Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Welcome to Marin Talks Money,
Speaker 1: the podcast in which people who know the markets explain
Speaker 1: the markets. I'm Meren sum zet Word. This week we're
Speaker 1: bringing you a panel I hosted in Dubai last week.
Speaker 1: It was at the Herriot wat University Campus, which is
Speaker 1: part of the Edinburgh Business School. With me on stage
Speaker 1: was Adam Dixon, Chair of Sustainable Capitalism at PAMA House,
Speaker 1: Ashley Hunter, founding partner of a Hunter Company, which is
Speaker 1: a global risk management, advisory and consultant firm, and Ikval Kahan,
Speaker 1: CEO of Farja Capital, which is an impact driven investment firm.
Speaker 1: We spoke for nearly an hour about what Adam Smith
Speaker 1: might make of Donald Trump's tariff policies, about tax rules,
Speaker 1: about deregulation, and about where the passion should factor into
Speaker 1: your career planning. So for this week's episode of bringing
Speaker 1: an edited version of that conversation and to keep the
Speaker 1: traditional live, we started as we do it, our friends
Speaker 1: shows and the panelist shows a favorite Adam Smith quote
Speaker 1: to kick off the conversation. Here is my panel in Dubai,
Speaker 1: starting with Adam Dixon sharing his favorite Adam Smith quote.
Speaker 2: The one problem about smith quotes is that he wrote
Speaker 2: in the eighteenth century, and I don't know. I'm a
Speaker 2: native speaker, and I even find understanding Smith's writing to
Speaker 2: be difficult, so I'll try to read slowly. And my
Speaker 2: quote comes from the Theory of Moral Sentiments, not his
Speaker 2: more famous book The Wealth of Nations. And my quote
Speaker 2: is the great body of the party are commonly intoxicated
Speaker 2: with the imaginary beauty of this ideal system of which
Speaker 2: they have no experience, but which has been represented to
Speaker 2: them in all the most dazzling colors, in which the
Speaker 2: eloquence of their leaders could paint it excellent.
Speaker 1: One of my favorite quotes. Why did you choose that quote?
Speaker 2: So I chose this quote not to pick on Donald Trump.
Speaker 2: I will be very diplomatic in what I have to say,
Speaker 2: but given that we're what two or three weeks into
Speaker 2: the Trump presidency, every day is a new executive order
Speaker 2: that dismantles some part of the US government, both domestically
Speaker 2: and internationally. There's threats of tariffs against Canada and Mexico,
Speaker 2: which you know, twenty four hours after the fact, are stopped,
Speaker 2: and everyone's thinking, what's going to happen? Next in the
Speaker 2: Trump Show. It's quite entertaining. I don't know what Ashley
Speaker 2: thinks about it, but I thought, and again, this is
Speaker 2: not to critique Trump or to give an opinion on
Speaker 2: what is transpiring.
Speaker 3: But why I chose.
Speaker 2: It is basically to set people at ease. I'm always
Speaker 2: shocked that people believe every single thing that Trump says.
Speaker 2: You know, he's been president before, he said a lot
Speaker 2: of things. Does he believe everything he says? I don't
Speaker 2: think so. But you talk to people and they think, oh,
Speaker 2: the United States is gonna invade Greenland, and you think, really,
Speaker 2: it's not gonna invade Greenland.
Speaker 4: I don't think so.
Speaker 2: The United States is gonna leave NATO, It's not gonna
Speaker 2: do that. And so I think I just wanted to
Speaker 2: because Trump is so eloquent, not He's so bombastic in
Speaker 2: his pronouncements on what he wants.
Speaker 5: To do, and people believe it.
Speaker 2: This grandeur of make America great again. Actually we should
Speaker 2: step back a bit and say, well, actually, does he
Speaker 2: believe everything he says? Maybe, but that we should also
Speaker 2: remember that. And this is what Smith was writing about
Speaker 2: was he was very much a conservative conservative in the
Speaker 2: sense of he did not like revolutions of the like
Speaker 2: that Trump is promising because he thinks there disruptive in
Speaker 2: a bad way. And so I think we all need
Speaker 2: to look at Trump as being, yes, an interesting force,
Speaker 2: and some of the things he's doing will be disruptive,
Speaker 2: but we shouldn't necessarily believe everything that we're hearing.
Speaker 1: It's also, I mean, one of the senses of this
Speaker 1: quote is that everyone believes that there is an ideal
Speaker 1: system under which one should live, but in fact, the
Speaker 1: most effective system is the muddle through a system that
Speaker 1: we all live in, the one where you do. Everyone
Speaker 1: does the best they can on any particular day, and
Speaker 1: we know from attempts to create idyllic glands, yes, that
Speaker 1: it doesn't work.
Speaker 2: Yes, absolutely, and that's that's That's exactly the point. This,
Speaker 2: this man of system, as he calls that, this who
Speaker 2: offers the people this ideal system is usually a charlatan.
Speaker 1: Yeah, there is no ideal system. But I suppose the
Speaker 1: other question is should we believe him more this time
Speaker 1: because this is his second term, he's not looking to
Speaker 1: be re elected again. We hope that this is a
Speaker 1: this is a this is a fo one and done,
Speaker 1: and that means that he might be prepared. This time around,
Speaker 1: his government is better prepared, the systems around him are better.
Speaker 1: But also he may be prepared to follow through in
Speaker 1: a much more risk friendly way to him than he
Speaker 1: might have been in his first term.
Speaker 2: So two responses that one, sometimes change is good, sometimes
Speaker 2: disruption is good. Right, So we shouldn't necessarily and this
Speaker 2: is again I don't want to make a give a
Speaker 2: position on whether I think something is good or bad,
Speaker 2: but just to say that change in any country and
Speaker 2: any government is not necessarily a bad thing. So some
Speaker 2: of the changes that he and his ministration want to
Speaker 2: make may be good. Obviously that means some may be
Speaker 2: incredibly bad. The other point to mention is, and sorry
Speaker 2: for the lesson on American politics and American government, is
Speaker 2: that there, in principles, should be three co equal branches
Speaker 2: of government, and the executive branch is not the most powerful.
Speaker 2: There's still the Congress, and there's still the judiciary. Judiciary,
Speaker 2: excuse me. And in principle too, there's fifty states with
Speaker 2: as well decentralized forms of power. And this was also
Speaker 2: something that was very much discussed in the eighteenth century
Speaker 2: among the likes of Adam Smith and just to say,
Speaker 2: then that means that, yes, his administration might be prepared,
Speaker 2: but there's still Congress and there's still the judiciary. And
Speaker 2: if Congress goes along with it, well, then that's what
Speaker 2: the people voted for.
Speaker 1: When we have the first thing that pops into my
Speaker 1: head when you say we should have these three equal
Speaker 1: parts of government. And perhaps in the US sometimes like now,
Speaker 1: maybe the executive has too much power. In the UK,
Speaker 1: we now coming to the belief that the judiciary has
Speaker 1: far too much power. And that's a different type of problem. Actually,
Speaker 1: I know you wanted to say something there. Again, I
Speaker 1: could feel it.
Speaker 6: You know what, I adam to your point. I think
Speaker 6: that some disruptive behavior is good. I think when this
Speaker 6: ruption becomes a vehicle from like turning away from what
Speaker 6: is important, I think then it becomes a problem. So
Speaker 6: I think currently what we have is an administration that
Speaker 6: is trying to create chaos so that we don't realize
Speaker 6: all the trouble that we are about to encounter.
Speaker 2: But Trump did say before he was during the campaign
Speaker 2: that he didn't want to tax Americans that are living abroad.
Speaker 1: No, No, don't we jumping any guns.
Speaker 2: Yeah, I'm not jumping a gun, just foreshadowing some discussion.
Speaker 1: But let me ask both of you. Then let me
Speaker 1: ask both of you, and if you have a thought here,
Speaker 1: you've talked about some change being good, some change being bad,
Speaker 1: some disruption being good. What are the things, because we're
Speaker 1: not a negative podcast, what are the things that are
Speaker 1: happening under this new administration that you might approve of,
Speaker 1: that you might say, well, this is good, this is good,
Speaker 1: this should happen.
Speaker 6: I think he's very business. I think he's pro business.
Speaker 6: And for someone who owns a business, who sold businesses,
Speaker 6: who likes business, I think he has created an air
Speaker 6: of we're open for business, and I think that that
Speaker 6: means that we're going to have less regulation. I think
Speaker 6: that that means that we're going to have less hoops
Speaker 6: to jump through. I think M and A will actually
Speaker 6: start to pick up again, which we did not have
Speaker 6: under the past administration. So, to be quite honest with you, yes,
Speaker 6: as far as business is concerned right now, I'm optimistic.
Speaker 1: Okay, but what about Okay, here's one another one of
Speaker 1: my favorite quotes. I'm just going to chuck right out
Speaker 1: you here. Okay, by means of glasses, hotbeds, and hot wolves.
Speaker 1: Very good grapes can be raised in Scotland. That's not
Speaker 1: actually true, by the way, I'm just passulous. And very
Speaker 1: good wine too can be made of them at about
Speaker 1: thirty times the expense for which at least equally good
Speaker 1: can be bought from foreign countries. Would it be a
Speaker 1: reasonable law to prohibit the importation of all foreign wines
Speaker 1: merely to encourage the making of Clarence and Burgundy in Scotland.
Speaker 1: So that's Adam smith view on tariffs. Very bad thing.
Speaker 6: What Okay, I am not a projectionist. I think if
Speaker 6: it makes more sense to get it somewhere else for cheaper,
Speaker 6: I mean, there are a lot of women right now
Speaker 6: who are going to be very upset that they're not
Speaker 6: getting their sheine and tamu.
Speaker 1: Ok, you'll need to explain that not everybody will understand
Speaker 1: that reference.
Speaker 6: So in America there are two very dominant low cost
Speaker 6: e commerce and women in America on TikTok, which is
Speaker 6: another thing that we love. They do their sheine hals
Speaker 6: where you can effectively buy a month's worth of clothing
Speaker 6: for about five bucks. And now the United States Postal
Speaker 6: Service has now decided that they're no longer going to
Speaker 6: accept shipments from China or Hong Kong, which basically means
Speaker 6: that all of the sheene and Tamu halls that are
Speaker 6: happening on TikTok, which my husband can attest to, takes
Speaker 6: up the majority of my evening. It is going to
Speaker 6: go considerably down now that this is no longer available.
Speaker 1: Now this is related to it. It's related to the
Speaker 1: removal of an exemption for duty paid on packages coming
Speaker 1: into the US with under eight hundred.
Speaker 6: Dollars, right and along with the fact that they're just
Speaker 6: in this tear war, I mean he left the tariffs
Speaker 6: on China that that is not going to make them happy.
Speaker 6: They're looking for all ways to like disrupt any company
Speaker 6: doing business there. At Google, Apple, They're all now being.
Speaker 1: The Chinese stock market has reacted very happily to these
Speaker 1: terrfs being lower than expected. So bad expectation management.
Speaker 6: You have to manage your expectations. But I think to
Speaker 6: some degree this is not going to end well for
Speaker 6: anybody in the US because we actually source so many
Speaker 6: of our goods from Chinese manufacturers. I mean, all of
Speaker 6: Trump's merch comes from China.
Speaker 1: True, But okay, well, let's let's look at it. Like this.
Speaker 1: Let me let me ask Adam. Then. I mean, the
Speaker 1: reason that he wants to do this is because of
Speaker 1: the hollowing out of the manufacturing base in the US,
Speaker 1: which is a very bad thing in lots of ways
Speaker 1: because it removes high quality, high income jobs from the US.
Speaker 1: And also it's a national shit security problem at a
Speaker 1: time of geopolitical difficulty. So there are strong reasons to
Speaker 1: think that one should try and encourage not necessarily the
Speaker 1: making of more burgundy in the US, but certainly the
Speaker 1: building of new manufacturing plants that could enhance incomes in
Speaker 1: the US and also provide national security over the long term.
Speaker 1: So in that sense, could you argue with a small
Speaker 1: tariff on stuff coming from China.
Speaker 2: So I mean, what you've highlighted, though, is there's a
Speaker 2: schism in the Republican Party and there's the say free trade,
Speaker 2: Wall Street journal reading crowd, and then there's the more
Speaker 2: nationalist wing of the party. And I think that schism
Speaker 2: is something to watch because this is where Trump's tariffs
Speaker 2: will be fought out. It's interesting though, that what happened
Speaker 2: with Mexico and Canada just over the last twenty four
Speaker 2: hours is that threatened tariffs and then actually we're going
Speaker 2: to pause them, right, So this is much of it
Speaker 2: as a negotiating tactic on China. Again, the tariffs aren't
Speaker 2: as high as they expected, because again, will Trump be
Speaker 2: able to rebuild the American manufacturing classes when Elon Musk
Speaker 2: is automating production and manufacture and we.
Speaker 1: Have so maybe we just don't need the manufacturing classes,
Speaker 1: but we need the manufacturing plants.
Speaker 4: I want to say that Montesquieu when he talked about
Speaker 4: separation of powers legislature, executive, judiciary as the way to
Speaker 4: run a government, we have a fourth class of power
Speaker 4: and influence, which is the multi billionaire class called Elon Musk,
Speaker 4: and he is trying to completely destroy the American civil
Speaker 4: service and he has a view on everything and this
Speaker 4: tariffs are very inflationary. We have seen this as script playout.
Speaker 4: And as far as mister Trump is concerned, second term
Speaker 4: Trump has been waiting for a long time to come
Speaker 4: up with policies and second Trump. Second term US presidents
Speaker 4: are hardly accountable. There are those who think about their
Speaker 4: legacy and there are those who think about themselves. I
Speaker 4: think mister Trump is in the later category, where he
Speaker 4: has to do everything as a Trump perspective, his perspective,
Speaker 4: his family's perspective. And I think this will be very
Speaker 4: inflationary for the world because he's singularly responsible for deglobalizing
Speaker 4: the world economy, and we will all pay the price
Speaker 4: that inflation will come roaring back. And when inflation comes,
Speaker 4: it takes long time to come, but it takes longer
Speaker 4: to subdue it.
Speaker 1: But doesn't it feel like we've already got that? And
Speaker 1: certainly in the worst we have that hangover from COVID,
Speaker 1: it hasn't quite left us. Those pulses are still coming
Speaker 1: and we can see it constantly in the wage numbers.
Speaker 1: You notice the rather high wage numbers out of Japan
Speaker 1: this week. You know, we see it pulsing again and again.
Speaker 4: Yeah, but I think, you know, putting on tariffs and
Speaker 4: creating an environment where Trump is going to do this
Speaker 4: or that. Whether he does it or not, it is
Speaker 4: destabilizing the world and the deglobalization which is happening all
Speaker 4: across the world majority minority nations, where the majority in
Speaker 4: every country feels that they are a minority. The world
Speaker 4: is being divided into them and us, which is not
Speaker 4: the outcome which we want. And I think it is
Speaker 4: leading to the world being decivilized. I mean, go to Africa.
Speaker 4: The impact of tariffs, the impact of inflation, the impact
Speaker 4: of on currencies of the emerging market is huge. And
Speaker 4: I think this will all play out in the next
Speaker 4: four years. And remember that the legacy has the control
Speaker 4: of the executive. He has the control of his cabinet,
Speaker 4: which he should as a president, but he also has
Speaker 4: control over the judiciary. So the separation of powers is
Speaker 4: kind of becoming very weak in America. In such an environment,
Speaker 4: it's easy to take wrong policies without much debate and
Speaker 4: make things worse for the world as a whole.
Speaker 1: Okay, goth challenge for you. One positive of two term Trump.
Speaker 4: I think Trump is a doer, so it's better to
Speaker 4: have take action than rather have inaction. We had four
Speaker 4: years of Biden's inaction and as a result, economic policy, political,
Speaker 4: international peace all suffered. Whether you agree with Trump or not,
Speaker 4: he is a doer and I think he will do things.
Speaker 4: If he gets majority of the things right, then he
Speaker 4: will have a positive impact.
Speaker 3: Right.
Speaker 1: I think we're going to go onto a second quote, Ashley,
Speaker 1: Can I move on to you?
Speaker 6: Sure?
Speaker 4: Okay?
Speaker 6: The subjects of every state ought to contribute towards the
Speaker 6: support of the government as nearly as possible in proportion
Speaker 6: to their respective abilities, that is, in proportion to the
Speaker 6: revenue which they respectively enjoy under the protection.
Speaker 4: Of the state.
Speaker 6: I obviously, I'm sure you can tell. I'm American, and
Speaker 6: I am a little bitter because unlike many of my
Speaker 6: friends who are expats, they enjoy the ability to not
Speaker 6: pay taxes in their respective countries. However, as an American,
Speaker 6: the IRS follows me every year they find me, and
Speaker 6: every year I send them money. And I don't live
Speaker 6: in the US. I do not enjoy the spoils of
Speaker 6: living on US soil. Yet I still pay to contribute
Speaker 6: to everyone else to enjoy the riches of my labor
Speaker 6: in the UAE.
Speaker 1: But Ashton, don't you feel that what you're paying for
Speaker 1: is the right to hold an American passport? And there
Speaker 1: are an awful lot of people who would pay an
Speaker 1: awful lot to hold the passport that you have, And
Speaker 1: so paying that tax is simply the passport premium that
Speaker 1: you owe to the country that protects you.
Speaker 6: One might say that, but there are a lot of
Speaker 6: other countries out here that offer up protections for a
Speaker 6: lot less than not pay for mine.
Speaker 1: Well, maybe they're wrong, I mean, but it is a problem,
Speaker 1: isn't it. I mean this idea that the tax you
Speaker 1: pay should be connected to the services, one way or
Speaker 1: another that you receive. And of course there is a
Speaker 1: price for being citizen. Of course, there is a price
Speaker 1: for holding a passport to a country that allows you
Speaker 1: have an American falls pretty high up when it comes
Speaker 1: to the passport index every year that tells you how
Speaker 1: many countries you can go to visa free for example.
Speaker 1: You know it's near the top, along with the UK
Speaker 1: passports and a lot of other European mines, etc. So
Speaker 1: there's something to there's some value in that. But then
Speaker 1: you get to the point where you feel, as you
Speaker 1: do a lot of countries at the moment, that you're
Speaker 1: paying an awful lot and not getting much back. I
Speaker 1: mean the statistic that is always thrown around in the
Speaker 1: UK at the moment everyone hates rich people in the UK.
Speaker 1: At the moment we hate rich people, which is why
Speaker 1: they're all coming to live here in Dubai. The top
Speaker 1: one percent of income taxpayers in the UK pay twenty
Speaker 1: eight percent of all income tax. They earn around thirteen
Speaker 1: percent of all income. So we're no longer living with
Speaker 1: a progressive system. We're living with an ultra ultra progressive system.
Speaker 1: And if you, of course you get nothing for yours
Speaker 1: zero zero, how would you change that system?
Speaker 6: I think we should have a global flat tax, a.
Speaker 1: Global flat tax at what level?
Speaker 6: I haven't gotten there yet. I'll let Adam sort those
Speaker 6: details out. But I don't have an issue with tax.
Speaker 6: I just think that it should be distributed. There just
Speaker 6: needs to be a better job because obviously America does
Speaker 6: provide some level of comfort insecurity, and I'm sure others
Speaker 6: also enjoy that security and safety. So a global flat
Speaker 6: tax to me seems like a nice, healthy like middle ground.
Speaker 1: Yeah, temp cent or so ten seven.
Speaker 7: America.
Speaker 1: But in that sense, I mean, you're coming out more
Speaker 1: and more as a Trump supporter every second, and that
Speaker 1: you know one thing, one thing that is happening in
Speaker 1: the US is that if he has his way with
Speaker 1: the American bureaucracy, and we were speaking earlier, won't we
Speaker 1: about US eight and the extraordinary things that American taxpayer
Speaker 1: money ends up being spent on. If he has his
Speaker 1: way with the bureaucracy, if he manages to reduce the
Speaker 1: cost of government very significantly, and he's talking about them
Speaker 1: being able to bring down tax raids very significantly. You mean,
Speaker 1: and will be sitting here in four years and you'll
Speaker 1: be going that that Donald Trump, what a guy.
Speaker 6: Perhaps at this juncture, I do not see it. I
Speaker 6: think trying to unravel the United States federal government with
Speaker 6: all of its problems. It is a functioning, dysfunctional organization,
Speaker 6: and there is something inherently comfortable in the disorganization because
Speaker 6: you at least know that every month Social Security checks
Speaker 6: will be sent out on a certain day. Right if
Speaker 6: you are on assistant living, you do realize that those
Speaker 6: payments will come every month. Is it functional? Absolutely not?
Speaker 6: Does the VA have holes? Are there issues?
Speaker 1: Yes?
Speaker 6: But there is something about having functional government and trying
Speaker 6: to dismantle it like it is a corporation. To me,
Speaker 6: I just I cannot see that happening, and I don't
Speaker 6: see it working. He can try now. I do stand
Speaker 6: behind his text.
Speaker 3: I see it.
Speaker 1: There is another very famous Adam Swifth quote that first
Speaker 1: to tax, that I also like the tax which each
Speaker 1: individual is bound to pay ought to be certain and arbitrary,
Speaker 1: the time of payment, the manner of payment, the quantity
Speaker 1: to be paid, ought all to be clear and planned
Speaker 1: the contributor and to every other person. And I know
Speaker 1: that the tax code in the US is out of control.
Speaker 1: The tax code in the UK is completely out of control.
Speaker 1: We normally when we talk about the tax code, we
Speaker 1: talk about it in terms of the works of Shakespeare.
Speaker 1: It is longer than the whole the entirety of his production,
Speaker 1: but is also of course significantly longer than the Wealth
Speaker 1: of Nations, which and I do believe all of you
Speaker 1: who said you read it, but it is very, very long.
Speaker 1: The UK tax code is now longer than the wealth
Speaker 1: of nations moral sentiments combined times A couple of times
Speaker 1: i'd say, so it doesn't. It no longer fits any
Speaker 1: smith rules about tax. Now you all have views on
Speaker 1: tax and how it should be charged and how it
Speaker 1: should be paid.
Speaker 4: The thing about tax is this, it only goes up,
Speaker 4: whether it is vad or personal tax sation, corporate taxation.
Speaker 4: My view on taxation I've been a resident of the
Speaker 4: United Kingdom is and I paid taxes over a long
Speaker 4: period of time, is that my money goes for good causes.
Speaker 4: It doesn't go for causes, which I don't believe in it,
Speaker 4: and I pay taxes happily because it is helping those
Speaker 4: who are in need. But I think actually you could
Speaker 4: move to France and call yourself that you are an
Speaker 4: artist and you will get taxed at zero person.
Speaker 1: Yes, or in Ireland. You can do that in Ireland
Speaker 1: as well.
Speaker 4: Taxation is also a mechanism to attract people of talent
Speaker 4: to your country, and the French government, with all their
Speaker 4: bureaucracy I have done it very well. So I suggest
Speaker 4: that Ashley considers moving to France and giving her American
Speaker 4: nationality after five years.
Speaker 6: Okay, no, I'm staying in the US. For any Americans listening.
Speaker 2: I'm just curious to ask a question about taxes here
Speaker 2: in the UAE. Europe is very high. Tax in the
Speaker 2: US spit lower than Europe and UK, but it's still high,
Speaker 2: whereas here in the UAE and around the Gulf generally
Speaker 2: taxes are low to non existent. At what point will
Speaker 2: do Bay have to start taxing?
Speaker 4: But we do have taxation, We have VAT and there
Speaker 4: are certain items which are exempted, and we AT across
Speaker 4: the GCC is increasing, and I think taxation in personal
Speaker 4: form will not happen for a very long time.
Speaker 2: So actually will be Okay.
Speaker 6: Okay, I am not being taxed in this lovely country.
Speaker 1: Okay, But here's a question for you, then, Adam, in
Speaker 1: the US, once AI has produced the most extraordinary productivity
Speaker 1: boom and changed everything, streamlined the bureaucracy of the country,
Speaker 1: and also reduced the costs of doing almost everything to nothing,
Speaker 1: we won't require to acts in the usiver or is
Speaker 1: it too much false promise in AI? Do think?
Speaker 2: I don't know what to think about AI. I think
Speaker 2: there's a lot of hype around it. I think the
Speaker 2: very specific tasks will be automated clerical work. So I
Speaker 2: think the question, though, that you're wanting to get at,
Speaker 2: is will large swaths of the public not have jobs?
Speaker 2: And therefore what we have to start thinking about things
Speaker 2: like universal basic income or some kind of support. I
Speaker 2: don't think that's going to happen. I think will be
Speaker 2: a very long time. And I think, like with other
Speaker 2: technological advances and changes, we've always found other things to do.
Speaker 2: And let's go back to what John Maynard Kines called for.
Speaker 2: I said, wouldn't be nice to have a twenty hour week?
Speaker 2: I mean, if we could work less but then be
Speaker 2: more productive. So I think, But I mean the real
Speaker 2: question is is productivity in America is very good and
Speaker 2: very high. What I'm really concerned about is productivity in
Speaker 2: old Europe and old UK, which is flat lined. This
Speaker 2: region of the world. There's lots of productivity and there's
Speaker 2: a lot of dynamism, which I think is useful to see.
Speaker 2: So I think that that's the real kind of question.
Speaker 2: Is America will be fine for the most part. Ashley
Speaker 2: might not come back, but you know, we'll see.
Speaker 1: So is there an AI bubble in the US? You
Speaker 1: said there's a lot of hype around it?
Speaker 2: Well, I mean what we saw recently with this deep
Speaker 2: seek and that kind of spooked the markets. And I
Speaker 2: still think there's probably money to be made, obviously over
Speaker 2: the long term on those companies that have the data
Speaker 2: that can feed into AI models. But it's going to
Speaker 2: be the specific uses of AI and those companies that
Speaker 2: can take not the big, large language models, but the
Speaker 2: more specific ones and use them to do things like
Speaker 2: find the cure for cancer or you solve some problem
Speaker 2: that we have. That's where I think money can be made.
Speaker 1: We often get the question about what should I study
Speaker 1: at university with AI? Or the jobs will be gone,
Speaker 1: et cetera, et cetera. And we always say the same thing,
Speaker 1: you cannot imagine the jobs of the future. We know
Speaker 1: they will come, but you cannot imagine them. And I
Speaker 1: saw that in action today on the beach here in Dubai.
Speaker 1: Twenty years ago. There is no way I would ever
Speaker 1: believe for a second that anyone could make a living
Speaker 1: as an influencer. But here on the beach endless people
Speaker 1: taking photographs of themselves, you know, setting up little tripods
Speaker 1: and posing around the place, et cetera. And I said
Speaker 1: to the kids, well, earth are they doing? And you
Speaker 1: know their influencers. This is a career we couldn't have
Speaker 1: imagined twenty years ago. How I mean, it's not what
Speaker 1: I strictly approve of, but how extraordinarily creative we are
Speaker 1: in the production of these jobs.
Speaker 4: Right.
Speaker 1: Do you go out and see influences all over the place.
Speaker 4: Not really, but they do impact our businesses. We have
Speaker 4: food businesses which we use the influencers to bring more
Speaker 4: customers in. So there are some businesses where they do
Speaker 4: work very well.
Speaker 1: Free food excellent.
Speaker 4: So the cote which I have chosen is a very
Speaker 4: personal quote for me. It is from the Theory of
Speaker 4: Moral Sense Sentiment seventeen fifty nine. For to what purpose
Speaker 4: is all the toil and bustle of this world? What
Speaker 4: is the end of avarice and ambition, of the pursuit
Speaker 4: of wealth, power and pre eminence? And I chose this
Speaker 4: courte because when I was in a school in India,
Speaker 4: studying in a Roman Catholic school as a Muslim, and
Speaker 4: I read a poem written by Thomas Gray, an elegy
Speaker 4: written in a country churchyard, and in that he says,
Speaker 4: the path of greatness and glory lead but to the grave.
Speaker 4: At the end of our lives. None of us will
Speaker 4: take anything with us. We are merely trustees and custodians.
Speaker 4: And as trustees and custodians, we have been given a
Speaker 4: very big responsibility. We are the vice regents of this world.
Speaker 4: Whether it is the environment, whether it is the climate,
Speaker 4: whether it is healthcare, we have big responsibilities. So I
Speaker 4: chose this because this is the ultimate reality of life.
Speaker 4: And the purpose of an economy is to build a fairer,
Speaker 4: just and a better world for all.
Speaker 1: And how does that affect the way you invest?
Speaker 4: Well? We are an ethical firm. We run on the
Speaker 4: Islamic principle which is called sharia, and if one sentence
Speaker 4: can describe it, we invest in that which is good
Speaker 4: for mankind. In the Quran there is a word called
Speaker 4: yenphone nas We invest in that which is good for mankind.
Speaker 1: How do you know what will be good for mankind?
Speaker 1: I mean there's a question, isn't it, And that you
Speaker 1: invest in something you can't tell the results of investing
Speaker 1: in that. And you could look at an investment that
Speaker 1: you think, well, Hanna write the look at that much
Speaker 1: and be entirely wrong, and it turned out to be
Speaker 1: absolutely fantastic for mankind. I mean, AI is a classic
Speaker 1: of that, right bit Dolgi. But it might turn out
Speaker 1: to be really good.
Speaker 4: There is a lot of consensus across the world. Fortunately,
Speaker 4: ESG investments, impact investments, whatever you want to call it,
Speaker 4: and you know what to avoid. You don't invest into
Speaker 4: the defense sector. You don't invest into environmentally destructive companies.
Speaker 4: And when you invest, you ask yourself. And we have
Speaker 4: this philosophy of better ownership. If I own anything, how
Speaker 4: will I be a better owner? And can I be
Speaker 4: a better owner? And during our investment we ask ourselves
Speaker 4: are we being a better owner? And you are tested
Speaker 4: for that. We have a business here which is food business,
Speaker 4: and anyone of you who like food zarthur Z, please
Speaker 4: go and buy double of zarthur Z today cinnabon, five
Speaker 4: guys and all those businesses. We were about to sell
Speaker 4: this business and COVID came. We had one four hundred
Speaker 4: and eighty six employees and the buyer, we told him
Speaker 4: this is what's on the card with businesses. Food business
Speaker 4: are going to suffer. He said, don't worry, I will
Speaker 4: fire half of the workforce. We didn't sell the business.
Speaker 4: We created in stayed a welfare fund, not from the
Speaker 4: company's resources, but from the employees. We put our money
Speaker 4: and we said we will not let you down. We
Speaker 4: will not abandoned you. It was a terrible time. So
Speaker 4: you invest into business in a way that you have
Speaker 4: a responsibility as us toward but.
Speaker 1: That will come as payback, right, and that those employees
Speaker 1: will now be very loyal to the business.
Speaker 4: They are indeed, and if you go to Zartha and
Speaker 4: Zeth you will get very good service.
Speaker 1: And now only I've just wanted to just ask you
Speaker 1: briefly all the businesses that you invest in a private right,
Speaker 1: you're not investing in listed businesses.
Speaker 4: Yes, we invest into private businesses. We invest into good
Speaker 4: to better businesses, in education, in health care. We've just
Speaker 4: invested a billion dollars in a healthcare company in the region.
Speaker 4: And these are big opportunities to create an impact. And
Speaker 4: when we invest into health care, we make sure that
Speaker 4: we have a proposition for the people who can only
Speaker 4: afford in the affordable segment of healthcare, but we also
Speaker 4: have mid market and the premium segment, because you need
Speaker 4: to make sure that you can use technology to have
Speaker 4: an offering of the people who cannot afford the expensive
Speaker 4: hospitals and to equalize.
Speaker 1: Yeah, okay, right, have we got questions there? One is
Speaker 1: the back here.
Speaker 7: So I have two questions. One is to Ashlyn m
Speaker 7: and the other is just for anyone who would take
Speaker 7: up the question. So my first question is about investing
Speaker 7: and what advice would you have for young people that
Speaker 7: want the young adults that want to venture into investing.
Speaker 7: What advice do you have for us? And the other
Speaker 7: one is more of a personal question. So, since I
Speaker 7: aspired to become a business small girl, what skill should
Speaker 7: I learn between negotiating or pitching? Which do you think
Speaker 7: would just shoot me out there?
Speaker 1: Thank you.
Speaker 2: Isn't a tripod on the beach with the influencer kind of, I.
Speaker 1: Just get a tripod. You're all good? Oh why didn't
Speaker 1: you take the second one? Fast?
Speaker 6: I'll take the second one. I definitely think pitching is overrated.
Speaker 6: I think no one ever people try to put their
Speaker 6: best foot forward, but if you really care about something,
Speaker 6: you become very nervous. So I think sometimes it just
Speaker 6: takes someone getting to know you. So I've always found
Speaker 6: that negotiation is always where I am strongest. It's my
Speaker 6: strong suit. It also gives me time to calm down
Speaker 6: because I get very excited about stuff and I don't
Speaker 6: like to lose, and so I always just say the
Speaker 6: negotiation is easier than the pitch.
Speaker 1: Okay, eggbo pitch on negotiation.
Speaker 4: I think I would say that you should follow your heart,
Speaker 4: follow your passion. If work for your passion, that will
Speaker 4: create your pension. You know, it's very very important to
Speaker 4: do that. Money is a problem for mediocrity in whether
Speaker 4: it's a corporate entity or a country or an individual.
Speaker 4: Money is never ever a problem for excellence, So excel
Speaker 4: in whatever you do.
Speaker 1: Okay, I need to contradict you here. I'm really sorry.
Speaker 1: Don't like to do this with a panelist, but do
Speaker 1: not follow your passions. Do not follow your passions, almost
Speaker 1: certain that you will not be good at the thing
Speaker 1: you're passionate about, or not good enough. Right, So I
Speaker 1: always say to people, don't follow your passions. Get a
Speaker 1: good job that does something useful, make some money, and
Speaker 1: play your guitar in your spare time.
Speaker 6: I'm here to tell you that's exactly what happened. I
Speaker 6: was a classical violinist. I thought I was going to
Speaker 6: be a full time violinist and played in a couple
Speaker 6: of symphonies. To Marin's point, I was not good enough
Speaker 6: and I needed to eat, so my dad told me
Speaker 6: to go into insurance.
Speaker 1: Unless your passion is accountancy, you know, well why did
Speaker 1: you do it? An investing you have for the young starting.
Speaker 4: Out, invest in what you know, and invest in where
Speaker 4: you know, and invest with whom you know. Avoid the
Speaker 4: funds or investments where there is a lot of fee
Speaker 4: built into it. So when you are young, you should
Speaker 4: build an index fund which is low fees, because feast
Speaker 4: eats up about twenty to twenty five percent of your
Speaker 4: potential profitability and you can't time the market. Just every
Speaker 4: month set aside. But the biggest investment which you can
Speaker 4: make is in yourself. Invest in yourself, believe in yourself,
Speaker 4: and excel in it. And with do apologies to the chair,
Speaker 4: follow your heart, follow your passion.
Speaker 1: All right, I'll tell you what, apart from that very
Speaker 1: last sentence, that was some of the best investing advice
Speaker 1: I've ever heard. Absolut brilliant. Thank you. Right, take another
Speaker 1: question on the corridor here, no corridor ale Hi.
Speaker 8: My question to Ashley. You mentioned deregulation, you know how
Speaker 8: it's helped economy, you know at times, and you touch
Speaker 8: based on that. My question is that the last time
Speaker 8: there was a deregulation in US, we saw a big recession,
Speaker 8: you know, financial deregulation. And I see now that you know,
Speaker 8: there's a lot of deta regulation happening in the big text,
Speaker 8: like you know, the net neutrality or I think some
Speaker 8: today just some bodice of dad. What do you what's
Speaker 8: your point on that?
Speaker 6: So, yes, okay, I can see that there could potentially
Speaker 6: be an issue depending on how far the deregulation goes, right,
Speaker 6: so you can curb inflation with how far you decide
Speaker 6: to go with deregulation. If you're just gonna let the
Speaker 6: floodgates open and let the SEC just close the blind
Speaker 6: out everything, Yes, I could see that being a problem.
Speaker 6: I think more nearly what Trump and a fool's theory
Speaker 6: is to try to guess what he's thinking, right, But
Speaker 6: what what I think he would like is to make
Speaker 6: it a little bit easier. I think our past administration
Speaker 6: had so many roadblocks and it made it so difficult
Speaker 6: to get a deal done to even I mean, private
Speaker 6: equity decided to just like stop looking at deals, to
Speaker 6: just stop thinking about M and A altogether. And I
Speaker 6: do think that that slows down an economy, right, that
Speaker 6: people lose steam, they lose hope, they get bored. I
Speaker 6: think in this instance it is picking up steam. You
Speaker 6: are seeing more private equity deals, you are seeing people
Speaker 6: talk about it. DeVos. I mean, for all of its
Speaker 6: talk about you know, DEI, it was talk about the
Speaker 6: fact that basically, yes, M and A it's looking more promising.
Speaker 6: Private equity is looking to deploy more capital, and as
Speaker 6: far as the US is concerned, that's good for us, right,
Speaker 6: I mean, we like when we're able to acquire things.
Speaker 6: I'm sure you've noticed.
Speaker 4: You know, our world has become a bottom line society.
Speaker 4: We measure every relationship about how much money can we
Speaker 4: make and and it's led by America. America has a
Speaker 4: statue of liberty, which means free markets, which is what
Speaker 4: Adam Smith wanted. But if Adam Smith had his way,
Speaker 4: he would have created a statue of responsibility in America.
Speaker 4: And I think the deregulation, unfettered control is will be
Speaker 4: disastrous for America. Quantitative easing is very inflationary. The fact
Speaker 4: that banks have control over financial interimidiation in the payment system.
Speaker 4: It is the only industry in which you can in
Speaker 4: good times privatize the profits, in bad times socialize the
Speaker 4: losses because the bank's control the payment systems. The other
Speaker 4: thing which is very important is that the difference between
Speaker 4: corporate banking, commercial banking and investment banking. Way back, we
Speaker 4: would remember in history there were two senators called Senator
Speaker 4: Glass and Senator's Teagle had a Glass Degal act to
Speaker 4: make sure America does not have any great depression. Markets
Speaker 4: go in cycles. I think we are at the high
Speaker 4: point of the cycles, and every country has a responsibility
Speaker 4: to the people who are not well off. How many
Speaker 4: people are going to be heard by this deregulation, by
Speaker 4: this bottom line society which we are creating.
Speaker 2: If I might just add on Adam Smith, the group
Speaker 2: of people he was most concerned with, if you across
Speaker 2: his texts, was the poor. Those are the people that
Speaker 2: he was most concerned with, and he wanted to unleash
Speaker 2: their creativity. And so I think we can always look
Speaker 2: back to Smith and I assume he's this rabid free
Speaker 2: market here. It was always again this idea of responsibility
Speaker 2: and allowing for everyone to flourish, which.
Speaker 1: Is why you picture your quote from moral sentiments.
Speaker 4: Right Indeed, and Adam, you know that the world, as
Speaker 4: I said earlier, we are becoming a majority minority nation.
Speaker 4: The world is decivilizing. Today. You walk in the UK,
Speaker 4: you could be stabbed with a knife for no reason.
Speaker 4: In America, a bullet can hit you. All of Africa
Speaker 4: is decivilizing. What happened to Sudan in many countries. But
Speaker 4: I think we should always remember that when we classify
Speaker 4: human beings as them in us, in the final analysis,
Speaker 4: there is no them, It's all us. We could be
Speaker 4: in that position where we could be an immigrant and
Speaker 4: we could be looking for a job So our responsibility
Speaker 4: toward those who are less fortunate is a sacred responsibility Smithian,
Speaker 4: and and those who take care of it are going
Speaker 4: to be blessed in every possible way.
Speaker 1: I want to take you back to something you said
Speaker 1: earlier about markets going in cycles and at the peak
Speaker 1: of the market cycle. Is that something that you would
Speaker 1: follow across the stock market. So we've talked about the
Speaker 1: US market briefly earlier, and we talked about how wanted
Speaker 1: invest when one's young. If you're young and you're starting investing,
Speaker 1: should you be avoiding the American stock market?
Speaker 4: No, not necessarily. There is always in the stock market
Speaker 4: companies which create value. So you must invest with your
Speaker 4: heart as well, and mind your heart is that I
Speaker 4: want to invest in a company which does good, a
Speaker 4: company which is run by good people, by honest people,
Speaker 4: a company which is fair. See, competence and excellence are interlinked,
Speaker 4: and integrity and competence are also interlinked.
Speaker 6: Okay, I just have one final thought. The equities in
Speaker 6: the US are valued pretty high right now.
Speaker 4: Right.
Speaker 6: I think any great portfolio manager or any prudent individual,
Speaker 6: especially if you are investing when you're young, it's costing
Speaker 6: too much to buy into the US stock market, you
Speaker 6: could potentially offset that cost by probably investing in the
Speaker 6: UK stock market to say, right, because the US stock market,
Speaker 6: the UK stock market, I mean, there aren't very many there,
Speaker 6: but there is something you can find something there.
Speaker 1: It's quite a lord left good lord.
Speaker 6: Yes, there's something there. So I always just think that
Speaker 6: good portfolio management is Yes, it is going to be
Speaker 6: very difficult to buy into the US stock market right now,
Speaker 6: especially if you're young, especially if funds are not just limitless,
Speaker 6: and good portfolio management would be to look at the
Speaker 6: UK stock market, to look at some of the other
Speaker 6: larger stock markets, you know, Sweden, wherever, to just kind
Speaker 6: if you want to just get your foot in the door. Obviously,
Speaker 6: I'd probably start with the UK after the US.
Speaker 1: What about the regional stock markets here?
Speaker 6: Yes, I I I like the stock market the regional
Speaker 6: stock market here, and there are obviously some very large
Speaker 6: brands that are currently on that are currently listed, and
Speaker 6: they are trading very well, and they're also getting look
Speaker 6: sie from global markets. This is also a very good
Speaker 6: place to invest obviously.
Speaker 4: In the meanwhile, do invest into gold as a head
Speaker 4: against inflation.
Speaker 1: Yes, I love gold, I love gol too Google.
Speaker 5: Yes, so we as we discussed today the inflation problems
Speaker 5: and that the lot of countries haven't recovered after the
Speaker 5: COVID and the recession makes us, like university students, all
Speaker 5: of us questions like how we should tend out? What
Speaker 5: should you do to make your feel like yourself turned out?
Speaker 5: Especially with all these projections, with the recessions and stuff.
Speaker 5: But yeah, like I would love to hear from you
Speaker 5: and like in the region and overall in the UK,
Speaker 5: and you ask, it's very important, I feel like for
Speaker 5: all of us here, So I am.
Speaker 9: So.
Speaker 6: I went to UNI in the US for a grad school,
Speaker 6: and the reason why I actually did get a job
Speaker 6: is because I left the US. So I think you
Speaker 6: all are in a very unique position and in a position,
Speaker 6: quite honestly, where you are much more marketable because you
Speaker 6: have an international background. You know, you're not sitting. I mean,
Speaker 6: I went to Texas A and m It's a fine school,
Speaker 6: created some geniuses. But after that I took a job
Speaker 6: that moved me to Manana, and because I was one
Speaker 6: of the few people that was willing to move and
Speaker 6: to go somewhere else. I think the problem is is
Speaker 6: if you benchmark your success against a US graduate. It's
Speaker 6: not It doesn't make any sense because a US graduate
Speaker 6: wants to stay in the US, that job market is small.
Speaker 6: If you are an international NBA student and you are
Speaker 6: fine with moving to Singapore, you are going to fare
Speaker 6: much better right because you are interested in moving around
Speaker 6: and quite honestly, you're doing the opposite of what the
Speaker 6: US is trying to do. Anyway, You're becoming more global.
Speaker 4: The most important attribute you can have as a young
Speaker 4: graduate is to believe in yourself emotional resilience and remember.
Speaker 1: That passion again but no, no.
Speaker 4: Not passion, emotional resilience, and you remember that you will
Speaker 4: face rejection after rejection. Every know always leads to a
Speaker 4: better yes. And you've got to believe that there is
Speaker 4: an opportunity which is tailor made for you. It is
Speaker 4: waiting for you, if only you would believe.
Speaker 2: I still don't know what I want to do when
Speaker 2: I grow up, and I think that's but it's important
Speaker 2: because I think it's it's this journey where especially as
Speaker 2: an academic, it's it's a marathon. It's not a sprint.
Speaker 2: It's it's it's how long you can persist. But it's
Speaker 2: about finding opportunities and trying new things and being willing
Speaker 2: to take risks, moving to different countries. And I think
Speaker 2: that's the more enjoyable. It's enjoy the process rather than
Speaker 2: oh how much my making, because good opportunities will come.
Speaker 10: Mike was in today's to mister Khan. So many years
Speaker 10: defunds focus on environmental factors, wherein it is very difficult
Speaker 10: to quantify the social impacts that actually has. So how
Speaker 10: could investors like you or anyone who's actually investing into
Speaker 10: mankind ensure their money is truly driving a positive social
Speaker 10: change in this world?
Speaker 1: Okay? What are the parameters for certainty?
Speaker 4: So the one line answer, as directed by the chairperson,
Speaker 4: we don't have a democracy here is that look at
Speaker 4: the rankings of the ESG fund. It is published, it
Speaker 4: is rated, and go for the top upper courtile and
Speaker 4: you will be well served.
Speaker 1: I have used here, but I'm going to leave us
Speaker 1: to one side. Now other questions. We have another one
Speaker 1: on the ile here, thank you.
Speaker 9: So we are in the UAE where the epicenter. We
Speaker 9: can see that our brewer and our baker are fighting
Speaker 9: out they what are the opportunity is that the UAE
Speaker 9: has today in the next four or five years of
Speaker 9: this whole geopolitical landscape in terms of growing this economy.
Speaker 1: Okay, good question. I'll tell you what we're gonna. We're
Speaker 1: gonna We're gonna make that a shorter question and say,
Speaker 1: I'm a graduate today, which sector am I gonna look
Speaker 1: for work in if I'm staying in the UA?
Speaker 4: Insurance, finance, Tourism in Dubai. If you are working and
Speaker 4: you get into tourism objective, but that's growing very fast,
Speaker 4: but the government depends on your specialization as well.
Speaker 1: So that's my answer to tourism, insurance.
Speaker 11: Last question, My question is about real estate investment. And
Speaker 11: as you could see, I mean the regionally, there is
Speaker 11: a real estate bomb, especially in Dubai. And what is
Speaker 11: your take on the real estate investment locally and globally
Speaker 11: looking at the historical cycles of ups and down.
Speaker 4: So real estate is at the moment in the real
Speaker 4: and in the world, but especially in the region, very high.
Speaker 4: So it's closer to the highs and closer to a
Speaker 4: correction than at the bottom. But you know, both bottom
Speaker 4: picking or the calling the top is a very risky business.
Speaker 4: Maybe it'll grow up by another fifteen twenty thirty percent,
Speaker 4: but it has already grown up so much that you
Speaker 4: have to be careful. And in the real estate, it's
Speaker 4: about location, which everybody used to call it's about a
Speaker 4: specification and how you structure your investments. That become very weird.
Speaker 1: I was hoping you were going to say that if
Speaker 1: you were going to buy a house of some kind
Speaker 1: in a topy market like this, you should buy one
Speaker 1: you have a passion for.
Speaker 4: You don't like the word passion to you.
Speaker 1: You have a problem.
Speaker 3: I just worry that we give people with that.
Speaker 1: People expect to be able to follow their passion and
Speaker 1: make a career out of it, and so often that
Speaker 1: such a ali I want people to try and be practical,
Speaker 1: That's all I love to agree.
Speaker 4: If you're a married man, let your wife choose the house.
Speaker 1: All right, we're gonna We're gonna have to end it there.
Speaker 1: Thank you, ri Well, thank you Asley, thank you Adam,
Speaker 1: thank you so much for going today. Thanks, thank you,
Speaker 1: thank you so much to Harriet what for hosting us today.
Speaker 1: Has been absolutely wonderful, and Heather, thank you so much
Speaker 1: to you for facilitating all of this. Now we can clap.
Speaker 1: Thank you.
Speaker 3: Thanks for listening to this.
Speaker 1: Week's Marrying Talks Money. If you like our show, rate review,
Speaker 1: and subscribe wherever you listen to podcasts, and keep sending
Speaker 1: questions or comments to Merroring Money at Bloomberg dot net.
Speaker 1: You can also follow me and John on Twitter or
Speaker 1: x I'm at Marinus w and John is John Underscore Epic.
Speaker 1: This is a It was hosted by Me Maren Zamsette Web.
Speaker 1: The show was produced by Someasadi and Moses and sound
Speaker 1: designed by Blake Maples. Special thanks to the team with
Speaker 1: Harriet What and of course to all our guests Adam Dixon,
Speaker 1: Ashley Hunter and Ikpal Khan.