WEBVTT - Surveillance: Tesla Deserves Apple-Like Valuation, Munster Says 0:00:09.880 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jai Ley. 0:00:13.960 --> 0:00:17.560 We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.800 Bloomberg dot Com and of course on the Bloomberg. Let's 0:00:27.800 --> 0:00:30.600 bringing the end to note fix shall example data founder 0:00:30.800 --> 0:00:33.280 and see good morning to YenS, Good morning. What's the 0:00:33.320 --> 0:00:35.440 message for clients on the last couple of weeks we've 0:00:35.440 --> 0:00:38.160 had What are you telling them? We have to track 0:00:38.200 --> 0:00:40.120 what's going on with this virus. We have to see 0:00:40.120 --> 0:00:44.279 if it's spreading and importantly whether it's spreading outside the 0:00:44.280 --> 0:00:47.400 Whan area, whether it's like is it an international issue 0:00:47.520 --> 0:00:50.960 or is it a regional issue? And the data swings 0:00:50.960 --> 0:00:54.000 from day to day, and the data has distortions in 0:00:54.000 --> 0:00:55.960 it as well, so like they forget to report for 0:00:56.000 --> 0:00:57.960 a couple of days and then it's spikes because they 0:00:58.040 --> 0:01:00.400 catch up for a couple of days. So we really 0:01:00.400 --> 0:01:02.680 have to weed out those things. And then we have 0:01:02.720 --> 0:01:05.000 to look at what is the stimulus that's being put 0:01:05.000 --> 0:01:08.839 in place to counter the effect. So like Chinese interest 0:01:08.959 --> 0:01:11.039 rates didn't move at all last year, and now there's 0:01:11.080 --> 0:01:13.880 suddenly shifting down a gear because the stimulant is expected 0:01:13.920 --> 0:01:15.959 to be very significant, right, so we have to weigh 0:01:16.360 --> 0:01:19.480 those stimulus effects into the equation too. There's just a 0:01:19.520 --> 0:01:21.360 belief ends i think, helped by a lot of people, 0:01:21.360 --> 0:01:23.680 that any risk as a social stability in China is 0:01:23.720 --> 0:01:25.959 viewed as some kind of existential risk to the whole 0:01:25.959 --> 0:01:29.240 system the leadership. The message coming from the leadership urging 0:01:29.280 --> 0:01:32.720 officials Monday to quote achieve the targets of economic and 0:01:32.760 --> 0:01:37.480 social development this year, promote stable consumer spending? Is that 0:01:37.560 --> 0:01:40.640 a cue for this market? The more stimulus is coming, 0:01:41.000 --> 0:01:43.080 and do you think it can be effective in the 0:01:43.160 --> 0:01:46.760 environment with a situation like we have right now? Well, 0:01:47.040 --> 0:01:49.280 I think there's no doubt that Stimilus is coming. So 0:01:49.440 --> 0:01:52.240 we have liquidity injections, we have interest rates cuts. I'm 0:01:52.280 --> 0:01:54.360 sure there'll be all kinds of fiscal steps to make 0:01:54.400 --> 0:01:59.200 sure that whatever discontent is generated by this is counted 0:01:59.320 --> 0:02:02.800 by money in some forms. So there's no doubt that 0:02:02.880 --> 0:02:04.800 this is happening. But on the other hand, we have 0:02:05.080 --> 0:02:09.200 major cities in China in total shutdown, Like, how's that 0:02:09.200 --> 0:02:11.040 gonna last? It's gonna be a couple of days. You're 0:02:11.040 --> 0:02:12.600 gonna be a couple of weeks, a couple of months. 0:02:12.960 --> 0:02:14.960 That I think is the key parameter, right, because if 0:02:15.000 --> 0:02:17.959 we project into global growth, a couple of days is 0:02:18.000 --> 0:02:19.840 clearly not gonna matter. But it's a couple of months 0:02:19.919 --> 0:02:22.760 from major regions, it's a big deal. You have some 0:02:22.880 --> 0:02:25.360 great math in your research note this morning. It was folks, 0:02:25.400 --> 0:02:27.200 literally half a page where you just go to the 0:02:27.200 --> 0:02:31.280 first derivative of the various virus ratios and at least 0:02:31.280 --> 0:02:32.960 we can say they seem to be moving in a 0:02:33.000 --> 0:02:36.920 constructive direction. Yeah. I think the key thing we're looking 0:02:36.960 --> 0:02:40.040 at is how is it's spreading outside the Wuhan area 0:02:40.160 --> 0:02:43.160 right and there the growth rates have been coming down, 0:02:43.280 --> 0:02:46.280 So if we get confirmation that that's the trend, that's 0:02:46.280 --> 0:02:48.560 the important signal. I think it's too early to say 0:02:48.600 --> 0:02:51.160 that they've come down to a level where we can 0:02:51.200 --> 0:02:53.040 be more comfortable. I think if you look at the 0:02:53.040 --> 0:02:57.000 literature from the health specialist, twelve percent is what they 0:02:57.040 --> 0:02:59.240 sort of expect is the natural progression of this thing. 0:02:59.280 --> 0:03:02.000 We get below that, that will show that the polishing 0:03:02.080 --> 0:03:05.920 measures have worked. And we're close to close to that point, 0:03:05.960 --> 0:03:07.799 but not quite there yet. And let's get to the 0:03:07.919 --> 0:03:10.280 nuts and bolts of what you do every single day. 0:03:10.320 --> 0:03:13.680 You how clients understand where positioning is at the moment, 0:03:13.720 --> 0:03:17.120 where the flows are going. You've got together with ep 0:03:17.240 --> 0:03:20.760 F R EPFR data. Talk to me about that partnership 0:03:20.800 --> 0:03:22.600 and what you're seeing together with them at the moment, 0:03:22.639 --> 0:03:24.080 just in terms of the flows, in terms of the 0:03:24.080 --> 0:03:26.720 positioning at the moment. Yes, So we we build as 0:03:26.760 --> 0:03:29.560 new data set together with ep FIRE up in Boston, 0:03:29.840 --> 0:03:32.560 and the idea is that we want to know what 0:03:32.680 --> 0:03:35.920 the real money community, which is really the biggest player 0:03:35.920 --> 0:03:38.680 in the currency market, is up to. So we go 0:03:38.720 --> 0:03:42.840 and measure in a very precise way what their positions are, 0:03:43.000 --> 0:03:47.080 including their derivatives, and that can give a sense of okay, 0:03:47.080 --> 0:03:50.520 where the crowded positions and where are are there some 0:03:50.800 --> 0:03:53.839 unloved places in the market that could potentially have some 0:03:54.200 --> 0:03:57.160 medium term bullish trends. So those are things we look at. 0:03:57.880 --> 0:04:01.840 So this is talking about the price action in security 0:04:01.880 --> 0:04:03.360 is a lot of people are looking at the fundamental 0:04:03.360 --> 0:04:06.840 effect that the shutdowns from the coronavirus will have on 0:04:06.880 --> 0:04:09.320 the economy. I was looking at a number of reports, 0:04:09.320 --> 0:04:13.120 Barclays coming out downgrading their first quarter estimate for China's 0:04:13.280 --> 0:04:17.119 growth by two point two percentage points, and this coming 0:04:17.120 --> 0:04:19.760 out that China's car sales are likely to slump the 0:04:19.800 --> 0:04:22.360 most on record in the first two months, with sales 0:04:22.360 --> 0:04:26.480 set to fall by twenty five tot in the January 0:04:26.560 --> 0:04:31.480 to February period. Is this being priced in? So we 0:04:31.760 --> 0:04:34.560 had one day that looked nasty in the equity market 0:04:34.680 --> 0:04:40.279 last week, and now we're recovering very dramatically today. So 0:04:40.480 --> 0:04:42.920 I think a lot of people are assuming that this 0:04:42.960 --> 0:04:47.039 shock is over, which I think is premature. But the 0:04:47.520 --> 0:04:49.480 for example, I think that the effect that we've been 0:04:49.480 --> 0:04:52.600 the most focused on is tourism. Like Chinese tourists around 0:04:52.600 --> 0:04:55.640 the world play a huge role in many different markets, 0:04:55.720 --> 0:04:59.400 especially in Thailand and so forth. If they don't come 0:05:00.520 --> 0:05:03.800 for several months, it's gonna be major, major hits to 0:05:03.839 --> 0:05:09.479 those economies, like several percentages of of of GDP, And this, 0:05:09.640 --> 0:05:12.479 I think is an effect where even if the factories 0:05:12.560 --> 0:05:15.080 up and up and running quite quickly, people are going 0:05:15.120 --> 0:05:18.320 to be afraid, there's gonna be essentially quarantines and so forth. 0:05:18.360 --> 0:05:20.120 So I think these effects are going to be multi 0:05:20.160 --> 0:05:22.080 month effects, and I don't think they approbably. Let's put 0:05:22.120 --> 0:05:24.400 some of these issues together. Then you talked about identifying 0:05:24.480 --> 0:05:26.479 the positions that were crowded at the moment. Where do 0:05:26.520 --> 0:05:28.680 you see the crowded positioning, what do you think is 0:05:28.760 --> 0:05:31.680 vulnerable like? So, one thing we've seen in this data 0:05:31.760 --> 0:05:35.360 set is that at the end of last year there 0:05:35.600 --> 0:05:39.360 was more optimism about global growth. You saw equity investors 0:05:39.440 --> 0:05:41.880 actually trying to put on bets of a sort of 0:05:41.880 --> 0:05:44.760 global recovery, and they did that bet in Europe as well. 0:05:45.120 --> 0:05:47.120 And we can see that the equity investors were some 0:05:47.160 --> 0:05:49.360 of the ones that actually put on long Euro bets. 0:05:49.720 --> 0:05:51.640 And I think one of the reasons why the Euro 0:05:51.680 --> 0:05:54.840 has traded so poorly this year was that we came 0:05:55.160 --> 0:05:57.920 into the year with that overhang of long Euro positions 0:05:57.960 --> 0:06:00.240 and then we've had all the negative shock come out 0:06:00.440 --> 0:06:02.839 and they've had to take that risk down. So these 0:06:02.880 --> 0:06:05.440 are the sort of tools we use to identify crowd 0:06:05.440 --> 0:06:07.360 of decisions. Take that one step further than are you're 0:06:07.360 --> 0:06:11.360 looking for more downside and euro dollar So I think 0:06:11.480 --> 0:06:14.479 everything is driven by the global growth sentiment. It comes 0:06:14.520 --> 0:06:17.600 back to Lesa's question, Okay, is this shock really fully priced? 0:06:17.680 --> 0:06:21.400 So I will be much more comfortable saying okay, we're 0:06:21.440 --> 0:06:24.080 about to have recovered if we had a proper correction 0:06:24.080 --> 0:06:25.919 the equity market. But we just never got a proper 0:06:25.960 --> 0:06:28.000 correction right because we had one day down and now 0:06:28.000 --> 0:06:30.920 we're sort of recovering already. So we're in a very 0:06:30.960 --> 0:06:33.919 gray song here where risk acids have have really not 0:06:34.000 --> 0:06:36.560 priced very much. There's some very very intimate side and 0:06:36.960 --> 0:06:39.960 improvement fundamentally, but they're not convincing yet. Give me a 0:06:40.040 --> 0:06:43.560 currency pair, because I've been short Tesla and that's worked out. 0:06:44.320 --> 0:06:47.240 Give me, give me a pair Noel with its opportunistic 0:06:47.320 --> 0:06:51.120 over the next ninety days. So I'm very worried about 0:06:51.240 --> 0:06:56.320 Thailand because they have the biggest tourist sector and and 0:06:56.320 --> 0:06:59.279 and em space. I think Mexico is still the most 0:06:59.279 --> 0:07:02.960 constructive story or that I see out there. So that's 0:07:02.960 --> 0:07:10.160 a very we're gonna do that chart. You're going to 0:07:10.240 --> 0:07:15.000 have a triple leverage cash fund with an overlay. I 0:07:15.040 --> 0:07:29.120 don't know. Leslie Vinja Murray John Shadow Mouse, She's expert 0:07:29.480 --> 0:07:33.120 on American politics out of her shop in London. Leslie 0:07:33.120 --> 0:07:36.840 absolutely extraordinary. The major message from Kevin Surilli and Des 0:07:36.840 --> 0:07:42.679 Moines was people are genuinely shocked over this mess. In Iowa, 0:07:42.960 --> 0:07:47.600 summarize it from the distant climbs of London. Well, you know, 0:07:47.680 --> 0:07:49.720 waking up here in London, I think we were all 0:07:49.760 --> 0:07:52.400 shocked because we expected to see, you know, what has 0:07:52.400 --> 0:07:55.880 been a very tight race among with multiple candidates sort 0:07:55.880 --> 0:07:57.360 of coming out at the top, whether it would be 0:07:57.360 --> 0:08:00.720 Biden or Sanders, but it was, you know, unclear, it 0:08:00.760 --> 0:08:03.120 could have been Bude. And we woke up, of course 0:08:03.160 --> 0:08:04.880 to the news that there is no result. We still 0:08:04.920 --> 0:08:07.559 didn't have a result, and and all of this down 0:08:07.680 --> 0:08:11.280 to difficulties you know, with the local with the local 0:08:11.320 --> 0:08:14.160 caucuses and they the Democratic Party, So I think very 0:08:14.280 --> 0:08:17.480 distressing for many people. And of course then there's also 0:08:17.520 --> 0:08:20.360 the news that multiple people seem to have been declaring 0:08:20.720 --> 0:08:24.240 their success, multiple candidates, which is humorous for a lot 0:08:24.240 --> 0:08:26.840 of people, Leslie, because they're declaring success without any results. 0:08:26.880 --> 0:08:29.080 Ready to go on, Leslie. I'm just wondering, once we 0:08:29.120 --> 0:08:31.360 get the results, how much value will there be in 0:08:31.360 --> 0:08:36.520 those results. Well, you know, I think there's there's inevitably 0:08:37.000 --> 0:08:40.080 the narrative surrounding this will be of a botched and 0:08:40.080 --> 0:08:43.160 and and somewhat scale caucus. So regardless of the result, 0:08:43.200 --> 0:08:45.560 I think it's going to cast a bit of a 0:08:45.600 --> 0:08:49.400 shadow over those results, and the delay is very significant. 0:08:49.400 --> 0:08:51.360 People are moving off and going into the State of 0:08:51.440 --> 0:08:55.160 the Union address and New Hampshire is you know, is 0:08:55.280 --> 0:09:01.400 very soon. Lisa Homeland Security offered to test Iowa caucus 0:09:01.440 --> 0:09:04.320 app that was in an interview on Fox moments ago. 0:09:04.480 --> 0:09:07.120 This is actually key. They made a point to come 0:09:07.120 --> 0:09:09.360 out and say that there was no interference, has had 0:09:09.400 --> 0:09:13.320 nothing to do with any sort of major glitch, that 0:09:13.360 --> 0:09:16.120 this didn't have to actually affect anything having to do 0:09:16.160 --> 0:09:18.520 with the underlying vote count. Talking about all of that, 0:09:18.800 --> 0:09:23.400 but still raising questions about the lack of technological sufficiency 0:09:23.520 --> 0:09:27.800 heading into the elections. How concerned are you about that 0:09:27.880 --> 0:09:31.400 at this point given what we saw in the questions 0:09:31.400 --> 0:09:36.840 still surrounding that. Yeah, I mean there's there's clearly you know, 0:09:36.880 --> 0:09:38.719 there are a couple of things here. One is that 0:09:38.800 --> 0:09:42.880 even though that disappears to have a very distinct reason 0:09:43.120 --> 0:09:47.600 behind the behind the debacle, it nonetheless sort of comes 0:09:47.640 --> 0:09:51.880 together with with previous elections where there's been interference or 0:09:51.880 --> 0:09:55.400 where things haven't come come together smoothly, and at a 0:09:55.480 --> 0:09:59.959 time when there's just tremendous uncertainties surrounding the Democratic Party 0:10:00.000 --> 0:10:03.199 of the candidates and and a lot of instability. I 0:10:03.200 --> 0:10:05.800 would say politically in the country. Let's lee, you're in 0:10:05.800 --> 0:10:07.560 the UK right now, and I'm just drawing on my 0:10:07.559 --> 0:10:11.080 experience of the British election this past December. If we 0:10:11.120 --> 0:10:13.720 get a progressive candidate that comes out of the caucuses 0:10:13.800 --> 0:10:16.800 the primaries over the next several months, can they win 0:10:17.480 --> 0:10:20.360 on a national basis and the same way Jeremy Corbyn 0:10:20.360 --> 0:10:23.160 struggled with a national electorate but was really worth supported 0:10:23.160 --> 0:10:25.480 by the party. Do you see any parallels here whatsoever? 0:10:26.880 --> 0:10:29.360 I mean, you know, a very different set of politics. 0:10:29.400 --> 0:10:32.679 People love to draw the U s UK comparison. Sometimes 0:10:32.679 --> 0:10:35.120 that shed some light, but I think the big question 0:10:35.320 --> 0:10:37.640 that un it often doesn't. The big question for the 0:10:37.720 --> 0:10:40.960 US is whether or not those that part of the 0:10:40.960 --> 0:10:43.280 party that doesn't get the candidate they want, if it's 0:10:43.280 --> 0:10:46.000 a progressive candidate, do the moderates turn up, do they 0:10:46.120 --> 0:10:50.679 unite behind that candidate? Do they support the Democratic candidate 0:10:51.440 --> 0:10:55.000 as a mechanism of of moving away from the person 0:10:55.040 --> 0:10:56.920 that they don't want in the office, which is which 0:10:56.960 --> 0:10:58.840 is President Trump? And this is you know, this is 0:10:58.880 --> 0:11:01.200 something we simply can't know. Some of the stories coming 0:11:01.200 --> 0:11:04.640 out of Iowa were interesting though, right that people who 0:11:04.679 --> 0:11:08.079 didn't um with their candidate and didn't make the initial 0:11:08.120 --> 0:11:10.480 bar a few people just went home, you know. Not 0:11:10.600 --> 0:11:13.360 a good sign, very hard to read broader results off that, 0:11:13.440 --> 0:11:15.240 but not a good sign that you wouldn't then turn 0:11:15.480 --> 0:11:17.640 to turn over your vote to another candidate. So I 0:11:17.640 --> 0:11:19.839 think this is, you know, this is the big question. 0:11:19.880 --> 0:11:22.280 Will there be unity around a candidate when when one 0:11:22.360 --> 0:11:26.160 is finally selected. There's also a question of what trade 0:11:26.360 --> 0:11:30.240 uh policies will result from the different Democratic candidates. When 0:11:30.240 --> 0:11:33.160 it comes to China, certainly people have this feeling that 0:11:33.200 --> 0:11:36.120 it really won't be necessarily better for China with a 0:11:36.200 --> 0:11:39.679 Democratic candidate, whoever he or she may be. There's a 0:11:39.760 --> 0:11:42.160 question with Europe now that that's the front center with 0:11:42.280 --> 0:11:46.560 some of the trade discussions, of which democratic candidate seems 0:11:46.559 --> 0:11:48.280 to be the best one to deal with Do you 0:11:48.280 --> 0:11:52.640 have a sense of that? Well, I think there is 0:11:52.640 --> 0:11:55.600 a concern not only in Europe but certainly in China 0:11:55.679 --> 0:11:58.600 that a Democratic candidate could take a much stronger line 0:11:58.600 --> 0:12:03.960 on China actually call for those deeper reforms that President 0:12:04.000 --> 0:12:06.640 Trump has has paid lip service too, but really hasn't 0:12:06.679 --> 0:12:10.400 moved the needle substantially on So a progressive candidate, I 0:12:10.440 --> 0:12:15.240 think uh is more likely to take a much harder line. Uh, 0:12:15.559 --> 0:12:18.000 you know, it's sort of anti free trade position is 0:12:18.080 --> 0:12:20.760 one that has deeper roots in the progressive part of 0:12:20.800 --> 0:12:24.200 the Democratic Party certainly than the Republican Party prior to 0:12:24.240 --> 0:12:28.960 this president. So those are very real, very legitimate concerns. 0:12:28.960 --> 0:12:31.040 But at the same time, you know, we're not seeing 0:12:31.280 --> 0:12:35.880 a very serious articulation of what the strategy would be 0:12:36.480 --> 0:12:38.640 um on China coming out of coming out of the 0:12:38.640 --> 0:12:42.439 progressive I just translate from the English that progressive is 0:12:42.480 --> 0:12:45.040 another word for liberals. We've just changed it a couple 0:12:45.080 --> 0:12:47.200 of years ago. Well, I think it's aggressively liberal when 0:12:47.240 --> 0:12:49.480 you're looking at the likes of Bernie Sanders, and let's 0:12:49.480 --> 0:12:51.360 talk about let's talk about the elephant in the room, 0:12:51.360 --> 0:12:54.240 showy Leslie, Let's talk about Bernie Sanders. Can he unify 0:12:54.280 --> 0:12:58.240 his own party? Never mind the country? You know, it 0:12:58.600 --> 0:13:01.200 is another one of those one million dollar questions that 0:13:01.240 --> 0:13:04.000 nobody actually which is where test is going to be 0:13:05.000 --> 0:13:08.760 a lot of skepticism, you know, I when when we 0:13:08.880 --> 0:13:13.200 moved forward towards Super Tuesday, we'll have a lot, We'll 0:13:13.200 --> 0:13:14.880 have a lot more answer them. But I guess I am. 0:13:15.160 --> 0:13:18.680 I am let us know when you get eye words results. 0:13:18.760 --> 0:13:21.200 Let's say, Benjaburi, thank you so much with Chadow Mouse 0:13:32.480 --> 0:13:35.960 children with us for an incredibly important discussion now on 0:13:36.040 --> 0:13:38.520 the state of what we do all day, which is 0:13:38.559 --> 0:13:43.320 the media we're plugged into. Michael Nathanson is with MafA Nathanson. Michael, 0:13:43.320 --> 0:13:45.600 I've got to go first year colleague, Craig manfat on 0:13:45.679 --> 0:13:49.600 Comcast hugely interesting this morning. You go to a buy 0:13:49.679 --> 0:13:52.600 on Comcast, and am I right to say that the 0:13:52.720 --> 0:13:56.679 part of Comcast that's Nathanson like, which is the valuation 0:13:57.320 --> 0:14:01.880 of their news and entertainment assets, is worth zero? Is 0:14:02.040 --> 0:14:08.000 NBCUniversal barely valued within the valuation of Comcast? Right, good 0:14:08.040 --> 0:14:11.440 morning time. That that's our call. Craig has been rightly 0:14:11.480 --> 0:14:16.480 negative on the media side of NBC Comcast, but at 0:14:16.520 --> 0:14:20.400 some point you just got ridiculous and at this level rethink. 0:14:20.600 --> 0:14:24.360 Given the value of cable cable assets, the entertainment assets 0:14:24.360 --> 0:14:28.160 are literally trading for free. So we switched, We switched 0:14:28.160 --> 0:14:31.320 courses and upgraded it to a buy. After a couple 0:14:31.360 --> 0:14:34.640 of years of really being negative on them posts, you know, 0:14:34.680 --> 0:14:36.680 post a bunch of deals that we didn't like forty 0:14:36.720 --> 0:14:39.520 two dollars a share, forty three dollars a share on Comcast. 0:14:39.560 --> 0:14:42.280 I'm sure you'll lift the stock. What's the value of 0:14:42.360 --> 0:14:47.120 NBC Universal and the all in price target? Moffett Nathan Snaz, Well, 0:14:47.240 --> 0:14:49.800 you know, if you look at where you know, it's 0:14:49.840 --> 0:14:53.280 not Disney, because Disney Disney, we'll talk about fit has 0:14:53.320 --> 0:14:57.000 really changed their narrative. But if you said, you know, seven, eight, 0:14:57.080 --> 0:14:59.520 nine times eba doll you probably have another, you know, 0:14:59.560 --> 0:15:02.840 ten a box of value at Comcast just by getting 0:15:03.200 --> 0:15:05.600 NBCU at a fair value. So it's if you look 0:15:05.600 --> 0:15:07.600 at where Charters traded two, which is a pretty good 0:15:07.600 --> 0:15:09.880 proxy for cable, you do you have a free pass 0:15:09.920 --> 0:15:12.960 for NBC And it's a very I think it's very straightforward, 0:15:13.000 --> 0:15:15.320 makes a ton of sense. And people are looking for 0:15:15.320 --> 0:15:17.600 things to buy, as you all know, and this is 0:15:17.640 --> 0:15:20.040 a pretty good name for Michael. We talk about price 0:15:20.120 --> 0:15:22.560 just quickly at an email from Hulu a couple of 0:15:22.600 --> 0:15:25.600 months back, hike in the price of my monthly Hulu power. 0:15:25.640 --> 0:15:28.480 Here we go quite aggressively. Always got to make it 0:15:28.520 --> 0:15:34.360 about Megan early and at what point, at what point 0:15:34.360 --> 0:15:36.560 do we meet meet an inflection point where I just 0:15:36.600 --> 0:15:38.360 sit there and think, you know what, I'm just going 0:15:38.360 --> 0:15:41.640 back to cable. What's this about? Yeah, John, you know 0:15:41.720 --> 0:15:45.760 what that this past year, that inflection point has come. 0:15:45.880 --> 0:15:48.080 I always said, you and Tom had asked me this 0:15:48.160 --> 0:15:51.000 for years. What's the what's the tudor of court cutting? 0:15:51.040 --> 0:15:53.200 We'd say it's a drip drip drip, negative one of 0:15:53.240 --> 0:15:56.000 two percent court cutting rates. This year it's going to 0:15:56.080 --> 0:15:59.760 negative four, negative five because people are now seeing their 0:15:59.760 --> 0:16:02.880 bill rise and on the margin, they're either kind of 0:16:02.960 --> 0:16:06.800 chord or they're they're going back to their traditional ways 0:16:06.800 --> 0:16:09.280 to watch the TV. But the mistake the industry is 0:16:09.320 --> 0:16:12.280 made is that they've just taken pricing up on bundles 0:16:12.360 --> 0:16:16.080 to the level that's just too high. So, you know, 0:16:16.400 --> 0:16:20.040 we're saying that you're we're worried play out, We're brawled 0:16:20.040 --> 0:16:24.640 across the ecosystem. With court cunning really accelerating into twenty Michael, 0:16:24.640 --> 0:16:27.120 there's then a question sort of implicit in that is 0:16:27.160 --> 0:16:30.200 the model going to continue to be purely on subscription 0:16:30.280 --> 0:16:33.239 fees or will there be a shift to an advertising 0:16:33.240 --> 0:16:36.000 supported model. And I'm thinking on the heels of the 0:16:36.000 --> 0:16:39.160 Super Bowl with a record five point six million dollars 0:16:39.200 --> 0:16:42.040 commanded for a thirty second spot. At what point will 0:16:42.080 --> 0:16:46.480 streaming command similar types of prices uh to sort of 0:16:46.520 --> 0:16:51.000 support these Okay, so so there's a ton in that 0:16:51.080 --> 0:16:52.840 answer you. So what I would say to you to 0:16:53.040 --> 0:16:56.600 John's first question, We're gonna have a lot a lot 0:16:56.600 --> 0:16:59.920 of your people subscribing to pay TV. The PayTV core 0:17:00.120 --> 0:17:02.040 user is going to be a sports and news fan 0:17:02.640 --> 0:17:05.520 who you know, will be a bit indifferent to pricing. 0:17:05.960 --> 0:17:07.560 Then there's going to be a layer of people who 0:17:07.640 --> 0:17:10.800 buy things on demand. And that's your question about advertising 0:17:10.800 --> 0:17:14.160 support video. That's a growing field. It's called a VOD 0:17:14.320 --> 0:17:18.840 and seeing more companies pushing advertising video on demand supported 0:17:18.880 --> 0:17:22.760 business model. You won't for many years. There's no way 0:17:22.800 --> 0:17:24.800 you'll ever built the reach that you have in TV, 0:17:25.160 --> 0:17:28.439 but it's a way to a buying consumers to add 0:17:28.440 --> 0:17:31.080 back that that decline of line your viewing in a 0:17:31.119 --> 0:17:35.040 new model called a VOD. Where's your value, Michael Nathanson 0:17:35.240 --> 0:17:37.520 Right now? I mean Disney has had the IGOR run 0:17:37.560 --> 0:17:40.719 off their streaming pricing and Disney Plus, But which is 0:17:40.720 --> 0:17:44.000 the security that's an uncommon value now other than off 0:17:44.040 --> 0:17:47.200 it's Comcast call today. Well, you know Tom. I mean 0:17:47.480 --> 0:17:50.760 it's last week I spoke to John about that. Facebook. 0:17:50.760 --> 0:17:52.720 I'll say the same with Google. I think those fang 0:17:52.760 --> 0:17:55.600 stocks have reached level. It's really hard to have a 0:17:55.680 --> 0:17:58.920 table on the fang stocks. You know, we have Disney 0:17:58.960 --> 0:18:02.280 with another fifteen fifteen bucks or so, and so you'd 0:18:02.280 --> 0:18:05.679 say you're running out a room there. The problem we 0:18:05.720 --> 0:18:07.560 have when we look at my sector is that there's 0:18:07.680 --> 0:18:10.360 there's a lot of value means b M, CBS, which 0:18:10.359 --> 0:18:14.160 you pull up the chart has been decimated, Discovery UM. 0:18:14.400 --> 0:18:17.000 But the problem we see is that those businesses are 0:18:17.040 --> 0:18:20.399 under so much structural pressure that feels like a value trap. 0:18:20.560 --> 0:18:24.119 So we're having a really hard time finding great value 0:18:24.119 --> 0:18:27.200 in businesses that we think are sustainable. That's why Comcast 0:18:27.280 --> 0:18:30.440 makes so much sense for investors. There's so so few 0:18:30.440 --> 0:18:34.160 places you can point to the sustainable growth and evaluation 0:18:34.280 --> 0:18:36.800 and evaluation that's attractive. Michael, just to turn to the 0:18:36.800 --> 0:18:38.879 issue at the moment, just to wrap this conversation up quickly. 0:18:38.880 --> 0:18:41.520 If I made the Walt Disney Company the theme park 0:18:41.880 --> 0:18:44.399 in China, what is happening right now and how material 0:18:44.480 --> 0:18:47.480 is it for the company. It's not fair material. You know, 0:18:47.600 --> 0:18:50.479 they already warned on Hong Kong when the year started 0:18:50.520 --> 0:18:53.680 because of the rioting. You know, Shanghai as a new 0:18:53.720 --> 0:18:57.680 park is not it's not a meaningful contributor to the company. Um, 0:18:57.720 --> 0:18:59.840 it's it's it's not a major issue. If they had 0:18:59.840 --> 0:19:02.920 a better box office late this year, you'd be concerned 0:19:02.960 --> 0:19:07.640 about their inability to have people attend Chinese cinema. At 0:19:07.680 --> 0:19:09.800 this point, this is not a major issue because the 0:19:09.840 --> 0:19:13.720 parks are so small. The broader question though, is US 0:19:13.840 --> 0:19:15.960 parks and will there'll be a slowdown to US parks 0:19:16.440 --> 0:19:19.000 so we're spending Yeah, that's that's something that we we 0:19:19.040 --> 0:19:21.280 haven't put into our molley yet. But that doesn't concerned 0:19:21.320 --> 0:19:23.720 with Disney. Is just the cycle and how many more 0:19:23.760 --> 0:19:27.600 dollars will people spending us theme parks. Michael Nathanson this morning, 0:19:27.680 --> 0:19:30.639 is he and Craig Moffatt put a buy on Comcast 0:19:31.200 --> 0:19:34.360 on some of the parts, uh model, get that researcher 0:19:34.359 --> 0:19:46.920 of course from Moffatt Nathanson. We now try to drive 0:19:46.960 --> 0:19:51.240 forward an intelligent conversation on this virus with Dr Faucci. 0:19:51.280 --> 0:19:54.000 Anthony Fauci is out of Brooklyn. He's out of the 0:19:54.000 --> 0:19:57.040 College of the Holy Cross in Worcester and Cornell, and 0:19:57.080 --> 0:20:01.720 he is definitive on immunology and definitive on how the 0:20:01.840 --> 0:20:06.240 body reacts to these bad things called viruses. Were thrilled 0:20:06.480 --> 0:20:09.040 he could join us right now, Dr Frauci, What is 0:20:09.080 --> 0:20:15.080 your knowledge of how people get sick from this terrible virus? 0:20:15.160 --> 0:20:19.760 What does it actually do to people? Well, it's a 0:20:19.800 --> 0:20:23.639 respiratory born virus, you know, in some respects similar to 0:20:23.760 --> 0:20:27.880 other respiratory born viruses, but it's of a different broad family. 0:20:27.920 --> 0:20:30.600 It's called a coronavirus. And what it does it has 0:20:30.640 --> 0:20:35.719 the capability of binding to a receptor on cells that 0:20:35.800 --> 0:20:39.680 are in your lung and your lower airway. And that's 0:20:39.720 --> 0:20:43.679 the reason why the disease is primarily a disease of pneumonia. 0:20:44.440 --> 0:20:47.240 So the people that you're hearing about who are getting 0:20:47.600 --> 0:20:52.120 seriously ill in China fundamentally a people who are winding 0:20:52.200 --> 0:20:56.280 up with pneumonia, very very serious. Yes, so that's the mechanism. 0:20:56.440 --> 0:21:01.040 Do you do you have any optimism? Dr Fauci's antibiotics 0:21:01.119 --> 0:21:06.800 against the bacterium pneumonia can help staunch the deaths. Are 0:21:06.840 --> 0:21:10.920 we fighting just virology? Are we fighting also the bacteriology 0:21:10.920 --> 0:21:14.320 that follows on from it? That's a good question, and 0:21:14.800 --> 0:21:18.280 talking to our Chinese colleagues and seeing the case reports, 0:21:18.880 --> 0:21:22.960 it looks like this is primary viral pneumonia. I'm sure 0:21:23.040 --> 0:21:25.080 that every once in a while you're gonna see people 0:21:25.080 --> 0:21:28.040 who are seriously ill in the hospital who get a 0:21:28.080 --> 0:21:32.840 secondary complicating bacterial pneumonia. But the driving force of this 0:21:33.000 --> 0:21:37.520 outbreak is virus and viral pneumonia and not bacterial pneumonia. 0:21:37.640 --> 0:21:40.600 The CDC came out yesterday awarding saying that they were 0:21:40.640 --> 0:21:43.680 preparing for a pandemic. It's not there yet, but saying 0:21:43.680 --> 0:21:46.720 as if it will come to the United States, what's 0:21:46.760 --> 0:21:49.919 the tipping point in terms of people, in terms of 0:21:49.960 --> 0:21:53.480 countries that qualifies it as pandemic. Yeah. One of the 0:21:53.520 --> 0:21:55.879 things that I think it's the easiest to understand is 0:21:55.920 --> 0:22:02.280 what we call persistent or sustained transmilty, transmissibility from one 0:22:02.320 --> 0:22:05.320 person to another to another. Like, for example, in the 0:22:05.400 --> 0:22:09.720 United States, we have eleven total cases, nine of which 0:22:10.160 --> 0:22:13.960 are travel related coming in from Muhan, but two were 0:22:14.000 --> 0:22:18.880 individuals who were close contacts of these individuals who came in. 0:22:19.320 --> 0:22:22.480