector was up almost nine percent, so that we would see some some bit of a pullback, especially with all the you know, the hullabaloo about you know, long lines and things of that

nature and the disruption within that that whole sector. So I think that's probably you know what is is sparking this. But underneath it, there are you know, some warning signs that we've seen. Not that I think these are long term, but the warning signs are number one, the insiders are selling and the companies themselves are selling the answer shares actively.

So those are two two groups that tend to be right and they're saying, uh, we're gonna take it, We're gonna take Give us some examples of that, Like, who are you seeing selling right now? Yeah, not necessarily the insiders and our companies. Well, the list is really really long. Um you know, I I've seen somewhere the new issuance is is you know, at just about record levels per se and um, you know, it's just all up and

down throughout the throughout the stream of insiders selling. So I don't have a specific name throughout there, but it's just I'm looking at the cumulative effect and it's it's pretty telling. It's much much higher than normal. Well and what's interesting though, is we also at the same time we came off earnings, and we saw some you know,

big buy back programs announced at the same time. You know, we just saw Amazon do a huge debt offering of eighteen and a half billion dollars and some of the expectation is that they're going to use it to buy back shares um. So it's interesting that that's happening at the same time. But your is our insider selling because at tax reasons. Uh, that's certainly part of it. I've had clients that have last year said, get me at all my gains. I don't want to go in of

this new year with with any gains. Uh So, anyway, yes, that that is part of it. But you know, they've seen this huge run especially in uh you know, some of the names that weren't so popular for some time, some of the smaller names, some of the more cyclical names and the like, and so yeah, that would be be normal to to take take some off the table.

And you know, the kind of growth we're seeing in the economy right now obviously driving earnings and you know, been driving stock prices, and it may be a little bit ahead of itself. We don't think it's a permanent thing, but we need a little bit of a cooling off period. Hey, Barry, are there any Barrish economic indicators that you're that you're seeing right now, I mean, any anything that concerns you. Yeah, the producer prices and uh as you as you just mentioned,

you know, the commodity prices are way up. Um. You know, we have oil up, You've got the medals are way up, You've got agricultural way up. So all of these things are laying the groundwork to pressure on companies and their earnings. Uh. The c p I, you know, hasn't been going up at the same pace as the p p I, and that's that makes it a lot tougher for companies to pass on their costs. So that that is one one

piece of the puzzle that that we're concerned about. Um, we're also as as we look at you know, the possibility of of inflation kicking in and the lack of personnel, if you will, um heartys locally one worker and that was the manager, one worker. Isn't that just a matter of time before that kind of corrects itself. And whether it's we were just talking about it earlier with Carl ri Kadana, whether some workers are staying home because of stimulus payment. He reportminded us at only six of school

districts have actually opened. So there are a lot of parents that are still struggling with you know, schooling their kids at home, and it's hard for them to get maybe back to work. I mean, there's a lot of factors at play right now. But ultimately that will correct itself. I agree. Um, you know, the free market, if it doesn't get interfered with too much, will we'll balance things out. It's not necessarily pretty, but yes, it'll get there and

people will probably be making more money. Well, well, let's talk about that because you actually there are some names that yet you um do like at this point, and let's talk about the mass Tech is one. Mt Z is the ticker. It's been on quite a run up about seventy two here on infrastructure, play communications, utility, infrastructure they work on uh wind and solar farms. Uh. It also I think hit a record in yesterday's training to have to check today if it hit another record. Uh

you like this one? You would commit new money to it? Yeah? Yeah, I mean you can only sell the top once, right, So anyways, um, forgive that joke. It's it's in the field that is going to be dominant for quite some time. And they are really really good at what they do there, their their sales growth against the competitors, cash flow margin, all those sorts of things versus competitors are very very strong. So they've got the financial side of it in in

good shape. They have you know, low leverage on a historical basis, and they're right in the sweet spot, you know, even with five G So uh we I've got no problem buying it, buying it at a new high. Okay, what about l g I homes uh market cap of over four billion dollars. Uh, and it targets first time homebuyers in Texas, Arizona, Florida, in Georgia, right right, Um, so yeah, this is small. I don't want to give anybody an impression this is one of the big guys.

But um, the low interest rates is a major tailwind. Uh. You know, homes in that starter area you can't find them, there's no inventory, and people are wanting to get out on their own. I think this whole COVID thing has has got people thinking I want my own place and I don't want to be in, you know, on an apartment or anything. So um, that is I think very

supportive of what they do. They've got great margins and what's important, with the prices of you know, the commodities going up, they seem to have the ability to pass on those costs fairly easily, so they shouldn't get caught in a trap of you know, being paying up to get the goods without being able to pass that along. And again, this is one that's been on quite a tear. I think it's up something like sixty almost so far this year. You don't have a problem, you think is

one can can move even higher. Well yeah, but this if we do get this little pause that refreshes these types of companies will will pause the mass text the l g I s. We have these in our our balance Golden Rainbow fund. Uh and uh, you know if if we see a pull back, would probably be buying buying more in those particular positions. Well lg UM homes is down about five so would you be buying into it today potentially? Yeah? Yeah, Um, you know it's a it's the case where you have to step up whenever

the opportunity arises. You can't just you know, wish and hope that you know, buy it on any given day. Gotta move when the opportunity strikes. All right, we're gonna leave it on that note, Barry, Thank you so much. Barry James, President, CEO and portfolio manager James Investment Research, on the phone from Alpha Ohio. 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 Bloomberg Global News