1 00:00:00,120 --> 00:00:02,440 Speaker 1: The future may not be clear, but our commitment is 2 00:00:02,560 --> 00:00:04,400 Speaker 1: so when you sit with an advisor at Merrill Lynch, 3 00:00:04,519 --> 00:00:07,160 Speaker 1: we'll put your interests first. Visit mL dot com and 4 00:00:07,240 --> 00:00:09,600 Speaker 1: learn more about Merrill Lynch. An affiliated Bank of America, 5 00:00:09,760 --> 00:00:12,239 Speaker 1: Mary Lynch makes available products and services offered by Merrill Lynch. 6 00:00:12,240 --> 00:00:14,600 Speaker 1: Pierce Veteran Smith Incorporated or Register Broker Dealer remember s 7 00:00:14,640 --> 00:00:20,400 Speaker 1: I PC. This is Masters in Business with Barry Riddholts 8 00:00:20,560 --> 00:00:24,560 Speaker 1: on Boomberg Radio. This week. On the podcast, I have 9 00:00:24,680 --> 00:00:28,360 Speaker 1: Ken Fisher and just a really quick story. The first 10 00:00:28,400 --> 00:00:31,760 Speaker 1: time I had Ken Fisher as a guest. Uh. We 11 00:00:31,800 --> 00:00:35,720 Speaker 1: had a conversation that was quite fascinating. I'm intrigued by 12 00:00:36,080 --> 00:00:40,000 Speaker 1: the business he's built and how successful he's been operating 13 00:00:40,040 --> 00:00:42,600 Speaker 1: in a way that the rest of the world to 14 00:00:42,680 --> 00:00:47,559 Speaker 1: finance just hasn't and he really has created what is 15 00:00:47,600 --> 00:00:51,720 Speaker 1: a unique path to build a very successful firm. After 16 00:00:51,760 --> 00:00:54,200 Speaker 1: we finished the interview, we walked over and we I 17 00:00:54,200 --> 00:00:57,920 Speaker 1: think we were in the green room um of the 18 00:00:58,000 --> 00:01:01,520 Speaker 1: television area. He had a somewhere else he was heading 19 00:01:01,520 --> 00:01:05,000 Speaker 1: to or appearing, and we started talking. After we talked 20 00:01:05,000 --> 00:01:08,320 Speaker 1: for ninety minutes last time, and that ten minute or 21 00:01:08,400 --> 00:01:11,200 Speaker 1: so conversation made it clear to me, Gee, there's a 22 00:01:11,200 --> 00:01:12,840 Speaker 1: ton of stuff I didn't get to. I want to 23 00:01:12,840 --> 00:01:15,640 Speaker 1: talk to you about his business, how he grew, with 24 00:01:15,760 --> 00:01:18,720 Speaker 1: the things he did, and so when I saw he 25 00:01:18,760 --> 00:01:21,560 Speaker 1: was coming back into town. I think it's about uh 26 00:01:21,600 --> 00:01:24,560 Speaker 1: two years since our last interview, UM, I jumped at 27 00:01:24,560 --> 00:01:27,920 Speaker 1: the opportunity to interview him again. This is a very 28 00:01:28,000 --> 00:01:32,400 Speaker 1: much a business focused conversation. We talked about markets and 29 00:01:32,400 --> 00:01:36,320 Speaker 1: stocks and everything else, and his love of annuities, but 30 00:01:36,360 --> 00:01:40,240 Speaker 1: we also talked about how he built his business. UH, 31 00:01:40,319 --> 00:01:43,600 Speaker 1: and I found that absolutely fascinating and I think you 32 00:01:43,840 --> 00:01:47,920 Speaker 1: will also, So, with no further ado, my conversation with 33 00:01:48,000 --> 00:01:54,360 Speaker 1: Ken Fisher. This is Master's in Business with Barry Ridholtz 34 00:01:54,400 --> 00:01:59,920 Speaker 1: on Boomberg Radio. My special guest today is Ken Fisher. UH. 35 00:02:00,040 --> 00:02:03,400 Speaker 1: He is the founder and chief executive of Fisher Investments, 36 00:02:03,400 --> 00:02:08,840 Speaker 1: which manages just under eighty billion dollars. Ken has been 37 00:02:08,880 --> 00:02:12,000 Speaker 1: named one of the twenty five most influential figures in 38 00:02:12,040 --> 00:02:15,600 Speaker 1: the financial industry. He's the author of a dozen or 39 00:02:15,639 --> 00:02:18,760 Speaker 1: so books, half of which have been New York Times 40 00:02:18,760 --> 00:02:21,960 Speaker 1: best sellers. He was named I Think you were Number 41 00:02:22,000 --> 00:02:25,240 Speaker 1: two twenty five on the Forbes four hundred list. Is that, Uh, 42 00:02:26,880 --> 00:02:29,640 Speaker 1: that's good because normally under two hundreds, No, it doesn't 43 00:02:29,680 --> 00:02:33,240 Speaker 1: count you. You're not even median, really, so median meet medians, 44 00:02:33,320 --> 00:02:38,120 Speaker 1: you know, two hundreds. So I was always below average. Well, 45 00:02:38,200 --> 00:02:40,960 Speaker 1: Ken Fisher, welcome back to Bloomberg, you know, and and 46 00:02:40,960 --> 00:02:42,840 Speaker 1: and it's tough to be above average. It is tough 47 00:02:42,880 --> 00:02:45,959 Speaker 1: to be above everybody in money matter. So let's jump 48 00:02:46,080 --> 00:02:51,000 Speaker 1: right into the concept of building a business based on 49 00:02:51,040 --> 00:02:53,600 Speaker 1: the dying art of stock picking. And the first question 50 00:02:53,720 --> 00:02:57,400 Speaker 1: is is it truly a dying art? You know, I 51 00:02:57,440 --> 00:03:00,880 Speaker 1: think stock picking was always very tough. I don't think 52 00:03:00,880 --> 00:03:03,320 Speaker 1: it's any tougher than it ever was. I think there's 53 00:03:03,360 --> 00:03:06,079 Speaker 1: more light being shown on that. Now. That's a really 54 00:03:06,200 --> 00:03:09,919 Speaker 1: interesting fact is that when I was young, a long 55 00:03:09,960 --> 00:03:14,720 Speaker 1: time ago, there was very little, uh sort of data analytics. Uh, 56 00:03:14,919 --> 00:03:18,040 Speaker 1: there was very just think a computerization and all those 57 00:03:18,080 --> 00:03:20,880 Speaker 1: features on how primitive that was in that world then. 58 00:03:21,480 --> 00:03:26,119 Speaker 1: And the I was at an event yesterday and John 59 00:03:26,120 --> 00:03:28,800 Speaker 1: Bogo was speaking, and he was making the point that 60 00:03:28,840 --> 00:03:31,560 Speaker 1: he had actually done analytical work in nineteen sixty one 61 00:03:32,040 --> 00:03:36,920 Speaker 1: showing that average on average active investors lagged uh the market. 62 00:03:37,400 --> 00:03:40,280 Speaker 1: And yet while you could do that analytical work in 63 00:03:40,360 --> 00:03:45,320 Speaker 1: nineteen sixty one. Uh, the public perception of it really 64 00:03:45,520 --> 00:03:48,520 Speaker 1: didn't much exist for a very very long time. And 65 00:03:48,560 --> 00:03:51,520 Speaker 1: he talked to some length about how agonizingly slow that 66 00:03:51,680 --> 00:03:56,080 Speaker 1: was for him. Uh. And yet often things that change 67 00:03:56,080 --> 00:03:58,040 Speaker 1: in the world change like that, where for a long 68 00:03:58,080 --> 00:04:00,760 Speaker 1: time they go nowhere fast and then lowly they start 69 00:04:00,800 --> 00:04:04,880 Speaker 1: getting traction and continue. Um. I don't think countered at 70 00:04:04,920 --> 00:04:08,080 Speaker 1: some people's perception because passive is all the rage right now. 71 00:04:08,360 --> 00:04:13,560 Speaker 1: I don't think active ever disappears. Um. But stock picking 72 00:04:13,600 --> 00:04:15,960 Speaker 1: an active management have always been tough to do and 73 00:04:16,160 --> 00:04:18,960 Speaker 1: succeed at. So a couple of I'm hearing a couple 74 00:04:19,000 --> 00:04:23,279 Speaker 1: of things. First, the analytics are much more readily available 75 00:04:23,360 --> 00:04:26,760 Speaker 1: to anybody who wants to sit down at at Google 76 00:04:26,839 --> 00:04:29,760 Speaker 1: Finance or Bloomberg Terminal and look at the numbers. But 77 00:04:29,880 --> 00:04:34,640 Speaker 1: then you mentioned Jack Boglane. They didn't launch their index 78 00:04:34,680 --> 00:04:38,800 Speaker 1: funds till seventy four, and he describes it as a 79 00:04:38,839 --> 00:04:41,839 Speaker 1: colossal failure at first, that the five years, five years 80 00:04:41,839 --> 00:04:44,640 Speaker 1: of failure, right just did nothing attracted almost no ask 81 00:04:44,920 --> 00:04:47,120 Speaker 1: no I remember that world. I mean, I was, you know, 82 00:04:47,160 --> 00:04:49,359 Speaker 1: I was in this realm of endeavor in those days. 83 00:04:49,440 --> 00:04:53,919 Speaker 1: And I remember that world at the time, and of 84 00:04:53,960 --> 00:04:56,080 Speaker 1: course you know the big cahuna and mutual funds at 85 00:04:56,120 --> 00:04:59,839 Speaker 1: the time with Dreyfuss and uh, yet the war was 86 00:04:59,839 --> 00:05:03,680 Speaker 1: for it different. And I also remember that in those days, 87 00:05:04,040 --> 00:05:07,440 Speaker 1: you know, Forbes big annual issue was its mutual fund special, 88 00:05:07,880 --> 00:05:10,640 Speaker 1: and the mutual fund special had I'm not talking about 89 00:05:10,880 --> 00:05:14,559 Speaker 1: a couple of hundred fund families. They had a couple 90 00:05:14,560 --> 00:05:17,680 Speaker 1: of hundred funds in the mutual fund special because there 91 00:05:17,680 --> 00:05:19,440 Speaker 1: weren't that many mutual funds in the world a where 92 00:05:19,480 --> 00:05:22,680 Speaker 1: there are today. All of this evolution is a slow 93 00:05:22,760 --> 00:05:26,400 Speaker 1: evolution and that's not abnormal that that's that's fascinating the 94 00:05:26,480 --> 00:05:29,280 Speaker 1: fifty five years later. You know the old joke isn't 95 00:05:29,320 --> 00:05:33,159 Speaker 1: only takes only takes a decade to be an overnight sensation. Um, 96 00:05:33,320 --> 00:05:37,680 Speaker 1: so you've built a huge r I A based on 97 00:05:38,120 --> 00:05:41,320 Speaker 1: what I have to think is a somewhat different process 98 00:05:41,440 --> 00:05:46,120 Speaker 1: than many of the larger asset managers build. What what 99 00:05:46,200 --> 00:05:50,880 Speaker 1: makes the ken Fisher approach so unique? When I was young, 100 00:05:50,960 --> 00:05:55,440 Speaker 1: I became very enamored early, very early on in nineteen 101 00:05:56,080 --> 00:06:00,320 Speaker 1: with New Course Steel and New Course Steel New Ork operation, 102 00:06:00,320 --> 00:06:02,719 Speaker 1: the steal manufacturer when it was just starting into steal 103 00:06:03,040 --> 00:06:06,440 Speaker 1: ken Iverson. I came by coincidence to get to know 104 00:06:06,920 --> 00:06:09,119 Speaker 1: and I was very impressed by what he was doing. 105 00:06:09,640 --> 00:06:13,800 Speaker 1: And uh, he taught me that steel production was a 106 00:06:13,839 --> 00:06:16,880 Speaker 1: function of multiple compound yields and if you could keep 107 00:06:16,880 --> 00:06:18,360 Speaker 1: you didn't have to be the best in any one 108 00:06:18,400 --> 00:06:20,039 Speaker 1: of them. You had to have the best combination of 109 00:06:20,080 --> 00:06:23,400 Speaker 1: all of them. And then sounds like a portfolio. Then 110 00:06:23,400 --> 00:06:26,680 Speaker 1: when I studied IBM, I saw that they never ever 111 00:06:26,760 --> 00:06:29,839 Speaker 1: had the best computer. They always had a very good computer, 112 00:06:29,920 --> 00:06:31,640 Speaker 1: but they never ever the best one. But if you 113 00:06:31,680 --> 00:06:34,320 Speaker 1: took all of the pieces of what they did sales 114 00:06:34,720 --> 00:06:37,479 Speaker 1: serve us, all of the pieces together they compounded to 115 00:06:37,520 --> 00:06:41,720 Speaker 1: the best totality for the customer. And what I would 116 00:06:41,760 --> 00:06:44,080 Speaker 1: like to think is that we from the beginning started 117 00:06:44,080 --> 00:06:47,119 Speaker 1: thinking about all of those pieces. So, you know, people 118 00:06:47,120 --> 00:06:48,919 Speaker 1: tend to think of us in terms of our advertising 119 00:06:48,920 --> 00:06:52,440 Speaker 1: because that's what they see. That's a really wrong notion. 120 00:06:52,680 --> 00:06:54,960 Speaker 1: We do a lot of advertising, that's true, but we're 121 00:06:54,960 --> 00:06:57,400 Speaker 1: not actually very good at it as nearly as good 122 00:06:57,400 --> 00:07:00,040 Speaker 1: as I'd like to be. We, on the other and 123 00:07:00,120 --> 00:07:03,599 Speaker 1: are exceptional at service. And people don't have a most 124 00:07:03,600 --> 00:07:05,120 Speaker 1: people in the world don't have a clue about our 125 00:07:05,120 --> 00:07:07,080 Speaker 1: service capabilities. We do all kinds of things in service 126 00:07:07,160 --> 00:07:09,960 Speaker 1: other people don't do, and then we have a good 127 00:07:10,040 --> 00:07:12,360 Speaker 1: give me for instance, or is that like the secret 128 00:07:12,400 --> 00:07:17,080 Speaker 1: source that secrets you know? We We have an elaborate 129 00:07:17,200 --> 00:07:23,680 Speaker 1: array across the English speaking world of UM a variety 130 00:07:23,720 --> 00:07:27,880 Speaker 1: of forms of client only seminars. These are not sales seminars. 131 00:07:27,880 --> 00:07:32,840 Speaker 1: These service seminars for clients and their families that come 132 00:07:32,880 --> 00:07:37,240 Speaker 1: in different types because different people receive information differently, and 133 00:07:37,400 --> 00:07:41,520 Speaker 1: they range from very large ones with five people at 134 00:07:41,520 --> 00:07:45,880 Speaker 1: a crack run by senior people at the firm, providing 135 00:07:45,960 --> 00:07:51,200 Speaker 1: hours literally hours of both couple hours of presentation of 136 00:07:51,880 --> 00:07:55,080 Speaker 1: detailed information as to how we're seeing things and why 137 00:07:55,120 --> 00:07:57,720 Speaker 1: we're thinking this and why we're not thinking that, etcetera, etcetera, 138 00:07:57,720 --> 00:08:01,080 Speaker 1: which include an education component all along with DNA, followed 139 00:08:01,120 --> 00:08:03,320 Speaker 1: by a couple of hours of Q and A now 140 00:08:03,360 --> 00:08:06,360 Speaker 1: all the way down to tiny little events run by 141 00:08:07,320 --> 00:08:10,120 Speaker 1: people who are MN I see tiny little ten twelve people, 142 00:08:10,600 --> 00:08:15,560 Speaker 1: ten TOLF customers and with technical answers being only answering questions. 143 00:08:16,080 --> 00:08:18,160 Speaker 1: Two events that we do to nobody else in the 144 00:08:18,160 --> 00:08:20,880 Speaker 1: world would do where we put you know, twelve twenty 145 00:08:20,920 --> 00:08:23,080 Speaker 1: clients together for a lunch and there's nobody from Fisher 146 00:08:23,080 --> 00:08:25,040 Speaker 1: there at all, and we let them talk about whatever 147 00:08:25,040 --> 00:08:26,480 Speaker 1: they want to talk about, so they can talk about 148 00:08:26,520 --> 00:08:28,920 Speaker 1: us behind their back. Because for a lot of people, 149 00:08:29,040 --> 00:08:32,040 Speaker 1: actually that's the proof of the pudding is being able 150 00:08:32,080 --> 00:08:34,160 Speaker 1: to talk about their advisor behind their back and know 151 00:08:34,320 --> 00:08:36,720 Speaker 1: that the advisor trusts them enough to do that. Therefore 152 00:08:36,760 --> 00:08:39,120 Speaker 1: they have an increased trust level in the advisor. I'm 153 00:08:39,120 --> 00:08:43,079 Speaker 1: Barry Ridhults. You're listening to Masters in Business on Bloomberg Radio. 154 00:08:43,360 --> 00:08:47,239 Speaker 1: My special guest today is Ken Fisher of Fisher Investments, 155 00:08:47,240 --> 00:08:51,640 Speaker 1: a firm that manages just about eighty billion dollars in assets. 156 00:08:52,240 --> 00:08:54,640 Speaker 1: Let's talk a little bit about where we are today 157 00:08:54,640 --> 00:09:00,640 Speaker 1: in the world. It's seventeen for those you listening to 158 00:09:00,679 --> 00:09:04,040 Speaker 1: this far off in the future. Valuations in the US 159 00:09:04,320 --> 00:09:07,840 Speaker 1: have been called high. Interest rates are low, there's not 160 00:09:07,920 --> 00:09:10,240 Speaker 1: a whole lot of inflation, and the Fed has said 161 00:09:10,679 --> 00:09:14,959 Speaker 1: that they're starting a series of rate hikes to normalize 162 00:09:14,960 --> 00:09:19,160 Speaker 1: interest rates. First question is how unusual a set of 163 00:09:19,160 --> 00:09:24,760 Speaker 1: circumstances is the stock market in today? UM I would 164 00:09:24,760 --> 00:09:29,040 Speaker 1: say that the stock market is in its um usual 165 00:09:29,640 --> 00:09:33,360 Speaker 1: unique position. The stock market I went to wait, wait, 166 00:09:33,360 --> 00:09:35,640 Speaker 1: before you go forward, I have to put that in quotes, 167 00:09:36,559 --> 00:09:41,679 Speaker 1: usual unique position. Yeah, the stock market is always full 168 00:09:41,720 --> 00:09:47,160 Speaker 1: of what appears to be morphing into different unique things. 169 00:09:47,200 --> 00:09:50,200 Speaker 1: People are almost always to my opic about the features 170 00:09:50,240 --> 00:09:52,440 Speaker 1: that we confront today that always seem to be so 171 00:09:52,559 --> 00:09:55,679 Speaker 1: different and so unique and so unusual, and in retrospect 172 00:09:55,720 --> 00:09:59,160 Speaker 1: appear not to be when I say retrospect, far retrospect, 173 00:10:00,240 --> 00:10:04,160 Speaker 1: and um, all of the things that you said are 174 00:10:04,240 --> 00:10:08,320 Speaker 1: quite literally correct. Uh, but I don't think that has 175 00:10:08,400 --> 00:10:12,319 Speaker 1: much to do with real fundamentals. So how do the 176 00:10:12,360 --> 00:10:15,480 Speaker 1: fundamentals look here? What do you see at this point 177 00:10:15,640 --> 00:10:19,600 Speaker 1: in in the market cycle. Valuations are high because interest 178 00:10:19,679 --> 00:10:23,520 Speaker 1: rates are low. Uh, they of course important interest rate 179 00:10:23,600 --> 00:10:25,760 Speaker 1: that really matters is the long rate, not the short 180 00:10:25,840 --> 00:10:29,360 Speaker 1: rate so much. And uh, you know, people have been 181 00:10:29,520 --> 00:10:32,000 Speaker 1: forecasting long rates to rise for a long time, and 182 00:10:32,040 --> 00:10:34,680 Speaker 1: they've always been wrong, and they'll be wrong again this year. 183 00:10:35,200 --> 00:10:37,240 Speaker 1: And uh, I mean you can just kind of count 184 00:10:37,240 --> 00:10:38,800 Speaker 1: on them being wrong every ry, you know, every once 185 00:10:38,800 --> 00:10:39,880 Speaker 1: in a while they get to be right for a 186 00:10:39,920 --> 00:10:41,559 Speaker 1: little while before they end up being wrong. But the 187 00:10:41,600 --> 00:10:43,600 Speaker 1: consensus has to be wrong, because that's the market pre 188 00:10:43,640 --> 00:10:46,800 Speaker 1: pricing all widely known information. That's what capital markets theory 189 00:10:46,840 --> 00:10:48,959 Speaker 1: says markets do for a living, and they do it 190 00:10:49,000 --> 00:10:52,200 Speaker 1: pretty well, not perfectly, but pretty well. So valuations in 191 00:10:52,200 --> 00:10:54,600 Speaker 1: the US are stretched. What about I don't think though 192 00:10:55,000 --> 00:10:57,440 Speaker 1: you don't think so. I think valuations are if you 193 00:10:57,480 --> 00:11:01,600 Speaker 1: think of pees. For first of all, I'm getting ready 194 00:11:01,600 --> 00:11:04,439 Speaker 1: for that. He ees have never been predictive, for sure. 195 00:11:05,120 --> 00:11:12,520 Speaker 1: And uh, the Schiller cape pe folk always talk about 196 00:11:13,040 --> 00:11:15,920 Speaker 1: that it's really only intended for ten years down the road, 197 00:11:16,960 --> 00:11:19,439 Speaker 1: but then they apply it almost always to next month. 198 00:11:19,880 --> 00:11:23,200 Speaker 1: And the fact of the matter is that the Schiller 199 00:11:23,360 --> 00:11:26,440 Speaker 1: kpe P has been wrong so long, so many times 200 00:11:26,760 --> 00:11:29,600 Speaker 1: that anyone should know not to use it for any 201 00:11:29,640 --> 00:11:34,040 Speaker 1: kind of even intermediate term timing, and yet people forget that. 202 00:11:34,360 --> 00:11:37,720 Speaker 1: I keep let's stay with k SEK. I totally agree 203 00:11:37,760 --> 00:11:42,200 Speaker 1: with you. I think going back to CAPE has been 204 00:11:42,280 --> 00:11:47,320 Speaker 1: above its long term average for the time. However, as 205 00:11:47,360 --> 00:11:50,400 Speaker 1: Bob Shiller would say, when you buy, if you take 206 00:11:50,400 --> 00:11:54,000 Speaker 1: the average CAPE at fifteen or sixteen, if you're buying 207 00:11:54,040 --> 00:11:58,480 Speaker 1: stocks when you're at above average valuations, your forward expected 208 00:11:58,480 --> 00:12:01,959 Speaker 1: return should be below average. And when you're buying Cape 209 00:12:02,080 --> 00:12:07,120 Speaker 1: at below average PE, your forward expectations should be above average. 210 00:12:07,480 --> 00:12:10,000 Speaker 1: Is that a fair statement the professor makes or do 211 00:12:10,040 --> 00:12:14,360 Speaker 1: you disregard that? I think it totally ignores behavioral realities 212 00:12:14,400 --> 00:12:17,960 Speaker 1: of what humans are. Uh. What the way humans are 213 00:12:18,679 --> 00:12:20,400 Speaker 1: is that if the next ten years are going to 214 00:12:20,480 --> 00:12:22,319 Speaker 1: be lousy, but the next five years are going to 215 00:12:22,360 --> 00:12:25,240 Speaker 1: be great, Uh, people are gonna lose their mind before 216 00:12:25,240 --> 00:12:26,760 Speaker 1: the next five years are over, and then they'll lose 217 00:12:26,800 --> 00:12:30,280 Speaker 1: their mind differently five years after them. Okay, and that's fair. 218 00:12:30,440 --> 00:12:34,280 Speaker 1: And the fact of the matter is that, uh, the 219 00:12:34,360 --> 00:12:37,680 Speaker 1: CAPE has never been good at short term timing, and 220 00:12:37,720 --> 00:12:40,360 Speaker 1: therefore that should have nothing to do with what your 221 00:12:40,400 --> 00:12:46,920 Speaker 1: short term expectations are. And the reality is that a little, 222 00:12:46,920 --> 00:12:49,840 Speaker 1: as I was saying before, if we could say with certainty, 223 00:12:49,840 --> 00:12:51,920 Speaker 1: which of course we cannot, that the market was going 224 00:12:51,920 --> 00:12:54,319 Speaker 1: to be great for the next three or four years, 225 00:12:54,480 --> 00:12:56,600 Speaker 1: people would want to be in it. And the notion 226 00:12:56,640 --> 00:12:58,160 Speaker 1: that I'm going to stay out of the market for 227 00:12:58,200 --> 00:13:00,840 Speaker 1: three or four years while it does rate, or be 228 00:13:00,960 --> 00:13:03,400 Speaker 1: out of the market for three or four years while 229 00:13:03,440 --> 00:13:06,720 Speaker 1: it does great, or suffer three or four years of 230 00:13:06,840 --> 00:13:10,520 Speaker 1: terrible nous. Look at the people that became Perma Bears 231 00:13:10,559 --> 00:13:13,240 Speaker 1: after two thousand seven nine and got totally whips odd 232 00:13:13,840 --> 00:13:16,720 Speaker 1: and in record all the time. I got out No. Eight, 233 00:13:16,840 --> 00:13:19,720 Speaker 1: but I thought people crazy jumping back in in March 234 00:13:19,760 --> 00:13:22,160 Speaker 1: O nine. And I've said on the sidelines for seven 235 00:13:22,240 --> 00:13:24,800 Speaker 1: years that is not a rare state. No, it's it's 236 00:13:24,840 --> 00:13:27,240 Speaker 1: it's more common than not. It's what behavioralism says, people. 237 00:13:27,240 --> 00:13:29,800 Speaker 1: Do you know? So again, I was in the earlier 238 00:13:29,840 --> 00:13:32,800 Speaker 1: segment I mentioned listening to John Bogo yesterday, and I 239 00:13:32,800 --> 00:13:35,160 Speaker 1: admire the man greatly, but he said some things are 240 00:13:35,200 --> 00:13:38,199 Speaker 1: just wrong, such as, uh, well, the first part of 241 00:13:38,360 --> 00:13:40,640 Speaker 1: what he said here was right. He said that one 242 00:13:40,640 --> 00:13:43,000 Speaker 1: of the things that slowed down the growth of passive 243 00:13:43,720 --> 00:13:46,160 Speaker 1: was that the eighties and nineties or two decades back 244 00:13:46,160 --> 00:13:49,439 Speaker 1: to back, with seventeen percent average annuals five hundred returns. 245 00:13:49,559 --> 00:13:52,360 Speaker 1: That seems reasonable, and that's true. And then he said, 246 00:13:52,880 --> 00:13:56,600 Speaker 1: and uh, the average mutual fund did a couple of 247 00:13:56,640 --> 00:13:58,800 Speaker 1: percent worse than the equity mutual fund did a couple 248 00:13:58,840 --> 00:14:01,040 Speaker 1: of percent worse. Not got about fifteen. And he said, 249 00:14:01,040 --> 00:14:04,360 Speaker 1: since investor sounds probable, Yeah, he said, so, since investors 250 00:14:04,360 --> 00:14:07,240 Speaker 1: were getting fifteen, they didn't really care. So much about 251 00:14:07,240 --> 00:14:09,760 Speaker 1: relative returns because the high absolute returns and made him happy. 252 00:14:09,760 --> 00:14:13,720 Speaker 1: All that sounds plausible, but the reality is that that's wrong. 253 00:14:14,120 --> 00:14:16,400 Speaker 1: The reality is they didn't get anything light close to 254 00:14:16,480 --> 00:14:19,960 Speaker 1: fifteen percent because as all the behavioral studies show people 255 00:14:20,000 --> 00:14:22,040 Speaker 1: in and out of all the wrong times and they 256 00:14:22,080 --> 00:14:24,760 Speaker 1: typically get about half the return of the equity funds 257 00:14:25,200 --> 00:14:26,960 Speaker 1: because they end owed him at all the wrong time. 258 00:14:27,320 --> 00:14:31,680 Speaker 1: The dl BAR studies shows people underperform their own investments, 259 00:14:31,720 --> 00:14:35,840 Speaker 1: which on the surface sounds ridiculous, but for your reasons, 260 00:14:35,920 --> 00:14:40,240 Speaker 1: it's normal for behavioral purposes. And so in reality, what 261 00:14:40,360 --> 00:14:42,520 Speaker 1: he said that was wrong is that in that period 262 00:14:42,560 --> 00:14:45,120 Speaker 1: people didn't get returns like our returns to look more 263 00:14:45,160 --> 00:14:49,120 Speaker 1: like seven and they actually switched quite a lot from 264 00:14:49,200 --> 00:14:51,880 Speaker 1: this to that and chase things. And in the mid 265 00:14:51,960 --> 00:14:55,000 Speaker 1: nineties and nine, four and five, before the market took off, 266 00:14:55,080 --> 00:14:57,880 Speaker 1: they get terribly desponded. And it was all that period 267 00:14:57,920 --> 00:15:02,880 Speaker 1: where you know the uh. In UH two, George rowarka 268 00:15:02,920 --> 00:15:05,520 Speaker 1: Bush is running for reelection and he's saying the recessions 269 00:15:05,560 --> 00:15:08,320 Speaker 1: over and people saying, no, it's not, and Bill Clinton 270 00:15:08,360 --> 00:15:11,480 Speaker 1: saying it's the economy stupid. Well, in retrospective recession, was over. 271 00:15:11,840 --> 00:15:15,000 Speaker 1: That's not the way people felt, and people voted with 272 00:15:15,040 --> 00:15:17,920 Speaker 1: the way they felt. And also they invested the way 273 00:15:17,960 --> 00:15:20,200 Speaker 1: they felt. And that's the problem. People invest the way 274 00:15:20,240 --> 00:15:23,240 Speaker 1: they feel, and the way they feel is almost always 275 00:15:23,280 --> 00:15:26,200 Speaker 1: backward looking, and and they in and out at all 276 00:15:26,240 --> 00:15:28,720 Speaker 1: the wrong times, and that generates much more cost than 277 00:15:28,800 --> 00:15:31,240 Speaker 1: anything else. And there's all these studies going back to 278 00:15:31,320 --> 00:15:34,240 Speaker 1: things like dal Bar that are perverse in that they 279 00:15:34,320 --> 00:15:37,240 Speaker 1: show that things like load mutual funds do worse than 280 00:15:37,320 --> 00:15:39,360 Speaker 1: no load mutual funds. But the people that invest in 281 00:15:39,400 --> 00:15:41,480 Speaker 1: the load mutual funds do better than the people invest 282 00:15:41,520 --> 00:15:43,280 Speaker 1: in the no load mutual funds because they feel trapped 283 00:15:43,320 --> 00:15:45,040 Speaker 1: in them, and they hold them much longer, which is 284 00:15:45,120 --> 00:15:47,600 Speaker 1: very perverse, that is, you know. And then and then 285 00:15:47,640 --> 00:15:50,760 Speaker 1: everybody says, I would never do that, And then of 286 00:15:50,880 --> 00:15:54,760 Speaker 1: course that's true for a very small percentage of the population. 287 00:15:54,880 --> 00:15:57,440 Speaker 1: Most people do that. I saw something very recently, and 288 00:15:57,640 --> 00:16:00,200 Speaker 1: I don't I don't want to cite the wrong them 289 00:16:00,240 --> 00:16:03,160 Speaker 1: that wrote it, but they pointed out the difference between 290 00:16:03,400 --> 00:16:08,119 Speaker 1: soft economic data like sentiment and actual hard and economic 291 00:16:08,280 --> 00:16:12,320 Speaker 1: data like GDP seals, etcetera. And they said the gap 292 00:16:12,440 --> 00:16:15,760 Speaker 1: between the sentiment and the reality is the biggest it's 293 00:16:15,800 --> 00:16:18,080 Speaker 1: been as long as you've been tracking such. So another 294 00:16:18,160 --> 00:16:21,280 Speaker 1: way to say that verry that I've become fond of 295 00:16:21,760 --> 00:16:26,840 Speaker 1: is that economic marginality, as taught by Alfred Marshall, marginality 296 00:16:26,960 --> 00:16:31,960 Speaker 1: has been marginalized. Marginality has been marginalized. Yes, the reality 297 00:16:32,040 --> 00:16:37,120 Speaker 1: of economic marginality is that intuitively, an idiot knows that 298 00:16:37,800 --> 00:16:42,600 Speaker 1: the difference between the viability of a loan for a 299 00:16:42,760 --> 00:16:46,320 Speaker 1: CAPEX project at today's interest rates versus half a point 300 00:16:46,440 --> 00:16:49,360 Speaker 1: higher or lower should be immaterial to whether the CAPEX 301 00:16:49,360 --> 00:16:51,240 Speaker 1: project should go forward or not, because if you can't 302 00:16:51,320 --> 00:16:54,160 Speaker 1: justify the return at a half a point higher or 303 00:16:54,240 --> 00:16:55,680 Speaker 1: lower from where we are today, it's got to be 304 00:16:55,720 --> 00:16:59,040 Speaker 1: a pretty lousy project to begin with. And the fact 305 00:16:59,200 --> 00:17:02,680 Speaker 1: is that it really more about what hasn't been marginalized 306 00:17:02,960 --> 00:17:05,360 Speaker 1: is a shift in animal spirits, which is your sentiment point, 307 00:17:05,880 --> 00:17:10,400 Speaker 1: and we really need to find ourselves in a CAPEX 308 00:17:10,480 --> 00:17:15,119 Speaker 1: sense and in all other ways. Uh, moving toward that 309 00:17:15,280 --> 00:17:20,560 Speaker 1: animal spirit that says I'm not afraid because of agency risk, 310 00:17:20,680 --> 00:17:23,240 Speaker 1: which you know after two thousand nine CEO s were 311 00:17:23,280 --> 00:17:28,800 Speaker 1: hunkered down for for agency purposes. I am optimistic that 312 00:17:28,960 --> 00:17:31,920 Speaker 1: this project will work, and I'm going to invest in 313 00:17:32,000 --> 00:17:35,320 Speaker 1: this project and make this improvement for the benefit of 314 00:17:35,720 --> 00:17:40,080 Speaker 1: my customers and the world. And that's really a sentiment issue. 315 00:17:40,119 --> 00:17:43,560 Speaker 1: It's not really uh, interest rates or a quarter point higher, 316 00:17:43,640 --> 00:17:45,880 Speaker 1: So I'm not going to move forward. I'm very rid Helts. 317 00:17:45,960 --> 00:17:49,359 Speaker 1: You're listening to Masters in Business on Bloomberg Radio. My 318 00:17:49,520 --> 00:17:53,040 Speaker 1: guest today is Ken Fisher. He is the executive chairman 319 00:17:53,160 --> 00:17:58,159 Speaker 1: and co chief investment officer of Fisher Investments, a twenty 320 00:17:58,880 --> 00:18:02,919 Speaker 1: person firm manage in just under eighty billion dollars. He's 321 00:18:02,960 --> 00:18:06,080 Speaker 1: the author of a number of best selling books on 322 00:18:06,280 --> 00:18:09,919 Speaker 1: markets and investing. Let's talk a little bit about an 323 00:18:09,960 --> 00:18:14,560 Speaker 1: insurance product that you're pretty vocal about. I keep reading 324 00:18:15,119 --> 00:18:19,480 Speaker 1: why does Ken Fisher hate annuities? That that's an advertisement 325 00:18:19,640 --> 00:18:23,720 Speaker 1: that I've seen online. Tell us about your views of annuities. 326 00:18:25,000 --> 00:18:27,760 Speaker 1: Let's see. Um, let me just say the simple line, 327 00:18:27,800 --> 00:18:33,639 Speaker 1: I hate annuities. Uh uh so why why do you? 328 00:18:33,880 --> 00:18:37,160 Speaker 1: First of all, let's define annuities. For for most people, 329 00:18:37,280 --> 00:18:41,359 Speaker 1: it's a tax deferred products that is sold by insurance 330 00:18:41,400 --> 00:18:49,040 Speaker 1: breakers with a fairly substantial six eight nine commission up 331 00:18:49,119 --> 00:18:52,960 Speaker 1: front that essentially can do more or more than nine 332 00:18:53,000 --> 00:18:59,440 Speaker 1: percentidden and essentially is a rapper around mutual funds, equities, bonds, 333 00:18:59,480 --> 00:19:01,119 Speaker 1: whatever you want to put in there that you can 334 00:19:01,200 --> 00:19:04,240 Speaker 1: go out and purchase from a broker. That is that 335 00:19:04,320 --> 00:19:09,320 Speaker 1: a fair assessment. Annuities are a lot of different things. 336 00:19:09,680 --> 00:19:14,640 Speaker 1: Annuities are a contract of some type that is very complicated, 337 00:19:15,359 --> 00:19:19,360 Speaker 1: almost always that are almost never really understood by the consumer, 338 00:19:19,520 --> 00:19:23,160 Speaker 1: even though they often think they understand them, and they're 339 00:19:23,240 --> 00:19:28,000 Speaker 1: almost always sold on a misleading basis. When I say that, 340 00:19:28,320 --> 00:19:31,359 Speaker 1: when you actually take the contract and go through it 341 00:19:31,520 --> 00:19:36,040 Speaker 1: with the customer and and then call the insurance the 342 00:19:36,119 --> 00:19:38,119 Speaker 1: number that's associated with the contract, where you get a 343 00:19:38,119 --> 00:19:41,399 Speaker 1: service person, not salesperson, and you say not does this 344 00:19:41,560 --> 00:19:43,600 Speaker 1: mean this? Or does it mean that? And then they 345 00:19:43,680 --> 00:19:46,119 Speaker 1: tell you what it really means. The customer is almost 346 00:19:46,160 --> 00:19:49,520 Speaker 1: always appalled, and they in that regard I say, they're 347 00:19:49,520 --> 00:19:52,320 Speaker 1: always almost always sold on a misleading basis. So you know, 348 00:19:52,400 --> 00:19:54,560 Speaker 1: the sales guy will say something like, well where else 349 00:19:54,640 --> 00:19:58,280 Speaker 1: can you get us guaranteed six percent return? Except for 350 00:19:58,359 --> 00:20:00,200 Speaker 1: that's going to be a return of their cap will 351 00:20:00,240 --> 00:20:02,639 Speaker 1: not a return of not an income return. It's not 352 00:20:02,720 --> 00:20:05,000 Speaker 1: a return like we think of in the investing world. 353 00:20:05,320 --> 00:20:07,359 Speaker 1: It's a return of their capital, which anybody can do 354 00:20:07,440 --> 00:20:10,320 Speaker 1: for themselves just by taking their principle, putting it wherever 355 00:20:10,520 --> 00:20:13,680 Speaker 1: they want, and taking x percent of it out. On 356 00:20:13,800 --> 00:20:16,040 Speaker 1: that basis, you can have a thirty return until you 357 00:20:16,119 --> 00:20:18,479 Speaker 1: run out of money. You just return your capital, right, 358 00:20:19,280 --> 00:20:22,000 Speaker 1: So so what about invested in nothing and have a 359 00:20:22,480 --> 00:20:25,520 Speaker 1: percent return? One of the more interesting aspects of the 360 00:20:25,760 --> 00:20:29,800 Speaker 1: change in fiduciary rules, which is UM at this point, 361 00:20:29,800 --> 00:20:32,240 Speaker 1: I assume everybody knows, but on the off case that 362 00:20:32,359 --> 00:20:35,919 Speaker 1: we're not, people aren't as tracking this as closely as 363 00:20:35,960 --> 00:20:40,240 Speaker 1: we are. Uh. The last administration changed the rule for 364 00:20:40,840 --> 00:20:44,399 Speaker 1: governing retirement plans and that could include four oh one 365 00:20:44,480 --> 00:20:46,920 Speaker 1: ks and four three b s and I risen things 366 00:20:46,960 --> 00:20:50,080 Speaker 1: like that and said that the advisor has to treat 367 00:20:50,119 --> 00:20:53,800 Speaker 1: the client UM has to operate in the client's best interest, 368 00:20:54,280 --> 00:20:57,159 Speaker 1: which the current administration is not sure they want to 369 00:20:57,280 --> 00:21:01,560 Speaker 1: continue that rule. But since the fiduciary rule chains were announced, 370 00:21:02,200 --> 00:21:05,919 Speaker 1: many of the big insurance insurance companies that underwrite annuities 371 00:21:06,240 --> 00:21:09,600 Speaker 1: have seen their sales fall off a cliff, especially with 372 00:21:09,720 --> 00:21:12,760 Speaker 1: people who service four own case and four three b s. 373 00:21:13,200 --> 00:21:15,640 Speaker 1: So what what is your view of the fiduciary rule 374 00:21:15,720 --> 00:21:19,000 Speaker 1: and what that might mean for for annuity sales. I 375 00:21:19,119 --> 00:21:24,840 Speaker 1: think it's a stupid rule with great intent when you 376 00:21:24,920 --> 00:21:28,800 Speaker 1: actually look at the devil in details. Devil in the 377 00:21:28,880 --> 00:21:33,240 Speaker 1: details is that it's largely fraudulent in that. Uh, you 378 00:21:33,359 --> 00:21:38,879 Speaker 1: get the vice exemption best interest contract exemption, which has 379 00:21:38,960 --> 00:21:42,119 Speaker 1: some specific wording that you're allowed to kind of bury 380 00:21:42,200 --> 00:21:45,440 Speaker 1: in a big complicated contract. So the customer, you know, 381 00:21:45,600 --> 00:21:49,200 Speaker 1: it's like sign here, signed there. Uh, you know, I 382 00:21:49,280 --> 00:21:51,399 Speaker 1: got your best interests at heart, but the government makes 383 00:21:51,440 --> 00:21:54,040 Speaker 1: me have you do all this paperwork. So a cleaner, 384 00:21:54,119 --> 00:21:57,080 Speaker 1: simpler best interest client and the sentence would have been 385 00:21:57,160 --> 00:22:00,800 Speaker 1: better a be there's no governmental enforcement of this. What's, however, zero. 386 00:22:01,640 --> 00:22:05,840 Speaker 1: The only company compliance enforcing these sort of things, whether 387 00:22:06,000 --> 00:22:08,080 Speaker 1: the insurance I doubt that they'll even know, they haven't 388 00:22:08,119 --> 00:22:12,840 Speaker 1: known in the past. Thirdly, uh, the only enforcement is 389 00:22:12,920 --> 00:22:16,520 Speaker 1: a claimate's lawyer. This is a This is set up 390 00:22:16,560 --> 00:22:20,000 Speaker 1: for PIABA, the Public Investor's Arbitration Bar Association, of which 391 00:22:20,000 --> 00:22:22,040 Speaker 1: I don't have a problem with PIABA, but the reality 392 00:22:22,160 --> 00:22:25,280 Speaker 1: is it is the only enforcement arm of this. There 393 00:22:25,440 --> 00:22:28,160 Speaker 1: is no part where the government comes in at any 394 00:22:28,200 --> 00:22:33,560 Speaker 1: point in time and says you company X have violated 395 00:22:33,600 --> 00:22:39,119 Speaker 1: the fiduciary standard. Therefore, and therefore we are doing something 396 00:22:39,400 --> 00:22:43,720 Speaker 1: to you that doesn't happen under this law. This law, 397 00:22:43,840 --> 00:22:47,639 Speaker 1: in my opinion, toothless Yes, well, no, no, I wouldn't 398 00:22:47,680 --> 00:22:49,159 Speaker 1: go that far. It's kind of like it's got a 399 00:22:49,320 --> 00:22:52,200 Speaker 1: rotted tooth dangling out the side of an otherwise empty mouth, 400 00:22:52,520 --> 00:22:55,280 Speaker 1: and that rotted tooth is the is the claimate's bar. 401 00:22:56,480 --> 00:22:59,480 Speaker 1: When this was announced, we saw a ton of motion 402 00:22:59,680 --> 00:23:03,560 Speaker 1: from everyone from Bank America, Mery Lynch down to small 403 00:23:03,640 --> 00:23:06,879 Speaker 1: one person's shops and having to adjust to the change 404 00:23:07,080 --> 00:23:10,600 Speaker 1: in advisories because I don't think they actually understand. I 405 00:23:10,720 --> 00:23:13,760 Speaker 1: think you'll which you'll see if it goes forward, is 406 00:23:13,880 --> 00:23:18,240 Speaker 1: them moving that way at first and then slowly backsliding 407 00:23:18,560 --> 00:23:21,600 Speaker 1: into what they've traditionally done, which is to do a 408 00:23:21,680 --> 00:23:25,600 Speaker 1: word that's otherwise profane on the radio to their customers. Okay, 409 00:23:28,720 --> 00:23:31,440 Speaker 1: I'm sure that that won't make it through the sensors, 410 00:23:31,560 --> 00:23:34,280 Speaker 1: But let me ask you one more things backwardly, I mean, 411 00:23:34,320 --> 00:23:37,840 Speaker 1: people have done things backwardly forever. Get these sensors to 412 00:23:37,920 --> 00:23:40,080 Speaker 1: lighten up a little bit. So what do you do 413 00:23:40,240 --> 00:23:43,760 Speaker 1: when a new prospective client comes to Fisher Investments and 414 00:23:43,840 --> 00:23:46,880 Speaker 1: you're looking at their portfolio and you say, what is this, Oh, 415 00:23:47,000 --> 00:23:49,600 Speaker 1: that's an annuity I bought some years ago. Are you 416 00:23:49,800 --> 00:23:52,240 Speaker 1: just stuck with that? Or can you work your way 417 00:23:52,280 --> 00:23:55,840 Speaker 1: out of that without it being an egregious problem for 418 00:23:55,920 --> 00:23:59,320 Speaker 1: the investor. Again, an annuity is a specific contract, so 419 00:23:59,600 --> 00:24:01,239 Speaker 1: they're not a blanket rule. You can say, but all 420 00:24:01,240 --> 00:24:05,159 Speaker 1: annuities but blanket ruletor can say is that we have 421 00:24:05,480 --> 00:24:08,440 Speaker 1: our people who are specialized in this, So we'll look 422 00:24:08,480 --> 00:24:11,720 Speaker 1: at that contract to take the customer and call the 423 00:24:11,800 --> 00:24:15,280 Speaker 1: number associated with that, go through it with the clients 424 00:24:15,320 --> 00:24:18,000 Speaker 1: so they really understand what the contract is, and if 425 00:24:18,400 --> 00:24:21,879 Speaker 1: they want to get out, we will pay the fee 426 00:24:22,480 --> 00:24:25,400 Speaker 1: that's the penalty fee to get them out under certain circumstances, 427 00:24:25,480 --> 00:24:30,040 Speaker 1: which they then amortize rolling forward against their costs of 428 00:24:30,119 --> 00:24:33,040 Speaker 1: being a client with us, and the I think we're 429 00:24:33,040 --> 00:24:34,680 Speaker 1: the only people in the world to do that. What 430 00:24:34,800 --> 00:24:37,639 Speaker 1: we do is perfectly legal, and it's legal in all 431 00:24:37,720 --> 00:24:41,520 Speaker 1: fifty stage. Well, there's a lot of annuity sales people 432 00:24:41,560 --> 00:24:43,399 Speaker 1: that don't think it should be legal. We actually get 433 00:24:43,480 --> 00:24:47,720 Speaker 1: questions periodically from UH state insurance commissioners that don't actually 434 00:24:47,800 --> 00:24:49,680 Speaker 1: understand what we do, and they say, how can you 435 00:24:49,760 --> 00:24:53,120 Speaker 1: be doing this? Know? How can how can? We don't 436 00:24:53,160 --> 00:24:55,119 Speaker 1: say things like that to them, but they say, you know, 437 00:24:55,200 --> 00:24:56,600 Speaker 1: how can you be doing this in our state? And 438 00:24:56,640 --> 00:24:59,119 Speaker 1: then we explain it to them and then they say okay, Um, 439 00:24:59,480 --> 00:25:00,959 Speaker 1: but they don't out at first because they don't really 440 00:25:01,000 --> 00:25:02,800 Speaker 1: know what we're doing. And until they know what they're doing, 441 00:25:03,240 --> 00:25:07,640 Speaker 1: why why wouldn't they want to ask? And uh? Then Um. 442 00:25:08,720 --> 00:25:12,760 Speaker 1: The reality is that, as I said earlier, it is 443 00:25:12,840 --> 00:25:17,879 Speaker 1: almost never true that these people customers really understand what 444 00:25:17,960 --> 00:25:21,640 Speaker 1: the annuity contract does correctly, and they're almost always appalled 445 00:25:21,680 --> 00:25:24,360 Speaker 1: when they truly find out. And while there are exceptions 446 00:25:24,400 --> 00:25:28,720 Speaker 1: to that, they're rare and um, and I'm delighted for 447 00:25:28,840 --> 00:25:32,520 Speaker 1: the exceptions, but almost always, whatever it was they thought 448 00:25:32,600 --> 00:25:35,320 Speaker 1: they were going to do with the annuity, there's a 449 00:25:35,400 --> 00:25:38,640 Speaker 1: better way to do by owning principal underlying securities. Let's 450 00:25:38,680 --> 00:25:41,879 Speaker 1: do that a different way. Fundamentally, what the insurance company 451 00:25:41,960 --> 00:25:45,440 Speaker 1: does is takes the money, invest in a bunch of 452 00:25:45,480 --> 00:25:48,600 Speaker 1: securities with a lot of fees put on top, and 453 00:25:48,680 --> 00:25:51,679 Speaker 1: somehow you're supposed to get this magical, spectacular return. Well, 454 00:25:51,720 --> 00:25:53,919 Speaker 1: if that's the case, why aren't these the greatest active 455 00:25:53,960 --> 00:25:56,960 Speaker 1: managers in the world, and why haven't they actually come 456 00:25:57,040 --> 00:25:58,800 Speaker 1: to take all of the business to pass. It does 457 00:25:58,840 --> 00:26:01,280 Speaker 1: away from all the passive people because they're so great 458 00:26:01,280 --> 00:26:03,639 Speaker 1: at doing this stuff that they can put these complicated, 459 00:26:03,920 --> 00:26:07,040 Speaker 1: big fees on doing the same things that other people 460 00:26:07,080 --> 00:26:09,960 Speaker 1: would do. The fact is that's all nonsense. The fact 461 00:26:10,040 --> 00:26:13,200 Speaker 1: of the matter is they buy principle underlying securities. The 462 00:26:13,280 --> 00:26:17,440 Speaker 1: people can accomplish the same end result if done correctly 463 00:26:17,520 --> 00:26:20,320 Speaker 1: with principal underlying security, and have it be much cheaper. 464 00:26:20,640 --> 00:26:23,480 Speaker 1: I'm very rid Halts. You're listening to Masters in Business 465 00:26:23,560 --> 00:26:27,600 Speaker 1: on Bloomberg Radio. My special guest today is Ken Fisher. 466 00:26:28,119 --> 00:26:32,920 Speaker 1: He is an author, raconteur, preserver of redwood forests, and 467 00:26:33,600 --> 00:26:38,560 Speaker 1: perhaps most famously, a well regarded stock picker. Tell us 468 00:26:38,600 --> 00:26:44,200 Speaker 1: about the process that you use to select stocks. It's 469 00:26:44,200 --> 00:26:48,040 Speaker 1: called lousy. Um. I'm not really a good stock picker, 470 00:26:48,560 --> 00:26:50,680 Speaker 1: so I thought of as a stock picker in some ways, 471 00:26:50,720 --> 00:26:53,840 Speaker 1: but I'm really not. What I'm good at doing is 472 00:26:53,960 --> 00:26:56,160 Speaker 1: sort of like somebody that goes fishing, and I figure 473 00:26:56,200 --> 00:26:59,920 Speaker 1: out a good pond of fishing, as opposed to act 474 00:27:00,000 --> 00:27:04,440 Speaker 1: actually being good at getting the fish specifically. So if 475 00:27:04,520 --> 00:27:07,040 Speaker 1: you can pick the right pond to fishing, it helps 476 00:27:07,040 --> 00:27:09,960 Speaker 1: a lot. That's half the battle, isn't it. Uh So 477 00:27:10,680 --> 00:27:13,480 Speaker 1: I would describe myself as a top down guy, not 478 00:27:13,600 --> 00:27:15,560 Speaker 1: a bottom up guy. And most of the world kind 479 00:27:15,600 --> 00:27:18,280 Speaker 1: of sees itself at bottom up. Explain the difference between 480 00:27:18,320 --> 00:27:21,320 Speaker 1: the two four people who may not be uh insiders 481 00:27:21,480 --> 00:27:23,920 Speaker 1: understanding that. So the way the way I would start 482 00:27:24,000 --> 00:27:25,920 Speaker 1: looking at the world is I would say I'm managing 483 00:27:26,040 --> 00:27:29,840 Speaker 1: against this part of the world here and get geographically 484 00:27:30,480 --> 00:27:33,240 Speaker 1: or BBSMP five could be the world could be, if 485 00:27:33,480 --> 00:27:36,639 Speaker 1: could be what you picked the benchmark, and then I 486 00:27:36,760 --> 00:27:39,359 Speaker 1: say it's made up of this stuff in these proportions. 487 00:27:39,880 --> 00:27:41,760 Speaker 1: And then I think these are the parts of the 488 00:27:41,800 --> 00:27:44,520 Speaker 1: world in those proportions that would do better or worse. 489 00:27:44,800 --> 00:27:47,040 Speaker 1: And I'm gonna want to overweight here and underweight there, 490 00:27:47,359 --> 00:27:49,960 Speaker 1: and that would be both by things like geography, but 491 00:27:50,040 --> 00:27:53,600 Speaker 1: also things like sector and things like size and things 492 00:27:53,680 --> 00:27:56,280 Speaker 1: like valuation. I'm not a constant guy to want to 493 00:27:56,280 --> 00:27:58,120 Speaker 1: be a value guy or a constant guy to want 494 00:27:58,119 --> 00:27:59,800 Speaker 1: to be a growth guy, because sometimes the one does 495 00:27:59,840 --> 00:28:02,320 Speaker 1: better and the others on smalltock to better, big stock 496 00:28:02,400 --> 00:28:05,320 Speaker 1: to better, sometimes foreign stocks to better, sometimes US stocks 497 00:28:05,359 --> 00:28:07,320 Speaker 1: do better, on and on and on, and so I 498 00:28:07,400 --> 00:28:10,760 Speaker 1: winnow that down and that leads me to what I 499 00:28:10,960 --> 00:28:12,920 Speaker 1: was earlier kind of referring to as the ponds you 500 00:28:13,000 --> 00:28:16,880 Speaker 1: want to be in. And then I say, so, now 501 00:28:17,040 --> 00:28:20,080 Speaker 1: I need to own if I'm going to be overweight 502 00:28:20,119 --> 00:28:22,000 Speaker 1: to this and underweight to that and this and that, 503 00:28:22,240 --> 00:28:24,840 Speaker 1: then I need to own, you know, five out of 504 00:28:24,880 --> 00:28:28,040 Speaker 1: these seventeen. And then I'm going to look at those 505 00:28:28,119 --> 00:28:31,639 Speaker 1: seventeen and I need to own three of these twenty 506 00:28:32,160 --> 00:28:34,760 Speaker 1: and and that's where the stock picking comes. It's extracting. 507 00:28:34,800 --> 00:28:37,840 Speaker 1: The actual stock picking is extracting those from the ones 508 00:28:37,920 --> 00:28:40,000 Speaker 1: that fit the criteria. But by the time you get 509 00:28:40,040 --> 00:28:42,760 Speaker 1: down to selecting individual stocks, you've already made a number 510 00:28:42,760 --> 00:28:47,920 Speaker 1: of decisions in terms of valuation, capitalization, location, sector, et ceteras, 511 00:28:47,920 --> 00:28:52,480 Speaker 1: your allocation decisions. It's almost the individual stock is almost irrelevant, 512 00:28:52,520 --> 00:28:55,440 Speaker 1: and not completely, but it's a it's it comes towards 513 00:28:55,440 --> 00:28:58,480 Speaker 1: the end of the process, and then that decision comes 514 00:28:58,960 --> 00:29:01,040 Speaker 1: to where I'm prepared to throw out some of the 515 00:29:01,120 --> 00:29:03,440 Speaker 1: baby with the bathwater. So I look at the at 516 00:29:03,520 --> 00:29:05,440 Speaker 1: the at the at the universe of those and then 517 00:29:05,480 --> 00:29:07,080 Speaker 1: I say, okay, I want to throw out the ones 518 00:29:07,160 --> 00:29:09,960 Speaker 1: that have like funny accounting, because I always distrust funny. 519 00:29:10,000 --> 00:29:12,880 Speaker 1: It's true, Uh that doesn't always mean that they're bad, 520 00:29:13,120 --> 00:29:15,200 Speaker 1: but it means they're different, and I want the category. 521 00:29:15,320 --> 00:29:17,560 Speaker 1: So if they do things, if they're weird for the category, 522 00:29:17,960 --> 00:29:19,440 Speaker 1: I'm going to throw them out too. They might be 523 00:29:19,520 --> 00:29:22,520 Speaker 1: exceptionally good, but I'm prepared to throw out exceptionally good. 524 00:29:22,760 --> 00:29:26,880 Speaker 1: Funny accounting always means increased risk of something untoward happen. 525 00:29:27,120 --> 00:29:29,719 Speaker 1: But it's not just funny accounting. That's right, but it's 526 00:29:29,760 --> 00:29:34,200 Speaker 1: not just that. It's also if it's in a sector, 527 00:29:34,360 --> 00:29:37,920 Speaker 1: but it doesn't really seem like it's the sector, and 528 00:29:38,000 --> 00:29:41,080 Speaker 1: it doesn't act like the sector. I want that quality, 529 00:29:41,600 --> 00:29:43,680 Speaker 1: so so I throw a bunch out. And then I 530 00:29:43,760 --> 00:29:46,520 Speaker 1: look among the others for what I call competitive advantages, 531 00:29:46,560 --> 00:29:49,200 Speaker 1: and competitive advantages of things like low cost production, high 532 00:29:49,240 --> 00:29:53,400 Speaker 1: relative market share, uh superior distribution system. And then I 533 00:29:53,520 --> 00:29:57,760 Speaker 1: look to see as the management awhere truly of their 534 00:29:57,800 --> 00:30:00,440 Speaker 1: relative competitive position, and are they doing things to try 535 00:30:00,440 --> 00:30:04,320 Speaker 1: to maximize that? And I am a fan of uh 536 00:30:04,880 --> 00:30:08,440 Speaker 1: Mr Buffett's line that you know when and I'm not 537 00:30:08,560 --> 00:30:11,800 Speaker 1: sure that I'm paraphrasing him perfectly, but that when a 538 00:30:11,880 --> 00:30:15,400 Speaker 1: bad management meets a great business model or vice versa, 539 00:30:15,480 --> 00:30:17,920 Speaker 1: it's a management reputation. It's likely to change, not the 540 00:30:18,000 --> 00:30:22,280 Speaker 1: business great. Great businessmen don't usually turn allousy business into 541 00:30:22,320 --> 00:30:24,320 Speaker 1: a great one. It could happen, but it's not the 542 00:30:24,400 --> 00:30:27,600 Speaker 1: usual thing. And lousy businessmen don't usually destroy a great 543 00:30:27,600 --> 00:30:31,560 Speaker 1: business model. Um, it does happen, but it's not the usual. Usually, 544 00:30:32,680 --> 00:30:35,840 Speaker 1: if lousy businessmen become the head of a great business model, 545 00:30:35,920 --> 00:30:39,960 Speaker 1: they've become seen as great soon. Um And uh so 546 00:30:40,200 --> 00:30:42,680 Speaker 1: I'm really looking for those attributes. And then it finally 547 00:30:42,760 --> 00:30:46,720 Speaker 1: comes the valuation feature. Last. I've never been a believer 548 00:30:46,840 --> 00:30:50,040 Speaker 1: that valuations are predictive of much of anything. Uh And 549 00:30:50,200 --> 00:30:53,880 Speaker 1: there's a time and fact where I want high valuations 550 00:30:54,040 --> 00:30:57,680 Speaker 1: because that's the time where people are paying up for equality, 551 00:30:58,160 --> 00:31:01,360 Speaker 1: for perception. That that's the ninth nineties verses the nineteen 552 00:31:01,400 --> 00:31:05,160 Speaker 1: seventies at last year, okay, and last year. Well, I 553 00:31:05,280 --> 00:31:08,920 Speaker 1: use the nineties as an example. Expensive stocks became more 554 00:31:08,960 --> 00:31:12,120 Speaker 1: expensive and you had great returns. In the seventies stocks 555 00:31:12,160 --> 00:31:13,760 Speaker 1: were cheap and they got a whole lot cheaper. So 556 00:31:14,040 --> 00:31:17,200 Speaker 1: so a standard thing that happens. You know, one of 557 00:31:17,240 --> 00:31:19,280 Speaker 1: the things that's important in thinking about the market in 558 00:31:19,400 --> 00:31:23,120 Speaker 1: general is you know, people say, and it's not true 559 00:31:23,280 --> 00:31:28,680 Speaker 1: that markets hate uncertainty. What markets hate is rising uncertainty. 560 00:31:28,920 --> 00:31:32,480 Speaker 1: Markets like high levels of uncertainty that are falling. If 561 00:31:32,520 --> 00:31:35,800 Speaker 1: you've got high levels of uncertainty that are falling, you're 562 00:31:35,880 --> 00:31:38,640 Speaker 1: moving to lower levels of uncertainty, and markets like that 563 00:31:38,680 --> 00:31:42,680 Speaker 1: a lot. So when that happens, and you give me 564 00:31:42,760 --> 00:31:44,520 Speaker 1: it for instance, on that, I have to wrap my 565 00:31:44,600 --> 00:31:46,560 Speaker 1: head around that. When when do we have high levels 566 00:31:46,600 --> 00:31:50,280 Speaker 1: of uncertainty for a falling Last year, it's a perfect example. 567 00:31:50,480 --> 00:31:52,520 Speaker 1: At the beginning of the year, you've got sixteen Republicans 568 00:31:52,600 --> 00:31:55,240 Speaker 1: running for president. Nobody knows who's gonna nomine you're gonna be. 569 00:31:55,320 --> 00:31:57,440 Speaker 1: You've got five people running on the Democratic side. Most 570 00:31:57,440 --> 00:31:59,640 Speaker 1: people think Hillary Clinton will be the nominee. Then you 571 00:31:59,720 --> 00:32:01,680 Speaker 1: don't know which one of those will win. You got 572 00:32:01,760 --> 00:32:04,080 Speaker 1: a Brickxit out coming up. Nobody knows what will happen, 573 00:32:04,120 --> 00:32:05,760 Speaker 1: but it scared people a lot. There was a lot 574 00:32:05,800 --> 00:32:08,000 Speaker 1: of the beginning of the year with the correction that occurred, 575 00:32:08,120 --> 00:32:10,600 Speaker 1: a lot of fears about China implosion. You go on 576 00:32:10,720 --> 00:32:12,320 Speaker 1: and on with uncertain the beginning of last year. By 577 00:32:12,360 --> 00:32:13,600 Speaker 1: the time you get to the end of last year, 578 00:32:13,680 --> 00:32:16,440 Speaker 1: all that's gone away. We got a winner, well, but 579 00:32:16,680 --> 00:32:18,680 Speaker 1: you have that the political uncertain who goes away, but 580 00:32:18,760 --> 00:32:22,560 Speaker 1: you still have completely but it falls, it falls. Isn't 581 00:32:22,560 --> 00:32:25,280 Speaker 1: the way completely? When Mr Trump gets elected, we still 582 00:32:25,360 --> 00:32:30,000 Speaker 1: have but it's less than we had before. Is there 583 00:32:30,040 --> 00:32:32,000 Speaker 1: going to be a trade war? Is there gonna be 584 00:32:32,320 --> 00:32:34,680 Speaker 1: the what's gonna happen to the dollar? Are we going 585 00:32:34,760 --> 00:32:36,720 Speaker 1: to have still in a process of falling uncertainty? And 586 00:32:36,760 --> 00:32:38,520 Speaker 1: I don't want to get into, you know, fighting about 587 00:32:38,600 --> 00:32:41,560 Speaker 1: right now, but but we've gone through a period of 588 00:32:41,600 --> 00:32:43,680 Speaker 1: falling uncertainty and we're going to continue this year into 589 00:32:43,720 --> 00:32:45,680 Speaker 1: more falling uncertainty, and that's why we have a bull market. 590 00:32:45,920 --> 00:32:49,040 Speaker 1: But in that as you have falling uncertainty, you typically 591 00:32:49,240 --> 00:32:52,960 Speaker 1: extend forecasts further out into the future. And as you 592 00:32:53,080 --> 00:32:55,520 Speaker 1: extend those forecasts further out of the future, people become 593 00:32:55,560 --> 00:32:59,320 Speaker 1: more growth oriented. Huh, that's interesting. Let's let's let me 594 00:32:59,360 --> 00:33:02,440 Speaker 1: shift gears you a little bit. We keep reading that 595 00:33:02,680 --> 00:33:05,840 Speaker 1: private companies want to stay private for longer, and if 596 00:33:05,880 --> 00:33:08,600 Speaker 1: you look at the universe, at least in the US 597 00:33:09,080 --> 00:33:13,000 Speaker 1: of number of public companies. There were seven thousand companies 598 00:33:13,240 --> 00:33:16,560 Speaker 1: that were publicly traded twenty years ago. Now that's down 599 00:33:16,680 --> 00:33:19,959 Speaker 1: to four thousand. The joke is the Wilshire five thousand 600 00:33:20,080 --> 00:33:22,560 Speaker 1: is now I think thirty seven hundreds something like that. 601 00:33:23,200 --> 00:33:25,920 Speaker 1: What does this mean for the process of stock selection? 602 00:33:26,000 --> 00:33:29,040 Speaker 1: What does this mean? What does this say about the 603 00:33:29,200 --> 00:33:34,640 Speaker 1: environment publicly traded companies find themselves in? Well, I think 604 00:33:34,680 --> 00:33:37,600 Speaker 1: the tour are somewhat separate issues. The thinking of it 605 00:33:37,760 --> 00:33:42,520 Speaker 1: from the public company's viewpoint. Uh Sarbanes Oxley increased the 606 00:33:42,600 --> 00:33:46,120 Speaker 1: costs for small companies going public. The I p O 607 00:33:46,280 --> 00:33:49,600 Speaker 1: market is not been buoyant because, you know, in the 608 00:33:49,680 --> 00:33:53,480 Speaker 1: John Templeton phraseology, bowl markets are born on pessimism, growing skepticism, 609 00:33:53,560 --> 00:33:56,800 Speaker 1: ature and optimism and die of euphoria. And we clearly 610 00:33:56,920 --> 00:33:59,080 Speaker 1: have had a very long bowl market. That's been what 611 00:33:59,160 --> 00:34:01,440 Speaker 1: I've referred to for a long time is the most 612 00:34:01,480 --> 00:34:03,920 Speaker 1: joyless bowl market in history, because we haven't had those 613 00:34:04,000 --> 00:34:07,040 Speaker 1: multiple years of very high end That's a great phrase. 614 00:34:07,120 --> 00:34:10,359 Speaker 1: The most joyless bowl market I've been calling Jos, I've 615 00:34:10,360 --> 00:34:12,600 Speaker 1: been calling it the most hated bowl market. But joy 616 00:34:12,680 --> 00:34:15,880 Speaker 1: less is a different components. It's clearly been a bowl market. 617 00:34:16,200 --> 00:34:18,520 Speaker 1: It's clearly been long, and it's been joyless. And what 618 00:34:18,680 --> 00:34:20,680 Speaker 1: that means is we haven't gotten to the exuberance part. 619 00:34:20,760 --> 00:34:23,840 Speaker 1: And it's usually in that optimism transitioning to exuberance that 620 00:34:23,880 --> 00:34:25,279 Speaker 1: you get high levels of I p O. You know, 621 00:34:25,360 --> 00:34:28,840 Speaker 1: in my book, I wrote a lot about how I 622 00:34:28,960 --> 00:34:32,000 Speaker 1: p O means it's probably overpriced. And the fact of 623 00:34:32,080 --> 00:34:33,919 Speaker 1: the matter is that I p O s are done 624 00:34:34,040 --> 00:34:37,320 Speaker 1: at the pricing benefit of the company. A'ssure not pricing 625 00:34:37,360 --> 00:34:41,600 Speaker 1: benefit of the consumers. And so in the process of 626 00:34:41,719 --> 00:34:45,760 Speaker 1: this we haven't really gotten to that phase. Regulatory costs 627 00:34:45,760 --> 00:34:49,160 Speaker 1: are higher because of our bins Oxley. The public has 628 00:34:49,400 --> 00:34:52,760 Speaker 1: become in the aftermath of two thousand seven nine, often 629 00:34:53,040 --> 00:34:56,879 Speaker 1: critical of things that relate to public companies in terms 630 00:34:56,920 --> 00:35:00,960 Speaker 1: of attacking people. People don't like to in management executives. 631 00:35:01,040 --> 00:35:04,239 Speaker 1: People don't like to be attacked. Uh, And so you say, 632 00:35:04,360 --> 00:35:06,399 Speaker 1: why do I want to do that? And then there's 633 00:35:06,400 --> 00:35:10,960 Speaker 1: actually lots of what are thought of as alternative lending 634 00:35:11,080 --> 00:35:15,480 Speaker 1: practices now that allow people to borrow money at what 635 00:35:15,840 --> 00:35:19,520 Speaker 1: to Again, going back to my point about the traditional 636 00:35:19,600 --> 00:35:24,600 Speaker 1: Alfred Martial concept of economic marginality, has been marginalized. The 637 00:35:24,960 --> 00:35:27,200 Speaker 1: fact is paying up a little bit in the private 638 00:35:27,239 --> 00:35:30,600 Speaker 1: market for loan market is actually cheap compared to equity 639 00:35:30,640 --> 00:35:33,759 Speaker 1: capital today on an after tax basis. So you know, 640 00:35:33,880 --> 00:35:38,640 Speaker 1: going back to the so called infamous Fed model and 641 00:35:39,000 --> 00:35:41,919 Speaker 1: forget about the treasury rate, but think about corporate rates 642 00:35:41,960 --> 00:35:44,880 Speaker 1: and think about tax rates and adjust them. It's actually 643 00:35:45,000 --> 00:35:48,080 Speaker 1: much cheaper and better for the company on average, unless 644 00:35:48,120 --> 00:35:50,160 Speaker 1: you're thought of as a very low quality company to 645 00:35:50,320 --> 00:35:53,920 Speaker 1: be borrowing money rather than issuing stock. So staying private 646 00:35:54,280 --> 00:35:57,000 Speaker 1: seems to be a rational decision because why why do 647 00:35:57,120 --> 00:35:59,560 Speaker 1: the other If people want to find your works, where, 648 00:35:59,640 --> 00:36:02,560 Speaker 1: where's best place for them to go to read about 649 00:36:02,719 --> 00:36:08,279 Speaker 1: some of your views, commentary and everything. Well, hey, I 650 00:36:08,640 --> 00:36:11,080 Speaker 1: still write a monthly column as they have for four 651 00:36:11,160 --> 00:36:14,839 Speaker 1: years at Financial Times, and you can go to their website. Uh, 652 00:36:15,280 --> 00:36:17,600 Speaker 1: my older stuff is you know, all on Forbes still 653 00:36:18,480 --> 00:36:22,839 Speaker 1: uh I uh, right around in other places, and I'm 654 00:36:22,840 --> 00:36:25,360 Speaker 1: hoping to find a new home post Forbes in America 655 00:36:25,640 --> 00:36:29,360 Speaker 1: for things that aren't the Financial Times. I love the 656 00:36:29,400 --> 00:36:32,480 Speaker 1: Financial Times. It's a great publication and I encourage anybody 657 00:36:32,560 --> 00:36:34,279 Speaker 1: to read the Financial Times because it really is the 658 00:36:34,320 --> 00:36:38,640 Speaker 1: global business newspaper. It's the Global business newspaper. And if 659 00:36:38,680 --> 00:36:41,560 Speaker 1: you don't think global in this era, you're actually parking 660 00:36:41,600 --> 00:36:44,080 Speaker 1: up the wrong tree. I just want to take a 661 00:36:44,120 --> 00:36:48,120 Speaker 1: second ago off on a tangent America lad the market 662 00:36:48,719 --> 00:36:51,520 Speaker 1: for years and years now, and I believe that this 663 00:36:51,680 --> 00:36:54,160 Speaker 1: is the year where foreign takes over in US lags 664 00:36:54,560 --> 00:36:56,759 Speaker 1: and that that accelerates in the back half of this year. 665 00:36:57,080 --> 00:36:58,719 Speaker 1: And I might be wrong about that, but it will 666 00:36:58,760 --> 00:37:00,600 Speaker 1: happen at some point if I'm wrong about it now. 667 00:37:01,080 --> 00:37:03,799 Speaker 1: And the folks that and I don't have a problem 668 00:37:03,840 --> 00:37:06,160 Speaker 1: with passiveness, but the folks that are passive with us 669 00:37:06,239 --> 00:37:09,759 Speaker 1: only better be prepared than to be in a three 670 00:37:09,920 --> 00:37:13,359 Speaker 1: four year period where they're not actually getting what they 671 00:37:13,520 --> 00:37:16,600 Speaker 1: think of is as well as the other stuff. And 672 00:37:16,800 --> 00:37:19,000 Speaker 1: if in fact you want to be passive, you have 673 00:37:19,120 --> 00:37:23,520 Speaker 1: to come to a self searching argument. When that moment occurs, 674 00:37:24,400 --> 00:37:27,360 Speaker 1: do you switch to a passive vehicle that gives you 675 00:37:27,440 --> 00:37:30,239 Speaker 1: more foreign exposure? And if you do that, is that 676 00:37:30,360 --> 00:37:32,520 Speaker 1: a passive decision or is that an active decision using 677 00:37:32,560 --> 00:37:36,120 Speaker 1: passive vehicles both? You know, if I'm doing this off 678 00:37:36,160 --> 00:37:37,600 Speaker 1: the top of my head by memory, but I want 679 00:37:37,640 --> 00:37:40,080 Speaker 1: to say the ten year return for the SMP is 680 00:37:40,160 --> 00:37:45,600 Speaker 1: about and the ten year return for take Europe is flat, 681 00:37:46,040 --> 00:37:48,960 Speaker 1: and that assumes dividends reinvesting. I don't know if we've 682 00:37:49,040 --> 00:37:51,799 Speaker 1: had that big a gap for that long period. Yes 683 00:37:51,880 --> 00:37:54,440 Speaker 1: we have, we have, But let me just say that 684 00:37:54,560 --> 00:37:56,960 Speaker 1: in the long term, and this is so basic that 685 00:37:57,040 --> 00:38:00,520 Speaker 1: people can't get it. In the long term, pricing controlled 686 00:38:00,560 --> 00:38:03,640 Speaker 1: by shifts in the supply of securities, not demand. Demand 687 00:38:03,719 --> 00:38:06,160 Speaker 1: doesn't fluctuate by as big a bandwidth the supply can, 688 00:38:06,360 --> 00:38:09,200 Speaker 1: because supply is created a destroyed by shifts and paper product. 689 00:38:09,800 --> 00:38:11,680 Speaker 1: And if you've got the right economics and a little 690 00:38:11,680 --> 00:38:14,520 Speaker 1: bit of regulatory costs, you can overwhelm any level of demand. 691 00:38:14,960 --> 00:38:16,919 Speaker 1: And in the long term you will. In the short 692 00:38:17,040 --> 00:38:20,560 Speaker 1: term you won't. And in that uh, in the long 693 00:38:20,680 --> 00:38:23,080 Speaker 1: term it is axiomatical with a very long history that 694 00:38:23,160 --> 00:38:25,880 Speaker 1: shows that US and form returns end up eventually in 695 00:38:25,920 --> 00:38:28,560 Speaker 1: the same place. They just do it in wildly varying cycles, 696 00:38:28,880 --> 00:38:30,759 Speaker 1: and one leads for a long time, then the other 697 00:38:30,840 --> 00:38:33,400 Speaker 1: catches up, then the other takes over, and it is 698 00:38:33,440 --> 00:38:37,560 Speaker 1: axiomatic that eventually foreign catches up with US, and so 699 00:38:37,719 --> 00:38:40,360 Speaker 1: then you can debate when. But the point is that 700 00:38:40,480 --> 00:38:44,520 Speaker 1: the passive investor that's gone US only has to be 701 00:38:44,680 --> 00:38:47,799 Speaker 1: prepared for long periods where US under So if you're 702 00:38:47,840 --> 00:38:51,440 Speaker 1: a passive investor, you would advocate being a global Yes, 703 00:38:52,080 --> 00:38:54,080 Speaker 1: I believe that in this era if you do not, 704 00:38:54,400 --> 00:38:56,719 Speaker 1: no matter what your tactics are going to be, if 705 00:38:56,760 --> 00:38:59,920 Speaker 1: you don't think globally, you know there's quite a lot. 706 00:39:00,960 --> 00:39:05,840 Speaker 1: I don't have any political arguments, but the politics, I 707 00:39:05,880 --> 00:39:08,080 Speaker 1: mean I study politics about how many political arguments that 708 00:39:08,120 --> 00:39:11,920 Speaker 1: I'm passionate about in terms of making. But the populism 709 00:39:12,080 --> 00:39:15,920 Speaker 1: movement is a nationalistic movement wherever it exists. But that 710 00:39:16,120 --> 00:39:18,160 Speaker 1: doesn't mean you shouldn't also be thinking global at the 711 00:39:18,160 --> 00:39:21,960 Speaker 1: same time. Makes sense. We have been speaking with Ken Fisher. 712 00:39:22,120 --> 00:39:25,760 Speaker 1: He is the co c I O and executive chairman 713 00:39:26,239 --> 00:39:29,719 Speaker 1: of Fisher Investments. Be sure and stick around for a 714 00:39:29,840 --> 00:39:32,800 Speaker 1: podcast extras where we keep the tape rolling and continue 715 00:39:32,880 --> 00:39:36,880 Speaker 1: to talk about all things investing. Check out my daily 716 00:39:37,000 --> 00:39:39,720 Speaker 1: column on Bloomberg View dot com or you can follow 717 00:39:39,800 --> 00:39:43,239 Speaker 1: me on Twitter at rit Halts. I'm Barry Rihults. You're 718 00:39:43,320 --> 00:39:47,000 Speaker 1: listening to Masters in Business on Bloomberg Radio. What could 719 00:39:47,040 --> 00:39:49,480 Speaker 1: your future hold? More than you think? Because at Merrill 720 00:39:49,520 --> 00:39:51,520 Speaker 1: Lynch we work with you to create a strategy built 721 00:39:51,520 --> 00:39:54,239 Speaker 1: around your priorities. Visit mL dot com and learn more 722 00:39:54,280 --> 00:39:56,839 Speaker 1: about Mery Lynch. An affiliated Bank of America, Mary Lynch 723 00:39:56,840 --> 00:39:59,120 Speaker 1: makes available products and services offered by Merrill Lynch Pierce 724 00:39:59,120 --> 00:40:01,960 Speaker 1: Federan Smith, Incorporated, Register Broker Dealer. Remember s I PC Ken, 725 00:40:02,040 --> 00:40:03,759 Speaker 1: Thank you so much for doing this. This is it's 726 00:40:03,760 --> 00:40:07,320 Speaker 1: always fascinating to to speak with you, and my pleasure 727 00:40:07,360 --> 00:40:09,799 Speaker 1: bearer is always fun to speak with you. And I, uh, 728 00:40:10,320 --> 00:40:12,600 Speaker 1: there's so much stuff we didn't get to. I wanna. 729 00:40:12,800 --> 00:40:16,440 Speaker 1: I want to continue discussing for for people who are 730 00:40:16,520 --> 00:40:19,879 Speaker 1: listening at home who either I have heard of Ken 731 00:40:20,000 --> 00:40:25,120 Speaker 1: Fisher or have seen his advertisements on UM the internet. 732 00:40:25,280 --> 00:40:29,239 Speaker 1: You're fairly ubiquitous. It's it's hard to google anything and 733 00:40:29,320 --> 00:40:31,800 Speaker 1: not see you come up anything related to finance. We 734 00:40:31,880 --> 00:40:33,960 Speaker 1: spend a lot of money advertising, do you We've been 735 00:40:33,960 --> 00:40:35,279 Speaker 1: a lot of money doing a lot of things. People 736 00:40:35,320 --> 00:40:38,000 Speaker 1: see our advertising. I told you that earlier, and they 737 00:40:38,040 --> 00:40:39,600 Speaker 1: think of us in terms of adverting. They just don't 738 00:40:39,600 --> 00:40:41,360 Speaker 1: see all the rest of what we do. So what 739 00:40:41,520 --> 00:40:46,960 Speaker 1: I find fascinating, But by most definitions, over the past 740 00:40:47,080 --> 00:40:51,680 Speaker 1: thirty years thirty plus years, you've built what is essentially 741 00:40:51,760 --> 00:40:55,600 Speaker 1: the largest r I A in in America by any 742 00:40:55,719 --> 00:40:59,680 Speaker 1: standard other than a UM where Financial Engines is bigger, 743 00:40:59,760 --> 00:41:01,680 Speaker 1: but in all other ways than just straight at u M, 744 00:41:01,719 --> 00:41:04,200 Speaker 1: we're bigger than Financial Right and they're really a four 745 00:41:04,440 --> 00:41:07,600 Speaker 1: mostly four one K provider there for a large defined 746 00:41:07,640 --> 00:41:10,840 Speaker 1: contribution plans for very large You're you're a registered investment 747 00:41:10,840 --> 00:41:16,200 Speaker 1: advisory servicing PYE net worth individuals and institutions. How many 748 00:41:16,239 --> 00:41:20,680 Speaker 1: clients do you guys have at this point and employees? 749 00:41:21,600 --> 00:41:24,400 Speaker 1: That sounds like you figured out how to scale something 750 00:41:24,960 --> 00:41:29,680 Speaker 1: that most other people are having a hard time scaling. Well, 751 00:41:29,719 --> 00:41:32,879 Speaker 1: that's I'm unable to speak for most people. But we're 752 00:41:33,160 --> 00:41:35,480 Speaker 1: comfortable with the business we do. I mean, the fact 753 00:41:35,520 --> 00:41:37,880 Speaker 1: of the matter is that we have a very low 754 00:41:38,000 --> 00:41:41,200 Speaker 1: termination rate and basically we have happy clients, and we 755 00:41:41,320 --> 00:41:47,279 Speaker 1: operate in lots of places, and uh, we're not I mean, 756 00:41:47,440 --> 00:41:50,040 Speaker 1: we're as I've said often, we don't have any market share. 757 00:41:50,760 --> 00:41:53,200 Speaker 1: I mean, we're bigger than others, but weren't any market share. 758 00:41:53,200 --> 00:41:55,560 Speaker 1: We're a peanut. Eight billion dollars is not a lot 759 00:41:55,600 --> 00:41:59,040 Speaker 1: of money in a world where there's you know, sixty 760 00:41:59,280 --> 00:42:02,920 Speaker 1: trillion dollars of suggestible assets. What's a couple of billion dollars. 761 00:42:03,360 --> 00:42:08,600 Speaker 1: But that said, within the universe of advisory firms, you're 762 00:42:08,719 --> 00:42:14,760 Speaker 1: essentially the largest. I'm fascinated. I'm fascinated by the business 763 00:42:14,840 --> 00:42:18,000 Speaker 1: side of that and the steps you took when you 764 00:42:18,120 --> 00:42:22,520 Speaker 1: took them to grow that business, because listen, the whole 765 00:42:22,600 --> 00:42:26,640 Speaker 1: world of people in the in finance. This is what 766 00:42:26,719 --> 00:42:29,000 Speaker 1: I think a lot of people don't understand. That guy 767 00:42:29,080 --> 00:42:32,000 Speaker 1: got lucky, he was born on third base. That sort 768 00:42:32,040 --> 00:42:35,160 Speaker 1: of stuff. The universe exists as it as it exists 769 00:42:35,200 --> 00:42:38,839 Speaker 1: at any given moment. You are looking at the world 770 00:42:38,920 --> 00:42:40,920 Speaker 1: of finance at that time and said I think I'm 771 00:42:40,920 --> 00:42:44,279 Speaker 1: gonna do this, this and this, and then thirty years later, 772 00:42:44,400 --> 00:42:47,719 Speaker 1: oh look, we're running eighty billion dollars. That's an amazing 773 00:42:47,960 --> 00:42:53,120 Speaker 1: process to me because everybody is essentially looking at or 774 00:42:53,239 --> 00:42:56,239 Speaker 1: has access to look at the same things, but not 775 00:42:56,400 --> 00:43:01,279 Speaker 1: everybody reaches the same conclusions and executes the same plan 776 00:43:02,000 --> 00:43:06,239 Speaker 1: to go forward. And I'm just fascinated by how you've 777 00:43:06,320 --> 00:43:09,320 Speaker 1: accomplished what you've accomplished. It is called masters in business. 778 00:43:09,400 --> 00:43:12,520 Speaker 1: After all. You know, as I told you the last 779 00:43:12,600 --> 00:43:15,400 Speaker 1: time that I was here with you, I'm a youngest 780 00:43:15,480 --> 00:43:19,280 Speaker 1: brother and My older brothers were by definition older, bigger, stronger. 781 00:43:20,040 --> 00:43:23,160 Speaker 1: Both of them happened to be smarter. And I knew 782 00:43:23,200 --> 00:43:25,919 Speaker 1: when I was a little kid that if I wanted something, 783 00:43:26,000 --> 00:43:28,160 Speaker 1: I couldn't want what they wanted and take them head on. 784 00:43:28,320 --> 00:43:31,239 Speaker 1: It just couldn't work, and so I had to try 785 00:43:31,320 --> 00:43:33,320 Speaker 1: to be This is kind of the beginnings of me 786 00:43:33,440 --> 00:43:36,000 Speaker 1: being what some people might call contrarian. But I had 787 00:43:36,040 --> 00:43:38,719 Speaker 1: to figure out either different things I wanted or going 788 00:43:38,760 --> 00:43:41,600 Speaker 1: about getting them a different way. And that's been true 789 00:43:41,719 --> 00:43:43,719 Speaker 1: for me all of my life. I've always had the 790 00:43:43,800 --> 00:43:47,480 Speaker 1: little brother complex, and the little brother complex from the 791 00:43:47,560 --> 00:43:50,800 Speaker 1: beginning has had me trying to figure out how I 792 00:43:51,120 --> 00:43:55,719 Speaker 1: could get what I wanted in the face of superior competition. 793 00:43:56,320 --> 00:43:59,680 Speaker 1: And there's an abundant amount of big guns out there 794 00:43:59,680 --> 00:44:04,920 Speaker 1: already to shoot. And so then I've also been prepared 795 00:44:05,200 --> 00:44:08,480 Speaker 1: to operate by trial and error and trying this and 796 00:44:08,560 --> 00:44:11,240 Speaker 1: it doesn't work. And you can do a huge amount 797 00:44:11,280 --> 00:44:13,319 Speaker 1: of things on a small scale and testament and see 798 00:44:13,320 --> 00:44:14,839 Speaker 1: if they work, and then if they work, do them 799 00:44:14,880 --> 00:44:16,920 Speaker 1: on a bigger scale, and if they don't work, move 800 00:44:17,000 --> 00:44:19,400 Speaker 1: on to the next one. And so you know, again, 801 00:44:19,520 --> 00:44:23,960 Speaker 1: yesterday when I was here in Town. Investment News was 802 00:44:24,040 --> 00:44:27,320 Speaker 1: giving me this award as one of their inaugural innovation winners. 803 00:44:27,920 --> 00:44:31,400 Speaker 1: And you know, we've just done a lot of things 804 00:44:31,560 --> 00:44:33,960 Speaker 1: that people in our realm of endeavor always thought were 805 00:44:34,440 --> 00:44:36,680 Speaker 1: stuff either you couldn't do or you shouldn't do, not 806 00:44:36,840 --> 00:44:39,040 Speaker 1: that they were illegal. But you know, for example, you 807 00:44:39,120 --> 00:44:41,400 Speaker 1: talk about our advertising, people in our realm of endeavor 808 00:44:41,480 --> 00:44:43,839 Speaker 1: have never advertised the ways we do. We started off 809 00:44:44,120 --> 00:44:47,520 Speaker 1: doing direct mail, and then we moved into direct email, 810 00:44:47,880 --> 00:44:51,120 Speaker 1: and then we moved into Internet banners, and we just 811 00:44:51,480 --> 00:44:55,080 Speaker 1: kept rolling in marketing tests over time, over a long 812 00:44:55,120 --> 00:44:56,880 Speaker 1: period of time. Mind you too, this has now been 813 00:44:56,920 --> 00:44:59,760 Speaker 1: twenty years that we are still doing direct mail. Absolutely 814 00:44:59,760 --> 00:45:02,320 Speaker 1: it's in effective. Yeah, we do it differently than we 815 00:45:02,400 --> 00:45:04,840 Speaker 1: used to, and it's not as effective as it was 816 00:45:04,960 --> 00:45:06,840 Speaker 1: at first, because when we were doing it at first, 817 00:45:07,160 --> 00:45:09,719 Speaker 1: it was like going back to my fishing analogy. The 818 00:45:09,760 --> 00:45:12,720 Speaker 1: first time that you you know, you cast your line 819 00:45:12,840 --> 00:45:14,880 Speaker 1: into a clear pool and there's no fish that have 820 00:45:14,960 --> 00:45:16,879 Speaker 1: been taken out of the pool at all. Your odds 821 00:45:16,920 --> 00:45:19,320 Speaker 1: are greater than after you've taken ten fish out. And 822 00:45:20,640 --> 00:45:24,880 Speaker 1: so but yes, direct marketing works for us, and we 823 00:45:24,960 --> 00:45:27,000 Speaker 1: know more about direct marketing, on the other hand, and 824 00:45:27,120 --> 00:45:29,920 Speaker 1: we did when we started. Uh, you know, we're not 825 00:45:30,440 --> 00:45:34,359 Speaker 1: maestros at this. I disagree. I think you're an evil 826 00:45:34,440 --> 00:45:38,680 Speaker 1: marketing genius. I've described you that, not evil, but a brilliant. 827 00:45:39,080 --> 00:45:42,360 Speaker 1: First of all, if we were competing direct head on 828 00:45:42,520 --> 00:45:45,080 Speaker 1: with Procter and Gamble for their business, we would get 829 00:45:45,080 --> 00:45:48,120 Speaker 1: our clock cleaned. But but you don't know anything about 830 00:45:48,160 --> 00:45:51,640 Speaker 1: selling toothpastes. Don't know. But I don't know anything about 831 00:45:51,680 --> 00:45:54,600 Speaker 1: marketing compared to Procter and Gamble. That's my point. And 832 00:45:54,800 --> 00:45:56,399 Speaker 1: and the fact of matters. Yes, I don't know anything 833 00:45:56,400 --> 00:45:59,560 Speaker 1: about two days. I have used the stuff, but but occasionally, 834 00:46:00,320 --> 00:46:02,440 Speaker 1: but it's every Saturday, whether you need it or not. 835 00:46:03,360 --> 00:46:06,759 Speaker 1: I forget some santacas, I forget. But but but you 836 00:46:06,880 --> 00:46:13,520 Speaker 1: have to admit your approach to marketing to individuals has 837 00:46:13,640 --> 00:46:18,080 Speaker 1: been wildly successful compared in the industry. What we thought 838 00:46:18,160 --> 00:46:20,600 Speaker 1: for a long time was that there was no reason 839 00:46:20,680 --> 00:46:23,560 Speaker 1: you couldn't do these kinds of things in our realm 840 00:46:23,600 --> 00:46:26,040 Speaker 1: of endeavor that other people weren't. But we're doing in 841 00:46:26,200 --> 00:46:29,480 Speaker 1: other realms of endeavor. And what I've tried to do 842 00:46:29,680 --> 00:46:32,239 Speaker 1: a lot in my career is to do things that 843 00:46:32,360 --> 00:46:34,560 Speaker 1: people were doing in other realms of endeavor that they 844 00:46:34,600 --> 00:46:40,000 Speaker 1: weren't in this the forty act advisory world. And uh 845 00:46:40,200 --> 00:46:43,920 Speaker 1: so you know we were early in computerization. Uh. We 846 00:46:44,640 --> 00:46:46,840 Speaker 1: have all kinds of service models that we use that 847 00:46:46,880 --> 00:46:51,320 Speaker 1: other people don't do. Uh, we're very we've customized sales 848 00:46:51,400 --> 00:46:54,160 Speaker 1: and ways that other people haven't give me. For instance, 849 00:46:54,400 --> 00:46:56,520 Speaker 1: by the way, I love the annuity thing. How how 850 00:46:56,600 --> 00:46:59,000 Speaker 1: you buy people out of their contracts? What do you 851 00:46:59,120 --> 00:47:02,719 Speaker 1: do that you need in terms of service that other 852 00:47:02,800 --> 00:47:07,920 Speaker 1: people don't do. So we have a whole series of 853 00:47:08,200 --> 00:47:17,120 Speaker 1: different types and different sizes of customized client only seminar 854 00:47:17,440 --> 00:47:22,479 Speaker 1: and events to communicate to them how we're seeing things 855 00:47:22,600 --> 00:47:27,680 Speaker 1: about various things. And that's because we've learned that different 856 00:47:27,800 --> 00:47:32,160 Speaker 1: people receive information best differently. And so we have a 857 00:47:32,480 --> 00:47:36,759 Speaker 1: huge we we we we have clients at over. We 858 00:47:36,880 --> 00:47:42,399 Speaker 1: have over fifty seven thousand client event contacts a year 859 00:47:43,280 --> 00:47:46,440 Speaker 1: where clients go to events and interact. This is not 860 00:47:46,520 --> 00:47:49,560 Speaker 1: These are not sales events. These are service events where 861 00:47:49,719 --> 00:47:52,760 Speaker 1: clients go to these events of different types all around 862 00:47:52,920 --> 00:47:55,720 Speaker 1: the English speaking world and a little bit in Germany 863 00:47:56,320 --> 00:48:01,560 Speaker 1: and talk to our people. Some small events, some big events. 864 00:48:02,080 --> 00:48:04,959 Speaker 1: We separate completely sales from service. So our sales people 865 00:48:05,000 --> 00:48:08,919 Speaker 1: do no service. It's completely specialized. We're extreme and specialization 866 00:48:08,920 --> 00:48:11,760 Speaker 1: of labor and we and we have been forever because 867 00:48:11,760 --> 00:48:13,719 Speaker 1: I didn't want the salesperson to be able to do 868 00:48:13,840 --> 00:48:19,239 Speaker 1: post sales service. Because if the sales person um does 869 00:48:19,320 --> 00:48:21,800 Speaker 1: the boom doggle on the sales person on the customer 870 00:48:21,960 --> 00:48:25,240 Speaker 1: and and and and you know, lies and cheets and steals, 871 00:48:25,600 --> 00:48:27,239 Speaker 1: and they do post sales service, they can keep it 872 00:48:27,760 --> 00:48:32,040 Speaker 1: keep someone else. Second, we want a prophylactic protection at 873 00:48:32,040 --> 00:48:34,640 Speaker 1: the point of client intake. And so at the point 874 00:48:34,680 --> 00:48:36,960 Speaker 1: the contracts signed, the service people come in take over 875 00:48:37,000 --> 00:48:39,320 Speaker 1: and start all over again, and they don't get commissions. 876 00:48:39,960 --> 00:48:43,640 Speaker 1: So they're sitting there seeing and the sales people know that. 877 00:48:44,120 --> 00:48:45,840 Speaker 1: So the sales people are less prone to want to 878 00:48:45,880 --> 00:48:49,920 Speaker 1: do the U. That makes sense, And you build in 879 00:48:50,040 --> 00:48:54,520 Speaker 1: a structural oversight that's even separate from the compliance department, 880 00:48:54,840 --> 00:48:58,600 Speaker 1: just your process has because it provides a prophylactic protection. 881 00:48:59,160 --> 00:49:05,320 Speaker 1: Uh lie was. Our orientation in general is somewhat different, 882 00:49:05,440 --> 00:49:08,640 Speaker 1: I think than most people because we push very hard 883 00:49:09,880 --> 00:49:16,279 Speaker 1: what we consider to be needs based investing versus what 884 00:49:16,560 --> 00:49:21,480 Speaker 1: we see as goals based investing. And not a financial 885 00:49:21,600 --> 00:49:24,680 Speaker 1: plan or no, no, no. What what I mean is 886 00:49:25,280 --> 00:49:28,040 Speaker 1: an awful lot of people ask client questions like, so, 887 00:49:28,160 --> 00:49:30,920 Speaker 1: what's your risk tolerance? And you know, I did work 888 00:49:31,000 --> 00:49:34,680 Speaker 1: twenty years ago that they can't. It's it's whatever the 889 00:49:34,719 --> 00:49:37,320 Speaker 1: market's doing the past half hour and now, yes, exactly 890 00:49:37,320 --> 00:49:40,000 Speaker 1: if you don't understand that. But but I don't think 891 00:49:40,040 --> 00:49:42,480 Speaker 1: most of the world fully gets that that. It's a 892 00:49:42,520 --> 00:49:45,520 Speaker 1: little like a boxing analogy, where most people haven't haven't 893 00:49:45,560 --> 00:49:48,200 Speaker 1: been hitting the gut hard enough enough times the way 894 00:49:48,440 --> 00:49:50,840 Speaker 1: a good boxer would know how they react when they 895 00:49:50,880 --> 00:49:53,400 Speaker 1: get hitting the gut. The good boxer actually knows what 896 00:49:53,520 --> 00:49:55,520 Speaker 1: is risk tolerance is to a gut punch, but the 897 00:49:55,600 --> 00:49:57,760 Speaker 1: average person doesn't. In the market gives you gut punches 898 00:49:57,760 --> 00:50:02,239 Speaker 1: all the time, and so we focus on needs orientation 899 00:50:02,320 --> 00:50:05,640 Speaker 1: and then adapting the service to whatever that recent thing 900 00:50:05,880 --> 00:50:08,560 Speaker 1: is that's a gut punch to keep the customer going 901 00:50:08,640 --> 00:50:11,160 Speaker 1: to what they need, and what they need is almost 902 00:50:11,239 --> 00:50:14,560 Speaker 1: always a much longer time horizon than they think, because 903 00:50:14,960 --> 00:50:18,480 Speaker 1: unlike prior generations, people are going to live longer than 904 00:50:18,560 --> 00:50:20,759 Speaker 1: they ever have before. They need to stretch their money 905 00:50:20,880 --> 00:50:23,919 Speaker 1: much further than they ever have in the myopic view 906 00:50:24,040 --> 00:50:26,799 Speaker 1: that says, when I'm sixty five, I need to get 907 00:50:26,880 --> 00:50:30,239 Speaker 1: real conservative was perfectly fine in the days that to 908 00:50:30,280 --> 00:50:33,160 Speaker 1: find benefit pension plans were first invented, and people live 909 00:50:33,239 --> 00:50:35,920 Speaker 1: to be sixty five, retired and died at seventy. But 910 00:50:36,080 --> 00:50:39,800 Speaker 1: now you're probably talking on average, and this is not 911 00:50:39,920 --> 00:50:41,640 Speaker 1: what the actual royal tables say. This is what I'm 912 00:50:41,640 --> 00:50:44,200 Speaker 1: telling you. It probably happens on average thirty years. And 913 00:50:44,320 --> 00:50:48,000 Speaker 1: that thirty years, yeah, because people's lives keep getting longer 914 00:50:48,400 --> 00:50:51,120 Speaker 1: in their lives and even more complex. If you make 915 00:50:51,160 --> 00:50:54,239 Speaker 1: it to seventy five, it means you didn't die as 916 00:50:54,280 --> 00:50:56,520 Speaker 1: a teenager. You didn't die and childbirth, you didn't die. 917 00:50:56,920 --> 00:51:01,600 Speaker 1: All these previous windows where whether these big demographic surges 918 00:51:01,760 --> 00:51:04,040 Speaker 1: and the odds are you going to go another x years? 919 00:51:04,200 --> 00:51:07,680 Speaker 1: So ironically to that point, Berry, if you actually look 920 00:51:07,760 --> 00:51:11,400 Speaker 1: at the survivors of the Donner Party, the survivors of 921 00:51:11,440 --> 00:51:13,600 Speaker 1: the Donner Party, who by definition were tougher than the 922 00:51:13,680 --> 00:51:17,759 Speaker 1: non survivors, lived to be really really old, all of 923 00:51:17,840 --> 00:51:20,560 Speaker 1: them because they were just tough. And the fact is 924 00:51:20,840 --> 00:51:23,120 Speaker 1: that longer living leads to longer living. But in this 925 00:51:23,280 --> 00:51:25,960 Speaker 1: day and age, within that longer time period. We have 926 00:51:26,160 --> 00:51:29,279 Speaker 1: all of these advances being made in medicine that push 927 00:51:29,360 --> 00:51:31,759 Speaker 1: our lives longer and longer. When I was young, when 928 00:51:31,800 --> 00:51:34,680 Speaker 1: you were young, senior sports didn't exist when I was 929 00:51:35,440 --> 00:51:37,680 Speaker 1: I just was reading about this ninety year old marathon, 930 00:51:39,280 --> 00:51:42,960 Speaker 1: astonishing because in the old days, a guy got to 931 00:51:43,040 --> 00:51:45,040 Speaker 1: be post retirement age and he sat in a chair 932 00:51:45,760 --> 00:51:48,400 Speaker 1: and of course, and of course women didn't get to 933 00:51:48,480 --> 00:51:51,520 Speaker 1: retirement age, didn't work, and that was just a different world. 934 00:51:51,600 --> 00:51:55,560 Speaker 1: And the world has shifted, and now your time horizon 935 00:51:55,680 --> 00:51:59,359 Speaker 1: post retirement is so much longer, but people haven't emotionally 936 00:51:59,600 --> 00:52:02,120 Speaker 1: learned to adapt to that and plan for that long 937 00:52:02,239 --> 00:52:08,120 Speaker 1: time horizon. That needs to really say, the most brutal 938 00:52:08,280 --> 00:52:10,120 Speaker 1: thing that I can do is run out on money 939 00:52:10,160 --> 00:52:12,680 Speaker 1: when I'm really old, and your poverty is the most 940 00:52:12,760 --> 00:52:14,759 Speaker 1: brutal thing that you could do to something. That is 941 00:52:14,920 --> 00:52:19,680 Speaker 1: the biggest question that you hear from people not in 942 00:52:19,760 --> 00:52:22,359 Speaker 1: their twenties and thirties who have a long enough time 943 00:52:22,440 --> 00:52:25,800 Speaker 1: horizon to save, but in their fifties. Hey, I'm concerned 944 00:52:25,840 --> 00:52:28,120 Speaker 1: I'm going to run out of money when I'm fill 945 00:52:28,200 --> 00:52:31,280 Speaker 1: in the blank. Well, you know, one of the problems 946 00:52:31,320 --> 00:52:33,919 Speaker 1: we've always had in behavioralism is people don't save enough. 947 00:52:34,000 --> 00:52:36,440 Speaker 1: And I'm not going to get on the soapbox about saving. 948 00:52:36,520 --> 00:52:39,839 Speaker 1: People are what people are. But then when they get 949 00:52:39,920 --> 00:52:43,080 Speaker 1: to be retirement age, whatever it is they have, they 950 00:52:43,160 --> 00:52:45,480 Speaker 1: need to plan for a long time. And so if 951 00:52:45,560 --> 00:52:47,560 Speaker 1: that's retirement agent they don't have the money, that means 952 00:52:47,600 --> 00:52:50,000 Speaker 1: they need to find another way to work. Uh and 953 00:52:50,560 --> 00:52:53,320 Speaker 1: uh oh, I'm just gonna get money from this or 954 00:52:53,440 --> 00:52:55,520 Speaker 1: that or the other, social security, what have you. Well, 955 00:52:55,560 --> 00:52:58,239 Speaker 1: if you think you're going to rely on some dependency, 956 00:52:58,840 --> 00:53:01,239 Speaker 1: you've made yourself a depend and and that's a tough 957 00:53:01,320 --> 00:53:04,920 Speaker 1: go to. You know, people get these things wrong, but 958 00:53:05,000 --> 00:53:09,279 Speaker 1: we have a long life. Young people. Young people ought 959 00:53:09,320 --> 00:53:12,440 Speaker 1: to do age appropriate stuff. People always asked, not always 960 00:53:12,480 --> 00:53:14,279 Speaker 1: has me. People often ask me, so, what kind of 961 00:53:14,320 --> 00:53:16,880 Speaker 1: advice would you give to an eighteen year old? And 962 00:53:17,120 --> 00:53:19,640 Speaker 1: my view would be, well, if you're an eighteen year 963 00:53:19,640 --> 00:53:21,280 Speaker 1: old guy, you know what I do. I chase girls. 964 00:53:21,760 --> 00:53:23,919 Speaker 1: And if you're an eighteen year old girl, I'd worry 965 00:53:23,920 --> 00:53:26,200 Speaker 1: about how the guys chase you. And I think that's 966 00:53:26,200 --> 00:53:29,040 Speaker 1: age appropriate. And you know, it's better to be chasing 967 00:53:29,080 --> 00:53:31,480 Speaker 1: girls when you're eighteen than chasing girls when you're a grandpa. 968 00:53:31,600 --> 00:53:34,800 Speaker 1: That's for darn share. And uh. The fact of the 969 00:53:34,840 --> 00:53:37,120 Speaker 1: matter is age appropriate activity is one that people have 970 00:53:37,200 --> 00:53:40,160 Speaker 1: a hard time scoping out correctly. But part of age 971 00:53:40,160 --> 00:53:42,920 Speaker 1: appropriate activity is realizing that you're going to live to 972 00:53:43,000 --> 00:53:47,240 Speaker 1: be much like long, much longer likely than you envision 973 00:53:47,320 --> 00:53:49,840 Speaker 1: that you will. When I was young, I bought a 974 00:53:49,960 --> 00:53:52,600 Speaker 1: term insurance policy, and then I outlived the need of 975 00:53:52,640 --> 00:53:54,879 Speaker 1: the term insurance policy, and it sat in a drawer 976 00:53:54,920 --> 00:53:57,240 Speaker 1: for a long time. When I got to be post fifty, 977 00:53:57,520 --> 00:53:59,200 Speaker 1: I went back and looked at it, and in the 978 00:53:59,320 --> 00:54:04,320 Speaker 1: twenty five five years from fifty, the life expectancy of 979 00:54:04,400 --> 00:54:07,600 Speaker 1: a fifty year old had I looked at the terms 980 00:54:07,640 --> 00:54:09,440 Speaker 1: that went with it, and the life expectancy of the 981 00:54:09,480 --> 00:54:11,879 Speaker 1: fifty year old had grown by seven years. In those 982 00:54:11,960 --> 00:54:15,840 Speaker 1: twenty five years, more or less, I got almost a 983 00:54:16,000 --> 00:54:19,759 Speaker 1: year for every three that I lived, added on to 984 00:54:19,880 --> 00:54:22,880 Speaker 1: what the life expectancy of a fifty year old would be. 985 00:54:23,320 --> 00:54:27,120 Speaker 1: And that process isn't over yet. We're still extending life 986 00:54:28,120 --> 00:54:30,960 Speaker 1: as we know it, and we're also making better quality 987 00:54:31,000 --> 00:54:34,399 Speaker 1: of life later and so all of the features even 988 00:54:34,600 --> 00:54:36,920 Speaker 1: for and again, we've got a lot of clients, we 989 00:54:37,000 --> 00:54:41,440 Speaker 1: hear a lot of stories uh, widows and divorced people 990 00:54:41,600 --> 00:54:45,560 Speaker 1: in older ages trying to figure out things like I'm 991 00:54:45,840 --> 00:54:49,799 Speaker 1: eighty two and my spouse died, and now I want 992 00:54:49,800 --> 00:54:52,080 Speaker 1: to move to be closer to where my grandchildren are, 993 00:54:52,640 --> 00:54:54,920 Speaker 1: and how do I go about finding someplace where I 994 00:54:54,960 --> 00:54:57,000 Speaker 1: can be an active, healthy, eighty two year old because 995 00:54:57,000 --> 00:54:59,759 Speaker 1: I am, Because they've never thought about that before, because 996 00:54:59,760 --> 00:55:01,120 Speaker 1: they were living in the house they were living in. 997 00:55:01,160 --> 00:55:03,120 Speaker 1: They weren't planning to move, they weren't planning to change. 998 00:55:03,400 --> 00:55:06,040 Speaker 1: And activities in your eighties aren't something that anybody ever 999 00:55:06,080 --> 00:55:08,040 Speaker 1: said in school, Oh, here's what you should do when 1000 00:55:08,040 --> 00:55:09,800 Speaker 1: you're in your eighties, because we don't have stuff like that. 1001 00:55:10,719 --> 00:55:13,160 Speaker 1: So I know I only have you for another fifteen 1002 00:55:13,200 --> 00:55:15,759 Speaker 1: minutes or so, is that right? What time are we 1003 00:55:15,880 --> 00:55:21,279 Speaker 1: out of here? Twelve thirty one o'clock? As Charlie, I 1004 00:55:21,360 --> 00:55:23,600 Speaker 1: think we have to be out of twelve thirty. Um, 1005 00:55:23,719 --> 00:55:26,839 Speaker 1: So let me jump into my favorite questions. And there 1006 00:55:26,880 --> 00:55:30,239 Speaker 1: are a few I really wanna go over. God, you know, 1007 00:55:30,320 --> 00:55:32,919 Speaker 1: there's so many questions we did not get to. You're 1008 00:55:33,040 --> 00:55:37,040 Speaker 1: You're easy to talk to when we we you ask 1009 00:55:37,080 --> 00:55:39,480 Speaker 1: your question for both is good and he is good. 1010 00:55:39,560 --> 00:55:41,880 Speaker 1: On an interview, and I sucked the airspace out of 1011 00:55:41,880 --> 00:55:44,800 Speaker 1: the interview. That's right now, you did, not twelve thirty. Alright, 1012 00:55:44,880 --> 00:55:47,800 Speaker 1: So I'm gonna I'm gonna go over my five favorite 1013 00:55:48,120 --> 00:55:51,400 Speaker 1: UM questions. Tell us about your early mentors. Who are 1014 00:55:51,440 --> 00:55:57,200 Speaker 1: the people who influenced the way you looked at the world. Ah, well, 1015 00:55:57,280 --> 00:56:00,200 Speaker 1: of course with almost everyone, my mother and my father. 1016 00:56:00,800 --> 00:56:04,480 Speaker 1: Uh and your father especially was a famous author and 1017 00:56:04,880 --> 00:56:06,600 Speaker 1: uh yeah, But when I was very young, he was 1018 00:56:06,680 --> 00:56:11,359 Speaker 1: a father and he was actually marvelous in weird ways. 1019 00:56:11,360 --> 00:56:12,759 Speaker 1: He was a weird man. He was on you. When 1020 00:56:12,760 --> 00:56:14,640 Speaker 1: I say weird, I mean out the bell curve, and 1021 00:56:14,800 --> 00:56:16,759 Speaker 1: he was. He was weird. I don't mean weird as bad, 1022 00:56:16,840 --> 00:56:20,880 Speaker 1: I mean weird. And he was statistically unusual. He had 1023 00:56:20,880 --> 00:56:24,799 Speaker 1: Asperger's before Aspergers was understood. And on the other hand, 1024 00:56:24,840 --> 00:56:28,440 Speaker 1: he was as marvelous bedtime storyteller. And I didn't understand 1025 00:56:28,480 --> 00:56:30,400 Speaker 1: at the time that in the bedtime stories he was 1026 00:56:30,480 --> 00:56:33,600 Speaker 1: telling me, he was telling me what he wanted me 1027 00:56:33,680 --> 00:56:37,359 Speaker 1: to be. Um. I still choke up when I think 1028 00:56:37,400 --> 00:56:39,719 Speaker 1: about him what he wanted me to be. When I 1029 00:56:39,800 --> 00:56:42,440 Speaker 1: grew up, he was telling me in these fictional stories 1030 00:56:42,480 --> 00:56:44,520 Speaker 1: that he made up, what he wanted of me. Was 1031 00:56:44,600 --> 00:56:47,239 Speaker 1: he making these stories up, like right off the top 1032 00:56:47,320 --> 00:56:49,399 Speaker 1: of his head. I don't know that. I never knew 1033 00:56:49,440 --> 00:56:50,840 Speaker 1: if he was making him up off the top of 1034 00:56:50,920 --> 00:56:53,000 Speaker 1: his head or if he pre planned them. Uh. And 1035 00:56:53,120 --> 00:56:55,840 Speaker 1: they were different every night. Sometimes he told me the 1036 00:56:55,880 --> 00:56:58,640 Speaker 1: same stories over and over again because because because those 1037 00:56:58,680 --> 00:57:00,560 Speaker 1: were the ones he really wanted to drill into my head. 1038 00:57:00,880 --> 00:57:04,040 Speaker 1: And then also my grandfather was terribly important to me. 1039 00:57:04,160 --> 00:57:06,600 Speaker 1: I one died before I was born, and if christ 1040 00:57:06,640 --> 00:57:09,200 Speaker 1: didn't know him, but my paternal grandfather and I were 1041 00:57:09,320 --> 00:57:12,160 Speaker 1: very close and I idolized him and he was He 1042 00:57:12,360 --> 00:57:14,840 Speaker 1: was a big influence on my life in other ways, 1043 00:57:14,920 --> 00:57:18,440 Speaker 1: in ways of what's good, what's bad, what do you do? 1044 00:57:18,800 --> 00:57:21,440 Speaker 1: How do you do things? Uh? He was an important 1045 00:57:21,520 --> 00:57:23,800 Speaker 1: role model to me. He was in a lot of ways. 1046 00:57:24,200 --> 00:57:26,240 Speaker 1: There was a guy named Clarence Bennett after after my 1047 00:57:26,280 --> 00:57:28,840 Speaker 1: grandfather died that became a kind of a substitute grandfather 1048 00:57:28,960 --> 00:57:31,560 Speaker 1: for me. He was a former New York life insurance 1049 00:57:31,640 --> 00:57:35,120 Speaker 1: guy and he was also a great tree explorer and 1050 00:57:35,200 --> 00:57:38,120 Speaker 1: a great and a great explorer. Um he discovered the 1051 00:57:38,200 --> 00:57:42,360 Speaker 1: largest and oldest Western juniper in the world. Still famous 1052 00:57:42,400 --> 00:57:45,400 Speaker 1: tree that Bennett juniper, and uh, he kind of became 1053 00:57:45,480 --> 00:57:50,400 Speaker 1: a very famous tree when when when I became older 1054 00:57:50,400 --> 00:57:51,840 Speaker 1: and I got involved in trees, and all my tree 1055 00:57:51,880 --> 00:57:54,080 Speaker 1: buddies knew that I had known Clarence Bennett when I 1056 00:57:54,120 --> 00:57:57,280 Speaker 1: was young. They were like, whoa, um anyway, um, Now, 1057 00:57:57,520 --> 00:58:00,200 Speaker 1: by the way, I have to just stop you and ask. 1058 00:58:00,640 --> 00:58:02,880 Speaker 1: So when you say when I became a tree guy, 1059 00:58:03,040 --> 00:58:07,040 Speaker 1: let's let's dig into that. You you have committed to 1060 00:58:07,120 --> 00:58:11,400 Speaker 1: advancing the world's understanding of redwood forest and the ecology 1061 00:58:11,480 --> 00:58:15,160 Speaker 1: they represent. You endowed at Humboldt State University the Ken 1062 00:58:15,280 --> 00:58:22,320 Speaker 1: Fisher Redwood Forest Ecology Chair. So that's how you, Bennett, 1063 00:58:22,440 --> 00:58:25,720 Speaker 1: is what led you to your interest in redwood forest. No, 1064 00:58:25,800 --> 00:58:27,760 Speaker 1: I was already interested in being in the way. When 1065 00:58:27,760 --> 00:58:29,600 Speaker 1: I could, I could hop over my parents back fence 1066 00:58:29,680 --> 00:58:30,720 Speaker 1: and be out in the woods when I was a 1067 00:58:30,800 --> 00:58:32,439 Speaker 1: little boy, and I just loved being in the woods, 1068 00:58:32,480 --> 00:58:34,840 Speaker 1: and I loved everything about it. And I already loved that. 1069 00:58:34,920 --> 00:58:37,160 Speaker 1: But Clarence Bennett had a huge impact on me. He 1070 00:58:37,600 --> 00:58:39,400 Speaker 1: lived not that far away and I could. I worked 1071 00:58:39,400 --> 00:58:41,000 Speaker 1: for him when I was a little kid. I mean 1072 00:58:41,040 --> 00:58:43,080 Speaker 1: I picked fruit for him and I tended his vegetable 1073 00:58:43,120 --> 00:58:46,560 Speaker 1: gardens and he was retired by then, and uh and 1074 00:58:47,240 --> 00:58:52,120 Speaker 1: he was a great guy and uh and uh and 1075 00:58:52,400 --> 00:58:54,320 Speaker 1: he's influenced me a huge But then I went to 1076 00:58:54,320 --> 00:58:57,200 Speaker 1: forestry school at Humble State, and then I decided that 1077 00:58:57,200 --> 00:58:59,160 Speaker 1: would be a lousy career, but I maintained it might 1078 00:58:59,440 --> 00:59:01,960 Speaker 1: love r us And yes, I've done that. But I also, 1079 00:59:02,120 --> 00:59:07,640 Speaker 1: you know, have finance research and Douglas for uh uh 1080 00:59:07,800 --> 00:59:15,400 Speaker 1: western spruce, uh western red cedar through Japokata. And I'm 1081 00:59:15,880 --> 00:59:18,960 Speaker 1: big on what you would view as the ecology of 1082 00:59:19,200 --> 00:59:22,160 Speaker 1: big and tall and old tree species, on the code 1083 00:59:22,240 --> 00:59:28,520 Speaker 1: discoverer of the single oldest known uh um uh sequoias 1084 00:59:28,520 --> 00:59:32,240 Speaker 1: and provirons extent in the world. What do you wi 1085 00:59:32,440 --> 00:59:34,920 Speaker 1: is this in Redwood National Park? What do you make 1086 00:59:35,040 --> 00:59:40,880 Speaker 1: of the pushback against and through pogenic global warming? And 1087 00:59:41,840 --> 00:59:44,120 Speaker 1: what's going on with e p A today. It looks 1088 00:59:44,160 --> 00:59:46,720 Speaker 1: like we're seeing a big shift at the government level 1089 00:59:47,400 --> 00:59:51,240 Speaker 1: versus the past eight years. I don't really get into 1090 00:59:51,280 --> 00:59:53,040 Speaker 1: all that stuff very much. I can tell you this, 1091 00:59:54,400 --> 00:59:57,840 Speaker 1: which nobody wants to believe, um, but I know it's 1092 00:59:57,840 --> 01:00:01,800 Speaker 1: true because I've been fundamental to to again most most big, 1093 01:00:02,560 --> 01:00:07,680 Speaker 1: most big, tall and old western tree science in recent 1094 01:00:07,800 --> 01:00:11,040 Speaker 1: years has been done under my large house, and uh, 1095 01:00:12,240 --> 01:00:16,560 Speaker 1: we've done the only long term project on the health 1096 01:00:16,800 --> 01:00:21,520 Speaker 1: of redwoods in relation to climate change. And they don't 1097 01:00:21,560 --> 01:00:24,360 Speaker 1: give a rats darn. They they just blow off whatever 1098 01:00:24,400 --> 01:00:27,400 Speaker 1: climate does that. I don't mean in the short term 1099 01:00:27,440 --> 01:00:30,160 Speaker 1: they necessary. You're talking about over thousands. They are so 1100 01:00:30,360 --> 01:00:34,160 Speaker 1: adaptive compared to other species that they know how to 1101 01:00:34,240 --> 01:00:38,560 Speaker 1: wiggle and give and move to gain competitive advantage against 1102 01:00:38,600 --> 01:00:42,800 Speaker 1: other tree species, and trees sort of invest in this 1103 01:00:43,080 --> 01:00:45,560 Speaker 1: versus that at a point in time, and they know 1104 01:00:45,840 --> 01:00:49,800 Speaker 1: they're more adaptive, Like a simperviruns is a hex eployd. 1105 01:00:50,000 --> 01:00:53,080 Speaker 1: It's got a much more complex chromosome makeup than other 1106 01:00:53,160 --> 01:00:56,760 Speaker 1: tree species and it just knows how to take advantage 1107 01:00:56,800 --> 01:01:00,440 Speaker 1: of the circumstance to it no matter what the circumstances are. Well, 1108 01:01:00,600 --> 01:01:02,280 Speaker 1: you drop a nuclear bomb on if that's not going 1109 01:01:02,320 --> 01:01:06,920 Speaker 1: to be the climate climate, not whether climate climate. So 1110 01:01:07,080 --> 01:01:10,520 Speaker 1: if it's appreciably cooler or possibly warmer, you get drought, 1111 01:01:10,720 --> 01:01:15,200 Speaker 1: you get heavy rain, you get warmer, you get colder. Now, 1112 01:01:15,320 --> 01:01:19,280 Speaker 1: mind you, that's again shy of like some catastrophe, an 1113 01:01:19,320 --> 01:01:23,680 Speaker 1: ice age, normal climate that would include the incremental changes 1114 01:01:23,800 --> 01:01:26,760 Speaker 1: that we talk about when we talk about climate change, 1115 01:01:27,160 --> 01:01:32,680 Speaker 1: I'm not again talking about you know, some some huge 1116 01:01:32,800 --> 01:01:35,720 Speaker 1: asteroid from outer space. It's the world. You know something 1117 01:01:35,840 --> 01:01:38,280 Speaker 1: even an ice age when you have glaciers coming south 1118 01:01:38,400 --> 01:01:42,520 Speaker 1: off the North Pole. Uh, that that's a once. I 1119 01:01:42,600 --> 01:01:46,439 Speaker 1: don't know how how many terms of anything that would 1120 01:01:46,520 --> 01:01:54,120 Speaker 1: happen for our grandchildren's lifetimes. Redwoods in terms of nature, Uh, 1121 01:01:54,320 --> 01:01:57,120 Speaker 1: not only redwoods. Douglas firs are more adaptive than people 1122 01:01:57,200 --> 01:02:00,880 Speaker 1: ever thought. Western red cedars more adaptive than people ever thought. 1123 01:02:01,280 --> 01:02:04,560 Speaker 1: These trees got to where they are because of that 1124 01:02:04,840 --> 01:02:08,680 Speaker 1: feature through lots of stuff in the past. And in fact, 1125 01:02:08,880 --> 01:02:16,480 Speaker 1: redwoods are gaining relative share in forests, to within their landscape, 1126 01:02:16,720 --> 01:02:22,560 Speaker 1: to other tree species. In warming climates, redwoods gaining market share. 1127 01:02:22,840 --> 01:02:27,520 Speaker 1: Redwoods dominate. So let's talk about you mentioned mentors. What 1128 01:02:27,720 --> 01:02:31,520 Speaker 1: investors influenced your approach to to invest in well, in 1129 01:02:31,600 --> 01:02:33,960 Speaker 1: a textbook sense, you know, the standards of the past. 1130 01:02:34,200 --> 01:02:38,200 Speaker 1: I mean, you know, people like Um Buffett Um, but 1131 01:02:39,040 --> 01:02:44,240 Speaker 1: people like Graham Um, my father, John Templeton personally, I 1132 01:02:44,320 --> 01:02:47,040 Speaker 1: was a big Templeton fan. I mean he was just 1133 01:02:47,160 --> 01:02:50,520 Speaker 1: a marvelous human being. Uh it seems fascinated. Oh no, 1134 01:02:50,600 --> 01:02:54,800 Speaker 1: he was a great guy. He was he was his spirituality. 1135 01:02:55,880 --> 01:03:00,040 Speaker 1: His spirituality led him to a form of int a 1136 01:03:00,400 --> 01:03:04,720 Speaker 1: calmness that's rare, uh in that he would make investment 1137 01:03:04,800 --> 01:03:08,800 Speaker 1: decisions without the emotion that so many other people had 1138 01:03:08,840 --> 01:03:11,000 Speaker 1: because he was more at peace with himself than most 1139 01:03:11,040 --> 01:03:14,800 Speaker 1: people are. That's interesting. And and of course, as we 1140 01:03:14,920 --> 01:03:17,280 Speaker 1: all know, most people's emotion as their worst enemy when 1141 01:03:17,320 --> 01:03:20,200 Speaker 1: it comes to investing. Uh. You might deal with that 1142 01:03:20,320 --> 01:03:21,800 Speaker 1: this way, and you might deal with that that way. 1143 01:03:21,880 --> 01:03:24,760 Speaker 1: But he was a very at peace human being. And 1144 01:03:25,520 --> 01:03:30,000 Speaker 1: uh so those would be uh the main ones. And uh, 1145 01:03:31,120 --> 01:03:34,360 Speaker 1: you know then that's a good run that for Oh, no, no, 1146 01:03:34,640 --> 01:03:38,640 Speaker 1: you know, I don't have anything unique. Um, you mentioned textbooks. 1147 01:03:38,720 --> 01:03:41,480 Speaker 1: Let's let's talk about books. This is the question people 1148 01:03:41,560 --> 01:03:44,520 Speaker 1: ask more than anything else. What are some of your 1149 01:03:44,760 --> 01:03:47,960 Speaker 1: favorite books? Well, my alternate favorite book is Hunting with 1150 01:03:48,040 --> 01:03:50,880 Speaker 1: Bow and Arrow by Saxton Pope. Pope was a friend 1151 01:03:50,920 --> 01:03:54,520 Speaker 1: of my grandfather's and was the father of modern bow hunting. 1152 01:03:55,040 --> 01:03:57,720 Speaker 1: And I had different impacts on me because a lot 1153 01:03:57,760 --> 01:03:59,919 Speaker 1: of other things that I like in life are sort 1154 01:04:00,040 --> 01:04:02,520 Speaker 1: like hunting. Uh. And when I was young, I actually 1155 01:04:02,600 --> 01:04:04,760 Speaker 1: was very interested in be hunting. I did be hunting 1156 01:04:04,760 --> 01:04:06,920 Speaker 1: when I was young. Um. But I also am a 1157 01:04:07,000 --> 01:04:09,880 Speaker 1: big fan of an old book by a guy named 1158 01:04:10,040 --> 01:04:14,320 Speaker 1: Frank Hibbin called Hunting American Lions, which is another book 1159 01:04:14,360 --> 01:04:17,200 Speaker 1: about chasing stuff, because ultimately, investing is a different form 1160 01:04:17,240 --> 01:04:19,560 Speaker 1: of chasing stuff. It's a metaphor. I read it over 1161 01:04:19,640 --> 01:04:22,360 Speaker 1: and over and over again. Um. Oh yeah, and you 1162 01:04:22,440 --> 01:04:24,360 Speaker 1: know what it's also both of those books are really 1163 01:04:24,400 --> 01:04:31,800 Speaker 1: good for grandchildren. Um and uh. Then I like, um, 1164 01:04:32,840 --> 01:04:35,959 Speaker 1: and you're not going to find this surprising. An old 1165 01:04:36,040 --> 01:04:40,360 Speaker 1: book by guy named Edgar Cherry called uh Redwood and 1166 01:04:41,160 --> 01:04:45,840 Speaker 1: California Forests, And there's only thirty seven known copies in 1167 01:04:45,880 --> 01:04:47,920 Speaker 1: the world, and I owned three of them. And I'm 1168 01:04:47,960 --> 01:04:50,040 Speaker 1: a big fan of that book. But you can you 1169 01:04:50,080 --> 01:04:52,320 Speaker 1: can get you can get reproductions of it on Amazon. 1170 01:04:52,520 --> 01:04:55,080 Speaker 1: So you can't get the original. No, no, you know, 1171 01:04:55,120 --> 01:04:57,040 Speaker 1: if you find one, I probably catch you ten grand 1172 01:04:57,120 --> 01:04:59,720 Speaker 1: But um, but if you find one, let me know 1173 01:04:59,800 --> 01:05:02,520 Speaker 1: what all by it. I'd corner the market in that book. 1174 01:05:02,920 --> 01:05:06,840 Speaker 1: Um uh. And then you know, when investing books, it's 1175 01:05:06,840 --> 01:05:09,120 Speaker 1: pretty much just the old standards and all the old standards. 1176 01:05:09,160 --> 01:05:11,479 Speaker 1: When I was young, you know, I pretty much read 1177 01:05:12,400 --> 01:05:14,800 Speaker 1: all of them. That I could get my hands on, 1178 01:05:15,960 --> 01:05:17,960 Speaker 1: ranging from you know, all of the standard names that 1179 01:05:18,040 --> 01:05:19,760 Speaker 1: you know, there's none, none of the standards. Give us 1180 01:05:19,920 --> 01:05:21,880 Speaker 1: give us one or two plus your plus your dad 1181 01:05:22,200 --> 01:05:25,280 Speaker 1: of course, Intelligion Investors, Security Analysis by Graham, those two 1182 01:05:25,360 --> 01:05:27,880 Speaker 1: classic gram book, my father's book, you know, Common Stocks 1183 01:05:27,920 --> 01:05:30,320 Speaker 1: and in Common Profits, which you know is still a 1184 01:05:30,640 --> 01:05:33,520 Speaker 1: great book. You have to take up any of those 1185 01:05:33,560 --> 01:05:35,320 Speaker 1: books like that and kind of adapt them in your 1186 01:05:35,360 --> 01:05:39,240 Speaker 1: mind for all of the modern technology. Uh, intuitively that's 1187 01:05:39,720 --> 01:05:41,720 Speaker 1: people kind of forget that sometimes when they read that stuff. 1188 01:05:41,760 --> 01:05:45,000 Speaker 1: Those guys wrote those things without My father operated in 1189 01:05:45,040 --> 01:05:48,040 Speaker 1: a world with a hand crank adding machine and a pencil, right, uh, 1190 01:05:48,200 --> 01:05:50,560 Speaker 1: and difference then we have a different world. But the 1191 01:05:50,680 --> 01:05:55,040 Speaker 1: principles largely apply. If you extract away, how would you 1192 01:05:55,080 --> 01:05:57,400 Speaker 1: have done things then with a pencil versus today with 1193 01:05:57,520 --> 01:06:02,560 Speaker 1: the computer, Um would be the same. But for example, 1194 01:06:02,840 --> 01:06:06,080 Speaker 1: I was always a big fan of of Jerald Lobes books, 1195 01:06:06,880 --> 01:06:09,360 Speaker 1: which a lot of people always decried and and and 1196 01:06:09,680 --> 01:06:12,600 Speaker 1: I think Jerald Lobe actually had a bigger impact on me. 1197 01:06:13,440 --> 01:06:15,360 Speaker 1: My father knew Gerald Lobe pretty well, and he did 1198 01:06:15,440 --> 01:06:19,800 Speaker 1: not like Jerald Lobe. But Jerald Lobe was actually Uh. 1199 01:06:20,520 --> 01:06:26,680 Speaker 1: Interesting in the Jerald Lobe brought understanding to commonplace investors 1200 01:06:26,760 --> 01:06:28,680 Speaker 1: that they did not have before he appeared on the 1201 01:06:28,840 --> 01:06:30,880 Speaker 1: on the on the horizon. He was in some ways 1202 01:06:31,400 --> 01:06:34,640 Speaker 1: sort of a Jim Cramer of his day. And uh, 1203 01:06:34,920 --> 01:06:37,960 Speaker 1: and there's a valuable function in that. The battle for 1204 01:06:38,120 --> 01:06:42,480 Speaker 1: investment survivals is the I couldn't pull. That's his iconic 1205 01:06:42,920 --> 01:06:45,320 Speaker 1: And then and then and then of course, oh and 1206 01:06:45,400 --> 01:06:48,160 Speaker 1: I'm having Uh I used Google. I cheated because I 1207 01:06:48,360 --> 01:06:51,840 Speaker 1: was having that same moment. There were all of the 1208 01:06:53,280 --> 01:06:59,080 Speaker 1: Adam Smith books. And then uh, there's all of the 1209 01:07:00,440 --> 01:07:04,160 Speaker 1: the Great Crash. Uh. And then there's the Hilbrunner books. 1210 01:07:04,680 --> 01:07:07,640 Speaker 1: What are the Hilbrunner books, all the economic ones, Robert 1211 01:07:07,680 --> 01:07:14,040 Speaker 1: Howe Brunner. Uh. And then of course then forgetting about those, 1212 01:07:14,160 --> 01:07:17,400 Speaker 1: you know, must reads are How to Lie with Statistics 1213 01:07:17,520 --> 01:07:21,400 Speaker 1: by Darryl Hoff Suh. I mean, if if hey, I 1214 01:07:21,520 --> 01:07:25,520 Speaker 1: encourage anybody ever to always take the what I always 1215 01:07:25,520 --> 01:07:29,040 Speaker 1: considered the core education classes, you know, which include stat 1216 01:07:29,600 --> 01:07:34,000 Speaker 1: core economics. Uh, you know, you're a calculus I mean, 1217 01:07:34,040 --> 01:07:37,520 Speaker 1: if you don't understand, if you don't understand marginality, calculus 1218 01:07:37,560 --> 01:07:40,600 Speaker 1: will get you to or you understand marginality called Kyle Brunner. 1219 01:07:41,280 --> 01:07:44,080 Speaker 1: The one book I know is The Worldly Philosophers, that's 1220 01:07:44,120 --> 01:07:46,520 Speaker 1: one of his classics. And the Making of Economic Society. 1221 01:07:46,680 --> 01:07:48,920 Speaker 1: So that's what I was gonna about to say, teaching, um, 1222 01:07:49,280 --> 01:07:52,200 Speaker 1: the essential Adam Smith, Marxism, for and Against the Making 1223 01:07:52,280 --> 01:07:55,720 Speaker 1: of economic society, the Nature and Logic of Capitalism. He 1224 01:07:55,880 --> 01:08:00,520 Speaker 1: has a run of great The Human proSP Behind the 1225 01:08:00,600 --> 01:08:04,040 Speaker 1: Veil of Economics, Visions of the Future, the Debt and 1226 01:08:04,160 --> 01:08:07,880 Speaker 1: the Deficit Force Alarms, and he's got a huge run 1227 01:08:08,000 --> 01:08:12,200 Speaker 1: of books, Five Economic Challenges. I didn't realize he was 1228 01:08:12,280 --> 01:08:18,800 Speaker 1: that so prolific. Uh. And then uh, um, if you 1229 01:08:18,840 --> 01:08:21,720 Speaker 1: can find Angus Black's two books, Angus Black is really 1230 01:08:21,800 --> 01:08:25,759 Speaker 1: Roger Lee roy Miller. Um. But Angus Black's two books, 1231 01:08:26,280 --> 01:08:32,080 Speaker 1: Radical Guide Economic Reality and The Radical Guide to Environmental Reality. Uh, 1232 01:08:32,240 --> 01:08:35,880 Speaker 1: they're actually classics. They're hard to find today. Um. But 1233 01:08:36,200 --> 01:08:39,880 Speaker 1: Roger Lee roy Miller is the great economic textbook writer. Uh. 1234 01:08:40,680 --> 01:08:44,040 Speaker 1: And I mean I think he the Devil's Covin. No, 1235 01:08:44,200 --> 01:08:48,400 Speaker 1: that's a different Angus Black, one less Radical Guide Economic 1236 01:08:48,479 --> 01:08:53,240 Speaker 1: Reality and Radicals Guide to Environmental Reality. Angus Black. Yep, 1237 01:08:53,479 --> 01:08:56,040 Speaker 1: it does a pen name that he made Uh. He 1238 01:08:56,160 --> 01:09:01,120 Speaker 1: was a universe Chicago PhD from the sixties. Uh, was 1239 01:09:01,360 --> 01:09:04,360 Speaker 1: a very good communicator. He's still around, he still exists, 1240 01:09:04,360 --> 01:09:08,439 Speaker 1: he's well, he's older now. Guide to economic well better 1241 01:09:08,479 --> 01:09:11,439 Speaker 1: than the alternately. Yeah, absolutely, A radicals guide to economic 1242 01:09:11,520 --> 01:09:15,040 Speaker 1: reality of radicals. Guide to self destruction, a radicals guide. 1243 01:09:15,680 --> 01:09:19,560 Speaker 1: So those are the two big ones, self destruction and economics. 1244 01:09:19,600 --> 01:09:22,080 Speaker 1: I heard a lecture by him once when I was young, 1245 01:09:22,439 --> 01:09:26,720 Speaker 1: and in an hour, he moved me along quite a 1246 01:09:26,760 --> 01:09:28,320 Speaker 1: lot in one hour because he was he was a 1247 01:09:28,360 --> 01:09:31,880 Speaker 1: great communicator. Uh. I mean I studied a lot of 1248 01:09:31,920 --> 01:09:34,160 Speaker 1: economics by the time I heard him, and he was 1249 01:09:34,200 --> 01:09:36,160 Speaker 1: kind of like watching all the moving parts work together. 1250 01:09:36,479 --> 01:09:39,040 Speaker 1: Suddenly you see the engine working. It just clicks. Yeah. No, 1251 01:09:39,160 --> 01:09:45,320 Speaker 1: he's a great communicator. Um and uh. And you know 1252 01:09:45,880 --> 01:09:47,760 Speaker 1: you asked me these questions, and there's so much that 1253 01:09:47,800 --> 01:09:50,560 Speaker 1: I forget about because it's been a long time. I 1254 01:09:50,640 --> 01:09:53,760 Speaker 1: warned people, these are the questions that require recall. Well, 1255 01:09:53,920 --> 01:09:55,760 Speaker 1: you know, the older you get, the more I worry 1256 01:09:55,760 --> 01:09:58,679 Speaker 1: about do I have dementia? And uh And that started 1257 01:09:58,680 --> 01:10:02,759 Speaker 1: around fifty. But I used to have an encyclopedic memory 1258 01:10:02,920 --> 01:10:05,880 Speaker 1: of album names, songs, and now I can't remember I 1259 01:10:06,000 --> 01:10:09,880 Speaker 1: left the encyclopedia. It's just it's just so, my wife 1260 01:10:09,960 --> 01:10:11,599 Speaker 1: likes to say. Well, at a certain point, your head 1261 01:10:11,640 --> 01:10:13,920 Speaker 1: gets filled up with enough facts that if you want 1262 01:10:13,960 --> 01:10:16,080 Speaker 1: to enter a new one, you gotta lose an old one. 1263 01:10:17,080 --> 01:10:20,280 Speaker 1: So UM, let me get to my last few questions 1264 01:10:20,360 --> 01:10:22,880 Speaker 1: before they come kick us out of here. Let's talk 1265 01:10:22,920 --> 01:10:26,160 Speaker 1: about what you do to keep mentally and physically fit? 1266 01:10:26,640 --> 01:10:28,280 Speaker 1: And what do you do what makes you think that 1267 01:10:28,320 --> 01:10:30,360 Speaker 1: I mentally and physically fit? Well, we were just talking 1268 01:10:30,400 --> 01:10:32,919 Speaker 1: about de mansia. What what do you do to stay entertained? 1269 01:10:33,000 --> 01:10:35,320 Speaker 1: What do you do to relax outside of the office 1270 01:10:36,120 --> 01:10:38,800 Speaker 1: other than go to the forest? Uh? Well, I do 1271 01:10:39,080 --> 01:10:41,280 Speaker 1: spend as much time as I can in the woods. 1272 01:10:42,640 --> 01:10:46,120 Speaker 1: I do try to take care of myself physically. I 1273 01:10:46,600 --> 01:10:50,759 Speaker 1: am UM. When I was very young, I get captured 1274 01:10:51,360 --> 01:10:54,000 Speaker 1: by this female and I've been a prisoner to her 1275 01:10:54,040 --> 01:10:58,800 Speaker 1: ever since. Uh, and I UM like to spend time 1276 01:10:58,840 --> 01:11:03,040 Speaker 1: with her grandchildren. Uh. They're the most marvelous human beings 1277 01:11:03,960 --> 01:11:08,960 Speaker 1: that I've ever known. And I that's They're a prime 1278 01:11:09,040 --> 01:11:14,080 Speaker 1: form of relaxation for me. And uh, although most people 1279 01:11:14,120 --> 01:11:16,719 Speaker 1: don't think of children is relaxing. Almost every game, almost 1280 01:11:16,720 --> 01:11:22,920 Speaker 1: every grandparent does, and most of them are misled in 1281 01:11:23,000 --> 01:11:26,240 Speaker 1: that regard because I do. And um they're they're just wrong. 1282 01:11:26,920 --> 01:11:31,000 Speaker 1: And uh the the you know, there's these age old features. 1283 01:11:31,040 --> 01:11:34,560 Speaker 1: I mean, how in the world these children that you 1284 01:11:34,800 --> 01:11:37,840 Speaker 1: have that don't know a darned thing, that grow up 1285 01:11:38,600 --> 01:11:42,000 Speaker 1: and then have these most miraculous children. It's like somehow 1286 01:11:42,120 --> 01:11:46,720 Speaker 1: jeans just get a generation. And um so I, Uh, 1287 01:11:47,360 --> 01:11:52,080 Speaker 1: I am a very heavy diet fan. I I used 1288 01:11:52,080 --> 01:11:54,040 Speaker 1: to weigh a lot. I used to a hundred pounds 1289 01:11:54,040 --> 01:11:57,240 Speaker 1: more than our way and I while I was younger then, 1290 01:11:57,560 --> 01:12:00,640 Speaker 1: and I worked very hard hundred pounds less than I 1291 01:12:00,760 --> 01:12:02,880 Speaker 1: was I was younger to that. Do we just trade? Yeah? 1292 01:12:02,920 --> 01:12:05,360 Speaker 1: I think so. I think I won the trade. Um 1293 01:12:05,760 --> 01:12:09,280 Speaker 1: I I so, I spend a fair effort trying to. 1294 01:12:09,960 --> 01:12:12,439 Speaker 1: I've got a very bizarre diet and I focus on 1295 01:12:12,560 --> 01:12:15,599 Speaker 1: my weight a lot. And when you say bizarre diet, 1296 01:12:17,000 --> 01:12:19,839 Speaker 1: what what makes you diet bizarre? Well, the greatest principle 1297 01:12:20,160 --> 01:12:22,880 Speaker 1: because I when I wait a lot more, I was 1298 01:12:23,000 --> 01:12:26,080 Speaker 1: prone to overeat a lot of things. My definition is 1299 01:12:26,120 --> 01:12:30,120 Speaker 1: that I try not to everat anything I like. That's 1300 01:12:30,439 --> 01:12:33,200 Speaker 1: a lot of discipline there. So you only eat things 1301 01:12:33,320 --> 01:12:35,880 Speaker 1: you don't really care for. No, that's not true. I 1302 01:12:36,040 --> 01:12:38,439 Speaker 1: try to only eat things I don't care for. When 1303 01:12:38,479 --> 01:12:41,320 Speaker 1: you travel, you get stuck with stuff. That's the worst part. 1304 01:12:41,920 --> 01:12:44,200 Speaker 1: Traveling is the toughest. But when I'm at home, I 1305 01:12:44,280 --> 01:12:48,360 Speaker 1: only eat stuff I don't like. Oh, I'm basically a 1306 01:12:48,600 --> 01:12:52,640 Speaker 1: vegetable and fruit guy. And then for I eat a 1307 01:12:52,720 --> 01:12:56,479 Speaker 1: handful of walnuts every day at home, and then I 1308 01:12:56,720 --> 01:12:59,880 Speaker 1: have to drink some milk for calcium. And I also, 1309 01:13:00,160 --> 01:13:02,240 Speaker 1: you know, a minuteing vitamins and all that kind of nonsense. 1310 01:13:02,560 --> 01:13:06,920 Speaker 1: But stay with the let's skip the vitamins unless you 1311 01:13:07,000 --> 01:13:10,559 Speaker 1: really do radical calcium pills? Are you doing? Like when 1312 01:13:10,560 --> 01:13:12,240 Speaker 1: you get older? When you get older, you're gonna worry 1313 01:13:12,240 --> 01:13:14,840 Speaker 1: about Austina. You're not that much older than me. I'm 1314 01:13:14,840 --> 01:13:16,639 Speaker 1: gonna tell you, I'm not that far away. I don't 1315 01:13:16,680 --> 01:13:18,400 Speaker 1: know how old you are, Berry, I know how old 1316 01:13:18,439 --> 01:13:20,519 Speaker 1: I am. That's the key thing is knowing yourself. I'm 1317 01:13:20,520 --> 01:13:22,960 Speaker 1: sixty six. I was gonna say mid sixties, the most 1318 01:13:23,080 --> 01:13:25,280 Speaker 1: early sixties, and I'd like to live in this thirty 1319 01:13:25,360 --> 01:13:27,000 Speaker 1: years and have that be a good life. And so 1320 01:13:27,200 --> 01:13:28,960 Speaker 1: it's spent a lot of time taking care myself. The 1321 01:13:29,040 --> 01:13:31,280 Speaker 1: old joke. It's not the years, it's the miles. That's 1322 01:13:31,320 --> 01:13:34,360 Speaker 1: the like. I'd like to have both. I'd like to 1323 01:13:34,360 --> 01:13:38,479 Speaker 1: have years and miles and uh so again, I walk 1324 01:13:38,520 --> 01:13:41,559 Speaker 1: a lot. On average, I walk about twenty miles a week. 1325 01:13:42,560 --> 01:13:45,320 Speaker 1: I love this thing, even though it's annoying, because it 1326 01:13:45,479 --> 01:13:47,880 Speaker 1: gives me a baseline of how much I'm walking around. 1327 01:13:48,280 --> 01:13:50,240 Speaker 1: And they want you to do ten thousand steps a 1328 01:13:50,320 --> 01:13:54,479 Speaker 1: day and I'm pretty consistently doing fifteen thousand. I think 1329 01:13:54,560 --> 01:13:56,720 Speaker 1: the typing is probably sets it off a little bit. 1330 01:13:57,680 --> 01:13:59,439 Speaker 1: Maybe I'm cheating a little bit. I take it off 1331 01:13:59,680 --> 01:14:01,840 Speaker 1: as the equivalent when when we were young, when they 1332 01:14:02,000 --> 01:14:03,960 Speaker 1: when they actually had phone books and you let your 1333 01:14:04,000 --> 01:14:07,400 Speaker 1: fingers through the walking white. But it's every now and then. 1334 01:14:07,479 --> 01:14:11,240 Speaker 1: I'll there days when young people don't know about phone books. 1335 01:14:11,320 --> 01:14:14,800 Speaker 1: No they don't they I told people about the post office. 1336 01:14:14,840 --> 01:14:17,000 Speaker 1: People don't understand about you know, you could be able 1337 01:14:17,040 --> 01:14:18,679 Speaker 1: to go to this building and give them a letter 1338 01:14:19,080 --> 01:14:20,840 Speaker 1: and they would send it somewhere like what do you 1339 01:14:20,880 --> 01:14:24,439 Speaker 1: mean a letter like t or people don't understand how 1340 01:14:24,520 --> 01:14:28,519 Speaker 1: it It's amazing to watch the transition, and we've spent 1341 01:14:28,720 --> 01:14:33,680 Speaker 1: enough time watching the next generation come in that we 1342 01:14:33,960 --> 01:14:36,679 Speaker 1: learned how to use computers. We've adapted to them. Computers 1343 01:14:36,720 --> 01:14:40,000 Speaker 1: are just part of the background. There's always been computers 1344 01:14:40,080 --> 01:14:43,600 Speaker 1: to them, so it's a very different interaction. To me, 1345 01:14:43,680 --> 01:14:46,120 Speaker 1: it's this is still a thing of joy and wonder. 1346 01:14:46,439 --> 01:14:48,960 Speaker 1: To them, it just what do you mean it's a computer. 1347 01:14:49,000 --> 01:14:52,719 Speaker 1: There's that's supposed to be mobile, right, Well, the piece 1348 01:14:52,800 --> 01:14:54,800 Speaker 1: of glass that you carry around with you is a 1349 01:14:54,840 --> 01:14:59,160 Speaker 1: computer to them. But to us it's a music. Yeah, 1350 01:14:59,320 --> 01:15:01,680 Speaker 1: And to them it's just part of the background. All right. 1351 01:15:01,720 --> 01:15:03,160 Speaker 1: Before they throw us out, let me get to my 1352 01:15:03,360 --> 01:15:06,720 Speaker 1: last speaking. Think of what you think of how my 1353 01:15:07,200 --> 01:15:13,200 Speaker 1: great grandfather would have thought about life. If my grandfather 1354 01:15:13,360 --> 01:15:15,880 Speaker 1: could have told him about truly what he would see 1355 01:15:15,960 --> 01:15:18,840 Speaker 1: by the time he died in the nineteen fifties, my 1356 01:15:19,000 --> 01:15:22,040 Speaker 1: great grandfather would have thought that my grandfather was out 1357 01:15:22,120 --> 01:15:25,040 Speaker 1: of his gourd. And now just from the fifties to today, 1358 01:15:25,640 --> 01:15:31,639 Speaker 1: it's ten x's. Although my grandfather's generation saw more relative change, 1359 01:15:32,040 --> 01:15:34,880 Speaker 1: that's ute change, that's right. They went from They went 1360 01:15:34,960 --> 01:15:39,879 Speaker 1: from late industrial to late electronic, early electronic too late electronic, 1361 01:15:39,920 --> 01:15:42,840 Speaker 1: to early computers. My grandfather was born in seventy five, 1362 01:15:42,880 --> 01:15:46,080 Speaker 1: before the Industrial Revolution, took hold and the industal revolutions 1363 01:15:46,439 --> 01:15:50,080 Speaker 1: eighties thing in America, and so the steam engine is 1364 01:15:50,120 --> 01:15:52,880 Speaker 1: really a thing of his youth in terms of mass 1365 01:15:52,960 --> 01:15:57,360 Speaker 1: in America. That transition to go to there, to radio, 1366 01:15:58,080 --> 01:16:04,040 Speaker 1: to telephones, to television, to airplanes, to actually know that 1367 01:16:04,160 --> 01:16:07,560 Speaker 1: computers existed, not that the computers would exist like we 1368 01:16:07,600 --> 01:16:09,439 Speaker 1: have them now, but that they existed in the way 1369 01:16:09,479 --> 01:16:12,760 Speaker 1: IBM and would have had them in as opposed to. 1370 01:16:13,320 --> 01:16:16,160 Speaker 1: So let me share something fascinating with you about airplanes. 1371 01:16:16,560 --> 01:16:18,920 Speaker 1: We were talking about the other day in the office 1372 01:16:19,280 --> 01:16:22,120 Speaker 1: about bad news and good news, and one of the 1373 01:16:22,200 --> 01:16:26,439 Speaker 1: examples that I used of good news, my head of research, 1374 01:16:26,520 --> 01:16:28,439 Speaker 1: Mike Batnick, did this whole thing about all this good 1375 01:16:28,479 --> 01:16:31,320 Speaker 1: news on the chart, and most of the good news 1376 01:16:31,400 --> 01:16:33,880 Speaker 1: that came out you would never have thought twice about 1377 01:16:34,360 --> 01:16:38,040 Speaker 1: over the past decade because it's just a tiny little thing. 1378 01:16:38,200 --> 01:16:40,800 Speaker 1: And you know what, even when the iPhone first came out, 1379 01:16:40,840 --> 01:16:42,960 Speaker 1: no one really paid much attention to how big a 1380 01:16:43,040 --> 01:16:46,240 Speaker 1: deal is it? But think about flight and think about 1381 01:16:46,400 --> 01:16:50,080 Speaker 1: nineteen o three Kitty Hawk. Now that North Carolina has one, 1382 01:16:50,280 --> 01:16:53,000 Speaker 1: uh the n c A A. It's it's so I'll 1383 01:16:53,040 --> 01:16:56,679 Speaker 1: tie it into recent news. There were no newspaper articles. 1384 01:16:56,760 --> 01:17:00,120 Speaker 1: It never made the New York Times. They flew I 1385 01:17:00,200 --> 01:17:02,200 Speaker 1: want to say, a half dozen or a dozen times 1386 01:17:02,720 --> 01:17:06,040 Speaker 1: before the local whatever you want to call it, newspaper 1387 01:17:06,200 --> 01:17:09,839 Speaker 1: or newsletter or whatever, had it like a paragraph, mentioned 1388 01:17:09,880 --> 01:17:13,880 Speaker 1: a blurb. The Right Brothers managed to get their heavier 1389 01:17:13,920 --> 01:17:17,559 Speaker 1: than aircraft to fly fifty yards. They've done it five 1390 01:17:17,680 --> 01:17:21,120 Speaker 1: or six times. Whoop do you do? And yet think 1391 01:17:21,160 --> 01:17:24,560 Speaker 1: of the impact of that. So even when you're in 1392 01:17:24,600 --> 01:17:28,840 Speaker 1: the midst of an incredible technological change, you may not 1393 01:17:28,960 --> 01:17:33,000 Speaker 1: even be aware of the significance of it. Forget centuries later, 1394 01:17:33,200 --> 01:17:35,400 Speaker 1: just a few decades later. It's it's I find that 1395 01:17:35,520 --> 01:17:39,519 Speaker 1: just fascinating it. I'm pretty sure that people like the 1396 01:17:39,680 --> 01:17:43,120 Speaker 1: Right Brothers couldn't have predicted exactly how it would go, 1397 01:17:43,760 --> 01:17:45,240 Speaker 1: but that they would have thought that it would have 1398 01:17:45,280 --> 01:17:49,080 Speaker 1: been an important thing. This is significant. They would have 1399 01:17:49,200 --> 01:17:51,679 Speaker 1: known it was something that mattered. They wouldn't know exactly 1400 01:17:51,760 --> 01:17:53,559 Speaker 1: how all that well. I don't think anybody can forecast 1401 01:17:53,600 --> 01:17:56,400 Speaker 1: all those little wiggles with accuracy in the slightest, in 1402 01:17:56,520 --> 01:17:58,280 Speaker 1: the same way that you know. When I was listening 1403 01:17:58,320 --> 01:18:02,320 Speaker 1: to John Bogol yesterday, he was talking about with confidence 1404 01:18:02,439 --> 01:18:05,680 Speaker 1: that yes, for five years this wasn't working, but he 1405 01:18:05,800 --> 01:18:08,080 Speaker 1: was sure it was the right thing to do, and 1406 01:18:08,160 --> 01:18:13,080 Speaker 1: that eventually if we could survive. But that wouldn't say 1407 01:18:13,120 --> 01:18:15,000 Speaker 1: that the thing was wrong. It just implied that if 1408 01:18:15,000 --> 01:18:16,880 Speaker 1: he couldn't survive, someone else would probably have to do 1409 01:18:16,960 --> 01:18:19,320 Speaker 1: it later, and that you'd have to be some crazy 1410 01:18:19,400 --> 01:18:22,320 Speaker 1: guy like he was to do that, which has always 1411 01:18:22,360 --> 01:18:25,240 Speaker 1: been true of anybody that was ever entrepreneurial about anything. Sure, 1412 01:18:25,400 --> 01:18:27,639 Speaker 1: you know, they're always kind of the wing, that crazy guy. 1413 01:18:28,080 --> 01:18:31,400 Speaker 1: And and and you managed to do it before, you know, 1414 01:18:31,479 --> 01:18:33,680 Speaker 1: the right brothers probably didn't cash in a whole lot 1415 01:18:33,800 --> 01:18:36,559 Speaker 1: on flight um Bogel is one of the lucky people 1416 01:18:36,720 --> 01:18:39,560 Speaker 1: started young enough that forty years later. You know, the 1417 01:18:39,720 --> 01:18:43,200 Speaker 1: the other one that they awarded yesterday in the icon mode. 1418 01:18:43,240 --> 01:18:44,680 Speaker 1: I mean they had a bunch of us that were 1419 01:18:44,800 --> 01:18:47,160 Speaker 1: awarded in the innovator mode, and then they had these 1420 01:18:47,200 --> 01:18:49,000 Speaker 1: two that were awarded in the icon mode. And the 1421 01:18:49,080 --> 01:18:51,600 Speaker 1: other was Chuck Schwab. And the same thing in a 1422 01:18:51,800 --> 01:18:54,360 Speaker 1: way was true with Schwab when he first started the 1423 01:18:54,479 --> 01:18:57,479 Speaker 1: five Well, when he first started it wasn't a discount 1424 01:18:57,520 --> 01:19:00,360 Speaker 1: brokerage firm, which first started as a standard little Brook firm, 1425 01:19:00,400 --> 01:19:03,760 Speaker 1: that he then got the idea for the discount after 1426 01:19:03,880 --> 01:19:06,840 Speaker 1: he started the firm, and then he went with that. 1427 01:19:07,560 --> 01:19:09,960 Speaker 1: And again in the early days, Schwab of course was 1428 01:19:10,080 --> 01:19:14,360 Speaker 1: laughed at in San Francisco where I was in my time. 1429 01:19:14,800 --> 01:19:16,960 Speaker 1: I mean, I'm a young guy in the realm of 1430 01:19:17,080 --> 01:19:19,439 Speaker 1: endeavor at the time, and people laughed at Schwab in 1431 01:19:19,520 --> 01:19:23,840 Speaker 1: those days. And of course a lot of time people 1432 01:19:23,880 --> 01:19:27,600 Speaker 1: start businesses that don't work and fail. There's lots of 1433 01:19:27,640 --> 01:19:31,519 Speaker 1: failures for every success. And yet Schwab was a tremendous 1434 01:19:31,560 --> 01:19:35,040 Speaker 1: success and a continuous innovator. How old does Chuck Schuab 1435 01:19:35,120 --> 01:19:40,840 Speaker 1: these days, Uh, I don't know exactly, but he's uh late, 1436 01:19:41,200 --> 01:19:45,080 Speaker 1: very late seventies. I don't know exactly. You know, any 1437 01:19:45,120 --> 01:19:46,880 Speaker 1: big could looked that up on Wickham. He's he's no 1438 01:19:47,080 --> 01:19:49,040 Speaker 1: longer than you don't see him as the face of 1439 01:19:49,080 --> 01:19:51,720 Speaker 1: the firm as much, but he you know, you've seen 1440 01:19:51,880 --> 01:19:54,400 Speaker 1: him around for a long long time. He had a 1441 01:19:54,479 --> 01:19:57,200 Speaker 1: huge impact as an innovator for a long time, which 1442 01:19:57,240 --> 01:20:00,679 Speaker 1: is how he became an icon. But again that again 1443 01:20:01,160 --> 01:20:03,080 Speaker 1: that this is this notion of the you know, the 1444 01:20:03,200 --> 01:20:06,639 Speaker 1: instant success. The instant success does not happen. Even Bill 1445 01:20:06,720 --> 01:20:10,000 Speaker 1: Gates and Microsoft took a long time, had a huge 1446 01:20:10,080 --> 01:20:11,920 Speaker 1: impact on the world, but it took a long time 1447 01:20:11,960 --> 01:20:15,920 Speaker 1: before the world fully was doing that. Uh in scale 1448 01:20:16,439 --> 01:20:20,320 Speaker 1: seventy he is seventy nine years old. I was more 1449 01:20:20,360 --> 01:20:22,640 Speaker 1: or less right to the last two questions before they 1450 01:20:22,720 --> 01:20:26,200 Speaker 1: come throw us out of here. Uh So, millennial, a 1451 01:20:26,280 --> 01:20:30,120 Speaker 1: recent college graduate comes to you and says, I'm interested 1452 01:20:30,200 --> 01:20:33,360 Speaker 1: in getting into the world to finance. What sort of 1453 01:20:33,400 --> 01:20:36,479 Speaker 1: advice would you give them? Talk to people that are 1454 01:20:36,479 --> 01:20:38,519 Speaker 1: about five years older than you are, that have done it, 1455 01:20:38,600 --> 01:20:42,120 Speaker 1: because they know more about it than I do. Older 1456 01:20:42,200 --> 01:20:44,880 Speaker 1: than them, people would have done it recently, So you're 1457 01:20:44,880 --> 01:20:47,000 Speaker 1: saying it's a young man's game, not a or young 1458 01:20:47,120 --> 01:20:49,920 Speaker 1: person's game. I know the course that they have to 1459 01:20:50,040 --> 01:20:52,280 Speaker 1: follow is different than the course that I had to 1460 01:20:52,360 --> 01:20:55,120 Speaker 1: follow once upon a time, because the world has evolved 1461 01:20:55,640 --> 01:20:59,280 Speaker 1: and the people that have done it recently understand that. 1462 01:21:00,040 --> 01:21:03,360 Speaker 1: So seek out young mentors for what I gotta do, 1463 01:21:04,200 --> 01:21:07,400 Speaker 1: and then simultaneously remember that it's a long run. It's 1464 01:21:07,439 --> 01:21:10,680 Speaker 1: a long life. The people that think they're gonna hit 1465 01:21:10,800 --> 01:21:13,840 Speaker 1: big and you know, go retire in five years are 1466 01:21:13,880 --> 01:21:15,680 Speaker 1: barking up the wrong tree. Because that's not really the 1467 01:21:15,720 --> 01:21:17,720 Speaker 1: way the world works. You're in it for the wrong 1468 01:21:17,800 --> 01:21:21,040 Speaker 1: motivation if you think you're going to make If you're 1469 01:21:21,040 --> 01:21:23,240 Speaker 1: just in it to make money, you're doing the wrong thing. 1470 01:21:23,400 --> 01:21:25,799 Speaker 1: You know. I'm, as you said in the introduction, supposed 1471 01:21:25,840 --> 01:21:28,719 Speaker 1: to be something like the four richest person in America, 1472 01:21:29,360 --> 01:21:31,960 Speaker 1: and it was never about money for me. The money 1473 01:21:32,120 --> 01:21:34,439 Speaker 1: is a result. It's not a consistent theme I hear 1474 01:21:34,520 --> 01:21:37,960 Speaker 1: from people who I interview. The reality is, if you're 1475 01:21:37,960 --> 01:21:41,519 Speaker 1: doing it for the money, you're not really doing it 1476 01:21:41,920 --> 01:21:46,519 Speaker 1: for the customers. And if you're doing it for something 1477 01:21:46,600 --> 01:21:49,200 Speaker 1: other than the customers, you're barking up the wrong tree. 1478 01:21:49,320 --> 01:21:52,120 Speaker 1: In the longer term, the the you mentioned how long 1479 01:21:52,240 --> 01:21:54,519 Speaker 1: it is. I love the expression the days are long, 1480 01:21:54,640 --> 01:21:58,280 Speaker 1: but the decades are short, and that that really yeah, 1481 01:21:58,400 --> 01:22:00,639 Speaker 1: I really like that. I know know what I'm stealing 1482 01:22:00,680 --> 01:22:03,280 Speaker 1: that from, but I'm sure some reader will tell us. 1483 01:22:03,360 --> 01:22:06,200 Speaker 1: And and lastly, what is it that you know about 1484 01:22:06,280 --> 01:22:08,800 Speaker 1: the world of investing in markets that you wish you 1485 01:22:08,880 --> 01:22:12,200 Speaker 1: knew thirty five years ago when you were first getting 1486 01:22:12,240 --> 01:22:17,120 Speaker 1: your legs underneath you. Uh So, maybe this sounds strange 1487 01:22:17,200 --> 01:22:21,440 Speaker 1: to you, but I wish that I would have understood. 1488 01:22:22,040 --> 01:22:23,800 Speaker 1: And I don't know it's thirty five years ago, but 1489 01:22:23,880 --> 01:22:26,920 Speaker 1: twenty years ago, I wish that I would have understood 1490 01:22:27,120 --> 01:22:30,960 Speaker 1: the course in the transition that would occur to journalism. Really, 1491 01:22:32,960 --> 01:22:37,120 Speaker 1: that's interesting because I think journalism has big impacts for 1492 01:22:37,200 --> 01:22:40,679 Speaker 1: good and for bad on sentiment in investing, no doubt, 1493 01:22:40,800 --> 01:22:43,320 Speaker 1: and that that world has morphed quite a lot in 1494 01:22:43,400 --> 01:22:46,000 Speaker 1: ways that I try to understand, but I'm not sure 1495 01:22:46,000 --> 01:22:49,080 Speaker 1: I fully do, and but I work out it a lot. 1496 01:22:49,680 --> 01:22:53,960 Speaker 1: And um, the fact is that in an awful lot 1497 01:22:54,000 --> 01:22:57,240 Speaker 1: of what we see in journalism today, journalism has lost 1498 01:22:57,320 --> 01:23:00,120 Speaker 1: its way and forgotten the core principles of journalism, and 1499 01:23:00,280 --> 01:23:03,599 Speaker 1: so much of journalism today does not start the way 1500 01:23:03,880 --> 01:23:06,960 Speaker 1: it did when I study journalism in school, which is 1501 01:23:07,040 --> 01:23:10,800 Speaker 1: to lead with the five when, why and how? And 1502 01:23:11,080 --> 01:23:13,640 Speaker 1: from that lack in the lead, which was why it 1503 01:23:13,720 --> 01:23:17,920 Speaker 1: was always supposed to be other than the opinion page. Uh, 1504 01:23:18,360 --> 01:23:20,760 Speaker 1: I mean opinion opinion. The news stories are so to 1505 01:23:20,840 --> 01:23:23,920 Speaker 1: lead with a five Disney age. Uh. Now so often 1506 01:23:23,960 --> 01:23:25,960 Speaker 1: you look at the news and you can't actually find 1507 01:23:26,040 --> 01:23:29,280 Speaker 1: early in the story anything but opinion, and it's, you know, 1508 01:23:29,400 --> 01:23:31,280 Speaker 1: thought to be. In journalism school, they teach you to 1509 01:23:31,439 --> 01:23:35,320 Speaker 1: be hard hitting journalists, and so the stories are hard hitting, 1510 01:23:35,400 --> 01:23:37,880 Speaker 1: but its opinion, and that creates a lot of shrill 1511 01:23:38,360 --> 01:23:41,360 Speaker 1: that becomes noise to people, and people have a hard 1512 01:23:41,479 --> 01:23:44,200 Speaker 1: time getting to the facts. They get impatient. And so 1513 01:23:44,280 --> 01:23:48,080 Speaker 1: then you can parallel out with gallops. Uh now, uh, 1514 01:23:48,520 --> 01:23:52,080 Speaker 1: twenty five year history of tracking media credibility by the 1515 01:23:52,160 --> 01:23:55,559 Speaker 1: same standards and seeing media credibility fall, and as media 1516 01:23:55,600 --> 01:23:58,840 Speaker 1: credibility falls, not in a straight line but in an 1517 01:23:58,920 --> 01:24:03,479 Speaker 1: irregular line. Obviously facts and circumstances contribute and to tract 1518 01:24:03,520 --> 01:24:06,479 Speaker 1: from that, but as that has happened, it changes the 1519 01:24:06,600 --> 01:24:08,880 Speaker 1: impact of media on sentiment. And I wish I had 1520 01:24:08,960 --> 01:24:12,200 Speaker 1: understood that better because I spast time studying sentiment and 1521 01:24:12,400 --> 01:24:15,720 Speaker 1: media twenty five years ago. But I never anticipated I mean, 1522 01:24:15,760 --> 01:24:17,479 Speaker 1: if you just look at worlds that you and I know, 1523 01:24:17,920 --> 01:24:19,640 Speaker 1: and what's happened to things like I was talking to 1524 01:24:19,760 --> 01:24:23,600 Speaker 1: Jim Cramer this morning and uh early, and he was 1525 01:24:23,840 --> 01:24:26,120 Speaker 1: recalling to my memory that when he started writing, he 1526 01:24:26,160 --> 01:24:28,400 Speaker 1: started writing for Smart Money, And then I thought about 1527 01:24:28,400 --> 01:24:30,160 Speaker 1: why I haven't thought about Smart Money magazine in a 1528 01:24:30,280 --> 01:24:32,560 Speaker 1: long time. They haven't been around. Yeah, exactly, That's the 1529 01:24:32,600 --> 01:24:36,600 Speaker 1: point the world publication the world just you know, and 1530 01:24:37,160 --> 01:24:40,320 Speaker 1: you know, you guys here at Bloomberg bought Business Week 1531 01:24:40,360 --> 01:24:44,280 Speaker 1: for a dollar literally a dollar plus thirty eight million 1532 01:24:44,280 --> 01:24:47,519 Speaker 1: dollars worth a dead of memory is yeah. But you know, 1533 01:24:47,720 --> 01:24:50,080 Speaker 1: if you think about it, this whole world has had 1534 01:24:50,160 --> 01:24:53,080 Speaker 1: these features and you know, as we speak, time warners 1535 01:24:53,400 --> 01:24:57,320 Speaker 1: up for sale and uh, you know the world. You 1536 01:24:57,400 --> 01:25:01,960 Speaker 1: look at the transition and evolution of The New York Times, 1537 01:25:02,000 --> 01:25:05,040 Speaker 1: which has been going downhill at an irregular pace. I mean, 1538 01:25:05,280 --> 01:25:09,400 Speaker 1: recently they've gotten a trump uptick. That's a huge uptick. Yeah, 1539 01:25:09,520 --> 01:25:11,880 Speaker 1: but it's a short term phenomena. The trend for that 1540 01:25:12,120 --> 01:25:17,719 Speaker 1: has been downhill for twenty years. And well, everything that's 1541 01:25:17,760 --> 01:25:23,280 Speaker 1: printed on pulp trees and and not digital has become 1542 01:25:24,360 --> 01:25:30,360 Speaker 1: uh dinosaur and his fading. Uh. And then with that, uh, 1543 01:25:30,880 --> 01:25:34,800 Speaker 1: you know, the nature of employment inside journalism has shifted. 1544 01:25:34,840 --> 01:25:36,840 Speaker 1: I mean, Bloomberg is really quite an exception to the 1545 01:25:36,920 --> 01:25:41,040 Speaker 1: general It's a data services company with the media attached 1546 01:25:41,040 --> 01:25:43,679 Speaker 1: to it. And and and you know, so Thompson Reuters 1547 01:25:43,680 --> 01:25:45,960 Speaker 1: has a little bit of that too. Um. But the 1548 01:25:46,120 --> 01:25:51,600 Speaker 1: traditional core journalism world as it existed has shifted to 1549 01:25:51,720 --> 01:25:55,960 Speaker 1: where there's not enough compensation to justify heavy research. In 1550 01:25:56,080 --> 01:26:03,120 Speaker 1: most places, the channels are more narrow uh, compensations constrained. Uh. 1551 01:26:03,320 --> 01:26:06,639 Speaker 1: And from that, you know, one should be neither hostile 1552 01:26:06,760 --> 01:26:09,120 Speaker 1: nor sympathetic to journalists one way or the other anymore 1553 01:26:09,160 --> 01:26:13,360 Speaker 1: than other category. But from that, the output has moved 1554 01:26:13,439 --> 01:26:16,840 Speaker 1: evermore to this principle of trying to gain short term 1555 01:26:16,960 --> 01:26:21,480 Speaker 1: attention to shrillness at the loss of longer term credibility, 1556 01:26:21,800 --> 01:26:24,759 Speaker 1: which then forces the investor to find ways to become 1557 01:26:25,120 --> 01:26:28,320 Speaker 1: more self reliant. No doubt about that, you know, And 1558 01:26:28,439 --> 01:26:32,360 Speaker 1: that need to become self reliant alters the way we 1559 01:26:32,400 --> 01:26:35,840 Speaker 1: should think about sentiment. That's interesting. You know, you have 1560 01:26:36,080 --> 01:26:39,840 Speaker 1: some new formats coming out, like pro Publica or even 1561 01:26:39,880 --> 01:26:44,000 Speaker 1: The Guardian, which was basically turned into a giant trust 1562 01:26:44,680 --> 01:26:48,519 Speaker 1: um with its own funding as opposed to having to 1563 01:26:48,600 --> 01:26:52,080 Speaker 1: sell newspapers. They still sell newspapers, but they're now a 1564 01:26:52,160 --> 01:26:56,479 Speaker 1: self funded, freestanding entity. Same with Pro Publica. It's an 1565 01:26:56,520 --> 01:27:01,559 Speaker 1: outside investment that allows them to be free standing. Who 1566 01:27:01,640 --> 01:27:04,080 Speaker 1: knows what's going to happen to the ft or the 1567 01:27:04,160 --> 01:27:07,679 Speaker 1: New York Times. I think the Wall Street Journal is stable, 1568 01:27:08,000 --> 01:27:10,880 Speaker 1: but is we move more towards indexing? Who knows? You 1569 01:27:10,920 --> 01:27:13,960 Speaker 1: know well. I was in London last week talking to 1570 01:27:14,120 --> 01:27:17,160 Speaker 1: John Redding and the CEO of the FT, and they 1571 01:27:17,200 --> 01:27:19,280 Speaker 1: seem to be pretty on top of No. No, I think, 1572 01:27:19,479 --> 01:27:22,480 Speaker 1: I think they're doing great. But they have learned likewise 1573 01:27:23,040 --> 01:27:25,080 Speaker 1: that they have to do a multiplicity of things and 1574 01:27:25,160 --> 01:27:28,120 Speaker 1: that they have to adapt. And so there's the one 1575 01:27:28,160 --> 01:27:29,760 Speaker 1: part of the world that I think, you know people 1576 01:27:29,800 --> 01:27:32,599 Speaker 1: readily except, which is that they got to be strong 1577 01:27:32,840 --> 01:27:35,400 Speaker 1: in the online side. And then the other part that 1578 01:27:35,439 --> 01:27:37,839 Speaker 1: they've done very well is to build up their conference business. 1579 01:27:38,360 --> 01:27:43,080 Speaker 1: And there's actually a cyclically regular need increasingly for people 1580 01:27:43,160 --> 01:27:47,400 Speaker 1: to get together, because getting together is another form of 1581 01:27:48,520 --> 01:27:51,400 Speaker 1: increasing your credibility and what's going on, you know, World 1582 01:27:51,439 --> 01:27:54,720 Speaker 1: War Ide, less trust media. If I get together with 1583 01:27:54,880 --> 01:27:58,479 Speaker 1: people and I hear stories and we swap information, I 1584 01:27:59,120 --> 01:28:03,040 Speaker 1: can gain greater sense of confidence in what I'm doing. 1585 01:28:03,200 --> 01:28:06,840 Speaker 1: So their conference business has been growing and I and 1586 01:28:07,040 --> 01:28:09,960 Speaker 1: and of course John in particular is a big fan 1587 01:28:10,080 --> 01:28:14,280 Speaker 1: of uh the importance of print being a piece of 1588 01:28:14,320 --> 01:28:19,240 Speaker 1: the puzzle, the puzzle because it provides tangibility. And so 1589 01:28:19,439 --> 01:28:21,920 Speaker 1: I don't see the pink, which is you know, the 1590 01:28:22,000 --> 01:28:25,040 Speaker 1: legendary name for the FT. I don't see the pink disappearing. 1591 01:28:25,479 --> 01:28:27,200 Speaker 1: But it's thinner than it used to be, and it's 1592 01:28:27,320 --> 01:28:29,640 Speaker 1: done differently than it used to be, and that's necessary 1593 01:28:29,880 --> 01:28:32,600 Speaker 1: in this era. But more and more, you know, I 1594 01:28:32,680 --> 01:28:34,880 Speaker 1: just think of the world of local newspapers that used 1595 01:28:34,880 --> 01:28:37,040 Speaker 1: to exist, most of which has been completely wiped out, 1596 01:28:37,120 --> 01:28:40,160 Speaker 1: going away, going to digital. When you think about eBay 1597 01:28:40,240 --> 01:28:44,120 Speaker 1: replacing classified ads along with Gregg'slist, well you just took 1598 01:28:44,160 --> 01:28:47,920 Speaker 1: the heart of the financial business model away from it. 1599 01:28:48,000 --> 01:28:51,120 Speaker 1: We we could digress about this. I know they're literally 1600 01:28:51,160 --> 01:28:53,200 Speaker 1: throwing us out of here in five minutes. Ken, thank 1601 01:28:53,240 --> 01:28:55,280 Speaker 1: you so much for being so generous with your time, 1602 01:28:55,479 --> 01:28:58,519 Speaker 1: Thanks for having me. And uh for those of you 1603 01:28:58,600 --> 01:29:02,719 Speaker 1: who are listening, Um, we have been speaking, still listening 1604 01:29:02,800 --> 01:29:04,519 Speaker 1: to us after all this time, we have been speaking 1605 01:29:04,600 --> 01:29:09,080 Speaker 1: with Ken Fisher of Fisher Investments. If you enjoy this conversation, 1606 01:29:09,200 --> 01:29:10,760 Speaker 1: be sure and look up an inch or down an 1607 01:29:10,840 --> 01:29:13,640 Speaker 1: inch on Apple iTunes and you can see any of 1608 01:29:13,720 --> 01:29:17,360 Speaker 1: the other hundred and forty three or so of these 1609 01:29:17,400 --> 01:29:20,759 Speaker 1: conversations that that we have had. I would be remiss 1610 01:29:20,960 --> 01:29:24,200 Speaker 1: if I did not thank my head of research, Michael 1611 01:29:24,240 --> 01:29:27,280 Speaker 1: bat Nick, for helping put together some of the subjects 1612 01:29:27,560 --> 01:29:31,519 Speaker 1: and questions we discussed today along with Taylor Riggs, who 1613 01:29:31,840 --> 01:29:37,160 Speaker 1: is my producer booker. UM, I'm Barry Ridholtz. You're listening 1614 01:29:37,320 --> 01:29:41,240 Speaker 1: to Masters in Business on Bloomberg Radio. Our world is 1615 01:29:41,240 --> 01:29:43,599 Speaker 1: always moving, so with Mery Lynch you can get access 1616 01:29:43,640 --> 01:29:46,559 Speaker 1: to financial guidance online, in person, or through the Apple. 1617 01:29:46,680 --> 01:29:48,960 Speaker 1: Visit mL dot com and learn more about Meryll Lynch. 1618 01:29:49,000 --> 01:29:51,639 Speaker 1: An affiliated Bank of America, Mary Lynch makes available pducts 1619 01:29:51,640 --> 01:29:53,960 Speaker 1: and services offered by Merrill Lynch. Pierce Federan Smith, Incorporated, 1620 01:29:54,000 --> 01:29:55,519 Speaker 1: a Registered broker dealer remember s I PC