1 00:00:01,800 --> 00:00:04,440 Speaker 1: This is Bloomberg Business Week. I'm Karl Masser and I'm 2 00:00:04,480 --> 00:00:07,280 Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 3 00:00:07,320 --> 00:00:09,840 Speaker 1: you the latest news from the world to business and finance, 4 00:00:09,840 --> 00:00:13,680 Speaker 1: plus technology, politics, economics, all partnising the power of Business 5 00:00:13,680 --> 00:00:17,159 Speaker 1: Week reporters and editors, not to mention our journalists and 6 00:00:17,160 --> 00:00:20,000 Speaker 1: analyst in more than one twenty countries. You can download 7 00:00:20,000 --> 00:00:23,479 Speaker 1: Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot Com. You 8 00:00:23,480 --> 00:00:25,439 Speaker 1: can also listen to our radio show at two pm 9 00:00:25,440 --> 00:00:28,360 Speaker 1: Eastern Time on Bloomberg Radio or watch us on YouTube 10 00:00:28,400 --> 00:00:32,120 Speaker 1: search Bloomberg Global News. A bunch of headlines out there 11 00:00:32,479 --> 00:00:35,480 Speaker 1: in terms of COVID. We did see several countries moving 12 00:00:35,520 --> 00:00:39,519 Speaker 1: toward easing travel restrictions, so that's happening. We see, you know, 13 00:00:39,640 --> 00:00:43,120 Speaker 1: mask mandates kind of coming off and we're moving forward. 14 00:00:43,159 --> 00:00:45,680 Speaker 1: Although I highly recommend you check at the Bloomberg Big 15 00:00:45,680 --> 00:00:48,680 Speaker 1: Take from over the weekend, it's a reminder we're not 16 00:00:48,720 --> 00:00:50,840 Speaker 1: out of the woods yet. We're not. Michelle Cortez, who's 17 00:00:50,840 --> 00:00:53,680 Speaker 1: covered it for us here at Bloomberg News, is just saying, sorry, guys, 18 00:00:53,920 --> 00:00:55,800 Speaker 1: there are more variants to come, and it's going to 19 00:00:55,880 --> 00:00:58,280 Speaker 1: be more disruptions to things like supply chains and so on. 20 00:00:58,320 --> 00:01:01,080 Speaker 1: I read it on the plane back last night and like, oh, Michelle, 21 00:01:01,520 --> 00:01:07,080 Speaker 1: come on alright, So let's bring in Dr John Abanson. 22 00:01:07,240 --> 00:01:09,800 Speaker 1: He's lecturer of health care policy at Harvard Medical School. 23 00:01:09,840 --> 00:01:12,240 Speaker 1: He's got a new book out, Sickening, a Big Farma 24 00:01:12,319 --> 00:01:14,880 Speaker 1: broke American health care and how we can repair it. 25 00:01:15,480 --> 00:01:17,880 Speaker 1: He joins us on the phone from Boston. Dr Abanson, 26 00:01:18,319 --> 00:01:20,200 Speaker 1: nice to have you here with Tim and myself. Let's 27 00:01:20,240 --> 00:01:24,320 Speaker 1: get right to it. Your book really strikes at big Pharma. 28 00:01:24,760 --> 00:01:29,520 Speaker 1: What's your mission here? My mission is too to explain 29 00:01:29,560 --> 00:01:34,240 Speaker 1: to the American people that American healthcare is performing very poorly. 30 00:01:35,520 --> 00:01:39,440 Speaker 1: We've ranked sixty eight in the world and healthy life expectancy, 31 00:01:39,520 --> 00:01:43,360 Speaker 1: and to achieve that lowly state of health, we're spending 32 00:01:43,360 --> 00:01:45,880 Speaker 1: a trillion and a half dollars more than the other 33 00:01:45,920 --> 00:01:50,720 Speaker 1: wealthy countries as a percentage at GDP. So it's a disaster. 34 00:01:51,640 --> 00:01:53,880 Speaker 1: We've known this for a while, so right like this 35 00:01:53,920 --> 00:01:55,880 Speaker 1: has been out there, this stat I feel like whenever 36 00:01:55,880 --> 00:01:59,000 Speaker 1: we talk about American healthcare systems for the last decade, 37 00:01:59,040 --> 00:02:00,840 Speaker 1: at least, you know, we talked about how much we 38 00:02:00,920 --> 00:02:04,720 Speaker 1: spend and how much is bad? UM? So so what 39 00:02:04,760 --> 00:02:08,200 Speaker 1: do we do right? So what I have to contribute 40 00:02:08,240 --> 00:02:10,639 Speaker 1: is that UM as a family talk you know, was 41 00:02:11,080 --> 00:02:14,040 Speaker 1: Robert W. Johnson Fellow and trained in research design and 42 00:02:14,080 --> 00:02:17,640 Speaker 1: epode theology and statistics. As my career went on, I 43 00:02:17,680 --> 00:02:22,040 Speaker 1: started to see the commercial influence coming and the missing piece. 44 00:02:22,240 --> 00:02:24,520 Speaker 1: We talk about these things all the time, Carol, and 45 00:02:24,600 --> 00:02:27,520 Speaker 1: people are aware of it. Um. It's hard to apprehend 46 00:02:27,560 --> 00:02:30,200 Speaker 1: how bad it is. But the missing piece in all 47 00:02:30,280 --> 00:02:32,840 Speaker 1: this is something that I can contribute, which is that 48 00:02:32,960 --> 00:02:38,040 Speaker 1: the commercial interests, doing their job to maximize the financial 49 00:02:38,080 --> 00:02:42,120 Speaker 1: returns that they delivered to their investors, have taken over 50 00:02:42,480 --> 00:02:47,080 Speaker 1: the knowledge that even the best doctors trust about how 51 00:02:47,200 --> 00:02:51,000 Speaker 1: best to care for patients. And this extends from their 52 00:02:51,280 --> 00:02:55,160 Speaker 1: determining the research agenda of our new knowledge is about 53 00:02:55,200 --> 00:02:59,320 Speaker 1: drugs and devices, to controlling the conduct of the studies, 54 00:02:59,360 --> 00:03:02,760 Speaker 1: the analysis of the studies. When the studies are completed 55 00:03:02,919 --> 00:03:06,080 Speaker 1: and the manuscripts are sent into the journals, that the 56 00:03:06,160 --> 00:03:09,280 Speaker 1: peer reviewers and the medical journal editors don't even get 57 00:03:09,280 --> 00:03:11,480 Speaker 1: to see the real data. They just get to see 58 00:03:11,520 --> 00:03:14,360 Speaker 1: the data that's included in the manuscript. And when the 59 00:03:14,400 --> 00:03:18,920 Speaker 1: experts who write clinical practice guidelines set the standards for 60 00:03:19,000 --> 00:03:22,760 Speaker 1: all doctors about what how to practice quality medicine. They 61 00:03:22,800 --> 00:03:25,440 Speaker 1: don't get to see the data either. So what we've 62 00:03:25,480 --> 00:03:29,679 Speaker 1: had is this quiet revolution in the control of our 63 00:03:29,720 --> 00:03:33,120 Speaker 1: medical knowledge over the last twenty or thirty years. And 64 00:03:33,240 --> 00:03:37,560 Speaker 1: the docs are trying to practice evidence based medicine, but 65 00:03:37,600 --> 00:03:41,160 Speaker 1: they don't understand that that evidence the fundamental purpose of 66 00:03:41,200 --> 00:03:44,760 Speaker 1: that evidence now is to maximize returns to investors. Can 67 00:03:44,800 --> 00:03:47,640 Speaker 1: you draw a line from what you're talking about here 68 00:03:48,200 --> 00:03:50,800 Speaker 1: to the nearly one million Americans who have died as 69 00:03:50,840 --> 00:03:56,520 Speaker 1: a result of covid um that is our health care system, 70 00:03:56,520 --> 00:03:58,360 Speaker 1: our health care system, the health of the health of 71 00:03:58,360 --> 00:04:01,880 Speaker 1: American people, and to the is it billions now that 72 00:04:01,920 --> 00:04:05,480 Speaker 1: have gotten the vaccine or millions that have gotten the vaccine? Yes? 73 00:04:05,560 --> 00:04:11,280 Speaker 1: Billions um yes uh? Part of the line uh. The 74 00:04:11,320 --> 00:04:16,800 Speaker 1: COVID vaccines and are both the height of what farmer 75 00:04:16,880 --> 00:04:20,120 Speaker 1: can do for us. And it shows also that their 76 00:04:20,160 --> 00:04:23,480 Speaker 1: business model of maximizing their profits is not going to 77 00:04:23,560 --> 00:04:26,440 Speaker 1: work in the end, because what we've done is we 78 00:04:26,520 --> 00:04:29,720 Speaker 1: have these fabulous vaccines while we pay a lot, the 79 00:04:29,800 --> 00:04:32,680 Speaker 1: drug companies are making a lot. But fine, But what 80 00:04:32,800 --> 00:04:38,560 Speaker 1: happened is that there was no UH control on where 81 00:04:38,720 --> 00:04:42,359 Speaker 1: those vaccines were sold, so they're being sold where the 82 00:04:42,440 --> 00:04:45,520 Speaker 1: drug companies can make the most money, and the third 83 00:04:45,560 --> 00:04:48,240 Speaker 1: world is getting left out of this. So Africa has 84 00:04:48,279 --> 00:04:53,040 Speaker 1: a vaccination rate of approximately I think now. And what's 85 00:04:53,080 --> 00:04:57,080 Speaker 1: happening is that Delta variant came from India when four 86 00:04:57,480 --> 00:05:01,560 Speaker 1: of people were vaccinated. The O wrong variant came from 87 00:05:01,920 --> 00:05:05,440 Speaker 1: South Africa when ten percent of South Africans were vaccinated. 88 00:05:05,800 --> 00:05:09,640 Speaker 1: And the business model of the pharmaceutical companies, the vaccine 89 00:05:09,680 --> 00:05:13,880 Speaker 1: manufacturers is to keep selling their drugs for top dollar. 90 00:05:14,440 --> 00:05:20,000 Speaker 1: But it's a global pandemic and until everybody's safe, nobody's stakes. 91 00:05:20,000 --> 00:05:23,760 Speaker 1: And these variants like Delta and omicron are going to 92 00:05:23,960 --> 00:05:28,120 Speaker 1: keep coming back to affect Americans and we're going to 93 00:05:28,279 --> 00:05:31,400 Speaker 1: keep having waves of this as your as Mitchelle, your 94 00:05:31,480 --> 00:05:39,160 Speaker 1: reporter road. So who do we target? You know, I've 95 00:05:39,200 --> 00:05:40,960 Speaker 1: had a brother who is in pharmaceuticals for a long 96 00:05:40,960 --> 00:05:43,039 Speaker 1: time and we've had some great debates go round and round. 97 00:05:43,120 --> 00:05:45,120 Speaker 1: But I do wonder how do we make it better. 98 00:05:45,160 --> 00:05:48,279 Speaker 1: You mentioned we spend so much, and I'm very grateful 99 00:05:48,320 --> 00:05:51,880 Speaker 1: having traveled and been exposed to sometimes healthcare systems outside 100 00:05:51,920 --> 00:05:54,279 Speaker 1: the United States. I do know that we are privileged, 101 00:05:54,320 --> 00:05:57,960 Speaker 1: but not everybody is equally privileged, and yet the costs 102 00:05:57,960 --> 00:06:02,239 Speaker 1: are extreme and it's sometimes cumbersome and difficult to manage. 103 00:06:02,400 --> 00:06:04,880 Speaker 1: Just got about a minute left here, So what do 104 00:06:04,920 --> 00:06:06,640 Speaker 1: we do? What's your top two things that you change 105 00:06:06,640 --> 00:06:08,720 Speaker 1: that we make it better? Yeah, Carol, there are a 106 00:06:08,760 --> 00:06:11,159 Speaker 1: couple of things that would would really improve it. One is, 107 00:06:11,600 --> 00:06:14,599 Speaker 1: we in the United States do not have Health Technology Assessment. 108 00:06:14,720 --> 00:06:17,400 Speaker 1: So the FDA tells us what tells us doctors what 109 00:06:17,480 --> 00:06:20,240 Speaker 1: drugs we can prescribe, but it doesn't tell us what 110 00:06:20,360 --> 00:06:23,240 Speaker 1: drugs we should prescribe in terms of being most effective 111 00:06:23,520 --> 00:06:27,720 Speaker 1: and most efficient. So we need an external body that 112 00:06:27,760 --> 00:06:31,440 Speaker 1: can tell doctors what the data really show about whether 113 00:06:31,480 --> 00:06:35,520 Speaker 1: new therapies are better than older therapies, um, and what 114 00:06:35,640 --> 00:06:38,480 Speaker 1: the most cost effective medicine is. The other thing that 115 00:06:38,800 --> 00:06:43,640 Speaker 1: we absolutely need is transparency of clinical trial data. It's 116 00:06:43,720 --> 00:06:48,159 Speaker 1: craziness to be trusting journal articles because they're peer reviewed. 117 00:06:48,480 --> 00:06:51,279 Speaker 1: When the peer reviewers don't have access to the data, 118 00:06:51,400 --> 00:06:55,120 Speaker 1: it makes no sense. It takes us. Now forgive me, 119 00:06:55,160 --> 00:06:56,839 Speaker 1: we're running out of time. Sounds like some things that 120 00:06:56,880 --> 00:06:58,360 Speaker 1: we need to put front and center. I do hope 121 00:06:58,360 --> 00:07:00,000 Speaker 1: you'll come back, because I think this is a converse 122 00:07:00,040 --> 00:07:01,680 Speaker 1: station that we've got to spend a bit more time 123 00:07:01,720 --> 00:07:04,400 Speaker 1: with us, and and not really even gracious with your 124 00:07:04,400 --> 00:07:08,440 Speaker 1: time today. Dr John grab Abramson over at Harvard Medical School. 125 00:07:08,520 --> 00:07:10,640 Speaker 1: Check out his book Sickening, How Big Farmer Brook American 126 00:07:10,720 --> 00:07:13,120 Speaker 1: Healthcare and How we can repair It. You're listening to 127 00:07:13,160 --> 00:07:17,360 Speaker 1: Bloomberg Radio. You're listening to Bloomberg Business Week with Carol 128 00:07:17,440 --> 00:07:21,880 Speaker 1: Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. 129 00:07:22,160 --> 00:07:23,920 Speaker 1: But in the current issue of Bloomberg Business Week, a 130 00:07:23,960 --> 00:07:27,400 Speaker 1: story about unicorns, you know, the startup companies worth about 131 00:07:27,400 --> 00:07:29,320 Speaker 1: a billion or more. And as it turns out, Tim 132 00:07:29,600 --> 00:07:32,120 Speaker 1: more being minted every day. In fact, some are being 133 00:07:32,240 --> 00:07:35,240 Speaker 1: their couple being minted every single day in two It's 134 00:07:35,240 --> 00:07:39,120 Speaker 1: almost like, Joel Weber, we need a new name for unicorn. 135 00:07:39,200 --> 00:07:41,080 Speaker 1: Joel Webber is at her at Bloomberg Business Week. He's 136 00:07:41,080 --> 00:07:43,480 Speaker 1: with us in the Bloomberg Interactive Broker Studio. The story 137 00:07:43,520 --> 00:07:46,400 Speaker 1: we're referring to is by Ellen Hewitt, startups reporter for 138 00:07:46,480 --> 00:07:49,000 Speaker 1: Bloomberg News. She joins us on the phone from San Francisco. 139 00:07:49,240 --> 00:07:51,080 Speaker 1: Check out her story. It's featured in the current issue 140 00:07:51,080 --> 00:07:53,640 Speaker 1: of Bloomberg Business Week. It's available on the Bloomberg and 141 00:07:53,720 --> 00:07:55,880 Speaker 1: at bloomberg dot com slash business Week. So what do 142 00:07:55,920 --> 00:07:58,280 Speaker 1: you think, Joel um a new name for Unicorn because 143 00:07:58,280 --> 00:08:01,040 Speaker 1: they're not all that rare. I don't know what name 144 00:08:01,400 --> 00:08:10,119 Speaker 1: that would be. Uh So maybe Ellen hasn't. But Ellen 145 00:08:10,200 --> 00:08:13,320 Speaker 1: sent up a flare uh a couple of weeks ago 146 00:08:13,360 --> 00:08:17,680 Speaker 1: and basically said, we're about to hit an interesting threshold, 147 00:08:17,680 --> 00:08:21,480 Speaker 1: which is one thousand startups that will be worth a 148 00:08:21,520 --> 00:08:25,080 Speaker 1: billion or more UM, which I think is a really 149 00:08:25,160 --> 00:08:27,760 Speaker 1: interesting moment to kind of look back at this, Like, 150 00:08:27,960 --> 00:08:30,160 Speaker 1: I mean, in the tech world, this has been a 151 00:08:30,200 --> 00:08:34,360 Speaker 1: trend that has really helped define where where companies go 152 00:08:34,480 --> 00:08:38,520 Speaker 1: and increasingly where public markets go. Um. And it didn't 153 00:08:38,559 --> 00:08:42,560 Speaker 1: take that long for us to get there. Um. So, Ellen, 154 00:08:43,240 --> 00:08:49,280 Speaker 1: what was the thousand Unicorn? So there's arguably too because 155 00:08:49,320 --> 00:08:52,079 Speaker 1: there were actually two that became you know, We're born 156 00:08:52,200 --> 00:08:55,360 Speaker 1: quote unquote on February second, which was happened to be 157 00:08:55,440 --> 00:08:57,840 Speaker 1: the day that we hit the thousand number. We chose 158 00:08:57,880 --> 00:08:59,680 Speaker 1: to profile one of them. It was a company called 159 00:08:59,679 --> 00:09:03,240 Speaker 1: produc Upboard, and I could not have come up with 160 00:09:03,320 --> 00:09:06,960 Speaker 1: a more inside baseball Silicon Valley company had I tried. 161 00:09:07,480 --> 00:09:11,760 Speaker 1: They make software for product managers UM to help them 162 00:09:11,800 --> 00:09:16,120 Speaker 1: more effectively manage UM product development, which just means like 163 00:09:16,360 --> 00:09:19,120 Speaker 1: building a new app or a new feature or something 164 00:09:19,200 --> 00:09:21,640 Speaker 1: like that. And it's it's just like, you know, pms 165 00:09:21,640 --> 00:09:23,920 Speaker 1: are a big deal at tech companies and this is 166 00:09:24,000 --> 00:09:27,040 Speaker 1: just a product made for them. They're based in San Francisco. 167 00:09:27,120 --> 00:09:29,439 Speaker 1: I mean it was like it was pretty funny, UM. 168 00:09:29,960 --> 00:09:32,040 Speaker 1: But yeah, I mean, they just it was a huge 169 00:09:32,040 --> 00:09:34,959 Speaker 1: deal for them, UM, But most people don't fat And 170 00:09:35,040 --> 00:09:37,560 Speaker 1: I like, as reporters, if we get pitched a company 171 00:09:37,600 --> 00:09:39,640 Speaker 1: saying like hey we raised money and now our unicorn, 172 00:09:39,679 --> 00:09:42,160 Speaker 1: like that doesn't move the needle for us at all. 173 00:09:44,000 --> 00:09:49,440 Speaker 1: So if it wasn't called a unicorn, what would call well, 174 00:09:49,480 --> 00:09:51,920 Speaker 1: what's funny is? I talked to um alien Lee, who 175 00:09:52,040 --> 00:09:54,240 Speaker 1: is the VC who originally came up with the term, 176 00:09:54,280 --> 00:09:56,720 Speaker 1: and she said, when she was first writing the blog 177 00:09:56,760 --> 00:09:59,559 Speaker 1: post about unicorns, she was like, I was trying to 178 00:09:59,600 --> 00:10:01,280 Speaker 1: think of a a term, and I thought of like 179 00:10:01,640 --> 00:10:04,640 Speaker 1: home run or monster hit or these things that were 180 00:10:04,679 --> 00:10:07,200 Speaker 1: like pretty cheesy. And I told her, I was like, 181 00:10:07,280 --> 00:10:09,680 Speaker 1: I as a writer, I'm so glad that you picked 182 00:10:09,760 --> 00:10:12,040 Speaker 1: unicorn because there are a lot of fun metaphors you 183 00:10:12,040 --> 00:10:15,240 Speaker 1: can make with it. UM that helps us up, you know, 184 00:10:15,320 --> 00:10:19,560 Speaker 1: any sort of article about improvided very memorable art for 185 00:10:19,720 --> 00:10:23,040 Speaker 1: magazine stories. Yeah, the arts spread is amazing. I really 186 00:10:23,080 --> 00:10:25,199 Speaker 1: encourage everyone to look at the at the print version. 187 00:10:25,200 --> 00:10:30,839 Speaker 1: It's it's quite beautiful. Including Actually, I have actually wondered 188 00:10:30,880 --> 00:10:32,800 Speaker 1: when the unicorn really looks like, because I've never seen 189 00:10:32,840 --> 00:10:37,960 Speaker 1: one in the wildly. I have this Bloomberg Business Week 190 00:10:38,040 --> 00:10:40,200 Speaker 1: article in the art associated with it to show me. 191 00:10:40,600 --> 00:10:42,920 Speaker 1: Hey Ellen, I'm I'm wondering why these companies are staying 192 00:10:42,960 --> 00:10:46,400 Speaker 1: private longer. It's just something you explore in the piece um. Traditionally, 193 00:10:46,600 --> 00:10:48,800 Speaker 1: companies that have been worth so much they would have 194 00:10:48,920 --> 00:10:51,839 Speaker 1: you know, I p o well. And if you look 195 00:10:51,880 --> 00:10:54,800 Speaker 1: at the uniform list, so at the time that the 196 00:10:54,960 --> 00:10:58,360 Speaker 1: term was first coined, which was the most valuable private 197 00:10:58,360 --> 00:11:00,319 Speaker 1: company that was on that list was Twitter? It was 198 00:11:00,360 --> 00:11:02,880 Speaker 1: worth ten billion dollars. Now, if you look at the list, 199 00:11:02,920 --> 00:11:06,280 Speaker 1: the most valuable unicorns on the list are Bike Dance 200 00:11:06,400 --> 00:11:09,960 Speaker 1: at a hundred forty billion dollars um, SpaceX that around 201 00:11:09,960 --> 00:11:13,760 Speaker 1: a hundred billion, and Stripe that I think and I mean, 202 00:11:13,920 --> 00:11:15,960 Speaker 1: is you know, an order of magnitude above what we 203 00:11:16,040 --> 00:11:18,840 Speaker 1: used to have less than a decade ago. And you 204 00:11:18,880 --> 00:11:20,360 Speaker 1: know a lot of the big names that used to 205 00:11:20,400 --> 00:11:22,600 Speaker 1: be on the Unicorn list are public, like Uber Lift, 206 00:11:22,960 --> 00:11:26,000 Speaker 1: you know, Airbnb, We work all these companies. That being said, 207 00:11:26,559 --> 00:11:29,520 Speaker 1: obviously there's a lot more flexibility for companies to stay 208 00:11:29,559 --> 00:11:31,680 Speaker 1: private longer. And I think, you know, Stripe is a 209 00:11:31,679 --> 00:11:34,800 Speaker 1: good example. They've just their ability to raise money is 210 00:11:35,080 --> 00:11:38,120 Speaker 1: limitless in the private markets. Why would they go public? 211 00:11:38,160 --> 00:11:41,120 Speaker 1: It's the same story that we've heard people worrying about 212 00:11:41,120 --> 00:11:43,880 Speaker 1: for the last ten years. And and the reason you 213 00:11:43,880 --> 00:11:46,960 Speaker 1: see all these public market investors coming to the private markets, 214 00:11:47,000 --> 00:11:49,480 Speaker 1: these companies are not interested in going public if they 215 00:11:49,480 --> 00:11:52,400 Speaker 1: don't have to. They really don't have to write there's 216 00:11:52,400 --> 00:11:54,040 Speaker 1: so much money out there. So Ellen, what does it 217 00:11:54,080 --> 00:11:56,960 Speaker 1: take for a reporter who follows startups to get excited, 218 00:11:57,040 --> 00:12:00,480 Speaker 1: especially when it's not so unusual for there to be 219 00:12:00,480 --> 00:12:02,480 Speaker 1: a billion dollar company? And I think about our audience, 220 00:12:02,480 --> 00:12:04,679 Speaker 1: who is listening when we talk about these companies that 221 00:12:04,960 --> 00:12:06,960 Speaker 1: hit that billion dollar status. What are the ones that 222 00:12:07,000 --> 00:12:09,120 Speaker 1: they should be maybe paying more attention to. Is it 223 00:12:09,200 --> 00:12:12,520 Speaker 1: that nineteen billion. What is it? Oh my gosh, Well 224 00:12:12,559 --> 00:12:15,040 Speaker 1: it's funny because yeah, now as a result of how 225 00:12:15,080 --> 00:12:18,520 Speaker 1: many unicorns there are, you are seeing these ridiculous neologisms 226 00:12:18,559 --> 00:12:22,600 Speaker 1: like umu decacorn a classic, right, so ten billion or more. 227 00:12:22,600 --> 00:12:26,000 Speaker 1: But somebody was telling me hecticorn is now in vogue 228 00:12:26,000 --> 00:12:27,920 Speaker 1: because that's a hundred billion or more. I mean it's 229 00:12:28,040 --> 00:12:30,680 Speaker 1: it's um or like mega. You know, people talking about 230 00:12:30,679 --> 00:12:33,320 Speaker 1: mega funding rounds now of like a hundred million or 231 00:12:33,360 --> 00:12:37,840 Speaker 1: more and funding I mean, the goal post just move farther. 232 00:12:38,160 --> 00:12:41,120 Speaker 1: And so I think as reporters, yeah, we are looking 233 00:12:41,120 --> 00:12:44,640 Speaker 1: for companies that stand out for some other reason. Um 234 00:12:44,760 --> 00:12:49,240 Speaker 1: and I think what's tough is like for the company's perspective, 235 00:12:49,280 --> 00:12:51,520 Speaker 1: like hitting a billion dollar valuation is a really good 236 00:12:51,559 --> 00:12:53,440 Speaker 1: sign that you've built something very strong. This is what 237 00:12:53,480 --> 00:12:55,319 Speaker 1: the PC's have told me. It's like, I means you 238 00:12:55,480 --> 00:12:58,240 Speaker 1: you've got a good product, but it's no longer enough 239 00:12:58,840 --> 00:13:01,200 Speaker 1: stand out on that alone own and especially these companies 240 00:13:01,200 --> 00:13:04,400 Speaker 1: are really competing over recruiting, so that that tends to 241 00:13:04,400 --> 00:13:07,360 Speaker 1: be a place where they hope that having this public 242 00:13:07,679 --> 00:13:10,200 Speaker 1: high or this high valuation that has made public through 243 00:13:10,360 --> 00:13:12,400 Speaker 1: news reports, that will help but it tends not to 244 00:13:12,440 --> 00:13:15,280 Speaker 1: help with recruiting. They need to show that they're special 245 00:13:15,320 --> 00:13:17,760 Speaker 1: in some other way. And are we going to anticipate 246 00:13:17,760 --> 00:13:20,040 Speaker 1: in any sort of slow down in these valuations or 247 00:13:20,080 --> 00:13:22,959 Speaker 1: is the money free flowing right now in Silicon Valley. 248 00:13:23,360 --> 00:13:26,040 Speaker 1: I mean it feels like it's just been so many 249 00:13:26,080 --> 00:13:27,760 Speaker 1: years of people saying like, is there going to be 250 00:13:27,760 --> 00:13:29,560 Speaker 1: a slowdown in the private markets and there, and there 251 00:13:29,559 --> 00:13:33,080 Speaker 1: really hasn't been. Obviously. You see individual companies that maybe 252 00:13:33,080 --> 00:13:35,600 Speaker 1: were overvalued, like we work with airines or whatever, and 253 00:13:35,679 --> 00:13:38,360 Speaker 1: you see them collapse. But I mean, the trend lines 254 00:13:38,360 --> 00:13:40,920 Speaker 1: have only been going up, and even when there's been 255 00:13:41,360 --> 00:13:44,720 Speaker 1: volatility and the public markets, that hasn't usually shown up 256 00:13:44,720 --> 00:13:47,880 Speaker 1: as strongly in the private markets. And look, covid was 257 00:13:47,880 --> 00:13:50,400 Speaker 1: actually really good for all these companies, which was kind 258 00:13:50,400 --> 00:13:52,480 Speaker 1: of surprising too. I mean a lot of them make software, 259 00:13:53,040 --> 00:13:55,160 Speaker 1: and the more digital our lives become, you know, the 260 00:13:55,200 --> 00:13:59,959 Speaker 1: more the more these become valuable. I gotta acorn. That's 261 00:14:00,000 --> 00:14:02,439 Speaker 1: what I would do, all right, Ellen Hughett, great stuff. 262 00:14:02,520 --> 00:14:04,840 Speaker 1: Check it out online. It's really gorgeous in terms of 263 00:14:04,840 --> 00:14:07,280 Speaker 1: how it's laid out. She's our startups reporter at Bloomberg 264 00:14:07,320 --> 00:14:09,320 Speaker 1: News and our thanks to Joe Webber, editor of Business Week. 265 00:14:09,360 --> 00:14:12,720 Speaker 1: It's in the current issue of the magazine. This is 266 00:14:12,760 --> 00:14:16,680 Speaker 1: Bloomberg business Week with Carol Messer and Bloomberg Quick Takes 267 00:14:16,800 --> 00:14:21,280 Speaker 1: Tim Stinovic on Bloomberg Radio. Well, on Friday, Bloomberg Live 268 00:14:21,280 --> 00:14:23,400 Speaker 1: hosting its Power Players Summit. Tim and I were there. 269 00:14:23,480 --> 00:14:26,320 Speaker 1: It's bringing together folks in the sports world. And at 270 00:14:26,320 --> 00:14:29,560 Speaker 1: the event, it caught up with Jimmy Pittaro, chairman ESPN 271 00:14:29,720 --> 00:14:32,520 Speaker 1: and Sports content of the Disney Company. Also George Pine, 272 00:14:32,760 --> 00:14:36,280 Speaker 1: founder and CEO Brewing Capital, talk about meeting sports fans 273 00:14:36,280 --> 00:14:38,920 Speaker 1: wherever they are and that included the gambling world and 274 00:14:39,000 --> 00:14:45,880 Speaker 1: social media. Does what you do on social ultimately drive 275 00:14:45,960 --> 00:14:48,600 Speaker 1: to other platforms. Maybe people get a snippet of something 276 00:14:48,640 --> 00:14:50,680 Speaker 1: and then they all took ultimately want to see more. 277 00:14:50,760 --> 00:14:55,600 Speaker 1: That's that's exactly the strategy. So well, so yes, it 278 00:14:55,680 --> 00:14:57,680 Speaker 1: does work. I will tell you that this is just 279 00:14:57,760 --> 00:15:00,600 Speaker 1: one little anecdope. I was speaking at a conference UH 280 00:15:00,680 --> 00:15:04,800 Speaker 1: sales conference and we're having this exact discussion, and afterwards, 281 00:15:05,280 --> 00:15:07,280 Speaker 1: an executive came up to me and said, I just 282 00:15:07,280 --> 00:15:09,119 Speaker 1: want you to know I have I have two teenagers 283 00:15:09,400 --> 00:15:12,640 Speaker 1: and they were both introduced to ESPN on Snap and 284 00:15:12,680 --> 00:15:16,520 Speaker 1: now they're watching first take and get up on traditional television. 285 00:15:16,920 --> 00:15:20,040 Speaker 1: So for me, that's the strategy. You know, we of 286 00:15:20,040 --> 00:15:21,720 Speaker 1: course want to be there and will continue to be 287 00:15:21,720 --> 00:15:24,960 Speaker 1: there on those platforms, but it's a way to grow awareness. 288 00:15:25,000 --> 00:15:27,760 Speaker 1: So it's a way to grow affinity and and and 289 00:15:27,800 --> 00:15:32,160 Speaker 1: get this younger generation just generally excited about ESPN. And 290 00:15:32,320 --> 00:15:34,520 Speaker 1: you know the other thing that's interesting now is gambling. 291 00:15:34,840 --> 00:15:37,480 Speaker 1: Well that's sports, right, I mean, thirty one million people 292 00:15:37,480 --> 00:15:40,760 Speaker 1: are supposed to bet on the game Sunday. Eight billion 293 00:15:40,760 --> 00:15:44,960 Speaker 1: dollars will be waged legally. By the way, up we 294 00:15:45,080 --> 00:15:47,520 Speaker 1: have a company called Odds Schegar that it's kind of 295 00:15:47,520 --> 00:15:49,960 Speaker 1: a kayak for betting in the UK. We're bringing it 296 00:15:49,960 --> 00:15:52,800 Speaker 1: to America and in the first three days of New 297 00:15:52,880 --> 00:15:56,360 Speaker 1: York being live, we did of the budget revenue for 298 00:15:56,400 --> 00:15:58,800 Speaker 1: the year, so obviously we budgeted it too low, but 299 00:15:59,240 --> 00:16:01,840 Speaker 1: the gambling as sticky as well. So when you think 300 00:16:01,880 --> 00:16:06,120 Speaker 1: about gambling, social media, digital media, understanding what people want, 301 00:16:06,400 --> 00:16:10,440 Speaker 1: you know, the world's world's changing around us. Howes gambling 302 00:16:10,520 --> 00:16:14,920 Speaker 1: turn into somebody who ultimately goes to ESPN? Does it work? 303 00:16:15,000 --> 00:16:19,520 Speaker 1: I mean, well, look so here's wrong, guys. We're in it. 304 00:16:19,760 --> 00:16:21,280 Speaker 1: We are in the space. We've been in the space 305 00:16:21,320 --> 00:16:24,440 Speaker 1: for for several years. Disney actually said this week he's 306 00:16:24,440 --> 00:16:29,080 Speaker 1: bullish on sports, including betting. He is bullish on both. Um, 307 00:16:29,160 --> 00:16:31,720 Speaker 1: I will tell you we've been in the space. We 308 00:16:31,800 --> 00:16:34,840 Speaker 1: have content. We have dedicated segments on Sports Center. Scott 309 00:16:34,920 --> 00:16:37,120 Speaker 1: Van pelt has has his Sports Center where he does 310 00:16:37,160 --> 00:16:39,960 Speaker 1: a segment called Bad Beats. We have dedicated podcast, we 311 00:16:40,040 --> 00:16:42,280 Speaker 1: have a dedicated area on ESPN dot com. We have 312 00:16:42,320 --> 00:16:46,160 Speaker 1: a ESPN branded studio in Vegas on the Strip um 313 00:16:46,600 --> 00:16:50,560 Speaker 1: that generates betting specific programming on on a regular basis. 314 00:16:51,040 --> 00:16:54,760 Speaker 1: We've done the research, and of course we were treading 315 00:16:55,160 --> 00:16:58,800 Speaker 1: carefully here over the past few years, still investing, but 316 00:16:58,800 --> 00:17:01,360 Speaker 1: but really looking closely at the data. And what we 317 00:17:01,440 --> 00:17:04,439 Speaker 1: saw is that Number One, our fans are no longer 318 00:17:04,560 --> 00:17:09,120 Speaker 1: just okay with it. They're demanding it. They expect ESPN 319 00:17:09,359 --> 00:17:13,800 Speaker 1: to be offering this betting experience within our environment. Number Two, 320 00:17:13,840 --> 00:17:16,800 Speaker 1: and this is really interesting, we didn't see any negative 321 00:17:16,840 --> 00:17:18,840 Speaker 1: impact on the Disney brand. I mean, for those of 322 00:17:18,920 --> 00:17:21,040 Speaker 1: you that don't know, the Walt Disney Company owns ESPN. 323 00:17:21,119 --> 00:17:23,439 Speaker 1: So we've wanted to be careful in that regard to 324 00:17:23,520 --> 00:17:25,440 Speaker 1: and what we're seeing was it was neutral or positive 325 00:17:25,480 --> 00:17:27,960 Speaker 1: even on the Disney brand. So because I think people 326 00:17:27,960 --> 00:17:30,520 Speaker 1: thought family brand, how could you get into betting? Well, 327 00:17:30,560 --> 00:17:32,760 Speaker 1: you see, you see all the leagues now, in all 328 00:17:32,760 --> 00:17:35,280 Speaker 1: the major leagues, In fact, every league you're in, nineteen 329 00:17:35,359 --> 00:17:39,040 Speaker 1: times more likely to watch a sporting event if you 330 00:17:39,080 --> 00:17:42,000 Speaker 1: make a bet. So if I'm a broadcaster sports, how 331 00:17:42,040 --> 00:17:44,119 Speaker 1: can I not do it? Like if they don't do it, 332 00:17:44,240 --> 00:17:47,760 Speaker 1: everybody else will. They'll be at a disadvantage. ESPN really doesn't. 333 00:17:47,800 --> 00:17:50,399 Speaker 1: I can say no, no, it's you don't have a choice. 334 00:17:50,440 --> 00:17:52,800 Speaker 1: They have to. They have, like he said, he has 335 00:17:52,880 --> 00:17:54,639 Speaker 1: to be where the fans are, and he has to 336 00:17:54,680 --> 00:17:56,960 Speaker 1: give the fans what they want. Yeah, we're in a battle. 337 00:17:57,000 --> 00:17:58,960 Speaker 1: We're in a battle for people's time. We're and we're 338 00:17:58,960 --> 00:18:01,879 Speaker 1: not just competing against the traditional sports media companies. We 339 00:18:01,960 --> 00:18:04,480 Speaker 1: all know this. We're competing against Instagram and Snap and 340 00:18:04,560 --> 00:18:07,960 Speaker 1: Fortnite and Netflix, and so we have to be aggressive here. 341 00:18:08,080 --> 00:18:10,280 Speaker 1: Now that being said, my job is to protect the 342 00:18:10,320 --> 00:18:12,320 Speaker 1: brand at all costs. And if I saw any data 343 00:18:12,680 --> 00:18:15,560 Speaker 1: that that that indicated to me that that this was 344 00:18:16,359 --> 00:18:18,959 Speaker 1: a dangerous position to be taking we wouldn't do it. 345 00:18:19,280 --> 00:18:21,560 Speaker 1: Even if there was financial upside, we wouldn't. We wouldn't 346 00:18:21,600 --> 00:18:23,760 Speaker 1: do it. I have to protect the brand. But we're not. 347 00:18:23,840 --> 00:18:27,480 Speaker 1: We're just not seeing that um any worries about the 348 00:18:27,520 --> 00:18:31,840 Speaker 1: integrity of sports in general, especially as we know it's 349 00:18:31,880 --> 00:18:34,360 Speaker 1: teams getting in right, the league's getting in I mean, 350 00:18:34,600 --> 00:18:37,320 Speaker 1: everybody is really kind of all in when it comes 351 00:18:37,320 --> 00:18:39,960 Speaker 1: to betting and gambling. Well, you know, around the world, 352 00:18:40,200 --> 00:18:42,440 Speaker 1: they've been doing it for a long time without really 353 00:18:42,480 --> 00:18:44,800 Speaker 1: any issue. I mean, there's always an inititive integrity. But 354 00:18:44,840 --> 00:18:46,879 Speaker 1: I would argue you had that whether it was legal 355 00:18:47,119 --> 00:18:49,600 Speaker 1: or illegal. I mean, one of the things we're finding 356 00:18:49,680 --> 00:18:52,919 Speaker 1: is that legal bettings way up makes sense. I'd rather 357 00:18:52,960 --> 00:18:54,960 Speaker 1: make a legal bet than an illegal bet, right, So 358 00:18:54,960 --> 00:18:56,720 Speaker 1: if I don't have the choice to make a legal bet, 359 00:18:57,000 --> 00:18:58,960 Speaker 1: it's probably better. But no, we I don't. I don't 360 00:18:58,960 --> 00:19:02,160 Speaker 1: think there's any evidence that it's been a real issue. 361 00:19:02,200 --> 00:19:04,679 Speaker 1: I mean, in Europe they've been betting for quite a 362 00:19:04,680 --> 00:19:07,640 Speaker 1: long time. Yeah, And look, one of the somewhat connected 363 00:19:07,680 --> 00:19:09,399 Speaker 1: to that. One of the things that we bring to 364 00:19:09,440 --> 00:19:12,240 Speaker 1: the table, I think is is our brand, which represents 365 00:19:13,160 --> 00:19:16,880 Speaker 1: trust a certain level of credibility. So anyway, we see 366 00:19:16,920 --> 00:19:19,360 Speaker 1: opportunity here, but of course we're going to do it responsibly, 367 00:19:19,880 --> 00:19:22,240 Speaker 1: right and just tread carefully and go slowly. One of 368 00:19:22,240 --> 00:19:23,879 Speaker 1: the things you see the leaves, which I think is 369 00:19:23,920 --> 00:19:27,080 Speaker 1: really smart to that point, is talking about doing advertising 370 00:19:27,160 --> 00:19:30,159 Speaker 1: the NFL about responsible gaming. I think that's one of 371 00:19:30,200 --> 00:19:33,639 Speaker 1: the learnings that wasn't done well around the world, and 372 00:19:34,000 --> 00:19:37,399 Speaker 1: you see some of the countries of increasing regulation, and 373 00:19:37,440 --> 00:19:39,120 Speaker 1: I think the leagues here in the US they're trying 374 00:19:39,160 --> 00:19:41,760 Speaker 1: to get ahead of it by initially bring up do 375 00:19:41,880 --> 00:19:45,680 Speaker 1: this responsibly alright. That, of course was Jimmy Pittaro, he's 376 00:19:45,720 --> 00:19:48,600 Speaker 1: chairman of ESPN and sports content for the Walt Disney Company. 377 00:19:48,600 --> 00:19:51,840 Speaker 1: And George Pine, founder and CEO Brewing Capital, who has 378 00:19:51,920 --> 00:19:54,200 Speaker 1: three generations in his family who have been involved in 379 00:19:54,240 --> 00:19:57,160 Speaker 1: the NFL. So I'm really cool individuals to talk about 380 00:19:57,160 --> 00:19:58,960 Speaker 1: what's going on. Not the first time I've heard that 381 00:19:58,960 --> 00:20:02,119 Speaker 1: engagement metric about the likelihood of you actually watching an event. 382 00:20:02,480 --> 00:20:06,159 Speaker 1: It goes up significantly if you end up betting on it. 383 00:20:06,200 --> 00:20:08,200 Speaker 1: And of course the leagues are gonna want to get involved, 384 00:20:08,200 --> 00:20:10,479 Speaker 1: But how do you keep it pure? Carol, integrity right, 385 00:20:10,520 --> 00:20:15,639 Speaker 1: integrity of the game signs in locker rooms, videos, trainings. 386 00:20:15,920 --> 00:20:17,920 Speaker 1: I don't know, I don't know. And I think of 387 00:20:18,200 --> 00:20:23,560 Speaker 1: Brian Flores, the former of Miami coach head coach, his lawsuit. Uh. 388 00:20:23,840 --> 00:20:26,639 Speaker 1: And part of the concerns, or at least claims or 389 00:20:26,760 --> 00:20:30,280 Speaker 1: allegations were that the owner you know, was offering money 390 00:20:30,359 --> 00:20:33,880 Speaker 1: for him to lose games, right to improve other position 391 00:20:33,960 --> 00:20:37,920 Speaker 1: in the draft. But so you just rose. I don't 392 00:20:37,920 --> 00:20:40,080 Speaker 1: know what to say. Um, but everybody is all in 393 00:20:40,119 --> 00:20:42,320 Speaker 1: when it comes to gaming, and and these guys just 394 00:20:42,359 --> 00:20:45,840 Speaker 1: talking about wanting to be wherever the fans are. Truly 395 00:20:45,960 --> 00:20:48,960 Speaker 1: it means multiple, multiple platforms. Check out more, go to 396 00:20:48,960 --> 00:20:55,480 Speaker 1: Bloomberg Live dot com. Yeah, but you let me drive? No? No, 397 00:20:58,040 --> 00:21:04,760 Speaker 1: all right, please level, I want to drive. It's a 398 00:21:04,760 --> 00:21:15,600 Speaker 1: good question. Drive drive to the globe. Dawn on radio? 399 00:21:15,680 --> 00:21:18,000 Speaker 1: All right, just about ten minutes left in today's trading session, 400 00:21:18,040 --> 00:21:20,800 Speaker 1: getting ready to wrap up this Valentine's Day of trading. 401 00:21:20,800 --> 00:21:22,879 Speaker 1: Now a little love on Wall Street. In fact, it's 402 00:21:22,880 --> 00:21:26,399 Speaker 1: a pretty volatile relationship. I like what you did there, Carol. 403 00:21:26,720 --> 00:21:28,840 Speaker 1: Have you been waiting a year to say that? What 404 00:21:28,880 --> 00:21:30,680 Speaker 1: would have happened if stocks are in the green today? 405 00:21:30,760 --> 00:21:34,240 Speaker 1: This is what happens when you get no sleep, Yeah, exactly. 406 00:21:34,280 --> 00:21:36,400 Speaker 1: All right, let's get to it with Michael Sheldon. He's 407 00:21:36,400 --> 00:21:39,320 Speaker 1: executive director and chief investment officer at High Tower r 408 00:21:39,400 --> 00:21:42,160 Speaker 1: d M Financial Group based in Westport, Connecticut, and that's 409 00:21:42,160 --> 00:21:45,399 Speaker 1: where we find him on the phone on this Monday. Michael, 410 00:21:45,440 --> 00:21:49,240 Speaker 1: how are you good? Thanks very much and happy Valentine 411 00:21:49,320 --> 00:21:54,720 Speaker 1: States everyone in our viewers. Yeah, no, absolutely, it's been 412 00:21:54,880 --> 00:21:56,520 Speaker 1: a wacky day. I was just looking at some of 413 00:21:56,520 --> 00:21:58,639 Speaker 1: the swings in the major averages, like two percent on 414 00:21:58,640 --> 00:22:00,560 Speaker 1: the NAZACK one hundred, about one and a half percent 415 00:22:00,600 --> 00:22:04,760 Speaker 1: on the S and P five. Um hmm. How do 416 00:22:04,800 --> 00:22:07,000 Speaker 1: you make sense of a day like today when we're 417 00:22:07,000 --> 00:22:10,880 Speaker 1: watching the tensions the geopolitical concerns involving Russia and Ukraine 418 00:22:10,880 --> 00:22:13,320 Speaker 1: and the rest of the world. But we've also got 419 00:22:13,320 --> 00:22:17,040 Speaker 1: some nervousness about how aggressive the Fed. Maybe, yeah, I 420 00:22:17,040 --> 00:22:19,760 Speaker 1: think from the markets unfortunately, we're probably going to be 421 00:22:19,760 --> 00:22:22,320 Speaker 1: in the sort of trading range and markets are likely 422 00:22:22,359 --> 00:22:25,359 Speaker 1: to remain unsettled for for the near term until we 423 00:22:25,400 --> 00:22:29,320 Speaker 1: have more clarity on on the outlook for inflation shifting 424 00:22:29,320 --> 00:22:32,960 Speaker 1: FED policy and more recently the situation in Russia. Russia 425 00:22:33,000 --> 00:22:35,159 Speaker 1: and the Ukraine. What do you make of the situation 426 00:22:35,200 --> 00:22:37,440 Speaker 1: in Russia and Ukraine. Because we had Christina Hooper from 427 00:22:37,440 --> 00:22:40,080 Speaker 1: Investco on Quick take Stock earlier today and she mentioned 428 00:22:40,080 --> 00:22:43,640 Speaker 1: that oftentimes geopolitical shocks like this are relatively short lived 429 00:22:43,640 --> 00:22:45,480 Speaker 1: in terms of effects to the markets, but she said 430 00:22:45,480 --> 00:22:49,160 Speaker 1: this one could be different because of the impact on oil. Yeah, 431 00:22:49,200 --> 00:22:51,440 Speaker 1: I think it's certainly a wild card. It's really tough 432 00:22:51,480 --> 00:22:54,640 Speaker 1: to figure out what Putin's intentions are at this point. Um, 433 00:22:54,680 --> 00:22:57,360 Speaker 1: he could just be trying to cement his legacy as 434 00:22:57,720 --> 00:23:00,320 Speaker 1: as a dictator or leader of Russia. You know. We 435 00:23:00,359 --> 00:23:03,080 Speaker 1: look back also at a number of geopolitical events going 436 00:23:03,119 --> 00:23:06,880 Speaker 1: back as far back. Ash's looked at about twenty five 437 00:23:06,920 --> 00:23:09,520 Speaker 1: of these and granted each one is different, but what 438 00:23:09,600 --> 00:23:12,240 Speaker 1: had showed is that on average s D S and 439 00:23:12,280 --> 00:23:15,479 Speaker 1: P five hundred fell about one point one percent on 440 00:23:15,520 --> 00:23:18,080 Speaker 1: the day of a j geo political event, and it 441 00:23:18,200 --> 00:23:21,200 Speaker 1: fell a total of about five almost five percent over 442 00:23:21,240 --> 00:23:24,840 Speaker 1: the next twenty days, but eventually recovered its losses over 443 00:23:24,880 --> 00:23:28,280 Speaker 1: the next forty three days. So most of these events 444 00:23:28,280 --> 00:23:30,919 Speaker 1: have been fairly limited with the market rebounding, and of 445 00:23:30,960 --> 00:23:33,880 Speaker 1: course each period is different. Russia is a pretty big 446 00:23:33,920 --> 00:23:36,639 Speaker 1: player here. I think they supply about ten percent of 447 00:23:36,680 --> 00:23:40,040 Speaker 1: the world's oil, and they also supply about one third 448 00:23:40,040 --> 00:23:43,760 Speaker 1: of Europe's natural gas. So the implications of what happens 449 00:23:44,040 --> 00:23:46,840 Speaker 1: UH certainly could be far reaching, probably more so for 450 00:23:46,960 --> 00:23:49,720 Speaker 1: Europe than for the US. What's more problematic the geo 451 00:23:49,720 --> 00:23:53,200 Speaker 1: political concerns, the reminder that the pandemic is far from over, 452 00:23:53,320 --> 00:23:55,480 Speaker 1: and it's a global pandemic and until the world is 453 00:23:55,520 --> 00:23:57,600 Speaker 1: out of it, none of us are out of it. 454 00:23:58,280 --> 00:24:02,160 Speaker 1: Or is it that fundamentally? As our Gina Martin Adams 455 00:24:02,200 --> 00:24:06,880 Speaker 1: reminded us that we are seeing analysts bring down their 456 00:24:06,920 --> 00:24:09,560 Speaker 1: expectations for earnings, but yet we're still looking for a 457 00:24:09,640 --> 00:24:13,159 Speaker 1: nine revenue growth, which, as she said, still fantastic. What 458 00:24:13,320 --> 00:24:16,520 Speaker 1: is the thing investors really need to be focusing on, Well, 459 00:24:16,560 --> 00:24:18,480 Speaker 1: you left one thing off your lip, which is the FED. 460 00:24:19,080 --> 00:24:20,520 Speaker 1: And I think at the top of the list is 461 00:24:20,520 --> 00:24:23,840 Speaker 1: the FED right now. The you know, I think that 462 00:24:24,040 --> 00:24:26,879 Speaker 1: because of concerns about the level and stickiness of inflation, 463 00:24:27,359 --> 00:24:29,800 Speaker 1: that's put pressure on the FED to finally start raising 464 00:24:29,800 --> 00:24:33,320 Speaker 1: interest rates and um a short term after that they're 465 00:24:33,359 --> 00:24:36,680 Speaker 1: likely to start QT. So I think there's a lot 466 00:24:36,680 --> 00:24:40,040 Speaker 1: of uncertainty about the pace and timing and ultimate destination 467 00:24:40,080 --> 00:24:42,480 Speaker 1: of what's going to happen to the short term rates. 468 00:24:43,040 --> 00:24:46,040 Speaker 1: And I think importantly the Fed's aware that the yield 469 00:24:46,080 --> 00:24:48,800 Speaker 1: curve is narrowing. That's the that's the gap between two 470 00:24:48,880 --> 00:24:52,080 Speaker 1: year and ten year yields, so the yield curve is narrowing. 471 00:24:52,520 --> 00:24:56,800 Speaker 1: I think the Michigan Consumer Compidence Index, for example, which 472 00:24:56,800 --> 00:24:58,880 Speaker 1: came out last week, fell to an eleven year low. 473 00:24:59,359 --> 00:25:01,400 Speaker 1: And I think FED members are aware of the fact 474 00:25:01,480 --> 00:25:04,159 Speaker 1: that if there are too many aggressive rate hikes, that 475 00:25:04,200 --> 00:25:07,280 Speaker 1: can actually harm the economy. But they are also aware 476 00:25:07,280 --> 00:25:09,560 Speaker 1: of that inflation is that at forty year high, So 477 00:25:09,600 --> 00:25:11,800 Speaker 1: I think they have to address the inflation part. But 478 00:25:12,040 --> 00:25:14,200 Speaker 1: I think they're probably going to start off with quarter 479 00:25:14,240 --> 00:25:17,240 Speaker 1: point hikes and see how things go and remain some 480 00:25:17,440 --> 00:25:19,960 Speaker 1: and and continue to have some flexibility as we go 481 00:25:20,000 --> 00:25:22,440 Speaker 1: through the year. So do you anticipate a quarter point 482 00:25:22,480 --> 00:25:24,719 Speaker 1: hike in March and then a quarter point hike at 483 00:25:24,760 --> 00:25:28,560 Speaker 1: each subsequent meeting. Well, we have seven more rate meetings 484 00:25:28,560 --> 00:25:30,680 Speaker 1: this year, so I think a quarter point in March. 485 00:25:31,000 --> 00:25:34,480 Speaker 1: I think not enough FED officials have signaled their um 486 00:25:34,600 --> 00:25:37,320 Speaker 1: likelihood or their need for that they're wanting to do 487 00:25:37,359 --> 00:25:39,199 Speaker 1: fifty basis points, so I think that's a little too 488 00:25:39,200 --> 00:25:41,840 Speaker 1: aggressive at the first meeting. That could change, but I 489 00:25:41,880 --> 00:25:44,600 Speaker 1: think a quarter point in March, probably a quarter point 490 00:25:44,640 --> 00:25:48,000 Speaker 1: in May, a quarter point in June. That's seventy basis points, 491 00:25:48,400 --> 00:25:50,280 Speaker 1: and I wouldn't be surprised to see one or two 492 00:25:50,320 --> 00:25:52,200 Speaker 1: more in the second half of the year. But again, 493 00:25:52,240 --> 00:25:54,399 Speaker 1: I do think the economy could change as we shift 494 00:25:54,480 --> 00:25:57,119 Speaker 1: and go through the year. So nothing is written in stone, 495 00:25:57,160 --> 00:25:59,679 Speaker 1: but the Fed does have to start taking action, and 496 00:26:00,000 --> 00:26:03,359 Speaker 1: I think they also definitely have to address their balance sheet, 497 00:26:03,400 --> 00:26:06,800 Speaker 1: which increased from about four trillion to nine trillion, so 498 00:26:06,840 --> 00:26:08,879 Speaker 1: I would expect that to start running off as well 499 00:26:08,920 --> 00:26:10,399 Speaker 1: as we get into the summer. So what do we 500 00:26:10,440 --> 00:26:12,520 Speaker 1: do as an investor? As you watch, especially markets kind 501 00:26:12,520 --> 00:26:14,080 Speaker 1: of bounced back and forth. I mean, we went through 502 00:26:14,080 --> 00:26:17,320 Speaker 1: a day earlier where travel stocks are rallying as a 503 00:26:17,320 --> 00:26:21,120 Speaker 1: as a whole on expectations of easing of attentions over 504 00:26:21,359 --> 00:26:24,960 Speaker 1: in Russia and Ukraine, and then we saw them sell 505 00:26:25,000 --> 00:26:27,439 Speaker 1: off and then do just bouncing around. It's really you know, 506 00:26:27,560 --> 00:26:29,919 Speaker 1: your day may start one way Michael and then end 507 00:26:29,960 --> 00:26:33,639 Speaker 1: another or go through several gyrations in uh, you know, 508 00:26:33,720 --> 00:26:37,080 Speaker 1: one market day Yeah, they're challenging time to be an 509 00:26:37,119 --> 00:26:41,000 Speaker 1: investor for sure. We think this year in two thousand 510 00:26:41,080 --> 00:26:44,560 Speaker 1: twenty two, markets are likely to be rotational in nature 511 00:26:44,800 --> 00:26:46,680 Speaker 1: and sort of a lot like we saw last year, 512 00:26:46,680 --> 00:26:48,800 Speaker 1: where at some point people would be worried about too 513 00:26:48,840 --> 00:26:51,200 Speaker 1: much inflation as they are today, but down the road 514 00:26:51,240 --> 00:26:54,399 Speaker 1: they may be worried about not enough growth. So I 515 00:26:54,440 --> 00:26:57,040 Speaker 1: think between growth and value. I think you want to 516 00:26:57,080 --> 00:27:00,760 Speaker 1: have a balance between both growth and value, especially with 517 00:27:00,840 --> 00:27:04,240 Speaker 1: interest rates rising right now. We've been very much overweight 518 00:27:04,280 --> 00:27:06,360 Speaker 1: growth over the past decade or so and it's turned 519 00:27:06,400 --> 00:27:09,000 Speaker 1: out pretty well in terms of a tail and for portfolios, 520 00:27:09,040 --> 00:27:11,119 Speaker 1: but on the margin, we're starting to shift more, a 521 00:27:11,119 --> 00:27:13,399 Speaker 1: little bit more to the middle between growth and value, 522 00:27:13,640 --> 00:27:15,160 Speaker 1: and I think you want to have a little bit 523 00:27:15,160 --> 00:27:17,880 Speaker 1: of more, a little more more balance in your portfolios 524 00:27:17,960 --> 00:27:20,240 Speaker 1: as we go through this year. So what does that 525 00:27:20,240 --> 00:27:22,000 Speaker 1: look like? What was it? What does balance look like? 526 00:27:23,320 --> 00:27:25,240 Speaker 1: So balance means you want to have some technology in 527 00:27:25,280 --> 00:27:29,280 Speaker 1: your portfolios, because there's some exciting areas and artificial intelligence 528 00:27:29,320 --> 00:27:32,600 Speaker 1: and five G and drive a less cars and all 529 00:27:32,600 --> 00:27:34,520 Speaker 1: those types of things. So you want to have that 530 00:27:34,560 --> 00:27:37,440 Speaker 1: and that provides the growth for that that investors need 531 00:27:37,480 --> 00:27:40,080 Speaker 1: to meet their long term investment objectives. But you also 532 00:27:40,200 --> 00:27:42,960 Speaker 1: need to have some exposure to areas like health care 533 00:27:43,000 --> 00:27:45,240 Speaker 1: for example, which we call it sort of like garp 534 00:27:45,480 --> 00:27:48,000 Speaker 1: or growth at a reasonable price, and then some energy 535 00:27:48,000 --> 00:27:51,440 Speaker 1: and financial exposure as well. So the one areas were 536 00:27:51,440 --> 00:27:53,480 Speaker 1: not sort of loading up on right now are consumer 537 00:27:53,520 --> 00:27:56,320 Speaker 1: staples and utilities because we think it's kind of too 538 00:27:56,320 --> 00:27:59,040 Speaker 1: early in the cycle to get ultra defensive at this point, 539 00:27:59,440 --> 00:28:02,480 Speaker 1: and it's not a lot of attractive growth in those 540 00:28:02,640 --> 00:28:05,679 Speaker 1: in those sectors. All Right, we gotta run. Hey, Michael, 541 00:28:05,680 --> 00:28:07,680 Speaker 1: thank you so much. Have a good week. Michael Sheldon. 542 00:28:07,760 --> 00:28:10,520 Speaker 1: He's executive director and chief investment officer at high Tower 543 00:28:10,640 --> 00:28:13,800 Speaker 1: r DM Financial Group, based in Westport, Connecticut, which is 544 00:28:13,840 --> 00:28:16,879 Speaker 1: where we found him on the phone on this Valentine's 545 00:28:16,920 --> 00:28:20,800 Speaker 1: Day Monday. Thanks for listening to Bloomberg Business Week. Download 546 00:28:20,800 --> 00:28:24,119 Speaker 1: the podcast on iTunes, SoundCloud, or Bloomberg dot com, and 547 00:28:24,160 --> 00:28:25,880 Speaker 1: you can also listen to our radio show at two 548 00:28:25,880 --> 00:28:28,800 Speaker 1: pm Eastern on Bloomberg Radio or watch us on YouTube. 549 00:28:28,880 --> 00:28:30,399 Speaker 1: Search to Bloomberg Global News