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All right, folks, speaking of headlines, it's been fast and furious over the last almost five days, and we finally have an answer to will he or won't he? And we are talking about Sam Altman because he is returning
to lead Open AI. If you're keeping track. It's been fewer than five days after he was pushed out of one of the world's most valuable startups, setting off a shock back and forth trauma that transfixed Silicon Valley, and I got to be honest, all of us and certainly the global AI industry just kind of watching the play by play here.
Okay, not everything is exactly the same as last Friday before Altman was fired. There are some governance changes. There's going to be an initial board. It's going to be led by Brett Taylor, the former co co of Salesforce. Larry Summers is going to be a director, Thearry's former US Treasury Secretary. Also, we should note a paid contributor to Bloomberg TV and existing member Adam DiAngelo, the co founder and CEO of the question and answer site Cora.
All right, so let's get two guys who've been all over the story of the last one hundred and twenty hours. Tom Giles back with us, executive editor at Bloomberg Technology. He has been NonStop, name on no fewer than thirty eight stories and headlines in the last five days, although I'm guessing there could be even more, a lot more he's on Zoom in San Francisco. Van Deep Singh is here in our Bloomberg Interactive Broker studio. He's senior Tech
industry analyst for Bloomberg Intelligence. P two has authored a handful of reports in the last few days about the implications of this drama. So you guys are in the thick of it, Hey, Tom, let me start with you. Was this the best outcome?
Well, if you're Microsoft it, you know certainly they are a winner in this equation. This is a company that is the biggest shareholder in open Ai, and they were also poised to hire Sam Altman should when he initially was fired and then not rehired and they hired someone else. And here Microsoft said all right, well we'll take him, and suddenly about seven hundred of their seven hundred and seventy.
Employees said well, we're going to leave too.
So Microsoft comes away as a real big winner here. I'd say Sam Altman and his inner circle also are going to be big winners here in so far as they come back to open ai, and they're going to push for a real reimagining and accelerating reimagining of what this company is, what it stands for. And how quickly it pushes toward commercialization and profitability and running itself like
a business. This is a company that started as a nonprofit tasked with the exploration the scientific exploration of artificial intelligence, and it certainly is still doing that.
But what you've seen Sam do over the years is push it further and further into the direction of being a business and driving business that's growing, attracting investors, bringing in creating products, and lining up customers, and those things sometimes are at.
Lockerheads with something that's more of a scientific philosophical approach.
To the exploration of artificial intelligence, and that thing really came to a head that is firing on Friday.
So now he comes back, and I think there's going to be an accelerated reimaginating, reimagining what this company is fascinating.
So, Man, deeve comean and you've been writing a lot of research. Microsoft and Open Eye. Do they need each other? Why or why not?
I mean, they absolutely need each other. And the last week has shown how much Microsoft is invested in AI to the point that you know they were willing to take the entire staff and you know, have them as employees. Look, I mean the original if you go back, you know, one year when Microsoft originally partnered with open EI. The idea was they wanted open Ai to use a Microsoft
Azure's compute capacity. They wanted, you know, to be that early cloud player that positioned itself well in generative AI. And they did that. It worked. Then they standardize everything, you know, their co pilots their search around open AI. When you look at the competitors, Amazon and Google, the two competitors in cloud, the growth has slowed down in cloud this year because they didn't have that generative AI
Open Ai aspect of it. And I think it's interesting given how much you know, Microsoft benefited this thing happening so suddenly really caught them off card and they've probably helped steady the ship. But I still think there's a lot more to common in terms of transparency why it happened. Were they any safety issues that the other board members fell. Obviously the employees didn't believe in the earlier board, so
the board had to change. But I still think there's more answers that will come out in due course of time.
Yeah, and I think that reporting is going to continue to trickle out. So no sleep for either of you guys over the Thanksgiving holiday, although that's not what I wish for you. Hey, Tom, come on back in here. Carol asked you about the winners here? What about the losers here? Are there any competing companies who who you know, could have had an opportunity to kind of seize the moment, But now that Altman is back at open ai, they lost that opportunity.
Well, I think if you are a competing company and you were, you know, looking on Friday afternoon the minute he got fired, I am sure that he was being inundated with offers because people see him as a true visionary. They see him as the driving force behind the successes that open ai has has cranked out over the last several years, but in particular in the last year and the pace at which those are coming out. But what
man Deep said was was really true. When when Microsoft partnered with open ai in such a dramatic way to the tune of ten plus billion dollars, that really catapulted them to the forefront ahead of people like Google.
Companies like Google, which should have been, for all intents and.
Purposes, the true leader in artificial intelligence, they had deep mind, they had their own house that this Deep Mind is.
The artificial intelligence startup that they.
Bought in the UK, which is really at the cutting edge of this research. They had their own in house AI effort and they just moved too slowly on generative AI. And so when you saw Microsoft really strengthen his partnership with open AI, that really lit a fire under Google.
And Google remains on its back foot in all of this.
And you're going to see if man Eve said, You're going to see Microsoft incorporate not only benefit from open AI because of the computing power and its use of their cloud services, but also incorporating generative AI into more and more of their products and making those products even being this search engine that none of us uses, maybe even making being more relevant. Not to mention what they do to their business products that are the real lifeblood of Microsoft's revenue stream.
Come on in man No, and that's a risk, right.
So if you look at the Amazon and Google approach, they want to develop their own large anglid model, and you know all their products will be driven off of their own large anguage model. Open the Eye is still an independent entity. Granted Microsoft has a forty nine percent steak, but tomorrow, if things fall apart, and you know, again Sam is back running the company, so you would hope things stabilize, but that's a big risk for Microsoft not having its own large, languid model.
I feel like, you know, we kidded yesterday that it was TBD, and I still feel like there's still TBD to be you know, kind of in this story in terms of what happens with Open Eye AI in the future, or whether or not somebody big comes out and is a real challenger to that company.
I don't know if there's anyone out there who.
There is Anthropic, I mean, is that Open the Eye employees who started that.
Carol was talking about it earlier today.
Yeah, and both Google and Amazon have taken a steak in the company, so just.
That So it's amazing because they're sort of like these you know, I don't want to call them ponds, but they're like these avatars of the larger companies that are duking.
They used to call Tiger cubs, you know, off of you know, Tiger Management.
Yeah, and the reason why Anthropic was started.
Because the co founders felt.
Exactly, yeah, guys, listen, we have to go We're gonna continue with this, no doubt about it, get some sleep, can't wait to see all of the research and reporting that continues to come, certainly from Tom Giles and the Bloomberg Technology team, and of course mandates saying over at Bloomberg Intelligence.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, or watch us Live on YouTube.
To a couple of stories on the Bloomberg Today. One was about how clean energy funds are dirt. They basically slumped roughly thirty percent this year, after losing almost five percent of their value in twenty twenty two and a
whopping twenty three percent in twenty twenty one. The renewables industry has been battered by rising interest rates, which have been a special damaging for new solar projects, and disappointing earnings caused largely by those higher capital costs and then lower profit margins.
I don't get it for a few reasons. Yeah, we'll get into it, but we know this is the direction that things are going to go. We know that the Biden administration has unleashed a torreative funds in the Inflation Reduction Act. So anyway, you know, that's kind of confounding to me.
Especially in a year that's on track to be the hottest year yet. We're not quite at the end of the year, but pretty much pointing there. So let's get to it with Rich Lesser see what he has to say about all of this, his global chair at Boston Consulting Group, headed to the upcoming Global Climate Conference COP twenty eight in Dubai. Riches on zoom in Boston. Rich,
Nice to have you here with Tim and myself. It's been hard to be anything esg tell us though, specifically about companies and what they are doing when it comes to sustainability and climate change goals.
So it's a pleasure to be with you, Carol and Tim. Look, I think corporate efforts on climate and sustainability continue to move forward. We see commitments to science based targets growing, We see investments in many places growing. Many of the
leaders in this space have continued their agendas. But as your intro pointed out, it is a more challenging time, particularly in the US, because of the various uncertainties the economics and particularly interest rates and the recent baut of inflation, which is coming down but still left capital more expensive, the political uncertainties inside the US, the regulatory uncertainties with
the SEC proposal. So while it's encouraging to see the actions of a number of companies, we do not have as much broad based action as we need from governments or from businesses at this point. Obviously, IRA is a bright spot in that, as is some of the actions in Europe and other countries. We have a long way still to go, and we're not on track for what the world needs.
So what gets us on track for what the world's world needs is it sort of a whole of government approach, cooperation across different nations.
Well, that will really help. I mean, we don't know what will come out of this cup, but there's some opportunities that could be substantial in energy and heavy emitting industries and food and agriculture, in finance, so there are a number of areas that could be encouraging areas of progress. I don't think we'll be at the end of the same we've solved everything we haven't been for the prior twenty seven cops, we won't be at this one. But
I think we could meaningfully move forward. But then there's the actions that individual countries take, whether it's around support for new technologies, finding ways not necessarily with a carbon tax, but other ways to put a price on carbon, getting addressing permitting issues which are such an inhibitor, using government
procurement itself as a lever to accelerate progress. And then there's a lot of corporate actions that are possible, not just inside the four walls of the individual company, but what it does in its supply chain, how it supports it customers, how it works together with others in their sectors, whether it's on labeling, transparency, or finding new sources of supply for the whole sector. There are lots of ways to make progress that we're using to some degree. We need to go much further.
Tell me out here, though. There are companies who put out sustainability goals, missions commitments, and then there's governments who say you got to do this by twenty twenty something or whatever, or twenty thirty or twenty forty. What is it that really ultimately moves the needle for me? It's terror I feel like it was terrifying to see some of the headlines or it'll be in New York with orange skies, or to be day after day.
Worried about day based flooding in your basement because you know every three years there's sort of a once in a century exactly.
Rainstorm exactly, so exactly those things terrify me and feel like, Okay, we've got to be doing something different. So what is it that ultimately moves the needle? Because I feel like commitments and goals, I don't know that you really have to ultimately abide by them.
So obviously, what makes it so much easier to go faster is when doing the right thing as regards to climate and sustainability aligns closely with your own business economics to drive sustained business performance. I mean, that's the magic formula that allows everybody to invest fast. That's why things like IRA were so important because for many types of investments, it fundamentally takes the economics from a place where it
didn't make financial sense to where it does. But there's still many, many parts of the economy where IRA is a step in the right direction.
You're talking about the Inflation Reduction Act passed in twenty twenty two, where there was a lot of investing into domestic energy production and also the promotion of clean energy, So there was money committed to this mission.
That's exactly right. The IRA bill set aside four hundred billion, but uncapped, and it will likely be much higher, both to support the broader energy transition that we need in the US, but also to support new technologies that would encourage us to lower the cost of those technologies, build scale, do other things. But still, in many, many cases, the economics aren't as clear as they need to be on shifting to new technology.
The why aren't they? Why aren't they? Why aren't they? Is it because they are still more expensive? Or is it that governments.
Makes still more expensive? Yeah, I mean if you're trying to make steel or aluminum or cement, or fly an airplane or do a whole range of things. The technologies that would allow you to decarbonize now exist, but those technologies are often substantially more expensive than the technologies build around the basic fossil fuel economy. The good news is IRA has fundamentally changed that economic equation for some of
those things. That's why you see so much investment coming into the US from US companies but from around the world. It was a very meaningful bill, but we need to be ready to go further. And I think that if we can go further, we can accelerate progress. And I think cop is one of the opportunities on everything from food and agriculture to the leakage of methane to heavy industries that are really challenged to decarbonize, where we need agreements and we need the world to come together that
we need to make it easier. Just as a final point, a lot of the challenge will be in the global South, will be in low and middle income countries. That if it's hard for play the richer part of the world to afford the capital and deal with inflation, you can imagine how hard that is in other parts of the world. And there's a lot that we can do to make the financing easier and make it more affordable to accelerate
that decarbonization. And that's where a lot of carbon emissions are growing because those companies those countries are adding energy infrastructure to populations.
Hey, Rich, what's the relationship between the price of a barrel of oil and investments that are made in decarbonizing, Because right now we're seeing oil at seventy six dollars a barrel compared to you know where things were, gosh, just may have come down a line, you know, may of twenty twenty two or over one hundred and twenty dollars a barrel, So explain the relationship.
Look, it cuts both ways. The good news is if people are confident that oil will stay at a reasonably high price, then that makes the competing low carbon technologies look even more attractive. So in many ways, when fossil fuel prices are higher and people believe they're going to stay higher, then when they run their calculations of should we invest in lower emissions technologies, those investments look smarter.
On the flip side, obviously, that helps people that are in the industry, in the energy economy, in fossil fuels at a you know, make a lot of money in that space, and some of that money has been diverted into new technologies and into decarbonizing technologies, but not as you know, we need much more, much more. We're underfinancing the global transformation by probably two trillion dollars a year, so real money needs to go into it.
Just got about twenty five seconds left here, rich, So if the economy softens a little bit, will it make it even harder?
Sure, uncertainty makes it harder. The more people feel confident that the economic road ahead is good, the more confident they are to invest in their future, and decarbonizing the world is probably the most important investment we need to make.
All right, Gonna leave it on that note, Hey, Rich, thank you so much. Happy Thanksgiving. Rich Lesser, he's global chair at Boston Consulting Group, and as we mentioned earlier, headed to the upcoming Global Climate Conference COP twenty eight in Dubai, and you certainly made some references to some of what's going to be going on there.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Easter here on Bloomberg Radio, the Bloomberg Business App and YouTube. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa playing Bloomberg eleven thirty.
Well.
Around one thousand nurses at hospitals in Wichita, Kansas are planning a one day strike in December over staffing issues and what they claim are unsafe conditions. Another more than five hundred nurses just outside of Chicago went on strike over what they say we're unfair labor practices and then Carol, a five day strike of more than thirteen hundred nurses in Washington ended over the weekend. They were looking for more staffing, higher pay, and better patient safety.
Sounds like they want different conditions, better conditions. These strikes are all on top of the largest ever healthcare work stoppage that was happening in October when more than seventy five thousand Kaiser permanent day workers went on a three day strike accusing management of refusing to bargain in good
faith over the short staffing issue. Well, needless to say, healthcare workers across the country, really around the world, to be fair, are feeling under pressure when it comes to burnout, shortage of resources, pay, and more so, Tim, you got to ask, what's the solution because we need healthcare workers.
Well, there are a lot of people working to find a solution right now. Aloha McBride is EY Global Health Leader for EY. The company recently came out with a study based on more than one hundred interviews with healthcare executives and clinicians in eleven countries, and what they're trying to do is get to a better model. Aloha joins us right now on Zoom from Lansdown, Virginia. Lohaw, good
to have you with us this afternoon. How would you characterize the state of the healthcare worker, not just in the US, but around the world.
Thank you so much for having me on the program. Listen, I can tell you we saw these results across eleven countries, and what you were just talking about is exactly what we saw. This feeling of no control, a lack of autonomy, being burdened with administration, and really feeling a moral injury around real concerns for their patients' safety is really prevalent across the glows. I mean we're talking in every single country. We saw those themes loud and clear.
So is it something in particular coming off the pandemic where the trends already starting heading into the pandemic? Give us, give us some clarity on that.
We've known for a while that we were going to be seeing some workforce shortages in the healthcare arena, starting way back in probably twenty eighteen. We were beginning to project this. We were seeing some VATA that was alluding to this. Now, what happened during the pandemic was Obviously, we had large areas of the entire workforce actually leave the healthcare profession, some because of retirement, some because of this administrative burden, some because of illness, and that drove
that shortage down. That combined with the fact that we are seeing an environment in healthcare now where in the younger generation of nurses and doctors don't want to put up with the way things have been for the last fifty years.
Frankly, what does that mean? Wait, let me stop you other Aloha, what does that mean?
Yeah? Well, so when you think about what we all know about medical school and residency, we know that there's long hours and people work long shifts. However, this generation that's coming, you know, maybe the last two generations, they've been taught work life balance, right, They've been pounded into their head this concept of you can have it all, you can work hard and play hard and have a balanced lifestyle. But when they arrive into healthcare, they see
something different. It's not quite what they expect. And now we're seeing some of that come to the forefront, and we're seeing demands from healthcare workers wanting a more balanced lifestyle, wanting more career progression, wanting the ability to spend more time with their patients.
So essentially, so essentially, bring on generative AI, artificial intellig in robots, because we're all, as we get older, are going to need these folks or these robots or something to help take care of us. Because I've heard this too, it's interesting to hear you say that. I was talking to a recent doctor of mine it's probably around my age, and just said this younger generation, and we both were like, we need to make these blanket statements, but they don't want to work as hard.
But I think a big part of what this is, and I talk to teachers and doctors who say the same thing to me, is they see what happened to people during the pandemic who now work remotely. Yeah, they get to eat breakfast at home with their kids, they get to go pick their kids up from school because they work remotely three or four days a week. And that's not something you can do as a doctor or a nurse.
Aloha.
I mean I hear that complaint from teachers as well. Teachers used to tell me, oh, they have the best schedule ever because they get three months off in the summer. But now They're like, what the heck am I doing coming to school and being in the classroom five days a week when the parents of the kids that I'm teaching are only going into work two days a week.
Right.
And what I'll tell you is the health systems are responding. They're thinking about new roles, they're offering different programs for nurses and doctors, different career paths. They're looking at ways to which they could offer more virtual time, and I think that'll make a big difference. I also think to your point around AI and automation.
You know, I was.
Reading something the other day from Mayo Clinic and they estimated thirty percent of healthcare can be of the administrative tasks could be automated.
What are we doing? Let's go Okay, So here's here's a question that I have for you. When as I was doing research for our interview, I came across a Bloomberg story from October that showed that the average employee sponsored employer sponsored healthcare excuse me, the employee sponsored health insurance premium for US families rose seven percent to almost twenty four thousand dollars this year. That's according to an annual KFF survey of more than two thousand companies. That
compares to a one percent increase last year. We're paying more for healthcare. The employers are paying more for health care. Where in the value chain is that money going if everybody is burned out?
Yeah?
Well, certainly labor costs have been rising, right, We've seen the statistics and they're estimated to continue to rise over the course of next year. Within the healthcare industry, and during different segments of the pandemic, we had a lot of traveling nurses on boarded into different health systems and those wages were rising tremendously.
So is it all labor costs?
I will say a lot of it is labor cost for sure. Certainly the cost of health care supplies is certainly adding to this burden as well, so the cost of goods, if you will, pharmaceuticals as well as medical disposables. I think we see this across the economy, right, It's not just in healthcare. Inflation has driven up the price of many things, many sectors, and healthcare is always going to get.
Hit with these You talked about, you know, technology maybe helping with the administrative side. That's great. I feel like it should be a given, it should be done already, but I'm I want a clinician, you know, who can maybe work side by side with technology to make sure I get the best care. So I am a little worried about the pipeline when it comes to actually individuals that are needed. Any thoughts on that. We've just got about twenty five seconds left.
Yeah, listen, I think it's a great point. We want to see, you know, starting in medical schools and nursing schools, individuals getting trained on what to understand about AI and digital health and technology. We want to see those digital health and technology companies and healthcare provider organizations include those clinicians in the development of all of these new technologies to ensure their fit for purpose for these clinicians who have to use.
Them and work with them.
Well, thanks so much for your time, Happy Thanksgiving, aloa aloha. McBride ey, Global Health Leader. Joining us on zoom from Virginia. This is Bloomberg.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the.
Bloomberg Business app, or watch us live on YouTube.
Everybody's pretty hungry for Thanksgiving?
Is everyone?
But is everybody going to really be that hungry?
Are they going to be as hungry as they were before izempic? Maybe not?
Uh So, winding down on this Thanksgiving Eve, our magazine team is a great story for You can find it online at Bloomberg dot com, Slash business Week, and of course on the Bloomberg terminal. It's a story that as soon as we saw it, like we want to talk about this. It adds some irony to a holiday known for high levels of food consumption. Americans are eating less these days, actually a lot.
Less prescriptions for a series of drugs known as GLP one agonists. We're talking about ozempic, we go vi in the like. They quadrupled from twenty twenty to twenty twenty two, and it looks like there's plenty more growth ahead for these pharmaceuticals in the US as drug maker search for even more clinical uses. Bloomberg News consumer reporter Dina Shanker joins us on zoom from New York. She wrote all about it in the context of the Thanksgiving holiday. Dina,
good to have you with us this afternoon. Before we talk about what these drugs are doing and the way you're thinking about it for Thanksgiving. Talk to me about just how many prescriptions now are being written for ozempic, we go vi in the like.
I mean, millions of Americans now are taking these drugs. They are up three hundred percent currently at one point eight million together for sorry A, one point eight million for ozempic, and four hundred and fifty three thousand for Wagovi, so that's two point.
Two million total. And they are just getting really really popular for a lot of people.
It's like off the charts. It's pretty wild. I've seen it firsthand with people who are using it or taking it, and it really does reduce their appetite in a big, big way. They're just not hungry. So I think about the impact of this Thanksgiving and that's what you write about. Talked about some of the specific people you talk to.
So I spoke to four different people that are currently taking the drugs, and everyone was really happy with the changes in their life and especially what it meant for Thanksgiving. One woman I spoke to talked about not just for herself but also her children seventeen and twenty one years old, who have been taking these drugs and they have just seen not just great weight loss results, which I know everybody wants when they're taking them, but they're also just
looking at their food differently. They're open to her kids are open to eating things that they weren't eating before. She so excited about how now she gets to add more fruits and vegetables to the table. And you know, she's hosting, so she's actually going to make you know, the cast roles, the green bean casserole, the sweet potato casserole, the macaroni and cheese.
But she was like, I'll take a bite and then I'll send those leftovers home with my parents.
She's gonna hold onto the turkey because she still wants the protein.
But everyone is. Everyone I spoke to is.
Thinking about the holiday differently. And another woman I spoke with she was so funny. She was talking about how she has three sons and how they complain about the the lack of snacks in the house because she doesn't make both purchases anymore right, and her snack door is really weak these days, so the kids have to put it on the list. And for Thanksgiving, she said she used to spend weeks in advance, you know, looking for
the best recipes as she got her menu ready. But one of the things that these drugs do is they turn off the food noise, as it's called, so you're just not thinking about the food all the time. So she's like, I'll do She's still gonna make it everything. And she's actually even skipping her shot so that she can enjoy yourself a bit more on the holiday.
But she's just not She's not thinking about food all the time.
That's so interesting. I just want to cut you off here, Dina. What skipping her shot? What do you mean by that? Because these are monthly injections, right.
Weekly?
I believe weekly? Okay, skipping this week, So she's skipping this week, so that means she's great?
Is that?
But is that? I mean, I know you're not a doctor, we're not doctors here, but is that? Is that how the shot works? Is it?
Is it? Like?
I mean, she she thinks it's going to work for her that way. I don't know that doctors would advise people to do this.
But one of the interesting things.
About these shots and about these drugs is that they.
Were initially actually you know, not for weight loss.
They were for diabetes, and so a lot of the uses of them are off label, so because they're being used as a weight loss drug instead of as a as a diabetes drug. So I think what we're seeing both with the people using them and at the clinical level is a lot of you know, they're still studying it. They're still trying to find out all the different things that these drugs can do.
So for some people they have just been incredible.
Weight loss miracle drugs, as they describe them. But I should add that one of the health professionals I spoke with, a pharmacist, was really quick to make sure that we didn't discount the work that the patients are doing. That it's not just like you take your injection and you're done and the you never think about food again and the pounds start melting off.
She was saying how it's really important that.
People are learning how to manage their serving sizes. They're going for, you know, that walk after dinner, they're sticking it out through. Sometimes people experience really bad side effects like nausea, and they are really taking advantage of the benefits of the drug, but they're not completely relying on the drugs.
Even if you.
Yeah, I will say from no, no, no. From people who are on it, you know, heard things like I just have a more awareness. Especially first of all, it does cut your appetite, and so you have an awareness of kind of what you're eating or what you're not eating, and it just kind of changes your perspective with like when you put food on your plate, you kind of look at it and like, I don't need that much.
I guess what I don't understand, like, how does it motivate you to then go for a walk after dinner or Dina. Maybe it's because they are so cognizant of this weekly they.
Feel better because they've lost weight and they can actually move around a little bit more.
Or maybe the expense these are expensive too.
Yeah, and the drug itself doesn't motivate you to go for that walk.
Mack a journal about you.
Let me drive?
No, no, no, honey, please, I want to try.
It's a good question.
This is the drive to the Clothes well By on Bloomberg Radio.
All right, everybody, just about eighteen minutes left in today's trading session, getting ready to wrap up the day just before Thanksgiving. Then were markets are shut and then of course we'll reopen for a holiday shortened or post holiday shortened trading day on Friday. I am I'm going to be with Paul Sweeney from ten am Wall Street time to about two pm Wall Street time, so we'll wrap up the markets and yeah, chat a bunch.
Thanks for holding down the fourt You are welcome. I'll be listening.
No you won't.
Yeah, well yeah, we'll be there in Cincinnati listening all right, looking forward to it.
So let's get to it and our drive to the closed. Guest Vans Howard back with US CEO and portfolio manager IF the only registered investment advisor. Howard Capital Management roughly five billion in assets under management. He's also, by the way, owner op Raider with his family of the bar Sea Ranch in Madisonville, Texas. I just like that little fun fact about them.
Van.
It's good to have you back with us.
How are you, Carol, It's always good to talk to you.
Well, it's great to have you here. You're there and I think Georgia today, is that correct? No, I'm in Texas, you're you are in Texas. Okay, forgive me, forgive me. So what's easier to do right now? Run a ranch or invest in the market?
Well, they're both managing money is a lot more profitable to running ranch. I can tell you that.
Well, I got it. You got to tell us a little more about this. Okay, what's before we get to your thoughts on the market. What is the bar Sea ranch?
Actually, we run exotics. We run zebra's, kangaroos, gimbox ors. We run about six different exotic type of breeds out there, and then we you know, raise them and sell them. And we have quite a bit of will to bease too. They're they're quite interesting and fun to to raise.
Who buys zebras.
Well?
You'd be amazed, and a lot of people like them as you know, animals to look at, and then they put on the ranch at their farm and they're fun to view.
I bet I bet they are. I bet they are.
We're still remote from there, Caroll, like a little kind of petting zoo type thing.
I would love.
I would love.
All right, So let's talk about this investment environment. Your HCM income plus fun up about sixteen percent year today, being most of its peers. Your flagship Tactical Growth Fund of twenty three percent year to date according to Bloomberg Data, that puts it in the fifty fifth percentile against its peers. What's been a good investment this year? What hasn't for you?
Well, you know, it got really sloppy from you know, around July, and then the market picked back up when the FED came out. It was a little bit more you know, dovish, I guess, is what you could say. Or we had some good data that came out on the inflation front and the market shops straight back up. It's been a pretty challenging market to trade in. But again, you know, magnificent seven has been the place to be.
But we're starting to see the market Carroll broaden out, like with the small cap and the Russell two thousand started to broaden out over the past couple of weeks, which is I think very optimistic going forward for the market that we're getting more players coming in and we're starting to pick up different areas of markets starting to move higher.
Well, it's so funny though. We talked with our GENA Martin Adams, who said, it feels like a lot of the bad news has been factored in when you look at the corporate earnings, what they said on the calls, what they said in their releases, and that a lot of that bad news is factored in, although it could be a bit of a choppy twenty twenty four. Do you agree or do you feel like it's going to be one way our one way direction market.
I think we're going to have a strong end of the year in twenty twenty three, but I think twenty twenty four, I think is going to be a great year. I think there's a tremendous amount of cash on the sidelines. We're also looking at bonds too, Carol. You know, we started actually picking up some twenty year treasuries about two weeks ago when the bond market is starting to look healthier than it has for the last eighteen to twenty
four months. So you know that network bullsh and I think twenty four could be a big year.
Okay. We love talking to you because you've got the HCM byline, which you've told us about a couple of years ago, at least that's when I learned about it. Explain what it is and what the signal that it's telling you right now or should be. People be buying stocks right now?
They should be and the ACM by line is nothing more than an intermediate term trends system. So it's basically taking where the trends at, where it's up or down, and of course if it's down, you want to you want you want to play very very cautious, you know, move some money to cash and play it. Say, the byline went positive about two two and a half weeks ago after being negative for about I don't know, two and a half weeks. It actually dropped off. We had
those nasty cell offs. But when bed came back, it corrected it, you know, straight back up, and we moved back in into a pretty good clip. But we're bullsh going forward. The byline's really really strong. That means market's really broadening out.
Remind our folks who maybe didn't catch you when you've been on before, what that byline is about.
Basically, it's a number of different indexes that we've averaged together, plus we have a proprietary moving average that sort of tracks those different indexes, and when the indexes start to fall, it's going to go negative and that means that we move away from the market. We side step at whether it's twenty percent, thirty or forty into short term bonds
or cash. And of course, once it's positive, we go one hundred percent back in almost immediately, and you know, Marcus trend and this has been a pretty sloppy market for twenty twenty three, but it's still working and it's still working out, you know, pretty well for us going into the last you know, six to eight weeks of the year.
Is there a does it tell you if there's another you know, like when would it tell you to actually move cash or move into cash? Like what would sort of the signals be that would indicate to you that, okay, we're seeing a little bit of weakness ahead.
Well, the good part about it is it's not real active, and you know, anything that's too active, I think is a little bit overkill and I think you end up, you know, just doing a lot of exercise for nothing more than exercise. But when the trend goes negative, you know, it's going to give us a red light. And you know, when a trend's negative, we start moving away. So it just closes below that trend and there we are. And then when it closes back above and we come, you know,
firing back in. The thing is about the markets. You know, you can have a thousand reasons it goes down a thousand reasons that it goes up, but you know the market's going to do what they do. But you have to trade what actually is happening. You can't really trade what you think is going to happen because that usually very seldom you know, plays out as well as you'd
like for it too. So if the market's negative, it goes below the byline, we take the emotion out, we start moving some money to cash and short term bonds and get getting reset to some by equities. When it turns back up, what's.
The sustainability of that byline? In other words, once it turns or when once it shows an indication and perhaps the opposite direction, does it stay that way or or can it shift very quickly again?
It can stay that way. We've seen it go, you know, go positive for over three years. It's got a seventy two percent win rate, so you know you're looking at basically a seventy thirty So at seventy percent of the time it's right. Thirty percent of the time it's wrong. But the good part about it, Carol, is it never stays wrong. So if it's wrong for a couple three weeks and it changes back up, you can come right back into the equities, and you know you're not going
to break them. I mean, if you sell Tesla and buy it back tomorrow, you're not going to break it. So you can trade them as much as you want.
So the index, the HCM byline covers individual equities too, or just indexes.
Now that's a quant system that we run, and we run a pretty strong quant system to try to pick out what equities and what sectors in the market are doing the best. That's one reason that we picked up the small caps, and that's when we reason we picked up the TLT. You know, the twenty year bond is because you know, two weeks ago those went positive, which is really encouraging because they haven't been positive for quite quite some time.
Is it telling you to pick up Nvidia? It's down about two point four percent following last night's earnings, which by many accounts they surpassed expectations. So what's your take on that you own it? I believe in your flagship fund.
We do. We've owned it for quite quite a long time. We've gotten to write it. I think we were buying it around one forty a share and now it's up you know, four hundred and something and we're still riding it. I think it's a great company. I think it's going to do really really well.
Oh did you buy on the dip last night? Would you guys buy.
On the dip?
We already had plenty we've got we're loaded up on it, and so we're pretty we're pretty full on a video we you know, we also like AMD. We've been loading up on AMT too. But I think going into twenty twenty four, with the way these companies are, you know, are positioning themselves, I think it could be quite exciting.
Where don't you want to be right now? Just got about fifteen seconds.
You know, I'm not really thrilled about international equities right now at place they work in international markets. I think our domestic markets are much more interesting and much more powerful and a lot more interesting, reliable.
And it's funny if you go back a few months with a lot of guests saying international international, get out of the United States. Vance Howard have a great Thanksgiving. He's CEO and portfolio manager at Howard Capital Management. Joining us us on the phone in Texas. All right, you are listening and watching Bloomberg Business Week, can master Tim Stanovic? This is Bloomberg Radio.
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