Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is Bloomberg business Week inside from the reporters and
Speaker 2: editors who bring you America's most trusted business magazine, plus
Speaker 2: global business, finance and tech news. The Bloomberg Business Week
Speaker 2: Podcast with Carol Meser and Tim Stenebek from Bloomberg Radio.
Speaker 3: Joining us is Caroline High, co host of Bloomberg Technology.
Speaker 3: Here in Studio, Caroline, Let's first start with Intel felt
Speaker 3: like this was expected and yet it feels like still
Speaker 3: a big deal for Hey.
Speaker 4: Well, I will say every time we had Ian on
Speaker 4: in the last two years, Ian King, we basically ask him, Caroline,
Speaker 4: how much patience does the board have for this turnaround plan?
Speaker 4: And I guess we finally learned today they're out of patients.
Speaker 5: They're out of patients and actually saw that patients being strained.
Speaker 5: In August when they had their numbers, the earnings were poor.
Speaker 5: In particular, they were showing losses at the manufacturing part
Speaker 5: of the business. The foundery is part of the business,
Speaker 5: and inking, poor guy, I think he's meant to be
Speaker 5: taking the day off and had to come running back.
Speaker 6: To report he's down the terminal.
Speaker 5: Yeah, and when that August number hit. We saw in
Speaker 5: particular one member of the board quit Li Bhutan and
Speaker 5: with the frustration about the direction of travel coming from
Speaker 5: Pat Girl Singer because look, this pre dates Pac coming
Speaker 5: in in twenty twenty one. To be fair, to be
Speaker 5: fair in Video has been on AI accelerator path and
Speaker 5: GPU focus for a long time, but they just managed
Speaker 5: to miss this AI accelerator wave. The Galdhi offering that
Speaker 5: they have is likely to not meet their own internal
Speaker 5: five hundred million dollars per year revenue target. Compare that
Speaker 5: to the one hundred billion in videos bringing in the
Speaker 5: more than five billion the AMD is managing to do.
Speaker 5: All of this though, just shows that since Pac Girl
Speaker 5: Singer has been the leaders in twenty twenty one, Intel's
Speaker 5: share prices plummeted sixty percent in Video's share price as
Speaker 5: well as more than eight hundred percent, and Intel has
Speaker 5: managed to try and pivot become more focusing on foundries.
Speaker 5: Do like the opposite of AMD, which spun off global
Speaker 5: foundriies and went fabulous. Intel went back in. But there's
Speaker 5: a mixed reaction coming from the analyst today because City
Speaker 5: Group is actually saying and maybe this is why the
Speaker 5: shares have turned negative were now off by one point
Speaker 5: seven percent.
Speaker 7: Is that?
Speaker 5: Look, he Pat was the best guy for manufacturing. They
Speaker 5: rather they just got rid of the foundries part of
Speaker 5: the business and kept Pat, rather than get rid of
Speaker 5: Pat and try and still cobble together the focus that
Speaker 5: he had in terms of getting into building chips as
Speaker 5: well for other clients as well as themselves.
Speaker 3: I mean, it's amazing, right because the Intel was up
Speaker 3: six percent of TIS as you said, now down about
Speaker 3: one and a half percent. So it just shows like
Speaker 3: whilst you're trying to figure out what this means, I mean,
Speaker 3: isn't a Pat Gelsinger problem?
Speaker 6: Is it an Intel problem?
Speaker 8: Like?
Speaker 6: What is the way forward for Intel?
Speaker 5: I think it's an Intel problem, many would say. Is
Speaker 5: that over years, you know, they were trying to do
Speaker 5: the biggest restructuring in four decades.
Speaker 6: Pat did come on with a very big, bold vision.
Speaker 5: Perhaps that was too big, too bold to cost even
Speaker 5: with government help, with all these chips at money coming
Speaker 5: at them, to be able to build an Ohio Arizona,
Speaker 5: they had to suddenly put on ice what was happening
Speaker 5: in Europe, and ultimately the market ripped away from them,
Speaker 5: particularly when it came to AI and I think just
Speaker 5: other areas of the market, plus their own clients. Remember,
Speaker 5: at the same time as in video building up strength
Speaker 5: in AI, Apple is busy making its own chips, and
Speaker 5: they're not making so much for their phones anymore.
Speaker 4: If this wasn't a Pat Gelsinger problem and he did
Speaker 4: have a few years to attempt to turn it around,
Speaker 4: you mentioned what happened with the share price, especially versus Nvidia,
Speaker 4: Then what can another leader actually come in and do
Speaker 4: to save this.
Speaker 5: Company, and particularly at the moment where they're depending on insiders,
Speaker 5: look fair play. David Sinzner, the CFO has only been
Speaker 5: there a few years, but Michelle Johnson Halthouse MJS is
Speaker 5: known has been there for three decades. This is totally
Speaker 5: turning to people who understand the business but are not
Speaker 5: going to be a breath of fresh air anytime soon.
Speaker 5: Of course, we've got Frank Eeri saying he's going to
Speaker 5: take on the executive chair role and he's going to
Speaker 5: find a new permanent solution. Will that be from outside
Speaker 5: the business or will they turn to potentially starting to
Speaker 5: bring themselves up. That was something Pat was very dead
Speaker 5: set against. Yes, he was going to be making money
Speaker 5: by spinning off different bits of the business, certainly particular
Speaker 5: investments that they'd made, but he wanted to keep it intact.
Speaker 5: What about offers coming from rival suitors?
Speaker 6: Right right? I mean Quacom was interested, right, Yeah, and
Speaker 6: then they went off and then the deal.
Speaker 3: Yeah, but not so into you anymore kind of thing. Well,
Speaker 3: what kind of leader does?
Speaker 6: Do we have any idea?
Speaker 3: I'm just curious what kind of leader Intel needs at
Speaker 3: this point? Yeah, I love the inside outside, right, We've
Speaker 3: seen this with these incredible it's.
Speaker 4: Almost like company. It's almost like you're talking about Boeing
Speaker 4: right now. Yeah, exactly, I'm hearing this and I'm like
Speaker 4: just thinking about Boeing.
Speaker 3: Right, how many times have we talked about this story
Speaker 3: that like maybe it's time for fresh blood to come.
Speaker 6: Into a company.
Speaker 5: And remember Pat Kelson himself was kind of fresh blood
Speaker 5: because he came out from VM where he'd been the
Speaker 5: CEO there. He'd left Intel. He was so integral to
Speaker 5: Intel in the eighties.
Speaker 6: He was like literally, you know, designing the chips himself.
Speaker 5: He then left after serving a long time and ap
Speaker 5: period as CTO is Intel, do they go and get
Speaker 5: other experience? Then he came back and he couldn't change
Speaker 5: it around if they go outside of say MJ. It's
Speaker 5: interesting hearing the narrative just from the statement this morning.
Speaker 5: They're saying, we need the product people to lead the
Speaker 5: business at the moment.
Speaker 6: Well, that is MJ.
Speaker 5: So what are they going to do.
Speaker 6: Are they going to bring other product.
Speaker 5: Expertise from outside or are they going to bring someone
Speaker 5: who can be a bit of a turnaround king or
Speaker 5: queen after see right.
Speaker 3: Like operate or turn around person versus somebody really understands
Speaker 3: the products that need to kind of move Intel going forward?
Speaker 4: To what extent does this turn into or continue a
Speaker 4: nasty cycle for Intel? If you're a potential customer or
Speaker 4: a customer and you're thinking to yourself, well, do I
Speaker 4: really want to buy it from a company that I
Speaker 4: see reported in the press such as this, it's going
Speaker 4: through this upheaval, there's again executive shake.
Speaker 7: Up at the top.
Speaker 4: Does that turn into a terrible doom loop for the company?
Speaker 5: I mean, time will tell, and I hate that sort
Speaker 5: of an answer, But what could help.
Speaker 6: Is the PC refresh.
Speaker 5: You know, this is a man who's also staked his
Speaker 5: future on the AIPC taking off, and thus far we've
Speaker 5: all talked about it, but not really known how it's
Speaker 5: going to affect our lives and not really bought the
Speaker 5: darn thing, right, So will we actually see I mean,
Speaker 5: this echo is the issue that Dell was having an
Speaker 5: HP was having in the beginning of the week John
Speaker 5: last week.
Speaker 4: Yeah, and he made the point that there are no
Speaker 4: apps for Intel for if there are no apps for
Speaker 4: aipcs yet, So it's like we just hear from executives
Speaker 4: talking about them, but there's nothing to show for him.
Speaker 5: So if that starts to take up, if suddenly we
Speaker 5: are all addicted to generative AI, we do suddenly want
Speaker 5: to get a newer PC that we had bought just
Speaker 5: the time in COVID, and we will now get a
Speaker 5: new one. Maybe that will help Intel, but then they're
Speaker 5: going to be leaning back into the PC side rather
Speaker 5: than trying to compete on the AI accelerator side, which
Speaker 5: is really the bit of the market that at the
Speaker 5: moment everyone's getting into.
Speaker 3: Yeah, it's kind of like this identity crisis for a
Speaker 3: name that was just so you know, associated with anything
Speaker 3: to do with the semi world. Hey, before you go,
Speaker 3: we got to ask you about super micro computer. I
Speaker 3: think it's the number one gainer and both the S
Speaker 3: and P five hundred and nas DECK one hundred independent
Speaker 3: review no evidence of miscanda.
Speaker 6: This is a company that's had so many twists and
Speaker 6: terms this year.
Speaker 5: No, I mean on the high's absolutely caught up in
Speaker 5: the AI hype because they are a competitor with Dell.
Speaker 5: They basically put in video chips within their servers and
Speaker 5: sell them out to clients. So super Micro done phenomenally well,
Speaker 5: but then came the concern about well, no one wanting
Speaker 5: to audit them, then getting worried about financials not putting
Speaker 5: their ten k out, potentially being kicked off the Nasdaq.
Speaker 5: Right now, they've got a new auditor, now, they've got
Speaker 5: a new CFO, Chief compliance Officer, General counsel. They're trying
Speaker 5: to steady people's nerves that look, we've got different oversight
Speaker 5: here of the business and we are going to be
Speaker 5: able to stay listed within the Nasdaq, which I think
Speaker 5: for many is the key.
Speaker 4: I'm surprised to see reaction today just because when EI
Speaker 4: resigns it's not a good sign and I'm like, well,
Speaker 4: did they get something wrong then? And this new auditor
Speaker 4: is different in some sense, like they're obviously sending a
Speaker 4: different signal, but you know someone's not.
Speaker 5: In the right here, or whether EI were frustrated with
Speaker 5: the leadership and now they're changing up the executive leadership
Speaker 5: and showing that they're going to have a different governance
Speaker 5: structure going through. But everyone wants to love this stock
Speaker 5: because it is so integral to the AI hype cycle.
Speaker 5: So maybe it's just been so beaten up that people
Speaker 5: are willing to buy back in. But yeah, we'll see
Speaker 5: what BDO USA has to say about the numbers when
Speaker 5: they eventually file them.
Speaker 4: Not one of the big accounting firms that typically odd
Speaker 4: at s and P five hundred.
Speaker 5: Company, but I KNOWDIA like video, Yeah, Simon, and you're
Speaker 5: not going to hang your hat on. I would have thought, yeah,
Speaker 5: they're taking a big risk here, and I'm sure they
Speaker 5: want to show the proof in the pudding.
Speaker 3: Well, I'm got to say investors certainly buying in stocks
Speaker 3: P twenty eight percent so far in today's session.
Speaker 6: Caroline, thank you, Thank you so appreciate.
Speaker 3: Co host of Bloomberg Technology Catcher on Bloomberg Television at
Speaker 3: eleven am Wall Street time.
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Speaker 4: Hesbilla has claimed the first strike against Israel since a
Speaker 4: US back ceasefire plan came into effect that was less
Speaker 4: than a week ago. It prompted Israeli officials to a
Speaker 4: strong response and the most serious threats so far to
Speaker 4: the truce with Lebanon. With more and what we know,
Speaker 4: Bloomberg News US National Security Team leader Nick Wadams joins
Speaker 4: us from our DC bureau. Nick I was confused to
Speaker 4: see this headline because, like you know, we see in
Speaker 4: the story here, less than a week ago, we saw
Speaker 4: a ceasefire agreement between these two countries.
Speaker 9: What happened, right, Well, I mean that's that's really the issue,
Speaker 9: and this is this is something that happens every time
Speaker 9: there is a ceasefire, or frequently when there is a ceasefire,
Speaker 9: there are violations of it. And the question is then
Speaker 9: at what point do you say, Okay, the ceasefire has
Speaker 9: essentially collapsed and it no longer applies. What we gather
Speaker 9: so far is that we have not drifted into that territory.
Speaker 9: The US National Security Council spokesman John Kirby said today
Speaker 9: that rocket attacks went from hundreds to basically zero, and
Speaker 9: then dozens of air strikes by Israel to one or
Speaker 9: two per day. So what there's saying here is there
Speaker 9: has been a dramatic reduction in violence and that's what matters,
Speaker 9: and the ceasefire still holds. But what it does tell
Speaker 9: us more broadly is that this is very tenuous. You
Speaker 9: had President Biden come out and say the ceasefire had
Speaker 9: been achieved, a lot of concern about whether it will hold,
Speaker 9: and concern that things will only continue to exclate. One possibility,
Speaker 9: of course, is this is just sort of a show
Speaker 9: of strength by the two sides. Things will quiet back down,
Speaker 9: but certainly not looking good for the broader prospects for
Speaker 9: that ceasefire at the moment, Nick.
Speaker 6: Why do this dance? You know, rather than ceasefire means ceasefire?
Speaker 6: So help me understand.
Speaker 3: I know it's always complicated when I feel like anything
Speaker 3: in the Middle East, But why this dance rather than Okay, ceasefire,
Speaker 3: this is a step forward.
Speaker 9: Well, I mean it's a great question, but you know,
Speaker 9: the big issue is that so much time and effort
Speaker 9: and energy went into establishing this ceasefire. And the really
Speaker 9: important thing for certainly the US, but also for those
Speaker 9: caught in the conflict, is that the violence has dramatically reduced.
Speaker 9: So there's a question of Okay, you have the ceasefire.
Speaker 9: You don't want to immediately just declare the ceasefire is dead,
Speaker 9: which means okay that everybody would then have to go
Speaker 9: back to the negotiating table. And if you're looking at
Speaker 9: a pure numbers game, it's like, okay, well, we have
Speaker 9: a monitoring system in place. There may be some violations.
Speaker 9: We do not deem those violations to be to indicate
Speaker 9: that the ceasefire has totally collapsed. I mean, and when
Speaker 9: you look at some of the language, it seems like
Speaker 9: the two sides also have an interest in keeping the
Speaker 9: ceasefire in place. Has Bellowed, for example, targeted Israel in
Speaker 9: a specific area, an area that's still contested, and they
Speaker 9: framed their response as a defensive response to what they
Speaker 9: said were recurrent violations by the Israeli side. So what
Speaker 9: they're saying is this is much more of a defensive action,
Speaker 9: and they have not gone back on the offense of course,
Speaker 9: big question is whether will see things the same way.
Speaker 9: But at this point the big question is going to
Speaker 9: be is there escalation where we would get to a
Speaker 9: point where we'd say, listen, the ceasefire exists in name only.
Speaker 9: So far, that's not quite yet the case.
Speaker 4: We'll tell us a little bit more about the area
Speaker 4: that's in contention right now, Nick, because we saw after
Speaker 4: that ceasefire deal with sign last week or reached last week,
Speaker 4: I should say, we saw people moving in Lebanon, moving
Speaker 4: back to that area because they thought.
Speaker 7: It would be safe to do so. So there's some, right,
Speaker 7: I mean, concerns.
Speaker 9: Yeah, yeah, I mean so there. I think a lot
Speaker 9: of the imagery we really saw of people coming back
Speaker 9: to their homes in Lebanon in a lot of cases
Speaker 9: that was actually in Beirut, in the capitol where people
Speaker 9: had fled because Israeli air strikes had really hit some
Speaker 9: parts of Beyrout, particularly southern Beay Route quite hard, and
Speaker 9: so people were coming back in because there was a
Speaker 9: feeling which has largely held that the ceasefire would apply
Speaker 9: and you start to see those strikes again. The area
Speaker 9: really in question is this sort of strip of land
Speaker 9: around just south of the Litani River and so this
Speaker 9: this divides Lebanon in Israel, and this has been a
Speaker 9: sort of hotly contested area for quite some time, and
Speaker 9: it's believed that that has you know, has been there
Speaker 9: for a long time, and there was a feeling that
Speaker 9: Israel could then pull back and that would also allow
Speaker 9: Hesbolat to pull back. So that's really where you're seeing
Speaker 9: a lot of the contested you know, the violations. We
Speaker 9: have not seen major violations apply, you know to Beyroot,
Speaker 9: which I think if you did see that, what would
Speaker 9: indicate a real collapse of the seasfire.
Speaker 3: What are we hearing out of our own security operations,
Speaker 3: our own intelligence out of the White House in regards
Speaker 3: to that, or we haven't heard maybe much of anything yet.
Speaker 9: Well, I mean the big thing is I mean the
Speaker 9: US put, as as I mentioned, a lot of time
Speaker 9: and effort and frankly credibility into getting this ceasefire. So
Speaker 9: it is very much in their interest to try to
Speaker 9: keep this thing from escalating much farther and keep it
Speaker 9: in place. This is something that President Biden really wants
Speaker 9: to keep in place through the end of his term
Speaker 9: in hopes that then it would put pressure on Hamas
Speaker 9: and Israel to come to a ceasefire in the Gaza Strip.
Speaker 9: So it is very much in their interest to keep
Speaker 9: this thing going. They do not want this to fail.
Speaker 9: So what you can expect to see in the next
Speaker 9: couple of days is going to be a ton of
Speaker 9: pressure on both Israel and Hezballah by the US and
Speaker 9: other mediators involved in this action to really tamp things
Speaker 9: down and not let these tit for stat tat strikes
Speaker 9: get any worse.
Speaker 3: Him and I are going back and forth because we're like,
Speaker 3: there's one more thing we need to ask you, and
Speaker 3: I feel like when you think about pressure, I think
Speaker 3: about tim the President elect.
Speaker 4: Yeah, well, Donald Trump posting just at the same time
Speaker 4: we learned that Israel is actually doing this. He posted
Speaker 4: about the Middle East hostages on True Social He said
Speaker 4: there will be all hell to pay if the hostages
Speaker 4: are not released by January twenty I think called on
Speaker 4: the hostages to be released in the Middle East. Right now,
Speaker 4: How does this complicate things or not complicate things?
Speaker 9: Well, I mean it's it's very interesting because the hostage
Speaker 9: situation applies to a different situation, which is in the
Speaker 9: Gaza Strip, and so that.
Speaker 4: Is it is it that different? Well, it's all I mean,
Speaker 4: it's a two front it's a several front war.
Speaker 9: Sure, that's true. Though the issue there is that a
Speaker 9: threat like that would not necessarily apply to Hezbollah because
Speaker 9: they don't have any hostages that they have worked in
Speaker 9: support of Hummas. But I mean, you're right in the
Speaker 9: sense that when when President elect Trump issues a threat
Speaker 9: like that, it certainly causes people to stand up and
Speaker 9: take notice and question, Okay, what's going to be coming
Speaker 9: down the pike. It's that sort of this this idea
Speaker 9: they have escalate to de escalate. The question is is
Speaker 9: this bluster or is this just something that is he's
Speaker 9: going to actually take seriously and potentially launch some sort
Speaker 9: of strike once he becomes president.
Speaker 3: All right, Well, as we said, you know, it's kind
Speaker 3: of a two steps forward, one step back, it always
Speaker 3: feels like.
Speaker 6: But a lot of moving pieces to this. Nick, you're jem.
Speaker 6: Thank you so much.
Speaker 3: Nick Bottom, Bloomberg News US National Security Team Leader, and
Speaker 3: you can read the latest just check it out at
Speaker 3: Bloomberg dot com or of course, on the Bloomberg terminal.
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Speaker 6: All right.
Speaker 3: Not sure exactly how to set up this story for
Speaker 3: our Bloomberg BusinessWeek team other than it is an incredible
Speaker 3: deep dive by Bloomberg Jackie Devallos and Sophia Alexander.
Speaker 6: It's about someone.
Speaker 3: Who probably is about to become maybe a household name,
Speaker 3: and not for a good reason. It's a former billionaire
Speaker 3: now disgrace tycoon. His name is Greg Glenberg. He built
Speaker 3: a network of egg donors and surrogates and is now
Speaker 3: facing as many as thirty years in prison. There's some legal,
Speaker 3: different charges. There's a lot to unpack here, so let's
Speaker 3: get to it. Bloomberg News Technology Report, Jackie Devallos joining
Speaker 3: us from our Washington d C.
Speaker 6: Jackie.
Speaker 3: Every time I turned around with Tim, he was reading
Speaker 3: the story and he's like, leave me alone, Leave me alone,
Speaker 3: because it was just unbelievable. I do feel like we're
Speaker 3: watching a little bit of a streaming.
Speaker 6: Series reading your story. Who is Greg lin Berg.
Speaker 3: How did he and this story get on yours and
Speaker 3: Sophie's Sophie Alexander's radar.
Speaker 1: Well, he might actually be a well known quantity if
Speaker 1: you've been a Bloomberg reader and listener over the last
Speaker 1: couple of years. He made his name and the insurance business,
Speaker 1: and not really for a good reason.
Speaker 6: He built his.
Speaker 1: Wealth by amassing this empire of insurance companies that then
Speaker 1: got him in trouble. He was convicted of bribery and
Speaker 1: some fraud charges. He actually went to jail a couple
Speaker 1: of years ago for the bribery charges. He wanted to
Speaker 1: basically get some preferential treatment in North Carolina, where some
Speaker 1: of his companies were based. He got caught for it
Speaker 1: by the FBI and went away for a couple of
Speaker 1: years in prison, but got out and kind of this
Speaker 1: procedural issue with the jury instruction, so basically he was
Speaker 1: able to kind of, you know, come out as a
Speaker 1: free man. All the while this was happening, and even
Speaker 1: before he went to jail, he had these aspirations of
Speaker 1: having upwards of fifty children, and what he is known
Speaker 1: for kind of in the business community, really had nothing
Speaker 1: to do with what he was doing in his personal life.
Speaker 1: But what we were able to uncover Sophie and I,
Speaker 1: you know, she is a reporter that knows billionaires, knows
Speaker 1: how they think, and I really knew kind of the
Speaker 1: fertility clinic side of things. I had done some reporting
Speaker 1: on a company called kind Body last year and this
Speaker 1: came on our radar as a kind of a combination
Speaker 1: of those two reporting threads. But we had no idea
Speaker 1: just how deep his baby project really went. Well.
Speaker 4: That firm that you mentioned is one of the two
Speaker 4: that's implicated in a scheme. Let's back up for a second.
Speaker 4: We're going to get to sort of the intricacies here.
Speaker 4: But why would he want fifty kids and why would
Speaker 4: you want to do this through IVF Because there's some
Speaker 4: custody issues here that you detail in the story.
Speaker 1: That's right. He has three children with an ex wife
Speaker 1: that he had, you know, when he was married, and
Speaker 1: there was kind of an ugly custody battle there. And
Speaker 1: when we sat down with him to interview him, he
Speaker 1: was fairly forthcoming about the reasons why kind of vacillated
Speaker 1: between well, you know, I don't really want to lose
Speaker 1: kids in a custody battle, which is why I wanted
Speaker 1: to have them on my own. He wasn't, you know,
Speaker 1: hiding the fact that he used a network of egg donors,
Speaker 1: but then again, he wasn't totally forthcoming about how many
Speaker 1: were involved. Another reason he you know, he stated was
Speaker 1: that he wanted to preserve civilization, this responsibility to populate
Speaker 1: the earth. And we recognized a lot of those threads
Speaker 1: from you know, especially Sophia Alexander's reporting on Elon Musk
Speaker 1: and other billionaires who are kind of obsessed with this
Speaker 1: kind of pro natalist way of thinking, and Greg Lindberg's
Speaker 1: goals really echoed that that goal as well. And you know,
Speaker 1: the other thing that kind of came up is that,
Speaker 1: you know, I don't think I don't think a lot
Speaker 1: is known about what it takes to build a family
Speaker 1: in this way. We typically think of like a couple
Speaker 1: walking into a fertility clinic that can't conceive, not necessarily
Speaker 1: a guy who's basically trying to have as many children
Speaker 1: as possible on his own, and yeah, you know, there's
Speaker 1: the issue of custody. He shares some children with this
Speaker 1: woman who kind of served as a recruiter for him,
Speaker 1: but she's not allowed back in the United States. So
Speaker 1: eight children are currently in his care in Tampa while
Speaker 1: he's sitting in jail waiting to be sentenced for these
Speaker 1: larger crimes. And that's really what's at the core of
Speaker 1: the story is you know, where will these children end up?
Speaker 1: What happens to them? And ultimately did doctors know that
Speaker 1: this was a possibility.
Speaker 6: I don't even know where to begin.
Speaker 3: It's just kind of as I like to say, a wait,
Speaker 3: what moment I want to go back to. You talked
Speaker 3: with Lindburg earlier this year. Tell us about that conversation.
Speaker 3: What you wanted to know, why he agreed to do
Speaker 3: the interview, what what was I'm just curious how you
Speaker 3: got him to talk to you.
Speaker 1: Well, he has a pretty open presence online if you
Speaker 1: google Greg Lindberg dot com. He talks a lot about longevity.
Speaker 1: After his legal saga, he you know, he's currently waiting
Speaker 1: to be sentenced, but at the time over you know,
Speaker 1: in the spring, he was posting YouTube videos about kind
Speaker 1: of his new project, which is all about wellness and
Speaker 1: how to get younger and stay young. And you know,
Speaker 1: he posts a lot about these things and we were
Speaker 1: interested in that. I had gotten a tip about kind
Speaker 1: of his baby projects separately, but it really seemed like
Speaker 1: these two things were linked, and so he wanted to
Speaker 1: talk about his longevity company called Longevity Labs, and had
Speaker 1: a phone call with him. Then he invited us down
Speaker 1: to Tampa where he lives, and this is where we
Speaker 1: really got to see him in his element. He came
Speaker 1: in with security guards. He you know, has this kind
Speaker 1: of very intimidating quality to him. His eye contact was
Speaker 1: extremely intense, and you know, at first he was fairly
Speaker 1: open about how he built his family through IVF, but
Speaker 1: started to kind of clam up a little bit once
Speaker 1: he almost like heard himself kind of talking about the
Speaker 1: unorthodox nature of it. And we were pretty forthcoming that, like, hey,
Speaker 1: sounds a lot like this other guy that we've written about,
Speaker 1: Elon Musk. But you know, that's kind of what got
Speaker 1: the I think it cracked it open for us that
Speaker 1: this was real and that there were certainly a lot
Speaker 1: of women that you know, he didn't want to talk about.
Speaker 1: But we had to kind of piece those those pieces
Speaker 1: together because it's an incredibly important part of the story,
Speaker 1: which is the exploitation involved. And while this might have
Speaker 1: been you know, a goal of his there were women
Speaker 1: whose lives were impacted by how he carried this out.
Speaker 7: So let's talk a little bit about that.
Speaker 4: How he carried this out, who was involved, how Instagram
Speaker 4: was used, and what women who ultimately did donate their
Speaker 4: eggs to lind Bergh were told versus what they ended
Speaker 4: up getting and what he ended up doing.
Speaker 1: The first in the first stage of the baby project,
Speaker 1: Greg Glenberg really targeted blonde, blue eyed, green eyed model types.
Speaker 1: There were matchmaking services that he used, There were kind
Speaker 1: of boozy parties that he threw in his huge yacht.
Speaker 1: There were you know, reality TV stars, Netflix stars, I mean,
Speaker 1: you know, very very like a specific type of woman
Speaker 1: that he had in mind. He had this kind of
Speaker 1: obsession with Arian looks and the German quality to things.
Speaker 1: He himself obviously is red hair, but he really wanted
Speaker 1: to have you know, blonde, blue eyed boys and super
Speaker 1: specific and for some of these women, you know, many
Speaker 1: were vulnerable. There there was one who was not, you know,
Speaker 1: from American. There were several actually who were Eastern European
Speaker 1: vulnerable in many ways because you know, they didn't know
Speaker 1: what they were getting themselves into. He promised them money,
Speaker 1: you know, promises that they would be in the child's life,
Speaker 1: that they will build a home together, and was kind
Speaker 1: of manipulating them in a way that, you know, if
Speaker 1: they didn't go through with this procedure, that he would
Speaker 1: have cut them off basically and cut the relationship off.
Speaker 1: There were other women that had no idea that you know,
Speaker 1: he who he was, his recruiter slash fiance. You know,
Speaker 1: she was going on Instagram and basically finding these women
Speaker 1: and offering them hundreds of thousands of dollars to donate
Speaker 1: their eggs, and they thought, you know, wow, my eggs
Speaker 1: are just going to go to this you know, nice
Speaker 1: family who can't have kids, and they weren't told the
Speaker 1: truth about Greg Linberg, his legal troubles and the fact
Speaker 1: that he was sitting in jail while some of this
Speaker 1: was happening.
Speaker 3: Jackie, your story is definitely about linn Berg and everything
Speaker 3: that kind of happened around him, But it's also about,
Speaker 3: as you guys you know so well, right, the booming
Speaker 3: ten billion dollar fertility industry here in America, and you
Speaker 3: guys have been writing a lot about this industry. It
Speaker 3: continues to grow. There's demand out there. We know that
Speaker 3: Tim and I talk about it a lot on air.
Speaker 3: It also shows though, what ultimately the lack of transparency
Speaker 3: over it and kind of rules governing. Is that kind
Speaker 3: of the other side of the story because I think
Speaker 3: we're listening and saying, okay, some of this happens, like
Speaker 3: tell us kind of where this breaks down, where the
Speaker 3: law has been broken.
Speaker 1: Potentially this is the big picture. Greg Lin Burton might
Speaker 1: go to prison likely will, but anyone else can pull
Speaker 1: this off because a lot of this was actually legal.
Speaker 1: There is very little regulation when it comes to the
Speaker 1: fertility industry. It's this honor system. They're a self regulated
Speaker 1: industry essentially that has guidelines that doctors purport to follow.
Speaker 1: Clinics say, you know, these are the guidelines of the
Speaker 1: American Society of Reproductive Medicine ASRM. It's a trade group
Speaker 1: that represents doctors across the country, and they say that
Speaker 1: follow these these guidelines. But no one's following up on it,
Speaker 1: no one's policing it. The government is largely stayed out
Speaker 1: of regulating fertility because it's really politically fraught, as we
Speaker 1: know with reproductive rights just kind of at the core
Speaker 1: of you know, this this debate, and you know, fertility
Speaker 1: is usually thought of as like a way that you
Speaker 1: know someone. It's like a miracle, you know, for couples
Speaker 1: that haven't been able to have children. But as our
Speaker 1: story shows, depending on what your intentions are and how
Speaker 1: wealthy you are, it can also be used as a
Speaker 1: tool for exploitation. And two of the clinics are really
Speaker 1: well known. Kind Body acquired this other Chicago clinic that
Speaker 1: started it, but it also continued after they acquired them HRC.
Speaker 1: It's a major fertility network on the West Coast. A
Speaker 1: doctor who's treated celebrities was the one that Lindbergh preferred,
Speaker 1: and he was open about this, and we were able
Speaker 1: to kind of piece together some of the concerns and
Speaker 1: say clinic workers actually had specifically a kind Body with
Speaker 1: what they were doing. And you know that takes a
Speaker 1: lot of courage for for people who kind of see this,
Speaker 1: you know, playing out and and I think what our
Speaker 1: story does is, you know, at the end of the day,
Speaker 1: these guidelines are there for a reason, but you know,
Speaker 1: no one's really following up to see if doctors and
Speaker 1: clinics are actually following them.
Speaker 4: Hey, Jackie quickly, and then I'm gonna just encourage everyone
Speaker 4: once again to go and read this story. It's the
Speaker 4: most read on the terminal today for a reason. I
Speaker 4: could not put it down. He participated with you to
Speaker 4: a certain extent, but then cut off communication with you
Speaker 4: and the reporting team behind this, and then what happened.
Speaker 1: And there's still an ongoing, uh, you know, claim of defamation.
Speaker 1: He he, you know, alleged that we were interfering with
Speaker 1: a relationship with one of his surrogates. You know, obviously
Speaker 1: it's it's a touchy situation for him, and we were
Speaker 1: pretty forthcoming about out the direction of the story once
Speaker 1: we really cleared up the facts. But right now he's
Speaker 1: sitting in a county jail in North Carolina waiting to
Speaker 1: be sentenced. He was denied bail multiple times this last month,
Speaker 1: and we're not really sure where his story will end up.
Speaker 1: But you know, we stand by our reporting and you know,
Speaker 1: hope that folks out there can read it.
Speaker 3: It's an amazing read, unbelievable. Jackie, thank you so much.
Speaker 6: I'm really glad we were able to go through with you.
Speaker 3: Jackie Devalos, she's Bloomberg News Technology reporter of this story
Speaker 3: by she and Sophie Alexander of Bloomberg News.
Speaker 6: Check it out. At Bloomberg dot com and also on
Speaker 6: the Bloomberg terminal. Jackie, thanks, you're.
Speaker 2: Listening to the Bloomberg Business Week podcast. Catch us live
Speaker 2: weekday afternoons from two to five pm Eastern Listen on Apple.
Speaker 7: Car Play and then brought auto with a Bloomberg.
Speaker 2: Business app, or watch us live on YouTube.
Speaker 7: Well, some news out of China.
Speaker 4: US is unveiling these new restrictions on China's access to
Speaker 4: vital components for chips and AI. It escalates this campaign
Speaker 4: to contain Beijing's tech ambitions, but it stops short of
Speaker 4: earlier proposals that would have sanctioned more key Chinese firms.
Speaker 3: All right, so curious about all of this and what
Speaker 3: our next guest has to say.
Speaker 6: He's Ben Harberg.
Speaker 3: He thinks a lot about this region and the latest
Speaker 3: when it comes to investing in China. Ben is found
Speaker 3: in portfolio manager at Core Values Alpha. His team, by
Speaker 3: the way, manages the CBA Great China Growth ETF TICK
Speaker 3: or as CGROO.
Speaker 6: This year up just shy of ten and a half percent.
Speaker 3: It is down twenty percent though since October seventh, been
Speaker 3: joining us from RIOD.
Speaker 6: You're always somewhere. It's the wee hours.
Speaker 7: So are either staying up late or getting up super early?
Speaker 7: For us?
Speaker 6: What is it?
Speaker 1: Are you wait?
Speaker 7: What's going on in real?
Speaker 6: Look at you exacts?
Speaker 7: Are you on vacation a work trip? What's going on?
Speaker 10: I'm speaking at the World Football Summit here?
Speaker 7: A right, that's pretty cool.
Speaker 10: Iota on her team in Spain. So I talk a
Speaker 10: lot about my side. Hustle is running soccer teams.
Speaker 4: How much time do you spend doing that versus managing
Speaker 4: the fun?
Speaker 7: And can you do both? Obviously you could do both
Speaker 7: if you delegate.
Speaker 10: Well, I'd probably spend five percent of my time on
Speaker 10: football related.
Speaker 7: How much do you want to spend on soccer?
Speaker 11: I'm trying to cound turn the corner.
Speaker 10: Then I'll be all in on that, But no, I
Speaker 10: would love to spend more time. We'll slowly edge towards
Speaker 10: that as my net worth creepsire.
Speaker 3: I guess, so, Ben, is it easier to attract investors
Speaker 3: to invest in a sports team or soccer team than
Speaker 3: it is to get investors to invest in China?
Speaker 6: I ask you this, and I know we talk about
Speaker 6: this a lot.
Speaker 3: I mean, your fun is about seven point three million
Speaker 3: dollars in assets under management so I'm assuming you would.
Speaker 6: Like for it to be a lot more. So help
Speaker 6: me around here.
Speaker 10: You know, we have two over two billion dollars on
Speaker 10: the private side, So this is you know, this, this
Speaker 10: public strategy is newer for us, and it's a bit
Speaker 10: of a trial balloon, and we'll be adding new products
Speaker 10: into it shortly in the next couple of months. So
Speaker 10: you know, it's kind of a process of seeing what
Speaker 10: sticks to the wall on the ETF side, but we've
Speaker 10: we've obviously done well on the on the private side,
Speaker 10: I'd say today.
Speaker 7: It's probably easier to get people to invest in sports.
Speaker 10: Sports are hot right now, European football, particularly because the
Speaker 10: valuations are so low relative to their US peers. It's
Speaker 10: a highly inefficient industry and it's also one that's really
Speaker 10: fun to get involved with, and so you've seen some
Speaker 10: mega funds raised over the last few years in this
Speaker 10: space in terms of.
Speaker 3: The private investors. As you said over I think two billion,
Speaker 3: you said, is it the same similar investment strategy in
Speaker 3: terms of what you're trying to do this fun in particular,
Speaker 3: you look for those kind of tech enabled companies in
Speaker 3: Greater China, the Mainland, Taiwan, Hong Kong. Is it the
Speaker 3: same type of investing or is it something different that
Speaker 3: you're doing on the private side.
Speaker 10: It's obviously much earlier stage, so it's venture and growth investments.
Speaker 10: So company that are maybe you know, series seed, Series A,
Speaker 10: and then some pre IPO stuff and then obviously ETF
Speaker 10: is all public.
Speaker 4: Okay, So let's talk a little bit about now that
Speaker 4: we've sort of established the grounding stuff here, let's talk
Speaker 4: a little about opportunities that you see because we actually
Speaker 4: haven't had a chance to speak to you since the
Speaker 4: I don't want to call it reelection, but since President
Speaker 4: elect Donald Trump won back earlier last month, how does
Speaker 4: that change the outlook for China? Because on one hand,
Speaker 4: he talks incredibly tough about China. He implemented, he implemented
Speaker 4: tariffs that then the Biden administration kept, and he's talked
Speaker 4: about increasing tariffs on China when he takes office.
Speaker 7: How are you thinking about all this? I think you.
Speaker 10: Should be long short term book bearish and long term
Speaker 10: you know, optimistically or cautiously bullish, let's say. And I
Speaker 10: think that's because you're going to hear a lot of
Speaker 10: headlines and you're going to see a lot of news
Speaker 10: about very high tariff numbers and a whole saloop China
Speaker 10: hawks brought into the administration. But uh, and so I
Speaker 10: think that'll mean so really tough dealing at a very
Speaker 10: high bar set for the Chinese that they're going to
Speaker 10: have to deal with as they grapple with tracking investors
Speaker 10: back to the market. But I think in the long
Speaker 10: term you can be slightly bullish because Trump is a businessman,
Speaker 10: He's pragmatic, and there are things that can be done
Speaker 10: from the Chinese side to assuage some of the issues
Speaker 10: that he cares most about. He cares about the you know,
Speaker 10: the the reindustrialization of America, reshoring jobs, protecting American industries,
Speaker 10: and there are things that China can give up in
Speaker 10: an effort to appease that and to support that, and
Speaker 10: when they do, that can lead to a much more
Speaker 10: pragmatic dynamic in the relationship, rather than what you face
Speaker 10: with the Democrats, which is a very intractable dynamic where
Speaker 10: there's a whole sleet of issues that they care very
Speaker 10: much about that that that the China will never be
Speaker 10: able to reconcile and overcome, and therefore it just kind
Speaker 10: of draws on indefinitely as a kind of shell game.
Speaker 3: Hey Ben, you know one of the stories on the
Speaker 3: Bloomberg today we talked about the Chinese ten year yield
Speaker 3: dropping past the key psychological milestone of two percent. Was
Speaker 3: that a record low traders essentially kind of ramping up
Speaker 3: their bets that authorities would ease monetary policy further to
Speaker 3: bolster the week economy. When you think about China, what
Speaker 3: is more important to making it more investible for investors?
Speaker 3: Is it the US China relationship, Is it China figuring
Speaker 3: out it's real estate overhang, or is it something else?
Speaker 10: The key number for US is consumer behavior in China
Speaker 10: the key indicator. Everything else kind of is affected by that.
Speaker 10: So when you know geopolitics affect stock prices and valuations,
Speaker 10: they undercut people's home you know, kind of their savings,
Speaker 10: their portfolio, and therefore they consume less. And likewise, if
Speaker 10: real estate prices are falling and homes are going at
Speaker 10: lower prices and they were previously, again that undercuts people's
Speaker 10: confidence in the market. So all these measures to stabilize
Speaker 10: the property market to assuaye some of the geopolitical tensions,
Speaker 10: albeit very very minute, are in an effort to get
Speaker 10: the Chinese consumers back to the market, because the only
Speaker 10: way that China grows and the way that it survives,
Speaker 10: the way that it performs, the way people were hoping
Speaker 10: it would, you know, several years ago, is to establish
Speaker 10: it as a domestic consumption market and enable it to
Speaker 10: absorb a lot of these products that they're exporting outward,
Speaker 10: because they simply cannot afford to continue to run trade
Speaker 10: deficits with every country or state surpluses. If you're sitting
Speaker 10: on the Chinese side with every country around.
Speaker 7: The world I've been a few years ago.
Speaker 4: If we were talking to you, you know, the conversation
Speaker 4: we'd be having is, so, you know, Chinese is going
Speaker 4: to overtake the US as the largest economy in the world,
Speaker 4: and it's going to do that very soon. That narrative
Speaker 4: certainly has shifted. But do you think that does end
Speaker 4: up happening eventually?
Speaker 10: I think the numbers would say it does. And just again,
Speaker 10: the efficiency of the Chinese economy is still quite low.
Speaker 10: There's there's a lot more that can still be done
Speaker 10: to brew their efficiency. Uh, they are very well positioned
Speaker 10: in what I would call kind of the fifth Industrial Revolution,
Speaker 10: right or you know, with you with all the types
Speaker 10: of key hardware and even consumer facing software that's really
Speaker 10: redefining the way we engage with technology. So mobile first,
Speaker 10: everything from entertainment, payments, commerce level, and then of course
Speaker 10: all of the leadership across electric vehicles, you know, mobile handsets,
Speaker 10: et cetera. So my view is that China's well positioned
Speaker 10: for the this new age and particularly for digitally native consumers.
Speaker 10: But there are a lot of things that are undermining that.
Speaker 10: The the anemic and population growth in China, I think,
Speaker 10: the lack of turnover within the Chinese Central Party and
Speaker 10: changing regimes as they had historically, and and just an
Speaker 10: overall kind of saturated economy or under and a higher
Speaker 10: saturation than was previously.
Speaker 11: I think there a faster.
Speaker 10: Situation than previously would have been predicted, is undermining the
Speaker 10: ability for that, uh, that prophecy to come true quickly.
Speaker 3: Hey listen, I'm looking at the holding has been in
Speaker 3: your fun ten Cent Jamie, p d D.
Speaker 6: Chip dot Com some of them b I d uh.
Speaker 3: How often are you buying selling moving these names around?
Speaker 3: How are you like thinking about what you want to
Speaker 3: have in this portfolio.
Speaker 10: Our view was that China was too dynamic a market
Speaker 10: to be passively traded. So we thought one of our
Speaker 10: differentiers would be that we were active, and so that
Speaker 10: enables us to move in and out for particularly across
Speaker 10: share classes, so a shares as shares or a shares
Speaker 10: the you know, the ad rs and the eighth shares,
Speaker 10: and we think that in this dynamic as well, you
Speaker 10: need to be moving in and out of those because
Speaker 10: you're going to see the the ad rs get hit
Speaker 10: every now and again, but the main land indexes are
Speaker 10: flying and you know, retail buyers are pouring into those ingles.
Speaker 10: So I do think that you've got to be active.
Speaker 10: And then what we're trying to do is position ourselves
Speaker 10: in that product for what we think will be the
Speaker 10: you know, the immediate knock on effects of some of
Speaker 10: these stimulus policies which will help improve some of the
Speaker 10: domestic consumption narratives. And so therefore, you know, those those
Speaker 10: consumer facing names that we put at the top of
Speaker 10: the holdings will probably see benefit the fastest.
Speaker 4: Ben What stimulus policies do you think are forthcoming that
Speaker 4: we don't like? What are you anticipating that we haven't
Speaker 4: heard about yet?
Speaker 10: You know, I don't know if I point to anything
Speaker 10: really specific. And I still think that a lot of
Speaker 10: the stimulus is more narrative than it is. It's kind
Speaker 10: of more form than function in the sense that it's
Speaker 10: it's not truly having a material impact on the bottom line.
Speaker 10: The thing we're looking for is just that kind of
Speaker 10: sustain momentum that people within China and externally feel that
Speaker 10: the government is serious about growth, furious about cleaning out
Speaker 10: some of the bad debts, some of the you know,
Speaker 10: things that it has under his control, and of course
Speaker 10: the geopolitics are less under its control today than ever before,
Speaker 10: and that those would then almost kind of jump start
Speaker 10: like sparking an engine for a spacecraft, but spark the
Speaker 10: engine of consumer growth, and that people would kind of
Speaker 10: return to the retail, return to High Street, start spending a.
Speaker 7: Little bit more because the money is there.
Speaker 10: I mean, we're sitting there in those bank accounts twenty
Speaker 10: one trillion and counting of household savings and dollars, much
Speaker 10: more than is in the US, and so there's a
Speaker 10: huge potential to be unlocked. But the people have to
Speaker 10: kind of feel that, and so I think they were
Speaker 10: holding back of waiting for Trump and hopefully you'll see
Speaker 10: more things from here.
Speaker 3: Hey, just got one time for another question, one more
Speaker 3: question forty seconds or so left here and going back
Speaker 3: to your holdings. I don't think I see TSM Taiwan Semiconductor.
Speaker 6: Is there reason? Why? Is it just too big or
Speaker 6: what I mean? It's up eighty seven percent this year.
Speaker 10: We've moved in and out of it, and we even
Speaker 10: sometimes have had Nvidia and some of the other companies
Speaker 10: that still have significant revenue coming out of China. But
Speaker 10: in this current on the portfolio, it's not there.
Speaker 7: All right.
Speaker 3: Good to know, good to know, So appreciate it, Ben,
Speaker 3: Thank you so much. Go get some sleep, Ben, Harvard,
Speaker 3: play some.
Speaker 4: Soccer, talk about some soccer. Wait, wait, wait, Ben, we
Speaker 4: have like twenty seconds. What's your team? What's your team
Speaker 4: in Spain called.
Speaker 10: It's called Cotti's Oh yeah, oh it's it's glorious, mister sherry,
Speaker 10: but one plug. We have sherry just next door. But
Speaker 10: some of the best food in the world. The oldest
Speaker 10: continuously inhabited city in Western Europe. Our stadium is one
Speaker 10: hundred and fifty meters from the beach. Just a glorious
Speaker 10: place for football.
Speaker 6: Wait, so are you there for the sports? Are you
Speaker 6: just there for the view and the food and everything.
Speaker 3: Yeah, everything all in all in all right, Ben Harberg,
Speaker 3: founder and portfolio manager at Core Values Alpha, joining us
Speaker 3: from Riod on this Monday, December second.
Speaker 6: All right, folks, we got about twenty six minutes to
Speaker 6: go into the closing down.
Speaker 7: I'm thinking about Spain.
Speaker 6: I want to look at this map of the soccer
Speaker 6: teams where this place is umbrother mac.
Speaker 7: A journal.
Speaker 8: Now about you let me drive?
Speaker 10: No no, no, no, please, honey please, I'll do the drive gravels,
Speaker 10: excuse mate, I want to try it.
Speaker 4: It's a good question time.
Speaker 7: This is the drive to the clothes.
Speaker 11: We'll buy around Yethern.
Speaker 7: On Bluemberg Radio.
Speaker 6: All right, everybody, TikTok.
Speaker 3: We are about nineteen minutes away from the closing bell,
Speaker 3: and we have seen the next one hundred just uh,
Speaker 3: pretty much hovering you near its highs of the session.
Speaker 3: So as we just heard about about two hundred and
Speaker 3: forty two points, so good for a game of almost
Speaker 3: one point two percent s and p just call it
Speaker 3: a little bit higher. But I do know that we've
Speaker 3: been hovering near some records throughout the days. We'll see
Speaker 3: whether or not we close at a record record.
Speaker 6: Did you close on at highs on on Friday?
Speaker 7: We did?
Speaker 6: I really kind of tuned out.
Speaker 7: Sorry so offended it.
Speaker 6: I did think about you. I did the about you
Speaker 6: while you were doing your duty here?
Speaker 7: What do you say of thoughts? And there's like if some.
Speaker 6: Bets for candy nuts? We don't have fun at Christmas?
Speaker 7: Oh okay.
Speaker 6: It's a friend of mine in college. She used to
Speaker 6: say it all the time.
Speaker 4: Well, finally we're getting to Christmas season we are. Yeah,
Speaker 4: so you know it's even more apt. Hey, uh no,
Speaker 4: good segue here. But we always like to check in
Speaker 4: with Jimmy Lee. He's the founder and CEO over at
Speaker 4: the Wealth Consulting Group. They've got about five billion dollars
Speaker 4: in assets under management.
Speaker 7: Usually he's in Las Vegas.
Speaker 4: Sometimes he graces us with his presence here at the
Speaker 4: Bloomberg Interactor Brokers studio in New York. Today he's in
Speaker 4: Costa Rica. Jimmy, what are you doing in Costa Rica.
Speaker 8: I'm on a little personal vacation with some family, so
Speaker 8: enjoying the weather.
Speaker 6: All right, Well, it's a beautiful place, it is.
Speaker 4: I'm sorry that you're stuck in your hotel room zooming
Speaker 4: with us on this Monday afternoon. I hope you you know,
Speaker 4: we won't keep you for long and you can get
Speaker 4: back down out there in Costa Rica.
Speaker 3: It's the food, it's the environment. They don't spend money
Speaker 3: on military. It's really cool. But the monkey's right there
Speaker 3: in the trees. I still like, we still I'll get
Speaker 3: up early and we call it monkey TV. We just
Speaker 3: sit there and watch the monkeys waking up.
Speaker 8: It was on the beach this morning, Carol, and they
Speaker 8: were right above us having fun, hanging out.
Speaker 11: But I would always go into my room to do
Speaker 11: your show. I love your show.
Speaker 3: Okay, that's Jimmy saying, all right, guys, enough about Coaster Rica.
Speaker 6: Can we talk about the market? Where are we listen?
Speaker 3: I mean, by many accounts, you know, certainly the US
Speaker 3: equity trade is going to you know, unless something happens
Speaker 3: in this last month, it's going to be a.
Speaker 6: Pretty good year. What's your take?
Speaker 3: Two good years now we've seen four stocks. Sometimes it's
Speaker 3: hard to keep that momentum going after two up years.
Speaker 3: What are you thinking about here in terms of what's
Speaker 3: the most investable part of the US market?
Speaker 6: What is not?
Speaker 11: Well, that's an interesting question.
Speaker 8: And as I've been on a guest on your show
Speaker 8: for a long time. Now, you know that I've been
Speaker 8: fairly bullish on equities for the last years, and in
Speaker 8: the timeframe where a lot of economists were just predicting
Speaker 8: a recession primarily I think because of the data they
Speaker 8: were looking at historically suggested that we're going to face
Speaker 8: the recession.
Speaker 11: Which hasn't occurred.
Speaker 8: Of course, tech doocs have led the way, the Max
Speaker 8: seven have you been a big part of the story
Speaker 8: on all the major indexes going up as much as
Speaker 8: they have.
Speaker 11: But recently we've seen the market broad now.
Speaker 2: You know, the.
Speaker 8: Sectors that we've talked about that we're not participating are
Speaker 8: participating now, like finance, financial sector, industrials, you know, small
Speaker 8: caps in terms of market.
Speaker 11: Cap are doing much better now.
Speaker 8: So across the board you're seeing a lot of different
Speaker 8: areas participate, and I think recently that's because we've had
Speaker 8: so much money sitting on the sidelines.
Speaker 11: We still do. One of the things that we track
Speaker 11: on our Investment Committee.
Speaker 8: Weekly is the amount of cash going into ETFs and
Speaker 8: mutual funds, into equities, fixed income and money markets. And
Speaker 8: you know, people keep putting money into cash, believe or not.
Speaker 8: I think it's probably from a lot of the treasuries
Speaker 8: are coming to do.
Speaker 11: And they're not sure what to do with it yet.
Speaker 8: But the people that want to participate, I think, I think,
Speaker 8: you know, they're looking for pockets of the market that
Speaker 8: are less expensive, like value stocks, like small cap stocks,
Speaker 8: and I do believe that those cyclical sectors or areas
Speaker 8: that we can invest into.
Speaker 11: I also think that bonds now with the yields.
Speaker 8: Climbing back up as they did after the first rate cut,
Speaker 8: I think there's value in bonds too, So I think
Speaker 8: there's a few areas that investors could get value in.
Speaker 4: Why do you think investors are still on the sidelines.
Speaker 8: Well, Tim, I think it's just this uncertainty, and you know,
Speaker 8: I think a lot of people were fooled. You know
Speaker 8: that the five percent treasury was the best place to go.
Speaker 8: Now again, we've talked about this before. For your money
Speaker 8: sitting in checking account deposits that we're not earning any interest.
Speaker 11: That was a great move.
Speaker 8: But for people that took money out of stocks to
Speaker 8: put it into treasuries and money markets, I think we're
Speaker 8: just listening to the headline news and not paying attention
Speaker 8: to you know, maybe what the companies were doing that
Speaker 8: they're invested in in terms of earnings, and you know,
Speaker 8: for the most part, I think a lot of people
Speaker 8: that normal investors, not retail investors, not institutional investors, you know,
Speaker 8: just don't pay enough attention to this.
Speaker 11: And so they look at the headline news and they
Speaker 11: hear a violid recession.
Speaker 8: And while the market's gone up a lot, for a
Speaker 8: lot of Americans, it hasn't felt that great because we've
Speaker 8: had a lot of inflation over the last couple of years.
Speaker 8: So I think the feeling of a bad economy kind
Speaker 8: of maybe overtook their investor. Investor behavior, which is always
Speaker 8: what we fight against as financial advisors, is investors are
Speaker 8: always trying to put a lot of money at the
Speaker 8: tops and selling out when there's a little bit of panic.
Speaker 3: Yeah, no, it's I get it, I get it right.
Speaker 3: We talked about that investor sentiment so important. I mean, ultimately, Jimmy,
Speaker 3: you know, we're just kind of wrapping up an earning season,
Speaker 3: but I think about you know, we go from earning
Speaker 3: season too earning season. But that is really kind of
Speaker 3: our gut check, right, our transparency on really how companies
Speaker 3: are doing when it comes to growing the top line eenses.
Speaker 3: Are they upbeat about spending in the new year. I mean,
Speaker 3: these are the important things that ultimately determine whether or
Speaker 3: not investing in stocks makes sense or at what valuation
Speaker 3: doesn't make sense.
Speaker 8: Yes, And as you know, earnings have been pretty darn good,
Speaker 8: you know, in the face of higher interest rates and
Speaker 8: all the different obstacles that we do have in the economy.
Speaker 8: And you know, certainly there's a little bit of softness
Speaker 8: and a lot of the data that we've seen, whether
Speaker 8: it's manufacturing or even a little bit of softness and
Speaker 8: the employment and data. But for the most parts, I
Speaker 8: think post election, people you know, are thinking that things
Speaker 8: are potentially more hopeful for next year. As you know,
Speaker 8: everybody is going to feel a little bit better when
Speaker 8: interest rates are lower. If you think about the kind
Speaker 8: of you know, interest payments that consumers make, so credit
Speaker 8: card payments, auto loans, mortgages. As rates come down, as
Speaker 8: the tenure comes down and those interest rates on those
Speaker 8: types of consumer debt comes down, I think people are
Speaker 8: going to start to feel a lot better. And I
Speaker 8: think that the jobs situation and the plumbing situation is
Speaker 8: going to remain pretty strong, and so I'm very hopeful
Speaker 8: about about next year. You know that we're we're going
Speaker 8: to be going into an environment with lower rates. I
Speaker 8: think consumer sentiment is going to get better. I think
Speaker 8: the c suite of large companies and small companies can
Speaker 8: be a bit more bullish about cappacks and where they're
Speaker 8: going to invest, and hopefully what we'll see is a
Speaker 8: soft landing. You know that the FED actually does engineer
Speaker 8: soft landing. I would absolutely love to see interest rates
Speaker 8: go lower. I don't think inflation is nearly the problem
Speaker 8: that the headline numbers suggest. You know, if you look
Speaker 8: at what housing, how housing plays into the headline numbers.
Speaker 8: We know that real time rents are lower, and so
Speaker 8: once it starts getting into the numbers, I think things
Speaker 8: will will look better and hopefully twenty twenty five ends
Speaker 8: up being a good year.
Speaker 3: Yeah, I feel like we've got to get into it
Speaker 3: and kind of get a good feel of the policies
Speaker 3: that might come from administration and how that impacts, you know,
Speaker 3: the corporate environment, certainly for those publicly held entities. Jimmy,
Speaker 3: thank you so much, really appreciate being able to check
Speaker 3: in with you.
Speaker 6: Happy New year. If we don't get to you before
Speaker 6: the end of the year, come back to you.
Speaker 3: Jimmy Lee, He's founder and chief executive officer at Wealth
Speaker 3: Consulting Group, joining us on this Monday in December from
Speaker 3: Costa Rica, where I'm assuming it's a little warmer Costa Rica.
Speaker 7: I don't know if it's warmer than Las Vegas.
Speaker 6: That's the temperature.
Speaker 7: I'm looking it up right now. You know what it is.
Speaker 7: It's about seventy degrees there. Yeah, so it's kind of perfect.
Speaker 7: It's kind of perfect. Yeah.
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