July 22, 2025 • 39 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Stocks are at all-time highs. Chatter on WallStreetBets is surging. Retail traders are flooding into low-priced shares.
It’s not 2021, and the shares of the moment aren’t GameStop Corp., AMC Entertainment Holdings Inc. or the now-bankrupt Bed Bath & Beyond. In 2025’s meme stock mania, the companies du jour are Opendoor Technologies Inc. and Kohl’s Corp.
The similarities are clear: Like the episode four years ago, which famously led Gabe Plotkin to shutter his hedge fund Melvin Capital Management, amateur traders are piling into heavily shorted companies with low share prices in a bid to strike quick riches. And, as was the case back then, it comes at a time of broad market euphoria: the S&P 500 is at an all-time high, Bitcoin has doubled in less than year and blank-check companies are all the rage again.
Today's show features:
- Eric Jackson, Founder and President of EMJ Capital, on the latest rally in so-called “meme stocks” specifically Opendoor Technologies
- Bloomberg Businessweek Senior Reporter Max Chafkin on SpaceX warning investors that Elon Musk could return to US politics
- Monica Guerra, Executive Director and Head of US Policy for Morgan Stanley Wealth Management on the impact of tariffs on the economy and markets amid US dollar weakness
- Leo Kelly, CEO of Verdence Capital Advisors, on markets and the Federal Reserve’s path forward
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Business
Weekdaily reporting from the magazine that helps global leaders stay
ahead with insight on the people, companies, and trends shaping
today's complex economy. Plus global business, finance and tech news
(00:23):
as it happens. The Bloomberg Business Week Daily Podcast with
Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2 (00:32):
Well, it does kind of feel like twenty twenty one,
at least some vibes. With memestocks and Crypto back in
the spotlight. Cole Shares more than doubled amid an influx
of mentions by retail traders on social media, with the
stock price soaring as much as one hundred and five
percent when the equity market opened today, and then there's
Open Door Technologies. It jumped as much as one hundred
and twenty percent yesterday. It extended its gravity defying rally
(00:55):
from last week. Investors continue to pile into the stock
that has found a sudden fandom among retail traders and
social media platforms.
Speaker 3 (01:02):
I mean, this is when that is certainly on our radar.
One of the reasons Open Door has been moving is
due to Eric Jackson He's the founder of Toronto based
hedge fund AMJ Capitol. He made a series of posts
on X encouraging buying, and Eric joins us from Toronto
on this Tuesday. Eric, good to have you here with us.
Do you, first of all, take issue with this being
(01:22):
open Door a meme stock?
Speaker 4 (01:25):
Yeah?
Speaker 5 (01:25):
I think Carol that all the meme stocks from twenty
twenty one were dumb businesses. I couldn't understand it at
the time why retail traders were getting so wrapped up
in AMC, GME, and BlackBerry. I think those were the
big three, Like those are all like walking dead businesses.
(01:46):
So when I got into open Door and then I
first started tweeting about it last Monday, it's hard to believe.
It feels like a cent where you ago like two
forty five. Like I got into it because this is
a real business and it's got a real platform that
it's built, and it's definitely fallen on hard times. That's
why the stocks down like ninety nine percent or whatever
(02:08):
it is from its all time highs. But I just
think that the market got overly pessimistic about it. And
I've seen this movie before with Carvana, Like that's one
of the one of my like you know, greatest.
Speaker 4 (02:21):
Heads on my wall. I guess you know from the
past is.
Speaker 5 (02:24):
That I got into Carvana early, not at three dollars
and fifty cents, but at fifteen dollars, and today it's
like close to four hundred. And I just see so
many similarities between these two businesses, and all, you know,
people just get overly a prisoner of the moment, pessimistic
about these companies, and everyone's negative Nelly, and everyone loves
(02:47):
to dance on the grave and say that these companies are.
Speaker 4 (02:49):
Circling the drain.
Speaker 5 (02:51):
Nobody would have believed that, you know, at three fifty
that Carbona was going back to four hundred. Nobody now
that at you know, it was seventy cents last Monday.
Now it's whatever it is three bucks today, that this
thing is I think going to eighty two bucks.
Speaker 2 (03:04):
Yeah, okay, so let's talk about that. It's two dollars
and eighty cents right now, down about twelve thirteen percent
as we speak, just on the day today, you have
a price target of eighty two dollars.
Speaker 6 (03:15):
That's pretty wild.
Speaker 2 (03:17):
Make your case to us on why you see it
moving that high.
Speaker 5 (03:19):
Well, I mean, I'll be even wilder, tim, I think
today it should be trading forty bucks. You know, it's
it's you know, like basically that if you look at
go back and look at Carvana. Okay, use this as
a comparison to open Door. Both of these companies they're
trying to e commerce SAFFI some niche that hasn't been
e commerce suffied before. For Carvana, it was buying and
(03:41):
selling use cars. For open doors, buying and selling homes.
It's a huge business obviously in both cases, a national
business where just having like one or two or three
percent market share nationally, you know, is talking billions and
billions of dollars and power because it's all so fragmented today, uh,
(04:03):
you know, with the dealers in the car industry and
with the agents you know, in the real estate industry.
And basically you need a lot of debt to run
both of these businesses.
Speaker 4 (04:14):
And so the problem that both of these.
Speaker 5 (04:16):
Businesses came you know, came upon is that although they
were flying high in the COVID you know, pre COVID
and then uh briefly post COVID era, when interest rates
were low, when Powell started raising rates, Uh, suddenly investors
got nervous, and these stocks crashed, and and the assumption
was that it's they're just gonna they're going to go under,
(04:36):
they're going to file for bankruptcy. So their price as
if they're going to go bankrupt. And I don't believe
that's true.
Speaker 4 (04:43):
Uh, Carvana.
Speaker 6 (04:44):
You know.
Speaker 5 (04:44):
In fact, I was on a podcast in June of
twenty twenty two with Josh Brown and Michael Back where
I call both like I said, both would turn around
Carvanah did and h open Door did it it was
dead wrong, Like it took a lot longer for them
to get to the point where they're about to turn profitable.
But they are about to turn profitable.
Speaker 3 (05:02):
So for open Door, do you expect to inject and
invest more money into it and then take a profit
or because it sounds like you've done the research, looked
at the business, maybe talk to the company that this
is more of a long term buy and hold strategy
for you.
Speaker 4 (05:21):
Which is it?
Speaker 5 (05:24):
Well, I've been fortunate to be early on a bunch
of companies, like I was like really early on Ali
Baba even you know back in twenty nine and ten,
when it was still a private company, it was value
to ten billion. I thought it was going to go
up Carvana, you know some other ones. Like what I've
learned Carol is that you know, like it's always hard
(05:46):
to not avoid the temptation of firing up the terminal
or turning on business TV and getting emotional about the
macro headlines of the day and get shaken out of
these positions. And sometimes when you know, these these companies
are pretty rare, you know that can truly hundred bag
or hundred acts, right, but like, you know, it's so
(06:07):
easy to get shaken out of these positions or like
in the case of Carvana, like I got like I said,
I got into it at fifteen, I would say I
got out of it. You know, the bulk of my
position in around like probably one thirty one forty one
fifty somewhere in there. And I'm thinking, oh, I'm so smart.
I mean ten x my money. Pat myself on the
back here, you know, and I know this company really well.
I still was optimistic about Carvana, and still i'm today.
Speaker 4 (06:29):
But I thought, like, I'm just going to trade it,
trade in and out.
Speaker 5 (06:33):
And you know the truth is, you don't make as
much money as is if you do nothing and just
let it sit there. So I'm not like jumping into
add more, Carol, but you know, because I want to
see how the things play out. But I you know,
I'm going to try to avoid that temptation and just
sit and do nothing.
Speaker 3 (06:49):
How much eighty can you give us an idea? How
much you have put into it? And is it all
your money? Is it investor money?
Speaker 4 (06:56):
Well, I run a fund, Carol, it's a it's a
it's a small fund.
Speaker 5 (07:00):
Frank with you guys, It's like I had a huge
I had a huge billionaire that basically it was like
a cornerstone investor for me in twenty sixteen seventeen when
I started EMJ Capital. And so I like the way
you think, Eric, you know, you look at companies differently.
You find these like little hidden jewel companies. How about
I give you some money to manage? And it did
and did great, like it was kind of like a
(07:20):
Kathy Wood type arc, like twenty seventeen up to you know,
probably February twenty twenty one was amazing, shot the lights out,
and then twenty one and twenty two I got crushed
and I didn't diversify my.
Speaker 4 (07:34):
What do you call it?
Speaker 5 (07:35):
Customer base you know, and so like ninety nine point
five percent of the capital and the fund was this
billionaire and he took it out, and which was this
is right, and you know's so friendly with him. But
I was sort of like left scrambling and trying to
figure out what to do, and so kept the lights on.
Pivoted to think building a team to build AI models,
(07:58):
you know, but you know have been it's been hit
and miss the last few years. And then it was
only like probably you know, three months ago that I
realized like, hey, you know we're doing you know, I
keep finding these companies.
Speaker 4 (08:08):
Why don't we just sort of go all in on that.
Speaker 5 (08:11):
Let's let's get the aim Allels totally focused on finding
these hundred baggers before the fact. So the remaining capital
we have, which a few million we put in, you know,
obviously we didn't put it all into open Door or anything.
Speaker 4 (08:22):
We have other positions. There's sort of like five key
positions that.
Speaker 5 (08:24):
I have right now, iron cipher mining, BTQ technologies, and ethereum.
Speaker 6 (08:30):
Those are the kind of the yeah big five.
Speaker 5 (08:32):
Fused on and uh, you know, we'll see where we go.
And you know, all I got is my reputation guys you.
Speaker 3 (08:38):
Know right, no, no, no, we get now.
Speaker 5 (08:40):
I've got I've got I've got you know, I've got
people you know whatever calling up or emailing and saying,
you know, this is great.
Speaker 4 (08:46):
You know, we want to get behind you, so we'll
see where it goes.
Speaker 2 (08:49):
It seems like a lot of folks on social media,
a lot of folks are on social media are getting
behind you. Have you talked to Tamath poly Hapatilla at
all about this? He is, you know, a had famous
involvement with open Door back when it went public.
Speaker 5 (09:02):
I haven't talked with him. I email, but I texted
it or not text, I tweeted him. I tweeted him
when you know, when this thing got started last week,
because obviously I think it would be a tremendous a
redemption arc.
Speaker 4 (09:15):
For Chamoth to come back into this stock.
Speaker 5 (09:19):
I don't think he has anything to be ashamed of
it being involved with with open Door to begin with,
or any of the co founder like Keith or Boy
is a guy who kind of you know, was wrote
the business plan originally. I think he's like one of
the smartest guys out there. Everybody was associated with this
company was you know, it was it was a good company.
You know, it's just a ma you know, the Macro
changed and the rates rose and stuff, and so I
(09:41):
don't think I don't think Tremoth has anything to be
ashamed of. But I think it would be amazing if
he came back in on the ride to eighty two,
which would double the all time highs which is previously
thirty nine bucks.
Speaker 2 (09:52):
Eric, forgive me for being blunt about this question, but
if you look at your Twitter feed, there's just a
it's like all open door. I mean, I had trouble.
You're spending a lot of time I'm retweeting and interacting
with folks on there, and I understand that's part of
the game these days, but maybe a critic could see
that and say, you're really trying to just pump this
stock up at this point, defend it on its fundamentals,
(10:12):
and convince people that this is not, you know, for
lack of a better term, pumping it up and then selling.
Speaker 4 (10:20):
I don't know what to tell you, guys.
Speaker 5 (10:21):
I mean, unfollow me, tim if I'm bugging you, mute
in or block me.
Speaker 4 (10:26):
And I'd say that to anybody else.
Speaker 5 (10:29):
I think anybody who knows me knows I'm not a
pumper or whatever I have been.
Speaker 4 (10:34):
Obviously, I've been inundated, called a pump and dumper, a grifter.
Jim Kramer said this was a parlay yesterday. I don't
know what that means.
Speaker 5 (10:43):
You could explain it to me, you know whatever I mean.
I mean, people are you know, they're not familiar with
the Open Door story. So whatever they want to sit
back behind their anonymous Twitter feeds and cast dis versions.
Speaker 4 (10:58):
I don't care.
Speaker 5 (10:59):
I'm here to make I don't have I got to
feed my family. I got to grow this business. I
got to do well for my investors. And if people
want to take shots whatever, you know, you know, I
just don't have time for it. I really love the
community that we've built. I mean, it's it's amazing. This morning,
I was retweeting all these people from you know, you
name it, Turkey, Korea, Japan and Africa, Nigeria, Brazil, I mean,
(11:24):
everyone around the world, and they're all in on Open Door.
Speaker 6 (11:27):
Yeah, you know, I don't know.
Speaker 4 (11:28):
That it's going at eighty two. I don't know. I
don't know.
Speaker 5 (11:30):
Crystal Ball, I was, you know, I don't know, you know,
I might be wrong. I was wrong for many many
years about open door. But I don't think I'm wrong
right now. I think now's the time this thing is
turning and you can either get in make a lot
of money or not. And I got people already telling
me how much money they've made and it's life changing
and all this that's fantastic.
Speaker 4 (11:50):
I mean, it doesn't doesn't help me, but it not
be for that. He was a community Eric, you did sea,
we learned together.
Speaker 3 (11:56):
No, I hear you. You said you're hoping to hold
on to it, like that's your plan. But I mean
if all of a sudden the stock took a downturn,
I mean it's a two dollars eighty percent stock, so
I'm not quite sure what kind of downturn. But is
there something that you would quickly change your thoughts or
you're going to ride it even if it rides down
a lot.
Speaker 4 (12:17):
I can't say I'm going to ride it forever, Carol.
Speaker 3 (12:20):
I mean not foreverbody. I mean, if it went down
fifty percent, would you stay with it?
Speaker 4 (12:27):
I think it's less about the percentage drop.
Speaker 5 (12:29):
I mean there's obviously going to be volatility, especially in
the early days of these of these kinds of names
and you know, they report rings in a couple of weeks,
so you know, if it's a terrible report, I mean
the thing would you know, would would have a negative
reaction to the to the downside and then reverse to
the upside if it was good news.
Speaker 4 (12:46):
I think there it is going to be profitable, and I.
Speaker 5 (12:48):
Think it's going to be the start of a string
of profitable quarters, which is what.
Speaker 4 (12:51):
Needs to happen for this thing to get up to
eighty two.
Speaker 5 (12:54):
But you know, one thing that's different about oupen Doors,
like there is more diverse.
Speaker 4 (13:00):
Opinion about management.
Speaker 5 (13:01):
I think with Carvana, Like obviously everybody on Twitter and
Wall Street hated it, but if you talk to people
that actually knew the business, and I think people really
admired the CEO, Ernie Garcia and the management team, and
they those guys bought a lot of stock when Carvana
was low, right before it bottomed. Nobody's done that here
at open Door, which is the norm for most of
(13:22):
these I mean most times these insiders, you know, they
just don't.
Speaker 4 (13:25):
Brian Armstrong from Coinbase, you never bought a share from
the time he went public at four hundred down to
thirty eight back up again. Yeah, sales zone by house
in La.
Speaker 5 (13:34):
So, but there's more controversy about the management here at
Open Door TEMP. Not to cut you off, you know,
some people think Carrie Wheeler, who's the CEO, is great
and some people don't. And so if I discovered three
months from now, the gosh, I don't know about her.
I mean, you know, one thing I might think about
is like, what's the chance of an activist coming in here?
Which I think is very high, So that might keep
(13:56):
me in. But if I concluded, like the management's terrible,
I can't standard anymore, then.
Speaker 4 (14:02):
Obviously I have to exit. I don't think that's going
to be the case.
Speaker 2 (14:05):
Eric, Before we let you go, other stocks that you
are buying right now that you're holding right now, what
are people missing when? What are you getting earlier today?
Speaker 4 (14:16):
Tim hot off the presses. I tweeted this out already,
So this.
Speaker 5 (14:19):
Is I bought some iron ir e N and Cipher CifR.
Both of those are bitcoin miners, make a lot of
money from that, but they're more excitingly there.
Speaker 4 (14:31):
They've moved. They're kind of like a Core Scientific and
just you know Core.
Speaker 5 (14:34):
We've bought Core Scientific recently, but it was kind of
a lousy price for core. Scientific Iron and Cipher are
way bigger, have way more kind of energized gigawatts that
are coming online in the next year that somebody like
an Oracle or a Meta or you know, Google has
to do a deal with. So I like those, and
I like BTQ Technologies. BTQQF is a ticker. It's still
(14:55):
an no TC ticker. I bought it a twenty one
cents in December with like five bucks, so it's been
a thirty bagger for me so far. But I think
it's gonna meet the criteria and be hundred bagger when
it all said and done.
Speaker 2 (15:08):
All right, always looking for the diamonds in the rough,
no matter no matter how low the prices are. Hey, Eric,
appreciate you taking so much time with us this afternoon.
It's great to check back in with you. It's been
quite a few months, so we love it that you
took the time. Eric Jackson is the founder of the
Toronto based hedge fund E MJ.
Speaker 6 (15:25):
Capitol.
Speaker 2 (15:25):
I would never block him on Twitter. I still follow
you on Twitter. Yeah, check out his twitter feed too,
because he does share a lot of what he's working
on here as well.
Speaker 3 (15:33):
Yeah, pretty clear I'm pretty transparent and stuff out there.
Speaker 1 (15:37):
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Speaker 2 (15:50):
Back to a headline that you mentioned just in the
last few minutes, Carol SpaceX says warrant investors that Elon
Musk could return to politics. Musk may serve in similar
roles to his previous position as senior advisor to President
Donald Trump, and devotes significant time and energy to such roles.
This according to documents, It's great to have back with us.
Bloomberg Business Week a senior reporter, Max Chafkin. Max is
(16:11):
the co host of the Everybody's Business in Elon Inc. Podcast,
also the author of the Concherrion Peter Tiel in Silicon
Valley's Pursuit of Power. He's here in studio with us.
Speaker 4 (16:20):
Expect to have you back in this as much as
we love it.
Speaker 2 (16:24):
I feel like you knew something here when you told
us that you know, never say never when it comes
to Elon Musk and staying out of politics.
Speaker 7 (16:31):
I mean this is one of these things, where in
any investors learning this from the risk factor statement of
the prospectus is a little bit behind the curve. It's
been pretty obvious for about a year that Elon Musk's
political activities have a bearing on his businesses, and but this,
of course is an acknowledgment of that. And also, I
guess tim as you're kind of hinting, maybe a suggestion
(16:54):
that Musk has plans to re enter the four although
he's he's sort of said as much on Twitter, you know,
a week ago, and he launched the America Party, all.
Speaker 3 (17:02):
Right, But does this take it to if he's putting
this language in the tender offer for SpaceX, I mean,
does it kind of make it even more formal or official?
I mean, does it take it to another level?
Speaker 7 (17:16):
I mean, we saw these risk factors. I'm less familiar
with them as they apply to private marketing fundraising, but
of course they do show up in public market fundraisings
as well, you know, on quarterly reports, annual reports. I
just had a quick peek at the last Tesla earnings
release back in April. It had two new risk factors,
(17:36):
one related to essentially perceptions about the stability of the
management team kind of a wordy way of saying negative
stories about our CEO and another about tariffs and.
Speaker 4 (17:47):
Hosts of other things.
Speaker 7 (17:48):
So, I mean, I think this is more an acknowledgment
of something that is that Musk himself has talked about,
and this is not I mean, maybe this in some ways,
I guess this is confirmation that people inside of SpaceX
are aware that Elon Musk has discussed very recently plans
to continue his political journey, and this is a reflection
(18:11):
of that.
Speaker 2 (18:11):
But how that journey could look might be a lot
different than what that journey was over the last year
or so, given thus all out oh absolutely that he's
had with President Trump. Do you think it would take
the form of a new political party in supporting candidates
perhaps Democrats and Republicans who maybe want to slash the deficit.
Speaker 4 (18:30):
Well, we've talked about this a lot.
Speaker 7 (18:31):
We've talked about this here Simon, also on the Elon
Ink podcast. I think there's a I think there are
reasons to be somewhat skeptical of a political party in
the formal sense, like another effort to start like a
reform party or some true alternative. I think the idea
of Elon Musk somehow trying to formalize this political movement,
you know, in the same way that the Tea Party
(18:52):
is not an actual political party, it's like a constituency
of voters. You could imagine something like that. And what
must said is, you know, or hinted at, at the
very least, is a plan to back certain candidates in
the Senate and in Congress and then try to use
that to be, you know, as a sort of point
of leverage in negotiations over over bills and so on.
(19:16):
And I think, you know, there's something to be said
for that, right if he if he were able to say,
peel a few Republican Senat or House votes away like
that would give him more leverage over Trump than he
has now. There are also reasons why this could could
backfire spectacularly.
Speaker 3 (19:32):
All right, let's just remind everybody, as Max has been
reminding us that you know, he has talked about, you know,
kind of staying exposed to politics or staying in politics.
We're talking about Elon muskinback. Here's what he had to
say on May thirtieth from the Oval Office.
Speaker 8 (19:46):
Well, I expect to continue to provide advice at whatever
the president would like advice and helps you if he
I mean, yeah, it's I expect to remain a friend
and an advisor, and certainly if there's any President wants
me to do, I'm at the President Service.
Speaker 5 (20:05):
All right.
Speaker 3 (20:05):
Again, that was Elon Musk there with Donald Trump, the
President of the United States, back on May thirtieth. So Max,
if we read something like this, I mean, who knows
is it going to be?
Speaker 2 (20:16):
What was that the day with the black guy? I
just I just wanted to that was parenting Mishap.
Speaker 4 (20:22):
Yeah. Sorry.
Speaker 2 (20:23):
The reason I asked is because you were on our
program yesterday, that old big take. It's the cover of
Bloomberg BusinessWeek. The issue is on my desk, right, and
this is all about this.
Speaker 7 (20:31):
This is like the financial filing equivalent of a black guy, right,
an acknowledgment that this that the that there is risk
here and risk for his companies. I mean, just now,
as we're talking about this, Musk has been tweeting sort
of semi taunting, uh, the Trump administration over reports around
the Golden Dome, reports that the Defense Department my look
(20:53):
for alternatives to SpaceX. So he's obviously moving into a
sort of different position and relative to the Trump administration.
I'd say it's kind of similar to the one he
had with the Biden administration, although of course Musk's politics
have changed quite a lot since then.
Speaker 3 (21:10):
Yeah, I guess that's what I was curious, Like, you know,
is it that he's gonna go back and become buddy
again or like, we just don't like in what form,
or is he kind of like this and just figuring
out a different involvement.
Speaker 4 (21:23):
And well, I mean, I.
Speaker 7 (21:24):
Think Musks has carved out an identity that puts him further,
that puts him to the right of President Trump on
a whole bunch of issues. You know, you brought up
the deficit. But of course he talks all the time
about you know, identity politics, about about sort of cultural issues,
always uh, you know, talking to taking a more or
(21:45):
less right wing position, and that's kind of where his
fandom is. And that that to the extent that he
has a political platform, I'd expect it to be, you know,
a right wing platform, further to the right than the
Republican Party for sure. But of course there's also an
element of self and right where a lot of his
positions coincide with the interests of his companies. His companies,
as I've said a bunch of times on this program,
(22:06):
and others, you know, are are either heavily regulated by
the US government or dependent on government contracts. So it's
going to be my guess, and my supposition would be
some combination of Musk's you know, own political interests and
fixations along with you know, self interested policies. So you
could imagine very conservative on cultural issues perhaps, but probably
(22:28):
like a little bit less conservative on the question of
funding you know, green technology companies and so on, because
of course that's what Tesla is to some extent.
Speaker 6 (22:35):
We'll see.
Speaker 3 (22:36):
I don't know, yeah, day by day.
Speaker 2 (22:38):
Hey, this is a great story though, Dana Hall, Lauren Grush,
I'd love those SpaceX warning investors that Elon Musk could
return to US politics Max before we let you go?
Is this more the lawyers covering themselves than it is
an indication that Musk is going to have a new adventure.
Speaker 7 (22:52):
I like it, Yeah, I mean, I think more or less,
And I think anytime you see something like this in
a filing, obviously, lawyers as much as Musk has a
state view that is not super positive about lawyers. My
assumption here is that you know this is this is people,
the lawyers and investor relations types trying to cover thea.
Speaker 3 (23:11):
He signed off on it, of course, right, yeah, so
he's all in on this as well.
Speaker 6 (23:15):
Shares a tesla.
Speaker 3 (23:15):
By the way, they're up about one point eight percent.
So one of our metrics on this, hey be ready,
have your pager or whatever the heck ready because we.
Speaker 4 (23:24):
May nice I know, I know, the max signal.
Speaker 3 (23:27):
Your starlink up and running, because we may reach out
to you again.
Speaker 4 (23:31):
Of course.
Speaker 3 (23:31):
That is Bloomberg Business Weeks Senior reporter Max Chafkin. He's
co host of the Everybody's Business and Elon Inc podcasts
and the author of The Contrarian.
Speaker 1 (23:41):
This is the Bloomberg Business Week Daily podcast. Listen live
each weekday starting at two pm Eastern on Applecarplay and
Android Auto with the Bloomberg Business App. You can also
listen live on Amazon Alexa from our flagship New York station,
Just say Alexa play Bloomberg eleven thirty.
Speaker 3 (23:59):
Our next guest certainly familiar to our Bloomberg audience and
has to take all of these big macro factors into
account when thinking about the financial markets and figuring out
what might be the possible impact. Great to have with
us Monica Garrish, she's executive director, head of US Policy
for Morgan's Stanley Wealth Management right here in studio. Good
to have you here. There is a lot coming at
(24:20):
investors and strategists to trying to figure out our way
forward when there's still a lot of unknows. So I
am curious, first of all, with the pressure on Fedcher J. Powell,
do you believe he could step down early?
Speaker 9 (24:33):
I think it's up to him right the decision. There's
no rule that says like he can't. In our view,
we do think that he's likely to see the term
out is only eight more months, right, So this is
important to keep at the forefront of this narrative. It's
also important, I think, to Vissent and others to have
stability within treasury markets. So that is a critical factor
(24:54):
in all of this visit.
Speaker 3 (24:55):
So why does this Treasury secretary though sometimes seem to
put pressure on Fedcher.
Speaker 9 (25:00):
Well, that's because you have a president that's looking for
a lower ten year rate. You know his background. You
got to remember he's a real estate guy, and having
you know, more combinative lending policies is right in line
with that.
Speaker 3 (25:14):
So, but the Treasury Secretary is no stranger to Wall
Street and understanding the importance of the FED chair, I mean,
I mean for him alone, I think it's kind of interesting,
or is it?
Speaker 9 (25:25):
I mean, which is why I think I want to
agree with you and then and that it is interesting,
But he's important. And then he was a big voice
of reason when it came to the initial tariff announcements
for example, right he came in, he essentially coached the
president through, especially when treasury markets became unstable. So you
have to remember that this is also something that is
(25:47):
still top of mind for him. So I think what
he's trying to do is balance policy priorities. But the
president wants versus what is good for the markets.
Speaker 2 (25:54):
In your view, what is more important to the markets
an independent reserve or clear trade policy, independent federal reserve?
Speaker 9 (26:02):
I would say, right, as far as being able to
work with the committee, right and actually you know, come
up with the decision on the dot flot right of
where they're going.
Speaker 2 (26:10):
Would you say that independence has been threatened over the
last few months by the president.
Speaker 9 (26:14):
I wouldn't say it's been threatened. You're what you're looking
at as a President who continues to voice his personal opinions,
Powell has continued to do his job right the way
that you know he feels is the correct, you know
order right in an independent fashion. You have the Supreme
Court case that essentially created a carve out for the
federal reserves specifically so for further you know, adjudication if necessary.
(26:38):
So I don't think this is a one and done,
but I would really like to change the conversation to
the tariff piece because even though I think that having
you know, a stable FED is maybe more important for
the economy at least from a market's perspective, if we're
thinking about a terriffts that's going to have a huge
impact longer term, potentially on the inflationary piece, which ties
(26:58):
in to that interest rate are And.
Speaker 3 (27:00):
Don't hate me because I want to go back there,
because can the FED chair and the FED and the
FOMC really determine the right policy before knowing exactly what
all the tariffs and trade you know what I mean?
Like until they know the specifics on the tariffs that
are going to be imposed, Like, can they really determine
the right policy and are they smarter to say, let's
(27:21):
hold off a bit a bit because if they're not
as onerous and growth picks up and inflation picks up, right,
they don't want to cut rates raise rates, right, that
would be maybe more problematic perhaps for a market, right.
Speaker 9 (27:34):
That you were just I just want to say, you know,
in here in this discussion, you were talking about this
desire to hold rates low. I think that if you're
looking at the FED, they're in a homeostasis right now
because of all these factors.
Speaker 7 (27:47):
Right.
Speaker 9 (27:47):
The data hasn't led them completely to a place where
we have core economic weakness. We're seeing some initials so
you know, soppening in that and some of the data.
We have to see how that all pans out. We
have to wait till August first to get all of the.
Speaker 2 (28:01):
Tariff news in so on that would you say that
why would you say the tariffs haven't necessarily been inflationary
at this point? Whereas three months ago in our studio,
Guests after guests was saying, just wait for to see
the inflationary effects of this.
Speaker 4 (28:16):
It hasn't happened.
Speaker 9 (28:17):
So you had pull forward and demand, right, you had
so fliers ordering ahead of time, you had a full
inventory restock. What we're seeing is that inventories are starting
to fall off as soon as those new orders come in.
Right at that higher level, that can be inflationary. Right,
It's going to be costs shared both with the company, right,
the business and the consumer. The other thing I want
(28:39):
to note is that the dollar is actually down about
ten percent from the beginning of the year. What that
means on the import front is it weaker dollar means
you are paying higher import costs. Doesn't matter what the
average effective rate is, your import costs are now higher
on a nominal basis. So again, that is also inflationary,
which is why I think I think it is you know,
(29:00):
a suit of the FED to hold off and see
where the data takes them.
Speaker 4 (29:04):
HM.
Speaker 3 (29:05):
So net net do all of this in terms of
what the longer term impact? Do you have a good
feel about? I don't know, you know, I feel like
we go from day to day in terms of what
comes at White House, which is fair and probably accurate,
But I'm just curious do you have a better feel
of Like, by the end of the year, Yeah, there'll
be some higher tariffs, but maybe not so onerous, and
(29:26):
you know, we'll start to see growth Quebec Like how
are you kind of gaming this out?
Speaker 9 (29:29):
So you're gonna have a baseline of ten percent on
no matter country, right, on any country that you don't
have a fund, just a lot higher than what it was, right,
a lot higher, right, So at least three times higher.
So if we're looking at the average effective rate right now,
it's about twelve to fifteen, depending on how you're counting.
You know, if you look at the most recent deal,
I think with the Philippines, right, that's a nineteen percent
tariff just off of the twenty. So while we're seeing
(29:51):
some capitulation right and some negotiating downward, we could be
at some of the same recivirocal levels that we saw
on Liberation Day. I think that would be a surprise
to the markets. You might get some interim volatility and response,
but then it becomes an idiosyncratic risk and sorting through
which sectors and industries can be most impacted.
Speaker 3 (30:10):
Yeah, I mean yeah, it's just there's as you say, right,
each market, each country, each industry. It's really specific, and
so there's a lot of detail in terms of figuring
out the impact. Monica, thank you so much, really appreciate you.
Monica Garrish, she is executive director, head of US Policy
at Morgan's Stanley Wealth Management, joining us here in studios.
Speaker 1 (30:28):
Live weekday afternoons from two to fiveys. During that listen
on Applecarplay and Android Atto with the Bloomberg Business app,
or watch us live on YouTube Mac. How about you
let me drive?
Speaker 2 (30:41):
Oh no, no, no no, this is not a toy, honey.
Speaker 4 (30:46):
Please, how do the gravel?
Speaker 6 (30:49):
Let's wat I want to drive.
Speaker 10 (30:50):
It's a good question time.
Speaker 4 (30:57):
This is the drive to the clothes. Give me a thing.
Speaker 1 (31:00):
We'll try run down on Bloomberg Radio.
Speaker 3 (31:03):
All right, TikTok, everybody, About eighteen minutes to go intil
we wrap up the trade on this Tuesday, July twenty second,
Carol Master Tim Steneveek here in our Bloomberg Interactive Brokers studio,
looking at probably another record for the S and P
five hundred if we continue at this level, sixty three fourteen,
up about just shy of nine points one hundred and
ninety two points higher on the Dow Jones Industrial average.
(31:24):
We've seen big tech under some pressure today ahead of
big tech earnings getting underway. We'll get a couple of
big ones tomorrow after the closed Nastak one hundred and
ten right now, down about ninety two points off our
best and worst levels of the session.
Speaker 2 (31:37):
Let's see what Leo Kelly has to say about all this.
He's founder and CEO of Verden's Capital Advisors, more than
four billion dollars in assets under management. He joins us
from Hunt Valley, Maryland this afternoon.
Speaker 6 (31:50):
Are we we're going to kind of a weird place?
Speaker 2 (31:53):
I think, and I think Carol agreed.
Speaker 3 (31:55):
We're feeling kind of weird.
Speaker 6 (31:56):
We're feeling a.
Speaker 4 (31:56):
Little weird because I can to tell you we.
Speaker 2 (31:58):
Got the crypto market doing its thing, four trillion dollars
in assets as of last week, bitcoin around a record
new record close two hundred and twenty thousand dollars per bitcoin.
The meme stocks are meaning to their meaning. It's a
little crazy.
Speaker 7 (32:13):
Yeah, yeah.
Speaker 2 (32:14):
Tariffs are on the horizon here and those are going
to hit on August first unless something changes. What am
I missing here?
Speaker 10 (32:23):
Well, you're not missing that. It's weird. It is, and
it has been really for a few months.
Speaker 4 (32:32):
Right.
Speaker 10 (32:32):
So April second comes along and we have the tariff tantrum,
which was shocking in of itself. I mean, imagine for
a minute being surprised that Donald Trump is going to
pull a hard line to negotiate with that should be
expected not to be surprised by it. And so we
have this dramatic impact in the market, which is immediately
(32:57):
turns around and we make new highs.
Speaker 6 (33:00):
I think the tariff thing gets done.
Speaker 10 (33:03):
What I think people have to do is take a
step back and ask the question, what's important right now?
Speaker 6 (33:09):
What is it we should really be focused on.
Speaker 10 (33:12):
Should we be focused on whether the tariffs are fifteen
percent or twenty percent, or just that they're going.
Speaker 6 (33:16):
To get done and they will get done.
Speaker 10 (33:18):
Should we be focused on whether or not Jerome pal
is the next FED president, or whether or not rate
are going higher or lower? And if they go lower,
will that stimulate inflation? We think it will. And then
the intermediate term, you know, are we bullish or bearish? Well,
we're actually pretty bullish. There's a lot of investment coming
to the US. You know, we have earnings are starting
(33:42):
to gain a little momentum. AI productivity is going to
be significant, So there's reasons in the intermediate term to
be bullish. And there's a lot of volatility I think
headed in front of us in the fall. So yeah,
it's weird because it feels a little scary in the
very short run, and yet so many reasons to be
bullsh in the intermediate term.
Speaker 3 (34:02):
All Right, I just got to take a step back
because I think last time you were on with us
LEO was in mid February, So what a long, strange
trip it's been for us, Doc, So I'm just curious
you kind of walked us through some of the stuff
right in terms of the imposition of tariffs by President
Trump and backing off. What has the last five min
months been like for you and managing money for your
(34:23):
clients been interesting?
Speaker 10 (34:26):
So we have We've been holding cash and lieu of
long bonds, so.
Speaker 6 (34:29):
We've had cash.
Speaker 10 (34:31):
We have been extremely disciplined in rebouncing portfolios and not
letting the hot stuff go too far and get too
far out of kilter. So we had some dry powder,
and to be fair, over the last couple of years,
we've been waiting on volatility to put money to work.
So when April hit and we had this volatility and
(34:53):
this pullback, we were very active in that moment. And
so for us this year has been active. It's been
active from the standpoint of executing when the volatility has
hit and then maintaining discipline as we go through this.
And we're continuing to tell clients that more volatility is coming.
Speaker 6 (35:11):
But we're a little more bullish than we've been in
years past.
Speaker 10 (35:14):
And years past we've been a little hesitant to jump
into the volatile moments.
Speaker 6 (35:18):
We're not anymore.
Speaker 10 (35:19):
We're buying into volatility because we do think the intermediate
term looks pretty good.
Speaker 2 (35:23):
Well, you know, volatility, that was certainly something that we
saw in April, but things have been really calm over.
Speaker 6 (35:29):
The past few weeks.
Speaker 2 (35:31):
What how opportunities have you seen of late or are
you still sitting on the sidelines waiting for things to
move lower.
Speaker 10 (35:38):
Well, I would say this, there's a couple of things
that are going on over the last several weeks. One,
valuations are starting to get stretched again, especially in the
hot stocks, right the big tech stocks, And so I
think if the market continues to move higher at this pace,
our next move would be to reduce again because our
allocations will get out of we'll get out of sync.
(35:58):
But there's still areas in the market invest small mid
cap stocks still look pretty reasonable. International stocks made a
big move. You might recall here last year we were
big proponents of international stocks. We have been overweight. They've
made a big run this year, so we're a little
out of uh, you know again out of allocation on
that as well. And in the private markets, there's still
a lot of opportunity in private private equity investing, private credit.
(36:21):
There's some interesting energy plays out there. So we're always
active in the markets, just not always in the S
and P.
Speaker 6 (36:27):
Five hundred.
Speaker 3 (36:28):
Well that's always going to ask. I mean, you know,
increasingly everybody's been talking about the private markets, and so
you know, for folks who focus on the public markets,
you know, you do wonder what you're missing, or you
probably know what you're missing. Increasingly, are you, for your
client base, Leo more interested in the private markets that
that's where you can kind of really juice performance versus
(36:50):
the public markets.
Speaker 6 (36:52):
Well, we have been for a long time.
Speaker 10 (36:53):
So we've been we've been longtime players in the private markets,
and we continue to put a lot.
Speaker 6 (36:58):
Of focus around that.
Speaker 10 (36:59):
I think think there's some caution that we have to
warn folks about when they start looking at the private markets.
This democratizing private investments, especially with the new law that
was just passed that allows these private investments to go
in the form one ks and IRA accounts. There's going
to be folks chasing return and private investing is great
(37:22):
if you do a few things. One you have rigorous
due diligence. That's really important. Two you have to diversify
the portfolio over vintage and style. Too many times people
get excited about one or two hot dots and they
sound great and they have great past performance returns and
they'll throw a lot of money. Well, in the private
equity world, that could be very dangerous because it's ill
(37:43):
liquid and you get stuck for a long long time.
Speaker 6 (37:46):
It's not like a stock market that goes.
Speaker 10 (37:48):
Down and then pops right back up and you can
wait it out. With the private markets, you can be
sitting on that for a long time. So I think
folks have to be aware of the illoquate nature of it.
So you have to allocate correctly, not just how much
you put in private markets, but per deal and per vintage,
meaning what year you're buying into. It takes I mean,
(38:10):
Carol takes five to seven years to build a good
private equity portfolio. So it's just not something you can
just jump in and do.
Speaker 7 (38:18):
No.
Speaker 3 (38:19):
I totally understand and I mean, we've talked a lot
about private equity, the difficulty in kind of getting out
in the last few years, so people are trying to
figure out their portfolio.
Speaker 1 (38:28):
We got to run.
Speaker 4 (38:29):
Leo, good do you talk to with you again?
Speaker 3 (38:31):
Be well, we'll talk soon.
Speaker 6 (38:32):
Always always good to be with you guys.
Speaker 3 (38:34):
Thank you all right, Leo Kelly. He's founder and CEO
Verdon's Capital Advisors. They've got about four billion in assets
under management. Joining us once again from Maryland.
Speaker 1 (38:42):
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live weekday
afternoons from two to five pm Eastern on Bloomberg dot Com,
the iHeartRadio app, tune In, and the Bloomberg Business App.
You can also watch us live every weekday on YouTube
(39:03):
and always on the Bloomberg terminal.
Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Business
Weekdaily reporting from the magazine that helps global leaders stay
ahead with insight on the people, companies, and trends shaping
today's complex economy. Plus global business, finance and tech news
(00:23):
as it happens. The Bloomberg Business Week Daily Podcast with
Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2 (00:32):
Well, it does kind of feel like twenty twenty one,
at least some vibes. With memestocks and Crypto back in
the spotlight. Cole Shares more than doubled amid an influx
of mentions by retail traders on social media, with the
stock price soaring as much as one hundred and five
percent when the equity market opened today, and then there's
Open Door Technologies. It jumped as much as one hundred
and twenty percent yesterday. It extended its gravity defying rally
(00:55):
from last week. Investors continue to pile into the stock
that has found a sudden fandom among retail traders and
social media platforms.
Speaker 3 (01:02):
I mean, this is when that is certainly on our radar.
One of the reasons Open Door has been moving is
due to Eric Jackson He's the founder of Toronto based
hedge fund AMJ Capitol. He made a series of posts
on X encouraging buying, and Eric joins us from Toronto
on this Tuesday. Eric, good to have you here with us.
Do you, first of all, take issue with this being
(01:22):
open Door a meme stock?
Speaker 4 (01:25):
Yeah?
Speaker 5 (01:25):
I think Carol that all the meme stocks from twenty
twenty one were dumb businesses. I couldn't understand it at
the time why retail traders were getting so wrapped up
in AMC, GME, and BlackBerry. I think those were the
big three, Like those are all like walking dead businesses.
(01:46):
So when I got into open Door and then I
first started tweeting about it last Monday, it's hard to believe.
It feels like a cent where you ago like two
forty five. Like I got into it because this is
a real business and it's got a real platform that
it's built, and it's definitely fallen on hard times. That's
why the stocks down like ninety nine percent or whatever
(02:08):
it is from its all time highs. But I just
think that the market got overly pessimistic about it. And
I've seen this movie before with Carvana, Like that's one
of the one of my like you know, greatest.
Speaker 4 (02:21):
Heads on my wall. I guess you know from the
past is.
Speaker 5 (02:24):
That I got into Carvana early, not at three dollars
and fifty cents, but at fifteen dollars, and today it's
like close to four hundred. And I just see so
many similarities between these two businesses, and all, you know,
people just get overly a prisoner of the moment, pessimistic
about these companies, and everyone's negative Nelly, and everyone loves
(02:47):
to dance on the grave and say that these companies are.
Speaker 4 (02:49):
Circling the drain.
Speaker 5 (02:51):
Nobody would have believed that, you know, at three fifty
that Carbona was going back to four hundred. Nobody now
that at you know, it was seventy cents last Monday.
Now it's whatever it is three bucks today, that this
thing is I think going to eighty two bucks.
Speaker 2 (03:04):
Yeah, okay, so let's talk about that. It's two dollars
and eighty cents right now, down about twelve thirteen percent
as we speak, just on the day today, you have
a price target of eighty two dollars.
Speaker 6 (03:15):
That's pretty wild.
Speaker 2 (03:17):
Make your case to us on why you see it
moving that high.
Speaker 5 (03:19):
Well, I mean, I'll be even wilder, tim, I think
today it should be trading forty bucks. You know, it's
it's you know, like basically that if you look at
go back and look at Carvana. Okay, use this as
a comparison to open Door. Both of these companies they're
trying to e commerce SAFFI some niche that hasn't been
e commerce suffied before. For Carvana, it was buying and
(03:41):
selling use cars. For open doors, buying and selling homes.
It's a huge business obviously in both cases, a national
business where just having like one or two or three
percent market share nationally, you know, is talking billions and
billions of dollars and power because it's all so fragmented today, uh,
(04:03):
you know, with the dealers in the car industry and
with the agents you know, in the real estate industry.
And basically you need a lot of debt to run
both of these businesses.
Speaker 4 (04:14):
And so the problem that both of these.
Speaker 5 (04:16):
Businesses came you know, came upon is that although they
were flying high in the COVID you know, pre COVID
and then uh briefly post COVID era, when interest rates
were low, when Powell started raising rates, Uh, suddenly investors
got nervous, and these stocks crashed, and and the assumption
was that it's they're just gonna they're going to go under,
(04:36):
they're going to file for bankruptcy. So their price as
if they're going to go bankrupt. And I don't believe
that's true.
Speaker 4 (04:43):
Uh, Carvana.
Speaker 6 (04:44):
You know.
Speaker 5 (04:44):
In fact, I was on a podcast in June of
twenty twenty two with Josh Brown and Michael Back where
I call both like I said, both would turn around
Carvanah did and h open Door did it it was
dead wrong, Like it took a lot longer for them
to get to the point where they're about to turn profitable.
But they are about to turn profitable.
Speaker 3 (05:02):
So for open Door, do you expect to inject and
invest more money into it and then take a profit
or because it sounds like you've done the research, looked
at the business, maybe talk to the company that this
is more of a long term buy and hold strategy
for you.
Speaker 4 (05:21):
Which is it?
Speaker 5 (05:24):
Well, I've been fortunate to be early on a bunch
of companies, like I was like really early on Ali
Baba even you know back in twenty nine and ten,
when it was still a private company, it was value
to ten billion. I thought it was going to go
up Carvana, you know some other ones. Like what I've
learned Carol is that you know, like it's always hard
(05:46):
to not avoid the temptation of firing up the terminal
or turning on business TV and getting emotional about the
macro headlines of the day and get shaken out of
these positions. And sometimes when you know, these these companies
are pretty rare, you know that can truly hundred bag
or hundred acts, right, but like, you know, it's so
(06:07):
easy to get shaken out of these positions or like
in the case of Carvana, like I got like I said,
I got into it at fifteen, I would say I
got out of it. You know, the bulk of my
position in around like probably one thirty one forty one
fifty somewhere in there. And I'm thinking, oh, I'm so smart.
I mean ten x my money. Pat myself on the
back here, you know, and I know this company really well.
I still was optimistic about Carvana, and still i'm today.
Speaker 4 (06:29):
But I thought, like, I'm just going to trade it,
trade in and out.
Speaker 5 (06:33):
And you know the truth is, you don't make as
much money as is if you do nothing and just
let it sit there. So I'm not like jumping into
add more, Carol, but you know, because I want to
see how the things play out. But I you know,
I'm going to try to avoid that temptation and just
sit and do nothing.
Speaker 3 (06:49):
How much eighty can you give us an idea? How
much you have put into it? And is it all
your money? Is it investor money?
Speaker 4 (06:56):
Well, I run a fund, Carol, it's a it's a
it's a small fund.
Speaker 5 (07:00):
Frank with you guys, It's like I had a huge
I had a huge billionaire that basically it was like
a cornerstone investor for me in twenty sixteen seventeen when
I started EMJ Capital. And so I like the way
you think, Eric, you know, you look at companies differently.
You find these like little hidden jewel companies. How about
I give you some money to manage? And it did
and did great, like it was kind of like a
(07:20):
Kathy Wood type arc, like twenty seventeen up to you know,
probably February twenty twenty one was amazing, shot the lights out,
and then twenty one and twenty two I got crushed
and I didn't diversify my.
Speaker 4 (07:34):
What do you call it?
Speaker 5 (07:35):
Customer base you know, and so like ninety nine point
five percent of the capital and the fund was this
billionaire and he took it out, and which was this
is right, and you know's so friendly with him. But
I was sort of like left scrambling and trying to
figure out what to do, and so kept the lights on.
Pivoted to think building a team to build AI models,
(07:58):
you know, but you know have been it's been hit
and miss the last few years. And then it was
only like probably you know, three months ago that I
realized like, hey, you know we're doing you know, I
keep finding these companies.
Speaker 4 (08:08):
Why don't we just sort of go all in on that.
Speaker 5 (08:11):
Let's let's get the aim Allels totally focused on finding
these hundred baggers before the fact. So the remaining capital
we have, which a few million we put in, you know,
obviously we didn't put it all into open Door or anything.
Speaker 4 (08:22):
We have other positions. There's sort of like five key
positions that.
Speaker 5 (08:24):
I have right now, iron cipher mining, BTQ technologies, and ethereum.
Speaker 6 (08:30):
Those are the kind of the yeah big five.
Speaker 5 (08:32):
Fused on and uh, you know, we'll see where we go.
And you know, all I got is my reputation guys you.
Speaker 3 (08:38):
Know right, no, no, no, we get now.
Speaker 5 (08:40):
I've got I've got I've got you know, I've got
people you know whatever calling up or emailing and saying,
you know, this is great.
Speaker 4 (08:46):
You know, we want to get behind you, so we'll
see where it goes.
Speaker 2 (08:49):
It seems like a lot of folks on social media,
a lot of folks are on social media are getting
behind you. Have you talked to Tamath poly Hapatilla at
all about this? He is, you know, a had famous
involvement with open Door back when it went public.
Speaker 5 (09:02):
I haven't talked with him. I email, but I texted
it or not text, I tweeted him. I tweeted him
when you know, when this thing got started last week,
because obviously I think it would be a tremendous a
redemption arc.
Speaker 4 (09:15):
For Chamoth to come back into this stock.
Speaker 5 (09:19):
I don't think he has anything to be ashamed of
it being involved with with open Door to begin with,
or any of the co founder like Keith or Boy
is a guy who kind of you know, was wrote
the business plan originally. I think he's like one of
the smartest guys out there. Everybody was associated with this
company was you know, it was it was a good company.
You know, it's just a ma you know, the Macro
changed and the rates rose and stuff, and so I
(09:41):
don't think I don't think Tremoth has anything to be
ashamed of. But I think it would be amazing if
he came back in on the ride to eighty two,
which would double the all time highs which is previously
thirty nine bucks.
Speaker 2 (09:52):
Eric, forgive me for being blunt about this question, but
if you look at your Twitter feed, there's just a
it's like all open door. I mean, I had trouble.
You're spending a lot of time I'm retweeting and interacting
with folks on there, and I understand that's part of
the game these days, but maybe a critic could see
that and say, you're really trying to just pump this
stock up at this point, defend it on its fundamentals,
(10:12):
and convince people that this is not, you know, for
lack of a better term, pumping it up and then selling.
Speaker 4 (10:20):
I don't know what to tell you, guys.
Speaker 5 (10:21):
I mean, unfollow me, tim if I'm bugging you, mute
in or block me.
Speaker 4 (10:26):
And I'd say that to anybody else.
Speaker 5 (10:29):
I think anybody who knows me knows I'm not a
pumper or whatever I have been.
Speaker 4 (10:34):
Obviously, I've been inundated, called a pump and dumper, a grifter.
Jim Kramer said this was a parlay yesterday. I don't
know what that means.
Speaker 5 (10:43):
You could explain it to me, you know whatever I mean.
I mean, people are you know, they're not familiar with
the Open Door story. So whatever they want to sit
back behind their anonymous Twitter feeds and cast dis versions.
Speaker 4 (10:58):
I don't care.
Speaker 5 (10:59):
I'm here to make I don't have I got to
feed my family. I got to grow this business. I
got to do well for my investors. And if people
want to take shots whatever, you know, you know, I
just don't have time for it. I really love the
community that we've built. I mean, it's it's amazing. This morning,
I was retweeting all these people from you know, you
name it, Turkey, Korea, Japan and Africa, Nigeria, Brazil, I mean,
(11:24):
everyone around the world, and they're all in on Open Door.
Speaker 6 (11:27):
Yeah, you know, I don't know.
Speaker 4 (11:28):
That it's going at eighty two. I don't know. I
don't know.
Speaker 5 (11:30):
Crystal Ball, I was, you know, I don't know, you know,
I might be wrong. I was wrong for many many
years about open door. But I don't think I'm wrong
right now. I think now's the time this thing is
turning and you can either get in make a lot
of money or not. And I got people already telling
me how much money they've made and it's life changing
and all this that's fantastic.
Speaker 4 (11:50):
I mean, it doesn't doesn't help me, but it not
be for that. He was a community Eric, you did sea,
we learned together.
Speaker 3 (11:56):
No, I hear you. You said you're hoping to hold
on to it, like that's your plan. But I mean
if all of a sudden the stock took a downturn,
I mean it's a two dollars eighty percent stock, so
I'm not quite sure what kind of downturn. But is
there something that you would quickly change your thoughts or
you're going to ride it even if it rides down
a lot.
Speaker 4 (12:17):
I can't say I'm going to ride it forever, Carol.
Speaker 3 (12:20):
I mean not foreverbody. I mean, if it went down
fifty percent, would you stay with it?
Speaker 4 (12:27):
I think it's less about the percentage drop.
Speaker 5 (12:29):
I mean there's obviously going to be volatility, especially in
the early days of these of these kinds of names
and you know, they report rings in a couple of weeks,
so you know, if it's a terrible report, I mean
the thing would you know, would would have a negative
reaction to the to the downside and then reverse to
the upside if it was good news.
Speaker 4 (12:46):
I think there it is going to be profitable, and I.
Speaker 5 (12:48):
Think it's going to be the start of a string
of profitable quarters, which is what.
Speaker 4 (12:51):
Needs to happen for this thing to get up to
eighty two.
Speaker 5 (12:54):
But you know, one thing that's different about oupen Doors,
like there is more diverse.
Speaker 4 (13:00):
Opinion about management.
Speaker 5 (13:01):
I think with Carvana, Like obviously everybody on Twitter and
Wall Street hated it, but if you talk to people
that actually knew the business, and I think people really
admired the CEO, Ernie Garcia and the management team, and
they those guys bought a lot of stock when Carvana
was low, right before it bottomed. Nobody's done that here
at open Door, which is the norm for most of
(13:22):
these I mean most times these insiders, you know, they
just don't.
Speaker 4 (13:25):
Brian Armstrong from Coinbase, you never bought a share from
the time he went public at four hundred down to
thirty eight back up again. Yeah, sales zone by house
in La.
Speaker 5 (13:34):
So, but there's more controversy about the management here at
Open Door TEMP. Not to cut you off, you know,
some people think Carrie Wheeler, who's the CEO, is great
and some people don't. And so if I discovered three
months from now, the gosh, I don't know about her.
I mean, you know, one thing I might think about
is like, what's the chance of an activist coming in here?
Which I think is very high, So that might keep
(13:56):
me in. But if I concluded, like the management's terrible,
I can't standard anymore, then.
Speaker 4 (14:02):
Obviously I have to exit. I don't think that's going
to be the case.
Speaker 2 (14:05):
Eric, Before we let you go, other stocks that you
are buying right now that you're holding right now, what
are people missing when? What are you getting earlier today?
Speaker 4 (14:16):
Tim hot off the presses. I tweeted this out already,
So this.
Speaker 5 (14:19):
Is I bought some iron ir e N and Cipher CifR.
Both of those are bitcoin miners, make a lot of
money from that, but they're more excitingly there.
Speaker 4 (14:31):
They've moved. They're kind of like a Core Scientific and
just you know Core.
Speaker 5 (14:34):
We've bought Core Scientific recently, but it was kind of
a lousy price for core. Scientific Iron and Cipher are
way bigger, have way more kind of energized gigawatts that
are coming online in the next year that somebody like
an Oracle or a Meta or you know, Google has
to do a deal with. So I like those, and
I like BTQ Technologies. BTQQF is a ticker. It's still
(14:55):
an no TC ticker. I bought it a twenty one
cents in December with like five bucks, so it's been
a thirty bagger for me so far. But I think
it's gonna meet the criteria and be hundred bagger when
it all said and done.
Speaker 2 (15:08):
All right, always looking for the diamonds in the rough,
no matter no matter how low the prices are. Hey, Eric,
appreciate you taking so much time with us this afternoon.
It's great to check back in with you. It's been
quite a few months, so we love it that you
took the time. Eric Jackson is the founder of the
Toronto based hedge fund E MJ.
Speaker 6 (15:25):
Capitol.
Speaker 2 (15:25):
I would never block him on Twitter. I still follow
you on Twitter. Yeah, check out his twitter feed too,
because he does share a lot of what he's working
on here as well.
Speaker 3 (15:33):
Yeah, pretty clear I'm pretty transparent and stuff out there.
Speaker 1 (15:37):
You're listening to the Bloomberg Business Week Daily podcast. Catch
us live weekday afternoons from two to five eas during
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (15:50):
Back to a headline that you mentioned just in the
last few minutes, Carol SpaceX says warrant investors that Elon
Musk could return to politics. Musk may serve in similar
roles to his previous position as senior advisor to President
Donald Trump, and devotes significant time and energy to such roles.
This according to documents, It's great to have back with us.
Bloomberg Business Week a senior reporter, Max Chafkin. Max is
(16:11):
the co host of the Everybody's Business in Elon Inc. Podcast,
also the author of the Concherrion Peter Tiel in Silicon
Valley's Pursuit of Power. He's here in studio with us.
Speaker 4 (16:20):
Expect to have you back in this as much as
we love it.
Speaker 2 (16:24):
I feel like you knew something here when you told
us that you know, never say never when it comes
to Elon Musk and staying out of politics.
Speaker 7 (16:31):
I mean this is one of these things, where in
any investors learning this from the risk factor statement of
the prospectus is a little bit behind the curve. It's
been pretty obvious for about a year that Elon Musk's
political activities have a bearing on his businesses, and but this,
of course is an acknowledgment of that. And also, I
guess tim as you're kind of hinting, maybe a suggestion
(16:54):
that Musk has plans to re enter the four although
he's he's sort of said as much on Twitter, you know,
a week ago, and he launched the America Party, all.
Speaker 3 (17:02):
Right, But does this take it to if he's putting
this language in the tender offer for SpaceX, I mean,
does it kind of make it even more formal or official?
I mean, does it take it to another level?
Speaker 7 (17:16):
I mean, we saw these risk factors. I'm less familiar
with them as they apply to private marketing fundraising, but
of course they do show up in public market fundraisings
as well, you know, on quarterly reports, annual reports. I
just had a quick peek at the last Tesla earnings
release back in April. It had two new risk factors,
(17:36):
one related to essentially perceptions about the stability of the
management team kind of a wordy way of saying negative
stories about our CEO and another about tariffs and.
Speaker 4 (17:47):
Hosts of other things.
Speaker 7 (17:48):
So, I mean, I think this is more an acknowledgment
of something that is that Musk himself has talked about,
and this is not I mean, maybe this in some ways,
I guess this is confirmation that people inside of SpaceX
are aware that Elon Musk has discussed very recently plans
to continue his political journey, and this is a reflection
(18:11):
of that.
Speaker 2 (18:11):
But how that journey could look might be a lot
different than what that journey was over the last year
or so, given thus all out oh absolutely that he's
had with President Trump. Do you think it would take
the form of a new political party in supporting candidates
perhaps Democrats and Republicans who maybe want to slash the deficit.
Speaker 4 (18:30):
Well, we've talked about this a lot.
Speaker 7 (18:31):
We've talked about this here Simon, also on the Elon
Ink podcast. I think there's a I think there are
reasons to be somewhat skeptical of a political party in
the formal sense, like another effort to start like a
reform party or some true alternative. I think the idea
of Elon Musk somehow trying to formalize this political movement,
you know, in the same way that the Tea Party
(18:52):
is not an actual political party, it's like a constituency
of voters. You could imagine something like that. And what
must said is, you know, or hinted at, at the
very least, is a plan to back certain candidates in
the Senate and in Congress and then try to use
that to be, you know, as a sort of point
of leverage in negotiations over over bills and so on.
(19:16):
And I think, you know, there's something to be said
for that, right if he if he were able to say,
peel a few Republican Senat or House votes away like
that would give him more leverage over Trump than he
has now. There are also reasons why this could could
backfire spectacularly.
Speaker 3 (19:32):
All right, let's just remind everybody, as Max has been
reminding us that you know, he has talked about, you know,
kind of staying exposed to politics or staying in politics.
We're talking about Elon muskinback. Here's what he had to
say on May thirtieth from the Oval Office.
Speaker 8 (19:46):
Well, I expect to continue to provide advice at whatever
the president would like advice and helps you if he
I mean, yeah, it's I expect to remain a friend
and an advisor, and certainly if there's any President wants
me to do, I'm at the President Service.
Speaker 5 (20:05):
All right.
Speaker 3 (20:05):
Again, that was Elon Musk there with Donald Trump, the
President of the United States, back on May thirtieth. So Max,
if we read something like this, I mean, who knows
is it going to be?
Speaker 2 (20:16):
What was that the day with the black guy? I
just I just wanted to that was parenting Mishap.
Speaker 4 (20:22):
Yeah. Sorry.
Speaker 2 (20:23):
The reason I asked is because you were on our
program yesterday, that old big take. It's the cover of
Bloomberg BusinessWeek. The issue is on my desk, right, and
this is all about this.
Speaker 7 (20:31):
This is like the financial filing equivalent of a black guy, right,
an acknowledgment that this that the that there is risk
here and risk for his companies. I mean, just now,
as we're talking about this, Musk has been tweeting sort
of semi taunting, uh, the Trump administration over reports around
the Golden Dome, reports that the Defense Department my look
(20:53):
for alternatives to SpaceX. So he's obviously moving into a
sort of different position and relative to the Trump administration.
I'd say it's kind of similar to the one he
had with the Biden administration, although of course Musk's politics
have changed quite a lot since then.
Speaker 3 (21:10):
Yeah, I guess that's what I was curious, Like, you know,
is it that he's gonna go back and become buddy
again or like, we just don't like in what form,
or is he kind of like this and just figuring
out a different involvement.
Speaker 4 (21:23):
And well, I mean, I.
Speaker 7 (21:24):
Think Musks has carved out an identity that puts him further,
that puts him to the right of President Trump on
a whole bunch of issues. You know, you brought up
the deficit. But of course he talks all the time
about you know, identity politics, about about sort of cultural issues,
always uh, you know, talking to taking a more or
(21:45):
less right wing position, and that's kind of where his
fandom is. And that that to the extent that he
has a political platform, I'd expect it to be, you know,
a right wing platform, further to the right than the
Republican Party for sure. But of course there's also an
element of self and right where a lot of his
positions coincide with the interests of his companies. His companies,
as I've said a bunch of times on this program,
(22:06):
and others, you know, are are either heavily regulated by
the US government or dependent on government contracts. So it's
going to be my guess, and my supposition would be
some combination of Musk's you know, own political interests and
fixations along with you know, self interested policies. So you
could imagine very conservative on cultural issues perhaps, but probably
(22:28):
like a little bit less conservative on the question of
funding you know, green technology companies and so on, because
of course that's what Tesla is to some extent.
Speaker 6 (22:35):
We'll see.
Speaker 3 (22:36):
I don't know, yeah, day by day.
Speaker 2 (22:38):
Hey, this is a great story though, Dana Hall, Lauren Grush,
I'd love those SpaceX warning investors that Elon Musk could
return to US politics Max before we let you go?
Is this more the lawyers covering themselves than it is
an indication that Musk is going to have a new adventure.
Speaker 7 (22:52):
I like it, Yeah, I mean, I think more or less,
And I think anytime you see something like this in
a filing, obviously, lawyers as much as Musk has a
state view that is not super positive about lawyers. My
assumption here is that you know this is this is people,
the lawyers and investor relations types trying to cover thea.
Speaker 3 (23:11):
He signed off on it, of course, right, yeah, so
he's all in on this as well.
Speaker 6 (23:15):
Shares a tesla.
Speaker 3 (23:15):
By the way, they're up about one point eight percent.
So one of our metrics on this, hey be ready,
have your pager or whatever the heck ready because we.
Speaker 4 (23:24):
May nice I know, I know, the max signal.
Speaker 3 (23:27):
Your starlink up and running, because we may reach out
to you again.
Speaker 4 (23:31):
Of course.
Speaker 3 (23:31):
That is Bloomberg Business Weeks Senior reporter Max Chafkin. He's
co host of the Everybody's Business and Elon Inc podcasts
and the author of The Contrarian.
Speaker 1 (23:41):
This is the Bloomberg Business Week Daily podcast. Listen live
each weekday starting at two pm Eastern on Applecarplay and
Android Auto with the Bloomberg Business App. You can also
listen live on Amazon Alexa from our flagship New York station,
Just say Alexa play Bloomberg eleven thirty.
Speaker 3 (23:59):
Our next guest certainly familiar to our Bloomberg audience and
has to take all of these big macro factors into
account when thinking about the financial markets and figuring out
what might be the possible impact. Great to have with
us Monica Garrish, she's executive director, head of US Policy
for Morgan's Stanley Wealth Management right here in studio. Good
to have you here. There is a lot coming at
(24:20):
investors and strategists to trying to figure out our way
forward when there's still a lot of unknows. So I
am curious, first of all, with the pressure on Fedcher J. Powell,
do you believe he could step down early?
Speaker 9 (24:33):
I think it's up to him right the decision. There's
no rule that says like he can't. In our view,
we do think that he's likely to see the term
out is only eight more months, right, So this is
important to keep at the forefront of this narrative. It's
also important, I think, to Vissent and others to have
stability within treasury markets. So that is a critical factor
(24:54):
in all of this visit.
Speaker 3 (24:55):
So why does this Treasury secretary though sometimes seem to
put pressure on Fedcher.
Speaker 9 (25:00):
Well, that's because you have a president that's looking for
a lower ten year rate. You know his background. You
got to remember he's a real estate guy, and having
you know, more combinative lending policies is right in line
with that.
Speaker 3 (25:14):
So, but the Treasury Secretary is no stranger to Wall
Street and understanding the importance of the FED chair, I mean,
I mean for him alone, I think it's kind of interesting,
or is it?
Speaker 9 (25:25):
I mean, which is why I think I want to
agree with you and then and that it is interesting,
But he's important. And then he was a big voice
of reason when it came to the initial tariff announcements
for example, right he came in, he essentially coached the
president through, especially when treasury markets became unstable. So you
have to remember that this is also something that is
(25:47):
still top of mind for him. So I think what
he's trying to do is balance policy priorities. But the
president wants versus what is good for the markets.
Speaker 2 (25:54):
In your view, what is more important to the markets
an independent reserve or clear trade policy, independent federal reserve?
Speaker 9 (26:02):
I would say, right, as far as being able to
work with the committee, right and actually you know, come
up with the decision on the dot flot right of
where they're going.
Speaker 2 (26:10):
Would you say that independence has been threatened over the
last few months by the president.
Speaker 9 (26:14):
I wouldn't say it's been threatened. You're what you're looking
at as a President who continues to voice his personal opinions,
Powell has continued to do his job right the way
that you know he feels is the correct, you know
order right in an independent fashion. You have the Supreme
Court case that essentially created a carve out for the
federal reserves specifically so for further you know, adjudication if necessary.
(26:38):
So I don't think this is a one and done,
but I would really like to change the conversation to
the tariff piece because even though I think that having
you know, a stable FED is maybe more important for
the economy at least from a market's perspective, if we're
thinking about a terriffts that's going to have a huge
impact longer term, potentially on the inflationary piece, which ties
(26:58):
in to that interest rate are And.
Speaker 3 (27:00):
Don't hate me because I want to go back there,
because can the FED chair and the FED and the
FOMC really determine the right policy before knowing exactly what
all the tariffs and trade you know what I mean?
Like until they know the specifics on the tariffs that
are going to be imposed, Like, can they really determine
the right policy and are they smarter to say, let's
(27:21):
hold off a bit a bit because if they're not
as onerous and growth picks up and inflation picks up, right,
they don't want to cut rates raise rates, right, that
would be maybe more problematic perhaps for a market, right.
Speaker 9 (27:34):
That you were just I just want to say, you know,
in here in this discussion, you were talking about this
desire to hold rates low. I think that if you're
looking at the FED, they're in a homeostasis right now
because of all these factors.
Speaker 7 (27:47):
Right.
Speaker 9 (27:47):
The data hasn't led them completely to a place where
we have core economic weakness. We're seeing some initials so
you know, soppening in that and some of the data.
We have to see how that all pans out. We
have to wait till August first to get all of the.
Speaker 2 (28:01):
Tariff news in so on that would you say that
why would you say the tariffs haven't necessarily been inflationary
at this point? Whereas three months ago in our studio,
Guests after guests was saying, just wait for to see
the inflationary effects of this.
Speaker 4 (28:16):
It hasn't happened.
Speaker 9 (28:17):
So you had pull forward and demand, right, you had
so fliers ordering ahead of time, you had a full
inventory restock. What we're seeing is that inventories are starting
to fall off as soon as those new orders come in.
Right at that higher level, that can be inflationary. Right,
It's going to be costs shared both with the company, right,
the business and the consumer. The other thing I want
(28:39):
to note is that the dollar is actually down about
ten percent from the beginning of the year. What that
means on the import front is it weaker dollar means
you are paying higher import costs. Doesn't matter what the
average effective rate is, your import costs are now higher
on a nominal basis. So again, that is also inflationary,
which is why I think I think it is you know,
(29:00):
a suit of the FED to hold off and see
where the data takes them.
Speaker 4 (29:04):
HM.
Speaker 3 (29:05):
So net net do all of this in terms of
what the longer term impact? Do you have a good
feel about? I don't know, you know, I feel like
we go from day to day in terms of what
comes at White House, which is fair and probably accurate,
But I'm just curious do you have a better feel
of Like, by the end of the year, Yeah, there'll
be some higher tariffs, but maybe not so onerous, and
(29:26):
you know, we'll start to see growth Quebec Like how
are you kind of gaming this out?
Speaker 9 (29:29):
So you're gonna have a baseline of ten percent on
no matter country, right, on any country that you don't
have a fund, just a lot higher than what it was, right,
a lot higher, right, So at least three times higher.
So if we're looking at the average effective rate right now,
it's about twelve to fifteen, depending on how you're counting.
You know, if you look at the most recent deal,
I think with the Philippines, right, that's a nineteen percent
tariff just off of the twenty. So while we're seeing
(29:51):
some capitulation right and some negotiating downward, we could be
at some of the same recivirocal levels that we saw
on Liberation Day. I think that would be a surprise
to the markets. You might get some interim volatility and response,
but then it becomes an idiosyncratic risk and sorting through
which sectors and industries can be most impacted.
Speaker 3 (30:10):
Yeah, I mean yeah, it's just there's as you say, right,
each market, each country, each industry. It's really specific, and
so there's a lot of detail in terms of figuring
out the impact. Monica, thank you so much, really appreciate you.
Monica Garrish, she is executive director, head of US Policy
at Morgan's Stanley Wealth Management, joining us here in studios.
Speaker 1 (30:28):
Live weekday afternoons from two to fiveys. During that listen
on Applecarplay and Android Atto with the Bloomberg Business app,
or watch us live on YouTube Mac. How about you
let me drive?
Speaker 2 (30:41):
Oh no, no, no no, this is not a toy, honey.
Speaker 4 (30:46):
Please, how do the gravel?
Speaker 6 (30:49):
Let's wat I want to drive.
Speaker 10 (30:50):
It's a good question time.
Speaker 4 (30:57):
This is the drive to the clothes. Give me a thing.
Speaker 1 (31:00):
We'll try run down on Bloomberg Radio.
Speaker 3 (31:03):
All right, TikTok, everybody, About eighteen minutes to go intil
we wrap up the trade on this Tuesday, July twenty second,
Carol Master Tim Steneveek here in our Bloomberg Interactive Brokers studio,
looking at probably another record for the S and P
five hundred if we continue at this level, sixty three fourteen,
up about just shy of nine points one hundred and
ninety two points higher on the Dow Jones Industrial average.
(31:24):
We've seen big tech under some pressure today ahead of
big tech earnings getting underway. We'll get a couple of
big ones tomorrow after the closed Nastak one hundred and
ten right now, down about ninety two points off our
best and worst levels of the session.
Speaker 2 (31:37):
Let's see what Leo Kelly has to say about all this.
He's founder and CEO of Verden's Capital Advisors, more than
four billion dollars in assets under management. He joins us
from Hunt Valley, Maryland this afternoon.
Speaker 6 (31:50):
Are we we're going to kind of a weird place?
Speaker 2 (31:53):
I think, and I think Carol agreed.
Speaker 3 (31:55):
We're feeling kind of weird.
Speaker 6 (31:56):
We're feeling a.
Speaker 4 (31:56):
Little weird because I can to tell you we.
Speaker 2 (31:58):
Got the crypto market doing its thing, four trillion dollars
in assets as of last week, bitcoin around a record
new record close two hundred and twenty thousand dollars per bitcoin.
The meme stocks are meaning to their meaning. It's a
little crazy.
Speaker 7 (32:13):
Yeah, yeah.
Speaker 2 (32:14):
Tariffs are on the horizon here and those are going
to hit on August first unless something changes. What am
I missing here?
Speaker 10 (32:23):
Well, you're not missing that. It's weird. It is, and
it has been really for a few months.
Speaker 4 (32:32):
Right.
Speaker 10 (32:32):
So April second comes along and we have the tariff tantrum,
which was shocking in of itself. I mean, imagine for
a minute being surprised that Donald Trump is going to
pull a hard line to negotiate with that should be
expected not to be surprised by it. And so we
have this dramatic impact in the market, which is immediately
(32:57):
turns around and we make new highs.
Speaker 6 (33:00):
I think the tariff thing gets done.
Speaker 10 (33:03):
What I think people have to do is take a
step back and ask the question, what's important right now?
Speaker 6 (33:09):
What is it we should really be focused on.
Speaker 10 (33:12):
Should we be focused on whether the tariffs are fifteen
percent or twenty percent, or just that they're going.
Speaker 6 (33:16):
To get done and they will get done.
Speaker 10 (33:18):
Should we be focused on whether or not Jerome pal
is the next FED president, or whether or not rate
are going higher or lower? And if they go lower,
will that stimulate inflation? We think it will. And then
the intermediate term, you know, are we bullish or bearish? Well,
we're actually pretty bullish. There's a lot of investment coming
to the US. You know, we have earnings are starting
(33:42):
to gain a little momentum. AI productivity is going to
be significant, So there's reasons in the intermediate term to
be bullish. And there's a lot of volatility I think
headed in front of us in the fall. So yeah,
it's weird because it feels a little scary in the
very short run, and yet so many reasons to be
bullsh in the intermediate term.
Speaker 3 (34:02):
All Right, I just got to take a step back
because I think last time you were on with us
LEO was in mid February, So what a long, strange
trip it's been for us, Doc, So I'm just curious
you kind of walked us through some of the stuff
right in terms of the imposition of tariffs by President
Trump and backing off. What has the last five min
months been like for you and managing money for your
(34:23):
clients been interesting?
Speaker 10 (34:26):
So we have We've been holding cash and lieu of
long bonds, so.
Speaker 6 (34:29):
We've had cash.
Speaker 10 (34:31):
We have been extremely disciplined in rebouncing portfolios and not
letting the hot stuff go too far and get too
far out of kilter. So we had some dry powder,
and to be fair, over the last couple of years,
we've been waiting on volatility to put money to work.
So when April hit and we had this volatility and
(34:53):
this pullback, we were very active in that moment. And
so for us this year has been active. It's been
active from the standpoint of executing when the volatility has
hit and then maintaining discipline as we go through this.
And we're continuing to tell clients that more volatility is coming.
Speaker 6 (35:11):
But we're a little more bullish than we've been in
years past.
Speaker 10 (35:14):
And years past we've been a little hesitant to jump
into the volatile moments.
Speaker 6 (35:18):
We're not anymore.
Speaker 10 (35:19):
We're buying into volatility because we do think the intermediate
term looks pretty good.
Speaker 2 (35:23):
Well, you know, volatility, that was certainly something that we
saw in April, but things have been really calm over.
Speaker 6 (35:29):
The past few weeks.
Speaker 2 (35:31):
What how opportunities have you seen of late or are
you still sitting on the sidelines waiting for things to
move lower.
Speaker 10 (35:38):
Well, I would say this, there's a couple of things
that are going on over the last several weeks. One,
valuations are starting to get stretched again, especially in the
hot stocks, right the big tech stocks, And so I
think if the market continues to move higher at this pace,
our next move would be to reduce again because our
allocations will get out of we'll get out of sync.
(35:58):
But there's still areas in the market invest small mid
cap stocks still look pretty reasonable. International stocks made a
big move. You might recall here last year we were
big proponents of international stocks. We have been overweight. They've
made a big run this year, so we're a little
out of uh, you know again out of allocation on
that as well. And in the private markets, there's still
a lot of opportunity in private private equity investing, private credit.
(36:21):
There's some interesting energy plays out there. So we're always
active in the markets, just not always in the S
and P.
Speaker 6 (36:27):
Five hundred.
Speaker 3 (36:28):
Well that's always going to ask. I mean, you know,
increasingly everybody's been talking about the private markets, and so
you know, for folks who focus on the public markets,
you know, you do wonder what you're missing, or you
probably know what you're missing. Increasingly, are you, for your
client base, Leo more interested in the private markets that
that's where you can kind of really juice performance versus
(36:50):
the public markets.
Speaker 6 (36:52):
Well, we have been for a long time.
Speaker 10 (36:53):
So we've been we've been longtime players in the private markets,
and we continue to put a lot.
Speaker 6 (36:58):
Of focus around that.
Speaker 10 (36:59):
I think think there's some caution that we have to
warn folks about when they start looking at the private markets.
This democratizing private investments, especially with the new law that
was just passed that allows these private investments to go
in the form one ks and IRA accounts. There's going
to be folks chasing return and private investing is great
(37:22):
if you do a few things. One you have rigorous
due diligence. That's really important. Two you have to diversify
the portfolio over vintage and style. Too many times people
get excited about one or two hot dots and they
sound great and they have great past performance returns and
they'll throw a lot of money. Well, in the private
equity world, that could be very dangerous because it's ill
(37:43):
liquid and you get stuck for a long long time.
Speaker 6 (37:46):
It's not like a stock market that goes.
Speaker 10 (37:48):
Down and then pops right back up and you can
wait it out. With the private markets, you can be
sitting on that for a long time. So I think
folks have to be aware of the illoquate nature of it.
So you have to allocate correctly, not just how much
you put in private markets, but per deal and per vintage,
meaning what year you're buying into. It takes I mean,
(38:10):
Carol takes five to seven years to build a good
private equity portfolio. So it's just not something you can
just jump in and do.
Speaker 7 (38:18):
No.
Speaker 3 (38:19):
I totally understand and I mean, we've talked a lot
about private equity, the difficulty in kind of getting out
in the last few years, so people are trying to
figure out their portfolio.
Speaker 1 (38:28):
We got to run.
Speaker 4 (38:29):
Leo, good do you talk to with you again?
Speaker 3 (38:31):
Be well, we'll talk soon.
Speaker 6 (38:32):
Always always good to be with you guys.
Speaker 3 (38:34):
Thank you all right, Leo Kelly. He's founder and CEO
Verdon's Capital Advisors. They've got about four billion in assets
under management. Joining us once again from Maryland.
Speaker 1 (38:42):
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
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(39:03):
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