Speaker 1: This is Bloomberg Business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business finance and tech news. As it happened. Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes. Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi everyone, Happy weekend. It is
Speaker 1: week fifty. Still though this past week, working Tim from
Speaker 1: home stood a lot of people. Yeah, and and Carol, um,
Speaker 1: I was, I gotta tell you, I was thinking about
Speaker 1: how long it's been since we've been in this lockdown environment.
Speaker 1: A long time it has. It's been almost a year
Speaker 1: since I was inside a restaurant. We're going to talk
Speaker 1: about that a little bit later on in our broadcast
Speaker 1: about what's next for the restaurant industry. But Tim, listen,
Speaker 1: it was a week where so much was going on.
Speaker 1: We saw a lot of volatility and pullbacks in tech stocks,
Speaker 1: in particular on those valuation concerns. A lot of talk
Speaker 1: of the reflation trade and market rotation to value sectors.
Speaker 1: But countered with FED Chairman Jerome Powell, you affirming his
Speaker 1: view that the U S economy needs support. Yeah, So
Speaker 1: what did it end up with? It mant the push
Speaker 1: and pull of the equity market throughout the week. So
Speaker 1: coming up, we have several voices weighing in on the markets,
Speaker 1: including one closely watched E t F investor whose comments
Speaker 1: to us seemed to move both bitcoin and Tesla this week.
Speaker 1: I'm just gonna go ahead and say it's Cathy Wood.
Speaker 1: It is Kathy Wood, also invest go home to the
Speaker 1: giant q q Q E t F. We caught up
Speaker 1: with CEO Martin Flanagan for another edition of Business Week
Speaker 1: Talks and our recent chat with Nobel Laurie Paul Krugman.
Speaker 1: We caught up with him. We talked about the economy, spacks,
Speaker 1: game stop and more. We'll have a little highlight of that.
Speaker 1: All that to come, but we do begin with that
Speaker 1: investor who everyone wanted to hear from this week, and
Speaker 1: we had her live on air and Tim you mentioned
Speaker 1: our investment founder CEO and c I O, Kathy Wood.
Speaker 1: What I've been surprised by over the last really four
Speaker 1: or five months is cyclicals and value stocks have started
Speaker 1: to outperform the broad based market indusease uh And the
Speaker 1: surprise to us is that we and our innovation strategies
Speaker 1: that are outperformed as well. That's very unusual. So the
Speaker 1: way I have interpreted that is that the market is
Speaker 1: broadening out. The bowl market is broadening out, which is
Speaker 1: a very healthy development. I think what we've seen in
Speaker 1: the last few days the correction in technology is UH,
Speaker 1: perhaps you know rotational again value there, given how many
Speaker 1: years value has underperformed, Uh, there could be a bit
Speaker 1: of rotation back into value. UH. If if you understand
Speaker 1: our portfolios, UH, you'll be very careful where you go
Speaker 1: in terms of the value space, because disruptive innovation, the
Speaker 1: likes of which we have not seen in more than
Speaker 1: a hundred years, is probably going to hurt a lot
Speaker 1: of value sectors more than growth sectors. Are you buying
Speaker 1: I mean the NASDAC was down almost four percent to
Speaker 1: Tesla was down significantly. Did you buy? Oh yes, oh yes,
Speaker 1: And we've uh we published our trades at the end
Speaker 1: of every day, so you will see them the markets closed.
Speaker 1: We bought a lot of Tesla today across any strategy
Speaker 1: that holds Tesla, and we will be publishing in a
Speaker 1: few weeks UH a report updating our thoughts about Tesla,
Speaker 1: our excitement about the potential of a ride hailing service
Speaker 1: as a bridge to an autonomous service and are higher
Speaker 1: and the higher odds that autonomous is going to happen
Speaker 1: for Tesla. Uh. And part of the reason for the
Speaker 1: higher odds is now that weymo is on the road autonomously,
Speaker 1: we know it can be done. Uh. Tesla has so
Speaker 1: much more data than Google or anyone else or everyone
Speaker 1: else combined that we think it's in the pole position. Well,
Speaker 1: it's interesting to you know, it's funny Kathy people you know,
Speaker 1: expecting you to be on and they were sending us
Speaker 1: tons of questions. You know, this whole idea of the
Speaker 1: treasure trove of data that Tesla has. Specifically, you talk
Speaker 1: about it a lot, you know, do other people believe it?
Speaker 1: Do you? Are you seeing other you know people kind
Speaker 1: of uh put that out as kind of one of
Speaker 1: the fundamental reasons that you want to own Tesla. It's
Speaker 1: not just a car company, right, It's a technology company.
Speaker 1: It's a battery company. Is that thesis of it being
Speaker 1: a data company getting a lot more recognition. We do
Speaker 1: not think many analysts or investors are giving Tesla credit
Speaker 1: for autonomous. UH. If they were, the stock would be
Speaker 1: a lot higher. What we do think they're giving Tesla
Speaker 1: credit for increasingly is you know, it's an electric vehicle franchise,
Speaker 1: and how far ahead of the competition Tesla is when
Speaker 1: it comes to battery technology, to artificial intelligence, both in
Speaker 1: the form of a chip through the data collection. We
Speaker 1: think thirty billion plus miles compared to Google's thirty million
Speaker 1: ish miles. Uh and still over the air software updates
Speaker 1: to uh to change performance. It's it's remarkable that more
Speaker 1: are not on board, even the last one yet. Uh.
Speaker 1: So I think it's franchise has legs here. So so
Speaker 1: how does that translate into market value for Tesla? How
Speaker 1: much more opportunity is there? How much how much more
Speaker 1: opportunity is is left for this run up to continue? Well,
Speaker 1: I'll give you a sense of uh and this is
Speaker 1: from our big ideas one. You can get that on
Speaker 1: our site our dash invest dot com. Uh. We we
Speaker 1: believe that the autonomous market, so the ride hailing market,
Speaker 1: but autonomous, will be a seven trillion dollar revenue opportunity.
Speaker 1: That was our investment founder, CEO and ce IO Cathy
Speaker 1: Wood talking with us on Tuesday. That was a day
Speaker 1: of tech stock volatility. It was I mean the timing
Speaker 1: of that inteview, Carol, I want to say, we're brilliant
Speaker 1: enough to actually have scheduled her. Okay, yeah we are.
Speaker 1: We'll just keep it. But no, the interview is scheduled
Speaker 1: for a long time, and there was no better day
Speaker 1: to have her on than this past Tuesday. No, it
Speaker 1: was the perfect guest to talk about what was going
Speaker 1: on in the tech trade, specifically names like Tesla Bitcoin.
Speaker 1: We all wanted to know from her because she has
Speaker 1: been one of the top performers, consistent performers on these
Speaker 1: trades and when she talks, investors listen. Yeah. Absolutely, so
Speaker 1: that interview, I've got to say her comments, they got
Speaker 1: reed spikes throughout the week. They were among the most read,
Speaker 1: most watch, most listened to across Bloomberg platforms throughout the week.
Speaker 1: And coming up, we've got more of that interview with
Speaker 1: Kathy Wood. Were you kind of secretly rooting for a
Speaker 1: little bit of a of a pullback um to kind
Speaker 1: of get some of the performance chasing money out of
Speaker 1: the market. The answer to that question and her views
Speaker 1: on bitcoin and more. You're listening to Bloomberg Business Week.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick Takes. Tim Spinovik from Bloomberg Radio.
Speaker 1: It was just one week ago that Bloomberg reported on
Speaker 1: our Investments Kathy would reaching sixty billion dollars in assets. Tim,
Speaker 1: you reminded me on air that that was up from
Speaker 1: just three point six billion dollars one year before. What
Speaker 1: a difference A year makes a remarkable run, and despite
Speaker 1: some pullbacks and fund outflows this week, she's sticking to
Speaker 1: her fundamentals when it comes to her investments. Yeah, our
Speaker 1: deep dive conversation with Kathy Man it was so popular
Speaker 1: on the Bloomberg this week, so we thought we would
Speaker 1: bring you a little bit more of it, including her
Speaker 1: thoughts on how long the reflation trade might last and
Speaker 1: if it is impacting how she is investing. I don't
Speaker 1: know how long this rotation will continue. All I do
Speaker 1: know is that we have a five year time horizon
Speaker 1: and our all of our price targets are five years out.
Speaker 1: A few days ago, I would have told you that
Speaker 1: the returns that we're expecting now we could be wrong.
Speaker 1: These are our estimates, so consider the source. But uh,
Speaker 1: the compound annual rate of return that we were expecting
Speaker 1: for our portfolios during the next five years was fifteen percent,
Speaker 1: which is our minimum hurdle rate of return. Just given
Speaker 1: the last few days of correction, that is closer. Now,
Speaker 1: compound annual rate of return over five years is a
Speaker 1: doubling over five years. Right, that's a healthy return. What
Speaker 1: happens very short term, I can't tell you. All I
Speaker 1: know is we are keeping our eyes on the prize,
Speaker 1: and the prize just got a little bit more interesting.
Speaker 1: But I have to ask you, were you kind of
Speaker 1: secretly rooting for a little bit of a of a
Speaker 1: pullback um to kind of get some of the performance
Speaker 1: chasing money out of the market. Well, I do believe
Speaker 1: we we love a wall of worry, and we were
Speaker 1: seeing the wall of worry starts all. I saw it
Speaker 1: on social media, a lot of chatter, Uh, some just
Speaker 1: waiting for our funds in particular, uh to take a tumble. Uh.
Speaker 1: Some maybe to buy, and some happy to sell and
Speaker 1: short and all of that. We love the liquidity that
Speaker 1: this provides us. We think it's very healthy and very
Speaker 1: healthy shake out. But I'll give you a sense of
Speaker 1: what where I in history. I felt this way before.
Speaker 1: In nineties six, we were in a very interesting market.
Speaker 1: Alan Greenspan was the FED chairman, and he was at
Speaker 1: the time UH warned all of us against irrational exuberant UH.
Speaker 1: And many investors were just beginning to understand how how
Speaker 1: the internet was working, and uh, you know what the
Speaker 1: interesting applications were going to be. Uh. We had another
Speaker 1: four years of move, which when you think about that time,
Speaker 1: that move was too much capital chasing, too few stocks, uh,
Speaker 1: too quickly. The technologies weren't ready, the costs were way
Speaker 1: too high. But all the seeds for what we're investing
Speaker 1: in we're planted back then. So we've had fifteen to
Speaker 1: twenty to twenty five years of gest station of these
Speaker 1: seeds and now they're starting to flourish, and we are ready.
Speaker 1: From a technology point of view and from a cost
Speaker 1: point of view, that's so important to see that electric
Speaker 1: vehicle costs come down. UH so that by this time,
Speaker 1: maybe in a year or two, uh, the sticker price
Speaker 1: of the average electric vehicle will below be below that
Speaker 1: of the average UH gas powered vehicle. Yeah. And and
Speaker 1: by the average electric vehicle price will be eighteen thousand,
Speaker 1: and the Toyota camera will still be a dollars no brainers. Yeah, Hey, Hey, Kathy,
Speaker 1: I gotta ask, UM, so much money is pouring into
Speaker 1: your funds? Uh? South Korean retail investors literally give you
Speaker 1: a nickname, money tree. UM, in terms of money, does
Speaker 1: it ever become too much that's pouring into your funds? Well,
Speaker 1: what I've always said when we've been asked the capacity
Speaker 1: question is that if we are right and the five
Speaker 1: platforms that involve fourteen different technologies are are ready for
Speaker 1: prime time, if not already in the sweet spot of
Speaker 1: their s curve, then our capacity should grow exponentially with
Speaker 1: those platforms. Now, what happened to us in the last
Speaker 1: year was not exponential, but parabolic growth in terms of
Speaker 1: the flows, and it's been very gratifying, and we're so
Speaker 1: happy that more and more investors are diversifying into innovation.
Speaker 1: They need to to hedge against all of the value
Speaker 1: traps that innovation is going to UH is going to create. UH.
Speaker 1: But we do believe that given the swish we had
Speaker 1: this year, UM, we will need a little time to
Speaker 1: have the capacity come our way. How is it coming
Speaker 1: our way? Well, you see, because of the performance of
Speaker 1: stocks like those in our portfolios, we're seeing a significant
Speaker 1: number of I P O s UH secondaries, there's the
Speaker 1: stack revolution, there's a stack revolutionist. And if you think
Speaker 1: about what happened even last year, so our flagship fund
Speaker 1: was up around a hundred and fifty percent, that meant
Speaker 1: that our capacity went up a hundred and fifty If
Speaker 1: you look at our performance since since UH for the
Speaker 1: past five years, our performance of the Flagship fund is
Speaker 1: up a thousand percent. So that means our capacity is
Speaker 1: up a thousand percent. And if we're right and we're
Speaker 1: still on these exponential growth trajectories, we should continue to
Speaker 1: find good capacity going forward. So I'm also curious about,
Speaker 1: you know, some of the positions you have. And I'm
Speaker 1: sure you've been asked about this for for Cathy, but
Speaker 1: you know, I'm just looking at some of our research
Speaker 1: that you guys are already a ten percent holder and
Speaker 1: I think more than twenty companies and a holder in
Speaker 1: three And forgive me my my mouth's a little bit off,
Speaker 1: But I mean, is that do you get nervous about
Speaker 1: that level of concentration? I mean, some investment managers would say, so,
Speaker 1: how do you feel about that? Yes, what we've put
Speaker 1: in risk controls to prevent UH again, some of that
Speaker 1: happened because of the swish right fairness. We put in
Speaker 1: risk Yes, we put in risk control so that you know,
Speaker 1: we do so that we will not be considered quote
Speaker 1: unquote an affiliate of of any of these companies. That's
Speaker 1: why I think what we want to be on the
Speaker 1: right side of regulation. Uh, And so you will see
Speaker 1: fewer and fewer names over let's say, going forward, especially
Speaker 1: as many of our companies are issuing are are are
Speaker 1: doing secondaries importantly, and the reason they need to do
Speaker 1: them is often in the world of disruptive innovation and
Speaker 1: particularly because of artificial intelligence, the companies that invest the
Speaker 1: most aggressively today are going to have a higher probability
Speaker 1: of winning winner take most markets, like I just described
Speaker 1: autonomous taxi network. Look Tesla as a company, as Kathy mentioned,
Speaker 1: that has a lot of cash. We've talked about this before, Carol,
Speaker 1: one point five billion dollars look to a lot of people,
Speaker 1: has a lot of money. But for Tesla, it's not
Speaker 1: that much of an investment in bitcoin, at least not
Speaker 1: right now. Yeah, she doesn't seem worried in terms of
Speaker 1: their cash position. All right, still ahead, I think we
Speaker 1: still have another six months of rough Times about Laurie.
Speaker 1: Paul Krugman. He is back. He's talking zombies and getting
Speaker 1: the vaccine his second shot that's coming up next. This
Speaker 1: is Boober broadcasting from the financial capital of the World, Bloomberg.
Speaker 1: He Love in Frio in New York to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one oh six one, to San Francisco,
Speaker 1: Bloomberg nine sixty to the country Sirius XM Chado one
Speaker 1: nineteen and around the globe the Bloomberg Business app and
Speaker 1: Bloomberg Radio dot Com. This is Bloomberg Business Week, so too.
Speaker 1: I recently caught up with Paul Krugman. Nobel Laureate Economists,
Speaker 1: New York Times Columnists, City University of New York, Distinguished
Speaker 1: Professor of Economics. The titles go on and on. He's
Speaker 1: also editor of a lot of books. Yeah, you know,
Speaker 1: more than two dozen, so we can't list them all here.
Speaker 1: But his latest book, now out in paperback, is arguing
Speaker 1: with Zombies, economics, politics, and the fight for a better future.
Speaker 1: And on the day we talked with him, he actually
Speaker 1: had tweeted out that he had gotten his second coronavirus vaccine,
Speaker 1: so we had to start there. I'm a little wearie.
Speaker 1: I think there's a little bit of the second day
Speaker 1: effect of the of the vaccine. But I'm fine. Okay,
Speaker 1: So you are feeling a little bit. We've heard that
Speaker 1: from a fair amount of people, So you do feel
Speaker 1: a little something. Yeah, it's it's it's fine, it's the
Speaker 1: water is fine. Jumped in and we're ready. We're ready
Speaker 1: and eager. So let's talk about kind of this world
Speaker 1: where we are. But I do want to ask you
Speaker 1: when you look at the US economy the impact of COVID.
Speaker 1: There are some economic reports that do feel like things
Speaker 1: are certainly getting better, Labor markets still tough. How do
Speaker 1: you see the US economy? I think we still have
Speaker 1: another six months of rough times because it is very
Speaker 1: hard to do normal business when people are rightfully still
Speaker 1: afraid of of of COVID, and so we're going to
Speaker 1: be a pandemic depressed economy for well passed in the
Speaker 1: middle of this year. But I'm actually I'm quite optimistic
Speaker 1: about after that. I think we are we don't have
Speaker 1: the same kind of overhanging of excessive debts and so
Speaker 1: on that we had after the last crisis. We are
Speaker 1: are apparently on the verge of getting an adequate economic
Speaker 1: relief package. So I think we're going to have a
Speaker 1: probably gonna be feeling pretty optimistic by this time next year.
Speaker 1: Well that's that's some that's some good news. Um, what
Speaker 1: about when it comes to the labor market specifically, how
Speaker 1: do we get millions of Americans who lost their job
Speaker 1: during this pandemic back to work. I think that's going
Speaker 1: to be a lot easier than people imagine. Uh, the
Speaker 1: job losses are concentrated. Uh, there are a lot of
Speaker 1: it's not all there, but a lot of the job
Speaker 1: losses are concentrated in sectors that are basically shut down
Speaker 1: because of pandemic risks. And once we have widespread vaccination.
Speaker 1: You know, this is all assuming that the variants don't
Speaker 1: get ahead of us and we lose control of the
Speaker 1: pandemic again. But once we have widespread vaccination effective herd immunity,
Speaker 1: people will start eating in restaurants again, people will start
Speaker 1: to travel again. There'll be some dislocations because we won't
Speaker 1: go back to exactly the same economy we had before.
Speaker 1: But you know, after the after the last crisis, there
Speaker 1: were many people were saying, oh, just those jobs are
Speaker 1: not coming back. Workers don't have the right skills. They
Speaker 1: were totally wrong. Turned out that we were quite capable
Speaker 1: of getting back to full employment, and there's no ways
Speaker 1: to think that is true. Again, do you think that
Speaker 1: when we get on the other side of this that
Speaker 1: we do you you're optimistic obviously, as you said that
Speaker 1: we do have potentially a run in the economy, a
Speaker 1: run perhaps in the financial markets, just like we had
Speaker 1: after the financial crisis, which was kind of low and
Speaker 1: slow but kept on going for a long time. Well,
Speaker 1: this one looks to me like a lot faster. And
Speaker 1: there were reasons that there was a combination of reasons
Speaker 1: why it was so slow last time. One of it
Speaker 1: was that this there was this legacy of excess household debt,
Speaker 1: which is not the situation now. Another wise, that we
Speaker 1: had a lot of destructive disclosterity that was holding back
Speaker 1: the recovery. And uh, you know, those by elections in
Speaker 1: Georgia made all the difference. It means that the time
Speaker 1: and Democrats have learned a lesson. So now that they have,
Speaker 1: even if it's a razor for the majority, they're they're
Speaker 1: not going to make that mistake again. They're gonna go
Speaker 1: for a big package. And so I actually think this
Speaker 1: is gonna be a very different story if you believe
Speaker 1: some of the projections out there about growth. Uh, it's
Speaker 1: gonna be. It really is Morning in America style growth
Speaker 1: that we may be looking at. We may be looking
Speaker 1: at something like you know, over a fourth quarter on
Speaker 1: fourth quarter six seven percent. This is this is looking
Speaker 1: at very very different, not at all the story. You know,
Speaker 1: don't don't fight the last war on this one. Well,
Speaker 1: you know it's interesting. So with that optimism, do you
Speaker 1: think we still need a stimulus package? And I think
Speaker 1: I know the answer to it because I know you've
Speaker 1: been supportive of it. Do you still think we need
Speaker 1: more help? Yeah, So it's not a stimulus package. It's
Speaker 1: mostly just not what it's about. It's a it's an
Speaker 1: economic rescue package. It is we have a miserable time.
Speaker 1: We won't be back to anything like full employment even
Speaker 1: with all of this stuff, until early next year. And
Speaker 1: in the meantime, mass unemployment, Uh, lots of disruption, many
Speaker 1: businesses and great and under terrible stress. The state, local governments,
Speaker 1: it's very uneven, but many of them are still in
Speaker 1: deep trouble. It's almost certainly it's funny thing, the simitly
Speaker 1: I hate calling it the stimulus package, the relief package.
Speaker 1: It's enormously popular, has gigantic public approval, relatively little disapproval.
Speaker 1: Even Republicans approve of it, and it will probably not
Speaker 1: get a single Republican vote in Congress. All right, Tim,
Speaker 1: So it sounds like politics as usual. That was Nobel Laureate,
Speaker 1: an author of Arguing with Zombies, Economics, Politics, and the
Speaker 1: Fight for a Better Future. Of course, that was Paul Krugman.
Speaker 1: Check out his book. It's now out in paperback, and
Speaker 1: also check out that full conversation. It's on our podcast
Speaker 1: feed at Bloomberg dot com. Because Tim, he talked game Stop,
Speaker 1: he talked Bitcoin, he talked about a lot of things.
Speaker 1: You got him talk Robin Hood a little bit as well.
Speaker 1: We did. You're listening to Bloomberg Business Week. Up next,
Speaker 1: our exclusive Business Week Talks interview with Investco CEO Marty
Speaker 1: Flannagan on whether SPACs are in bubble Territory. This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes. Tim Stinovich from Bloomberg Radio. All right,
Speaker 1: so Investco, you know who they are. They are the
Speaker 1: independent investment management firm running more than one point three
Speaker 1: trillion dollars and tim that includes the giant q q
Speaker 1: q E t F tracking the nastack one d It's massive,
Speaker 1: it is and CEO Marty Flanagan has run the Atlanta
Speaker 1: based fund company since two thousand five and during his
Speaker 1: tenure has acquired the power shares in Guggenheim et F businesses,
Speaker 1: as well as Oppenheimer funds and Van Kampen fund families.
Speaker 1: And we caught up with him at the end of
Speaker 1: January for another edition of Bloomberg Business Week Talks. We
Speaker 1: gave your teaser that conversation you might recall just a
Speaker 1: few weeks ago. So here's the complete conversation that began
Speaker 1: by talking about the year like no other that we've
Speaker 1: all had, something that none of us have ever imagined living.
Speaker 1: And uh, I will say a lot of the work
Speaker 1: that was done in sets up a very interesting environment
Speaker 1: going in one. I think everybody's looking for strong economic
Speaker 1: growth in the United States in particular and those countries
Speaker 1: around the world, driven by the optimism and the ability
Speaker 1: to start to get back to work with the vaccine
Speaker 1: coming and all us frankly learning how to work in
Speaker 1: different ways. Yeah. Absolutely. Well, what's interesting is our Peter Koy,
Speaker 1: Bloomberg Economics editor, uh, Bloomberg Business Week Economics editor. He's
Speaker 1: got a story out there about whether or not we're
Speaker 1: setting up to be like the roaring nineteen twenties, the
Speaker 1: what we saw after another time period in our history
Speaker 1: where we had a pandemic, we had a tough economy. Um,
Speaker 1: and whether or not we see we you know, we
Speaker 1: come roaring back. How do you see it? Do you
Speaker 1: think that we might be creating bubbles right now and
Speaker 1: that we're going to pay the piper at some point,
Speaker 1: or do you see us setting up for maybe a
Speaker 1: really positive type of market environment, some economic momentum that
Speaker 1: feels much more normal and maybe even up beat. Yeah, so, uh,
Speaker 1: lots of good thoughts there. Let's go to the more
Speaker 1: immediate outlook, and I think you could really have, as
Speaker 1: your connects are saying, a really strong economy right with
Speaker 1: all the fiscal stimulus has been put in there, with
Speaker 1: all the monetary policy of changes that have been put
Speaker 1: in monetary support. But frankly, all businesses really put the
Speaker 1: head down and did everything they can to be operating
Speaker 1: more efficiently, you know, really is a protection last year.
Speaker 1: When you look into this year, you can see some
Speaker 1: real urgent surprises. We're going to need that because of
Speaker 1: some of the valuations. But you know, the momentum that
Speaker 1: we're seeing in our business is as strong as it's
Speaker 1: been in two and a half years. So I do
Speaker 1: think that as part of the optimism that's coming out
Speaker 1: of it, and really people seeking greater returns as think,
Speaker 1: you know, with heels being so low and you know
Speaker 1: so much of the markets. So Marty, what will the pandemic?
Speaker 1: What's been the impact on your business and running uh
Speaker 1: a money management business in what has been kind of
Speaker 1: the lasting impact here? Yeah, so I would, uh, you
Speaker 1: have to put in perspective. Yeah, I would say it
Speaker 1: was harder for money managers. I'd say us, I will
Speaker 1: say specifically than the finacial crisis, just because the steepness
Speaker 1: of that and so quickly the market pullback. And whoever
Speaker 1: would imagine having of your global workforce working from home.
Speaker 1: We didn't. Everybody else did. But how we're interacting the
Speaker 1: clients around the world is forever changed. Um. Yeah, every
Speaker 1: you know that we can bring uh, you know, the
Speaker 1: whole organization to our clients in a moment's notice. Now,
Speaker 1: we could have done it before, just wasn't the cultural
Speaker 1: thing to do. H We will end up seeing clients
Speaker 1: in person going forward. But these digital engagements have just
Speaker 1: really changed the game. I think that's a really positive thing. Um.
Speaker 1: And I will say the other thing. Our industry has been,
Speaker 1: as you know, you know, going under tremendous change. And
Speaker 1: that was happened before the crisis. But the bigger gonna
Speaker 1: be bigger and their only stronger. It's gonna happen faster
Speaker 1: posts this pandemic. Well, and it's interesting. We've seen a
Speaker 1: fair amount of consolidation too in your industry. What's your expectation.
Speaker 1: Do you think that there'll be further consolidation within the
Speaker 1: asset money management and money management industry this year? I do?
Speaker 1: You know, Look, I've been saying that for a period
Speaker 1: of time, but I will say, uh, yes, ever since
Speaker 1: I've gotten the industry, there's calls for consolidation. Very little happened.
Speaker 1: It's very different though. Now clients are working fewer money
Speaker 1: managers and that's happening around the world. Uh, there's a
Speaker 1: greater expectation what clients want from money managers. That's told
Speaker 1: me a very good thing for clients and consumers, but
Speaker 1: it is putting a lot of pressure on money managers,
Speaker 1: and that is really where you absolutely need scale within
Speaker 1: your business at multiple levels, UM, and that's how you're
Speaker 1: going to serve your clients. They want depth and breadth
Speaker 1: and capabilities beyond just managing money. So I think you're
Speaker 1: going to continue to see combinations. But the other thing, YEA,
Speaker 1: the growth, it's not all going to be through M
Speaker 1: and A. I mean there will be just firms that
Speaker 1: are disadvantaged to leave no good of the stronger firms.
Speaker 1: Nelson Pelts is on your board, who's try On fund
Speaker 1: Management has a nearly ten percent holding in the company,
Speaker 1: I think the third largest in invest go. What's the
Speaker 1: end game? I mean we're just talking about consolidation. UM.
Speaker 1: What are you hearing from him or what do you
Speaker 1: expect in terms of how this relationship might impact the company? Yes, so,
Speaker 1: uh Nelson joined the board as it ed Garden his
Speaker 1: partner and Tom Fink, who was the CEO of Bearings
Speaker 1: at the end of last year. As you know, both
Speaker 1: all three really talented people that they know that's center
Speaker 1: extremely well. UM and uh, Nelson and Ed and UM
Speaker 1: consists of our board view the industry in a very
Speaker 1: same way, UM that it can just be a large,
Speaker 1: growing industry, but it's going through dramatic change and that UM.
Speaker 1: You know, this this sort of movement to stronger and stronger,
Speaker 1: larger and more capable firms is really you know, top
Speaker 1: of mind with them, and UM, you know, it's just
Speaker 1: very helpful to have you know, people have been through
Speaker 1: uh all sorts of change in development and other industries
Speaker 1: to and bring in that perspective. So it's been uh
Speaker 1: early days for all three of them, but it's been
Speaker 1: great additions to what is already a very strong board.
Speaker 1: Is it's I have to say, you have to you
Speaker 1: have to be bigger to go after the likes of
Speaker 1: black Rock and Vanguard. Uh yeah, So I look at
Speaker 1: a different way. Really, it's really to serve our clients, right,
Speaker 1: and you know what we're seeing from our clients all
Speaker 1: around the world is they want everything for passive portfolios
Speaker 1: to factor portfolios, to high conviction active alternatives, and they want,
Speaker 1: you know, a bunch of analytical tools and support to
Speaker 1: help them do their job. And you really have to
Speaker 1: have skill to do that. And so not just you know,
Speaker 1: investment uh skills, but also the operational skills and the
Speaker 1: ability to invest in things like technology as their clients.
Speaker 1: And if you do that very well, UM, you know
Speaker 1: you're going to continue to grow. Hey listen, you know
Speaker 1: you just said you know, yeah, no, you talk about
Speaker 1: all the options that your clients want. That that's really
Speaker 1: what you know what you guys stay focused on what
Speaker 1: your clients want, what investors want. But I do wonder
Speaker 1: to UM, We've had so many conversations here at Bloomberg
Speaker 1: about you know, actively managed e t f s. You know,
Speaker 1: what do you think is the future of that? So
Speaker 1: we just lunched uh for nonparents parent ETFs in December. UM,
Speaker 1: it's actually very interesting. So obviously the growth has been
Speaker 1: you know, just spectacular. It's largely been in capulating INDEXUS
Speaker 1: as you know, but where we have been very successful
Speaker 1: is in the factor area. So it creates another alternative
Speaker 1: where you can have no transparent ets for active management
Speaker 1: within a different vehicle. There is a preference towards that vehicle. UM.
Speaker 1: That said, we're really excited with the launches, but I
Speaker 1: suspect this kind of take some time before you're going
Speaker 1: to see a lot of momentum in the area. But again,
Speaker 1: very few money managers have that capability. Were one of them,
Speaker 1: and we're happy to have it. Hey, listen, one place
Speaker 1: that you guys are seeing a lot of momentum in
Speaker 1: and you continue to focus on it, Marty, is obviously
Speaker 1: what you're doing in China. And I know you guys
Speaker 1: are looking for growth. I think you put this out
Speaker 1: last year of more than your China assets in three years. Um,
Speaker 1: how is that going? And I know you've been looking
Speaker 1: to boost your ownership to I think in the joint
Speaker 1: venture that you have there. How is it going? And
Speaker 1: are you at all a little nervous about a new
Speaker 1: administration and what the relationship will be between the US
Speaker 1: and China. So, um, you know, right now we manage
Speaker 1: seventy six billion dollars of assets in China for Chinese,
Speaker 1: whether it be through our joint venture you're referring to
Speaker 1: directly with institutions. The growth has been unbelievable. It was
Speaker 1: a record year again for UM our China business. In
Speaker 1: the last half of the year they had something like
Speaker 1: seventeen billion dollars in net inflows. So it is uh,
Speaker 1: you know, an overnight success after twenty plus years in
Speaker 1: the marketplace. Um, I think frankly, uh uh, the relations
Speaker 1: between US and China is important. Uh. It was definitely
Speaker 1: creating complications for all of us that were operating there. Um,
Speaker 1: you know, not in the material way, but I'd say
Speaker 1: it was uneasy as you were looking into the future.
Speaker 1: And I think it's really important for two world powers
Speaker 1: to um, you know, be on the same page, and
Speaker 1: it's good for each country, is good for the world.
Speaker 1: So I'm hopeful that that's what's going happen. Uh. So
Speaker 1: we look forward here. Okay, it does feel like a
Speaker 1: little bit of a new day, safe to say early days,
Speaker 1: but it sure does. Yes. Well, let me also ask you, um,
Speaker 1: just some of the things you just have about a
Speaker 1: minute or so, a minute and a half left here,
Speaker 1: some of the things that we are talking about increasingly,
Speaker 1: whether it's bitcoin, whether it's Robin Hood, what have kind
Speaker 1: of some of the newer trends that are out there
Speaker 1: that you find interesting that you think investors overall, folks
Speaker 1: in the financial community, in the investment management world need
Speaker 1: to pay attention to right now. Yeah, So it's it's
Speaker 1: a good question. It all depends on who you are, right,
Speaker 1: But I think you have the reality still gets back
Speaker 1: to basics. Truly understand what you're trying to accomplish, what
Speaker 1: returns you're trying to get, what risk really to take in,
Speaker 1: you know, the basic of time horizons. Uh, developments such
Speaker 1: as bitcoin in the like, I think it's still early days.
Speaker 1: It's obviously very very topical. You're seeing a lot of
Speaker 1: energy behind it right now. Uh, I'd say it's not
Speaker 1: not for everybody. And my basic view is that very interesting.
Speaker 1: But you know you're going to see central branks in
Speaker 1: the game, you know, at some point too, and I
Speaker 1: think that puts the value of it at risk. Quite frankly,
Speaker 1: is that two years after? So I don't know. Yeah, Hey,
Speaker 1: let's one last thing. Um, spocks is another thing that
Speaker 1: they're just kind of exploding. Um. Does it make you
Speaker 1: at least a little bit nervous in terms of what
Speaker 1: that might mean for the investment world? Does that look
Speaker 1: like a bubble to you? And just got about thirty
Speaker 1: seconds here, Yeah, So anytime something grows that fast and
Speaker 1: it's so wonderful, it's probably a good to question how
Speaker 1: long it's gonna last. So I would warn the bubble
Speaker 1: camp quite frankly all right. If you want to hear
Speaker 1: that again, check out the full conversation online at Bloomberg
Speaker 1: dot com, on our podcast feed. Highlights too in Bloomberg
Speaker 1: Business Week Magazine, now on newsstands, online and on the
Speaker 1: Bloomberg That of course, was Marty Flanagan, the CEO of Investco.
Speaker 1: And that wraps up the first hour of the weekend
Speaker 1: edition of Bloomberg Business Week from Bloomberg Radio. I'm Carol
Speaker 1: Masser and I'm Tim Stanaback. More ahead in our next hour,
Speaker 1: including Sneakers anew They're a new asset class. That's our
Speaker 1: cover story, plus the new CEO of Marriott International on
Speaker 1: leading during uncertain times, and we talk crypto regulation with
Speaker 1: the CEO of Oasis Pro Markets. And a shocker in
Speaker 1: a really tough story this week, Tiger We' talking of
Speaker 1: course about Tiger Woods, the car crash right heard around
Speaker 1: the world. And we check in with the editor of
Speaker 1: bon Apetide on the state of the restaurant industry. This
Speaker 1: is Bloomberg. This is Bloomberg Business Week inside from the
Speaker 1: reporters and editors who bring you America's most trusted business magazine.
Speaker 1: Plus global business Finance and tech news as it happened,
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes.
Speaker 1: Tim Stinovic on Bloomberg Radio, Hi on Carol Masser, and
Speaker 1: I'm Tim Stanovick. Plenty in our second hour of the
Speaker 1: weekend edition of Bloomberg Business Week, including Maryott's got a
Speaker 1: new CEO, no doubt he is having to lead during
Speaker 1: a very difficult time. Yeah, that's right. Plus we've got
Speaker 1: the c YEO of Oasis pro Markets on crypto regulation
Speaker 1: and recent surges in bitcoin so much volatility. Also Tiger
Speaker 1: Woods in the news a lot this week. I gotta say,
Speaker 1: when the headlines crossed, we all just had to like
Speaker 1: kind of stop and take a breath. We're going to
Speaker 1: talk about though, how broadcasters and fans are facing life
Speaker 1: without their biggest star sooner than they expected. And we're
Speaker 1: talking the restaurant industry. Bonappetite It's new editor on taking
Speaker 1: over following a tough time at the magazine and getting
Speaker 1: back to restaurants first. Though. This week's cover story in
Speaker 1: the magazine, it's a fun one shoes teenage resellers. Man,
Speaker 1: they are ringing profits out of everything. Tim from the
Speaker 1: Latest yeasies to outlets store leftovers, and they're turning sneakers
Speaker 1: into bona fide acid classes. Yep, you heard that one right.
Speaker 1: Writing for Bloomberg business Week, Joshua Hunt joining us along
Speaker 1: with Bloomberg Business Week editor Joel Weber with more. I
Speaker 1: thought it was such a perfect time to do this
Speaker 1: one is you know, in this age of bitcoin and
Speaker 1: memestocks and all these things that feel indangible, it's like, oh,
Speaker 1: by the way, there's a hard good that's actually an
Speaker 1: incredible market. It's become amazingly uh, lucrative for for a
Speaker 1: certain um uh, you know, web savvy, entrepreneurial, spirited kind
Speaker 1: of person. Uh. And what we've really seen just in
Speaker 1: the you know, there's it's not like sneaker reselling is new.
Speaker 1: This has been happening for years. But what we've seen
Speaker 1: just in the past couple of years and then I
Speaker 1: think it's really come too into its own during the pandemic,
Speaker 1: is how online everything really has become. In stock x
Speaker 1: a couple of years ago, really created a new e
Speaker 1: commerce platform. Um. It also helped create an even like
Speaker 1: an index that could track some of the most lucrative
Speaker 1: shoes and the ultra rare ones. Um. The performance of
Speaker 1: that is something to behold. But I think what what
Speaker 1: Josh really found was even you know, post stock X,
Speaker 1: things have changed and the pandemic has really brought out,
Speaker 1: you know, like a supply and demand element that's feeding
Speaker 1: the market. So so, Josh, why don't you tell us
Speaker 1: about how you found a character who who's you know,
Speaker 1: became basically the narrative for the story. Yeah, I mean
Speaker 1: speaking of turning to the young, in this case, finding
Speaker 1: the right character for the story was all about Instagram
Speaker 1: and social media, which is kind of where these you know,
Speaker 1: teenage resellers live and die. I mean they's it's like
Speaker 1: they're they're branding and there how they how they sort
Speaker 1: of show their clouds and show their success and and
Speaker 1: communicate with um, you know, the people that are going
Speaker 1: to be not just their customers, but there their their colleagues,
Speaker 1: you know, their allies and arbitrage. As I say in
Speaker 1: the article, um, you know a lot of those initial
Speaker 1: meetings are happening through Instagram. So you know, I spent
Speaker 1: the first half of in in Tokyo, Japan, and the
Speaker 1: pandemic in a little different way than a lot of
Speaker 1: America was and you know, once stores started opening back
Speaker 1: up there in the spring, I spent a lot of
Speaker 1: time walking through this neighborhood. This neighborhood hard Juku, which
Speaker 1: has UH for a long time, had all these stores
Speaker 1: that specialized in selling rare sneakers, which is what sort
Speaker 1: of got me um thinking about this in the first place.
Speaker 1: And inspired by that by seeing this sort of real
Speaker 1: life version of one of these online markets in Tokyo
Speaker 1: where they've had them for you know, more than a
Speaker 1: decade and a half. I dove in Instagram and I
Speaker 1: pretty you know, sometimes you just have a feeling about
Speaker 1: a subject, and right away I knew, based on this
Speaker 1: kid's Instagram activity that I had something special in this kid, Joe,
Speaker 1: And you're talking about so many West Coast streetwearers and
Speaker 1: in the company he's got um in his Instagram presence,
Speaker 1: and you know what you're saying, their judges like, it's
Speaker 1: it makes so much sense because you've got everyone, you
Speaker 1: can understand that there could be like a really ultra
Speaker 1: rare sneaker that you know is a grail is the lingo, right,
Speaker 1: And you can get five figure prices on those kind
Speaker 1: of things. But what what's so interesting about Joe's story
Speaker 1: and West Coast streetwear in the pandemic is basically he
Speaker 1: realized that the other end of the spectrum, what the bricks,
Speaker 1: which are basically just inventory sneakers, could also become incredibly
Speaker 1: lucrative online. So so how did that part of the
Speaker 1: story unfold? Once? You know, time and time again, the
Speaker 1: answer to my questions was just way different than what
Speaker 1: I thought it was going to be. I mean, stores
Speaker 1: and brands operate discount codes that might be tied to
Speaker 1: a customer's birthday or something like that, and you know,
Speaker 1: these could be up to fifty percent off codes. And
Speaker 1: guys like just who are smart, they buy these things
Speaker 1: up and they apply them instead of you know, three
Speaker 1: or five purchase like an ordinary consumer might, they apply
Speaker 1: them to like the maximum level purchase that they hire
Speaker 1: them to, which is sometimes ends of dollars or even
Speaker 1: you know, some of these orders run into the hundreds
Speaker 1: of thousands of dollars. And there are all these interesting
Speaker 1: ways that these kids like Joe make these bricks, these
Speaker 1: less loved shoes, these kind of everyday you know Nike
Speaker 1: and Adida sneakers and New Balance sneakers, and you know
Speaker 1: they make those very profitable. Look, we we talk a
Speaker 1: lot about meme stocks, we talk about crypto being an
Speaker 1: asset class, the booming SPACs um. Look, who would have
Speaker 1: thought that that sneakers would create this new generation asset
Speaker 1: class speculator. I gotta tell you teenagers would have thought
Speaker 1: it's brilliant. Really, And if you think about there's a
Speaker 1: lot of websites and areas like devoted to this now
Speaker 1: where you can be buying and trading sneakers. You're listening
Speaker 1: to Bloomberg Business Week coming up. No doubt hotels have
Speaker 1: been hit hard by the pandemic. A lot of the
Speaker 1: weight of that impact has fallen on the olders of
Speaker 1: our owners and franchise. We've got the new CEO of
Speaker 1: Marriott International on leading during an undoubtedly difficult time. This
Speaker 1: is Bloomberg. This is Bloomberg Business Week with Carol Messer
Speaker 1: and Bloomberg Quick Takes Tim Stinovik from Bloomberg Radio. A
Speaker 1: big business story this week, Tim, and it was about
Speaker 1: Married International naming Tony Capuano as chief executive officer, tapping
Speaker 1: the veteran development executive to lead the hotel giants recovery
Speaker 1: from the COVID nineteen pandemic. But it's a tough time
Speaker 1: for the company. Oh, it's a tough time for the company.
Speaker 1: And look, cap you wanna He's fifty five years old.
Speaker 1: He's replacing Arnie Sorenson, who died at sixty two after
Speaker 1: a battle with pancreatic cancer, becoming just the fourth leader
Speaker 1: in the company's history. He also faces the daunting task
Speaker 1: of navigating a global crisis that has sap to travel
Speaker 1: demand and raised doubts about the long term prospects of
Speaker 1: traveling for business. Are we going to still do this
Speaker 1: post pandemic? Exactly? Exactly. It's a really important question. And
Speaker 1: we began with how the Marriott team is doing though
Speaker 1: after the loss of sorts and someone who has always
Speaker 1: been generous with his time when it came to Bloomberg.
Speaker 1: I talked to our team around the world over the
Speaker 1: last few days, and the two words that I really
Speaker 1: thought about were reflection and resolve. All of us are
Speaker 1: reflecting on the this, this terrible loss, the loss for
Speaker 1: Arnie's family, the loss for the extended Marriott family, and
Speaker 1: the loss for the business community more broadly, as as
Speaker 1: you suggested, but I think there is a real resolve here. Um,
Speaker 1: this is a company that is approaching its anniversary, and
Speaker 1: we've been through recessions and nine eleven and the Great
Speaker 1: Financial Crisis and the pandemic, and it's a company that
Speaker 1: has the resolve to continue to build and grow and
Speaker 1: create opportunities for our folks and really help them. And
Speaker 1: he realized it's promise. But it's been a difficult week, No,
Speaker 1: And you've really all been on our minds, UM. And
Speaker 1: you talk about family, and you think about the Marriott family,
Speaker 1: your franchise owners. You treat them like they are family members.
Speaker 1: Tell me how they are doing in this environment and
Speaker 1: what it looks like, uh, going forward this year and
Speaker 1: then beyond. Well, the pandemic is obviously a historic and
Speaker 1: terrible crisis from a whole host of perspectives. The travel
Speaker 1: industry has been hit particularly hard, and a lot of
Speaker 1: the weight of that that impact has fallen on the
Speaker 1: shoulders of our owners and franchises. UM. They are under
Speaker 1: tremendous financial pressure. UH. Some of the hotels at the
Speaker 1: outset of the pandemic, we had hundreds of hotels clothes
Speaker 1: on a global basis, we were running twelve percent occupancy,
Speaker 1: and that created great distress for our owner community. As
Speaker 1: we've seen through the last number of months, we are
Speaker 1: seeing slow and steady recovery, particularly domestically in drive to destinations,
Speaker 1: interestingly China, which seems to have its arms relatively around
Speaker 1: the virus. We're seeing occupancy levels approaching pre pandemic, which
Speaker 1: is quite encouraging and maybe represents a bit of a
Speaker 1: roadmap for the rest of the world. But at the
Speaker 1: same time, we continue to see instances where there's a
Speaker 1: spike in infection rates in a given market, and it
Speaker 1: has a pretty stark chilling impact on the pace of
Speaker 1: demand growth. Tony, you ran the hotel, the you ran
Speaker 1: the company's hygiene initiative. What should customers expect if they
Speaker 1: haven't traveled to a Marriott property in a few years
Speaker 1: or since the pandemic started. How will that experience be
Speaker 1: different post pandemic? I think in a few ways. I
Speaker 1: think really starting during the booking process when they go
Speaker 1: to Marriott dot com to to make their reservations. There
Speaker 1: are pretty thorough and transparent disclosures about any modifications we've
Speaker 1: made to the operations of a given hotel, whether there
Speaker 1: are outlets that are closed, that have limitations on capacity
Speaker 1: or modified hours. When they arrive, they will see every
Speaker 1: one of their fellow guests and every Merritt associate in masks.
Speaker 1: They will see electrostatic cleaners UH disinfecting the public areas.
Speaker 1: They will have optionality around whether they want daily housekeeping,
Speaker 1: but they know that when they arrive in their room
Speaker 1: for the first time that there is a hospital grade
Speaker 1: level of cleaning that's been done to that room before
Speaker 1: their arrival, and they will experience a lot of advances
Speaker 1: that we've made from a technology perspective to make it
Speaker 1: as touchless an environment as possible. We've made some pretty
Speaker 1: significant upgrades to the Bonvoy app and the ability to
Speaker 1: check in remotely, to order room service remotely. UH, there's
Speaker 1: a chat function to talk to the hotel staff if
Speaker 1: there are service requests, and so I think those are
Speaker 1: the most significant changes. How much of it stays with us? Tony, Listen,
Speaker 1: you're someone who I know used to travel. I'm assuming
Speaker 1: a lot, and we can talk about how much traveling
Speaker 1: you've been doing. I used to travel a lot, haven't
Speaker 1: done much in twelve months. How much of what changes
Speaker 1: in the hotel industry, the hospitality industry really stays with
Speaker 1: us longer term? Like it sounds like some of the
Speaker 1: digitization in the apps like that to me sounds like
Speaker 1: a great thing. Um, I'm hoping there's a day when
Speaker 1: I can walk into a hotel lobby and I don't
Speaker 1: have a mask on, and I don't have to be
Speaker 1: so worried, and I like housekeeping. I'm just gonna say so,
Speaker 1: I'm just curious how much stays with us? Do you
Speaker 1: think loco term? Yeah, you know, all of these decisions
Speaker 1: are often informed by what we hear from our guests.
Speaker 1: But I think your intuition is right. When I look
Speaker 1: across all the changes we've had to make in response
Speaker 1: to the pandemic, I think the technological advance says the
Speaker 1: optionality of touchless experiences. I think those will continue post pandemic. Uh.
Speaker 1: The nice thing will be to your point, we all
Speaker 1: aspire to get to a place where no one has
Speaker 1: a mask, there are no plexiglass barriers, and then it
Speaker 1: will really be based upon guest preference. There are some
Speaker 1: guests that love to go to the front desk, engage
Speaker 1: with our associates, get local restaurant recommendations, and there are
Speaker 1: others that want to check in, get a mobile key,
Speaker 1: and go straight to their room, and I think we
Speaker 1: all look forward to the day where we can offer
Speaker 1: both of those options to our guests. Hey, Tony, we
Speaker 1: saw something really interesting happen at the beginning of the pandemic.
Speaker 1: When lockdown started back in March, Airbnb really struggled, and
Speaker 1: they struggled very quickly and laid off employees, and then
Speaker 1: a few months later the company really started to recover
Speaker 1: as as people wanted to spend a long time in
Speaker 1: homes away from their primary residences. I'm wondering how you
Speaker 1: think about Airbnb and how you're thinking about competition from
Speaker 1: Airbnb over the next few years. Well, Tim, we um,
Speaker 1: as you know, in two thousand nineteen, we launched Marryott
Speaker 1: Homes and Villas, uh not with an eye towards going
Speaker 1: head to head with Airbnb. I don't think we'll find
Speaker 1: ourselves in the business of traditional home sharing or couch
Speaker 1: surfing or any of those areas, um, but we've really
Speaker 1: focused on the upper end of the market and whole
Speaker 1: home rentals, and we think the value proposition that that
Speaker 1: we offer is really predicated on consumer confidence around safety,
Speaker 1: a service level that our customers expect, and a linkage
Speaker 1: to the Bonvoy loyalty program in the ecosphere, as we
Speaker 1: know is is made up of many brands and strategies.
Speaker 1: As we heard from the new Marriott International CEO. Yet
Speaker 1: yet someone who has been at the company for years,
Speaker 1: Tony Capuano. Yeah, he's someone who really knows the brand.
Speaker 1: Still to come on Bloomberg Business Week. What the SEC
Speaker 1: is thinking about when it comes to regulation of crypto
Speaker 1: that's next with the CEO of Oasis Pro Markets. This
Speaker 1: is Bloomberg broadcasting from the financial capital of the world,
Speaker 1: Bloomberg Eleve in Frio in New York, to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one oh six one, to San Francisco,
Speaker 1: Bloomberg nine sixty to the country Sirius XM Chado one
Speaker 1: nine ten, and around the globe the Bloomberg Business app
Speaker 1: and Bloomberg Radio dot Com. This is Bloomberg Business Week.
Speaker 1: Nearly three weeks ago, Pat laveki I spoke to the
Speaker 1: Board of the SEC about developing a regulation battle plan
Speaker 1: for cryptocurrencies. Regulators are looking at this tim Yeah, and
Speaker 1: they don't necessarily know what to do. Pat keeps in
Speaker 1: touch with the SEC and regulators. As CEO at Oasis
Speaker 1: Pro markets. It's a finn run se See approved digital
Speaker 1: asset broker dealer. He's also managing partner of Lavekia Group.
Speaker 1: It's a privately held merchant bank and he spent some
Speaker 1: thirty years on Wall Street working in investment banking and
Speaker 1: capital markets. He knows a thing or two about the industry,
Speaker 1: he really does. We're in discussions with our regulators all
Speaker 1: the time. Um but this is really you know, we've
Speaker 1: been spending time over the last several weeks with um uh,
Speaker 1: the innovation groups at the regulators and coming up with ideas,
Speaker 1: sharing ideas, getting their feedback, etcetera. This whole blockchain area
Speaker 1: and what we focus on the digital securities and you
Speaker 1: can talk a bit about that later, is completely new.
Speaker 1: I'd like to say that, um well, actually I don't
Speaker 1: like it, but it's reality. We're a bicycle with training
Speaker 1: whales with Ferrari brakes, which are the regulators. You know,
Speaker 1: it's a great way of explaining it. Actually that's where
Speaker 1: we are today. Eventually, the Ferrari, the bicycle will become
Speaker 1: a Ferrari, but you know that's that's several years away.
Speaker 1: And um so we have a lot of ideas and
Speaker 1: the regulators know this tsunami is coming. Um. You know,
Speaker 1: they're very focused on cryptos right now and defy or
Speaker 1: decentralized finance. We're taking a step further and focused on
Speaker 1: digital securities, and we view ourselves as the bridge between
Speaker 1: traditional finance and defy. That's that's the direction, that's our
Speaker 1: mission statement, that's where we're heading. But they know this
Speaker 1: is coming. You know. We call it a tsunami of
Speaker 1: of opportunities and it's a tidal wave regarding what's happening
Speaker 1: in the crypto space, and they're trying to stay ahead
Speaker 1: of it. A lot of smart people there trying their best.
Speaker 1: You know, they're the guardians of our financial system at
Speaker 1: the finer and they want to make sure that they
Speaker 1: get it right. So talked a little bit more about
Speaker 1: digital security is exactly what they are, what it what
Speaker 1: it presents, uh, in terms of opportunities for investors. Unpack
Speaker 1: a little bit more for me, if you would pack. Sure,
Speaker 1: digital securities are very similar to traditional securities. So what
Speaker 1: we were a proof for we're equity broadly defined and
Speaker 1: fixed income for corporates, both public non national market securities
Speaker 1: as well as privates and by privates. I mean all
Speaker 1: exempt securities so reg D, reggas one, etcetera. And they
Speaker 1: represent a proof of ownership of some type on the
Speaker 1: balance sheet and are an underlying asset of a company.
Speaker 1: But unlike traditional securities, they can be programmed through smart
Speaker 1: contracts to comply with regulatory requirements and standards as well,
Speaker 1: and they can be purchased and traded just like any
Speaker 1: other security. But it involves the blockchains, so it's very bespoke.
Speaker 1: It can be very tailored, um, but all the back
Speaker 1: office um So I'll give you an example with Game
Speaker 1: Stop in the halting of trading a couple of weeks.
Speaker 1: So one of the issues that have come up is
Speaker 1: it's trade plus two days, right, and it you know,
Speaker 1: in the nineteen sixties it was you know, it's transaction
Speaker 1: day plus five days. Uh. And then in ninety three
Speaker 1: and then let's jump all the way became trade plus
Speaker 1: three days. They took another twenty four years for it
Speaker 1: to get the trade plus two days. And while the
Speaker 1: UI has has improved, like on any trading app you
Speaker 1: might have the trade Charles Schwab Robin Hood, the back
Speaker 1: end is has been improved over the years, but it's
Speaker 1: still based on the infrastructure from the nineteen seventies. Now
Speaker 1: what blockchain does with digital securities, it really it's not
Speaker 1: a revolution, but an evolution of the trading system. So
Speaker 1: it's just taking it. It's just taking it to the
Speaker 1: technology level. So I feel like pat and are talking
Speaker 1: to you. And also just some of the research I
Speaker 1: did coming into this, I know enough. I know enough
Speaker 1: to be dangerous. So in terms of digital securities, I
Speaker 1: mean you you basically you know you own an underlying asset, right,
Speaker 1: what are the advantages? Is it the liquidity aspects? Is
Speaker 1: it the security aspects? Is it that you can have
Speaker 1: fractional ownership of something that you might not have been
Speaker 1: able to own otherwise. Yeah, absolutely all the above. Um,
Speaker 1: there's also uh the advantages we were approved for digital
Speaker 1: cash payments for digital securities, you own uh stable coins
Speaker 1: for instance, or um you know eventually C B, D
Speaker 1: C S And I heard the comment you had mentioned
Speaker 1: about yelling he actually, while she is not a fan
Speaker 1: of bitcoin, she actually came out and also said that
Speaker 1: the Central Bank should be looking at sovereign debt currencies
Speaker 1: issued on the blockchain. So, um, she's not a big
Speaker 1: fan of bitcoin, but she in a sense was endorsing
Speaker 1: c CBDCs to a certain extent, and that was a
Speaker 1: Rasis pro market CEO of Patlovecia. You're listening to Bloomberg
Speaker 1: Business Week. One of the big story is of the
Speaker 1: week that's coming up next, we're going to talk about
Speaker 1: Tiger Woods that crash. We're certainly wishing for his quick recovery,
Speaker 1: but I gotta say the incident also echoing across the
Speaker 1: golf industry. That's next. This is Bloomberg. You're listening to
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes.
Speaker 1: Tim Stinovik from Bloomberg Radio. A big story this week,
Speaker 1: the car crash that severely injured Tiger Wood, shocking the
Speaker 1: sports world and Tim really the world at large. Yeah,
Speaker 1: we're all wishing him the best. The accident, though, is
Speaker 1: also forcing golf broadcasters and brands to face life without
Speaker 1: the biggest star sooner than they expected, and that was
Speaker 1: addressed by Bloomberg News media reporter Jerry Smith. He is
Speaker 1: someone who loves golf and Avid Watcher and he reports
Speaker 1: on it and he wrote about how the industry may
Speaker 1: have to move on without him. Obviously, everyone's hoping that
Speaker 1: he is able to you know, recover from the injurvies,
Speaker 1: um from this this what looks like a really devastating
Speaker 1: car crash. Yeah, and and you know, I do wonder though,
Speaker 1: from someone who grew up watching golf, my dad played
Speaker 1: at my brother's play it. I mean, Jack Nicholas Annie Parmer,
Speaker 1: like all these people like the Tiger Wood, is somebody
Speaker 1: who really kind of reinvigorated the game, that's right. I mean,
Speaker 1: if you think back, he turned pro in n and um,
Speaker 1: you know, he won the Master's UM and winning that tournament,
Speaker 1: I mean didn't really changed the game. That brought so many,
Speaker 1: so many people into the game who had never um,
Speaker 1: you know, really followed the sport. And over the next
Speaker 1: decade or so, I mean, he really dominated. Um. You know,
Speaker 1: he was by far the best player. Um. There really
Speaker 1: wasn't anyone who was close to competing with him. And
Speaker 1: you know, there was a lot of talk, at least
Speaker 1: in the early days of his career where you know,
Speaker 1: his his personal story and his father, uh was African American,
Speaker 1: his mother was of Asian descent. I mean it was
Speaker 1: you know a lot of people would hoped that it
Speaker 1: would bring people up different races into the game. UM,
Speaker 1: and that has not really proven to be true. But
Speaker 1: he is still you know, he was such a bit
Speaker 1: draw and he and he really still was a big
Speaker 1: draw of the game. UM. But he just really dealt
Speaker 1: with a lot over the last decade, a lot of
Speaker 1: injuries with his back and a lot of surgeries, um.
Speaker 1: Obviously as well publicized, um, you know, marital infidelities. And
Speaker 1: he really wasn't the player in the last couple of
Speaker 1: years that he uh that he had been. But I
Speaker 1: think there was a lot of people who were hoping
Speaker 1: he could still find his game, and certainly his sponsors
Speaker 1: and the TV networks were hoping for that as well. Right,
Speaker 1: And there's a lot of them, and I want to
Speaker 1: get into it. I have to say that my co
Speaker 1: host Tim Sanovic, who has worked with you before, reminded
Speaker 1: me how much you love golf and have closely followed it.
Speaker 1: I think he said, um that even mentioned that I
Speaker 1: guess when you guys worked together before that you kind
Speaker 1: of would watch golf at work. So I hope, I hope.
Speaker 1: I'm not like calling you out on anything, um, but
Speaker 1: now you you love the game, you know it. You
Speaker 1: know when you heard about Tiger you know, and the accident,
Speaker 1: what was the first thing that came to mind. I
Speaker 1: mean obviously um, you know, concerns or whether he would
Speaker 1: survive the crash. Um. And also as a fan of
Speaker 1: the sport, I mean I was um disappointed. I think
Speaker 1: a lot of people and Tiger himself just said last
Speaker 1: weekend he was still holding out hope that he was
Speaker 1: going to compete in the Masters um in April, and um,
Speaker 1: you know, his back had been bothering him, but he
Speaker 1: thought he might play. And that one has been um,
Speaker 1: you know, the TV viewership, CBS podcast the weekend of
Speaker 1: the Masters, and the viewership if Tiger had played in
Speaker 1: the Masters and potentially um competed in one again like
Speaker 1: he did in I mean, the ratings for that would
Speaker 1: be through the roof. Um. So I think just you know,
Speaker 1: as a favorite game, I was disappointed that he um
Speaker 1: is going to be sidelined for quite a while, if
Speaker 1: if not his entire career. And and you mentioned, you know, listen,
Speaker 1: we are Bloomberg. There's a business aspect to it. I mean,
Speaker 1: just get Discovery was working with Woods, right, they recently
Speaker 1: bought Golf Digest magazine and they were working on content
Speaker 1: together I mean this really has to be restructured. Just
Speaker 1: got about forty five seconds left. Yeah, that's right. Discovery
Speaker 1: has a streaming service called Golf TV where he was
Speaker 1: giving lessons um as part of that. Um, you know,
Speaker 1: he has sponsors like Nike, Taylor Made, Bridge Stone that
Speaker 1: are not going to be able to capitalize on him, um,
Speaker 1: you know, competing in tournaments for the foreseeable future. So
Speaker 1: you know, his sponsors are expected to stick with him,
Speaker 1: but it's really a big question mark whether he ever
Speaker 1: plays tournament golf again. And even though there's like some younger,
Speaker 1: you know, great stars out there, there's no one who's
Speaker 1: quite stepped up to the plate like Tiger has. Has
Speaker 1: it just quickly. Yeah, I mean there's you know, Brooks
Speaker 1: kef Bryson, the Shamboon, and there's a lot of um
Speaker 1: young stars that are getting more attention now. But um,
Speaker 1: you know, I don't think anybody is going to um
Speaker 1: get the same kind of um star power that Tiger
Speaker 1: Woods did. And that was Bloomberg News Media reporter Jerry Smith.
Speaker 1: We're gonna wrap up this week with restaurants and industry
Speaker 1: disproportionately impacted by the COVID nineteen pandemic and economic shutdown.
Speaker 1: We know that, tim because we've talked with many in
Speaker 1: the industry, from Danielle Blue, Eric Repair, John Taffer, bar rescue.
Speaker 1: This is an industry that is just in a tough place.
Speaker 1: Some thousand restaurants nationwide have closed permanently or for the
Speaker 1: long term since the pandemic took hold, with more than
Speaker 1: four thousand closures in New York City alone, that's according
Speaker 1: to the New York State Restaurant Association. So for more
Speaker 1: in the restaurant scene, setback and eventual comeback, we checked
Speaker 1: in with On Davis. She's the editor of Bone Appetite.
Speaker 1: We also though had to kick it off with some
Speaker 1: of the turmoil that has been at the magazine named
Speaker 1: in late summer. I came to Bone Appetite actually started
Speaker 1: in November, so I've been here a little bit more
Speaker 1: than three months, and honestly, there was nowhere to go
Speaker 1: but up because they had hit a low as they
Speaker 1: kind of reckon with their kind of racial cultural past.
Speaker 1: And we have a team that's committed to, you know,
Speaker 1: providing recipes and providing a service to the people who
Speaker 1: need us during the pandemic, where we're all cooking more.
Speaker 1: I feel that the people who stayed are really committed,
Speaker 1: and I hopefully creating an environment where people feel free to,
Speaker 1: you know, talk openly about what's going on and just
Speaker 1: putting out a really good product. My first issue came
Speaker 1: out in March. I've got it in my hand, and
Speaker 1: about that, I feel like it reflects a diversity of perspective,
Speaker 1: diversity of tastes. There's something for everyone in terms of accessibility,
Speaker 1: in terms of an advanced cook, beginning cook, and different tastes.
Speaker 1: So we are coherent as a team. Well, that is
Speaker 1: so interesting. I heard you say diversity several times in
Speaker 1: terms of how you are covering things in the magazine,
Speaker 1: like in terms of getting around racism within the corporate culture,
Speaker 1: whether it's yours anywhere, whether it's in society. We really
Speaker 1: need to approach everything with diversity. I think diversity from
Speaker 1: different perspectives, you know, even age diversity. We were better
Speaker 1: when we have different people from different generations and different
Speaker 1: perspectives giving feedback, and so I think the product is different. Also,
Speaker 1: I did a story about essential workers. It's called the
Speaker 1: hands that feed us, and even having a trained chef,
Speaker 1: but who chooses to work at a cafeteria and at
Speaker 1: a church. You know, she's never been in a magazine
Speaker 1: like Bonappetite, So that is a diversity of perspective. And
Speaker 1: obviously we have ethnic and cultural diversity in our pages.
Speaker 1: We have a Philipinos, chef from Seattle, um who runs
Speaker 1: a wonderful restaurant called him Staying. So we're trying to
Speaker 1: shake it up, but always keep it fresh and always
Speaker 1: about the food at the same time. That's been the challenge.
Speaker 1: People want diversity, but they also want recipes that they
Speaker 1: can use to feed their family, to comfort their family.
Speaker 1: Um and what we're zooming and everything else that are
Speaker 1: kind of relatively accessible. Yeah, it's interesting. So I'm assuming
Speaker 1: your approach is going to continue this way of just
Speaker 1: thinking about you know, when you think about the food space,
Speaker 1: the restaurant space, all of it, it is a diverse world, right.
Speaker 1: It's people who come from other countries and open up
Speaker 1: a restaurant. They bring their culture with them, their food
Speaker 1: with them. I mean, that's that's what it's all about.
Speaker 1: That's what makes it so exciting. You know. I had
Speaker 1: the good fortune before I was a book editor for
Speaker 1: many years and thought briefly about with friends, what maybe
Speaker 1: we should open of a restaurant one day was just
Speaker 1: a fantasy, and someone said, you know, before you do that,
Speaker 1: you have to talk to this guy named Anthony Bourdain.
Speaker 1: And I had the good fortune of of befriending him.
Speaker 1: And one of the things he loved was just how
Speaker 1: diverse and interesting the kitchens were. And I got to
Speaker 1: work with him every Friday for a couple of months.
Speaker 1: And it's true, people from all walks of life, all
Speaker 1: different ends of you know, backgrounds, some lots of culinary experience,
Speaker 1: some none at all, different continents. It was, it was beautiful.
Speaker 1: I loved it. Well, is there something about food in particular?
Speaker 1: I always think about that. I'm from a large family.
Speaker 1: We dinner was a big deal for us. We sat
Speaker 1: around the table when we had companied we just pulled
Speaker 1: up another chair and it was just this wonderful experience.
Speaker 1: But I do think about how food can help us
Speaker 1: maybe cross some of those divides that are so systemic
Speaker 1: in our society. Absolutely, I think it's how we get
Speaker 1: to know each other. You know, it's how we extend friendship,
Speaker 1: and you know, it's how we flirt with each other,
Speaker 1: It's how we comfort each other. I mean, I think
Speaker 1: one of the hardest things about the whole pandemic is not,
Speaker 1: you know, when something goes wrong, not being able to
Speaker 1: walk over uh you know a dish that you're so
Speaker 1: proud of and that you know will kind of provide
Speaker 1: some comfort. So absolutely so it brings us together. Yeah, no,
Speaker 1: no doubt about it. So tell me about the restaurant industry.
Speaker 1: They have definitely come together, supported frontline workers, done so much.
Speaker 1: It's been an industry though, as I said at the top,
Speaker 1: disproportionately impacted because of the pandemic and the shutdown. What's
Speaker 1: the way back? What are you hearing from folks in
Speaker 1: the food and restaurant space. Well, they've all had to
Speaker 1: be incredibly innovative. I'm sure you've reported one in four
Speaker 1: jobs lost in the pandemic belong in the In the
Speaker 1: food and beverage space, they've you know, created pantries where
Speaker 1: they sell olive oil or salt. They've extended their take
Speaker 1: out and made it much more robust. And I don't
Speaker 1: know that we're ever going to go you know, we're
Speaker 1: gonna turn away from that. The outdoor dining, particularly in
Speaker 1: New York where I live, has just been really kind
Speaker 1: of electric everything from TPS intense to UH structures with
Speaker 1: lots of heat, but it's been hard for them. That
Speaker 1: was Don Davis, editor of Bonappetite, and that wraps up
Speaker 1: the weekend edition to Bloomberg Business Week from Bloomberg Radio.
Speaker 1: Thanks so much for joining us. I'm Carol Masser and
Speaker 1: I'm Tim Stanovk. Be sure to tune into our Bloomberg
Speaker 1: Business Week daily show Monday Friday, starting at two pm
Speaker 1: Wall Street Time on Bloomberg Radio. You can also watch
Speaker 1: our daily broadcast on YouTube. Just search Bloomberg Global News
Speaker 1: and check out to our Bloomberg Business Week podcast. Find
Speaker 1: that at Bloomberg dot com, Apple, or wherever you get
Speaker 1: your podcasts, and that's where we will find our extra
Speaker 1: podcast this week. It's Kozma Ship Channel or CFO of
Speaker 1: the cloud communication platform company Twilio. It's a stock and
Speaker 1: company Tim that has been on a tear and you
Speaker 1: can also see me on Bloomberg Quicktake, available at Bloomberg
Speaker 1: dot com, slash qt and streaming platforms like Roku, Apple TV,
Speaker 1: Samsung TV, and more. Bloomberg Business Week It's available on
Speaker 1: newsstands now at Bloomberg dot com and on the Bloomberg terminal,
Speaker 1: have a good and safe weekend. Everyone. This is Bloomberg