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Jobs Day, Berkshire, and Kentucky Derby (Podcast) · Bloomberg Intelligence

0:00
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
0:04
Speaker 1: my co host Matt Miller.
0:05
Speaker 2: Every business day, we bring you interviews from CEOs, market pros,
0:09
Speaker 2: and Bloomberg experts, along with essential market moving news.
0:14
Speaker 1: Find the Bloomberg Markets Podcast called Apple Podcasts or wherever
0:17
Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast.
0:21
Speaker 1: Amy Glacier, senior at VP of Business Operations of the
0:24
Speaker 1: firm's called a deco, and a deco was really it's
0:26
Speaker 1: a staffing company, permanent placement, outsourcing, career transition really tied
0:31
Speaker 1: into the whole labor market and getting people placed in
0:34
Speaker 1: this economy. So Amy's got a great perspective, So Amy
0:37
Speaker 1: some I mean, I'm not sure anybody really saw these
0:40
Speaker 1: numbers coming this morning.
0:41
Speaker 3: What's the job market look like to you out there?
0:44
Speaker 4: Yeah, so it wasn't much of a surprise. Actually, from
0:47
Speaker 4: what we're seeing boots on the ground, we're still seeing
0:51
Speaker 4: leisure and hospitalities super hot. I think, you know, in
0:55
Speaker 4: the headlines, there have been all these news about layoffs
0:58
Speaker 4: and recession, and from a broader petion perspective, people are concerned.
1:04
Speaker 4: But when you really dig in to the trends. There
1:06
Speaker 4: are still some really hot opportunities out there, and lots
1:11
Speaker 4: of employers that are still hungry for talent, you know,
1:13
Speaker 4: especially in restaurants and hotels as they're gearing up for
1:17
Speaker 4: the busy travel season.
1:18
Speaker 2: And are they getting paid, are they getting raises? Is
1:22
Speaker 2: are the you know, salaries and wages keeping up with inflation.
1:27
Speaker 4: So salaries and wages are not keeping up with inflation,
1:30
Speaker 4: and that's been a ongoing concern for the past six
1:33
Speaker 4: months from candidates. So one of the major trends we're
1:37
Speaker 4: seeing is that, especially for an hourly workforce, employers are
1:41
Speaker 4: choosing to put more weight on that base rate. So
1:45
Speaker 4: we're seeing less sign on bonuses, less retention bonuses, less
1:49
Speaker 4: of those extra monetary perks that tied to total compensation
1:54
Speaker 4: in favor of purely putting it in the hourly work rate.
1:57
Speaker 4: What we're also seeing is kind of this entrance into
2:00
Speaker 4: the part time workforce for a lot of folks that
2:03
Speaker 4: have been sitting on the sideline. So I was actually
2:05
Speaker 4: a little bit surprised that the participation rate didn't reflect that,
2:09
Speaker 4: because that is something we're seeing on the ground that
2:12
Speaker 4: as wages aren't keeping up with inflation, folks that are
2:14
Speaker 4: looking for secondary jobs or to return to the workforce,
2:18
Speaker 4: especially in a part time capacity.
2:20
Speaker 1: All Right, I just wanted to disclose that all four
2:22
Speaker 1: of the Sweeney offspring are gainfully employed in this economy.
2:25
Speaker 3: So we're contributing.
2:26
Speaker 1: But I see the Jolts number, Amy, and you know
2:29
Speaker 1: it was it came down, but it's still almost you know,
2:31
Speaker 1: nine and a half million people out there are I'm sorry,
2:35
Speaker 1: you know, kind of open positions.
2:37
Speaker 3: Where's everybody? Why isn't every Why aren't more people kind
2:40
Speaker 3: of in the workforce.
2:41
Speaker 1: I say, the participation rate of sixty two point six percent,
2:44
Speaker 1: I don't know, it seems kind of low to me.
2:46
Speaker 3: It should be higher. Talk to us about that part
2:49
Speaker 3: of it.
2:50
Speaker 4: Yeah, so I think you know, we were at two
2:52
Speaker 4: jobs for every candidate seeking employment. Now we're at one
2:55
Speaker 4: point six. The reality of the situation is, even if
2:58
Speaker 4: we get down to a one point one, it doesn't
3:01
Speaker 4: translate into an exact match of where the job opportunities
3:04
Speaker 4: are and where the worker resides or what their skill
3:08
Speaker 4: set is. So we're going to continue to see that
3:11
Speaker 4: talent scarcity just as a simple matter of where they
3:15
Speaker 4: physically might live or what their skill set.
3:18
Speaker 1: Is is a regional change or differences out there these days,
3:23
Speaker 1: because it just seems like everybody and their brothers going
3:26
Speaker 1: to Florida or Texas, and I know, is there some
3:30
Speaker 1: regional bias out or differences out there?
3:33
Speaker 4: We're absolutely seeing the East Coast is white hot right
3:37
Speaker 4: now in terms of hiring, along with the central part
3:39
Speaker 4: and southern part of the US. Now, part of that
3:42
Speaker 4: also translates into the leisure and hospitality time of year.
3:45
Speaker 4: People and folks are starting to gear up for the
3:49
Speaker 4: summer travel explosion. Yeah, exactly. Well, the other cool trends
3:54
Speaker 4: we're seeing right now. I really think, guys, this is
3:56
Speaker 4: going to be the summer of out of office seeing
4:00
Speaker 4: people that have stockpile PTO and haven't been able to
4:03
Speaker 4: take off over the past two years, especially in some
4:07
Speaker 4: of those hourly workforce and essential workers really taking the
4:11
Speaker 4: opportunity this year to take that PTO time and focus
4:15
Speaker 4: on their personal time off.
4:17
Speaker 2: Yes, okay, yes, I'm not familiar with the acronyms.
4:21
Speaker 1: Because you've been in Bloomberg for twenty three years. Yeah,
4:23
Speaker 1: we had a seed.
4:24
Speaker 2: Days, we have tea days, yes, okay, So well, I
4:27
Speaker 2: think Paul is one of those people. He has been
4:30
Speaker 2: He's been bitterly against working from home until he bought
4:34
Speaker 2: a beach house on the shore. And I think this,
4:36
Speaker 2: so I'm all in, He's going to be working from
4:38
Speaker 2: home a lot. How is that working out? How is
4:42
Speaker 2: that changing? I mean, are our people are that you
4:45
Speaker 2: place still insisting on very flexible workplaces?
4:50
Speaker 4: They're absolutely insisting on flexible workplaces. I think what might
4:53
Speaker 4: be surprising to some is by flexible, they don't all
4:57
Speaker 4: mean remote work from home one hundred percent of the time.
5:00
Speaker 4: We've seen that. You know, the American worker really has
5:03
Speaker 4: a strong appetite for collaboration, being in person coffee chats,
5:08
Speaker 4: talking with their fellow employees. They just don't want to
5:11
Speaker 4: do it five days a week. So the employers that
5:13
Speaker 4: are getting it right and winning right now are opting
5:16
Speaker 4: more for that hybrid work opportunity where sure you come
5:19
Speaker 4: into the office to maybe three days a week, that
5:21
Speaker 4: you have flexibility in picking those days, and both the
5:24
Speaker 4: employer and the worker are benefiting from that flexible schedule.
5:29
Speaker 3: How big of a Kentucky Wildcat fan are you, Amy?
5:32
Speaker 4: I have a third generation Wildcat grad.
5:35
Speaker 1: Wowret big dog gets here undergrad enter MBA from the
5:40
Speaker 1: University of Kentucky.
5:41
Speaker 3: How good is that?
5:41
Speaker 1: And it's Kentucky Derby weekend, so I'm sure that's big
5:44
Speaker 1: for you, So that'd be cool. We'll be watching Amy Glacier,
5:46
Speaker 1: Senior VP of Business Operations at a Deco. They're a
5:49
Speaker 1: big staffing company out there, and they got their finger
5:52
Speaker 1: on the pulse of kind of what's going on in
5:53
Speaker 1: terms of hiring and firing out there in the economy. Boy,
5:56
Speaker 1: it was a blowout jobless our jobs jobs number today,
6:00
Speaker 1: although again there was a revision a prior month.
6:02
Speaker 5: But you're listening to the team. Ken's are Live program
6:06
Speaker 5: Bloomberg Markets weekdays at ten am eastering on Bloomberg dot Com,
6:10
Speaker 5: the iHeartRadio app, and the Bloomberg Business app, or listen
6:14
Speaker 5: on demand wherever you get your podcasts.
6:17
Speaker 1: I want to get right to our next guest, Jonathan Hurdle,
6:19
Speaker 1: executive chairman of Hurdle, Callahan and Company. I think you
6:22
Speaker 1: started that thing around nineteen eighty eight. Before that, he
6:25
Speaker 1: was a little firm called Goldman. Before that, he was
6:27
Speaker 1: an officer in the United States Marine Corps for seven years.
6:30
Speaker 1: So we thank him for service. But for me, the
6:33
Speaker 1: highlight is MBA.
6:34
Speaker 3: From Penn State.
6:35
Speaker 1: Go Nitney Lions, Jonathan, You've got a lot of experience,
6:38
Speaker 1: You've got a lot of perspective.
6:41
Speaker 3: Let's start with.
6:41
Speaker 1: The banking stuff, I mean, the banking stocks. We're not
6:44
Speaker 1: sure whether to call this a crisis, turmoil stress. How
6:48
Speaker 1: do you kind of view what's happening with some of
6:49
Speaker 1: our regional banks.
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Speaker 6: First of all, I like to think about it as
6:52
Speaker 6: part of the cycle. We had this extended cycle. And
6:55
Speaker 6: when you look at a bank, they have to make loans,
6:58
Speaker 6: and they have to have a how do they make
6:59
Speaker 6: their decisions? And if you're in the up part of
7:01
Speaker 6: a cycle, where things are accelerating, you can be more aggressive.
7:05
Speaker 6: But you don't know how that bank is doing until
7:07
Speaker 6: you go through the other part of the cycle, the downturn.
7:09
Speaker 6: And if you can measure their performance trough to trough,
7:12
Speaker 6: then you see who the better bankers are. So we
7:14
Speaker 6: had this weirdly extended easy money cycle. You know, we're
7:18
Speaker 6: at the end of the era of easy money, and
7:20
Speaker 6: so that unprecedented era of easy money created a lot
7:24
Speaker 6: of excess, and part of it was this extended economic boom,
7:28
Speaker 6: which lulled a lot of people into a sense of
7:31
Speaker 6: laissez faire about their risk policies and so forth. And
7:35
Speaker 6: then we got an interest rate shock, and it wasn't
7:38
Speaker 6: an increase. It was a shock when you think of
7:40
Speaker 6: going just to make the number simple one to three
7:42
Speaker 6: or you know, two to four or one to four,
7:45
Speaker 6: so it is a triple and so you get that
7:47
Speaker 6: kind of we have an economy and a banking system
7:49
Speaker 6: based on basically free money. And then at the same
7:52
Speaker 6: time this long cycle which lulled people to sleep. It
7:56
Speaker 6: doesn't make It doesn't surprise anyone that we have problem
8:00
Speaker 6: with banks, I think.
8:01
Speaker 2: So I just wonder if a bank, and I won't
8:06
Speaker 2: pick a specific one, but if a regional bank does
8:10
Speaker 2: have enough assets to cover deposits, does it really matter
8:14
Speaker 2: if the shares are driven down to zero? I mean
8:17
Speaker 2: beyond obviously the pain the shareholder feels. Does it matter
8:22
Speaker 2: for the wider banking system.
8:24
Speaker 6: Well, it only matters if it becomes a vicious cycle.
8:27
Speaker 6: So the stock price is key because it's sentiment. And
8:31
Speaker 6: we look at what happened to pack West, and so
8:35
Speaker 6: you could say, well, this circumstance isn't so bad, but
8:38
Speaker 6: the run on the stock could make it bad. It's
8:41
Speaker 6: just from a standpoint of psychology. And then the other
8:44
Speaker 6: big factor is that we have this only.
8:46
Speaker 2: The part I don't get though, how does the run
8:48
Speaker 2: on the stock make it bad? I mean, I get
8:50
Speaker 2: that the bank could fail, but if we are in
8:54
Speaker 2: a place where a bank can fail, I think Joe
8:56
Speaker 2: Wisenheal put it like, if we're at a place where
8:58
Speaker 2: a bank can fail, like a laundry mat fail, we're okay.
9:01
Speaker 6: Well, I think what happens is more people get frightened
9:04
Speaker 6: because they see this news and the stock price is plumbting,
9:07
Speaker 6: and they call and get their deposits out right.
9:09
Speaker 2: So that's the concern. But that's not what we've seen happen.
9:11
Speaker 6: Well, that's why this and that's one of the reasons
9:13
Speaker 6: the stock is bouncing back, right.
9:15
Speaker 2: I mean, First Republic, how many billions of dollars of
9:19
Speaker 2: uninsured deposits we're still there when JP Morgan took it over.
9:23
Speaker 2: That's how sticky bank deposits are. It is, all right,
9:26
Speaker 2: by the way, twenty billion is the number.
9:27
Speaker 1: Yes, so Jonathan, all right, So we've got the banking
9:30
Speaker 1: issue out there.
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Speaker 3: That's a concern.
9:33
Speaker 1: Most more recently, we had a job's number today that
9:36
Speaker 1: was a blowout number. We had a revision downward for
9:40
Speaker 1: the prior month, so that tempers it a little bit.
9:42
Speaker 1: But are you where's what's your recession call? Because I
9:45
Speaker 1: have a hard time when people come in here and
9:47
Speaker 1: talk about recession when I got everybody who wants the
9:49
Speaker 1: job's got a job.
9:50
Speaker 6: Right, And I think the thing is it shouldn't be
9:52
Speaker 6: a binary discussion. We could have a moderate decession, we
9:55
Speaker 6: could have no recession, we could have a soft lining,
9:57
Speaker 6: we could have a semi soft line. I mean, I
9:58
Speaker 6: really think that's where you have to be. It's hard
10:00
Speaker 6: to call in a binary way. My personal feeling is
10:03
Speaker 6: we're likely to have a mild recession. That's just my
10:06
Speaker 6: personal feeling. And then the answer to that is so
10:09
Speaker 6: what I mean? So so what I mean? It's just
10:11
Speaker 6: we're still managing earnings. Earnings are coming better than expected.
10:14
Speaker 6: We have the best managers in the world working on
10:16
Speaker 6: these stocks. So I think it's all binary. Is a
10:19
Speaker 6: hard call, okay.
10:21
Speaker 2: I mean, if we have unemployment at three point four percent,
10:25
Speaker 2: is it possible to get inflation down? Can inflation come
10:28
Speaker 2: down if everyone still has a job.
10:31
Speaker 6: Well, it depends when I mean, how long is it
10:32
Speaker 6: going to take. I mean, I'm struck by the fact
10:34
Speaker 6: that you know the implied inflation rate and tips is
10:38
Speaker 6: a two percent on a ten year bond, So that's
10:40
Speaker 6: the implied rate, and the market knows a lot. The
10:42
Speaker 6: market is telling us a lot. Maybe ten years from
10:45
Speaker 6: now is too long to care about. But I do
10:48
Speaker 6: think in general, one of the things we've talked about
10:50
Speaker 6: before is the balance between focusing on the cycle and
10:53
Speaker 6: focusing on the trend, and so we tend I think
10:56
Speaker 6: you need to focus on back both of them. You
10:58
Speaker 6: can't ignore psycho but in general, people are more focused
11:02
Speaker 6: on the cycle, in my opinion, than they should be.
11:05
Speaker 6: They should be focused a little bit more on the trend,
11:07
Speaker 6: all of which is positive. And Bernanki talks about the
11:10
Speaker 6: idea that there are these secular trends in the world
11:12
Speaker 6: that are disinflationary, and technology is certainly one of them.
11:15
Speaker 5: Yep.
11:16
Speaker 2: So you like technology.
11:17
Speaker 6: We do like technology.
11:18
Speaker 2: You don't think it's overvalued here, Well.
11:20
Speaker 6: It could be overvalued here. But software is changing the world, right,
11:25
Speaker 6: you know Mark Andriesen's article several years ago software is
11:28
Speaker 6: eating the world still true. AI is just another accelerating
11:33
Speaker 6: story on that we.
11:34
Speaker 1: Can't go three hours in this show without mentioning ai Oh,
11:38
Speaker 1: I have personally thought of so many new business cases
11:41
Speaker 1: that I might leave and become entrepreneurial multimillionaire because.
11:48
Speaker 2: I think it could be used in so many different ways.
11:49
Speaker 6: I mean I'm not alone there, yeah, right, But I
11:51
Speaker 6: also think just blockchain, I mean, blockchain may revolutionize software
11:55
Speaker 6: development as well. So software is going to continue to
11:58
Speaker 6: be change our lives lives, and we fortunately are the
12:03
Speaker 6: country that leads that.
12:04
Speaker 5: So we do like that.
12:05
Speaker 6: We like lots of things, but that's one of the
12:07
Speaker 6: areas we like.
12:07
Speaker 2: Hey, what about the banks? You know, I saw a
12:10
Speaker 2: great quote in a Bloomberg story overnight. An analyst Ben
12:14
Speaker 2: Gerlinger from the Hubed Group wrote, the shares in Western
12:17
Speaker 2: Alliance offer a rare, once in an economic cycle entry
12:21
Speaker 2: point into a best of breed banking franchise. I'm not
12:26
Speaker 2: asking you specifically to common Western Alliance, but if these
12:30
Speaker 2: banks are safe and it really is just a short
12:32
Speaker 2: seller's attack, isn't it a great time to buy them?
12:35
Speaker 6: Well, there's no question that there are opportunities when you
12:38
Speaker 6: find dislocation. So for example, in the commercial real estate
12:42
Speaker 6: challenges which we know are coming, there's going to be
12:44
Speaker 6: opportunity to make money there. You always sort of ride
12:46
Speaker 6: to the sound of the guns, you know, wherever the
12:48
Speaker 6: dislocation is, you want to look there. Whether that fella
12:51
Speaker 6: is right or not, only time will tell. And I
12:53
Speaker 6: think it's a little bit like picking a lottery ticket,
12:55
Speaker 6: like somebody's going to be right, and at the end,
12:57
Speaker 6: whoever was right will be declared a genius when it
13:00
Speaker 6: was just random.
13:01
Speaker 1: John, We want to take advantage of your experience, your
13:04
Speaker 1: perspective on a really exciting part of the investment marketplace,
13:09
Speaker 1: and that's private credit. How do you think guys think
13:12
Speaker 1: about private credit as an opportunity for investors?
13:16
Speaker 6: So we love it. This is one of our big
13:18
Speaker 6: emphasies right now. And it's not for amateurs, is the thing,
13:22
Speaker 6: and it's not easily available, so you've got to be
13:24
Speaker 6: careful who you're with. But done right, private credit is
13:28
Speaker 6: a terrific opportunity. We've seen, you know, nominal returns move
13:33
Speaker 6: from like seven to twelve and we think are outstanding
13:37
Speaker 6: managers now, Paul. The key thing here, I think, and
13:40
Speaker 6: this is my opinion, this is one of the things
13:43
Speaker 6: that I talk to myself about in our team is
13:45
Speaker 6: that this is likely to be a low returning decade,
13:48
Speaker 6: and so it's almost like small ball in baseball. You
13:50
Speaker 6: got to you know, get a walk, go to first,
13:52
Speaker 6: steal second, get a month to move to third. That's
13:54
Speaker 6: the kind of environment we're likely to be in for
13:56
Speaker 6: the next decade, in my opinion, which is very different
13:59
Speaker 6: than the decade we just went through. And so I
14:01
Speaker 6: think people are keep thinking how do we get back
14:03
Speaker 6: to normal, and they define normal as what was going
14:06
Speaker 6: on four years ago. That's not normal. This is more
14:09
Speaker 6: normal going through a cycle, having a recession, figuring out
14:12
Speaker 6: how to grind out the returns they're going to fund
14:15
Speaker 6: your success.
14:16
Speaker 2: This is what we heard from Nikolai Tangen, by the way,
14:19
Speaker 2: the head of the Norgus Bank, yep, you know, at
14:22
Speaker 2: the beginning of this year, he said the same thing.
14:24
Speaker 2: I think that it's going to be smaller returns than
14:26
Speaker 2: we're used to. I think pretty obviously right when you
14:29
Speaker 2: have the punch bowl taken away, that's what happens.
14:32
Speaker 7: Well.
14:32
Speaker 6: And if you go back to Robert Schiller's Nobel Prize
14:36
Speaker 6: on his work, was you're going in multiple determines your
14:40
Speaker 6: next decade's price. It's a very linear relationship, and if
14:44
Speaker 6: you have a twenty two multiple going in on average
14:46
Speaker 6: over time, you get like some four percent return or
14:49
Speaker 6: some very low return. So we started out this past year,
14:52
Speaker 6: you know, the year that we just went through with
14:53
Speaker 6: a big negative. So you start out negative and now
14:56
Speaker 6: you have to earn your way back to a ten
14:58
Speaker 6: year return. So I think that's the face we're likely.
15:02
Speaker 6: We don't know, but probability wise, it's more likely that
15:04
Speaker 6: we're going to have that low returning grind out, you know,
15:08
Speaker 6: singles and doubles kind of a world for the next
15:11
Speaker 6: ten years.
15:11
Speaker 3: Hey, John, thirty seconds back to office. What's your thought?
15:15
Speaker 6: This is a long discussion, but I love people being
15:18
Speaker 6: in the office. So one of our four pillars is
15:20
Speaker 6: that we embraced the magic of teamwork, and you can't
15:23
Speaker 6: have the teamwork, and teamwork's not the same if people
15:25
Speaker 6: are not back in the office. I think we're going
15:27
Speaker 6: to end up with twenty nineteen New and Improved, which
15:29
Speaker 6: means that people do have more flexibility. But in my opinion,
15:33
Speaker 6: the default ought to be come to work if you
15:35
Speaker 6: stay at home if you need to, not default stay
15:38
Speaker 6: at home, come to work if you need to, So
15:40
Speaker 6: that might not look that different. But and it gives
15:43
Speaker 6: people the flexibility that they didn't have before twenty nineteen
15:46
Speaker 6: and before this COVID experience. So we've learned a lot
15:49
Speaker 6: and we should learn from that. But in the end,
15:51
Speaker 6: it's not the same if you're not together.
15:53
Speaker 1: Yeah, I think that default way of thinking about it.
15:56
Speaker 1: It makes a lot of sense, Yes, but that's flipped
15:59
Speaker 1: from what it is now. Right Yeah, I say right
16:00
Speaker 1: now people, I'll come in once a week, you know. Yeah,
16:04
Speaker 1: but that has to change as heyel Friday is not
16:06
Speaker 1: one of those days exactly, John the Great having it here.
16:09
Speaker 2: We need to get you back for a longer discussion
16:11
Speaker 2: because there's so many issues we didn't touch on.
16:13
Speaker 3: Yeah's always a pleasure to be with you.
16:14
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16:34
Speaker 1: All right, I want to get to our next discussion.
16:35
Speaker 1: This is gonna be fascinating Michael Sonenfeld joins us. He's
16:38
Speaker 1: chairman and founder of Tiger twenty one and Tiger twenty
16:40
Speaker 1: one is a network of learning groups for high net
16:44
Speaker 1: worth investors and this is a fascinating discussion. Michael, thank
16:47
Speaker 1: you for joining us in our studio here. How does
16:50
Speaker 1: a person how does a person come to Tiger twenty
16:53
Speaker 1: one and why do they come to Tiger twenty one.
16:56
Speaker 8: So, you know, we have a lot of great entrepreneurs
16:58
Speaker 8: in this country, but when the best of them sell
17:01
Speaker 8: their business in an instant, they go from being an
17:04
Speaker 8: entrepreneur to a wealth manager and they're not prepared for that.
17:08
Speaker 8: They may be a great leader, a great manager, they
17:10
Speaker 8: can inspire troops, but what do they know about convertible bonds, equities,
17:15
Speaker 8: inflation rates? Obviously they knew it through their business. But
17:19
Speaker 8: we're the place that they join and meet with others.
17:22
Speaker 8: We're a peer to peer learning center and we have
17:24
Speaker 8: about twelve hundred and fifty members managing their own money
17:28
Speaker 8: a total of about one hundred and fifty billion dollars.
17:31
Speaker 2: So what are the what are the limits? I mean,
17:36
Speaker 2: how much do you have to have to be a
17:39
Speaker 2: member and what kind of help can you expect once
17:42
Speaker 2: you get in.
17:43
Speaker 8: So to qualify first as good character, we do a
17:47
Speaker 8: lot of background checks. That's really important because there's confidential information.
17:52
Speaker 8: But the marketplace we serve is from twenty million to
17:56
Speaker 8: a billion of personal assets an average of a little
18:00
Speaker 8: over one hundred, with most of our members having between
18:03
Speaker 8: thirty and sixty million, and what they can expect. The
18:07
Speaker 8: most important thing is to meet other people who have
18:11
Speaker 8: also been vetted, going through the same journey they are.
18:14
Speaker 8: It's a peer to peer learning model. We have about
18:17
Speaker 8: one hundred staff that serve these twelve hundred and fifty people,
18:21
Speaker 8: but fundamentally, what they're joining is a network that doesn't
18:24
Speaker 8: exist anywhere else.
18:25
Speaker 2: By the way, the importance of this, I think needs
18:29
Speaker 2: to be underlined because you know, if somebody makes a
18:33
Speaker 2: hundred million dollars selling her business, we're not feeling sorry
18:38
Speaker 2: for her, right, but she may have no idea what
18:41
Speaker 2: to do with that money, absolutely no idea where to
18:43
Speaker 2: start other than what her bankers tell her, and they
18:46
Speaker 2: of course just want her money. If she loses that money,
18:49
Speaker 2: that doesn't do any economic good for the society either.
18:53
Speaker 2: So it's helpful for all of us if she knows
18:56
Speaker 2: how to invest it and does well with it, isn't.
18:59
Speaker 8: It for sure? And you know the nature of what
19:04
Speaker 8: you know? This isn't just about money. It's about legacy. Family.
19:08
Speaker 8: You've had your nose to the grindstone or your head
19:10
Speaker 8: to the grindstone for forty years, and all of a sudden,
19:13
Speaker 8: now you've sold for.
19:14
Speaker 3: The first time.
19:15
Speaker 8: You're looking at the broader issues. And this is the
19:18
Speaker 8: community that you can explore them with.
19:20
Speaker 3: So what are I sell my company? For example?
19:22
Speaker 1: And I like the way you described it before we
19:24
Speaker 1: went on the air. Oftentimes that sell now feels a drift, right,
19:28
Speaker 1: So when they come to you, what do you find
19:30
Speaker 1: they most need, because presumably they're getting some financial advice from,
19:35
Speaker 1: you know, somewhere.
19:37
Speaker 2: Investmentalers that help them sell the company.
19:39
Speaker 3: First, all the wealth management business.
19:41
Speaker 8: Our members use a lot of the great managers, but
19:44
Speaker 8: sometimes you find they're selling instead of serving and learning
19:49
Speaker 8: how to figure out the wheat from the chaff. Who
19:51
Speaker 8: are the good managers? How do you look at managers?
19:54
Speaker 8: That's an important thing. What you're really getting is a perspective.
19:58
Speaker 8: How do you become an investor? Just as an example,
20:01
Speaker 8: I'll ask you guys a question, how long do you
20:03
Speaker 8: think it takes for an incredibly bright, incredibly successful entrepreneur
20:08
Speaker 8: to become a mildly competent investor.
20:11
Speaker 2: I would imagine years.
20:12
Speaker 8: Yeah, five years, that's sort of the average. When you
20:15
Speaker 8: sell your business, you have no idea what you don't know,
20:18
Speaker 8: and unless somebody tells you to go slow, don't invest
20:22
Speaker 8: everything right away, wait till you learn a new trade.
20:27
Speaker 8: You can make some real bloopers, and we want to
20:29
Speaker 8: try and help members avoid that.
20:31
Speaker 2: How do you convince members to trust you? I mean,
20:34
Speaker 2: is it your track record?
20:36
Speaker 4: You know?
20:36
Speaker 2: Obviously people want to get into this network, but there
20:39
Speaker 2: must be some people who think everyone's trying to take
20:42
Speaker 2: what I got, So I need to be protective of this.
20:45
Speaker 8: So I'd like to think just we don't just talk
20:49
Speaker 8: the talk, we walk the walk. I started this twenty
20:51
Speaker 8: five years ago. It is a business, but it was
20:54
Speaker 8: a labor of love, and I think we've put members
20:58
Speaker 8: first in every decision that we've done. And if you
21:01
Speaker 8: come and look under the hood, I think we can
21:03
Speaker 8: pretty much defend that. And that's how we've grown to
21:06
Speaker 8: seven countries, twelve hundred and fifty members, and almost one
21:10
Speaker 8: hundred and fifty billion in assets.
21:12
Speaker 1: So what are your members talking about and discussing over.
21:17
Speaker 1: I mean, we've just come out of this pandemic and
21:19
Speaker 1: who knows how it impacted their businesses and their wealth,
21:22
Speaker 1: and now we're in, you know, kind of a post
21:24
Speaker 1: pandemic world.
21:25
Speaker 3: What are some of the items they are discussing?
21:27
Speaker 4: Right?
21:27
Speaker 8: So two realms. One is family, legacy, children, multi generational issues.
21:33
Speaker 8: But in the economic sphere, it's how do you create
21:36
Speaker 8: an all weather portfolio. I'm not here as a trader.
21:40
Speaker 8: I've created wealth once and I want to preserve it.
21:43
Speaker 8: And that's why our asset allocation is so important. Don't
21:47
Speaker 8: we just measure what our members do. We don't dictate it.
21:50
Speaker 8: They all manage their own funds. But today, as an example,
21:53
Speaker 8: private equity is thirty one percent, public equity is twenty
21:57
Speaker 8: two percent, and real estate twenty four percent. That's seventy
22:02
Speaker 8: eight percent long. But when you have that much long exposure,
22:06
Speaker 8: you better have a lot of cash to weather the storm.
22:08
Speaker 8: So eleven percent cash, which is a particularly high number.
22:12
Speaker 8: So finding out how to get the benefit of a
22:14
Speaker 8: day like today. What a day we're having, right, But
22:17
Speaker 8: you didn't know that yesterday what it was going to
22:19
Speaker 8: look like if it turned the other way. The eleven
22:21
Speaker 8: percent cash creates a kind of buffer, and just dealing
22:24
Speaker 8: in those concepts is not what you were doing as
22:27
Speaker 8: an entrepreneur, No, not at all.
22:28
Speaker 3: You were selling more widgets.
22:30
Speaker 2: Yes, I was thinking when you said you're seventy eight
22:33
Speaker 2: percent long, do you teach them how to hedge? And
22:36
Speaker 2: then my thoughts fall back. We have geniuses come in
22:39
Speaker 2: the studio all the time. Neil Roseman, for example, I
22:41
Speaker 2: will say like, oh, I just sell puts on this
22:43
Speaker 2: and that, and I have no idea what he's talking about,
22:45
Speaker 2: you know, And I imagine a lot of entrepreneurs are
22:48
Speaker 2: the same way.
22:48
Speaker 5: Yeah.
22:49
Speaker 8: So look, some of our members are some of the
22:51
Speaker 8: world's great traders came out of that. But most of
22:54
Speaker 8: our members built a business. They started with a concept
22:58
Speaker 8: and they took it to fruition. Even hedging is a
23:01
Speaker 8: little complicated. They may be investing in funds that have
23:04
Speaker 8: hedging strategies, but having the basic portfolio work for the
23:08
Speaker 8: long term, that's the objective.
23:10
Speaker 2: Can you start a family office with Tiger? I mean,
23:14
Speaker 2: how does this work?
23:16
Speaker 8: So we do have a group of members who have
23:19
Speaker 8: family offices. Family offices typically begin at about two hundred
23:23
Speaker 8: million and above. You can't economically underwrite a family office
23:28
Speaker 8: at a smaller amount. And then obviously once you get
23:32
Speaker 8: into the billions of dollars, you have huge family offices.
23:35
Speaker 8: That's not our market. We're from twenty million of investable
23:38
Speaker 8: assets to a billion.
23:40
Speaker 3: Wow.
23:41
Speaker 1: Just fascinating discussion. Million ways we could go on this.
23:43
Speaker 1: So we're gonna get you back in here because now
23:44
Speaker 1: that I understand that you are in New York, there's
23:46
Speaker 1: no excuse. So we're going to get you to STUDI
23:48
Speaker 1: a little bit more often because we can go a
23:49
Speaker 1: million different ways. I love to just know what your
23:51
Speaker 1: members are doing in markets from time to time. That'd
23:54
Speaker 1: be a good gauge of how these markets are performing.
23:57
Speaker 1: Michael Sonenfeld, he's the chairman and he is the founder
23:59
Speaker 1: of Tiger twenty one.
24:01
Speaker 3: Again.
24:01
Speaker 1: Tiger twenty one is a network of learning groups. That's
24:04
Speaker 1: a good way to describe it. A network of learning
24:06
Speaker 1: groups for high net worth investors. And love talking to
24:09
Speaker 1: Michael because he has a very unique perspective into these
24:12
Speaker 1: markets based upon what he learns from his group.
24:15
Speaker 3: There, so good discussion.
24:18
Speaker 5: You're listening to the team Ken's are Live program Bloomberg
24:22
Speaker 5: Markets weekdays at ten am Eastern on Bloomberg dot com,
24:25
Speaker 5: the iHeartRadio app and the Bloomberg Business app, or listen
24:28
Speaker 5: on demand wherever you get your podcasts.
24:33
Speaker 9: Curiously comes on you in the heels of a spate
24:36
Speaker 9: of deaths at the track at Churchill Downs. Clearly the
24:40
Speaker 9: track and the company are on edge. It's a it's
24:45
Speaker 9: a major problem, and it's a major pr problem. And
24:48
Speaker 9: I think they are trying to really exercise caution here
24:51
Speaker 9: and any horse that there may be any questions about
24:53
Speaker 9: of any kind. They are telling trainers get that horse
24:55
Speaker 9: out of the race.
24:56
Speaker 2: So what you say, deaths And immediately I'm concerned a
25:00
Speaker 2: would be peda person, you know, except for I don't
25:03
Speaker 2: have I don't know the inner strength.
25:06
Speaker 3: We have a very nice leather jacket.
25:07
Speaker 2: You it don't look like a fact. This is horse leather.
25:10
Speaker 2: This jacket and these boots. Horse not go there. But
25:14
Speaker 2: is this a problem? Do these horses die because I
25:17
Speaker 2: imagine they're doped up? Or are they pushed too hard?
25:21
Speaker 2: Do they hit them badly with that stick?
25:23
Speaker 9: Like what's the you know, the stick or the riding crop.
25:26
Speaker 9: I would say, is one of the things that actually
25:29
Speaker 9: is off in the whole conversation, but listen that part
25:33
Speaker 9: of it. Actually, they have taken concrete measures to crack
25:35
Speaker 9: down on use of the riding crop, and it's used
25:37
Speaker 9: a lot less now than it was two, five, ten
25:40
Speaker 9: years ago. You can't shockeys can't use it the way
25:42
Speaker 9: they used to. I mean Victor Espinosa famously in the
25:45
Speaker 9: derby hit American Pharaoh who go on to win the
25:47
Speaker 9: Triple Crown. I counted him. I wrote a piece on it.
25:49
Speaker 9: He hit American Pharaoh thirty times in the stretch. That is,
25:53
Speaker 9: if nothing else unsightly. The issue, yes, that they have
25:56
Speaker 9: when you get debts on the track, it can often
25:59
Speaker 9: be problems with the race surface. And that's one of
26:01
Speaker 9: the big concerns they suddenly have at Church Redowns. It
26:04
Speaker 9: is a dirt primarily a dirt surface, and it is
26:08
Speaker 9: subject to.
26:09
Speaker 6: Rain and cold freezes.
26:11
Speaker 9: And then you know, temperatures right around this time of
26:13
Speaker 9: year go up and down, and the and the and
26:16
Speaker 9: the surface the consistency of that surface can change, and
26:19
Speaker 9: you can it can lead to injuries and at times deaths.
26:22
Speaker 9: And wild on Ice, who was one of the horses
26:24
Speaker 9: that was gonna run in the Derby was pulled up,
26:28
Speaker 9: brought to the vet and and died. They had to
26:31
Speaker 9: put that horse down. So, but is it a concern
26:34
Speaker 9: is it in steroids issue? Steroids are no longer an
26:37
Speaker 9: issue they used to be. I don't know if anybody
26:39
Speaker 9: who remembers Big Brown, who was a horse that almost
26:42
Speaker 9: won the Triple Crown back in two thousand and eight,
26:46
Speaker 9: and he was a famous horse that they had, you know,
26:48
Speaker 9: on a lot of steroids that drew a lot of
26:51
Speaker 9: attention to that particular issue. Steroids have since been banned
26:55
Speaker 9: from the game, but there's no doubt that the game
26:58
Speaker 9: still has an issue of cracking down on cheaters. Listen,
27:01
Speaker 9: there are multiple people, top trainers and again who are
27:04
Speaker 9: currently in jail who were busted by the FEDS for cheating.
27:08
Speaker 9: Bob Bafford is not in jail, but he's the biggest
27:11
Speaker 9: name in racing. He is still suspended from Churchill Downs
27:15
Speaker 9: and he suspended for his four having given illegal medications
27:20
Speaker 9: to his horses. He might recall two years ago he
27:22
Speaker 9: won his seventh record breaking seventh Kentucky Derby. That horse
27:26
Speaker 9: Medina Spirit, was found to have illegal substances in his blood.
27:30
Speaker 9: He was subsequently disqualified and Bafford was suspended and is
27:34
Speaker 9: still on the outside looking in Churchill after this spate
27:37
Speaker 9: of deaths.
27:38
Speaker 3: Two of the deaths.
27:39
Speaker 9: Horses that didn't sustain injuries in the track but literally
27:43
Speaker 9: drop dead. Okay, we're trained by Saffie Joseph, a young
27:47
Speaker 9: up and coming trainer. Saffie had a horse to run
27:50
Speaker 9: in the Derby. Churchill Downs told him, scratch that horse
27:53
Speaker 9: from the race, scratch all your horses schedule to run
27:56
Speaker 9: at Churchill this weekend and take all your horses at here.
28:00
Speaker 9: You're kicked out of Churchill Downs.
28:02
Speaker 1: Churchill Downs is a publicly traded company market cap of
28:05
Speaker 1: ten point nine billion dollars as symbole c h d N.
28:08
Speaker 1: It's up thirty eight percent year to date a forty
28:10
Speaker 1: five percent on a trailing twelve month basis, so a
28:12
Speaker 1: good investment there for public shareholders. David talk to us
28:15
Speaker 1: about this year's race and the horses who are some
28:18
Speaker 1: of the favorites, who are some of them maybe the
28:19
Speaker 1: long shots to keep an eye on, because we had
28:21
Speaker 1: a long shot win last year.
28:22
Speaker 9: We did have a long shot win last year, Rich Strike,
28:25
Speaker 9: and actually Rich Strike is running today in about an hour.
28:29
Speaker 9: If you want to go back. Okay, I will say this,
28:33
Speaker 9: after winning at eighty to one on Derby Day last year,
28:36
Speaker 9: how many races has Rich strike one sins then zero?
28:40
Speaker 9: The number is one zero times. Now I think that
28:44
Speaker 9: race is a bit of a fluke. It was a
28:46
Speaker 9: sub it was it was circumstances that helped get him
28:49
Speaker 9: in the winter circle. But what will absolutely happen this
28:51
Speaker 9: year is after an eighty to one shot wins one year,
28:54
Speaker 9: everybody goes out and bets the long shots. The next
28:57
Speaker 9: year that's just gonna happen. So all these crazy long
29:00
Speaker 9: shots that you'd be seventy eighty ninety to one, we'll
29:02
Speaker 9: get bet down to twenty to one. And that doesn't
29:04
Speaker 9: make a whole lot of sense, to be honest, but
29:07
Speaker 9: it is something that's absolutely gonna happen.
29:09
Speaker 2: By the way, this I don't want to get too
29:11
Speaker 2: deep into this if it's complicated. I know nothing about betting.
29:14
Speaker 2: Can you short a horse? Can you sell puts? I mean,
29:18
Speaker 2: can you get into that sort of derivative stuff? Or
29:21
Speaker 2: is it just bet on the ones you think are
29:22
Speaker 2: gonna win.
29:23
Speaker 9: So it's a lot easier in place like the UK
29:25
Speaker 9: you can flat out short a horse and I love
29:27
Speaker 9: that right so here because it's just very simple. I
29:30
Speaker 9: want to bet against that horse. I essentially, if Paul
29:33
Speaker 9: Sweeney wants to bet on the favorite Forte in the Derby,
29:36
Speaker 9: I can say, hey, I'll take that action from Paul.
29:38
Speaker 9: All right, you bet that bet with me. I'll give
29:40
Speaker 9: it a forourte wins, I pay you. If he loses,
29:42
Speaker 9: you pay me. In the United States of America, you cannot,
29:44
Speaker 9: at least not at the major racetracks and the major
29:47
Speaker 9: betting venues. So what you're typically left to do if
29:50
Speaker 9: there's a big favorite that you're negative on to bet against,
29:54
Speaker 9: find a bookie or you just what we say, you
29:55
Speaker 9: fade that horse. You find you have to find the
29:58
Speaker 9: most likely up setters to try to beat him.
30:01
Speaker 3: But it's much much easier in the UK to.
30:04
Speaker 2: So Fortes favored to win. Tell us about the favorites.
30:07
Speaker 9: So the favorite so Forte was two year old champion
30:09
Speaker 9: last year. He looked dynamite in his return as a
30:13
Speaker 9: three year old. All the horses in the Derby are
30:14
Speaker 9: three years old, right, He looked dynamite returning in February
30:20
Speaker 9: at the races in Gulfstream, looked less great. Last in
30:24
Speaker 9: his last race. He won that too. The issue with Forte,
30:27
Speaker 9: and this is one of the really things that's unique
30:29
Speaker 9: about the Derby, is at the Derby there will be
30:31
Speaker 9: one hundred and fifty thousand screaming, drunk human beings. Horses
30:35
Speaker 9: are flight animals, they're skittish animals, and surrounded by one
30:39
Speaker 9: hundred and fifty thousand drunk people, they can get on
30:42
Speaker 9: edge and they can lose their minds and run their
30:44
Speaker 9: race before the race even begins. Forte has a bad habit.
30:48
Speaker 9: Everyone should watch him in the pre race warm ups
30:50
Speaker 9: and in the post brid He has a bad habit
30:52
Speaker 9: of getting worked up and riled up and anxious and
30:56
Speaker 9: sweaty's if that's happening to him in front of crowds
30:58
Speaker 9: of ten and twenty thousand people, you can only imagine
31:01
Speaker 9: what it's going to look like in front of one
31:02
Speaker 9: hundred and fifty thousand people. That's one of my concerns
31:04
Speaker 9: about him. I am indeed negative. I'm fading Forte.
31:08
Speaker 3: All right, So other horses, who are you betting?
31:11
Speaker 2: Who are you betting on to.
31:12
Speaker 9: Win the winner of? Like voting the winner of the
31:16
Speaker 9: one hundred and forty ninth Kentucky Derby is named Angel
31:20
Speaker 9: of Empire. He'll be somewhere around eight to one ish.
31:24
Speaker 9: I just like everything about the way he's coming into
31:26
Speaker 9: the race, right. I'm someone who puts a lot of
31:29
Speaker 9: stock in the way horses are training in the morning.
31:31
Speaker 9: He right now everyone is just you know Gaga or
31:34
Speaker 9: the way he looks in the track in the morning.
31:36
Speaker 9: He's He's a horse that was a sort of a
31:39
Speaker 9: more of a late developer, but he's the now. To me,
31:41
Speaker 9: he's the now horse, and I think.
31:43
Speaker 3: There's a lot of value.
31:44
Speaker 9: So Forte has had a much more impressive career. But
31:47
Speaker 9: you know, Forte very precocious at two, but seems to
31:50
Speaker 9: be tailing off. A horse like Angel of Empire, I
31:51
Speaker 9: think is a great candid. I also like, you know
31:53
Speaker 9: a horse that almost beat Forte and the last race
31:56
Speaker 9: of horse named Mage John Tucker. I see he's paying
31:59
Speaker 9: attention right that downshot age got it?
32:02
Speaker 2: Where can you go to place these bets?
32:04
Speaker 9: Ot storing I obvious online there's all you know from
32:09
Speaker 9: gambling apps. I mean, the New York Racing Association's got
32:12
Speaker 9: one that's very popular, and IRA Bets Churchill Downs has
32:15
Speaker 9: one that's very popular called you know Twin Spires dot Com.
32:18
Speaker 2: I mean everyone's I need a long shot.
32:19
Speaker 3: That's how I play. You want to long shot on
32:22
Speaker 3: a long shot.
32:22
Speaker 2: But they're not going to pay off as much as
32:24
Speaker 2: the long shots typically do. David just told us everybody's
32:26
Speaker 2: betting a long shot that drives the odds down.
32:27
Speaker 3: That is absolutely you bet your book. I'll bet my
32:29
Speaker 3: book shot.
32:31
Speaker 9: The only thing I'll say, and thatcher right, Matt's paying attention.
32:33
Speaker 9: Here's the only thing I'll say about the Derby is
32:35
Speaker 9: the Derby gets you chaotic results because not only is
32:38
Speaker 9: the crowd massive, it's a huge field. And so even
32:42
Speaker 9: though we're down to just nineteen horses after the scratches,
32:45
Speaker 9: nineteen horses is more than double the typical size of
32:49
Speaker 9: a field in a race. So chaos reins. Last thing
32:51
Speaker 9: that creates chaotic results and why sometimes long shots are
32:54
Speaker 9: a good bet is no horse has ever run this
32:57
Speaker 9: distance before this long a mile and a quarter, and
33:00
Speaker 9: most of them will never run this distance again. AM
33:03
Speaker 9: mile and a quarter is a rare distance. Nowadays they
33:05
Speaker 9: tend to could be a mile and so you can
33:07
Speaker 9: get chaotic results. So, Paul Sweeney, if you want to
33:09
Speaker 9: dial up a long shut or two knock yourself, nice
33:12
Speaker 9: good stuff.
33:13
Speaker 2: Why don't we have a whole show with David Pye
33:14
Speaker 2: knows I know he's coming back.
33:16
Speaker 3: We're gonna, don't worry.
33:16
Speaker 2: At least a weekly show we should have with you exactly.
33:19
Speaker 1: They have a Populattopoulos, executive editor for Bloomberg News, and
33:23
Speaker 1: he is our.
33:23
Speaker 3: Resident horse guy. You gotta have a horse guy, and
33:25
Speaker 3: we got one.
33:26
Speaker 5: You're listening to the tape Can's are live program Bloomberg
33:29
Speaker 5: Markets weekdays at ten am Eastern on Bloomberg Radio, the
33:33
Speaker 5: tune in app, Bloomberg dot Com, and the Bloomberg Business App.
33:36
Speaker 5: You can also listen live on Amazon Alexa from our
33:39
Speaker 5: flagship New York station, Just say Alexa play Bloomberg eleven thirty.
33:46
Speaker 2: It looks like there's a group of shall I say,
33:50
Speaker 2: dissidents or activist shareholders yep, that are attempting what I
33:54
Speaker 2: imagine is a very long shot bid to remove Warren
33:57
Speaker 2: Buffett yeah from the air, from the position his position
34:02
Speaker 2: as chairman at Berkshire Hathaway at the annual shareholder meeting
34:06
Speaker 2: this Saturday. The reason, apparently, is because of his ties
34:09
Speaker 2: to Bill Gates. The two are famously close and Bill
34:13
Speaker 2: Gates charity charitable foundation, the Bill and Melinda Gates Foundation.
34:18
Speaker 2: I don't know why, but.
34:20
Speaker 3: We've got somebody who does know what exactly.
34:22
Speaker 2: We've got the author of the article, the reporter joining
34:25
Speaker 2: us right now, Bill Allison, comes to us from Washington,
34:28
Speaker 2: d C.
34:28
Speaker 3: Bill, what do we know about?
34:31
Speaker 2: First of all, how how much of a long shot
34:33
Speaker 2: is this? I mean, doesn't Warren Buffett have incredible uh,
34:38
Speaker 2: speaking of brand loyalty, just unbelievable loyalty among Berkshire Hathaway shareholders.
34:43
Speaker 10: Yeah, he definitely does. And you know he owns, you know,
34:47
Speaker 10: almost a third of the stock. So that's going to
34:49
Speaker 10: be votes again, and it's you know, it's very unlikely.
34:53
Speaker 10: A similar proposal was introduced at the last year's meeting,
34:57
Speaker 10: but it did get some support. It got almost eleven
34:59
Speaker 10: percent support, and that's largely because CalPERS, the California Pension
35:04
Speaker 10: employee retirement system, voted for the resolution and they said
35:09
Speaker 10: that they long support you know, corporate governance where you
35:12
Speaker 10: have an independent board share rather than having the CEO
35:16
Speaker 10: play both roles.
35:18
Speaker 3: So is this a political thing?
35:20
Speaker 1: What do we know about the reasoning behind this that
35:23
Speaker 1: perhaps some investors don't appreciate the politics of Gates and
35:27
Speaker 1: maybe some other folks that mister Buffett may align himself with.
35:31
Speaker 10: Yeah, I think that this is this is sort of
35:34
Speaker 10: the question that these these folks are raising, is that
35:37
Speaker 10: you know, Warren Buffett has last year's meeting, he said
35:40
Speaker 10: that basically, you know, if you take political positions, you
35:44
Speaker 10: end up angering more people than you please. And it's
35:48
Speaker 10: you know, he would never do that to hurt Berkshire
35:50
Speaker 10: half the way shareholders. And then these guys are looking, well,
35:53
Speaker 10: you serve on the board of an organization that, you know,
35:56
Speaker 10: maybe not political in the sense of Democrats and Republicans,
35:59
Speaker 10: but political in the sense of they take a lot
36:01
Speaker 10: of positions on social issues that are you know, frankly,
36:04
Speaker 10: really contentious. And it's you know, whether it's you know,
36:08
Speaker 10: abortion or transgender issues or uh, you know, how how
36:13
Speaker 10: we teach students in schools. You know, a lot of
36:15
Speaker 10: these things have become hot button issues. And what they're
36:18
Speaker 10: asking is, you know, are pointing to, is you know,
36:20
Speaker 10: you have this close association with this you know, foundation
36:24
Speaker 10: that has you know, all kinds of different programs that
36:26
Speaker 10: some of which could be controversial or view as controversial
36:29
Speaker 10: isn't that doing what you said you wouldn't do?
36:32
Speaker 2: All right? So you know, I was struck by your
36:36
Speaker 2: story in that it says Warren Buffett's ties to Bill Gates,
36:40
Speaker 2: whose charitable work has triggered criticism, are putting investors in
36:44
Speaker 2: Berkshire Hathaway at risk. I would have thought his ties
36:47
Speaker 2: to Bill Gates are a problem because of Bill gates
36:52
Speaker 2: association with Jeffrey Epstein more and more of which we're
36:56
Speaker 2: learning about.
36:57
Speaker 10: Well, that's something that you know that the shareholders. It's
37:00
Speaker 10: group called the National Law, Legal and Policy Center, and
37:04
Speaker 10: that's one of the issues that they're raising is that,
37:06
Speaker 10: you know, there's this reputational risk that you know that
37:09
Speaker 10: Bill Gates has kind of become you know, his his
37:13
Speaker 10: reputation has taken a hit. You know, it's not just
37:16
Speaker 10: you know, Jeffrey Epstein. There's the question of you know,
37:20
Speaker 10: his you know, the divorce and everything else, and it's
37:23
Speaker 10: it's kind of that, you know, he's become much more
37:27
Speaker 10: of a you know, much less of somebody who you know,
37:30
Speaker 10: people thought was you know, always had his heart in
37:33
Speaker 10: the right place. To raising some questions about some of
37:36
Speaker 10: the things that he's done. In fairness, to Bill Gates.
37:38
Speaker 10: He said that it was a mistake to know Jeffrey Epstein,
37:40
Speaker 10: that he regrets it, but still this is just you know,
37:44
Speaker 10: you know, Jeffrey Epstein just keeps popping up in the news.
37:47
Speaker 10: You know, there's just a couple of series of articles
37:49
Speaker 10: looking at his appointment calendar and lo and behold. You
37:51
Speaker 10: know whose name is mentioned in it? But Bill Gates,
37:54
Speaker 10: you're listening to the tape.
37:55
Speaker 5: Can's are live program Bloomberg Markets week days at ten
37:58
Speaker 5: am Eastern on Blomberg Radio, the tune in app, Bloomberg
38:02
Speaker 5: dot Com, and the Bloomberg Business App. You can also
38:04
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38:08
Speaker 5: Just say Alexa play Bloomberg eleven thirty.
38:13
Speaker 1: Brian, You're in our Bloomberg Interactive Broker Studio. I love
38:16
Speaker 1: the casino business. Most of the casino operators have reported numbers.
38:20
Speaker 1: Just generally speaking, are people rolling the bones here these days?
38:24
Speaker 7: It appears they are. I mean, gaming has been generally speaking,
38:27
Speaker 7: really quite strong. You know, there are some puts and takes,
38:30
Speaker 7: but domestically Vegas is looking quite strong. Probably the biggest
38:34
Speaker 7: inflection point is the group convention, Business and Business travel appears.
38:39
Speaker 6: To be coming back.
38:39
Speaker 7: But you know, the overall tone of gaming lodging earning
38:44
Speaker 7: season thus far has been quite positive. Maybe a little
38:46
Speaker 7: bit of tentativeness and certaintly about the second half, but
38:50
Speaker 7: overall quite positive. And you know, also just directing this
38:52
Speaker 7: to what happening internationally, McCaw was also doing quite a
38:57
Speaker 7: bit better now that the travel restrictions in that part
39:00
Speaker 7: of the world.
39:00
Speaker 1: So that's off the coast of China, that's the the
39:04
Speaker 1: big that is the Las Vegas strip of Asia, and
39:06
Speaker 1: that depends almost entirely on mainland China. And now that
39:10
Speaker 1: China's reopened, definitely okay.
39:13
Speaker 7: I mean, the whole high end business has been choked
39:16
Speaker 7: off a little bit because there's some restrictions on junkets
39:19
Speaker 7: can't want money, you know, junk get credit. But overall,
39:22
Speaker 7: you know that business is definitely coming back because of
39:25
Speaker 7: the winding down of the zero COVID regime. That's what's
39:28
Speaker 7: really helping that part.
39:29
Speaker 6: Of the world.
39:30
Speaker 1: So when I think Vegas, how I got into Vegas
39:34
Speaker 1: was just a convention route. I mean, you go to
39:35
Speaker 1: the Vegas for all these conventions and that's kind of
39:37
Speaker 1: exposed to you to Vegas and then you're kind of
39:40
Speaker 1: for people like me, kind of hooked and really two
39:43
Speaker 1: to three nights is the max for me. Let's be honest.
39:45
Speaker 1: So talk to us about that convention business, because we
39:47
Speaker 1: just had a story earlier that says March was a
39:50
Speaker 1: like almost pre pandemic levels and it was due in
39:53
Speaker 1: part two Taylor Swift and the PAC twelve championship and
39:57
Speaker 1: thinking things like that. So how's the convention business, So,
39:59
Speaker 1: I mean, convention busines, this overall, it's really coming back
40:02
Speaker 1: at its peak pre pandemic. It was maybe twenty one
40:05
Speaker 1: percent of total room nights and now we're pretty much
40:08
Speaker 1: back there and moving that direction. You know, overall Vegas
40:12
Speaker 1: first quarter gaming revenues was twenty eight percent higher than
40:16
Speaker 1: the first quarter of nineteen, so we're now we're now
40:19
Speaker 1: above pre pandemic levels in terms of revenue.
40:21
Speaker 2: Is it the best place? Is it the biggest place
40:24
Speaker 2: in the country for conventions? I mean, Paul seems to
40:27
Speaker 2: want to go there every other week for a convention,
40:29
Speaker 2: but that's just because you want to wants to hit
40:31
Speaker 2: the table.
40:33
Speaker 6: Yeah.
40:33
Speaker 7: What makes what makes Vegas really different is if you're
40:35
Speaker 7: in a regional casino in another part of the country.
40:39
Speaker 7: Gaming is maybe eighty five percent of the total. When
40:41
Speaker 7: you're out in Vegas, it's pretty close to fifty to
40:43
Speaker 7: fifty sixty forty in favor of the non gaming component.
40:47
Speaker 7: So the big change over the last few decades has
40:49
Speaker 7: been the conventions, restaurants, entertainment, meetings, all those all those
40:54
Speaker 7: businesses now.
40:55
Speaker 2: And I would think it's a big part.
40:57
Speaker 1: And I would think, you know, with the work from home,
40:58
Speaker 1: what I'm hearing from a lot of companies is we're
41:00
Speaker 1: being flexible, we're working from home, but we're trying to
41:03
Speaker 1: get together as a group more often.
41:04
Speaker 3: I'm like, Vegas, you know, I mean, are they is that?
41:07
Speaker 1: Are they when they're when they're booking some of these groups,
41:09
Speaker 1: Are they seeing some of that as something new?
41:11
Speaker 5: Maybe?
41:12
Speaker 7: I think so. I mean, Vegas this has you know,
41:14
Speaker 7: it's not just about Vegas being the fun destination. It is,
41:17
Speaker 7: but it has the infrastructure right. It's got the airport,
41:19
Speaker 7: it's got the hotel rooms, it's got the amenity package,
41:24
Speaker 7: it's got the convention facilities.
41:25
Speaker 2: It's also got all the high end dining.
41:28
Speaker 7: Has everything you need to make.
41:29
Speaker 6: It right at the destination.
41:30
Speaker 1: My man, all right, let's we got you. You cover
41:32
Speaker 1: all the fun stuff, including the cruise lines. Royal Caribbean
41:35
Speaker 1: had some pretty decent results here. I guess people are
41:39
Speaker 1: are they cruising, are they worried about inflation, are they
41:41
Speaker 1: worried about a recession? Or are they just kind of saying, heck,
41:44
Speaker 1: booked me up.
41:45
Speaker 7: So you know, first of all, the ships are all
41:47
Speaker 7: back in service now, we're pretty much at our near
41:49
Speaker 7: complete redeployment after those ships were paused. And you know,
41:54
Speaker 7: just the numbers that just came out recently from Royal
41:56
Speaker 7: Caribbean where the strength they're seeing, and it's it's really
41:59
Speaker 7: quite strong.
42:00
Speaker 5: Wrong is.
42:02
Speaker 7: You know, it's global, but it's it's certainly we led
42:05
Speaker 7: by the North American consumer in the Caribbean and the
42:08
Speaker 7: sort of shortly bookings are improving. It's gonna take a
42:10
Speaker 7: while for cruises in China to come back, you know.
42:13
Speaker 7: But but the North America consumer of all things leisure
42:18
Speaker 7: is really health in there.
42:19
Speaker 3: And that's what he does.
42:20
Speaker 1: He's a leisure There's an institutional investor magazine category called leisure.
42:24
Speaker 6: Have you gone on a cruise?
42:26
Speaker 4: I have? I have?
42:28
Speaker 5: You don't.
42:31
Speaker 7: I've got on cruises as part of my due diligence
42:33
Speaker 7: roles in analysts and also for fun. But I actually do,
42:36
Speaker 7: I personally do enjoy it, which helps me.
42:39
Speaker 2: And Paul are gonna go. We're gonna do it cruise.
42:40
Speaker 3: We're gonna do a cruise and we have to. All right,
42:43
Speaker 3: great step Ryanegger.
42:44
Speaker 1: He covers all the leisure stuff, the casinos, the hotels,
42:47
Speaker 1: the cruises, all that fun stuff you also cover, you know,
42:50
Speaker 1: just anything that's fun.
42:51
Speaker 3: He tends to cover, which is a great career choice.
42:54
Speaker 3: He made it, like, yeah, he does, so it's all good.
42:59
Speaker 2: Thanks for listening to the Blue Burg Markets podcasts. You
43:01
Speaker 2: can subscribe and listen to interviews on Apple Podcasts or
43:05
Speaker 2: whatever podcast platform you prefer. I'm Matt Miller. I'm on
43:09
Speaker 2: Twitter at Matt Miller nineteen seventy three.
43:12
Speaker 3: And I'm Paul Sweeney.
43:13
Speaker 1: I'm on Twitter at pt Sweeney. Before the podcast, you
43:15
Speaker 1: can always catch us worldwide at Bloomberg Radio