Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Week, Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy, plus global business, finance and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.
We got with is Eric Wiener. He's Bloomberg News Equity America's team leader. He's the author of several books, including What Goes Up in Oral History of Wall Street from the Great Depression through the Internet bubble in the nine to eleven attacks. He joins us here in the Bloomberg Interactive Brokers studio. You walked in, I asked how you're doing. You said, it's been a day. I think it's fair to say.
That, say that every day.
That's what I was just gonna say. But I want to talk to you about a story that you just edited that talks about retail traders coming in and buying the day.
Is that?
Is that what we're seeing right now? They haven't been scared away yet.
They have not been scared away, and the money well where it's interesting because we're seeing different kinds of buying.
So the kind of buying we're.
Seeing is actual individuals going into the market and buying individual stocks or buying ETF's big flows coming from these guys. And in the story which by Esha Day couldn't recommend it enough, there are some really great quotes about people looking for magic in the market and whatever else. And but when you look at the broader UH indicators of like iras four to one k's, that looks a little
bit more bearish, actually significantly more bearish. What's happening there appears to be people sort of thinking should I take my retirement into cash?
That I yeah, that's scary to hear.
Yeah, so after.
The selling just saying had enough.
It's enough, right, and that like that is actually the biggest pilot cash we have.
So if if.
That turns bearish, that becomes a very different story because that consistently adds to the stock market going up. There's constantly this pressure of buying. Other countries don't have that. So that's unique to the United States and it's.
Part of our market.
Maybe I'm just like naive here, but I thought that I thought that in retirement portfolios. People had like target date funds, and you basically don't touch it until you You just don't touch it until you retire. Look, you're not an investment advisor. I'm not gonna ask you to give advice here. But I didn't know people played with that money. They do, and so I do.
I do not that the that is off limits, Yes, that is, and you think about it. You try not to look at it. You think about it once a quarter. You adjusters don't look at it.
I haven't looked at it, and it.
Takes a lot, but I like in my head have like percentages of what's been going on here, and so I don't want to touch it, but anymy go ahead.
Yeah, and the target date fun thing is important because as you get closer I'm an old man, as you get closer to retirement, you do different things. You de risk, you know, you lessen stocks more in stable things. But you do have people who view their IRA or their formum one K as a trading vehicle.
Well, and to be fair, we have seen the bond market not do what it's typically supposed to do in an environment where stocks go down, So that could cause some people to maybe freaked out.
So how do you make sense of this of someone who follows the markets right, and you're thinking about the role of retail traders who can be in and out pretty quickly and stuff. Maybe it's not that long term bet. So what does it really indicate about the markets other than it's kind of a plaything.
Well, what they're buying is the traditional stuff, Well, the traditional stuff being like big tech and the big names and those that they're like fans. It's like, you know, rooting for your favorite football team, rooting for your favorite baseball team.
They are going to buy they believe in Ela Musk.
They're going to keep buying those stocks until they're proven wrong, or until they feel that they're proven wrong. So it's a different kind of mentality. The shifting of retirement funds to de risking, that's a more programmed move, and that if that is in fact a long term trend that actually is troubling.
Does it ever become if we look at the retail side of this, does it ever become Do we ever get to the point where, and maybe this happened post twenty twenty into twenty twenty one, when retail really ruled, do we get to a point where retail doesn't have the money to buy the dip.
Yeah, that absolutely happens. The bigger point is that they tend to turn bearish right as the market is ready to turn bullish. It's kind of a country very indicator. If you talk to Wall Street pros so there, when they see over enthusiasm among the retail crowd, they kind of get nervous.
This would be an indicator of that.
But when they start seeing that the fundamentals are strong, growth should be you know, stock should be moving up, growth is okay, and the retail crowd is going no, that's when actually the Wall Street pro.
Step in and they say, there's a contrary indicator.
So you know, Eric like, I feel like, if you want to tell a story, you can find the data points right. So here I'm looking going back to the end of twenty twenty two to today, we're up forty percent on the S and P five hundred. We're down about eight percent year to date, almost nine percent.
So I think that.
Doesn't feel so bad. But I mean, do we have to think about the last two years or prior years. We're maybe off the charts anomalies more so, I don't know, like, how do you like when you start playing around with numbers? You know what I mean? You can start looking at things a little bit differently.
There are a lot of ways to thin slice this.
The big numbers to me are two straight years of twenty plus percent returns. That's rare, and that's the kind of thing where like, no matter who's president, no matter what the market is, a kind of a pullback would be expected. What's different now is that the political regime changed, And normally that doesn't actually mean all that much, but it really does here, so everybody.
Wants as soon as if you.
Take a step back and just look up to the day the inauguration day on January twentieth, or if you look at the tariff anounce the day of the tariff announcements, can you start seeing a downward trajectory where you see the market reacting to what is going on politically.
That's different. So if you were looking at this year.
And coming in and you're like, you know, it's president X, doesn't matter who it is, and the plans are just going to be to keep doing what we've been doing, then the market sells off a little bit and you look at it and you say, okay, well maybe I take some profits here whatever, But it's not this cataclysmic sweeping up, sweeping down in that story we talk about.
We've had just in like the last fourteen sessions, we've had five two percent down more than two percent down days and two or three two percent up days, which like that's incredible, that's crazy swings. So this is the difference between now and what was going on before, is that this is actually directly related to Washington, and we have no clarity on what's going to come out of there.
All right, crazy stuff. As always, Eric, thank you so much. Appreciate Eric Weener, Senior Editor Equities America's joining us here in studio.
You're listening to the Bloomberg Business Week Podcast. Catch us live weekday afternoons from two to five y's during Listen on Applecarplay and Android Otto with the Bloomberg As, or watch us live on YouTube.
As Carol mentioned, we're focused on the stock market, the bond market. Earlier, the S and P five hundred rallied as much as three point four percent. These were off of media reports that the US was considering lower levees on China. Then we saw stocks pair gains after Treasury Secretary Scott Besson casts some doubts on a timely resolution
on the US China trade war. We want to get into what's happening in the bond market because we are seeing long maturity treasury yields fall, at least felt earlier after the President laed fears that he would fire FED chair J. Powell. A lot to unpack here. Fortunately, we got Katie Kominski with us. She's chief research strategist air portfolio manager at Alpha Simplex Group. She joins US from Boston. Katie,
it's been a bit since we spoke to you. There's been a lot happening when it comes to the bond market, so we wanted to get your view on really how you're thinking about this asset class in an environment where it's not necessarily behaving in the way that it typically behaves when there's a sell off an aquities.
That is such a good question. It is the most important thing to look at this month. If you look at what happened, equities were down and you didn't see bonds rallying in response to such an extreme event, And to me, this is a suggestion that the market is much more concerned about sort of the vulnerability of US
assets but also the potential for inflation. So both of those narratives are key here, and that means that bonds are just not behaving like the safe haven asset that we love, but gold has so who knows.
It's definitely something to note.
Yeah, how do you make sense of that? Like you're someone who's watched this, first of all, the bond market when it's not acting like it's supposed to, Like, do alarm bells go off in your brain and you're like, wait a bitute.
Oh, definitely, because I mean, if you think about the typical narrative of this type of move when you have such a large risk off you know, trade like we've seen in the last few weeks, although it has been volatile, you think about the sort of where do you go to find safe haven and that's usually fixed income and that's not the case if you think there's a probability that this type of risk off move could cause dumping of US assets or a lack of trust in sort
of US treasuries, and that's what the market has been concerned about. And we've definitely seen some of those signals, albeit days like today in the last couple of days, you're seeing some.
Retraction of that concern.
You're seeing a flattening of the yield curve, which would kind of say that people are a little less concerned about that.
But it is definitely.
Something we're going to have to watch because bonds are just not behaving how we would think.
Do you think the US is losing its status as the haven, as the safety play, as the central bank to the world.
Well, I mean that is a clearly important narrative.
I mean, look how much the markets have moved based on the independence of the FED.
And sort of concern over that.
Concern as well is that when you have flows out of US assets, that they don't get recycled back into US treasuries. And so the concern with that is that we're just losing some of that safe haven status. And it's still too early to tell, but the early indications in the market suggest that we should worry about it and think about it.
You know, it's funny I think about Katie. You know, for such a long time in terms of US equities, we talked about Tina, right, there is no alternative, and so money just kept coming into the US equity story and markets. So I feel like too, as you say, with the ultimate safe haven US treasuries, that there was
no alternative. Is there, realistically, though, an alternative that I understand there are that might give you higher yield or but I mean with the same security and dependency that the US treasuries have, is there an alternative?
Oh, I forgot about, Tina, But yeah, I mean, I know it wasn't so long ago. I love that it wasn't that long ago. But it's been a busy month. But yeah, you know, that is a really good question. And that's why I think if you look at the only place people.
Have run to is gold, which you know, and.
That has been such a big story because there's just people don't know what that alternative is yet, and there's still questionability of whether or not treasuries could be more vulnerable, and so I think we're going to have to really I don't know the answer, and I think the market doesn't know the answer. So at this point, the alternatives aren't clear, especially in a world where inflation could be an issue.
Definitely.
So the whip saw the back and forth, you know, is there a point this is something we talk about, like with our Gena Martin Adams in terms and other market strategists unlike yourself, where there's a point where there's just so much back and forth that investors are like, I'm out and there's long term implications. I don't know, help me in terms of the markets here the treasury trade. Is there a point where global investors truly say I'm out? And what is that?
Is it?
Vetcher J. Powell being moved? Is it the constant back and forth? Like, what is that tipping point where investors are like, can't do this anymore?
Well?
I think, I mean we have seen those type of actions in terms of speculative volumes. Yeah, when you look at signals, signals have really reduced and generally technical signals have become very muted.
And that's consistent with.
Sort of investor behavior as well. I'd say that, you know, even though you've seen a lot of swings, there definitely becomes a point where people just wait. And I think if we get into that situation, it could take a little bit of time for them to get risk back on the table. I think this week is a good example that you know, there are still people looking for that,
you know, recovery. They're looking for sort of potential opportunities, which means that it's not there yet, but a lot of people have de risks substantially already and they may not be coming back right away.
Katy, you want to go back to something that you said that you have your eye on, which is the status of the US as this haven, as the dollars you know, as the safety or haven currency, the US treasury market as one where people can rely on backed by the full faith and credit of the US government. You said you're watching that status closely, but let's play that out a little bit. What happens if the US does lose its status. What are the implications of that.
Well, it would be massive flow into other assets and potential for dumping of US treasuries, and what that would do is steep in the US yield curve. And that's why we've specifically seen.
That type of movement, but not in extremity.
So I think it's really a question of flows and preferences, and that could be disadvantageous to US assets, depending of course, on how extreme it would be. We've already seen massive flows to the yen and the euro, and I think as we navigate those trends if they continue much longer, that that will get people concerned.
What about the auctions, we had a five year today, we did see demand rising at that seventy billion dollars scale a five year note. How closely are you're watching the auctions? What are they telling you in terms of investor demand and still having confidence in the US government.
Well, I'd say, I mean, the auctions have been reasonable and there's been plenty of demand, so that is a positive sign.
Where we see the trends.
That are more concerning is actually in the market pricing less so in sort of the demand for auctions and sort of imagine that you know, auctions is sort of newly issued treasuries, but there's a lot of treasuries that people are holding, and I think that is going to be a little harder to measure and that will come out in sort of pricing as well. So I think it's really going to be watching if this theme accelerates more or.
If it calms down.
And we're already seeing that in the policy right now that there's sort of a backtrack to kind of avoid some of that, So that may be something that they're atally really thinking about.
Even though they may not be saying that.
Well, that's in our last minute. I mean, do you feel like things are calming down or is it that even the back and forth is calming down a little bit?
I'd say that, you know, people are becoming a little bit you know, numb to it a little bit, I'd say, but I think if you look at the size of the moves, I mean three percent moves, I know that it abated.
Some today are large moves.
Generally, I would estimate those roughly as a three sigma move.
For the S and P in a day. We have those every day now.
So so I think there's some of that that, you know, kind of people fatigue, you know, uncertainty fatigue. But there is also sort of some backtracking and some positive news that sort of maybe it's not as extreme as I had thought, and that that has an ability to kind of calm.
Investors a little bit. But I think it's going to take time.
What's more likely in this last thirty seconds ten you're getting back up to five percent, are going back down to four or below?
Oh, I think I'm definitely more of a you know, you know me, more of a bear. So I would say, like, you know, five percent seems likely to be at some point, especially if we see inflation prints later this year, bigger and outside of what people would have liked due to tariff impacts.
So that's definitely possible.
Five percent in twenty twenty five.
Possibly we'll look to see you.
The CPI moves a lot coming at us, Katie. Thank you so much tying it all up so nicely. Kati Kaminski. She's chief research strategist portfolio manager of at Alpha Simplex Group. Joining us from Boston, Massachusetts.
This is the Bloomberg Business Week Podcast. Listen live each weekday starting at two pm Eastern on Applecarplay and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.
Because, as we mentioned, i'b just out with numbers. Shares we're higher in the after hours now down about three percent as we speak. I want to bring in Brent Thale Phil he's senior technology research analyst to Jefferies. He joins us from the West Coast. He's had literally six minutes to look at these numbers.
Brett, Brent, what.
Is your what is your view? Because at first in the after hours, and look, we have to take this with a grain of salt, but at first in the after hours, investors were happy with what they saw.
Yeah, I mean it's an inline corner. You know, two percent revenue growth is not going to blow your socks off. But you know they are leading with nine percent software growth, and that was good.
The consulting business was expected to be negative. It was flat.
Everyone thought, given what's happening with Doze and all these potential economic slowdowns, the first place he would cut our consultants. So you know, that business being flat was a little bit better than the street thought.
So cash flow had a really good.
Number, So four point four billion versus two point seven estimates, so you know, good bottom.
Line, you know, mediocre in line.
You know.
Again, I think this has been a story that's just stable, steady. Arvin, the CEO has done a really nice job transforming IBM into a software company versus just a consulting, low margin company,
and we like their position. To your point, I think no one is going to see what happened with the tariffs or some of the concerns that are in place in April so these are all March border earnings, and again I think you know to your point, you're not going to feel this until the second quarter, and so I think investors are obviously excited that hopefully we get some real resolution. But if we do see u sload on, you're not going to see it in Q one numbers.
You're going to see it all in Q two. And most of these companies are probably not going to guide for it because they haven't seen it just disappear o their pipeline in the last couple of weeks. So we're keeping a close eye on it, but overall, I think just expectations cross tech. It just got too bearish our conversations with investors, institutional investors, as they just didn't want to touch any of these names to the ten foot
point and everything got over sold. And so we're now in a situation where service now is bouncing, IBM's bouncing the rest of the industry, and tech is bouncing because it's been the most hated group year to date.
Well, what's interesting too, and the chief financial officer, Jim Cavanaugh saying specifically that about fifteen of IBM's contracts with the federal government have been canceled or paused, amounting to about one hundred million in future payments. There is that, but they did I'm just looking here. So they did give though a forecast, and they do say just forgive
me as i'm looking through. In response, IBM took the unusual step of giving quarterly guidance, saying that sales will be about sixteen point four to sixteen point eight billion in the period ending in June. Analysts on average had projected about sixteen point three billions that they're willing to commit to. A second quarter revenue guidance tells you.
What, Well, again, this is a highly recurring revenue basis. So I think the more granulary the better. And I think ultimately every CFO is saying they have to put it in a little more conservatism in the guide based on everything that's going on. I mean, no one knows which way is up right now in some of the macro indicators, and so it's again, I think some of these pipelines are misleading. I think some of the software companies have done a disservice and not been a little
more conservative. And so I guess what I think they're trying to showcase is that they have obviously visibility, they have recurring contracts, and they've taken into account somebody's changes. So I think IBM has been on a multi quarter, if not now multi year rejuvenation and re excitement around the software business. And investors keep scratching their head why
does the stock keep going higher. It's going higher because they're cutting out the low margin business consulting, and they're leaning into the high margin software business and are in the CEO as a software guy. He wants to to be a software led organization, not consulting, not hardware. And there's an element of AI, and there's an element of quantum computing. Quantum is still a long ways out, but there's an element where you can own that.
So you know, stock is outperformed. It's down a little bit.
Uh.
I think just probably on on on on was it wasn't enough. I mean, stock is up twelve percent year today and it's massively outperformed almost everything I cover.
I mean almost every stock I cover is down. Yeah, well the percent.
So it's it's been a it's been a parking lot in in the UH in this storm, and I think everyone has felt like, hey, it's not gonna blow your socks off either way.
It's gonna be stable, steady.
They're they're good, They're going through a good transformation, and you know it's a it's a very well managed and well run company.
Yeah, so that's a that's a safety spot.
You know.
Does that wear off?
Now as we go back we get terriff resolution? Is that going to lag on the on the up? I think the answer is yes. I would much rather own Amazon, Microsoft, a handful of other names than IBM right here.
And I do just want to point out that the company also reaffirming it's fiscally your forecast, so there is that as well.
Okay, hey Brenta, I'm curious about the move toward more software and services, less so with consulting, less so with hardware at IBM, given that Arvin Krishna, the CEO, wants to do that and has been doing that. Who are their biggest competitors out there that they're selling against?
Oracle, Microsoft, all the hyperscalers, Google, Microsoft, Amazon.
You know, so like it's you know, I think the way you think of it is, oh, IBM is.
Very big into open source, right, and no religion is right, but there are multiple religions same thing as software. Right, there's closed source like Microsoft, and then there's open source like IBM. And IBM firmly believes in an open source world, and so a lot of big enterprises believe in that world world uh and and I think IBM has a
really good perspective. They also do very well in regulated industries government financial services, where you have a lot of big heavy on prem workloads, right, they don't move them to Amazon or Google Public cloud, and so they work with some of the largest organizations out there. So they
tend to thrive really well in that environment. And so you know, the competitors you know, on the cloud side are Amazon, Microsoft on the on the on the traditional enterprise side, it's Oracle, uh and and and.
Others in that category.
But I think you know what what IBM has said, and I think this is a good strategic change is Look, we can't do everything with our own portfolio.
We'll sell Salesforce, we'll sell Adobe.
Well, well, we'll partner.
We want to lead with our software, but if it doesn't work for you, we'll lead with others. It's like a contractor, like no one should just use their own wood, Like I'm gonna use someone else's would in Windows and this.
Win from Anderson might be better than this window from.
Marvin, So like, let's sell it all and that helps their overall credibilities being independent, having driving the consulting business. So it's a you know, I think it's a good strategy. Is it the one again that is going to be hyper growth? In the excitement in the world the way the world is going.
I don't believe so.
I think still when you look at the growth rates inside Microsoft growing double digits, and software and growing Azure at thirty, Amazon still growing their aws cloud business and the high teens, these are way more exciting growth businesses.
So, you know, again, kudos to IBM.
I'm I'm a huge believer of how they've architected this. From a stock perspective, I just think there's way better ways to play offense, especially in a world that has gotten hit hard in tech.
You're going to make a lot more money owning some of these other names in tech.
All right, Brent, phil thanks so much for joining us on IBM. Brent Thill is senior technology research analyst. He's joining us from the West Coast.
You're listening to the Bloomberg Business Week podcast catch us live weekday afternoons from two to five eas during listen on Applecarplay and Android Otto with the Bloomberg Business app, or watch us live on YouTube.
Tesla's shares rising today by more than five percent. The big news last note on the earnings call was that Elon valved to pull back significantly from his work with the US government pay more mind to Tesla, and that seemed to assuage investors who were concerned about the carmakers worst quarter in years. We've got Ross Gerber back with us. He's president and CEO at Gerber Kawasaki Wealth and Investment Management got about three point four billion dollars as of
the end of last year under management. He joins us once again from Santa Monica. Ross, we had you on the program yesterday ahead of the earnings call. Now the call is done. You set this threads yesterday that said ahead of the call, that said, this is the worst performance in Tesla's history. Elon, everyone about the tillions of tam and robots taking over the world. Anything to get you not to look at the facts. As Elon darts off to Xai after he announces he's leaving dos, Tesla's
in bad shape. I'll just leave it there. I'm not going to read the whole thing.
I think I think I said it was a hot mess or something something like that.
Let's just say that. Let's just say that, we'll.
Keep it at that.
Do you now that the call happened? Do you stand by that? Did he did he managing your view to move people's attention away from the cars.
I'm surprised people aren't like, how did you know? How did you know?
And I was like, well, because he's a special government employee, he has to leave by May. It's not like he's doing some gift to anybody. He actually has to leave the government by May. But I think this perception that somehow Elon's going to come back to Tesla and be working at Tesla Moore is a false perception because I'm also involved with Xai, and I'm an investor in Xai,
so I know exactly what's going on there. And they just merged with Twitter and now they're raising even more capital to even get bigger to compete with Chat and all the other llms, and and that's his main focus, and that's what he really cares about. So I think, you know, it's nice what he says, but it's what he does that will ultimately matter.
Well, and you know, we love talking to you, and we have for a few years now, and you know we always remind and I always go here that you know, you're not only just an investor in the company or various Elon properties, but you have owned Tesla.
He's got a cyber truck, multiple cyber truck.
You got a cyber truck.
But I drive a cyber truck.
But he still drives a cyber truck.
It's not so easy to drive a cyber truck, is it anymore?
I drive it right down the middle of Woke Avenue, you know what I mean, which is where I live. And you know, fortunately everybody else has a Tesla, so it's kind of hard to yell at a guy and a cyber truck from your Tesla, right.
Yeah.
And this is.
Probably the biggest issue that I have is I feel like Tesla is not Elon's company. It's a public company that's owned eighty seven.
Percent by the pub not Elon.
And now the perception going from being this climate friendly, changing the world for a better place company to being associated with Elon Musk and Donald Trump is really one of the saddest things that I can imagine for Tesla's brand. So I kind of am like fighting back from that because I'm like, no, I drive an environmentally friendly truck and you're yelling at me from a Ford f one
point fifty. And Henry Ford was an actual Nazi, So I'm like, this is really odd that an oil loving Nazi driving car guy is flicking me off.
You know.
Do you like the cyber truck. There's a lot of reports online about parts falling off, though I have read a lot about how people love it. Hannah Elliott love driving it around last year.
Do you like it?
You know?
And this is Tesla should be paying me to do ads for the cyber truck because I actually love the cyber truck.
The cyber truck saved my life during the Palisades fire.
I can give you five reasons why you should have a cyber truck, and I it also tell you five things that are disappointing about the cyber truck that could have been better or could be better in new versions of it to make the car sell better, you know.
So I know the truck in and out and.
Part of the performance on the on the manufacturing side is very disappointing. I have not had those problems personally. My truck has been solid.
You know. I let some kid drive it. He crashed it. They fixed it quickly. You know. The car has been great. The car's been great. But I can't tell you how important it was to.
My survival actually during one of the hardest periods of time of my life.
Is it because of the air filtration? Like what, yes, how did you use it?
Yeah?
The al filtrations what saved my life because I was in the middle of the fire and I couldn't breathe, and so I was trying to fight the fire like an idiot.
And but this was before the fireman came and saved me.
And it was so smoky that my and I had an N ninety five mass that I was like dying, and so I would like jump into the truck and I had the Hepa filter thing running and it worked, you know, and so I could breathe, and then I would jump out of the truck and then like try to deal with fire, and then I could only deal with that for so long before I have to get back in the Other thing about the.
Truck, you know, was the Tonu.
You know, it's a hard tone new So when I when I put all my stuff, I was living out of my truck for two months and it locks. And this is a really nice thing where most pickup trucks don't have a way to cover and lock everything in your bed, and so I was able to basically keep
all my important belongings safe in this truck. And one of the things that happened after the fire was people looters were attacking people's cars knowing that they had all their stuff in it, and a lot of people got stuff stolen out of their cars even after they dealt with the fire, which has sucked, you know, And that was.
Not a problem I had.
So, you know, there are many things about this truck that are great, and the story just isn't being told.
Are you okay, your family, your loved ones, okay?
Now, yeah, my family's great. I'm not okay. I guess it's the best way to put it. I've moved back into my house. I'm one of the few people that survived this fire. The fire ended two.
Blocks from my house where I fought it, and the fireman ultimately stopped it. And so my neighborhood's you know, normal, except nobody lives there yet except for me.
You know.
I was able to fix my house pretty quickly, and I felt it was best for me my family to move back as quickly as possible, and that's been true.
You know.
But I live a very surreal life, you know, right next to the edge of hell, and I see it every day and it sucks and and you know, for me, I'm mostly suffering from you know, some level of depression and you know, PTSD from the event itself, which was really traumatic.
Like I don't recommend fighting fighters.
We can only imagine, and we from Afar watching, you know, certainly felt it, but I can't even imagine seeing it firsthand.
But I'm doing better, you know, I'm doing better.
Good, you know good.
It's hard to see it every day though, you know.
Yeah, it's hard, no easy turn, and I just I want to go back to something that really struck me and we wish you well, you know that, you know that.
No, I'm good.
I'm compared to so many other people, so.
I know, I know, I know, but still, you know, life keeps throwing us challenges, and some are tougher than others. Ever, well, speaking of challenges, and forgive me for this segue, but one of the things that struck me. You know, we've been lucky to talk with you. This is, you know, our second time in the last twenty four hours, and one of the things that continue to kind of tim
and I want to know more and more. And you really shed some great color and I want to share it with our audience who are watching and listening right now who may have missed it yesterday, of what you had to say about what's going on in terms of EV's in China. I think we don't have any concept of how sophisticated, how good they are getting on stuff like EV's and other things.
Well, you know, once again, I haven't been to China.
I only know because I follow all the car companies in China, and I you know, there's a big mis or perception about China. I think, and you saw it a little bit with the trade negotiations, like they're somehow behind us in technology, and like we're holding back our technology from them and that will slow them down.
That is a wildly incorrect way to look at China.
If we hold our technology back from China, what happens is they develop even better technology because we forced them to in a way, you know, and they're extremely determined, intelligent people who will work extremely hard to achieve whatever goal they need to achieve.
And so when Tesla came.
To China, China was Tesla was the first company China said you can have one hundred percent of ownership of the factory. Come here with open arms, and we had never really seen that before with companies we're trying to always made them do a JV where they would own half.
The company kind of thing.
And so the part of that strategy was to send a whole new generation of Chinese workers to work for Tesla to learn how to do stuff.
And they have and they have, and so you have Chinese.
Entrepreneurialism, which is pretty good for a communist country.
And then you add in know how and government support and you get a pretty.
Potent way to develop pretty good vehicles.
And that's what they've done.
And so China's built a whole new infrastructure around electric vehicles, which was actually my dream for the United States.
So it raises the question raws. Since China's evs are so good, should and those are not available here in the US, should investors really think about the US being the only market for Tesla because it can't compete outside of the US.
No, No, Tesla can compete and can it?
Can it compete on price? Can it compete on quality?
It can't. You know.
Once again, if Tesla had a focused CEO who wanted to beat the Chinese composition, they could have released that cyber cab as a model too with a steering wheel on it, and made that thing for twenty five thousand dollars. Like people would buy it. It would be really successful. The problem with Tesla is they I want to sell cars any It's fairly obvious. In fact, they work really hard to convince people not to buy their cars. I mean it's like the CEO every day talks people out
of the products. So the real issue to me is, you know, if you don't really want to sell cars and you want to sell cab rides instead or robots, boy, that's going to be a long time till it makes one hundred billion in revenue.
You know what I mean.
Yeah, So the Chinese are like, okay, we're fine with this, and Tesla's falling behind and they're attacking everywhere they can. The Europeans and the United States have a lot of trade barriers against these Chinese vehicles because they're inexpensive and they sell very well. And I was in Mexico City. All you see are BYD's. They can't afford a tips, you know. And so I think quality, you know, Europe and the United States more.
Europe has always won on quality of vehicles.
Like design and interior style and things like that, where China seems to be behind on that. But when it comes to technology, China seems to be well ahead.
All right, seconds left here, Just to wrap up, Ross, Elon gets into your cyber truck. Not exactly, not exactly cark karaoke, but you guys have a conversation.
They know each other. Elon has responded to Ross. I've seen the tweets. He knows Mess is an investor in Xai.
I know he knows you. So what's the thirty second question? You ask him?
Why do you think he said he's coming back to Tesla Because he knows. I've been saying it every.
Day for like months, So that's what you ask him.
Would would I say to Elon? Yeah?
Seconds, I said to Elon when I when I first met Elon long ago, when he was tweeting a bunch of garbage and Tasla was struggling. I think it was the end of twenty eighteen, and like I was like, dude, you got to stop tweeting this garbage.
This was like seven years ago, you know what I mean? Yeah, And I was like, how is this the mission?
And we got to raise money and we got to save Tesla, and like this is just not helping. And I remember him looking at me sort of like, yeah, right, sure, like you think I care what you say Twitter?
And I was like please, just like I'm just saying this is nicely.
And I remember, because I was standing with somebody from ARC Investments and people were pretty surprised at it. Confronted him about Twitter, and I was a little bit nervous because he's a big guy, and you know, I like Elon at the time, and so I was trying to be nice, you know. And of course he didn't stop tweeting, and he raised money the next day, which we invested in Tesla at that time, and it was extremely profitable.
And I would say the same thing to him today and it's.
Like I don't have to agree with your opinions in your viewpoint in life. But do you have to share that with everybody all the time. It's not necessary and it's not helping you be successful. So why share opinions that are so unpalatable to so many people when it's completely hurting you.
From achieving your goals? That's what I would say.
All right, good stuff, Elon, if you're listening, we'd love to hear what you would respond to to Ross. Ross, thank you so much for all of it, and for being so honest and real. Ros Gerber, He's present, and stay safe, be well, of course, of Gerberg Kawasaki Wealth and Investment Management out there in Santa Monica.
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