WEBVTT - Why Military Leaders Like Me Are Speaking Out: James Stavridis 0:00:01.480 --> 0:00:04.840 You're listening to Bloomberg Markets with Bonny Quinn and Paul 0:00:04.920 --> 0:00:08.799 Sweeney on Bloomberg Radio. Well, over the last couple of weeks, 0:00:08.840 --> 0:00:12.039 we've seen obviously a rise, a surge, if you will, 0:00:12.080 --> 0:00:16.840 in civil unrest, public demonstrations, uh, stemming from the death 0:00:16.880 --> 0:00:20.680 of George Floyd and the use of police force against minorities. 0:00:20.720 --> 0:00:23.640 And there's actually been the use of various forms of 0:00:23.680 --> 0:00:26.319 the U. S military to deal with this. A number 0:00:26.360 --> 0:00:29.800 of retired generals and animals have spoken out with alarm 0:00:29.800 --> 0:00:33.800 really about adding active duty military to law enforcement and 0:00:33.920 --> 0:00:37.080 using the Insurrection Act to get that done. We are 0:00:37.159 --> 0:00:41.080 so fortunate this morning to have retired Admiral UH, Navy 0:00:41.120 --> 0:00:44.920 Admiral James Stavrita's former military commander and NATO and a 0:00:44.960 --> 0:00:47.919 Bloomberg Opinion commons to join US. Admiral, thanks so much 0:00:47.960 --> 0:00:51.159 for taking your time. You wrote a column uh just 0:00:51.440 --> 0:00:56.280 recently about uh, you know, using US active duty military 0:00:56.920 --> 0:00:59.680 for some of these civil issues. Give us your thoughts 0:00:59.680 --> 0:01:02.360 and that you're that you want to express as well 0:01:02.400 --> 0:01:06.720 some of your colleagues in senior military. Sure, let's start, 0:01:06.800 --> 0:01:09.760 Paul with just kind of doing the numbers around the 0:01:09.800 --> 0:01:16.240 country and matching the challenges with what resources are available. 0:01:16.360 --> 0:01:20.360 So in this country there are close to a million 0:01:20.680 --> 0:01:24.600 law enforcement officers and then we also have five hundred 0:01:24.680 --> 0:01:30.160 thousand National Guard. These are uniformed personnel. They're associated with 0:01:30.200 --> 0:01:34.600 the Department of Defense, but key difference they work for governors, 0:01:34.959 --> 0:01:38.679 their citizens soldiers. They're not full time soldiers. So when 0:01:38.680 --> 0:01:42.360 you add up law enforcement and National Guard, it's one 0:01:42.400 --> 0:01:46.120 point five million. Um. I have not seen anything in 0:01:46.200 --> 0:01:51.840 the challenges of protecting these protesters, making sure these demonstrations 0:01:51.840 --> 0:01:56.240 stay peaceful, stopping any violent crime, stopping looting, those are 0:01:56.240 --> 0:01:59.840 all real challenges, but it is a set of challenges 0:02:00.080 --> 0:02:03.360 one point five million men and women can handle. So 0:02:03.600 --> 0:02:07.400 my view and that of many of my senior military colleges, 0:02:07.800 --> 0:02:12.600 don't take the active duty military, who are sworn to 0:02:12.720 --> 0:02:16.160 uphold the Constitution in the United States, who have a 0:02:16.200 --> 0:02:20.080 significant role defending the nation outside of our national borders. 0:02:20.280 --> 0:02:23.840 Don't bring those active duty folks inside the country and 0:02:23.840 --> 0:02:27.480 apply them against protesters. Not an appropriate use of the 0:02:27.520 --> 0:02:32.680 Department of the Defense active duty personnel. Yeah, Admiral's Tavrida's 0:02:32.720 --> 0:02:35.960 it's money. Just on that note, I mean, it's very 0:02:36.040 --> 0:02:39.960 unusual to see retired officers speaking out about a candidate 0:02:40.080 --> 0:02:43.840 or a party, or particularly what a president might say. 0:02:44.000 --> 0:02:45.959 And we saw it this time. We not just saw 0:02:45.960 --> 0:02:47.920 it from one what we saw it from several four 0:02:48.400 --> 0:02:50.760 former chairman of the Joint chiefs of Staff in fact. 0:02:50.960 --> 0:02:54.919 So it's not just that it's ill advised, it's actually 0:02:55.320 --> 0:02:59.320 being condemned, would you say it is? And this is 0:02:59.320 --> 0:03:03.320 a really import and point, Vonnie. I've never seen the 0:03:03.600 --> 0:03:10.560 entire active duty four star military community so significantly united 0:03:10.639 --> 0:03:13.520 on a key issue. So it goes from people like 0:03:14.000 --> 0:03:17.000 General Maddis and General Kelly who are actually part of 0:03:17.000 --> 0:03:20.560 the administration at one time and have been very ritiscent 0:03:20.560 --> 0:03:24.360 about speaking out across the spectrum, to people like Admiral 0:03:24.480 --> 0:03:28.840 mccraven or General John Allen who have been fairly critical 0:03:28.880 --> 0:03:31.920 of the president. Two people like myself, we're kind of 0:03:31.960 --> 0:03:34.760 centrists who are in the middle. As you mentioned four 0:03:34.920 --> 0:03:38.080 chairmen and the Joint chiefs of Staff. That's really quite 0:03:38.120 --> 0:03:42.120 remarkable to get that unanimity of view across this whole community, 0:03:42.520 --> 0:03:45.360 and it's because it really touches the nerve when you 0:03:45.400 --> 0:03:48.640 send active duty military against the citizens in this country. 0:03:48.640 --> 0:03:52.960 It should only be done in extreme circumstances. Um, And 0:03:53.320 --> 0:03:55.520 this does not appear to be a moment that would 0:03:55.560 --> 0:03:59.760 call for that Admiral. On Sunday, Colin Palcole and Paliform 0:03:59.840 --> 0:04:03.400 and UH Joint Chiefs and Chairman and Secretary of State 0:04:03.920 --> 0:04:07.040 call that Republican lawmakers for really having quote nothing to 0:04:07.200 --> 0:04:11.400 say about President Trump's militarization of protest security. What is 0:04:11.400 --> 0:04:14.840 your sense of kind of what your expectations are for 0:04:14.960 --> 0:04:17.560 what Congress should be doing here as it relates to 0:04:17.680 --> 0:04:21.880 the military's use. Well, I I stand with General Powell 0:04:21.960 --> 0:04:24.599 on this, and and I think the way to phrase 0:04:24.680 --> 0:04:27.120 it is the way you just did, Paul is Um, 0:04:27.480 --> 0:04:31.599 it's not incumbent just upon Democrats or just upon Republicans 0:04:32.240 --> 0:04:35.600 to stand up in this moment. And this really touches 0:04:35.720 --> 0:04:39.080 on why are these protests occurring. This is a significant 0:04:39.160 --> 0:04:42.640 moment in American history. We need the Congress to be 0:04:42.760 --> 0:04:46.799 part of the solutions. And so that runs the gamut 0:04:46.839 --> 0:04:51.760 I would say from UH initiating appropriate reform in police 0:04:51.800 --> 0:04:56.719 departments around the country. It includes calling on the administration 0:04:56.760 --> 0:05:01.760 the executive branch not to use active duty military against 0:05:02.160 --> 0:05:07.840 peaceful protesters. UM. It includes providing resources to address the 0:05:07.880 --> 0:05:12.039 economic impact that comes out of COVID. So we need 0:05:12.080 --> 0:05:15.120 our Congress to step up on all those kinds of issues. 0:05:15.279 --> 0:05:18.320 I have tried to shine a spotlight on this issue 0:05:18.400 --> 0:05:22.560 of active duty military not being used against these protests. Yeah, 0:05:22.560 --> 0:05:24.920 and real stupid, as you've just said a few moments ago, 0:05:24.960 --> 0:05:27.080 that this is not the moment for it. Do you 0:05:27.160 --> 0:05:30.120 ever envisage that there might be a moment for it's 0:05:30.279 --> 0:05:33.719 that the active military would be called out against US citizens. 0:05:34.839 --> 0:05:38.440 I think it's unlikely, but it has happened a couple 0:05:38.480 --> 0:05:43.040 of times in our history. Um. Once was most recently 0:05:43.279 --> 0:05:47.280 in the Los Angeles riots in the early nineties. And 0:05:47.279 --> 0:05:50.359 and here's a key distinction, Vonnie, if we are going 0:05:50.440 --> 0:05:53.159 to bring active duty in in a moment like that 0:05:53.200 --> 0:05:56.479 where a city is on flames, and um, there's really 0:05:56.520 --> 0:05:59.840 no semblance of order in the city. It's got to 0:06:00.040 --> 0:06:04.920 be under local authorities. It can't be driven from Washington, 0:06:05.040 --> 0:06:07.479 d C. And a circumstance like that. And then a 0:06:07.520 --> 0:06:12.120 second example would be back in the sixties when some 0:06:12.240 --> 0:06:16.640 of the southern states refused to integrate their schools and 0:06:16.960 --> 0:06:21.360 federal truths were required during the Kennedy administration. So yes, 0:06:21.600 --> 0:06:25.320 there are extreme circumstances where this might be called for, 0:06:25.600 --> 0:06:28.839 this is not one of them, and never should active 0:06:28.920 --> 0:06:33.440 duty military be used against peaceful protesters. That's a violation 0:06:33.480 --> 0:06:36.560 of the constitution. Admiral, just about the thirty seconds here, 0:06:36.600 --> 0:06:39.920 what did you think of General Mark Milly, the current 0:06:40.000 --> 0:06:43.400 Chairman of the Joint Chiefs, accompanying the President Lafayette Square. 0:06:44.320 --> 0:06:46.320 I think it was a mistake, and I think of 0:06:46.400 --> 0:06:49.440 General Milly had that one to do over again, he 0:06:49.520 --> 0:06:52.760 would not have done so short of a direct order. UM. 0:06:52.839 --> 0:06:57.560 I know he is uncomfortable being involved in politics and 0:06:57.640 --> 0:07:00.880 he knows that's not his role. I I thank god 0:07:00.920 --> 0:07:03.000 that he did not appear in the photo op on 0:07:03.040 --> 0:07:06.279 the steps of the church. Um, let's hope that he 0:07:06.360 --> 0:07:08.800 can stay out of politics. We need the military to 0:07:08.839 --> 0:07:12.320 stay out of politics the act of duty military. Admiral 0:07:12.440 --> 0:07:15.200 steud is definitely looking forward to reading more of your opinions. 0:07:15.240 --> 0:07:17.480 Always enjoy listening to what you have to say. Of course, 0:07:17.520 --> 0:07:21.840 former military commander of NATO and a Bloomberg Opinion columnistics 0:07:21.920 --> 0:07:26.520 ordinarily decorated soldier as well, So thank you in general 0:07:26.560 --> 0:07:29.640 for for joining us so Paul, it is really an 0:07:29.640 --> 0:07:31.360 interesting time and of course you know a couple of 0:07:31.400 --> 0:07:35.080 presidents cited, and I think that that moment has passed 0:07:35.240 --> 0:07:39.640 in this particular you know week of social unrest, but 0:07:39.720 --> 0:07:42.280 it came close at one one or two points there 0:07:42.360 --> 0:07:46.440 last weekend to it definitely escalating for the worst it was. 0:07:46.520 --> 0:07:49.800 And I think the Admiral's commentary about the kind of 0:07:49.920 --> 0:07:53.200 you know, mixing politics with the military is it's a 0:07:53.240 --> 0:07:55.200 it's a it's something that he's been concerned about, I 0:07:55.200 --> 0:07:58.520 know really for the last several years and again having uh, 0:07:58.560 --> 0:08:00.960 you know, probably come into the four where once again 0:08:01.560 --> 0:08:04.920 with some of these civil unrest and demonstrations and and 0:08:04.960 --> 0:08:11.320 the use of the military in kind of managing them. 0:08:11.320 --> 0:08:14.320 Time for Bloomberg Opinion. Let's turn to Bloomberg Opinion columns 0:08:14.360 --> 0:08:18.560 Tara la Chappelle. She covers entertainment, telecommunications and deals for 0:08:18.560 --> 0:08:21.680 Bloomberg Opinion. Tara, thanks so much for joining us here. 0:08:22.240 --> 0:08:24.640 You know, I'm a big fan of m and a market. 0:08:24.720 --> 0:08:26.840 Like to see deals come across the tape. Usually on 0:08:27.000 --> 0:08:29.280 that Merger Monday, we see some big deals and I 0:08:29.280 --> 0:08:32.360 always the first thing I do when I see a deal, 0:08:32.760 --> 0:08:34.839 uh story out as I go to the bottom of 0:08:34.880 --> 0:08:38.360 the story to see who the advisors are on the deal. 0:08:38.440 --> 0:08:41.000 Talk to us a little bit about what's happening in 0:08:41.360 --> 0:08:44.080 the world of M and A. How are bankers getting 0:08:44.080 --> 0:08:47.120 deals done? Yes, I mean the world of M and 0:08:47.200 --> 0:08:49.120 A is is very old school, and that it all 0:08:49.160 --> 0:08:52.400 still revolved around meeting in person. You know, the handshake 0:08:52.480 --> 0:08:54.400 is the final way to steal the deal. And it's 0:08:54.440 --> 0:08:57.080 a lot of travel and you know, I think some 0:08:57.200 --> 0:08:58.920 bankers you know, would still be willing to get on 0:08:58.960 --> 0:09:01.720 a plane for you know, something a hundred billion dollar 0:09:01.840 --> 0:09:05.560 deal like the astro Zenica UM talks that were reported 0:09:05.559 --> 0:09:08.320 over the weekend with Gill lead. But at the same time, 0:09:08.360 --> 0:09:09.800 I think, you know, a lot of people are still 0:09:09.800 --> 0:09:13.640 reluctant to travel UM. A lot of CEOs, especially at 0:09:13.800 --> 0:09:16.600 companies that are a bit more tech savvy like Verizon 0:09:16.720 --> 0:09:19.400 we saw this with for instance, are willing to look 0:09:19.400 --> 0:09:23.400 at doing pretty sizeable deals negotiating them over things like 0:09:23.559 --> 0:09:26.280 Zoom video conferences. In the case of Verizon, just a 0:09:26.280 --> 0:09:29.360 few weeks ago, they bought a company called Blue Jeans Networks, 0:09:29.760 --> 0:09:32.640 which happens to be a video conferencing company a lot 0:09:32.720 --> 0:09:35.720 like Zoom, and so they bought a video conferencing company, 0:09:35.760 --> 0:09:39.480 but they also negotiated that deal over video chat, which 0:09:39.520 --> 0:09:42.559 is really unusual for the M and A world, And 0:09:42.600 --> 0:09:45.040 I think it's something more and more bankers and CEOs 0:09:45.320 --> 0:09:47.319 are going to start to embrace in these next few 0:09:47.360 --> 0:09:50.000 months and quarters. As you know, people are still a 0:09:50.040 --> 0:09:53.480 little bit hesitant to go completely back to normal. So Tara, 0:09:53.679 --> 0:09:55.640 in your opinion piece today, you point out that M 0:09:55.679 --> 0:09:58.400 and A is actually down fift this year, but may 0:09:58.559 --> 0:10:01.400 pick up eventually when when things start to reopen a 0:10:01.440 --> 0:10:04.000 little wider across the United States. But in terms of 0:10:04.040 --> 0:10:06.480 these deals that you are seeing, that four hundred million 0:10:06.480 --> 0:10:09.640 dollar deal for Blue Jean's networks, for example, are they 0:10:09.720 --> 0:10:13.160 because of the pandemic or had they been envisaged before 0:10:13.160 --> 0:10:16.480 the pandemic. I think you know what we're hearing is 0:10:16.520 --> 0:10:19.080 that there were deals that were probably in the works 0:10:19.200 --> 0:10:22.120 just before the pandemic, maybe even some transactions that were 0:10:22.120 --> 0:10:25.079 pretty close to getting announced or you know, getting close 0:10:25.160 --> 0:10:27.240 to agreeing on the terms at least, and then the 0:10:27.320 --> 0:10:29.720 crisis hit and it kind of just puts everything on hold. 0:10:30.120 --> 0:10:32.440 It would make sense for bankers to kind of go 0:10:32.520 --> 0:10:34.920 after those deals first and try to get those across 0:10:34.960 --> 0:10:37.840 the finish line. Now, if the strategic logic is still 0:10:37.880 --> 0:10:39.640 there and if you can still come to some sort 0:10:39.640 --> 0:10:42.520 of agreement on the price, which is obviously difficult. We're 0:10:42.520 --> 0:10:44.480 seeing that in the case of Tiffany and l V 0:10:44.640 --> 0:10:46.880 m H, where they probably both still want to do 0:10:46.920 --> 0:10:48.839 the deal, but the price may not make as much 0:10:48.880 --> 0:10:51.160 sense at this point. Um. But then I think there 0:10:51.200 --> 0:10:53.800 are other industries where, you know, some of these companies 0:10:53.880 --> 0:10:57.080 are still flush with cash, they still have growth needs, 0:10:57.240 --> 0:10:59.480 and it probably makes sense if they can get any 0:10:59.600 --> 0:11:02.160 company is a little bit cheaper because of this, that 0:11:02.240 --> 0:11:04.040 it makes sense to do that. Of course, there's not 0:11:04.080 --> 0:11:06.440 a whole lot of opportunities for it since the market 0:11:06.520 --> 0:11:09.080 is up the way it is, but I still think, 0:11:09.120 --> 0:11:11.240 you know, all roads are going to lead to deals 0:11:11.280 --> 0:11:13.120 with this. I think there's just a lot of pent 0:11:13.200 --> 0:11:17.280 up demand and a lot of companies that need the growth. So, Ara, 0:11:17.360 --> 0:11:18.760 what are you hearing about when you when you talk 0:11:18.840 --> 0:11:22.400 to bankers across the street and other sources you have. 0:11:22.480 --> 0:11:25.160 I mean, is the expectation that the M and A 0:11:25.240 --> 0:11:29.000 market's really not going to come back until we really, 0:11:29.679 --> 0:11:31.640 you know, get a vaccine and kind of put this 0:11:31.760 --> 0:11:35.440 pandemic behind us, or is there a sense that you know, 0:11:35.559 --> 0:11:38.520 companies and bankers and lawyers can adapt and can kind 0:11:38.520 --> 0:11:42.439 of start getting things done even beforehand. Well, we'll see. 0:11:42.600 --> 0:11:45.520 I do think so that bankers are going to try 0:11:45.559 --> 0:11:47.680 their darndists to try to get deals done. You know, 0:11:47.760 --> 0:11:50.760 I think that they know there are companies that were 0:11:50.840 --> 0:11:53.640 on the lookout for deals before this, So why not 0:11:53.720 --> 0:11:56.480 keep trying and why not try to adapt to this 0:11:56.640 --> 0:11:58.600 you know, new normal, if you want to call it that, 0:11:58.880 --> 0:12:00.880 you know, we are seeing you know, and tells that 0:12:01.040 --> 0:12:03.800 a deal over zoom video chat. As more and more 0:12:03.840 --> 0:12:08.000 companies become comfortable with, you know, not meeting as often 0:12:08.000 --> 0:12:10.680 in person, not doing as much travel, having to do 0:12:10.800 --> 0:12:14.520 diligence and do due diligence, and new kind of inventive ways, 0:12:14.920 --> 0:12:17.400 you could see some companies more comfortable with that than others, 0:12:17.400 --> 0:12:19.480 you know, some industries that might just be hard to do. 0:12:19.520 --> 0:12:22.880 Like I've heard investor's kind of half jokingly say that 0:12:23.400 --> 0:12:25.920 a big oil giant that wants to survey some land 0:12:26.000 --> 0:12:29.560 for a beleaguered oil company somewhere in America could use 0:12:29.640 --> 0:12:32.040 a drone, let's say, to try to look at that 0:12:32.120 --> 0:12:33.920 land and look at that property, which I don't know 0:12:33.960 --> 0:12:35.880 how feasible that is but I do think people are 0:12:35.880 --> 0:12:37.880 starting to think, you know, how can we look at 0:12:37.880 --> 0:12:41.320 this differently and still get deals done? Yeah? I mean definitely, 0:12:41.400 --> 0:12:43.520 dnes are being used in all sorts of sectors. Why 0:12:43.520 --> 0:12:46.640 not this one? Right? Talk to us about companies also 0:12:46.760 --> 0:12:52.240 getting ready for an onslaught of interested buyers. You site 0:12:52.360 --> 0:12:55.520 a statistic which states that more than two dozen public 0:12:55.559 --> 0:12:59.199 companies adopted so called poison pills between March and mid April. 0:12:59.320 --> 0:13:02.800 Why is that? Yeah, this is fascinating. So a law firm, 0:13:03.000 --> 0:13:05.240 I believe it was K and L. They said that 0:13:05.840 --> 0:13:09.480 more than two dozen US companies have adopted poison pills, 0:13:09.559 --> 0:13:11.439 which is a lot more than we saw last year. 0:13:11.440 --> 0:13:14.520 And I think that tells you that there are vulnerable companies, 0:13:14.520 --> 0:13:17.520 companies that were probably you know, their businesses were shut 0:13:17.600 --> 0:13:20.800 during these lockdowns and really affected by the lack of 0:13:20.840 --> 0:13:24.920 consumer demand. That they are worried about activist shareholders coming 0:13:24.960 --> 0:13:28.559 in now or opportunistic buyers. You know, pe firms are 0:13:28.559 --> 0:13:30.560 going to be on the prow and I think they're 0:13:30.559 --> 0:13:32.400 starting to put their guards up and say, you know, 0:13:32.720 --> 0:13:34.560 we we don't want to be bought on the sheep. 0:13:34.640 --> 0:13:37.760 We don't want to be you know, take an advantage 0:13:37.760 --> 0:13:39.640 of in this crisis. So you're starting to see some 0:13:39.679 --> 0:13:42.440 companies put up their defenses. But I think it's interesting 0:13:42.480 --> 0:13:44.640 because just the environment that we're in right now, so 0:13:44.840 --> 0:13:48.480 there's been a lot of social activism over inequality. You know, 0:13:48.640 --> 0:13:50.720 we have the unemployment rate as high as it is, 0:13:50.920 --> 0:13:54.240 it's a really touchy thing to have an activist campaign 0:13:54.320 --> 0:13:57.320 or pe company, you know, using this as an opportunity 0:13:57.400 --> 0:14:00.720 like that. Tara, thank you so much for we're joining us. 0:14:00.800 --> 0:14:03.319 We always love having you on Terra La Chapelle Entertainment, 0:14:03.600 --> 0:14:06.959 Telecommunications and deals columns for Bloomberg Opinion. You can read 0:14:07.000 --> 0:14:10.120 Terror's work at Bloomberg dot com, Slash Opinion plus all 0:14:10.160 --> 0:14:12.400 the other great opinion columns that we have. You can 0:14:12.440 --> 0:14:15.480 also get it at O. P. I N Go on 0:14:15.679 --> 0:14:18.600 the Bloomberg terminal. The Bloomberger Opinion folks do outstanding work. 0:14:18.600 --> 0:14:24.160 I highly recommend it. Well. Some big news out of 0:14:24.200 --> 0:14:27.160 Apple today, not necessarily a new product introduction or a 0:14:27.160 --> 0:14:29.960 new phone or anything like that, but certainly news on 0:14:30.000 --> 0:14:33.120 the back end they're going to make their own chips 0:14:33.120 --> 0:14:35.240 and what does this really mean for Apple and for 0:14:35.320 --> 0:14:38.360 other players in that tech supply chain. To answer that 0:14:38.400 --> 0:14:41.160 we welcome Dan Ives. He's an equity analyst at wed 0:14:41.240 --> 0:14:44.600 Bush Securities and a Penn State alum. I should know Dan. 0:14:44.640 --> 0:14:46.960 Thanks so much for joining us here. How big is 0:14:46.960 --> 0:14:51.400 this news from Apple about their chips. Yeah, it's great 0:14:51.440 --> 0:14:54.840 to be here. It's big in terms of you know, 0:14:54.960 --> 0:14:57.880 cooking Coopercino of talk for over a decade about this 0:14:58.000 --> 0:15:02.040 potential move, and it's really shot across about Intel and 0:15:02.080 --> 0:15:04.960 other semi players that Apple is just going to have 0:15:05.040 --> 0:15:08.240 more and more control of their devices. You've seen it 0:15:08.320 --> 0:15:10.880 on the iPhone. Now it goes to the max. And 0:15:10.920 --> 0:15:12.920 I think this is gonna be a trend. You're gonna 0:15:12.920 --> 0:15:16.160 see more and more as Apple looks from more full 0:15:16.200 --> 0:15:22.080 control over its devices. So Dan also thinking about do 0:15:22.200 --> 0:15:24.520 they make chips for their other products as well or 0:15:24.520 --> 0:15:27.920 as just just for the back Yeah, if you look 0:15:27.960 --> 0:15:30.640 on the processors side, they've done it from a chip 0:15:30.680 --> 0:15:33.440 perspective in their iPhones as well as some of their 0:15:33.480 --> 0:15:37.280 other chord devices. And now there was a view that 0:15:37.840 --> 0:15:40.400 this Mac move maybe could have happened three or four 0:15:40.480 --> 0:15:42.920 years ago, but in terms of some of the technology 0:15:42.920 --> 0:15:46.960 innovations on the arms side, wasn't there. This is probably 0:15:47.000 --> 0:15:50.960 about a year ahead expectations. If you look relative to 0:15:51.000 --> 0:15:54.960 the streets perspective, I viewed as an incremental positive for 0:15:55.040 --> 0:15:59.760 Apple and incremental negative for Intel, just given what this 0:16:00.080 --> 0:16:03.840 really says about going forward in terms of how Apple 0:16:04.480 --> 0:16:09.240 is really viewing the chip ecosystem, especially in their own devices. 0:16:09.680 --> 0:16:11.800 Now we knew this was coming for a little bit 0:16:11.800 --> 0:16:14.760 of time done, So why is the market reacting now? 0:16:16.160 --> 0:16:18.840 Because this has really been something it's always on the 0:16:18.920 --> 0:16:21.040 com I mean, if you go back two thousand and 0:16:21.080 --> 0:16:24.400 five when Cook talked, you know, and when they were 0:16:24.440 --> 0:16:28.840 to talk about the grand vision from Apple, but it 0:16:28.920 --> 0:16:31.560 was thought that this is something from a Mac perspective 0:16:31.600 --> 0:16:34.400 that really couldn't happen. The fact that they ripped the 0:16:34.440 --> 0:16:37.280 band aid off and now it's going to be likely 0:16:37.320 --> 0:16:41.760 announcing June at the Virtual Developer Conference. It's a surprise, 0:16:41.840 --> 0:16:44.160 and I think it just shows the innovation that Apple 0:16:44.600 --> 0:16:46.640 has been taking. More and more, even when you look 0:16:46.680 --> 0:16:50.000 at some of the five G battle versus Qualcom, more 0:16:50.000 --> 0:16:52.960 and more you're gonna see Apple continue to look to 0:16:53.040 --> 0:16:55.880 own the chips, build it because they want more control 0:16:55.920 --> 0:16:58.960 over their devices. And what that says for investors, it's 0:16:59.040 --> 0:17:03.520 more margins, more cash flow. It also gives more risk 0:17:03.640 --> 0:17:06.160 though to the company, right, because if it's if there's 0:17:06.200 --> 0:17:09.240 any kind of supply disruption, you know, in its own ranks, 0:17:09.320 --> 0:17:13.080 that's that's worse than than you know, if a supplier 0:17:13.720 --> 0:17:17.680 has a supply disruption. No doubt it does put more risk. 0:17:17.800 --> 0:17:21.360 But I've about as much confidence in Cook and Cupertino 0:17:21.440 --> 0:17:24.040 as I do in Selly Cell and turtle Land and Airplane. 0:17:24.320 --> 0:17:28.399 And I think it comes down to the confidence that 0:17:28.600 --> 0:17:32.480 Cook and Apple bill with investors. The more control they have, 0:17:32.760 --> 0:17:37.440 they have more control over launches, over timing, and over 0:17:37.480 --> 0:17:40.320 even profitabile anywhere they could take it. So I think 0:17:40.359 --> 0:17:43.400 this is something, at least from the vestor perspective, you 0:17:43.440 --> 0:17:45.960 want to see have Apple have a more control. And 0:17:46.000 --> 0:17:50.440 also it's more differentiation versus the HPS, the Della's traditional 0:17:50.920 --> 0:17:55.879 PC given it's not the Saame chip. So Dan, you know, 0:17:56.160 --> 0:17:59.040 I'm looking at the Apple chart here, another all time 0:17:59.359 --> 0:18:03.120 high a day. What's the call out there on the 0:18:03.200 --> 0:18:07.400 street here for Apple in the world of that that's 0:18:07.520 --> 0:18:11.920 likely to be altered for the certainly the near term, 0:18:12.040 --> 0:18:16.120 maybe intermediate term, maybe even long term. Yeah, the call 0:18:16.240 --> 0:18:18.920 I continue view a year from now, there's a two 0:18:18.960 --> 0:18:22.440 trillion dollar market cap, and I think the first step 0:18:22.520 --> 0:18:25.159 is to get through this COVID nineteen dark storm, and 0:18:25.160 --> 0:18:27.960 you've seen it get down through the services business that's 0:18:27.960 --> 0:18:31.480 about five to six hundred billion weekly. From evaluation perspective, 0:18:31.920 --> 0:18:34.640 now it's the drum mold to just a massive iPhone 0:18:34.680 --> 0:18:38.440 twelve products cycle with five G we think about three 0:18:38.880 --> 0:18:42.240 fifty million of nine fifty million iPhones world wider in 0:18:42.240 --> 0:18:44.360 the window of an upgrade opportunity. You start to put 0:18:44.359 --> 0:18:47.520 the math around it some of the parts. I mean, 0:18:47.520 --> 0:18:49.520 I think this is a stock has a fore in 0:18:49.640 --> 0:18:51.960 front of it, and I think you're going to continue 0:18:52.000 --> 0:18:54.520 to see this get re rated. In our view on 0:18:54.680 --> 0:18:57.760 fang stocks and tech, where we're still in the sixth 0:18:57.760 --> 0:19:01.879 seventh inning, still think there's twenty more in this rallies 0:19:01.880 --> 0:19:04.240 to look at the rest of the year, what's next 0:19:04.280 --> 0:19:07.480 for what's the next sort of launch of products, and 0:19:07.520 --> 0:19:11.320 when we'll look into we'll be ready to eat them up. Yeah, 0:19:11.359 --> 0:19:14.680 in terms of a proper perspective, we know about iPhone twelve, 0:19:15.200 --> 0:19:17.920 the air pods. If you look at that, they're insulated 0:19:18.000 --> 0:19:21.800 to sell about five million units this year verse sixty 0:19:21.840 --> 0:19:23.760 five million last year. So I think there'll be a 0:19:23.760 --> 0:19:26.760 new device there at w launching, but the big thing 0:19:26.840 --> 0:19:29.000 is going to be on services. Right now, the missing 0:19:29.040 --> 0:19:32.959 piece in the puzzle is content for Apple services on 0:19:33.000 --> 0:19:36.480 the streaming side video. I continue to think between now 0:19:36.520 --> 0:19:38.720 and the rest of this year they look to acquire 0:19:38.760 --> 0:19:43.600 a major Hollywood studio to fill that content void, especially 0:19:43.640 --> 0:19:47.399 in what you're seeing from Disney, Netflix and others, HBO, 0:19:47.520 --> 0:19:51.960 Peacock going after this massive streaming opportunity. I think that's 0:19:52.000 --> 0:19:54.879 probably the next piece in the puzzle that investors are 0:19:54.880 --> 0:19:59.080 hoping to see. Just Dan thinking about these fang stocks here, 0:19:59.240 --> 0:20:01.320 just kind of rip thing once again. What's your thought 0:20:01.359 --> 0:20:04.560 on kind of it's just this group overall, it's had 0:20:04.600 --> 0:20:07.879 such a great run. Give us your thoughts. Look, my 0:20:08.040 --> 0:20:13.480 view is that it's a These are safety blanket stocks, 0:20:13.640 --> 0:20:17.119 you know, category five COVID storm, which is how they've 0:20:17.560 --> 0:20:21.000 continued to navigate, and many of them hit all time highs. 0:20:21.640 --> 0:20:24.800 But ultimately think the second part of that is the rebound. 0:20:24.880 --> 0:20:27.639 I think they're stronger, forgotten stronger, and you're seeing it 0:20:27.760 --> 0:20:31.000 from streaming in Netflix and e commerce and Amazon, social 0:20:31.040 --> 0:20:34.600 media and engagement with Facebook and advertising and Google, and 0:20:34.600 --> 0:20:36.879 then you look at Apple that's one where you have 0:20:36.920 --> 0:20:39.960 a massive icepline cycle in their rise. And I still 0:20:40.040 --> 0:20:44.600 think sang names wed this market higher and overall in tech. 0:20:45.040 --> 0:20:47.000 That's why we continue to think it's a green light 0:20:47.080 --> 0:20:50.680 to own these names, especially on the second half macro 0:20:50.880 --> 0:20:54.200 recovery place, which will be the other leg in these stocks. 0:20:55.840 --> 0:20:58.280 All right, thank you so much for joining us today. 0:20:58.320 --> 0:21:00.359 Down always great to speak with you. That is done. 0:21:00.440 --> 0:21:03.320 I'ves equity analyst Dad web Bush Securities, And the course, 0:21:03.359 --> 0:21:06.000 Apple was higher today by about two and a half percent, 0:21:06.119 --> 0:21:09.679 not the best performer among the TEX stocks, but in 0:21:09.800 --> 0:21:12.400 the SMP five hundred it'd certainly helped. But we saw 0:21:12.920 --> 0:21:15.560 advanced micro devices of more than five percent today, Poul 0:21:15.600 --> 0:21:18.800 and Video up more than Yeah, it's actually the tech 0:21:18.840 --> 0:21:21.600 stox getting a lift here and h and as Dan 0:21:21.720 --> 0:21:24.199 has mentioned, you know, they've been obviously the drivers in 0:21:24.200 --> 0:21:26.159 this market for more than a decade, both on the 0:21:26.240 --> 0:21:29.600 upside and the downside. Here. So Apple another all time 0:21:29.680 --> 0:21:36.159 high today, just extraordinary. Moving to a slightly different asset 0:21:36.240 --> 0:21:39.360 class now on that Adventure Capital were excited to be 0:21:39.640 --> 0:21:42.680 joined by Mark Klein, who's president and CEO of st 0:21:43.040 --> 0:21:46.960 Rock Capital. Now, of course, some early backing. That's sort 0:21:47.000 --> 0:21:50.680 of Rock did very profitable exits include Facebook, Twitter, drop Box, 0:21:50.720 --> 0:21:55.320 and Lift. And the current portfolio companies include course Era, Lime, 0:21:55.600 --> 0:21:58.760 next Door, palant Here among them as well. So clearly 0:21:58.880 --> 0:22:02.679 some smart guys there with you, Mark, including yourself outside 0:22:02.680 --> 0:22:05.160 of Rock Capital. Mark, give us a picture of the 0:22:05.240 --> 0:22:08.639 environment right now, because obviously we're looking at private equity, 0:22:08.880 --> 0:22:11.960 you know, really raining in its horns, if you like. 0:22:12.119 --> 0:22:13.760 And I'm wondering if the same is true a venture 0:22:13.800 --> 0:22:18.160 capital with the market drop earlier this year, did valuations 0:22:18.200 --> 0:22:21.240