1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,520 --> 00:00:15,560 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,600 --> 00:00:18,439 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:22,400 Speaker 1: at Bloomberg dot com slash podcast. Let's check in with 7 00:00:22,440 --> 00:00:25,840 Speaker 1: Adam Gold, founder and Chief investment Officer Acadam l L 8 00:00:25,960 --> 00:00:29,240 Speaker 1: c Adam Again, kind of a boring day today, but 9 00:00:29,640 --> 00:00:32,440 Speaker 1: when you talk to your clients, what's your number one 10 00:00:32,520 --> 00:00:36,320 Speaker 1: message these days? Good morning, guys, Thanks for having me 11 00:00:36,360 --> 00:00:39,199 Speaker 1: back on. We think boring days are fun. They may 12 00:00:39,240 --> 00:00:43,280 Speaker 1: not be fun for for the news cycles, but generally speaking, 13 00:00:43,720 --> 00:00:46,880 Speaker 1: things don't change that much day today in the long term, 14 00:00:46,880 --> 00:00:49,320 Speaker 1: in the big scheme of things, any given days something 15 00:00:49,400 --> 00:00:52,440 Speaker 1: might change that. But generally, since we last spoke a 16 00:00:52,479 --> 00:00:55,640 Speaker 1: few months ago, things have gotten, you know, extremely worse 17 00:00:55,680 --> 00:01:00,280 Speaker 1: across so many investor sentiments, inflation numbers, interest rates, rysing 18 00:01:00,800 --> 00:01:03,319 Speaker 1: and all of that is already priced in. We think 19 00:01:03,360 --> 00:01:05,440 Speaker 1: a lot of that is what's caused the markets to 20 00:01:05,440 --> 00:01:07,880 Speaker 1: sell off here the last few months. So people who 21 00:01:07,959 --> 00:01:10,400 Speaker 1: talk and we speak with clients every day and they're 22 00:01:10,480 --> 00:01:13,120 Speaker 1: very concerned about where they are, and we say that 23 00:01:13,200 --> 00:01:17,040 Speaker 1: that's the opportunity to be deploying capital. To be concerned now. 24 00:01:17,160 --> 00:01:19,880 Speaker 1: To sell now feels like you're a few months behind 25 00:01:19,880 --> 00:01:22,760 Speaker 1: the curve um And somebody argue that's where the fete is. 26 00:01:22,760 --> 00:01:24,760 Speaker 1: But the fet is you know, trying to react to 27 00:01:24,760 --> 00:01:26,959 Speaker 1: to what they see every day. And so we think 28 00:01:27,000 --> 00:01:29,680 Speaker 1: the opportunity is for people who have a long term horizon, 29 00:01:29,720 --> 00:01:32,080 Speaker 1: which is multi years, which is the only kind of 30 00:01:32,120 --> 00:01:35,320 Speaker 1: investors investors and investments we try to focus on. Then 31 00:01:35,360 --> 00:01:37,520 Speaker 1: we think this is a time when other people are selling, 32 00:01:37,560 --> 00:01:39,760 Speaker 1: you should be buying. And it's not easy, it's not 33 00:01:39,840 --> 00:01:42,440 Speaker 1: fun day to day, and things may continue to you know, 34 00:01:42,480 --> 00:01:44,720 Speaker 1: to get worse on a daily sort of return basis, 35 00:01:45,000 --> 00:01:47,720 Speaker 1: But that's where the opportunity is because long term, there's 36 00:01:47,760 --> 00:01:54,160 Speaker 1: still extremely large, glowing, growing trends around technology, around population growth. 37 00:01:54,160 --> 00:01:56,320 Speaker 1: There there's just a lot of underlying tailings here in 38 00:01:56,360 --> 00:01:59,000 Speaker 1: the long term. So I mean, we're we I know 39 00:01:59,080 --> 00:02:01,880 Speaker 1: that we're not trading for undred, but we are at 40 00:02:01,920 --> 00:02:04,920 Speaker 1: forty four D on the S and P. It's it's 41 00:02:04,960 --> 00:02:08,520 Speaker 1: not so far off from the high are you saying, 42 00:02:08,560 --> 00:02:11,440 Speaker 1: are you saying it's just um, you know, gonna look 43 00:02:11,480 --> 00:02:13,799 Speaker 1: like we'll look like in the rear view mirror five 44 00:02:13,840 --> 00:02:16,000 Speaker 1: ten years from now, such an opportunity that you should 45 00:02:16,000 --> 00:02:17,960 Speaker 1: buy now, regardless of what we do in the next 46 00:02:18,000 --> 00:02:20,840 Speaker 1: few weeks or months. That's our viewpoint. When I was 47 00:02:20,880 --> 00:02:24,200 Speaker 1: born in three the Dow was eleven hundred. When I 48 00:02:24,200 --> 00:02:26,400 Speaker 1: started my career in two thousand one, the Dow is 49 00:02:26,480 --> 00:02:30,560 Speaker 1: ten thousand. We're at thirty four thousand now. And if 50 00:02:30,560 --> 00:02:32,800 Speaker 1: you look forward a couple of years by a couple 51 00:02:32,840 --> 00:02:35,400 Speaker 1: I mean, you know, a couple of decades, rather you know, 52 00:02:35,400 --> 00:02:37,160 Speaker 1: we're going to have a Dow at a hundred thousand, 53 00:02:37,639 --> 00:02:40,000 Speaker 1: and that keger. That annual growth rate is sort of 54 00:02:40,080 --> 00:02:42,600 Speaker 1: in the low mid single digits. It's not in the 55 00:02:42,639 --> 00:02:45,799 Speaker 1: teams anymore, because you know, when you have a large numbers, 56 00:02:45,840 --> 00:02:47,840 Speaker 1: there's it's hard to continue to grow at that pace. 57 00:02:48,280 --> 00:02:50,960 Speaker 1: But if inflation is in the mid single digits and 58 00:02:51,280 --> 00:02:54,239 Speaker 1: fixed interest rates are in the low single digits before tax, 59 00:02:54,840 --> 00:02:57,040 Speaker 1: we still believe equities are the only place to be 60 00:02:57,080 --> 00:02:59,840 Speaker 1: invested over long term to have any chance of beating inflation. 61 00:03:00,840 --> 00:03:02,520 Speaker 1: All right, So what are some of the sectors that 62 00:03:02,880 --> 00:03:04,840 Speaker 1: you think we should be looking at here as we 63 00:03:04,919 --> 00:03:07,040 Speaker 1: go into or as we you know, we certainly are 64 00:03:07,080 --> 00:03:11,079 Speaker 1: in the beginning of a rising interest rate environment. Yep. 65 00:03:11,200 --> 00:03:14,040 Speaker 1: So I think historically financials, you know, there's sectors. Now 66 00:03:14,120 --> 00:03:16,560 Speaker 1: what's now we're refocused. This is what I think generally. 67 00:03:16,560 --> 00:03:19,920 Speaker 1: The opportunity that people may think is well with rising rates, 68 00:03:19,960 --> 00:03:22,360 Speaker 1: banks can get paid more. But then of course we 69 00:03:22,400 --> 00:03:25,720 Speaker 1: have inflation concerns, and so there's obviously recession risk, and 70 00:03:25,760 --> 00:03:28,400 Speaker 1: so banks do not do very well during recessions because 71 00:03:28,680 --> 00:03:30,920 Speaker 1: there's a lot of loans and there's bad debt, revisions 72 00:03:30,919 --> 00:03:33,079 Speaker 1: and things that cost their earnings to go away to 73 00:03:33,160 --> 00:03:36,880 Speaker 1: take away some of that. You know, interest rates increased opportunities. 74 00:03:36,880 --> 00:03:40,160 Speaker 1: So we've only focused on technology for over twenty years. 75 00:03:40,160 --> 00:03:44,080 Speaker 1: The reason is that innovation and new product cycles, these 76 00:03:44,080 --> 00:03:46,880 Speaker 1: are not priced into stocks today. The only thing that 77 00:03:46,880 --> 00:03:49,800 Speaker 1: analysts can do is project forward for what they see 78 00:03:49,840 --> 00:03:52,000 Speaker 1: in front of them. I don't give the example of Apple. 79 00:03:52,600 --> 00:03:55,560 Speaker 1: When I started investing the company with the iPod, people 80 00:03:55,560 --> 00:03:57,120 Speaker 1: thought the iPod was going to go the way of 81 00:03:57,160 --> 00:03:59,640 Speaker 1: the Mac, Windows and Microsoft, We're going to take them out. 82 00:04:00,120 --> 00:04:02,200 Speaker 1: And then a few years later that hadn't happened. So 83 00:04:02,240 --> 00:04:04,920 Speaker 1: the company grew very nicely, but then they introduced the 84 00:04:04,960 --> 00:04:07,880 Speaker 1: iPhone and that none that there was no revenue or 85 00:04:07,880 --> 00:04:10,960 Speaker 1: profits based into those estimates. And we think about are 86 00:04:11,000 --> 00:04:14,400 Speaker 1: their innovative companies today that are doing exciting things And 87 00:04:14,440 --> 00:04:16,560 Speaker 1: that's where the technology world is so great, because there 88 00:04:16,560 --> 00:04:19,800 Speaker 1: are companies working on internal innovation and new products where 89 00:04:19,800 --> 00:04:22,200 Speaker 1: analysts cannot price them in, and so we're starting to 90 00:04:22,279 --> 00:04:24,240 Speaker 1: see downgrades. You know, it's funny, is you know, back 91 00:04:24,240 --> 00:04:27,000 Speaker 1: in November always saw our upgrades of companies, example like 92 00:04:27,080 --> 00:04:31,680 Speaker 1: Navidia three forty share, we were seeing upgrades, analysts were 93 00:04:31,720 --> 00:04:34,440 Speaker 1: chasing each other with targets that were higher, and now 94 00:04:34,440 --> 00:04:38,160 Speaker 1: at to twenty the stocks down thirty cent, same company, 95 00:04:38,400 --> 00:04:42,000 Speaker 1: same business, same innovation, we're seeing downgrades. There were no 96 00:04:42,080 --> 00:04:44,320 Speaker 1: downngrades at three forty and so it just seems like 97 00:04:44,360 --> 00:04:46,240 Speaker 1: the Wall Street and some of the analysts that are 98 00:04:46,240 --> 00:04:49,440 Speaker 1: focused on generating commissions around trading, they do the exact 99 00:04:49,480 --> 00:04:51,640 Speaker 1: opposite of what you should do for a long term investing. 100 00:04:52,360 --> 00:04:56,000 Speaker 1: You guys get commissions, Paul, You we should definitely get 101 00:04:56,040 --> 00:04:58,760 Speaker 1: I mean, you get ranked by your salesforce and stuff, 102 00:04:58,760 --> 00:05:00,760 Speaker 1: and you know, making some big calls and things like that. 103 00:05:00,839 --> 00:05:04,960 Speaker 1: So kindly. Yeah, but I think the exact opposite of 104 00:05:05,000 --> 00:05:07,760 Speaker 1: how to compound wealth. You want to buy low and 105 00:05:07,839 --> 00:05:10,760 Speaker 1: sell high. To be downgrading stocks that are down thirty 106 00:05:11,760 --> 00:05:14,240 Speaker 1: out of cash flows, that of, you know, exciting opportunities 107 00:05:14,240 --> 00:05:17,320 Speaker 1: in the future. That doesn't seem like the great long 108 00:05:17,400 --> 00:05:20,280 Speaker 1: term decisions. I hear you, all right, good stuff. I mean, 109 00:05:20,560 --> 00:05:21,960 Speaker 1: I don't know. I mean, I guess I kind of 110 00:05:22,080 --> 00:05:23,680 Speaker 1: did that back in the day on the cell side, 111 00:05:23,839 --> 00:05:28,640 Speaker 1: Adam Gold, founder and chief investment officer Cantampent. That's the 112 00:05:28,800 --> 00:05:31,320 Speaker 1: sin he's telling us. That's the wrong thing, that's not 113 00:05:32,000 --> 00:05:35,160 Speaker 1: serving your customers. I was a big investment banker as 114 00:05:35,200 --> 00:05:37,640 Speaker 1: an analyst. We did tons of deals in my space. 115 00:05:37,960 --> 00:05:40,040 Speaker 1: I'll mention if I'm still on, I'll mention one more 116 00:05:40,040 --> 00:05:43,520 Speaker 1: example of a great investor. The Oracle from Omaha has 117 00:05:43,560 --> 00:05:46,880 Speaker 1: deployed over thirty in the last month. Yea, I know 118 00:05:46,960 --> 00:05:49,160 Speaker 1: he's been putting money to work. We appreciate that. Adam Gold, 119 00:05:49,200 --> 00:05:55,840 Speaker 1: thank you so much. Founder in chief investment Officer Cadam LLC. Matt, 120 00:05:55,920 --> 00:06:02,080 Speaker 1: you have any idea what Elon Musk is doing with Twitter? I? Uh, well, 121 00:06:02,120 --> 00:06:04,479 Speaker 1: you know, what we watched. We all watched that Ted 122 00:06:04,520 --> 00:06:08,080 Speaker 1: talk thing last week, and I thought it was really fascinating. Um, 123 00:06:08,200 --> 00:06:11,560 Speaker 1: he says this is something that he wants to do 124 00:06:11,640 --> 00:06:15,240 Speaker 1: for democracy, for society. It's a free speech issue and 125 00:06:15,320 --> 00:06:19,280 Speaker 1: not an economic move. Okay, A lot of people aren't 126 00:06:19,279 --> 00:06:23,000 Speaker 1: going to take that at face value, and especially you know, 127 00:06:23,279 --> 00:06:25,000 Speaker 1: on the left, there's a lot of concern that he 128 00:06:25,080 --> 00:06:27,400 Speaker 1: wants to I don't know why there is this concern, 129 00:06:27,480 --> 00:06:30,920 Speaker 1: but everyone's saying that he's kind of coming to the 130 00:06:30,960 --> 00:06:35,640 Speaker 1: rescue of pro Trump people or I have no idea 131 00:06:35,680 --> 00:06:40,400 Speaker 1: about that. He seemed genuine and uh, I think it's 132 00:06:40,400 --> 00:06:43,599 Speaker 1: fascinating to watch. It's fascinating to watch, and fortunately for us. 133 00:06:43,720 --> 00:06:47,080 Speaker 1: Matt Winkler, the founder of Bloomberg News, editor in chief 134 00:06:47,120 --> 00:06:50,720 Speaker 1: emeritus of Bloomberg News, he's paying attention to this, uh 135 00:06:50,800 --> 00:06:54,640 Speaker 1: so he can share his thoughts. Matt. You know, we 136 00:06:54,640 --> 00:06:58,280 Speaker 1: we look at Elon Muskin. I as a traditional investor 137 00:06:59,320 --> 00:07:02,039 Speaker 1: am uncom table with this guy, particularly if I were 138 00:07:02,080 --> 00:07:04,200 Speaker 1: a shareholder of one of his companies, even though the 139 00:07:04,279 --> 00:07:06,720 Speaker 1: stock has done so great and he's made so many 140 00:07:06,720 --> 00:07:08,880 Speaker 1: investors so much money. How do you think about Elon 141 00:07:08,960 --> 00:07:11,680 Speaker 1: musk These days. You have to think about him in 142 00:07:11,680 --> 00:07:16,360 Speaker 1: the context of maximizing shareholder value. And if you go 143 00:07:16,440 --> 00:07:19,760 Speaker 1: back to the initial public offering of Tesla in two 144 00:07:19,760 --> 00:07:24,600 Speaker 1: thousand ten, Uh, to understand what has happened to Tesla, 145 00:07:25,200 --> 00:07:28,720 Speaker 1: you have to put an exponent next to Tesla, so 146 00:07:28,760 --> 00:07:32,120 Speaker 1: it's Tesla to the twelfth power. So this is a 147 00:07:32,120 --> 00:07:36,680 Speaker 1: company that's gone from a billion dollars to UH a 148 00:07:36,720 --> 00:07:42,240 Speaker 1: trillion today. And um, it wasn't luck. It was if 149 00:07:42,280 --> 00:07:45,440 Speaker 1: you think about it, two thousand and ten, virtually nobody 150 00:07:45,480 --> 00:07:51,440 Speaker 1: took electric vehicles seriously, today everybody does. And disclosure mat 151 00:07:51,760 --> 00:07:54,880 Speaker 1: you are a Tesla driver owner, right I am, and 152 00:07:54,920 --> 00:07:59,240 Speaker 1: a happy one. Yeah, And I can attribute that that 153 00:07:59,320 --> 00:08:04,680 Speaker 1: to uh combination of meeting Musk for an interview at 154 00:08:04,720 --> 00:08:09,200 Speaker 1: Bloomberg and SpaceX headquarters back in two thousand fourteen, and 155 00:08:09,240 --> 00:08:13,520 Speaker 1: after we got done, h he invited us to try 156 00:08:13,520 --> 00:08:17,400 Speaker 1: a Tesla or two, and uh, you know that's where 157 00:08:17,400 --> 00:08:20,960 Speaker 1: it started. But you know, really all kidding aside. What 158 00:08:21,240 --> 00:08:25,040 Speaker 1: is relevant about Tesla is that it has been very 159 00:08:25,120 --> 00:08:29,560 Speaker 1: methodical and very disciplined about growth and that's the something 160 00:08:29,680 --> 00:08:33,079 Speaker 1: that's the one thing that gets investors excited. And Tesla's 161 00:08:33,120 --> 00:08:36,000 Speaker 1: had growth that has been unequaled by any of the 162 00:08:36,040 --> 00:08:40,640 Speaker 1: top largest companies today. And Tesla got to its one 163 00:08:40,679 --> 00:08:45,200 Speaker 1: trillion market capitalization in eleven years sooner, if you like, 164 00:08:45,679 --> 00:08:48,439 Speaker 1: than any of the companies were familiar with, whether it's 165 00:08:48,440 --> 00:08:51,920 Speaker 1: Microsoft or Amazon. Facebook got there briefly, but it didn't 166 00:08:52,000 --> 00:08:56,240 Speaker 1: last very long. This the Tesla evaluation is sticky. And 167 00:08:56,559 --> 00:09:00,440 Speaker 1: you may have noticed that last Thursday, Uh, one of 168 00:09:00,480 --> 00:09:06,000 Speaker 1: Tesla's champions, arc Cathy would Um, increased her target more 169 00:09:06,040 --> 00:09:11,560 Speaker 1: than to forty dollars a share. So that's an indication 170 00:09:11,640 --> 00:09:14,560 Speaker 1: of just where testing she's Tesla. I mean, you point 171 00:09:14,600 --> 00:09:16,839 Speaker 1: out in your column that she um forecast I think 172 00:09:16,840 --> 00:09:19,640 Speaker 1: it's trillion dollar valuation before anyone else did and stuck 173 00:09:19,679 --> 00:09:23,280 Speaker 1: to her guns. Yeah and uh. And there's a reason 174 00:09:23,320 --> 00:09:26,520 Speaker 1: for that, is that why is Tesla done as well 175 00:09:26,520 --> 00:09:31,400 Speaker 1: as it done, because it actually anticipates the things that 176 00:09:31,440 --> 00:09:34,160 Speaker 1: it needs before everybody else does. And what I mean 177 00:09:34,200 --> 00:09:38,839 Speaker 1: by that is Musk was very concerned about vertical integration 178 00:09:39,559 --> 00:09:46,080 Speaker 1: long before COVID nineteen became a problem for every company worldwide. Uh. 179 00:09:46,080 --> 00:09:51,520 Speaker 1: He did things to achieve supply security, if you like 180 00:09:52,559 --> 00:09:57,200 Speaker 1: Nicol for example, very important essential component in electric vehicles, 181 00:09:57,240 --> 00:10:01,719 Speaker 1: and he made several agreements to get nick Um so 182 00:10:01,800 --> 00:10:07,360 Speaker 1: that the supply would not be disruptive for UH Tesla. 183 00:10:07,400 --> 00:10:11,240 Speaker 1: And the latest quarter, for example, show the deliveries were 184 00:10:11,679 --> 00:10:14,560 Speaker 1: much better than what people anticipated, even though he said 185 00:10:14,880 --> 00:10:17,080 Speaker 1: it was a very difficult quarter. So this is a 186 00:10:17,080 --> 00:10:20,719 Speaker 1: company that actually has been very strategic in the way 187 00:10:20,760 --> 00:10:26,000 Speaker 1: it goes about UH manufacturing vehicles. Their factories are built 188 00:10:26,080 --> 00:10:32,960 Speaker 1: from the ground up, whether it's Berlin, Austin, Texas, UH Fremont, California. UM. 189 00:10:33,200 --> 00:10:37,400 Speaker 1: And he's done incredible. Look he I still use PayPal. 190 00:10:37,640 --> 00:10:39,840 Speaker 1: I noticed this weekend. I was like, wow, I'm still 191 00:10:39,920 --> 00:10:43,719 Speaker 1: using PayPal and we saw him last week. I think 192 00:10:43,760 --> 00:10:48,520 Speaker 1: send for civilian citizens to the I S S which 193 00:10:48,600 --> 00:10:51,679 Speaker 1: is like mind blowing Lee, just unbelievable how well he's 194 00:10:51,679 --> 00:10:55,440 Speaker 1: done in SpaceX. Why do you think he um makes 195 00:10:55,480 --> 00:11:00,320 Speaker 1: all this noise on Twitter and challenges the SEC? I mean, 196 00:11:00,360 --> 00:11:03,280 Speaker 1: is it just because he can? You know, I don't 197 00:11:04,040 --> 00:11:08,160 Speaker 1: actually spend a lot of time thinking about what you 198 00:11:08,240 --> 00:11:12,559 Speaker 1: and others would consider his eccentricities. Otherwise smoking a joint 199 00:11:12,600 --> 00:11:15,280 Speaker 1: on Joe Rogan's podcast, Are there other than to say 200 00:11:15,320 --> 00:11:21,080 Speaker 1: this that he isn't the first brilliant chief executive officer, 201 00:11:21,240 --> 00:11:25,560 Speaker 1: founder of a company if you like, to have attributes 202 00:11:25,640 --> 00:11:32,360 Speaker 1: that people have considered socially questionable. And that's just has 203 00:11:32,400 --> 00:11:37,000 Speaker 1: been something that we've seen in history. And so what 204 00:11:37,280 --> 00:11:40,280 Speaker 1: is far more important, the context that I think everybody 205 00:11:40,360 --> 00:11:46,120 Speaker 1: misses is this company, Tesla, has transformed the world's view 206 00:11:46,920 --> 00:11:50,840 Speaker 1: of vehicles to the extent that Tesla itself is a 207 00:11:50,960 --> 00:11:53,840 Speaker 1: robotic company if you like, you know it's not a 208 00:11:53,880 --> 00:11:57,120 Speaker 1: car company. How do you view by the way. I also, 209 00:11:57,120 --> 00:11:58,720 Speaker 1: I don't want to sound too naive, but you have 210 00:11:58,800 --> 00:12:01,000 Speaker 1: to give it to him that he's on so much 211 00:12:01,640 --> 00:12:04,560 Speaker 1: to fight climate change. He at least says he wants 212 00:12:04,600 --> 00:12:08,240 Speaker 1: to buy Twitter right now to support free speech and democracy. 213 00:12:08,280 --> 00:12:10,800 Speaker 1: I mean, this is a guy who has big ideas 214 00:12:10,880 --> 00:12:14,400 Speaker 1: about helping the world right. So people can be cynical 215 00:12:14,440 --> 00:12:18,400 Speaker 1: about that because he's made so much money doing it, um, 216 00:12:18,600 --> 00:12:22,320 Speaker 1: but you can't deny the fact that he's changed the 217 00:12:22,400 --> 00:12:26,040 Speaker 1: way we think about the future of transportation. Yeah, and 218 00:12:26,040 --> 00:12:28,439 Speaker 1: if you consider all the obstacles a raid against him, 219 00:12:28,480 --> 00:12:34,040 Speaker 1: remember a lot of states wouldn't let Tesla's sell its 220 00:12:34,160 --> 00:12:38,600 Speaker 1: vehicles the way it wanted to because the car dealer lobby, 221 00:12:38,640 --> 00:12:42,080 Speaker 1: if you like, was so powerful. Um, and he somehow 222 00:12:42,120 --> 00:12:44,920 Speaker 1: got through that. The fact that now everybody's in this 223 00:12:44,960 --> 00:12:47,400 Speaker 1: market and Tesla has been able to hold its market 224 00:12:47,480 --> 00:12:52,640 Speaker 1: share consistently even though the market has expanded dramatically tells 225 00:12:52,640 --> 00:12:56,280 Speaker 1: you something about the quality of the vehicles that he has. 226 00:12:56,360 --> 00:12:59,720 Speaker 1: And and Cathy would for example, says that in battery 227 00:12:59,760 --> 00:13:02,360 Speaker 1: tech knowledge, he alone Tesla is at least three years 228 00:13:02,360 --> 00:13:07,040 Speaker 1: ahead of its competitors. Matt Um, your column today has 229 00:13:07,760 --> 00:13:12,640 Speaker 1: got the headline in defense of Elon Musk managerial excellence. Uh. 230 00:13:12,960 --> 00:13:15,800 Speaker 1: Tesla CEO's track record proves he's a pretty eminent builder 231 00:13:15,840 --> 00:13:20,120 Speaker 1: of businesses and maximizer shareholder value. He retweeted that out today. 232 00:13:20,400 --> 00:13:25,240 Speaker 1: Did you see that? Somebody told me that your column formed. 233 00:13:25,559 --> 00:13:27,680 Speaker 1: He's got a couple of followers, so I'm thinking, I 234 00:13:27,679 --> 00:13:31,520 Speaker 1: think this might get Mr Winklers some notoriety because nobody 235 00:13:31,600 --> 00:13:35,080 Speaker 1: let's let's just founded Bloomberg News, you know, I mean, 236 00:13:35,200 --> 00:13:40,319 Speaker 1: but Musk does have eighty two point four million followers. 237 00:13:40,480 --> 00:13:43,920 Speaker 1: That's big. I'm just a reporter trying. You're just a reporter. 238 00:13:44,160 --> 00:13:47,439 Speaker 1: You and Chinpeg and your team doing great stuff as always, 239 00:13:47,760 --> 00:13:50,680 Speaker 1: lots of data in your column here. So again, check 240 00:13:50,720 --> 00:13:53,480 Speaker 1: it out on Bloomberg dot com. Uh, and on the 241 00:13:53,480 --> 00:14:00,280 Speaker 1: Bloomberg terminal and on Twitter apparently and on Twitter want 242 00:14:00,280 --> 00:14:04,320 Speaker 1: a switch to crypto? Taxes? You have to pay taxes 243 00:14:04,320 --> 00:14:07,040 Speaker 1: apparently meant on your crypto gains. Tom, we'll write founder 244 00:14:07,040 --> 00:14:10,600 Speaker 1: of Wealth Ability Joints us here. Tom, give us your overview. 245 00:14:10,600 --> 00:14:12,200 Speaker 1: What do you what do you tell your clients about 246 00:14:12,400 --> 00:14:20,720 Speaker 1: crypto and the tax implications of crypto and all things crypto? Thanks, Matt. Well, 247 00:14:20,800 --> 00:14:22,880 Speaker 1: what you have to realize is that every time you 248 00:14:22,960 --> 00:14:26,480 Speaker 1: use crypto, you've sold it and it's treated as a 249 00:14:26,520 --> 00:14:29,600 Speaker 1: taxabull transaction. So you have to keep track not just 250 00:14:29,720 --> 00:14:32,280 Speaker 1: when you actually sell it. Let's say you're you know, 251 00:14:32,320 --> 00:14:34,680 Speaker 1: selling to Bitcoin went up and so you're selling something, 252 00:14:34,880 --> 00:14:37,560 Speaker 1: but you're actually using it. When you use it, you 253 00:14:37,720 --> 00:14:41,200 Speaker 1: also have to pay tax on that. And losses are 254 00:14:41,280 --> 00:14:45,320 Speaker 1: capital losses, so they're limited. Gains are capital gains, and 255 00:14:45,360 --> 00:14:46,880 Speaker 1: so if you hold it for more than a year 256 00:14:47,000 --> 00:14:51,520 Speaker 1: you actually get a tax benefits. Wait, uh, capital losses 257 00:14:51,520 --> 00:14:58,360 Speaker 1: are limited. They can only upset capital gains. Ah, that 258 00:14:58,520 --> 00:15:01,200 Speaker 1: is such a huge bummer. Um, I'm sure that no 259 00:15:01,240 --> 00:15:08,200 Speaker 1: one's keeping track of bitcoin. They're using when they buy something. Um. 260 00:15:08,760 --> 00:15:12,560 Speaker 1: In fact, this whole area is so new. Do you 261 00:15:12,600 --> 00:15:15,080 Speaker 1: get a lot of people coming to you saying like, 262 00:15:15,240 --> 00:15:20,200 Speaker 1: I just need uh you know crypto tax rules one 263 00:15:20,200 --> 00:15:23,120 Speaker 1: oh one? Because how how would you have any idea 264 00:15:23,760 --> 00:15:26,800 Speaker 1: what kind of tax burden coin or or an n 265 00:15:26,840 --> 00:15:30,440 Speaker 1: f T is going to generate for you? Well? Yeah, totally. 266 00:15:30,520 --> 00:15:33,600 Speaker 1: Because you know, if you if you spend money, you 267 00:15:33,640 --> 00:15:37,239 Speaker 1: don't typically think, oh I've got a tax taxical transaction 268 00:15:37,280 --> 00:15:39,440 Speaker 1: there I have to track when I spend money. You 269 00:15:39,480 --> 00:15:41,800 Speaker 1: don't think that. But with crypto you do. It's like 270 00:15:42,080 --> 00:15:46,720 Speaker 1: it's like if you actually, um use the stock. Let's 271 00:15:46,720 --> 00:15:49,080 Speaker 1: say you use some of your apple stock to buy something, 272 00:15:49,120 --> 00:15:51,240 Speaker 1: it would be the same thing. Uh. That's the way 273 00:15:51,280 --> 00:15:54,200 Speaker 1: the I R S treats it. So tracking it is 274 00:15:54,240 --> 00:15:56,520 Speaker 1: the actually the number one issue right now is how 275 00:15:56,560 --> 00:15:59,880 Speaker 1: do you track all of your crypto transactions. I'm just 276 00:16:00,000 --> 00:16:02,000 Speaker 1: guessing the I R S has no idea what to 277 00:16:02,040 --> 00:16:05,000 Speaker 1: do with crypto? Are they tracking this stuff closely? Did 278 00:16:05,040 --> 00:16:08,760 Speaker 1: they know what they're doing? No? I don't think so. 279 00:16:08,880 --> 00:16:11,200 Speaker 1: I actually don't think anybody really knows what they're doing 280 00:16:11,200 --> 00:16:14,760 Speaker 1: from a tax standpoint. Let's never stopped the I R 281 00:16:14,920 --> 00:16:19,040 Speaker 1: s yep. That's the point that has never stopped the irs. 282 00:16:19,040 --> 00:16:22,920 Speaker 1: What However, in the in the Infrastructure bill last year, 283 00:16:23,320 --> 00:16:28,080 Speaker 1: they did they are going to require crypto exchanges to track. 284 00:16:28,240 --> 00:16:30,600 Speaker 1: So at least the crypto exchanges will have to track. 285 00:16:31,080 --> 00:16:34,960 Speaker 1: This is kind of like back in the early um nineties. UM, 286 00:16:35,000 --> 00:16:38,480 Speaker 1: I recall when people were day trading and they had 287 00:16:38,520 --> 00:16:41,400 Speaker 1: to track every single day trade. But now the brokers 288 00:16:41,440 --> 00:16:44,400 Speaker 1: do it, right, that's what's going on in crypto. All right, Tom, 289 00:16:44,400 --> 00:16:48,440 Speaker 1: thanks very much, appreciative. Tax Day wasn't confusing enough. Now 290 00:16:48,480 --> 00:16:51,280 Speaker 1: we've got crypto, you have to you know, track the 291 00:16:51,320 --> 00:16:55,840 Speaker 1: taxable uh transactions that you have with crypto. Tom will right, 292 00:16:55,880 --> 00:16:57,960 Speaker 1: he's a founder of wealth Ability giving us some thoughts 293 00:16:58,000 --> 00:17:01,720 Speaker 1: here on crypto when I don't know, I don't I 294 00:17:01,720 --> 00:17:04,120 Speaker 1: don't think I've ever claimed anything on my tax returns 295 00:17:04,119 --> 00:17:06,160 Speaker 1: for crypto at this point, and I you know what, 296 00:17:06,440 --> 00:17:09,160 Speaker 1: I don't plan on doing it ever. About that you're 297 00:17:09,160 --> 00:17:12,120 Speaker 1: gonna have to do really yeah, I mean, at some 298 00:17:12,160 --> 00:17:14,960 Speaker 1: point it's going to become, um, just like any other asset, 299 00:17:15,119 --> 00:17:17,159 Speaker 1: or you're gonna have to have regulators to declare it 300 00:17:17,240 --> 00:17:20,400 Speaker 1: like a currency. Wad of cash in my pocket I'm 301 00:17:20,400 --> 00:17:26,359 Speaker 1: showing Matt, that's how we roll here. Matt. Back in 302 00:17:26,400 --> 00:17:30,159 Speaker 1: the summer of before between my first and second year 303 00:17:30,200 --> 00:17:34,120 Speaker 1: business school, Duke did an internship at Merrill Lynch Investment Bank. 304 00:17:34,760 --> 00:17:38,159 Speaker 1: My key transaulor Meryl. My key transaction from that summer 305 00:17:38,240 --> 00:17:41,760 Speaker 1: was a million dollar I think that was amount liquid 306 00:17:41,920 --> 00:17:46,080 Speaker 1: yield option note a lion for ker McGee, the energy 307 00:17:46,119 --> 00:17:49,920 Speaker 1: company down in Texas. Uh wow, yep. We can't believe 308 00:17:49,960 --> 00:17:52,960 Speaker 1: that you have trouble understanding crypto when you're dealing with 309 00:17:53,000 --> 00:17:57,320 Speaker 1: such incredibly complex transactions. I have no idea what you 310 00:17:57,400 --> 00:18:01,440 Speaker 1: just said. Yep, it was cool. Discounted the note for 311 00:18:02,000 --> 00:18:04,040 Speaker 1: Kirman Ghee. That was pretty cool. I can't remember the 312 00:18:04,040 --> 00:18:05,879 Speaker 1: banker who I pitched it with, but anyway, that was 313 00:18:05,920 --> 00:18:09,479 Speaker 1: good stuff. Anyway, they reported some numbers today. Uh Shali 314 00:18:09,520 --> 00:18:11,520 Speaker 1: Bassing Joints is here in our Bloomberg in Erector Broker 315 00:18:11,600 --> 00:18:14,600 Speaker 1: studio Shnale. How did my friends at Bank of America 316 00:18:15,000 --> 00:18:18,600 Speaker 1: Merrill Lynch do. It's pretty fascinating. You would not have 317 00:18:18,680 --> 00:18:21,320 Speaker 1: expected this to be a quarter where anything hit a record, 318 00:18:21,440 --> 00:18:24,119 Speaker 1: but advisory fees for the first quarter hit a record, 319 00:18:24,400 --> 00:18:27,320 Speaker 1: equity trading hit a record, and part of that was 320 00:18:27,400 --> 00:18:30,040 Speaker 1: because you have buy side clients of the likes of 321 00:18:30,080 --> 00:18:33,320 Speaker 1: hedge funds and other clients, big investors still taking on 322 00:18:33,440 --> 00:18:38,160 Speaker 1: financing in order to engage with these markets, more derivatives 323 00:18:38,200 --> 00:18:41,560 Speaker 1: trading and so really robust trading desks there in the 324 00:18:41,680 --> 00:18:47,560 Speaker 1: face of expected high declines. Talk to me about compensation. 325 00:18:48,040 --> 00:18:50,440 Speaker 1: That's my favorite topic. We talked about these investment banks. 326 00:18:51,119 --> 00:18:53,040 Speaker 1: What are what are the big banks saying now because 327 00:18:53,040 --> 00:18:55,399 Speaker 1: they're paying their junior bankers a lot more, I assume 328 00:18:55,440 --> 00:18:58,160 Speaker 1: that means they're paying their senior bankers more. How big 329 00:18:58,200 --> 00:19:00,199 Speaker 1: of an issue is this for the margins, Yeah, it 330 00:19:00,240 --> 00:19:03,000 Speaker 1: depends on who you are. For Bank of America in particular, 331 00:19:03,119 --> 00:19:06,160 Speaker 1: remember their headcount has declined steadily over the last couple 332 00:19:06,200 --> 00:19:09,040 Speaker 1: of quarters, so you know, you can raise prices for 333 00:19:09,119 --> 00:19:12,640 Speaker 1: some bankers, but you can also not have as many 334 00:19:12,720 --> 00:19:15,560 Speaker 1: of them. Bank of America is keeping control of costs. 335 00:19:15,560 --> 00:19:18,120 Speaker 1: And remember it's not just the bankers, it's the investment 336 00:19:18,119 --> 00:19:21,080 Speaker 1: in technology. This quarter, Bank of America generated more than 337 00:19:21,119 --> 00:19:26,520 Speaker 1: half of its total sales through digital means. Yes, fascinating, 338 00:19:26,600 --> 00:19:29,720 Speaker 1: and so you are seeing they have hundreds of patents 339 00:19:29,720 --> 00:19:33,879 Speaker 1: out for more you know, advanced technology and you do 340 00:19:34,000 --> 00:19:38,800 Speaker 1: see them really keeping control over their costs at a 341 00:19:38,800 --> 00:19:41,320 Speaker 1: time where they're willing to invest to gain more share 342 00:19:41,320 --> 00:19:45,000 Speaker 1: in a tough market. So we've this is the last 343 00:19:45,000 --> 00:19:47,040 Speaker 1: of the major Wall Street banks to report, right, if 344 00:19:47,040 --> 00:19:49,520 Speaker 1: you step back and look at them, can you say 345 00:19:49,560 --> 00:19:53,680 Speaker 1: something universal about the banks this season? I go back 346 00:19:53,680 --> 00:19:56,520 Speaker 1: to what Jamie Diamond and his executive said a couple 347 00:19:56,520 --> 00:19:58,960 Speaker 1: of days ago, which is that the probability of a 348 00:19:59,000 --> 00:20:02,359 Speaker 1: recession went from being low to less low. So you 349 00:20:02,400 --> 00:20:05,680 Speaker 1: have all these banks that are, you know, not answering 350 00:20:05,760 --> 00:20:08,800 Speaker 1: questions necessarily on what the probability of a recession is, 351 00:20:09,200 --> 00:20:11,159 Speaker 1: but the fact that it may happen, and this is 352 00:20:11,200 --> 00:20:14,360 Speaker 1: what their businesses could look like in that scenario. Interestingly, 353 00:20:14,680 --> 00:20:17,640 Speaker 1: in the event of an interest rate rise that's more 354 00:20:17,680 --> 00:20:21,480 Speaker 1: severe than initially expected, Bank of America says that rates 355 00:20:21,480 --> 00:20:24,600 Speaker 1: would have to rise a lot more in order to 356 00:20:24,720 --> 00:20:27,920 Speaker 1: impact the way that people are borrowing, because right now, 357 00:20:27,960 --> 00:20:31,040 Speaker 1: consumers are still pretty healthy at least how they look 358 00:20:31,080 --> 00:20:32,760 Speaker 1: at it. Yeah, when I when I think about Bank 359 00:20:32,760 --> 00:20:35,879 Speaker 1: of America, I think about Wells Fargo. I think about 360 00:20:35,920 --> 00:20:39,680 Speaker 1: you know, real lending to real businesses on main street, 361 00:20:39,680 --> 00:20:42,679 Speaker 1: whether that's Main Street small town, you know, say main street, 362 00:20:42,880 --> 00:20:46,720 Speaker 1: big city, USA, but really lending to fund growth. What 363 00:20:46,720 --> 00:20:48,399 Speaker 1: are they saying about loan demanding? I mean, do you 364 00:20:48,440 --> 00:20:52,359 Speaker 1: want to mortgage a five percent? That is mortgage? I 365 00:20:52,359 --> 00:20:55,320 Speaker 1: mean historically, I mean it's not three percent that Matt, 366 00:20:55,600 --> 00:20:58,040 Speaker 1: you know the mortgage arbitress. You're got just a couple 367 00:20:58,080 --> 00:21:01,160 Speaker 1: of months. I'll spend my easter somebody talking to mortgages somehow. 368 00:21:01,240 --> 00:21:04,879 Speaker 1: But we are yes. I mean, listen, it does have 369 00:21:05,119 --> 00:21:09,480 Speaker 1: an impact here on residential home loan originations, and you 370 00:21:09,560 --> 00:21:11,959 Speaker 1: see it a lot of the major banks. But the 371 00:21:11,960 --> 00:21:15,919 Speaker 1: thing is credit card spend and credit card borrowing is 372 00:21:15,960 --> 00:21:19,439 Speaker 1: still pretty high, So there is still borrowing. It's just 373 00:21:19,480 --> 00:21:26,439 Speaker 1: not everywhere necessarily. So in terms of assumptions, right, um, 374 00:21:26,480 --> 00:21:29,520 Speaker 1: do we have to assume that the FED is going 375 00:21:29,560 --> 00:21:32,600 Speaker 1: to drive us into a recession? And I mean because 376 00:21:32,600 --> 00:21:36,800 Speaker 1: that will change loan demand? Right, The assumption is that 377 00:21:36,840 --> 00:21:40,800 Speaker 1: you can't look out past three months. The assumption is 378 00:21:40,840 --> 00:21:43,840 Speaker 1: the next three months things could be okay, but after 379 00:21:43,920 --> 00:21:47,040 Speaker 1: that things are very cloudy, and it's really anyone's guest 380 00:21:47,080 --> 00:21:49,120 Speaker 1: where things go. Remember, Bank of America has sold off 381 00:21:49,119 --> 00:21:52,040 Speaker 1: pretty heavily this year, about four cent or so so 382 00:21:52,080 --> 00:21:55,959 Speaker 1: they are rising today, but it seems like these banks 383 00:21:56,000 --> 00:21:58,880 Speaker 1: are trading within a range here with not too much 384 00:21:59,040 --> 00:22:02,400 Speaker 1: upside on how some of those clouds leave the horizon. 385 00:22:02,800 --> 00:22:05,040 Speaker 1: When I think about the retail side of the business, Shannale, 386 00:22:05,119 --> 00:22:09,240 Speaker 1: it's just I always read stories about Bank A poaching 387 00:22:09,280 --> 00:22:12,240 Speaker 1: broker from Bank B. Is that still a thing? Oh? Yeah. 388 00:22:12,400 --> 00:22:15,240 Speaker 1: People love the wealth business and if you look at 389 00:22:14,320 --> 00:22:17,480 Speaker 1: the price to book ratios, that means a place that 390 00:22:17,520 --> 00:22:20,359 Speaker 1: they're trading at. It's really JP Morgan and Morgan Stanley 391 00:22:20,359 --> 00:22:23,560 Speaker 1: trading more richly than anybody else, which shows you there's 392 00:22:23,560 --> 00:22:29,600 Speaker 1: a premium on wealth here. Good stuff, good stuff Wall Street. 393 00:22:29,640 --> 00:22:31,560 Speaker 1: I mean some good numbers. I think coming out of 394 00:22:31,600 --> 00:22:34,200 Speaker 1: this first course, maybe the expectations were a little bit low, 395 00:22:34,280 --> 00:22:36,840 Speaker 1: but we got through most of the big financials. Shale 396 00:22:36,960 --> 00:22:39,240 Speaker 1: keeping us in the loop as she always does. Shanale, 397 00:22:39,240 --> 00:22:44,240 Speaker 1: Basketball Street reporter for Bloomberg News. Thanks for listening to 398 00:22:44,280 --> 00:22:47,800 Speaker 1: the Bloomberg Markets podcast. You can subscribe and listen to 399 00:22:47,840 --> 00:22:52,000 Speaker 1: interviews with Apple Podcasts or whatever podcast platform you prefer. 400 00:22:52,400 --> 00:22:56,360 Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller three. 401 00:22:56,760 --> 00:22:59,199 Speaker 1: Put on False Sweeney. I'm on Twitter at pt Sweeney 402 00:22:59,320 --> 00:23:01,840 Speaker 1: before the pod cask. You can always catch us worldwide 403 00:23:01,880 --> 00:23:02,760 Speaker 1: at Bloomberg Radio.