WEBVTT - US Bank Earnings, Tesla Robotaxi 0:00:02.560 --> 0:00:10.360 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business 0:00:10.360 --> 0:00:13.600 Wait inside from the reporters and editors who bring you 0:00:13.640 --> 0:00:17.959 America's most trusted business magazine, plus global business, finance and 0:00:18.040 --> 0:00:22.280 tech news. The Bloomberg Business Week Podcast with Carol Messer 0:00:22.680 --> 0:00:25.600 and Tim Stenebeck from Bloomberg Radio. 0:00:27.840 --> 0:00:29.280 Take a look at the S and P five hundred 0:00:29.360 --> 0:00:32.680 right now at the sector level, your biggest gainer is 0:00:32.760 --> 0:00:36.280 those financials. That sector up about two percent as a whole. 0:00:36.360 --> 0:00:38.280 A lot of those gains, a lot of that strength 0:00:38.440 --> 0:00:40.800 is coming just from JP Morgan, which is currently up 0:00:40.800 --> 0:00:44.879 about five point one percent after taking the earning stage 0:00:45.040 --> 0:00:47.919 this morning. Let's break it all down now with Bloomberg 0:00:47.960 --> 0:00:52.000 Intelligence Senior Global Banks analyst Alison Williams joining us in 0:00:52.080 --> 0:00:54.520 the studio. Allison, it's already been a long day for you, 0:00:54.600 --> 0:00:57.440 but talk us through, of course, the reaction that we're seeing, 0:00:57.440 --> 0:01:01.000 because it seems like JP Morgan managed to prize really 0:01:01.000 --> 0:01:01.800 across the board. 0:01:02.440 --> 0:01:05.520 It did, and I mean, I think that the reaction 0:01:05.720 --> 0:01:08.240 is a little it's surprising to the upside in terms 0:01:08.240 --> 0:01:09.480 of how strong. 0:01:09.200 --> 0:01:10.479 The stocks are reacting. 0:01:10.600 --> 0:01:14.679 I definitely think that we got good news from JP Morgan. 0:01:15.080 --> 0:01:17.479 I think, you know, on the margin, good news from 0:01:17.480 --> 0:01:20.840 Wells Fargo, But in general, I think the stocks are 0:01:20.880 --> 0:01:24.440 also reacting to the potential soft landing. 0:01:25.240 --> 0:01:25.880 For the banks. 0:01:25.880 --> 0:01:28.240 So we know that interest rates are coming down, and 0:01:28.240 --> 0:01:31.319 that's the best case scenario for the banks. Are interest 0:01:31.400 --> 0:01:35.200 rates come down, it helps to spur loan growth. That 0:01:35.400 --> 0:01:38.760 helps that interest income. Credit continues to be solid what 0:01:38.800 --> 0:01:42.640 we saw in the quarter. First of all, credit does 0:01:42.680 --> 0:01:46.319 continue to be solid. JP Morgan did take a billion 0:01:46.319 --> 0:01:49.160 dollar reserve, but we think that's on the conservative side 0:01:49.160 --> 0:01:49.680 of things. 0:01:50.680 --> 0:01:52.760 You know, well, you think they're being too conservative. They 0:01:52.800 --> 0:01:54.040 should have taken a bigger reserve. 0:01:54.240 --> 0:01:56.160 I would know, I would I would say that the 0:01:56.240 --> 0:02:00.120 billion is conservative. I think you know, the fact is 0:02:00.120 --> 0:02:03.240 that they're charge offs like the current day losses came 0:02:03.280 --> 0:02:03.960 in lower than. 0:02:03.880 --> 0:02:06.760 Expected, so that's a positive, right yeah. 0:02:06.800 --> 0:02:09.240 So I mean basically, you're saying the consumer is in 0:02:09.320 --> 0:02:13.240 pretty good shape and they were smart about their loans. 0:02:12.960 --> 0:02:16.520 Right, correct, correct, And in general, what did most of 0:02:16.560 --> 0:02:20.119 the provision. Thing we've seen is the fact that card 0:02:20.160 --> 0:02:22.160 loans are growing, So it's just about the growth. So 0:02:22.480 --> 0:02:25.560 you know, things are normalizing, as we say, which basically 0:02:25.560 --> 0:02:27.960 means they're going up to where they should be over time. 0:02:29.160 --> 0:02:33.880 But things are healthy interest income. I think that's, you know, 0:02:33.919 --> 0:02:35.720 the big the big news of the day. In fact, 0:02:35.760 --> 0:02:38.400 you saw jpen Morgan stock bouncing around a little bit 0:02:38.800 --> 0:02:41.560 because they sort of went back to the beaten raised. 0:02:41.600 --> 0:02:43.320 We saw that for several quarters in the row they've 0:02:43.320 --> 0:02:46.119 beaten an interest income, they raised guidance. We didn't really 0:02:46.160 --> 0:02:47.760 see that the last couple of quarters. 0:02:48.080 --> 0:02:49.840 Did they set it? Set us up for this? I 0:02:49.840 --> 0:02:50.840 feel like we got set up. 0:02:51.040 --> 0:02:52.680 I feel like we've been doing to be honest, I 0:02:52.760 --> 0:02:55.560 look back at the HCPI function, right. So I'm looking 0:02:55.600 --> 0:02:59.040 at JP Morgan stock. One month and one day ago, 0:02:59.080 --> 0:03:03.120 on September tenth, Daniel pinto the all important JP Morgan 0:03:03.120 --> 0:03:06.040 president came out and said, hey, you guys on the street, 0:03:06.440 --> 0:03:09.320 your estimate for net interest income is way too strong. 0:03:09.400 --> 0:03:12.440 We're not going to make that. And he pushed the 0:03:12.520 --> 0:03:15.679 stock down on that day five point two percent. Now 0:03:15.720 --> 0:03:18.400 they come out and beat on net interest income and 0:03:18.480 --> 0:03:20.560 raised their forecast for this year, and the stock is 0:03:20.639 --> 0:03:21.760 up five point two percent. 0:03:22.320 --> 0:03:24.480 Yeah and so and the two things he said, by 0:03:24.480 --> 0:03:25.160 the way, because he. 0:03:25.200 --> 0:03:29.040 Said net interest income is going to be lower expenses 0:03:29.040 --> 0:03:31.240 are going to be higher, and so today we were 0:03:31.240 --> 0:03:35.160 looking for evidence right of you know, estimates have came 0:03:35.240 --> 0:03:38.680 down for net interest income, so have they come down enough? 0:03:38.720 --> 0:03:42.360 And so they came out, they beat the current number. 0:03:42.680 --> 0:03:45.600 They raised guys for the fourth quarter, and then Jamie 0:03:45.640 --> 0:03:47.960 came out and said, you know, next year it still 0:03:47.960 --> 0:03:51.400 looks a little bit too high. And so my guess 0:03:51.400 --> 0:03:54.480 would be, you know, Bi, we don't do estimates, but 0:03:54.560 --> 0:03:56.960 my guess is going to be estimates go up for 0:03:57.000 --> 0:04:01.600 fourth quarter and people wait to adjust their twenty five 0:04:01.720 --> 0:04:05.119 to see what happens over the next few months, because 0:04:05.200 --> 0:04:08.480 as Jamie also said, things can change, right, and we 0:04:08.520 --> 0:04:10.360 are going to want to see what happens in terms 0:04:10.400 --> 0:04:12.560 of the long growth and the deposits and all of that. 0:04:14.080 --> 0:04:16.520 But you know, to your point, they talked things down, 0:04:16.720 --> 0:04:20.200 they came out and did better. They also similarly on 0:04:20.200 --> 0:04:23.800 the trading front, right, So trading trading and a best 0:04:23.839 --> 0:04:26.320 of banking fees be pretty much across the board except 0:04:26.360 --> 0:04:29.280 for the equity fees maybe a little bit more optimistic. 0:04:30.320 --> 0:04:33.800 And we think that really sets up well for you know, 0:04:33.880 --> 0:04:36.360 Goldman and Morgan Stanley, which we're gonna hear from next week. 0:04:36.520 --> 0:04:38.640 Right, Well, let's talk a little bit more about Jamie Diamond, 0:04:38.680 --> 0:04:40.880 because of course you have the numbers, and then you 0:04:40.960 --> 0:04:43.200 have the call, and then you have of course, what 0:04:43.279 --> 0:04:46.120 Jamie Diamond says. He sounded kind of doom and gloom 0:04:46.480 --> 0:04:49.440 a little bit relatively speaking on the economy. He also 0:04:49.480 --> 0:04:52.120 had some interesting things to say about cash, and I 0:04:52.120 --> 0:04:53.200 believe we have a clip of that. 0:04:54.080 --> 0:04:57.320 I've been quite clear. I think things are the future 0:04:57.320 --> 0:05:00.719 would be quite turbulent. Cash is a bill guy asset 0:05:01.200 --> 0:05:04.120 sometimes in a turbulent world. And you see my friend 0:05:04.160 --> 0:05:07.320 warm buffet, there was dog pine cash right now. I 0:05:07.320 --> 0:05:10.120 mean people shouldeel a little more thoughtful about how we're 0:05:10.160 --> 0:05:12.560 try to navigate in this world and grow for the 0:05:12.600 --> 0:05:15.840 long term for our company. I'd prefer to wait. We 0:05:15.880 --> 0:05:17.800 will be able to deploy it our share and be 0:05:17.960 --> 0:05:19.279 very well served by his waiting. 0:05:20.360 --> 0:05:20.960 I don't remember. 0:05:21.880 --> 0:05:24.240 And so that was Jamie Dimond just talking about how 0:05:24.279 --> 0:05:27.600 he views cash as a valuable asset class still And 0:05:27.640 --> 0:05:29.400 I mean you're seeing that in money market funds. Matt 0:05:29.400 --> 0:05:31.320 and I talk about this all the time, the six 0:05:31.400 --> 0:05:35.320 points something trillion in money market funds. Yeah, yeah, And 0:05:35.360 --> 0:05:37.800 it's interesting that I don't know I feel for like 0:05:37.839 --> 0:05:39.520 for some of the regionals. 0:05:39.040 --> 0:05:40.800 That's painful, the fact that you have. 0:05:40.760 --> 0:05:44.880 Seen people maybe shift their deposits from banks into money 0:05:44.880 --> 0:05:47.320 market funds. But I guess that's not a JP Morgan problem. 0:05:47.360 --> 0:05:50.760 So I think that you know that that obviously a 0:05:50.839 --> 0:05:53.239 bad has both deposit offerings and money markets. 0:05:53.279 --> 0:05:54.360 That's a positive. 0:05:54.440 --> 0:05:59.680 But I think in general his point is where there 0:05:59.760 --> 0:06:03.320 are are, you know, a lot of potential risks, it's 0:06:03.360 --> 0:06:07.240 always good to have cash. Keep in mind that, you know, 0:06:07.400 --> 0:06:10.000 one of the best things Jamie's done throughout his career, 0:06:10.080 --> 0:06:12.320 right is be ready for the moment. So if you 0:06:12.400 --> 0:06:18.240 look back at the financial crisis, going into that, investors 0:06:18.320 --> 0:06:20.440 kept asking him, oh, why aren't you returning capital? 0:06:20.480 --> 0:06:21.640 Why do you have so much capital? 0:06:21.680 --> 0:06:24.080 And that's where the term fortress balance sheet, I think 0:06:24.080 --> 0:06:26.839 where it came from. And because he had that balance 0:06:26.920 --> 0:06:29.279 sheet when a lot of other companies were weak, right, 0:06:29.320 --> 0:06:32.360 he was able to pick up the deposit franchise of 0:06:32.480 --> 0:06:34.400 Washington Mutual. He was able to pick up the prime 0:06:34.440 --> 0:06:36.599 brokerage business of bear Stearns. He's only gone on to 0:06:36.600 --> 0:06:40.120 build those even stronger again. In them pandemic picked up 0:06:40.279 --> 0:06:43.680 some assets even last fall, was able to do some things. 0:06:44.760 --> 0:06:48.280 And this quarter again like that capital ratio, that was 0:06:48.320 --> 0:06:51.160 another I think really positive surprise for bank investors. They 0:06:51.240 --> 0:06:53.800 did a lot of buybacks and that's why again, like 0:06:54.120 --> 0:06:57.200 I think sometimes a lot of his comments get headlines, 0:06:57.320 --> 0:07:00.599 but it's really the underlying philosophy that he's talking about 0:07:01.040 --> 0:07:03.760 in terms of there are a lot of structural risks 0:07:03.839 --> 0:07:07.440 out there. She only had a great I'm sorry, Lisa 0:07:07.480 --> 0:07:10.680 had a great interview recently where Jamie said, you know, 0:07:10.800 --> 0:07:12.920 talked about the structural risk but also said thought that 0:07:12.960 --> 0:07:16.000 FED did the right thing. So I think near term 0:07:16.120 --> 0:07:18.720 things look very strong, but he's just pointing out there's 0:07:18.760 --> 0:07:21.000 a lot of structural things out there. He focuses a 0:07:21.000 --> 0:07:24.560 lot on the geopolitical risks, and cash is something very 0:07:25.200 --> 0:07:28.360 valuable to have when you see that sort of risk planning. 0:07:29.160 --> 0:07:31.320 He's just heroic, Jamie Dimon. 0:07:31.600 --> 0:07:35.960 I mean, he's like otherworldly. He mentioned in that SoundBite 0:07:35.960 --> 0:07:38.640 that you played Warren Buffett. I feel like Jamie Diamond 0:07:38.760 --> 0:07:45.160 is probably Wall Street's, you know, favorite sort of giant since. 0:07:44.960 --> 0:07:47.880 Buffet, you know, and he's just always hitting home runs. 0:07:48.160 --> 0:07:49.000 Yeah, but I don't know. 0:07:49.080 --> 0:07:52.120 I was I was listening to an interview that Charlie 0:07:52.160 --> 0:07:54.080 Munger did randomly a couple of years ago, and he 0:07:54.120 --> 0:07:57.360 was talking about like the sleazy products that the banks sell. 0:07:57.920 --> 0:07:58.520 He didn't call it. 0:07:58.600 --> 0:08:01.200 JP Morgan specifically, but I don't know. And Charlie Munger 0:08:01.280 --> 0:08:02.800 is an Orton Buffett, but you think of them in 0:08:02.840 --> 0:08:03.560 the same breath. 0:08:03.760 --> 0:08:06.320 This is a tangent. I do want to talk about 0:08:06.360 --> 0:08:07.920 will Spargo a little bit while we have. 0:08:07.960 --> 0:08:11.160 You, Allison, because of course net interest income that was 0:08:11.240 --> 0:08:14.080 the big headline for JP Morgan was also the big 0:08:14.120 --> 0:08:17.480 headline for Wells Fargo maybe in the other direction, even 0:08:17.520 --> 0:08:19.160 though Wells Fargo I think is having a pretty good 0:08:19.200 --> 0:08:19.520 day but. 0:08:19.680 --> 0:08:20.480 More than six percent. 0:08:20.600 --> 0:08:23.239 Yeah, but we'll talk to us about that reaction. Because 0:08:23.240 --> 0:08:25.360 they did miss on net interest income. 0:08:25.800 --> 0:08:28.800 So they did miss but I think once you sort 0:08:28.800 --> 0:08:31.760 of they missed, and they actually their guidance moved to 0:08:32.080 --> 0:08:34.600 down nine percent for net interest income this year previously 0:08:34.760 --> 0:08:37.520 is down eight to nine percent. So I think initially 0:08:37.559 --> 0:08:41.000 when you saw those headline numbers, as I did, thought like, oh, 0:08:41.000 --> 0:08:41.760 this is negative. 0:08:41.800 --> 0:08:43.240 But digging into. 0:08:43.160 --> 0:08:47.000 It a little bit, a lot of the downward guidance 0:08:47.040 --> 0:08:48.880 is really based on the myths that we saw in 0:08:49.000 --> 0:08:51.640 third quarter, and one of the things that they did 0:08:51.760 --> 0:08:56.320 was to restructure their investment securities portfolio. So really the 0:08:56.400 --> 0:09:01.120 fourth quarter estimate looks about stable. So the downward guidance 0:09:01.160 --> 0:09:03.880 really kind of reflected some of the pain in the quarter, 0:09:03.960 --> 0:09:07.960 if you will, and the investment banking business and a 0:09:07.960 --> 0:09:10.520 lot of the fees that they're seeing more than offset that. 0:09:10.640 --> 0:09:13.200 So more was they were able to absorb the loss 0:09:13.559 --> 0:09:17.280 the hit from restructuring their portfolio, able to absorb the 0:09:17.320 --> 0:09:20.400 weaker than inspected a net interest income and still deliver 0:09:20.480 --> 0:09:21.280 on the top line. 0:09:22.200 --> 0:09:25.480 What's your favorite bank of all? I'm just putting together 0:09:25.520 --> 0:09:27.440 a comp chart. I'm looking at which I always do, 0:09:27.880 --> 0:09:31.199 JP Morgan versus Wells Fargo, Bank America, Morgan Stanley, Goldman 0:09:31.280 --> 0:09:34.160 Sachs City. I feel like that pretty much covers it, right, 0:09:35.080 --> 0:09:38.240 Morgan Stanley over the last five years, killing everybody else. 0:09:38.320 --> 0:09:40.400 So keep in mind, we don't recommend stocks and bi 0:09:40.559 --> 0:09:41.960 but I can't talk. 0:09:42.400 --> 0:09:43.000 I can't talk. 0:09:43.200 --> 0:09:45.880 I can't talk fundamentally, you know, I mean, for me, 0:09:46.040 --> 0:09:49.280 they each have their own great qualities obviously, you know, 0:09:49.360 --> 0:09:53.760 JP Morgan, best in class, best returns, executing a virtuous 0:09:53.760 --> 0:09:56.520 cycle of technology spending that has helped the bank you know, 0:09:56.760 --> 0:09:58.280 ten twenty years. 0:09:58.600 --> 0:10:00.600 So continue to execute really well. 0:10:01.840 --> 0:10:06.000 Goldman Sachs best in class and that institutional business, and 0:10:06.120 --> 0:10:07.920 I really like the changes that they've made in the 0:10:07.960 --> 0:10:12.120 last couple of years. A lot of the diversification strategies, 0:10:12.160 --> 0:10:15.240 if you will, did not play to their core competitive strengths. 0:10:15.320 --> 0:10:18.240 I understand why they made those changes, but I think 0:10:18.559 --> 0:10:20.360 it's it's sort of a vote of confidence in the 0:10:20.360 --> 0:10:22.760 institutional business that they're kind of getting back to where 0:10:22.760 --> 0:10:25.920 they were. Morgan Stanley, to me, still has a little 0:10:25.920 --> 0:10:29.360 bit to prove, right They Gorman did an excellent job 0:10:29.400 --> 0:10:32.319 in terms of making acquisitions and shifting the business mix. 0:10:33.080 --> 0:10:34.800 But now Pick is going to have to deliver on 0:10:34.840 --> 0:10:37.800 a lot of the promises that Gorman made sort of 0:10:37.840 --> 0:10:38.800 on his way out the door. 0:10:39.440 --> 0:10:40.680 That's pretty much tripled. 0:10:41.000 --> 0:10:43.120 But but yes, but but they've changed. 0:10:43.160 --> 0:10:47.440 But the move from the institutional business to the fee side, right, 0:10:47.800 --> 0:10:51.680 so I think that was the better move than perhaps 0:10:51.760 --> 0:10:55.640 some of the diversification strategies that that Goldman did. So 0:10:56.040 --> 0:10:59.680 Goldman backtracking, but Morgan Stanley going to press their bet 0:11:00.120 --> 0:11:04.400 in terms of having that more recurring revenue, et cetera. 0:11:04.559 --> 0:11:06.800 So definitely done a good job there. 0:11:07.640 --> 0:11:10.880 Bank of America, US Bell Weather and then City Group 0:11:11.000 --> 0:11:15.400 just really a unique animal. I think that disappointing for 0:11:15.440 --> 0:11:18.600 a long time in terms of trying to get operating leverage. 0:11:18.640 --> 0:11:20.560 That's a holy grail for them, and I think Jane 0:11:20.640 --> 0:11:23.119 Frazier finally making some good decisions. 0:11:23.160 --> 0:11:27.600 So you're listening to the Bloomberg Business Week podcast, catch 0:11:27.679 --> 0:11:30.720 us live weekday afternoons from two to five pm Eastern. 0:11:30.840 --> 0:11:33.240 Listen on Apple car Play and then Brout Auto with 0:11:33.240 --> 0:11:37.480 a Bloomberg Business app, or watch us live on YouTube. 0:11:39.000 --> 0:11:41.000 As a consolation. 0:11:41.760 --> 0:11:45.240 The producer said, we could talk about cars all I want, 0:11:45.040 --> 0:11:49.200 And I think it's kind of helpful that one of 0:11:49.240 --> 0:11:50.200 the biggest. 0:11:49.760 --> 0:11:51.439 Movers on the day is Tesla. 0:11:51.679 --> 0:11:55.280 Yes, in terms of percentage losers, it is the biggest one. 0:11:55.320 --> 0:11:58.400 On the S and P percentage gainers. The biggest one. 0:11:58.240 --> 0:12:02.880 Is Uber's correct and those stories are related. You may 0:12:02.960 --> 0:12:05.440 not understand exactly how at first, but we're gonna bring 0:12:05.559 --> 0:12:07.840 Kevin Tyne and to talk about he's the director of 0:12:07.840 --> 0:12:11.960 research at Presidio Group, joining us from Princeton, New Jersey. 0:12:12.040 --> 0:12:15.520 How very ivy league of you, Kevin, but not in 0:12:15.559 --> 0:12:18.760 your garage. I'm usually I'm used to seeing you surrounded 0:12:18.800 --> 0:12:21.720 by like a wall of guitars and a V twelve. 0:12:21.840 --> 0:12:23.080 There's nothing on that wall. 0:12:25.640 --> 0:12:28.040 Well, actually, I just finished. I was just out there. 0:12:28.120 --> 0:12:31.680 We finished a an engine swap and an older mL 0:12:31.800 --> 0:12:36.280 fifty five AMG truck. So I got a lot of 0:12:36.320 --> 0:12:40.040 scraped up forearms and knuckles and whatever. But it's running. 0:12:40.280 --> 0:12:42.520 So I'm a fan of the So the place is 0:12:42.520 --> 0:12:44.280 as basically, that's why I'm in here. 0:12:44.400 --> 0:12:47.560 That's a Mercedes Benz SUV that always reminded me of 0:12:47.559 --> 0:12:49.360 a hiking boot. It's like the same shape as a 0:12:49.400 --> 0:12:50.000 hiking boot. 0:12:50.120 --> 0:12:51.640 I'm gonna google this after the segment. 0:12:52.280 --> 0:12:56.280 Let's talk about Tesla. Though they unveiled Elon Musk. Yesterday, 0:12:56.320 --> 0:13:01.320 the richest man in the world unveiled his cyber taxi 0:13:01.520 --> 0:13:04.680 or cyber cab. I guess it's a driverless car. There's 0:13:04.679 --> 0:13:07.240 no steering wheel, there are no pedals. I thought the 0:13:07.320 --> 0:13:10.439 form factor was pretty cool. I mean, it's a fastback 0:13:10.760 --> 0:13:15.200 kind of looks like a Mustang mock e. But investors 0:13:15.200 --> 0:13:19.800 were super disappointed by a total lack of detail, like 0:13:20.080 --> 0:13:22.040 when are they going to come out? How much are 0:13:22.040 --> 0:13:26.280 they really gonna cost? Are the regulators going to allow 0:13:26.320 --> 0:13:29.920 them to be sold in large numbers. What do you 0:13:29.960 --> 0:13:31.960 think about this cyber cab launch? 0:13:34.120 --> 0:13:39.040 I mean, and that's typically the standard operating procedure is 0:13:39.120 --> 0:13:45.480 somewhere down the road there's it's basically to put ideas 0:13:45.520 --> 0:13:49.000 out there that this is not an automaker, right because 0:13:49.040 --> 0:13:53.240 that business is worth zero or less depending you know 0:13:54.000 --> 0:13:55.800 what you're building and how much of it. 0:13:56.640 --> 0:13:56.840 You know. 0:13:56.880 --> 0:14:00.000 The interesting thing to me about cyber cab or whatever 0:14:00.160 --> 0:14:02.720 or was granted there's no driver, but it was only 0:14:02.760 --> 0:14:04.280 two seats? Am I wrong on that? 0:14:04.440 --> 0:14:07.359 Or that's so weird? It seems like makes no sense. 0:14:07.200 --> 0:14:09.360 Like it would seem like you would right, like you 0:14:09.440 --> 0:14:12.920 go out as couples or you know, you and a 0:14:12.960 --> 0:14:15.320 couple of buddies, like it seemed like two seats even 0:14:15.360 --> 0:14:17.920 though you know, I thought it should have held more 0:14:17.920 --> 0:14:21.240 people to that, but whatever, But no, that's ultimately the 0:14:21.280 --> 0:14:24.240 plan is that this is this is a company that 0:14:24.400 --> 0:14:27.600 is a story stock, obviously, and the narrative is every 0:14:27.640 --> 0:14:29.880 way that it is not an automaker, and it's about 0:14:29.920 --> 0:14:34.200 technology and all the non disprovables down the road that 0:14:34.280 --> 0:14:38.400 get at the valuation similar to other or even higher 0:14:38.400 --> 0:14:39.480 than other tech companies. 0:14:40.080 --> 0:14:44.320 And I mean he also revealed this robovan concept that 0:14:44.360 --> 0:14:46.440 could transport as many as twenty people. I think we 0:14:46.440 --> 0:14:49.640 were showing images of the van, but I agree on 0:14:49.640 --> 0:14:52.920 the two seats thing. But of course you think about 0:14:52.920 --> 0:14:55.280 why this is going over so poorly in the stock market, 0:14:55.320 --> 0:14:58.960 it's because the timelines here are so squishy. I mean, 0:14:58.960 --> 0:15:01.160 you think back to twenty ninth and Elon Musk said 0:15:01.160 --> 0:15:03.120 that he was going to have a million robo taxis 0:15:03.120 --> 0:15:06.640 on the road the following year, and that obviously. 0:15:06.280 --> 0:15:08.280 Did not happen. We are in twenty twenty four, but 0:15:08.960 --> 0:15:09.280 I mean. 0:15:09.240 --> 0:15:11.160 Kevin, you point out in your notes that this is 0:15:11.440 --> 0:15:13.520 sort of, you know, par for the course, for Tesla 0:15:13.600 --> 0:15:14.960 and for Elon Musk specifically. 0:15:16.760 --> 0:15:21.200 Yeah, I mean lucky. There's every excuse of he doesn't 0:15:21.240 --> 0:15:23.360 make it, but he eventually gets there or whatever. And 0:15:23.400 --> 0:15:27.640 I think the issue with the stock today versus competitors 0:15:27.760 --> 0:15:31.000 is that one it proved that he isn't far and 0:15:31.040 --> 0:15:35.640 away ahead of anybody if at all, or how far behind, 0:15:36.320 --> 0:15:39.600 because those competitors have come out very recently and said like, hey, 0:15:39.920 --> 0:15:44.880 besides the science and the regulatory environment, this still has 0:15:44.960 --> 0:15:48.520 to make money someday, and we're very far away from that. 0:15:49.120 --> 0:15:51.760 And I think when you look at the event last night, 0:15:51.800 --> 0:15:54.360 he didn't answer any of those questions. If those are 0:15:54.400 --> 0:15:58.760 the three big things, like, hey, is it possible by when? 0:15:59.160 --> 0:16:02.000 And when does it make money? We didn't, the investors did, 0:16:02.120 --> 0:16:05.560 really didn't get any of those answers. So so you 0:16:05.640 --> 0:16:07.800 sell off one and you buy the others that at least, 0:16:08.160 --> 0:16:10.360 if nothing else, might not be any closer. But they're 0:16:10.400 --> 0:16:12.360 being more realistic about the goals. 0:16:12.960 --> 0:16:17.520 By the way, there already are driverlests like robo taxis 0:16:17.600 --> 0:16:21.280 in San Francisco and probably other super progressive cities. Why 0:16:21.360 --> 0:16:23.160 is this such a big deal? Why is it so 0:16:23.280 --> 0:16:25.480 hard to achieve it? Waimo already does it? 0:16:27.760 --> 0:16:30.440 Yeah, well, you know, I thought what was interesting going 0:16:30.480 --> 0:16:32.960 back away. You know, they talked about, you know, because 0:16:32.960 --> 0:16:35.120 you'll hear it all the time, especially from the bulls, 0:16:35.160 --> 0:16:38.640 about how much data they get from full self driving 0:16:38.720 --> 0:16:42.160 already being on the road. But the question is how 0:16:42.240 --> 0:16:44.600 much of it is actually usable? How much is actually 0:16:44.720 --> 0:16:48.720 teaching anything? Right, if nothing's happening, what are you learning 0:16:48.720 --> 0:16:51.480 from that data? So you can collect all the all 0:16:51.520 --> 0:16:55.080 the miles, but until you have a disengagement or an event, 0:16:55.120 --> 0:16:58.880 it doesn't really learn anything. So, you know, I think 0:16:58.920 --> 0:17:01.840 it's a little bit of that is that people get 0:17:01.880 --> 0:17:05.000 distracted by how much data they collect. But my question 0:17:05.080 --> 0:17:08.320 is like, how much of it is really usable? And 0:17:08.800 --> 0:17:11.919 how do you prepare or plan for all the things 0:17:11.920 --> 0:17:14.480 that don't happen all the time, you know, or are 0:17:14.720 --> 0:17:18.399 very rare. So you know, I don't know that, you know. 0:17:18.440 --> 0:17:22.560 The question of the science of it to me is 0:17:23.200 --> 0:17:26.280 you know, and the safety of it is paramount. And 0:17:26.320 --> 0:17:28.600 that's before you get into all the other issues, right, 0:17:28.640 --> 0:17:32.480 the regulatory issues and the profitability issues. So you know, 0:17:32.680 --> 0:17:35.280 I think investors are looking at it like the Ubers 0:17:35.280 --> 0:17:37.119 and lifts of the world are, and even Weymos of 0:17:37.160 --> 0:17:40.480 the world that are being a little bit more conservative 0:17:40.600 --> 0:17:45.199 on timelines on safety, on profitability are being rewarded, I 0:17:45.200 --> 0:17:47.320 guess for lack of a better word, in this market. 0:17:47.560 --> 0:17:52.160 Yeah, Uber in particular screaming higher on this Friday afternoon. 0:17:52.200 --> 0:17:53.960 But Kevin, you made the point that when it comes. 0:17:53.840 --> 0:17:57.439 To Tesla, it's a story stock and the story for 0:17:57.560 --> 0:17:59.600 Tesla has become a little bit murky when you think 0:17:59.600 --> 0:18:03.200 about I mean, what story do you think that investors 0:18:03.240 --> 0:18:05.040 would want to latch onto here? 0:18:07.000 --> 0:18:10.919 Yeah, I think it's that that it deserves because it 0:18:11.000 --> 0:18:15.639 has even beyond technology multiples. So this can't be an 0:18:15.680 --> 0:18:18.280 automaker because then you would be getting four or five, 0:18:18.400 --> 0:18:21.760 six times and it's getting ten times that, So this 0:18:21.840 --> 0:18:25.479 can't be an automaker. So all the issues with supply 0:18:25.600 --> 0:18:30.560 versus demand, over capacity, price weakness, margins, compressing, all that 0:18:31.359 --> 0:18:36.040 is discounted and pushed aside, and then you look at 0:18:36.080 --> 0:18:38.560 it and you say, okay, but what's coming And this 0:18:38.720 --> 0:18:42.240 is an X I don't know, hundreds of billions trillion 0:18:42.320 --> 0:18:45.360 dollar market and they're ahead. And that's the narrative. So 0:18:45.720 --> 0:18:48.160 you know, to an extent, it almost feels like the 0:18:48.280 --> 0:18:51.040 product of this company because a lot of things that 0:18:51.040 --> 0:18:54.440 they show and talk about don't actually exist or aren't marketable, 0:18:54.520 --> 0:18:58.520 or aren't revenue generating. The product is the stock at 0:18:58.520 --> 0:19:02.679 this point, when you're in between these cycles of growth 0:19:02.680 --> 0:19:05.920 in the auto industry or in the auto division, which 0:19:05.920 --> 0:19:08.880 isn't really happening, and you don't have these other products 0:19:08.920 --> 0:19:11.440 that you've promised on your timeline, yet. 0:19:11.560 --> 0:19:14.760 I'm still worth this a shocking amount, even though it's 0:19:14.800 --> 0:19:18.120 down by half since it's high in twenty twenty one, 0:19:18.440 --> 0:19:21.960 it's a seven hundred billion dollar stock. I mean Ford, 0:19:22.000 --> 0:19:25.680 the Ford Motor Company is a forty billion dollar stock 0:19:25.760 --> 0:19:27.840 General Motors, which has been doing better than any of 0:19:27.880 --> 0:19:30.800 the other carmakers this year. It's only a fifty four 0:19:31.080 --> 0:19:35.520 billion dollar stock, So I mean, it's pretty insane that 0:19:35.680 --> 0:19:38.200 Tesla's worth fourteen x General Motors. 0:19:39.520 --> 0:19:41.960 Well, look at even a Toyota of the world, right, 0:19:42.000 --> 0:19:46.160 if they're a better manufacturer or automaker than that company 0:19:46.200 --> 0:19:49.320 top to bottom, you know, and the and the evaluation 0:19:49.480 --> 0:19:52.200 dwarfs it, which just tells you that the market isn't 0:19:52.200 --> 0:19:55.840 thinking of this company as an automaker, because if they were, 0:19:56.240 --> 0:19:58.320 they would be an also ran or even a not 0:19:58.480 --> 0:19:59.360 very good company. 0:19:59.520 --> 0:20:02.199 Toyota's with two hundred and seventy five billion dollars, so 0:20:03.240 --> 0:20:06.600 not even half and barely a third. Let me ask 0:20:06.640 --> 0:20:09.960 about Uber. Why is When I got here in the morning, 0:20:10.000 --> 0:20:12.840 I didn't quite grasp until I started reading through notes. 0:20:12.920 --> 0:20:18.360 Why Tesla's failure is Uber's success in this space? 0:20:18.840 --> 0:20:19.440 What do you think? 0:20:21.680 --> 0:20:25.640 I think It's just it's the removal of uncertainty, Right, 0:20:25.720 --> 0:20:27.760