Tesla Shareholder Gerber Pursues Board Seat

it's time for Tesla to grow up. Gerber's firm holding about four forty shares as of the end of last year of Tesla. That's according to our data. Ross's co founder president CEO Gerber Kawasaki Wealth and Investment Management. He joins us lucky for us via zoom from Santa Monica, California. Hey, Ross, good to have you here. Your fund. By the way, your e t F is that more than fourteen percent year to date, Tesla's your biggest shareholder, at least according

to our data. UM talk to us about pursuing a board seat on Tesla. Why do you want to do it and what progress have you made? Towards that end. Well, I think mostly it's because I feel like it's time for Tesla's board to sort of take a more active role in some of the main issues that involve Tesla, which seemed to be i don't know, sort of ignored.

And a lot of founder led companies, you know, grow to be very, very successful, um, and then they reach a point like where Tesla has, where certain things just need to change. And and I don't think these are you know, bad things. I think it's a good thing, um for Tesla to focus on, you know, really three main things that you know, I'm most concerned about, which is, you know, public relations, marketing, and lobbying so that things like full self driving you know, are you know appropriately

understood by the public UM and the risks and rewards UM. Secondly, I'd love to see Tesla focus on the customer. The consumer is constantly having bad experience is with Tesla service and and and I just think somebody needs to really be focused on the customer over at Tesla. And then thirdly,

a secession plan. Um. Ellen is clearly running Twitter here and that's his priority, which is fine, But if something ever happened in Eilani I mean, he is working, you know, like twenty hours a day, you know, you know, what's what's the plan for Tesla. So these things don't seem to be answered from Tesla. And and so now I'm pushing for board seat because I think it's time for there to be some accountability to these issues. So, Ross, you mentioned the PR situation when it comes to Tesla.

To what extent are you concerned about Elon's impact on the company's PR. Well, I think that you know, for a long time, we got a lot of free advertising out of Ellen, and there was a perception of Ellen that was much more positive today now that Ellen runs Twitter and has taken many political positions, and I think it's his right to do that. But it's certainly unfortunate how many customers and shareholders here at least that I know, and which are a lot that really have now taken

a negative you towards Ellen. And it's really kind of sad to me. And the bottom line is it's time for Tesla to build its brand around Tesla and about you know, the values that Tesla really stands for and versus what Elon's values are. And and so I don't really have any issue with his per se values. But we're in the selling car business, and you know, I don't know if that's what he's thinking every day when

he gets up and tweets. So I think Tesla can take an active role in shaping the public perception of its wonderful products and services. Hey listen, are reporting via Ed Ludlow and Caroline Hyde. Um noted how you have a good relationship with UM. Some of the biggest shareholders in Tesla, someone who I've talked to a lot, Kathy would have our investment, and also Baily Gifford. Have you have they said that they would support you in your

pursuit of a seat. Well, I haven't talked to any of the institutions yet because I haven't you know, I'm still officially got to send out my letter and get this going, which you will do that right now. Yeah, I will definitely be doing that, and and we're certainly and that's one of the reasons I'm running is just so that there is an option for people. I'm not

like doing this for any like personal gain. Let me tell you, it's a very time absuming process and and most of my clients and and friends you know, are sort of like, we want you focusing on our money, not running Tesla or dealing with Tesla. And that said, you know, I just feel compelled that there needs to be a choice for investors, individual investors, so that they actually even know somebody on the board. You know, a lot of people are like, oh, we support Tesla's board currently.

I'm like, do you even know who's on the board? And they're like no, And would you like, would you like to see there's another person. Ellen's obviously on the board, but Kimball Lusk is also on the board. Would you like to do Do you think it is just a board of people who really like Elon? And there do I? I do? And granted I really like Elon too, so it's you know, I'm not uh, I'm not a negative person here, and this is a friendly activist. I'm trying

to help Tesla in a way that they're not good at. Okay, So there, you know. I'm a marketing pr kind of guru. That's kind of my thing, and and I think I could help the company dramatically, and I've been doing it for a long time behind the scenes, and a lot of people don't realize that that behind the scenes I've been you know, advising them for years and years and years about the way they handle many different elements of

their marketing and PR. And that said, they've implemented a lot of these things over the years and it's been very successful. But I think at this point, you know, Tesla is now a six billion dollar company and and things like. You know, there was an anti Tesla ad that was run during the Super Bowl and how this even happened is mind blowing to me. And then there was no counter to that, and if you look at the headlines, they're just very misleading and it and it

becomes very tiring. Well, Ross, I know you mentioned that you are a fan of Tesla, of course, but you would be referred to as a dissident shareholder if this went through and management did not support your efforts, which is interesting here. Um, I wonder have you spoken to Ellen No. Last time he spoke was on a Twitter spaces in December where I addressed many of the issues that I had and he addressed them back in a

way that I was pretty happy with. But you know, we still don't have a CEO of Twitter, and that was one of the things, you know, I was hoping for you know that he would, you know, refocus on Tesla and find a CEO of Twitter and and and maybe even work a little bit less on creating you know, political comments that creates so much dissonance among so many Tesla owners. Um. But you know, I don't expect him to change his opinion or what he wants to say on Twitter. But I do think his focus. I mean,

he's working three jobs. He's admitted to himself, he's exhausted, he's working seven. But in that Twitter space that you mentioned, Ross Musk did tell you that Twitter is about ten percent of the complexity of Tesla. Did you believe him when he told you that. I I think that I think he meant that after he's done dealing with what he's dealing with. But I don't think he's right. I

think Twitter is a beast. It's super difficult to manage, and we're coming into an election cycle very soon, and and boy, it's a hard thing to be Twitter during an election, clearly, And so I just think this is a very big task that he's taken on. And and you know, once again, I I hope he said he would get a CEO for Twitter, and and I think

that's one of the things I'm pushing for. The sooner the better he can have more help and leadership at Twitter, the more he can refocus on what's important to me, which is getting the cybertruck out and scaling production. And we've got battery production scaling so in Mega pac So it's a very important time for Tesla, and and and I just think he's a human being. And at some point you can't work seven days a week, twenty hours a day. UM. A couple of quick questions, because we've

only got a couple of minutes left. Um. Tesla shares are up about sixty year to date, they're still down more than from that high back in early November. Ross. First of all, have you been buying at all this year and adding to your position? Yeah? Within my fund, we've added to our position, so we were able to buy Tesla shares cheaper to add to our position. Um when it went down. UM. So you know last year, this year, last year, this year, and and at the

end of last year and early this year. UM. So you know, I can only really comment about my public fund because what happens in my firm, you know, varies by client and risk and all these other factors um but within my fund we've added to Tesla, it is a ten percent waiting currently, a littless than ten percent waiting currently, which is the highest waiting that we have for a position. So Tesla's are number one stock. I

love the company. I think it has a wonderful future, but I would like to see some changes in the way that they're running the business. Final quick question for you. A lot of retail investors, as you know, have a p of their funds in Tesla. Where do you see the biggest upside for them? Well, right now, I think the biggest upside for Tesla is number one, successfully scaling their product in Berlin and Austin of the model why, number two getting the cybertruck out this year at some point.

And number three it's clearly you know, mega pac production. You know, energy storage is going to be a phenomenal business for Tesla over time, and and now they're ramping this business, so trucks and mega packs. It was really the next level for Tesla, and and so you know, we're on the verge of a very good growth stage for Tesla over the next several years. But I'd love to see them really focused on their image in the public.

Ross too quick questions Twitter. If he wasn't pursuing Twitter, do you think you and I would be having this question very quickly? No, if he wasn't involved with Twitter, I don't think we'll be having this conversation at all. And you still want Ellen running this company? Yeah? Absolutely, pcent. I mean what I really wanted him refocus back on Tesla. Listen, so appreciate your time, great conversation, Ross, and looking forward

to seeing what comes next. Um Ross Gerber, President, chief executive officer at Gerber Kawasaki Wealth and Investment Management, investor in Tesla. It is his top hole. We heard him say, tempercent waiting in that fund of his and also an owner of the cars. Joining us via zoom from Santa Monica, California, you're listening to the Bloomberg Business Week podcast. Catch us live week days from two to five pm Easter on

Bloomberg Radio, the Bloomberg Business Band. You too. You can also listen live to our flagship New York station, Just Say Alexa Play Bloomberg e Love and Didi Promising and watching Blomberg Business Week. On this Tuesday, Carol Master along with Madison Mills. So as technology seeks into every walk of life, an increasing proportion of Supreme Court decisions require at least a basic literacy and subjects that may not

come naturally to the aging members. Not my words, they are the words of Bloomberg's Gregg Store, who writes about it. The upcoming new issue of Bloomberg Business Week out on newstands later this week, already on the Bloomberg and at Bloomberg dot com slash business Week. Greg as you know, Supreme Court reporter here at Bloomberg. He joins us from our nine and nine one studio in Washington, d C. Also with us, the editor of Bloomberg Business Week to Webber,

he's in our Bloomberg Interactive Brokers studio. I've often thought about this, and we talked about this with lawmakers, like do they understand kind of all the high tech stuff that they're legislating. Well, that's what Greg came to us with UM, and this is just one of those ones where he really picked up the phone. He was very excited.

He was like, Joel Children, I got to talk to you about this idea and and it turns out that, um, this is not a totally new idea, But it's really relevant right now because of the case they're gonna here next year, which we will basically focus on section to thirty and what that means for the future of the Internet. Um, so rewind the clock a little bit for us, Greg What what happens when Elena Kagan and Stephen Bryer sit down and play Grand Theft Auto like they did about

a decade ago. We just soak in that moment for her. Yeah, I wish I could have been a fly on the wall for that that one. Yeah, this is a case about a decade ago. It was a California law that banned the sale of violent video games to my ears, and so Justice brier who was then in his early seventies, and Justice Kagan decided, we don't know a whole lot about violent video games, so we're going to check them out.

And so, uh, they had it set up in Justice Briar's chambers and went down there and played Grand Theft Auto to try to learn a little bit about it. And as it turns out, according to Justice Kagan, she was a lot more enthusiastic about it than he was. He thought it was really awful and disgusting and she

was like, next round, next round. Uh, you know, we have more, we have more reporting to do on Kagan's video game obsession, if it, if it became that, you know, including maybe what console she's in do But to keep it back on the Supreme Court. Um, you know, we're obviously Briar's not going to be on the bench when

they hear this case next week. But what what do they have to do in order to get ready for a big case like the one they're going to hear when maybe they don't have as much expertise as people in the industry might. Well, the short answer is they do a lot of res with a lot of help from people around the court. You know, all of them have four twenty something are generally twenty something law clerks who can help him out. They've also got a whole

courthouse full of people. So there's a case back in the late nineteen nineties having to do with restrictions on posting adult oriented material in the way that children might see them. And so i was back before the court was really connected to the internet. And so they set up a computer in the library where justices and their clerks would go there and and uh, you know, put in searches to see if you know, pornography popped up

or something like that. UH. In a more recent case, I actually talked to Justice Bryer interviewed him last week, and he said, this is a copyright case involving Google and Oracle, and he said he just spent a lot of time trying to understand the Java programming language and how it worked, because that was central to the case whether Google infringed Oracles copyright and UH spent a lot of time. He has a very lengthy explanation in his

opinion siding with Google. UH that for the most part, was pretty well received in terms of understanding the technology at issue in the case. I would love to be on the fly, a fly on the wall when they try to teach lawmakers about TikTok and the importance of that moving forward. You got to open it and spent about five hours a day on it. But in all seriousness, Greg, you know, to be fair to scout this. This is

an issue that plagues a lot of lawmakers. We always hear these funny sound bites from members of Congress too, when they're you know, in a social media hearing or crypto hearing for example, we remember dog Coin from the ft X hearing the Internet runs on tubes most yes, exactly exactly. So how how does Scout is compared to Congress when it comes to understanding the Internet. Yes, it's a good question, Madison. There there are certainly some examples

of the Supreme Court saying similar type things. Maybe not quite as bad as you know, the Internet being a collection of tubes. But you know, over the years, the Supreme Court is asked some questions during arguments that suggests, yeah, they may not understand the technology. But I think there

are a couple of important points. One, the Court has gotten younger, so you have more justices who are uh, you know, in their fifties rather than in their seventies and eighties, or maybe understand the technology a little better.

Uh they have kids as well. And secondly, regardless of the age of the justices, for the most part, when I talk to people, actually almost entirely when I talk to people, they said, despite some occasionally uh confused sounding questions, the Court generally does a pretty good job by the end of the day when it puts out the really important thing, which are its opinions, And no doubt that does get some help from the law clerks who maybe

understand the technology better. Uh. But but for the most part, the court based on the people I talked to them, My reporting gets better grades than than a lot of members of Congress do. Greg. So, what's at stake with the case that they're going to hear next week and what exactly is it? What are they gonna hear? Yeah, so this is as you said, this is an argument they're going to have on a Tuesday of next week Tuesday, and a somewhat less important case case on on Wednesday.

The Tuesday case is all about the saying called Section to thirty, which has been around sin It basically shields social media companies other Internet companies from liability because of posts put up by their users by third parties. And that has basically served as a very broad shield for

Internet companies. And this is the case involving a lawsuit by the victim, the family of a terrorism victim, saying Google, through its YouTube service, UH, basically recommended terrorists content, terrorists videos and provided support to ISIS. And the question is whether that lawsuit can can even get in the door. If the Supreme Court says yes, it can get in the door. We're carving out a bit of a bit

of an exception to section to thirty. Computer companies social media companies say, we are really worried that there will be no stopping that and and that that will force us to be a lot more restrictive about the content that our members are users can put up on the Internet because we're worried about being sued over it. Okay,

so what does industry have to say about this? And this won't be the only two thirty case that they hear, right, well, so, so they have a two thirty case on Tuesday, as they said, there's a second case on Wednesday involving Twitter, and it's actually kind of a related question about whether the family of a terrorist victim can sue under this

law that's it's called the Anti Terrorism Act. Uh. You know, the industry is basically saying this case has the potential to really transform the Internet, and not in a good way. It will force us to be it could force us to be censors to a large degree, it could restrict speech on the Internet. And they are arguing that there's going to be a carve out in section to thirty.

This is really something that Congress ought to be able to do, because it can be a lot more precise rather than the kind of the blunt instrument of a Supreme Court opinion. Let's just hope they haven't playing video games exactly. Oh my god, that image. Um Gregg Store, thank you so much. He is, of course, Supreme Court reporter. Here at Bloomberg News from our not and I One studio in Washington, DC, are thanks to Joel Weber, the

editor of Bloomberg business Week. This story, as we mentioned in the upcoming new issue of Business Week, out on newsstands already on the Bloomberg and Bloomberg dot Com. You're listening to the Bloomberg Business Week Podcast. Catch us live week days from two to five pm Easter on Bloomberg Radio, the Bloomberg Business app band you too. You can also listen live to our flagship New York station, Just Say Alexa, Play Bloomberg, e Love and Verdi. We mentioned higher price

as we mentioned inflation. So this is a perfect segue to our next story, which is a most read on the Bloomberg. It's the Bloomberg Big Take. It's about car prices in the US hitting a record. I want to get right to it because Bloomberg Detroit. Your chief David Welch joins us via zoom from Detroit. David, good to have you here with Maddie and myself. So tell me what's going on. Although it's not a surprise because my husband I were looking at car prices and we were like,

oh god, oh my god, everything's expensive. Yeah. Look, it's it's started with the pandemic because you had production constrained. Obviously, factories shut down and got worse with the semiconductor shortage, and now you've got high interest rates. So car payments are at a record seven seventy a month for new cars and about five fifty for use cars, which is quite a lot um. So what has happened up there's because of the semi conductor shortage. Production was slashed at factories.

Dealers had shortages. They're often selling vehicles right off the trucks as they came in, prepping them and handing them over the consumers who paid for them weeks before, and so dealers were charging above sticker. Automakers were getting maximum price. There was no rebating, no zero percent financing deals, and they were also raising prices over the base. You know, the M S R. P has gone up about over for a lot of vehicles over the past to three years.

So it's all very expensive and it could come down and probably will soften up as uh sending conductor production gets back and it is coming back. But in order for vehicles to get as affordable as they were three years ago, vehicle prices will have to basically crater, and I just don't see that happening. I think they will come down a bit, but I think it's gonna be We're gonna be paying more for a while, and a lot of middle class people cannot sensibly afford these new cars.

It's like you said, the average monthly payment of seven hundred and seventy seven dollars is insane. Another stat that was jaw dropping to me of the market for these cars is of people who make a d fifty thou a year. Is that right? Am I saying that statistic? Right? That is crazy to me. I wonder people are paying a thousand dollars a month a third of the new car buyers. That's that's just it's so it's wild, wild numbers here. I wonder just outside the norm these numbers are, though,

Could you put it into contact for US. So for most of the past decade, the average new car monthly payment was bouncing around four ten a month, and and there's a reason for that that the economist and Cocks, by their measurements, about four hundred a month is what middle income households should be paying for a new car payment, so that they can responsibly put some money away, safer college education, you know, pay their mortgage, healthcare bills, the

rest of it. That that's sort of a responsible payment, and for the longest time, it was where consumers would give pushback above. So those payments stayed around at that level for at least ten years. In fact, they were lower than that for a long time, and that's why you saw four or five dollar rebates and financing deals and a lot of leasing. Leasing is another thing that's

that's been on the decline. Once car companies had a shortage and they didn't have to discount, they realized, hey, we make a lot of money selling fewer cars at much bigger David, going to stick to that, David, I feel like everybody took an economics one on one class, like supply demand, right, so you know, reduce the supply, there's going to be greater demand and you can keep up the prices. I almost feel like it's the airline model,

like taking out capacity to some extent. Is it going to be a different model going forward in terms of the auto industry, And is some of it also going after those higher margins to help pay for the transition to renewable fuels and alternative energy vehicles. I'll take your last question first. It is car companies need to generate a lot of cash to pay for battery plants and electric vehicle platforms and motors and all of that stuff.

It's a very expensive transition, and they're ironically paying forward with the expensive pickup trucks that get very bad feel kind of. UM. So that that's absolutely true. They need to generate as much cash as they can. Whether or not they will stick to this model is sort of the That's like the six hundred and sixty billion dollar question. And I picked that number all because that's the revenue they got to, which was greater than the year before

while selling a fewer vehicles. UM actually brought grew revenue while selling fewer cars. UM. They're going to try. It only takes one or two competitors to break ranks. And start discounting. So here here's what I think will happen. UM car companies used to carry on average eighty days worth the vehicles on de Ro Watson in the pipeline, and that's when they were in the habit of discounting

like crazy. They ran their factories as hot as they could build tons of inventory, discounted it to sell it. They want to keep like fifty or sixty days or maybe forty or fifty days. That way, they're not discounting as much to move it. They can get better pricing, but they do have better choice for consumers, and people aren't going away frustrated. So I do think we're at a peak for praising right now. It will soften up

and come down. I don't think it's going to come crashing down to the point where we're seeing four a month average payments. Again, I think affordability is going to be an issue going forward, unless there's we do go into a recession and things have to go back to normal just to move vehicles. Uh So, if we do stay out of recession, and you know, employment levels are great right now, everybody's working, I think we're gonna have a tough time getting back to those normal price levels.

One other reason to Toyota and GM only think we're gonna have enough semi conductor chips to make about fifteen million vehicles for the US this year, and those normal days with four month price payments, we're making seventeen seventeen and a half million vehicles a year, So we're still all the way out of the chip graces. Yeah, and that's another critical factor. Does market share come into play here?

This is always what I cling to when I'm hoping that I'll get to see some more friendly prices for consumers. You know, if every single automaker is gonna raise prices, is there not an opportunity for someone to come in and gain some more market share with a cheaper option. There is, And that's why I do think we're going to see prices come down. That the trouble is, the story is. And look, I've got plenty of critics online saying, oh, the car companies are gonna go back to their old habits.

And they might, but I think it will take a while because we're not out of the woods on semiconductors, and I do think they're going to try really hard to maintain pricing and you will get in this. They're going to look for a sweet spot where they can get a good get better volumes than they have in the last two years, but also better pricing and and they probably know what that sweets, but is in fact, I think it probably is around fifteen million vehicles a

year um. At some point they may have to get in because we also we don't have a lot of used cars coming back. The other side of this is this year will have six hundred thousand fewer used vehicles coming off of least because for the last couple of years of buyers at least, and it was traditionally thirty so you've got a big drop in leasing. And leasing has always brought three four year old vehicles that were still in pretty good shape a little miles coming back

into the used market. So there's there's going to be a bit of a shortage from those off police vehicles that will even though use car prices are also softening, but they're sort of it puts a little bit of a floor under it. So again all these factors I look at, Yeah, vehicle prices will come down, it's not going to be crazy sellers market forever, but they have to come crashing down, and I don't think they will

in the next you know, eighteen months or so. All right, so I'm going to put off buying a car for eighteen months at least, grateful to take the subway, which is not something I feel that often. So in that way, I'm really like thankful for this story. I lived in New Jersey when I worked in you know that the headquarters at Bloomberg New Jersey transit in the subway. It made me to love sitting on the GW bridge and like many trying to get across to I think I'm

talking to working it so bad. Yeah, um, David, thank you so much Bloomberg to Tripio chief David Welch. As we said, it is the big take on the Bloomberg and you can certainly catch the Bloomberg Big Take on Bloomberg Radio every evening at eleven pm Wall Street Time. Aren't you listening in watching Bloomberg Business Week Carol Master

along with Madison Mills, And this is Bloomberg. This is Bloomberg Business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus blomal Business finance and tech news. The Bloomberg Business Week Podcast with Carol Masser and Tim Stinebec from Bloomberg Radio Roomercael the Journal Now, but you let me drive? Oh no, no, no, no no, who's going home? Please? I'll do the riding revels. I want to drive. It's good question. This is the

Drive to Clue Radio. All right, everybody, Just about seventeen minutes left in today's trading session. Carol Master along with Madison Mills, live in our Bloomberg Interactive Broker's studio, streaming on Bloomberg Originals and of course on YouTube. Let's get right to it. You heard Charlie breaking down the numbers. But let's get to our Drive to the Close. Guest, Doug Sioca is back with us. He see you, and partner at our Capital Partners. They've got roughly a billion

dollars over a billion dollars in assets under management. And Doug is based in Leewood, Kansas, and that's where we find him via zoom. And I am completely disappointed because I don't see any of the red and yellow on you. Come on the Chiefs one, the Chiefs one. The town's in an incredibly celebratory mood. We got clients and friends in Philly, so we wanted to keep a pretty neutral posture. But I'll tell you what it's it's a great time to be in Kansas City. We absolutely love this team.

It was I don't blame you. It was a great game and they are an incredible team. Um, incredible market. How do you describe it, Doug? Yeah, I mean the mark has been very resilient and undeniably and you know, I think it's it's interesting because, um, it's almost pollyannish

to suggest that a soft landing is possible. It's not very popular opinion, right, But when you take strong employment combined with moderate wage growth comblined combined with a shrinking balance sheet, declining product inflation, improving non housing services inflation, and pretty resilient profitability, resilient profit reporting coming out of the fourth quarter, I don't know. I think you can make the case, and I think the market's reflecting such.

Can I just say, Ken Rogoff, I've been obsessed with this interview he did on Surveillance earlier and he said, thanks, soft landing without the landing, I mean, and this is that kind of whether it's the rolling recession idea or lack there of a recession like this whole idea that everybody is kind of confused, UG that we are seeing still that strong labor market, that maybe we won't ultimately see growth come undone um despite the FED continuing to

raise rates. Yeah. I actually saw an interview this morning and it followed one by the Richmond Fed President's Top Barkin, and he made a good a couple of great comments in their carol. But the two actually wrote down one was, you know, managing markets as a fool's errand, and I feel like the FED governing body feels like that is a responsibility of theirs to assess their commentary on interday activity in both the VIX and the SMP hundred, I don't know that that's a wise allocation of their time

and effort. But the other the comment that that the President Barkin made was make policy in the economy you are given, not in the one you wish you have. And I think that just so critical if you're going to retain that that that UM emphasis on being data dependent, and I think having that flexibility is inherit in crafting good monetary policy. So, Doug, if it is a fool's erron to try and get the market to kind of

align with the Fed. Is there anything the Fed could do to kind of shake the equities market and get get equities on its side on this kind of like hawkish anti inflationary path. Well, I think, Maddie rate the market is a leading indicator. So it is really interesting to remember because they raised rates for the first time thirteen months ago, and and then and I guess it's probably maybe fifteen months ago. They're not quite us said

the other way eleven months ago. Uh FED President Bullard came out and he said something that absolutely shook the market to its core back in March April last year, and he said, hey, look we're nowhere near to being done. We're actually just getting started, and we may raise rates in bunches. In fact, we may raise rates by seventy basis points or so at a meeting, because this is a direct quote. We did that n and the world didn't end. If you remember that, well, they didn't go once.

Last year. They raised rates by seventy basis points four times and the world didn't end. But it was a very invisible year for equities. So I think the equities were anticipating just how core being shaken as you mentioned that it could actually be experienced by some of that fed rhetoric in implementation. So it got out to a large part. But go back to like this whole idea that typically in a higher rate environment, right, that you don't see the tech names or the NASDAC do well.

And yet it has been and so that seems a little confusing. But going back to what Rogoff said, you know, and just like you were talking about, you know, we're seeing resiliency when it comes to the economy. We're seeing it when it comes to some of the numbers that we've got in terms of corporate profits. Surprisingly so, and so does that provide a floor when it comes to equities. Maybe we don't see it a really strong rally for

a while, but maybe we've created a floor. Could be care It's a great point, I think obviously, as quickly as the NAZAC has gotten out of the gate, it could be the underwind of some shortcovery that took place, combined with than expected proper reports, combined with and this is a really important point, right, the cresting that we've seen in the dollar going back to November of last year, because so many of these big tech companies are multi

nash will in scope. If you have highly efficient business models that are doing what they can't control costs because they're the ones that are on the forefront of all the layoffs that we've seen. Now you're repatriating profits in weaker dollar terms, which is gonna enhance and preserve those margins that are right now under assault and high introspection.

So it could just create this floor because they ober discounted them to death, and the reality is for the economy to move along at all, even if not in a vibert fashion, they're going to need that contribution from high technology companies. Does wage disinflation give you hope that the FED can pause or pivot at any point in

the near future, Doug, it does, Manny. I think what we saw yesterday that kind of catalyzed the big one and a half percent move we saw in the SMP where you had that household Income survey pointed a wage disinflation expectations, the single largest one month drop in the nearly ten year history of that series. That was really really powerful and for those who have been predicting this wage quite spiral to really catalyze that next leg of

holatility and market drop. It hasn't happened yet. You mentioned the dollar Dollar index down almost ten percent since late September. Hey, real quickly, uh, Doug thirty seconds. Got some money to put to work? Where do I put it right now? Yeah? Two places within kroll, I mean one in fixed income right, just playing somewhat on the mean reversion trade. Worst year in the history of the bondmarket last year. I think good having having good cloud diversification is going to give

you sustainable task equivalent to you'ld pick up. And then also look internationally, right, international investments, if you just look at the IFA over the past fifteen years, is actually trailed the SMP by two hundred and fourteen percent. You've got a trailing multiple of twelve times versus seventeen or eighteen for the SMP. You have a lot more value than growth in the international season. Lastly, typically they pay

two times the dividend of the domestic company. Open up. Yeah, I feel like there's been a pig pile among investment managers when it comes to emerging markets, in particular looking outside the U S. Doug Cioca, congratulations on the chiefs. I know you are being very fair, but nonetheless great to check in with you again. Doug Ciocca, chief executive Officer to partner Cavar Little Partners over a billion in

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