Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside my co host Matt Miller.
Every business day, we bring you interviews from CEOs, market pros, and Bloomberg experts, along with essential market moving news.
Find the Bloomberg Markets Podcast called Apple Podcasts or wherever you listen to podcasts, and at Bloomberg dot com slash podcast. Amy Glacier, senior at VP of Business Operations of the firm's called a deco, and a deco was really it's a staffing company, permanent placement, outsourcing, career transition really tied into the whole labor market and getting people placed in
this economy. So Amy's got a great perspective, So Amy some I mean, I'm not sure anybody really saw these numbers coming this morning.
What's the job market look like to you out there?
Yeah, so it wasn't much of a surprise. Actually, from what we're seeing boots on the ground, we're still seeing leisure and hospitalities super hot. I think, you know, in the headlines, there have been all these news about layoffs and recession, and from a broader petion perspective, people are concerned.
But when you really dig in to the trends. There are still some really hot opportunities out there, and lots of employers that are still hungry for talent, you know, especially in restaurants and hotels as they're gearing up for the busy travel season.
And are they getting paid, are they getting raises? Is are the you know, salaries and wages keeping up with inflation.
So salaries and wages are not keeping up with inflation, and that's been a ongoing concern for the past six months from candidates. So one of the major trends we're seeing is that, especially for an hourly workforce, employers are choosing to put more weight on that base rate. So we're seeing less sign on bonuses, less retention bonuses, less of those extra monetary perks that tied to total compensation in favor of purely putting it in the hourly work rate.
What we're also seeing is kind of this entrance into the part time workforce for a lot of folks that have been sitting on the sideline. So I was actually a little bit surprised that the participation rate didn't reflect that, because that is something we're seeing on the ground that as wages aren't keeping up with inflation, folks that are looking for secondary jobs or to return to the workforce, especially in a part time capacity.
All Right, I just wanted to disclose that all four of the Sweeney offspring are gainfully employed in this economy.
So we're contributing.
But I see the Jolts number, Amy, and you know it was it came down, but it's still almost you know, nine and a half million people out there are I'm sorry, you know, kind of open positions.
Where's everybody? Why isn't every Why aren't more people kind of in the workforce.
I say, the participation rate of sixty two point six percent, I don't know, it seems kind of low to me.
It should be higher. Talk to us about that part of it.
Yeah, so I think you know, we were at two jobs for every candidate seeking employment. Now we're at one point six. The reality of the situation is, even if we get down to a one point one, it doesn't translate into an exact match of where the job opportunities are and where the worker resides or what their skill set is. So we're going to continue to see that talent scarcity just as a simple matter of where they physically might live or what their skill set.
Is is a regional change or differences out there these days, because it just seems like everybody and their brothers going to Florida or Texas, and I know, is there some regional bias out or differences out there?
We're absolutely seeing the East Coast is white hot right now in terms of hiring, along with the central part and southern part of the US. Now, part of that also translates into the leisure and hospitality time of year. People and folks are starting to gear up for the summer travel explosion. Yeah, exactly. Well, the other cool trends
we're seeing right now. I really think, guys, this is going to be the summer of out of office seeing people that have stockpile PTO and haven't been able to take off over the past two years, especially in some of those hourly workforce and essential workers really taking the opportunity this year to take that PTO time and focus on their personal time off.
Yes, okay, yes, I'm not familiar with the acronyms.
Because you've been in Bloomberg for twenty three years. Yeah, we had a seed.
Days, we have tea days, yes, okay, So well, I think Paul is one of those people. He has been He's been bitterly against working from home until he bought a beach house on the shore. And I think this, so I'm all in, He's going to be working from home a lot. How is that working out? How is that changing? I mean, are our people are that you place still insisting on very flexible workplaces?
They're absolutely insisting on flexible workplaces. I think what might be surprising to some is by flexible, they don't all mean remote work from home one hundred percent of the time. We've seen that. You know, the American worker really has a strong appetite for collaboration, being in person coffee chats, talking with their fellow employees. They just don't want to
do it five days a week. So the employers that are getting it right and winning right now are opting more for that hybrid work opportunity where sure you come into the office to maybe three days a week, that you have flexibility in picking those days, and both the employer and the worker are benefiting from that flexible schedule.
How big of a Kentucky Wildcat fan are you, Amy?
I have a third generation Wildcat grad.
Wowret big dog gets here undergrad enter MBA from the University of Kentucky.
How good is that?
And it's Kentucky Derby weekend, so I'm sure that's big for you, So that'd be cool. We'll be watching Amy Glacier, Senior VP of Business Operations at a Deco. They're a big staffing company out there, and they got their finger on the pulse of kind of what's going on in terms of hiring and firing out there in the economy. Boy, it was a blowout jobless our jobs jobs number today, although again there was a revision a prior month.
But you're listening to the team. Ken's are Live program Bloomberg Markets weekdays at ten am eastering on Bloomberg dot Com, the iHeartRadio app, and the Bloomberg Business app, or listen on demand wherever you get your podcasts.
I want to get right to our next guest, Jonathan Hurdle, executive chairman of Hurdle, Callahan and Company. I think you started that thing around nineteen eighty eight. Before that, he was a little firm called Goldman. Before that, he was an officer in the United States Marine Corps for seven years. So we thank him for service. But for me, the highlight is MBA.
From Penn State.
Go Nitney Lions, Jonathan, You've got a lot of experience, You've got a lot of perspective.
Let's start with.
The banking stuff, I mean, the banking stocks. We're not sure whether to call this a crisis, turmoil stress. How do you kind of view what's happening with some of our regional banks.
First of all, I like to think about it as part of the cycle. We had this extended cycle. And when you look at a bank, they have to make loans, and they have to have a how do they make their decisions? And if you're in the up part of a cycle, where things are accelerating, you can be more aggressive. But you don't know how that bank is doing until you go through the other part of the cycle, the downturn. And if you can measure their performance trough to trough,
then you see who the better bankers are. So we had this weirdly extended easy money cycle. You know, we're at the end of the era of easy money, and so that unprecedented era of easy money created a lot of excess, and part of it was this extended economic boom, which lulled a lot of people into a sense of laissez faire about their risk policies and so forth. And then we got an interest rate shock, and it wasn't
an increase. It was a shock when you think of going just to make the number simple one to three or you know, two to four or one to four, so it is a triple and so you get that kind of we have an economy and a banking system based on basically free money. And then at the same time this long cycle which lulled people to sleep. It doesn't make It doesn't surprise anyone that we have problem with banks, I think.
So I just wonder if a bank, and I won't pick a specific one, but if a regional bank does have enough assets to cover deposits, does it really matter if the shares are driven down to zero? I mean beyond obviously the pain the shareholder feels. Does it matter for the wider banking system.
Well, it only matters if it becomes a vicious cycle. So the stock price is key because it's sentiment. And we look at what happened to pack West, and so you could say, well, this circumstance isn't so bad, but the run on the stock could make it bad. It's just from a standpoint of psychology. And then the other big factor is that we have this only.
The part I don't get though, how does the run on the stock make it bad? I mean, I get that the bank could fail, but if we are in a place where a bank can fail, I think Joe Wisenheal put it like, if we're at a place where a bank can fail, like a laundry mat fail, we're okay.
Well, I think what happens is more people get frightened because they see this news and the stock price is plumbting, and they call and get their deposits out right.
So that's the concern. But that's not what we've seen happen.
Well, that's why this and that's one of the reasons the stock is bouncing back, right.
I mean, First Republic, how many billions of dollars of uninsured deposits we're still there when JP Morgan took it over. That's how sticky bank deposits are. It is, all right, by the way, twenty billion is the number.
Yes, so Jonathan, all right, So we've got the banking issue out there.
That's a concern.
Most more recently, we had a job's number today that was a blowout number. We had a revision downward for the prior month, so that tempers it a little bit. But are you where's what's your recession call? Because I have a hard time when people come in here and talk about recession when I got everybody who wants the job's got a job.
Right, And I think the thing is it shouldn't be a binary discussion. We could have a moderate decession, we could have no recession, we could have a soft lining, we could have a semi soft line. I mean, I really think that's where you have to be. It's hard to call in a binary way. My personal feeling is we're likely to have a mild recession. That's just my personal feeling. And then the answer to that is so what I mean? So so what I mean? It's just
we're still managing earnings. Earnings are coming better than expected. We have the best managers in the world working on these stocks. So I think it's all binary. Is a hard call, okay.
I mean, if we have unemployment at three point four percent, is it possible to get inflation down? Can inflation come down if everyone still has a job.
Well, it depends when I mean, how long is it going to take. I mean, I'm struck by the fact that you know the implied inflation rate and tips is a two percent on a ten year bond, So that's the implied rate, and the market knows a lot. The market is telling us a lot. Maybe ten years from now is too long to care about. But I do think in general, one of the things we've talked about before is the balance between focusing on the cycle and focusing on the trend, and so we tend I think
you need to focus on back both of them. You can't ignore psycho but in general, people are more focused on the cycle, in my opinion, than they should be. They should be focused a little bit more on the trend, all of which is positive. And Bernanki talks about the idea that there are these secular trends in the world that are disinflationary, and technology is certainly one of them.
Yep.
So you like technology.
We do like technology.
You don't think it's overvalued here, Well.
It could be overvalued here. But software is changing the world, right, you know Mark Andriesen's article several years ago software is eating the world still true. AI is just another accelerating story on that we.
Can't go three hours in this show without mentioning ai Oh, I have personally thought of so many new business cases that I might leave and become entrepreneurial multimillionaire because.
I think it could be used in so many different ways.
I mean I'm not alone there, yeah, right, But I also think just blockchain, I mean, blockchain may revolutionize software development as well. So software is going to continue to be change our lives lives, and we fortunately are the country that leads that.
So we do like that.
We like lots of things, but that's one of the areas we like.
Hey, what about the banks? You know, I saw a great quote in a Bloomberg story overnight. An analyst Ben Gerlinger from the Hubed Group wrote, the shares in Western Alliance offer a rare, once in an economic cycle entry point into a best of breed banking franchise. I'm not asking you specifically to common Western Alliance, but if these banks are safe and it really is just a short seller's attack, isn't it a great time to buy them?
Well, there's no question that there are opportunities when you find dislocation. So for example, in the commercial real estate challenges which we know are coming, there's going to be opportunity to make money there. You always sort of ride to the sound of the guns, you know, wherever the dislocation is, you want to look there. Whether that fella
is right or not, only time will tell. And I think it's a little bit like picking a lottery ticket, like somebody's going to be right, and at the end, whoever was right will be declared a genius when it was just random.
John, We want to take advantage of your experience, your perspective on a really exciting part of the investment marketplace, and that's private credit. How do you think guys think about private credit as an opportunity for investors?
So we love it. This is one of our big emphasies right now. And it's not for amateurs, is the thing, and it's not easily available, so you've got to be careful who you're with. But done right, private credit is a terrific opportunity. We've seen, you know, nominal returns move from like seven to twelve and we think are outstanding
managers now, Paul. The key thing here, I think, and this is my opinion, this is one of the things that I talk to myself about in our team is that this is likely to be a low returning decade, and so it's almost like small ball in baseball. You got to you know, get a walk, go to first, steal second, get a month to move to third. That's the kind of environment we're likely to be in for the next decade, in my opinion, which is very different
than the decade we just went through. And so I think people are keep thinking how do we get back to normal, and they define normal as what was going on four years ago. That's not normal. This is more normal going through a cycle, having a recession, figuring out how to grind out the returns they're going to fund your success.
This is what we heard from Nikolai Tangen, by the way, the head of the Norgus Bank, yep, you know, at the beginning of this year, he said the same thing. I think that it's going to be smaller returns than we're used to. I think pretty obviously right when you have the punch bowl taken away, that's what happens.
Well.
And if you go back to Robert Schiller's Nobel Prize on his work, was you're going in multiple determines your next decade's price. It's a very linear relationship, and if you have a twenty two multiple going in on average over time, you get like some four percent return or some very low return. So we started out this past year, you know, the year that we just went through with a big negative. So you start out negative and now you have to earn your way back to a ten
year return. So I think that's the face we're likely. We don't know, but probability wise, it's more likely that we're going to have that low returning grind out, you know, singles and doubles kind of a world for the next ten years.
Hey, John, thirty seconds back to office. What's your thought?
This is a long discussion, but I love people being in the office. So one of our four pillars is that we embraced the magic of teamwork, and you can't have the teamwork, and teamwork's not the same if people are not back in the office. I think we're going to end up with twenty nineteen New and Improved, which
means that people do have more flexibility. But in my opinion, the default ought to be come to work if you stay at home if you need to, not default stay at home, come to work if you need to, So that might not look that different. But and it gives people the flexibility that they didn't have before twenty nineteen and before this COVID experience. So we've learned a lot and we should learn from that. But in the end, it's not the same if you're not together.
Yeah, I think that default way of thinking about it. It makes a lot of sense, Yes, but that's flipped from what it is now. Right Yeah, I say right now people, I'll come in once a week, you know. Yeah, but that has to change as heyel Friday is not one of those days exactly, John the Great having it here.
We need to get you back for a longer discussion because there's so many issues we didn't touch on.
Yeah's always a pleasure to be with you.
You're listening to the tape Cansur Live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and 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.
All right, I want to get to our next discussion. This is gonna be fascinating Michael Sonenfeld joins us. He's chairman and founder of Tiger twenty one and Tiger twenty one is a network of learning groups for high net worth investors and this is a fascinating discussion. Michael, thank you for joining us in our studio here. How does a person how does a person come to Tiger twenty one and why do they come to Tiger twenty one.
So, you know, we have a lot of great entrepreneurs in this country, but when the best of them sell their business in an instant, they go from being an entrepreneur to a wealth manager and they're not prepared for that. They may be a great leader, a great manager, they can inspire troops, but what do they know about convertible bonds, equities, inflation rates? Obviously they knew it through their business. But we're the place that they join and meet with others.
We're a peer to peer learning center and we have about twelve hundred and fifty members managing their own money a total of about one hundred and fifty billion dollars.
So what are the what are the limits? I mean, how much do you have to have to be a member and what kind of help can you expect once you get in.
So to qualify first as good character, we do a lot of background checks. That's really important because there's confidential information. But the marketplace we serve is from twenty million to a billion of personal assets an average of a little over one hundred, with most of our members having between thirty and sixty million, and what they can expect. The most important thing is to meet other people who have also been vetted, going through the same journey they are.
It's a peer to peer learning model. We have about one hundred staff that serve these twelve hundred and fifty people, but fundamentally, what they're joining is a network that doesn't exist anywhere else.
By the way, the importance of this, I think needs to be underlined because you know, if somebody makes a hundred million dollars selling her business, we're not feeling sorry for her, right, but she may have no idea what to do with that money, absolutely no idea where to start other than what her bankers tell her, and they of course just want her money. If she loses that money, that doesn't do any economic good for the society either.
So it's helpful for all of us if she knows how to invest it and does well with it, isn't.
It for sure? And you know the nature of what you know? This isn't just about money. It's about legacy. Family. You've had your nose to the grindstone or your head to the grindstone for forty years, and all of a sudden, now you've sold for.
The first time.
You're looking at the broader issues. And this is the community that you can explore them with.
So what are I sell my company? For example?
And I like the way you described it before we went on the air. Oftentimes that sell now feels a drift, right, So when they come to you, what do you find they most need, because presumably they're getting some financial advice from, you know, somewhere.
Investmentalers that help them sell the company.
First, all the wealth management business.
Our members use a lot of the great managers, but sometimes you find they're selling instead of serving and learning how to figure out the wheat from the chaff. Who are the good managers? How do you look at managers? That's an important thing. What you're really getting is a perspective. How do you become an investor? Just as an example, I'll ask you guys a question, how long do you think it takes for an incredibly bright, incredibly successful entrepreneur to become a mildly competent investor.
I would imagine years.
Yeah, five years, that's sort of the average. When you sell your business, you have no idea what you don't know, and unless somebody tells you to go slow, don't invest everything right away, wait till you learn a new trade. You can make some real bloopers, and we want to try and help members avoid that.
How do you convince members to trust you? I mean, is it your track record?
You know?
Obviously people want to get into this network, but there must be some people who think everyone's trying to take what I got, So I need to be protective of this.
So I'd like to think just we don't just talk the talk, we walk the walk. I started this twenty five years ago. It is a business, but it was a labor of love, and I think we've put members first in every decision that we've done. And if you come and look under the hood, I think we can pretty much defend that. And that's how we've grown to seven countries, twelve hundred and fifty members, and almost one hundred and fifty billion in assets.
So what are your members talking about and discussing over. I mean, we've just come out of this pandemic and who knows how it impacted their businesses and their wealth, and now we're in, you know, kind of a post pandemic world.
What are some of the items they are discussing?
Right?
So two realms. One is family, legacy, children, multi generational issues. But in the economic sphere, it's how do you create an all weather portfolio. I'm not here as a trader. I've created wealth once and I want to preserve it. And that's why our asset allocation is so important. Don't we just measure what our members do. We don't dictate it. They all manage their own funds. But today, as an example, private equity is thirty one percent, public equity is twenty
two percent, and real estate twenty four percent. That's seventy eight percent long. But when you have that much long exposure, you better have a lot of cash to weather the storm. So eleven percent cash, which is a particularly high number. So finding out how to get the benefit of a day like today. What a day we're having, right, But you didn't know that yesterday what it was going to
look like if it turned the other way. The eleven percent cash creates a kind of buffer, and just dealing in those concepts is not what you were doing as an entrepreneur, No, not at all.
You were selling more widgets.
Yes, I was thinking when you said you're seventy eight percent long, do you teach them how to hedge? And then my thoughts fall back. We have geniuses come in the studio all the time. Neil Roseman, for example, I will say like, oh, I just sell puts on this and that, and I have no idea what he's talking about, you know, And I imagine a lot of entrepreneurs are the same way.
Yeah.
So look, some of our members are some of the world's great traders came out of that. But most of our members built a business. They started with a concept and they took it to fruition. Even hedging is a little complicated. They may be investing in funds that have hedging strategies, but having the basic portfolio work for the long term, that's the objective.
Can you start a family office with Tiger? I mean, how does this work?
So we do have a group of members who have family offices. Family offices typically begin at about two hundred million and above. You can't economically underwrite a family office at a smaller amount. And then obviously once you get into the billions of dollars, you have huge family offices. That's not our market. We're from twenty million of investable assets to a billion.
Wow.
Just fascinating discussion. Million ways we could go on this. So we're gonna get you back in here because now that I understand that you are in New York, there's no excuse. So we're going to get you to STUDI a little bit more often because we can go a million different ways. I love to just know what your members are doing in markets from time to time. That'd be a good gauge of how these markets are performing. Michael Sonenfeld, he's the chairman and he is the founder of Tiger twenty one.
Again.
Tiger twenty one is a network of learning groups. That's a good way to describe it. A network of learning groups for high net worth investors. And love talking to Michael because he has a very unique perspective into these markets based upon what he learns from his group.
There, so good discussion.
You're listening to the team Ken's are Live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot com, the iHeartRadio app and the Bloomberg Business app, or listen on demand wherever you get your podcasts.
Curiously comes on you in the heels of a spate of deaths at the track at Churchill Downs. Clearly the track and the company are on edge. It's a it's a major problem, and it's a major pr problem. And I think they are trying to really exercise caution here and any horse that there may be any questions about of any kind. They are telling trainers get that horse out of the race.
So what you say, deaths And immediately I'm concerned a would be peda person, you know, except for I don't have I don't know the inner strength.
We have a very nice leather jacket.
You it don't look like a fact. This is horse leather. This jacket and these boots. Horse not go there. But is this a problem? Do these horses die because I imagine they're doped up? Or are they pushed too hard? Do they hit them badly with that stick?
Like what's the you know, the stick or the riding crop. I would say, is one of the things that actually is off in the whole conversation, but listen that part of it. Actually, they have taken concrete measures to crack down on use of the riding crop, and it's used a lot less now than it was two, five, ten years ago. You can't shockeys can't use it the way they used to. I mean Victor Espinosa famously in the derby hit American Pharaoh who go on to win the
Triple Crown. I counted him. I wrote a piece on it. He hit American Pharaoh thirty times in the stretch. That is, if nothing else unsightly. The issue, yes, that they have when you get debts on the track, it can often be problems with the race surface. And that's one of the big concerns they suddenly have at Church Redowns. It is a dirt primarily a dirt surface, and it is subject to.
Rain and cold freezes.
And then you know, temperatures right around this time of year go up and down, and the and the and the surface the consistency of that surface can change, and you can it can lead to injuries and at times deaths. And wild on Ice, who was one of the horses that was gonna run in the Derby was pulled up, brought to the vet and and died. They had to put that horse down. So, but is it a concern is it in steroids issue? Steroids are no longer an
issue they used to be. I don't know if anybody who remembers Big Brown, who was a horse that almost won the Triple Crown back in two thousand and eight, and he was a famous horse that they had, you know, on a lot of steroids that drew a lot of attention to that particular issue. Steroids have since been banned from the game, but there's no doubt that the game
still has an issue of cracking down on cheaters. Listen, there are multiple people, top trainers and again who are currently in jail who were busted by the FEDS for cheating. Bob Bafford is not in jail, but he's the biggest name in racing. He is still suspended from Churchill Downs and he suspended for his four having given illegal medications to his horses. He might recall two years ago he
won his seventh record breaking seventh Kentucky Derby. That horse Medina Spirit, was found to have illegal substances in his blood. He was subsequently disqualified and Bafford was suspended and is still on the outside looking in Churchill after this spate of deaths.
Two of the deaths.
Horses that didn't sustain injuries in the track but literally drop dead. Okay, we're trained by Saffie Joseph, a young up and coming trainer. Saffie had a horse to run in the Derby. Churchill Downs told him, scratch that horse from the race, scratch all your horses schedule to run at Churchill this weekend and take all your horses at here. You're kicked out of Churchill Downs.
Churchill Downs is a publicly traded company market cap of ten point nine billion dollars as symbole c h d N. It's up thirty eight percent year to date a forty five percent on a trailing twelve month basis, so a good investment there for public shareholders. David talk to us about this year's race and the horses who are some of the favorites, who are some of them maybe the long shots to keep an eye on, because we had a long shot win last year.
We did have a long shot win last year, Rich Strike, and actually Rich Strike is running today in about an hour. If you want to go back. Okay, I will say this, after winning at eighty to one on Derby Day last year, how many races has Rich strike one sins then zero? The number is one zero times. Now I think that race is a bit of a fluke. It was a sub it was it was circumstances that helped get him
in the winter circle. But what will absolutely happen this year is after an eighty to one shot wins one year, everybody goes out and bets the long shots. The next year that's just gonna happen. So all these crazy long shots that you'd be seventy eighty ninety to one, we'll get bet down to twenty to one. And that doesn't make a whole lot of sense, to be honest, but it is something that's absolutely gonna happen.
By the way, this I don't want to get too deep into this if it's complicated. I know nothing about betting. Can you short a horse? Can you sell puts? I mean, can you get into that sort of derivative stuff? Or is it just bet on the ones you think are gonna win.
So it's a lot easier in place like the UK you can flat out short a horse and I love that right so here because it's just very simple. I want to bet against that horse. I essentially, if Paul Sweeney wants to bet on the favorite Forte in the Derby, I can say, hey, I'll take that action from Paul. All right, you bet that bet with me. I'll give it a forourte wins, I pay you. If he loses, you pay me. In the United States of America, you cannot, at least not at the major racetracks and the major
betting venues. So what you're typically left to do if there's a big favorite that you're negative on to bet against, find a bookie or you just what we say, you fade that horse. You find you have to find the most likely up setters to try to beat him.
But it's much much easier in the UK to.
So Fortes favored to win. Tell us about the favorites.
So the favorite so Forte was two year old champion last year. He looked dynamite in his return as a three year old. All the horses in the Derby are three years old, right, He looked dynamite returning in February at the races in Gulfstream, looked less great. Last in his last race. He won that too. The issue with Forte, and this is one of the really things that's unique about the Derby, is at the Derby there will be
one hundred and fifty thousand screaming, drunk human beings. Horses are flight animals, they're skittish animals, and surrounded by one hundred and fifty thousand drunk people, they can get on edge and they can lose their minds and run their race before the race even begins. Forte has a bad habit.
Everyone should watch him in the pre race warm ups and in the post brid He has a bad habit of getting worked up and riled up and anxious and sweaty's if that's happening to him in front of crowds of ten and twenty thousand people, you can only imagine what it's going to look like in front of one hundred and fifty thousand people. That's one of my concerns about him. I am indeed negative. I'm fading Forte.
All right, So other horses, who are you betting?
Who are you betting on to.
Win the winner of? Like voting the winner of the one hundred and forty ninth Kentucky Derby is named Angel of Empire. He'll be somewhere around eight to one ish. I just like everything about the way he's coming into the race, right. I'm someone who puts a lot of stock in the way horses are training in the morning. He right now everyone is just you know Gaga or the way he looks in the track in the morning. He's He's a horse that was a sort of a
more of a late developer, but he's the now. To me, he's the now horse, and I think.
There's a lot of value.
So Forte has had a much more impressive career. But you know, Forte very precocious at two, but seems to be tailing off. A horse like Angel of Empire, I think is a great candid. I also like, you know a horse that almost beat Forte and the last race of horse named Mage John Tucker. I see he's paying attention right that downshot age got it?
Where can you go to place these bets?
Ot storing I obvious online there's all you know from gambling apps. I mean, the New York Racing Association's got one that's very popular, and IRA Bets Churchill Downs has one that's very popular called you know Twin Spires dot Com.
I mean everyone's I need a long shot.
That's how I play. You want to long shot on a long shot.
But they're not going to pay off as much as the long shots typically do. David just told us everybody's betting a long shot that drives the odds down.
That is absolutely you bet your book. I'll bet my book shot.
The only thing I'll say, and thatcher right, Matt's paying attention. Here's the only thing I'll say about the Derby is the Derby gets you chaotic results because not only is the crowd massive, it's a huge field. And so even though we're down to just nineteen horses after the scratches, nineteen horses is more than double the typical size of
a field in a race. So chaos reins. Last thing that creates chaotic results and why sometimes long shots are a good bet is no horse has ever run this distance before this long a mile and a quarter, and most of them will never run this distance again. AM mile and a quarter is a rare distance. Nowadays they tend to could be a mile and so you can get chaotic results. So, Paul Sweeney, if you want to dial up a long shut or two knock yourself, nice good stuff.
Why don't we have a whole show with David Pye knows I know he's coming back.
We're gonna, don't worry.
At least a weekly show we should have with you exactly.
They have a Populattopoulos, executive editor for Bloomberg News, and he is our.
Resident horse guy. You gotta have a horse guy, and we got one.
You're listening to the tape Can's are live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and 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.
It looks like there's a group of shall I say, dissidents or activist shareholders yep, that are attempting what I imagine is a very long shot bid to remove Warren Buffett yeah from the air, from the position his position as chairman at Berkshire Hathaway at the annual shareholder meeting this Saturday. The reason, apparently, is because of his ties to Bill Gates. The two are famously close and Bill Gates charity charitable foundation, the Bill and Melinda Gates Foundation. I don't know why, but.
We've got somebody who does know what exactly.
We've got the author of the article, the reporter joining us right now, Bill Allison, comes to us from Washington, d C.
Bill, what do we know about?
First of all, how how much of a long shot is this? I mean, doesn't Warren Buffett have incredible uh, speaking of brand loyalty, just unbelievable loyalty among Berkshire Hathaway shareholders.
Yeah, he definitely does. And you know he owns, you know, almost a third of the stock. So that's going to be votes again, and it's you know, it's very unlikely. A similar proposal was introduced at the last year's meeting,
but it did get some support. It got almost eleven percent support, and that's largely because CalPERS, the California Pension employee retirement system, voted for the resolution and they said that they long support you know, corporate governance where you have an independent board share rather than having the CEO play both roles.
So is this a political thing?
What do we know about the reasoning behind this that perhaps some investors don't appreciate the politics of Gates and maybe some other folks that mister Buffett may align himself with.
Yeah, I think that this is this is sort of the question that these these folks are raising, is that you know, Warren Buffett has last year's meeting, he said that basically, you know, if you take political positions, you end up angering more people than you please. And it's you know, he would never do that to hurt Berkshire
half the way shareholders. And then these guys are looking, well, you serve on the board of an organization that, you know, maybe not political in the sense of Democrats and Republicans, but political in the sense of they take a lot of positions on social issues that are you know, frankly, really contentious. And it's you know, whether it's you know, abortion or transgender issues or uh, you know, how how we teach students in schools. You know, a lot of
these things have become hot button issues. And what they're asking is, you know, are pointing to, is you know, you have this close association with this you know, foundation that has you know, all kinds of different programs that some of which could be controversial or view as controversial isn't that doing what you said you wouldn't do?
All right? So you know, I was struck by your story in that it says Warren Buffett's ties to Bill Gates, whose charitable work has triggered criticism, are putting investors in Berkshire Hathaway at risk. I would have thought his ties to Bill Gates are a problem because of Bill gates association with Jeffrey Epstein more and more of which we're learning about.
Well, that's something that you know that the shareholders. It's group called the National Law, Legal and Policy Center, and that's one of the issues that they're raising is that, you know, there's this reputational risk that you know that Bill Gates has kind of become you know, his his reputation has taken a hit. You know, it's not just
you know, Jeffrey Epstein. There's the question of you know, his you know, the divorce and everything else, and it's it's kind of that, you know, he's become much more of a you know, much less of somebody who you know, people thought was you know, always had his heart in the right place. To raising some questions about some of the things that he's done. In fairness, to Bill Gates.
He said that it was a mistake to know Jeffrey Epstein, that he regrets it, but still this is just you know, you know, Jeffrey Epstein just keeps popping up in the news. You know, there's just a couple of series of articles looking at his appointment calendar and lo and behold. You know whose name is mentioned in it? But Bill Gates, you're listening to the tape.
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Brian, You're in our Bloomberg Interactive Broker Studio. I love the casino business. Most of the casino operators have reported numbers. Just generally speaking, are people rolling the bones here these days?
It appears they are. I mean, gaming has been generally speaking, really quite strong. You know, there are some puts and takes, but domestically Vegas is looking quite strong. Probably the biggest inflection point is the group convention, Business and Business travel appears.
To be coming back.
But you know, the overall tone of gaming lodging earning season thus far has been quite positive. Maybe a little bit of tentativeness and certaintly about the second half, but overall quite positive. And you know, also just directing this to what happening internationally, McCaw was also doing quite a bit better now that the travel restrictions in that part of the world.
So that's off the coast of China, that's the the big that is the Las Vegas strip of Asia, and that depends almost entirely on mainland China. And now that China's reopened, definitely okay.
I mean, the whole high end business has been choked off a little bit because there's some restrictions on junkets can't want money, you know, junk get credit. But overall, you know that business is definitely coming back because of the winding down of the zero COVID regime. That's what's really helping that part.
Of the world.
So when I think Vegas, how I got into Vegas was just a convention route. I mean, you go to the Vegas for all these conventions and that's kind of exposed to you to Vegas and then you're kind of for people like me, kind of hooked and really two to three nights is the max for me. Let's be honest.
So talk to us about that convention business, because we just had a story earlier that says March was a like almost pre pandemic levels and it was due in part two Taylor Swift and the PAC twelve championship and thinking things like that. So how's the convention business, So, I mean, convention busines, this overall, it's really coming back at its peak pre pandemic. It was maybe twenty one percent of total room nights and now we're pretty much
back there and moving that direction. You know, overall Vegas first quarter gaming revenues was twenty eight percent higher than the first quarter of nineteen, so we're now we're now above pre pandemic levels in terms of revenue.
Is it the best place? Is it the biggest place in the country for conventions? I mean, Paul seems to want to go there every other week for a convention, but that's just because you want to wants to hit the table.
Yeah.
What makes what makes Vegas really different is if you're in a regional casino in another part of the country. Gaming is maybe eighty five percent of the total. When you're out in Vegas, it's pretty close to fifty to fifty sixty forty in favor of the non gaming component. So the big change over the last few decades has been the conventions, restaurants, entertainment, meetings, all those all those businesses now.
And I would think it's a big part.
And I would think, you know, with the work from home, what I'm hearing from a lot of companies is we're being flexible, we're working from home, but we're trying to get together as a group more often.
I'm like, Vegas, you know, I mean, are they is that?
Are they when they're when they're booking some of these groups, Are they seeing some of that as something new?
Maybe?
I think so. I mean, Vegas this has you know, it's not just about Vegas being the fun destination. It is, but it has the infrastructure right. It's got the airport, it's got the hotel rooms, it's got the amenity package, it's got the convention facilities.
It's also got all the high end dining.
Has everything you need to make.
It right at the destination.
My man, all right, let's we got you. You cover all the fun stuff, including the cruise lines. Royal Caribbean had some pretty decent results here. I guess people are are they cruising, are they worried about inflation, are they worried about a recession? Or are they just kind of saying, heck, booked me up.
So you know, first of all, the ships are all back in service now, we're pretty much at our near complete redeployment after those ships were paused. And you know, just the numbers that just came out recently from Royal Caribbean where the strength they're seeing, and it's it's really quite strong.
Wrong is.
You know, it's global, but it's it's certainly we led by the North American consumer in the Caribbean and the sort of shortly bookings are improving. It's gonna take a while for cruises in China to come back, you know. But but the North America consumer of all things leisure is really health in there.
And that's what he does.
He's a leisure There's an institutional investor magazine category called leisure.
Have you gone on a cruise?
I have? I have?
You don't.
I've got on cruises as part of my due diligence roles in analysts and also for fun. But I actually do, I personally do enjoy it, which helps me.
And Paul are gonna go. We're gonna do it cruise.
We're gonna do a cruise and we have to. All right, great step Ryanegger.
He covers all the leisure stuff, the casinos, the hotels, the cruises, all that fun stuff you also cover, you know, just anything that's fun.
He tends to cover, which is a great career choice. He made it, like, yeah, he does, so it's all good.
Thanks for listening to the Blue Burg Markets podcasts. You can subscribe and listen to interviews on Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three.
And I'm Paul Sweeney.
I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio