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Speaker 2: Tesla facing some challenges in Europe. I think it's fair
Speaker 2: to say globally, but just check out what our team
Speaker 2: reported last week. Sales fell for the tenth time in
Speaker 2: the last twelve months in Europe. That was where Elon
Speaker 2: Musk's politicking and a changer of the carmaker's most important
Speaker 2: product had been major hindrances. The company registered six and
Speaker 2: eighty eight new cars in the month of February. We
Speaker 2: don't have the March numbers yet, that's some of the February.
Speaker 2: It's down forty percent from a year ago. This is
Speaker 2: according to the European Automobile Manufacturers Associate. Tesla's sales plunged
Speaker 2: forty three percent of the first two months of the year,
Speaker 2: while the Regent saw a thirty one percent rise in
Speaker 2: ev registration. So more people are buying evs, but fewer
Speaker 2: people are buying Tesla's.
Speaker 3: That's amazing. That's a huge, huge drop.
Speaker 2: So maybe it's a surprise to people listening who don't
Speaker 2: look at this market every single day, or maybe not
Speaker 2: surprising given what's happening with Tesla's stock price. Sean Tucker
Speaker 2: is probably not surprised about this. He's editor of Kelly
Speaker 2: blue Book. It's the vehicle valuation and automotive research company.
Speaker 2: He argues that Tesla's quote high water mark as an automaker,
Speaker 2: maybe in the past, that's a hot take. Sean Sean
Speaker 2: joins us from Washington, DC. So Sean back up the
Speaker 2: claim there. Why in your view, could Tesla's best days
Speaker 2: be behind it?
Speaker 4: Because its peak in terms of auto sales was in
Speaker 4: February of twenty twenty three. We weren't able to call
Speaker 4: the peak at the time because we weren't sure that
Speaker 4: the decline would last.
Speaker 5: But what we see now is if you look.
Speaker 4: At Tesla's as a percentage of the new cars sold
Speaker 4: in twenty twenty three, they hit four point two nine percent,
Speaker 4: and that's their peak, and in twenty twenty four they
Speaker 4: were back down to three.
Speaker 5: Point ninety five, so it was already falling before this
Speaker 5: political controversy began.
Speaker 3: What is the issue?
Speaker 2: Is it political controversy or is it the fact that
Speaker 2: this is a space that a lot of competitors have
Speaker 2: gotten involved in and I think Americans this is not
Speaker 2: on Americans radar, but byd and show me those vehicles
Speaker 2: blow away anybody who gets behind the wheel.
Speaker 3: How big of an issue is that?
Speaker 4: It's absolutely huge for Tesla. But for a moment, if
Speaker 4: you could imagine if we could take elon Musk out
Speaker 4: of consideration for this, what you would have is a
Speaker 4: company with an aging lineup, you know, the Modelesque, the
Speaker 4: Model X. The platform underneath those was introduced in twenty twelve.
Speaker 4: That is ancient by auto industry standards. There's nothing new
Speaker 4: in the pipeline, at least nothing particularly high volume new
Speaker 4: in the pipeline, and sales peaked back in twenty twenty three.
Speaker 4: Then you add in the fact that they've got all
Speaker 4: of this new competition and they're not innovating any I
Speaker 4: don't know that they would be doing well without.
Speaker 5: The political controversy.
Speaker 4: Stack the political controversy on top of that, and you
Speaker 4: just you have what you see today.
Speaker 6: So and I have to counter just because earlier in
Speaker 6: our last hour, we talked with a member of our
Speaker 6: Bloomberg Intelligence team are Tim Craighead, and we've got a
Speaker 6: story out in Bloomberg BusinessWeek about the ten companies to
Speaker 6: watch for good or bad reasons for better for worse,
Speaker 6: and Tesla was a company that was singled out for better.
Speaker 6: And basically what they talked about is that several positives
Speaker 6: to look forward to. Orders for Tesla's newly revamped Model
Speaker 6: Wire accelerating notably even in China. Production rates are poised
Speaker 6: to increase quickly. Meantime, the company's battery sales to utilities,
Speaker 6: which generate higher margins than autos, appear underappreciated as a
Speaker 6: profit driver.
Speaker 3: So that's more of a corporate overview.
Speaker 6: But I am curious about the Model Why, and I
Speaker 6: think there's also a subcompact right that could start in
Speaker 6: June widening, you know, kind of Tesla's reach and appeal.
Speaker 3: So what would you say to that.
Speaker 5: The Model Why refresh is essentially a visual refresh. It's
Speaker 5: basically the same car underneath that it's been since about
Speaker 5: twenty seventeen, So we kind of question whether that's really
Speaker 5: going to generate much of a sales spike.
Speaker 4: Absolutely, it's their best selling model. I believe it was
Speaker 4: one of the top five best selling models in the
Speaker 4: United States last year. But I don't think there's a
Speaker 4: lot of opportunity for growth with that.
Speaker 5: And then you pile.
Speaker 4: Musk's troubles on top of it, and I'd be very
Speaker 4: surprised if you see sales actually increase anywhere outside of China,
Speaker 4: And then in China you've got BYD to contend with.
Speaker 4: As for battery sales, that's a little bit outside of
Speaker 4: our scope, is Kelly Bluebook.
Speaker 5: But I wouldn't know that the musk.
Speaker 4: Musk is fond of saying these days that Tesla's not
Speaker 4: a car company, And if he's right, and he's got
Speaker 4: significant plans outside of cars, then that changes the equation.
Speaker 4: But he needs to be right because as a car company,
Speaker 4: it really sales really peaked a little over two years ago.
Speaker 2: Yeah, maybe he's betting it all on the humanoid robot
Speaker 2: and the robo taxi. Where does the robotaxi come into
Speaker 2: your analysis?
Speaker 4: Many of the Tesla's rivals have attempted to make a
Speaker 4: sort of robotaxi project work. Several of them have gotten
Speaker 4: out of the business when in the last few years,
Speaker 4: it's possible that Tesla has secret sauce that nobody else
Speaker 4: has and will make this profitable, but it's proven to
Speaker 4: be a very difficult business to profit in.
Speaker 2: You're in Washington, d C. I believe you're going to
Speaker 2: start getting weaymos soon in Washington DC. Have you been
Speaker 2: able to ride in one outside of DC?
Speaker 5: I have written in a Zooks, but not a Weymo.
Speaker 2: How what was your experience, just as somebody who is
Speaker 2: in this world day in and day out with a
Speaker 2: driver on the radar, what was your experience without a driver?
Speaker 5: You know? I drive fifty two different cars a year.
Speaker 4: As Kelly get a new car wants a week to
Speaker 4: test drive, and I have really come around on the
Speaker 4: concept of self driving cars over time. They may be
Speaker 4: nervous to begin with, but the truth is now I
Speaker 4: look around me in traffic and I see so many
Speaker 4: people tapping on their phones that I would rather driving
Speaker 4: world where at least the car was paying attention.
Speaker 3: I love, I completely agree with you.
Speaker 2: I Carol knows my trip to San Francisco a few
Speaker 2: months ago, my life was like turned upside down with
Speaker 2: this just my first experience in a WEEIMO, I think
Speaker 2: it's fantastic. I wish this stuff was all over because
Speaker 2: these things follow the rules and they're not texting and driving.
Speaker 2: But realistically, in your view, do you see that world existing?
Speaker 4: It's going to take a lot longer to get there
Speaker 4: than some of these technology companies what have you believe
Speaker 4: there are significant regulatory challenges.
Speaker 5: Because right now this is regulated by the states. So
Speaker 5: even if you can make.
Speaker 4: The technology work, you'd have to work through fifty sets
Speaker 4: of liability laws and fifty different legislatures.
Speaker 2: Maybe start maybe, but not if Elon Musk has his
Speaker 2: way in terms of regulations with Sean Duffy at the
Speaker 2: helm of the Department of Transportation.
Speaker 4: Which is one of the more interesting proposals he put
Speaker 4: He's put out there. The other thing I'll put out
Speaker 4: is that when we start to masterself driving cars and
Speaker 4: actually get them functional, you open a whole new questions
Speaker 4: we've never run into before. Mercedes has the most advanced
Speaker 4: system for sale in the United States. It's a legal
Speaker 4: law right now only in Nevada, California, and they have proposed,
Speaker 4: just to give you one example, that the industry adopts
Speaker 4: teal exterior lights as a signal that the self driving
Speaker 4: system is on, because how are police supposed to know
Speaker 4: whether the driver's distracted if it's okay for the driver
Speaker 4: to be distracted.
Speaker 3: Wait, what was the signal? You said?
Speaker 5: And exterior lights and colored and.
Speaker 3: Teal does that work? Does that exist now?
Speaker 4: Only in testing? And again that would be a legal issue.
Speaker 4: You'd have to get fifty states to agree to that.
Speaker 4: The point is just to say that even once the
Speaker 4: technology works, we've got a whole public policy system that
Speaker 4: we'd have to work through it a lot of new questions.
Speaker 2: But that's none of that has to do with the
Speaker 2: Actually a lot of what you're talking about has to
Speaker 2: do with policy and with sort of the way that
Speaker 2: law enforcement looks at this stuff. In your view is
Speaker 2: the tech is the tech there.
Speaker 5: It's getting there.
Speaker 4: But Tesla has more significant challenges than most of its
Speaker 4: rivals in that way. Elon Musk is very insistent on
Speaker 4: doing self driving with nothing but cameras, and the systems
Speaker 4: that have surpassed Tesla, like that Mercedes system that's the
Speaker 4: only Level three approved anywhere in America, uses radar cameras
Speaker 4: and leadar If Tesla can't adopt additional technologies like that,
Speaker 4: it's going to take them longer to get an effective
Speaker 4: self triding car, all.
Speaker 6: Right, Sean, I just was like, wait a minute, I
Speaker 6: gotta ask you something.
Speaker 3: Are you saying.
Speaker 6: Mercedes is better than Tesla when it comes to self driving.
Speaker 4: The automotive industry uses a system of five levels to
Speaker 4: describe self driving cars, from level one just your basic
Speaker 4: smart cruise control, up to level five being a car
Speaker 4: with no steering wheel. Almost every automaker has a level
Speaker 4: two system right now, including Tesla, and Mercedes has the
Speaker 4: only Level three system that's approved anywhere in the United States.
Speaker 4: What that means is that legally you can look away
Speaker 4: from the roadway while it's working. Some Mercedes has that.
Speaker 4: It's only in Nevada and parts of California right now,
Speaker 4: but there is currently a Mercedes system you can buy
Speaker 4: that will let you settle back and read a book
Speaker 4: in a car, and Tesla doesn't have anything like that.
Speaker 6: I have to say, I am a little bit familiar
Speaker 6: with Mercedes, and just their safety systems are like blown
Speaker 6: away where you can take your hands off the wheel,
Speaker 6: and especially like on a highway.
Speaker 2: Not even a brand new car that you're talking about, Yeah,
Speaker 2: experience with right.
Speaker 6: Yeah, I have one and it's old, it's over ten
Speaker 6: years old. But the safety systems are unbelievable in terms
Speaker 6: of what you can do and how it just tracks
Speaker 6: and just keeps you safe. And what I also do
Speaker 6: wonder Sean that if we're not kind of quite ready
Speaker 6: to just look away and let the car drive, do
Speaker 6: we just continue to see the safety systems get better
Speaker 6: and better on these cars, because I almost feel like
Speaker 6: Cinems amount of highway you know, you put on basically
Speaker 6: cruise control, and these cars are tracking. It almost feels
Speaker 6: like with one another. And in that regard, I feel
Speaker 6: so much safer where my car. If I get distracted,
Speaker 6: it's going to stop the car if I miss the
Speaker 6: car stopping in front of me, And that's pretty amazing.
Speaker 4: And those are essentially the same technologies. Yeah, the technologies
Speaker 4: that will ultimately result in so driving cars. The first
Speaker 4: thing they do is give us those safety systems, and
Speaker 4: when all of those safety systems can work together and
Speaker 4: talk to each other, you end up with a self
Speaker 4: driving car. That's also how the industry is going to
Speaker 4: have to get people comfortable with it. Triple A did
Speaker 4: a study, I believe, just a month ago in which
Speaker 4: sixteen percent of Americans said they would get into a
Speaker 4: self driving car. That's the public challenge that they face
Speaker 4: in terms of approval, sixteen percent.
Speaker 3: I don't, so I don't buy that number. And here's why.
Speaker 2: The only reason I got into it in San Francisco
Speaker 2: wasn't even on my radar. And then I met up
Speaker 2: with a friend who was like, Hey, did you go
Speaker 2: in the Waimo yet? And I was like no, and
Speaker 2: She's like, Oh, it's so awesome. Just download the app
Speaker 2: and do it. And I did it. And I'm a
Speaker 2: true believer. I'm converted. And I think it's just like
Speaker 2: word of mouth, and just because people haven't been around
Speaker 2: this technology means they're going to answer that question a
Speaker 2: certain way.
Speaker 4: Well maybe right, but I think that as people get
Speaker 4: more accustomed to the safety systems, they get more comfortable
Speaker 4: and more comfortable with the car making certain decisions like that.
Speaker 4: That's how we eventually get to a world where most
Speaker 4: of us are willing to get in.
Speaker 2: I was even talking to your point, John, I was
Speaker 2: even talking to the Uber and Lyft drivers about this
Speaker 2: in the San Francisco Bay area because as you know,
Speaker 2: in San Francisco, you can only do it in San
Speaker 2: Francisco City proper. It's like a very strict border where
Speaker 2: you can do this. And they prefer driving with these
Speaker 2: on the roads because they follow the rules and they
Speaker 2: make good choices. I mean, it's pretty remarkable to see.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 2: We've been talking about tariffs and we're already seeing companies
Speaker 2: react ahead of this announcement tomorrow. Mercedes Benz considering withdrawing
Speaker 2: its least expensive car from the US. Cocoa and coffee
Speaker 2: futures climbed on heightened supply fears as attention shifts potential
Speaker 2: impacts of a trade war on ag markets. Just a
Speaker 2: couple of headlines. I deleted some because we want time
Speaker 2: to get to them all. But there's a lot around.
Speaker 6: This, Yeah, and we have a great guest to talk
Speaker 6: all about it, Brad Carson. He does think about tariffs
Speaker 6: on high tech, specifically data centers and other infrastructure use
Speaker 6: that are used in AI tools. He is the co
Speaker 6: founder and president of Americans for Responsible Innovation and their
Speaker 6: mission is to quote help you as policymakers develop a
Speaker 6: thoughtful governance framework for rapidly advancing technologies that protects the
Speaker 6: public from harm while continuing to foster innovation.
Speaker 3: He's also a former.
Speaker 6: Congressman, serve two terms in the House as a Democrat
Speaker 6: in Oklahoma second District. He's a veteran worked in the
Speaker 6: Obama administration, General Counsel of the Army and Undersecretary of
Speaker 6: the Army, among other roles.
Speaker 3: In other words, we're out of time, Brad. Sorry, you
Speaker 3: come at.
Speaker 6: Things from different perspectives, which is what we always like
Speaker 6: to talk to.
Speaker 3: Brad.
Speaker 6: Talk to us about tariffs and how you're thinking about
Speaker 6: them as we get ready for what's to come in
Speaker 6: less than twenty four hours.
Speaker 7: Well, great to be with you.
Speaker 8: And as you said in our mission statement at ARI,
Speaker 8: we want to be thoughtful and tariffs have trade offs,
Speaker 8: and when it comes to AI, there are some real
Speaker 8: negative effects possibly of our race to build giant data
Speaker 8: centers necessary for the next generations of AI, because Chinese
Speaker 8: parts as well as parts from Mexico and Canada are
Speaker 8: really essential to that. It's really exponential growth in building
Speaker 8: these kind of massive data centers, so it's going to
Speaker 8: increase the cost probably slow down the progress, and that
Speaker 8: is one of the trade offs that policy makers should
Speaker 8: be thinking about.
Speaker 2: Mexico and Canada not usually on our radar when we
Speaker 2: think about the high tech it's usually China, it's usually overseas.
Speaker 7: What is it?
Speaker 8: Well we get Actually we import more IT equipment from
Speaker 8: Mexico at forty three billion dollars a year than we
Speaker 8: do from China or Canada each which are about thirty
Speaker 8: billion dollars a year, and so there's a lot of
Speaker 8: kind of IT equipment coming through all of those nations.
Speaker 8: Certainly on the high tech end, you do think of
Speaker 8: China or South Korea, Japan. One of the equipment instruction equipment,
Speaker 8: the racks, servers like that could come from China, but
Speaker 8: also from Mexico and Canada. So all of those countries
Speaker 8: will be affected by the tariffs and will certainly affect
Speaker 8: what will be you know, we're talking data center construction
Speaker 8: call us that are fifty sixty billion dollars aspirationally from
Speaker 8: the big companies like Google and Amazon. So these are
Speaker 8: very expensive projects, and the costs could go up three
Speaker 8: to five maybe even more than that.
Speaker 2: Is I'm curious how you look at the US and
Speaker 2: versus China when it comes to this technology. How would
Speaker 2: you characterize the race, the AI race between these two countries.
Speaker 3: Who's winning right now?
Speaker 8: I think the US is winning and we're likely to win.
Speaker 8: And I think the gap between the US and China,
Speaker 8: which today might be six to twelve months, is likely
Speaker 8: to grow over time as the various export restrictions which
Speaker 8: we'll keep China from accessing at scale the chips necessary
Speaker 8: to produce the so called frontier models, they begin to
Speaker 8: have more teeth, and so the US is in the lead.
Speaker 8: The big labs in the US are where all these
Speaker 8: products are being developed, and we need to make sure
Speaker 8: we keep that lead, and if it's not stolen to espionage,
Speaker 8: cybersecurity protections are critical to US labs so we can
Speaker 8: maintain the technological lead that we will develop in the
Speaker 8: United States.
Speaker 6: Wait, what makes you so confident that the US is
Speaker 6: going to hold that's lead here?
Speaker 8: Well, the big input into it are, of course chips,
Speaker 8: and the chips are where the export controls will restrict
Speaker 8: China's access to them. And so over time, again there's
Speaker 8: a lot of cheating and kind of subterfuge on those
Speaker 8: but the US is going to dominate that chip market,
Speaker 8: so that's part of it. We have the best engineers
Speaker 8: in the world here, the big labs open AI, Anthropic, Google,
Speaker 8: Meta by our US companies, and they're likely to continue
Speaker 8: to be at the very frontier of that. So we
Speaker 8: have the best chips, we have the best engineers, we
Speaker 8: have the best culture in which to develop these kinds
Speaker 8: of things, and so I think unless we really mess
Speaker 8: it up, you should maintain a lead, a lead to
Speaker 8: steal perhaps to match we're unlikely to kind of natively
Speaker 8: develop on their own.
Speaker 2: Brad, you've spent four years in the House serving your constituents.
Speaker 2: You also spent quite a bit of time in Washington
Speaker 2: during the Obama administration. Are you in touch at all
Speaker 2: with your former colleagues in the House, And if you are,
Speaker 2: do they get this.
Speaker 8: I am in touch with my former colleagues a lot.
Speaker 8: I go up there, you know, a couple times a
Speaker 8: month off and to talk to them about AI issues,
Speaker 8: and they're not really I think aware of the effect
Speaker 8: of the tariffs on AI and AI itself is just
Speaker 8: becoming an issue on the Hill. Most congressmen are not
Speaker 8: technically literate. They're not engineers. They're more likely businessmen or lawyers,
Speaker 8: teachers perhaps, and so these are very complicated issues. And
Speaker 8: while tariffs I think probably have a lot of people
Speaker 8: agitated on Capitol Hill, the effect of tariffs on AI
Speaker 8: data centers is probably not something that most people are
Speaker 8: yet paying attention to, but they should.
Speaker 6: You know, it's really kind of interesting because we've talked
Speaker 6: so much about like this tech war between the United
Speaker 6: States and China, and like, listening to your conversation, it
Speaker 6: just feels like you sound like we really don't have
Speaker 6: anything to be worried about.
Speaker 3: Is that fair? Am I misreading you?
Speaker 1: Now?
Speaker 8: I think we have something to be worried about because
Speaker 8: we know that they's we'll try to steal our best
Speaker 8: tech techniques.
Speaker 7: Right, so unless our.
Speaker 8: Labs have exquisite cybersecurity, the idea that other nations wouldn't
Speaker 8: steal our best models. We know, for example, that Chinese
Speaker 8: espionage in the defense sector is pervasive.
Speaker 3: Righttimes, espionage that goes both ways. Right.
Speaker 8: To be fair, absolutely, we have more to lose when
Speaker 8: you when you have the exquisite technology you have a
Speaker 8: lot more to lose by people stealing it, right, they're
Speaker 8: trying to get it from you.
Speaker 6: So then do you think something like deep seek in
Speaker 6: your view, I mean from all assessments so far, it
Speaker 6: just sounds like Shohn is figuring this out and maybe
Speaker 6: they can do you know, AI models in a much
Speaker 6: more productive energy efficient, you know, less expensive way. So
Speaker 6: it does sound like there's expertise there as well.
Speaker 7: Oh, there's incredible expertise.
Speaker 8: You know, universities like ching Wa or Peaking or among
Speaker 8: the best world. Chinese engineering culture is extraordinary. They're turning
Speaker 8: out many more STEM graduates per year than we are.
Speaker 8: So I don't underestimate what the Chinese can do. But
Speaker 8: I think most people believe that there would have been
Speaker 8: no Deep Seek without say a chat GPT. They used
Speaker 8: American models to so called distill. You know, they're probably
Speaker 8: hearing things in San Francisco dinner parties that get back
Speaker 8: to China about how to do things techniques. So I
Speaker 8: think America is still the leader, but again we have
Speaker 8: to safeguard it by building data centers, by turning out engineers,
Speaker 8: by securing our models that we do develop here, and
Speaker 8: making sure that these export controls, you really do take
Speaker 8: effect so that the Chinese can't import the top Nvidia chips.
Speaker 8: They're so essential to making frontier models, so we have
Speaker 8: to be wary. But except I think we need to
Speaker 8: realize that the US has a lead and that our
Speaker 8: job is to secure it and make sure that nobody
Speaker 8: could catch us.
Speaker 2: Hey, Brad, I want to take a hard turn here,
Speaker 2: just because we have you on the program. I want
Speaker 2: to tap into your expertise, not just on AI and tariffs,
Speaker 2: but also on politics. Curious what you you know, because
Speaker 2: you're still in touch with your former colleague in the House,
Speaker 2: the Democratic Party. According to many polls, I'm going to
Speaker 2: just cite one here, but this is the March NBC
Speaker 2: News national poll, the Democratic Party reaching all time low
Speaker 2: and popularity That was in the middle of last month.
Speaker 2: What are Democrats supposed to do right now? What do
Speaker 2: you think they should do well?
Speaker 7: I think we need to reorient.
Speaker 8: I've been advocating for that for some years now that
Speaker 8: we've lost our way, that kind of the progressive message
Speaker 8: no longer resonates with most people, doesn't seem to address
Speaker 8: their most important concerns, and so we do have to
Speaker 8: get back in touch.
Speaker 7: With our roots, which is a party of the working.
Speaker 8: Class, and realize that people are struggling to raise their
Speaker 8: families not only economically, but in a culture that many
Speaker 8: of them seem they think is quite poisonous to them.
Speaker 8: That there's a massive gap between the elites of this
Speaker 8: country and the rest of the nation, and that the
Speaker 8: Democrats are too.
Speaker 7: Often the party of the elite class.
Speaker 8: Who could dominate the commanding heights of media sometimes or politics,
Speaker 8: are not enough to win elections. And so those are
Speaker 8: all things we have to do.
Speaker 2: Who's the one person who you think can do that.
Speaker 8: I'm hoping that Keen Jeffries can do that, right who's
Speaker 8: the leader in the House, and that he seems to
Speaker 8: be very confident, very able. I hope as he can
Speaker 8: do it, you know, like Pete Buda judge, There'll be
Speaker 8: some interesting people run for president in the next election
Speaker 8: who I think realize the need for.
Speaker 7: A new message and hopefully they can offer that.
Speaker 6: Hey, just because your background is so cool and interesting
Speaker 6: and you were General Counsel of the Army during the
Speaker 6: Obama administration under Secretary of the Army too, just got
Speaker 6: about thirty forty seconds the alleged or what seemed to
Speaker 6: be was the use of signal and to have a
Speaker 6: chat what seemed to be a breach of security by
Speaker 6: the Trump administration. Any your level of understanding on how
Speaker 6: this all works, What's how bad was that?
Speaker 3: I guess I want to ask you, and I think
Speaker 3: it was bad.
Speaker 8: You can understand it's very easy right to use signal
Speaker 8: as opposed to secure lines. You have to be in
Speaker 8: a skiff or in some other kind of places like that.
Speaker 8: It's totally unacceptable. When I was at the highest ranks
Speaker 8: of d D under Secretary of the Defense, even working
Speaker 8: with Ash Carter, there the idea that you would use
Speaker 8: private email or signal. I mean, it was so forbidden
Speaker 8: right that you would certainly have an investigation and likely
Speaker 8: be fired. So it's it was folly for them to
Speaker 8: do that.
Speaker 3: All right, listen, run out of time.
Speaker 6: Hopefully we can come back to you because we feel
Speaker 6: like we could really talk.
Speaker 3: They let us go along with you, Brad, They let
Speaker 3: us go along, like can we go more? Can we
Speaker 3: get more?
Speaker 9: Bred?
Speaker 6: Carson, thank you so much, co founder and president of
Speaker 6: Americans for Responsible Innovation, joining us from Tulsa, Oklahoma.
Speaker 3: Former Congressman too, former Congressman.
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Speaker 3: We turn out to the healthcare world.
Speaker 6: First up, the US Department of Health and Human Services
Speaker 6: started dismissing workers early this morning, carrying out Secretary Robert F.
Speaker 3: Kennedy Junior's goal to shrink the agency.
Speaker 6: New The layoffs align with a plan to eliminate ten
Speaker 6: thousand employees from the agency's workforce, which will reduce the
Speaker 6: agency staff from eighty two thousand employees to about sixty
Speaker 6: two thousand workers tim.
Speaker 3: So that's quite a haircut.
Speaker 2: Meantime, as we continue our focus on tariffs, the President
Speaker 2: is planning to impose tariffs on pharmaceuticals, which could raise prices,
Speaker 2: lead to shortages, and strain healthcare providers. The tariffs, Carol
Speaker 2: would particularly affect generics.
Speaker 6: Yeah, so there's a lot that we are thinking about watching,
Speaker 6: and so too is our team. We're going to bring
Speaker 6: in two members of our healthcare team Bloomberg News health
Speaker 6: reporter Madison Muller excuse me, along with Bloomberg senior pharmaceutical
Speaker 6: Alisam Fazzelli, both here in studio. So Medisine, let me
Speaker 6: start with you. We are thinking about what's happening in
Speaker 6: Washington and what this all means. How are you guys
Speaker 6: and what Sam to weigh into. But let me start
Speaker 6: with you, Medisine, like, how are you thinking about what's
Speaker 6: happening in Washington and how it impacts the space that
Speaker 6: you report on day in and day out.
Speaker 10: Yeah, I mean these changes are huge and sweeping, and
Speaker 10: I think we're still grappling with the impacts and who's
Speaker 10: affected and how this is going to affect the industry
Speaker 10: is and the industry is grappling with that right now too.
Speaker 10: I mean we are still like information is trickling in
Speaker 10: still as we're trying to figure out which divisions are
Speaker 10: being cut, who's being laid off, exactly what it is
Speaker 10: being impacted, and so that's something that's like the information
Speaker 10: is still actively coming in.
Speaker 2: What's the relationship, Madison, with the government, public health people
Speaker 2: who work in the government and then the private sector
Speaker 2: and the development of drugs that ultimately get put into
Speaker 2: the pipeline and approved years later. What do we know
Speaker 2: about that relationship and how one affects the other.
Speaker 10: I mean their critical they work together in research, in
Speaker 10: drug approvals, drug development, like the government is so important in.
Speaker 11: All of that.
Speaker 10: Obviously, the FDA, the US Food and Drug Administration, is
Speaker 10: viewed as sort of the gold standard regulatory agency for
Speaker 10: approving medications in the world, and a lot of other
Speaker 10: countries look to the FDA.
Speaker 9: The FDA is usually the first to approve drugs.
Speaker 10: Americans are typically the first to get access to new
Speaker 10: innovative medications. It happens more quickly here, and so I think,
Speaker 10: you know, other countries, other regulators are also looking at
Speaker 10: what's happening in the FDA, you know, in the US
Speaker 10: and at the FDA and thinking how does this impact
Speaker 10: US as well?
Speaker 9: Companies.
Speaker 10: We have companies this week that are you know, have
Speaker 10: PADUA dates, that are expecting drug approvals, and that's that
Speaker 10: is a sort of an expected drug approval window. And
Speaker 10: Sam could probably speak to this more, but we we
Speaker 10: sort of use that to to gauge when drug approvals
Speaker 10: are going to happen. We'll see, We'll see what happens
Speaker 10: with those it's kind of all up in the area.
Speaker 11: Now.
Speaker 6: It's just this stuff that we just take for granted, right,
Speaker 6: that it's just going to work, because it's just the
Speaker 6: world that we've lived in, grown up in, and seen
Speaker 6: for multiple generations.
Speaker 3: Sam.
Speaker 6: I thought about when we were going to have this
Speaker 6: conversation with the two of you. How many times throughout
Speaker 6: COVID we reached out to you and I would listen
Speaker 6: to you early in the morning, you know, with either
Speaker 6: our surveillance team or other teams. But like, how are
Speaker 6: you thinking about what you're seeing happen in government and
Speaker 6: what it might mean for us in terms of healthcare
Speaker 6: in the United States?
Speaker 7: Oh, how long do you have?
Speaker 3: We got a little bit of time we can hang
Speaker 3: but thinking like, right, these things that we take for granted.
Speaker 12: HHS the Health and Human Services which is run by
Speaker 12: RFK Junior. It runs quite a lot of these important institutions,
Speaker 12: or at least decides a budget, et cetera. So the
Speaker 12: CMS centers for Medica services, so that includes Medicaid, Medicare,
Speaker 12: and medicine stepping in any time you fancy, right y, Yeah,
Speaker 12: you've got the FDA, which we've just been talking about,
Speaker 12: and you've also got the CDC et cetera. So pretty
Speaker 12: much the health of the nation is in the hands
Speaker 12: of this institution and they have to decide whether they
Speaker 12: want to continue to support vaccinations and be, for example,
Speaker 12: very positive about saying you got to go and get
Speaker 12: your vaccines and not say but it's a personal choice
Speaker 12: because vaccines.
Speaker 7: Don't save lives.
Speaker 12: I've said that this morning also, vaccinations saved lives.
Speaker 7: You've got to get it in the arms.
Speaker 12: If only eighty percent of people take you do you
Speaker 12: remember her immunity.
Speaker 3: And yeah, yeah, termally for measles.
Speaker 12: That's critical, which is why you see these pockets.
Speaker 3: Sam.
Speaker 2: You spend you're here visiting us in New York, which
Speaker 2: we love. You're usually in London, you spend a lot
Speaker 2: of time in France. You have this global view, as
Speaker 2: Madison said, the FDA is the gold standard for approvals.
Speaker 2: Does the world have to look somewhere else? Does it
Speaker 2: have to look to the NHS? Does it have to
Speaker 2: look to another regulatory body?
Speaker 12: Now I think I'll come back to you with the
Speaker 12: word uncertainty.
Speaker 7: I don't know. I don't think so much.
Speaker 3: Is there an institution out there that is akin to.
Speaker 12: The European Medicines Agency, the MHRA in the UK, they
Speaker 12: are all great. MHR is one that does its own assessments,
Speaker 12: and the Europeans tend to or at least and maybe
Speaker 12: the UK also tend to rely on the depth of
Speaker 12: work that the FDA does. The FDA gets literally rolls
Speaker 12: up its sleeves and looks at raw data and makes
Speaker 12: its own analysis.
Speaker 7: Then the companies present.
Speaker 3: That is so interesting, So come on back.
Speaker 6: In medicine, like I do think about like collaboration right
Speaker 6: on a global scale, what typically happens. I mean, again,
Speaker 6: these are things that I don't think anybody ever thinks about,
Speaker 6: but I'm assuming that there is data sharing.
Speaker 3: Especially when it comes to important medications and so on.
Speaker 10: Yeah, and I mean even with vaccines like you were
Speaker 10: talking about there, we've seen some back and forth of
Speaker 10: there are global regulators and health experts that meet to
Speaker 10: decide on what the flu vaccines will be for the season.
Speaker 10: And we saw some pullback with the US whether or
Speaker 10: not to attend this meeting, which has happened you know,
Speaker 10: every season for I don't know how many years, A
Speaker 10: long time and so yeah, decades, and so it's there
Speaker 10: is so much collaboration that goes into it, and you
Speaker 10: know whether or not the US is going to be
Speaker 10: participating in that going forward is a question right now
Speaker 10: because we don't even know who's left at the agency
Speaker 10: is quite frankly at this point.
Speaker 12: So we did have that uncertainty. Yeah, and at least
Speaker 12: a little silver lining is that they did decide. They
Speaker 12: did for line with what the who said. They looked
Speaker 12: at their view and so we now know what we're
Speaker 12: all hopefully going to get for our flu vaccine this
Speaker 12: coming winter. So things do happen, and the FDA, let's
Speaker 12: face it, it's causing major uncertainty. You look at the
Speaker 12: share prices for biotech companies, farmer companies, they're all fully farmer.
Speaker 12: On top of it, we've got this Terry Fisher, which
Speaker 12: I'm sure we'll talk about. The interesting thing, of course,
Speaker 12: is that the FDA isn't infallible. They have done things
Speaker 12: that we've all both questioned in the past five to
Speaker 12: ten years. However, it causes uncertainty. We don't know what
Speaker 12: shape this FDA is going to be when it comes
Speaker 12: back to life.
Speaker 6: And this is what's just one thing I wanted to
Speaker 6: bring up to be fair, I think there are some
Speaker 6: that would say, with certain drug approvals or certainly for
Speaker 6: testing for people who maybe have no other choices, Like,
Speaker 6: there are things that could be better, and I just
Speaker 6: I'm assuming that you both would agree that there are
Speaker 6: some improvements that you could make in this department. It
Speaker 6: just feels like things are being done in an uncertain way,
Speaker 6: in an uncomfortable way, that it's not necessarily helpful.
Speaker 10: Right, And I think the part of the problem is,
Speaker 10: I mean, RFK has said and this administration has said
Speaker 10: that obviously these cuts and sort of restructuring is a priority,
Speaker 10: and RFK has laid out restructuring for HHS, but the
Speaker 10: bigger picture of what exactly they're trying to do here
Speaker 10: is not clear, and I don't think that that has
Speaker 10: been communicated to the public, not to us, not to people,
Speaker 10: you know, staffers at these agencies.
Speaker 9: So people are just kind of like, what's going on.
Speaker 2: We're going to talk about the tariff issue in just
Speaker 2: a minute, but I want to get one more question
Speaker 2: into both of you before that.
Speaker 3: Madison, you forgot what we're supposed to talk about.
Speaker 2: Yeah, I know you did, And we're going to get
Speaker 2: back there because I teased it. So we have to Madison.
Speaker 2: You went to the JP Morgan Healthcare conference in San
Speaker 2: Francisco middle of January. You came back here and you
Speaker 2: told us there was this optimism about M and A.
Speaker 2: There was optimism despite the fact that URFK was coming in.
Speaker 2: Fast forward to yesterday, Canter Fitzgerald biotech analysts slammed the
Speaker 2: leadership of RFK, calling on the Trump administration to reevaluate
Speaker 2: his role after this top vaccine official stepped down. This
Speaker 2: is Canter Fitzgerald, this is Howard Lutnix Firm that we're
Speaker 2: talking about the Commerce secretary. Is that optimism still there?
Speaker 10: I mean that was a really striking comment, and I
Speaker 10: think departure from what we've seen in sort of these
Speaker 10: more like soft commons soft criticism. I think people are
Speaker 10: being really careful with what they're saying publicly, and they're
Speaker 10: not saying that they're not optimistic anymore. But there are
Speaker 10: concerns about what the greater plan is and what's happening
Speaker 10: obviously at HHS, what's happening with tariffs, and I think
Speaker 10: that some of the power and influence that these companies
Speaker 10: and trade organizations and I'm talking about pharmaceutical companies have
Speaker 10: had in the past is being tested, and you know
Speaker 10: they are. They thought that they were going to you know,
Speaker 10: be talking about the Inflation Reduction Act and IRA and
Speaker 10: drug pricing with the administration, and that has not been
Speaker 10: the priority so far. And you know, I think this
Speaker 10: this administration is moving fast and.
Speaker 9: The companies and are sort of scrambling to keep up. Grow.
Speaker 3: No, I'm curious what you're hearing from my global companies.
Speaker 12: The problem with biotech is is more than just this
Speaker 12: recent issue. Every it's been what four years, every JP
Speaker 12: organ I felt just a little bit of a twinge
Speaker 12: of up to MusM and you come back and things
Speaker 12: fall apart. The reality here is that this is this
Speaker 12: is the peak of uncertainty at the minute. Maybe maybe
Speaker 12: it's the peak of uncertainty. Let's let's see.
Speaker 2: Okay, let's get to tariffs in a couple of minutes
Speaker 2: that we have left Madison. You wrote about it, Sam,
Speaker 2: you were quoted in the piece you've done research, Sam
Speaker 2: on this. Excuse me different, Sam, That's okay, but you
Speaker 2: still study.
Speaker 3: I'm like getting Sam's tomorrow four o'clock. What do we
Speaker 3: have to know about the way generics could be affected
Speaker 3: with this?
Speaker 12: Yeah? So the reason generics are particularly at risk is
Speaker 12: that they have their little margin. They price low, like
Speaker 12: big farmer companies have got a lot of profit, the
Speaker 12: prices are high, they can usually eat the tariffs and
Speaker 12: not put the prices up, where as generics. You know,
Speaker 12: the whole point of a generic is that you end
Speaker 12: up getting some of these drugs eventually for cents on
Speaker 12: the dollar per pill, and once you get hit by
Speaker 12: twenty five an increase in your basic cost of goods
Speaker 12: so to you know, your rwal material or your active
Speaker 12: ingredient that goes into it, then it eats your margin,
Speaker 12: so you can't help but pass that price increase on,
Speaker 12: Whereas in the world of large farma, with more expensive,
Speaker 12: more highly valued branded drugs, you can absorb some of that.
Speaker 12: It does get your EPs hit, but nowhere near a
Speaker 12: BMW or a Mercedes bent with having a EPs potential
Speaker 12: forecasts maybe two or three percent, depending on how they're
Speaker 12: calculating their transfer pricing, et cetera. And then something gets
Speaker 12: manufactured in Ireland gets transferred here, so they're exposed, but
Speaker 12: not nowhere near as much as the generics.
Speaker 3: I am curious.
Speaker 6: Just one last final question that you know you guys
Speaker 6: are talking to companies, people in the industry, and I
Speaker 6: just think about the stuff that's coming from government.
Speaker 3: Let me ask you first, Sam, I.
Speaker 6: Mean, are people able to even companies able to access
Speaker 6: the White House, get to the administration find out what
Speaker 6: going on? Are they getting I know there's a lot
Speaker 6: of uncertainty. Are they getting any information?
Speaker 3: What's coming down?
Speaker 12: Trips to golf courses and I think they've been a
Speaker 12: good few dinners. I think there is communication. The problem
Speaker 12: is you can be communicated, but the direction changes the
Speaker 12: next day, or there is a YF No there isn't
Speaker 12: that if some will be exempted, no, they won't be.
Speaker 12: You know, it's very hard to plan. However, all the
Speaker 12: companies are really taking it in this right. Yeah.
Speaker 6: I do get a little nervous about We've talked about
Speaker 6: companies cutting back on like Capex, but you wonder how
Speaker 6: much that might potentially slow down some R and D
Speaker 6: of just not wondering how the system is going to
Speaker 6: work or not work.
Speaker 3: God, this is I think my favorite moment of the day.
Speaker 3: Thank you say that to everyone. I will, I don't know,
Speaker 3: I will a problem.
Speaker 6: No, no, oh, I don't say that to everyone, but
Speaker 6: I will tell everyone, you guys, thank you so much.
Speaker 6: I really appreciate the important story, important to the country.
Speaker 6: Bloomberg News health reporter Madison Muller, along with Bloomberg News
Speaker 6: senior pharmaceutical Analystsam Fazzelli, don't go back to your.
Speaker 12: How long are you staying with us until Thursday?
Speaker 3: Okay, we'll get you back.
Speaker 9: Thank god, we're here for tariffs.
Speaker 3: Rock stars, truly, truly, so appreciate it.
Speaker 13: Mac.
Speaker 3: I'll bet you let me drive. Oh no, no, no no,
Speaker 3: this is not a twenty who's.
Speaker 9: Going to drug alay?
Speaker 3: Please, I'll do travel great, I want to drive.
Speaker 12: It's a good question.
Speaker 11: This is the drive to the clothes now plunks for music,
Speaker 11: we'll drive down on Bloomberg Radio.
Speaker 6: All right, everybody just got about eighteen minutes to go
Speaker 6: until we wrap up the trading day on this Tuesday,
Speaker 6: April Fool's Day. First, is it Carols first trading day
Speaker 6: of the second quarter April Fools?
Speaker 3: No, it really is. We're often running.
Speaker 2: Listen as long as it's not the Friday the thirteenth,
Speaker 2: and you make me say that word just decophobia. Yeah,
Speaker 2: then I think we're all good.
Speaker 6: You know Friday, you know, March theteenth, was a Friday
Speaker 6: of twenty twenty.
Speaker 3: That was like the last time we had Guess in studio. Yeah,
Speaker 3: well more than five years ago at this point. Lots
Speaker 3: of amazing. Well what.
Speaker 2: I'm trying to make a segue to, like the markets,
Speaker 2: but I just can't do.
Speaker 3: It, So I don't even know. Sometimes you just got
Speaker 3: to go.
Speaker 2: All right, Let's bring in Ross Mayfield, Investment Strategy analyst.
Speaker 2: I had the barred private wealth management. He joins us
Speaker 2: from Louisville, Kentucky, the S and P five hundred today
Speaker 2: kind of searching for direction, Ross, I want to get
Speaker 2: your take on not just today's trade, but kind of
Speaker 2: how things look in the near future, given the uncertainty
Speaker 2: out of Washington, d C.
Speaker 3: What's on your radar?
Speaker 13: Yeah, I mean you're right, like, if we're looking for
Speaker 13: a catalyst today, you're out of luck because of the
Speaker 13: potential that tomorrow could could be. You know, we don't
Speaker 13: know if we'll get the kind of certainty of clarity
Speaker 13: that investors, business owners, consumers are hoping for, but it
Speaker 13: leaves kind of today in the wind a little bit.
Speaker 13: The thing that I'm thinking about mostly is that this
Speaker 13: sell off looks viable to me. Presuming we don't enter
Speaker 13: a recession. I don't think any of the fundamentals suggests
Speaker 13: around the precipice of a recession. But if this uncertainty persists,
Speaker 13: you know, businesses and consumers can only hold out for
Speaker 13: so long, so we could well enter a recession. But
Speaker 13: I don't think any of the fundamentals are suggesting it.
Speaker 2: Now, what are those fundamentals that you're citing here, Because
Speaker 2: you know, for every Ross Mayfield, I could go out
Speaker 2: and find somebody who says I'm pulling back Right now,
Speaker 2: I'm really cautious about what's going on. The consumer sentiment
Speaker 2: data has me concerned.
Speaker 3: Yeah, I mean it's a good point.
Speaker 13: I wouldn't argue that we're in boom times or anything
Speaker 13: like that, but I think the hard data and the
Speaker 13: soft data are diverging a bit. So you have stuff
Speaker 13: like initial claims for unemployment insurance still hyper low. I mean,
Speaker 13: we're still adding jobs month on month month. You know,
Speaker 13: real income is up, industrial production is up. You know,
Speaker 13: even something like manufacturing PMI today, which wasn't a blowout
Speaker 13: number anything to get overly excited about, also is in
Speaker 13: signaling recession. The soft data, the sentiment data, the CEO
Speaker 13: survey data is miserable.
Speaker 3: But we've seen post COVID that that hard and.
Speaker 13: Soft have diverged at times, and particularly in twenty three
Speaker 13: and twenty four, the hard data went out, the consumer
Speaker 13: sentiment data was not a useful indicator. So I don't
Speaker 13: think that it's nothing. But I want to keep on
Speaker 13: the hard data as well, and if that starts to
Speaker 13: confirm how miserable everyone is, then we can we can
Speaker 13: start to talk about a recession or a real downturn.
Speaker 6: How hard is it to put money to work in
Speaker 6: this environment, especially if it's new money?
Speaker 3: Which do you wait? Do you put it in.
Speaker 6: Cash or cash like investments at this point and just
Speaker 6: kind of wait for some more clarity or what do
Speaker 6: you do?
Speaker 12: No?
Speaker 3: I think I think this is a great time to invest.
Speaker 13: I mean, if you wait for clarity or certainty in
Speaker 13: the market, you know more often than not you're going
Speaker 13: to be left behind.
Speaker 7: So we know that.
Speaker 13: Investing in these big spikes embarishedness, whether you look at
Speaker 13: the II or the AII survey have been very good indicators.
Speaker 13: Sentiment is totally flushed here if you look at investing
Speaker 13: at spikes and policy uncertainty, great forward returns from there?
Speaker 13: Could it be choppy? Could it be you know, the
Speaker 13: next couple of weeks or next couple of quarters, even.
Speaker 3: Look look ugly.
Speaker 13: Absolutely, we have a lot to work through on the
Speaker 13: policy front. But if you look at year plus out,
Speaker 13: I think this is a great time to put money
Speaker 13: to work, and you know, stocks are on sale.
Speaker 3: All of this wait on whold evaluation can hold on?
Speaker 2: How can you say stocks are on sale when pe
Speaker 2: ratios for a lot of people are still you know,
Speaker 2: the in the S and P five hundred pee ratios
Speaker 2: for a lot of the companies in there are above
Speaker 2: historical norms.
Speaker 13: Well, if you look at like the S and P
Speaker 13: equal weight, right, so that's like the good representation of
Speaker 13: the average stock. It's pretty much at its ten twelve
Speaker 13: year average. Obviously, some of the big tech companies and
Speaker 13: growth year companies, you know, they have extended valuations, but
Speaker 13: they've had extended valuations for ten, fifteen years, twenty years,
Speaker 13: and it hasn't been a reliable indicator on those types
Speaker 13: of stocks. So you're right, valuations are certainly not the
Speaker 13: things screaming by here. It's more about to me about
Speaker 13: sentiment and uncertainty. But I think relative to the last
Speaker 13: six months. You're obviously look at stocks on sale, and
Speaker 13: presumably if we get the earnings growth that's being forecast
Speaker 13: right now, I think it'll look like a deal a
Speaker 13: year from now.
Speaker 6: All right, So you did say this is a good
Speaker 6: time to invest. How much can you drill down and
Speaker 6: tell us kind of where you would put new money
Speaker 6: or just put any money to work.
Speaker 3: Yeah, it's a great question.
Speaker 13: I mean, I think you look at what kind of
Speaker 13: sector or asset class leadership has been. I mean, I
Speaker 13: know most of our clients just anecdotally are underweight Europe
Speaker 13: and International at this point. I think that that trade
Speaker 13: has plenty of room to run. I think there are
Speaker 13: some real structural catalyst there. I'm not willing to go
Speaker 13: all in, but I think that US investors are probably
Speaker 13: way underweight international at this point after fifteen years of disappointment.
Speaker 13: So I think leaning into that, particularly in Europe is
Speaker 13: a good idea. And then leadership in the US. I mean, again,
Speaker 13: this is partially why I'm not inclined to think we're
Speaker 13: on the precipice of a recession. When you see things
Speaker 13: like financials and industrials and energy acting so well. So
Speaker 13: I would lean high quality, and I would stick large
Speaker 13: cap over small cap given the rate backdrop. But I
Speaker 13: would still look to good values in kind of pro
Speaker 13: cyclical sectors that are acting well here. And I think
Speaker 13: those financials are a place where I think really look good,
Speaker 13: not super terrif exposed, still have a regulatory or a
Speaker 13: deregulation tailwind behind them, and then are just doing good
Speaker 13: business right now.
Speaker 7: So that's the kind of stuff.
Speaker 3: I would look for.
Speaker 13: I would lean away from getting too defensive at this
Speaker 13: point in time.
Speaker 3: What doesn't look good, well, tech still.
Speaker 13: Doesn't look very good. I mean it depends on your
Speaker 13: time rise. And this is how we talk to our
Speaker 13: clients about it. It's like, if you have a five
Speaker 13: plus your time rise, and then I would be scooping
Speaker 13: up big tech and AI adjacent names and just riding
Speaker 13: out these these soft patches.
Speaker 3: But if you have a.
Speaker 13: Three to six month time frame, okay, they look broken.
Speaker 3: I just want to make sure.
Speaker 2: So Ross, I think, how do you know that those
Speaker 2: big tech companies are going to stay dominant for the
Speaker 2: next three to five years? For me, just the deep
Speaker 2: Seek news earlier this year I think made a lot
Speaker 2: of people reconsider the sustainability there.
Speaker 3: Definitely.
Speaker 13: It definitely calls into question the hundreds of billions that
Speaker 13: are being spent on AI infrastructure. But I do think
Speaker 13: that these companies are largely very fundamentally sound.
Speaker 11: One.
Speaker 13: So, if you're looking at like the dot com bubble
Speaker 13: comp most of these companies are really.
Speaker 3: Cash rich, low debt, not all the mag seven.
Speaker 13: It's not a monolith by any means. But you have
Speaker 13: these huge companies, You have these wide motes around their
Speaker 13: core businesses, and then they just have so much capital
Speaker 13: to play with, and when there's small starts, they tend
Speaker 13: to just buy them up. So I think that they're
Speaker 13: pretty defensible here. And I you know, again, if I
Speaker 13: had a three to five year plus time horizon, I
Speaker 13: would be grabbing most of these names and not thinking
Speaker 13: twice about it.
Speaker 6: All Right, we're gonna leave it on that note here, Ross,
Speaker 6: Thank you so much. Ross Mayfield. He is investment strategy
Speaker 6: and Alystoffert Baird Private Wealth Management.
Speaker 3: Joining us from Louisville, Louisville, Louisville, Louisville. Come on, Carol, Kentucky, Louisville.
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