1 00:00:00,080 --> 00:00:12,960 Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm term Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: jay Leye. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:31,880 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. So 5 00:00:32,040 --> 00:00:35,720 Speaker 1: for investors worldwide, it has been very painful to sit 6 00:00:35,800 --> 00:00:38,160 Speaker 1: out Q one closing out in the corner with massive 7 00:00:38,240 --> 00:00:43,159 Speaker 1: gains across asset classes, across regions, geographies globally in the 8 00:00:43,240 --> 00:00:46,680 Speaker 1: face of escalating growth concerns with us in the studio, 9 00:00:46,720 --> 00:00:49,440 Speaker 1: and please to say Christopher Rows, fatiguous partner and head 10 00:00:49,479 --> 00:00:52,440 Speaker 1: of technical strategy, Good morning to Chris, Good morning Jonathan, 11 00:00:52,440 --> 00:00:54,120 Speaker 1: happy to be here. Great to have you with us. 12 00:00:54,200 --> 00:00:56,920 Speaker 1: Let's just start with all of these underlying tensions that 13 00:00:56,960 --> 00:00:59,640 Speaker 1: are so difficult to reconcile. What do you see in 14 00:00:59,680 --> 00:01:02,240 Speaker 1: the price section? Well, I think the most difficult question 15 00:01:02,320 --> 00:01:04,959 Speaker 1: out there is when we look at the diversion that's 16 00:01:04,959 --> 00:01:07,720 Speaker 1: opened up between stocks and bonds. Is it a risk 17 00:01:07,760 --> 00:01:10,399 Speaker 1: to equities that bond yields are making new loads or 18 00:01:10,520 --> 00:01:13,000 Speaker 1: our stocks up because bond yields are down right? That 19 00:01:13,080 --> 00:01:15,760 Speaker 1: is the central question of this moment. There's a couple 20 00:01:15,800 --> 00:01:18,600 Speaker 1: of things I can't reconcile with lower bond yields. If 21 00:01:18,600 --> 00:01:22,040 Speaker 1: lower bond yields are sending a message about growth or recession, 22 00:01:22,360 --> 00:01:24,959 Speaker 1: why has copper hung in there so well. Why is 23 00:01:25,000 --> 00:01:28,320 Speaker 1: discretionary largely done better than staples this quarter? Why are 24 00:01:28,319 --> 00:01:31,120 Speaker 1: the European luxury stocks all making new highs. Why do 25 00:01:31,240 --> 00:01:34,200 Speaker 1: Chinese equities act well? So there's some things that don't 26 00:01:34,240 --> 00:01:37,560 Speaker 1: square with the lower bond yields are recessionary store and 27 00:01:37,600 --> 00:01:39,200 Speaker 1: that's what we're trying to reconcile. I would go even 28 00:01:39,240 --> 00:01:41,840 Speaker 1: further on. Look at the EFEX market, the classic risk 29 00:01:41,880 --> 00:01:45,880 Speaker 1: aversion trite. I'd expect ossie yen to have done something. 30 00:01:46,440 --> 00:01:49,720 Speaker 1: Ossie yen has done nothing for three months, nor has 31 00:01:49,760 --> 00:01:52,040 Speaker 1: euro n nor has dollar yen. I mean the end 32 00:01:52,080 --> 00:01:55,200 Speaker 1: pairs as a barometer of risk appetite or a barometer 33 00:01:55,280 --> 00:01:58,440 Speaker 1: of Carrie trades have really been indifferent here, I don't think, 34 00:01:58,560 --> 00:02:00,080 Speaker 1: and you know, you look at yen and particular the 35 00:02:00,400 --> 00:02:04,520 Speaker 1: correlation with yen in rates has been very meaningful over 36 00:02:04,560 --> 00:02:06,800 Speaker 1: the last decade. That seems to have broken down here 37 00:02:06,800 --> 00:02:09,520 Speaker 1: a little bit. So add that to the list of divergences. 38 00:02:09,560 --> 00:02:12,720 Speaker 1: We're having a tough time reconcile. We're talking off air 39 00:02:12,760 --> 00:02:15,680 Speaker 1: about while twos intensive flattened, twos and thirties have actually 40 00:02:15,680 --> 00:02:18,520 Speaker 1: steep and meaning fulear here. So there's a difference in 41 00:02:18,520 --> 00:02:20,200 Speaker 1: what we're seeing from the long end of the curve 42 00:02:20,520 --> 00:02:22,760 Speaker 1: here as well. So let's talk about the curve inversion, Chris, 43 00:02:22,760 --> 00:02:24,480 Speaker 1: because what's great about some of the hard work you 44 00:02:24,520 --> 00:02:26,600 Speaker 1: do as you crunch the numbers and you go back decades, 45 00:02:27,040 --> 00:02:31,120 Speaker 1: it is really peculiar to have this inversion led ultimately 46 00:02:31,160 --> 00:02:33,200 Speaker 1: by tea bills in the very front end twos three 47 00:02:33,280 --> 00:02:36,440 Speaker 1: to five rallying, and then we get this weird inversion 48 00:02:36,440 --> 00:02:38,840 Speaker 1: at the front where three month bill yields are above 49 00:02:39,160 --> 00:02:41,520 Speaker 1: the tenure yield, and then go further out. If you 50 00:02:41,560 --> 00:02:43,680 Speaker 1: just take the tea bill market out of the equation, 51 00:02:44,200 --> 00:02:47,040 Speaker 1: we've had a bull step at the same time. Yeah, 52 00:02:47,080 --> 00:02:51,359 Speaker 1: it's not unusual, it's unprecedented. We went back to and 53 00:02:51,400 --> 00:02:55,360 Speaker 1: we can't find another observation history where three month ten 54 00:02:55,400 --> 00:02:58,400 Speaker 1: years are inverted while twos and thirties are actually steepening, 55 00:02:58,480 --> 00:03:01,720 Speaker 1: steepening meaningfully here. Judean thirties have gone from twenty BIPs 56 00:03:01,720 --> 00:03:04,919 Speaker 1: to fifty BIPs over the last number of months. All 57 00:03:04,919 --> 00:03:08,040 Speaker 1: my radar goes up when I hear the word unprecedented. 58 00:03:08,280 --> 00:03:12,640 Speaker 1: Define that, I mean, what's the why of unprecedented? Well, 59 00:03:12,680 --> 00:03:14,600 Speaker 1: I think the y of unprecedented. Just look where German 60 00:03:14,639 --> 00:03:17,519 Speaker 1: yield trade. They trade through Japanese jgbs today, So there's 61 00:03:17,520 --> 00:03:20,160 Speaker 1: a lot of unprecedented things. That's only the third time 62 00:03:20,160 --> 00:03:23,520 Speaker 1: that's happened in thirty years. Where is your world the 63 00:03:23,560 --> 00:03:26,519 Speaker 1: diverse cross as at World of Christopher Varone? Is it 64 00:03:26,639 --> 00:03:30,440 Speaker 1: basically waiting for the EU banking system to clear? Are 65 00:03:30,480 --> 00:03:33,000 Speaker 1: we all waiting for the EU banking system to clear? 66 00:03:33,120 --> 00:03:36,040 Speaker 1: I think there's a lot of noise coming from sovereign 67 00:03:36,040 --> 00:03:39,080 Speaker 1: bon yields. I'm not convinced Tom Let's signal is coming 68 00:03:39,080 --> 00:03:40,920 Speaker 1: from Softomo. We've heard that John in a number of 69 00:03:40,960 --> 00:03:44,440 Speaker 1: interviews over the last and a ton of distortions, a 70 00:03:44,440 --> 00:03:46,920 Speaker 1: ton of distortions. You can start with the trillions of 71 00:03:46,960 --> 00:03:49,680 Speaker 1: dollars of negative ye owning assets handing out of states. 72 00:03:49,720 --> 00:03:51,760 Speaker 1: I just wonder how distorted the curve is because of 73 00:03:51,840 --> 00:03:54,600 Speaker 1: the massive table issuance we've had over the last year 74 00:03:54,640 --> 00:03:56,720 Speaker 1: as well. Chris, how much a factor is that listen. 75 00:03:56,840 --> 00:03:58,880 Speaker 1: I think we need to be careful that we don't 76 00:03:58,880 --> 00:04:01,560 Speaker 1: make too many excuses for an inverted curve. No matter 77 00:04:01,600 --> 00:04:04,280 Speaker 1: how it inverts, it's still inverts and an alters behavior. 78 00:04:04,320 --> 00:04:06,520 Speaker 1: So I need to respect we need to respect that. 79 00:04:06,760 --> 00:04:09,080 Speaker 1: But what I think is important is when we look 80 00:04:09,080 --> 00:04:11,200 Speaker 1: at something like three months, first ten years, and we 81 00:04:11,320 --> 00:04:14,640 Speaker 1: backtested this extensively over the last fifty years, you don't 82 00:04:14,640 --> 00:04:18,800 Speaker 1: really begin to see forward SMP returns start to deteriorate 83 00:04:19,040 --> 00:04:21,480 Speaker 1: until about nine to twelve months in the future. So 84 00:04:21,720 --> 00:04:24,680 Speaker 1: even with the backdrop of inverted curve, let's say inverted 85 00:04:24,720 --> 00:04:27,640 Speaker 1: for all the reasons it typically does, it's still buys 86 00:04:27,680 --> 00:04:30,640 Speaker 1: you some time before future returns really start to suffer. 87 00:04:30,760 --> 00:04:33,159 Speaker 1: So the important question is the life time, whether you 88 00:04:33,160 --> 00:04:34,960 Speaker 1: believe in the curve or not. So what do you 89 00:04:35,000 --> 00:04:38,039 Speaker 1: do for the next twelve months? I think tactically, let's 90 00:04:38,040 --> 00:04:40,880 Speaker 1: speak tactically here first, maybe next several months. I think 91 00:04:40,880 --> 00:04:44,080 Speaker 1: sentiment has gotten to extreme with the long bond call. 92 00:04:44,320 --> 00:04:46,360 Speaker 1: There's a lot of extremes that I've recently showed up. 93 00:04:46,360 --> 00:04:50,120 Speaker 1: We mentioned German tends through Japanese tens. That is unusual. 94 00:04:50,279 --> 00:04:52,960 Speaker 1: That has marked periods where you've seen stependers or higher 95 00:04:52,960 --> 00:04:55,400 Speaker 1: bond yields in the past. I would add to that, 96 00:04:55,440 --> 00:04:58,400 Speaker 1: if you look at some measures of bond sentiment, they're 97 00:04:58,400 --> 00:04:59,960 Speaker 1: starting to get a little bit froth here. What I'm 98 00:05:00,040 --> 00:05:02,360 Speaker 1: watching today, more than anything, I think that's the most 99 00:05:02,360 --> 00:05:05,040 Speaker 1: important thing to everyone out there to pay attention to. 100 00:05:05,320 --> 00:05:08,599 Speaker 1: We're gonna get positioning data on tenure Treasury new note 101 00:05:09,440 --> 00:05:12,280 Speaker 1: today at three thirty pm. That is gonna tell us 102 00:05:12,279 --> 00:05:15,000 Speaker 1: a lot about how aggressive the street has gotten on 103 00:05:15,040 --> 00:05:18,120 Speaker 1: the long side of the bond trade. People were massively 104 00:05:18,160 --> 00:05:20,080 Speaker 1: short bonds in the fourth quarter of last year. We've 105 00:05:20,080 --> 00:05:22,279 Speaker 1: start to see a big shift there. Imagine the shots 106 00:05:22,279 --> 00:05:24,520 Speaker 1: of totally capitulated. I think that people are gonna be 107 00:05:24,520 --> 00:05:27,120 Speaker 1: looking for Chris just listening to you. When you look 108 00:05:27,160 --> 00:05:28,960 Speaker 1: at risk and the risk that's been taken and fixed 109 00:05:29,000 --> 00:05:33,080 Speaker 1: income duration risk, credit risk. You're saying duration risk is 110 00:05:33,120 --> 00:05:35,800 Speaker 1: the biggest factor here, I think, especially in the short term. 111 00:05:35,800 --> 00:05:38,120 Speaker 1: And you know what's notable about this move lower and 112 00:05:38,200 --> 00:05:44,520 Speaker 1: yields relative to or relative or even the last quarter. 113 00:05:44,920 --> 00:05:47,960 Speaker 1: You haven't seen stress out of high yield credit in 114 00:05:48,000 --> 00:05:49,719 Speaker 1: the US. Over the last couple of weeks, the credit 115 00:05:49,760 --> 00:05:53,960 Speaker 1: markets have been remarkably benign despite what people perceive to 116 00:05:54,040 --> 00:05:56,760 Speaker 1: be recession risk from the curve and from bond yields. 117 00:05:56,760 --> 00:05:58,480 Speaker 1: I think that's a very important distinction to make here. 118 00:05:58,560 --> 00:06:02,160 Speaker 1: So we've had a big quota equities, credit co government 119 00:06:02,160 --> 00:06:05,160 Speaker 1: bonds globally, not just in the United States, but worldwide. 120 00:06:05,440 --> 00:06:08,200 Speaker 1: Told me a little bit about participation. How many people 121 00:06:08,240 --> 00:06:10,840 Speaker 1: have just spectator and sat this out? You know? I 122 00:06:11,160 --> 00:06:13,080 Speaker 1: think when you look at the fourth quarter and then 123 00:06:13,160 --> 00:06:15,560 Speaker 1: you look at the reversal we saw in the first quarter, 124 00:06:15,560 --> 00:06:18,000 Speaker 1: I think it's very difficult for fund managers to have 125 00:06:18,200 --> 00:06:22,839 Speaker 1: underperformed in because they were involved, and to also underperform 126 00:06:22,920 --> 00:06:26,520 Speaker 1: in because they were not involved. I think there's a 127 00:06:26,520 --> 00:06:29,400 Speaker 1: little bit of a fomo that likely persistence. We moved 128 00:06:29,400 --> 00:06:31,080 Speaker 1: through the year. Now I recognize we just had a 129 00:06:31,120 --> 00:06:34,640 Speaker 1: twelve quarter um. Would it shock me if the market 130 00:06:34,640 --> 00:06:37,680 Speaker 1: paused or even corrected in the second or third quarter 131 00:06:37,720 --> 00:06:40,320 Speaker 1: of twenty nineteen, It would not. I think twelve was 132 00:06:40,360 --> 00:06:42,960 Speaker 1: a very interesting camp. You had a very good market 133 00:06:43,000 --> 00:06:45,480 Speaker 1: low in twenty eleven, you rallied hard in the first 134 00:06:45,520 --> 00:06:47,360 Speaker 1: quarter of twelve, and then you want to nowhere for 135 00:06:47,400 --> 00:06:51,599 Speaker 1: six months? Interest interesting? We we we just simply don't 136 00:06:51,600 --> 00:06:54,240 Speaker 1: know on all this trends. But John, I think we 137 00:06:54,279 --> 00:06:56,760 Speaker 1: could agree that we're just slaves to where the yields 138 00:06:56,800 --> 00:06:59,360 Speaker 1: are right now. Granted with you, I mean the Swiss 139 00:06:59,400 --> 00:07:02,520 Speaker 1: twenty year was negative and it's on four basis points 140 00:07:02,560 --> 00:07:04,760 Speaker 1: off that. I mean, I guess it's off the mat 141 00:07:05,040 --> 00:07:06,680 Speaker 1: the last day of the quarter and they moves have 142 00:07:06,720 --> 00:07:08,880 Speaker 1: been toutly remarkable. Just to find a word from you, Chris, 143 00:07:08,880 --> 00:07:10,880 Speaker 1: and you wanted to get a word thing in on 144 00:07:10,880 --> 00:07:14,560 Speaker 1: on all things Brexit. You want to weigh in place. 145 00:07:17,280 --> 00:07:20,240 Speaker 1: I want to weigh in with the simple observation. You know, 146 00:07:20,360 --> 00:07:22,640 Speaker 1: we look at what's going on in front of Parliament today. 147 00:07:22,680 --> 00:07:25,200 Speaker 1: We look at what's going on in parliament today. Yet 148 00:07:25,560 --> 00:07:28,720 Speaker 1: UK assets really don't seem to care anymore. You know, 149 00:07:28,800 --> 00:07:32,480 Speaker 1: we've already seen sterling go from one seventy to one twenty. 150 00:07:32,560 --> 00:07:36,520 Speaker 1: It's actually pretty resilient here at one thirty. UK stocks 151 00:07:36,600 --> 00:07:40,080 Speaker 1: came in last year, they're actually acting pretty well here. 152 00:07:40,440 --> 00:07:42,920 Speaker 1: UK bonds are well bid. So I think if you 153 00:07:42,960 --> 00:07:46,800 Speaker 1: want to make a contrarian global call on Brexit, irrespective 154 00:07:46,840 --> 00:07:49,840 Speaker 1: of the outcome, buy some UK stuff right now, whether 155 00:07:49,880 --> 00:07:52,440 Speaker 1: it's UK bonds or UK stocks, or buy the currency 156 00:07:52,800 --> 00:07:54,880 Speaker 1: I think there's money to be made there from a cantrarian. 157 00:07:54,920 --> 00:07:56,520 Speaker 1: I just wonder if that's a local code or a 158 00:07:56,520 --> 00:07:58,840 Speaker 1: global coal I'm not sure any risk assets care about 159 00:07:58,840 --> 00:08:01,760 Speaker 1: anything last right now. Maybe you're right, and I think 160 00:08:01,800 --> 00:08:04,560 Speaker 1: if there's maybe one of the more important versions right now, 161 00:08:04,600 --> 00:08:06,200 Speaker 1: just about all the stress of fear in the world, 162 00:08:06,200 --> 00:08:09,960 Speaker 1: Copper acts, great copperacts, fantastic here, Okay, Christopher On, thank 163 00:08:09,960 --> 00:08:13,680 Speaker 1: you so much. Picking up on the sense of complacency worldwide. 164 00:08:13,800 --> 00:08:30,600 Speaker 1: It's been a bi everything story for the last three months. Quarter. 165 00:08:30,680 --> 00:08:34,280 Speaker 1: It spend the gloom of December and the double digit 166 00:08:34,400 --> 00:08:36,800 Speaker 1: response of Q on. We are live for the Bloomberg 167 00:08:36,840 --> 00:08:40,120 Speaker 1: Interactive Broker studios and say good morning, to allow you 168 00:08:40,200 --> 00:08:45,360 Speaker 1: across the nation and worldwide for without question, our equity 169 00:08:45,520 --> 00:08:48,120 Speaker 1: interview of the day. You can do that with the 170 00:08:48,200 --> 00:08:52,720 Speaker 1: Laureate Robert Schiller of Yale University. It could be housing, 171 00:08:53,480 --> 00:08:56,920 Speaker 1: it can be our great society, or it can be 172 00:08:56,960 --> 00:08:59,600 Speaker 1: on the equity markets and Bob Schiller. This goes back 173 00:08:59,640 --> 00:09:04,240 Speaker 1: to night teen and you and John Y Campbell got 174 00:09:04,280 --> 00:09:08,560 Speaker 1: together and did a paper on a cyclically adjusted price 175 00:09:08,640 --> 00:09:12,560 Speaker 1: to earnings ratio. It has become a cottage industry. We 176 00:09:12,640 --> 00:09:16,320 Speaker 1: celebrate the Schiller Barclay's Global Index coming out. When you 177 00:09:16,440 --> 00:09:19,640 Speaker 1: release that paper, what thirty one years ago, did you 178 00:09:19,679 --> 00:09:22,880 Speaker 1: have any idea how C A P or CAPE would 179 00:09:22,920 --> 00:09:27,280 Speaker 1: be so dominant? I had no idea, although I do 180 00:09:28,400 --> 00:09:32,959 Speaker 1: have interest in uh, social epidemics. It has become a 181 00:09:33,080 --> 00:09:35,520 Speaker 1: kind of a your work has become an epidemic. There's 182 00:09:35,559 --> 00:09:41,800 Speaker 1: no question about among some people. But I think it's 183 00:09:41,800 --> 00:09:46,840 Speaker 1: important to remember that it's just value investing with a better, 184 00:09:47,160 --> 00:09:50,640 Speaker 1: better measure of value. Everyone knows off of Graham, Dot 185 00:09:50,640 --> 00:09:53,360 Speaker 1: and Coddle a million years ago. The prices compared to 186 00:09:53,440 --> 00:10:01,559 Speaker 1: earnings is fraught with mismeasurement, vogue, even almost a survivorship bias, etcetera. 187 00:10:02,080 --> 00:10:04,600 Speaker 1: Does price to cash flow get it done? Or do 188 00:10:04,640 --> 00:10:07,520 Speaker 1: you have to go to something more esoteric like the 189 00:10:07,600 --> 00:10:11,520 Speaker 1: sickly the adjusted price to earnings ratio. It's interesting you 190 00:10:11,559 --> 00:10:15,439 Speaker 1: mentioned Graham and Dot in their ninety four book. I've 191 00:10:15,480 --> 00:10:19,240 Speaker 1: read it Railroad, Yes, looking at me, like, of course 192 00:10:19,280 --> 00:10:24,959 Speaker 1: I've read it. I haven't read the third edition of 193 00:10:25,160 --> 00:10:31,559 Speaker 1: of Graham Dot in just graduate securities analysis. Yeah, my 194 00:10:31,600 --> 00:10:34,880 Speaker 1: mother inflicted. This is my mother's this is my mother's. 195 00:10:35,080 --> 00:10:38,040 Speaker 1: But in that book. He has a suggestion about he 196 00:10:38,080 --> 00:10:41,640 Speaker 1: doesn't quite come up with CAPE, but he's it often 197 00:10:41,760 --> 00:10:45,640 Speaker 1: helps to average earnings over he's had up to five years, 198 00:10:45,679 --> 00:10:48,800 Speaker 1: which would be and all that with a lot of analysis. 199 00:10:48,840 --> 00:10:51,719 Speaker 1: But is this just fancy extrapolation? I mean, is the 200 00:10:51,800 --> 00:10:54,240 Speaker 1: real risk here is cape just gets you to look 201 00:10:54,240 --> 00:10:59,680 Speaker 1: out into the future with all the risks of extrapolation. Well, 202 00:10:59,760 --> 00:11:03,160 Speaker 1: I the reason one reason why we hire accountants is 203 00:11:03,200 --> 00:11:06,920 Speaker 1: to measure how well a company is doing. And we 204 00:11:07,040 --> 00:11:10,240 Speaker 1: expect them to come up with new numbers quarterly. Right, 205 00:11:10,280 --> 00:11:13,840 Speaker 1: that's a big job, and we like numbers that are exciting, 206 00:11:13,920 --> 00:11:16,440 Speaker 1: so they have to change. But when you get down 207 00:11:16,480 --> 00:11:19,840 Speaker 1: to it, the key measure of the real value of 208 00:11:19,840 --> 00:11:22,320 Speaker 1: a company is kind of a long term thing. You know. 209 00:11:22,360 --> 00:11:25,160 Speaker 1: They jump around from year to year a quarter quarter. 210 00:11:25,520 --> 00:11:29,800 Speaker 1: Can I bring in uh John's pharaoh professor, that's nice? 211 00:11:29,880 --> 00:11:34,000 Speaker 1: He had eight thousand shares a lift? Can I can? 212 00:11:34,160 --> 00:11:36,840 Speaker 1: Did you really get eight? Can I participate in lift? 213 00:11:36,600 --> 00:11:38,640 Speaker 1: I don't know, but eight thousand shares a lift? Why 214 00:11:38,679 --> 00:11:41,560 Speaker 1: are you trying to make participate in the lift? IPR? 215 00:11:41,840 --> 00:11:45,480 Speaker 1: Why are you trying to cause trouble because that I 216 00:11:45,520 --> 00:11:49,839 Speaker 1: didn't I didn't I have no positions here whatsoever. Let's 217 00:11:49,840 --> 00:11:53,000 Speaker 1: talk about the new index. Professor, the shill is Barclay's 218 00:11:53,160 --> 00:11:58,680 Speaker 1: Global Index. What is this and why another index? Well, 219 00:11:58,679 --> 00:12:03,040 Speaker 1: this is uh. There's awful lot of indexes, aren't there. Uh. 220 00:12:03,080 --> 00:12:07,439 Speaker 1: This is a sense I think, a sensible index that 221 00:12:07,520 --> 00:12:12,840 Speaker 1: combines value momentum and real diversification, which is uh. It's 222 00:12:12,880 --> 00:12:18,160 Speaker 1: just a sensible thing that it involves both equity and 223 00:12:18,240 --> 00:12:23,880 Speaker 1: commodities and fixed incomes. It's kind of designed for UH 224 00:12:24,120 --> 00:12:27,199 Speaker 1: typical person who's saving for the long term and is 225 00:12:27,240 --> 00:12:30,720 Speaker 1: willing to uh wants a value tilt. Because the lazy 226 00:12:30,720 --> 00:12:32,480 Speaker 1: way of thinking about this when I have people come 227 00:12:32,480 --> 00:12:34,839 Speaker 1: on the program and they talk about value, quite often 228 00:12:34,880 --> 00:12:36,839 Speaker 1: what they're talking about is by the banks in the 229 00:12:36,920 --> 00:12:38,640 Speaker 1: United States. From what I hear from you, this is 230 00:12:38,640 --> 00:12:40,640 Speaker 1: a whole lot bigger than that, and a whole lot broader. 231 00:12:42,600 --> 00:12:45,959 Speaker 1: There's a home bias, which is quite a remarkable phenomenon. 232 00:12:46,320 --> 00:12:49,800 Speaker 1: Every person wants to invest in his or her own country. 233 00:12:50,480 --> 00:12:55,319 Speaker 1: So this uh, this new product divides between the US, Japan, 234 00:12:55,880 --> 00:12:58,880 Speaker 1: and Europe. So it's not the whole world, but it's 235 00:12:59,679 --> 00:13:02,800 Speaker 1: among the part of the whole world that has a 236 00:13:02,840 --> 00:13:08,240 Speaker 1: lot of value it's it's well diversified. Some people might say, though, 237 00:13:08,480 --> 00:13:10,679 Speaker 1: having a home bus stand the United States through this bullmark, 238 00:13:10,760 --> 00:13:13,680 Speaker 1: it has actually been an advantage because you want to 239 00:13:13,720 --> 00:13:16,360 Speaker 1: much abroad. So so, professor, how do you think about 240 00:13:16,400 --> 00:13:22,400 Speaker 1: those things? The bullmarket? Uh? That did put the U 241 00:13:22,480 --> 00:13:25,920 Speaker 1: s a have, But this isn't something that we focus on. 242 00:13:25,960 --> 00:13:29,960 Speaker 1: We were in fact the bullmarket, Uh, since it involved 243 00:13:30,040 --> 00:13:32,680 Speaker 1: it brought the cape ratio in the United States to 244 00:13:32,840 --> 00:13:37,560 Speaker 1: the highest of all of twenty six countries that we study. 245 00:13:38,400 --> 00:13:41,000 Speaker 1: So we're the most expensive country in the world. So 246 00:13:41,040 --> 00:13:45,199 Speaker 1: this is a time not to pull out of America completely, 247 00:13:45,240 --> 00:13:48,440 Speaker 1: but to go back on the wall of my office 248 00:13:48,600 --> 00:13:52,760 Speaker 1: four thousand years ago, an Impotson chart out of Yale University. 249 00:13:52,800 --> 00:13:57,640 Speaker 1: How does your wonderful log linear series from two thousand three? 250 00:13:57,920 --> 00:14:01,800 Speaker 1: How does that compare to Mr Ibbotson's classic work on 251 00:14:01,840 --> 00:14:07,000 Speaker 1: the SMP five. Uh. Roger and I are good friends. 252 00:14:07,120 --> 00:14:09,320 Speaker 1: Are you're still on speaking to terms? Yeah, we're on 253 00:14:09,360 --> 00:14:15,320 Speaker 1: speaking terms? Uh? And uh he understands the value as well, 254 00:14:15,360 --> 00:14:18,920 Speaker 1: I think, and I can't do an explicit comparison with 255 00:14:19,000 --> 00:14:21,800 Speaker 1: our index. Does your index say buy and hold? Because 256 00:14:22,000 --> 00:14:26,240 Speaker 1: the persistency you mentioned momentum. The inertial force of the 257 00:14:26,360 --> 00:14:29,680 Speaker 1: drift of your series is remarkable, and it says just 258 00:14:29,760 --> 00:14:33,440 Speaker 1: buy him and hold him forever. I'm not a buy 259 00:14:33,520 --> 00:14:39,080 Speaker 1: and hold advocate because because valuations are always changing. I'm 260 00:14:39,120 --> 00:14:41,880 Speaker 1: also not I hold the market advocate. I know that 261 00:14:41,960 --> 00:14:45,720 Speaker 1: comes out of some models, but the problem with doing 262 00:14:45,760 --> 00:14:47,720 Speaker 1: that is that you end up holding more of the 263 00:14:47,800 --> 00:14:52,520 Speaker 1: bubble bubble stocks. So you you some stocks are get 264 00:14:52,600 --> 00:14:55,280 Speaker 1: highly probably you never know they might win. They might 265 00:14:55,480 --> 00:14:58,760 Speaker 1: some of them will do really well. But John John 266 00:14:58,800 --> 00:15:03,040 Speaker 1: log linear one standard deviation with huge persistency word about 267 00:15:03,080 --> 00:15:07,720 Speaker 1: point eight standard deviation plus. We are certainly not extended 268 00:15:08,200 --> 00:15:13,520 Speaker 1: like we were in two thousand eighteen or two thousand yeah, 269 00:15:13,560 --> 00:15:16,520 Speaker 1: two thousand and eighteen ish. We're not nearly extended like 270 00:15:16,560 --> 00:15:19,760 Speaker 1: we were eighteen months ago. Tom Kane rattling through the 271 00:15:19,800 --> 00:15:22,200 Speaker 1: chance for us. Professor Sida great to catch up with you, 272 00:15:22,320 --> 00:15:24,240 Speaker 1: and you've got to get over to the television studio. 273 00:15:24,280 --> 00:15:25,320 Speaker 1: So we want to give you a bit of time 274 00:15:25,320 --> 00:15:28,400 Speaker 1: to make it. Professor Schilla that Yale Professor Robert Shilla 275 00:15:28,440 --> 00:15:30,520 Speaker 1: great to catch up with the US. So the pizza 276 00:15:30,560 --> 00:15:35,840 Speaker 1: from new Haven is in his index. Pizza from the commodities, equities, bonds, 277 00:15:35,840 --> 00:15:39,840 Speaker 1: and pizza from new Haven Pizza. It's the best. Oh yeah, 278 00:15:39,920 --> 00:15:42,240 Speaker 1: oh yeah. You go to Yale just to get the pizza. 279 00:15:42,680 --> 00:15:46,280 Speaker 1: Which is your favorite pizza parlor New Haven? What we 280 00:15:46,320 --> 00:15:48,760 Speaker 1: got a mic on? Please for professor show this is 281 00:15:48,760 --> 00:15:52,440 Speaker 1: the most important part of the unis important. Pepe pizza, 282 00:15:52,440 --> 00:15:56,360 Speaker 1: Pepe pizza. Yeah, goes back to the nineteen twenties. It's 283 00:15:56,400 --> 00:15:58,840 Speaker 1: still in business. And his lines out and it's great. 284 00:15:58,960 --> 00:16:00,840 Speaker 1: I did a conference of woudn't be like last night? 285 00:16:00,840 --> 00:16:06,080 Speaker 1: I quoted Jacob Winer mercantilis um. That would be very 286 00:16:06,120 --> 00:16:08,920 Speaker 1: cool if you did a course on Twitter. He was 287 00:16:08,960 --> 00:16:11,840 Speaker 1: in Chicago at the time. Ok, yeah, that's right. But 288 00:16:12,000 --> 00:16:14,160 Speaker 1: for you and like Dougger when to come in from 289 00:16:14,240 --> 00:16:16,800 Speaker 1: Dartmouth and you guys do a thing at Yale on 290 00:16:16,960 --> 00:16:19,120 Speaker 1: mercantil is in trade and all the history you work 291 00:16:19,200 --> 00:16:21,760 Speaker 1: or that would be very cool. We'll work on that. 292 00:16:21,800 --> 00:16:25,960 Speaker 1: Bob Shiller, thank you so much, the laureate from Yale University. Seriously, 293 00:16:25,960 --> 00:16:27,920 Speaker 1: I'm gonna put this chart out all I gotta fancy 294 00:16:28,000 --> 00:16:30,760 Speaker 1: it up. But John Ferrell, this new index from Professor 295 00:16:30,800 --> 00:16:34,280 Speaker 1: Schiller shows a wonderful persistency, which means it's good math. 296 00:16:35,640 --> 00:16:37,480 Speaker 1: I'll put it out on Twitter for perfect Radio. They'll 297 00:16:37,480 --> 00:16:52,920 Speaker 1: see it first. We're now gonna do Brexit, but we're 298 00:16:52,920 --> 00:16:57,560 Speaker 1: gonna do it, I hope through a conversational prism avoiding 299 00:16:57,560 --> 00:17:00,120 Speaker 1: the manu shut. The backdrop of this is on the 300 00:17:00,160 --> 00:17:04,320 Speaker 1: Green couches at the House of Commons. They're debating and 301 00:17:04,440 --> 00:17:07,320 Speaker 1: people who never ever have It's like a bad Harry 302 00:17:07,359 --> 00:17:11,840 Speaker 1: Potter sequel. People who never ever ever said they change 303 00:17:11,840 --> 00:17:15,359 Speaker 1: their mind at Hogwarts are Ian Duncan Smith. A few 304 00:17:15,400 --> 00:17:19,560 Speaker 1: hours ago Arch Brexit here we made world headlines with him. 305 00:17:19,600 --> 00:17:22,880 Speaker 1: Three weeks ago, Ian Duncan Smith says he's gonna support 306 00:17:22,880 --> 00:17:25,960 Speaker 1: Prime Minister may Dominic Rabb, who he doesn't even know. 307 00:17:26,000 --> 00:17:27,320 Speaker 1: If you know who he is, all you need to 308 00:17:27,359 --> 00:17:31,080 Speaker 1: know Dominic Rabb is a Brexit hardliner. He'll back the 309 00:17:31,160 --> 00:17:35,639 Speaker 1: Prime Minister's Brexit deal. We need a legal scholar to 310 00:17:35,720 --> 00:17:38,479 Speaker 1: take us from the wars of the Roses forward. Katherine 311 00:17:38,520 --> 00:17:43,000 Speaker 1: Barnard is at Cambridge University and just extraordinary work on 312 00:17:43,080 --> 00:17:48,800 Speaker 1: the minutia of all this and particularly Europegan Union. Low 313 00:17:48,920 --> 00:17:52,679 Speaker 1: Catherine an open question to begin, are you surprised that 314 00:17:53,000 --> 00:17:57,720 Speaker 1: Arch Brexiteers are all of a sudden modifying their never 315 00:17:57,800 --> 00:18:02,320 Speaker 1: say never, ever, ever ever language. No, I'm not surprised, 316 00:18:02,400 --> 00:18:06,600 Speaker 1: because what they're really worried about is that if they 317 00:18:06,680 --> 00:18:10,520 Speaker 1: don't vote for Theresa May's deal, that's our divorce from 318 00:18:10,600 --> 00:18:13,800 Speaker 1: the European Union. There is a risk that in fact 319 00:18:14,240 --> 00:18:16,600 Speaker 1: there might not be a Brexit at all, or Brexit 320 00:18:16,640 --> 00:18:19,399 Speaker 1: will be delayed for a long period of time. And 321 00:18:19,440 --> 00:18:23,920 Speaker 1: there's an added incentive, of course, now that Theresa May 322 00:18:24,000 --> 00:18:29,200 Speaker 1: has offered up her own head if the Brexit vote 323 00:18:29,280 --> 00:18:32,359 Speaker 1: in favor of her deal. And of course they're playing 324 00:18:32,359 --> 00:18:35,120 Speaker 1: a slightly longer game. They want rid of Theresa May 325 00:18:35,600 --> 00:18:38,520 Speaker 1: so that they can have a leadership context contest and 326 00:18:38,560 --> 00:18:41,720 Speaker 1: they can get one of their number into number ten. 327 00:18:42,280 --> 00:18:45,760 Speaker 1: And so they are actually becoming a bit more pragmatic. 328 00:18:46,119 --> 00:18:48,480 Speaker 1: And so people like Boris Johnson, who said this was 329 00:18:48,520 --> 00:18:51,120 Speaker 1: the worst deal ever, this was the most repetent deal, 330 00:18:51,560 --> 00:18:54,400 Speaker 1: suddenly he's discovered it's not quite so repellent after all. 331 00:18:54,680 --> 00:18:57,720 Speaker 1: Particularly he's got his eye on a vacancy at number ten. 332 00:18:57,880 --> 00:19:00,440 Speaker 1: Reminds me of Daniel de Lewis and link and movie 333 00:19:00,480 --> 00:19:04,560 Speaker 1: with Sally Fields and the ammancimation based proclamation. Everybody change 334 00:19:04,600 --> 00:19:10,199 Speaker 1: their mind in eighteen sixty as three, that's a different nation. Catherine, Okay, 335 00:19:10,240 --> 00:19:12,840 Speaker 1: all this is great, but as we are at March 336 00:19:12,920 --> 00:19:17,320 Speaker 1: twenty nine and the acuity of Professor Bernard's knowledge, folks 337 00:19:17,760 --> 00:19:19,600 Speaker 1: is second. I mean, she's the one that's looked at 338 00:19:19,600 --> 00:19:23,480 Speaker 1: the detail. If it's about Ireland and the d u P. 339 00:19:23,760 --> 00:19:26,439 Speaker 1: R R. Rob Hutton says, the DUP is not going 340 00:19:26,520 --> 00:19:30,160 Speaker 1: to change. Is the line at the border of North 341 00:19:30,240 --> 00:19:33,720 Speaker 1: Ireland and Ireland, Is the line in the middle of 342 00:19:33,760 --> 00:19:37,600 Speaker 1: the Irish Sea? Or can Catherine Barnard tell us where 343 00:19:37,600 --> 00:19:42,439 Speaker 1: the line's going to be. Well, if the deal is approved, 344 00:19:43,040 --> 00:19:47,600 Speaker 1: that's a withdrawal agreement. It contains the backstop, which the DUP, 345 00:19:47,760 --> 00:19:55,200 Speaker 1: the Democratic Unionist Party dislikes intensely. However, if it goes ahead, 346 00:19:55,280 --> 00:19:58,399 Speaker 1: people Northern Ireland are actually quite enthusiastic about it because 347 00:19:58,440 --> 00:20:01,840 Speaker 1: if in fact they get the best both worlds, they 348 00:20:01,920 --> 00:20:06,520 Speaker 1: get continued membership of the Customs Union and Single Market 349 00:20:06,560 --> 00:20:08,560 Speaker 1: for goods, so there will be no hard board with 350 00:20:08,640 --> 00:20:12,280 Speaker 1: Northern Ireland and so effectively they stay in parts of 351 00:20:12,320 --> 00:20:14,680 Speaker 1: the EU. But they still say in the rest of 352 00:20:14,680 --> 00:20:19,680 Speaker 1: the United Kingdom, and therefore any foreign direct investment that 353 00:20:19,800 --> 00:20:22,480 Speaker 1: might take place in the UK is much more likely 354 00:20:22,480 --> 00:20:26,280 Speaker 1: to come to Northern Ireland because they have on both camps. However, 355 00:20:26,320 --> 00:20:31,560 Speaker 1: the DUP, which is still the majority party in Northern Ireland, 356 00:20:31,640 --> 00:20:35,440 Speaker 1: doesn't like it because inevitably it means that there will 357 00:20:35,480 --> 00:20:39,399 Speaker 1: be a border down the RSC. Why because UK goods 358 00:20:39,440 --> 00:20:42,120 Speaker 1: from the rest of the United Kingdom will not necessarily 359 00:20:42,240 --> 00:20:47,360 Speaker 1: comply with EU standards and therefore as they enter Northern Ireland, 360 00:20:47,480 --> 00:20:51,040 Speaker 1: So if they go from Liverpool in England to Laen 361 00:20:51,200 --> 00:20:54,160 Speaker 1: or Belfast in Northern Ireland, they'll have to be checked. 362 00:20:54,680 --> 00:20:57,480 Speaker 1: And because there's a differential between what goes on in 363 00:20:57,640 --> 00:21:00,919 Speaker 1: mainland Britain and what goes on in mainland Northern Ireland, 364 00:21:01,280 --> 00:21:04,520 Speaker 1: they don't like it and they say, therefore we want 365 00:21:04,560 --> 00:21:08,680 Speaker 1: to stop this deal. Because the DUP say, we're Unionists, 366 00:21:09,000 --> 00:21:12,240 Speaker 1: we're part of the with the rest of the United Kingdom. 367 00:21:12,720 --> 00:21:15,000 Speaker 1: Let me ask you a question. Is Rupert Harrison today 368 00:21:15,040 --> 00:21:18,399 Speaker 1: who was head boy at Eton, went to Oxford and 369 00:21:18,600 --> 00:21:20,679 Speaker 1: Oxford is a school man you may have heard of. 370 00:21:20,640 --> 00:21:24,879 Speaker 1: It's uh. It's also there's somewhere, it's somewhere quite a 371 00:21:24,880 --> 00:21:27,480 Speaker 1: long where where less good than yes, with a different 372 00:21:27,520 --> 00:21:32,119 Speaker 1: accent and all that. But but in the rarefied world 373 00:21:32,119 --> 00:21:35,560 Speaker 1: that you and Rupert Harrison trapes in, how do you 374 00:21:35,600 --> 00:21:39,280 Speaker 1: measure what the people of the United Kingdom want? Because 375 00:21:39,440 --> 00:21:44,439 Speaker 1: the for Americans the artist thing our parliament members voting 376 00:21:44,520 --> 00:21:48,080 Speaker 1: one way where their constituencies clearly vote the other way. 377 00:21:48,640 --> 00:21:53,280 Speaker 1: I could suggest that doesn't happen in America often. It's 378 00:21:53,359 --> 00:21:55,960 Speaker 1: really difficult, and it depends what you think the role 379 00:21:56,000 --> 00:21:59,520 Speaker 1: of your mt s are. Are they there as essentially 380 00:21:59,560 --> 00:22:03,399 Speaker 1: your agent or are they there to represent the wider 381 00:22:03,440 --> 00:22:05,400 Speaker 1: interests of the country. And this is where a lot 382 00:22:05,480 --> 00:22:10,000 Speaker 1: of MPs are deeply conflicted, particularly labor MPs, where their 383 00:22:10,080 --> 00:22:14,240 Speaker 1: party is somewhat more pro European, although it's quite difficult 384 00:22:14,240 --> 00:22:19,840 Speaker 1: to classify than the Conservatives. But a lot of them 385 00:22:19,880 --> 00:22:25,719 Speaker 1: are representing northern constituencies which are overwhelmingly Leave constituencies, and 386 00:22:25,760 --> 00:22:29,960 Speaker 1: it's those MPs that Theresa May is reliant on for 387 00:22:30,040 --> 00:22:32,920 Speaker 1: her the vote later today to try to get a 388 00:22:33,480 --> 00:22:36,320 Speaker 1: deal across the line. But there's a problem. You were 389 00:22:36,359 --> 00:22:38,040 Speaker 1: talking history. I can give you a bit of history 390 00:22:38,080 --> 00:22:41,680 Speaker 1: to this will cheer you up for the corn laws. 391 00:22:41,720 --> 00:22:43,560 Speaker 1: I don't know whether that yes, we brought that up 392 00:22:43,560 --> 00:22:46,680 Speaker 1: the other day. It means that so with the corn 393 00:22:46,760 --> 00:22:50,679 Speaker 1: Laws that we had in the mid nineteenth century, there 394 00:22:50,720 --> 00:22:55,600 Speaker 1: were very very restrictive, very protectionist rules on which of 395 00:22:55,600 --> 00:23:00,200 Speaker 1: course helped um the UK business very much in aid, 396 00:23:00,359 --> 00:23:04,119 Speaker 1: but it led to great poverty and great, very serious 397 00:23:04,160 --> 00:23:08,480 Speaker 1: issues in Ireland because there was the Potato family. There's 398 00:23:08,480 --> 00:23:12,480 Speaker 1: a desperate need for corn grain to come in without 399 00:23:12,480 --> 00:23:15,840 Speaker 1: protectionist tariffs on it. And then what you saw was 400 00:23:15,880 --> 00:23:19,399 Speaker 1: that Robert Peel, then Prime Minister, recognized that he needed 401 00:23:19,400 --> 00:23:24,320 Speaker 1: to abolish the protectionist corndalls and he was reliant on 402 00:23:24,520 --> 00:23:26,560 Speaker 1: votes from the opposition to do so. And he did 403 00:23:26,600 --> 00:23:29,080 Speaker 1: manage to get the corn Laws repealed, good news for 404 00:23:29,560 --> 00:23:32,240 Speaker 1: Ireland and good news for the poor. But it meant 405 00:23:32,240 --> 00:23:34,280 Speaker 1: that when he tried to get his next major piece 406 00:23:34,280 --> 00:23:37,560 Speaker 1: of legislation through, those very people who had voted for 407 00:23:37,800 --> 00:23:40,679 Speaker 1: him for the corn Laws voted against him. Relying on 408 00:23:40,720 --> 00:23:45,879 Speaker 1: opposition votes a long term strategy, and Robert Peel the 409 00:23:45,920 --> 00:23:49,720 Speaker 1: government collapsed and the Conservatives were then out of office 410 00:23:49,760 --> 00:23:52,760 Speaker 1: for many, many decades. And then there's a beautiful explanation. 411 00:23:52,840 --> 00:23:54,760 Speaker 1: We covered this a few days ago, folks, and as 412 00:23:54,760 --> 00:23:57,000 Speaker 1: I said, my team is up reading John Stewart Mill 413 00:23:57,520 --> 00:24:01,240 Speaker 1: to be on the show next week. One final question, Professor, 414 00:24:01,320 --> 00:24:03,240 Speaker 1: if I could I just read a one volume on 415 00:24:03,320 --> 00:24:05,520 Speaker 1: the Wars of the Roses because I felt like I 416 00:24:05,600 --> 00:24:10,080 Speaker 1: was an ignorant American as well? Is the parliament procedure 417 00:24:11,119 --> 00:24:17,320 Speaker 1: of late medieval early modern England? Is it anything like today? 418 00:24:17,359 --> 00:24:21,160 Speaker 1: With the parliament of the Academy Award movie The Favorite 419 00:24:21,160 --> 00:24:27,480 Speaker 1: in Queen Anne, would they recognize as craziness of today? Um? 420 00:24:27,520 --> 00:24:31,480 Speaker 1: I think that they wouldn't really recognize the parliament of today, 421 00:24:31,520 --> 00:24:35,480 Speaker 1: but I think they would say that there are times 422 00:24:35,560 --> 00:24:39,960 Speaker 1: when parliaments are absolutely split. What's unusual about the parliament 423 00:24:40,000 --> 00:24:42,000 Speaker 1: at the moment, the Western Parliment at the moment, it's 424 00:24:42,040 --> 00:24:46,199 Speaker 1: not just split on party lines, it's it's split on 425 00:24:46,320 --> 00:24:50,280 Speaker 1: leave remain lines. So there are parties within parties. So 426 00:24:50,440 --> 00:24:54,320 Speaker 1: on the conservative side there is the European Reform Group, 427 00:24:54,359 --> 00:24:56,720 Speaker 1: which is essentially a party within a party with its 428 00:24:56,720 --> 00:25:00,200 Speaker 1: own whipping mechanism. On the Labor's side, Tom what Soon 429 00:25:00,240 --> 00:25:03,600 Speaker 1: has set up a Social Democratic Forum, which is again 430 00:25:04,000 --> 00:25:07,600 Speaker 1: a party of the more Blair rights within the Labor Party. 431 00:25:08,160 --> 00:25:10,679 Speaker 1: And then of course there's this new party, the so 432 00:25:10,840 --> 00:25:15,560 Speaker 1: called Tiggers the Independent Group, and that's not to mention 433 00:25:15,600 --> 00:25:18,879 Speaker 1: the other smaller parties like the Lib Dems and the 434 00:25:19,000 --> 00:25:22,879 Speaker 1: Democratic Union's Party. And then finally there's there's seven seats 435 00:25:22,920 --> 00:25:28,560 Speaker 1: for shin Fame UM, which who never sit in Investmentster 436 00:25:28,600 --> 00:25:31,000 Speaker 1: and they have never sat an investments. Now, this has 437 00:25:31,040 --> 00:25:34,439 Speaker 1: been wonderful. Captain Barnard, thank you so much. With Cambridge, 438 00:25:34,680 --> 00:25:37,600 Speaker 1: are truly one of the experts on the minutia of 439 00:25:37,720 --> 00:25:40,760 Speaker 1: the EU and all these relationships of the United Kingdom. 440 00:25:40,800 --> 00:25:57,400 Speaker 1: As I mentioned, it is simply a college rides sharing 441 00:25:57,480 --> 00:26:01,720 Speaker 1: program at a Santa Barbara, California. You get some Toyota 442 00:26:01,760 --> 00:26:05,000 Speaker 1: priuses and down the road six years or so you 443 00:26:05,040 --> 00:26:09,280 Speaker 1: turn it into LIFT. Here is at the LIFT headquarters 444 00:26:09,359 --> 00:26:14,160 Speaker 1: in discussion with a newly minted up CEOs are Emily Chang. 445 00:26:15,240 --> 00:26:17,000 Speaker 1: Thank you so much for joining us. I'm here with 446 00:26:17,119 --> 00:26:20,960 Speaker 1: LIFT co founders Logan Green and John Zimmer. Lift shares 447 00:26:21,000 --> 00:26:24,399 Speaker 1: about to start trading on the NASDAC. Big day for you. 448 00:26:24,560 --> 00:26:26,560 Speaker 1: Thank you so much for being here. Yeah, thanks for 449 00:26:26,640 --> 00:26:28,720 Speaker 1: setting down with us. So look, you founded zim right 450 00:26:28,760 --> 00:26:31,520 Speaker 1: in two thousand seven, that became LIFT in two thousand twelve. 451 00:26:31,720 --> 00:26:35,560 Speaker 1: You're here beating your biggest rival to go in public. 452 00:26:36,359 --> 00:26:39,520 Speaker 1: How does it feel? Logan? Feels pretty amazing, And there's 453 00:26:39,560 --> 00:26:43,200 Speaker 1: nothing better than we have all of our earliest investors 454 00:26:43,560 --> 00:26:46,080 Speaker 1: and the team that's been with us, you know a 455 00:26:46,160 --> 00:26:49,000 Speaker 1: lot of them since we started in two seven. Just 456 00:26:49,040 --> 00:26:51,800 Speaker 1: feels incredible. You're here at the new Lift Driver Center 457 00:26:51,880 --> 00:26:53,600 Speaker 1: in l A. You're not on the floor of the NASTAC. 458 00:26:53,640 --> 00:26:56,000 Speaker 1: Why was it important John to do it this way? Well, 459 00:26:56,160 --> 00:26:58,360 Speaker 1: we want to make a point that you can both 460 00:26:58,440 --> 00:27:01,600 Speaker 1: invest in communities and of the great business. And our 461 00:27:01,680 --> 00:27:04,680 Speaker 1: driver community has enabled us to be here at this point. 462 00:27:04,720 --> 00:27:07,240 Speaker 1: So it's fun to bring the bell with several members 463 00:27:07,280 --> 00:27:10,280 Speaker 1: of our driver community. How many of them participate in 464 00:27:10,320 --> 00:27:12,480 Speaker 1: the I p O because we gave them a bonus 465 00:27:12,560 --> 00:27:15,240 Speaker 1: to do so? Uh. And this is just the start 466 00:27:15,280 --> 00:27:17,920 Speaker 1: of how we partner with cities, UH and the people. 467 00:27:18,359 --> 00:27:21,960 Speaker 1: And you're giving drivers stock bonuses, right, yeah, we're more usually, Yeah, 468 00:27:22,000 --> 00:27:24,880 Speaker 1: we're giving a cash bonus and the ability to participate 469 00:27:25,000 --> 00:27:29,040 Speaker 1: through their Friends of Family program. So let's talk about costs. 470 00:27:29,520 --> 00:27:31,680 Speaker 1: There's a lot of question how can you bring costs down? 471 00:27:31,840 --> 00:27:34,000 Speaker 1: You brought in two point two billion dollars in revenue 472 00:27:34,040 --> 00:27:36,760 Speaker 1: last year, but you also lost some nine million dollars. 473 00:27:37,080 --> 00:27:39,600 Speaker 1: How quickly can you bring those costs down? John Well, 474 00:27:39,600 --> 00:27:41,360 Speaker 1: I think it's important to have the context that we're 475 00:27:41,400 --> 00:27:44,200 Speaker 1: we're going after is a trillion dollar market opportunity. Every 476 00:27:44,280 --> 00:27:47,879 Speaker 1: year in the US, Americans spend nine thousand dollars owning 477 00:27:47,920 --> 00:27:50,040 Speaker 1: and operating their car and using it only five percent 478 00:27:50,080 --> 00:27:53,200 Speaker 1: of the time. And so this massive market shift, just 479 00:27:53,320 --> 00:27:57,440 Speaker 1: like entertainment has gone streaming, is happening with car ownership, 480 00:27:57,760 --> 00:28:00,480 Speaker 1: and we're investing to take advantage of that. Our economics 481 00:28:00,640 --> 00:28:04,200 Speaker 1: are improving and we're very confident in the path ahead. 482 00:28:04,600 --> 00:28:07,119 Speaker 1: So logan in your risk factors, you say you may 483 00:28:07,200 --> 00:28:11,160 Speaker 1: never be profitable. I mean, how do you convince investors 484 00:28:11,280 --> 00:28:15,439 Speaker 1: that they should be betting on the optimistic here if 485 00:28:15,640 --> 00:28:17,639 Speaker 1: if you dig in on the numbers. Every year the 486 00:28:17,720 --> 00:28:20,960 Speaker 1: economics of the business improved, and we are confident that 487 00:28:21,119 --> 00:28:25,400 Speaker 1: the business will be very profitable. Their course risk factors. 488 00:28:25,920 --> 00:28:30,040 Speaker 1: But we're making tremendous progress going after this. You know, 489 00:28:30,280 --> 00:28:34,359 Speaker 1: once in a generation shift where this entire industry potentially 490 00:28:34,640 --> 00:28:37,399 Speaker 1: at one point two trillion dollar market could flip from 491 00:28:37,400 --> 00:28:40,360 Speaker 1: an ownership model to a service model, and we're leading 492 00:28:40,400 --> 00:28:43,400 Speaker 1: the way there, so could you be profitable in five years. 493 00:28:44,520 --> 00:28:47,440 Speaker 1: We can't talk on florid projections, but as we said, 494 00:28:47,440 --> 00:28:50,000 Speaker 1: we're very confident in the long term profitability of the model. Now, 495 00:28:50,080 --> 00:28:51,840 Speaker 1: in the weeks leading up to this, I've noticed I'm 496 00:28:51,880 --> 00:28:55,560 Speaker 1: a Lift customer, I'm an uber customer steep discountan how 497 00:28:55,840 --> 00:28:58,840 Speaker 1: how is that sustainable and how does that factor into 498 00:28:58,880 --> 00:29:01,920 Speaker 1: your customer actor disition costs in the future. You know, 499 00:29:02,400 --> 00:29:05,280 Speaker 1: One thing to know is that there's actually been rapidly 500 00:29:05,400 --> 00:29:08,960 Speaker 1: decreasing numbers of discounts in the market the times that 501 00:29:09,080 --> 00:29:11,800 Speaker 1: they are used. We're really managing the balance balance of 502 00:29:11,840 --> 00:29:14,480 Speaker 1: our own market. So something a lot of folks don't 503 00:29:14,640 --> 00:29:18,000 Speaker 1: you know, don't think about, but every year Americans make 504 00:29:18,080 --> 00:29:21,680 Speaker 1: news resolutions. They come back make a resolution to lose 505 00:29:21,760 --> 00:29:24,720 Speaker 1: weight and save money, and that means they go out less. 506 00:29:25,520 --> 00:29:28,320 Speaker 1: But it's amazing what a ten percent off coupon can do. 507 00:29:28,360 --> 00:29:31,240 Speaker 1: It can break a news resolution very quickly. And we 508 00:29:31,400 --> 00:29:34,480 Speaker 1: do that because we have a lot of drivers on 509 00:29:34,520 --> 00:29:37,600 Speaker 1: the road. Last year, one point nine million drivers drove 510 00:29:37,720 --> 00:29:39,320 Speaker 1: for Lift, So we have a lot of drivers on 511 00:29:39,360 --> 00:29:41,960 Speaker 1: the road, and when they're not busy, that's bad for business. 512 00:29:42,320 --> 00:29:45,320 Speaker 1: So we'll give out targeted coupons as a way to 513 00:29:45,400 --> 00:29:47,480 Speaker 1: take care of drivers and make sure that their business 514 00:29:47,560 --> 00:29:51,960 Speaker 1: days busy. But it's a very rational market and and 515 00:29:52,080 --> 00:29:54,760 Speaker 1: that's really the reason you're driving it. So you're speaking 516 00:29:54,800 --> 00:29:58,000 Speaker 1: to something, You're making choices behind the scene. You are 517 00:29:58,120 --> 00:30:01,800 Speaker 1: prioritizing at times market share over margins or margin to 518 00:30:01,880 --> 00:30:05,800 Speaker 1: over market share. So this that that's not the right characterization. 519 00:30:06,160 --> 00:30:10,000 Speaker 1: This is really about the most effective way to drive 520 00:30:10,160 --> 00:30:12,480 Speaker 1: growth and profit in the business is by running a 521 00:30:12,560 --> 00:30:17,840 Speaker 1: balanced marketplace. So the coupons and managing seasonality are really 522 00:30:17,880 --> 00:30:21,680 Speaker 1: about keeping a very healthy, vibrant marketplace and keeping drivers 523 00:30:21,760 --> 00:30:24,960 Speaker 1: engaged because you know, the next week, after a slow week, 524 00:30:25,000 --> 00:30:27,600 Speaker 1: the next week you have say St. Patrick's Day, and 525 00:30:27,760 --> 00:30:30,440 Speaker 1: it's roaring and we couldn't possibly get as many drivers 526 00:30:30,480 --> 00:30:32,640 Speaker 1: as we need on the road. So it's an important engagement. 527 00:30:32,880 --> 00:30:34,800 Speaker 1: So John, let me put it this way. If you 528 00:30:34,880 --> 00:30:37,280 Speaker 1: focus on margins one day, does that give Uber an 529 00:30:37,320 --> 00:30:40,280 Speaker 1: opportunity to calau that market share another It is we're 530 00:30:40,320 --> 00:30:42,840 Speaker 1: not focused on our competition. We're focused on what we control, 531 00:30:43,240 --> 00:30:46,720 Speaker 1: and so every day we're thinking about how to serve 532 00:30:46,760 --> 00:30:50,360 Speaker 1: our drivers and passengers build a long term model pushing 533 00:30:50,400 --> 00:30:53,200 Speaker 1: down our operating costs and like this driver center, the 534 00:30:53,200 --> 00:30:56,080 Speaker 1: operating costs of our drivers, and that's what's allowed us 535 00:30:56,120 --> 00:30:58,760 Speaker 1: to go from just over market your two years ago 536 00:30:58,800 --> 00:31:02,120 Speaker 1: to nearly good share. We don't focus on markets here. 537 00:31:02,640 --> 00:31:06,200 Speaker 1: We just execute and serve our constituents. You did grow 538 00:31:06,280 --> 00:31:09,400 Speaker 1: market share considerably over the last couple of years, twenty 539 00:31:09,440 --> 00:31:13,120 Speaker 1: two to some thirty nine percent. At the same time, Uber, 540 00:31:13,440 --> 00:31:15,280 Speaker 1: and you know you don't focus too much on the competition, 541 00:31:15,360 --> 00:31:18,720 Speaker 1: as you say, going through sexual harassment allegations of delete 542 00:31:18,800 --> 00:31:22,920 Speaker 1: Uber campaign, how much do you think Uber's mistakes helped you? 543 00:31:23,000 --> 00:31:26,440 Speaker 1: And in conversely, if Uber stops making mistakes, does that 544 00:31:26,560 --> 00:31:30,520 Speaker 1: hurt Logan? I think what we saw in sixteen something 545 00:31:30,560 --> 00:31:33,280 Speaker 1: really unique happened and we hit scale in most of 546 00:31:33,360 --> 00:31:37,080 Speaker 1: our major markets. So in this business, if you're operating subscale, 547 00:31:37,080 --> 00:31:39,479 Speaker 1: your pickup times are too high. But when you hit 548 00:31:39,600 --> 00:31:43,080 Speaker 1: scale and you can reliably deliver a three minute pickup 549 00:31:43,120 --> 00:31:46,120 Speaker 1: time on average, uh, that's a huge unlock. That's what 550 00:31:46,200 --> 00:31:49,040 Speaker 1: it takes to compete. So before we didn't have scale 551 00:31:49,080 --> 00:31:52,760 Speaker 1: in we hit scale, and that's when we started competing 552 00:31:52,800 --> 00:31:56,080 Speaker 1: on execution and delivering a better experience, and we were 553 00:31:56,160 --> 00:32:00,200 Speaker 1: taking share well before any of the competition's missed US, 554 00:32:00,600 --> 00:32:04,480 Speaker 1: and that's continued and accelerated since. Drill it down into 555 00:32:04,520 --> 00:32:06,920 Speaker 1: this market share number for me, how much does that fluctuate? 556 00:32:07,120 --> 00:32:09,680 Speaker 1: Is that based on total spend? On? Where does that 557 00:32:09,800 --> 00:32:13,200 Speaker 1: number come fround? The number using the perspectus was based 558 00:32:13,240 --> 00:32:16,760 Speaker 1: on rides um. Yeah, and it it changes every day 559 00:32:16,840 --> 00:32:20,160 Speaker 1: and and every month. But the trend has been very 560 00:32:20,200 --> 00:32:24,160 Speaker 1: good for LIFT. So is getting the market share in 561 00:32:24,240 --> 00:32:29,200 Speaker 1: the US more important than expanding internationally? Logan, Our focus 562 00:32:29,320 --> 00:32:31,440 Speaker 1: is always on taking care of our customer, so we 563 00:32:31,520 --> 00:32:35,200 Speaker 1: don't set market share goals. We focus on delivering the 564 00:32:35,360 --> 00:32:38,880 Speaker 1: world's best transportation to our customers, and so we do 565 00:32:39,040 --> 00:32:41,760 Speaker 1: think about international every year. We sit down and we 566 00:32:41,920 --> 00:32:44,800 Speaker 1: make the trade off. Can we go deeper on this 567 00:32:44,920 --> 00:32:47,080 Speaker 1: one point two trillion dollar market in the US and 568 00:32:47,240 --> 00:32:50,520 Speaker 1: deliver better transportation to our customers here or is it 569 00:32:50,640 --> 00:32:52,920 Speaker 1: time to go abroad? And so a little over a 570 00:32:52,960 --> 00:32:55,600 Speaker 1: year ago we launched Canada and that's been a great 571 00:32:55,680 --> 00:32:59,960 Speaker 1: experience for us UH and we'll continue to consider international opportunity. 572 00:33:00,120 --> 00:33:02,840 Speaker 1: I think it's sort of a great call option. But 573 00:33:03,040 --> 00:33:04,920 Speaker 1: right now, what do you mean by a great call option? 574 00:33:05,760 --> 00:33:07,720 Speaker 1: You know, I think it's it's a great There are 575 00:33:07,840 --> 00:33:11,280 Speaker 1: many future growth opportunities in this business, whether we're going 576 00:33:11,400 --> 00:33:15,480 Speaker 1: deeper in North America or going international. So we look 577 00:33:15,520 --> 00:33:17,960 Speaker 1: at that as as a call option for the business, 578 00:33:18,520 --> 00:33:20,280 Speaker 1: and we may choose to do that someday, but we 579 00:33:20,320 --> 00:33:22,760 Speaker 1: don't have current plans right now. If you were to 580 00:33:22,880 --> 00:33:25,960 Speaker 1: launch an international market, a new one outside of Canada, John, 581 00:33:26,040 --> 00:33:28,560 Speaker 1: what are some exciting markets? I mean, what are some 582 00:33:28,640 --> 00:33:31,240 Speaker 1: markets that you look We believe there needs to be 583 00:33:31,520 --> 00:33:33,520 Speaker 1: you know, at least two players in a given market, 584 00:33:34,120 --> 00:33:36,000 Speaker 1: and so we would look to markets where there's just 585 00:33:36,160 --> 00:33:38,920 Speaker 1: one and that would be the best opportunity should we 586 00:33:38,960 --> 00:33:43,040 Speaker 1: go should we decide to go inter nationale except for China. Okay, Um, 587 00:33:43,360 --> 00:33:46,080 Speaker 1: let's talk about founder control. You have a lot of 588 00:33:46,160 --> 00:33:49,800 Speaker 1: voting power, almost voting power, but you hold five percent 589 00:33:49,960 --> 00:33:52,080 Speaker 1: of shares and there was a lot of backlash when 590 00:33:52,160 --> 00:33:54,560 Speaker 1: this came out. What's your argument that that's the best 591 00:33:54,680 --> 00:33:57,360 Speaker 1: way to govern this company. Yeah. We put a lot 592 00:33:57,440 --> 00:33:59,239 Speaker 1: of thought into this with our board and a lot 593 00:33:59,280 --> 00:34:02,120 Speaker 1: of our investors, and we really wanted to set the 594 00:34:02,200 --> 00:34:04,600 Speaker 1: company up to go after the long term and make 595 00:34:04,680 --> 00:34:08,000 Speaker 1: the right investments to seize this long term opportunity. We 596 00:34:08,160 --> 00:34:11,120 Speaker 1: think that's going to be necessary to deliver the largest 597 00:34:11,239 --> 00:34:15,319 Speaker 1: shareholder returns over time, and so dual class was an 598 00:34:15,320 --> 00:34:17,359 Speaker 1: important piece of it. We designed it. You know, John 599 00:34:17,400 --> 00:34:21,120 Speaker 1: and I together still have less than majority control. We 600 00:34:21,840 --> 00:34:25,759 Speaker 1: selected an independent chair, Sewan Argawall has stepped in as 601 00:34:25,800 --> 00:34:28,520 Speaker 1: an independent chair of the Lift board, and we have 602 00:34:28,840 --> 00:34:31,400 Speaker 1: I think an incredible board from a diverse set of 603 00:34:31,440 --> 00:34:33,759 Speaker 1: backgrounds set up to guide the company. And we think 604 00:34:33,880 --> 00:34:36,759 Speaker 1: collectively that's the right package. But there are concerns John 605 00:34:36,840 --> 00:34:39,520 Speaker 1: that this won't lead to the appropriate checks and balance 606 00:34:39,560 --> 00:34:42,719 Speaker 1: as you need on a public company. And we've seen 607 00:34:42,760 --> 00:34:46,200 Speaker 1: situations at Google and Facebook where founder led decisions were 608 00:34:46,320 --> 00:34:49,480 Speaker 1: made that maybe weren't the best decisions. How do you 609 00:34:49,560 --> 00:34:52,840 Speaker 1: respond to that? Respond by saying we've been balanced and 610 00:34:52,920 --> 00:34:55,840 Speaker 1: how we've we've put this together. As Logan mentioned, we 611 00:34:55,880 --> 00:34:58,239 Speaker 1: have an independent chair, we have a diverse board, we 612 00:34:58,320 --> 00:35:02,239 Speaker 1: have a great broad set of s holders. Uh and uh. 613 00:35:02,480 --> 00:35:04,239 Speaker 1: You know, when when we talk to our investors, we 614 00:35:04,360 --> 00:35:06,680 Speaker 1: let them know that we care deeply about their views, 615 00:35:06,960 --> 00:35:09,399 Speaker 1: care deeply about incorporating them and our and our track 616 00:35:09,480 --> 00:35:13,000 Speaker 1: records shows that you've been investing heavily in self driving technology. 617 00:35:13,640 --> 00:35:16,880 Speaker 1: How much and how fast do you think self driving 618 00:35:16,960 --> 00:35:20,680 Speaker 1: technology will bring your costs down? I think we're still 619 00:35:20,880 --> 00:35:24,480 Speaker 1: years away from self driving. How many years I wish 620 00:35:24,520 --> 00:35:28,799 Speaker 1: I knew myself? I don't, But you know, I think 621 00:35:28,840 --> 00:35:30,640 Speaker 1: there's there's kind of a conception that there's going to 622 00:35:30,680 --> 00:35:33,520 Speaker 1: be a magical self driving vehicle that will appear one day, 623 00:35:34,200 --> 00:35:37,439 Speaker 1: uh and do every ride. But the way we see 624 00:35:37,480 --> 00:35:39,640 Speaker 1: it playing out from all of our work in the 625 00:35:39,719 --> 00:35:42,520 Speaker 1: space is that the first generation of vehicles will only 626 00:35:42,560 --> 00:35:45,200 Speaker 1: be able to do a subset of the rides. So 627 00:35:45,560 --> 00:35:47,560 Speaker 1: I think it would be critical that they're rolled out 628 00:35:47,880 --> 00:35:50,640 Speaker 1: on a platform like ours where you can count on 629 00:35:50,800 --> 00:35:53,239 Speaker 1: drivers to fulfill every request. Right, It may be a 630 00:35:53,280 --> 00:35:56,959 Speaker 1: long time for security reasons before a ton of empty 631 00:35:57,000 --> 00:35:59,680 Speaker 1: autonomous vehicle is allowed to do pick up at an airport, 632 00:36:00,080 --> 00:36:03,000 Speaker 1: let alone, drive in extreme weather, drive at night, drive 633 00:36:03,040 --> 00:36:06,240 Speaker 1: at certain speeds through bridges and tunnels. There's all sorts 634 00:36:06,280 --> 00:36:08,759 Speaker 1: of restrictions that the first generation of vehicles will have. 635 00:36:09,440 --> 00:36:12,520 Speaker 1: So I think we're a number of years out from 636 00:36:12,840 --> 00:36:15,640 Speaker 1: the first generation and that may be able to do say, 637 00:36:15,719 --> 00:36:18,239 Speaker 1: ten percent of rides, and then the second generation could 638 00:36:18,239 --> 00:36:21,040 Speaker 1: do thirt rides. I think you'll see, you know, it'll 639 00:36:21,080 --> 00:36:24,640 Speaker 1: be quite sometime, you know, probably a decade or two 640 00:36:24,840 --> 00:36:27,480 Speaker 1: before you have a car that you know can do 641 00:36:27,640 --> 00:36:30,360 Speaker 1: every single ride out there. So I think a network 642 00:36:30,400 --> 00:36:34,480 Speaker 1: application for deploying self driving cars will be the you know, 643 00:36:34,760 --> 00:36:38,160 Speaker 1: majority case for the years to come. Then in the meantime, John, 644 00:36:38,200 --> 00:36:40,560 Speaker 1: you know, I know you're very focused on changing trends 645 00:36:40,640 --> 00:36:44,000 Speaker 1: in car ownership, but in many cities where Lift and 646 00:36:44,160 --> 00:36:46,800 Speaker 1: Uber are big operators, you're actually seeing an increase in 647 00:36:46,840 --> 00:36:49,000 Speaker 1: car in all the road. You're seeing more concession, you're 648 00:36:49,000 --> 00:36:53,799 Speaker 1: actually seeing more car ownership. What evidence have you seen 649 00:36:54,120 --> 00:36:57,000 Speaker 1: that car ownership trends are actually changed. I think actually 650 00:36:57,000 --> 00:36:59,880 Speaker 1: we've seen like peak car ownership. And if you look 651 00:36:59,880 --> 00:37:02,560 Speaker 1: at the national numbers, you look at people that are 652 00:37:02,640 --> 00:37:05,160 Speaker 1: purchasing or deciding not to purchase, if you look at 653 00:37:05,840 --> 00:37:08,320 Speaker 1: mimentiums that are coming of age and waiting or not 654 00:37:08,480 --> 00:37:11,160 Speaker 1: getting their license, um, and if you look at our growth, 655 00:37:11,760 --> 00:37:14,600 Speaker 1: I think there's, uh, you know, a pretty obvious trend. 656 00:37:15,080 --> 00:37:18,840 Speaker 1: Last year, over three hundred thousand Lift customers got rid 657 00:37:18,880 --> 00:37:22,239 Speaker 1: of a car. Uh, And so some families are going 658 00:37:22,280 --> 00:37:24,440 Speaker 1: from two car to one car. But it is it 659 00:37:24,560 --> 00:37:28,520 Speaker 1: has begun. In your road show, you really talked about 660 00:37:28,800 --> 00:37:32,360 Speaker 1: how you don't do food delivery, you don't do trucking. 661 00:37:32,520 --> 00:37:35,520 Speaker 1: LIFT is about focus. That said, you are getting into 662 00:37:35,600 --> 00:37:39,000 Speaker 1: two new businesses scooters for example, what's going to be 663 00:37:39,080 --> 00:37:42,160 Speaker 1: your biggest source of new revenue in the future. Will 664 00:37:42,200 --> 00:37:44,960 Speaker 1: it be scooters, logan, will it be international expansion, will 665 00:37:45,000 --> 00:37:47,920 Speaker 1: it be something we don't know about. We we compete 666 00:37:47,960 --> 00:37:50,960 Speaker 1: with car ownership, So when you open up the Lift app, 667 00:37:51,120 --> 00:37:54,040 Speaker 1: we want to provide you every possible option that you 668 00:37:54,080 --> 00:37:57,440 Speaker 1: could be trading off, whether that's public transit or connecting 669 00:37:57,480 --> 00:38:00,160 Speaker 1: you with a lift to public transit, whether it's a 670 00:38:00,200 --> 00:38:04,520 Speaker 1: biker scooter, a shared ride, a regular lift, a luxury ride. 671 00:38:04,680 --> 00:38:08,200 Speaker 1: We want to provide you with any possible option. So 672 00:38:08,320 --> 00:38:11,319 Speaker 1: we see competing with the car that's parked in your 673 00:38:11,400 --> 00:38:16,360 Speaker 1: driveway as as the primary goal. And speaking up about 674 00:38:16,400 --> 00:38:18,520 Speaker 1: the future of drivers. You know, I know self driving 675 00:38:18,520 --> 00:38:21,919 Speaker 1: technology is very important. It is long term, as you say, 676 00:38:22,400 --> 00:38:24,920 Speaker 1: but so much of LIFT has been about the values 677 00:38:25,000 --> 00:38:28,880 Speaker 1: treating customers while treating drivers. Well, if you're investing in 678 00:38:28,880 --> 00:38:31,399 Speaker 1: self driving technology, doesn't that mean all of those jobs 679 00:38:31,440 --> 00:38:34,560 Speaker 1: go away? It doesn't that sort of undermine I don't 680 00:38:34,560 --> 00:38:36,279 Speaker 1: think those jobs go at all. In fact, we're gonna 681 00:38:36,280 --> 00:38:38,400 Speaker 1: need many more drivers over the next several years. I 682 00:38:38,440 --> 00:38:41,200 Speaker 1: think about today, Uh, the entire ride sharing mark in 683 00:38:41,239 --> 00:38:43,840 Speaker 1: the US does just one percent of miles traveled? Is 684 00:38:43,880 --> 00:38:46,359 Speaker 1: that goes to ten percent of miles traveled? You would 685 00:38:46,360 --> 00:38:48,920 Speaker 1: need either ten times the number of drivers if we 686 00:38:49,040 --> 00:38:52,240 Speaker 1: had two million nearly two million drivers. Now we're talking 687 00:38:52,600 --> 00:38:56,200 Speaker 1: twenty million drivers. Obviously there's room for both increasing the 688 00:38:56,320 --> 00:39:01,760 Speaker 1: number of work opportunities and h adding tamaspet. So where's 689 00:39:02,280 --> 00:39:05,719 Speaker 1: lift in five years? In five years, five years? In 690 00:39:05,840 --> 00:39:09,400 Speaker 1: five years, we want you to be subscribing to a 691 00:39:09,480 --> 00:39:12,320 Speaker 1: package of miles. So similar to the way you have 692 00:39:12,440 --> 00:39:14,320 Speaker 1: a you have a cell phone and you subscribe to 693 00:39:14,360 --> 00:39:17,680 Speaker 1: a number of minutes, we want people to completely get 694 00:39:17,800 --> 00:39:20,080 Speaker 1: rid of their car and jump into the world of 695 00:39:20,160 --> 00:39:23,279 Speaker 1: transportation as a service and subscribe to miles so that 696 00:39:23,480 --> 00:39:26,040 Speaker 1: you don't have to think about each trip. You're just 697 00:39:26,600 --> 00:39:29,440 Speaker 1: fully onboard in the lift ecosis. So something like lift prime, 698 00:39:29,600 --> 00:39:32,640 Speaker 1: is this like a monthly thing, a yearly thing. It'll 699 00:39:32,680 --> 00:39:36,200 Speaker 1: still have to take shape, but I think people will 700 00:39:36,239 --> 00:39:40,120 Speaker 1: be subscribing to two miles all right, Lift as a service, 701 00:39:40,239 --> 00:39:43,239 Speaker 1: that's interesting. Logan Green, John Zimmer co founders have LIFT 702 00:39:43,440 --> 00:39:45,360 Speaker 1: shares about to start trading. Thank you so much for 703 00:39:45,520 --> 00:39:48,399 Speaker 1: joining us in congratulations. Thank you for having us back 704 00:39:48,440 --> 00:39:51,520 Speaker 1: to you. That was Lift co founders Logan Green and 705 00:39:51,640 --> 00:39:53,400 Speaker 1: John zoom are talking about the I p O with 706 00:39:53,400 --> 00:39:56,360 Speaker 1: Bloomberg's Emily Chang. Lift is set to open in the 707 00:39:56,520 --> 00:39:58,960 Speaker 1: next hour, and we'll be bringing you more coverage. I'm 708 00:39:59,000 --> 00:40:03,759 Speaker 1: Paul Sweeney and it's Bloomberg. Thanks for listening to the 709 00:40:03,800 --> 00:40:10,279 Speaker 1: Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, 710 00:40:10,680 --> 00:40:14,879 Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at 711 00:40:14,960 --> 00:40:19,160 Speaker 1: Tom Keene before the podcast. You can always catch us worldwide. 712 00:40:19,640 --> 00:40:20,720 Speaker 1: I'm Bloomberg Radio.