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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 Meser and Tim Stenebek from Bloomberg Radio.
Joining us is Caroline High, co host of Bloomberg Technology. Here in Studio, Caroline, Let's first start with Intel felt like this was expected and yet it feels like still a big deal for Hey.
Well, I will say every time we had Ian on in the last two years, Ian King, we basically ask him, Caroline, how much patience does the board have for this turnaround plan? And I guess we finally learned today they're out of patients.
They're out of patients and actually saw that patients being strained. In August when they had their numbers, the earnings were poor. In particular, they were showing losses at the manufacturing part of the business. The foundery is part of the business, and inking, poor guy, I think he's meant to be taking the day off and had to come running back.
To report he's down the terminal.
Yeah, and when that August number hit. We saw in particular one member of the board quit Li Bhutan and with the frustration about the direction of travel coming from Pat Girl Singer because look, this pre dates Pac coming in in twenty twenty one. To be fair, to be fair in Video has been on AI accelerator path and GPU focus for a long time, but they just managed to miss this AI accelerator wave. The Galdhi offering that they have is likely to not meet their own internal
five hundred million dollars per year revenue target. Compare that to the one hundred billion in videos bringing in the more than five billion the AMD is managing to do. All of this though, just shows that since Pac Girl Singer has been the leaders in twenty twenty one, Intel's share prices plummeted sixty percent in Video's share price as well as more than eight hundred percent, and Intel has managed to try and pivot become more focusing on foundries.
Do like the opposite of AMD, which spun off global foundriies and went fabulous. Intel went back in. But there's a mixed reaction coming from the analyst today because City Group is actually saying and maybe this is why the shares have turned negative were now off by one point seven percent.
Is that?
Look, he Pat was the best guy for manufacturing. They rather they just got rid of the foundries part of the business and kept Pat, rather than get rid of Pat and try and still cobble together the focus that he had in terms of getting into building chips as well for other clients as well as themselves.
I mean, it's amazing, right because the Intel was up six percent of TIS as you said, now down about one and a half percent. So it just shows like whilst you're trying to figure out what this means, I mean, isn't a Pat Gelsinger problem?
Is it an Intel problem?
Like?
What is the way forward for Intel?
I think it's an Intel problem, many would say. Is that over years, you know, they were trying to do the biggest restructuring in four decades.
Pat did come on with a very big, bold vision.
Perhaps that was too big, too bold to cost even with government help, with all these chips at money coming at them, to be able to build an Ohio Arizona, they had to suddenly put on ice what was happening in Europe, and ultimately the market ripped away from them, particularly when it came to AI and I think just
other areas of the market, plus their own clients. Remember, at the same time as in video building up strength in AI, Apple is busy making its own chips, and they're not making so much for their phones anymore.
If this wasn't a Pat Gelsinger problem and he did have a few years to attempt to turn it around, you mentioned what happened with the share price, especially versus Nvidia, Then what can another leader actually come in and do to save this.
Company, and particularly at the moment where they're depending on insiders, look fair play. David Sinzner, the CFO has only been there a few years, but Michelle Johnson Halthouse MJS is known has been there for three decades. This is totally turning to people who understand the business but are not going to be a breath of fresh air anytime soon. Of course, we've got Frank Eeri saying he's going to take on the executive chair role and he's going to
find a new permanent solution. Will that be from outside the business or will they turn to potentially starting to bring themselves up. That was something Pat was very dead set against. Yes, he was going to be making money by spinning off different bits of the business, certainly particular investments that they'd made, but he wanted to keep it intact. What about offers coming from rival suitors?
Right right? I mean Quacom was interested, right, Yeah, and then they went off and then the deal.
Yeah, but not so into you anymore kind of thing. Well, what kind of leader does?
Do we have any idea?
I'm just curious what kind of leader Intel needs at this point? Yeah, I love the inside outside, right, We've seen this with these incredible it's.
Almost like company. It's almost like you're talking about Boeing right now. Yeah, exactly, I'm hearing this and I'm like just thinking about Boeing.
Right, how many times have we talked about this story that like maybe it's time for fresh blood to come.
Into a company.
And remember Pat Kelson himself was kind of fresh blood because he came out from VM where he'd been the CEO there. He'd left Intel. He was so integral to Intel in the eighties.
He was like literally, you know, designing the chips himself.
He then left after serving a long time and ap period as CTO is Intel, do they go and get other experience? Then he came back and he couldn't change it around if they go outside of say MJ. It's interesting hearing the narrative just from the statement this morning. They're saying, we need the product people to lead the business at the moment.
Well, that is MJ.
So what are they going to do.
Are they going to bring other product.
Expertise from outside or are they going to bring someone who can be a bit of a turnaround king or queen after see right.
Like operate or turn around person versus somebody really understands the products that need to kind of move Intel going forward?
To what extent does this turn into or continue a nasty cycle for Intel? If you're a potential customer or a customer and you're thinking to yourself, well, do I really want to buy it from a company that I see reported in the press such as this, it's going through this upheaval, there's again executive shake.
Up at the top.
Does that turn into a terrible doom loop for the company?
I mean, time will tell, and I hate that sort of an answer, But what could help.
Is the PC refresh.
You know, this is a man who's also staked his future on the AIPC taking off, and thus far we've all talked about it, but not really known how it's going to affect our lives and not really bought the darn thing, right, So will we actually see I mean, this echo is the issue that Dell was having an HP was having in the beginning of the week John last week.
Yeah, and he made the point that there are no apps for Intel for if there are no apps for aipcs yet, So it's like we just hear from executives talking about them, but there's nothing to show for him.
So if that starts to take up, if suddenly we are all addicted to generative AI, we do suddenly want to get a newer PC that we had bought just the time in COVID, and we will now get a new one. Maybe that will help Intel, but then they're going to be leaning back into the PC side rather than trying to compete on the AI accelerator side, which is really the bit of the market that at the moment everyone's getting into.
Yeah, it's kind of like this identity crisis for a name that was just so you know, associated with anything to do with the semi world. Hey, before you go, we got to ask you about super micro computer. I think it's the number one gainer and both the S and P five hundred and nas DECK one hundred independent review no evidence of miscanda.
This is a company that's had so many twists and terms this year.
No, I mean on the high's absolutely caught up in the AI hype because they are a competitor with Dell. They basically put in video chips within their servers and sell them out to clients. So super Micro done phenomenally well, but then came the concern about well, no one wanting to audit them, then getting worried about financials not putting their ten k out, potentially being kicked off the Nasdaq. Right now, they've got a new auditor, now, they've got
a new CFO, Chief compliance Officer, General counsel. They're trying to steady people's nerves that look, we've got different oversight here of the business and we are going to be able to stay listed within the Nasdaq, which I think for many is the key.
I'm surprised to see reaction today just because when EI resigns it's not a good sign and I'm like, well, did they get something wrong then? And this new auditor is different in some sense, like they're obviously sending a different signal, but you know someone's not.
In the right here, or whether EI were frustrated with the leadership and now they're changing up the executive leadership and showing that they're going to have a different governance structure going through. But everyone wants to love this stock because it is so integral to the AI hype cycle. So maybe it's just been so beaten up that people are willing to buy back in. But yeah, we'll see what BDO USA has to say about the numbers when they eventually file them.
Not one of the big accounting firms that typically odd at s and P five hundred.
Company, but I KNOWDIA like video, Yeah, Simon, and you're not going to hang your hat on. I would have thought, yeah, they're taking a big risk here, and I'm sure they want to show the proof in the pudding.
Well, I'm got to say investors certainly buying in stocks P twenty eight percent so far in today's session.
Caroline, thank you, Thank you so appreciate.
Co host of Bloomberg Technology Catcher on Bloomberg Television at eleven am Wall Street time.
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Hesbilla has claimed the first strike against Israel since a US back ceasefire plan came into effect that was less than a week ago. It prompted Israeli officials to a strong response and the most serious threats so far to the truce with Lebanon. With more and what we know, Bloomberg News US National Security Team leader Nick Wadams joins
us from our DC bureau. Nick I was confused to see this headline because, like you know, we see in the story here, less than a week ago, we saw a ceasefire agreement between these two countries.
What happened, right, Well, I mean that's that's really the issue, and this is this is something that happens every time there is a ceasefire, or frequently when there is a ceasefire, there are violations of it. And the question is then at what point do you say, Okay, the ceasefire has essentially collapsed and it no longer applies. What we gather so far is that we have not drifted into that territory.
The US National Security Council spokesman John Kirby said today that rocket attacks went from hundreds to basically zero, and then dozens of air strikes by Israel to one or two per day. So what there's saying here is there has been a dramatic reduction in violence and that's what matters, and the ceasefire still holds. But what it does tell
us more broadly is that this is very tenuous. You had President Biden come out and say the ceasefire had been achieved, a lot of concern about whether it will hold, and concern that things will only continue to exclate. One possibility, of course, is this is just sort of a show of strength by the two sides. Things will quiet back down, but certainly not looking good for the broader prospects for that ceasefire at the moment, Nick.
Why do this dance? You know, rather than ceasefire means ceasefire? So help me understand.
I know it's always complicated when I feel like anything in the Middle East, But why this dance rather than Okay, ceasefire, this is a step forward.
Well, I mean it's a great question, but you know, the big issue is that so much time and effort and energy went into establishing this ceasefire. And the really important thing for certainly the US, but also for those caught in the conflict, is that the violence has dramatically reduced. So there's a question of Okay, you have the ceasefire. You don't want to immediately just declare the ceasefire is dead, which means okay that everybody would then have to go
back to the negotiating table. And if you're looking at a pure numbers game, it's like, okay, well, we have a monitoring system in place. There may be some violations. We do not deem those violations to be to indicate that the ceasefire has totally collapsed. I mean, and when you look at some of the language, it seems like the two sides also have an interest in keeping the
ceasefire in place. Has Bellowed, for example, targeted Israel in a specific area, an area that's still contested, and they framed their response as a defensive response to what they said were recurrent violations by the Israeli side. So what they're saying is this is much more of a defensive action, and they have not gone back on the offense of course, big question is whether will see things the same way.
But at this point the big question is going to be is there escalation where we would get to a point where we'd say, listen, the ceasefire exists in name only. So far, that's not quite yet the case.
We'll tell us a little bit more about the area that's in contention right now, Nick, because we saw after that ceasefire deal with sign last week or reached last week, I should say, we saw people moving in Lebanon, moving back to that area because they thought.
It would be safe to do so. So there's some, right, I mean, concerns.
Yeah, yeah, I mean so there. I think a lot of the imagery we really saw of people coming back to their homes in Lebanon in a lot of cases that was actually in Beirut, in the capitol where people had fled because Israeli air strikes had really hit some parts of Beyrout, particularly southern Beay Route quite hard, and so people were coming back in because there was a feeling which has largely held that the ceasefire would apply
and you start to see those strikes again. The area really in question is this sort of strip of land around just south of the Litani River and so this this divides Lebanon in Israel, and this has been a sort of hotly contested area for quite some time, and it's believed that that has you know, has been there for a long time, and there was a feeling that Israel could then pull back and that would also allow Hesbolat to pull back. So that's really where you're seeing
a lot of the contested you know, the violations. We have not seen major violations apply, you know to Beyroot, which I think if you did see that, what would indicate a real collapse of the seasfire.
What are we hearing out of our own security operations, our own intelligence out of the White House in regards to that, or we haven't heard maybe much of anything yet.
Well, I mean the big thing is I mean the US put, as as I mentioned, a lot of time and effort and frankly credibility into getting this ceasefire. So it is very much in their interest to try to keep this thing from escalating much farther and keep it in place. This is something that President Biden really wants to keep in place through the end of his term in hopes that then it would put pressure on Hamas and Israel to come to a ceasefire in the Gaza Strip.
So it is very much in their interest to keep this thing going. They do not want this to fail. So what you can expect to see in the next couple of days is going to be a ton of pressure on both Israel and Hezballah by the US and other mediators involved in this action to really tamp things down and not let these tit for stat tat strikes get any worse.
Him and I are going back and forth because we're like, there's one more thing we need to ask you, and I feel like when you think about pressure, I think about tim the President elect.
Yeah, well, Donald Trump posting just at the same time we learned that Israel is actually doing this. He posted about the Middle East hostages on True Social He said there will be all hell to pay if the hostages are not released by January twenty I think called on the hostages to be released in the Middle East. Right now, How does this complicate things or not complicate things?
Well, I mean it's it's very interesting because the hostage situation applies to a different situation, which is in the Gaza Strip, and so that.
Is it is it that different? Well, it's all I mean, it's a two front it's a several front war.
Sure, that's true. Though the issue there is that a threat like that would not necessarily apply to Hezbollah because they don't have any hostages that they have worked in support of Hummas. But I mean, you're right in the sense that when when President elect Trump issues a threat like that, it certainly causes people to stand up and take notice and question, Okay, what's going to be coming down the pike. It's that sort of this this idea
they have escalate to de escalate. The question is is this bluster or is this just something that is he's going to actually take seriously and potentially launch some sort of strike once he becomes president.
All right, Well, as we said, you know, it's kind of a two steps forward, one step back, it always feels like.
But a lot of moving pieces to this. Nick, you're jem. Thank you so much.
Nick Bottom, Bloomberg News US National Security Team Leader, and you can read the latest just check it out at Bloomberg dot com or of course, on the Bloomberg terminal.
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All right.
Not sure exactly how to set up this story for our Bloomberg BusinessWeek team other than it is an incredible deep dive by Bloomberg Jackie Devallos and Sophia Alexander.
It's about someone.
Who probably is about to become maybe a household name, and not for a good reason. It's a former billionaire now disgrace tycoon. His name is Greg Glenberg. He built a network of egg donors and surrogates and is now facing as many as thirty years in prison. There's some legal, different charges. There's a lot to unpack here, so let's get to it. Bloomberg News Technology Report, Jackie Devallos joining us from our Washington d C.
Jackie.
Every time I turned around with Tim, he was reading the story and he's like, leave me alone, Leave me alone, because it was just unbelievable. I do feel like we're watching a little bit of a streaming.
Series reading your story. Who is Greg lin Berg.
How did he and this story get on yours and Sophie's Sophie Alexander's radar.
Well, he might actually be a well known quantity if you've been a Bloomberg reader and listener over the last couple of years. He made his name and the insurance business, and not really for a good reason.
He built his.
Wealth by amassing this empire of insurance companies that then got him in trouble. He was convicted of bribery and some fraud charges. He actually went to jail a couple of years ago for the bribery charges. He wanted to basically get some preferential treatment in North Carolina, where some
of his companies were based. He got caught for it by the FBI and went away for a couple of years in prison, but got out and kind of this procedural issue with the jury instruction, so basically he was able to kind of, you know, come out as a
free man. All the while this was happening, and even before he went to jail, he had these aspirations of having upwards of fifty children, and what he is known for kind of in the business community, really had nothing to do with what he was doing in his personal life. But what we were able to uncover Sophie and I, you know, she is a reporter that knows billionaires, knows how they think, and I really knew kind of the
fertility clinic side of things. I had done some reporting on a company called kind Body last year and this came on our radar as a kind of a combination of those two reporting threads. But we had no idea just how deep his baby project really went. Well.
That firm that you mentioned is one of the two that's implicated in a scheme. Let's back up for a second. We're going to get to sort of the intricacies here. But why would he want fifty kids and why would you want to do this through IVF Because there's some custody issues here that you detail in the story.
That's right. He has three children with an ex wife that he had, you know, when he was married, and there was kind of an ugly custody battle there. And when we sat down with him to interview him, he was fairly forthcoming about the reasons why kind of vacillated between well, you know, I don't really want to lose kids in a custody battle, which is why I wanted
to have them on my own. He wasn't, you know, hiding the fact that he used a network of egg donors, but then again, he wasn't totally forthcoming about how many were involved. Another reason he you know, he stated was that he wanted to preserve civilization, this responsibility to populate
the earth. And we recognized a lot of those threads from you know, especially Sophia Alexander's reporting on Elon Musk and other billionaires who are kind of obsessed with this kind of pro natalist way of thinking, and Greg Lindberg's goals really echoed that that goal as well. And you know, the other thing that kind of came up is that, you know, I don't think I don't think a lot is known about what it takes to build a family
in this way. We typically think of like a couple walking into a fertility clinic that can't conceive, not necessarily a guy who's basically trying to have as many children as possible on his own, and yeah, you know, there's the issue of custody. He shares some children with this woman who kind of served as a recruiter for him, but she's not allowed back in the United States. So eight children are currently in his care in Tampa while he's sitting in jail waiting to be sentenced for these
larger crimes. And that's really what's at the core of the story is you know, where will these children end up? What happens to them? And ultimately did doctors know that this was a possibility.
I don't even know where to begin.
It's just kind of as I like to say, a wait, what moment I want to go back to. You talked with Lindburg earlier this year. Tell us about that conversation. What you wanted to know, why he agreed to do the interview, what what was I'm just curious how you got him to talk to you.
Well, he has a pretty open presence online if you google Greg Lindberg dot com. He talks a lot about longevity. After his legal saga, he you know, he's currently waiting to be sentenced, but at the time over you know, in the spring, he was posting YouTube videos about kind of his new project, which is all about wellness and how to get younger and stay young. And you know, he posts a lot about these things and we were
interested in that. I had gotten a tip about kind of his baby projects separately, but it really seemed like these two things were linked, and so he wanted to talk about his longevity company called Longevity Labs, and had a phone call with him. Then he invited us down to Tampa where he lives, and this is where we really got to see him in his element. He came in with security guards. He you know, has this kind
of very intimidating quality to him. His eye contact was extremely intense, and you know, at first he was fairly open about how he built his family through IVF, but started to kind of clam up a little bit once he almost like heard himself kind of talking about the unorthodox nature of it. And we were pretty forthcoming that, like, hey, sounds a lot like this other guy that we've written about,
Elon Musk. But you know, that's kind of what got the I think it cracked it open for us that this was real and that there were certainly a lot of women that you know, he didn't want to talk about. But we had to kind of piece those those pieces together because it's an incredibly important part of the story, which is the exploitation involved. And while this might have been you know, a goal of his there were women whose lives were impacted by how he carried this out.
So let's talk a little bit about that.
How he carried this out, who was involved, how Instagram was used, and what women who ultimately did donate their eggs to lind Bergh were told versus what they ended up getting and what he ended up doing.
The first in the first stage of the baby project, Greg Glenberg really targeted blonde, blue eyed, green eyed model types. There were matchmaking services that he used, There were kind of boozy parties that he threw in his huge yacht. There were you know, reality TV stars, Netflix stars, I mean, you know, very very like a specific type of woman that he had in mind. He had this kind of obsession with Arian looks and the German quality to things.
He himself obviously is red hair, but he really wanted to have you know, blonde, blue eyed boys and super specific and for some of these women, you know, many were vulnerable. There there was one who was not, you know, from American. There were several actually who were Eastern European vulnerable in many ways because you know, they didn't know
what they were getting themselves into. He promised them money, you know, promises that they would be in the child's life, that they will build a home together, and was kind of manipulating them in a way that, you know, if they didn't go through with this procedure, that he would have cut them off basically and cut the relationship off. There were other women that had no idea that you know,
he who he was, his recruiter slash fiance. You know, she was going on Instagram and basically finding these women and offering them hundreds of thousands of dollars to donate their eggs, and they thought, you know, wow, my eggs are just going to go to this you know, nice family who can't have kids, and they weren't told the truth about Greg Linberg, his legal troubles and the fact that he was sitting in jail while some of this was happening.
Jackie, your story is definitely about linn Berg and everything that kind of happened around him, But it's also about, as you guys you know so well, right, the booming ten billion dollar fertility industry here in America, and you guys have been writing a lot about this industry. It continues to grow. There's demand out there. We know that Tim and I talk about it a lot on air. It also shows though, what ultimately the lack of transparency
over it and kind of rules governing. Is that kind of the other side of the story because I think we're listening and saying, okay, some of this happens, like tell us kind of where this breaks down, where the law has been broken.
Potentially this is the big picture. Greg Lin Burton might go to prison likely will, but anyone else can pull this off because a lot of this was actually legal. There is very little regulation when it comes to the fertility industry. It's this honor system. They're a self regulated industry essentially that has guidelines that doctors purport to follow. Clinics say, you know, these are the guidelines of the
American Society of Reproductive Medicine ASRM. It's a trade group that represents doctors across the country, and they say that follow these these guidelines. But no one's following up on it, no one's policing it. The government is largely stayed out of regulating fertility because it's really politically fraught, as we know with reproductive rights just kind of at the core of you know, this this debate, and you know, fertility is usually thought of as like a way that you
know someone. It's like a miracle, you know, for couples that haven't been able to have children. But as our story shows, depending on what your intentions are and how wealthy you are, it can also be used as a tool for exploitation. And two of the clinics are really well known. Kind Body acquired this other Chicago clinic that started it, but it also continued after they acquired them HRC.
It's a major fertility network on the West Coast. A doctor who's treated celebrities was the one that Lindbergh preferred, and he was open about this, and we were able to kind of piece together some of the concerns and say clinic workers actually had specifically a kind Body with
what they were doing. And you know that takes a lot of courage for for people who kind of see this, you know, playing out and and I think what our story does is, you know, at the end of the day, these guidelines are there for a reason, but you know, no one's really following up to see if doctors and clinics are actually following them.
Hey, Jackie quickly, and then I'm gonna just encourage everyone once again to go and read this story. It's the most read on the terminal today for a reason. I could not put it down. He participated with you to a certain extent, but then cut off communication with you and the reporting team behind this, and then what happened.
And there's still an ongoing, uh, you know, claim of defamation. He he, you know, alleged that we were interfering with a relationship with one of his surrogates. You know, obviously it's it's a touchy situation for him, and we were pretty forthcoming about out the direction of the story once we really cleared up the facts. But right now he's sitting in a county jail in North Carolina waiting to
be sentenced. He was denied bail multiple times this last month, and we're not really sure where his story will end up. But you know, we stand by our reporting and you know, hope that folks out there can read it.
It's an amazing read, unbelievable. Jackie, thank you so much.
I'm really glad we were able to go through with you.
Jackie Devalos, she's Bloomberg News Technology reporter of this story by she and Sophie Alexander of Bloomberg News.
Check it out. At Bloomberg dot com and also on the Bloomberg terminal. Jackie, thanks, you're.
Listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple.
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Business app, or watch us live on YouTube.
Well, some news out of China.
US is unveiling these new restrictions on China's access to vital components for chips and AI. It escalates this campaign to contain Beijing's tech ambitions, but it stops short of earlier proposals that would have sanctioned more key Chinese firms.
All right, so curious about all of this and what our next guest has to say.
He's Ben Harberg.
He thinks a lot about this region and the latest when it comes to investing in China. Ben is found in portfolio manager at Core Values Alpha. His team, by the way, manages the CBA Great China Growth ETF TICK or as CGROO.
This year up just shy of ten and a half percent.
It is down twenty percent though since October seventh, been joining us from RIOD.
You're always somewhere. It's the wee hours.
So are either staying up late or getting up super early? For us?
What is it?
Are you wait?
What's going on in real?
Look at you exacts?
Are you on vacation a work trip? What's going on?
I'm speaking at the World Football Summit here?
A right, that's pretty cool.
Iota on her team in Spain. So I talk a lot about my side. Hustle is running soccer teams.
How much time do you spend doing that versus managing the fun?
And can you do both? Obviously you could do both if you delegate.
Well, I'd probably spend five percent of my time on football related.
How much do you want to spend on soccer?
I'm trying to cound turn the corner.
Then I'll be all in on that, But no, I would love to spend more time. We'll slowly edge towards that as my net worth creepsire.
I guess, so, Ben, is it easier to attract investors to invest in a sports team or soccer team than it is to get investors to invest in China?
I ask you this, and I know we talk about this a lot.
I mean, your fun is about seven point three million dollars in assets under management so I'm assuming you would.
Like for it to be a lot more. So help me around here.
You know, we have two over two billion dollars on the private side, So this is you know, this, this public strategy is newer for us, and it's a bit of a trial balloon, and we'll be adding new products into it shortly in the next couple of months. So you know, it's kind of a process of seeing what sticks to the wall on the ETF side, but we've we've obviously done well on the on the private side, I'd say today.
It's probably easier to get people to invest in sports.
Sports are hot right now, European football, particularly because the valuations are so low relative to their US peers. It's a highly inefficient industry and it's also one that's really fun to get involved with, and so you've seen some mega funds raised over the last few years in this space in terms of.
The private investors. As you said over I think two billion, you said, is it the same similar investment strategy in terms of what you're trying to do this fun in particular, you look for those kind of tech enabled companies in Greater China, the Mainland, Taiwan, Hong Kong. Is it the same type of investing or is it something different that you're doing on the private side.
It's obviously much earlier stage, so it's venture and growth investments. So company that are maybe you know, series seed, Series A, and then some pre IPO stuff and then obviously ETF is all public.
Okay, So let's talk a little bit about now that we've sort of established the grounding stuff here, let's talk a little about opportunities that you see because we actually haven't had a chance to speak to you since the I don't want to call it reelection, but since President elect Donald Trump won back earlier last month, how does that change the outlook for China? Because on one hand,
he talks incredibly tough about China. He implemented, he implemented tariffs that then the Biden administration kept, and he's talked about increasing tariffs on China when he takes office.
How are you thinking about all this? I think you.
Should be long short term book bearish and long term you know, optimistically or cautiously bullish, let's say. And I think that's because you're going to hear a lot of headlines and you're going to see a lot of news about very high tariff numbers and a whole saloop China hawks brought into the administration. But uh, and so I think that'll mean so really tough dealing at a very high bar set for the Chinese that they're going to have to deal with as they grapple with tracking investors
back to the market. But I think in the long term you can be slightly bullish because Trump is a businessman, He's pragmatic, and there are things that can be done from the Chinese side to assuage some of the issues
that he cares most about. He cares about the you know, the the reindustrialization of America, reshoring jobs, protecting American industries, and there are things that China can give up in an effort to appease that and to support that, and when they do, that can lead to a much more pragmatic dynamic in the relationship, rather than what you face with the Democrats, which is a very intractable dynamic where there's a whole sleet of issues that they care very
much about that that that the China will never be able to reconcile and overcome, and therefore it just kind of draws on indefinitely as a kind of shell game.
Hey Ben, you know one of the stories on the Bloomberg today we talked about the Chinese ten year yield dropping past the key psychological milestone of two percent. Was that a record low traders essentially kind of ramping up their bets that authorities would ease monetary policy further to bolster the week economy. When you think about China, what is more important to making it more investible for investors?
Is it the US China relationship, Is it China figuring out it's real estate overhang, or is it something else?
The key number for US is consumer behavior in China the key indicator. Everything else kind of is affected by that. So when you know geopolitics affect stock prices and valuations, they undercut people's home you know, kind of their savings, their portfolio, and therefore they consume less. And likewise, if real estate prices are falling and homes are going at lower prices and they were previously, again that undercuts people's
confidence in the market. So all these measures to stabilize the property market to assuaye some of the geopolitical tensions, albeit very very minute, are in an effort to get the Chinese consumers back to the market, because the only way that China grows and the way that it survives, the way that it performs, the way people were hoping it would, you know, several years ago, is to establish it as a domestic consumption market and enable it to
absorb a lot of these products that they're exporting outward, because they simply cannot afford to continue to run trade deficits with every country or state surpluses. If you're sitting on the Chinese side with every country around.
The world I've been a few years ago.
If we were talking to you, you know, the conversation we'd be having is, so, you know, Chinese is going to overtake the US as the largest economy in the world, and it's going to do that very soon. That narrative certainly has shifted. But do you think that does end up happening eventually?
I think the numbers would say it does. And just again, the efficiency of the Chinese economy is still quite low. There's there's a lot more that can still be done to brew their efficiency. Uh, they are very well positioned in what I would call kind of the fifth Industrial Revolution, right or you know, with you with all the types of key hardware and even consumer facing software that's really
redefining the way we engage with technology. So mobile first, everything from entertainment, payments, commerce level, and then of course all of the leadership across electric vehicles, you know, mobile handsets, et cetera. So my view is that China's well positioned for the this new age and particularly for digitally native consumers. But there are a lot of things that are undermining that.
The the anemic and population growth in China, I think, the lack of turnover within the Chinese Central Party and changing regimes as they had historically, and and just an overall kind of saturated economy or under and a higher saturation than was previously.
I think there a faster.
Situation than previously would have been predicted, is undermining the ability for that, uh, that prophecy to come true quickly.
Hey listen, I'm looking at the holding has been in your fun ten Cent Jamie, p d D.
Chip dot Com some of them b I d uh.
How often are you buying selling moving these names around? How are you like thinking about what you want to have in this portfolio.
Our view was that China was too dynamic a market to be passively traded. So we thought one of our differentiers would be that we were active, and so that enables us to move in and out for particularly across share classes, so a shares as shares or a shares the you know, the ad rs and the eighth shares, and we think that in this dynamic as well, you need to be moving in and out of those because you're going to see the the ad rs get hit every now and again, but the main land indexes are
flying and you know, retail buyers are pouring into those ingles. So I do think that you've got to be active. And then what we're trying to do is position ourselves in that product for what we think will be the you know, the immediate knock on effects of some of these stimulus policies which will help improve some of the domestic consumption narratives. And so therefore, you know, those those consumer facing names that we put at the top of the holdings will probably see benefit the fastest.
Ben What stimulus policies do you think are forthcoming that we don't like? What are you anticipating that we haven't heard about yet?
You know, I don't know if I point to anything really specific. And I still think that a lot of the stimulus is more narrative than it is. It's kind of more form than function in the sense that it's it's not truly having a material impact on the bottom line.
The thing we're looking for is just that kind of sustain momentum that people within China and externally feel that the government is serious about growth, furious about cleaning out some of the bad debts, some of the you know, things that it has under his control, and of course the geopolitics are less under its control today than ever before, and that those would then almost kind of jump start like sparking an engine for a spacecraft, but spark the
engine of consumer growth, and that people would kind of return to the retail, return to High Street, start spending a.
Little bit more because the money is there.
I mean, we're sitting there in those bank accounts twenty one trillion and counting of household savings and dollars, much more than is in the US, and so there's a huge potential to be unlocked. But the people have to kind of feel that, and so I think they were holding back of waiting for Trump and hopefully you'll see more things from here.
Hey, just got one time for another question, one more question forty seconds or so left here and going back to your holdings. I don't think I see TSM Taiwan Semiconductor.
Is there reason? Why? Is it just too big or what I mean? It's up eighty seven percent this year.
We've moved in and out of it, and we even sometimes have had Nvidia and some of the other companies that still have significant revenue coming out of China. But in this current on the portfolio, it's not there.
All right.
Good to know, good to know, So appreciate it, Ben, Thank you so much. Go get some sleep, Ben, Harvard, play some.
Soccer, talk about some soccer. Wait, wait, wait, Ben, we have like twenty seconds. What's your team? What's your team in Spain called.
It's called Cotti's Oh yeah, oh it's it's glorious, mister sherry, but one plug. We have sherry just next door. But some of the best food in the world. The oldest continuously inhabited city in Western Europe. Our stadium is one hundred and fifty meters from the beach. Just a glorious place for football.
Wait, so are you there for the sports? Are you just there for the view and the food and everything.
Yeah, everything all in all in all right, Ben Harberg, founder and portfolio manager at Core Values Alpha, joining us from Riod on this Monday, December second.
All right, folks, we got about twenty six minutes to go into the closing down.
I'm thinking about Spain.
I want to look at this map of the soccer teams where this place is umbrother mac.
A journal.
Now about you let me drive?
No no, no, no, please, honey please, I'll do the drive gravels, excuse mate, I want to try it.
It's a good question time.
This is the drive to the clothes.
We'll buy around Yethern.
On Bluemberg Radio.
All right, everybody, TikTok.
We are about nineteen minutes away from the closing bell, and we have seen the next one hundred just uh, pretty much hovering you near its highs of the session. So as we just heard about about two hundred and forty two points, so good for a game of almost one point two percent s and p just call it a little bit higher. But I do know that we've been hovering near some records throughout the days. We'll see whether or not we close at a record record.
Did you close on at highs on on Friday?
We did?
I really kind of tuned out.
Sorry so offended it.
I did think about you. I did the about you while you were doing your duty here?
What do you say of thoughts? And there's like if some.
Bets for candy nuts? We don't have fun at Christmas?
Oh okay.
It's a friend of mine in college. She used to say it all the time.
Well, finally we're getting to Christmas season we are. Yeah, so you know it's even more apt. Hey, uh no, good segue here. But we always like to check in with Jimmy Lee. He's the founder and CEO over at the Wealth Consulting Group. They've got about five billion dollars in assets under management.
Usually he's in Las Vegas.
Sometimes he graces us with his presence here at the Bloomberg Interactor Brokers studio in New York. Today he's in Costa Rica. Jimmy, what are you doing in Costa Rica.
I'm on a little personal vacation with some family, so enjoying the weather.
All right, Well, it's a beautiful place, it is.
I'm sorry that you're stuck in your hotel room zooming with us on this Monday afternoon. I hope you you know, we won't keep you for long and you can get back down out there in Costa Rica.
It's the food, it's the environment. They don't spend money on military. It's really cool. But the monkey's right there in the trees. I still like, we still I'll get up early and we call it monkey TV. We just sit there and watch the monkeys waking up.
It was on the beach this morning, Carol, and they were right above us having fun, hanging out.
But I would always go into my room to do your show. I love your show.
Okay, that's Jimmy saying, all right, guys, enough about Coaster Rica.
Can we talk about the market? Where are we listen?
I mean, by many accounts, you know, certainly the US equity trade is going to you know, unless something happens in this last month, it's going to be a.
Pretty good year. What's your take?
Two good years now we've seen four stocks. Sometimes it's hard to keep that momentum going after two up years. What are you thinking about here in terms of what's the most investable part of the US market?
What is not?
Well, that's an interesting question.
And as I've been on a guest on your show for a long time. Now, you know that I've been fairly bullish on equities for the last years, and in the timeframe where a lot of economists were just predicting a recession primarily I think because of the data they were looking at historically suggested that we're going to face the recession.
Which hasn't occurred.
Of course, tech doocs have led the way, the Max seven have you been a big part of the story on all the major indexes going up as much as they have.
But recently we've seen the market broad now.
You know, the.
Sectors that we've talked about that we're not participating are participating now, like finance, financial sector, industrials, you know, small caps in terms of market.
Cap are doing much better now.
So across the board you're seeing a lot of different areas participate, and I think recently that's because we've had so much money sitting on the sidelines.
We still do. One of the things that we track on our Investment Committee.
Weekly is the amount of cash going into ETFs and mutual funds, into equities, fixed income and money markets. And you know, people keep putting money into cash, believe or not. I think it's probably from a lot of the treasuries are coming to do.
And they're not sure what to do with it yet.
But the people that want to participate, I think, I think, you know, they're looking for pockets of the market that are less expensive, like value stocks, like small cap stocks, and I do believe that those cyclical sectors or areas that we can invest into.
I also think that bonds now with the yields.
Climbing back up as they did after the first rate cut, I think there's value in bonds too, So I think there's a few areas that investors could get value in.
Why do you think investors are still on the sidelines.
Well, Tim, I think it's just this uncertainty, and you know, I think a lot of people were fooled. You know that the five percent treasury was the best place to go. Now again, we've talked about this before. For your money sitting in checking account deposits that we're not earning any interest.
That was a great move.
But for people that took money out of stocks to put it into treasuries and money markets, I think we're just listening to the headline news and not paying attention to you know, maybe what the companies were doing that they're invested in in terms of earnings, and you know, for the most part, I think a lot of people that normal investors, not retail investors, not institutional investors, you know, just don't pay enough attention to this.
And so they look at the headline news and they hear a violid recession.
And while the market's gone up a lot, for a lot of Americans, it hasn't felt that great because we've had a lot of inflation over the last couple of years. So I think the feeling of a bad economy kind of maybe overtook their investor. Investor behavior, which is always what we fight against as financial advisors, is investors are always trying to put a lot of money at the tops and selling out when there's a little bit of panic.
Yeah, no, it's I get it, I get it right. We talked about that investor sentiment so important. I mean, ultimately, Jimmy, you know, we're just kind of wrapping up an earning season, but I think about you know, we go from earning season too earning season. But that is really kind of our gut check, right, our transparency on really how companies are doing when it comes to growing the top line eenses.
Are they upbeat about spending in the new year. I mean, these are the important things that ultimately determine whether or not investing in stocks makes sense or at what valuation doesn't make sense.
Yes, And as you know, earnings have been pretty darn good, you know, in the face of higher interest rates and all the different obstacles that we do have in the economy. And you know, certainly there's a little bit of softness and a lot of the data that we've seen, whether it's manufacturing or even a little bit of softness and the employment and data. But for the most parts, I think post election, people you know, are thinking that things
are potentially more hopeful for next year. As you know, everybody is going to feel a little bit better when interest rates are lower. If you think about the kind of you know, interest payments that consumers make, so credit card payments, auto loans, mortgages. As rates come down, as the tenure comes down and those interest rates on those types of consumer debt comes down, I think people are
going to start to feel a lot better. And I think that the jobs situation and the plumbing situation is going to remain pretty strong, and so I'm very hopeful about about next year. You know that we're we're going to be going into an environment with lower rates. I think consumer sentiment is going to get better. I think the c suite of large companies and small companies can be a bit more bullish about cappacks and where they're going to invest, and hopefully what we'll see is a
soft landing. You know that the FED actually does engineer soft landing. I would absolutely love to see interest rates go lower. I don't think inflation is nearly the problem that the headline numbers suggest. You know, if you look at what housing, how housing plays into the headline numbers. We know that real time rents are lower, and so once it starts getting into the numbers, I think things will will look better and hopefully twenty twenty five ends up being a good year.
Yeah, I feel like we've got to get into it and kind of get a good feel of the policies that might come from administration and how that impacts, you know, the corporate environment, certainly for those publicly held entities. Jimmy, thank you so much, really appreciate being able to check in with you.
Happy New year. If we don't get to you before the end of the year, come back to you.
Jimmy Lee, He's founder and chief executive officer at Wealth Consulting Group, joining us on this Monday in December from Costa Rica, where I'm assuming it's a little warmer Costa Rica.
I don't know if it's warmer than Las Vegas.
That's the temperature.
I'm looking it up right now. You know what it is. It's about seventy degrees there. Yeah, so it's kind of perfect. It's kind of perfect. Yeah.
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