WEBVTT - Rubenstein Provides an Investing Master Class 0:00:00.080 --> 0:00:03.640 You're listening to Bloomberg Business Week with Carol Messer and 0:00:03.720 --> 0:00:08.440 Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Earlier this week, 0:00:08.560 --> 0:00:11.360 US stocks posted their biggest drop in two years. Uh. 0:00:11.400 --> 0:00:13.680 This was after the latest CPI report was surprised to 0:00:13.680 --> 0:00:16.599 the upside the silver lining. Maybe it's a good time 0:00:16.600 --> 0:00:18.680 for savvy investors to buy the dip. At least that's 0:00:18.680 --> 0:00:21.880 what David Rubinstein told our Bloomberg TV colleagues the day 0:00:21.880 --> 0:00:24.159 after that massive sell off. His comments, I've got a 0:00:24.200 --> 0:00:27.520 lot of play online because who doesn't want investing tips 0:00:27.520 --> 0:00:29.720 from the best in the business. And luckily for us, 0:00:29.720 --> 0:00:32.240 he's back with some more tips. David Rubinstein is founder 0:00:32.240 --> 0:00:34.600 and co executive chairman of Carlisle Croup. He's also the 0:00:34.640 --> 0:00:37.200 host of Bloomberg Wealth on a Bloomberg Television He joins 0:00:37.240 --> 0:00:39.200 us to be a zoom from Washington, d C. David, 0:00:39.240 --> 0:00:41.320 good to have you back with us this afternoon. How 0:00:41.320 --> 0:00:44.240 are you I'm doing fine. Thank you for having me. Yeah, 0:00:44.280 --> 0:00:46.080 thanks so much for joining us. I want to start 0:00:46.080 --> 0:00:48.000 with the markets because I think a lot of people 0:00:48.320 --> 0:00:51.160 are spooked right now. I'm just give us your interpretation 0:00:51.200 --> 0:00:52.920 of what you're seeing when you look at the equity 0:00:52.960 --> 0:00:56.720 markets right now, clearly the markets are not happy with 0:00:56.760 --> 0:01:00.480 the higher inflation numbers, and I think that's a big factor. 0:01:00.640 --> 0:01:03.560 When you have higher inflation, you can expect higher interest rates, 0:01:03.960 --> 0:01:06.400 and the Fed is next week like the increase interest 0:01:06.480 --> 0:01:09.160 rates by seventy five basis points. There's some who think 0:01:09.200 --> 0:01:11.280 it could be a hundred basis points, but I doubt 0:01:11.319 --> 0:01:13.800 that that that that would happen. That would probably really 0:01:13.880 --> 0:01:16.560 hurt the markets much more because that would show the 0:01:16.560 --> 0:01:19.200 Fed is much more nervous about inflation than it has 0:01:19.200 --> 0:01:22.200 said it is, although it has said it's it's worried, 0:01:22.240 --> 0:01:24.280 But I think a hundred basis points would be much 0:01:24.319 --> 0:01:26.480 more than their guidance has been. So if they were 0:01:26.480 --> 0:01:28.319 to do a hundred basis points and market will really 0:01:28.360 --> 0:01:30.680 sell off. In my view, seventy five basis points and 0:01:30.720 --> 0:01:33.360 markets already assuming that's going to happen, so probably not 0:01:33.440 --> 0:01:36.319 a big surprise of the markets. I think the news 0:01:36.319 --> 0:01:38.800 from fed X that you were just talking about probably 0:01:38.840 --> 0:01:41.920 is going to scare people early tomorrow because someone fed 0:01:42.040 --> 0:01:44.800 X is canceling its guidance. That might mean that other 0:01:44.800 --> 0:01:46.920 companies are gonna follow suit, and that might mean earnings 0:01:46.920 --> 0:01:49.240 are gonna be less than people expect. So I think 0:01:49.240 --> 0:01:50.960 markets are gonna be choppy for a while, there's no 0:01:50.960 --> 0:01:53.040 doubt about it. Well and FedEx here is right now 0:01:53.080 --> 0:01:57.040 down about shoppy. But you still think there are opportunities, 0:01:57.120 --> 0:01:59.160 especially when we see the equity side of the markets. 0:01:59.200 --> 0:02:01.840 David a lot that that is a time to enter 0:02:01.920 --> 0:02:06.680 you You stand by that the greatest more fortunes in 0:02:06.720 --> 0:02:09.079 the stock market are generally not made when people see 0:02:09.080 --> 0:02:10.640 a top of the market and they say, now I'm 0:02:10.680 --> 0:02:17.360 going to get in. Generally markets are down and then 0:02:17.440 --> 0:02:19.840 what happens is people say, I think it could go 0:02:19.880 --> 0:02:21.800 down further, and they try to look for the bottom 0:02:21.800 --> 0:02:24.200 of the market. Anybody that's looking for the top of 0:02:24.200 --> 0:02:25.959 the market or the bottom of the market generally is 0:02:25.960 --> 0:02:29.040 on a fool's Errand so markets are shares her off 0:02:29.080 --> 0:02:32.000 now what more than from the peak, and that's a 0:02:32.000 --> 0:02:34.359 pretty good downside. It could go down a little bit more, 0:02:34.440 --> 0:02:36.920 but I don't see another twenty percent down. The markets 0:02:36.960 --> 0:02:39.359 are pretty much near the bottom. They might be five 0:02:39.400 --> 0:02:41.480 percent more to go or maybe a little bit more. 0:02:41.760 --> 0:02:43.280 But I think we know a lot of what's going 0:02:43.280 --> 0:02:45.640 on in the markets now and not likely to see 0:02:45.919 --> 0:02:49.000 big changes. Now the Ukraine Russia situation has had some 0:02:49.040 --> 0:02:52.040 positive news, maybe that work could be over sooner than 0:02:52.080 --> 0:02:56.000 we once thought. And I think uh now m generally 0:02:56.000 --> 0:02:59.280 the inflation situation not under control, but the FED seems 0:02:59.320 --> 0:03:01.160 to be on top of the situation, maybe more than 0:03:01.160 --> 0:03:03.600 it was before. So I'm not expecting we're going to 0:03:03.639 --> 0:03:08.320 see another decline in stock crisis. David, and I want 0:03:08.320 --> 0:03:09.840 to get into your book in just a moment, but 0:03:09.880 --> 0:03:11.800 would you concede that it's safe to say that we 0:03:11.840 --> 0:03:15.440 really don't know kind of how things go on the 0:03:15.440 --> 0:03:17.799 other side of it, considering the pandemic that we're coming 0:03:17.800 --> 0:03:20.200 out of, the amount of stimulus that was pumped in 0:03:20.680 --> 0:03:23.560 to the global economy, that we still don't quite know 0:03:23.639 --> 0:03:25.680 and there's still the same risks, right, we could get 0:03:25.680 --> 0:03:31.160 another variant that sets things back, Um, China still struggling. Uh. Geopolitical, 0:03:31.600 --> 0:03:33.480 as you said, some good news out of Ukraine, but 0:03:33.840 --> 0:03:35.680 it's still a little bit up in the air. Do 0:03:35.720 --> 0:03:38.080 we Is it safe to say we don't quite really 0:03:38.120 --> 0:03:40.760 know how this all plays out? Um? This is what 0:03:40.880 --> 0:03:43.480 lawyers often call a case of first impression, which is 0:03:43.480 --> 0:03:46.240 to say, we have something that's relatively unique in the 0:03:46.280 --> 0:03:49.720 sense that we haven't had five trillion dollars injected into 0:03:49.760 --> 0:03:52.200 an economy quite the way the federal government did and 0:03:52.240 --> 0:03:54.000 then know what the impact is going to be an 0:03:54.000 --> 0:03:56.400 inflation in the markets a year or two later. So 0:03:56.480 --> 0:03:59.440 we had this gigantic injection and to prevent uh A 0:03:59.720 --> 0:04:03.240 set during COVID. We did prevent it recession, but we 0:04:03.280 --> 0:04:05.880 also gave us a lot of inflation. UM. If you 0:04:05.960 --> 0:04:08.760 go back at any time in the market history, you'll 0:04:08.760 --> 0:04:11.160 always fullfind that there are problems. There's never a case 0:04:11.200 --> 0:04:13.160 where people say, you know, everything is looking great and 0:04:13.240 --> 0:04:15.920 actually turns out to be great. It's rarely the case 0:04:16.000 --> 0:04:18.080 that you don't have challenges right now. We have the 0:04:18.160 --> 0:04:21.440 challenges you to discuss plus UH. You know, the challenges 0:04:21.480 --> 0:04:24.320 of getting people back to work, the challenges of awarding 0:04:24.320 --> 0:04:29.320 another UM, COVID type pandemic, the challenge of the U. S. 0:04:29.440 --> 0:04:33.239 China relationship, the challenge of the Russian situation, the energy situation, 0:04:33.320 --> 0:04:37.400 money challenges. But that's what makes great market great investors great. 0:04:37.720 --> 0:04:39.920 They can see through the challenges and get in when 0:04:39.920 --> 0:04:42.760 they going is good and other people think it's bad, 0:04:42.839 --> 0:04:45.800 but now it's probably not a bad time to begin investing. 0:04:46.520 --> 0:04:49.200 Hey David, um, is there any concern Do you have 0:04:49.240 --> 0:04:52.080 any concern that the Fed could overdo it? Because monetary 0:04:52.120 --> 0:04:55.400 policy it takes a while to take effect in the economy. 0:04:55.400 --> 0:04:57.400 We're still getting some pretty hot numbers when it comes 0:04:57.440 --> 0:05:00.520 to jobs, but an inflation still high, of course, But 0:05:00.760 --> 0:05:02.960 are you concerned that the Fed just goes too hard 0:05:03.000 --> 0:05:06.000 when it comes to interest rates? Well, of course, the 0:05:06.080 --> 0:05:08.480 Fed didn't make a mistake that it admitted it thought 0:05:08.480 --> 0:05:11.159 the inflation was was going to be transitory. Obviously was 0:05:11.200 --> 0:05:14.760 not Um J Pal who used to work at my firm, 0:05:14.800 --> 0:05:16.280 and I've known him for a long time, though I'm 0:05:16.279 --> 0:05:19.600 obviously not getting inside information from him now. Um. I 0:05:19.640 --> 0:05:22.080 think he's a very cautious person. He likes to tell 0:05:22.120 --> 0:05:23.760 you what he's going to do, and they'd like to 0:05:23.800 --> 0:05:26.440 then do it. Um, he's pretty much said, I'm gonna 0:05:26.480 --> 0:05:28.720 go the Fed's gonna FOMC is gonna go up by 0:05:28.720 --> 0:05:31.520 seventy five basis points. I think if they were gonna 0:05:31.560 --> 0:05:34.200 go a hundred basis points or more, I think they 0:05:34.240 --> 0:05:36.039 would have tipped the markets a bit, because, as I 0:05:36.040 --> 0:05:39.400 said earlier, a hundred basis points or more now would 0:05:39.400 --> 0:05:42.119 shock the markets, and I think it would be uh 0:05:42.480 --> 0:05:44.320 something that would see a big sell off in stock. 0:05:44.400 --> 0:05:47.040 So I don't see that being tipped from the FED. 0:05:47.400 --> 0:05:50.120 And obviously he doesn't control what the FMC does, but 0:05:50.160 --> 0:05:52.560 he has an enormous amount of influence, So I suspect 0:05:53.000 --> 0:05:55.160 um will be something around seventy five basis points. The 0:05:55.240 --> 0:05:57.839 real change is whether we will have another fifty basis 0:05:57.880 --> 0:05:59.599 points increase the remainder of the year, which is what 0:05:59.640 --> 0:06:02.240 the market seven have assumed, or could it be the 0:06:02.279 --> 0:06:04.400 case that we get more than fifty basis points or 0:06:04.440 --> 0:06:06.200 the remainder of the year. And then, of course, right 0:06:06.240 --> 0:06:09.599 now the markets are generally assuming probably not any real 0:06:09.680 --> 0:06:12.559 increases early next year, and who knows that could change, 0:06:12.560 --> 0:06:15.320 But right now I think we're the markets really want 0:06:15.360 --> 0:06:18.680 some good inflation numbers. The next time some inflation numbers 0:06:18.680 --> 0:06:20.600 come out, hopefully they're better than the ones we just saw. 0:06:21.600 --> 0:06:23.400 Do you find it okay? And we promised we're gonna 0:06:23.400 --> 0:06:24.960 get to your book, But is it wacky that we 0:06:25.000 --> 0:06:28.560 have such a strong labor market and yet, David, you 0:06:28.600 --> 0:06:32.480 know that we constantly talk about about the labor market. 0:06:33.240 --> 0:06:36.800 The unemployment rate is a misleading number in many respects. 0:06:36.800 --> 0:06:39.120 It's the one we all know. And right now the 0:06:39.200 --> 0:06:41.640 number is I think three point seven percent. It went 0:06:41.680 --> 0:06:44.120 as low as three point five per cent um and 0:06:44.160 --> 0:06:48.000 that's as low as anything I can recall. Um, But 0:06:48.240 --> 0:06:50.719 that doesn't take into account how many people are looking 0:06:50.720 --> 0:06:53.520 for jobs. Uh, the amount of people in the labor 0:06:53.600 --> 0:06:56.440 force is less than it used to be. And remember, 0:06:56.640 --> 0:06:59.240 unemployment rate is the number of people in the previous 0:06:59.320 --> 0:07:01.680 month who are in the labor force and looking for 0:07:01.760 --> 0:07:04.919 jobs that can't find them. Uh, the labor force is 0:07:04.920 --> 0:07:08.560 actually smaller than it would be ideal, um. And so 0:07:08.880 --> 0:07:11.160 there probably are you know, more people who would like 0:07:11.320 --> 0:07:13.280 jobs but don't think they can find them in the 0:07:13.400 --> 0:07:15.240 at the salary they want, or they the kind of 0:07:15.280 --> 0:07:18.480 style work style they want. So I think it is 0:07:18.840 --> 0:07:21.680 hard to believe that that that the unemployment rate is 0:07:21.720 --> 0:07:24.080 so low when you know, I do know people that 0:07:24.120 --> 0:07:27.280 are still looking for jobs, and I think that you know, 0:07:27.320 --> 0:07:30.560 we should recognize it. Generally, an adult population, you have 0:07:30.600 --> 0:07:36.000 about six working population and adult population who are in 0:07:36.040 --> 0:07:38.600 the workforce. Now that number is probably closer to sixty 0:07:38.600 --> 0:07:42.680 two or six. So we have more people who could work, 0:07:42.880 --> 0:07:45.120 but they've taken themselves out of the workforce and that's 0:07:45.160 --> 0:07:48.320 why the the unemployment rate is so low. All right, 0:07:48.360 --> 0:07:50.680 so let's talk about the book How to invest Masters 0:07:50.720 --> 0:07:53.840 on the Craft, Uh, And I do wonder, you know, David, 0:07:53.880 --> 0:07:59.200 Generally successful investors, I would argue that are successful. It's 0:07:59.200 --> 0:08:01.720 because of their different says. They find opportunities where others 0:08:01.720 --> 0:08:04.160 do not. So at the same time, I wonder, is 0:08:04.160 --> 0:08:08.200 there's something that successful investors all have in common. Yes, 0:08:08.800 --> 0:08:11.000 they have these things in common. They tend to come 0:08:11.040 --> 0:08:14.960 from blue collar and uh, middle class families. They don't 0:08:15.000 --> 0:08:17.400 come from very wealthy families. They tend to be pretty 0:08:17.400 --> 0:08:21.280 good students. These are not typically college dropouts or high 0:08:21.320 --> 0:08:24.000 school dropouts. As a general will of thumb, they tend 0:08:24.040 --> 0:08:26.200 to be pretty good in math. They tend to like 0:08:26.320 --> 0:08:29.880 to make decisions. They tend not like to delegate. They 0:08:29.960 --> 0:08:34.400 tend to be people who will um defy conventional wisdom. 0:08:34.679 --> 0:08:36.720 The conventional wisdom say now is not the time to 0:08:37.040 --> 0:08:39.640 to invest. That's when they invest. They also tend to 0:08:39.679 --> 0:08:42.040 be relatively humble because they've made a lot of mistakes 0:08:42.080 --> 0:08:44.880 over the years. Every investor does. They also tend to 0:08:44.920 --> 0:08:47.120 get rid of their mistakes pretty quickly. A really good 0:08:47.160 --> 0:08:49.800 investor when they when he or she makes a mistake, 0:08:49.840 --> 0:08:51.800 they don't labor over it for months and months and 0:08:51.800 --> 0:08:53.719 months and still about it. They get out of the 0:08:53.800 --> 0:08:56.160 position and they go into the next thing. They also 0:08:56.200 --> 0:08:59.640 tend to be i'd say, relatively philanthropic. Clearly, if you're 0:08:59.760 --> 0:09:01.680 if are in the business world and you're an investor, 0:09:01.679 --> 0:09:04.120 as opposed to being in the endowment world or or 0:09:04.200 --> 0:09:06.520 or a nonprofit world, you tend to make a lot 0:09:06.559 --> 0:09:08.440 of money as investors, and they tend to give away 0:09:08.480 --> 0:09:11.200 a large percentage of it. So I generally these are 0:09:11.200 --> 0:09:15.360 people who are quite articulate, quite smart, and quite hard working. 0:09:15.440 --> 0:09:17.880 We're hard work is not a problem for them because 0:09:17.920 --> 0:09:20.840 what they do is what they love. Investing is not 0:09:20.960 --> 0:09:23.640 for them work, It's it's pleasure. And once they've made 0:09:23.840 --> 0:09:25.959 whatever they need to make a billion dollars, two billion, 0:09:26.000 --> 0:09:28.679 ten billions, twenty billion dollars, they don't stop working. They 0:09:28.679 --> 0:09:32.199 work until they you know, I just can't do it anymore. Um. 0:09:32.240 --> 0:09:34.800 They don't tend to retire at fifty five or sixty. 0:09:35.080 --> 0:09:36.319 Some of the names on here, I mean, this is 0:09:36.320 --> 0:09:39.120 a who's who of of the Wall Street world and 0:09:39.160 --> 0:09:41.280 also Silicon value when it comes to alternatives. I mean 0:09:41.280 --> 0:09:44.160 we're talking people like Larry Fink, John Gray, Sam Zell 0:09:44.240 --> 0:09:46.240 are featured in here, Rate Dahio. When it comes to 0:09:46.320 --> 0:09:50.480 hedge funds, we got John Paulson on hedge funds, Mark Injuries, 0:09:50.520 --> 0:09:52.959 And when it comes to venture capital. I want to 0:09:53.000 --> 0:09:55.440 go back to what you said about mistakes though, because 0:09:55.520 --> 0:09:57.400 I think this is something that doesn't get enough attention, 0:09:57.440 --> 0:09:58.960 because a lot of people look at these folks as 0:09:59.000 --> 0:10:01.160 people who have just been so successful, and you know, 0:10:01.200 --> 0:10:03.360 the mistakes aren't really what what's written about. What are 0:10:03.400 --> 0:10:06.640 some prominent mistakes that you learned about when you were 0:10:06.920 --> 0:10:10.680 doing reporting for this book. Well, of course, um, every 0:10:10.720 --> 0:10:13.960 investor has his or her stories of their mistakes, and 0:10:14.240 --> 0:10:17.320 I wouldn't put myself in the great investor category. But 0:10:17.400 --> 0:10:20.839 I turned down Facebook when Mark Zuckerberg was in college. Um, 0:10:20.880 --> 0:10:24.040 I basically didn't. I told Jeff Bezos his company wasn't 0:10:24.040 --> 0:10:26.439 gonna get anywhere, and I sold his stock relatively early, 0:10:26.640 --> 0:10:30.040 right at the I p o UM. When Mark Andreeson 0:10:30.120 --> 0:10:32.280 came to my firm to try to raise money at 0:10:32.320 --> 0:10:34.000 the beginning for a net escape, I told him it 0:10:34.000 --> 0:10:36.560 would never get anywhere. So I've you know, made a 0:10:36.559 --> 0:10:41.200 lot of mistakes myself. I think every investor, UM makes mistakes, 0:10:41.200 --> 0:10:43.480 and that's what life is all about. So every one 0:10:43.520 --> 0:10:46.160 of these investors will tell you about one mistake they've 0:10:46.160 --> 0:10:48.319 made or another. And I could go through each of 0:10:48.360 --> 0:10:50.839 those investors and tell some of the mistakes that they 0:10:50.880 --> 0:10:53.480 told me they make. But you know, in the end, uh, 0:10:53.520 --> 0:10:56.160 they get over it quickly. UM. I I tend to 0:10:56.160 --> 0:10:57.920 be a person who likes to talk about my mistakes 0:10:57.960 --> 0:11:00.880 thirty years later. Um. They don't do that. They tend 0:11:00.920 --> 0:11:02.600 to go on to the next thing. And that's one 0:11:02.600 --> 0:11:04.320 of the reasons the great investors they can clear their 0:11:04.360 --> 0:11:08.840 mind of their mistakes. Well, you know one thing I 0:11:08.880 --> 0:11:11.280 found among the investors that you talked to. I always 0:11:11.280 --> 0:11:14.240 think about Sam's l a lot, uh in terms of 0:11:14.240 --> 0:11:17.080 when he sold his read at the height, um, and 0:11:17.120 --> 0:11:20.160 just before everything came undone from the great financial crisis 0:11:20.160 --> 0:11:22.439 in the housing mailtown. And I do wonder, is there 0:11:22.520 --> 0:11:24.960 is there a lesson there in terms of who were 0:11:25.080 --> 0:11:28.960 you know, was he just super smart lucky timing? Like 0:11:29.040 --> 0:11:32.480 what is it? Um? You know, really smart people tend 0:11:32.520 --> 0:11:34.960 to have better luck than not people who are people 0:11:34.960 --> 0:11:37.400 are not so smart. So it's Sam's LL's case. He's 0:11:37.440 --> 0:11:40.080 really smart. He wasn't really looking to sell his company. 0:11:40.080 --> 0:11:42.559 He got an offer, and then he was willing accept 0:11:42.640 --> 0:11:44.520 that offer, and another offer came at a higher price. 0:11:44.520 --> 0:11:47.040 He kind of ran an auction, and he wasn't intending to. 0:11:47.440 --> 0:11:49.839 But it shows you he makes mistakes too, because he 0:11:49.960 --> 0:11:51.679 got a higher price than he ever expected in a 0:11:51.760 --> 0:11:53.360 higher price, and he would have had had he not 0:11:53.440 --> 0:11:56.240 run a little auction. The profits that are above the 0:11:56.600 --> 0:11:59.120 price he initially accepted was a large sum of money 0:11:59.120 --> 0:12:01.560 he made. He took that money and brought the Chicago 0:12:01.600 --> 0:12:05.720 Tribune and it went bankrupt. So he quickly learned that 0:12:05.800 --> 0:12:08.280 running a newspaper not as easy as running an office building. 0:12:09.600 --> 0:12:12.360 I'm trying to think of, um, you know, the the 0:12:12.400 --> 0:12:15.720 average investor out there, people who are listening to our show, 0:12:16.160 --> 0:12:19.520 people who have Bloomberg terminals, who are you know, making 0:12:19.520 --> 0:12:23.720 their own personal investments, and even beyond those people, David, 0:12:23.760 --> 0:12:26.080 and I'm wondering what lessons they can take away from 0:12:26.280 --> 0:12:30.440 listening to the pros. The most common mistake that investors make. 0:12:31.080 --> 0:12:33.560 The pros would say, and I think I'm talking about 0:12:33.600 --> 0:12:36.480 average investors always. The book is not designed to make 0:12:36.480 --> 0:12:39.839 you into Sam's l or John Gray, that's unrealistic. Note 0:12:39.840 --> 0:12:42.120 book is going to do that, but it's designed for 0:12:42.160 --> 0:12:46.360 people who are average investors who um dabble in the market, 0:12:46.760 --> 0:12:49.240 or they buy funds and they have other people dabbling 0:12:49.280 --> 0:12:51.760 for them in effect. UM. I would say that the 0:12:51.840 --> 0:12:54.760 cost common mistake that people point out to me is 0:12:54.800 --> 0:12:57.160 that people when the markets are going up, they rush 0:12:57.240 --> 0:12:59.160 in and they want to catch it at the top, 0:12:59.559 --> 0:13:01.319 and then when the markets are going down they want 0:13:01.320 --> 0:13:04.480 to sell. And even a brilliant person like Sir Isaac 0:13:04.480 --> 0:13:06.800 Newton considered the time the smartest man in the world. 0:13:07.280 --> 0:13:09.160 UM that, you know, the discovery of gravity and a 0:13:09.200 --> 0:13:13.040 whole variety of other things. He um He invested in 0:13:13.240 --> 0:13:17.080 in a in a south Sea corporation publicly traded stock 0:13:17.320 --> 0:13:20.560 um uh company, and he got out and made a 0:13:20.559 --> 0:13:22.599 big profit, and he said, you know, I'm smart and 0:13:22.640 --> 0:13:25.280 other things, not just physics. But then the market kept 0:13:25.280 --> 0:13:27.080 going up and up and up. He said, maybe I 0:13:27.120 --> 0:13:28.960 missed the top. He put all of his money and 0:13:29.000 --> 0:13:31.960 borrowed money to go back in and he in the 0:13:31.960 --> 0:13:35.839 company went bankrupt, so he went bankrupt too. So here's 0:13:35.840 --> 0:13:37.520 a guy who's one of the smartest men in the world, 0:13:37.720 --> 0:13:39.560 but he got caught up in the in the temptation 0:13:39.600 --> 0:13:41.880 of seeing other people making money when he wasn't making it. 0:13:42.200 --> 0:13:44.319 So you got to be very careful and I think 0:13:44.400 --> 0:13:47.559 know what you're doing. Also, one of the advantages of 0:13:47.559 --> 0:13:50.679 of of being a value investor, in a long term 0:13:50.679 --> 0:13:53.439 investor's Warren Buffett is they tend not to sell a lot. 0:13:53.760 --> 0:13:55.439 And when you sell a lot or you buy a lot, 0:13:55.480 --> 0:13:57.480 you have a lot of transaction costs and you had 0:13:57.520 --> 0:14:00.000 to pay taxes. One of the things that Warren Buffet 0:14:00.040 --> 0:14:03.040 has done and over sixty years, he's compounded a year 0:14:03.080 --> 0:14:07.120 for sixty years. Nobody's ever done that before. UM is 0:14:07.160 --> 0:14:09.520 he doesn't sell very many things. He therefore he doesn't 0:14:09.600 --> 0:14:13.000 transaction cost fees, but he also doesn't pay taxes um 0:14:13.040 --> 0:14:15.840 in the sense that he's not having capital gains taxes, 0:14:15.880 --> 0:14:17.880 but the stocks going up and he's not selling. And 0:14:17.920 --> 0:14:19.960 that's an important thing. People should hold on the things 0:14:20.000 --> 0:14:23.360 for quite a bit longer than they they attend to well. 0:14:23.440 --> 0:14:25.360 And I think that's an interesting thing to say. And 0:14:25.400 --> 0:14:27.280 here I am watching shares of I want to go 0:14:27.320 --> 0:14:29.680 back to that headline of FedEx. It's down about twelve 0:14:29.720 --> 0:14:32.800 percent and the after hours after the company withdrew its 0:14:32.880 --> 0:14:36.600 fiscal year earnings forecast, and it's also taking down shares 0:14:36.640 --> 0:14:38.760 of Ups in the after hours, which are now down 0:14:38.760 --> 0:14:43.000 about six percent. I mean things like this, David, You know, 0:14:43.080 --> 0:14:44.920 we try to glean so much from it of what 0:14:45.000 --> 0:14:47.040 it's telling us about the economy. We start off our 0:14:47.080 --> 0:14:51.040 conversation talking about this, But I mean, how do investors, 0:14:51.600 --> 0:14:53.880 you know, have to think about things when they're seeing 0:14:54.080 --> 0:14:56.920 maybe a position that they are going down twelve percent 0:14:57.040 --> 0:14:59.720 here in the after hours? You know, how do you 0:15:00.080 --> 0:15:02.880 figure out is this still something I hold onto or 0:15:02.920 --> 0:15:05.120 is this something I sell? Let me ask you this. 0:15:05.280 --> 0:15:07.960 If Warren Buffett was a shareholder in FedEx, I don't 0:15:07.960 --> 0:15:09.840 know if he is. Do you think he's gonna wake 0:15:09.880 --> 0:15:14.080 up tomorrow morning and sell that stock? And the answer 0:15:14.160 --> 0:15:17.480 is no, because he's he likes to buy great companies 0:15:17.520 --> 0:15:19.400 and stick with them through thick and thin. They generally 0:15:19.640 --> 0:15:21.360 that will work out, as he proved in a lot 0:15:21.400 --> 0:15:23.840 of companies. As biggest holding now is Ample, which he 0:15:23.920 --> 0:15:26.760 bought was much lower price than it is today. Um, 0:15:27.400 --> 0:15:29.640 you don't know whether the FedEx a remove of guidance 0:15:29.680 --> 0:15:32.560 is because there's some exogenous thing that's unique to to 0:15:32.680 --> 0:15:36.080 FedEx or UM. It just reflects the fact that there's 0:15:36.080 --> 0:15:39.280 not much shipping going on because not much economic buying 0:15:39.760 --> 0:15:41.760 and a lone of things are being bought and shipped 0:15:41.760 --> 0:15:43.160 and so forth. You just don't know and toy to 0:15:43.240 --> 0:15:45.400 see what the what the reason is for the withdrawing 0:15:45.400 --> 0:15:48.320 to guidance. That's a big drop, that's for sure, a 0:15:48.320 --> 0:15:50.800 big drop. But I just don't know yet what the 0:15:50.840 --> 0:15:52.640 reason is. And let me be fair to you in 0:15:52.640 --> 0:15:56.160 our audience, the CEO of FedEx and global volumes declined 0:15:56.200 --> 0:15:59.720 as macroeconomic trend significantly worsened later in the quarter, both 0:15:59.720 --> 0:16:03.200 Internet actually and the US. We are swiftly addressing those headwinds, 0:16:03.200 --> 0:16:05.440 but given the speed at which conditions shifted, first quarter 0:16:05.480 --> 0:16:08.880 results are below our expectations. Um, there's a little bit 0:16:08.920 --> 0:16:11.000 of color. How does that make you think about something 0:16:11.080 --> 0:16:13.960 like this? Yeah, well, they emphasized the word global, so 0:16:14.120 --> 0:16:17.920 maybe the global um. You know, maybe the economic problem 0:16:17.960 --> 0:16:20.240 is outside the United States more than in the United States. 0:16:20.280 --> 0:16:22.920 And there's no doubt that Europe is on the precipice 0:16:22.960 --> 0:16:26.680 of a recession because of the high energy prices, high inflation, 0:16:26.800 --> 0:16:29.120 high interest rates, and the whole war in Ukraine and 0:16:29.160 --> 0:16:32.400 the impact on the supply chain in Western Europe. So 0:16:32.440 --> 0:16:34.600 it could be that's part of the problem. And obviously 0:16:34.960 --> 0:16:37.440 Chinese economy is slowed down and that could be part 0:16:37.480 --> 0:16:39.880 of the problem as well. I'd be surprised if the 0:16:39.880 --> 0:16:42.240 problem is only because of the United States. I don't 0:16:42.240 --> 0:16:45.760 think that's probably the case. The US economy is chugging along. Okay, 0:16:45.760 --> 0:16:47.640 we're not in a recession. We may or may not 0:16:47.720 --> 0:16:49.160 go into one, but we're com clearly not in one. 0:16:49.280 --> 0:16:51.640 Right now, we're speaking with David Rubinstein, the founder and 0:16:51.720 --> 0:16:54.080 co executive chairman of Carlisle Group. He's also the host 0:16:54.160 --> 0:16:56.840 of Bloomberg Wealth on a Bloomberg television the author of 0:16:56.880 --> 0:17:01.080 the brand new book How to Invest Masters on the Craft, David, 0:17:01.280 --> 0:17:04.679 the people you spoke with, um, again, really interesting names there. 0:17:04.720 --> 0:17:07.080 I want to go to Mike Novogradha. Can I just 0:17:07.119 --> 0:17:09.560 say that there's a lot of men. There's a lot 0:17:09.600 --> 0:17:13.400 of men. Well, um, there are a lot of women too. 0:17:13.520 --> 0:17:17.320 UM I would say, obviously it's easy to do a 0:17:17.320 --> 0:17:19.080 book like that and fill up with old white men. 0:17:19.480 --> 0:17:22.480 I tried hard not to do that. UM. I have 0:17:22.640 --> 0:17:26.320 in there, for example, Kim Lou who is the woman 0:17:26.359 --> 0:17:30.600 that runs the endownment for Columbia University. Are really impressive investor. 0:17:30.920 --> 0:17:33.119 Also is in there, Paula Belan who runs the endownment 0:17:33.160 --> 0:17:36.560 for Rockefeller University. Sandra Horback, who's the most senior woman 0:17:36.600 --> 0:17:39.440 in the enthigher private equity world. She's at Carlisle. UM, 0:17:39.520 --> 0:17:42.880 so I would say, Uh, what I tried to show 0:17:42.960 --> 0:17:45.480 is that there are women and minorities who are moving 0:17:45.560 --> 0:17:48.560 up into the pantheon of great investors. But let's be honest. 0:17:48.960 --> 0:17:52.120 Today there are more white male uh people who are 0:17:52.160 --> 0:17:54.920 considered great investors than women, right the wrong, and that 0:17:55.040 --> 0:17:56.640 may change in time. And in part what I wanted 0:17:56.680 --> 0:17:59.959 to do is inspire people who are not white man 0:18:00.040 --> 0:18:02.159 else to go into this business and see that you 0:18:02.160 --> 0:18:05.560 can become Paul of Balin or Kim Liu or African 0:18:05.560 --> 0:18:08.480 American that's in there, John Rodgers, who built the largest 0:18:08.520 --> 0:18:11.679 African American investment firm in the country, Aerial Capital. Right, 0:18:11.840 --> 0:18:15.040 we've talked with John him. Can I talk about crypto? Yes? 0:18:15.040 --> 0:18:19.119 You can? Alright, I want to ask David about crypto because, um, 0:18:19.200 --> 0:18:21.600 you know in the alternative section, Mike nova Gradson, who's 0:18:21.600 --> 0:18:23.760 a name very familiar to our audience. Um, but also 0:18:23.840 --> 0:18:26.800 somebody who has you know, dabbled just in traditional finance 0:18:26.800 --> 0:18:28.720 trad FI as it's known, and also in defy with 0:18:28.800 --> 0:18:31.960 when it comes to crypto. Um, your thoughts after interviewing 0:18:32.040 --> 0:18:34.119 him for this book and about whether or not crypto 0:18:34.160 --> 0:18:36.280 actually has staying power because he did make a lot 0:18:36.280 --> 0:18:38.080 of money and also recently lost a lot of money 0:18:38.080 --> 0:18:41.680 when it comes to crypto, Yes, well overall he's ahead. Um. 0:18:41.720 --> 0:18:46.200