How The Ultra-Rich Are Investing After Biden Win: Tiger 21

and on Bloomberg dot com. With President elected Biden just weeks away from entering the White House, markets are discounting what it means for financial assets, particularly from a tax adjusted basis, and that is obviously very important for the wealthy and ultra wealthy in the market to get a sense of kind of what they're thinking. We're fortunate to welcome back to the show Michael Son and Felt, chairman

and founder of Tiger One. Tiger twenty one is a peer membership organization for high net worth creators and preservers of wealth, helping to navigate through the challenges and opportunities that success that success creates. Michael, thanks so much for joining us again here. Uh you know, we're now back to having a Democrat in the White House. One of the assumptions is that taxes maybe going up. What are some of your members Uh, what are they reacting? What

are they saying about a Biden presidency. Well, first of all, thanks for having me back. It's great to be with you. Our members are very focused on taxes historically, though what they said is it was more about whether the money was being well spent by the government, uh, and less

about the absolute level of taxes. We just did a recent survey across our membership and hum, a difference of as much as five or ten as little as five or ten percent in the tax rate would get some of our members to move to lower tax states, a lot of people moving out of California and New York. So it's really a warning that there are limits on

a state basis and on the federal basis. Most of our members think that if you have a divided government, if the Republicans maintained control of the Senate, the most sweeping tax changes are a little less likely. Why do they a certain point stop trusting government so they'll play a certain amount of tax But then suddenly they've decided that what the government was on the rest of the extra tax on is not what they would want the government to spend it on. Is that is? So there's

obviously a wide range of opinion among our membership. Most of our members come from very middle and lower middle class backgrounds and have started with very little and bootstrapped into great success. These are some of the great entrepreneurs, so there is a sense of individualism and wanting to create incentives. So the topic that comes up the most is, of course, a government needs to pave the roads and

have a military. But when taxes start becoming instruments of policy of wealth redistribution, some of our members think that goes beyond what prudent tax policy should be. But others are frankly quite aware of the inequality in our society and are struggling to think about how the dispersion of wealth the inequality can best be addressed. So, Michael, given the pandemic uncertainty, given the political uncertainty which now seems to be more certain, how have your members been preparing

their portfolios for beyond sure um. Earlier in the year, we had a historic rise in cash. Over the last decade, our members have generally held about twelve percent in cash, never more than percent and never less than eleven percent, And all of a sudden and in the first quarter of this year, members rose cash two levels close to high teams. It was not only the largest shift, but the fastest shift we ever recorded. So once the pandemic hit,

people were really battening down the hatches. And when you have complicated portfolios, making sure you have enough cash becomes far more important than what your returns are because you don't want to default on obligations and you don't want to miss opportunities. UM. You know, as the year has progressed, obviously, the markets have been extraordinary and our members have recorded really amazing returns and that was before November. November returns

are coming in. Uh. Just this morning, I was looking at the first three hedge funds to report in my own portfolio with ten plus percent returns. UH. So our members are reporting over ten percent returns for the year. My guess is they'll end up at mid teens depending on December, and they're back to technology and healthcare on the public sector side, technology particularly as the long term

best bet UM. I think we've talked about in prior shows that our members have had a bias towards technology for the last couple of years as the number one area of focus intensified with alternative UM UH with AI artificial intelligence, and that was that turned out to be an amazing bet. Our single largest stock has historically been Apple, but all of the fangs have been favorites among our members.

And what a year they've had, real quick Michael, But what was the hard asset of choice for people deploying some of that cash that they raised at the beginning of year. Uh So, you know, real estate is still the largest asset class, but there's no asset class that's had more turmoil within real estate. On the industrial side, it's just been on fire. The entire shift to online sales has created needs for warehousing from which all those

online purchases get delivered. So that's been the top page. Well, it is funny you should mention that because we just had a headline costs in the Bloomberg that kk R is nearing a deal for a portfolio of US warehouses. It would be an eight hundred million dollar deal. Michael. We're out of time, but thank you for joining. Always a pleasure. Michael Sonontelt is chairman and founder of Tiger twenty one and as a group, it has seventies seven

billion dollars in assets under management. Taking care of the old toy, wealthy and really just chatting among one another about how things should get done on on all sides of the table. So we thank Michael very much. Let's bring in somebody who was listening to that interview now and who knows all about this, Sam Fazali, senior pharmaceutical analysts for Bloomberg Intelligence. And Sam, we were listening to the BioNTech guests who talked about about this wonderful news

that Britain's will start getting shot. Why Britain first? This this stac scene was made in the US and in Germany, and what it's great that anybody is getting it. This is this is the beginning of the argument. You know, who goes first? Yeah, so, um, I mean, I mean the speed with which regulators wanting to get to look at drugs and and and make the decisions is different.

Some have more, um layers of approval requirements, etcetera. So there's a lot of arguments and discussion going on about why the UK went first and got there first before the EMA. When it comes to distributing, you know, the press. The press conference that the UK had was pretty clear about the direction they're going, and that is healthcare workers and then m at risk people, which are usually the all the folks who live in often in the care homes, etcetera. So it will be by age, and I think it

will be the same in the United States. And I suspect you were pretty much him as in Europe. I think everyone's kind of made up their minds on that one. Hey, Sam, here in the United States we have a fairly large percentage of the population that is generally anti vaccine for a variety of reasons. Is that is that a typical is that you have a similar issue in the UK and across Europe. UM. Yeah, you know, Paul, I think it varies depending on geography and even within a country.

So I've even heard, for instance, eastern Massachusetts being likely to go into the level, but then you go further west and the numbers dropped massively. We've also got the situation in UM in France that after the European countries, it appears to be in surveys at least one of the more reticent countries. So it will vary country by country. We basically need about fifty to six people to take this vaccine UM, given that there's ten to tent who would have been infected along the way anyway to get

us to that HERD immunity number. So it's not like we need to vaccinate everybody. Yeah, and it's great news that it's starting quickly. Though on the regulators approving this. Did the European Union regulators not have to get this approved as well? Explained? Was how weird managed to get us all done sort of unilaterally? Yeah, but the UK is UM you know, within within the rules of their

during emergencies etcetera. They do have the option to go away from the European unions e m A European Medicine Association which is UM, which is what they've done. So this is and I think what the process was and why the UK was faster than europe versus the s d A. I think a lot of that comes down to how much resources you throw at it. I can't I cannot accept that the European that the UK regulator

cut corners to get to this UM. They've been engaged with FIGHTER and other regulators since June looking at manufacturing all the other work that needs to be done. So I just can't believe that this one week difference will make an enormous amount of difference to people in terms of what data they see. Suddenly they're going to see a lot more data than the UK has. Hey Sam, you're you've been covering as pharmaceutical game for decades. Here you actually have a PhD in the crazy science behind

all this. Do you personally care and you think patients in general should care which vaccine they get? Or are you going to take just the first thing that gets offered to san Fazelli? Yeah, so I think Paul, that will come down to the efficacy. But but and so we need to see the data, the data I've seen so far from fiser BioNTech versus moderna. You know, I will take either one of them that's offered to me.

The fier BioNTech one appears to be. And those are carefully chosen words until we see more data, more tolerable in terms of you get less fever, you get less body aches. But frankly, if it comes down to it, and says Sam, you're gonna have to wait a year that one, but we can give you more there no now, and I think I'll just that would be a very easy question to answer. Of course I'll say yes to that. So this is then honestly just fantastic news. We're beginning

to get the roll out of the vaccine. The vaccine works, and you know, can we all go home and rest peacefully or are there things that still stick out and bother you like, do we know, for example, if they're going to be longer term effects, we know we're going to need another vaccine in nine months. Yes, so there are what what does bother me? One is is not?

Is not long term side effects and all that. I think you know, We've had a lot of vaccines developed and it's essentially they have pretty similar, very rare side effect issues which are related to the immune system, but very rare. So I'm not worried about that. What I am worried about is that the virus as soon as we start putting pressure on it, I pushing people to be vaccinated, and therefore they have an immune response that

we end up what's called colonal selection. We end up selecting a version of the virus that's less susceptible to our vaccine. Now, as you just heard biotic Um, Alex and Guy were asking the Biotic executive about mutations. They said they've studied ten mutations and the vaccines equally efficacious in those settings. I don't know, he didn't really answer the question about that particular mutation I asked about, But it doesn't really matter. There are others that will come

along that might escape our vaccine. But remember that we've got a technology that you can go back and change the sequence, change the RNA that you give people and get a new vaccine out. I mean, it would take time, but we have to watch out for that. Hey, Sam, thank you so much for joining us. We always appreciate your perspective and your experience Here. Santa Zelli senior pharmaceutical analyst, and it's also the head of the entire Bloomberg Intelligence

European research operations. So who's a busy person these days? Giving us his latest thoughts on the vaccine. Well, let's welcome in now a very special guest joining us from the University of Missouri's Law school. Frank Moment as professor at missour Law and has written a book on well, let's give the title, High Crimes and Misdemeanor is a History of impeachment for the Age of Trump. Thank you

for so much joining us, Frank. Frank, you know a lot of talk about presidential pardons these days, and the potential for the president to pardon really anybody in his family or even himself. Can he do that? We have to distinguish between two possible types of partners, one pardon of himself and the other pardon of other people. In my view, a president cannot constitutionally pardoned himself. Um. There's a complex array of reasons why that's so, Um, although

it's never mentested. Um. Now with respect to partnering members of his family, are people around him that I think is clearer. I think he can do that, although it's possible that um, depending on the circumstances of such a pardon, the pardon itself might be a crime. So, Professor, for pardons to be issued, don't they have to be issued against someone who's been convicted of something as opposed to

kind of preemptively issuing blanket pardons. No, Um, Actually, a pardon can be issued for any conduct that occurred prior to the insurance of the pardon, whether it was it has been investigated or indicted. We have several very significant instances about occurring in our own history. For example, after the Civil War, Andrew Johnson pardoned many thousands of former Confederates who would potentially have been liable for the very serious crime of treason, but who had never been charged

for it. Similarly, after Vietnam War, first President Ford and then President Carter gave a series of amnesties or pardons to people who would have been esecutable for and sometimes had been prosecuted for draftivation. So there's plenty of precedent for that. Now. One thing that can't be done is you can't pardon somebody for a crime that hasn't yet been committed. Um nor I think can you pardon somebody

or a crime which is ongoing. So imagine, just for the sake of argument, that someone in the Trump orbit was currently engaging in some kind of crime that continued after he left office. He wouldn't be able to pardon that person for a crime that that continued, yeah, or hasn't started yet. We're getting very minority report here. But Frank, you mentioned earlier that the pardon itself might be a crime.

I'm interest in that because if that wasn't a deterrent, then why wouldn't an outgoing president who doesn't really you know, mind, just issue a blanket pardon for anybody that he thinks might ever have or you know, be implicated in some kind of claim that you know, might have to deal with that after he's left the presidency. So why would a pardoner itself be a clime Potentially, Well, it's only going to be a crime in a very limited set

of circumstances. Actually, although we don't yet know. There of course, as a report about the details. But there's of course a report out of Washington's at the Justice Department is investigating a essentially country campaign contributions for pardon bribery scheme, and anybody involved in an exchange like that, up to and including the president would be guilty of the separate

crime of bribery. Now there's we don't have any of the details, We have no indication whatsoever who's involved in certainly no indication that the president himself is involved in such a thing. But just assume hypothetically that a president were to agree to take a bribe in response to which he would issue a pardon, that would be a freestanding crime. Now, simply issuing a pardon that is broadly self interested and unseemly is not going to be criminal.

And lots of presidents, unfortunately have done that kind of thing. I mean, the President Clinton, for example, issues a series of pardons at the end of his presidency that we're very ugly. Indeed, indeed, at least one of them, the Mark rich pardon, I suppose, could have been argued to have been overtly corrupt because Richard made contributions to the Clintons. But generally speaking, even unseemly pardons are going to stand

and aren't going to be separately prosecutable. Well, can pardons be challenged in any scenario there, Professor, or they pretty much uh you know etgten Stone once they are in fact issued. There's a little disagreement about that. My own view is once the pardon is issued, regardless of the reason where it's having been issued, then the pardon itself stands,

at least as to the person pardoned. Now are there are some people who disagree with that, who suggests that, um, there are certain ways or certain occasions on which what they characterize is really self interested pardons, pardons that in some way benefit the president, that denigrate from his his obligation to ensure that the laws be faithfully executed, that those might be challengeable in court. I very much doubt that. I think once the pardon is issued, it is almost

certainly going to stand. The President has suggested that they might want to again in four years. Would any history of pardons impact any kind of potential future run well, I think. I think in a prior universe, in in the political universe, that we inherit and inhabited you know, eight times twenty years ago for the for the remainder of our history. Back to Yeah, I think there would be a problem if a president issued a bunch of

obviously self interested partons, including pardons of himself. I think that would be almost automatically disqualifying. But in our current media environment, wherever where both sides are so heavily siloed, you've already got people within what I might call that the Trump universe, Fox News and other places actively suggesting that Trump pardoned himself in order to, you know, protect himself against the evil liberals and the operation of the

deep state. I think, at least among Trump's face, a series of grotesquely self interested partons, including one of himself, might not be disqualifying. Whether you know that would be true for the larger Electorate's another question, Professor, what gives a sense of timing here. Should we expecting some of these pardons really at the last minute, or can they

happen at any time? Well, because a pardon only covers conduct that's already occurred, the safest time are the most inclusive times usha pardon is at the very end of the president's term. Certainly, if you pardons himself, I would expect he'll do that on the very last day, pactly the very last minute. Um. But you know, some other cases, as we've already seen with the Mr Flynn, are not I don't seem to have that kind of time angle. And uh, you know, we might see a series of

pardons leading up the last day. But I think it's not unreasonable to at least imagine that you would get a series of pardons from Mr Trump issued on the morning of January. Frank, thanks so much for joining us. We really appreciate it. Frank Bowman the Floyd Art Gibson Missouri and dowed Professor of Law at the University Missouri School of Law based in Colombia, Missouri, talking to us about the pardons, and that certainly presidents have done that

pardons made pardons in the past rather routinely. The expectation is that President Trump will continue to make them as he winds his way down to the last days of his presidency. So what can we expect for the holiday shopping season. We've been talking about it now for a few weeks pre Black Friday, but of course typically it would remain hot right through the end of the year. Let's bring in Craig Johnson, president of Customer Growth Partners,

to tell us exactly what his surveys are telling him. Craig, you've been doing this for a couple of decades now, how things grown to a hold this year? Or do anticipate that people will spend even if it's on their credit cards? Well, people are spending. U They may not be spending on Black Friday or Cyber Monday Monday as much as some people thought, but they are spending. So we went into the season with our nineties annual now preseason forecast up five, which is above consensus and based

on what we saw for November as a hole. I'm not talking about Friday, but for November is an entirety through through Monday, sales were up about seven UM and for November they week three hundred and three billion dollars, and that's entirely consistent with our forecast to five eight. In fact, the season overall may come in a little bit above six. So those numbers are craict Those numbers

are really really interesting. And um, given that when you were so much unemployment out there and so much angst in the marketplace and so much uncertainty, what do you attribute uh those growth numbers? Two? Well, they it's a couple of things going on, but the most important is the consumer fundamentals are overall are very very strong. Disposable

personal income. I'm not talking about the people have a job, but as a heart, as a whole growth and disposedment coming as the single biggest particular retail sales, it's up about six percent year of a year. UM, that's very strong. Consumer household financials balance sheets are the healthiest ever with an eight point seven percent household debt service a show

for the FED. And the personal savings rate is about and that personal savings is key because consumers have dry powder of two point four trillion dollars on their balance sheets right now, so they don't have to tap into credit cards. Uh, they can buy just out of current cash flow and that's what's really driving the growth. Are we talking about particular strata of customers though, Craig, surely those on food lines and visiting countries can't be doing this. Um. Again,

it's it doesn't extend to everybody. Obviously, if you're if you're in a household where nobody has a job, you're focusing just on needs and not wants. But for the ninety plus percent of the American public, uh, that is financially healthy. Um, they are spending and uh and again they have a lot of available cash on hand to spend. UM. And you know, we're all hoping that you know, some of the financial aid coming out of Washington actually eventuates.

But in the meantime, the consumers, you know, in the up four of the upper five, of the of the five quintiles, Uh, they are spending very sharply increase year of the year. So it's interesting. Correct, we've seen obviously a big pullback in UH, travel, hospitality spending by consumers. Do you think some of that's getting redirected into just buying stuff? Well, Uh, there is, there is a major

rotation and spending and um. And with at the margin from the categories you mention entertainment, travel, hospitality, et cetera. UH is clearly down UM and about two hundred and sixty billion dollars UH has been shifted from those services into the good sectors. And that's a that's a big

that's a big number. Now, it's obviously not as big as the anywhere near as big as the two point four trillion dollars they already have you on hand at home UM, which is about a doubling of what it was last year at one point to a trillion, So they have an intriminal one to point to a trillion. And then when you add in the two sixty billion dollars from from the services from the discussionary services sector UM, that is an additional boost UM, as is lower gasoline

prices which are around, you know, abouts last year. So are you're getting a variety of favorable tail winds behind the spending. So, Craig, do you dive in to see exactly what they're spending on? Are they buying codes? Are they replenishing durable goods? Are they buying toys? Well, yes to all the but but this is overwhelmingly a hardlines Christmas. Soft lines means you know apparel and you know, and

Lenen and so forth. But the hard lines, and this is you know, whether consumer electronics Nintendo switched the other, you know, the other new video gainst the Sony PS four, T vs iPhone, twelves. Um household appliance to either major appliances, refrigerators are sold out a lot of places until delivery

in January, if not February. UM, So it's mainly herdlines and that means toys, means games, exercise gears, major appliances out a. Propane heaters, patio heaters are impossible to find, UM, and all those are getting sold, long air fryers, etcetera. You know, there is some you know, some apparel is getting sold, but hot product, but it's mainly in the footwear categories. You know, the Nike Airmax through seventy of the air vapor match, etcetera. Those are still very very hot. So, Craig,

this is at digital Christmas buying online. Is this just accelerating a trend that we've kind of been seeing here for you know, parts of a decade. Absolutely for for the last ten years, every year the penetration of digital penetration of overall sales has gone up about a point.

So in other words, last year penetration was about eight. Well, the COVID jumped in immediately up to you know, to penetration as of uh, you know, the March April May periade, and now it's going up another two or three points. So we have basically almost a decade of increase in online penetration all squeezed into less than a year, which is an interesting Yeah, just extraordinary numbers, uh that we're

seeing on the retail sales fronts. Looks like it's going to be a pretty solid holiday sales despite all the uncertainty out there. Craig Johnson, President of Customer Growth Partners, we thank you for joining us here sharing that data again. Strong strong November sales looks like again bringing in a pretty solid holiday shopping season. Thanks for listening to Bloomberg Markets podcast. You can subscribe and listen to interviews at

Apple Podcasts or whatever podcast platform you prefer. I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn and on Paul Sweeney. I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio. Oh oh