Rotation Out of Tech Is How To Make Money This Year: Nick Colas

a while. Nick Kolis, joins us co founder of Data Trek Research, and he was one of my favorite guests. Um when I used to anchor out of New York. Um, Nick, it's your notes that I really loved. I used to be on your mailing list. I feel like I got kicked off at some point along the way. I don't know that was perfect. Hype are there, Matt? You gotta be. The commissions have to be there. But but um, today you come to us with a note, with a with

a survey. Really the results of your bubble survey. You had about four people, UM take the survey to tell you, you know, if they're seeing bubbles, what a bubble is, which bubbles are most concerning? What was your big takeaway Nick, from from the note from the survey. Sorry, yeah, well, first all, we'll definitely put you back on the press list for the product and apologize for for the for the omission um. The bottom line on this survey was

really interesting because what we asked people. We asked people a couple of different directions and asked them where they see bubbles, And eighty five plus percent of people do see bubbles in the market. And these are professional investors, high network individuals, people who understand markets. Two see there's a bubble somewhere that by far the biggest one was bitcoin. They called out bitcoin by orders of magnitude more than

any other thing. So two hundred and eighty votes for bitcoining and being in a bubble out of four hundred. The next next one up nine votes for US large caps, sixty four votes for US small caps. But so stocks, a little bit of bitcoin a lot. Hey, Nick, you know you and I've been in this business a long time and you kind of a similar history here in

terms of time in the business. What do you make of SPACs, SPACs or something that we've seen in various forms over the years, But boy, have they just exploded onto the marketplace. They have exploded. And we did ask about SPACs and the survey and the majority of respondents did see SPACs is emblematic of a larger bubble in certain parts of tech. Look, underlying SPACs is a good fundamental thing, which is maybe the I P O process is a little bit broken and vcs have to find

other ways to monetize their assets. Totally fair, but I think the enthusiasm O respects is way overdone because they so often linked to electric vehicles, autonomous vehicles, things like that. That gets people all juiced up, and it does create a bit of a bubble in that segment of the equity market for sure. I I don't suppose anyone mentioned

n f t s. Did you see that? Uh, Nick, people are paying hundreds of thousands of dollars to buy NBA moments, which are just actually video clips connected to a digital token that you don't even really own. Yeah. I I did a piece on n f t S

for a client's last night. It really is like, it reminds me a lot of I don't know, if you were crypto kiddies, the Etherium product back in twenty It's the same company, dude, It's the same company, Dapper Entertainment started the kiddies, and then the NBA hired them to do these moments on top shot. You know, God bless them. They figured out a way to pull some money out of this system, which is which is great. I just thought,

like a Matt, you're a car guy. What if GM were you to sell um fifteen second clips of the first Corvette launch at the Waldorf in New York and nineteen fifty three, well exactly, or for the Mustang when they unveiled it on the Empire State. This is the idea, and they could do that. And the idea would be that you got the only you know, authentic version, but anyone else can just get the clip on YouTube. Right.

But the Corvette guy, the Mustang guy, he's going to want the original because he just spent three hundred grants for his original fifty three that he's gonna want to spend a hundred grand for the original video clip. This. I gotta rip up this grip for a second. Here. We can do that in my Tom Keene, are you a bigger fan of the C one Corvette? A great example was in the movie Less than Zero or of the C two, the split window is the one I love? Which, Nick, which you think is? Or do you like one of

the newer ones? Look, I love the latest one flat out. I think that's unbelievable. That's a great concept, and I'm so glad they finally moved to mid engine. Other than that, you've got to go back to the original. You gotta go back to the source water goes back to Lake Victoria, the whole thing, and it's the c one, all right. So we're talking about expensive cars here, we're talking about rare cars. So, Nick, when a client asked you to write up a note and do some research on these

NBA clips, I mean, what does that tell you? Well, it tells me that there's a lot of attention and there are Look, I mean, this is one of those things where you can make a lot of money very quickly if you happen to be in the right space, if you're in the art gallery space, if you're in the creative space. There's a shot here, and there's some

heavy money behind the centrition. Horowitz wrote up a large blog entry on this very thing, and if you listen to Market and Ben's um Clubhouse chat a couple of weeks ago, it very clearly fits into a much larger scheme of a decentralized Internet, which is like their big thing.

So what I try to do for clients is just first of all, say like, yeah, this is coming and if you happen to be in on this early, you can make some money doing and no doubt about people are doing it right now, and there's some ten gentle things that big companies can do, but more than anything, just contextualize it as the Silicon Valley is very strong attempt and this will be going for the next ten years to decentralize the net and get away from one aws one Apple app store and try to figure out

how to end run all the big tech giants. That's what the Silicon Valley and the vcs are trying to do. So you used to be a banker to doing the same kind of things that well Paul was doing it for for media um and telecoms right and you were doing mostly the auto industry nick um equity offerings, advising on M and A, etcetera. When and that going into the Internet bubble. Do you see any similarities between what we're looking at now and then or is the are

the time periods just too different to compare. No, there are similarities at the very highest level. And the similarity is the pandemic gave tech a huge boost, and they both in stocks and in usage just societal usage, the same way Internet one oh from seven to two thousand did it for the first front of technology. And now we're beginning to see the rotation, which is very much like what it was in two thousand and one when

dot Com began to blow up. I remember looking at Vistia, I'm looking at Forward, looking at GM and thinking why are these stocks up so much even though we're clearly at the end of the cycle. It was just money lead being tech and having to go somewhere else, and that's what was happening, and that's what's happening again now. But you look like the good Year chart for the last couple of weeks. They're buying Cooper Tire finally, which is awesome, but man, that thing was just dead for

months and now it's coming back to life. Forward the same way. So I think what you're seeing is money rotating out of tech and back into the two older companies. And if you're just looking at independently, you think, what is going on here? And that's what's going on. Money is leaving tech and going into basic industry encyclicals, and we think that's going to continue. That's going to make money this year. Hey, Nick, thanks for joining us. We

always appreciate getting your thoughts and your insight. Uh. We're always afford to chatting with you and Nick call Us. Co founder Data Trek Research. Matt Nicks is one of the smartest folks. We talked to boy every time we have them on. I learned a lot. And he's got taste. Yeah. Now I will disagree with him on that. I like to see two Corvette better, but I can admit that I don't have the greatest taste when it comes to

these things. I know that Nick and I both air love for Ducati's and he has one of them, um coveted UH sport Classics or he has the GT version which they don't make anymore. So he's got the car thing and that that's great. And you've got the less than zero reference in there, which I totally got and untillly down with. That's good for that. The spacks are

coming fast and furious. Dave Wilson, he brings us up at Data on a daily basis on the new spacks, and they're coming from a wide variety of backers and focusing on a wide variety of industries. It's kind of the new I p O, if you will, of recent months. David Dwalt, he's the founder of a spack called night a Dragon. He was also the former CEO of fire Eye and McAfee. Uh, they are spack supposed to start trading on the nastack today day. Thanks so much for

joining us. We appreciate it. Talk to us about Night Dragon. What's the strategy here? Yeah, thank you, thank you for having me. Yeah. So, you know, when I was CEO of McAfee, ironically, there was a famous cybers cruity tech called night Dragon, and my researchers then sort of said, hey, here's uh, here's one of those seminal moments in cyber security, and they named it night Dragon. But I always said, if I ever built my own thing, it would be

called that. But hey, listen, night Dragons the whole platform. We've been working hard as a team the last few years. Um, you know, funding investing into cyber companies from incubators to early stage to now late stage kinds of companies. Um, really the spack here, which is a you know, a new type of product called the scale and get into that.

But really we wanted to help create companies are really efficient way to go public and these would be top tier cyber safety type companies that we know well as a team and we've known as you know, public company executives and help them get to a high potential for shareholder value. Dave um Night Dragon is an awesome name, first of all, and you also have served as CEO of a number of other companies, including Fire. I that

name totally rules um McAfee isn't nearly as cool. I would have changed that, But the point is you've got a ton of experience in this industry. And it was pointed out to me earlier that SPACs maybe just a way for people who don't have you know, ten million dollars to throw at um BC partners to get into private equity. Do you think that's along the right lines? Well, it certainly is one route, especially if we start to see the evolution that Spinning Eagle had, which is a

spack platform, you know, a super spact platform there. There's there's new sec rulings coming out that you could do a multitude of SPACs in one vehicle, and you could have two, three, or four or five of them, and you could have small, medium, in large type companies, you d a into the back product. And so this is here to stay. I mean there's no doubt about I mean,

deal certainty, deal closure. You know, management afloat, managing short positions, you know, adding management teams into the board and advisors, you know, doing this with quality investors, quality leadership, and it looks like it's the right way to go, especially especially if you have foreign national companies trying to come into the US as well, and they want to use the listings and the investments as a way of gaining scipious approval or government US access, getting more open markets

to especially in national security and cyber world. You know, these companies are often founded in Israel now or you know, other parts of the world. In fact, you alluded to Firear. That company was founded in Pakistan and you know we brought it to the United States and helped vet it.

My other company for Scout, was founded in Israel. So you know, being able to be world class technology to the world stage is a little what this operating team has been good at and so we have a lot of different targets in mind, a lot of different opportunities, and uh, we think night dragons are really nice. Please tell us on here to do it. Please tell us before you make the offer so we can front run them. I'll try. What type of companies are technologies are you

guys gonna be focused on initially? Yeah, so you know our market segment, what we what we all know here is a collective team, you know, a hundred and fifty years of collective experience by this team. But we're focused on cyber safety, security and privacy. I always like to say security from silicon to satellite. But the idea here is companies that really are in important threat areas. And

let me just explain for a second. You know where do we see attackers really driving uh, you know, successful breaches. What we trying to do is build commercial defense to meet that threat. And we've identified ten different sectors that have multi billion dollar total addressable markets that we would

like to target um our work towards. And they can be everything from satellite leo's with lower orbit satellites and now connecting everything from your watch to your car to airplanes, light shair safety, security, for Delta Airlines are aircraft are now connecting up in the ways and the security there you know, needs to improve a lot. So there's really amazing space economy, safety, security opportunities, but all the way

down to identity management, cloud security areas, social network. If anybody you know watched the last you know, four years, we know manipulated information, false information, is you know here to stay? How do we fix that problem? We have some really cool companies that are Night Dragon portfolio already, as well as ones we know that can come and meet these sector areas and we can help take them to their full potential. We believe as a public company

excellent Dave. Great to get some time with you. Fascinating stuff, Dave. D Walt there who used to run uh fire Eye McAfee document um now talking about his Night Dragons. Back at the beginning of this lockdown, I was drinking a lot of beer, and I was gaining weight, and I was kind of tired, and I thought, this is not a good idea. I've got to make a change in my life, so I started drinking wine instead. I want

to bring in right now. Steven Ranickally, Global beverages strategist at Robbo Bank International to talk to us about the impact UM, maybe a little bit longer term than than what I've experienced of the lockdowns the pandemic on the wine industry. UM, Stephen, thanks so much for joining us. I'm assuming a lot of people are drinking more wine. Is that wrong? Well, you know that's first off, let me say, I think you made a great switch switching from beer to wine. That will make a lot of

fines that I deal with very happy. But you know, I think overall, when you look at it, people didn't really drink much more. What you saw was a huge shift in channels, right, so people, you know, they were we know that restaurants were shut down, bars restaurants shut down, and you know, people were doing all their shopping at

a grocery stores. So when you look at the numbers, the numbers that were put out oftentimes really just looked at grocery stores and you saw this huge jump in sales, and everyone thought, oh, everyone's you know, everyone's drinking a ton more. But really it was just compensating for the loss of sales and the on premise and that, you know. But what was really important behind that is certain segments of the wine sector were hit worse than others because

of it. Steve talked to us about the financial health of the wine industry. I'm wondering if it's if it's like other industries that we've seen there in this past year, where if you're a big company, good balance sheet, access to capital, you generally formed or fared better than maybe an independent player who maybe again doesn't have access to capital. Talk to us about the wine industry, how those players

have fared. Yeah, I think I think what you've laid out as a as a pretty fair assessment, and I should say, you know, it's it's it's always a bit of a mixed bag. Even among some of the smaller players. If you had a really strong brand, really clear identity in the market, you know, some of those players did really really well, didn't really miss a beat, but it

was really on the whole. I would say it was, you know, larger wineries that have the national brands, that have good access to the supermarkets and the big retail accounts. Those players did did much better. They fared much better in than than a lot of the smaller players that you know lost not only you know, they lost out

on sales and restaurants. But also, you know, a lot of the tasting room traffic, a lot of the the smaller guys depend on people traveling out to California, Oregon visiting the winery and you know, and generating no sales. So those guys got hit kind of, you know, on on both ends of that. So so when do you steve When are some of those wineries going to open up some of their tasting rooms just asking for a friend? You know, it's it's it's it's been touch and go. Uh,

you know, we're all kind of waiting. I think we're all kind of looking at this and saying that by you know, hopefully by summer we're getting back to two more normalized activity. Uh, you know, restaurants opening up, tasting rooms and so forth, and so, you know, I think we'll start to get back to some level of normalcy. But it's gonna take time, you know, and especially on the restaurant side. You know, we've seen the numbers out

of the National Restaurant Association. There are a number of you know, there's a large swath of those those independent restaurants that are not going to fully recover. They're not going to reopen right so that really kind of creates some challenges and winners and losers within within the wine industry. Some you know, some of these winders will be much more challenged than others. You know, I I would, It's interesting. I would normally if I wanted to, um, go on

a wine tasting. My dad loves the Silver oak Um place out in in uh in Oakville, California, and so maybe we'd go out there. Um. But if we're stuck in lockdown in New York. My buddy Neil Grossman has a vineyard now up by Millbrook, and I wonder if more people are trying their local wineries, local vineyards just because they can't get to Napa Valley. Yeah. I think there's there's probably a fair amount of that, and there will be right it's there, We're you know, moving back

to visiting wineries and so forth. It's going to be a process. You know, we see some consumers, even with a vaccine, much more reluctant to travel. So I think there's gonna be a little bit of that. But also, you know, one of the big winners in in has

been e commerce. Right, You've seen people shifting from from restaurant sales to buying online and you know they're fine ending their great wines and they can have those at home, and you know, so finding ways I think the challenge for the wine industry has been finding ways to connect with the consumer where they are. Hey, Steve, you know there's so many independent wineries out there. Are they going

to be? Are we going to see some consolidation in this industry because maybe some of those smaller, weaker ones that are gonna be a little bit vulnerable here. Yeah, I think you know there's there we're certainly looking at and saying, you know, moving forward, we're seeing signs of consolidation. We put out a note, you know, a couple of last month that said, you know, when you look at some of the signs, were likely to see some consolidation.

And we've already seen some really interesting moves. Um, you know, we're larger reasonably sized wineries either going uh you know the spack route. You saw the Vintage Wine Estates deal that was you know, that was a huge deal, seven hundred million dollar deal there you know, merged with us back and and you know we had them. We had the CEO, Pat Roney on on on our podcast and we kind of talked about some of what they were going through and and why this SPAC deal made sense.

It was a really interesting move, right, this rise of spacts and how even that's playing in in the wine space. But even aside from that, you've had duck Horn announced uh an I p O. You've had Virgin Wines in the UK announce an i p O. And we've also seen kind of behind the scenes a lot of the larger wineries that have come through, you know and reasonably good condition, saying hey, maybe this is a good time

for us to make some acquisitions. Right, So it's an interesting time in the wine industry with a lot of a lot of acquisitions and and uh yeah, I think we'll see more all right, Steve, thanks so much for joining us. We always appreciate a Steve Ranically of Global Beverages Strategist at Robbo Bank giving us the state of the global wine market. The pandemic has upended, has disrupted how we all work, or how many people work, with many people being forced to work from home, changing our calendars,

changing our work days. Now, the question is, let's talk about that five day work day. Is that something that needs to be looked at. Let's turn to Stefan Nicola Bloomberg News in Berlin. Stuff and you've got a fascinating story here. The four day work week gains popularity. What do we know? Yeah, it is gaining popularity around the world. I talked with the CEO of a Berlin tech company and they had trials at four point five day work week after the pandemic really put a lot of stress

on on its workers. And what they found out is that sales grows employee satisfaction roles and client happiness roles. So in January they decided to go for a four day work week at full pay and full benefits, and the CEO told me the initial experience is really good. So first of all, Um, Stephane, congratulations because your story is the most read story on the Bloomberg over the last eight hours. Seriously, there are thousands of stories on the Bloomberg and his is the most red So I

think that's pretty awesome. Um. Also, I learned something that I didn't know even as I'm an absolute Ford fanatic. Um just love the F one fifty. The Raptor is my favorite truck of all time. So and I've been to Dearborn a ton and I know the family and uh, the executives. I did not know. Henry Ford was kind of the first person to give workers two days off

a week. It used to be that workers only got Sunday off, and Henry Ford's idea, much like with the five dollar work day, was if I give them two days off, they're gonna have more reason to buy a car because they're gonna need it for um, you know, driving around hanging out. And he was right and that caught on, So, um, I think that's really cool, Stephan.

Are you hearing from employers now, like if they get three days off, they will totally stuff Well, you know, first of all, I think the working world in general has changed, right. The pandemic has appended the way we work, It has changed workplaces, it has changed companies. So authorities and employees around the world are rethinking the way they

put their employees to work. And one way is to give them one additional day of weekend basically or you know when when when they want to take Monday or Wednesday off. That's all the fine as well. It doesn't necessarily mean these workers will output less. The CEO of a one told me they these his workers don't necessarily just just cut full day of work, but they work smarter and just as efficiently. So you know, things are changing.

And yeah, this may just be you know, the first first tendency of of a Ford like moment that you ad it earlier, Matt. So, Stefan, it seems like maybe there's some cultural issues here. Perhaps some folks in Europe might be more open to it. Maybe some yeah, you know, I mean they take longer. You know, we Americans we look over to some of these Europeans. We see, boy, these they take these nice long vacations and they you know,

and it's just perhaps they don't work as hard. There's a perception here in the US that maybe the in countries don't work as hard as the French. Right, that's specifically the French, because the Germans obviously work hard. Have you driven a Mercedes lately? I mean yeah, come on, I mean, so, Stefan, is there do you think there's gonna be some cultural geographic issues? Uh? Well, first of all,

surely there will be cultural and regional differences. If you only think of let's say, Jack ma the co founder of of Ali Baba, who sort of hailed the n world work culture in China, that that grueling schedule that has secured a success from many tech companies in Asia. Uh. You know, it'll it'll take a while until it will catch on over there, and it may take a while until it catches on in some other countries. But you know, this is not an isolated trend in Europe or in

a certain country. We're talking about New Zealand, Japan, Spain, even companies in the US have have tried this, So I think it's it's not necessarily isolated to just one region. All right, Stephan, thanks so much. Stepan Nikola there with the most read story of the day, um and appetizing, titilating four day work week. I don't really think it's ever gonna go down, um globally, Paul. And it doesn't seem like something that's going to happen in the US. Yeah,

I don't know. I think what it's changed here is technology, because what we've learned during this pandemic, with technology, you can be as productive or more productive in some cases with a much more flexible work environment. You don't need to be in a physical office for some roles. Uh. And again, as long as the productivity is there, then I would think managements the C suite would be open

to some discussions. So I suspect that there might be some changes coming along here that might be a little bit more permanent I could buy. I'm hopeful. I'm hopeful, But look I get so you and I work for the same company. I get thirty five days of vacation every year. What do you get one? Am I? Oh, yeah,

you're you're in Europe at twenty See that. I want to move back to the US so badly because I miss football, and I miss pickup trucks and I want, you know, a big backyard, but and at homecoming and you know, school sports. But I do not want to only have twenty days of vacation a year. The town's awful, and most Americans, I would argue, don't even take it for a lot. Something happens. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews

with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller three. On Fall Sweeney, I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio