Interview With Gianni Kovacevic: Masters in Business (Audio)

venture investor specializing in energy and alternative technologies. UH. He also just took a Tesla and drove from Toronto to Boston to Florida, all around the United States, ended up in California and went to the Tesla plant. That's where his trip UH finished up, and we chatted about everything from the new technologies, what's taking place in China, alternative energies, the rise and continue demand for copper, and why oil

is probably not your best long term investment. If you are at all interested in automobiles, electricity, venture investing, or alternative energy, I think you'll find this to be a fascinating conversation. Without any further ado my chat with Giannikovich Evic. This is Masters in Business with Barry Ridholts on Bloomberg Radio. My guest today is Gianni covic Efic. He is the author of the book My Electrician Drives a Porsche, investing

in the rise of the new spending class. He is also a venture investor as well as resident of Vancouver, Canada. Speaks multiple languages, English, German, Italian, Croatian. Just for you're only stopping it for um Gianni. Welcome to Bloomberg. It's so nice to be in New York Berry. So so let's jump right into who you are and what you do when when people ask you, what do you do? How do you answer that question? I am a curious investor.

I follow trends. I try to be um. You know, I can turn myself to be a value investor, so I'm not really a trader. I want to look at deep value and effectively. I don't want to invest in the story on page one is my friend Don Cox would say that's the efficient market. I want to invest in the story on page sixteen that's headed to page one. So I'm trying to make a career out of investing on page sixteen stories. So, so what's your background? How

did you get into this line of business? I'm from Vancouver, Canada, and what software is to Seattle is what let's say, energy commodities, natural resources are to Vancouver, Canada. So a lot of my friends we grow up and they become stockbrokers, other ones become geologists, engineers, and just you end up,

you know, entering the workforce and there it is. It's so important to basically Canada, in that part of our country, particularly that you're just indoctorate into it, no different than someone from as I say, Seattle or San Francisco would get involved in software computers. And for those people who have never been in Vancouver, one of my favorite cities in North America and absolutely beautiful. Um So let's talk a little bit about the entrepreneurial spirit, which very much

colors your book you're writing, what you focus on. How do you become an entrepreneur in a place like Vancouver. I know a lot of people up there who ultimately ended up moving to Seattle, New York, San Francisco, even Los Angeles. What what's life like in Vancouver for a entrepreneur who might be more interested in things like software and technology than as as one friend calls its sticks

and stones, timber and minerals. Well, that's where my heart beats is supporting these things that I would say that you don't want to give society what they think they need or what they think they want. You want to give them what they do not have and what they what they don't already know that they want. We've seen examples from them, from Henry Ford in the car from

the iPhone and Steve Jobs. The old joke is don't skate to where the puck is, skates where it's going to be absolutely and so when you're looking at that as an investor, I'm looking for people that are listening to the music, They're not getting confused by the noise. Classic page sixteen story or stories as investors. So entrepreneurial ship is you know people in groups that want to,

you know, buy into that. You can see it, like Warren Bufett would say, when something is so obvious you don't even need a pencil and paper to figure it out. It's like, you know, we've all heard of those ideas that even that that Internet protocol or that app or that gizmo in the past years and just say, wow, that'll succeed. It's just so intuitive. And I think when you're creating these visions as an entrepreneur, you're also managing you know, it's a lot of psychology, a lot of

a lot of sort of relationship building. The bigger and organization gets you end up managing all these personalities. So you want to find those mavericks that a create the product that people want to need in the future and they have the ability to stick handle that business as it grows, you know, So how do you how do you find that? While it takes a long time, I think you need you know, years and years and years

of experience. You lose money, you win with this guy, you win with that guy, and and you know, after maybe fifteen or twenty years of experience, hopefully you can narrow that down a little bit to have more winners and losers. Don't don't we run the risk? Let me push back a little bit on you. Don't. Don't we

run the risk of a little hindsight bias. Um. I can't begin to tell you how many things that are wildly successful today and everybody thinks, oh, sure, of course that was a winner when they were first rolled out. People look various scans at it. My favorite story is Fred Smith, the guy who founded FedEx. It was a graduate school paper and I think you got a d and the professor said, why would anybody pay a premium

for overnight delivery when you have the post office? So so, how much of of us looking at these things is obvious? Is a little bit of hindsight bias as opposed to, or ask differently, how can we really identify these things in advance when no one really has a clue what's gonna catch on or what's not? The answer is the short answers. As you know, it's difficult. If it was easy, you know, we'd all be billionaires, you know, And if it was easy, they would call it snowboarding. You know.

It's something you learn in a few days. It's not. I don't think when a trend gets underway, let's liken it to a parade. It's very hard to create a parade. But when you see it and when it's obvious, you know you can it's going on. It's you want to jump into that parade. You don't need to be the lead float. You need just need to be in it.

You know, you need to understand. And because you have experience, meaning you've kicked the tires, you don't go one day to the next and say, oh, you know, um, Uber is going to be something that's going to be important to the world. I think if you're you have to sort of understand how mobile technology evolved, and you don't come in one day to the next. It happened, you know, with the iPhone in two thousand seven, apps started to be developed. So already, hey, you use the first time,

you said, Holy smokes, this this works. I get it.

Uber has of course been a private company, so most people out there can't investor don't have the ability to invest in those things, you know, when you can go on and on and on, and I think we we talk a little bit about, you know, trend building and the way people can get themselves versed on this stuff is subscribe to bloggers, newsletter writers, go to really high quality conferences, get the collective opinion of many people and their ideas, and you yourself will come up with your

own sort of trends that you can follow. I'm Barry Ridhults. You're listening to Masters in Business on Bloomberg Radio. My guest today is Gianni covic Efic. He is the author of My Electrician Drives a Porsche, which is a look at investing in the rise of the new spending class. And let's talk a little bit about driving in cars. And and you just completed a very interesting trip. You went across country in a Tesla. How did that come about. Yeah, the my book has nothing to do with fast cars.

It has everything to do with, as we say in the subtitle, investing in the rise of the new spending class. And it's this story about a young electrician and his family doctor. So it's all about the electricity. It's all about the electricity. And so so let's let's we're gonna talk about this in a few moments. Let's talk about the cross country trip and how that worked powered by electricity. First, what made you think of doing that? We wanted to

do a special book tour. I wanted to have something that's not your you know, you go to ten or twelve cities. So I figured, m I can showcase to the world. In my opinion, the future is now with respect to electric cars. So you have to exaggerate these things. You know, you've got to go from, you know, around the entire nation. I was also able to visit more cities, I was able to talk to more people, and I

was able to engage with them. Be it be a government, be at investors, be at regular society, and show them physically that the future is now. We can do this. Now, you can drive an electric car day to day across the country whatever you wish. So where did you begin? Let's let's trace your path. And you were tweeting this out as you were traveling. What what did you Where did you launch from? We started in Toronto, Canada, at

a major conference. It was one of the focused points there where people would come and I had all the sort of decoration on the car and I told them what I'm going to be doing. And I drove to Boston with a very skeptical German journalist, I will add, someone who did not believe this would be so comfortable. And I went from Boston all the way down to Pennsylol, Florida, Toronto to Boston. How long did that leg take? It's six hundred miles, just under six or miles. It took

me ten hours drive drive a couple of hours. How how let's say you drive two miles about the range of a Tesla to fifty Yeah, it's really getting between the superchargers if you're doing cross country travel, so and they're about between a hundred and fifty twitter and fifty miles apart all the superchargers connecting all the major cities today today today, already there. So you were able to go from Toronto to Boston. So you drove two miles to the first Buffalo. How long did it take charge

it up to go to the next charger. The computer tells you how much time you need to get to the next supercharger with a cushion meaning you have extreme air conditioning on or extreme heating on or whatever. New traffic, it's about thirty minutes between you have lunch time, at the time of breakfast, the time of coffee. Some cities it's only fifteen minutes because sometimes they're they're sandwich maybe hundred hundred Toronto, Buffalo and from Buffalo, that's a whole

to Boston from Buffalo, isn't it? You go and do we? Yeah, you do? You do Albany and just at the Rochester and uh into So so it's a day from Toronto to Boston. Well, let's reverse engineer. Because of the German journalist he I said, we're gonna stop when you're when you need to use the restroom, when you're hungry, and by the time we got to Boston, we were not fifteen minutes inconvenience because you have to stop. You have to stop, and you got to stop into a restroom.

So now this is curated. The computer tells us where we're gonna stop, and you have a p of chang there you have. You know exactly what you're gonna do. There's no curious where you get off the freeway. Oh, or eating at you know this fast food joiner, that fast food joint. You kind of know exactly what you're

up against when you get there. He was shocked from a German perspective, which there may be a little bit more skeptical, although they're huge consumers of of alternates, like wind is all you fly into Germany, half the country looks like it's covered in wind farms. All right, So Boston, I actually met you when you went from Boston to New York and then from New York down to Florida. Now normally that's a good day and a half drive. How long does it take you to get from New

York to Florida. Well, we took the slow route. I stopped in all the cities. I was doing book events about two days per city, so I would come in, I would the car would be charged before I came into the city. I have enough range forty miles to do all my nonsense around the city. Of course, when

I'm sleeping, the car's charging. More and more hotels and businesses are now catering to people to have these with the destination chargers, not the super fast ones, but the ones that charge it around over forty You get each hour in your park, you get about exactly and you move on. And this is I liken this to the charging network system. We can get into some other things

that are happening in the with the incumbents. But it's really like the Model T was perfected on the assembly line and started rolling out in October of nine eight, So it's really like before there was a network of guests exactly. So we're and we can do things a lot faster today, and there's an army of people that will and are doing this. It's not one company, it's not just Tesla anymore. By the way, did Tesla have anything to do with your trip or were they just

a lucky beneficiary of your idea? Yeah, I know the We did not ask for permission with Tesla. I bought the car. I sent Ellen my book, which the title may shock people, but of course the character the doctor in the book buys a Tesla and adopts the Tesla way of life and what they're now doing with merging or attempting to merge solar city in Tesla, calling it the Tesla lifestyle. A year and a half ago, I was already saying that my book, that this is the future.

People want the package. They want that package where they want to be completely independent from grid, from fossil fuels, call it what you will in their homes for all their transportation energy. And I'm gonna push back on that independence claim and that green claim and a little bit sure. But you ended up at the Tesla factory, right, is that way you finished? Yeah? I ended up on me fourth and one of the I believe founders and directors of Tesla, Ira, Aaron Price, was having his Global Energy

conference that day. Was that part of the plan or just a lucky claim? It was kind of a lucky coincidence. So I got my factory tour in the day of the conference, you know, parked my car right there. And it was really a day of modern energy where a lot of these people, a lot of these thoughtly ters were together, and I got my tour of the of the Tesla factory on that day, and it was it was, It was incredible. It's a there's a tectonic shift going on.

And until you've you know, really understood this from all angles, how we create service by sell you know cars in general, make the parts feed into it. Yeah, the world is going through a tectonic shift, in my opinion. How many cities did you work your way through? All told, it was twenty five official cities, but I stopped in probably a hundred when you when you count in the lesser towns, and I stopped in a lot of universities, wanted to talk to students and just just park the car. And

it's a talking point. What was the network of of charging stations? Like? Did you ever find yourself? How does the car find it? Do you ever find yourself? Do you where am I going to find one of these things? What's that network? Like? Yeah, it's it's comprehensive already, which is actually quite shocking the fact that they only started a few years ago. You tell the computer what two cities you want to connect, and it says exactly where you need to charge and how long. So it's kind

of a coup what Tesla has done already. And so that's the city interconnection, the superchargers. His secret sounds like it's the software as well as the network for sure, the GPS. And then you have the destination chargers, which are going to be installed by the millions by people

that own businesses. So they're gonna pay Elon Musk cash money for this destination charger, which an electrician can install in three or four or five hours, which means you can connect any lifestyle point lifestyle point A to lifestyle point B in any city, which means they've solved the puzzle. I'm Barry Ridlts. You're listening to Masters in Business on Bloomberg Radio. My guest this week is Gianni Kovia Sevic. He is a investor, entrepreneur, environmentalist, and author of the

book My Electrician Drives a Porsche. Uh. Let's talk a little bit about realistic environmentalism. What does it mean to be a realistic environmentalist. A listic environmentalist is someone who is pragmatic I would call I would call them an algebra ist. Algebra is so if we're looking at the challenges that are surrounding energy around the world, where if people want to make changes with the way we create, transfer, and utilize energy, that's fine. You want to make policy,

that's also fine. You want to create that investment vehicles, that's great, But you have to look at the other side of the equation, because when you take fossil fuels out of that equation, there has to be something on the other side. You can't just wave your hand around and say, let's not use oil anymore. Let's no, no more coal. So if you understand that a realistic environmentalist is someone who looks at all the variables and he's in the middle. He's neutral, he's a solutionist, or she

is a solutionist. So I want to understand support invest in all the elements that factually make that possible. We can call a reduction and CEO two emissions, green gas emissions, whatever it is, and that is a very large arena on on the products, materials, building blocks that factually make a reduction in CEO two emissions possible. So so let's talk a little bit about vehicles like the Tesla um As. As a person who enjoys cars, likes horsepower, is not

afraid of internal combustion engines. I always have two issues with with in general, the prius Is and Teslas of the world. And by the way, I love the Tesla. I think it's a beautiful car, really well made, tremendous design. But here are the two issues I have. First, depending on the part of the country you're in, you're charging off the electric grid, and very often that is coal fired electricity, which means you're not spewing junk out of your tailpipe, but you are spewing junk out of the

source of the electricity. So why not have you respond to that before I go onto the second one. Yeah, that's an important question, and I liken that too. We don't live in static Ville. Society lives in a place called progress Ville. In two thousand seven, two around of America's primary electricity was generated by coal. Just in the past year, natural gas has surpassed coal as the primary fuel source. So coal is now around thirty and falling

by it will be twenty of America's primary electricity. So already it is the minority fuel source natural gas and the others nuclear renewables. What have you are around se America's fuel source and falling. So eventually this will continue to fall. And remember, we're not going to go away from coal because of policy, assets that are deemed on economic or assets that are stranded. We have so much natural gas, massive supply, lots of structure cleaner. And here's

the thing that everybody forgets. You run a pipeline to an electrical generation plans and that's it. You're done. There's no trucking, ship ing, there's no think about what it takes to move all that coal by rail by whatever means that's got to be really expensive. That gas is clearly going to be the winner in the electrical generation

UM universe, at least for the foreseeable future. And we see that the data recently showed that more people work in solar today than working coal in the United States. That's an amazing stat The second UM criticism I've heard, and I don't know how accurate this is, UH, is that when you look at things like the lithium batteries and all the rare earth metals and unique elements that go into making a car like a Prius or a Tesla. Uh, there's a lot of really if you go all the

way upstream in the manufacturing process. There's a lot of really bad manufacturing steps that take place to you know, strip mind and get access this This is from not necessarily very accessible parts of the world. How do how do we respond to to that criticism that hey, this

creates as much heavy metal pollution as it saves in carbon. Well, the real math and if you look at the UM the Society of Concerned Scientists, they basically say that the breakthrough or the break even is about nineteen thousand miles, So it is true to create a full electric car, there is some there's a little bit extra CEO two

emissions to create the car. According to their math, at the nineteen thousand mile point, it's it's break even, but eighteen months into it more or less something like that. But it's it goes deeper than this because nothing comes for Freeberry, nothing comes for free. People have to make a choice. And that's what it might have of being a realistic environmentalists. Just tell me what you like. You know, what's the policy, what what's the will of the people? Where,

where's what's government want? Where where are the investors? Where's the propensity to make this stuff possible? Because nothing comes for free. If you want coal fired electricity, if you want to use gasoline, if you want to keep searching for fossil fuels, move it, refine it, move it again, transport it, sell it, repeat every week. Okay, but that's I don't believe that's where progress spell is. We are going to go on the long course of time because

it's it's the future. It's just the smart way to do it. And we should stop focusing on the cars that you drive thirty minutes a day. The cars we need to electrify are the taxis, the FedEx vehicles, the urban buses. We can make them electric and we know that because the world's largest automobile market has accelerated those programs to electrify urban transport. Those are the cars that China. We're talking China. I'm Barry Ridholtz. You're listening to Masters

in Business on Bloomberg Radio. My guest today is giannikov Sevic. He's the author of My Electrician Drives a Porsche Investing in the Rise of the New spending class. I was surprised that the book was really more of a parable then your standard nonfiction book. So let's let's start out with the basic premise of that that parable um uh, tell me about Doc Anderson and and who he represents. By the way, which character in the book are you?

I would be the electrician that was my guest. So a young electrician goes to his doctor and tell tell the story. It takes place in Seattle. So this world capital of sort of technology, and computers are one of them. And the there's a fifty eight year old doctor, a baby boomer, so I wanted to have that that demographic represented, and a millennial gen x if you will, electrician And he's helping his doctor renovator on a Saturday, and he just asks the doctor, how do you baby boomers think?

How do you invest? What are you following? He leaves, The doctor goes outside and his neighbor says, who's that my electrician. The neighbor says, your electrician drives a Porsche. The doctor goes out of his mind. How is this possible? How is this possible? How can this young working class fellow, you know, spend so much money on a lavish gift like that? Comes back next Saturday he says, well, I

stop working as electrician about ten years ago. But because of all the building blocks I learned and the trends I followed. I am now an investor full time. I take it seriously and he he reads these things like a financial soap opera daily weekly, He goes to conferences, he meets with people. He wants to be a contrarian investor, so he is searching for page sixteen stories which will

become page one. And of course with the subtitle investing in the Rise of the New spending Class, they go and explore this army of new consumers, people that are not rich, they're no longer emerging, they're not poor, and all the implications of how they're changing the world and the opportunity that they represent. So one of the things you discuss is investing in human aspiration. Explain that what that is first, and then how can we invest in

human aspiration? We often forget, you know, what it's like to have, you know, salary escalation. I I come from Vancouver, Canada, and I think it's pretty much the same around North America. You have not had more spending power and probably thirty years. You know, yeah, your salary might have went up a little bit, but you factor in ocalation. You know, you're not making a lot of money. When my parents came from Croatian nineteen seventy three. You know that was a

very special time. You had rampant salary escalation. I remember seeing these pace slips of my dad nineteen eighty eighty one. He was working in north of Canada. He was making a thousand dollars a week. Back then, Mary, you could buy two Catollact cars every year. You could buy a house for cash money. You cannot do that anymore. People in emerging markets have had rampant salary escalation. Okay again, I'm not I can I can concede they're not wealthy.

But someone in China thirty years ago, twenty five years ago might have made two or three thousand U S dollars a year. Well, the averages now in the eastern provinces I speak of Shanghai, Tianjin, Beijing, they're making eighteen twenty thousand dollars a year on average today. That's a huge uptick from where they were. Absolutely, so what does that mean. That means they watch television every day, they have air conditioning, they drive a car, They have almost

the same economic footprint you and I have. They have a deluxe diet and so that's coming with ramifications. Now with within that is tremendous opportunity and it always comes back to probably one primary thing energy, the insatiable appetite for that energy. So we need to understand as investors, particularly because of this, you know, propensity to have climate change, how we create, transfer and utilize what I call energy. So let me digress a little bit. Solar has is

theoretically a source of infinite energy. How comes solar as a technology has never had that breakthrough that allowed it to be ubiquitous, practically free, or certainly really cheap. That that that's something that I've always found perplexing. Yeah, because it's technology, and it doubles microtrip for example double devery eighteen months. For decades, the learning curve on solar has had seven doublings in fifteen years. We are now at

a point where it is commercially viable. Solar works at night. We capture thermal heat through with fluid. That means when the sun goes down, it works at night. We are now able and you're gonna see this. This is gonna bag going through a tectonic shift, by the way and energy, and you'll take a while to articulate that. We don't have the time right now. But you the way we desolinate water typically in the Middle East and the places around the equator, and they used they used fossil fuels

to do that. It takes a lot of pressure or a lot of heat. Well, guess what my friends in Germany are working on processes now where you do it with solar power. It has arrived. It is commercially viable. It is now a line item including wind. Wind has had in the past fifteen years, four doublings. So we when you when you look at this and you see how the changes, I mean, where's the big investment happened

in the past twenty four months. Not in fossil fuel electricity generation, it's all been on the lion's share is now going into into these renewables across the board. And because there's this army of people working on this, the prize is so big. Then we get into the energy storage and on and on. It's it's we're going through probably a once in a multi generational tectonic shift on how we create energy, which is going to impact that

we transfer energy, cause there's only three ways to do that. Pipelines, railroads and ships and electricity, cables or micro grid. Well, the future of energy transfer is going to be with electricity, not with the not with the incumbents, and then the way we utilize it. We're not going to be using fossil fuels to utilize energy. When you look at that, I always tell people oil is energy. Energy without fossil fuels is electricity, and electricity demands what we want to

invest in those things. We want to invest in engineering. We want to invest in in the in the in the technique, the techniques, the design, the building blocks, and across the board. So so let's talk about something that a theme that comes up over and over again in the book China Copper. People, you're you're alluding to copper. Tell us about copper and why is it the green metal. There are four major energy commodities. You've got coal, natural gas,

and oil. The fourth one is copper. It's always been relevant in the future. And I'm going to suggest something very strong. I don't believe in my opinion, that we are ever going to have another twenty five or increase in demand for oil. We are now at a point we have to start talking about terminal decline. Coal is already finished that in core is already on. It's a twilight industry. Innovation adoption technology are not the friends of the oil industry. You innovate, use less oil, you adopt

use no oil technology. The way we extract oil is a game changer. When you look at the fourth commodity, the energy commodity copper, there is conclusively going to be thirty new customer base when you create and utilize greener and cleaner energy Barry. It takes five more cop in the case of offshore wind, a thousand percent more copper, and there's been no fracking moment for the copper industry. The way we extract copper. No one's building copper minds.

So we have to choose putting on our algebra hat again, if we're gonna take away fossil fuels, we have to recognize and appreciate the science in this equation. It takes copper to make green energy possible, not by four hundred power of magnitude. So I think that when you look at the winners and losers, people want to follow and understand the copper industry, not for the next three months or six months. Because traditionally copper has been tethered to

the price of oil. But we go forward the next to five, seven, ten years, things are going to change tectonic shift. So let's talk a little bit about copper usages and how the technology surrounding its extraction might change. Obviously, anything electric is using copper wiring. I don't even think we're allowed to use aluminum wiring in homes anymore. That used to be an alternati, a cheaper alternative. Um, what is the main application of copper in the the energy grid?

It's a good question, and were always got to be careful. I mean I I read this stuff like Harlequin Romance Berry, so you know other people don't. So let me try to make this more interesting for people that know nothing about this stuff. They experts will tell you that if we adopt high efficiency energy systems, we can reduce CEO two emissions by one point to five giga tons. So if I translate that, that's like taking five million cars

off the road. So what is a high efficiency energy system? Well, you make motors more efficient. Of America's electricity is consumed by motors from the smallest to the biggest, meaning anything from a vacuum cleaner, air conditioning across the elevators across the board. You know, motors use the bulk of the electricity, so you make them more modern, more efficient by using a copper rotor transformers. You don't use aluminum windings, you

use copper windings. There is across society where if we increase we increase the amplitude of copper, you reduce electricity consumption, which means you need to generate less electricity. It's true that aluminium as a substitute in many cases, and it will continue to be part of the solution. You know, copper will not be the be all end all, but

we will for efficiency use more copper. We talk about a wind park because now if you're going to build a two hundred megawatt power plant, which is a small coal fired plant, or you say, you know what, let's do a two hundred megawatt wind farm. My friend Rossbaty just installed a two hundred megawatt project in Shannon, Texas. You need sixty five you know, three and a half megawatt wind turbines each head. It's a generator, is what

it is. Has almost two thousand pounds of copper. The step up transformer you need to collect all that power to one central location and then send it off, send it off to the grid. You also have to arrest the lightning. You know, it's very deluxe, very expensive, you know, from a copper perspective, electricity to build. But once it's done,

you've got energy now for ten twenty thirty years. Now we will address other things like curtailment, which means getting the power out to people that are using it and what have you. But this is early early days and it's only going to get more and more as as a percentage of power generation. So, Gianni, if people want to find your writings, where's the best place for them to to look to learn more about this? Well, my book is it's all at all the US airports and

people can find find it on Amazon pretty easily. And I Twitter once in a while, I think I go through periods of being more or less busy. But my Twitter handle is at realistic in viral, and then people can also source that to my personal website, which is Realistic Environmentalist dot com. If you enjoy these conversations, be sure and check out our podcast extras where we continue the conversation. Check out my daily column on Bloomberg dot com or follow me on Twitter at Rid Halts. I'm

Barry Rit Halts. You've been listening to Masters in Business on Bloomberg Radio, brought to you by b A SF we create Chemistry. Welcome back to the podcast portion of our show. Gihnni. Thank you so much for doing this. There's so much stuff I missed that we really have to go back to some of our early questions and uh and and plow through it before I get to my favorite questions. Um and and we'll also talk cars a little bit. Um. It's funny. Your electrician drives a Porsche.

My butcher drives a Porsche. I was picking up some stuff for a barbecue, and I wasn't thinking. I put the keys down on the and I have far too many keys and far too many cars. And he sees the little he sees the little automobile shaped key, and he goes, oh, well, I have the same car. Oh really, what do you? What do you have? I have a Panamera. I'm like, oh, that's that's interesting. I drove one up at Monisanlo Race. Wayne. I love the car. He says,

he just couldn't stop braving it. So, your electrician drives a Porsche. My Butcher drives a Porsche, which I think is is pretty pretty hilarious. Um, let's talk a little bit about Tesla. Um, you've had the car for how long? I bought the car in December, and and what what's your take on it? What? What do you love? What do you what do you think they need to do better. I've owned a lot of cars in my in my time,

and I've had multiple Porschas. I had a Ferrari three sixty, a BMW M three, and I recently just sold my eight l and it is the best car I've ever owned. An that's what consumer reports said, although I will tell you that M three is really a fun car. Different horses for different courses, you know. So it depends on what you're doing, you know. But if you were to have and I asked this question, So I'm I'm off to Europe tomorrow and I'm going to be with my

friend who lives in Monaco. He has fifteen cars, doesn't own a Tesla. But then you have a tough question. I said, yeah, but hold on a second. If you could only have one car, it had to take your kids to school, had to be fast, had to be comfortable. I had to that look good. It's a pretty good single car to have. I mean, it covers all the bases. You're not gonna go hunting to Wyoming with it, but

other than that, it pretty much covers everything. I thought when they released the ninety s D with Insanity Mode, I thought that was a game changer because it essentially said, look, nobody's going to be drag racing against Ferraris and Lamborghinis. Although go to YouTube and if you could find Tesla's beating them, um, but it basically said to me, the technology now exists that whatever automobile application you want to try and and use this technology towards, there's nothing this

doesn't do. This can be to Ferrari and speed, it's comparable to an suv and in terms of comfort and space and it that really shifted my perspective about electric cars because it was no longer sort of a hobbyist gadget. It's oh no, this is technology and we could tune

it to all different applications. I know they originally started with their sort of Lotus adapted version, but that Insanity mode made me think, well, why not skin of Tesla with a really sexy looking body and compete with the Ferraris, Lamborghinis and and even the four Gts of the world. I think there's an audience for that, is that in the future of Tesla in any way, shape or form. They've got an offering right now which is coming out with we all know what they have already. They go.

So they have the ninety, which is the sedan, the AX which is the suv, which is really by the way, the X is really interesting looking. There's someone in my neighborhood has it. It's this sort of woody allen sleeper, bulbous thing, but it's interesting looking. It's not like what the hell is at it's oh, that's kind of interesting. And of course the doors, which their core. What what do they rename the doors? It's not the gull wing doors,

it's the or something like that. They're really an interesting little gimmick, but it's an enormous expanse of space inside. Yeah, I'm, I'm what they've done to rattle this industry. Let's pretend were the incumbent automotive manufacturers for a moment, and if you go back a few years, they do, you know, say, well, no one's gonna want to buy these things. And then there's no very dismissive, there's no there's no infrastructure. You know,

it'll take forever to do the infrastructure. This what was a little company was able to build an infrastructure network in less than three years. That's I mean, shame on you. I say to all the incumbents, how could you be so lazy? And now it's going to affect their businesses now they all have been rolling out their own internal electrical division v e v vly but carefully, because their problem is their beholden to what is a franchise network.

It's very different space to cannibalize your own business. It's the baby that's going to chew. They need to start like other technology companies have done. They don't want to become Blockbuster Video or Codac Film. We know that, and we know people really has done a great job of letting each new technology. You can't really buy a new

iPod anymore because the technology of the st chips. Now, what used to be a five hundred dollar iPod with a hundred megs of or a hundred whatever it is gigs of storage, you can now buy a chip for twelve dollars and you can put all that music on a chip, and most the new cars you could just plug in that s D and you don't need that anymore. But up until that point, they were very good at cannibalizing themselves. Each new version was faster, smaller, and more

storage and cheaper. The automobile companies don't think like that, do they. There they have to put a siren on these programs, and I believe they do a siren meaning real quick. They don't have ten years. Because here's here's how I see this playing out. And I follow this for a long time, and I know some of the companies a little bit more intimately because I know some of the larger shareholders and such. And we've seen now

the front page story, of course is folkswagon. They've had the so called settlement with the e P A fourteen point seven billion dollars comes in multiple tiers, not the least of which is a two billion dollar investment in this infrastructure that can be used by other people. What what is a few billion dollars amongst friends? Fifteen billion exactly? And then these shot fines don't even shock people anymore. But but the business is going to shock people because

what I've seen happen. Remember that the incumbents have this franchise e system, the parts that feed into this car, which is of course then serviced for ten or fifteen years afterwards. The average and storm combustion engine car has eighty parts. The average electric car has twenty. So what have we seen happen? What keeps eking its ugly head up? The plug in hybrid? Berry, you get a bit of range range anxiety. People think they oh, just to comfort you.

Now you have a hundred major components in the car. So four or five, six, seven years later to I want to be servicing a plug in hybrid? No, thank you, But hold on, isn't that a transitional technology? I mean, I mean it's range anxiety, which is a fear for the consumer. But that's temporary, which doesn't exist. I drove across America. I have more experienced than probably you know, almost everyone. Weekend, day, night, village, city, the city. You

don't need it, you can get anxiety. Isn't that just a until people understand the technology, until they become familiar with it. Look, the reality is I I drive three miles to the train station in the morning, and I drive not three minutes to the train station the morning, three minutes home. On the weekend. Occasionally I go out to the Hampton's it's seventy five miles each way, a

hundred miles each way. Occasionally I'll go upstate or I can't remember the last time I got in the car, and I actually can't remember, right, I hadn't had an event up at Cornell, which I don't think is two hundred miles from here, and if and if it is, it's pretty close, so maybe I would to stop for launch and charge up for a little bit. But most people's driving the range anxiety is a artificial fear, and it just takes a little experience and a little to

get by. That couldn't agree more, which is why, in my opinion, the whole plug in hybrid thing, all this engineering towards it and all this build out is going to blow up in all their faces, is it? But I always think these companies, like GMS original Vaults with the plug in hybrid technology was a transitional technology, and now their new car, the Bolt, is really the first low cost, mass produced all electric that's gonna be out. It's actually gonna beat the Tesla Model three to market.

It's supposed to be out this summer and reasonable thirty something thousand dollars. That's also a game changer. But who's gonna be Who's who are the new people in town? The technologically advanced companies that are going to be coming out with their own electric car. It's pretty hard for you know, other companies to sort of um disrupt any more technologies. So I believe the automotive industry is getting disrupted.

They're not going to make a hybrid car. They're gonna make a believe this the most technologically advanced vehicle which will be electric. When you get into whole rides share, I think those cars have to be electric for purposes of servicing. And what do you mean like the cars that are owned by a big corporation. They might have two thousand, three thousand all over the city and you just rented per the minute, and that is going to be increasingly I think more electric as as we as

we arrive. What about the Ubers of the future, Uber the future self driving cars? I mean that that's something that we will tackle five, t fifteen years down the road. I think away a lot of counties, towns, cities, states are gonna say, you know what you did it. You still have to have a driver in the car, you know, we just for for that. Who knows, either for jobs or for safety, it's you're still gonna have to have a driver. There busses and different things, I think, or

maybe a little bit different. I take the plane to the train to go to JFK. That is a robotic tran, a eletric tram from Jamaica to JFK Airport. There's nobody driving those. They're fully automated. The track right on its own track. But there's a series of them. They go to the airport, they circle the airport, they come back. There is six stops along the way. It's fully automated. That looks like that's the future of transportation. The question

becomes how soon can Tesla produce a fairly self driving car? Well, self driving is something that I just don't right now. I'm not losing any sleep over that. It's not going to impact me as an investor. What is more important, I think for the general investor out there is to understand a lot of the incumbents are going to make a product that I liken it to forgive me Canada a BlackBerry, they redesign it but no one buys it.

No one's gonna buy this plug in hybrid because the offering they have by the more progressive companies is far more as far more cool factor, far more futuristic factor being all electric. And when you look at the if we open the book a little bit deeper, how who's because who's going to impact Barry the winners and losers in this industry? Well, who wants the most real estate with with respect to the car manufacturers? Which parts? Who

makes only mufflers? Are only radiators? On the other side, who's going to be making this stuff that's that's more technologically advanced? You know, people have to look at that. If you're an investor, would be it an a dominant foundation? Whoever? Get your analysts to really dig deep on this stuff because it's I think this is going through a a tectonic shift. And then of course we get to the

how do you electrify our fuel these things? Because that also is going to have a dramatic impact with efficiencies. So let's let's last few questions on Tesla. How do you enjoy the automatic software updates? Which and how significant are those changes to the car itself? For those that are not familiar with how Tesla services their cars. If it's not a mechanical problem. What they do. You have

full time internet in the car. While you're sleeping, you get a down node of the new software, the operating system, gizmore or whatever gadget that they've added to the car. It happens remotely. It's incredible. They'll just wake up in the morning and you've got you've got this update, and it tells you exactly what you got. And also with the respect of the car I have, which is auto, has autopilot. So it's one of these ones that when you get on the freeway and you're you're doing a

long trip. Let's say you're driving from we're going from here to Washington, d C. Once we're on the freeway, I put it into autopilot, I tell it how many cars of safety I would like, and it just drives your your hands free, your pedal free, so you have a lot less. So it's when you're stopping driving, going, stopping going, and steering on everything including stopping go traffic. If you end up in a jam, it'll stop. It'll

just keep you know, inching along with traffic. It'll and it'll ramp up to speed and you get there, you're way less fatigued. But more importantly, it's space safer, the ability if you know, God forbid that you end up rerending someone, which is it happens in the world. That's what Those are the most common accidents that should pretty much go away if you've engaged this autopilot features the normal the normal distractions that lead to a person to I just saw one to look at the radio, they

dropped their whatever. This now can can do this pretty much on highways. How far is it before this can do this like the Google cars anywhere, Well, it works even in the city. What it what it doesn't do right now is to leave a parking space, navigate red lights and turn you know, all that kind of stuff, and and arrived to another parking space. That's what is going to be the full autonomous driving. That's the next wave. Which it doesn't keep me up at night. I'm not

even really too concerned about that. It's something that's for you know, speaking from an investor, I mean, what is it five seven, ten years down the road. Maybe it's not going to impact my my portfolio decisions today. Interesting alright, So beyond Tesla. Let's talk a little bit about some of the questions we we didn't get to um the

charging stations, the network of charging stations. How how was that put into place so quickly, so effectively, And what are the costs to the Tesla owners for for doing these chargings. For the first generation of US Tesla buyers, it's free life of the car. So Tesla Corporation has baked that into the price of the car. And they effectively built this network of superchargers, which is a reasonable distance connecting all the major cities in America today and

it works with these UM a white box. It's about five ft tall, about a foot wide, and it's made in a central factory. They ship them out to electrical contractors around the nation. They procure real estate at shopping centers or restaurants or what have you between all these cities, and they implement the charging system. They wire them up, and they're doing at a very quick rate. There's some

many thousands of them already. These are the superchargers or the regular the superchargers, and the supercharger enables you to top up the car to about in thirty minutes, which is all you need because if you're going from city to city. You just need to make it to the next supercharger with a bit of a buffer if if the carts to be cool, cool or heated, and that's all you care about. And it does this flawlessly. I went the entire trip. I did not have one issue.

California has a little bit of traffic though sometimes you can see these stations full of Tesla's people. They're charging their car, but it's easy to do, actually wait for a charger. I never waited, but you could see that they're full. The good news is the Electricians of America can keep building out these things. If you have a particularly busy station, more chargers. What's the software like? Does it tells you where it is? Does it tell you, hey,

this is full? Is it? Is it that advanced? Or it just says, here's the next charger and here you have enough juice to get there. Oh, it's it's that advanced. It tells you exactly what you have, what kind of what kind of services are there? Maybe you want to go to a different one because it has the restaurant or coffee shop that you like. It tells you if

it's full all these things. It tells you the amount of miles to get there, how much juice you're gonna have left when you arrive, and of course the next destination, because sometimes you don't have to wait thirty minutes, might only be ten minutes, so you can get to your destination and then charge there. So that is the superchargers. But then people probably also want to know what about when I'm not traveling city to city. Let's say I'm just I drive twenty miles a day. I live in Raleigh,

North Carolina, and I commute around the city. How does that change? Well, how often do you drive more than two it fifty miles in a day in your own city? Almost? I don't. I don't know many people that do that. This is a this is a very rare or less than one percent of the population. Do you sleep every day? Of course so do I fantastic I do the charging

while I'm sleeping. And if you live in a dual tariff area, meaning electricity is cheap at night when you're sleeping, and it's expensive at five o'clock, well I'm not going to charge my car at five o'clock when everyone's cooking dinner. Because the utility says it's half price if you do it at ten o'clock. In my program, the charger to say charge charges from two to four in the morning

or whatever. It is absolutely, absolutely and there comes a whole another level of infrastructure, of software, of convenience, of design with making the charging lifestyle better location wise. You know you're gonna be everywhere you go now because I keep telling people you you already can connect lifestyle point A to b. You know almost every city in America. So if you go to the gym, you go to the grocery store, you're going to Long Island, where wherever,

to the Hampton's. Whatever you're doing when you drive sixty or seventy miles, you can now replace that because the quicker destination chargers are at a rate of about forty seven miles for each hour that you're charging. That's that's that's what you get tanking up if you will. So it um So these destination charge is there how many of these out and about, although there are probably in the millions already that many. They used to cost fifteen

hundred dollars. Now they cost five dollars. You go to Tesla, they'll sell it to you and it takes an electrician three or four or five hours to install. That sounds like a lot. I would imagine it's even less than that. These days you usually put it close to the electrical service box. And so I tell people that there are about a million electricians in America. If they each installed you know, ten in a year, can we do that? Yeah, well that's ten million destination chargers in one year. Who's

paying the five grand for that? And who pays for the electricity? Well? Those are different. Because now if you're a business, if you own a chain of hotels, I would say you must have destination charging? Is it too? Is it? Four? Is it ten? Will see how busy you're it gets for your business, but we you won't even be asking for it. If you don't have it, you're going to become a relic. You'll you'll lose that audience, at least you'll lose that today exactly. And that's the

small investment. Small investment. It's no different than a hotel offering internet. You know twenty years ago you thought about it. Today it's an automatic and it will be every business. It'll be across the board, and it won't be a shopping center. It won't be two of them. You're going to see a bank of you know, thirty fifty of these chargers that cater to all the electric cars that are coming. So let's talk a little bit about some other other things that we missed before. Tell me about

the new spending class. What is the new spending class. The new spending class is an army of consumers that they're not so called USA middle class wealthy. You know, they don't make fifty dollars a year, but they have the same economic footprint that you and I have. So they basically they watch television every day, they drive a car, they have air conditioning, they eat deluxe meals, which means those meals need to be grown and delivered, and they

outnumber us by a margin. We all heard the term emerging mark it's well, twenty five years later, more people have emerged than those that are still left so called emerging. But what do we call them? We don't have a phrase for these people. I call them the new spending class. So they're not rich, they're not poor, but we have to follow their spending patterns. And of course, the biggest group, which is the biggest demographic group in the world, which

is that massive population of China. I use that as the example that weaves its way through my book over and over and over, and we look at them the demographics of China and four major blocks, and the biggest one, of course, with the most impact and the most future are the millennials of China. Four hundred and fifteen million people. That's amazing. That's a hundred and fifty of the total population of the US exactly, and it's it's their wants

and their needs. They have far higher expectations than the generations before them. I know this. Look at the level of enlightenment. The people that run China are those the children of the Cultu real Revolution. They're sort of fifty five to maybe seventy hundred and sixty million people in that demographic block, but only one million graduated university. That's amazing,

less than one percent, less than one percent. These millennials I talk about this, four and fifty million, over a hundred million have already graduated university, typically in science, science, technology, engineering, and math stem fields. These way higher expectations. The majority of these young people were born rural, the majority now live urban. And what do they want? They want everything you and I have. In fact, they know how the

world works. They have an Internet connection. I mean, these people are not ignorant to the to the comfort convenience communication that everyone wants and everyone is taking for granted. And we've seen this in their in their spending patterns, and in how they're future is changing. And it's happening so fast. It's not even five year blocks. You have to be aware of the hyper aware of this stuff. In sort of two year blocks, it's being turned up top to bottom. So you've you've spent quite a bit

of time in China. What what cities have you spend time in over there? I traveled I've been to China a couple of times, and I traveled the country by train, so rather than fly city to city, I thought it was important to sort of see the landscape and understand how what does it look like? And although I've seen a lot of China, I've I've you know, visit a lot of the country. I've been there a couple of times,

what have I seen a bit nothing? I mean, it's the same size as America, right, So to really understand it and go to all the those those other places, it'll take me a lot longer. I'm gonna be going again due to the book. We're taking the book into the Chinese language. But the one thing that I will tell you is that the Chinese population, they are optimists, they're speculators, and by disposition, what what do these people? I think that the future is going to be better.

They're not pessimistic. They don't have this you know, you know, beaten down sort of like a salary stagnation that we've had in Europe in the West, and it's it's just incredible to the human potential of what's going on, not just in China but in emerging markets in general, is just a staggering sort of Um well, they're closer to that zero bound level than they are to the we've peaked and we've gone plateaued. So to them, the direction

is it's heading in the right right way. People who experience that peak in plateau, you can see why there's a little concern and worry. Hey, how come Although it does seem to be very cyclical. We we had that in the seventies and eighties, and now we're having it again in the two thousand's. We'll see if this goes away and comes back. Um in another twenty years. Tell us about the ghost cities of China and why do you think, uh, there was a big sixty minutes, pets

and a number of other things. Why do you think that concern is unnecessary? Well, it is important. We can't you know, just dismiss it for nothing. But China has many different tiers of big cities. So you've got the Tier one cities, which are the big you know, twenty million people living in them, Tier two, which might be five to ten million, and then we have the Tier three and Tier four cities. This is there's been some situations of ghost cities which which do exist. If you

build it, they will come. This is we have to forget that China is a planned economy. Are there examples in the country of China where they've built a city that should house a million people for their distant future and maybe it's not full yet. Yeah, I I would imagine that there. That's what they're doing. I look at this four fifteen million millennials. They're all under the age of thirty five. By most of these people do not yet, you know, have their own home that's coming. Where are

they all going to live? You know? This this will get take. This will get resolved in the course of time. And a lot of it is function of price. These things are a lot cheaper, they're discounted. But if you speak to people that own, you know, vast real estate portfolios and China. Know, the richest man in China the Dailine Wanda Group, which has the biggest balance sheet, if you will, he looks at the debt levels, governmental debt levels, and tier one tier two city debt levels. He is

not concerned. Okay, lives in China and he's not going to sit there and bash the system and bash the government. But you know, he is concerned a little bit about Tier three and tier four cities has to get work to the system. Will the if I liken it to America, will the Kalamazoos and the Tallahassees of China bring down the system? That's the question investors have to ask. In

the short term, anything can happen. And when I follow this stuff, which I follow China like a financial soap opera, I'm not necessarily continuing, you know, to read the people that agree with me. I read the Kyle Basses, I read the Jim Chainos of the world. What am I missing anything can happen in the short term. I just I am not concerned about the Chinese economy in the medium to long run. I just am not. Facts can

change and we'll see what happens. We have to liken the the economy to the stock market, and it is becoming overwhelmingly a consumer society based on services. So let me shift gears up a little bit on you. Um, you talk about you're the founder of the CEO two Master Solutions Partnership. What is that? This was a think tank of a group of guys that I that I associate with and deal with about looking at these challenges

and opportunities burning a lot of shoe leather. We have been talking with endowments and foundations, and now it's becoming a vehicle for us to invest in all the elements that factually make the reduction and CEO two emissions possible. What does that include, Well, this has to be a strategy that's a lot that's ambivalent. So it basically if you look at a typical portfolio construction. First, I will I will preface it by saying we've always followed these things.

The things I'm gonna talk about now, we're not getting into this because it's popular or themic. You know, we've done you know, I've got twenty years of experience. My partner, Matt Sublowski has got fifteen years of experience looking at these things. So let's look at a typical portfolio construction, subliminal ideas for people to look at within reduction of CEO two emissions. Well, first of all, it's the building blocks that make it possible, right, So we look at that.

We're not going to invest in coal and oil, but we are going to look at things like copper. That's important the fabrication of it. We're gonna look at the automotive industry. You know, there's basically the winners and losers there. So there's there's the lazy incumbents and then there's the progressive incumbents. You look at a country like Germany, all the people that feed into the parts that feed into

the automotive industry. How's that going to change? You've got dozens of private and public companies that make cranks, pistons, radiators, valves, mufflers. That industry is changing. We look at the technologies that make this future energy economy possible, right, and that's people that look at how how do you charge a car, how do you manufacture them, how we're gonna sell them. We look at the creation trans utilization of energy in general. It's changing so far deeper than just investing in a

solar company or in a wind company. Let's look at the gizmos, products in fabrication, the gearing that makes that stuff possible, because there if they're gonna be busier, it's good. How do we desalinate water? Who's going to do it? What are the components made to make that possible? The static ville, which is the vast network of pipelines, railroads and distribution of electricity, tectonic shift again, tectonic shift, So we're looking at all the components that make that possible.

And of course we get into the just a general utilization of energy. So it's it's a vast sort of arena that we're looking at, understanding and investing in. So it's more than just the thing tank. It's a private investment partnership that you are looking to take advantage of client of the changes that are taking place in the

global uh climate, global world and basically global world. Is that a phrase in the global environmental world and make informed investments based on what you see as the next coming trends. Yeah, as I call the algebra in the this shift in energy away from fossil fuels. We understand fossil fuels are important, but there is a shift happening.

You can argue is that happening faster slow? But it is happening, and we're looking at the other side of that algebraic equation, and we want to understand and support and of course invest in those products, materials and building blocks. It makes sense. So let's jump into our favorite questions that we ask all of our guests. Um, we went over your background. Uh, tell me a little bit about some of your early mentors, Who who influenced your thought process,

Who who led you to this career path. Yeah. I was a very curious person and I always surrounded myself with you know, father figure types of guys. And we're very lucky in Vancouver. There's a lot of UM influential sort of UM guru types in the themes that I follow and unlike, and I may like in this to the software industry, where it's hard to get access to the CEOs. Let's say it's hard to get access to Larry Ellison or or Elon Musk in our industry in Vancouver.

It's actually you can actually rub shoulders with these guys. And if you I was a young guy that was very curious and I put a lot of effort into it, and I was able to sort of surround myself with these people like in these industries, and then we would travel together, we would go to conferences, and you know, ten years of dinners later, you you consider yourself friends and mentors and and sort of you take their collective experience and you put it into your own sort of path.

And now that I'm a forty one years old now, so I'm sort of starting to mentor some younger people myself. So what about investors out there who have tread the path before you? What investors did you find influential to your uh thought process? I always love the wisdom of Warren Buffett. You can you can lose yourself and Warren Buffett sort of readings and videos and such, and a lot of people have followed him, of course, because he he's just he's able to tell a story in such

plain English, you know. So I think you can still for those that have not enjoyed his wisdom. I mean, just go to YouTube and you can lose yourself for hours and sort of his his philosophies. Reading some of the books from before that you know, like Ben Graham of course, the famous Value Investor, and sort of just that plain street common sense you know that works, and Napoleon Hill and those books that they're they're just how

to think and grow rich? Is that right? Yeah? Yeah, they're they're just timeless, They're just totally they're absolutely So I'm gonna ask you, let's let's jump into the next question. What are some of your favorite books? And that could be fiction nonfiction, and within the nonfiction it could either be technology or investment related or anything else. I don't want you to feel constrained. Tell me about what what

books you found most influential. Let's talk about Napoleon Hill. Um, what did you What was your takeaway from Think and Grow Rich? Well, I think the that is I said already that that common that that street common sense. You know where you have to and you you also factor in psychology and and just basic practices that help your business. And the book is a is a quick read for anyone that hasn't read it yet, very very fast, and you can reread it probably every couple of years on

summer vacation. Right now, this is my summer read this year is going to be a book by Mr McCullough, which is um, The Right Brothers, not that when I'm reading an older one. That's my next one. But it's The Mornings on Mornings, Mornings on Horseback, which is the book on the young Teddy Roosevelt, who is an incredible character. I don't know anyone who has read one of the mccaulla biographies and doesn't come away just wow. This was

a fantastic research, the research, the storytelling. And I'm just breaking that one and I'm really looking forward to that and I'll probably have that read in the first three or four days of my vacation. Coming up. A book I all so recently read was was a Walter Isaacs and Steve Jobs, which is now the best selling biography I think in history. Is that true? I had no

idea what a book, what a book, the storytelling. I actually met Walter Isaacson when he came to Vancouver in his book series My Friend that was sponsored it, so we were able to enjoy a dinner with him talking about some of the stories around making that book. Ye Jobs reached out to him and said, I listen, I want you to write my biography. Who does something like that.

He originally was a little reluctant. It's a great book for anyone that wants to understand that that iconic you know, Americana, which is Apple and all that the history and a lot of the characters that were involved. One of my friends, Robert Friedland, is featured in the book. He was the guy with the apple farm in Oregon, and he was the guy that Walter Isaacson would say they taught or

showed Steve Jobs that reality distortion field. And if anyone has seen Robert Friedland give a talk, you see it. I mean's just a captivating public speaker and amazing storyteller. And then which is the same with with Steve Jobs and so of what he was able to do. When I was almost finished the book, Barry, I saved the last forty pages and it took me three months. I put it on the shelf and I just waited, and

you know, I read that last forty pages. It was just again I I just don't want that book to end. It was it was really interesting. There were a number of books that have come out since then sort of telling telling a different version of the story, including a few Apple authorized biographies. I thought the book was harsh but fair is that? Is that a good way to describe it. He's a mercurial, different, difficult character, but it seemed like he it was a very fair conversation. If

there was any criticism. It's a little technology light. It's about Steve Jobs, the person that Steve Jobs, the technologist, which is is kind of interesting. Give me one more book? What else? What else have you read that really was influential to you when I was around twenty years old and probably the reason I wrote my book the way it is. There's a Canadian book was written by David Chilton. It's called The Wealthy Barber. That book sold two million

copies in Canada. To give you is it a good book? Well? Two million? Healthy and it's it's a it's a simple book about a barber who's wealthy and his pay. His clients come in to cut their hair and he gives them investment advice, just plane plane, straight common sense stuff. Now, the book was around the days of eight and teen percent interest, so those days are gone. You can't just

do that. The power of compound interest doesn't work anymore in this interest rate environment, which is a different discussion for a different day. But the but the way that book is written, I think it's fun and it was one of those early personal finance books that I read that I just love and I recommended to any young person, any millennial out there, you want to read that book because it gives you a good foundation. There are a

run of parable books like that. The Wealthy Barber Um The Richest Man in Babylon is another similar book, and there's one other. I'm trying to remember the most recent UM version of that sort of paradox that I have it out there. I read it recently. I'm trying to remember the title. I'll dig it up UM. Alright, So, so beyond books, what what has changed since you've become a venture investor? What do you think is is the most significant positive and negative changes that that you've witnessed

over the past decade. It's harder to be a stockpicker, you know, if we look at all the click trading that takes place in the world, people buy ETF s now Berry. You know, you look at the graph on who used to be their own personal stock picker and what was an et F. I mean, you know, you interviewed the king of ETFs yourself, and it's all it's went now to basically people buy e t F. So you get volatility with that because with click trading, you

you dump positions. You know, we're just just sporadically. So it's it's a lot harder an t F and you're essentially dumping a hundred stocks exactly, and and then people do it. The psychology the market comes in, you get the greed, and greed very powerful emotion. We've seen the Dow came off a thousand points here, you know, just after the Brexit, you know, and that's it's a fear trade. And so I think it's harder to be a stock picker, you know, to to find deep value and to have

disproportionate benefit. So you need to be is a money manager. I think you need to be long and short. It's very hard to be long only. And one of my one of my mentors in Germany told me says, when me and traditionally I'm a value investor, so I am long only, and he says the difference between people like you and me. He says, I make money every day. I don't care if the market's going up or down. I just I just need to be right more times

that I'm wrong. And he says, you you have you wait and wait, and I said, the way my heart beats, I'm okay with that. I want to find deep value. I want to get behind I have conviction as long as I'm not wrong. Because you a SOO have to admit when the facts change, so should you. If you're wrong, get off the trade, you know. But typically I have a window of maybe one to five years. I want to get behind a theme and uh and ride that

pony all the way. So what do you see as some of the next major shifts taking place in in that space, either in in public markets or venture investment. Well, let's talk about the the largest traded commodity in the world. Let's talk about oil, which is a huge market and it's going through a tectonic shift. And let me just give people some anecdotal information for those that are not energy experts. We use today nine s million barrels a

day demand. And if you look at the prognosticators and you ask them fifteen years ago or ten years ago. How much oil are we going to use in the future. All the charts end up going into the future to about a hundred twenty million barrels a day. Hundred in the future maybe not. The way we use oil is so fundamentally changed. We are now things that you consume of this ninety six million barrels a day, there are there are applications that are going to go to zero

oil consumption, zero adoption. Five million barrels a day is used to make electricity on islands around the world. You look at the fines that were levied three weeks ago by the European Union of all the Lorry, the semi truck manufacturers billions of dollars because their efficiencies did not go down in twenty five years. In four years, Barry, they're going to use less fuel? Is that? What is the is the key fact? It's a two prong effect.

For they're making them change the shape of the trucks so they're gonna be aerodynamic European semi trucks, as everyone knows how that big square, very un aerodynamic shape that will that will go to be an aerodynamic shape, which will have We've we've seen a lot of adaptations to here here we have it. Not in Europe though, really not. You would think that gasoline is so much more expensive

there that would be a being automatic. I'm actually looking for something right now as we're as we're talking about it, but I'm not so that's going to change. And then we look at the the the automobiles that are used eighteen hours a day, which is not not you and I taxis the urban transports, buses, the world's largest automobile market, which is China. Boy, this that industry is changing in the next four or five years. It's a line item.

So conclusively, we're gonna use less oil. If people talk about the fracking revolution in the United States, so we know that the drill rigs went from about two D six hundred and four years and what happened is we ended up having almost six million barrels of new production. This is unprecedented. And then you look at it, well, what about the demand side, because the world's growing and there's India and all these other places. Let's look at

the fastest growing energy market in history, China. It took them fifteen years to have five million barrels of new demand. So this this revolution of how we extract oil. It's it's it's not offset by demand. It's slowing down. We used to grow three four percent a year annual oil demand. We're coming in it's it's barely growing, it's maybe a percent.

What about the concept and I'm trying to remember which Saudi king said this um and the quote is you know you Americans waste oil using it as a fuel, meaning it's real value is in the materials world and as a basis for plastics and polymers and what have you. How much of a demand for oil exists on not on the energy side, but on the material side. And

what does that mean going going forward? Yeah, that's gonna there is demand for that obviously to make plastics and in certain products we we use petroleum, you know, the petroleum industry, But that's not the lion's share of where oil is consumed. Oil is consumed in mode of transportation, and it's changing. And we saw the oil price collapse in the past eighteen months because of a two million

barrel a day shifted displacement too much supply. So if I'm talking about all these things I just talked about, I'm talking about a displacement of two three five million barrels a day in the next two five fifteen years. Well, and at the same time you can extract more oil. I like to tell people that of the six or seven factors that can influence the price of oil, I think that that industry, the oil industry, relies overweight now on toxic geopolitics, because there's always it could be maybe

forty of politics in a barrel of oil. If things go awry in a really sensitive oil environment, you should have or you could have an increase in oil prices. It does not rely on fundamentals anymore because across the board innovation, adoption, technology we are going to use in the future less oil. My friend Gary Shilling has a ten dollar a barrel price target. I don't I don't really do price targets, but that certainly gets your attention.

Long term, he's in the same camp as you. Hey, this as an energy source, it's certainly if it's not a twilight industry, it certainly has peaked. And as we see more tesla's and more electrical adaptation, there's going to be less and less UH oil consumption. Even if we continue using gasoline powered cars as they become autonomous. They're gonna become so much more fuel efficient than us humans are are driving. It's gotta take a huge bite out

of the total demand that's out there. Yeah, they're gonna they're gonna be electric. Even if let's let's assume right now we don't sell one an electric car. We're gonna we're gonna sell more cars in the future, more people consuming more things. We can all agree to that. But cars are mandated here in the United States to go from miles a gallon to fifty four miles a gallon. By that's the fleet sales for all of GM, all of Mercedes, all of Toyota, their entire fleet has that average.

You use more or less oil in that atmosphere. Clearly, my less thank you. If the lorry manufacturers of Europe are going to have to have more efficiency between now and are they going to use more or less oil in that atmosphere? If we if half the islands around the world that make electricity from bunker start using being diesel, cheap diesel to make electricity, or we're gonna you know, it's it's basic arithmetic. The ships around the world are

becoming more efficient. I mean just in the past twelve years, Barry, the average airplane and car is about more fuel efficient. Now the trucks are coming next, because the number they just got the wrist slapped that three weeks ago that these charge collusion charges have went went against them, which is why they too have a siren on that program. And then of course the grandaddy of them all urban transport buses that operates six eighteen hours a day going electric.

Now we'd have to focus about the small markets that are that aren't approaching this from a progressive point of view. We have to go to the world's largest market, which is doing this very quickly. So our fall anal two questions, our favorite questions. First, if a millennial or recent college graduate came up to you and ask for some career advice, what would you tell them, Well, let's let's pretend there are my brother's children, so I really, I really admire

this millennial I'm talking to. I would take them by the hand, and I would sit down and I would really explain fundamentally how energy is the umbilical court of human progress, how it's changing, how we create, transfer, and utilize that energy. Of course they'll come to the conclusion that it's all electricity, and I would say, open up your mind. Maybe it's electrical design, maybe it's engineering, maybe it's the software technology. But you need to embrace that.

You need to have you need to know the fundamentals. If you cut all this stuff in half, this green energy that so many young people want, if you cut it in half, you need to know how it works, how it functions, how can you make it better? And maybe, just maybe those people can change the world. We need to inspire a generation of young people berry to go to university with pride and take science, technology, engineering, and math like so many other people around the world. That's

the advice I would give a millennial. And our final question, what is it that you know about technology, energy, venture investing today that you wish you knew fifteen years ago? I wish I had a degree in psychology because it makes you understand markets so much more. You know these emotions of fear and greed. You know this this euphoria that hits markets when you think you're a genius because you're making money in the stocks you chose are all

going higher. Now, if you understood psychology, you you you it's going to help you as an investor. So if I if I knew more, and I do study this stuff now just as a passive sort of fan of of how markets are. So I don't want to use the word manipulated, but move driven, driven by by emotion. If you understand that better you're gonna have, you're gonna add a few percentage points to your performance every year. Giohnny, this has been terrific. Thank you for being so generous

with your time. We have been speaking with Giohnny Kovachevik, author of My Electrician Drives a Porsche, investing in the rise of the new spending class. If you enjoyed this conversation, be sure and look up an inch or down an inch and you could see any of the other nineties seven or so. Uh, such conversations we've had. I know this sounds like a conversation just between two people, but

a team of folks helped put this together. Uh. Taylor Riggs is our scheduler slash booker, Charlie Vollmer is our producer, Mark is our recording engineer. Mike Batnick is the head of research. And you're gonna actually I need you to sign this book to Mike Batnick, who gave you a fantastic review on Amazon. Um, so before I forget, I have to have you sign a book for him. Uh. Thank you for everybody for helping make this program such a delight to do and to listen to. I'm Barry Ridolts.

You've been listening to Masters in Business on Bloomberg Radio, brought to you by B A s F. We create chemistry.