What’s Keeping the Market Moving, Vaping Regulation, Ducati CEO

Week on iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show weekdays at two pm Eastern only on Bloomberg Radio. All right, let's talk a little bit about where we are in the stock market. I think Carol is entering this segment with a little bit of trepidation because Sandy Villery is here, partner of Villary Funds, looking after about two billion dollars. He's based

down in New Orleans. We've been talking about the Saints, We've been talking about l s U, We're talking about University of Georgia. He's going to the SEC Championship this weekend. But we're not going to talk about that. Maybe we'll talk about it a little bit later. We're gonna talk about the market. Sandy, great to have you. Wait, I'm sorry, oh wait what? Yeah? You just did you check out? Did you go to your halty place. I'm actually looking for a Giffy that's got an eye roll so that

I can tweet it out. Good good, well that tiffy, Giffy, Tiffy whatever. Yeah, okay, so let's talk about investing. Yeah, so what's the state of the markets here? Is Sandy. You know, I feel like the theme that's developed on this program over the past couple of weeks is, oh man, this feels much better than than we did, certainly back in September, even with those uh sort of unpleasant couple days earlier in the week. How do we finish the year? Yeah?

I think it's interesting. We were more i'd say fed driven, So everything was revolving around are we're going up or down an interest rates? And now that looks like inflation is comfortably below you know, their targeted two percent. I think that kind of fed risk or interest rate uh you know, possibility of rate hikes or that sort of thing or kind of you know, there's nothing that's gonna happen from that front probably for another twelve months. So

now it's all trade war related. So that's what's kind of been um moving moving things uh recently. And if if the trade war, if it causes some headline risk and that sort of thing, we're gonna look for our individual stocks to try to find good value. And I do think we uh, I think these little dips in here are gonna be great opportunities before the December fifteen tried trade war deadline. And and I think you'll be pleasantly uh surprised to have a nice Christmas rally. Let's

talk about your fund. The Hillary Balance Fund beating just about all of its peers so far this year. It's returning nearly twenty eighty nine percent according to Bloomberg Data. Um, what's balanced mean right now? What's the right balanced strategy in this environment? Yeah? So in a in a in a perfect environment, I guess we'd be about seventy percent in stocks and thirty percent in bonds. And we're we're actually a little bit heavier on in cash right now

as the market goes higher and higher. We how actually we're about ten to ten percent in cash. That it sounds like a lot, yeah for us, it is when we're historically one to two percent in cash. So we've recently taken some profits in a few names that have you know, kind of exceeded our expectations. So have you backed out of more of the fixed income? Are backed

out more of the equity side becasts they've done? Okay? Yeah, so we're we're down at about in stocks right now, so we've kind of back out of that, and then we're kind of at the minimum level on bonds as well, just thinking that you know, with rates going as low as they have, maybe there's not much more you know, left in the bond market either. So are you with

that high cash position. Is it just a case you're waiting for some new equities that kind of catch your attention to invest in, or is it because you think our sessions near? Yeah? I know that basically we we we see it as sort of bullets in the gun.

And if you think about last year December of let's call it December of two thousand and eighteen, when the market fell nine point two percent, that gave us the opportunity to get two new names to work, and literally between Christmas and New Year's we would have put by two more stocks. So we're looking for opportunities and volatility to buy. So let's talk about some of the names that you like. On Semiconductor is a really interesting one.

Not when we hear about a ton, but you like it. Why. Yeah, So we had owned Cypress Semiconductor and Cyper's got bought out by in finniy On for for literally like fifteen times that we were happy, nice premium and and so, uh, there wasn't much left in that, and so we switched

to on Semiconductor. Really, we think it's a kind of a secret way to play the five G build out because they had no exposure, no content at all on on three G or four G. Yet they have a hundred dollars of content on each of these base stations. That's uh, they've got almost all of us, all the suppliers, um, so they're involved in all of those and I think

that's gonna be a nice play for them. It looks like, though I'm just gonna at our f a page on the Bloomberg, it looks like revenues though have been declining quarter to quarter year every year. Uh, same thing with earning, So what what's the problem here. What's interesting is if you look at they do have exposure to auto so they're in um, they're in you know, Europe we saw weaker auto numbers. China we saw weaker auto numbers. The amazing thing is when you look at their peers, their

peers are down like nine or ten. Because of that, they were only down two percent. So they're they're doing much better. And it's because of the content story in autos where each iteration of these electric vehicles or autonomous vehicles, uh, they're getting more and more their content um on each one. So that's what's that's what's helping them out. Talk to

me about E Health. That's another interesting name because I had did an interview earlier today we're gonna play out with the CEO of I A C. And he was talking about getting into the travel business early sort of early Internet, early two thousand's health is sort of trying to do what expedient and travelosity we're doing. You know that that that's it, and it's it's amazing if you compare their their website, which e health dot com, and you compare it to medicare dot com, or you compare

it to healthcare I'm sorry dot gov. Uh, it's it's an amazing difference. The the government run website is so clunky. Uh, there's is extremely slick and a true e commerce website. UH love the demographics. Ten thousand, five hundred people are turning sixty five in the US every single day. Sixty million UH seniors are are eligible for their for for medicare and they just have one percent market share. We're hoping it gets up to four percent market share, so

so they sell insurance they do. It's This is a stock that's up a hundred and thirty four percent this year and we're talking about a forward looking pe of about forty one, which is fine if the if the growth rates justify that. When did you get into this name? We actually got in UM with within about thirty days ago. We bought it. How many days about? It was around fifty nine dollars a share. There was a lot of

headlines on nine. Now it's a ninety. It's been a great performer so far, right, But this is kind of my you know what I'm saying in terms of use these macro headlines to sort of find individual stories and buy them quickly. Because when there was the Medicare for

All discussion, this stock got absolutely walloped. As UM. This would kind of this wouldn't do so well for their business if if every you know, you didn't have to go purchase healthcare when the market gets slammed down, whether it was three months ago, whether it was August, is that what you do a bunch of buying? Yeah, actually we did so, um and and that's that's that's what we're that's what we're hoping to do. And um we we will continue to take advantage of volatility to buy

good stuff. You want the markets to be beat up a little bit, a little bit, a little bit of volatility. Use it as your friend, not your enemy, all right. Sandy Villery, partner of Villary Funds based down New Orleans. Go Tigers, Go Saints, and that is spelled g E A u X go. I'm rolling my eyes me and Taylor Swift. I just put it on Twitter, boy, all right, you must a lot. So we do want to talk about vaping, already under scrutiny for health risks and deaths.

It was linked to a rare type of lung damage in a new case report released just yesterday. Controversy of the safety of the cigarettes man it is raging big time in the U S, where the deaths of as many as forty seven people have been linked to a different severe respiratory illness. The FDA, meantime, has said it does not know when final guidance will be issued when it comes to East cigarettes. So let's talk about regular

regulations of the e cigarette market. With us. Is Dr Joanna co And, Professor of disease prevention and director of the Institute for Global Tobacco Control at Johns Hopkins Bloomberg School of Public Health, joining us on the phone from Baltimore. We do want to point out that the Bloomberg School of Public Health is supported by Michael R. Bloomberg, founder Bloomberg LP and Bloomberg Philanthropies. Michael Bloomberg has also committed a hundred and sixty million dollars in an effort to

ban flavored East cigaret and vaping devices. Dr Cohen, nice to have you with us. This is certainly, um one of the big issues that the country is grappling with, and I think regulators are as well. You know, what are some of the issues that are front and center when it comes to vaping regulation? Right? Well, this is a tricky issue, exactly as you say. On one hand, we want to help get cigarette smokers off of cigarettes,

because that's the most harmful thing you can do. Um. So the idea of the cigarettes and the promise of them was to really provide that off ramp for cigarette smokers. The problem is that, um, instead, we've seen a huge uptake of the cigarette use among kids, and that's exactly not what we want to see. It's turned out to be a public health disaster. And so what happens next

from a regulatory perspective? Dr Cohen? Because you know, what are the interesting things that care was alluding to this, It's happened very fast that the government, uh, and I think even public health advocates have really identified this as a major issue. How do we get sort of smart regulation? But it sounds like in a relatively quick manner given the speed at which this is all happening, that's right.

So Um. One of the things that's very concerning with a huge increase in use among kids is that the vast majority of them are using flavored the cigarettes. Um. We also hear that cigarette smokers who are using the cigarettes to quit also like flavors. So it gets really tricky. How do you get flavors to cigarette smokers who are trying to quit, but keep them completely away from the kids. So it does get tricky, and I think that's why the f d A is taking a little bit of

time to make sure that they get it right. So I guess what I'm trying to understand. Two is I feel like we have various conversations where folks say the problems are with like black market e cigarettes. But I mean the point that you're making is we obviously don't want these in the hands of children. For smokers who are trying to break the habit, East cigarettes is a better option. Is that fair? Is that correct? Well, we still don't have great evidence yet that it really does

help cigarette smokers quip, but that was the promise. That's that's the one reason why we would we might have these cigarettes on the market. What's interesting too, and I know Bloomberg Business Week magazine has covered this um in depth in terms of how quickly East cigarettes seemed to get to be able to come to market, um, even though the FDA oversight wasn't necessarily all in place. I mean,

how did that happen? Well, when the sigarettes first came into the market, the FDA saw them and thought, hey, this is a smoking cessation device, and we need to regulate it as other smoking cessation devices. So we certainly have approved nicotine replacement therapy and other pharmaceutical products that have been shown to be effective to help smokers quit um but Egrette companies food and so we don't want to be regulated like smoking sensation devices. We want to

be regulated like tobacco products. And that put a huge delay in the process. That's taken a while for all the administrative pieces to fall into place for the FDA to actually be able to now take action in regulating the cigarettes like tobacco products. And so, what are the companies saying at this point, Because, as you're alluding to Dr Cohen, you know, companies have very powerful voices among regulators, among lawmakers. We've seen that for decades in the case

of tobacco. Uh, what are they saying and doing that may either help this move along or hinder it. Well, they certainly have their backs against the wall right now and trying to maintain credibility and and trying to maintain as many as much profits as they can as um as the regulators are are working to also address the

public's health and keep kids away from these products. So you know, on one hand, we hear about one of the major e cigarette companies, um taking flavors off the market in this country, but just like we've seen with Big Tobacco in the past, they still have their flavors on the market in other countries around the world. So you know, they're just acting where they feel the pressure and not really taking the high road and thinking about the true impacts of their products bottom line. Just got

about thirty seconds here. Do you think that we just went too fast on this? Uh, they went too fast. We went a little too slow and um, and we're in a bit of a tragedy right now where um, you know, hopefully now our politicians are going to be more concerned about doing right by the kids then by uh concerned about votes in the next election, and that we can pull this epidemic under control. All right, We're gonna leave it that note. UM, Dr Cohen, thank you

so much. Joanna co And, Professor of disease Prevention, Director of the Institute for Global Tobacco Control at Johns Hopkins Bloomberg School of Public Health. Of course, that school supported by Michael R. Bloomberg, founder Bloomberg LP and Bloomberg philanthropies, and as we mentioned earlier Earlier, Michael Bloomberg has also committed money to an effort to ban flavored e cigarettes and vaping devices. All right, so let's talk a little motorcycles. We have got just the man to do it. Jason

Chinok is here. He is CEO of Ducati North America. And can I just start by say we're gonna talk about new bikes and stuff like that. But can I just say, this must be like the coolest job in the world. Unquestionably, it's definitely one of the coolest motorcycle guy. I mean, you actually started working behind the counter at a like doing motorcycle parts, right, Yes, I did. In fact, it was something that years ago, I was following a

different career path and I made the decision. I said, Okay, this is clearly not working out for me this other way I was going, And so I decided I'm going to follow another passion in life. And I started doing my homework, research, informational interviews with executives in the motorcycling industry. And then I realized, I said, the way for me to really learn this is just to cut my teeth at the at the beginning at the very bottom. And so I started off as a parts guy at a

motorcycle dealership. Men, I had an education, and I was way over qualified for like what I was doing, But I said, this is where I got to learn, and I learned customers, I learned the product, I learned how to work with manufacturers. I mean, like that was those those four years were probably the most formative years of my career, uh, in terms of setting me for my future. What's changed about the industry since you started, Uh, the industry is actually it's become a little bit smaller than

back then. I mean back then. Obviously, back in the early nineties or late nineties, credit was a little looser, uh, and so a lot of people were getting finance for motorcycles that maybe weren't really in the position where they should be financing motorcycles. And so as a result, what we saw as we saw a bit of shrinking in

the industry when the recession hitting, credit tried up. But the good thing is is for brands like Ducati and where we're at, we really weren't affected by that because we always sold in the premium and we never had predatory lending or questionable credit practices, and so as a result, we gained a tremendous amount of market share when the recession hit. Now, volumes did affect We're effected a little bit as well. But and then as the market came back,

not to the same degree as it was before. As it came back, we retained our share, increased our volumes, and so it's been quite positive for us in that regard. All right, so let's talk about this new lineup. What's different?

What can people be looking for. Well, one of the flagship motorcycles that a lot of people are getting really excited about is a new motorcycle that we have called the street Fighter, and ye know that it is and and it comes from the idea of somebody taking a sport motorcycle like what you would see out on the racetrack, removing the farings off of it, the body work, and putting on a really cool headlight in the handlebar and that basically takes a very aggressive sport bike and makes

it accessible for the street. Except for we've taken it and redone a completely beautiful redesign and it's built off of the V four platform and chassis which is uh which which is a number one seller last year for us. So there's that product and that that's on one end, and on the other end we find ourselves into the e bike world as well. Well, that's what I'm curious about. Tell us how aggressively you guys are pursuing I mean,

how much your customer wants this? Well, this is something they launched in Europe last year as a pilot project, and then when I saw it come out on myself being a mountain biker, was like, I want that product, even if it's just to have one for myself. Uh. And then we took the last year in taking feedback from our customer base, from our dealer network and just really to understand and research what that markets like. And it's incredible. It's a very fast growing segment in North America.

In Europe, it had actually been going for quite years. But our customer bases our first audience for this product because it's branded Dukati. But there's also really unique technologies and the partnership that we have with the company that's making the bikes with us. So but what's how how well did it sell in Europe? And I knew it sounds like you tinkered with it a little bit. Uh, it's going to the first sales in North America are going to happen, in correct, So what are your anticipation.

What kind of a market size is this? Our market potential? Well, in terms of market potential, we're actually not looking necessarily at the bicycle business to try and compare us to that. We're looking at the first year for to be a supplement to what our dealers are selling and also to complement our customers life so volumes honestly, where it's not

something that we're going to be very aggressive on. We as a premium bran, I'd rather deliver a good experience not only with the dealership and the product, but also for the customer and to be able to build it in a much more natural way. But Jason, why do it? Then? Why do it? Because it's a compliment to our the brand and also to our dealers, and our customers love this and in the motorcycling world a lot of alart.

I mean, I'm glad that you're doing it because I'm kind of all in on green, but I'm you know, you know, I would I would be it would be impossible for me to claim that we were doing this to be green. It's not that it's the fact that it's appreciate the honest it's it's a really interesting technology and product where people can actually enjoy out into the

real world. I mean, as an avid mountain biker, I can now ride with people that maybe aren't as skilled as a mountain biker with me and can go for longer. And that's it's that's why it's a compliment versus let's say, a green approach to the idea of a quiet bike. Uh no, more different than than a bicycle would be. I mean, really, you have a little wizzard the electric motor, and it's a it's a cyst, so it's not it doesn't do the pedaling for you, and it's not like

a motorcycle where you throttle it and go. You have to put the power in in order for it to assist you to go through it. And so talk to us about your customer because, as you say, it's higher end, so maybe a little more recession proof. But we're constantly talking to ceo s about what they're seeing from their customers in terms of their willingness to spend. The consumer

has been unbelievably resilient through this very long bullmarket. As you know, are you seeing any cracks at all, any caution, any pullback as you talk to customers being through the last recession, I'm always have a bit of cautious optimism is we like to use that term, but we continue to bring out more premium product, and we continue to bring out product that's on the higher end in terms of both price that seems to be more resilient than

let's say even the more entry level product in our brand. Interesting, so uh, they think the challenge that we see is how do we continue to bring people into motorcycling, and how do we bring them in through the sub ten thousand dollar motorcycles to help foster new growth in development because at some point those customers are our top end customers start to age out, so you have to replenish them.

We're not really having that sort of effect like some other brands are that are let's say, have dominated that the baby boomer generation. We're less uh, there are other brands y, but we were less affected by that because we have if you have a younger demo on average, we definitely have a younger demographic, but also being a sport brand, sport you get youth. You stimulate this idea of like I want to relive my youth, and so even if you're forty four years old, you want to

ride like you're twenty five year old. And so for a second I thought you were saying forty four, because I'm forty five was older. But I'm just gonna let that slide. No, no, no, that is actually our that's our average age for a Ducadi motorcycles. Who's your typical customer like our You know your your demographic, that's yours? Well, I mean it is it isn't that forty four? Your

forty four years old? Mostly men? And actually with the with the launch of the Scrambler product a couple of years ago, we've been able to shift that trend as well. I mean we had our like a ninety five to five percent ratio and mostly experienced ratio, experienced writers, and with us bringing a new product and actually shift in our communications were actually opening in the world to more women motorcyclists as very cool stuff. All right, great to

catch up with you. Congrats on the new line. Jason Chinik is the CEO of Ducati North America. Here with this in New York City, in our Bloomberg Interactive Brokers Studio today. You know, I don't know. I mean, actually the e bike is really I find very interesting. I find that whole movement, you know, people who go on bike tours and things like that. I hear a lot of good things about that segment. Maybe something there go maybe is a nice brand. I know it is. I

noticed I was just like a tweeting outfit. It was. It was stolen in Germany for a new one. Yeah. I guess you could say that George Siros and the Siros fun taking it a little bit easy. It's definitely a different era. This story in the Finance section of the magazine this week, hitting newsstands as we speak. Also find it at business Week dot com and at Bloomberg dot com. Let's get into it because it is about George Soros and his fund um with me as editor

Pat regne Er. He's the Bloomberg Business Week Markets and Finance editor. He's at our Bloomberg Interactor Broker Studio along with ChIL Weber, editor at Bloomberg business Week. This is a great story. We talked um with various folks, Kathy Burton among them, who has followed the hedge fund industry has written a book about the great hedge fund folks, and Um, it's a different time for George Siros. We know that we've seen that over the last couple of years,

definitely for for Soros. But the story is really about Don fitz Fitzpatrick, who's the chief investment officer of the Soros of Source fund Management. UM And what's really been interesting sort of on her watches and went to the the stories about is the pull away from risk that's really happened there and with it have come returns and some

internal internal turmoil that's come with that those decisions. Um And and Pat had been working with Kathy a little bit on this, um Cacha Porzynski All So on the byline, Pat, what did you what did you and Kathy ultimately come down on when you guys were talking about this story. Yes,

so this is really a story about a culture shift. Um. If you imagine sort of the mystique around sorrows, right, I mean, he's famously the man who broke the Bank of England, and that's just another mystique that's the Wall Street Like, this guy is like a legend for breaking that a billion dollar beat, right, British Pound yeah, and he wanted to go even bigger. Right. He also made a big bet on the US elections and and got that wrong in the and went and went the wrong way.

He's not a conservative guy. He's not a conservative guy in the sense of being a sheepish with what to do with his money. And so it's like the definition of macro trading. You're making these big moves that is um an interesting and can be an exciting strategy have when you're talking about your money and your clients who want to take big swings when you are now running the money in order to support the foundations that you run, and they need they need cash to do the things

that they need to do. Uh, that requires that you think about your money a little bit differently. And so Don Fitzpatrick who's come in, she's really been charged with building a money management firm for this new purpose. And that's not always easy for the hedge fund managers who worked for her. Right, we'll tell us about that, because she's actually gone on a bit of a firing spreak, correct, right, I mean, so she's replaced thirteen portfolio managers some quits,

Um got nudged out the door. Um, you know a lot of the people who have they've done very well since then in terms of raising money. People out there think that they're that they're good money managers, but she didn't necessarily feel like it was a good fit for the firm, both maybe in terms of their style, but also in terms of the kind of investments. I have

to say, what's what's great about this story? And I love how it kind of kicks off about, you know, kind of a classic Business Week take of just reminding everybody about a podcast that happened where she was on it, right and she basically said, hey, you want to come work for us the podcast? I think it speaks too. And we talked about this a little bit on on our show board, where we're at a moment where the hedge fund industry it's not the same industry that it

has been before. And so for somebody who's running a fund associated with Soros to come on a podcast and basically be like, hey, like, if you if you're interested in applying for a job, like, here's a place to apply, I think that really kind of speaks to um an industry at a certain moment, and I think it got, you know, in the in certain certain hedge fund circles.

I think it really speaks to the moment, and it caught a lot of people by surprise, and with something that multiple people brought up to us during their the writer's reporting on the topic because it's weird, it's it's different, well different because you think about Soros, like over the last two three four decades, I mean, if you could get a job, everybody wanted a job there. Everybody wanted to be associated with George Soros and managing his money. Yeah,

that's right. I mean this would have been like any manager's dream job. You wouldn't have needed to hear about it on a podcast. You might have paid money to get the email and like money what you know, to to send it, to send it to um and running what is kind of something similar to a university endowment. It is a different game. Now. One of the things that we we talked about internally is running an endowment is actually really interesting business and there's some legendary pioneering

money managers doing that business. So there could be a really interesting future ahead for this for this firm. But you know, it's it's very early days and it's a rocky transition right now. Well, and she doesn't have to do a lot, but she's got to make sure she guarantees that the Purpose Fund is spending I think about a billion dollars a year. She's going to cover that. Basically, you have to keep it flat, right, and like that that's not totally easy with that much money that's going

out the door. Ran right. You describe that as a as a simple task, but actually, you know, making sure that you have enough money for an institution to live on is actually one of the harder jobs in money man, and not lose money in the process. That's that's what it's all about. So yeah, that's to me, like everything's kind of a strategy story. How do you transition strategies here? And like she's in the middle of this little turbulent period trying to get to the other side of it.

How she doing so far? Well, so quickly, so so far. She's behind her long term benchmark and a little bit closer to what they call her medium term benchmark. She's been at it for two and a half years. That's not a lot of time to measure something, all right, Yeah, kind of giving her a little bit more time. A great story, no doubt about it. It's in the current issue of the magazine, as I mentioned, on news stands

now and you can also check it out online. Jill Webber, thank you so much, Editor of Bloomberg Business Week in our Bloomberg Interactor Broker Studio, Pat Ragneer, thank you as well, Markets and Finance or at Bloomberg Business Week bro a journal. Yeah, but you let me drive. Oh no, no, no, please, I'll do the right drivel. I want to drive. It's kind of tough. Just drive, baby. The questions get drying. This is the drive to the globe. Give me thanks, we'll drive radio. It is time for the Drive to

the close. With us is David Richardson, Executive director and Impacts Asset Management, twenty point three billion dollars in assets under management, joining us in our Bloomberg Interactive Broker Studio on this Thursday. Nice to have you here on Bloomberg Radio. It's as I said to you, as we get a little cookie around here. It's been quite a jam packed week, but I feel like we could say that about every

week for the last decade um. The market trade obviously a little bit quieter today as we wait for that monthly jobs report. How do you see it. What are the trends that you are watching when it comes to the equity market specifically. Sure, our focus has been on the transition to a more sustainable economy and the growth investment opportunities that support that. And there are a lot of areas of the economy that are actually pretty interesting.

It's pretty positive and pretty upbeat. Yeah, for sure. I mean where we're thinking of sustainability is where's the sustainability of return is going to come from in the future, and we think growth and things that have tail winds in growth or interesting. Well, it is sustainability Week and we've been doing certainly a lot of things here at Bloomberg, including a global Responsible Investing form. I was involved in

it earlier this week. Talk to us about the implications of climate change because it can be a huge risk for various industries and I think increasingly because of that they have to take it into account. How do you see it, how do you play it? Well, we think that there are both, yes, as you point out risks and opportunities, and the risks are thinking that the past

is prologue for the future. We definitely see lots of changes being driven by climate change, whether that's changing, whether patterns and either drought or like we experience here in New York with Hurricane Sandy and flooding of subways. I mean, both of those are investment opportunities and trying to mitigate that. Um for climate change, there is an adaptation angle too well,

So when it comes you know, it's interesting. I want to I want to ask you, David, because I feel like we've been talking about climate change and certainly um in vironmental types of investing for many, many, many years. I do feel like it's becoming a lot more productive, and it's not just kind of a niche or cool thing to do, but there's actually really remarkable returns in doing it. What are what are the bigger trends that you're following that you think investors should be allocating money

to at this point. So, what we think about when we're thinking about climate changes the areas of the economy that are going to be most impacted, and one of those would be an energy and we see a movement from traditional energy to renewable energy, whether that's wind and solar and storage, sort of repowering the grid is a big theme that's going to be important for the future. But we've been talking about that for a while. What's

different about it? Because it's interesting in a day when we've been talking about the Saudi Aramco i p biggest ever, you know, some have said, I wonder if this is the top of the oil markets for them to be doing this. I mean, the changes from you know, fuels as we've known them. It's taking longer than everybody anticipated it. So so what is the energy play? What is the

right energy play right now? Well, we were now seeing the commitment to net zero economies, particularly over in Asia and in Europe, and that is going to be the requirements to do that and get to a net zero emissions economy by require complete rewiring and repowering, and it's not happening as fast as people would like. But you see the large tech companies committing to renewable energy for their power. It's driving down costs. Battery storage, I think,

is a big theme. It's not yet investable in our view, but it's going to be fairly quickly. The rollout of electric vehicles and electrification of transportation, that's all a movement towards a low carbon economy. And there are some great themes that maybe it's not just the renewable energy, but it's the related technology. How do you invest in it in the most productive way today? The by productive I

mean in terms of generating returns. Yeah. Sure. For the best way to reduce carbon emissions actually is to use less energy. And so energy efficiency is a theme that we've been investing in, whether that's reducing energy demand and UM er sorry, UH, residences and commercial facilities, power, industrial facilities. Those are really interesting and it's pretty in some respects

low tech stuff. But UM we're also seeing that with climate change and climate risk, there's a lot of opportunity around what are because of changing weather patterns, you're seeing UM drought and we're seeing the horrific fires in Australia and UH in California. And I think what's interesting is, you know, a year ago there twenty thousand people affected by the fires in California. This year there were two

million people affected because the power got turned off. And that makes it a headline issue that investors are taking notice of. Now you need all this stand by generation because that happened when they you know, the winemakers were crushing grapes, So now they need standby power and that begets a whole bunch of investment. Is that where you would allocate money at this point? Kind of that stand by generation area. It's been one area that's been quite

profitable for us, and you've liked that. Um. What else in terms of electric vehicles? How do you see it? David? Um?

You know, all of them are making big bag, spending lots of money, and as a result, they're you know, cutting back on workers because they're kind of getting rid of out of you know, businesses that they think don't make sense, you know, as much in terms of electric vehicles, how soon before it really is as significant as we kind of talk about it today, you know, like we kind of play it up a lot, and it's obviously coming. But I'm just curious in terms of an investment payoff,

I think, well, there's lots of opportunity. Now. What we've been thinking about is what are the companies making technology that's going to go in every electric vehicle, not components, the components exactly, because there's a lot of new componentry that's required that's different than internal combustion engine vehicles, and those products and companies and services have been doing quite well.

I think you're seeing a rollout of a lot of new electric vehicle models by almost every manufacturer, and new manufacturers coming into the four China's requiring electrification of their vehicle fleet and that's driving a lot of innovation and and growth in terms of metrics for identifying companies that are doing environmentally uh sustainable initiatives? Do we need to get better in terms of being able to create some transparency when it comes to companies and what they're doing.

Just got about thirty seconds. Sure, I think that you know, we've had a focus on looking at the revenues that are involved in these environmental markets and looking at that first, but you can also measure some environmental impact, positive environmental impact, whether it's reduction and emissions or generation of renewable energy and things like that. Alright, well, popular, it's a great topic and I know like we've been talking about it a lot, focused on it. Um, Thank you so much,

really appreciate it. David Richard, City's Executive Director of Impacts Asset Management twenty point three billion in assets under management in our Bloomberg Interactive Broker Studio. 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