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Best Stocks To Buy Now: BA, GM - YouTube
Channel: TD Ameritrade Network
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okay we spent a lot of time talking
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about the fed this afternoon inflation
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and recession risk let's get into some
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stock specifics joining us jack murphy
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is the co-cio and portfolio manager
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easterly investment partners jack
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welcome to the show thanks for being
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here
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good morning or good afternoon how are
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you doing
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doing well you've got some companies on
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your mind let's get into it we've been
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talking the fed all afternoon tell us
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about some stocks you like i want to
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start with boeing because you're
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certainly out of consensus on that one
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yeah i mean we're you know we're
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controlling value guys and i think you
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know the sentiment towards boeing can't
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be much worse whether it's on the
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commercial side or some of the contracts
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have been on
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the defense team but i think the
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incremental news going forward is going
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to start to get better
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you're gonna have a lot of cash flow and
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i don't get all that cash flow you can
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capitalize because it's working down
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that 787 and 737 max inventory but you
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know i think the news gets better going
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forward i think sentiment can't get
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worse
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as a big exporter if you believe the
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economy is going to hang in there if you
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believe people are going to travel and
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we do
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i think boeing is an interesting
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contrarian pick i wouldn't put a lot of
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money in it but i think it's certainly a
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spot in your portfolio okay so it's down
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to worth a shot levels pretty amazing
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that we're even having that conversation
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about boeing and many would argue a lot
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of this is their own doing
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it's a very unique chart it doesn't
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really look like much else out there
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down at covet lows though i guess i get
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your point i mean we've only treated
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below 90 bucks really for one week and
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it was at the height of the early
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pandemic fear
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yeah i think you know you have a new
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management team or relatively new
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management teams coming aboard here
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i think the news gets better i think
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they figure out their engineering issues
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they get better on their contracts and
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you know once they get the dreamliner
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out the door and i think that's coming
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sometime in the next several months
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um
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you know the 787 then you know that
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working capital starts to get better um
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you know they've got to do a better job
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on the engineering side um but i think
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they've certainly put the resources to
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work there and like i said sentiment
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can't get worse
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one of the other companies like also in
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industrials but a different side of
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transportation as general motors pulling
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back this year uh but had quite a big
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2020 2021
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is the bolt case here
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based on their progress in the future of
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ev
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vehicles or is this a bull case based on
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the fact that uh a lot of those ev
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trades haven't been working and they
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still mostly make internal combustion
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engines because i've heard guests come
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on and give bold cases for both
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yeah i i think that's the autonomous
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driving we think is the big opportunity
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in general motors
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you know they're certainly going to
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start transmissioning the product line
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to the eevee side
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um and i think that's well underway but
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you know you throw off a ton of free
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cash flow in the industrial company
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whether it's going to be evs going
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forward or the internal combustion
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engines now you know it wasn't we
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weren't crazy about this investment
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where they upped their investment in the
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cruise business a ways back i think if
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you you know you cruises implied
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valuation inside the general motors is
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nothing right now and we think it's
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worth multiple tens of billions of
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dollars so you got a lot of free cash
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flow i'd rather see them buy that gm
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stock than uh then increase their stake
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and cruise um you know i think we would
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agree to disagree with the management
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team on that but um you know the free
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cash flow estimates on the street next
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year are five and a half billion
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internally we use a number that is
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several billion higher than that and if
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you kind of do the math there the
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valuation's dirt cheap with or without
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cruz
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interesting now did they um
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ultimately sell into the uber lyft and
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the uh autonomous need from the riot
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hailing businesses that are struggling
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right now is that an in-market for them
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eventually
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yeah i think their their ride sharing
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business is just about to get going here
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on the west coast
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um uh well they'll be able to start
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picking up passengers soon you know the
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we'll look at what the business model uh
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there is a business model that can
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certainly be very compelling there but i
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think inside a general motors valuation
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right now you're not paying anything for
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it um it's self-funding you've gotten uh
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funding from a lot of uh reputable
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people there um so they should be able
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to just use the cash that that cruz has
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it's on its own balance sheet you know
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we think it's going to be successful i
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think there's plenty of people who don't
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you know we'll agree to disagree with
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them there too
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um but if you know if if our numbers are
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right and you know most recessions are
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caused because people have too much
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inventory the car businesses doesn't
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have enough inventory um you're
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certainly going to ramp up or
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re remake the inventory you need to have
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in the channel right now
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it seems the consumer is pretty uh
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comfortable right now
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spending money for their for their stuff
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both on the the internal combustion
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engine side and and the eevee side going
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forward their orders are great
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um
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you know nine billion dollars of free
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cash flow pretty compelling valuation
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here how long until the autonomous
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revenue is meaningful for the bottom
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line
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too though is i mean how far in the
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future are we if they're just getting
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started in the west coast which is the
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the home of all this i mean uh it seems
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like we're talking a while before it's
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helped me and my commute to work here in
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chicago or new york or anywhere else
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that hasn't been kind of the breeding
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ground for the test vehicles
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yeah i mean i think there's still safety
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is a big issue here and you know it's
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gonna be a couple more years before
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you're really booking revenue there um
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whether it's 2025 or 2026 or 2027
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um
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you know i'm not sure i i think you can
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make your first 50 gm just on the car
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company and not really worry about crews
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this is stuff we can add into the
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valuation later on
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um but i don't think you're paying for
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it the valuation at all here
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okay
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so you get a shot off the highs but
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still pretty well off the covid uh
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pre-covered highs too things had a nice
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uh run for us uh but uh more to go any
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idea maybe what a reasonable expectation
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is for gm price uh three four years out
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yeah i mean we think there's going to be
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a big stock so we we think it's going to
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more than double uh you know we'll we'll
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see um
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uh but i i think this one's pretty
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compelling or for a long-term thesis
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both on the cruise side the transition
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to ev side where they are under battery
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technology you know last time we had a
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recession that remember the company went
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bankrupt this time you know they've
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restructured they're not out of europe
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they've restructured what they do what
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they're doing in asia and the u.s
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businesses got much more efficient i
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think you know this is being looked at
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with a sort of 2008 2009 brush and we
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think it's a much better company now
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than it was then okay do you think that
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optimism extend to forward jack
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no we're not involved in ford so and i'm
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going to comment okay uh you know we
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like gm we think has a unique
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proposition here
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uh on cruise i think everyone's gonna
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transition to evs okay a lot of
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different ways to play evs i wouldn't
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wouldn't say gm would be the you know
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the only reason by gm is a transition uh
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to electric vehicles all right i
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appreciate the bold case here uh thanks
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jack like to walk through boeing and gm
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for the long haul and the comeback story
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in boeing jack murphy co-cio at easterly
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investment partners
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you
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