WEBVTT - Ariel Investments Co-CEO Mellody Hobson Talks Financial Literacy

0:00:02.400 --> 0:00:06.760
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

0:00:06.960 --> 0:00:10.280
<v Speaker 2>While the majority of Americans own stocks and retirement accounts,

0:00:10.320 --> 0:00:12.920
<v Speaker 2>only thirty four percent of those surveyed by the FED

0:00:13.200 --> 0:00:17.000
<v Speaker 2>said their plans were on track. And famously, nearly four

0:00:17.000 --> 0:00:19.520
<v Speaker 2>and ten Americans have enough cash saved up to cover

0:00:19.600 --> 0:00:22.640
<v Speaker 2>a surprise four hundred dollars expense.

0:00:22.960 --> 0:00:25.080
<v Speaker 1>Don't have enough cash, and we.

0:00:25.040 --> 0:00:28.080
<v Speaker 2>Don't learn nearly enough about saving money and investment in

0:00:28.080 --> 0:00:31.360
<v Speaker 2>this country. But Melody Hobson hopes to change that. Melody

0:00:31.400 --> 0:00:34.240
<v Speaker 2>Hobson is the co CEO of investment firm Aerial Investments,

0:00:34.320 --> 0:00:37.120
<v Speaker 2>out with the New York Times best selling book for children,

0:00:37.520 --> 0:00:41.120
<v Speaker 2>Priceless Facts About Money. Hobson is also on the board

0:00:41.159 --> 0:00:45.040
<v Speaker 2>of Bloomberg Philanthropies, the philanthropic organization of Michael Bloomberg, the

0:00:45.080 --> 0:00:48.760
<v Speaker 2>founder and majority owner of Bloomberg LP, which owns Bloomberg News.

0:00:48.920 --> 0:00:51.239
<v Speaker 2>And thank you for joining us here, Melody. You know

0:00:51.560 --> 0:00:55.000
<v Speaker 2>this book in particular, you start with your own experience

0:00:55.080 --> 0:00:58.080
<v Speaker 2>growing up in Chicago with a single mother who sometimes

0:00:58.520 --> 0:01:01.000
<v Speaker 2>was looking to make ends meet. Now you stand on

0:01:01.040 --> 0:01:05.520
<v Speaker 2>the board of multiple boards of fortune five hundred companies.

0:01:06.160 --> 0:01:08.920
<v Speaker 2>In a lot of ways, is this book very personal

0:01:08.959 --> 0:01:10.800
<v Speaker 2>to you? Is it a memoir of some sort.

0:01:11.160 --> 0:01:12.200
<v Speaker 1>It's not a memoir.

0:01:12.319 --> 0:01:14.800
<v Speaker 3>I thought my story was very important in the beginning

0:01:14.840 --> 0:01:18.080
<v Speaker 3>to grounding the book, but I also shared John Rogers's

0:01:18.080 --> 0:01:22.880
<v Speaker 3>story who found it Aeriel, just as a beginning, setting

0:01:22.880 --> 0:01:26.039
<v Speaker 3>the stage of why the book makes sense and inviting

0:01:26.480 --> 0:01:29.520
<v Speaker 3>the reader into our lives as we were children, you know,

0:01:29.560 --> 0:01:32.200
<v Speaker 3>explaining what was like with when we were children. For me,

0:01:32.400 --> 0:01:35.520
<v Speaker 3>money was such a big deal when I was a child,

0:01:35.600 --> 0:01:38.120
<v Speaker 3>because we had such a hard time making ends meet

0:01:38.360 --> 0:01:41.720
<v Speaker 3>that I felt that letting the reader know why money

0:01:41.720 --> 0:01:45.360
<v Speaker 3>became so important to me as a subject matter was

0:01:45.360 --> 0:01:48.400
<v Speaker 3>something that they would then appreciate my passion for the subject.

0:01:48.480 --> 0:01:48.600
<v Speaker 1>You know.

0:01:48.720 --> 0:01:50.800
<v Speaker 2>Something we were talking about was this idea that only

0:01:50.840 --> 0:01:53.800
<v Speaker 2>about half the states in the United States really teach

0:01:53.920 --> 0:01:57.480
<v Speaker 2>financial literacy require it when you go to school. How

0:01:57.600 --> 0:01:59.600
<v Speaker 2>might that change over the next couple of years. Do

0:01:59.600 --> 0:02:01.400
<v Speaker 2>you think that there could be a bigger push here

0:02:01.680 --> 0:02:03.960
<v Speaker 2>to get financial literacy taught in schools.

0:02:04.200 --> 0:02:05.080
<v Speaker 1>I'm hopeful.

0:02:05.400 --> 0:02:07.840
<v Speaker 3>I don't know that there's any trigger that will lead

0:02:07.880 --> 0:02:09.680
<v Speaker 3>to that. I was really happy to hear that the

0:02:09.720 --> 0:02:12.840
<v Speaker 3>state of Maine actually bought my book for every elementary

0:02:12.880 --> 0:02:15.920
<v Speaker 3>school student in the state. I was astounded by that,

0:02:16.040 --> 0:02:19.120
<v Speaker 3>and I thought, that's great, because we want children to

0:02:19.160 --> 0:02:21.960
<v Speaker 3>have this knowledge, and honestly, I want the children to

0:02:22.000 --> 0:02:24.520
<v Speaker 3>be the gateway to the parent. I'm hoping a lot

0:02:24.560 --> 0:02:27.000
<v Speaker 3>of parents will pick up the book and be astounded

0:02:27.040 --> 0:02:29.280
<v Speaker 3>by the facts that they read and think, I need

0:02:29.320 --> 0:02:31.799
<v Speaker 3>to do more and learn more because most of our

0:02:31.880 --> 0:02:35.079
<v Speaker 3>money habits are learned from our parents.

0:02:34.880 --> 0:02:37.200
<v Speaker 4>Right, And most parents don't talk to their kids, don't

0:02:37.200 --> 0:02:39.120
<v Speaker 4>feel comfortable talking to their kids about this stuff.

0:02:39.520 --> 0:02:41.120
<v Speaker 1>I know mine didn't, So.

0:02:41.040 --> 0:02:41.600
<v Speaker 4>That's a piece.

0:02:41.680 --> 0:02:42.519
<v Speaker 1>The book is a piece.

0:02:42.880 --> 0:02:46.639
<v Speaker 4>Hopefully getting it into schools is another piece of it.

0:02:46.680 --> 0:02:49.239
<v Speaker 1>Is there a holistic a healthy model.

0:02:49.360 --> 0:02:51.880
<v Speaker 4>Can you look to another country, another civilization and say

0:02:52.280 --> 0:02:54.440
<v Speaker 4>they've done that right, and we need to sort of

0:02:54.680 --> 0:02:56.040
<v Speaker 4>adopt those practices.

0:02:56.160 --> 0:02:56.880
<v Speaker 1>I wish I could.

0:02:57.240 --> 0:03:01.919
<v Speaker 3>The world is pretty financially illiterate the subjects of money

0:03:01.919 --> 0:03:05.160
<v Speaker 3>and investing other than counting. We don't go very far

0:03:05.280 --> 0:03:08.079
<v Speaker 3>in schools in most places. And I know there are

0:03:08.120 --> 0:03:11.560
<v Speaker 3>things home mech and classes like that, but I think

0:03:11.600 --> 0:03:14.160
<v Speaker 3>we need to go a lot deeper really understand the

0:03:14.160 --> 0:03:16.960
<v Speaker 3>fundamentals of the stock market and investing. When you think

0:03:17.000 --> 0:03:19.200
<v Speaker 3>about the fact, when you get your first job, you

0:03:19.200 --> 0:03:20.800
<v Speaker 3>look at that four one K plan and you have

0:03:20.840 --> 0:03:25.280
<v Speaker 3>to make decisions that ultimately affect your family's financial security

0:03:25.320 --> 0:03:28.040
<v Speaker 3>over the long term in terms of your retirement, and

0:03:28.080 --> 0:03:30.120
<v Speaker 3>no one's really trained you to think about how to

0:03:30.160 --> 0:03:31.040
<v Speaker 3>make those decisions.

0:03:31.240 --> 0:03:33.119
<v Speaker 4>And hopefully you're doing that when you get your first job,

0:03:33.160 --> 0:03:36.040
<v Speaker 4>because it took me over a decade before I finally

0:03:36.080 --> 0:03:37.560
<v Speaker 4>started to invest my earnings here.

0:03:37.640 --> 0:03:41.680
<v Speaker 3>Well, so many companies now are automatically enrolling there are employees,

0:03:41.760 --> 0:03:44.680
<v Speaker 3>so that helps a lot that inertia. Once you get

0:03:44.720 --> 0:03:47.160
<v Speaker 3>into that plan, you keep investing. That's a great thing.

0:03:47.440 --> 0:03:49.560
<v Speaker 3>We have to make sure when people change jobs. The

0:03:49.760 --> 0:03:52.520
<v Speaker 3>average American has thirteen jobs in their lifetime that they

0:03:52.520 --> 0:03:55.119
<v Speaker 3>don't change jobs and cash out every time that they move.

0:03:55.440 --> 0:03:58.520
<v Speaker 3>And there's such interesting data about that. The Wall Street

0:03:58.560 --> 0:04:01.040
<v Speaker 3>Journal did a great story yesterday about the fact that

0:04:01.280 --> 0:04:03.200
<v Speaker 3>the smaller the amount you have in your four one

0:04:03.280 --> 0:04:05.960
<v Speaker 3>K plan, the more likely you are to sell it.

0:04:06.320 --> 0:04:08.840
<v Speaker 3>The bigger the amount you have, the more likely you

0:04:08.880 --> 0:04:09.680
<v Speaker 3>are to roll over.

0:04:10.160 --> 0:04:12.960
<v Speaker 5>Yeah, it's fascinating and the experience of switching jobs and

0:04:12.960 --> 0:04:15.640
<v Speaker 5>seamlessly getting your four oh one K across still a

0:04:15.680 --> 0:04:18.200
<v Speaker 5>clunky process. But with this book, what I think is

0:04:18.279 --> 0:04:21.080
<v Speaker 5>interesting is that, of course, you go into the history

0:04:21.080 --> 0:04:24.080
<v Speaker 5>of money thousands of years back. But I'm curious if

0:04:24.080 --> 0:04:26.440
<v Speaker 5>you thought about future proofing this at all, because you

0:04:26.480 --> 0:04:28.680
<v Speaker 5>walk through a sample bank transaction.

0:04:29.120 --> 0:04:30.679
<v Speaker 1>Do you think things could look.

0:04:30.520 --> 0:04:33.520
<v Speaker 5>Different in twenty thirty years when the children who are

0:04:33.600 --> 0:04:36.040
<v Speaker 5>reading this book are actually applying these lessons.

0:04:36.080 --> 0:04:37.720
<v Speaker 1>Well, we hinted at some of it. First of all.

0:04:37.760 --> 0:04:40.680
<v Speaker 3>I don't think knowing the history changes anything. I think

0:04:40.680 --> 0:04:42.920
<v Speaker 3>that's actually great and really important.

0:04:42.600 --> 0:04:44.320
<v Speaker 1>And it's fascinating.

0:04:44.360 --> 0:04:47.520
<v Speaker 3>I mean just explaining things like, you know, precious metals

0:04:47.520 --> 0:04:51.920
<v Speaker 3>are the results of meteors, meteors hitting the Earth's surface.

0:04:51.960 --> 0:04:54.000
<v Speaker 3>I mean most people don't think about that, are fossil

0:04:54.040 --> 0:04:56.720
<v Speaker 3>fuels or dinosaurs. You know, there are lots of things

0:04:56.720 --> 0:04:58.920
<v Speaker 3>there that I think, no matter who you are, whatever

0:04:59.000 --> 0:05:01.560
<v Speaker 3>time we're in today or thirty years from now, but

0:05:01.720 --> 0:05:04.440
<v Speaker 3>will be great. I hinted some of the things to come,

0:05:04.640 --> 0:05:07.520
<v Speaker 3>and I talk about, for example, paying with your phone,

0:05:07.720 --> 0:05:09.800
<v Speaker 3>and hint at some of these other things, and I

0:05:09.839 --> 0:05:14.000
<v Speaker 3>think that that we will see. However, it doesn't change

0:05:14.000 --> 0:05:16.200
<v Speaker 3>some of the fundamental ideas that I think are important.

0:05:16.200 --> 0:05:20.760
<v Speaker 3>For example, I'm encouraging parents to use cash around young children,

0:05:21.120 --> 0:05:25.719
<v Speaker 3>because these concepts are incredibly hard to understand. They're mystical

0:05:26.040 --> 0:05:28.280
<v Speaker 3>when you see money spewed out of a machine like

0:05:28.320 --> 0:05:31.320
<v Speaker 3>an ATM, or you see your parents only paying with

0:05:31.520 --> 0:05:34.039
<v Speaker 3>plastic and so a lot of parents will tell me

0:05:34.080 --> 0:05:36.200
<v Speaker 3>their children will say to them when they say, we

0:05:36.279 --> 0:05:39.400
<v Speaker 3>can't afford this, put it on a credit card, which

0:05:39.680 --> 0:05:42.360
<v Speaker 3>suggests they don't understand the fact that the credit credit

0:05:42.400 --> 0:05:44.960
<v Speaker 3>card is something you have to pay or that money

0:05:45.040 --> 0:05:45.760
<v Speaker 3>is finite.

0:05:45.800 --> 0:05:48.279
<v Speaker 1>So, no matter where we are with how.

0:05:48.160 --> 0:05:52.200
<v Speaker 3>Money and exchange and all of these things work, decades

0:05:52.200 --> 0:05:54.359
<v Speaker 3>from now, hundreds of years from now, I think this

0:05:54.440 --> 0:05:58.320
<v Speaker 3>foundational information is still very important and probably very evergreen.

0:05:58.360 --> 0:06:00.560
<v Speaker 2>Well, the concept of a twenty five percent interest rate

0:06:00.640 --> 0:06:01.720
<v Speaker 2>right for the credit card.

0:06:01.520 --> 0:06:02.360
<v Speaker 1>You know, it's interesting.

0:06:02.400 --> 0:06:05.320
<v Speaker 2>Goldman came out with a note in the last couple

0:06:05.320 --> 0:06:07.880
<v Speaker 2>of days saying that the next ten years for the

0:06:07.920 --> 0:06:10.040
<v Speaker 2>S and P five hundred might not be as good

0:06:10.240 --> 0:06:13.040
<v Speaker 2>as the last couple of decades. If you are a

0:06:13.080 --> 0:06:17.280
<v Speaker 2>young person investing a dollar today, if you are worried

0:06:17.320 --> 0:06:20.400
<v Speaker 2>about the next ten years, how do you think about investing?

0:06:21.080 --> 0:06:22.919
<v Speaker 3>So, first of all, I think that that's a nuanced

0:06:23.040 --> 0:06:25.839
<v Speaker 3>argument that Goldman is making. I saw the report, and

0:06:25.920 --> 0:06:29.760
<v Speaker 3>I think top line, they're right. However, the driver of

0:06:29.760 --> 0:06:31.719
<v Speaker 3>the SMP over the last decade, as we all know,

0:06:32.080 --> 0:06:34.640
<v Speaker 3>has been a very narrow group of stocks. We know

0:06:34.720 --> 0:06:37.599
<v Speaker 3>the MAG seven has had an outsized effect on the

0:06:37.640 --> 0:06:40.240
<v Speaker 3>returns that we've seen there, and so I often think

0:06:40.240 --> 0:06:43.560
<v Speaker 3>we have the s and P five hundred, it's really

0:06:43.600 --> 0:06:46.480
<v Speaker 3>the SMP four ninety three and then the.

0:06:46.400 --> 0:06:48.880
<v Speaker 1>MAG seven that is turbo charged those results.

0:06:49.240 --> 0:06:51.560
<v Speaker 3>So I would say I'd like to be a bit

0:06:51.600 --> 0:06:54.040
<v Speaker 3>more nuanced in thinking about that return in the future.

0:06:54.400 --> 0:06:56.479
<v Speaker 3>And I think there are areas in market that are

0:06:56.760 --> 0:07:01.080
<v Speaker 3>very undervalued where we have the opportunity for for real

0:07:01.160 --> 0:07:04.000
<v Speaker 3>appreciation over the next decade. If you look at how

0:07:04.200 --> 0:07:07.400
<v Speaker 3>smaller company stocks have done versus large gap the Russell

0:07:07.440 --> 0:07:09.840
<v Speaker 3>two thousand, or where we live at aeral the Russell

0:07:09.840 --> 0:07:13.200
<v Speaker 3>two thousand value versus the SMP five hundred, there is

0:07:13.280 --> 0:07:16.640
<v Speaker 3>a gaping hole in valuations right now, and we think

0:07:16.640 --> 0:07:21.880
<v Speaker 3>therefore there's a tremendous opportunity for smaller cap stocks to

0:07:21.880 --> 0:07:26.320
<v Speaker 3>have returns that are more like what we've seen historically.

0:07:26.360 --> 0:07:29.320
<v Speaker 3>If you look back to nineteen twenty six, before we get.

0:07:29.160 --> 0:07:30.200
<v Speaker 4>To the small caps, I.

0:07:30.160 --> 0:07:32.480
<v Speaker 5>Knowe I'm itching over Katie.

0:07:32.280 --> 0:07:35.160
<v Speaker 4>Champions the small caps for us on this Programay, I

0:07:35.240 --> 0:07:37.440
<v Speaker 4>just want to know what your take on that report,

0:07:37.520 --> 0:07:40.760
<v Speaker 4>because I feel like if we're kicking off this decade

0:07:40.920 --> 0:07:45.680
<v Speaker 4>with Nvidia, you know, in Facebook and Microsoft and Amazon

0:07:45.800 --> 0:07:50.000
<v Speaker 4>and Alphabet in the SMP, that's a great start for

0:07:50.080 --> 0:07:52.640
<v Speaker 4>this decade. And then if you get open Ai and

0:07:52.680 --> 0:07:56.400
<v Speaker 4>SpaceX and start adding these innovative companies. I mean, it

0:07:56.480 --> 0:08:00.360
<v Speaker 4>seems so pessimistic for Goldman Sachs to forecast only a

0:08:00.360 --> 0:08:02.720
<v Speaker 4>three percent annualized rate, as we showed on the chart

0:08:02.720 --> 0:08:06.200
<v Speaker 4>that I created from data Trek, that has only happened

0:08:06.360 --> 0:08:10.160
<v Speaker 4>like in the Great Depression or the Financial Crisis. I mean,

0:08:10.280 --> 0:08:13.360
<v Speaker 4>only when horrible catastrophes happen do.

0:08:13.320 --> 0:08:15.559
<v Speaker 1>We get returns that low for a ten year period.

0:08:15.680 --> 0:08:18.560
<v Speaker 3>And that's why I say I'm not necessarily convinced. However,

0:08:18.960 --> 0:08:21.480
<v Speaker 3>the stocks that you mentioned, I think their price for perfection.

0:08:21.880 --> 0:08:24.040
<v Speaker 3>I think you can be a great company, and I

0:08:24.120 --> 0:08:26.400
<v Speaker 3>mean great and not necessarily a great stock.

0:08:26.720 --> 0:08:27.280
<v Speaker 1>And I think it.

0:08:27.320 --> 0:08:32.480
<v Speaker 3>Presumes that everything goes perfectly, and I think that is

0:08:32.640 --> 0:08:35.839
<v Speaker 3>very hard to accomplish over long periods of time.

0:08:36.240 --> 0:08:37.600
<v Speaker 1>I was very humbled when.

0:08:37.440 --> 0:08:40.360
<v Speaker 3>I read stories in the last few weeks about Boeing

0:08:40.480 --> 0:08:43.199
<v Speaker 3>and Intel, where you see what is happening there. When

0:08:43.240 --> 0:08:47.680
<v Speaker 3>I came out of college, Intel was the Microsoft, Nvidia,

0:08:47.800 --> 0:08:52.200
<v Speaker 3>the Indie Grove was, you know, superstar legend. So the

0:08:52.240 --> 0:08:54.680
<v Speaker 3>idea that that company has one hundred billion dollar market cap,

0:08:54.800 --> 0:08:58.000
<v Speaker 3>I never would have anticipated that, And yet that is

0:08:58.040 --> 0:09:01.000
<v Speaker 3>where we are because life has along the way.

0:09:01.280 --> 0:09:02.079
<v Speaker 1>So again, you.

0:09:02.040 --> 0:09:04.880
<v Speaker 3>Can be a great company and have things happen. I'm

0:09:04.920 --> 0:09:09.160
<v Speaker 3>not suggesting any ill will on these businesses or these companies.

0:09:09.360 --> 0:09:10.760
<v Speaker 1>I'm just saying from here.

0:09:11.200 --> 0:09:14.520
<v Speaker 3>If I'm as we are at Aerial looking for value,

0:09:14.920 --> 0:09:18.040
<v Speaker 3>I would look elsewhere because the risk of owning the

0:09:18.120 --> 0:09:21.559
<v Speaker 3>names does go up with these valuations, right.

0:09:21.400 --> 0:09:23.800
<v Speaker 5>So the margin for error super narrow if you're one

0:09:23.800 --> 0:09:25.160
<v Speaker 5>of these huge magnificence.

0:09:25.280 --> 0:09:27.440
<v Speaker 3>I mean, I read the story about you know, Tesla

0:09:27.559 --> 0:09:29.720
<v Speaker 3>having a six trillion dollar market cap. At some point

0:09:30.160 --> 0:09:33.880
<v Speaker 3>you have individual stocks that represent the market cap one

0:09:33.960 --> 0:09:36.120
<v Speaker 3>stock of the entire Rustle two thousand.

0:09:36.880 --> 0:09:39.480
<v Speaker 1>I can't even wrap my brain around that.

0:09:40.320 --> 0:09:42.360
<v Speaker 3>And in terms of what that means, the kind of

0:09:42.400 --> 0:09:45.160
<v Speaker 3>stocks that have been orphaned along the way, and therefore

0:09:45.160 --> 0:09:49.000
<v Speaker 3>the opportunity that exists and the concentration takes the risk up.

0:09:49.040 --> 0:09:51.160
<v Speaker 3>The S and P five hundred to me is a

0:09:51.240 --> 0:09:52.360
<v Speaker 3>large cap growth index.

0:09:52.400 --> 0:09:54.880
<v Speaker 5>Now, well, let's build on what you were saying about

0:09:54.920 --> 0:09:58.240
<v Speaker 5>small caps, because we were having conversations yesterday about one

0:09:58.240 --> 0:09:59.640
<v Speaker 5>of our guests said that small caps are in a

0:09:59.640 --> 0:10:01.920
<v Speaker 5>secular bear market, and part of the reason why is

0:10:01.920 --> 0:10:04.560
<v Speaker 5>that you have high interest rates. You have these companies

0:10:04.559 --> 0:10:06.680
<v Speaker 5>with big debt burdens, and many of them in the

0:10:06.760 --> 0:10:10.400
<v Speaker 5>Russell two thousand, just a normal one for example, are unprofitable.

0:10:10.679 --> 0:10:13.000
<v Speaker 5>So talk us through your base case there.

0:10:13.040 --> 0:10:14.680
<v Speaker 1>How are you able to square that circle?

0:10:14.960 --> 0:10:16.559
<v Speaker 3>So I don't think that has changed from what we've

0:10:16.559 --> 0:10:20.200
<v Speaker 3>seen in the Wrestle two thousand. Historically, many, not all.

0:10:20.640 --> 0:10:23.439
<v Speaker 3>There are great companies in the Rustle two thousand Russell

0:10:23.440 --> 0:10:27.080
<v Speaker 3>two thousand Value Index that are not unprofitable businesses. There

0:10:27.080 --> 0:10:31.000
<v Speaker 3>are wonderful businesses that have great potential over time, but

0:10:31.040 --> 0:10:35.120
<v Speaker 3>the market has basically ignored those stocks and therefore there's

0:10:35.160 --> 0:10:37.600
<v Speaker 3>been no action in them. But it doesn't mean they

0:10:37.600 --> 0:10:40.400
<v Speaker 3>don't have great futures. There are companies that do things

0:10:40.400 --> 0:10:43.480
<v Speaker 3>that are very specific. Just because you aren't a T

0:10:44.000 --> 0:10:46.160
<v Speaker 3>these days, a one T at two a three D

0:10:46.720 --> 0:10:49.720
<v Speaker 3>doesn't mean you don't have a wonderful niche business that

0:10:49.800 --> 0:10:53.599
<v Speaker 3>can grow, and we have many of those in our portfolios,

0:10:53.840 --> 0:10:58.160
<v Speaker 3>from cruise ships to all sorts of consumer products companies

0:10:58.160 --> 0:11:00.320
<v Speaker 3>that are the best at what they do.

0:11:01.320 --> 0:11:03.160
<v Speaker 2>So, you know, another thing on the New York term.

0:11:03.200 --> 0:11:05.480
<v Speaker 2>I know we're talking about long term investments here as well,

0:11:05.520 --> 0:11:08.320
<v Speaker 2>but we are just really days away from the US election.

0:11:08.720 --> 0:11:10.360
<v Speaker 2>The elections are on the top of minds of many

0:11:10.360 --> 0:11:11.680
<v Speaker 2>investors at this juncture.

0:11:11.679 --> 0:11:13.880
<v Speaker 1>How weeks from today, two weeks.

0:11:13.600 --> 0:11:16.679
<v Speaker 2>From today, My gosh, it's a heavy reminder. And so

0:11:16.960 --> 0:11:19.040
<v Speaker 2>how do you think about the election and the impact

0:11:19.040 --> 0:11:20.120
<v Speaker 2>it would have on the markets.

0:11:20.480 --> 0:11:21.160
<v Speaker 1>It's interesting.

0:11:21.280 --> 0:11:23.640
<v Speaker 3>I think that it weighs on a lot of people's

0:11:23.800 --> 0:11:27.440
<v Speaker 3>spirits and their psychologies. But at the end of the day,

0:11:27.520 --> 0:11:31.400
<v Speaker 3>I've bought into our idol at ariel is Warren Buffett,

0:11:31.679 --> 0:11:33.960
<v Speaker 3>and Warren Buffett has been known to say markets are

0:11:34.000 --> 0:11:36.840
<v Speaker 3>stronger than governments, and so I think that we've seen

0:11:36.880 --> 0:11:38.880
<v Speaker 3>that time and time again. If you look back over

0:11:38.880 --> 0:11:42.640
<v Speaker 3>the last couple of decades and seen the different leaders

0:11:42.640 --> 0:11:46.960
<v Speaker 3>that we've had run the United States, the market has

0:11:47.040 --> 0:11:51.600
<v Speaker 3>not been felled by any one person, and I think

0:11:51.679 --> 0:11:54.480
<v Speaker 3>that's a testament to the fundamentals of the US economy

0:11:54.800 --> 0:11:57.880
<v Speaker 3>and that ultimately which will that is what will drive returns.

0:11:58.280 --> 0:12:01.680
<v Speaker 3>So while there's a lot of talk about markets and

0:12:01.720 --> 0:12:04.280
<v Speaker 3>what will happen as a result of who wins, I

0:12:04.320 --> 0:12:07.080
<v Speaker 3>think I'm more confident and I'm a long term investor.

0:12:07.080 --> 0:12:09.160
<v Speaker 1>We have a turtle as a logo. I always have

0:12:09.240 --> 0:12:09.760
<v Speaker 1>my turtle.

0:12:10.080 --> 0:12:12.600
<v Speaker 3>I'm more confident in the long term that the US

0:12:12.640 --> 0:12:15.080
<v Speaker 3>economy will do what it always has done in the

0:12:15.120 --> 0:12:17.760
<v Speaker 3>American capitalist system will work.

0:12:18.360 --> 0:12:20.280
<v Speaker 2>So I also want to ask you, abou Kamala Harris

0:12:20.320 --> 0:12:22.200
<v Speaker 2>from many here, because I know that you've personally signed

0:12:22.240 --> 0:12:24.520
<v Speaker 2>a number of letters that have come out in support

0:12:24.640 --> 0:12:25.080
<v Speaker 2>of her.

0:12:25.520 --> 0:12:26.720
<v Speaker 1>What is it about her.

0:12:26.679 --> 0:12:29.559
<v Speaker 2>That you think that the business community may not be understanding.

0:12:29.600 --> 0:12:31.440
<v Speaker 2>There are a lot of Republicans who will come out

0:12:31.440 --> 0:12:34.440
<v Speaker 2>and say that she is not the best for business.

0:12:34.480 --> 0:12:35.320
<v Speaker 1>What would you say to that.

0:12:35.520 --> 0:12:37.680
<v Speaker 3>I think she's probably more moderate than people think. I

0:12:37.679 --> 0:12:39.360
<v Speaker 3>think there are a lot of assumptions that are made

0:12:39.679 --> 0:12:42.880
<v Speaker 3>by association. I think one of the things I've been

0:12:43.480 --> 0:12:45.880
<v Speaker 3>very confused by is this idea that you be a

0:12:45.920 --> 0:12:48.560
<v Speaker 3>clone of another person that you work for or with.

0:12:49.040 --> 0:12:51.600
<v Speaker 3>I was president of Ariel when John Rodgers was CEO

0:12:51.720 --> 0:12:52.760
<v Speaker 3>for many many years.

0:12:52.800 --> 0:12:53.480
<v Speaker 1>We are now co.

0:12:53.880 --> 0:12:56.200
<v Speaker 3>We are very different leaders, but we are aligned in

0:12:56.240 --> 0:12:59.600
<v Speaker 3>our core beliefs around values. We make different decisions all

0:12:59.640 --> 0:13:02.000
<v Speaker 3>the time, and that doesn't make one of us better

0:13:02.080 --> 0:13:02.480
<v Speaker 3>than the other.

0:13:02.600 --> 0:13:03.800
<v Speaker 1>We're different, and.

0:13:03.800 --> 0:13:06.040
<v Speaker 3>So I think that when she's in the top seat,

0:13:06.080 --> 0:13:09.560
<v Speaker 3>when you are the boss, it's very different than working

0:13:09.640 --> 0:13:12.800
<v Speaker 3>for someone, And technically when you're vice president, you work

0:13:12.840 --> 0:13:15.760
<v Speaker 3>for someone, so it'll be I think the assumptions that

0:13:15.800 --> 0:13:18.000
<v Speaker 3>are made about who she is, those are yet to

0:13:18.040 --> 0:13:21.559
<v Speaker 3>be fully revealed. But I am encouraged by what I've

0:13:21.600 --> 0:13:22.280
<v Speaker 3>heard so far.

0:13:22.960 --> 0:13:25.920
<v Speaker 4>You know, we talk a lot about the things that

0:13:25.920 --> 0:13:29.560
<v Speaker 4>are wrong with this country, and Harris and Trump talk

0:13:29.600 --> 0:13:32.000
<v Speaker 4>about that too, and we really focus on the risks.

0:13:33.080 --> 0:13:35.240
<v Speaker 4>I wonder, you know, with a book like this looking

0:13:35.280 --> 0:13:40.199
<v Speaker 4>forward hopefully with hope, what does the US do right?

0:13:40.240 --> 0:13:42.880
<v Speaker 4>I mean, you've had such success in your career, and

0:13:42.920 --> 0:13:46.600
<v Speaker 4>the companies that you foster have had such success, I

0:13:46.600 --> 0:13:49.600
<v Speaker 4>imagine in large part because of the US environment. So

0:13:49.840 --> 0:13:51.439
<v Speaker 4>what does this country do right?

0:13:51.559 --> 0:13:51.719
<v Speaker 1>Oh?

0:13:51.760 --> 0:13:54.560
<v Speaker 3>My gosh, we do so many things right. I love America.

0:13:54.640 --> 0:13:56.480
<v Speaker 3>I think we are the best country in the world,

0:13:56.760 --> 0:13:59.480
<v Speaker 3>and that's not based upon some manifest destiny point of view.

0:13:59.520 --> 0:14:00.439
<v Speaker 1>It's just the.

0:14:00.400 --> 0:14:02.920
<v Speaker 3>Facts that if you look at just at the market level,

0:14:03.160 --> 0:14:04.760
<v Speaker 3>people want to be invested in the US.

0:14:04.800 --> 0:14:06.239
<v Speaker 1>That's where they see the opportunity.

0:14:06.559 --> 0:14:12.240
<v Speaker 3>If you look at some of the quintessential American things, hope,

0:14:13.040 --> 0:14:15.559
<v Speaker 3>Americans are always very hopeful. I think that's a wonderful

0:14:15.600 --> 0:14:17.920
<v Speaker 3>way to be. If you look at things like charity,

0:14:18.440 --> 0:14:21.160
<v Speaker 3>we are the most generous nation in the world. Literally,

0:14:21.280 --> 0:14:23.960
<v Speaker 3>there no nation comes close to us in terms of

0:14:24.160 --> 0:14:26.760
<v Speaker 3>looking after each other and giving back to our society.

0:14:27.080 --> 0:14:30.280
<v Speaker 3>If you look at opportunity, despite the fact that people

0:14:30.320 --> 0:14:33.280
<v Speaker 3>do not yet have the full opportunity that I believe

0:14:33.280 --> 0:14:37.000
<v Speaker 3>they should have, especially those who are black, black and brown,

0:14:37.040 --> 0:14:39.960
<v Speaker 3>and those who are women, we are not yet fully

0:14:40.000 --> 0:14:41.720
<v Speaker 3>at the table in any way.

0:14:42.160 --> 0:14:43.600
<v Speaker 1>Despite that fact, we.

0:14:43.600 --> 0:14:45.520
<v Speaker 3>Are still a better positioned than a lot of other

0:14:45.560 --> 0:14:46.520
<v Speaker 3>places in the world.

0:14:46.880 --> 0:14:47.880
<v Speaker 1>And you can be me.

0:14:48.400 --> 0:14:50.120
<v Speaker 3>You could be someone who grew up the youngest of

0:14:50.200 --> 0:14:53.040
<v Speaker 3>six kids, whose mom was struggling all the time, who

0:14:53.080 --> 0:14:57.200
<v Speaker 3>got evicted and cars got repossessed and phones got turned off,

0:14:57.520 --> 0:14:59.640
<v Speaker 3>And you can go to Princeton and you can be

0:14:59.680 --> 0:15:02.200
<v Speaker 3>on the Bloomberg Philanthropies and on the board of other

0:15:02.280 --> 0:15:06.040
<v Speaker 3>companies and you can run an investment firm. Now, there

0:15:06.080 --> 0:15:09.680
<v Speaker 3>was tremendous hard work that made that happen, But there

0:15:09.680 --> 0:15:13.680
<v Speaker 3>were some unique aspects of America and what makes America

0:15:13.720 --> 0:15:17.120
<v Speaker 3>great that allowed luck to come together there as well

0:15:17.400 --> 0:15:20.040
<v Speaker 3>and for me to happen. I think there's the idea

0:15:20.040 --> 0:15:22.640
<v Speaker 3>that we could have more melodies. Is what this book

0:15:22.680 --> 0:15:24.360
<v Speaker 3>is about and what our country is about.

0:15:24.520 --> 0:15:26.360
<v Speaker 2>Is there a warning kind of under the surface here too,

0:15:26.440 --> 0:15:28.880
<v Speaker 2>about as we kind of get into this recovery era?

0:15:29.160 --> 0:15:31.480
<v Speaker 2>Do you worry at all, Melody about a K shape recovery?

0:15:32.920 --> 0:15:36.000
<v Speaker 3>I mean, again, we're bottom up stock pickers at Ariel.

0:15:36.040 --> 0:15:37.760
<v Speaker 3>You could spend a lot of time worrying about a

0:15:37.760 --> 0:15:40.000
<v Speaker 3>lot of things. I have this quote that says we're

0:15:40.040 --> 0:15:42.920
<v Speaker 3>worrying is like sitting in a rocking chair. It gives

0:15:42.960 --> 0:15:45.000
<v Speaker 3>you something to do, but it doesn't take you anywhere.

0:15:45.440 --> 0:15:47.840
<v Speaker 3>I try to just think about what I can control,

0:15:47.960 --> 0:15:50.640
<v Speaker 3>what I can do, and we try to have at

0:15:50.680 --> 0:15:53.000
<v Speaker 3>least at aerial in terms of our portfolios, portfolios that

0:15:53.040 --> 0:15:55.640
<v Speaker 3>are resistant to different types of economies.

0:15:56.040 --> 0:15:57.960
<v Speaker 5>All right, Melody, that's a good place to leave it.

0:15:58.040 --> 0:16:00.440
<v Speaker 5>Really appreciate you taking the time with us today. That,

0:16:00.520 --> 0:16:04.000
<v Speaker 5>of course, is Melody Hobson, and her book Priceless Facts

0:16:04.040 --> 0:16:05.920
<v Speaker 5>About Money is available now