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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller. Every business day we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast

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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast. Well, first it was

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Speaker 1: Ali Baba, Jack Mars Ali Baba and his aunti financial

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Speaker 1: Chinese regulators blocking that I p O, sending shivers through

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Speaker 1: the big Chinese technology sector. Then d D China's crackdown

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Speaker 1: on the ride hailing service UM just days after d

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Speaker 1: D went public again in the US, really sending again

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Speaker 1: chills through the entire tech sector, particularly those Chinese domacile

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Speaker 1: companies that are listed in the West. And people are

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Speaker 1: really trying to get a sense of what is behind

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Speaker 1: the Chinese government and their crackdown seemingly on these companies. Yeah, absolutely, um,

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Speaker 1: you know, really getting you know, list in the West.

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Speaker 1: So we have questions about anything China, we go to

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Speaker 1: Leland Miller. He's the CEO of China Beach Book International.

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Speaker 1: Leland Again, at first I thought it was just Jack

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Speaker 1: mob mismanaging or misreading his relationship with the Chinese regulators.

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Speaker 1: But it seems to be something much broader than that.

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Speaker 1: What's going on. Well, that's the interesting thing about this issue.

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Speaker 1: You've got a whole bunch of different sub jobs playing

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Speaker 1: out across the Chinese text fhere and and the listing

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Speaker 1: the listing universe. We have jack ma and and financial

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Speaker 1: and you've got all these stories that's developing on DED

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Speaker 1: and how they ignored regulators. I think the broader story

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Speaker 1: here is that China is really forcing a paradigm shift.

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Speaker 1: There's a lot of worry that these these firms are

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Speaker 1: going to go list abroad and they're going to be

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Speaker 1: subject to US rules or foreign rules, and they're not

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Speaker 1: going to be safeguarding their data which should be in

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Speaker 1: China and subject to Chinese rules. So what what Beijing

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Speaker 1: is doing right now is in four seeing Beijing's view

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Speaker 1: on this this these data are are these are Chinese companies,

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Speaker 1: this will be Chinese data, this will be stored in China,

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Speaker 1: and uh, I think this is this is finally the

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Speaker 1: lesson that that foreign investors need to hear in terms

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Speaker 1: of realizing that what the Chinese government has been saying

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Speaker 1: it's real, they mean what they're saying, and that they're

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Speaker 1: real long term implications here. Yeah, to me, it makes

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Speaker 1: perfect sense. I mean, if I were China, I feel

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Speaker 1: like I would do it too. If I were the US,

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Speaker 1: I would wonder what what to do about this. UM.

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Speaker 1: We had a great Bloomberg story overnight that UM showed

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Speaker 1: somebody has been circulating a couple of charts illustrating traffic

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Speaker 1: at the Ministry of Public Security was really busy on

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Speaker 1: a certain day while UM the Anti Corruption Agency wasn't

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Speaker 1: using any cars. And it just flipped the switch for me.

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Speaker 1: You can use big data to really track some stuff

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Speaker 1: that gets that that that the country might want to

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Speaker 1: keep secret. You know, not just with DED but also

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Speaker 1: probably you can do the same with TikTok. You know

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Speaker 1: where all the teenagers are, what they're doing, you know

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Speaker 1: what they're buying what It just seems like you would

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Speaker 1: want to get a handle on this and not let

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Speaker 1: foreign investors access it, right And and you know, when

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Speaker 1: you're talking about big data, there are insights you can

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Speaker 1: glean from big data, and then there are ways to

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Speaker 1: use data to influence certain populations. That's of course what

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Speaker 1: we were talking about with TikTok the potential there for

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Speaker 1: them to send political messages subtenly or not through into

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Speaker 1: the into the Western environments. But yeah, look the risk

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Speaker 1: with big data are are just developing, and China is

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Speaker 1: very cognizant of what it doesn't want to be, uh,

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Speaker 1: you know, a face that doesn't want to be showing

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Speaker 1: the rest of the world. So so again, this this

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Speaker 1: is just a gigantic issue going forward. So Leland, you know,

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Speaker 1: we love to have you acause you help us really

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Speaker 1: see the big picture as it relates to US and

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Speaker 1: China relations as we pull back here and think about it.

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Speaker 1: Is this just, guess, another example of a building tech

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Speaker 1: cold war between the US and China. Yeah. Look, every

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Speaker 1: time anyone uses a term like that, there's a thousand

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Speaker 1: academics that rush in and say, no, no, look, it's

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Speaker 1: not a cold war. It's different than the last one,

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Speaker 1: you know, decoupling. There's not a real US China financial

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Speaker 1: decoupling and the broadest sense. But sure, I mean, look,

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Speaker 1: if you're if you're just trying to get an understanding

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Speaker 1: of directionality here, yes, you're seeing all these uh you know,

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Speaker 1: you're seeing this, this this this cold war esque environment

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Speaker 1: developed and you are seeing some elements of financial decoupling.

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Speaker 1: The US has an enormous amount of leverage, particularly because

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Speaker 1: Chinese companies like the list in the US, and it

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Speaker 1: has used that leverage, not not always and not enough,

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Speaker 1: you know, in the case of audits, for instance, but

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Speaker 1: it is used for for its compliance regime to be

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Speaker 1: the default. And what China is saying is no, our

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Speaker 1: companies will not be subject to that. They will be

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Speaker 1: subject to a Chinese compliance regime overall at the top layer.

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Speaker 1: And the problem with this is it's not entirely clear

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Speaker 1: that a lot of companies who who operate in China

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Speaker 1: and the United States and other places can actually adhere

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Speaker 1: to the law that is both Chinese law and the

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Speaker 1: U s law. Something has to give, and it's not

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Speaker 1: clear at all what that's going to be. You know,

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Speaker 1: this all happened right around the same time we saw

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Speaker 1: yield start to um drop in the US for six

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Speaker 1: days in a row, seven days in a row, eight

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Speaker 1: days in a row. And then Jim O'Neill was on

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Speaker 1: Bloomberg Television I think it was yesterday morning, telling Francine

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Speaker 1: Lacroix that um that China is really the catalyst for

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Speaker 1: the flight to safety, maybe not the data issue or

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Speaker 1: the d D issue specifically, but concerns about growth, concerns

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Speaker 1: about what's happening post one year anniversary, Um, what's going

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Speaker 1: on there? Do do we do? We do? We know

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Speaker 1: enough about Chinese growth and how strong it is the

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Speaker 1: recovery from COVID. Sure, we know a lot about it,

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Speaker 1: Chinese growth. And the problem is that not enough people

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Speaker 1: are listening and you know a lot about it. We

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Speaker 1: don't know. That's why we have you on. Well, you know,

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Speaker 1: look the the issues since China emerged, you know that

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Speaker 1: with with with quotations around emerged from from the coronavirus

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Speaker 1: uh and and and it's you know, into this very

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Speaker 1: impressive recovery was that Beijing announced this recovery as way

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Speaker 1: more intense than it actually was. They did a great job,

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Speaker 1: that did better anyone else. That's fine, but it was

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Speaker 1: never a soaring recovery. What they did is pull growth

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Speaker 1: forward from one and announced year and year growth and

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Speaker 1: basically signal that there is a return to normalcy because

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Speaker 1: the party conquered the virus. And what the real story

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Speaker 1: was is that yes, they got stimulus out there and

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Speaker 1: they did a good crackdown to to to take out outbreaks,

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Speaker 1: but there was never a durable recovery. On the consumption side,

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Speaker 1: services has been treading water. Retail has been doing very poorly.

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Speaker 1: Consumption more broadly has been doing very poorly, particularly in

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Speaker 1: the latest China Beja book data. Our credit data are

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Speaker 1: shockingly tight right now. You know, our our investment data down.

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Speaker 1: So yes, he were seeing some of these numbers early

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Speaker 1: on that suggested that, you know, China's back. China's not

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Speaker 1: back in the sense that it it's where it was before.

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Speaker 1: And now you're seeing people finally get the worries and

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Speaker 1: realize that, look, getting up factories up and running and

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Speaker 1: exports up and running is good, but I's not sustainable

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Speaker 1: if they can't get the consumption inside of the economy

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Speaker 1: back working again. This is why it's great to get

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Speaker 1: you on the program, Leland. We should have you on

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Speaker 1: more often because I think you know, for for a while,

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Speaker 1: markets kind of lost sight um the last few weeks,

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Speaker 1: the last few months of what was going on in China,

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Speaker 1: and then all of a sudden got wind of it,

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Speaker 1: and as a result, we saw a tenure yield um

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Speaker 1: in US treasuries at so Leland. Miller is the CEO

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Speaker 1: of China beige Book International, talking to us about the

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Speaker 1: big data, the control of big data, and UM the

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Speaker 1: growth situation post pandemic. We have been asking I've been

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Speaker 1: asking the same question for days and days and days.

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Speaker 1: And I know that we've seen things turn around a

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Speaker 1: little bit now, but Paul, treasuries are still very Yeah,

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Speaker 1: and in the ten year I mean, yes, it's a

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Speaker 1: bounce back from yesterday. We were down. What was the

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Speaker 1: lowest we hit? Like one was the body tick UM.

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Speaker 1: In any case, it's still a conundrum to me. Just heard, uh,

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Speaker 1: just heard Muhammad al Arian talk about it. Let's bring

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Speaker 1: in Jordan Jackson to ask him. He's vice president and

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Speaker 1: global market strategist for JP Morgan Asset Management. Jordan's you know,

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Speaker 1: I don't just ask these questions. I was up past

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Speaker 1: midnight reading people's theories online, not just you know, crazy

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Speaker 1: people on Reddit, but you know smart market technicians. I

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Speaker 1: still don't get it. It doesn't seem to jibe with

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Speaker 1: UM a view that the economy is strong and picking

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Speaker 1: up and we're going to see real growth for the

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Speaker 1: next couple of years. Yeah, it's it's I if anyone

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Speaker 1: tells says that they are absolutely a hundred percent accurate,

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Speaker 1: and why yields are where they are, I think, I

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Speaker 1: think that's a long shot. But I think there's a

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Speaker 1: confluence of things that are happening that are causing or

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Speaker 1: that have caused this this reversal in yields. And you know,

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Speaker 1: one is the supply side of the equation. If we

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Speaker 1: think about what's happened over pretty much the course of

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Speaker 1: the first half of the year, you've seen a significant

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Speaker 1: draw down in the Treasury General Account. So the Treasury

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Speaker 1: Department has not been funding additional fiscal stimulus by way

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Speaker 1: of issuing new treasury bonds. It's by way of drawing

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Speaker 1: down the Treasury General the Treasury General account. And what

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Speaker 1: that does is that increases bank reserves in the system,

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Speaker 1: just that mechanical aspect. And so what we actually have

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Speaker 1: seen is, you know, from from banks. You know, as

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Speaker 1: as reserves have increased in the banking system, that money

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Speaker 1: it's got to find itself somewhere. Typically it finds its

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Speaker 1: way at the front end of the curve. But what

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Speaker 1: we have been observing more recently is that those flows

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Speaker 1: have actually been making their way to the back end

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Speaker 1: of the curve as well. So there's there's this have

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Speaker 1: been some strong demand from banks as well as from

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Speaker 1: from foreign investors as well. I talked about how the

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Speaker 1: rolldown of the treasury general account at the same time

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Speaker 1: the FED is still purchasing eighty billion dollars a month

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Speaker 1: and treasuries. You've actually seen net negative supply of treasury

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Speaker 1: issuance come to the market as well. So you can

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Speaker 1: sort of paint yourself with supply and demand demand picture

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Speaker 1: in which you've got potentially demand outpacing pacing supply that's

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Speaker 1: put down with pressure and yield. I think there was

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Speaker 1: sort of a self fulfilling prophecy to the first half

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Speaker 1: of the first quarter of the year that yields were

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Speaker 1: going to rise in the back half. Growth is going

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Speaker 1: to be stronger in the second half of the year

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Speaker 1: than it was going to be in the first half

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Speaker 1: of the year. Until you have this this this this

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Speaker 1: broad market narrative of a Stephen and yield curve, and

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Speaker 1: I think folks were positioned as such um and so

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Speaker 1: you have some shorts come onto the market. I think

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Speaker 1: some of those shorts have to unwound themselves as yields

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Speaker 1: started to grind lower UM and so a lot of

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Speaker 1: these factors kind of funneling into the move lower from

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Speaker 1: a technical perspective, the move lower in bond yields. All right, George,

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Speaker 1: given where we are in the yield market, what are

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Speaker 1: you telling your clients in terms if they're looking for

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Speaker 1: a return here and they just gotta go the equity markets,

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Speaker 1: don't they? What are you hearing from your clients? That's

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Speaker 1: that's pretty much what what we're seeing. I mean, the

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Speaker 1: reality is the fixed income landscape. It's kind of like

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Speaker 1: trying to look for um, the cheapest house on a

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Speaker 1: really expensive block, um, and we're trying to generate output.

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Speaker 1: It's it's we don't want to trick ourselves into trying

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Speaker 1: to pick up pennies in front of a steam roller.

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Speaker 1: I mean, that's just where credit spreads are at um UM.

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Speaker 1: Given the impact of that, everyone searching for yield, there's

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Speaker 1: a lot of cash out there are not enough bonds

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Speaker 1: UM and so look, if you do have to sort

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Speaker 1: of start to look towards the equity market for for

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Speaker 1: for yields UM hedge type of strategies to sort of

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Speaker 1: mitigate some of some of the downside risk UM and

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Speaker 1: and even looking at some of the sort of hybrid securities,

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Speaker 1: may think preferredsum given bank stocks are the primary issuers

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Speaker 1: of preferred stocks. Uh C CAR results came out a

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Speaker 1: couple of weeks ago those where those are very encouraging.

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Speaker 1: We're going to get some reports coming through. From an

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Speaker 1: earnings perspective, we think bank balaciets are are very very strong,

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Speaker 1: so preferred preferred to look like they could be a

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Speaker 1: good spot for for income income as well. And then

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Speaker 1: on the convertible side, we do think some of the

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Speaker 1: more UM equity like convertibles or those things, they have

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Speaker 1: run up pretty significantly UM over over the past twelve

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Speaker 1: months or so. UM we still think there are some

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Speaker 1: some interesting opportunities in that space as well. Is UM

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Speaker 1: the US going to continue to outperform? Do you do

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Speaker 1: you start to put more of your bets on in,

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Speaker 1: for example, emerging markets as they start to well, as

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Speaker 1: they eventually will reopen and recover. So it's it's it's interesting.

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Speaker 1: It's kind of like, if I'm going to think about

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Speaker 1: global equity markets, where is the baton going to be passed?

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Speaker 1: Two next sort of started started to start the conversation

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Speaker 1: that folks generally thought that growth was going to be

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Speaker 1: particularly exceptional in the second half of the year. We

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Speaker 1: actually may be looking at peak growth in the second

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Speaker 1: quarter of this year, particularly here in the US. Now,

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Speaker 1: we still are expecting above trend growth in the second half,

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Speaker 1: but at certain deceleration from sort of a ten percent

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Speaker 1: quarter a quarter pace that we're expecting here in in

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Speaker 1: in the second quarter. Now, where does the baton get

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Speaker 1: passed too? I do think that the next sort of

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Speaker 1: of of of equity market, global equity market is going

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Speaker 1: to be sort of your Europe and Japan um, you know,

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Speaker 1: as they get over there their their COVID curves. Over

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Speaker 1: the next few months here you should start to see

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Speaker 1: some that cyclical trade, that reflation trade bring itself back

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Speaker 1: into the market. Hey, Jordan, thanks so much for joining us.

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Speaker 1: Really appreciated. Jordan Jackson, vice president, Global market Strategist at

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Speaker 1: JP Morgan Asset Manager. All Right, you've heard a venture capital,

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Speaker 1: You've heard maybe even a venture equity, but how about

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Speaker 1: venture debt. Dan divorcets CE IO and executive vice president

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Speaker 1: for Horizon Technology Fans. They're based in Brookfield, Connecticut. He

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Speaker 1: joins us. Dan, thanks so much for taking the time.

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Speaker 1: What is venture debt Matt and Paul, first of all,

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Speaker 1: thanks for having me pleasure to be here. Venture debt

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Speaker 1: is a non dilutive source of capital for these same

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Speaker 1: venture capital backed companies that you were referring to UM,

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Speaker 1: their development and growth stage companies that are backed by

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Speaker 1: really world class VC and P investors. And venture debt

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Speaker 1: is secured loans to these companies that provide non dilutive

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Speaker 1: capital to get them to their next valuation point and

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Speaker 1: raise additional equity at much higher evaluations. We provide UH

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Speaker 1: an option for for for equity. I think it's really

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Speaker 1: fascinating because Matt Levin just UM a couple of days ago,

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Speaker 1: was writing about how important vcs are not just as

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Speaker 1: a source of capital, but also as a source of advice.

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Speaker 1: You know, these young kids or I guess old people

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Speaker 1: could start companies to UM, you know, just get getting

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Speaker 1: into the into the market. They need to know how

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Speaker 1: before the I p O to a bunch of strangers,

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Speaker 1: right or before they sell debt to a bunch of strangers.

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Speaker 1: So I wonder how how much you not only loan

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Speaker 1: these companies money, but take them by the hand the

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Speaker 1: hand and lead them along. So we provide we've certainly

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Speaker 1: provided advice in terms of their financial path. We don't

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Speaker 1: claim we I'm not a technologist, I'm not a I'm

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Speaker 1: not a scientist, So I'm not going to tell them

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Speaker 1: how to how to do their clinical trials, but I

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Speaker 1: will certainly will certainly help them with advice on financing alternatives.

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Speaker 1: UM and and venture debt is one that that sometimes

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Speaker 1: sometimes entrepreneurs need need um education on that you can

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Speaker 1: you can raise equity and and uh sell off. You know,

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Speaker 1: Let's say let's say you're you're developing the next great

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Speaker 1: drug and your companies valued at a hundred million dollars

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Speaker 1: and it's gonna take thirty million dollars of new capital

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Speaker 1: to get to that next valuation point when you're when

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Speaker 1: you when you get approval, you can sell thirty million

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Speaker 1: dollars of equity and sell thirty percent of your of

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Speaker 1: your shares, or you can sell twenty million dollars of equity,

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Speaker 1: take a ten million dollar venture loan, and when you

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Speaker 1: hit that next valuation inflection point, you'll have preserved tens

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Speaker 1: of millions of dollars for your management team and your investors.

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Speaker 1: So we provide that certainly provide that type of advice

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Speaker 1: to our to our companies. All right, Dan, Back in

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Speaker 1: the day, I was a corporate finance banker at the

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Speaker 1: Chase Manhattan Bank. We lost deals to nobody back in

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Speaker 1: the day had swagger. But we lent against either assets

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Speaker 1: like property, plant, equipment, or inventory or cash flow, the

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Speaker 1: good stuff that actually pays you back. VC companies don't

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Speaker 1: have any of that stuff. So what's the collateral for

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Speaker 1: some of this debt? Cash? So I don't know what

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Speaker 1: cash flow is gonna We have cash flow, but it's

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Speaker 1: going it's going out of the company. Our companies are

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Speaker 1: cash burn companies. Uh So we are lending against the

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Speaker 1: enterprise value of the company. We take a senior secured

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Speaker 1: position in all assets of the of the company. Certainly

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Speaker 1: cash is a big piece of it. But but as

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Speaker 1: I said, that is draining. We are looking at the

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Speaker 1: intellectual property, we're looking at at the franchise value. We're

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Speaker 1: looking at growing exactly exactly. Yeah, but you never got

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Speaker 1: that kind of opportunity then, right, what kind of yield

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Speaker 1: we are we are lending so we have premium yields

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Speaker 1: in the in the loan terms, we get interest rates

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Speaker 1: as well as fees that are in the eleven. Then

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Speaker 1: we take small small exactly. Then we take small warrant

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Speaker 1: positions um in all of our companies, so as they

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Speaker 1: do succeed, we can we can get some capital appreciation

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Speaker 1: on the success stories. That's the trade off right there.

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Speaker 1: That's the look at the look at what the guy's

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Speaker 1: got who lent money to corectly on the wireless side.

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Speaker 1: I lost that. Can you repeat that? I apologize? No, No,

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Speaker 1: We're all good anyway, Dan, thanks so much for joining us.

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Speaker 1: We really appreciated. We're just at a time Dan divorcets,

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Speaker 1: uh from you know, giving us some thoughts here on

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Speaker 1: this Venture technology Horizon Technology Financi. Yeah, back in the day, um,

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Speaker 1: it was either you gotta have some assets and you

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Speaker 1: gotta have some cash flowmat of course, of course, but

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Speaker 1: you weren't getting thirteen Well maybe you were depending I

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Speaker 1: guess in the eighties that that was at the time

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Speaker 1: my parents were paying a mortgage. Um, all right, this

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Speaker 1: is Bloomberg. There's been a lot of talk about bitcoin

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Speaker 1: today on CNBC. Scott Miners said it's in a crash

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Speaker 1: right now and he sees no reason to own it. Um,

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Speaker 1: And our next guest says, it is an ecological disaster.

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Speaker 1: James ross A joins a c i O and founding

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Speaker 1: partner at Coast Capital. UM. So, James, your take on this,

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Speaker 1: I mean it's from the mining point of view, a

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Speaker 1: very dirty business. UM. And but you also think that

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Speaker 1: gold is a much cleaner alternative. UM. I think cleaner

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Speaker 1: alternative is not nice to be with you. Cleaner alternative

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Speaker 1: is not Look, any human endeavor results in carbon emission

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Speaker 1: and an erosion in the environment if not offset property. Right,

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Speaker 1: So there's nothing you can do literally that doesn't have

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Speaker 1: an environmental impact, and that can be described as having

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Speaker 1: a negative environmental impact. The problem that we have with bitcoin,

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Speaker 1: and why we think the value is zero, although the

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Speaker 1: price maybe what it is, is that not only is

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Speaker 1: it an ecological disaster, I think it's a monetary disaster

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Speaker 1: and it is bound to fail. The reason why we

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Speaker 1: think bitcoin is bound to fail is because, well, first

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Speaker 1: of all, you can't it's very difficult to conduct transactions

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Speaker 1: with cryptocurrencies. And we were told by the bitcoin profits,

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Speaker 1: who you know, I must admit to sound a lot

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Speaker 1: less like profits and like um promoters of a product

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Speaker 1: that no one can has figured out how to use. UM.

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Speaker 1: You know, we were taught that it would become a

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Speaker 1: basically functiable with money, that it would become an monetary instrument,

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Speaker 1: and it has failed to do that. And then we

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Speaker 1: were told it's not gonna be money. It's too cumbersome

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Speaker 1: to use. It takes thirty minutes to expect payment from

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Speaker 1: a testla using bitcoin. But it's a store of value,

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Speaker 1: and it's going to appreciate, you know, at inflationary times,

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Speaker 1: which we certainly aren't. Now. If you look at concerns

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Speaker 1: about it, you can't deny that it's appreciated. I meant

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Speaker 1: it certainly has. But when you look at when inflation

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Speaker 1: began to make itself out, which was you know, three

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Speaker 1: or four months ago, Bitcoin has half since then it

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Speaker 1: was supposed to react, you're just looking at a very

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Speaker 1: short window though, I mean, you know, moment. Sure. Look,

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Speaker 1: time will tell where this thing ends. But here's one

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Speaker 1: thing that I think is difficult to argue against. Bitcoin

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Speaker 1: will be superseded by another cryptocurrency, or by a by

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Speaker 1: a by a more attractive one. That um does not

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Speaker 1: have some of the flaws that bitcoin has, and that

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Speaker 1: the ethereum, and in fact, it looks like a hysterium

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Speaker 1: itself will be unseated by another cryptocurrency that will not

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Speaker 1: have solved the short comings that eithereum has, and so

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Speaker 1: why would I commit my saving stupid coin. You know,

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Speaker 1: so I hear, I hear this argument. I think it's

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Speaker 1: it's a fair argument for sure. So James, I guess

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Speaker 1: you know I'm not in the in the big bitcoin believer, right.

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Speaker 1: I think you know, my colleague Matt has really been

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Speaker 1: covering it since the absolute beginning here. But my understanding

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Speaker 1: is it's a commodity, and it's a commodity with a

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Speaker 1: fixed supply and presumably ever increasing demand from more use cases.

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Speaker 1: For that argument suggests that's the we can go higher argument.

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Speaker 1: I mean, I think James has a great point that

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Speaker 1: we were told at the beginning um that it was

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Speaker 1: going to be fungible with any other currencies, and that

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Speaker 1: definitely didn't pan out. Now there are people saying that

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Speaker 1: they're working on the use cases and it can evolve,

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Speaker 1: but it's pretty big and cumbersome, that's true. Yeah, Well,

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Speaker 1: the commodity has value by definition. The one commodity that

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Speaker 1: people say may may or may not have value as gold, right,

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Speaker 1: And that's where we think actually investors should be investing into,

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Speaker 1: and by the way, gold miners are from our perspective,

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Speaker 1: the place to be on the fact that nobody is

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Speaker 1: interested in gold miners and that capitals scarce as can

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Speaker 1: be in this in this most profitable of industries. It's like,

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Speaker 1: is pretty laughable from my perspective. So what we've done

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Speaker 1: is we've put together an advisory board that's made up

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Speaker 1: of some of the beating geologists and mine engineers and

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Speaker 1: gold miners in the world to attract to identify the

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Speaker 1: most attractive opportunities in that space. That's what we're betting on.

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Speaker 1: That's where central banks, who know a lot more about

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Speaker 1: currency and monetary affairs than we do, are bending on.

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Speaker 1: I don't see anybody other than what you think are

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Speaker 1: the best gold miners out there right now, James, or

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Speaker 1: most of the Well, look, we're actually buying them as

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Speaker 1: we speak. We've launched the fund in October. First of all,

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Speaker 1: there's a number of them we think that we're we're

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Speaker 1: currently buying them, so we don't necessarily want to talk

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Speaker 1: them up and see. But I would say that Jaguar Mining,

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Speaker 1: for example, is a prime example of a company that

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Speaker 1: people aren't paying attention to second largest gold miner in Brazil,

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Speaker 1: training at you know, less than five times normalized cash flows,

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Speaker 1: a lot of attractive deposits that haven't even been explored yet.

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Speaker 1: Really good management team which we spent a lot of

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Speaker 1: time helping to appoint to the board of the company.

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Speaker 1: Really great board. Um has a lot of transformational events

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Speaker 1: ahead of it. What we really like about Jaguars it's

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Speaker 1: ideally place to consolidate the sector. And gold miners are

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Speaker 1: kind of like diamonds. The larger they are, the higher

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Speaker 1: the valuation, you know, and the p multiples that they get,

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Speaker 1: and so consolidating the sector is a very warning event.

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Speaker 1: One thing that an empoties I'm going on and on.

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Speaker 1: One thing we think is super interesting about gold miners

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Speaker 1: that people don't understand is that we're actually running out

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Speaker 1: of gold to produce. Ten years from now, we'll be

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Speaker 1: producing fifty percent less gold paranlem than we do today. Well,

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Speaker 1: it is a bit point argument, but guess what with gold,

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Speaker 1: I can actually see a lot of use for it.

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Speaker 1: There's using jewelry. It's the only stable source of value

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Speaker 1: that central bankers around the world and and people around

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Speaker 1: the world have agreed on as a source of UH savings,

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Speaker 1: as an invasion head for hundreds of years and for millennia,

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Speaker 1: and I think that will continue. Bitcoin, I am a

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Speaker 1: hundred percent confident will be served at best for I

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Speaker 1: think that look when that's what bitcoin thain. When I

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Speaker 1: started looking at it into bitcoin, I thought I have

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Speaker 1: problems with bitcoin, but blockchain actually is a really attractive

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Speaker 1: technology that has merits and uses. You will please have

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Speaker 1: to note that no big tech company has come out

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Speaker 1: with like revolutionary technology using blockchain, and we wrote a

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Speaker 1: people um the European investment banks sold bonds on the blockchain. James,

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Speaker 1: We're gonna have to continue this conversation later because we're

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Speaker 1: running out of time, but I think it's very fascinating.

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Speaker 1: Love hearing your perspective. James ross Day is the chief

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Speaker 1: investment officer and founding partner of Coast Capital. Thanks for

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00:25:00,400 --> 00:25:03,879
Speaker 1: listening to the Bloomberg Markets podcast. You can subscribe and

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00:25:03,960 --> 00:25:08,000
Speaker 1: listen to interviews of Apple Podcasts or whatever podcast platform

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00:25:08,080 --> 00:25:11,359
Speaker 1: you prefer. I'm Matt Miller. I'm on Twitter at Matt

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00:25:11,400 --> 00:25:14,919
Speaker 1: Miller three and on Fall Sweeney I'm on Twitter at

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Speaker 1: pt sweeney. Before the podcast, you can always catch us

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Speaker 1: worldwide at Bloomberg Radio,