This is the Bloomberg Surveillance Podcast.
I'm Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best an economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business app. Right now, and this is important. You need to reset
for the weekend. You need to reset for the second half of twenty twenty three, and particularly if you've not participated in the seven tech stocks. Mike Wilson will brief on the caution that is out there. He is at Morgan Stanley. They're us equity strategists and has been. I'm going to suggest cautious through thick and thin of this pandemic and forward. Mike, what are you writing this weekend to recalibrate a cautious call.
Yeah, good to see you guys. I mean, our call really hasn't changed. You know, we're very disciplined on price and as you know, we got tactically bullish last fall at thirty five hundred because that was a good price and now or of course back to the high end of the range, and that's not a good price, and that's at the SMP level. That's not really what's been interesting over the last six or seven months. As you know, what's been interesting is what's going on under the surface.
I would say in the fourth quarter that was a very hated rally because it was led by kind of the old economy financials, industrials and energy materials. It was all based on, you know, the China reopening story, which was legitimate, and technology stocks obviously disappointed and they did not trade well in the fourth quarter, So there was a hated rally because that's what people own.
Now.
Of course, the SMP is training at the same price it was in early December, we got cautious again and tech is obviously going to the moon. And now this rally is loved because these you know, this is what people want to buy, is what people want to own. Its a lot more in interesting and you know, kind of exciting to own AI and technological revolution, and it is to hold some those old economy stock that's you.
Know, well why do I want to own this long term?
So it's just an interesting development we would characterize this as the bear market is continuing.
Okay, this is what bear markets do.
They they're designed to fool you, confuse you, make you do things you don't want to do, chase things at the wrong time, probably sell them at the wrong time. And the overriding we think the overwriting driver. Okay, if this year's rally has been increased liquidity. Liquidity has improved dramatically both on a global scale, and the weaker dollar
is helped, that's going the wrong way now again. And then of course, ironically, the banking failures that happened in March led to an injection of liquidity from the FDIC and the FED, and we think those things have really conspired to drive the market. I mean, nobody talks about the fathtic crypto is up sixty percent this year, okay. And then the next one, of course, is the is
a tech world, So this is what's going on. We think that the fundament cases not support you know, where stocks are treating today, whether it's at the index level or at the single stock level, and the second half is going to be a bit choppier and probably downward in the index.
Let's just talk about the index a little bit more and great to have you with us as all ways, particularly going into the long weekend. Mike, you really started the debate this week on this program, and we reflected on your note from over the weekend into Monday when you said the following that there are many technical signals that conflict with the idea that this is the beginning of a new cycnical ball market. There was a short list after that of those signals, and one was extreme narrowness,
poor breath. We presented that severe supermanium a peer of yours over at Bank for America, and she said, narrow breadth is not a precursor for doom and gloom. Michael, just wanted to give you the opportunity to respond to that. What is it about narrow breadth that you think signals something at the index level?
Well, I think there's you could debate this one way or the other.
Meaning, when you make a market low, you typically do have you know, severely negative breadth. That is a good sign. However the index is usually down with it. So we think where we are is the index is telling you things are rosy, things are fine, and the breath is telling you otherwise. And then when we put our fundamental overlay on top of that, which is, you know, we're
way out of consensus now on the earnings front. Then we can make the conclusion that the internals right, the breath is being one of those, but the internals and the leadership is telling you that growth is going to be a problem in the second half of this year. Whether that's an economic recession or not, doesn't it We think it's going to be an earnings recession that's way worse than what people are currently modeling. And like, I want to go back to the beginning of the year.
You know, you guys are good readers of our reports. You remember in the beginning of the year, I was somewhat nervous that everyone was in the same camp.
At that point. We were our view is very consensus.
On the fire and ice, you know, the tightening and then the slow down, and so we were trying to figure out, well, how could everybody be right? That doesn't work. And so what we've done now is we've worked off that oversoul condition.
And more importantly, now.
I would say the consensus is actually optimistic on earnings again, and that's just where we completely disagree.
So Mike can we just build on the challenge to the index level retesting the loads of last year, given the muscle of five or so names doing just ridiculous things of one hundred percent plus METSA and video, et cetera. Is that a big enough challenge to the view that we can retest the lows of last year.
Well, not necessarily note at all.
In fact, it kind of sets us up where it's probably inevitable now because what's happening is you're you're basically forcing people into these stocks at bad prices. Now. I mean, you know, the evaluations last fall on these stocks in particular was extremely attractive. And if you look at the performance of all of these names, with the exception perhaps of the one this week, which you know earnings are going up, the earnings are not driving these stocks. It was one
hundred percent multiple expansion, which goes back to our gritty questions. So, look, the price is wrong in our view because the earnings are probably going to be wrong for most of these stocks, not all of them, but most of them.
And so from here we think it is still a stock picking game.
And of those six seven eight stocks, my guess is two of them will probably be okay, and the other ones will not because there's they are the economy.
Okay, they can't avoid the economic.
Slowdown and the top line slowdown that we see in the second half of this year.
Mike, maybe a bit off your remit, but I got to go here. Just percolating in the zeitgeist into June is the once again debate of active versus index usage in the equity market. Give us your update on the value of active versus the value of index investing.
Really interesting confluence right now, because you know, you could argue both are working at the moment, right I mean, you know, having the right stocks in your portfolio has been really the only way to make money this year. The problem is is that those stocks are such a big part of the index. The passive person could say, look, my passive strategy is working as well, you know, and so we still think active will have a comeback here as we go through the next couple of years. It
already is to some degree. But boy, it's you know, it's the market once again. The market is doing a very good job of kind of fooling us into whatever we want to believe. We think active will be the place to be for the next two or three years. It's going to be a comeback there.
Mike, uh, dovetail this with Ellen Zettner. Take the recession call of Morgan Stanley and dovetail into your caution on equities.
Yeah, so Ellen and team, I mean, they're not looking for a hard landing, but they are looking for, though, is a very sluggish economy. So there's sort of zero percent P growth right now that you know, that's fine if you still got price. Our view is that zero percent GDP growth will lead to bad price, and we're
already seeing that in the good sector. And then we've done some consumer work recently, which is we're starting to see signs that even the high end is starting to pull back on spending intentions on services.
So you know, services is seventy percent of the economy.
It's you know, goods are seventy percent of the S and P five hundred earnings. So in other words, the economy can stay kind of at zero, but that's not going to be a good outcome for SMP ear needs.
And our view, Mike Debasi Lobster.
Well, we can't afford it because we're parish. You know, I'm cheap anyway, So you know.
Mike, we'll try and hook you up with one. Thanks for repairing this morning. We appreciate it, Mike Wilson that most.
Cares about economics, fans investment or that, as you know, over the years I've made clear, the Bank of England simply does it better. Maybe it's because it's a surprisingly new public institution versus the FED and all the codified history of the Fed. But what they do, more than anything is they take in people with different views. I think of Adam Posen now at the Peterson Institute. Excuse me, the Internet, I I f I'll get it right, International Economics,
Peterson International Economics in Washington. I think of David blanche Flower at Dartmouth and now they go brilliant and the number of months by bringing in somebody really original in economic analysis and policy discussion, Meghan Green of the Croal Institute and of course at Brown University. She will join the Bank of England. And obviously with those constraints she cannot speak about the Bank of England. She cannot speak
about the United Kingdom. We checked where they're entourage, she cannot speak about the future of Tottenham's Spurs, and she can definitely not speak about the politics between Cambridge and Oxford is just too deep and too dangerous to go to this morning. Megan, congratulations on this hugely important appointment. I wanted just to talk today about the American economy and the certitude we have of guessing vectors of inflation. You're expert at the history of the study of that.
Can we actually gain a vector of inflation?
Yeah?
Look, the inflation data was always going to be bumpy coming down, and that's what we're seeing. But I think what we can gauge is sort of underlying trends and look for signs of persistence of inflation. In the US, the core capital goods data that just came out surprised. On the upside, that's about seventy percent of fixed investment, So that suggests that demands pretty strong in the UK economy,
and core PCEE was stronger than many had hoped. So, you know, I wouldn't read too much into one data point, but it does suggest that the FED isn't done. So even if the FED does end up pausing, I don't think it's finished here. We've seen that corporate earnings have been pretty strong. That means that there's a lot of labor hoarding that may well continue keeping the labor market strong. That again keeps demand strong and keeps upper pressure on inflation.
So I think that the Fed's got more work ahead of it.
One of the Meghan Green realities is plain language. You actually speak in English, Thank you for that'll help you with the Bank of England. You speak of the is a weird time in history. Define that phrase.
So it's a weird time in history. Just given the success of shocks that we've had on the economy between a pandemic a war, a lot of the indicators aren't really responding, particularly to tightening of monetary policy, as one might expect. And the labor market here is a great example. The labor market is holding up freakishly well given how much aggressive tightening there's been in the US, and as I just said, you know, that keeps demand really strong, and so the Fed's trying to sort of kill off
demand to bring it back in line with supply. So we can see price stability, but it's just not transmitting monetary policies, just not transmitting into the real economy as we expected it might.
Donnie Constanin was on earlier with Miszouo, also out of Oxford, and he made very clear as there is a partition between demand driven inflation and supply side inflation. Obviously that's a pandemic inflation. Are we still living the pandemic in the wall of data scene in America this morning? Are we still living the pandemic in our funny savings ratios and what that means for income and spending?
I think we are.
It's a bit too early to say how long that will actually last, but we're seeing it in consumption patterns. We're seeing it in people's decisions to leave jobs to move, We're seeing in the real estate market. So the pandemic is very much still with us, and I think some things will structurally change going forward as a result of the pandemic. We're just not sure exactly what it is. If you look at the labor force participation for different demographics, overall, it's recovered.
In the US.
It took a really long time, but there are differences, particularly among older workers, and I think that will be with us for a while. That said, we really struggled with supply constraints, not just in the labor market, but also of course with global supply chains during the pandemic and an immediate aftermath of the pandemic, and if you look at a bunch of gauges for global supply, chain
tightness actually eased quite a lot. So I think that piece has eased, and yet inflation remains stronger than what we'd hope.
Okay, inflation is stronger than we hope, but there's a belief there of getting back now. I don't want to get in trouble with Bank of England here, but the former Vice chair of the of the FED, Richard Clarita, and others are debating a two percent idea. Would you suggest the greater theory of our macro policy forward is going to be an adjustment of any given central banks band or target that they're getting back to.
So we may we're certainly beginning a debate about that, I think among the intelligentsia, but I don't think we've made much progress on that. Some are calling for a higher inflation target in the US, in particular, you know, somewhere around three percent. The FED and most other major central banks have defined price stability as is the metric target around two percent. What the academic literature shows is that actually until inflation gets above four percent, most people
don't really notice it. Yeah, so I'm not sure they don't notice inflation at least in terms of you know, they hit to their actual standards of living. So whether it's two percent or three percent, that may be more of an academic debate.
You absolutely nailed this.
I got one minute left back, and I'm sorry, but this is research out of VCU that Olivia Blanchard is calling sentient inflation. Are we anywhere near sentient inflation where we're just comfortable with our inflation rate?
So no, I don't think we are near an inflation rate that we as the public or that the Fed's willing to tolerate. In the US, I think I think it will need to come down closer to the two percent target before the Fed's really ready to hang up its boots and be done with it. So, as I said, we might get a pause in June, but I wouldn't take a pause to mean that the FED is done. I think there's more work to be done.
Megan very quickly here, and I'm really trying to stay away from the Bank of England police here, and I think I'm safe going here as well. One of the great things about Fenway Park, Meghan Green. And it's not Narrogance at Lagger Beer, it's the Yankee Lobster Company. Can you give us a rating on the lobster roll from the Yankee Lobster Company at Fenway Park?
I can't tell me because why would anyone ever get anything but a Fenway Frank at Fenway Parks? So I've never had it. I stick with Fenway Franks.
Bottle that and you will see that.
As she enters the August doors of the Bank of England, Meghan Green, congratulations from the Crawl Institute. Joining us now Janette Lowe, Managing Director Policy Research at Strtigas it is a Baird company.
Jeannette, what is a distinction for you? What will you listen for this weekend?
So first, thanks for having me. So we do have a deal coming together, which is good news. There are still a lot of details that need to be worked out. As you continue to hear that they've made progress and they are limiting the number of issues that still need to be taken into account and finalized among the negotiators. So it does seem like we are getting closer. We're definitely going to be looking at how this deal is structured.
This is definitely smaller than what the Republicans initially proposed. They were looking at ten years of discretionary spending PAPS.
We might be more at two years.
So that how that's going to be structured is going to be important, I think for the markets, because there is this anticipation that we're going to get some austerity out of this deal. But even if we don't get austerity out of this deal, we still think there's more for school austerity in the years ahead.
For the United States, this is really really important right where I want to go, and this is literally the history learned.
At Richmond and BEU.
What's the difference between our austerity and what's say the United Kingdom is living. They seem to be drowning in an austere psychology. I don't see that. In the last eight or ten years in Washington, I see you know, if it moves, spend, it spend every dollar.
What's changed.
So what we've seen is that, you know, obviously the pandemic, you've had extraordinary fiscal stimulus come into and that the government provided, and then obviously we've had inflation come on top of that. What's really been the key change now because to your point, we have been able to just spend and cut taxes quite freely for the past number of years, but now that we've had to interest rates prise so much that is now increasing the cost of the US debt, and so net interest costs for the
US are now increasing. We have seen historically that once those rates hit fourteen percent of tax revenues, financial markets begin to impose austerity on policy makers. We are currently at twelve point seven percent, and we anticipate that we will get to fourteen percent by the end of the year, and so that is where we're really looking. That's going
to start to squeeze the federal budget. So even if this deal is not particularly austere, which given the current contours it doesn't seem like it will be, we are still looking at the fact that over the next couple of years, the policymakers still have a number of other times that they're going to have to come into play to think about how do they bring the US fiscal budget into a better alignment to kind of handle some of these costs that they're dealing with.
Jenna, can we just finish on the X date, the so called X state the Treasury doesn't have a precise idea of when that force. We're all guessing KIA they have some information about tax receipts. It can be very lumpy sometimes. How are you reading the tea leaves of that situation.
Right?
So, I mean, I think all the negotiators want to operate off the fact that we have June first as the X state. Now there always is a little bit of flexibility with that. Treasury wants to have a little bit of a buffer so that if we were to cross over the X state, you would still have maybe some cash to still continue to make payments before the Treasury Department actually run out of cash. Maybe they might be able to make it to g third, maybe not.
They did put out an auction this morning that does make it seem like they might have a little bit more cash at the X state. But I think the more important thing is is that their negotiators are focused on the X state, and if we were to cross it, we do think that would be quite a market jolt.
It would actually help with get a deal if we still hadn't gotten one at the same time, but I think that the actual loss of cash is less important than that X state right now, just for policy makers to be able to control their.
Focus Jenna, just to finish on that point when they start to think about prioritizing spending. I think there can be some confusion between going through the X state and defaulting on debt obligations.
There can be two different things.
How do you think the treasury will start to prioritize spending as we if we go through that date?
Exactly.
It's a great point because the big thing that we have been trying to focus on is the fact that this would naturally not be a default if we crossed over the X state. Treasury we believe would prioritize making interest and principal payments on treasuries to be more about prioritizing spending and payments to bills that need to go out.
At some point. We still think that the treasury would prioritize things like Social Security, Medicare, defense, but then it's about whether or not you pay some other federal contractors on time.
So it seems more like a you.
Know what we would see when we have a government shut down with trying to move payments around, but it's not an actual default on US treasuries.
Thank Claire and that abulary shed it. Thanks pretty and Jeanette love that that's tatigue.
This is what matters, folks, because you're living the tech dream like we are, and mister Ives is leading away with optimism on their profitability. They're enduring profitability is at Webbush Securities in Kooper Tino yesterday they saw what you saw. What does the NVIDIA four point four standard deviation leap mean for alphabet and particularly what's it mean for Apple?
Look, I mean this in my opinion, it's eight hundred billion of income and I'll spend now over the next decade for big tech. When you look specifically at the read through for Apple, I mean there's no better read through what I believe. And we'll see more of the developer conference in terms of overall demand and this AI revolution, it's opening up a total addressable market for these big tech players that wasn't there six months ago.
Is it profitable?
Ad that's at the top of the income statement, that's cap bax off cash flow, But will it be profitable?
It is a gold mine in terms of profitability from a margin perspective, because that's right now. N Della and Redman, I mean they're popping the champagne because for every dollar that you're gonna see a AI spend, that's margin incremental fifteen percent incremental margin. So I think what's starting to happen with the stocks is that Street's starting to look
through the trajectory. You're looking at higher margin business growth that's really gonna be You could really count in two hands the amount of players that are gonna benefit in the first second derivative, And when you saw it from the video, it shows this is a gold rush that's real, not hype theme maybe like Metaverse, you know, and Crypto and some of the others.
So we've got into the long weakend, and there's going to be a bunch of family members of people who follow this stuff, maybe even by it, who are going to hear of this company for the first time. It's been performing really well for a long time. But for a lot of other people, they might not be familiar with this name. It's not exactly a household name outside.
Of Wall Street. Can you run people through what they actually do and what they're leveraging here.
So when you think Navidia, in my opinion, I viewed as the hearts and lungs the app percenter of Really from a chip perspective of AI and what i'll call big data technology, nothing works without the video chips, Microsoft, Google, Amazon. It's all feeding off the VIDIA. And that's why I
kind of view as the foundation. The best derivative in terms of what you see as a forecast, what's coming down the pike three six, nine months from now is what you saw from Jensen with the four billion dollar guidance raids, because that now is going to feed into Microsoft, It's going to feed into big tech, and I think you know, in my opinion, it's not just about the guidance. This is a historic day that shows the AI revolution.
I believe it's probably the biggest transformational tech trend I've seen since covering tech in the late nineties.
That's a lot of hyperbolic language, So let's strip some of that down and talk about valuations. When it comes to momentum in names like this, how relevant are valuation metrics given the story that you're describing in this big future that you're expecting.
I think when you become laser focused on valuation over the next year, you would have missed basically every transformational tech stock the last fifteen years. So in my opinion, to look at that, it's looking at the leaves instead
of forest through the trees. But I look at it like you could look at an incremental five to ten dollars per share of earnings power when you start to rejector it out, you know, as Tom and I have talked you on Apple, I mean I view Apple right now in some of the parts, I could argue that AI adds another They're thirty to forty dollars per share to the Apple Story app.
We're doing with AI? What's that about?
Well, I think we're going to see the developer conference because ultimately they're going to really right now the billions even spend on an AI, it's going to be another use case that you're going to be able to deploy within their install base within those two billion iPhones.
But when we be talking about sirion steroids, what are you describing here?
So from an AI perspective, they're really going to be from a user perspective, be giving users the ability to on the services side, from a cloud, from music, from TV to more and more of the devices cross pounding between different devices that you're going to be able to get different information within the actual Apple user. And I think what Cook's going to talk about is AI could be really another foundation, another monization of the Cupertino growth story.
You're the Ober Bowl, you got a lot of people taking shots at you, and any research report halfway through there's three paragraph some total risks. What's the lead total risk paragraph?
To AI?
Biggest risk is basically what I view is the US China decoupling, because you could argue that that's a risk from an AI perspective, and today Taiwan to risk.
Because this stuff is actually made off TSM.
I mean, look, I was just in Taiwan a week and a half ago. I think right now it's Barkworths and Bye. In my opinion, in terms of as an overall risk, biggest risk is just companies don't spend. They had to heighten the economy ultimately, but as of right now, what we're seeing is, you know, I think this is right now a green light to own tech, you know, in terms of what we view and I think this is just I think the start. I think texts being up another ten to fifteen.
Applebite margin thirty two cents on the dollar. What does AI do to that? Out five years.
That basically increased it by about five hundred BIPs.
So what is that some of the parts did you say? Up some of them?
Some of the part you can say, Apple, it could add thirty to four dollars per share as it all gets monetized into the base.
It's amazing, isn't it. I've heard it easy to sit here and just be smug.
You know.
I reflected on this a couple of times in the last few years, and once more recently. There's this great exchange Dan, and I'm sure you've seen it between an analyst on Wall Street, bullish on the Internet, and a journalist from sixty minutes. And the journalist from sixty minutes is sitting with this analyst on Wall Street and saying Amazon's worth more than Sears. Does that make sense?
You know?
He's so he's so convinced he's right about Amazon just being this bubble and Seas being you know what Sears was. And I'm just trying as hard as I can to be open minded about this moment. At the moment, Dan, any reflections on this period and that one.
I mean, this period reminds me of what I've viewed coming out of the Apple launch with jobs in seven and it reminds me of my visits with e commerce companies in late nineties. In terms of so I would say, there's only two other times that I would compaired to this, and I believe that's why Nadella, that's why Cook, that's why Jentsen are going after as your by recommendations.
Built half the houses in the Hamptons, I mean anything over five thousand square feet.
They got a breastplack on it.
Thank you, Dan, Because well, would you like to weigh in on the lobster roll debate in the Hampton's here? I mean you've got a little bit of experience at that.
I do look super bullish in the lops of roll in Hampton's, but I continue believe the best loops of roles are a six one seven.
Area could so help in Boston. You like it with the hot butter the cold.
I did look and even though I'm a Long Island guy, I'm more of a six one seven when it comes to ops rolls.
Johonna's no idea we're talking. I mean, I mean you don't have to go to.
Maine to get the proper lobster in Boston. I'm very well traveled. Thank you, but I will set.
Farawoo Durgen Parks years ago. Could you imagine what the waitress would do to John Fairwood your accent?
Who are you.
But the guy? The guy's a legend.
It doesn't matter where where you tell him. You clear that up.
I just got this message from Mandolai on Twitter, and thank you for writing game, because a lot if you've given us recommend are we recommendation? Loves the landing in Clinton, Connecticut. Oh yes, looks like this little shack by the water.
It looks fantastic.
Jonathan emails in surf Avenue, Coney Island. I'm actually down there a couple of times a year, after thought forces me to go down.
Nathan's there. It is one, one, two too.
And there's some under there's some under the radar lops or rule places and Hampton Bees and not in the core Hampton's, you know, some places a little.
Off the grid out there.
A research report on I could and maybe thing and and maybe a Chad gpt angle as well.
Very cold, this might that happen.
Of wet bush.
We're gonna get through this very quickly because every moment's important. In Monaco and John Ferrell's far more abrupt than I am can say is in every sport there's someone that transcends the day to day grind of the sport.
You have your heroes.
Maybe it's Michael Jordan and basketball. Maybe it's a guy named Judge for the New York Yankees. Daniel Ricardo is so large for Red Bull and for F one racing. Anne Hathaway keeled over at the met Gala when she met him the other day.
I bet she did.
She Ann Hathaway.
Fell Ivan Goods fell apart.
Hardaway was the fanboy hit, not Daniel.
You know what the problem is.
He's wearing Tom Brown at the met Gala, Thank you Vogue for the images, and.
He puts on a fake bow tie. Can you talk to him, John, when you're in Monico this weekend.
We need Ricardo in a real bow tie, not a pretend bow tie.
Tie by you.
We can sew a twhim right now, Daniel on place to site, joined us guy and get into the Rice weekend in Moniccau. Daniel, wonder for to catch up with you, mate, Just talk to us about how special race weekend is in Monakau.
I thought we were just going to talk about both eyes. I I, well, let's talk about Monaco. It's put it this way. I've been coming here now for thirteen fourteen years and it doesn't get old like that. That feeling.
I don't know. Monica is just it's so special.
It transforms into this, honestly, like this magical place for the race that rhymes.
And you have to.
I feel like everyone has to experience Monica Grand Prix at least once in their life.
It's pretty surreal, Daniel, just to build on that.
One thing for us, as we've discussed Formula one, it's explosion in the United States with with your boss, mister Horner others as well, is whether we resolute in the heritage of the sport as we expand in places like Vegas, Miami and elsewhere.
How do you feel about that?
I think there's look, they're always I think needs to remain a place for the as you say, like the historic venues, you know, yeah, your Monico's, You're I guess if it's Spa in Belgium or Silverstone Monza. So these places for me should always have a presence on the calendar. But I also love going to new places and I think, you know, how we're able to open ourselves up to new markets now and see the growth in the States.
For me, I love because I really enjoy spending time in the States, so having.
Like three races there is pretty unreal.
So I'm I'm somewhere in the middle where I'm definitely open to having new venues, but I think you still have to keep those core few.
They shall always remain if we can.
I'd love to talk about your future as well. You're a super charismatic guy. Your personality, as I'm sure you're aware, has transcended the sport with what's happened on Netflix and beyond. But Daniel, I know deep down and you're a racing driver, and I want to understand from your perspective how frustrating it's been just been on the outside, on the fringes
of the sport being the reserve driver. What it's like being in the simulator is if it's anywhere near to what it's like actually sitting in the car.
I think this year certainly serves a purpose for me. I did need to kind of, I guess, remove myself a little bit from well, yeah, literally, I guess from the driver's seat, just to in a way like, in simple terms, probably just fall back in love with it again and to really like miss the sport. I'd come off like a more difficult kind of twelve twenty four months like competitive wise, and I was starting just to just have too many bad days where I needed a bit of a reset and a refresh.
So I'm getting that this year. Sure it is frustrating.
To be on the sidelines and to watch, but that's also building, like this fire and that desire back.
So the plan is to find myself a seat next year.
And but I don't I don't want to just be there, you know, I don't want to just get a seat, you know, to say I'm an F one driver, I want to find my way back to a podium.
And Daniel, you're in the in between age.
I mean, I don't know much about F one driving, but I've got a lionso making a splash this year at forty something years old.
You got a lot of young turks following behind you.
Tell us the experience value, whether it's Miami or Monaco, what do you what do you sell to a new team or even the Red Bull when you're you've got a lot more experience, How does that matter in a given race, including this weekend.
Yeah, I think the little experience is I think in this sport as well a lot of sports.
But it's it's very valuable because you know, it comes in terms of on driving, on on track situations. Of course, the more you can read a situation then that can obviously help. But also then building a car or helping the guys that build the current design the car, helping them with feedback and understanding. This helps the team ultimately progress and move forward. So that's the value I guess in experience. You know, I'm thirty three at the moment.
As you mentioned Alonso, he's in his forties now and he's having one of the best years.
Of his career.
So that's encouraging for me because there is days you feel a bit old. Then seeing someone like him, you're like, oh, I feel young again.
So yeah, look at the end of the.
Day, it's how bad you want it, and look, I'm still in shape, and if I want it, then I believe I'll get back to it.
I'm the ugly American learning about Formula one, and John Farroh has been great about explain to me the red Bull distinction. I was comparing them to the West Coast Eagles of Australian Football, who are in last place right now.
You've been red Ball.
Since you are like fifteen years old. Sixteen? What's the Red Bull Pixie Dust?
Well, I don't know if that was a jab at me, because I love the Eagles and yes they're having an absolutely terrible season, but yeah, Red Bulls certainly, Yeah, they're the opposite right now and they've they've been look for.
Me growing up.
They were the program, you know, that was the that was the franchise if you will, that everyone wanted to be a part of and signed for. You know, they had all the resources to progress you up the ladder if.
You were having the results.
So that for me is like the family that gave me the opportunity and now being back in the family, it's like it feels like like it's the biggest family I've ever had in racing and the place where I feel like I belong.
So right now, like that's my that's my dream.
Is to be back here with this team racing and hopefully winning another Monaco one day.
You think it's potential to get a again at Red Bull Racing, Daniel or you're looking out swear, I.
Think, log I in this sport, I know things can change so quickly, and even in at the end of twenty eighteen.
You know, when when I moved.
On to Reno, people probably never ever thought they'd see me wearing a red bull polo shirt again. So things, things certainly change and can happen, so never say never. I'm also just like, look, if I focus on myself and apply myself and keep training, keep working hard, then anything could happen.
So yeah, and it helps when you got you know, good looks in this sport.
So of course, like Charles Leclair, I was just wondering, I never speak a bit of Italian. You've you've got that Italian blood running through your veins. Can you imagine being in the red outfit over a Ferrari I look.
I again, never say never.
I feel like it probably would have happened by now if it would have, so, yeah, that one's probably more slim.
But honestly, this is a love to be here. That's that's that's right.
App That's a nice place to leave it. Daniel, this was a pleasure, a privilege. If you make it to New York drop By, we'd love to catch up with you, Daniel Ricardo, that you bring out halfway think of course, bring out to and TK is going to teach you how to do it the Boats.
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