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Speaker 2: I want to bring in Bloomberg News Audo reporter Keith
Speaker 2: Naughton for more on this and then some other Tesla
Speaker 2: news that we learned a little earlier today that Tesla's
Speaker 2: annual vehicle sales dropped for the first time in more
Speaker 2: than a decade, to spite a year and push that
Speaker 2: sent deliveries to a record in the fourth quarter. Tesla
Speaker 2: shares selling off as a result. We're going to get
Speaker 2: to that in just a minute, Keith, but I do
Speaker 2: want to start with the news just moments ago that
Speaker 2: we learned from officials in Las Vegas that members of
Speaker 2: Tesla's staff are on their way to Las Vegas to
Speaker 2: assist law enforcement agents with finding information from this cyber
Speaker 2: truck that yesterday had an explosive device or explosive devices
Speaker 2: in it. I'm curious what types of information they can
Speaker 2: get from what happens inside of Tesla what happens outside
Speaker 2: of Tesla, Because for people who aren't familiar with these vehicles,
Speaker 2: these have quite a few cameras recording at all times
Speaker 2: on the outside well for sure.
Speaker 3: So you know, modern vehicles, particularly Tesla's, are highly sophisticated.
Speaker 3: They have a lot of devices that record what goes
Speaker 3: on in the car, Cameras being one of them. And
Speaker 3: so while they're not for the level of a black
Speaker 3: box on a jet or something like that, it can
Speaker 3: provide a lot of important information if you're doing an
Speaker 3: investigation like this. You know, we have two incidents yesterday,
Speaker 3: the one in Vegas with the Tesla cybertruck and then
Speaker 3: the attack in New Orleans on Bourbon Street, and that
Speaker 3: was with a Ford F one fifty lightning.
Speaker 4: I've been on the phone with Ford this morning, and they.
Speaker 3: Are also cooperating with authorities to provide them any information.
Speaker 3: And they can glean from that F one fifty lightning.
Speaker 3: So the weight modern cars, particularly electric vehicles, so these
Speaker 3: are both electric vehicles, both rented from turo B any way,
Speaker 3: and so they can provide all sorts of interesting and
Speaker 3: helpful data as this investigation goes on.
Speaker 5: I got to ask you, Keith.
Speaker 6: Okay, and again forgive us folks, because we're trying to
Speaker 6: be very careful here and really just talk about facts
Speaker 6: and stuff.
Speaker 5: But is it interesting that both were electric vehicles?
Speaker 4: Yeah?
Speaker 3: Well, I mean one way to look at that, and
Speaker 3: again I don't want to go too far into the
Speaker 3: speculation exactly, but electric vehicles, in the case of the
Speaker 3: New Orleans attack, they are powered by a battery that
Speaker 3: is very heavy.
Speaker 4: That adds thousands of pounds of weight to the vehicle.
Speaker 3: So you know, if you're looking to maximize destructive properties,
Speaker 3: more weight will do that.
Speaker 2: Keith, what do you make of the Turo connection here?
Speaker 2: I think a lot of folks might be familiar with
Speaker 2: traditional places to rent a vehicle, but are now hearing
Speaker 2: about Tururo for the first.
Speaker 3: Time, right and Turo, you know, it can be a
Speaker 3: little bit like automotive Airbnb. Sometimes it's individuals who are
Speaker 3: renting out their exotic cars.
Speaker 4: Turrow has been known for exotics and for electric vehicles.
Speaker 3: We don't know, or I don't know the details of
Speaker 3: how these two were rented and where they come from.
Speaker 3: I know that in the case of Forward from my
Speaker 3: conversations with them, they're trying to help with that, but
Speaker 3: it is it is a rental traditionally that has rented
Speaker 3: more exotic cars, different cars, electric vehicles, not your standard,
Speaker 3: you know, Hurtznatus.
Speaker 6: All right, we're going to move along, and obviously we're
Speaker 6: going to continue to monitor any headlines that might come
Speaker 6: out on either situation in New Orleans or in Vegas.
Speaker 5: But Keith, we.
Speaker 6: Initially thought we were going to talk to you about
Speaker 6: Tesla's sales numbers, which we'd given everybody a heads up
Speaker 6: on New Year's Eve that we expected there to be
Speaker 6: some disappointment. I am curious, though Tesla's shares are selling off,
Speaker 6: our investor's right to be disappointed.
Speaker 5: Is it a big deal for Tesla?
Speaker 3: It is a big deal because it's the first decline
Speaker 3: in annual sales in more than a decade. And to
Speaker 3: put it in context, when that last drop happened between
Speaker 3: two thousand and ten and twenty eleven, Tesla was selling
Speaker 3: about twelve hundred vehicles a year back then. It's now
Speaker 3: selling close to two million, So it's a completely different situation.
Speaker 3: And you know, everyone, once in a while, the market
Speaker 3: is reminded that, yes, Tesla is a car company, and
Speaker 3: if they don't sell enough cars, they don't make enough money.
Speaker 3: The stock has been on a tear, particularly since the election,
Speaker 3: because everyone was excited about the political influence.
Speaker 4: That Elon Musk would have.
Speaker 3: It's been also rising since Elon Musk has focused so
Speaker 3: much more on AI and the robotaxi they're developing. But
Speaker 3: when it comes down to it, Tesla needs to sell
Speaker 3: electric vehicles and they're having a harder time doing that.
Speaker 2: Is Tesla having the same issues that other EV companies
Speaker 2: are having competition from China less of an interest in
Speaker 2: evs and more of an interest in hybrids, high ticket
Speaker 2: prices that many Americans and people around the world can't
Speaker 2: necessarily afford, especially when you compare it with those Chinese
Speaker 2: evs and then cars from with the traditional internal combustion engines.
Speaker 2: Is that what the issue is?
Speaker 3: Yeah, absolutely, Tesla is facing those same headwinds as the
Speaker 3: rest of the industry. But Tesla has an additional headwind
Speaker 3: and that is the rest of the industry. You know,
Speaker 3: they basically had the EV market to themselves until a
Speaker 3: few years ago, and particularly in this past year, we
Speaker 3: now have I think seventy five evs on the US market,
Speaker 3: So you have GM coming finally with their evs and
Speaker 3: their lower price, where Tesla doesn't have much product to
Speaker 3: play with.
Speaker 4: But Tesla really needs to get its volumes back up.
Speaker 3: Is this model y refresh known as Juniper that's coming
Speaker 3: next year, that's supposed to be in the mid thirty
Speaker 3: thousand range. Right now, Tesla's average prices are above forty thousand,
Speaker 3: and they've come down a lot because Tesla's resorted to
Speaker 3: the old fashioned, you know, marketing incentives that normal carmakers do,
Speaker 3: like zero percent financing and free charging.
Speaker 4: So they've they've done.
Speaker 3: That and their prices have come down a bit, but
Speaker 3: they're still a little high for mainstream buyers.
Speaker 6: I mean, is Tesla getting to the point, you know,
Speaker 6: we often talk about a tech company that's, you know,
Speaker 6: an upstart, you know, on a growth trajectory, kind of
Speaker 6: owns its market and then it matures a little bit.
Speaker 6: Is that kind of what's happening, Keith? I mean, can
Speaker 6: we kind of put that label on Tesla? Are not necessarily.
Speaker 3: Definitely from its you know, traditional EV selling business.
Speaker 4: It has matured at a very time, at the very
Speaker 4: time that.
Speaker 3: As we said, the EV market is slowing, so you know,
Speaker 3: it's just a harder sell with evs right now. The
Speaker 3: growth rate of EV's last year was in the mid
Speaker 3: seven percent.
Speaker 4: You know, the year before was forty seven percent.
Speaker 3: So we're in a very cooling market for pure electric
Speaker 3: vehicles and that's all Tesla sells. And test Tha's lineup
Speaker 3: is really aging, so they desperately need new and refreshed
Speaker 3: product to reinvigorate their sales.
Speaker 6: All right, going to leave it on that note. Keith Noughton,
Speaker 6: thank you so much. Auto reporter O at Bloomberg News
Speaker 6: joining us from Detroit.
Speaker 7: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 6: All right, let's get out to someone who's got to
Speaker 6: make investment bets. And he recently wrote about the parallel
Speaker 6: between the dot com bubble and today's AI driven euphoria.
Speaker 6: He says, we are in the late stages of a
Speaker 6: major financial euphoria episode. We welcome back Bill Smeed, cio
Speaker 6: over at Smeed Capital Management. They've got approximately seven and
Speaker 6: a half billion dollars in assets under management. Bill, joining
Speaker 6: us on this Thursday. It is Thursday, it's a new year.
Speaker 6: Joining us from Phoenix, Arizona. Bill, Good to have you
Speaker 6: back with us. Happy new Year.
Speaker 5: I don't know.
Speaker 6: Tell us about this parallel between the dot com bubble
Speaker 6: and the AI. We've talked this actually a fair amount
Speaker 6: here at Bloomberg. Does it burst then at some point?
Speaker 6: And how do you tell or any indication of when
Speaker 6: that happens.
Speaker 8: Well, I listened to your prior segment. This won't be
Speaker 8: a black swan, that this will be an in your
Speaker 8: face duck. In other words, it is absolutely inevitable. Here's
Speaker 8: what I love about the current euphoria. All the other
Speaker 8: euphorias front loaded the stock prices of the beneficiaries of.
Speaker 9: The new legitimate business development.
Speaker 8: So in twenty nine it was front loading the excitement
Speaker 8: about radio and RCA was the Nvidia, And.
Speaker 4: Then in sixty nine to seventy it was landing on the.
Speaker 8: Moon in the semiconductor and ultimately peaked out with a
Speaker 8: nifty to fifty, And then in ninety nine it was
Speaker 8: the Internet was going.
Speaker 6: To change our life.
Speaker 10: Did they succeed?
Speaker 9: Did all those legitimate developments play out and.
Speaker 8: Get used dramatically more and completely changed the way Americans operated.
Speaker 8: The answer is yes. And did people get crushed in
Speaker 8: the stock market in all prior cases?
Speaker 9: And the answer is yes. So if you own the
Speaker 9: momentum trades of.
Speaker 8: The last three or four years, whether it be a
Speaker 8: year from now or a month from now or three
Speaker 8: weeks ago, the pain that people are going to get
Speaker 8: exhibited on them versus the trade off of an additional
Speaker 8: year of glorious success like the last two years will
Speaker 8: be It's a bad risk reward relationship. And it's right
Speaker 8: in front of everyone's face. It's not a black swan,
Speaker 8: it's not hidden anywhere. And your friend in London made
Speaker 8: the right call. We've got fifteen different indicators, not just
Speaker 8: the option trading. Virtually every measurement tool for measuring historical
Speaker 8: stock market valuation is at the absolute ninety eight percentile
Speaker 8: or higher right now?
Speaker 4: All right?
Speaker 6: So then if we agree with you, then what happens
Speaker 6: like how much of a market decline, how much has
Speaker 6: to be kind of taken off? What kind of froth
Speaker 6: needs to be taken off in your view to make
Speaker 6: it more normalized?
Speaker 8: Yeah, I think you go to seventy three seventy four,
Speaker 8: And the problem is seventy three seventy four was a
Speaker 8: fifty percent decline in the S and P over two years,
Speaker 8: and then didn't come out of it until nineteen eighty two. Right,
Speaker 8: the Dow used to be the primary benchmark at that time,
Speaker 8: and the Dow kept peeking out at one thousand, including
Speaker 8: in nineteen seventy two, and then we started from seven
Speaker 8: to seventy five on the Dow at the bottom in
Speaker 8: August of nineteen eighty two.
Speaker 4: But Bill had been we.
Speaker 5: Only have a couple of minutes.
Speaker 6: But I want to ask you, though, it's safe to
Speaker 6: say that today's marketplace maybe not the same as seventy
Speaker 6: or what was going on in the seventies. And maybe
Speaker 6: I just think about the frequency with how information kind
Speaker 6: of flies through the market and social media and the velocity,
Speaker 6: and when things don't look right, they kind of get
Speaker 6: taken down pretty quickly.
Speaker 8: Yeah, it's different this time, I think, is what you're asking.
Speaker 10: It is different.
Speaker 8: It's always different this time, it's always different.
Speaker 9: But the similarities is what kill you.
Speaker 8: So I happen to read a piece this last week
Speaker 8: from twenty fourteen from Warren Buffett, and this is twenty fourteen,
Speaker 8: he said, you know, the market spends most of its
Speaker 8: time reasonably priced, and he calls that reasonableness. But in
Speaker 8: twenty fourteen he said in his career five times it
Speaker 8: lost its reasonableness, and that was in twenty fourteen.
Speaker 10: So I think when his partner Charlie Munger said this
Speaker 10: is the big financially forty episode of his career because
Speaker 10: of the totality of a few years ago, I think
Speaker 10: Buffett is demonstrating through raising cash that he thinks this
Speaker 10: market lacks reasonableness.
Speaker 2: So where the just we have thirty seconds left, where
Speaker 2: the opportunities for this year.
Speaker 8: The opportunities are spelled E N E RGY.
Speaker 2: We've heard that from you before.
Speaker 8: Electricity forty percent of electricity is made with natural gas.
Speaker 8: That I'm not a commodity trader, but that's what I'd
Speaker 8: be all over on oil and gas stocks.
Speaker 9: The price of oil is not going to go down.
Speaker 9: By the way, pertaining to your prior conversation, people that
Speaker 9: live in China their body temperatures ninety eight point six.
Speaker 9: It's the oldest civilization in the world, and they're very
Speaker 9: intelligent people. The chance of them pulling themselves out of
Speaker 9: This is one hundred percent and American exceptionalism is way
Speaker 9: overcooked because we're just ninety eight point six and that's
Speaker 9: all wherever going to be.
Speaker 5: All right, Gonna have to leave it on that now.
Speaker 5: Thank you so much.
Speaker 6: We know we had a lot of breaking news and
Speaker 6: we had to jump around a little bit, but Bill Smead,
Speaker 6: we really appreciate getting some time with you. Bill Smead,
Speaker 6: Chief Investment Officer. It's Meet Capital Management, coming to us
Speaker 6: from Phoenix, Arizona.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 2: This is not going to surprise anyone who has listened
Speaker 2: to or watched our show in the past because we
Speaker 2: talk about this a lot. But women founded startups get
Speaker 2: only a fraction of the VC funding of male startups.
Speaker 2: I mean we're talking single digits here. I mean depending
Speaker 2: on by far so much, depending on which data you
Speaker 2: look at via you know, Pitchbook or others, it's like
Speaker 2: single digits. Yeah, but they made gains last year. Women
Speaker 2: in non binary VC investors have gained a foothold in
Speaker 2: the tech industry, five years faster than the advocacy group
Speaker 2: all RAYS expected, but leaders say a national backlash diversity,
Speaker 2: equality and inclusion initiatives threatens the progress that's been made.
Speaker 2: So Carol, about eighteen percent of decision makers at USVC
Speaker 2: firms are female. It's double from twenty eighteen when all
Speaker 2: Rays was founded and set a goal of reaching that
Speaker 2: number by twenty twenty eight that's according to the group's
Speaker 2: in Your report that was published last year. So some progress,
Speaker 2: some progress, some progress, some progress.
Speaker 6: Let's see what Jesse Draper has to say about that.
Speaker 6: She's founding partner of Halogen Ventures. The VC firm has
Speaker 6: invested in more than seventy five female founded tech startups,
Speaker 6: including baby List, Flex, everly Well, and more. She joins
Speaker 6: us on this Thursday from Los Angeles. Jesse, good to
Speaker 6: be talking again with you. It does feel like, first
Speaker 6: of all, that there is a backlash on all things
Speaker 6: DEI how is that potentially going to impact the VC world,
Speaker 6: which already when it comes to female founded firms, I mean, man,
Speaker 6: they have to struggle to find funding.
Speaker 11: They do have to struggle to find funding. But you know,
Speaker 11: the best companies will get funded. I think the most
Speaker 11: important thing right now that we think about is just
Speaker 11: getting capital into the hands of women, and that could
Speaker 11: be a female and the founding team. Like at Hallajenventus
Speaker 11: when we invest, there has to be a female in
Speaker 11: the founding team. And we were still part of one
Speaker 11: of the largest raises of twenty twenty four, which was
Speaker 11: a one point nine billion dollar raise with a female
Speaker 11: and the founding team. And it's called Metropolis. It's a
Speaker 11: parking technology company. You know, there's no lack of incredible
Speaker 11: deals being started by women. I think it's about looking
Speaker 11: at the world a little differently, getting into new networks
Speaker 11: and breaking out of like our traditional way of deploying capital. Also,
Speaker 11: thank you for having me again, Carol and Tim.
Speaker 10: It's good.
Speaker 5: It's good to be You're welcome. You're welcome, you know, sire.
Speaker 6: I was just looking at Tim and I'm just saying, listen.
Speaker 6: Part of the reason it's fun to do a show
Speaker 6: man woman whatever, like some diversity, Like we do look
Speaker 6: at things differently, Tim and I do think about what's
Speaker 6: being lost in the VC world by now looking at
Speaker 6: female founded firms who look at the world differently, and
Speaker 6: maybe what's needed.
Speaker 2: Well, Jesse, talk a little bit about networks, because this
Speaker 2: is something you absolutely understand being in the space and
Speaker 2: essentially growing up in the space. What are networks when
Speaker 2: it comes to venture capital? Pull the curtain back a little.
Speaker 11: Bit, so I look at it as networks and tech ecosystems.
Speaker 11: So when I think about networks, you know, I think
Speaker 11: women lack those networks. Traditionally, men have one passed the
Speaker 11: pocketbooks down from generation to generation, and we need to
Speaker 11: like break the women in there. Right now is the
Speaker 11: largest transference of generational wealth, and the majority of that
Speaker 11: is actually going to be going to women. So we
Speaker 11: need women investing and we need capital going to women,
Speaker 11: which hopefully will inevitably happen. We are you know, I
Speaker 11: think about networks, and you would start with, say Stanford,
Speaker 11: where Silicon Valley is where I literally grew up. I've
Speaker 11: lived in LA for twenty years, but you know, Stanford
Speaker 11: started the first sort of technology ecosystem as we know it.
Speaker 11: And these typically begin with a university, and so you
Speaker 11: build that out because then great talent comes from the university,
Speaker 11: great ideas come from the university, and ultimately great companies
Speaker 11: spin out of that University. So, you know, you look
Speaker 11: at the great tech ecosystems across the country. Those networks
Speaker 11: are starting to broaden because we're now seeing many more
Speaker 11: than just twelve technology cities across the country. We at
Speaker 11: Halijn Ventures actually just announced that we were the first
Speaker 11: out of state investment that Innovate Alabama made into a fund.
Speaker 11: And so we've partnered with Innovate Alabama and we have
Speaker 11: been going and researching and digging in and meeting with
Speaker 11: hundreds of entrepreneurs in Alabama. And I have to say,
Speaker 11: even I was surprised by I hadn't spent a ton
Speaker 11: of time in Alabama. I don't know that a lot
Speaker 11: of people in California have. I shouldn't generalize there, but
Speaker 11: there are some amazing tech ecosystems there. There's world class university,
Speaker 11: over fifty Fortune five hundred companies represented too are actually
Speaker 11: based there, a lot of great aerospace ag tech, you know,
Speaker 11: And I'm blown away by the incredible talent in Alabama.
Speaker 11: And I think we just need to start looking at
Speaker 11: new tech ecosystems, starting with new universities in different locations.
Speaker 11: There's a lot going on in the South, and we're
Speaker 11: really trying to capitalize on that. I think also as
Speaker 11: a strategy, we're really thinking how do we get out
Speaker 11: of those typical networks where people are only investing in
Speaker 11: the Stanfords and the Harvards of the world, which you know,
Speaker 11: we have Stanfords and Harvard's in our portfolio as well,
Speaker 11: but I think it's important to create a well diversified portfolio.
Speaker 11: And if you look at ecosystems around the world, even
Speaker 11: in like Sub Saharan Africa, they often give capital to
Speaker 11: the women to build the community and build the ecosystem
Speaker 11: and build the wealth for families.
Speaker 6: Right, go back to I'm just Mohammed yunus, right the problem, No,
Speaker 6: you think about my micro you know, investing micro lending
Speaker 6: in particular, it was to the woman because she would
Speaker 6: put the money to work, and sometimes it was making
Speaker 6: baskets or doing something that seems so basic, but it
Speaker 6: created income for that family, and she paid back the
Speaker 6: loan and it created a better life for that family.
Speaker 6: I want to go back though, to what you're saying
Speaker 6: about working with Alabama and some other universities. It reminds
Speaker 6: me of Steve Case, you know, the AOL co founder,
Speaker 6: And yeah, exactly, like yeah, and the future of technology
Speaker 6: being outside Silicon Valley. Talk to us a little bit
Speaker 6: about your portfolio and what you're you know, in a
Speaker 6: world where we spend so much time talking about artificial
Speaker 6: intelligence and generative AI and super high tech things going
Speaker 6: on and autonomous driving and robots, Like, what is it
Speaker 6: that you know where you are putting your VC money
Speaker 6: at this point?
Speaker 11: Yeah, thank you for asking that.
Speaker 5: You know, So we are.
Speaker 11: We have over seventy five companies now and five of
Speaker 11: those are current unicorns. We're still young in the space,
Speaker 11: but we're doing fantastic. I'm really proud of our portfolio
Speaker 11: and we're excited about investing in Alabama because Alabama is
Speaker 11: actually unfortunately listed as fiftieth in quite a few things,
Speaker 11: education among them, but most pertinent too Halogen. It is
Speaker 11: ranked fiftieth for female founders, and so we really wanted
Speaker 11: to make change there and innovate. Alabama was excited about
Speaker 11: our thesis. Our current thesis is around future of family,
Speaker 11: how do you support the family at work, at home,
Speaker 11: the physical health of the family, and the financial health
Speaker 11: of the family. And the reason we invested in that
Speaker 11: is it's actually a research based thesis that we created
Speaker 11: because we looked at our past two portfolios and realized
Speaker 11: about a dozen of our companies were in the childcare
Speaker 11: and future of family space, which is a seven point
Speaker 11: five trillion dollar opportunity. And these are companies like Binti
Speaker 11: Solving Adoption now in four hundred social services agencies across
Speaker 11: the country upwards, which has sixty six thousand in home
Speaker 11: vetted childcare locations for the zero to six year old.
Speaker 11: This is the most affordable option for childcare below the
Speaker 11: age of six in the United States, which is a
Speaker 11: place we've completely forgotten about children, and also the most
Speaker 11: important to invest in because that's where neglect happens and
Speaker 11: all these terrible things. So we're investing and this is
Speaker 11: that's the largest actually network of child care facilities in
Speaker 11: the country. We're also in baby List, a billion dollar
Speaker 11: baby registry company that will likely go public in the
Speaker 11: next couple of years.
Speaker 5: I'm not sharing anything.
Speaker 2: Jesse, I'm wondering how you disrupt the childcare industry. As
Speaker 2: a parent of young kids, and we're constantly struggling to
Speaker 2: find childcare. It's incredibly expensive here in New York City
Speaker 2: and around the country now affordable, totally unffordable. How do
Speaker 2: you how do you just that's the venture capital approach
Speaker 2: to childcare. How do you solve this?
Speaker 5: How do you make it cheaper and more accessible?
Speaker 2: Right, this doesn't seem like.
Speaker 11: Something that's scalable exactly, so you make much more Like
Speaker 11: you're saying, we are very focused on affordable childcare, on
Speaker 11: healthcare for families, on financial management tools, which was sort
Speaker 11: of an interesting piece of our data that we found
Speaker 11: that families were looking for, like how do we manage
Speaker 11: our money? So we're investors in Sally Quachec's company, Elves,
Speaker 11: the first financial management platform to take child care into account.
Speaker 11: But Upwards, which I was mentioning, they're actually solving that
Speaker 11: problem of unaffordable childcare because ninety nine percent of society
Speaker 11: can't afford a you know, private preschool or preschool just
Speaker 11: in general, and Upwards is finding these locations, vetting them
Speaker 11: and now has sixty six thousand, many in Alabama, all
Speaker 11: across the country, and they have corporate benefits programs, they
Speaker 11: have they signed an a figure deal with the governments
Speaker 11: to subsidize costs for those living below the poverty line.
Speaker 11: And so we're really trying to solve those issues in
Speaker 11: society that I think people have forgotten about you know,
Speaker 11: we're in this company, Binti, And really it was like
Speaker 11: people are still to day matching children with homes, both
Speaker 11: foster and adoptive by hand. The founder was meeting with
Speaker 11: these these families and then meeting with these social service
Speaker 11: agents who'd have stacks of papers and say, here's my
Speaker 11: family cases. You know, here's the kids looking for families,
Speaker 11: and it's completely inefficient. So they created some great technology.
Speaker 11: They now match the families, find the families, build the families,
Speaker 11: and they're just listening to what these families need and
Speaker 11: they're doing incredibly well. So there's a huge opportunity and
Speaker 11: I know we're also making an impact, but you know,
Speaker 11: I am looking to obviously capitalize on this opportunity while
Speaker 11: making an impact. And I think that's what people think. Oh,
Speaker 11: investing in women is charity. Investing in childcare. People were
Speaker 11: telling me wasn't a big enough opportunity even though it
Speaker 11: affects so much of society, right, And I you know,
Speaker 11: I said, okay, well I'll take that as a little
Speaker 11: challenge and we'll show you how massive this opportunity is.
Speaker 11: And it's a seven point five trillion dollar opportunity.
Speaker 6: Jesse, just to really recap. Just got to be quick though,
Speaker 6: please twenty seconds, twenty five seconds. The incoming administration, new administration,
Speaker 6: is that going to impact your world? Are you anticipating
Speaker 6: that just quickly?
Speaker 11: I think it is already impacting my world. You know,
Speaker 11: they're doing away with a lot of DEI opportunities for companies.
Speaker 11: I think I just really would encourage the business ecosystem,
Speaker 11: technology ecosystem to invest your dollars, make sure that they
Speaker 11: are supporting women and diversity in general at the company stages,
Speaker 11: especially at the earliest stages.
Speaker 5: It is affecting us.
Speaker 11: So make sure we're breaking out of those traditional dude networks.
Speaker 11: And I love dudes just.
Speaker 5: Like everybody else.
Speaker 11: Little boys that just break out of those networks. Make
Speaker 11: sure you're pulling a woman in the boardroom.
Speaker 6: I'm totally a good, totally gah singing listen, Happy New York.
Speaker 6: Good to check in with you. Of course, that is
Speaker 6: Jesse Draper of Halogen Ventures.
Speaker 5: I'm Rob macle I'll bet you let me drive.
Speaker 7: Oh no, no, no, no, this is not a twenty He's
Speaker 7: going to jug.
Speaker 5: Any please, I'll do the riding gravels. Let's wait I
Speaker 5: want to drive.
Speaker 7: It's a good question time. This is the drive to
Speaker 7: the clothes now plunks for mefic well drin on Bloomberg Radio.
Speaker 6: All right, TikTok, everybody, Just about eighteen minutes to go
Speaker 6: until we wrap up the first training day of twenty
Speaker 6: twenty five.
Speaker 5: Definitely off our best levels of the session.
Speaker 6: What felt like a little bit of maybe a rally
Speaker 6: a different trade based on the last four days of
Speaker 6: twenty twenty four has kind of run out of steam here, Tim.
Speaker 2: Yeah, it has taken a look at the major equity indices.
Speaker 2: We did see hire to start the day. We're off
Speaker 2: our worst levels of the session. Still done three tens
Speaker 2: of one percent pretty much across the board.
Speaker 6: All right, let's see what our drive to the closed
Speaker 6: guest has to say back with us.
Speaker 5: It's been a while.
Speaker 6: Vince Kalano Chief markeut strigis over at Stuyvesant Capital Management,
Speaker 6: joining us here in our Bloomberg Interactive Brokers studio.
Speaker 5: Happy New Year. How are you.
Speaker 12: I'm well, I'm well. Happy to get to both of you.
Speaker 12: Thank you, Yeah, thank you.
Speaker 6: It's good to have you here. I mean we have
Speaker 6: talked with you over the years. Different market cycles. How
Speaker 6: are you thinking about twenty twenty five and what will
Speaker 6: be really kind of the big catalysts of the year.
Speaker 6: Is it, as we talked earlier with our own Sam
Speaker 6: Potter and Shnelli Bossik, is it all about the upcoming
Speaker 6: new Trump administration and what kind of policies we get.
Speaker 12: Well, if you listen to Jason Furman, which I reached
Speaker 12: out to, or Ian Brimmer, who I reached out to also,
Speaker 12: they would say, yeah, it would be economics, the Trump
Speaker 12: administration taris, what does it mean, what are the consequences,
Speaker 12: et cetera. Now, if you, on the other hand, talk
Speaker 12: to somewhat of that I call nostril Domis because he
Speaker 12: tries to sniff out the future as opposed to the
Speaker 12: Nostradamis and not being Sam Stowell, he will tell you
Speaker 12: that right now today is not a particularly positive sign
Speaker 12: from a market historical perspective.
Speaker 2: Why is today not a positive sign?
Speaker 12: Because when you make a lower low in January lower
Speaker 12: than you did at the low point in December, then
Speaker 12: many more times than not, the year ahead turns out
Speaker 12: to be a negative year.
Speaker 2: Are you speaking like a market technician or like a CFA.
Speaker 12: No, No, not to c if a time.
Speaker 2: Okay, I'm just wondering.
Speaker 5: First day. It's only the first day of January. I'm sorry,
Speaker 5: it's only the first day of January.
Speaker 12: That's right. But if you go strictly by what he says,
Speaker 12: historical information says that when you make a lower low
Speaker 12: in the first quarter, and it just happens to be
Speaker 12: that today's the first day of the first quarter, well
Speaker 12: then you end up in a period where the probabilities are.
Speaker 5: So it doesn't matter when it happens.
Speaker 6: Remember, even if we get a rally in the next
Speaker 6: two or three weeks, your point is that we made
Speaker 6: this low today.
Speaker 12: You made the lower low today, and the probabilities are
Speaker 12: that you're going to have a down year for the year,
Speaker 12: or certainly if you an up year, the year is
Speaker 12: going to be modest. So that's the historical information. Now,
Speaker 12: when you add to that certain other market technical issues
Speaker 12: that you referenced him, then yeah, you've got some aspects
Speaker 12: there that are problematic and concerning. And then when you
Speaker 12: answered it the other historical aspect, which is the business
Speaker 12: of two years up in a row of twenty plus
Speaker 12: percent gains, you generally don't get a third year and
Speaker 12: the only time that happened when you had the third
Speaker 12: year was during I believe it was the Clinton administration
Speaker 12: and was a presidential election year, which this is not.
Speaker 2: So is the message be cautious this year? What's the
Speaker 2: message that you.
Speaker 12: Are I would say the thing to do in addition
Speaker 12: to you know, know yourself and plans and make sure
Speaker 12: risk tolerance et cetera are correct, is to have a
Speaker 12: more cautious approach at the beginning of the year. Make
Speaker 12: sure that you're investing on a long term basis for
Speaker 12: whatever your parameters are within your risk parameters, et cetera. Okay,
Speaker 12: but also be where were the fact that you're you're
Speaker 12: not a salmon, you know, swimming upstream. So it can
Speaker 12: be a bit of an issue this year, and you know,
Speaker 12: I'd be looking to maybe rotate to different areas where
Speaker 12: you might be a little bit more cautious.
Speaker 5: So fundamental trade or historical trade.
Speaker 12: Historical trade is part of it. Then you have also
Speaker 12: the market technical aspect of it from a momentum point
Speaker 12: of view, which is positive long term, negative near term
Speaker 12: and the positive long term contained negative in a short
Speaker 12: period of time. So you've got that weighing against the market.
Speaker 12: So it's not one thing. It's not one factor, but
Speaker 12: the historical element, first year of a president's term, et cetera,
Speaker 12: all of those things. When you put that all into
Speaker 12: the mix and a stretch market valuation that we have right,
Speaker 12: you know, it's hard to make. It's hard to make
Speaker 12: a really compelling bullish case seting.
Speaker 6: One of the things we've been calling out in a
Speaker 6: big way on this first trading day of twenty twenty
Speaker 6: five is earnings coming up right a couple of weeks away,
Speaker 6: and we get JP Morgan and then we'll be into
Speaker 6: another earning season. If fundamentally those companies come out and
Speaker 6: they do well top and bottom line, they're upbeat about
Speaker 6: the outlook, does.
Speaker 5: That change things.
Speaker 12: The only way that would change is if you believe
Speaker 12: that price earnings ratios really, really, really matter. And I'm
Speaker 12: not one that thinks it does, because PE ratios are
Speaker 12: they're like a rubber band. Okay, evaluation is like a
Speaker 12: rubber band, and it can stretch and stretch and stretch.
Speaker 12: John Maynard kaines markets can remain irrational longer than you
Speaker 12: can remain solving. So there are you know, I look
Speaker 12: at fundamentals as a reference point I look at fundamentals
Speaker 12: as the narrative that ties into the strategy that you
Speaker 12: want to employ. So I look at it. It's kind
Speaker 12: of a bit of a different approach. I'm looking at
Speaker 12: it from the fundamentals and what does it mean to
Speaker 12: the narrative, because this is investing a beauty contest. It's
Speaker 12: not what I think, it's not what anybody thinks. It's
Speaker 12: what the market thinks. And if the market thinks based
Speaker 12: on you know, certain indicators that you're looking at, and
Speaker 12: valuation is not going to help you in this regard,
Speaker 12: then you know, you'd have to say that it's it's concerning.
Speaker 2: So our stock's expensive right now?
Speaker 12: Oh yeah, I think by you know, pretty much most
Speaker 12: measures see I face stuff. Yeah they are, you know,
Speaker 12: pe ratio is a stretch.
Speaker 4: Should we care those?
Speaker 12: Uh well, if yes, you should care all right, because
Speaker 12: ultimately earnings are going to matter and so and the
Speaker 12: quality of earning is going to matter. That's another dynamic.
Speaker 12: I mean, we talk about earnings. You mentioned, you know, Okay,
Speaker 12: good earnings come up, but what about the quality of them?
Speaker 12: And then you've got to be looking down the road.
Speaker 12: You've got to be looking you know, six months nine
Speaker 12: months down the road, and if you're a long term investor,
Speaker 12: you basically kind of ignore a lot of this stuff
Speaker 12: and find the ones that you might be most interested in. Like,
Speaker 12: for example, if you believe that the energy demand is
Speaker 12: going to be really strong, then if you have the
Speaker 12: downmarket for a period of time, that presents a terrific
Speaker 12: opportunity for you to position yourself in the areas that
Speaker 12: you want to be.
Speaker 6: Back to the Trump administration, I mean, if we have
Speaker 6: tax cuts, if we have I don't know, easier regulations.
Speaker 6: I'm just thinking about things that could give kind of
Speaker 6: some juice to the liquidity equation and then give some
Speaker 6: more momentum to the markets. Is that expected or that
Speaker 6: even that to what you're saying, If you cross it
Speaker 6: with fundamentals or technicals, it still isn't going to matter.
Speaker 12: You know, when it comes down to Carol, it's no
Speaker 12: one thing. It never is. We'd like it to condense
Speaker 12: it down to like a pe ratio or things that
Speaker 12: that's it, but it isn't. It's multiple things, and multiple
Speaker 12: levels and many different things.
Speaker 6: Multiple things at this point are against any kind of
Speaker 6: momentum continuing.
Speaker 5: That's that's kind.
Speaker 12: Of your mind.
Speaker 4: That's correct.
Speaker 12: When you when you add up the historical aspect, when
Speaker 12: you take a look at stretched earnings, when you look
Speaker 12: at the momentum grinding down market action, you know, price
Speaker 12: over pe ratios, things of that sort, excuse me, price
Speaker 12: over moving averages. That when you when you take all
Speaker 12: of those things into consideration, you know you're you got
Speaker 12: to lean more towards a cautionary approach to things that cash.
Speaker 5: I'm sorry, match us.
Speaker 12: Your podcast is not a bad place.
Speaker 5: Actually treasuries at this point, right.
Speaker 12: Treasure Well, yeah, treasuries, except for the fact that you know,
Speaker 12: I know one individual and I recommended him that he
Speaker 12: continued to do his laddering approach, you know, three months,
Speaker 12: six months, nine months, a year or two, that kind
Speaker 12: of thing, and scale it out there, all.
Speaker 5: Right, can leave it there. Happy New Year.
Speaker 6: Nice to hep you again.
Speaker 4: Great to see you.
Speaker 6: Finny catalanour chief market strategist over at Stuvest and Capital Management,
Speaker 6: joinining us right here in our interactive Brokers studio.
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