Twitter Surges After Activists Seek to Replace Dorsey

on iTunes, SoundCloud, or Bloomberg dot Com. You can also listen to our radio show weekdays at two pm Eastern only on Bloomberg Radio. Let's turn to Scott to vote. Now, he's got a great, great scoop on the terminal, moving shares and getting people interested all around this potential or I guess it actually is a transaction to the extent that we've had Elliott Management, well known investor Paul Singers Shop going into Twitter pushing for changes, including saying Jack Dorsey,

maybe he shouldn't be the CEO. Scott's with us in our Bloomberg Interactor brokerst here. First of all, congrats, great scoop moving the shares, a green b as we call it here. In turn, it's a big deal, so what's going on. So I think for the longest time people were kind of looking at Jack Dorrisey at Twitter and wondering how he could divide his time between the Twitter and then his other job, which is the CEO of Square. They're both, um, you know, thirty five billion dollar company.

Twitter is a six billion dollar company, and he's also came out and said that he was, you know, looking to spend about six months of the year working in Africa. Now, um, so, I think the alarm bell started going off for a lot of investors. And then when that happens, it doesn't take too long for somebody like Elliott to show up. So how big a holding do they have and what are they pushing for? And tell us about this meeting

where Twitter executives were there but Jack Dorsey was not. Yeah, so they own a more than a billion dollar stake in the company. Um and on Friday night they had a meeting with the chairman and the lead director. Elliott did uh to discuss some of their concerns. And I mean it's not uncommon that did not have the ce OH in the room. If you're going to be talking about the CEO and in the future of the CEO.

So I wasn't too surprised that Dorsey wasn't there, but you know, it makes it a lot easier to facilitate a conversation about some of your concerns about Dorsey if he's not actually there, And so how likely, how feasible is it that they'll get something satisfactory out of all this. I don't think that it comes as a surprise to the board that there are increasing concerns about the level of UM involvement Dorsey has in his divided attention. So I think this has got to be something that they

were thinking of already. UM. And I don't know that for a fact, but I do know that the conversations between Elliott and uh, the chairman and the lead director were cordial, uh constructive. They were described to me as and that UM, there is some hope that maybe there will be some some way, some path forward that they can work together. I also want to ask you about

sort of Elliott right now and policing. I mean, this is the second time we've talked to you in in as many weeks, I believe, because we were talking to you about soft I mean, yeah, this guy's going for it. It feels like yeah, I mean, it's a forty billion dollar fund now, and it's it's you know, you've got to deploy that capital somehow. Um, you've got the clout um and there's these targets that are just out there,

you know, Massa Son's soft Bank. You know, we're all talking about all the problems they're having with the Vision Fund and not the kingmaker that are the guaranteed kingmaker in terms of startups that I think everyone assumed it was right. And I think that so as soon as that happens in a public realm, there's only a few people that have the capital that can go into a company like soft Bank or Twitter and say, you know, hey, look this isn't right, like this shouldn't be running this way,

And Eliot's one of those people. I do if I can be sorry, I just go back to Twitter for a second. Is it is it likely that the Dorsey era of Twitter is going to come to an end? Look, I'm not good at predicting things. I'm terrible at deciding who's going to win an election or a primary or whatever. But I would say that the writings on the wall if he wants to continue to run both companies and

moved to Africa for six months of the year. There's absolutely no way that somebody running a you know, twenty six billion dollar companies should be having those side jobs. It's it's a full time job. There's a U S election coming up, there's Summer Olympics coming up. There spread a coronavirus. That's when all the users start turning to Twitter, That's when all the advertisers start turning to Twitter. And

that requires somebody's full time attention. Well, and there's so many big existential questions and we've talked about them on this show a lot around you know, Twitter's role in the world of politics, in the world of misinformation and information and all of those things. And yet, as you alluded to Scott, at least so far as it was with soft Anchor, as it has been with softing fairly

friendly at this moment. This isn't sort of storming the gates. Yeah, I mean to be clear, Elliott has nominated for directors the board. Um, and you know that's just a precaution. If things don't go well, then you know they have the people there because there was a deadline for nominating. They have those directors there. So if things don't go well, then they can push for changes in a in a

proxy fighter. I do feel like the Twitter story, how many conversations have we had, you know, I think their numbers may have been I have to go back and look at the most recent earnings, but I do think people wonder about, like kind of what is this business going forward? Right? It's well, if you look at the numbers since Doris came back in July, the shares are down six percent over that same period of time. Facebooks

are up one um. So you do the math, right, Yeah. Well, and just to point out, Twitter shares you know, really based on your reporting, up about seven percent today. So clearly investors excited about the idea that Mr Singer and his cohorts getting in there, and a kind of timeline that we can expect that we might start to see something happening here. I'm hearing that things are moving fast. All right, Well, stay tuned and you might lose another weekend.

Sorry for just a week, all right, Scott Devote, thank you so much. Feel's report of fantastic scoop one of the most read on the Blottolberg. People certainly talking about this amid a very very busy week in politics and global economics and central banks and coronavirus. This is capturing a lot of attention. A lot of pet shop boys these days. Pet shop boys takes me back. Oh yeah,

the hund pig. Uh. Nick Parrish is here with us, managing director of Crescent Partners based out in Chicago, here with us in New York City today talking opportunity zones. That's the subject of the story. So tell us what's going on out there, because we've heard a lot about them sort of in theory, but I feel like less in practice. What are you seeing? Yep, So I think you know, it's it's a good point, right, this is

a relatively new piece of legislation. It's fifteen months old in practice, a little bit older in legislation, and it caught a lot of excitement early on. Right, It's you know, if you look at the magnitude of these tax breaks, there's a huge opportunity for investors. But it's new, and it's been largely untested, and so you know, initially you sell a lot of people talking about it, but not

a lot of activity. And I think now you know, you're fifteen months in and you know, while that's only the early innings of the program, you know, you're starting to see some of that activity, whether it be in the fundraising side or actual deployment of capital. Um And so now I think there's a you know, there's a there's a subset of folks in the market. They're actually getting things done, and I think we're you know, we're starting to see that that percolate. All right, so you've

got money, I know. So so give me an idea of the types of projects were costing. You know that we're talking at Nike that where the money is going to go. Because you know that there's a fair amount of controversy surrounding opportunity zones. Are they really an opportunity zone or is it a zone that's already turning and it's just a great opportunity for wealthy investors to kind of tap into. Yeah, So so you know, the government designated where we could invest. Right, So there's finger point

I should point at the government. And I don't mean to point fingers, but you know it it is, you know they and and by the way, you know it's not all um necessarily you know, political in terms of how those got selected. So one of the biggest disconnects in the program. They used UM. They used employment statistics

and these income levels from the last census. Do you remember from your high school Civics class, WEDE a census every ten years, and so you had opportunity zones that were selected based on income and poverty levels in two thousand ten. If you think of really high growth markets and especially just coming off the crisis, so those numbers

are in particular particularly kind of skewed correct. And so if you look at where a lot of the capital is flowing today, a lot of these are high growth markets in places where nine years, ten years makes a world of difference. You think about markets like Portland, like Nashville, like Denver. You know, there are areas that ten years ago might have been very much on the periphery of these of these cities that now today are very much

in the center of that economic development curve UM. And so that's where you're seeing a lot of the capital today. But you know, I like to remind people we're fifteen months into a ten year program. You know, you're only starting to see that capital get deployed. What our hope is is that it will create a path to progress where if you build on the periphery of these areas, that will give the next developer a little more license to go a little bit further out, and that will

give capital kind of a natural path to follow. And what could get in the way of this? I mean, is it macro economic concerned? Is it further legislation? Is at local? Like, what do you worry about? I think, you know, the further legislation piece that that ebbs and flows. And you know, we're in an election cycle, so we're is there a presidential election, so we get you know, we might fall. I don't want to say fall a

victim to that. I think that the likelihood that any of that changes before the next election is pretty slim to knell. You will see some local elections that we need to be mindful of, you know, around housing and zoning that that I think, uh, you know, by and large, a lot of the local municipalities have actually been supportive of this because they see this as an opportunity to attract capital to the zones located in their cities and

UH and states. And so we've seen a number of of UM political entities get very involved in kind of advertising that UM you know, I think macroeconomic fundamentals are certainly of note though. That's one of the benefits of this program. It's a ten year old so it's very much designed for a long term investment horizon, and so you don't have to be as mindful of the you know, daily and weekly dips in the market. It's much more

long term. Is it safe to say, um that even without the tax breaks, these are areas you would have been investing in any way. Yeah, I mean, I think that's the real magic or the real challenge in this program, right that the way the whole legislation is designed is it allows you to own assets for a long period of time and then to sell them without capital gains tax. That only does you good if you have generated gain. Right, So this is not a program where you can go

out and you get a participant medal for trying. Right, you have to make a good investment. But if you make a good investment and then layer the benefits on top of it, that's when this becomes interesting. So that's the real challenges. You have to find opportunities to invest that makes sense, that kind of pencil to a normal you know, investment return that exists within these defined zones.

All right, Nick Parish, thank you so much, Managing director for Crested Partners based out in Chicago, working on opportunity zones. We're forgiving the fact that he is a Marquette guy and his basketball team is better than mine. We're just going to leave that to the exactly. We're all neutral here, especially because we're gonna be the host of the Big East Tournament and you know, we'll see what happens then, just saying I'm just saying, I'm just saying, all right, Nick,

thank you so much. All right. So, certainly the big players when it comes to the housing mortgage market, we're talking about Fannie May and Freddie mac um. These two um companies. I don't even know what you call them because their government sponsored enterprises. Uh, yes, companies. Well, they're publicly traded, you know what I'm saying. They're publicly traded. No, no, no,

no, no no, come on, you guys aren't being fair. They've trade publicly, although they've been taken over by the government, but they have a lot of government oversight. Uh and their keeper is still the US government. So let's get into this story. It's going to be the upcoming issue of the magazine. Elizabeth Dexheimer is financial regulation and congressional reporter at Bloomberg News. She's on the phone in Washington.

You have to help me out here, Elizabeth. Also without you, you've hit it on the head of these companies are two of the weirdest sagas in modern finance. And Freddy Mac two very important companies at the heart of the mortgage market. They buy mortgages from lenders, they package them into securities and sell them to investors. And this whole process really makes it possible for the thirty year mortgage to exist. It has bearing on everything from mortgage rates

to home prices. And during the financial crisis, um these companies were about to fail, US taxpayers had to step in bail them out, and since then they've operated in this really weird place where yes, they have shareholders and have earnings, they've returned to profitability and otherwise look like normal publicly traded companies, But on the other hand, they

are completely controlled by the government. And where we're at now is the Trump administration has promised to fix all of this, and uh in more than sort of at the core of this, to free them from government control and they've promised to do it without help of Congress, and so that's really put a lot of eyeballs in certain places on Wall Street focused on markla Riot. He is the director of the Federal Housing Finance Agency, which

is their chief regulator. And that's and that's the story. Say, the fate of it all largely hines that one man, I know, Bloomberg Business we get it or Jil Webber also here. So um uh deck Nimer has done a great job on this. And I guess the thing that I'm really interested in, like the people that come up in the article, it's really the hedge fund world, right, So how do they factor into all of this? Right? So that is one really in a big group on

on Wall Street right now. The shareholders in these companies themselves, which do include some pretty prominent hedge funds UH and investors like John Paulson and Bill Ackman. They made a big bet on these companies a long time ago and

they've yet to really see it payoff. And so depending on what happens and sort of the details on how these companies are freed from US control, there's a lot of money riding among shareholders, whether or not they're going to be able to see that and sort of how much. And quite frankly, I can tell you after spending a lot of time with Mark Collabora and it really is unclear. Um. He does play a big role in this, as does the Treasury Department, but it's really unclear where they're where

they're going to go on this shareholder question. You can just look at the shares of these companies the past few months that have been surging on sort of optimism that this is going to go their way. But I can tell you that it's it's really unclear whether or not they are going to see the pay day that they're hoping for. And tell us about this guy, I mean, because as you point out, I mean, it's all it's

all to him, like what do we know? Well, right, him and the Treasury Secretary and Nuan play a big um. But not only is the power in his hands, but he's also been making a lot of really ambitious promises about how it's not a question of if it's when this you know these companies are free, and how quickly that's going to happen. I mean, he's saying in my interview with him, may Or June of next year, we could be seeing a huge I p O of of Fannie and Freddie and UM. Yeah, so collabora is is

is a well known sort of entity here in Washington. Um. He was uh Republican staff around the Hill for many years. He was at the conservative thing tank Cato Institute, and he most recently served as Mike Pence's Jesus economist. UM. So he's definitely in a lot of sort of what

he's done. Um. He has had some controversial views on on housing reform in the past, and as he even puts it, a lot of what he's done the past few months since taking this job is sort of reassuring a lot of the different people, um, that have a lot of stake in the decisions he makes. That Um, you know, his role as a regulator is different from that as a conservative writer. What what what was the controversy? Uh, Well, he's he's made some comments in the past, including about

around shareholders, this issue around the hedge funds. Um. He believes that the hedge funds should have been wiped out or any of the shareholders in Fannie and Freddie when they were when the government bailed them out. Um. He has said that no circumstances right now would indicate that they shareholders should be wiped out again. Um, if they were facing another on the brink of failure again, he

believes the shareholder should be wiped out. So it seems like that that um, you know, is part of this narrative and trying to understand where he's really going with all of this, which, if you're an investor or anybody else watching this stuff, it's just like you get this kind of cloudy picture that you know, markets don't always like um and so what what does all this mean for me and my mortgage? Well, that's remains to be seen.

I think part of the reason why it has taken so long to sort of fix this and the and the company sort of remain in this weird state that they're at is because politically, no politician, Republican or Democrat, wants to do anything that would really mess with the mortgage market or mess with your ability or anyone's ability to buy a home. And uh and quite frankly, there's a lot of the housing market is booming right now.

There's a lot that's working in this system right now, and uh so I think that that is sort of the biggest question that how do you do all these things and not sort of mess with anything that is currently going well. And that's where I think urgency there's

a lot of time. Like the whatever they do UM, there's not only an election coming up where the people that UM are going to decide this may change with a new administration, but it's also if the markets, you know, if the public markets UM take a change, at the housing market takes a turn for the worst, it's gonna be a lot harder to make changes. So I have a question, billion dollar question, Elizabeth UM. Has the government that was the bail out UM that the government did

for Fannie and Freddie? Has that been paid back? Yes, it's been paid And since then, the terms of the bailout agreement were changed a few years ago, and Fanny and Freddie have been sending all of their profits to the government. Collabora and Secretary Minution made a slight tweak to that UM in September, So now Fanny and Freddie are retaining more of their profits. Once they reached a certain amount, they send the rest to Treasury. So yes,

treasury has been repaid. Alright, final thought to you, Mr Webber well, I think to me, it speaks to like how these things get messy? Right? Are they companies? Are they not companies? To Carol's exact question at the top, that we gave a hard time and who's the person behind this? Because ultimately it's he's going to be uniquely put in into a position that's going to test him. So TBD what comes out of that? But you know, I feel like I'm a little better off, thinks Elizabeth.

It really mapped it out really well. Elizabeth Dexheimer joining us from Washington on the phone, financial regulation and congressional reporter. Her story on the Bloomberg and on Bloomberg dot com right now will be the upcoming issue of Bloomberg this week. Our thanks to to the editor of the magazine, Joe Webber.

Just a reminder that we're not all done with the financial crisis, right We keep talking about everything or so many things that have made their way back, but we're still figuring out Fanny and Freddy, which is why this is a really smart story. This is Bloomberg Business Week with Carol Messer and Jason Kelly on Bloomberg Radio. First of all, we have the U. S HINNA trade war,

now we've got the coronavirus. Global supply chains, they have no doubt about it been attacked and in many ways for some stopped, causing many to rethink and reverse the great globalization trend from west to east. Andy Brown writes about it. He is Bloomberg New Economy Editorial director. He joins us you, Bloomberg Interactive Broker Studio. You know, I do feel like, right, all of this started with the trade war, but it's really picked up some momentum as

a result of the virus. Andy, can I just bring one headline that just across the Bloomberg Pete Blotch, former mayor of South Bend, Indiana, to endorse former Vice President Joe Biden at a rally tonight. That is according to the AP, so not shocking, especially given the phone calls that we understand were made last night by the former vice president and the former President Obama. So um, some interesting momentum building on that side. So watching politics this

week and obviously watching the virus. So Andy, you write about this and you talk about deglobalization in particular how it's accelerating. Yeah, you know, I feel I have a personal connection to this story because over the last couple of years, I spent a lot of time in Donguan, a manufacturing hub in southern China, just across the border from Hong Kong, and about a decade or fifteen years

ago something like that. In the in the early mid nineties, Donguan was a sleepy, agricultural backwater, rice paddies, village temples, clan based government. And then suddenly it started sprouting factories, and it goes from a population of you know, hundreds of thousands to one of the great cities in the world with more than ten million people. And there is this huge misconception around the world, particularly in the United States,

how this process came about. People say China stole American jobs. It was nothing of the sort. American industrialists and industrialists from all over the world decided to relocate their manufacturing to Donguan and places around Donguan for two reasons. One price, but far more important in price efficiency, the coronavirus. That's really the process of globalization. The coronavirus has really blown

those calculations out of the water. So that if you are now a global CEO and you're asking a question, where should I build my next factories, and the only question on your mind is am I going to go for price? Am I gonna go for efficiency? Is the wrong question, or at least it's it's not. There are other more important questions to ask, of which the most important now is how can I make my business, my

global business, resilient to shocks coming out of China. And so as you sort of take a step back for from all of this, I mean, you look at the new economy. It's literally your job. So I mean, what do you make of this at this point in terms of the near term but maybe more importantly the long term effectiveness. So it's going to have a profound effect on the Chinese economy. So the aggregation of supply chains in China was seen as a great strength of the

global economy, and it's now seen as a liability. So you know, I've spoken to uh managers of companies or managing or managers who are managing the operation in China. They're talking about relocating, not not just about relocating production at the margins sort of where am I going to build my next factory? But how do I take manufacturing capacity that's already in China and move it offshore? We're talking about shocks now, trade shocks, uh, US China trade war.

We're talking about tech shocks. The technology decoupling between the United States and China. We've discussed on this show a lot, and now we're talking about black swan events. You know, of course, most notably right now, coronavirus. How much do you think Andy China knew that this? I mean, obviously people companies, global companies started to shift some of their operations to other lower cost providers, whether it's Vietnam or so and so forth. Right, we started to see that trend.

How much of you know, China seeing this, and that's why they've been so much focusing on being more of a high tech provider, right, you know, much more sophisticated industries and moving They're focused to that because they saw kind of the writing on the wall. Well they did what What what happened was, I mean exactly the same reasons that industry moved from the Massachusetts and Connecticut and moved down south and then moved to the you know, over to Asia in you know, the nineteen sixties and

nineteen seventies. Uh, you know, those are the same forces that have been at work for the last several days in Dongwa, several years in Dongwan, right, So labor intensive manufacturing is shipping out. That's very natural. That's a natural, normal process of of globalization. So that shipped to Vietnam, some of it has gone to Bangladesh, even Ethiopia, parts of Africa. What's different now is the driver of this what what looks like deglobalization, and it's fear. It's fear

of over reliance on China. It is amazing. I mean, you know, as you say, just sort of synthesizing everything that's happened over the past year or so, how much the story related to China's change. You think about the protests, you think about the trade war, you think about the coronavirus dramatic, what a difference. There's a line that you wrote, deglobalization is driven by the disc comfitting am I saying

it right? Discomforting? Discomforting? Oh sorry, maybe there's a type of discomforting realization that the entire system now has a single point of failure China. That is just like to get your head around it, Like so many people have placed their bets right in terms of the supply chains in China, and um being our workforce for something, right. So, and those those bets are not going to have to be on Wow. And the question now is where is

some of this production gonna go? We're gonna go to right, I mean, so you know it's going to go to countries that actually upper tected because they have the least amount of connection to the Chinese economy. They have their own supply chains. If you're in if you're a country in Eastern Europe, Europe, now you're looking actually to benefit from all this. Mexico is in a terrific position right

now because they take it all up. Yeah, all shifts around. Uh, that's why they call it the new economy, all right. Uh Andrew Brown, Andy Brown, thank you so much. I'm broc a journal But you let me drive. Oh no, no, no, no, honey, please, I'll do the riding drivels me. I want to drive, Just drive, baby, good questions trying. This is the drive to the Globe community. Thanks well, drying us on Bloomberg Radio.

It is time for the drive to the close on this money back with us is Charlie Smith, co founder, chief investment officer at Fort Pitt Capital Group. They've got three point four billion in assets under management on the phone from Pittsburgh, Pennsylvania, and I say this, and Charlie Pello just talked about it, because investors are definitely buying

into the clothes right now. Up four point two on the Dow, up one thousand, sixty two points, nastacks up almost three point four percent, up two points, and you've got the SMP with a percentage gain of roughly three point seven up a hundred and nine points. But no doubt about it, we're at our best levels of the day. Charlie Smith, Um, is this all because everybody expects the FED to cut rates? I'm not sure that's the reason.

I think the the idea that this issue with the coronavirus is going to be behind us within the next four months, I think is starting to wait. Stop right there, that the issue of the coronavirus is going to be behind us in four months. We still have four months though, to get through. We're talking about you know, more than

a quarter of well, I mean, that's an impact. Well markets are a discounting mechanisms and uh, you know, we may have a quarter here in the U S where we get a negative print for g d P um and the third quarter maybe flat year over year, but uh, I think that would imply a pretty strong rebound in the fourth quarter, and markets are always looking, you know,

six to nine months ahead. So UM, I think the idea that uh, that this problem is not going to be any sort of a permanent one is going to take hold of here very quickly and even more importantly, potential bownside even if we do get uh, maybe one or two quarters of of flat to negative GDP. Uh. You know, the the impairment of SMP earnings this year might be three or four percent. That would get you a two a hundred and fifty eight dollar number for

SMP earnings for the year. You put an eight team multiple on that that gives you a fair value around fifty, And we were at fifty on Friday, So I think we've pretty much discounted the problem. Wow, that is it? I mean, does that surprise you that the the market sort of digested this as quickly as it did and now is moving on. I mean, this feels fast to me, at least well to me, it seems as if the

entire um presentation of the problem has been overblown. UM. You know, I understand that that the number of cases is going to rise exponentially in the US. But the final outcome of this is going to be what I believe to be amounts to a hyper severe flu season. Um and the sorts of sort of outcome that if we really hadn't been so sort of hyper attuned to it due to the way it's been presented in the media, we might have missed it. Um. So I I just

really think that that the markets are smarter than that. So, okay, that's interesting. So you think the markets are already discounting this even though it might get substantially worse. What might change your tunes? Tune on that. What's the outcome of the virus that would make you say, all right, wait a minute, I und estimated this. Well, let's talk about what we see as is going to happen in the

next three to four months. We could see, uh, you know, big public events canceled flat out, you know, just canceled, and uh, you know where there's talk here recently of potential for the the n c A basketball tournament to be played in front of empty gymnasiums. That could certainly happen. It could wreck the second quarter for GDP. But uh, I think once we get beyond the early summer July, we'll be at the point where the problem has begun to fade. Now people will begin to worry about the

return of the flu season for next year. But there may be at some point where we've come up with some some some drugs that that will be able to help lessen the impact. But I think it's gonna work its way through the system. It may be, you know, the headlines may be awful for the next month and a half in terms of the growth in cases, but I think the marks are gonna gonna see right through that.

All right, So talk to us in the midst of all this about some names that you because you know, this is not an easy market to to get your arms around. Uh what are you uh, what are you recommending here? Well, we have sort of an eclectic list here. We're we've owned Verizon for over a decade. We like the strong yield of you know, four point six percent yield. Their people are gonna not gonna give up their cell phones. They may give up an overseas trip, but they're they're

never going to give up their cell phones. And uh, the the idea that Verizon has a excess cash flow, highest quality network in the in the country. We think they're a nice conservative play here. We also like Western Digital UM, the big player in hard disk drives and nan flash memory. Flash memory prices are rebounding pretty aggressively. UM. We think they could earn as much as seven dollars

in their fiscal year ending next September. So they're selling it about eight times earnings with a three and a half percent yield. So it's a reasonably cheap stock with some decent earnings momentum to look forward to. Uh. Finally, we like a little firm here in Pittsburgh called to six incorporated, the Symbols I I v I. They make uh uh equipment for optical switching from both communications and industrial uses. Um. The optical switch is a is a is a reality, and they make the gear that makes

those which is work. The Pride of Saxonburg p a interesting absolutely about thirty miles from downtown Pittsburgh. There you go, Uh, what don't you like in in this market? What are you avoiding in a market like this? Well, um, we would stay away from the utilities and the the the whole household products. Uh. Segment. Really, we think the the huge spike we've seen in rates are in yields collapsing here in the last six weeks really obviates any real

attractiveness to the bond market. Uh. And so the household names and the and the utilities are ones that we would be staying away from right now. I do wonder, um, Charlie, if you think that. Okay, so here we are up almost five percent of the Dow Jones Industrial ouite, I mean there's a bunch of investors chasing these games right now. Um, as we head to our highs, we're now about on

the Dow Jones Industrial average. How much of what we lost, uh, in this ten percent correction ten percent more than ten percent correction? How much do we get back? Because it's safe to say that most folks thought the market was overvalued based on the earnings outlook and the fundamentals. Um, So how much of it do you think we ultimately get back? If, as you say, investors are looking past beyond the virus at this point. Yes, So I always put it in terms of what we think we might

earn this year. As I said, if we get a negative g D print in the GDP print in the second quarter, we get a flat number in the third, we could we could get back to a flat earnings number for the year UM. So you know, you put in eighteen eighteen and a half multiple on that, which would be actually slightly up from year end um because in straits have fallen so much in the interim. UM, you could get to basically back where we were at the beginning of the year, maybe up two or three

percent for the year. Interesting. Alright, great conversation. Thank you so much. Charlie Smith, co founder at chief investment officer of Fort pitt Capital Group, looking after about three point four excuse me billion dollars joining us on the phone from Pittsburgh. Thanks for listening to Bloomberg Business Week. You can subscribe to the podcast on iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show every weekday at two pm Eastern only on Bloomberg Radio