This is Bloomberg Business Week Inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Hi, everyone, Welcome to the Bloomberg Business Wee Weekend Podcast. Well earning season, yeah, almost over in the United States, and yet one of the biggest of the reporting season reported this past week. We're talking about Nvidia, the artificial intelligence semiconductor darling with the third highest market cap waiting in the S and P five hundred.
It's also the top gainer in the S and P five hundred this year, after taking the top spot in twenty twenty three, when it returned close to two hundred and forty percent, and Vidia a big reason behind the record run we've seen in the broader US equity market. So yes, we have more on Nvidia's eye popping sales forecast in just a moment.
Also this past week, we got minutes from the fed's latest gathering in late January. What it showed that most FED officials remained more worried about the risk of cutting interest rates too soon, rather than keeping them higher for too long and damaging the US economy.
Now, US economy is one that continues to surprise to the upside and prop up global growth. It's also an economy where Americans are moving around. We get into how those demographic shifts over the last four years could affect this year's US election, Plus Maryland Comptroller Brook Leerman on the good and the bad of her state's economy.
All of that to come. We begin with Nvidia earnings out this past week, and Nvidia predicted another massive sales gain for the current quarter, adding fresh momentum to a stock rally that's already made at the world's most valuable chip maker.
Investors continue to bet that the company will remain the prime beneficiary of an AI computing boom. We got more on the quarterly results and outlook with Bloomberg News US semiconductor and networking reporter Ian King and Bloomberg Intelligence senior tech industry analyst Kunjohn Sabani.
I just spoke with a fund manager on this very topic, and what he said was or all of the stuff that Abigail has just beautifully told you about and explained, all of these multiples and numbers doesn't mean anything. What Nvidia did was firm up in everybody's mind this is real and this is going to continue. And as soon as that became clear, as soon as they started talking and Jensen Wang, the CEO, had answers for a number of the lingering concerns that were out there. We're after the races, and.
The rally was back on.
Yeah, it's kind of remarkable because we really did bounce around. Kunjohn, come on in. As you've gone through the release, had time to digest what we got from nvidio. What to you is so remarkable about the results of the outlook In your view, I.
Think it's similar in what lines to what Ian said. It was not the magnitude of the beat that was sort of expected. It was the quality of the report, especially the sustainability of the demand. Look, demand didn't just increase from the large cloud players, which we expect. Demand is strong from enterprises. Demand is so strong from new avenues like new verticals, automotive healthcare, demand is strong from the hyper scalers, and now you have these so and
entities coming in also buying. So the broad based demand and the health of it and the sustainability what was really drove the investor confidence.
Hey, you know where I'm going with this because I ask you this every quarter every few months, and it's about the basic of basics of economics.
Here.
When there is something attractive in the business world, you have a lot of companies run after it. And I'm wondering about Nvidia's mote here. To what extent do they have a moat and is it established around what it does for AI in the AI world, And to what extent are competitors able to actually catch up here?
Yeah, two things to answer that. I think overall growth is going to lift all boats for if the projections that we've seen from people like Jensen and people like Lisa suet MD a true. Everybody's going up in the short term on this. Don't need to worry about the competitive dynamics long term. There are clearly companies who are looking at in Video selling chips multiple tens of thousands of dollars in saying I want some of that action, and they're going after it. But this is something that
in Video have been working on for several years. And guess what, They're going to have a new architecture, a new chip coming this year and guess what. The rate at which they're introducing new technology is increasing. So not only are they anticipating competition, but they're doing something about it already.
Well, and I want to kind of get into that. First of all, I want to show a chart for those who are watching on TV and on YouTube and on our streaming service. But the Nvidia Data center revenue. I mean the chart, it's just astronomical in terms of how much it has taken.
Off just from last year.
It's like mind blowing, and I do wonder Ian, let me go this to you first. I mean, the question is, you know, how long can they continue at this pace in the face of growing competition.
I mean, again, I can point you to the explanation that I got from somebody who's put the money to work in this stock, and they said, what's exciting them is the fact that so many sectors of the economy are now embracing it. Think of it as like an app store explosion of the Apple app store explosion of ten years ago. We've got the tools, we've got the platform. Now let's go out there and make use of it.
And that is happening, and that if it is true, and it does manifest itself at the rate that we're seeing it happening right now, will sustain this demand for the infrastructure.
Konjin, I heard you earlier on TV about how you believe Nvidia deserves the higher multiple that it trades at. Is that because of something like that data center revenue growth and how it's expected to continue.
Absolutely, I mean, right now, the biggest opportunity in semiconductors AI. Right there's only one player having about ninety five percent or more share, So they have the best revenue growth. Second margins when you look at there right now, have software like gross margins, something we don't see often in semicaractors. I mean, if just to put in perspective, their next year's operating income is going to be larger than Intel's revenue.
I mean, one of the largest semicinector companies that we know, right so that tells you they're not just growing, they're growing profitably. And the competitive landscape again said right now there is only one other player, so for the near term, they have the benefit of reaping all the AI spending, which again is going up across the board.
Well, that's what I wanted to hit on. Kunjohn's total addressable market here. How do you think about that at Bloomberg Intelligence, Like, who's out there that still doesn't have these products? And to what extent are they going to be upgrading products as in Vidia comes out with new products.
I mean, everyone has the product. But what we are seeing is the total IT capex right is rising twenty twenty four from what the cloud customers have announced. They're increasing their total spend by almost thirty percent at the midpoint. Now, within this spend, the portion of dollars going to AI is increating exponentially, So you don't have you have the pile growing, the portion of AI within the pile growing, and right now it's all the only one company monetizing hand over fist is Nvidia.
Well, okay, so let's go a little bit deeper into competition, Y and I mean it's coming. You talk to us about this every time you come on with us, AMD coming out with a rival AI chip. Intel is working on it, and videos top customers who are so important in terms of their revenue growth, they're working on things too. I mean, you have a story to today about Intel and Microsoft linking up, and I feel like you know, frenemies within the tech industry, like people are trying to
figure out their way forward. I guess my point bottom line is competition, though, is coming here for n video. But will the market be massive enough that it just doesn't matter.
Ian That's absolutely a possibility. The other thing to think about as well is from a technical perspective. For twenty years, the whole of the data center industry had every incentive to replace Intel. Intel was charging you know, an armor a leg for its server chips. They had every incentive to go out there and replace it, and they couldn't because guess what, this is difficult. Intel fell away from that edge. Nvidia has replaced it in many respects with
a newer technology. Everybody's got every incentive to try and knock them off the pitch, and they will absolutely try. But right now, the pace that this company is moving, at the resources it has, and importantly how widely it's been deployed already makes it very difficult for anybody to try and replace it with software, with chips, or with the other infrastructure that goes around it.
Kun John help can textualize this moment in the history of technology right now, because I've heard some analysts compare this to okay, certain like unleashing of the Internet, the beginning of the dot com bubble back in the mid nineteen nineties here and comparing this to Americans did get widespread access to the Internet and what we saw built in Silicon Valley after that. How do you think about what's happening within video, what's happening with AI and the broader context.
I think I would the analogy of sort of an iPhone moment would be appropriate. You know, when iPhones and smartphones came up. When you think of adoption and penetration, right, businesses earlier we're thinking, oh, we should have a mobile strategy, right, we should have a mobile vehicle to get to customers. Eventually, you if you were a business who did not have a mobile strategy, that would seem insane. So I think that's something what we are seeing here right now jen
ai NA still is sort of a sexy thing. We would if this demand does have legs under it, we should see it go to a point where it just becomes the norm on how you do business.
Yeah, I kind of was thinking about that this morning, right, I remember doing a primer I'm going to date myself on like what is the Internet but this whole idea right before everybody had a mobile site. We talked about how I everybody had to have their own online site. I mean, do you agree, Ian, that's kind of how we need to think about the ramp up in terms of this kind of next level generative machine learning, artificial intelligence, that everybody's going to have some sort of exposure.
I think you have to think about it in a microway from your own personal life as a resident of a big city. Would you pay ten dollars twenty dollars a month to never drive your own car in the traffic and to have that taken care of you buy
a machine? Probably yes, right, yeah, So then you multiply that by all of the megacities around the world of Tokyo, the Souls, the Shanghais, all of those people who live in that kind of city paying ten twenty to semic conductors needed to support those vehicles that are driving themselves. And you've got a big number already. And that's just one sector. And that is the kind of thinking I think that some investors are sort of putting to play when they look at what the potential for this kind
of thing is. That's just one area of transport. There are many others obviously.
All right, real quicklyise, My producers are going to kill me. But five seconds first, Kujohn to you. Are we being irrationally exuberant?
Yes?
Or no?
When it comes to no, Ian.
Being exuberant, whether it's irrational or not, who can say?
All right, well done, well done.
I'm not going to get in trouble. All right, guys, thank you so much. Always appreciate it. Ian King, US semiconductor and networking reporter at Bloomberg News out there in San Francisco. And of course cou John Sabani, He's senior semi conductor analyst at Bloomberg Intelligence. He's in our San Francisco bureau. Quick check on shares of Nvidia, folks that
are up fifteen percent. Coming up the other side of the market, ev makers Rivin and Lusen both out with earnings last night, both disappointing and both tumbling.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm. Easter Listen on Apple card Play and ed Broight Auto with a Bloomberg Business app or watch us live on.
YouTube with the South Carolina Republican primary and focus this weekend. The US is now bracing itself for a potential rematch of the twenty twenty presidential election. A lot has changed since now and four years ago. The pandemic's economic, lifestyle and work disruption set millions of middle class Americans on the move. A record setting sixteen point one million US residents moved to another state in twenty twenty one and
twenty twenty two combined. That's according to Census Bureau estimates.
And not just that Carol. By this November's presidential election, around thirty million Americans, the equivalent of the population of Texas, will have moved to a different state since twenty twenty. Even if migration recedes to a pre pandemic pace, that burst of migration, especially in key swing states, is set to be a powerful force in the electoral process.
Thankfully, we have people here at Bloomberg who can crunch the numbers to tell us the story of how demographic shifts over the last four years could affect this year's presidential election outcome. Sean Donna is bloomberg new senior economics writer. He joined us from the Nation's Capital.
We set out in this story to think about how that might affect the election. And when you do that, you really start very quickly zeroing in on six or seven states, the kind of battleground or swing states that we're thinking about this year. And when you start looking at the state level population changes there you see some really interesting things.
Well, one of the states that you focused on was the state of Wisconsin. So tell us what you found while reporting on the state of Wisconsin. Who you spoke to, the companies that are employing people, in attracting people to the area, and then of course what that does to the demographics.
Absolutely, look, as we were crunching these numbers, Wisconsin very quickly stood out as a place that we should be looking at more deeply, and one place in Wisconsin in particular, and that's Dane County, Wisconsin. That's the fastest growing county in Wisconsin. Already in the last three years, it has added twenty eight thousand to almost twenty nine thousand people. And that's significant because in twenty twenty Joe Biden won the state of Wisconsin but just over twenty thousand votes.
The population change in Wisconsin in Wisconsin's Dane County alone is already potentially significant in terms of the twenty twenty four election. What we also signed Wisconsin more broadly is a story that you see in some other swing states, and that is blue counties growing more rapidly than red counties in the state. A lot of the red counties are rural counties, interest to have an older population and
so on. But when you zero in on Dane County, what we found there on the ground was really fascinating. And then what was really driving this population change is kind of this economic transformation of a place. And when you zero in a little bit more, we found this one company, Epic Systems, which does healthcare records, which has been driving a lot of the population growth in Dane County.
Every day on their campus in Verona, Wisconsin, just south of Madison, there's thirteen thousand people, almost teen thousand people who show up for work every day, and that was eight thousand people five years ago, and the median age
of those people is twenty six. A lot of them have come from out of states, the recent college graduates, and if you look across the country, that's a demographic that has tended to vote for Democrats in recent elections, and that is interesting in the broader context of Wisconsin, because Dane County is a big pot of Democratic votes in Wisconsin. Seventy five percent of the county voted for Joe Biden in twenty twenty, and that's only going to grow, and that is good for Democrats.
Okay, But the point that you make in the story too, though, is that this demographic shift is not exclusively good for Democrats. Sean, talk a little bit about the demographic shift in terms of what it could mean to be an advantage for Republicans coming into twenty twenty four.
Sure, Look, let's let's back out first off. First off and say, just because you have a change in the populace doesn't mean everyone in that population is voting. Parties need to get their voters to turn out, go to the polls. People can change their minds. Some of these counties have had narrow margins over the years, and so a change in population. It's hard to know exactly what
the impact there will be. But of the seven battleground states that we've been thinking about at Bloomberg, stix of them saw more increases in blue counties, that is, counties that voted for Joe Biden in twenty twenty than in red counties. Across these seven states, we saw one point nine million additional population, and one point two million of that additional population is in blue counties. So that should
be an advantage for Joe Biden. And just so we're thinking about the kind of the real electoral impact of this, these are seven states that have ninety three electoral college votes. They are the places where the election is going to be one.
No, it's fascinating, right if you think about it, because you know the way the voting maps have been, you know, kind of redrawn. I mean, it's gotten so political on both sides of the aisle of I think it's safe to say, and it's really kind of skewed in terms of the upcoming elections because we still have the electoral college because it all plays out. I mean, some would argue that we need to just go you vote and you just count up the numbers and that's a winner.
But well, that's what's so funny about this is, like we're talking about this, every conversation about the election has to be you know, in the context of the electoral college, which there's no question that Democrats will likely win the popular vote once again, but that doesn't matter at all. It comes down to these seven states that Sean mentioned.
Yeah, it's really fascinating. So I think about, like our audience, who's listening and watching at this point. We just had a great chart that we showed too in terms of the population growth that we're seeing in those swing states
since twenty twenty. It's in your story, But how do you kind of think about our audience who's listening and here we are still many months away from the November election, but kind of the key takeaways that you guys you specifically too, that you took away as you did this process.
Look, I think one of the key takeaways is a lot of the discussions that we're having about this election are based on the map in twenty twenty, and it's really hard to know how that map has changed in the last four years. And population is just one of those ways. And so I am thinking about I'm trying to think about, you know, what the map is going to look like this year and where the big population
changes are going to have an impact. Georgia looks a lot bluer in terms of population that it did in twenty twenty. If you thinks atterressed, you know which is really interesting. Arizona, Maricopa County, Arizona. Two million people voted there in there are three hundred and forty thousand, almost three hundred and forty thousand more people in that county today than there were in twenty twenty. Just incredible growth in that county that was won by Joe Biden by
an incredibly narrow margin. But it's we're just going to have many more people voting there this year. So I think, you know, Georgia and Arizona incredibly interesting. Wisconsin have already mentioned. Pennsylvania and Michigan get tougher for Joe Biden, narrower, the population changes there may not be as overwhelmingly favorable there.
And then another state that people think about a lot as a new battleground state in North Carolina, and a lot of that is based on the idea that a lot of Blue voters have young college graduates have moved into the Raleigh Durham area and other places where we
have the tech industry really growing rapidly. But what we found in terms of the actual data on the ground is that a lot of red counties in North Carolina have actually been growing as well, and that that growth may take may make North Carolina less of a battleground than we otherwise think.
So some advantages for former President Donald Trump, some for current President Joe Biden.
Well, if Trump is the nominee, right, if Trump is the nominee, Yeah, absolutely potentially, And then you know, again it gets into the question of turnout and uh and how you know, how you build up the margins in big, big blue areas and whether red counties can can do the same, you know. And that was one of the most interesting people I met in Wisconsin when I was there was a guy called Brandon Maley. He's twenty three years old. He's the guy who's in charge of the
Republican operation on the ground in Dane County. And just a reminder, Dane County is an incredibly blue county, and he is in a pretty lonely place, but he is trying so hard to just try and narrow the gap. And he says, if you can just get the margin in, if you can get the number of people voting for Donald Trump or whoever the Republican nominee is there, from twenty three percent of the vote to maybe twenty five or twenty six percent of the vote in Dane County.
He thinks he is really going to help the Republican cause across the state of Wisconsin. If you can get it up the thirty percent of that county voting for Republicans rather than Democrats, well then he thinks that Wisconsin becomes a pretty strong red state. So, you know, that is the other big takeaway from these things. These small margins in relatively small parts of the country could have an outsize impact on this year's election.
Sean, is there a bigger story here that goes beyond the twenty twenty four election, a story about migration patterns and how easy it is for Americans post pandemic to pick up and move across the country because of remote work opportunities. Or is this demoker is looking at this as like, Okay, this is a one time thing post pandemic, you know, the first three years following twenty twenty.
So I think what happened in the pandemic kind of accelerated an existing trend, and that is a real shift south in terms of the American economy, and that's a shift in population south. You know the fact that we have Georgia and Arizona and North Carolina is really rapidly growing states in the country, or Texas and Florida if we're not talking about swing states per se. You know, that is really a sign of how the American economy
is kind of rebalancing south. We're seeing that in terms of manufacturing investment in other areas, and that's going to have an impact on not just this election, but future elections going forward. That electoral College map could end up shifting further south in terms of its center of gravity, and you know, that's something that's going to happen and in our lifetime, and that's going to have a big impact on future election.
You didn't I don't know if you guys thought about this, but independence or moderate candidates? Was there any kind of takeaway on that? And just got about a minute left here, Sean.
Look, I think, and you know, I write about economics. I'm not one of our political gurus, but I think one of the most fascinating things going on in the US electorate right now is a number of people who identify as independence of Americans, identify as independence rather than as Republicans or Democrats. Independence are really going to be
a huge part of the story this year. And I don't know where they live right now, but they certainly are going to be the ones who decide who are next president.
This is a great story that Sean and Christopher Cannon put together. I encourage everybody to read this one. Go check it out online at Bloomberg dot com because the graphics in here absolutely indispensable. You've got to check out the story here.
All right, and you can find that again at Bloomberg dot com or check it out on the Bloomberg terminal. Carol Master along with Tim Stanovick, you're listening and watching Bloomberg Business Week. This is Boomberg.
You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on applecar Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.
Here's some good news. At a mere one point nine percent, the state of Maryland has the lowest unemployment rate in the entire country, and at more than one hundred and eight thousand dollars a year, it's got the highest median household income in the US and then there's the not so good news. Maryland's economy is growing at a slower rate than the US economy and its neighbors Pennsylvania and Virginia, and labor force participation has not recovered to pre pandemic levels.
These figures are highlighted in a report last month from the Maryland State Controller's Office, the first report of its kind to be released. Let's get to the interview we have with us this afternoon, Maryland's Comptroller Brook Leerman. She joins us from our Washington DC Bureau Controller. Welcome. It's good to have you on the program this afternoon. As I mentioned, there are a lot of good numbers in the report, but there's also a lot of challenges here.
Take your biggest challenge, give us your biggest challenge. What in here concerns you the most?
Thank you so much.
Tim.
As you said, you know, Maryland is doing so well in so many ways, but what we saw in this report, through our numbers and analysis as well as roundtables around the state, is that our labor force is constrained. You know, we have a traditionally very high labor force participation rate in Maryland, and we still have a rate that is higher than the national average, but we haven't quite recovered from COVID, and so some of our economy is really
constrained in the private sector growth. We're seeing good federal sector growth, but the private sector growth is constrained because of this labor these labor force challenges. So, you know, we were excited to release this report so that our policy makers, our governor and others can and can really start to tackle these challenges and our economy can continue to grow.
Now, controller what are the biggest challenges in the workforce and who is bearing the brunt of the pain here.
So it's a good question. You know, we are really fortunate as a state to have a robust and unique set of industries in the state, you know, from federal to government to the port to unique biotech and cybersecurity and more all across the state, as well as numerous universities. What we saw in the data is that women have left the workforce at a higher rate in Maryland than nationally, So that's something that we're really focused on.
We also have seen some.
Health challenges over the years because of the opioid epidemic and so and continuing health concerns and so we want to make sure that we're focusing gotten there as well. And then finally I will say, you know, our population growth is so important. You know, when you're talking about labor force, it's about you know, the number of people
both who live in Maryland and are participating. And we have seen lower numbers of growth in terms of population in the past few years since COVID, and so we want to make sure that there's a place for everyone in Maryland that they can afford a home, that they can send their kids to our great public schools. So that's where we're focusing as well.
Okay, Controller, I want to zero in on one issue that you mentioned, it's women leaving the workforce. I was really shocked to see the decline of childcare centers in this report in the state of Maryland. We are seeing that you predict by twenty twenty seven, there will be only twenty seven hundred childcare providers in the state, down from nearly six thousand in twenty eighteen. I've got two little kids. Childcare is front and center for my wife and I. How do you fix this in the state?
Can you do that? As Controller?
So you know, one of the things about my job that I love is that I can partner with our governor, you know, with other our General Assembly or Speaker, Senate President. So as the Controller, I really serve as the elected CFO of the state of Maryland. And this report is about identifying some of those challenges so that our General Assembly and our governor have the information and can then formulate policies to tackle some of those challenges and seize opportunities.
And this childcare one is a huge one. I'm also a mom with two children. I understand the challenge of finding childcare, and it is essential that we get it right right, that we make sure that there's space in our economy for childcare providers of all types, the private settings, but also the in home care that many Marylanders and many folks who are below meeting income really rely on.
And so that is certainly a focus of the General Assembly and the Governor in fact mentioned it in a State of the State of the address this year.
Do you think it's something that the state can fix on its own or do you need the federal government to help.
I think it's going to have to be a partnership. You know, we will work with the federal government in terms of the childcare block grant program. You know, many years ago we changed how we paid in Maryland to pay more. In fact, in the Office of the Controller. Just this past year, we completely changed how, working with the Maryland State Department of Education, how we reimburse childcare providers so that we could provide repayments and reimbursements in
a much more timely fashion. So we're very focused on that childcare piece to ensure that women have the opportunities that they want to work out of the home.
I want to switch gears a little bit here, and I want to talk about something that's on the top of a lot of people's minds right now.
It is tax season.
I want to think about your posturing versus some of the others around you. For example, vir Junior Governor Glenn Youngkin has been of the side of saying that taxes are too high yet at state and local levels and at the federal level, we're obviously facing massive constraints on budgets. How do you think about the tax equation for the folks who live in Maryland.
I think we can never enter into a race to the bottom. You know, Maryland and Maryland, we're proud of our amazing public schools. I graduated from Maryland public schools. My two children are in public schools. We have amazing state parks, we have a robust healthcare system, and so I would caution us against, you know, entering into any
sort of race to the bottom. As in terms of tax policy, I think what we have to focus on is making sure that Marylanders are getting the support that they need, that our businesses are able to grow and thrive here in the state of Maryland, and that we have the labor force available, a well educated, a well trained workforce available for employers so that they know that they can grow here over the long term.
Curious about the race to the bottom a little more, how do you compete with other states that are participating in that race to the bottom, particularly if you're trying to build a labor.
Force well over the long term.
What you see is, you know, although Marylanders, if you look at the age brackets, Marylanders may be moving out of state when they're younger, when they're older, we actually see you know, the prime work age workforce age Maryland people moving into the states. And that's because of our schools, It's because of our opportunities, it's because of our housing stock.
Those are those folks are finding their way to Maryland because of its reputation for being such a family supporting state, and so you know, that's where we have to focus on making sure then that those Marylanders are can find the housing that they need. Right, I think where I would focus is on making sure that the housing is available so that people can grow here, thrive here, and then retire here as well.
Controller I want to talk about federal government employment because a relatively large portion of the state compared to other states, works for the federal government five point seven percent of Maryland total of total Maryland employment compared to one point nine percent of total employment nationally. Obviously, that's good for stability because these government jobs are stable. But I'm wondering what the down sides are of having so many government workers.
Since those jobs are so stable, doesn't mean the working population doesn't necessarily have the same rate of people going and starting their own businesses of entrepreneurship. Talk to us a little bit about that.
Sure, you know, we haven't seen that in Maryland. We're very fortunate to have I think this high federal employment, although it sometimes does get a little dicey when the federal government might shut down, but you know, for the most part, it's a real boom to Maryland, and we're really excited to be welcoming the FBI headquarters to Maryland in the coming years because we have such a robust series of research universities in the state as well, including
of course JOHNS Hopkins, the University of Maryland System and more Morgan State. We have a number of entrepreneurs and ideas and sort of that's that are coming out of those universities. We see enormous tech transfer possibilities. We also are really fortunate to have, you know, a large number of immig grants in the state of Maryland, and we see a number of immigrants who are great entrepreneurs opening businesses in the state as well.
Com Schuler, with the type of fighting a few hill that we've been seeing coming out of Congress, do you share a concern with so many federal workers being in Maryland of a risk of a government shut down.
Absolutely, you know, it's for so many reasons. A government shut down is irresponsible and challenging, you know, certainly globally, but.
Here in Maryland it is as well.
You know, those workers are having to go to work and they're not getting paid, or they're not working and they're not getting paid. It's incredibly challenging. Over the long term, they do get paid, and so the revenue does come in both to their households and to the state. The most challenging, one of the most challenging times that our economy has had relating to the federal government was actually
was actually after a sequestration. We saw real challenges after that because of the long term effect that sequestration had.
We only have about thirty seconds left. But you were a Democratic delegate back in twenty sixteen. I got to ask you a national question about the Democratic Party. Why do you think there haven't been more competition from within the Democratic Party against President Biden given the challenges that he faces for reelection.
President Biden and the Democrats in Congress have have passed more important legislation in the past two years than I can remember in you know, decades. I mean, from the IRA to the Chips Act to the Infrastructure Bill. I mean, the legislation that has come out is in phenomenal and it is game changing for not just the state of Maryland in the coming years, but really for our country and so you know, I just think the progress that has been made under the Democrats, it can't be denied.
And our economy has grown as well, and so I'm excited about what's happening.
Controller, thank you so much for joining us. That's Brook Learman, Maryland's Controller, joining us from Washington, DC.
You're listening to the Bloomberg Business Week Podcast. Catch us live weekday afternoons from two to five pm Easter Listen on Apple card Play and then Bright Auto with a Bloomberg Business act or watch us live on YouTube.
Plenty ahead in our second hour of the weekend edition of Bloomberg Business Week, including the well known hedge fund giant who is no stranger to social media and who made his way up the annual Bloomberg list of the best paid hedge fund founders. We've got the details on Bill Ackman's big twenty twenty three pay.
Day from hedge funds to hogies. Why the billionaire family behind the iconic South Jersey chain Wahwah believes they can mirror the same cult status in other states. Bless Our Bloomberg Pursuits team on veils the eight secrets learned working as a butler at raffles Singapore.
It's a pretty amazing list and that includes whether it's memorizing how you sleep or sourcing toilet paper in your favorite color. The hospitality gurus at this historic Singapore and hotel have mastered the personal touch and by personal times we mean really personal.
That's true. Well, first up this hour. More signs of a rough road ahead for the EV space. The electric vehicle makers Rivian and Lucid both out with earnings this past week that sent their stocks dropping on the news. Rivian also cutting ten percent of its salaried staff as its output forecast misses. Lucid's production outlook also disappointing.
Yeah, it's been a rough go so far this year for electric vehicle adoption. Rather than muscling aside gas guzzlers, sales of fully electric cars this year are set to grow at the slowest rate since twenty nineteen. This is, according to Bloomberg NEF, with the unexpected stall in momentum intensifying competition.
In fact, Ford cutting the price of its electric Mustang mock Ee by as much as eighty one hundred dollars after its sales tumbled fifty one percent in January. That was when Ford had to stop offering tax incentives on the plug in model. Ford also cutting production of the mach E and the F one to fifty Lightning plugin pickup truck. So a lot has changed in a very short time.
Yeah, it does feel like a one to eighty in terms of the expected ramp up to EV adoption. All right, So where does that leave the crucial component for evs. We're talking about the chargers. After all, without chargers, there are no evs. So for that, we checked in with Brendan Jones. He is president and chief executive officer Blink charging company. Customers include Alphabet, Amazon, AutoNation for GM, hotels and cities around the country.
Well, you know, despite of what we see as some cuts from certain OEMs, we're still seeing an overall increase in the market. The US had one point three million EV sales last year, and if you were a single OEM and you had one point three million sales, that would be outstanding, and even bloomberg yourselves, you still see an increase. In twenty twenty three, we're fourteen million, you're projecting sixteen point.
Seven million next year.
So while it may slow down a bit, the industry is still moving forward. And progressing. There's gonna be some structural adjustment, but we're still seeing thee have invested, you know, north of seven hundred billion dollars in EV platforms, and those vehicles are still coming to market.
Some are going to do button than others. Others need price adjustments.
We still need the cost of the battery to come down a little bit to get parody with internal combustion engines. But all that is happening, so we remain optimistic. Maybe a little slower, but when we think about the gap between EV sales on the vehicle side and the need for infrastructure, there's a lot of ketchup work to be done on the infrastructure. So we see nothing but increased orders and increased revenue for Blank.
Increased orders, increased revenue for you guys, but at a slower pace. Is that the kind of reset to be fair, Brendan.
Yeah, it may be just, but we're going to be very cautionary at a slight pace. You know, we just announced a couple of days ago that we're going to hit one hundred and forty million in revenue.
That's an astronomically high number.
From where we were three years ago when I joined the company to structionally adjusted the previous year revenue was just two million dollars, and now we're at one hundred and forty million dollars and we're going to I can't and I wouldn't predict that we're going to see that same growth factor because a lot has changed in the intrim. But we still see growth. And when we give guidance out after March fifteenth for twenty twenty four, you'll see those in our numbers.
Yeah.
And to be fair, that twenty twenty three revenue that you said to surpass one forty the consensus on the street was one thirty two point thirty three million. Your stock was up more than thirty percent, more than thirty two percent, to be fair, when you reported earnings and gave that outlook. That was back on February fourteenth. Happy Valentine's Day everybody.
Hey Brendon, what is holding back customers in the US from widespread adoption right now? Is it purely cost?
Cost is an a element, but we see some lower price models coming in perception, we have to really improve the dialogue. I mean, the benefit of an EV is really that you can plug it in anywhere.
But when you look at the share of voice.
When we talk about EV infrastructure, it's really a lot on public base DC fast charging when reality, according to all the data, ninety to ninety plus percent of the charging is going to be on level too charging that is either in the home or the workplace, or the apartment building, the multifamily dwelling, the doctor's office, and it's much easier to install. But we have most of the public holding back waiting for that visible sign to see a DC fast charger. But we got to break that myth.
That's the old paradigm. The new paradigm is charge anywhere. And unfortunately, as Americans, you know, we think we use our car more than we do. But the DOT has had consistent stats for the last thirty years. They sit ninety five percent of the time charging where they sit. It's more economical, it's less capital, it's easier to do, and we can put more poor out there.
Well how much, I mean, how likely is that broader pivot towards the slower level two charges, which is what you guys focus on if plug in hybrids gain share. I'm just curious how you see it and the need for that fast chargers become less critical so give us an idea if you see that broader pivot, it's still yeah.
If you look at our portfolio today, I'll give you that is that as an example, and we have hybrids that are charging on our chargers every day, we will maintain that ninety ten split. Ten percent is going to be DC and ninety percent is going to be L two. Well, we think that's healthy. That's globally right, because we're not the United States based. We're in Europe, we're in the United States, we're moving into Southeast Asia, we're in Greece already, we're globally.
We're in twenty seven countries that we have today.
So we have the benefit of seeing where the future utilization is going to be, especially in the European countries that they've already structurally adjusted, and utilization on our chargers there is way up compared to the United States, and eventually that's going to come to the United States. So hybrids that are coming out have now a dependency on just being electric, and that dependency on being electric is going to drive the need for charging.
When do we get to a point though, where we see pure we see evs or as easy to charge as an internal combustion engine vehicle.
Well, I think you know we're getting close now with the paradigm, and you're talking about in terms of speed when you're talking about public charging, right.
Speed would be great. I was just thinking of a number of places you can fill up your tank versus number of places you can fill up your battery.
Right, So we're heading there, but again, remember it's a different paradigm, and that's what we have to keep in mind. You know, I worked for many DC fast charger companies in my past, but I did all my charging at home and at work because that's what the charger was, right, So I was always full.
Was it a DC fast charger at work?
There was a DC fast charger at work, but I didn't need to hook up to it. It costs more money, it's more expensive to operate. I just plugged into the l too.
And just so we are clear to everybody out there. Level one charging is one hundred and twenty volts, takes you know, between twelve hours in a full day, so you can do that one at home. You could do level two at home as well, three to eight hours. Level three is four hundred and eighty volts, and that can charge something in thirty to sixty.
Minutes, depending on the car and the architecture. Okay, and depending on the charger itself, because it might only be one hundred kilo loot DC fast charge, it could be a fifty or thirty right, so, and then the battery has to have a speed which it'll accept the charge. So, you know, we look at a lot of the generalities is the high end and say that's what it's going to be, but really it's going to be somewhere.
In the middle.
Brendan though, how going back to kind of we've talked a lot here at Bloomberg, Our team kick Notton and others have really done some great reporting on the uptiket in those hybrids rather than pure evs. If you will well that pivot, if that continues, how do you assess or describe that impact on your business or how does it change the outlook?
We don't think it changes that greatly, but we really don't see that as a long standing thing. And here's the reality. China is moving to peer evs, Europe is moving to peer evs, and a lot of the European manufacturers are pushing peer ev strategies. In the US, well, you might have some slow down. The US is heading
in this direction. Hybrids already exists, so those power plants are no but in the end there are a horribly inefficient plant power plant because you're running two different systems in a car, and that is suboptimal by any engineering standards. So eventually it's going to give way to your electric.
Vehicles really quickly.
Thirty seconds. Who are your biggest customers? Who's buying it most? Is it municipalities, is it the automakers, is it Amazon?
Who is it?
Real quickly?
Great question, and it's actually all of the above. Now.
The biggest booming part of the space is fleet. Both municipal and commercial fleets are buying chargers night and day all over the place right now. But also we're doing a strong book of business with healthcare, we do it with hospitality, we do it with long dwell times. So it's pretty consistent.
In the shift. And we're seeing orders.
Increase, not decrease, got it, So we're pretty autimistic about it.
Always good to check in with you. Brendan Jones, President and chief executive officer of Blink Charging, joining us from Washington, DC.
You're listening to the Bloomberg Business Week Podcast. Listen live each weekday starting at two pm Eastern on applecar Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa Play Bloomberg eleven thirty.
So last week, I get any email from my insurance company about renewing my auto insurance. You get this every six months, Well, I canna buy.
A year of insurance.
By the way, this happens every sixs.
You can't buy a year of insuran.
It make me do it every six months. This email was different, though. One thousand, nine hundred and eighty four dollars and sixty five cents for six months of auto insurance. Yeah, okay, three hundred and thirty dollars a month, up from seventeen fifty just six months ago. That's a thirteen percent increase in just six months. Okay, that's crazy. I email my insurance agent asked him what I could do change my coverage,
raise my deductibles, anything to get the price down. A few minutes later, he emails me back and he says, yeah, it's ugly out there.
I think you need a new insurance age.
He's a broker though, like he has he has the view everywhere in the market.
I'm telling you I could buy a policy for a year, no problem.
No, there are companies now in New York that don't even they don't even write insurance in New York, New Jersey. It's a mess out there, all right. So, the couse of auto insurance in the US rows more than twenty percent, and twenty twenty three, it's the biggest annual jump since nineteen seventy six. That's according to data from the US Bureau of Labor Statistics. Rates are up with thirty seven percent CAROL since January of twenty twenty.
All right, Well, in the forthcoming issue Bloomberg BusinessWeek, which is at on newstands tomorrow, already online at Bloomberg dot com slash business Week also on the Bloomberg Bloomberg News, auto reporter Keith Naughton gets at the reasons why insurance has gone up so much in such a short time. He joins us on zoom from Detroit. So glad you are back with us to talk about this story. What the heck is going on? And how can we help them?
No, but what can help me, what's going on, Well, there isn't much hope for any of us on the auto insurance front. To complement Tien's story, I was talking to another editor at Bloomberg Today who lives in New York, and he said the insurance premium quotes he was getting on his new car were five hundred dollars a month. So it's like having two car payments on the same car.
Oh my god, why yeah?
Yes.
So the why here is that cars are just loaded with more technology now to help you avoid accidents, and those technological bits it's cameras and sensors and sonar from bumper to mumper on the car, really drives up repair costs. And then those repair costs are being passed on through your auto insurance rates, which are skyrocket.
If you have Keith tired interrupt. I just want to make sure I get this point. If our cars are filled with this technology that helps us avoid accidents, shouldn't we be getting in fewer accidents and therefore there should be fewer repairs and insurance companies wouldn't have to pay out as much.
Non basically drives itself. It's so much safer than rather me driving it to be quite honest.
Yes, that's way too logical. That's exactly what should be happening but is not happening. And in fact, what's been happening since twenty twenty is auto insurance claims are going up, not down, despite all this whiz bang crash avoidance technology that today's cars are laden. The reason behind that has
something to do with distracted driving. We all have our phones in the car, or if you're not looking at your phone, which is illegal in New York and many other states while you're driving, then you have this big touch screen in the middle of your dashboard that you're glancing over at or touching or you know, focused on instead of the road. So accidents are up, fatalities are up. It's the safety technology. It might be helping us survive crashes, but it's not reducing crash.
I'm just going to tell you guys. I even get a dividend check at the end of the year from my insurance company, which I've been with for almost thirty years since I was a teenage driver on my dad's policy and I kept it. And then when they have a good year, we get a dividend check.
So I'm going to wait to time. Oh, it's just I'm sorry.
You should check to see how much you're paying though, because I bet it's a lot.
No, I do look, but I will check again.
It's kind of wild, and you know what I'm worried about is and well, wait a minute, I'm going to go on my soapbox for a little bit more here, Keith, because I do feel like I wish, I wish like traffic cops actually police driving to you, because I do feel like driving has gotten more aggressive. People fly through stop signs, Like I just feel like there's some stuff going on that it's kind of the wild wild West on the road. But I don't know that that relates
to your story. But I just feel like people are a little crazy on the roads today. And maybe that's why when an AX they get in an accident and they're also distracted. There's a lot going on, and so then it's just going to cost more.
I don't know, cal And that's why auto insurance companies now, some of them offer you the option of, you know, attaching and device to your car so they can monitor your driving. And if you prove to be a good driver, like I'm sure you would, Carol, then you actually get a reduction in rates. So but but that rage raises sort of privacy concerns. Lots of folks don't want their insurance company knowing everywhere they're going at all hours, so people decline that. But that is one way to try
and reduce your rates. But rates are climbing. I did the same thing Tim did last year. I looked at what I was paying and I couldn't believe it, and so I started shopping around and found a cheaper rate. But it's getting harder and harder to find a lower rate because all of them are going up. And the insurance companies are not only doing it because they have higher repair and crash costs, but also because they are now making a lot more money doing that.
I'm glad you bring up the more money part, because it turns out that insurance companies are doing pretty well right now. So Travelers closed at an all time high earlier this week. We learned from Progressive earlier this week that profit for the most recent quarter more than doubled from a year earlier.
So maybe they're charging too much.
If their profit is going up that much, that means obviously, even we have an accident it's not clustering that much. Even whatever they pay.
Out, I don't know, I mean, what are we logically? It turns out that you know, we're all paying for like, it's pretty good to be an investor in some of these companies, Keithan, Perhaps not so good because we're paying so much as customers, right, And it's.
Not just that the insurance companies are gouging us. There really arenes goodness reasons that it costs more. Let me give you one example from my story, and that is the Toyota Camera. So that was the best selling car in America for decades, and in twenty eighteen, Toyota redesigned it and added a whole bunch of driver assist features technology radar, so onar cameras throughout the car. But just looking at the front bumper assembly, it went from having
eighteen parts to forty three parts. And so as a result, you get into a relatively minor fender bender with a Toileta camera. And I'm not picking on.
Toyota, this is cars.
But this particular example given to me by the folks at Mitchell International, said, what that did is it drove repair costs for the camera. When you get in a front end collision. It drove them up by forty three percent.
That makes sense, yeah, Keith. One thing that was so shocking to me about your story was the difference with EV's and you bring up the Hurts issue. We only have about a minute left, but talk to us about how much more complicated evs are to repair and why that's also driving uprates.
Right, and our Hurts is selling off a big chunk of its EV fleet and one of the reasons they cited is that EV's cost twice as much to repair as regular cars. One of the reasons is that big battery tim that's in every EV. You have to disconnected, power it down, or in some cases remove it altogether to avoid injury to the technicians, to avoid fire risk. And this just adds time in the repair shot and cost unbelievable.
There's also an interesting part of your story where you talk about a new all this new technologies also added a costing step to the repair process. It has to do with calibration, which is you just understand, you know.
I got to calibrate the sensors. It costs five hundred bucks more to do that.
When you get a right, Yeah, it's amazing.
Thank you for this story. I sent it to my whole family because I was complaining to them about insurance recently. So it turns out I said a lot of key stories to.
My whole family.
It's a street Yeah, it's like he writes about cool stuff.
It does and it makes so much sense.
Keith.
Thank you, Bloomberg News Auto reporter Keith Not as we said, go.
Check out how much you're paying for insurance.
Thank car Insurance.
I know, I just saw the bill come in. Yeah, well, husband just kind of slides it away, so maybe maybe wait.
To see it.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple card Play and then brought Auto with a Bloomberg Business app or one just live on YouTube.
No doubt about it. We love lists here a Bloomberg, especially ones that track investing prowess the best. Also, we like to keep an eye on wealth accumulation.
Yeah, those are a couple of things that I think it's fair to say. Just type in by the way, rich go on the Bloomberg terminal. That's how you get to the Bloomberg Billionaires. Index. One list that taps into both is Bloomberg's annual list of the best paid a hedge fund of founders from more on what is the most read story on the Bloomberg today and who took top honors. We welcome Bloomberg News Hedge Fund reporter Emma Palmer.
She's here in our Bloomberg Interactive Brokers studio with more on her story that she wrote along with a Bloomberg's Tom Maloney. Hemma joins us now in our studio. Hamma, good to have you with us this afternoon. Do I do a drum roll?
Kiroll?
Is it?
Or do a drum roll for I don't know?
Ask Hima, she's the expert.
I mean this is a thing. Okay, ye, drum I'm doing the drum roll now. At the top of the list a man who likes to tweet and a man who didn't do much with his fund last year.
Yes, so really interesting. We're talking about Bill Ackman. Of course, he has been all over Twitter recently and he is number seven on our list, which is the highest he's been since we've done this ranking. And what's interesting is he took home six hundred million dollars after basically just sort of adjusting his portfolio of ten stocks kind of on the margins. He brought down one position a fair bit, but in general it's a highly concentrated book and it's
worked out well. The fund was up almost twenty seven percent, but they didn't do a whole lot to it recently. A chunk of his gains did come from the fact that it's a publicly traded Pershing square holdings, and so that helped him a great deal too.
A good third of his money came from there.
Yeah, you know, it's interesting when I was looking over this list, take a step back for us, how do you put this together? Because your methodology in this story there's a nice like a big long explain. Yes, there's got to be a lot of stuff you have to go through to figure this out.
Yes, so Tom Maloney is my colleague on the story. He is the wizard behind doing all the calculations, and so we do take our time to get all the right imports, assess how the fund did, look at their public filings, assess who gets what stake of the fees and his ownership stake. So you can read the nice, very thorough methodology at the bottom of the story, but it does take a minute.
Well, the reason I do ask is how much is performance, how much is fees ultimately and how much these dudes make?
Yes, and so they were all dudes.
They were all, yeah, I don't think we've ever actually had a woman on this ranking before, not yet.
That makes me sad, But go ahead.
So if you look at the story we do show you, for example, is the Englander. He made two point eight billion dollars. We divided it up as to how much he made on his gains in the personal investment in the fund, and then how much just comes from the share performance fees. You'll see across the board most of the money is coming from the funds performance, but I
mean it's not unsubstantial. Which took nearly a billion dollars just from fees alone, Ken Griffin one point one billion dollars from fees alone, so it's it's tefty.
Still, what's the fee breakdown traditionally versus what it is right now? I mean two and twenty is what you hear about with hedge funds, but it's a little more complicated than that.
So it depends on the fund.
If it's a big name fund that everybody wants to get into that has strong performance that you can charge two and twenty or sometimes two and thirty, or Element charged as much as forty percent performance fee. They bump the bump that up, so then you can smaller emerging
newer funds typically bring that way down. The multi manager funds, so like a millennium of Citadel, they haven't passed through, so they pass on a lot of the costs, like compensation leases a whole bunch of stuff to the clients, so they pay for that.
Does is the management fee included in performance fee?
The management fee and the performance fee? Are you mean for multi shot specifically, Well, no.
Just for when we look at the top fifteen.
Or top fifteen.
So we in our methodology we assume that the management fees go towards managing the company, so we do not factor that in the performance fees are what we look because these firms do charge your management fee to help like keep the lights on.
So is the billionaire lights.
Keep the lights on? In the jets fueled?
They go, yeah, what's filed?
Is it?
Like when I look at Bill Lackman and Pershing Squares equity bets, like I guess for sometimes I always think, oh, it's all these sophisticated investment strategies. A lot of times it's just plain old stocks.
It's Chippotele, Alphabet Hilton.
Yeah, I know names we know.
Life's kind of fascinating ones that have been, you know, on a run. Having said that, I am curious like some of these names. Obviously Bi Lackman we know because he is pretty out there when it comes to social media, and we often have stories somebody like the TCI Fund Management's Chris is at home Chris Hohne. Yeah, so tell us about him, because it's not a name we talk about regularly. But he earned a lot on just ten US stock names.
So yes, so ten US stock names. He may have a few others that are international that we don't see in their thirteen F filings, but regardless, he runs a very concentrated long bias portfolio, so mostly longs versus shorts.
He did, he did very well.
He's been on our list almost consists, I think every year, if not every almost every year. He made nearly a billion dollars. Last year his fund was up thirty three percent, basically the best performer of the group on very concentrated bets, they're sizable, and most of his money seven hundred of his nine hundred came from the games on that fund alone.
So wow, Yeah, do you want to be in a position as a manager to have, like I guess from a client's perspective, somebody like David Tepper, who's two point three billion dollar pay day last year, Yes, came almost one percent from personal investment versus fun performance. Like who do you want to be?
Like?
What does the mix? What's the mix you want?
That's a very good question for Tepper, I would say, because he's he's returned a lot of outside capital.
He still manages some so but it's smaller than he used to.
So he's getting fewer fees just from that alone, and he doesn't charge himself fees.
So I think it depends.
I mean, the people talk about the multi strategy model a lot. The clients complain about it a lot because they pay for so much and it's so expensive. But then you have a year like a couple of years ago and siadel was up thirty percent NETO fees.
But this year.
The reason they're under a bit more scrutiny right now is because they tend to be in leverage bets they tend to They have had like mediocre performance last year, so it's been a little bit rougher recently.
How much does this list change from year to year in terms of the top ten or fifteen?
So I would say you see a lot of the repeat names. Yeah, do they shift around? N is You do see the shifting around. I think Ken's a little bit higher, yes, than he was before. Actually, no, that correct that Ken was number one last year. He made I think like three or four billion dollars number so number two this year. But you do see a lot of the same repeat people. But we have seen a number of.
Names fall off the list. So after twenty twenty.
Two the Tiger Cubs struggled. We talked a lot about ris funds going through a lot of pain. They have to make up those losses, and so the reason why you don't see Chase Coleman or someone on the list is because they're trying to get themselves out of that hole.
Wow.
As we said, the most red story in the Bloomberg Today. Im a Parmer hedge fund reporter at Bloomberg News. Be sure to check it out at Bloomberg dot com. Joining us in the Studio.
This is Bloomberg.
You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on Applecarplay and Android Auto with the Bloomberg Business Ad. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa playing Bloomberg eleven thirty.
Here's a fun little exercise. Find someone from Pennsylvania for Southern New Jersey and ask them about wah Wah and then just sit back and listen. Don't say anything, or just listen to the celebrities. Kate Winslett called it a mythical place. Tina Fey hoisted a basket of its hogies in a Saturday Night Live skit. Harry Styles of All People says it's one of his favorite things about Philadelphia. Wah Wah is not just a place to get gas.
As Jordan Fitzgerald writes, the convenience store chain has built a fiercely loyal customer base by capturing a certain Jennesse quah about the personality of Philly and South Jersey. But now, for the first time, the Bloomberg Billionaires Index is valuing the Wood families net worth that's the family that started it years ago and owns a majority stake. Jordan Fitzgerald is Wealth Team reporter for Bloomberg NUR. She's with us
here in the Bloomberg Interactive Broker's studio. So drum roll, Jordan. The Wood family, the wah Wah kings and queens. How much are they worth?
About six billion dollars?
Okay, that's a lot of hogies, a lot of hogies.
The people got to have their hogies.
The people. So how did you make this calculation? You're on the wealth team.
I have to admit I am not a valuations person.
We have, you know, the.
People who you have people, you have people who do that. Okay, but take us through some of the numbers. Because they do have a thousand locations.
They have a thousand locations. They want to build about three hundred more in the coming years. They're saying it's like their biggest growth push that they've ever done, and they're pretty confident that they can make the wah Wah magic like trans for beyond Philly in Jersey.
You know, it's funny if you think about wa Wah A little bit of detail for you here, Tim, it's not your average a gas station, probably Helifornia.
You never had at a gas station.
It's quite crazy.
I went out to various wah wahs on last Friday and I got lunch at a drink for five dollars. I was like, this is magic.
Well, is that why it's doing so well that you can get that lunch and a drink for five dollars at a time where inslation is just roaring in this country.
I think it's part that. In part you go there and you can get everything you need.
In one stop.
You can get someone gets their gas pumped outside and you can run in and get all your food and coffee.
Needed, especially if it's in New Jersey where you're still not allowed to pump you on.
And you know, I love having my gas.
People like you from New Jersey right now, so I'm going to sit tight. I'm not going to talk about it, but I want to put my own gas. Okay, sorry, Shanela, you're asking.
Why wah wa wai now, I mean, we'll caught your eye about this family and their growth at this point in time.
I honestly can't take credit for that.
I think the numbers people really identified that this was an area for us to focus on and I was tapped in because I am as we established from New Jersey and they were like, we're profiling you to do this, and I said thank you.
So I have to say, as a Californian somebody who has not frequented many wah wahs, I was shocked to find that it has such a following. Yeah, I had never heard of it until I moved to the East Coast. And I'm wondering if the company is going to be able to take what is something regional right now and actually make it grow because there is like there's another
chain down south, BUCkies that people freak out about. I've never been to a BUCkies, but apparently people love it, so like different parts of the country have different things that people like. Is it transferable?
I think that's time will tell.
They've definitely struggled a little bit with that in the past when expanding even to northern New Jersey. They tried handing out Philadelphia Eagles calendars and the Giants fans were not happy. And so, yeah, do you think like that is the thing people are thinking about, like will the wah Wah magic transfer The company's very confident that it will. The employees I talk to really think that they bring a certain level of service that anyone from any part
of the country will desire. But you know, not everyone calls a HOGI a HOGI.
Not everyone might be looking for that.
Well, what are some of the other things that they're doing to try to attract those customers in different parts of the country.
I think they're really just trusting their business model and they're not going They're not seeking California yet. They're really you know, pushing down south, pushing out into the Midwest areas that are border where they already are established and already are successful, and hope there might be I think some regional appeal that can very easily spread.
Okay, Jordan, for people listening all over the country, all over the world right now who have not been to a wah wah, talk about what you did on Friday, what you saw, and share your experience.
Yeah.
I drove to about five different wuah wah locations and observed a little bit, talked to a few people and just tried to figure.
Out like what to try to distill the Wawa magic.
And the employees seem to really enjoy the vibe of that they create. They sometimes when I was talking to an employee or a customer, like people would hear me asking what they love about wah Wah and someone else would jump in and be like their pizza is weirdly good or and yeah, it just seems to be a thing that provokes a reaction from I.
Mean, Shanellie, what about you, like you spent you went to college?
In fact, yeah, I went.
I went to a college very much down the street from a Wahwah, and you know, we were just in the middle of, you know, late night studying.
We would just go get wraps from wah Wah like you would.
You would it would be.
Better than the school cafeteria that was That was the bar high for that though.
That's a good question exactly.
I'm wondering, Jordan, if it has to do with the fact that oftentimes stopping at a gas station to pick something up or go to the bathroom is like not a good experience. Things are disgusting, the staff doesn't want to be there. Did you get a feeling like it's sort of the opposite. It's like it's a family owned convenience store chain and the people who work there take pride in it.
Yeah, definitely, and it's bigger. You can get fresh food there, which you can at a lot of different convenience stores and gas stations. And I do think like they treat their employees pretty well, and their employees put that back into the customer base. They have a really, really large employee ownership program. The employees own over thirty percent of the company.
Wow.
Okay, So talk to us a little bit about the history here in the Wood family's involvement, because they don't own all of it.
They don't own all of it. They own a little over half.
And the chain started in the sixties. The Wood family had been established in Pennsylvania for a couple hundred years, but they owned a dairy farm and one of the science decided, I'm going to open up a convenience store to sell our milk.
And it all started from there.
Do we know why it's called Wahwah?
I did look this up.
Specifically, it is called Wahwah because apparently their dairy farm was in a region of Pennsylvania called the Wahwah region, which is like anous, an Indigenous word for like the Canada goose. So that's why there's a little goose flying over their logo.
I mean, I will tell you right now, people listening who are not in New Jersey or New York or Pennsylvania have no idea what.
We They have no idea, and they're probably a little weirded out. But people who are from this region, I'd be getting emails all dating like, oh my god, you talked about Wallah.
Maybe we can call it like the in and out burger of gas station convenience stores.
Perhaps, but I do think the buckiest folks would take it.
I think about it more like you know, when you're just driving down a long highway and you stop at a rest stop and you have like the Starbucks and the Dunkin Donuts. It's like more like that kind of vibe.
Than it is stopping at it like an X.
Yeah, okay, this is pop scale consumers employee ownership.
That's a big deal here. I mean, that's not something you see with types of stores like this.
No, And it seems to be a thing that they've always done. They seem to take pride in it. They advertise it on their website and yeah. I talked to a while employee who she was twenty years old. She went to Wah wah every day for breakfast at high school, and when she graduated, she was like, I want to spend more time here and decided to start working at WAHA.
Well, I will tell you I emailed this to somebody. She will go unnamed, but she knows who she is. She's very high up here at Bloomberg in the newsroom because she's from Pennsylvania. I said, how many people have emailed this to you? And she said, my daughter was very upset after a softball tournament. All she wanted was a wah wah. You know what I did. I made sure to find the closest wah wah and put it into my GPS and it solved everything. So wahwah, here's everything.
And Jordan Fitzgerald is a fantastic reporter and we're so happy to have her here at Bloomberg writing about woahwah. She's wealtheam reporter for Bloomberger. She joins us in the Bloomberg Interactive Broker's Studio.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple car Play and ed Brout Auto with a Bloomberg Business app or watch us live on YouTube.
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It's time for Bloomberg Pursuits, where the opener is all about the eight Secrets of fancy Hotels. Learn well working as a butler at a super uber Lux hotel in Singapore. Vvip Did you know what that was, Carol? It's a vv ip o.
You guys are vv oh we love you.
That's Chris Rouser, the editor of Bloomberg Pursuits. Also joining us as Bloomberg Pursuits contributor Brandon Presser. Okay, let's start with this. We fly to Singapore in our private jet. Yes, check, you have a separate chet come for your other family Okay? Yeah, and then you want to go to the fanciest of fancy hotels. Chris, what's it called.
It's called the Raffles in Singapore, and Raffles is a legendary hotel more than one hundred years old. It's a brand that is now expanding around the world. But The original is in Singapore and it's literally a national landmark. It sets the bar for service all around the world.
So by setting the service, and that means what everybody gets a butler.
Well, there's twenty five butlers and they each get twenty rooms. So what we did, so we have this thing where we send Brandon to work behind the scenes at extremely luxury locations. So he's been a ski instructor at Aspen, he's been a major d at Nobu, he worked at disney World, if.
You'll recall that one.
So we go send him behind the scenes to figure out the secrets of service at these very very luxury places. And there's no place that has a better reputation for luxury than the Raffles. So Brandon, who has a bit of a personal connection to the Raffles, went to work there as a butler.
That's right, Brandon. I think we have to take it back to what two thousand and three, right, because initially you kind of wanted to be there.
Yeah, it was something that I was considering as a recent high school graduate, kind of trying to figure out what I wanted to do to my career, and I thought maybe to pursue a career in hospitality and do an internship in a hotel. So I actually applied to work at the Raffles i'us Singapore back then, and it was a go and I was all said to make it happen, and then stars hit and everything kind of
fell apart. So this was my sliding doors moment where it all kind of came back together and I got to be an intern in twenty years later.
Okay, so what happened this time? Twenty years later? COVID has hit and now Singapore has over the last twenty years become even more luxurious, where people spend, as you argue, ten times more than the typical wealthy American. Set the scene for us.
Yeah, you know, I think the Billboard takeaway of my experience in Singapore working there is that the new money in Asia just powers over the old money in the West. When we conceive a luxury and we're thinking about what people might be buying, it's a lot of Prata, Gucci's your chanel. But the real interesting thing, and the real sort of luxury braggadosio is actually cars and seafood. Cars are so expensive in Singapore because you have to have a special license to get a vehicle, and there's a
one hundred percent importing tax on the car. So even just throwing your carkis down on a table, even if it's a Camray, people like, oh my gosh, you own a car. Wow, it's more expensive that the house.
Uh.
And then it's seafood. That's the ultimate brag, you know, having your butler. And this is something that we actually did. Had a butler get someone to fish a rare crab out of an obscure lake in rural China and have a ship to the hotel and cook for thousands and thousands of dollars.
Is this the hairy crab?
It's the hairy crab?
Which I had that.
With my pasta last night.
What are you guys talking about? Chris?
As you like I always, you know, the back and forth with you know Brandon. I'm sure he goes and he comes back with take us to one of your favorite parts of this.
Well.
You know what I love is so people are splashing a lot of money around and where the butler's come in is making the magic happen, right, So like so I love this example of there was a twelve year old kid under twelve who wanted to splash a lot of money around. And so the butlers did that. They arranged it for him. They arrange for the local doors or to stay open late till eleven pm. Come on, kids, kids,
of course you know it's thrown up. Okay, but he did go to Toys r US and just buy a whole aisle worth of toys of one hand gesture about six of you know, sixty thousand Singaporean dollars worth. I just love the idea of this butler making this happen a lot of times when you you can get like a one on one assignment. So usually normally butlers have like twenty rooms, but you can get assigned to one person. But that means that you are with them twenty four
to seven. So if they like text in the middle of the night, you got to show up. And these things can involve like real hands on work for example that you often the butler have to take people on tours of the botanical gardens. They have to know all these facts about orchids. They babysit children for you, like all these Like butlers have to do everything.
Okay, Brandon, there are some things the butlers will not do. There are some things will not go there.
Yeah, it's a very discreet hotel, I'd say, so anything that verges into the bedroom activities zone is pretty taboo and they won't help you.
Out with that.
So, you know, the butlers were really keen to share all, you know, kind of the fun behind the scenes bits of all the celebrities that they served, but really there was a prudishness that came into play when when it came to the sex stuff.
Well that said, I wasn't joking about the two families thing, because one story that you do share from the butlers is the fact that sometimes they have to be in charge of keeping secret families separate from one another.
Indeed, there was a man who flew in on his private chat and flew in his wife and set her up at the hotel, and then all of a sudden there was the second private jet and a second wife and a second set of chicks that they probably set up in a hotel in very different wings of the hotel. And never the two shall meet was the on the task at hands.
No family family dinners, yes, no.
Double family dinner. That guest was particularly interested in the casino at Marina bass An. So when the wife was wondering why the husband wasn't returning to bed in the evening. It was actually because he was gambling and he wasn't in either of the room.
We had a similar anecdote from when Brandon went behind the scenes in Vegas, another two family anecdote. And I want to say it's the same family, but I bet it's not.
I have to say some of the absurd.
Go ahead, no, please, I can affirm that it's actually a different family, because I do know the identities of these two families. Are there different?
Oh the secrets, you know, the secrets you know, you know, we tease this story talking about you know, Coca Cola from Indonesia, people bringing in their own washing machine because that's how they wanted they're clothes washed or pink toilet paper.
Yeah, I wanted to play a little bit with the idea of name brand. You know, we're all so brand conscious and we're you know, thinking in the luxury world that it's again you know, the Pratas and the Chanelles, but that luxury that brand faciliation really occurs all the way down to Coca Cola. There wasn't guests who wanted a specific kind of palm sugar in his Coca cola,
and they only produce that in Indonesia. And there was the guests who will only use a certain type of washing machine or a certain type of toilet paper, And I kind of just love unraveling that a little bit and playing with more unconventional brands.
That coke thing is real. People love regional cokes. I will say, I love the the person who would only eat bright red peekaboo pears, which are crossbread on a specific farm in New Zealand. That's the level of neediness that I aspire to.
Good luck.
Do you know my husband likes Mexican coke.
And I'll be like, what are you talking about?
Easy to get relatively at least in the New York City area.
Yeah, exactly.
I have to say I was a little also.
I thought it was interesting how you are Butler's kind of among yourself. We're sharing information, data mining on the guests. I mean you were constantly sharing, like what what they did, were they, you know, sleeping on one side of the bed. I mean, all of that stuff spoke to kind of the high level of care you guys were doing.
That was actually one of the most incredible things with sitting in this all hands meeting where they have the roster, you know, like the great roster of every single guest, and we actually went through every single guest staying at the hotel and discussed all of their preferences if they are left handed, what side of the bed based sleep on, what's the preferred language, and we were trying to figure
out how to enhance the stay. Oh, this guest talks about how he loves book Let's get him a bookmark. This guest loves gardening, Let's buy a book about Singapore and plant It was, it was truly fascinating.
So when you guys do that stuff just real quickly, I mean you just you eat the cost or they eat the cost, right I assume in terms of the catering.
Yeah, so yeah, it is. It is sort of in this well the coffer that we did in too, and and you know, we kind of buy different things. It's a lot of times it's it's food and beverage from the hotel, but it's it's it's fun that it kind of veers into gossips sometimes, like someone had the particularly dirty room, so they need to call into reinforcement, and that's that's the more fun part. It's like gossiping about what people see in the room.
Okay, Well, speaking of food and drink, the Raffles is just a legendary hotel. This is a place where you know, Rudyard Kipling wrote The Jungle Book, Joseph Conrad, Elizabeth Taylor were legendary were you know, had stayed there. The Singapore Sling was also invented there. What is it and how much do they earn from this drink?
Yeah? So I think maybe even more famous than the refels to Singapore is the Singapore Sling. So it was invented at a hotel about over one hundred years ago, and it was actually a way for women to consume alcohol in public because at that time it was forbidden. So it's a very colorful, gin based drink that really just looks like a juice and frankly, it tastes like a juice and it's really dangerous because it's about thirty three thirty four percent alcohol and it's super famous for tourists.
They line up by they open at noon and there's a big line by eleven thirty and people come in. They spend about thirty to forty minutes, they have one or two slings and they go and they make about ten million dollars America US dollars in profit on that drink in one year.
That is crazy, that's Unbelievablenks Well, there are so much rich stuff in this story and there's more in the Pursuit section this weekend. So grateful that you could spend some time with us and our thanks to Chris as well, the editor of Bloomberg Pursuits, of course, Chris Rouser, along with Bloomberg Pursuits contributor Brandon Presser.
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