Ukrainians Are Crowdfunding Their Defense

to fight to defend their country. The continued war requires tapping into a vast donor network that's blossomed over the plast twelve months to supply soldiers with everything from boots to battle tanks. Carol, Yeah, we're talking crowdfunding. Who knew well? Our Mark Champion knew This story, By the way, is Today's Bloomberg Big Take. It is one of our most

read stories on the Bloomberg. As we said, it is also Today's Big Take podcast, which you can find up Bloomberg dot com or wherever you get your podcasts, and be sure to not miss the Big Take on Bloomberg Radio. That's weeknights at eleven pm Wall Street Time. Mark Champion, Bloomberg News Senior reporter for Internet National Affairs, who wrote the story. He is in London. Mark incredible story. Like I said, who knew it? It's kind of a form

of crowdfunding. Tell us what exactly is going on? Yes, well, I've been going in and out of Ukraine for the last year and it really struck me every time I went the amount of just stuff that was getting uh you know, provided to the front. Wherever you were, you went into a company, they had a warehouse full of

stuff and it was all donated. And the more I know was there, the more it became clear that this isn't just you know, the normal stuff you'd expect about, you know, food for refugees and so, but it was also weapons for the front, cars for the front, everything that you can imagine that. You know, people just all have relatives there, Their sons and brothers and fathers are all at the front and they were trying to find the stuff that they said they needed and so they're

filling all the gaps. But the scale has become really enormous. So, you know, the one fund in particular that I talked to call come Back Alive, they raised one hundred and sixty million in the last dollars in the last year. You know, there's others of similar scale. The Central Bank if you want to just give extra money, the Defense Ministry Central Bank has raised six hundred and fifty million dollars.

And you know that beyond those funds which they are funding sort of expensive million dollar drones and mortars and all sorts of things like that. But beyond those funds, you just have the tiniest little operations all over the place.

You know. One place I went to was a guy as a former graffiti artist who decided he was just going to help all his friends who were going to the front, and they were taking their cars and he camouflaged them, so he cannot now as camouflage you know, around you know, eighty hundred vehicles and then or also rifles and all sorts of things. That's so, that's such

an interesting point. I wonder if that means that there's a sense on the ground that the folks who are responsible for the crowdfunding understand the needs of civilians in the area in a way that maybe the big players like the US funders don't necessarily understand. Was that your impression, Mark, Yeah, I think that's true. I mean, there's just a lot of you know, gaps to fill, and you know, the US can't be on top of all of that. The Ukrainian defense ministry, you know, for reasons of money, of

bureaucracy or whatever, it can't do everything. And you know, these is this something that Ukrainian has become very used to. They because they had very sort of inefficient and corrupt governments, they became uh, you know, over more than a decade, they've built up this sort of instinct to crowdfund no matter what it is, you know, a popular uprising like

the Maidan protests in twenty fourteen. Well then when the war began in the donbas in twenty fourteen fifteen, immediately the first instinct is not to ask the government, you know, because you don't think you'll get anything the government. If you give anything that the government, you think it will disappear. So people have just become used to do stuff themselves.

They just instantly do it, and they just instantly begin Facebook groups and so on to say, let's get a car for so and so so that he can go to the front. So it's it's just really ingrained, and I think it is actually more important than the dollar value, simply because it says to every soldier at the front. You know, I've got an entire society behind me. Talk to us about some of the people behind some of these Crown crowdfunding efforts. We're talking about what Hollywood celebrities,

We're talking about, oligarchs, We're talking about everybody. Yeah, absolutely. So, you know the fund that was set up by the president, President Celenski, he has one called United twenty four and they've raised two hundred and eighty seven million dollars. And for that fund, he has really reached out and he's persuaded by b Streisan to be an ambassador the fund. There's a number of other celebrities that have become attached to the fund in one way or another, and so

they raise money. And then you have others who are as you mentioned, the oligarchs. You know, some of the oligarchs who are not very popular, and we're even seen, you know, some years ago as being kind of pro Russian because they've supported the party that former President Janakovic used to you know, represent So you know Arite who's the richest man in Ukraine. He has a big steel company called met in Best. They owned Azostyle in Mariupol, the steel plant where they were the last stand was

made in Mariupol. They've lost a lot of their assets, but he has actually provided one hundred and fifty thousand sets of bulletproof best which they've made in his factories, you know, eighty thousand tank traps, all kinds of stuff which really does mount up. Well, Carol, you bring up a great question about the people who fund this effort and who have kind of been the leaders behind it. I wonder, Mark, if you can talk about the people who are most impacted by it? Is civilians? Is it

folks who are actually fighting? Who is most benefiting from this extra cash? Well, it really is everybody, but the Ukrainians are focused very much, you know, on people who remain in areas that are either at the front or they're in areas that were occupied and were then retaken by the Ukrainians, and services there has sort of broken down, medical services, you know, food is difficult to sort of

distribute all those sorts of things. So, you know, as I say, it's it's the great strength of this is that it's incredibly flexible. It just kind of responds because everybody knows somebody, and they then move into these areas and provide services that the government is just you know, incapable or too slow or you know, doesn't have the resources to do. And it really is a kind of life saver in these areas. It is for civilians, it's but a lot of it is for the front, for

the soldiers. Um. What's interesting too, and it's funny, you know, Mark, as we were getting ready and talking about your story in the newsroom, one of the things that came up from one of our producers, Aria Gami, he said, you know, wait a minute, I understand the US is sending billions of dollars in equipment and providing support. We know other nations and allies of the US are certainly and of Ukraine are providing support. Why is this ultimately necessary? Because

nothing is enough. I mean, this is a big war. We haven't seen a war like this since World War Two in terms of pure intensity. I mean they have been other very intense wars, but not like this. And you know, the Russian side in particular is very well armed. It has the entires, you know, not the entire stop. It the predominant part of the stocks of the former Soviet Union that it built up for the Cold War.

And in many ways this is you know, they're running down through the Cold War stocks of the former Soviet Union. The Ukrainians on the other side, you know, they're still It starts at this war with around sixteen your tanks. You know, Germany has three hundred. You know, Britain has two hundred and twenty. So it's you know, they they it's not like they had nothing, but you need so much in order to pursue a warline there. It just eats resources at an incredible rate, and you need a

lot of everything because it gets destroyed. You know, the ninety percent of drones get destroyed. A lot. You know, pickup trucks that people bring they get destroyed, either you know, because they get hit or they just you know, in an accidents, or they just you know, get stuck in mud or whatever. That it just eats through resources at

an incredible rate. And to be fair, we've talked about the new double issue Bloomberg Business Week gets out cover story is of course marking the one year Russian invasion into Ukraine, but talks about, you know, specifically, Maddie, the shortage of ammunition on both sides. I mean, both sides are going through a lot when it comes to any kind of defense equipment and they're just kind of running

through it. Yeah, and it's it's so critical. I wonder Mark, in our final kind of thirty second with you here, if you can talk about you mentioned the intensity of the war. What is something that you understand about the situation on the ground that folks who haven't been in Ukraine might be missing about the story. Well, I think when you hear that the war has slowed down in the East and yet you hit then the casualty rates

are really high, that is simply about intensity. So they may not be moving, but there is a lot of artillery shells that are just being exchanged on either side and bodies now at this part of the war, just bodies on the Russian side being thrown at the war. So when you hear that things are nothing's moved or slow, it doesn't mean that the war has itself has slowed down in terms of intensity, and it hasn't at all. Yeah.

It's pretty amazing though, and to think about it was just a year ago that it all started, but you look at how much devastation and how many resources are still needed to continue on. Mark Champion, incredible story. Marks Senior reporter for International Affairs at Bloomberg News, joining us on the phone from London. Be sure to check out his bloom Big Take. You can also find it on

the Bloomberg terminal. Of course, check out the Bloomberg Big Take on Bloomberg Radio weeknights at eleven pm Wall Street Time. You're listening to the Bloomberg Business Week podcast. Catch us live weekdays from two to five pm Eastern on Bloomberg Radio, the Bloomberg Business app band you Doo. You can also listen live to our flagship New York station, Just Say Alexa,

play Bloomberg, Eleve and Dirty on our radar. Chinese president she urging his country to accelerate fundamental scientific research so it can become self reliant in critical technologies. Basically really kind of countering Washington sanctions on everything from semis to software. You've also got a Chinese top diplomat calling for peace

talks to resolve the Russian war in Ukraine. And then there is a fascinating Bloomberg opinion piece today that talks about if American intelligence is right and China really is about to arm Russia in its genocidal war against Ukraine, we may be entering a new era in international relations, asking if it may be an even more dangerous one

to dress it all. We've got ed Price principle for the geopolitical forecasting firm, or he is principle, I should say, of geopolitical forecasting at Ergo, which is a global intelligence consulting in forecasting firm. By the way, Ed a former British trade official his work with members of the European and British parliaments. We are so delighted to have him here with Maddie and myself. Ed, there is so much

going on. How do you separate out the week from the chaff when it comes to what's going on in foreign affairs and geopolitics? Hi, Caroline, I hope you guys very well. It's difficult, right, It's really hard right now to separate the signal from the noise. My firm was previously very successful at doing that at the start of this war, if you remember, we very successfully called it. You know, we said they were going in with the

seventy eight percent confidence a year ago. Today, a year later, it does seem that the war in Ukraine is harder to read. I would suggest, although there are probably a few a few themes that we can point to that might help One of them, Carol, is that just at the moment that it seems that Russian mistakes are compounding.

And by Russian mistakes, I mean the sort of strategic tomfoolery of using your best troops, the Spectsnaz, your naval infantry, your parachute paratroopers at the start of the conflict and getting them essentially killed disproportionate to other troops. Strategic mistakes like that are compounding at just the time that the Ukrainians are getting new vehicles, new equipment, and the morale is very high. So I think that's maybe one thing.

So when we zoom out from the Russia Ukraine situation and look a little bit more broadly at all of the global geopolitical tensions right now, Ukraine, China, the global economy is spy balloons. What is your biggest concern and situation to watch for the year ahead? Right? I mean, I would be very clear that my biggest concern is

not necessarily the most likely concern. The biggest concern, of course, should be that this low called war in Ukraine, and that the threat of conflict over or in Taiwan become the same thing, and that there is a general confluence of the sorts of trends that we're seeing with regard to great power competition right now, I don't think that

that's likely. That must remain the biggest concern. But within that, I mean, you guys just mentioned the fact that the Chinese might be thinking about arming the Russians, is helping with material, that is a concern because, of course, you know, ridiculous spy blooms are one thing, but sending arms, sending lethal aid to Europe from China, you know, when you think about it, that's that's very concerning. You know, it's interesting in this opinion piece too, it says Chinese military

support for Russia. Again it's an opinion piece by Andrea's Cloth, said Chinese military support for Russia would finally turn the Ukrainian conflict into a proxy war between two hostile blocks with a third trying to stay out of the fray. And it does, I do wondered, do we need to be thinking that this is where we're going. We've talked about kind of a technology war and different things going on, but is this what happened? We're dividing the world up

into maybe three key blocks here. I think that the essence of the problem is that Uncle Sam did half a job after the Second World War. And by that I mean he conquered three countries Germany, Japan, and the United Kingdom. I wouldn't necessarily put it like that to my friends, but he did and filled those three countries with two things, democracy and free markets. For then some unknown reason after that, Uncle Sam decided that the two

big naughty countries China and Russia. And again I wouldn't necessarily call them naughty to their faces, but the two big naughty countries were only given access to markets, right and not. There wasn't a conservative effort to export democracy to Russia and China. So in a way, we Americans are American now. We Americans have done half a job after the Second World War. And the big question is

can you get away with that? Is it okay that democracy only really went halfway around the world when the means of markets and capitalism went all the way around? That's that's so interesting. I love the way you put that. My question with China in the US specifically is always like it's a symbiotic relationship, right, if we need each other can China really afford to risk interacting with Russia

on the war when it's economy just reopened. I wonder, in the context of what you just mentioned about China embracing free markets but not democracy, how you think about that relationship. Well, I don't want to get too deep and dark here, but if you if you think about the Chinese ability as an autocracy, as a totalitarian regime to absorb the sort of punishment that a future sanctions or blockade regime might impose on it, it doesn't care about human life in the same way that that Americans do,

right and so, and that Europeans do. That's not to say that your average Chinese individual or Chinese household doesn't care about if I'm talking about the government, to be clear and so PRC, I think we'll be able to pull things out of the bag in a future confrontation that look more like and feel more like an autarchy, a strategical autarchy for which I suspect Belton Road has a pretty good preparation in many ways that probably surprise us.

And so really the question is to what extent can European economies and the American economy withstand a direct economic confrontation. I mean, I've said it before, maybe we need some sort of strategic garden furniture reserve. You know, it's a silly way of putting it, but we're on the hook. No, that is a really, really good point, and it's interesting.

You know, we had a great story out from our Bloomberg team about what the UK government basically was doing and kind of doing a disaster scenario if China invaded Taiwan and TSMC was shut down or impacted the global supply chain, as we know that they produce so many what is it, ninety percent of the chips used in the world. So I guess I always think about what's the constructive conversation as all this stuff is going on, where investment strategist ed continue to say that the big

concerns this year are geopolitical. You know, we're seeing that. So what is the constructive And we've only got about forty five seconds left here. The constructive answer on Taiwan is don't worry about it right now. Ergo's best sources have the prospect of an invasion at a very very low chance. That's all sorts of reasons that we can get into another day. But do expect some kind of disruption, something stopping short of a blockade, because of course that's

an act of war. But do expect that the PRC and the Communist Party in China are going to make life more difficult in that region. Twenty seconds left, Still worried about Russia. I'm always worried about Russia. Yes' always worried about Ussia. But I think we're on top and I think Ukrainians will win. All right, listen, great to check in with you. I know it's busy on your end as well, so thanks for carving out some time. Ed Price, his principal at Urga, former British trade official,

and of course joining us via zoom here. I believe it is in New York City. All right. You're listening and watching Bloomberg Business Week Carol Masser along with Madison Mills. A lot to think about, but I do feel like this is a year that once again to your political front center, and really interesting to hear him saying the

positive thing at the end there he thinks Ukraine's gonna win. Yeah, fascinating right, all right, folks, will continue to cover an update on the markets coming your way in just a moment. This is Bloomberg Radio. This is Bloomberg business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim

Stenebeck from Bloomberg Radio. So we're talking about the last jobs report where we had about more than half a million jobs in January created. I mean, it was just massive. You all sad the unemployment rate unexpectedly retreating to its lois since nineteen sixty nine. We know, Maddie, that the tight labor market persists for many types of workers, including blacksmiths,

enter robots. Such a cool story we've got here. With more on this story, you can find it online at Bloomberg dot com, Slash business Week, and on the Bloomberg But let's get to it with Ashley Vans. Bloomberg BusinessWeek features writer and author of Elon Musk, test Less, SpaceX, and The Quest for Fantastic Future. Ashley joins us via zoom from Palo Alto, California. Actually great to speak with you. I think we are all incredibly jealous of you because

you have the coolest job in the world. You get to try all of this cool stuff. Tell me about this latest cool technology that you tried out. Yeah, well, a few months ago I went to this company called

Macana Labs. They're based in southern California, near Los Angeles, and they've developed these robots but really some software and a lot of sensors to go along with it that allows them to bend sheet metal to shape metal in ways that would have been done well, that has been done for centuries by by blacksmiths, and and you know, it's it's just this kind of radical new form of manufacturing, automated manufacturing that could be a huge boon to industry overall.

Is this ultimately actually something that can really scale up, ramp up at some point in the future. Yeah, you know, right now, this company Makina, they're working with what they're working with NASA, the Air Force. They're building in some cases kind of spare parts for a fighter jet that's really hard to source, or body panels for a rocket or something like that. So so not quite mass manufacturing yet.

The plan, you know, is if all things work out, is to have tons of these robots and have them going at this on a larger scale and so so it could be. But you know, in general, mass manufacturing with dyes where you're stamping out parts will probably be cheaper for a long time. But this still has a big role, all right. Actually, I'm waiting for everybody on Twitter to be like, see, we were right, robots are going to replace our jobs. I mean, but that's not

kind of what this is about. This is I mean, we don't have a lot of folks necessarily going into wanting to be blacksmiths or metal working, right, and we have a tight labor market, but there's even a bigger thing of people not wanting to go into what many would call the trades. But yeah, exactly, I mean, if you go talk you know, I spend my time talking

to manufacturing companies and customers. And the biggest problem right now is we had tons, especially in the US, lots of kind of mom and pop shops that got kind of big, but they would do a lot of this metal work. Even for companies like SpaceX. It still happens today and in a lot of cases, you know, the kids have not ended up wanting to go take over

the company. Other younger people haven't pursued these trades and so right now we have this huge delays in getting spare parts in manufacturing writ large, and so it's not really replacing jobs as much as it's filling jobs that just are not kind of existing right now. So what is the economic impact then for the consumer at the end of this whole chain? Selfishly? Does this make anything

cheaper for us? It could make big things cheaper. One of the most exciting parts of what Macada is doing is that these robots can kind of do things really that humans can't. And because you don't have to if you're a company, if you're a maker of cars, you don't have to put this huge investment. The dyes that they used to stamp out body parts cost hundreds of millions of dollars when all of a sudden done. So if you want a customized car, you want something that's unique,

these robots could do that cost effectively. And so there's this idea that we might have, you know, much more choice and variety in some of these things that we buy. How much are these puppies cost? While the starter pack for the robots, there's a starter pack about two point five million dollars. You get two of these robots. They look like the ones that people might have seen on an automaker's line. A big arm that does stuff at the end, and then there's this big contraption that holds

the sheet metal. And you know, the real trick here is that metal behaves really strangely when you bend it and start working with it, and it does odd things. And that's why we have blacksmiths that have learned this stuff over centuries. And so these robots with their software that comes in the package, actually know how to do these techniques, and they use AI software to get better

over time. And so but you're kind of starting at about two point five million, Well, I want to pick up on what you're mentioning that it takes like this intense mastery of the craft. How surprised were you that a robot was able to successfully do this? I was pretty shocked. So for the story, very quickly, I had my face digitized. It was scanned by a laser and turned into this three D image that the computer could

feed into the robots. And I expected something really crude, no effect to myself to come out on me on the other side. I just didn't think the robot would. Would you know when you see these arms. They're huge. I didn't think it would be able to get all the contours of my face and it did you know, it created this this kind of four foot large bust of me and it's very lifelike. It scares my children. I put it by them to keep watch on them

when I'm not around somewhere. It is it is. I got to keep this this souvenir and uh and so set over it. You know you're hiding from the kid. It's no goad it well, and so I was. I was kind of shocked because I was thinking I could see like a body panel for a car, just just sort of shaping metal into a curve. But this this has my nose, my nostrils, my lips, everything, and so you know, when you see this giant robot doing this, they have these the small tools at the end. It

was it was quite remarkable. I love this lone in your story. How you say that March and his robots are still too slow to replace the mass production portion, I guess of you know, manufacturing if you will, But you say they are ideal for the earlier stages of the process, helping companies test their ideas before they commit money to final production. It allows companies right to kind of play around a little bit, and when we think

about an innovation or disruption, this is a pretty cool thing. Yeah, Because if you're a car company and you want to make a new door for a new model, you have to pay for the dyes to stay about them, the molds to produce all the doors along the way till you find the one that fits just writer, that's shaped

just right. And so that's millions of dollars every time you're making an iteration where this robot can actually do these these one offs, these five offs at the beginning of the process, and then it's only when you figure out exactly what you want that you then send it to the mass manufacturing process. I think what's fun about

the story. It takes me back to a job I had in high school and a little bit in college, and they made plastic parts like sprockets and belts, and it was all manufacturing, no, and they had mold and like those molds were expensive. So, like you think about how these things are made, and this really plays into it. Having said that, Ashley, you do have this great vantage point when it comes to what's going on in manufacturing, and even though we're such a service led economy, a

lot of stuff still gets made. What are kind of some of the big trends that you continue to see when it comes to manufacturing. Well, yeah, we've got tools like three D printing to go along with this. It's bringing this sort of automation and these machines and software into this puzzle. But the coolest thing I would say is that so much of this is happening in Los Angeles. There's probably you know, twelve to twenty manufacturing startups that I could roll off and they they're all in LA.

It's kind of this it's a knock on effect from the aerospace industry and the automotive industry, but to the extent that there is maybe a modernized leap forward in manu factor, LA is probably the single point in the entire world where you see the most encouraging signs that this could happen to thunk, I know, LA, I would think by you more than LA. Right, it's a little counterintuitive, but absolutely when it comes to the stuff, it's happening in Los Angeles. All Right, this was a lot of fun.

Love your stories always always, and you just kind of open up our mind to so many different things that are out there. So Ashley, thank you so much. Take care Ashley Vance There guys. He's Bloomberg business Week, features writer and author of Elon Musk, Tesla, SpaceX, and The Quest for a Fantastic Future. Joining us via zoom from Palo Alto, California, you're listening to the Bloomberg Business Week Podcast.

Catch us live weekdays from two to five pm Eastern on Bloomberg Radio, the Bloomberg Business app band you Doo. You can also listen live to our flagship New York station, Just Say Alexa, play Bloomberg E Love and Dirty a journal now. But you let me drive? Oh no, no, no no, who's going to honey please? I'll do the riding gravels. I don't want to drive. Good question. This is the drive to the Globe. Conimul thing Well, Brier up,

Jo down on Bloomberg Radio. All right, everybody, we've got just about sixteen and a half minutes left in today's trading session bouncing around here. But we are nearer lows as you heard from Charlie when it comes to the equity trade, and we definitely have seen some movement in the yields off of those FOMC minutes, but we're up near just off our highs on that two year at four point sixty nine. We do want to talk about

the markets. We've got Bryant Van Cronkite with us. He's senior portfolio manager co team leader for the Special Global Equity team at all Spring Global Investments. They've got roughly four hundred and sixty three billion in assets under management. He is co manager of the All Springs Special MidCap Value Fund, which has returned on average about nine percent annually over the past five years, putting it in the

eighty seventh percent dile according to Bloomberg Data. That fund, by the way, Maddie, it's up about four percent year to date. Brian joining us from Anonymy Falls, Wisconsin. Brian, good to have you here on this. We're calling it a FED Wednesday and FOMC Wednesday, if you will. What do you think about most when you're trying to assess what's the smartest strategy in this particular financial market environment? I care, I'll be with you again. Yeah, I think

there's two things to think about. I think we need to think about the mackerel, right, what's the FED doing and how is that going to drive demand dynamics for individual companies. So with that in mind, I'm very focused on the paradigm ship that's taking place. The idea of the FED can hop into the market and use lower rates and quantity of easy to support the economy, I think is the paradigm of the last thirty years, not

the paradigm of the next ten years. And the focus now is on inflation, and their resolve is being questioned, but I don't think it should be questioned. I think they're going to continue to push higher on rates and push the into a slowing pattern. And what that said, from a slowing pattern or just slowing pattern, I think recession is the most likely outcome. Now, the deepness of that recession we have to debate, and that depends on

the manitude of the decisions from here. But the reality is h the symptom is inflation, the disease is employment. And the tools they have are very blunt. They don't have a lot of precision with with their with their options here, and so we'll have to see how long they stick with the higher for longer, but my guess is it'll be longer than people are piking today, which drives me to the idea that when picking stocks, we don't want to own companies that are reliant or dependent

on a generous shuttle reserve. So identify companies that have unique secular demand drivers for their volume, have unique pricing power from a company's standpoint, and have great balance sheets. It's those balance sheets that allow companies the optionality to drive their own destiny, whether it's through acquisitions, buying stock, organic investments. I think the combination of those three elements really can allow you to outperform both absolute and relative

independent of the seat. Bryan, I always think about we work when I think about the impact of a zero interest rate environment. So I want to get your take on tech here. I know that in your note you say that you favor you know, quality over low quality non earners. What does that mean for tech because they love to grow and not necessarily to have a lot

of cash. Yeah, the biggest beneficiaries from a generous seat, as I've been saying for the last ten plus years, are the companies that need the most, the ones who aren't standing on their own two feet yet, who they're not creating their own cash flow, the ones that have the most levered balance sheets because they benefit from lower cost of capital, and some of those companies show up

in the tech space. There's value in tech, though I think some of the software names that do produce stable cash flows are potentially being under value today as rates of higher pushing multiples down in that regard. But for us, focus is going to be on which companies within tech are producing casual to data can be used to cycle through through value creating investments like acquisitions or additional organic growth.

So let's get to names. As we mentioned, your fun has beating most of its peers over the past five years, annually returning about nine percent according to our Bloomberg data. One of the names that you like is Jacob's Solutions. The ticker is j I'm looking at the stock. It's just down about half a percent so far this year. It's a fifteen billion dollar market cap company that is involved in engineering and construction. What is it that jumps

out for you on this one? What we like about Jacobs is the transformation they've gone over the last five years. They used to be a business that had end market exposure to oil and gas and other cychnical end markets, and they sold those assets which we deemed non core and have reinvested through a streets of acquisition and businesses that put them at the center of the consulting advisory

services that are going to solve. The most complex is that our economy faces in the future, things like climate change and demographic shifts. And as they've done that shift with their asset base, they've now stabilized their cash flow production profile going forward. It's far less cyclical, far more stable, and along the way, that increases the amount of capital they can use for productive growth in the future. So today the company is, as an undelivered balance sheet, is

in the crosshairs of secular demand. With the problems they're solving, it has the ability to play offense if the world does play defense. If the economy slows down, look for them to acquire competitors, look for them to buy back their stock. We think that combination allows them to compound value in the face of a challenging economy in the future. I know that you also like Vulcan, and one of

the reasons is because of its pricing power. To what extent is pricing power one of the key decision factors for you when you're figuring out where to put your money. I think pricing power is perhaps the most significant indicator of a company having a competitive advantage. If you can raise your prices when you want to and when you need to, that to me shows that your asset base is unique. And in the case of Vulcan, they play

in the aggregate space. There's really only a few areate players in the US, and aggregates are the components that go into cement and concrete that I'll play, build the bridge, that build the buildings in the roads that we all rely on every day. And because of the uniqueness of this asset base, this industry has seen pricing and go up almost every year for the last fifty years, the only exception being the Great Financial Crisis, which indicates to

me these unique assets. And in last year we're seeing double digit pricing and again I think we'll see that in twenty twenty three. Now from a volume standpoint, it can be a little cycnical, right, they are exposed to commercial real estates, but they also had influcher spending, right. I think of all the bills we passed during the pandemic that are now just coming into funding stage. So I actually see demand more stable pricing rising while their

baskets falling. All right, gotta run. Brian good to talk names with you and get your view. Brian van Kroncrite. He is portfolio managed at all Spring Global Investments. Joining us on the phone from a Nominee Falls, Wisconsin. You are listening in watching Blomberg BusinessWeek, and this is Bloomberg Radio. This is the Bloomberg BusinessWeek podcast, available on Apple, Spotify,

and anywhere else you get your podcast. Listen live each weekday starting at two pm Eastern on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal