WEBVTT - Markets, Banks, Bioscience, and Tech (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.520 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.560 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.079 at Bloomberg dot com slash podcast. I'm seeing red on 0:00:22.120 --> 0:00:23.840 the screen, but I need to see some green at 0:00:23.880 --> 0:00:26.120 some point. But let's talk to a professional who does 0:00:26.120 --> 0:00:30.560 this stuff for a living. Natalie Wolfson, CEO at Asset Mark. Natalie, 0:00:30.600 --> 0:00:32.839 thanks so much for taking the time to join us here. 0:00:32.840 --> 0:00:34.559 I love to get your thought here as we kind 0:00:34.560 --> 0:00:40.559 of put a bow on uh two, what do we 0:00:40.600 --> 0:00:44.320 do for? Because I got crushed in my equities, I 0:00:44.360 --> 0:00:47.760 got crushed in my bonds. I have a big barrel 0:00:47.760 --> 0:00:51.120 of oil in my house. I'm okay there, But what 0:00:51.159 --> 0:00:54.000 do you do? You know? It's it's interesting, um as 0:00:54.000 --> 0:00:56.920 a result of sort of of the feds um really 0:00:57.000 --> 0:01:00.160 relentless tightening in the second half of this year, they're 0:01:00.200 --> 0:01:04.319 actually interesting opportunities right now in short term treasuries. If 0:01:04.319 --> 0:01:06.520 you want to build a short term treasury portfolio with 0:01:06.560 --> 0:01:09.120 the duration of you know, roughly half a year you 0:01:09.160 --> 0:01:11.480 can get four point six percent in yield. And so 0:01:11.920 --> 0:01:13.920 right now, I think all of us, whether you're a 0:01:13.920 --> 0:01:17.240 CEO looking to manage your cost structure or an investor 0:01:17.319 --> 0:01:20.560 looking into next year, feeling a little risk averse and 0:01:20.640 --> 0:01:22.080 maybe like we want to wait and see, and so 0:01:22.160 --> 0:01:24.839 that's a good way to do that. But is that 0:01:25.160 --> 0:01:27.520 I mean I heard the same thing from my financial 0:01:27.560 --> 0:01:30.840 advisor recently. Is that the only thing out there? I mean, 0:01:30.880 --> 0:01:33.520 are there do you have some riskier ideas that maybe 0:01:33.600 --> 0:01:36.520 higher return because four point six percent is great, especially 0:01:36.520 --> 0:01:40.320 if it's completely risk free. I love it, and so short, Um, 0:01:40.400 --> 0:01:44.640 but what else you know, it's it's interesting. Um, clearly 0:01:44.680 --> 0:01:47.120 there's a lot, you know, going on right now in 0:01:47.200 --> 0:01:50.040 the alternative side of the arena. So if you look 0:01:50.080 --> 0:01:52.680 at some of the investments that private equity is making 0:01:52.760 --> 0:01:54.600 right now, if you're willing to hold it for the 0:01:54.720 --> 0:01:57.440 long term, um, that's clearly a part of the market 0:01:57.560 --> 0:02:00.680 that has historically done well, and markets this where things 0:02:00.720 --> 0:02:03.800 are a little volatile on the public side. So I 0:02:03.800 --> 0:02:08.000 would absolutely absolutely look there. Um. In addition to that, 0:02:08.120 --> 0:02:09.920 you know, if you're willing to take a little risk 0:02:10.560 --> 0:02:13.680 in the first year post a bear market. In that 0:02:13.800 --> 0:02:17.200 first year, fifty percent of the total bell bear returns 0:02:17.280 --> 0:02:20.080 it's actually forty eight percent, but roughly fifty percent of 0:02:20.120 --> 0:02:23.119 the total bear returns on average happen in that first year. 0:02:23.639 --> 0:02:26.160 So legging into equities, even if you want to do 0:02:26.200 --> 0:02:28.400 it in a passive way, UM, as long as you're 0:02:28.400 --> 0:02:31.280 willing to stay the course if things get a little 0:02:31.320 --> 0:02:33.919 worse from here, you won't miss that first year, which 0:02:33.960 --> 0:02:36.760 is really important. Natalie are you you're based in California? 0:02:36.960 --> 0:02:38.880 I am What are you doing in New York? Then? 0:02:39.280 --> 0:02:41.680 I am here for a board meeting? Okay, all right, 0:02:41.720 --> 0:02:43.880 I just want to check you know, people coming into tourists. 0:02:43.880 --> 0:02:46.120 You're coming back big time, Matt. I was kind of 0:02:46.160 --> 0:02:49.359 out and about Midtown yesterday and they are out. I mean, 0:02:49.480 --> 0:02:51.919 every language on the planet's being spoken. Here is the 0:02:51.960 --> 0:02:53.760 last place I want to be right now? Why not? 0:02:54.160 --> 0:02:59.600 The weather is off? Please, it's it's the greatest. Talk 0:02:59.680 --> 0:03:01.480 to us about asset mark. I mean, you work with 0:03:01.520 --> 0:03:05.919 independent advisors. What do they sing? Are they seeing money 0:03:06.000 --> 0:03:09.120 come their way? What do you guys, asset mark? Where 0:03:09.160 --> 0:03:10.680 where do you add value? How do you try to 0:03:10.720 --> 0:03:14.440 help your clients as Mark helps our clients by helping 0:03:14.480 --> 0:03:18.080 them compete at any size, and so we provide outsourced 0:03:18.120 --> 0:03:23.239 and investment services, technology and support, the support and entrepreneur 0:03:23.320 --> 0:03:26.519 needs to run a thriving business for our advisors. And 0:03:26.560 --> 0:03:29.800 as a result, advisors who use us have on average 0:03:29.800 --> 0:03:33.640 about fourteen points more operating leverage than their competition if 0:03:33.680 --> 0:03:36.600 you look at publicly available data UM, which is great 0:03:36.720 --> 0:03:39.640 because advisors can use that fourteen points to invest in 0:03:39.680 --> 0:03:42.160 areas that are really important to their clients, which helps 0:03:42.160 --> 0:03:45.840 them grow. So are advisor groups Are they leaving the 0:03:45.880 --> 0:03:48.400 Merrill Lynch platforms, the Smith Barney platforms and all that 0:03:48.680 --> 0:03:50.440 and kind of going out on their own. Is that 0:03:50.600 --> 0:03:53.760 still a trend? Yes, the move to independence is still 0:03:53.760 --> 0:03:58.240 a trend. In addition, advisors often they start, they get 0:03:58.280 --> 0:04:01.040 their uh c f A or c a P certification 0:04:01.080 --> 0:04:02.680 and they start and they want to be an entrepreneur 0:04:02.880 --> 0:04:06.080 and serve clients and their local community. I have one 0:04:06.120 --> 0:04:10.600 advisor who decided that she wanted to move away um 0:04:10.640 --> 0:04:13.200 from UH that he I'm sorry, I wanted to move 0:04:13.200 --> 0:04:16.400 away from the auto manufacturing industry and become an advisor. 0:04:16.480 --> 0:04:18.919 And now he serves clients in that industry because no 0:04:18.960 --> 0:04:22.120 one understands it better than him. Interesting, what what do 0:04:22.160 --> 0:04:25.320 you think about value stocks right now? I see first 0:04:25.320 --> 0:04:28.760 eagle on your resume? Yes, yes, uh, first eagle. I 0:04:29.000 --> 0:04:32.080 clearly value is near and dear to my heart, and um, 0:04:32.360 --> 0:04:34.000 you know I always love value stocks that you know, 0:04:34.040 --> 0:04:36.760 it's important to understand the companies you're investing in, and 0:04:36.880 --> 0:04:38.880 at the heart of the matter, that's value. So I 0:04:38.920 --> 0:04:40.719 like that. Right now, how do you define value? Do 0:04:40.720 --> 0:04:43.680 you go to the typical price, earnings price the book? 0:04:44.000 --> 0:04:45.640 How do you think of value? Because I guess values 0:04:45.640 --> 0:04:48.000 a relative term for a lot of people. Yeah, so 0:04:48.120 --> 0:04:50.440 for me, it's definitely more price to book and then 0:04:50.480 --> 0:04:53.799 looking at sales, making sure you really understand what's driving 0:04:53.800 --> 0:04:59.000 sales and what's driving revenue growth. Are there tools newer tools? 0:04:59.040 --> 0:05:01.239 I'm thinking about et F, But maybe there's something else 0:05:01.320 --> 0:05:04.080 that you think are trending up for for the right 0:05:04.120 --> 0:05:07.120 reasons right now? Um. So, one thing that I think 0:05:07.200 --> 0:05:11.080 is really important is personalization is finally coming to investing, 0:05:11.560 --> 0:05:14.880 and so I'm a really big believer in direct indexing 0:05:14.920 --> 0:05:17.280 as being a trend that's going to stay with us. 0:05:17.600 --> 0:05:19.320 Um And the reason for that is I think in 0:05:19.320 --> 0:05:22.400 in every part of investors lives. They're able to personalize 0:05:22.400 --> 0:05:24.880 what they do. Why not with their investments. You know, 0:05:24.880 --> 0:05:27.400 if you're if you're feeling that you don't want to 0:05:27.400 --> 0:05:29.680 invest in a particular part of the market because of 0:05:30.279 --> 0:05:32.719 a value you have, or you really want to double 0:05:32.760 --> 0:05:34.280 down on that part of market, you should be able 0:05:34.320 --> 0:05:37.480 to do it and still have a portfolio that has 0:05:37.760 --> 0:05:42.839 um return characteristics that you're comfortable with. Direct indexing, you 0:05:42.839 --> 0:05:46.000 can basically build your own index, right. You can take 0:05:46.040 --> 0:05:50.400 someone else's index and say, um, you don't want Google 0:05:50.600 --> 0:05:53.560 or Facebook in your SMP. You can just pull them 0:05:53.560 --> 0:05:57.360 out and have the rest of the SMP um. I mean, 0:05:57.400 --> 0:05:59.839 you can do anything you want, right, that's right, and 0:06:00.120 --> 0:06:01.479 you can pull them out and then you can put 0:06:01.480 --> 0:06:05.000 something in that has a similar return characteristic, or you 0:06:05.040 --> 0:06:08.279 can double weight something that has a similar return characteristics, 0:06:08.320 --> 0:06:11.600 so you still have um you know, on paper roughly 0:06:11.680 --> 0:06:13.919 the performance of the SMP. Not as a retail investor, 0:06:13.920 --> 0:06:17.039 but this is something that the advisors with whom you 0:06:17.120 --> 0:06:20.000 work can do and that offer their clients both actually 0:06:20.000 --> 0:06:23.200 advisors with whom my work can help retail investors build 0:06:23.200 --> 0:06:26.560 the index that's perfect for them and it's extremely important 0:06:26.680 --> 0:06:29.240 for an investor to understand, you know, tracking error and 0:06:29.320 --> 0:06:32.719 concepts that might not be immediately evident um. But also 0:06:32.800 --> 0:06:36.080 investors can do it directly using several retail platforms. All right, 0:06:36.120 --> 0:06:38.800 good stuff cool. Natalie Wolfson, CEO of Asset Mark, joining 0:06:38.839 --> 0:06:40.880 us live here in our Bloomberg Interactive Broker studio in 0:06:40.920 --> 0:06:48.560 from California. Marijuana stocks are tumbling today after Senate Minority 0:06:48.640 --> 0:06:52.400 Leader Mitch McConnell criticized attempts to add a marijuana banking 0:06:52.440 --> 0:06:56.000 bill the National Defense Authorization Acts. So we said, let's 0:06:56.000 --> 0:06:59.640 talk about the cannabis biz. Does Mitch McConnell have against weed? 0:07:00.040 --> 0:07:02.040 He just doesn't look like a weed friendly dude when 0:07:02.040 --> 0:07:05.200 you look at him, you know, So it doesn't true. 0:07:05.400 --> 0:07:07.240 They grow some of the best weed in the whole country. 0:07:07.240 --> 0:07:10.880 There absolutely some good bourbon too. Josh Joseph joins us. 0:07:10.920 --> 0:07:14.320 He's the CEO and founder of Big Plan Holdings. Josh, 0:07:14.400 --> 0:07:15.920 thanks so much for joining us here. I love for 0:07:15.920 --> 0:07:17.120 you to give us just kind of the lay of 0:07:17.160 --> 0:07:20.360 the land. What do you guys do at Big Plan Holdings. 0:07:23.720 --> 0:07:25.680 I don't believe Josh is there. I don't believe Josh 0:07:25.800 --> 0:07:28.520 is there. Somebody's gotta push like the button that brings 0:07:28.600 --> 0:07:31.240 Josh back. But so to I'm lo gonna till ray 0:07:31.280 --> 0:07:32.920 the stock is off today. That's like one of the 0:07:32.920 --> 0:07:37.240 big weed companies. UM, Josh Joseph CEO and founder Big 0:07:37.240 --> 0:07:40.720 Plan Holdings. You there, my friend, can you hear me? Okay, 0:07:40.920 --> 0:07:43.960 yes we can absolutely. We're just talking cannabis here. We we 0:07:43.840 --> 0:07:45.680 we love to get a sense of what you guys 0:07:46.160 --> 0:07:52.840 at Big Plan Holdings are up to these days. All 0:07:52.920 --> 0:07:57.440 right today guys much appreciated, and you have to jump 0:07:57.440 --> 0:08:00.800 into a Big Plan Holdings and you know what we're 0:08:01.040 --> 0:08:06.000 what we're all about is UH a family office diversified 0:08:06.320 --> 0:08:09.960 in many different investment verticals. UH, you know, with one 0:08:10.000 --> 0:08:13.440 of our primary focals, UH focal points certainly based in 0:08:13.480 --> 0:08:17.400 the cannabis and UH and CBD industries. UM, coming out 0:08:17.440 --> 0:08:20.200 of a great deal of experience in cannabis. It's two 0:08:20.200 --> 0:08:23.760 thousand fourteen. So you've been what you did? You start 0:08:23.800 --> 0:08:27.520 off in real estate and then get into we'd real 0:08:27.640 --> 0:08:31.200 estate and then go to Big Plan Holdings. Yeah. Yeah, 0:08:31.240 --> 0:08:33.800 my my quick professional track and I'll give you you 0:08:33.840 --> 0:08:37.800 guys an abbreviated version of that is have specialized in 0:08:37.840 --> 0:08:41.120 commercial real estate around the country probably for about twenty 0:08:41.120 --> 0:08:44.480 six or twenty seven years, all facets of real estate 0:08:44.640 --> 0:08:48.640 from uh, you know, development to straight up ownership of 0:08:48.679 --> 0:08:52.079 existing assets to a lot of bankruptcy and distressed real 0:08:52.160 --> 0:08:55.560 estate sales and transacted and you know, probably forty or 0:08:55.559 --> 0:08:59.400 forty five states around the country. So I've had a 0:08:59.520 --> 0:09:02.760 very very fortunate run in the commercial real estate sector. 0:09:03.280 --> 0:09:06.520 That that then evolved into jumping into the state of 0:09:06.559 --> 0:09:11.040 Illinois UH their cannabis program in two thousand fourteen as 0:09:11.080 --> 0:09:15.560 an applicant UH and successfully securing seven of the initial 0:09:16.080 --> 0:09:21.480 fifty medical retail dispensary licenses. UM, which also cannabis, also 0:09:21.559 --> 0:09:25.000 has a very very big overlap within real estate as well. 0:09:25.120 --> 0:09:27.839 You can't have a dispensary or a growth facility or 0:09:27.880 --> 0:09:31.360 extraction or manufacturing facility or anything without real estate. So 0:09:31.640 --> 0:09:33.440 they really did go hand in hand. But what's the 0:09:33.480 --> 0:09:37.679 infrastructure look like, Josh um in terms of the grow 0:09:37.720 --> 0:09:41.520 I mean, Humble County is so famous in California. I know, 0:09:41.800 --> 0:09:45.280 UM Athens, Ohio, and we were just talking about Kentucky. UM, 0:09:45.320 --> 0:09:48.040 you know used to grow some pretty good weed when 0:09:48.040 --> 0:09:49.480 I was in high school. So what what's it look 0:09:49.559 --> 0:09:53.240 like now where where where is? Uh? Where the best operations? 0:09:53.960 --> 0:09:56.480 You know, you know this, this has become a real 0:09:56.520 --> 0:09:58.400 big business. You know when when when I got involved 0:09:58.400 --> 0:10:02.120 in two thousand THO team, it was it was still 0:10:02.320 --> 0:10:05.920 really an incubator in a very very immature industry. You 0:10:05.960 --> 0:10:09.760 fast forward to two thousand twenty two. Uh, this industry, 0:10:09.760 --> 0:10:14.160 the cannabis industry as a whole, is um dramatically different, 0:10:14.280 --> 0:10:17.560 dramatically more mature. Still has a significant amount of runway 0:10:18.040 --> 0:10:21.440 to it, I think in many many respects. But you 0:10:21.480 --> 0:10:24.040 know what you're seeing now is you're seeing the technology. 0:10:24.240 --> 0:10:27.319 You're seeing real R and D. You're seeing real science 0:10:27.360 --> 0:10:31.720 take place with the larger with the larger cannabis operators around. Um. 0:10:31.760 --> 0:10:34.440 You know, whether they be the public companies, whether they 0:10:34.520 --> 0:10:37.480 be the private companies that remain um yet to go 0:10:37.559 --> 0:10:41.839 public or yet to sell to larger, larger operators. Uh. 0:10:41.880 --> 0:10:45.920 You know again, guys, remember you know, the whole cannabis industry. 0:10:46.000 --> 0:10:48.120 We can talk about this for hours, but you know 0:10:48.200 --> 0:10:50.679 it violates federal law still yet today. So it's a 0:10:50.720 --> 0:10:53.960 federal ob versus state law issue. And then when when 0:10:54.000 --> 0:10:58.800 states enact legislation, they will typically get what they will 0:10:58.840 --> 0:11:03.040 always out of the gate, always, always, always go medical 0:11:03.480 --> 0:11:05.679 with a medical program first, you know, That's how they 0:11:05.679 --> 0:11:09.080 dip their toe in the water. Uh. With a medical program, 0:11:09.160 --> 0:11:11.640 they usually typically give it twelve or twenty four months. 0:11:12.000 --> 0:11:14.560 They then go to adult use, which is also known 0:11:14.559 --> 0:11:17.959 as recreational use, and then that process kind of evolves, 0:11:18.000 --> 0:11:20.200 if you will. Um. Well, I was just trying to 0:11:20.240 --> 0:11:22.520 pin down because this is the reason I wanted to 0:11:22.559 --> 0:11:25.320 talk about it today. We thought that the Safe Act, 0:11:25.559 --> 0:11:28.520 the you know, Marijuana Banking Act, was going to get 0:11:28.520 --> 0:11:30.559 put into a defense bill and make it a lot 0:11:30.600 --> 0:11:33.840 easier for you guys to do business. Um, it got 0:11:33.840 --> 0:11:36.840 taken out. So I'm wondering, when you look at just this, 0:11:37.440 --> 0:11:42.440 um the skeleton of the marijuana business around North America, 0:11:42.880 --> 0:11:46.640 is it still you know, scary looking Greg Almond dudes 0:11:46.720 --> 0:11:49.440 with shotguns and pickup trucks that are growing up? Or 0:11:49.559 --> 0:11:53.400 is it nothing nothing near that, nothing near that whatsoever. 0:11:53.920 --> 0:11:57.160 This is a real industry that's not going anywhere. This 0:11:57.200 --> 0:12:01.360 is a heavily politicized and polarized, um, you know situation 0:12:01.360 --> 0:12:03.720 as it relates to the Safe Banking Act and and 0:12:03.720 --> 0:12:06.800 and the number of other nuances and really key elements 0:12:06.800 --> 0:12:09.840 to the industry being able to continue to grow successfully 0:12:10.520 --> 0:12:13.240 in this country. No, this is that this is not 0:12:13.360 --> 0:12:16.920 the old school head shop approach, if you will with 0:12:17.280 --> 0:12:20.720 h you know the cartel and uh you know the 0:12:20.720 --> 0:12:23.240 the gangs, and you know there certainly is still a 0:12:23.280 --> 0:12:26.200 black market out there without question. But no, this is 0:12:26.200 --> 0:12:30.760 a real deal, professional industry that has UH, that has 0:12:30.800 --> 0:12:34.040 stabilized itself in many many ways, and we need safe 0:12:34.040 --> 0:12:37.880 banking to pass. So it must so. And there's still 0:12:37.920 --> 0:12:40.680 I think some optimism and analystic Cowan said, he thinks 0:12:40.679 --> 0:12:42.320 it's going to get done by the end of the year. 0:12:42.640 --> 0:12:46.160 When that happens and you're running uh, you know UH 0:12:46.880 --> 0:12:49.320 UM invest an investment office here, What do you like 0:12:49.480 --> 0:12:52.679 if I look in UM for example the e t F, 0:12:52.840 --> 0:12:56.679 I see til Ray as a huge UH player, innovative 0:12:56.720 --> 0:13:00.000 industrial canopy growth. What what do you like out there? 0:13:00.960 --> 0:13:04.800 Company wise? Is that what you're talking about? Yeah? So 0:13:04.800 --> 0:13:06.640 so I'm a I'm a big I'm a big fan. 0:13:06.840 --> 0:13:10.840 I founded a company called Grassroots Canabas based out of Chicago. 0:13:11.600 --> 0:13:13.880 Today we are either the number one or number two 0:13:13.960 --> 0:13:17.559 largest exit it has taken place in the cannabis industry. 0:13:17.600 --> 0:13:21.640 We sold our company July twenty to cure a Leaf. 0:13:21.720 --> 0:13:23.840 At the time of that sale, we're the largest privately 0:13:23.880 --> 0:13:26.800 held cannabis company in the US and including all the 0:13:26.840 --> 0:13:29.160 pub codes you can only be public up in Canada. 0:13:29.320 --> 0:13:32.439 Right now we're probably the third or fourth largest cannabis 0:13:32.480 --> 0:13:35.360 company in the country. Pure A Leaf, who is the 0:13:35.400 --> 0:13:37.679 largest cannabis company in the world. They happen to be 0:13:37.679 --> 0:13:41.320 baked based in Wakefield, Massachusetts, but they have a very 0:13:41.400 --> 0:13:44.760 large European footprints as well. Um you know, came in 0:13:44.800 --> 0:13:47.960 and they acquired us. And so here's what I here's 0:13:47.960 --> 0:13:50.880 what I see. I see the stronger going to survive 0:13:50.920 --> 0:13:53.120 in this in this industry, Like a lot of industry, 0:13:53.200 --> 0:13:55.200 I think at the end, at the end of all 0:13:55.280 --> 0:13:58.600 of this, when we fast forward five years, ten years, 0:13:58.679 --> 0:14:01.400 fifteen years, I think what we're gonna see is we're 0:14:01.400 --> 0:14:04.440 going to see companies like Kira Leaf, g t I, 0:14:04.600 --> 0:14:08.360 Green Thumb Industry is you know, known as g T I, Cressco. 0:14:08.920 --> 0:14:12.120 I think we'll see True Leave. I think we'll see Murano. 0:14:12.640 --> 0:14:15.600 I think we'll see um, you know, I think we'll 0:14:15.600 --> 0:14:18.679 see you know, maybe another couple out there. We'll see somewhere. 0:14:18.760 --> 0:14:22.080 We'll see somewhere guys between five and ten of the 0:14:22.200 --> 0:14:24.880 big of the big boys and girls, if you will, 0:14:25.280 --> 0:14:27.720 that will be the industry leaders. I think there's gonna 0:14:27.720 --> 0:14:31.000 be a significant drop off, and we call those tier 0:14:31.040 --> 0:14:34.200 one m s os in in in our world in cannabis. 0:14:34.520 --> 0:14:36.280 I think when you drop down to the tier two 0:14:36.320 --> 0:14:38.680 and the tier three m s o s, a lot 0:14:38.760 --> 0:14:40.800 of those folks are gonna be gobbled up over time. 0:14:41.240 --> 0:14:45.640 I think some will continue to survive and they'll be successful. Um, 0:14:45.680 --> 0:14:47.640 but I think a lot of those will you know, 0:14:47.640 --> 0:14:52.120 will be gobbled up over time. As regulatory hurdles are 0:14:52.360 --> 0:14:55.360 are you know, continue to kind of you know, unwrap 0:14:55.440 --> 0:14:57.480 if you will. You know, right now we are all 0:14:57.520 --> 0:15:00.560 as large M s o s um we are. We 0:15:00.600 --> 0:15:03.680 are stuck with certain regulation caps, if you will, on 0:15:03.760 --> 0:15:06.280 the numbers of licenses that we can have in the state. 0:15:06.840 --> 0:15:10.000 So um, you know, once those once those things changed, 0:15:10.040 --> 0:15:12.720 for example, and you can have more than for as 0:15:12.760 --> 0:15:16.400 in Illinois, you cannot have more than ten dispensaries in 0:15:16.440 --> 0:15:19.320 the state of Illinois. Once that's lifted or that's modified, 0:15:19.360 --> 0:15:22.040 if you will, and you can flex up to fifteen 0:15:22.120 --> 0:15:25.160 or twenty or thirty or unlimited, You're going to see 0:15:25.200 --> 0:15:29.320 a major, major push towards your consolidation of the large 0:15:29.400 --> 0:15:31.720 of the large companies, the large MSOs coming in and 0:15:31.760 --> 0:15:35.600 buying the smaller companies in my opinion, Thanks very much, 0:15:36.000 --> 0:15:41.960 Josh Joseph there. Well, the investment banks were in the 0:15:42.000 --> 0:15:45.880 news this week. Gold Sas had their annual conference, financial 0:15:45.880 --> 0:15:50.440 services conference, all the big I know, it almost like 0:15:50.440 --> 0:15:53.920 a set up. Yeah, like they're talking recessions, they're talking 0:15:54.120 --> 0:15:57.800 laying off people, cutting bonus pools. It was a real downer. 0:15:58.400 --> 0:16:00.680 Shelly Bassett was there, I put something to blame on? 0:16:00.920 --> 0:16:04.400 Was there? She like lad the whole conference. I know, 0:16:04.480 --> 0:16:07.320 she had some awesome interviews. So we've got the bass 0:16:07.520 --> 0:16:10.240 Bloomberg News Wall Street reporter here in our studio, as 0:16:10.240 --> 0:16:14.520 well as Alison Williams, senior banks analyst at Bloomberg Intelligence. 0:16:14.520 --> 0:16:16.760 So Chanali, let's start with you. You were at the 0:16:16.760 --> 0:16:22.200 Goldman conference. Boy, the Bloomberg News stories your interviews coming 0:16:22.200 --> 0:16:25.040 across the Bloomberg television sounded kind of like a bummer. 0:16:25.560 --> 0:16:27.920 What was it? You know, it's interesting this is the 0:16:27.920 --> 0:16:30.000 thirty third year of the conference. It's not over. It's 0:16:30.000 --> 0:16:32.840 still on today. And I was told at the conference 0:16:32.880 --> 0:16:36.480 that every year is either like a super happy year, 0:16:36.800 --> 0:16:41.760 super gloomy gloomy one, and this year was definitely gloomy. Um, 0:16:41.800 --> 0:16:44.440 but is that so surprising most of the folks, they 0:16:44.480 --> 0:16:47.200 are expecting a recession. In every conversation was how to 0:16:47.240 --> 0:16:50.880 prepare for that? And it seemed like every conversation was 0:16:51.760 --> 0:16:56.240 bank ceo telling his star performers to get ready for 0:16:56.560 --> 0:17:01.160 crappy bonus on background, guys, something so interesting. I was wait, wait, 0:17:01.200 --> 0:17:05.479 this is live well on background to employee other banks 0:17:05.520 --> 0:17:12.720 from me the record, Yes, live radio now on background. 0:17:12.720 --> 0:17:15.359 A lot of other folks arrivals of Goldman Sachs would 0:17:15.400 --> 0:17:18.880 tell me they were hoping that Solomon would be very negative. 0:17:19.040 --> 0:17:21.840 Why because if he set the bar low, it made 0:17:21.840 --> 0:17:25.399 it easier for everybody else to also do that. Yeah, 0:17:25.600 --> 0:17:29.200 so Alice, Because when Paul goes to his manager, um, 0:17:29.240 --> 0:17:31.120 you know, and says I want to raise The manager says, 0:17:31.160 --> 0:17:32.840 it's been a crappy year. I'm sorry, we're giving you 0:17:32.840 --> 0:17:36.240 a cut, and he says, I'm going across the street. 0:17:36.320 --> 0:17:39.000 The manager says, hey, dude, did you hear Shinali Bastic's 0:17:39.000 --> 0:17:42.119 interview with David Solomon. Don't go over there. Did you 0:17:42.160 --> 0:17:44.480 see Rich Handler's note don't go over there, So I 0:17:44.600 --> 0:17:47.840 sulk back to my desk and table between man legs. Alison, 0:17:48.119 --> 0:17:51.119 you've got your three outlooks out like most of the 0:17:51.119 --> 0:17:54.480 other Bloomberg Intelligence analysts. What's your out look for some 0:17:54.560 --> 0:17:56.280 of these big banks next year? I mean, we got 0:17:56.400 --> 0:17:59.119 rates rising, that's a good thing from an interest market. 0:17:59.119 --> 0:18:01.200 The markets can't be any worse. Something work this year, 0:18:01.440 --> 0:18:04.960 I think. I mean it's all about we have a recession. 0:18:05.240 --> 0:18:08.200 How deep is the recession? When the recession right, I 0:18:08.240 --> 0:18:12.600 would say that, um, you know the banks are prepared, right, 0:18:12.640 --> 0:18:14.399 So I think that's the point that they were making, 0:18:14.560 --> 0:18:16.480 is like, oh, there's a lot of negative there's risks 0:18:16.480 --> 0:18:19.000 out there. But I have a question for Alison. Sure 0:18:20.040 --> 0:18:23.920 trading is up, trading is up, but not as much 0:18:23.960 --> 0:18:29.399 as fees are down. Yeah, and that's does volatility still 0:18:29.640 --> 0:18:31.560 keep that trading a head when next year? I think 0:18:31.560 --> 0:18:35.439 it does? I mean keep in mind, right, so macro 0:18:35.600 --> 0:18:40.680 trading is at record levels, right, Equity trading is down 0:18:40.720 --> 0:18:46.640 five from record levels. Investment banking, yes, down from record levels. 0:18:46.640 --> 0:18:49.439 So going but going into next year, right, if something's 0:18:49.480 --> 0:18:51.399 down for a few percent, it's half is important to 0:18:51.440 --> 0:18:55.440 your bottom line next year? And there will be some recovery. 0:18:55.560 --> 0:18:57.680 I think it's going to be all about for the fees. 0:18:57.720 --> 0:19:00.119 It's all gonna be about one queue. What can they 0:19:00.119 --> 0:19:03.120 push out in the seasonally strong recorder. I think there 0:19:03.280 --> 0:19:06.200 is some you know, there's this term labor hoarding. I 0:19:06.240 --> 0:19:09.240 think they're bank reboarding. Right. So we've heard about cuts, 0:19:09.280 --> 0:19:12.800 but they're like very small cuts, and again after a 0:19:12.920 --> 0:19:18.480 scramble to add talent, they're hesitant to let them go. 0:19:18.640 --> 0:19:21.160 And you have people like Daniel Pinto, who's the head 0:19:21.200 --> 0:19:24.680 of JP Morgan c ib saying, you know, we're gonna 0:19:24.680 --> 0:19:27.320 cut comp but we're gonna keep heads, you know, after 0:19:27.440 --> 0:19:29.160 all the work we did to get the people in place. 0:19:29.280 --> 0:19:31.600 My suspicion here is that a few star traders who 0:19:31.560 --> 0:19:34.199 are going to get higher bonuses still I mean, at 0:19:34.240 --> 0:19:35.960 the end of the day they have to write or 0:19:36.000 --> 0:19:38.760 they where they go to hedge funds. There's a hedge 0:19:38.760 --> 0:19:40.800 funds still high. They go to hedge funds, and I 0:19:40.840 --> 0:19:42.760 mean hedge funds it's not a great year either. They 0:19:42.800 --> 0:19:45.199 have a lot of outflows, but macro hedge funds have 0:19:45.280 --> 0:19:49.000 had a pretty good year. Commodities hedge funds there's I mean, 0:19:49.040 --> 0:19:54.680 there's always opportunities sponsor back and places like hedge funds 0:19:54.800 --> 0:19:58.080 and you know these you know boutiques. It's much more 0:19:58.080 --> 0:20:00.159 to eat what you kill. And so if you r 0:20:00.200 --> 0:20:02.720 a star trader, there's a big opportunity for you. What 0:20:02.800 --> 0:20:06.879 are the returns Allison in your investment banking world these days? 0:20:06.960 --> 0:20:08.840 I mean when you and I were there, we were 0:20:08.840 --> 0:20:12.840 generating high teens, low twenties. Are those days because those 0:20:12.880 --> 0:20:16.399 are the days of leverage? But I would say that 0:20:16.760 --> 0:20:18.520 you know, if you so if we look at like 0:20:18.600 --> 0:20:22.199 sort of the the the are we on the global 0:20:22.240 --> 0:20:24.960 investment banking units of say like the top ten to 0:20:25.040 --> 0:20:28.359 thirteen banks, you know, we hit like fifteen per cent 0:20:28.480 --> 0:20:31.600 last year excluding our goes that you know, that would 0:20:31.600 --> 0:20:33.640 be like a hundred and ten basis point hit. But 0:20:33.920 --> 0:20:36.879 you know that was the best we've seen since before 0:20:36.920 --> 0:20:39.600 the crisis. So that was pretty good. You know, this 0:20:39.680 --> 0:20:41.919 year obviously that's that's going to come down, but we 0:20:42.000 --> 0:20:46.520 think still double digit and that's really what you know 0:20:46.600 --> 0:20:49.840 from the bank investors standpoint for next year. The bottom 0:20:49.840 --> 0:20:52.560 line is the profitability is still good because we had 0:20:52.600 --> 0:20:55.880 this we had this huge revenue. We didn't hire that 0:20:55.920 --> 0:20:59.560 we you know, we hired, but not nearly as much 0:20:59.600 --> 0:21:02.280 as uh, you know, as much as the revity grew 0:21:02.359 --> 0:21:04.119 up to the profitability is something we haven't seen in 0:21:04.119 --> 0:21:07.600 a long time. Like if they have to adjust some 0:21:07.680 --> 0:21:11.560 of their longer term targets, JP Morgan said, sev right, 0:21:11.680 --> 0:21:13.639 if they don't hit that next year, I think you know, 0:21:13.840 --> 0:21:16.760 Crimie River, it's it's a recession, right, that's fine. But 0:21:16.800 --> 0:21:18.639 if they start to have to say, Okay, this is 0:21:18.640 --> 0:21:22.280 not something that we can hit at a more meaningful rate, 0:21:22.480 --> 0:21:26.199 then that's when you have questions about what businesses in 0:21:26.200 --> 0:21:28.400 the longer term are going to make the most sense 0:21:28.400 --> 0:21:31.800