October 8, 2025 • 40 mins
Please text and tell us what you like
The U.S. government's unprecedented move to take a 10% ownership stake in Intel raises serious questions about the appropriate boundaries between government and private enterprise in American capitalism.
• Government equity ownership in Intel marks a significant shift in U.S. industrial policy
• Argument for equity stakes: if taxpayers provide subsidies, they should share in potential upside
• Critical questions about who manages these positions and how decisions will be made
• No clear infrastructure exists for handling government equity positions
• Concerns about political influence affecting corporate governance decisions
• Government's ability to pick "winners and losers" in the market is questionable
• Intel's struggles against competitors like AMD and NVIDIA make it an unusual choice
• Potential need for a sovereign wealth fund structure to properly manage government investments
• Investors should carefully consider implications of government ownership when evaluating stocks
• Fundamental question: is government ownership a sign of strength or weakness?
Please share your thoughts with us and let us know what other topics you'd like us to cover on future episodes. We appreciate your support through likes, shares, and feedback as we help you on your journey to financial wellness.
Straight Talk for All - Nonsense for None
Please check out our other podcasts:
https://skepticsguidetoinvesting.buzzsprout.com
Disclaimer - These podcasts are not intended as investment advice. Individuals please consult your own investment, tax and legal advisors. They provide these insights for educational purposes only.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Steve Davenport (00:02):
Hello everyone and welcome Today here with Clem
Miller.
We want to talk about more ofthe issues around in the market
today, and I don't know how Clemfelt, but I was shocked to see
that we were going to starthaving the government invest in
Intel by owning shares, Thoseshares were going to be held by
(00:26):
the US government.
It feels like to me it'soverstepped and overreach to the
extreme, but Clem is a bigsupporter of these ideas of
getting more equitized andhaving more equity risk, so he
probably has a good reason whywe should be doing this now.
(00:47):
What's your rationale forhaving the Trump administration
buy shares or get shares inIntel?
Clem Miller (00:55):
Okay.
So in my mind there's only onereason for this.
Okay, and then there's a lot ofbad reasons, but there's one
good reason, and the one goodreason is that, in the past
there have been subsidies,either direct ones or indirect
ones to companies, usually inthe form of either grants or
(01:21):
long term loans or long-termloans.
And if you've got a situationwhere the government is
providing subsidies, why nothave the government take an
equity stake?
Having the government take anequity stake, or at least a
warrant, the right to have anequity stake seems to be a good
(01:58):
thing to have, as I mean, inother words, the government
would actually, in a sense,buying something and the company
the company in the future canalways, if it has the cashflow,
can always make a corporatedecision to buy that
shareholding back, uh, but butyou know why not?
You know, when the government'sproviding a subsidy, why not
(02:21):
have the government actually own, uh, that company as something
that it's buying, right?
I mean buying shares in acompany as a condition for
receiving shares, as a conditionfor providing a subsidy that it
(02:42):
would otherwise already apply?
So in the Intel case, you know,there's this 10% shareholding,
but that was the subsidy hadalready been approved under the
CHIPS Act, under the Bidenadministration.
So rather than providing grantsor loans, it's providing a.
(03:04):
You know it's buying an equitystake, so I see nothing wrong
with that.
Steve Davenport (03:09):
Now, Okay, Clem , I got to stop you because your
assumption is here that you'regiving the money to them anyway.
So every time the governmentoffers you some type of support,
how many shares are going to gowith the next time there's a
(03:30):
government support offer, andhow many people are not going to
take it, just like Ford didn'ttake it in the GM case?
When GM was bailed out, Fordsaid no, and you know,
ultimately, is the governmentpicking winners and losers here?
I mean is that what we want?
Do we think they have theability that portfolio managers
(03:52):
don't in selecting who thebetter companies are, because
isn't that how the worldcapitalist system works?
Or is it a government going tobe the new one who decides?
Clem Miller (04:02):
Well, you know, there's really two levels of
question here, Steve.
One is should the governmenthave bailed out Intel in the
first place?
And then what does thegovernment receive?
I don't think necessarily thatthe government should have
bailed out Intel in the firstplace, Because Intel hasn't been
(04:24):
the greatest of companies overthe years, it hasn't really.
It's sort of lagged and it's.
Steve Davenport (04:31):
But they've given them credibility by
showing them this, you know, andit's great right.
Clem Miller (04:38):
Well, I mean, is it credibility in Intel to provide
a government subsidy like this?
I don't know.
Probably not.
I think having to what?
Steve Davenport (04:54):
would a risk-adjusted return been
requested by the private marketsif the government wasn't going
to give this?
Clem Miller (05:04):
Well, first of all, I don't know, I have not seen
any evidence.
Maybe some exists, but Ihaven't seen any evidence that
the government's decision tobring Intel into the CHIPS Act.
I don't see any evidence thatthat's actually boosted intel's
(05:26):
share price for shareholders.
Maybe it exists, but Icertainly haven't.
I certainly haven't seen thatright and I have.
Steve Davenport (05:34):
there's a lack of decline similar to a rise
caused by it.
I mean, it was a, it was acompany that was, that was in
kind of dire straits, wasn't it?
Clem Miller (05:46):
Yeah, I mean, at best you could call it a laggard
, right?
I mean in an industry where yousee a lot of winners, right?
I?
Steve Davenport (05:58):
mean they decided to not go into the nanos
, right, and they focused moreon the PC slash server market,
not the you know what I'll callcutting edge AI market.
Yeah, yeah, and so the PCmarket and that market became
commoditized, with theircompetitor, amd, taking most of
(06:19):
the market share right.
Clem Miller (06:21):
I believe that's the case, but I mean the.
The point is, I mean even amdis much more advanced than Intel
.
Steve Davenport (06:30):
So they've done a better job in the same space.
My point is that they're not inthe nvidia right, I mean I
don't know that it makes senseto.
Clem Miller (06:38):
I don't think that the initial decision to provide
bailout support for Intel wasthe right decision, correct.
And so that was the initialdecision.
Now, once you've made thedecision to do that, what should
the government receive inreturn?
(06:59):
I think an equity holding is isnot a bad, it's not a bad idea
to have that, because then youknow, because then you know
you're you're getting somethingfor your money, and not just you
know, not just repayment overtime, right, correct?
Steve Davenport (07:20):
There's two areas that I'd like to talk
about.
Correct.
There's two areas that I'd liketo talk about.
One is OK if these are a partof the world and they help make
the markets more efficient forthe US to be a part of any
upside.
If this is helpful, great.
Does it belong in a sovereignwealth fund and not in the
(07:49):
general treasury?
Treasury, I mean where?
Who is going to be sitting overthis position, saying maybe now
is when we sell 5, 10, 15, 20of it?
Who's who's monitoring andwho's managing it?
Club?
Clem Miller (07:56):
I don't think that's, uh actually really clear
.
Who's going to be doing that,at least, uh, on a longer basis?
I mean, you know, one wouldpresume treasury, but we don't
have, we don't have a sovereignwealth fund yet, right?
Steve Davenport (08:11):
no, but I guess that's.
My question is it seems like wejumped into own equities
without really having thestructure around it to manage
the equity.
My am I being too?
Clem Miller (08:21):
you know, critical um, are you being?
Yes, I know I'm skeptical.
No, I think you're.
I think it's appropriate to beas skeptical as you are.
Uh, because we don't reallyhave guidelines or rules around
(08:42):
when we might sell it right uh,just think in general, owning
the stock, the stock, what do we?
Do with the dividends.
Yeah, how do we know.
How do we know even what theappropriate maximum shareholding
is.
You know, is 10% appropriate?
Steve Davenport (09:00):
I don't know.
I think the next question I'mgoing to ask you is you know it
goes.
The next step, which is whatabout voting corporate actions,
is is is Trump going to vote onthe corporate action and give it
to Caesar, you know, at thegladiators and say can we?
Give it the thumbs down?
Or is he going to look onInstagram and see how many likes
(09:23):
Intel gets and then make it abuy more Good?
Clem Miller (09:29):
question.
And even on top of that, whathappens if you get a new?
What if the political pendulumswings again and you get back to
an administration that favorsgreen and renewable energy and
(09:50):
net zero and all of that?
You know what.
What's going to happen then?
Is the government going toapply environmental, renewable
energy, green principles todeciding how they're going to
vote the equity shares?
You can bet that that wouldhappen.
Steve Davenport (10:09):
I agree.
I'm not even getting into whathappens in the next
administration.
I'd just like to know duringthis one, you know what I mean.
We've got three more years.
Tell me what.
What is the?
You know what is the process?
I mean I I assume that somebodyin the white house before they
said we're gonna going to buy orwe're going to get this many
(10:30):
shares, Somebody said, OK, who'sopening up the brokerage
account and where does it go?
And who, you know?
Do we take the?
You know we can get electronicdelivery of those shares if
somebody has a brokerage account, but whose name do we put on it
?
Do we put Scott DeSent's nameon it?
(10:51):
He's a good trader and we leaveit up to Scott.
Clem Miller (10:56):
I recently saw a note.
I don't know if this is true ornot, but apparently DeSent's
hedge fund lost 90% over thecourse of a few years.
Lost 90% over the course of afew years.
You know, maybe that wasfiction, but I did see it, and
so that struck me as being veryodd.
Steve Davenport (11:23):
I don't know how one can lose 90% over
several years.
I mean, I'm asking thesequestions in a completely
sarcastic and, right, I don'tknow, I don't think this was
well thought out.
Right, I don't think this is acomplete solution.
I don't think this is even asolution that you know we want
to.
I understand that thegovernment owns some crypto
(11:46):
because criminal operationsseized it and therefore they
held it, but my impression was,anytime the government did that,
once there's a resolution ofthe ownership and the
criminality, it gets sold.
I don't know, just likeeverything else, right, these
are car.
You sell the car.
You don't hold the car becauseyou think it's a good model and
(12:08):
it's going to appreciate.
Clem Miller (12:10):
Now, during the great financial crisis, there
were equity positions that weretaken, but those were very
quickly sold off.
Steve Davenport (12:23):
Right.
I mean, it feels to me likethis is something we have a sort
of a you know, an understandingof, but most of those assets
that are seized are alldepreciating assets and this is
an appreciating asset.
So is that the difference?
(12:43):
I mean, stocks are appreciatingassets for a while, but they,
you know, you might have to livewith a five year correction
before the new foundry getsbuilt, and then they start to
generate revenues from the newbusiness, right, right, and the
thing is is that governmentoperates under its own set of
accounting rules.
Clem Miller (13:02):
It doesn't operate according to GARP rules Okay, or
GAP rules, I should say.
It doesn't operate according toGAP.
It operates according to itsARPrules Okay, or GAP rules, I
should say.
It doesn't operate according toGAP.
It operates according to itsown rules.
Steve Davenport (13:14):
So when it loses money, does it need to
report that?
Clem Miller (13:18):
It doesn't have audited financial statements.
Steve Davenport (13:21):
Okay, so it's just like the property and the
buildings.
It doesn't really matter whattheir value is, because they're
not for sale.
They're a part of thegovernment, Right?
Clem Miller (13:31):
I mean they can sell them and they do sell them,
but it doesn't really matter,right?
I think the government takes.
You don't invest in thegovernment, right?
So there's no need for them tohave GAAP financial statements.
Steve Davenport (13:45):
Correct, but they do have some type of a
process for closing down oneoffice building renovating
another building.
Clem Miller (13:54):
Yeah, the gsa, uh general services administration,
does that kind of right is this?
Steve Davenport (13:59):
what is that where we should put these intel
really?
You said scott percent lost 90,so we can can't let Scott have
the keys to Intel shares.
Clem Miller (14:14):
This, steve, the thing you said that I a thousand
percent, 10,000 percent agreewith is that this is not really
well thought out In a financialcrisis.
That's one thing, because youknow very well that it's the
Treasury normal businesses maybethat are, you know, undergoing
(14:36):
some difficulty or where there'sa policy preference, like chips
or solar or whatnot.
Solar, you know, in past yearsyou know who runs that, right,
(15:08):
is it?
You know it's not clear whoactually should run that.
You know Treasury doesn't sound.
I mean Treasury may be wherethe assets are housed, but you
know, maybe this is CommerceDepartment, right, I mean, it's
well, that's what.
Steve Davenport (15:20):
I think that somebody looked at it and said
hey, this is, you know, this isultimately going to be good for
us.
Hey, this is ultimately goingto be good for us.
Us taking on this ownership isa good thing because it allows
us access to influence over apart of the market that we're
supporting through our fundingof these founders.
(15:43):
I assume that somebody islooking at this saying it's a
good idea, and you said it'slike you're getting something
extra for free.
That's fine, but once itbecomes an asset of the
government, my question is wedon't have experience managing
equity assets.
Therefore, we need to thinkabout the infrastructure and
(16:07):
maybe create a sovereign wealthfund.
We need to think about theinfrastructure and maybe create
a sovereign wealth fund, andmaybe, you know, maybe this all
comes together in the end of,you know, in the fourth year of
the term, when we get asovereign wealth fund.
But my question is what goes onLike?
When do we start owning theshares, who owns them, where are
they kept and how are theymanaged?
This, I don't think that's a,you know, 10% of what is 10% of
(16:32):
Intel.
Now, what are they about?
$40 billion.
Clem Miller (16:37):
I don't have it right in front of me, so let's
say it's $4 billion.
Steve Davenport (16:41):
It's only $4 billion in assets.
We can just say that's like theforest land in California and
we can just ignore it, right.
Or we could say why don't wereally try to make sure that the
setup and this is in place tobenefit others and to benefit
the companies and figure it out?
(17:01):
I just think we're rippingalong in these different
pathways with stablecoin andBitcoin and private equity and
401ks and there's just not whatI would call a thorough and
clear analysis that explains thewhat, the why and the who of
(17:25):
willing to impact.
Is that too much to ask one,you think?
Clem Miller (17:33):
I think you know, for government to be effective,
it needs to be able to know whatit's doing right.
And I don't know, I don't knowthat.
I don't know that it actuallyknows what it's doing.
When it comes to owning sharesof companies, yeah, I can see,
you know, in the heat of a of afinancial emergency, I can see
(17:58):
bailing out banks, insurancecompanies on a temporary basis,
basis treasury or Fed holdingthose shares and then selling
them pretty quickly coming outof it.
I can see that, but on anongoing basis, to have a
(18:19):
sovereign wealth fund.
You know this isn't what youknow sovereign wealth funds.
You know this is not asovereign wealth.
I mean what we're envisioninghere.
You might call it a sovereignwealth fund, but it's not a
sovereign wealth fund, I agree.
Steve Davenport (18:37):
It's a repository toward which I take
this asset.
Clem Miller (18:40):
I'm not saying that we're— A sovereign wealth fund
is supposed to invest thewindfall proceeds of, you know,
basically, natural resources isusually the case.
You know Norway, you know Texas, alaska, saudi Arabia, kuwait,
(19:01):
uae, qatar.
All those are places that havesovereign wealth funds that were
funded by oil and natural gasrevenues, excess ones, and where
the sovereign wealth funds are,you know, at least supposedly
for the benefit of the people,for the future residents of
(19:21):
those countries, after oil andgas runs out.
That's the general situation ofa sovereign wealth fund.
So, while they may call it,while some may call what the US
would do a sovereign wealth fund, it's really, like you said,
it's a repository of assets, ofa Hodgepodge.
(19:45):
Hodgepodge of assets that theUS government might acquire, or
positions that the US governmentmight acquire.
Steve Davenport (19:54):
So let's go back to what is our purpose here
to help investors and thinkabout this.
So, if we look at thissituation, intel as a holding
might not be in your portfolio,might not be in my portfolio, be
in your portfolio, might not bein my portfolio does the
government owning 10 make thatasset change from a hold, a buy
(20:16):
or a sell?
Um, because of the involvementwith the government and the
government now being a 10shareholder, is it?
Is it better?
Is it worse?
Is it the exact same?
Clem Miller (20:29):
I think it's.
It doesn't make me I mean Idon't hold it, I don't hold
intel now and it didn't.
You know, the purchase of, orthe the acquisition of those
shares uh doesn't make me wantto buy it anymore.
Uh, that doesn't want to makeme buy it when I don't hold it
(20:50):
already, right, so that's the.
I mean I didn't even want tolook into it because of that,
right, I mean that tells me.
Steve Davenport (20:59):
I think that you and I realized there was
some overarching kind of youdon't get something for free and
now they're paying with equity.
And how much they pay withequity ultimately could be
judged as excessive, or maybeit's a deal, but I don't know
how much that would cost Intelon their own to get the loan for
(21:22):
that foundry.
Given their balance sheet, Ithink it would have been a
higher risk loan.
So therefore I would say itwould have been in the you know
four or five percent higher.
Therefore, if we say it's fouror five percent higher on four
billion dollars or whatever theloan is, you know it can come,
(21:42):
you can come up with a valuation.
But I guess what I'm saying ishow do we look at it in terms
and perspective of as aninvestor?
And I would say that it'ssomewhat of a positive because
it creates a government interestin not seeing that equity go to
zero.
Clem Miller (22:03):
Let me raise a scenario.
Steve Davenport (22:07):
We have two good scenarios.
Clem Miller (22:09):
We're skeptical but we're not cynical Non-zero
probability scenario, but maybeclose to zero.
So the government owns 10% of acompany.
Let's say the government owns10% of a bunch of companies,
right?
So Congress passes a law andsays, uh, from now on,
(22:31):
government shareholdings, uh arehigher in the capital structure
than private shareholdings inuh in those companies.
So let's say there's abankruptcy, uh, creditors get
paid off first, lenders get paidoff first.
What's left goes to theshareholders.
(22:55):
Oftentimes in bankruptcies,shareholders get wiped out.
So what happens if there's agovernment shareholding and it
has priority in the capitalstructure is that the government
might get paid out 50% on theirshareholding and it has
priority in the capitalstructure is that the government
might get paid out 50 percentright on their shareholding and
the rest of us would get paidout zero.
So I see that as a as apossibility that government
(23:20):
might, might pass such a law andif companies you know to
protect their privateshareholders, you know they
might pay back those loans,those government loans.
But what if they can't pay backthose government loans and
there's a bankruptcy?
Then you could get you know,you could get you know your,
(23:42):
your shareholding go down tozero.
Nevertheless, I see what you'resaying is that you know, if
government's putting in somemoney, you know, maybe the
government has some incentive totry to keep that company going.
You know, I don't.
Steve Davenport (23:56):
I wouldn't really necessarily count on that
, Um, but I'm not sure whatability government has in this
space because they've neverreally operated in the spits.
Yeah, so that's the way I wouldlook at it is, I'm from
Missouri, show me.
I mean, I think that for thisspace, just like the 401k space
(24:17):
I think it's TVD, you know to bedetermined, I hope that it's
put in the right context, it'ssupervised and there is some.
You know, what are we going todo with the dividends?
No-transcript.
(24:49):
Do we use the cash for, youknow, future aid to the company?
I look at the dividend andthink you know that's 10% of
your dividend is going to the USgovernment, in addition to
whatever you pay in taxes andother.
You know, does it help you Ifyou're in town when you're doing
your taxes?
(25:09):
I don't know.
I mean, it depends on how welook at this position, but I
guess I'd say it feels to melike Clem.
We need to take a step and stepback, and I love the idea of
capitalism and government andthe proper separation of church
(25:31):
and state.
I've always thought that youshould be able to operate Tell
me what the rules are, tell mewhere the highways are, tell me
how I should function in termsof the environment, but then I
operate as a businessman and Ido whatever I think is right.
But then I operate as abusinessman and I do whatever I
think is right.
And now it feels like they gota loan and I don't know if the
(25:53):
loan ever excluded the idea ofgiving warrants and equity, and
Trump asked for it and he got it, and so maybe we've all been
making a mistake by not askingfor more.
Glenn, will you give me amillion dollars?
Clem Miller (26:17):
I promise I'll pay it back.
I think I'd rather have equityin you.
Steve Davenport (26:21):
Holy shit, what kind of a relationship is this?
You're not only a usury.
You want to own me, I'm anyway.
Um, I don't know.
What do you think of theinvestment issues for this, or
for people who are listening?
What have they learned or what?
(26:41):
What do they need to know aboutthis in terms of, hey, when I
see the government on myposition in my company, I should
feel better, worse, the same,or I don't know how to feel
because I don't understand thestructure in which they're gonna
be in well, I think that rightnow, when you look at companies
(27:09):
that the government is bailingout, I think you have to put
your skeptical hat on and saywhy were they bad in the first
place?
Clem Miller (27:21):
Why do they need to be bailed out, these companies?
That's the key question, rightwhy do they need to be bailed?
Steve Davenport (27:29):
out.
Clem Miller (27:29):
There's a cyclicality that causes over
investment in times of froth andunder investment following now,
if you get into a, you know, abroader situation where lots and
lots of companies, includingsuccessful companies, are
required to take governmentequity infusions, then we're
(27:55):
into a little bit of a differentworld where there's, you know,
government is then becomeshighly involved in the operation
of different industries.
For example, what if thegovernment takes equity shares
in defense stocks?
Then is the government evenmore involved in the defense
(28:19):
industry than it normally is.
So I think that's a differentworld if it becomes a broader
issue.
Steve Davenport (28:32):
The idea here is really just to prepare I like
to think of.
What we're trying to do is toprepare investors for some of
the eventualities that mightcome with this ownership by the
government.
And if you owned Intel becauseyou got a low cost basis and you
bought it in the late 80s, it'sprobably still up a lot and you
(28:52):
probably have to make somewhatof a decision as to whether this
10% stake is significant to you.
If your position in Intel isn'tsignificant, then it's not
really an issue.
But I think for some people wholive near Intel or grew up and
work there, it is an issue and Ithink that my one piece of
(29:15):
advice would I'm not sure thegovernment is any better at
managing positions in Intel thanit is in managing roads,
defense, oh yeah, and otherthings.
So therefore I would saygovernment involvement in my
equity.
I'm a purist and I would sayit's a negative.
And I understand they may havegiven them money that would have
(29:39):
cost them more if they went tothe market on their own, which
tells me they're getting abenefit and they're paying for
it with their equity.
But I still look at things andsay equity ownership of
companies in the US marketplaceis not the role of government.
The role of government is tocreate the environment so that
(30:00):
people can operate and succeed,and it's not to take an interest
and then have an obligation tofuture interest if the company
has problems.
And I also think it needs to befully understood how we're
going to manage that position.
If we get a 20% profit after ayear, do we take 20% off?
(30:21):
I think that if this wereconsidered in light of all the
things that we're trying to doas a nation, it's up there.
I would like to see some of ourenergy profits and energy lease
revenue go directly to asovereign wealth fund.
That, to me, would offer the USbetter chances of success in
(30:45):
the future, because we'rethinking about the next
generation.
I think right now it goes intothe general fund and, like most
things, the general fund justgets piled up and you don't
really see what the money thatcame from energy really led to.
So I would like to see us dosomething with the sovereign
wealth fund.
(31:06):
I think we're a big enoughnation and we have enough ideas
that we need something to helppeople who are operating in
these spaces where energy mightdrop away.
South Dakota, having a greattime.
The, the, the, the, the, theshale and the production there
has brought jobs and prosperity,but will it last forever?
(31:29):
Of course not, of course not.
And so, therefore, a goodthinking, you know a wise
government would say, yeah,let's take a certain percentage
of that you know profit thegovernment makes from that lease
and put it towards somethingthat has a long-term benefit to
the people of South Dakota.
I don't think it's, you know,but is this really where we're
(31:55):
focused?
You know, with the Ukraine andwith Israel and Gaza gets, you
know, and Russia putting youknow, drones into Poland.
Is this what we're focused on?
Clem Miller (32:10):
You know, making sure stablecoin gets into 401ks
and making sure we havegovernment ownership, because
they took a loan there'scertainly a lot more important
things out there than stablecoinand uh and 10 shareholdings and
intel and so on, correct?
Steve Davenport (32:24):
so all I'd say to people is take it in, try to
understand it.
But if you decide to sell yourIntel, I'm not sure that you
know we're necessarily the factthat we made this ownership
decision.
I'm not sure it's a.
It's a going to the moon, asthey.
(32:44):
As they say, now that thesupport of government is there,
intel is unstoppable.
Clem Miller (32:53):
There's definitely no guarantee of that, and I
think it's less likely that itwould have a surge like that.
Steve Davenport (32:58):
Correct, but I'm trying to be balanced here,
clement.
I'm not simply a go-go equityguy like you are.
That said, yes, the governmentshould own their shares.
We have to think in a biggerstructure.
Government look, look thecommon good, clem, not just the
good for Clem's portfolio, right.
Clem Miller (33:18):
Good Government.
You know, the differencebetween what our government
would be doing and an actualsovereign wealth fund is that
sovereign wealth funds try tomake a profit.
Right, they try to generatereturns for the taxpayer and I
don't know that buying thingslike a 10 percent shareholding
(33:38):
in Intel or a 10 percentshareholding in defense stocks I
don't know that that stuff isrelated to generating a profit.
I think it's more trying toachieve strategic goals.
Steve Davenport (33:57):
Okay, I mean, if it's a strategic position,
then we should hold it more thanfive years, not talk about
doing anything with it.
I just want to know theguardrails.
If there are no guardrails,tell me that Well, right now
they're going to go off themountain and it doesn't matter
what they build on the mountain.
Clem Miller (34:16):
Yeah, right now there are no guardrails because
we've got an administration thatis frenetic, right in terms of
its policymaking and doingthings that are being challenged
in the courts and where wereally haven't gotten a lot of
(34:41):
insight from the Supreme Courtas to where some of those
guardrails are.
I guess we'll see in a fewmonths maybe two, three, four
months what the Supreme Courtsays on tariffs.
But about government ownership,who knows right?
Who knows?
Steve Davenport (35:03):
I mean, I think it's an exciting.
It's a good topic for podcasts,because I think there's so much
unknown that we can go downthese paths and think about you
know, well, maybe it becomes abroader policy and we think
about it more holistically.
We think about how governmentand business can work to help
each other, and not necessarilyin a controlling or negative,
(35:27):
you know, manner.
Right, I think there's a lot ofthings we should be thinking
about in terms of, you know,immigration and how many of
these people who are gettingPhDs and masters, how are they
influencing our labor force?
And if we were to grant themmore access to citizenship, you
know, would our STEM and ourbusinesses be better off?
(35:49):
I think that there's a lot ofissues like this, that our
growth rate is determined bywhat issues we focus on.
And is this going to change thegrowth rate in the movements of
our US technology industry?
I don't know.
I think it's kind of helpingout a hobbled company.
I agree A hobbled company isn'tlikely to suddenly become a
(36:13):
leading company just because ofthis loan.
I'd love to believe it could.
I'd love to believe ittransitions and turns itself
around, and companies do turnthemselves.
So I'm not ruling it out, butit just feels to me like, as you
said, overreach, and again I'dput a TBD on this.
(36:34):
It's to be determined whetherwe'll you know.
So do you have any finalcomments?
Clem Miller (36:41):
No, yeah, just one last final comment.
Yeah, just one last finalcomment, and that is you know,
for a long time I worked for agovernment agency that called
the Export-Import Bank, thatprovided financing for US
exporters doing businessoverseas, and I guess you could
say in that context that we diddo a bit of picking of winners
(37:05):
and losers and, you know, wewere receptive to applications
from companies who really neededthe business and I think that
the mission of the export importbank was a good one.
Uh, but I also know that theyou know that the export import
bank was really not in theposition to pick winners and
(37:28):
losers.
So I just don't think,extrapolating from my experience
there, I just don't think thegovernment has the capability to
effectively pick winners andlosers.
I just don't see it.
Steve Davenport (37:45):
Yeah, and like most things, we squabble and we
argue, but I think at ARC weagree on most things.
I agree with your statementsand I agree that this just
doesn't feel right.
Could it be right?
Absolutely, it could all workout well, but somebody has to be
on the contrary to make sure wequestion the right things so
(38:09):
that we ultimately put it in theright position to succeed for
the American people.
Ultimately.
That's what I want, that's whatGlenn wants, I think it's what
everyone wants, but we've got tosomehow analyze it in such a
way so that the right questionsare asked and the right
guardrails are put in, andhopefully that happens and
(38:30):
hopefully this Intel positiongoes from $4 billion to $40
billion and we're allbeneficiaries.
So I guess I'd say people enjoythe podcast.
We appreciate you listening, weappreciate your support,
support and we appreciate yourlikes and shares.
Please let us know how we cando better and what else we can
(38:53):
do to help you on your journeyto financial wellness.
Thanks everyone, thank you,bye-bye.
Hello everyone and welcome Today here with Clem
Miller.
We want to talk about more ofthe issues around in the market
today, and I don't know how Clemfelt, but I was shocked to see
that we were going to starthaving the government invest in
Intel by owning shares, Thoseshares were going to be held by
(00:26):
the US government.
It feels like to me it'soverstepped and overreach to the
extreme, but Clem is a bigsupporter of these ideas of
getting more equitized andhaving more equity risk, so he
probably has a good reason whywe should be doing this now.
(00:47):
What's your rationale forhaving the Trump administration
buy shares or get shares inIntel?
Clem Miller (00:55):
Okay.
So in my mind there's only onereason for this.
Okay, and then there's a lot ofbad reasons, but there's one
good reason, and the one goodreason is that, in the past
there have been subsidies,either direct ones or indirect
ones to companies, usually inthe form of either grants or
(01:21):
long term loans or long-termloans.
And if you've got a situationwhere the government is
providing subsidies, why nothave the government take an
equity stake?
Having the government take anequity stake, or at least a
warrant, the right to have anequity stake seems to be a good
(01:58):
thing to have, as I mean, inother words, the government
would actually, in a sense,buying something and the company
the company in the future canalways, if it has the cashflow,
can always make a corporatedecision to buy that
shareholding back, uh, but butyou know why not?
You know, when the government'sproviding a subsidy, why not
(02:21):
have the government actually own, uh, that company as something
that it's buying, right?
I mean buying shares in acompany as a condition for
receiving shares, as a conditionfor providing a subsidy that it
(02:42):
would otherwise already apply?
So in the Intel case, you know,there's this 10% shareholding,
but that was the subsidy hadalready been approved under the
CHIPS Act, under the Bidenadministration.
So rather than providing grantsor loans, it's providing a.
(03:04):
You know it's buying an equitystake, so I see nothing wrong
with that.
Steve Davenport (03:09):
Now, Okay, Clem , I got to stop you because your
assumption is here that you'regiving the money to them anyway.
So every time the governmentoffers you some type of support,
how many shares are going to gowith the next time there's a
(03:30):
government support offer, andhow many people are not going to
take it, just like Ford didn'ttake it in the GM case?
When GM was bailed out, Fordsaid no, and you know,
ultimately, is the governmentpicking winners and losers here?
I mean is that what we want?
Do we think they have theability that portfolio managers
(03:52):
don't in selecting who thebetter companies are, because
isn't that how the worldcapitalist system works?
Or is it a government going tobe the new one who decides?
Clem Miller (04:02):
Well, you know, there's really two levels of
question here, Steve.
One is should the governmenthave bailed out Intel in the
first place?
And then what does thegovernment receive?
I don't think necessarily thatthe government should have
bailed out Intel in the firstplace, Because Intel hasn't been
(04:24):
the greatest of companies overthe years, it hasn't really.
It's sort of lagged and it's.
Steve Davenport (04:31):
But they've given them credibility by
showing them this, you know, andit's great right.
Clem Miller (04:38):
Well, I mean, is it credibility in Intel to provide
a government subsidy like this?
I don't know.
Probably not.
I think having to what?
Steve Davenport (04:54):
would a risk-adjusted return been
requested by the private marketsif the government wasn't going
to give this?
Clem Miller (05:04):
Well, first of all, I don't know, I have not seen
any evidence.
Maybe some exists, but Ihaven't seen any evidence that
the government's decision tobring Intel into the CHIPS Act.
I don't see any evidence thatthat's actually boosted intel's
(05:26):
share price for shareholders.
Maybe it exists, but Icertainly haven't.
I certainly haven't seen thatright and I have.
Steve Davenport (05:34):
there's a lack of decline similar to a rise
caused by it.
I mean, it was a, it was acompany that was, that was in
kind of dire straits, wasn't it?
Clem Miller (05:46):
Yeah, I mean, at best you could call it a laggard
, right?
I mean in an industry where yousee a lot of winners, right?
I?
Steve Davenport (05:58):
mean they decided to not go into the nanos
, right, and they focused moreon the PC slash server market,
not the you know what I'll callcutting edge AI market.
Yeah, yeah, and so the PCmarket and that market became
commoditized, with theircompetitor, amd, taking most of
(06:19):
the market share right.
Clem Miller (06:21):
I believe that's the case, but I mean the.
The point is, I mean even amdis much more advanced than Intel
.
Steve Davenport (06:30):
So they've done a better job in the same space.
My point is that they're not inthe nvidia right, I mean I
don't know that it makes senseto.
Clem Miller (06:38):
I don't think that the initial decision to provide
bailout support for Intel wasthe right decision, correct.
And so that was the initialdecision.
Now, once you've made thedecision to do that, what should
the government receive inreturn?
(06:59):
I think an equity holding is isnot a bad, it's not a bad idea
to have that, because then youknow, because then you know
you're you're getting somethingfor your money, and not just you
know, not just repayment overtime, right, correct?
Steve Davenport (07:20):
There's two areas that I'd like to talk
about.
Correct.
There's two areas that I'd liketo talk about.
One is OK if these are a partof the world and they help make
the markets more efficient forthe US to be a part of any
upside.
If this is helpful, great.
Does it belong in a sovereignwealth fund and not in the
(07:49):
general treasury?
Treasury, I mean where?
Who is going to be sitting overthis position, saying maybe now
is when we sell 5, 10, 15, 20of it?
Who's who's monitoring andwho's managing it?
Club?
Clem Miller (07:56):
I don't think that's, uh actually really clear
.
Who's going to be doing that,at least, uh, on a longer basis?
I mean, you know, one wouldpresume treasury, but we don't
have, we don't have a sovereignwealth fund yet, right?
Steve Davenport (08:11):
no, but I guess that's.
My question is it seems like wejumped into own equities
without really having thestructure around it to manage
the equity.
My am I being too?
Clem Miller (08:21):
you know, critical um, are you being?
Yes, I know I'm skeptical.
No, I think you're.
I think it's appropriate to beas skeptical as you are.
Uh, because we don't reallyhave guidelines or rules around
(08:42):
when we might sell it right uh,just think in general, owning
the stock, the stock, what do we?
Do with the dividends.
Yeah, how do we know.
How do we know even what theappropriate maximum shareholding
is.
You know, is 10% appropriate?
Steve Davenport (09:00):
I don't know.
I think the next question I'mgoing to ask you is you know it
goes.
The next step, which is whatabout voting corporate actions,
is is is Trump going to vote onthe corporate action and give it
to Caesar, you know, at thegladiators and say can we?
Give it the thumbs down?
Or is he going to look onInstagram and see how many likes
(09:23):
Intel gets and then make it abuy more Good?
Clem Miller (09:29):
question.
And even on top of that, whathappens if you get a new?
What if the political pendulumswings again and you get back to
an administration that favorsgreen and renewable energy and
(09:50):
net zero and all of that?
You know what.
What's going to happen then?
Is the government going toapply environmental, renewable
energy, green principles todeciding how they're going to
vote the equity shares?
You can bet that that wouldhappen.
Steve Davenport (10:09):
I agree.
I'm not even getting into whathappens in the next
administration.
I'd just like to know duringthis one, you know what I mean.
We've got three more years.
Tell me what.
What is the?
You know what is the process?
I mean I I assume that somebodyin the white house before they
said we're gonna going to buy orwe're going to get this many
(10:30):
shares, Somebody said, OK, who'sopening up the brokerage
account and where does it go?
And who, you know?
Do we take the?
You know we can get electronicdelivery of those shares if
somebody has a brokerage account, but whose name do we put on it
?
Do we put Scott DeSent's nameon it?
(10:51):
He's a good trader and we leaveit up to Scott.
Clem Miller (10:56):
I recently saw a note.
I don't know if this is true ornot, but apparently DeSent's
hedge fund lost 90% over thecourse of a few years.
Lost 90% over the course of afew years.
You know, maybe that wasfiction, but I did see it, and
so that struck me as being veryodd.
Steve Davenport (11:23):
I don't know how one can lose 90% over
several years.
I mean, I'm asking thesequestions in a completely
sarcastic and, right, I don'tknow, I don't think this was
well thought out.
Right, I don't think this is acomplete solution.
I don't think this is even asolution that you know we want
to.
I understand that thegovernment owns some crypto
(11:46):
because criminal operationsseized it and therefore they
held it, but my impression was,anytime the government did that,
once there's a resolution ofthe ownership and the
criminality, it gets sold.
I don't know, just likeeverything else, right, these
are car.
You sell the car.
You don't hold the car becauseyou think it's a good model and
(12:08):
it's going to appreciate.
Clem Miller (12:10):
Now, during the great financial crisis, there
were equity positions that weretaken, but those were very
quickly sold off.
Steve Davenport (12:23):
Right.
I mean, it feels to me likethis is something we have a sort
of a you know, an understandingof, but most of those assets
that are seized are alldepreciating assets and this is
an appreciating asset.
So is that the difference?
(12:43):
I mean, stocks are appreciatingassets for a while, but they,
you know, you might have to livewith a five year correction
before the new foundry getsbuilt, and then they start to
generate revenues from the newbusiness, right, right, and the
thing is is that governmentoperates under its own set of
accounting rules.
Clem Miller (13:02):
It doesn't operate according to GARP rules Okay, or
GAP rules, I should say.
It doesn't operate according toGAP.
It operates according to itsARPrules Okay, or GAP rules, I
should say.
It doesn't operate according toGAP.
It operates according to itsown rules.
Steve Davenport (13:14):
So when it loses money, does it need to
report that?
Clem Miller (13:18):
It doesn't have audited financial statements.
Steve Davenport (13:21):
Okay, so it's just like the property and the
buildings.
It doesn't really matter whattheir value is, because they're
not for sale.
They're a part of thegovernment, Right?
Clem Miller (13:31):
I mean they can sell them and they do sell them,
but it doesn't really matter,right?
I think the government takes.
You don't invest in thegovernment, right?
So there's no need for them tohave GAAP financial statements.
Steve Davenport (13:45):
Correct, but they do have some type of a
process for closing down oneoffice building renovating
another building.
Clem Miller (13:54):
Yeah, the gsa, uh general services administration,
does that kind of right is this?
Steve Davenport (13:59):
what is that where we should put these intel
really?
You said scott percent lost 90,so we can can't let Scott have
the keys to Intel shares.
Clem Miller (14:14):
This, steve, the thing you said that I a thousand
percent, 10,000 percent agreewith is that this is not really
well thought out In a financialcrisis.
That's one thing, because youknow very well that it's the
Treasury normal businesses maybethat are, you know, undergoing
(14:36):
some difficulty or where there'sa policy preference, like chips
or solar or whatnot.
Solar, you know, in past yearsyou know who runs that, right,
(15:08):
is it?
You know it's not clear whoactually should run that.
You know Treasury doesn't sound.
I mean Treasury may be wherethe assets are housed, but you
know, maybe this is CommerceDepartment, right, I mean, it's
well, that's what.
Steve Davenport (15:20):
I think that somebody looked at it and said
hey, this is, you know, this isultimately going to be good for
us.
Hey, this is ultimately goingto be good for us.
Us taking on this ownership isa good thing because it allows
us access to influence over apart of the market that we're
supporting through our fundingof these founders.
(15:43):
I assume that somebody islooking at this saying it's a
good idea, and you said it'slike you're getting something
extra for free.
That's fine, but once itbecomes an asset of the
government, my question is wedon't have experience managing
equity assets.
Therefore, we need to thinkabout the infrastructure and
(16:07):
maybe create a sovereign wealthfund.
We need to think about theinfrastructure and maybe create
a sovereign wealth fund, andmaybe, you know, maybe this all
comes together in the end of,you know, in the fourth year of
the term, when we get asovereign wealth fund.
But my question is what goes onLike?
When do we start owning theshares, who owns them, where are
they kept and how are theymanaged?
This, I don't think that's a,you know, 10% of what is 10% of
(16:32):
Intel.
Now, what are they about?
$40 billion.
Clem Miller (16:37):
I don't have it right in front of me, so let's
say it's $4 billion.
Steve Davenport (16:41):
It's only $4 billion in assets.
We can just say that's like theforest land in California and
we can just ignore it, right.
Or we could say why don't wereally try to make sure that the
setup and this is in place tobenefit others and to benefit
the companies and figure it out?
(17:01):
I just think we're rippingalong in these different
pathways with stablecoin andBitcoin and private equity and
401ks and there's just not whatI would call a thorough and
clear analysis that explains thewhat, the why and the who of
(17:25):
willing to impact.
Is that too much to ask one,you think?
Clem Miller (17:33):
I think you know, for government to be effective,
it needs to be able to know whatit's doing right.
And I don't know, I don't knowthat.
I don't know that it actuallyknows what it's doing.
When it comes to owning sharesof companies, yeah, I can see,
you know, in the heat of a of afinancial emergency, I can see
(17:58):
bailing out banks, insurancecompanies on a temporary basis,
basis treasury or Fed holdingthose shares and then selling
them pretty quickly coming outof it.
I can see that, but on anongoing basis, to have a
(18:19):
sovereign wealth fund.
You know this isn't what youknow sovereign wealth funds.
You know this is not asovereign wealth.
I mean what we're envisioninghere.
You might call it a sovereignwealth fund, but it's not a
sovereign wealth fund, I agree.
Steve Davenport (18:37):
It's a repository toward which I take
this asset.
Clem Miller (18:40):
I'm not saying that we're— A sovereign wealth fund
is supposed to invest thewindfall proceeds of, you know,
basically, natural resources isusually the case.
You know Norway, you know Texas, alaska, saudi Arabia, kuwait,
(19:01):
uae, qatar.
All those are places that havesovereign wealth funds that were
funded by oil and natural gasrevenues, excess ones, and where
the sovereign wealth funds are,you know, at least supposedly
for the benefit of the people,for the future residents of
(19:21):
those countries, after oil andgas runs out.
That's the general situation ofa sovereign wealth fund.
So, while they may call it,while some may call what the US
would do a sovereign wealth fund, it's really, like you said,
it's a repository of assets, ofa Hodgepodge.
(19:45):
Hodgepodge of assets that theUS government might acquire, or
positions that the US governmentmight acquire.
Steve Davenport (19:54):
So let's go back to what is our purpose here
to help investors and thinkabout this.
So, if we look at thissituation, intel as a holding
might not be in your portfolio,might not be in my portfolio, be
in your portfolio, might not bein my portfolio does the
government owning 10 make thatasset change from a hold, a buy
(20:16):
or a sell?
Um, because of the involvementwith the government and the
government now being a 10shareholder, is it?
Is it better?
Is it worse?
Is it the exact same?
Clem Miller (20:29):
I think it's.
It doesn't make me I mean Idon't hold it, I don't hold
intel now and it didn't.
You know, the purchase of, orthe the acquisition of those
shares uh doesn't make me wantto buy it anymore.
Uh, that doesn't want to makeme buy it when I don't hold it
(20:50):
already, right, so that's the.
I mean I didn't even want tolook into it because of that,
right, I mean that tells me.
Steve Davenport (20:59):
I think that you and I realized there was
some overarching kind of youdon't get something for free and
now they're paying with equity.
And how much they pay withequity ultimately could be
judged as excessive, or maybeit's a deal, but I don't know
how much that would cost Intelon their own to get the loan for
(21:22):
that foundry.
Given their balance sheet, Ithink it would have been a
higher risk loan.
So therefore I would say itwould have been in the you know
four or five percent higher.
Therefore, if we say it's fouror five percent higher on four
billion dollars or whatever theloan is, you know it can come,
(21:42):
you can come up with a valuation.
But I guess what I'm saying ishow do we look at it in terms
and perspective of as aninvestor?
And I would say that it'ssomewhat of a positive because
it creates a government interestin not seeing that equity go to
zero.
Clem Miller (22:03):
Let me raise a scenario.
Steve Davenport (22:07):
We have two good scenarios.
Clem Miller (22:09):
We're skeptical but we're not cynical Non-zero
probability scenario, but maybeclose to zero.
So the government owns 10% of acompany.
Let's say the government owns10% of a bunch of companies,
right?
So Congress passes a law andsays, uh, from now on,
(22:31):
government shareholdings, uh arehigher in the capital structure
than private shareholdings inuh in those companies.
So let's say there's abankruptcy, uh, creditors get
paid off first, lenders get paidoff first.
What's left goes to theshareholders.
(22:55):
Oftentimes in bankruptcies,shareholders get wiped out.
So what happens if there's agovernment shareholding and it
has priority in the capitalstructure is that the government
might get paid out 50% on theirshareholding and it has
priority in the capitalstructure is that the government
might get paid out 50 percentright on their shareholding and
the rest of us would get paidout zero.
So I see that as a as apossibility that government
(23:20):
might, might pass such a law andif companies you know to
protect their privateshareholders, you know they
might pay back those loans,those government loans.
But what if they can't pay backthose government loans and
there's a bankruptcy?
Then you could get you know,you could get you know your,
(23:42):
your shareholding go down tozero.
Nevertheless, I see what you'resaying is that you know, if
government's putting in somemoney, you know, maybe the
government has some incentive totry to keep that company going.
You know, I don't.
Steve Davenport (23:56):
I wouldn't really necessarily count on that
, Um, but I'm not sure whatability government has in this
space because they've neverreally operated in the spits.
Yeah, so that's the way I wouldlook at it is, I'm from
Missouri, show me.
I mean, I think that for thisspace, just like the 401k space
(24:17):
I think it's TVD, you know to bedetermined, I hope that it's
put in the right context, it'ssupervised and there is some.
You know, what are we going todo with the dividends?
No-transcript.
(24:49):
Do we use the cash for, youknow, future aid to the company?
I look at the dividend andthink you know that's 10% of
your dividend is going to the USgovernment, in addition to
whatever you pay in taxes andother.
You know, does it help you Ifyou're in town when you're doing
your taxes?
(25:09):
I don't know.
I mean, it depends on how welook at this position, but I
guess I'd say it feels to melike Clem.
We need to take a step and stepback, and I love the idea of
capitalism and government andthe proper separation of church
(25:31):
and state.
I've always thought that youshould be able to operate Tell
me what the rules are, tell mewhere the highways are, tell me
how I should function in termsof the environment, but then I
operate as a businessman and Ido whatever I think is right.
But then I operate as abusinessman and I do whatever I
think is right.
And now it feels like they gota loan and I don't know if the
(25:53):
loan ever excluded the idea ofgiving warrants and equity, and
Trump asked for it and he got it, and so maybe we've all been
making a mistake by not askingfor more.
Glenn, will you give me amillion dollars?
Clem Miller (26:17):
I promise I'll pay it back.
I think I'd rather have equityin you.
Steve Davenport (26:21):
Holy shit, what kind of a relationship is this?
You're not only a usury.
You want to own me, I'm anyway.
Um, I don't know.
What do you think of theinvestment issues for this, or
for people who are listening?
What have they learned or what?
(26:41):
What do they need to know aboutthis in terms of, hey, when I
see the government on myposition in my company, I should
feel better, worse, the same,or I don't know how to feel
because I don't understand thestructure in which they're gonna
be in well, I think that rightnow, when you look at companies
(27:09):
that the government is bailingout, I think you have to put
your skeptical hat on and saywhy were they bad in the first
place?
Clem Miller (27:21):
Why do they need to be bailed out, these companies?
That's the key question, rightwhy do they need to be bailed?
Steve Davenport (27:29):
out.
Clem Miller (27:29):
There's a cyclicality that causes over
investment in times of froth andunder investment following now,
if you get into a, you know, abroader situation where lots and
lots of companies, includingsuccessful companies, are
required to take governmentequity infusions, then we're
(27:55):
into a little bit of a differentworld where there's, you know,
government is then becomeshighly involved in the operation
of different industries.
For example, what if thegovernment takes equity shares
in defense stocks?
Then is the government evenmore involved in the defense
(28:19):
industry than it normally is.
So I think that's a differentworld if it becomes a broader
issue.
Steve Davenport (28:32):
The idea here is really just to prepare I like
to think of.
What we're trying to do is toprepare investors for some of
the eventualities that mightcome with this ownership by the
government.
And if you owned Intel becauseyou got a low cost basis and you
bought it in the late 80s, it'sprobably still up a lot and you
(28:52):
probably have to make somewhatof a decision as to whether this
10% stake is significant to you.
If your position in Intel isn'tsignificant, then it's not
really an issue.
But I think for some people wholive near Intel or grew up and
work there, it is an issue and Ithink that my one piece of
(29:15):
advice would I'm not sure thegovernment is any better at
managing positions in Intel thanit is in managing roads,
defense, oh yeah, and otherthings.
So therefore I would saygovernment involvement in my
equity.
I'm a purist and I would sayit's a negative.
And I understand they may havegiven them money that would have
(29:39):
cost them more if they went tothe market on their own, which
tells me they're getting abenefit and they're paying for
it with their equity.
But I still look at things andsay equity ownership of
companies in the US marketplaceis not the role of government.
The role of government is tocreate the environment so that
(30:00):
people can operate and succeed,and it's not to take an interest
and then have an obligation tofuture interest if the company
has problems.
And I also think it needs to befully understood how we're
going to manage that position.
If we get a 20% profit after ayear, do we take 20% off?
(30:21):
I think that if this wereconsidered in light of all the
things that we're trying to doas a nation, it's up there.
I would like to see some of ourenergy profits and energy lease
revenue go directly to asovereign wealth fund.
That, to me, would offer the USbetter chances of success in
(30:45):
the future, because we'rethinking about the next
generation.
I think right now it goes intothe general fund and, like most
things, the general fund justgets piled up and you don't
really see what the money thatcame from energy really led to.
So I would like to see us dosomething with the sovereign
wealth fund.
(31:06):
I think we're a big enoughnation and we have enough ideas
that we need something to helppeople who are operating in
these spaces where energy mightdrop away.
South Dakota, having a greattime.
The, the, the, the, the, theshale and the production there
has brought jobs and prosperity,but will it last forever?
(31:29):
Of course not, of course not.
And so, therefore, a goodthinking, you know a wise
government would say, yeah,let's take a certain percentage
of that you know profit thegovernment makes from that lease
and put it towards somethingthat has a long-term benefit to
the people of South Dakota.
I don't think it's, you know,but is this really where we're
(31:55):
focused?
You know, with the Ukraine andwith Israel and Gaza gets, you
know, and Russia putting youknow, drones into Poland.
Is this what we're focused on?
Clem Miller (32:10):
You know, making sure stablecoin gets into 401ks
and making sure we havegovernment ownership, because
they took a loan there'scertainly a lot more important
things out there than stablecoinand uh and 10 shareholdings and
intel and so on, correct?
Steve Davenport (32:24):
so all I'd say to people is take it in, try to
understand it.
But if you decide to sell yourIntel, I'm not sure that you
know we're necessarily the factthat we made this ownership
decision.
I'm not sure it's a.
It's a going to the moon, asthey.
(32:44):
As they say, now that thesupport of government is there,
intel is unstoppable.
Clem Miller (32:53):
There's definitely no guarantee of that, and I
think it's less likely that itwould have a surge like that.
Steve Davenport (32:58):
Correct, but I'm trying to be balanced here,
clement.
I'm not simply a go-go equityguy like you are.
That said, yes, the governmentshould own their shares.
We have to think in a biggerstructure.
Government look, look thecommon good, clem, not just the
good for Clem's portfolio, right.
Clem Miller (33:18):
Good Government.
You know, the differencebetween what our government
would be doing and an actualsovereign wealth fund is that
sovereign wealth funds try tomake a profit.
Right, they try to generatereturns for the taxpayer and I
don't know that buying thingslike a 10 percent shareholding
(33:38):
in Intel or a 10 percentshareholding in defense stocks I
don't know that that stuff isrelated to generating a profit.
I think it's more trying toachieve strategic goals.
Steve Davenport (33:57):
Okay, I mean, if it's a strategic position,
then we should hold it more thanfive years, not talk about
doing anything with it.
I just want to know theguardrails.
If there are no guardrails,tell me that Well, right now
they're going to go off themountain and it doesn't matter
what they build on the mountain.
Clem Miller (34:16):
Yeah, right now there are no guardrails because
we've got an administration thatis frenetic, right in terms of
its policymaking and doingthings that are being challenged
in the courts and where wereally haven't gotten a lot of
(34:41):
insight from the Supreme Courtas to where some of those
guardrails are.
I guess we'll see in a fewmonths maybe two, three, four
months what the Supreme Courtsays on tariffs.
But about government ownership,who knows right?
Who knows?
Steve Davenport (35:03):
I mean, I think it's an exciting.
It's a good topic for podcasts,because I think there's so much
unknown that we can go downthese paths and think about you
know, well, maybe it becomes abroader policy and we think
about it more holistically.
We think about how governmentand business can work to help
each other, and not necessarilyin a controlling or negative,
(35:27):
you know, manner.
Right, I think there's a lot ofthings we should be thinking
about in terms of, you know,immigration and how many of
these people who are gettingPhDs and masters, how are they
influencing our labor force?
And if we were to grant themmore access to citizenship, you
know, would our STEM and ourbusinesses be better off?
(35:49):
I think that there's a lot ofissues like this, that our
growth rate is determined bywhat issues we focus on.
And is this going to change thegrowth rate in the movements of
our US technology industry?
I don't know.
I think it's kind of helpingout a hobbled company.
I agree A hobbled company isn'tlikely to suddenly become a
(36:13):
leading company just because ofthis loan.
I'd love to believe it could.
I'd love to believe ittransitions and turns itself
around, and companies do turnthemselves.
So I'm not ruling it out, butit just feels to me like, as you
said, overreach, and again I'dput a TBD on this.
(36:34):
It's to be determined whetherwe'll you know.
So do you have any finalcomments?
Clem Miller (36:41):
No, yeah, just one last final comment.
Yeah, just one last finalcomment, and that is you know,
for a long time I worked for agovernment agency that called
the Export-Import Bank, thatprovided financing for US
exporters doing businessoverseas, and I guess you could
say in that context that we diddo a bit of picking of winners
(37:05):
and losers and, you know, wewere receptive to applications
from companies who really neededthe business and I think that
the mission of the export importbank was a good one.
Uh, but I also know that theyou know that the export import
bank was really not in theposition to pick winners and
(37:28):
losers.
So I just don't think,extrapolating from my experience
there, I just don't think thegovernment has the capability to
effectively pick winners andlosers.
I just don't see it.
Steve Davenport (37:45):
Yeah, and like most things, we squabble and we
argue, but I think at ARC weagree on most things.
I agree with your statementsand I agree that this just
doesn't feel right.
Could it be right?
Absolutely, it could all workout well, but somebody has to be
on the contrary to make sure wequestion the right things so
(38:09):
that we ultimately put it in theright position to succeed for
the American people.
Ultimately.
That's what I want, that's whatGlenn wants, I think it's what
everyone wants, but we've got tosomehow analyze it in such a
way so that the right questionsare asked and the right
guardrails are put in, andhopefully that happens and
(38:30):
hopefully this Intel positiongoes from $4 billion to $40
billion and we're allbeneficiaries.
So I guess I'd say people enjoythe podcast.
We appreciate you listening, weappreciate your support,
support and we appreciate yourlikes and shares.
Please let us know how we cando better and what else we can
(38:53):
do to help you on your journeyto financial wellness.
Thanks everyone, thank you,bye-bye.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
CrimeLess: Hillbilly Heist
It’s 1996 in rural North Carolina, and an oddball crew makes history when they pull off America’s third largest cash heist. But it’s all downhill from there. Join host Johnny Knoxville as he unspools a wild and woolly tale about a group of regular ‘ol folks who risked it all for a chance at a better life. CrimeLess: Hillbilly Heist answers the question: what would you do with 17.3 million dollars? The answer includes diamond rings, mansions, velvet Elvis paintings, plus a run for the border, murder-for-hire-plots, and FBI busts.