Transcript for State of the economy: Small businesses
Small businesses are often called the heartbeat of the US economy the small business administration's has more than 45% America's workforce is employed. By small business and as we head into both the election. And a possible second wave of Colvin nineteen it's gonna continue to test these small businesses to say the least and I want to bring in. Shark tanks Kevin O'Leary for more on this really important subject Kevin thanks for being with us. Yeah I just a staggering number of small businesses have closed during the pandemic you walk the streets of your neighborhood and and it breaks your heart to how this small businesses. That have survived adapted and how do you think they're gonna do in this. Coming second way. Well let me give you some real name tags I have homer Simpson's subscriber companies owned estuary and pretty well every sector almost every spoon. And we've we've got real visibility now that we've gone through this in March than. You know it was an extraordinary period and the way to score card looks now is about 20% and we're going to sale. The other 80% are in remarkable situation. They have evidence what I call the great digital. New America 2.0 the idea that you can start selling products services direct your customers and a 100% gross margin versions in the old days when salt at 50% retail. Margins. And we'll look at actually what are you need a portfolio that while he again. Our sales are down on aboriginal Barcelona 32% but our reach national that really matters in a private company is only around let's say it's only 14% and as a reflection of this great original candidates going on I could have never guessed that was going to happen I never horse or reverse are coming or having some of our best we burden underlying economy. Is in really good shape iron -- last. Mary and travel business travel cruise liners way he has. Entertainment news service a lot of sports stadiums or services to restaurants. Those sectors have not recovered yet for obvious reasons but the rest of the economy on fire. And I just hope we gets in this election we don't change the policies I know we're very divided country get all that. You liked tribunal and charmed life by knowing Biden I don't care I just want she. Policies. The way they were before the pandemic yet I have never seen a stronger economy since the sixties it was incredible. And Kevin you said before that though those 20% of small businesses that you say are going to fail that you don't think the government should support them why not. Because they become zombie companies on the meanings Annapolis and servicing the chain of movie theaters. People's propensity to watch movies. These theaters is dramatically changed in the last seven months they've now learned. And they didn't printed with the idea that they can watch a blockbuster movie directly into their own home or streaming on their own devices that gee these out of the bottle. Movie theaters are like VHS tapes in the seventies and eighties they're going to zero we know with with certainty so why would we give more money to movie theater when we know we can convert the building its own cloud kitchen and condominiums or climate control picking. Let them go bankrupt and let better management take them over movie theaters are day. Get over it. That's my whole point stop funding these zombie companies he'll lots of examples of other ones if I'm not funny and I certainly don't my tax dollars to I want goes on terrorist go find useful purposes for those new locations at Bethany on coastal resources there albeit anyway purpose and inventory management systems. For all the Amazon's and everybody else that wants to sell product directly into the suburbs the economy is really strong and we'll read Parker seized assets. Just let it happen and I PPP. Look at a let me follow up on though it is strong for home I guess you some people look at. Amazon has maiden and buckets of money Wal-Mart the giant companies are doing better but. Those businesses in our communities. Our neighbors that they do help the community go as well as is known as I can just UPS truck to the delivering packages. There are hurting so. 0888. Are the big just getting bigger and the smaller gonna get eliminated here. Well let's not showing 80% of my portfolio are small companies. They're doing really really well they forgot how to deal with the pandemic that had a turner company would digital delivery PRX gym equipment are gold holds the Oda. On higher sales of 600%. Budget equipment for their condos well popped reading cards. Out of Boston they had all of their sales and retail now they've recovered they're doing its direct to customers. What we can get cupcakes and number one car company in America that's why my investments we've now prohibited waiting retailers sell. You directly at home people want cupcakes now when they're sitting around with Elliott holidays etc. There's many companies and may depend at my point is the economy is exchanging. There is some losers but there's also the recent winners we have to realize the American economy the hard to see the economy is really strong. And you have to let it do its thing we can't let the government supports stuff isn't gonna work it just costs are children she alleged tax costs. Down the road which is dom realizing and I would have never said this to seven months ago but every day I want my CEOs and I can't believe. How strongly been able to figure this stuff about how they started to drive this is a different way. There's room for growth. You know you just have to get when you're dealing with reality when I tell you will be Theres going to zero it is going to zero I know it because I serviced them. There's no business and no one wants in the watching movies are anymore. I wanna watch the new Disney on Christmas Day at all and that's what they're going to do and that was supposed to be put in a movie theater. Not anymore. So Kevin we know that stimulus negotiations are still ongoing in congress do you think at that she continued does the government. Have a role here and if so where should that spending be prioritized it. Has. There's certain we Sharon doing something for employees I mean in other words you don't have to pick there's this is what's to support which not to. You don't have to save the airlines all give you an example. Within our business is next year we are planning to reduce air travel by a minimum of 20% as we've learned how to sell our customers. Through video and zoom in the other platform. So why waste that money. I guess we're gonna only 20% less it's so let 20% airlines go bankrupt and airlines go bankrupt all the time they know how to do it. And the assets float a stronger managers but for the airline employees I would rather give them the next fourteen months of unemployment insurance while they can't read. And find a new sector to work game as they will be economists are honored to absorb them. So I want to take care of the employees not the shareholders. Companies that have to go bankrupt and that's probably 1% of the airlines so what are two of them go bankrupt as long as those planes. End up being used by better managers and there's always a weaker airline out there that's what's really happened. And so do I think we're gonna get used in this package for the election. No chance we are so divided government right now one side doesn't want to give the other an advantage and I understand that don't have to wait perhaps the election. Regardless. Of what happens and I would say one thing as an investor that's learned very hard way. I do not think there polls predict outcomes for either side I will never invest in a poll again. The pollsters are snake oil salesman they have no idea what's going on. Just like my vision blood certainly seen that went what is your seamlessly this time around Kevin O'Leary thanks very much for being with us today. Take care about life.
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