Speaker 1: This is Bloomberg Business Wait inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: You know a I could bring Jerry back.
Speaker 3: I don't think it could. I don't have as much
Speaker 3: faith in AI as you do.
Speaker 2: Let's get to our guest, because we want to talk
Speaker 2: about some of the challenges seeing the music industry due
Speaker 2: to artificial intelligence with us again right here on Bloomberg
Speaker 2: Business Week, Michael Happy. He's president in CEO of Sound Exchange,
Speaker 2: and organization that essentially collects royalties for music creators. Right,
Speaker 2: I'm saying it right, Yeah, back in studio. I'm good
Speaker 2: to have you back with us.
Speaker 4: I'm pleasure to be here, always happy to come and
Speaker 4: chat with you about whatever issues are on your mind.
Speaker 2: Well, there's a lot of issues that my therapist has worked.
Speaker 3: You don't want to get into her mind exactly.
Speaker 2: Having said that, AI talked to us about your members
Speaker 2: or the folks that you work with. Are they a
Speaker 2: little nervous about the rise of AI?
Speaker 4: So, look is a very interesting, uh topic in the
Speaker 4: music industr right now. There's there's you know, there's certainly
Speaker 4: concerns about it, but there's a lot of opportunities as well,
Speaker 4: you know. On on the one hand, you know, when
Speaker 4: you think about the issues that AI brings, I typically
Speaker 4: put them into three buckets, legal, cultural, and financial. On
Speaker 4: the legal front, there's obviously there you know, there are
Speaker 4: a lot of copyright issues about what is AI allowed
Speaker 4: to scrape? Can you go and scrape copyrighted contents? You know,
Speaker 4: for instance, all of those very excellent you know databases
Speaker 4: out there that you guys supply is AI allowed to
Speaker 4: scrape copyrighted things? When AI creates a product, is it copyrighted?
Speaker 4: These are all some questions that are that are being engaged.
Speaker 4: Although we think copyright law pretty much protects creators the
Speaker 4: way they need to. But you know what people don't
Speaker 4: talk about as much. And thank you for bringing up
Speaker 4: Drake in the weekend. It isn't just about copyright law.
Speaker 4: It is just it's equally about artists rights, creators rights.
Speaker 4: You know what we call name, image and likeness, the
Speaker 4: thing that bothers.
Speaker 2: They took their sound, right.
Speaker 4: They took their sound. But you know, what you're also
Speaker 4: doing when you imitate an artist with with fully you know,
Speaker 4: creative age talk and a.
Speaker 2: Bar singing karaoke.
Speaker 4: Excuse me, you know you're basically marketing on the you know,
Speaker 4: the brand and the image that Drake and the weekend,
Speaker 4: and that's just not right in any in any scenario.
Speaker 2: Agreed, Agreed. Right, it's a brand, it's it's a branding.
Speaker 4: But it's it's not just about the legal party. You
Speaker 4: know what, what what would I think the music industry
Speaker 4: wants everybody to be aware of, is there's this cultural
Speaker 4: component as well. You know, there's something about human artistry
Speaker 4: that we're actually part of a coalition called the Human
Speaker 4: Artistry Campaign dot com and uh you know it talks
Speaker 4: about as an industry, not just music, but all the
Speaker 4: creative industry. It talks about. Look. AI is a really
Speaker 4: cool tool. We should talk about the benefits that it
Speaker 4: brings to the music industry elsewhere. But let's not forget
Speaker 4: the human element. Let's not forget the value that human
Speaker 4: artistry brings.
Speaker 3: I think that's irreplaceable. Also, Michael, I mean to be fair,
Speaker 3: uh AI could be really helpful in the studio if
Speaker 3: you're a guitarist like a singer songwriter, and you want
Speaker 3: a certain drum beat, you can probably much more easily
Speaker 3: now get AI to create that for you with whatever
Speaker 3: time signature you want, and you know, whatever drum kit
Speaker 3: you wanted to sound like. But you're not gonna be
Speaker 3: able to write the kind of hit that resonates with people,
Speaker 3: you know, for generations with a software program right now.
Speaker 4: So you are absolutely right on uh, And it reminds
Speaker 4: I disagree.
Speaker 2: I think you could. You're going to be able to
Speaker 2: use AI to write songs.
Speaker 3: Yes, you can use AI and write songs, but you're
Speaker 3: not gonna be able to churn out a Stairway to Heaven.
Speaker 3: You know, you're not gonna be able to do a
Speaker 3: Great Eagles Greatest Hits Volume two. You're not going to
Speaker 3: be able to get in a lot of more as set.
Speaker 3: You know, something that sells millions of copies and speaks
Speaker 3: to people in their hearts for for twenty thirty forty years.
Speaker 3: A jingle, yes, a commercial, okay, but you're not gonna
Speaker 3: be able to really move people times software program. I've
Speaker 3: got two responds to that. First of all, AI is
Speaker 3: actually not that new.
Speaker 4: What's new? It was, you know, completely generative AI. But
Speaker 4: AI has been around in the music industry and elsewhere
Speaker 4: for decades. Brian Eno back in nineteen ninety six, not
Speaker 4: to date myself, you know, talked about he actually put
Speaker 4: out an album and talked about AI music. And it's
Speaker 4: been as you said, drum kits, synthesizers, you know, voice modulation.
Speaker 4: So it's been around for a long time. What's the
Speaker 4: game changers? Predictive? But to your point about not being
Speaker 4: able to replace it, I'm reminded. I was in an
Speaker 4: industry event just two days ago, uh here in in
Speaker 4: in New York and Joe Walsh speaking of the Eagles.
Speaker 3: Genius Joe Walsh, I saw h giving an award.
Speaker 2: And big time love of Stevie NICKX by the way, Yes.
Speaker 4: Well who doesn't I know? And he had a great
Speaker 4: quote that stuck with me. He's talked about AI briefly
Speaker 4: when he was giving this award, and he said, look,
Speaker 4: you know, we're all being told that the future is AI,
Speaker 4: and pretty soon hits are going to be shot from
Speaker 4: these you know, digital canons at the speed of sound,
Speaker 4: and we're all going to become obsolete. Needless to say,
Speaker 4: Joe Walsh. Walsh thought that was a lot of bs,
Speaker 4: and he had a quote that I will never forget.
Speaker 4: He said, he said all of that. He said, you
Speaker 4: know what, you can't program the gift of a songwriter
Speaker 4: or the soul of an artist.
Speaker 3: I agree one hundred percent. And that is exactly the
Speaker 3: thing about Midnight in Harlem. I, Carol, you know Susan
Speaker 3: Tadashi and Derek Trucks, they have such a unique sound
Speaker 3: and the way they work as artists and the way
Speaker 3: they work together, that just I don't believe that a
Speaker 3: computer program, whether it's generative or not, can replace that.
Speaker 5: Now.
Speaker 2: I guess what I'm saying is that they could maybe
Speaker 2: create a song. I'm not necessarily saying like that what
Speaker 2: you get in a live element or you know, performers
Speaker 2: singing together, like there's something that's magical. But I do
Speaker 2: think you could use AI easily, machine learning generative AI
Speaker 2: to help fill out a song about lyrics.
Speaker 4: Absolutely, And actually, Carol, that's a great point AI. A
Speaker 4: lot of the industry also sees, all of the industry
Speaker 4: sees the upside of AI. Let me tell you some
Speaker 4: of the pops.
Speaker 2: I want AI, right, Matt, we want AI?
Speaker 6: You do?
Speaker 3: I want a job there? So many use cases. I
Speaker 3: think it would help, but I don't think it's.
Speaker 4: Gonna you know, you know what I want? I want
Speaker 4: a I like it. You know, the new Indiana Jones
Speaker 4: movie that is coming out. The first segment of that
Speaker 4: of that film, they have taken the practically unlimited tapes
Speaker 4: and videos from earlier Indiana Jones and they de aged
Speaker 4: him Indiana Jones. Yeah, not Sean Harrison. That's what I want.
Speaker 4: In fact, in fact, if you're putting this on on
Speaker 4: on webcasts, can you do that to me before past production? That?
Speaker 4: Because but there's other things a I can do.
Speaker 2: John Lennon, you know, AI Paul McCartney talking about it
Speaker 2: and being able to extricate, you know, some of his
Speaker 2: voice from a demo about two years before he died
Speaker 2: in nineteen.
Speaker 4: Eighty Music Resurrection. They they think, for those of you
Speaker 4: who don't know, I mean, they're pulling out from a
Speaker 4: demo tape. Uh and and they're going to release the
Speaker 4: Beatles last record. They haven't said, no one is. They
Speaker 4: haven't officially said what the title of the of the
Speaker 4: record is, but a lot of them are predicting John, Well,
Speaker 4: it's done with John Lennon's permission. It's done with it's done,
Speaker 4: you know, with his estate's permission, and.
Speaker 2: You got to run. We got to run. Thank you
Speaker 2: so much. Have a great weekend, Come back so much.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 2: All right, Well, anyway, there's definitely been carnage in a
Speaker 2: crypto space, so let's get to it, and certainly the
Speaker 2: most recent when it comes to the SEC suits against
Speaker 2: both coinbase and Finance. Corey Clipston is CEO at the
Speaker 2: crypto trading app Swan Bitcoin. Back with us on zoom
Speaker 2: in La. Corey, good to check in with you again.
Speaker 2: There certainly has been quite the clamp down here in
Speaker 2: the United States. What do you make of the SEC suits?
Speaker 7: Yeah, Hi, Carolyn, Matt, It's great to be back. Yeah.
Speaker 8: It is a pretty fascinating time, isn't it. This is
Speaker 8: kind of what a lot of folks in the bitcoin space,
Speaker 8: meaning bitcoin, none of the alt coins, have been predicting
Speaker 8: was going to happen, and for many years frankly, going
Speaker 8: back to I think it was February twenty eighteen that
Speaker 8: Ja Clayton started to make it very clear that his position,
Speaker 8: in the SEC's position even that far back, was that
Speaker 8: you know, pretty much everything other than Bitcoin was going
Speaker 8: to be a security, other than maybe some of these
Speaker 8: smaller proof of work coins that don't really have much
Speaker 8: market cap would probably be considered commodities as well. And
Speaker 8: I think we've seen that pretty consistently broadcast from Ginsler's
Speaker 8: SEC over the last couple of years. And you know,
Speaker 8: you can do all of the legal screening that you
Speaker 8: want with your own internal lawyers if you're a crypto
Speaker 8: casino or a crypto exchange, but at the end of
Speaker 8: the day, that doesn't make law. And so the laws
Speaker 8: on the books basically say these things are securities, and
Speaker 8: they'll probably have to get laws changed by Congress if
Speaker 8: they want to operate these you know, sort of crypto equities.
Speaker 3: And exactly, I mean, fighting the SEC is not usually
Speaker 3: a winning strategy. Maybe it's better to appeal to the
Speaker 3: people and try and get things change at a congressional level.
Speaker 3: Looks like that's what coinbase, for example, is doing. Corey,
Speaker 3: is it our proof of steak tokens or proof of
Speaker 3: steak blockchains more likely to be securities than proof of
Speaker 3: work blockchains.
Speaker 7: Yeah, I think that's pretty much inevitable.
Speaker 8: I think that it's, you know, one of these things
Speaker 8: where they say, like, if it walks like a duck
Speaker 8: and talks like a duck, acts like a duck, it's
Speaker 8: probably a duck. And that's interest, right, So I think
Speaker 8: that's we also have not seen any proof of steak
Speaker 8: project remotely approached decentralization. You know, the Ethereum roadmap is
Speaker 8: still completely controlled by Metallic The whole.
Speaker 7: Ecosystem is marketed.
Speaker 8: By kind of an Ethereum industrial complex of consensus, Ethereum Foundation,
Speaker 8: coin based Circle, and Drayson Horowitz Paradigm, few venture funds,
Speaker 8: so they can say all they want and try to
Speaker 8: get Ethereum to be the one centrally controlled crypto that
Speaker 8: gets a pass, and that's I think what their kicksave
Speaker 8: is to try to get through. But it doesn't have
Speaker 8: the benefit of being true, and so we'll see how
Speaker 8: that plays out.
Speaker 3: What for the I just love it, I mean, uh,
Speaker 3: I mean, I don't have an opinion officially, so I'm
Speaker 3: not saying I totally agree, but if I were, I'm
Speaker 3: certainly who had an opinion.
Speaker 2: First of all, you always have an opinion.
Speaker 3: I've never I've never found proof of steak to be
Speaker 3: wait to me, it doesn't fulfill the og you know,
Speaker 3: promise of crypto and it certainly doesn't feel decentralized at all.
Speaker 2: For those who aren't cool kids in the room, just
Speaker 2: talk a little bit about Corey if you will. A
Speaker 2: proof of steak versus proof of work, because it's it
Speaker 2: has to do without verification of crypto transactions.
Speaker 8: But why work means that you're expending energy to spare
Speaker 8: the network, and proof of steak means that you're just
Speaker 8: trusting humans to kind of coordinate together.
Speaker 7: And basically, the rich get richer. And if you have more,
Speaker 7: if you have.
Speaker 8: More ethereum or more cardano or more solana, then you
Speaker 8: get more. And that's basically that fundamentally leads towards centralization.
Speaker 8: The second derivative of that is more and more centralization,
Speaker 8: regardless of where your starting point is, and it basically
Speaker 8: just means that humans are still running it, and humans
Speaker 8: change the monetary policy, as we've seen throughout the history
Speaker 8: of ethereum. For instance, the monetary policy is just changeable.
Speaker 7: At a whim.
Speaker 8: According to the directives of Joe Lubin at Consensus and
Speaker 8: Vitallic Beeter and at the Ethereum Foundation.
Speaker 3: Tell us about swan and how consumers can use it,
Speaker 3: can interact with your company, and then who custodies the bitcoin.
Speaker 8: Yeah, so we are a pretty diversified bitcoin financial services firm.
Speaker 8: So at present, we offer brokerage, we offer the swan IRA,
Speaker 8: we offer private client services through Swanprivate dot com, and
Speaker 8: then we have a whole wealth division that works with
Speaker 8: financial advisors and ras and helps them get bitcoin into
Speaker 8: their client portfolios. Later this year, will be launching Swan Custody.
Speaker 8: We purchased a company called Specter last year, which is
Speaker 8: one of the top multi sig custodian softwares out there.
Speaker 8: It's free, open source software and that team has been
Speaker 8: building on top of their protocol to build Swan Custody.
Speaker 8: And then we're also launching asset back Loans. Should be
Speaker 8: in market with Asset back Loans this summer, and we
Speaker 8: think with those services you basically fulfill essentially all of
Speaker 8: the needs. Are most of the needs that anyone who
Speaker 8: was into bitcoin and thinking about it for their business
Speaker 8: or for their portfolio or their family would need to
Speaker 8: sort of check those.
Speaker 7: Boxes to have a relationship.
Speaker 8: And I think the key to our success so far
Speaker 8: has been that we just have a lot of the
Speaker 8: top experts in the world on bitcoin and on financial
Speaker 8: services at the intersection. Like our senior team and all
Speaker 8: of our salespeople come from you know, Goldman, Bridgewater, Morgan Stanley,
Speaker 8: Deutsche Bank, these different places, but our longtime bitcoiners as well,
Speaker 8: and they kind of speak both languages, and that really
Speaker 8: helps us translate what's going on for people.
Speaker 2: Corey, you sound like it's full speed ahead. What was
Speaker 2: the impact though, of those sec suits against coinbas and
Speaker 2: finance what kind of either slow down or just maybe
Speaker 2: pull back a little bit that you see or even
Speaker 2: a lot as a result of that.
Speaker 8: Yeah, I mean, I mean for us, this was like
Speaker 8: the ocean's parting in front of us and saying, oh
Speaker 8: my gosh, there's you know, three years of open field
Speaker 8: running at least for bitcoin financial services. And so we
Speaker 8: immediately greenlit tripling the sales team, and I greenlit a
Speaker 8: fifteen X and ad spend last week. So we're going
Speaker 8: really really hard after this. We think this is the
Speaker 8: moment to tell the truth without a lot of distraction
Speaker 8: from the what i'd say the orange washing affinity marketers
Speaker 8: on the crypto side of the fence.
Speaker 7: And so I think this is.
Speaker 8: This is salad days for those people that thought bitcoin
Speaker 8: was the thing that really really matters, which you know,
Speaker 8: again happens to be true.
Speaker 3: And do you expect all of these other business is
Speaker 3: to be pushed offshore? I mean, in the case of coinbase,
Speaker 3: it looks like Brian Armstrong wants to stand and fight,
Speaker 3: but everyone else seems to be heading for the hills
Speaker 3: in Europe or Asia.
Speaker 8: Yeah, I mean, I think the payoff is so massive
Speaker 8: if they're somehow able to get some kind of accommodation
Speaker 8: or you know again you know, try to fight something
Speaker 8: through Congress or whatever. Don't think they'll succeed with that again,
Speaker 8: just because when when people that take laws in markets
Speaker 8: very seriously look at it, they'll kind of spot the
Speaker 8: hypocrisy of you know, regulate me specially, but not the
Speaker 8: other guys, not the penny stock operators, not the multi
Speaker 8: level marketers and the Ponzi schemers. They only want sort
Speaker 8: of new regulations for their little corner of broad and chicanery, and.
Speaker 7: I don't think they'll get away with it.
Speaker 8: Yeah, I'm not pro regulation, but I am anti scam
Speaker 8: and I'm definitely anti hypocrisy. So again, if you want
Speaker 8: to open up the floodgates and let all these things through,
Speaker 8: then I think you have to look at basically every
Speaker 8: corner of the market, and you know, you'll probably have
Speaker 8: to see a dramatic reduction in the scope of regulation
Speaker 8: across the board because there's so many people across trad
Speaker 8: Fire that would like a light touch in their little
Speaker 8: area that's their pet project too.
Speaker 3: I do think we have to jump in and point
Speaker 3: out that these SEC suits have made allegations correct, and
Speaker 3: those brought by the CFTC as well, but no one
Speaker 3: has been proven guilty yet, so we can't use words
Speaker 3: like fraud or shit canery. Those lead to real problems.
Speaker 2: Yeah, time will tell Ultimately, listen though, really great to
Speaker 2: get your opinion because you are certainly in the think
Speaker 2: of it. Corey Clipston. He's chief executive officer at Swan Bitcoin.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 1: Just Say Alexa playing Bloomberg eleven thirty.
Speaker 2: Really cool story on the Bloomberg. We've all been kind
Speaker 2: of yacking about it in the newsroom. The world's two
Speaker 2: richest individuals lunching together today in Paris. We're talking about
Speaker 2: Elon Musk and Bernard Arnault, the CEO controlling shareholder of
Speaker 2: LVMH Moett Moway, Mowett.
Speaker 3: Moway and Hennessy moy Hennessy, I don't know.
Speaker 2: I didn't take French anyway. Louis Vuitton, we know. I
Speaker 2: think he is the world's richest dude right at.
Speaker 3: This Bernard Arnau, I think he was jumped by Elon.
Speaker 3: So the type r H goo rich go and you'll see.
Speaker 3: Elon Musk is currently worth two hundred and twenty nine
Speaker 3: point four billion dollars and Bernard Arnault has a paltry
Speaker 3: one hundred ninety six point eight billion dollars.
Speaker 2: They are the world's two richest individuals. Which it started
Speaker 2: off with, okay, are NOO's sons were there? Elon Musk's
Speaker 2: mother may also took part. I gotta say. Elon has
Speaker 2: been everywhere, including meeting with auto execs, bringing them into
Speaker 2: the family via the Tesla charging station. So we knew
Speaker 2: we wanted to talk a little bit about Tesla, which
Speaker 2: has been on quite a run as well as the
Speaker 2: share price. Ros Gerber is back with US President CEO
Speaker 2: Gerber Kawasaki Wealth and investment management, owner of Tesla's investor
Speaker 2: in the stock, one time activist buhying for a Tesla board. See,
Speaker 2: he is all in when it comes to Tesla. He's
Speaker 2: on the phone from Santa Monica. Ross, how are you.
Speaker 5: I'm good, good to be back.
Speaker 2: It's kind of interesting.
Speaker 3: It's very interesting. I will also say as a longtime listener,
Speaker 3: So Ross, I'm just filling in for Tim Stenovek.
Speaker 2: Matt loves listening when you.
Speaker 3: I love it when you're on the program. So today
Speaker 3: when we were like, we need to talk about Tesla
Speaker 3: because it looks like it's kind of all coming together
Speaker 3: again for Elon Musk, I was like, man, we could
Speaker 3: get Ross Gerber on. That would be awesome. So I'm
Speaker 3: psyched to have you on the program. The Supercharger Network.
Speaker 3: I'm just so jazzed about this because it looks like
Speaker 3: he hit it out of the park, and he did
Speaker 3: something that consortiums of auto makers haven't been able to
Speaker 3: do and governments haven't been able to do. It just
Speaker 3: looks like a stroke of genius.
Speaker 5: Well, I mean, it's economics that really ultimately won the
Speaker 5: game here, because the economics of using the supercharger versus
Speaker 5: not using the supercharger system was so much better for
Speaker 5: four GM to just jump on this to help them
Speaker 5: sell cars. It really became a win win situation for
Speaker 5: both parties.
Speaker 8: And that was sort of.
Speaker 5: The depth how I say maneuvering that test was done
Speaker 5: over the last several years of building out the supercharger network,
Speaker 5: which ironically I had spent a lot of time working
Speaker 5: on in the last six months trying to really value
Speaker 5: this network. And now I'm like, wow, they just killed it,
Speaker 5: Like this is an amazing thing for a tesla.
Speaker 2: I think it's incredible on so many different levels that
Speaker 2: Elon went from I think people scratching their heads worried
Speaker 2: about his involvement in Twitter to you know, he's got
Speaker 2: somebody now who's going to be heading up Twitter. He's
Speaker 2: pulled forward and GM right into Twitter spaces to talk
Speaker 2: about their involvements he's given kind of credibility, if you will,
Speaker 2: and showing how Twitter spaces can be this incredible communications platform.
Speaker 2: To do something like that, I don't know, when you
Speaker 2: look at the big picture of Elon, like Matt said,
Speaker 2: just getting it all together or what.
Speaker 5: Yeah, sort of I think, you know, they're sort of
Speaker 5: like SpaceX and Tesla and Twitter. You can kind of
Speaker 5: say like, well they have like what would they all
Speaker 5: have in common? But then there's these like threads that
Speaker 5: connect everything, and you know, it's really interesting the way
Speaker 5: that things sort of work out. That he's now hired
Speaker 5: sort of the top people from NBC to run Twitter,
Speaker 5: you know, and then he's been able to refocus on Tesla,
Speaker 5: which is exactly what I was hoping would happen. And
Speaker 5: the minute he starts refocusing his efforts on Tesla, we've
Speaker 5: just seen a tremendous amount of progress in the business.
Speaker 5: So you know, now with all this, you know, deal
Speaker 5: making talk in France and boy, you know, I I
Speaker 5: my French contacts are basically saying, this looks like it's
Speaker 5: going to be a done deal and that that's huge.
Speaker 5: It's huge for France and Tasla.
Speaker 3: He was in Italy right before this, so he's met
Speaker 3: with i think the heads of government of at least
Speaker 3: two European nations, and of course he already has great
Speaker 3: relationships in Germany. It's it's pretty interesting though that even
Speaker 3: Twitter seems to be firing on all cylinders, if you'll
Speaker 3: excuse a horrible pun that doesn't make sense with EV's cross.
Speaker 3: I mean, you know, when when we had the first
Speaker 3: presidential announcement on Twitter, it seemed like it wasn't working
Speaker 3: very well. But now he brought Ford on. We all
Speaker 3: had to tune in for that. He brought GM on,
Speaker 3: we all had to tune out for that. He's turned
Speaker 3: Twitter spaces into the kind of the place to be
Speaker 3: right now, hasn't he?
Speaker 7: Ross?
Speaker 5: Yeah, Twitter space is an amazing place. I mean, this
Speaker 5: week on a Space and Walter Isaacson came on, and
Speaker 5: next thing you know, I'm talking to Walter Isaacson about
Speaker 5: the book he's releasing it on Elon and comparing him
Speaker 5: to Leo da Vinci and to Steve Jobs, and you know,
Speaker 5: it was just an incredible space and there were thousands
Speaker 5: of people on it, and Elon's technology skills has really
Speaker 5: made space is a really really great platform. I mean,
Speaker 5: you guys should consider jumping on and doing something on
Speaker 5: there too. Bloomberg should definitely be doing something on there.
Speaker 5: And so like the way I look at it is
Speaker 5: he's making the.
Speaker 2: Way, and we do do stuff there, just so you
Speaker 2: know we do actually yeah.
Speaker 5: Yeah, I know, I know, you guys do do spaces,
Speaker 5: and I just think for media organizations, for example, this
Speaker 5: is a great opportunity to extend your brand, you know,
Speaker 5: and then at the same respect as a platform. From
Speaker 5: the technology perspective, Elon's technology chops are like nobody else's
Speaker 5: and there's no question things like spaces have benefited greatly
Speaker 5: from these skills, where you can now have several hundred
Speaker 5: thousand people on a space at the same time. It's
Speaker 5: it's kind of incredible. So from that perspective, I think
Speaker 5: he's been very successful with Twitter. I think the part
Speaker 5: that's troubling is really how much time he's spending, you know,
Speaker 5: sort of expanding on his political ideologies and social ideologies,
Speaker 5: which I would say that a vast majority of people
Speaker 5: have issues with. So you know, when you sort of
Speaker 5: strip out the noise and all the politics, he's done
Speaker 5: a great job at Twitter. But when you look at
Speaker 5: the time he's spending on the platform. I don't know
Speaker 5: if that's always the best use of this time.
Speaker 3: So it's almost never the best use of your time
Speaker 3: when you're on Twitter, right, Why Carold doesn't get enough sleep?
Speaker 4: No?
Speaker 3: No, no, no no.
Speaker 2: Well, so we with his tripover, you know, in his
Speaker 2: meetings in Paris. I'm just wondering, so, is this a
Speaker 2: sign that increasingly Europe is going to become a bigger,
Speaker 2: bigger part of what he does and where he devotes
Speaker 2: his time and where he makes his investments.
Speaker 5: Well, there's there's that, But I think this is more
Speaker 5: Europe than Tesla, because you know, if you see what
Speaker 5: like the geopolitical situation in Europe and especially around energy
Speaker 5: and with all of a sudden having to sort of
Speaker 5: decarbonize from Russia in the course of let's say less
Speaker 5: than a year, you know, Europe's really now searching around
Speaker 5: and saying, how do we become energy independent real and
Speaker 5: how do we use technologies to advance sustainable transportation and energy?
Speaker 5: And since Tesla is the leader in this, we all
Speaker 5: should be talking. And now they see what's going on
Speaker 5: in Germany with the factory there and the success they're
Speaker 5: starting to have in Germany, and Europeans do love Tesla,
Speaker 5: So it makes a lot of sense for these countries
Speaker 5: to be courting Tesla to open up another gigafactory in
Speaker 5: Europe because a it's a very large you know, the
Speaker 5: EU is a huge block of EV buyers, and more
Speaker 5: people buy evs as a percentage of new cars in
Speaker 5: Europe and Asia than they do in the United States.
Speaker 5: So there's a lot of upside for Tesla to continue
Speaker 5: to expand in Europe finding a good partner. And you know,
Speaker 5: so I would say, like, you know, as a competitor
Speaker 5: to Germany, you know, it's kind of the game I
Speaker 5: think they're trying to play ross.
Speaker 3: I was, so, I'm test driving this AMG Mercedes this morning.
Speaker 3: I'm driving in five hundred and seventy seven horsepower, and
Speaker 3: I got absolutely dusted smoked by a Tesla Model S. Yeah,
Speaker 3: because they're so quick off the line, and it's also
Speaker 3: much later. But but I looked at it and I thought, man,
Speaker 3: it still looks kind of old. Now it's getting along
Speaker 3: in the tooth. Are they going to redesign their fleet
Speaker 3: at some point?
Speaker 5: Well, this is a great, you know question, and one
Speaker 5: I don't have a simple answer for because I agree
Speaker 5: one hundred percent, and Tesla has never really changed their
Speaker 5: designs that much from their original you know make and
Speaker 5: then you know, most car companies try to change their
Speaker 5: design somewhat almost every year to make you know, their
Speaker 5: brands fresh or or sort of spruce it up. So
Speaker 5: we are expecting something with the Model three and a
Speaker 5: spruce up there. But I think there's this has been
Speaker 5: kind of one of my issues, Like I think legitimately
Speaker 5: Tesla doesn't care about the high end car market. They're
Speaker 5: sort of seeding the Models and X to the Ribbans
Speaker 5: and the Lucids and the and the other high end
Speaker 5: ev makers, and they're sort of saying, our goal is
Speaker 5: to make cars cheaper and mass affordable than be sort
Speaker 5: of like a Ribban where we're only going to sell
Speaker 5: cars to rich people.
Speaker 2: Interesting. All right, Hey, Ross, thank you so much. Have
Speaker 2: a great weekend. Ross Gerber, President CEO Gerber Kawasaki Wealth
Speaker 2: and Investment Management, on the phone from Santa Monica, California.
Speaker 2: He made a joke about a secret to his drive.
Speaker 2: Elon Musk was Crystal Mack at the event here, but
Speaker 2: he said, I'm only joking the journal.
Speaker 3: Now about you let me drive?
Speaker 1: Oh no, no, no, no, who's.
Speaker 5: Alright?
Speaker 4: Please, I'll do the gravels.
Speaker 2: I want to try. It's a good question.
Speaker 1: Fifth time, this is the drive to the clothes we'll
Speaker 1: buy around on Bloomberg Radio.
Speaker 2: All right, everybody, we've got just about eighteen minutes left
Speaker 2: in today's trading session, getting ready to wrap up the
Speaker 2: Friday trade and the week overall. And we are definitely
Speaker 2: off our best levels. We are down across the board,
Speaker 2: just slightly down on a percentage basis, the most for
Speaker 2: the NaSTA gets down about half a percent. So let's
Speaker 2: see what Carol Schlife has to say. She's chief investment
Speaker 2: officer at Female Family Office. She's joining us on the
Speaker 2: on the zoom on zoom from Minneapolis. Carol, TG, I have.
Speaker 2: I am so glad. We're almost dying. How are you?
Speaker 6: How are you great? I am as well. It's been
Speaker 6: quite the week.
Speaker 2: Well, so help us out here. I mean, we do
Speaker 2: feel like we're taking a little bit of a breather
Speaker 2: fed meeting. You know, we've had you know, the S
Speaker 2: and P piercing forty four hundred. You know, we're all
Speaker 2: talking about a new bull market, not everybody's buying it.
Speaker 2: There's some disconnect between what Powell says and how the
Speaker 2: markets read it. So how do you read it and
Speaker 2: what do you tell some of your clients.
Speaker 6: We've remained in a balanced risk posture, if you will.
Speaker 6: All along, we were one of the early believers that
Speaker 6: the Fed was going to be able to stick us
Speaker 6: off landing. We've been saying that actually for close through
Speaker 6: a year and a half that we thought we had
Speaker 6: enough resiliency throughout this economy to be able to do it. So,
Speaker 6: you know, the interesting thing is is trying to coax
Speaker 6: those clients who might be overweighted in cash out of
Speaker 6: that comfy cash position and to looking at even stepping in,
Speaker 6: especially those that might have had liquid builds.
Speaker 3: Haven't they missed it?
Speaker 6: I don't know if they've necessarily missed it. It all
Speaker 6: depends on your perspective. If your perspective is between here
Speaker 6: and the end of the year, maybe they've missed a
Speaker 6: good upmove this year. But if your perspective is intermediate
Speaker 6: longer term, there's an awful lot tied up in this
Speaker 6: economy to be excited about. It's the first time in
Speaker 6: decades you could argue that we've really decided we were
Speaker 6: going to make substantial investments in infrastructure, and in some
Speaker 6: key industries we haven't done that, arguably since we've built
Speaker 6: out the interstates in the fifties.
Speaker 3: That's a very good point. You know, it's betting rafrastructure
Speaker 3: right now.
Speaker 4: The bigges short guy, exactly.
Speaker 6: And when you look at the percent yes, yes, you're right, sorry,
Speaker 6: And you look at the percentage representation that technology and
Speaker 6: communication services has in the S and P now versus
Speaker 6: where it was a number of decades ago. And then
Speaker 6: you look at where manufacturing and industrial have shrunk to.
Speaker 6: There's a lot of room for uptick in those and
Speaker 6: even small upticks. Take the few component companies in there
Speaker 6: and push them. So there's if you're if you're an
Speaker 6: intermediate or longer term investor, I think investing in some
Speaker 6: of those technologies makes some sense.
Speaker 3: On the other hand, Carol, rates are pretty high, and
Speaker 3: if you believe that the FED is going to achieve
Speaker 3: its goal right getting inflation back down to two percent,
Speaker 3: you can get five pretty much risk free. That's awesome, right.
Speaker 6: It's awesome in the short run. But if we do
Speaker 6: see the FED bringing the rates back down, the short
Speaker 6: rates eventually are going to come down and is the
Speaker 6: market going to have moved as so much that you
Speaker 6: choose not to get in. And it's hard because if
Speaker 6: you're doing investing right at the key points when you
Speaker 6: need to be trimming and when you need to be buying,
Speaker 6: it never feels comfortable. In fact, it almost always feels
Speaker 6: exceptionally uncomfortable if you're doing it right for the long run.
Speaker 6: So that's where when I mentioned a balanced approach, we're
Speaker 6: not saying so all of your cash. We're saying, if
Speaker 6: you're overweighted in cash or short term fixed income, considers
Speaker 6: some other alternatives out there, even broaden out the fixed income.
Speaker 6: And we are getting to a point where we're watching
Speaker 6: pretty carefully because you've seen yields move up and maybe
Speaker 6: extending out durations. We're not there yet, but we were
Speaker 6: watching a lot of things pretty carefully, but also trying
Speaker 6: to remain invested around the globe, although you know, North
Speaker 6: American progress, especially economically, is pretty superior relative to the
Speaker 6: rest of the globe.
Speaker 2: I just want to go back to Steve Eisman because
Speaker 2: he was a guest on the Bloomberg od Lots Right
Speaker 2: odd Lots podcast, and what's interesting is he talks specifically
Speaker 2: about the biggest story being the grid, and he just
Speaker 2: talks about the electrification of consumption. So EV's induction stoves
Speaker 2: putting strains on existing infrastructure and so you're going to
Speaker 2: have to have a ton of investment.
Speaker 3: As on the side, I will say evs are fantastic products,
Speaker 3: really amazing, but induction stove is the worst. I mean,
Speaker 3: if you don't have a gas grill, you're doing something wrong.
Speaker 2: I agree with you. I need a flame, Carol, qut.
Speaker 6: A flame, I do, honestly. And when we redid our
Speaker 6: house a couple of years ago, I have to cook
Speaker 6: over a guess stove. I'm sorry, but I do.
Speaker 2: I know I can't. I cannot work with like an
Speaker 2: electric stove.
Speaker 3: And we lived in Germany for the last six years
Speaker 3: and for some reason, it's all electric there. You know,
Speaker 3: a lot of the buildings just aren't hooked up to gas.
Speaker 3: And it's just it's a dream come true moving back here,
Speaker 3: mainly because of my gas range. It's the best thing
Speaker 3: about America.
Speaker 2: It doesn't love fire, right, So, Carol, where's the risk
Speaker 2: in this market?
Speaker 7: Though?
Speaker 6: Well, I think the risk is getting too long or
Speaker 6: too hyped. Up in one particular. It's over concentrating one
Speaker 6: place or another, and I think.
Speaker 2: Let me to be like big tech.
Speaker 6: Yeah, maybe big tech, although you know, we do think
Speaker 6: The interesting thing is is we do think the artificial
Speaker 6: intelligence things has legs longer term. But it's not necessarily
Speaker 6: investing specifically in it as much as it is making
Speaker 6: sure every company in your portfolio is paying attention to
Speaker 6: it and trying to figure out how they're going to adapt.
Speaker 2: So you think it's cool when like a Kroger talks AI,
Speaker 2: or like anybody talks AI, like they should be talking
Speaker 2: that because we kind of it.
Speaker 6: But they have to be on their front foot as
Speaker 6: it relates to it. They have to understand that, you know,
Speaker 6: what their strategy is going to be there. It's early
Speaker 6: and and folks are trying to understand too, is the
Speaker 6: government going to regulate, is it not going to regulate?
Speaker 6: How are we going to play it? But I just
Speaker 6: think being cognizant of it and not ignorant of it.
Speaker 6: And it's a lot like back in the dot com days,
Speaker 6: when you don't necessarily want someone just attaching dot com
Speaker 6: to their name and saying, oh, we're going to do
Speaker 6: that now, but you have they have to have an
Speaker 6: Internet strategy.
Speaker 3: Carol, can I ask just, uh, from a broader perspective,
Speaker 3: you've spent decades working with ultra high net worth individuals,
Speaker 3: is there is there are there traits that they all
Speaker 3: have in common when it comes to their investment strategies
Speaker 3: that we you know, uh, they don't have. No.
Speaker 6: I actually think the other nuance to a lot of
Speaker 6: the high net worth and ultra high networth families that
Speaker 6: I've worked with over the years is that the vast
Speaker 6: majority of them have been first generation, and so one
Speaker 6: of the really interesting they're as different as you and
Speaker 6: I are, and everyone all the population is out there,
Speaker 6: but one theme that can be really pretty common is,
Speaker 6: no matter how affluent they become, because they started with
Speaker 6: an idea or simple and it took a lot of risks,
Speaker 6: a lot of them still fear dying broke, and so
Speaker 6: it makes them very cognizant of understanding risk and return
Speaker 6: in their portfolios and not necessarily wanting to take the
Speaker 6: same kind of risk with their investments that they took
Speaker 6: making the money in the first place. Because markets can
Speaker 6: be very you know, when you're running a company, you
Speaker 6: can't necessarily control the economy, but you can control your
Speaker 6: response to it. When you've taken that liquidity and put
Speaker 6: it in the market, it can be really disconcerting to
Speaker 6: watch it reprice every second of the day and not
Speaker 6: understand why when the fundamentals are going in the direction
Speaker 6: you expected they were, the stock price or the manager
Speaker 6: price is going in the opposite direction. And so having
Speaker 6: a portfolio that's cognizant of what can you control. You
Speaker 6: can control your costs, you can control yeah, tax it
Speaker 6: take control, Carol.
Speaker 2: We gotta run. I'm so sorry. I have a great weekend,
Speaker 2: carolsch life over at Pimo Family Office. Look forward to
Speaker 2: it next time.
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