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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along
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Speaker 2: Timor is definitive at Fidelity with our question look on LinkedIn.
Speaker 2: It's the best place to see this. The absolute smartest
Speaker 2: combination of economics and finance in the charts, technical analysis,
Speaker 2: and it's so good. I'm going to put this up
Speaker 2: for YouTube. I took a screen grab of my most
Speaker 2: important chart of the second quarter. It's of course from
Speaker 2: mister timmor of Fidelity. E'ine. It's real simple use of
Speaker 2: cash earnings to twenty five. I got a linear growth
Speaker 2: and dividends seventy five dollars and I got ninety dollars
Speaker 2: in share buyback corporations are generating seventy three percent payout
Speaker 2: on those earnings of two hundred and twenty five dollars.
Speaker 2: Does that continue? Yeah?
Speaker 3: And you know, and this is the reason why the
Speaker 3: US trades at a premium to most of the rest
Speaker 3: of the world, because the share buyback culture is somewhat unique.
Speaker 3: I mean, it happens in other places. But the payout
Speaker 3: of seventy three percent, which is actually below where it
Speaker 3: has been over the past decade or so, was closer
Speaker 3: to ninety percent. But if you think about it from
Speaker 3: a DCF you know, discount of cashlow model perspective. If
Speaker 3: you're a shareholder and you're getting more of the company's
Speaker 3: earnings return to you in one way or the other,
Speaker 3: that commands a higher premium, right, And so that's why
Speaker 3: the US has traded, you know, more more expensive, I guess,
Speaker 3: but it's well earned. And if the big free cash
Speaker 3: flow generators continue to generate that cash flow, then I
Speaker 3: suspect it will continue.
Speaker 2: So there's this dovetail with Michael Mobison's work, which what's
Speaker 2: more important now is the annual payout along the continuum
Speaker 2: rather than the terminal rate. Insanity we were lectured on
Speaker 2: in school. Is the actual yearly payout that you describe
Speaker 2: more important than some phony calculation of terminal value?
Speaker 3: Well, you know, you're getting into the ways of the
Speaker 3: DCF model, which is both so elegant and frustrating at
Speaker 3: the same time, because there are there are so many variables, right,
Speaker 3: you have earnings growth, you have to payout, you have
Speaker 3: the risk free rate, and you have the equity risk premium.
Speaker 3: And it's elegant because you can explain the market through
Speaker 3: every variable, including sentiment, which I think the risk premium
Speaker 3: is a reflection of. But you also can never solve
Speaker 3: for four variables at once. That makes it frustrating. So
Speaker 3: you have to isolate. So the terminal rate versus the
Speaker 3: next five years growth, I just assume that it's going
Speaker 3: to be six percent. The terminal rate is the ten
Speaker 3: year treasury yield, and then I saw for the risk
Speaker 3: premium because you have to isolate something.
Speaker 2: Paul I was in Boston near the state House, a
Speaker 2: lovely or in seventeenth century state house whatever, the red
Speaker 2: brick building there, and some guy next to me is
Speaker 2: going on on DCF. Peter Lynch through a snowball.
Speaker 4: At him, So you're in I mean, I know a
Speaker 4: lot of companies when they come through Boston, they come
Speaker 4: into the Fidelity offices to meet with you guys. When
Speaker 4: you're talking about use of cash, how do you and
Speaker 4: I'm sure a lot of these companies say, hey, what
Speaker 4: would you like to see dividends or buybacks or what
Speaker 4: kind of mix? How do you answer that question for
Speaker 4: these companies?
Speaker 2: Well, that's a good question.
Speaker 3: I guess it depends. I mean, dividends are sort of,
Speaker 3: you know, like a sacred commitment, right, so if you're
Speaker 3: going to pay a dividend, you better not take it away.
Speaker 3: And buybacks are more variable. Right, If you have the
Speaker 3: cash flow buy back the share, then the question is
Speaker 3: do you buy back shares or do you spend it
Speaker 3: on capex? And actually, it's interesting that the capex as
Speaker 3: a percent of revenues has been increasing and maybe that's
Speaker 3: part of the whole AI boom. But that's obviously good
Speaker 3: to see. But it comes down to, you know, the
Speaker 3: productive views of your cash. And if you're generating so
Speaker 3: much cash that even after satisfying capex, it's just sitting
Speaker 3: on your barance sheet, well then you might as well
Speaker 3: return it to shareholders, because that is part of the
Speaker 3: of math.
Speaker 4: How about for our good friends in Cooper Tino, Tim Cook, Apple,
Speaker 4: you know, they pay just a token dividend. We've seen
Speaker 4: Meta initiate a token dividend. What do you say to
Speaker 4: the technology companies when they come through your offices about, okay,
Speaker 4: thank you for the jillion dollar buy back, But would
Speaker 4: a three percent dividend yield kill you? I mean, do
Speaker 4: you have those conversations with the big tech companies.
Speaker 3: I think for the growthier companies, I think generally they
Speaker 3: have paid less individends than for instance, you know a
Speaker 3: bank or you know a consumer stable. And I think
Speaker 3: that's just part of the of the structure of different sectors.
Speaker 3: And so as long as it comes back, you know, again,
Speaker 3: if the cash is used for productive purpose CAPEX, whatever
Speaker 3: your R and D, then that's fine. If it's not used,
Speaker 3: whether it comes back as a dividend or as a buyback,
Speaker 3: you know, I guess ultimately it doesn't matter too much.
Speaker 3: Probably a dividend would command a higher pre because it's
Speaker 3: less likely to go away, But for growth companies it's
Speaker 3: I don't think it's generally expected.
Speaker 2: You're in a technical question, folks, inside baseball. Here, come
Speaker 2: with us. It's a global Wall Street question. You're in timmer.
Speaker 2: The return on invested capital of Nvidia is fifty four percent.
Speaker 2: The EVA spread, we're not going to go on the
Speaker 2: details now, is a mind blowing forty two percent. If
Speaker 2: they migrate to trend, can their stock hold up that?
Speaker 3: That is a good question. You know, you get into
Speaker 3: that super growthy space and you start looking at not
Speaker 3: just the second derivatives, but the third derivatives, you know,
Speaker 3: and so that's always a tough question. It depends on,
Speaker 3: you know, how crowded the space is, what the valuations are.
Speaker 3: One thing I'll tell you is that, you know, I've
Speaker 3: looked at this concept of the nifty to fifty, and
Speaker 3: of course we're down to the MAC seven, but generally
Speaker 3: speaking the nifty fifty I study that very carefully, going
Speaker 3: back to the early seventies, which was the original nifty
Speaker 3: to fifty, and when you see periods of these big
Speaker 3: growth companies really dominating, as we did in the early
Speaker 3: seventies and the late nineties, at the end of the day,
Speaker 3: those companies traded at a x multiple to the rest
Speaker 3: of the market, and today the top fifty are trading
Speaker 3: only at about a thirty percent multiple, So maybe there's
Speaker 3: still some room to go because most of their performance
Speaker 3: has been justified by earnings.
Speaker 2: Just just great, you're in Timmor, Thank you so much
Speaker 2: to Fidelity. We're going to take a measured conversation right
Speaker 2: now with mister Ives. Dan Ives is Opiniata. He's senior
Speaker 2: equity pinata at Wedbush Securities. Everybody loves to hate him.
Speaker 2: And my problem is if I have a look at
Speaker 2: you know, if I don't look at a daily charter
Speaker 2: in every fifteen minutes chart like Scott looks at over
Speaker 2: at the dusk Star, Dan Eyes, I'm looking at a
Speaker 2: monthly chart of Apple and it is beyond elegant, bouncing
Speaker 2: off my long term moving average at one sixty six.
Speaker 2: It's up sixteen percent in the last x number of
Speaker 2: days and weeks. First of all, Dan Eyes, why is
Speaker 2: Apple up sixteen percent?
Speaker 5: Because investors are anticipating not just what's gonna happen in
Speaker 5: WWDC where they're gonna release cook and cup Patina, the
Speaker 5: AI strategy. But if you look at numbers coming out
Speaker 5: of you know, our Asia checks and others, you're seeing
Speaker 5: a stabilization of iPhone demand and I think a renaissance
Speaker 5: of growth right now on the horizon for Apple.
Speaker 2: Okay, I don't want to do a fanboy thing here
Speaker 2: at Dan Eyes, but I'm absolutely blown away by the
Speaker 2: resolution from the M four chip over to the fancy iPad.
Speaker 2: Are they going to cannibalize other Apple products or are
Speaker 2: they going to stand on their own?
Speaker 5: I think it stands on its own. Look, I mean,
Speaker 5: you've come about us a lot, the chips that they
Speaker 5: beat in till it's their own game, and I think
Speaker 5: now you'll have a legit refresh on iPads. But it
Speaker 5: shows the power of those chips. And the important thing
Speaker 5: is that those chips too, they're going to be able
Speaker 5: to ultimately navigate and deploy AI features within the broader
Speaker 5: Coupertino ecosystem, and that's why most are going to access
Speaker 5: AI in the future through an Apple device. Hey, Dan, you.
Speaker 4: Know, as Tom mentioned this, Apple's up sixteen percent over
Speaker 4: the last period of time here several days and weeks.
Speaker 4: What's the call on China these days? How's the market
Speaker 4: viewing the China? I'm going to call it a risk
Speaker 4: for Apple. How's the market digesting and discounting it?
Speaker 5: Yeah, Paul I think it went from a huge risk
Speaker 5: to what we've seen, especially at our checks in Taiwan
Speaker 5: this week, steaveisition to an uptick. So I think we're
Speaker 5: starting that market's starting to sniff out not just a steaveisition,
Speaker 5: but an uptick in China. And at that point, I mean,
Speaker 5: that's that's cook drinking a mimosa, because then you now
Speaker 5: start to see an upgrade cycle take place with the
Speaker 5: biggest event we've seen in a decade with AI Common Apple.
Speaker 4: All right, so June this developer conference. What should the
Speaker 4: market expect here? What do you think is going to
Speaker 4: happen there?
Speaker 5: So I think look summer, fearing it will be a
Speaker 5: hype event, I strongly disagree. I think this is the
Speaker 5: start of essential Whi's going to be AI To developers,
Speaker 5: you're gonna it's really the start of a new AI
Speaker 5: app store from a services perspective. And I think the
Speaker 5: features that they're gonna build in right, not just the
Speaker 5: room but open AI that they're ultimately introduced, I think
Speaker 5: that's a partnership, right, that's gonna be exclusive and important.
Speaker 2: One more Apple question. I really want to go financial,
Speaker 2: but I'm going to stay on the fanboy stuff. Dan
Speaker 2: I what am I actually gonna do with AI with Apple?
Speaker 2: If I've got the iPad and the pencil pro and
Speaker 2: I miss her artsy FARTSI what's AI going to do
Speaker 2: for me? Where I look like I'm not making Popeye
Speaker 2: as a comic strip.
Speaker 5: Well, first off, I think the big thing, especially with
Speaker 5: open AI and some of these LM features, Apple is
Speaker 5: really trying to get you to almost bypass things like
Speaker 5: Google and some of the traditional search. But I think
Speaker 5: the biggest thing is just the features that you're gonna
Speaker 5: see come out on healthcare, on consumer apps, on generative AI.
Speaker 5: It's all gonna be apps. Developers are going to be
Speaker 5: building AI, generative AI driven apps on the iOS foundation,
Speaker 5: and that's and that's the key in the future. It's
Speaker 5: all gonna be mostly through Apple device. But that's what
Speaker 5: Microsoft is fighting this week. They want to be He
Speaker 5: said that from a consumer perspective.
Speaker 2: And now the obligatory in video questions.
Speaker 4: Paul Sweeney, So, Dan, I mean Tom Kean's all about
Speaker 4: AI here? What's he gonna what should he be looking
Speaker 4: for tomorrow afternoon? When when in video reports.
Speaker 5: I think, get get the popcorn ready and get all set.
Speaker 5: You know your favorite you know, beverage when they were
Speaker 5: port Because when the Godfather of Ai Jensen and a
Speaker 5: video report, I think it's gonna be another jaw dropper
Speaker 5: in terms of the demand that we're seeing. It's not
Speaker 5: slowing down, and I think we're just starting to see
Speaker 5: this acceleration. And that's important for the second, third, fourth
Speaker 5: derivatives within tech, which is why we believe this tech
Speaker 5: bull market has significant legs from here. But it all
Speaker 5: starts with odd Father of Ai Jensen. Tomorrow, I'm expecting
Speaker 5: another just drop the micro yeah.
Speaker 2: I mean he's going on existential on it. So the
Speaker 2: third and fourth derivative as well, Where does Apple fit
Speaker 2: into the derivatives? I mean they're not first or second derivative,
Speaker 2: are they? They're a follow on from all these other people, right.
Speaker 5: I think they're second, third driven because when we go
Speaker 5: my nvideo Microsoft Google service, now that's enterprise, but on
Speaker 5: the consumer side, the chips and the actual use cases,
Speaker 5: how are they coming to the consumer? It's meta Google,
Speaker 5: but most importantly it's Apple. And that's why now this
Speaker 5: is ready for prime time starting next month at WWC.
Speaker 5: That's where the unveil starts and eventually the iPhone sixteen,
Speaker 5: I will have their own AI features built in.
Speaker 6: Hey, Dan, who goes to this?
Speaker 4: I mean is can top king get a ticket to this?
Speaker 5: The King could get a t it anywhere. So he's
Speaker 5: like Gilms have to exclude him. I mean, he's he's
Speaker 5: one of those exclusive you know, Monaco. But for the
Speaker 5: average this is really for developers. Yep, it's for industry folks.
Speaker 5: That's really the focus of WWBC what we'll be at.
Speaker 2: What are you doing with your two hundred and fifty
Speaker 2: dollars price target? You're an outlier? But seriously, Dan ives
Speaker 2: some of the parts are earnings momentum as they come
Speaker 2: off the mat of sixteen percent? Are you ready to
Speaker 2: adjust that up so we can make some news this morning.
Speaker 5: Look to fifty's base case. We I believe AI will
Speaker 5: add thirty to forty dollars per share to this Apple
Speaker 5: story over the coming years. And that's why I think
Speaker 5: four trillion will be what we'll be talking about a year.
Speaker 2: Go go first, de rivet And what's it do to Microsoft? Oh?
Speaker 5: I mean, Mike, I think Microsoft that they're in there
Speaker 5: right now in the in the leader seat. From an
Speaker 5: enterprise perspective, I mean, if the mount Rush of Ai.
Speaker 5: It's Gentsen there carving that out. Who's next to It's Nadella.
Speaker 2: Can you see Mount Rushmore? Jensen Dyan Ives. I mean,
Speaker 2: it's just it would be too much, Dan Ives, I
Speaker 2: could just see you on Mount Rushbort, thank you so much.
Speaker 2: With Webb Bush, you can send your hate mail to
Speaker 2: mister Is directly, or I get the hate mail too.
Speaker 2: If you have love notes for Dan and Ives, they
Speaker 2: go through a Lisa and Tao. Mister Is with Wedbush,
Speaker 2: he is enthusiastic on America's technology darkening the door of commerce.
Speaker 2: A number of years ago, an academic from the Upper
Speaker 2: East Side of the Council on Foreign Relations, Elizabeth Economy,
Speaker 2: went down to assist the Governor of Rhode Island with
Speaker 2: Commerce Ford. Elizabeth Economy joins us, right now, she's free
Speaker 2: from the clutches of our public service. What was the
Speaker 2: first day like it it Commerce? Did they put a
Speaker 2: cork in your mouth and just say be nice? What
Speaker 2: was the first day like?
Speaker 1: I don't think they knew what to expect.
Speaker 2: Yeah, exactly.
Speaker 1: Honestly, there were only about fifty people working there at
Speaker 1: the time because it was right in the middle of
Speaker 1: the pandemic, and the only people that were showing up
Speaker 1: for work were the secretary is kind of immediate, twenty
Speaker 1: to thirty people on the fifth floor, So it was
Speaker 1: like a ghost town. But it was a great, great opportunity,
Speaker 1: and she's just fantastic.
Speaker 2: And just to remind people Elizabeth Economy years ago out
Speaker 2: of Michigan where the river runs black. It was just
Speaker 2: in a profoundly changing book on China's pollution right now,
Speaker 2: an all series of books along the way. I want
Speaker 2: to go to your foreign affairs blistering essay and without
Speaker 2: going into the details within the confines of the length
Speaker 2: of this interview, what should the US do? Are you
Speaker 2: allowed to say this now? Are you like in a
Speaker 2: timeout chare for six months.
Speaker 1: After leaving no notice? What should we read the restrictions on?
Speaker 2: How do we respond to your blistering essay of China's plan?
Speaker 1: I think the point that I was really trying to
Speaker 1: make in the piece was that the United States has
Speaker 1: done a really good job of responding in the first
Speaker 1: couple of years of the administration to the immediate challenge
Speaker 1: that China poses, But now we really need to expand
Speaker 1: to the global stage and pay attention to how China,
Speaker 1: through its Belton Road Initiative, through its Global Civilization Initiative,
Speaker 1: It's security initiative, It's development initiative, all of these things
Speaker 1: are designed to transform the international system in ways that
Speaker 1: are anathetical to the US, and so that necessitates a
Speaker 1: new strategy, a kind of second tier strategy from the
Speaker 1: United States, which is much more than simply focusing on
Speaker 1: our European and our Asian allies, but really expanding our
Speaker 1: tent to include emerging economies in Latin America and Africa
Speaker 1: and Southeast Asia and bringing them into an American vision
Speaker 1: of the world for the twenty first century.
Speaker 4: I guess I grew up on Global Wall Street, where
Speaker 4: globalization was the thing that was my career with China,
Speaker 4: should we try to engage with China? Should that be
Speaker 4: our first order business to try to engage with China?
Speaker 4: Or where should we step back and say, this is
Speaker 4: almost like I don't know the Soviet Union from back
Speaker 4: in the day. I mean, how should we engage with Chinese?
Speaker 1: So I think, for you know, thirty thirty five years
Speaker 1: we had ninety percent engagement, ten percent competition. Right now
Speaker 1: we're basically at ninety percent competition. And ten percent engagement.
Speaker 1: I think actually, unfortunately, we've got it about right at
Speaker 1: this point. I think we need to understand that China
Speaker 1: is not interested in the kind of engagement that we've
Speaker 1: you know, pursued for thirty some years. They have their
Speaker 1: own vision, They want their own norms, their own values,
Speaker 1: their own interests reflected on the global stage.
Speaker 2: Your your book The Third Revolution was in my book
Speaker 2: of the Summer. You know, it seems ages ago pandemic
Speaker 2: ago as well. In it, you were really controversial about
Speaker 2: the power that presidency has in China. Has he solidified
Speaker 2: his power? Is he impregnable now?
Speaker 1: I don't know whether anyone is impregnable. Certainly he's done
Speaker 1: an amazing job of bringing institutional power into his own hands.
Speaker 1: What we don't know is, you know, how much his
Speaker 1: personal power actually radiates through society. What is the real
Speaker 1: legitimacy of chi jinping among the Chinese people. We have
Speaker 1: some polls, for example, that show that urban Chinese would
Speaker 1: really like to have greater freedom of speech, they'd really like,
Speaker 1: you know, greater property rights, the right to assemble. I
Speaker 1: think you can look and see a lot of dissatisfaction
Speaker 1: in the country if you look beneath the surface. You know,
Speaker 1: we don't have one hundred and eighty thousand protests on
Speaker 1: the streets the way we used to because Sheijinping is
Speaker 1: put in place is incredible repressive apparatus. But that's not
Speaker 1: to say discontent is not still there the.
Speaker 2: Heart of the matter. And folks, I attended to the
Speaker 2: Consulum for Relations where I'm a member of very important
Speaker 2: conference by Jina Romando. I've got a Paul as you mentioned,
Speaker 2: a business globalization structure debating China, and I've got a
Speaker 2: president of the United States word about four swing states,
Speaker 2: so he's anti China, and the candidate for the Republican Party,
Speaker 2: I believe is anti China as well. Are we able
Speaker 2: to have a kojin discussion on China now? Are we
Speaker 2: literally back to Shang Kai shek in the ballet post
Speaker 2: World War Two?
Speaker 1: I think that we're able to have a cojin discussion,
Speaker 1: But the parameters have shifted so that it's there's a
Speaker 1: new realization about the real challenge that China presents. I
Speaker 1: think we don't want to sort of go down the
Speaker 1: rabbit hole where everything is about competition. We need to
Speaker 1: do what the Biden administration started out to do, which
Speaker 1: is to look for areas of common ground and common purpose,
Speaker 1: to try to find communication channels on the mil to
Speaker 1: military to military cooperation. We don't want this relationship to
Speaker 1: devolve into kinetic conflict. But it's also true that we
Speaker 1: recognize we can't continue that globalization without any protection for
Speaker 1: the American economy. You can argue whether we're too far
Speaker 1: swinging too far in one way. You can argue whether
Speaker 1: or not we actually have been very clear about what
Speaker 1: we're doing in terms of our economic strategy on the
Speaker 1: grounds of national security or economic security or economic competitiveness.
Speaker 6: I think we can do a better job there.
Speaker 2: I'm running on a time. Can you make this a
Speaker 2: weekly appointment? You know, Elizabeth, Economy. We've deployed four military
Speaker 2: bases in a new military effort from the northern Philippines
Speaker 2: down to somewhere in the vicinity of Indonesia. We've got
Speaker 2: to build out in Australia, et cetera, et cetera, et cetera.
Speaker 2: Is the Pentagon going to be our state department to
Speaker 2: China in the next five years. No.
Speaker 1: I think the Commerce Department has been our state department
Speaker 1: and good thing too, because its secretary is really the star. No,
Speaker 1: I mean, I think our economic strategy has.
Speaker 2: Rich she's still working for the government or not. Did
Speaker 2: I look at the memo? No?
Speaker 1: I think again, we've you know, enacted so many different
Speaker 1: kinds of new economic policies that have a pretty significant
Speaker 1: impact on China. I think that has been our first
Speaker 1: foot forward. But it's also true that if looking at
Speaker 1: issues like Taiwan or as you're suggesting, the Philippines in
Speaker 1: the South China, see the military has to.
Speaker 2: Be How long is Ted Burns over there, a good
Speaker 2: friend of the show, Nicholas Burns out of Wellesley and
Speaker 2: all of his public service as well. Is our State
Speaker 2: department alone in Beijing?
Speaker 1: No, No, I think he's done an amazing job of engaging,
Speaker 1: frankly with our other ambassadors from our allies and partners,
Speaker 1: you know. So he's he's got a lot of support,
Speaker 1: a lot of friends. I think in the earlier days
Speaker 1: of the pandemic it was extremely difficult, but he's been
Speaker 1: an amazing ambassador.
Speaker 2: At least it wants to know. I mean, do you
Speaker 2: really think that high school kids now should pick up
Speaker 2: Mandarin is a third language?
Speaker 6: Absolutely?
Speaker 1: Absolutely, absolutely, we need the next generation of China scholars
Speaker 1: and China policymakers. We need people to be informed about
Speaker 1: this country. You know, it's one point three some billion
Speaker 1: people of second you know, largest economy, largest military. Why
Speaker 1: do we not want to be expert.
Speaker 2: In everybody on's a new book? What are you doing here?
Speaker 2: You are you slacking off? Six hours today? Right?
Speaker 1: Polarized polity, looking at polarization in China, arguing that it's
Speaker 1: easily as China, easily as polarized as the United States,
Speaker 1: and implications for China's future can Alho.
Speaker 2: What's your name is? Scarlett Johansson? Is that? How do
Speaker 2: you pronounce her name?
Speaker 5: Joe Hanson?
Speaker 2: Joe Hansson?
Speaker 1: Did you starring as?
Speaker 2: She?
Speaker 6: Didn't p anytime soon?
Speaker 2: When does this? When does his tone come out?
Speaker 1: Let's let's call it two and a half years, two and.
Speaker 2: A half years great Elizabeth Economy, do not be a
Speaker 2: stranger her public service to the nation at commerce now
Speaker 2: ascons to the consul and foreign relations definitive China. Look
Speaker 2: for writings. I can't say enough about her first effort
Speaker 2: for Foreign Affairs magazine. Look for that. It's a blistering essay,
Speaker 2: a to do list for America with China. You did
Speaker 2: to look at the front pages around the world a
Speaker 2: foundation to what we do. You're including our newspaper cent
Speaker 2: I glanced at at least this is a great lineup
Speaker 2: you got today. Where do you start?
Speaker 7: Yeah, we're starting. This is an interesting article in the terminal.
Speaker 7: You can check it out for yourself. Florida being hit
Speaker 7: by this surge in commercial property insurance bills and because
Speaker 7: of that it's causing a major issue there. I'll get
Speaker 7: to that in a second. I want to break down
Speaker 7: the numbers though. In the five year period ending twenty
Speaker 7: twenty three, costs surged one hundred and twenty five percent.
Speaker 7: Last year, premiums so twenty seven percent for the second
Speaker 7: year in a row. So because of that, more nursing
Speaker 7: homes they're starting to close down each year. The cost
Speaker 7: of senior care is starting to rise. Two things are happening.
Speaker 7: So you have climate change, you have more you know, hurricanes,
Speaker 7: stronger hurricanes, and then you have the challenge of caring
Speaker 7: for an elderly growing population. So you have those things
Speaker 7: starting to collide together. And now because of that, there's
Speaker 7: this issue where are the elderly going to live? Because
Speaker 7: they all like you know, to go down to Florida
Speaker 7: for the warmer weather, lower tax Yep, that.
Speaker 2: Was years ago. Do they want to go down there now?
Speaker 2: I don't know, because you know, what I've seen is
Speaker 2: a couple of good articles. I'll give the Wall Street
Speaker 2: Journal a shout out on this and the exodus of
Speaker 2: middle class people from Florida. They're going up to Georgia,
Speaker 2: North Carolina, you know the low country that is.
Speaker 4: Yeah, with Florida being threatened by more powerful hurricanes, commercial
Speaker 4: property insurance costs last year surged at nearly five times
Speaker 4: at the national pace. That's that's a problem.
Speaker 7: It's it's a and if these more theies retirements and
Speaker 7: also closing down, I mean.
Speaker 4: Florida, they can't take all these people that have been
Speaker 4: coming down. I would think they'd have an issues with
Speaker 4: schools or housing or water.
Speaker 2: I mean, somebody in the last twenty four hoursand I
Speaker 2: guys had a whole thing on Coral Gables. Yeah, I
Speaker 2: mean I look seriously at Coral Gables. About seven years ago.
Speaker 2: It was really I just didn't want to get out
Speaker 2: of the triple averaged all cash fire. But the answer
Speaker 2: is Florida isn't Miami, Florida isn't just Coral Gables and
Speaker 2: hedge funds and you know all the other fans, you
Speaker 2: know the life of my it's just you know, there's
Speaker 2: a whole other floor.
Speaker 7: Well, the thing is it's hard to find a play.
Speaker 7: My mom's in Naples, and when she had to move
Speaker 7: places from one retirement community to another, it was.
Speaker 6: Hard to Like, you're on waiting list. I mean it's
Speaker 6: it's hard to funking place.
Speaker 7: So and with more closing down, I'm just okay, you're
Speaker 7: sitting in Jersey, you're sitting the show.
Speaker 5: Okay.
Speaker 7: Next, the highest paid CEOs of twenty twenty three. Okay,
Speaker 7: this is from the Wall Street Journal. They did an
Speaker 7: analysis more than four hundred companies from my log iq. Okay,
Speaker 7: so they found that half of the executives made at
Speaker 7: least fifteen point seven million. That's a record for this survey.
Speaker 7: Several making abouts more than fifty million. The highest paid
Speaker 7: S and P five hundred CEO and twenty twenty three
Speaker 7: goes to broadcoms Hoc Tan, who made one hundred and
Speaker 7: sixty two million dollars. There are certain stipulations, though, we
Speaker 7: had to stand the job for five years, and broadcomes
Speaker 7: share price has to reach certain targets after twenty twenty
Speaker 7: five of October to get that full value. Then he
Speaker 7: was followed down by Polo Alto Networks, Nikesh Aurora and
Speaker 7: third Blackstones Stevens.
Speaker 4: Every single year he's there, Stevens, is it is it?
Speaker 2: Is it appropriate to put equitized risk into compensation studies?
Speaker 4: Tom, the scam, the however you want to phrase it.
Speaker 4: The the structures are basically stock based compensation. It sounds
Speaker 4: good to shareholders. It's based upon metrics that can be
Speaker 4: you know, managed, whether it's cash flow free, cash flow earnings, whatever.
Speaker 4: You can run your business to reach those metrics to
Speaker 4: achieve hurdles. So those hurdles to achieve your stock based
Speaker 4: at risk compensation. And that's what Corporate America and the
Speaker 4: boards and we and shareholders quite frankly and basically signed onto.
Speaker 4: And that's kind of where we are.
Speaker 6: Stock awards that grow in their compensation packages. I'll tell
Speaker 6: you this one. You heard it come out. Scarlet scarlet Johannes,
Speaker 6: huge scarlet Johan. Yes, I think maybe Okay got you
Speaker 6: on that one. She has lawyered up.
Speaker 7: She's fighting backs against open AI for a voice that
Speaker 7: she says sounds like hers.
Speaker 6: So the backstory is voice. In September, she.
Speaker 7: Got an offer from open Ai Sam Altman to be
Speaker 7: the voice of this audio feature for the chat Chept, but.
Speaker 6: She decided to pass on it.
Speaker 7: But then last week open Ai released these new tools
Speaker 7: that included this voice called Sky, and she says it
Speaker 7: sounded just like hers. Altman saying the voice is not hers.
Speaker 7: It was not intended to sound like her. They had
Speaker 7: a you know, a voice actor before even approaching her.
Speaker 7: Open Aye did take down that voice it's called Sky,
Speaker 7: replace it with another voice called Juniper.
Speaker 6: But you see this.
Speaker 2: What she believes is her voice.
Speaker 7: Yes, but it's the point is the battle that you know,
Speaker 7: the strikes were behind it too.
Speaker 6: You know, AI fighting these deep face a.
Speaker 3: Lot Hollywood for the next five years.
Speaker 2: Oh my goodness.
Speaker 4: True and looking at the Bloomberg Bloomberg reporting here that
Speaker 4: Johnson has waited into legal issues in Hollywood before. In
Speaker 4: twenty twenty one, the actress sued Walt Disney, claiming the
Speaker 4: entertainment company broke its promises to release her latest film,
Speaker 4: Black Widow only movie theaters when it made available for streaming.
Speaker 2: So I haven't said this publicly, but Opening I got
Speaker 2: in touch with me about eight months ago, and they said,
Speaker 2: we'll pay you not to use your thoughts.
Speaker 6: I was like, theyre going to use your foot I
Speaker 6: don't care.
Speaker 2: No, they said, it's so bad.
Speaker 6: Ah, we'll pay you to go away.
Speaker 2: Thank you.
Speaker 6: Last one Red Lobster.
Speaker 7: We told you it was filing for bankruptcy, right, But
Speaker 7: now everyone is flushing in.
Speaker 6: They want to get their last meals.
Speaker 7: There, even take home a piece of nostalgia, some of
Speaker 7: the history from there. That twenty dollars oh you can
Speaker 7: eat shrimp deal in June.
Speaker 6: It really killed him.
Speaker 7: But people love the affordable price for seafood that they
Speaker 7: can get there, and that's why people keep going back.
Speaker 7: They say they like the nostalgia they had, you know,
Speaker 7: family parties, birthday parties. And actually Elon Musk did tweet
Speaker 7: that he was unhappy when he.
Speaker 6: Found out that they were filing for bankruptcy. He said,
Speaker 6: too bad.
Speaker 7: I have some fond memories from a long time ago
Speaker 7: eating at Red Lobster. So people have been trying to
Speaker 7: buy certain things when those stores close out, like some
Speaker 7: of the kitchen stuff. They want to buy the Lobster tanks.
Speaker 7: So they want like a piece of the history because
Speaker 7: they say it's been there.
Speaker 2: They go under because they were given away shrimp.
Speaker 6: That's no, no, no, no.
Speaker 4: It had a lot more to do with it, think
Speaker 4: real estate costs and labor costs and so on and
Speaker 4: so forth. But I mean, and then just people. I
Speaker 4: think their demographic has been kind of pencil a little
Speaker 4: bit of the margin.
Speaker 6: So it did, but that was an eleven million dollar
Speaker 6: loss for them.
Speaker 2: That's Lisa Mateo, Thank you so much. With our newspapers.
Speaker 2: This is a Bloomberg Surveillance podcast, bringing you the best
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