Rudolf Dassler, Adi Dassler And Adi Das discussed on Bloomberg Markets

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Kids That's a Bloomberg business flash Bloomberg markets continues now with all and max Do you know what's cool about you know the founder of puma was No Rudolf dassler his brother won Adi dassler founded a rival Shoe company I always think it's very cool Adidas are obviously founded of Adi das and his brother Rudolph founded puma All right now let's get back to the markets Tom palm president and chief investment officer at plum funds joins us on the phone from Madison Wisconsin what a great town And he's a portfolio manager there The plum balanced fun Tom we are today is not the I guess the worst day to be an equity investor we're up again to 45 85 right now so hovering near record high on the S&P 500 Even though we're all worried about supply chains and labor shortages and inflation what gives Well it is interesting because the earnings are coming up and right now we've had basically over half of the market cap of the S&P has reported There are three things that are really emerging as trends With 75% of the company's beating their projections growth stocks have been beating on revenue by 2018 versus 12 so far But value stocks have been beating on earnings growth 40% really compared about low 20s for typical growth stock So in other words the cyclical economy cyclical growth is being beating secular growth in terms of earnings growth and in stock performance So we're seeing this despite these issues that you just mentioned as really a tale of which companies are dealing with the supply chain disruptions and the cost inflation If there is beating and doing well they're getting rewarded but if they do a bad job man they're getting punished Tom how long is this cyclical play work I think a lot of investors it's been a long time since value has been a good performance It's been a long time since small cap And a lot of investors are just unsure how long this cycle lasts How do you think about that This is there's a very strong possibility that this is just a blip because we have had in the last 12 years to different periods of time when the value stocks have outperformed I think once we start to get to tougher comparisons once we overlap the pandemic we're going to start to look again at which companies are true leaders and our combining both cyclical growth with these really powerful digital growth trends that we've been seeing for the last dozen years So in terms of if I have new money to put to work is it is now a time to still put it in equities Is there any other game in town It is very difficult Managing a balance fund we look at bonds also and of course with interest rates at these levels and the talk that the fed is going to start to end their tapering So we'll start to see pressure on interest rates It makes you a little bit cautious about what types of fixed income items to own You've had an incredible spike in some commodity prices but we've also seen those show some signs of topping So for us it looks like good quality common stocks They're still there They're hitting new records makes people anxious But I started out when the S&P was about 70 So 7 zero 45 times higher We've hit lots of new heights Tom how about energy you mentioned commodities and you've got WTI crude at north of $82 a share How do you think about energy stocks here They are so depressed I mean again back in the early 80s they were 35% in the S&P and other the last year they bottomed out at about three So there is a possibility they could still run for a while But obviously there's some real alternatives and the political pressure on them So we've been cautious We haven't been playing that because we think that there's a fair possibility that once supply and demand get a little bit more aligned that there's still going to be those political pressures on energy stocks Is supply and demand starting to get more aligned now I talked to Herbert DCO Volkswagen this morning he said month after month it's finally starting to get better with chips We heard the same from Stellantis and Mary Barra Is that is there an end in sight to these problems Well it's going to be like the pandemic It's going to be something that's going to be volatile and move both both ways But yes it is the trend is going to speed towards getting an alignment between supply and demand and that will reduce some of these price pressures Hey Tom thanks so much for joining us We always appreciate getting a few minutes of your time Tom plum president and chief investment officer of the plumb funds joining us on a phone from Madison Wisconsin And again strong strong move here to the market We have the S&P up about a tenth of 1% NASDAQ up up almost one full percentage point So you're Addison Yeah What's that You ever been to Madison I have great town great town What a town I loved every minute of my time there Big big there's actually a big big money institutional investor money in Madison strong funds which is now part of I guess Wells Fargo the Wisconsin investment board lots of reasons ago to Madison I was just hanging out with college kids I was in college This was all business for me going into the mid Midwest All right right now let's

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