Speaker 1: This is Bloomberg Business Wait inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: gloom O Business Finance and tech news the Bloomberg Business
Speaker 1: Week Podcast with Carol Messer and Tim Stenebek from Bloomberg Radio.
Speaker 2: Just all right, folks, were staying with the markets, and
Speaker 2: actually really two particular names, because as we just talked about,
Speaker 2: we've got stocks near their lows, some nervousness, the S
Speaker 2: and P ten percent down from its peak in July.
Speaker 2: But if you look at something like an Amazon, which
Speaker 2: makes up about five and a half percent of the
Speaker 2: Nasdaq one hundred, nearly three point four percent of the
Speaker 2: S and P five hundred earlier, helping send stocks hire
Speaker 2: in the session, you've got Amazon really rallying in a
Speaker 2: big way and holding on to tim most of its
Speaker 2: gains today.
Speaker 3: Yep, seven percent as we speak, help sending stocks overall
Speaker 3: higher at least earlier. In this from Carol, although the
Speaker 3: broader market has slipped since then. Intel is also higher
Speaker 3: on the day today. The company in the midst of
Speaker 3: attempted to turn around, in which the CEO Pat Gelsinger
Speaker 3: commented on saying the chipmaker is quote clearly coming back.
Speaker 3: We're gonna spend this time right now taking a look
Speaker 3: at both of these two very closely washed companies in
Speaker 3: the tech world. Let's start with Amazon.
Speaker 2: Let's do that and with us right now is Punam Goyle.
Speaker 2: She is Bloomberg Intelligence Senior analyst for e commerce at Leisure,
Speaker 2: off Price Retail on Zoom from New Jersey. Punham, I'm
Speaker 2: so glad we have you here. As we always do
Speaker 2: when we want to talk to Amazon, you focus on
Speaker 2: the retail side of this company, but to be fair,
Speaker 2: you look at it holistically. What was the impressive or
Speaker 2: what impressed you about the earnings and the color on
Speaker 2: the business when it comes to Amazon.
Speaker 4: Yes, thanks Carol. So there were really two things. You know,
Speaker 4: Amazon has two really big businesses. One is the cloud
Speaker 4: business and one is the retail business. And let's start
Speaker 4: with the retail business. I think the retail business it
Speaker 4: particularly well built. On the one PE and three P side.
Speaker 4: Sales are much stronger than expect did and that's a
Speaker 4: really good sign going into holidays, because we know that
Speaker 4: the consumers are clearly stretched for their dollars, but they're
Speaker 4: finding value in Amazon. Amazon's able to push this value
Speaker 4: again to them through crime days and deal days that
Speaker 4: they'll have I think throughout the Christmas season with Black Friday,
Speaker 4: Cyber Monday, etc. So we think that's good going into holiday.
Speaker 4: And then on the AWUS side, the fact that they
Speaker 4: were more optimistic than their peers on the cloud business
Speaker 4: thing strength with stabilization was really encouraging to hear on
Speaker 4: the call, and we are very positive on the cloud
Speaker 4: business longer term. The margins there thirty percent plus were
Speaker 4: obviously nice to see too, and we do think that
Speaker 4: cloud business in the longer term with scale will be
Speaker 4: over forty percent.
Speaker 3: So put them Why did sales for AWS just missed expectations?
Speaker 3: And I was a little confused by this move yesterday
Speaker 3: I said it on air. I thought AWS was kind
Speaker 3: of everything, and that's you know what either it beat
Speaker 3: or missed was what moved the company's stock. Why are
Speaker 3: you optimistic and why are investors still pushing shares higher
Speaker 3: even if there was that miss on APUs?
Speaker 4: I mean, I guess it depends on how you look
Speaker 4: at this, right, So twelve percent versus the twelve point
Speaker 4: four percent estimate, in my eyes, isn't really a bigness
Speaker 4: it was in line with what they did last quarter,
Speaker 4: meaning the second quarter. So the twelve percent gains relative
Speaker 4: to what we heard at both Google and Microsoft wasn't
Speaker 4: that bad. And I think really the icing on the
Speaker 4: cake here is on the call when Andy Jazzy came
Speaker 4: on and he spoke about how that they're seeing stabilization
Speaker 4: from those trends even into the fourth quarter. I think
Speaker 4: that was just really encouraging. We all know that spending
Speaker 4: will pick up in a matter of time. Businesses have
Speaker 4: to move towards integrating more cloud into their network as
Speaker 4: well as they need to spend more on AI. So
Speaker 4: Amazon is very well positioned for AWS growth in the
Speaker 4: longer turn. And the fact that they are stabilizing was
Speaker 4: good news to us and I think that's how the
Speaker 4: market received it too.
Speaker 3: Can you make the Amazon Ai connection here? I think
Speaker 3: a lot of people might not be familiar with why
Speaker 3: you know boush and AI will help AWS.
Speaker 4: Yeah, so boost and AI helps not only a WS,
Speaker 4: but it also helps the retail text business. So when
Speaker 4: you think about what AI does, it basically helps build
Speaker 4: the models and interpret data and models for businesses. So
Speaker 4: the fact that AWI can lean on new AI technologies
Speaker 4: and embed that into its infrastructure. It's going to help
Speaker 4: companies use that and leverage that in their own businesses.
Speaker 4: The retails side.
Speaker 2: Oh keep going, no, no, no, keep going.
Speaker 4: Keep going. On the retail side, you know, AI has
Speaker 4: been doing phenomenal things, especially generative AI, where it's helping
Speaker 4: you predict demand, it's helping you streamline inventory, and it's
Speaker 4: helping you personalize, which is describing conversion higher and industry
Speaker 4: that typically, especially online, it's very low conversion rates.
Speaker 2: So does it make sense that I always think about,
Speaker 2: you know, when we first learned about AWS and they
Speaker 2: start breaking it out right because of all the streaming
Speaker 2: that was going on, and you're like, I don't really
Speaker 2: care who supplies the content. We're just making sure we
Speaker 2: have the pipe to get it to you basically, right,
Speaker 2: And that's what AWS was just so involved in the
Speaker 2: early days. Is that kind of akin to with AI
Speaker 2: that people are going to need the infrastructure, the backbone,
Speaker 2: and are they going to be involved in that part.
Speaker 4: So it's software, right, So AI basically it's software that's
Speaker 4: powered through AWUS and that they're integrating and embedding into
Speaker 4: the cloud platform. So as businesses need to become more
Speaker 4: agile and move on to the cloud. AI can only
Speaker 4: be done on the cloud, so you need that, you
Speaker 4: need that support. And for businesses that don't have it,
Speaker 4: which money don't, they will need to either tap into Amazon,
Speaker 4: Awus or Google or Microsoft in one of them. But
Speaker 4: keep in mind Amazon is the largest cloud rider of
Speaker 4: the thirty.
Speaker 2: All right, good stuff, as always, so appreciated, Have a
Speaker 2: great week and put them Goil Bloomberg Intelligence, Senior analyst
Speaker 2: for e Commerce at leisure and off price Retail on
Speaker 2: zoom from New Jersey.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen on
Speaker 1: Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App,
Speaker 1: or watch us live on YouTube.
Speaker 3: Well going on in the world of crypto this week
Speaker 3: Sam Bakman freed testifying at his own fraud trial. He
Speaker 3: says a lot of people got hurt over FTX, so
Speaker 3: that he's not entirely sure about the FTX. Alameda Fund flows. Alameda,
Speaker 3: of course, is the hedge fund, and then there's also
Speaker 3: the actual crypto market. Carol Bitcoin enjoying a solid week
Speaker 3: up roughly twelve percent, and you know you got you
Speaker 3: got to kind of throw that number out there with
Speaker 3: six two thousand one.
Speaker 2: Oops, that was Yeah, that was the past.
Speaker 3: You gotta throw that number out there with the understanding
Speaker 3: that it trades twenty four to seven. So if you
Speaker 3: say that number and you know you gotta, you ought
Speaker 3: to always be looking at it. It's all happening amid
Speaker 3: hopes of fresh demand from the possible approval in coming
Speaker 3: weeks of the first US ETF investing directly in bitcoin.
Speaker 2: Gotta tell you, we got a live blog that's tracking
Speaker 2: the testimony and what's going on in the courthouse today.
Speaker 2: Let's get to it though. We've got our weekly check
Speaker 2: on the world of crypto. We have with us Terrence Yang,
Speaker 2: managing director of Fintech, Law, Tech Privacy at Swan Bitcoin.
Speaker 2: It's a platform that allows people to buy bitcoin, including
Speaker 2: in iras, and he is joining us on Zoom from
Speaker 2: Los Angeles, California. Terran's nice to have you here with us.
Speaker 2: I feel like the world of crypto is focused and
Speaker 2: maybe rightfully so, on what's going on with SBF and FTX.
Speaker 2: What about the trial and the testimony are you watching
Speaker 2: very closely? And maybe what it means potentially for the
Speaker 2: crypto world going forward.
Speaker 5: I am watching closely. Great to see again, Carol. Bottom line,
Speaker 5: I think a couple of things. Defense finally present their case.
Speaker 5: When they do the cross examinations right, it's usually to
Speaker 5: create doubt about the credibility of the prosecution witnesses. It
Speaker 5: is not to present their case. And now they're doing that.
Speaker 5: I think Sam got very lucky and the defense countcil
Speaker 5: got very lucky to have sort of this mock trial
Speaker 5: profit yesterday with a judge, and now Sam seems to
Speaker 5: be doing a better job. He has a tendency to
Speaker 5: me under, but he's getting the point across.
Speaker 3: Do you know him, Terrence, You're you're kind of you're
Speaker 3: talking to You're using his first name and whereas a
Speaker 3: lot of people you know use his initials. Do you
Speaker 3: know Sam Bankman freed?
Speaker 1: No?
Speaker 5: No, I do not.
Speaker 3: But how are you following the trial?
Speaker 5: I follow through X They have a lot of goods,
Speaker 5: good information, but also at Bloomberg dot com and some
Speaker 5: other sites.
Speaker 3: I agree about Bloomberg dot com. There's some great stuff there.
Speaker 3: Our lifelog is really really good. Now I'm just curious
Speaker 3: because it's you know, we we're not getting We have
Speaker 3: to rely on you know, reporting from there, whereas in
Speaker 3: so many other instances we can actually watch live feeds
Speaker 3: from what's going on in the courtroom, and you know,
Speaker 3: we rely on court sketches and impressions Carol from our
Speaker 3: reporters who are there. So it's you know, it's a
Speaker 3: different experience I think for people who are observing you
Speaker 3: don't you know, you don't necessarily see the way he's feeling,
Speaker 3: at least according to our own interpretations. So talk more
Speaker 3: about about what you're seeing and what you're reading from
Speaker 3: the trial.
Speaker 1: Terrence.
Speaker 5: Yeah, sure, So based on what I'm reading and seeing,
Speaker 5: the defense is presenting a case since presenting the case
Speaker 5: that Caroline is basically the one to plane did not
Speaker 5: hedge he had doubts about her abilities right, and its
Speaker 5: thinking of shutting down Alameda and other things. So you
Speaker 5: just need really one juror to get a hung jury.
Speaker 5: One jur who thinks there's reasonable doubt does not cave.
Speaker 5: So someone who's a little bit strong minded, because it
Speaker 5: would be eleven to one. But that can happen, and
Speaker 5: then on retrial, what might happen with the black rock
Speaker 5: and fidelity ATF's happening. Arguably, we're in a bull market
Speaker 5: FTX with John Ray, who's excellent in my opinion, at
Speaker 5: this sort of thing, clawing back assets, maybe doing a
Speaker 5: turnaround and so forth. You could have a situation where
Speaker 5: maybe people don't care as much because, for example, the
Speaker 5: investment anthropic and other things mean that everybody gets paid,
Speaker 5: or at least the FTX investors get paid whole kind
Speaker 5: of cents on the dollar that's possible by the time
Speaker 5: they retry, and so that might be how he gets off.
Speaker 5: See it as kind of a two step process, just
Speaker 5: because there's so much evidence against him.
Speaker 6: Terrence.
Speaker 2: What's productive though for the crypto industry here in terms
Speaker 2: of the outcome of this trial specifically.
Speaker 5: So I part ways with my crypto friends, some of
Speaker 5: them are friends with in real life even today, but
Speaker 5: I am bitcoin only and I think that there needs
Speaker 5: to be and there will be massive cleanup in crypto.
Speaker 5: You see that with Senator Lummis and others kind of
Speaker 5: asking the government to the DOJ to the side kind
Speaker 5: of get off the block or not and just issue
Speaker 5: indictments or make a decision on CZ and finance. But
Speaker 5: also tether I think Tether's okay, but I don't want
Speaker 5: to get into that. I think the main point is
Speaker 5: we have massive tailwinds for bitcoin because of Blackrock, Fidelity
Speaker 5: and two other trillion dollar plus asset managers all applying
Speaker 5: for a spotpitcoin ETF and that looks like it's going well.
Speaker 5: On the other hand, you have crypto which has destroyed
Speaker 5: many Americans, especially poor and middle class, of their life
Speaker 5: savings through these pump and dumps, these digital penny stops,
Speaker 5: that these casinos are basically underregulated, casinos are basically shilling
Speaker 5: on the American public, and that does not looks so good.
Speaker 5: I think that's less promising because of all the securities
Speaker 5: violations and allegedly crimes against committed by SBF potentially as
Speaker 5: cz in Binance will see a fee.
Speaker 3: Actually, are you worried about the implications of people changing
Speaker 3: the way they're thinking about crypto because of SBF and
Speaker 3: other people who are in the crosshairs of law enforcement
Speaker 3: Terance that people are saying, Okay, I'm just gonna throw
Speaker 3: in the towel, because well, look look at the performance
Speaker 3: and two sure and two look at the people who
Speaker 3: we thought were reputable. I mean, they named stadiums and
Speaker 3: had Super Bowl ads.
Speaker 5: I am not. The reason is because I'm a long
Speaker 5: term believer in bitcoin. I think five to ten decades
Speaker 5: out bitcoin should be very valuable. There are other threats
Speaker 5: to it, with Finsen and other things that the government's
Speaker 5: doing that's not good. It's under reported for now. I'm
Speaker 5: sure Bloomberg will fix that and others. But bottom line,
Speaker 5: I'm not worried because look, there's been a mess, was
Speaker 5: a massive bubble in twenty twenty one and crypto and
Speaker 5: bitcoin and the fallout from the bear market and the destruction,
Speaker 5: and there needs to be a cleanup. I think it's
Speaker 5: really naive to think that, you know, this is bad
Speaker 5: for bitcoin, because bitcoin has enduring values and it doesn't
Speaker 5: have a CEO.
Speaker 2: It's not a security Hey, terms, forgive me for jumping in.
Speaker 2: We've just got a couple of minutes left here. But
Speaker 2: I'm thinking, you know, there might be people listening or
Speaker 2: watching are broadcast right now listening to you and say, yeah,
Speaker 2: I get it that there needs to be a cleaning out.
Speaker 2: That makes sense, right. We certainly saw that in the Internet,
Speaker 2: you know, in dot com bust, right, there were some
Speaker 2: things that really made sense and there are a lot
Speaker 2: of things that didn't. Having said that, you know, you're
Speaker 2: at SWAN Bitcoin and you're of course going to say
Speaker 2: bitcoin is the one to follow, and that has legs here.
Speaker 2: So what would you say to somebody like that that
Speaker 2: you're basically forgive me, for lack of better words, talking
Speaker 2: your book.
Speaker 5: No, no, I am talking my book. I think you
Speaker 5: do want people to talk their book and reveal it
Speaker 5: and explain it. I used to be in crypto. I
Speaker 5: was retired when Corey Klipston, our wonderful founder and CEO,
Speaker 5: pulled me like made a job offer to come out
Speaker 5: of retirement.
Speaker 3: So a lot of time, you're two younger.
Speaker 5: I was paid on Wall Street. I'm older than I look,
Speaker 5: and I was overpaid on Wall Street. And I was
Speaker 5: living frugally taking care of my aging parents. But anyway,
Speaker 5: so bottom line, I would say at SWON, we have
Speaker 5: people on a mission to help other people get bitcoin
Speaker 5: before Wall Street and government supply on the bitcoin. If
Speaker 5: we're right, and I think we are, that this is
Speaker 5: the ultimate hard money asset for the future because it's digital,
Speaker 5: it's bare, it's very hard to stop, very hard to
Speaker 5: confiscate and take away and incredibly finite at only twenty
Speaker 5: one million bitcoin. So in my view, it's okay to
Speaker 5: be have a view, but you have to reveal why
Speaker 5: and you have to justify it, like defend your position right.
Speaker 2: Transparency is going to be crucial. But I still try
Speaker 2: to get my head around this idea of the purity
Speaker 2: of what bitcoin and maybe blockchain are supposed to be.
Speaker 2: You know, but then are you opening up doors to
Speaker 2: a lack of oversight and then problems? So then how
Speaker 2: do you balance that with some kind of oversight that
Speaker 2: really makes it safe and secure. But that's going to
Speaker 2: be something we have to hold for next time and
Speaker 2: a future conversation because we do have to run. Terrence,
Speaker 2: thanks for spending time with us. Terrence yang Maaging director
Speaker 2: a fintech law tech at Privacy over at Swan Bitcoin,
Speaker 2: as we said, a platform that allows people to buy bitcoin,
Speaker 2: including their iras, which would really open it up to
Speaker 2: a lot of people.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern on Bloomberg Radio,
Speaker 1: the Bloomberg Business app, and YouTube. You can also listen
Speaker 1: live on Amazon Alexa from our flagship New York station.
Speaker 1: Just say Alexa playing Bloomberg eleven thirty.
Speaker 2: All right, it's hard to believe that a year has
Speaker 2: passed since Elon Musk bought Twitter. It seems like three
Speaker 2: years to be honest. Anyway, since then, he has made
Speaker 2: the social media service smaller in almost every way. About
Speaker 2: thirteen percent fewer users signed on each day in September
Speaker 2: compared with the last October. That's according to some data
Speaker 2: from aptopia.
Speaker 3: Yeah, also, Carol.
Speaker 2: I don't like it anymore? Can I just put it
Speaker 2: out there?
Speaker 3: Yeah, that's fair. I think that's fair to say. The
Speaker 3: company employs about fifteen hundred people yep, down from seventy
Speaker 3: five hundred days that Musk bought it. And this is
Speaker 3: probably perhaps most relevant in my life. I was relatively
Speaker 3: early on Twitter, and it was like such a place
Speaker 3: for journalists, such a place for media professionals, news junkies.
Speaker 3: And Elon has totally deprioritized news. It's like a place
Speaker 3: for I don't know what, the hustlers and I don't know.
Speaker 2: And then there's the name.
Speaker 3: Yeah it's called X now I guess.
Speaker 2: Yeah, I'm not going there, so let's.
Speaker 3: Get to it. Yeah, I should count as a social media
Speaker 3: reporter for Bloomberg News. He writes for Business Week about it.
Speaker 3: Elon Musk's year of owning X made a mess of
Speaker 3: Twitter's business. She joins us on Zoom from San Francisco.
Speaker 3: Check out her story. It's online at Blomberg dot com,
Speaker 3: slash business Week and also on the Bloomberg terminal. Also
Speaker 3: here is the editor of Bloomberg Business Week, Joel Webber.
Speaker 3: He's in our Bloomberg Interactive Broker studio. Joel. This was
Speaker 3: the longest year.
Speaker 6: That's definitely one way to describe it. So, yeah, this week,
Speaker 6: it's been one year since it became official and Elon
Speaker 6: walked into the place with the sink memorable way to begin.
Speaker 6: I remember that, Yeah, we didn't we didn't forget, and
Speaker 6: you know, look like this has been something It's been
Speaker 6: something right and there were many things about the Twitter
Speaker 6: business that weren't successful. But what we're looking at now
Speaker 6: is kind of a shell of itself. That doesn't mean
Speaker 6: that it won't change yet and that maybe he's cut
Speaker 6: so far to bone that there's a growth opportunity that remains,
Speaker 6: but that is you know, this has been a different
Speaker 6: experience than I think most people when they look at
Speaker 6: what Elon has built. You know that he builds things,
Speaker 6: and it doesn't feel like it's necessarily off to that
Speaker 6: start here I issue right, Yeah, as.
Speaker 7: You mentioned, it's just a very different place. It's a
Speaker 7: very different feeling. I feel like the types of content
Speaker 7: that are promoted or at least that I see in
Speaker 7: my feet are different than they were, you know, a
Speaker 7: year ago. Right, Like there's more information. I feel like
Speaker 7: there's more hate, Like I get a lot more spam
Speaker 7: in my dms, and like people commenting hateful stuff on
Speaker 7: stories or posts that I put. So it's totally totally different.
Speaker 7: It's a totally different feel, which is kind of sad
Speaker 7: in a lot of ways. And then I honestly could
Speaker 7: never get used to calling it X. I feel like
Speaker 7: I still call it. I hate it.
Speaker 2: I can't or I'm like you really feel careful. It's
Speaker 2: just like because every time we do it like X,
Speaker 2: well you know we mean Twitter, Like it's just crazy.
Speaker 6: But I do you think like if you're if you're
Speaker 6: Elon and you've and you bought this thing and you
Speaker 6: want to change the conversation, not unlike you know, his
Speaker 6: cage mask match Nemesis over at that place Facebook or
Speaker 6: meta changed. Change the conversation. And one way that you
Speaker 6: can do that is to take the name. And you know,
Speaker 6: we still call Google Google, but you know, technically it's
Speaker 6: alphabet and like look again and again and again. There's
Speaker 6: a playbook for this, and you change the conversation. But
Speaker 6: you know, X is not Twitter, and you know we
Speaker 6: I think it's reflected, but I what I search for
Speaker 6: it on my phone. I can serve Twitter and it
Speaker 6: pops up.
Speaker 3: Still, right, Wow, that's maybe because I downloaded it recently. Yeah, yeah,
Speaker 3: because I try to always give it up a little bit.
Speaker 3: I'm just sorry you were you were going to jump
Speaker 3: in there, go ahead, please.
Speaker 7: I'm just going to say the same thing. Even on
Speaker 7: the web, right, you look up Twitter and it pops up,
Speaker 7: and even some of the links that they post to
Speaker 7: like their policies, it still says like Twitter dot com,
Speaker 7: slash whatever. So I feel like they're still sort of
Speaker 7: I mean that the name brand right of Twitter is
Speaker 7: just so strong and so powerful.
Speaker 6: Well, maybe there's a chance that it comes back still,
Speaker 6: so what is you look like the numbers there were
Speaker 6: staggering in terms of the number of employees. It's kind
Speaker 6: of cuts, right, yeah, and look like you remember the
Speaker 6: ones that remain, those fifteen hundred. I'm assuming they clicked
Speaker 6: that button that was like we promised to be hardcore,
Speaker 6: you know, like that whole incident. But but what do
Speaker 6: you what do we think?
Speaker 4: Are you sure?
Speaker 6: Like what does it look like when he gets on
Speaker 6: the other side of this?
Speaker 7: I mean that that is the big question, right. It
Speaker 7: could go a couple different ways. I mean, one the
Speaker 7: amount of debt right that that Twitter had when when
Speaker 7: must bought it, Like, well he actually he was a
Speaker 7: cause of a lot of that debt. He was like,
Speaker 7: Twitter's going to go into bankruptcyes, Well, yeah, you acquire
Speaker 7: the company and then put thirteen billion dollars of debt
Speaker 7: on the balance sheet. So part of that's kind of
Speaker 7: on you. So they have a big financial holding out
Speaker 7: of advertising revenue is down by sixty percent, like that
Speaker 7: was in September. A lot of big advertisers aren't back
Speaker 7: or they're spinning way less, and so they have this
Speaker 7: huge hole to climb out of. I think the chance
Speaker 7: they have now is if they can really take off
Speaker 7: with this whole everything app idea right now, some people
Speaker 7: have said, I don't know if I'm gonna trust X
Speaker 7: with my payment information, Like it's a very unstable place
Speaker 7: to maybe want to like do my banking. But there's
Speaker 7: their sort of vision is to like do banking and
Speaker 7: do audio and video calling and all these other things,
Speaker 7: and so I guess they have a chance to make
Speaker 7: money with that. It's really just people to play.
Speaker 3: I should your point. I'm getting like spam in my
Speaker 3: feed about bitcoin and buying different cryptos. Like, I don't
Speaker 3: know how someone would want to do banking on an
Speaker 3: app that doesn't have that type of control a jol you.
Speaker 6: Don't want to get into crypto. It's an amazing opportunity.
Speaker 2: So that's a documentary call me back.
Speaker 3: It's called Ruin. That's the problem. The documentary is called Ruin.
Speaker 6: But you know, look like there if you bought this
Speaker 6: thing and you've changed the name and you're changing the story,
Speaker 6: there's this other opportunity that you have to you know,
Speaker 6: the only option here for him is to try and
Speaker 6: take it to a different place. I think, right, So
Speaker 6: he's going to try and do that, and you know
Speaker 6: we will be back in a year, no doubt, probably
Speaker 6: before to talk about how it's going. But I usually
Speaker 6: when you just think about I mean even just this
Speaker 6: week some of the other things that have come out,
Speaker 6: like do you what does he have to do? You know,
Speaker 6: everything at beside? What does he have to do to
Speaker 6: make this thing work? And when we meet again, how
Speaker 6: are we going to be talking about it?
Speaker 7: I mean, he has to get people to pay for it,
Speaker 7: Like so they have the subscription service now and it's
Speaker 7: less than one percent of people that Lava on a
Speaker 7: monthly basis or using it. So somehow you have to
Speaker 7: get people to pay. And people don't like to pay
Speaker 7: for social media. I don't like to pay for social media.
Speaker 7: I don't know other people do. So that's gonna be.
Speaker 2: The biggest thing.
Speaker 7: And then you exactly, and then you have to make
Speaker 7: it work. So cool all these features are being launched,
Speaker 7: but like you think about some of his live streaming stuff,
Speaker 7: like he did this big event with Ronda Santis and
Speaker 7: it was glitchy the whole time. So you have to
Speaker 7: have things actually work otherwise people are not going to want.
Speaker 2: To know, like he's sending rockets up out of the
Speaker 2: air or anything and has figured that one out.
Speaker 3: Yeah, just saying electric cars thing, Joel, I've said it once,
Speaker 3: I'll say it again, I would pay a monthly fee
Speaker 3: to not be allowed on on X.
Speaker 6: Well, you know that would help you can you can
Speaker 6: x that at and see what he says.
Speaker 2: I kind of miss it because it was a really
Speaker 2: great thing when news was happening, like it was incredib right.
Speaker 6: That to me is a huge part of this is
Speaker 6: like a reminder of like when there was a moment
Speaker 6: that you could get news and it was easy to
Speaker 6: access and like that. This is not that moment. It's killer.
Speaker 2: It's where everybody went. It was just happening in front
Speaker 2: of you. Joe Webber, of course, the editor of Bloomberg
Speaker 2: business Week, Thank you so much. Asha co On, social
Speaker 2: media reporter for Bloomberg News. Find this at Bloomberg dot com,
Speaker 2: Slash BusinessWeek and of course always on the Bloomberg terminal.
Speaker 1: Elon um brother Marco.
Speaker 7: A journal.
Speaker 4: How about you let me drive?
Speaker 7: Oh no, no, no, no, please going to drive, honey, please,
Speaker 7: I'll do the riding gravels.
Speaker 1: Let's wait.
Speaker 2: I want to try.
Speaker 7: It's a good question.
Speaker 1: Good try. This is the drive to the clothes dot com.
Speaker 4: I think we'll buy your.
Speaker 2: Should it on Bloomberg Radio right just about seventeen and
Speaker 2: a half minutes left in today's trading session, getting ready
Speaker 2: to wrap up the day. The week, it's been a
Speaker 2: little crazy.
Speaker 1: What a week.
Speaker 3: Good that the S and P five hundred down almost
Speaker 3: three percent this week. Same at the NASDAK composite.
Speaker 2: Yeah, that's some sa right, Yeah, Yeah, it's kind of
Speaker 2: interesting in a week where we got certainly some strong economic.
Speaker 3: News, some earnings that were mixed bag.
Speaker 2: Yeah, some earnings that were mixed bag. Hot inflation, consumers
Speaker 2: still spending. Yeah, Taylor still a billionaire.
Speaker 3: She is, She's going to be fine. I'm not worried
Speaker 3: about Taylor.
Speaker 7: All right.
Speaker 2: Let's see, though, how investors can maybe be kind of
Speaker 2: fine when it comes to their investments. Let's get to
Speaker 2: Eric Clark. He's portfolio manager at Rational Dynamic Brands Fund
Speaker 2: on Zoom and San Diego. By the way, the Rational
Speaker 2: Dynamic Brands Fund is up this year by nearly sixteen percent,
Speaker 2: so out forming about ninety six percent of its peers.
Speaker 2: According to our own Bloomberg data. On a five year basis, though,
Speaker 2: it's in the twenty first percentile, with a return of
Speaker 2: about eight point four percent on average annually. Hey, Eric,
Speaker 2: nice to have you back with us this year, though,
Speaker 2: turning out to be pretty good.
Speaker 6: For you guys.
Speaker 2: You guys focus on a bunch of names. I always
Speaker 2: I think Tim and I always like to ask you, though,
Speaker 2: big macro, how is it determining those names that you
Speaker 2: want to focus on?
Speaker 1: Well?
Speaker 8: How are you guys? Nice to talk again? I mean,
Speaker 8: there's a lot of macro cross currents, isn't there. I mean,
Speaker 8: between geopolitics and interest rates and the worry about a
Speaker 8: recession and a consumer that might be tapped out, which
Speaker 8: I don't agree with. You know, there's a lot to consider,
Speaker 8: and so when there's a lot to consider, it means
Speaker 8: volatility is probably going to be higher than normal, and
Speaker 8: that gives you some opportunities to trade around your core positions.
Speaker 8: And we're being a little more concentrated in what we own.
Speaker 8: We're being very laser focused rather than being a little
Speaker 8: more broad based. And that's helped this year certainly with
Speaker 8: some good exposure to the you know, the megacap let's
Speaker 8: call them the Magnificent seven that since that I don't
Speaker 8: know who coined that phrase, but you know that's the
Speaker 8: one that we're all running with. But seventy five percent
Speaker 8: of the fund is non magnificent seven, and some of
Speaker 8: those names are having a great year too, even though
Speaker 8: the overall market has been a little sluggish in the
Speaker 8: average stock is actually flatted down on the year, So
Speaker 8: it's been a very interesting year indeed.
Speaker 3: Well, you guys, in addition to Apple and Amazon, you
Speaker 3: also have kkur Live Nation, Draft Kings, you also have Microsoft,
Speaker 3: and they're speaking to Magnificent seven. But I want to
Speaker 3: go back to something you said, Eric, that you don't
Speaker 3: agree that the consumer is tapped out. What evidence do
Speaker 3: you have to show that make the case for us,
Speaker 3: for our listeners, for of yours.
Speaker 8: Yeah, sure, I mean listen, for two years, we've all
Speaker 8: been over paying for everything, right. First we started to
Speaker 8: do it and we just did it without caring, and
Speaker 8: then we started to get mad, but we still did it,
Speaker 8: and for most cases we're still doing it. But we're
Speaker 8: finally making choices and we're doing a lot of trade downs,
Speaker 8: which is why we love Amazon and a few other
Speaker 8: en Costco and a few others. But you know, the consumer,
Speaker 8: I don't think. I think some part of the consumer
Speaker 8: retail is certainly tapped out, because if you're on a
Speaker 8: fixed budget and everything that you have to buy is
Speaker 8: going up in price, then of course your discretionary spend
Speaker 8: what's left over isn't as robust, and so you really
Speaker 8: start making choices and you and you tighten your belt.
Speaker 8: But for the most part, there's also seven trillion in
Speaker 8: money markets that nobody talks about. And our savings, yes,
Speaker 8: have been dwindling, but that that formula is just doesn't
Speaker 8: take into consideration. You know your household, Well.
Speaker 3: Aren't the people who have the seven trillion dollars in
Speaker 3: money markets? People at the highest end of the income
Speaker 3: spectrum anyway, Well, I think.
Speaker 8: Generally speaking, but that you know, I mean, I people
Speaker 8: in my own family and friends have just said, you know,
Speaker 8: I'm getting I'm getting zero or less, you know, not
Speaker 8: much in my savings account at Chase. So I'm going
Speaker 8: to move that money over to my Schwab brokerage, and
Speaker 8: I'm going to put in the money market. You know
Speaker 8: that that how long that sits is anybody's guest, But
Speaker 8: sentiment is certainly poor. I'm just saying that, you know,
Speaker 8: as long as people have jobs, then then even if
Speaker 8: we moan and groan about things, you know, listen to
Speaker 8: what we do, not as much as what we say.
Speaker 8: Because the retail sales numbers have been super strong, right,
Speaker 8: and yet the narrative is that the consumers tapped out
Speaker 8: and very and very you know, kind of dire.
Speaker 2: Eric want to ask you. It's something we just talked
Speaker 2: about with our colleagues over on the TV side on air,
Speaker 2: and we talked about a call by b of A
Speaker 2: on their way to play this market, and they say,
Speaker 2: buy boomers, sell millennials, And basically they're saying, you know,
Speaker 2: boomers are flushed with high interest rates fattening their savings accounts.
Speaker 2: Young Americans are struggling with debt, sky high rents and
Speaker 2: mortgage rates that are putting home ownership for their out
Speaker 2: of reach.
Speaker 3: So you forgot childcare?
Speaker 1: Is that too?
Speaker 2: So go look it, Tucks and then avoid those whose
Speaker 2: fortunes ride on cash strap millennials. So American Express and
Speaker 2: cruise ship lines are in out of something like Revolve Group,
Speaker 2: which is a self styled next gen fashion retailer. So
Speaker 2: any of that play into what you are owning in
Speaker 2: your fund Well.
Speaker 8: Sure, certainly demographics play a big role. I mean, you know,
Speaker 8: the goal is if you are a brand that is
Speaker 8: operating in an important spending category and you appeal to kids,
Speaker 8: all the way up to older adults, and you have
Speaker 8: global sales opportunities through with that demographic. That makes a
Speaker 8: very interesting setup. But we're certainly focused on the parts
Speaker 8: of spending where you either have to spend like going
Speaker 8: to Costco or spending using your visa card and spending
Speaker 8: on Amazon, or you really want to spend because you've
Speaker 8: made a choice that this particular product or service is
Speaker 8: really important. So concerts through Live Nation they report next week.
Speaker 8: I think the stock has come down way too far
Speaker 8: for the stable business that they have. Spotify wouldn't necessarily
Speaker 8: ring for a baby boomer, but it does. I'm a
Speaker 8: gen X millennials and gen Z are fiercely loyal to
Speaker 8: a Spotify and they just turned profitable and they said
Speaker 8: they're going to stay that way. So we're definitely focused
Speaker 8: on the demographics of what we have to spend on
Speaker 8: and what we just absolutely love to spend on. And
Speaker 8: we do have some Lily Lily's the only healthcare name
Speaker 8: that we have in there, and that's certainly is part
Speaker 8: of the obesity. The trade, which you know is kind
Speaker 8: of a democrat to they have.
Speaker 3: Their own GLP one Indiana. What about Nike down sixteen
Speaker 3: point three percent this year. Concerns over China, concerns over
Speaker 3: the consumer. Are those concerns not in the right place?
Speaker 8: Well, No, I think Shana is a concern in general.
Speaker 8: I think Nike's one of the biggest holdings now because
Speaker 8: it came down. So we like to add to great
Speaker 8: businesses when they're on sale. And their latest quarter was
Speaker 8: really strong. You saw Deckers today with Hoka. Don't bet
Speaker 8: against Hoka right now. There you go. The athleisure trade,
Speaker 8: I think is lu Lu's had a very strong number
Speaker 8: in their latest report and still has great growth in
Speaker 8: Asia coming. So I think there's a lot of places
Speaker 8: to be where the spending category and the brand love
Speaker 8: is really is really important, and we're ignoring the for now.
Speaker 2: I know we're running out of time, but from the
Speaker 2: notes that you shared with our producer Paul Brennan, you're
Speaker 2: excited to add on further. DIP's, Apple, Google, Meta, Blackstone
Speaker 2: and KKR Tencent also a favorite. So interesting. Hey, we'll
Speaker 2: have to get you back real soon. Eric Clark, have
Speaker 2: a good weekend, portfolio manager at Rational Dynamic Brands Fund
Speaker 2: on Steam in San Diego. Yeah, Little Alman.
Speaker 1: Brothers, this is the Bloomberg Business Week podcast, all available
Speaker 1: on Apple, Spotify, and anywhere else you get your podcast.
Speaker 1: Listen live weekday afternoons from three to six Eastern on
Speaker 1: Bloomberg dot Com, the iHeartRadio app, tune In, and the
Speaker 1: Bloomberg Business App. You can also watch us live every
Speaker 1: weekday on YouTube and always on the Bloomberg journyalone