1 00:00:02,440 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:07,240 --> 00:00:10,520 Speaker 2: You're listening to Bloomberg Business Week with Carol Messer and 3 00:00:10,600 --> 00:00:13,000 Speaker 2: Tim Stenebek on Bloomberg Radio. 4 00:00:13,280 --> 00:00:15,920 Speaker 3: It is International Women's Day and with us a recognized, 5 00:00:16,000 --> 00:00:19,320 Speaker 3: much talked about and followed individual, well known investor who 6 00:00:19,400 --> 00:00:21,599 Speaker 3: also happens to be a woman, and safe to say, 7 00:00:21,600 --> 00:00:24,960 Speaker 3: the person who ignited the investment thesis around the innovative 8 00:00:25,000 --> 00:00:29,160 Speaker 3: and disruptive theme and economy just about ten years ago. 9 00:00:29,240 --> 00:00:31,480 Speaker 3: So let's get to our interview. Great to have back 10 00:00:31,520 --> 00:00:31,760 Speaker 3: with us. 11 00:00:31,840 --> 00:00:32,360 Speaker 1: Kathy Wood. 12 00:00:32,440 --> 00:00:35,400 Speaker 3: She's the founder, CEO and CIO of ARC invest and 13 00:00:35,479 --> 00:00:39,040 Speaker 3: she joins us once again from Petersburg, Florida. Hey Kathy, 14 00:00:39,159 --> 00:00:41,320 Speaker 3: I'm so great to be talking with you again. 15 00:00:41,360 --> 00:00:44,360 Speaker 1: How are you? I'm great? How are you doing? Carol? 16 00:00:44,479 --> 00:00:46,199 Speaker 3: Doing well, trying to keep up as you know, of 17 00:00:46,200 --> 00:00:49,880 Speaker 3: the newsflow kind of fast and furious. Let's talk about 18 00:00:49,880 --> 00:00:53,560 Speaker 3: the economic backdrop, because your roots, right when you started out, 19 00:00:53,680 --> 00:00:56,920 Speaker 3: you are an economist and you think about things the 20 00:00:56,960 --> 00:01:01,400 Speaker 3: macro environment, the jobs report today some strength, maybe some 21 00:01:01,440 --> 00:01:04,040 Speaker 3: concerns about things starting to slow down. What does the 22 00:01:04,200 --> 00:01:07,520 Speaker 3: US economic environment look like to you, the business environment 23 00:01:07,560 --> 00:01:10,600 Speaker 3: as well, and what it means for some of your investments. 24 00:01:11,319 --> 00:01:16,520 Speaker 1: Sure, it looks like that corporations are losing pricing power, 25 00:01:17,080 --> 00:01:20,000 Speaker 1: and we are now beginning to see the unemployment rate 26 00:01:20,280 --> 00:01:23,000 Speaker 1: move up. It went up to three point nine percent 27 00:01:23,040 --> 00:01:25,920 Speaker 1: in this latest report from a low of three point 28 00:01:26,040 --> 00:01:29,800 Speaker 1: four percent, So undeniably it's on its way up now, 29 00:01:30,120 --> 00:01:34,000 Speaker 1: and we do think it's because corporations are losing pricing power. 30 00:01:34,280 --> 00:01:37,320 Speaker 1: Their margins are getting hit. It's going to it's going 31 00:01:37,400 --> 00:01:40,640 Speaker 1: to cause a couple of things. One, the labor hoarding 32 00:01:40,720 --> 00:01:44,520 Speaker 1: that we've seen since COVID is going to diminish, and 33 00:01:44,840 --> 00:01:48,040 Speaker 1: that will increase the unemployment rate. But then the second 34 00:01:48,120 --> 00:01:54,040 Speaker 1: thing is it will accelerate the adoption of technologies. Innovation 35 00:01:54,160 --> 00:01:57,120 Speaker 1: solves problems, and one of the things that it does 36 00:01:57,240 --> 00:02:03,120 Speaker 1: is increased productivity, increase efficiency, and create new products and services. 37 00:02:03,200 --> 00:02:07,760 Speaker 1: So we're pretty optimistic about our strategy in this environment 38 00:02:07,840 --> 00:02:12,960 Speaker 1: because interest rates should come down. I think that the FED, 39 00:02:13,040 --> 00:02:15,239 Speaker 1: even the FED is going to be surprised at how 40 00:02:15,360 --> 00:02:19,119 Speaker 1: low inflation goes. We think it could be negative this year. 41 00:02:19,240 --> 00:02:22,600 Speaker 3: Well, so, Kathy, let me ask you. That's interesting. I mean, 42 00:02:22,960 --> 00:02:26,200 Speaker 3: if the expectations, at least according to traders right now 43 00:02:26,240 --> 00:02:28,800 Speaker 3: is that the first rate comes in June. Is that 44 00:02:29,560 --> 00:02:31,919 Speaker 3: too late in your view for the Fed to start 45 00:02:31,960 --> 00:02:33,160 Speaker 3: cutting rates? 46 00:02:33,840 --> 00:02:37,519 Speaker 1: Well, I think the twenty fourfold increase in interest rates 47 00:02:37,520 --> 00:02:40,720 Speaker 1: and little more than a year have shocked the system. 48 00:02:41,480 --> 00:02:46,280 Speaker 1: We're beginning to see a reverberation of the regional bank issues. 49 00:02:47,120 --> 00:02:50,520 Speaker 1: We don't think they are going away. Deposits are still 50 00:02:50,639 --> 00:02:56,120 Speaker 1: outflowing broadly from the banking system, and there are increasing 51 00:02:56,200 --> 00:02:59,600 Speaker 1: problems with commercial real estate. Most people know about the 52 00:02:59,680 --> 00:03:07,880 Speaker 1: off problems, but multifamily units, multifamily apartments. We're beginning to 53 00:03:07,919 --> 00:03:12,440 Speaker 1: see some distressed sales there as well. So I think 54 00:03:12,520 --> 00:03:18,480 Speaker 1: that problem isn't as well understood I think, and it's 55 00:03:18,520 --> 00:03:21,000 Speaker 1: going to cause the regional banks even more problems. 56 00:03:21,200 --> 00:03:23,560 Speaker 2: Kathy, how quickly do you think unemployment can go up 57 00:03:23,560 --> 00:03:25,560 Speaker 2: this year? What are you forecasting over at ARC? 58 00:03:26,600 --> 00:03:30,959 Speaker 1: Well, I wouldn't be surprised to see the unemployed employment 59 00:03:31,000 --> 00:03:33,080 Speaker 1: rate go above five percent. 60 00:03:33,960 --> 00:03:34,120 Speaker 3: Now. 61 00:03:34,160 --> 00:03:37,160 Speaker 1: I'm saying that knowing that this is an election year 62 00:03:37,480 --> 00:03:43,240 Speaker 1: and that this administration probably will try and spend more 63 00:03:43,520 --> 00:03:48,120 Speaker 1: than is currently in the budgets through executive order or 64 00:03:48,160 --> 00:03:54,920 Speaker 1: what have you, But above five percent would not surprise us, 65 00:03:56,160 --> 00:03:57,280 Speaker 1: all right, So, about five percent. 66 00:03:57,280 --> 00:03:58,800 Speaker 3: Well that's interesting, all right, so we have a good 67 00:03:58,800 --> 00:04:02,800 Speaker 3: idea of your economic and kind of macro backdrop. Having 68 00:04:02,840 --> 00:04:04,880 Speaker 3: said that, so here we are sitting at a day 69 00:04:04,920 --> 00:04:06,920 Speaker 3: where we're seeing a little bit of a pullback in stocks, 70 00:04:07,040 --> 00:04:08,560 Speaker 3: but you're to date the S and P still up 71 00:04:08,560 --> 00:04:10,920 Speaker 3: more than seven percent. We're looking at a Nasdaq one 72 00:04:11,000 --> 00:04:14,600 Speaker 3: hundred that's also up more than seven percent. You look 73 00:04:14,640 --> 00:04:16,679 Speaker 3: at something like the socks is up around twenty percent 74 00:04:16,760 --> 00:04:19,400 Speaker 3: year today, picking an individual name like an Nvidia more 75 00:04:19,400 --> 00:04:21,280 Speaker 3: than eighty percent, and I could go on and on 76 00:04:21,320 --> 00:04:24,479 Speaker 3: and on. There are many who talk about a bubble, 77 00:04:24,880 --> 00:04:27,039 Speaker 3: some like in it back to ninety nine, two thousand, 78 00:04:27,480 --> 00:04:29,960 Speaker 3: anything in today's equity trade that says bubble to you, 79 00:04:31,680 --> 00:04:32,320 Speaker 3: We do. 80 00:04:32,200 --> 00:04:35,320 Speaker 1: Not believe we're in a bubble anything like we were 81 00:04:35,360 --> 00:04:39,080 Speaker 1: in the late nineties. I was there, and the technologies 82 00:04:39,080 --> 00:04:42,040 Speaker 1: weren't ready, the costs were too high, too much capital chase, 83 00:04:42,080 --> 00:04:46,400 Speaker 1: too few opportunities, too soon. The seeds for what is 84 00:04:46,480 --> 00:04:50,200 Speaker 1: happening now were planted during the twenty years that ended 85 00:04:50,240 --> 00:04:52,680 Speaker 1: in the tech and telecom bubble, and they've been germinating 86 00:04:52,720 --> 00:04:57,440 Speaker 1: for twenty five or thirty years. So we're we believe 87 00:04:57,480 --> 00:05:01,000 Speaker 1: we're ready for primetime. The one play where we could 88 00:05:01,040 --> 00:05:03,919 Speaker 1: see a correction and it's just a correction. We're not 89 00:05:04,200 --> 00:05:08,320 Speaker 1: calling at the end of this at all is in 90 00:05:08,600 --> 00:05:12,599 Speaker 1: the chip space. Whenever I hear the word shortage, and 91 00:05:12,640 --> 00:05:17,520 Speaker 1: we started hearing about GPU shortages about this time last 92 00:05:17,600 --> 00:05:23,799 Speaker 1: year as chat GPT was capturing the imagination of both 93 00:05:23,880 --> 00:05:27,800 Speaker 1: businesses and consumers. So for about a year we've heard 94 00:05:27,839 --> 00:05:31,919 Speaker 1: that word and now we're seeing lead times we believe 95 00:05:32,080 --> 00:05:37,680 Speaker 1: come down for GPUs for nvidians in particular from the 96 00:05:37,920 --> 00:05:41,160 Speaker 1: eight to eleven month range to the three to four 97 00:05:41,600 --> 00:05:46,200 Speaker 1: month range. So that is suggesting that there was probably 98 00:05:46,240 --> 00:05:50,080 Speaker 1: a lot of double and triple ordering as the word 99 00:05:50,120 --> 00:05:53,960 Speaker 1: shortage was making the rounds, and that those inventories will 100 00:05:53,960 --> 00:05:54,760 Speaker 1: have to be digestible. 101 00:05:54,880 --> 00:05:56,800 Speaker 3: Is that also because of an increase in supply in 102 00:05:56,920 --> 00:05:59,640 Speaker 3: terms of output or is it because you think demand 103 00:05:59,720 --> 00:06:01,960 Speaker 3: is going which one is it? Oh? 104 00:06:02,000 --> 00:06:04,560 Speaker 1: I don't think no, No, demand is not going down, 105 00:06:04,680 --> 00:06:07,920 Speaker 1: though there is something we expect that I don't hear 106 00:06:07,960 --> 00:06:11,480 Speaker 1: discussion very much. And it hearkens back to the early 107 00:06:11,560 --> 00:06:14,880 Speaker 1: days of the Internet. There was a moment when the 108 00:06:14,880 --> 00:06:18,599 Speaker 1: Internet was taking off, when Cisco was all the rage, 109 00:06:18,960 --> 00:06:25,760 Speaker 1: and then enterprises started thinking seriously about the need to 110 00:06:25,839 --> 00:06:30,000 Speaker 1: spend aggressively on this new thing called the Internet and 111 00:06:30,040 --> 00:06:35,280 Speaker 1: the backbone, and they paused as a lot of competitions 112 00:06:35,320 --> 00:06:39,320 Speaker 1: started to make the rounds and Cisco went down fifty 113 00:06:39,360 --> 00:06:44,400 Speaker 1: percent plus as enterprises were pausing. Now, why are enterprises 114 00:06:45,120 --> 00:06:49,680 Speaker 1: likely to pause or at least go through an assessment. 115 00:06:50,440 --> 00:06:54,279 Speaker 1: They have to integrate all of their data first, proprietary 116 00:06:54,440 --> 00:06:58,200 Speaker 1: data is the secret to AI's success. And they have 117 00:06:58,279 --> 00:07:02,880 Speaker 1: to map out in excrew shading detail their workflows internally 118 00:07:02,960 --> 00:07:07,560 Speaker 1: and with suppliers and customers and so forth. And this 119 00:07:07,600 --> 00:07:10,840 Speaker 1: is going to take time. So we think this is 120 00:07:11,040 --> 00:07:15,000 Speaker 1: this movement is real, is going to be massive, but 121 00:07:15,200 --> 00:07:19,360 Speaker 1: we think there's been a little bit too much too soon. 122 00:07:19,640 --> 00:07:21,920 Speaker 2: Well, it's interesting to hear you say that, Kathy, because 123 00:07:21,960 --> 00:07:25,640 Speaker 2: you and at ARC were very early to acknowledge the 124 00:07:25,680 --> 00:07:30,000 Speaker 2: impact of AI. Yet your flagship Our Innovation ETF has 125 00:07:30,080 --> 00:07:34,520 Speaker 2: not held shares of Nvidia in about a year. You 126 00:07:34,560 --> 00:07:36,760 Speaker 2: do own some of it in your other ETFs. Do 127 00:07:36,760 --> 00:07:39,200 Speaker 2: you have any regrets about not having held onto the 128 00:07:39,280 --> 00:07:42,680 Speaker 2: stock or actually increasing your exposure in the last couple 129 00:07:42,720 --> 00:07:44,800 Speaker 2: of years After more than five hundred and thirty percent 130 00:07:44,880 --> 00:07:47,280 Speaker 2: gains since twenty twenty two since the end of twenty 131 00:07:47,280 --> 00:07:47,720 Speaker 2: twenty two. 132 00:07:48,760 --> 00:07:53,080 Speaker 1: Yes, so you're right. We were very early into Nvidia 133 00:07:53,160 --> 00:07:56,080 Speaker 1: ten years ago when it was five dollars. Now it's 134 00:07:56,480 --> 00:08:02,000 Speaker 1: roughly eight hundred dollars, and I wrote it most of 135 00:08:02,040 --> 00:08:03,840 Speaker 1: the way up. But I'll tell you what we did, 136 00:08:03,880 --> 00:08:07,120 Speaker 1: and this is as a portfolio manager. It's not one 137 00:08:07,200 --> 00:08:13,040 Speaker 1: action but what it causes in terms of another action. 138 00:08:13,760 --> 00:08:19,160 Speaker 1: Last year we sold in the flagship in Vidia and 139 00:08:19,200 --> 00:08:24,440 Speaker 1: put it into Coinbase. Coinbase, I believe is up as 140 00:08:24,800 --> 00:08:28,800 Speaker 1: at least as much as in VideA, and it is 141 00:08:29,320 --> 00:08:36,559 Speaker 1: much less well understood. The whole crypto movement, the crypto 142 00:08:36,600 --> 00:08:39,839 Speaker 1: asset movement, Bitcoin as a new asset class and so forth, 143 00:08:40,360 --> 00:08:44,600 Speaker 1: is not well understood or completely accepted out there. So 144 00:08:44,640 --> 00:08:49,720 Speaker 1: we prefer to go where others are not traveling as much. 145 00:08:49,800 --> 00:08:52,560 Speaker 1: And you know, as we were moving out of in Video, 146 00:08:52,600 --> 00:08:57,760 Speaker 1: we were saying, okay, regulators are trying to crush coinbase here, 147 00:08:57,800 --> 00:08:59,959 Speaker 1: and we were buying it on every dip in Video. 148 00:09:00,160 --> 00:09:03,559 Speaker 1: Have to happen to be one of the sources for 149 00:09:04,200 --> 00:09:07,040 Speaker 1: that purchase. So it's not just what we do on 150 00:09:07,080 --> 00:09:09,000 Speaker 1: the cell side. It is what we do on the 151 00:09:09,040 --> 00:09:13,160 Speaker 1: buy side that you have to look at. And yes 152 00:09:13,200 --> 00:09:16,440 Speaker 1: we do hold it in the more specialized funds, but 153 00:09:16,480 --> 00:09:19,840 Speaker 1: we've been taking profits there as well for reasons I 154 00:09:20,000 --> 00:09:20,640 Speaker 1: just described. 155 00:09:21,080 --> 00:09:23,080 Speaker 3: Yeah, and to be fair, you're right. Coinbase is up 156 00:09:23,080 --> 00:09:25,120 Speaker 3: about six hundred and twenty percent since the end of 157 00:09:25,160 --> 00:09:27,679 Speaker 3: twenty twenty two, so that compares with about five hundred 158 00:09:27,679 --> 00:09:30,600 Speaker 3: and thirty percent gain in nvideo. Is there anything, though, 159 00:09:30,720 --> 00:09:34,560 Speaker 3: Kathy in the end video story that would make you 160 00:09:34,640 --> 00:09:37,000 Speaker 3: we think the name and want to become more aggressive 161 00:09:37,000 --> 00:09:37,319 Speaker 3: on it. 162 00:09:38,559 --> 00:09:42,240 Speaker 1: Yeah, if the price came down a lot, we would 163 00:09:42,720 --> 00:09:46,040 Speaker 1: you know, the rate of return expectations or split? Would 164 00:09:46,040 --> 00:09:46,640 Speaker 1: a split do it? 165 00:09:46,679 --> 00:09:48,400 Speaker 3: Because I know we've been never. 166 00:09:48,320 --> 00:09:53,360 Speaker 1: No, no, no, that wouldn't change. That wouldn't change anything. No, no, 167 00:09:53,480 --> 00:09:58,360 Speaker 1: split adjusted than the price. So you know, if you 168 00:09:58,520 --> 00:10:01,840 Speaker 1: look at our portfolio, is what we're trying to capitalize 169 00:10:01,880 --> 00:10:06,520 Speaker 1: on with a Palenteer for example, are the next stages 170 00:10:07,160 --> 00:10:11,400 Speaker 1: of this AI revolution? What we're seeing in the GPU 171 00:10:11,559 --> 00:10:15,439 Speaker 1: side of things is Nvidia all praise to Jensen one, 172 00:10:15,679 --> 00:10:22,080 Speaker 1: I mean, just unbelievable company execution, vision and so forth. 173 00:10:22,200 --> 00:10:25,400 Speaker 1: And it's not over. It's going to last a long time, 174 00:10:25,480 --> 00:10:29,040 Speaker 1: but there are going to be many other companies benefiting 175 00:10:29,520 --> 00:10:34,520 Speaker 1: from AI. The productivity lift alone is going to be massive, 176 00:10:34,600 --> 00:10:38,800 Speaker 1: the most massive productivity lift in history, we believe. And 177 00:10:38,880 --> 00:10:42,120 Speaker 1: so this AI revolution is going to be broad based 178 00:10:42,160 --> 00:10:45,760 Speaker 1: and is going to benefit a lot of companies. On 179 00:10:45,800 --> 00:10:49,200 Speaker 1: the GPU side, of course, we have AMD as competition, 180 00:10:49,640 --> 00:10:52,920 Speaker 1: but many people do not understand that there's a lot 181 00:10:52,960 --> 00:10:58,360 Speaker 1: of other surreptitious competition evolving out there. Each of the 182 00:10:58,440 --> 00:11:03,200 Speaker 1: hyperscalers is evolving its own chip strategy. You have a 183 00:11:03,280 --> 00:11:09,400 Speaker 1: Tesla that has designed its own chip for AI, chip 184 00:11:09,840 --> 00:11:15,800 Speaker 1: for the specialized, more specialized autonomous driving opportunity, and I 185 00:11:15,840 --> 00:11:18,960 Speaker 1: think you're going to see a lot of companies developing 186 00:11:19,000 --> 00:11:23,720 Speaker 1: more specialized chips. We know that Nvidia, of course, will 187 00:11:24,000 --> 00:11:27,520 Speaker 1: segment the market as well. So we just think that 188 00:11:28,000 --> 00:11:31,400 Speaker 1: a lot of the assumptions for Nvidia, you know that 189 00:11:31,520 --> 00:11:34,720 Speaker 1: this is in Nvidia's market, and it's alone that those 190 00:11:34,760 --> 00:11:35,360 Speaker 1: are changing. 191 00:11:35,520 --> 00:11:37,960 Speaker 2: Well, we're speaking with Kathy Wood if you're just joining us. 192 00:11:38,000 --> 00:11:41,200 Speaker 2: She's the founder and CEO and chief investment officer of 193 00:11:41,320 --> 00:11:44,160 Speaker 2: ARC invest. She joins us from Saint Petersburg, Florida. 194 00:11:44,320 --> 00:11:47,280 Speaker 3: So it's interesting Kathy two to you know, right everybody 195 00:11:47,360 --> 00:11:49,320 Speaker 3: seems to be out there making chips, and it's funny. 196 00:11:49,360 --> 00:11:53,120 Speaker 3: We had a conversation yesterday with Chris Miller, who wrote 197 00:11:53,160 --> 00:11:56,320 Speaker 3: the book Chip Wars, and we talked about TSMC that 198 00:11:56,600 --> 00:11:58,960 Speaker 3: everybody can kind of design what they want, but ultimately, 199 00:11:59,000 --> 00:12:00,840 Speaker 3: right now they've got to come back to TSMC as 200 00:12:00,880 --> 00:12:03,160 Speaker 3: the fabricator to make them. So as you say that, 201 00:12:03,200 --> 00:12:05,000 Speaker 3: I mean you guys, and one of your funds, I 202 00:12:05,040 --> 00:12:09,400 Speaker 3: think late last month was selling shares of TSMC. I 203 00:12:09,440 --> 00:12:12,440 Speaker 3: am curious about then you're thinking around TSMC. There's a 204 00:12:12,440 --> 00:12:15,400 Speaker 3: story today too about TSMC winning more than five billion 205 00:12:15,400 --> 00:12:18,360 Speaker 3: in grants for their US chip plant, so money, you know, 206 00:12:18,440 --> 00:12:22,480 Speaker 3: certainly being devoted to them. Why maybe pull back a 207 00:12:22,520 --> 00:12:24,760 Speaker 3: little bit on TSMC or what is your case for 208 00:12:24,840 --> 00:12:26,200 Speaker 3: TSMC in the long run. 209 00:12:27,120 --> 00:12:31,439 Speaker 1: Well, the case for TSMC is, yes, it is the 210 00:12:31,440 --> 00:12:36,800 Speaker 1: manufacturer of these merchant chips, so very big story there. 211 00:12:37,120 --> 00:12:41,800 Speaker 1: But this is simply a cyclical call and it has 212 00:12:41,840 --> 00:12:45,400 Speaker 1: to do with that word shortage and TSMC. For example, 213 00:12:45,440 --> 00:12:49,640 Speaker 1: Broadcamcom reported last night I listened to that call. In 214 00:12:49,679 --> 00:12:53,679 Speaker 1: the semiconductor solutions part of their business, they were up 215 00:12:53,679 --> 00:12:57,160 Speaker 1: only four percent, AI up thirty five percent, but everything 216 00:12:57,160 --> 00:13:03,160 Speaker 1: else down. So there are are some cyclical phenomenon out there, 217 00:13:03,160 --> 00:13:07,480 Speaker 1: phenomena out there that we think are not they're not 218 00:13:07,520 --> 00:13:13,680 Speaker 1: being integrated into the short term expectations for a number 219 00:13:13,720 --> 00:13:17,520 Speaker 1: of stocks, hey counting including Yeah. 220 00:13:17,559 --> 00:13:19,440 Speaker 2: So, Kathy, I want to move on to Tesla because 221 00:13:19,480 --> 00:13:22,600 Speaker 2: you brought it up a moment ago. You've been a 222 00:13:22,640 --> 00:13:26,480 Speaker 2: long time bull on Tesla. You have been buying shares 223 00:13:26,520 --> 00:13:30,000 Speaker 2: recently after selling them for most of twenty twenty three. 224 00:13:30,480 --> 00:13:33,600 Speaker 2: The stock down about thirty percent so far this year. 225 00:13:33,880 --> 00:13:35,880 Speaker 2: We covered the news this week that ship beens from 226 00:13:35,920 --> 00:13:38,360 Speaker 2: Tesla shang High Factory sank to the lowest and over 227 00:13:38,480 --> 00:13:41,600 Speaker 2: a year in February. The challenges facing the EV industry 228 00:13:41,800 --> 00:13:43,920 Speaker 2: have been well documented. We've talked about those a lot. 229 00:13:45,000 --> 00:13:48,240 Speaker 2: Why do you still like Tesla considering all of the 230 00:13:48,320 --> 00:13:51,000 Speaker 2: challenges in the EV space and also what many critics 231 00:13:51,000 --> 00:13:52,839 Speaker 2: would say are disappointing fundamentals. 232 00:13:54,440 --> 00:13:57,199 Speaker 1: So, yes, you're right. We were selling last year as 233 00:13:57,240 --> 00:14:00,720 Speaker 1: it was in the three hundred to four hundred dollar range. 234 00:14:00,720 --> 00:14:04,280 Speaker 1: It's back to one seventy five. And this is what 235 00:14:04,480 --> 00:14:07,400 Speaker 1: portfolio managers do. We have a five year investment time 236 00:14:07,400 --> 00:14:13,600 Speaker 1: horizon for Tesla and our price expectations from here. I 237 00:14:13,640 --> 00:14:20,240 Speaker 1: mean we see roughly a seven to tenfold increase. I 238 00:14:20,280 --> 00:14:22,960 Speaker 1: know we're in the process of revising our model, so 239 00:14:23,000 --> 00:14:26,000 Speaker 1: I'm not at liberty to give you the new number. 240 00:14:26,080 --> 00:14:28,280 Speaker 2: But would that new number be higher or lower than 241 00:14:28,280 --> 00:14:28,880 Speaker 2: two thousand? 242 00:14:30,000 --> 00:14:33,800 Speaker 1: Well, we're pushing it out a year, and therefore it 243 00:14:33,840 --> 00:14:39,360 Speaker 1: will be higher because the autonomous taxi platform opportunity will 244 00:14:39,400 --> 00:14:42,280 Speaker 1: be in full force. We think and we believe that 245 00:14:42,400 --> 00:14:46,400 Speaker 1: Tesla will get the lion's share of that market here 246 00:14:46,480 --> 00:14:51,080 Speaker 1: in the US, if not elsewhere. Autonomous taxi platforms are 247 00:14:51,280 --> 00:14:56,520 Speaker 1: SaaS models. Tesla's current gross margin is well, it's in 248 00:14:56,560 --> 00:14:59,240 Speaker 1: the teens right now because it's been cutting prices, but 249 00:14:59,320 --> 00:15:03,640 Speaker 1: we think normalzed the ev margin is in the thirty 250 00:15:03,680 --> 00:15:07,640 Speaker 1: percent range. SAS margins are in the eighty percent range. 251 00:15:08,160 --> 00:15:12,240 Speaker 1: Most analysts focusing on the stock have nothing in their 252 00:15:12,280 --> 00:15:18,280 Speaker 1: models or very little for autonomous. Our confidence that autonomous 253 00:15:17,880 --> 00:15:22,440 Speaker 1: is going to happen has increased because it has happened. 254 00:15:23,120 --> 00:15:25,400 Speaker 1: We see way most successful. We see a lot of 255 00:15:25,440 --> 00:15:29,520 Speaker 1: success and commercial success. That is in China. It can 256 00:15:29,600 --> 00:15:33,800 Speaker 1: be done. We think Tesla will launch a national service 257 00:15:34,000 --> 00:15:37,480 Speaker 1: and Tesla this is where AI comes in. Tesla has 258 00:15:37,720 --> 00:15:41,080 Speaker 1: orders of magnitude more data than all of the other 259 00:15:41,200 --> 00:15:46,239 Speaker 1: auto and tech company companies going after this market combined. 260 00:15:46,920 --> 00:15:50,440 Speaker 1: And what's important about that is that it has corner 261 00:15:50,520 --> 00:15:56,320 Speaker 1: cases that nobody else has, rare, rare occurrences on the 262 00:15:56,440 --> 00:16:01,880 Speaker 1: roads that it has recorded, and it is prepared for it, 263 00:16:01,960 --> 00:16:02,760 Speaker 1: but others aren't. 264 00:16:02,800 --> 00:16:04,680 Speaker 2: Kathy, just don't happen. I just want to jump in. 265 00:16:04,680 --> 00:16:06,960 Speaker 2: It's kind of like a running joke with the Tesla 266 00:16:07,000 --> 00:16:10,320 Speaker 2: community because Elon Musk says every year we're going to 267 00:16:10,360 --> 00:16:14,000 Speaker 2: have this autonomous driving technology, and every year since he 268 00:16:14,040 --> 00:16:17,160 Speaker 2: started saying it, what twenty seventeen, twenty eighteen, it has 269 00:16:17,240 --> 00:16:20,440 Speaker 2: failed to materialize. Why are you so confident it's going 270 00:16:20,480 --> 00:16:21,840 Speaker 2: to happen in the near future. 271 00:16:22,200 --> 00:16:25,600 Speaker 1: Well, because it has happened, as I just said, and 272 00:16:25,920 --> 00:16:30,280 Speaker 1: so it's not. It's not if it is when. That's 273 00:16:30,360 --> 00:16:35,600 Speaker 1: the most important reason. Interestingly, in his last conference call, 274 00:16:35,680 --> 00:16:38,760 Speaker 1: Tesla's last conference call, Elon said, yeah, I know I've 275 00:16:38,760 --> 00:16:40,480 Speaker 1: been wrong about it, so I'm not even going to 276 00:16:40,520 --> 00:16:42,920 Speaker 1: make a projection. I actually thought that was good and 277 00:16:42,960 --> 00:16:46,240 Speaker 1: maybe he has a better shot now. And we're looking 278 00:16:46,280 --> 00:16:49,040 Speaker 1: at some of their hiring and their job postings and 279 00:16:49,840 --> 00:16:54,040 Speaker 1: seeing rumblings in different cities that they're starting to get ready. 280 00:16:54,120 --> 00:16:56,400 Speaker 3: Hey, Kathy's something I know I've brought up this with 281 00:16:56,480 --> 00:16:58,680 Speaker 3: you before, but I think back to are you and 282 00:16:58,920 --> 00:17:01,479 Speaker 3: my first interview back in May of twenty fourteen, so almost. 283 00:17:01,200 --> 00:17:01,760 Speaker 1: Ten years ago. 284 00:17:01,840 --> 00:17:04,520 Speaker 3: But you brought up Elon Musk when he wasn't a 285 00:17:04,520 --> 00:17:07,600 Speaker 3: household name or what his company was doing, and you 286 00:17:07,800 --> 00:17:10,080 Speaker 3: likened him to Thomas Edison. And I guess what I 287 00:17:10,119 --> 00:17:12,720 Speaker 3: want to ask you. You know this individual, you talk 288 00:17:12,760 --> 00:17:14,840 Speaker 3: with him, you followed him obviously for a long time. 289 00:17:15,080 --> 00:17:17,800 Speaker 3: Do you ever feel, you know, do you feel that 290 00:17:17,800 --> 00:17:20,600 Speaker 3: way still about him in terms of likening to someone 291 00:17:20,640 --> 00:17:23,240 Speaker 3: like Thomas Edison? And how do you find clarity and 292 00:17:23,280 --> 00:17:26,600 Speaker 3: feel comfort in some of the questionable and controversial things 293 00:17:26,640 --> 00:17:29,639 Speaker 3: that that Elon comments on or that he says. 294 00:17:30,840 --> 00:17:38,320 Speaker 1: Yes, well, we we're focused on the technology and we're 295 00:17:39,480 --> 00:17:43,359 Speaker 1: as is he. He is the inventor of our age. 296 00:17:43,480 --> 00:17:47,399 Speaker 1: And this age is a very special age because the 297 00:17:47,720 --> 00:17:51,680 Speaker 1: five major innovation platforms around which we have centered our 298 00:17:51,720 --> 00:17:57,560 Speaker 1: research are converging, and three of them he is helping 299 00:17:57,600 --> 00:18:02,359 Speaker 1: to converge. This autonomous tech see platform Opportunity is the 300 00:18:02,359 --> 00:18:08,000 Speaker 1: convergence of robotics. Autonomous vehicles are robots, energy storage, they 301 00:18:08,040 --> 00:18:12,640 Speaker 1: will be electric and artificial intelligence, where those are three 302 00:18:12,680 --> 00:18:17,800 Speaker 1: separate s curves feeding each other and should lead to 303 00:18:17,880 --> 00:18:23,240 Speaker 1: super exponential growth. He has understood this idea that technologies 304 00:18:23,760 --> 00:18:26,879 Speaker 1: are going to converge with one another, and that is 305 00:18:26,920 --> 00:18:30,520 Speaker 1: the way he's been thinking his first principles research. Just 306 00:18:30,560 --> 00:18:33,440 Speaker 1: because something's been done one way for a very long time, 307 00:18:33,520 --> 00:18:37,080 Speaker 1: think autos, doesn't mean it's going to remain that way, 308 00:18:37,520 --> 00:18:38,680 Speaker 1: and that's why he's going to win. 309 00:18:38,760 --> 00:18:42,120 Speaker 3: Do you ever feel though that he gets distracted or or. 310 00:18:42,160 --> 00:18:47,280 Speaker 1: Candidate to it. Yeah, he is so laser focused on technology, 311 00:18:48,320 --> 00:18:52,920 Speaker 1: and in the case of Tesla, the electric vehicle side 312 00:18:52,960 --> 00:18:56,000 Speaker 1: that is on automatic pilot. They are just scaling and 313 00:18:56,359 --> 00:19:01,280 Speaker 1: what he is doing is becoming, you know, the manufacturer 314 00:19:01,359 --> 00:19:05,240 Speaker 1: of factories. He's trying to figure out how to automate 315 00:19:05,320 --> 00:19:09,040 Speaker 1: and continue to drive down the costs there. His focus 316 00:19:09,119 --> 00:19:13,640 Speaker 1: is on autonomous now certainly, and of course you can 317 00:19:13,680 --> 00:19:16,760 Speaker 1: say on X he's distracted, but he's really more focused 318 00:19:16,800 --> 00:19:20,080 Speaker 1: on the innovation. How can I go back to the 319 00:19:20,119 --> 00:19:23,320 Speaker 1: future where I started, which was in the payments app 320 00:19:23,320 --> 00:19:28,480 Speaker 1: Space sold to PayPal. How can I turn this into 321 00:19:28,920 --> 00:19:32,919 Speaker 1: not only a payments app, but an everything app? And 322 00:19:32,960 --> 00:19:35,800 Speaker 1: I think he's hard at work doing that in ways 323 00:19:35,840 --> 00:19:36,840 Speaker 1: that we don't know yet. 324 00:19:36,960 --> 00:19:38,800 Speaker 3: We are, of course talking with Kathy Woods. She's the 325 00:19:38,840 --> 00:19:41,919 Speaker 3: ceocio and of course founder of arc invest joining us 326 00:19:41,920 --> 00:19:42,560 Speaker 3: from Florida. 327 00:19:42,720 --> 00:19:45,520 Speaker 2: Hey, Kathy, you're talking about the future of transportation. We 328 00:19:45,600 --> 00:19:47,959 Speaker 2: got to talk about Archer Aviation. One of the most 329 00:19:48,000 --> 00:19:50,840 Speaker 2: read stories today is about the company that you've been 330 00:19:50,840 --> 00:19:54,240 Speaker 2: buying up. It's a developer of air taxis, Archer Aviation. 331 00:19:54,359 --> 00:19:57,560 Speaker 2: Your stake around ten percent across several of your ETFs. 332 00:19:58,320 --> 00:20:01,480 Speaker 2: You're the third largest investor in the name. We should 333 00:20:01,520 --> 00:20:04,120 Speaker 2: note shares down roughly thirty percent so far this year. 334 00:20:04,119 --> 00:20:06,560 Speaker 2: As our own Sam Potter writes today, you are once 335 00:20:06,560 --> 00:20:08,880 Speaker 2: again on the other side of a short call made 336 00:20:08,960 --> 00:20:11,119 Speaker 2: by Grizzly Research. Last time you were in a similar 337 00:20:11,160 --> 00:20:13,720 Speaker 2: spot regarding a different name, Too Simple. You lost a 338 00:20:13,760 --> 00:20:16,480 Speaker 2: lot and eventually sold most of your position. So talk 339 00:20:16,520 --> 00:20:19,480 Speaker 2: to us about why you believe in Archer and does 340 00:20:19,520 --> 00:20:24,160 Speaker 2: it ever worry you to go against the short sellers. 341 00:20:24,640 --> 00:20:32,639 Speaker 1: So our investment process is centered around research and original research. 342 00:20:33,800 --> 00:20:38,160 Speaker 1: I'll start with Too Simple. We sold too simple after 343 00:20:38,880 --> 00:20:46,159 Speaker 1: the CEO who was the technology visionary left and so 344 00:20:46,760 --> 00:20:50,040 Speaker 1: Grizzly got that right. I don't think for the right reasons. 345 00:20:50,400 --> 00:20:53,160 Speaker 1: Although we were in the teeth of a massive bear 346 00:20:53,280 --> 00:20:57,000 Speaker 1: market as well. If that CEO had not left, I 347 00:20:57,040 --> 00:20:59,399 Speaker 1: don't think we would have sold that stock. In the 348 00:20:59,400 --> 00:21:02,920 Speaker 1: case of Archer, we have a high degree of confidence 349 00:21:03,000 --> 00:21:06,240 Speaker 1: in Archer. One thing to understand about ARC is we 350 00:21:06,320 --> 00:21:08,960 Speaker 1: are the closest ARC is the closest you'll find to 351 00:21:09,000 --> 00:21:13,840 Speaker 1: a venture capital company in the public equity markets, and 352 00:21:14,240 --> 00:21:19,119 Speaker 1: we tread where others in the traditional asset management world 353 00:21:19,320 --> 00:21:22,680 Speaker 1: will not go, at least on the public side, when 354 00:21:22,720 --> 00:21:25,840 Speaker 1: we see a real opportunity. As we're doing our work 355 00:21:26,160 --> 00:21:31,520 Speaker 1: on autonomous vehicles, we concluded that the cost is going 356 00:21:31,560 --> 00:21:34,639 Speaker 1: to drop so much that roads are going to become 357 00:21:35,119 --> 00:21:38,399 Speaker 1: very congested in the future, much more congested if you 358 00:21:38,400 --> 00:21:42,320 Speaker 1: can imagine New York City. And so we then started 359 00:21:42,320 --> 00:21:47,840 Speaker 1: doing work about transportation in the skies. Is it possible, Yes, 360 00:21:47,880 --> 00:21:51,480 Speaker 1: it is possible. The FAA is the gating factor from 361 00:21:51,480 --> 00:21:54,919 Speaker 1: a regulatory point of view. There are two companies the 362 00:21:55,000 --> 00:21:58,480 Speaker 1: FAA is working very closely with, and I think because 363 00:21:58,520 --> 00:22:03,440 Speaker 1: of successes elsewhere in the world. Other companies are having 364 00:22:03,480 --> 00:22:07,640 Speaker 1: success where regulators have not been as strict. I think 365 00:22:07,640 --> 00:22:10,639 Speaker 1: there's been a little more pressure on the FAA to 366 00:22:10,720 --> 00:22:15,399 Speaker 1: pay close attention here, and the two are Archer and Jobi. 367 00:22:16,080 --> 00:22:20,960 Speaker 1: Our confidence went up when Boeing, which was suing it 368 00:22:21,160 --> 00:22:25,399 Speaker 1: for patent infringement, settled the case and actually took an 369 00:22:25,400 --> 00:22:32,840 Speaker 1: ownership position in Archers, as has Stilantis and United Airlines. 370 00:22:33,400 --> 00:22:38,600 Speaker 1: So three very deep pocketed partners who are also trying 371 00:22:38,600 --> 00:22:43,159 Speaker 1: to figure out the future of transportation. And we know 372 00:22:44,320 --> 00:22:48,080 Speaker 1: that they're on their way. Both Joby and Archer two 373 00:22:48,480 --> 00:22:53,120 Speaker 1: FAA certification. Seems like the process is in motion and 374 00:22:53,520 --> 00:22:57,760 Speaker 1: we haven't had a hiccup. And it has an MoU 375 00:22:58,119 --> 00:23:01,040 Speaker 1: with Abu Dhabi to launch an air taxi service in 376 00:23:01,119 --> 00:23:06,199 Speaker 1: twenty six and pending regulation, it has an MoU with 377 00:23:06,440 --> 00:23:10,080 Speaker 1: inter Globe to launch an air taxi service in India. 378 00:23:10,119 --> 00:23:14,000 Speaker 1: Both of those have been much better from a regulatory 379 00:23:14,040 --> 00:23:14,639 Speaker 1: point of view. 380 00:23:14,680 --> 00:23:16,280 Speaker 2: But how big of a concern is it to you 381 00:23:16,680 --> 00:23:19,200 Speaker 2: that regulators here in the US could drag their feet. 382 00:23:19,240 --> 00:23:22,439 Speaker 2: We did speak with an airline executive recently who is 383 00:23:22,560 --> 00:23:26,000 Speaker 2: concerned that the FA is moving slower than other regulatory 384 00:23:26,000 --> 00:23:27,800 Speaker 2: bodies when it comes to this type of technology. 385 00:23:28,800 --> 00:23:31,040 Speaker 1: Yes, and that is why we pay a lot of 386 00:23:31,040 --> 00:23:35,840 Speaker 1: attention to regulatory arbitrage. We've seen innovation move abroad to 387 00:23:35,960 --> 00:23:40,479 Speaker 1: other countries, even Amazon. You know, the FAA wouldn't let 388 00:23:40,520 --> 00:23:46,159 Speaker 1: Amazon fly its drones ninth generation nearly ten years ago 389 00:23:46,480 --> 00:23:50,080 Speaker 1: on its own property outside, so it went to India 390 00:23:50,119 --> 00:23:52,920 Speaker 1: and elsewhere. I think the pressures on the FAA now. 391 00:23:53,920 --> 00:23:57,840 Speaker 1: And I also think that the bear market of twenty 392 00:23:57,880 --> 00:24:02,119 Speaker 1: one and twenty two eliminate a lot of other competition 393 00:24:02,240 --> 00:24:06,719 Speaker 1: that was brewing just the funding markets were closed, and 394 00:24:06,800 --> 00:24:13,280 Speaker 1: so I think this market is much more is that 395 00:24:13,680 --> 00:24:15,640 Speaker 1: both Jobie and Archer are going to have much more 396 00:24:15,640 --> 00:24:19,160 Speaker 1: share than otherwise would have been the case. So we're 397 00:24:19,200 --> 00:24:21,920 Speaker 1: pretty excited about the possibilities here. 398 00:24:22,080 --> 00:24:23,840 Speaker 3: Hey, Kathy, as you said, you know, one of the 399 00:24:23,880 --> 00:24:25,840 Speaker 3: things about ARC it certainly and it's the DNA, is 400 00:24:25,840 --> 00:24:28,560 Speaker 3: that you go places and take positions that other people 401 00:24:28,600 --> 00:24:31,399 Speaker 3: maybe don't do. And one of the things though that 402 00:24:31,440 --> 00:24:35,080 Speaker 3: increasingly I feel like the financial establishment again is interested 403 00:24:35,160 --> 00:24:37,119 Speaker 3: very much so is in crypto and I want to 404 00:24:37,160 --> 00:24:39,200 Speaker 3: talk about your spot bitcoin ETF if I may the 405 00:24:39,280 --> 00:24:41,440 Speaker 3: RC twenty one shares Bitcoin ETF. 406 00:24:41,960 --> 00:24:42,680 Speaker 1: What can you tell us. 407 00:24:42,600 --> 00:24:46,119 Speaker 3: About institutional interest in it? Is there or is it 408 00:24:46,240 --> 00:24:49,720 Speaker 3: mostly the funds that are going into it are mostly 409 00:24:49,760 --> 00:24:50,840 Speaker 3: from the retail side. 410 00:24:52,680 --> 00:24:57,880 Speaker 1: Well, we are. We know there's institutional interest because we're 411 00:24:57,920 --> 00:25:03,280 Speaker 1: talking to a lot of institutions, state treasurers and public 412 00:25:03,400 --> 00:25:08,040 Speaker 1: pension funds. And why is this Because they're trying to 413 00:25:08,080 --> 00:25:11,479 Speaker 1: figure out if this truly is a new asset class, 414 00:25:11,560 --> 00:25:14,159 Speaker 1: and if it is, they must have a point of 415 00:25:14,240 --> 00:25:18,840 Speaker 1: view as a fiduciary if there's a new asset class 416 00:25:18,920 --> 00:25:23,119 Speaker 1: which is uncorrelated or shows very low correlation in terms 417 00:25:23,119 --> 00:25:28,520 Speaker 1: of returns relative to other asset classes, than what an 418 00:25:28,560 --> 00:25:33,840 Speaker 1: asset allocator does is it will take a position to 419 00:25:34,119 --> 00:25:37,480 Speaker 1: increase returns per unit of risk. That's what happens with 420 00:25:37,600 --> 00:25:41,320 Speaker 1: low correlation of returns. So definitely, now are they moving 421 00:25:41,480 --> 00:25:46,879 Speaker 1: whole hog? Not yet. Nor are the big wirehouses like 422 00:25:46,920 --> 00:25:50,920 Speaker 1: the Morgan, Stanleys and Ubs as wells Fargo, marri Lynch 423 00:25:51,240 --> 00:25:55,400 Speaker 1: b of A. They are all waiting to see who 424 00:25:55,640 --> 00:25:58,560 Speaker 1: are the winners in terms of the ETFs because they 425 00:25:58,600 --> 00:26:01,600 Speaker 1: do not want to commit to an ETF that will 426 00:26:01,600 --> 00:26:07,840 Speaker 1: close down and makes sense and right so, and they 427 00:26:08,400 --> 00:26:11,200 Speaker 1: they're going to give it from what we're hearing three 428 00:26:11,359 --> 00:26:14,560 Speaker 1: to six to nine months, so everything the net inflows 429 00:26:14,600 --> 00:26:21,680 Speaker 1: that we've seen and are away from those two spaces. 430 00:26:21,720 --> 00:26:25,800 Speaker 1: Really it's part of it is our client base switching 431 00:26:25,880 --> 00:26:31,520 Speaker 1: from GPTC into and other client bases into the ETFs, 432 00:26:31,600 --> 00:26:33,040 Speaker 1: which are much lower. 433 00:26:32,800 --> 00:26:34,399 Speaker 3: Fee, all right, But I do want to also then 434 00:26:34,440 --> 00:26:36,520 Speaker 3: go to the next level, and that is an ether 435 00:26:36,640 --> 00:26:40,800 Speaker 3: ETF being approved maybe in May. Are you optimistic that 436 00:26:40,800 --> 00:26:43,360 Speaker 3: it's going to happen by that made deadline or what 437 00:26:43,400 --> 00:26:45,479 Speaker 3: obstacles might be still out there that it won't make 438 00:26:45,480 --> 00:26:46,120 Speaker 3: that deadline. 439 00:26:47,080 --> 00:26:52,200 Speaker 1: Yeah, So the biggest obstacle is staking, and I don't 440 00:26:52,320 --> 00:26:56,440 Speaker 1: think the regulators will allow staking in this first round 441 00:26:56,560 --> 00:27:00,159 Speaker 1: if they allow the first round at all. Now, we 442 00:27:00,320 --> 00:27:04,479 Speaker 1: and one other firm are are we'll see our final 443 00:27:04,560 --> 00:27:09,959 Speaker 1: deadline in May if they reject. If they reject our filings, 444 00:27:10,040 --> 00:27:14,679 Speaker 1: then we'll have to refile. But my guess is my 445 00:27:14,760 --> 00:27:17,880 Speaker 1: guess is they will move more now to a first come, 446 00:27:17,960 --> 00:27:22,320 Speaker 1: first serve when this next round goes through. So if 447 00:27:22,320 --> 00:27:26,960 Speaker 1: it's May, it'll be without staking. If it's later, there's 448 00:27:27,119 --> 00:27:33,040 Speaker 1: a better chance for staking. If it's in I would 449 00:27:33,080 --> 00:27:38,280 Speaker 1: say twenty twenty five because I think legislators and legislation 450 00:27:38,840 --> 00:27:42,639 Speaker 1: is starting to get involved here and taking it away 451 00:27:43,280 --> 00:27:45,880 Speaker 1: from simply the regulators. 452 00:27:46,200 --> 00:27:48,639 Speaker 3: Hey, Kathy, I don't want to leave without asking you. 453 00:27:48,680 --> 00:27:51,520 Speaker 3: It is International Women's Day, and I think about your path. 454 00:27:52,240 --> 00:27:53,679 Speaker 3: We Tim and I have been talking a lot to 455 00:27:54,760 --> 00:27:58,080 Speaker 3: many women who have made their way in male dominated fields, 456 00:27:58,160 --> 00:28:01,760 Speaker 3: and I'm just curious and how you think about your 457 00:28:01,800 --> 00:28:04,560 Speaker 3: trajectory from where you started and what you've achieved. You 458 00:28:04,600 --> 00:28:07,200 Speaker 3: started two firms or have co found one and started 459 00:28:07,240 --> 00:28:11,320 Speaker 3: your own firm, how you think about that path and 460 00:28:11,440 --> 00:28:14,680 Speaker 3: what is top of mind in terms of those other 461 00:28:14,880 --> 00:28:16,760 Speaker 3: individuals and other women that are out there that are 462 00:28:16,800 --> 00:28:17,840 Speaker 3: maybe trying to do the same. 463 00:28:19,640 --> 00:28:23,439 Speaker 1: Yes, well, I think the most important thing in early 464 00:28:23,560 --> 00:28:27,520 Speaker 1: years is to make your own bosses look brilliant because 465 00:28:27,880 --> 00:28:32,479 Speaker 1: younger people, younger people coming into the business know so 466 00:28:32,600 --> 00:28:36,159 Speaker 1: much more about technology and where the world is going 467 00:28:36,560 --> 00:28:41,400 Speaker 1: almost innately then shall I say, more seasoned investors. So 468 00:28:41,560 --> 00:28:45,840 Speaker 1: just make your bosses look brilliant and educate them, and 469 00:28:46,040 --> 00:28:52,320 Speaker 1: you know, generate enthusiasm, enthusiasm, excitement, energy around around ideas 470 00:28:53,200 --> 00:28:56,000 Speaker 1: and make sure you have good mentors if they're not 471 00:28:56,040 --> 00:28:59,040 Speaker 1: giving you a good shot after you've made them look brilliant, 472 00:28:59,240 --> 00:29:02,840 Speaker 1: you know, time to So that's one thing as far 473 00:29:02,880 --> 00:29:08,000 Speaker 1: as starting a business, I would say, make sure there's 474 00:29:08,040 --> 00:29:11,080 Speaker 1: an unmet need. In our case. In the case of ARC, 475 00:29:12,240 --> 00:29:16,120 Speaker 1: what we saw was the traditional world going more passive 476 00:29:16,360 --> 00:29:22,000 Speaker 1: or benchmark sensitive, when we saw an explosion of innovation 477 00:29:22,240 --> 00:29:25,880 Speaker 1: thanks to the five major innovation platforms around which we 478 00:29:25,880 --> 00:29:29,200 Speaker 1: have centered our research and investing, and so I said 479 00:29:29,280 --> 00:29:33,160 Speaker 1: to myself, you know, someone has to do this, and 480 00:29:34,720 --> 00:29:37,760 Speaker 1: so we went off, and honestly, I think most people 481 00:29:37,840 --> 00:29:40,480 Speaker 1: thought we would fail for a couple of reasons. One, 482 00:29:41,000 --> 00:29:46,280 Speaker 1: we put a truly active, fully transparent equity portfolio inside 483 00:29:46,400 --> 00:29:49,560 Speaker 1: an ETF wrapper, and that had not been done at 484 00:29:49,640 --> 00:29:53,760 Speaker 1: scale at all, and no one it was a passive 485 00:29:53,800 --> 00:29:57,080 Speaker 1: world that we had entered. And then the second was 486 00:29:57,360 --> 00:30:02,280 Speaker 1: we're benchmark agnostic. You can put us against any benchmark, 487 00:30:02,720 --> 00:30:04,760 Speaker 1: and you're going to have to give us some time 488 00:30:05,080 --> 00:30:08,800 Speaker 1: after the massive interest rate shock that we went through 489 00:30:09,120 --> 00:30:11,840 Speaker 1: and now we're on the other side and and you know, 490 00:30:11,960 --> 00:30:15,920 Speaker 1: performing better as a result over the last year. But 491 00:30:16,200 --> 00:30:19,960 Speaker 1: over time, these innovations are going to transform the world 492 00:30:20,040 --> 00:30:26,520 Speaker 1: and create massive wealth with AI as back to back 493 00:30:26,560 --> 00:30:30,400 Speaker 1: to that topic as the main catalyst, so we could 494 00:30:30,600 --> 00:30:32,320 Speaker 1: be more optimistic about innovation. 495 00:30:32,680 --> 00:30:34,760 Speaker 3: All right, kind of leave it there, Kathy, as always 496 00:30:34,800 --> 00:30:37,000 Speaker 3: so appreciate all the time that you do give us. 497 00:30:37,040 --> 00:30:40,360 Speaker 3: Have a great weekend, Kathy would of course the founder, CEO, 498 00:30:40,440 --> 00:30:43,400 Speaker 3: and CIO of ARC Invest joining us from Florida. Kathy, 499 00:30:43,400 --> 00:30:43,920 Speaker 3: thank you.