WEBVTT - Carson Block Talks Magnificent Seven and Elon Musk 0:00:02.440 --> 0:00:06.800 Bloomberg Audio Studios, podcasts, radio news. 0:00:07.640 --> 0:00:11.200 China's moves to support is ala economy and markets continue, 0:00:11.240 --> 0:00:14.760 with its banks slashing benchmark lending rates by more than 0:00:14.760 --> 0:00:18.759 investors and economists were expecting. They're taking cues from officials 0:00:18.760 --> 0:00:22.120 who have implemented a host of measures to revive growth 0:00:22.160 --> 0:00:25.480 and put a floor under the housing market. The PBOC 0:00:25.600 --> 0:00:29.240 has already signaled that more easing is on the cards, 0:00:29.280 --> 0:00:33.559 including lowering the reserve requirement ratio. Now, just over a 0:00:33.600 --> 0:00:37.400 month ago, going short Chinese stocks was one of the 0:00:37.400 --> 0:00:42.159 world's most popular traits. Fast forward to now bullish China, 0:00:42.240 --> 0:00:45.440 it's one of the most crowded positions after paging stimulus 0:00:45.479 --> 0:00:48.640 blitstoked a short lived rally. Well our next guests became 0:00:48.680 --> 0:00:52.280 famous back in twenty eleven, shorting Chinese companies at a 0:00:52.320 --> 0:00:56.040 time when they were the Wall Street darlings, joining us 0:00:56.080 --> 0:00:59.959 exclusively now Mighty Water's founder cousin Block smptimes called. 0:01:00.080 --> 0:01:02.280 The king of short selling costs and good to have 0:01:02.360 --> 0:01:03.000 you with us. 0:01:03.240 --> 0:01:06.080 It seems like China is a great spot to start 0:01:06.160 --> 0:01:10.080 because you started short selling Chinese companies back in twenty eleven. 0:01:10.120 --> 0:01:15.160 The likes of Sino four is Ichi e lacking coffee, 0:01:15.560 --> 0:01:19.000 and you're still not lacking China, even though I've seen 0:01:19.040 --> 0:01:23.119 a slew of measures, policy changes and efforts to perhaps, 0:01:23.600 --> 0:01:25.679 you know, have more transparency. 0:01:25.920 --> 0:01:26.720 Why is that. 0:01:29.160 --> 0:01:29.479 Sure? 0:01:29.640 --> 0:01:34.039 Well, I come at China mostly from the US listed 0:01:34.200 --> 0:01:37.880 China stock perspective and to a lesser extent, Hong Kong. 0:01:38.440 --> 0:01:42.840 But the thing, the reasons why I have been calling 0:01:42.959 --> 0:01:47.199 China uninvestable in terms of the equities since twenty ten 0:01:47.760 --> 0:01:51.560 have to do with governance, and so particularly for the 0:01:51.680 --> 0:01:57.120 non mainland listed equities. Governance was always a problem because 0:01:57.160 --> 0:02:01.680 it was especially for US listed ADR for people who 0:02:01.880 --> 0:02:04.480 in China managers who wanted to commit fraud. It was 0:02:04.520 --> 0:02:08.400 a heads I win tales, I don't lose proposition because 0:02:08.840 --> 0:02:16.960 the US has never actually materially disciplined a confirmed fraudster 0:02:17.200 --> 0:02:21.880 from China. So you had that issue of governance. But 0:02:22.760 --> 0:02:27.400 then you overlay the capriciousness of China's policy and we 0:02:27.480 --> 0:02:32.000 began really seeing this around twenty eighteen twenty nineteen, when 0:02:32.520 --> 0:02:35.640 China began just turning dials and all of a sudden 0:02:35.680 --> 0:02:39.560 deciding that it was going to zero effectively for some 0:02:39.639 --> 0:02:42.919 period of time, the for profit education industry and then 0:02:43.360 --> 0:02:46.760 d D. Tushi which was about to go public, and 0:02:47.560 --> 0:02:54.480 Ali Baba's and Financial so you now have this, So 0:02:54.560 --> 0:02:57.959 you have that capriciousness of policy, and that has gotten worse. 0:02:59.480 --> 0:03:04.520 But the other thing that foreign investors in particular didn't understand, 0:03:04.639 --> 0:03:06.560 or took them a long time to understand, is that 0:03:07.560 --> 0:03:10.760 China doesn't view itself, at least at the policy making level, 0:03:10.800 --> 0:03:15.160 as on a long term basis needing foreign capital. So 0:03:15.240 --> 0:03:17.519 every now and then they'll say the right things, and 0:03:17.560 --> 0:03:21.600 there's history of this, they'll attract foreign capital and then 0:03:21.720 --> 0:03:23.480 they'll help incinerate it. 0:03:23.960 --> 0:03:25.120 So on top of. 0:03:25.040 --> 0:03:28.679 The governance risks, the capriciousness of policy risks, you also 0:03:28.760 --> 0:03:33.760 now have the geopolitical risks. She has been pretty clear 0:03:33.880 --> 0:03:37.880 at times that something that I thought was never actually 0:03:37.920 --> 0:03:41.200 on the table a few years ago, that China might 0:03:41.280 --> 0:03:45.200 try to take Taiwan by force, that is I think 0:03:45.280 --> 0:03:48.720 on the table. So there were previously, again just for 0:03:48.760 --> 0:03:51.200 governance reasons. If you own these stocks and you're in 0:03:51.200 --> 0:03:53.440 the US, you could wake up one morning and you 0:03:53.480 --> 0:03:54.400 know one. 0:03:54.280 --> 0:03:55.600 Of the companies is zero. 0:03:56.400 --> 0:04:00.440 Then with capriciousness of government policy, you know several of 0:04:00.480 --> 0:04:02.200 your stocks you could wake up and find them to 0:04:02.200 --> 0:04:05.560 be zeros. But now with the geopolitical risk, all of 0:04:05.560 --> 0:04:07.640 the China equities you own, you could wake up one 0:04:07.720 --> 0:04:11.800 day and there're zeros because war has started. So from 0:04:11.880 --> 0:04:15.720 a medium to long term perspective, I once again just 0:04:15.960 --> 0:04:19.840 still fail to see how having money committed to China 0:04:19.960 --> 0:04:22.120 makes sense now on a short term basis. 0:04:22.680 --> 0:04:23.679 I don't have an opinion. 0:04:24.080 --> 0:04:27.440 So if you're long China because you get that it's 0:04:27.480 --> 0:04:31.120 a trade, okay, great, Like you know, reasonable people can 0:04:31.240 --> 0:04:32.080 disagree on that. 0:04:32.480 --> 0:04:34.159 I'm not going to argue with that. 0:04:34.400 --> 0:04:39.359 But if you're thinking of marrying this, that's a path 0:04:39.560 --> 0:04:42.440 that a lot of people have been burned by before 0:04:43.000 --> 0:04:45.720 and I wouldn't think that this time would be different. 0:04:47.160 --> 0:04:50.160 So constant China is a trade, It is not an investment. 0:04:50.200 --> 0:04:51.880 I just want to put it out there as well. 0:04:52.240 --> 0:04:55.479 China does need foreign capital right now. And when it 0:04:55.520 --> 0:05:00.000 comes to transparency, accountability, governance, it is really trying to address. 0:05:00.160 --> 0:05:02.880 We've seen a lot of reforms, yet you say it 0:05:02.920 --> 0:05:03.960 has not done enough. 0:05:04.520 --> 0:05:06.960 Would you say it is in the right direction? 0:05:09.360 --> 0:05:10.599 Well, okay. 0:05:10.640 --> 0:05:14.400 From a very long term perspective, there are two things 0:05:14.440 --> 0:05:20.120 that I think she has done at a very high 0:05:20.200 --> 0:05:26.040 level correctly So number one, the fixed asset bubble. I mean, 0:05:26.120 --> 0:05:29.800 it was no secret for over twenty years that there's 0:05:29.839 --> 0:05:34.840 a massive fixed asset bubble. And every now and then policymakers, 0:05:34.920 --> 0:05:38.119 you know, particularly under the cool Wind regime, they would 0:05:38.160 --> 0:05:42.200 talk about how they need to rebalance the economy and 0:05:42.240 --> 0:05:44.080 they would start to do that. They would tighten up 0:05:44.120 --> 0:05:48.720 on lending to property and other consumers or other deployers 0:05:48.720 --> 0:05:51.240 of capital in the fixed assets, and then they would 0:05:51.240 --> 0:05:53.640 look at the data. The lights flash red, they stared 0:05:53.640 --> 0:05:55.839 into the abyss and they lost their nerve and the 0:05:55.880 --> 0:05:57.200 taps were opened again, and the. 0:05:57.120 --> 0:05:58.720 Bubble continued to inflate. 0:05:59.160 --> 0:06:05.640 So he probably because he's been able to perfect population 0:06:05.760 --> 0:06:10.320 control measures during COVID, has felt that he has the 0:06:10.360 --> 0:06:14.960 ability to really tighten the screws and prick that bubble 0:06:15.400 --> 0:06:18.719 in a way that he previously didn't and the government 0:06:18.839 --> 0:06:23.400 before he became chairman did not feel. So from a 0:06:23.520 --> 0:06:28.719 long term perspective, that's good. That's necessary to reset the 0:06:28.880 --> 0:06:31.960 balance in China's economy. The other thing that he's done 0:06:32.000 --> 0:06:35.839 that smart is his focus or he's had the focus 0:06:35.880 --> 0:06:40.760 on technology go away from that traditional you know, consumer 0:06:40.880 --> 0:06:45.800 led technology SaaS you know, online et cetera into real 0:06:46.040 --> 0:06:51.200 hardcore industrial technologies. So from a strategic perspective for China, 0:06:51.839 --> 0:06:56.559 that's beneficial. But you know, in terms of yes, China 0:06:56.640 --> 0:07:00.240 wants foreign capital right now, but the moment that she 0:07:00.720 --> 0:07:04.560 feels that doesn't need it, or that the costs of 0:07:04.600 --> 0:07:11.320 it outweigh the benefits foreigners are going to be horribly abused. Again, 0:07:11.480 --> 0:07:13.720 it's this movie plays repeatedly. 0:07:15.320 --> 0:07:17.360 So what would it take for you to change your mind? 0:07:17.480 --> 0:07:19.640 What would it take for China to be investible? 0:07:20.760 --> 0:07:24.560 Well, you know, look, I'm obviously never the person. 0:07:25.040 --> 0:07:28.480 Are you just not liking China at all? No matter 0:07:28.520 --> 0:07:30.320 what China does, you're not going to like it. I mean, 0:07:30.400 --> 0:07:32.800 is that a fair assumption to make? Is that the 0:07:32.840 --> 0:07:35.080 real picture when it comes to constant block in China? 0:07:36.040 --> 0:07:40.840 Well, I've always considered that the domestic equities were different 0:07:40.880 --> 0:07:45.040 from a governance perspective than the offshore equities, particularly the 0:07:45.160 --> 0:07:49.120 US equities. There was always more recourse, the heads on 0:07:49.200 --> 0:07:52.880 wind tails, I don't lose equation doesn't necessarily exist with 0:07:53.040 --> 0:07:57.960 domestic onshore equities. So, and that's something that we haven't 0:07:57.960 --> 0:08:00.960 looked at before. But if you're looking at buying Chinese equities, 0:08:00.960 --> 0:08:05.920 in the US that governance risk is always there. I 0:08:06.000 --> 0:08:08.800 don't believe the numbers. I do trust the numbers are 0:08:08.920 --> 0:08:11.440 much more likely to trust the numbers on shore. But 0:08:11.520 --> 0:08:14.960 at the end of the day, China, in contrast to 0:08:14.960 --> 0:08:21.160 say Vietnam, which we are very constructive on, doesn't feel 0:08:21.240 --> 0:08:24.360 like it really needs foreign capital, and I don't think 0:08:24.400 --> 0:08:27.800 it intends to be accommodating the foreign capital on a 0:08:27.840 --> 0:08:28.800 long term basis. 0:08:30.320 --> 0:08:34.720 Okay, let's talk about the US over valued. Some say, 0:08:34.800 --> 0:08:38.400 we've seen what forty seven straight sessions of record and 0:08:38.679 --> 0:08:40.359 the most expensive in decades. 0:08:41.080 --> 0:08:42.520 Is that something to be concerned about. 0:08:44.559 --> 0:08:49.120 Well, there's a debate as to what really drives when 0:08:49.120 --> 0:08:51.320 you talk about the US market, especially the S and 0:08:51.360 --> 0:08:55.880 P five hundred or the MAG seven. I'm in the 0:08:55.920 --> 0:09:00.239 camp that although I haven't I don't have the facility 0:09:00.280 --> 0:09:02.320 with math to really try to prove this out. But 0:09:02.720 --> 0:09:06.160 I'm in the camp that believes of what drives that 0:09:06.320 --> 0:09:11.040 index are flows. And so at the end of every month, 0:09:12.360 --> 0:09:15.040 US workers, you know a lot of them, their paychecks 0:09:15.080 --> 0:09:17.920 go into their four one case, which are retirement funds, 0:09:18.160 --> 0:09:21.120 and there's a robo bid for these stocks. And what 0:09:21.240 --> 0:09:25.480 happens is you reduce the effective supply of stock because 0:09:25.480 --> 0:09:29.760 you're taking out the active owners of stocks that will decide, hey, 0:09:29.840 --> 0:09:32.079 at this price, I'm the seller at a lower price 0:09:32.080 --> 0:09:36.040 on the buyer, and you're replacing that with a holder 0:09:36.120 --> 0:09:40.720 that will never sell unless and until it has outflows 0:09:40.800 --> 0:09:45.320 because people are drawing down the retirement accounts. So, according 0:09:45.360 --> 0:09:48.800 to that view, as long as the labor market is 0:09:49.200 --> 0:09:52.920 reasonably strong in the US, which it is, you're not 0:09:52.960 --> 0:09:55.400 going to see outflows. You're just going to continue to 0:09:55.440 --> 0:10:00.880 see inflows, especially in those in the most heavily weighted 0:10:01.400 --> 0:10:03.640 names in the UH, in the S and P five hundred. 0:10:03.760 --> 0:10:07.680 So I have in the past few years I have 0:10:07.800 --> 0:10:10.319 looked back on my career as an activist short seller 0:10:10.440 --> 0:10:13.319 and you know, kind of done the math and felt like, well, 0:10:13.840 --> 0:10:17.280 you know, I probably could have just been levered long 0:10:17.360 --> 0:10:20.439 the S and P five hundred, deferred my taxes and 0:10:21.760 --> 0:10:25.440 gone through a lot less bs and and being more 0:10:25.520 --> 0:10:29.439 or less the same possession financially. So yeah, I mean 0:10:29.480 --> 0:10:31.920 that that does make the market more fragile. 0:10:32.679 --> 0:10:35.559 But there's a FED put. There's always a FED. 0:10:35.480 --> 0:10:38.000 Put, you know, is there does there come a point 0:10:38.000 --> 0:10:40.080 in time when the system breaks and the FED can't 0:10:40.080 --> 0:10:41.600 fix it. 0:10:41.800 --> 0:10:45.200 Theoretically, yes, in our lifetimes. I don't know. 0:10:45.920 --> 0:10:48.800 So I think for now it probably just pays not 0:10:48.840 --> 0:10:51.080 to think too much. Just close your eyes and buy 0:10:52.240 --> 0:10:54.560 you know, probably bag seven uh. 0:10:54.800 --> 0:10:57.240 Cost and speak of mech seven. Let's speak about Nvidia. 0:10:57.320 --> 0:11:01.440 I mean, that's what's driving that sentiment that that were 0:11:01.480 --> 0:11:04.440 seeing three trillion dollar market cab we're talking about pe 0:11:04.520 --> 0:11:07.880 of sixty three. It's driving a lot of the other 0:11:07.960 --> 0:11:12.000 companies up as well. Are that companies which are unduly 0:11:12.520 --> 0:11:16.080 benefiting from that run we're seeing because of Nvidia? 0:11:16.760 --> 0:11:17.600 Point them out. 0:11:17.520 --> 0:11:23.160 For us, so not ready to do that. You know, 0:11:23.280 --> 0:11:26.040 when we point them out, there's usually a full report 0:11:26.080 --> 0:11:28.880 behind that because you know, but we need that in 0:11:28.920 --> 0:11:31.800 case we get sued, which does happen quite a bit. 0:11:32.200 --> 0:11:36.400 But in every hype cycle, and AI is obviously the 0:11:36.440 --> 0:11:40.320 hype cycle, in every hype cycle, you get opportunists who 0:11:40.520 --> 0:11:45.040 have companies that are maybe semi real, maybe not even 0:11:45.080 --> 0:11:48.120 that real, but they decide to take advantage of it 0:11:48.160 --> 0:11:52.480 because there's so much money chasing that. So yes, there 0:11:52.520 --> 0:11:56.200 will continue to be more. I mean, previously it was 0:11:56.240 --> 0:11:58.280 crypto and there were you know, there were a number 0:11:58.280 --> 0:12:02.400 of companies that were really dodgy in a crypto crypto 0:12:02.480 --> 0:12:06.640 mining space or crypto adjacent spaces. So I mean, and 0:12:06.720 --> 0:12:10.439 even the full on crypto companies are probably pretty dodgy 0:12:10.720 --> 0:12:12.679 to begin with. But yeah, there will be a lot 0:12:12.720 --> 0:12:15.000 of people who take advantage of the AI hype cycle. 0:12:15.920 --> 0:12:17.880 You can make money as a trader there as long 0:12:17.920 --> 0:12:19.760 as you're in on the joke and you're not left 0:12:19.800 --> 0:12:24.160 holding the bag. But there will be painful bag holding eventually. 0:12:25.880 --> 0:12:28.000 So there is a bubble wedding to bust, and if so, 0:12:28.200 --> 0:12:29.720 how soon do you think that might happen? 0:12:31.120 --> 0:12:33.880 Well, I mean that doesn't necessarily mean that it's a bubble. 0:12:33.880 --> 0:12:38.760 Like I don't opine on in video. I've got two friends, 0:12:39.200 --> 0:12:42.600 each very smart, highly accomplished, and they've got a bet 0:12:42.679 --> 0:12:43.480 about whether. 0:12:43.280 --> 0:12:46.000 In video is going to be down by. 0:12:46.000 --> 0:12:49.560 Fifty percent in the next you know, I guess another 0:12:49.760 --> 0:12:53.280 nine months or so. They each make compelling arguments. I 0:12:53.320 --> 0:12:55.320 don't have a view, but I do know that there 0:12:55.320 --> 0:12:58.440 will be a lot of pretenders in the space looking 0:12:58.480 --> 0:13:01.520 to vacuum up the dollars are being thrown into the space, 0:13:02.360 --> 0:13:04.560 and those are the ones that are not We will 0:13:04.559 --> 0:13:05.320 consider shortening. 0:13:06.880 --> 0:13:09.760 If you're not a pining over Nvidio? Are you a 0:13:09.880 --> 0:13:12.880 pining of a Tesla? We've seen how you know Elon 0:13:13.000 --> 0:13:17.640 Moss has unveiled his ROBOTAXI, much anticipated but lacking on details, 0:13:17.679 --> 0:13:20.880 big plans of course, that human EIGHTE robot as well, 0:13:21.160 --> 0:13:26.439 that robo van lots of plans about lacking details invested, 0:13:26.480 --> 0:13:29.679 obviously not liking. We've seen how the stock has you know, 0:13:29.800 --> 0:13:30.800 has taken a tumble. 0:13:31.080 --> 0:13:32.960 What's your take on Tesla? 0:13:34.800 --> 0:13:38.600 Well, yeah, I make everybody mad when I talk about Tesla, 0:13:38.720 --> 0:13:43.360 the bulls and the bears, because number one, nobody, probably 0:13:43.400 --> 0:13:46.439 nobody has ever played the public company game better than 0:13:46.440 --> 0:13:51.679 Elon Musk. And several years ago the only letter I've 0:13:51.720 --> 0:13:56.640 ever written to investors, I had this epiphany about Tesla 0:13:56.679 --> 0:14:01.440 and Elon Musk, and you know, there is is in life, 0:14:01.800 --> 0:14:06.520 probably a need for a certain amount of gilding the lily. 0:14:06.760 --> 0:14:10.280 When it works, we call it hutzpa, and we applaud. 0:14:11.160 --> 0:14:14.600 Now when it's too much, it doesn't work, then the 0:14:14.640 --> 0:14:18.120 person's Trevor Milton, and you know we he's derided and 0:14:18.240 --> 0:14:28.320 occasionally prosecuted. Elon has this perfect balance between bsing and delivering. 0:14:28.960 --> 0:14:29.840 Okay, I mean. 0:14:29.840 --> 0:14:35.240 The cars drive the rockets fly, the satellites work. 0:14:35.680 --> 0:14:37.400 He does these incredible things. 0:14:38.120 --> 0:14:42.360 Does he routinely over promise, I mean say things that 0:14:42.480 --> 0:14:45.200 it's hard to imagine he can say with a straight face, 0:14:45.680 --> 0:14:51.840 Yes he does. But does that matter? Apparently not? 0:14:53.720 --> 0:14:53.880 So. 0:14:54.120 --> 0:14:56.920 Yeah, nobody's played the game better than he has. It's 0:14:57.000 --> 0:15:01.640 it is a volatile stock, but you know, it continues 0:15:01.640 --> 0:15:04.800 to get flows, going back to what I said earlier, 0:15:06.000 --> 0:15:08.520 and will continue to get flows. And I think what 0:15:08.840 --> 0:15:12.040 was really what everybody on the bear side missed about it. 0:15:12.320 --> 0:15:15.160 You know, the arguments were, oh, Tesla doesn't have the scale, 0:15:15.160 --> 0:15:18.920 it can't compete with Toyota, Volkswagen, blah blah blah. And 0:15:18.960 --> 0:15:23.320 that's true, they didn't have the the sales base scale 0:15:23.480 --> 0:15:27.360 or the manufacturing scale. But what all of the bears 0:15:27.440 --> 0:15:30.720 missed and was what my epiphany really was in twenty 0:15:30.720 --> 0:15:35.120 one was that Elon understood that the base, that the 0:15:35.160 --> 0:15:37.960 scale he needed to have was capital base. And so 0:15:38.080 --> 0:15:40.920 when he was able to yoke that stock price way 0:15:41.000 --> 0:15:44.160 up and have this enormous market cap, I mean even 0:15:44.720 --> 0:15:48.640 you know, even if the company's bleeding billions of dollars 0:15:48.680 --> 0:15:51.200 and the stock is sinking, there's so much market cap 0:15:51.440 --> 0:15:56.400 that he continued, can continue to raise money, and Tesla's 0:15:56.440 --> 0:16:00.360 not going bankrupt in the you know, for a very 0:16:00.400 --> 0:16:03.000 long time. And that's what the bears missed because the 0:16:03.040 --> 0:16:05.080 bears were hung up on this, Oh it bleeds money, 0:16:05.120 --> 0:16:08.840 it's going to go bankrupt. And look, I was in 0:16:08.840 --> 0:16:12.360 that camp for a number of years, but now he 0:16:12.640 --> 0:16:18.000 Elon pulls rabbits out of the hat constantly. It's one 0:16:18.000 --> 0:16:20.680 thing to bet on him or bet on Tesla, but 0:16:21.000 --> 0:16:24.760 I just I just won't bet against Elon. I did 0:16:24.800 --> 0:16:27.960 in a minor way several years ago we had long date, 0:16:28.040 --> 0:16:31.360 We had crash puts on Tesla that almost hit and 0:16:31.360 --> 0:16:31.920 paid off. 0:16:32.000 --> 0:16:34.800 But it's just you can't bet against the guy. 0:16:36.280 --> 0:16:38.560 If you take a look at Tesla stocks, right, Carson, 0:16:38.680 --> 0:16:42.560 I mean, big loser this year, but still trading at 0:16:43.000 --> 0:16:46.600 high multiples pe of sixty one, The question really is 0:16:46.640 --> 0:16:51.960 whether Tesla's fundamentals can support this kind of pricing for 0:16:52.000 --> 0:16:52.440 the stock. 0:16:52.680 --> 0:16:56.320 Your take on that, well, my take is it doesn't matter. 0:16:56.360 --> 0:16:57.280 It's never mattered. 0:16:57.360 --> 0:16:59.760 And if you really scratch the surface on the earnings, 0:17:00.040 --> 0:17:03.160 a lot of that has to do with selling credits, 0:17:03.240 --> 0:17:07.359 you know, carbon credits. So from an in Tesla's accounting 0:17:07.400 --> 0:17:11.280 has always been heavily criticized by the bears, and they're 0:17:11.320 --> 0:17:13.600 not wrong. And I look, I'm not current on the 0:17:13.640 --> 0:17:15.280 accounting or the numbers, just to be. 0:17:15.359 --> 0:17:18.520 Clear, but it doesn't matter. 0:17:18.680 --> 0:17:20.840 And when you look at I mean, it's amazing to 0:17:20.880 --> 0:17:23.040 look at the evolution of Elon Musk, right. 0:17:23.080 --> 0:17:24.720 He was once the. 0:17:24.560 --> 0:17:27.960 Darling of the political left in US. He was seen as, 0:17:28.160 --> 0:17:31.320 you know, an environmentalist, and now he's the darling. 0:17:31.000 --> 0:17:34.040 Of the political right. And it hasn't hurt. 0:17:34.240 --> 0:17:37.159 I mean, he's and you know, and he was a 0:17:37.280 --> 0:17:41.640 lot of people now do compare him to Trump, and 0:17:41.760 --> 0:17:45.280 I think there are I think in terms of personality, 0:17:45.400 --> 0:17:47.880 there are a lot of valid comparisons. But what's interesting 0:17:47.960 --> 0:17:51.679 is when Elon started his jihad against short sellers, especially 0:17:51.800 --> 0:17:57.359 Jim Chinos, probably back around twenty fifteen sixteen if I 0:17:57.440 --> 0:18:01.440 remember correctly, just like Trump himself, when Trump was running 0:18:01.480 --> 0:18:06.960 for president, Elon recognized the potential of a populist movement. 0:18:07.400 --> 0:18:10.200 So he made he created this whole sort of market 0:18:10.240 --> 0:18:14.040 populist movement, the sentiment that hey, by buying my stock, 0:18:14.560 --> 0:18:19.360 you are sticking it to these powerful shadowy short sellers. 0:18:19.560 --> 0:18:23.280 And you know, back then, I didn't understand why he 0:18:23.359 --> 0:18:25.720 was so fixated on short sellers, and I thought it 0:18:25.760 --> 0:18:28.600 was just some you know, thin skin or you know, 0:18:28.680 --> 0:18:31.800 easily bruised ego, and that could be true, but I 0:18:31.840 --> 0:18:34.840 think it was really strategic that he understood that by 0:18:34.840 --> 0:18:39.199 setting up this plot of good versus you know, purportedly evil, 0:18:39.720 --> 0:18:42.960 he could get people to buy the stock. And that 0:18:43.520 --> 0:18:46.200 is part of the reason why you don't bet against 0:18:46.200 --> 0:18:48.800 the guy, and why nobody has played the game, the 0:18:48.800 --> 0:18:52.080 Public Company game better than Elon Musk. 0:18:51.920 --> 0:18:57.160 The thing is constant. He's aligned himself so closely with Trump. 0:18:57.520 --> 0:18:59.119 Is there a risk to that? 0:19:01.320 --> 0:19:06.320 Yeah, people thought so back then, but I you know, 0:19:06.440 --> 0:19:11.840 I don't think so. I mean, it's but the. 0:19:13.520 --> 0:19:13.720 Guy. 0:19:13.800 --> 0:19:15.720 The guy is incredible. I mean I don't say that 0:19:15.800 --> 0:19:20.080 as a fanboy, but it's now. I once thought, I 0:19:20.119 --> 0:19:22.080 once thought that that would be a risk to the brand, 0:19:22.200 --> 0:19:25.200 but you know, they're I mean, America. 0:19:24.800 --> 0:19:27.919 Is pretty evenly split. The world is pretty evenly split. 0:19:28.400 --> 0:19:30.600 So you know, if the if the left isn't going 0:19:30.640 --> 0:19:32.560 to buy the cars, then the right's going to buy them. 0:19:32.600 --> 0:19:35.440 And if you went back to twenty fifteen or twenty sixteen, 0:19:35.760 --> 0:19:37.680 you know, the right would scoff at the idea of 0:19:37.760 --> 0:19:40.359 electric cars, and now they love Elon Musk, and for 0:19:40.480 --> 0:19:42.560 them buying a you know, a tesla is a bit 0:19:42.560 --> 0:19:46.760 of a you know, a symbol of supporting libertarianism or 0:19:47.800 --> 0:19:49.480 you know, a right wing populism. 0:19:49.560 --> 0:19:52.960 So yeah, I don't think it matters for the brand. 0:19:55.000 --> 0:19:56.840 I just want to put it out there though, that 0:19:57.040 --> 0:19:58.680 once upon a time you did say that. 0:19:58.520 --> 0:20:00.399 Elon Musk is a liar. 0:20:01.480 --> 0:20:02.480 Yeah, well he does lie. 0:20:02.640 --> 0:20:04.399 Yeah, I mean that's I mean, I think I just 0:20:04.600 --> 0:20:06.679 said that, you know a few minutes ago. Yes, he 0:20:06.720 --> 0:20:11.159 does lie, but there's enough truth in what he does. Again, 0:20:11.800 --> 0:20:17.600 the rockets fly, the cars drive, you know, the satellites work, 0:20:18.760 --> 0:20:21.800 you know, So there's He's got this. He has this 0:20:21.880 --> 0:20:27.760 perfect balance between lying and deception and delivering in truth, 0:20:28.160 --> 0:20:30.800 the perfect balance for this moment in time. 0:20:33.000 --> 0:20:33.600 A lot of our. 0:20:33.480 --> 0:20:37.200 Eyes on the US election. Does it matter who wins 0:20:37.200 --> 0:20:38.320 for the financial markets? 0:20:38.359 --> 0:20:42.000 Would you know a Trump administration be better for the 0:20:42.040 --> 0:20:44.120 stock market or would Kamala Harris? 0:20:45.760 --> 0:20:48.320 Well, I'm going to answer that with some nuance. 0:20:49.400 --> 0:20:54.000 I think, for if you're in the finance industry in America, 0:20:54.840 --> 0:20:58.560 Trump is definitely better for you. Does it matter to 0:20:58.600 --> 0:21:02.199 the markets, and going back to my view that the 0:21:02.320 --> 0:21:05.080 kind of an autopilot effectively or at least you know, 0:21:05.160 --> 0:21:09.200 the S and P five hundred is because of blows 0:21:10.640 --> 0:21:13.080 and just excess liquidity. I mean, even with the Fed 0:21:13.160 --> 0:21:16.000 having raised rates, there's still so much liquidity in the 0:21:16.000 --> 0:21:18.119 system that you see, you know, I mean to me, 0:21:18.320 --> 0:21:22.080 I'll never understand what the actual value of bitcoin is, right, 0:21:22.119 --> 0:21:26.200 it's a currency without a country, and if there's any 0:21:26.200 --> 0:21:29.200 intrinsic value, it's well beyond that. So that just shows 0:21:29.240 --> 0:21:31.760 you there's still so much liquidity in the system. 0:21:31.880 --> 0:21:32.960 So I don't. 0:21:32.880 --> 0:21:42.040 See Kamala winning impacting that. But definitely Trump makes finance 0:21:42.680 --> 0:21:47.879 somewhat less crappy to be in as an industry. Somewhat 0:21:48.440 --> 0:21:50.840 you can't really put the toothpaste back in the tube, 0:21:50.880 --> 0:21:54.840 given how far we've come in terms of onerous legislation, 0:21:55.160 --> 0:21:58.920 rules and regulation, but he'll make it somewhat less onerous. 0:22:00.640 --> 0:22:01.920 I want to touch on Vietnam. 0:22:02.040 --> 0:22:06.520 What's a short seller like you betting long on Vietnam Alia? 0:22:06.640 --> 0:22:09.639 When you talked about how you're taking issue with China 0:22:09.680 --> 0:22:16.320 because of you know, transparency, governance, accountability, the same issues 0:22:16.760 --> 0:22:18.560 do apply with Vietnam. 0:22:19.840 --> 0:22:25.520 Well, dam not, I'll so I'll obviously take the other 0:22:25.600 --> 0:22:30.520 side of that. And look, with China, I've lived there twice. 0:22:30.560 --> 0:22:33.880 I've done about six years in country. I was living 0:22:33.920 --> 0:22:36.080 there again from five to ten, and that's when I 0:22:36.080 --> 0:22:39.639 started Muddy Waters, and I studied, started to kind of 0:22:39.680 --> 0:22:43.320 by act, I mean, effectively by accident. But at the 0:22:43.400 --> 0:22:47.680 time I started it and realized that, my god, there's 0:22:47.720 --> 0:22:50.760 this whole world that has no idea. You know, they 0:22:50.800 --> 0:22:52.560 throw all this money into China and they have no 0:22:52.640 --> 0:22:57.640 idea what's going on. It was stunning to me that 0:22:57.960 --> 0:23:01.160 there was such an information disconnect, such a disconnect between 0:23:01.200 --> 0:23:03.919 perceptions of foreigners as to how business is done in 0:23:04.000 --> 0:23:08.840 China and what really goes on. And then in twenty seventeen, 0:23:09.480 --> 0:23:11.480 I was going around saying, hey, you know, Trump has 0:23:11.480 --> 0:23:16.720 been became president, and so many aspects of the US 0:23:16.840 --> 0:23:22.359 China bilateral relationship are underwater. But in the markets that's 0:23:22.400 --> 0:23:26.120 not yet underwater, and everybody's really excited about Chinese stocks. 0:23:26.200 --> 0:23:30.359 But twenty twenty, when COVID hit, that was a breaking point, 0:23:30.440 --> 0:23:33.439 and so I ask I said to myself, this is 0:23:33.440 --> 0:23:35.879 going to be different. This is going to be the 0:23:36.040 --> 0:23:40.359 time when finally the West has a real serious break 0:23:40.359 --> 0:23:43.160 with China, and it's going to be the biggest geopolitical 0:23:43.400 --> 0:23:47.679 realignment since World War Two, and it's all going to 0:23:47.760 --> 0:23:52.680 involve countries' relationships to China. And so the winners in 0:23:52.840 --> 0:23:56.800 that world or in this world that we're in are 0:23:57.160 --> 0:23:58.760 the ones that are non aligned. 0:23:59.240 --> 0:24:02.680 So in in Vietnam, and you. 0:24:02.640 --> 0:24:07.119