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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: or watch us live on YouTube.

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Speaker 2: You know, we love the big take stories here at

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Speaker 2: Bloomberg News, almost like on a daily basis, puts out

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Speaker 2: these big take stories, really deep dives, deeply reported. Teams

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Speaker 2: of people focused on this thing and they go deep

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Speaker 2: and they get good data, good reporting. And today is

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Speaker 2: a big one. Biden's EV dreams are a nightmare for

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Speaker 2: Tesla in the US car industry. Craig Trudell joins US

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Speaker 2: Global Autos editor for Bloomberg News on Zoom from London. So, Craig,

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Speaker 2: this is a big deal here because President Biden, that

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Speaker 2: Inflation Reduction Act putting a lot of money behind EV's here.

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Speaker 2: But you can't take China out of the here. What's happening.

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Speaker 3: Yeah, I think this is a really challenging thing that

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Speaker 3: the Biden administration was trying to do. Right, they were

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Speaker 3: trying to jump start the EV industry in the US.

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Speaker 3: I would say, you know, you can give them high

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Speaker 3: marks for what they've done in terms of the amount

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Speaker 3: of manufacturing investment they've attracted. It's it's really been remarkable

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Speaker 3: the the response that we've seen there. On the other

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Speaker 3: side of the equation, the demand side, I think, you know,

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Speaker 3: the marks are way more mixed, and I think, you know,

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Speaker 3: the challenges that we're going to see in the years

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Speaker 3: to come, you know, assuming, of course, Ira you know,

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Speaker 3: stands up if we see a change in the White

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Speaker 3: House later this year. But you know, whether or not

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Speaker 3: manufacturers can sort of pull off what Biden you know,

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Speaker 3: is asking of them, which is to really set up

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Speaker 3: a EV and battery supply chain that is less reliant

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Speaker 3: on China, and it eventually is just not reliant on China.

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Speaker 3: And that's proving to be an extremely difficult task. And

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Speaker 3: that's what we try to lay out today in ways

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Speaker 3: that are you know, really it's a it's a complicated issue.

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Speaker 4: You know. Tesla everyone thinks about, as.

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Speaker 3: You know, being a very sort of made in America

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Speaker 3: car brand, and and you know, they sort of are

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Speaker 3: recognized as one legitimately, but you know, when given the

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Speaker 3: opportunity to import batteries because of the fact that the IRA,

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Speaker 3: you know, didn't really necessarily grow some teeth until the beginning.

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Speaker 4: Of this year.

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Speaker 3: We saw, you know, just in a matter of months

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Speaker 3: Tesla import two and a half billion dollars worth of

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Speaker 3: EV batteries from China.

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Speaker 5: Wow, and Craig, that's happening, because it feels like every

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Speaker 5: time we talk about GM for Tesla, a lot of

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Speaker 5: these companies are losing money making their evs. So what

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Speaker 5: was the point of the IRA if not to kind

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Speaker 5: of streamline I guess the kind of inputs of of

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Speaker 5: these batteries.

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Speaker 3: I think what you have here is a situation where

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Speaker 3: you know, Joe Mansion was was, you know, the player

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Speaker 3: who you know, Washington really just had to sort of

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Speaker 3: bend to his will, and he was really reluctant to

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Speaker 3: you know, allow for electric vehicles to continue to get

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Speaker 3: tax credits. He was opposed to them. And he said, okay, industry,

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Speaker 3: well we'll give you these tax credits, but you build

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Speaker 3: me a supply chain that, of course, you know, sort

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Speaker 3: of didn't take into account sort of you know the

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Speaker 3: complexities of the supply chain and the fact that China

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Speaker 3: is just so dominant in this space and they've really

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Speaker 3: sort of you know, methodically, you know, for a time

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Speaker 3: quietly you know built this this you know, staggeringly strong

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Speaker 3: position in terms of you know, the control of you know,

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Speaker 3: the inputs, whether it's you know, nickel and lithium graphite.

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Speaker 3: You know, these inputs are going to be really really

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Speaker 3: difficult to source, not only just you know, whether their

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Speaker 3: mind in China, but whether they're sort of process and refined,

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Speaker 3: and you know, the sort of cost difference that the

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Speaker 3: WES is going to have to sort of overcome really

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Speaker 3: just can't be you know, sort of overstated at this point.

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Speaker 2: And folks, if you want to see this article, it's

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Speaker 2: fantastic article. Really deeply reporting. Great graphics makes it easy

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Speaker 2: for me because I like the pictures. Bloomberg dot Com

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Speaker 2: slash a big take is kind of where you find it.

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Speaker 2: Big team effort. So you know, Craig, I see in

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Speaker 2: your reporting here. In twenty twenty three, the IRA required

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Speaker 2: that at least half of the value of battery components

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Speaker 2: had to be assembled in North America and that forty

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Speaker 2: percent of the raw materials had to be sourced from

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Speaker 2: the US. And in twenty twenty seven, that raw material

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Speaker 2: requirement is going to double to eighty percent. Are those

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Speaker 2: numbers are they can they be achieved in that timeframe?

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Speaker 3: I think that's that's one of the things that you know,

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Speaker 3: it sort of depends on which company you ask.

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Speaker 4: And I think, you know.

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Speaker 3: Some of the concerns that the industry is having here

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Speaker 3: is the fact that some of these raw materials the

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Speaker 3: prices have really collapsed.

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Speaker 1: And you know.

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Speaker 3: That that you would sort of think, oh, that's a

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Speaker 3: good thing for the auto companies. But if you're trying

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Speaker 3: to build a supply chain in North America for these

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Speaker 3: raw materials and the prices for them have absolutely you know,

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Speaker 3: sort of the bottom has come out. I think of

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Speaker 3: lithium in particular, you've seen this dramatic, you know drop

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Speaker 3: in prices that significantly undermines the economics of those projects.

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Speaker 3: And so, you know, I think the raw materials in

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Speaker 3: particular are a real challenge. I think battery components will

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Speaker 3: be less of a challenge. But even there, it is

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Speaker 3: a matter of you can't just sort of snap your

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Speaker 3: fingers and open up a bunch of plants for these

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Speaker 3: various components. You know, it does take time, you know,

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Speaker 3: to put you know, dig up the ground and put

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Speaker 3: up these these plants that are coming, but are taking

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Speaker 3: some time and.

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Speaker 5: Graig across the auto makers. I'm looking at the reporting again,

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Speaker 5: seven of Tesla's twelve models sold in the US fully

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Speaker 5: cleared the eye R raise sourcing hurdles and qualified for

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Speaker 5: the tax credit. What percentage of evs being sold in

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Speaker 5: the US are clearing that hurdle?

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Speaker 4: I think because Tesla is still so dominant in the US,

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Speaker 4: we're at a point where, you know, the evs that

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Speaker 4: do the most volume are largely qualifying at the moment.

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Speaker 4: But I think the fact that those raw material requirements

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Speaker 4: that kick in next year and then escalate in the

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Speaker 4: years that follow that's really where we're going to see

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Speaker 4: even more of a sort of you know, level of

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Speaker 4: screws put on the industry. But but I think, you know,

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Speaker 4: the other carmaker that I think is particularly well positioned,

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Speaker 4: I would just call out to General Motors. I think

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Speaker 4: the fact that they have a localized supply chain, UH

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Speaker 4: for batteries, they have a joint venture with a Korean

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Speaker 4: battery supplier.

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Speaker 3: We're seeing, you know, more and more of those partnerships.

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Speaker 3: You know, for about following suit Stilantis, the maker of

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Speaker 3: Jeep and Chrysler, you know, similar deal where they're setting

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Speaker 3: up battery plants in North America and sort of on

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Speaker 3: and on. But those projects, I would say, are much

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Speaker 3: further behind where we have Tesla, which you know for

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Speaker 3: years has been making batteries out Nevada with Panasonic and

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Speaker 3: GM which has a partnership with.

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Speaker 4: LG in US.

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Speaker 2: Hey, Craig, I think the narrative out there just kind

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Speaker 2: of the bigger picture on EV's right now is, Gee,

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Speaker 2: maybe demand isn't as high as we all thought at

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Speaker 2: one point. We've got you know, the big automate manufacturers

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Speaker 2: pulling back like Ford for example. Loss is still big.

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Speaker 2: What's your understanding when you talk to your sources as

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Speaker 2: to how people are thinking about the ultimate demand for

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Speaker 2: EV's over the next one to three to five years.

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Speaker 3: I think, you know, perversely, it was a challenge that

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Speaker 3: you know, for a time, you know, business was too good.

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Speaker 4: The fact that you know, for a while there, uh you.

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Speaker 3: Know, so many companies uh you know actually had back orders.

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Speaker 1: Uh.

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Speaker 4: Tesla in particular, you.

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Speaker 3: Know, had demand issues as opposed to a supply issue

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Speaker 3: that you know really sort of caused this uh you know,

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Speaker 3: unsustainable you know, jacking up of prices. The fact that

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Speaker 3: that has had to come down, I would say more

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Speaker 3: dramatically than we've seen for the rest of the industry

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Speaker 3: has had all sorts of you know, unintended unintended consequences

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Speaker 3: when you uh, you know, so dramatically bring down prices

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Speaker 3: on the new side. Uh, the the use side is

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Speaker 3: of the equation. The use vehicles really lose their value

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Speaker 3: and the fact that I think evs maybe have some

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Speaker 3: sort of you know, particular challenges with you know, maintaining

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Speaker 3: their value. When you think about a used uh, you know,

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Speaker 3: gas car, you don't worry about, you know, the engine

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Speaker 3: holding up. You maybe have you know, relatively more concern,

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Speaker 3: rightfully or not, as to whether or not the battery

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Speaker 3: has been going to hold up. And so what we're

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Speaker 3: seeing is is you know, that really come into play

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Speaker 3: in terms of total cost of ownership. I think that's

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Speaker 3: one of the things that we've really paid close attention

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Speaker 3: to lately. I think when we step back, you know,

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Speaker 3: the fact that EV's is sort of you know, the

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Speaker 3: way forward, particularly in terms of you know, where the

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Speaker 3: regulators want to see this industry group go. I think

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Speaker 3: we've seen that China is able to make this work.

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Speaker 3: We've seen that Europe is much further along in this transition.

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Speaker 3: I think the question for the US is whether you know,

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Speaker 3: whether we can sort of, you know, get Americans who

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Speaker 3: tend to like bigger vehicles to come around to electric vehicles.

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Speaker 3: I think that also adds some complications to the mix

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Speaker 3: as well.

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Speaker 2: All Right, Craig, thanks so much as always. Craig Trudel

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Speaker 2: Global autis editor for Bloomberg News, joining US visa zoom

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Speaker 2: from London. You know, I tested thanks to Matt Miller's

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Speaker 2: connections with Ford, he got me a F one fifty

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Speaker 2: lightning the EV.

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Speaker 1: Yeah.

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Speaker 2: I got the test start of that for like a week.

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Speaker 2: How is it awesome? Awesome? Now I have to full disclosure.

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Speaker 2: I'm a Wall Street guy. I don't drive pickup truck,

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Speaker 2: so it's a first pickup truck average rope. It was awesome,

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Speaker 2: and it's the first electric vehicle average drope. But the

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Speaker 2: sticker price was ninety four thousand dollars and I think

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Speaker 2: it's just one of the challenges that haves this cost. Yeah.

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Speaker 5: No, well, and that's going to be interestingly enough, we

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Speaker 5: get earnings from Rivian and Lucid after the bell today,

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Speaker 5: so we're going to hear how some of these smaller

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Speaker 5: ev makers are hanging in there just given as you mentioned,

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Speaker 5: high costs. These companies are losing money on pretty much

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Speaker 5: every car vehicle they make, and demand doesn't seem to

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Speaker 5: really be there.

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Speaker 2: Yeah. So anyway, big take story coming out of Bloomberg

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Speaker 2: News today, looking at the you know, the battery side

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Speaker 2: of it and kind of where we're sourcing all this stuff.

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Speaker 2: So again Bloomberg dot com slash Big, Big Take, and

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Speaker 2: that that's where you'll find it.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on applecar Play and Android

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Speaker 1: just say Alexa playing Bloomberg eleven thirty.

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Speaker 2: Let's check in with Irin Jersey here because I want

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Speaker 2: to know what my Federal Reserve is going to do.

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Speaker 2: I mean, that's got you know, the Fed watchers, they

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Speaker 2: were pounding their chest March. We're gonna get a you know,

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Speaker 2: a rate cut, six rate cuts. Yeah, and now it's

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Speaker 2: kind of May. Now people are talking about June, and

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Speaker 2: we've had a couple of smart people come in here

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Speaker 2: over the last couple of days and say, hey, you

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Speaker 2: better have a scenario where they raise he raise rate.

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Speaker 2: So I have no idea what's going on. So let's

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Speaker 2: bring in Iri Jersey because it's his job. Ira Jersey,

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Speaker 2: Bloomberg Intelligence Chief US interest rate strategist. Ira. It seems

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Speaker 2: like this thing changes day by day. And I guess

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Speaker 2: that's why the good folks of Bloomberg made the warp function,

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Speaker 2: because it just changes all the time. It's a fluid situation.

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Speaker 2: Given kind of what we know here in the economics

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Speaker 2: and some of the data we've seen, how do you

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Speaker 2: think the Fed's feeling today?

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Speaker 6: Yeah, so you know, we're get a lot of Fed

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Speaker 6: speak this week. We have the minutes at two o'clock today,

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Speaker 6: so we'll see what they were talking about in some

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Speaker 6: more detailed than than we got during the press conference

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Speaker 6: from the January meeting. But you know, my view has

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Speaker 6: always been that we were probably gonna only get a

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Speaker 6: few cuts this year, so we'd we'd thought three cuts

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Speaker 6: going into the going into the year over the course,

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Speaker 6: and part of the reason for that was we thought

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Speaker 6: that it would be pretty slow going and getting inflation

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Speaker 6: back toward the fed's target, and you know, so far

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Speaker 6: that's played out more or less the way that we thought.

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Speaker 6: So so we'd been figuring that they would cut one

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Speaker 6: time before the middle of the year in part to

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Speaker 6: kind of get that first cut over with UH before

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Speaker 6: the before the election, and that gives them some flexibility

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Speaker 6: depending on what the how the numbers come in, you know.

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Speaker 6: That being said, as as you noted, Paul, one of

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Speaker 6: the one of the factors that that we highlighted last

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Speaker 6: week was that that people are buying options on the

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Speaker 6: potential for higher rates. So so there are some people

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Speaker 6: who are getting a little bit concerned that there might

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Speaker 6: be this tail event where maybe you know, the FED

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Speaker 6: is on hold most of the year, but sometime in

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Speaker 6: the in say the fourth Court or maybe just after

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Speaker 6: the electure or something, they have to hike because inflation

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Speaker 6: in the economy is holding up reasonably well. So so

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Speaker 6: even though that you know, that's not a base case

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Speaker 6: of just about anybody that that we talked to, although

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Speaker 6: there are a few outliers there that that certainly think

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Speaker 6: that it's a possibility. You know, I think that that

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Speaker 6: you know, an on hold case is much more likely,

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Speaker 6: and you've heard some people in the fixed income markets

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Speaker 6: talking about that as being more and more realistic possibility

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Speaker 6: that the FED just you know, doesn't cut for a

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Speaker 6: long time or doesn't move at all.

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Speaker 5: Yeah, iira with that notion hold higher for longer, has

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Speaker 5: been something j Powell said for quite some time. You're

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Speaker 5: talking about a cut coming later in the year. Are

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Speaker 5: we talking September November timeframe?

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Speaker 6: So September I think will be a little bit hard,

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Speaker 6: even though you know, the feder Reserve says that they're

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Speaker 6: a political but I think that they wouldn't want to

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Speaker 6: start any new actions just prior to the election in September.

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Speaker 6: Is that meeting that sits in between the conventions and

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Speaker 6: the and the general elections. So I think they wouldn't

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Speaker 6: start anything then, which is again another reason why thinking

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Speaker 6: that that maybe they would do a move in say May,

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Speaker 6: June or July, just to have it out of the

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Speaker 6: way and that gives them flexibility to continue those actions.

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Speaker 6: You know, It's it's definitely possible just given the strength

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Speaker 6: and the data that maybe the FED doesn't move or

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Speaker 6: doesn't have to move until after the election. That that's

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Speaker 6: you know that there's a non zero chance of that,

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Speaker 6: and I think that you know, if we continue to

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Speaker 6: get data as good as we've seen recently, then then

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Speaker 6: certainly that that's a possibility. Again, like our view continues

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Speaker 6: to be at the moment that that the Fed will

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Speaker 6: cut a few times this year, but not nearly as

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Speaker 6: much as what the market was pricing, say two months ago.

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Speaker 2: Hey, in your work looking at rates, what is the

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Speaker 2: stuff you're working on now that maybe we're not asking

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Speaker 2: you about that? Maybe we should.

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Speaker 6: Yeah, well, so so you haven't asked us about supply recently,

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Speaker 6: because supply is certainly something that has gotten a lot

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Speaker 6: of attention in the markets recently, just with with all

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Speaker 6: of the treasury bond auctions and with deficits you know,

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Speaker 6: two trillion ishtops and looking like they're going to remain

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Speaker 6: at those kind of levels for the next couple of years.

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Speaker 6: Is something that that is still getting a lot of

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Speaker 6: attention and is one of the reasons why it might

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Speaker 6: be more and more difficult as time goes on, just

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Speaker 6: given the stock of treasury securities outstanding for the market

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Speaker 6: to to rally just because you have some supply demand

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Speaker 6: and balances. But interestingly, you know, once we get through

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Speaker 6: through April, it looks like the Treasury Department will be

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Speaker 6: able to stabilize the treasury auctions at the levels what

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Speaker 6: they'll end up in April. And because of that, you

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Speaker 6: might have a better supply demand and balance. So might

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Speaker 6: you might actually see more a little bit more propensity

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Speaker 6: for the market to rally when we're talking about more

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Speaker 6: rate cuts than it has over the last over the

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Speaker 6: last year or so, as the treasury departments had to,

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Speaker 6: you know, keep on increasing the size of the debt aira.

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Speaker 2: What are you looking at? What matters?

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Speaker 5: I was talking to a PM this morning who kind

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Speaker 5: of laughed when I asked him about the minutes later today.

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Speaker 6: Yes, so within the minutes, you know, it's the details, right,

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Speaker 6: So the details matter, and so the two things that

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Speaker 6: will be focused on or one is the normal stuff, right,

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Speaker 6: it's it's what is their reaction function? Has it changed?

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Speaker 6: Is there the chance that some members have gotten somewhat

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Speaker 6: more cautious given the strength of the data that we

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Speaker 6: had in January, And therefore, will there be a change

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Speaker 6: in the dots and in some of their forecasts when

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Speaker 6: we get the March when we get the March Summary

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Speaker 6: of Economic Projections. But more importantly, and I guess this

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Speaker 6: goes also to Paul's questions just a second ago about

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Speaker 6: what we're not talking about. But it's also a balance

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Speaker 6: sheet runoff, right, So it's it's completely possible that even

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Speaker 6: if the Federal Reserve doesn't cut interest rates at all

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Speaker 6: this year and keeps keeps rates relatively high, it is

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Speaker 6: possible that the FED is going to have to reduce

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Speaker 6: the amount that it's running off its balance sheet. So

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Speaker 6: there's so called quantitative tightening, and they as that happens,

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Speaker 6: I think the market will take that as somewhat of

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Speaker 6: a Dubvish bent to the FED and the FED activities.

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Speaker 6: You'll probably see things like risk assets do pretty well, right,

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Speaker 6: credit spreads, tighter, equities do okay. The rate market will

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Speaker 6: probably rally just a little bit on that, just as

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Speaker 6: they'll take it as a duthersh signal. I don't think

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Speaker 6: it is, because I think that the balance sheet policy

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Speaker 6: at this point is going to be somewhat disconnected from

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Speaker 6: rate policy, because balance sheet policy has other implications in

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Speaker 6: the banking sector, and you know how many how much

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Speaker 6: bank reserves do people need in order to comply with

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Speaker 6: some of the capital regulations and the like. So that's

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Speaker 6: going to be completely different. But that is something in

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Speaker 6: the minutes that I'm really looking forward to to seeing

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Speaker 6: what they talked about and how they're going to frame

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Speaker 6: the discussion that they're going to have in March, because

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Speaker 6: you know, J. Powell did say that in March they're

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Speaker 6: going to start their talk about balance sheet policy.

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Speaker 2: All right, So I get home my new hours. I

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Speaker 2: get home in the afternoon, I turn on CBS. I

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Speaker 2: see Inter Milan playing Athletico Madrid. I think that's what

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Speaker 2: I was seeing. Good match. I don't know why I

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Speaker 2: was on the CBS network in the middle of the afternoon.

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Speaker 2: That's another question, Ira, What was I watching yesterday?

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Speaker 6: So the Champions League? I guess, so that the best

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Speaker 6: the best teams in Europe all play each other, or

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Speaker 6: the teams that won their leagues and or came in

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Speaker 6: the top a couple of spots in their leagues. So

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Speaker 6: Athletico Madrid would be playing Milan in the Champions League.

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Speaker 6: The reasons middle of the day is because it's evening

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Speaker 6: in Europe.

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Speaker 2: So my question was why was it on CBS network.

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Speaker 2: I'm not watching some silly soap operas or game shows

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Speaker 2: or something like that. So that's for that's for me.

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Speaker 2: That's the media question. I'll call my friends.

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Speaker 6: So, yeah, CBS has the has the rights to the

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Speaker 6: Champions League, just like just like NBC has the rights

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Speaker 6: to the Premier League and the like. So you're going

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Speaker 6: to see it on whatever network you know bought those

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Speaker 6: rights in the US.

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Speaker 2: So who is favorite in the Champions League? Is that it?

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Speaker 7: Yeah?

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Speaker 6: I think it has to be last year's champions Manchester City, Right,

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Speaker 6: there's still one of the Kreme de la Crem's. But

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Speaker 6: you know name, you know, the Milan teams and Byron

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Speaker 6: Munich and PSG like those teams can never be ruled

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Speaker 6: out for sure.

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Speaker 2: I'm an inter. So you're watching that Send zero. I've

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Speaker 2: been to the Cent zero. Oh really Yeah? Some ac

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Speaker 2: Milan play there back in the day. So that's awesome. Yeah,

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Speaker 2: it's pretty cool. They are insane over there, the stuff

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Speaker 2: that they do. I mean they light stuff on fire,

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Speaker 2: fireworks and it's just crazy. All right, Very good, Ira Jersey,

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Speaker 2: thanks so much. As always, Ira Jersey. He's our chief

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Speaker 2: US Interest rates strategist. He's also our go to soccer

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Speaker 2: officient out of you're.

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Speaker 1: Listening to the Bloomberg Intelligence podcast. Catch us Live weekdays

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Speaker 1: at ten am Eastern on Affo car, playing Android Auto

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Speaker 1: with the Bloomberg Business app. Listen on demand wherever you

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Speaker 1: get your podcasts, or watch us live on YouTube.

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Speaker 2: Bailey, you know it's bad when your cab driver says,

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Speaker 2: are you going to be listening to the Nvidia call today?

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Speaker 4: No way?

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Speaker 2: I mean this is going to be missing. So the

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Speaker 2: implied volatility which you showed you from the Bloomer turmal

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Speaker 2: is ten percent and for a company with one hundred

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Speaker 2: and one point seven trillion market app that could be

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Speaker 2: some shekels gained the lost here here coming up sore.

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Speaker 2: Gene Monster joins us because we have to get the

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Speaker 2: bottom line here and Gene can certainly do that. Geene

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Speaker 2: Monsters partner, co founder deep Water Asset Management. He's been

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Speaker 2: all over the tech space for decades. Hey, Gene, have

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Speaker 2: you ever seen anything like this where a company has

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Speaker 2: not only a big impact I guess on itself on

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Speaker 2: but even in its sector, but also kind of the

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Speaker 2: broader market mentality and video is really outsized, isn't it?

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Speaker 8: Absolutely? Answer your question, I've maybe seen it back when

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Speaker 8: the iPod iPhone was starting to get going, and that

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Speaker 8: an outsized impact on overall tech. But if you put

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Speaker 8: that into perspective, that was iPhone sixteen years ago, so

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Speaker 8: it's been a long time. When you think about the

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Speaker 8: transformation of AI, it's understandable that and video has gotten

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Speaker 8: attention and the expanding market cap that it's had over

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Speaker 8: the past year, because of course it is in a

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Speaker 8: poll position. It is benefiting tremendously from this AI infrastructure.

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Speaker 8: That of course is all in the rear view mirror,

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Speaker 8: and it's all about looking forward. But to answer your question,

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Speaker 8: and this is pretty special times we're in one just

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Speaker 8: final thought, outside of their earnings here, if I look

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Speaker 8: back over the past year and look what's happened to

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Speaker 8: Nvidia relative tech expectations, how they've beat expectations, what they've

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Speaker 8: done to guidance that period those three quarters, That's something

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Speaker 8: I have never seen multi billion dollar company beating by

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Speaker 8: thirty forty to fifty percent, guiding up by twenty percent,

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Speaker 8: and then beating that upward guide by another thirty forty percent.

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Speaker 8: It is simply breathtaking from a tech investors perspective.

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Speaker 2: Yeah, folks, so what you just heard is really has

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Speaker 2: some gravitusk because Jean's been investing in analyzing tech companies

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Speaker 2: for decades here, you've seen them from the cradle to

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Speaker 2: the grave, So that means something one point seven bill

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Speaker 2: truly in market cap. Company here stocks up up two

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Speaker 2: hundred and thirty percent over the trailing twelve months, So Gene,

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Speaker 2: that tells me, boy, the bar is extraordinarily high here.

436
00:21:52,440 --> 00:21:54,679
Speaker 2: What's a win for this company? What's a loss for

437
00:21:54,720 --> 00:21:58,400
Speaker 2: this company? Here? After the close, I.

438
00:21:58,320 --> 00:22:00,800
Speaker 8: Don't know what the stock's going to do tomorrow. It's

439
00:22:00,880 --> 00:22:03,240
Speaker 8: hard really when you see that kind of volatility built

440
00:22:03,240 --> 00:22:05,280
Speaker 8: in the options. That means there is a lot of

441
00:22:05,359 --> 00:22:08,880
Speaker 8: jocking beyond what's going on with kind of fundamental investors.

442
00:22:08,920 --> 00:22:11,240
Speaker 8: So anything can happen. The stock could be up big

443
00:22:11,640 --> 00:22:14,280
Speaker 8: on the print and could fade tomorrow. The opposite could

444
00:22:14,320 --> 00:22:18,119
Speaker 8: happen too. From my perspective, what is most important is

445
00:22:18,560 --> 00:22:23,600
Speaker 8: understanding how the commentary for the company is going to

446
00:22:23,720 --> 00:22:27,440
Speaker 8: impact calendar twenty five revenue growth. And just to kind

447
00:22:27,440 --> 00:22:29,760
Speaker 8: of put this in a quick perspective, the company's going

448
00:22:29,840 --> 00:22:32,040
Speaker 8: to grow this quarter at around two hundred and fifty

449
00:22:32,080 --> 00:22:36,040
Speaker 8: percent year ofvery year. The growth expectations for calendar twenty

450
00:22:36,040 --> 00:22:38,840
Speaker 8: four is sixty four percent, a pretty big slode on

451
00:22:38,840 --> 00:22:41,200
Speaker 8: because the law of large numbers and then another big

452
00:22:41,200 --> 00:22:44,960
Speaker 8: slowdown in twenty five down to seventeen percent. So effectively,

453
00:22:45,119 --> 00:22:48,399
Speaker 8: investors recognize this company has been through just a breath

454
00:22:48,440 --> 00:22:52,160
Speaker 8: taking growth period here. But the general consensus is that

455
00:22:52,280 --> 00:22:55,760
Speaker 8: the business is going to hit the wall. And even

456
00:22:55,800 --> 00:22:57,760
Speaker 8: if you look at the valuation right now, it's actually

457
00:22:57,760 --> 00:23:00,639
Speaker 8: a pretty reasonable valuation. It trades essentially in line with

458
00:23:00,680 --> 00:23:04,800
Speaker 8: its earnings growth expectations for twenty five. So to answer questions,

459
00:23:04,800 --> 00:23:08,800
Speaker 8: what I'm looking for tonight is for CFO Jensen Wong

460
00:23:08,960 --> 00:23:11,520
Speaker 8: just to reiterate what he has said related to where

461
00:23:11,520 --> 00:23:14,680
Speaker 8: we are with an AI and just to briefly recap

462
00:23:14,760 --> 00:23:17,960
Speaker 8: that he has this these four talking points. He talks

463
00:23:17,960 --> 00:23:21,280
Speaker 8: about these four waves of AI and the current phase

464
00:23:21,320 --> 00:23:25,160
Speaker 8: that we're just starting in is BAI infrastructure. That's the hyperscalers,

465
00:23:25,160 --> 00:23:29,120
Speaker 8: that's AI startups. Phase two is enterprise applications that would

466
00:23:29,119 --> 00:23:32,480
Speaker 8: be like copilot. Phase three is going to be heavy

467
00:23:32,520 --> 00:23:35,159
Speaker 8: industry getting generit of AI, and he said that is

468
00:23:35,200 --> 00:23:39,399
Speaker 8: the largest opportunity. Phase four is sovereign nations. I mean,

469
00:23:39,400 --> 00:23:42,440
Speaker 8: there's a lot here. So my bottom line is that

470
00:23:42,800 --> 00:23:47,840
Speaker 8: if investors ultimately walk away from this quarter tomorrow, tonight

471
00:23:48,080 --> 00:23:51,040
Speaker 8: next week and say we're still very early in this

472
00:23:51,359 --> 00:23:54,359
Speaker 8: and Nvidia has got a great pole position, then those

473
00:23:54,400 --> 00:23:58,960
Speaker 8: expectations for calendar twenty five probably start moving higher, which

474
00:23:59,000 --> 00:24:02,080
Speaker 8: is ultimately going to be for the stock and gene when.

475
00:24:01,960 --> 00:24:04,520
Speaker 5: We look at it from a valuation standpoint, about thirty

476
00:24:04,560 --> 00:24:06,879
Speaker 5: times twenty twenty five EPs.

477
00:24:07,240 --> 00:24:09,280
Speaker 2: When you look at what the path.

478
00:24:09,040 --> 00:24:11,919
Speaker 5: Forward that you're mentioning Foreign Video looks like, is it

479
00:24:12,040 --> 00:24:14,480
Speaker 5: just continuing to grow the AI PI, if you will,

480
00:24:14,560 --> 00:24:17,560
Speaker 5: or is it being able to fend off would be rivals.

481
00:24:20,359 --> 00:24:23,200
Speaker 8: Well, I think that just the pie the TAM expansion.

482
00:24:23,200 --> 00:24:25,200
Speaker 8: I mean, this has been one of the talking points

483
00:24:25,240 --> 00:24:28,000
Speaker 8: from AMD. If you look at what they've said at

484
00:24:28,000 --> 00:24:31,240
Speaker 8: their analyst day last fall versus what they've said a

485
00:24:31,320 --> 00:24:36,080
Speaker 8: month ago. They've basically said that their addressable market would

486
00:24:36,119 --> 00:24:38,720
Speaker 8: four x, and then that was three four months ago,

487
00:24:38,760 --> 00:24:40,480
Speaker 8: and a month ago they said it with two x

488
00:24:40,480 --> 00:24:42,720
Speaker 8: from that four x. I mean, these are just it's

489
00:24:42,800 --> 00:24:45,520
Speaker 8: mind boggling kind of how fast these numbers are going up.

490
00:24:45,520 --> 00:24:47,920
Speaker 8: And the reason why they're saying that is they're seeing

491
00:24:47,960 --> 00:24:52,040
Speaker 8: the odor flow and so ultimately, and Video has got

492
00:24:52,040 --> 00:24:55,280
Speaker 8: an amazing product. They've got a product cycle coming up

493
00:24:55,359 --> 00:24:59,160
Speaker 8: they have basically a code and operating system that works

494
00:24:59,200 --> 00:25:02,280
Speaker 8: around what these chips do. It's a developer platform, that's

495
00:25:02,280 --> 00:25:05,360
Speaker 8: a better way to say it. So, but if they've

496
00:25:05,400 --> 00:25:08,000
Speaker 8: got such high market share right now eighty five percent

497
00:25:08,080 --> 00:25:11,440
Speaker 8: in the GPU market, it's really about continuing to expand

498
00:25:11,480 --> 00:25:13,440
Speaker 8: the TAM and I think that that's ultimately going to happen.

499
00:25:13,520 --> 00:25:17,000
Speaker 8: I mean, I'm in the camp that AI is going

500
00:25:17,080 --> 00:25:20,360
Speaker 8: to be more transformative. Twice is transformative what the Internet

501
00:25:20,880 --> 00:25:24,600
Speaker 8: has been, which is hard to wrap your head around that,

502
00:25:24,680 --> 00:25:27,600
Speaker 8: but I think that there's and video is just in

503
00:25:27,640 --> 00:25:30,080
Speaker 8: a great position relative to that opportunity.

504
00:25:30,560 --> 00:25:33,280
Speaker 2: Well, you know, gen, one of my questions is, you know,

505
00:25:33,440 --> 00:25:35,520
Speaker 2: just as a layperson here as it relates to tech spending,

506
00:25:35,520 --> 00:25:38,399
Speaker 2: how much of this tech spending associated with AI do

507
00:25:38,440 --> 00:25:42,560
Speaker 2: you believe is incremental versus maybe just shifting it around

508
00:25:42,560 --> 00:25:43,920
Speaker 2: from other budgets Here.

509
00:25:45,640 --> 00:25:48,920
Speaker 8: The most commentary we've heard is from those big tech companies.

510
00:25:48,920 --> 00:25:53,920
Speaker 8: Those are the hyperscalers. That's the companies like Google and Meta, Microsoft.

511
00:25:54,040 --> 00:25:56,200
Speaker 8: Apple hasn't said as much, but they're going to get

512
00:25:56,200 --> 00:25:58,800
Speaker 8: more into this, but what they've shared is that it

513
00:25:58,880 --> 00:26:03,240
Speaker 8: is incremental. I've talked about you know, their typical run

514
00:26:03,320 --> 00:26:07,280
Speaker 8: rate of CAPEX. Let's just call that at a typical

515
00:26:07,320 --> 00:26:10,920
Speaker 8: growth rate of ten fifteen percent a year, and those

516
00:26:10,960 --> 00:26:13,520
Speaker 8: growth rates, the spending in CAPEX is going to go up,

517
00:26:13,600 --> 00:26:16,080
Speaker 8: call it twenty five thirty percent. This is an average

518
00:26:16,080 --> 00:26:17,639
Speaker 8: if you look at some of those big companies. So

519
00:26:18,160 --> 00:26:21,520
Speaker 8: this is incremental. I mean they're seeing this as you

520
00:26:21,600 --> 00:26:24,320
Speaker 8: have to pay to play to invest in the future,

521
00:26:24,359 --> 00:26:26,880
Speaker 8: and so I think it is incremental. When you when

522
00:26:26,920 --> 00:26:30,680
Speaker 8: you kind of process, like go through the theory of

523
00:26:31,040 --> 00:26:35,199
Speaker 8: this incremental spend, that's how you get expanding addressable markets.

524
00:26:35,240 --> 00:26:37,639
Speaker 8: Is when you get that incremental spend. When things are

525
00:26:37,640 --> 00:26:40,119
Speaker 8: shuffling around, it's hard to get those expanding markets. But

526
00:26:40,280 --> 00:26:42,440
Speaker 8: in this case, I think it is. It is true.

527
00:26:42,480 --> 00:26:46,000
Speaker 8: This is just a whole new infrastructure that's being built

528
00:26:46,440 --> 00:26:49,560
Speaker 8: largely on GPUs versus the old infrastructure on CPUs, and

529
00:26:49,600 --> 00:26:51,360
Speaker 8: that is incremental spend.

530
00:26:51,520 --> 00:26:54,399
Speaker 5: And gene As we've seen the valuation skyrocket and it's

531
00:26:54,520 --> 00:26:57,879
Speaker 5: leaping above a number of well known names, the Metas

532
00:26:57,880 --> 00:26:58,120
Speaker 5: and the.

533
00:26:58,040 --> 00:26:59,080
Speaker 2: Berkshires of the world.

534
00:26:59,400 --> 00:27:03,040
Speaker 5: Can we catch Microsoft Microsoft just south of three trillion

535
00:27:03,040 --> 00:27:05,720
Speaker 5: dollars in market value compared to Nvidia's one point seven.

536
00:27:08,560 --> 00:27:11,280
Speaker 8: I think the AI opportunity is big enough that it

537
00:27:11,400 --> 00:27:14,720
Speaker 8: can catch that. I mean if in fact I'm right,

538
00:27:15,000 --> 00:27:17,280
Speaker 8: and I mean our firm is the firm deep water

539
00:27:17,480 --> 00:27:20,000
Speaker 8: firm believes that this is you know, ninety nine out

540
00:27:20,000 --> 00:27:22,760
Speaker 8: of a scale of zero to one hundred. Is AI

541
00:27:22,920 --> 00:27:27,119
Speaker 8: electricity is one hundred. It's that close and the internet's fifty.

542
00:27:27,119 --> 00:27:31,360
Speaker 8: If that's true, Yes, there is continues to be this

543
00:27:31,520 --> 00:27:34,400
Speaker 8: upside to I don't want to get carried away by

544
00:27:34,400 --> 00:27:36,120
Speaker 8: the way in the moment of kind of the hype.

545
00:27:36,160 --> 00:27:38,760
Speaker 8: I'm just trying to step back and again, I don't

546
00:27:38,760 --> 00:27:40,560
Speaker 8: know what the stock is going to do tomorrow, but

547
00:27:40,640 --> 00:27:44,119
Speaker 8: I do have a sense about how impactful AI is

548
00:27:44,200 --> 00:27:47,120
Speaker 8: ultimately going to be. And so what is that kind

549
00:27:47,119 --> 00:27:50,280
Speaker 8: of that high end of the market cap expansion When

550
00:27:50,320 --> 00:27:53,400
Speaker 8: I was talking about that fourth point sovereign nations, this

551
00:27:53,480 --> 00:27:57,240
Speaker 8: is countries needing to have their own AI to really

552
00:27:57,280 --> 00:28:01,040
Speaker 8: reflect their intelligence and their culture. There are some pretty

553
00:28:01,400 --> 00:28:05,600
Speaker 8: bold and big objectives that these very deep pockets are

554
00:28:05,600 --> 00:28:08,520
Speaker 8: going after. When you think about that relative to the

555
00:28:08,560 --> 00:28:10,520
Speaker 8: market cap, you can build a case that it can

556
00:28:10,520 --> 00:28:11,200
Speaker 8: go much higher.

557
00:28:11,240 --> 00:28:13,119
Speaker 2: Gene, thanks so much again, always appreciate getting your time.

558
00:28:13,200 --> 00:28:15,280
Speaker 2: Gen Munster, managing partner and co founder of deep Water

559
00:28:15,320 --> 00:28:18,239
Speaker 2: Asset Management in Nvidia. After the close gene Monster, one

560
00:28:18,240 --> 00:28:20,080
Speaker 2: of the best voice coming out of the valley.

561
00:28:21,600 --> 00:28:25,480
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

562
00:28:25,560 --> 00:28:29,080
Speaker 1: weekdays at ten am Eastern on applecar Play and Android

563
00:28:29,119 --> 00:28:31,879
Speaker 1: Auto with the Bloomberg Business app. You can also listen

564
00:28:32,000 --> 00:28:35,080
Speaker 1: live on Amazon Alexa from our flagship New York station,

565
00:28:35,440 --> 00:28:38,240
Speaker 1: Just Say Alexa playing Bloomberg eleven thirty.

566
00:28:39,480 --> 00:28:41,600
Speaker 2: Potentially a big day in the market today. After the clothes,

567
00:28:41,640 --> 00:28:43,480
Speaker 2: we get in Vidia reporting. We'll see what it means

568
00:28:43,480 --> 00:28:46,120
Speaker 2: for that stock, for the tech sector, for the market overall.

569
00:28:46,760 --> 00:28:48,320
Speaker 2: So let's just get a sense of what's happening out

570
00:28:48,320 --> 00:28:49,600
Speaker 2: there in this market place.

571
00:28:49,640 --> 00:28:49,880
Speaker 4: Here.

572
00:28:50,080 --> 00:28:52,440
Speaker 2: Carol Pepper joins us. She's a founder and CEO of

573
00:28:52,520 --> 00:28:58,080
Speaker 2: Pepper International. Joining us on a zoom call from NYC. Carol,

574
00:28:58,080 --> 00:29:00,360
Speaker 2: thanks so much for joining us here. I don't know

575
00:29:00,400 --> 00:29:02,760
Speaker 2: if you're a tech geek or you're into this old

576
00:29:03,120 --> 00:29:05,560
Speaker 2: in vidio thing, but boy, it's certainly had an impact

577
00:29:06,120 --> 00:29:08,240
Speaker 2: on this market. Certainly the AI has been a big,

578
00:29:08,240 --> 00:29:10,880
Speaker 2: big narrative for this market. How do you think about that?

579
00:29:12,240 --> 00:29:15,560
Speaker 9: Well, AI is the next large trend that people need

580
00:29:15,600 --> 00:29:16,120
Speaker 9: to ride.

581
00:29:16,960 --> 00:29:19,480
Speaker 10: As you know, I manage money for family offices that

582
00:29:19,600 --> 00:29:21,960
Speaker 10: have greater than one hundred million dollars in net worth,

583
00:29:22,040 --> 00:29:25,200
Speaker 10: So we're always looking for the important long term trends.

584
00:29:25,280 --> 00:29:28,480
Speaker 10: And when Vidias burst on the scene and began to

585
00:29:28,560 --> 00:29:33,360
Speaker 10: support the development of AI, it became a very interesting stock.

586
00:29:34,240 --> 00:29:36,880
Speaker 10: The reporting today whether it's up or down, and whether

587
00:29:36,920 --> 00:29:39,640
Speaker 10: the market likes it short term, it's a long term play.

588
00:29:39,720 --> 00:29:40,440
Speaker 9: So I tell.

589
00:29:40,280 --> 00:29:42,800
Speaker 10: People on a fear day when in video is perhaps

590
00:29:42,800 --> 00:29:45,840
Speaker 10: down a bit, even perhaps after earnings are announced, it

591
00:29:45,920 --> 00:29:47,880
Speaker 10: might go down slightly for a few days.

592
00:29:48,000 --> 00:29:51,400
Speaker 9: That's what happens. That's a stock to buy and hold

593
00:29:51,480 --> 00:29:51,960
Speaker 9: long term.

594
00:29:52,000 --> 00:29:54,120
Speaker 10: Ten years from now, you'll be very glad you bought

595
00:29:54,120 --> 00:29:57,040
Speaker 10: that security because it's it's really a way to start

596
00:29:57,080 --> 00:29:59,520
Speaker 10: riding the trend, as is Microsoft, by the way, because

597
00:29:59,520 --> 00:30:03,080
Speaker 10: Microsoft is not going to let Nvidia take that whole market.

598
00:30:03,120 --> 00:30:06,280
Speaker 10: They're starting to develop some new technology as well toward AI.

599
00:30:06,960 --> 00:30:09,320
Speaker 5: So caro, what else do you like in the call

600
00:30:09,360 --> 00:30:13,480
Speaker 5: it AI semiconductor space. Then if buying the dip or

601
00:30:13,680 --> 00:30:16,160
Speaker 5: sell off on Nvidia and kind of the ripple effects

602
00:30:16,360 --> 00:30:18,080
Speaker 5: does play out, where else would you be looking to

603
00:30:18,080 --> 00:30:18,880
Speaker 5: put money to work.

604
00:30:19,680 --> 00:30:22,320
Speaker 9: Well, I just think you want to go with a

605
00:30:22,360 --> 00:30:23,760
Speaker 9: big basket if you can.

606
00:30:23,840 --> 00:30:26,200
Speaker 10: So for a lot of the investors out there that

607
00:30:26,240 --> 00:30:28,920
Speaker 10: aren't necessarily buying single stocks, you can look at even

608
00:30:29,280 --> 00:30:32,360
Speaker 10: baskets like QQQ. There are other AI baskets that are

609
00:30:32,360 --> 00:30:34,680
Speaker 10: going to be coming out very shortly, you know.

610
00:30:35,200 --> 00:30:37,040
Speaker 9: I think you buy market leaders right now.

611
00:30:37,080 --> 00:30:39,760
Speaker 10: So I would stick with Nvidia for your main play

612
00:30:39,800 --> 00:30:42,680
Speaker 10: on AI and Microsoft at the moment. It doesn't mean

613
00:30:42,680 --> 00:30:45,720
Speaker 10: there won't be new players that are interesting coming forward,

614
00:30:45,760 --> 00:30:49,240
Speaker 10: but at the moment, market leaders have continued to lead.

615
00:30:49,400 --> 00:30:52,440
Speaker 10: So this has been a market where the biggest, biggest

616
00:30:52,440 --> 00:30:55,440
Speaker 10: caps with the most money whatever sector you're looking at,

617
00:30:55,520 --> 00:30:58,640
Speaker 10: or leading. So don't get too cute, buy the leaders

618
00:30:58,720 --> 00:31:00,680
Speaker 10: just on a fear day when you can get in

619
00:31:00,680 --> 00:31:01,600
Speaker 10: at a decent price.

620
00:31:01,680 --> 00:31:04,800
Speaker 5: All right, Carol, So you're mentioning in Nvidia, Microsoft two

621
00:31:04,840 --> 00:31:07,560
Speaker 5: of the Magnificent seven people wanting to call it the

622
00:31:07,760 --> 00:31:12,440
Speaker 5: Fab five. Is a shout out to the Michigan basketball team.

623
00:31:12,800 --> 00:31:16,040
Speaker 5: What's your take on the rest of the group, just

624
00:31:16,160 --> 00:31:19,440
Speaker 5: giving kind of the divide that we've seen within Nvidia

625
00:31:19,720 --> 00:31:21,640
Speaker 5: really kind of carrying the baton at this point.

626
00:31:22,840 --> 00:31:25,240
Speaker 10: Yeah, Well, the one I would toss out, which is

627
00:31:25,480 --> 00:31:27,800
Speaker 10: which I think will get tossed out itself, is Tesla.

628
00:31:28,440 --> 00:31:30,520
Speaker 9: I mean, I think Elon musk is.

629
00:31:30,640 --> 00:31:33,280
Speaker 10: You know, his attention is to divide between too many things,

630
00:31:33,360 --> 00:31:36,680
Speaker 10: and he's becoming a political liability. He's putting himself far

631
00:31:36,760 --> 00:31:39,640
Speaker 10: out on the spectrum. So that's the one that I

632
00:31:39,680 --> 00:31:41,360
Speaker 10: would toss. I don't think they're going to be a

633
00:31:41,360 --> 00:31:43,920
Speaker 10: market leader five years from now at all, because his

634
00:31:44,400 --> 00:31:47,640
Speaker 10: attention is too split and he's too troublesome. So I

635
00:31:47,720 --> 00:31:49,840
Speaker 10: get rid of Tesla and I'd buy the others as

636
00:31:49,840 --> 00:31:52,640
Speaker 10: a basket. My favorite stock for years and yours.

637
00:31:52,360 --> 00:31:53,160
Speaker 9: Has been Amazon.

638
00:31:53,320 --> 00:31:56,120
Speaker 10: I think that will continue to be a strong leader.

639
00:31:56,120 --> 00:32:00,360
Speaker 10: They're continuing to expand, and that they will take.

640
00:32:00,200 --> 00:32:03,000
Speaker 9: Over the pharmacy spase eventually. That's something they're trying to do,

641
00:32:03,200 --> 00:32:04,920
Speaker 9: and that's the stock to watch.

642
00:32:05,160 --> 00:32:07,720
Speaker 2: Hey, Carol, you've been in this managing you know, the

643
00:32:07,720 --> 00:32:12,080
Speaker 2: wealth of these high networth families for decades. Now. How

644
00:32:12,080 --> 00:32:14,600
Speaker 2: does that change? How's that business change? What are your clients?

645
00:32:14,800 --> 00:32:16,880
Speaker 2: Are your clients today different than maybe they were twenty

646
00:32:16,960 --> 00:32:17,360
Speaker 2: years ago?

647
00:32:18,360 --> 00:32:21,160
Speaker 10: Yeah, I think family offices and high net worth individuals

648
00:32:21,200 --> 00:32:24,680
Speaker 10: have become extremely sophisticated. Over the last twenty years, most

649
00:32:24,720 --> 00:32:28,520
Speaker 10: of them have pulled the acid allocation decision and the

650
00:32:28,560 --> 00:32:32,520
Speaker 10: stock selection decision inside of their own private family offices.

651
00:32:32,560 --> 00:32:34,880
Speaker 10: That's what I do. I act as a CIO to

652
00:32:35,000 --> 00:32:38,240
Speaker 10: the single family offices. They used to give all of

653
00:32:38,240 --> 00:32:40,640
Speaker 10: those decisions to the banks, but that's like you know,

654
00:32:40,800 --> 00:32:42,760
Speaker 10: handing the fox the keys to the henhouse.

655
00:32:42,800 --> 00:32:44,240
Speaker 9: They understand that.

656
00:32:44,280 --> 00:32:47,560
Speaker 10: Banks are actually like supermarkets, and you should go shopping

657
00:32:47,600 --> 00:32:49,360
Speaker 10: at a bank with a list of what you want.

658
00:32:49,800 --> 00:32:52,240
Speaker 10: For example, don't let the bank tell you how much

659
00:32:52,320 --> 00:32:55,040
Speaker 10: large cap growth to put in your portfolios. You tell

660
00:32:55,080 --> 00:32:57,320
Speaker 10: the bank what you want and you let them show

661
00:32:57,360 --> 00:32:58,320
Speaker 10: you the products that they have.

662
00:32:58,480 --> 00:33:02,800
Speaker 9: So the power balance has really changed. Now we see family.

663
00:33:02,480 --> 00:33:06,480
Speaker 10: Offices taking control of their risk appetite, their asset allocation.

664
00:33:07,080 --> 00:33:09,920
Speaker 9: They're not following every trend that comes out on the street.

665
00:33:10,000 --> 00:33:13,480
Speaker 10: You know, suddenly Germany's gonna outperform the US, or some

666
00:33:13,800 --> 00:33:15,720
Speaker 10: trend will be pushed by Wall Street for a few

667
00:33:15,720 --> 00:33:18,640
Speaker 10: months and then fizzle. The families aren't buying it. You know,

668
00:33:18,760 --> 00:33:21,479
Speaker 10: the families were out of China long before the general

669
00:33:21,520 --> 00:33:24,720
Speaker 10: market was. Because the bankers don't like to admit mistakes

670
00:33:24,720 --> 00:33:27,960
Speaker 10: so they don't pivot very quickly. But the family offices

671
00:33:28,000 --> 00:33:30,760
Speaker 10: can pivot in a day and change their mind about something.

672
00:33:30,880 --> 00:33:34,320
Speaker 10: So that's why they tend to be really leading investors.

673
00:33:34,920 --> 00:33:38,320
Speaker 10: They're into these trends long before everybody else is because

674
00:33:38,320 --> 00:33:40,160
Speaker 10: they have no one to answer to about themselves.

675
00:33:40,840 --> 00:33:44,040
Speaker 5: And Carol, with kind of that topic in mind, how

676
00:33:44,040 --> 00:33:45,800
Speaker 5: far out are you going at this point in time

677
00:33:46,040 --> 00:33:48,040
Speaker 5: on the risk curve you mentioned in video really kind

678
00:33:48,040 --> 00:33:49,800
Speaker 5: of setting the tone for AI and being a long

679
00:33:49,880 --> 00:33:52,640
Speaker 5: term buying opportunity. You're focusing on some of these big

680
00:33:52,680 --> 00:33:56,200
Speaker 5: tech names. Are you dabbling and putting exposure into smaller

681
00:33:56,520 --> 00:33:58,760
Speaker 5: maybe emerging technologies.

682
00:33:59,320 --> 00:34:00,320
Speaker 9: Yeah, I mean Eaton.

683
00:34:00,480 --> 00:34:03,440
Speaker 10: Family offices tend to look at direct smaller place, so

684
00:34:03,480 --> 00:34:06,000
Speaker 10: we go in at the very early stage, sometimes pre

685
00:34:06,080 --> 00:34:09,520
Speaker 10: seed or seat stage, into venture capital. We don't tend

686
00:34:09,600 --> 00:34:12,440
Speaker 10: to be you know, in the pink sheets or the

687
00:34:12,480 --> 00:34:15,200
Speaker 10: small publics. Those are in difficult places. That's why you

688
00:34:15,239 --> 00:34:17,640
Speaker 10: see now a lot more companies staying private and then

689
00:34:17,680 --> 00:34:21,640
Speaker 10: going public with a billion dollar valuation because there's a graveyard.

690
00:34:21,719 --> 00:34:24,120
Speaker 10: Unfortunately with a lot of small caps. They'll rally for

691
00:34:24,160 --> 00:34:27,920
Speaker 10: a few days and then they'll die again. So we

692
00:34:28,000 --> 00:34:30,880
Speaker 10: take the bets in the small companies, in directs or

693
00:34:30,920 --> 00:34:33,880
Speaker 10: in private equity not so much fun sometimes funds, but

694
00:34:33,960 --> 00:34:37,920
Speaker 10: more direct frankly, and then go for the market leaders

695
00:34:37,960 --> 00:34:41,200
Speaker 10: in the market. And that's how we sort of split

696
00:34:41,239 --> 00:34:44,480
Speaker 10: the risk reward scenario.

697
00:34:44,160 --> 00:34:45,880
Speaker 9: There than cal on the side.

698
00:34:45,960 --> 00:34:48,520
Speaker 2: How much what do your clients ask of you as

699
00:34:48,520 --> 00:34:51,560
Speaker 2: it relates to alternative investments and if to the extent

700
00:34:51,600 --> 00:34:53,279
Speaker 2: they have that, how do you scratch that?

701
00:34:54,440 --> 00:34:54,640
Speaker 4: Oh?

702
00:34:54,680 --> 00:34:58,239
Speaker 10: Well, it's Alternatives are a huge part of family office portfolios.

703
00:34:58,320 --> 00:35:01,520
Speaker 10: Sometimes they're thirty to forty percent of portfolios. Why because again,

704
00:35:01,600 --> 00:35:04,680
Speaker 10: family offices can go into things like venture debt, they

705
00:35:04,680 --> 00:35:07,640
Speaker 10: can go into private lending, they can go into all

706
00:35:07,719 --> 00:35:11,080
Speaker 10: kinds of you know, esoteric areas or very specialized real

707
00:35:11,200 --> 00:35:13,880
Speaker 10: estate plays in an area that they know well. So

708
00:35:14,239 --> 00:35:18,719
Speaker 10: alternatives are huge for family offices because generally there's more risk,

709
00:35:18,760 --> 00:35:21,600
Speaker 10: there's less liquidity, but there's more return and alternatives and

710
00:35:21,640 --> 00:35:24,720
Speaker 10: that's something family offices can definitely handle.

711
00:35:25,160 --> 00:35:26,920
Speaker 9: You know, my family offices, I always.

712
00:35:26,640 --> 00:35:29,040
Speaker 10: Have them have at least two years worth of expenses

713
00:35:29,080 --> 00:35:32,160
Speaker 10: set aside in cash and money markets earning four or

714
00:35:32,160 --> 00:35:34,480
Speaker 10: five percent, and then we go take risk with longer

715
00:35:34,560 --> 00:35:36,000
Speaker 10: term money so they're.

716
00:35:35,920 --> 00:35:38,320
Speaker 9: Very open and very interested on alternatives.

717
00:35:38,680 --> 00:35:42,520
Speaker 10: Alternatives in real estate funding, biotechs funding, you know.

718
00:35:42,520 --> 00:35:44,160
Speaker 9: Research, genetic research.

719
00:35:44,200 --> 00:35:47,239
Speaker 10: There's all sorts of very very interesting deals that go

720
00:35:47,360 --> 00:35:49,920
Speaker 10: family office to family office and never see the inside

721
00:35:49,920 --> 00:35:51,160
Speaker 10: of JP Morgan or.

722
00:35:51,239 --> 00:35:52,720
Speaker 4: Oldman Sachs Carol.

723
00:35:53,000 --> 00:35:54,759
Speaker 5: During my day job, when I'm not hanging out with Paul,

724
00:35:54,760 --> 00:35:57,719
Speaker 5: I read about the IPO market and it still very

725
00:35:57,800 --> 00:36:00,640
Speaker 5: much feels when I talk to venture cap less investors

726
00:36:00,640 --> 00:36:02,520
Speaker 5: as well as kind of some of the crossover funds,

727
00:36:02,520 --> 00:36:05,839
Speaker 5: that it is a investor friendly market where you can

728
00:36:05,920 --> 00:36:08,799
Speaker 5: walk away on valuation or pick up some of these

729
00:36:08,960 --> 00:36:11,920
Speaker 5: shares of companies in the private markets at a steep discount.

730
00:36:12,040 --> 00:36:14,400
Speaker 5: How are you putting money to work in the private

731
00:36:14,840 --> 00:36:18,240
Speaker 5: arena and how has that really shifted from a peak,

732
00:36:18,360 --> 00:36:20,239
Speaker 5: you know, just over two years ago.

733
00:36:21,160 --> 00:36:24,840
Speaker 10: Yeah, I think the private market obviously you can't expect

734
00:36:24,840 --> 00:36:27,120
Speaker 10: a big and quick in and out right now.

735
00:36:27,520 --> 00:36:29,160
Speaker 9: Markets drifts still very tenuous.

736
00:36:29,200 --> 00:36:31,439
Speaker 10: I think they'll get less tenuous when rates come down

737
00:36:31,440 --> 00:36:33,680
Speaker 10: a bit so that financing gets easier.

738
00:36:34,560 --> 00:36:35,960
Speaker 9: But things have not.

739
00:36:36,120 --> 00:36:37,960
Speaker 10: You know, people are out there trying to beat up

740
00:36:37,960 --> 00:36:40,400
Speaker 10: the small companies and get in at the good valuation.

741
00:36:40,640 --> 00:36:42,920
Speaker 10: And you know, evaluation for a company that might have

742
00:36:42,920 --> 00:36:45,480
Speaker 10: been twenty million is now five and it's heartbreaking for

743
00:36:45,520 --> 00:36:48,960
Speaker 10: the entrepreneurs. So you can pick up some discounts in

744
00:36:49,000 --> 00:36:51,720
Speaker 10: that respect because they're just people that couldn't get funded.

745
00:36:52,800 --> 00:36:55,239
Speaker 10: But you still have to look for the fundamentals, which

746
00:36:55,280 --> 00:36:58,239
Speaker 10: is a very strong team, a very strong you know,

747
00:36:58,560 --> 00:37:01,960
Speaker 10: go back to Michael Porter Competitive Advantage. You know, Harvard

748
00:37:01,960 --> 00:37:04,880
Speaker 10: Business School, read that book. It's a classic. Why is

749
00:37:04,880 --> 00:37:08,399
Speaker 10: this company in existence? And why should it win? Because

750
00:37:08,440 --> 00:37:10,839
Speaker 10: if there's no winning strategy, it doesn't matter how cheap

751
00:37:10,840 --> 00:37:13,080
Speaker 10: you get the company, it's just going to die. Because

752
00:37:13,120 --> 00:37:15,400
Speaker 10: a lot of these companies are dying now because they can't.

753
00:37:15,719 --> 00:37:18,319
Speaker 10: The old model was you just live on rounds and

754
00:37:18,400 --> 00:37:20,760
Speaker 10: rounds of financing until eventually you pop.

755
00:37:21,320 --> 00:37:22,120
Speaker 9: That model's gone.

756
00:37:22,200 --> 00:37:26,280
Speaker 10: There's less tolerance for continually refunding. A company that can't

757
00:37:26,320 --> 00:37:30,440
Speaker 10: earn can't make earnings unless it's led by somebody huge,

758
00:37:30,480 --> 00:37:32,560
Speaker 10: you know, like the founder of Uber or something where

759
00:37:32,600 --> 00:37:34,040
Speaker 10: you know that guy knows how to do it. But

760
00:37:34,400 --> 00:37:37,160
Speaker 10: for new startups, you're looking for cash flow a lot earlier,

761
00:37:37,680 --> 00:37:40,319
Speaker 10: and that gives and people are raising smaller rounds, so

762
00:37:40,360 --> 00:37:42,520
Speaker 10: you get into a lot of sprinkle into some small

763
00:37:42,520 --> 00:37:45,040
Speaker 10: pre seed rounds and then help the company grow is

764
00:37:45,120 --> 00:37:48,160
Speaker 10: more of the strategy these days in my experience.

765
00:37:48,640 --> 00:37:50,920
Speaker 5: Gotcha, Carol, we only have about thirty seconds left. One

766
00:37:50,920 --> 00:37:52,799
Speaker 5: of the stocks we talked about at the top of

767
00:37:52,800 --> 00:37:55,840
Speaker 5: the show, Palato Networks, down twenty six percent. This is

768
00:37:55,880 --> 00:37:58,840
Speaker 5: a big cybersecurity play. Are those type of selloffs that

769
00:37:58,880 --> 00:38:00,279
Speaker 5: you would look to buy?

770
00:38:01,480 --> 00:38:04,000
Speaker 10: Absolutely, I don't happen to know that company very well,

771
00:38:04,040 --> 00:38:07,279
Speaker 10: but yes, I mean there are the market swings a lot,

772
00:38:07,400 --> 00:38:09,560
Speaker 10: So you should have your favorite names, know why you

773
00:38:09,680 --> 00:38:11,680
Speaker 10: like them, now, how they're going to fit into your portfolio,

774
00:38:11,719 --> 00:38:13,920
Speaker 10: and what size you want, and then wait for the

775
00:38:13,960 --> 00:38:15,880
Speaker 10: fear day. You know, there'll be a fear day for

776
00:38:16,000 --> 00:38:18,799
Speaker 10: Nvidia too. Even though it's so high, people have said

777
00:38:18,840 --> 00:38:20,719
Speaker 10: to me, I can't get in. You know, people were

778
00:38:20,719 --> 00:38:23,080
Speaker 10: saying that about Amazon ten years ago. Oh it's too high,

779
00:38:23,120 --> 00:38:25,840
Speaker 10: I can't get in. So those value guys miss the

780
00:38:26,000 --> 00:38:28,719
Speaker 10: entire run. So just you know, hold your breath, hold

781
00:38:28,760 --> 00:38:31,319
Speaker 10: your nose, and get in on a fear day to

782
00:38:31,400 --> 00:38:32,080
Speaker 10: the stocks that.

783
00:38:32,040 --> 00:38:32,839
Speaker 9: You're interested in.

784
00:38:32,880 --> 00:38:35,279
Speaker 10: And by the way, cybersecurity long term is a very

785
00:38:35,320 --> 00:38:37,600
Speaker 10: important play and trend that is.

786
00:38:37,560 --> 00:38:38,320
Speaker 9: Not going away.

787
00:38:38,560 --> 00:38:40,080
Speaker 2: Hi, Carol, Thank you so much for your time. Really

788
00:38:40,120 --> 00:38:44,480
Speaker 2: appreciate it. Carol Pepper, President, founder and CEO Pepper International,

789
00:38:44,640 --> 00:38:47,680
Speaker 2: joining us via that Zoom thing from New York City.

790
00:38:47,719 --> 00:38:49,200
Speaker 2: I appreciate getting a few minutes of your time.

791
00:38:50,719 --> 00:38:54,600
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

792
00:38:54,680 --> 00:38:58,200
Speaker 1: weekdays at ten am Eastern on applecar Play and Android

793
00:38:58,239 --> 00:39:01,400
Speaker 1: Auto with the Bloomberg Business. You can also listen live

794
00:39:01,520 --> 00:39:04,680
Speaker 1: on Amazon Alexa from our flagship New York station, Just

795
00:39:04,760 --> 00:39:07,640
Speaker 1: Say Alexa playing Bloomberg eleven thirty.

796
00:39:09,160 --> 00:39:13,200
Speaker 2: Looking at bitcoin here memory of Matt Miller boys since

797
00:39:13,239 --> 00:39:16,120
Speaker 2: a March low last year March of last year, except

798
00:39:16,120 --> 00:39:18,560
Speaker 2: about one hundred and fifty five percent. It just had

799
00:39:18,600 --> 00:39:20,320
Speaker 2: such a huge move and there's a lot of reasons

800
00:39:20,320 --> 00:39:23,560
Speaker 2: behind that, including we got to spot bitcoin ETF, which

801
00:39:23,560 --> 00:39:25,640
Speaker 2: I think the crypto kids are all happy about. Cave

802
00:39:25,719 --> 00:39:28,680
Speaker 2: Tagupta joins and she's a founder and managing partner of

803
00:39:28,760 --> 00:39:32,239
Speaker 2: Delta Blockchain Fund. She joins us on Zoom from New

804
00:39:32,320 --> 00:39:36,279
Speaker 2: York City. Coveta, big move here in bitcoin. I'd love

805
00:39:36,320 --> 00:39:38,960
Speaker 2: to get your thoughts about kind of what's really driving

806
00:39:39,000 --> 00:39:41,719
Speaker 2: it here over the last you know, kind of eight

807
00:39:41,719 --> 00:39:43,360
Speaker 2: to nine ten months.

808
00:39:44,600 --> 00:39:46,600
Speaker 11: First of all, paulin Biley, thank you for having me.

809
00:39:48,480 --> 00:39:50,799
Speaker 11: I think it's been a very interesting journey. People in

810
00:39:50,840 --> 00:39:52,600
Speaker 11: the space already knew that.

811
00:39:53,080 --> 00:39:53,799
Speaker 7: Of course, the.

812
00:39:53,880 --> 00:39:58,560
Speaker 11: Anticipation of Bitcoin ETF plus the halving of bitcoin which

813
00:39:58,640 --> 00:40:01,600
Speaker 11: is about to happen in May starting from April, which

814
00:40:01,680 --> 00:40:03,520
Speaker 11: is going to make it more difficult to.

815
00:40:03,520 --> 00:40:04,840
Speaker 7: Produce new bitcoins.

816
00:40:05,480 --> 00:40:08,800
Speaker 11: So the basic principle of economics of supply and demand

817
00:40:08,880 --> 00:40:11,759
Speaker 11: is going to be off. Are going to trigger a

818
00:40:11,800 --> 00:40:15,359
Speaker 11: lot of bitcoin movement in a positive direction to.

819
00:40:15,360 --> 00:40:18,279
Speaker 5: The downside, though with the underlying risk a lot of

820
00:40:18,360 --> 00:40:23,040
Speaker 5: uncertainty from the stock markets perspective. Is fifty thousand a

821
00:40:23,040 --> 00:40:24,960
Speaker 5: support level? Kind of what do you look at when

822
00:40:25,000 --> 00:40:29,239
Speaker 5: you're seeing potential downside, just given how volatile bitcoin historically

823
00:40:29,280 --> 00:40:31,800
Speaker 5: has been pulling back from some of these big rallies.

824
00:40:32,880 --> 00:40:35,919
Speaker 11: Yeah, and I don't think this is all time high.

825
00:40:35,960 --> 00:40:38,360
Speaker 11: As you said that, it is a support point. The

826
00:40:38,400 --> 00:40:42,480
Speaker 11: support point may go down to early forties or mid forties,

827
00:40:42,960 --> 00:40:45,239
Speaker 11: but I doubt it's going to go down before it

828
00:40:45,320 --> 00:40:48,040
Speaker 11: reaches an all time higher. We see a cryptosummer end

829
00:40:48,080 --> 00:40:50,360
Speaker 11: of this year to mid of next year, back to

830
00:40:50,480 --> 00:40:54,520
Speaker 11: sixteen or in twenties anytime soon for an year or two.

831
00:40:55,120 --> 00:40:57,440
Speaker 7: I feel like there is so much of new.

832
00:40:57,239 --> 00:41:00,439
Speaker 11: Capital because of the Bitcoin ETF, which has come into

833
00:41:00,440 --> 00:41:03,759
Speaker 11: the market multi billion dollars, that the there is now

834
00:41:03,800 --> 00:41:05,960
Speaker 11: going to be a continuous demand for bitcoin.

835
00:41:06,400 --> 00:41:09,160
Speaker 2: So come to hell else? I mean, should we expect

836
00:41:09,360 --> 00:41:13,480
Speaker 2: an ethereum bitcoin? I mean e ETF going forward? Is

837
00:41:13,480 --> 00:41:15,400
Speaker 2: that kind of the next thing you guys are looking.

838
00:41:15,160 --> 00:41:19,839
Speaker 11: For Ethereum is the technology and ether ETF. Yes, there

839
00:41:19,880 --> 00:41:22,440
Speaker 11: is a conversation going on. And why not because at

840
00:41:22,480 --> 00:41:24,360
Speaker 11: the end of the day, ETF is the wages for

841
00:41:24,440 --> 00:41:27,720
Speaker 11: the institutional investors within us to be able to hold

842
00:41:27,760 --> 00:41:32,319
Speaker 11: it in a much more credible manner and to have

843
00:41:32,440 --> 00:41:34,000
Speaker 11: more capital injected in it.

844
00:41:34,400 --> 00:41:36,920
Speaker 7: I am, personally, honestly at this point of time, if

845
00:41:36,920 --> 00:41:37,399
Speaker 7: it's just.

846
00:41:37,719 --> 00:41:42,680
Speaker 11: The price or the technology from both perspective, more bullish

847
00:41:42,840 --> 00:41:47,200
Speaker 11: on Ether than Bitcoin. I do feel like the Ether

848
00:41:47,440 --> 00:41:50,320
Speaker 11: has been going between two point nine to three point

849
00:41:50,360 --> 00:41:54,279
Speaker 11: one kin last two three days. Again, I feel like

850
00:41:54,400 --> 00:41:56,120
Speaker 11: even if it goes down a little bit, we're going

851
00:41:56,160 --> 00:41:58,600
Speaker 11: to see the resting price in two But I am

852
00:41:58,719 --> 00:42:02,320
Speaker 11: more bullish on Ether the overall technology for ethereum.

853
00:42:02,640 --> 00:42:05,799
Speaker 5: Okay, so your bullush Ether over bitcoin. Where else are

854
00:42:05,800 --> 00:42:09,160
Speaker 5: you seeing opportunities? It seemed like coinbase was seen as

855
00:42:09,200 --> 00:42:12,040
Speaker 5: a big winner and a number of these other platforms

856
00:42:12,040 --> 00:42:16,160
Speaker 5: and technologies just given the approval of the ETFs that

857
00:42:16,200 --> 00:42:16,840
Speaker 5: Paul mentioned.

858
00:42:17,960 --> 00:42:21,520
Speaker 11: Yeah, I think within the space there is a lot

859
00:42:21,560 --> 00:42:24,600
Speaker 11: of technologies. The other layer twos which I'm really bullish about,

860
00:42:24,680 --> 00:42:27,879
Speaker 11: or the roll ups is optimism is a big one.

861
00:42:28,040 --> 00:42:31,320
Speaker 11: I do see resurrection of Solana when the DeFi institution

862
00:42:31,560 --> 00:42:34,359
Speaker 11: is going to happen, and a lot of defive which

863
00:42:34,400 --> 00:42:37,040
Speaker 11: is very similar to how the hedge funes work with

864
00:42:37,640 --> 00:42:41,560
Speaker 11: USD or different currencies. The same thing with ether, bitcoin

865
00:42:41,960 --> 00:42:46,719
Speaker 11: and with the stable coins. We have decentralized financial products

866
00:42:46,840 --> 00:42:50,759
Speaker 11: like aw A, compound, a lot of lending protococols. I

867
00:42:50,960 --> 00:42:53,719
Speaker 11: do feel like there's going to be an institutional staking

868
00:42:54,080 --> 00:42:57,040
Speaker 11: around that and that's going to really take over a

869
00:42:57,080 --> 00:43:01,279
Speaker 11: lot of technology solutions. So I'm also bid bullish on

870
00:43:01,360 --> 00:43:03,640
Speaker 11: Celestia and different data layers two.

871
00:43:04,239 --> 00:43:08,560
Speaker 2: So who's capta Who are you talking to? You've got

872
00:43:08,560 --> 00:43:11,760
Speaker 2: a fund, you invest in companies, you see very early

873
00:43:11,800 --> 00:43:15,840
Speaker 2: stage companies out there. How broad do you think is

874
00:43:15,920 --> 00:43:19,759
Speaker 2: the support out there for just crypto blockchain because we

875
00:43:19,800 --> 00:43:21,640
Speaker 2: still have the likes of a Jamie Diamond just giving

876
00:43:21,680 --> 00:43:24,960
Speaker 2: it no love whatsoever, and I'm wondering just how deep

877
00:43:25,040 --> 00:43:25,680
Speaker 2: your market is.

878
00:43:27,000 --> 00:43:30,160
Speaker 11: So you do have people like Jamie Diamond who doesn't

879
00:43:30,160 --> 00:43:32,200
Speaker 11: love it and very vocal about it. But at the

880
00:43:32,239 --> 00:43:36,840
Speaker 11: same time, the market continues, right he has been vocal

881
00:43:36,880 --> 00:43:40,160
Speaker 11: against it since sixteen or fifteen if I remember it correctly,

882
00:43:40,719 --> 00:43:44,720
Speaker 11: and we didn't disappear. The market continued, it has become

883
00:43:44,800 --> 00:43:47,640
Speaker 11: more strength, and I don't see a space wear JP

884
00:43:47,719 --> 00:43:50,440
Speaker 11: margat at any given point of time will not offer

885
00:43:50,640 --> 00:43:54,319
Speaker 11: its clients and ETF option.

886
00:43:54,239 --> 00:43:56,439
Speaker 7: On Bitcoin or on Ether over time.

887
00:43:57,640 --> 00:44:01,880
Speaker 11: So I do believe that the technology is here to stay.

888
00:44:02,320 --> 00:44:05,160
Speaker 11: Now what form of it is going to be there

889
00:44:05,200 --> 00:44:07,200
Speaker 11: and what form of token's going to be there?

890
00:44:07,320 --> 00:44:10,800
Speaker 7: Some crypto and some technology tokens that will have to

891
00:44:10,840 --> 00:44:11,800
Speaker 7: see within us.

892
00:44:11,880 --> 00:44:14,520
Speaker 11: But one of the most interesting part about this space

893
00:44:14,640 --> 00:44:18,960
Speaker 11: is it's very global. So one country, even if they

894
00:44:18,960 --> 00:44:21,759
Speaker 11: have tried in the past, has not been able to

895
00:44:21,880 --> 00:44:23,160
Speaker 11: really close.

896
00:44:22,840 --> 00:44:23,799
Speaker 7: The chapter on it.

897
00:44:24,239 --> 00:44:27,719
Speaker 11: So we continues to see countries like Abu Dhabi coming

898
00:44:27,800 --> 00:44:30,920
Speaker 11: up giving licenses, or Singapore trying to be ahead of it,

899
00:44:31,160 --> 00:44:33,960
Speaker 11: or countries in euro from UK to Lisbon trying to

900
00:44:34,000 --> 00:44:35,440
Speaker 11: be an amazing hub.

901
00:44:35,640 --> 00:44:39,040
Speaker 7: For the growth. So I just see a lot of

902
00:44:39,080 --> 00:44:39,960
Speaker 7: growth in the space.

903
00:44:40,320 --> 00:44:44,480
Speaker 5: Well, Kavita, you can't talk about crypto without mentioning binance

904
00:44:44,520 --> 00:44:49,080
Speaker 5: and FTX. How do you approach investing given the fact

905
00:44:49,160 --> 00:44:52,319
Speaker 5: that bulls will argue that bad actors are being flushed out,

906
00:44:52,320 --> 00:44:54,600
Speaker 5: But on the flip side, it feels like that could

907
00:44:54,680 --> 00:44:58,560
Speaker 5: just open up an opportunity for other people to take advantage.

908
00:44:58,920 --> 00:45:02,759
Speaker 11: So I think the game anytime when there is finance

909
00:45:02,800 --> 00:45:05,680
Speaker 11: and money and dollar involved in it, whether it's made

910
00:45:05,680 --> 00:45:09,480
Speaker 11: of scheme or whether it's like anything out there, you

911
00:45:09,680 --> 00:45:12,319
Speaker 11: are going to see scams, some sort of scams or

912
00:45:12,320 --> 00:45:15,200
Speaker 11: some things which you don't have regulations and have a

913
00:45:15,239 --> 00:45:18,399
Speaker 11: great area people really pushing beyond. So we do have

914
00:45:18,560 --> 00:45:21,600
Speaker 11: FTX and finance and to be very honest, and I

915
00:45:21,800 --> 00:45:26,040
Speaker 11: don't take away that what FTX did was completely stupid,

916
00:45:26,320 --> 00:45:28,920
Speaker 11: which was very similar to Bernie.

917
00:45:28,680 --> 00:45:33,280
Speaker 7: Made of scheme, but also the lack of regulations.

918
00:45:33,600 --> 00:45:36,360
Speaker 11: Even though you understand the space is here to stay,

919
00:45:36,400 --> 00:45:39,440
Speaker 11: you are still doing ETFs, you are you have companies

920
00:45:39,480 --> 00:45:43,799
Speaker 11: like Coinbase going IPO which are signed by everyone. Lack

921
00:45:43,840 --> 00:45:47,080
Speaker 11: of regulations from SEC is the biggest thing which hurts

922
00:45:47,160 --> 00:45:49,920
Speaker 11: and push more fear or more.

923
00:45:49,680 --> 00:45:52,240
Speaker 7: Scams around it. And I think that's where we should

924
00:45:52,239 --> 00:45:52,799
Speaker 7: focus on.

925
00:45:53,480 --> 00:45:55,000
Speaker 2: All right, Very good, Covet, I thank you so much

926
00:45:55,040 --> 00:45:58,719
Speaker 2: for joining us. Coveta Gupta, founder and managing partner of

927
00:45:58,960 --> 00:46:01,640
Speaker 2: Delta Blockchain Fund based here in New York, and joining

928
00:46:01,719 --> 00:46:04,880
Speaker 2: us via zoom and again looking at bitcoin here fifty one,

929
00:46:05,320 --> 00:46:08,520
Speaker 2: one hundred and four bitcoin and that whole heaving thing

930
00:46:08,680 --> 00:46:14,319
Speaker 2: ha lvig basically reducing the number of new bitcoins that

931
00:46:14,400 --> 00:46:16,640
Speaker 2: can be mined kind of just puts that a further

932
00:46:16,719 --> 00:46:19,640
Speaker 2: constraint on the supply. And then that's one side of

933
00:46:19,680 --> 00:46:21,480
Speaker 2: the equation. The other side of the equation, as Mike

934
00:46:21,560 --> 00:46:25,120
Speaker 2: mcloan explained it to me years ago, is presumably more

935
00:46:25,440 --> 00:46:29,520
Speaker 2: use cases for bitcoin, so fixed supply, presumably higher demand

936
00:46:29,960 --> 00:46:32,359
Speaker 2: that should push the price up. That's Mike mcloone's pitch

937
00:46:32,400 --> 00:46:33,560
Speaker 2: to me, which I could understand.

938
00:46:33,640 --> 00:46:36,400
Speaker 5: Yeah, I mean that's the kind of economics, right, you know,

939
00:46:36,520 --> 00:46:40,040
Speaker 5: he limit supply, increased demand, prices rise. When you look

940
00:46:40,080 --> 00:46:43,120
Speaker 5: at from a seasonal perspective. One thing that stands out

941
00:46:43,320 --> 00:46:46,839
Speaker 5: over last decade, best two of the three best months

942
00:46:46,840 --> 00:46:49,640
Speaker 5: out of the year April and May. But bitcoin right

943
00:46:49,640 --> 00:46:53,919
Speaker 5: now up twenty percent in February alone, YEP, absent of

944
00:46:53,960 --> 00:46:57,120
Speaker 5: which is really not as in line with big tech

945
00:46:57,239 --> 00:46:58,719
Speaker 5: as it had been historically.

946
00:47:00,040 --> 00:47:02,640
Speaker 2: Seem to see how that plays out. And the spot,

947
00:47:02,680 --> 00:47:06,000
Speaker 2: you know, having that spot ETF is big, and I

948
00:47:06,000 --> 00:47:08,200
Speaker 2: guess there were nine ETFs that think that came out.

949
00:47:09,000 --> 00:47:13,600
Speaker 2: So presumably that's expanding the base of investors in this

950
00:47:13,920 --> 00:47:17,200
Speaker 2: football since it Yeah, that's what the bulls say, so

951
00:47:17,480 --> 00:47:20,960
Speaker 2: we'll have to see. But the again, ETFs, let's do

952
00:47:21,000 --> 00:47:23,799
Speaker 2: a blockchain. Let's do it, you know, crypto ETF, and

953
00:47:23,840 --> 00:47:25,480
Speaker 2: that is perfect XBT.

954
00:47:25,800 --> 00:47:30,279
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955
00:47:30,520 --> 00:47:33,719
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956
00:47:33,719 --> 00:47:37,120
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957
00:47:37,200 --> 00:47:40,640
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958
00:47:40,719 --> 00:47:43,840
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959
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