1 00:00:05,040 --> 00:00:08,639 Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 2 00:00:08,680 --> 00:00:12,040 Speaker 1: with Paul Sweeney. Join us each day for insight from 3 00:00:12,039 --> 00:00:16,240 Speaker 1: the best in economics, finance, investment, and international relations. You 4 00:00:16,239 --> 00:00:19,599 Speaker 1: can also watch the show live on YouTube. Visit the 5 00:00:19,600 --> 00:00:24,360 Speaker 1: Bloomberg Podcast channel on YouTube to see the show weekday 6 00:00:24,400 --> 00:00:27,400 Speaker 1: mornings from seven to ten am Eastern from our global 7 00:00:27,440 --> 00:00:32,080 Speaker 1: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 8 00:00:32,440 --> 00:00:36,000 Speaker 1: or anywhere else you listen, and always I'm Bloomberg Radio, 9 00:00:36,159 --> 00:00:39,879 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business App. Look how 10 00:00:39,960 --> 00:00:42,159 Speaker 1: out of the net right now? Helping us here with 11 00:00:42,159 --> 00:00:44,120 Speaker 1: the markets? What do you do at thirty eight thousand 12 00:00:44,200 --> 00:00:45,000 Speaker 1: or UBS one? 13 00:00:46,400 --> 00:00:49,120 Speaker 2: By and large, you're prepared for a consolidation given the 14 00:00:49,320 --> 00:00:52,520 Speaker 2: strength of the run, but you prepare for hire. Really 15 00:00:52,600 --> 00:00:54,680 Speaker 2: is our view or view coming into the year, is 16 00:00:54,680 --> 00:00:57,120 Speaker 2: that the surprise of the year, the thing that markets 17 00:00:57,120 --> 00:01:00,520 Speaker 2: weren't expecting, would be that stocks actually in a soft 18 00:01:00,560 --> 00:01:03,600 Speaker 2: landing less than any other major asset class, and that 19 00:01:03,760 --> 00:01:06,920 Speaker 2: stocks could rise hit pressure record highs without getting much 20 00:01:06,920 --> 00:01:09,720 Speaker 2: help from lower bond yields. So far, that's what happened. 21 00:01:09,840 --> 00:01:11,720 Speaker 2: What we expect the next leg will be you know, 22 00:01:11,760 --> 00:01:14,480 Speaker 2: possibly after some consolidation, is a more broadening out of 23 00:01:14,480 --> 00:01:16,920 Speaker 2: that rally. So it's not just you know, on the 24 00:01:16,959 --> 00:01:18,040 Speaker 2: backs of the of the few. 25 00:01:18,080 --> 00:01:20,280 Speaker 1: So kay, we got industrials coming out and it's pretty 26 00:01:20,280 --> 00:01:22,440 Speaker 1: shaky this morning. We didn't J and J did well, 27 00:01:22,480 --> 00:01:26,319 Speaker 1: but others really pretty rocky morning. Do you subdivide into 28 00:01:26,319 --> 00:01:30,400 Speaker 1: the day to day grind the tech growthy profitable companies, 29 00:01:30,440 --> 00:01:34,000 Speaker 1: cash flow companies like Microsoft from everybody else, or do 30 00:01:34,040 --> 00:01:35,120 Speaker 1: you pull them together? 31 00:01:35,880 --> 00:01:38,400 Speaker 2: So our view for for a while now has been 32 00:01:38,520 --> 00:01:41,520 Speaker 2: that given just the extent of earnings out performance you're 33 00:01:41,520 --> 00:01:44,320 Speaker 2: getting from some of these names intact, you just you 34 00:01:44,319 --> 00:01:46,280 Speaker 2: can't you can't be short them. You really cannot be 35 00:01:46,360 --> 00:01:49,240 Speaker 2: short some of these cast generating machines. And you know 36 00:01:49,280 --> 00:01:53,320 Speaker 2: we have no overweight to technology and sector ETFs where 37 00:01:53,320 --> 00:01:57,840 Speaker 2: we have that ability. So it the short answer is 38 00:01:57,840 --> 00:02:00,760 Speaker 2: is yes, still still enjoy those, still separate them. However, 39 00:02:00,800 --> 00:02:03,720 Speaker 2: you know, our view is more towards the broadening out. 40 00:02:04,000 --> 00:02:07,440 Speaker 2: Want to have betting on a lot of different winners, 41 00:02:07,480 --> 00:02:10,560 Speaker 2: whether that's in US financials, whether that's in you know, 42 00:02:10,639 --> 00:02:14,080 Speaker 2: em ex China, whether that's in Japan. I really do 43 00:02:14,160 --> 00:02:17,639 Speaker 2: think the story is the soft landing and narrative is 44 00:02:18,040 --> 00:02:19,679 Speaker 2: a boon to risk assets the world over. 45 00:02:20,040 --> 00:02:22,600 Speaker 3: Hey, look, you know we had that great run to 46 00:02:22,800 --> 00:02:26,239 Speaker 3: end the year last year in kind of November December. 47 00:02:26,520 --> 00:02:30,000 Speaker 3: I don't recall earnings expanding that much during that period. 48 00:02:30,120 --> 00:02:32,919 Speaker 3: We have a valuation risk here in the marketplace. Given 49 00:02:32,919 --> 00:02:33,800 Speaker 3: that run we had. 50 00:02:34,560 --> 00:02:37,400 Speaker 2: Certainly at a valuation risk. You could also say that 51 00:02:37,760 --> 00:02:40,640 Speaker 2: since the start of twenty twenty two and theory valuations 52 00:02:40,639 --> 00:02:43,960 Speaker 2: have also improved mildly, So you can you know, you 53 00:02:43,960 --> 00:02:46,640 Speaker 2: can play that off one way or another. Valuation is 54 00:02:46,720 --> 00:02:49,920 Speaker 2: clearly not the best market timing tool. What it is 55 00:02:50,040 --> 00:02:53,480 Speaker 2: very good at is kind of delineating how close to 56 00:02:53,520 --> 00:02:55,520 Speaker 2: the money you might want your stop to be at 57 00:02:55,520 --> 00:02:58,200 Speaker 2: a very very rich valuation. You might want to stop 58 00:02:58,320 --> 00:03:00,640 Speaker 2: a little closer to the money at something that you 59 00:03:00,639 --> 00:03:03,160 Speaker 2: know has a little more evaluation support. You might be 60 00:03:03,600 --> 00:03:05,720 Speaker 2: a little more consistent to be able to bear out 61 00:03:05,760 --> 00:03:06,760 Speaker 2: a weaker stretch. 62 00:03:07,360 --> 00:03:10,360 Speaker 3: So you mentioned merging markets here. I've heard Japan mentioned, 63 00:03:10,639 --> 00:03:12,600 Speaker 3: not to Japan's on merging market, but I've heard Japan 64 00:03:12,680 --> 00:03:15,440 Speaker 3: mentioned more in the last six months that I have 65 00:03:15,480 --> 00:03:17,919 Speaker 3: in the last twenty years. What's going on in Japan. 66 00:03:19,400 --> 00:03:21,120 Speaker 2: There's a lot of different elements here I think you 67 00:03:21,120 --> 00:03:24,440 Speaker 2: can tie together. I think first, there's been a long 68 00:03:24,480 --> 00:03:27,239 Speaker 2: story of trying to get to corporate Japan to improve 69 00:03:27,280 --> 00:03:30,440 Speaker 2: its shareholder return programs that actually became serious. You actually 70 00:03:30,480 --> 00:03:33,640 Speaker 2: really start to see more concrete steps around that, you know, 71 00:03:33,919 --> 00:03:36,200 Speaker 2: let's call it February March of last year, and really 72 00:03:36,200 --> 00:03:38,960 Speaker 2: start to see that ramp up and the market glom 73 00:03:39,000 --> 00:03:42,240 Speaker 2: onto that. The second is Japan is probably the best 74 00:03:42,800 --> 00:03:46,520 Speaker 2: levered play to nominal growth that you have out there. 75 00:03:46,560 --> 00:03:50,760 Speaker 2: It's you're predominantly export oriented the earnings outlook, and it's 76 00:03:50,760 --> 00:03:53,680 Speaker 2: also benefited from, at the same time having the end 77 00:03:53,920 --> 00:03:56,120 Speaker 2: as weak as it is. The third element, Sorry I 78 00:03:56,160 --> 00:03:59,760 Speaker 2: have to, but the third element is is it just 79 00:04:00,120 --> 00:04:03,760 Speaker 2: definitely the fact that from an Asian perspective, if it's 80 00:04:03,840 --> 00:04:06,800 Speaker 2: China or Japan, I think that rotational flow has been 81 00:04:06,800 --> 00:04:07,760 Speaker 2: a very important story. 82 00:04:07,840 --> 00:04:10,920 Speaker 1: The heart of the matter is this debate over cash 83 00:04:11,200 --> 00:04:14,440 Speaker 1: or deep into January, and everybody knows there's six eight 84 00:04:14,520 --> 00:04:17,880 Speaker 1: trillion out there, bringing up literally in every conversation because 85 00:04:17,920 --> 00:04:21,480 Speaker 1: all of our listeners and viewers are looking at cash, 86 00:04:21,760 --> 00:04:24,479 Speaker 1: where's it going to go? Is there a UBS formula 87 00:04:24,600 --> 00:04:27,680 Speaker 1: that says x percent of it goes back to deposits. 88 00:04:28,640 --> 00:04:33,560 Speaker 2: I would say the just speaking generally into longer duration assets. 89 00:04:33,600 --> 00:04:36,359 Speaker 2: So this is something that even at the start of 90 00:04:36,440 --> 00:04:39,159 Speaker 2: last year, because I would say the macromood was a 91 00:04:39,200 --> 00:04:41,240 Speaker 2: lot lower. Going to the start of last year, A 92 00:04:41,240 --> 00:04:43,560 Speaker 2: big thing I was pounding the table on was reinvestment risk. 93 00:04:43,640 --> 00:04:45,480 Speaker 2: Reinvestment risk, You're not going to be able to get 94 00:04:45,480 --> 00:04:48,360 Speaker 2: this yield on cash forever. Well, now that's actually more 95 00:04:48,360 --> 00:04:50,719 Speaker 2: teed up. I think people are a lot more aware 96 00:04:50,760 --> 00:04:53,280 Speaker 2: of what's what's coming down the pipe here. So it's 97 00:04:53,440 --> 00:04:56,440 Speaker 2: it's effectively we are going to see some flows into 98 00:04:56,800 --> 00:04:59,840 Speaker 2: whether it's longer duration or whether it's into the equity market. 99 00:05:00,080 --> 00:05:03,200 Speaker 2: We would expect some more support on a flow basis 100 00:05:03,240 --> 00:05:06,400 Speaker 2: as it becomes more apparent that cuts and the yield 101 00:05:06,440 --> 00:05:09,160 Speaker 2: on cash is going down for good news reasons, a 102 00:05:09,240 --> 00:05:12,640 Speaker 2: soft landing, falling inflation, rather than bad news reasons a stumbling, 103 00:05:12,680 --> 00:05:13,880 Speaker 2: a deteriorating economy. 104 00:05:14,000 --> 00:05:17,839 Speaker 3: All right, so Tom's been all over this magnificent seven. 105 00:05:17,920 --> 00:05:20,120 Speaker 3: He's just been printing it in twenty twenty three. 106 00:05:20,240 --> 00:05:21,280 Speaker 1: How about for the rest of us. 107 00:05:21,760 --> 00:05:25,040 Speaker 3: I mean I missed that trade, no surprise, my new 108 00:05:25,120 --> 00:05:27,880 Speaker 3: Jersey municipals have done just fine, thank you. But where 109 00:05:27,880 --> 00:05:29,640 Speaker 3: do I go now? I mean, do I chase those 110 00:05:29,920 --> 00:05:31,680 Speaker 3: magnificent seven yere I miss? 111 00:05:31,720 --> 00:05:33,559 Speaker 2: I must have missed it when Tom left the Triple 112 00:05:33,600 --> 00:05:36,800 Speaker 2: Lover doll Hash Fund in favor of Greener your. 113 00:05:36,720 --> 00:05:38,599 Speaker 3: Pastors, now Stealth's move into market. 114 00:05:38,800 --> 00:05:43,559 Speaker 2: Are our views things like US mid caps, US financials, EMX, China. 115 00:05:43,760 --> 00:05:46,080 Speaker 2: Those are some of the areas where you are seeing 116 00:05:46,520 --> 00:05:49,960 Speaker 2: some more relative earning support valuations a heck of a 117 00:05:49,960 --> 00:05:52,520 Speaker 2: lot supportive. So if you if you're looking at things 118 00:05:52,520 --> 00:05:54,360 Speaker 2: that have been relative laggards, have a lot of catch 119 00:05:54,440 --> 00:05:57,800 Speaker 2: up potential if the risk gone mood stays going. Those 120 00:05:57,839 --> 00:06:00,680 Speaker 2: are probably some of the spaces where we expectator. 121 00:06:00,120 --> 00:06:02,120 Speaker 1: Love Kawa talk. Now we got to go to hockey. 122 00:06:02,680 --> 00:06:04,480 Speaker 1: You know, there's a great video out there, folks of 123 00:06:04,520 --> 00:06:06,960 Speaker 1: a really magnificent moment and I lived it in that 124 00:06:07,720 --> 00:06:10,320 Speaker 1: Michigan when I played was number one in the nation 125 00:06:10,839 --> 00:06:15,400 Speaker 1: with that question. Red Berenson was the force there and 126 00:06:15,440 --> 00:06:17,680 Speaker 1: I had the privilege of talking to him as he said, Tom, 127 00:06:17,880 --> 00:06:20,200 Speaker 1: you're not good enough. You're not going to escape from Michigan. 128 00:06:20,640 --> 00:06:23,120 Speaker 1: Somebody else was and it's one of the most famous 129 00:06:23,160 --> 00:06:26,719 Speaker 1: goals in NCAA history. Your father and I went back 130 00:06:26,760 --> 00:06:29,880 Speaker 1: and forth, Lukala the other day on one of the 131 00:06:29,920 --> 00:06:32,400 Speaker 1: greatest goals the NCD he went around Jim Craig and 132 00:06:32,480 --> 00:06:35,320 Speaker 1: put the Urban the net and they lost to Wisconsin 133 00:06:35,360 --> 00:06:37,520 Speaker 1: in the finals. But so lot, that's Wisconsin, a bunch 134 00:06:37,520 --> 00:06:43,719 Speaker 1: of Canadians. But what a joy growing up with Ben Kawa. 135 00:06:43,839 --> 00:06:46,039 Speaker 1: What was that like? I mean, was he do you 136 00:06:46,080 --> 00:06:47,719 Speaker 1: have you in the backyard doing sprints? 137 00:06:49,040 --> 00:06:52,240 Speaker 2: Not not sprints? But man, they're still next to his 138 00:06:52,240 --> 00:06:54,960 Speaker 2: his dad just turned one hundred this year. They're still 139 00:06:55,000 --> 00:06:57,800 Speaker 2: an outdooryard right in the park beside their place where 140 00:06:57,839 --> 00:07:00,880 Speaker 2: he remembers skating as early as hell in some years. 141 00:07:01,080 --> 00:07:02,680 Speaker 2: And you know, now, I think it's well into the 142 00:07:02,680 --> 00:07:05,240 Speaker 2: new year before that thing freezes over. To make what 143 00:07:05,360 --> 00:07:07,279 Speaker 2: you will. But yeah, no, what a what a great guy, 144 00:07:07,320 --> 00:07:09,240 Speaker 2: what a great coach. And it's been, you know, great 145 00:07:09,279 --> 00:07:11,840 Speaker 2: getting to banter with him on hockey over the years, 146 00:07:11,880 --> 00:07:12,800 Speaker 2: as it is with you as well. 147 00:07:13,040 --> 00:07:15,200 Speaker 1: Okay, well, thanks so much, Lukawa with us in good 148 00:07:15,280 --> 00:07:18,640 Speaker 1: morning to Ben Koa and mister Kyler Senior. One hundred 149 00:07:18,720 --> 00:07:32,120 Speaker 1: years old, one hundred years very cool. Carl Ricadonna is 150 00:07:32,120 --> 00:07:35,160 Speaker 1: at VMP Perry Bob, and he knows that you read 151 00:07:35,200 --> 00:07:40,320 Speaker 1: Blinder in ballmart at fourteenth edition at Princeton, because that 152 00:07:40,560 --> 00:07:41,480 Speaker 1: is gospel. 153 00:07:41,520 --> 00:07:42,080 Speaker 4: And if you go to. 154 00:07:42,160 --> 00:07:46,480 Speaker 1: Chapter eighteen, they talk about factors of production and other 155 00:07:46,560 --> 00:07:52,120 Speaker 1: bow tie stuff involving productivity. Carl, productivity right now is 156 00:07:52,160 --> 00:07:59,320 Speaker 1: a mystery. How does our mystery of productivity marginal productivity theory, 157 00:07:59,360 --> 00:08:02,560 Speaker 1: how does that into what I believe is a fully 158 00:08:02,600 --> 00:08:03,560 Speaker 1: employed America. 159 00:08:05,920 --> 00:08:09,680 Speaker 4: Well, we good morning all, first of all, and as 160 00:08:09,680 --> 00:08:12,400 Speaker 4: we think about the productivity numbers, it's really kind of 161 00:08:12,440 --> 00:08:15,880 Speaker 4: a snow globe at the moment post polgetic, because we've 162 00:08:15,920 --> 00:08:20,320 Speaker 4: had wild swings in both directions, and so this is 163 00:08:20,360 --> 00:08:24,480 Speaker 4: really a residual measure of economic performance. And I think 164 00:08:24,520 --> 00:08:28,280 Speaker 4: we won't understand the productivity trend until we get to 165 00:08:28,400 --> 00:08:32,000 Speaker 4: more steady state performance in the economy, which I'm optimistic 166 00:08:32,080 --> 00:08:35,640 Speaker 4: that will be the case in twenty twenty four. But 167 00:08:35,920 --> 00:08:39,760 Speaker 4: typically as you have a kind of labor scarcity episodes 168 00:08:39,840 --> 00:08:43,880 Speaker 4: and high wage inflation, that creates the type of capital 169 00:08:43,880 --> 00:08:48,040 Speaker 4: investment which does lead to higher productivity numbers. That being said, 170 00:08:48,080 --> 00:08:52,000 Speaker 4: as we look at forward indicators of capital spending and whatnot. 171 00:08:52,360 --> 00:08:56,120 Speaker 4: They don't look great. Capex intentions look pretty poor for 172 00:08:56,160 --> 00:08:58,839 Speaker 4: the economy at the moment. So there really is kind 173 00:08:58,840 --> 00:09:02,040 Speaker 4: of a two way narrative or two way discussion that 174 00:09:02,080 --> 00:09:04,560 Speaker 4: we'll have to filter through over the course of this year. 175 00:09:04,679 --> 00:09:08,560 Speaker 1: I love, love, love the Rick Adonna snow Globe analog. 176 00:09:08,679 --> 00:09:11,640 Speaker 1: We will steal that and use that, Carl. If that 177 00:09:11,840 --> 00:09:16,000 Speaker 1: is the case, we're a fully employed America. But Paul 178 00:09:16,080 --> 00:09:19,200 Speaker 1: Sweeney and I are getting emails by the hour saying, 179 00:09:19,240 --> 00:09:21,960 Speaker 1: you guys are nuts. How can we have a four 180 00:09:22,040 --> 00:09:25,400 Speaker 1: percent sub four percent unemployment rate and we're getting the 181 00:09:25,440 --> 00:09:26,480 Speaker 1: emails we're getting. 182 00:09:26,520 --> 00:09:27,360 Speaker 5: How does that happen? 183 00:09:29,760 --> 00:09:33,520 Speaker 4: Well, what's interesting if we look at the last jobs report, 184 00:09:33,880 --> 00:09:38,320 Speaker 4: there was some peculiar behavior in labor force participation. Had 185 00:09:38,360 --> 00:09:41,320 Speaker 4: we not seen those moves, the unemployment rate would indeed 186 00:09:41,360 --> 00:09:46,440 Speaker 4: be moving above four percent. So there's definitely a down 187 00:09:46,559 --> 00:09:48,680 Speaker 4: vector on the labor market at the moment. It's been 188 00:09:48,720 --> 00:09:52,880 Speaker 4: pretty steadily decelerating for the last twenty four months really, 189 00:09:53,440 --> 00:09:56,400 Speaker 4: and so this may be creating some perceptions of economic weakness. 190 00:09:56,480 --> 00:09:59,559 Speaker 4: But tying into today's events in New Hampshire and as 191 00:09:59,559 --> 00:10:05,360 Speaker 4: we think about the presidential cycle, there's weak economic sentiment 192 00:10:05,679 --> 00:10:08,680 Speaker 4: from the public. But I think that over the course 193 00:10:08,679 --> 00:10:12,440 Speaker 4: of this year, as it becomes more apparently that inflation 194 00:10:12,640 --> 00:10:15,959 Speaker 4: has moderated and it becomes more apparent that the labor 195 00:10:16,000 --> 00:10:20,120 Speaker 4: market is still on a relatively healthy footing, this economic messaging, 196 00:10:20,200 --> 00:10:25,240 Speaker 4: I think is going to play favorably into incumbent politicians, 197 00:10:25,040 --> 00:10:29,000 Speaker 4: most importantly the top of the ticket. The presidential races 198 00:10:29,080 --> 00:10:33,200 Speaker 4: are very sensitive to economic conditions. Ronald Reagan said it 199 00:10:33,200 --> 00:10:35,560 Speaker 4: in nineteen eighty asking voters, are you better off than 200 00:10:35,600 --> 00:10:39,000 Speaker 4: four years ago? And Bill Clinton also honed in on 201 00:10:39,040 --> 00:10:42,480 Speaker 4: that message in ninety two with his unofficial campaign slogan 202 00:10:42,640 --> 00:10:46,360 Speaker 4: of it's the economy stupid, and I think it's the 203 00:10:46,400 --> 00:10:50,560 Speaker 4: economy is going to resonate with voters, and maybe we 204 00:10:50,600 --> 00:10:55,240 Speaker 4: saw kernels of that in the last Michigan sentiment survey 205 00:10:55,640 --> 00:10:56,080 Speaker 4: as well. 206 00:10:56,400 --> 00:10:58,800 Speaker 3: Hey Carl, what are you? And the good people at 207 00:10:58,840 --> 00:11:01,040 Speaker 3: BNP parabal what are you? Quick're econom a call here 208 00:11:01,040 --> 00:11:04,200 Speaker 3: for twenty four A you in the soft landing camp? 209 00:11:04,200 --> 00:11:04,840 Speaker 6: Where are you guys? 210 00:11:07,080 --> 00:11:09,880 Speaker 4: It's some version of soft landing, So maybe we'll say 211 00:11:09,960 --> 00:11:14,160 Speaker 4: soft ish landing, because when you have the fastest and 212 00:11:14,240 --> 00:11:18,480 Speaker 4: most aggressive fed tightening campaign in four decades. Just to 213 00:11:18,520 --> 00:11:20,640 Speaker 4: think that comes in for a perfect landing, I think 214 00:11:20,679 --> 00:11:24,120 Speaker 4: is maybe a little bit too optimistic. So we are 215 00:11:24,320 --> 00:11:27,800 Speaker 4: cognizant that there will be some tensions here between still 216 00:11:28,200 --> 00:11:32,360 Speaker 4: very restrictive monetary policy, rising real rates in the economy 217 00:11:32,880 --> 00:11:34,920 Speaker 4: at the same time that the labor market and income 218 00:11:34,960 --> 00:11:38,400 Speaker 4: trends are decelerating. So I think it will be a 219 00:11:38,440 --> 00:11:42,120 Speaker 4: bumpier version of soft landing that plays out, but I 220 00:11:42,160 --> 00:11:44,679 Speaker 4: think it will still fall short of what would be 221 00:11:44,720 --> 00:11:47,959 Speaker 4: called a recession by the Business Cycle Dating Committee. So 222 00:11:48,600 --> 00:11:51,160 Speaker 4: all in all, it looks to be a decent year ahead. 223 00:11:51,640 --> 00:11:53,880 Speaker 3: Hey, Carl, we just saw some earnings from some of 224 00:11:53,880 --> 00:11:57,439 Speaker 3: the industrial companies, whether it's General Electric or three AM. 225 00:11:57,480 --> 00:12:00,000 Speaker 3: A little bit of softness there, and we've seen softness 226 00:11:59,920 --> 00:12:04,120 Speaker 3: in the manufacturing economy for many months now. But boy, 227 00:12:04,160 --> 00:12:06,720 Speaker 3: the consumers hanging in there. What's your call on the 228 00:12:06,760 --> 00:12:08,520 Speaker 3: consumer here for the year. 229 00:12:10,240 --> 00:12:12,719 Speaker 4: So the consumers hanging in there, And just to take 230 00:12:12,760 --> 00:12:17,320 Speaker 4: one step back looking at those big industrials, rights, as 231 00:12:17,360 --> 00:12:20,520 Speaker 4: a macroeconomist puts on his equity strategist hat, right, we 232 00:12:20,960 --> 00:12:25,480 Speaker 4: focus on the nominal GDP trend and rather than margins, 233 00:12:25,600 --> 00:12:28,680 Speaker 4: we look at inflation, right, there, they're measuring the same 234 00:12:28,679 --> 00:12:31,640 Speaker 4: thing essentially, and when we think about the twenty twenty 235 00:12:31,640 --> 00:12:34,800 Speaker 4: four outlook, it will be a year where nominal GDP 236 00:12:34,960 --> 00:12:37,840 Speaker 4: is slower than what we've seen in the recent years. 237 00:12:37,960 --> 00:12:41,520 Speaker 4: Doesn't mean it's contracting, but it's definitely decelerating. And also, 238 00:12:41,720 --> 00:12:45,040 Speaker 4: as inflation moderates, that's going to put pressure on corporate margins. 239 00:12:45,040 --> 00:12:48,319 Speaker 4: So if you have slowing top line growth and margin compression, 240 00:12:48,360 --> 00:12:53,119 Speaker 4: that's a challenging year, you know, a challenging outlook for 241 00:12:53,120 --> 00:12:55,679 Speaker 4: for equities. Now, the other side of that is that 242 00:12:55,840 --> 00:12:59,240 Speaker 4: consumers are relatively healthy. We still have a tight labor market, 243 00:12:59,280 --> 00:13:03,120 Speaker 4: we still have a persistent wage pressure. So one way 244 00:13:03,120 --> 00:13:05,480 Speaker 4: to think of that is it delays the fed's rate 245 00:13:05,520 --> 00:13:09,360 Speaker 4: cut plans, but you know, wage pressures are still running. 246 00:13:09,400 --> 00:13:12,520 Speaker 4: It effectively four percent four point six percent is measured 247 00:13:12,520 --> 00:13:16,200 Speaker 4: by the Employment cost Index, and this is, you know, 248 00:13:16,320 --> 00:13:18,120 Speaker 4: bad news for the FED that wants to get quickly 249 00:13:18,160 --> 00:13:21,160 Speaker 4: back to two percent inflation, but it's good news for 250 00:13:21,280 --> 00:13:23,920 Speaker 4: the resilience of consumer activity in a car. 251 00:13:24,280 --> 00:13:27,680 Speaker 1: I use a ten year inflation adjusted yield to real yield, folks, 252 00:13:27,840 --> 00:13:30,240 Speaker 1: is sort of my you know, it's like the Gilbert 253 00:13:30,320 --> 00:13:33,280 Speaker 1: Kem set to correct donated years ago in the basement, 254 00:13:33,760 --> 00:13:36,920 Speaker 1: and I look, Carl, the tenure really yield one point 255 00:13:36,960 --> 00:13:38,920 Speaker 1: eight zero to break out above one point eight six 256 00:13:39,080 --> 00:13:42,720 Speaker 1: is new territory. Are you suggesting a sustained higher real 257 00:13:42,840 --> 00:13:45,720 Speaker 1: yield is where at one point eighty three right now? 258 00:13:47,679 --> 00:13:51,120 Speaker 4: I think if we have a sustained higher real yield, 259 00:13:51,120 --> 00:13:54,439 Speaker 4: that is going to put downward pressure on economic activity. 260 00:13:54,440 --> 00:13:56,360 Speaker 4: And I like to think of it in Fed funds terms. 261 00:13:56,440 --> 00:13:58,000 Speaker 4: So if we take the you know, five and a 262 00:13:58,040 --> 00:14:01,880 Speaker 4: half Fed funds rate, we look what's happening in core inflation. 263 00:14:02,080 --> 00:14:05,520 Speaker 4: Pick your poison, whether you want to look at inflation expectations, 264 00:14:05,640 --> 00:14:08,640 Speaker 4: core CPI, core PC deflator, which we'll get another look 265 00:14:08,679 --> 00:14:12,760 Speaker 4: at this Friday. In that type of measure, it's telling 266 00:14:12,760 --> 00:14:16,679 Speaker 4: you that the policy rate is moving higher and maybe 267 00:14:16,760 --> 00:14:20,360 Speaker 4: too high for kind of a soft landing type of 268 00:14:21,000 --> 00:14:22,960 Speaker 4: play out for the year. And so I think that 269 00:14:23,000 --> 00:14:24,880 Speaker 4: means that there has to be a course correction. I 270 00:14:24,920 --> 00:14:27,160 Speaker 4: don't think at the March meeting, but I think by 271 00:14:27,200 --> 00:14:29,440 Speaker 4: the time the second quarter rolls around, we will have 272 00:14:29,600 --> 00:14:33,600 Speaker 4: more confidence that the economy is moderating, the labor market 273 00:14:33,640 --> 00:14:37,240 Speaker 4: is coming into better balance, inflation pressures have moved lower, 274 00:14:37,320 --> 00:14:40,560 Speaker 4: so they still need to continue pushing on inflation with 275 00:14:41,720 --> 00:14:44,440 Speaker 4: real rates well above our star so at two percent 276 00:14:44,480 --> 00:14:46,600 Speaker 4: real rate. But there will be a time for a 277 00:14:46,720 --> 00:14:49,080 Speaker 4: recalibration around the middle of this year. 278 00:14:49,200 --> 00:14:52,360 Speaker 1: Well, we're our start FREEO on Tuesday, Carlson in short here, 279 00:14:52,400 --> 00:14:55,320 Speaker 1: thank you so much. Carl Rick. Odona is a BNP paradi. 280 00:15:00,080 --> 00:15:02,360 Speaker 1: She did the Gabelli track, that's what we call it here. 281 00:15:02,360 --> 00:15:04,400 Speaker 1: If you go to BC and then Fordham, yep, we 282 00:15:04,480 --> 00:15:05,560 Speaker 1: call that the Mario Gabelli. 283 00:15:05,680 --> 00:15:07,400 Speaker 3: That's a good track. And this is this is a. 284 00:15:07,440 --> 00:15:11,960 Speaker 1: Really important conversation, folks, because she came off the derivatives 285 00:15:12,000 --> 00:15:14,760 Speaker 1: desk at Deutsche Bank and it's socked Gen, which is 286 00:15:14,960 --> 00:15:20,600 Speaker 1: owned European derivatives. Sock Gen invented the math trading gaining 287 00:15:20,680 --> 00:15:24,240 Speaker 1: and losing here on equity derivatives. Sylvia Jablonski joins us 288 00:15:24,240 --> 00:15:27,080 Speaker 1: with Defiance this morning. Sylvia, let me just start out 289 00:15:27,080 --> 00:15:30,760 Speaker 1: with Defiance ETFs. I love your cruise ETF. You know 290 00:15:31,480 --> 00:15:33,960 Speaker 1: it's it's been great. It's a triple leverage all cruise 291 00:15:34,000 --> 00:15:37,600 Speaker 1: ETF love it. But why did you guys choose not 292 00:15:37,720 --> 00:15:39,560 Speaker 1: to do a bitcoin ETF. 293 00:15:39,680 --> 00:15:43,120 Speaker 5: Let's go right there, good, good morning time, Thanks for 294 00:15:43,120 --> 00:15:45,880 Speaker 5: having me. Well, you know, I think it's at ETFs 295 00:15:45,880 --> 00:15:48,440 Speaker 5: A lot of times it's a it's a first movers market, 296 00:15:48,560 --> 00:15:51,880 Speaker 5: and there were a whole lot of first movers yeah here. 297 00:15:52,080 --> 00:15:54,880 Speaker 5: You know, so once you start hearing that black rocks 298 00:15:54,880 --> 00:15:57,000 Speaker 5: in the game, you know you had to great scale 299 00:15:57,000 --> 00:15:59,600 Speaker 5: people converting GBTC. It's just you know, you have to 300 00:15:59,600 --> 00:16:02,080 Speaker 5: make sound business decisions and know where you're going to win. 301 00:16:02,200 --> 00:16:04,440 Speaker 5: But we probably would have to be honest if we 302 00:16:04,440 --> 00:16:07,920 Speaker 5: were had a chance of being first just within the cards. 303 00:16:07,920 --> 00:16:11,360 Speaker 1: For us, we understand price volatility, like in cruises during 304 00:16:11,360 --> 00:16:14,200 Speaker 1: the pandemic. I'm sure your ETF was sport there on 305 00:16:14,240 --> 00:16:16,000 Speaker 1: a day to day basis. What do you make of 306 00:16:16,080 --> 00:16:19,560 Speaker 1: price volatility of bitdog forty nine thousand when I stepped 307 00:16:19,560 --> 00:16:22,360 Speaker 1: into it. Thank you folks that worked out and we're 308 00:16:22,440 --> 00:16:25,520 Speaker 1: enjoying sub forty thousand this morning, thirty eight thousand and 309 00:16:25,600 --> 00:16:28,880 Speaker 1: nine sixty one. What will be the ramifications of that 310 00:16:29,000 --> 00:16:35,160 Speaker 1: price volatility for the billions in bitdog ETFs. 311 00:16:35,760 --> 00:16:38,000 Speaker 5: I like the Bitdog ETFs. I think that a whole 312 00:16:38,040 --> 00:16:39,680 Speaker 5: lot of people are going to buy the bit Dog 313 00:16:39,720 --> 00:16:43,920 Speaker 5: ETFs pretty soon when it falls to that, you know, 314 00:16:44,040 --> 00:16:46,920 Speaker 5: thirty seven thousand, maybe even thirty six thousand level before 315 00:16:46,920 --> 00:16:48,840 Speaker 5: it starts to rally up. I think this is kind 316 00:16:48,840 --> 00:16:51,160 Speaker 5: of a classic sell the news thing. And you know, 317 00:16:51,240 --> 00:16:53,960 Speaker 5: the thing with these bitcoin ETFs and bitcoin in general, 318 00:16:54,200 --> 00:16:55,960 Speaker 5: you have a lot of people that actually believe in 319 00:16:56,000 --> 00:16:58,160 Speaker 5: the thesis of the product and that you know, it 320 00:16:58,240 --> 00:17:00,880 Speaker 5: will be digital gold, that there's a place for it 321 00:17:00,920 --> 00:17:03,800 Speaker 5: in a portfolio. And if you see these institutions actually 322 00:17:03,880 --> 00:17:06,359 Speaker 5: allocating that one to two percent, just give it, you know, 323 00:17:06,440 --> 00:17:09,399 Speaker 5: give it a go and invest on that thesis. Plus 324 00:17:09,400 --> 00:17:11,640 Speaker 5: the people who just invest because they think a whole 325 00:17:11,680 --> 00:17:12,879 Speaker 5: lot of people are going to buy it and the 326 00:17:12,920 --> 00:17:14,880 Speaker 5: price is going to go up, but have no conviction 327 00:17:15,040 --> 00:17:17,639 Speaker 5: on it. You know, you can see that bitcoin is 328 00:17:17,680 --> 00:17:20,640 Speaker 5: going to get some tailwind here in the future because 329 00:17:20,680 --> 00:17:23,560 Speaker 5: of these ETFs. If you look at the ETF filings, 330 00:17:23,880 --> 00:17:25,720 Speaker 5: there are so many of them out there now for 331 00:17:25,840 --> 00:17:29,159 Speaker 5: covered call strategies, for put right strategies and things like this. 332 00:17:29,320 --> 00:17:31,239 Speaker 5: So you know, just the sheer amount of volume of 333 00:17:31,320 --> 00:17:33,560 Speaker 5: stuff that comes in and the amount of people that 334 00:17:33,600 --> 00:17:35,120 Speaker 5: are willing to give it a. 335 00:17:35,080 --> 00:17:35,840 Speaker 6: Try and buy it. 336 00:17:35,920 --> 00:17:37,000 Speaker 5: I think we'll move the price. 337 00:17:37,119 --> 00:17:40,119 Speaker 1: It's inside baseball. Jabloski's all jargon. I mean there, but 338 00:17:40,200 --> 00:17:43,720 Speaker 1: can you imagine it covered right now? God, I can't 339 00:17:43,760 --> 00:17:47,119 Speaker 1: imagine framing out a covered right to bring in premium 340 00:17:47,400 --> 00:17:48,880 Speaker 1: on bitcoin. I just can't go there. 341 00:17:48,960 --> 00:17:51,000 Speaker 6: But I know a lot of people are and either 342 00:17:51,119 --> 00:17:53,159 Speaker 6: or not because we looked at this that you'd be 343 00:17:53,240 --> 00:17:56,320 Speaker 6: surprised the actual you know, the actual kind of juiced 344 00:17:56,320 --> 00:17:59,680 Speaker 6: inness is less there we go than like a vix 345 00:18:00,200 --> 00:18:01,160 Speaker 6: It's really surprising. 346 00:18:01,160 --> 00:18:03,280 Speaker 5: It's kind of surprisingly boring, to be honest. I don't 347 00:18:03,280 --> 00:18:05,760 Speaker 5: know how it'll change our time, but there's not as 348 00:18:05,840 --> 00:18:07,120 Speaker 5: much juice in there as you think. 349 00:18:07,280 --> 00:18:09,240 Speaker 1: And what's great about this is the way you learn 350 00:18:09,240 --> 00:18:11,600 Speaker 1: about Jews. You don't learn that like in CFA one 351 00:18:11,640 --> 00:18:15,480 Speaker 1: oh one. You learn a Marianne Boston and you're going 352 00:18:15,480 --> 00:18:16,719 Speaker 1: to Boston College. 353 00:18:16,920 --> 00:18:17,880 Speaker 7: So Soviet. 354 00:18:18,040 --> 00:18:20,280 Speaker 3: I mean, I've just been blown away really over the 355 00:18:20,359 --> 00:18:23,240 Speaker 3: last ten fifteen years in the growth of the ETF business. 356 00:18:23,240 --> 00:18:26,000 Speaker 3: It's just been extraordinary. And the more you learn about it, 357 00:18:26,040 --> 00:18:28,280 Speaker 3: the more sense it makes. And we have some good 358 00:18:28,280 --> 00:18:31,080 Speaker 3: folks here Bloomberg got are really following the ETF business. 359 00:18:31,800 --> 00:18:34,960 Speaker 3: Where do we go next, what's the what's the next 360 00:18:35,000 --> 00:18:40,360 Speaker 3: area of growth? For etfscuse the fun flows there just extraordinary. 361 00:18:40,480 --> 00:18:42,159 Speaker 5: Yeah, the fun flows are back. I think, you know, 362 00:18:42,320 --> 00:18:45,920 Speaker 5: post twenty twenty two, like everything else. ETF sixteen of recovery. 363 00:18:46,000 --> 00:18:48,560 Speaker 5: You've seen you know, the majority of inflows this year, 364 00:18:49,119 --> 00:18:51,639 Speaker 5: and I think a lot of the kind of you know, 365 00:18:51,960 --> 00:18:55,359 Speaker 5: kitchy mean types of products have now been closed and 366 00:18:55,440 --> 00:18:57,280 Speaker 5: kind of filtered out, and now what you have out 367 00:18:57,280 --> 00:18:59,800 Speaker 5: there are the classic ETF products. You have some good 368 00:19:00,440 --> 00:19:03,360 Speaker 5: and invest in things like AI and you know, supercomputing 369 00:19:03,440 --> 00:19:05,280 Speaker 5: things like that. We do a lot of that. But 370 00:19:05,440 --> 00:19:07,320 Speaker 5: the next, you know, the next kind of hurrah for 371 00:19:07,440 --> 00:19:10,760 Speaker 5: ETF seems to be using options to do different things. 372 00:19:10,800 --> 00:19:13,320 Speaker 5: So whether it's to generate income, you know, there's been 373 00:19:13,359 --> 00:19:15,639 Speaker 5: a huge growth and covered call strategies, there's been a 374 00:19:15,720 --> 00:19:19,520 Speaker 5: huge growth in put right strategies to generate income. You've 375 00:19:19,520 --> 00:19:22,560 Speaker 5: seen a lot of flows there and you've also seen 376 00:19:22,760 --> 00:19:25,439 Speaker 5: you know, different issuers doing creative things with leverage. You're 377 00:19:25,480 --> 00:19:28,080 Speaker 5: starting to see four beta you know, four x daily 378 00:19:28,480 --> 00:19:31,920 Speaker 5: rebalanced products, single stock products, and I think that there's 379 00:19:31,960 --> 00:19:34,480 Speaker 5: appetite there. I mean, billions of dollars have flown into it, 380 00:19:34,520 --> 00:19:36,960 Speaker 5: so it's it's hard to say there isn't. And I 381 00:19:36,960 --> 00:19:39,639 Speaker 5: think using the option structure to generate income will be 382 00:19:39,640 --> 00:19:40,880 Speaker 5: a big theme this year. 383 00:19:41,240 --> 00:19:43,320 Speaker 3: You know, Sylvia, I you know, when I first started learning, 384 00:19:43,359 --> 00:19:45,120 Speaker 3: and I think a lot of people learning about ETFs, 385 00:19:45,160 --> 00:19:47,320 Speaker 3: it was the whole passive thing y s and P 386 00:19:47,520 --> 00:19:50,680 Speaker 3: five hundred type of thing, and I got that JET 387 00:19:50,720 --> 00:19:54,400 Speaker 3: would allow you to operate a really low cost structure 388 00:19:54,480 --> 00:19:57,200 Speaker 3: type of rapper here. But then you guys introduced you 389 00:19:57,240 --> 00:19:59,919 Speaker 3: guys being ETF industry introduced active ets and that's kind 390 00:19:59,920 --> 00:20:02,159 Speaker 3: of or you lost me here. So is the cost 391 00:20:03,000 --> 00:20:07,240 Speaker 3: advantage to an active ETF that much better than you know, 392 00:20:07,280 --> 00:20:09,359 Speaker 3: walking down the street and getting a FID outing mutual fund. 393 00:20:11,040 --> 00:20:12,879 Speaker 5: Well, it depends on the fun right. I mean, mutual 394 00:20:12,880 --> 00:20:16,120 Speaker 5: funds were sort of historically classically expensive. Some of them 395 00:20:16,119 --> 00:20:19,080 Speaker 5: have cut their fees because of what ETFs have done. 396 00:20:19,359 --> 00:20:21,679 Speaker 5: And it depends on the performance, right. I think on 397 00:20:21,720 --> 00:20:24,720 Speaker 5: a lot of these active ETFs, if you're getting you know, 398 00:20:24,800 --> 00:20:27,720 Speaker 5: twenty forty sixty percent returns, you don't really care that 399 00:20:27,760 --> 00:20:30,880 Speaker 5: you're paying one percent, which is arguably on the high 400 00:20:30,960 --> 00:20:33,679 Speaker 5: side for ETFs, right, So it's all about what the 401 00:20:33,720 --> 00:20:37,560 Speaker 5: ETF actually delivers. And then ETFs are just but you know, 402 00:20:37,560 --> 00:20:39,600 Speaker 5: they're just better. I mean they are they are a 403 00:20:39,640 --> 00:20:41,800 Speaker 5: better mousetrape. You can buy and sell them all day long. 404 00:20:42,240 --> 00:20:44,080 Speaker 5: You know, you can arbitrage them. You can go to 405 00:20:44,119 --> 00:20:46,679 Speaker 5: a market maker, you know, get filled that nav. I mean, 406 00:20:46,680 --> 00:20:47,760 Speaker 5: they're just a better product. 407 00:20:48,240 --> 00:20:51,040 Speaker 1: Sylvia question off the market. This goes to SoC Gen. 408 00:20:51,080 --> 00:20:53,040 Speaker 1: I spent a lot of time with SoC Gen animals 409 00:20:53,040 --> 00:20:55,560 Speaker 1: in London. There was a Cuban there's a Cuban cigar 410 00:20:55,640 --> 00:20:59,400 Speaker 1: bar and warder Stream, which is basically the cafeteria for 411 00:20:59,440 --> 00:21:01,840 Speaker 1: SoC Gen. This is a few This is before Sylvia's 412 00:21:01,840 --> 00:21:04,159 Speaker 1: said she's too young to remember this, but you know 413 00:21:04,200 --> 00:21:07,439 Speaker 1: it's Satcha and you guys are pros it trying to 414 00:21:07,480 --> 00:21:10,280 Speaker 1: figure out where the shadows are and leverage right now, 415 00:21:10,600 --> 00:21:13,399 Speaker 1: away from Defiance and your great work there, what do 416 00:21:13,400 --> 00:21:16,359 Speaker 1: you worry about within the shadows of the derivative space 417 00:21:16,480 --> 00:21:19,720 Speaker 1: right now? The leveraging up the notion? What what's the 418 00:21:19,760 --> 00:21:23,320 Speaker 1: shadow out there that concerns you? 419 00:21:23,320 --> 00:21:26,920 Speaker 5: You know, I think if the in terms of the 420 00:21:26,960 --> 00:21:29,400 Speaker 5: structure of those products, you know, I think that they've 421 00:21:29,400 --> 00:21:32,080 Speaker 5: become kind of more stable and safe. I was actually 422 00:21:32,480 --> 00:21:36,600 Speaker 5: at SoC Gen, you know, shortly around the time that 423 00:21:37,600 --> 00:21:39,159 Speaker 5: you had the leam and crashing things like that. I 424 00:21:39,200 --> 00:21:40,719 Speaker 5: was working on the swaps desk when all of that 425 00:21:40,800 --> 00:21:42,919 Speaker 5: was going on, So that was you know, that was 426 00:21:42,920 --> 00:21:44,679 Speaker 5: eye opening, right, And people learn that you kind of 427 00:21:44,720 --> 00:21:48,000 Speaker 5: have to have a third party holding the overnight collateral. 428 00:21:48,920 --> 00:21:51,040 Speaker 5: You have to have you know a lot of kind 429 00:21:51,080 --> 00:21:54,920 Speaker 5: of like good Monte Carlo simulation before you take certain 430 00:21:54,960 --> 00:21:57,240 Speaker 5: things on and swap and things like this. So I 431 00:21:57,280 --> 00:22:00,280 Speaker 5: think that the risk standards are a lot higher. I think, 432 00:22:00,440 --> 00:22:03,679 Speaker 5: you know, having having actual cash and physical funds at 433 00:22:03,680 --> 00:22:06,159 Speaker 5: a third party matters. I worry more about the client. 434 00:22:06,200 --> 00:22:07,960 Speaker 5: You know, if you get a big market move and 435 00:22:08,119 --> 00:22:09,879 Speaker 5: you have a four X product, I mean you gompe 436 00:22:09,880 --> 00:22:12,560 Speaker 5: bout the fund in a day, right, But all of 437 00:22:12,640 --> 00:22:18,000 Speaker 5: us yeah, I mean, you know, so I haven't actually 438 00:22:18,040 --> 00:22:19,560 Speaker 5: seen that. I spend a lot of time at Direction 439 00:22:19,680 --> 00:22:22,200 Speaker 5: the three X you know place too. And even during 440 00:22:22,280 --> 00:22:25,040 Speaker 5: COVID when we had these massive moves, the company itself 441 00:22:25,080 --> 00:22:27,040 Speaker 5: took the leverage point from three to two to kind 442 00:22:27,080 --> 00:22:30,760 Speaker 5: of protect the protect people from themselves really and and 443 00:22:31,000 --> 00:22:32,720 Speaker 5: you know, the volcility and things like that, and so 444 00:22:32,800 --> 00:22:33,840 Speaker 5: you hope companies do that. 445 00:22:34,040 --> 00:22:35,360 Speaker 2: But yeah, that's the risk. 446 00:22:35,760 --> 00:22:40,080 Speaker 1: This is you hugely, hugely valuable. She's a defiance ETF 447 00:22:40,200 --> 00:22:53,520 Speaker 1: Sylvia Jablanski with US joining US no op tech wizards 448 00:22:53,520 --> 00:22:57,800 Speaker 1: who figured out YouTube decades ago. Gene Munster joins US 449 00:22:57,840 --> 00:23:00,879 Speaker 1: co founder deep Water Asset Management, Gane I've got like 450 00:23:01,000 --> 00:23:03,520 Speaker 1: eight ways to go. Let's start at sixty thousand feet. 451 00:23:04,240 --> 00:23:06,680 Speaker 1: I'm in the theme that if any broke, don't fix it. 452 00:23:06,800 --> 00:23:11,680 Speaker 1: The Magnificent seven had a magnificent twenty twenty three. I 453 00:23:11,840 --> 00:23:14,600 Speaker 1: just don't buy the idea it ends. Will it continue 454 00:23:14,760 --> 00:23:15,760 Speaker 1: into this year and. 455 00:23:15,840 --> 00:23:20,879 Speaker 7: Next for the year, I think it absolutely will. And 456 00:23:21,200 --> 00:23:24,080 Speaker 7: what we're seeing as a gravitational pull when it comes 457 00:23:24,160 --> 00:23:29,040 Speaker 7: to the AI opportunity with Magnificent seven and also what 458 00:23:29,160 --> 00:23:32,480 Speaker 7: I would call the Ordained fifteen, which are the private 459 00:23:32,720 --> 00:23:37,080 Speaker 7: late stage AI companies, and I think that's where all 460 00:23:37,160 --> 00:23:38,880 Speaker 7: the traction is going to happen. I would say, there's 461 00:23:38,880 --> 00:23:40,879 Speaker 7: a mag seven on the public side, there's also going 462 00:23:40,960 --> 00:23:44,560 Speaker 7: to be this Magnificent seven or ten on the private side. 463 00:23:44,600 --> 00:23:47,000 Speaker 7: But yes, Tom, I think it's going to continue, I 464 00:23:47,080 --> 00:23:51,040 Speaker 7: would caution, and continue for the year. I would caution 465 00:23:51,760 --> 00:23:54,920 Speaker 7: this earnings period is going to be a lot of intensity, 466 00:23:54,960 --> 00:23:58,879 Speaker 7: a lot of focus from investors related to commentary about 467 00:23:59,200 --> 00:24:02,760 Speaker 7: AI contribution in twenty twenty four. I think that is 468 00:24:02,840 --> 00:24:05,840 Speaker 7: the a topic that's going to orbit around the mag 469 00:24:06,000 --> 00:24:09,080 Speaker 7: seven for this earnings period, and I suspect that the 470 00:24:09,200 --> 00:24:13,440 Speaker 7: commentary is going to be relatively muted, or the commentary 471 00:24:13,480 --> 00:24:16,879 Speaker 7: will be we expect some contribution the good news, so 472 00:24:16,960 --> 00:24:19,400 Speaker 7: I think that that could cause a new term pause 473 00:24:19,440 --> 00:24:21,520 Speaker 7: in some of these stocks. I think the good news 474 00:24:21,640 --> 00:24:24,159 Speaker 7: for a lot of these for the companies, if you 475 00:24:24,200 --> 00:24:27,440 Speaker 7: look at the estimates for the December quarter for the 476 00:24:27,520 --> 00:24:29,640 Speaker 7: growth rates and then for the full year of twenty 477 00:24:29,760 --> 00:24:33,520 Speaker 7: twenty four, December twenty three and twenty twenty four, analysts 478 00:24:33,560 --> 00:24:38,960 Speaker 7: aren't really expecting much contribution from AI. I think psychologically 479 00:24:39,480 --> 00:24:41,960 Speaker 7: it's a bigger topic than it is relative to the numbers. 480 00:24:42,000 --> 00:24:43,919 Speaker 7: But I just I think that these companies are going 481 00:24:44,000 --> 00:24:44,880 Speaker 7: to continue to do well. 482 00:24:45,280 --> 00:24:45,520 Speaker 1: I do. 483 00:24:47,160 --> 00:24:50,399 Speaker 7: Anticipate this earnings period to be mixed in terms of 484 00:24:50,480 --> 00:24:51,160 Speaker 7: the stock reaction. 485 00:24:51,400 --> 00:24:55,040 Speaker 1: Early Gene Monster monsters so large. There's early gene Monster, 486 00:24:55,160 --> 00:24:58,040 Speaker 1: middle Gene Monster, and later Gene Monster. Early Gene Monster 487 00:24:58,600 --> 00:25:01,119 Speaker 1: was fourteen page or some pipe Jeffrey which came in 488 00:25:01,160 --> 00:25:03,320 Speaker 1: at four pm and you had to read it by 489 00:25:03,400 --> 00:25:06,240 Speaker 1: dinner you couldn't focus. And in the back of it, 490 00:25:06,400 --> 00:25:09,560 Speaker 1: he always had these brilliant some of the parts analysis 491 00:25:09,840 --> 00:25:13,040 Speaker 1: gene Monster for the Magnificent seven, for Apple and Microsoft 492 00:25:13,400 --> 00:25:15,960 Speaker 1: in particular. Whats the sum of the parts look like 493 00:25:16,119 --> 00:25:16,439 Speaker 1: right now? 494 00:25:19,000 --> 00:25:21,399 Speaker 7: Well, there's some of the parts. It's ultimately when you 495 00:25:21,440 --> 00:25:25,359 Speaker 7: think about Apple, it's about services, it's about from you 496 00:25:25,440 --> 00:25:26,920 Speaker 7: put all this together, I think it's better than a 497 00:25:26,960 --> 00:25:30,600 Speaker 7: three trillion dollar company. I think the iPhone business today 498 00:25:30,640 --> 00:25:33,440 Speaker 7: it's just over half of their total revenue. I think 499 00:25:33,480 --> 00:25:37,200 Speaker 7: in aggregate that should be should trade at essentially a 500 00:25:37,280 --> 00:25:40,920 Speaker 7: thirty five multiple. I think that multiple is justified given 501 00:25:41,480 --> 00:25:44,400 Speaker 7: even though it doesn't grow much. I think it's justified 502 00:25:44,440 --> 00:25:47,920 Speaker 7: because these devices have become substance to our life. We 503 00:25:48,080 --> 00:25:50,920 Speaker 7: can't live without these Basically half the people in the 504 00:25:51,000 --> 00:25:53,680 Speaker 7: US can't live without these devices. And so I think 505 00:25:53,760 --> 00:25:55,800 Speaker 7: that you put this together, I think this is a 506 00:25:55,960 --> 00:25:58,920 Speaker 7: three plus trillion dollar company. I think that there is 507 00:25:58,920 --> 00:26:01,360 Speaker 7: a lot of uncertainty related to Apple at this time. 508 00:26:01,440 --> 00:26:04,800 Speaker 7: I haven't I haven't recalled a time in Apple's history 509 00:26:04,840 --> 00:26:08,680 Speaker 7: when there's been as much concern really going into this 510 00:26:09,160 --> 00:26:11,920 Speaker 7: to a quarter, there's concern about the iPhone demand. He's 511 00:26:12,000 --> 00:26:14,359 Speaker 7: concerned about some of the delays that they've had or 512 00:26:14,400 --> 00:26:16,600 Speaker 7: taking some of that watch aff off the table because 513 00:26:16,640 --> 00:26:20,360 Speaker 7: of the blood oxygen monitoring. And there's also some concerns 514 00:26:20,359 --> 00:26:24,040 Speaker 7: related to how their app store policies are changing, specifically 515 00:26:24,119 --> 00:26:26,680 Speaker 7: related to steering in the impact on the app store revenue. 516 00:26:27,040 --> 00:26:29,880 Speaker 7: But I think that I think that you know when 517 00:26:29,880 --> 00:26:32,560 Speaker 7: you when you course these out, I think that this 518 00:26:32,720 --> 00:26:35,800 Speaker 7: is a three plus trillion dollar company. And when it 519 00:26:35,840 --> 00:26:38,960 Speaker 7: comes to Microsoft, from some of the parts, there's two 520 00:26:39,040 --> 00:26:42,679 Speaker 7: basic parts to it. There's their cloud business. That business 521 00:26:42,720 --> 00:26:46,480 Speaker 7: say they have twenty two percent market share. Microsoft in 522 00:26:46,520 --> 00:26:49,720 Speaker 7: total is of two hundred and twenty billion dollar revenue company. 523 00:26:50,000 --> 00:26:52,720 Speaker 7: It's going to grow about fifteen percent this year. But 524 00:26:52,960 --> 00:26:55,720 Speaker 7: as you think about and aggregate, their cloud business is 525 00:26:56,200 --> 00:26:59,359 Speaker 7: worth even though it's called fifteen percent of total revenue, 526 00:26:59,640 --> 00:27:02,600 Speaker 7: given the profitability, it's thirty plus percent of the valuation. 527 00:27:03,240 --> 00:27:06,560 Speaker 7: The biggest lever when it comes to Microsoft over the 528 00:27:06,600 --> 00:27:08,120 Speaker 7: next year in terms of the some of the parts 529 00:27:08,200 --> 00:27:11,520 Speaker 7: is related to what's going on with the upside and 530 00:27:11,920 --> 00:27:18,119 Speaker 7: uptake with Microsoft their copilot and office that contribution, so 531 00:27:18,359 --> 00:27:20,840 Speaker 7: they of course have raised the price call going from 532 00:27:20,880 --> 00:27:24,080 Speaker 7: fifteen to thirty dollars a month that started back in November. 533 00:27:24,440 --> 00:27:28,840 Speaker 7: There's about three hundred and fifty million office office users, 534 00:27:29,760 --> 00:27:33,760 Speaker 7: so the office business today is about a sixty five 535 00:27:33,840 --> 00:27:36,800 Speaker 7: million dollar business. Of that two hundred and twenty total 536 00:27:36,960 --> 00:27:40,080 Speaker 7: in revenue, But you could build a case if ten 537 00:27:40,280 --> 00:27:42,719 Speaker 7: if a third of those people pay up for colpile, 538 00:27:42,760 --> 00:27:45,440 Speaker 7: which I think is conservative, you know that that can 539 00:27:45,520 --> 00:27:48,640 Speaker 7: increase revenue by ten percent. And that's probably the biggest 540 00:27:49,000 --> 00:27:51,280 Speaker 7: sum of the parts. Lever when it comes to Microsoft 541 00:27:51,440 --> 00:27:54,000 Speaker 7: is what the uptake is going to be. They haven't 542 00:27:54,000 --> 00:27:57,200 Speaker 7: broken out what those numbers have been. As I mentioned, 543 00:27:57,280 --> 00:27:59,879 Speaker 7: it's started in November. All they've said is that they 544 00:28:00,040 --> 00:28:04,480 Speaker 7: know they've had a positive reception from their early corporate 545 00:28:04,600 --> 00:28:07,359 Speaker 7: beta testers with this coal Pilot, and I suspect this 546 00:28:07,480 --> 00:28:08,760 Speaker 7: is going to be a hit product that's going to 547 00:28:08,800 --> 00:28:11,640 Speaker 7: help you compose emails, help you do powerpoints. 548 00:28:13,119 --> 00:28:13,639 Speaker 3: Exactly. 549 00:28:13,760 --> 00:28:15,280 Speaker 7: Yeah, taxes potentially. 550 00:28:16,040 --> 00:28:18,520 Speaker 1: So you thought that was funny, Lisa, Yeah, you want 551 00:28:18,560 --> 00:28:21,600 Speaker 1: to jump in here. What would you use co pilot for, Lisa, mateo. 552 00:28:21,760 --> 00:28:23,879 Speaker 2: Let's see, I know what my kids would use it. 553 00:28:23,960 --> 00:28:26,879 Speaker 7: For help with the homework. 554 00:28:27,760 --> 00:28:29,879 Speaker 3: Of course, we're talking to Gene Monster managing partner and 555 00:28:29,960 --> 00:28:32,200 Speaker 3: co founder deep Water Asset Management. 556 00:28:32,440 --> 00:28:32,960 Speaker 4: Hey, Gene, I. 557 00:28:32,960 --> 00:28:35,240 Speaker 3: Think you know that in twenty twenty three, not just 558 00:28:35,359 --> 00:28:37,480 Speaker 3: in tech, but for the whole stock market, AI was 559 00:28:37,520 --> 00:28:40,360 Speaker 3: such a driver of positive sentiment, and I think what 560 00:28:40,480 --> 00:28:43,000 Speaker 3: a lot of investors who are pulling away and just saying, 561 00:28:43,240 --> 00:28:44,920 Speaker 3: let me just take a look at this AI story. 562 00:28:45,280 --> 00:28:47,480 Speaker 3: And the question I hear most often is how much 563 00:28:47,520 --> 00:28:50,480 Speaker 3: of this spending across tech over the next several years 564 00:28:51,320 --> 00:28:55,400 Speaker 3: for AI will be actually incremental to what was already 565 00:28:55,440 --> 00:28:58,040 Speaker 3: kind of a base case for tech spending in general. 566 00:28:58,040 --> 00:28:59,440 Speaker 3: Do you have an idea how that might look? 567 00:29:00,960 --> 00:29:04,280 Speaker 7: So, yes, the answer is that it's it's a substantial 568 00:29:04,320 --> 00:29:08,240 Speaker 7: amount the twenty to twenty to thirty percent range. Meta 569 00:29:08,480 --> 00:29:11,200 Speaker 7: last week had some commentary about what their spend is 570 00:29:11,280 --> 00:29:14,200 Speaker 7: going to be on GPUs and if you look at 571 00:29:14,240 --> 00:29:17,320 Speaker 7: what their baseline spend was before they announced that, it's 572 00:29:17,360 --> 00:29:20,480 Speaker 7: a thirty percent increase and spend is these you know, 573 00:29:20,560 --> 00:29:23,360 Speaker 7: there was this talk about pause in AI last summer. 574 00:29:23,440 --> 00:29:25,720 Speaker 7: There was this letter that went around that a bunch 575 00:29:25,760 --> 00:29:29,480 Speaker 7: of people, including ironically Elon, must signed and there has 576 00:29:29,560 --> 00:29:32,840 Speaker 7: been no pause. Is that this has been these companies 577 00:29:32,920 --> 00:29:36,320 Speaker 7: continue to aggressively go after this, and I think that 578 00:29:36,520 --> 00:29:39,480 Speaker 7: that is one of the I think one of the 579 00:29:39,560 --> 00:29:42,000 Speaker 7: clearest signs how much investment is going on from these 580 00:29:42,040 --> 00:29:46,240 Speaker 7: companies that this AI, that the AI substance is ultimately 581 00:29:46,320 --> 00:29:49,920 Speaker 7: going to exceed the hype. It may take several years 582 00:29:50,000 --> 00:29:54,080 Speaker 7: to get there, but yes, there the infrastructure spend is remarkable, 583 00:29:54,800 --> 00:29:58,280 Speaker 7: especially with the Magnificent seven. And of course that infrastructure 584 00:29:58,360 --> 00:30:02,080 Speaker 7: spend helps a lot of companies, many companies, potentially most 585 00:30:02,160 --> 00:30:05,520 Speaker 7: companies to enable AI in their products in the years 586 00:30:05,560 --> 00:30:05,840 Speaker 7: to come. 587 00:30:06,280 --> 00:30:07,840 Speaker 3: Hey, Gene, one of the things that I think some 588 00:30:08,000 --> 00:30:10,320 Speaker 3: investors are waiting for when you think about AI is 589 00:30:10,360 --> 00:30:13,920 Speaker 3: that defining IPO. Like maybe Google was a defining IPO 590 00:30:14,000 --> 00:30:17,320 Speaker 3: for the search business, Facebook was the defining IPO for 591 00:30:18,440 --> 00:30:21,360 Speaker 3: the social media business. And you mentioned some private companies. 592 00:30:21,440 --> 00:30:23,239 Speaker 3: Do you see something like that in the next year 593 00:30:23,320 --> 00:30:25,360 Speaker 3: or two of a company or a group of companies 594 00:30:25,440 --> 00:30:29,360 Speaker 3: that say, wow, AI has really arrived as a standalone 595 00:30:29,600 --> 00:30:31,240 Speaker 3: kind of investment opportunity. 596 00:30:32,680 --> 00:30:35,880 Speaker 7: Absolutely, I think that's going to be the next leading class. 597 00:30:35,920 --> 00:30:38,040 Speaker 7: I think it's probably two to three years away. But 598 00:30:38,160 --> 00:30:40,640 Speaker 7: I think that that you know, these companies that are 599 00:30:40,680 --> 00:30:43,120 Speaker 7: AI first companies, so we look at the Magnificent seven. 600 00:30:43,200 --> 00:30:46,240 Speaker 7: I talked about the upside related to copile at Microsoft 601 00:30:46,360 --> 00:30:49,120 Speaker 7: and saying that that could add ten percent to their revenue. Well, 602 00:30:49,160 --> 00:30:52,120 Speaker 7: these companies that are AI peer plays, they're growing at 603 00:30:52,120 --> 00:30:56,080 Speaker 7: three hundred percent off small bases, but approaching more than 604 00:30:56,120 --> 00:30:58,560 Speaker 7: a billion in revenue some of them. And I think 605 00:30:58,640 --> 00:31:01,440 Speaker 7: that these AI peer plays, there will be this moment 606 00:31:01,880 --> 00:31:04,120 Speaker 7: ultimately when you put it together at deep Water, we 607 00:31:04,200 --> 00:31:06,440 Speaker 7: think we are going to enter an AI bubble in 608 00:31:06,480 --> 00:31:08,160 Speaker 7: the next three to five years. We don't think we're 609 00:31:08,160 --> 00:31:10,720 Speaker 7: anything close to it right now. We put this in 610 00:31:11,880 --> 00:31:15,000 Speaker 7: and put we think we're in like nineteen ninety five 611 00:31:15,480 --> 00:31:17,360 Speaker 7: and we still have five more years to go before 612 00:31:17,400 --> 00:31:19,440 Speaker 7: this really escalates. But I think that's going to be 613 00:31:19,880 --> 00:31:23,720 Speaker 7: one of those moments where it really gets some excitement 614 00:31:23,760 --> 00:31:26,000 Speaker 7: in the market once we get some of these IPOs 615 00:31:26,040 --> 00:31:28,520 Speaker 7: and who are they? You know it could be open 616 00:31:28,600 --> 00:31:35,080 Speaker 7: AI data Bricks is one hugging face. Those are mid journey. 617 00:31:35,200 --> 00:31:38,160 Speaker 7: Those are kind of the four most obvious ones that 618 00:31:38,240 --> 00:31:38,960 Speaker 7: would be published. 619 00:31:38,960 --> 00:31:41,440 Speaker 1: That's a secret world of gene Monster there Gane. The 620 00:31:41,560 --> 00:31:46,160 Speaker 1: fact of the matter is, mister Nadella is firing on 621 00:31:46,280 --> 00:31:50,040 Speaker 1: all cylinders. You mentioned co pilot and all the applications 622 00:31:50,040 --> 00:31:52,880 Speaker 1: that we're seeing of actual money coming in twenty dollars 623 00:31:52,960 --> 00:31:56,400 Speaker 1: a person, ten dollars, thirty dollars a person, and I'm 624 00:31:56,520 --> 00:31:59,600 Speaker 1: enjoying a thirty eight multiple, and maybe my monster guestimate 625 00:31:59,680 --> 00:32:03,680 Speaker 1: four squeezes down to a thirty five multiple. What do 626 00:32:03,760 --> 00:32:06,280 Speaker 1: you do with a tech stock when all the good 627 00:32:06,360 --> 00:32:09,000 Speaker 1: news is in, like in Microsoft right now. 628 00:32:11,080 --> 00:32:13,880 Speaker 7: Well, if your view is that all the good news 629 00:32:14,000 --> 00:32:17,040 Speaker 7: is in, you probably sell it. And I think in 630 00:32:17,120 --> 00:32:19,920 Speaker 7: the case of you know that you know owning, that 631 00:32:20,080 --> 00:32:23,080 Speaker 7: is a great way to build wealth, is to own 632 00:32:23,160 --> 00:32:25,960 Speaker 7: and have people agree with you later. And if you 633 00:32:26,480 --> 00:32:28,959 Speaker 7: there's generally a consensus that the good times are going 634 00:32:29,000 --> 00:32:31,520 Speaker 7: to continue for these large companies, and so I think 635 00:32:31,560 --> 00:32:33,320 Speaker 7: that if you have a view that maybe this is 636 00:32:33,360 --> 00:32:35,240 Speaker 7: as good as it gets, that this is absolutely the 637 00:32:35,280 --> 00:32:38,000 Speaker 7: time to sell because you'll get multiple compression. I of 638 00:32:38,080 --> 00:32:41,560 Speaker 7: course don't believe that that's the case, and I just 639 00:32:41,640 --> 00:32:44,480 Speaker 7: want to put one put some a little bit of 640 00:32:44,560 --> 00:32:46,760 Speaker 7: perspective on that in terms of, you know, how on 641 00:32:46,920 --> 00:32:51,440 Speaker 7: Earth I really strive to be level headed when it 642 00:32:51,480 --> 00:32:54,760 Speaker 7: comes to these tech trends and making sure that I'm 643 00:32:54,800 --> 00:32:57,440 Speaker 7: not getting carried away. Yeah, and some of the overall 644 00:32:57,520 --> 00:33:00,720 Speaker 7: hype on it. And when I think of A I'm 645 00:33:00,760 --> 00:33:03,680 Speaker 7: in the camp that electricity is one hundred, the mobile 646 00:33:03,680 --> 00:33:06,400 Speaker 7: phones of twenty five in terms of scale of importance, 647 00:33:06,520 --> 00:33:09,320 Speaker 7: the Internet's of fifteen. I think AI is probably a ninety. 648 00:33:09,360 --> 00:33:14,880 Speaker 7: I think this is ultimately wow. And if in fact 649 00:33:15,600 --> 00:33:18,640 Speaker 7: that ends up playing out, then we really haven't seen. 650 00:33:18,920 --> 00:33:22,920 Speaker 7: I'll give you another example is that we were buying 651 00:33:23,120 --> 00:33:25,400 Speaker 7: Meta over the last couple of years and it's done 652 00:33:25,440 --> 00:33:28,240 Speaker 7: well recently, and we debated about internally about should we 653 00:33:28,320 --> 00:33:30,520 Speaker 7: use this a stock that we should sell ted a 654 00:33:30,560 --> 00:33:32,760 Speaker 7: good run, let's take our money and go other places. 655 00:33:32,840 --> 00:33:35,480 Speaker 7: But then we just thought more about the impact that 656 00:33:35,680 --> 00:33:37,280 Speaker 7: I was going to have in their business, and it 657 00:33:37,480 --> 00:33:39,760 Speaker 7: just felt like this is one to continue to hold. 658 00:33:39,760 --> 00:33:40,680 Speaker 7: And so that's what we're doing. 659 00:33:40,920 --> 00:33:43,560 Speaker 1: Single most important inside of the week. You just heard 660 00:33:43,600 --> 00:33:46,320 Speaker 1: it from Geen at Monster with war wounds of selling 661 00:33:46,440 --> 00:33:50,200 Speaker 1: too soon, and he said he has a winner in Facebook. 662 00:33:50,560 --> 00:33:53,960 Speaker 1: Guess what he and his team said, extend that and 663 00:33:54,080 --> 00:33:56,400 Speaker 1: that Paul, you and I know how much money have 664 00:33:56,480 --> 00:33:59,320 Speaker 1: I left on the table. I'm in triple levers dog 665 00:33:59,440 --> 00:34:01,920 Speaker 1: cash coveraged up with a fifteen percent gross and I 666 00:34:02,040 --> 00:34:04,240 Speaker 1: go now lighting up and I'm wrong every time. 667 00:34:04,520 --> 00:34:06,600 Speaker 3: Hey, Gene one of the I'm just trying to think 668 00:34:06,640 --> 00:34:09,359 Speaker 3: of some headwinds here for the tech space. I mean, 669 00:34:09,440 --> 00:34:11,480 Speaker 3: do I have to worry about Washington DC here in 670 00:34:11,640 --> 00:34:15,279 Speaker 3: terms of regulations more just broadly defined on tech and 671 00:34:15,360 --> 00:34:18,600 Speaker 3: maybe even specific for AI. How are you guys framing 672 00:34:18,640 --> 00:34:19,200 Speaker 3: that risk out? 673 00:34:21,200 --> 00:34:23,200 Speaker 7: Well, when it comes to AI, there's going to be 674 00:34:23,320 --> 00:34:26,720 Speaker 7: more regulation. Of course, we've got that letter that I mentioned. 675 00:34:26,960 --> 00:34:30,360 Speaker 7: Tim Cook has been he hasn't said anything in the 676 00:34:31,600 --> 00:34:34,520 Speaker 7: prepared commentary on their earnings calls in twenty twenty three 677 00:34:34,640 --> 00:34:38,680 Speaker 7: related to AI. He has made comments more recently outside 678 00:34:38,680 --> 00:34:41,120 Speaker 7: of the earnings calls and said that regulation is important. 679 00:34:41,160 --> 00:34:43,160 Speaker 7: He's mentioned that also in their Q and A. I 680 00:34:43,239 --> 00:34:46,960 Speaker 7: think when you have a company like Apple inviting regulation 681 00:34:47,120 --> 00:34:49,440 Speaker 7: in I think it's probably something that is going to 682 00:34:49,560 --> 00:34:52,120 Speaker 7: play out as far as the impact on the business 683 00:34:52,239 --> 00:34:55,960 Speaker 7: and how profound this growth can be. I don't think 684 00:34:56,000 --> 00:34:58,319 Speaker 7: it's going to have an impact on that. I think 685 00:34:58,360 --> 00:34:59,920 Speaker 7: that a lot of the regulation is going to come 686 00:35:00,560 --> 00:35:04,920 Speaker 7: around things like water marking related to images to try 687 00:35:04,960 --> 00:35:08,240 Speaker 7: to help prevent deep fakes, and the use of AI 688 00:35:08,600 --> 00:35:12,880 Speaker 7: for you know whether it's for for malice behavior, but 689 00:35:12,960 --> 00:35:16,320 Speaker 7: I don't think that. I think that this aggressive investment 690 00:35:16,400 --> 00:35:20,240 Speaker 7: cycle is ultimately going to continue. The broader topic beyond 691 00:35:20,360 --> 00:35:24,480 Speaker 7: AI and regulation in Washington is something that has orbited 692 00:35:25,040 --> 00:35:26,880 Speaker 7: obviously for years, and we have at the end of 693 00:35:26,920 --> 00:35:32,239 Speaker 7: this month, Meta and Snapchat and TikTok is are They're 694 00:35:32,239 --> 00:35:34,359 Speaker 7: all going to be and on Capitol Hill and talk 695 00:35:34,400 --> 00:35:37,640 Speaker 7: about some of the latest issues related to some of 696 00:35:37,640 --> 00:35:40,880 Speaker 7: the targeting that's going on on those platforms. The simple 697 00:35:40,960 --> 00:35:45,600 Speaker 7: answer is that regulation sounds bad, and really the substance 698 00:35:45,680 --> 00:35:49,200 Speaker 7: of it hasn't played out, and it's a little bit 699 00:35:49,280 --> 00:35:52,360 Speaker 7: hard for me to imagine why now this is the 700 00:35:52,400 --> 00:35:54,600 Speaker 7: time when this would have it start to have an impact. 701 00:35:54,520 --> 00:35:56,800 Speaker 1: Really generous time with us today gene Monster, Thank is 702 00:35:56,880 --> 00:35:59,799 Speaker 1: so much deepwater asset management there on your view of tech. 703 00:36:00,320 --> 00:36:03,520 Speaker 1: This is the Bloomberg Surveillance Podcast, bringing you the best 704 00:36:03,560 --> 00:36:08,319 Speaker 1: in economics, finance, investment, and international relations. You can also 705 00:36:08,400 --> 00:36:12,400 Speaker 1: watch the show live on YouTube. Visit the Bloomberg Podcast 706 00:36:12,600 --> 00:36:16,600 Speaker 1: channel on YouTube to see the show weekday mornings from 707 00:36:16,640 --> 00:36:19,880 Speaker 1: seven to ten am Eastern from our global headquarters in 708 00:36:20,000 --> 00:36:23,640 Speaker 1: New York City. Subscribe to the podcast on Apple, Spotify 709 00:36:24,040 --> 00:36:27,560 Speaker 1: or anywhere else you listen, and always on Bloomberg Radio, 710 00:36:27,800 --> 00:36:30,959 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business app.