YouSaid · the spoken record

Mark Neuman

lines on the record: 81
first: 2023-08-25
most recent: 2023-08-25
sittings or episodes: 1
sources: podcast

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“Both in production and in consumption and in the byproducts, if you will, or the reduction of, there's room for this to grow further. And I think that if enough people got the education and understanding, the overall Community benefit and further expansion of this movement can proliferate further.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“A big part of this push is part of the soil health bill, which came a couple years ago and the Biden inflation reduction act for his whatever we want to talk about, the title of that act, they have allocated fair bits of money to promoting organic, local, historically underserved, demographically challenged, let's say, communities to really step up. It's almost as if there is a little element of let's help and save the smaller farmers and hopefully return to higher quality outputs hand produced as opposed to machine produced to use a sort of example. And that is where the pushback continues. And I think that as the communities can sort of see the benefit.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Yes. And then that's where your original, well, not original, but previous question about how big is the movement and is it here to stay?”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“But so have any companies who purchased stuff from you, or maybe in the future, do you think that they might do so for ESG reasons? So I want to be in the Larry Finks ESGU. So I'm going to do this deal.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“To improve their organic or improve their environmental impact, if you will, and work better in their communities. So it's really a, you know, in the end, measurable and those people getting involved really seem to care about creating this sort of sustainable, repeatable event based on sort of how we treat the environment on the way in and how we narrow the supply chain, cut out the middleman, right? That's how we really make it more cost effective. We're going from farm, our farms, to our food center, if you will, where people in the community have access. So we're eliminating Distance traveled miles used, energy used to get from point A to point B. And that's really the crux of our societal benefit, if you will, from the farmers to the consumers.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Area in the region that has a farm from one acre to five acres to 10 to the bigger ones, you know, can get access to our expertise we've been farming for 20 plus years more maybe. And then our technical abilities and a little bit of financial assistance to help them”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Level in relation. And so we handle a lot of grain and we have those who are consumers of grain consuming, let's say, higher scoring ESG product organically raised, more conservative, better impact on the environment. So there are companies that have an appetite pun intended, I guess, to purchase some of these commodities that have a better ESG score. So it improves and they can say, look, we are procuring these grains as part of our process and they are environmentally better impacting than what we did traditionally. And so we're making those innovations and those changes. And we're actually working with the government in some cases to help support these local organic urban historically underserved farmers. So anybody in the”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, there's a lot there in that question, but yes, you know, on the overall impact side, we have been able to, like I say, measure the inputs and measure the processes to really actually, we're working with some experts from the NRCS, National Resource Conservation Service Center. And they have the skills and the ability to do the measuring of the soil and basically the improving of the byproducts and the runoff into the sort of streams and rivers nearby. So that's pretty tangible. You know, as we produce, say, organic grains, it changes the handling of those products in terms of what we call scope three ESG criteria, your investments and how you handle products and on a sort of secondary tertiary.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“So, the farm is based in, we have one big farm based in southern Georgia with like five or six member farms in that little group. And then we have our offices are in Atlanta. We have our butcher shop and distribution center in nearby Atlanta. And yeah, it's sort of like basically making the supply chain, vertically integrated supply chain with, like I said, real measurable ESG impact both on the environment side and the social side and the governance too. We have some board members from diverse backgrounds to give us a real broad perspective on sort of what the community needs and where the greatest impact can be felt and be made.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“ESG expertise and what are the pros and cons of ESG now applying it to real life farming down here in Atlanta. And it's super interesting because not only does it help the suppliers, the producers, the farms themselves, but it also we're working in the community to do some outreach and some education and make our products available, accessible to local and historically underserved communities to give them access to high quality foods and actually on some level, interestingly enough supplant their consumption of say coke and Pepsi and potato chips and replace it with high quality organic non-GMO proteins and vegetables and produce that we produce. So it's really translating the ESG experience into real community impact and sustainability and regenerative farming. It's pretty cool.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“And carbon was this, our use of water was that. And then on the back end, you know, six months a year later, we see the improvements. And the result is better impact on the environment and better service of products to the consumer. So HERO stands for Healing the Environment, Regenerating Ourselves. So for me, it's sort of this.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Oh, awesome. Thanks, Jack. Yeah, so the transition I've made recently is towards real, measurable ESG. And I connected down here. I live in Atlanta now two years. I connected with a farmer, former Wall Street guy from years ago, but he runs an organic farm. And he and I have been talking for quite a while. Ironically, he had an ETF, a commodity ETF about a dozen years ago or so that did very well, and he sort of parlayed that into expanding his farm. He is an organic farmer and he does, he produces quality, clean, non-GMO and organic goods, and it's measurable in the soil content, the nitrogen and carbon sequestration, use of water, runoff of water. So it's true real measurable ESG. We've been able to take soil samples and say prior to our application of this fertilizer, our content in”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“If returns continue to suffer, if there is struggle within the business community of, hey, what's the point here? We lost money last year. We had 37 chief people officers as an L in P&L. That's not going to work for the longevity of this company. That's where you'll start to see the further pushback. Look, in the end, ESG is an important. Element to your risk management process, it is by no means the panacea end all be all. It becomes just another factor to your investing process, in my opinion.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Right. And I think, like anything that lasts so long eventually has to come to an end. But here's an interesting anecdote. I did some work and found that like, you know, 80% or maybe it's more now of the S&P 500 companies have their pay tied to. To pay up a little bit, to be compliant with ESG or improve their ESG scores. Now this goes one step further to that big company going and getting and improving the budget to consume environmentally friendly chocolate or whatever or produce or whatever it is. They then go to the bank and get better banking rates perhaps because of their improved scores. And this is what perpetuates the cycle. That's fair point. And I think it's a good point to make, Jack. I would just say that”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“The question I have is Is it really, can you really touch the reason, point to the reason why those investments are better and doing better overall net net in the end? And I can't really answer that in like two seconds, but I think it's something to continue to debate. Now, in terms of it sticking around and it lasting.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“They're not willing to say, hey, take my money and apply it to something that I can't really understand or gauge or really get my arms around the impact. I just want to get good returns and own companies that I know. That's the older crowd that you point out. The other thing that's been really interesting, and it goes to sort of what scenario does it increase or continue or may not, the younger crowd is willing to pay up for ESG investments in the case of sort of like virtue and also being guilty. Like I'm guilty, I feel shame. So those investors in the younger crowd, they're willing to pay up. They're willing to sacrifice some returns in the name of like doing good and being a steward of positive things in the ESG environment. And those are great things.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Yes, he was on. I did an interview with him YouTube too. He's a great guy. We become pen pals. But in this article, there were some distinct aspects to the ESG investor, the correlation towards ESG was higher for younger, as you pointed out right there. Relatively wealthier, relatively Democrat, and it was sort of, like you pointed out, various duly there, Jack, the older crowd.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Right, so the first shot across the bow was last year and returns. Because returns really drive people's emotions, right? They look at their P&L. They're like, okay, whatever happened here was the best and I'm the smartest bull market. Whatever happened here was the worst and I'm the dumbest bear market. So last year was the first shot across the bow in terms of ESG performance being pretty negative down 20, 25, down 30. And that sort of opened people's eyes. Now, my recent research, and I've reviewed a white paper written by some esteemed academics, NYU and Stanford, Georgetown. Anyway, they came up with a recent paper. It was actually sent to me by Aswath the Motorin from NYU. He said, Mark, take a look at this, read this, whatever.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Amazon, down 50. Apple down 28 or something, Google down 30 because everyone owns those and everyone can dispute those. Look, everyone could just sell the cues, right? The Q's are massively liquid. You want to raise money, you just puke the cues. That's going to hit those big five, six stocks the most in that context. But sell what you can when you can, right? And I think it's easier to do that with the big tech that everybody owns than with ExxonMobil. You're not getting a lot of people saying, oh my God, I'm going to puke Exxon because I'm too long Exxon. I don't think there's enough people who are too long Exxon.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Portfolio emergency based on I need cash from my portfolio. There's a little bit of a difference. You know, when it all goes to all of those pear shapes and everything is sold, yes, the least owned will have four sellers that move the stock radar. I agree with that. But in general markets, Something happening somewhere that's not a market correlated to one event. Something happening somewhere in a single name or a group of names or the housing sector where someone has to raise money. They need to raise a lot of liquidity from the most liquid names they own. Look, I look at 2022. It wasn't that event like... Flat on, but it was the event where, wait, rates are going up. I hadn't planned for this. This is, I just need to raise some cash.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“So in injecting a correlations go to one type environment, right, where everything is for sale. And I think that's a fair point you make. In March 2020, for example, everything was for sale, right? Nobody knew anything and everyone was like, the unknown is here out. Whereas I look at it as, oh, I have a margin call somewhere else. I just need to raise 50 million bucks. Okay, it's easier to just sort of hit something on very long and is very liquid. Yes, in an environment, Jack, where things all go together, sure, the higher beta riskier stocks will suffer more. Agreed. I was talking less a general macro contagion as more of a”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“To make up for a margin call, they got to come hit the stocks they know and they own in size. And that's where, you know, one risk that exists out there. For example, the short interest in Apple, I think it's less than 1%. Is there any risk of a short cover in Apple? No. Is there a risk of who doesn't own Apple other than me? Okay. Who doesn't? So if someone says, oh my goodness, Apple hasn't grown in three quarters. Steve Jobs' ghost is haunting that place. And they're a phone company that trades that I don't even know the numbers at 27 times. I have a little priestly. But it's like, I got to raise a lot of money. Apple. A million for sale. Yeah, but Mark, you know.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Okay, so if I want to raise $50,000, meaning liquid aid stuff, almost any stock would handle $50,000 worth of redemption, if you will. What if I want to redeem a billion dollars? How many stocks can you do that with? So for example, Kathy Wood, if she is forced to redeem, how many shares of Ginkgo BioWorks can she really sell without destroying the stock, right? So if someone else says, I need to raise a billion dollars, well, it's probably two, three minutes of work in Apple or Amazon, right? So if enough people got a margin call, had a credit event, had some sovereign exposure to pick a country, Japan, if they lose control of the yield curve or whatever. And they need to raise money.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Right, so but make me the case that is a seismically large risk for investors who are in ESG funds that own 300 stocks that track the S&P 500 instead of the 500 stocks that track the S&P 500, make the case that they are actually going to suffer adversely. I mean, they own Apple. They own Microsoft, those companies, they may be overvalued, but I mean, those are quality companies. It's not as if ESG has gotten everyone into stocks that are promising some sort of green energy thing and the science doesn't work. I mean, those stocks exist, and there have been a lot of promotions, but those stocks typically go down quite rapidly after they IPO.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Is less ESG, right? The current administration is like more ESG. The outside group is like less ESH. If you see a shift in the political leanings of things, you could see more regulation, more laws sort of shunning and chiding ESG, which will cause investors and investment managers to diversify away from the narrower universe of ESG, which is where I also, so there is a lot of factors, a lot of shots on goal, as we say, as to why this posture makes some sense, at least for the investors diversifying their portfolios.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Finish mutual fund that switched out of two different DWS securities. One was ESG into the other, which was climate action, $2 billion shift of funds. Again, more of the flow out of the ESG names and into everything else. So I think as we see a bit more of the ESG veil lifted, you will see folks saying, I need more diversification than what ESG provides, which is why these sectors, these underowned ones, I still think, are super interesting, not only from a value and a dividend and stuff like that, but they're underowned relative to the rest of the market. So on a rotation, you know, you can see movement back plus. And I don't want to get political at all. I don't want to get politically charged anybody in this but the pushback from against the current administration”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Okay, sorry. So the ESG Orphans Index is what I created. That was the six sectors, market cap weighted, fossil fuel nuclear energy, 25% each, weapons 21%, alcohol, tobacco 25%, and then gambling a small sector market cap-wise was about 4%. But the flow, this discusses the flow and the pendulum swinging as people come out of these ESG funds They go into the rest of the universe, if you will, and in that universe is these exclusions, these orphans that have been, that have not seen inflows. So as people shift out of the ESG funds, they shift into these orphans which are underowned, as we talked about. There was another one I want to say SSGE or SSEG S-E-G. I don't know, there was a big”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“The BlackRock investors said, We want out of ESG to $6 billion. Where should we put our money? And the BlackRock stable of advisors said, oh, go into QUAL. That's where you want to go, right? Kept it in-house and kept the investors, just move them on to the next dog, right? In terms of the dog track I was telling you about. Now, ironically is the overlap in QUA, L and ESGU is more than you think. So that didn't really change the overall profile. The one of the things that was interesting to me in terms of the orphans and the exclusions in the QUAL, there were like five or six of the orphans, right? So five names that were never touched because of ESG.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Had 5x for the beta, right? And that's where the marketing skills of a BlackRock. And look, sort of the, I did some work and I am well and well reasonably well versed in the inner workings of how funds get bigger and smaller and who does the distribution and who has the attention of the investor and the ability to move their funds. I'll give you an example regarding ESGU. In the first quarter of this year, ESGU lost I think it was $6 billion of flows. They went out. Where did they go? They went into QUAL, which is a quality stock ETF within the BlackRock umbrella.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, the expense ratio for ESG Aware, which owns 300 companies, which you said had a higher beta at one time, is 15 basis points, which is still by no means expensive at all, but it's just, you know, it's five times higher.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Okay, so yeah, I think you have a view on the downside, the risks of ESG that it sounds like you think that they are large and very averse. So I want to get into that. But just you said that the ESGU, the BlackRock iShares, ESG Aware, ETF, that had a higher beta to the S&P 500 than SPY, which pretty much is the S&P 500. Yeah, the expense ratio for IVV, the S&P 500 ETF, is three basis points. So exceptionally cheap. The expensive...”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Good idea on some level run amok by Wall Street. You know, as you got further and newer iterations, the risk reward got skewed and the narrative and the story got skewed and then investors get drawn in and then there's this lopsided risk. You saw it in mortgage bonds, junk bonds, CDOs. I believe the last decade, the biggest bubble, bar none, bigger than crypto, bigger than SPAX, was ESG. And I still think there is tons of imbalanced risk reward yet to come out. I still think that that's out there somewhere.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“More efficient rating systems and all these different things. It's this constantly evolving definition of something that's really undefinable. To me, it's there's a racetrack, a dog track, and the hare is running around the track and all the dogs are chasing it. And the hare is ESC and ESU ruling and ratings. And they keep changing that and it runs faster and the dogs never catch it. But the better stay out there and go out their money. Back in the 80s, we had junk bonds and Michael Milken. We had mortgage bonds and Louis Renieri. And then even more recently, we had the GFC and the CDOs. And it was just sort of this.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“The two things one, it stems from sort of the story you tell and how you position the narrative. And then the other is if you go from random One rating agency to another, I imagine you would see a great variation. And that's part of the challenge too. You know, here's the interesting stat I like to talk about, Jack, is the fees generated from the ESG industry are now into the billions. So when you think about keeping the shiny object shiny and moving and sort of continuously evolving into a new definition, there are a lot of people whose livelihoods depend on the ESG story. And you see articles written by, I don't know, I don't want to pick on anybody. XYZ consulting or the Chief Sustainability Officer at XYZ firm or the head of sustainability at a law firm. And they'll say, we need to keep regulations going. We need to make.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“It's better to be a fraud that says nice things about the environment every now and then than a company with good governance but just isn't fossil fuels. And by the way, and by the way, so Exxon and Tesla now, Exxon has a higher risk score than Tesla now. So a lower ESG score that Tesla, but it was either the case that they at one point Tesla had a lower ranking than Exxon or I'm just reading now from University of Michigan business school that a sustainability index kept Exxon but dropped Tesla. So yeah. And the point is that it's arbitrary and that Exxon can boost its ESG score by selling fossil fuels, but are they selling it to a nature trust that's going to keep it there? No, they're selling it to either a smaller publicly traded company or a private equity company that's going to drill it and likely drill it in a dirtier way than Exxon.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Tesla during that time period didn't really make many changes to the way they were doing business, so they sort of stood stagnant. So on a relative basis, ExxonMobil's tech score, sorry, ESG score, excuse me, improves while Tesla's does not. And I'll give you one more Exxon example in the world of ESG. So FTX, right? Sam Bankman Fried's crypto fraud. I've heard of it. Yep.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“And they sell parcels of land to private equity. Some domestic, some not domestic, but people capture that energy flow and they may be very likely could be less scrupulous because they're private, right? They're not publicly visible. Then the practices at, say, ExxonMobil in their day-to-day. So net, net, the energy flow, the production of oil doesn't change. And you might see even a decrease in the stringency, if you will, of producing that oil. Maybe they let some people go. Maybe they want to cut costs. I'm just making stuff up. But ExxonMobil's ESG score improves. They got rid of publicly visible parcels of oil-producing lands. Exxon's, like I said, ESG score improves.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“So there was big news. I'm going to say it was middle of last year, but Tesla, the electric vehicle company, everybody knows that it's a cool car. I've driven a couple. I like some aspects of it, but finding batteries is a messy business. Elon is not the most friendly to employees and those kinds of things. And Elon himself, wild card for sure. ExxonMobil, we know what they do mostly. What are the biggest? Maybe the biggest in the US at least. So when they are working on their ESG score, filling out a due diligence questionnaire, you know, part of the questioning is, what are you doing about your fossil fuel profile? Have you sold off parcels and those kinds of things? Exxon has several public parcels of land that they wish to divest from and then improve their ESG score.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Don't own Cog and Pepsi. Or you want a big dividend, irrespective of ESG? Fine, Coken Pepsi, British tobacco at Altria, those are big dividends. Like, you want to give your investor exactly what you're doing and why. And to say, I'm ESG, but I also like dividends, so I'm going to buy these fake ESG companies that score well. You're doing a disservice. And does the investor know what they own and why”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Right, right. Well, so we could get into, you could probably look up five other rating agencies and see five other scores on Coca-Cola, which is part and parcel with it. But in the end, right, New Veen has a large cap dividend ESG fund. For a while there, I haven't looked recently, but Coke and Pepsi were top five holdings. Now there, an investment manager is saying, yeah, it scores OK, ESG, and you and I can debate whether it does, but there's a big dividend there. And so someone choosing between dividends and ESG, they're conflating factors in their investment model. So there's no like, oh, this is the attribution is because of the dividend or because of the ESG. It's all pretty gray. I would look at it and say, look, you want to be an ESG? Fine.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's got medium risk, medium risk ESG score of 21.6 between zero and I guess severe is 40 plus. And it's actually of 620 food products company in some index, it's the 32 number 32. So it's in the fifth, it's in the 5%ile for being a great ESG company, according to where I'm reading, sustainalities. Right.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Societally, Coke and Pepsi and the obesity and diabetes cost our healthcare system more, I think it's 30 to 40 percent more. I can't remember the statistics that I uncovered, more problems societally and healthcare system-wise than alcohol and tobacco problems. Missed work from being whatever, and cancer and those kinds of things. But that's not a positive thing like alcohol, tobacco, and the negative ills. But the cost on our society is 40%, 34% less than diabetes and obesity each year. So someone somewhere in the decision making, the opinions on ESG pushed Coke and Pepsi to be sort of okay ESG.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“At schools, the vending machines have Coca-Cola, Doritos, candy bars, as what they're offering to kids in the school, borderline unregulated, right? Like, oh, I got a couple bucks. I'm buying sugar and whatever. Coca-Cola is the number one contributor, Pepsi, Coke. Well, not number one. I don't want to use extremes, but top contributor to type 2 diabetes and obesity in our country. Okay. They have millions of plastic bottles with those plastic cups, okay? Like we can talk about the water. The water table and how it's polluted and we actually need a lot of, you know, clean water produced as opposed to drinking taps. But I don't want to get into that. But in terms of, you know, so from an environmental perspective, Coke and Pepsi, the plastic bottles, that in itself is a big issue.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“So incentives, I think you really nailed it right there with that one. It's about incentives. Let's talk about Coca Cola for a second, okay? Now I have, well, take a quarter step back. The cell phone thing. My daughter just came back from camp and she said to me yesterday, I picked her up and she said, I'm actually not excited about the cell phone. I'm like, what do you mean? You get to talk to your friend. She goes, actually, the last six or seven weeks without the cell phone, I was pretty happy. And that's important. And I think it's key. And it's really tough as a parent because I have three kids. It's like the cell phone. They're missing out. Maybe they're friends, but they're doing themselves better by not being in front of those phones. Anyway, let's talk about Coca-Cola for a second, okay? And because I have kids.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Larry Fink's view is wrong. I'm just saying it's arbitrary. And I think that a lot of ESG, they market it according to what the time when the price of oil was at $40, oil is very low ESG. Then when the price of oil goes to $120, maybe it gets a little bit more ESG because people having a 10% inflation rate, it's not very good for society. I think that for the case of nuclear, that really shows maybe the financial incentives because the nuclear industry is as stock market cap is tiny. If they like there's not much money to be gained by having a nuclear ETF, you know, so they can trash it. Whereas they can't trash Apple. It's Apple's too big.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“A very low hybrid or something like that. And tobacco, yeah, I mean, I don't smoke either. And I mean, I think it's a good thing that tobacco companies cannot legally advertise. That's my personal opinion that, you know, I don't think people should attach a lot of weight to and people have their own opinions. But you could, you know, so, okay, so low ESUs for iss for tobacco companies, that might make sense to me. But then what about Coca-Cola? A lot of soft drinks are really a giant fueler of obesity at McDonald's as well. I might say smartphones are not great for people's mental health, which is maybe more important than even more important than physical health. We were recently in a remote area, and I feel great. Maybe if people walked around, not on their cell phones, maybe they wouldn't have such, you know, issues. And I mean, those are the giant companies that have all these great ESG scores. So I'm not saying my own view is right and that, you know.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“The key point about this is that the scores are fundamentally arbitrary, in my opinion. You can tell us about this. And they pretend as if they're very scientific. And a perfect example is Oya. Okay, investing in oil that causes the stock to go higher so the company can issue shares or issue debt to drill more and pollute more, which will cause more carbon CO2 in the atmosphere, which will cause greater temperatures, greater climate change. That argument makes sense to me. But then why is, you know, you could also say nuclear energy is the most ESG thing in the world because it produces energy so it can replace that. You could say all this electric vehicles, yeah, if it's all from nuclear and solar and wind, then that's very low carbon emission. But if it's getting it from coal, maybe it's, you know, the electricity that's fueling the electric car is all from coal, maybe it's actually more ESG to have a, you know,”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Environmental, social, and governance, right? So SVB had a medium ESG risk ranking before it imploded. It's a bank that had no chief risk officer for eight months. They could be doing all the most magical things for the environment. They could have the most diverse workforce in history. But a bank without a risk manager for eight months, that's a zero in governance. That three-legged stool only has two legs. So as far as an ESG investment, Silicon Valley never makes the grade. It should never. But what did it do? Well, we have that ESG stamp, and there's a lot of people who did the work maybe, and said, oh, this is part of our portfolio, and it's an ESG darling. Well, everyone got misled. Everyone was lazy and said. Oh, if so and so's invested, they must have done the work. I'm in with them. And you see what happened.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Can do that for us. Right. So you would have to, and this is what makes it really difficult for the RIA community and the whole investment world. Let's talk about like Silicon Valley Bank. This is a perfect example of what we're talking about. Three-legged stool, E, S-G.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT
“Both of which have. That's right. So I think that within the ESG tossing aside of names, many, many have been in that dragnet that don't deserve to be. So this is an interesting thing that I thought about a lot. ESG is very personal. Very, Jack, you may rank carbon footprint higher or lower than, I don't know, diversity. I'm just making it up. If you want to develop the Jack Farley ESG portfolio, that doesn't look like Mark Newman's ESG portfolio.”
2023-08-25 · Forward Guidance · ESG: The 40 Trillion Dollar Bubble | Mark Neuman · IDENTIFIED FROM THE TRANSCRIPT