Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.
Speaker 1: Welcome to the podcast this week, we are excited and
Speaker 1: thrilled to have a very fascinating and interesting guests. His
Speaker 1: name is Mark Cuban. You probably know him as the
Speaker 1: owner of the Dallas Mavericks, or if you watch ABC's
Speaker 1: Shark Tank, he's one of the sharks. Or if you're
Speaker 1: at all a fan of internet history, you will know
Speaker 1: that in he sold broadcast dot Com to Yahoo for
Speaker 1: five point seven billion dollars with a B and then
Speaker 1: immediately or as soon as he was allowed to collard
Speaker 1: his share of that in order to protect himself from
Speaker 1: what he saw as a popping bubble. And that turned
Speaker 1: out to be a very savvy move. When the market collapse,
Speaker 1: it didn't hurt him at all. He took his proceeds
Speaker 1: at the time, bought a Gulf Stream, bought the Dallas Mavericks,
Speaker 1: made a bunch of other investments, and proceeded to uh
Speaker 1: live large. And the conversation we had with him was
Speaker 1: really absolutely a delight. I'll let you in on a
Speaker 1: little secret. I wanted to get his book to have
Speaker 1: him sign it for me. Every one of my guests
Speaker 1: I bring books for them to sign, and I couldn't
Speaker 1: get his book delivered in time. It only comes direct
Speaker 1: from a publisher and the kindle wasn't gonna do me
Speaker 1: any good. So I was scratching my head and trying
Speaker 1: to figure out what can I do to have him sign.
Speaker 1: And I was a huge entourage fan the HBO show
Speaker 1: Um that Mark Wahlberg produced and he had a starring
Speaker 1: role in it as one of the people behind the
Speaker 1: behind the alcohol Avianne. It's Avian tequila, and UM, my
Speaker 1: office is around the corner from a liquor store. I
Speaker 1: ran over there. They had a bottle of avian and
Speaker 1: so when we were done with the interview, I said,
Speaker 1: by the way, I have something for you to sign.
Speaker 1: I pulled it out and I wish we had the
Speaker 1: tape running because he just started to crack up. Hey,
Speaker 1: no one's ever asked me to sign avan before. This
Speaker 1: will be the only bottle I'll ever sign, and um,
Speaker 1: I don't know if that's true, but I have the
Speaker 1: bottle sitting in my credens in my office with his
Speaker 1: signature on it. He was absolutely charming and a delight
Speaker 1: to speak with. He's you know, a rarity in modern times.
Speaker 1: There's no holds barred. He says exactly what he thinks
Speaker 1: about iron Rand, about gay marriage, about legalizing marijuana, about
Speaker 1: the sec Ask Mark Cuban a question and he tells you,
Speaker 1: honestly what he believes the truth to be very refreshing,
Speaker 1: not the sort of thing we see um amongst billionaires.
Speaker 1: It was really a fascinating conversation. So rather than have
Speaker 1: me continue to babble without further ado, here's my conversation
Speaker 1: with Mark Cuban. This is Masters in Business with Barry
Speaker 1: Ridholts on Bloomberg Radio. My guest this week is Mark Cuban.
Speaker 1: You should know who Mark is, and if you don't,
Speaker 1: let me give you a brief introduction to his extensive
Speaker 1: curriculum vitae um. He's probably best known these days as
Speaker 1: the owner of the Dallas Mavericks, or if you're a
Speaker 1: fan of venture capital investing and television, he's on Shark
Speaker 1: Tank on ABC S, which has been on since two
Speaker 1: thousand nine, a very successful show. Mark, Welcome to the show.
Speaker 1: That is literally the best introduction I've ever heard in
Speaker 1: my entire life. It's certainly the best one I've done
Speaker 1: in the past ten minutes, to say the least. So
Speaker 1: you basically left high school early a year early, went
Speaker 1: to University of Pittsburgh, and subsequently transferred to Indiana University.
Speaker 1: I want to go over some of the things you
Speaker 1: did as an entrepreneur as a kid, which is really, um,
Speaker 1: quite astonishing. So you, at one point in time asked
Speaker 1: your father for some money because you wanted to buy
Speaker 1: a fancy pair of sneakers. And one of the guys
Speaker 1: playing polka with your dad, probably drunk out of his mind,
Speaker 1: told you to do what Well, my dad said, you
Speaker 1: know those shoes and your feet look like they're working
Speaker 1: pretty well. If you want new pair of sneakers, you
Speaker 1: need a job and you can go buy them. Um.
Speaker 1: And I'm like, Dad, I'm twelve years old. Am I
Speaker 1: going to get a job. And one of his buddies
Speaker 1: popped up, it was their Thursday night poker game. It
Speaker 1: was just happened to be their turn at our house,
Speaker 1: said I got something for you. I got these garbage
Speaker 1: bags I need to sell. Why don't you go out
Speaker 1: there and sell these garbage bags, garbage bags like in
Speaker 1: a big roll, like actually was a box. It was
Speaker 1: a box, right, And they were just flat and um,
Speaker 1: they were a hundred for six bucks is what I
Speaker 1: sold him for. And they cost me three bucks. So
Speaker 1: I made three bucks a box. And I literally would
Speaker 1: go door to door to door. Hi, does your family
Speaker 1: use garbage bags? And who could say? No? I mean,
Speaker 1: And that's where I learned to sell literally every objection.
Speaker 1: Of course you use garbage bags, and I bet you
Speaker 1: you pay more than um whatever it is a hundred,
Speaker 1: you know, six cents apiece. And so I went out
Speaker 1: from there. That's amazing. So you did that somehow in
Speaker 1: the middle of of your education, you became a disco
Speaker 1: ballroom instructor. Um, it wasn't ballroom. It was pure disco,
Speaker 1: pure disco disco dancing was the disco dance instructor. But
Speaker 1: I only taught girls, and I only taught preferably well,
Speaker 1: not only, but preferably in sorority houses, preferably minimum of
Speaker 1: ten girls at a time. So this had nothing to
Speaker 1: do with making money Whatso I had everything to do
Speaker 1: with making money. But I had because I needed, because
Speaker 1: I was looking for the person I was going to
Speaker 1: spend the money on. But it was twenty five an hour,
Speaker 1: twenty five I would do that on what year, nineteen
Speaker 1: seventy nine, So that was real money. I would do
Speaker 1: that job today at the phones will light up and
Speaker 1: get plenty of plenty of business. So you graduate Indiana
Speaker 1: and you say, I'm not gonna spend the rest of
Speaker 1: my life in Pittsburgh. I'm moving to Dallas. Unsun money
Speaker 1: and women, money and women. That's what's going on in Dallas.
Speaker 1: My buddies were down there and they're like, you gotta
Speaker 1: come check it out. We're having a great time. I
Speaker 1: moved down there. Um there were five guys living in
Speaker 1: a three bedroom apartment. I was number six. UM. There
Speaker 1: were no beds left, no rooms left. So I got
Speaker 1: on the floor. Oh, not even on the not even
Speaker 1: on the floor. And you joined the company as a salesman, which,
Speaker 1: if Memory serves, was called Your Business Software. UM. It
Speaker 1: was one of the first PC software stores and UM.
Speaker 1: I went in there and I had seen I had
Speaker 1: had UM not a recruiter, but just one of these
Speaker 1: UM services that were out there back then. And he
Speaker 1: sent me over there. And when the first thing they said,
Speaker 1: they said, look, we can't afford to pay for the service,
Speaker 1: or you will like to go around. And I'm like,
Speaker 1: I just need a job, a real job. And I
Speaker 1: hadn't worked in in technology at all. I really had
Speaker 1: done very little no technology that minimal, minimal, right, um,
Speaker 1: taking like one class in college and and really just
Speaker 1: tried to teach myself basic programming. Um. But he goes, Okay,
Speaker 1: you've got I've got one question to ask you. Customer
Speaker 1: comes in and they have software problem and you don't
Speaker 1: know the answer. What do you do? Said, well, that's easy.
Speaker 1: I opened up the manual, I read it and I
Speaker 1: figure it out. He goes, You're hired. And that was it.
Speaker 1: And that was the start of my technology career. So
Speaker 1: you're there for a year or so, not even um,
Speaker 1: not even yeah, maybe nine months, and and shortly thereafter
Speaker 1: you get fired because you said i'll open the store later.
Speaker 1: I was an open store later. So it was a
Speaker 1: retail store and Barbara Depew, who I'll never forget you,
Speaker 1: went on to work for me. I was working with me,
Speaker 1: and um, I was like, Barbe, I've got this deal.
Speaker 1: I've got to close. Would you come in open the store,
Speaker 1: sweep the floor right, clean, make sure it's open, ready
Speaker 1: to open. She's like sure, because I'm gonna I'm gonna
Speaker 1: make some money. My first big commission show go to
Speaker 1: the boss and told him what I'm doing. He goes, no,
Speaker 1: you need to be here to open the store. Name
Speaker 1: was Michael Hugh Mickey. And so I used my first
Speaker 1: executive decision, and I fairly look when I bring in
Speaker 1: a check for fifteen thousand dollars fifteen commission for me,
Speaker 1: he's gonna be thrilled to death. Fired me on the spot,
Speaker 1: on the spot my check didn't give him the check, right,
Speaker 1: I went back and got the customer and started a
Speaker 1: company called micro Solus. That was your first confidence and which,
Speaker 1: by the way, I'm gonna tell people, was your first
Speaker 1: big sale. You sold that to compu Serve a couple
Speaker 1: of years later for six million dollars. Wasn't just a
Speaker 1: couple of years, it was gosh, it was eight years
Speaker 1: seven eight years later. So now there's a gap in
Speaker 1: your CV between nine and I'm assuming that some of
Speaker 1: that six million dollars was spent in ways that we
Speaker 1: won't talk about. Um. Actually, I started and sold a
Speaker 1: couple of commies, including a hedge fund in there. Um,
Speaker 1: but I parted like a rock star. I can imagine,
Speaker 1: Oh my god, twenty four you got a couple of
Speaker 1: million dollars in the bank, and I was making right
Speaker 1: because this is back when you know, the market so
Speaker 1: much more efficient now in terms of information, a number
Speaker 1: of people throwing money at it UM. But I would,
Speaker 1: I mean, I literally would have some of the biggest
Speaker 1: names in hedge funds calling me every day, asking Art Sandberg,
Speaker 1: Lianes Lee, all these guys that own Maverick Capital, and
Speaker 1: you remember our UM would ask me questions about technology,
Speaker 1: and I was like, wait, I know more than you guys.
Speaker 1: I'm gonna start trading stocks. And so just based off
Speaker 1: of all the things I knew from um um your
Speaker 1: business software and um micro solutions, I started trading stocks
Speaker 1: and did so well. I was making eight plus percent
Speaker 1: a year that we started a hedge fund, and then
Speaker 1: within less than a year ago bought Coming up, we
Speaker 1: continue our conversation with Mark Cuban discussing how he sold
Speaker 1: broadcast dot Com to Yahoo for almost six billion dollars.
Speaker 1: This week, be sure and check out our podcast extras.
Speaker 1: Especially this week, Mark Cuban goes off. In our podcast extras.
Speaker 1: He discusses the SEC what it was like to be
Speaker 1: the target of one of their prosecutions, how satisfying it
Speaker 1: was to be vindicated, and why he thinks the SEC
Speaker 1: is an agency run amuck. That's on our podcast extras.
Speaker 1: You can find that at Bloomberg dot com and at
Speaker 1: Apple iTunes. I'm Barry Ridholts. You're listening to Masters in
Speaker 1: Business on Bloomberg Radio. I'm Barry rid Hult. You're listening
Speaker 1: to Masters in Business on Bloomberg Radio. My guest today
Speaker 1: the famous and infamous Mark Cuban. Earlier we were discussing
Speaker 1: his some of his early accomplishments and business sales. But
Speaker 1: you started a company in the mid nineties called audio Net,
Speaker 1: ostensibly for the purpose I want to get this correct
Speaker 1: of broadcasting who's your basketball games? Who who's your basketball
Speaker 1: Games's your who's your daddy basketball games? For people who
Speaker 1: were interested in hearing it mostly for a lum another
Speaker 1: folks who may not have access anybody right right. So basically,
Speaker 1: back then, Um, it was and the Internet was new
Speaker 1: to everybody, and the concept of multimedia or streaming over
Speaker 1: the Internet was unheard of, and so audio one demand
Speaker 1: just did not did not exist, not at all, not nothing.
Speaker 1: And so a friend of mine, UM had a friend
Speaker 1: who said he was trying to get a way to
Speaker 1: listen to send scores and information on beepers and pagers
Speaker 1: and stuff like that, and I'm like, look, that's the
Speaker 1: wrong way to do. Let's start a company that that
Speaker 1: tries to figure out how to put audio online. And
Speaker 1: so nobody was doing it. So we had to go
Speaker 1: out there and figure out how to make the whole
Speaker 1: thing work. And so I literally to to get started.
Speaker 1: I bought a Packard Bell computer putting in the second
Speaker 1: bedroom my house, bought an I S d N line,
Speaker 1: hooked it all up, went to the local radio station
Speaker 1: KLi F that did sports talk radio, and we told
Speaker 1: them that I don't know what this internet thing is
Speaker 1: going to turn into, but there's going to be multimedia
Speaker 1: on at some point and it could be like cable
Speaker 1: who knows, and this could be the way to go worldwide.
Speaker 1: Would you let me take your radio feed? And so
Speaker 1: we bought an eight hour VCR and and a VCR
Speaker 1: that had supported eight hour VHS tapes connected to a
Speaker 1: board just like we have here, took the output in
Speaker 1: our c jack, put it into the VHS um the
Speaker 1: VCR recorded it. Then we went back and figured out
Speaker 1: how to encode it, put it on a server that's
Speaker 1: in my second bedroom, and then we would put we
Speaker 1: put it on a site called audio net, and I
Speaker 1: would go on to every online forum, a O L
Speaker 1: compy server, whatever, and tell people, you got to check
Speaker 1: out this side audio net and tell me what you think.
Speaker 1: And it immediately blew up. People want nuts, and were
Speaker 1: you doing anything other than Indiana basketball? It wasn't even
Speaker 1: Indiana basketball. From the local radios, from the local radio
Speaker 1: station called KLi F Dallas, and literally we would take
Speaker 1: an eight hour VHS tape and then put it into
Speaker 1: hours worth of broadcast radio, right, just like we're doing here, right,
Speaker 1: So we take the output of what like we have here,
Speaker 1: put it onto a VHS tape, take it, put it
Speaker 1: in a VCR at my house, put it into my
Speaker 1: packard bell PC, encode it there, and then stream it.
Speaker 1: It was a horrible way to stream it back then,
Speaker 1: but when it was on demand, and so when anybody
Speaker 1: wanted to listen, they'd have to download the player software
Speaker 1: and can listen. But people fell in love with it
Speaker 1: because if you were from Dallas or interested in Dallas sports,
Speaker 1: or Dallas anywhere anywhere, this is the only way to
Speaker 1: so there was no other real audio on the Internet
Speaker 1: never And so as much as people have made fun
Speaker 1: of Yahoo paying what a hundred times sample making funds,
Speaker 1: are idiots, right, because this was really way ahead of
Speaker 1: its time and enormous potential. Okay, so there's two elements here. One,
Speaker 1: what were we doing? Right? There was so little that
Speaker 1: YouTube does today that we did that we didn't do
Speaker 1: pretty much. The only difference other than obviously quality because
Speaker 1: of broadband and higher speed um processes, except that those
Speaker 1: pipes didn't exist back that you were doing. You were
Speaker 1: way ahead of the It was even more than that, right, So,
Speaker 1: I mean we were doing indexing so that we would
Speaker 1: take the live feed and do audio to text so
Speaker 1: that you can then go to index dot broadcast dot
Speaker 1: com and search for what did Rush Limbaugh say or whatever? Right,
Speaker 1: we were doing every We would have internet radio stations,
Speaker 1: on demand radio stations, so if you wanted all Elvis,
Speaker 1: if you wanted all in early Pandora and Spotify, all
Speaker 1: ahead of that, we had CDs and songs on demand.
Speaker 1: We actually helped the group Matchbox twenty I'll break that group,
Speaker 1: you know, by putting it out there and getting them
Speaker 1: out there, for the very first time. UM. Then we
Speaker 1: did the same thing with video. As video started to
Speaker 1: happen and we evolved from audio net to broadcast dot com. Um,
Speaker 1: we went and did a deal and actually bought back
Speaker 1: then what would turn into be ten percent of lions
Speaker 1: Gate Studios, and so we would take their shows and
Speaker 1: we would stream them, so all this video we would
Speaker 1: put out there. UM. And then we bought a company
Speaker 1: called simple Net which allowed us to do user generated
Speaker 1: content uploads. So we were doing uploads of user generated
Speaker 1: content in two thousand, long before YouTube. So from whatever
Speaker 1: and one last thing, right, well, um, our revenues we
Speaker 1: did at least I remember the exact number, but I
Speaker 1: think our last quarter was twenty three million we did
Speaker 1: in revenue, and we were cash flow break even. So
Speaker 1: we did close to million dollars for our our full
Speaker 1: year as a public company, or almost four years of
Speaker 1: public company. And that's in ar So, how did dio
Speaker 1: net become broadcast dot com? How did that domain we
Speaker 1: bought the domain for eight thousand dollars get out? That's
Speaker 1: a lot of money, that eight thousand dollars. Because you
Speaker 1: know that you know that someone in Yahoo was saying
Speaker 1: should we should we buy these guys. What do you
Speaker 1: think is this audio and video strap? Well, they do
Speaker 1: have the domain broadcast all right, Okay, so just kidding
Speaker 1: the side I probably had bought along the way trying
Speaker 1: to figure out ways to um connect audio and video
Speaker 1: to different domains stand on them. So things from like
Speaker 1: police Scanner dot com to final four dot net I owned,
Speaker 1: to Sandwich dot com to baseball dot com to football
Speaker 1: dot com owned. All you still have any of these domains.
Speaker 1: Yahoo's had him and sold him was part of the transaction. Yeah,
Speaker 1: but that's worth five point seven billion. Hard. Look, if
Speaker 1: you want to do you think I'm giving you a
Speaker 1: hard No, No, you're no, No, you're completely you're completely
Speaker 1: misunderstanding what I'm saying. Let's put this. Any time you
Speaker 1: have the opportunity to sell any sort five points a
Speaker 1: billion dollars, you do it. You don't, you don't think twice?
Speaker 1: That's given. Right, Let's look at the valuation. Right. First
Speaker 1: of all, we got it in stock, right, which you
Speaker 1: immediately spent twenty million dollars to wrap all. I had
Speaker 1: to wait six months to do it, but then I
Speaker 1: do right, because I had There are certain ways I
Speaker 1: had to follow the laws right. But more importantly so
Speaker 1: by the way, for the listener, what a collar does
Speaker 1: is essentially locks of price in by using options. And
Speaker 1: so even if Yahoo stock substantly collapses from two dollars
Speaker 1: down to eighteen, not that that's gonna have happened, which
Speaker 1: went down to five, right, You're locked into your price,
Speaker 1: so it's not like they paid us in cash. But
Speaker 1: more importantly, we had of the streaming market that's huge.
Speaker 1: What was that word? Don't think in terms of dollars
Speaker 1: per user, because the number of users back then was nothing,
Speaker 1: but the growth was going to be exponential. Billions of
Speaker 1: people we were doing. We were doing more, So if
Speaker 1: you took for inflation, we probably did more five years
Speaker 1: in than then YouTube. Did you know YouTube wasn't doing
Speaker 1: a hundred million dollars whatever that translates to. So two
Speaker 1: quick things before before we run out of time for
Speaker 1: this segment, you immediately do what what was called the
Speaker 1: biggest online transaction. I bought a Gulf Stream right away,
Speaker 1: and then within a few months you buy the Dallas Mavericks.
Speaker 1: Will continue our conversation with Mark Cuban talking about what
Speaker 1: life was like being a young, upstart NBA owner and
Speaker 1: what it was like turning around really one of the
Speaker 1: laughs of the NBA, one of the worst place teams,
Speaker 1: really underperforming and taking them to a championship. You're listening
Speaker 1: to Masters in Business with Barry rid Holts on Bloomberg Radio.
Speaker 1: I'm Barry rid Helts. You're listening to Masters in Business
Speaker 1: on Bloomberg Radio. My guest today is Mark Cuban, owner
Speaker 1: of hd net Access TV. We changed Access TV. I
Speaker 1: keep calling, okay, um, the Dallas Mavericks, a number of
Speaker 1: different problem theaters, Magnolia Pictures. So let's talk a little
Speaker 1: bit about. Look, you're probably best known as the Maverick
Speaker 1: owner who sits up in the stands with the fans.
Speaker 1: Let's talk a little bit about I know you're sick
Speaker 1: to death talking about the Mavericks, but there's so much
Speaker 1: stuff that's so fascinating. I would be remiss if I
Speaker 1: didn't point out a couple of interesting things. First, I
Speaker 1: didn't realize this. You bought the Mavericks from Ross Parro,
Speaker 1: and you also did some early transactions with him, um
Speaker 1: in some of your early companies, and any any coincidence
Speaker 1: to that or yeah, totally coincidence and not Yeah, when
Speaker 1: um I had micro Solutions, Pro Systems Ross Pro Senior.
Speaker 1: They couldn't ever make the local ay networks. My first company,
Speaker 1: micro Solutions, what set us apart. We're one of the
Speaker 1: first three companies in the country that did local ay
Speaker 1: networking integration. So back then in Night three and eighty four,
Speaker 1: no one thought about hooking PCs together. So but nineteen
Speaker 1: eight we were probably, I mean, we were the largest
Speaker 1: IBM Locuary networking integrator in the country. Apple came out
Speaker 1: with Locquary Networks. Ross Pro was a big integrator for
Speaker 1: with Pro Systems and they couldn't make it work, so
Speaker 1: they brought us in to make it work. So that
Speaker 1: was my original connection. But that was ross Pro Senior,
Speaker 1: and then this was just a coincidence. So you buy
Speaker 1: in two thousand, you buy the Dallas Mavericks. Let me
Speaker 1: just explain for people who may not be a hoops fan,
Speaker 1: how awful they were the twenty years prior. They had
Speaker 1: a win loss record below they got they got voted
Speaker 1: the worst professional sports franchise of the nineties. It's unbelievable.
Speaker 1: In two years before you bought them, they were twenty
Speaker 1: and sixty two. That's that's just terrific. The year you
Speaker 1: buy them, they go fifty three and twenty nine, they
Speaker 1: make it to the second round. In two thousand and six,
Speaker 1: they make it to the finals only to lose it
Speaker 1: lose to the Heat. And it looked in the beginning
Speaker 1: of that that series, but you had a shot. We
Speaker 1: did have a shot. We kind of got tushy tapped,
Speaker 1: you know. But to be fair, they were really they
Speaker 1: were a phenomenal team. You were I wouldn't go that far.
Speaker 1: Come on, they were a really strong team. Let me,
Speaker 1: when one player goes to the line, there was on
Speaker 1: an average more than the other team. Right, yeah, there's
Speaker 1: something wrong, but you know, there is no shame in
Speaker 1: losing to that oh six team. They were really there's
Speaker 1: there's one winner and everybody else is tied for last place.
Speaker 1: So let's go to two thousand eleven. You get your revenge,
Speaker 1: you get to play the Miami Heat and and actually win.
Speaker 1: And you were just overwrought with emotion. We I want
Speaker 1: remember seeing you on television and it was just it
Speaker 1: was it was wild. It was really As a fan, look,
Speaker 1: I used to sit in section two oh five and
Speaker 1: watch the Knicks play when it was Charles Oakley and
Speaker 1: Patrick Ewing and actually just passed Anthony Mason on the
Speaker 1: street the other day. He's still you know, and and
Speaker 1: you know, the thought of an owner sitting in the
Speaker 1: stand with you know, with fans is just astonishing. So
Speaker 1: the first question is what did you do to turn
Speaker 1: the MAVs around? Because you actually so. When I took
Speaker 1: over the team was January of two thousand. We were
Speaker 1: nine and twenty three, and the general manager and coach
Speaker 1: at the time, Don Nelson, who came from the Knicks,
Speaker 1: actually um said, you know, we can we we can
Speaker 1: lose and try to get a good draft pick and
Speaker 1: dout it out it up. As it turns out, there
Speaker 1: was one of the one worst drafts ever, And I'm like, no,
Speaker 1: at some point, this team has to learn how to win.
Speaker 1: So we focused on winning, and as it turned out,
Speaker 1: we had a nucleus of a great team and we
Speaker 1: just didn't People just didn't expect us to win. So
Speaker 1: the players didn't expect us to win, and so I
Speaker 1: walked in this that I expect you guys to win.
Speaker 1: We're not gonna mess around anymore. If you don't lay
Speaker 1: it out, if you don't put it on the line,
Speaker 1: I'm a trade your ass and you know, guess what,
Speaker 1: this is going to be a premier destination in the NBA.
Speaker 1: You can laugh because that's what everybody did. But I'm
Speaker 1: gonna kick everybody's ass. They just don't know it. And
Speaker 1: you had Dirk from the previous year. We had Dirk,
Speaker 1: Steve Nash, Michael Finley, Sean Bradley. That's quite a cord
Speaker 1: to build a team. And everybody thought, I mean, we
Speaker 1: literally couldn't trade Steve Nash. They had tried to trade
Speaker 1: Steve Nash really got there and they couldn't do it.
Speaker 1: That trade Michael Finlay. They didn't try to trade Dirk yet. Um,
Speaker 1: but yeah, it was crazy. Every people who were in
Speaker 1: Dallas say, going to a Mavericks game is not like
Speaker 1: going to any of the basketball game. Yeah. I really
Speaker 1: try to make an experience. I mean, the thing about
Speaker 1: going to a sporting event is the one place where
Speaker 1: you can scream and yell and they have fun and
Speaker 1: it's all good. And we expect you to do that
Speaker 1: unless you get fine, well that's me right. Everybody else
Speaker 1: can do whatever they want. And I try to make
Speaker 1: it like a good wedding. You know, it's memorable. That's
Speaker 1: you don't remember the scores, you don't remember the jumper time, Yeah,
Speaker 1: and you remember who you were with and why and
Speaker 1: all that kind of stuff. So I want to spend
Speaker 1: too much time talking about the fines, which every time
Speaker 1: you get fined by the NBA you do a match
Speaker 1: charitable deduction. But there was one thing that stood out
Speaker 1: and I have to ask you about because it's almost
Speaker 1: like an urban legend. So at one point in time
Speaker 1: you called Ed Rush, who's the league's manager. Officials, Hey,
Speaker 1: he couldn't manage a dairy queen for a day. And
Speaker 1: then subsequent only the folks at dairy Queen said, it's
Speaker 1: harder than you would imagine, and I you actually managed
Speaker 1: the dairy. Yeah, it's probably the best pr thing I've
Speaker 1: ever done in my life. You know. It's just people
Speaker 1: lined up for I got there at six thirty in
Speaker 1: the morning and there was a line a mile on.
Speaker 1: There was helicopters, and look, it wasn't me. I gotta
Speaker 1: give There's a guy named Paris Chapman who was a
Speaker 1: local dairy queen franchise who mark oh, smartest guy in
Speaker 1: the book when it comes to marketing, because he turned
Speaker 1: it into a circus. Benefited his business, sure, and it
Speaker 1: helped me too. And the urban legend was that Warren
Speaker 1: Buffett sent you a thank you, not what you did.
Speaker 1: That's unbelievable. That's a fascinating story. Coming up, we continue
Speaker 1: our conversation with Mark Cuban discussing his venture capital investments
Speaker 1: and how he became one of the stars of Shark Tech.
Speaker 1: You're listening to Masters in Business with Barry rid Holts
Speaker 1: on Bloomberg Radio. I'm Barry rid Holts. You're listening to
Speaker 1: Masters in Business on Bloomberg Radio. My guest today is
Speaker 1: Mark Cuban, uh fame trade her investor, star of the
Speaker 1: ABC television show Shark Tank, which really has been building
Speaker 1: up a lot of momentum and has generated a lot
Speaker 1: of buzz and now it's really getting killer. Took a
Speaker 1: year or two to get it ratings, but it's blown up.
Speaker 1: Well actually before I was on. No, it's amazing how
Speaker 1: big the show has gotten. It's the number one show
Speaker 1: and all of television watched by families together. And really, yeah,
Speaker 1: what I didn't get when I went on as a
Speaker 1: guest Shark in UM season two, I think UM was
Speaker 1: I thought Okay, this is a business show. I'd watched it,
Speaker 1: I'd liked it. I'd yell at the TV, don't you um?
Speaker 1: And I just thought that was it, right, maybe I'll
Speaker 1: get a good deal. But I go on and I
Speaker 1: do these deals, which actually turned out to be my
Speaker 1: worst deals I've done on Shark Tank. But then all
Speaker 1: of a sudden, I started getting you know, emails and
Speaker 1: comments from people on the street. Love the show. Because
Speaker 1: my seven year old loves to watch it. My twelve
Speaker 1: year old now understands valuations. We talk about businesses we thought,
Speaker 1: you know, when you see some you know, a family
Speaker 1: from Iowa standing on that carpet on Shark Tank talking
Speaker 1: about the company they started as a family and makes
Speaker 1: kids realize they can do it too. And it's so
Speaker 1: aspirational and so not only is it kind of a
Speaker 1: new age liminate stand where it encourages people, but it
Speaker 1: also gives them examples of others who have done it,
Speaker 1: and it's the old thing. You know, if they can
Speaker 1: do it, I can do it. And that's literally what's happened.
Speaker 1: So you started out as an entrepreneur, you know what
Speaker 1: it takes to make a business work. Now you're looking
Speaker 1: at new entrepreneurs. Let me ask you a few questions
Speaker 1: about what you think are the most important things. So
Speaker 1: when you're looking at an early stage investment, is it
Speaker 1: the person, the idea, the cash flow of evaluation? What
Speaker 1: manners most? Idea? Execution, UM, vision, person? Because they all
Speaker 1: go hand in hand. Everybody's got ideas, so that ideas
Speaker 1: alone are worthless. You've got to be able to take
Speaker 1: it from an idea to a business which says something. Right,
Speaker 1: you took it to the first step of execution, then
Speaker 1: where do what's your vision? Where can you take it
Speaker 1: from there? And do I believe that you can get
Speaker 1: it there? Those are the key elements. So who do
Speaker 1: you end up investing with most? Meaning? What other shark
Speaker 1: do you seem? So I try to avoid them all?
Speaker 1: Is that? What? Well? What do you think of the
Speaker 1: people you co invest with? UM? You know there they
Speaker 1: all as investors were. Look, we're all smart. We all
Speaker 1: wouldn't be there unless they have some level of intelligence, right,
Speaker 1: each of us have different skill sets. So where it
Speaker 1: plays to my strengths it's technology, marketing, whatever, than I
Speaker 1: pretty much take control of the deal and they can
Speaker 1: have some of the economics. I don't care, Um, but
Speaker 1: I would say probably Barbara. I like working with Barbara
Speaker 1: the best because Barbara's always got a unique spin on things.
Speaker 1: Lorie's not bad Lorie Lorie because she can put things
Speaker 1: through QBC. But I would say, in uh, mating retail.
Speaker 1: But if you tech sort of products coming, I've had
Speaker 1: all kinds. I mean, I'm up to like fifty deals.
Speaker 1: I've done more deals than from just from Shark, just
Speaker 1: from Shark Tech and and including season six and stuff
Speaker 1: that has an are yet, But I've done more than
Speaker 1: all the other Sharks combined. Really, and you never seem
Speaker 1: to do more than a million dollars it rolls. No, No,
Speaker 1: I've done at one point seven million, will be one.
Speaker 1: I bet at one point five what you're at? What's
Speaker 1: the average? I don't even know, but they all they
Speaker 1: seem to be half millions. No, No, So what happened
Speaker 1: early early in the show, Um, the first couple of
Speaker 1: seasons I was on, the deals are fifties seventy five
Speaker 1: k right, and now last season in particular season six
Speaker 1: that we're in right now, the deals are you know,
Speaker 1: two fifty minimum for the most part K seven fifty
Speaker 1: multimillion deals Um, so they've gotten a lot bigger. The
Speaker 1: companies are a lot more solid than they were in
Speaker 1: the past, more developed. Further, little question about because people
Speaker 1: recognize the value of getting on the show. Well, even
Speaker 1: if you don't get a good deal, someone sees it.
Speaker 1: There's marketing value. You're gonna be attracting others. Twelve million
Speaker 1: people that watch you within the first week of airing.
Speaker 1: Then it's going to repeat on ABC at some point.
Speaker 1: You're gonna get a lot of pr and any entrepreneur
Speaker 1: recognizes that it's part of our job actually being up there.
Speaker 1: I call them gold diggers, right to separate the gold
Speaker 1: diggers from the companies who really need support. Do you
Speaker 1: do You still do a lot of VC and angel
Speaker 1: investing outside the questions about it? Yeah, but I thank
Speaker 1: is just for fun and Shark Tank sends a message, Right,
Speaker 1: I do Shark Tank. The deals are good and I
Speaker 1: enjoy it. But to me, the importance of doing Shark
Speaker 1: Tank UM is more sending the message that the American
Speaker 1: dream is alive. And well, there's no other platform where um,
Speaker 1: whether it's in school, whether it's on television, there's absolutely
Speaker 1: no other platform where you can go out and reach
Speaker 1: kids and families and entrepreneurs and encourage them and support
Speaker 1: them and train them and really fire them up and
Speaker 1: give them some guidance to go out ahead and go
Speaker 1: ahead and start that business. And that's fascinating that families
Speaker 1: are watching the show together more than any of it's
Speaker 1: amazing data point. It's crazy. I mean, parents walk up
Speaker 1: to me just to brag about their kids watching the show.
Speaker 1: It's it's the new age lemonade stand. It's how you
Speaker 1: learn about business. So let's talk a little bit about
Speaker 1: some of your public investments. You've been pretty public about
Speaker 1: the stuff you've looked at. You happen to mention Netflix.
Speaker 1: I think you said a hundred and fifty thou shares
Speaker 1: plus options um it shares that body plus I already
Speaker 1: sold previous to that on a hundred thousand plus UM puts,
Speaker 1: you had sold puts. So you hope in somebody Well,
Speaker 1: I said, if if if a craters, I'm happy to
Speaker 1: own a stock and if it goes up, I've taken
Speaker 1: in premium. Now walk us through the thought process. Is
Speaker 1: this Are you looking at Netflix like you're making a
Speaker 1: venture investment in a company because you like their long
Speaker 1: term perspective? As a business and you don't care we've
Speaker 1: gone through. You've got to look at the big picture, right,
Speaker 1: So within a macro positioning, there there are no more
Speaker 1: small I p o s, certainly not lately. No, And
Speaker 1: that we'll go back to the SEC. Right. They crushed
Speaker 1: the I p O market, And so without the the
Speaker 1: I p O market, there's not a big risk of
Speaker 1: companies come up to to bang on you. Right, there's
Speaker 1: no broadcast dot Com, there's no you know two thousand
Speaker 1: for Googles. Right, it's so hard to go public that
Speaker 1: it's gonna be very, very difficult for up and comers
Speaker 1: to knock off an incumbent, which I think Netflix is.
Speaker 1: So in otherways, the SEC rule changes for allowing all
Speaker 1: these pre public private investments. Now all these companies are No,
Speaker 1: it's not even that, right, So put that in your
Speaker 1: in the pipe, right, and we'll go to Netflix first.
Speaker 1: So in the bigger picture of things, if you look
Speaker 1: at the whole entertainment environments and you say, what is
Speaker 1: the most disruptive force in media today? Netflix, no doubt
Speaker 1: about it. The estimates are at night it's Enginet traffic
Speaker 1: more now, right, And so I hadn't always looked at
Speaker 1: Netflix that way. But what's happened now is that all
Speaker 1: the um the pipe companies, right, the risings, the A
Speaker 1: T t s, they've all invested so much money in
Speaker 1: infrastructure that delivering Netflix. They can do it. Now You're
Speaker 1: not getting the buffering like you used to. I mean,
Speaker 1: there's still some, but it's not nearly as bad. So
Speaker 1: all the infrastructure is there for Netflix. And so that's
Speaker 1: part one, Part two. There's nobody who does what they
Speaker 1: do at the scale of what they do, at the
Speaker 1: price of what they do. There's others that are coming
Speaker 1: in like HBO Go. There's others that are coming in
Speaker 1: like CBS, but those you know, there's Hulu, but those
Speaker 1: are more in the fringe. Right. If you look at
Speaker 1: Netflix with you know, forty million with or fifty million
Speaker 1: global subscribers, and ask, okay, if they can get to
Speaker 1: fifty and they're just starting to grow international, can they
Speaker 1: get to a million? Yeah? Can they get the five million? Yeah?
Speaker 1: Because CBS, HBO, they're not all of a sudden going
Speaker 1: to entrench themselves. Now, then you look to the flip
Speaker 1: side of that, what is the impact of all that
Speaker 1: on content and entertainment? Already today, if you wanted to
Speaker 1: create a high end show, you don't go to um
Speaker 1: HBO and ask for an output deal like you would
Speaker 1: have ten fifteen years ago. You go to Netflix. If
Speaker 1: when CBS wants to start a new TV show, when
Speaker 1: Access TV or Magnolia Pictures Entertainment want to do a
Speaker 1: movie or show, we go to Netflix to see if
Speaker 1: the money is there that they want to participate with us. Right, Netflix,
Speaker 1: years ago, you would have gone to a network or
Speaker 1: a movie studio right right. Used to be that Showtime
Speaker 1: and HBO said okay, ten percent of the box office,
Speaker 1: we'll give that to you, right and exchange for the
Speaker 1: rights to the movies. That's pretty much gone. So now
Speaker 1: Netflix and ess and subsidize the whole content industry, the
Speaker 1: whole and that's extending to the global content industry. Now.
Speaker 1: The short sellers say, well, that's an eight billion dollar
Speaker 1: um hickey on their balance sheet of in some respects
Speaker 1: undocumented or off the books on liabilities. I look at
Speaker 1: and says and say, everybody needs Netflix really really bad
Speaker 1: to survive, and they both need each other. Right, Netflix
Speaker 1: needs all that TV content to be created and put
Speaker 1: on TV because it's a cheap source of content and
Speaker 1: gives them breath. And every major TV show um on television,
Speaker 1: whether it's cable or broadcast, needs Netflix to subsidize them.
Speaker 1: Movies look for Netflix to subsidize them, so that it's
Speaker 1: that symbiotic relationship is going to allow Netflix to grow.
Speaker 1: And they're locked into the infrastructure of the infrastructure the media,
Speaker 1: and nobody else has access to they don't have access.
Speaker 1: What Netflix did that was brilliant when they really got going,
Speaker 1: they it was what they did an ARB, right, that
Speaker 1: was the most brilliant ARB of all time. So up
Speaker 1: until Netflix really started to push, it would be okay
Speaker 1: if I want to sell on iTunes, if I want
Speaker 1: to sell on Amazon, if I want to sell anywhere.
Speaker 1: I got a commission. It was basically on consignment. If
Speaker 1: I sold it for fifteen dollars, and look, I have
Speaker 1: movie companies, right. So one of my my first movie ever, Greenlit,
Speaker 1: was in Ron the smartest guys in the room. So
Speaker 1: if I sold a DVD UM of of Enron and
Speaker 1: I got my fort or whatever, the margin was okay, great,
Speaker 1: and I didn't know how many I would sell well,
Speaker 1: and then I might have some other content from Access
Speaker 1: TV or wherever or that was just dusty. Netflix said,
Speaker 1: you know what, we know how we're going to market that,
Speaker 1: we know how we're going to get money. I'm gonna
Speaker 1: write you a check up front. We're gonna pay cash
Speaker 1: up front. So it was an arb my cash versus
Speaker 1: how much revenue I can create using your content. And
Speaker 1: they made it work. They marketed, their marketing was brilliant,
Speaker 1: and their subscribers grow and it created a dependent field.
Speaker 1: Thank you, Mark, We appreciate you spending so much time
Speaker 1: with us today. This week, be sure and check out
Speaker 1: our podcast extras. You can find them on iTunes and
Speaker 1: at Bloomberg dot com. And I really mean this week,
Speaker 1: be sure and check it out. Mark was nice enough
Speaker 1: to hang out with us for an hour after the
Speaker 1: broadcast portion was over, and we discussed everything from his
Speaker 1: continuing interest in picking up a major League baseball team
Speaker 1: to a deep dive into his experiences with the SEC,
Speaker 1: some of which were absolutely hilarious. He had us cracking
Speaker 1: up in the studio. If you've enjoyed these sorts of interviews,
Speaker 1: check out all of our archive of previous conversations. You
Speaker 1: can find them at iTunes or Bloomberg dot com. My
Speaker 1: daily column shows up every day at Bloomberg View dot
Speaker 1: com and you could follow me on Twitter at rid Holtz.
Speaker 1: I'm Barry rid Holts. You're listening to Masters in Business
Speaker 1: on Bloomberg Radio. Welcome back to the podcast half of
Speaker 1: our show. I'm Barry rid Halts and my guest in
Speaker 1: the studio tonight we're recording this Monday night is Mark Cuban.
Speaker 1: You're you're in town for a handful of NBA meeting.
Speaker 1: What is that like when you go to an NBA meeting?
Speaker 1: Are you like well behaved or you renegade? And the renegade?
Speaker 1: What is Mark? No, no, no, no, it's actually the opposite. Mark.
Speaker 1: You're gonna talk about this right because so all these
Speaker 1: guys who are proper I don't want to talk about
Speaker 1: down low. It's like, hey, here's what you got it.
Speaker 1: And things have really changed the less since Adam Silver
Speaker 1: came in, because guys are a little bit more comfortable
Speaker 1: with Adam. Um. David was a little bit. You had
Speaker 1: good things to say about I like David was a
Speaker 1: little the things we disagreed on, but I respect them.
Speaker 1: Like David, he did a great job. He was a
Speaker 1: great ambassador for the NBA. Globally he was. He was
Speaker 1: a hero for US. Um. But just the just the
Speaker 1: approach is a little bit different. Adams a little bit
Speaker 1: lighter and David's was a little but not I wouldn't
Speaker 1: say formal, just more um. Oh, what's the right word.
Speaker 1: David had his way of doing No, No, it was
Speaker 1: just he had his opinion. He was opinionated in his
Speaker 1: own way, and he wasn't as open to disagreement. Okay,
Speaker 1: well that goes on. Well why we buy bad at
Speaker 1: heads but respected each other. Well we see how that
Speaker 1: sort of disagreement has worked out in the NFL these days. Yeah,
Speaker 1: it hasn't helped them at all. And you've you've been
Speaker 1: pretty outspoken. I'm sure you're tired about talking about that
Speaker 1: by now. But the NFL had a couple of issues
Speaker 1: and they just never really dealt with it, right, Yeah.
Speaker 1: I mean, you know what I basically I was saying
Speaker 1: is that when you're building a business and you're climbing
Speaker 1: up the mountain to be the best, it's one set
Speaker 1: of skills, and when you're there to stay on top,
Speaker 1: it's a different set of skills. And it's really really
Speaker 1: easy when you're in top to to feel entitled and
Speaker 1: to feel like you're invincible. And when that happens, you know,
Speaker 1: pigs get that m Hoggs get slaughtered, and it's it's
Speaker 1: a recipe for disaster. Now, they haven't had disaster yet,
Speaker 1: but it's not like people haven't had second thoughts about
Speaker 1: the NFL. They've certainly taken a pr hit. You know.
Speaker 1: We we go through that same conversation with people who
Speaker 1: spend their whole career accumulating assets. And when you say
Speaker 1: to them, all right, you gotta take a breath. You're
Speaker 1: now you're no longer in the asset accumulation business. You're
Speaker 1: in the asset preservation business. That's a mental transition. That's
Speaker 1: a hard time to Part two, that is, everybody's a
Speaker 1: genius in a bull market. Sure, right, the NFL has
Speaker 1: gone through very much a bull market because of fantasy sports,
Speaker 1: because it's a great every everything, right. I mean, you
Speaker 1: go back twenty years there were teams leaving in the
Speaker 1: middle of the night, you know, and so look, they
Speaker 1: deserve all the credit. Jerry Jones, is I really look
Speaker 1: up to you in terms of sales stadium awesome, unbelievable,
Speaker 1: it's literally actually wonder the world when we last time
Speaker 1: we were in Dallas, we went to a game just
Speaker 1: to see the stadium. A lot of people do. It's brilliant.
Speaker 1: It's really a million states got balls of steel to have,
Speaker 1: you know, put himself on the line like that. So
Speaker 1: Jerry deserves a ton of credit. But you know, it's
Speaker 1: it's difficult. And the reason I know that they have
Speaker 1: problems now is because you saw Roger Goodell out front,
Speaker 1: and you didn't see a single owner out there with him,
Speaker 1: so they just let him flap in the breeze. Look, hey, listen,
Speaker 1: the first rule of holes is stop digging. And he
Speaker 1: doesn't seem to want to stop. It's a little bit
Speaker 1: different because I'll give you an analogy. Growing up in Pittsburgh,
Speaker 1: right you you were talking about the Mets. Well, up
Speaker 1: until the last two years, everybody would say, why don't
Speaker 1: you buy the pirates? Why would you buy the pirates?
Speaker 1: And I said, because they're not for sale. Well, he'll
Speaker 1: be right, price still sell it to him. I said,
Speaker 1: he Look, here's why they're not going to sell. If
Speaker 1: I told you, I would pay you twenty five million
Speaker 1: dollars a year to stand right in the middle of
Speaker 1: the city of Pittsburgh and have every single resident yell
Speaker 1: at you twenty four hours a day. Would you take
Speaker 1: that twenty five million dollars a year? Everybody will take that? Sure? Yeah? Okay.
Speaker 1: So if I told you I'm gonna pay you forty
Speaker 1: four million dollars a year to stand in front of
Speaker 1: the media and take the bullets for all the NFL owners,
Speaker 1: would you take that job? Yeah? And that's what Roger
Speaker 1: Goodell's job is. He's taking the bullets. He's the one
Speaker 1: saying it's my fault, it's my fault, it's my fault.
Speaker 1: And you know it's working now because they you know,
Speaker 1: they haven't had any issues. But it's gonna you know,
Speaker 1: things are gonna be happening. Things will happen, and it'll
Speaker 1: be interesting to see how they respond. Fascinating. So now
Speaker 1: let's talk a little bit about um, the Mets. That's
Speaker 1: not gonna happenna, happen, not gonna happen. We get you
Speaker 1: and David Einhorn together retired in a couple of weeks.
Speaker 1: He wasn't a fan of you, is I know he
Speaker 1: hated me and I wasn't a fan of his. And
Speaker 1: and once he's gone, any chance you buy. I don't know,
Speaker 1: you know, if the Mets came along, I wouldn't buy
Speaker 1: and by myself, Um, because now I have three young kids. Um,
Speaker 1: it's too much fun spending time with them. My engineer,
Speaker 1: Charlie says, he'll he'll go half with you done on
Speaker 1: the Mets. Done. There are a lot of people who
Speaker 1: would love to rest control of the Mets. Absolutely from
Speaker 1: they really, but it's the same thing that I'm sure
Speaker 1: they're making money. If they weren't, they would be sellers.
Speaker 1: They did a phenomenal job renovating. That's, by the way,
Speaker 1: That's another really nice stadium. Everybody loves Yankee Stadium. But
Speaker 1: the little secret in New York is City Field is
Speaker 1: actually a nicer place, and it's not such a little secret, right. Um,
Speaker 1: Mets fans are always piste off when the problem is
Speaker 1: it's a beautiful place, but you gotta go watch the Mats.
Speaker 1: I grew up a Mets fan all Island and long suffering. Uh,
Speaker 1: the Knicks, the Mets. It's just really big hope you're
Speaker 1: suffering continues because they play. So let's talk a little
Speaker 1: bit about we discussed earlier your investment in Netflix. Let's
Speaker 1: talk about some of the other more. Um, what's the
Speaker 1: right word to use, uh, disputitious, ceremonial. Let's start with
Speaker 1: short seller all right. I'm a big fan of short sellers.
Speaker 1: I think they've done a great job rooting out fraud
Speaker 1: over the years. One of the first podcast we did
Speaker 1: was with Jim Chanos, who tells unbelievable stories about, you know,
Speaker 1: working his way through balance sheets of this kid and
Speaker 1: Run is a perfect yeah and Run I mean, I
Speaker 1: mean I I did end Run the smartest guys in
Speaker 1: the room the movie right, Um, But prior to that,
Speaker 1: the broadcast dot com days, I remember sitting there with
Speaker 1: en Ron and them trying to sell me on bandwidth plays,
Speaker 1: you know, and I'm like, how the hell are you
Speaker 1: going to transport band with and you know, how you're
Speaker 1: going to create an efficient market and delving into them
Speaker 1: and think it was crazy. But in any events, guys
Speaker 1: in the room, how you're not as smart as them?
Speaker 1: See if you were smart as them. I love short sellers.
Speaker 1: I used to make a killing and selling selling short
Speaker 1: because you know, you know back in the day when
Speaker 1: I told you I was running this hedge hedge fund
Speaker 1: um because I knew if equipment didn't work. If back
Speaker 1: then Synoptics put out a router, you know, or a switch.
Speaker 1: I knew because I had to install those things if
Speaker 1: it didn't work, and if it was going to sell,
Speaker 1: because I had to sell them. And so I would
Speaker 1: short sell, you know, just by nature of understanding the
Speaker 1: industry better than most people. And that's why I would
Speaker 1: have all these hedge fund guys, you know, get in
Speaker 1: touch with me. So I've always been a huge fan.
Speaker 1: And then when we got to broadcast dot com and
Speaker 1: it went public, Um, you know, at that point in time,
Speaker 1: we had the largest one day jump in for a
Speaker 1: stock of an I p O in the history of
Speaker 1: the stock market. So there was a huge short position obvious. Um,
Speaker 1: everybody's covering well, not even because it was an I
Speaker 1: p O. Um, yeah, you're not. Even to this day,
Speaker 1: you're not. So the I p O is the biggest
Speaker 1: one day. But after that, the day you were allowed
Speaker 1: to short, everybody short at every shot. I'm sure they
Speaker 1: can get And people said, aren't you mad at short
Speaker 1: sellers are short in your stock? I'm like, are you
Speaker 1: kidding me? I love short sellers because if my company
Speaker 1: is going to do well, all they're doing is creating,
Speaker 1: you know, pin up demand for this is natural floor.
Speaker 1: The short sellers who actually stopped the collapse by covering,
Speaker 1: because they have to cover if you do well. Now,
Speaker 1: if you're a fraud or your company's horrible, you deserve
Speaker 1: what you get and your stocks going to zero at
Speaker 1: some point. Anyways, it doesn't matter what the short sellers do.
Speaker 1: So I don't know if anyone's ever asked you this
Speaker 1: question quite this way, but when you sold broadcast dot
Speaker 1: Com to Yahoo, we you were aware that we were
Speaker 1: in the midst of a bubble or was it? No,
Speaker 1: this is just a whole no, no, no, like this
Speaker 1: is ringing the bell. No. I mean go back and
Speaker 1: read the articles from back then. So two things. One one,
Speaker 1: I didn't sell for cash, right, So it wasn't like, yeah,
Speaker 1: Yahoo stock you have to remember, was it was on fire,
Speaker 1: right and there their their market cap was higher than
Speaker 1: it is today, you know, fifteen years ago, much higher.
Speaker 1: I mean it was like in a hundreds of billions, right,
Speaker 1: and so for us to take three d I think
Speaker 1: it was we got twenty eight million shares of stock
Speaker 1: at three fifty dollars a share or something, I remember exactly.
Speaker 1: So when I when I hedged, and it was called
Speaker 1: one of the top ten trades of all time by
Speaker 1: whatever Magazine's a pretty damn good trade. But when I
Speaker 1: had what was what was the average price around then?
Speaker 1: I don't remember my hundreds low two hundreds. Actually, when
Speaker 1: I started to hedge, the price kept on going up,
Speaker 1: and I had told everybody that I had hedged it,
Speaker 1: and um, there there's a clip from David Faber on
Speaker 1: on CNBC where he says, don't you feel stupid now
Speaker 1: that you've hedged this? And yeah, who's gone up another
Speaker 1: hundred dollars. I just made a billion dollars. I said,
Speaker 1: it's hard to feel really stupid flying out in my
Speaker 1: G five. Right, But back to why right? So so that,
Speaker 1: by the way, that's a full an attitude of using
Speaker 1: money as a measuring stick instead of thinking of money
Speaker 1: as a tool to be deployed for other purpose. Would
Speaker 1: you pay for the Mavericks to a five had you
Speaker 1: not hedged, you would have lost that window. You're not enable.
Speaker 1: It was funny back then the stock price of Yahoo
Speaker 1: would go up thirty dollars in a day, and I
Speaker 1: was like, I just paid for the Mavericks in one
Speaker 1: But I just paid for my plane. But you asked,
Speaker 1: what was I thinking. You know, I've been in this
Speaker 1: business a long time, and so in the eighties I
Speaker 1: saw the PC stocks go straight up, straight down. Then
Speaker 1: I saw the stock software stocks go straight up, straight down.
Speaker 1: Then I saw the local area networking stocks go straight
Speaker 1: up and straight down. These Hey there's a pattern there. Yeah,
Speaker 1: Why did I think that it would be any different
Speaker 1: this time? Because there was always a hot technology area
Speaker 1: and this was Internet software and that was just a
Speaker 1: matter of time. But it's just a matter of time
Speaker 1: for Internet to get with And your job isn't top
Speaker 1: tick the market on your exit. Your job is to say,
Speaker 1: if I can lock in a billion dollars, I could
Speaker 1: do a lot. Look to this day, I stay headed.
Speaker 1: So I use a devolt all hedge type thing that
Speaker 1: Credit Squeeze put together for me. That as so I've
Speaker 1: actually made money as the market went down. Took it
Speaker 1: off after I got to a certain level, and you know,
Speaker 1: hopefully the market will keep on going up and then
Speaker 1: and if it goes up much higher, I'll put it
Speaker 1: back on again. So you're always running with insurance. I'm
Speaker 1: always running the hedge because the market never makes sense
Speaker 1: until after the fact. Everybody's got perfect vision, you know exactly,
Speaker 1: so you know, it used to be okay, interest rates
Speaker 1: are going up, the market will go down something, right,
Speaker 1: you know, oil does this, the market will do that.
Speaker 1: And there were all these correlations that everybody understood. Now
Speaker 1: the market has gotten so complex that nobody really understands.
Speaker 1: It's almost like I've had my biggest trades up until
Speaker 1: recently in currencies, because currencies are more transparent than stocks,
Speaker 1: the very liquid, the liquids, amounts, trade, trade everything. But
Speaker 1: even more importantly, you've got the central banks telling you
Speaker 1: exactly what they're going to do, right, there's not and
Speaker 1: you know exactly Now they get heavy right with everybody,
Speaker 1: and then you've got you know, when everybody comes out. Now,
Speaker 1: in hindsight, it's easy to see. And one of the
Speaker 1: reasons I put on the hedge because I thought this
Speaker 1: could happen. I just didn't know when, because everything now
Speaker 1: was so interrelated. Once. When when people start piling into
Speaker 1: the same trades that everybody's doing, right, whether it's currencies
Speaker 1: on one hand, it's a a note, treasuries on another hand,
Speaker 1: then you've got all the momentum stops to grow pros
Speaker 1: and Netflix is you know, um, who else just has
Speaker 1: blown up? Right, all these stocks, everybody dumps in and
Speaker 1: with margin at one or whatever it is. Yeah, and
Speaker 1: you're thinking, well, the dividends higher, so I can go
Speaker 1: into Apple. But that all works until something in the
Speaker 1: whole series takes you down and it delivers everything right,
Speaker 1: because then a hedge fund gets delevered. Then when one
Speaker 1: hedge fund gets levered, the stock goes down. Someone else
Speaker 1: wants to meet the benchmark. Then the day trader gets
Speaker 1: pulled out. And even though that's a smaller percentage than people,
Speaker 1: the hedge funds want to freak out because they're gonna
Speaker 1: lose all their upside for the year, and so they're
Speaker 1: getting called in, right, and they're getting called in because
Speaker 1: of their margins because they were levered up. And so
Speaker 1: now there's this cascade until you get to the bottom
Speaker 1: and you never know really what that is, and then
Speaker 1: people with that start creeping back in to buy again.
Speaker 1: So you mentioned complexity in the markets. Let's talk a
Speaker 1: little bit about high frequency trading. I know you're a
Speaker 1: big fan, you're an algorithmic trading. You have a whole
Speaker 1: roll of servers set So here's my complaint about h
Speaker 1: f T. And I'm curious because I found doing a
Speaker 1: little research on you over the past few weeks. I
Speaker 1: found you and I are pretty sympatico about a lot
Speaker 1: of a lot of things. We disagree about a handful
Speaker 1: of things, but we'll get to those. So my problem
Speaker 1: with h f T is simply, this trading is a
Speaker 1: zero sum game. And if someone's jumping in in front
Speaker 1: of Grandma's mutual funds trading whatever the h f T
Speaker 1: s are making, that's coming right out of Grandma's retirement
Speaker 1: in terms of transaction costs. Absolutely, it's just it's black
Speaker 1: and white. There's no and I agree with that and that,
Speaker 1: but that's less of an issue to me. Um. What's
Speaker 1: more of an issue is there's no such thing as
Speaker 1: bug free software, So you think this is adding instability
Speaker 1: and danger freezes. We've seen the flash clearly, the flash crash,
Speaker 1: and we saw what effectively looked like a bond flash
Speaker 1: right like in an hour, not even in about ten minutes.
Speaker 1: The ten year went from two three to one nine.
Speaker 1: Back up that that doesn't make a whole lot. We
Speaker 1: used to say that that was a fat finger, but
Speaker 1: that was purely computers are computer computer. So did you
Speaker 1: ever see the movie UM, what War not Star Wars
Speaker 1: not um? Where do you want to play a game
Speaker 1: of thermonuclear war with Matthew? Four games? Right? And it
Speaker 1: was like you wanted. It was like two machines talking
Speaker 1: to each other in a simulation, right, But then the
Speaker 1: simulation turned real and then they had to go back
Speaker 1: door and say, hey, Joshua, you want to play a
Speaker 1: game of chess? Right? High frequency trading is no different.
Speaker 1: It's an ongoing um interaction between algorithms from competing sources.
Speaker 1: No one is giving any thing up to anybody else
Speaker 1: and saying I'll share the pie. They're all trying to
Speaker 1: be smarter. Literally, if you wanted to destabilize, now they've
Speaker 1: with when they put on the what you call it
Speaker 1: the not the thresholds on circuit breakers in that's that
Speaker 1: that made it more protective. But still, if you want
Speaker 1: to destabilize, you start with currencies. And you know, let's
Speaker 1: just say I'm a I'm a nation, um an enemy nation, right,
Speaker 1: and I just give one company five billion dollars, another
Speaker 1: company five billion, another five billion. Let's just let them
Speaker 1: trade normally for eighteen months. Let's say, so everybody's trust
Speaker 1: that there's just normal, and then all of a sudden,
Speaker 1: I just started hitting one thing that I know is
Speaker 1: going to impact and correlate to another because I've looked
Speaker 1: at the day and here's the corre And then when
Speaker 1: that gets hit, I started hitting that one. And then
Speaker 1: when that gets hit, I start selling that right, not
Speaker 1: even necessarily but individual stocks, but currencies or whatever else, treasuries,
Speaker 1: everything else where there's not circuit breakers. You know. One
Speaker 1: of the most interesting examples of how high frequence trading
Speaker 1: algorithms manifest themselves. People have used examples of some odd
Speaker 1: book for sale on Amazon, and there'll be two algorithms
Speaker 1: offering to sell it, and they'll get into a war
Speaker 1: game situation where the price of this nonsensical book that
Speaker 1: nobody cares about, nobody wants to buy. Suddenly it's two
Speaker 1: thousand dollars for sale used on Amazon. Because somehow these
Speaker 1: algoris got into a loop with each other and they
Speaker 1: just keep raising the price on each other, and suddenly
Speaker 1: a book nobody's buying, nobody cares about his three thousand dollars.
Speaker 1: It's it's insane. You're in favor of a tobin tax,
Speaker 1: a transactional tax. So let's call it this way. If
Speaker 1: if your quote isn't gonna exist for more than a second,
Speaker 1: you pay a penny or so. And what that does
Speaker 1: is that gets rid of the spoofing, that gets rid
Speaker 1: of all this or even nonsensical stuff that has nothing
Speaker 1: what's toever to do with. Look, there's there's a battle
Speaker 1: between people who think they provide a quick city and
Speaker 1: people who like that because they're traders. And then there's investors.
Speaker 1: This market is no longer a platform for investing. We
Speaker 1: don't talk about investors anymore. They're there, they're the puppets
Speaker 1: right there. Yeah, they're the stock puppets that sit out there,
Speaker 1: the muppets that just get taken advantage of. Or maybe
Speaker 1: they put their money in their four oh one k
Speaker 1: and they hope that that those big guys don't. The
Speaker 1: reality is this, this is a platform for hackers. Who's
Speaker 1: got the best technology, who's got the best software, to
Speaker 1: try to make money. We are long gone from the
Speaker 1: days where you said, you know what, I like Netflix,
Speaker 1: you know I like Apple. I could buy this and
Speaker 1: put it away for a few worry about where the schlubs,
Speaker 1: the people who do that are the slubs. So let
Speaker 1: me give you the two counter arguments, which these aren't
Speaker 1: coming from me. I'm quoting other people. But there's something
Speaker 1: there that I find kind of interesting. First sitting in
Speaker 1: your seat a few weeks ago was Jack Brennan. He's
Speaker 1: the chairman of Vanguard, little shop running three trillion dollars,
Speaker 1: and he said, we love anything that reduces our costs
Speaker 1: of execute shin and we're buyers and holders, were long
Speaker 1: term investors, and there's a big advantage for us to
Speaker 1: be able to go out and you use these algorithms
Speaker 1: to find the best price for Vantage Sniper, like Vanguard is.
Speaker 1: There's nothing wrong with that. It helps you, right, but
Speaker 1: it's still all you're doing is saying, you know what,
Speaker 1: the market is such a mess. I'm picking up yeah, right,
Speaker 1: So the grocery store truck crashes on the street and
Speaker 1: I'm picking up the eggs, you know, at a discount,
Speaker 1: you know, And so I don't I don't blame him
Speaker 1: for doing it, because that's his job. That's what I'm
Speaker 1: supposed to do. But all he's doing is trying to
Speaker 1: make a sales pitch for Vanguard, which is cool because
Speaker 1: they're the low cost. And I tell people, if you're
Speaker 1: gonna buy SPX index by a Vanguard, they're great, They're great.
Speaker 1: But at the same time, if you want to be
Speaker 1: an investor and we want people to invest in the market,
Speaker 1: and we want people to look, we want to start
Speaker 1: building an IPO and we want to start building an
Speaker 1: I p O market, there's you want companies to come out.
Speaker 1: The whole idea of the original cont of a market
Speaker 1: is to create capital for companies to grow, and that
Speaker 1: is economy that's good for everybody. Does that concept is
Speaker 1: so far gone right, So in terms of a Tobin tax,
Speaker 1: what is it that's going to make people have to
Speaker 1: keep their their stocks there? So you have Yeah, so
Speaker 1: you can't just turn it quickly. You have to invest
Speaker 1: in the real company. Now that's you know, your reputation is, hey,
Speaker 1: here's a guy who's a libertarian, readsign ran every five years,
Speaker 1: blah blah. But some of the stuff you talk about
Speaker 1: is decidedly I'm going my own path, and I believe
Speaker 1: that sometimes that's the right I guess I guess it
Speaker 1: is because so that's exactly right. So I was impressed
Speaker 1: with the Tobin tax because I wasn't expected. It's a
Speaker 1: perfectly valid the problem, right, The whole key is this
Speaker 1: has got to be a market of investors to create
Speaker 1: capital for companies to grow. We're so far past and
Speaker 1: that's what it's. That's what the original design of markets are.
Speaker 1: It's a place where cap and entrepreneurs can meet and
Speaker 1: we build them far away from that. How many times
Speaker 1: do you see capital being invested in companies that needed
Speaker 1: to grow over the last month. You know, if Wall
Speaker 1: Street was actually doing that, shows like Shark Tank, there
Speaker 1: wouldn't be a need for them. Well possibly, that's okay,
Speaker 1: I'm fine with that, right, but but that just shows
Speaker 1: you Baba didn't need capital. They didn't need twenty billion dollars. Right.
Speaker 1: You know, there's a couple on the margin million dollar
Speaker 1: i p o s, But there's how many there that?
Speaker 1: I read um recently that the number of i p
Speaker 1: o s from ninet so now that raised under fifty
Speaker 1: million dollars has dropped. Isn't that true? Though? The entire
Speaker 1: middle merchant merchant banking market done has disappeared because all
Speaker 1: the companies that were mid sized companies, they've emerged. Question, Okay,
Speaker 1: so what's happened right, So this is one of the
Speaker 1: things that's killing the economy too. So I started company
Speaker 1: and back when it used to be, hey, hopefully we
Speaker 1: can go ublic. I get some liquidity. And this also
Speaker 1: contributes to income equality, like Janet Yellen was talking about.
Speaker 1: So back in the day, there were going to be
Speaker 1: two D four hundred companies a year. Who has they
Speaker 1: as they grew their companies go public could be you know,
Speaker 1: UM on the small OTC whatever and raised ten million
Speaker 1: dollars twenty million dollars. That gave them capital to have
Speaker 1: a chance to grow. Now that capital was gone. So
Speaker 1: they go out there and they get VC angel money.
Speaker 1: And then if they're but that's okay because you would
Speaker 1: give up an equity and I p O two. But
Speaker 1: if you don't hit those initial initial milestones right you've got,
Speaker 1: you're gonna have a hard time getting a Series A.
Speaker 1: But let's just say for the sake of example, you've
Speaker 1: gotten to a Series A, right, and so you've shown
Speaker 1: some success and that's why people have given you a
Speaker 1: Series A round of investing. Right, So you're growing um
Speaker 1: startup company, you've been around two years. Just got what
Speaker 1: happens next? In the past, if you know, you did
Speaker 1: fifty million in sales, seventy five million sales. We're going
Speaker 1: to be profitable, marginally profitable. You go raised million dollars
Speaker 1: in an I p O. Now, if you have that
Speaker 1: type of future, you get bought by the company you
Speaker 1: want to compete with, which inherently means there's less competition,
Speaker 1: which inherently means instead of that company growing to be
Speaker 1: a competitor with Google, or just using as an example
Speaker 1: where Netflix, that company's bought, they're absorbed their pretty pretty early.
Speaker 1: Fewer jobs, right, less competition, right, less less investment in
Speaker 1: up and coming in companies. You know how hard it
Speaker 1: is for an average investor to invest in up and
Speaker 1: coming companies that are public, that have any liquidity. It's impossible.
Speaker 1: And so because of all that, the economy hasn't grown
Speaker 1: nearly as quickly because there aren't back You know, we
Speaker 1: we were doing our best to be profitable, but we
Speaker 1: knew that we could if we showed any kind of
Speaker 1: chance public Right, all right, So I'm gonna be benevolent
Speaker 1: dictator and I'm gonna point you, SEC chair what does
Speaker 1: Mark Cuban SEC chairman do? How do you change the
Speaker 1: rules to benefit the investors really really easy that it
Speaker 1: is a hangar. But first of all, the SEC destroyed
Speaker 1: the I P. O business because they people don't want
Speaker 1: to go public today at all because of all the
Speaker 1: administrivia right, all the accounting, and they have to do
Speaker 1: that now because the SEC was so asleep at the wheel.
Speaker 1: Congress felt like they had to create a thousand new
Speaker 1: rules right in order to be able to protect companies
Speaker 1: because the SEC can't protect them. The SEC still can't
Speaker 1: protect them. They couldn't then and they can't now now.
Speaker 1: What's the problem. The first problem is the SEC is
Speaker 1: not about protecting investors. They could, They don't give a ship, right,
Speaker 1: because all they care about is how many how many
Speaker 1: cases are they going to bring so that more lawyers
Speaker 1: have experience so that they can go out and get
Speaker 1: jobs in the in the private sector. Right, these are
Speaker 1: all pretty straightforward. Inside of trading cases, there are not there.
Speaker 1: Some of them are so rediculous. But the point is,
Speaker 1: we know a couple that are totally mine aside, right,
Speaker 1: it's been a year. It was a year ago this
Speaker 1: week actually done right tossed out you have vindicated in
Speaker 1: but it wasn't even a toss up. It was. It
Speaker 1: was ridiculous. But okay, so let's go back to the SEC.
Speaker 1: You have no idea what insider trading is. Nobody does
Speaker 1: there If you if you trading on material non public information, no,
Speaker 1: not necessarily no. So you're saying that that black let
Speaker 1: law definition, that's that's not so. If you saw a
Speaker 1: guy get hit by a bus and you realize that
Speaker 1: was the CEO, that's material non public information hit by
Speaker 1: a bus. Because there's only six people who saw it, right,
Speaker 1: it was on public doesn't matter. It's if I'm going
Speaker 1: through the garbage can and I find sheets from a merger. Hey,
Speaker 1: this is garbage, this is in publican I'm cleaning up
Speaker 1: the law. Actually, there's been some ambiguous cases. I'll give
Speaker 1: you another example of the SEC in their stupidity. Guy
Speaker 1: was going to work at a at a railroad company,
Speaker 1: right go up driving the parking lot, and he saw
Speaker 1: all these limos and guys in suits getting out day
Speaker 1: after day, week after week a couple of weeks. Figures,
Speaker 1: maybe there's an acquisition going on. I'm gonna buy calls.
Speaker 1: Had no inside information whatsoever, which is in the public area.
Speaker 1: They brought inside a trading case against him. Because he
Speaker 1: works for the railroad. Did he win, Yeah, he won,
Speaker 1: but it cost him a lot of money, a lot
Speaker 1: of time, and a lot of embarrassment. To the point
Speaker 1: I'll give you if you go on Google and google
Speaker 1: mark Cuban sec video. Right. So I did this. I
Speaker 1: had a meeting with the CEO of a company public company,
Speaker 1: and we discussed everything but numbers, right, because he was
Speaker 1: interested in one of my companies. And so a month
Speaker 1: went by and we didn't discuss anything more. We never
Speaker 1: discussed any public never discussed his numbers at all, only
Speaker 1: discussed my company. And so I was like, I like
Speaker 1: this company. I wonder if I can buy stock? And
Speaker 1: I never ended up buying it. But I called the SEC,
Speaker 1: I said, SEC, I'm I told just what. I left
Speaker 1: a message. I was talking to them about selling them
Speaker 1: my company. Right, can I buy stock? So here's what
Speaker 1: They never disclosed anything about their numbers, nothing. Here's all
Speaker 1: my paperwork. But we never got to them. So I
Speaker 1: and I told him that, right, and so they called
Speaker 1: me back. I left us on a measures mark Cubans,
Speaker 1: so they knew exactly who it was. This is on
Speaker 1: my video. This is the video A little phone video, right,
Speaker 1: and they said you need to go to this page right,
Speaker 1: This will tell you to get you a response. So
Speaker 1: I go to the page on the website. It's a
Speaker 1: mother page from nineteen eighty saying you have to send
Speaker 1: your question in seven parts and mail it to us,
Speaker 1: and don't expect an answer anytime soon. That's how the
Speaker 1: SEC works. They have no interest in protecting UM investors.
Speaker 1: They have no interest in making the market a better
Speaker 1: place to trade and making it safer to trade. They
Speaker 1: have not And where they did, you do to change
Speaker 1: So here's the problem. So how you change it? You
Speaker 1: create bright line rules. She talked Mary jo no ambiguity,
Speaker 1: just this is allowed black and white, boom right. And
Speaker 1: then where there's things that happened that you aren't sure,
Speaker 1: then you can litigate those. But if you did that,
Speaker 1: you'd reduced the amount of litigation and nobody would have
Speaker 1: a job in the SEC. Inside or trading group would
Speaker 1: be smaller. Because look, they talked about bright Um. The
Speaker 1: broken window policy that she wanted to create. Mary Mary
Speaker 1: White said, we want this to be a broken window policy.
Speaker 1: Mayor Julie. See like back in the days of the Bronx,
Speaker 1: when you saw a broken windows you fix it because
Speaker 1: broken windows encouraged crime, exactly right, So they wanted to
Speaker 1: do the same thing with the SEC. She literally talked
Speaker 1: about it when she took the job right around the
Speaker 1: same time. I was going to trial for missus a
Speaker 1: year ago. A year year ago, Mary White. But the
Speaker 1: problem is if I walk up to a cop in
Speaker 1: Brooklyn and say, Mr policeman, if I throw a brick
Speaker 1: through this window, is that against the law. Of course,
Speaker 1: he's gonna tell you. If I go up Mary White
Speaker 1: or anybody at the SEC, if I see someone get
Speaker 1: hit by a bus and I want to know if
Speaker 1: I can trade on it, is that against the law
Speaker 1: or not. There's no place you can get an answer.
Speaker 1: Corporate council can say to you, corporate, if he's hit
Speaker 1: you could you could do it? Corporate council every of course. Okay,
Speaker 1: do you know any walk down the street in New
Speaker 1: York City and I walk up to somebody who we
Speaker 1: want to be an investor in the city. It's about still.
Speaker 1: You know, in most places people don't necessarily have counsel.
Speaker 1: It's ridiculous that you the response to that question is
Speaker 1: called corporate counsel. Okay, it's ridiculous and want to say
Speaker 1: why that's the answer, right, because all right, it's it's
Speaker 1: because I don't really know. I have an idea of
Speaker 1: what is and isn't You think there should be, right,
Speaker 1: and you can reduce that amount of great with some
Speaker 1: black and white answers. It would be so easy and
Speaker 1: so fast. So what about the I P O market?
Speaker 1: What can they do to fix the I P O market?
Speaker 1: To to start a research? It's a part of the
Speaker 1: problem is it's already too late for that, right, is it?
Speaker 1: That's it? They were done the market. They never to
Speaker 1: come back. No, it's not. Hopefully that's not the case.
Speaker 1: But they freaked it up so bad, right because they
Speaker 1: are You know, at your companies and your businesses and
Speaker 1: your jobs, you have goals and when you set those goals,
Speaker 1: you you evaluate whether you reach those goals. Right, And
Speaker 1: it's very easy to set. If you can quantify it,
Speaker 1: you can measure it, you can manage it. Right. So
Speaker 1: Mary White, the chairman of the SEC says, we want
Speaker 1: to improve capital markets, we want to make them safe. Right,
Speaker 1: So how do they measure that? Do they do research
Speaker 1: to say, how do you measure that? I I do
Speaker 1: here I'll give you take a step back. Every time
Speaker 1: I give a speech related to the subject, I always
Speaker 1: ask the same questions. How many people have um? What
Speaker 1: was that? Um? How many people have not invested? How
Speaker 1: many people? How many people trust the stock market? No?
Speaker 1: Do you trust to here? Sorry? By the way, that's
Speaker 1: that number is gonna be much lower today than That's
Speaker 1: why I said, you trust the market more today than
Speaker 1: you did. Absolutely most of the average answer is well, also,
Speaker 1: keep in mind, they live through the dot com bus,
Speaker 1: they live through the housing crisis, the crisis, that's exactly.
Speaker 1: Then high frequency trading, all those right, Bernie made off.
Speaker 1: Don't forget Bernie made off all these things. Right, Bernie
Speaker 1: made off. They've had quite a few black eyes. Try,
Speaker 1: But how do they measure their success? They don't do researches,
Speaker 1: fiction rate on inside of trading case, no, not even
Speaker 1: convention the number, yeah, and how much money they've they've
Speaker 1: taken back, which has no relevance to whether people trust
Speaker 1: the market. Then I say to people, Okay, is anybody
Speaker 1: here invest invested internationally in other countries? Have you sure? Okay?
Speaker 1: How many countries do you think? Well, we use Vanguard
Speaker 1: to do emerging markets in Europe and Asian things like that.
Speaker 1: So we're not out picking individual stocks. You trust those markets, right, Um,
Speaker 1: I don't trust Russia. I know that's how many of
Speaker 1: those have you ever? And I know that's one of
Speaker 1: the cheapest markets in the world. Have you ever investigated
Speaker 1: the insider trading laws in any of those markets? No?
Speaker 1: Do you think Vanguard has probably know they haven't. You
Speaker 1: don't think they? Hell no, because there's never there's hardly
Speaker 1: ever cases brought in any of them. Why is that
Speaker 1: because there's no relevance to to confidence in the markets
Speaker 1: relative to insider trading. There's a lot of arguments that
Speaker 1: insider trading should be legal because if I've read because
Speaker 1: the it sends you a message that is better information
Speaker 1: for the market than them not telling you that they
Speaker 1: sold the stop for three months or whatever it is. Right,
Speaker 1: So the fact that people no one, and I asked
Speaker 1: that question, is anybody not invested in a foreign market?
Speaker 1: Now here? Let me do Ali baba biggest I p
Speaker 1: o ever ever? Right? If what is the guy's named?
Speaker 1: She the head of the of China, the head of
Speaker 1: the Chinese Communist Party, goes to Jack, Ma, Jack, how
Speaker 1: you do in this quarter, and Jack says, this is
Speaker 1: my numbers. Exactly what do you think he's gonna have
Speaker 1: You think he's gonna say, no, its insider trading. I'm
Speaker 1: not gonna tell you. Hell no, He's gonna tell him
Speaker 1: whatever he wants to hear. Right, do you think the SEC?
Speaker 1: And here's the company in China, it's a freaking communist country,
Speaker 1: that's the largest I p O in the history of
Speaker 1: the stock market, And there's no freaking way that the
Speaker 1: SEC can enforce any level of insider trading laws related
Speaker 1: to what happens. Isn't that true for any a d
Speaker 1: of the trades here? Really? Pretty much? So whatever we're
Speaker 1: buying Snofi that's in in Europe, anything like that, point
Speaker 1: is that insider trading law. It's not only that, but
Speaker 1: it's really not relevant in investor confidence and they don't care.
Speaker 1: So what has to be done to fix investor maintenance?
Speaker 1: You make it very bright line, right, you? You you
Speaker 1: be honest about what impacts the market, not just what
Speaker 1: creates jobs for lawyers, because obviously people don't care about
Speaker 1: insider trading because we tell people to diversify, which is
Speaker 1: silly on its own face, and a lot of respects
Speaker 1: with people to understand don't understand what they're investing in.
Speaker 1: And diverse racation means to go into all these different
Speaker 1: markets which have no insider trading laws whatsoever. It's really
Speaker 1: an interesting way to think about it. And some of
Speaker 1: our biggest I haven't heard it, And some of our
Speaker 1: biggest pos are a communist freaking countries where it is impossible.
Speaker 1: What are you going to go to the head of
Speaker 1: the Chinese Communist Party and say, look, sir, we need
Speaker 1: to subpoena you so you can come in and you know,
Speaker 1: we can take a transcript. I'm kiding. I love China's
Speaker 1: GDP always to the cent. They know that right there,
Speaker 1: well back in the battle days when jack Well said
Speaker 1: g capital, they could pull a penny out anytime they
Speaker 1: wanted to get the point though, right, So, if you're
Speaker 1: really trying to be effective and accomplishing something, so the
Speaker 1: SEC has basically got to get out of trying to
Speaker 1: manage and trying to do it inside your training law
Speaker 1: enforcement bright line, go back to Congress and say you've
Speaker 1: got to make it bright line. Here's what's allowed, here's
Speaker 1: what's not, Here's what we're gonna let you do. And
Speaker 1: here's what we're not gonna let you do. So everybody knows,
Speaker 1: nobody has a clue. How long do you think it's
Speaker 1: gonna take for the public? You know, I used the
Speaker 1: nineteen twenty nine example. You had the market crash in
Speaker 1: twenty nine, The market didn't get back to break even
Speaker 1: until nineteen fifty four, twenty five years later. It was
Speaker 1: like a whole generation, right, So it took like a
Speaker 1: generation of people to grow up who didn't the older
Speaker 1: out look, and here comes the next general. Here we are.
Speaker 1: It's fourteen years later and we're still not back to
Speaker 1: the two thousand. So the SEC, and part of that
Speaker 1: is the SEC. I don't care what they say because
Speaker 1: we've had to go through Sarbanes Oxley and what was
Speaker 1: the last one that they haven't even god Frank right,
Speaker 1: which have created so much regulation. They had. The SEC
Speaker 1: going back to two thousand and eight had this thing,
Speaker 1: I forget exactly what's called, but he used XML, right,
Speaker 1: which is a scripting type language you can pull data there.
Speaker 1: Now with big data, there's so many ways that if
Speaker 1: you had every single company um file everything that they
Speaker 1: did in every share, that was body the whole thing, right,
Speaker 1: and look for outliers, and so there's a lot of
Speaker 1: ways that they can improve it rather than having the
Speaker 1: CEO have to sign their life away for everything they did.
Speaker 1: And that only happens because the SEC is full of
Speaker 1: morons when it comes inside. So you really think the
Speaker 1: SEC has damaged, really damaged this country, the the economy,
Speaker 1: the i P just because they are so delusional about
Speaker 1: what's a wow that is? That is really And you
Speaker 1: tell me what my argument didn't make sense? Um, there
Speaker 1: was nothing in it. It didn't make sense. You you
Speaker 1: mentioned China. I wanted to bring something up you had
Speaker 1: said that I thought was fascinating, and you hinted at
Speaker 1: it in an earlier discussion. You said, do you think
Speaker 1: China is gonna come walking over flying like they did
Speaker 1: at Pearl Harbor? Which I thought was a joke, You
Speaker 1: know it was. It wasn't parts the animal has Did
Speaker 1: we roll over when the Germans attacks? It was No,
Speaker 1: They're gonna attack us through cyber terrorists, right. No, That's
Speaker 1: that's why I said our pearl harbor, the Chinese are
Speaker 1: gonna be our pearl harbor for cyber security. So so
Speaker 1: here's what I understand that you look at the US
Speaker 1: electrical grid. It's absolutely wide open, unhardened. Anyone who wants
Speaker 1: to send us into a non electrical period, it's not
Speaker 1: that difficult. It's getting better, it's getting a lot better.
Speaker 1: But your point is well taken. The only saving graces
Speaker 1: Russia and China. This is even worse, right, So that's
Speaker 1: that's the one. Number two. There isn't a major company
Speaker 1: in the United States that hasn't had their entire computer
Speaker 1: network rifle through by the Chinese Army. It's not just
Speaker 1: the Chinese army, but it's also the so you know,
Speaker 1: the Russia, the Soviets, the Russians, all these kids that
Speaker 1: are sitting on computers that may not even have electricity
Speaker 1: to full day. That's their way to to just use
Speaker 1: their intelligence and what they've learned. Look, the beauty of
Speaker 1: technology is that there's something new every day, and there's
Speaker 1: a person who created that's something new, and there's everybody else,
Speaker 1: and everybody else starts at the exact same time to
Speaker 1: learn it, right, So nobody has an advantage. The smartest
Speaker 1: guy in Russia, the smartest guy in China, the smartest
Speaker 1: guy in the US, other than the person who are
Speaker 1: people who created it. Everybody else is tied in their knowledge,
Speaker 1: and so it's just a question of effort to learn
Speaker 1: how to crack those systems and learn how to use them.
Speaker 1: And so people with all this time, and you know,
Speaker 1: in Latvia and all these you know, Eastern European countries, right,
Speaker 1: that's all they do all day because the rewards are there.
Speaker 1: And in China, you know, the military they're doing the
Speaker 1: same thing. US and Israel are basically the defense forces
Speaker 1: for that. That's really astonishing. And now when you think
Speaker 1: about that, what does it mean if all this intellectual property,
Speaker 1: all this R and D energy, all this work that's
Speaker 1: been spent by all of corporate America is being pilfered
Speaker 1: by I'm not so worried about that because I'm not
Speaker 1: worried about the I P being pilfered. I'm worried about
Speaker 1: it being destabilized in one way or the other. That
Speaker 1: goes back to high frequency trading and the anybody has
Speaker 1: any ability to do that. Every everything digital is a
Speaker 1: platform for hackers. It's just a question of the value
Speaker 1: proposition to them. Right. So if putin is going to
Speaker 1: put you up an easy cheat, easy street, you know,
Speaker 1: wherever you happen to be and move you to Moscow
Speaker 1: in your entire family. If you're able to crack X,
Speaker 1: Y or Z, why wouldn't you do it? Right? If
Speaker 1: you're in the best opportunity, if you were live. That's
Speaker 1: that's the new get rid, that's the new gold rush, right,
Speaker 1: the new I PO gold rush. I p O market
Speaker 1: is sitting in Russia from a technology perspective, sitting in Russia,
Speaker 1: some Eastern European country or China and just learning how
Speaker 1: to crack, learning how to hack, becoming a hacker for
Speaker 1: your country. It's patriotic to them, right. And the same
Speaker 1: things happened in in Asia, and the same things happening
Speaker 1: in the Middle East, right, Because the greatest return in
Speaker 1: your time to hit, you know, the Mark Cuban type
Speaker 1: I p O type scenario is to crack somebody and
Speaker 1: hack somebody and do it for your country. So what
Speaker 1: about in the United States? The n s a hacking
Speaker 1: everybody else in the world. Different issue, um, But they're
Speaker 1: obviously privacy concerns, probably concerns, and I've started companies around it.
Speaker 1: But you can't argue with you. We need somebody they're
Speaker 1: protecting us. We need somebody being pro you know, playing
Speaker 1: off row active. Yeah, someone's gotta play offense for us
Speaker 1: and usual has backdoors into all these other tools and technologies.
Speaker 1: Or is that just a classic I don't know, I
Speaker 1: don't know, I don't know. All right, he's basically uh
Speaker 1: at an undisclosed location. On able comments on that, Um,
Speaker 1: You've said some really fascinating things politically, I want to
Speaker 1: talk about some of these we I mentioned a lot
Speaker 1: of the things you said really surprised me. Um. I
Speaker 1: wrote a column a year ago about how McDonald's and
Speaker 1: Walmart's are welfare queens that instead of paying a decent
Speaker 1: minimum wage, they pay these low levels. So you you
Speaker 1: actually said, and I think it was too um what's
Speaker 1: her name? Cups on Um. I thought that was a
Speaker 1: really interesting interview. You said, as far as the food
Speaker 1: service industry and retails concerned, I'm I'm for the minimum
Speaker 1: wage being increased to twelve dollars. Why are taxpayers subsidizing
Speaker 1: low wage employees? Now, again, that's really not the sort
Speaker 1: of thing one would expect to hear from you. It
Speaker 1: makes sense when when you think about what to expect
Speaker 1: from me, I'll tell you exactly how it's perfectly rational. No,
Speaker 1: what I do? I say, what's the problem, how to
Speaker 1: fix it? How do you solve it? That's all I
Speaker 1: care about, right, And that's what we've lost in politics today.
Speaker 1: For sure. People don't People don't want to fix problems.
Speaker 1: They want to have their dogma incorporated everywhere. Right. And
Speaker 1: so look, I would love it so that the government
Speaker 1: wouldn't have to do anything brilliant. If that's not it's
Speaker 1: not gonna happen because we look, if you're five hundred pounds,
Speaker 1: if you're a hundred pounds overweight, you gotta lose the
Speaker 1: first pound before you can lose. You can't just stop
Speaker 1: eating and say that's a solution. I think it's a
Speaker 1: hundred pounds. I'm not, but right to um. And so
Speaker 1: that's the way the party's approach things. Right, here's how
Speaker 1: you lose a hundred pounds immediately. It doesn't work that way.
Speaker 1: You've got to solve the problem, and it's got to
Speaker 1: be contextual and have a chance of So twelve doll
Speaker 1: a minimum wage for fast food and retail makes sense
Speaker 1: in your mind, yeah, because people still have to eat,
Speaker 1: So it's not like it's fungible money. Right, So you're
Speaker 1: going to eat somewhere, and if it applies to all
Speaker 1: fast food company, every everybody goes up to anyone, right,
Speaker 1: And look, it's not like people. They can hire fewer people.
Speaker 1: They have to have serve their demand. Makes a lot
Speaker 1: of sense. Let's talk. Can we talk about your rivalry
Speaker 1: with Donald Trump? I actually like Donald. It's not really
Speaker 1: a rivalry. It's just that he's easy to pick on. Well,
Speaker 1: you once said something to him. The quote that stood
Speaker 1: out was I could write a check for your whole
Speaker 1: net worth and I wouldn't even notice it was missing. Yeah,
Speaker 1: that was true. What sort of argument were you in
Speaker 1: the middle? Because show the benefactor and he had their Prentice,
Speaker 1: So he said my show was a knock off, which
Speaker 1: it wasn't, but it was still poorly done. It was
Speaker 1: a whole another set of reasons. So yeah, he's an
Speaker 1: interesting Donald. I actually like Donald, but he's when it
Speaker 1: comes to social media skills, he's got none. Right, He's
Speaker 1: got no social media game whatsoever. So you know, face
Speaker 1: to face, I love talking to him face to face.
Speaker 1: You know, just he's a smart guy. He's got you know,
Speaker 1: he's he's been successful. Um, he's been up, he's been
Speaker 1: down in he's fought back and I get in tons
Speaker 1: of credit. The old, the old New York joke about
Speaker 1: him was, you know, he made a small fortune in
Speaker 1: New York, really started with one lost most of it,
Speaker 1: which is when it comes to social media, not his forte.
Speaker 1: Oh no, it's just so whatever he says, it's just easy.
Speaker 1: So you offered him a million dollars to shave his
Speaker 1: head and any response. Again, unlike Donald, how people think
Speaker 1: it's this big rivalry. Um, But I like him. He's
Speaker 1: a He's definitely a character, to say the least. Coming
Speaker 1: up next week on Masters in Business, Donald Trump, I
Speaker 1: don't think that's gonna happen. Um. This was again another quote.
Speaker 1: I love the comments, I love the concept, says Mark
Speaker 1: Cuban of Obamacare. Not what one would expect. Um. Now,
Speaker 1: clearly the United States healthcare system is a mess, and
Speaker 1: and giving a lot of people healthcare through the emergency room,
Speaker 1: which was a Reagan era law that was signed, doesn't
Speaker 1: make anything. We pay for healthcare one way or the other. Right,
Speaker 1: people are dropping down it the most expensive way you
Speaker 1: can possible. Right. And so the insurance companies had their
Speaker 1: chance to be at and they had their chance to
Speaker 1: come up with better solutions. They cherry picked the best
Speaker 1: and they never did right. They picked the best risk
Speaker 1: and said we're can ignore everybody else. So they we
Speaker 1: put the health of our country in the free market
Speaker 1: in their hands and they basically said, rather than doing
Speaker 1: the right thing, we're worried about earnings per share. But
Speaker 1: they made a choice. They made a choice knowing that
Speaker 1: there was a risk, particularly when Obama came in, that
Speaker 1: if we didn't provide the right service, we were going
Speaker 1: to be a risk of being This hasn't really hurt
Speaker 1: them because now they just got forty million new insurance
Speaker 1: which they're gonna they'll provide. But it was on a
Speaker 1: different set of terms. It wasn't on this Well, there's
Speaker 1: no more decision. You can't just drop somebody because they
Speaker 1: got sick. But which was really a horrible thing they
Speaker 1: used to do. It was ridiculous, Right, what did I
Speaker 1: read at one of claims are turned back initially, so
Speaker 1: people who are just to be a pain he has
Speaker 1: to try to you know, hopefully people will get sick
Speaker 1: and not follow through, right, which was horrible in this country. Look,
Speaker 1: we make choices as a country. We we want to
Speaker 1: have transportation so we have we have roads and those
Speaker 1: roads are maintained. We want lights and those we want
Speaker 1: fine roads that are maintained because right, but air traffic control,
Speaker 1: there's things that we we collectively agree to write. Health
Speaker 1: is one of those things. In order for us to
Speaker 1: be vibrant as a nation, we want to be healthy. Right,
Speaker 1: And the insurance companies just kicked the ball. They blew.
Speaker 1: Obamacare comes in and says, you know what, you know,
Speaker 1: it's not perfect, but the numbers game. Is the numbers
Speaker 1: game on a national basis that makes more sense. But
Speaker 1: the side effects of those we saw recently that just
Speaker 1: today or yesterday that more people were leaving their jobs
Speaker 1: and looking for more jobs, switching switching jobs because they
Speaker 1: don't worry about losing their healthcare. Why because of Obamacare?
Speaker 1: Is what you're gonna say, your argument about what we
Speaker 1: require everybody who drives a car to be insured. How
Speaker 1: is this anymore difference if we require anybody who could
Speaker 1: possibly go to the hospital playing car boat, you better
Speaker 1: have insurance. Right, So if you're mechanical, we're gonna make
Speaker 1: you do it organic? Why not? Why not are the
Speaker 1: same thing? It makes perfect because we make choices as
Speaker 1: a as a nation, right that we want our people
Speaker 1: to be healthy, we want our kids to be healthy.
Speaker 1: And when kids are healthier and we support them, you know.
Speaker 1: And then from an entrepreneurial perspective, now you can leave
Speaker 1: your company, know when you can go out and get
Speaker 1: Obamacare and and have some healthcare. Let's talk about weed.
Speaker 1: Wait before we get there. One other thing, okay, um,
Speaker 1: that I that I like to say that people think
Speaker 1: is controversial. On the libertarian side of me, I would
Speaker 1: love to see nine government services eliminated, eliminated, but that money.
Speaker 1: Just write a check, Just write a check for people,
Speaker 1: rather than playing the game of them coming in you know, right,
Speaker 1: writing money, because you know that's at least thirty if
Speaker 1: not inefficient. If you just took all that money, pay
Speaker 1: the people who were working in those services and administration
Speaker 1: half of what they were getting to not work, right,
Speaker 1: let them go get another job, given their own little
Speaker 1: you know, buyouts, and just helicopter drop the money onto
Speaker 1: all those people. They would end up getting twenty five
Speaker 1: dollars or more each. They would have to spend that money.
Speaker 1: They wouldn't save it, because that's the nature of of
Speaker 1: of where they're at, right, and the economic strata always
Speaker 1: spends whatever cash they come in, right, right, and so
Speaker 1: the economy is going to be far better? Is that realistic?
Speaker 1: Can we really get what we could? Yeah? You could,
Speaker 1: but they're not. It's not gonna happen, right, I mean, yeah,
Speaker 1: maybe if I run for presents someday, which is never
Speaker 1: going to happen, which means, but it makes too much
Speaker 1: fun to Again, the last thing I need is people.
Speaker 1: I mean, who wants that level of scrutiny and who
Speaker 1: wants I've got graveyards. I don't need, not skeletons. I've
Speaker 1: got a graveyard. So let's go back to weed, because
Speaker 1: again libertarian and I have certain leanings in that way.
Speaker 1: I never understood why marijuana was illegal versus beer or alcohol,
Speaker 1: which does far more damage. But when you look at
Speaker 1: the damage done to people with UM numbers are drunk
Speaker 1: drunk driving, and you know, if you're driving and you're high,
Speaker 1: you're going too slow. That's the problem, you know, Okay,
Speaker 1: So on the way to jack in the body, I agree,
Speaker 1: I agree, I agree, obviously, um but it's funny. Right,
Speaker 1: So when you look, I'm neither Republican or Democrat. Don't
Speaker 1: give a penny on either side, right, but when you'm
Speaker 1: not true you gave to you gave to Orange Hatch.
Speaker 1: Oh that was thirteen years ago, and then you gave
Speaker 1: to a Democrats. That's right. That was so that those
Speaker 1: are the only two donations you've made ye fifteen years ago? Right, Um?
Speaker 1: And they were by the way, you noticed. I could
Speaker 1: find that out like this, but I can't find out.
Speaker 1: And what insider trading is, right, right, Remember you took
Speaker 1: the other side of the right when it came to
Speaker 1: the corporation around around so anyway, so we decide, right, Um,
Speaker 1: so we were talking about, um, should drugs be illegal?
Speaker 1: All the costs for incarceration, right, I'm look like it's ridiculous,
Speaker 1: first of all, and you were an independent you said
Speaker 1: you don't care about either side. Yeah, and I space
Speaker 1: what my train of thought was, because see, that's the
Speaker 1: problem with weed is short term memory. Right. But then again,
Speaker 1: on the flip side, I've read that coke kane increases
Speaker 1: your memory and makes true George Collins joke used to
Speaker 1: be the problem with getting marijuana legalized as no one
Speaker 1: can remember where they left. Then that was that was
Speaker 1: his famous line. So let's think about how many people
Speaker 1: are incarcerated due to pot, so you would release all
Speaker 1: those non violent marijuana questions. I remember what I was
Speaker 1: gonna say, Conservatives, right, so where the Conservatives are really
Speaker 1: messed up and the Democrats have their own issue, right,
Speaker 1: put put the side that it's basically the tea party.
Speaker 1: And but conservatives were about conservatives conserving principles, right, Conservatives,
Speaker 1: but the conservat what they're trying to conserve is not
Speaker 1: thirty years old principles. There's still eighty year old principles
Speaker 1: that are so outdated, right, and so conserving the people
Speaker 1: who are sixty years old that were smoking pot in
Speaker 1: the sixties, right and the seventies when it was sex struggling,
Speaker 1: rugs and rock and roll, and you know, everybody was
Speaker 1: getting high and a lot of it wasn't even illegal.
Speaker 1: You know what those are where we should be conserving
Speaker 1: the principles because the people were in charge now in
Speaker 1: their sixties, that's the life they were living. What happened
Speaker 1: to all the people that that you know, we're a
Speaker 1: little bit older than us, that we're telling us about
Speaker 1: how they were going to change the world, they all
Speaker 1: they all went corporate. A lot of those people and
Speaker 1: I mean it's crazy. They're all doing it. We were kids.
Speaker 1: Think about when we were kids, are sex, drugs, rock
Speaker 1: and rolls, Zeppelin, you know, all this stuff, and we're
Speaker 1: everybody's going to change the world. Sit in all these principles.
Speaker 1: A lot of the rise of the conservative movement. Reagan
Speaker 1: is a perfect example. That era was a push back
Speaker 1: to the extremes of the sixties and seventies. Exactly. The
Speaker 1: pendulum swings from one crazy. But they're not conserving what
Speaker 1: they should be conserving any longer. Right, They lust track
Speaker 1: of what a conservative is right now. It's like it
Speaker 1: was eight ninety years ago that they were trying to
Speaker 1: conserve when the world has changed. The world just changed radically.
Speaker 1: So here we are in the most recent Supreme Court
Speaker 1: said gay marriage is now legal to for about two
Speaker 1: hundred million Americans, about thirty one states, I think it was,
Speaker 1: which is pretty amazing that how rapidly that shape can
Speaker 1: get marriage. You can get it high as a kite
Speaker 1: and it's all legal. But it's only in a hand now.
Speaker 1: The marijuana is only a handful of state become it's
Speaker 1: essentially non criminalized in most in most places, although it
Speaker 1: depends on the circumstances. You and I as as white
Speaker 1: people who are in a decent living, we're not gonna
Speaker 1: get busted for smoking weed. But if you're an inter
Speaker 1: city kid, if you're a black kid, your odds of
Speaker 1: getting arrested for smoking marijuana are much much higher than
Speaker 1: number something like one out of ten black. Yeah, and
Speaker 1: that's clearly not applied even handedly. The So the question is,
Speaker 1: I think people are really surprised. Remember Biden kinda opened
Speaker 1: his mouth and forced Obama into this. I don't think
Speaker 1: two years ago anybody expected, not just completely. It's running
Speaker 1: right past the Republicans. It's funny watching them sort of
Speaker 1: trying catch up. You craziness, right, and so you would
Speaker 1: think that they would adapt, but they it's reticuling. I
Speaker 1: would if I would ever run an office, I'd run
Speaker 1: as a Republican because conservatively, financially you're a fiscal conservative,
Speaker 1: fiscal conservative in the two thousand and fourteen way, all
Speaker 1: these things that I talked about, right, Um, But if
Speaker 1: they would just learn to stay out of social issues
Speaker 1: where they make no sense whatsoever. But that was the
Speaker 1: original you know, the original coalition was you go back
Speaker 1: to the Reagan Democrats. It was fiscal conservatives. It was
Speaker 1: the religious right, it was the tax cutters. You put
Speaker 1: those in when you had three TV stations, four TVs.
Speaker 1: You can get away with that. Right Now, that's working.
Speaker 1: I guess listen the immigration you're down in Texas, the
Speaker 1: immigration rules, the watching the Republicans. You have certain Republicans
Speaker 1: pushing this. Oh no, I'm not talking about the the
Speaker 1: far right guys that there are actually some moderate Republicans
Speaker 1: who are reasonable on immigration, and they get shouted down
Speaker 1: by the rest of the party. Yeah, building fences isn't
Speaker 1: gonna do a whole lot sid They don't want this right,
Speaker 1: they're gonna eventually. I think the Republicans have hurt themselves
Speaker 1: with the Hispanic voting. They're gone. It's gone. It'll take
Speaker 1: a generation. Look, the same thing happened with with um
Speaker 1: when Johnson passed the Voting Rights Act. The thing was
Speaker 1: all right, we just lost Southern whites for a generation.
Speaker 1: Turned out to be generations. Yeah, and it's I mean
Speaker 1: with social media everything, communications is much quicker, right, and
Speaker 1: and the Repulicans Republicans just don't get it. Why is
Speaker 1: that why you can't get You can't you can't they
Speaker 1: can't get the tech geeks to do this for them. No, no, no,
Speaker 1: they just can't get accepted among themselves. I guess right,
Speaker 1: you're not gonna get elected because the people who vote
Speaker 1: in non presidential elections, there's there's so few of them
Speaker 1: that it's the midterm elections the Republicans can do really well.
Speaker 1: Unless the Democrats really get out to vote like they
Speaker 1: did for the presidential election, you're gonna get further and further, right.
Speaker 1: I don't know. Look, I'm not I'm not a political pundit. Um,
Speaker 1: I'll defer to Nate Silver and how it all work out.
Speaker 1: But um, well, he's just saying. He's saying the Republicans
Speaker 1: will take the Senate and then that tease up the
Speaker 1: presidential elections. By the way, Republican Senate isn't the worst
Speaker 1: thing for Hillary Clinton. I can't think. Oh no, she,
Speaker 1: if anything, she probably is happy with that. And the
Speaker 1: only question is who are the Republicans gonna put up
Speaker 1: against her? I have no idea. That's the unknown. What's um,
Speaker 1: what's the dude's name? Chris Christie? Just uh what state? Oh? Um,
Speaker 1: he Canadian? He had to dual Canadian Ran Paul No,
Speaker 1: not rand oh I can't believe. I don't play co
Speaker 1: stuff attention um Ran, Hispanic name, Hispanic name, Ted Cruz,
Speaker 1: Ted Cruz. Okay, so when I go through Washington and
Speaker 1: he's mentioned as a big name, right, the one thing
Speaker 1: I hear about Ted Cruz and I don't know the
Speaker 1: guy I don't know anything about is that he's a jerk.
Speaker 1: Everybody eats him and he met him. No, I've never
Speaker 1: met him. So this is all second hand. But all
Speaker 1: I know is that everybody that I've talked to that
Speaker 1: knows anybody who works from so again second hand, they've
Speaker 1: all quit or been fired, and the turnover is enormous.
Speaker 1: And this is the guy that, from what everybody says,
Speaker 1: is most likely to be the Republican. So you can't
Speaker 1: you can't build a presidential team. Assuming that's true. I've
Speaker 1: never heard that before, time in and time out, again
Speaker 1: and again and again and again. What's been so fascinating about. Look,
Speaker 1: I grew up a Jacob Javits Republican and in New York.
Speaker 1: What that means is Javits is a liberal Northeastern Republican,
Speaker 1: which meant no overseas adventures. That's how Vietnam affected him.
Speaker 1: Low taxes, balance budget, but keep the government out of
Speaker 1: the bedroom. So back in the day, that's the closest
Speaker 1: thing you got to a libertarian in the Republican Party
Speaker 1: that a bit of politics puts me on the far
Speaker 1: left fringe today when that was considered a right thirty years.
Speaker 1: It's all so extreme now and so polarized. It just
Speaker 1: doesn't work. Well. Hopefully they'll figure out some somebody will
Speaker 1: figure some way. We need a sacrificial candidate to go
Speaker 1: up there and just blow everything up to get people
Speaker 1: paying attention, knowing there's no chance of being elected within
Speaker 1: their party, but just to get the topics discussed. You know,
Speaker 1: the closest guy to that was Rand Paul, who used
Speaker 1: to say stuff that and the rest of the party
Speaker 1: would just cringe. It was fascinating, but he was so extreme,
Speaker 1: like gold standard and this and that that. It was
Speaker 1: just he just played liberit libertarians. So he wasn't He
Speaker 1: doesn't He didn't solve problems. He just he was just
Speaker 1: as much dogma as anybody else. You need someone who's
Speaker 1: gonna look at everything individually and say here's the problem,
Speaker 1: here's the solution, here's how we vetted it. If you
Speaker 1: don't like it kiss my ass because I don't care
Speaker 1: if I get elected. Ron Pole is the only guy.
Speaker 1: And I wasn't a run Pole fans supporter, but I
Speaker 1: was kind of a fan of his because he's the
Speaker 1: only guy who would come out and say we can't
Speaker 1: spend a trillion dollars on these overseas wars that are
Speaker 1: of choice, and nobody else in the party would say anything. No,
Speaker 1: they wouldn't. But RAN's problem. You know, they asked me
Speaker 1: to go Ran Ran or run right Rans a little
Speaker 1: bit more um center center, but still everything still yeah,
Speaker 1: but it's all dogma, right. You can't just stick the
Speaker 1: libertarian dogma whatever it is, right, conservative dogma, democrat. It's
Speaker 1: the dogma that kills the dog and and that's the
Speaker 1: appeal of the guy we were talking about earlier, because
Speaker 1: he's really he's a technocrat. He just what we need
Speaker 1: to do to get the job, and that's the appeal.
Speaker 1: And unfortunately that's a tough guy to get through through.
Speaker 1: That's why a Bomb has been closer to center than
Speaker 1: anybody else. Right, stays out of the bedroom, do your
Speaker 1: own thing right, you know, begrudgingly came along on gay rights,
Speaker 1: and it turns out to work. Who would? Who would?
Speaker 1: I don't think he expected that to be as this
Speaker 1: less of a problem. It's crazy, But that just says
Speaker 1: who we are as a nation, you know, and we
Speaker 1: we go through this fight fight fight or maybe not,
Speaker 1: maybe not or maybe not. No, forget it, that's old news.
Speaker 1: I have. I have one last quote. I'm afraid I'm
Speaker 1: keeping you here forever. I have one last quote. I
Speaker 1: want to talk to you. Is there anything else you
Speaker 1: want to bring up that we haven't gotten? No, I've
Speaker 1: just you know, more chances to nail the sec un
Speaker 1: tell Mary White should be fired and thrown on the curb.
Speaker 1: And well, who are they going to replace it with?
Speaker 1: They're not gonna me? Yeah? That well again, if I
Speaker 1: was benevolent dictator. There was a line you said that
Speaker 1: stayed with me because it's something I really believe in.
Speaker 1: And this is what I meant by I'm really sympatico
Speaker 1: with a lot of things. You talk about, the most
Speaker 1: important thing you could do with school is learn how
Speaker 1: to learn. I love that line. It's really true. We
Speaker 1: don't teach kids how to think, We teach them how
Speaker 1: to regurgitate. Talk a little bit about what you meant
Speaker 1: by that the world has changed. Um, when we were
Speaker 1: growing up, you had to memorize things because if you
Speaker 1: didn't know them, you had to go find him in
Speaker 1: the library in a book. Right now we live in
Speaker 1: an open book world. You're on your phone, you're you're
Speaker 1: you know, one click onstantaneous something about anything, anything, right,
Speaker 1: So you've got to learn how to not only find it,
Speaker 1: which is easy, but you've got to learn how to
Speaker 1: consume it, um, understand it and critically think about it
Speaker 1: and come to a conclusion. And we don't teach that,
Speaker 1: you know, I try to do it with my kids,
Speaker 1: you know, I try to. Don't just give me the answer,
Speaker 1: tell me why. How important is it to us as
Speaker 1: a society to raise a generation of people who know
Speaker 1: how to think about thinking, who know how to It's critical? Right,
Speaker 1: because if you don't think we're not doing that. The
Speaker 1: scary part is what you would envision if we didn't
Speaker 1: teach our kids how to think critically is exactly what
Speaker 1: we have now, which is which is a system that's
Speaker 1: not working. Part is an extremism ideological The system is working,
Speaker 1: the system is well, everybody is getting food and or
Speaker 1: many most people, it's still the greatest country in the world. Right,
Speaker 1: we still the American dream is still alive. And well,
Speaker 1: it's just we have line items that are ridiculous and
Speaker 1: so it's not like the big picture we're in good
Speaker 1: shape that the country has not falling apart. We have risks, right, yeah,
Speaker 1: depending on where you live, right, um, and so, but
Speaker 1: those relying items, those are things that you can find
Speaker 1: a way to fix if people think critically. The problem
Speaker 1: is people are discouraged from thinking critically because it's not
Speaker 1: politically correct. It doesn't get you raised, it doesn't so
Speaker 1: people shut up, right, and there's no outlets for people
Speaker 1: to grow with their ideas like there should be. But
Speaker 1: your to your point, We as a parent, right, and
Speaker 1: we need to teach your kids to be critical thinkers.
Speaker 1: We need to get kids in school earlier. We need
Speaker 1: to recognize the fact that some parents are not going
Speaker 1: to be good parents, so we help them as much
Speaker 1: as we can with preschool. Like I guess the mayor
Speaker 1: here is trying to do right good. That's smart, right,
Speaker 1: people hate it in a lot of respects. Well, no
Speaker 1: one wants to pay a friend and people accused the
Speaker 1: mayor of New York as running a nanny state. But
Speaker 1: when you have a city, you have real problems. The
Speaker 1: garbage has to be collected. Look, it's not where you start,
Speaker 1: it's where you end up, right, And you can call
Speaker 1: it anything you want. And I I used when I
Speaker 1: was in college, I used to say, look, screw them.
Speaker 1: If they don't want to do the work, they deserve
Speaker 1: everything that they get. Until I got to the point
Speaker 1: where I was paying for them, right, And so now
Speaker 1: that I'm paying for them, I'd rather have them go
Speaker 1: to preschool. I'd rather pay for the preschool because it's
Speaker 1: gonna cost me less. It's cheaper than unemployment, it's cheaper
Speaker 1: than than drug rehabilitation is cheap. That's exactly right. So
Speaker 1: rather than being a fool on my side of it
Speaker 1: and say, golly, that's just wrong. Right, in a perfect world,
Speaker 1: it's wrong, But in reality, it is what it is.
Speaker 1: And how am I going to get to the best
Speaker 1: point for my kids? How am I going to do
Speaker 1: the best what I think is for the country, Because
Speaker 1: not only do you have to learn I learned. I
Speaker 1: say it all the time. Other than serving in the military,
Speaker 1: the most patriotic thing you can do is get stink
Speaker 1: and rich, right, and pay your taxes because that creates
Speaker 1: opportunity for everybody else. And we can help send kids
Speaker 1: to preschool so they can learn. So you've got to
Speaker 1: look for the solutions and not just the line items
Speaker 1: that you fight. And with critical, critically thinking kids, I
Speaker 1: think we'll be we'll get more of that um where
Speaker 1: kids just read dogma and regurgitate, we'll have less of it. Right.
Speaker 1: We want practical solutions, generation that understands how to deal
Speaker 1: with problems and find solution. I mean, because you've got
Speaker 1: to think of in this world things happened, so information
Speaker 1: travels so much more quickly than when we were growing up.
Speaker 1: There used to be an information arb right where people
Speaker 1: didn't know something. I could go to a bookstore figured
Speaker 1: out like that and learn it before anybody else. That
Speaker 1: information arb is gone because everybody has that information at
Speaker 1: their fingertips. It's instantaneous. So because that information ARB has gone,
Speaker 1: everything happens in real time so much and so kids
Speaker 1: things are going to be affecting our kids so much
Speaker 1: more quickly than they did us. It's in social media.
Speaker 1: You know there's a rumor, you know the kids said this,
Speaker 1: The kids said that that you've got to be able
Speaker 1: to respond and deal with an understand in real time,
Speaker 1: in real time, and we've got to teach our kids
Speaker 1: that I'm looking at helping a business school in Dallas,
Speaker 1: UM just change eaching their curriculum for entrepreneurs completely degrees,
Speaker 1: rather than doing the kind of Harvard Business School case study.
Speaker 1: Being able to walk into any business in any situation
Speaker 1: and understand exactly what that business needs and how to
Speaker 1: do it, and critically think and process information more quickly
Speaker 1: because that's the skill set. Learn how to learn, learn
Speaker 1: how to process, learn what the impact is going to be,
Speaker 1: and then be able to make a decision about it. Mark,
Speaker 1: You're absolutely delight to sit and talk to here for
Speaker 1: for two full hours. You're listening to Masters in Business
Speaker 1: with Barry Ridholts on Bloomberg Radio