Goldman Compensation Ratio Hits Decade High

or Bloomberg dot com. You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or stream us live on YouTube and Bloomberg dot com. Alright, the guys, the team, they have been talking about the big bank earnings. We got a bunch of last week, we got some this morning, some key ones kind of getting ready to really wrap up this sector and start

to look forward at other earnings. But we've got to talk a bit more about Goldman Sachs having their worst day in terms of the stock price since this after the bank reported worse than expected net revenue for the fourth quarter. It's compensation ratio hitting a decade high. Tim, Yeah, well, let's see how Alison Williams, a senior global bank analysts for Bloomberg Intelligence characterizes the quarter. She's here in our Bloomberg Interactive at Broker's studio. Allison, good to have you

with us. Now you've been up since the early hours following these Can you say whatever Core I called? Oh yeah, I did. I did have this in the intro. Ever Core I s I. Analyst Glenn Shore called the results they quote un characteristic dud. Do you agree? I listen. I mean, I think I think there are some positive in the results. I think the main negative is costs

and saw them and had sort of signaled this. UM. You know, obviously, as the markets have been tougher this year, analysts have been expecting, including myself, some of the competitive compensation pressures to ease a bit, and that just has not happened as much as we would have thought. I think part of that is the boutiques are hiring. I think that Wall Street has been slow to throw in the towel on UM invested banking fees, even though we've had UM it was like the worst equities year since

in twenty years. UM. It was a tough it was that was a characteristic UM. But it doesn't. Yeah, And so when I look at the revenue line. They're trading. We you know, we look at their trading just to see how their market share is going. That they still earn more from trading than anyone else. That's a for business. It's they've stuck to that franchise even when others have pulled back, they're continuing to gain chair and their advisory revenue.

As as we said, fees are down, like you know, they're about half, but within fees, Goldman is the advisory fee leader and revenue there was much more resilient. We thought. So those are the two positives that they are overwhelmed by the cost side of things and the returns um you know, single digit returns is not something that investors want to say some One of the things I always wondered too is, you know, we had Morgan Stanley right that seemed to do really well. Today. I think of JP,

Morgan b of A, Wells like last week. They're not all apples to apples. We know that. So I guess, how do you look at Goldman's say yeah, they were just fine, or like, how do you characterize it? So I would say it's kind of the bigger, broader backdrop. So so if we look across the core themes. Uh, you know, in general, trade fees were very weak. Goldman did better on that UM and Goldman did better on the trading side of things. So those are their core businesses.

So UM fixed strong equities week, fees week are the themes of the quarter. Relative to that UM, I would say Goldman did a little bit better. JP, Morgan did what worse? Morgan Stanley mixed UM as I said, the costs were really the big negative for Goldman. That that's really negative. We're gonna want to hear more about that investor day, Morgan Stanley. UM, it was really about their wealth business and that interest income, which was really disappointing

last week, holding up better than expected. And of course we know it's all about the act. You know, how are they how do they do versus expectations? And so I think a lot of that is also the setup also relates to how the stocks are reacting. How are

costs still such an issue right now? Allison, because I thought we were at a point where you know, these companies are you know, they're saying okay, well Goldman for example, people right, people getting laid off, and then you know you have other companies out there doing layoffs as well, So it's not exactly you know, end of one in terms of the fight for talent, So it's not. But we also did see, um, you know, we saw the competitive cost parcture. Pressure is also at JP Morgan, um

also at Morgan Stanley. We're seeing it, just not as acute. And I think it is because um, as I said, so, we heard a lot about the Goldman job cuts that did not happen until this year, So that's event they did say, Um, you know, it's something like uh, you know, I want to say four hundred or five hundred million of severance expenses. I don't recall the exact number of hand, but adding to some cost saves and all of that will come into effect this year. They're having an investor

day at the end of February. I think we'll hear a lot more on that and then, um, it's just that, even though there are some pressures using right, the the hiring pressure from fintech is not as acute. Obviously, they're their cost of capital has gone up a lot. Things are tougher there. It's like almost every other day we're hearing about fintech layoffs, right, But macro hedge funds did very well last year, so there's still competition from from

those firms. And then, as I said, if you look at the boutique carring firms and there's a lot more of those companies that are public now. Um, the pressure is still on and it's not like you know, crypto firms are coming out stealing workers like they were a couple of years ago. But I do think about you got an MBA Columbia, like I I think about do people still get an m b A and say I want to go to Goldman, I want to go to

JP Morgan or maybe maybe not? Like is it different so that they do have to compete that much more? I think they. I think they do. But I would say that, you know, perhaps versus a couple of years ago we talked about you know, you talked about crypto, maybe the job opportunity is intact, might not seem so lucrative. Stock options are a little less attractive. Um coming off a year like last year. Um, And certainly the past

doesn't guarantee the future. But um, but but I think that that does, you know, the most recent performance does tend to stick into people's heads. Goldman and JP Morgan will always give statistics about how competitive it is to work for their firms, and certainly across Wall Street, it's the numbers like, yeah, I think, I think, but I do think it might be Goldman or it was it's one of the firms that has given that staff that they're harder to get into than some of the IVY leagues.

So we've heard from four banks last week, two big banks today. How would you characterize in a few sentences the commonalities between how these companies are seeing three in the environment, costs are going to continue to be a pressure and something that has to matter and not just compensation. So we talked a lot about in the last few men's competition but compensation, but there's also inflation and there's also technology spending. Um, you know, banks have to invest

to compete. But then there is this question of business mixed. So net interest income, even though there was some disappointment in the guidance, some people were disappointed, still growth, they're still expecting very good growth in net interest income after amazing growth that we saw. So yeah, so there's there's sorry, Like there's a pretty big top line to fund that bottom line. But I think the differences who has you know,

the companies that are more Main Street versus Wall Street. Right, so mainStreet interest income, there's a lot more to fund those costs. That makes your overall profitability look better. JP Morgan had huge costs increases last year, huge investments and still managed to meet their over the cycle return on equity tangile equity target, whereas Goldman Sachs, which is much

more focused on the markets. Um. You know, they kept saying on their call several times today, it's it's the first time in a few years that we saw equity and bonds both get hit like this, you know. Morgan Stanley CEO also say talking about like how many years has offend since we saw this inflation, since we saw war. So tough time for capital markets, tougher time for the two that we reported today. So smart. Alison Williams, Senior

Global Banks analyst for Bloomberg Intelligence. Right here in studio these is Bloomberg Business Week with Carol Messer and Tim Stenavic on Bloomberg Radio. Well, the forty one year old Winkelvoss twins I believe it's pronouncer Win also known as Camera and Cameron and Tyler Uh. They went head to head with Facebook founder Mark Zuckerberg, and they are now part of the crypto collapse conversation. Now they're going after

a lot of others. I feel like this story just as a reminder tim of kind of all the cryptic kids out there saying I didn't do it, I didn't do it. Well, that's exactly what Max Chafkin, Bloomberg Business We calumnist writes about it. He notes that the winkel By are the latest crypto founders to dodge blame. Let's get into the story. We got Max on zoom along with the editor of Bloomberg Business Week, Joel Webber. Joel's

with us in our Bloomberg Interactive Broker's studio. Joel. It's it's all good in crypto when the price keeps going up. All good, all good, and then it gets just more entertaining, I guess. Uh. And and look the winkle Vye plural um boy. They just I love them so much, like it never gets old. Uh And obviously um yeah they we we know them for for their Facebook days, but

the crypto stuff. They went all in on crypto. They went talking their band, Well there's the band too, And but they you know what Max, Max right, fall off your chair. They're laughing. Um, is that you know they're in a they're in the spotlight. Now they've got um uh sec breathing down them and they have chosen to

go scorched earth on everyone. Yeah, and we're seeing this a lot from from the world of crypto basically, uh, you know, starting starting with standbank than free to of course dropped aw sub stack uh last week Uh, kind of going down the line and the winkelvye uh bosses it. It is kind of one of the richer ones, just because they spent you know, basically the last few years when they weren't rocking out in their band um, which

is topic we should we should, we should explore. UM. They were talking about just how sober minded they were. You know, they had these ads um that that you know, we're all over New York that said the revolution needs rules. They were talking about how they were the only regulated crypto exchange UM, which was true, um, although they weren't

regulated in every aspect. And this product Gemini Earn, which you know we Business Week wrote about this and similar things two years ago as as a potential area of you know, exposure regulatory risk and so on, and you know, the SEC has been investigating, and of course they finally moved Cameron and Tyler, the two Winkle boss Brow There's are acting as if this was sprung on them. This was some kind of uh you know, political act by the SEC, which I'm sure you know, I'm sure on

some levels political. You know, we're talking about the government here, um, But this is something that was a long time coming. This is not a surprise. The SEC had gone after very similar groups, including one that the Winkelvoss you know, had invested in. Uh So, so I don't think we should be surprised by this at all. Okay, So, Jim and I earn actually is the root of where the current ire is directed. Right, So, so what what's going on there? What? What do they what do the government

say they were doing? Well, the government has gone after Gemini, which is the Winkel Bross Voss brothers, and Genesis, which is Barry Silbert's digital currency group is the is the parent um and they together, according to the government, we're basically offering on registered securities. What they were doing is offering this product that kind of looked like a bank account. They would sort of talk about it as interest rate and and talk about it as a you know, competitor

to like your savings account. Of course the interest rates were much higher. It was not a bank, and as the SEC is saying, you know, it was not security either, and and so that's that's where we are now. So I guess the question is what happens since all these folks are kind of like, you know, I don't even want to call them frenemies anymore. They're they're really going after one another. And these are people who were, you know, in the world of in the context of crypto, you know,

quote unquote longtime partners, Max. How do you see this kind of thing shaking out? And it's also is this kind of when in the early life cycle of new technologies, because you've written about this this a lot in your books and other things, is this kind of how things work? Well? I do think they're parallels here in terms of the like the approach that that these crypto guys followed to

two Silicon Valley um. You know, when I think back to Uber right where Uber basically rolled out this um service that was largely illegal, uh, you know in most localities and essentially dared regulators to make it legal. Um. And I think the crypto guys, including the Winklevoss brothers,

basically did the same thing. And and they have been in for years kind of maneuvering and trying to create basically trying to romance uh DC while also maybe putting pressure on d C, playing regulators off, you know, off one another. We saw a lot of this from Sam bankmun Freed. And now that the music has stopped, now that we've seen some serious issues, we have a real slowdown. We have you know, you know, investor pain that you know,

people lost money that who probably didn't deserve it. Um. Now that story is getting harder, and I think that's part of why they're getting more aggressive, basically looking you know, hopefully the government will focus on the other guy. That's that's the basic idea here. You know what, Matt, I'm curious Max, rather, is there something generational you think going on in terms of kind of a younger bunch of folks in this industry and and very involved in developing it.

Is there something like I said, generational that causes so many to say I didn't do it, you did it, or or just point the finger and it wasn't. I mean, I don't know if it's I don't know if it is generational, or if it's just a response to like, this looks bad. I mean, you know, you've got I

don't really know. The Winklevoss brothers kind of frame their company as this super safe, super secure thing, and now you have customers, hundreds of thousands of customers who can access their money, and so I don't I think maybe strategically, you know, this is their their only option is to try to try to pin it on somebody else. We've you know, we I've talked about this, I think on this show earlier. You know, maybe it's this SECS fault.

Maybe it's Sam Meg than Free. It's fault. It's gotta be somebody's fault, as long as it's not me, um. And I think really that's to deal with the brand damage that they've caused themselves. And and you know, and this is of course some of this stuff Um the Winkle boss Uh brothers could not control. However, when you promote something as safe and which which I think they did, and you and your customers lose your money, I mean,

I think it's reasonable ask you know what happened. Okay, what I really want to know, Max has how much of their bands music you listen to to to report on this story? You know, I did not suffer that much, I'll say, but although I have listened listen to some tunes, I guess this was part of a you know, n f T promotion scheme. I tried to figure out, like, were they paying their uh the audiences because the music

sounds so bad. It's hard to imagine somebody like going to you know, you know, going to the show on purpose. They're they're billionaires and and maybe it's possible I guess that the allure here was like, Wow, we're going to see these like cryptomobiles pretend to be rock stars, and uh, it's hard to imagine that would draw huge crowds. But

either way, I mean, it really feels unfortunate. It feels like at a time when they really should have been paying attention, you know, to things like risk and and you know what they were doing their money. They were you know, rocking out, and we all need to rock out sometimes, I guess, But but again it's not the best look at this. Okay, if I was going to rock out, which cover would you recommend uh that I check out first, just quickly the journey. Don't stop. Believe

I was hoping. It's a little it's it's a little bit. I'll be back in, but we'll put We're gonna put out the link alright. This, by the way, is today's Bloomberg Business Week daily newsletter. In the newsletter, it's also in the upcoming new issue of Bloomberg Business Week. Thanks to Max and to Joel. You're listening to Bloomberg Business Week with Carol Messer and Tim Stenovic on Bloomberg Radio. One is raising money at an ever rising valuation, the

other has been pummeled by the market. One as a highly capable number two exact keeping it on track, the other under fire about succession planning, What are we talking about? SpaceX and Tesla. First of all, that's what we're talking about, and they both count elon Musk CEO. Here's here's the thing, though, Whereas Tesla has withered since the Boss embarked on his takeover of Twitter, SpaceX is flourishing. Some even suggest this is because of, rather than in spite of its CEO

playing a less active role. These are all the words of Lauren Grush she's a blue Berg News space reporter. She's got any feature out today, it's a fantastic one, talking all about what's going on at SpaceX and the success that the company has had of late and even over the last few years. She joins us now via zoom from Austin, Texas. Lauren, good to have you with us this afternoon. So why is SpaceX doing so well? Well? I think the biggest thing is that, you know, SpaceX

has really well positioned executives. They have a very capable president and CEO, Gwen Shotwell, and they also have a lot of vps that are already in place with these various big projects that they're working on. I make a note of Mark Jenkoza recently took over Starship, which is SpaceX is big, big program to create a massive new vehicle to send humans to the Moon and Mars. And

it's not just Mark. There are other vps that are, you know, in key positions that that standardize the workflow and make sure the company is running and Elon isn't isn't around, you know. It's so this is such an interesting story because I do feel like is this almost a b school case study of like Okay, here's what Ellen can do when he puts you to certain people in charge, because he has so much under you know, his umbrella at this point, Um, what is interesting about

the executives who brought them in? Was it all Ellen's doing? Yeah? I mean these are handpicked by Elon and and let's let's be clear here. I mean this isn't to say that Ellen doesn't have a profound influence on SpaceX and SpaceX culture. I mean he is the one at the set it in the article, He sets the long term vision, the long term goals. I mean the express purpose of SpaceX is to get some Mars right, that is still

very much the long term goal of the company. And when it comes to various design design decisions, you know Ellen makes puts his stamp on those things as well. Um, you know the push to reuse rockets, um, you know, even he and that, and it also has a lasting impact on the design of certain vehicles. Right. One former employee was telling me that, you know, there there were plans to propulsively land the Crew Dragon, and while that was scrapped, those plans are still in the bones of

that vehicle. So space So Ellen still is very critical when it comes to guiding the company and also the people that he puts in charge. But when it comes to the day to day interactions the design and you know, scheduled decisions, that's where um, you know, he's not as

necessary to make move those things forward. So how is And I know this is a story about SpaceX more so than it is about about Tesla or about Twitter, but but how does that management style differ from what Musk shows at the other companies that he's at the

helm of. Well, I'm not as well versed in Tesla, but I have been following the Twitter stuff, and a lot of the company employees that I spoke to say that, you know, watching the Twitter stuff play out online, and the me feels very similar to some of the things that happened at SpaceX. Is a lot of chaos when it comes to meetings being scheduled and then canceled. Also, um, you know, just him inserting himself into things and making demands.

You know, there was a lot of talk about how he likes to make design decisions that you know, create all of this work, like something might have too many wires. He's always in service of simplifying design, whether or not that that is actually helpful to the design at the in the long term is up for debate. But you know, he likes to come in and say, you know, let's get rid of this part, let's get rid of this component, let's get rid of these wires, and then that creates

a lot of work for people. And then sometimes that stuff needs to be added back in at the end of the day, and and that work will have all been kind of reversed in the law. So Lord, can we go as far as to say, um, the folks at space X are kind of happy that he's been

distracted with Twitter right now. Obviously didn't speak to every single employee at SpaceX, but of the people I spoke with, yes, there is a general sense of relief, uh, and just that you know, it's less less unexpected meetings, less unexpected, you know, having to rework their designs. You know, it's more of a semblance of calm because you know, he's not inserting himself into these workflows that have become standardized and and you know, schedules that are pretty that are

more or less routine. Hey, can you talk to us a little bit more about Gwen shot Well, she's the president and CEO of SpaceX, and she's a name that comes up a lot when you read about the success of SpaceX. Yeah. Absolutely, I think from from both internal and external perspectives, Guenn is kind of seen as the one running the show, especially when Elon is not around.

She's very much involved in the business side of things as the CEO, and she's just kind of, you know, this pillar of strength for most of the Space Sex employees. But it's also important to remember that she does, you know, report to Elon, and so every now and then you'll see her having to execute Elon's vision at the end of the day. She does report to him, so you know, if he makes the demand, she's got to do it.

And also, you know you saw that with Sometimes she can take on Ellen's role a bit when you know negative things are happening in with the company. We saw this, uh last year, when you know, a bunch of employees had penned an open letter denouncing Elon's tactics and our antics online, and you know, she took it upon herself to fire those employees. So sometimes she can she can take on a bit of an Elon rolls as well, But more or less she's kind of the steady hand

at the company. I wonder too, Lauren. And you know you've done so much reporting on SpaceX, but it's a private company, and we do see the valuation because you know, the company has recently raised money, so we see what the market is valuing the company yet, but we don't see,

you know, quarterly earnings from the company. We don't see updates that are required as a result of being a publicly traded company like we do with Tesla, you know, before Elon Musk bought it, like we saw with with Twitter. And I'm wondering if that has anything to do with the success of SpaceX. UM. You know, I would love to know more financials of SpaceX. I think everybody would. UM. I know there's been talk about whether or not that

valuation is warranted or if it's overhyped. UM. I'll just say this, and we're talking about billion dollar valuation right right exactly. UM, I'll say this, SpaceX is a has become a major, if not the most dominant player in the US launch market right now. I mean they are a valuable NASA partner. I mean they are the starship. The vehicle I mentioned is has a NASA contract to eventually land NASA astronauts on the Moon this decade. And you know they are working. They have these crazy goals

of launching up to a hundred flights this year. Many of those will be Starlink launches to build out the company's Internet from Space initiative, which now boasts a million subscribers. And they and as we wait for ul A to create its next to transition to its new vehicle, the Vulcan, SpaceX is kind of the main launch provider at the moment, constantly racking up contracts with the Defense Department and NASA.

So I mean, there can be debate over whether the numbers are right for the valuation, but ultimately SpaceX is a critical us A company in the space industry. Right now, Hey, listen, just one last question, Lauren, Like I think of back in eighteen, it was in the summer of Max Jeffkin and Dana Hall put out a story. It was Business Week the Space Issue and space X a secret weapon? Is Quinn Chutwell? And I do you think about you know,

her role and her success. She's not been there for several years, and you know, does the investment communities say, you know, as goes Gwynn as goes you know, SpaceX, Like how important is she? As you say, Ellen puts his stamp on it, and he gets involved in the long vision. But also how you know important is the future? You know, how much of it is gwyn connected to

that company? I'm just curious what you hear generally. I mean, I think it's certainly a major part, you know, and you see this with his other companies, like with Tesla for instance, doesn't really have a Gwen equivalent. I mean, obviously they have their own executives, but no one quite liked Gwen in this in the sense of, you know, how she runs things and handles things. So I think she's definitely a very big part of the successful equation.

But it's also has to do with, you know, the engineers and the workflows that they've established at the company, So there is that as well. We think about STEM company news, right, this is really truly a STEM company, doesn't get Yeah, exactly, Um, great stuff. So glad we got some time with you. Lauren Grush she space reporter at Bloomberg News, joining us via Zoom from Austin, Texas, which we of course knows where Tesla is headquartered. Everything right. Yeah, well,

I wouldn't say everything well. I mean it was the theme of what was two Carol World. His companies were moving from California. But isn't that he shifted his headquarters solo his real estate Elon Muskin said, you know, yeah, but you know, reminds us there are significant operations for for Tesla in California. Still, that's facility. That is a

really good point. Um, great story. Check it out. Just head to Bloomberg dot com or check out Lauren at Lauren Grush on Twitter, Carol Mass, Tim Stanovic, Bloomberg Business Week, right here on Bloomberg Radio Road Journal. Yeah but you let me drive, no, no, no, all right, please album goody revels. I want to drive. It's a good question. This is the Drive to the Clothes on Bluebird Radio.

All right, everybody, we've got seventeen minutes left to today's trading session, getting ready to wrap up the first trading day here in the US of the week, and of course Charlie breaking down. Equities were offer highs and lows of the session. Got a lot of economic news, a lot of earnings to get through. I feel like we're gonna trade from day to day based on the tone

and the news. Tim, Yeah, I think so too, and I mean I certainly see that playing out today with what Goldman sack, what's happening to Goldman Sachs shares as well. Let's get into it with Data. Doria, the co c i O of the independent investment advisor invest net Data, joins us this afternoon via zoom from Pennsylvania. Dana, Good to have you back with us. How are you great? Thanks for bringing me on. Yeah, thanks so much for joining us. So what's your outlook for for the year? Igain?

I want to kind of move be on today's trade and get an idea on on what you're thinking for well. I think the consensus at this point has been first half of the year is going to be difficult. Still, We've got a lot that the markets still have to work through. Um. Not not the least of which of course, is becoming debt ceiling fight, but also you know, continued need for the Fed to sort of stay firm on rates,

even if hiking can be reduced a little bit. Um. The notion of a pivot is probably unlikely at least until the second half of the year, but there is a growing chorus. I think around the notion that you know, second half of the year could be could pick up, and so you know, kind of UH in our space talking to advisors, talking to UM you know, home offices. It really is about sort of having the discipline, hanging

on and and hopefully looking forward to that comeback. Hey, Danny, your firm, You guys offer investors et f mutual funds, liquid all portfolios. You also do UH fund strategies, portfolios that combine a bunch of strategies in our manner by independent firms. Where are you moving money to? Where you're allocating more new money to right now? And why give

me an idea of where it's all going. So I would say, you know, of course, we facilitate UM portfolios across any number of different types of strategies, and you know, very strategic. For the most part, advisors look to keep their clients and portfolios that are are allocated around their risk tolerance right their discipline. But what I'll say is, at a high level, in answer to your question, fixed income is where a lot of interest is being pointed

right now. And of course it's because we've experienced a lot of the pain of rising rates already last year. You know, much of what we expect is going to happen in fixed income has already been priced in at this point. And you know, whereas fixed income took a real beating, you're now in a position where there's concerned about recession. You know, you're that standard sixty forty that that was really had a problem last year and you know,

sort of historically precedented. Um, you know, double digit losses on both sides of that sixty that forty the equity fixed income. Now we're in the market that's that looks more you know, traditional to what we would expect in terms of Okay, the fixed incomposition provides ballast to that portfolio. We're not expecting huge losses there anymore because rate increase

is already there. And I think a lot of clients too, you know, in the in the run up proceeding all of this, you get overweighted inequities and it's time to take a look at you know what that mixes and and do you have enough fixed income in the portfolio? What about when it comes to reasons of the world where you're advising clients right now to to put their money. Yeah, I think valuations favor and international look. So I mean,

of course, you know, markets are cyclical. What's worked in the last ten years doesn't necessarily tend to be the best place to be for the next ten years. UM. So when you're looking at these portfolios that have become very US biased, and you know the notion that, hey, um, how much international do we need? So many conversations over the last you know, five years around do I even need international stocks in the portfolio? Um? You know what,

what's the real outlook there? I think we're increasingly seeing an interest now in exactly what you're saying, you know, and I would recommend, of course, and diversified view on international markets. You know, we can talk about specific regions and China is always one that, um, you know, there's a there's a large interest. If you have international developed and emerging markets, you probably have a big position in China.

So I might say, had your bets on that, and you know, have a little bit of a cap or a cap on the Chinese position, but US to international you really should be looking at having that um overseas diversification in the portfolio. That's interesting. Yeah, maybe you know we were I was talking about China earlier, because I do feel like we continue to get these mixed signals about people saying whoa kind of reopening, what the opportunity for China going forward this year as well as globally.

But then at the same time, you know, there are concerns that it's not going to be a straight move forward if you will, Um you mentioned international emerging though, if we you know, kind of put China side emerging international or do you like the developed play internationally? I do.

I do think it's both. Okay, you know, so you're you're you know, emerging has the benefit of still being somewhat lower correlation to the US than an international developed In fact, there's been some pretty good research around the fact that if you're doing an international focus and retail investors right there, they're probably investing in areas of that market that are large cap for the most part. Um you're getting a high correlation to US stocks, Are you

really getting the diversification benefits that you're looking for? Really, if you want to be if you want to have a diversefied exposure where you're actually hedging your bets on the U S side a little bit, you think about these large international companies right their multinational um you know, the revenue that's coming, whether the US or overseas. You know,

in these large companies, it's very high correlation. But if you get into international, smaller mid two smaller stocks, international small value and emerging markets, you start to now get to areas of the market where, um you're seeing the correlation is a little bit lower and you're getting some of that diversification benefit. We also, you know, there's an expectation that the dollar is not you know, strengthening this year the way that it was last year, and that

of course helps your translated returns. All Right, we're gonna leave it on that note, Dana, thanks so much for weighing in. Dana diora co chief investment Officer to Investment joining us via zoom from Pennsylvania on this Tuesday. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show at two pm Eastern on Bloomberg Radio or stream us live on YouTube and Bloomberg dot com.