50-Plus Lessons From Smart People

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio, or watch us on YouTube search Bloomberg Global News. Things are opening up in some parts of the world. We're certainly seeing it in New York City. Uh UK Prime Minister Borg Johnson says he remains confident that England's lockdown will end on June twenty one. We're seeing things move forward. We know that there are still, though some tough situations in some of

the emerging parts of the world. Yeah. According to Bloomberg Vaccine Tracker, at this rate of vaccination is going to take more than a year to get the entire world to a place that would be a comfortable level to immunologists. That's a lot immunity, all right, so let's get to it. Dr i los Bata Black with back with us. He's our clinical professor of medicine and why you land gown. He is on the phone in New York City. Dr lsbad are nice to have you here. We were thinking, God,

there's so many things we want to ask you. But our David Weston caught up with Dr Anthony Fauci this week at the Bloomberg Business Week Live event and he's like kind of questioning whether or not we're going to need a booster. Hi, guys, Happy Friday. So just to clarify in terms of vaccines, because I certainly you know in the hospitals, we do have our little sticker that says we're vaccinated, so that's not a totally crazy idea. And just again to clarify if you're vaccinated, if you're

with other people who are vaccinated. CDC says no mask requirement needed. Insider outside, there still are some businesses who will say you should wear a mask. Hospitals, healthcare facilities, so you know, respect where you're going, because people were individual businesses and facilities may say even with a vaccine we want you to wear a mask if you're vaccinated, if you're with someone who is not vaccinated, you know, the risk is lobano zero would be kind to our mask.

Think of the Yankees, right, they were vaccinated as several players and administrators, yet they recovered virus from their nose and screening, so low risk but not zero. And certainly if you're not vaccinated, yes, please wear a mask and

certainly think about getting vaccinated. Um In terms of boosters, Uh, yeah, you know, we measure antibodies and and certainly for six months or so, those antibodies are high, but they do seem to drop down, and we're not totally confident about T cell immunity, so it is likely at some point, maybe in the fall, we will need booster shots. And of course the question is will we need booster shots that are designed for some of the new variants that

are coming out. Are you guys planning for boosters at n y Landown? No? No, at this point, we really are. Vaccines are distributed to us as everyone by the state. Those usually come in through the federal government, so they're distributed to the states and then given out to the individual facilities. Uh, will you go back and explain T cell immunity versus antibodies, because I don't think the late

person has has a grasp of what that means. And I certainly don't mean Grol knows because you asked questions about this, so you know, for just in terms of booster shots, we have many vaccines. We give out mumps, Musles rebell a to kids, hepatitis, influenzas, shingles. You know, we we do. Over time can lose antibodies and therefore potentially be susceptible, so we do. We do give booster shots. T cells are a little harder to measure. T cells

are the memory cells. They're the ones that when the B cells that make antibodies, and those antibodies, for example, like in the moderna vaccine or fights or you know, the messenge our name makes the spike protein to body says, hey, the spike protein we don't recognize. You form antibodies, and so when the real covid comes in, your body fights it off right away. Now, those antibodies are around for at least six months, we think, both with infection uh

and and the vaccine, but over time they drop. We do think other cells called T cells or memory cells still will be able to UM call up those antibodies with a little bit of a delay. The actual memory cells, those T cells to say, the spike protein or covid are harder to measure. We do have some tests for that, they're not widely available UM and I think most people you know would say that's good, but we want to give a booster to make sure the antibody levels remain high.

That's the most secure way. But I think we're learning that even if your antibodies drop, you'll probably be okay. We're all going to go to at some point like kind of the antibody tests, like to get an idea of kind of where we are, which that data collection help us in understanding more about the COVID vaccine. So we're not widely doing that now, that's you know, not inexpenses. People who have had a shot of antibodies. You can

order a antibody to spike protein. I mean, if someone really they have some immune issue, they're not sure they really formed antibodies. We're not doing that because that's another layer of costs on top of things. When you do

order a routine I g G. Covid antibody. It's usually for people who have had an infection, and those usually stay positive for six or eight months, but often they do drop down and patients are like frustrated, Oh my gosh, I went through COVID and now I don't have antibodies. They probably still have some protection the T cells, but we do encourage them to get vaccinated. Dr les better. What's a realistic way for us to think about, just in the last thirty seconds, how this is going to

to play out over the next couple of years. Is it going to be just a yearly shot like we get with the flu shot and then that's that's it. We're gonna We're gonna do that. It may be. I think we have to see what happens in India and other parts of the world Brazil, if there are widespread infections as there are in low vaccination reach, much higher risk of mutant variants, and we may need to develop vaccines every year to those mutants if they can escape

our normal vaccine. I think we have to wait and see what happens. But unfortunately it's a possibility. So why some people say there's really no going back to normal because the world has changed, Because of the virus. Doesn't mean things won't reopen up, but it's going to be different. Maybe we can just get it with the blue shot. Yeah right, I can. I can work with that. Dr and Les Pater have a good and safe weekend. He's clinical professor of Medicine at n y U Lango Medical Center.

On the phone in New York City. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. What a great week, a busy one. Another great new issue of the magazine, something Business Week has done before. The how To issue is back, bigger and better than before, because along with it the actual issue is a Bloomberg Live event called appropriately so the Bomberg Business Week, five days of virtual life programming, bringing

the magazine to life a different vertical every day. Here with the recap Bloomberg Business weekend. To Joie Webber in our Bloomberg Interactive Broker Studio, You've had a really killer week. It was great, and you know, we tried to when we were thinking about this, we wanted to pair it with the magazine and basically bring the magazine to life in a way that we had never attempted to do before.

So we took the sections of the magazine and basically um them days around them, and then there were little things like the back page, which we call the last thing became a thing that we did every day, and so it was just a fun experiment. And UM, We've got a lot of great guests. We had so much great content in the issue from UM, from the newsroom and outside of the newsroom even UM to do all these how two stories, So I'm very satisfied with how

it all came together. Well, let's stick on the live event for for one second, because there was so much great stuff from that this week, Sol and I'm wondering when you think about the names who you want involved, how you come to those conclusions, how you design it, and how you think about those themes. Well, it really starts with the themes of the day, right. So we started with a business and industries day and we really wanted to delete into companies there, and then we we

did tech and innovation. It was like, who would you want to talk to on a tech and innovation day? Well, Kathy would would be a great place to start, right, So UM, so we ended up having you know, all of these things kind of come together perfectly, and you know, it's just starts with us making a lot of asks of people. And you know, the other thing that that I think really made the event be especially special, can

I say that especial? Is that it with this combination of live things, some of which were making news, with things that we had put prior energies into um and it's sort of a reflection of what we do in the magazine every week. We have the news stories and we have other things that we put that are still gonna make news, but they required some some future planning, and so you get this little marriage of the two. And I really liked how how that came together in

a fent. I thought that that was specially and unique and uniquely business Week. Yeah, those some of those pieces were just so much fun. Whether it's making a movie franchise right, or making the best chicken parmi on or it was just they were and you know, just to give you a sense of how Justin lynn Win is what you mentioned there, and he's the director of The Forthcoming Fast and The Furious uh nine and he's directed

more than a couple other ones. And that started Brett began, who is the story of the editor, who is the mastermind of the issue. He and I several months ago started having just weekly video calls with one another to kick ideas around, and we're talking like that wasn't like January or February we started this and I had just wrapped up watching um Star Wars stuff, I think, And I said, what would it be like to do how

to make a franchise that doesn't suck? Right? Like that Star Wars stuff right now is so good, but we all can b that the movies were not as good. And I said, you know, let's go to Disney and let's ask them how do you make Star Wars not suck? And Disney politely declined in that last a couple of a couple of other asks, um and look fast and furious that it has such a cult following. I think that cult following thing is a thing that we infused

throughout the issue as well. There's several other ideas that hit on that note, and it speaks to like, you you get a rabid fan base and you get to make that movie as long as you want to make that movie. Yeah, exactly, I love it. Joel, what were what were some of your favorite how twos in here? Like what did you come away with that that you're

going to do differently? So there's there's an art to all the how two articles and that you want to surprise people and give them something actionable that they that they wouldn't have otherwise thought of. Um. And so there's there's some charming ones in here, um, how to build a business online business? You know, only fans. I'm not

gonna be starting a business, not only fans. But it's most surprising thing was that people are starting businesses that have nothing to do with what you would think it would be about. A woman's basically has a whole new lease on life and she's transitioned out of personal training

in person to do it all there. And so I just think that for all the bad stuff in the world right now, and we've all been through plenty, there's this sense of optimism that I think some of these are rooted in of like can you make aspects of your life better? So I know that's a roundabout answer for you, um, but you know, it's all it's all there. I mean one of the ones that I personally did, I interviewed somebody at NAZDAC and I said, you know what,

what's made you a better manager? And she said, well, outside of my job, I have this personal board and I have different archetypes on this personal board, and I meet with these people one on one and I've had this kind of structure in my work professional life for years and it's brought you know, it's it's brought success

to my life, my work life. And I just thought that was so phenomenal that you could, you know, outside of what you're doing during your day job, that you can put a structure on on on yourself that helps

improve your how you look at work and career. I feel like certainly the Arc of the Week and also every magazine, what I think is so great is you've got serious stuff that's on the economy markets, but then you can go and there can be something on you know, an alcohol or making the best burger, or there could be somebody like Deep October who's teaching you about kind

of how to deal with how to meditate. Yeah. So, and you know I should also mention that, you know, we had all this live programming through the week multiple times. Carol Masser was a mixologist and mixing cocktails. So she got some good she got some good kids. You know, I'm pretty embarrassing at it. I hope that you know her cocktail game for if anybody's going to Carol Master's house this summer, like, I hope that there's some mean

cocktails coming. Enjoy. Enjoy. Yeah, there are a couple of times where she left, you know, she had to leave the show early to go and you know, quote unquote work. So there's a surprise and delight element. And I think that's what we try and do in the magazine always is give you stuff, news that your you need. We we want to take you in on big stories that you're only going to get from Bloomberg, but we also want to surprise and delight you with some other content

to follow this stroll. I have no idea, but I leave it. I leave it to you all. But you know, there's a new issue next week, right. We always do, and you know, we're often planning things way out into the future, and this was sort of the embodiment of that. I mean to see what we did online. If you haven't seen it, go to business week dot com uh to see all the videos. Follow us on social you can see all those like It took months to pull this off, and huge kudos to everybody involved that at

Bloomberg for helping it all come together. When do you started planning the next one to? Oh? Now, yeah, I think we'll do a little odd. Yeah, I mean I love your two dollar bill. So that one just so everybody can hear because it might be relevant on Friday. This dates back to when I was younger, slightly younger,

not that much younger, but slightly younger. Go to the bank on a Friday, Uh, buy them out of two dollar bills and that's what you're going to tip your bartender with and it will be twice as much as the person next. But it's already got me thinking about what I'm going to submit for you for next year. Okay, alright, pressures on. Well, you can p good one after here and we'll see that way you're not on the spot. Well, the cocktails that I'll be making at my desk afterwards,

you do not have to tip me. I'm just gonna say this time, I haven't gotten to get into two dollar bills, so you're you're gonna be light on a tip. So have a great weekend. It's a good week, Bloomberg Business Week nditor Joe Webber. Go to Bloomberg business Week dot com check out all the amazing content and the new how to issue. You're listening to Bloomberg. This is the Big Take, the best Boomberg's in depth original reporting from around the globe. Well, we actually make sure we do.

As the Economy covers is what kut. The data kind of broken down a bit. It's fun to becoming more and more expensively, to be looking at the shifting billion dollars for their own entry levels. There's been ways of immigration that have faced a lot of resistance, a lot of color behind the scenes, and a great untold story. How did Bezos really come out on top? As the cover says Jeff wins, he always seems to win the Big Take on Bloomberg Radio. Well, the Big Take definitely

caught our attention today. It's also one of our most read stories on the Bloomberg about how world dominating super firms. To him, they are getting bigger tech here and more Chinese. Tom or like his chief economist at Bloomberg Economics, and he joins us on the phone from Washington, d C. Tom, first of all, this is chock full of data. Charts is an interactive experience. I encourage everybody to check it

out at Bloomberg dot com. Take us through how you put it together, the analysis that you did to come to these findings. So what we've tried to do to is take a kind of grand sweep through thirty years of corporate history. We targeted the top fifty listed firms in the world, and then we pulled data on their financials and their market cap from the Bloomberg terminal and ran a bunch of analysis. And when you crunch the numbers,

it tells you a number of stories. So there's a story about a transition from West to East, the rise of the Chinese mega firm. There's a story about UM, the fall of big oil and the rise of big tech UM. And of course there's a sort of a bigger story about the big getting bigger. Go back to and the top fifty firms in the world, where they had a market cap of about five percent of global GDP. If you look at that number now it's close to thirty.

That's a big change. And listen, we talked about inequities in our world at general. In general, you know, time between individuals by we're seeing it also happening within the corporate community. You just laid it out with that stat Yeah, and of course the too a related, right. I mean, if you think about, um, we think about the biggest firms getting bigger, we also think about the entrepreneurs who

created those firms getting richer. And so the dynamic between the big getting bigger in the corporate sector and the rich getting richer in society at large, these two trends are intimately connected. Well. And it's interesting you guys write to the advantage of superstar firms and joy became all the more glaring during the pandemic, and it's it's why we saw an Amazon just take off like a rocket

during the pandemic. Yeah, I mean the pandemic, Carol, I mean, as you know, it was the disaster for the mom and pop store, right, the corner store, which relies on foot traffic to drive revenue. They had a terrible time in America and around the world. But the biggest firms in the world, the Amazon's, the Google's, the Netflix, the facebooks, they will almost they have a business model which is

almost tailor made for the pandemic. Right, Um, so the pandemic gave them sort of kind of compounded their advantage. Where do taxes come into this, because there's a striking graphical representation in here that shows the median effective tax rate of dwindled to only seventeen percent last year, at the same time profit margins heading in the opposite direction,

staring from seven percent to over that same period of time. Yeah, I think, I think when we think about it, Tim, there's been this kind of this grand sort of theme in the global economy over the last forty years, starting with the Reagan Revolution, which has really tipped the balance in favor of corporations. Tax rates have been cut, and multinationals have become better kind of shifting their profits around some times in sort of fairly dubious ways to kind

of maximize the benefit of low tax regimes. Um. And I guess, I guess the question which comes out of this research and some of the news flow from Washington, d C. And Beijing, is well, are we now at another moment for the global economy? Is the kind of the Reagan Revolution which tipped the balance from workers to corporations? Has that now when its course? And were we at the beginning of a new period where tax rates rise, where minimum wages why rise, and the balance starts tipping

a little bit more towards workers. What's also interesting, and we kind of said that coming in or in the introduction Tom about the rise or the China rising. You know, we continue to see that and that is not just in terms of their you know, impact on manufacturing globally, but it's just the companies they are creating are behemoths. Yeah. So we've got um Ali Baba, the kind of the

Chinese Amazon. UM, we've got ten cents the Chinese Internet giants, UM, a number of Chinese firms which have kind of muscled into the to the top ranks. UM. And of course there's an interesting dynamic UM there as well, because the people who say we need to regulate firms more, right, corporations have become too powerful, we need to regulate them more. Well, because of the dynamic between the chat between China and the United States, UM, the giant firms have a pushback

against that argument. Right now. We're already starting to hear some of the the US superstar firms say, well, if you tax us more, if you regulate us more, if you kind of impede our dynamism, then that's going to make it harder for us to face off against these

new Chinese humans. Tom, I want to end with just very briefly, something that that you talked about a little earlier on Quick Take Today, and it was capex and capex spending as as a portion of a company's spending and as as it relates to how many employees it

actually has to hire and what that means for human capital. Yeah, So if we go back to the to the ninety nineties, Tim, and we think about the dominant firms, then it's industrial firms like General Electric, its energy companies like x On, and they do a lot of capital spending and they

hire a lot of workers. But if you fast forward to and you think about the dominant firms, it's tech platforms like Alphabet or Facebook, which can really scale without adding a lot of workers and without doing a lot of capital spending. And that's a really important shift in the way the economy works, and something also central banks and tax authorities need to keep in mind. It's a really good point, important point to finish one. Hey, Tom, thank you so much. It is the Bloomberg Big Take.

Check it out at Bloomberg dot Com tom or Like. He's Chief Economs of Bloomberg Economics from Washington, d C. I'm road Marco journal now. But you let me drive? No, no, no no, dru home honey please, I'll do the riding drivel lets me. I want to drive, Just drive baby, the question. Try. This is the drive to the Globe Community. Thanks. We'll drying us down on Bloomberg Radio this Indeed, everyone just about ten and a half minutes until the closing

bell on this Friday, so let's get to it. And joining us with a check on the Drive to the Close is Katerina Simonetti. She is senior vice president and private wealth advisor at Morgan Stanley Private Wealth Management, and she's back with us. She joins us today on the phone from Philadelphia. Katerina, how are you good, Carol, Thank you for having me on the show. Well, it's nice to have you here. Uh. We were kind of laughing, not laughing, funny, not funny about what a crazy week

it's been. I mean, listen, the markets have just been kind of all over the place, volatility, We've had inflation concerns this week, in particular that we had a big media deal on Monday, we all had to wrap our head around remembering that it was just Monday that it was announced, and then you had crypto plunging on Wednesday

bouncing back. It's under pressure again today, retail earnings. There's just a lot being thrown at investors, and it does feel like we're taking a little bit of a breather today, a little bit of lighter volume. How do you see it, What is really driving the trade, particularly among equities? Well, Carol certainly had crazy week, and I would you know, even expand on it and say, you know that we've

had you know, crazy six months. And naturally, when you kind of just take the whole market performance into consideration, from the performance of your you know, the your your average investor, the optic that we have seen, you know, has been happening so quickly and to such scale um that we've been calling for some type of a correction, for some type of a pool bag in the market for quite some time. And we started seeing these poolbags,

you know, as early as February March. We first saw the ritation out of the expensive areas and then you know, eventually out of small caps, you know, and it seems to be like that this type of market that there's going to be hidening volatility. But at the same time, all of this is happening within the larger context of economic recovery and this bool market that we believe that we find ourselves in, so in a bull market, but

also ready for a correction. I mean, when you're thinking about a correction here, what are we what are you actually expecting? So tim bull markets tend to last for a while, Like we have to number that boom markets lost for years and the one that lasted post financial crisis. Well, that's right, that that's that's exactly right. That's a perfect example. And in any given year over the last you know, several decades, the average provement, the average correction, you know,

has been around fourteen per set. So we think that it is absolutely reasonable that we will have, you know, some type of a correction that could be anywhere from you know, let's they tend to fifteen percent. But we also don't believe that it's going to be long lived. You know, we're not looking at the recession, we're looking at the volatility. We're looking at market correcting itself. Teach

is extremely healthy. You know, at this point in time, you know, but it also comes with buying opportunities, you know, for investors. I mean, this is a great opportunity to rebalance portfolio and to take advantage of you know, two of um, you know, some of this great positioning in this market. So where are the problem pockets of the market in your view? Well, really the problem packets are

the overpriced securities. You know, this is kind of something that is very easy to recognize in this market when we look at the evaluations, when we look at multiples, when you know, we look at the expected earnings, you know, we see those trouble children, you know, we we we know that when when a stock or a certain sector went up, you know so much in the short time frame that it is reasonable to you know, to expect some type of a sell up. And we're seeing a

lot of rotation. We seem that this type of rotation, you know, is the theme going on. Right you know, what we see right now is you know, opportunities and kind of like rotation almost back into reopening themes, right something like retail, consumer discretionary or you know, semiconductors or syntag um. So you know, we just have to be you know, conscious of this overpriced market areas and specifically from the portfolio, what does that mean or sitting tight?

What does it mean? Well? I and to pare back, you know, so when we're looking within the portfolio design, right, you know, when we're looking at certain sectors of our portfolios that have been so inflated because you know, particular errors. Let's be technology for example, right, you know, if your normal allocation to technology is act, you know, and all of a sudden is twice that, you know because of such big appreciation. Now would be a good time to

rebalance and also really carefully evaluate that that portfolio. Because not all sex is created equal. You know, if we take that sector for example, you know, if we have to look at earnings and we have to look at forward looking projections, this is very much a stock picker's market in my opinion. I got to ask you about bitcoin because it is down again more than ten percent today. It has been a wild week for the cryptocurrency decline earlier this week and one day of more than before

it bounced back. How do you watch bitcoin as an asset in terms of how it could the risk off trade from that could actually go into equity markets well like Kim. It's certainly is a difficult area to address because there have been so much volatility, and I think that in a large scheme of things, the fact that we recently just recently started as really recognizing, you know that that part of the market as an asset clause you know, in itself, is a really big development um.

And I think investors going into you know, specif investments have to expect higher volatility. That's just a reality. So favorite investment right now, I would say that going forward, favorite areas are banks, materials absolutely, because you know, when you think about it, the one area that is not going to be a surprise for anyone are going to

be higher rates. And maybe not right now because absolutely, you know, we all know it's not a surprise that Federal Reserve first and foremost is committed to seeing this economy all the way through recovery. But higher rates are coming. You know, this is just atrel We just don't know, you know, how long it will take us to get there. And banks and you know sin set, you know, it's

also you know, kind of just an area correstitude. They're positively quarrelate that you know, with a higher rate environment, you know, the same with materials. Uh. The other area of the market that would really like you know, quite early, any high quality, reasonably priced areas like healthcare. Healthcare is a perfect example. You know. We see a lot of

exciting opportunities. So if a client comes to you right now and and wants to get into the markets um and and move over to you, and they have a large amount of money, how do you advise them timing wise? Exactly, tim, I think that that we just we have to take into consideration consideration where we are um and with this boom market right but at the same time, with this great degree of volatility, we would advise them to dollar cost average into this market like over the a year

over I just even shorter time frame. Let's say you take a shorter tram time from like six months, because we don't want to miss this bloom market either. We don't want to take such a long time to get in that we're missing all of those appreciation opportunities. But with expected volatility, I think that the ty here is to be very selective when it comes to security selection and extremely disciplined, you know, with going into this high quality areas and kind of you know, nice high quality,

well balance for value will do the trick. All right. We're gonna leave it on that now, Katerina, thank you so much of a great week in Katerina Seminetti. She is Senior vice president Private Wealth Advisor at Morgan Stanley Private Wealth Management. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio or watch us on YouTube search Bloomberg Global News