facebook and instagram, and i'll be back next week with more in-depth interviews right here on "the wall street journal at large." thanks very much for joining us. ♪ ♪ ♪ jack welcome to "barron's roundtable" where we get behind the headlines and prepare you for the week ahead. i'm jack otter. the merger with amazon is helping whole foods cut costs. whole foods' ceo john mackey will join us. but what we think are the three most important things investors ought to be thinking about right now. the markets dipped on news of president trump testing positive for covid-19 but leveled off and ended the week with gains. why wasn't it a bigger deal? oil stock tumbled, what that means for the energy sector and

your portfolio. and sony and microsoft are set to reelite next generation video game console ahead of the holidays, is and most repreorders have already -- preorders have already sold out. on the round table, my colleagues, ben levisohn, carlton english and jack howe. ben, i thought the debate might be the big story of the week until we all woke up friday morning to find out that's president and first lady have covid-19, but the market largely shrugged it off. what's going on? >> they say that the market hates uncertainty, but investors have been planning for a lot of it. if you look at the vix, the market's fear gauge, they're expecting a heightened level of volatility all the way through january. so something like this comes along, and it shocks the market, but it doesn't shock it, i think, as much as people would have normally -- if it had just come out of nowhere. and there's also stimulus talk going on, and actually i wouldn't say in the background. that was taking up a lot of attention this week, the

negotiations between mnuchin and nancy pelosi. and that also got the market excited because it would love to see a stimulus bill get passed and have a new cash infusion into the economy. jack: yeah, they both sounded fairly positive, they were making nice noises about compromise. one other thing that might possibly push us toward stimulus was some kind of bad news about a layoffs. >> yeah. there were a lot of headlines this week about big layoffs first from disney which was laying off almost 30,000 the people, the airlines announced they're going to be furloughing a lot more now that a stimulus bill hasn't been passed. royal dutch shell announced 9,000 layoffs, and these headlines really don't look good. i think they add to this sense of unease out there about the economy. there's a lot of talk that the market may not need stimulus, more stimulus to e keep it going. a lot's already been passed. it surely wants it, and i think it would provide a lot of comfort for investors who are

watching nervously. jack: one of the great things about ben levisohn is he looks under the hood of the market. explain why you see more evidence the market is looking for a stimulus. >> it had to do with the outperformance of the dow which gained almost 2% versus the nasdaq which finished the week up almost about 1.5%. when you see the dow outperform, it usually means economically-sensitive stocks, stocks that do well when the economy's doing well are outperforming and not the growth stocks, the tech stocks that have been fueling so much of the market's rise. that's what happened this week. and the one thing that could really get those cyclical stocks going would be a stimulus plan that gets money out into the economy, gets people working and gets people spending money. that's just what these companies need. so the fact that they outperformed this week means that there's actually might be a decent chance we get something down the road. jack: carlton, always the contrarian publication, barron's takes a look at the energy patch this week which has really been

ma'amerred. hammered. >> it certainly has. you look at energy stocks so far this year, and they started -- i'm sorry, in the third quarter, and they fell 20% while the s&p 500 gained 8.5%. that's probably one of the widest spreads we've seen. but there are those income-hungry investors that look for opportunities in that sector. jack: speak of hungry, the sharks are looking around for some merger and acquisition activity when things get ugly. we've seen some of that too. >> yeah, there was a deal between devon energy and wpx that was announced earlier this week, and analysts are expecting we're going to see more consolidation in the industry possibly into next year. jack so one way to play energy is mlps, master limited partnerships. they were very popular for a while, fell out of favor, but they pay nice dividends. and so andrew barry has an interesting story about how to do that. >> yeah. i encourage everyone to read andrew's story. he he gets into a lot of detail. but they primarily focus on

these pipeline companies could be a good bit. now, they don't have those same tax consequences. up by, these funds are trading at very steep discounts, the yields are ranging from 7-17%, and andrew identified several of these funds that could be good investments. two of them, and again, i urge everyone to read the story, but two of them are keen anderson energy infrastructure and tortoise energy infrastructure. jack: thanks a lot, carlton. and one more reason to stay at home, a big story on video games. jack, what do you have on your head? >> jack, i know what you're thinking, and i agree. i do look cool now. the problem is as soon as next month we're getting new hardware from microsoft and sony that will make my family's video game gear hopelessly out of date. i'm talking about the new consoles, the xbox series x, the playstation 5.

$500 apiece. microsoft has a new pricing plan where you can pay $25 a month or $35 a month for the hardware, it includes some software and services. so why should investors care? acti havevision blizzard, electc arts, those are the video game publishers, they have a history of outperforming the markets for many months after the new consoles drop as the youngsters like to say. this is a really big business right now, jack. video games are four times the size of the u.s. movie box office. this year the top tier games go from $50 up to $70. jack: wow. well, thanks a lot, jack. i'm looking forward to reading bare ron's on that thing you've got -- barron's on that thing on your head. >> all i've got is donkey kong, but i'm looking for it. jack: coming up, when the pandemicking hit, americans were suddenly unable to buy everyday

items. whole foods' ceo john mackey will tell us how grocers are preparing for a possible resur is generals of the virus. resurgence of the virus. see yourself. welcome back to the mirror. and know you're not alone. because this is not just a mirror, it's an unstoppable community. come on jesse, one more! it's every workout. come on you two, let's go! for

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♪ ♪ [ engines revving ] ♪

♪ it's amazing to see them in the wild like th-- shhh. for those who were born to ride, there's progressive. ♪ ♪ jack: since its merger with amazon, whole foods has transformed into an online force. joining me now, john mackey, whole foods' cofounder and ceo to and the author of "conscious leadership." thanks a lot more joining me, john, i really appreciate it. >> thanks for having me on. jack: i'd like to start with what's in the news right now. "the wall street journal" has reported that there's been some fear of grocers, excuse me, grocery stockers looking to stock up. are you seeing nick like that? -- anything like that? >> we haven't really noticed anything different.

jack: gotcha. what about online sales? obviously, they spike, i think you said they tripled during the pandemic. are you seeing those level off a little bit, more shoppers coming into your brick and mortar locations? >> no, t about the same mix -- it's about the same mix between in-store and delivery. jack: gotcha. i want to ask you about prices. it's no secret that ined stead of whole foods, it was whole paycheck. prices are coming down even as grocery prices elsewhere are going up. how have you managed to do that? >> well, one of the great things about amazon and one of the reasons we wanted to merge with them, be acquired by them, is they think really long term, they take a long-term perspective. so we've already had three significant price cuts since the merger, and now we're working on our fourth. we hope it's never going to be the cheapest grocery because we sell the highest quality produce, meat, seafood

available. but if we try to cut our costs back, amazon's helping us to do that, we can also reduce our prices. so that's been the strategy. i anticipate. that continuing in the future. jack: how have you been able to reduce costs? >> you know, there's a saying about retail. retail is detail. and that means you have to pay attention to every little aspect of your buzz, and you have to look at where are you wasting money, where are you spending money that it's not really necessary, that is not creating value for your customers. so we've just taken that critical eye towards pretty much every aspect of our business. and one of the big areas is technology because with amazon to is good at technology, we're just aligning with them. we don't need to make the same investments in technology that we needed to make when we were independent. jack: sure. obviously, that's helped with online sales immensely. there's no better company at that than amazon. you've also said that amazon has made you, and this is

understandable, a little more data-driven, less going by the gut. is it possible to give us us an example of what that data up covered if few yo and what decisions you made based on the data. >> sure. the best example of that is the way amazon has helped us apply data and measurements to our shrink, the stuff that's spoiling or stuff that's disappearing from your shelves for unknown reasons, maybe theft. and tracking that in more detail in every single store, in every single category. we tended to just be cavalier about it, well, that's just part of doing business. but as we began to track it more carefully, we began to measure it, and we can compare it between stores, and we could ask, well, why is this store having a problem, and the other stores around it are not. and so you dig deeper, and we've made significant improvements in our shrink. and that can be, you know, that's worth tens of millions of

dollars a year. so that's one example. jack: especially when you've got a lot of fresh produce. i want to pivot slightly. you recent city said, quote: we're getting fat and we're getting sicker. there's a very high correlation between obesity and covid deaths. i think it's certainly understood that eating better is better for your health, but there are a lot of subtle things going on with the american diet and other things. you're obviously an expert in that. share briefly what some of those lesser known effects of where america's headed right now with this tighten? >> well, of course -- with this diet? >> well, of course, i do think i was misquoted, and that narrative is not correct based on what i actually said in the interview. i welcome the chance to correct slightly. the main thing to emphasize is statistics. 70% -- and this is easily check bl. 70% of americans are overweight, and 42.5% are obese. so almost half of the population of american adults so obese. and it's also a well known fact

that obesity correlates with certain disease factors such as heart disease, cardiovascular disease, type ii diabetes as well as a variety of autoimmune diseases. so those also correlate with covid. so we're, we're getting -- and it's not just america, and it's not any particular, it's not poor people. that was, again, taken out of context. americans at every income group are getting fatter, and it's been a trend that's been going on for over 50 years. it just hasn't peaked yet. it's just still continuing to happen. and it's not just the united states that has this problem. it's a problem that the whole world is beginning to experience. we're sort of out in front of it. jack: in the one year that "barron's roundtable" has been on the air, the market was slammed by coronavirus, but our next guest sees opportunity.

david yes rue joins the panel, that's next.

♪ jack: we thought 2019 was a big year for disruption. no one, of course, predicted what we'd experience in 020. t. rowe price portfolio manager david giroux was on our very first show one year ago. i'm so glad you could come back for the one-year anniversary. when we were together in person in october of 2019, we talked about one hallmark of your investing which has been to recognize the massive disruption that has been a tailwind for some companies while stymying others. has the accelerated course just been a fast forward on the same script, or are things going different hi than you expected? >> i think it is. you think about things hike retail, you think about malls, you think about legacy tech, it really has kind of accelerated

their demise in many respects. we've seen a lot of bankruptcies in retail and malls, if you will. so i think -- but i would say that, for the most part, covid has not created new companies or new industries that are under secretary attack with the possible exception of office and apartment as well. jack: in the midst of the pandemic in march you had all-nighters as you loaded up on stocks. can you tell us about that? >> yeah. we came into the year pretty conservatively positioned, and all of a sudden with the pandemic we tried to take advantage of that for our shareholders. within less than a month we deployed $8 billion of capital buying stocks, buying high-yield and leveraged loans and took an equity position to the portfolio and took our cash down to 2%. and even today even as the market's recovering, we still

are about 57% equities. jack: it's a go anywhere fund, you could own bonds, stocks and other asset classes, and it's a pretty neat trick. i'll i say in the 14 years you've run it, you've slightly outperformed the s&p 500 even though you're not fully invested in stocks. i to want do can you about those -- i do want to ask you about the zooms and others that were perfectly positioned to take advantage of where our lives have gone. are you fans of those companies? >> we're absolutely not fans of those companies. whether it be zoom or tell doc or, honestly, any covid-19 winner that is benefiting temporarily from this pandemic we're all living through, you know, you have a situation next year, year after you're going to probably face some very difficult comparisons as well as high valuations and being overowned. i would much rather play the covid losers who have long-term good business models than kind of the near-term covid winners. jack: what are those

opportunitieses? who are the losers that look like they'll make it out? >> sure. i would say think about medical devices, think about payments companies, you know, boston specific, a pfizer -- boston scientific. all companies that haved had stocks under pressure, but we've seen multiple year upside especially as we merge into a poser-covid -- post-covid world. nor. jack: one caught carlton english's eye. >> what opportunities are you seeing there? >> well, i love p and c long term. you've got a great management team, a dividend that's very, very safe, but i think your point about blackrock's sale is really, there's a lot of optionality around that. it's both positive from an offensive and defensive perspective. if you think about it, they now have the strongest balance sheet in all of banks today, so if you

think about a double dip, pnc's well positioned but it's also offensively attractive because they have the ability to go do an acquisition, buy back stock and really increase their earnings power that they have coming out of this down turn. so this is a high, you know, a name that we think has multiple dollars upside over the next five, you know, 3-5 years. jack: and ben's got a question. >> hey, david, your leverage lending loans benefit from rising rates and aren't prices supposed to stay low for a while? >> well, see, i think what's really attractive about leverage loans is even if rates don't go anywhere, you can still earn a 4, 4.5% kind of return. and if the market's wrong, which it often is, about rates, you know, you have the ability to participate in the upside there. and i think that's really attractive. leveraged loans are the only asset class in fixed income that

kind of goes up in value when rates are on the, increasing, if you will. and i'm a believer if you have a 3-5 year view, rates are going to be higher than they are today 3-5 years out. jack that is all the time we have. i will point out you have a mere 1% of your fund in investment grade bonds like treasuries and investment grade corporates which suggests you're not optimistic about those asset classes. david, thanks so much for joining us. >> my pleasure. jack: up next. round table members give their investment ideas for the coming week. stay right there. ♪ ♪

♪ ♪ jack: jack, one thing you and i and all of us market geeks have been talking about for years literally is when will value stocks ever come back to

challenge growth which is, of course, been on a tear for is so long. this week you said bank of america is saying we may be close? >> i mean, i've stopped predicting the shift because it feels like rooting for the team that the harlem globetrotters play against. there's a lot of getting dunked on, sometimes your shorts get pulled down, the crowd laughs. but in september value had a pretty good month. bank of america thinks this will continue. they say the discount for value stocks is at record level. value has outperformed coming out of the past 14 consecutive recessions. if you want to make that shift yourself, they say look for a cheap stock that has high returns on equity, that's to avoid value traps. a couple of their separate just with recommendations, at&t, comcast, goldman sachs and alaska air. jack: being a value investor, i guess, is kind of like being a jets fan. now we have two actionable ideas, carlton has a deep value stock.

>> right. i'm looking at bed and beyond. more than a year ago the company had a attracted activist investors, and they made the management changes, they started the cost cuts, they really started to gather their momentum, and then covid threw a wrench in those plans. but the company recently reported its results, seems to be back on track. they have an investor day later this month, and it seems like a they're in place for that turn-around to finally happen. jack: ben, what do you have for us? >> domino's pizza, the stock is up 50 president, but it could -- 50%. this past week we saw papa john's report same-store sales above 20%, and that should mean that domino's own same-store sales will probably beat estimates. it could be interesting. jack: that's a stay at home stock with post-pan deming appeal. listen, guys, on the one-year anniversary of our show, i want to thank you for sharing your insights every week and, of course, thanks to our loyal

audience. as always, to read more, check out this week's edition at barrons.com and don't forget to follow us on twitter. wear that mask, be healthy. see you next week on barron's roundtable. >> from the fox studios in new york city, this is maria bartiromo's "wall street." maria: and happy weekend, everyone. welcome to the program that helps position you for the week ahead. i'm maria bartiromo. coming up in just a few moments, the man behind match.com, angie's home service and video to name a few, iac chairman barry diller, my special guest this weekend with thoughts on the state of economy, technology, the struggling travel industry and more. barry diller coming up. but first, let's take a look back at some to have week's big moments with the