Paul Tudor Jones Breaks Down America’s Most “Just” Companies

Following is the unofficial records of a CNBC interview with Billionaire Investor & & Simply Capital Co-Founder Paul Tudor Jones and Accenture Plc (NYSE: ACN) Chair & & CEO Julie Sweet on CNBCs “Squawk Box” (M-F, 6AM-9AM ET) today, Tuesday, January 11th. Following is a link to video on CNBC.com:

Updated on Jan 11, 2022, 10:50 am.

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ANDREW ROSS SORKIN: JUST Capital is out today with a new list of the business that are the most “just” business in America. Members of the JUST 100 are ranked based on concerns like paying a reasonable wage, developing tasks, cultivating an inclusive and diverse office and sustainability. Joining us right now to discuss this years list is famous trader and JUST Capital co-founder Paul Tudor Jones and Accenture chair and CEO Julie Sweet. Accenture, we must mention is ranked number 17 on this years list of just business. Thanks for joining us both. Paul, I wish to start with you. Good morning. Talk to what this JUST list is for those who dont understand about it, and how you pick the rankings.
PAUL TUDOR JONES: Well, the JUST list takes the 954 largest companies in America and we rank them according to what the American public thinks is the most essential problems with regard to what they desire to see corporations do. We take the results of those surveys and then we take those metrics of which theyre 20 and we rank every single company against those metrics. And what were attempting to do is to create a competitors for goodness and let the complimentary market whether its clients, staff members, communities, management, whatever, offering them the info so that they can again probably corroborate what those companies are doing and move towards those business that are more in sync with the values and the ideas and the concepts of the American public.
Alphabet is at the top of this list this year. What were the most significant shifts in terms of what you saw what the American public when you polled them were you believing about and how do you believe that will show itself in terms of returns? Since one of the things that has actually been intriguing is youve made the argument that the more simply a company is the much better the returns ultimately will be.
JONES: Well, the information has actually been clear on that since we began ballot. Theres, each and every single business that remains in the JUST 100 and particularly in the top 20 which Julies business is one, they are actually great on the most essential metrics which are normally wallet issues and work related. The number one component is pay a living and fair wage. So, all these business pay extremely well relative to the rest of business America. So, by meaning, when you see these companies in the top 10, theyve got labor forces that are looked after by far and away on a variety of fronts relative to the rest of, the rest of corporate America. The most crucial thing though is that being simply and remaining in line with Americans views on what is simply is excellent business. Its wonderful business. These companies on average in the JUST 100 earn 4.5% more than the rest of corporate America. They, they have a lot of things that they do such as they provide 19 times more to, to regional neighborhoods. They release 26 million tons less carbon than the rest of the list. They supply pay space disclosure a lot more so than the rest of the list. And I think most importantly, their stock cost normally surpasses the S&P 500, the Russell 1000. And they also pay 20% more in dividends. So, theres monetary and financial things that they do better on and theyre also social problems that set them apart in such a way that make them the most valued business in America. You cant have a value proposition for financiers and investors in the long run unless youre looking after and offering a value proposal for the other stakeholders, workers, consumers, neighborhoods, the planet.
SORKIN: Paul, thats a good segue for me to bring joy into the Julie into the discussion. Julie, youre number 17 on this list. You have a labor force of about 670 is practically 675,000 staff members and among the most varied boards I should discuss in business America. Im hoping you can possibly speak to, to those in the audience this morning, magnate and others, who are skeptical about some of these, some of the priorities that may be listed here where individuals say, is this simply everybody attempting to be woke or is this marketing or is this product packaging? Since I think youve been thinking about this for a very, long time.
It is great to be part of your reunion and terrific to be here with Paul who I simply desire to recognize as a early leader in spotlighting these problems. People, lets just take the tight labor market. You know, our core organization method is to not just do this for our stakeholders however also for our customers and we think that our results are linked totally with our commitment to being a simply business and thats why these types of metrics are so essential.
SORKIN: Part of what the JUST 100 list appears to be recommending is not just the numbers ought to be excellent, however simply, just even a basic disclosure is necessary. Thats something that I believe youve heeded. Youve, youve announced this 360-degree worth reporting experience and I also believe its something that youve been promoting to your customers also. Again, to the doubters out there who are running companies who say, you know what, why do I wish to reveal this stuff? Of all, its its, its more documentation. Second of all, it might not put me always in the very best light. What do you inform them?
SWEET: Transparency constructs trust? And we see that absolutely every day. I know when we first set, first openly disclosed our addition diversity metrics back in 2015, we were the first company in our industry to do so, our numbers werent great and yet our recruiting enhanced in all of our diverse classifications due to the fact that transparency develops trust. We just launched our 360-degree value experience which you kept in mind and what we did there was, we said we are going to report against every significant ESG structure. We took 15 months to get all the data since our company believe whether its customers, financiers, or people, that kind of transparency, makes individuals want to partner with you and join you.
SORKIN: Hey, Paul, I simply desire to speak to the returns problem and likewise just operating a business. This was right after the Business Roundtable chose to shift what they decided was going to be the function of an organization, not simply about profits, however to also include so numerous other constituent parts, if you will.
JONES: Well, I believe historys shown that thats wrong. A great example, the problem with what Milton Friedman stated that the only business function for a company is to create an earnings is that if thats your only intention, it produces the capability to be amoral in your decisions. And if I look at the second most crucial component of what the American public says for a businesss justice is to produce American tasks.
SORKIN: But Paul, weve been talking all morning and I do not know if you were watching the program earlier, we were discussing Intel and this debate over Intel and whats taking place in China. They do obviously a lot of service in China. Theyve been efficiently muzzled by the Chinese federal government. You had Senator Rubio this early morning or the other day criticizing them for, for effectively taking some of their language back which had actually been important at least acknowledged why theyve made a few of the remarks they made. How do you believe that companies in this day and age are expected to deal with these ethical and ethical issues that may actually have bottom line effect?
The most important thing that I believe the just dialogue does is that is it brings in those tones of grey. It brings in the concept that a company function is not simply to make an earnings. Plainly, we have to do something differently than weve done and I believe weve seen fantastic strides over the previous couple of years towards a much, a much more just economy.
SORKIN: Hey, Paul, I just desire to pivot and with Julie also, I want to pivot to the economy today. Last time we talked, we were having conversations about what the Fed was going to do next, clearly, Jay Powell on the hill. What do you think the Fed is going to do next and how are you considering the outlook in terms of equities and bonds for the year?
JONES: Well, I think Jay Powell is going to play capture up. And hes got a lot of catching up to do and I think thats why youre seeing them talk about quantitative tightening up due to the fact that I do not believe he can capture up quickly enough to try to deal with the inflation issue that he has right now. I kind of feel with regard to the markets, its a bit like, keep in mind in “Animal House,” where right before the scene with the deathmobile, one of the guys that theyre all sitting around, and the man goes, its over male, Wormer just dropped the big one.
I indicate, would you be in equities right now? We, you and Ive talked about crypto, you caught it around 10,000, its now Bitcoin that is, is at something like 40,000?
JONES: Well, I believe a lot of it once again, you need to watch what the main bank does. Plainly all the inflation trades of the pandemic period are going to be challenged right now. If you just consider where we were once again the last time the employment rate was here, the PE and the Nasdaq was around 26 or 27. It is 38 today, so presuming quickly forward and were back at 2% on Fed funds, and 2 and a half or three on 10-year rates, whats the numerous on the Nasdaq going to be? Is it going to still be 38 on a routing basis or is it going to be back at 26 or 27? And if so, certainly that has substantial consequences for the–.
SORKIN: What do you think its gon na be?
JONES: I do not understand what its gon na be. I know that, I think its gon na be tough sledding for the inflation trades, the pandemic going forward. So, the important things that perform the finest since March of 2020 are going to most likely, probably carry out the worst as we go through this tightening up, tightening cycle. On a relative basis, I dont understand that whether that implies they go down or up. I think theyre going to be, theyre plainly going to be challenged? When we if you can just fast forward two years and were at 2% on rates once again, you need to think about what are the cost of assets that today are handling, you understand, zero complimentary money while theyre still adding to balance sheet. I suggest, its gon na be a different story 18, 24 months out.
SORKIN: Hey, Julie, what are you seeing? We just consulted with Jamie Dimon the other day on this network, he appeared incredibly bullish about the remainder of the year. You have your arms into numerous organizations around the globe.
SUGARY FOOD: No, its a fantastic concern since were all viewing the current round of volatility. And what I would inform you is that the leading companies around the world are headfirst, going straight for ongoing compressed improvement? They are looking at all of this unpredictability and stating were going to be in control. Theyre doing digital transformation and to connect to our earlier conversation, theyre embedding sustainability in that transformation because they understand thats the course to successful growth. Our research study reveals that the winners of tomorrow are those who are going to do the digital transformation and sustainability so you see business like SHISEIDO, worldwide beauty company, bold ambition in skin care and theyre investing to upskill their individuals, put sustainability in their items and improve addition and diversity. Finest Buy, digital leader today, they revealed 1,000 brand-new tasks in the US and dedicated to 30% variety. I can continue due to the fact that the leading business, the ones that you desire to make the bets on are full steam ahead on compressed transformation with sustainability embedded.
JOE KERNEN: Hey Paul, its good to see you and I, you understand, just looking at your profession in terms of, you understand, so lots of things that youve done, and Im simply believing due to the fact that I appreciate what you believe about commodities so much. Im just questioning whether you believe that were at a point here where we might see something awful in the next five years and whether for monetary possessions, you would simply maybe downgrade the overall return because of what appears to be an inflection point or a second derivative that we changed with the Fed.
JONES: Its a, its a truly great question. I indicate, heres, heres one way to frame it. Products relative to monetary properties are so incredibly undervalued and one would believe on a relative basis as we go through this tightening, that commodities would surpass financial possessions by a wide margin. Another method to believe of it is the stock market relative to GDP in the United States is about 200, 210, 215%. The stock market relative to GDP for the rest of the world is 54%. So, we value equities in the United States almost 4 times more than the remainder of the world values their equities relative to their GDP. Now, theres a critical reason for that. And the factor for that is that in the US, we have a contest of concepts both in our political system and, weve seen that in spades right now, however in our capitalist system likewise in that contest of concepts, compare and contrast that to China where effectively you have one male now Xi Jinping determining all policy, its an extraordinarily, for me, its the terrific leap backwards for that nation because they dont have that contest about offers when youve got a single person at the top where everyone needs to subjugate their believing to that person. So, again, United States equities are actually extraordinarily valued relative to GDP due to the fact that the fact that we have that dynamism. Commercialism and democracy go together which dynamism is one reason that if you were going to make a bet on economy for the future, clearly, you d wager it here in the United States instead of any other country in the world. Having stated all of that four times appraisal relative to the rest worlds amazing, ideal. And yes, the genuine trick here will be can the Fed unwind what by numerous looks are a financial bubble without there being big negative financial effects and well, well see and enjoy, itll be fascinating to see. Im anxious because were at such lofty heights.
SORKIN: Paul, we have to leave the discussion there. Congratulations being amongst the JUST companies.
JONES: Here, here.
Its terrific to see both of you. Hope to see you all in person really, very quickly and we must mention that you can see right here on CNBC over the next several days, were gon na be featuring more JUST 100 interviews with a number of CEOs consisting of UPS CEO, Deltas CEO, HPs CEO, Dow and so numerous more, you could check out the complete JUST 100 list and look through all the numbers and information.

ANDREW ROSS SORKIN: JUST Capital is out this early morning with a new list of the business that are the most “just” companies in America. SORKIN: Part of what the JUST 100 list appears to be suggesting is not simply the numbers ought to be great, but simply, simply even a fundamental disclosure is crucial. JOE KERNEN: Hey Paul, its good to see you and I, you understand, just looking at your profession in terms of, you know, so numerous things that youve done, and Im just believing due to the fact that I respect what you believe about products so much. Im simply questioning whether you think that were at a point here where we might see something ugly in the next 5 years and whether for monetary assets, you would just possibly downgrade the total return due to the fact that of what seems to be an inflection point or a second derivative that we changed with the Fed. Hope to see you all in individual extremely, very quickly and we ought to mention that you can view right here on CNBC over the next several days, were gon na be including more JUST 100 interviews with a number of CEOs including UPS CEO, Deltas CEO, HPs CEO, Dow and so numerous more, you could check out the complete JUST 100 list and look through all the numbers and data.

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