1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day, we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,520 --> 00:00:15,520 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,560 --> 00:00:18,439 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:22,079 Speaker 1: at Bloomberg dot com slash podcast. I'm seeing red on 7 00:00:22,120 --> 00:00:23,840 Speaker 1: the screen, but I need to see some green at 8 00:00:23,880 --> 00:00:26,120 Speaker 1: some point. But let's talk to a professional who does 9 00:00:26,120 --> 00:00:30,560 Speaker 1: this stuff for a living. Natalie Wolfson, CEO at Asset Mark. Natalie, 10 00:00:30,600 --> 00:00:32,839 Speaker 1: thanks so much for taking the time to join us here. 11 00:00:32,840 --> 00:00:34,559 Speaker 1: I love to get your thought here as we kind 12 00:00:34,560 --> 00:00:40,559 Speaker 1: of put a bow on uh two, what do we 13 00:00:40,600 --> 00:00:44,320 Speaker 1: do for? Because I got crushed in my equities, I 14 00:00:44,360 --> 00:00:47,760 Speaker 1: got crushed in my bonds. I have a big barrel 15 00:00:47,760 --> 00:00:51,120 Speaker 1: of oil in my house. I'm okay there, But what 16 00:00:51,159 --> 00:00:54,000 Speaker 1: do you do? You know? It's it's interesting, um as 17 00:00:54,000 --> 00:00:56,920 Speaker 1: a result of sort of of the feds um really 18 00:00:57,000 --> 00:01:00,160 Speaker 1: relentless tightening in the second half of this year, they're 19 00:01:00,200 --> 00:01:04,319 Speaker 1: actually interesting opportunities right now in short term treasuries. If 20 00:01:04,319 --> 00:01:06,520 Speaker 1: you want to build a short term treasury portfolio with 21 00:01:06,560 --> 00:01:09,120 Speaker 1: the duration of you know, roughly half a year you 22 00:01:09,160 --> 00:01:11,480 Speaker 1: can get four point six percent in yield. And so 23 00:01:11,920 --> 00:01:13,920 Speaker 1: right now, I think all of us, whether you're a 24 00:01:13,920 --> 00:01:17,240 Speaker 1: CEO looking to manage your cost structure or an investor 25 00:01:17,319 --> 00:01:20,560 Speaker 1: looking into next year, feeling a little risk averse and 26 00:01:20,640 --> 00:01:22,080 Speaker 1: maybe like we want to wait and see, and so 27 00:01:22,160 --> 00:01:24,839 Speaker 1: that's a good way to do that. But is that 28 00:01:25,160 --> 00:01:27,520 Speaker 1: I mean I heard the same thing from my financial 29 00:01:27,560 --> 00:01:30,840 Speaker 1: advisor recently. Is that the only thing out there? I mean, 30 00:01:30,880 --> 00:01:33,520 Speaker 1: are there do you have some riskier ideas that maybe 31 00:01:33,600 --> 00:01:36,520 Speaker 1: higher return because four point six percent is great, especially 32 00:01:36,520 --> 00:01:40,320 Speaker 1: if it's completely risk free. I love it, and so short, Um, 33 00:01:40,400 --> 00:01:44,640 Speaker 1: but what else you know, it's it's interesting. Um, clearly 34 00:01:44,680 --> 00:01:47,120 Speaker 1: there's a lot, you know, going on right now in 35 00:01:47,200 --> 00:01:50,040 Speaker 1: the alternative side of the arena. So if you look 36 00:01:50,080 --> 00:01:52,680 Speaker 1: at some of the investments that private equity is making 37 00:01:52,760 --> 00:01:54,600 Speaker 1: right now, if you're willing to hold it for the 38 00:01:54,720 --> 00:01:57,440 Speaker 1: long term, um, that's clearly a part of the market 39 00:01:57,560 --> 00:02:00,680 Speaker 1: that has historically done well, and markets this where things 40 00:02:00,720 --> 00:02:03,800 Speaker 1: are a little volatile on the public side. So I 41 00:02:03,800 --> 00:02:08,000 Speaker 1: would absolutely absolutely look there. Um. In addition to that, 42 00:02:08,120 --> 00:02:09,920 Speaker 1: you know, if you're willing to take a little risk 43 00:02:10,560 --> 00:02:13,680 Speaker 1: in the first year post a bear market. In that 44 00:02:13,800 --> 00:02:17,200 Speaker 1: first year, fifty percent of the total bell bear returns 45 00:02:17,280 --> 00:02:20,080 Speaker 1: it's actually forty eight percent, but roughly fifty percent of 46 00:02:20,120 --> 00:02:23,119 Speaker 1: the total bear returns on average happen in that first year. 47 00:02:23,639 --> 00:02:26,160 Speaker 1: So legging into equities, even if you want to do 48 00:02:26,200 --> 00:02:28,400 Speaker 1: it in a passive way, UM, as long as you're 49 00:02:28,400 --> 00:02:31,280 Speaker 1: willing to stay the course if things get a little 50 00:02:31,320 --> 00:02:33,919 Speaker 1: worse from here, you won't miss that first year, which 51 00:02:33,960 --> 00:02:36,760 Speaker 1: is really important. Natalie are you you're based in California? 52 00:02:36,960 --> 00:02:38,880 Speaker 1: I am What are you doing in New York? Then? 53 00:02:39,280 --> 00:02:41,680 Speaker 1: I am here for a board meeting? Okay, all right, 54 00:02:41,720 --> 00:02:43,880 Speaker 1: I just want to check you know, people coming into tourists. 55 00:02:43,880 --> 00:02:46,120 Speaker 1: You're coming back big time, Matt. I was kind of 56 00:02:46,160 --> 00:02:49,359 Speaker 1: out and about Midtown yesterday and they are out. I mean, 57 00:02:49,480 --> 00:02:51,919 Speaker 1: every language on the planet's being spoken. Here is the 58 00:02:51,960 --> 00:02:53,760 Speaker 1: last place I want to be right now? Why not? 59 00:02:54,160 --> 00:02:59,600 Speaker 1: The weather is off? Please, it's it's the greatest. Talk 60 00:02:59,680 --> 00:03:01,480 Speaker 1: to us about asset mark. I mean, you work with 61 00:03:01,520 --> 00:03:05,919 Speaker 1: independent advisors. What do they sing? Are they seeing money 62 00:03:06,000 --> 00:03:09,120 Speaker 1: come their way? What do you guys, asset mark? Where 63 00:03:09,160 --> 00:03:10,680 Speaker 1: where do you add value? How do you try to 64 00:03:10,720 --> 00:03:14,440 Speaker 1: help your clients as Mark helps our clients by helping 65 00:03:14,480 --> 00:03:18,080 Speaker 1: them compete at any size, and so we provide outsourced 66 00:03:18,120 --> 00:03:23,239 Speaker 1: and investment services, technology and support, the support and entrepreneur 67 00:03:23,320 --> 00:03:26,519 Speaker 1: needs to run a thriving business for our advisors. And 68 00:03:26,560 --> 00:03:29,800 Speaker 1: as a result, advisors who use us have on average 69 00:03:29,800 --> 00:03:33,640 Speaker 1: about fourteen points more operating leverage than their competition if 70 00:03:33,680 --> 00:03:36,600 Speaker 1: you look at publicly available data UM, which is great 71 00:03:36,720 --> 00:03:39,640 Speaker 1: because advisors can use that fourteen points to invest in 72 00:03:39,680 --> 00:03:42,160 Speaker 1: areas that are really important to their clients, which helps 73 00:03:42,160 --> 00:03:45,840 Speaker 1: them grow. So are advisor groups Are they leaving the 74 00:03:45,880 --> 00:03:48,400 Speaker 1: Merrill Lynch platforms, the Smith Barney platforms and all that 75 00:03:48,680 --> 00:03:50,440 Speaker 1: and kind of going out on their own. Is that 76 00:03:50,600 --> 00:03:53,760 Speaker 1: still a trend? Yes, the move to independence is still 77 00:03:53,760 --> 00:03:58,240 Speaker 1: a trend. In addition, advisors often they start, they get 78 00:03:58,280 --> 00:04:01,040 Speaker 1: their uh c f A or c a P certification 79 00:04:01,080 --> 00:04:02,680 Speaker 1: and they start and they want to be an entrepreneur 80 00:04:02,880 --> 00:04:06,080 Speaker 1: and serve clients and their local community. I have one 81 00:04:06,120 --> 00:04:10,600 Speaker 1: advisor who decided that she wanted to move away um 82 00:04:10,640 --> 00:04:13,200 Speaker 1: from UH that he I'm sorry, I wanted to move 83 00:04:13,200 --> 00:04:16,400 Speaker 1: away from the auto manufacturing industry and become an advisor. 84 00:04:16,480 --> 00:04:18,919 Speaker 1: And now he serves clients in that industry because no 85 00:04:18,960 --> 00:04:22,120 Speaker 1: one understands it better than him. Interesting, what what do 86 00:04:22,160 --> 00:04:25,320 Speaker 1: you think about value stocks right now? I see first 87 00:04:25,320 --> 00:04:28,760 Speaker 1: eagle on your resume? Yes, yes, uh, first eagle. I 88 00:04:29,000 --> 00:04:32,080 Speaker 1: clearly value is near and dear to my heart, and um, 89 00:04:32,360 --> 00:04:34,000 Speaker 1: you know I always love value stocks that you know, 90 00:04:34,040 --> 00:04:36,760 Speaker 1: it's important to understand the companies you're investing in, and 91 00:04:36,880 --> 00:04:38,880 Speaker 1: at the heart of the matter, that's value. So I 92 00:04:38,920 --> 00:04:40,719 Speaker 1: like that. Right now, how do you define value? Do 93 00:04:40,720 --> 00:04:43,680 Speaker 1: you go to the typical price, earnings price the book? 94 00:04:44,000 --> 00:04:45,640 Speaker 1: How do you think of value? Because I guess values 95 00:04:45,640 --> 00:04:48,000 Speaker 1: a relative term for a lot of people. Yeah, so 96 00:04:48,120 --> 00:04:50,440 Speaker 1: for me, it's definitely more price to book and then 97 00:04:50,480 --> 00:04:53,799 Speaker 1: looking at sales, making sure you really understand what's driving 98 00:04:53,800 --> 00:04:59,000 Speaker 1: sales and what's driving revenue growth. Are there tools newer tools? 99 00:04:59,040 --> 00:05:01,239 Speaker 1: I'm thinking about et F, But maybe there's something else 100 00:05:01,320 --> 00:05:04,080 Speaker 1: that you think are trending up for for the right 101 00:05:04,120 --> 00:05:07,120 Speaker 1: reasons right now? Um. So, one thing that I think 102 00:05:07,200 --> 00:05:11,080 Speaker 1: is really important is personalization is finally coming to investing, 103 00:05:11,560 --> 00:05:14,880 Speaker 1: and so I'm a really big believer in direct indexing 104 00:05:14,920 --> 00:05:17,280 Speaker 1: as being a trend that's going to stay with us. 105 00:05:17,600 --> 00:05:19,320 Speaker 1: Um And the reason for that is I think in 106 00:05:19,320 --> 00:05:22,400 Speaker 1: in every part of investors lives. They're able to personalize 107 00:05:22,400 --> 00:05:24,880 Speaker 1: what they do. Why not with their investments. You know, 108 00:05:24,880 --> 00:05:27,400 Speaker 1: if you're if you're feeling that you don't want to 109 00:05:27,400 --> 00:05:29,680 Speaker 1: invest in a particular part of the market because of 110 00:05:30,279 --> 00:05:32,719 Speaker 1: a value you have, or you really want to double 111 00:05:32,760 --> 00:05:34,280 Speaker 1: down on that part of market, you should be able 112 00:05:34,320 --> 00:05:37,480 Speaker 1: to do it and still have a portfolio that has 113 00:05:37,760 --> 00:05:42,839 Speaker 1: um return characteristics that you're comfortable with. Direct indexing, you 114 00:05:42,839 --> 00:05:46,000 Speaker 1: can basically build your own index, right. You can take 115 00:05:46,040 --> 00:05:50,400 Speaker 1: someone else's index and say, um, you don't want Google 116 00:05:50,600 --> 00:05:53,560 Speaker 1: or Facebook in your SMP. You can just pull them 117 00:05:53,560 --> 00:05:57,360 Speaker 1: out and have the rest of the SMP um. I mean, 118 00:05:57,400 --> 00:05:59,839 Speaker 1: you can do anything you want, right, that's right, and 119 00:06:00,120 --> 00:06:01,479 Speaker 1: you can pull them out and then you can put 120 00:06:01,480 --> 00:06:05,000 Speaker 1: something in that has a similar return characteristic, or you 121 00:06:05,040 --> 00:06:08,279 Speaker 1: can double weight something that has a similar return characteristics, 122 00:06:08,320 --> 00:06:11,600 Speaker 1: so you still have um you know, on paper roughly 123 00:06:11,680 --> 00:06:13,919 Speaker 1: the performance of the SMP. Not as a retail investor, 124 00:06:13,920 --> 00:06:17,039 Speaker 1: but this is something that the advisors with whom you 125 00:06:17,120 --> 00:06:20,000 Speaker 1: work can do and that offer their clients both actually 126 00:06:20,000 --> 00:06:23,200 Speaker 1: advisors with whom my work can help retail investors build 127 00:06:23,200 --> 00:06:26,560 Speaker 1: the index that's perfect for them and it's extremely important 128 00:06:26,680 --> 00:06:29,240 Speaker 1: for an investor to understand, you know, tracking error and 129 00:06:29,320 --> 00:06:32,719 Speaker 1: concepts that might not be immediately evident um. But also 130 00:06:32,800 --> 00:06:36,080 Speaker 1: investors can do it directly using several retail platforms. All right, 131 00:06:36,120 --> 00:06:38,800 Speaker 1: good stuff cool. Natalie Wolfson, CEO of Asset Mark, joining 132 00:06:38,839 --> 00:06:40,880 Speaker 1: us live here in our Bloomberg Interactive Broker studio in 133 00:06:40,920 --> 00:06:48,560 Speaker 1: from California. Marijuana stocks are tumbling today after Senate Minority 134 00:06:48,640 --> 00:06:52,400 Speaker 1: Leader Mitch McConnell criticized attempts to add a marijuana banking 135 00:06:52,440 --> 00:06:56,000 Speaker 1: bill the National Defense Authorization Acts. So we said, let's 136 00:06:56,000 --> 00:06:59,640 Speaker 1: talk about the cannabis biz. Does Mitch McConnell have against weed? 137 00:07:00,040 --> 00:07:02,040 Speaker 1: He just doesn't look like a weed friendly dude when 138 00:07:02,040 --> 00:07:05,200 Speaker 1: you look at him, you know, So it doesn't true. 139 00:07:05,400 --> 00:07:07,240 Speaker 1: They grow some of the best weed in the whole country. 140 00:07:07,240 --> 00:07:10,880 Speaker 1: There absolutely some good bourbon too. Josh Joseph joins us. 141 00:07:10,920 --> 00:07:14,320 Speaker 1: He's the CEO and founder of Big Plan Holdings. Josh, 142 00:07:14,400 --> 00:07:15,920 Speaker 1: thanks so much for joining us here. I love for 143 00:07:15,920 --> 00:07:17,120 Speaker 1: you to give us just kind of the lay of 144 00:07:17,160 --> 00:07:20,360 Speaker 1: the land. What do you guys do at Big Plan Holdings. 145 00:07:23,720 --> 00:07:25,680 Speaker 1: I don't believe Josh is there. I don't believe Josh 146 00:07:25,800 --> 00:07:28,520 Speaker 1: is there. Somebody's gotta push like the button that brings 147 00:07:28,600 --> 00:07:31,240 Speaker 1: Josh back. But so to I'm lo gonna till ray 148 00:07:31,280 --> 00:07:32,920 Speaker 1: the stock is off today. That's like one of the 149 00:07:32,920 --> 00:07:37,240 Speaker 1: big weed companies. UM, Josh Joseph CEO and founder Big 150 00:07:37,240 --> 00:07:40,720 Speaker 1: Plan Holdings. You there, my friend, can you hear me? Okay, 151 00:07:40,920 --> 00:07:43,960 Speaker 1: yes we can absolutely. We're just talking cannabis here. We we 152 00:07:43,840 --> 00:07:45,680 Speaker 1: we love to get a sense of what you guys 153 00:07:46,160 --> 00:07:52,840 Speaker 1: at Big Plan Holdings are up to these days. All 154 00:07:52,920 --> 00:07:57,440 Speaker 1: right today guys much appreciated, and you have to jump 155 00:07:57,440 --> 00:08:00,800 Speaker 1: into a Big Plan Holdings and you know what we're 156 00:08:01,040 --> 00:08:06,000 Speaker 1: what we're all about is UH a family office diversified 157 00:08:06,320 --> 00:08:09,960 Speaker 1: in many different investment verticals. UH, you know, with one 158 00:08:10,000 --> 00:08:13,440 Speaker 1: of our primary focals, UH focal points certainly based in 159 00:08:13,480 --> 00:08:17,400 Speaker 1: the cannabis and UH and CBD industries. UM, coming out 160 00:08:17,440 --> 00:08:20,200 Speaker 1: of a great deal of experience in cannabis. It's two 161 00:08:20,200 --> 00:08:23,760 Speaker 1: thousand fourteen. So you've been what you did? You start 162 00:08:23,800 --> 00:08:27,520 Speaker 1: off in real estate and then get into we'd real 163 00:08:27,640 --> 00:08:31,200 Speaker 1: estate and then go to Big Plan Holdings. Yeah. Yeah, 164 00:08:31,240 --> 00:08:33,800 Speaker 1: my my quick professional track and I'll give you you 165 00:08:33,840 --> 00:08:37,800 Speaker 1: guys an abbreviated version of that is have specialized in 166 00:08:37,840 --> 00:08:41,120 Speaker 1: commercial real estate around the country probably for about twenty 167 00:08:41,120 --> 00:08:44,480 Speaker 1: six or twenty seven years, all facets of real estate 168 00:08:44,640 --> 00:08:48,640 Speaker 1: from uh, you know, development to straight up ownership of 169 00:08:48,679 --> 00:08:52,079 Speaker 1: existing assets to a lot of bankruptcy and distressed real 170 00:08:52,160 --> 00:08:55,560 Speaker 1: estate sales and transacted and you know, probably forty or 171 00:08:55,559 --> 00:08:59,400 Speaker 1: forty five states around the country. So I've had a 172 00:08:59,520 --> 00:09:02,760 Speaker 1: very very fortunate run in the commercial real estate sector. 173 00:09:03,280 --> 00:09:06,520 Speaker 1: That that then evolved into jumping into the state of 174 00:09:06,559 --> 00:09:11,040 Speaker 1: Illinois UH their cannabis program in two thousand fourteen as 175 00:09:11,080 --> 00:09:15,560 Speaker 1: an applicant UH and successfully securing seven of the initial 176 00:09:16,080 --> 00:09:21,480 Speaker 1: fifty medical retail dispensary licenses. UM, which also cannabis, also 177 00:09:21,559 --> 00:09:25,000 Speaker 1: has a very very big overlap within real estate as well. 178 00:09:25,120 --> 00:09:27,839 Speaker 1: You can't have a dispensary or a growth facility or 179 00:09:27,880 --> 00:09:31,360 Speaker 1: extraction or manufacturing facility or anything without real estate. So 180 00:09:31,640 --> 00:09:33,440 Speaker 1: they really did go hand in hand. But what's the 181 00:09:33,480 --> 00:09:37,679 Speaker 1: infrastructure look like, Josh um in terms of the grow 182 00:09:37,720 --> 00:09:41,520 Speaker 1: I mean, Humble County is so famous in California. I know, 183 00:09:41,800 --> 00:09:45,280 Speaker 1: UM Athens, Ohio, and we were just talking about Kentucky. UM, 184 00:09:45,320 --> 00:09:48,040 Speaker 1: you know used to grow some pretty good weed when 185 00:09:48,040 --> 00:09:49,480 Speaker 1: I was in high school. So what what's it look 186 00:09:49,559 --> 00:09:53,240 Speaker 1: like now where where where is? Uh? Where the best operations? 187 00:09:53,960 --> 00:09:56,480 Speaker 1: You know, you know this, this has become a real 188 00:09:56,520 --> 00:09:58,400 Speaker 1: big business. You know when when when I got involved 189 00:09:58,400 --> 00:10:02,120 Speaker 1: in two thousand THO team, it was it was still 190 00:10:02,320 --> 00:10:05,920 Speaker 1: really an incubator in a very very immature industry. You 191 00:10:05,960 --> 00:10:09,760 Speaker 1: fast forward to two thousand twenty two. Uh, this industry, 192 00:10:09,760 --> 00:10:14,160 Speaker 1: the cannabis industry as a whole, is um dramatically different, 193 00:10:14,280 --> 00:10:17,560 Speaker 1: dramatically more mature. Still has a significant amount of runway 194 00:10:18,040 --> 00:10:21,440 Speaker 1: to it, I think in many many respects. But you 195 00:10:21,480 --> 00:10:24,040 Speaker 1: know what you're seeing now is you're seeing the technology. 196 00:10:24,240 --> 00:10:27,319 Speaker 1: You're seeing real R and D. You're seeing real science 197 00:10:27,360 --> 00:10:31,720 Speaker 1: take place with the larger with the larger cannabis operators around. Um. 198 00:10:31,760 --> 00:10:34,440 Speaker 1: You know, whether they be the public companies, whether they 199 00:10:34,520 --> 00:10:37,480 Speaker 1: be the private companies that remain um yet to go 200 00:10:37,559 --> 00:10:41,839 Speaker 1: public or yet to sell to larger, larger operators. Uh. 201 00:10:41,880 --> 00:10:45,920 Speaker 1: You know again, guys, remember you know, the whole cannabis industry. 202 00:10:46,000 --> 00:10:48,120 Speaker 1: We can talk about this for hours, but you know 203 00:10:48,200 --> 00:10:50,679 Speaker 1: it violates federal law still yet today. So it's a 204 00:10:50,720 --> 00:10:53,960 Speaker 1: federal ob versus state law issue. And then when when 205 00:10:54,000 --> 00:10:58,800 Speaker 1: states enact legislation, they will typically get what they will 206 00:10:58,840 --> 00:11:03,040 Speaker 1: always out of the gate, always, always, always go medical 207 00:11:03,480 --> 00:11:05,679 Speaker 1: with a medical program first, you know, That's how they 208 00:11:05,679 --> 00:11:09,080 Speaker 1: dip their toe in the water. Uh. With a medical program, 209 00:11:09,160 --> 00:11:11,640 Speaker 1: they usually typically give it twelve or twenty four months. 210 00:11:12,000 --> 00:11:14,560 Speaker 1: They then go to adult use, which is also known 211 00:11:14,559 --> 00:11:17,959 Speaker 1: as recreational use, and then that process kind of evolves, 212 00:11:18,000 --> 00:11:20,200 Speaker 1: if you will. Um. Well, I was just trying to 213 00:11:20,240 --> 00:11:22,520 Speaker 1: pin down because this is the reason I wanted to 214 00:11:22,559 --> 00:11:25,320 Speaker 1: talk about it today. We thought that the Safe Act, 215 00:11:25,559 --> 00:11:28,520 Speaker 1: the you know, Marijuana Banking Act, was going to get 216 00:11:28,520 --> 00:11:30,559 Speaker 1: put into a defense bill and make it a lot 217 00:11:30,600 --> 00:11:33,840 Speaker 1: easier for you guys to do business. Um, it got 218 00:11:33,840 --> 00:11:36,840 Speaker 1: taken out. So I'm wondering, when you look at just this, 219 00:11:37,440 --> 00:11:42,440 Speaker 1: um the skeleton of the marijuana business around North America, 220 00:11:42,880 --> 00:11:46,640 Speaker 1: is it still you know, scary looking Greg Almond dudes 221 00:11:46,720 --> 00:11:49,440 Speaker 1: with shotguns and pickup trucks that are growing up? Or 222 00:11:49,559 --> 00:11:53,400 Speaker 1: is it nothing nothing near that, nothing near that whatsoever. 223 00:11:53,920 --> 00:11:57,160 Speaker 1: This is a real industry that's not going anywhere. This 224 00:11:57,200 --> 00:12:01,360 Speaker 1: is a heavily politicized and polarized, um, you know situation 225 00:12:01,360 --> 00:12:03,720 Speaker 1: as it relates to the Safe Banking Act and and 226 00:12:03,720 --> 00:12:06,800 Speaker 1: and the number of other nuances and really key elements 227 00:12:06,800 --> 00:12:09,840 Speaker 1: to the industry being able to continue to grow successfully 228 00:12:10,520 --> 00:12:13,240 Speaker 1: in this country. No, this is that this is not 229 00:12:13,360 --> 00:12:16,920 Speaker 1: the old school head shop approach, if you will with 230 00:12:17,280 --> 00:12:20,720 Speaker 1: h you know the cartel and uh you know the 231 00:12:20,720 --> 00:12:23,240 Speaker 1: the gangs, and you know there certainly is still a 232 00:12:23,280 --> 00:12:26,200 Speaker 1: black market out there without question. But no, this is 233 00:12:26,200 --> 00:12:30,760 Speaker 1: a real deal, professional industry that has UH, that has 234 00:12:30,800 --> 00:12:34,040 Speaker 1: stabilized itself in many many ways, and we need safe 235 00:12:34,040 --> 00:12:37,880 Speaker 1: banking to pass. So it must so. And there's still 236 00:12:37,920 --> 00:12:40,680 Speaker 1: I think some optimism and analystic Cowan said, he thinks 237 00:12:40,679 --> 00:12:42,320 Speaker 1: it's going to get done by the end of the year. 238 00:12:42,640 --> 00:12:46,160 Speaker 1: When that happens and you're running uh, you know UH 239 00:12:46,880 --> 00:12:49,320 Speaker 1: UM invest an investment office here, What do you like 240 00:12:49,480 --> 00:12:52,679 Speaker 1: if I look in UM for example the e t F, 241 00:12:52,840 --> 00:12:56,679 Speaker 1: I see til Ray as a huge UH player, innovative 242 00:12:56,720 --> 00:13:00,000 Speaker 1: industrial canopy growth. What what do you like out there? 243 00:13:00,960 --> 00:13:04,800 Speaker 1: Company wise? Is that what you're talking about? Yeah? So 244 00:13:04,800 --> 00:13:06,640 Speaker 1: so I'm a I'm a big I'm a big fan. 245 00:13:06,840 --> 00:13:10,840 Speaker 1: I founded a company called Grassroots Canabas based out of Chicago. 246 00:13:11,600 --> 00:13:13,880 Speaker 1: Today we are either the number one or number two 247 00:13:13,960 --> 00:13:17,559 Speaker 1: largest exit it has taken place in the cannabis industry. 248 00:13:17,600 --> 00:13:21,640 Speaker 1: We sold our company July twenty to cure a Leaf. 249 00:13:21,720 --> 00:13:23,840 Speaker 1: At the time of that sale, we're the largest privately 250 00:13:23,880 --> 00:13:26,800 Speaker 1: held cannabis company in the US and including all the 251 00:13:26,840 --> 00:13:29,160 Speaker 1: pub codes you can only be public up in Canada. 252 00:13:29,320 --> 00:13:32,439 Speaker 1: Right now we're probably the third or fourth largest cannabis 253 00:13:32,480 --> 00:13:35,360 Speaker 1: company in the country. Pure A Leaf, who is the 254 00:13:35,400 --> 00:13:37,679 Speaker 1: largest cannabis company in the world. They happen to be 255 00:13:37,679 --> 00:13:41,320 Speaker 1: baked based in Wakefield, Massachusetts, but they have a very 256 00:13:41,400 --> 00:13:44,760 Speaker 1: large European footprints as well. Um you know, came in 257 00:13:44,800 --> 00:13:47,960 Speaker 1: and they acquired us. And so here's what I here's 258 00:13:47,960 --> 00:13:50,880 Speaker 1: what I see. I see the stronger going to survive 259 00:13:50,920 --> 00:13:53,120 Speaker 1: in this in this industry, Like a lot of industry, 260 00:13:53,200 --> 00:13:55,200 Speaker 1: I think at the end, at the end of all 261 00:13:55,280 --> 00:13:58,600 Speaker 1: of this, when we fast forward five years, ten years, 262 00:13:58,679 --> 00:14:01,400 Speaker 1: fifteen years, I think what we're gonna see is we're 263 00:14:01,400 --> 00:14:04,440 Speaker 1: going to see companies like Kira Leaf, g t I, 264 00:14:04,600 --> 00:14:08,360 Speaker 1: Green Thumb Industry is you know, known as g T I, Cressco. 265 00:14:08,920 --> 00:14:12,120 Speaker 1: I think we'll see True Leave. I think we'll see Murano. 266 00:14:12,640 --> 00:14:15,600 Speaker 1: I think we'll see um, you know, I think we'll 267 00:14:15,600 --> 00:14:18,679 Speaker 1: see you know, maybe another couple out there. We'll see somewhere. 268 00:14:18,760 --> 00:14:22,080 Speaker 1: We'll see somewhere guys between five and ten of the 269 00:14:22,200 --> 00:14:24,880 Speaker 1: big of the big boys and girls, if you will, 270 00:14:25,280 --> 00:14:27,720 Speaker 1: that will be the industry leaders. I think there's gonna 271 00:14:27,720 --> 00:14:31,000 Speaker 1: be a significant drop off, and we call those tier 272 00:14:31,040 --> 00:14:34,200 Speaker 1: one m s os in in in our world in cannabis. 273 00:14:34,520 --> 00:14:36,280 Speaker 1: I think when you drop down to the tier two 274 00:14:36,320 --> 00:14:38,680 Speaker 1: and the tier three m s o s, a lot 275 00:14:38,760 --> 00:14:40,800 Speaker 1: of those folks are gonna be gobbled up over time. 276 00:14:41,240 --> 00:14:45,640 Speaker 1: I think some will continue to survive and they'll be successful. Um, 277 00:14:45,680 --> 00:14:47,640 Speaker 1: but I think a lot of those will you know, 278 00:14:47,640 --> 00:14:52,120 Speaker 1: will be gobbled up over time. As regulatory hurdles are 279 00:14:52,360 --> 00:14:55,360 Speaker 1: are you know, continue to kind of you know, unwrap 280 00:14:55,440 --> 00:14:57,480 Speaker 1: if you will. You know, right now we are all 281 00:14:57,520 --> 00:15:00,560 Speaker 1: as large M s o s um we are. We 282 00:15:00,600 --> 00:15:03,680 Speaker 1: are stuck with certain regulation caps, if you will, on 283 00:15:03,760 --> 00:15:06,280 Speaker 1: the numbers of licenses that we can have in the state. 284 00:15:06,840 --> 00:15:10,000 Speaker 1: So um, you know, once those once those things changed, 285 00:15:10,040 --> 00:15:12,720 Speaker 1: for example, and you can have more than for as 286 00:15:12,760 --> 00:15:16,400 Speaker 1: in Illinois, you cannot have more than ten dispensaries in 287 00:15:16,440 --> 00:15:19,320 Speaker 1: the state of Illinois. Once that's lifted or that's modified, 288 00:15:19,360 --> 00:15:22,040 Speaker 1: if you will, and you can flex up to fifteen 289 00:15:22,120 --> 00:15:25,160 Speaker 1: or twenty or thirty or unlimited, You're going to see 290 00:15:25,200 --> 00:15:29,320 Speaker 1: a major, major push towards your consolidation of the large 291 00:15:29,400 --> 00:15:31,720 Speaker 1: of the large companies, the large MSOs coming in and 292 00:15:31,760 --> 00:15:35,600 Speaker 1: buying the smaller companies in my opinion, Thanks very much, 293 00:15:36,000 --> 00:15:41,960 Speaker 1: Josh Joseph there. Well, the investment banks were in the 294 00:15:42,000 --> 00:15:45,880 Speaker 1: news this week. Gold Sas had their annual conference, financial 295 00:15:45,880 --> 00:15:50,440 Speaker 1: services conference, all the big I know, it almost like 296 00:15:50,440 --> 00:15:53,920 Speaker 1: a set up. Yeah, like they're talking recessions, they're talking 297 00:15:54,120 --> 00:15:57,800 Speaker 1: laying off people, cutting bonus pools. It was a real downer. 298 00:15:58,400 --> 00:16:00,680 Speaker 1: Shelly Bassett was there, I put something to blame on? 299 00:16:00,920 --> 00:16:04,400 Speaker 1: Was there? She like lad the whole conference. I know, 300 00:16:04,480 --> 00:16:07,320 Speaker 1: she had some awesome interviews. So we've got the bass 301 00:16:07,520 --> 00:16:10,240 Speaker 1: Bloomberg News Wall Street reporter here in our studio, as 302 00:16:10,240 --> 00:16:14,520 Speaker 1: well as Alison Williams, senior banks analyst at Bloomberg Intelligence. 303 00:16:14,520 --> 00:16:16,760 Speaker 1: So Chanali, let's start with you. You were at the 304 00:16:16,760 --> 00:16:22,200 Speaker 1: Goldman conference. Boy, the Bloomberg News stories your interviews coming 305 00:16:22,200 --> 00:16:25,040 Speaker 1: across the Bloomberg television sounded kind of like a bummer. 306 00:16:25,560 --> 00:16:27,920 Speaker 1: What was it? You know, it's interesting this is the 307 00:16:27,920 --> 00:16:30,000 Speaker 1: thirty third year of the conference. It's not over. It's 308 00:16:30,000 --> 00:16:32,840 Speaker 1: still on today. And I was told at the conference 309 00:16:32,880 --> 00:16:36,480 Speaker 1: that every year is either like a super happy year, 310 00:16:36,800 --> 00:16:41,760 Speaker 1: super gloomy gloomy one, and this year was definitely gloomy. Um, 311 00:16:41,800 --> 00:16:44,440 Speaker 1: but is that so surprising most of the folks, they 312 00:16:44,480 --> 00:16:47,200 Speaker 1: are expecting a recession. In every conversation was how to 313 00:16:47,240 --> 00:16:50,880 Speaker 1: prepare for that? And it seemed like every conversation was 314 00:16:51,760 --> 00:16:56,240 Speaker 1: bank ceo telling his star performers to get ready for 315 00:16:56,560 --> 00:17:01,160 Speaker 1: crappy bonus on background, guys, something so interesting. I was wait, wait, 316 00:17:01,200 --> 00:17:05,479 Speaker 1: this is live well on background to employee other banks 317 00:17:05,520 --> 00:17:12,720 Speaker 1: from me the record, Yes, live radio now on background. 318 00:17:12,720 --> 00:17:15,359 Speaker 1: A lot of other folks arrivals of Goldman Sachs would 319 00:17:15,400 --> 00:17:18,880 Speaker 1: tell me they were hoping that Solomon would be very negative. 320 00:17:19,040 --> 00:17:21,840 Speaker 1: Why because if he set the bar low, it made 321 00:17:21,840 --> 00:17:25,399 Speaker 1: it easier for everybody else to also do that. Yeah, 322 00:17:25,600 --> 00:17:29,200 Speaker 1: so Alice, Because when Paul goes to his manager, um, 323 00:17:29,240 --> 00:17:31,120 Speaker 1: you know, and says I want to raise The manager says, 324 00:17:31,160 --> 00:17:32,840 Speaker 1: it's been a crappy year. I'm sorry, we're giving you 325 00:17:32,840 --> 00:17:36,240 Speaker 1: a cut, and he says, I'm going across the street. 326 00:17:36,320 --> 00:17:39,000 Speaker 1: The manager says, hey, dude, did you hear Shinali Bastic's 327 00:17:39,000 --> 00:17:42,119 Speaker 1: interview with David Solomon. Don't go over there. Did you 328 00:17:42,160 --> 00:17:44,480 Speaker 1: see Rich Handler's note don't go over there, So I 329 00:17:44,600 --> 00:17:47,840 Speaker 1: sulk back to my desk and table between man legs. Alison, 330 00:17:48,119 --> 00:17:51,119 Speaker 1: you've got your three outlooks out like most of the 331 00:17:51,119 --> 00:17:54,480 Speaker 1: other Bloomberg Intelligence analysts. What's your out look for some 332 00:17:54,560 --> 00:17:56,280 Speaker 1: of these big banks next year? I mean, we got 333 00:17:56,400 --> 00:17:59,119 Speaker 1: rates rising, that's a good thing from an interest market. 334 00:17:59,119 --> 00:18:01,200 Speaker 1: The markets can't be any worse. Something work this year, 335 00:18:01,440 --> 00:18:04,960 Speaker 1: I think. I mean it's all about we have a recession. 336 00:18:05,240 --> 00:18:08,200 Speaker 1: How deep is the recession? When the recession right, I 337 00:18:08,240 --> 00:18:12,600 Speaker 1: would say that, um, you know the banks are prepared, right, 338 00:18:12,640 --> 00:18:14,399 Speaker 1: So I think that's the point that they were making, 339 00:18:14,560 --> 00:18:16,480 Speaker 1: is like, oh, there's a lot of negative there's risks 340 00:18:16,480 --> 00:18:19,000 Speaker 1: out there. But I have a question for Alison. Sure 341 00:18:20,040 --> 00:18:23,920 Speaker 1: trading is up, trading is up, but not as much 342 00:18:23,960 --> 00:18:29,399 Speaker 1: as fees are down. Yeah, and that's does volatility still 343 00:18:29,640 --> 00:18:31,560 Speaker 1: keep that trading a head when next year? I think 344 00:18:31,560 --> 00:18:35,439 Speaker 1: it does? I mean keep in mind, right, so macro 345 00:18:35,600 --> 00:18:40,680 Speaker 1: trading is at record levels, right, Equity trading is down 346 00:18:40,720 --> 00:18:46,640 Speaker 1: five from record levels. Investment banking, yes, down from record levels. 347 00:18:46,640 --> 00:18:49,439 Speaker 1: So going but going into next year, right, if something's 348 00:18:49,480 --> 00:18:51,399 Speaker 1: down for a few percent, it's half is important to 349 00:18:51,440 --> 00:18:55,440 Speaker 1: your bottom line next year? And there will be some recovery. 350 00:18:55,560 --> 00:18:57,680 Speaker 1: I think it's going to be all about for the fees. 351 00:18:57,720 --> 00:19:00,119 Speaker 1: It's all gonna be about one queue. What can they 352 00:19:00,119 --> 00:19:03,120 Speaker 1: push out in the seasonally strong recorder. I think there 353 00:19:03,280 --> 00:19:06,200 Speaker 1: is some you know, there's this term labor hoarding. I 354 00:19:06,240 --> 00:19:09,240 Speaker 1: think they're bank reboarding. Right. So we've heard about cuts, 355 00:19:09,280 --> 00:19:12,800 Speaker 1: but they're like very small cuts, and again after a 356 00:19:12,920 --> 00:19:18,480 Speaker 1: scramble to add talent, they're hesitant to let them go. 357 00:19:18,640 --> 00:19:21,160 Speaker 1: And you have people like Daniel Pinto, who's the head 358 00:19:21,200 --> 00:19:24,680 Speaker 1: of JP Morgan c ib saying, you know, we're gonna 359 00:19:24,680 --> 00:19:27,320 Speaker 1: cut comp but we're gonna keep heads, you know, after 360 00:19:27,440 --> 00:19:29,160 Speaker 1: all the work we did to get the people in place. 361 00:19:29,280 --> 00:19:31,600 Speaker 1: My suspicion here is that a few star traders who 362 00:19:31,560 --> 00:19:34,199 Speaker 1: are going to get higher bonuses still I mean, at 363 00:19:34,240 --> 00:19:35,960 Speaker 1: the end of the day they have to write or 364 00:19:36,000 --> 00:19:38,760 Speaker 1: they where they go to hedge funds. There's a hedge 365 00:19:38,760 --> 00:19:40,800 Speaker 1: funds still high. They go to hedge funds, and I 366 00:19:40,840 --> 00:19:42,760 Speaker 1: mean hedge funds it's not a great year either. They 367 00:19:42,800 --> 00:19:45,199 Speaker 1: have a lot of outflows, but macro hedge funds have 368 00:19:45,280 --> 00:19:49,000 Speaker 1: had a pretty good year. Commodities hedge funds there's I mean, 369 00:19:49,040 --> 00:19:54,680 Speaker 1: there's always opportunities sponsor back and places like hedge funds 370 00:19:54,800 --> 00:19:58,080 Speaker 1: and you know these you know boutiques. It's much more 371 00:19:58,080 --> 00:20:00,159 Speaker 1: to eat what you kill. And so if you r 372 00:20:00,200 --> 00:20:02,720 Speaker 1: a star trader, there's a big opportunity for you. What 373 00:20:02,800 --> 00:20:06,879 Speaker 1: are the returns Allison in your investment banking world these days? 374 00:20:06,960 --> 00:20:08,840 Speaker 1: I mean when you and I were there, we were 375 00:20:08,840 --> 00:20:12,840 Speaker 1: generating high teens, low twenties. Are those days because those 376 00:20:12,880 --> 00:20:16,399 Speaker 1: are the days of leverage? But I would say that 377 00:20:16,760 --> 00:20:18,520 Speaker 1: you know, if you so if we look at like 378 00:20:18,600 --> 00:20:22,199 Speaker 1: sort of the the the are we on the global 379 00:20:22,240 --> 00:20:24,960 Speaker 1: investment banking units of say like the top ten to 380 00:20:25,040 --> 00:20:28,359 Speaker 1: thirteen banks, you know, we hit like fifteen per cent 381 00:20:28,480 --> 00:20:31,600 Speaker 1: last year excluding our goes that you know, that would 382 00:20:31,600 --> 00:20:33,640 Speaker 1: be like a hundred and ten basis point hit. But 383 00:20:33,920 --> 00:20:36,879 Speaker 1: you know that was the best we've seen since before 384 00:20:36,920 --> 00:20:39,600 Speaker 1: the crisis. So that was pretty good. You know, this 385 00:20:39,680 --> 00:20:41,919 Speaker 1: year obviously that's that's going to come down, but we 386 00:20:42,000 --> 00:20:46,520 Speaker 1: think still double digit and that's really what you know 387 00:20:46,600 --> 00:20:49,840 Speaker 1: from the bank investors standpoint for next year. The bottom 388 00:20:49,840 --> 00:20:52,560 Speaker 1: line is the profitability is still good because we had 389 00:20:52,600 --> 00:20:55,880 Speaker 1: this we had this huge revenue. We didn't hire that 390 00:20:55,920 --> 00:20:59,560 Speaker 1: we you know, we hired, but not nearly as much 391 00:20:59,600 --> 00:21:02,280 Speaker 1: as uh, you know, as much as the revity grew 392 00:21:02,359 --> 00:21:04,119 Speaker 1: up to the profitability is something we haven't seen in 393 00:21:04,119 --> 00:21:07,600 Speaker 1: a long time. Like if they have to adjust some 394 00:21:07,680 --> 00:21:11,560 Speaker 1: of their longer term targets, JP Morgan said, sev right, 395 00:21:11,680 --> 00:21:13,639 Speaker 1: if they don't hit that next year, I think you know, 396 00:21:13,840 --> 00:21:16,760 Speaker 1: Crimie River, it's it's a recession, right, that's fine. But 397 00:21:16,800 --> 00:21:18,639 Speaker 1: if they start to have to say, Okay, this is 398 00:21:18,640 --> 00:21:22,280 Speaker 1: not something that we can hit at a more meaningful rate, 399 00:21:22,480 --> 00:21:26,199 Speaker 1: then that's when you have questions about what businesses in 400 00:21:26,200 --> 00:21:28,400 Speaker 1: the longer term are going to make the most sense 401 00:21:28,400 --> 00:21:31,800 Speaker 1: into this new economy, right right, And I think you 402 00:21:31,800 --> 00:21:34,399 Speaker 1: know with JP Morgan, the most interesting things is going 403 00:21:34,440 --> 00:21:36,120 Speaker 1: to be what happens on the cost side. That's where 404 00:21:36,119 --> 00:21:40,480 Speaker 1: we got the big surprise this past January, huge upticking costs. 405 00:21:41,000 --> 00:21:44,600 Speaker 1: You know, people are you know, they sort of signaled like, look, 406 00:21:44,600 --> 00:21:46,439 Speaker 1: this isn't going away anytime soon. But that was in 407 00:21:46,480 --> 00:21:49,960 Speaker 1: the beginning of the year. So could those costs, could 408 00:21:49,960 --> 00:21:52,840 Speaker 1: that guidance be a lever for next year in terms 409 00:21:52,960 --> 00:21:56,080 Speaker 1: of actually with tech tech talent is getting cheaper too. 410 00:21:56,359 --> 00:21:59,359 Speaker 1: That's the reality. Also, that's a huge, huge, huge thing 411 00:21:59,400 --> 00:22:02,480 Speaker 1: that all Street. You know, I had a big competitive 412 00:22:02,560 --> 00:22:04,960 Speaker 1: challenge from absolutely young kids coming out of school, even 413 00:22:05,000 --> 00:22:09,280 Speaker 1: everybody Jane Street for f t X. That's turned around. 414 00:22:09,560 --> 00:22:13,320 Speaker 1: That's real. So what was the feeling at your at 415 00:22:13,320 --> 00:22:16,639 Speaker 1: the Goldman conference about just crypto just generally? I it 416 00:22:16,760 --> 00:22:19,239 Speaker 1: was funny. I was on radio with um, you know, 417 00:22:19,600 --> 00:22:22,480 Speaker 1: Alex and Guy, and I made this comment about how 418 00:22:22,520 --> 00:22:24,480 Speaker 1: nobody in that room was going to cry a river 419 00:22:24,640 --> 00:22:29,560 Speaker 1: about cryptocurrencies falling off a cliff, and very senior bank 420 00:22:29,560 --> 00:22:31,480 Speaker 1: executive walks over to me and hears me say that 421 00:22:31,520 --> 00:22:35,000 Speaker 1: and just starts laughing and walks away. So yeah, I 422 00:22:35,000 --> 00:22:38,480 Speaker 1: mean they're pretty thrilled because that talent war for them 423 00:22:38,720 --> 00:22:41,040 Speaker 1: is gone. And another executive told me everyone that left 424 00:22:41,040 --> 00:22:44,640 Speaker 1: their bank Goldman Sachs is now calling back again and 425 00:22:44,680 --> 00:22:47,600 Speaker 1: saying what can I come back, which is, as you know, 426 00:22:47,840 --> 00:22:52,240 Speaker 1: not a common practice of these branks. All Right, Sanelli Baskett, 427 00:22:52,240 --> 00:22:54,480 Speaker 1: thank you so much. We appreciate it. Selie bast she's 428 00:22:54,480 --> 00:22:57,320 Speaker 1: our Wall streetporter. She was at the Goldman conference getting 429 00:22:57,359 --> 00:23:01,119 Speaker 1: some great, great interviews Brian moynihan, Mr Solomon and Goldman, 430 00:23:01,200 --> 00:23:03,879 Speaker 1: so some good good stuff. We appreciate that. Alison Williams 431 00:23:03,960 --> 00:23:08,440 Speaker 1: as always Bloomberg Intelligence. She's our senior banks analysts, covers 432 00:23:08,480 --> 00:23:11,000 Speaker 1: everything anything you want to know about the banks. She 433 00:23:11,080 --> 00:23:13,600 Speaker 1: knows that she's been doing this, uh four decades. We 434 00:23:13,600 --> 00:23:16,240 Speaker 1: appreciate getting both of them here in our Bloomberg Interactive 435 00:23:16,280 --> 00:23:23,480 Speaker 1: Broker's studio. Now, let's get to Kevin Tynan right now. 436 00:23:23,640 --> 00:23:29,200 Speaker 1: He is our automotive senior automotive analysts from Bloomberg Intelligence. 437 00:23:29,320 --> 00:23:33,560 Speaker 1: He's somewhere in the armpit of America? Is he in 438 00:23:33,600 --> 00:23:39,800 Speaker 1: New Jersey? That you keep playing that game. I'm just messing. 439 00:23:39,840 --> 00:23:42,480 Speaker 1: We've got enough people in. I'm just messing with you. 440 00:23:42,560 --> 00:23:45,760 Speaker 1: I'm just messing with you. Kevin Um What a ride 441 00:23:45,960 --> 00:23:52,160 Speaker 1: for especially dealers? Right? UM last year was insane? Uh. 442 00:23:52,200 --> 00:23:55,080 Speaker 1: In terms of inventory, they had troubles. In terms of pricing, 443 00:23:55,119 --> 00:23:57,080 Speaker 1: it was off the charts. And then there were some 444 00:23:57,160 --> 00:24:00,720 Speaker 1: stocks like Carbonna which were crazy easy. What was the 445 00:24:00,760 --> 00:24:05,720 Speaker 1: trading it like three d and now um an analyst 446 00:24:05,760 --> 00:24:08,680 Speaker 1: is slashing it down to one dollar? Is this? Uh? 447 00:24:08,760 --> 00:24:11,240 Speaker 1: This is not an industry problem with Carbona, right, this 448 00:24:11,359 --> 00:24:15,320 Speaker 1: is a company specific issue. Yeah. I believe so. I 449 00:24:15,320 --> 00:24:18,639 Speaker 1: mean I think when you look at it fundamentally and 450 00:24:18,760 --> 00:24:22,320 Speaker 1: part of the problem, amongst many other things with carbon 451 00:24:22,560 --> 00:24:26,880 Speaker 1: is that they are used vehicle only, right and and 452 00:24:27,520 --> 00:24:29,800 Speaker 1: one of the things I like about the retail automotive 453 00:24:29,840 --> 00:24:35,360 Speaker 1: space is that a full line legacy dealer can diversify 454 00:24:35,480 --> 00:24:38,879 Speaker 1: its revenue and sort of hop to the hot business units. 455 00:24:38,920 --> 00:24:44,920 Speaker 1: So when new vehicle margin was gross margin was below five, 456 00:24:45,760 --> 00:24:49,200 Speaker 1: you started to see a push towards the used vehicle market, 457 00:24:49,240 --> 00:24:52,840 Speaker 1: where that gross margin could be double UM. And that's 458 00:24:52,880 --> 00:24:57,840 Speaker 1: where legacy dealerships would create private label CARBONNA, pops up, 459 00:24:57,960 --> 00:25:00,919 Speaker 1: room shift and all these other things. Uh. The problem 460 00:25:00,960 --> 00:25:05,040 Speaker 1: is as that market shifts, UH, supply is constrained on 461 00:25:05,080 --> 00:25:08,199 Speaker 1: the new side and gross margin goes to twelve on 462 00:25:08,280 --> 00:25:12,840 Speaker 1: new vehicles, Carbon can't go anywhere right there. CarMax is 463 00:25:12,880 --> 00:25:16,280 Speaker 1: a similar story right there, only doing used vehicles, so 464 00:25:16,320 --> 00:25:19,520 Speaker 1: they have less flexibility to kind of go where the 465 00:25:19,640 --> 00:25:22,840 Speaker 1: margin is. And I would also put parts in service 466 00:25:22,880 --> 00:25:26,520 Speaker 1: in that as well, where legacy dealers can do that business. 467 00:25:27,080 --> 00:25:33,560 Speaker 1: Where CARBONA and CarMax are beholden only to use vehicle market, Kevin, 468 00:25:33,600 --> 00:25:36,720 Speaker 1: are the US automakers Are they producing as many cars 469 00:25:36,920 --> 00:25:40,239 Speaker 1: as they want to use? The supply chain cleaned up? 470 00:25:40,240 --> 00:25:42,359 Speaker 1: Do they have enough labor. Are they producing where they 471 00:25:42,359 --> 00:25:45,880 Speaker 1: want to produce in terms of volume? Yeah, I think 472 00:25:45,920 --> 00:25:48,720 Speaker 1: so we're getting back there. I just looked at the 473 00:25:48,760 --> 00:25:51,480 Speaker 1: December one inventory levels in the US and it was 474 00:25:51,520 --> 00:25:55,240 Speaker 1: about one point seven million dollar units, and that was 475 00:25:55,560 --> 00:25:58,800 Speaker 1: that's about double right at the bottom. It was under 476 00:25:58,840 --> 00:26:01,560 Speaker 1: a million. At the peak it was over four million. 477 00:26:01,680 --> 00:26:07,760 Speaker 1: So obviously we're not anywhere near oversupplied in historical terms. Um. 478 00:26:07,840 --> 00:26:10,320 Speaker 1: But but that kind of inventory level, like a one 479 00:26:10,359 --> 00:26:14,240 Speaker 1: point seven million if you think about it, the the 480 00:26:14,320 --> 00:26:17,520 Speaker 1: industry will average about one to one point five million 481 00:26:17,640 --> 00:26:24,480 Speaker 1: unit transactions per month, So we're kind of appropriate supplied. Uh, 482 00:26:24,680 --> 00:26:29,080 Speaker 1: you want to be a little bit above thirty days supply. 483 00:26:29,240 --> 00:26:30,920 Speaker 1: We're getting back to that, but you don't want to 484 00:26:30,960 --> 00:26:34,600 Speaker 1: be where we were, which was days. But you also 485 00:26:34,640 --> 00:26:38,280 Speaker 1: don't want to be, um, looking at lots that are 486 00:26:38,320 --> 00:26:41,640 Speaker 1: all completely full and having buyers come in and um, 487 00:26:41,680 --> 00:26:43,800 Speaker 1: you know, try and get five or ten thousand dollars 488 00:26:43,800 --> 00:26:45,840 Speaker 1: off the price. Are we going to ever get back 489 00:26:45,840 --> 00:26:50,240 Speaker 1: to that? Um? Well, ever is a long time. But 490 00:26:50,640 --> 00:26:51,720 Speaker 1: are we going to get back to that in the 491 00:26:51,800 --> 00:26:54,400 Speaker 1: next couple of years? I? I don't think so. And 492 00:26:54,400 --> 00:26:58,040 Speaker 1: and look, it's just it's bad for everybody, right, It's 493 00:26:58,080 --> 00:27:01,280 Speaker 1: bad for the manufacturers, it's bad for the dealerships that 494 00:27:01,880 --> 00:27:06,800 Speaker 1: carrying costs um. So I think that the not it's 495 00:27:06,840 --> 00:27:10,200 Speaker 1: not random, right, it's not just the way the market moves, 496 00:27:10,240 --> 00:27:13,280 Speaker 1: and the dealers and the manufacturers are just stuck in 497 00:27:13,280 --> 00:27:17,720 Speaker 1: this loop of over supply. They control the output um, 498 00:27:17,800 --> 00:27:20,520 Speaker 1: the manufacturers do, and then the dealers can only sell 499 00:27:20,560 --> 00:27:22,720 Speaker 1: what they're given. And I think everybody has seen the 500 00:27:22,800 --> 00:27:27,200 Speaker 1: light in terms of price and margin in this environment 501 00:27:27,240 --> 00:27:29,240 Speaker 1: and said, this is actually a pretty good place to be. 502 00:27:29,440 --> 00:27:31,240 Speaker 1: I think we're in that window where we're tweaking it 503 00:27:31,280 --> 00:27:33,199 Speaker 1: a little bit. Let's get a couple more units on 504 00:27:33,240 --> 00:27:36,159 Speaker 1: the ground and not lose sales um. But we certainly 505 00:27:36,200 --> 00:27:38,200 Speaker 1: don't want to go back to four million units on 506 00:27:38,240 --> 00:27:40,399 Speaker 1: the ground. All right, I gotta talk to you about 507 00:27:40,520 --> 00:27:45,480 Speaker 1: something that kind of grinds my gears. Using a good metaphor, 508 00:27:46,440 --> 00:27:51,600 Speaker 1: we have a situation with some carmakers. Mercedes is one, 509 00:27:51,840 --> 00:27:56,560 Speaker 1: Volvo is another. BMW infamously another where they're making people 510 00:27:56,680 --> 00:27:59,879 Speaker 1: pay for over the air updates to access features that 511 00:28:00,000 --> 00:28:02,879 Speaker 1: are already in the car. For example, BMW wants you 512 00:28:02,960 --> 00:28:07,159 Speaker 1: to subscribe to heated seats. Yeah, so your seats and 513 00:28:07,320 --> 00:28:09,760 Speaker 1: you buy the car from them, right, your seats have 514 00:28:09,880 --> 00:28:12,800 Speaker 1: heating capability, but unless you give them eight dollars a 515 00:28:12,800 --> 00:28:14,960 Speaker 1: month or something, they won't let you turn it on 516 00:28:15,359 --> 00:28:19,320 Speaker 1: through over the air software updates. Now, recently I saw 517 00:28:19,600 --> 00:28:24,320 Speaker 1: a situation where Mercedes was doing the same thing with horsepower. 518 00:28:24,480 --> 00:28:26,639 Speaker 1: They're they're gonna sell you a car that has I 519 00:28:26,640 --> 00:28:28,600 Speaker 1: don't know the exact numbers, but like three hundred horse 520 00:28:28,600 --> 00:28:32,159 Speaker 1: power and if you want four hundred horse power, you 521 00:28:32,240 --> 00:28:35,000 Speaker 1: need to be giving them like a thousand dollars a year. 522 00:28:35,160 --> 00:28:38,320 Speaker 1: Or Volvo um is doing the same thing, although fortunately 523 00:28:38,320 --> 00:28:40,440 Speaker 1: at least they're doing it as a one time charge. 524 00:28:41,160 --> 00:28:45,640 Speaker 1: This is a horrible new Frontier Kevin, it is, And 525 00:28:45,640 --> 00:28:47,320 Speaker 1: and think about what that would do to the used 526 00:28:47,400 --> 00:28:51,040 Speaker 1: vehicle market, right, what are you actually buying is is 527 00:28:51,120 --> 00:28:54,920 Speaker 1: every vehicle wiped clean when you see it on the lot. 528 00:28:55,000 --> 00:28:59,800 Speaker 1: So essentially you have to menu up your vehicle if 529 00:28:59,800 --> 00:29:03,560 Speaker 1: you're buying pre owned also, so it's a strange thing, 530 00:29:03,720 --> 00:29:06,920 Speaker 1: you know, And then think about how how are you 531 00:29:08,320 --> 00:29:12,520 Speaker 1: um buying wholesale vehicles? Like is everything go back to 532 00:29:12,600 --> 00:29:17,200 Speaker 1: a base vehicle when it changes hands? And then and 533 00:29:17,240 --> 00:29:19,440 Speaker 1: as a consumer, do my heated seats that I paid 534 00:29:19,480 --> 00:29:21,800 Speaker 1: BMW four come with me to my next one? Or 535 00:29:22,280 --> 00:29:25,560 Speaker 1: you know, it's it's a strange thing, and I've yet 536 00:29:25,600 --> 00:29:28,600 Speaker 1: to believe that it can actually work over the long term. 537 00:29:28,920 --> 00:29:31,600 Speaker 1: All right, and that your industry continues to go under 538 00:29:31,720 --> 00:29:35,200 Speaker 1: tremendous change. Kevin Tiden, senior autos analysts with Bloomberg Intelligence 539 00:29:35,240 --> 00:29:40,760 Speaker 1: with some great stuff. Uh there? All right? So I 540 00:29:40,800 --> 00:29:42,840 Speaker 1: want to talk technology because you know, when he came 541 00:29:42,840 --> 00:29:45,920 Speaker 1: out of the last quarters earnings, to me, it felt 542 00:29:46,000 --> 00:29:48,120 Speaker 1: like there are a lot of disappointments around the tech 543 00:29:48,120 --> 00:29:50,280 Speaker 1: space and I'm wondering if the tech sector has lost 544 00:29:50,320 --> 00:29:54,520 Speaker 1: its leadership role in this market. I want to talk Apple, Amazon, Google, 545 00:29:54,520 --> 00:29:56,880 Speaker 1: all that kind of stuff. So we're gonna roundtable this thing, folks. 546 00:29:57,080 --> 00:29:59,800 Speaker 1: Mark German, he's a reporter. He covers Apple, that covers 547 00:29:59,840 --> 00:30:02,240 Speaker 1: all the consumer tech and hardware. Is that in our 548 00:30:02,280 --> 00:30:04,960 Speaker 1: San Francisco office? Usually sometimes I find him in the 549 00:30:05,000 --> 00:30:06,800 Speaker 1: desert doing stuff. I don't know what's going on there 550 00:30:06,840 --> 00:30:10,120 Speaker 1: with rockets and stuff. Um and then also on rock Rona. 551 00:30:10,240 --> 00:30:15,920 Speaker 1: He is our senior technology analyst for Bloomberg Intelligence. Um. So, Mark, 552 00:30:15,960 --> 00:30:17,800 Speaker 1: I want to start with you because there's a lot 553 00:30:17,800 --> 00:30:21,000 Speaker 1: of news add on Apple here today. I'm not I 554 00:30:21,000 --> 00:30:23,640 Speaker 1: don't get this fully autonomous car thing from the get go. 555 00:30:24,320 --> 00:30:26,280 Speaker 1: But Apple seem to throw it's hat in the ring 556 00:30:26,320 --> 00:30:28,680 Speaker 1: there a while back. But are they kind of pulling 557 00:30:28,720 --> 00:30:31,760 Speaker 1: back from that here? And if so, why they're pulling 558 00:30:31,760 --> 00:30:34,840 Speaker 1: back initially? So Tim Cook gets asked this all the 559 00:30:34,880 --> 00:30:37,240 Speaker 1: time when Apple comes out with the new products. What 560 00:30:37,400 --> 00:30:41,360 Speaker 1: took you so long? Right? Other companies have had phones, watches, 561 00:30:41,600 --> 00:30:45,560 Speaker 1: sets up boxes, etcetera, tablets forever and now you guys 562 00:30:45,560 --> 00:30:48,320 Speaker 1: are doing that. What's the difference? What he likes to say, 563 00:30:48,440 --> 00:30:52,719 Speaker 1: and what is in my opinion absolutely true, is we 564 00:30:52,760 --> 00:30:55,440 Speaker 1: wanted to be the best, not the first. We wanted 565 00:30:55,480 --> 00:30:57,720 Speaker 1: to do things a little bit differently. Right, So the 566 00:30:57,760 --> 00:31:00,720 Speaker 1: iPhone wasn't the first smartphone, but there was nothing before. 567 00:31:01,040 --> 00:31:03,080 Speaker 1: You can see the same about the iPod to the 568 00:31:03,160 --> 00:31:07,320 Speaker 1: MP three player. The Apple watched the smart watch, etcetera, etcetera, 569 00:31:07,720 --> 00:31:09,640 Speaker 1: And so they wanted to come at the car with 570 00:31:09,680 --> 00:31:13,880 Speaker 1: the same approach, and they, along with every other car manufacturer, 571 00:31:14,280 --> 00:31:18,160 Speaker 1: decided that the real holy grail, the real differentiator for 572 00:31:18,200 --> 00:31:20,120 Speaker 1: how you can make a car different than anything that's 573 00:31:20,160 --> 00:31:23,760 Speaker 1: come before it is level five full self driving, tell 574 00:31:23,840 --> 00:31:26,160 Speaker 1: the car where you want to go, it gets you there, 575 00:31:26,600 --> 00:31:31,160 Speaker 1: no issue. Right, that is just not possible. It's not feasible, 576 00:31:31,240 --> 00:31:33,520 Speaker 1: and it's probably not going to be feasible for twenty 577 00:31:33,600 --> 00:31:36,440 Speaker 1: thirty years, if not even in our lifetime. So in 578 00:31:36,560 --> 00:31:39,080 Speaker 1: order to get something on the road this decade, because 579 00:31:39,080 --> 00:31:41,120 Speaker 1: that is going to be a hot area, they needed 580 00:31:41,160 --> 00:31:43,320 Speaker 1: to pair back. And so what they're doing is they're 581 00:31:43,320 --> 00:31:46,480 Speaker 1: moving to a level four design, which means they're scrapping 582 00:31:46,520 --> 00:31:49,120 Speaker 1: their vision of no steering wheel and no pedals. They're 583 00:31:49,120 --> 00:31:51,080 Speaker 1: going to have those key parts of the car as 584 00:31:51,080 --> 00:31:53,160 Speaker 1: we all know, and it's only going to have self 585 00:31:53,240 --> 00:31:56,600 Speaker 1: driving functionality in places like highways and freeways. So that 586 00:31:56,720 --> 00:31:58,840 Speaker 1: is a major shift, and they're really going to have 587 00:31:58,920 --> 00:32:03,800 Speaker 1: to compete on area technology, on industrial design, on software 588 00:32:04,080 --> 00:32:05,760 Speaker 1: and other features that you might want in a car 589 00:32:05,800 --> 00:32:08,400 Speaker 1: in the future. And handling. You know, one of the 590 00:32:08,400 --> 00:32:10,480 Speaker 1: things I love about my iPhone is how it handles, 591 00:32:10,880 --> 00:32:13,400 Speaker 1: and I want a car that handles just as well. 592 00:32:13,520 --> 00:32:15,960 Speaker 1: So I mean, who are they going to work with. 593 00:32:16,120 --> 00:32:19,640 Speaker 1: Is it a Porsche or is it a Kia. That's funny, Yes, 594 00:32:19,680 --> 00:32:22,560 Speaker 1: I definitely want an Apple car. That will you can 595 00:32:22,600 --> 00:32:25,040 Speaker 1: get me whoever I want to go at as fast 596 00:32:25,080 --> 00:32:27,640 Speaker 1: as I can, right, I'll always take a need for 597 00:32:27,720 --> 00:32:31,000 Speaker 1: speed type of of car. I think it's going to 598 00:32:31,080 --> 00:32:34,880 Speaker 1: be something closer to a Porsche. I think it's something 599 00:32:34,920 --> 00:32:38,400 Speaker 1: that's probably going to cost around a hundred thousand per unit. 600 00:32:38,520 --> 00:32:40,920 Speaker 1: This is going to be a consumer car. It's probably 601 00:32:40,960 --> 00:32:44,680 Speaker 1: going to be in the same territory as a baseline 602 00:32:44,760 --> 00:32:48,960 Speaker 1: Tesla models. Originally they were going to go for a 603 00:32:49,040 --> 00:32:51,280 Speaker 1: higher price point that would put it in the Porsche 604 00:32:51,400 --> 00:32:53,960 Speaker 1: take Hand range, selling on the higher end take Hands 605 00:32:53,960 --> 00:32:56,760 Speaker 1: in the north of a hundred and fifty thousand US, 606 00:32:56,840 --> 00:33:00,640 Speaker 1: but now they're downscaling. Uh. There had been rooms about 607 00:33:00,680 --> 00:33:04,000 Speaker 1: them doing something more on the Kia spectrum, even working 608 00:33:04,000 --> 00:33:06,640 Speaker 1: with con Day and Kia. I'm told those rumors were 609 00:33:06,680 --> 00:33:10,440 Speaker 1: never true and they were probably floated by those companies 610 00:33:10,480 --> 00:33:13,440 Speaker 1: in Asia. There has been some accusations that I heard 611 00:33:13,440 --> 00:33:17,200 Speaker 1: about trying to you know, inflate their stock prices. But 612 00:33:17,600 --> 00:33:19,600 Speaker 1: who really knows. The truth of the matter is it 613 00:33:19,600 --> 00:33:22,400 Speaker 1: will be something closer to a model as I think 614 00:33:22,440 --> 00:33:26,720 Speaker 1: it will probably do incredibly well. And I'm sure you'll 615 00:33:26,720 --> 00:33:29,320 Speaker 1: ask on rock this, but the quickest way for Apple 616 00:33:29,400 --> 00:33:32,080 Speaker 1: to sort of triple its revenues over time is to 617 00:33:32,120 --> 00:33:35,680 Speaker 1: come out with a hundred thousand dollar product, right, So yeah, 618 00:33:35,680 --> 00:33:37,920 Speaker 1: exact way that they're going to inflate their own revenue. 619 00:33:38,520 --> 00:33:41,560 Speaker 1: What do you think about it? Yeah, let's hope they 620 00:33:41,560 --> 00:33:44,200 Speaker 1: don't come up with a model because you can't make 621 00:33:44,240 --> 00:33:46,520 Speaker 1: any money off of it. You know, in my view, 622 00:33:46,680 --> 00:33:49,240 Speaker 1: you don't want to go down the you know, the 623 00:33:49,280 --> 00:33:52,720 Speaker 1: price point. They will go out for whatever product they 624 00:33:52,760 --> 00:33:56,160 Speaker 1: go out at at a you know, gross mog and 625 00:33:56,280 --> 00:33:59,320 Speaker 1: that's the style Apple goes. It doesn't care about markets 626 00:33:59,360 --> 00:34:01,640 Speaker 1: here from a any point of view. It care about 627 00:34:01,680 --> 00:34:05,080 Speaker 1: gross profit margins. And I'm you know, very optimistic that's 628 00:34:05,120 --> 00:34:07,560 Speaker 1: what they're focusing on. And they don't you know, cheapen 629 00:34:07,600 --> 00:34:12,120 Speaker 1: the car, so so an just across the text space, 630 00:34:12,400 --> 00:34:15,880 Speaker 1: I mean, it's the rose the bloom kind of came 631 00:34:15,920 --> 00:34:17,480 Speaker 1: off the roads a little bit for me at least, 632 00:34:17,520 --> 00:34:19,719 Speaker 1: and I'm wondering if it's true for the market. After 633 00:34:19,800 --> 00:34:23,239 Speaker 1: the last quarters earnings, we had some disappointments, some cautious 634 00:34:23,280 --> 00:34:26,239 Speaker 1: outlooks as you talk to institutional investors, kind of what's 635 00:34:26,280 --> 00:34:30,400 Speaker 1: the feeling out there about tech in general? So I 636 00:34:30,440 --> 00:34:33,160 Speaker 1: think Paul. In all honesty, I think the cell side 637 00:34:33,200 --> 00:34:36,520 Speaker 1: truly forgot what a recession or slowdown looks like. If 638 00:34:36,560 --> 00:34:38,960 Speaker 1: I look at the top twenty software company, they have 639 00:34:39,040 --> 00:34:41,920 Speaker 1: been growing sales at the rate of twenty percent per 640 00:34:42,040 --> 00:34:44,719 Speaker 1: year for the past six years. So you know, there 641 00:34:44,719 --> 00:34:47,560 Speaker 1: has to be a time when when the economic activity 642 00:34:47,640 --> 00:34:50,240 Speaker 1: slows down that people will pull back onto eke spending. 643 00:34:50,520 --> 00:34:53,160 Speaker 1: And I don't think anybody remembers eight oh nine, And 644 00:34:53,200 --> 00:34:55,120 Speaker 1: I think this is the time that they are coming 645 00:34:55,160 --> 00:34:58,760 Speaker 1: back to the realization that everything slows down in a downturn. 646 00:34:59,120 --> 00:35:01,640 Speaker 1: And I think, frankly speaking, at this point, I see 647 00:35:01,719 --> 00:35:04,440 Speaker 1: numbers for next year, I feel a little bit happier 648 00:35:04,520 --> 00:35:07,960 Speaker 1: than I did prior to the last quarter. But if 649 00:35:08,000 --> 00:35:13,080 Speaker 1: we get into a deep procession, um I mean, probably 650 00:35:13,120 --> 00:35:16,520 Speaker 1: the first thing that people do when they tighten their 651 00:35:16,520 --> 00:35:19,960 Speaker 1: belts is not buy a new iPhone, right, I mean, 652 00:35:20,000 --> 00:35:22,520 Speaker 1: you only buy one when you absolutely have to, if 653 00:35:22,560 --> 00:35:26,719 Speaker 1: you can't justify. He always buys the newest model. He 654 00:35:26,760 --> 00:35:28,879 Speaker 1: always buys the newest model because he has a great 655 00:35:28,920 --> 00:35:31,600 Speaker 1: job with a great company. But if he loses his job, 656 00:35:32,160 --> 00:35:36,080 Speaker 1: he's probably not going to Um no, absolutely right, Yeah, 657 00:35:36,160 --> 00:35:38,320 Speaker 1: you have it, right, I mean see from an enterprise 658 00:35:38,360 --> 00:35:40,440 Speaker 1: point of view, it's the same argument that you make. 659 00:35:40,760 --> 00:35:42,680 Speaker 1: But frankly speaking, one of the things you also have 660 00:35:42,760 --> 00:35:46,799 Speaker 1: to think about is the technologies that you're spending with Microsoft, 661 00:35:46,880 --> 00:35:50,360 Speaker 1: with Google, with the likes of it, take sales Force 662 00:35:50,440 --> 00:35:54,000 Speaker 1: or Workday or Shopify. These companies are critical to making 663 00:35:54,000 --> 00:35:56,600 Speaker 1: your company go digital. It's not as if this is 664 00:35:56,640 --> 00:35:58,719 Speaker 1: these are you know, an ad hoc product that you 665 00:35:58,760 --> 00:36:01,560 Speaker 1: get just because you know it's a shiny new object 666 00:36:01,960 --> 00:36:03,880 Speaker 1: and what we think is going to happen. You know, 667 00:36:04,120 --> 00:36:06,200 Speaker 1: we saw that the a w IS very clearly. During 668 00:36:06,239 --> 00:36:09,600 Speaker 1: the pandemic, growth slowed down because the sectors that operate 669 00:36:09,640 --> 00:36:12,000 Speaker 1: with them slowed down. But the year after that we 670 00:36:12,040 --> 00:36:15,080 Speaker 1: saw a massive bounce back because digital spending has to 671 00:36:15,080 --> 00:36:17,399 Speaker 1: be done. You have to go digital. It's it's not 672 00:36:17,480 --> 00:36:20,920 Speaker 1: something it's not a fashion, it's something that's required for 673 00:36:20,960 --> 00:36:23,200 Speaker 1: you to do. So we think if you thinks slow 674 00:36:23,280 --> 00:36:27,600 Speaker 1: down in twenty three, we think a massive bounce back. Hey, 675 00:36:27,600 --> 00:36:31,200 Speaker 1: Mark your base in l A, San Francisco. I thought 676 00:36:31,360 --> 00:36:34,680 Speaker 1: in l A, Mark, Yeah, yeah, So it changes my 677 00:36:34,840 --> 00:36:37,600 Speaker 1: entire vision of Mark German. Well, he's just he's m 678 00:36:37,960 --> 00:36:40,239 Speaker 1: Mr California in general. I mean, what's the feeling a 679 00:36:40,239 --> 00:36:42,120 Speaker 1: lot of your companies that you cover, Mark, A lot 680 00:36:42,120 --> 00:36:45,080 Speaker 1: of the consumer technology companies, they've been laying some people off. 681 00:36:45,120 --> 00:36:49,600 Speaker 1: Here is is it? Is it a thing? Wow? It's 682 00:36:49,640 --> 00:36:53,320 Speaker 1: definitely a thing. Who would have ever thought that Amazon 683 00:36:53,440 --> 00:36:56,680 Speaker 1: and Meta would start cutting north to five seven, ten 684 00:36:56,760 --> 00:37:01,400 Speaker 1: thousand people right when you know the economy is really 685 00:37:01,440 --> 00:37:04,680 Speaker 1: in the in the trash? Is if Apple starts cutting people. 686 00:37:04,840 --> 00:37:08,120 Speaker 1: To date, they have not started cutting people. They're not hiring, 687 00:37:08,120 --> 00:37:10,360 Speaker 1: which is a really really big deal. There's a complete 688 00:37:10,360 --> 00:37:13,320 Speaker 1: pause there. But they're not firing or laying off anyone. 689 00:37:13,800 --> 00:37:16,160 Speaker 1: All right, Mark, good stuff? Mark German. Uh. He is 690 00:37:16,200 --> 00:37:20,120 Speaker 1: our consumer tech uh reporter out there in l A 691 00:37:20,320 --> 00:37:23,800 Speaker 1: covering all that cool consumer tech stuff. Big big focus 692 00:37:23,840 --> 00:37:27,000 Speaker 1: on Apple because why not. It's a huge company. And Anagrana, 693 00:37:27,320 --> 00:37:31,320 Speaker 1: he's our senior technology analysts for Bloomberg Intelligence kind of 694 00:37:31,400 --> 00:37:33,120 Speaker 1: round table and you're talking about tech. You know, it's 695 00:37:33,160 --> 00:37:36,000 Speaker 1: it's been such a leader in this market for such 696 00:37:36,080 --> 00:37:40,080 Speaker 1: a long period of time. Um, But as Anorag suggested, Um, 697 00:37:40,160 --> 00:37:42,600 Speaker 1: they're impacted by the headwinds of a recession as well. 698 00:37:42,640 --> 00:37:45,239 Speaker 1: Maybe not as much as other industries, but certainly there 699 00:37:45,280 --> 00:37:47,080 Speaker 1: is an impact, and kind of where we're seeing it 700 00:37:47,160 --> 00:37:50,040 Speaker 1: is in the head count, seeing a lot of headcount 701 00:37:50,080 --> 00:37:52,200 Speaker 1: being like a technology, so I have to keep an 702 00:37:52,200 --> 00:37:58,680 Speaker 1: eye on that. Thanks for listening to the Bloomberg Markets podcast. 703 00:37:59,080 --> 00:38:02,280 Speaker 1: You can subscribe and listen to interviews of Apple Podcasts 704 00:38:02,400 --> 00:38:06,319 Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm 705 00:38:06,360 --> 00:38:10,400 Speaker 1: on Twitter at Matt Miller three. Put on fall Sweeney. 706 00:38:10,400 --> 00:38:13,040 Speaker 1: I'm on Twitter at pt Sweeney Before the podcast. You 707 00:38:13,080 --> 00:38:15,479 Speaker 1: can always catch us worldwide at Bloomberg Radio.