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Speaker 2: Anastasia Moroso she joins us. She's a chief investment strategist
Speaker 2: at I Capital. Anastasia, we'll get to the markets overall.
Speaker 2: I want to talk to you about what has been
Speaker 2: a little bit different tech the private market. I just
Speaker 2: did a read for Commonwealth.
Speaker 3: We go down.
Speaker 2: We talked to these Commonwealth folks, these advisors. They're talking
Speaker 2: about private equity, private credit, hedge funds, is alternative investments.
Speaker 2: What do you guys see at I Capital in terms
Speaker 2: of the demand for private investments.
Speaker 4: Right, Well, we obviously see a very big pickup in
Speaker 4: demand for private investments, and anythink that's been the story
Speaker 4: of ramping up over the last time years. That's how
Speaker 4: long I Capital has been around, or a little bit longer.
Speaker 4: But really in the last three or four years since
Speaker 4: I've joined, I've seen this immense pickup in demand for alternatives,
Speaker 4: and I think part of that has been because you know,
Speaker 4: private investors have been looking at what institutions have been
Speaker 4: making in let's say private equity, buyout strategies or private credit,
Speaker 4: and they wanted to expand their portfolios to that.
Speaker 3: You know.
Speaker 4: Part of the interest also, I think picked up when
Speaker 4: back in twenty twenty two you saw the sixty forty
Speaker 4: portfolio that was down seventeen percent, but a lot of
Speaker 4: these private market strategies held up really well and in
Speaker 4: some cases delivered really strong positive returns. So I see
Speaker 4: an immense demand for alternatives, and we do actually have
Speaker 4: quarterly flows that we're able to share that we see
Speaker 4: on our platform where private clients are allocating, and private
Speaker 4: credit has definitely been an area of focus and area
Speaker 4: of interest. It's about thirty seven percent of the flows
Speaker 4: that we see on the platform. It's a little bit
Speaker 4: lower than last quarter, but it's still a one trend,
Speaker 4: which is an up trend that we're seeing in private credit.
Speaker 4: Private equity is interesting because it's about forty seven percent
Speaker 4: of the flows that we see on the platform, and
Speaker 4: that is actually a sizeable pickup from last quarter. So
Speaker 4: that tells me that investors are seeing the valuation environment stabilize.
Speaker 4: These questions about well, don't private markets, you know, don't
Speaker 4: properly just valuations. I think those questions are now behind us,
Speaker 4: and investors are feeling comfortable to step into things like
Speaker 4: private credit. The other thing I would mention, Paul, infrastructure
Speaker 4: investing has really been attracting a lot of interest. When
Speaker 4: we look at the flows, we saw initially all the
Speaker 4: real asset flows go into real estate, but that number
Speaker 4: has started to pair back as infrastructure investing has picked up.
Speaker 4: So I would say tremendous interests. The question is not
Speaker 4: why alternatives, but how which ones and how much.
Speaker 5: Does the trajectory suggest that private credit will exceed private
Speaker 5: equity at some point?
Speaker 4: I mean, I think it's on that trajectory, but I really,
Speaker 4: you know, can see the two being neck and neck,
Speaker 4: because the truth is they serve a different purpose in
Speaker 4: the portfolio. And if you look at public equities and
Speaker 4: you think about forward looking returns, maybe they're a little
Speaker 4: bit lower than we've seen in the last you know,
Speaker 4: ten some years. So that's why I go to private equity.
Speaker 4: That's your potential for extra returns, and when you think
Speaker 4: about private credit, that's really your potential for extra income
Speaker 4: in the portfolio. So I think the two serve very
Speaker 4: different purposes, but investors are increasingly seeing them as an
Speaker 4: extension of what can I do in equities and what
Speaker 4: can I do in credit?
Speaker 5: Who are those investors? It's not mom and pop.
Speaker 4: Well, maybe not mom and pop just yeah, but I
Speaker 4: will say, you know, look, you know that the typical
Speaker 4: allocation for institutions is about forty percent, maybe in some
Speaker 4: cases fifty percent. The typical allocation for an ultra high
Speaker 4: network ultra high net worth investors about fifteen percent. But
Speaker 4: if when you look at financial advisors that alternative fifteen
Speaker 4: fifteen percent, Yes, but when you look at some of
Speaker 4: the smaller investors they may work within RIA advisor that
Speaker 4: you were mentioning, the allocations tend to be much smaller.
Speaker 4: And the stats that I see is at thirty six
Speaker 4: percent of advisors, those RIA advisors allocate to alternatives, and
Speaker 4: if they do, that percentage tends to be something like
Speaker 4: five percent. So there's a tremendous amount of interest and
Speaker 4: potential for future growth in this adoption of alternatives, because
Speaker 4: most advisors we talk to in survey do see those
Speaker 4: allocations rising. And you know, John, it's not yet every
Speaker 4: single investor that has alternatives in their portfolio. But that's
Speaker 4: something that we're really focused on in I Capital is
Speaker 4: how can you bring down the minimums, How can you
Speaker 4: reduce the friction? You know, how can you build structures
Speaker 4: that are suitable for individual investors?
Speaker 2: So are you concerned about the rising allocation to all
Speaker 2: turners because they are higher risk because of the in
Speaker 2: part through the lower liquidity. Are you concerned about that?
Speaker 2: How do you talk about that with your capital client?
Speaker 4: Well, I would say there are different kinds of risks,
Speaker 4: and you know, there's a mark to market risk and
Speaker 4: there's a getting whipsod in the markets based on how
Speaker 4: many rate cuts we're projecting or not. And from that standpoint,
Speaker 4: I would actually argue the public markets may be riskier
Speaker 4: because there's this sentiment factor, there is this technical dislocation
Speaker 4: that's very much possible in public markets on a daily basis.
Speaker 4: So from that perspective, I would argue some of the
Speaker 4: alternatives that don't have to get marked to market every
Speaker 4: single day may actually be a better risk adjusted return,
Speaker 4: you know, part of your portfolio. But you bring up
Speaker 4: a good point, of course, which is the liquidity, and
Speaker 4: you know, yes, individual investor does need liquidity. Do they
Speaker 4: need one hundred percent liquidity No, you know, but are
Speaker 4: they able to take some illiquidity risk? Probably yes. So
Speaker 4: that's why we don't see the allocations going to forty
Speaker 4: or fifty percent for individuals as they are for institutions,
Speaker 4: but up to a twenty percent allocation. I think that's
Speaker 4: how you square that risk of having the liquidity but
Speaker 4: at the same time giving yourself potential for higher income,
Speaker 4: for higher potential returns and also diversification.
Speaker 5: Does the word private mean opaque when it comes to
Speaker 5: investing and just about everything.
Speaker 4: Look, sometimes that is the perception, but I wouldn't say
Speaker 4: that's the reality. And you know, private means it doesn't
Speaker 4: get traded on a day to day basis. Private in
Speaker 4: the case of private credit, for example, means that most
Speaker 4: of these are by and whole long term securities that
Speaker 4: are meant to be held until maturity. And yes, there's
Speaker 4: this perception that because you know, you can't see the
Speaker 4: mark every single day, you know, there's lack of transparency.
Speaker 4: But the truth is that these assets do get valued
Speaker 4: on a quarterly basis. These assets are audited on an
Speaker 4: annual basis, and you know, one of the things that
Speaker 4: we're really focused on it. Capital is bringing that transparency
Speaker 4: by putting those performance numbers in front of investors so
Speaker 4: they're readily able to see them. And look, they're always
Speaker 4: going to be with a lag, because that's just the
Speaker 4: mechanics of private markets. You have to get the valuations
Speaker 4: and you have to get the reporting in. But what
Speaker 4: I can say, over the last fifteen years, if you
Speaker 4: look at the sixty forty portfolio relative to all the
Speaker 4: different private market strategies, most of those private market strategies
Speaker 4: have handedly outperformed the sixty to forty. For example, buy out,
Speaker 4: growth equity delivering your turns of fifteen fourteen or fifteen percent,
Speaker 4: private credit about nine percent. So it's been a very
Speaker 4: compelling place.
Speaker 2: To be tying in people looking for higher returns in
Speaker 2: the alternative space. I'm going to tie that in with
Speaker 2: a report we came out of Goldman Sachs earlier this
Speaker 2: week where they were forecasting much lower returns for public
Speaker 2: equity markets over the next decade versus this prior decade,
Speaker 2: maybe you know, low single digits. They were talking about
Speaker 2: thirty percent.
Speaker 6: What did you think of that?
Speaker 4: You know, look, there's a lot of variables that go
Speaker 4: into that, and in fact the report site's five different variables.
Speaker 4: But the thing about that is they're most likely treated
Speaker 4: as static variables versus something that's going to evolve. And
Speaker 4: of course, on the surface, it makes a lot of sense.
Speaker 4: And when equities are trading at twenty two times multiple,
Speaker 4: if that's your starting point, the forward looking returns mechanically
Speaker 4: a little be lower, you know, based on that. You know,
Speaker 4: there's also this concern about the concentration risk and the
Speaker 4: max seven companies that maybe are not going to be
Speaker 4: able to deliver. You know, Look, I do think returns
Speaker 4: because of valuations and equities should be somewhat lower than
Speaker 4: they have been in the past. But valuation aside, the
Speaker 4: US economy is most likely still going to continue to grow,
Speaker 4: It's most likely still going to continue to innovate. So
Speaker 4: I think if companies deliver that seven to ten percent
Speaker 4: earnings growth despite valuations, which maybe bring the overall returns
Speaker 4: down a little bit, I still think we would be
Speaker 4: towards the top of the range, which is about seven percent.
Speaker 2: Nastacia, thank you so much for joining us. Anastacia Amoroso.
Speaker 2: She's a chief investment strategist at Eye. Couple of joinings
Speaker 2: here in a Bloomberg in and Director Broker studio.
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Speaker 7: David Gerrow joins us now one of as many duties
Speaker 7: he's with a big take, providing intellectual input there on
Speaker 7: our politics and out links center for our economy. David,
Speaker 7: excuse me, I got their plague, folks. What can I say, David,
Speaker 7: as simple as I can. Aren't elections supposed to be close?
Speaker 6: They are, but we really haven't had one this close,
Speaker 6: or at least as close as these polls indicate, for
Speaker 6: for a long time. So in nineteen sixty, well yeah,
Speaker 6: you look. You look at the latest Bloomberg Morning Console
Speaker 6: poll for one for the other. The margin of arya
Speaker 6: here one percent, so just really on a knife's edge,
Speaker 6: and you know there shouldn't be a lot here. That's
Speaker 6: surprising to regular listeners to this program or any sentient
Speaker 6: beings in this country today. I mean, we have known
Speaker 6: that this raise has been an close. This is kind
Speaker 6: of confirmation that's the case in these seven swing states.
Speaker 2: Eleven pm, November fifth.
Speaker 5: Are we going to know anything I work in that weekend.
Speaker 6: We're working that week and I think that's safe to say. Now, Look,
Speaker 6: it's it's likely to be a race. It's going to
Speaker 6: take a long time to get a final result on
Speaker 6: and so I'm going to be in Pennsylvania for election
Speaker 6: night itself, and I've been in touch with a lot
Speaker 6: of election offices around the state. Many of them are
Speaker 6: just emphasizing how careful they're going to be about getting
Speaker 6: these counts done. Yes, we're going to get on official
Speaker 6: results from them the night of, but it's going to
Speaker 6: take days, I think, to get those confirmed, based on
Speaker 6: just the procedures that they have in place, but also
Speaker 6: just how much attention is being paid to this. And
Speaker 6: then we know, of course, there are legions of lawyers
Speaker 6: in the wings who are waiting to pounce on anything
Speaker 6: that might be seen as untowited or wrong.
Speaker 7: What people engaged in this ask me, is Georgia that
Speaker 7: seems to be the You mentioned Arizona weeks ago, but Georgia.
Speaker 7: Trump is ahead in Georgia. Are we supposed to be surprised?
Speaker 6: That is probably one of the closes this races of
Speaker 6: these seven and has been for a long time. I
Speaker 6: think that it's a must win for the former president.
Speaker 6: It's one that Vice President Harris would like to win.
Speaker 6: She's going to be there today with former President Obama
Speaker 6: and with Bruce Springsteen for a big event. Donald Trump
Speaker 6: was there last night for a big rally, So they're
Speaker 6: investing a lot in it. This is a state that
Speaker 6: has early voting. People have been going to the polls
Speaker 6: already and the turnout has been incredibly strong. So to summarize,
Speaker 6: very important for both of these candidates of more paramount importance.
Speaker 6: I think for former President Trump, what do we.
Speaker 3: Know about down ballot?
Speaker 2: Is it as close there?
Speaker 7: Don ballot?
Speaker 3: They explained Reggae like, no one exactly.
Speaker 6: Is it as close to their David, It's very close,
Speaker 6: and it's going to take some time as well to
Speaker 6: kind of find out what the composition the balance is
Speaker 6: going to be in both the House and the Senate.
Speaker 6: You know, it's interesting you watch how these rallies unfold.
Speaker 6: H Donald Trump isn't one to sort of envelop or
Speaker 6: elevate those down ballot from him. Yes, they show up
Speaker 6: at his rallies but that's of course not the star
Speaker 6: of the show. They're not the star of the show.
Speaker 6: You see Vice President Harris on stage with a number
Speaker 6: of these candidates for Senate and how especially in these
Speaker 6: contested races, so you know, both parties are paying close
Speaker 6: attention to how all of this shakes out. And you
Speaker 6: look at that map of the United States, we focus
Speaker 6: on not just swing states or swing districts, but sort
Speaker 6: of swing neighborhoods. Almost a lot of those dovetail with
Speaker 6: these very hotly contested congressional races.
Speaker 7: Do celebrities matter? Do people actually vote? Because Lisa Mateo's
Speaker 7: on stage of someone I would?
Speaker 6: I think that, you know, we're seeing this push now
Speaker 6: twelve days out to get people off the couch and
Speaker 6: to the polls, or to go to the mailbox to
Speaker 6: mail in that ballot. And so I think that the
Speaker 6: excitement surrounding these events elevated by the fact that Eminem's there,
Speaker 6: Bruce Springsteen is there, or Jason Aldan down in Georgia.
Speaker 6: I mean, both of these candidates are leaning on that,
Speaker 6: and it kind of is emblematic of the fact that
Speaker 6: they want to create excitement, then they want to reach
Speaker 6: out to people who again might have some apathy or
Speaker 6: in we about this note this has gone for what
Speaker 6: eight nine months, and are getting just tired of the
Speaker 6: whole process.
Speaker 2: What I understand, David, it's a story about getting out
Speaker 2: the vote. Does either side have any particular strength relative
Speaker 2: to the other in terms of getting out the vote?
Speaker 6: We know much more about the details of and the
Speaker 6: composition of the team that Kamala Harris has in place.
Speaker 6: She's raised more than a billion dollars in this campaign,
Speaker 6: which is just extraordinary and what could art kind of
Speaker 6: reprehensible as well. That's where we are in American politics.
Speaker 6: That money matters so much. But we know that she's
Speaker 6: deploying that across this country, yes, in those swing states,
Speaker 6: but beyond hiring staff, spending a lot of money on advertisements,
Speaker 6: both digital and television traditional advertising. The Trump ground game
Speaker 6: is I don't want to say it's more secret. We
Speaker 6: just have less information on what that's like. They have
Speaker 6: confidence that they have it, but again they raise less
Speaker 6: money than the vice president.
Speaker 7: Harris has your great chart, Nancy Cook's great, great chart
Speaker 7: here for a big take shows the margin of error. Clearly.
Speaker 7: It tells me this poll's total beloaning because we have
Speaker 7: no idea what we're doing within the margin of error.
Speaker 7: What did you learn from twenty twenty two about margin
Speaker 7: of era where so many got it wrong?
Speaker 6: Well, I mean I learned a lot from twenty twenty two.
Speaker 6: You know, it's a little different because it wasn't a
Speaker 6: presidential election, but I think that there is people are
Speaker 6: right to be skeptical of all of the polling that
Speaker 6: we have, and of course ours is one of many,
Speaker 6: and I think a difference this year is just how
Speaker 6: many polls we have, how inundated we are with them,
Speaker 6: and how important it is just kind of look at
Speaker 6: them all in complements. So the particular special sauce that
Speaker 6: we have is since October of twenty twenty three we've
Speaker 6: really just focused on these seven swing states and kind
Speaker 6: of charted both how these candidates are doing, of course
Speaker 6: it was Joe Biden until it was Kamala Harris, how
Speaker 6: they've been doing, but also what issues are important to voters.
Speaker 6: And I think as we've seen you look at you
Speaker 6: mentioned that chart, there's another great chart there that that
Speaker 6: Nancy Cook and her colleagues have made that shows just
Speaker 6: how the economy has been the paramount issue for voters
Speaker 6: from the very beginning by such a wide margin. Beneath
Speaker 6: it our immigration and abortion, but it is the economy
Speaker 6: that these voters care about. I think that's something that
Speaker 6: stands out to me in our poll. That's something that
Speaker 6: I can I can get a lot of credence in
Speaker 6: from from the pole. You know, the key question is
Speaker 6: which kenid do you trust to handle the economy going forward?
Speaker 6: Fifty percent of responds to that poll in those swing states,
Speaker 6: likely voters say it's Donald Trump. Forty five percent say
Speaker 6: Kamala Harris. You know that that has to frustrate her.
Speaker 6: At the same time, she's got to be happy that
Speaker 6: number is higher than it was for Joe Biden. She
Speaker 6: has made up some of the ground that he had
Speaker 6: lost on that issue.
Speaker 7: Paul, I mean, you know, I'm not the scientist on
Speaker 7: his girl is, but on taxes they're equal, which I
Speaker 7: did not expect.
Speaker 2: No, No, it's it's interesting here, David. I mean Elon Musk,
Speaker 2: that's been interesting to watch. Do you think he's had
Speaker 2: any influencer impact here, because he's certainly been high.
Speaker 5: Profile and make some news.
Speaker 6: I should I should have fed on that. When yeah, yeah,
Speaker 6: when you when you when you asked about celebrities, Sure
Speaker 6: brought that up. What's the j gonna do cut to
Speaker 6: the check on this, on this sweep steakes issue. Yeah,
Speaker 6: I think that they're looking at it pretty seriously. So
Speaker 6: those who haven't followed this. Elon Musk has said he'll
Speaker 6: give a million dollars a day to voters Swing states
Speaker 6: who sign a petition saying that they pledge fealty to
Speaker 6: the First and Second Amendments. And he's you know, people
Speaker 6: have appeared with these sizeable checks. I mean he's giving
Speaker 6: out he's giving out these million dollar amounts. You know,
Speaker 6: what's illegal is paying someone to vote. And what he
Speaker 6: seems to be trying to do is skirt that by
Speaker 6: saying I'm not doing that. I'm having I'm having them
Speaker 6: sign a petition. But you asked about his role. I
Speaker 6: could have talked about it when you asked about celebrity Tom.
Speaker 6: But it's it's he's playing a huge role in Pennsylvania.
Speaker 6: He spent seventy five million dollars in that state. He's
Speaker 6: sort of set up an operation there. He's held town halls.
Speaker 6: He is trying to be this link one of many
Speaker 6: that Donald Trump has to the bro vote these young men.
Speaker 6: And we see Donald Trump tomorrow going to sit down
Speaker 6: with Joe Rogan who has a wildly, wildly popular podcast
Speaker 6: What way more popular than Bigger Than the Bigger Than
Speaker 6: the Big Tip Fight Droves And and that is the
Speaker 6: audience he's trying to target. They were a young man
Speaker 6: who looks.
Speaker 7: Is the true David Ger that missus Barr is out
Speaker 7: in a street corner in Pennsylvania waiting for Eloud to
Speaker 7: stop buying with million dollar check.
Speaker 6: I cannot confirm or deny that, and you know I'll
Speaker 6: follow up on that.
Speaker 7: Okay, David Girl, Thank you so much.
Speaker 3: Great analysis and wat to be here.
Speaker 7: Folks at charts are hugely informative, particularly over this foolishness
Speaker 7: and reality of the margin of error.
Speaker 3: Yeah, wild raising.
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Speaker 7: Now soberly and somber after hitting the ball deep the
Speaker 7: left field with Tesla Dan Ives joins us Out, senior
Speaker 7: equity analyst at web Bush Securities. Okay, I got a
Speaker 7: moonshot Dan on the bullmark of Tesla from fifty to
Speaker 7: four hundred down it goes, and it's been in a
Speaker 7: trading range. Was the announcement that you predicted last night?
Speaker 7: Is that enough to reinvigorate a bull market in Tesla?
Speaker 3: Oh?
Speaker 8: Yeah, Look, I think Aaron Judge like performance. I mean
Speaker 8: the margins that we saw, that's a massive rebound and
Speaker 8: now starts the point where we're gonna see margins bike
Speaker 8: back up. Price cuts have subsided, but the out for
Speaker 8: next year time twenty to thirty percent. That's that's basically
Speaker 8: double what anyone expects. The bullmarket in Tesla I believe
Speaker 8: has begun.
Speaker 7: Okay, Dan, it's just like regular season, Aaron Judge, or playoffs,
Speaker 7: Division Series, World Series Aaron Judge, Which Aaron.
Speaker 8: Judge thinks, I think this is regular season. Goot, Aaron Judge,
Speaker 8: I think this this is Tesla getting their footing back, right.
Speaker 8: I mean, you know, you see a lot of negativity
Speaker 8: obviously come out of Robot tax today.
Speaker 3: It's been a tough year.
Speaker 8: I think you're seeing a resurgence now this is sort
Speaker 8: of this the second chapter of this growth story plan out.
Speaker 2: Hey, Dan, what do you think investors are really focused
Speaker 2: on now? When you think about Tesla? Is it the
Speaker 2: you know, automotive gross margin? Is that the Robotaxi is
Speaker 2: at the AI angle that Elon's been trying to push
Speaker 2: for the last several quarters. Where is the focus for
Speaker 2: investors these days?
Speaker 8: Yeah, But I think in the near term it's really
Speaker 8: it's about margins. You need to see margins get back
Speaker 8: toward twenties. I mean, you can't have a mid teens
Speaker 8: and I think that's what we saw last night. Then
Speaker 8: it's really the delivery growth in China, which now just
Speaker 8: had their best quarter ever. But in terms of the
Speaker 8: longer term growth, this is an AI story. Autonomous must
Speaker 8: give actually a lot of details on cybercabin, some other issues.
Speaker 8: Remember a lot came out of Robotaxi bars. We actually
Speaker 8: thought it was one of the top three events we've
Speaker 8: ever been at, you know, in twenty five years. This
Speaker 8: is an autonomous AI play. I believe it's the most
Speaker 8: undervalued AI plan market for.
Speaker 7: All of our listeners in viewers, Dan, I seriously, this
Speaker 7: is important. Should we care about super secret speculation from
Speaker 7: some iPhone accountable iesore on the Asian Pacific rim or
Speaker 7: should we focus on the fact I've had to buy
Speaker 7: three iPhones sixteens in the last two weeks.
Speaker 8: Yeah, we mean you've talked about this for many years,
Speaker 8: me and Paul and I just I disagree with this analysis.
Speaker 8: And I think many have been wrong on Apple for
Speaker 8: really the last four or five years, trying to kind
Speaker 8: of do gymnastics to get negative.
Speaker 3: We've been Asian two times in the last eight weeks.
Speaker 8: I believe this will be the strongest iPhone year ever
Speaker 8: when it's all said and done.
Speaker 3: And I think trying to kind of like pick the.
Speaker 8: Spots yell fire in a crowd theater, I get it,
Speaker 8: but I just I don't see it.
Speaker 3: I believe this.
Speaker 8: Is this is the start of a move toward a
Speaker 8: three hundred dollars stock and Apple.
Speaker 2: So when you said you've been in Asia, and that's
Speaker 2: really important, Dan, because a lot of folks, I think rightfully,
Speaker 2: so kind of say one of the big drivers here
Speaker 2: are the big swing issues for Apple is China not
Speaker 2: only at twenty percent of their revenue, but it's obviously
Speaker 2: a huge part of their supply chain. How do you
Speaker 2: you China and in Apple's positioning in China versus what
Speaker 2: are some you know, really strong local competitors.
Speaker 8: Yeah, I mean, look, there's one hundred million iPhones in
Speaker 8: China in a window of an upgrade opportunity to just
Speaker 8: forget Ai. When you look what's happening in China. I mean,
Speaker 8: I think that you're gonna have China growth even we're
Speaker 8: off tough comms. It's going to be up anywhere from
Speaker 8: eighteen to twenty five percent over the next called three
Speaker 8: four quarters. When that all plays out, that's how you're
Speaker 8: now going to get to street numbers that have to
Speaker 8: move higher for Apple, not lower. And services is going
Speaker 8: to be a huge driver there. And I think that's
Speaker 8: why we're looking a four trillion dollar mark ap in
Speaker 8: Apple by early next year.
Speaker 2: So talk to us about that services business, Dan, because
Speaker 2: that's something.
Speaker 7: That costs to me exactly wanted to go.
Speaker 2: Exactly, Tom. I mean, a lot of you know, bulls
Speaker 2: hang their hat the long term hat on the services revenues.
Speaker 2: You know, roughly twenty percent of revenue. It's got nice
Speaker 2: margins to that revenue stream. How do you model that out?
Speaker 2: The services side of the Apple Store.
Speaker 8: If you model out services just as a separate business,
Speaker 8: you're talking about what's going to be one hundred and
Speaker 8: twenty five hundred and fifty billion dollar revenue stream next
Speaker 8: three four years with double the margroos margins of the
Speaker 8: hardware business.
Speaker 3: And I believe the valuation.
Speaker 8: For the services business alone is two trillion dollar valuation
Speaker 8: just for services.
Speaker 7: Well, this is key, you know. And then I was
Speaker 7: just over in Europe and I really saw in ear
Speaker 7: full of the Apple ecosystem being used by all different
Speaker 7: classes of people as well on a global basis. What
Speaker 7: is the margin of the ecosystem?
Speaker 3: I mean, look, if you look, if you look today
Speaker 3: in terms of the margin of the ecosystem, it's basically
Speaker 3: it's thirty. They've essentially increased their margin profile two to
Speaker 3: three hundred BIPs globally in terms of what they're being
Speaker 3: able to do at scale and scoop. I think that
Speaker 3: when even what we've seen in Europe, I think the
Speaker 3: biggest issue right now is when you think about AI
Speaker 3: right and you think about what they're driving that is
Speaker 3: going to be a US and essentially Asia and specifically
Speaker 3: China centric story for the next eighteen months. That are
Speaker 3: the group core growth drivers for Apple.
Speaker 7: What's your single best idea right now? Everybody and everything,
Speaker 7: but what's the Danai single best idea right now?
Speaker 8: It's been the messy of AI Polunteer, best pure play
Speaker 8: AI game out there that it's that that continues to
Speaker 8: be our best idea along of course with Apple, Mirosoft
Speaker 8: Tesla talk to.
Speaker 2: Us about Palenteer. A lot of people don't know what
Speaker 2: that is. I'm going to ask you just what do
Speaker 2: they do and why is it your best idea?
Speaker 3: Yeah? I mean Volunteer is what makes them so unique.
Speaker 8: When you think about AI and you got Godfather of
Speaker 8: Ai Jensen a video, the way that you actually build
Speaker 8: out use cases for enterprises is pound Teer.
Speaker 3: So when we think about AI and you think about.
Speaker 8: The AI revolution, they're is a software company that essentially
Speaker 8: builds use cases on top of what video what the
Speaker 8: hyperscalers build. That's why we believe this is just you know,
Speaker 8: to me, it's one of the most unique memes I've
Speaker 8: ever seen.
Speaker 7: Dennis, Thank you so much. Congratulations on Tesla. Must admit
Speaker 7: victory left there from mister Rives this morning.
Speaker 3: He is at what Bush.
Speaker 1: This is the Bloomberg surveillance podcast. Listen live each weekday
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Speaker 2: Geopolitics, they are meeting in Washington, d C. As we speak,
Speaker 2: A lot on their plate, as they discussed global geopolitical events,
Speaker 2: obviously in the Middle East, in Ukraine, in Asia, A
Speaker 2: lot on the plate. You think about climate change is
Speaker 2: another global issue. A lot's going on there. Nadia Kaledino
Speaker 2: joins us. She is the president of the European Investment Bank.
Speaker 2: She joined us from a Washington, DC bureau. Nadia, thanks
Speaker 2: so much for joining us here. You're down in Washington,
Speaker 2: DC at the IMF. Could you give us a sense
Speaker 2: or what are some of the key topics that you
Speaker 2: guys are focused on down there in Washington.
Speaker 9: Well, it's a pleasure to be here, and indeed, a
Speaker 9: lot on our fleet. As you were saying, there's been
Speaker 9: a lot of discussion about the economic outlook and the resilience,
Speaker 9: the remarkable resilience of the global economy, but also the
Speaker 9: current risks derived from the geopolitical tensions, uncertainty and fragmentation
Speaker 9: of global markets, and we will also be talking a
Speaker 9: lot about climate action, climate finance and how to support
Speaker 9: most vulnerable countries around the world.
Speaker 5: I have a dumb question for you, Nadia. Could you
Speaker 5: explain exactly what the European Investment Bank is and does?
Speaker 9: Yes? No, of course, the European Investment Bank is one
Speaker 9: of the European institutions. It was created when the European
Speaker 9: institutions were created, you know, decades ago, and it is
Speaker 9: the largest multilateral financial institution in the world, with a
Speaker 9: six hundred billion balance sheet. We do ninety percent of
Speaker 9: our investments inside the EU, financing all the key infrastructures
Speaker 9: from energy trains, also innovative investments in frontline companies from
Speaker 9: tier technologies, and ten percent outside the EU. But I
Speaker 9: mean eight to nine billion euros a year, so we're
Speaker 9: a very important partner of the multilateral family.
Speaker 2: Nadia, in terms of infrastructure, talk to us about the
Speaker 2: European Investment Bank and its view on what's transpiring in Ukraine.
Speaker 2: What is the EIB doing now and then in the
Speaker 2: years ahead for the good folks of the Ukraine.
Speaker 9: Yes, we're currently probably the most important investment partner to
Speaker 9: the Ukrainian government. We had a round table yesterday where
Speaker 9: there was a very strong support. I was impressed by
Speaker 9: the very strong statements that were made around the table
Speaker 9: to support Ukraine. Our support to Ukraineism wavering is about
Speaker 9: peace and security for Europe, of course, and the EIB
Speaker 9: is investing right now, focusing and supporting Ukraine in the
Speaker 9: run up to the winter, so repairs and resilience of
Speaker 9: energy infrastructures and going beyond the energy sector, we're supporting
Speaker 9: investments in housing, schools, education and also private companies. We
Speaker 9: just launched an export credit guarantee facility which has been
Speaker 9: oversubscribed for European companies trading with Ukraine. So we will
Speaker 9: continue to support Ukraine now during the war and hopefully
Speaker 9: very soon in the reconstruction.
Speaker 5: What is the European Green Deal and what's your investment there?
Speaker 9: Well, more than fifty percent of our annual investments go
Speaker 9: to the green transition, and that's why we're consolidating our
Speaker 9: role as the Climate Bank. And this has to do
Speaker 9: with the energy transition we just discussed, but also the
Speaker 9: deployment of net zero technologies from green hydrogen to other
Speaker 9: green fuels, and also making sure that Europe continues to
Speaker 9: be one of the leading players worldwide when it comes
Speaker 9: to green tech, and I think that we're getting on
Speaker 9: with it. The private sector is also getting on with it.
Speaker 9: Just yesterday we released a very interesting investment survey that
Speaker 9: shows that European companies, more than sixty percent of European
Speaker 9: companies are actually investing in green technologies, and I think
Speaker 9: that's very good news, so that we can really move
Speaker 9: to a net zero economy and make climate and competitiveness
Speaker 9: just two sides of the same coin.
Speaker 2: Nadie, across the twenty seven countries in the European Union,
Speaker 2: where are the biggest concerns for you right now? Were
Speaker 2: you maybe spending most of your time or more of
Speaker 2: your time?
Speaker 9: Well, we invest in the twenty seven member states, and
Speaker 9: we are investing very heavily right now in this green
Speaker 9: transition to make sure also that Europe becomes strategically independent.
Speaker 9: You know, the war in Ukraine has shown us that
Speaker 9: being dependent on other parts of the world and in
Speaker 9: particular fossil fuel producers, it's a vulnerability for Europe. And
Speaker 9: so there's a strong determination to make the green transition
Speaker 9: a European success, and we're very much focusing here, but
Speaker 9: of course we're also stepping up our support to europe
Speaker 9: security and defense industry, digitalization, social infrastructures, trying to make
Speaker 9: sure that we continue to be a prosperous part of
Speaker 9: the world and also protecting our values.
Speaker 5: And how dependent is your investment portfolio on US policy,
Speaker 5: specifically the outcome of the election here.
Speaker 9: Well, we obviously will continue to be closely partnering with
Speaker 9: whoever is leading the US government, and the transatlantic relationship
Speaker 9: I think is quite strategic and it is a win
Speaker 9: win relationship both to the US and to Europe. So
Speaker 9: we have every interest to continue to build close ties
Speaker 9: from the cultural point of view, from the economic and
Speaker 9: financial point of view, and of course from the security
Speaker 9: and defense point of view too, And that doesn't influence
Speaker 9: really our investment activities at the EIB. We will continue
Speaker 9: to be a very important investment player inside the EU
Speaker 9: and of course around the world.
Speaker 2: So as Europe I think, adapts to the new world
Speaker 2: where Russia is much more of an adversary than maybe
Speaker 2: they were prior to the invasion of the Ukraine. Are
Speaker 2: most of the member states in the EU are they
Speaker 2: operating as if at least for the foreseeable future, Russia
Speaker 2: will not be in any way shape or form an
Speaker 2: economic partner.
Speaker 3: Well.
Speaker 9: Right now we're focusing very much in supporting Ukraine. I
Speaker 9: hope that these war ends as possible, and that we
Speaker 9: can see how the new global order is shaping up
Speaker 9: in a manner which is more constructive. What we're seeing
Speaker 9: in the last years is growing tensions, growing wars, and
Speaker 9: that obviously is not good for the global economy, and
Speaker 9: that is not good for the citizens perception of stability
Speaker 9: and happiness, if I may put it this way. So
Speaker 9: I really hope that we can move to a more
Speaker 9: constructive approach throughout the world. From the perspective of the
Speaker 9: European Investment Bank and from the perspective of the multilateral
Speaker 9: development institutions more broadly, that we're gathering here in Washington
Speaker 9: these days, I think that we're showing that we're walking
Speaker 9: the talk. We're becoming as effective as possible, working as
Speaker 9: a system, co operating closely together so that we can
Speaker 9: play the role that we're called to in supporting global
Speaker 9: stability and also bringing prosperity and protecting most vulnerable countries
Speaker 9: around the world. I think that these shows that together
Speaker 9: were stronger and that cooperating we can get further and
Speaker 9: faster than by attention and conflict.
Speaker 2: Of course, Nadia, thank you so much for joining us.
Speaker 2: We really appreciate you taking some time to speak with us.
Speaker 2: Nadia Calvino, President of the European Investment Bank. The IMF
Speaker 2: is meeting in Washington, DC this week and obviously a
Speaker 2: lot on the Clayton in terms of geopolitics and financing.
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